Federal Reserve Bulletin, 1983-02

VOLUME 69 • NUMBER 2 • FEBRUARY 1983 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 • Griffith L. Garwood • 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. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Helen L. Hulen. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 61 THE HOUSING MARKET: lem and says that the International Mone- RECENT DEVELOPMENTS tary Fund is at the center of the process of AND UNDERLYING TRENDS understanding and cooperation that has marked the response to this problem, be- The recovery in residential construction fore the House Committee on Banking, activity now under way is being supported Finance and Urban Affairs, February 2, by postponed demands for shelter, but 1983. housing requirements associated with population growth are apt to moderate, and the 91 ANNOUNCEMENTS continued high cost of housing is likely to favor the construction of smaller housing Amendment to Regulation D to implement units requiring fewer resources. congressional action exempting money market deposit accounts from the phase-in 71 STAFF STUDY reserve requirements of the Monetary Control Act of 1980. (See Legal Developments.) "Bank Capital Trends and Financing" reviews trends since 1970 in bank capital Gross income of the Federal Reserve Banks ratios and presents simulations of bank cap- amounted to more than $16 billion during ital from mid-1982 to year-end 1986 both for 1982. all banks and for the nation's 17 largest Proposed regulations to implement the banking organizations. Bank Export Services Act; proposed amendments to Regulation Z concerning 73 INDUSTRIAL PRODUCTION arrangers of credit, student loans, and de- Output increased about 0.9 percent in Janu- termination of annual percentage rates. ary. Changes in Board staff. 75 STATEMENTS TO CONGRESS Publication of supplement to the Board's list of over-the-counter stocks that are sub- Paul A. Volcker, Chairman, Board of Govject to its margin requirements. ernors discusses some general considerations of domestic and international eco- Admission of three state banks to membernomic policies within the context of recent ship in the Federal Reserve System. and prospective developments and says that the stage appears set for sustainable 93 LEGAL DEVELOPMENTS recovery in business activity, before the Amendments to Regulation D; various bank Joint Economic Committee of the U.S. holding company and bank merger orders; Congress, January 27, 1983. and pending cases. 80 Chairman Volcker testifies on the threat posed by the heavy indebtedness of some AL FINANCIAL AND BUSINESS STATISTICS developing countries and the related exposure of the commercial banking system of A3 Domestic Financial Statistics the industrialized world and some of the A46 Domestic Nonfinancial Statistics measures necessary to deal with this prob- A54 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 GUIDE TO TABULAR PRESENTATION, A73 FEDERAL RESERVE BANKS, BRANCHES, STATISTICAL RELEASES, AND SPECIAL AND OFFICES TABLES A74 FEDERAL RESERVE BOARD A70 BOARD OF GOVERNORS AND STAFF PUBLICATIONS A72 FEDERAL OPEN MARKET COMMITTEE A76 INDEX TO STATISTICAL TABLES AND STAFF; ADVISORY COUNCILS A78 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Housing Market Recent Developments and Underlying Trends This article was prepared by James L. Freund of cost of housing during the past decade also will the Board's Division of Research and Statistics. help shape the course of residential construction Eric L. J or gens en provided research assistance. in the future. The inflationary experience of the 1970s and early 1980s has had profound effects on the RECENT DEVELOPMENTS housing market. The burst of home prices during IN HOUSING MARKETS that period along with high mortgage interest rates—caused in considerable measure by fears Homebuilding and house sales have been deeply of further inflation—raised costs of carrying new- depressed of late. In the second half of 1981 and ly purchased houses relative both to family in- the first half of 1982, the annual rate of private comes and to prices of other goods and services. housing starts fell below the million-unit mark for Since 1980, rising unemployment and slack in- four consecutive quarters (chart 1). During the come growth in general also have discouraged previous three decades new production had been housing activity. that low in only two isolated quarters. In fact, Although the recent period was dismal for housing starts during the past two years recorded those producing and selling residential real es- the lowest annual totals since 1946. tate, 1982 ended on a positive note. As mortgage House sales also were depressed in 1982. Sales rates declined during the year and house prices of existing homes plummeted to their lowest total stabilized, homebuilding activity gathered con- in more than a decade, and sales of new houses siderable strength. With underlying demand for fell to their slowest annual pace since such data housing likely to remain strong in the near term, were first collected in 1963. As the demand for any further improvement in financial conditions homes softened, pressures on prices abated. The can be expected to foster additional gains in average price of existing homes sold (not adjustresidential construction. ed for changes in quality or for concessionary Longer-term prospects for the housing market financing) rose less than 5 percent during both also depend on a favorable financial environment. In this connection, major changes during 1. Total private housing starts recent years in the sources and the methods of funding residential real estate transactions have given mortgage markets better means to cope with financial instability and uncertainty. However, the outlook for housing also will be determined by underlying demographic and economic developments. Much of the initial demand for housing created by the maturing of young people born during the baby boom of the 1950s and the early 1960s has already been felt in the market, and the negative influence of the ensuing "baby bust" is beginning to damp incremental demand for shelter. A significant increase in the relative Quarterly averages based on Census Bureau data, seasonally adjusted at annual rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

62 Federal Reserve Bulletin • February 1983 1981 and 1982; this compares with double-digit 2. Relative weakness of recent housing starts rates during each of the three preceding years. Index Increases in prices of new homes sold also slowed considerably. Indeed, the average sales price of a new house in the second half of 1982 was virtually unchanged from that of a house of comparable quality a year earlier. Alternative Means of Providing Housing As the cost of traditional units has risen and Peak quarter production has fallen, alternative means of pro- The curve labeled typical cycle plots the median values for quarters viding housing services apparently have inin cycles in housing starts from 1950 to 1978. The values on both creased in importance. For example, the produc- curves are indexes, with the peak quarter of each cycle equal to 1. tion of manufactured units (mobile homes) has declined little relative to its pace in the late cycles (chart 2), starts have risen sharply from 1970s, when financial and economic conditions the quarterly postwar low rate of 870,000 units were more favorable. During the past two years registered in late 1981. mobile homes have accounted for nearly 20 Sales of homes also improved considerably percent of all new housing units produced, up toward the end of last year. As the stock of from 12 percent just four years earlier. unsold new units fell relative to current sales and Other ways of making up for reduced produc- as new houses sold more rapidly (chart 3), buildtion of traditional dwellings have included expan- ers stepped up production. By the final quarter of sion or subdivision of existing residences, prolonged use of older units of marginal quality, and conversion of nonresidential structures to hous- 3. Market conditions for new houses ing units. Apparently, an unusual number of new Months' supply at current sales rate dwelling units are being supplied through such unconventional means. While all other expenditures on residential investment declined more than 50 percent in real terms between 1978 and 1982, spending on additions and alterations to existing homes increased 10 percent after adjustment for inflation. Moreover, growth in the number of occupied housing units has exceeded the number of new traditional dwellings completed in recent years, suggesting that more housing units were created than lost from existing structures. Historically, the reverse has been true. The Recovery of Housing Activity The easing of interest rates on mortgages since the fall of 1981 has spurred a recovery in residential real estate markets. By the fourth quarter of 1982, total private housing starts had risen to an The value plotted for inventories is an estimate of the number of annual rate of 1.3 million units. Although activity months' supply of new single-family houses for sale by merchantduring this upswing is still well below levels of builders at the end of that quarter, assuming that the then-current pace of sales is maintained. The pace of sales is the seasonally adjusted new construction at comparable stages of earlier number of months between the start and the sale of the house. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Housing Market 63 1982, single-family houses were being started at were still tight by historical standards. Morean annual rate of 807,000 units. This level of new over, rents rose more rapidly than operating construction was nearly 50 percent above the costs during the year, reversing the pattern typicyclical low reached a year earlier. cal of the last decade. These positive influences On balance, construction of units in multifam- on profitability, along with favorable changes in ily structures remained depressed in 1982. But the federal income tax laws regarding rental activity improved during the course of the year, properties, helped support production. and by year-end starts of such units were up more than 40 percent from their recent quarterly low in late 1981. Starts of multifamily units DEMOGRAPHIC INFLUENCES intended for sale (condominiums and coopera- ON HOUSING MARKETS tives) continued at a relatively brisk rate. During the past two years, these units accounted for The recent weak performance of the housing around 40 percent of all multifamily starts; at the market primarily reflects adverse economic and peak of the housing boom in 1978, units intended financial conditions of a cyclical nature. If job or for sale accounted for only 20 percent of multi- housing prospects are poor, a young adult may family construction. delay leaving home or may choose to live with Construction of rental units in multifamily friends. Or a growing family may decide not to structures was buoyed during 1982 by a push to move to a larger house. start dwellings under the expiring section 8 rental After a period in which decisions to form a subsidy program of the Department of Housing new household or to find another residence have and Urban Development (HUD). At the same been delayed, a rebound may be expected. Curtime, incentives to build unsubsidized rental rent housing markets reflect this pattern. With a units improved (chart 4). Although vacancy rates substantial number of individuals born during the increased late in the year, most rental markets baby boom still reaching the prime ages for household formation, underlying demand for ad- 4. Market conditions for multifamily units ditional housing units clearly has exceeded the 1 million traditional dwellings built per year in 1981 and 1982. Increases in the number of new units supplied by nontraditional means have not, in all likelihood, filled this gap. Thus, if financial and economic conditions permit, this postponed demand should prove stimulative in the near future. On the other hand, demand for housing generated by longer-term demographic factors is likely I i i i i \ \ ^mmm to abate in coming years. The growth of the Percent change from year earlier population old enough to form households (15 years of age or older) is expected to slow markedly once it begins to reflect the sharp decline in births during the mid-1960s (chart 5). As babies born during the surge of births in the 1950s matured in the 1970s, the adult population grew almost 3 million persons per year. This pace more than doubled that of two decades earlier (1.4 million) and was much higher than that of the 1960s (2 million plus). Largely reflecting these population trends, the number of households The data on rental vacancies are from the Census Bureau and are grew 1.75 million per year on average in the not seasonally adjusted. Residential rents are from the Department of Labor and cover both single- and multifamily units. The operating cost 1970s; this rate compared with about 1 million a index, which covers only multifamily units, is calculated by the year in the 1950s and the 1960s. Federal Reserve from Department of Labor data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 Federal Reserve Bulletin • February 1983 5. Demographic factors influencing housing demand sure of the propensity of people to form separate - •• Mittens households is the headship rate—the ratio, for a given age group, of households to population. Headship rates for all age categories have risen steadily in the decades following World War II, as a larger proportion of the population has chosen to live alone or in smaller households (top panel of the table). In 1950, for instance, there were 39 households for every 100 persons aged 25 to 34 years old; in 1980 there were 50. Headship rates for all other age groups also rose 1940-50 1950-60 1960-70 1970-80 1980-85 1985-90 noticeably during the same period. While growth in the number of households primarily reflects Average annual rates, from the Census Bureau. Projections for 1980-85 and 1985-90 are derived from the Census "middle" series. population trends, these increases in headship Population is noninstitutional residents 15 years and older. rates have had a positive effect. For example, if headship rates had stayed at 1970 levels through- During the first half of the current decade, out the subsequent decade, the average annual annual growth in the adult population is apt to growth in households during those 10 years slow to around 2 million persons, about the same would have been close to 1.3 million rather than as in the 1960s. In the latter half of the 1980s, the the 1.7 million actually experienced. expansion of the adult population is likely to be The rise in headship rates may have slackened even slower: the Bureau of the Census projects in recent years (bottom panel). Although the an average annual increase of only 1.6 million aggregate headship rate has moved up during the adults in that period. This deceleration inevitably past five years, the incidence of households will be translated into slower growth in house- among younger people (15 to 34 years old), for holds and thus less incremental demand for hous- instance, has declined somewhat. The latest eviing units. dence could mark a fundamental change in social The demand for dwelling units also depends on attitudes or simply a temporary slowdown relathow economic and social forces affect the rate at ed to poor job prospects and to difficulties in which households are formed from a given popu- housing markets. If the longer-run trends toward lation. Earlier departures by young people from individual and smaller households moderate or home, fewer marriages among individuals living are reversed, the slowing of demand for housing alone, and more divorces all create demand for from less rapid growth in the adult population additional housing units. The most common mea- will be reinforced. Headship rates Number of households per 100 persons Age group YYeeaarr 15 and over 15-24 25-34 35-44 45-54 55 and over Historical trends 1950 41.0 9.9 38.9 48.0 51.3 56.9 1960 43.8 11.1 43.3 49.0 52.9 59.0 1970 44.6 12.8 47.5 51.5 53.1 62.3 1980 47.0 15.8 50.5 55.0 55.7 63.7 Recent developments 1978 46.6 15.5 50.8 54.4 54.6 63.8 1979 46.7 15.7 49.9 54.2 55.1 64.1 1980 47.0 15.8 50.5 55.0 55.7 63.7 1981 47.3 15.6 50.6 55.2 56.4 63.8 1982 47.4 15.0 49.9 55.9 56.0 64.2 SOURCE. Estimates derived from Census Bureau data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Housing Market 65 THE HIGH COST OF SHELTER The rise in relative house prices reflects, in large part, a sharp escalation in building costs in Another fundamental influence on housing de- the 1970s. The cost of residential construction mand is the cost of housing relative to family increased 136 percent in that decade, while the incomes and to the prices of other goods and cost of production for all goods and services was services. Although in the long run most decisions up 96 percent. Subsequent declines in relative to form households do not depend on housing construction costs, which could be largely cyclimarket factors, the size and the quality of units cal in nature, have offset only part of the earlier produced do. The types of structures built, in increase (chart 6). turn, determine the share of total resources ab- 6. Relative construction costs of residential structures sorbed by the housing sector. During the past decade or so, some basic changes have raised the relative cost of acquiring shelter, especially units intended for owner occupancy. These changes are likely to be felt in housing markets for some time. Owning a Home For most households, owning a home, whether through a condominium, cooperative, or tradi- Relative cost is the fixed-weight price index for residential constructional arrangement, has been a good investment tion investment divided by the fixed-weight price index for gross business product. The basic data are seasonally adjusted indexes. during the postwar era. Because most families 1972=1.0, from the Bureau of Economic Analysis. can use "leverage" by borrowing the bulk of the purchase price, appreciation in home prices has The cost of financing all types of home purbeen translated into high rates of return on initial chases also has risen sharply. The average interinvestments. And the real cost of borrowing est rate on conventional first mortgages closed often has turned out to be quite low, as borrow- by institutional lenders was 8 percent in 1970. By ers with fixed-rate mortgages have found that the fall of 1981, the average rate had climbed to unexpected inflation made their debt service a more than 15 percent, and it was still in the 13 bargain. Moreover, as inflation has moved fam- percent range in late 1982. Because financing is ilies into higher tax brackets, the substantial tax crucial for the typical homebuyer, this increase advantages of homeownership have been en- in rates has added significantly to the carrying hanced. costs of a house. Between 1970 and 1982, the combination of higher prices and higher interest The Increased Out-of-Pocket Costs of rates helped cause the average out-of-pocket Homeownership costs of homeownership for new buyers (as traditionally measured in the consumer price The attractive returns that most homeowners index) to rise almost half again as fast as all other enjoyed during the past decade or so masked items in the CPI. developing problems caused by a sharp increase in the out-of-pocket costs associated with purchasing a house. Between 1970 and 1982, the Coping with the High Cost of Houses price of newly purchased dwellings increased dramatically relative to other prices. The average As house prices and the cost of credit surged, sales price of a new house, adjusted for changes homebuyers began to confront downpayments in quality, rose 190 percent during that period. and monthly carrying costs that claimed increas- The average price of an existing home (not ingly large portions of their resources. The high adjusted for quality changes) increased 230 per- out-of-pocket outlays—for downpayments and cent, while the consumer price index (excluding for monthly debt service—associated with home the cost of home purchase) rose 143 percent. purchase did not dim the desire to buy a house so Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

66 Federal Reserve Bulletin • February 1983 long as home prices were expected to continue or existing homes. The market price of houses is escalating rapidly relative to other prices and to fundamentally related to the cost of production interest rates. Because the "true" cost of home- of new units over the long run. Higher land costs, ownership was still perceived to be quite low elevated developmental expenses, limited availwhen capital gains and tax advantages were ability of forest products, and stricter environtaken into account, what appeared to many ob- mental standards have contributed to increases servers to be serious problems of "affordability" in the relative prices of new homes that are really consisted of cash flow problems. Many unlikely to be reversed. For existing homes homebuyers and lenders found that necessary prices have fallen short of inflation in general monthly payments were too high for current during the past two years, especially when acincome levels, even though purchasing a house count is taken of the support to prices lent by was a sound investment decision. concessionary financing arrangements. Such de- Recent developments in a sense combine the clines in relative prices of homes have, however, worst of both worlds. Reflecting high interest only partially offset earlier increases. And these rates and the effects of earlier increases in house declines are unlikely to persist if the demand for prices, the carrying cost of a typical new house housing postponed over the past several years remained high relative to the average family reinforces the ongoing upswing in home sales. income in 1982 (chart 7). At the same time, the Moreover, even if fundamental forces were recent slowing in house price increases undoubt- working to lower home prices, the deflationary edly lowered expectations of price appreciation. process might be disrupted by short-run instabil- The prospect of lower capital gains, in turn, ity in the market. Falling prices could well generblunted the investment motive behind the de- ate expectations of further declines, and the mand for houses that had helped generate earlier specter of capital losses would discourage potengains in relative house prices. The reduced pace tial homebuyers. Difficulties in obtaining mortin sales of both new and existing houses testifies gages related to the increased risk of default to the damping effect of these developments. would further damage activity. In contrast, significant increases in the price of homes in excess of interest rates and the general 7. Carrying costs of new houses relative rate of inflation arguably could resuscitate deto average household income mand by lowering the true cost of homeownership through capital gains. But, as experience suggests, reinflating home prices would not be a 40 long-run solution because downpayments and monthly carrying costs would rise even further 30 relative to family incomes and other prices. These burdens eventually would choke off demand. Thus adjustments in home prices them- 20 selves do not appear to be a promising solution to 1972 1974 1976 1978 1980 1982 the problems of high housing costs. 4 Housing markets would, however, benefit The data plotted are the average annual payments to principal and interest on new-home conventional first mortgages closed by major from a resumption of noninflationary economic private lenders (Federal Home Loan Bank Board data) divided by growth. Gains in real income would gradually average annual disposable income per household (Bureau of Ecoease household budget constraints now associatnomic Analysis and Census Bureau data). ed with home purchases. Moreover, mortgage How will housing markets shed the legacy of interest rates would fall as lenders and borrowers high home prices and financing costs facing came to believe that inflation, including inhomebuyers? Significant relative declines in creases in house prices, would not be reignited. home prices would alleviate problems of meeting Even with such relief, homebuyers will be monthly payments. Barring an economic up- forced to cope directly with past increases in heaval, such declines are unlikely for either new home prices relative to the prices of other goods Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Housing Market 67 and services. Families may have to accept small- Financing Housing Transactions er houses with fewer amenities to keep out-ofpocket costs down. Or, to maintain the standard At the same time, thrift institutions became of their housing, they may choose to commit much less important as suppliers of residential more of their income to housing than has been mortgage credit (chart 8). In the mid-1970s savtraditional. Elements of both these adjustments ings and loan associations and mutual savings are likely. banks accounted for more than 60 percent of total net residential mortgage investment; during the past two years the proportion has been less The Persistent Difficulty than 20 percent. Part of this reduction can be of Producing New Rental Units attributed to an unwillingness to make mortgage loans due to transitory problems of cash flow and With homeownership more costly, renting profitability. But even when these problems are should be more attractive to many households. solved, the increased use of the new powers that But several factors continue to work against the thrift institutions have been given to acquire profitability of building rental units. The con- other assets could hold down their mortgage struction and the financing of rental housing lending in coming years. involve the same cost pressures as does single- Thrift institutions are likely, nonetheless, to family construction. Moreover, the profitability maintain a significant—albeit reduced—presence of multifamily rental units has suffered from the in financing housing transactions. Income tax failure of rents to keep pace with operating costs treatment continues to encourage them to hold during the past decade. The presence—or possi- mortgage-related assets. In addition, their experbility—of rent controls in many areas adds to the tise in residential mortgage lending will afford uncertainty of future income for investors in these institutions a competitive advantage in the rental properties. near term. Because the demand for rental housing is The development of the market for residential concentrated among lower-income groups, ob- mortgage passthrough securities has opened the taining rents in the market high enough to offset way for individual investors and financial instituthe full costs has proved difficult. By reducing tions with broad investment powers, such as the depreciable life of residential rental struc- pension funds and life insurance companies, to tures, the Economic Recovery Tax Act of 1981 invest more heavily in mortgage assets. Such significantly improved the tax advantages of this investors are likely to become more active in kind of investment. Nonetheless, the underlying mortgage markets. Recent court and legislative profitability problem in this sector remains a actions upholding the enforceability of due-ondeterrent to new building. sale clauses in mortgage contracts have removed this element of uncertainty from these markets. Moreover, the development and the acceptance THE CHANGING ROLE OF FINANCIAL of more flexible mortgage instruments should INSTRUMENTS AND INSTITUTIONS broaden the appeal of mortgage-backed securities for investors. During the late 1970s and early 1980s, dramatic Finally, to help borrowers avoid the burdenchanges have taken place in the way that housing some carrying costs of traditional mortgage artransactions are financed. The lifting of interest rangements offered by institutional lenders, rate ceilings at depository institutions and the home sellers have provided concessionary fifederal override of state laws limiting interest nancing. As long as cost pressures on homerates on conventional home mortgage loans have buyers persist, incentives will exist for seller eliminated two impediments to market activity. financing. Thus, directly or indirectly, diversi- In the past, these artificial barriers constrained fied investors and individuals, who together fithe flow of funds to the housing sector during nanced more than half of total net extensions of periods of high interest rates. housing credit in the past two years, are likely to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 Federal Reserve Bulletin • February 1983 8. Residential mortgage assets, by lender Diversified private investors include individual as well as institu- gages and mortgage-backed securities. The data for 1982 are averages tional investors. The share of thrift institutions includes both mort- for the first three quarters. remain important participants in mortgage mar- fixed-rate mortgage could regain its dominance. kets. If, on the other hand, financial and economic conditions are unsettled, new mortgage tech- New Mortgage Instruments niques and instruments can be expected to be used more widely. New types of mortgage arrangements have developed in recent years to meet the needs of a rapidly changing financial environment. Lenders A CONCLUDING NOTE who suffered from unanticipated increases in interest rates because they relied on short-term As the housing industry continues to recover sources of funds to make long-term mortgages from the current period of reduced production, have found adjustable-rate mortgages an attrac- its prospects will be determined by the longertive alternative to fixed-rate loans. In return for run market forces that influence the demand for sharing the risks of movements in rates, borrow- housing services. During the past several decers generally pay an initial interest rate that is ades these underlying influences have channeled lower than the going rate for traditional mort- a declining share of the nation's output into gages. Moreover, a variety of new mortgage residential investment. As a result, housing has arrangements let monthly debt service rise dur- accounted for a declining portion of the nation's ing the term of the loan. Most of these tech- reproducible assets (chart 9). niques—including graduated-payment mort- Real estate markets face a maturing populagages, short-term second mortgages at below- tion, high relative housing costs, and a possible market rates granted by sellers, and builder slackening in replacement demand for existing "buydowns" of interest rates—also offer bor- structures. Recent changes in the federal tax rowers lower initial payments than does a tradi- laws have emphasized incentives for investment tional level-payment mortgage. A second advan- in corporate capital. The simultaneous general tage of rising mortgage payments is that they cut in personal income tax rates, along with a better match the long-run growth in income diminution of inflation in general, has lessened typically experienced by borrowers. the tax advantages of homeownership. More- The evolving system of mortgage instruments, over, with the virtual termination of the HUD which gives investors and borrowers a broad section 8 rental subsidy plan, no large-scale array of choices with regard to the assumption of direct government program is in place to encourrisks and to payment streams, should allow resi- age private production. All these considerations dential mortgage markets to cope with a variety suggest that the share of the nation's output of developments. If inflation continues to abate devoted to housing is likely to continue to shrink. and interest rates fall further, the traditional Nonetheless, the owner-occupied dwelling Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Housing Market 69 9. Residential structures as a proportion buying a dwelling most households are likely to of reproducible assets emphasize the consumption rather than the investment features. In the 1970s, the size and the quality of new homes built increased even though households were getting smaller on average. In part, large units were bought with a view toward resale rather than toward the immediate living requirements of the occupants. Facing carrying costs that are high relative to income and expecting capital gains to remain moderate, households may respond by buying smaller units. Indeed, the median size of new houses sold in the past two or three years was somewhat smaller than those sold in the late 1970s. Reproducible assets include residential structures, nonresidential In summary, the recovery in residential conplant and equipment, nonfarm inventories, and consumer durables, all in 1972 dollars. struction activity now under way is being supported by demands for shelter that were postunit will no doubt remain a key asset for most poned in recent years. In the longer run, households. Homeownership still commands however, housing requirements associated with substantial tax advantages, and the ability to population growth are apt to moderate. And the finance a large proportion of the purchase price continued high cost of housing services is likely continues to provide a unique investment dimen- to favor the construction of smaller housing units sion to ownership for most families. But when requiring fewer resources. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

71 Staff Studies The staffs of the Board of Governors of the In all cases the analyses and conclusions set Federal Reserve System and of the Federal forth are those of the authors and do not neces- Reserve Banks undertake studies that cover a sarily indicate concurrence by the Board of Govwide range of economic and financial subjects. ernors, by the Federal Reserve Banks, or by the In some instances the Federal Reserve System members of their staffs. finances similar studies by members of the aca- Single copies of the full text of each of the demic profession. studies or papers summarized in the BULLETIN From time to time, papers that are of general are available without charge. The list of Federal interest to the professions and to others are Reserve Board publications at the back of each selected for the Staff Studies series. These pa- BULLETIN includes a separate section entitled pers are summarized—or, occasionally, printed "Staff Studies" that lists the studies that are in full—in the FEDERAL RESERVE BULLETIN. currently available. STUDY SUMMARY BANK CAPITAL TRENDS AND FINANCING Samuel H. Talley—Staff, Board of Governors Prepared as a staff paper in early 1983 In the past several years, U.S. banks have oper- are designed to indicate the conditions under ated in a difficult economic and financial environ- which the banking system and the multinational ment in this country and abroad. This unfavor- organizations should be able to maintain, or even able environment has resulted in an increase in improve, their capital ratios from the levels prebank failures and in the number of banks experi- vailing at mid-1982. encing financial problems. Because of these ad- The analysis of trends shows that the equity verse developments, banks, bank supervisors, capital ratios for both all banks and the 17 and depositors have focused increased attention multinational organizations have increased on bank capital and its ability to absorb losses. slightly since 1974, after a precipitous decline This study has two primary objectives. The during the early 1970s. The most important facfirst is to add historical perspective by reviewing tor accounting for the improved ratios since 1974 the trends since 1970 in bank capital ratios, the has been a substantial slowdown in the growth of sources of capital growth, and the composition of bank assets from the extremely high rates that bank equity financing. This analysis is performed prevailed in the early 1970s. However, a healthy separately for all insured commercial banks and level of retained earnings, as well as several for the nation's 17 largest banking organizations, innovations in bank equity financing in the past all of which operate on a multinational basis. The two years, also made important contributions. second objective is to present simulations of The equity financing innovations included the bank capital covering the period from mid-1982 issuance of floating-rate perpetual preferred to year-end 1986 for both all banks and the 17 stock and mandatory convertible securities, and multinational organizations. These simulations the use of equity for debt swaps. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • February 1983 The bank capital simulations indicate that the several years, the growth rate of nominal GNP commercial banking system should be able to will be considerably affected by the rate of grow at an annual rate of about 9 to 9'/2 percent inflation. If that inflation rate does not exceed from mid-1982 to year-end 1986 and still maintain the current rate, the annual growth rate of bank the industry's equity ratio at its mid-1982 level of assets during 1982-86 may not exceed 8 to 9 5.98 percent. The 17 multinational organizations percent. In that event, the capital ratios of both should be able to grow at a slightly faster rate— the commercial banking system and the large about 10 to 11 percent—over the same period multinational organizations could well improve and still hold their equity ratio constant at 3.98 somewhat over the next several years. This percent, the level in mid-1982. improvement would be a positive development, The growth rate of bank assets tends to ap- given the recent increased risk exposure of banks proximate quite closely the growth rate of nominal resulting from adverse economic and financial gross national product over time. During the next developments in this country and abroad. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

73 Industrial Production Released for publication February 16 and of basic metals, particularly steel, also advanced sharply. At 136.2 percent of the 1967 Industrial production increased in January an average, industrial production in January was estimated 0.9 percent after a revised gain of 0.1 11.5 percent below its latest high in July 1981 but percent in December. In both months large in- 1 percent above the low of November 1982. creases occurred in the output of automotive In market groupings, output of consumer products and defense and space equipment; in goods rose 0.9 percent in January as the produc- January the production of construction supplies tion of autos and home goods increased. Auto 1967 = 100 1967=100 "TOTAL INDEX 170 Materials output 170 150 / V v.\~ Products output 130 110 Business equipment 190 MATERIALS Nondurable 170 150 / Durable \ / v \ / X Consumer goods 130 110 CONSUMER GOODS Business supplies 170 Nondurable 150 vy \ 130 Construction supplies V. S v- * 110 1969-70=100 Annual rate, millions of units 180 18 140 14 ; MANUFACTURING Nondurable 10 J ^ Durable V' 1977 1979 1981 1983 1977 1979 1981 1983 All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: January. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 Federal Reserve Bulletin • February 1983 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Grouping 1982 1983 1982 1983 JJJaaannn... 111999888222 tttooo JJJaaannn... Dec.P Jan.e Sept. Oct. Nov. Dec. Jan. 111999888333 Major market groupings Total industrial production 135.0 136.2 -.8 -1.2 -.7 .1 .9 -3.2 Products, total 139.8 140.6 -.8 -1.1 -.2 .6 .6 -1.6 Final products 139.2 140.0 -.9 -.9 -.4 .7 .6 -2.0 Consumer goods 142.0 143.3 -.5 -.8 -.8 .6 .9 2.7 Durable 126.6 130.1 -1.2 -3.7 -1.7 1.8 2.8 8.3 Nondurable 148.2 148.5 -.3 .2 -.5 .3 .2 .7 Business equipment .. 147.5 147.4 -2.2 -2.3 -.3 .6 -.1 -14.4 Defense and space ... 114.6 115.5 .0 2.2 1.5 .9 .8 9.8 Intermediate products .. 142.0 143.0 -.7 -1.5 .2 .1 .7 -.3 Construction supplies. 123.1 124.8 -1.3 -2.4 .7 -.2 1.4 .5 Materials 127.7 129.4 -.6 -1.5 -1.2 -.6 1.3 -5.7 Major industry groupings Manufacturing 134.2 135.4 -.7 -1.5 -.7 .1 .9 -2.2 Durable 119.4 120.9 -1.1 -2.6 -.8 .1 1.3 -4.9 Nondurable. 155.5 156.3 -.1 -.3 -.6 .2 .5 .8 Mining 118.9 120.8 -1.9 1.0 .6 2.0 1.6 -16.4 Utilities 165.9 164.2 -.6 .2 -.3 -.8 -1.0 -4.4 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. assemblies, at an annual rate of 5.6 million units, production of basic metals and parts for consumwere about 10 percent higher than in December; er durables increased. Increases were reported however, production of trucks for consumer use for output of nondurable materials, particularly fell in January. Output of nondurable consumer chemicals and textiles, while the production of goods edged up as increases in food and clothing energy materials, reflecting gains in coal and were partially offset by a decline in consumer crude oil, also increased. energy products. Production of business equip- In industry groupings, manufacturing producment was essentially unchanged in January fol- tion rose 0.9 percent in January. Output of lowing a 0.6 percent rise in December, but the durable manufacturing increased 1.3 percent, level in January was still more than 20 percent with sizable gains in several industries including below its latest peak. Output of construction primary metals and lumber. Nondurable manusupplies increased 1.4 percent in January. facturing rose 0.5 percent, reflecting widespread Production of materials rose 1.3 percent in gains. Mining activity continued to increase January, reflecting gains in each major grouping. while utility production fell again. Output of durable materials rose 2.0 percent as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

75 Statements to Congress Statement by Paul A. Volcker, Chairman, Board ic and financial conditions, meeting this objecof Governors of the Federal Reserve System, tive could not be a simple mechanical matter of before the Joint Economic Committee of the adhering rigidly to a present guideline for money U.S. Congress, January 27, 1983. and credit growth. At times in the past year there have been indications of unusual demands for I appreciate the opportunity to appear before this highly liquid assets, evidently reflecting shifting committee today. In about three weeks, the preferences on the part of the public in an Federal Reserve will submit its semiannual mon- environment of uncertainty. Moreover, the monetary policy report to the Congress. At that time, etary aggregates, particularly in the latter part of I will be reporting on the details of monetary the year, have been distorted by a sequence of policy, including the Federal Reserve's objec- special developments—most prominently, the tives for the growth of money and credit over the maturing of all saver certificates and the introperiod ahead. This morning I will confine my duction of new deposit instruments. statement to more general considerations of do- These and other influences resulted in extraormestic and international economic policies with- dinary decreases in the observed velocity of in the context of recent and prospective develop- money—loosely speaking, the turnover of monments. ey balances. In fact, velocity has declined to an The past year and a half has been a difficult extent without precedent in the postwar period. period in the nation's economic history. Output We thus have had to approach monetary targethas contracted; too much of our industrial capac- ing and our operational decisions to provide ity lies idle; and unemployment is far too high— reserves with greater elements of judgment and the highest since World War II. But as we enter flexibility in the light of emerging developments. the new year, there are encouraging signs that There has been a need to take account of the recessionary pressures in some key sectors are possibility that underlying trends in the relationabating. Substantial progress has been made in ship between measures of money and economic reversing the inflationary trend of the past dec- activity may be shifting as inflation and market ade, and we can build on that progress. Of interest rates decline while, to a greatly incentral importance to that outlook are signs that creased extent, market-oriented interest rates productivity may be growing more rapidly after a are paid on bank deposits. In the end, we acceptdecade of increasingly unsatisfactory perform- ed some "overshooting" of the ranges we set for ance. Consequently, the stage appears set for monetary growth—relatively small for the broadsustainable recovery in business activity, bring- er aggregates M2 and M3, and sizable for Ml. ing with it the higher levels of employment and A number of factors, including the halving of real income that we all desire. The challenge for the inflation rate during 1982 and the recession, policy is to make that prospect a reality that can contributed to substantial declines in nominal carry forward for many years. interest rates all along the maturity spectrum in An important element in this improved outlook the second half of the year. Short-term interest is the change in financial market conditions over rates are now as much as 10 percentage points the past year. Federal Reserve policy has been below their earlier peaks, and long-term rates are aimed at avoiding monetary excesses that would down 5 to 7 percentage points. Meanwhile, equilead to resurgent inflation, while providing ty prices have risen sharply. enough liquidity to meet the needs of economic Lower interest rates for mortgages and—to a growth. In the midst of rapidly changing econom- lesser degree—for installment credit have helped Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • February 1983 to make the financing of purchases by house- in productivity would imply relatively modest holds more affordable. At the same time, busi- increases in unit labor costs—about two-thirds of nesses could begin to improve their balance all costs in the economy—and thus would prosheet positions. Bond issuance by nonfinancial long and reinforce the progress on inflation. corporations in recent months has more than For the time being, with excess capacity large tripled from levels in early 1982 as corporations and profits depressed, business investment in have been refunding short-term debt. new plant and equipment is likely to continue to Reflecting these developments, activity has fall. Some delay in the recovery of capital spendbeen improving for some months in the credit- ing is not out of line with previous cyclical sensitive sectors of the economy—housing and experience, as businesses initially boost operatconsumer durables. The most notable turn- ing rates for existing capital rather than invest in around has been in real estate markets. Con- new plant and equipment. But it is critical to the struction of new, single-family homes is up a long-run health of the economy that a recovery in third from last summer's low levels and sales of business fixed investment not be postponed too new and existing homes have climbed substan- long. Capital spending has a pivotal role in tially. Housing activity is still, of course, well extending the length and durability of an ecobelow earlier peak rates and below what we nomic expansion and in improving productivity would like to see over time in order to ensure and living standards. that our growing population can be well housed; The outlook for business fixed investment is in but the inventory of unsold new homes is quite good measure dependent on renewed profits and low, and the improved financial climate bodes recovery, but also on a sense that monetary and well for further gains in this sector. With person- fiscal policies will succeed in fostering a more al disposable income relatively well maintained, stable financial and economic climate over time. with some improvement in the liquidity and debt During a period of transition toward price stabilposition of consumers, and with much more ity, some investment plans based in part on moderate price increases, consumer purchases expectations of rising prices may be cut back, of "big ticket" items also appear to be stabilizing particularly if conditions in the financial markets or improving. are slow to reflect the progress toward stability. The short-term business outlook is often domi- Cutbacks in some sectors of the energy industry nated by inventory adjustments, and 1983 may in 1982 may be a case in point. One important be no exception. Recalling the excesses of earlier factor affecting the financial climate and business recessions and faced with high borrowing confidence today is concern about federal budget charges, businesses made vigorous attempts to deficits and their effects on the cost and availabilcurtail the accumulation of unwanted stocks late ity of funds needed to finance private sector last year. The process moved more unevenly investment. This is a point I will return to later. over the summer as sales were disappointing, but The deficit also contributes to uncertainty picked up in the final quarter. Further liquidation about whether the gains against inflation can be would restrain production growth in the months sustained. By all the various measures, prices immediately ahead, but any sustained improve- rose 5 percent or less last year, the slowest rate ment in final demand could soon be reflected in of increase in a decade. To be sure, part of that more than proportionate increases in output. improvement reflected favorable food and ener- As production begins rising, we are likely to gy price developments, abnormally low comsee more substantial increases in productivity. In modity prices, the effects of the sharp appreciafact, productivity grew in 1982, which is unusual tion of the dollar, and more generally, the during a period of recession. Widely reported cyclical weakness of the economy. Obviously, efforts of businessmen and workers to increase we are still short of the goal of reasonable price efficiency and to reduce "breakeven" points stability. In fact, inflation is really only back to should pay off more visibly during a period of the pace of 1971, which was judged to be so expansion. Combined with continued modera- intolerable at that time that wage and price tion in nominal wage increases, such an increase controls were imposed, and the American people Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 77 —habituated to high and rising rates of inflation subnormal economic performance has been perfor a decade—remain skeptical about whether vasive, and unemployment in the industrialized the progress will be lasting. world has risen to levels unprecedented in the Unlike 1971, however—in fact, unlike the en- postwar period. The abrupt and disturbing intire decade of the seventies—trends of underly- creases in oil prices have certainly been an ing costs and inflation expectations are now important influence, first in aggravating the inflamoving in a favorable direction. I believe this tion, and then in the subsequent dislocation improvement can be sustainable as the economy attendent on the efforts of almost all countries to recovers its upward momentum. I alluded earlier contain that inflation by restraining demand. But to the favorable signs with respect to productivi- the stubborn inflationary pressures that arose in ty. At the same time, increases in nominal wage nearly all countries cannot be attributed to oil and salary costs slowed to a range of 6 to 7 alone, and there was, de facto, a broad consenpercent—a development that was fully consist- sus that policies needed to be directed toward ent with maintaining real incomes of workers restoring stability. because price increases were slowing more rap- While wide divergences remain among individidly than wages. ual countries, by now striking progress has been Clearly, the more restrained wage increases made generally in achieving lower rates of inflawere directly related to the pressures in labor tion. But, at the same time, growth has essentialmarkets during the recession. Total employment ly stopped, with real gross national product in fell. While layoffs were concentrated in the in- major foreign industrial countries showing no dustrial sector of the economy, even the service- significant change on average last year (from producing sector—the primary source of growth fourth quarter to fourth quarter). Most developin employment in recent years—experienced de- ing countries had an abrupt and substantial clining payrolls. The overall jobless rate reached deceleration from the growth rates of recent a postwar high of nearly 11 percent in December, years, from about 4 to 5 percent in 1979-80 to an more than 3 percentage points above the rate estimated Vz percent last year. In Latin America, before the current contraction began. growth apparently was negative. Obviously, success in dealing with inflation In this situation there has been a substantial cannot be based on an economy that stays in risk of recession feeding on itself internationally recession, with all the hardship and misery that and countries turning toward protectionism in an recession implies. We need to maintain modera- attempt to insulate their own industries. That tion in wage settlements and pricing policies as approach would, of course, be self-defeating. As the economy expands. In the near term, the slack protectionist measures spread from one country in the economy and the present momentum in to another, gains from reduced imports would be wages and prices should be consistent with con- offset by closed export markets. At the same tinuing restraint on unit labor costs. But sus- time, protectionist measures work directly tained improvement will also depend on a sense against the competition necessary to restrain of conviction that prices will remain under con- inflation. In the United States, as elsewhere, trol, and on prospects for rising real income even compromises have been made with protectionist as nominal income grows more slowly. Bargain- pressures. Noijetheless, we can take some satising practices and attitudes—built up during a faction from the fact that over all a liberal trading period of accelerating inflation—change only order has not broken down. Maintenance of that slowly, but surely success will fundamentally be approach, which has been a cornerstone of our dependent upon a sense that the financial envi- prosperity for a generation, seems to me critical ronment will remain conducive to progress to the outlook. against inflation. The implications for both mon- Our own vulnerability to weakness in internaetary and fiscal policy seem clear to me. tional trade has been conclusively illustrated by Other countries have been attempting to deal events in 1982. The slowdown in business activiwith some of the same basic problems that we ty abroad, combined with a surge in the strength have been facing. After a decade of inflation, of the dollar relative to other currencies, has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • February 1983 sharply curtailed our export opportunities—and heavily indebted to commercial banks and other merchandise exports now account for some 16 institutions in the industrialized world. percent of total output of U.S. goods. For several years, a number of large develop- From the beginning of the dollar's upsurge in ing countries had been increasing their foreign the fall of 1980 through November 1982, the debts at a pace that could not be sustained average value of the dollar rose more than 40 indefinitely, from the standpoint either of the percent against other major currencies; it has rising debt service burden on the borrower or of given up only a limited portion of that rise over the gradually increasing exposure relative to the past couple of months. Some of that strength assets and capital of the lending banks. For a was a reflection of the progress against inflation, time, the heavy borrowing helped to sustain and greater confidence in the price outlook is, of rapid internal growth in much of the developing course, healthy. The United States was also in a world, but increasingly the need for adjustment relatively strong current-account position in 1980 to reduce internal pressures and balance of payand 1981 and continuing into the first half of ments deficits became apparent. Some of the 1982, when some other major countries were borrowers started that process some time ago, running large deficits. However, in 1982 the but with inadequate force and conviction. dollar may also have been unusually strength- The slowdown in world growth helped expose ened by more temporary, and even noneconom- the increasingly precarious position of borrowers ic, factors. For much of the period our interest as prices of commodity exports fell, markets for rates were exceptionally high, and the apparent manufactured goods weakened, and higher real strength, stability, and security of the United interest rates increased debt-servicing require- States and of its financial system at a time of ments. The difficulties experienced by our Mexiwidespread financial pressures and political and can neighbors—the largest of the international economic uncertainty abroad played a role. borrowers—in maintaining their debt payments Under the combined impact of world recession last summer precipitated widespread public and an exceptionally strong dollar, our export awareness and concern about the potential repervolume dropped about 15 percent from the fourth cussions for the international financial system. quarter of 1981 to the fourth quarter of 1982, The problems are not unique to Mexico, or to considerably greater than the declines experi- banks located in the United States. Without enced by other industrial countries. While im- action to deal with these problems, the conseports have also declined, the change was small. quences could be harsh, not only for the borrow- As a result, the decline in real U.S. exports of ing countries but for their trading partners and goods and services during the recession has been for all countries dependent on a smoothly funcequal to nearly one-half the total decline in U.S. tioning financial system. But the fact is that GNP. In contrast to earlier periods of U.S. vigorous efforts are under way to deal with the recession, when our trade balance generally im- problems. With the active cooperation of the proved, thus tending to offset other areas of borrowers, the lenders, and the lending counweakness, the export sector has been one of the tries, these problems can be successfully remajor depressing influences on the U.S. econo- solved. my. While the dollar has lost some of the earlier A basic element in any program must be strong gains in recent months as our current account actions by the borrowing countries themselves to has moved into large deficit, the external sector restore internal and external equilibrium. It is is likely to remain a source of weakness for some particularly encouraging that a number of importime. tant developing countries have taken the signifi- The simple fact is that the health of the interna- cant step of negotiating comprehensive stabilizational economy and our trading position are tion programs with the International Monetary today highly important to our recovery and pros- Fund. Upon approving such a program, the IMF perity. The point is emphasized all the more by itself provides limited sums of medium-term fithe sharply deteriorated financial position of nancing; even more important, IMF imprimatur several large developing countries, countries should reinforce the confidence of other lenders. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 79 In some instances, governments, acting-bilateral- following the January 18 meeting of the Group of ly or through the Bank for International Settle- Ten, "a sustainable improvement in activity in ments, have provided temporary financing to the industrialized countries in 1983 can make an meet pressing liquidity needs as the IMF pro- important contribution to a lasting solution of the gram is established. indebtedness problem of many developing coun- On that base, commercial banks have acted tries." together in important instances to "roll over" I would emphasize the word "sustainable" in existing indebtedness and to assure enough addi- that communique. A short-lived recovery, withtional funding to permit time for orderly adjust- out staying power and accompanied by reignition ment. Those efforts, involving hundreds of banks of inflationary pressures, offers no real solution here and abroad, typically call for a reduced flow to our problems or those of developing countries. of new bank loans, commensurate with reduced It is in that context that I believe we need to payment deficits by the borrowers, and no in- approach domestic policy. There was a time crease in bank exposure relative to capital. Well when the American public felt confident about conceived and constructed, the net result of the the ability of government to improve economic adjustment and refinancing programs should be conditions. But long years of accelerating inflato improve the creditworthiness of the country tion and rising unemployment, instability in ficoncerned. nancial markets and the economy, and concern All of this emphasizes the key role of the IMF about burgeoning budgetary deficits have eroded in the international financial system. But if the that confidence. It can be restored, and I am Fund is to play the strong role required, current- convinced the economy can be returned to a path ly and prospectively, it must be able to look of sustained growth. But that effort must rest in forward with confidence to enough resources to part on a demonstrated commitment to discimeet potential demands on it. Much progress has plined financial policies. been made in reaching an international consen- As we look ahead, and as the President has sus in the discussions about enlarging the re- emphasized, the state of the federal budget, as it sources of the IMF, and agreement on a substan- now stands under current law and policies, could tial augmentation of those resources by means of undermine that effort. To be sure, a substantial increased IMF quotas and a broadened IMF part of the deficits in the 1982 and 1983 fiscal borrowing arrangement is expected in February. years—certainly more than half—reflects the im- That program will require legislative approval, pact of current business conditions on the budand I believe timely action by the Congress is get. Those cyclically induced deficits are not my essential to assure that IMF resources are com- main concern—indeed they help support spendmensurate with possible needs and, more broad- able income and buoy the economy. ly, to demonstrate that governments can act In the past as the economy recovered, the together, decisively and effectively, to deal with cyclical component of the deficit would diminish potential threats to our prosperity arising from and the budget would move toward balance. international debt problems. Conversely, failure What is unprecedented about the current situato strengthen the international financial system tion—and is of great concern—is that even as could only feed back adversely on our own revenues benefit from an expanding economy prospects for growth. over the coming years, we still face continuing All of this implies intense and continuing ef- sizable deficits unless significant action is taken. forts by the borrowers to expand exports and There can be disagreement about the precise reduce imports, with implications for the United size of the prospective deficits; what does seem States and other leading trading countries. Clear- beyond dispute is that little improvement, if any, ly, we cannot all increase exports and reduce in the budgetary position will develop under imports together, and equally clear is that the current law and policies even with a strong and whole process will be—and over time must be— continuing recovery. A number of the proposals facilitated by renewed growth in the industrial of the President in his state of the union address world. As understated in the communique issued were, of course, directed toward this problem. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • February 1983 Left unattended, the situation would pose a ties, adding to the burdens on monetary policy. strong potential for a clash between the need to Conversely, meaningful action to demonstrate finance the deficit and the rising financial re- the government's economic discipline on the quirements for housing and the business invest- fiscal side would reinforce confidence that monement that is crucial to a healthy recovery. In tary policy over the years ahead can do its job, the end, all those needs have to be met out of without intolerable market pressures, in mainsaving, and there simply isn't enough to go taining a course consistent with price stability. around. The federal government will have to bid As I indicated at the outset, I will be able to funds away from potential private borrowers, deal more specifically with our targets for the and the higher real interest rates that result will growth of money and credit after the Federal work against growth in private investment and Open Market Committee, in the normal course, housing. meets in early February to adopt guidelines for It is not just a problem for the future. The the coming year. In approaching those specifics, perception that there is a major structural imbal- we are, and will continue to be, concerned with ance between our spending programs and our maintaining a monetary environment consistent revenue base affects financial markets today. both with continuing progress against inflation Lenders, fearful of renewed inflation and the and with lasting expansion. Reconciling those high interest rates that budget deficits would goals, at a time when institutional and economic produce in a growing economy, are more reluc- factors have called into question the reliability of tant to commit funds for a long period of time past relationships between money and the econonow. The sensitivity extends beyond financial my will be a difficult and delicate job. The markets because inflationary concerns affect the approach cannot be reduced to an arithmetic, or climate of wage bargaining and pricing policies. econometric, formula, nor can success be To suggest that the budget problem and its achieved by monetary policy alone. But I am consequences for the performance of the econo- also convinced that those goals of growth and my could be solved by monetary policy is tempt- stability are not inconsistent as we look ahead in ing. But excessive money and credit creation to 1983. Indeed, I believe that neglect of one of them meet the needs of the government would only would, sooner or later, jeopardize the other. risk adding to the uncertainty about future infla- I am also acutely aware that the recent gains tion and interest rates. In the end, nothing real against inflation have been achieved in a context would be gained, while hardfought ground in the of serious economic hardship. The present state battle against inflation would be jeopardized. of affairs must not continue. Millions of workers Certainly a better fiscal outlook—with all it are unemployed, many businesses are hardimplies—would provide a better environment for pressed to maintain profitability, and business the conduct of monetary policy, relieving con- bankruptcies are at a postwar high. But in coping cern about the longer-term implications of every with inflation I also firmly believe we have laid twist and turn in the monetary aggregates or much of the foundation for a long period of short-term policy actions. But as things stand, noninflationary economic expansion. Only by fear of deficits clouds the future and contributes building on that effort can we realize the true to market pressures and inflationary uncertain- potential of the American economy. • Statement by Paul A. Volcker, Chairman, Board problems and measures to deal with them. These of Governors of the Federal Reserve System, problems have emerged in the context of deep before the Committee on Banking, Finance and and prolonged recessionary forces in the indus- Urban Affairs, U.S. House of Representatives, trialized world, with severe unemployment of February 2, 1983. labor and productive facilities, stagnation of private investment initiatives, and strains on the I am glad to have this opportunity to discuss financial capabilities of many borrowers and some recent international economic and financial lenders, domestic as well as international. At the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 81 same time, some signs of recovery are emerging basic requirements for receiving financial supin the United States, striking progress has been port from that institution. A number of other made against inflation, and active efforts are countries have already established, or are in the under way to deal with and contain the problems process of developing, such programs. in the financial system. We now have an oppor- 2. Closely tied in with the adjustment protunity to build a prolonged expansion on the grams worked out between the IMF and the basis of a far healthier outlook for price stability borrowing countries are arrangements among the and productivity. bank creditors to provide enough continuing One of the potential threats to that outlook credit to maintain continuity of payments and a arises in the area you have requested that I financial environment in which orderly adjustparticularly concentrate on today—the heavy ment programs can be implemented. In imporindebtedness of some developing countries and tant instances, current and future debt maturities the related exposure of the commercial banking have been "rolled over" or restructured, and system of the industrialized world. Failure to agreement has been (or is being) reached on manage and diffuse these strains could deal a some extensions of new bank credit—conditional serious blow to the recovery of the United States on the performance of the borrower in meeting and the world economy. But the essence of my its agreed-upon program with the IMF. While the testimony is that that problem is increasingly cases of Argentina, Brazil, and Mexico have well understood, and on the basis of that under- received the greatest attention, similar needs standing, for all its complexity and difficulty, it have arisen with other countries. The fact is that can be dealt with effectively. The United States, few countries are in a position rapidly to repay and the U.S. Congress, have a key role to play in indebtedness built up over a number of years, that process, alongside international institutions just as, in a purely domestic context, many and other countries. companies or individuals could not suddenly A successful program must rest on action in repay debt. Efforts by their creditors to withdraw several interrelated areas, involving a high de- from lending simultaneously can only be mutualgree of cooperation among countries and among ly self-defeating, precipitating a financial crisis lenders, coordinated in large part by the Interna- even when sound adjustment programs are under tional Monetary Fund. The necessary approach way. falls under five main headings: 3. In specific instances, short-term "bridg- 1. An indispensable first step is determined ing" credits by national monetary authorities, action by major borrowing countries to change acting bilaterally or through the Bank for Intertheir economic policies to cope with the realities national Settlements, may be appropriate to meet of their situation—that is, to reduce internal and minimum and immediate liquidity requirements external imbalances. Typically, measures are while adjustment and borrowing programs are required to cut down on very high rates of being arranged. The funds advanced are to be inflation and budget deficits, to establish realistic promptly repaid as commercial, IMF, or other foreign exchange rates and domestic interest credits become available. Both the Federal Rerates, to encourage greater economic efficiency, serve and the Exchange Stabilization Fund of the and, as a result, to aim for substantial reductions U.S. Treasury have participated in such credits. in external deficits. Working with the IMF in These credits have been limited to instances that developing such programs, culminating in IMF present a clear threat to international financial approval of medium-term credit assistance, can stability and when there is adequate assurance of be a critically important signal to other lenders repayment. Monetary authorities have neither that a country is committed to an effective ad- the capacity nor the mandate to substitute shortjustment program. term central bank credit for medium or longer- We are now seeing that process in action; term financing. Argentina, Brazil, and Mexico—the largest inter- 4. The earlier points emphasize the key coornational borrowers among the developing coun- dinating and substantive role of the IMF, and tries—have reached agreement with the IMF on clearly the resources of that institution need to a set of economic policies that will satisfy the be enlarged so that it can, with assurance, meet Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • February 1983 the potential demands upon it. Literally no other international financial pressures could only jeopbody in the world can effectively combine the ardize prospects for our recovery—for our jobs, several ingredients necessary to encourage both for our export markets, and for our financial sound adjustment and necessary financing: markets. Conversely, sustained, noninflationary • It has legitimacy, as the agreed-upon and growth in the United States and elsewhere is politically neutral international vehicle for evalu- needed to provide an economic environment in ating national economic programs. which borrowing countries can improve their • It has financial capacity, as the organization balance of payments over time and in which debt through which 146 countries, large and small, burdens can be reduced. have provided a pool of funds for meeting transitional, financial needs of its members. • It has ability, in terms of experience, exper- THE BACKGROUND tise, and respect by other lenders and borrowers OF CURRENT PRESSURES alike. IMF funding may provide only a relatively It is convenient to trace part of the present small fraction of the funds required by borrowers liquidity crises of some developing and Eastern in specific instances. However, the availability European countries to the two massive oil price of those funds provides a base for attracting increases of 1973-74 and 1979-80. Since the first commercial bank and other financing to cover oil shock the oil import bill of the developing the bulk of the need. Indeed, in instances when countries that are not members of the Organizacountries have had access to international bank- tion of Petroleum Exporting Countries has escaing markets in the past, the success of IMF lated sharply, reaching more than $20 billion in programs may require some prior assurance that 1978, and then jumping to more than $50 billion adequate amounts of private financing will be in 1980 and 1981. As a result, some oil-importing available for a time. Current and prospective countries have been burdened with chronically demands could well tax the present resources of large and growing burdens on their current acthe IMF, and sharply impair its ability to encour- counts. age orderly financing programs. Consequently, However, the direct impact of high oil prices enlargement of quotas and other IMF resources, on import bills does not provide a full and general a matter that has been under consideration in any explanation of the present difficulties; indeed, event, needs to be speeded. some of the most heavily indebted countries are 5. Finally, the success of all these efforts over oil exporters or are roughly in balance on oil time in easing current financial strains and pres- account. While great differences can be found in sures will ultimately be dependent upon the specific causes of the resort to huge amounts of elimination or substantial reduction of current external borrowing by particular countries, and account deficits by borrowing countries. That in the extent to which they tried to correct the objective will require some combination of re- situation, some general "environmental" factors duced imports and larger exports, but it is patent- seemed to affect them all. ly clear that not all countries can achieve those The borrowing countries have all, understandobjectives together because we buy and sell from ably, wished to expand rapidly their industrial one another. In fact, the strong adjustment ef- base to meet the needs of a growing population forts by a significant fraction of the world econo- and increase national income and economic welmy will—other things equal—tend to damp fare. In fact, after the oil shock of 1973, as a growth of their trading partners, as well as their group, they maintained much faster growth than internal growth. In the circumstances, an envi- the more mature economies. Some (with Mexico ronment of sustained recovery and expansion in the leading example) benefited from oil developthe industrialized world is critically important. ment and rising oil exports, the volume of ex- In all of this, the mutual dependency of the ports of manufactures increased sharply, and U. S. economy and the stability of the inter- world inflation was accompanied by relatively national financial system should be apparent. buoyant prices for commodity exports. But in Failure to deal successfully with the immediate addition, domestic expansion was frequently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 83 pressed by budget deficits and relatively low payments to $12 billion last year. The result was interest rates. As a result, internal inflation and a current account deficit of about $15 billion, rising current account deficits were common. despite adjustment efforts. At the time oil prices first rose sharply, great Throughout this period, losses on foreign credconcern had been expressed that industrialized its of commercial banks continued to be substanand developing countries alike might be unable tially lower than on domestic lending—as they to finance the increased cost of oil imports. In had been for many years. Foreign lending acfact, a rapid expansion of international bank counted for a rising share of the assets and the lending, from a low base, helped greatly in earnings of most large international banks, U.S. "recycling" surpluses of OPEC countries to and foreign based. The bulk of the lending was borrowers, including Eastern European nations undertaken by banks with established internaand middle-income developing countries. tional concerns and expertise, and it was to a Whereas the debts of those countries rose rapid- small group of rapidly growing countries deemed ly, the view was increasingly taken by many to have good prospects. The poorest countries banks and others, both in the United States and continued to rely almost entirely on official fielsewhere, that prospects for their future growth nancing. were reasonably good, and that on that base, As a result, developing country debts to comincreasing debt burdens in real terms would be mercial banks are relatively highly concentrated. manageable. During much of the 1970s, rising Of the $270 billion owed to banks by public- and world inflation, and low or even negative "real" private-sector borrowers in all developing couninterest rates greatly moderated the rising debt tries at mid-1982, more than half was accounted ratios. Moreover, with credit in ample supply, for by three countries (Argentina, Brazil, and most of the largest borrowers were able to add Mexico), and another 10 percent by Chile and substantial amounts to their official reserve as- South Korea. Eastern European countries owed sets; taken together the non-OPEC developing another $64 billion to banks abroad as of midcountries added $40 billion to their reserves in 1982, but the share of U.S. banks in total claims those years, tending to maintain confidence in on those countries was only slightly more than 10 their financial management and outlook. percent. The second great increase in oil prices and The relative participation by U.S. banks in other developments in the world economy at the lending to developing countries, while remaining end of the 1970s helped to call some of the large, tended to decline somewhat in the latter favorable assumptions of borrowers and lenders part of the 1970s, holding recently at about 35 into question. Export markets for manufactures percent of the total. The fact that interest marweakened, prices of commodity exports de- gins had been driven to levels that provided little clined, and annual interest payments rose sharp- allowance for risk and capital growth seemed at ly as both the amount of indebtedness and world times to moderate the enthusiasm of U.S. banks interest rates escalated. In the interest of pro- for foreign lending, and the share of our banks in longing and maximizing internal growth, adjust- providing new financing to the largest borrowers ment measures were delayed or unconvincing, declined to less than one-third from 1979 to 1981. and budgetary imbalances, inflation, and current But in absolute terms, the increases remained account deficits increased. Confidence at home large, and exposure relative to capital and assets was undermined in some cases, leading to capital rose. flight. International lending has traditionally been In the case of Mexico, the current account pretty much the province of the largest banking deficit reached $13 billion in 1981 in spite of institutions with a long history of experience petroleum exports of $14 billion, and Mexicans with international business, extensive informamoved large amounts of money abroad. Mexican tion networks through foreign branches, and a external indebtedness rose $20 billion in a single resource base capable of sustaining potential year, with commercial banks increasing their losses. During more recent years, more and more exposure nearly $15 billion. Brazil found its oil essentially domestic banks were drawn into inimport bill rising to $9V2 billion, and interest ternational lending. The amounts loaned, while Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • February 1983 typically involving less relative exposure, be- which the country will be unable or unwilling to came significant in the aggregate. Nevertheless, obtain enough foreign exchange to service exterof total U.S. bank claims on the developing nal indebtedness. countries in June 1982 of about $100 billion, the Our traditional approach toward examining nine largest banks accounted for 60 percent, and banks was not well suited to dealing with these the next fifteen banks for an additional 20 per- kinds of risk. Individual bank examiners were cent. These amounts represented a growing com- not generally equipped to evaluate economic mitment of capital resources; for the nine largest conditions and prospects of countries. There was banks, claims on all developing countries had a high degree of variability in the way country grown to about twice their capital by last June, lending was handled in examination reports. The and about half of the claims of those banks were traditional criteria for formally "classifying" or on Argentina, Brazil, and Mexico. "criticizing" loans were developed for private By that time, hundreds of regional and smaller borrowers or local governments, and were not banks around the world had participated to some readily adaptable to consideration of "transfer degree in lending to developing countries risk" or evaluating sovereign entities. We were through direct credits or as a result of syndica- also aware that blanket "classifications" of a tions of credits by the large "lead" banks. The particular country—classifications that would largest borrowing countries had well over a thou- necessarily have arbitrary elements—could have sand bank lenders. Because the participations of sudden and devastating effects on the availability smaller banks are, individually, limited in size, of credit, sometimes defeating the possibility of many of those banks no doubt assumed that their orderly adjustment and inviting a misinterpretacommitment to foreign lending could be handled tion that the U.S. government might be making a quite flexibly, and reduced over short periods of political judgment. time as their judgment dictated. That normal In recognition of these problems, the three presumption is, however, called into question federal bank regulatory agencies instituted in precisely at a time of financial crisis for the 1979 a new system for evaluating country risk. A borrowing country when many banks may want detailed description of that system is contained to reduce exposure and other sources of financ- in an appendix to this statement.1 ing are not available. Consequently, the refinanc- In summary, the system has four elements. ing programs under way have necessarily in- The first is a statistical report designed to identivolved virtually all lending banks. fy the country exposures of each bank on a basis consistent with aggregate data, and to enable the regulators to monitor those exposures. SUPERVISOR Y POLICIES A second element is an evaluation of each bank's internal system for managing country The rapid development of international lending risk, with the aim of encouraging more systematin recent years has received increased attention ic internal review of, and judgments about, forby the supervisory agencies here and abroad. eign lending. In international lending, several consider- As a third element, exposure to a particular ations arise beyond the usual "credit" risk—that country may be "classified," but only on the is, the ability of the borrower to generate funds in basis of collective judgment by the examining his own country for repayment. Banks are often agencies and in instances when debt service is dealing with sovereign rather than private bor- interrupted (or such interruption is imminent) rowers. A sovereign borrower can usually gener- and unlikely to be promptly resumed. ate resources in its own currency and need not A fourth and critical element is country-bymeet a "market test" domestically, but the fact country appraisal of each bank's large expothat the borrower is a sovereign political body sures. The principle underlying that appraisal is also limits the recourse of the lender, when conditions deteriorate. Both sovereign and private foreign borrowers are subject to "curren- 1. The tables and appendixes for this statement are available on request from Publications Services, Board of Govercy" or "transfer" risk—that is, conditions under nors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 85 that adequate diversification should be the cardi- whether those comments were stated forcefully nal rule in banks' management of their interna- or early enough, whether they were considered tional portfolios. Neither banks nor their super- carefully enough by the banks—or, indeed, visors can expect to anticipate all significant whether that kind of approach to the problem, political changes and economic developments. involving the most difficult kind of judgment by Diversification of a portfolio provides a degree of banks and supervisors alike, needs to be suppleprotection against events in a few countries mented by other techniques. seriously undermining the earnings and condition There are several possibilities for considerof an individual bank. ation. One approach would be to consider setting These appraisals draw upon the findings of an formal limits, by law or regulation, on bank Interagency Country Exposure Review Commit- exposures in different countries. In effect "single tee charged with reviewing conditions in borrow- country" limits analogous to "single borrower" ing countries. The Committee evaluates condi- limits would be imposed. Such limits, while tions in individual countries; with its guidance, capable of enforcing diversification, have inherexaminers review and comment on country ex- ent difficulties. They would inevitably be arbiposures that exceed a certain portion of bank's trary, unable to distinguish among the capabilicapital. ties of different banks, the size and conditions of The overall purpose is to call significant expo- different countries, or different types of borrowsures to the attention of senior management and ers—the government, public agencies, financial boards of directors of the banks, to raise ques- institutions, and nonbank private entities—withtions, and to force careful consideration. in a country. If applied judgmentally and This approach obviously involves striking a changed from time to time, they would imply difficult balance. I am aware, for instance, that in inherently controversial economic and political reviewing these procedures, the General Ac- judgments about other countries by the U.S. counting Office questioned whether comments government. were sufficiently pointed, or bank managements I would note that the present system already adequately sensitized, to influence lending poli- uses various ratios of exposure to capital as a cies appropriately. At the same time, in our threshold point for commenting on exposures in system of banking and supervision, the supervi- certain countries. We will want to examine sor should not take responsibility for the lending whether we can build on that approach while decision, beyond assuring to the extent feasible retaining important elements of flexibility. that relevant factors are weighed and appropriate Looking to the future, another possible approcedures followed by those responsible for the proach would be to promote, through accounting management and direction of the banks. and reserving practices, appropriate financial In the light of recent developments, we have in incentives. For instance, practices in accounting process a reevaluation of our current approach for "front end" fees in large syndicated credits toward supervision. My own preliminary judg- appear to differ, and a conservative and uniform ment is that the basic framework of the system approach could be encouraged. Some discussion introduced in 1979 is constructive and sound, but has taken place here and abroad about the possiimportant questions arise about implementation. bility of more formal rules, based on rather Between mid-1980 and mid-1982, the claims on specific criteria, for setting up specific prudential Mexico of the nine largest U.S. banks grew from reserves against severely troubled country cred- 32 to 50 percent of capital funds, with lending its. That approach would build upon and suppleterms tightening only toward the end of that ment the existing practice of establishing loan period. Less dramatic but significant increases in loss reserves in relation to the risk in particular these banks' exposures to Argentina and Brazil loans and the unforeseen risk in the total portfoalso occurred. The comments made in examina- lio. Provision for reserves of that kind would tion reports during this period did reflect growing impact on current earnings, and in some insupervisory concerns about the situation in these stances there may have been reluctance to "pecountries and the potential for payment difficul- nalize" earnings, particularly with respect to ties. However, questions naturally arise as to sovereign credits when the argument may plausi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • February 1983 bly be made that the borrower will not "disap- other shocks. Actual losses have been limited, pear" or go "bankrupt" in the sense of a private and the present difficulties are themselves a borrower, and interest or principal arrears powerful disciplinary force. We do not want to should ultimately be recovered. Another ap- substitute government credit judgments for those proach would be to supplement general reserves of the banks, and we do not want to curtail the or strengthen capital ratios for institutions with necessary and legitimate flow of bank credit. A relatively high concentrations of foreign risk. sudden excess of caution would be damaging to Experience does demonstrate that countries are the world economy and to the United States, and not insulated from protracted difficulties, and our supervisory policies should not feed such such provisions would recognize that, all other overreaction. We are examining our own aprisks equal, lending abroad has the additional proaches within those parameters, and will need dimension of country risk and should be support- to review our thinking further with our coled by adequate capital. Seen in this light, it is leagues here and abroad. I would like to report to clear that such an approach would need to be you further as that process is completed. integrated into the analysis of capital adequacy of the banking organization taken on a consolidated basis. BANK LENDING AS PART A different approach would be to rely more OF ADJUSTMENT PROGRAMS fully upon public disclosure of large concentrations to promote market discipline. There has The situation of the large borrowers among the already been movement in that direction, but a developing countries has frequently been characbalance must be struck. When lending is fashion- terized as a "liquidity"—rather than a "credit" able, there may be little discipline and even or "solvency"—problem. To be sure, events last incentives to "follow the leader." When senti- year unfolded with a speed disconcerting to ment shifts, markets may react abruptly, under- many lenders, but that is characteristic of liquidmining confidence by simplistic or naive inter- ity problems when the balance of confidence pretations of the data. Considerations of shifts. The fact remains that each of the major customer confidentiality and competition impose borrowers, given time, can bring large resources limits. to bear on the need to correct their external There is an additional complication in supervi- payments problem and to service their debts. sion of international lending. Competitive pres- Many of these nations have already demonsures are heavily conditioned by the behavior of strated a considerable capacity to adjust. Nonlenders in other countries. To the extent feasible, OPEC developing countries cut almost $20 bilour approaches should be coordinated with those lion from their combined trade deficits last year, of banking supervisors abroad, guarding, of and Argentina, Brazil, and Mexico all had trade course, against tendencies to retreat to the "least surpluses. Those borrowers have attached the common denominator." Recent experience also highest priority to that effort in their economic suggests a need for some reexamination of the policymaking, recognizing their future growth scope of, and supervisory approaches to, the and stability is dependent on access to credit. In operations of banks outside their home country a growing world economy, their current account markets, reinforcing the need for a multilateral deficits can be reduced to sustainable levels, or approach to address considerations of safety and for a time eliminated. soundness and of competitive equity among In some of the countries, adjustment efforts banks from different countries. had begun some time ago. In Argentina, for In sum, there is no easy and obvious answer; example, attempts were made to reduce an exbanking, by its nature has risks, and none of us plosive rate of inflation and correct an overvalcan fully protect against the unknown. More- ued peso, but the war in the South Atlantic over, excessive caution can be as damaging as undermined those efforts. In Brazil, monetary excessive risk. International lending has made an policy was tightened in 1981 to counter soaring immense contribution to the growth of the world inflation and efforts were made to hold down the economy and to cushioning the oil price and current account deficit, which was pushed up by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 87 sharply increased interest payments and larger has demanded prompt and forceful action by payments for imported oil. In Mexico, the exter- governments, as well as by private institutions, nal situation weakened rapidly in 1981 and little to protect the stability of the financial system as had been done to counter that tendency, perhaps a whole and our own economy. Fortunately, in part because oil revenues gave an undue sense institutions and facilities designed to cope with of comfort. In all these cases, the effects of the problems of this kind were in place and can be recession in the world economy and high real adapted as necessary to cope with the present interest rates had not been anticipated, leaving circumstances. little or no room for maneuver. In this context organized programs have been Now, each of those countries is putting in needed to combine and coordinate the efforts of place a strong adjustment program. The aim is the debtors, the commercial banks, the authorimassive curtailment of large budgetary deficits— ties of the major industrial countries, and the programs that imply changes in taxation and International Monetary Fund. expenditures far beyond anything that, for in- The issue has not been whether the debtors stance, has been discussed in relation to our own will have to close the gap in their external budgetary problem. Money growth is being cut payments: when the supply of credit is curtailed, back, and interest rates are in some instances there is simply no alternative. Nor can private sharply higher. In Mexico and Brazil, growth will creditors abstain from participation; limited be curtailed for a time, and Argentina is expected available official funds, whether short or medium to recover only part of last year's losses in term, could be marshalled to ease the adjustment output. in some cases, but they should not be dissipated All of that involves immense economic and by repayment of private creditors. political difficulties. The difficulties are justified The need has been to recognize these imperaby the prospect that the austerity programs tives and reconcile them in a way that would should also cut external borrowing needs, permit promote needed adjustment without intolerable servicing of existing debt, and lay the base for burdens on the debtor countries and the world resuming growth on a solid foundation. The economy. The aim is to forestall potential threats programs cannot be successful, however, with- to the financial system and to economic recovery out liquidity support for an interim period, and in a way consistent with future stability. the necessary support has required the organized One element in that solution has had to be effort of virtually all lending banks. organized efforts by banks worldwide to restruc- The first reaction of many banks to the critical ture existing loans and to provide enough new situation that emerged for Mexico last year was credit to satisfy reduced needs as the adjustment to reduce or stop new lending; given the size of programs take hold. Supervisory authorities both Mexico's need, the inevitable result was to de- here and abroad have recognized that these plete reserves and jeopardize its ability to service efforts are necessary to the success of the proits debt. The more cautious lending attitudes gram. We cannot, of course, abandon our conquickly spread to other developing countries, cern for prudence in lending. But we can and do especially those in Latin America. As fears of recognize that sound adjustment programs, carecurrency depreciation and capital controls inten- fully monitored by the IMF, can contribute to the sified, capital flight helped to aggravate the re- creditworthiness of individual countries, as well sulting problems. as to the stability of the financial system as a On a number of occasions in recent years, it whole. was necessary for banks to restructure or rene- In cases like these when moderate amounts of gotiate loans to particular countries. The situa- new bank credit and some restructuring of existtion that emerged last year was unique in its ing debt are required as part of effective adjustscope and potential effects. It involved several ment programs and the loans can be serviced, major debtors at the same time, and threatened supervisory objectives do not require criticism of to spread to others, weak and strong alike. This the restructured and new loans. Indeed, refusal potential for cascading liquidity pressures, un- of banks to participate in such programs could dermining the stability of the financial system, undermine their common interest in maintaining Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • February 1983 the servicing and the ultimate collectibility of As I have indicated, in the case of major existing credits. borrowers like Argentina, Brazil, and Mexico, the actual financing that can be committed by the IMF within its resources and under its proce- ENLARGED IMF RESOURCES dures is only a fraction of the total financial flows that must be organized and maintained. The IMF Member countries of the IMF appear close to programs and financing are, of course, in the agreement—subject to legislative approval—to interests of banks and other lenders, because expand the effective resources of that institution, they have a large stake in the stability and and to do so promptly. The decision has not been creditworthiness of the countries involved and in reached in haste: discussions about the potential the functioning of the system as a whole. But as I demands on the IMF have been in progress for have emphasized, the programs and IMF particimany months in connection with the Eighth pation do not contemplate banks can "bail out" General Review of quotas. Throughout the nego- existing loans, and they are, in fact, called upon tiating process, the United States has empha- to play a responsible part in the lending process. sized the need to avoid excessively large addi- The precise share of the United States in the tions to resources for fear that those resources proposed quota increase is not yet finally agreed might be used too freely, or might encourage upon, but is likely to be less than 20 percent. Our laxity or delay in adjustment actions when they share of the enlarged GAB is contemplated at 25 are necessary. Those concerns, of course, re- percent, involving about $4.7 billion at current main relevant and have been taken into account. exchange rates for the dollar. About $2 billion of But events also conclusively demonstrate that a that amount will be covered by our current $2 substantial increase in resources is indeed re- billion commitment to the present GAB, an quired to meet potential needs. The amount to be amount that has been unchanged for more than agreed upon by U.S. negotiators, I feel sure, will 20 years. not exceed the basic requirements of the IMF if it These are standby commitments. They will is to discharge its large responsibilities with involve cash advances only when and if demands confidence and effectiveness. on the IMF exceed amounts that can be provided Recent discussions among the leading coun- from current resources. IMF facilities are reciptries have focused on an increase in quotas in the rocal; in case of need, the United States can neighborhood of 50 percent, or about $30 billion draw on resources provided to the IMF by other to $35 billion. The Group of Ten has decided countries. upon an enlargement and broadening of the Gen- Commitments for increases in IMF quotas and eral Arrangements to Borrow (GAB) from for an enlarged GAB require budget authority SDR6.4 billion to SDR 17 billion (or from $7.1 and appropriation for the full amount. They do billion to about $19 billion). For the first time, not, however, lead to a net budget outlay, in money available through that arrangement could recognition of their monetary and reciprocal be used for lending to any member country, but character. Should the IMF call upon the U.S. only when the borrower has agreed to a major commitment, there is an equal and offsetting adjustment program and when there is deemed to debit and credit to the appropriation account, as be a threat to the stability of the international the cash transferred to the IMF is reflected in an monetary system. increased U.S. reserve position in the Fund. Both the quotas and the GAB essentially pro- That reserve position is freely available to us in vide a commitment to contribute to a pool of time of foreign exchange need. funds that can be drawn upon for loans to IMF Transfer of cash to the IMF does add to the member countries in time of need. As more funds borrowing requirements of the Treasury; a correare borrowed by a country, stricter conditions sponding reduction in borrowing requirements are required. The aim is to provide assurance evolves when dollars are received by the Treathat there is adequate, temporary multilateral sury from the Fund as a result of repayments to financial support available for well-designed and the IMF or of U.S. drawings. To the extent that executed economic and financial programs. the IMF's lending activity is apt to increase Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 89 during periods of global economic recession and volved. We are talking about dealing with a decline during periods of prosperity, any margin- threat to the recovery, the jobs, and the prosperial effects on credit markets are ameliorated. ty of our own country, a threat essentially with- Relative to the totality of U.S. financial markets, out parallel in the postwar period. these flows will be relatively modest; for long periods, the funds may not be used at all. To the extent funds are drawn, interest is paid at levels CONCLUSION related to average short-term interest rates in major countries. I do not minimize the pressures on the interna- Questions have been raised about the impact tional financial system nor the implicit risks. of IMF lending programs on our economy rela- Those risks in the most immediate sense are tive to domestic credit programs. That is a diffi- financial and economic, but they could potentialcult comparison to make. As noted, our commit- ly be broader than that, affecting the cohesion ments to the IMF are standby and reciprocal, and political relationships of the Western World. and drawings on those commitments are likely to At the same time, I can only be encouraged by be short term and reversible. The operations are the understanding and cooperation that have not aimed at a particular part of the economy, marked the response to the difficult circumnor are subsidies to one sector of the U.S. stances—by governments and central banks, by economy or another involved. To be sure, some private financial institutions, and not least, by of the IMF advances to borrowing countries, the borrowing countries themselves that carry whether or not the United States is the immedi- the most difficult burden. The IMF stands at the ate source of the funds, are likely, directly or center of the process, and has responded with indirectly, to be spent on U.S. exports. Some of force and leadership. the funds may promptly find their way back into We—the United States and other countries, the U.S. banking system or credit markets. lenders and borrowers, banking supervisors and But those technical comparisons should not those supervised—have much to learn from this obscure the basic point of the IMF commitment. experience. No single action—no magic wand— The strengthening of the IMF is an integral part is available to assure success. of the overall effort to defend the stability of the What is sure is that, working together, soluinternational financial system. The success of tions can be found and are being found. That that effort will not be measured by the amount of effort does, and will continue to, demand the dollars drawn, but by its contribution to confi- active participation of the United States. As the dence that governments can and will work to- largest economy, increasingly dependent on gether to assure that the financial system can and world trade and finance ourselves, we cannot will withstand strains and pressures, continuing escape that responsibility. to function effectively in the interest of every The benefits of the total effort, which many country. countries are sharing, will be broadly felt. Our That concern is not abstract or altruistic. The own direct stake is large, for we are dealing with international financial system is not separable a potential obstacle to our objective of moving from our domestic banking and credit system. from recession into a period of long-sustained The same institutions are involved in both mar- growth. And, as we do so, we will have made an kets. A shock to one would be a shock to the enormous contribution to a world economic other. In that very real sense, we are not consid- environment in which the acute debt problems of ering esoteric matters of international finance, or today will recede and the international financial primarily what is in the interest of heavily indebt- system can support growth in investment, trade, ed developing countries, although that is in- and economic activity. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

91 Announcements REGULATION D. AMENDMENT through open market operations. In 1982, earnings on such securities were up $942 million over The Federal Reserve Board has amended its 1981, accounting for most of the increase of Regulation D (Reserve Requirements of Deposi- $1,011 billion in gross income. Income from tory Institutions) to implement congressional ac- Federal Reserve services amounted to $390 miltion exempting money market deposit accounts lion during 1982. (MMDAs) from the phase-in reserve require- Operating expenses of the 12 Reserve Banks ments of the Monetary Control Act of 1980. and their branches totaled $998 million, which The revision makes all depository institutions was partially offset by income from priced sercovered by the rules of the Depository Institu- vices. Assessment for expenditures of the Board tions Deregulation Committee subject (without of Governors amounted to $62 million. Other the phase-down requirements of the Monetary deductions from current net income amounted to Control Act for member banks and the phase-up $69 million. This was primarily the result of a requirements for nonmember institutions) to a $150 million unrealized loss on assets denomireserve requirement of 3 percent on all nonper- nated in foreign currencies related to revaluation sonal MMDAs and to a 0 percent requirement on of these assets to market exchange rates, and an all personal MMDAs. $85 million gain on sales of U.S. government The Board also modified the procedure for obligations. Earnings credits granted to deposiallocating the statutory exemption from reserve tory institutions amounted to $26 million. requirements for the first $2.1 million of an Net income before payments to the Treasury institution's deposits on accounts that are sub- totaled $15,365 billion. Payments to the Treasury ject to reserve requirements, in order to provide as interest on Federal Reserve notes amounted maximum benefit to institutions in light of the to $15,208 billion; statutory dividends to member legislation exempting MMDAs from phase-in banks, $79 million; and additions to Reserve provisions. Bank surplus, $78 million. The reduction in reserve requirements for Under the policy established by the Board of member banks was effective December 14, 1982. Governors at the end of 1964, all net income after For nonmember banks the revisions of Regula- the statutory dividend to member banks and tion D were effective January 13 and apply first additions to surplus to bring it to the level of to the maintenance period beginning January 27, paid-in capital are paid to the U.S. Treasury as 1983. interest on Federal Reserve notes. EARNINGS OF FEDERAL RESERVE BANKS PROPOSED ACTIONS Preliminary figures indicate that gross income of The Federal Reserve Board has proposed for the Federal Reserve Banks amounted to $16,520 public comment draft regulations to implement billion during 1982. Of this, more than $15 billion the Bank Export Services Act (BESA) authorizin earnings was paid to the U.S. Treasury. ing investments in export trading companies by Income of the Federal Reserve System is bank holding companies and certain other bankderived primarily from interest accrued on U.S. ing organizations. The BESA is part of the government securities that the Federal Reserve Export Trading Company Act of 1982. The has acquired in the conduct of monetary policy Board asked for comment by March 14, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • February 1983 The Federal Reserve Board has also proposed REVISED OTC STOCK LIST for comment several amendments to its Regulation Z (Truth in Lending) affecting arrangers of The Federal Reserve Board has published a credit, student loans, and the use of calculation supplement to its list of over-the-counter (OTC) devices in determining annual percentage rates. stocks that are subject to its margin regulations, The Board asked for comment by March 3, 1983. effective February 22, 1983. The supplement The Board has also published for comment should be used in conjunction with the July 26, several proposals regarding bankers acceptances 1982, list of OTC margin stocks and the October in connection with the recently enacted Bank 18, 1982, supplement to the list. Export Services Act. The Board asked for com- Changes that have been made in the list, which ment on its proposals by March 18, 1983. now includes 1,596 OTC stocks, are as follows: 67 stocks have been included for the first time; 17 stocks previously on the list have been removed CHANGES IN BOARD STAFF for substantially failing to meet the requirements for continued listing; 31 stocks have been re- The Board of Governors has announced the moved for reasons such as the companies being following changes in its official staff. listed on a national securities exchange or being William Taylor, Associate Director, Division acquired by another firm. of Banking Supervision and Regulation, has been The supplement is available on request from promoted to Deputy Director. Publications Services, Board of Governors of the David E. Lindsey, Assistant Director, Divi- Federal Reserve System, Washington, D.C. sion of Research and Statistics, has been made 20551. Deputy Associate Director. Frederick M. Struble, Assistant Director, Division of Research and Statistics, has been pro- SYSTEM MEMBERSHIP: moted to Deputy Associate Director. ADMISSION OF STATE BANKS Susan J. Lepper has been appointed Assistant Director, Division of Research and Statistics. The following banks were admitted to member- Before joining the Board's staff in February ship in the Federal Reserve System during the 1981, Ms. Lepper was with the Senate Budget period January 11 through February 10, 1983: Committee and with the Council of Economic Advisers. She holds a B.A. from Swarthmore California College and an M.A. and a Ph.D. from Yale Coronado Bank of Coronado University. Colorado Thomas D. Simpson has been named Assistant Glenwood Springs Alpine Bank Director, Division of Research and Statistics. Delaware Mr. Simpson was appointed to the Board's staff Wilmington Manufacturers Hanover in August 1976. He holds a B.A. from the Uni- Bank (Delaware) versity of Minnesota and has a Ph.D. from the University of Chicago. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

93 Legal Developments AMENDMENTS TO REGULATION D by revising the first sentence and adding a sentence at the end to read as follows: The Board of Governors has amended Regulation D— Reserve Requirements of Depository Institutions Section 204.4—Transitional Adjustments (12 CFR Part 204) to implement Section 13 of Senate Joint Resolution 271, which exempts Money Market Deposit Accounts ("MMDAs") from the phase-in of (a) *** However, an institution shall not reduce the reserve requirements under the Monetary Control Act amount of required reserves on any category of deposof 1980. Under this action, all depository institutions its or accounts that are first authorized under Federal will be subject, without application of the phase-in law in any State after April 1, 1980, or on deposits or provisions, to a reserve requirement of three percent accounts issued pursuant to (12 CFR 1204.122). on all nonpersonal MMDAs and to a zero percent reserve requirement on all personal MMDAs. (b) *** Effective January 13, 1983, the Board amends Regu- (1) A depository institution whose required relation D (Part 204) as set forth below: serves are higher using the reserve ratios in effect during a given computation period (§ 204.9(a)) than its required reserves using the reserve ratios in effect on Part 204—Reserve Requirements of Depository August 31, 1980 (§ 204.9(b)) (without regard to re- Institutions quired reserves on deposits or accounts issued pursuant to (12 CFR 1204.122)): (i) Shall maintain the full amount of required 1. In section 204.3 by revising paragraph (a)(3)(i) to reserves on deposits or accounts issued pursuant to read as follows: (12 CFR 1204.122); and Section 204.3—Computation and Maintenance (2) A depository institution whose required reserves are lower using the reserve ratios in effect (a) *** during a given computation period (§ 204.9(a)) than its (3) Allocation of exemption from reserve requirerequired reserves computed using the reserve ratios in ments. (i) In determining the reserve requirements of a effect on August 31, 1980 (§ 204.9(b)) (without regard depository institution, the exemption provided for in to required reserves on deposits or accounts issued section 204.9(a) shall apply in the following order of pursuant to (12 CFR 1204.122)): priorities: (A) First, to nonpersonal time deposits (i) Shall maintain the full amount of required representing deposits or accounts issued pursuant to reserves on deposits or accounts issued pursuant to 12 CFR 1204.122; (B) second, to net transaction ac- (12 CFR 1204.122); and counts that are first authorized by Federal law in any State after April 1, 1980; (C) third, to other net transaction accounts; and (D) fourth, to other nonper- (c) *** However, an institution shall not reduce the sonal time deposits or Eurocurrency liabilities starting amount of required reserves on any category of deposwith those with the highest reserve ratio under its or accounts that are first authorized under Federal § 204.9(a) and then to succeeding lower reserve ratios. law in any State after April 1, 1980, or on deposits or accounts issued pursuant to (12 CFR 1204.122). 2. In section 204.4, the last sentence of paragraph (a), (f) Nonmember depository institutions with offices in paragraphs (b)(1) introductory text, (b)(l)(i), (b)(2) Hawaii. Any depository institution that, on August 1, introductory text, and (b)(2)(i), and the last sentence of 1978, (i) was engaged in business as a depository paragraph (c) are revised and paragraph (f) is amended institution in Hawaii, and (ii) was not a member of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • February 1983 Federal Reserve System at any time on or after such total deposits in commercial banks in the market. date shall not maintain reserves imposed under this Because Applicant does not currently operate in this part against deposits, including deposits or accounts market, consummation of the proposed transaction issued pursuant to (12 CFR 1204.122), held or main- would not increase the concentration of banking retained at its offices located in Hawaii until January 2, sources or reduce the number of competitors in the 1986. *** However, after January 1, 1986, an institu- market. The Board concludes that consummation of tion shall not reduce the amount of required reserves the proposal would not eliminate substantial probable on any deposits or accounts issued pursuant to future competition in the market because of the large (12 CFR 1204.122). number of potential entrants into the market and other facts of record. Accordingly, the Board concludes that competitive considerations are consistent with approval of the application. BANK HOLDING COMPANY AND BANK MERGER The financial and managerial resources of Appli- ORDERS ISSUED BY THE BOARD OF GOVERNORS cant, its subsidiaries and Bank are regarded as generally satisfactory and their future prospects appear favor- Orders Under Section 3 of Bank Holding able. The Board has indicated on previous occasions Company Act that a holding company should serve as a source of financial and managerial strength to its subsidiary Ellis Banking Corporation, bank(s), and that the Board would closely examine the Bradenton, Florida condition of an applicant in each case with this consideration in mind. In this case, the Board concludes that Order Approving Acquisition of Bank although the proposal would entail the use of acquisition debt, the amount of debt involved in this proposal Ellis Banking Corporation, Bradenton, Florida, a bank would not preclude the Applicant from serving as a holding company within the meaning of the Bank source of strength to its subsidiary banks. According- Holding Act, has applied for the Board's approval ly, considerations relating to banking factors are conunder section 3(a)(3) of the act (12 U.S.C. § 1842(a)(3)) sistent with approval of the application. Following to acquire 100 percent of the voting shares of First consummation of the proposal, Applicant intends to Commercial Bank of Live Oak, Live Oak, Florida provide Bank with additional expertise in accounting, ("Bank"). operations, credit, trust, investments, and marketing Notice of the application, affording an opportunity and auditing, thereby increasing Bank's ability to for interested persons to submit comments and views, serve its customers. Thus, the Board concludes that has been given in accordance with section 3(b) of the considerations relating to the convenience and needs act. The time for filing comments and views has of the community to be served lend slight weight expired and the Board has considered the application toward approval. Accordingly, the Board's judgment and all comments received in light of the factors set is that consummation of the proposal to acquire Bank forth in section 3(c) of the act (12 U.S.C. § 1842(c)). would be in the public interest and that the application Applicant, the tenth largest banking organization in should be approved. Florida, controls 19 banks with aggregate deposits of On the basis of the record, the application is ap- $1.1 billion, representing approximately 2.8 percent of proved for the reasons summarized above. The acquitotal deposits in commercial banks in the state.1 Bank, sition of shares of Bank shall not be made before the with deposits of $42.7 million, is the 268th largest thirtieth calendar day following the effective date of commercial bank in Florida, holding less than 0.1 this Order or later than three months after that date, percent of total deposits in commercial banks in the unless such period is extended for good cause by the state. Acquisition of Bank would have no appreciable Board of Governors or by the Federal Reserve Bank of effect upon the concentration of banking resources in Atlanta, pursuant to delegated authority. Florida. By order of the Board of Governors, effective Bank is the second largest of three banking organi- January 17, 1983. zations competing in the Suwannee County banking market,2 controlling approximately 37.8 percent of the Voting for this action: Vice Chairman Martin and Governors Partee, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Wallich. 1. All banking data are as of December 31, 1981. (Signed) JAMES MCAFEE, 2. The Suwannee County banking market includes all of Suwannee County, Florida. [SEAL] Associate Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 95 Fourth Financial Corporation, Notice of the application, affording interested per- Wichita, Kansas sons an opportunity to submit comments and views, has been given in accordance with section 3(b) of the Order Approving Acquisition of Shares of a Bank act. The time for filing comments and views has Holding Company expired and the Board has considered all comments received, including those of the Kansas State Bank Fourth Financial Corporation, Wichita, Kansas, a Commissioner and the Kansas Independent Bankers registered bank holding company under the Bank Association ("KIBA"), in light of the factors set forth Holding Company Act, as amended, (12 U.S.C. § 1841 in section 3(c) of the act, (12 U.S.C. § 1842(c)). et seq.), has applied for the Board's approval under Applicant, with assets of $952 million,4 is the largest section 3(a)(3) of the act, (12 U.S.C. § 1842(a)(3)), to banking organization in Kansas. It controls $635 milacquire 24.98 percent of the outstanding voting shares' lion in deposits, representing 5.9 percent of statewide and 100 percent of the outstanding nonvoting preferred deposits, through the Fourth National Bank and Trust stock of Coffeyville Bancshares, Inc., Wichita, Kan- Company, Wichita, Kansas.5 Bank is the seventeenth sas ("Coffeyville"), and, thereby, indirectly acquire largest bank in Kansas, and controls $87.5 million in an interest in the First National Bank of Coffeyville, deposits, representing 0.58 percent of commercial Coffeyville, Kansas ("Bank").2 banking deposits statewide. Upon consummation of Applicant's investment in the voting and nonvoting the proposed acquisition, Applicant will remain the preferred stock of Coffeyville amounts to $7.7 million, largest commercial banking organization in Kansas and will represent 88 percent of the total equity of and will control 6.48 percent of total deposits in Coffeyville. An officer and director of Applicant will commercial banking organizations in Kansas. Accordserve as one of the three directors of Coffeyville. ingly, the acquisition proposed by Applicant will not Applicant will not have officers or directors in com- have any significant effect on the concentration of mon with Bank. In addition, Applicant has a 10 year banking resources in Kansas. option to purchase the remaining 75.02 percent of the Bank is the largest commercial banking organization outstanding voting shares of Coffeyville in the event in the Montgomery County banking market,6 and Kansas law is changed to permit such an acquisition controls 30.5 percent of deposits in commercial banks and a right of first refusal and certain other rights with in the market. Applicant does not control a banking respect to these shares, which are to be acquired by organization in the Montgomery County banking mar- Ms. Sue Anschutz Rodgers. Ms. Rodgers is a private ket, and is prohibited by Kansas law from operating a investor who is not an officer or director or a signifi- branch in that market.7 Accordingly, consummation of cant shareholder of Applicant and is not related to any the proposed transaction would not have any signifiof the officers or directors of Applicant.3 Ms. Rodgers' cant effect on existing or potential competition in any investment will total $1.0 million and will not be relevant banking market. financed in any manner by Applicant. Ms. Rodgers In view of the Board's finding, as discussed below, will act as chairman of Coffeyville and her business that Applicant will, upon consummation of the proposadviser wll also serve as a director of Coffeyville and al, control Coffeyville and Bank under the federal Bank. Bank Holding Company Act, the Board has evaluated the financial and managerial resources of Applicant, Coffeyville, and Bank within the context of the Board's multibank holding company standards. Under 1. Under section 3(a)(3) of the act, a bank holding company may these standards, the financial and managerial renot, without the prior approval of the Board, acquire directly or indirectly more than 5 percent of the voting shares of a bank. The sources of these organizations are regarded as general- Board has held that this requirement applies to the acquisition by a ly statisfactory, and their future prospects appear bank holding company of shares of another bank holding company. favorable. Considerations relating to the convenience State Street Boston Corporation, 67 FEDERAL RESERVE BULLETIN 862 (1981). and needs of the communities to be served are also 2. In a separate application, Coffeyville Bancshares, Inc., has consistent with approval. applied for Board approval to acquire at least 80 percent of the outstanding voting shares of Bank. 3. At the expiration of this 10 year option, Ms. Rodgers has a one year option to purchase all of the voting common and nonvoting 4. All data with respect to Applicant are as of June 30, 1982. Data preferred stock held by Applicant. In addition, the Stockholders with respect to Bank are as of December 31, 1981. Agreement between Ms. Rodgers and Applicant provides that neither 5. Applicant also owns as an investment 24.9 percent of the party may transfer any voting or preferred shares of Coffeyville outstanding voting shares of M-L Bancshares, Inc., Wichita, Kansas, without allowing the other party an opportunity to sell the shares of a registered one-bank holding company by virtue of its control of The Coffeyville to the proposed third party purchaser. In the event the Kansas State Bank, Newton, Kansas. option is not exercised or the third party purchaser does not purchase 6. The Montgomery County banking market is approximated by all of the shares of Coffeyville, either Applicant or Ms. Rodgers may Montgomery County, Kansas. require the dissolution and liquidation of Coffeyville. 7. Kansas Statutes Annotated Section 9-1111. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • February 1983 In acting on an application under the act, the Board Coffeyville, or the election of a majority of the direcis required to consider, in addition to the competitive, tors of Bank. The opinion also concludes that Applifinancial, managerial and convenience and needs fac- cant's option to acquire Ms. Rodgers' shares does not tors set out in the act, whether the proposal would give Applicant control of Coffeyville or the voting comply with the provisions of relevant state law, and shares of Bank held by Coffeyville because the exerthe Board may not approve an application that would cise of Applicant's option is expressly conditioned on result in a violation of state law.8 compliance with Kansas law. Similarly, the Attorney KIBA has objected to approval of this application, General stated that Applicant's right of first refusal contending that the proposed acquisition would violate with respect to Ms. Rodgers' shares and its attendant a provision of Kansas law that prohibits a company right to sell its common and preferred shares to Ms. from owning, controlling or holding with power to vote Rodgers or her transferee does not give Applicant the 25 percent or more of the voting shares of each of two right to designate or approve the transferee, or to or more banks in Kansas, or controlling in any manner control the voting shares of Bank held by Coffeyville the election of a majority of the directors of each of or the election of a majority of the directors of Bank.11 two or more banks in Kansas.9 KIBA contends that, Acting on the basis of the Attorney General's opinas a result of several factors, including the relative size ion, the Commissioner took sworn depositions of of the investment proposed by Applicant, the exis- Ms. Rodgers, and the president and general counsel of tence of an option in favor of Applicant to purchase Applicant. These persons stated that the documents the remaining outstanding voting shares of Coffey ville, submitted to the Board and to the Commissioner with and certain provisions in the Stockholders Agreement respect to the application represent all of the docurestricting the transfer of Ms. Rodgers' shares, the ments and agreements between the parties regarding proposed transaction will allow Applicant to acquire control of Coffeyville or the shares of Bank held by control of a second bank in Kansas. KIBA has re- Coffeyville. Based on the Attorney General's opinion quested that the Board hold a formal hearing to and after review of all of the underlying agreements explore whether under Kansas law a control relation- and memoranda submitted by Applicant and KIBA ship between Fourth Financial and Coffeyville will and the depositions of Ms. Rodgers and Applicant's result upon consummation of the proposal. officers, the Commissioner concluded that "there was In light of the concerns raised by KIBA, the Kansas no apparent violation of the Kansas banking statutes" State Bank Commissioner requested an opinion from involved in Applicant's proposal. The Attorney Genthe Kansas Attorney General regarding the legality of eral's and Commissioner's opinions and the transcript Applicant's proposal under the Kansas bank holding of the evidentiary proceedings before the Commissioncompany statute. In an opinion dated September 8, er have been furnished to the Board and have been 1982,10 the Attorney General concluded that, under made a part of the record on this application. Kansas law, a company "indirectly controls" voting In determining the compliance of a proposed bank shares of a bank or the election of a majority of the holding company acquisition with state law, the Board board of directors of a bank if a factual determination has given substantial weight to opinions of state adis made that the company controls, within the ordinary ministrative authorities in the absence of a dispositive dictionary meaning of the term "control", a second judicial decision concerning the relevant provisions company that owns voting shares of a bank or controls and where the Board's review of those opinions rethe election of a majority of the directors of a bank. veals that they are consistent with the statutory lan- The Kansas Attorney General advised the Bank Com- guage being interpreted and the purpose and legislative missioner that the definition of "control" that should history of the statute.12 In this case, the Board conbe used in making this factual determination is wheth- cludes that the opinion of the Kansas Attorney Generer the company has the ability "to exercise restraining al and the findings of the Kansas State Bank Commisor directing influence" over the second company. The sioner, entered after consideration of the contentions Attorney General further stated that ownership by Applicant of 24.9 percent of the voting shares and 100 percent of the preferred stock of Coffeyville is insuffi- 11. Applicant's right to cause the dissolution of Coffeyville and the cient to give Applicant control, as a matter of law, sale of its shares of Bank in the event Applicant's option is not over Coffeyville, the voting shares of Bank held by exercised or a transfer under the provisions of the Stockholders Agreement cannot be made, was also not viewed by the Attorney General as giving Applicant control over Bank's voting shares because such action would cause the dispersal of the bank shares and assets and would be consistent with the underlying purpose of the 8. Whitney National Bank in Jefferson Parish v. Bank of New Kansas statute prohibiting "perpetual corporate management of bank Orleans & Trust Company, 379 U.S. 411 (1965); Bankers Trust New shares and assets." York Corporation, 59 FEDERAL RESERVE BULLETIN 364 (1973). 12. See, e.g., Credit and Commerce American Holding, N.V., 9. Kan. Stat. Ann. §§ 9-504 and 9-505 (1975). Netherlands Antilles, 65 FEDERAL RESERVE BULLETIN 254 (1979). 10. 82 Op. Kan. Att'y Gen. 196 (September 8, 1982). NCNB Corporation, 68 FEDERAL RESERVE BULLETIN 54 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 97 of KIBA and all facts developed in the proceeding, are significant differences between the federal Bank Holdnot unreasonable or inconsistent with the evidence of ing Company Act and the Kansas bank holding comparecord or the language and purpose of the Kansas ny statute, a finding of control for purposes of the banking statute. The opinions are therefore entitled to federal act is not precluded by a finding of no control deference and may be relied upon by the Board as under the Kansas statute. Unlike the Kansas banking evidence of the consistency of this proposal with statute, which focuses only on ownership of voting Kansas law.13 shares or control of the election of a majority of the The record, including the depositions conducted by board of directors of a bank, the federal act defines the Commissioner, contains no evidence of explicit or control to include any situation where the Board tacit agreements between Ms. Rodgers and Applicant, determines that a company exercises a controlling other than the documents and agreements submitted influence over the management or policies of a bank, with this application, relating to ownership or control without regard to whether that company owns or of Coffeyville or Bank or their management, policies controls voting shares of the bank or has the ability to or operations, or regarding the voting shares of Bank elect a majority of the bank's board of directors.15 held by Coffey ville. The record shows that Ms. Rod- In the Board's judgment, the long-term option in gers has made a personal investment in Coffeyville favor of Applicant to purchase the voting shares of using her own resources; that she has not been indem- Coffeyville owned by Ms. Rodgers and the other nified by Applicant for her investment; and that she restrictions on the transferability of these shares,16 has no significant ownership or management affiliation Applicant's guarantee of the purchase agreement bewith Applicant. There is no evidence that she is acting tween Coffeyville and present shareholders of Bank,17 as an agent of or for or on behalf of Applicant or any and the fact that Applicant will hold approximately 88 person acting for Applicant, or that she is affiliated in percent of the total equity of Coffeyville and will bear any other way with Applicant. substantially all of the risk of loss or gain on the The record also shows that Ms. Rodgers proposes to proposal,18 demonstrate that Applicant will control act as President and Chairman of the Board of Coffey- Coffeyville and Bank for purposes of section 2(a)(2) of ville and to exercise active control over Coffeyville the act and the Board's regulations thereunder.19 In and Bank, and to appoint her personal financial advis- this connection, Applicant has agreed to register and er as a director of Coffeyville and Bank. Ms. Rodgers report Coffeyville and Bank as subsidiaries for purwill thus control two of the three seats on Coffeyville's poses of the Bank Holding Company Act and section board of directors. Applicant will elect one repre- 23A of the Federal Reserve Act, (12 U.S.C. § 371c). sentative to the board of directors of Coffeyville and The Board's finding that Applicant will control has committed not to take any action that would Coffeyville under the federal Bank Holding Company represent or result in control over Coffeyville or Bank Act does not bar approval of this application since the for purposes of the Kansas banking statute. In view of all of the facts of record, and, in particular, the opinions of the Kansas Attorney General and 15. (12 U.S.C. § 1841(a)(2)(C)). The federal act also defines control State Bank Commissioner, the Board concludes that to include control by a company acting through one or more persons. (12 U.S.C. § 1841(a)(2)(A)). The Kansas statute has no similar proviconsummation of the proposal will not violate the sion. Kansas bank holding company statute.14 16. The Board has established a presumption in Regulation Y that While consummation of the proposed transaction attributes control of shares to any company that enters into any agreement placing long-term restrictions on the rights of a fiolder of does not appear to allow Applicant to control Coffey- voting securities. (12 CFR § 225.2(b)(4)) (1982). ville or Bank for purposes of the Kansas banking 17. See, e.q., The Jacobus Company and Inland Financial Corporation, 60 FEDERAL RESERVE BULLETIN 130 (1974); Mid America statute, the Board concludes, based upon the facts of Bancorporation, Inc., 60 FEDERAL RESERVE BULLETIN 131 (1974). record and established Board precedent, that Appli- 18. In its letter, dated June 23, 1982, regarding a proposal by cant will control Coffeyville and Bank for purposes of Security Corporation, Duncan, Oklahoma, the Board determined that the ownership by a one-bank holding company of nonvoting common the federal Bank Holding Company Act. Because of stock representing 99.6 percent of another bank's total equity coupled with the purchase of 100 percent of the voting stock of the bank by the company's officers and directors represented control of the bank under both the act and an Oklahoma statute prohibiting the formation of multibank holding companies. The presence in this case of an 13. See, Northwest Kansas Banc Shares, Inc., 69 FEDERAL RE- independent third party with control of 75.02 percent of the voting SERVE BULLETIN 105 (1983) (Press Release, dated January 11, 1983); shares of Coffeyville may distinguish this case from the Oklahoma Sierra Petroleum Co., Inc., 63 FEDERAL RESERVE BULLETIN 938 situation for purposes of state law. In addition, in the Oklahoma (1977); Valley View Bancshares, Inc., 61 FEDERAL RESERVE BULLE- situation, the Oklahoma Bank Commissioner had advised the Board of his determination that the proposal violated the Oklahoma statute and TIN 676 (1975). Security did not seek the approval of the Board or the state for the 14. The Board agrees with the Attorney General that KIBA's acquisition. reliance on interpretations of the federal Bank Holding Company Act is misplaced because of certain significant differences between the 19. (12 U.S.C. § 1841(a)(2)); (12 CFR § 225.2(b)). See also Policy federal act and the Kansas bank holding company statute, which are Statement on Nonvoting Equity Investments by Bank Holding Comdiscussed below. panies, 68 FEDERAL RESERVE BULLETIN 413 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • February 1983 federal act specifically permits the formation and Board concludes that a formal hearing is not warranted operation of multibank holding companies. The re- in this case, and hereby denies KIBA's request for a quired application for the Board's approval under the hearing. act has been filed and, as noted, the competitive, On the basis of the record, and for the reasons financial, managerial, and convenience and needs discussed above, the application is hereby approved. standards in the act have been met. The proposal also The transaction shall not be made before the thirtieth does not involve an interstate bank acquisition that day following the effective date of this Order or later would violate section 3(d) of the act, and Applicant is than three months after that date, unless such period is not engaged in impermissible nonbanking activities. extended for good cause by the Board or by the There is thus no basis for denial of this application Federal Reserve Bank of Kansas City, pursuant to under the federal Bank Holding Company Act. delegated authority. The Board has also considered KIBA's request for a By order of the Board of Governors, effective formal hearing. KIBA contends that a formal hearing January 18, 1983. is required in this case in order to explore fully and develop information regarding whether Applicant will Voting for this action: Vice Chairman Martin and Govercontrol Coffeyville for purposes of Kansas law. nors Partee, Teeters, Rice, and Gramley. Absent and not The act requires the Board to hold a formal hearing voting: Chairman Volcker and Governor Wallich. regarding an application submitted under section 3 of the act only in the event that the Office of the (Signed) JAMES MCAFEE, [SEAL] Associate Secretary of the Board. Comptroller of the Currency or the state supervisory authority expresses written disapproval of the proposed transaction.20 This hearing requirement is not Northwest Kansas Banc Shares, Inc., triggered in this case because the Comptroller of the Hutchinson, Kansas Currency has not expressed written disapproval of the proposed transaction. Southwest Kansas Banc Shares, Inc., Further, KIBA has been given the opportunity to Hutchinson, Kansas submit facts and arguments to the Board regarding this application, and has not provided any basis to support Santa Fe Trail Banc Shares, Inc., the belief that the facts already before the Board are Hutchinson, Kansas incomplete or insufficient to permit the Board to carry out its responsibility under the act, or that further Arkansas Valley Banc Shares, Inc., investigation would produce additional relevant infor- Hutchinson, Kansas mation. Nor has KIBA identified any relevant facts that are in dispute. Rather, KIBA disputes the conclu- Order Approving Acquisition of Shares of a Bank sion drawn by the state authorities regarding the Holding Company existence of control under state law. The Board is not required to hold a formal hearing where a party Northwest Kansas Banc Shares, Inc. ("Northwest"), disputes the conclusion to be drawn from established Southwest Kansas Banc Shares, Inc. ("Southwest"), facts or where such proceeding would not serve to Santa Fe Trail Banc Shares, Inc. ("Santa Fe"), Ardevelop new or useful facts.21 kansas Valley Banc Shares, Inc. ("Arkansas"), all in Accordingly, based on these facts, the extensive Hutchinson, Kansas (together, "Applicants"), each a submissions by the parties, and the investigation by registered one-bank holding company within the the Commissioner, including the depositions of meaning of the Bank Holding Company Act, as Ms. Rodgers and representatives of Applicant, the amended, (12 U.S.C. § 1841 et seq.), have applied for the Board's approval under section 3(a)(3) of the act, (12 U.S.C. § 1842(a)(3)), to acquire 20.06 percent each 20. (12 U.S.C. § 1842(b)); Northwest Bancorporation v. Board of of the voting shares of Valley Bancorp., Inc., Syra- Governors, 303 F.2d 832, 843-44 (8th Cir. 1962); Grandview Bank & cuse, Kansas ("Valley"), and, thereby, indirectly to Trust Co. v. Board of Governors, 550 F.2d 415 (8th Cir.), cert, denied, 434 U.S. 821 (1977); and, Farmers & Merchants Bank of Las Cruces acquire an interest in Valley State Bank, Syracuse, v. Board of Governors, 567 F.2d 1089 (D.C. Cir. 1977). Kansas ("Valley Bank").1 21. Northwest Bancorporation, supra, n. 20. Moreover, as noted by the Kansas Attorney General, the State Bank Commissioner has a continuing obligation to monitor the future relationship between Applicant and Coffeyville to determine whether Applicant will in fact 1. Under section 3(a)(3) of the act, a bank holding company must control Bank through means other than those presented in the obtain the Board's prior approval to acquire 5 percent or more of the structure of the proposal itself. In the event such determination is voting shares of a bank or bank holding company, regardless of made in the future, the state has the authority to require termination of whether the acquisition would result in control of the bank or the control relationship at that time. company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 99 Notice of these applications, affording opportunity Bank competes in the Hamilton County banking for interested persons to submit comments and views, market, and with 51.9 percent of the total deposits in has been given in accordance with section 3(b) of the commercial banks in the market, is the larger of the act. The time for filing comments and views has two banking organizations located in that market.5 expired and the Board has considered all comments None of the subsidiary banks controlled by Applicants received, including those of the Kansas Bank Commis- competes in the same banking market as Valley Bank. sioner and the Kansas Independent Bankers Associa- With respect to probable future competition, while the tion, in light of the factors set forth in section 3(c) of Hamilton County banking market is highly concentratthe act, (12 U.S.C. § 1842(c)). ed, under Kansas banking law none of the Applicants' Each Applicant is a one-bank holding company by subsidiaries is permitted to branch into the market.6 virtue of its control of a bank located in Kansas. Accordingly, consummation of the proposed transac- Northwest controls The Trego-Wakeeney State Bank, tion would not have any significant effect on competi- Wakeeney, Kansas, with deposits of $28.9 million.2 tion in any relevant market.7 Southwest controls The First National Bank of Where, as in the present case, principals of an Meade, Meade, Kansas, with deposits of $25.4 mil- applicant are engaged in operating a chain of banking lion. Santa Fe controls Haskell County State Bank, organizations, the Board analyzes the proposal before Sublette, Kansas, with deposits of $28.6 million. Ar- it, as well as the financial and managerial resources kansas controls The Farmers State Bank, Yoder, and prospects of the chain, within the context of the Kansas, with deposits of $9.4 million. Board's multi-bank holding company standards. Thus, Arkansas, Sante Fe, and Southwest are affiliated the Board has considered the financial and managerial through common management and shareholders.3 resources of the three commonly owned Applicants Mr. Merle D. Starr now owns approximately 44 per- within the context of its multi-bank holding company cent of each of these three Applicants and is the largest standards. In addition, the Board has evaluated the single shareholder of each. Upon consummation of the financial and managerial resources of the fourth Appliproposal, Mr. Starr's ownership in these organizations cant, Northwest, as well as those of Valley and Valley would be reduced to about 40 percent. Mr. Starr and Bank. In this instance, the financial and managerial Messrs. Richard C. Cooper and James C. Thompson, resources of each of the Applicants, their subsidiaries, Jr., are directors and officers of these three holding Valley and Valley Bank are considered generally satiscompanies and their subsidiary banks.4 Messrs. Coo- factory and the future prospects of each are favorable. per and Thompson also each own between 2.65 and 7.7 Considerations relating to the convenience and needs percent of Arkansas, Santa Fe, and Southwest. Fol- of the communities involved are consistent with aplowing the acquisition of Valley by the Applicants, proval. Messrs. Starr, Cooper, and Thompson would become In acting on an application under the act, the Board directors and officers of Valley. is required to consider, in addition to the competitive, Each of the Applicants is one of the smaller banking financial, managerial and convenience and needs facorganizations in Kansas, and together they control less tors set out in the act, whether the proposal would than one percent of the total deposits in commercial comply with the provisions of relevant state law, and banks in the state. Valley, which is a one-bank holding the Board may not approve an application that would company by reason of its ownership of Valley Bank result in a violation of state law.8 with deposits of $13.4 million, is also one of the The Kansas Independent Bankers Association smaller banking organizations in the state, and con- ("KIBA") has objected to approval of these applicatrols less than one percent of the total deposits in tions based on its view that consummation of the commercial banks in the state. Accordingly, acquisi- proposed transactions would violate a provision of tion of Valley's voting shares by each of these Appli- Kansas law that prohibits a company from owning, cants will not have any significant effect on the concentration of banking resources in Kansas. 5. The Hamilton County banking market is approximated by Hamilton County, Kansas. 2. All financial data are as of December 31, 1981. 6. Kan. Stat. Ann. § 9-1111 (1975). 3. The fourth Applicant, Northwest, is majority-owned by an 7. Although one Applicant, Sante Fe, holds 4.9 percent of the individual who is not a shareholder, director or officer of the other voting shares of First National Bank, Syracuse, Kansas ("First three Applicants. Northwest holds approximately 4 percent of the National"), the only other bank in the Hamilton County banking voting shares of each of the other three Applicants. Arkansas and market, they do not have any common directors and officers and it Santa Fe hold approximately 4.5 percent of the voting shares of does not appear that Santa Fe controls First National within the Northwest. meaning of the act. 4. Messrs. Starr, Cooper, and Thompson do not serve as officers or 8. Whitney National Bank in Jefferson Parish v. Bank of New directors and are not shareholders of Northwest. Orleans & Trust Company, 379 U.S. 411 (1965). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Federal Reserve Bulletin • February 1983 controlling or holding with power to vote 25 percent or Acting on the basis of the Attorney General's opinmore of the voting shares of each of two or more ion, the Commissioner initiated an investigation. Spebanks, or from controlling the election of a majority of cifically, on October 12, 1982, the Commissioner dethe directors of each of two or more banks.9 KIBA posed a number of the individuals associated with the asserts that, as a result of the common ownership and Applicants, Valley, and Valley Bank. The Commisthe common officers and directors among three of the sioner questioned the individuals concerning their Applicants, one or more of these Applicants, or all of interests in the various institutions involved and the the Applicants as a combined entity, would control existence of agreements among them or the Applicants more than 25 percent or more of the shares of more in connection with their purchase or ownership of than one bank in violation of Kansas law.10 shares of Valley. The parties indicated that the only By letter dated July 8, 1982, the Kansas Bank such agreement was the right of first refusal by each Commissioner advised the Board that the applications Applicant and its shareholders with respect to the sale raised questions under state law and that he had of its own shares. On October 21, 1982, the Commisrequested from the State Attorney General an opinion sioner issued an opinion stating that the proposal regarding the legality under Kansas law of a case involved "no apparent violation" of Kansas banking involving similar facts. The Commissioner, KIBA and statutes. The Attorney General's and Commissioner's the Applicants requested that the Board defer action opinions and the transcript of the evidentiary proceedon these applications pending receipt of an opinion ings before the Commissioner have been furnished to from the state. the Board and have been made a part of the record on On September 8, 1982, the Attorney General issued these applications. an opinion concerning the proposed acquisition by The Board, in acting on applications under the act, three commonly owned and managed Kansas one- is required to make a determination of whether a bank holding companies of 24 percent each of the proposal is consistent with state law.12 The Board may voting shares of a new one-bank holding company." and has in the past given substantial weight to rea- The Attorney General's opinion states that the ques- soned opinions of state authorities.13 In this case the tion of control for purposes of the Kansas bank Board believes that the opinion of the Attorney Generholding company statute is an issue of fact and that, al and the findings of the Bank Commissioner are because of certain important differences between Kan- reasonable and entitled to deference and may be relied sas law and the federal act, Board and judicial inter- on by the Board as evidence of the consistency of this pretations of the federal act are not relevant in inter- proposal with Kansas law.14 preting the Kansas law. The opinion identified a The Kansas authorities found that there are no number of factors, including the following, that would agreements, understandings or arrangements among be evidence of control under Kansas law: the exis- the Applicants or their shareholders relating to the sale tence of a stockholders' agreement, voting trust or or voting of the shares of Valley or Valley Bank or the other agreement regarding the voting shares of the operations or control of Valley or Valley Bank. There acquiree bank or bank holding company, or any oral or is also no evidence in the record that any of the written agreement or arrangement that could provide Applicants is acting for, at the direction of, or on for the horizontal integration of two or more of the behalf of any of the other Applicants or that the existing bank holding companies. The Attorney Gen- shareholders of the Applicants are acting for or on eral rejected the claim that the three holding compa- behalf of any of the Applicants such that the shares of nies may be deemed to control the shares of the Valley held by any of the Applicants may be attributed acquiree bank held by each other merely because the to any other Applicant. Similarly, there is no evidence three bank holding companies are commonly owned that any of the Applicants has made loans or issued and have common officers and directors. The Attorney General also stated that the three commonly owned and managed companies would not together constitute 12. Iowa Independent Bankers Association v. Board of Governors a "company" under Kansas law in the absence of of the Federal Reserve System, 511 F.2d 1288, 1293 (1975). 13. NCNB Corporation, 68 FEDERAL RESERVE BULLETIN 54 evidence that they were being operated as a single, (1982); Western Kentucky Bancshares, Inc., 67 FEDERAL RESERVE "horizontal" or integrated organization. BULLETIN 741 (1981); Credit and Commerce American Holdings, N.V. and Credit and Commerce American Investment, B.V., 65 FEDERAL RESERVE BULLETIN 254 (1979); Valley View Bancshares, Inc., 61 FEDERAL RESERVE BULLETIN 676 (1975). 14. The Board has previously approved the acquisition by two 9. Kan. Stat. Ann. §§ 9-504 and 9-505 (1975). commonly owned Kansas one-bank holding companies of 24.9 percent 10. While KIBA includes Northwest in the alleged control group, each in a third Kansas one-bank holding company in reliance on an Northwest does not have shareholders or management in common opinion of the Kansas Bank Commissioner that the proposal would with the other three Applicants. not violate Kansas law. Sierra Petroleum Company, Inc. and K&B 11. 82 Op. Kan. Att'y Gen. 195 (September 8, 1982). Producers, Inc., 63 FEDERAL RESERVE BULLETIN 938 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 101 indemnifications or guarantees with respect to the activities. There is thus no basis for denial of any of acquisition of any of the Applicant's shares by their these applications under the federal act. Because each shareholders. Each Applicant bears the risk of gain or of the Applicants has registered as a bank holding loss from its proposed investment in Valley and does company with the Board and has filed an application not in any way guarantee or support the investment of for the Board's approval to acquire an interest in any other Applicant. There is also no evidence of a Valley, the Board finds no purpose to be served in "formalized structure" or agreements or arrange- requiring the Applicants to register as a single multiments binding the Applicants together as an organized bank holding company under the federal act or to file group or that the Applicants are operated as a "hori- another application with the Board as a single multizontal," integrated organization.15 For these reasons, bank holding company. and in particular based upon the opinions of the Although KIBA has urged the Board to undertake Attorney General of Kansas and the Kansas Bank an "investigation" of this proposal, it has not indicat- Commissioner, the Board concludes that consumma- ed what new relevant information such an investigation of the proposal would not violate the Kansas tion might disclose or provided any evidence that prohibition against multi-bank holding companies.16 further investigation is warranted. Based upon the The Board also believes that the proposal is consist- extensive submissions of the parties, the investigation ent with the provisions of the act. Even if the proposal by the Commissioner, including the depositions of the involves control of Valley or Valley Bank by one or individuals associated with the Applicants, and the more of the Applicants under the federal act, or the opportunity afforded KIBA to submit evidence and Applicants together would constitute a multi-bank arguments concerning the proposed acquisitions, the holding company under the federal act,17 there is no Board concludes that it has sufficient information upon bar to Board approval of the proposal, since the which to make a decision and that no further investigafederal act specifically permits the formation and tion is necessary or warranted. operation of multi-bank holding companies. Each of On the basis of the record, these applications are the Applicants is a registered bank holding company approved for the reasons summarized above. The subject to the Board's supervision, has filed an appli- acquisition of shares of Valley by each of the Application for the Board's approval to acquire Valley's cants shall not be made before the thirtieth day followshares in compliance with the act, and has met the ing the effective date of this Order or later than three competitive, financial, managerial and convenience months after that date, unless such period is extended and needs tests set forth in the act. The proposal also for good cause by the Board or by the Federal Reserve does not involve an interstate bank acquisition that Bank of Kansas City, pursuant to delegated authority. would violate section 3(d) of the act, and none of the By order of the Board of Governors, effective Applicants is engaged in impermissible nonbanking January 11, 1983. Voting for this action: Vice Chairman Martin and Governors Partee, Teeters, Rice, and Gramley. Absent and not 15. The Kansas statute expressly excludes "partnership" from the voting: Chairman Volcker and Governor Wallich. definition of company, while the federal act expressly includes a partnership as a company. The Board has stated that the addition of the term "partnership" to the definition of company in the federal act (Signed) JAMES MCAFEE, indicates a Congressional intent to include groups of individuals and [SEAL] Associate Secretary of the Board. companies bound together by a formal structure or agreement. American Security and Trust Company and American Security Corporation, 60 FEDERAL RESERVE BULLETIN 875 (1974). Thus, it is possible for a group of individuals or companies to constitute a "company" for the purpose of the federal act, but not under the Kansas statute. As noted below, the Applicants have each filed an for the purpose of acquiring or managing a bank or a bank holding application for the Board's prior approval under section 3 of the act, company. See Board letter, dated September 13, 1982, to John D. and the Board is not required to make a finding concerning whether Hawke, Jr.; Board letter, dated November 15, 1978, to William C. the Applicants together constitute a company for the purposes of the Beaman; Commerce Bank Corporation, 66 FEDERAL RESERVE BULact. LETIN 506 (1980); and Board letter, dated September 13, 1977, to John 16. The Board agrees with the Attorney General that KIBA's P. Roemer, aff. sub. nom., Central Bank v. Board of Governors, No. reliance on interpretations of the federal act is misplaced. There are 77-1937 (D.C. Cir. November 21, 1978). significant differences between the federal act and the Kansas bank The Beaman letter involved six one-bank holding companies under holding company statute. For example, the federal act definition of the complete control of an individual, acting at his direction as an control includes control by a company "acting through one or more organized group to make a tender offer for an out-of-state bank persons," as well as by "exercising a controlling influence over the holding company. In the present case, there is no absolute control management or policies of the bank or company." (12 U.S.C. exercised by any individual over the Applicants that would deprive § 1841(a)(2)). The Kansas statute does not contain similar control them of the ability to act independently and there is no evidence of provisions. See also footnote 15, above. integrated operations among the Applicants. Finally, even if the 17. In the past the Board has concluded that a group of individuals commonly owned Applicants were together a "company" under or companies would not together constitute a "company" under the federal law, the proposed acquisition (unlike the interstate acquisition act where there is no formalized structure or agreements among them at issue in the Beaman letter) would not be prohibited by the act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • February 1983 Old Kent Financial Corporation, would increase to 6 percent. The concentration ratio of Grand Rapids, Michigan the five largest banking organizations in Michigan would be unaffected by this proposal, and there would Order Approving the Acquisition of a Bank Holding remain a number of other banking organizations in Company Michigan of the approximate size of Pacesetter.3 Accordingly, it is the Board's view that consummation of Old Kent Financial Corporation, Grand Rapids, Mich- this acquisition would have no significant effect upon igan, a bank holding company within the meaning of the concentration of commercial bank resources in the Bank Holding Company Act, has applied for the Michigan. Board's approval under section 3 of the act The subsidiary banks of Applicant compete directly (12 U.S.C.§ 1842) to acquire 100 percent of the voting with the subsidiary banks of Pacesetter in the Detroit shares of the successor by consolidation to Pacesetter and Muskegon-Grand Haven banking markets.4 In the Financial Corporation, Grand Rapids, Michigan Detroit market, consummation of the merger would ("Pacesetter"). As a result of the acquisition and not have any significant effect on competition between merger, Applicant would indirectly acquire Paceset- Applicant and Pacesetter.5 The combined post-merger ter's 10 subsidiary banks: Pacesetter Bank & Trust- market share of Applicant's and Pacesetter's subsid- Grand Traverse, Traverse City, Michigan; Pacesetter iary banks in Detroit would be 1.3 percent. The four- Bank and Trust, Owosso, Michigan; Pacesetter Bank firm concentration ratio after consummation would & Trust-Southwest, Niles, Michigan; Pacesetter Bank remain unchanged at its current ratio of 71 percent and & Trust-West, Grand Haven, Michigan, The Brighton approximately 45 other commercial banking organiza- State Bank, Brighton, Michigan; Hillsdale State Sav- tions would continue to compete in the market. ings Bank, Hillsdale, Michigan; Pacesetter Bank- Applicant is the seventh largest of eight banking Southeast, Grand Blanc, Michigan; Pacesetter Nation- organizations in the Muskegon-Grand Haven banking al Bank, Cassopolis, Michigan; Pacesetter Bank-Lan- market and controls 2.3 percent of market deposits in sing, Michigan; The Almont Savings Bank, Almont, commercial banks in the market.6 Pacesetter is the Michigan. fourth largest organization in this market and controls Notice of the applications, affording opportunity for 16.7 percent of market deposits. Upon consummation, interested persons to submit comments and views, has Applicant would become the third largest banking been given in accordance with section 3 of the act. The organization in the market with 19 percent of deposits time for filing comments and views has expired, and in commercial banks in the market. In view of the size the Board has considered the applications and all of the market shares held by Applicant and Pacesetter, comments received in light of the factors set forth in the Board has carefully considered whether consumsection 3(c) of the act (12 U.S.C. § 1842(c)).1 mation of the proposal would eliminate substantial Applicant, with 13 subsidiary commercial banks, existing competition between Applicant and Pacesethas aggregrate deposits of $1.7 billion.2 It is the sixth ter. On previous occasions, the Board has relied upon largest commercial banking organization in Michigan commitments by bank holding company applicants to and controls 3.9 percent of total deposits in commer- divest banking subsidiaries in markets where a procial banks in the state. Pacesetter is the state's seventh posed acquisition raised serious concerns regarding largest banking organization, controlling $924.1 mil- the elimination of existing competition. See Barnett lion in deposits, or 2.1 percent of total deposits in Banks of Florida, Inc., 68 FEDERAL RESERVE BULLEcommercial banks in the state. Upon consummation of TIN 190 (1982); Fidelity Union Bancorporation, 66 the proposed acquisition, Applicant would remain Michigan's sixth largest banking organization and its share of deposits in commercial banks in the state 3. These facts, the increased competition in the financial services industry generally, and the absence of any substantial adverse effects on probable future competition in any relevant geographic market in this case mitigate the Board's previously expressed concerns regard- 1. The Board received a comment on the application from two ing the concentration of banking resources in Michigan. Old Kent shareholders of Pacesetter who claimed that they would not receive Financial Corporation/Peoples Banking Corporation, 65 FEDERAL equitable treatment under the terms of the merger agreement. Al- RESERVE BULLETIN 1010 (1979). though there are limits on the Board's ability to consider complaints 4. Market data for the Detroit market are as of December 31, 1981. by dissenting shareholders, the Board has taken these comments into All other individual market data are as of June 30, 1981. consideration in reviewing this application. See Western Bancshares, 5. The Detroit market is approximated by Wayne, Macomb, and Inc. v. Board of Governors of the Federal Reserve System, 480 F.2d Oakland Counties plus 33 cities and townships from St. Clair, Lapeer, 749 (10th Cir. 1973). Upon the basis of all facts of record the Board Livingston, Washtenaw, and Monroe Counties, all in Michigan. does not believe these comments warrant an adverse finding as to 6. The Muskegon-Grand Haven market is approximated by Muske- Applicant's overall managerial resources. gon County, Michigan, except for Casnovia township plus Grand 2. Statewide deposit data represent total deposits in domestic Haven, Spring Lake, Crockery, and Robinson townships in Ottawa offices as of December 31, 1981. County, Michigan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 103 FEDERAL RESERVE BULLETIN 576 (1980). While the mergers and acquisitions.9 In evaluating the effects of Board is concerned with the effects of the merger in a proposed merger or acquisition upon probable future the Muskegon-Grand Haven market, a number of competition, the Board considers market concentrafactors indicate that the anticompetitive effects in this tion, the number of probable future entrants into the banking market are not so serious as to warrant denial. market, the attractiveness of the market for de novo First, consummation of this proposal would not and/or foothold entry, and the size and market position disturb the competitive balance or structure in the of the firm to be acquired. The Board has also consid- Muskegon-Grand Haven market. Applicant's subsid- ered the likelihood that the Applicant or Pacesetter iary bank in the market, a comparatively small market would enter each other's markets de novo or on a institution, would be combined with the Pacesetter foothold basis absent approval of the acquisition. subsidiary bank to become a viable, but not dominant, With regard to 13 of these 17 markets, two or more competitor. There are currently eight banking organi- of the criteria set out in the Board's guidelines are not zations in the market, five of which have market met. In light of this fact and based upon the Board's shares in excess of 10 percent, and three of which are review of the other factors listed above, the Board controlled by banking organizations that are among concludes that the acquisition would not have a subthe 15 largest in the state. After the merger, five of the stantial adverse effect on probable future competition seven remaining banking organizations in the market in these markets. would continue to have market shares of over 10 With respect to the remaining four markets, the percent, and two of these institutions would have record shows that none of these markets is attractive market shares larger than Applicant. for de novo or foothold entry. The Owosso market has Second, the level of market concentration has de- commercial bank deposits of $266 million, only slightly clined by 10 percentage points over the last five years. higher than required by the guidelines, is rural in In this regard, although the market's Herfindahl- nature, and has an average growth rate and deposit-to- Hirshmann Index ("HHI") is 1963, consummation of office ratio below the state and national average.10 The this merger would increase the HHI by only 71 points. Holland market includes a part of the Grand Rapids On this basis, the merger would not be subject to SMSA, and all banks in the Holland market are challenge under the Department of Justice guidelines. currently controlled by the state's major bank holding The Department has not commented upon the applica- companies.11 The Holland market also has deposit to tion.7 In light of the foregoing and other facts of office and population-to-office ratios that are below the record, the Board concludes that consummation of state average. The Grand Rapids market12 also has this proposal would not have a significant effect on below average deposit to office and population-toexisting competition in the Muskegon-Grand Haven office ratios as well as a growth rate below the state market.8 and national averages. Finally, the Hillsdale market There are 17 markets in which either Applicant or has total deposits of only $178.2 million and a deposit- Pacesetter, but not both, compete. The nine markets to-office ratio significantly below the state average.13 in which only Old Kent operates are: Big Rapids, Based on the foregoing and other facts of record, Cadillac, Fremont-Newaygo, Gaylord, Grand Rapids, including the specific economic, demographic, and Holland, Kalamazoo-Battle Creek, Petoskey, and structural characteristics of these markets, the Board Roscommon. The eight markets in which only Pacesetter competes are: Ann Arbor, Benton Harbor-St. Joseph, Elkhart-Niles, Flint, Hillsdale, Lansing, 9. "Proposed Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Owosso, and Traverse City. The Board has considered Bank Merger Act and the Bank Holding Company Act." 47 Federal the effects of the proposal on probable future competi- Register 9017 (March 3, 1982). Although the proposed policy statetion in these geographic markets and has also exam- ment has not been approved by the Board, the Board is using the policy guidelines in its analysis of the effects of a proposal on probable ined the proposal in light of its proposed guidelines for future competition. assessing the competitive effects of market extension 10. The Owosso banking market is approximated by Shiawassee County, Michigan. 11. The Holland banking market is approximated by Park, Holland, Zeeland, Olive, and Port Sheldon townships in Ottawa County, Michigan plus Laketown, Fillmore, and Overisel townships in Allegan County, Michigan. 7. Although the market is considered highly concentrated because it 12. The Grand Rapids banking market is approximated by Kent has an HHI of over 1800, the Department of Justice has stated that it is County except for Oakfield and Spencer townships; Thornapple not likely to challenge a merger unless the change in the HHI exceeds township in Barry County; Leighton, Dorr, and Salem townships in 100 points, although it scrutinizes all mergers in highly concentrated Allegan County; Jamestown, Georgetown, Blendon, Allendale, Tallmarkets where the change is between 50 and 100 points. madge, Polkton, Wright, and Chester townships in Ottawa County; 8. The Board also notes that three thrift institutions in the market and Casnovia township in Muskegon County, all in Michigan. nave aggregate deposits of $215.5 million, or approximately 30 percent 13. The Hillsdale County banking market is approximated by of total commercial banking deposits in the market. Hillsdale County, Michigan. 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104 Federal Reserve Bulletin • February 1983 concludes that there are insufficient grounds upon concern, the Board has relied, as a condition to which to determine that consummation of the proposal approval of the applications, upon commitments by would have any significant adverse effect on probable bank holding company applicants to divest subsidiary future competition. Thus, competitive considerations banks or offices in the affected banking markets. I are consistent with approval of the application. believe it would be appropriate for the Board to The financial and managerial resources of Applicant require such an undertaking in this case. and its subsidiaries are regarded as generally satisfac- I continue to be concerned, moreover, with the tory, and their future prospects appear favorable. Board's general approach to the evaluation of the Financial and managerial considerations are, there- effects of a merger on probable future competition in fore, consistent with approval of the application. Ap- particular banking markets. In this regard, the Board plicant intends to centralize certain of Pacesetter's has proposed guidelines as a method of addressing the services and to make other specialized services, in- standards set out by the United States Court of cluding Economic Development Corporation financ- Appeals for the Fifth Circuit in Mercantile Texas ing, cash management techniques, and trust and inter- Corporation v. Board of Governors, 638 F.2d 1255 (5th national services, available to all Pacesetter banks. Cir. 1981). By their terms, the Board's proposed Thus, considerations relating to the convenience and guidelines are inapplicable to 13 of the 17 markets needs of the communities to be served lend weight affected by the proposed merger. In addition, although towards approval of the applications. the Board's proposed probable future guidelines ap- Based on the foregoing and the facts of record, the pear to require more intensive analysis in the remainapplications are approved for the reasons set forth ing four markets, the Board has nonetheless deterabove. The acquisition and merger pursuant to section mined that consummation of the proposal would not 3 of the act shall not be made before the thirtieth have any significant adverse effect on probable future calender day following the effective date of this Order, competition in these markets. Given the relative and or later than three months after the effective date of absolute size of the banking organizations involved, I this Order, unless such period is extended for good find it difficult to believe that the amount of probable cause by the Board or by the Federal Reserve Bank of future competition eliminated as a result of this pro- Chicago, pursuant to delegated authority. posal would be as insignificant as application of the By order of the Board of Governors, effective Board's proposed guidelines seems to imply. As I have January 25, 1983. previously stated, the Board's reliance upon its proposed guidelines has allowed a number of combina- Voting for this action: Governors Wallich, Partee, Rice, tions of bank holding companies that, in my opinion, and Gramley. Voting against: Governor Teeters. Absent and are substantially anticompetitive. not voting: Chairman Volcker and Vice Chairman Martin. January 25, 1983 (Signed) JAMES MCAFEE, [SEAL] Associate Secretary of the Board. Texas Commerce Bancshares, Inc., Houston, Texas Dissenting Statement of Governor Teeters Order Approving Acquisition of Bank I dissent from the decision of the Board that the competitive effects resulting from consummation of Texas Commerce Bancshares, Inc., Houston, Texas this proposal would not be so serious as to warrant ("Applicant"), a bank holding company within the denial of the application. meaning of the Bank Holding Company Act, has In my opinion, the effects of this proposed merger applied for the Board's approval under section 3(a)(3) on existing competition in the Muskegon-Grand Ha- of the act (12 U.S.C. § 1842(a)(3)) to acquire 100 ven banking market would be substantially adverse. percent of the voting shares of Lockwood National The Muskegon-Grand Haven market is highly concen- Bank of Houston, Houston, Texas ("Bank"). trated and Applicant's share of commercial bank de- Notice of the application, affording opportunity for posits in the market would increase from approximate- interested persons to submit comments and views, has ly 2.3 percent to 19 percent. Pacesetter would be been given in accordance with section 3(b) of the act. eliminated as an independent competitor and the num- The time for filing comments and views has expired, ber of commercial banking alternatives would be re- and the Board has considered the application and all duced to seven. In other instances where the elimina- comments received in light of the factors set forth in tion of existing competition has been of serious section 3(c) of the act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 105 Applicant, the second largest banking organization transaction would be consistent with the public interin Texas, controls 62 banking subsidiaries1 with total est and that the application should be approved. deposits of approximately $10.0 billion, representing On the basis of the record, this application is ap- 9.43 percent of total deposits in commercial banks in proved for the reasons summarized above. The transthe state.2 Bank, with deposits of $130.4 million, is the action shall not be made before the thirtieth calendar 53rd largest commercial banking organization in Tex- day following the effective date of this Order, or later as, holding 0.12 percent of total deposits in commer- than three months after the effective date of this cial banks in the state. Upon consummation, Appli- Order, unless such period is extended for good cause cant will remain the second largest banking by the Board or by the Federal Reserve Bank of Dallas organization in the state, controlling 9.55 percent of acting pursuant to delegated authority. total commercial bank deposits in the state. Thus, the By order of the Board of Governors, effective Board concludes that acquisition of Bank would have January 31, 1983. no significant effect on the concentration of banking resources in Texas. Voting for this action: Chairman Volcker and Governors Bank is the 20th largest banking organization in the Martin, Wallich, Partee, Teeters, Rice, and Gramley. Houston banking market,3 controlling approximately 0.48 percent of the total deposits in commercial banks (Signed) JAMES MCAFEE, in the market. Applicant also competes in the Houston [SEAL] Associate Secretary of the Board. banking market, and is the largest banking organization in the relevant market, controlling about 20.8 percent of total deposits in commercial banks in the Orders Under Section 4 of Bank Holding market. Upon consummation, Applicant's market Company Act share of deposits would increase to 21.3 percent. Thus, consummation of this proposal would eliminate BankAmerica Corporation, some existing competition between Applicant and San Francisco, California Bank. However, any adverse competitive consequences are mitigated by the following and other facts Order Approving Acquisition of Retail Discount of record. First, numerous banking organizations com- Brokerage Firm pete in the market, including the state's largest banking organizations. Also, the Houston banking market BankAmerica Corporation, San Francisco, California would not be a highly concentrated market after ("BAC"), a bank holding company within the meaning consummation of this proposal, with a four-firm con- of the Bank Holding Company Act, has applied for the centration ratio of 61.8 percent. In light of the above, Board's approval under section 4(c)(8) of the act the Board finds that the acquisition would not have (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the any significant adverse effects on competition or on Board's Regulation Y (12 CFR § 225.4(b)(2)) to acthe concentration of resources in any relevant area. quire 100 percent of the voting shares of The Charles The financial and managerial resources and future Schwab Corporation, San Francisco, California, a prospects of Applicant, its subsidiaries and Bank _*re company that engages, through its wholly-owned subregarded as generally satisfactory. Accordingly, con- sidiary, Charles Schwab & Co., Inc. ("Schwab"), in siderations relating to banking factors are consistent retail discount securities brokerage, extending margin with approval. Moreover, Bank's affiliation with Ap- loans, and other incidental activities. None of the plicant will enable Bank to avail itself of Applicant's proposed activities is among those that the Board has resources and services. Thus, considerations relating designated in Regulation Y as being closely related to to the convenience and needs of the community to be banking and thus permissible for bank holding compaserved lend slight weight toward approval and out- nies under section 4(c)(8) of the act. weigh any adverse competitive effects that might re- Notice of the application, affording interested parsult from consummation of the proposal. Accordingly, ties an opportunity to submit comments and views, the Board has determined that consummation of the was duly published in the Federal Register. In response to its request for comments on this application, the Board received 17 written comments opposing the acquisition, and 82 favoring the acquisition, including 1. This figure includes five acquisitions which have received Board comments from the Department of Justice, the Compapproval, but which have not yet been consummated. 2. All banking data are as of December 31, 1981, and include troller of the Currency, and the Securities and Exacquisitions as of November 30, 1982. change Commission. Among the comments opposing 3. The Houston banking market is approximated by the Houston the proposal were those of the Securities Industry RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 Federal Reserve Bulletin • February 1983 Association (the "SIA"), a national trade association nia ("Bank"). Bank, with domestic deposits of $51.9 representing over 540 securities brokers, dealers, and billion, is the largest commercial bank in the United investment banking organizations. The SIA requested States.2 BAC also operates numerous nonbanking that the Board either deny, or order a formal hearing subsidiaries located throughout the United States and on, BAC's application. abroad, including subsidiaries engaged in consumer On July 6, 1982, the Board issued an order schedul- and commercial lending, mortgage banking, leasing, ing a formal public administrative hearing on BAC's data processing, investment advisory services, and proposal. The Board's hearing order observed that, certain credit-related insurance underwriting and inalthough the questions raised by the various comments surance agency activities in California. and protests to BAC's application might appropriately Schwab is a retail discount securities brokerage firm be resolved through additional written submissions, a headquartered in San Francisco, California. Schwab formal hearing would provide an appropriate and operates 51 offices in 26 states and the District of expeditious method for developing a full record for Columbia, and has recently opened an additional office Board consideration of any disputed material facts. in Hong Kong. Schwab is a member of, and maintains The Board's order established an expedited briefing seats on, various national and regional securities exand hearing schedule. With the consent of the parties changes, including the New York Stock Exchange, the to the hearing, the United States Department of Jus- Chicago Board Options Exchange, and the Pacific tice was permitted to intervene as a party by order Stock Exchange, and is registered with the Securities dated August 20, 1982. and Exchange Commission pursuant to section 15 of A formal public administrative hearing, conducted the Securities Exchange Act of 1934. Schwab buys and in accordance with the Board's Rules of Practice for sells securities solely as agent, on the order and for the Hearings (12 CFR Part 263) was held on September 8, account of customers. Schwab does not purchase or 9, 10, 14, 15, and 16, 1982, in Washington, D.C., sell securities for its own account except to an insigbefore an Administrative Law Judge appointed at the nificant extent, does not engage in dealing or underrequest of the Board. A substantial record on the writing, and gives no investment advice. Schwab application was developed through the submission of characterizes itself as a "discount" broker because its exhibits and testimony and through the participation of commissions are significantly lower than those the SIA, BAC, the Department of Justice, and other charged by full-line brokers. In addition to brokerage interested parties. services, full-line brokers offer investment advice. A In a Recommended Decision dated November 12, Schwab customer is not assigned a personal repre- 1982, Administrative Law Judge Ernest G. Barnes sentative but deals with any available representative, concluded, based upon the evidence of record, that who in many cases enters the customer's order in an BAC's application met the criteria of section 4(c)(8) of automated execution system, which can execute the the act and, accordingly, recommended that the Board order in as short a time as thirty seconds. approve the application without condition. The SIA Schwab also extends credit for the purchase and and BAC timely filed exceptions to the Administrative carrying of securities and provides securities custodial Law Judge's Recommended Decision. services and various other services related to main- Having carefully considered the entire record of the taining customer accounts, such as individual retireproceeding, including the comments received, and the ment accounts, a "sweep" arrangement with an unaftranscript, exhibits, written testimony, rulings, and filiated money market mutual fund, payment of briefs filed in connection with the hearing, the Recom- interest on net free balances awaiting investment, and mended Decision filed by the Administrative Law third party payment services. Judge, together with the exceptions thereto, the Board has determined that the Administrative Law Judge's Schwab's Activities are Closely Related to Banking findings of fact, conclusions, and recommendations, as modified and supplemented herein, are fully supported Section 4(c)(8) of the act permits a bank holding by the evidence of record and should be adopted as the company to engage, directly or through a subsidiary, findings and conclusions of the Board. in activities that the Board, after due notice and BAC, with total consolidated assets of $120.5 billion opportunity for a hearing, has determined by order or is one of the two largest banking organizations in the regulation to be "so closely related to banking ... as United States.1 BAC operates one subsidiary bank, to be a proper incident thereto." The statutory stan- Bank of America N.T. & S.A., San Francisco, Califor- dard requires that two separate tests be met for an 1. Asset data are as of September 30, 1982. 2. Deposit data are as of December 31, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 107 activity to be permissible for a bank holding company. vided by banks and that banking organizations are First, the Board must determine that the activity is, as particularly well equipped to provide such services.6 a general matter, "closely related to banking." Sec- The record shows that, as part of their current ond, the Board must find in a particular case that the services, banks often execute orders involving secuperformance of the activity by the applicant bank rities not listed on an exchange by dealing directly holding company may reasonably be expected to pro- with dealers making a market in the particular duce public benefits that outweigh possible adverse security or with other third parties. In performing effects. these services, banks exercise the same type of discretion and judgment with respect to the best Closely Related to Banking method of execution that brokers do with respect to similar types of orders. Moreover, many banks use a Based on guidelines established in National Courier number of brokers to execute orders placed with the Association v. Board of Governors, a particular activi- bank by its customers or trust department. The ty may be found to meet the "closely related to record shows that in selecting a particular broker to banking" test if it is demonstrated that banks generally execute a given order (especially in the case of have in fact provided the proposed activity; banks orders for a block of securities), these banks make generally provide services that are operationally or the decision themselves as to the best method of functionally so similar to the proposed activity so as to execution, leaving to the broker only the technical equip them particularly well to provide the proposed execution of the transaction. The Securities and activity; or that banks generally provide services that Exchange Commission's 1977 report on bank securiare so integrally related to the proposed activity as to ties activities found that bank trust department require their provision in a specialized form.3 Howev- trading desks, at least at the largest banks, perform er, the National Courier guidelines are not the exclu- the same functions, utilize the same execution techsive basis for finding a close relationship between a niques, employ personnel with the same general proposed activity and banking.4 training and expertise, and use the same facilities, for example, the consolidated tape, Quotron, Aut- Retail Securities Brokerage. The undisputed facts of Ex, and other market information services, that record demonstrate that many banks currently offer brokers do. certain types of securities brokerage services. Many In addition, national banks are expressly authobanks provide informal brokerage services, in rized by statute to purchase and sell securities which, as an accommodation to their customers, without recourse, solely upon the order, and for the banks transmit customer orders to buy or sell securi- account of, customers. (12 U.S.C. § 24 Seventh). ties selected by their customers to brokers for This authority supports the conclusion that execution. In addition, banks, through the trading Schwab's brokerage activities, which are within the desks of their trust departments, routinely buy and plain meaning of the language of this authorization, sell securities as agent for trusts and other accounts are closely related to banking.7 managed by banks.5 Although the record indicates that in 1977 general- As the SIA points out, Schwab's activities differ ly only the largest banks employed sophisticated somewhat from the brokerage functions usually securities trading procedures and resources, the performed by banks: Schwab executes orders for record also shows that the technological changes in the purchase or sale of securities directly, without the securities markets and other developments have the assistance of an intervening broker; and exe- forced bank securities traders in large banks to cutes directly on the exchange orders involving develop and expand their skills and that this trend is securities listed on such exchanges. The Board finds, however, that Schwab's brokerage services are operationally and functionally very similar to the types of brokerage services that are generally pro- 6. The Board has found that the execution of unsolicited orders to buy or sell securities primarily of Israeli corporations solely as agent of the customer by a company that is not a member of a securities exchange is closely related to banking. JCT Trust Company, Ltd., 67 FEDERAL RESERVE BULLETIN 635 (1981). 7. The SIA asserts that this statutory authorization is limited to 3. 516 F.2d 1229, 1237 (D.C. Cir. 1975). providing accommodation brokerage services to existing customers of 4. Id. the bank. Even if this assertion were correct, the fact that an activity 5. Banks also administer employee stock purchase, dividend rein- is not permitted to a bank does not preclude a finding that the activity vestment, and automatic investment service plans, which involve the is closely related to banking and thus permissible for a bank holding periodic purchase of a particular security or securities from a fixed list company. Board of Governors v. Investment Company Institute, 450 of securities, on behalf of a customer. U.S. 46, 64 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • February 1983 expected to continue.8 The Board finds that the use borrowers other than securities firms or financial of sophisticated techniques, resources and person- institutions for the purpose of purchasing or carrynel to execute orders for the purchase or sale of ing securities. In addition, the extension of credit securities for the account of customers is sufficiently secured by stock and other collateral has long been widespread in the banking industry to justify a an important bank activity. The Board's margin finding that banks generally provide securities exe- credit regulations apply both to brokers such as cution services that equip them to offer the type of Schwab (Regulation T) and to banks (Regulation retail brokerage services provided by Schwab. U).n While Regulations T and U impose somewhat Moreover, the Board finds that execution "in the different requirements, the underlying margin credit crowd" on an exchange is a largely ministerial activity engaged in by both banks and brokers is function that involves no greater expertise or re- functionally the same. The Board therefore consources than the execution of orders directly with cludes that Schwab's margin lending activity is third party market makers, which banks generally closely related to banking. now perform.910 The conclusion that Schwab's brokerage activi- Maintenance of Customer Securities Accounts. In ties are closely related to banking is also consistent connection with carrying accounts of its securities with the purposes of the act, which mandates the brokerage customers, Schwab offers various serseparation of banking from commerce in order to vices to its brokerage customers. These services guard against the potential concentration of financial include: Individual Retirement Accounts, for which resources, conflicts of interest, in the control of an unaffiliated savings and loan association serves credit, and risks to insured depository institutions as trustee; a "sweep" arrangement, pursuant to that are likely to result from the control by banking which idle customer balances exceeding a predeterorganizations of commercial enterprises. The laws mined minimum are automatically invested in an restricting bank involvement in the investment unaffiliated money market mutual fund; the payment banking business generally, while expressly recog- of interest on net free balances awaiting investment; nizing that banks have been historically involved in and the "Schwab-One Account", which combines some types of securities activities, are also designed the payment of interest on free credit balances with to avoid conflicts of interests and risks to the safety customer access to such balances through a debit of depository institutions. card and checking account offered under an arrangement with an unaffiliated commercial bank. These Margin Lending. Schwab also engages in the exten- services are increasingly being offered by other sion of margin credit to Schwab's brokerage cus- brokerage firms. The Board finds that each of these tomers for the purchase and carrying of securities. services is identical, or functionally and operational- Banks generally and traditionally have extended ly equivalent to, services generally offered by banks credit to their customers for the purpose of buying to customers directly or through banks' trust departand carrying securities. At the end of 1981, banks ments. Accordingly, the Board finds, on the facts of had outstanding approximately $5 billion in loans to this case, that BAC's provision through Schwab of IRA accounts, a money market sweep, and the "Schwab One Account" is closely related to bank- 8. Schwab also maintains customers' accounts and clears and ing as well as an incidental activity in connection settles executed transactions. Banks perform these functions in con- with Schwab's securities brokerage and margin nection with the buy or sell orders banks effect for trust departments lending activities. and as an accommodation to their customers. In addition, as a retail broker, Schwab deals directly with the public to a far greater extent than the typical bank that offers securities brokerage services. How- Custodial Services. Schwab also provides various ever, the Board concludes that the degree of contact with the public does not substantially alter the type of expertise and judgment types of securities custodial services, involving the necessary to perform execution services, which in the case of both safekeeping of customers' securities, accounting for Schwab and banks generally is substantially the same. dividends or interest received on such securities, 9. Exchange members that are specialists in particular securities may exercise significant discretion and judgment with respect to and other ancillary services. Banks generally offer trading in those securities. Specialists, however, trade for their own securities custodial services in connection with their account. Schwab does not buy or sell securities for its own account trust department and other securities transaction and is not, therefore, a specialist on any exchange. 10. The fact that in many cases banks rely on brokers to execute services. In addition, in extending margin credit, a customer orders placed with the bank does not preclude a finding that lender is required to maintain custody of the securibanks are well equipped to execute these orders directly, since the record shows that to a significant extent banks do effect buy and sell ties pledged to the lender as collateral to secure the orders directly without the intervention of a broker or employ the broker merely to carry out the decision as to the method of execution made by the bank. 11. 12 CFR Parts 220, 221. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 109 loan. Accordingly, the Board finds that the provi- BAC's size and expertise, are likely to assist sion of securities custodial services is closely related Schwab in becoming a more effective competitor.13 to banking and is a necessary incident to permissible Strengthening Schwab as a competitor is likely to margin lending activities. have a procompetitive impact on price competition in the retail brokerage industry.14 Because Schwab, Balance of Public Benefits and Adverse Effects like other discount brokers, competes primarily and aggressively on the basis of price, the strengthening With respect to the "proper incident" requirement, of Schwab may induce full-line brokers to compete section 4(c)(8) of the act requires the Board to consider more vigorously for brokerage business on the basis whether the performance of the proposed nonbanking of price. It is uncontested that the lower commission activity by an affiliate of a bank holding company "can rates charged by discount brokers are taken into reasonably be expected to produce benefits to the account by full-line brokers. The Recommended public, such as greater convenience, increased compe- Decision forecast that this acquisition might protition, or gains in efficiency, that outweigh possible duce a major change in the price structure of the adverse effects, such as undue concentration of re- brokerage industry by causing full-line brokers to sources, decreased or unfair competition, conflicts of "unbundle" their services. However, the evidence interests, or unsound banking practices." The Board in the record is not substantial either in support of or finds that consummation of this proposal can reason- against such a change. In any event, the acquisition ably be expected to result in public benefits outweigh- is likely to have some procompetitive effect. ing possible adverse effects. With respect to the likelihood of increased competition in the development of technology and in the Public Benefits provision of new combinations of financial services, the record indicates that Schwab has developed one Increased Competition. The record shows that the of the most sophisticated automated order execution proposed acquisition is likely to make Schwab a systems in the industry, which is important to more effective competitor in the retail brokerage Schwab's competitive efforts. Because this type of market. It is likely that the proposal will strengthen automated technology is rapidly developing and Schwab as a competitor by affording Schwab greater because it requires large financial resources to supacceptability by the public. The record indicates port such development, Schwab's access to BAC's that discount brokers in general are hampered com- funding support and technical resources can aid petitively, at least to some extent, because of a lack Schwab in continuing to offer efficient automated of public awareness and acceptance of their services systems. Development of this type of automated due, in large part, to the relatively recent emergence technology is likely to have a procompetitive effect of discount brokers and their lack of extensive office throughout the industry. networks. Schwab's affiliation with BAC, a large, internationally recognized and diversified banking Increased Convenience and Efficiencies. With reand financial services company with substantial spect to projected increases in convenience and resources, can reasonably be expected to result in efficiencies, the record shows that BAC will assist enhanced public recognition and confidence in Schwab in adding new offices, some of which may Schwab in particular, and discount brokers in general. be at locations where Bank has branches or where As a relatively new and small company, Schwab BAC's other nonbank subsidiaries have offices. needs capital in order to expand its office network Although most of Schwab's brokerage business is and facilities. It is undisputed that, because of its done by telephone or mail, there is evidence in the affiliation with BAC, Schwab expects to be able to record that some office locations are necessary to obtain funds at a lower cost and more efficiently provide effective service. Customers can make paythan at present.12 The proposal is also likely to ments and deposit securities at Schwab offices withprovide Schwab with access to BAC's managerial out the inconvenience, cost, and risk of nondelivand technological resources, which, in view of ery, by mail. 12. The SIA's claim that Schwab currently has no difficulty in raising capital is immaterial (even if true), since an improvement in the 13. BAC has an extensive network of offices in this country and in costs and methods of raising funds is likely to produce an increase in many other countries, and plans to assist Schwab in opening new Schwab's ability to compete for brokerage services. As explained offices. below, the anticipated improvement in funding would not result in any 14. The SI A claims that there already is active price competition unfair competitive advantage, because, among other things, BAC, not among retail brokerage firms. However, the fact that a market already Bank, would provide funds to Schwab. is competitive does not preclude any further increase in competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • February 1983 Moreover, the acquisition will permit Schwab and plies.17 With 51 offices in 26 states and the District of BAC to share their capital, managerial, technologi- Columbia, Schwab operates nationwide. Schwab is cal, and marketing resources. In addition, by facili- licensed to do business in all fifty states, has a tating joint purchases of securities brokerage and uniform nationwide pricing policy, and advertises other financial services, the acquisition can be ex- chiefly in nationwide financial publications. Cuspected to result in lower consumer search costs and tomers can obtain access to Schwab's service from greater efficiency in the purchase of such services. any place in the country by calling a toll-free tele- In summary, the Board finds that this acquisition phone number. Based on this and the other evidence can reasonably be expected to result in some signifi- of record, the Board finds that the relevant geocant public benefits in the form of intensified compe- graphic market for purposes of this proposal is the tition, increased efficiency, and greater consumer United States.18 convenience in the provision of retail securities The Board finds that this acquisition will not brokerage services to the public. result in any significant reduction of competition or any increase in concentration of resources to an Adverse Effects undue level in any relevant market. With respect to undue concentration of resources, BAC has sub- Having considered the facts of record and the allega- stantial assets ($112.9 billion in 1981), but Schwab is tions of all of the parties, the Board finds that the not of significant asset size ($104 million). BAC's proposal is not likely to result in any signficant adverse acquisition of Schwab (an increase of less than one effects. percent in BAC's assets) would not result in any unwarranted increase in the concentration of re- Undue Concentration of Resources or Decreased sources controlled by BAC. Competition. Assessment of the potential competi- The record indicates that Schwab's acquisition by tive impact of this proposal begins with a definition BAC would not eliminate any significant existing of the relevant product and geographic markets. The competition in the nationwide retail brokerage marrelevant product market includes all products that ket.19 Schwab's share of the retail brokerage marare reasonably interchangeable in practical function ket, expressed in terms of a percentage of total and use.15 It is not disputed that retail securities commissions in that market, is less than one perbrokerage constitutes a relevant product market. cent. Bank's brokerage activities, primarily an ac- The SIA contends that discount securities brokerage commodation for existing customers and employis a relevant product submarket.16 Based on the ees, do not represent a significant market share.20 facts of record, the Board concludes that discount BAC may be viewed as a potential entrant into the brokerage is not a sufficiently unique product to be retail securities brokerage market, a market that is considered a separate submarket. The record shows unconcentrated and characterized by low barriers to that some discount brokers offer investment advice entry and numerous potential entrants. in addition to the execution of buy and sell orders, The SIA notes that BAC anticipates an increase in while some full-line brokers offer discount broker- Bank's deposits after the acquisition as a result of age services to large, active retail customers. According to the record, discount and full-line brokers are viewed by the public as reasonable substitutes, 17. United States v. Philadelphia National Bank, 374 U.S. 321, 359 since many of Schwab's new customers are gained (1963). 18. The SIA claims that the State of California is the relevant from full-line brokers, while Schwab has lost cusgeographic market on the theory that that area represents the area of tomers to full-line brokers. competitive overlap between BAC and Schwab. This contention The relevant geographic market is comprised of ignores the fact that Schwab and BAC each compete in different product markets. For similar reasons, the SIA's contentions regarding the market area in which the seller operates and to the inclusion of nonbank financial institutions in the banking product which the purchaser can practicably turn for sup- market are immaterial, because Schwab, the firm to be acquired, does not engage in banking activities. 19. Both Bank and Schwab engage in extending margin credit for the purchasing and carrying of securities. To the extent margin lending is a separate product, the proposal would not eliminate any significant competition. Neither Bank's nor Schwab's outstanding margin loans 15. See, United States v. E. I. duPont de Nemours & Co., 351 U.S. are substantial. 377, 395 (1956). 20. There is no substantial record evidence that the Board's conclu- 16. The existence of a product submarket is determined by examin- sion concerning lack of elimination of potential competition would be ing such practical indicia as industry or public recognition as a altered even if discount brokerage were viewed as a product submarseparate economic entity, the product's peculiar characteristics and ket. The record does not indicate that such a submarket is highly uses, unique production facilities, distinct customers, distinct prices, concentrated or that the number of potential entrants is low. Indeed, sensitivity to price changes, and specialized vendors. Brown Shoe Co. recent developments suggest that many banks must now be viewed as v. United States, 370 U.S. 294, 325 (1962). likely entrants into any such discount brokerage submarket. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 111 cross-selling Bank's services to Schwab's custom- The record does not demonstrate that BAC's ers. Although significant concentration exists in costs of funds are significantly lower than those of some local California banking markets and BAC's other corporations of similar resources. For exammarket share in those markets is significant, this ple, the rates paid by BAC on its commercial paper acquisition will not directly cause any increase in during May through July 1982 were generally the Bank's deposits in any market. Such an increase, if same or higher than rates on commercial paper paid it occurs, would result from success in cross-selling by corporations of similar size and credit ratings. by BAC. In any event, the projected increase in Moreover, any cost advantage in raising funds en- Bank's deposits is of de minimis proportions.21 joyed by BAC may be due to economic factors such The SIA contends that BAC's acquisition will as BAC's size, capital, and earnings, rather than to eliminate competition in the brokerage product mar- any guarantees applying to Bank alleged by SIA.24 ket by forcing other discount brokers either to In any event, the Board finds that any advantage become affiliated with a banking organization or be Schwab might obtain as the result of its borrowing driven from the market. There is no evidentiary from BAC is not unfair competition for purposes of support for this allegation. However, even if the section 4(c)(8). The legislative history of that section SIA's hypothesis is correct, it does not necessarily indicates that the term "unfair competition" was lead to the conclusion that competition will be intended to refer to unfair or unethical business diminished as a result. Indeed, such affiliations are conduct (as defined by common law or under state likely to increase the vigor of competition. More- or federal law), not disparities or advantages based over, the SIA does not contend that the acquisition on the structure and operations of the banking will preclude any further entry into the retail broker- industry.25 While the original 1956 Bank Holding age market. Company Act severely restricted borrowing by a bank holding company (or its nonbank subsidiaries) Unfair Competitive Practices. The SIA contends from its subsidiary bank, Congress expressly dethat, as a result of the acquisition, Schwab would clined to prohibit "downstream" financing, that is, have an unfair advantage over other brokers in the borrowing by any subsidiary in the system from the rates Schwab would pay for its funding. BAC plans parent.26 Congress found that downstream financing to provide funding to Schwab by lending to Schwab is a beneficial advantage of the bank holding compathe proceeds of funds raised directly by BAC. The ny structure and permits the parent holding compa- SIA asserts that, because of explicit and implicit ny to draw on its own capital and funds to strengthguarantees given by the federal government to the en the financial condition of its subsidiaries.27 creditors of Bank (BAC's major asset), BAC is able Recognizing this advantage, Congress authorized to raise funds at lower rates than brokerage firms bank holding companies to acquire certain types of that are not affiliated with a bank.22 According to the nonbank subsidiaries, which would compete against SIA, this alleged funding advantage is unfair be- firms in the same line of commerce. cause it rests on federal guarantees unavailable to Moreover, the Board finds no basis in the SIA's brokerage firms not affiliated with banking organiza- claim that Schwab's ability to obtain low cost fundtions.23 The SIA also argues that after the acquisi- ing from BAC is economically unjustified. The Adtion Schwab could obtain funds from BAC at rates ministrative Law Judge found, and the SIA does not lower than it currently pays and that this reduction contest, that the rate of interest BAC charges its in funding costs is not economically justified. The subsidiaries on loans to such subsidiaries reasonably Board finds no significant adverse effects are likely approximates BAC's own cost of funds. Moreover, to result from the proposed method of funding Schwab. 24. BAC states that funds for Schwab would be provided by the parent holding company, not by Bank. Thus, any cost advantage Bank 21. It is not likely that BAC would gain significant competitive might enjoy because its deposit liabilities are federally insured is advantage from the projected growth in Bank's deposits since other immaterial. In any event, it should be emphasized that the extent to large California banks, (Security Pacific National Bank and Crocker which funds from Bank may be transferred to Schwab is strictly National Bank), have recently entered the retail brokerage field, and limited by section 23A of the Federal Reserve Act. (12 U.S.C. § 371c). other banking organizations are also likely to enter. 25. H.R. Rep. No. 1747, 91st Cong., 2d Sess. 18-19 (1970). The 22. Creditors of a bank holding company are not protected by legislative history identified such practices as intimidation of customfederal deposit insurance. The SIA contends, however, that the ers and commercial espionage. Id. government would come to the aid of any large bank in difficulty to 26. 70 Stat. 133, 137. These limitations were repealed in 1966 on the maintain the stability of the financial system and that such assistance grounds they were unnecessary in light of the similar, more flexible would benefit the parent holding company. restrictions in section 23A of the Federal Reserve Act. 80 Stat. 236, 23. Brokerage firms benefit from a federal guarantor, the Securities 240; S. Rep. No. 1179, 89th Cong., 2d Sess. 10-11 (1966). Investor Protection Corporation. 27. S. Rep. No. 1095, 84th Cong., 1st Sess. 15 (1955). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 Federal Reserve Bulletin • February 1983 the fact that the rates at which Schwab would be ipal securities enjoy more favorable tax treatment able to obtain funding might be lower than the rates than nonbank dealers, the arrangement between at which other brokers pay does not per se demon- Schwab and Bank would permit Bank to exploit this strate that the rates BAC charges Schwab are unfair allegedly "unfair" competitive advantage.31 Howor unjustified, since other economic factors not ever, the Board finds that any such competitive applicable to Schwab or BAC (for example, lower advantage results from the application of the federal capital or earnings or lack of complete credit infor- tax laws, which affect all participants in the municimation) might justify higher rates paid by other pal securities markets, and does not represent the brokers.28 type of adverse effect about which the act was The SIA also asserts that BAC intends to cross- concerned. sell banking services to Schwab customers, and thus The Board further finds that the risk of voluntary has an incentive to subsidize Schwab's brokerage tying of bank credit to use of Schwab's brokerage business. Cross-subsidization is an unfair competi- services is not substantial, given existing legal, tive practice that occurs when the profits of one regulatory and internal BAC safeguards, and the company are used to enable an affiliated company to record facts.32 Voluntary tying results when a cusoffer its services at prices below its costs.29 Cross- tomer believes that he or she stands a better chance subsidization is successful, and therefore a likely of obtaining a scarce product by purchasing another practice, only where a company offering below-cost product or service from the same seller. Where both pricing has sufficient market dominance to be able to products are in ample supply, voluntary tie-ins are eliminate competitors by sustained below-cost pric- not likely. These implicitly coerced joint sales are ing and thereafter to raise prices to recover the different from voluntary joint sales which, as the losses incurred through offering services below cost. Administrative Law Judge found, can result in bene- It is clear from the record that Schwab does not fits to the customer by reducing search costs for the have such a dominant position in the retail broker- consumer and increasing efficiencies inherent in age market and that the industry has very low joint production and sale. barriers to entry. There is no evidence that BAC As the Board has previously found, the likelihood plans to offer brokerage services through Schwab at of voluntary tying depends on market structure and below Schwab's costs. The evidence shows that on the offering of a product that is relatively BAC expects Schwab to provide a positive return on scarce.33 The possibility of such tying is significantly equity.30 The record evidence showing that BAC reduced in competitive markets where there is a intends to cross-sell banking services to Schwab large number of alternatives sources of the product brokerage customers does not in itself demonstrate involved (for example, credit). The Board finds that that BAC will cause Schwab to offer services at there are many alternative sources of credit (both below cost. bank and nonbank) available to the customers Bank serves as a dealer in municipal securities. (mostly individuals) that are likely to use a discount After the announcement of this proposal, BAC and broker like Schwab. Schwab entered into an arrangement under which The SIA claims that because BAC intends to Schwab provides its customers with information on promote Schwab's services and because Bank's municipal securities Bank holds in its inventory. pricing of loans or other services, as a matter of The SIA contends that, since bank dealers in munic- policy, takes account of a customer's relationship with a nonbank subsidiary in the BAC system, there is the likelihood of implicitly coerced joint sales. The record shows that employees of Bank are 28. The Board does not accept the SIA's contention that BAC will lend funds to Schwab without regard to the risk involved. The record expressly advised not to create even the impression indicates that BAC does account for risk in determining the amount of funds to advance to a nonbank subsidiary and in determining whether an appropriate return will be earned on such advances. 29. See, Citicorp (Citishare), 68 FEDERAL RESERVE BULLETIN 505, 512 (1982). 31. The interest paid by nonbank dealers on funds borrowed to 30. The SIA contends that BAC will have an incentive to subsidize finance their inventory of municipal securities is not deductible for Schwab's services because SIA expects that some Schwab customers federal income tax purposes. (26 U.S.C. § 265(2)). Bank dealers are will bring business to Bank and that Bank's earnings from this exempt from this provision. increased business will be greater than the losses caused by offering 32. Explicitly coerced joint sales are expressly prohibited by secbrokerage services at below cost. This contention, in the Board's tion 106 of the Bank Holding Company Act Amendments of 1970, view, is not based on any evidence in the record. The Board also notes 12 U.S.C. §§ 1972-78, and are not an issue in this application. that competition by financial institutions for deposits is strong, making 33. See, Citicorp (Person-to-Person Financial Center), 67 FEDERit unlikely that Bank would be able to attain profit levels on deposits AL RESERVE BULLETIN 443, 446 (1981). There is no evidence that by customers of Schwab that would justify cross-subsidization. More- brokerage services are such a scarce service that brokerage customers over, in this connection, the Board notes that federal limitations on of Schwab will feel implicitly coerced into seeking deposit or credit interest rates payable on deposits are being rapidly eliminated, services of Bank in order to continue to obtain brokerage services resulting in increases in the cost of deposits. from Schwab. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 113 that a customer might enhance the likelihood of enterprise and the financial risks at BAC as a result obtaining a desired service by purchasing other of this proposal do not appear to be any greater than products or services from Bank or its affiliates. the risks involved in other permissible nonbank Moreover, the record shows that customers of Bank activities. The Board finds that it is unlikely that that would be likely to use a discount broker are also significant financial risks to BAC or Bank would likely to be (as are Schwab's current customers) result from the proposal. relatively knowledgeable about financial matters. The Board finds no basis for the SIA's contention Such customers are less likely to be implicitly that, because BAC intends to advertise its affiliation coerced into using brokerage services that are not with Schwab, the proposed acquisition would result independently desired. The Board does not believe in public confusion. There is no evidence that BAC the evidence suggests the likelihood of significant would misrepresent the nature of Schwab's affilicoerced joint sales. ation with BAC or Bank, and BAC should assure that fully adequate disclosure of the status of Schwab Other Adverse Effects. The Board finds no persua- obligations is made available to all customers. sive evidence that BAC's acquisition of Schwab The SI A further contends, without any evidentiawould result in significant conflicts of interest. The ry record for its claim, that Schwab solicits custompossibility that Bank might make unsound loans to ers to place funds in Schwab's cash management Schwab customers to maximize Schwab's profits is account solely to earn interest and not for purchasnot substantial and is neither based on evidence nor ing securities, that such funds might not be protectreasonable. Moreover, it would not be rational for ed by Securities Investor Protection Corporation Bank to place its own funds at risk in an unsound insurance (a protection that Schwab advertises), and loan merely to increase brokerage commissions that such an account constitutes the unlawful taking earned by Schwab. The Board finds no realistic of deposits. The Board finds no basis for this basis for the SIA's contention that Schwab might allegation on the facts of this case. Guidelines issued "dump" worthless municipal securities on its cus- by the Securities and Exchange Commission restrict tomers as a result of its arrangement with Bank's registered brokers, such as Schwab, from soliciting municipal securities dealer operations. Under this funds solely to earn interest.35 The rules of the New arrangement Schwab identifies for its customers York Stock Exchange prohibit a member (such as municipal securities held in Bank's inventory and Schwab) from paying interest on any free credit does not give investment advice concerning the balance created for the purpose of receiving interpurchase or sale of the securities. There does not est.36 There is no evidence that Schwab will not appear to be any substantive basis for any conflicts comply with these limitations or that Schwab's of interest arising from this procedure. Nor is there advertising of SIPC insurance will be materially any credible evidence that Bank would breach its misleading. fiduciary duty by placing orders with Schwab for the In the exercise of its responsibility under the act, purchase or sale of securities by Bank's trust depart- the Board has carefully considered whether BAC's ment or customers where Schwab would not effect financial and managerial resources are adequate to the best execution of the order.34 There is no record effect the proposed acquisition. In its evaluation of evidence suggesting that Bank would use Schwab's BAC's financial resources, the Board has reviewed services in situations that would result in a breach of all the relevant data concerning BAC's financial fiduciary duty. condition. Based upon this review, the Board con- The earnings of discount brokers are heavily cludes that the proposed acquisition would not dependent on the volume of trading in securities and represent a significant additional burden on BAC's have fluctuated to a significant degree. However, financial resources. The Board notes the improvethe SIA's claim that Schwab is a high risk enterprise ment in BAC's capital over the past year and and that BAC might be compelled to make unsound expects that BAC will continue its efforts to improve loans to shore up Schwab is not supported by the its capital position. On balance, the Board conrecord. Despite fluctuations in earnings, discount cludes that BAC has both financial and managerial brokers in general, and Schwab in particular, have resources that are consistent with approval. been profitable. Schwab's income has grown signifi- In sum, the Board finds that this acquisition may cantly in recent years. Schwab is not a speculative reasonably be expected to result in public benefits that outweigh possible adverse effects. Accordingly, 34. Bank's trust department is subject to a judicially enforceable duty to obtain best execution of orders under applicable statutes (15 U.S.C. § 78bb(e)(2» and related regulations of its federal supervi- 35. 3 Fed. Sec. L. Rep. (CCH) 125,134B. sor. (12 C.F.R. § 9.5), 47 Federal Register 27831 (1982). 36. Id. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • February 1983 since this acquisition satisfies both the "closely ed order of, and as agent for, a particular customer related" and the net public benefits tests of section does not constitute the "public sale" of securities 4(c)(8), the Board finds no basis for the SIA's for purposes of section 20. It is significant that, in contention that BAC must be required to enter the describing proscribed activities of bank affiliates, retail securities brokerage industry de novo.37 section 20 does not mention "brokerage" activities, the generic term commonly associated with the Glass-Steagall Act. The SIA and various other business of buying and selling securities as agent for commenters contend that the acquisition of a securi- a customer.41 In addition, in executing a customer's ties brokerage firm by a bank holding company is order to buy or sell securities, a broker does not prohibited by provisions of the Glass-Steagall Act, make a public offer or hold itself out to the public as the popular term for provisions of the Banking Act a seller or buyer for its own account but only acts as of 1933, that insulate commercial banking from agent to assist the seller or buyer.42 Furthermore, certain aspects of the securities business. Section 20 the terms "issue," "flotation," "underwriting," of the Glass-Steagall Act (12 U.S.C. § 377) prohibits and "distribution" (used in section 20 in conjuncthe affiliation of any bank that is a member of the tion with "public sale") generally refer to the pro- Federal Reserve System with any corporation or cess by which new issues or large blocks of securisimilar organization that is "engaged principally in ties are distributed to the public, not to brokerage the issue, flotation, underwriting, public sale, or functions, which are primarily concerned with the distribution" of securities.38 For the reasons stated transfer of securities at the request of a particular and upon the findings made in this Order, the Board customer.43 The term "public sale" used in associaconcludes that Schwab is not engaged principally in tion with this series of terms should be given a any of the activities prohibited to member bank meaning similar to those terms since, under the rules affiliates by the Glass-Steagall Act and accordingly of statutory construction, words grouped in a list concludes that this acquisition is consistent with the should be given a related meaning.44 letter and spirit of that act. The view that "public sale" was not intended to As a result of the consummation of this proposal, apply to purchasing or selling securities as agent for Bank, a member bank, would become affiliated with a customer is further supported by the fact that the Schwab for purposes of section 20.39 The SIA Board has consistently interpreted section 32 of the alleges that Schwab is engaged principally in the Glass-Steagall Act (12 U.S.C. § 78) as not applying "public sale" of securities within the proscription of to any brokerage activities. Section 32 prohibits section 20 by virtue of its retail brokerage activi- managerial interlocks between a member bank and a ties.40 The Board finds, however, that the business firm primarily engaged in the same securities activiof purchasing or selling securities upon the unsolicit- ties described in section 20. Beginning in 1936, the Board's Regulation R, which implements the provisions of section 32, has consistently provided that "[a] broker who is engaged solely in executing orders for the purchase and sale of securities on behalf of others in the open market is not engaged in 37. The decisions cited by the SIA where the Board has denied the the business referred to in section 32."45 Since acquisition of a going concern by a bank holding company with the section 20 and section 32 are part of the same statute resources for de novo entry are inapposite. In those cases, the Board and were enacted for the same purpose, the meaning expressly found that acquisition of the going concern would eliminate substantial potential competition. BTNB Corp., 58 FEDERAL RESERVE BULLETIN 70, 71, (1972); Marine Bancorporation, 58 FEDERAL RE- SERVE BULLETIN 504, 505 (1972); Crocker National Corp., 58 FEDER- AL RESERVE BULLETIN 419, 420 (1972). Section 4(c)(8) does not require de novo entry by a bank holding company if, as here, the company's acquisition of a going concern will not substantially lessen competition and is likely to produce benefits that outweigh possible adverse effects. 41. 2 L. Loss, Securities Regulation 1215 (2d ed. 1961). A securities 38. Section 16 of the Glass-Steagall Act, (12 U.S.C. § 24 Seventh), dealer sells securities it has purchased for its own account elsewhere provides that a national bank's dealing in securities and stock is or purchases securities for its own account with a view toward selling limited to "purchasing and selling such securities and stock without them elsewhere. Id. A dealer ordinarily maintains an inventory of recourse, solely upon the order, and for the account of, customers" particular issues of securities and holds itself out to the public as being and not for the bank's own account, and that a national bank "shall willing to purchase or sell such securities for its own account. A dealer not underwrite any issue of securities or stock". Section 21, (12 is thus unlike a broker, which acts for the account of a customer. U.S.C. § 378), prohibits any organization that receives deposits to 42. Cf. Securities and Exchange Commission, Final Report on engage at the same time "in the business of issuing, underwriting, Bank Securities Activities 121-22, 167 (1977). selling, or distributing" securities. 43. 1 L. Loss, supra at 159-72. 39. (12 U.S.C. § 221a(b)(2)). 44. See, Third National Bank in Nashville v. Impac, Ltd., 432 U.S. 40. It is undisputed that Schwab's brokerage activities do not 312, 322 (1977). constitute the "issue, flotation, underwriting ... or distribution" of 45. 22 FEDERAL RESERVE BULLETIN 51 (1936), codified at securities. (12 CFR § 218.1 n.l). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 115 of "public sale" as used in section 20 should be Steagall Act.49-50 In any event, independent of the interpreted consistently with the same term in sec- validity of the Comptroller's constructions of section 32.46 tion 16, the Board finds that Schwab's brokerage The SIA and other commenters contend that functions do not constitute the "public sale" of Schwab's retail brokerage activities are prohibited securities (or any other proscribed activity) within to banks under section 16 of the Glass-Steagall Act the meaning of section 20 of the Glass-Steagall Act, and thus should not be permitted to affiliates of the applicable statutory provision.51 banks. However, as the Supreme Court has made This conclusion is consistent with the purposes of clear, section 20 determines the permissible securi- the Glass-Steagall Act. During congressional conties activities of an affiliate of a bank and the fact sideration of the Glass-Steagall legislation, the that a bank might be precluded from engaging in a scope of permissible bank brokerage activity was particular securities activity does not necessarily not discussed in detail.52 However, because the mean that a bank holding company is precluded types of bank securities activities considered harmfrom performing such services.47 Moreover, section ful and contrary to public policy were exhaustively 16 authorizes national banks to engage in retail catalogued in the legislative history and brokerage brokerage, that is, to engage in "purchasing and activities received no serious attention, it is unlikely selling . . . securities and stock without recourse, that Congress viewed such activities as the target of solely upon the order, and for the account of, the act's prohibitions.53 Indeed, the particular types customers." (12 U.S.C. § 24 Seventh). of securities activities engaged in by Schwab are The SIA concedes that section 16 expressly au- fully consistent with the objectives of the Glassthorizes some securities brokerage activities for banks, but contends, based on early interpretations of section 16 by the Comptroller of the Currency, 49. Comptroller of the Currency, Decision on the Application by that national banks are limited to executing orders Security Pacific National Bank to Establish an Operating Subsidiary without profit and only as an accommodation to To Be Known as Security Pacific Discount Brokerage Services, Inc. existing customers, and that Schwab's services, not (August 26, 1982). The SIA is seeking judicial review of this decision. Among other things, the SIA has alleged that the establishment by a tied to the customers of any bank, clearly exceed national bank of brokerage offices at locations where the bank is not these limitations.48 However, beginning in 1957, the permitted to branch violates the National Bank Act. The Board finds that there would be no violation of the federal branching laws in this Comptroller has gradually departed from these early application under the Bank Holding Company Act, because Schwab is interpretations on the grounds that they are not a separate corporation, has its own capital and officers and directors, supported by the express language of the statute, and would not be operated in a unitary fashion with Bank, but as a nonbank subsidiary of a bank holding company. See Grandview Bank reflected an overcautious approach to bank regula- & Trust Co. v. Board of Governors, 550 F.2d 415 (8th Cir.), cert, tion in the aftermath of the Great Depression, and denied, 434 U.S. 821 (1977). are erroneous. Indeed, the Comptroller has recently 50. The SIA argues that Schwab's activities do not meet the "without recourse" requirements of section 16, because in many authorized a national bank to establish a subsidiary cases Schwab executes transactions directly without the assistance of to engage in discount brokerage services substan- an intervening broker against whom Schwab's customers might othertially the same as those provided by Schwab and has wise have recourse for any alleged fraud or negligence. However, in the Board's view, the ordinary commercial meaning of "without advised the Board, in comments on BAC's proposrecourse" indicates that section 16 prohibits a bank from assuming the al, that a national bank's purchase and sale of liability of endorser or maker with respect to the securities brought or securities as agent is permissible under the Glass- sold as agent of the customer. See G. Munn & F. Garcia, Encyclopedia of Banking & Finance 943 (7th ed. 1973; U.C.C. § 3-414(1)). There is no evidence that Schwab would assume any such liability. 51. The SIA further asserts that "public sale" in section 20 must be interpreted similarly to the terms "purchasing and selling" as used in sections 16 and 21, which, the SIA contends, clearly include brokerage functions. However, section 16 expressly permits purchasing and selling securities for the account of customers. 46. The Board's view that brokerage activities do not constitute the 52. The relevant legislative history merely states that national public sale of securities was implicitly upheld by the Supreme Court in banks would be permitted to buy and sell securities for their custom- Board of Governors v. Agnew, 329 U.S. 441 (1947). In Agnew, the ers to the same extent as heretofore. S. Rep. No. 77, 73d Cong., 1st Court affirmed a Board order finding that a particular securities firm Sess. 16 (1933). with significant income from both underwriting activities and broker- 53. The SIA's reliance on various statements by a draftsman of the age activities was "primarily" engaged in underwriting securities and Securities Exchange Act of 1934 is without merit. These statements thus covered by section 32. 329 U.S. at 445-46. The Supreme Court were made after enactment of the Glass-Steagall legislation, are not affirmed the Board's finding that the firm was primarily engaged in the views of a member of the legislature, and do not purport to deal underwriting even though the amount of underwriting done by the firm with the outer limits of permissible bank brokerage activities. In did not exceed 50 percent of its business. Id. at 447-49. The Court left addition, the Comptroller of the Currency's explanation of the 1935 undisturbed the Board's implicit finding that the brokerage business amendment to section 16 (which merely clarified that the scope of was not part of the business described in section 32. permissible brokerage included execution of orders for stock as well 47. Board of Governors v. Investment Company Institute, 450 U.S. as for debt securities) appears merely to be a statement of the 46, 63-64 (1981). Comptroller's now-rejected administrative interpretation of the 1933 48. See, 20 FEDERAL RESERVE BULLETIN 609 (1934). legislation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • February 1983 Steagall Act. As has been widely recognized, the issue is more appropriately resolved in that context. Glass-Steagall legislation was intended to eliminate Even if it is assumed that Schwab's sweep arrangethe risk of loss or insolvency that may result when a ment constitutes underwriting of the money fund's bank purchases securities for resale to the public, securities, the record clearly shows that Schwab is makes unsound loans to bolster its marketing of not principally engaged hrthat activity. Thus, no particular securities, or loses public confidence violation of section 20 would arise as the result of when it becomes apparent that the bank has a the present application. "salesman's stake" in the success of a particular investment opportunity.54 Further, as noted above, Proposed Restrictions on Schwab's Activities the Board believes that Schwab's activities pose no greater risk of failure than other nonbanking activi- The SIA asserts that, if the Board determines to ties permitted by the Board to bank holding compa- approve the proposal, various restrictions should be nies. The Board finds that these types of hazards are imposed to address the alleged adverse effects of the not present in connection with Schwab's activities, acquisition by limiting Schwab's activities solely to since, except on very infrequent occasions, Schwab securities brokerage, by restricting the method by does not purchase or sell securities as a principal, which Schwab obtains funds, establishes offices, adthat is, with its own assets.55 Nor does Schwab have vertises its affiliation with BAC, and by prohibiting any interest in the success or failure of any particu- Bank from using Schwab to execute transactions for lar issue of securities, since its operations are limit- Bank's fiduciary accounts or to sell municipal securied to providing a service enabling investors to ties. For the reasons explained above, the Board purchase or sell expeditiously securities selected by concludes that significant adverse effects are not likely the customer. Although, as the SIA points out, to result from the proposal and, accordingly, the unsuccessful operations by an affiliate may well Board finds that the imposition of the restrictions damage the reputation of a bank or bank holding advanced by the SIA is not warranted. Because BAC's company, the Board finds that the likelihood of plans to finance and promote Schwab and to place harm to the reputation of BAC or Bank as a result of Schwab offices at some BAC locations are not likely to this proposal is minimal, because Schwab does not produce any unfair competitive advantage, public conactively promote any particular securities and does fusion, or other adverse effects, the Board finds no not offer investment advice. basis to restrict such activities. Also, Bank's use of Schwab to buy or sell securities as agent for the Schwab also offers to its customers a "sweep" Bank's trust department or to transmit information on arrangement, under which idle customer balances Bank's municipal securities inventory should not be awaiting investment and exceeding a predetermined prohibited, since these operations present the prospect amount are routinely and automatically used to of no serious adverse effects.56 purchase shares of an unaffiliated money market mutual fund. The Board has pending before it a In approving BAC's application to acquire Schwab, separate petition submitted by the SIA alleging that the Board grants approval under the act only for those such "sweep" arrangements by banks constitute the activities considered by the Board.57Thus, any change impermissible underwriting of the securities of the or expansion in the activities described in this Order money market mutual fund and believes that this would require the approval of the Board. Consistency with Objectives of the Bank Holding 54. Board of Governors v. Investment Company Institute, supra, Company Act 450 U.S. at 61-62; Investment Company Institute v. Camp, 401 U.S. 617, 629-34,635-38 (1971). The SIA's reliance on the Supreme Court's passing remark in the second ICI decision that the act was intended to The Board has reviewed this application from the divorce banks from underwriters and brokerage houses, 450 U.S. at viewpoint of its basic consistency with the objectives 63, is misplaced. Brokerage activities were clearly not at issue in that case. Also, most brokerage firms also engage in dealing in securities, of the Bank Holding Company Act. This act was an activity that is generally impermissible under the act. See 2 L. designed to eliminate the potential for conflicts of Loss, supra at 1215. interests and concentration of resources that are inher- 55. Schwab acts as a principal if it mistakenly purchases securities not authorized by the customer. Such "inadvertent principal" transactions are less than one percent of Schwab's business and clearly not a principal activity. In addition, in infrequent cases, Schwab may 56. Indeed, a complete prohibition against Bank's use of Schwab's purchase municipal securities in a new issue as riskless principal— brokerage service could conceivably cause a breach of fiduciary duty with its own assets but only after a firm customer order for such in a particular case where Schwab in fact can provide the best securities has been received. These riskless principal transactions execution of the order. Moreover, there is no indication that Schwab (also not a principal activity of Schwab) appear to be consistent with will not comply with the limitations that the SEC and other authorities permissible brokerage activities, and, in any event, section 16 ex- have prescribed on the receipt by brokers of funds solely to earn pressly authorizes banks to act as principal with respect to certain interest. A similar Board-imposed limitation is unnecessary. types of municipal securities. 57. (12 CFR § 225.4(c)(2)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 117 ent in the commingling of banking and commerce to activities to additional offices may be processed in the help maintain banks as impartial providers of credit, to same manner as other de novo applications under the avoid the anticompetitive effects that would inevitably provisions of section 225.4(b)(1) of Regulation Y arise from close links between the control and use of (12 CFR § 225.4(b)(1)). Authority is hereby delegated credit, and to protect the banking system and ultimate- to the Federal Reserve Bank of San Francisco to take ly the economy as a whole from the instability that action on such notices properly filed as prescribed in could result from bank participation in commerce. The that section. Board believes that these fundamental considerations The proposed activities shall not commence later retain their essential validity and should continue to than three months after the effective date of this guide the evolution of banking services in the changing Order, unless such period is extended for good cause economic and competitive environment that we have by the Board or by the Federal Reserve Bank of San today. Francisco. The Board finds that there is no inconsistency By order of the Board of Governors, effective between the basic policies of the act and the conduct January 7, 1983. of the nonbanking activity that is the subject of this application. As described in detail in this Order, the Voting for this action: Chairman Volcker and Governors Board has found that a securities brokerage service Martin, Wallich, Partee, Rice, and Gramley. Absent and not voting: Governor Teeters. that is essentially confined to the purchase and sale of securities for the account of third parties, and without the provision of investment advice to the purchaser or (Signed) JAMES MCAFEE, [SEAL] Associate Secretary of the Board. seller, does not raise the potential for conflicts of interest or concentration of resources that were the object of the prohibitions that were instituted to assure the separation of banking from commerce. Expansion Orders Under Section 3 and 4 of Bank Holding of banking into securities activities must proceed Company Act carefully, but the proposed activity raises none of the concern that engenders the need for restrictions on Heber Springs Bancshares, Inc., banking or bank holding company activities. Heber Springs, Arkansas Conclusion Order Approving Formation of a Bank Holding Company and Application to Engage de novo in Based upon the foregoing and other considerations Mortgage Placement and Real Estate Appraisal reflected in the record, the Board has determined that Activities the public benefits associated with consummation of this proposal can reasonably be expected to outweigh Heber Springs Bancshares, Inc., Heber Springs, Arpossible adverse effects, and that the balance of the kansas, has applied for the Board's approval under public interest factors, which the Board is required to section 3(a)(1) of the Bank Holding Company Act consider under section 4(c)(8) of the act, is favorable. (12 U.S.C. § 1842(a)(1)) to form a bank holding compa- Accordingly, the application is hereby approved. ny by acquiring at least 86.9 percent of the voting This determination is subject to the conditions set shares of Heber Springs State Bank, Heber Springs, forth in section 255.4(c) of Regulation Y and the Arkansas ("Bank"). Board's authority to require such modification or Applicant has also applied under section 4(c)(8) of termination of the activities of a holding company or the act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) any of its subsidiaries as the Board finds necessary to of the Board's Regulation Y (12 CFR § 225.4(b)(2)) to assure compliance with the provisions and purposes of engage de novo in the placement of commercial mortthe act and the Board's regulations and orders issued gage loans with third party lenders and in the perforthereunder, or to prevent evasion thereof. mance of real estate appraisals. These activities would Because of the extensive consideration accorded to be conducted from the main office of Applicant and Schwab's securities brokerage, margin lending, and Bank in Heber Springs, Arkansas, and the geographic incidental activities in the context of this application, area to be served is the state of Arkansas. The and having determined that the public interest consid- arranging of mortgage financing and the performance erations of section 4(c)(8) favor approval of BAC's of real estate appraisals are activities that have been proposal, the Board has determined that further appli- determined by the Board to be closely related to cations by BAC to extend Schwab's retail discount banking and permissible for bank holding companies. securities brokerage, margin lending, and incidental (12 CFR § 225.4(a)(1) and (a)(14)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • February 1983 Notice of the applications, affording opportunity for the public interest factors it must consider under interested persons to submit comments and views, has section 4(c)(8) of the act favors approval of the applibeen given in accordance with sections 3 and 4 of the cation. act. 47 Federal Register 51618 (1982). The time for Based on the foregoing and other considerations filing comments and views has expired, and the Board reflected in the record, the Board has determined that has considered the applications and all comments the applications under sections 3(a)(1) and 4(c)(8) of received in light of the factors set forth in section 3(c) the act should be and hereby are approved. The (12 U.S.C. § 1842(c)) and section 4(c)(8) (12 U.S.C. acquisition of Bank shall not be made before the § 1843(c)(8)) of the act. thirtieth calendar day following the effective date of Applicant, a nonoperating Arkansas corporation, this Order. The commencement of the proposed nonwas organized for the purpose of becoming a bank banking activities and the acquisition of Bank shall not holding company by acquiring Bank, which holds be made later than three months after the effective deposits of $22.7 million.1 Upon acquisition of Bank, date of this Order, unless such period is extended for Applicant would control the 142nd largest bank in good cause by the Board or by the Federal Reserve Arkansas and would hold approximately .2 percent of Bank of St. Louis acting pursuant to delegated authorthe total deposits in commercial banks in the state.2 ity. Applicant's performance of commercial mortgage Bank is the second largest of three banking organi- placement and real estate appraisal activities are subzations in the Cleburne County banking market and ject to the considerations set forth in section 225.4(c) holds approximately 26.6 percent of total deposits in of Regulation Y, and to the Board's authority to commercial banks in the market.3 Based on the facts require such modification or termination of the activiof record, it appears that consummation of the propos- ties of a bank holding company or any of its subsidiaral would not result in any adverse effects upon compe- ies as the Board finds necessary to assure compliance tition or increase the concentration of banking re- with the provisions and purposes of the act and the sources in any relevant area. Accordingly, the Board Board's regulations and orders issued thereunder, or concludes that competitive considerations are consis- to prevent evasion thereof. tent with approval of the application. By order of the Board of Governors, effective The financial and managerial resources of Applicant January 24, 1983. and Bank are considered generally satisfactory and their future prospects appear favorable. Accordingly, Voting for this action: Governors Wallich, Partee, Teeters, considerations relating to banking factors are consis- Rice, and Gramley. Absent and not voting: Chairman Volcker and Vice Chairman Martin. tent with approval. Moreover, considerations relating to the convenience and needs of the community to be (Signed) JAMES MCAFEE, served are consistent with approval. [SEAL] Associate Secretary of the Board. There is no evidence in the record to indicate that Applicant's performance of commercial mortgage financing and real estate appraisal activities would result in undue concentration of resources, decreased Southeast Banking Corporation, or unfair competition, conflicts of interest, unsound Miami, Florida banking practices or other adverse effects on the public interest. In fact, the Board views such de novo Order Approving Acquisition of Voting Shares of entry as procompetitive and a positive public benefit Banks and Mortgage Servicing Portfolio since such entry provides an additional source of competition in the market.4 In addition, approval of Southeast Banking Corporation, Miami, Florida, a the proposal would provide residents of Applicant's bank holding company within the meaning of the Bank service area with a new and convenient source of Holding Company Act, has applied for approval under mortgage placement and real estate appraisal services. section 3(a)(3) of the act (12 U.S.C. § 1842(a)(3)) to Accordingly, the Board concludes that the balance of acquire from Florida National Banks of Florida, Inc., Boca Raton, Florida ("Florida National") 80 percent or more of the voting shares of the following banks: Florida National Bank of Lee County, Cape Coral; Florida National Bank of the Florida Keys, Key West; 1. Deposit and market share data are as of March 31, 1982. Florida National Bank of Bartow, Bartow; Florida 2. State rank data are as of June 30, 1982. 3. The relevant banking market is approximated by Cleburne National Bank at Chipley, Chipley; Florida National County, Arkansas. Bank of Madison County, Madison; Florida National 4. Virginia National Bancshares Inc., 66 FEDERAL RESERVE BUL- LETIN 668, 671 (1980). Bank of Belle Glade, Belle Glade; and Florida Nation- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 119 al Bank at Perry, Perry; all in Florida.1 Through the state.5 Florida National is the fourth largest commeracquisition of Florida National Bank of Belle Glade, cial banking organization in Florida and controls 25 Applicant will acquire nine branch offices of First subsidiary banks with aggregate deposits of $2.0 bil- Marine Bank, Inc. that Florida National acquired from lion. The seven banks of Florida National that Appli- Barnett Banks of Florida, Inc.2 cant proposes to acquire, including the nine branches Applicant also has applied under section 4(c)(8) of to be acquired by the Florida National Bank at Belle the act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) Glade, hold total deposits of $364 million. Upon conof the Board's Regulation Y (12 CFR § 225.4(b)(2)) to summation of the acquisition, Applicant would control acquire mortgage servicingrights from Florida Nation- 11.5 percent of the total deposits in commercial banks al's mortgage banking subsidiary, Charter Mortgage in the state. Company. This activity would be conducted by Appli- Consummation of the proposal would eliminate cant's existing subsidiary, Southeast Mortgage Com- some existing competition between Applicant and pany, Miami, Florida. The servicing of mortgage loans Florida National in two of the nine relevant geographic is an activity that has been determined by the Board to markets in which the banks and branch offices to be be closely related to banking and permissible for bank acquired by Applicant compete. In the Eastern Palm holding companies. (12 CFR § 225.4(a)(3)). Beach banking market,6 Applicant is the eighth largest As part of the proposed acquisition, Applicant has banking organization controlling approximately 5 perapplied to acquire approximately 21 percent of the cent of the total deposits in commercial banks in the outstanding voting stock of Florida National pursuant market. The nine branches to be acquired by the to a stock option agreement between Applicant and Florida National Bank of Belle Glade control approxi- C. A. Cavendes, Sociedad Financiera, Caracas, Vene- mately 5.2 percent of the total deposits in commercial zuela ("Cavendes"). Following exercise of Appli- banks in the Eastern Palm Beach market and together cant's option with Cavendes, all of the shares of represent the seventh largest banking organization in Florida National held by Applicant, with the exception the market. Upon consummation of the proposal, of 230,000 shares,3 will be immediately transferred to Applicant would become the fourth largest banking Florida National in exchange for the assets that are the organization in the market and control 10.2 percent of subject of this application. the total deposits in commercial banks in the market. Notice of the applications, affording opportunity for The Board does not consider the competitive effects of interested persons to submit comments and views, has the proposal in this market to be significant in view of been given in accordance with sections 3 and 4 of the the relatively unconcentrated nature of the market and act.4 (47 Federal Register 20,023 (1982)). The time for the large number of banking organizations already filing comments and views has expired, and the Board represented in the market. has considered the applications and all comments In the Ft. Myers banking market,7 Applicant is the received in light of the factors set forth in section 3(c) smallest of 13 banking organizations controlling 0.6 (12 U.S.C. § 1842(c)) and section 4(c)(8) (12 U.S.C. percent of the total deposits in commercial banks in § 1843 (c)(8)) of the act. the market. Florida National is the seventh largest Applicant is the largest commercial banking organi- banking organization in the market controlling 3.6 zation in Florida and controls one subsidiary bank percent of the total deposits in commercial banks in with total deposits of $4.7 billion, representing 10.6 the market. Upon consummation of the proposal, percent of total deposits in commercial banks in that Applicant would rank as the seventh largest banking organization and control 4.2 percent of market deposits. In view of the relatively small market shares of the banks involved and the large number of commercial 1. Applicant originally submitted a proposal in February of 1982 to banking organizations represented in the market, the acquire the entire Florida National organization. Following Florida Board does not consider the competitive effects of the National's protest and resulting litigation, Applicant and Florida National entered into an agreement for the acquisition of certain proposal in the Ft. Myers market to be significant. assets of Florida National as reflected in this application. The Board has considered the effects of the proposal 2. These nine branch offices are currently held by Florida National on probable future competition in the relevant geo- Bank of Palm Beach County and will be acquired by the Florida National Bank of Belle Glade prior to consummation of this proposal. graphic markets and has also examined the proposal in 3. Applicant will retain these shares, representing less than 5 percent of the outstanding voting shares of Florida National. 4. No new Federal Register Notice of the proposal has been published. The proposal does not represent an expansion of the 5. Banking data are as of March 31, 1982. original proposal for which adequate notice and opportunity for 6. The Eastern Palm Beach County market is approximated by comment was provided, and therefore no further notice is required. Palm Beach County, excluding the area surrounding the cities of Belle The appropriate regulatory agencies were notified of the amended Glade and Pahokee, Florida. proposal and all statutory and regulatory notice requirements have 7. The Ft. Myers banking market is approximated by Lee County, been satisfied. Florida. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • February 1983 light of its proposed guidelines for assessing the com- verse effects on the public interest. Accordingly, the petitive effects of market extension mergers and acqui- Board concludes that the balance of public interest sitions.8 In evaluating the effects of a proposed merger factors it must consider under section 4(c)(8) of the act or acquisition upon probable future competition, the is consistent with approval of the application. Board considers market concentration, the number of Based on the foregoing and other considerations probable future entrants into the market, the attrac- reflected in the record, the Board has determined that tiveness of the market for de novo and/or foothold the applications under sections 3(a)(3) and 4(c)(8) of entry, and the size and market position of the firm to the act should be and are hereby approved. The be acquired. The Board has also considered the likeli- Board's approval is conditioned upon Applicant's hood that the institutions would enter the market de transfer to Florida National of all but 230,000 of novo or on a foothold basis absent approval of the Applicant's shares of Florida National immediately acquisition. In six of the seven markets where proba- upon Applicant's purchase from Cavendes of shares of ble future competition is an issue, there are a signifi- Florida National.9 The acquisition of the banks to be cant number of other probable future entrants. The acquired shall not be made before the thirtieth calenone other market is relatively unconcentrated as mea- dar day following the effective date of this Order, and sured by the Board's guidelines. Accordingly, on the neither the bank acquisition nor the acquisition of the basis of the above and other facts of record, the Board servicing rights shall be made later than three months concludes that consummation of the proposal would after the effective date of this Order unless such period not have such adverse effects upon probable future is extended for good cause by the Board or the Federal competition in these markets to warrant denial of the Reserve Bank of Atlanta, under delegated authority. proposal. Acquisition of the servicing rights to the GNMA The financial and managerial resources of Applicant mortgage loan portfolio of Charter Mortgage Company and the banks and branches to be acquired are regard- under section 4(c)(8) is subject to the conditions set ed as generally satisfactory and their future prospects forth in section 225.4(c) of Regulation Y, and to the appear favorable. Applicant has stated that it would Board's authority to require such modification or expand the long-term mortgage lending and interna- termination of the activities of a holding company or tional banking services offered by the acquired banks any of its subsidiaries as the Board finds necessary to and offer their customers access to Applicant's nation- assure compliance with the provisions and purposes of wide ATM network and at-home electronic banking the act and the Board's regulations and orders issued services. Accordingly, considerations relating to bank- thereunder, or to prevent evasion thereof. ing factors and the convenience and needs of the By order of the Board of Governors, effective communities to be served are consistent with ap- January 17, 1983. proval. There is no evidence in the record to indicate that Voting for this action: Vice Chairman Martin and Gover- Applicant's acquisition of the servicing rights to the nors Partee, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Wallich. GNMA mortgage loan portfolio of Charter Mortgage Company would result in undue concentration of (Signed) JAMES MCAFEE, resources, decreased or unfair competition, conflicts [SEAL] Associate Secretary of the Board. of interest, unsound banking practices or other ad- 8. "Proposed Policy Statement of the Board of Governors of the 9. The Board regards this condition to be necessary to prevent the Federal Reserve System for Assessing Competitive Factors Under the anticompetitive effects that would result from Applicant's ownership Bank Merger Act and the Bank Holding Company Act." 47 Federal of over 21 percent of the voting shares of one of its principal Register 9017 (March 3, 1982). Although the proposed policy state- competitors. See State Street Boston Corporation (Worcester Banment has not been approved by the Board, the Board is using the corp, Inc.), 67 FEDERAL RESERVE BULLETIN 862 (1981); Barnett policy guidelines in its analysis of the effects of a proposal on probable Banks of Florida, Inc. (First Marine Banks, Inc.), 68 FEDERAL future competition. RESERVE BULLETIN 190 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 121 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During January 1983, the Board of Governors approved the applications listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action Applicant Bank(s) (effective date) California City Bancorp, California City Bank, N.A., January 19, 1983 Orange, California Orange, California Coffeyville Bancshares, Inc., The First National Bank of Coffeyville, January 18, 1983 Coffeyville, Kansas Coffeyville, Kansas First Arkansas Bankstock Corporation, Pope County Bankshares, Inc., January 20, 1983 Little Rock, Arkansas Russellville, Arkansas Mercantile Texas Corporation, Exposition Bank, N.A., January 6, 1983 Dallas, Texas San Antonio, Texas Union Planters Corporation, Tennessee Commerce Corporation, January 20, 1983 Memphis, Tennessee Jacksonville, Tennessee By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date A & K Bancshares, Inc., Citizens State Bank, Dallas January 14, 1983 Roby, Texas Roby, Texas American Bank Corporation, First Wyoming Bank, N.A., Lara- Kansas City January 20, 1983 Denver, Colorado mie, Laramie, Wyoming Athena Bancshares Corporation, Pampa Bancshares, Inc., Dallas December 31, 1982 Pampa, Texas Pampa, Texas Banzano International, N.V., Miami National Bank, Atlanta January 17, 1983 Curacao, Netherlands Antilles Miami, Florida Banzano, B.V., Amsterdam, Netherlands Miami National Bancorp, Coral Gables, Florida Brannen Banks of Florida, Inc., Bank of Inverness, Atlanta January 14, 1983 Dunnellon, Florida Inverness, Florida Crystal River Bank, Crystal River, Florida Homosassa Springs Bank, Homosassa Springs, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • February 1983 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date C. J. Bancshares, Inc., Citizens Bank of Carl Junction, Kansas City January 10, 1983 Carl Junction, Missouri Carl Junction, Missouri Charter Bancshares, Inc., Charter National Bank, Kansas City December 23, 1982 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Coastal Bend Bancshares, Inc., Coastal Bend National Bank, Dallas January 6, 1983 Robstown, Texas Corpus Christi, Texas Cohutta Bancshares, Inc., Cohutta Banking Company, Atlanta January 11, 1983 Chats worth, Georgia Chats worth, Georgia Dakota Company, Inc., South Dakota Bancorp, Inc., Minneapolis January 21, 1983 Minneapolis, Minnesota Minneapolis, Minnesota Evco, Inc., First National Bank in Evanston, Kansas City January 20, 1983 Casper, Wyoming Evanston, Wyoming Exchange Financial Corporation, The Exchange Bank of Kentucky, Cleveland January 12, 1983 Mount Sterling, Kentucky Mount Sterling, Kentucky Farmers State Investment Co., Farmers State Bank, Kansas City January 12, 1983 Dodge, Nebraska Dodge, Nebraska First Blevins Bancshares, Inc., Bank of Blevins, St. Louis January 14, 1983 Hope, Arkansas Blevins, Arkansas First Commerce Bancorp, Inc., First State Bank, Cleveland December 28, 1982 Eubank, Kentucky Eubank, Kentucky First Community Bancorp, Inc., The Guaranty National Bank, Chicago January 14, 1983 Rockford, Illinois Rockford, Illinois First Community Bancshares, Inc., The First National Bank of Killeen, Dallas December 31, 1982 Houston, Texas Killeen, Texas Fort Hood National Bank, Fort Hood, Texas American Bank, Conroe, Texas First Dumas Bancshares, Inc., First National Bank of Dumas, Dallas December 30, 1982 Dumas, Texas Dumas, Texas First Fordyce Bancshares, Inc., The First National Bank of Fordyce, St. Louis January 18, 1983 Fordyce, Arkansas Fordyce, Arkansas First Gonzales Bancshares, Inc., First Gonzales Corporation, Atlanta January 17, 1983 Gonzales, Louisiana Gonzales, Louisiana First National Cincinnati Corpora- The Farmers and Traders Bank of Cleveland January 6, 1983 tion, Hillsboro, Cincinnati, Ohio Hillsboro, Ohio First National Vermont Corporation, The Bradford National Bank, Boston January 6, 1983 Springfield, Vermont Bradford, Vermont First Peoria Corp., The First National Bank of Peoria, Chicago January 14, 1983 Peoria, Illinois Peoria, Illinois First National Bank of Metamora, Metamora, Illinois First Sharon Holding Company, First State Bank of Sharon, Minneapolis January 7, 1983 Sharon, North Dakota Sharon, North Dakota First Wyoming Bancorporation, State Bank of Big Piney, Kansas City January 11, 1983 Cheyenne, Wyoming Big Piney, Wyoming Flathead Holding Company of Flathead Bank of Bigford, Minneapolis January 14, 1983 Bigford, Bigford, Montana Bigford, Montana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 123 Section 3—Continued . .. T. i / \ Reserve Effective Applicant Bank(s) ^ date FPB Corporation, First and Peoples Trust Company, Atlanta December 29, 1982 Gallatin, Tennessee Gallatin, Tennessee First and Peoples National Bank, Gallatin, Tennessee Farmers and Merchants Bank, Lethpage, Tennessee GN Bankshares, Inc., The Girard National Bank, Kansas City December 27, 1982 Girard, Kansas Girard, Kansas Granada Bankshares, Inc., The American State Bank, Kansas City January 7, 1983 Granada, Colorado Granada, Colorado Gravois Bancorp, Inc., Mehlville Bank, St. Louis January 25, 1983 St. Louis, Missouri St. Louis, Missouri Groos Financial Corporation, Groos Bank, N.A., Dallas December 31, 1982 San Antonio, Texas San Antonio, Texas Guthrie County Bancshares, Inc., Guthrie County State Bank, Chicago December 29, 1982 Guthrie Center, Iowa Guthrie Center, Iowa Hawkeye Bancorporation, Onawa State Bank, Chicago January 7, 1983 Des Moines, Iowa Onawa, Iowa Holly Bankshares, Inc., First Bank & Trust Kansas City January 10, 1983 Holly, Colorado Holly, Colorado Hutchinson Bancorp, First National Bank of Hutchinson, Minneapolis January 3, 1983 Minneapolis, Minnesota Hutchinson, Minnesota Interstate Financial Corporation, First Interstate Bank and Trust Kansas City January 13, 1983 Edmond, Oklahoma Company, Edmond, Oklahoma Kaw Valley Bancshares, Inc., Kaw Valley State Bank & Trust, Kansas City December 29, 1982 Kansas City, Kansas Kansas City, Kansas Kingswood Bank-Corp, Kingswood Trust & Savings, Boston December 29, 1982 Wolfeboro, New Hampshire Wolfeboro, New Hampshire Lamar Bancshares, Inc., Lamar State Bank, Dallas January 14, 1983 Beaumont, Texas Beaumont, Texas Magnolia State Capital Corp., Bank of Simpson County, Atlanta December 30, 1982 Magee, Mississippi Magee, Mississippi Marshall & Ilsley Corporation, Central Bank & Trust, Chicago January 24, 1983 Milwaukee, Wisconsin Marshfield, Wisconsin Meigs County Bancshares, Inc., Meigs County Bank, Atlanta December 29, 1982 Decatur, Tennessee Decatur, Tennessee Middle States Bancorporation, Inc., Colona Avenue State Bank, Chicago January 13, 1983 East Moline, Illinois East Moline, Illinois Morgantown Deposit Bancorp, Inc., Morgantown Deposit Bank, St. Louis December 31, 1982 Morgantown, Kentucky Morgantown, Kentucky MWA Bancorporation, Emmet County State Bank, Chicago January 7, 1983 Estherville, Iowa Estherville, Iowa First Bank and Trust, Spirit Lake, Iowa National Bancshares Corporation of Southwest State Bank, Dallas January 6, 1983 Texas, Corpus Christi, Texas San Antonio, Texas Northern Trust Bank of Florida Na- Northern Trust Bank of Florida Chicago January 20, 1983 ples N.A., Palm Beach N.A., Naples, Florida Palm Beach, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • February 1983 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Northwest Missouri Bancshares, Bank of Craig Bancshares, Inc., Kansas City January 6, 1983 Inc., Craig, Missouri Craig, Missouri Pembroke Bancshares, Inc., Civic Plaza National Bank, Kansas City January 10, 1983 Kansas City, Missouri Kansas City, Missouri Pomeroy Bancorporation, Pomeroy State Bank, Chicago December 30, 1982 Pomeroy, Iowa Pomeroy, Iowa Pueblo Bancorporation, The Pueblo Bank & Trust Co., Kansas City December 30, 1982 Pueblo, Colorado Pueblo, Colorado Quad Cities First Company, Midwest National Bank of Moline, Chicago January 11, 1983 Rock Island, Illinois Moline, Illinois Quadco Bancshares, Inc., Farmers & Merchants State Bank, Dallas January 14, 1983 Ladonia, Texas Ladonia, Texas Ravenswood Financial Corporation, Bank of Ravenswood, Chicago January 26, 1983 Chicago, Illinois Chicago, Illinois RepublicBank Corporation, Texas National Bank of Midland, Dallas January 19, 1983 Dallas, Texas Midland, Texas SBC Financial Corp., State Bank of Como, St. Louis December 30, 1982 Como, Mississippi Como, Mississippi South Dakota Bancorp, Inc., Big Stone State Bank, Minneapolis January 21, 1983 Minneapolis, Minnesota Big Stone City, South Dakota Farmers and Merchants Bank of Huron, Huron, South Dakota Dakota State Bank, Milbank, South Dakota Southern BancShares, Inc., Merchants & Farmers Bank, St. Louis January 24, 1983 West Helena, Arkansas West Helena, Arkansas Statewide Bancshares Corporation, First Bank & Trust Company, Dallas January 6, 1983 Cedar Hill, Texas Cedar Hill, Texas Steel City Bancorporation, Inc., Tinley Park Bank, Chicago January 13, 1983 Chicago, Illinois Tinley Park, Illinois Taney County Bancorporation, Inc., Security Bank and Trust Company, St. Louis January 12, 1983 Kansas City, Missouri Branson, Missouri Union Bancorporation, Inc., United Oklahoma Bankshares, Inc., Kansas City January 18, 1983 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Union Bancshares, Incorporated, The Union Bank, Atlanta January 6, 1983 Marksville, Louisiana Marks ville, Louisiana United Bankers, Inc., Marlin Bancshares, Inc., Dallas January 13, 1983 Waco, Texas Marlin, Texas Victoria Bankshares, Inc., Bank of Commerce, Dallas January 17, 1983 Victoria, Texas Point Comfort, Texas Washington Community Bancshares, Tumwater State Bank, San Fran- January 6, 1983 Tacoma, Washington Tumwater, Washington cisco West Frankfort Community Banc- First Community Bank of West St. Louis January 6, 1983 shares, Inc., Frankfort, West Frankfort, Illinois West Frankfort, Illinois Woodville Bancshares, Inc., Citizens State Bank, Dallas January 14, 1983 Wood ville, Texas Woodville, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 125 Section 4 Nonbanking Reserve Effective Applicant company Bank date Bank South Corporation, Bank South Mortgage Company, Atlanta January 19, Atlanta, Georgia Atlanta, Georgia 1983 Keewatin Bancorporation, Inc. First National Insurance Agency, Minneapolis January 24, Keewatin, Minnesota Keewatin, Minnesota 1983 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Am-Ba-Co., Inc., American Bank of Lake Wales, Atlanta January 14, 1983 Lake Wales, Florida Lake Wales, Florida United Counties Trust Company, Kenilworth State Bank, New York January 18, 1983 Elizabeth, New Jersey Kenilworth, New Jersey United Jersey Bank, United Jersey Bank/North, New York January 18, 1983 Hackensack, New Jersey Montvale, New Jersey PENDING CASES INVOLVING THE BOARD OF GOVERNORS* *This list of pending cases does not include suits Jolene Gustafson v. Board of Governors, filed March against the Federal Reserve Banks in which the Board 1982, U.S.C.A. for the Fifth Circuit. of Governors is not named a party. Edwin F. Gordon v. Board of Governors, et al., filed October 1981, U.S.C.A. for the Eleventh Circuit Flagship Banks, Inc. v. Board of Governors, filed (two consolidated cases). January 1983, U.S.D.C. for the District of Colum- Allen Wolf son v. Board of Governors, filed September bia. 1981, U.S.D.C. for the Middle District of Florida. Flagship Banks, Inc. v. Board of Governors, filed Bank Stationers Association, Inc., et al. v. Board of October 1982, U.S.D.C. for the District of Colum- Governors, filed July 1981, U.S.D.C. for the Northbia. ern District of Georgia. Association of Data Processing Service Organiza- Public Interest Bounty Hunters v. Board of Govertions, Inc., et al. v. Board of Governors, filed nors, et al., filed June 1981, U.S.D.C. for the August 1982, U.S.C. A. for the District of Columbia. Northern District of Georgia. The Philadelphia Clearing House Association, et al. v. Edwin F. Gordon v. John Heimann, et al., filed May Board of Governors, filed July 1982, U.S.D.C. for 1981, U.S.C.A. for the Fifth Circuit. the Eastern District of Pennsylvania. First Bank & Trust Company v. Board of Governors, Richter v. Board of Governors, et al., filed May 1982, filed February 1981, U.S.D.C. for the Eastern Dis- U.S.D.C. for the Northern District of Illinois. trict of Kentucky. Wyoming Bancorporation v. Board of Governors, filed 9 to 5 Organization for Women Office Workers v. May 1982, U.S.C.A. for the Tenth Circuit. Board of Governors, filed December 1980, First Bancorporation v. Board of Governors, filed U.S.D.C. for the District of Massachusetts. April 1982, U.S.C.A. for the Tenth Circuit. Securities Industry Association v. Board of Gover- Charles G. Vick v. Paul A. Volcker, et al., filed March nors, et al., filed October 1980, U.S.D.C. for the 1982, U.S.D.C. for the District of Columbia. District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • February 1983 Securities Industry Association v. Board of Gover- A. G. Becker, Inc. v. Board of Governors, et al., filed nors, et al., filed October 1980, U.S.C.A. for the October 1980, U.S.C.A. for the District of Colum- District of Columbia. bia. A. G. Becker, Inc. v. Board of Governors, et al., filed A. G. Becker, Inc. v. Board of Governors, et al., filed October 1980, U.S.D.C. for the District of Colum- August 1980, U.S.D.C. for the District of Columbia. bia. Berkovitz, et al. v. Government of Iran, et al., filed June 1980, U.S.D.C. for the Northern District of California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks with assets of $1 billion or more A3 Monetary aggregates and interest rates A21 Banks in New York City A4 Reserves of depository institutions, Reserve A22 Balance sheet memoranda Bank credit A23 Branches and agencies of foreign banks A5 Reserves and borrowings of depository A24 Commercial and industrial loans institutions A25 Gross demand deposits of individuals, A6 Federal funds and repurchase agreements of partnerships, and corporations large member banks FINANCIAL MARKETS POLIC YINSTR UMENTS A26 Commercial paper and bankers dollar A7 Federal Reserve Bank interest rates acceptances outstanding A8 Reserve requirements of depository institutions All Prime rate charged by banks on short-term A9 Maximum interest rates payable on time and business loans savings deposits at federally insured institutions All Terms of lending at commercial banks All Federal Reserve open market transactions A28 Interest rates in money and capital markets A29 Stock market—Selected statistics A30 Selected financial institutions—Selected assets FEDERAL RESERVE BANKS and liabilities A12 Condition and Federal Reserve note statements A13 Maturity distribution of loan and security FEDERAL FINANCE holdings A31 Federal fiscal and financing operations A32 U.S. budget receipts and outlays MONETARY AND CREDIT AGGREGATES A33 Federal debt subject to statutory limitation A33 Gross public debt of U.S. Treasury—Types and A13 Aggregate reserves of depository institutions ownership and monetary base A33 U.S. government marketable securities— A14 Money stock measures and components Ownership, by maturity A15 Bank debits and deposit turnover A34 U.S. government securities dealers— A16 Loans and securities of all commercial banks Transactions, positions, and financing A35 Federal and federally sponsored credit agencies—Debt outstanding COMMERCIAL BANKS A17 Major nondeposit funds A18 Assets and liabilities, last Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • February 1983 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 Extensions 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 1982 1982 IItteemm Qi Q2 Q3 Q4 Aug. Sept. Oct. Nov. Dec. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Reserves of depository institutions 1 Total 7.5 6 4.8 14.8 8.8 23.6 9.4 17.5 13.0 2 Required 7.1 1.1 4.6 13.9 8.9 21.5 8.9 17.8 10.0 3 Nonborrowed -.9 4.2 11.2 16.6 14.5 10.7 23.8 13.4 13.5 4 Monetary base2 7.8 7.1 6.5 8.2 6.8 12.2 6.7' 6.1' 9.7 Concepts of money and liquid assets3 5 Ml 10.4 3.3 3.5 16.1 10.4 14.0 20.6 16.9' 8.8 6 M2 9.8 9.5 9.8 8.8 14.3 5.1 8.0 11.6' 7.3 7 M3 8.7 10.7 12.1 8.3 18.5 4.0 9.1 9.6 1.3 8 L 10.4 12.0 11.5 n.a. 11.1 3.3 n.a. n.a. n.a. Time and savings deposits Commercial banks 9 Total 7.5 17.1 17.8 2.4 16.5 4.1 .4 -3.3 2.7 10 Savings4 8.7 2.0 -9.7 12.8 -8.4 5.4 20.7 35.4 -20.5 11 Small-denomination time5 9.7 23.8 21.3 -1.8 20.3 8.8 -9.6 -.9' -23.0 12 Large-denomination time6 4.6 17.0 26.7 -6.8 23.0 -1.6 2.6 -22.9' -44.6 13 Thrift institutions7 3.1 6.6 6.8 2.8 6.3 -.3 5.8 -10.7' -19.1 14 Total loans and securities at commercial banks8 2.6 -6.7 6.0 5.5 6.6 4.4 6.8 1.5 10.5 1982 1982 1983 Ql Q2 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Interest rates (levels, percent per annum) Short-term rates 1 1 6 5 D Fe is d c e o r u al n t f u w n i d n s d 9 o w borrowing10 1 12 4 . . 0 2 0 3 1 1 2 4 . . 0 5 0 2 1 1 0 1 . .0 83 1 9 9 . . 2 2 5 8 1 1 0 0 . . 0 3 0 1 9 9 . . 6 7 8 1 9 9 . . 3 2 5 0 8 8. . 7 9 3 5 8 8 . . 5 6 0 8 1 1 7 8 T C r o e m as m u e ry rc i b a i l l ls p a ( p 3 e -m r o (3 n - t m h o m n a th rk )1 e 1 t , yield)" 1 1 2 3 . . 8 8 1 1 1 1 2 3 . . 4 8 2 1 1 9 1 . . 3 1 2 5 7 8 . . 9 8 0 0 1 7 0 . . 9 3 2 6 7 9 . . 7 2 1 0 8 8 . . 0 6 7 9 7 8 . . 9 5 4 1 7 8. . 1 8 7 6 Long-term rates Bonds U.S. government 14.27 13.74 12.94 10.72 12.16 10.97 10.57 10.62 10.78 State and local government . 13.02 12.33 11.39 9.90 10.66 9.69 10.06 9.96 9.50 Aaa utility (new issue) 15.71 15.73 14.25 12.10 13.52 12.20 11.76 11.84 12.05 22 Conventional mortgages 17.10 16.63 15.65 13.79 15.05 13.95 13.80 13.62 n.a. 1. Unless otherwise noted, rates of change are calculated from average 5. Small-denomination time deposits—including retail RPs—are those issued amounts outstanding in preceding month or quarter. in amounts of less than $100,000. 2. Includes reserve balances at Federal Reserve Banks in the current week 6. Large-denomination time deposits are those issued in amounts of $100,000 plus vault cash held two weeks earlier used to satisfy reserve requirements at all or more. depository institutions plus currency outside the U.S. Treasury, Federal Reserve 7. Savings and loan associations, mutual savings banks, and credit unions. Banks, the vaults of depository institutions, and surplus vault cash at depository 8. Changes calculated from figures shown in table 1.23. Beginning December institutions. 1981, growth rates reflect shifts offoreign loans and securities from U.S. banking 3. Ml: Averages of daily figures for (1) currency outside the Treasury, Federal offices to international banking facilities. Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of 9. Averages of daily effective rates (average of the rates on a given date nonbank issuers; (3) demand deposits at all commercial banks other than those weighted by the volume of transactions at those rates). due to domestic banks, the U.S. government, and foreign banks and official 10. Rate for the Federal Reserve Bank of New York. institutions less cash items in the process of collection and Federal Reserve float; 11. Quoted on a bank-discount basis. and (4) negotiable order of withdrawal (NOW) and automatic transfer service 12. Unweighted average of offering rates quoted by at least five dealers. (ATS) accounts at banks and thrift institutions, credit union share draft (CUSD) 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. accounts, and demand deposits at mutual savings banks. 14. Bond Buyer series for 20 issues of mixed quality. M2: Ml plus savings and small-denomination time deposits at all depository 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by institutions, overnight repurchase agreements at commercial banks, overnight Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve Eurodollars held by U.S. residents other than banks at Caribbean branches of compilations. member banks, and balances of money market mutual funds (general purpose and 16. Average rates on new commitments for conventional first mortgages on broker/dealer). new homes in primary markets, unweighted and rounded to nearest 5 basis points, M3: M2 plus large-denomination time deposits at all depository institutions from Dept. of Housing and Urban Development. and term RPs at commercial banks and savings and loan associations and balances of institution-only money market mutual funds. NOTE. Revisions in reserves of depository institutions reflect the transitional L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents phase-in of reserve requirements as specified in the Monetary Control Act of other than banks, bankers acceptances, commercial paper, Treasury bills and 1980. other liquid Treasury securities, and U.S. savings bonds. 4. Savings deposits exclude NOW and ATS accounts at commercial banks and thrifts and CUSD accounts at credit unions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • February 1983 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 1982 1983 1982 1983 Nov. Dec. Jan.P Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19P Jan. 26P SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 156,151 159,659 157,285 158,689 160,507 161,408 162,503 157,958 158,155 155,785 2 U.S. government securities' 134,461 137,248 135,318 137,166 138,177 137,766 138,453 135,843 136,497 134,037 3 Bought outright 134,207 136,139 134,862 136,700 136,751 135,808 136,335 135,464 136,210 133,739 4 Held under repurchase agreements 254 1.109 456 466 1,426 1,958 2,118 379 287 298 5 Federal agency securities 8,981 9.110 8,987 9,089 9,097 9,156 9,333 8,976 8,944 8,946 6 Bought outright 8,943 8,939 8,934 8,938 8.937 8,937 8,937 8,937 8,937 8,928 7 Held under repurchase agreements 38 171 53 151 160 219 396 39 7 18 8 Acceptances 47 281 126 75 204 599 792 58 55 21 9 Loans 579 699 506 703 546 690 1,198 425 467 328 10 Float 2,730 2,827 2,412 2,347 2.938 3,390 2,964 2,918 1,933 2,391 11 Other Federal Reserve assets 9,353 9,494 9,936 9,308 9,544 9,806 9,763 9,738 10,259 10,061 12 Gold stock 11,148 11,148 11,146 11,148 11,148 11,148 11,148 11,148 11,146 11,144 13 Special drawing rights certificate account . 4,371 4,431 4,618 4,418 4,418 4,418 4,618 4,618 4,618 4,618 14 Treasury currency outstanding 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 ABSORBING RESERVE FUNDS 15 Currency in circulation 151,288 154,269 152,672 153,853 154,610 155,707 155,079 154,167 152,616 151,188 16 Treasury cash holdings 449 436 438 438 434 438 430 433 437 443 Deposits, other than reserves, with Federal Reserve Banks 17 Treasury 3,097 3,227 3,250 3,341 2,959 3,328 4,188 2,915 3,115 3,909 18 Foreign 273 277 259 272 279 331 275 257 273 221 19 Other 569 571 691 524 538 340 1,017 657 589 602 20 Required clearing balances 391 423 460 422 426 430 434 451 460 477 21 Other Federal Reserve liabilities and capital 4,785 5,017 4,868 4,910 4,942 5,050 4,895 4,881 4,927 4,865 22 Reserve accounts2 24,604 24,804 24,197 24,281 25,671 25,136 25,737 23,748 25,289 23,627 End-of-month figures Wednesday figures 1982 1983 1982 1983 Nov. Dec. Jan. Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit outstanding 159,079 163,659 152,537 163,802 159,227 164,141 159,538 162,160 161,260 157,105 24 U.S. government securities' 137,676 139,312 132,368 138,230 135,757 138,148 137,641 138,227 137,519 135,206 25 Bought outright 137,676 135,607 132,368 137,653 135,757 134,801 137,641 135,574 135,510 133,121 26 Held under repurchase agreements 0 3,705 0 577 0 3,347 0 2,653 2,009 2,085 27 Federal agency securities 8,943 9,525 8,928 9,238 8,937 9,448 8,937 9,212 8,985 9,057 28 Bought outright 8,943 8,937 8,928 8,937 8,937 8,937 8,937 8,937 8,937 8,928 29 Held under repurchase agreements 0 588 0 301 0 511 0 275 48 129 30 Acceptances 0 1,480 0 105 0 731 0 406 385 148 31 Loans 374 717 354 3,368 762 1,813 408 1,823 2,186 489 32 Float 2,401 2,735 1,006 3,277 3,909 4,048 2,685 2,459 1,956 2,216 33 Other Federal Reserve assets 9,685 9,890 9,881 9,584 9,862 9,953 9,867 10,033 10,229 9,989 34 Gold stock 11,148 11,148 11,144 11,148 11,148 11,148 11,148 11,146 11,146 11,144 35 Special drawing rights certificate account . 4,418 4,618 4,618 4,418 4,418 4,418 4,618 4,618 4,618 4,618 36 Treasury currency outstanding 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 ABSORBING RESERVE FUNDS 37 Currency in circulation 152,895 154,908 150,511 154,604 155,666 156,181 155,032 153,924 152,188 151,092 38 Treasury cash holdings 444 429 448 436 433 435 432 435 437 444 Deposits, other than reserves, with Federal Reserve Banks 39 Treasury 2,247 5,033 2,627 2,918 2,226 3,620 3,028 2,753 3,468 2,140 40 Foreign 387 328 366 385 280 261 238 271 270 217 41 Other 717 1,033 603 516 269 259 662 581 545 609 42 Required clearing balances 408 436 478 422 426 428 436 449 460 477 43 Other Federal Reserve liabilities and capital 5,209 4,990 4,850 4,828 4,736 4,777 4,719 4,858 4,857 4,728 44 Reserve accounts2 26,124 26,053 22,201 29,045 24,542 27,532 24,543 28,438 28,584 26,944 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 RReesseerrvvee ccllaassssiiffiiccaattiioonn 1981 1982 1983 Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan.? 1 Reserve balances with Reserve Banks' 26,163 24,207 24,031 24,273 24,471 23,385 24,252 24,604 24,804 24,197 2 Total vault cash (estimated) 19,538 19,048 19,318 19,448 19,500 19,921 19,578 19,807 20,392 21,452 3 Vault cash at institutions with required reserve balances2 13,577 12,972 13,048 13,105 13,188 13,651 13,658 13,836 14,292 14,744 4 Vault cash equal to required reserves at other institutions 2,178 2,373 2,488 2,486 2,518 2,927 2,677 2,759 2,757 2,748 Surplus vault cash at other institutions3 3,783 3,703 3,782 3,857 3,794 3,343 3,243 3,212 3,343 3,960 6 Reserve balances + total vault cash4 45,701 43,255 43,349 43,721 43,971 43,306 43,830 44,411 45,196 45,649 7 Reserve balances + total vault cash used to satisfy reserve requirements4,5 41,918 39,552 39,567 39,864 40,177 39,963 40,587 41,199 41,853 41,689 8 Required reserves (estimated) 41,606 39,192 39,257 39,573 39,866 39,579 40,183 40,797 41,353 41,314 9 Excess reserve balances at Reserve Banks4'6 312 360 310 291 311 384 404 402 500 375 10 Total borrowings at Reserve Banks 642 1,105 1,205 669 510 976 455 579 697 506 11 Seasonal borrowings at Reserve Banks 53 237 239 225 119 102 86 47 33 33 12 Extended credit at Reserve Banks 149 177 103 46 94 118 141 188 187 156 Weekly averages of daily figures for week ending 1982 1983 Nov. 24 Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19p Jan. 26? 13 Reserve balances with Reserve Banks' 25,347 24,748 23,869 24,281 25,671 25,136 25,737 23,748 25,289 23,627 14 Total vault cash (estimated) 18,688 20,387 20,267 21,382 19,506 20,496 20,105 21,463 22,168 21,837 15 Vault cash at institutions with required reserve balances2 13,474 14,262 14,218 14,484 14,112 14,406 14,126 1144,,551166 14,968 15,034 16 Vault cash equal to required reserves at other institutions 2,355 2,841 2,839 3,295 2,494 2,464 2,490 3,017 2,917 2,718 17 Surplus vault cash at other institutions3 2,859 3,284 3,210 3,603 2,900 3,626 3,489 3,930 4,283 4,085 18 Reserve balances + total vault cash4 44,035 45,135 44,136 45,663 45,177 45,632 45,842 4455,,221111 47,457 45,464 19 Reserve balances + total vault cash used to satisfy reserve requirements4'5 41,176 41,851 40,926 42,060 42,277 42,006 42,353 41,281 43,174 41,379 20 Required reserves (estimated) 40,852 41,355 40,612 41,506 42,047 41,243 41,360 40,990 42,501 41,041 21 Excess reserve balances at Reserve Banks4'6 324 496 314 554 230 763 993 291 673 338 22 Total borrowings at Reserve Banks 467 622 437 703 546 690 1,198 425 467 328 23 Seasonal borrowings at Reserve Banks 46 35 26 24 38 44 37 31 30 34 24 Extended credit at Reserve Banks 186 185 186 189 189 191 143 133 113 197 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 3. Total vault cash at institutions without required reserve balances less vault clearing balances plus vault cash at institutions with required reserve balances cash equal to their required reserves. plus vault cash equal to required reserves at other institutions. 4. Adjusted to include waivers of penalties for reserve deficiencies in accord- 6. Reserve balances with Federal Reserve Banks, which exclude required ance with Board policy, effective Nov. 19,1975, of permitting transitional relief on clearing balances plus vault cash used to satisfy reserve requirements less a graduated basis over a 24-month period when a nonmember bank merged into an required reserves. (This measure of excess reserves is comparable to the old excess reserve concept published historically.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • February 1983 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1982 and 1983, week ending Wednesday BByy mmaattuurriittyy aanndd ssoouurrccee Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 One day and continuing contract 1 Commercial banks in United States 54,783 59,807 60,297 60,403 57,614' 63,310 6699,,112200 6666,,113388 6600,,117722 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 23,675 22,407 24,624 23,945 22,007 21,947 25,588 28,792 29,051 3 Nonbank securities dealers 4,565 5,689 5,503 5,028 4,494' 4,056 4,515 4,437 4,342 4 All other 21,195 24,365 23,767 23,536 20,715 22,310 26,005 25,279 25,232 All other maturities 5 Commercial banks in United States 4,338 3,828 4,100 4,466 6,127' 5,768 4,352 4,229 4,299 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 8,585 8,671 9,2% 9,516 11,065' 10,352 8,801 8,652 8,580 7 Nonbank securities dealers 5,227 4,318 4,207 3,696 3,866' 4,072 3,439 4,270 4,809 8 All other 12,224 8,803' 9,461 8,855 13,494' 13,064 8,697 9,187 8,938 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 23,523 23,809 23,253 24,482 21,544' 23,750 27,326 27,936 24,771 10 Nonbank securities dealers 5,186 5,537 5,630 5,415 5,115 4,848 5,328 4,641 3,968 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 All 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit' SShhoorrtt--tteerrmm aaddjjuussttmmeenntt ccrreeddiitt FFFeeedddeeerrraaalll RRReeessseeerrrvvveee aanndd sseeaassoonnaall ccrreeddiitt First 60 days Next 90 days BBBaaannnkkk of borrowing of borrowing After 150 days EEffffeeccttiivvee ddaattee ffoorr ccuurrrreenntt rraatteess Rate on Effective Previous Rate on Previous Rate on Previous Rate on Previous 1/31/83 date rate 1/31/83 rate 1/31/83 rate 1/31/83 rate Boston 8'/! 12/14/82 9 81/2 9 91/2 10 10'/2 11 12/14/82 New York 12/15/82 12/15/82 Philadelphia 12/17/82 12/17/82 Cleveland 12/15/82 12/15/82 Richmond 12/15/82 12/15/82 Atlanta 12/14/82 12/14/82 Chicago 12/14/82 12/14/82 St. Louis 12/14/82 12/14/82 Minneapolis 12/14/82 12/14/82 Kansas City .... 12/15/82 12/15/82 Dallas 12/14/82 12/14/82 San Francisco... 81/2 12/14/82 9 8'/2 9 91/2 10 101/2 11 12/14/82 Range of rates in recent years2 Range (or F.R. Range (or F.R. Range (or F.R. level)— Bank level)— Bank level)— Bank Effective date All F.R. of Effective date All F.R. of Effective date All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. I 1 n 9 7 e 4 f — fec A t D pr e . c . 2 3 5 1 , 1973 71 7 / 1 2 / - 2 8 7 8 1 /2 1978— Julv 1 3 0 I m -1 Vi 7 71 > / /4 4 1981— May 5 8 13 1 - 4 1 4 1 1 4 4 Dec. 3 9 0 7 8 3/ 4-8 8 73 /4 A Se u p g t . . ? ? 1 ? 7 8 3 /4 7 8 3 /4 Nov. 2 6 13 1 - 3 1 4 1 1 3 3 1975— Jan. 1 1 6 0 6 7 7 1 1 / / 7 + 4 3 - - / 7 7 4 3 3 / / 4 4 7 7 7 3 3 !/ / / 4 4 4 N O o ct v . . 7 1 3 0 1 6 8' 8 / — 2 9 m - 8 1 9 / 1 2 > / 2 /2 9 9 8 8« ' ' ' / / / / 2 2 2 2 1982—J D u e ly c . 2 2 4 0 3 1111 1 /12 2 - 1 '2/ 2 1 1 1 1 1 2 1 1 / / 2 2 24 71/4 71/4 Aug. 2 11—111/2 11 M Fe a b r . . 1 5 7 0 6 6 3 1 / / 6 4 4 3 - - 7 / 6 4 1 3 / / 4 4 6 6 6 3 3 1 / / / 4 4 4 1979— J AA u uu lv gg .. ? ? 1 0 0 7 10 1 1 - 0 0 1 0 1/ ' 2 /2 1 1 1 0 0 0 1 ' / / 2 ! 2 16 3 7 lO 1 - 0 1 lO ' 1 /2 V i 1 1 1 0 0 1 1 /2 14 6'/4 61/4 Sept. 19 101/2-1 1 11 30 10 10 May 16 6-6'/4 6 ?1 11 11 Oct. 12 91/2-10 91/2 23 6 6 Oct. 8 II-12 12 13 91/2 91/2 10 12 12 Nov. 22 9-9 >/2 9 1976— Jan. 19 5V2-6 51/2 26 9 9 23 5l/i 51/2 1980— Feb. 15 12-13 13 Dec. 14 8'/2-9 9 Nov. 22 51/4-51h 5'/4 19 13 13 15 81/2-9 81/2 26 51/4 5'/4 May 29 12-13 13 17 8'/2 81/2 30 12 12 1977— Aug. 30 5'/4-53/4 51/4 June 13 11-12 11 Sept. 3 2 1 5'/ 5 4 3 - / 5 4 3 /4 5 5 3 3 / / 4 4 July 7 1 8 6 10 1 - 1 1 1 1 1 1 0 Oct. 26 6 6 29 10 10 Sept. ?6 11 11 1978— Jan. 9 6-6 Vi 6l/2 Nov. 17 12 12 20 6</2 61/2 Dec. 5 12-13 13 May 1 12 1 6< 1 / 2-l 7 7 8 13 13 In effect Jan. 31, 1983 8!h 81/2 1. Applicable to advances when exceptional circumstances or practices involve In 1980 and 1981, the Federal Reserve applied a surcharge to short-term only a particular depository institution and to advances when an institution is adjustment credit borrowings by institutions with deposits of $500 million or more under 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, 1970-1979, and adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and 1980. 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 Nonfinancial Statistics • February 1983 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Member bank requirements Depository institution requirements Type of deposit, and deposit interval before implementation of the Type of deposit, and after implementation of the in millions of dollars Monetary Control Act deposit interval5 Monetary Control Act6 Effective date Net demand2 Net transaction accounts7,8 0-2 7 12/30/76 $0-$26.3 million 21 1 - 0 01 0 -01 - 0 40 0 0 I 1 P 9 2 ' / A 3 4 /4 1 1 1 2 2 2 / / / 3 3 3 0 0 0 / / / 7 7 7 6 6 6 O No v n e p r e $ r 2 so 6 n .3 a l m i t l i l m io e n deposits9 Over 400 16V4 12/30/76 By original maturity Less than 3 Vi years Time and savings2 3 V/2 years or more Savings 3/16/67 Eurocurrency liabilities Time4 All types 0-5, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2V2 1/8/76 4 years or more ... 1 10/30/75 Over 5, by maturity 3 1 0 8 - 0 1 d 7 a 9 y d s a t y o s 4 years 6 2 l/2 12/ 1 1 / 2 8 / / 7 7 4 6 4 years or more ... 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97- Statistical Digest, 1971-1975 and for prior changes, see Board's Annual Report 320) provides that $2 million of reservable liabilities (transaction accounts, for 1976, table 13. Under provisions of the Monetary Control Act, depository nonpersonal time deposits, and Eurocurrency liabilities) of each depository institutions include commercial banks, mutual savings banks, savings and loan institution be subject to a zero percent reserve requirement. The Board is to adjust associations, credit unions, agencies and branches offoreign banks, and Edge Act the amount of reservable liabilities subject to this zero percent reserve requirecorporations. ment each year for the next succeeding calendar year by 80 percent of the 2. Requirement schedules are graduated, and each deposit interval applies to percentage increase in the total reservable liabilities of all depository institutions, that part of the deposits of each bank. Demand deposits subject to reserve measured on an annual basis as of June 30. No corresponding adjustment is to be requirements were gross demand deposits minus cash items in process of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the collection and demand balances due from domestic banks. exemption was established at $2.1 million. In determining the reserve require- The Federal Reserve Act as amended through 1978 specified different ranges of ments of a depository institution, the exemption shall apply in the following order: requirements for reserve city banks and for other banks. Reserve cities were (1) nonpersonal money market deposit accounts (MMDAs) authorized under 12 designated under a criterion adopted effective Nov. 9, 1972, by which a bank CFR section 1204.122; (2) net NOW accounts (NOW accounts less allowable having net demand deposits of more than $400 million was considered to have the deductions); (3) net other transaction accounts; and (4) nonpersonal time deposits character of business of a reserve city bank. The presence of the head office of or Eurocurrency liabilities starting with those with the highest reserve ratio. With such a bank constituted designation of that place as a reserve city. Cities in which respect to NOW accounts and other transaction accounts, the exemption applies there were Federal Reserve Banks or branches were also reserve cities. Any only to such accounts that would be subject to a 3 percent reserve requirement. banks having net demand deposits of $400 million or less were considered to have 6. For nonmember banks and thrift institutions that were not members of the the character of business of banks outside of reserve cities and were permitted to Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3, maintain reserves at ratios set for banks not in reserve cities. 1987. For banks that were members on or after July 1, 1979, but withdrew on or Effective Aug. 24, 1978, the Regulation M reserve requirements on net balances before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends due from domestic banks to their foreign branches and on deposits that foreign on Oct. 24, 1985. For existing member banks the phase-in period is about three branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent years, depending on whether their new reserve requirements are greater or less respectively. The Regulation D reserve requirement of borrowings from unrelated than the old requirements. All new institutions will have a two-year phase-in banks abroad was also reduced to zero from 4 percent. beginning with the date that they open for business, except for those institutions Effective with the reserve computation period beginning Nov. 16, 1978, that have total reservable liabilities of $50 million or more. domestic deposits of Edge corporations were subject to the same reserve 7. Transaction accounts include all deposits on which the account holder is requirements as deposits of member banks. permitted to make withdrawals by negotiable or transferable instruments, pay- 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as ment orders of withdrawal, and telephone and preauthorized transfers (in excess Christmas and vacation club accounts were subject to the same requirements as of three per month) for the purpose of making payments to third persons or others. savings deposits. However, MMDAs and similar accounts offered by institutions not subject to the The average reserve requirement on savings and other time deposits before rules of the Depository Institutions Deregulation Committee (DIDC) that permit implementation of the Monetary Control Act had to be at least 3 percent, the no more than six preauthorized, automatic, or other transfers per month of which minimum specified by law. no more than three can be checks—are not transaction accounts (such accounts 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent are savings deposits subject to time deposit reserve requirements.) was imposed on large time deposits of $100,000 or more, obligations of affiliates, 8. The Monetary Control Act of 1980 requires that the amount of transaction and ineligible acceptances. This supplementary requirement was eliminated with accounts against which the 3 percent reserve requirement applies be modified the maintenance period beginning July 24, 1980. annually by 80 percent of the percentage increase in transaction accounts held by Effective with the reserve maintenance period beginning Oct. 25, 1979, a all depository institutions determined as of June 30 each year. Effective Dec. 31, marginal reserve requirement of 8 percent was added to managed liabilities in 1981, the amount was increased accordingly from $25 million to $26 million; and excess of a base amount. This marginal requirement was increased to 10 percent effective Dec. 30, 1982, to $26.3 million. beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and 9. In general, nonpersonal time deposits are time deposits, including savings was eliminated beginning July 24, 1980. Managed liabilities are defined as large deposits, that are not transaction accounts and in which the beneficial interest is time deposits, Eurodollar borrowings, repurchase agreements against U.S. held by a depositor that is not a natural person. Also included are certain government and federal agency securities, federal funds borrowings from non- transferable time deposits held by natural persons, and certain obligations issued member institutions, and certain other obligations. In general, the base for the to depository institution offices located outside the United States. For details, see marginal reserve requirement was originally the greater of (a) $100 million or (b) section 204.2 of Regulation D. the average amount of the managed liabilities held by a member bank, Edge corporation, or family of U.S. branches and agencies of a foreign bank for the two NOTE. Required reserves must be held in the form of deposits with Federal reserve computation periods ending Sept. 26, 1979. For the computation period Reserve Banks or vault cash. After implementation of the Monetary Control Act, beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease nonmembers may maintain reserves on a pass-through basis with certain apin an institution's U.S. office gross loans to foreigners and gross balances due proved institutions. from foreign offices of other institutions between the base period (Sept. 13-26, 1979) and the week ending Mar. 12, 1980, whichever was greater. For the computation period beginning May 29, 1980, the base was increased by 7l/2 percent above the base used to calculate the marginal reserve in the statement week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and balances declined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments All 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Percent per annum Commercial banks mut S u a a v l in sa g v s in an g d s b lo a a n n k s a s (t s h o r c i i f a t ti i o n n st s i tu an ti d o ns) TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy ooofff dddeeepppooosssiiittt In effect January 31, 1983 Previous maximum In effect January 31, 1983 Previous maximum Percent Eff d e a c te ti ve Percent Ef d fe a c te ti ve Percent Eff d e a c te ti ve Percent Eff d e a c te ti ve 1 Savings 5555''''////4444 7777////1111////77779999 5555 77//11//7733 55551111////2222 m 119 5555''''AAAA 0) 2 Negotiable order of withdrawal accounts2 5555''''////4444 11112222////33331111////88880000 5555 11//11//7744 5555%%%% 12/31/80 5555 1/1/74 Time accounts3 Fixed ceiling rates by maturity4 3 14-89 days' 55551111////4444 8888////1111////77779999 5555 77//11//7733 ((((6666)))) ((((6666)))) 1 4 6 7 9 5 1 9 2 6 2 I 1 s V 0 t t t s o o o i u d t e a 8 2 2 o d y x s y h y 4 t e e o t y y a a o e e r r g s s a a 1 o 7 8 r r v s y s e 7 7 e r a n r m ental units (all 5 6 6 7 m 7 5 6 6 7 m 7 5 6 6 7 m 7 5 6 6 7 m 7 !!!! 3 > 3 3 > 3 3 > 3 3 > 3 //// / / / / / / / / 4444 4 4 4 4 4 4 4 4 ////2222 11112222 1111 7 7 6 7 7 6 7 7 6 7 7 6 //// 1111 1111 2222 / / / / / / / / //// //// //// 1 1 1 1 1 1 1 1 1111 3333 1111 1111 / / / / / / / / //// //// //// //// 7 7 7 7 7 7 7 7 7777 7777 7777 8888 3 3 3 3 3 3 3 3 8888 4444 3333 0000 (((( (((( 9999 6666 )))) 5 5 5 5 7 5 5 5 5 7 5 5 5 5 7 5 5 5 5 7 )))) '''' '''' ' 3 3 ' 3 3 ' 3 3 ' 3 3 //// //// AAAA / / / / / / / / >>>> 4444 4 4 4 4 4 4 4 4 1 1 1 1 1 1 1 77 / / / / / / 1 2 2 2 2 2 2 // / 11 1 1 1 1 1 1 1 // / / / / / / / 77 7 7 7 7 7 7 7 33 0 0 0 0 0 0 3 6666 6 7 7 8 6 7 7 8 6 7 7 8 6 7 7 8 6666 VVVV 3333 3333 VVVV //// //// 4444 4444 ,,,, iiii 111222 111 666 /// 111 111 222 /// ( ( ( ( ( ( /// /// 111 333 111 111 ''' ''' ))) ))) /// /// /// /// 777 777 888 777 888 444 000 333 (((( (((( »»»» 6666 )))) 5 5 6 6 m 5 5 6 6 m 5 5 6 6 m 5 5 6 6 m )))) 3333 % % % % ////4444 1 1 1 1 / / / 1 2 2 2 ( / 1 1 1 1 ') / / / / 7 7 7 7 0 0 0 3 12 IRAs m a a n tu d r i K ti e e o s) g 1 h 0 (H.R. 10) plans (3 years 8888 6666////1111////77778888 77773333////4444 12/23/74 8888 666///111///777888 77773333////4444 12/23/74 or more)10'11 8888 6666////1111////77778888 77773333////4444 7/6/77 8888 666///111///777888 77773333////4444 7/6/77 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loans. 9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or 2. Federally insured commercial banks, savings and loan associations, cooper- more with minimum denominations of $1,000 had no ceiling; however, the amount ative banks, and mutual savings banks in Massachusetts and New Hampshire of such certificates that an institution could issue was limited to 5 percent of its were first permitted to offer negotiable order of withdrawal (NOW) accounts on total time and savings deposits. Sales in excess of that amount, as well as Jan. 1, 1974. Authorization to issue NOW accounts was extended to similar certificates of less than $1,000, were limited to the 6'/i percent ceiling on time institutions throughout New England on Feb. 27, 1976, in New York State on deposits maturing in 2Vi years or more. Effective Nov. 1, 1973, ceilings were Nov. 10, 1978, New Jersey on Dec. 28, 1979, and to similar institutions nationwide reimposed on certificates maturing in 4 years or more with minimum denominaeffective Dec. 31, 1980. Effective January 5, 1983 the interest rate ceiling is tion of $1,000. There is no limitation on the amount of these certificates that banks removed for NOW accounts with an initial balance and average maintenance can issue. balance of $2,500. 10. Accounts subject to fixed-rate ceilings. See footnote 8 for minimum 3. For exceptions with respect to certain foreign time deposits see the denomination requirements. BULLETIN for October 1962 (p. 1279), August 1965 (p. 1084), and February 1968 11. Effective Jan. 1, 1980, commercial banks are permitted to pay the same rate (p. 167). as thrifts on IRA and Keogh accounts and accounts of governmental units when 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts such deposits are placed in 2'/2-year-or-more variable-ceiling certificates or in 26at savings and loan associations was decreased to 14 days and the minimum week money market certificates regardless of the level of the Treasury bill rate. maturity period for time deposits at savings and loan associations in excess of $100,000 was decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity NOTE. Before Mar. 31, 1980, the maximum rates that could be paid by federally or notice period for time deposits was decreased from 30 to 14 days at mutual insured commercial banks, mutual savings banks, and savings and loan associasavings banks. tions were established by the Board of Governors of the Federal Reserve System, 5. Effective Oct. 30, 1980, the minimum maturity or notice period for time the Board of Directors of the Federal Deposit Insurance Corporation, and the deposits was decreased from 30 to 14 days at commercial banks. Federal Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526 6. No separate account category. respectively. Title II of the Depository Institutions Deregulation and Monetary 7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to required for savings and loan associations, except in areas where mutual savings establish maximum rates of interest payable on deposits to the Depository banks permitted lower minimum denominations. This restriction was removed for Institutions Deregulation Committee. The maximum rates on time deposits in deposits maturing in less than 1 year, effective Nov. 1, 1973. denominations of $100,000 or more with maturities of 30-89 days were suspended 8. No minimum denomination. Until July 1, 1979, the minimum denomination in June 1970; the maximum rates for such deposits maturing in 90 days or more was $1,000 except for deposits representing funds contributed to an individual were suspended in May 1973. For information regarding previous interest rate retirement account (IRA) or a Keogh (H.R. 10) plan established pursuant to the ceilings on all types of accounts, see earlier issues of the FEDERAL RESERVE Internal Revenue Code. The $1,000 minimum requirement was removed for such BULLETIN, the Federal Home Loan Bank Board Journal, and the Annual Report accounts in December 1975 and November 1976 respectively. of the Federal Deposit Insurance Corporation. For deposits subject to variable ceiling rates and deposits not subject to interest rate ceilings see page A10. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • February 1983 1.16 Continued TIME DEPOSITS SUBJECT TO VARIABLE CEILING RATES 7- to 31-day time deposits. Effective Sept. 1, 1982, depository institutions are The maximum rates in January 1983 for commercial banks based on the bill rate authorized to issue nonnegotiable time deposits of $20,000 or more with a maturity were as follows: Jan. 4, 8.196; Jan. 11, 8.024; Jan. 18, 7.978; Jan. 25, 8.394; and or required notice period of 7 to 31 days. The maximum rate of interest payable by based on the 4-week average bill rate were as follows: Jan. 4, 8.326; Jan. 11, 8.218; thrift institutions is the rate established and announced (auction average on a Jan. 18, 8.124; Jan. 25, 8.148. The maximum allowable rates in January 1983 for discount basis) for U.S. Treasury bills with maturities of 91 days at the auction thrifts based on the bill rate were as follows: Jan. 4, 8.446; Jan. 11, 8.274; Jan. 18, held immediately before the date of deposit or renewal ("bill rate"). Commercial 8.228; Jan. 25, 8.644; and based on the 4-week average bill rate were as follows: banks may pay the bill rate minus 25 basis points. The interest rate ceiling is Jan. 4, 8.576; Jan. 11, 8.468; Jan. 18, 8.374; Jan. 25, 8.398. suspended when the bill rate is 9 percent or below for the four most recent auctions held before the date of deposit or renewal. Effective January 5, 1983, the 12-month all savers certificates. Effective Oct. 1, 1981, depository institutions minimum denomination required for this deposit is reduced to $2,500 and the are authorized to issue all savers certificates (ASCs) with a 1-year maturity and an interest rate ceiling is removed. annual investment yield equal to 70 percent of the average investment yield for 52week U.S. Treasury bills as determined by the auction of 52-week Treasury bills 91-day time deposits. Effective May 1, 1982, depository institutions were held immediately before the calendar week in which the certificate is issued. A authorized to offer time deposits that have a minimum denomination of $7,500 and maximum lifetime exclusion of $1,000 ($2,000 on a joint return) from gross income a maturity of 91 days. Effective January 5, 1983, the minimum denomination is generally authorized for interest income from ASCs. The annual investment required for this deposit is reduced to $2,500. The ceiling rate of interest on these yield for ASCs issued in December 1982 (in percent) was as follows: Dec. 26, 6.26. deposits is indexed to the discount rate (auction average) on most recently issued 91-day Treasury bills for thrift institutions and the discount rate minimum 25 basis 2'/2-year to less than 3'/2-year time deposits. Effective Aug. 1, 1981, commercial points for commercial banks. The rate differential ends 1 year from the effective banks are authorized to pay interest on any variable ceiling nonnegotiable time date of these instruments and is suspended at any time the Treasury bill discount deposit with an original maturity of 2'/2 years to less than 4 years at a rate not to rate is 9 percent or below for four consecutive auctions. The maximum allowable exceed '/) of 1 percent below the average 2l/2-year yield for U.S. Treasury rates in January 1983 (in percent) for commercial banks and thrifts were as securities as determined and announced by the Treasury Department immediately follows: Jan. 4, 7.896; Jan. 11, 7.671; Jan. 18, 7.619; Jan. 25, 8.055. before the date of deposit. Effective May 1, 1982, the maximum maturity for this category of deposits was reduced to less than 3'/2 years. Thrift institutions may Six-month money market time deposits. Effective June 1, 1978, commercial pay interest on these certificates at a rate not to exceed the average 2'/2-year yield banks and thrift institutions were authorized to offer time deposits with a maturity for Treasury securities as determined and announced by the Treasury Department of exactly 26 weeks and a minimum denomination requirement of $10,000. immediately before the date of deposit. If the announced average 2'/2-year yield Effective January 5, 1983, the minimum denomination required for this deposit is for Treasury securities is less than 9.50 percent, commercial banks may pay 9.25 reduced to $2,500. The ceiling rate of interest on these deposits is indexed to the percent and thrift institutions 9.50 percent for these deposits. These deposits have discount rate (auction average) on most recently issued 26-week U.S. Treasury no required minimum denomination, and interest may be compounded on them. bills. Interest on these certificates may not be compounded. Effective for all 6- The ceiling rates of interest at which they may be offered vary biweekly. The month money market certificates issued beginning Nov. 1, 1981, depository maximum allowable rates in January 1983 (in percent) for commercial banks were institutions may pay rates of interest on these deposits indexed to the higher of (1) as follows: Jan. 4, 9.40; Jan. 18, 9.25; and for thrift institutions: Jan. 4, 9.65; Jan. the rate for 26-week Treasury bills established immediately before the date of 18, 9.50. deposit (bill rate) or (2) the average of the four rates for 26-week Treasury bills Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks and thrift instituestablished for the 4 weeks immediately before the date of deposit (4-week tions were authorized to offer variable ceiling nonnegotiable time deposits with no average bill rate). Ceilings are determined as follows: required minimum denomination and with maturities of 2Vi years or more. Effective Jan. 1, 1980, the maximum rate for commercial banks was 3/4 percentage Bill rate or 4-week Commercial bank ceiling point below the average yield on 2'/2-year U.S. Treasury securities; the ceiling rate average bill rate for thrift institutions was '/4 percentage point higher than that for commercial 7.50 percent or below 7.75 percent banks. Effective Mar. 1, 1980, a temporary ceiling of ll3/4 percent was placed on Above 7.50 percent '/4 of 1 percentage point plus the higher of these accounts at commercial banks and 12 percent on these accounts at savings the bill rate or 4-week average bill rate and loans. Effective June 2, 1980, the ceiling rates for these deposits at commercial banks and savings and loans were increased '/2 percentage point. The Thrift ceiling temporary ceiling was retained, and a minimum ceiling of 9.25 percent for 7.25 percent or below 7.75 percent commercial banks and 9.50 percent for thrift institutions was established. Above 7.25 percent, but below Vl of 1 percentage point plus the higher of 8.50 percent the bill rate or 4-week average bill rate 8.50 percent or above, but below 9 percent 8.75 percent 8.75 percent or above '/4 of 1 percentage point plus the higher of the bill rate or 4-week average bill rate TIME DEPOSITS NOT SUBJECT TO INTEREST RATE CEILINGS Money market deposit account. Effective Dec. 14, 1982, depository institutions IRAs and Keogh (H.R. 10) plans (18 months or more). Effective Dec. 1, 1981, are authorized to offer a new account with a required initial balance of $2,500 and depository institutions are authorized to offer time deposits not subject to interest an average maintenance balance of $2,500 not subject to interest rate restrictions. rate ceilings when the funds are deposited to the credit of, or in which the entire No minimum maturity period is required for this account, but depository beneficial interest is held by, an individual pursuant to an IRA agreement or institutions must reserve the right to require seven days' notice before withdraw- Keogh (H.R. 10) plan. Such time deposits must have a minimum maturity of 18 als. When the average balance is less than $2,500, the account is subject to the months, and additions may be made to the time deposit at any time before its maximum ceiling rate of interest for NOW accounts; compliance with the average maturity without extending the maturity of all or a portion of the balance of the balance requirement may be determined over a period of one month. Depository account. institutions may not guarantee a rate of interest for this account for a period longer Time deposits of 3'/2 years or more. Effective May 1, 1982, depository than one month or condition the payment of a rate on a requirement that the funds institutions are authorized to offer negotiable or nonnegotiable time deposits with remain on deposit for longer than one month. No more than six preauthorized, a minimum original maturity of 3'/2 years or more that are not subject to interest automatic, or other third-party transfers are permitted per month, of which no rate ceilings. Such time deposits have no minimum denomination, but must be more than three can be checks. Telephone transfers to third parties or to another made available in a $500 denomination. Additional deposits may be made to the account of the same depositor are regarded as preauthorized transfers. account during the first year without extending its maturity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments All 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1982 TTyyppee ooff ttrraannssaaccttiioonn 11998800 11998811 11998822 June July Aug. Sept. Oct. Nov. Dec. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 7,668 13,899 17,067 1,559 1,905 1,721 425 774 2,552 1,897 2 Gross sales 7,331 6,746 8,369 0 1,175 651 674 0 0 731 3 Exchange 0 0 0 200 -200 0 0 0 0 0 4 Redemptions 3,389 1,816 3,000 0 200 600 400 0 0 200 Others within 1 year 5 Gross purchases 912 317 312 0 71 0 0 0 88 0 6 Gross sales 0 23 0 0 0 0 0 0 0 0 7 Maturity shift 12,427 13,794 17,295 988 382 4,938 733 623 2,819 906 8 Exchange -18,251 -12,869 -14,164 -1,249 0 -3,914 -650 0 -1,924 -943 9 Redemptions 0 0 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 2,138 1,702 1,797 0 691 0 0 0 485 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -8,909 -10,299 -14,524 -988 -382 -4,938 -733 -623 -2,204 -906 13 Exchange 13,412 10,117 11,804 1,049 200 3,078 650 0 1,515 943 5 to 10 years 14 Gross purchases 703 393 388 0 113 0 0 0 194 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shift -3,092 -3,495 -2,172 0 0 601 0 0 -616 0 17 Exchange 2,970 1,500 2,128 0 0 837 0 0 250 0 Over 10 years 18 Gross purchases 811 379 307 0 123 0 0 0 132 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -426 0 -601 0 0 -601 0 0 0 0 21 Exchange 1,869 1,253 234 0 0 0 0 0 159 0 All maturities 22 Gross purchases 12,232 16,690 19,870 1,559 2,903 1,721 425 774 3,452 1,897 23 Gross sales 7,331 6,769 8,369 0 1,175 651 674 0 0 731 24 Redemptions 3,389 1,816 3,000 0 200 600 400 0 0 200 Matched transactions 25 Gross sales 674,000 589,312 543,804 41,509 54,646 39,403 51,983 45,655 39,579 72,123 26 Gross purchases 675,4% 589,647 543,173 37,548 58,753 37,962 51,554 46,370 41,724 69,088 Repurchase agreements 27 Gross purchases 113,902 79,920 130,774 5,332 18,267 3,755 9,649 5,618 4,161 15,229 28 Gross sales 113,040 78,733 130,286 5,332 18,267 2,567 7,035 9,420 4,161 11,525 29 Net change in U.S. government securities 3,869 9,626 8,358 -2,402 5,636 217 1,535 -2,313 5,596 1,636 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 668 494 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 145 108 189 6 1 46 5 6 * 6 Repurchase agreements 33 Gross purchases 28,895 13,320 18,957 831 4,389 1,095 1,997 1,776 739 2,566 34 Gross sales 28,863 13,576 18,638 831 4,389 866 1,225 2,778 739 1,978 35 Net change in federal agency obligations 555 130 130 -6 -1 183 767 -1,008 * 582 BANKERS ACCEPTANCES 36 Repurchase agreements, net 73 -582 1,285 0 0 565 248 -813 0 1,480 37 Total net change in System Open Market Account 4,497 9,175 9,773 -2,408 5,634 966 2,550 -4,134 5,596 3,697 NOTE: Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic NonfinancialS tatistics • February 1983 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1982 1983 1982 1983 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 Nov. Dec. Jan. Consolidated condition statement ASSETS 1 Gold certificate account 11,148 11,148 11,146 11,146 11,144 11,148 11,148 11,144 2 Special drawing rights certificate account 4,418 4,618 4,618 4,618 4,618 4,418 4,618 4,618 3 433 424 441 459 490 436 438 506 Loans 4 To depository institutions 1,813 408 1,823 2,186 489 374 717 354 5 Other 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements 731 0 406 385 148 0 1,480 0 Federal agency obligations 7 Bought outright 8,937 8,937 8,937 8,937 8,928 8,943 8,937 8,928 8 Held under repurchase agreements 511 0 275 48 129 0 588 0 U.S. government securities Bought outright 9 Bills 53,619 56,459 54,392 54,328 51,939 56,494 54,425 51,186 10 Notes 62,626 62,626 62,626 62,626 62,626 62,626 62,626 62,626 11 Bonds 18,556 18,556 18,556 18,556 18,556 18,556 18,556 18,556 12 Total1 134,801 137,641 135,574 135,510 133,121 137,676 135,607 132,368 13 Held under repurchase agreements 3,347 0 2,653 2,009 2,085 0 3,705 0 14 Total U.S. government securities 138,148 137,641 138,227 137,519 135,206 137,676 139,312 132,368 15 Total loans and securities 150,140 146,986 149,668 149,075 144,900 146,993 151,034 141,650 16 Cash items in process of collection 11,567 11,627 9,830 10,121 8,832 11,893 9,807 6,620 17 Bank premises 550 549 549 550 552 546 549 550 Other assets 18 Denominated in foreign currencies2 5,548 5,658 5,690 5,705 5,359 5,649 5,764 5,263 19 All other3 3,855 3,660 3,794 3,974 4,078 3,490 3,577 4,068 20 Total assets 187,659 184,670 185,736 185,648 179,973 184,573 186,935 174,419 LIABILITIES 21 Federal Reserve notes 143,263 142,102 141,015 139,299 138,242 139,989 141,990 137,680 Deposits 22 Depository institutions 27,961 24,982 28,888 29,045 27,431 26,533 26,489 22,683 23 U.S. Treasury—General account 3,620 3,028 2,753 3,468 2,140 2,247 5,033 2,627 24 Foreign—Official accounts 261 238 271 270 217 387 328 366 25 Other 258 659 580 544 599 716 1,033 599 26 Total deposits 32,100 28,907 32,492 33,327 30,387 29,883 32,883 26,275 27 Deferred availability cash items 7,519 8,942 7,371 8,165 6,616 9,492 7,072 5,614 28 Other liabilities and accrued dividends4 1,784 1,806 1,858 1,837 1,705 1,799 2,272 1,708 29 Total liabilities 184,666 181,757 182,736 182,628 176,950 181,163 184,217 171,277 CAPITAL ACCOUNTS 30 Capital paid in 1,356 1,363 1,367 1,374 1,376 1,354 1,359 1,381 31 Surplus 1,278 1,359 1,359 1,359 1,359 1,278 1,359 1,359 32 Other capital accounts 359 191 274 287 288 778 0 402 33 Total liabilities and capital accounts 187,659 184,670 185,736 185,648 179,973 184,573 186,935 174,419 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 106,142 106,197 109,068 110,215 111,362 101,703 106,762 112,040 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) 160,245 159,524 159,540 160,045 159,988 159,408 159,979 159,546 36 LESS: Held by bank5 16,982 17,422 18,525 20,746 21,746 19,419 17,989 21,866 37 Federal Reserve notes, net 143,263 142,102 141,015 139,299 113388,,224422 139,989 141,990 137,680 Collateral for Federal Reserve notes 38 Gold certificate account 11,148 11,148 11,146 11,146 11,144 11,148 11,148 11,144 39 Special drawing rights certificate account 4,418 4,618 4,618 4,618 4,618 4,418 4,618 4,618 40 Other eligible assets 262 4 46 0 0 0 107 0 41 U.S. government and agency securities 127,435 126,332 125,205 123,535 122,480 124,423 126,117 121,918 42 Total collateral 143,263 142,102 141,015 139,299 138,242 139,989 141,990 137,680 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 market exchange rates of foreign-exchange commitments. against receipt of foreign currencies and foreign currencies warehoused for the 5. Beginning September 1980, Federal Reserve notes held by the Reserve Bank U.S. Treasury. Assets shown in this line are revalued monthly at market exchange are exempt from the collateral requirement. rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks; Banking Aggregates A13 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1982 1983 1982 1983 Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 Nov. 30 Dec. 31 Jan. 31 1 Loans—Total 1,813 408 1,823 2,186 489 374 717 354 2 Within 15 days 1,804 392 1,810 2,170 470 356 697 338 3 16 days to 90 days 9 16 13 16 19 18 20 16 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 731 0 406 385 148 0 1,480 0 6 Within 15 days 731 0 406 385 148 0 1,480 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 138,148 137,641 138,227 137,519 135,206 137,676 139,312 132,368 10 Within 15 days' 7,657 4,940 6,319 5,442 5,204 5,515 4,396 3,755 11 16 days to 90 days 27,649 28,964 28,248 28,597 27,945 30,242 31,088 25,796 12 91 days to 1 year 39,108 39,966 39,889 39,709 38,286 38,185 40,057 39,060 13 Over 1 year to 5 years 35,065 35,102 35,102 35,106 35,106 35,065 35,102 35,092 14 Over 5 years to 10 years 12,095 12,095 12,095 12,091 12,091 12,095 12,095 12,091 15 Over 10 years 16,574 16,574 16,574 16,574 16,574 16,574 16,574 16,574 16 Federal agency obligations—Total 9,448 8,937 9,212 8,985 9,057 8,943 9,525 8,928 17 Within 15 days' 653 109 384 256 228 161 730 99 18 16 days to 90 days 564 577 764 665 690 528 564 690 19 91 days to 1 year 1,954 1,974 1,837 1,837 1,957 1,988 1,954 1,957 20 Over 1 year to 5 years 4,780 4,780 4,730 4,730 4,715 4,804 4,780 4,715 21 Over 5 years to 10 years 979 979 979 979 949 944 979 949 22 Over 10 years 518 518 518 518 518 518 518 518 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1982 1983 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 . June July Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS1 1 Total reserves2 32.82 34.26 36.46 37.99 38.58 38.52 38.80 39.57 39.88 40.46 40.89 40.95 2 Nonborrowed reserves 31.95 32.79 34.77 37.35 37.37 37.83 38.29 38.63 39.40 39.84 40.26 40.41 3 Required reserves 32.59 33.93 35.95 37.67 38.27 38.21 38.49 39.18 39.47 40.06 40.39 40.42 4 Monetary base3 132.2 142.5 155.0 162.7 168.8 169.2 170.1 171.9 172.9 173.8 175.1 176.8 Not seasonally adjusted 5 Total reserves2 33.37 34.83 37.11 38.66 38.07 38.43 38.51 39.35 40.00 40.68 41.57 42.24 6 Nonborrowed reserves 32.50 33.35 35.42 38.03 36.86 37.74 38.00 38.42 39.52 40.06 40.94 41.71 7 Required reserves 33.13 34.50 36.59 38.34 37.76 38.12 38.20 38.97 39.59 40.28 41.07 41.72 8 Monetary base3 134.8 145.4 158.0 165.8 168.2 170.0 170.4 171.4 172.9 175.1 178.5 177.4 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS4 9 Total reserves2 41.68 43.91 40.66 41.92 39.57 39.97 40.18 39.96 40.59 41.20 41.85 41.85 10 Nonborrowed reserves 40.81 42.43 38.97 41.29 38.36 39.28 39.66 39.03 40.11 40.58 41.22 41.32 11 Required reserves 41.45 43.58 40.15 41.60 39.26 39.65 39.87 39.58 40.18 40.80 41.35 41.32 12 Monetary base3 144.6 156.2 162.4 169.7 170.4 172.3 172.8 172.3 173.8 176.0 179.3 177.9 For notes see bottom of next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • February 1983 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1982 1979 1980 1981 1982 IItteemm Dec. Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Seasonally adjusted MEASURES' 1 Ml 389.0 414.5 440.9 478.5 455.2 460.5 468.4 475.0 478.5 2 M2 1,518.9 1,656.2 1,822.7 1,999.2 1,946.8 l^S.O' 1,968.1' 1,987.1 1,999.2 3 M3 1,779.4 1,963.1 2,188.1 2,403.8 2,356.4 2,364.2 2,382.1 2,401.1 2,403.8 4 V 2,153.9 2,370.4 2,653.8 n.a. 2,858.3' 2,866.2 n.a. n.a. n.a. SELECTED COMPONENTS 5 Currency 106.1 116.2 123.1 132.7 129.5 130.5 131.2 131.6 132.7 6 Traveler's checks3 3.7 4.2 4.3 4.3 4.4 4.4 4.4 4.4 4.3 7 Demand deposits 262.2 267.2 236.4 240.3 231.1 232.6 236.2 238.3 240.3 8 Other checkable deposits4 16.9 26.9 77.0 101.3 90.2 93.0 96.5 100.7 101.3 9 Savings deposits5 421.7 398.9 343.6 357.6 342.0 342.4 352.6 362.3 357.6 10 Small-denomination time deposits6 652.6 751.7 854.7 904.7 930.6 932.6 923.8 922.9 904.7 11 Large-denomination time deposits7 221.8 257.9 300.3 332.7 339.6 339.3 342.5 340.4 332.7 Not seasonally adjusted MEASURES' 12 Ml 398.8 424.6 451.2 470.5 454.0 460.5 470.2 478.5 490.5 13 M2 1,524.7 1,662.5 1,829.4 2,007.3 1,939.4 1,951.3 1,972.1 1,986.9 2,007.3 14 M3 1,789.2 1,973.9 2,199.9 2,417.5 2,343.1 2,356.8' 2,383.4 2,402.1 2,417.5 15 V 2,162.8 2,380.2 2,653.8 n.a. 2,843.5' 2,855.1 n.a. n.a. n.a. SELECTED COMPONENTS 16 Currency 108.2 118.3 125.4 135.2 130.0 130.2 131.2 132.7 135.2 17 Traveler's checks3 3.5 3.9 4.1 4.0 4.9 4.7 4.5 4.2 4.0 18 Demand deposits 270.1 275.1 243.3 247.3 229.3 232.5 237.2' 240.1 247.3 19 Other checkable deposits4 17.0 27.2 78.4 104.0 89.8 93.2 97.3 101.5 104.0 20 Overnight RPs and Eurodollars8 26.3 35.0 38.1 45.6 44.5 43.3 45.9 47.2 45.6 21 Savings deposits5 420.5 398.0 343.0 357.0 346.1 347.4 357.0 363.7 357.0 22 Small-denomination time deposits6 649.7 748.9 851.7 901.6 920.2 923.9' 921.6 917.3 901.6 Money market mutual funds 23 General purpose and broker/dealer 34.4 61.9 151.2 177.5 180.6 182.5 184.1 186.6 177.5 24 Institution only 9.3 13.9 33.7 43.1 43.1 43.9 44.8 45.3 43.1 25 Large-denomination time deposits7 226.0 262.3 305.4 338.2 333.7 335.7 339.9' 341.6 338.2 1. Composition of the money stock measures is as follows: 3. Outstanding amount of U.S. dollar-denominated traveler's checks of non- Ml: Averages of daily figures for (1) currency outside the Treasury, Federal bank issuers. Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of 4. Includes ATS and NOW balances at all institutions, credit union share draft nonbank issuers; (3) demand deposits at all commercial banks other than those balances, and demand deposits at mutual savings banks. due to domestic banks, the U.S. government, and foreign banks and official 5. Excludes NOW and ATS accounts at commercial banks and thrift instituinstitutions less cash items in the process of collection and Federal Reserve float ; tions and CUSDs at credit unions. and (4) negotiable order of withdrawal (NOW) and automatic transfer service 6. Issued in amounts of less than $100,000 and includes retail RPs. (ATS) accounts at banks and thrift institutions, credit union share draft (CUSD) 7. Issued in amounts of $100,000 or more and are net of the holdings of accounts, and demand deposits at mutual savings banks. domestic banks, thrift institutions, the U.S. government, money market mutual M2: Ml plus savings and small-denomination time deposits at all depository funds, and foreign banks and official institutions. institutions, overnight repurchase agreements at commercial banks, overnight 8. Overnight (and continuing contract) RPs are those issued by commercial Eurodollars held by U.S. residents other than banks at Caribbean branches of banks to other than depository institutions and money market mutual funds member banks and balances of money market mutual funds (general purpose and (general purpose and broker/dealer), and overnight Eurodollars are those issued broker/dealer). by Caribbean branches of member banks to U.S. residents other than depository M3: M2 plus large-denomination time deposits at all depository institutions, institutions and money market mutual funds (general purpose and broker/dealer). term RPs at commercial banks and savings and loan associations, and balances of NOTE: Latest monthly and weekly figures are available from the Board's H.6 institution-only money market mutual funds. (508) release. Back data are available from the Banking Section, Division of 2. L: M3 plus other liquid assets such as term Eurodollars held by U.S. Research and Statistics, Board of Governors of the Federal Reserve System, residents other than banks, bankers acceptances, commercial paper, Treasury Washington, D.C. 20551. bills and other liquid Treasury securities, and U.S. savings bonds. NOTES TO TABLE 1.20 1. Reserve aggregates include required reserves of member banks and Edge al phase-in program of the Monetary Control Act of 1980, the net changes in Act corporations and other depository institutions. Discontinuities associated required reserves of depository institutions have been as follows: Effective Nov. with the implementation of the Monetary Control Act, the inclusion of Edge Act 13, 1980, a reduction of $2.9 billion; Feb. 12, 1981, an increase of $245 million; corporation reserves, and other changes in Regulation D have been removed. Mar. 12, 1981, an increase of $75 million; May 14, 1981, an increase of $245 Beginning with the week ended December 23, 1981, reserve aggregates have been million; Aug. 13, 1981, an increase of $230 million; Sept. 3, 1981, a reduction of reduced by shifts of reservable liabilities to international banking facilities (IBFs). $1.1 billion; Nov. 12, 1981, an increase of $210 million; Jan. 14, 1982, a reduction On the basis of reports of liabilities transferred to IBFs by U.S. commercial banks of $60 million; Feb. 11, 1982 an increase of $170 million; Mar. 4, 1982, an and U.S. agencies and branches of foreign banks, it is estimated that required estimated reduction of $2.0 billion; May 13, 1982, an estimated increase of $150 reserves were lowered on average $10 millon to $20 million in December 1981 and million; Aug. 12, 1982 an estimated increase of $140 million; and Sept. 2, 1982, an $40 million to $70 million in January 1982. estimated reduction of $1.2 billion. Beginning with the week ended December 23, 2. Reserve balances with Federal Reserve Banks (which exclude required 1981, reserve aggregates have been reduced by shifts of reservable liabilities to clearing balances) plus vault cash at institutions with required reserve balances IBFs. On the basis of reports of liabilities transferred to IBFs by U.S. commercial plus vault cash equal to required reserves at other institutions. banks and U.S. agencies and branches of foreign banks, it is estimated that 3. Includes reserve balances and required clearing balances at Federal Reserve required reserves were lowered on average by $60 million to $90 million in Banks in the current week plus vault cash held two weeks earlier used to satisfy December 1981 and $180 million to $230 million in January 1982, mostly reflecting reserve requirements at all depository institutions plus currency outside the U.S. a reduction in reservable Eurocurrency transactions. Treasury, Federal Reserve Banks, the vaults of depository institutions, and surplus vault cash at depository institutions. NOTE. Latest monthly and weekly figures are available from the Board's 4. Reserves of depository institutions series reflect actual reserve requirement H.3(502) statistical release. Back data and estimates of the impact on required percentages with no adjustments to eliminate the effect of changes in Regulation D reserves and changes in reserve requirements are available from the Banking including changes associated with the implementation of the Monetary Control Section, Division of Research and Statistics, Board of Governors of the Federal Act. Includes required reserves of member banks and Edge Act corporations and Reserve System, Washington, D.C. 20551. beginning November 13, 1980, other depository institutions. Under the transition- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A15 1.22 BANK DEBITS AND DEPOSIT TURNOVER Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates. 1982 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11998800'' 11998811'' 11998822'' July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 62,757.8 80,858.7 90,004.8 90,280.7 95,177.9 94,480.0 97,097.0 95,475.9 86,832.4 2 Major New York City banks 25,156.1 33,891.9 37,023.2 36,880.8 39,525.3 37,986.3 42,077.9 38,971.6 31,188.4 3 Other banks 37,601.7 46,966.9 52,981.6 53,399.8 55,652.6 56,493.7 55,019.1 56,504.4 55,644.1 4 ATS-NOW accounts3 159.3 743.4 1,036.4 1,049.9 1,146.2 1,165.4 1,109.4 1,224.6 1,450.9 5 Savings deposits4 670.0 672.7 721.4 773.8 770.7 707.8 637.0 697.1 889.3 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 198.7 285.8 321.0 325.0 341.6 341.0 343.0 333.8 304.3 7 Major New York City banks 803.7 1,105.1 1,257.8 1,265.7 1,424.2 1,282.5 1,298.7 1,263.7 1,023.1 8 Other banks 132.2 186.2 211.1 214.8 221.8 228.3 219.5 221.4 218.3 9 ATS-NOW accounts3 9.7 14.0 14.5 15.3 16.2 15.9 14.7 15.6 18.4 10 Savings deposits4 3.6 4.1 4.5 5.0 5.0 4.6 4.0 4.3 4.7 Not seasonally adjusted DEBITS TO Demand deposits2 11 All insured banks 63,124.4 81,197.9 90,031.9 91,318.9 94,968.5 95,557.1 93,543.3 91,838.3 95,454.9 12 Major New York City banks 25,243.1 34,032.0 37,001.0 37,502.5 39,126.7 39,634.0 39,657.6 36,893.5 35,576.3 13 Other banks 37,881.3 47,165.9 53,030.9 53,816.4 55,841.8 55,923.1 53,885.7 54,944.8 59,878.6 14 ATS-NOW accounts3 158.0 737.6 1,027.3 1,021.0 1,020.5 1,097.3 1,098.0 1,115.0 1,414.7 15 Savings deposits4 669.8 672.9 720.0 778.2 763.7 695.2 672.7 663.3 878.0 DEPOSIT TURNOVER Demand deposits2 16 All insured banks 202.3 286.1 321.6 328.2 346.9 345.3 327.8 319.3 326.2 17 Major New York City banks 814.8 1,114.2 1,263.3 1,305.8 1,472.8 1,362.5 1,220.8 1,198.6 1,152.1 18 Other banks 134.8 186.2 211.5 215.7 225.9 225.8 213.1 213.9 228.8 19 ATS-NOW accounts3 9.7 14.0 14.3 14.8 14.4 15.0 14.5 14.1 17.5 20 Savings deposits4 3.6 4.1 4.5 4.9 4.9 4.4 4.2 4.1 4.7 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSA's that were available through June states and political subdivisions. 1977. Historical data for ATS-NOW and savings deposits are available back to 3. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- July 1977. Back data are available on request from the Banking Section, Division counts authorized for automatic transfer to demand deposits (ATS). ATS data of Research and Statistics, Board of Governors of the Federal Reserve System, availability starts with December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts as well as special club accounts, such as Christmas and vacation clubs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • February 1983 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1981 1982 1981 1982 CCaatteeggoorryy Dec.2 Aug. Sept.3 Oct. Nov. Dec. Dec.2 Aug. Sept.3 Oct. Nov. Dec. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities4 1,316.3 1,383.1 1,389.4 1,397.5 1,398.5 1,412.4 1,326.1 1,377.7 1,391.0 1,402.8 1,405.4 1,422.8 2 U.S. Treasury securities 111.0 117.8 118.2 122.3 126.4 130.9 111.4 116.4 117.8 121.3 125.5 131.4 3 Other securities 231.4 237.1 237.6 237.2 235.8 239.2 232.8 236.4 237.7 237.5 236.3 240.7 4 Total loans and leases4 973.9 1,028.3 1,033.5 1,038.1 1,036.4 11,,004422..33 981.8 11,,002244..99 11,,003355..55 11,,004444..00 11,,004433..55 11,,005500..77 5 Commercial and industrial loans 358.0 387.9 392.5 394.8 392.0 392.4 360.1 385.5 392.1 395.4 393.8 394.7 6 Real estate loans 285.7 298.5 299.5 300.5 301.6 303.0 286.8 298.2 300.1 301.7 302.8 303.9 7 Loans to individuals 185.1 189.5 189.6 190.0 190.3 192.1 186.4 189.7 190.9 191.5 191.5 193.4 8 Security loans 21.9 21.4 22.6 24.2 23.4 24.7 22.7 22.0 22.3 23.9 2233..99 2255..55 9 Loans to nonbank financial institutions 30.2 33.2 32.6 32.4 32.2 31.1 31.2 33.1 32.8 32.7 32.6 32.1 10 Agricultural loans 33.0 36.0 36.3 36.3 36.3 36.3 33.0 36.5 36.8 36.8 36.5 36.3 11 Lease financing receivables 12.7 13.1 13.1 13.1 13.1 13.1 12.7 13.1 13.1 13.1 13.1 13.1 12 All other loans 47.2 48.7 47.4 46.8 47.5 49.6 49.2 46.8 47.5 48.9 49.3 51.7 MEMO: 13 Total loans and securities plus loans sold4'5 1,319.1 1,386.0 1,392.2 1,400.3 1,401.5 1,415.3 1,328.9 1,380.5 1,393.8 1,405.6 1,408.3 1,425.7 14 Total loans plus loans sold4-5 .... 976.7 1,031.1 1,036.4 1,040.9 1,039.3 1,045.2 984.7 1,027.7 1,038.4 1,046.9 1,046.4 1,053.6 15 Total loans sold to affiliates4,5.... 2.8 2.8 2.8 2.8 2.9 2.9 2.8 2.8 2.8 22..88 22..99 22..99 16 Commercial and industrial loans plus loans sold5 360.2 390.2 394.7 397.0 394.3 394.7 362.3 387.8 394.4 397.7 339966..11 339977..00 17 Commercial and industrial loans sold5 2.2 2.3 2.3 2.2 2.3 2.3 2.2 2.3 2.3 2.2 2.3 2.3 18 Acceptances held 8.9 9.1 9.3 9.4 8.4 8.5 9.8 8.8 9.4 9.3 88..77 99..55 19 Other commercial and industrial loans 349.1 378.8 383.1 385.3 383.6 383.9 350.3 376.7 382.7 386.1 385.1 385.2 20 To U.S. addressees6 334.9 365.8 369.8 372.7 371.5 372.5 334.3 364.0 369.6 373.4 372.6 372.8 21 To non-U.S. addressees 14.2 13.0 13.3 12.6 12.1 11.4 16.1 12.8 13.1 12.7 12.6 12.4 22 Loans to foreign banks 19.0 14.6 13.8 13.9 14.0 13.5 20.0 14.1 14.2 14.2 14.1 14.5 1. Includes domestically chartered banks; U.S. branches and agencies of 4. Excludes loans to commercial banks in the United States. foreign banks, New York investment companies majority owned by foreign 5. Loans sold are those sold outright to a bank's own foreign branches, banks, and Edge Act corporations owned by domestically chartered and foreign nonconsolidated nonbank affiliates of the bank, the bank's holding company (if banks. not a bank), and nonconsolidated nonbank subsidiaries of the holding company. 2. Beginning December 1981, shifts of foreign loans and securities from U.S. 6. United States includes the 50 states and the District of Columbia. banking offices to international banking facilities (IBFs) reduced the levels of several items. Seasonally adjusted data that include adjustments for the amounts NOTE. Data are prorated averages of Wednesday estimates for domestically shifted from domestic offices to IBFs are available in the Board's G.7 (407) chartered banks, based on weekly reports of a sample of domestically chartered statistical release (available from Publications Services, Board of Governors of banks and quarterly reports of all domestically chartered banks. For foreignthe Federal Reserve System, Washington, D.C. 20551). related institutions, data are averages of month-end estimates based on weekly 3. Reclassification of loans beginning September 29, 1982, increased real estate reports from large agencies and branches and quarterly reports from all agencies, loans $0.3 billion and decreased nonbank financial loans $0.3 billion. branches, investment companies, and Edge Act corporations engaged in banking. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars 1980 1981 1982 SSoouurrccee Dec. Dec. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total nondeposit funds 1 Seasonally adjusted2 122.0 98.5 83.8 83.4 82.0 84.2 79.8 78.1 71.5 76.3 79.2 78.8 2 Not seasonally adjusted 122.6 98.9 84.8 84.3 85.4 86.3 81.8 82.6 77.2 78.6 84.5 79.3 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 111.1 114.2 113.6 113.1 113.2 113.8 114.3 116.7 114.8 121.9 121.7 124.2 4 Not seasonally adjusted 111.6 114.6 114.6 113.9 116.6 115.9 116.3 121.2 120.5 124.2 126.9 124.7 5 Net balances due to foreign-related institutions, not seasonally adjusted 8.2 -18.6 -32.6 -32.5 -34.0 -32.5 -37.3 -41.4 -46.1 -48.4 -45.4 -48.3 6 Loans sold to affiliates, not seasonally adjusted4 2.7 2.8 2.8 2.8 2.8 3.0 2.8 2.8 2.8 2.8 2.9 2.9 MEMO 7 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted5 -14.7 -22.5 -28.8 -29.8 -29.9 -29.2 -33.0 -34.4 -38.7 -40.4 -38.3 -39.5 8 Gross due from balances 37.5 54.9 56.7 57.4 58.1 57.7 60.6 65.1 68.5 69.8 69.9 72.2 9 Gross due to balances 22.8 32.4 27.9 27.6 28.3 28.5 27.6 30.6 29.8 29.4 31.6 32.7 10 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted6 22.9 3.9 -3.8 -2.7 -4.1 -3.3 -4.4 -7.0 -7.3 -8.0 -7.1 -8.9 11 Gross due from balances 32.5 48.1 50.0 49.1 49.5 50.2 52.6 53.4 54.1 53.9 53.6 54.8 12 Gross due to balances 55.4 52.0 46.2 46.4 45.4 46.9 48.3 46.4 46.7 45.8 46.5 45.9 Security RP borrowings 13 Seasonally adjusted" 64.0 70.0 71.4 71.9 69.0 69.1 69.3 71.9 68.5 75.2 74.4 77.8 14 Not seasonally adjusted 62.3 68.2 70.0 70.4 70.0 68.7 68.9 73.9 71.7 75.0 77.1 75.8 U.S. Treasury demand balances8 15 Seasonally adjusted 9.5 11.8 17.5 13.6 15.3 9.9 8.4 9.2 10.6 13.6 9.8 11.5 16 Not seasonally adjusted 9.0 11.2 15.5 13.8 15.4 10.8 8.3 8.2 12.4 16.5 7.9 10.9 Time deposits, $100,000 or more9 17 Seasonally adjusted 267.0 324.0 332.0 334.4 341.1 349.5 360.1 367.0 366.5 367.4 360.4 346.8 18 Not seasonally adjusted 272.4 330.3 337.2 335.6 340.0 344.6 350.5 359.2 361.6 364.7 361.5 353.5 IBF ADJUSTMENTS FOR SELECTED ITEMS10 22.4 30.8 31.4 31.7 32.0 32.2 32.4 32.4 11111.....77777 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 2222200000.....77777 2222288888.....44444 2222299999.....00000 2222299999.....33333 2222299999.....66666 2222299999.....88888 3333300000.....00000 3333300000.....00000 22 Item 7 33333.....11111 44444.....99999 55555.....00000 55555.....00000 55555.....00000 55555.....11111 55555.....11111 55555.....11111 23 Item 10 1111177777.....66666 2222233333.....66666 2222244444.....00000 2222244444.....33333 2222244444.....66666 2222244444.....77777 2222244444.....99999 2222244444.....99999 1. Commercial banks are those in the 50 states and the District of Columbia participations in pooled loans. Includes averages of daily figures for member with national or state charters plus agencies and branches of foreign banks, New banks and averages of current and previous month-end data for foreign-related York investment companies majority owned by foreign banks, and Edge Act institutions. corporations owned by domestically chartered and foreign banks. 4. Loans initially booked by the bank and later sold to affiliates that are still 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from held by affiliates. Averages of Wednesday data. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. 5. Averages of daily figures for member and nonmember banks. Includes averages of Wednesday data for domestically chartered banks and 6. Averages of daily data. averages of current and previous month-end data for foreign-related institutions. 7. Based on daily average data reported by 122 large banks. 3. Other borrowings are borrowings on any instrument, such as a promissory 8. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at note or due bill, given for the purpose of borrowing money for the banking commercial banks. Averages of daily data. business. This includes borrowings from Federal Reserve Banks and from foreign 9. Averages of Wednesday figures. banks, term federal funds, overdrawn due from bank balances, loan RPs, and 10. Estimated effects of shifts of foreign assets from U.S. banking offices to international banking facilities (IBFs). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic NonfinancialS tatistics • February 1983 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1982 1983 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and securities, excluding interbank 1,285.8 1,292.6 1,300.7 1,315.4 1,313.2 1,318.8 1,337.1 1,343.0 1,347.0 1,370.4 1,370.5 2 Loans, excluding interbank 939.9 947.2 954.3 969.1 966.6 970.6 985.9 988.5 990.4 1,000.8 993.1 3 Commercial and industrial 332.4 336.7 341.9 348.7 346.4 346.2 354.4 355.2 354.8 357.3 355.5 4 Other 607.5 610.5 612.4 620.4 620.3 624.4 631.5 633.3 635.6 643.5 637.6 5 U.S. Treasury securities 114.5 113.0 111.5 113.4 113.4 113.7 115.0 119.4 122.2 129.0 136.1 6 Other securities 231.4 232.4 234.9 232.9 233.2 234.5 236.2 235.1 234.4 240.5 241.3 7 Cash assets, total 164.5 153.6 153.0 165.4 154.5 160.8 157.4 162.1 169.7 184.4 167.9 8 Currency and coin 18.9 19.9 20.0 20.1 20.5 20.3 20.4 20.5 19.0 23.0 20.4 9 Reserves with Federal Reserve Banks 25.7 25.5 21.7 18.2 25.1 26.1 17.0 23.5 22.0 25.4 23.7 10 Balances with depository institutions . 55.9 52.4 54.9 59,6 55.4 58.8 60.4 61.3 64.6 67.6 67.8 11 Cash items in process of collection ... 64.0 55.8 56.3 67.4 53.6 55.5 59.6 56.8 64.1 68.4 55.9 12 Other assets2 219.3 206.6 209.9 223.2 224.2 231.3 234.9 237.0 241.8 265.3 259.9 13 Total assets/total liabilities and capital ... 1,669.5 1,652.9 1,663.6 1,704.0 1,692.0 1,710.9 1,729.3 1,742.1 1,758.6 1,820.1 1,798.2 14 Deposits 1,250.8 1,231.0 1,244.0 1,284.8 1,266.4 1,279.1 1,290.7 1,300.2 1,316.9 1,361.8 1,339.3 15 Demand 338.3 315.5 315.4 345.2 314.4 315.5 323.0 326.5 338.1 363.9 323.7 16 Savings 229.9 226.6 227.6 228.9 227.1 229.5 230.9 238.2 244.9 296.4 360.8 17 Time 682.6 688.9 701.0 710.7 724.8 734.1 736.8 735.4 733.9 701.5 654.7 18 Borrowings 196.4 201.1 195.1 189.7 195.4 196.0 202.8 203.7 198.1 215.1 221.5 19 Other liabilities 94.4 92.4 93.9 96.6 99.1 103.9 103.4 106.2 109.3 109.2 106.1 20 Residual (assets less liabilities) 128.0 128.4 130.6 133.0 131.1 131.9 132.5 132.0 134.3 133.9 131.4 MEMO: 21 U.S. Treasury note balances included in borrowing 10.9 16.6 7.1 7.5 8.0 5.9 17.0 11.7 2.4 10.7 17.0 22 Number of banks 14,709 14,710 14,722 14,736 14,752 14,770 14,785 14,797 14,782 14,787 14,78? ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and securities, excluding interbank 1,345.8 1,350.7 1,358.5 1,374.3 1,371.3 1,376.6 1,397.3 1,401.7 1,413.7 1,429.8 1,427.1 24 Loans, excluding interbank 995.1 1,000.6 1,007.6 1,023.7 1,020.8 1,024.7 1,042.4 1,042.3 1,052.1 1,054.9 1,044.6 25 Commercial and industrial 372.4 374.7 379.3 386.7 384.4 384.5 395.0 393.1 398.3 395.9 392.8 26 Other 622.7 625.8 628.3 637.0 636.4 640.2 647.4 649.2 653.8 659.0 651.8 27 U.S. Treasury securities 117.6 116.1 114.3 116.2 115.7 115.8 117.2 122.7 125.7 132.8 139.6 28 Other securities 233.1 234.1 236.6 234.4 234.8 236.1 237.7 236.7 235.9 242.1 242.9 29 Cash assets, total 178.8 168.1 167.7 180.3 169.3 176.2 173.7 178.7 181.2 200.7 183.8 30 Currency and coin 18.9 19.9 20.0 20.2 20.5 20.4 20.4 20.5 19.0 23.0 20.4 31 Reserves with Federal Reserve Banks 26.9 26.8 23.0 19.6 26.5 27.5 18.4 25.0 23.4 26.8 25.2 32 Balances with depository institutions . 68.0 64.6 67.3 72.2 67.8 71.8 74.2 75.3 74.4 81.4 81.2 33 Cash items in process of collection ... 65.0 56.8 57.3 68.4 54.6 56.5 60.6 57.8 64.3 69.4 56.9 34 Other assets2 295.2 280.3 285.9 300.0 299.4 306.8 310.3 313.9 323.3 341.7 333.1 35 Total assets/total liabilities and capital ... 1,819.9 1,799.1 1,812.1 1,854.7 1,840.1 1,859.6 1,881.3 1,894.2 1,918.2 1,972.2 1,944.0 36 Deposits 1,295.0 1,272.7 1,286.2 1,325.8 1,307.3 1,321.7 1,335.5 1,345.2 1,358.1 1,409.7 1,384.1 37 Demand 350.8 327.9 327.9 357.4 326.8 327.7 335.1 338.9 344.9 376.2 335.7 38 Savings 230.2 226.9 227.8 229.1 227.4 229.7 231.1 238.5 245.1 296.7 361.2 39 Time 714.0 717.9 730.4 739.3 753.1 764.3 769.2 767.8 768.0 736.7 687.2 40 Borrowings 260.0 260.8 255.3 253.2 260.0 260.0 267.6 268.3 267.0 278.3 283.4 41 Other liabilities 135.0 135.3 138.2 140.8 139.8 144.1 143.8 146.9 156.6 148.4 143.2 42 Residual (assets less liabilities) 129.9 130.3 132.5 134.9 133.0 133.8 134.4 133.9 136.6 135.8 133.3 MEMO: 43 U.S. Treasury note balances included in borrowing 10.9 16.6 7.1 7.5 8.0 5.9 17.0 11.7 2.4 10.7 17.0 44 Number of banks 15,214 15,215 15,235 15,235 15,271 15,289 15,311 15,330 15,318 15,329 15,329 1. Domestically chartered commercial banks include all commercial banks in NOTE. Figures are partly estimated. They include all bank-premises subsidiarthe United States except branches of foreign banks; included are member and ies and other significant majority-owned domestic subsidiaries. Data for domestinonmember banks, stock savings banks, and nondeposit trust companies. cally chartered commercial banks are for the last Wednesday of the month. Data 2. Other assets include loans to U.S. commercial banks. for other banking institutions are estimates made on the last Wednesday of the 3. Commercial banking institutions include domestically chartered commercial month based on a weekly reporting sample of foreign-related institutions and banks, branches and agencies of foreign banks, Edge Act and Agreement quarter-end condition report data. corporations, and New York State foreign investment corporations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A19 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 1982 1983 Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29p Jan. 5p Jan. 12? Jan. 19? Jan. 26? 1 Cash items in process of collection 58,943 52,754 61,362 56,097 54,686 54,325 48,913 49,770 44,373 2 Demand deposits due from banks in the United States. 8,210 7,274 8,428 8,532 9,424 8,713 7,493 8,162 7,242 3 All other cash and due from depository institutions ... 35,003 31,847 38,714 34,124 38,553 35,759 38,807 39,369 37,471 4 Total loans and securities 648,709 651,589 651,576 654,636 655,562 671,742 661,699 658,729 653,892 Securities 5 U.S. Treasury securities 44,152 45,093 43,445 44,308 44,586 48,816 47,182 46,129 46,738 6 Trading account 9,411 9,716 7,817 8,154 7,856 10,720 9,215 8,204 8,436 7 Investment account, by maturity 34,740 35,376 35,627 36,154 36,730 38,096 37,967 37,925 38,302 8 One year or less 10,897 11,322 11,346 11,657 12,097 12,261 11,861 11,671 11,600 9 Over one through five years 21,816 21,933 22,171 22,363 22,491 23,022 23,270 23,385 23,947 10 Over five years 2,027 2,121 2,110 2,134 2,142 2,813 2,836 2,868 2,754 11 Other securities 77,899 79,797 79,400 80,242 81,277 84,902 82,175 82,271 81,783 12 Trading account 4,643 6,421 5,695 5,813 5,877 7,447 4,672 4,512 3,897 13 Investment account 73,256 73,376 73,705 74,429 75,400 77,454 77,503 77,758 77,887 14 U.S. government agencies 14,935 15,017 15,140 15,272 15,391 16,050 16,077 16,297 16,196 15 States and political subdivisions, by maturity 55,375 55,497 55,676 56,218 57,034 58,300 58,258 58,260 58,399 16 One year or less 6,872 6,980 6,882 7,035 7,162 7,416 7,250 7,268 7,176 17 Over one year 48,503 48,517 48,794 49,183 49,872 50,884 51,008 50,993 51,223 18 Other bonds, corporate stocks and securities 2,946 2,862 2,889 2,939 2,975 3,104 3,168 3,201 3,292 Loans 19 Federal funds sold1 40,984 43,259 42,708 41,729 41,566 45,581 45,131 42,585 40,519 20 To commercial banks 28,815 29,763 30,395 28,543 29,253 33,435 32,475 30,666 28,620 21 To nonbank brokers and dealers in securities 9,221 10,184 9,301 10,181 9,347 9,257 9,506 8,893 8,561 22 To others 2,949 3,312 3,012 3,004 2,966 2,888 3,150 3,027 3,338 23 Other loans, gross 498,853 496,643 499,208 501,470 501,095 505,583 500,420 500,945 498,050 24 Commercial and industrial 217,027 215,834 215,893 216,621 216,880 219,464 217,265 218,315 216,409 25 Bankers acceptances and commercial paper 4,812 4,500 5,276 5,840 6,075 5,418 5,146 5,349 4,951 26 All other 212,214 211,334 210,617 210,781 210,805 214,047 212,119 212,966 211,458 27 U.S. addressees 205,337 204,480 203,714 203,972 203,988 207,360 205,423 206,309 204,809 28 Non-U.S. addressees 6,878 6,854 6,903 6,809 6,817 6,687 6,696 6,657 6,649 29 Real estate 131,987 131,966 132,132 132,310 132,324 133,469 133,371 133,320 133,336 30 To individuals for personal expenditures 73,988 74,052 74,564 75,016 75,551 76,533 76,275 76,037 75,880 To financial institutions 31 Commercial banks in the United States 7,460 7,275 7,456 8,112 7,804 8,119 7,842 7,687 7,439 32 Banks in foreign countries 7,359 7,291 7,370 7,254 7,506 7,084 7,167 6,864 7,052 33 Sales finance, personal finance companies, etc. ... 11,179 10,872 10,834 10,540 10,693 10,494 10,359 10,406 10,331 34 Other financial institutions 15,838 16,018 15,968 15,926 16,231 16,369 16,350 15,985 16,053 35 To nonbank brokers and dealers in securities 8,594 8,632 9,763 9,613 8,321 7,855 7,279 7,415 6,643 36 To others for purchasing and carrying securities2 ... 3,033 3,015 3,108 2,931 2,902 2,689 2,660 2,607 2,622 37 To finance agricultural production 6,362 6,330 6,327 6,222 6,290 6,359 6,356 6,311 6,287 38 All other 16,026 15,357 15,792 16,925 16,591 17,145 15,495 15,998 15,999 39 LESS: Unearned income 5,523 5,508 5,505 5,498 5,451 5,576 5,604 5,584 5,560 40 Loan loss reserve 7,657 7,695 7,679 7,615 7,510 7,563 7,605 7,616 7,638 41 Other loans, net 485,673 483,440 486,024 488,357 488,133 492,444 487,211 487,744 484,852 42 Lease financing receivables 11,038 11,057 11,035 11,052 11,136 11,256 11,244 11,233 11,223 43 All other assets 136,150 135,652 137,504 138,653 141,168 145,975 149,332 144,625 143,026 44 Total assets 898,052 890,173 908,619 903,094 910,531 927,771 917,487 911,888 897,228 Deposits 45 Demand deposits 190,848 181,304 195,136 188,733 189,652 192,966 176,842 175,373 165,588 46 Mutual savings banks 716 678 881 660 627 872 759 736 607 47 Individuals, partnerships, and corporations 143,159 134,561 144,032 140,189 139,364 144,936 136,126 131,200 126,148 48 States and political subdivisions 5,238 4,565 5,586 5,570 5,487 6,035 4,888 5,172 5,141 49 U.S. government 1,064 1,907 6,138 2,016 1,767 3,033 2,212 4,084 2,086 50 Commercial banks in the United States 23,374 20,173 22,045 22,818 23,613 23,550 18,653 19,749 18,415 51 Banks in foreign countries 6,562 6,304 6,164 6,584 6,650 5,480 5,799 5,542 5,739 52 Foreign governments and official institutions 1,084 1,069 943 1,077 1,310 1,057 1,140 998 1,053 53 Certified and officers' checks 9,653 12,046 9,346 9,820 10,833 8,004 7,265 7,891 6,398 54 Time and savings deposits 400,640 401,109 401,661 405,404 406,773 412,367 415,185 413,494 413,380 55 Savings 85,764 86,406 95,319 104,685 110,611 123,752 132,060 137,805 141,645 56 Individuals and nonprofit organizations 82,287 82,930 90,793 98,415 103,180 114,241 121,190 125,766 128,730 57 Partnerships and corporations operated for profit . 2,901 2,928 3,795 5,572 6,635 8,600 9,899 10,899 11,789 58 Domestic governmental units 556 530 710 674 765 865 926 1,078 1,029 59 All other 20 18 20 25 30 46 44 61 97 60 Time 314,876 314,703 306,342 300,719 296,162 288,615 283,126 275,689 271,736 61 Individuals, partnerships, and corporations 276,065 275,937 268,249 262,593 257,937 251,484 246,002 239,411 235,551 62 States and political subdivisions 20,892 20,883 20,497 20,582 20,636 20,026 20,273 20,114 20,294 63 U.S. government 570 580 570 567 644 614 568 547 398 64 Commercial banks in the United States 12,534 12,469 12,240 12,342 12,287 11,948 11,874 11,237 11,178 65 Foreign governments, official institutions, and banks 4,815 4,834 4,786 4,635 4,658 4,542 4,408 4,380 4,314 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 1,642 1,188 2,917 378 1,123 50 1,535 1,850 50 67 Treasury tax-and-loan notes 5,704 892 535 7,067 7,938 9,449 8,764 10,554 12,972 68 All other liabilities for borrowed money3 150,946 158,314 159,365 154,264 158,222 166,707 168,379 166,655 160,411 69 Other liabilities and subordinated notes and debentures 90,546 89,456 91,360 90,010 89,411 87,265 87,760 85,129 85,907 70 Total liabilities 840,326 832,262 850,973 845,857 853,119 868,805 858,465 853,056 838,309 71 Residual (total assets minus total liabilities)4 57,726 57,911 57,646 57,237 57,412 58,966 59,022 58,832 58,919 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 analytic uses. 3. Includes federal funds purchased and securities sold under agreements to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • February 1983 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 1982 1983 Account Dec. 1 Dec. 15 Dec. 22 Jan. 26p 1 Cash items in process of collection 55,815 50,189 58,121 52,851 51,767 51,057 46,024 46,761 41,839 2 Demand deposits due from banks in the United States. 7,452 6,630 7,697 7,682 8,577 9,928 6,836 7,426 6,496 3 All other cash and due from depository institutions ... 32,152 29,362 35,783 31,318 35,695 32,858 35,734 36,149 34,348 4 Total loans and securities 606,457 608,763 608,691 611,680 611,936 624,963 615,485 612,874 608,496 Securities 5 U.S. Treasury securities 40,388 41,253 39,637 40,499 40,746 44,793 43,154 42,068 42,782 6 Trading account 9,285 9,588 7,734 8.073 7,782 10,621 9,112 8,084 8,328 7 Investment account, by maturity 31,102 31,664 31,903 32,426 32,964 34,172 34,042 33,984 34,454 8 One year or less 9,734 10,013 10,017 10,300 10,701 10,722 10,372 10,189 10,177 9 Over one through five years 19,605 19,797 20,042 20,257 20,399 20,919 21,116 21,208 21,713 10 Over five years 1,763 1,855 1,844 1,868 1,863 2,532 2,555 2,588 2,563 11 Other securities 71,480 73,389 72,852 73,609 74,538 77,744 75,001 75,039 74,386 12 Trading account 4,461 6,247 5,486 5,583 5,649 7,278 4,515 4,303 3,730 13 Investment account 67,019 67,143 67,366 68,026 68,889 70,467 70,486 70,736 70,656 14 U.S. government agencies 13.703 13,780 13,854 14,017 14,148 14,639 14,643 14,858 14,778 15 States and political subdivisions, by maturity 50,571 50,703 50,829 51,287 51,996 52,962 52,927 52,930 52,847 16 One year or less 6,237 6,349 6,227 6,373 6,452 6,660 6,509 6,524 6,432 17 Over one year 44,334 44,354 44,602 44,914 45,544 46,302 45,418 46,406 46,415 18 Other bonds, corporate stocks and securities 2,745 2,660 2,683 2,723 2,745 2,865 2,916 2,948 3,031 Loans 19 Federal funds sold1 36,287 38,024 37,781 36,881 36,373 39,209 39,242 37,195 35,263 20 To commercial banks 24.704 25,222 26.141 24,410 24,889 27,888 27,517 26,128 24,078 21 To nonbank brokers and dealers in securities 8,731 9,683 8,759 9,576 8,656 8,567 8,661 8,119 7,964 22 To others 2,852 3,119 2,882 2,894 2,828 2,754 3,065 2.948 3,220 23 Other loans, gross 470,484 468,301 470,606 472,813 472,254 475,324 470,266 470,742 468,231 24 Commercial and industrial 205,989 204,813 204,812 205,508 205,698 207,907 205,774 206,813 205,279 25 Bankers acceptances and commercial paper 4,488 4,179 4,952 5,502 5,728 5,018 4,708 4,921 4,554 26 All other 201,501 200,634 199,860 200,006 199,970 202,889 201,065 201,892 200,725 27 U.S. addressees 194,748 193,904 193,087 193,317 193,273 196,332 194,484 195,346 194,181 28 Non-U.S. addressees 6,754 6,730 6,774 6,689 6,697 6,556 6,582 6,546 6,544 29 Real estate 124,583 124,585 124,714 124,894 124,931 125,567 125,433 125,350 125,398 30 To individuals for personal expenditures 66,073 66,139 66,587 66,976 67,454 68,030 67,813 67,600 67,456 To financial institutions 31 Commercial banks in the United States 7,322 7,117 7,299 7,935 7,621 7,947 7,664 7,500 7.240 32 Banks in foreign countries 7,285 7,224 7,283 7,186 7,440 7,020 7,099 6,794 6,978 33 Sales finance, personal finance companies, etc. ... 10,997 10,690 10,658 10,357 10,503 10,307 10,191 10,236 10,167 34 Other financial institutions 15,388 15,556 15,496 15,466 15,763 15,820 15,782 15,401 15,456 35 To nonbank brokers and dealers in securities 8,560 8,598 9,727 9,581 8,268 7,786 7,237 7,377 6,610 36 To others for purchasing and carrying securities2 ... 2,807 2,785 2,884 2,706 2,681 2,457 2,429 2,374 2,390 37 To finance agricultural production 6,197 6,167 6,164 6,056 6,125 6,177 6,169 6,129 6,084 38 All other 15,283 14,629 14,981 16,148 15,770 16,304 14,675 15,166 15,173 39 LESS: Unearned income 4,906 4,892 4,888 4,882 4,836 4,942 4,969 4.949 4,926 40 Loan loss reserve 7,275 7,312 7,296 7,240 7,138 7,165 7,210 7,221 7.241 41 Other loans, net 458,303 456,097 458,422 460,691 460,280 463,216 458,087 458,571 456,064 42 Lease financing receivables 10,669 10,682 10,643 10,660 10,743 10,857 10,844 10,833 10,824 43 All other assets 132,198 131,685 133,486 134,450 136,889 141,792 145,192 140,472 139,006 44 Total assets 844,744 837,311 854,421 848,641 855,606 869,455 860,116 854,520 841,011 Deposits 45 Demand deposits 177,957 169,150 181,911 175,663 176,773 178,681 164,010 162,716 153,477 46 Mutual savings banks 696 659 860 638 610 843 736 715 587 47 Individuals, partnerships, and corporations 133,169 125,008 134,026 130,109 129,320 134,120 126,178 121,675 116,817 48 States and political subdivisions 4,704 4,048 4,970 4,867 4,870 5,341 4,276 4,607 4,538 49 U.S. government 960 1,758 5,653 1,827 1,619 2,717 1,946 3,445 1,887 50 Commercial banks in the United States 21,610 18,671 20,409 21,170 22,003 21,642 17,059 18,197 16,836 51 Banks in foreign countries 6,514 6,262 6,091 6,541 6,604 5,434 5,758 5,506 5,695 52 Foreign governments and official institutions 1,082 1,068 936 1.074 1,309 1,055 1,139 994 1,050 53 Certified and officers' checks 9,220 11,677 8,965 9,437 10,439 7,528 6,918 7,576 6,068 54 Time and savings deposits 375,664 375,878 376,026 379,426 380,614 384,499 387,140 385,496 385,526 55 Savings 79,108 79,696 87,957 96,700 102,248 114,077 121,873 127,332 131,008 56 Individuals and nonprofit organizations 75,899 76,492 83,912 90,908 95,391 105,374 111,922 116,253 119,127 57 Partnerships and corporations operated for profit . 2,666 2,691 3,477 5,132 6,103 7,840 9,039 10,003 10,821 58 Domestic governmental units 523 495 548 635 724 818 868 1,020 968 59 All other 20 17 20 25 30 46 44 56 92 60 Time 2%,556 296,183 288,069 282,726 278,367 270,422 265,266 258,164 254,518 61 Individuals, partnerships, and corporations 259,951 259,656 252,187 246,775 242,374 235,589 230,446 224,147 220,533 62 States and political subdivisions 18,962 18,914 18,577 18,725 18,729 18,033 18,280 18,152 18,400 63 U.S. government 512 512 502 498 576 545 502 483 334 64 Commercial banks in the United States 12,316 12,268 12,016 12,092 12,030 11,711 11,630 11,001 10,936 65 Foreign governments, official institutions, and banks 4,815 4,834 4,786 4,635 4,658 4,542 4,408 4,380 4,314 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 1,642 1,188 2,853 378 1,025 50 1,475 1,850 50 67 Treasury tax-and-loan notes 5,410 818 483 6,646 7,391 8,983 8,283 9,893 12,239 68 All other liabilities for borrowed money3 141,491 148,591 149,789 145,047 148,841 156,901 158,334 156,524 150,776 69 Other liabilities and subordinated notes and debentures 88,380 87,303 89,217 87,821 87,138 85,094 85,587 82,928 83,736 70 Total liabilities 790,544 782,928 800,278 794,980 801,782 814,208 804,828 799,407 785,805 71 Residual (total assets minus total liabilities)4 54,199 54,382 54.142 53,661 53,824 55,247 55,288 55,113 55,205 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 analytic uses. 3. Includes federal funds purchased and securities sold under agreement to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1982 1983 AAccccoouunntt Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29p Jan. 5p Jan. 12P Jan. 19? Jan. 26p 1 Cash items in process of collection 20,816 21,325 21,868 18,715 18,515 15,296 15,459 17,014 14,632 7 Demand deposits due from banks in the United States.. 1,678 1,560 1,431 1,392 1,513 1,271 1,424 1,881 1,485 3 All other cash and due from depository institutions .... 5,214 6,466 8,068 7,179 8,117 9,438 8,864 7,142 8,497 4 Total loans and securities1 147,775 147,579 148,016 147,748 146,974 145,937 145,994 146,775 143,222 Securities S 7 Investment account, by maturity 8,498 8,655 8,660 8,646 8,686 8,750 8,754 8,715 8,868 8 One year or less 1,271 1,286 1,286 1,285 1,282 1,288 1,287 1,276 1,249 9 Over one through five years 6,794 6,838 6,840 6,827 6,870 6,929 6,934 6,910 7,088 10 Over five years 432 531 534 534 534 534 534 529 531 11 1"> 13 Investment account 13,283 13,266 13,367 13,634 13,774 14,058 13,983 14,000 13,980 14 U.S. government agencies 1,693 1,663 1,636 1,604 1,577 1,542 1,530 1,512 1,496 15 States and political subdivisions, by maturity 10,746 10,845 10,965 11,267 11,435 11,748 11,693 11,715 11,700 16 One year or less 1,202 1,309 1,333 1,485 1,390 1,572 1,534 1,506 1,529 17 Over one year 9,543 9,535 9,631 9,782 10,045 10,175 10,159 10,209 10,172 18 Other bonds, corporate stocks and securities 845 759 766 762 762 767 760 772 783 Loans 19 Federal funds sold3 11,319 11,484 11,799 10,311 11,344 9,190 11,178 11,331 9,347 70 To commercial banks 5,944 5,444 6,515 4,170 6,003 4,303 5,748 6,285 3,882 ?1 To nonbank brokers and dealers in securities 4,190 4,946 3,818 4,653 3,756 3,422 3,774 3,534 3,715 ??. To others 1,186 1,094 1,466 1,488 1,586 1,464 1,656 1,511 1,750 73 Other loans, gross 118,583 118,081 118,092 119,068 117,074 117,740 115,896 116,558 114,854 74 Commercial and industrial 61,644 61,316 61,024 61,003 60,750 61,510 60,988 61,360 60,684 25 Bankers acceptances and commercial paper 1,257 1,121 1,322 1,666 1,619 1,371 1,368 1,202 1,221 76 All other 60,386 60,194 59,703 59,337 59,059 60,139 59,620 60,157 59,463 77 U.S. addressees 58,845 58,679 58,126 57,875 57,614 58,721 58,167 58,706 58,033 78 Non-U.S. addressees 1,541 1,516 1,577 1,462 1,445 1,418 1,453 1,451 1,430 79 Real estate 18,831 18,879 18,878 18,990 19,086 19,040 18,945 18,948 19,010 30 To individuals for personal expenditures 11,495 11,519 11,597 11,668 11,723 11,719 11,622 11,571 11,525 To financial institutions 31 Commercial banks in the United States 2,655 2,616 2,588 3,098 2,931 3,339 3,071 2,735 2,700 37. Banks in foreign countries 3,031 2,964 2,892 2,901 3,191 2,804 2,826 2,557 2,743 33 Sales finance, personal finance companies, etc 4,880 4,685 4,609 4,360 4,406 4,430 4,389 4,428 4,404 34 Other financial institutions 4,848 4,837 4,827 4,712 4,818 4,792 4,756 4,757 4,858 35 To nonbank brokers and dealers in securities 5,737 5,806 6,258 6,208 4,655 4,418 4,534 5,080 3,725 36 To others for purchasing and carrying securities4 .... 944 910 940 954 928 713 687 671 684 37 To finance agricultural production 378 376 382 372 387 381 383 412 385 38 All other 4,139 4,173 4,096 4,801 4,200 4,592 3,696 4,039 4,135 39 LESS: Unearned income 1,475 1,469 1,474 1,478 1,474 1,449 1,453 1,452 1,447 40 Loan loss reserve 2,433 2,438 2,428 2,434 2,430 2,350 2,365 2,378 2,381 41 Other loans, net 114,675 114,174 114,190 115,157 113,170 113,940 112,079 112,728 111,027 47 Lease financing receivables 2,030 2,033 2,035 2,037 2,054 2,060 2,067 2,066 2,066 43 All other assets5 56,795 57,050 57,190 58,519 58,880 63,395 63,417 60,110 58,906 44 Total assets 234,308 236,012 238,608 235,589 236,053 237,398 237,226 234,989 228,809 Deposits 45 Demand deposits 55,691 54,020 56,252 53,672 53,766 51,308 48,075 48,650 45,179 46 Mutual savings banks 349 321 464 312 266 400 401 380 271 47 Individuals, partnerships, and corporations 37,444 34,271 38,151 34,615 33,504 35,525 34,017 32,717 31,396 48 States and political subdivisions 552 500 626 778 516 838 599 772 572 49 U.S. government 148 473 1,507 483 442 700 599 1,028 574 50 Commercial banks in the United States 6,246 4,901 5,024 5,796 6,708 5,608 3,764 4,799 4,324 51 Banks in foreign countries 5,140 4,792 4,737 5,235 5,403 4,166 4,514 4,235 4,382 52 Foreign governments and official institutions 876 866 718 876 1,086 820 913 791 837 53 Certified and officers' checks 4,934 7,896 5,026 5,576 5,840 3,249 3,267 3,929 2,824 54 Time and savings deposits 74,449 74,994 74,740 74,964 74,722 73,734 75,110 74,667 75,036 55 Savings 10,672 10,789 11,527 13,009 14,040 15,518 17,128 18,292 19,270 56 Individuals and nonprofit organizations 10,339 10,460 11,190 12,388 13,203 14,538 16,018 17,060 17,908 57 Partnerships and corporations operated for profit .. 237 239 246 526 720 859 984 1,070 1,187 58 Domestic governmental units 94 88 89 94 116 110 122 154 170 59 All other 1 1 1 1 1 10 3 8 6 60 Time 63,778 64,205 63,213 61,956 60,682 58,216 57,982 56,375 55,766 61 Individuals, partnerships, and corporations 53,282 53,665 53,135 51,850 50,702 48,689 48,226 46,626 46,049 67. States and political subdivisions 2,460 2,445 2,337 2,326 2,281 2,037 2,138 2,194 2,356 63 U.S. government 201 202 206 206 206 210 235 235 85 64 Commercial banks in the United States 5.840 5,877 5,581 5,685 5,602 5,416 5,592 5,514 5,476 65 Foreign governments, official institutions, and banks 1,994 2,016 1,954 1,888 1,892 1,864 1,789 1,805 1,801 Liabilities for borrowed money 66 1,150 675 970 355 150 1,075 1,545 67 Treasury tax-and-loan notes 1,557 197 56 1,956 2,154 1,839 2,090 2,666 3,069 68 All other liabilities for borrowed money6 48,935 54,283 53,049 52,630 52,862 57,382 57,557 55,760 53,225 69 Other liabilities and subordinated notes and debentures . 33,920 33,194 34,976 33,842 34,078 34,346 34,454 32,818 33,493 70 Total liabilities 215,702 217,362 220,044 217,420 217,732 218,609 218,360 216,106 210,003 71 Residual (total assets minus total liabilities)7 18.606 18,650 18,564 18,169 18,322 18,789 18,866 18,882 18,805 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

A22 Domestic NonfinancialS tatistics • February 1983 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1983 Dec. 8 Dec. 15 Dec. 22 Dec. 29? Jan. 5*> Jan. 12? Jan. 19p Jan. 26P BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross) and securities adjusted1 625,613 627,754 626,909 631,119 631,466 643,328 634,591 633,577 631,030 2 Total loans (gross) adjusted1 503,562 502,864 504,065 506,569 505,603 509,610 505,234 505,178 502,509 3 Demand deposits adjusted2 107,467 106,470 105,587 107,795 109,585 112,058 107,064 101,771 100,713 4 Time deposits in accounts of $100,000 or more .... 200,000 199,481 194,249 191,147 187,825 180,283 177,066 171,252 169,290 5 Negotiable CDs 140,933 139,843 136,407 134,636 132,340 126,340 124,454 119,939 118,865 6 Other time deposits 59,067 59,637 57,843 56,511 55,484 53,943 52,611 51,313 50,425 7 Loans sold outright to affiliates3 2,982 2,952 2,937 2,952 2,891 2,917 2,974 2,998 2,965 8 Commercial and industrial 2,375 2,329 2,319 2,254 2,236 2,261 2,308 2,336 2,311 9 Other 607 623 618 697 655 656 666 661 654 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and securities adjusted1 586,613 588,629 587,435 591,478 591,400 601,236 592.483 591,416 589,345 11 Total loans (gross) adjusted1 474,745 473,986 474,947 477,370 476,117 478,698 474,328 474,309 472,176 12 Demand deposits adjusted2 99,572 98,532 97,724 99,807 101,384 103,264 98,981 94,306 92,915 13 Time deposits in accounts of $100,000 or more 190,762 190,130 185,038 181,943 178,745 171,353 168,299 162,717 160,941 14 Negotiable CDs 135,510 134,403 131,062 129,319 127,051 121,211 119.484 115,164 114,245 15 Other time deposits 55,252 55,726 53,977 52,624 51,694 50,142 48,815 47,552 46,696 16 Loans sold outright to affiliates3 2,915 2,884 2,876 2,882 2,823 2,848 2,905 2,928 2,894 17 Commercial and industrial 2,318 2,270 2,268 2,195 2,179 2,202 2,250 2,281 2,253 18 Other 597 614 687 644 646 655 647 640 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted14 143,084 143,427 142,816 144,391 141,945 142,095 140,993 141,585 140,467 20 Total loans (gross) adjusted1 121,303 121,505 120,788 122,111 119,485 119,287 118,256 118,869 117,619 21 Demand deposits adjusted2 28,480 27,321 27,854 28,678 28,101 29,704 28,253 25,809 25,649 22 Time deposits in accounts of $100,000 or more 49,080 49,395 48,715 47,838 46,772 44,500 44,688 43,336 43,080 23 Negotiable CDs 37,249 37,328 37,097 36,576 35,612 33,327 33,699 32,444 32,424 24 Other time deposits 11,831 12,067 11,618 11,262 11,159 11,173 10,988 10,892 10,656 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, banks. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 2. All demand deposits except U.S. government and domestic banks less cash not a bank), and nonconsolidated nonbank subsidiaries of the holding company, items in process of collection. 4. Excludes trading account securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A23 1.291 LARGE WEEKLY REPORTING BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1982 1983 AAccccoouunntt Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29p Jan. 5p Jan. 12P Jan. 19? Jan. 26P 1 Cash and due from depository institutions. 7,440 7,313 7,278 7,259 7,369 7,575 7,329 7,014 7,042 2 Total loans and securities 45,478 45,119 44,718 46,730 45,249 43,938 44,055 42,707 42,791 3 U.S. Treasury securities 2,818 2,881 2,804 2,974 3,107 3,340 3,144 2,970 2,900 4 Other securities 826 831 850 845 874 893 915 913 888 5 Federal funds sold1 3,079 2,449 2,157 3,410 2,617 1,982 2,622 2,289 2,861 6 To commercial banks in United States .. 2,581 2,220 2,042 3,000 2,243 1,786 2,533 2,130 2,785 7 To others 498 229 115 409 373 197 89 158 76 8 Other loans, gross 38,754 38,958 38,906 39,500 38,650 37,722 37,374 36,536 36,142 9 Commercial and industrial 18,976 19,013 19,036 19,319 19,003 19,074 1199,,115544 1188,,779977 1188,,440088 10 Bankers acceptances and commercial paper 2,809 2,734 2,842 2,910 2,816 2,741 2,847 2,701 2,717 11 All other 16,168 16,278 16,195 16,408 16,187 16,333 16,307 16,096 15,691 12 U.S. addressees 14,263 14,351 14,244 14,381 14,217 14,288 14,328 14,143 13,761 13 Non-U.S. addressees 1,905 1,927 1,951 2,027 1,970 2,045 1,979 1,953 1,930 14 To financial institutions 15,599 15,575 15,604 15,861 15,463 14,889 14,544 14,098 13,963 15 Commercial banks in United States... 12,600 12,577 12,422 12,708 12,285 11,684 11,466 11,045 10,902 16 Banks in foreign countries 2,342 2,334 2,602 2,573 2,622 2,626 2,479 2,464 2,497 17 Nonbank financial institutions 657 664 581 579 556 578 600 589 564 18 For purchasing and carrying securities .. 345 480 530 555 480 187 166 175 240 19 All other 3,834 3,890 3,735 3,765 3,705 33,,557722 33,,551111 33,,446666 33,,553300 20 Other assets (claims on nonrelated parties) 12,128 12,406 12,349 12,404 12,556 11,478 11,011 10,928 10,974 21 Net due from related institutions 13,223 13,850 13,043 13,694 14,328 14,474 15,100 14,928 14,416 22 Total assets 78,268 78,688 77,387 80,086 79,502 77,466 77,495 75,578 75,223 23 Deposits or credit balances2 25,060 25,097 25,104 26,729 26,473 24,718 24,116 23,686 23,755 24 Credit balances 275 293 254 251 206 196 184 221 226 25 Demand deposits 2,463 2,298 1,999 2,430 2,104 11,,667766 11,,990044 11,,889977 11,,776644 26 Individuals, partnerships, and corporations 1,165 851 849 989 871 755 882 874 738 27 Other 1,298 1,446 1,150 1,441 1,233 921 1,022 1,023 1,026 28 Total time and savings 22,322 22,506 22,851 24,048 24,163 2222,,884466 2222,,002288 2211,,556688 2211,,776655 29 Individuals, partnerships, and corporations 19,209 19,379 19,631 20,670 20,929 19,763 19,065 18,593 18,913 30 Other 3,113 3,128 3,220 3,379 3,234 3,083 2,963 2,975 2,852 31 Borrowings3 32,016 33,030 31,590 32,383 32,343 33,612 34,483 32,356 31,859 32 Federal funds purchased4 8,678 9,448 8,182 8,603 8,356 10,350 11,330 10,138 99,,330088 33 From commercial ba;nks in United States 7,462 8,049 6,906 7,122 6,877 8,834 9,968 8,981 8,242 34 From others 1,216 1,339 1,277 1,481 1,479 1,517 1,362 1,156 1,066 35 Other liabilities for borrowed money.... 23,337 23,582 23,407 23,780 23,987 23,261 23,154 22,218 22,551 36 To commercial banks in United States 20,719 21,262 20,508 20,932 21,198 20,578 20,404 19,508 20,025 37 To others 2,618 2,320 2,899 2,848 2,788 2,684 2,749 2,711 2,526 38 Other liabilities to nonrelated parties 11,878 11,956 12,078 12,203 12,196 11,292 12,122 11,929 11,731 39 Net due to related institutions 9,314 8,605 8,615 8,770 8,490 7,844 6,773 7,606 7,878 40 Total liabilities 78,268 78,688 77,387 80,086 79,502 77,466 77,495 75,578 75,223 MEMO 41 Total loans (gross) and securities adjusted' 30,296 30,321 30,254 31,020 30,720 30,468 30,056 29,532 29,104 42 Total loans (gross) adjusted5 26,652 26,610 26,600 27,201 26,738 26,235 25,998 25,649 25,316 1. Includes securities purchased under agreements to resell. 4. Includes securities sold under agreements to repurchase. 2. Balances due to other than directly related institutions. 5. Excludes loans and federal funds transactions with commercial banks in 3. Borrowings from other than directly related institutions. United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic NonfinancialS tatistics • February 1983 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during IIInnnddduuussstttrrryyy ccclllaaassssssiiifffiiicccaaatttiiiooonnn 1982 1982 Aug. 25 Sept. 29 Oct. 27 Nov. 24 Dec. 29 Q3 Q4 Oct. Nov. Dec. 1 Durable goods manufacturing 29,117 31,424 31,345 30,124 29,940 2,347 -1,484 -80 -1,220 -184 2 Nondurable goods manufacturing 24,866 25,811 24,774 24,632 23,908 512 -1,904 -1,037 -142 -725 3 Food, liquor, and tobacco 4,596 4,838 4,637 4,847 4,405 34 -433 -202 210 -442 4 Textiles, apparel, and leather 5,064 4,855 4,571 4,268 3,812 -7 -1,044 -284 -303 -456 5 Petroleum refining 4,717 5,323 5,464 5,518 5,627 228 304 141 54 110 6 Chemicals and rubber 5,518 5,810 5,426 5,386 5,530 259 -280 -384 -39 143 7 Other nondurable goods 4,971 4,985 4,677 4,614 4,534 1 -451 -308 -63 -80 8 Mining (including crude petroleum and natural gas) 27,313 28,406 29,266 29,633 29,568 154 1,162 860 368 -65 9 Trade 28,320 29,048 28,960 28,732 28,037 -142 -1,011 -88 -227 -696 10 Commodity dealers 1,788 1,977 2,036 2,102 2,305 116 328 60 65 204 11 Other wholesale 13,488 13,975 13,692 13,652 13,648 198 -327 -283 -39 -4 12 Retail 13,044 13,0% 13,231 12,978 12,084 -456 -1,012 135 -253 -894 13 Transportation, communication, and other public utilities 24,751 24,913 24,840 25,152 24,953 -89 39 -74 313 -200 14 Transportation 8,964 8,976 8,913 9,025 9,103 -251 127 -62 112 78 IS Communication 4,905 5,153 5,254 5,297 5,258 374 106 101 43 -38 16 Other public utilities 10,882 10,785 10,672 10,830 10,591 -212 -194 -112 158 -239 17 Construction 7,825 7,815 7,757 7,759 7,863 55 48 -58 2 103 18 Services 28,938 29,196 29,587 29,472 30,502 466 1,306 392 -115 1,029 19 All other1 17,536 17,916 17,966 17,945 18,502 680 586 50 -21 557 20 Total domestic loans 188,667 194,530 194,494 193,452 193,272 3,982 -1,258 -36 -1,042 -180 21 MEMO: Term loans (original maturity more than 1 year) included in domestic loans .. 87,027 89,152 89,776 89,944 90,088 -655 936 623 168 144 1. Includes commercial and industrial loans at a few banks with assets of $1 billion or more that do not classify their loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

IPC Demand Deposits A25 1.31 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 1981 1982 11997788 1199779922 11998800 DDeecc.. DDeecc.. DDeecc.. June3 Sept. Dec. Mar. June Sept. 1 All holders—Individuals, partnerships, and corporations 294.6 302.2 31S.S + 277.5 288.9 268.9 271.5 276.7 2 Financial business 27.8 27.1 29.8 I 28.2 28.0 27.8 28.6 31.9 3 Nonfinancial business 152.7 157.7 162.3 n.a. 148.6 154.8 138.7 141.4 142.9 4 Consumer 97.4 99.2 102.4 1 82.1 86.6 84.6 83.7 83.3 5 Foreign 2.7 3.1 3.3 1 3.1 2.9 3.1 2.9 2.9 6 14.1 15.1 17.2 T 15.5 16.7 14.6 15.0 15.7 Weekly reporting banks 1981 1982 11997788 11997799"" 11998800 DDeecc.. DDeecc.. DDeecc.. June3 Sept. Dec. Mar. June Sept. 7 All holders—Individuals, partnerships, and corporations 147.0 139.3 147.4 131.3 137.5 126.8 127.9 132.1 f 1 8 Financial business 19.8 20.1 21.8 n.a. 20.7 21.0 20.2 20.2 23.4 9 Nonfinancial business 79.0 74.1 78.3 | 71.2 75.2 67.1 67.7 68.7 10 Consumer 38.2 34.3 35.6 28.7 30.4 29.2 29.7 29.6 11 Foreign 2.5 3.0 3.1 1 2.9 2.8 2.9 2.8 2.7 12 7.5 7.8 8.6 ? 7.9 8.0 7.3 7.5 7.7 1. Figures include cash items in process of collection. Estimates of gross 3. Demand deposit ownership survey estimates for June 1981 are not available deposits are based on reports supplied by a sample of commercial banks. Types of due to unresolved reporting errors. depositors in each category are described in the June 1971 BULLETIN, p. 466. 4. 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 170 large commercial banks, each of which had total assets in domestic offices survey sample was reduced to 232 banks from 349 banks, and the estimation exceeding $750 million as of Dec. 31, 1977. See "Announcements," p. 408 in the procedure was modified slightly. To aid in comparing estimates based on the old May 1978 BULLETIN. Beginning in March 1979, demand deposit ownership and new reporting sample, the following estimates in billions of dollars for estimates for these large banks are constructed quarterly on the basis of 97 sample December 1978 have been constructed using the new smaller sample; financial banks and are not comparable with earlier data. The following estimates in billions business, 27.0; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and of dollars for December 1978 have been constructed for the new large-bank panel; other, 15.1. financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5; other, 6.8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic NonfinancialS tatistics • February 1983 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1982 I [11 1977 1978 19791 1980 1981 Dec. Dec. Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec.6 Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 65,051 83,438 112,803 124,524 165,508 180,669 177,182 173,836 170,253 165,534 166,367 Financial companies2 Dealer-placed paper3 2 Total 8,796 12,181 17,359 19,790 30,188 37,961 38,066 36,692 3355,,113300 3355,,330044 34,590 3 Bank-related (not seasonally adjusted) 2,132 3,521 2,784 3,561 6,045 6,427 6,038 5,924 55,,779911 66,,223322 22,,002266 Directly placed paper* 4 Total 40,574 51,647 64,757 67,854 81,660 85,684 81,707 8811,,334477 7799,,884466 7799,,114433 83,492 5 Bank-related (not seasonally adjusted) 7,102 12,314 17,598 22,382 26,914 31,141 28,901 27,761 25,712 27,769 31,428 6 Nonfinancial companies5 15,681 19,610 30,687 36,880 53,660 57,024 57,409 55,797 55,277 51,087 48,285 Bankers dollar acceptances (not seasonally adjusted) 7 Total 25,450 33,700 45,321 54,744 69,226 72,559 72,709 73,818 75,811 77,125 Holder 8 Accepting banks 10,434 8,579 9,865 10,564 10,857 11,164 11,805 10,752 10,661 10,596 9 Own bills 8,915 7,653 8,327 8,963 9,743 9,734 10,740 9,370 9,399 9,455 10 Bills bought 1,519 927 1,538 1,601 1,115 1,431 1,065 1,382 1,262 1,140 Federal Reserve Banks 11 Own account 954 1 704 776 0 0 0 0 0 0 n a. 12 Foreign correspondents 362 664 1,382 1,791 1,442 1,250 1,239 1,139 1,080 992 13 Others 13,700 24,456 33,370 41,614 56,926 60,145 59,664 61,927 64,070 65,537 Basis 14 Imports into United States 6,378 8,574 10,270 11,776 14,765 15,094 14,921 16,075 16,511 16,716 15 Exports from United States 5,863 7,586 9,640 12,712 15,400 16,167 15,883 15,608 16,463 16,711 16 All other 13,209 17,540 25,411 30,257 39,061 41,298 41,898 42,136 42,837 43,699 1. A change in reporting instructions results in offsetting shifts in the dealer- 5. Includes public utilities and firms engaged primarily in such activities as placed and directly placed financial company paper in October 1979. communications, construction, manufacturing, mining, wholesale and retail trade, 2. Institutions engaged primarily in activities such as, but not limited to, transportation, and services. commercial, savings, and mortgage banking; sales, personal, and mortgage 6. Effective December 1, 1982, there was a break in the commercial paper financing; factoring, finance leasing, and other business lending; insurance series. The key changes in the content of the data involved additions to the underwriting; and other investment activities. reporting panel, the exclusion of broker or dealer placed borrowings under any 3. Includes all financial company paper sold by dealers in the open market. master note agreements from the reported data, and the reclassification of a large 4. As reported by financial companies that place their paper directly with portion of bank-related paper from dealer-placed to directly placed. investors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business Lending All 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 1981—Nov. 3 17.50 July 20 16.00 1981—June 20.03 1982—Apr 9 17.00 29 15.50 July 20.39 May 17 16.50- Aug. 2 15.00 Aug 20.50 17.00 16 14.50 Sept 20.08 July 20 16.50 18 14.00 Oct 18.45 Aug 24 16.00 23 13.50 Nov 16.84 Sept Dec. 1 15.75 Oct. 7 13.00 Dec 15.75 Oct 1982—Feb. 2 16.50 14 12.00 1982—Jan 15.75 Nov 2 1 3 8 1 1 7 6 . . 0 5 0 0 1983— N Ja o n v . . 2 1 2 1 1111..0500 F M e a b r 1 16 6 . . 5 5 0 6 1983— D Ja e n c 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-6, 1982 Size of loan (in thousands of dollars) All sizes 1-24 25-49 50-99 100-499 500-999 an 1 d ,0 o 0 v 0 e r SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 37,830,563 1,004,140 642,584 562,394 2,129,432 913,862 32,578,151 2 Number of loans 170,984 123,157 20,331 9,027 12,408 1,403 4,658 3 Weighted-average maturity (months) 1.2 3.6 3.6 4.1 4.8 3.2 4 Weighted-average interest rate (percent per annum) . 11.26 15.63 15.32 13.80 13.85 12.93 10.79 5 Interquartile range1 10.38-11.34 14.37-16.99 13.72-16.45 12.68-14.45 12.68-15.01 12.25-13.80 10.38-10.90 Percentage of amount of loans 6 With floating rate 26.4 32.5 39.5 70.8 65.4 65.0 21.6 7 Made under commitment 70.1 40.8 35.8 64.5 54.4 68.9 72.8 8 With no stated maturity 9.6 15.9 18.7 40.0 22.2 29.5 7.3 1-99 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 9 Amount of loans (thousands of dollars) 4,007,972 380,177 459,970 204,266 2,963,558 10 Number of loans 25,270 22,129 2,265 311 565 11 Weighted-average maturity (months) 46.2 43.9 26.4 45.3 49.6 12 Weighted-average interest rate (percent per annum) 12.24 15.17 13.98 13.02 11.54 13 Interquartile range1 10.68-13.55 13.80-16.65 13.50-14.94 12.55-13.88 10.62-12.68 Percentage of amount of loans 14 With floating rate 77.8 49.0 67.9 81.6 82.7 15 Made under commitment 76.1 44.1 32.4 69.6 87.5 1-24 25-49 50-99 500 and over CONSTRUCTION AND LAND DEVELOPMENT LOANS 16 Amount of loans (thousands of dollars) 1,433,072 157,866 179,347 85,282 531,567 479,010 17 Number of loans 25,255 16,181 4,750 1,278 2,806 241 18 Weighted-average maturity (months) 11.1 14.4 16.0 6.4 8.3 12.2 19 Weighted-average interest rate (percent per annum) 15.14 16.74 17.44 18.52 15.01 13.30 20 Interquartile range1 12.73-16.09 15.02-18.10 14.75-18.97 14.23-20.57 12.69-15.58 11.82-14.50 Percentage of amount of loans 21 With floating rate 56.6 27.8 27.2 34.9 47.4 91.1 22 Secured by real estate 71.6 75.0 85.6 92.8 69.2 64.3 2 2 4 3 W Ma it d h e n u o n d st e a r t e c d o m m m at i u tm rit e y n t 3 2 9 . . 9 6 44 3 . . 4 7 43. . 1 4 2 4 9 . . 8 7 221..51 5 4 8 . . 0 7 Type of construction 25 1- to 4-family 43.3 74.8 64.2 72.2 56.7 5.2 26 Multifamily 12.1 1.5 18.8 7.6 4.6 22.2 27 Nonresidential 44.6 23.7 17.0 20.2 38.7 72.6 All sizes 1-9 10-24 50-99 250 and over LOANS TO FARMERS 28 Amount of loans (thousands of dollars) 1,457,533 158,122 234,089 169,062 282,570 200,860 412,831 29 Number of loans 67,611 40,418 15,969 5,177 4,206 1,304 536 30 Weighted-average maturity (months) 5.8 5.4 7.1 6.4 5.7 6.1 4.7 31 Weighted-average interest rate (percent per annum) 14.84 15.60 15.38 15.34 15.57 15.01 13.46 32 Interquartile range1 13.96-15.71 15.00-16.21 14.65-16.11 14.57-16.02 15.03-16.08 14.00-15.57 11.01-15.22 By purpose of loan 33 Feeder livestock 13.90 15.48 15.19 15.22 15.01 14.35 12*.6 6 34 Other livestock 15.49 15.46 15.42 15.34 15.58 35 Other current operating expenses 15.33 15.65 15.40 15.42 15.50 14.56 15*.2 0 36 Farm machinery and equipment 15.68 15.53 15.16 15.76 37 Other 14.53 15.62 15.66 14.84 16.26 14.65 13.74 1. Interest rate range that covers the middle 50 percent of the total dollar NOTE. For more detail, see the Board's E.2 (111) statistical release, amount of loans made. 2. Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • February 1983 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. 1982 1983 1982 and 1983, week ending IInnssttrruummeenntt 11998800 11998811 11998822 Oct. Nov. Dec. Ian. Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28 MONEY MARKET RATES 1 Federal funds1-2 13.36 16.38 12.26 9.71 9.20 8.95 8.68 8.79 10.21 8.42 8.49 88..4444 Commercial paper3-4 2 1-month 12.76 15.69 11.83 9.08 8.66 8.53 8.19 8.69 8.43 8.04 8.03 8.23 3 3-month 12.66 15.32 11.89 9.20 8.69 8.51 8.17 8.52 8.35 8.03 8.02 8.26 4 6-month 12.29 14.76 11.89 9.21 8.72 8.50 8.15 8.45 8.23 8.00 8.01 88..3322 Finance paper, directly placed3'4 5 1-month 12.44 15.30 11.64 8.89 8.51 8.35 8.03 8.34 8.22 7.88 7.83 8.15 6 3-month 11.49 14.08 11.23 8.60 8.39 8.18 7.96 8.12 8.09 7.92 7.79 8.03 7 6-month 11.28 13.73 11.20 8.60 8.42 8.20 7.97 8.10 8.08 7.98 77..8800 88..0011 Bankers acceptances4'5 8 3-month 12.72 15.32 11.89 9.24 8.76 8.54 8.19 8.54 8.32 7.99 8.05 8.32 9 6-month 12.25 14.66 11.83 9.21 8.77 8.50 8.19 8.40 8.16 7.98 88..0077 88..4466 Certificates of deposit, secondary market6 10 1-month 12.91 15.91 12.04 9.36 8.82 8.64 8.28 8.81 8.53 8.16 8.12 8.32 11 3-month 13.07 15.91 12.27 9.51 8.95 8.66 8.36 8.57 8.51 8.18 8.18 8.51 12 6-month 12.99 15.77 12.57 9.67 9.13 8.80 8.46 8.65 8.47 8.29 8.29 8.74 13 Eurodollar deposits, 3-month2 14.00 16.79 13.12 10.43 9.77 9.47 8.97 9.36 9.08 8.75 88..7766 99..1199 U.S. Treasury bills4 Secondary market7 14 3-month 11.43 14.03 10.61 7.71 8.07 7.94 7.86 8.01 7.92 7.66 7.75 8.05 15 6-month 11.37 13.80 11.07 8.29 8.34 8.16 7.93 8.07 7.95 7.73 7.85 8.13 16 1-year 10.89 13.14 11.07 8.63 8.44 8.23 8.01 8.11 8.02 7.82 7.96 8.19 Auction average8 17 3-month 11.506 14.077 10.686 7.750 8.042 8.013 7.810 7.975 7.896 7.671 7.619 8.055 18 6-month 11.374 13.811 11.084 8.299 8.319 8.225 7.898 8.051 7.946 7.774 7.728 8.144 1199 1100..774488 1133..115599 1111..009999 99..552211 88..556677 88..223344 88..000077 88..009955 88..000077 CAPITAL MARKET RATES U.S. Treasury notes and bonds9 Constant maturities10 20 1-year 12.05 14.78 12.27 9.32 9.16 8.91 8.62 8.75 8.62 8.41 8.56 8.83 21 2-year 11.77 14.56 12.80 10.19 9.80 9.66 9.33 9.52 9.35 9.17 9.25 9.49 ?? 2-w-year11 9 65 9 30 23 3-year 11.55 14.44 12.92 10.62 9.98 9.88 9.64 9.79 9.65 9.45 9.55 9.87 24 5-year 11.48 14.24 13.01 10.80 10.38 10.22 10.03 10.15 10.04 9.88 9.92 10.22 25 7-year 11.43 14.06 13.06 10.88 10.53 10.49 10.36 10.40 10.29 10.22 10.28 10.58 26 10-year 11.46 13.91 13.00 10.91 10.55 10.54 10.46 10.43 10.36 10.32 10.41 10.68 27 20-year 11.39 13.72 12.92 10.97 10.57 10.62 10.78 10.66 10.63 10.65 10.76 11.01 28 30-year 11.30 13.44 12.76 11.17 10.54 10.54 10.63 10.45 10.46 10.48 10.63 10.87 Composite12 29 Over 10 years (long-term) 10.81 12.87 12.23 10.51 10.18 10.33 10.37 10.26 10.24 10.23 10.34 10.61 State and local notes and bonds Moody's series13 30 Aaa 7.85 10.43 10.88 9.15 9.45 9.34 9.00 9.40 9.40 9.40 8.50 8.70 31 Baa 9.01 11.76 12.48 10.66 10.79 10.80 10.98 11.00 11.00 11.00 10.80 11.10 32 Bond Buyer series14 8.59 11.33 11.66 9.69 10.07 9.96 9.50 9.56 9.48 9.37 9.48 9.66 Corporate bonds Seasoned issues15 33 All industries 12.75 15.06 14.94 13.54 13.08 13.02 12.90 12.98 12.94 12.85 12.81 12.97 34 Aaa 11.94 14.17 13.79 12.12 11.68 11.83 11.79 11.82 11.77 11.70 11.70 11.94 35 Aa 12.50 14.75 14.41 12.97 12.51 12.44 12.35 12.40 12.35 12.28 12.25 12.45 36 A 12.89 15.29 15.43 14.34 13.81 13.66 13.53 13.58 13.61 13.51 13.44 13.53 37 Baa 13.67 16.04 16.11 14.73 14.30 14.14 13.94 14.11 14.04 13.92 13.84 1133..%% Aaa utility bonds16 38 12.74 15.56 14.41 12.20 11.76 11.84 12.05 12 05 39 Recently offered issues 12.70 15.56 14.45 12.34 11.88 11.91 11.84 11.85 11.75 11.70 11.89 12.02 MEMO: Dividend/price ratio17 40 Preferred stocks 10.60 12.36 12.53 11.71 11.18 11.20 11.23 11.39 11.41 11.16 11.18 11.15 41 Common stocks 5.26 5.20 5.81 5.12 4.92 4.93 4.79 4.87 4.84 4.69 4.74 4.87 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 business day. The daily rate is the average of the rates on a given day weighted by biweekly rate is used to determine the maximum interest rate payable in the the volume of transactions at these rates. following two-week period on small saver certificates. (See table 1.16.) 2. Weekly figures are statement week averages—that is, averages for the 12. Unweighted averages of yields (to maturity or call) for all outstanding notes week 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 (which may be, but need not be, the average of the rates quoted by the dealers). years or more). New-issue yields are based on quotations on date of offering; 6. Unweighted average of offered rates quoted by at least five dealers early in those on recently offered issues (included only for first 4 weeks after termination the day. of underwriter 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 8. Rates are recorded in the week in which bills are issued. sample of ten issues: four public utilities, four industrials, one financial, and one 9. Yields are based on closing bid prices quoted by at least five dealers. transportation. 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

Securities Markets A29 1.36 STOCK MARKET Selected Statistics 1982 1983 IInnddiiccaattoorr 11998800 11998811 11998822 May June July Aug. Sept. Oct. Nov. Dec. Jan. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 68.06 74.02 68.93 67.07 63.10 62.82 62.91 70.21 76.10 79.75 80.30 83.25 2 Industrial 78.64 85.44 78.18 75.97 71.59 71.37 70.98 80.08 86.67 90.76 92.00 95.37 3 Transportation 60.52 72.61 60.41 56.84 53.07 53.40 53.98 61.39 66.64 71.92 73.40 75.65 4 Utility 37.35 38.90 39.75 39.40 37.34 37.20 38.19 40.36 42.67 43.46 42.93 45.59 5 Finance 64.28 73.52 71.99 69.16 63.19 61.59 62.84 69.66 80.59 88.66 86.22 85.66 6 Standard & Poor's Corporation (1941-43 = 10)' ... 118.71 128.05 119.71 116.35 109.70 109.38 109.65 122.43 132.66 138.10 139.37 145.13 7 American Stock Exchange (Aug. 31, 1973 = 100) 300.94 343.58 282.62 272.88 254.72 250.63 253.54 286.22 308.74 333.54 333.36 360.92 Volume of trading (thousands of shares) 8 New York Stock Exchange 44,867 46,967 64,617 51,328 50,481 54,530 76,031 73,710 98,508 88,431 76,463 88,463 9 American Stock Exchange 6,377 5,346 5,283 4,292 3,720 3,611 5,567 5,064 7,828 8,672 7,475 9,220 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers-desders2 11,619 14,721 14,411 12,237 11,783 11,729 11,396 11,208 11,728 12,459 13,325 f 1 1 1 2 C M o a n rg v i e n r ti s b to le c k b 3 o nds 11,4 1 5 6 0 7 14,5 2 0 1 0 9 14, 2 1 5 5 9 0 11, 2 99 4 0 6 11, 2 5 4 4 2 0 11,4 2 7 5 0 8 11,1 2 5 4 0 5 10,9 2 5 5 0 7 11,4 2 5 7 0 7 12,1 2 7 8 0 8 12, 3 9 4 8 4 0 I 1 13 Subscription issues 2 2 2 1 1 1 1 1 1 1 1 n.a. Free credit balances at brokers4 1 14 Margin-account 1,105 2,105 3,515 4,175 4,215 4,410 4,470 4,990 5,520 5,600 5,735 1 15 Cash-account 4.060 6,070 7,150 6,355 6,345 6,730 7,550 7,475 8,120 8,395 8 ,390 T 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 40.0 43.0 44.0 30.0 27.0 21.0 20.0 18 40-49 29.0 30.0 21.0 24.0 21.0 23.0 26.0 26.0 24.0 21.0 19 50 59 27.0 25.0 22.0 15.0 16.0 13.0 18.0 20.0 22.0 25.0 n.a. n a. 20 60-69 14.0 14.0 10.0 9.0 9.0 9.0 12.0 12.0 16.0 15.0 21 70-79 8.0 9.0 6.0 6.0 6.0 6.0 8.0 8.0 9.0 10.0 1 22 80 or more 7.0 8.0 6.0 5.0 5.0 5.0 6.0 7.0 8.0 9.0 t Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 16,150 21,690 25,870 28,521 29,798 29,773 31,102 31,644 33,689 34,909 Distribution by equity status 1 (percent) 1 24 Net credit status 44.2 47.8 58.0 58.0 59.0 59.0 60.0 61.0 61.0 62.0 n.a. n.a. Debt status, equity of 1 25 60 percent or more 47.0 44.4 31.0 29.0 28.0 26.0 28.0 27.0 29.0 29.0 I 26 Less than 60 percent 8.8 7.7 11.0 13.0 13.0 14.0 12.0 12.0 10.0 9.0 t Margin requirements (percent of market value and effective date)7 Mar. 1 , 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 2. Margin credit includes all credit extended to purchase or carry stocks or other collateral in the customer's margin account or deposits of cash (usually sales related equity instruments and secured at least in part by stock. Credit extended is proceeds) occur. end-of-month data for member firms of the New York Stock Exhange. 7. Regulations G, T, and U of the Federal Reserve Board of Governors, In addition to assigning a current loan value to margin stock generally. prescribed in accordance with the Securities Exchange Act of 1934, limit the Regulations T and U permit special loan values for convertible bonds and stock amount of credit to purchase and carry margin stocks that may be extended on acquired through exercise of subscription rights. securities as collateral by prescribing a maximum loan value, which is a specified 3. A distribution of this total by equity class is shown on lines 17-22. percentage of the market value of the collateral at the time the credit is extended. 4. Free credit balances are in accounts with no unfulfilled commitments to the Margin requirements are the difference between the market value (100 percent) brokers and are subject to withdrawal by customers on demand. and the 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

A30 Domestic Nonfinancial Statistics • February 1983 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1982 AAccccoouunntt 11997799 11998800 11998811 Apr. May June July Aug. Sept. Oct. Nov/ Dec.? Savings and loan associations 1 Assets 578,962 630,712 664,167 681,696 687,273 692,759 697,690 703,399 691,077 692,549 697,189 706,021 2 Mortgages 475,688 503,192 518,547 514,702 514,046 512,997 510,678 509,776 493,899 489,923 488,614 484,297 3 Cash and investment securities1 46,341 57,928 63,123 68,227 70,302 70,824 72,854 74,141 74,692 75,638 78,122 83,460 4 Other 56,933 69,592 82,497 98,767 102,925 108,938 114,158 119,482 122,486 126,988 130,453 138,264 5 Liabilities and net worth 578,962 630,712 664,167 681,696 687,273 692,759 697,690 703,399 691,077 692,549 697,189 706,021 6 Savings capital 470,004 511,636 525,061 533,595 535,215 538,667 539,830 542,648 547,628 547,112 548,439 565,502 7 Borrowed money 55,232 64,586 88,782 93,560 94,117 96,850 98,433 98,803 99,771 100,881 102,948 97,982 8 FHLBB 40,441 47,045 62,794 65,347 65,216 66,925 67,019 66,374 65,567 65,015 64,202 64,015 9 Other 14,791 17,541 25,988 28,213 28,901 29,925 31,414 32,429 34,204 35,866 38,746 33,967 10 Loans in process 9,582 8,767 6,385 6,568 6,766 7,116 7,250 7,491 8,084 8,484 8,967 10,003 11 Other 11,506 12,394 15,544 21,948 25,756 24,671 27,375 29,965 19,202 20,018 21,048 16,684 12 Net worth2 32,638 33,329 28,395 26,025 25,419 25,455 24,802 24,492 24,476 24,538 24,754 25,853 13 MEMO: Mortgage loan commitments outstanding3 16,007 16,102 15,225 16,375 16,622 16,828 15,924 16,943 17,256 18,407 19,682 17,815 Mutual savings banks4 14 Assets 163,405 171,564 175,728 174,813 174,952 175,091 175,563 175,563 173,487 172,908 172,287 Loans 15 Mortgage 98,908 99,865 99,997 97,160 96,334 96,346 96,231 94,448 94,382 94,261 94,017 16 Other 9,253 11,733 14,753 16,424 17,409 16,546 17,104 16,919 17,458 17,035 16,702 Securities 17 U.S. government5 7,658 8,949 9,810 10,146 9,968 10,112 10,036 9,653 9,404 9,219 9,456 18 State and local government 2,930 2,390 2,288 2,269 2,259 2,253 2,247 2,214 2,191 2,505 2,496 19 Corporate and other6 37,086 39,282 37,791 37,473 37,486 36,958 36,670 35,956 35,845 35,599 35,753 20 Cash 3,156 4,334 5,442 5,494 5,469 6,040 6,167 6,405 6,695 6,749 6,291 21 Other assets 4,412 5,011 5,649 5,846 6,027 6,836 7,109 7,185 7,514 7,540 7,572 n a. 22 Liabilities 163,405 171,564 175,728 174,813 174,952 175,091 175,563 172,780 173,487 172,908 172,287 23 Deposits 146,006 154,805 155,110 153,187 153,354 154,273 154,204 151,897 153,089 152,210 151,304 24 Regular7 144,070 151,416 153,003 151,021 151,253 152,030 151,845 149,613 150,795 149,928 149,167 25 Ordinary savings 61,123 53,971 49,425 47,733 47,895 47,942 47,534 46,856 47,496 48,520 49,208 26 Time 82,947 97,445 103,578 103,288 103,358 104,088 104,310 102,756 103,299 101,408 99,959 27 Other 1,936 2,086 2,108 2,166 2,101 2,243 2,359 2,285 2,294 2,283 2,137 28 Other liabilities 5,873 6,695 10,632 12,141 12,246 11,230 11,940 11,691 11,166 11,556 11,893 29 General reserve accounts 11,525 11,368 9,986 9,485 9,352 9,588 9,419 21,145 9,232 9,141 9,089 30 MEMO: Mortgage loan commitments outstanding3 3,182 1,476 1,293 953 998 1,010 992 1,056 1,217 1,281 1,400 Life insurance companies 31 Assets. 432,282 479,210 525,803 539,801 543,470 547,075 551,124 557,094 563,321 571,902 578,200 Securities Government 338 21,378 25,209 27,346 27,835 28,243 28,694 30,263 30,759 31,791 32,682 United States9 . 4,888 5,345 8,167 9,832 10,187 10,403 10,774 12,214 12,606 13,538 14,370 State and local. 6,428 6,701 7,151 7,467 7,543 7,643 7,705 7,799 7,834 7,871 7,935 Foreign10 9,022 9,332 9,891 10,045 10,105 10,197 10,215 10,250 10,319 10,382 10,377 n.a. Business 222,332 238,113 255,769 262,599 264,107 265,080 267,627 270,029 273,539 279,918 283,650 Bonds 178,171 190,747 208,098 215,586 217,594 219,006 221,503 221,642 223,783 226,879 229,101 Stocks 48,757 47,366 47,670 47,013 46;513 46,074 46,124 48,387 49,756 53,039 54,549 39 Mortgages 119,421 131,030 137,747 139,206 139,455 139,539 140,044 140,244 140,404 140,678 140,956 40 Real estate 13,007 15,063 18,278 19,516 19,713 19,959 20,198 20,176 20,268 20,293 20,480 41 Policy loans 44,825 41,411 48,706 50,573 , 50,992 51,438 51,867 52,238 52,525 52,751 52,916 42 Other assets 27,563 31,702 40,094 40,561 41,368 42,816 42,694 44,144 45,826 46,471 47,516 Credit unions 43 Total assets/liabilities and capital. 65,854 71,709 77,682 81,351 82,858 84,107 84,423 85,102 86,554 88.144 44 Federal 35,934 39,801 42,382 44,371 45,077 45,705 45,931 46,310 47,076 47,649 45 State 29,920 31,908 35,300 36,980 37,781 38,402 38,492 38,792 39,478 40,495 46 Loans outstanding 53,125 47,774 50,448 49,533 49,556 49,919 50,133 50,733 51,047 50,934 47 Federal 28,698 25,627 27,458 27,064 27,073 27,295 27,351 27,659 27,862 27,789 48 State 24,426 22,147 22,990 22,469 22,483 22,624 22,782 23,074 23,185 23.145 49 Savings 56,232 64,399 68,871 72,569 73,602 74,834 75,088 75,331 76,874 78,529 50 Federal (shares) 35,530 36,348 37,574 39,688 40,213 40,710 40,969 41,178 41,961 42,852 51 State (shares and deposits) 25,702 28,051 31,297 32,881 33,389 34,124 34,119 34,153 34,913 35,677 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 1981 1982 1982 11998800 11998811 11998822 H2 HI H2 Oct. Nov. Dec. U.S. budget 1 Receipts1 517,112 599,272 617,776 301,777 322,478 286,338 40,539 42,007 54,498 2 Outlays1'2 576,675 657,204 728,375 358,558 348,678 390,846 66,708 66,166 72,436 3 Surplus, or deficit (-) -59,563 -57,932 -110,609 -56,780 -26,200 -104,508 -26,169 -24,159 -17,938 4 Trust funds 8,801 6,817 5,456 -8,085 -17,690 -6,576 -6,269 -5,750 3,382 5 Federal funds -68,364 -64,749 -116,065 -48,697 -43,889 -97,934 -19,889 -18,409 -21,320 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt ((--)))) 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -14,549 -20,769 -14,142 -8,728 -7,942 -4,923 -521 -559 -198 77 OOtthheerr44 303 -236 -3,190 -1,752 227 -2,267 226 -127 33 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -73,808 -78,936 -127,940 -67,260 -33,914 -111,699 -26,462 -24,845 -18,103 Source or financing 9 Borrowing from the public 70,515 79,329 134,993 54,081 41,728 119,609 6,228 25,923 29,895 10 Cash and monetary assets (decrease, or increase (-))5 -355 -1,878 -11,911 -1,111 -408 -9,057 13,964 7,231 -13,002 11 Other6 3,648 1,485 4,858 14,290 -7,405 1,146 6,270 -8,309 1,211 MEMO: 12 Treasury operating balance (level, end of period) 20,990 18,670 29,164 12,046 10,999 19,773 14,078 5,210 19,773 13 Federal Reserve Banks 4,102 3,520 10,975 4,301 4,099 5,033 2,309 2,247 5,033 14 Tax and loan accounts 16,888 15,150 18,189 7,745 6,900 14,740 11,769 2,963 14,740 1. The Budget of the U.S. Government, Fiscal Year 1983, has reclassified 5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold supplemental medical insurance premiums and voluntary hospital insurance tranche drawing rights; loans to International Monetary Fund; and other cash and premiums, previously included in other social insurance receipts, as offsetting monetary assets. receipts in the health function. 6. Includes accrued interest payable to the public; allocations of special 2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was drawing rights; deposit funds; miscellaneous liability (including checks outstandreclassified from an off-budget agency to an on-budget agency in the Department ing) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S. of Labor. currency valuation adjustment; net gain/loss for IMF valuation adjustment; and 3. Half-year figures are calculated as a residual (total surplus/deficit less trust profit on the sale of gold. fund surplus/deficit). 4. Other off-budget includes Postal Service Fund; Rural Electrification and SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Telephone Revolving Fund; and Rural Telephone Bank; it also includes petroleum Government." Treasury Bulletin, and the Budget of the United States Governacquisition and transportation and strategic petroleum reserve effective Novem- ment, Fiscal Year 1984. ber 1981. NOTES TO TABLE 1.37 10. Issues of foreign governments and their subdivisions and bonds of the 1. Holdings of stock of the Federal Home Loan Banks are included in "other International Bank for Reconstruction and Development. assets." 2. Includes net undistributed income, which is accrued by most, but not all, NOTE. Savings and loan associations: Estimates by the FHLBB for all associations. associations in the United States. Data are based on monthly reports of federally 3. Excludes figures for loans in process, which are shown as a liability. insured associations and annual reports of other associations. Even when revised, 4. The NAMSB reports that, effective April 1979, balance sheet data are not data for current and preceding year are subject to further revision. strictly comparable with previous months. Beginning April 1979, data are reported Mutual savings banks: Estimates of National Association of Mutual Savings on a net-of-valuation-reserves basis. Before that date, data were reported on a Banks for all savings banks in the United States. gross-of-valuation-reserves basis. Life insurance companies: Estimates of the American Council of Life Insurance 5. Beginning April 1979, includes obligations of U.S. government agencies. for all life insurance companies in the United States. Annual figures are annual- Before that date, this item was included in "Corporate and other." statement asset values, with bonds carried on an amortized basis and stocks at 6. Includes securities of foreign governments and international organizations year-end market value. Adjustments for interest due and accrued and for and, before April 1979, nonguaranteed issues of U.S. government agencies. differences between market and book values are not made on each item separately 7. Excludes checking, club, and school accounts. but are included, in total, in "other assets." 8. Commitments outstanding (including loans in process) of banks in New York Credit unions: Estimates by the National Credit Union Administration for a State as reported to the Savings Banks Association of the state of New York. group of federal and state-chartered credit unions that account for about 30 9. Direct and guaranteed obligations. Excludes federal agency issues not percent of credit union assets. Figures are preliminary and revised annually to guaranteed, which are shown in the table under "Business" securities. incorporate recent benchmark data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • February 1983 1.39 U. S. B UDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyy 111999 eee 888 aaarrr 000 yyy 111999 eee 888 aaarrr 111 111 yyy 999 eee 888 aaa 222 rrr rrr 1981 1982 1982 H2 HI H2 Oct. Nov. Dec. RECEIPTS 1 All sources' 517,112 599,272 617,766 301,777 322,478 286,338 40,539 42,007 54,498 2 Individual income taxes, net 244,069 285,917 298,111 147,035 150,565 145,676 20,832 22,452 24,946 3 Withheld 223,763 256,332 267,474 134,199 133,575 131,567 19,541 22,079 23,843 4 Presidential Election Campaign Fund ... 39 41 39 5 34 5 0 0 0 5 Nonwithheld 63,746 76,844 85,096 17,391 66,174 20,040 1,791 1,153 1,906 6 Refunds 43,479 47,299 54,498 4,559 49,217 55,,993388 500 779 804 Corporation income taxes 7 Gross receipts 72,380 73,733 65,991 31,056 37,836 25,661 2,371 1,630 9,402 8 Refunds 7,780 12,596 16,784 738 8,028 1111,,446677 22,,883322 22,,331100 11,,223388 9 Social insurance taxes and contributions, net 157,803 182,720 201,131 91,592 108,079 9944,,227788 1155,,115577 1144,,990022 1155,,777766 10 Payroll employment taxes and contributions2 133,042 156,953 172,744 82,984 88,795 8855,,006633 1144,,003366 1122,,992244 1155,,113388 11 Self-employment taxes and contributions3 5,723 6,041 7,941 244 7,357 177 36 0 0 12 Unemployment insurance 15,336 16,129 16,234 6,355 9,809 6,857 762 1,629 264 13 Other net receipts1-4 3,702 3,598 4,212 2,009 2,119 2,181 324 349 373 14 Excise taxes 24,329 40,839 36,311 22,097 17,525 16,556 2,623 2,925 2,674 15 Customs deposits 7,174 8,083 8,854 4,661 4,310 4,299 675 692 724 16 Estate and gift taxes 6,389 6,787 7,991 3,742 4,208 3,445 500 472 572 17 Miscellaneous receipts5 12,748 13,790 16,161 8,441 7,984 7,891 1,212 1,243 1,643 OUTLAYS 18 All types1'6 576,675 657,204 728,375 358,558 346,286 390,846 66,708 66,166 72,436 19 National defense 135,856 159,765 187,418 87,421 93,154 100,419 16,283 16,937 18,141 20 International affairs 10,733 11,130 9,982 4,655 5,183 4,406 1,027 45 1,044 21 General science, space, and technology ... 5,722 6,359 7,070 3,388 3,370 3,903 603 771 838 22 Energy 6,313 10,277 4,674 4,394 2,814 2,059 694 504 362 23 Natural resources and environment 13,812 13,525 12,934 7,296 5,636 6,940 1,137 1,100 1,060 24 Agriculture 4,762 5,572 14,875 5,181 7,087 13,260 2,029 3,322 5,326 25 Commerce and housing credit 7,788 3,946 3,865 1,825 1,410 2,244 1,119 -52 968 26 Transportation 21,120 23,381 20,560 10,753 9,915 10,686 1,745 1,876 1,567 27 Community and regional development 10,068 9,394 7,165 4,269 3,193 4,186 946 718 638 28 Education, training, employment, social services 30,767 31,402 26,300 13,878 12,595 12,187 2,167 2,058 2,019 29 Health1 55,220 65,982 74,017 35,322 37,213 39,073 6,403 6,644 6,895 30 Income security6 193,100 225,101 248,343 129,269 112,782 133,779 22,186 22,987 24,263 31 Veterans benefits and services 21,183 22,988 23,955 12,880 10,865 13,241 1,945 2,069 3,202 32 Administration of justice 4,570 4,696 4,671 2,290 2,334 2,373 368 419 382 33 General government 4,505 4,614 4,726 2,311 2,410 2,322 146 524 451 34 General-purpose fiscal assistance 8,584 6,856 6,393 3,043 3,325 3,152 1,558 302 58 35 Net Interest' 52,458 68,726 84,697 39,950 41,880 44,948 7,508 8,469 6,611 36 Undistributed offsetting receipts8 -9,887 -16,509 -13,270 -9,564 -6,490 -8,333 -1,155 -2,529 -1,389 1. The Budget of the U.S. Government, Fiscal Year 1983 has reclassified 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous supplemental medical insurance premiums and voluntary hospital insurance receipts. premiums, previously included in other social insurance receipts, as offsetting 6. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was receipts in the health function. reclassified from an off-budget agency to an on-budget agency in the Department 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. of Labor. 3. Old-age, disability, and hospital insurance. 7. Net interest function includes interest received by trust funds. 4. Federal employee retirement contributions and civil service retirement and 8. Consists of rents and royalties on the outer continental shelf and U.S. disability fund. government contributions for employee retirement. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Government" and the Budget of the U.S. Government, Fiscal Year 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1980 1981 1982 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 914.3 936.7 970.9 977.4 1,003.9 1,034.7 1,066.4 1,084.7 1,147.0 2 Public debt securities 907.7 930.2 964.5 971.2 997.9 1,028.7 1,061.3 1,079.6 1,142.0 3 Held by public 710.0 737.7 773.7 771.3 789.8 825.5 858.9 867.9 925.6 4 Held by agencies 197.7 192.5 190.9 199.9 208.1 203.2 202.4 211.7 216.4 5 Agency securities 6.6 6.5 6.4 6.2 6.1 6.0 5.1 5.0 5.0 6 Held by public 5.1 5.0 4.9 4.7 4.6 4.6 3.9 3.9 3.7 7 Held by agencies 1.5 1.5 1.5 1.5 1.5 1.4 1.2 1.1 1.3 8 Debt subject to statutory limit 908.7 931.2 965.5 972.2 998.8 1,029.7 1,062.2 1,080.5 1,142.9 9 Public debt securities 907.1 929.6 963.9 970.6 997.2 1,028.1 1,060.7 1,079.0 1,141.4 10 Other debt1 1.6 1.6 1.6 1.6 1.6 1.6 1.5 1.5 1.5 11 MEMO: Statutory debt limit 925.0 935.1 985.0 985.0 999.8 1,079.8 1,079.8 1,143.1 1,143.1 1. Includes guaranteed debt of government agencies, specified participation NOTE. Data from Treasury Bulletin (U.S. Treasury Department), certificates, 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 1982 1983 TTyyppee aanndd hhoollddeerr 11997788 11997799 11998800 11998811 Sept. Oct. Nov. Dec. Jan. 1 Total gross public debt 789.2 845.1 930.2 1,028.7 1,142.0 1,142.8 1,161.7 1,197.1 1,201.0 By type 7 Interest-bearing debt 782.4 844.0 928.9 1,027.3 1,140.9 1,136.8 1,160.5 1,195.5 1,199.6 3 Marketable 487.5 530.7 623.2 720.3 824.4 $24.7 852.5 881.5 888.0 4 Bills 161.7 172.6 216.1 245.0 277.9 283.9 293.5 311.8 308.1 5 Notes 265.8 283.4 321.6 375.3 442.9 438.1 454.2 465.0 473.0 6 Bonds 60.0 74.7 85.4 99.9 103.6 102.7 104.7 104.6 107.6 7 Nonmarketable1 294.8 313.2 305.7 307.0 316.5 312.2 308.0 314.0 310.9 8 2.2 2.2 9 State and local government series 24.3 24.6 23.8 23.0 23.6 23.8 25.0 25.7 25.6 10 Foreign issues3 29.6 28.8 24.0 19.0 14.6 14.6 14.9 14.7 14.0 11 Government 28.0 23.6 17.6 14.9 12.2 12.2 12.5 13.0 12.7 1? Public 1.6 5.3 6.4 4.1 2.4 2.4 2.4 1.7 1.3 13 Savings bonds and notes 80.9 79.9 72.5 68.1 67.5 67.8 68.1 68.0 68.1 14 Government account series4 157.5 177.5 185.1 196.7 210.5 205.7 199.9 205.4 203.0 15 Non-interest-bearing debt 6.8 1.2 1.3 1.4 1.2 6.0 1.2 1.6 1.4 By holder5 16 U.S. government agencies and trust funds 170.0 187.1 192.5 203.3 216.4 17 Federal Reserve Banks 109.6 117.5 121.3 131.0 134.4 18 Private investors 508.6 540.5 616.4 694.5 1 19 Commercial banks 93.2 96.4 116.0 109.4 20 Mutual savings banks 5.0 4.7 5.4 5.2 21 Insurance companies 15.7 16.7 20.1 19.1 22 Other companies 19.6 22.9 25.7 37.8 n.a. n.a. n.a. n.a. n.a. 23 State and local governments 64.4 69.9 78.8 85.6 Individuals 24 Savings bonds 80.7 79.9 72.5 68.0 25 Other securities 30.3 36.2 56.7 75.6 26 Foreign and international6 137.8 124.4 127.7 141.4 27 Other miscellaneous investors7 58.9 90.1 106.9 152.3 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Data for Federal Reserve Banks and U.S. government agencies and trust tion Administration, depository bonds, retirement plan bonds, and individual funds are actual holdings; data for other groups are Treasury estimates. retirement bonds. 6. Consists of investments of foreign balances and international accounts in the 2. These nonmarketable bonds, also known as Investment Series B Bonds, United States. may be exchanged (or converted) at the owner's option for l'/2 percent, 5-year 7. Includes savings and loan associations, nonprofit institutions, corporate marketable Treasury notes. Convertible bonds that have been so exchanged are pension trust funds, dealers and brokers, certain government deposit accounts, removed from this category and recorded in the notes category (line 5). and 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. 1.42 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity* •Series discontinued. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • February 1983 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1982 1982 and 1983, week ending Wednesday IItteemm 11997799 11998800 11998811 Oct. Nov. Dec. Dec. 22 Dec. 29' Jan. 5 Jan. 12 Jan. 19 Jan. 26 Immediate delivery1 1 U.S. government securities 13,183 18,331 24,728 35,137 35,933 30,099 34,781 27,375 30,397 37,810 34,744 39,180 By maturity 2 Bills 7,915 11,413 14,768 18,466 19,275 17,709 17,868 16,089 16,570 20,938 20,938 20,742 3 Other within 1 year 454 421 621 816 748 598 612 663 814 1,168 719 1,125 4 1-5 years 2,417 3,330 4,360 7,629 6,875 5,081 7,507 4,131 5,827 6,670 6,268 8,813 5 5-10 years 1,121 1,464 2,451 4,250 4,162 3,679 5,024 2,878 3,803 4,590 4,290 4,208 6 Over 10 years 1,276 1,704 2,528 3,976 4,873 3,032 3,771 3,614 3,384 4,444 3,610 4,291 By type of customer 7 U.S. government securities dealers 1,448 1,484 1,640 1,614 2,151 2,057 2,102 1,896 2,096 2,282 22,,229999 22,,554444 8 U.S. government securities brokers 5,170 7,610 11,750 17,298 16,819 13,706 15,626 11,374 13,439 17,875 16,311 18,965 9 All others2 6,564 9,237 11,337 16,225 16,962 14,336 17,053 14,105 14,863 17,654 16,134 17,670 10 Federal agency securities 2,723 3,258 3,306 5,827 4,951 4,310 4,257 4,027 3,905 6,113 6,026 4,846 11 Certificates of deposit 1,764 2,472 4,477 5,273 4,848 4,216 4,935 3,433 3,393 5,611 4,560 4,354 12 Bankers acceptances 1 I 1,807 3,065 2,895 2,396 2,597 2,036 2,581 3,268 2,570 2,567 13 Commercial paper t t 6,128 7,342 7,392 6,528 7,382 66,,330099 77,,331177 77,,776688 88,,005588 77,,666644 Futures transactions3 14 Treasury bills 1 1 3,523 4,499 387 4,105 4,645 2,969 3,652 3,717 5,121 6,814 15 Treasury coupons n.a. n.a. 1,330 1,922 794 1,531 2,208 1,017 1,146 1,543 1,526 1,989 16 Federal agency securities 1 1 234 332 195 243 273 192 177 152 164 186 Forward transactions4 17 U.S. government securities I 1 365 760 6,747 1,087 2,345 992 649 397 1,349 1,562 18 Federal agency securities 1 t 1,370 1,132 969 1,033 965 1,243 857 1,340 1,469 942 1. Before 1981, data for immediate transactions include forward transactions. from the date of the transaction for government securities (Treasury bills, notes, 2. Includes, among others, all other dealers and brokers in commodities and and bonds) 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 Transactions are market purchases and sales of U.S. government securities exchange in which parties commit to purchase or sell securities for delivery at a dealers reporting to the Federal Reserve Bank of New York. The figures exclude future date. allotments of, and exchanges for, new U.S. government securities, redemptions 4. Forward transactions are agreements arranged in the over-the-counter of called or matured securities, purchases or sales of securities under repurchase market in which securities are purchased (sold) for delivery after 5 business days 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 1982 1982 and 1983, week ending Wednesday IItteemm 11997799 11998800 11998811 Oct. Nov. Dec. Dec. 8 Dec. 15 Dec. 22 Dec. 29 Jan. 5 Positions Net immediate1 1 U.S. government securities 3,223 4,306 9,033 3,641 8,417 14,811 12,088 10,433 16,988 19,626 17,933 2 Bills 3,813 4,103 6,485 1,024 3.654 8,732 7,761 6,694 9,252 11,156 10,378 3 Other within 1 year -325 -1,062 -1,526 109 593 428 484 432 376 373 473 4 1-5 years -455 434 1,488 2,612 2,850 4,249 2,463 2,390 6,550 5,866 4,674 5 5-10 years 160 166 292 -691 -274 -33 -6 -479 -466 565 561 6 Over 10 years 30 665 2,294 587 1,594 1,436 1,386 1,396 1,275 1,665 1,846 7 Federal agency securities 1,471 797 2,277 5,241 5,680 5,952 6,275 6,162 5,722 5,513 5,948 8 Certificates of deposit 2,794 3,115 3,435 6,109 5,316 6,850 6,355 6,183 6,907 7,711 7,842 9 Bankers acceptances A k 1,746 3,283 3,240 4,037 3,609 3,414 4,316 4,786 4,342 10 Commercial paper T t 2,658 3,965 3,265 3,157 2,763 3,183 33,,444455 33,,117799 33,,447744 Futures positions 11 Treasury bills 1 1 -8,934 5,347 1,761 -4,904 -1,633 -3,445 -6,624 -8,117 -9,481 12 Treasury coupons n.a. n.a. -2,733 -1,141 -2,700 -2,289 -2,441 -2,471 -2,094 -2,117 -2,611 13 Federal agency securities 1 1 522 -569 -344 -335 -220 -285 -358 -420 -566 Forward positions 14 U.S. government securities i 1 -603 -565 -828 -1,235 -807 -976 -1,769 -1,596 -815 15 Federal agency securities t t -451 -1,835 -2,028 -2,108 -2,022 -2,246 -1,880 -2,077 -2,816 Financing2 Reverse repurchase agreements 16 Overnight and continuing 14,568 29,581 22,186 29,053 30,338 31,293 27,277 27,303 17 Term agreements 32,048 50,483 55,024 61,639 51,860 55,352 55,025 84,320 Repurchase agreements4 18 Overnight and continuing... . 35,919 51,250 43,112 57,009 52,553 57,152 57,402 60,927 19 Term agreements 29,449 43,963 54,999 50,073 49,253 52,511 49,528 48,501 For notes see opposite page. 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Federal Finance A35 1.45 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1982 AAggeennccyy 11997788 11997799 11998800 Mar. Apr. May June July Aug. Sept. 1 Federal and federally sponsored agencies1 137,063 163,290 193,229 228,749 232,274 234,593 238,787 242,565 n.a. n.a. 2 Federal agencies 23,488 24,715 28,606 31,408 31,613 31,551 32,274 32,302 32,280 32,606 3 Defense Department2 968 738 610 454 447 434 419 408 399 388 4 Export-Import Bank3 4 8,711 9,191 11,250 13,421 13,475 13,416 13,939 13,938 13,918 14,042 5 Federal Housing Administration3 588 537 477 382 376 363 358 353 345 335 6 Government National Mortgage Association participation certificates6 3,141 2,979 2,817 2,165 2,165 2,165 2,165 2,165 2,165 2,165 7 Postal Service7 2,364 1,837 1,770 1,538 1,538 1,471 1,471 1,471 1,471 1,471 8 Tennessee Valley Authority 7,460 8,997 11,190 13,250 13,410 13,500 13,715 13,760 13,775 14,010 9 United States Railway Association7 356 436 492 198 202 202 207 207 207 195 10 Federally sponsored agencies1 113,575 138,575 164,623 197,341 200,661 203,042 206,513 210,263 n.a. n.a. 11 Federal Home Loan Banks 27,563 33,330 41,258 58,839 59,937 60,772 61,883 62,058 n.a. n.a. 12 Federal Home Loan Mortgage Corporation 2,262 2,771 2,536 2,500 2,500 2,500 3,099 3,099 n.a. n.a. 13 Federal National Mortgage Association 41,080 48,486 55,185 59,270 60,478 61,996 62,660 65,563 65,733 68,130 14 Federal Land Banks 20,360 16,006 12,365 8,717 8,217 8,217 8,217 7,652 7,652 7,652 15 Federal Intermediate Credit Banks 11,469 2,676 1,821 1,388 926 926 926 926 926 926 16 Banks for Cooperatives 4,843 584 584 220 220 220 220 220 220 220 17 Farm Credit Banks1 5,081 33,216 48,153 61,405 63,381 63,409 64,506 65,743 65,657 65,553 18 Student Loan Marketing Association 915 1,505 2,720 5,000 5,000 5,000 5,000 5,000 5,000 5,000 19 Other 2 1 1 2 2 2 2 2 2 2 MEMO: 20 Federal Financing Bank debt1,8 51,298 67,383 87,460 113,567 114,961 117,475 120,241 121,261 122,623 124,357 Lending to federal and federally sponsored 21 Export-Import Bank4 6,898 8,353 10,654 13,305 13,305 13,305 13,829 13,829 13,823 13,954 22 Postal Service7 2,114 1,587 1,520 1,288 1,288 1,221 1,221 1,221 1,221 1,221 23 Tennessee Valley Authority 5,635 7,272 9,465 11,525 11,685 11,775 11,990 12,035 12,050 12,285 24 United States Railway Association7 356 436 492 198 202 202 207 207 207 195 Other Lending9 25 Farmers Home Administration 23,825 32,050 39,431 48,681 49,356 51,056 52,346 52,711 53,311 53,736 26 Rural Electrification Administration 4,604 6,484 9,1% 14,452 14,716 15,046 15,454 15,688 15,916 16,282 27 Other 6,951 9,696 13,982 19,118 19,409 19,870 20,194 20,570 21,095 21,684 1. In September 1977 the Farm Credit Banks issued their first consolidated and Urban Development; Small Business Administration; and the Veterans bonds, and in January 1979 they began issuing these bonds on a regular basis to Administration. replace the financing activities of the Federal Land Banks, the Federal Intermedi- 7. Off-budget. ate Credit Banks, and the Banks for Cooperatives. Line 17 represents those 8. The FFB, which began operations in 1974, is authorized to purchase or sell consolidated bonds outstanding, as well as any discount notes that have been obligations issued, sold, or guaranteed by other federal agencies. Since FFB issued. Lines 1 and 10 reflect the addition of this item. incurs debt solely for the purpose of lending to other agencies, its debt is not 2. Consists of mortgages assumed by the Defense Department between 1957 included in the main portion of the table in order to avoid double counting. and 1963 under family housing and homeowners assistance programs. 9. Includes FFB purchases of agency assets and guaranteed loans; the latter 3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. contain loans guaranteed by numerous agencies with the guarantees of any 4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. particular agency being generally small. The Farmers Home Administration item 5. Consists of debentures issued in payment of Federal Housing Administration consists exclusively of agency assets, while the Rural Electrification Administrainsurance claims. Once issued, these securities may be sold privately on the tion entry contains both agency assets and guaranteed loans. securities market. 6. Certificates of participation issued prior to fiscal 1969 by the Government National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing 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 a arranged to make delivery on short sales and those for which the securities commitment, that is, trade-date basis, including any such securities that have obtained have been used as collateral on borrowings, i.e., matched agreements. been sold under agreements to repurchase (RPs). The maturities of some 4. Includes both repurchase agreements undertaken to finance positions and repurchase agreements are sufficiently long, however, to suggest that the securi- "matched book" repurchase agreements. ties involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities to resell (reverse RPs). Before 1981, NOTE. Data for positions are averages of daily figures, in terms of par value, data for immediate positions include forward positions. based on the number of trading days in the period. Positions are shown net and are 2. Figures cover financing involving U.S. government and federal agency on a commitment basis. Data for financing are based on Wednesday figures, in securities, negotiable CDs, bankers acceptances, and commercial paper. terms of actual money borrowed or lent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • February 1983 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1982 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11997799 11998800 11998811 May' June July Aug/ Sept/ Oct/ Nov. 1 All issues, new and refunding1 43,365 48,367 47,732 5,705 5,793 5,624 6,527 6,504 8,339 9,638 Type of issue 2 General obligation 12,109 14,100 12,394 1,510 1,814 974 1,683 1,703 2,330 3,251 3 U.S. government loans2 53 38 34 10 16 22 25 30 30 34 4 Revenue 31,256 34,267 35,338 4,195 3,979 4,650 4,844 4,801 6,009 6,387 5 U.S. government loans2 67 57 55 38 45 49 52 54 57 57 Type of issuer 6 State 4,314 5,304 5,288 601 1,074 257 835 1,077 1,010 1,086 7 Special district and statutory authority 23,434 26,972 27,499 3,045 2,867 3,735 3,670 3,456 5,062 5,165 8 Municipalities, counties, townships, school districts 15,617 16,090 14,945 2,059 1,852 1,632 2,022 1,971 2,267 3,387 9 Issues for new capital, total 41,505 46,736 46,530 5,574 5,703 5,438 6,099 6,301 7,175 8,932 Use of proceeds 10 Education 5,130 4,572 4,547 484 727 293 516 831 562 712 11 Transportation 2,441 2,621 3,447 292 245 117 769 546 651 1,279 12 Utilities and conservation 8,594 8,149 10,037 1,363 830 1,272 685 283 1,323 1,928 13 Social welfare 15,968 19,958 12,729 2,102 2,307 2,745 2,515 2,542 2,665 2,157 14 Industrial aid 3,836 3,974 7,651 355 416 564 728 1,054 556 673 15 Other purposes 5,536 7,462 8,119 978 1,178 447 886 1,045 1,418 2,183 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 1982 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11997799 11998800 11998811 oorr uussee May June July Aug. Sept. Oct. Nov. 1 AH issues1 51,533 73,694 69,992 7,106 4,546 6,162 8,757 7,748 9,235 8,710 2 40,208 53,206 44,643 4,420 2,836 3,919 6,509 5,486 6,706 5,412 Type of offering 3 Public 25,814 41,587 37,653 3,973 2.398 2,868 5,546 5,308 6,425 4,927 4 Private placement 14,394 11,619 6,989 447 438 1,051 963 178 281 485 Industry group 5 Manufacturing 9,678 15,409 12,325 608 211 1,638 1,602 1,615 1,871 2,138 6 Commercial and miscellaneous 3,948 6,693 5,229 490 329 493 1,202 465 387 523 7 Transportation 3,119 3,329 2,054 74 79 43 402 64 272 88 8 Public utility 8,153 9,557 8,963 1,186 699 717 902 900 1,539 1,246 9 Communication 4,219 6,683 4,280 315 174 84 205 301 163 115 10 Real estate and financial 11,094 11,534 11,793 1,748 1,344 944 2,196 2,141 2,474 1,302 11 Stocks2 11,325 20,489 25,349 2,686 1,710 2,243 2,248 2,262 2,529 3,298 Type 12 Preferred 3,574 3,631 1,797 888 67 645 622 447 611 573 13 Common 7,751 16,858 23,522 1,798 1,643 1,598 1,627 1,815 1,918 2,725 Industry group 14 Manufacturing 1,679 4,839 5,073 458 444 203 727 254 479 400 15 Commercial and miscellaneous 2,623 5,245 7,557 578 397 615 374 733 612 1,024 16 Transportation 255 549 779 35 52 17 62 84 80 225 17 Public utility 5,171 6,230 5,577 477 277 267 697 928 620 741 18 Communication 303 567 1,778 44 8 96 31 4 33 14 19 Real estate and financial 1,293 3,059 4,585 1,094 532 1,045 357 259 705 894 1. Figures, which represent gross proceeds of issues maturing in more than one 2. Beginning in August 1981, gross stock offerings include new equity volume year, sold for cash in the United States, are principal amount or number of units from swaps of debt for equity. multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as defined in the Securities Act of 1933, SOURCE. Securities and Exchange Commission and the Board of Governors of employee stock plans, investment companies other than closed-end, intracorpo- the Federal Reserve System. rate transactions, and sales to foreigners. 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 1982 IItteemm 11998811 11998822 May June July Aug. Sept. Oct. Nov/ Dec. INVESTMENT COMPANIES' 1 Sales of own shares2 20,596 45,675 2,345 3,061 3,304 4,322 4,709 5,668 5,815 5,291 2 Redemptions of own shares3 15,866 30,078 1,854 2,038 2,145 2,335 3,052 3,046 3,493 4,835 3 Net sales 4,730 15,597 491 1,023 1,159 1,987 1,657 2,622 2,322 456 4 Assets4 55,207 76,741 54,889 54,238 54,592 62,212 63,783 70,964 74,864 76,741 5 Cash position5 5,277 5,999 5,992 6,298 5,992 6,039 5,556 5,948 5,838 5,999 6 Other 49,930 70,742 48,896 47,940 48,600 56,173 58,227 65,016 69,026 70,742 1. Excluding money market funds. 5. Also includes all U.S. government securities and other short-term debt 2. Includes reinvestment of investment income dividends. Excludes reinvest- securities. ment of capital gains distributions and share issue of conversions from one fund to another in the same group. NOTE. Investment Company Institute data based on reports of members, which 3. Excludes share redemption resulting from conversions from one fund to comprise substantially all open-end investment companies registered with the another in the same group. Securities 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. 1981 1982 AAccccoouunntt 11997799 11998800 11998811 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Corporate profits with inventory valuation and capital consumption adjustment 194.8 181.6 190.6 200.3 185.1 193.1 183.9 157.1 155.4 166.2 ?. Profits before tax 252.7 242.4 232.1 253.1 225.4 233.3 216.5 171.6 171.7 180.3 3 Profits tax liability 87.6 84.6 81.2 91.5 79.2 82.4 71.6 56.7 55.3 60.9 4 Profits after tax 165.1 157.8 150.9 161.6 146.2 150.9 144.9 114.9 116.3 119.4 5 Dividends 52.7 58.1 65.1 61.5 64.0 66.8 68.1 68.8 69.3 70.5 6 Undistributed profits 112.4 99.7 85.8 100.1 82.2 84.1 76.8 46.1 47.0 48.8 7 Inventory valuation -43.1 -43.0 -24.6 -35.5 -22.8 -23.0 -17.1 -4.4 -9.4 -10.3 8 Capital consumption adjustment -14.8 -17.8 -16.8 -17.3 -17.5 -17.1 -15.5 -10.1 -6.9 -3.8 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 • February 1983 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1981 1982 AAccccoouunntt 11997766 11997777 11997788 11997799 11998800 Q2 Q3 Q4 Ql Q2 1 Current assets 827.4 912.7 1,043.7 1,218.2 1,333.5 1,388.3 1,410.9 1,427.1 1,423.6 1,419.4 2 Cash 88.2 97.2 105.5 118.0 127.1 126.2 125.1 131.7 121.3 123.4 3 U.S. government securities 23.5 18.2 17.3 17.0 19.3 19.9 18.0 17.9 17.1 17.4 4 Notes and accounts receivable 292.9 330.3 388.0 461.1 510.6 533.1 542.4 536.7 537.8 534.4 5 Inventories 342.5 376.9 431.6 505.5 543.7 565.3 577.0 587.1 593.8 589.2 6 Other 80.3 90.1 101.3 116.7 132.7 143.8 148.3 153.6 153.6 155.0 7 Current liabilities 495.1 557.1 669.3 807.8 890.9 931.5 967.2 980.0 985.7 982.6 8 Notes and accounts payable 282.1 317.6 382.9 461.2 515.2 525.9 549.5 562.9 555.0 554.9 9 Other 213.0 239.6 286.4 346.6 375.7 405.5 417.7 417.1 430.8 427.8 10 Net working capital 332.4 355.5 374.4 410.5 442.6 456.8 443.7 447.1 437.9 436.8 11 MEMO: Current ratio1 1.671 1.638 1.559 1.508 1.497 1.490 1.459 1.456 1.444 1.445 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. 1981 1982 IInndduussttrryy11 11998800 11998811 1199882211 Q2 Q3 Q4 Ql Q2 Q3 Q41 1 Total nonfarm business 295.63 321.49 319.99 316.73 328.25 327.83 327.72 323.22 315.79 315.21 Manufacturing 2 Durable goods industries 58.91 61.84 57.95 63.10 62.58 60.78 60.84 59.03 57.14 55.80 3 Nondurable goods industries 56.90 64.95 64.72 62.40 67.53 66.14 67.48 64.74 62.32 64.70 Nonmanufacturing 4 Mining 13.51 16.86 16.05 16.80 17.55 16.81 17.60 16.56 14.63 15.56 Transportation 5 Railroad 4.25 4.24 4.12 4.38 4.18 4.18 4.56 4.73 3.94 3.33 6 Air 4.01 3.81 3.97 3.29 3.34 4.82 3.20 3.54 4.11 5.02 7 Other 3.82 4.00 3.71 4.04 4.09 4.12 4.23 4.06 3.24 3.48 Public utilities 8 Electric 28.12 29.74 33.06 29.32 30.54 31.14 30.95 32.26 34.98 33.89 9 Gas and other 7.32 8.65 8.56 8.53 9.01 8.60 9.17 9.14 8.40 7.78 10 Trade and services 81.79 86.33 86.42 85.88 87.55 88.33 87.80 88.85 87.31 82.01 11 Communication and other2 36.99 41.06 41.43 39.02 41.89 42.92 41.89 40.33 39.73 43.65 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 1982 AAccccoouunntt 11997777 11997788 11997799 11998800 Q2 Q3 Q4 Ql Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 44.0 52.6 65.7 73.6 79.0 84.5 85.5 85.1 88.0 88.3 2 Business 55.2 63.3 70.3 72.3 78.2 76.9 80.6 80.9 82.6 82.2 3 Total 99.2 116.0 136.0 145.9 157.2 161.3 166.1 166.0 170.6 170.5 4 LESS: Reserves for unearned income and losses.... 12.7 15.6 20.0 23.3 25.7 27.7 28.9 29.1 30.2 30.4 5 Accounts receivable, net 86.5 100.4 116.0 122.6 131.4 133.6 137.2 136.9 140.4 140.1 6 Cash and bank deposits 2.6 3.5 7 Securities .9 1.3 II 2244..9911 27.5 31.6 34.5 34.2 35.0 37.3 39.1 8 All other 14.3 17.3 J 9 Total assets 104.3 122.4 140.9 150.1 163.0 168.1 171.4 171.9 177.8 179.2 LIABILITIES 10 Bank loans 5.9 6.5 8.5 13.2 14.4 14.7 15.4 15.4 14.5 16.8 11 Commercial paper 29.6 34.5 43.3 43.4 49.0 51.2 51.2 46.2 50.3 46.7 Debt 12 Short-term, n.e.c 6.2 8.1 8.2 7.5 8.5 11.9 9.6 9.0 9.3 9.9 13 Long-term, n.e.c 36.0 43.6 46.7 52.4 52.6 50.7 54.8 59.0 60.3 60.9 14 Other 11.5 12.6 14.2 14.3 17.0 17.1 17.8 19.0 18.9 20.5 15 Capital, surplus, and undivided profits 15.1 17.2 19.9 19.4 21.5 22.4 22.8 23.3 24.5 24.5 16 Total liabilities and capital 104.3 122.4 140.9 150.1 163.0 168.1 171.4 171.9 177.8 179.2 1. Beginning Ql 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.53 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments receivable AAAccccccooouuunnntttsss rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg 1982 1982 1982 NNNooovvv... 333000,,, 111999888222''' Sept. Oct. Nov. Sept. Oct. Nov. Sept. Oct. Nov. 1 Total 80,929 208 -1,215 -1,891 19,991 18,041 22,319 19,783 19,256 24,210 2 Retail automotive (commercial vehicles) 12,279 -59 -82 430 869 842 1,330 928 924 900 3 Wholesale automotive 12,552 52 -596 -1,416 6,040 4,500 6,637 5,988 5,096 8,053 4 Retail paper on business, industrial, and farm equipment 28,137 362 -608 -476 1,148 971 1,297 786 1,579 1,773 5 Loans on commercial accounts receivable and factored commercial accounts receivable 9,202 -78 54 -13 10,279 10,102 11,310 10,357 10,048 11,323 6 All other business credit 18,759 -69 17 -416 1,655 1,626 1,745 1,724 1,609 2,161 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic NonfinancialS tatistics • February 1983 1.54 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1982 IItteemm 11998800 11998811 11998822 June July Aug. Sept. Oct. Nov. Dec. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Termsx 1 Purchase price (thousands of dollars) 83.4 90.4 94.6 89.4 98.4 91.4 95.0 99.1 2 Amount of loan (thousands of dollars) 59.2 65.3 69.8 66.2 73.1 66.5 71.6 74.4 3 Loan/price ratio (percent) 73.2 74.8 76.6 77.0 77.3 74.1 78.7 77.9 4 Maturity (years) 28.2 27.7 27.6 27.4 28.4 26.4 28.1 28.4 5 Fees and charges (percent of loan amount)2 2.09 2.67 2.95 3.00 3.15 2.87 3.04 2.74 6 Contract rate (percent per annum) 12.25 14.16 14.47 14.74 15.01 15.05 14.34 13.86 Yield (percent per annum) 7 FHLBB series3 12.65 14.74 15.12 15.40 15.70 15.68 14.98 14.4K 8 HUD series4 13.95 16.52 15.79 16.75 16.50 15.40 15.05 13.95 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.44 16.31 15.31 16.73 16.29 14.61 14.03 12.99 10 GNMA securities6 12.55 15.29 14.68 15.84 15.56 14.51 13.57 12.83 FNMA auctions7 11 Government-underwritten loans 14.11 16.70 16.22 15.78 12 Conventional loans 14.43 16.64 16.73 15.78 15.36 13.92 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total 55,104 58,675 66,031 65,008 66,158 67,810 68,841 69,152 70,126 71,814 14 FHA/VA-insured 37,365 39,341 39,718 39,829 39,853 39,922 39,871 39,523 39,174 39,057 15 Conventional 17,725 19,334 26,312 25,179 26,305 27,888 28,970 29,629 30,952 32,757 Mortgage transactions (during period) 16 Purchases 8,099 6,112 15,116 1,223 1,354 1,931 1,670 1,449 1,681 2,495 17 Sales 0 2 0 0 0 0 0 0 0 0 Mortgage commitments8 18 Contracted (during period) 8,083 9,331 22,105 1,583 2,016 1,820 1,482 1,426 2,795 3,055 19 Outstanding (end of period) 3,278 3,717 7,606 7,206 7,674 6,900 6,587 6,268 7,286 7,606 Auction of 4-month commitments to buy Government-underwritten loans 20 Offered 8,605.4 2,487.2 307.4 33.1 8.9 43.3 16.4 2.5 21 sy 4.6 21 Accepted 4,002.0 1,478.0 104.3 7.4 0.0 5.7 0.0 0.0 0.0 0.0 Conventional loans 22 Offered 3,639.2 2,524.7 445.3 59.0 37.2 70.1 27.5 13.6 22.1 23.2 23 Accepted 1,748.5 1,392.3 237.6 33.1 23.6 42.9 0.0 8.9 11.4 15.3 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 24 Total 4,362 5,245 n.a. 5,295 5,309 5,201 5,207 4,957 4,676 n.a. 25 FHA/VA 2,116 2,236 n.a. 2,225 2,232 2,216 2,225 1,016 1,012 n.a. 26 Conventional 2,246 3,010 n.a. 3,069 3,077 2,985 2,982 3,891 3,663 n.a. Mortgage transactions (during period) 27 Purchases 3,723 3,789 n.a. 1,581 2,237 2,529 1,799 2,000 1,917 n.a. 28 Sales 2,527 3,531 n.a. 1,562 2,204 2,619 1,923 2,197 2,182 n.a. Mortgage commitments10 29 Contracted (during period) 3,859 6,974 n.a. 3,166 2,189 2,768 2,892 2,506 1,714 n.a. 30 Outstanding (end of period) 447 3,518 n.a. 8,970 8,544 9,318 10,211 10,572 10,407 n.a. 1. Weighted averages based on sample surveys of mortgages originated by ing prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the major institutional lender groups. Compiled by the Federal Home Loan Bank prevailing ceiling rate. Monthly figures are unweighted averages of Monday Board in cooperation with the Federal Deposit Insurance Corporation. quotations for the month. 2. Includes all fees, commissions, discounts, and "points" paid (by the 7. Average gross yields (before deduction of 38 basis points for mortgage borrower or the seller) to obtain a loan. servicing) on accepted bids in Federal National Mortgage Association's auctions 3. Average effective interest rates on loans closed, assuming prepayment at the of 4-month commitments to purchase home mortgages, assuming prepayment in end of 10 years. 12 years for 30-year mortgages. No adjustments are made for FNMA commitment 4. Average contract rates on new commitments for conventional first mort- fees or stock related requirements. Monthly figures are unweighted averages for gages, rounded to the nearest 5 basis points; from Department of Housing and auctions conducted within the month. Urban Development. 8. Includes some multifamily and nonprofit hospital loan commitments in 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing addition to 1- to 4-family loan commitments accepted in FNMA's free market Administration-insured first mortgages for immediate delivery in the private auction system, and through the FNMA-GNMA tandem plans. secondary 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, assum- 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 1981 1982 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998800 11998811 11998822 Q3 Q4 Ql Q2' Q3' Q4 1 All holders 1,471,786 1,583,732 1,655,773 1,561,813' 1,583,732' 1,603,450' 1,624,707 1,633,618 655,773 2 1- to 4-family 986,979 1,060,633 1,105,641 1,047,799' 1,060,633' 1,071,462' 1,082,971 1,089,545 105,641 3 Multifamily 137,134 141,442 148,300 140,243' 141,442' 143,812' 145,559 145,917 148,300 4 Commercial 255,655 279,930 294,709 273,765' 279,930' 284,261' 290,693 291,740 294,709 5 Farm 92,018 101,727 107,123 100,006 101,727 103,915' 105,484 106,416 107,123 6 Major financial institutions 997,168 1,040,827' 1,021,225 1,034,032' 1,040,827' 1,041,702' 1,042,904 1,027,027 1,021,225 7 Commercial banks1 263,030 284,536 301,742 279,017 284,536 289,365 294,022 298,342 301,742 8 1- to 4-family 160,326 170,013 177,122 167,550 170,013 171,350 172,596 175,126 177,122 9 Multifamily 12,924 15,132 15,841 14,481 15,132 15,338 15,431 15,666 15,841 10 Commercial 81,081 91,026 100,269 88,588 91,026 94,256 97,522 99,050 100,269 11 Farm 8,699 8,365 8,510 8,398 8,365 8,421 8,473 8,500 8,510 12 Mutual savings banks 99,865 99,997 93,882 99,994 99,997 97,464 96,346 94,382 93,882 13 1- to 4-family 67,489 68,187 63,708 68,116 68,187 66,305 65,381 63,849 63,708 14 Multifamily 16,058 15,960 14,946 15,939 15,960 15,536 15,338 15,026 14,946 15 Commercial 16,278 15,810 15,200 15,909 15,810 15,594 15,598 15,479 15,200 16 Farm 40 40 28 30 40 29 29 28 28 17 Savings and loan associations 503,192 518,547' 484,297 518,985' 518,547' 516,111' 512,997 493,899 484,297 18 1- to 4-family 419,763 433,142' 400,563 433,923' 433,142' 430,178' 425,890 410,035 400,563 19 Multifamily 38,142 37,699' 36,177 37,990' 37,699' 37,986' 38,321 36,894 36,177 20 Commercial 45,287 47,706 47,557 47,072' 47,706' 47,947 48,786 46,970 47,557 21 Life insurance companies 131,081 137,747 141,304 136,036 137,747 138,762 139,539 140,404 141,304 22 1- to 4-family 17,943 17,201 16,975 17,376 17,201 17,086 16,451 16,865 16,975 23 Multifamily 19,514 19,283 19,107 19,441 19,283 19,199 18,982 18,967 19,107 24 Commercial 80,666 88,163 92,322 86,070 88,163 89,529 91,113 91,640 92,322 25 Farm 12,958 13,100 12,900 13,149 13,100 12,948 12,993 12,932 12,900 26 Federal and related agencies 114,300 126,112 138,561 121,772 126,112 128,721 131,485 135,008 138,561 27 Government National Mortgage Association... 4,642 4,765 4,556 4,382 4,765 4,438 4,669 4,110 4,556 28 1- to 4-family 704 693 683 696 693 689 688 682 683 29 Multifamily 3,938 4,072 3,873 3,686 4,072 3,749 3,981 3,428 3,873 30 Farmers Home Administration 3,492 2,235 872 1,562 2,235 2,469 1,335 947 872 31 1- to 4-family 916 914 242 500 914 715 491 302 242 32 Multifamily 610 473 25 242 473 615 179 46 25 33 Commercial 411 506 150 325 506 499 256 164 150 34 Farm 1,555 342 455 495 342 640 409 435 455 35 Federal Housing and Veterans Administration 5,640 5,999 6,130 6,005 5,999 6,003 5,908 5,921 6,130 36 1- to 4-family 2,051 2,289 2,280 2,240 2,289 2,266 2,218 2,171 2,280 37 Multifamily 3,589 3,710 3,850 3,765 3,710 3,737 3,690 3,750 3,850 38 Federal National Mortgage Association 57,327 61,412 71,814 59,682 61,412 62,544 65,008 68,841 71,814 39 1- to 4-family 51,775 55,986 66,500 54,227 55,986 57,142 59,631 63,495 66,500 40 Multifamily 5,552 5,426 5,314 5,455 5,426 5,402 5,377 5,346 5,314 41 Federal Land Banks 38,131 46,446 50,433 44,708 46,446 47,947 49,270 49,983 50,433 42 1- to 4-family 2,099 2,788 3,077 2,605 2,788 2,874 2,954 3,029 3,077 43 Farm 36,032 43,658 47,356 42,103 43,658 45,073 46,316 46,954 47,356 44 Federal Home Loan Mortgage Corporation 5,068 5,255 4,756 5,433 5,255 5,320 5,295 5,206 4,756 45 1- to 4-family 3,873 4,018 3,494 4,166 4,018 4,075 4,042 3,944 3,494 46 Multifamily 1,195 1,237 1,262 1,267 1,237 1,245 1,253 1,262 1,262 47 Mortgage pools or trusts2 142,258 162,990 216,487 158,140 162,990 172,292 183,647 198,365 216,487 48 Government National Mortgage Association... 93,874 105,790 119,149 103,750 105,790 108,592 111,459 114,776 119,149 49 1- to 4-family 91,602 103,007 116,040 101,068 103,007 105,701 108,487 111,728 116,040 50 Multifamily 2,272 2,783 3,109 2,682 2,783 2,891 2,972 3,048 3,109 51 Federal Home Loan Mortgage Corporation.... 16,854 20,560 55,728 17,936 20,560 26,745 33,249 43,254 55,728 52 1- to 4-family 13,471 16,605 46,903 14,401 16,605 21,781 27,193 35,686 46,903 53 Multifamily 3,383 3,955 8,825 3,535 3,955 4,964 6,056 7,568 8,825 54 Federal National Mortgage Association3 n.a. 717 14,450 n.a. 717 2,786 4,556 8,133 14,450 55 1- to 4-family n.a. 717 14,450 n.a. 717 2,786 4,556 8,133 14,450 56 Farmers Home Administration 31,530 36,640 41,610 36,454 36,640 36,955 38,939 40,335 41,610 57 1- to 4-family 16,683 18,378 20,729 (8,407 18,378 18,740 19,357 20,079 20,729 58 Multifamily 2,612 3,426 4,619 3,488 3,426 3,447 4,044 4,344 4,619 59 Commercial 5,271 6,161 7,306 6,040 6,161 6,351 6,762 7,056 7,306 60 Farm 6,964 8,675 8,956 8,519 8,675 8,417 8,776 8,856 8,956 61 Individual and others4 218,060 253,808 279,500 247,869 253,803 260,735' 266,671 273,218 279,500 62 1- to 4-family5 138,284 167,412 187,325 162,524 167,412 172,56c 177,592 182,554 187,325 63 Multifamily 27,345 28,286 31,352 28,272 28,286 29,703' 29,935 30,572 31,352 64 Commercial 26,661 30,558 31,905 29,761 30,558 30,085' 30,656 31,381 31,905 65 Farm 25,770 27,547 28,918 27,312 27,547 28,387' 28,488 28,711 28,918 1. Includes loans held by nondeposit trust companies but not bank trust NOTE. Based on data from various institutional and governmental sources, with departments. 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 of guaranteed by the agency indicated. nonfarm mortgage debt by type of property, if not reported directly, and 3. Outstanding balances on FNMA's issues of securities backed by pools of interpolations and extrapolations when required, are estimated mainly by the conventional mortgages held in trust. The program was implemented by FNMA in Federal Reserve. Multifamily debt refers to loans on structures of five or more October 1981. units. 4. Other holders include mortgage companies, real estate investment trusts, state and local credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and U.S. agencies for which amounts are small or for which separate data are not readily available. 5. Includes a new estimate of residential mortgage credit provided by individuals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • February 1983 1.56 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1982 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11997799 11998800 11998811 June July Aug. Sept. Oct. Nov. Dec. Amounts outstanding (end of period) 1 Total 312,024 313,472 333,375 331,851 332,471 333,808 335,948 334,871 336,991 343,372 By major holder 2 Commercial banks 154,177 147,013 149,300 146,775 146,745 147,275 148,280 147,926 148,270 150,643 3 Finance companies.... 68,318 76,756 89,818 93,009 93,353 93,207 93,357 92,541 93,462 94,322 4 Credit unions 46,517 44,041 45,954 45,882 45,698 46,154 46,846 46,645 46,832 47,253 5 Retailers2 28,119 28,448 29,551 26,645 26,710 26,751 26,829 27,046 27,639 30,202 6 Savings and loans 8,424 9,911 11,598 12,312 12,520 12,833 13,051 13,457 13,672 13,891 7 Gasoline companies ... 3,729 4,468 4,403 4,398 4,600 4,714 4,669 4,322 4,141 4,063 8 Mutual savings banks.. 2,740 2,835 2,751 2,830 2,845 2,874 2,916 2,934 2,975 2,998 By major type of credit 9 Automobile 116,362 116,838 126,431 128,415 128,359 128,281 129,085 128,619 129,594 130,504 10 Commercial banks .. 67,367 61,536 59,181 58,140 58,131 58,222 58,762 58,796 58,996 59,128 11 Indirect paper .... 38,338 35,233 35,097 34,903 34,979 34,996 35,449 35,490 35,686 35,962 12 Direct loans 29,029 26,303 24,084 23,237 23,152 23,226 23,313 23,306 23,310 23,166 13 Credit unions 22,244 21,060 21,975 21,940 21,852 22,071 22,402 22,306 22,395 22,596 14 Finance companies .. 26,751 34,242 45,275 48,335 48,376 47,988 47,921 47,518 48,203 48,780 15 Revolving 56,937 58,352 63,049 59,302 59,824 60,475 60,932 60,811 61,500 66,273 16 Commercial banks .. 29,862 29,765 33,110 31,974 32,205 32,691 33,104 33,085 33,371 35,777 17 Retailers 23,346 24,119 25,536 22,930 23,019 23,070 23,159 23,404 23,988 26,433 18 Gasoline companies . 3,729 4,468 4,403 4,398 4,600 4,714 4,669 4,322 4,141 4,063 19 Mobile home 16,838 17,322 18,486 18,543 18,601 18,741 18,778 18,814 18,821 18,768 20 Commercial banks .. 10,647 10,371 10,300 9,924 9,857 9,790 9,723 9,631 9,578 9,464 21 Finance companies .. 3,390 3,745 4,494 4,731 4,801 4,916 4,953 4,971 4,970 4,965 22 Savings and loans ... 2,307 2,737 3,203 3,400 3,458 3,544 3,604 3,716 3,775 3,836 23 Credit unions 494 469 489 488 486 491 498 496 498 503 24 Other. 121,887 120,960 125,409 125,591 125,687 126,311 127,153 126,627 127,076 127,827 25 Commercial banks .. 46,301 45,341 46,709 46,737 46,552 46,572 46,691 46,414 46,325 46,274 26 Finance companies .. 38,177 38,769 40,049 39,943 40,176 40,303 40,483 40,052 40,289 40,577 27 Credit unions 23,779 22,512 23,490 23,454 23,360 23,592 23,946 23,844 23,939 24,154 28 Retailers 4,773 4,329 4,015 3,715 3,691 3,681 3,670 3,642 3,651 3,769 29 Savings and loans ... 6,117 7,174 8,395 8,912 9,063 9,289 9,447 9,741 9,897 10,055 30 Mutual savings banks 2,740 2,835 2,751 2,830 2,845 2,874 2,916 2,934 2,975 2,998 Net change (during period)3 31 Total 38,381 1,448 19,894 1,349 570 66 1,092 -324 2,523 2,192 By major holder 32 Commercial banks .... 18,161 -7,163 2,284 -100 -66 -252 481 -49 904 1,099 33 Finance companies .... 14,020 8,438 13,062 874 195 -142 115 -393 1,133 845 34 Credit unions 2,185 -2,475 1,913 38 -69 179 346 -32 418 169 35 Retailers2 2,132 329 1,103 304 297 -109 60 -88 -98 -35 36 Savings and loans 1,327 1,485 1,682 187 196 268 181 328 194 171 37 Gasoline companies ... 509 739 -65 38 3 65 -115 -115 -39 -93 38 Mutual savings banks.. 47 95 -85 8 14 57 24 25 11 36 By major type of credit 39 Automobile 14,715 477 9,595 655 61 -402 505 -78 1,816 1,303 40 Commercial banks .. 6,857 -5,830 -2,355 -240 101 -146 435 52 600 479 41 Indirect paper .... 4,488 -3,104 -136 -52 225 -129 332 72 496 463 42 Direct loans 2,369 -2,726 -2,219 -188 -124 -17 103 -20 104 16 43 Credit unions 1,044 -1,184 914 28 -26 65 159 -12 232 62 44 Finance companies .. 6,814 7,491 11,033 867 -14 -321 -89 -118 984 762 45 Revolving 8,628 1,415 4,697 507 612 143 210 108 107 532 46 Commercial banks .. 5,521 -97 3,345 219 266 162 243 246 202 680 47 Retailers 2,598 773 1,417 250 343 -84 82 -23 -56 -55 48 Gasoline companies . 509 739 -65 38 3 65 -115 -115 -39 -93 49 Mobile home 1,603 483 1,161 67 63 141 10 -4 40 -68 50 Commercial banks .. 1,102 -276 -74 -58 -57 -62 -67 -97 -19 -90 51 Finance companies .. 238 355 749 64 73 108 20 -7 3 -25 52 Savings and loans ... 240 430 466 60 47 94 54 100 53 44 53 Credit unions 23 -25 20 1 0 1 3 0 3 3 54 Other 13,435 -927 4,441 120 -166 184 367 -350 560 425 55 Commercial banks .. 4,681 -960 1,368 -21 -376 -206 -130 -250 121 30 56 Finance companies .. 6,986 592 1,280 -57 136 71 184 -268 146 108 57 Credit unions 1,118 -1,266 975 9 -43 113 184 -20 183 104 58 Retailers -466 -444 -314 54 -46 -25 -22 -65 -42 20 59 Savings and loans ... 1,087 1,056 1,217 127 149 174 127 228 141 127 60 Mutual savings banks 47 95 -85 8 14 57 24 25 11 36 1. The Board's series cover most short- and intermediate-term credit extended 3. Net change equals extensions minus liquidations (repayments, charge-offs to individuals through regular business channels, usually to finance the purchase and other credit); figures for all months are seasonally adjusted. of consumer goods and services or to refinance debts incurred for such purposes, and scheduled to be repaid (or with the option of repayment) in two or more NOTE; Total consumer noninstallment credit outstanding—credit scheduled to installments. be repaid in a lump sum, including single-payment loans, charge accounts, and 2. Includes auto dealers and excludes 30-day charge credit held by travel and service credit—amounted to, not seasonally adjusted, $71.3 billion at the end of entertainment companies. 1979, $74.8 billion at the end of 1980, and $80.2 billion at the end of 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 Millions of dollars; monthly data are seasonally adjusted. 1982 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11997799 11998800 11998811 June July Aug. Sept. Oct. Nov. Dec. Extensions 1 Total 324,777 306,076 336,341 29,737 27,514 27,579 28,268 28,062 31,610 30,462 By major holder 2 Commercial banks 154,733 134,960 146,186 13,460 12,485 12,499 12,750 13,322 14,616 13,992 3 Finance companies 61,518 60,801 66,344 5,700 4,607 4,685 4,894 4,427 6,231 5,752 4 Credit unions 34,926 29,594 35,444 2,887 2,711 2,904 3,092 2,897 3,438 3,315 5 Retailers1 47,676 49,942 53,430 4,762 4,785 4,396 4,684 4,431 4,383 4,518 6 Savings and loans 5,901 6,621 8,142 785 803 863 786 961 884 871 7 Gasoline companies 18,005 22,253 24,902 1,969 1,944 2,021 1,876 1,835 1,867 1,799 8 Mutual savings banks 2,018 1,905 1,893 174 179 211 186 189 191 215 By major type of credit 9 Automobile 93,901 83,454 94,404 8,182 7,332 7,112 7,546 7,970 10,329 9,618 10 Commercial banks 53,554 41,109 42,792 3,404 3,687 3,454 3,702 4,2% 4,7% 4,472 11 Indirect paper 29,623 22,558 24,941 2,036 2,324 1,957 2,077 2,785 3,016 2,744 12 Direct loans 23,931 18,551 17,851 1,368 1,363 1,497 1,625 1,511 1,780 1,728 13 Credit unions 17,397 15,294 18,084 1,497 1,389 1,499 1,579 1,514 1,786 1,743 14 Finance companies 22,950 27,051 33,527 3,281 2,256 2,159 2,265 2,160 3,747 3,403 1 Revolving 120,174 128,068 140,135 13,361 12,551 12,497 12,464 12,340 12,489 12,336 16 Commercial banks 61,048 61,593 67,370 7,141 6,237 6,512 6,336 6,455 6,638 6,473 17 Retailers 41,121 44,222 47,863 4,251 4,370 3,964 4,252 4,050 3,984 4,064 18 Gasoline companies 18,055 22,253 24,902 1,969 1,944 2,021 1,876 1,835 1,867 1,799 19 Mobile home 6,471 5,093 6,028 459 441 581 452 476 484 455 70 Commercial banks 4,542 2,937 3,106 180 173 194 191 174 237 196 21 Finance companies 797 898 1,313 129 133 193 105 81 84 84 22 Savings and loans 948 1,146 1,432 137 123 181 140 207 147 157 23 Credit unions 184 113 176 13 12 13 16 14 16 18 74 104,231 89,461 95,774 7,735 7,190 7,389 7,806 7,276 8,308 8,053 25 Commercial banks 35,589 29,321 32,918 2,735 2,388 2,339 2,521 2,397 2,945 2,851 26 Finance companies 37,771 32,852 31,504 2,290 2,218 2,333 2,524 2,186 2,400 2,265 27 Credit unions 17,345 14,187 17,182 1,377 1,310 1,392 1,497 1,369 1,636 1,554 28 Retailers 6,555 5,720 5,567 511 415 432 432 381 399 454 29 Savings and loans 4,953 5,476 6,710 648 680 682 646 754 737 714 30 Mutual savings banks 2,018 1,905 1,893 174 179 211 186 189 191 215 Liquidations 31 Total 286,396 304,628 316,447 28,388 26,944 27,513 27,176 28,386 29,087 28,270 By major holder 32 Commercial banks 136,572 142,123 143,902 13,560 12,551 12,751 12,269 13,371 13,712 12,893 33 Finance companies 47,498 52,363 53,282 4,826 4,412 4,827 4,779 4,820 5,098 4,907 34 Credit unions 32,741 32,069 33,531 2,849 2,780 2,725 2,746 2,929 3,020 3,146 35 Retailers1 45,544 49,613 52,327 4,458 4,488 4,505 4,624 4,519 4,481 4,553 36 Savings and loans 4,574 5,136 6,640 598 607 595 605 633 690 700 37 Gasoline companies 17,496 21,514 24,967 1,931 1,941 1,956 1,991 1,950 1,906 1,892 38 Mutual savings banks 1,971 1,810 1,978 166 165 154 162 164 180 179 By major type of credit 39 Automobile 7799,,118866 8822,,997777 8844,,880099 7,527 7,271 7,514 7,041 8,048 8,513 8,315 40 Commercial banks 46,697 46,939 45,147 3,644 3,586 3,600 3,267 4,244 4,1% 3,993 41 Indirect paper 25,135 25,662 25,077 2,088 2,099 2,086 1,745 2,713 2,520 2,281 42 Direct loans 21,562 21,277 20,070 1,556 1,487 1,514 1,522 1,531 1,676 1,712 43 Credit unions 16,353 16,478 17,169 1,469 1,415 1,434 1,420 1,526 1,554 1,681 44 Finance companies 16,136 19,560 22,494 2,414 2,270 2,480 2,354 2,278 2,763 2,641 45 Revolving 111,546 126,653 135,438 12,854 11,939 12,354 12,254 12,232 12,382 11,804 46 Commercial banks 55,527 61,690 64,025 6,922 5,971 6,350 6,093 6,209 6,436 5,793 47 Retailers 38,523 43,449 46,446 4,001 4,027 4,048 4,170 4,073 4,040 4,119 48 Gasoline companies 17,496 21,514 24,967 1,931 1,941 1,956 1,991 1,950 1,906 1,892 49 Mobile home 4,868 4,610 4,867 392 378 440 442 480 444 523 50 Commercial banks 3,440 3,213 3,180 238 230 256 258 271 256 286 51 Finance companies 559 543 564 65 60 85 85 88 81 109 52 Savings and loans 708 716 966 77 76 87 86 107 94 113 53 Credit unions 161 138 156 12 12 12 13 14 13 15 54 90,796 90,388 91,333 7,615 7,356 7,205 7,439 7,626 7,748 7,628 55 Commercial banks 30,908 30,281 31,550 2,756 2,764 2,545 2,651 2,647 2,824 2,821 56 Finance companies 30,803 32,260 30,224 2,347 2,082 2,262 2,340 2,454 2,254 2,157 57 Credit unions 16,227 15,453 16,207 1,368 1,353 1,279 1,313 1,389 1,453 1,450 58 Retailers 7,021 6,164 5,881 457 461 457 454 446 441 434 59 Savings and loans 3,866 4,420 5,493 521 531 508 519 526 596 587 60 Mutual savings banks 1,971 1,810 1,978 166 165 154 162 164 180 179 1. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 DomesticN onfinancial Statistics • February 1983 1.58 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1979 1980 1981 1982 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11997766 11997777 11997788 11997799 11998800 11998811 H2 HI H2 HI H2 HI Nonfinancial sectors 1 Total funds raised 273.5 334.3 401.7 402.0 397.1 406.9 406.6 363.0 431.2 438.2 375.7 380.6 2 Excluding equities 262.7 331.2 402.3 409.1 382.2 418.4 411.0 354.2 410.2 436.7 400.2 381.0 By sector and instrument 3 U.S. government 69.0 56.8 53.7 37.4 79.2 87.4 46.1 63.3 95.1 81.9 92.9 98.1 4 Treasury securities 69.1 57.6 55.1 38.8 79.8 87.8 46.6 63.9 95.7 82.4 93.2 98.6 5 Agency issues and mortgages -.1 -.9 -1.4 -1.4 -.6 -.5 -.5 -.6 -.6 -.5 -.4 -.5 6 All other nonfinancial sectors 204.5 277.5 348.0 364.7 317.9 319.6 360.5 299.8 336.1 356.3 282.8 282.6 7 Corporate equities 10.8 3.1 -.6 -7.1 15.0 -11.5 -4.3 8.9 21.0 1.6 -24.5 -.4 8 Debt instruments 193.6 274.4 348.7 371.7 303.0 331.0 364.9 290.9 315.0 354.8 307.3 282.9 9 Private domestic nonfinancial sectors 184.9 263.6 314.8 343.6 288.7 292.3 332.2 268.8 308.5 321.7 262.9 266.5 10 Corporate equities 10.5 2.7 -.1 -7.8 12.9 -11.5 -6.1 6.9 18.8 .9 -23.8 -.1 11 Debt instruments 174.3 260.9 314.9 351.5 275.8 303.7 338.3 261.9 289.7 320.8 286.7 266.7 12 Debt capital instruments 123.6 169.8 198.7 216.0 204.1 175.0 213.1 203.8 204.4 196.5 153.5 156.7 13 State and local obligations 15.7 21.9 28.4 29.8 35.9 32.9 32.8 30.7 41.0 35.1 30.6 47.9 14 Corporate bonds 22.8 21.0 20.1 22.5 33.2 23.9 22.6 37.3 29.0 24.7 23.0 18.5 Mortgages 15 Home mortgages 63.9 94.3 112.1 120.1 96.7 78.6 113.9 96.5 96.9 95.2 62.0 59.5 16 Multifamily residential 3.9 7.1 9.2 7.8 8.8 4.6 6.9 8.1 9.5 5.1 4.1 5.1 17 Commercial 11.6 18.4 21.7 23.9 20.2 25.3 25.4 20.3 20.1 27.4 23.2 20.3 18 Farm 5.7 7.1 7.2 11.8 9.3 9.8 11.5 10.9 7.8 9.0 10.5 5.4 19 Other debt instruments 50.7 91.1 116.2 135.5 71.7 128.8 125.2 58.1 85.4 124.3 133.2 110.0 20 Consumer credit 25.4 40.2 48.8 45.4 4.9 25.3 41.0 -3.3 13.0 29.4 21.2 16.0 21 Bank loans n.e.c 4.4 26.7 37.1 49.2 35.4 51.1 39.6 18.0 52.7 47.7 54.6 78.2 22 Open market paper 4.0 2.9 5.2 11.1 6.6 19.2 17.4 20.3 -7.1 10.7 27.6 3.4 23 Other 16.9 21.3 25.1 29.7 24.9 33.1 27.2 23.0 26.7 36.5 29.8 12.4 24 By borrowing sector 184.9 263.6 314.8 343.6 288.7 292.3 332.2 268.8 308.5 321.7 262.9 266.5 25 State and local governments 15.2 15.4 19.1 20.2 27.3 22.3 22.5 21.8 32.8 25.1 19.5 36.3 26 Households 89.5 137.3 169.3 176.5 117.5 120.4 165.8 115.2 119.8 141.0 99.9 89.7 27 Farm 10.2 12.3 14.6 21.4 14.4 16.4 22.7 15.7 13.0 19.9 12.8 8.4 28 Nonfarm noncorporate 15.4 28.3 32.4 34.4 33.8 40.5 37.0 27.5 40.2 41.8 39.3 30.4 29 Corporate 54.5 70.4 79.3 91.2 95.7 92.6 84.2 88.6 102.7 93.9 91.4 101.8 30 Foreign 19.6 13.9 33.2 21.0 29.3 27.3 28.3 31.0 27.5 34.6 19.9 16.0 31 Corporate equities .3 .4 -.5 .8 2.1 * 1.7 1.9 2.2 .7 -.7 -.2 32 Debt instruments 19.3 13.5 33.8 20.2 27.2 27.3 26.6 29.0 25.3 34.0 20.6 16.2 33 Bonds 8.6 5.1 4.2 3.9 .8 5.5 4.9 2.0 -.4 3.3 7.6 2.2 34 Bank loans n.e.c 5.6 3.1 19.1 2.3 11.5 3.7 2.6 5.9 17.2 5.0 2.3 -.6 35 Open market paper 1.9 2.4 6.6 11.2 10.1 13.9 16.3 15.7 4.5 20.6 7.1 11.3 36 U.S. government loans 3.3 3.0 3.9 2.9 4.7 4.3 2.8 5.4 4.0 5.0 3.6 3.3 Financial sectors 37 Total funds raised 22.5 52.2 77.5 83.9 68.5 89.3 78.7 65.1 71.9 95.5 83.0 107.9 By instrument 38 U.S. government related 14.3 21.9 36.7 47.3 43.6 45.1 50.8 47.3 39.8 42.5 47.8 57.9 39 Sponsored credit agency securities 2.5 7.0 23.1 24.3 24.4 30.1 25.8 27.1 21.7 26.9 33.3 21.4 40 Mortgage pool securities 12.2 16.1 13.6 23.1 19.2 15.0 25.0 20.2 18.1 15.6 14.5 36.5 41 Loans from U.S. government -.4 -1.2 42 Private financial sectors 8.2 30.3 40.8 36.6 24.9 44.1 27.9 17.7 32.0 53.0 35.3 50.0 43 Corporate equities -.2 3.4 2.5 3.2 7.2 8.6 2.6 7.5 6.9 9.7 7.5 16.0 44 Debt instruments 8.4 26.9 38.3 33.4 17.7 35.6 25.3 10.3 25.2 43.4 27.8 34.0 45 Corporate bonds 9.8 10.1 7.5 7.8 7.1 -.8 7.7 9.9 4.4 -2.1 .4 -3.6 46 Mortgages 2.1 3.1 .9 -1.2 -.9 -2.9 -2.9 -5.3 3.5 -2.3 -3.5 1.9 47 Bank loans n.e.c -3.7 -.3 2.8 -.4 -.4 2.2 .5 .1 -.9 3.7 .7 5.9 48 Open market paper and RPs 2.2 9.6 14.6 18.0 4.8 20.9 10.8 -.1 9.7 24.8 17.0 16.1 49 Loans from Federal Home Loan Banks -2.0 4.3 12.5 9.2 7.1 16.2 9.2 5.8 8.5 19.3 13.2 13.8 By sector 50 Sponsored credit agencies 2.1 5.8 23.1 24.3 24.4 30.1 25.8 27.1 21.7 26.9 33.3 21.4 51 Mortgage pools 12.2 16.1 13.6 23.1 19.2 15.0 25.0 20.2 18.1 15.6 14.5 36.5 52 Private financial sectors 8.2 30.3 40.8 36.6 24.9 44.1 27.9 17.7 32.0 53.0 35.3 50.0 53 Commercial banks 2.3 1.1 1.3 1.6 .5 .4 1.8 .8 .3 .2 .5 .6 54 Bank affiliates 5.4 2.0 7.2 6.5 6.9 8.3 4.9 5.8 8.0 6.9 9.7 9.7 55 Savings and loan associations .1 9.9 14.3 11.4 6.6 13.1 10.2 .1 13.2 19.2 6.9 16.8 56 Other insurance companies .9 1.4 .8 .9 1.1 1.1 .9 1.0 1.1 1.1 1.1 1.0 57 Finance companies 4.3 16.9 18.1 16.6 6.3 14.1 11.0 6.0 6.5 17.3 11.0 7.7 58 REITs -2.2 -1.9 -.9 -.3 -1.5 -.5 -.1 -1.4 -1.7 -.6 -.3 -.2 59 Open-end investment companies -2.4 .9 -.1 .1 5.0 7.7 -.8 5.5 4.5 8.9 6.5 14.5 All sectors 60 Total funds raised, by instrument 296.0 386.5 479.2 485.9 465.6 496.2 485.3 428.1 503.1 533.7 458.7 488.6 61 Investment company shares -2.4 .9 -.1 .1 5.0 7.7 -.8 5.5 4.5 8.9 6.5 14.5 62 Other corporate equities 13.1 5.6 1.9 -3.9 17.1 -10.6 -.9 10.8 23.4 2.3 -23.5 1.2 63 Debt instruments 285.4 379.9 477.4 489.7 443.5 499.1 487.1 411.8 475.2 522.5 475.7 472.9 64 U.S. government securities 83.8 79.9 90.5 84.8 122.9 132.6 97.0 110.7 135.1 124.5 140.7 156.1 65 State and local obligations 15.7 21.9 28.4 29.8 35.9 32.9 32.8 30.7 41.0 35.1 30.6 47.9 66 Corporate and foreign bonds 41.2 36.1 31.8 34.2 41.1 28.5 35.2 49.3 33.0 26.0 30.9 17.0 67 Mortgages 87.1 129.9 151.0 162.4 134.0 115.2 154.7 130.4 137.7 134.3 96.2 92.1 68 Consumer credit 25.4 40.2 48.8 45.4 4.9 25.3 41.0 -3.3 13.0 29.4 21.2 16.0 69 Bank loans n.e.c 6.2 29.5 59.0 51.0 46.5 57.0 42.7 24.0 69.0 56.4 57.6 83.6 70 Open market paper and RPs 8.1 15.0 26.4 40.3 21.6 54.0 44.5 35.9 7.2 56.2 51.8 30.9 71 Other loans 17.8 27.4 41.5 41.8 36.6 53.7 39.2 34.1 39.2 60.7 46.6 29.4 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 1982 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997766 11997777 11997788 11997799 11998800 11998811 H2 HI H2 HI H2 HI' 1 Total funds advanced in credit markets to nonlinancial sectors 262.7 331.2 402.3 409.1 382.2 418.4 411.0 354.2 410.2 436.7 400.2 381.0 By public agencies and foreign 2 Total net advances 49.8 79.2 101.9 74.6 95.8 9955..99 101.0 104.6 87.0 98.7 9933..22 9911..99 3 U.S. government securities 23.1 34.9 36.1 -6.3 15.7 17.2 16.6 20.5 10.9 15.9 18.5 -.8 4 Residential mortgages 12.3 20.0 25.7 35.8 31.7 23.4 36.7 34.9 28.5 21.4 25.5 47.4 5 FHLB advances to savings and loans -2.0 4.3 12.5 9.2 7.1 16.2 9.2 5.8 8.5 19.3 13.2 13.8 6 Other loans and securities 16.4 20.1 27.6 35.9 41.3 39.1 38.6 43.4 39.1 42.1 36.0 31.5 Total advanced, by sector 7 U.S. government 7.9 10.0 17.1 19.0 23.7 24.2 18.7 24.6 22.8 27.1 21.2 15.4 8 Sponsored credit agencies 16.8 22.4 39.9 52.4 44.4 46.0 56.9 45.2 43.7 44.3 47.7 59.0 9 Monetary authorities 9.8 7.1 7.0 7.7 4.5 9.2 14.0 14.9 -5.9 -3.7 22.1 -6.5 10 Foreign 15.2 39.6 38.0 -4.6 23.2 16.6 11.3 19.9 26.5 30.9 2.2 23.9 11 Agency borrowing not included in line 1 14.3 21.9 36.7 47.3 43.6 45.1 50.8 47.3 39.8 42.5 47.8 57.9 Private domestic funds advanced 12 Total net advances 227.1 273.9 337.1 381.8 329.9 367.6 360.8 296.9 362.9 380.5 354.7 347.0 13 U.S. government securities 60.7 45.1 54.3 91.1 107.2 115.4 80.5 90.2 124.2 108.5 122.3 156.9 14 State and local obligations 15.7 21.9 28.4 29.8 35.9 32.9 32.8 30.7 41.0 35.1 30.6 47.9 15 Corporate and foreign bonds 30.5 22.2 22.4 23.7 25.8 20.6 24.1 31.6 20.1 18.6 22.7 4.5 16 Residential mortgages 55.4 81.4 95.5 92.0 73.7 59.7 84.0 69.6 77.8 78.8 40.5 17.0 17 Other mortgages and loans 62.9 107.6 149.1 154.3 94.4 155.3 148.7 80.6 108.3 158.7 151.8 134.5 18 LESS: Federal Home Loan Bank advances -2.0 4.3 12.5 9.2 7.1 16.2 9.2 5.8 8.5 19.3 13.2 13.8 Private financial intermediation 19 Credit market funds advanced by private financial institutions 190.9 261.7 302.9 292.2 257.9 301.3 260.7 245.4 270.4 326.3 276.3 281.3 20 Commercial banking 59.6 87.6 128.7 121.1 99.7 103.5 108.1 64.7 134.8 107.8 99.2 122.3 21 Savings institutions 70.2 81.6 73.6 55.5 54.1 24.6 48.9 34.9 73.2 43.9 5.3 30.2 22 Insurance and pension funds 49.7 69.0 75.0 66.4 74.4 75.8 60.1 84.3 64.4 75.8 75.8 89.0 23 Other finance 11.4 23.5 25.6 49.2 29.8 97.4 43.6 61.5 -1.9 98.8 95.9 39.7 24 Sources of funds 190.9 261.7 302.9 292.2 257.9 301.3 260.7 245.4 270.4 326.3 276.3 281.3 25 Private domestic deposits 124.4 138.9 141.1 142.5 167.8 211.2 145.9 162.5 173.1 212.0 210.3 177.5 26 Credit market borrowing 8.4 26.9 38.3 33.4 17.7 35.6 25.3 10.3 25.2 43.4 27.8 34.0 27 Other sources 58.0 96.0 123.5 116.4 72.4 54.6 89.5 72.7 72.1 70.9 38.2 69.8 28 Foreign funds -4.7 1.2 6.3 25.6 -23.0 -8.8 3.4 -20.0 -26.0 -.7 -16.8 -31.1 29 Treasury balances -.1 4.3 6.8 .4 -2.6 -1.1 -.7 -6.1 1.0 6.0 -8.2 -4.1 30 Insurance and pension reserves 34.3 51.4 62.2 49.1 65.4 70.8 43.8 70.3 60.5 66.0 75.6 77.4 31 Other, net 28.5 39.1 48.3 41.3 32.6 -6.4 43.0 28.6 36.6 -.4 -12.3 27.6 Private domestic nonfinancial investors 32 Direct lending in credit markets 44.7 39.0 72.5 122.9 89.7 101.9 125.4 61.7 117.7 97.5 106.2 99.8 33 U.S. government securities 15.9 24.6 36.3 61.4 38.3 50.4 54.9 23.3 53.3 43.0 57.7 54.8 34 State and local obligations 3.3 -.8 3.6 9.4 12.6 20.3 11.5 6.2 18.9 22.8 17.8 35.7 35 Corporate and foreign bonds 11.8 -5.1 -2.9 10.2 9.3 -7.9 16.9 7.8 10.8 -9.2 -6.6 -22.9 36 Commercial paper 1.9 9.6 15.6 12.1 -3.4 3.5 14.6 -8.1 1.4 -1.4 8.4 7.9 37 Other 11.8 10.7 19.9 29.8 32.9 35.6 27.6 32.5 33.3 42.3 29.0 24.2 38 Deposits and currency 133.4 148.5 152.3 151.9 179.2 221.0 149.9 172.4 186.1 218.6 223.4 177.5 39 Currency 7.3 8.3 9.3 7.9 10.3 9.5 6.3 9.3 11.3 5.8 13.2 2.0 40 Checkable deposits 10.4 17.2 16.3 19.2 4.2 18.3 22.5 -2.5 11.0 26.5 10.1 6.9 41 Small time and savings accounts 123.7 93.5 63.7 61.0 79.5 46.6 50.7 73.4 85.7 26.9 66.3 78.8 42 Money market fund shares * .2 6.9 34.4 29.2 107.5 38.6 61.9 -3.4 104.1 110.8 39.4 43 Large time deposits -12.0 25.8 46.6 21.2 48.3 36.3 39.4 24.4 72.1 46.8 25.7 51.4 44 Security RPs 2.3 2.2 7.5 6.6 6.5 2.5 -5.3 5.3 7.8 7.7 -2.6 1.0 45 Foreign deposits 1.7 1.3 2.0 1.5 1.1 .3 -2.3 .6 1.7 .8 -.2 -2.0 46 Total of credit market instruments, deposits and currency 178.1 187.5 224.9 274.8 269.0 322.8 275.3 234.1 303.8 316.1 329.6 277.2 47 Public support rate (in percent) 19.0 23.9 25.3 18.2 25.1 22.9 24.6 29.5 21.2 22.6 23.3 24.1 48 Private financial intermediation (in percent) 84.0 95.6 89.9 76.5 78.2 82.0 72.3 82.7 74.5 85.8 77.9 81.0 49 Total foreign funds 10.5 40.8 44.3 21.0 .2 7.8 14.8 * .5 30.3 -14.6 -7.2 MEMO: Corporate equities not included above 50 Total net issues 10.6 6.5 1.9 -3.8 22.1 -2.9 -1.7 16.3 27.9 11.2 -17.0 15.7 51 Mutual fund shares -2.4 .9 -.1 .1 5.0 7.7 -.8 5.5 4.5 8.9 6.5 14.5 52 Other equities 13.1 5.6 1.9 -3.9 17.1 -10.6 -.9 10.8 23.4 2.3 -23.5 1.2 53 Acquisitions by financial institutions 12.5 7.4 4.6 10.4 14.6 22.9 14.2 8.6 20.7 25.3 20.5 20.7 54 Other net purchases -1.9 -.8 -2.7 -14.2 7.5 -25.8 -15.9 7.7 7.2 -14.1 -37.5 -5.1 NOTES BY LINE NUMBER. 31. Mainly retained earnings and net miscellaneous liabilities. 1. Line 2 of table 1.58. 32. Line 12 less line 19 plus line 26. 2. Sum of lines 3-6 or 7-10. 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes 6. Includes farm and commercial mortgages. mortgages. 11. Credit market funds raised by federally sponsored credit agencies, and net 39. Mainly an offset to line 9. issues of federally related mortgage pool securities. 46. Lines 32 plus 38, or line 12 less line 27 plus 39 and 45. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum of 47. Line 2/line 1. lines 27, 32, and 38 less lines 39 and 45. 48. Line 19/line 12. 17. Includes farm and commercial mortgages. 49. Sum of lines 10 and 28. 25. Line 38 less lines 39 and 45. 50. 52. Includes issues by financial institutions. 26. Excludes equity issues and investment company shares. Includes line 18. 28. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types quarterly, and annually branches, 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 30. Excludes net investment of these reserves in corporate equities. Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • February 1983 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1982 1983 MMeeaassuurree 11998800 11998811 11998822 May June July Aug. Sept. Oct/ Nov/ Dec? Jan. 1 Industrial production1 147.0 151.0 138.6 139.2 138.7 138.8 138.4 137.3 135.7 134.8 135.0 136.2 Market groupings ? Products, total 146.7 150.6 141.8 142.3 142.1 142.6 142.0 140.8 139.3 139.0 139.8 140.6 3 Final, total 145.3 149.5 141.4 142.2 142.1 142.5 141.2 140.0 138.7 138.2 139.2 140.0 4 Consumer goods 145.4 147.9 142.6 143.6 144.8 145.8 144.1 143.4 142.2 141.1 142.0 143.3 5 Equipment 145.2 151.5 139.7 140.4 138.4 138.0 137.3 135.2 134.0 134.3 135.2 135.5 6 Intermediate 151.9 154.4 143.4 142.6 141.9 142.8 144.7 143.7 141.6 141.9 142.0 143.0 7 Materials 147.6 151.6 133.7 134.3 133.5 133.0 132.8 132.0 130.0 128.5 127.7 129.4 Industry groupings 8 Manufacturing 146.7 150.4 137.6 137.9 137.7 138.1 138.0 113377..11 135.0 134.0 134.2 135.4 Capacity utilization (percent)12 9 Manufacturing 79.1 78.5 69.8 70.2 70.0 70.0 69.8 69.2 68.0 67.4 67.3 67.8 10 Industrial materials industries 80.0 79.9 68.9 69.4 68.8 68.5 68.2 67.7 66.6 65.7 65.2 65.9 11 Construction contracts (1977 = 100)3 107.0' 111.0' 111.0 94.0 111.0 98.0 112.0 117.0 105.0 122.0 131.0 n.a. 12 Nonagricultural employment, total4 137.4 138.5 136.2 137.0 136.5 136.1 135.7 135.7 135.1 134.9 134.5 135.1 13 Goods-producing, total 110.3 109.3 102.5 104.1 102.9 102.3 101.5 101.0 99.7 99.0 98.6 99.2 14 Manufacturing, total 104.3 103.7 96.9 98.3 97.3 96.7 96.0 95.5 94.2 93.5 93.2 93.4 15 Manufacturing, production-worker ... 99.4 98.0 89.3 90.9 89.8 89.2 88.4 87.8 86.2 85.3 85.1 85.3 16 Service-producing 152.6 154.4 154.7 155.1 154.9 154.6 154.5 154.7 154.4 154.5 154.3 154.8 17 342.9 383.5 407.9 405.7 407.3 410.8 411.4 412.3 414.5 416.1 418.5 18 317.6 349.9 365.4 365.4 366.0 367.6 367.8 367.7 368.0 368.0 368.6 19 264.3 288.1 284.9 288.1 288.4 287.7 286.4 284.5 281.3 280.1 279.3 70 Disposable personal income5 332.9 370.3 396.5 392.9 393.4 400.6 400.9 402.0 404.0 405.5 407.9 n.a. 21 Retail sales® 303.8 330.6 326.0 347.1 336.4 341.8 338.2 341.3 345.0 353.6 349.6 349.9 Prices7 7"> 246.8 272.4 289.1 287.1 290.6 292.2 292.8 293.3 294.1 293.6 292.4 2233 224477..00 226699..88 228800..66 227777..88 227799..99 228811..77 228822..44 228811..44 228844..11 228844..99 228855..11 1. The industrial production and capacity utilization series have been revised 6. Based on Bureau of Census data published in Survey of Current Business. back to January 1979. 7. Data without seasonal adjustment, as published in Monthly Labor Review. 2. Ratios of indexes of production to indexes of capacity. Based on data from Seasonally adjusted data for changes in the price indexes may be obtained from Federal Reserve, McGraw-Hill Economics Department, and Department of the Bureau of Labor Statistics, U.S. Department of Labor. Commerce. 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 6, nonresidential and heavy engineering, from McGraw-Hill Information Systems and indexes for series mentioned in notes 3 and 7 may also be found in the Survey Company, F. W. Dodge Division. 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 1982 1982 1982 SSeerriieess Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing 139.8 138.1 137.7 134.4 195.2 196.4 197.7 198.9 71.6 70.3 69.7 67.6 2 Primary processing 137.1 132.3 132.4 129.3 198.6 199.5 200.4 201.3 69.1 66.3 66.1 64.1 3 Advanced processing 141.6 141.2 140.5 137.1 193.5 194.9 196.2 197.6 73.2 72.5 71.6 69.4 4 Materials 138.7 134.7 132.6 128.7 192.6 193.7 194.6 195.5 72.0 69.6 68.1 65.8 5 Durable goods 130.9 127.1 124.7 116.8 196.4 197.3 198.3 199.2 66.7 64.4 62.9 58.6 6 Metal materials 90.9 77.0 73.0 66.1 142.3 142.4 142.3 142.4 63.9 54.1 51.3 46.4 7 Nondurable goods 161.0 156.8 155.1 157.3 214.6 216.1 217.4 218.9 75.0 72.6 71.3 71.9 8 Textile, paper, and chemical 164.5 160.5 158.4 161.4 225.6 227.3 228.8 230.5 72.9 70.6 69.2 70.1 9 Textile 101.3 101.8 102.0 103.0 142.1 142.4 142.8 143.1 71.3 71.5 71.5 71.9 10 Paper 146.1 142.0 145.9 148.2 163.8 164.6 165.4 166.3 89.2 86.3 88.2 89.1 11 Chemical 200.0 194.0 188.5 192.7 287.3 289.6 291.9 294.3 69.6 67.0 64.6 65.5 12 Energy materials 129.8 125.5 123.8 122.0 156.5 157.0 157.6 158.2 82.9 79.9 78.5 77.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A47 2.11 Continued Previous cycle1 Latest cycle2 1982 1982 1983 SSeerriieess High Low High Low Jan. May June July Aug. Sept. Oct/ Nov/ Dec/ Jan. Capacity utilization rate (percent) 13 Manufacturing 88.0 69.0 87.2 74.9 71.1 70.2 70.0 70.0 69.8 69.2 n.a. n.a. n.a. 67.8 14 Primary processing 93.8 68.2 90.1 71.0 68.5 66.1 65.7 65.7 66.1 66.4 65.0 63.9 63.5 64.6 15 Advanced processing .... 85.5 69.4 86.2 77.2 72.8 72.5 72.3 72.3 71.7 70.7 69.6 69.2 69.4 69.7 16 Materials 92.6 69.4 88.8 73.8 71.4 69.4 68.8 68.5 68.2 67.7 66.6 65.7 65.2 65.9 17 Durable goods 91.5 63.6 88.4 68.2 66.2 64.2 64.0 63.7 63.1 61.9 59.6 58.4 57.8 58.9 18 Metal materials 98.3 68.6 96.0 59.6 65.8 53.9 52.2 50.7 51.2 51.9 48.6 45.5 45.1 n.a. 19 Nondurable goods 94.5 67.2 91.6 77.5 73.2 72.5 70.9 70.2 71.0 72.8 72.5 71.9 71.4 71.8 20 Textile, paper, and chemical 95.1 65.3 92.2 75.3 70.7 70.6 68.8 68.0 68.9 70.7 70.3 69.9 69.9 70.1 21 Textile 92.6 57.9 90.6 80.9 68.6 71.5 69.6 69.8 72.3 72.3 73.0 71.6 71.2 n.a. 22 Paper 99.4 72.4 97.7 89.3 87.6 86.1 85.3 86.0 88.6 89.8 89.7 89.8 87.8 n.a. 23 Chemical 95.5 64.2 91.3 70.7 67.4 66.9 65.0 63.7 63.9' 66.2 65.4 65.3 65.7 n.a. 24 Energy materials 94.6 84.8 88.3 82.7 83.7 79.9 79.8 80.0 79.0 76.6 77.6 76.9 76.9 77.4 1. Monthly high 1973; monthly low 1975. 2. Preliminary; monthly highs December 1978 through January 1980; monthly lows July 1980 through October 1980. 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1982 1983 CCaatteeggoorryy 11998800 11998811 11998822 July Aug. Sept. Oct. Nov.' Dec.' Jan. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 169,847 172,272 174,451 174,544 174,707 174,888 175,069 175,238 175,381 175,543 2 Labor force (including Armed Forces)' 109,042 110,812 112,383 112,596 112,810 113,056 112,940 113,222 113,311 112,737 3 Civilian labor force 106,940 108,670 110,204 110,416 110,614 110,858 110,752 111111,,004422 111111,,112299 111100,,554488 Employment 4 Nonagricultural industries2 95,938 97,030 96,125 96,143 96.254 96,180 95,763 95,670 95,682 95,691 5 Agriculture 3,364 3,368 3,401 3,445 3,429 3,363 3,413 33,,446666 33,,441111 33,,441122 Unemployment 6 Number 7,637 8,273 10.678 10,828 10,931 11,315 11,576 11,906 12,036 11,446 7 Rate (percent of civilian labor force)... 7.1 7.6 9.7 9.8 9.9 10.2 10.5 10.7 10.8 10.4 8 Not in labor force 60,805 61,460 62,061 61,948 61,897 61,832 62,129 62,016 62,070 62,806 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,406 91,105 89,619 89,535 89,312 89,264' 88,877' 88,750 88,535 88,874 10 Manufacturing 20,285 20,173 18,849 18,813 18,672 18,572 18,325 18,181 18,129 18,158 11 Mining 1,020 1,104 1,122 1,100 1,086 1,075 1,058 1,046 1,034 1,028 12 Contract construction 4,399 4,307 3,917 3,927 3,899 3,883 3,856 3,854 3,812 3,927 13 Transportation and public utilities 5,143 5,152 5,057 5,044 5,025 5,031 5,007 4,992 4,984 4,973 14 Trade 20,386 20,736 20,547 20,615 20,550 20,492 20,441 20,425 20,306 20,549 15 Finance 5,168 5,330 5,350 5,359 5,360 5,367 5,357 5,363 5,373 5,401 16 Service 17,901 18,598 19,000 19,042 19,048 19,084 19,074 19,135 19,141 19,170 17 Government 16,249 16,056 15,784 15,635 15,672 15,763 15,742 15,754 15,756 15,668 1. Persons 16 years of age and over. Monthly figures, which are based on 3. Data include all full- and part-time employees who worked during, or sample data, relate to the calendar week that contains the 12th day; annual data received pay for, the pay period that includes the 12th day of the month, and are averages of monthly figures. By definition, seasonality does not exist in exclude proprietors, self-employed persons, domestic servants, unpaid family population figures. Based on data from Employment and Earnings (U.S. Depart- workers, and members of the Armed Forces. Data are adjusted to the March 1979 ment of Labor). 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 • February 1983 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 1982 11998822 GGrroouuppiinngg por- avg. tion Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct/ Nov. Dec? Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 138.6 140.7 142.9 141.7 140.2 139.2 138.7 138.8 138.4 137.3 135.7 134.8 135.0 2 Products 60.71 141.8 142.9 144.6 143.7 142.9 142.3 142.1 142.6 142.0 140.8 139.3 139.0 139.8 3 Final products 47.82 141.4 142.8 144.1 143.3 142.6 142.2 142.1 142.5 141.2 140.0 138.7 138.2 139.2 4 Consumer goods 27.68 142.6 139.6 141.8 141.5 142.1 143.6 144.8 145.8 144.1 143.4 142.2 141.1 142.0 5 Equipment 20.14 139.7 147.2 147.3 145.9 143.4 140.4 138.4 138.0 137.3 135.2 134.0 134.3 135.2 6 Intermediate products 12.89 143.4 143.4 146.3 145.2 143.7 142.6 141.9 142.8 144.7 143.7 141.6 141.9 142.0 7 Materials 39.29 133.7 137.2 140.4 138.5 136.2 134.3 133.5 133.0 132.8 132.0 130.0 128.5 127.7 Consumer goods 8 Durable consumer goods 7.89 129.3 120.1 125.9 128.1 130.7 132.6 134.6 137.3 132.9 131.3 126.5 124.4 126.6 9 Automotive products 2.83 129.5 109.2 117.5 125.0 129.9 138.9 143.0 149.7 135.5 135.5 123.6 120.7 129.3 10 Autos and utility vehicles 2.03 99.0 71.6 82.0 93.6 100.5 111.8 117.1 127.7 107.1 105.8 89.6 86.9 99.0 11 Autos 1.90 86.6 61.3 70.5 79.8 87.2 96.1 101.9 114.6 93.3 94.3 79.5 77.7 87.9 12 Auto parts and allied goods .80 207.1 204.4 207.8 204.5 204.6 207.6 208.6 205.4 207.6 210.7 210.0 206.6 206.2 13 Home goods 5.06 129.2 126.3 130.6 129.9 131.1 129.1 129.9 130.4 131.4 128.9 128.1 126.5 125.1 14 Appliances, A/C, and TV 1.40 102.5 100.6 103.5 97.0 102.7 100.5 106.4 102.7 104.5 99.4 106.1 103.9 94.4 15 Appliances and TV 1.33 104.5 101.6 104.1 97.4 103.1 101.5 108.8 106.1 108.6 104.1 110.5 107.4 98.5 16 Carpeting and furniture 1.07 149.7 137.9 147.8 151.3 151.8 145.9 149.0 151.4 152.5 153.3 151.9 151.4 151.1 17 Miscellaneous home goods 2.59 135.1 135.4 138.1 138.9 138.0 137.7 134.9 136.7 137.2 134.9 130.1 128.6 130.9 18 Nondurable consumer goods 19.79 147.9 147.4 148.1 146.8 146.6 147.9 148.8 149.1 148.6 148.2 148.5 147.7 148.2 19 Clothing 4.29 20 Consumer staples 15.50 158.9 158.9 159.2 158.1 158.3 159.0 159.9 159.7 159.4 158.8 159.1 158.0 158.5 71 8.33 150.0 151.1 149.6 148.1 149.9 150.9 149.9 149.6 148.6 150 2 149 0 22 Nonfood staples 7.17 169.6 169.1 168.7 168.0 170.0 169.5 170.4 171.2 170.8 170.7 169.5 168.4 168.4 23 Consumer chemical products .... 2.63 219.9 220.1 218.2 217.8 218.3 216.6 219.8 222.3 222.4 221.7 220.0 218.9 220.9 24 Consumer paper products 1.92 127.6 127.0 130.2 127.8 128.7 126.7 126.7 128.1 129.4 128.2 125.3 125.1 125.9 25 Consumer energy products 2.62 150.0 148.9 147.2 147.6 151.9 153.6 152.8 151.4 149.3 150.6 151.1 149.5 146.8 2266 11..4455 117722..33 117711..66 117700..44 117744..55 117733..77 117711..11 116677..77 116699..77 116699..55 116699..11 117711..55 Equipment 27 Business 12.63 157.9 172.2 171.6 169.0 164.9 159.9 156.7 154.9 153.9 150.5 147.1 146.6 147.5 28 Industrial 6.77 135.0 158.1 155.9 151.2 145.9 138.9 134.0 131.3 128.4 123.8 118.3 117.4 117.7 29 Building and mining 1.44 214.5 289.0 274.9 256.9 242.2 224.4 209.0 200.4 190.8 182.1 169.3 166.8 173.3 30 Manufacturing 3.85 107.1 116.9 116.8 116.3 114.0 109.7 107.5 106.0 104.4 101.6 98.0 97.5 96.0 31 Power 1.47 129.9 137.4 141.1 139.0 134.8 131.5 129.9 129.6 130.1 124.7 121.0 121.0 120.1 32 Commercial transit, farm 5.86 184.3 188.5 189.9 189.5 186.9 184.1 183.0 182.2 183.3 181.4 180.5 180.2 181.9 33 Commercial 3.26 253.2 256.1 256.4 257.8 253.1 247.7 247.5 248.8 253.5 254.0 253.5 254.8 256.5 34 Transit 1.93 103.7 109.0 110.4 110.5 110.9 110.9 108.3 106.3 102.0 95.5 93.2 92.3 95.3 35 Farm .67 80.7 88.4 95.1 84.9 83.5 85.8 84.1 76.9 75.8 76.1 76.8 70.7 68.5 36 Defense and space 7.51 109.3 105.2 106.5 107.0 107.2 107.7 107.6 109.5 109.5 109.5 111.9 113.6 114.6 Intermediate products 37 Construction supplies 6.42 124.3 124.2 127.5 125.6 123.6 122.2 123.1 124.1 127.1 125.5 122.5 123.4 123.1 38 Business supplies 6.47 162.2 162.4 165.1 164.6 163.7 162.8 160.6 161.4 162.1 161.8 160.5 160.2 160.7 39 Commercial energy products 1.14 181.1 181.7 184.1 184.5 183.5 180.3 178.3 179.8 178.1 179.2 180.4 182.7 182.2 Materials 40 Durable goods materials 20.35 124.9 129.7 132.4 130.7 128.1 126.6 126.6 126.0 125.1 123.0 118.5 116.4 115.4 41 Durable consumer parts 4.58 95.3 86.9 92.2 94.1 94.7 98.9 103.1 103.8 101.0 97.1 91.4 90.0 90.6 42 Equipment parts 5.44 166.6 177.2 180.1 177.5 173.9 170.0 168.3 166.1 164.1 158.3 155.4 155.1 153.0 43 Durable materials n.e.c 10.34 116.1 123.6 125.1 122.2 118.8 116.1 115.1 114.8 115.4 115.8 111.1 107.7 106.6 44 Basic metal materials 5.57 79.8 94.5 94.3 88.6 82.3 79.4 77.4 75.7 76.1 77.7 73.0 69.1 67.2 45 Nondurable goods materials 10.47 157.6 156.8 164.2 162.0 160.3 156.6 153.5 152.3 154.5 158.5 158.2 157.3 156.5 46 Textile, paper, and chemical materials 7.62 161.2 159.1 167.9 166.6 164.4 160.4 156.7 155.3 157.7 162.2 161.5 161.2 161.4 47 Textile materials 1.85 102.2 97.3 102.2 104.5 104.5 101.8 99.1 99.6 103.2 103.3 104.4 102.5 102.0 48 Paper materials 1.62 145.7 143.2 148.5 146.7 143.5 141.8 140.7 142.1 146.6 148.9 148.9 149.4 146.3 49 Chemical materials 4.15 193.7 193.0 204.9 202.2 199.3 193.9 188.7 185.4 186.5 193.7 192.0 192.1 193.9 50 Containers, nondurable 1.70 161.3 162.4 166.7 161.3 159.8 157.2 158.5 158.1 162.8 167.3 164.9 160.8 154.4 51 Nondurable materials n.e.c 1.14 127.8 132.4 136.0 132.4 134.2 130.6 124.8 123.4 120.1 121.1 125.5 126.2 126.7 52 Energy materials 8.48 125.3 130.9 130.3 128.2 125.8 125.4 125.4 126.0 124.5 121.0 122.6 121.6 121.8 53 Primary energy 4.65 115.9 119.2 119.5 119.2 117.3 116.9 116.6 117.2 113.8 111.1 114.4 112.5 112.9 54 Converted fuel materials 3.82 136.8 145.1 143.4 139.1 136.1 135.7 136.0 136.7 137.4 133.0 132.6 132.8 132.7 Supplementary groups 55 Home goods and clothing 99..3355 119.5 117.0 120.1 118.9 118.9 119.5 120.2 121.4 121.3 120.1 119.9 119.2 118.6 56 Energy, total 12.23 135.8 139.5 138.9 137.6 136.7 136.5 136.2 136.4 134.8 132.7 134.1 133.3 132.8 57 Products 3.76 159.5 158.8 158.4 158.8 161.5 161.7 160.5 160.0 158.0 159.3 160.0 159.6 157.5 58 Materials 8.48 125.3 130.9 130.3 128.2 125.8 125.4 125.4 126.0 124.5 121.0 122.6 121.6 121.8 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 98 g 2 . tion Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct/ Nov. Dec.? Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities 12.05 146.4 157.4 155.6 153.1 151.6 148.8 145.2 142.6 141.3 139.7 140.4 140.5 141.1 141.3 2 Mining 6.36 126.2 144.5 142.4 138.1 134.1 128.9 123.5 120.1 116.9 114.7 115.9 116.6 118.9 120.8 3 Utilities 5.69 169.0 171.8 170.4 170.0 171.0 170.9 169.4 167.7 168.5 167.5 167.8 167.3 165.9 164.2 4 Electric 3.88 190.6 195.2 192.5 191.7 193.1 193.4 191.6 189.2 189.9 188.2 188.4 188.2 186.9 184.9 5 Manufacturing 87.95 137.6 138.5 140.9 140.1 138.7 137.9 137.7 138.1 138.0 137.1 135.0 134.0 134.2 135.4 6 Nondurable 35.97 156.2 155.1 157.8 157.3 156.1 155.0 155.3 155.7 156.9 156.7 156.2 155.2 155.5 156.3 7 Durable 51.98 124.7 127.1 129.3 128.2 126.7 126.1 125.5 125.9 124.9 123.5 120.3 119.3 119.4 120.9 Mining 8 Metal 10 .51 82.3 121.3 120.8 109.9 108.8 90.0 71.8 58.1 53.4 55.4 63.1 70.4 73.9 9 Coal 11.12 .69 142.7 147.9 156.0 155.6 146.2 149.2 144.4 140.3 135.8 127.9 143.2 134.1 129.7 138.5 10 Oil and gas extraction 13 4.40 131.1 151.5 146.6 141.4 137.7 132.7 129.1 127.0 123.3 121.0 119.1 120.0 123.2 123.8 11 Stone and earth minerals 14 .75 112.3 115.8 120.5 121.6 119.6 114.6 106.6 103.8 105.7 106.3 108.5 111.9 114.4 Nondurable manufactures 12 Foods 20 8.75 151.1 151.7 150.8 149.7 150.5 151.0 151.0 150.7 149.0 151.5 151.9 13 Tobacco products 21 .67 112.7 126.7 126.7 116.1 118.6 123.6 121.4 120.6 113.3 110.6 113.0 14 Textile mill products 22 2.68 124.5 120.0 125.8 126.0 126.3 123.5 123.7 124.3 125.9 126.1 125.9 123.1 122.0 15 Apparel products 23 3.31 16 Paper and products 26 3.21 150.8 148.3 151.5 150.6 149.8 146.5 146.8 147.0 152.5 154.3 155.0 154.3 151.6 150.6 17 Printing and publishing 27 4.72 144.2 145.6 146.4 145.9 144.2 143.8 142.6 143.9 145.3 144.3 142.0 141.8 144.0 145.5 18 Chemicals and products 28 7.74 196.1 196.7 201.3 200.3 198.6 193.6 193.2 194.1 195.6 196.4 194.1 193.0 195.6 19 Petroleum products 29 1.79 121.8 123.3 119.5 121.3 120.8 122.2 124.3 124.7 121.4 122.6 123.8 120.0 118.7 117.0 20 Rubber and plastic products 30 2.24 254.6 244.7 251.8 253.4 255.1 257.0 258.9 256.8 261.1 262.0 256.3 250.2 248.2 21 Leather and products 31 .86 60.9 63.1 64.0 61.2 60.6 61.1 62.3 62.9 60.8 60.9 59.5 57.7 55.7 Durable manufactures 22 Ordnance, private and government 19.91 3.64 86.9 84.1 83.8 83.8 85.2 86.3 86.5 87.1 86.5 86.9 89.5 91.9 92.0 92.4 23 Lumber and products 24 1.64 112.6 99.2 104.9 103.5 106.2 110.6 112.2 116.9 120.3 119.9 117.2 119.1 120.5 24 Furniture and fixtures 25 1.37 151.9 144.3 148.4 150.2 151.8 151.1 152.5 154.5 156.7 155.7 154.3 152.4 152.7 25 Clay, glass, stone products 32 2.74 128.4 128.5 135.0 131.5 127.0 125.0 126.1 126.9 128.8 130.4 128.1 127.3 127.8 26 Primary metals 33 6.57 75.2 89.7 88.5 83.0 76.4 75.2 72.8 72.9 72.9 73.2 69.6 63.6 62.7 66.1 27 Iron and steel 331.2 4.21 61.7 79.6 78.5 73.0 65.1 62.4 58.0 58.1 57.4 56.4 54.1 47.5 46.7 28 Fabricated metal products 34 5.93 114.7 120.7 121.4 121.1 119.1 115.8 115.0 115.5 114.3 112.3 107.6 107.0 106.6 107.6 29 Nonelectrical machinery 35 9.15 148.9 160.9 160.0 157.3 153.7 150.0 147.4 147.1 147.2 144.9 140.4 139.6 138.0 137.9 30 Electrical machinery 36 8.05 169.2 168.2 172.9 172.6 172.2 170.9 170.8 170.3 169.7 167.0 165.4 165.4 164.0 166.2 31 Transportation equipment 37 9.27 104.9 96.6 102.0 104.4 105.9 110.0 111.6 112.7 107.0 105.3 100.8 100.2 103.6 104.9 32 Motor vehicles and parts 371 4.50 109.7 90.4 98.6 105.6 110.7 119.8 124.0 127.2 116.7 113.5 103.0 101.7 108.5 111.7 33 Aerospace and miscellaneous transportation equipment... 372-9 4.77 100.4 102.4 105.3 103.2 101.3 100.8 99.9 99.0 97.8 97.6 98.6 98.7 98.9 98.4 34 Instruments 38 2.11 162.1 162.2 164.5 163.0 162.8 163.8 164.8 165.2 165.5 161.9 157.4 155.8 157.2 158.6 35 Miscellaneous manufactures 39 1.51 137.2 144.9 144.5 145.3 144.6 141.7 136.8 134.7 133.9 132.9 129.6 129.5 130.7 132.6 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 579.6 577.4 588.1 586.8 582.1 586.1 584.1 585.8 578.5 575.3 570.0 568.2 572.5 577.3 37 Final 390.9 451.0 448.8 457.1 456.6 453.5 458.3 456.7 457.2 449.2 446.3 442.8 440.5 444.9 447.7 38 Consumer goods 277.5 308.0 298.9 306.3 306.9 306.7 312.3 313.1 314.9 309.1 309.3 306.6 305.0 307.1 309.9 39 Equipment 113.4 143.0 149.9 150.8 149.7 146.8 146.0 143.5 142.3 140.1 137.0 136.2 135.5 137.8 137.8 40 Intermediate 116.6 128.6 128.7 131.1 130.2 128.6 127.8 127.4 128.7 129.3 129.0 127.2 127.7 127.6 129.6 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 • February 1983 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1982 IItteemm 11998800 11998811 11998822 May June July Aug. Sept. Oct.' Nov.' Dec. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,191 986 984 944 929 1,062 888 1,003 1,172 1,192 1,291 2 1-family 710 564 537 488 516 500 497 561 651 729 732 3 2-or-more-family 480 421 447 456 413 562 391 442 521 463 559 4 Started 1,292 1,084 1,061 1,066 908 1,193 1,033 1,129 1,126 1,404 1,222 5 1-family 852 705 661 631 621 628 645 677 701 883 800 6 2-or-more-family 440 379 400 435 287 565 388 452 425 521 422 7 Under construction, end of period1 896 682 n.a. 664 660 673 670 687' 689 715 n.a. 8 1-family 515 382 n.a. 382 384 377 373 379 383 397 n.a. 9 2-or-more-family 382 301 n.a. 282 276 296 296 308 305 317 n.a. 10 Completed 1,502 1,266 n.a. 1,138 939 1,007 1,002 929 R 1,113 1,049 n.a. 11 1-family 957 818 n.a. 684 582 693 638 585' 679 673 n.a. 12 2-or-more-family 545 447 n.a. 454 357 314 364 344' 434 376 n.a. 13 Mobile homes shipped 222 241 n.a. 246 257 246 234 222 218 246 n.a. Merchant builder activity in 1-family units 14 Number sold 545 436 414 395 369 352 379 473' 498 563 515 15 Number for sale, end of period1 342 278 255 259 254 250 248 247' 244 246 250 Price (thousands of dollars)2 Median 16 Units sold 64.7 68.8 69.3 69.3 69.3 70.9 70.1 67.7' 69.5 73.9 71.7 Average 17 Units sold 76.4 83.1 83.9 86.5 84.9 86.5 86.5 79.6' 79.8 89.0 86.1 EXISTING UNITS (1-family) 18 Number sold 2,881 2,350 1,938 1,900 1,980 1,890 1,820 1,840 1,930 2,120 2,180 Price of units sold (thousands of dollars)2 19 Median 62.1 66.1 67.7 67.8 69.4 69.2 68.9 67.3 66.9 67.7 67.5 20 Average 72.7 78.0 80.3 80.6 82.3 82.0 82.0 80.0 79.3 80.4 80.2 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 230,748 238,198 229,045 228,745 231,589 227,638 228,053 228,136 228,779 235,825 238,961 22 Private 175,701 185,221 178,554 179,941 182,651 178,734 176,644 177,002 177,682 183,780 186,754 23 Residential 87,261 86,566 74,340 75,453 75,251 73,436 72,139 71,451 74,042 78,902 83,122 24 Nonresidential, total 88,440 98,655 104,214 104,488 107,400 105,298 104,505 105,551 103,640 104,878 103,632 Buildings 25 Industrial 13,839 17,031 16,645 17,118 18,424 16,404 16,691 16,587 17,072 15,838 14,977 26 Commercial 29,940 34,243 37,090 36,818 38,048 37,512 36,091 37,129 35,677 37,769 37,074 27 Other 8,654 9,543 10,418 10,427 10,579 10,130 10,499 10,506 10,778 11,100 11,437 28 Public utilities and other 36,007 37,838 40,061 40,125 40,349 41,252 41,224 41,329 40,113 40,171 40,144 29 Public 55,047 52,977 50,491 48,804 48,938 48,904 51,409 51,134 51,097 52,045 52,207 30 Military 1,880 1,966 2,202 2,140 1,901 2,261 2,481 2,674 2,347 2,468 2,485 31 Highway 13,808 13,304 13,226 11,655 13,073 14,119 13,327 13,464 14,314 13,906 13,219 32 Conservation and development 5,089 5,225 5,028 5,223 5,051 5,055 5,036 4,719 4,546 4,718 5,168 33 Other 34,270 32,482 30,035 29,786 28,913 27,469 30,565 30,277 29,890 30,953 31,335 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 3. Value of new construction data in recent periods may not be strictly Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of comparable with data in prior periods because of changes by the Bureau of the existing units, which are published by the National Association of Realtors. All Census in its estimating techniques. For a description of these changes see back and current figures are available from originating agency. Permit authoriza- Construction Reports (C-30-76-5), issued by the Bureau in July 1976. tions are 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 From e a 1 r 2 l ie m r onths From 3 months earlier (at annual rate) From 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm DDDeeeccc... 1982 1982 111999888222 11998811 11998822 (((111999666777 DDeecc.. DDeecc.. === 111000000)))''' Mar. June Sept. Dec. Aug. Sept. Oct. Nov. Dec. CONSUMER PRICES2 1 All items 8.9 3.9 1.0 9.3 4.2 1.1 .3 .2 .5 .1 -.3 292.4 7 Commodities 6.0 3.6 -.8' 7.8 3.4 4.1 .0 .2 .6 .3 .1 267.7 3 Food 4.3 3.1 3.9 7.3 .6 .6 -.y .5 .2 .1 -.1 286.5 4 Commodities less food 6.7 3.8 -2.6 7.9 4.7 5.5 .2 .2 .8 .3 .2 255.8 Durable 5.7 5.8 3.5 14.1 1.5 4.5 .3 -.2 .5 .4 .3 247.3 6 Nondurable 7.9 1.4 -4.9 1.9 6.1 3.1 .2 .2 1.1 .3 -.7 264.7 7 Services 13.0 4.3 3.5 11.3 5.4 -2.9 .6 .1 .2 -.1 -.8 335.6 8 Rent 8.5 6.6 5.9 5.6 8.0 7.1 .5 .4 .9 .6 .3 230.8 9 Services less rent 13.7 3.9 3.3 11.9 5.0 -4.2 .6 .1 .2 -.2 -1.0 355.5 Other groupings 10 All items less food 9.9 4.0 .9 99..77 4.9 1.1 .4 .1 .5 .1 -.3 229922..11 11 All items less food and energy 9.6 4.5 3.0 10.6 4.6 .1 .5 .0 .4 -.2 -.1 279.9 12 Homeownership 10.1 1.4 -2.4 19.8 .4 -9.9 .4 -.7 -.1 -.8 -1.7 372.9 PRODUCER PRICES 13 Finished goods 7.1 3.5 .9 4.1 4.2 4.8 .6 -.1 .5 .6 .1 285.1 14 Consumer 6.5 3.4 .6 3.7 4.2 5.0 .6 -.1 .5 .8 -.1 285.1 15 Foods 1.4 2.1 6.1 11.5 -7.4 -.9 .2 -.5 -.2 -.2 .1 258.2 16 Excluding foods 8.5 3.9 -1.4 .7 9.5 7.2 .8r .1 .8 1.1 -.1 294.3 17 Capital equipment 9.2 4.0 2.4 5.6 3.8 4.3 ,7r -.K .2 .3 .6 285.1 18 Intermediate materials3 7.3 .3 -1.8 -1.5 2.4 1.8 .V .2' -.1 .5 .0 315.7 Crude materials 19 Nonfood 10.3 -.8 -18.0 8.3 8.1 .7 .0 1.0 .6 .7 -1.1 475.0 20 Food -14.0 1.4 23.3 24.3 -26.4 -6.5 -1.4 -3.4' -1.9 1.0 -.7 237.0 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers. animal feeds. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • February 1983 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1981 1982 AAccccoouunntt 11998800 11998811 11998822 Q4 Ql Q2 Q3 Q4^ GROSS NATIONAL PRODUCT 1 Total 2,633.1 2,937.7 3,057.5 3,003.2 2,995.5 3,045.2 3,088.2 3,101.3 By source 2 Personal consumption expenditures 1,667.2 1,843.2 1,972.0 1,884.5 1,919.4 1,947.8 1,986.3 2,034.6 3 Durable goods 214.3 234.6 242.7 229.6 237.9 240.7 240.3 251.7 4 Nondurable goods 670.4 734.5 762.7 746.5 749.1 755.0 768.4 778.3 5 Services 782.5 874.1 966.6 908.3 932.4 952.1 977.6 1,004.5 6 Gross private domestic investment 402.4 471.5 421.9 468.9 414.8 431.5 443.3 397.9 7 Fixed investment 412.4 451.1 443.3 455.7 450.4 447.7 438.6 436.4 8 Nonresidential 309.2 346.1 347.5 360.2 357.0 352.2 344.2 336.6 9 Structures 110.5 129.7 141.7 139.6 141.4 143.6 141.3 140.4 10 Producers' durable equipment 198.6 216.4 205.8 220.6 215.6 208.6 203.0 196.2 11 Residential structures 103.2 105.0 95.8 95.5 93.4 95.5 94.3 99.8 12 Nonfarm 98.3 99.7 90.1 89.4 87.9 89.6 88.7 94.1 13 Change in business inventories -10.0 20.5 -21.4 13.2 -35.6 -16.2 4.7 -38.5 14 Nonfarm -5.7 15.0 -21.6 6.0 -36.0 -15.0 3.7 -39.0 15 Net exports of goods and services 25.2 26.1 16.5 23.5 31.3 34.9 6.9 -6.9 16 Exports 339.2 367.3 349.7 367.9 359.9 365.8 349.5 323.7 17 Imports 314.0 341.3 333.2 344.4 328.6 330.9 342.5 330.6 18 Government purchases of goods and services 538.4 596.9 647.1 626.3 630.1 630.9 651.7 675.7 19 Federal 197.2 229.0 257.3 250.5 249.7 244.3 259.0 276.1 20 State and local 341.2 368.0 389.8 375.7 380.4 386.6 392.7 399.6 By major type of product 21 Final sales, total 2,643.1 2,917.3 3,078.9 2,989.9 3,031.1 3,061.4 3,083.5 3,139.8 22 Goods 1,141.9 1,289.2 1,280.6 1,298.5 1,269.4 1,283.1 1,295.5 1,274.5 23 Durable 477.3 528.1 495.2 504.9 482.4 505.9 516.9 475.6 24 Nondurable 664.6 761.1 785.4 793.6 787.0 777.2 778.6 798.9 25 Services 1,225.6 1,364.3 1,492.6 1,421.5 1,444.4 1,476.7 1,509.5 1,539.6 26 Structures 265.7 284.2 284.9 283.3 281.7 285.3 283.2 289.2 27 Change in business inventories -10.0 20.5 -21.4 13.2 -35.6 -16.2 4.7 -38.5 28 Durable goods -5.2 8.7 -15.5 -5.6 -30.9 -6.6 10.1 -34.7 29 Nondurable goods -4.8 11.8 -5.9 18.9 -4.8 -9.6 -5.4 -3.8 30 MEMO: Total GNP in 1972 dollars 1,474.0 1,502.6 1,475.5 1,490.1 1,470.7 1,478.4 1,481.1 1,471.7 NATIONAL INCOME 31 Total 2,117.1 2,352.5 2,436.5 2,404.5 2,396.9 2,425.2 2,455.6 n.a. 32 Compensation of employees 1,598.6 1,767.6 1,855.9 1,813.4 1,830.8 1,850.7 1,868.3 1,873.7 33 Wages and salaries 1,356.1 1,494.0 1,560.1 1,531.1 1,541.5 1,556.6 1,570.0 1,572.3 34 Government and government enterprises 260.2 283.1 302.3 292.3 296.3 300.0 303.5 309.1 35 Other 1,095.9 1,210.9 1,257.8 1,238.8 1,245.2 1,256.6 1,266.4 1,263.2 36 Supplement to wages and salaries 242.5 273.6 295.8 282.3 289.3 294.1 298.3 301.4 37 Employer contributions for social insurance 115.3 133.2 142.0 136.5 140.2 141.7 142.8 143.4 38 Other labor income 127.3 140.4 153.8 145.8 149.1 152.5 155.5 157.9 39 Proprietors' income1 116.3 124.7 120.1 124.1 116.4 117.3 118.4 128.1 40 Business and professional1 96.9 100.7 101.4 99.5 98.6 99.9 101.7 105.5 41 Farm1 19.4 24.0 18.6 24.6 17.8 17.4 16.6 22.6 42 Rental income of persons2 32.9 33.9 34.1 33.6 33.9 34.2 34.6 33.9 43 Corporate profits1 181.6 190.6 161.1 183.9 157.1 155.4 166.2 n.a. 44 Profits before tax3 242.5 232.1 175.4 216.5 171.6 171.7 180.3 n.a. 45 Inventory valuation adjustment -43.0 -24.6 -9.4 -17.1 -4.4 -9.4 -10.3 -13.4 46 Capital consumption adjustment -17.8 -16.8 -4.9 -15.5 -10.1 -6.9 -3.8 1.2 47 Net interest 187.7 235.7 265.3 249.5 258.7 267.5 268.1 267.0 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 adjustment. 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. 1981 1982 AAccccoouunntt 11998800 11998811 11998822 Q4 Ql Q2 Q3 Q4P PERSONAL INCOME AND SAVING 1 Total personal income 2,160.2 2,404.1 2,569.7 2,494.6 2,510.5 2,552.7 2,592.5 2,623.2 2 Wage and salary disbursements 1,356.1 1,493.9 1,560.1 1,531.2 1,541.6 1,556.6 1,570.0 1,572.3 3 Commodity-producing industries 468.0 510.8 509.9 517.7 514.3 513.6 510.2 501.4 4 Manufacturing 354.4 386.4 382.0 388.7 385.1 385.6 383.8 375.8 5 Distributive industries 330.5 361.4 375.7 368.3 371.4 375.4 378.4 377.4 6 Service industries 297.5 338.6 372.3 352.8 359.5 367.6 377.8 384.3 7 Government and government enterprises 260.2 283.1 302.3 292.4 296.5 300.0 303.5 307.1 8 Other labor income 127.3 140.4 153.8 145.8 149.1 152.5 155.5 157.9 9 Proprietors' income1 116.3 124.7 120.1 124.1 116.4 117.3 118.4 128.1 10 Business and professional1 96.9 100.7 101.4 99.5 98.6 99.9 101.7 105.5 11 Farm1 19.4 24.0 18.6 24.6 17.8 17.4 16.6 22.6 12 Rental income of persons2 32.9 33.9 34.1 33.6 33.9 34.2 34.6 33.9 13 Dividends 55.9 62.5 67.0 65.2 65.8 66.1 67.2 68.8 14 Personal interest income 256.3 308.5 371.8 351.0 359.7 372.0 378.2 377.2 15 Transfer payments 297.2 336.3 374.5 350.7 354.6 365.2 381.0 397.2 16 Old-age survivors, disability, and health insurance benefits.... 154.2 182.0 204.5 192.8 194.7 197.5 209.2 216.6 17 LESS: Personal contributions for social insurance 88.7 104.9 111.7 107.0 110.6 111.4 112.4 112.4 18 EQUALS: Personal income 2,160.2 2,404.1 2,569.7 2,494.6 2,510.5 2,552.7 2,592.5 2,623.2 19 LESS: Personal tax and nontax payments 336.2 386.7 397.2 393.2 393.4 401.2 394.4 399.7 20 EQUALS: Disposable personal income 1,824.1 2,029.2 2,172.5 2,101.4 2,117.1 2,151.5 2,198.1 2,223.5 21 LESS: Personal outlays 1,717.9 1,898.9 2,031.4 1,942.7 1,977.9 2,007.2 2,046.1 2,094.6 22 EQUALS: Personal saving 106.2 130.2 141.1 158.6 139.1 144.3 152.0 128.9 MEMO: Per capita (1972 dollars) 23 Gross national product 6,474 6,536 6,357 6,458 6,360 6,380 6,376 6,319 24 Personal consumption expenditures 4,087 4,122 4,123 4,088 4,104 4,121 4,117 4,156 25 Disposable personal income 4,472 4,538 4,544 4,559 4,527 4,552 4,555 4,542 26 Saving rate (percent) 5.8 6.4 6.5 7.5 6.6 6.7 6.9 5.8 GROSS SAVING 406.3 477.5 413.9 476.3 428.8 441.5 422.4 n.a. 28 Gross private saving 438.3 504.7 529.9 547.7 520.3 529.0 546.1 n.a. 29 Personal saving 106.2 130.2 141.1 158.6 139.1 144.3 152.0 128.9 30 Undistributed corporate profits1 38.9 44.4 32.1 44.3 32.5 30.7 34.8 n.a. 31 Corporate inventory valuation adjustment -43.0 -24.6 -9.4 -17.1 -4.4 -9.4 -10.3 -13.4 Capital consumption allowances 32 Corporate 181.2 206.2 225.1 216.0 218.9 223.4 227.5 230.7 33 Noncorporate 112.0 123.9 131.6 128.7 129.8 130.5 131.9 134.3 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -33.2 -28.2 -116.1 -72.5 -90.7 -87.5 -123.7 n.a. 36 Federal -61.4 -60.0 -147.9 -101.7 -118.4 -119.6 -156.0 n.a. 37 State and local 28.2 31.7 31.9 29.1 27.7 32.1 32.3 n.a. 38 Capital grants received by the United States, net 1.2 1.1 .0 1.1 .0 .0 .0 .0 39 Gross investment 410.1 475.6 414.0 469.0 421.3 442.3 426.0 366.3 40 Gross private domestic 402.4 471.5 421.9 468.9 414.8 431.5 443.3 397.9 41 Net foreign 7.8 4.1 -7.9 0.1 6.5 10.8 -17.3 -31.7 42 Statistical discrepancy 3.9 -1.9 .1 -7.2 -7.5 .8 3.6 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • February 1983 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1981 1982 IItteemm ccrreeddiittss oorr ddeebbiittss 11997799 11998800 11998811 Q3 Q4 Ql Q2 Q3P 1 Balance on current account -466 1,520 4,471 751 -927 1,088 2,231 -4,227 ~> -1,834 1,293 742 2 841 -6,471 3 Merchandise trade balance2 -27,346 -25,338 -27,889 -7,845 -9,185 -5,873 -5,695 -12,458 4 Merchandise exports 184,473 224,237 236,254 57,694 57,593 55,780 55,174 52,480 5 Merchandise imports -211,819 -249,575 -264,143 -65,539 -66,778 -61,653 -60,869 -64,938 6 Military transactions, net -2,035 -2,472 -1,541 61 -528 167 247 527 7 Investment income, net3 31,215 29,910 33,037 8,183 8,529 6,861 7,688 7,418 8 Other service transactions, net 3,262 6,203 7,472 2,160 2,127 1,981 1,731 1,939 9 Remittances, pensions, and other transfers -2,011 -2,101 -2,104 -558 -562 -575 -671 -602 10 U.S. government grants (excluding military) -3,549 -4,681 -4,504 -1,250 -1,308 -1,473 -1,069 -1,051 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -3,743 -5,126 -5,137 -1,257 -987 -904 -1,547 -2,418 12 Change in U.S. official reserve assets (increase, -) -1,133 -8,155 -5,175 -4 262 -1,089 -1,132 -794 13 Gold -65 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,136 -16 -1,823 -225 -134 -400 -241 -434 15 Reserve position in International Monetary Fund -189 -1,667 -2,491 -647 -358 -547 -814 -459 16 Foreign currencies 257 -6,472 -861 868 754 -142 -77 99 17 Change in U.S. private assets abroad (increase, -)3 -59,469 -72,746 -98,982 -15,9% -46,952 -29,208 -35,111 -23,152 18 Bank-reported claims -26,213 -46,838 -84,531 -15,254 -42,645 -32,708 -36,923 -21,032 19 Nonbank-reported claims -3,307 -3,146 -331 855 -508 4,112 -304 n.a. 20 U.S. purchase of foreign securities, net -4,726 -3,524 -5,429 -618 -2,843 -531 -441 -3,103 21 U.S. direct investments abroad, net3 -25,222 -19,238 -8,691 -979 -956 -81 2,557 983 22 Change in foreign official assets in the United States (increase, +) -13,697 15,442 4,785 -5,835 8,119 -3,122 1,998 2,102 23 U.S. Treasury securities -22,435 9,708 4,983 -4,635 4,439 -1,344 -2,076 4,880 24 Other U.S. government obligations 463 2,187 1,289 545 -246 -2% 258 -101 25 Other U.S. government liabilities4 -73 561 -69 -337 275 -182 387 -509 26 Other U.S. liabilities reported by U.S. banks 7,213 -159 -4,083 -2,382 3,436 -1,516 3,393 -2,160 27 Other foreign official assets5 1,135 3,145 2,665 974 215 216 36 -8 28 Change in foreign private assets in the United States (increase, +)3 52,157 39,042 73,136 22,715 30,988 28,202 27,621 13,952 29 U.S. bank-reported liabilities 32,607 10,743 41,262 16,916 20,476 25,423 22,552 10,224 30 U.S. nonbank-reported liabilities 1,362 6,530 532 1,006 -457 -982 -2,304 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 4,960 2,645 2,932 -446 1,238 1,277 2,095 1,308 32 Foreign purchases of other U.S. securities, net 1,351 5,457 7,109 761 396 1,319 2,497 134 33 Foreign direct investments in the United States, net3 11,877 13,666 21,301 4,478 9,335 1,165 2,781 2,286 34 Allocation of SDRs 1,139 1,152 1,093 0 0 0 0 0 35 Discrepancy 25,212 28,870 25,809 -374 9,497 5,032 5,940 14,537 36 --22,,114444 22,,447744 --889999 557744 --11,,997733 37 Statistical discrepancy in recorded data before seasonal adjustment 25,212 28,870 25,809 1,770 7,023 5,931 5,366 16,510 MEMO: Changes in official assets 38 U.S. official reserve assets (increase, -) -1,133 -8,155 -5,175 -4 262 -1,089 -1,132 -794 39 Foreign official assets in the United States (increase, +) -13,624 14,881 4,854 -5,498 7,844 -2,940 1,611 2,611 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 5,543 12,769 13,314 2,935 2,230 4,988 3,073 164 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 465 631 602 132 64 93 125 137 1. Seasonal factors are no longer calculated for lines 12 through 41. 4. Primarily associated with military sales contracts and other transactions 2. Data are on an international accounts (IA) basis. Differs from the Census arranged with or through foreign official agencies. basis data, shown in table 3.11, for reasons of coverage and timing; military 5. Consists of investments in U.S. corporate stocks and in debt securities of exports 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 1982 IItteemm 11998800 11998811 11998822 June July Aug. Sept. Oct. Nov. Dec. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 220,626 233,677 212,193 18,822 18,026 17,498 17,387 16,698 15,693 16,335 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 244,871 261,305 243,952 21,310 19,559 23,494 20,644 21,0% 18,936 18,865 3 Trade balance -24,245 -27,628 -31,759 -2,488 -1,532 -5,9% -3,257 -4,398 -3,244 -2,529 NOTE. The data through 1981 in this table are reported by the Bureau of Census not covered in Census statistics, and (2) the exclusion of military sales (which are data of a free-alongside-ship (f.a.s.) value basis—that is, value at the port of combined with other military transactions and reported separately in the "service export. Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in account" in table 3.10, line 6). On the import side, additions are made for gold, the Census basis trade data; this adjustment has been made for all data shown in ship purchases, imports of electricity from Canada and other transactions; the table. Beginning with 1982 data, the value of imports are on a customs military payments are excluded and shown separately as indicated above. valuation basis. The Census basis data differ from merchandise trade data shown in table 3.10, SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade" U.S. International Transactions Summary, for reasons of coverage and timing. On (U.S. Department of Commerce, Bureau of the Census). the export side, the largest adjustments are: (1) the addition of exports to Canada 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1982 1983 TTyyppee 11997799 11998800 11998811 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Total1 18,956 26,756 30,075 31,227 31,233 31,864 31,711 34,006 33,958 33,936 2 Gold stock, including Exchange Stabilization Fund1 11,172 11,160 11,151 11,149 11,148 11,148 11,148 11,148 11,148 11,144 3 Special drawing rights2'3 2,724 2,610 4,095 4,591 4,601 4,809 4,801 4,929 5,250 5,267 4 Reserve position in International Monetary Fund2 1,253 2,852 5,055 6,386 6,433 6,406 6,367 7,185 7,348 8,035 5 Foreign currencies4-5 3,807 10,134 9,774 9,101 9,051 8,630 9,395 10,744 10,212 9,490 1. Gold held under earmark at Federal Reserve Banks for foreign and interna- 3. Includes allocations by the International Monetary Fund of SDRs as follows: tional 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, 3.13. 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 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 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position in against receipt of foreign currencies, if any. 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 1982 1983 AAsssseettss 11997799 11998800 11998811 July Aug. Sept. Oct. Nov/ Dec/ Jan. 1 Deposits 429 411 505 982 347 396 326 386 328 366 Assets held in custody 2 U.S. Treasury securities1 95,075 102,417 104,680 106,6% 104,136 106,117 107,636 107,467 112,544 115,872 3 Earmarked gold 15,169 14,965 14,804 14,762 14,761 14,726 14,706 14,711 14,716 14,717 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. NOTE. Excludes deposits and U.S. Treasury securities held for international Treasury securities payable in dollars and in foreign currencies. and regional organizations. Earmarked gold is gold held for foreign and international accounts and is not included in the gold stock of the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • February 1983 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1982 AAsssseett aaccccoouunntt 11997799 11998800 11998811 May June July' Aug/ Sept/ Oct. NOV.P All foreign countries 1 Total, all currencies 364,409 401,135 462,790 461,800 458,841 465,633 471,433 470,816 463,601 468,376 2 Claims on United States 32,302 28,460 63,743 79,701 83,573 82,555 88,928 90,262 89,036 90,877 3 Parent bank 25,929 20,202 43,267 57,172 58,583 55,962 60,307 60,867 61,283 62,472 4 Other 6,373 8,258 20,476 22,529 24,990 26,593 28,621 29,395 27,753 28,405 5 Claims on foreigners 317,330 354,960 378,899 362,377 356,389 363,842 362,180 360,210 354,373 357,071 6 Other branches of parent bank 79,662 77,019 87,821 88,380 87,163 89,446 91,593 93,283 90,030 91,891 7 Banks 123,420 146,448 150,708 139,535 137,614 142,763 138,436 135,377 133,365 133,239 8 Public borrowers 26,097 28,033 28,197 25,002 25,239 24,654 24,492 24,306 23,850 23,340 9 Nonbank foreigners 88,151 103,460 112,173 109,460 106,373 106,979 107,659 107,244 107,128 108,601 10 Other assets 14,777 17,715 20,148 19,722 18,879 19,236 20,325 20,344 20,192 20,428 11 Total payable in U.S. dollars 267,713 291,798 350,678 351,966 353,816 359,978 366,140 369,741 361,804 363,483 12 Claims on United States 31,171 27,191 62,142 78,095 82,006 80,912 87,320 88,608 87,316 89,001 13 Parent bank 25,632 19,896 42,721 56,687 58,086 55,283 59,626 60,202 60,538 61,655 14 Other 5,539 7,295 19,421 21,408 23,920 25,629 27,694 28,406 26,778 27,346 15 Claims on foreigners 229,120 255,391 276,882 261,928 260,530 267,267 266,420 268,253 261,896 261,671 16 Other branches of parent bank 61,525 58,541 69,398 70,725 70,386 72,488 74,252 77,470 74,032 74,759 17 Banks 96,261 117,342 122,055 110,900 110,274 115,072 111,712 110,591 107,448 106,606 18 Public borrowers 21,629 23,491 22,877 19,592 19,957 19,306 19,043 18,984 18,659 18,187 19 Nonbank foreigners 49,705 56,017 62,552 60,711 59,913 60,401 61,413 61,208 61,757 62,119 20 Other assets 7,422 9,216 11,654 11,943 11,280 11,799 12,400 12,880 12,592 12,811 United Kingdom 21 Total, all currencies 130,873 144,717 157,229 161,036 158,466 164,106 164,523 167,189 164,582 165,687 22 Claims on United States 11,117 7,509 11,823 20,155 20,744 23,962 27,031 27,534 27,829 28,677 23 Parent bank 9,338 5,275 7,885 15,854 16,768 19,680 22,730 22,970 23,717 24,278 24 Other 1,779 2,234 3,938 4,301 3,976 4,282 4,301 4,564 4,112 4,399 25 Claims on foreigners 115,123 131,142 138,888 134,845 131,860 133,964 130,814 132,746 129,913 130,666 26 Other branches of parent bank 34,291 34,760 41,367 39,621 37,696 37,250 36,937 40,385 37,013 38,319 27 Banks 51,343 58,741 56,315 54,674 54,727 56,428 53,582 52,203 52,568 51,414 28 Public borrowers 4,919 6,688 7,490 6,663 6,595 6,456 6,286 6,086 6,157 6,170 29 Nonbank foreigners 24,570 30,953 33,716 33,887 32,842 33,830 34,009 34,072 34,165 34,763 30 Other assets 4,633 6,066 6,518 6,063 5,862 6,180 6,678 6,909 6,840 6,344 31 Total payable in U.S. dollars 94,287 99,699 115,188 119,586 120,002 125,247 126,344 131,129 127,517 128,863 32 Claims on United States 10,746 7,116 11,246 19,608 20,256 23,421 26,514 26,919 27,255 28,093 33 Parent bank 9,297 5,229 7,721 15,663 16,599 19,451 22,496 22,758 23,478 24,035 34 Other 1,449 1,887 3,525 3,945 3,657 3,970 4,018 4,161 3,777 4,058 35 Claims on foreigners 81,294 89,723 99,850 95,926 95,857 97,699 95,293 99,008 95,269 95,870 36 Other branches of parent bank 28,928 28,268 35,439 33,922 32,567 32,007 31,414 35,703 32,243 33,154 37 Banks 36,760 42,073 40,703 39,593 40,479 42,515 40,321 39,786 39,077 38,310 38 Public borrowers 3,319 4,911 5,595 4,507 4,655 4,513 4,336 4,214 4,251 4,281 39 Nonbank foreigners 12,287 14,471 18,113 17,904 18,156 18,664 19,222 19,305 19,698 20,125 40 Other assets 2,247 2,860 4,092 4,052 3,889 4,127 4,537 5,202 4,993 4,900 Bahamas and Caymans 41 Total, all currencies 108,977 123,837 149,051 140,045 141,878 141,099 144,194 140,614 139,438 140,939 42 Claims on United States 19,124 17,751 46,546 54,411 56,704 52,646 56,087 55,467 55,713 57,106 43 Parent bank 15,196 12,631 31,643 37,119 36,608 31,242 32,822 32,155 32,927 34,015 44 Other 3,928 5,120 14,903 17,292 20,096 21,404 23,265 23,312 22,786 23,091 45 Claims on foreigners 86,718 101,926 98,002 81,297 81,170 84,416 83,835 81,054 79,539 79,155 46 Other branches of parent bank 9,689 13,342 12,951 14,186 15,407 17,538 17,806 17,772 17,955 18,066 47 Banks 43,189 54,861 55,096 43,274 42,747 44,229 43,616 41,333 40,439 40,995 48 Public borrowers 12,905 12,577 10,010 7,361 7,327 7,031 7,036 6,999 6,743 6,310 49 Nonbank foreigners 20,935 21,146 19,945 16,476 15,689 15,618 15,377 14,950 14,402 13,784 50 Other assets 3,135 4,160 4,503 4,337 4,004 4,037 4,272 4,093 4,186 4,678 51 Total payable in U.S. dollars 102,368 117,654 143,686 135,134 136,910 135,619 138,771 136,077 134,607 35,648 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.14 Continued 1982 LLiiaabbiilliittyy aaccccoouunntt 11997799 11998800 11998811 May June July' Aug/ Sept/ Oct. NOV.P All foreign countries 52 Total, all currencies 364,409 401,135 462,790 461,800 458,841 465,633 471,433 470,816 463,601 468,376 53 To United States 66,689 91,079 137,712 156,352 160,914 164,504 167,627 170,3% 169,312 171,756 54 Parent bank 24,533 39,286 56,289 56,470 59,202 60,939 64,385 66,994 64,102 66,254 55 Other banks in United States 13,968 14,473 19,197 27,685 29,534 31,555 32,425 33,763 32,607 31,764 56 Nonbanks 28,188 37,275 62,226 72,197 72,178 72,010 70,817 69,639 72,603 73,738 57 To foreigners 283,510 295,411 305,630 284,355 278,451 281,592 283,720 280,226 274,222 276,293 58 Other branches of parent bank 77,640 75,773 86,396 85,629 84,516 86,776 92,191 93,753 91,658 91,270 59 Banks 122,922 132,116 124,906 107,321 105,148 105,959 103,417 99,920 98,259 98,209 60 Official institutions 35,668 32,473 25,997 22,703 19,914 20,239 20,004 20,527 19,440 21,095 61 Nonbank foreigners 47,280 55,049 68,331 68,702 68,873 68,618 68,108 66,026 64,865 65,719 62 Other liabilities 14,210 14,690 19,448 21,093 19,476 19,537 20,086 20,194 20,067 20,327 63 Total payable in U.S. dollars 273,857 303,281 364,390 368,544 369,380 376,129 381,898 385,440 377,121 379,182 64 To United States 64,530 88,157 134,645 153,222 157,717 161,250 164,403 167,534 166,377 168,325 65 Parent bank 23,403 37,528 54,437 54,508 57,174 58,958 62,369 65,114 62,191 64,003 66 Other banks in United States 13,771 14,203 18,883 27,270 29,198 31,224 32,162 33,508 32,362 31,428 67 Nonbanks 27,356 36,426 61,325 71,444 71,345 71,068 69,872 68,912 71,824 72,894 68 To foreigners 201,514 206,883 217,602 202,529 200,262 203,767 205,709 206,553 199,297 198,944 69 Other branches of parent bank 60,551 58,172 69,299 68,538 68,516 70,429 75,344 78,499 76,237 74,621 70 Banks 80,691 87,497 79,594 66,611 65,821 66,520 63,959 62,535 59,782 58,829 71 Official institutions 29,048 24,697 20,288 17,900 15,373 15,737 15,672 16,607 15,253 16,774 72 Nonbank foreigners 31,224 36,517 48,421 49,480 50,552 51,081 50,734 48,912 48,025 48,720 73 Other liabilities 7,813 8,241 12,143 12,793 11,401 11,112 11,786 11,353 11,447 11,913 United Kingdom 74 Total, all currencies 130,873 144,717 157,229 161,036 158,466 164,106 164,523 167,189 164,582 165,687 75 To United States 20,986 21,785 38,022 43,882 44,086 46,965 49,001 53,919 53,777 54,003 76 Parent bank 3,104 4,225 5,444 6,694 6,323 6,679 8,022 11,336 10,568 10,597 77 Other banks in United States 7,693 5,716 7,502 8,972 9,985 11,215 11,616 13,280 12,567 12,374 78 Nonbanks 10,189 11,844 25,076 28,216 27,778 29,071 29,363 29,303 30,642 31,032 79 To foreigners 104,032 117,438 112,255 109,199 106,665 109,105 107,268 104,967 102,611 103,927 80 Other branches of parent bank 12,567 15,384 16,545 19,412 17,771 18,010 18,666 19,123 18,399 19,372 81 Banks 47,620 56,262 51,336 46,204 46,628 48,541 47,502 45,526 45,601 44,266 82 Official institutions 24,202 21,412 16,517 14,119 11,746 12,076 12,006 12,348 11,379 12,940 83 Nonbank foreigners 19,643 24,380 27,857 29,464 30,520 30,478 29,094 27,970 27,232 27,349 84 Other liabilities 5,855 5,494 6,952 7,955 7,715 8,036 8,254 8,303 8,194 7,757 85 Total payable in U.S. dollars 95,449 103,440 120,277 126,901 125,859 131,199 132,536 137,268 133,591 135,186 86 To United States 20,552 21,080 37,332 43,143 43,323 46,129 48,266 53,262 53,146 53,056 87 Parent bank 3,054 4,078 5,350 6,624 6,212 6,603 7,928 11,223 10,442 10,306 88 Other banks in United States 7,651 5,626 7,249 8,755 9,806 11,048 11,510 13,142 12,472 12,188 89 Nonbanks 9,847 11,376 24,733 27,764 27,305 28,478 28,828 28,897 30,232 30,562 90 To foreigners 72,397 79,636 79,034 79,914 78,794 81,207 79,954 80,025 76,519 77,982 91 Other branches of parent bank 8,446 10,474 12,048 14,958 13,903 14,202 14,514 15,548 14,614 15,310 92 Banks 29,424 35,388 32,298 29,965 30,557 32,364 31,898 31,187 30,404 29,092 93 Official institutions 20,192 17,024 13,612 11,829 9,843 10,200 10,322 11,012 9,806 11,198 94 Nonbank foreigners 14,335 16,750 21,076 23,162 24,491 24,441 23,220 22,278 21,895 22,382 95 Other liabilities 2,500 2,724 3,911 3,844 3,742 3,863 4,316 3,981 3,926 4,150 Bahamas and Caymans 96 Total, all currencies 108,977 123,837 149,051 140,045 141,878 141,099 144,194 140,614 139,438 140,939 97 To United States 37,719 59,666 85,704 94,635 97,916 98,609 99,270 %,936 96,810 98,475 98 Parent bank 15,267 28,181 39,396 36,608 39,416 41,122 42,971 41,806 40,225 41,900 99 Other banks in United States 5,204 7,379 10,474 16,827 17,410 17,831 17,911 17,927 17,481 16,805 100 Nonbanks 17,248 24,106 35,834 41,200 41,090 39,656 38,388 37,203 39,104 39,770 101 To foreigners 68,598 61,218 60,012 42,026 41,204 39,740 42,039 40,965 39,793 39,603 102 Other branches of parent bank 20,875 17,040 20,641 15,887 15,855 15,018 17,348 17,690 17,421 17,566 103 Banks 33,631 29,895 23,202 13,452 12,702 11,766 11,599 10,910 10,297 10,413 104 Official institutions 4,866 4,361 3,498 2,448 2,471 2,407 2,288 2,091 2,137 1,846 105 Nonbank foreigners 9,226 9,922 12,671 10,239 10,176 10,549 10,804 10,274 9,938 9,778 106 Other liabilities 2,660 2,953 3,335 3,384 2,758 2,750 2,885 2,713 2,835 2,861 107 Total payable in U.S. dollars 103,460 119,657 145,227 136,713 138,640 137,910 140,750 137,717 136,574 137,828 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • February 1983 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1982 IItteemm 11998800 11998811 June' July' Aug/ Sept/ Oct. Nov. Dec.P 1 Total1 164,578 169,702 168,322 170,228 169,289 171,094 171,308 168,048 172,690 By type 2 Liabilities reported by banks in the United States2 30,381 26,572 28,421 25,867 26,594 26,440 26,965 25,376 24,787 3 U.S. Treasury bills and certificates3 56,243 52,389 43,509 45,824 44,182 44,450 43,964 42,906 46,658 U.S. Treasury bonds and notes 4 Marketable 41,455 53,150 60,256 63,048 63,415 64,940 65,581 65,801 67,678 5 Nonmarketable4 14,654 11,791 10,150 9,750 9,350 9,350 9,350 8,750 8,750 6 U.S. securities other than U.S. Treasury securities' 21,845 25,800 25,986 25,739 25,748 25,914 25,448 25,215 24,817 By area 7 Western Europe1 81,592 65,484 58,171 58,791 61,120 61,350 60,723 59,356 61,338 8 Canada 1,562 2,403 1,577 1,519 1,771 2,057 2,204 2,044 2,070 9 Latin America and Caribbean 5,688 6,954 7,559 7,522 6,802 6,385 7,181 5,884 6,028 10 Asia 70,784 91,790 95,465 97,112 94,883 95,822 95,187 94,091 95,996 11 Africa 4,123 1,829 1,437 1,485 1,326 1,303 1,452 1,371 1,350 12 Other countries6 829 1,242 4,113 3,799 3,387 4,177 4,561 5,302 5,908 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, commer- agencies, and U.S. corporate stocks and bonds. cial paper, negotiable time certificates of deposit, and borrowings under repur- 6. Includes countries in Oceania and Eastern Europe. chase agreements. 3. Includes nonmarketable certificates of indebtedness (including those pay- NOTE. Based on Treasury Department data and on data reported to the able in foreign currencies through 1974) and Treasury bills issued to official Treasury Department by banks (including Federal Reserve Banks) and securities institutions of foreign countries. dealers in 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 1982 IItteemm 11997799 11998800 11998811 Dec. Mar. June' Sept. 1 Banks' own liabilities 1,918 3,748 3,767' 3,767' 4,290' 4,783 4,841 2 Banks' own claims 2,419 4,206 5,224 5,224 5,574 6,401 6,604 3 Deposits 994 2,507 3,398 3,398 3,532 3,526 3,537 4 Other claims 1,425 1,699 1,826 1,826 2,042 2,875 3,067 5 Claims of banks' domestic customers1 580 962 971 971 944 921 506 1. Assets owned by customers of the reporting bank located in the United NOTE. Data on claims exclude foreign currencies held by U.S. monetary States that represent claims on foreigners held by reporting banks for the accounts authorities, 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 1982 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11997799 11998800 11998811AA'' Juner July Aug/ Sept. Oct/ Nov. Dec.'' 1 All foreigners 187,521 205,297 243,279 287,244 285,114 293,122 298,515 297,617 302,001 305,218 2 Banks' own liabilities 117,196 124,791 162,974 213,910 209,172 217,564 220,427 218,741 225,293 225,277 3 Demand deposits 23,303 23,462 19,628 17,273 17,071 15,840 15,418 17,064 17,215 16,086 4 Time deposits' 13,623 15,076 28,903 55,986 59,603 62,208 62,332 62,236 62,988 67,021 5 Other2 16,453 17,583 17,398 22,944 20,292 24,211 23,520 22,842 24,382 23,702 6 Own foreign offices3 63,817 68,670 97,044 117,707 112,206 115,305 119,158 116,600 120,708 118,469 7 Banks' custody liabilities4 70,325 80,506 80,305 73,335 75,941 75,558 78,089 78,876 76,708 79,941 8 U.S. Treasury bills and certificates5 48,573 57,595 55,316 48,817 51,211 49,646 5511,,557722 5533,,337744 5522,,113388 5555,,661144 9 Other negotiable and readily transferable instruments6 19,396 20,079 19,019 20,506 20,722 22,134 22,437 21,787 20,965 20,609 10 Other 2,356 2,832 5,970 4,011 4,009 3,778 4,080 3,715 3,605 3,718 11 Nonmonetary international and regional organizations7 2,356 2,344 2,721 4,001 4,082 5,073 5,050 6,036 6,465 4,597 12 Banks' own liabilities 714 444 638 1,233 2,246 3,093 2,752 2,337 3,387 1,584 13 Demand deposits 260 146 262 300 343 265 194 261 257 106 14 Time deposits1 151 85 58 586 633 453 734 431 969 1,339 15 Other2 303 212 318 347 1,271 2,376 1,825 1,645 2,161 139 16 Banks' custody liabilities4 1,643 1,900 2,083 2,768 1,835 1,980 2,298 3,699 3,078 3,013 17 U.S. Treasury bills and certificates 102 254 541 1,425 487 328 676 22,,116600 11,,777744 11,,662211 18 Other negotiable and readily transferable instruments6 1,538 1,646 1,542 1,343 1,349 1,652 1,621 1,539 1,304 1,392 19 Other 2 0 0 0 0 0 0 0 0 0 20 Official institutions8 78,206 86,624 79,037 71,931 71,690 70,776 70,891 70,930 68,282 71,446 21 Banks' own liabilities 18,292 17,826 16,813 18,869 16,279 16,323 16,646 16,898 16,676 16,440 22 Demand deposits 4,671 3,771 2,564 3,155 2,788 1,994 2,526 2,138 2,127 1,981 23 Time deposits1 3,050 3,612 4,197 5,414 6,497 5,859 5,312 6,132 5,524 5,427 24 Other2 10,571 10,443 10,052 10,300 6,994 8,470 8,809 8,629 9,025 9,033 25 Banks' custody liabilities4 59,914 68,798 62,224 53,062 55,411 54,453 54,245 54,031 51,607 55,006 26 U.S. Treasury bills and certificates5 47,666 56,243 52,389 43,509 45,824 44,182 44,450 4433,,996644 4422,,990066 4466,,665588 27 Other negotiable and readily transferable instruments6 12,196 12,501 9,787 9,519 9,552 10,234 9,755 10,033 8,672 8,319 28 Other 52 54 47 33 36 37 39 34 28 28 29 Banks9 88,316 96,415 135,558 174,439 171,474 177,557 181,452 179,672 184,778 185,053 30 Banks' own liabilities 83,299 90,456 123,839 161,733 157,802 163,348 165,627 164,054 168,511 168,636 31 Unaffiliated foreign banks 19,482 21,786 26,795 44,027 45,596 48,043 46,469 47,454 47,803 50,167 32 Demand deposits 13,285 14,188 11,614 9,274 9,384 8,765 8,138 9,887 9,739 8,733 33 Time deposits1 1,667 1,703 8,695 23,239 25,006 26,698 26,503 26,099 26,232 28,320 34 Other2 4,530 5,895 6,486 11,513 11,206 12,580 11,828 11,468 11,833 13,114 35 Own foreign offices3 63,817 68,670 97,044 117,707 112,206 115,305 119,158 116,600 120,708 118,469 36 Banks' custody liabilities4 5,017 5,959 11,718 12,706 13,671 14,209 15,825 15,618 16,267 16,417 37 U.S. Treasury bills and certificates 422 623 1,687 2,926 3,872 3,970 4,897 55,,663344 55,,779922 55,,880099 38 Other negotiable and readily transferable instruments6 2,415 2,748 4,421 6,520 6,661 7,102 7,916 7,181 7,782 7,827 39 Other 2,179 2,588 5,611 3,260 3,138 3,138 3,012 2,803 2,693 2,782 40 Other foreigners 18,642 19,914 25,964 36,873 37,868 39,716 41,123 40,980 42,475 44,122 41 Banks' own liabilities 14,891 16,065 21,684 32,073 32,845 34,800 35,401 35,452 36,719 38,617 42 Demand deposits 5,087 5,356 5,189 4,544 4,556 4,816 4;560 4,778 5,093 5,266 43 Time deposits 8,755 9,676 15,953 26,746 27,467 29,199 29,783 29,574 30,263 31,935 44 Other2 1,048 1,033 543 783 822 785 1,059 1,100 1,363 1,416 45 Banks' custody liabilities4 3,751 3,849 4,279 4,800 5,023 4,916 5,721 5,528 5,756 5,505 46 U.S. Treasury bills and certificates 382 474 699 957 1,028 1,167 11,,554488 11,,661155 11,,666666 11,,552255 47 Other negotiable and readily transferable instruments6 3,247 3,185 3,268 3,125 3,160 3,147 3,146 3,035 3,207 3,071 48 Other 123 190 312 718 835 603 1,028 878 884 908 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,984 10,745 10,747 12,921 13,029 13,921 13,533 13,999 13,408 14,296 1. Excludes negotiable time certificates of deposit, which are included in 6. Principally bankers acceptances, commercial paper, and negotiable time "Other negotiable and readily transferable instruments." certificates of deposit. 2. Includes borrowing under repurchase agreements. 7. Principally the International Bank for Reconstruction and Development, and 3. U.S. banks: includes amounts due to own foreign branches and foreign the Inter-American and Asian Development Banks. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 8. Foreign central banks and foreign central governments, and the Bank for regulatory agencies. Agencies, branches, and majority-owned subsidiaries of International Settlements. foreign banks: principally amounts due to head office or parent foreign bank, and 9. Excludes central banks, which are included in "Official institutions." foreign branches, agencies or wholly owned subsidiaries of head office or parent • Liabilities and claims of banks in the United States were increased, foreign bank. beginning in December 1981, by the shift from foreign branches to international 4. Financial claims on residents of the United States, other than long-term banking facilities in the United States of liabilities to, and claims on, foreign securities, held by or through reporting banks. residents. 5. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official institutions of foreign countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • February 1983 3.17 Continued 1982 AArreeaa aanndd ccoouunnttrryy 11997799 11998800 11998811AA June' July Aug. Sept. Oct. 1 Total 187,521 205,297 243,279' 287,244 285,114' 293,122' 298,515 297,617' 302,001 2 Foreign countries 185,164 202,953 240,558' 283,243 281,032' 288,049' 293,466 291,581' 295,536 3 Europe 90,952 90,897 91,019^ 103,494 107,158' 112,017' 114,263 114,895 117,087 4 Austria 413 523 587 432 501 531 537 508 441 5 Belgium-Luxembourg 2,375 4,019 4,117 2,872 2,967' 3,218 3,259 2,782 2,498 6 Denmark 1,092 497 333 510 452' 446 149 166 221 7 Finland 398 455 2% 181 162 224 328 478 572 8 France 10,433 12,125 8,486 9,241 8,642' 8,145 7,720 7,358' 7,065 9 Germany 12,935 9,973 7,665 6,221 5,624 5,397 5,331 5,360 6,093 10 Greece 635 670 463 512 506 559 471 516 496 11 Italy 7,782 7,572 7,290 4,720 5,760 6,703 6,714 5,541 4,779 12 Netherlands 2,337 2,441 2,823 2,868 2,789 2,838 2,899 3,102 3,100 13 Norway 1,267 1,344 1,457 1,370 1,333 1,634 1,773 2,026 2,197 14 Portugal 557 374 354 365 365 453 386 356 453 15 Spain 1,259 1,500 916 1,191 1,133 1,223 1,106 1,315 1,301 16 Sweden 2,005 1,737 1,545 1,381 1,385 1,278 1,324 2,000 1,615 17 Switzerland 17,954 16,689 18,72V 22,391 23,847' 25,014' 26,519 26,736' 27,994 18 Turkey 120 242 518 167 222 287 301 317 255 19 United Kingdom 24,700 22,680 28,287' 41,971 44,970' 46,881 48,478 48,809 50,119 20 Yugoslavia 266 681 375 314 320 317 307 390 470 21 Other Western Europe1 4,070 6,939 6,245' 6,223 5,739' 6,381 6,294 6,484' 6,889 22 U.S.S.R 52 68 49 44 41 47 47 111 45 23 Other Eastern Europe2 302 370 493 521 397 440 322 541 486 24 Canada 7,379 10,031 10,250 11,566 11,168 12,194 11,623 12,163 11,720 25 Latin America and Caribbean 49,686 53,170 84,685 109,0% 103,810' 106,882' 109,110 106,616' 109,487 226/ A Ba rg h e a n m ti a n s a 15 1 , , 2 5 5 8 5 2 1 2 6 , , 1 3 3 8 2 1 3 2 4 , , 4 4 4 0 5 0 44 2 , , 3 0 0 3 0 0 3 2 9 , , 1 3 5 8 4 8 ' ' 41 2 , , 5 7 0 1 2 3 ' 42 3 , , 1 3 6 5 4 9 4 3 1 , , 4 10 8 0 2 ' ' 4 3 3 , , 4 5 3 4 2 8 28 Bermuda 430 670 765 1,286 1,302 1,289 1,519 1,507 1,5% 29 Brazil 1,005 1,216 1,568 1,822 1,823 1,865 1,752 2,020' 1,865 30 British West Indies 11,138 12,766 17,794 22,562 22,039' 22,871 23,294 23,071' 24,302 31 Chile 468 460 664 1,124 1,442 1,170 1,293 1,438 1,444 32 Colombia 2,617 3,077 2,993 2,700 2,699 2,636 2,516 2,407 2,426 33 Cuba 13 6 9 6 7 9 7 7 8 34 Ecuador 425 371 434 559 527 478 524 556 519 35 Guatemala 414 367 479 580 613 616 639 636 639 36 Jamaica 76 97 87 100 139 136 121 118 108 37 Mexico 4,185 4,547 7,163 8,953 9,643 9,259 8,468 8,031' 8,135 38 Netherlands Antilles 499 413 3,182 3,728 3,601' 3,759 3,713 3,677' 3,518 39 Panama 4,483 4,718 4,847 5,377 4,884 4,656 6,172 4,688' 4,702 40 Peru 383 403 694 1,059 931 984 974 1,031 959 41 Uruguay 202 254 367 542 609 665 721 844 651 42 Venezuela 4,192 3,170 4,245 9,382 9,140' 9,219 8,625 8,7% 8,315 43 Other Latin America and Caribbean 2,318 2,123 2,548 2,986 2,869' 3,056 3,249 3,207 3,321 44 Asia 33,005 42,420 50,005' 5522,,001111 5522,,111188'' 5500,,885544 5511,,111155 4499,,880000'' 48,597 China 45 Mainland 49 49 158 244 261 245 254 216 214 46 Taiwan 1,393 1,662 2,082 2,335 2,371 2,323 2,490 2,568' 2,786 47 Hong Kong 1,672 2,548 3,950 4,880 4,918 4,551 4,945 4,957 4,847 48 India 527 416 385 540 551 655 407 449 507 49 Indonesia 504 730 640 583 722 593 436 748 534 50 Israel 707 883 592 620 476 486 583 622' 705 51 Japan 8,907 16,281 20,750' 19,823 19,861' 19,291 18,895 16,86C 15,680 52 Korea 993 1,528 2,013 1,863 1,934 1,712 1,905 1,886 1,791 53 Philippines 795 919 874 841 660 728 712 736 768 54 Thailand 277 464 534 485 450 369 310 365 349 55 Middle-East oil-exporting countries3 15,300 14,453 13,174 14,257 14,252' 14,106 14,026 14,05c 14,396 56 Other Asia 1,879 2,487 4,854' 5,540 5,662' 5,795 6,152 6,344' 6,020 57 Africa 3,239 5,187 3,180 2,675 2,692 2,586 2,783 3,369 3,192 58 Egypt 475 485 360 447 430 405 385 242 373 59 Morocco 33 33 32 59 52 47 63 54 66 60 South Africa 184 288 420 335 339 341 344 279 564 61 Zaire 110 57 26 37 25 25 20 23 22 62 Oil-exporting countries4 1,635 3,540 1,395 901 1,025 908 1,074 1,669 1,250 63 Other Africa 804 783 946 896 821 860 897 1,103 918 64 Other countries 904 1,247 1,419 4,400 4,085 3,516 4,572 4,738 5,452 65 Australia 684 950 1,223 4,172 3,831 3,317 4,355 4,530 5,224 66 All other 220 297 196 228 254 199 216 207 228 67 Nonmonetary international and regional organizations 2,356 2,344 2,721 4,001 4,082 5,073 5,050 6,036 6,465 68 International 1,238 1,157 1,661 2,860 3,064 3,936' 3,934 5,141 5,522 69 Latin American regional 806 890 710 694 606 776 719 573 533 70 Other regional5 313 2% 350 446 412 362' 397 322 410 1. Includes the Bank for International Settlements. Beginning April 1978, also 5. Asian, African, Middle Eastern, and European regional organizations, includes Eastern European countries not listed in line 23. except the Bank for International Settlements, which is included in "Other 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Western Europe." Democratic Republic, Hungary, Poland, and Romania. A Liabilities and claims of banks in the United States were increased, beginning 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and in December 1981, by the shift from foreign branches to international banking United Arab Emirates (Trucial States). facilities in the United States of liabilities to, and claims on, foreign residents. 4. 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 1982 AArreeaa aanndd ccoouunnttrryy 11997799 11998800 11998811AA'' Juner July' Aug. Sept. Oct. Nov. Dec.? 1 Total 133,943 172,592 251,047 315,738 323,295 328,621' 339,367 334,138' 334,699 353,039 2 Foreign countries 133,906 172,514 250,991 315,695 323,250 328,515' 339,323 334,082' 334,642 352,971 3 Europe 28,388 32,108 49,058 64,101 67,491 70,807' 76,481 78,346' 78,047 84,009 4 Austria 284 236 121 137 189 186 146 173' 197 216 5 Belgium-Luxembourg 1,339 1,621 2,843 3,760 4,092 4,421 4,804 4,962' 5,403 5,113 6 Denmark 147 127 187 281 303 323 358 396 406 554 7 Finland 202 460 546 732 699 776 806 813 904 990 8 France 3,322 2,958 4,124 6,319 5,860 5,960 5,815 6,218 6,636 6,864 9 Germany 1,179 948 936 1,757 1,730 1,565 1,609 1,522 1,766 1,849 1(1 Greece 154 256 333 297 294 270 283 335 373 452 11 Italy 1,631 3,364 5,240 6,022 6,292 6,569 6,733 7,346 7,718 7,510 1? Netherlands 514 575 682 988 1,118 1,085 1,099 1,285 1,122 1,394 13 Norway 276 227 384 424 538 482 575 544 650 569 14 Portugal 330 331 529 938 990 970 998 1,018 924 943 15 Spain 1,051 993 2,100 3,091 3,304 3,520 3,469 3,558 3,633 3,719 16 Sweden 542 783 1,205 1,613 1,510 1,693 2,398 2,799 2,804 3,041 17 Switzerland 1,165 1,446 2,213 1,596 1,610 1,589 1,859 1,636 1,516 1,674 18 Turkey 149 145 424 589 646 600 605 603 598 560 19 United Kingdom 13,795 14,917 23,655 31,966 34,702 37,181' 41,370 41,652' 39.699 44,761 20 Yugoslavia 611 853 1,224 1,294 1,266 1,220 1,196 1,248 1,261 1,418 21 Other Western Europe1 175 179 209 238 280 286 325 266 380 368 27 U.S.S.R 268 281 377 296 274 296 246 242 227 263 23 Other Eastern Europe2 1,254 1,410 1,725 1,763 1,793 1,814 1,787 1,728 1,832 1,751 24 Canada 4,143 4,810 9,164 12,652 13,049 12,083 11,852 12,977' 12,514 14,191 25 Latin America and Caribbean 67,993 92,992 138,121 173,445 178,323 181,708' 186,355 179,981' 180,183 186,788 26 Argentina 4,389 5,689 7,522 11,014 10,971 10,936 10,964 11,019 10,816 11,025 27 Bahamas 18,918 29,419 43,437 51,861 52,503 54,706' 55,340 51,692' 51,859 55,868 28 Bermuda 496 218 346 414 388 385 429 602' 957 600 29 Brazil 7,713 10,496 16,918 21,179 21,560 22,146 23,081 22,97(V 22,965 23,164 30 British West Indies 9,818 15,663 21,920 26,033 28,136 28,519' 29,982 28,223' 27,309 28,743 31 Chile 1,441 1,951 3,690 5,270 5,228 5,367 5,394 5,276 5,091 5,565 3? Colombia 1,614 1,752 2,018 2,558 2,607 2,650 2,826 2,838 2,895 3,185 33 Cuba 4 3 3 3 8 3 3 3 3 3 34 Ecuador 1,025 1,190 1,531 2,022 2,027 2,048 2,127 2,057 2,101 2,052 35 Guatemala3 134 137 124 124 121 116 119 111 140 124 36 Jamaica3 47 36 62 124 578 508 387 151 218 181 37 Mexico 9,099 12,595 22,408 29,537 29,742 29,347 29,596 29,371 29,508 29,385 38 Netherlands Antilles 248 821 1,076 1,028 1,032 778 825 688 730 906 39 Panama 6,041 4,974 6,779 8,662 9,147 9,842 10,583 9,983' 10,265 10,123 40 Peru 652 890 1,218 2,047 2,064 2,062 2,252 2,244 2,259 2,330 41 Uruguay 105 137 157 381 413 457 550 572 606 683 42 Venezuela 4,657 5,438 7,069 9,145 9,692 9,800 9,867 9,925 10,250 10,682 43 Other Latin America and Caribbean 1,593 1,583 1,844 2,042 2,105 2,039 2,032 2,257 2,211 2,168 44 30,730 39,078 49,770 58,567 57,388 57,229' 57,335 55,678' 56,667 60,633 China 45 Mainland 35 195 107 124 139 127 126 139 194 215 46 Taiwan 1,821 2,469 2,461 2,048 1,977 1,891 1,949 2,020 2,255 2,285 47 Hong Kong 1,804 2,247 4,126 6,390 6,124 6,447 6,723 5,976 6,200 7,705 48 India 92 142 123 252 266 235 275 254 258 222 49 Indonesia 131 245 346 288 294 297 292 315 314 342 50 Israel 990 1,172 1,562 1,835 1,637 1,534 1,623 1,748 1,895 2,031 51 Japan 16,911 21,361 26,757 30,437 30,026 29,491' 28,496 26,722' 26,049 27,225 5? Korea 3,793 5,697 7,324 7,119 7,046 6,967 7,365 7,79C 8,536 9,377 53 Philippines 737 989 1,817 2,605 2,605 2,611 2,508 2,560 2,467 2,555 54 Thailand 933 876 564 459 415 388 409 442 501 638 55 Middle East oil-exporting countries4 1,548 1,432 1,575 2,550 2,493 2,633 2,591 2,848 3,176 3,088 56 Other Asia 1,934 2,252 3,009 4,460 4,366 4,607' 4,978 4,865' 4,823 4,949 57 Africa 1,797 2,377 3,503 4,821 4,971 4,811' 5,176 5,017 5,274 5,350 58 Egypt 114 151 238 416 378 399 386 365 349 322 59 Morocco 103 223 284 334 314 368 376 367 384 347 60 South Africa 445 370 1,011 1,467 1,620 1,574 1,775 1,744 1,832 2,013 61 Zaire 144 94 112 84 81 58 59 61 58 57 62 Oil-exporting countries5 391 805 657 799 848 761 842 762 903 803 63 Other 600 734 1,201 1,722 1,730 1,651' 1,738 1,718 1,747 1,807 64 Other countries 855 1,150 1,376 2,108 2,028 1,878 2,125 2,083 1,957 2,000 65 Australia 673 859 1,203 1,806 1,700 1,534 1,792 1,713 1,528 1,627 66 All other 182 290 172 302 328 344 332 370 429 373 67 Nonmonetary international and regional organizations6 36 78 56 43 45 106 44 56 57 68 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 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German "Other Western Europe." Democratic 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 • Liabilities and claims of banks in the United States were increased, United Arab Emirates (Trucial States). beginning in December 1981, by the shift from foreign branches to international banking facilities in the United States of liabilities to, and claims on, foreign residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • February 1983 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 1982 TTyyppee ooff ccllaaiimm 11997799 11998800 11998811AA'' June' Julyr Aug/ Sept. Oct/ Nov. Dec? 1 Total 111111155555554444444,,,,,,,000000033333330000000 111111199999998888888,,,,,,,666666699999998888888 222222288888886666666,,,,,,,444444411111115555555 333333355555556666666,,,,,,,444444444444449999999 333333377777776666666,,,,,,,444444444444443333333 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111133333333333333,,,,,,,999999944444443333333 111111177777772222222,,,,,,,555555599999992222222 222222255555551111111,,,,,,,000000044444447777777 333333311111115555555,,,,,,,777777733333338888888 323,295 328,621 333333333333339999999,,,,,,,333333366666667777777 334,138 334,699 353,039 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 11111115555555,,,,,,,999999933333337777777 22222220000000,,,,,,,888888888888882222222 33333331111111,,,,,,,333333311111116666666 44444440000000,,,,,,,000000055555553333333 40,612 41,758 44444442222222,,,,,,,666666688888882222222 42,459 42,275 44,522 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 44444447777777,,,,,,,444444422222228888888 66666665555555,,,,,,,000000088888884444444 99999996666666,,,,,,,666666644444447777777 111111111111115555555,,,,,,,000000099999996666666 114,412 118,642 111111122222225555555,,,,,,,777777766666661111111 116,870 115,961 126,460 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 44444440000000,,,,,,,999999922222227777777 55555550000000,,,,,,,111111166666668888888 77777774444444,,,,,,,000000088888886666666 111111100000001111111,,,,,,,888888800000009999999 108,572 109,143 111111111111111111111,,,,,,,444444499999999999999 114,301 115,465 119,547 66 DDeeppoossiittss 6666666,,,,,,,222222277777774444444 8888888,,,,,,,222222255555554444444 22222222222222,,,,,,,999999977777779999999 33333336666666,,,,,,,888888800000002222222 40,276 40,929 44444440000000,,,,,,,777777700000005555555 42,024 41,336 43,102 77 OOtthheerr 33333334444444,,,,,,,666666655555554444444 44444441111111,,,,,,,999999911111114444444 55555551111111,,,,,,,111111100000007777777 66666665555555,,,,,,,000000000000007777777 68,296 68,214 77777770000000,,,,,,,777777799999994444444 72,278 74,130 76,445 88 AAllll ootthheerr ffoorreeiiggnneerrss 22222229999999,,,,,,,666666655555550000000 33333336666666,,,,,,,444444455555559999999 44444448888888,,,,,,,999999999999998888888 55555558888888,,,,,,,777777788888880000000 59,699 59,078 55555559999999,,,,,,,444444422222224444444 60,508 60,998 62,511 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 22222220000000,,,,,,,000000088888888888888 22222226666666,,,,,,,111111100000006666666 33333335555555,,,,,,,333333366666668888888 44444440000000,,,,,,,777777711111112222222 33333337777777,,,,,,,000000077777776666666 999999955555555555555 888888888888885555555 1111111,,,,,,,333333377777778888888 1111111,,,,,,,444444422222226666666 1111111,,,,,,,333333399999990000000 11 Negotiable and readily transferable 11111113333333,,,,,,,111111100000000000000 11111115555555,,,,,,,555555577777774444444 22222225555555,,,,,,,777777755555552222222 33333331111111,,,,,,,999999966666666666666 22222228888888,,,,,,,555555577777777777777 12 Outstanding collections and other 6666666,,,,,,,000000033333332222222 9999999,,,,,,,666666644444448888888 8888888,,,,,,,222222233333338888888 7777777,,,,,,,333333322222220000000 7777777,,,,,,,111111111111110000000 13 MEMO: Customer liability on 11111118888888,,,,,,,000000022222221111111 22222222222222,,,,,,,777777711111114444444 22222229999999,,,,,,,555555511111117777777 33333333333333,,,,,,,111111133333331111111 33333335555555,,,,,,,111111100000003333333 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 ... 22,333 24,511 39,831 44,566 45,239 43,911 43,671 45,443 46,805 n.a. 1. U.S. banks: includes amounts due from own foreign branches and foreign 4. Includes demand and time deposits and negotiable and nonnegotiable subsidiaries consolidated in "Consolidated Report of Condition" filed with bank certificates of deposit denominated in U.S. dollars issued by banks abroad. For regulatory agencies. Agencies, branches, and majority-owned subsidiaries of description of changes in data reported by nonbanks, see July 1979 BULLETIN, p. foreign banks: principally amounts due from head office or parent foreign bank, 550. and foreign branches, agencies, or wholly owned subsidiaries of head office or • Liabilities and claims of banks in the United States were increased, parent foreign bank. beginning in December 1981, by the shift from foreign branches to international 2. Assets owned by customers of the reporting bank located in the United banking facilities in the United States of liabilities to, and claims on, foreign States that represent claims on foreigners held by reporting banks for the account residents. of their domestic customers. NOTE. Beginning April 1978, data for banks' own claims are given on a monthly 3. Principally negotiable time certificates of deposit and bankers acceptances. basis, but the data for claims of banks' own domestic customers are available on 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 1981 1982 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11997799 11998800 Sept. Dec. A' Mar/ June' Sept. 1 Total 86,181 106,748 122,475' 153,839 174,506 200,493 213,061 By borrower 2 Maturity of 1 year or less1 65,152 82,555 94,957 115,818 133,035 151,622 160,949 3 Foreign public borrowers 7,233 9,974 12,978 15,099 16,573 19,397 20,138 4 All other foreigners 57,919 72,581 81,979 100,718 116,463 132,225 140,811 5 Maturity of over 1 year1 21,030 24,193 27,518' 38,022 41,470 48,871 52,112 6 Foreign public borrowers 8,371 10,152 12,562' 15,662 16,831 20,082 21,928 7 All other foreigners 12,659 14,041 14,956 22,360 24,639 28,789 30,184 By area Maturity of 1 year or less1 8 Europe 15,235 18,715 23,015 27,903 34,284 39,053 44,555 9 Canada 1,777 2,723 3,959 4,634 5,805 6,582 6,975 10 Latin America and Caribbean 24,928 32,034 35,590 48,473 58,244 67,975 71,536 11 21,641 26,686 29,295 31,408 30,564 33,537 33,079 12 Africa 1,077 1,757 2,324 2,457 2,890 3,259 3,624 13 All other2 493 640 774 943 1,249 1,217 1,180 Maturity of over 1 year1 14 Europe 4,160 5,118 6,422' 8,092 8,333 9,243 10,576 15 Canada 1,317 1,448 1,347 1,774 1,858 2,340 1,867 16 Latin America and Caribbean 12,814 15,075 17,478 25,088 27,666 32,897 34,258 17 1,911 1,865 1,550 1,902 2,245 2,474 3,370 18 Africa 655 507 548 899 1,056 1,295 1,351 19 All other2 173 179 172 267 312 622 690 1. Remaining time to maturity. • Liabilities and claims of banks in the United States were increased, 2. Includes nonmonetary international and regional organizations. beginning in December 1981, by the shift from foreign branches to international banking facilities in the United States of liabilities to, and claims on, foreign residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-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 1980 1981 1982 AArreeaa oorr ccoouunnttrryy 1199778822cc 11997799cc Sept. Dec. Mar. June Sept. Dec.c Mar.c Junec Sept.Pc 1 Total 266.2 303.9 339.3 352.0 372.1 382.8 399.8 414.3 417.5 430.7 431.4 7 G 10 countries and Switzerland 124.7 138.4 158.8 162.1 168.5 168.3 172.2 175.2 173.7 173.8 172.0 3 Belgium-Luxembourg 9.0 11.1 13.6 13.0 13.6 13.8 14.1 13.3 13.2 14.1 13.5 4 France 12.2 11.7 13.9 14.1 14.5 14.7 16.0 15.3 15.9 16.5 15.7 Germany 11.3 12.2 12.9 12.1 13.3 12.1 12.7 12.9 12.5 12.7 12.2 6 Italy 6.7 6.4 7.2 8.2 7.7 8.4 8.6 9.6 9.0 9.0 9.6 7 Netherlands 4.4 4.8 4.4 4.4 4.6 4.2 3.7 4.0 4.0 4.1 3.8 8 Sweden 2.1 2.4 2.8 2.9 3.2 3.1 3.4 3.7 4.1 4.0 4.7 9 Switzerland 5.3 4.7 3.4 5.0 5.1 5.2 5.1 5.5 5.3 5.1 5.0 10 United Kingdom 47.3 56.4 66.7 67.4 68.5 67.0 68.8 69.8 69.7 68.3 68.7 11 Canada 6.0 6.3 7.7 8.4 8.9 10.8 11.8 10.9 11.6 11.3 10.7 12 Japan 20.6 22.4 26.1 26.5 29.1 28.9 28.0 30.1 28.4 28.7 28.0 13 Other developed countries 19.4 19.9 20.6 21.6 23.5 24.8 26.4 28.4 30.6 32.1 32.6 14 Austria 1.7 2.0 1.8 1.9 1.8 2.1 2.2 1.9 2.1 2.1 2.0 15 Denmark 2.0 2.2 2.2 2.3 2.4 2.3 2.5 2.3 2.5 2.6 2.5 16 Finland 1.2 1.2 1.2 1.4 1.4 1.3 1.4 1.7 1.6 1.6 1.8 17 Greece 2.3 2.4 2.6 2.8 2.7 3.0 2.9 2.8 2.8 2.6 2.5 18 Norway 2.1 2.3 2.4 2.6 2.8 2.8 3.0 3.1 3.2 3.2 3.4 19 Portugal .6 .7 .7 .6 .6 .8 1.0 1.1 1.2 1.5 1.6 70 Spain 3.5 3.5 4.2 4.4 5.5 5.7 5.8 6.7 7.2 7.3 7.7 71 Turkey 1.5 1.4 1.3 1.5 1.5 1.4 1.5 1.4 1.6 1.5 1.5 22 Other Western Europe 1.3 1.4 1.7 1.7 1.8 1.8 1.9 2.1 2.2 2.2 2.1 23 South Africa 2.0 1.3 1.2 1.1 1.5 1.9 2.5 2.8 3.3 3.5 3.6 24 Australia 1.4 1.3 1.2 1.3 1.5 1.7 1.9 2.5 3.0 4.0 4.0 75 OPEC countries3 22.7 22.9 21.4 22.7 21.7 22.2 23.5 24.5 25.2 26.2 27.0 76 Ecuador 1.6 1.7 1.9 2.1 2.0 2.0 2.1 2.2 2.3 2.4 2.3 77 Venezuela 7.2 8.7 8.5 9.1 8.3 8.8 9.2 9.7 9.7 9.9 10.1 78 Indonesia 2.0 1.9 1.9 1.8 2.1 2.1 2.5 2.5 2.7 2.7 2.9 79 Middle East countries 9.5 8.0 6.7 6.9 6.7 6.8 7.1 7.5 8.2 8.7 9.1 30 African countries 2.5 2.6 2.4 2.8 2.6 2.6 2.6 2.5 2.2 2.5 2.7 31 Non-OPEC developing countries 52.6 63.0 73.0 77.4 82.2 84.8 90.2 96.2 97.5 103.6 103.9 Latin America 32 Argentina 3.0 5.0 7.6 7.9 9.5 8.5 9.3 9.4 9.9 9.7 9.1 33 Brazil 14.9 15.2 15.8 16.2 17.0 17.5 17.7 19.1 19.7 21.3 22.3 34 Chile 1.6 2.5 3.2 3.7 4.0 4.8 5.5 5.8 6.0 6.4 6.2 35 Colombia 1.4 2.2 2.4 2.6 2.4 2.5 2.5 2.6 2.3 2.6 2.8 36 Mexico 10.8 12.0 14.4 15.9 17.0 18.2 20.0 21.6 22.9 25.1 24.8 37 1.7 1.5 1.5 1.8 1.8 1.7 1.8 2.0 1.9 2.4 2.6 38 Other Latin America 3.6 3.7 3.9 3.9 4.7 3.8 4.2 4.1 4.1 4.0 4.5 Asia China 39 Mainland .0 .1 .1 .2 .2 .2 .2 .2 .2 .3 .2 40 Taiwan 2.9 3.4 4.1 4.2 4.4 4.6 5.1 5.1 5.1 5.0 4.9 41 India .2 .2 .2 .3 .3 .3 .3 .3 .5 .5 .5 47 Israel 1.0 1.3 1.1 1.5 1.3 1.8 1.5 2.1 1.7 2.2 1.9 43 Korea (South) 3.9 5.4 7.3 7.1 7.7 8.8 8.6 9.4 8.6 8.9 9.3 44 Malaysia .6 1.0 1.1 1.1 1.2 1.4 1.4 1.7 1.7 1.9 1.8 45 Philippines 2.8 4.2 4.8 5.1 4.8 5.1 5.6 6.0 5.9 6.3 6.0 46 Thailand 1.2 1.5 1.5 1.6 1.6 1.5 1.4 1.5 1.4 1.3 1.3 47 Other Asia .2 .5 .5 .6 .5 .7 .8 1.0 1.2 1.2 1.3 Africa 48 Egypt .4 .6 .6 .8 .8 .7 1.0 1.1 1.3 1.3 1.3 49 Morocco .6 .6 .6 .7 .6 .5 .7 .7 .7 .7 .8 50 Zaire .2 .2 .2 .2 .2 .2 .2 .2 .2 .2 .1 51 Other Africa4 1.4 1.7 2.1 2.1 2.2 2.1 2.2 2.3 2.3 2.3 2.3 52 Eastern Europe 6.9 7.3 7.3 7.4 7.7 7.7 7.7 7.8 7.2 6.7 6.4 53 U.S.S.R 1.3 .7 .5 .4 .4 .5 .4 .6 .4 .4 .3 54 Yugoslavia 1.5 1.8 2.1 2.3 2.4 2.5 2.5 2.5 2.5 2.4 2.2 55 Other 4.1 4.8 4.7 4.6 4.8 4.8 4.7 4.7 4.3 3.9 3.8 56 Oflfshore banking centers 31.0 40.4 44.6 47.0 53.7 59.3 61.7 63.5 65.0 70.3 69.6 57 Bahamas 10.4 13.7 13.2 13.7 15.5 17.9 21.3 18.9 19.8 23.1 20.2 58 Bermuda .7 .8 .6 .6 .7 .7 .8 .7 .7 .7 .8 59 Cayman Islands and other British West Indies 7.4 9.4 10.1 10.6 11.9 12.6 12.1 12.4 11.8 12.0 13.0 60 Netherlands Antilles .8 1.2 1.3 2.1 2.3 2.4 2.2 3.2 3.2 3.0 3.3 61 Panama5 3.0 4.3 5.6 5.4 6.5 6.9 6.7 7.6 7.1 7.3 7.7 62 Lebanon .1 .2 .2 .2 .2 .2 .2 .2 .2 .2 .1 63 Hong Kong 4.2 6.0 7.5 8.1 8.4 10.3 10.3 11.8 12.9 14.3 14.9 64 Singapore 3.9 4.5 5.6 5.9 7.3 8.1 8.0 8.7 9.3 9.7 9.6 65 Others6 .5 .4 .4 .3 .9 .3 .1 .1 .1 .1 .0 66 Miscellaneous and unallocated7 9.1 11.7 13.7 14.0 14.9 15.7 18.2 18.8 18.3 18.3 19.9 1. The banking offices covered by these data are the U.S. offices and foreign include only banks' own claims payable in dollars. For earlier dates the claims of branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. the U.S. offices also include customer claims and foreign currency claims Offices not covered include (1) U.S. agencies and branches of foreign banks, and (amounting in June 1978 to $10 billion). (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 3. In addition to the Organization of Petroleum Exporting Countries shown adjusted to exclude the claims on foreign branches held by a U.S. office or another individually, this group includes other members of OPEC (Algeria, Gabon, Iran, foreign branch of the same banking institution. The data in this table combine Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims well as Bahrain and Oman (not formally members of OPEC). of U.S. offices in table 3.18 (excluding those held by agencies and branches of 4. Excludes Liberia. foreign banks and those constituting claims on own foreign branches). However, 5. Includes Canal Zone beginning December 1979. see also footnote 2. 6. Foreign branch claims only. 2. Beginning with data for June 1978, the claims of the U.S. offices in this table 7. Includes New Zealand, Liberia, and international regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • February 1983 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States' Millions of dollars, end of period 1981 1982 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997799 11998800 11998811 Dec. Mar. June Sept.? 1 Total 17,418 22,212 22,460 22,460 22,366 20,843 21,269 2 Payable in dollars 14,323 18,481 18,749 18,749 19,605 18,102 18,378 3 Payable in foreign currencies 3,095 3,731 3,711 3,711 2,761 2,740 2,892 By type 4 Financial liabilities 7,507 11,316 12,103 12,103 12,585 10,017 10,537 5 Payable in dollars 5,223 8,528 9,444 9,444 10,622 8,056 8,456 6 Payable in foreign currencies 2,284 2,788 2,660 2,660 1,963 1,961 2,081 7 Commercial liabilities 9,910 10,896 10,357 10,357 9,782 10,826 10,732 8 Trade payables 4,591 4,993 4,720 4,720 4,022 4,967 4,526 9 Advance receipts and other liabilities 5,320 5,903 5,637 5,637 5,760 5,859 6,206 10 Payable in dollars 9,100 9,953 9,305 9,305 8,983 10,047 9,921 11 Payable in foreign currencies 811 943 1,052 1,052 798 779 811 By area or country Financial liabilities 12 Europe 4,649 6,467 6,808 6,808 7,874 5,947 6,407 13 Belgium-Luxembourg 322 465 460 460 596 518 494 14 France 175 327 709 709 924 581 664 15 Germany 497 582 491 491 503 439 446 16 Netherlands 829 681 748 748 755 517 763 17 Switzerland 170 354 715 715 707 661 670 18 United Kingdom 2,477 3,923 3,559 3,559 4,282 3,084 3,240 19 Canada 532 964 958 958 914 758 702 20 Latin America and Caribbean 1,514 3,136 3,353 3,353 3,327 2,794 2,782 21 Bahamas 404 964 1,279 1,279 1,095 1,003 933 22 Bermuda 81 1 7 7 6 7 14 23 Brazil 18 23 22 22 27 24 28 24 British West Indies 516 1,452 1,241 1,241 1,469 1,044 990 25 Mexico 121 99 102 102 67 83 85 26 Venezuela 72 81 98 98 97 100 104 27 804 723 957 957 455 502 631 28 Japan 726 644 792 792 293 340 424 29 Middle East oil-exporting countries2 31 38 75 75 63 66 67 30 Africa 4 11 3 3 2 3 3 31 Oil-exporting countries3 1 1 0 0 0 0 0 32 All other4 4 15 24 24 12 11 13 Commercial liabilities 33 Europe 3,709 4,402 3,771 3,771 3,422 3,661 3,862 34 Belgium-Luxembourg 137 90 71 71 50 47 50 35 France 467 582 573 573 504 657 759 36 Germany 545 679 545 545 473 457 431 37 Netherlands 227 219 221 221 232 247 281 38 Switzerland 316 499 424 424 400 412 358 39 United Kingdom 1,080 1,209 880 880 824 849 904 40 Canada 924 888 897 897 884 1,116 1,188 41 Latin America and Caribbean 1,325 1,300 1,037 1,037 804 1,399 1,219 42 Bahamas 69 8 2 2 22 20 6 43 Bermuda 32 75 67 67 71 102 48 44 Brazil 203 111 67 67 83 62 128 45 British West Indies 21 35 2 2 27 1 3 46 Mexico 257 367 340 340 210 727 484 47 Venezuela 301 319 276 276 194 219 269 48 2,991 3,034 3,285 3,285 3,404 3,286 3,201 49 Japan 583 802 1,094 1,094 1,090 1,060 1,133 50 Middle East oil-exporting countries2 1,014 890 910 910 998 954 821 51 Africa 728 817 703 703 664 733 668 52 Oil-exporting countries3 384 517 344 344 247 340 248 53 All other4 233 456 664 664 604 630 595 1. For a description of the changes in the International Statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. July 1979 BULLETIN, p. 550. 4. Includes nonmonetary international and regional organizations. 2. 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

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 1981 1982 Type, and area or country 11997799 11998800 11998811 Dec. Mar. June Sept.? 1 Total 31,305 34,535 35,674 35,674 30,189 30,234 29,294 2 Payable in dollars 28,108 31,591 32,091 32,091 27,554 27,735 26,612 3 Payable in foreign currencies 3,197 2,944 3,584 3,584 2,635 2,500 2,682 By type 4 Financial claims 18,404 19,816 20,756 20,756 17,752 18,215 17,580 5 Deposits 12,852 14,180 14,657 14,657 12,656 13,428 12,498 6 Payable in dollars 11,936 13,405 14,043 14,043 12,199 13,054 12,096 7 Payable in foreign currencies 916 775 614 614 457 374 402 8 Other financial claims 5,552 5,636 6,098 6,098 5,0% 4,787 5,082 9 Payable in dollars 3,726 3,953 3,644 3,644 3,439 3,219 3,395 10 Payable in foreign currencies 1,826 1,683 2,454 2,454 1,657 1,568 1,687 11 Commercial claims 12,901 14,720 14,919 14,919 12,437 12,019 11,714 12 Trade receivables 12,185 13,960 13,954 13,954 11,477 10,960 10,709 13 Advance payments and other claims .. 716 759 965 965 960 1,058 1,005 14 Payable in dollars 12,447 14,233 14,403 14,403 11,917 11,461 11,121 15 Payable in foreign currencies 454 487 516 516 520 557 593 By area or country Financial claims 16 Europe 6,191 6,094 4,533 4,533 4,511 4,486 4,693 17 Belgium-Luxembourg 32 145 43 43 16 13 16 18 France 177 312 315 315 422 313 305 19 Germany 409 230 224 224 197 148 174 20 Netherlands 53 51 50 50 79 56 52 21 Switzerland 73 59 67 67 53 63 60 22 United Kingdom 5,111 4,982 3,505 3,505 3,502 3,620 3,714 23 Canada 4,997 5,064 6,624 6,624 4,931 4,395 4,318 24 Latin America and Caribbean 6,312 7,811 8,615 8,615 7,432 8,312 7,529 25 Bahamas 2,773 3,477 3,925 3,925 3,537 3,845 3,301 26 Bermuda 30 135 18 18 27 42 19 27 Brazil 163 96 30 30 49 76 76 28 British West Indies 2,011 2,755 3,503 3,503 2,797 3,504 3,136 29 Mexico 157 208 313 313 281 274 268 30 Venezuela 143 137 148 148 130 134 133 31 Asia 601 607 759 759 680 800 830 32 Japan 199 189 363 363 267 327 252 33 Middle East oil-exporting countries2. 16 20 37 37 36 33 30 34 Africa 258 208 173 173 164 156 165 35 Oil-exporting countries3 49 26 46 46 43 41 50 36 All other4 44 32 51 51 34 66 44 Commercial claims 4,922 5,544 5,359 5,359 4,381 4,241 4,164 37 Europe 202 233 234 234 246 209 178 38 Belgium-Luxembourg 727 1,129 776 776 698 634 646 39 France 593 599 557 557 452 391 408 40 Germany 298 318 303 303 227 296 277 41 Netherlands 272 354 427 427 354 383 258 42 Switzerland 901 929 969 969 1,062 893 1,036 43 United Kingdom 44 Canada 859 914 967 967 943 707 665 45 Latin America and Caribbean 2,879 3,766 3,468 3,468 2,907 2,763 2,772 46 Bahamas 21 21 12 12 80 30 19 47 Bermuda 197 108 223 223 212 226 154 48 Brazil 645 861 668 668 417 419 481 49 British West Indies 16 34 12 12 23 14 7 50 Mexico 708 1,102 1,022 1,022 762 748 869 51 Venezuela 343 410 424 424 396 381 373 52 Asia 3,451 3,522 3,914 3,914 3,155 3,297 3,027 53 Japan 1,177 1,052 1,244 1,244 1,160 1,211 866 54 Middle East oil-exporting countries2. 765 825 901 901 757 793 775 55 Africa 551 653 750 750 587 597 638 56 Oil-exporting countries3 130 153 152 152 143 132 148 57 All other4 240 321 461 461 463 413 448 1. For a description of the changes in the International Statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. July 1979 BULLETIN, p. 550. 4. Includes nonmonetary international and regional organizations. 2. 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

A66 International Statistics • February 1983 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1982 1982 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998800rr 11998811'' Jan.- Dec. June' July' Aug. Sept. Oct. Nov. Dec.'' U.S. corporate securities STOCKS 1 Foreign purchases 40,298 40,686 41,845 2,166 2,708 3,183 4,292 5,967 5,581 5,783 2 Foreign sales 34,870 34,856 37,950 1,864 2,697 2,650 4,399 5,675 5,245 4,868 3 Net purchases, or sales (-) 5,427 5,830 3,895 302 11 532 -107 292 336 915 4 Foreign countries 5,409 5,803 3,810 298 5 530 -110 282 325 890 5 Europe 3,116 3,662 2,540 158 302 272 -268 175 69 616 6 France 492 900 -143 -25 0 -7 -43 -30 -8 43 7 Germany 169 -22 333 11 20 -12 -43 47 26 138 8 Netherlands -328 42 -60 23 0 12 -62 -102 -24 25 9 Switzerland 310 288 -529 -85 -34 -53 -144 -118 -208 226 10 United Kingdom 2,528 2,235 3,073 225 309 366 73 435 317 186 11 Canada 887 783 222 1 -36 73 115 5 72 154 12 Latin America and Caribbean 148 -30 304 25 -69 121 -82 142 54 39 13 Middle East1 1,206 1,140 368 73 -137 101 134 -98 9 -153 14 Other Asia 16 287 244 39 -57 -43 -16 22 112 210 15 Africa -1 7 2 -3 1 1 0 0 2 3 16 Other countries 38 -46 131 6 0 5 6 35 7 22 17 Nonmonetary international and regional organizations 18 27 85 4 6 2 3 10 11 25 BONDS2 18 Foreign purchases 15,425 17,290 21,429 1,483 1,743 1,513 2,088 2,778 2,099 2,097 19 Foreign sales 9,964 12,247 20,340 1,153 1,634 1,760 2,230 2,939 2,280 2,457 20 Net purchases, or sales (—) 5,461 5,043 1,089 330 109 -247 -142 -162 -181 -360 21 Foreign countries 5,526 4,976 1,116 356 74 -111 -106 -202 -190 -350 22 Europe 1,576 1,356 1,734 244 189 -27 -279 429 -236 -160 23 France 129 11 296 23 5 -18 25 -16 24 146 24 Germany 212 848 2,122 115 258 106 86 190 11 43 25 Netherlands -65 70 29 5 -3 0 -10 -2 -4 -1 26 Switzerland 54 108 161 12 -22 32 -24 -4 -13 44 27 United Kingdom 1,257 181 -1,087 67 -63 -109 -380 240 -327 -463 28 Canada 135 -12 25 21 1 4 2 -152 10 -2 29 Latin America and Caribbean 185 132 160 61 18 18 19 -15 28 -6 30 Middle East1 3,499 3,465 -769 22 -68 -78 193 -435 -20 -177 31 Other Asia 117 44 -23 9 -66 -31 -47 -30 28 -5 32 Africa 5 -1 -19 0 0 0 0 0 0 0 33 Other countries 10 -7 7 -1 0 2 5 0 0 -1 34 Nonmonetary international and regional organizations -65 66 -28 -26 35 -136 -36 41 10 -10 Foreign securities 35 Stocks, net purchases, or sales (-) -2,148 -188 -1,334 69 44 11 -160 -308 -740 -272 36 Foreign purchases 7,897 9,281 7,151 619 452 532 545 706' 772 927 37 Foreign sales 10,044 9,469 8,485 550 409 520 705 1,014' 1,512 1,199 38 Bonds, net purchases, or sales (-) -1,001 -5,449 -6,613 -796 -698 -1,353 -1,157 -1,331' -463 -420 39 Foreign purchases 17,090 17,553 29,956 2,033 2,293 3,279 3,064 3,058' 2,948 2,959 40 Foreign sales 18,090 23,003 36,569 2,830 2,991 4,632 4,222 4,389' 3,411 3,379 41 Net purchases, or sales (-), of stocks and bonds -3,148 -5,637 -7,947 -727 -655 -1,342 -1,317 -1,639' -1,204 -692 42 Foreign countries -4,025 -4,625 -6,759 -349 -662 -1,144 -810 -1,247' -1,173 -739 43 Europe -1,113 -707 -2,489 -430 -26 -128 -271 -517' -572 -555 44 Canada -1,949 -3,697 -2,379 -115 -344 -678 -299 -181 -12 -32 45 Latin America and Caribbean 87 69 336 76 3 49 -65 -268 -62 29 46 -1,153 -322 -1,853 122 -303 -433 241 -283' -536 -195 47 Africa 24 -55 -9 0 3 17 1 0 4 4 48 Other countries 78 87 -364 -2 6 29 -416 3 5 1100 49 Nonmonetary international and regional organizations 876 -1,012 -1,188 -379 7 -198 -507 -392 -31 47 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, 2. Includes state and local government securities, and securities of U.S. Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). government 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 1982 CCoouunnttrryy oorr aarreeaa 11998800 11998811 Jan.- June July Aug. Sept. Oct. Nov. Dec.P Dec. Holdings (end of period)1 1 Estimated total2 57,549 70,201 78,204' 79,873' 80,694' 82,345' 84,047' 84,844 85,358 2 Foreign countries2 52,961 64,530 73,01c 75,348' 76,722' 78,339' 79,132' 79,402 80,558 3 Europe2 24,468 23,976 25,743' 26,447' 27,722' 28,805' 29,023' 29,388 29,227 4 Belgium-Luxembourg 77 543 152 155 576 551 834 448 440 5 Germany2 12,327 11,861 13,022 13,535 13,959 14,520 14,493 14,704 14,841 6 Netherlands 1,884 1,955 2,176 2,137 2,302 2,333 2,315 2,420 2,702 7 Sweden 595 643 652 650 644 635 655' 687 678 8 Switzerland2 1,485 846 1,039 1,016 1,100 1,233 1,266 1,532 1,540 9 United Kingdom 7,323 6,709 6,679' 6,927' 7,129' 7,362' 7,242' 7,104 6,554 10 Other Western Europe 777 1,419 2,023 2,028 2,012 2,171 2,218 2,493 2,473 11 Eastern Europe 0 0 0 0 0 0 0 0 0 12 Canada 449 514 410 446 353 428 482 552 602 13 Latin America and Caribbean 999 736 910 848 1,166 1,204 1,086 1,231 1,076 14 Venezuela 292 286 253 229 222 221 204 172 188 15 Other Latin America and Caribbean 285 319 432 402 611 771 657 759 656 16 Netherlands Antilles 421 131 224 217 333 211 225 300 232 17 Asia 26,112 38,671 45,516 47,179 47,165 47,682 48,302' 48,093 49,521 18 Japan 9,479 10,780 11,137 11,289 11,247 11,395 11,381 11,299 11,568 19 Africa 919 631 405 405 305 180 180 78 78 20 All other 14 2 26 23 12 41 60 61 54 21 Nonmonetary international and regional organizations 4,588 5,671 5,194 4,525' 3,972' 4,006' 4,915' 5,442 4,800 22 International 4,548 5,638' 5,123 4,419' 3,882' 3,811' 4,670' 5,192 4,439 23 Latin American regional 36 1 -4 -4 -4 -4 -4 -4 6 Transactions (net purchases, or sales ( -) during period) 24 Total2 6,066 12,652 15,157 362 1,669' 822 1,651' 1,703' 797 514 25 Foreign countries2 6,906 11,568 16,028 54 2,338 1,374 1,618 792' 270 1,156 26 Official institutions 3,865 11,694 14,528 318 2,792 367 1,525 641' 220 1,878 27 Other foreign2 3,040 -127 1,499 -264 -454 1,007 93 152 51 -722 28 Nonmonetary international and regional organizations -843 1,085 -870 309 -669' -553 33' 910 526 -642 MEMO: Oil-exporting countries 29 Middle East3 7,672 11,156 7,537 924 1,313 257 176 209' -320 303 30 Africa4 327 -289 -552 0 0 -100 -125 0 -100 0 1. Estimated official and private holdings of marketable U.S. Treasury securi- 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to ties 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 United Arab Emirates (Trucial States). foreign countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Jan. 31, 1983 Rate on Jan. 31, 1983 Rate on Jan. 31, 1983 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.75 Dec. 1982 France1 12.38 Jan. 1983 Norway 9.0 Nov. 1979 Belgium . 11.5 Nov. 1982 Germany, Fed. Rep. of 5.0 Dec. 1982 Switzerland 4.5 Dec. 1982 Brazil... 49.0 Mar. 1981 Italy 18.0 Aug. 1981 United Kingdom2. Canada.. 9.83 Jan. 1983 Japan 5.5 Dec. 1981 Venezuela Sept. 1982 Denmark 10.0 Nov. 1980 Netherlands 4.5 Jan. 1983 1. As of the end of February 1981, the rate is that at which the Bank of France or makes advances against eligible commercial paper and/or government commerdiscounts Treasury bills for 7 to 10 days. cial banks or brokers. For countries with more than one rate applicable to such 2. Minimum lending rate suspended as of Aug. 20, 1981. discounts or advances, the rate shown is the one at which it is understood the central bank transacts the largest proportion of its credit operations. NOTE. Rates shown are mainly those at which the central bank either discounts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • February 1983 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1982 1983 CCoouunnttrryy,, oorr ttyyppee 11998800 11998811 11998822 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Eurodollars 14.00 16.79 12.24 14.37 11.57 11.74 10.43 9.77 9.47 8.97 2 United Kingdom 16.59 13.86 12.21 12.35 11.08 10.84 9.74 9.30 10.55 11.04 3 Canada 13.12 18.84 14.38 16.23 14.76 13.57 12.14 11.08 10.56 9.87 4 Germany 9.45 12.05 8.81 9.41 8.94 8.13 7.55 7.24 6.54 5.78 5 Switzerland 5.79 9.15 5.04 4.32 4.07 3.97 3.66 3.76 3.71 2.78 6 Netherlands 10.60 11.52 8.26 8.95 8.66 7.85 7.09 6.36 5.66 4.97 7 France 12.18 15.28 14.61 14.64 14.43 14.09 13.51 12.98 12.70 12.55 8 Italy 17.50 19.98 19.99 20.18 19.52 18.56 18.57 19.05 19.20 18.95 9 Belgium 14.06 15.28 14.10 15.22 14.00 13.06 12.75 12.50 12.25 12.25 10 Japan 11.45 7.58 6.84 7.15 7.14 7.19 6.97 6.98 6.96 6.47 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 1982 1983 CCoouunnttrryy//ccuurrrreennccyy 11998800 11998811 11998822 Aug. Sept. Oct. Nov. Dec. Jan. 1 Argentina/peso n.a. n.a. 20985.00 21172.73 25961.90 29487.50 39200.00 43883.91 48916.66 2 Australia/dollar1 114.00 114.95 101.65 97.83 95.820 94.35 94.27 96.82 98.26 3 Austria/schilling 12.945 15.948 17.060 17.431 17.597 17.797 17.947 16.994 16.783 4 Belgium/franc 29.237 37.194 45.780 47.483 48.300 49.103 49.600 47.493 46.888 5 Brazil/cruzeiro n.a. 92.374 179.22 188.25 201.73 215.34 228.51 244.63 262.30 6 Canada/dollar 1.1693 1.1990 1.2344 1.2452 1.2348 1.2301 1.2262 1.2385 1.2287 7 Chile/peso n.a. n.a. 51.118 54.941 62.643 66.770 69.050 72.630 74.257 8 China, P.R./yuan n.a. 1.7031 1.8978 1.9432 1.9567 1.9887 2.0002 1.9445 1.9238 9 Colombia/peso n.a. n.a. 64.071 65.179 65.921 66.856 68.168 69.526 70.762 10 Denmark/krone 5.6345 7.1350 8.3443 8.6482 8.8038 8.9192 8.9595 8.5275 8.4171 11 Finland/markka 3.7206 4.3128 4.8086 4.7515 4.8014 5.3480 5.5263 5.3425 5.3120 12 France/franc 4.2250 5.4396 6.5793 6.9285 7.0649 7.1557 7.2152 6.8548 6.7725 13 Germany/deutsche mark 1.8175 2.2631 2.428 2.4813 2.5055 2.5320 2.5543 2.4193 2.3893 14 Greece/drachma n.a. n.a. 66.872 70.165 70.946 71.948 72.889 70.788 80.761 15 Hong Kong/dollar n.a. 5.5678 6.0697 6.0598 6.1253 6.6038 6.6724 6.5417 6.5252 16 India/rupee 7.8866 8.6807 9.4846 9.5741 9.6495 9.7005 9.7968 9.6926 9.7938 17 Indonesia/rupiah n.a. n.a. 660.43 662.11 662.75 670.31 680.92 687.95 694.62 18 Iran/rial n.a. 79.324 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19 Ireland/pound' 205.77 161.32 142.05 138.54 136.53 134.35 132.91 137.69 139.16 20 Israel/shekel n.a. n.a. 24.407 26.940 28.922 29.860 31.344 32.966 34.863 21 Italy/lira 856.20 1138.60 1354.00 1392.60 1411.19 1439.94 1468.84 1398.74 1374.71 22 Japan/yen 226.63 220.63 249.06 259.04 263.29 271.61 264.09 241.94 232.73 23 Malaysia/ringgit 2.1767 2.3048 2.3395 2.3528 2.3610 2.3688 2.3647 2.3529 2.2822 24 Mexico/peso 22.968 24.547 72.990 90.187 101.86 108.83 130.61 147.35 150.75 25 Netherlands/guilder 1.9875 2.4998 2.6719 2.7295 2.7444 2.7608 2.7861 2.6698 2.6310 26 New Zealand/dollar1 97.34 86.848 75.101 73.217 72.419 71.431 71.092 72.569 72.921 27 Norway/krone 4.9381 5.7430 6.4567 6.6785 6.8999 7.1735 7.2397 7.0346 7.0447 28 Peru/sol n.a. n.a. 694.59 730.97 772.08 819.14 878.66 942.47 1019.54 29 Philippines/peso n.a. 7.8113 8.5324 8.5142 8.6521 8.7760 8.8733 9.0546 9.2632 30 Portugal/escudo 50.082 61.739 80.101 85.914 87.702 89.652 91.911 92.685 94.548 31 Singapore/dollar n.a. 2.1053 2.1406 2.1594 2.1671 2.1984 2.2123 2.1522 2.0768 32 South Africa/rand1 128.54 114.77 92.297 86.77 86.830 86.20 87.77 92.03 93.82 33 South Korea/won n.a. n.a. 731.93 744.45 743.61 743.65 745.60 746.36 749.80 34 Spain/peseta 71.758 92.396 110.09 112.079 113.049 115.20 119.09 126.125 126.844 35 Sri Lanka/rupee 16.167 18.967 20.756 20.895 20.918 20.898 21.009 21.166 21.378 36 Sweden/krona 4.2309 5.0659 6.2838 6.1441 6.2313 7.1543 7.5095 7.3555 7.3227 37 Switzerland/franc 1.6772 1.9674 2.0327 2.1119 2.1418 2.1736 2.1931 2.0588 1.9679 38 Thailand/baht n.a. 21.731 23.014 23.000 23.000 23.000 23.000 23.000 23.000 39 United Kingdom/pound1 232.58 202.43 174.80 172.50 171.20 169.62 163.21 161.60 157.56 40 Venezuela/bolivar n.a. 4.2781 4.2981 4.2981 4.3006 4.2976 4.2996 4.2971 4.2973 MEMO: United States/dollar2 87.39 102.94 116.57 119.63 120.93 123.16 124.27 119.22 117.73 1. Value in U.S. cents. description and back data, see "Index of the Weighted-Average Exchange Value 2. Index of weighted-average exchange value of U.S. dollar against currencies of the U.S. Dollar: Revision" on page 700 of the August 1978 BULLETIN. of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 global trade of each of the 10 countries. Series revised as of August 1978. For NOTE. Averages of certified noon buying rates in New York for cable tranfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 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 IPCs Individuals, partnerships, and corporations about half of the 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 December 1982 A76 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Commercial bank assets and liabilities, December 31, 1981 April 1982 A72 Commercial bank assets and liabilities, March 31, 1982 July 1982 A70 Commercial bank assets and liabilities, June 30, 1982 October 1982 A70 Commercial bank assets and liabilities, September 30, 1982 January 1983 A70 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1981 April 1982 A78 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1982 July 1982 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1982 October 1982 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1982 January 1983 A76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH PRESTON MARTIN, Vice Chairman J. CHARLES PARTEE OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY AND FINANCIAL POLICY JOSEPH R. COYNE, Assistant to the Board DONALD J. WINN, Assistant to the Board STEPHEN H. AXILROD, Staff Director FRANK O'BRIEN, JR., Deputy Assistant to the Board EDWARD C. ETTIN, Deputy Staff Director ANTHONY F. COLE, Special Assistant to the Board MURRAY ALTMANN, Assistant to the Board WILLIAM R. JONES, Special Assistant to the Board STANLEY J. SIGEL, Assistant to the Board WILLIAM R. MALONI, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board NAOMI P. SALUS, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director MICHAEL BRADFIELD, General Counsel JOSEPH S. ZEISEL, Deputy Director J. VIRGIL MATTINGLY, JR., Associate General Counsel MICHAEL J. PRELL, Senior Associate Director GILBERT T. SCHWARTZ, Associate General Counsel JARED J. ENZLER, Associate Director RICHARD M. ASHTON, Assistant General Counsel DONALD L. KOHN, Associate Director NANCY P. JACKLIN, Assistant General Counsel ELEANOR J. STOCKWELL, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel DAVID E. LINDSEY, Deputy Associate Director FREDERICK M. STRUBLE, Deputy Associate Director HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director OFFICE OF THE SECRETARY JOE M. CLEAVER, Assistant Director ROBERT M. FISHER, Assistant Director WILLIAM W. WILES, Secretary SUSAN J. LEPPER, Assistant Director BARBARA R. LOWREY, Associate Secretary THOMAS D. SIMPSON, Assistant Director JAMES MCAFEE, Associate Secretary LAWRENCE SLIFMAN, Assistant Director STEPHEN P. TAYLOR, Assistant Director PETER A. TINSLEY, Assistant Director DIVISION OF CONSUMER LEVON H. GARABEDIAN, Assistant Director (Administration) AND COMMUNITY AFFAIRS DIVISION OF INTERNATIONAL FINANCE GRIFFITH L. GARWOOD, Director JERAULD C. KLUCKMAN, Associate Director GLENN E. LONEY, Assistant Director EDWIN M. TRUMAN, Director ROBERT F. GEMMILL, Senior Associate Director DOLORES S. SMITH, Assistant Director CHARLES J. SIEGMAN, Senior Associate Director LARRY J. PROMISEL, Associate Director DALE W. HENDERSON, Deputy Associate Director DIVISION OF BANKING SAMUEL PIZER, Staff Adviser SUPERVISION AND REGULATION MICHAEL P. DOOLEY, Assistant Director RALPH W. SMITH, JR., Assistant Director JOHN E. RYAN, Director WILLIAM TAYLOR, Deputy Director FREDERICK R. DAHL, Associate Director DON E. KLINE, Associate Director JACK M. EGERTSON, Assistant Director ROBERT A. JACOBSEN, Assistant Director ROBERT S. PLOTKIN, Assistant Director THOMAS A. SIDMAN, Assistant Director SIDNEY M. SUSSAN, 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

A71 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 EDWARD T. MULRENIN, Assistant Staff Director THEODORE E. ALLISON, 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 CHARLES L. HAMPTON, Director LORIN S. MEEDER, Associate Director BRUCE M. BEARDSLEY, Deputy Director DAVID L. ROBINSON, Associate Director GLENN L. CUMMINS, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director NEAL H. HILLERMAN, Assistant Director WALTER ALTHAUSEN, Assistant Director ELIZABETH A. JOHNSON, Assistant Director CHARLES W. BENNETT, Assistant Director WILLIAM C. SCHNEIDER, JR., Assistant Director ANNE M. DEBEER, Assistant Director ROBERT J. ZEMEL, Assistant Director JACK DENNIS, JR., Assistant Director RICHARD B. GREEN, Assistant Director EARL G. HAMILTON, Assistant Director DIVISION OF PERSONNEL ELLIOTT C. MCENTEE, Assistant Director DAVID L. SHANNON, Director JOHN R. WEIS, Assistant Director CHARLES W. WOOD, Assistant Director OFFICE OF THE CONTROLLER GEORGE E. LIVINGSTON, Controller DIVISION OF SUPPORT SERVICES DONALD E. ANDERSON, Director ROBERT E. FRAZIER, Associate Director WALTER W. KREIMANN, Associate Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • February 1983 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman ANTHONY M. SOLOMON, Vice Chairman JOHN J. BALLES LYLE E. GRAMLEY J. CHARLES PARTEE ROBERT P. BLACK KAREN N. HORN EMMETT J. RICE WILLIAM F. FORD PRESTON MARTIN NANCY H. TEETERS HENRY C. WALLICH STEPHEN H. AXILROD, Staff Director EDWARD C. ETTIN, Associate Economist MURRAY ALTMANN, Secretary MICHAEL W. KERAN, Associate Economist NORMAND R. V. BERNARD, Assistant Secretary DONALD L. KOCH, Associate Economist NANCY M. STEELE, Deputy Assistant Secretary JAMES PARTHEMOS, Associate Economist MICHAEL BRADFIELD, General Counsel MICHAEL J. PRELL, Associate Economist JAMES H. OLTMAN, Deputy General Counsel CHARLES J. SIEGMAN, Associate Economist JAMES L. KICHLINE, Economist EDWIN M. TRUMAN, Associate Economist JOHN M. DAVIS, Associate Economist JOSEPH S. ZEISEL, Associate Economist RICHARD G. DAVIS, 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 RONALD TERRY, Eighth District, President WILLIAM S. EDGERLY, First District, Vice President LEWIS T. PRESTON, Second District ROGER E. ANDERSON, Seventh District JOHN H. WALTHER, Third District E. PETER GILLETTE, JR., Ninth District JOHN G. MCCOY, Fourth District N. BERNE HART, Tenth District VINCENT C. BURKE, JR., Fifth District T. C. FROST, JR., Eleventh District PHILIP F. SEARLE, Sixth District JOSEPH J. PINOLA, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary CONSUMER ADVISORY COUNCIL SUSAN PIERSON DE WITT, Springfield, Illinois, Chairman WILLIAM J. O'CONNOR, Buffalo, New York, Vice Chairman ARTHUR F. BOUTON, Little Rock, Arkansas KENNETH V. LARKIN, San Francisco, California JAMES G. BOYLE, Austin, Texas TIMOTHY D. MARRINAN, Minneapolis, Minnesota GERALD R. CHRISTENSEN, Salt Lake City, Utah STANLEY L. MULARZ, Chicago, Illinois THOMAS L. CLARK, New York, New York WILLARD P. OGBURN, Boston, Massachusetts JEAN A. CROCKETT, Philadelphia, Pennsylvania ELVA QUIJANO, San Antonio, Texas JOSEPH N. CUGINI, Westerly, Rhode Island JANET J. RATHE, Portland, Oregon MEREDITH FERNSTROM, New York, New York JANET M. SCACCIOTTI, Providence, Rhode Island ALLEN J. FISHBEIN, Washington, D.C. GLENDA G. SLOANE, Washington, D.C. E. C. A. FORSBERG, SR., Atlanta, Georgia HENRY J. SOMMER, Philadelphia, Pennsylvania LUTHER R. GATLING, New York, New York NANCY Z. SPILLMAN, LOS Angeles, California RICHARD F. HALLIBURTON, Kansas City, Missouri WINNIE F. TAYLOR, Gainesville, Florida CHARLES C. HOLT, Austin, Texas MICHAEL M. VAN BUSKIRK, Columbus, Ohio GEORGE S. IRVIN, Denver, Colorado CLINTON WARNE, Cleveland, Ohio HARRY N. JACKSON, Minneapolis, Minnesota FREDERICK T. WEIMER, Chicago, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 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 John Brademas Anthony M. Solomon Gertrude G. Michelson Thomas M. Timlen Buffalo 14240 M. Jane Dickman John T. Keane PHILADELPHIA 19105 Robert M. Landis, Esq. Edward G. Boehne Nevius M. Curtis Richard L. Smoot CLEVELAND* 44101 J.L. Jackson Karen N. Horn William H. Knoell William H. Hendricks Cincinnati 45201 Clifford R. Meyer Robert E. Showalter Pittsburgh 15230 Milton G. Hulme, Jr. Harold J. Swart RICHMOND* 23219 Steven Muller Robert P. Black William S. Lee, III Jimmie R. Monhollon Baltimore 21203 Edward H. Covell Robert D. McTeer, Jr. Charlotte 28230 Dr. Henry Ponder 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 35283 Samuel R. Hill, Jr. Hiram J. Honea Jacksonville 32231 Joan W. Stein Charles D. East Miami 33152 Eugene E. Cohen Patrick K. Barron Nashville 37203 Robert C.H. Mathews, Jr. Jeffrey J. Wells New Orleans 70161 Roosevelt Steptoe 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 W.L. Hadley Griffin Theodore H. Roberts Mary P. Holt Donald W. Moriarty, Jr. Little Rock 72203 Richard V. Warner John F. Breen Louisville 40232 William C. Ballard, Jr. Donald L. Henry Memphis 38101 G. Rives Neblett Randall C. Sumner MINNEAPOLIS 55480 William G. Phillips E. Gerald Corrigan John B. Davis, Jr. Thomas E. Gainor Helena 59601 Jean J. Etchart Robert F. McNellis KANSAS CITY 64198 Paul H. Henson Roger Guffey Doris M. Drury Henry R. Czerwinski Denver 80217 James E. Nielson Wayne W. Martin Oklahoma City 73125 Christine H. Anthony William G. Evans Omaha 68102 Robert G. Lueder Robert D. Hamilton DALLAS 75222 Gerald D. Hines Robert H. Boykin John V. James William H. Wallace El Paso 79999 Chester J. Kesey Joel L. Koonce, Jr. Houston 77252 Paul N. Howell J.Z. Rowe San Antonio 78295 Carlos Zuniga 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 84125 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

A74 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. PART 2, 1971. 153 pp. and PART 3, 1973. 131 pp. TIONS. 1974. 125 pp. Each volume $1.00; 10 or more to one address, $.85 ANNUAL REPORT. each. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or OPEN MARKET POLICIES AND OPERATING PROCEDURES— $2.00 each in the United States, its possessions, Canada, STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to and Mexico; 10 or more of same issue to one address, one address, $1.75 each. $18.00 per year or $1.75 each. Elsewhere, $24.00 per REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHAyear or $2.50 each. NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint 1972. 220 pp. Each volume $3.00; 10 or more to one of Part I only) 1976. 682 pp. $5.00. address, $2.50 each. BANKING AND MONETARY STATISTICS, 1941-1970. 1976. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- 1,168 pp. $15.00. ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 ANNUAL STATISTICAL DIGEST pp. Cloth ed. $5.00 each; 10 or more to one address, 1971-75. 1976. 339 pp. $5.00 per copy. $4.50 each. Paper ed. $4.00 each; 10 or more to one 1972-76. 1977. 377 pp. $10.00 per copy. address, $3.60 each. 1973-77. 1978. 361 pp. $12.00 per copy. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE 1974-78. 1980. 305 pp. $10.00 per copy. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 1970-79. 1981. 587 pp. $20.00 per copy. pp. $4.00 each; 10 or more to one address, $3.60 each. 1980. 1981. 241 pp. $10.00 per copy. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1981. 1982. 239 pp. $6.50 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 COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to year or $.35 each. Elsewhere, $20.00 per year or $.50 one address, $2.25 each. each. IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. THE FEDERAL RESERVE ACT, as amended through December 1978. 170 pp. $4.00 each; 10 or more to one address, 1976, with an appendix containing provisions of certain $3.75 each. other statutes affecting the Federal Reserve System. 307 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. pp. $2.50. FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- each; 10 or more to one address, $1.50 each. ERAL RESERVE SYSTEM. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. 102 10 or more to one address, $1.25 each. pp. $1.00 each; 10 or more to one address, $.85 each. PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY $13.50 each. OF THE U.S. GOVERNMENT SECURITIES MARKET. 1969. NEW MONETARY CONTROL PROCEDURES: FEDERAL RE- 48 pp. $.25 each; 10 or more to one address, $.20 each. SERVE STAFF STUDY, 1981. JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOV- SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: ERNMENT SECURITIES MARKET; STAFF STUDIES—PART REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 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. 3 vols. (Contains all BELOW THE BOTTOM LINE: THE USE OF CONTINGENCIES three Handbooks plus substantial additional material.) AND COMMITMENTS BY COMMERCIAL BANKS, by Benja- $175.00 per year. min Wolkowitz and others. Jan. 1982. 186 pp. Rates for subscribers outside the United States are as MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON follows and include additional air mail costs: COMPETITION AND PERFORMANCE IN BANKING MAR- Federal Reserve Regulatory Service, $225.00 per year. KETS, by Timothy J. Curry and John T. Rose. Jan. 1982. Each Handbook, $75.00 per year. 9 pp. WELCOME TO THE FEDERAL RESERVE, December 1982. COSTS, SCALE ECONOMIES, COMPETITION, AND PRODUCT PROCESSING BANK HOLDING COMPANY AND MERGER APPLI- MIX IN THE U.S. PAYMENTS MECHANISM, by David B. CATIONS Humphrey. Apr. 1982. 18 pp. SUSTAINABLE RECOVERY: SETTING THE STAGE, November DIVISIA MONETARY AGGREGATES: COMPILATION, DATA, 1982. AND HISTORICAL BEHAVIOR, by William A. Barnett and REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT ANNUAL Paul A. Spindt. May 1982. 82 pp. HUMAN RELATIONS AWARD DINNER, December 1982. THE COMMUNITY REINVESTMENT ACT AND CREDIT ALLO- CATION, by Glenn Canner. June 1982. 8 pp. INTEREST RATES AND TERMS ON CONSTRUCTION LOANS AT COMMERCIAL BANKS, by David F. Seiders. July 1982. CONSUMER EDUCATION PAMPHLETS 14 pp. Short pamphlets suitable for classroom use. Multiple STRUCTURE-PERFORMANCE STUDIES IN BANKING: AN UPcopies available without charge. DATED SUMMARY AND EVALUATION, by Stephen A. Rhoades. Aug. 1982. 15 pp. Alice in Debitland FOREIGN SUBSIDIARIES OF U.S. BANKING ORGANIZATIONS, Consumer Handbook to Credit Protection Laws by James V. Houpt and Michael G. Martinson. Oct. The Equal Credit Opportunity Act and . . . Age 1982. 18 pp. The Equal Credit Opportunity Act and . . . Credit Rights in Housing REDLINING: RESEARCH AND FEDERAL LEGISLATIVE RE- SPONSE, by Glenn B. Canner. Oct. 1982. 20 pp. The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide Incidental Credit The Equal Credit Opportunity Act and . . . Women REPRINTS Fair Credit Billing Most of the articles reprinted do not exceed 12 pages. Federal Reserve Glossary 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 Survey of Finance Companies, 1980. 5/81. The Federal Open Market Committee Bank Lending in Developing Countries. 9/81. Federal Reserve Bank Board of Directors U.S. International Transactions in 1981. 4/82. Federal Reserve Banks The Commercial Paper Market since the Mid-Seventies. 6/82. Monetary Control Act of 1980 Applying the Theory of Probable Future Competition. 9/82. Organization and Advisory Committees International Banking Facilities. 10/82. 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

A76 Index to Statistical Tables References are to pages A3 through A68 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers, 11, 26, 28 Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, 21, 27 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 25 Banks, by classes, 18, 19-22 Turnover, 15 Domestic finance companies, 39 Depository institutions Federal Reserve Banks, 12 Reserve requirements, 8 Foreign banks, U.S. branches and agencies, 23 Reserves and related items, 3, 4, 5, 13 Nonfinancial corporations, 38 Deposits (See also specific types) Savings institutions, 30 Banks, by classes, 3, 18, 19-22, 30 Automobiles Federal Reserve Banks, 4, 12 Consumer installment credit, 42, 43 Turnover, 15 Production, 48, 49 Discount rates at Reserve Banks and at foreign central banks (See Interest rates) BANKERS balances, 18, 19-21 Discounts and advances by Reserve Banks (See (See also Foreigners) Loans) Banks for Cooperatives, 35 Dividends, corporate, 37 Bonds (See also U.S. government securities) New issues, 36 EMPLOYMENT, 46, 47 Rates, 3 Eurodollars, 28 Branch banks, 16, 22-23, 56 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, 11, 12, 13, 34 Federal credit agencies, 35 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation and types and Banks, by classes, 18 ownership of gross debt, 33 Federal Reserve Banks, 12 Receipts and outlays, 31, 32 Central banks, 67 Treasury financing of surplus, or deficit, 31 Certificates of deposit, 22, 28 Treasury operating balance, 31 Commercial and industrial loans Federal Financing Bank, 31, 35 Commercial banks, 16, 18, 23, 27 Federal funds, 3, 6, 19, 20, 21, 28, 31 Weekly reporting banks, 19-23, 24 Federal Home Loan Banks, 35 Commercial banks Federal Home Loan Mortgage Corporation, 35, 40, 41 Assets and liabilities, 18, 19-22 Federal Housing Administration, 35, 40, 41 Business loans, 27 Federal Intermediate Credit Banks, 35 Commercial and industrial loans, 16, 18, 23, 24, 27 Federal Land Banks, 35, 41 Consumer loans held, by type, 42, 43 Federal National Mortgage Association, 35, 40, 41 Loans sold outright, 22 Federal Reserve Banks Nondeposit funds, 17 Condition statement, 12 Number, by classes, 18 Discount rates (See Interest rates) Real estate mortgages held, by holder and property, 41 U.S. government securities held, 4, 12, 13, 33 Time and savings deposits, 3 Federal Reserve credit, 4, 5, 12, 13 Commercial paper, 3, 26, 28, 39 Federal Reserve notes, 12 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, 19, 20, 21, 42, 43 Corporations Paper, 26, 28 Profits and their distribution, 37 Financial institutions Security issues, 36, 66 Loans to, 19, 20, 21 Cost of living (See Consumer prices) Selected assets and liabilities, 30 Credit unions, 30, 42, 43 Float, 4 (See also Thrift institutions) Flow of funds, 44, 45 Currency and coin, 5, 18 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 14 agencies, 23 Customer credit, stock market, 29 Foreign currency operations, 12 Foreign deposits in U.S. banks, 4, 12, 19, 20, 21 DEBITS to deposit accounts, 15 Foreign exchange rates, 68 Debt (See specific types of debt or securities) Foreign trade, 55 Demand deposits Foreigners Adjusted, commercial banks, 15 Claims on, 56, 58, 61, 62, 63, 65 Banks, by classes, 18, 19-22 Liabilities to, 22, 55, 56-60, 64, 66, 67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All GOLD REAL estate loans Certificate account, 12 Banks, by classes, 19-21, 41 Stock, 4, 55 Rates, terms, yields, and activity, 3, 40 Government National Mortgage Association, 35, 40, 41 Savings institutions, 28 Gross national product, 52, 53 Type of holder and property mortgaged, 41 Repurchase agreements and federal funds, 6, 19, 20, 21 HOUSING, new and existing units, 50 Reserve requirements, 8 Reserves INCOME, personal and national, 46, 52, 53 Commercial banks, 18 Industrial production, 46, 48 Depository institutions, 3, 4, 5, 13 Installment loans, 42, 43 Federal Reserve Banks, 12 Insurance companies, 30, 33, 41 U.S. reserve assets, 55 Interbank loans and deposits, 18 Residential mortgage loans, 40 Interest rates Retail credit and retail sales, 42, 43, 46 Bonds, 3 Business loans of banks, 27 SAVING Federal Reserve Banks, 3, 7 Flow of funds, 44, 45 Foreign central banks and foreign countries, 67 National income accounts, 53 Money and capital markets, 3, 28 Savings and loan associations, 9, 30, 41, 42, 43, 44 Mortgages, 3, 40 (See also Thrift institutions) Prime rate, commercial banks, 27 Savings deposits (See Time and savings deposits) Time and savings deposits, 9 Securities (See specific types) International banking facilities, 17 Federal and federally sponsored credit agencies, 35 International capital transactions of United States, 54-67 Foreign transactions, 66 International organizations, 58, 59-61, 64-67 New issues, 36 Inventories, 52 Prices, 29 Investment companies, issues and assets, 37 Special drawing rights, 4, 12, 54, 55 Investments (See also specific types) State and local governments Banks, by classes, 18, 30 Deposits, 19, 20, 21 Commercial banks, 3, 16, 18, 19-21 Holdings of U.S. government securities, 33 Federal Reserve Banks, 12, 13 New security issues, 36 Savings institutions, 30, 41 Ownership of securities issued by, 19, 20, 21, 30 Rates on securities, 3 LABOR force, 47 Stock market, 29 Life insurance companies (See Insurance companies) Stocks (See also Securities) Loans (See also specific types) New issues, 36 Banks, by classes, 18, 19-22 Prices, 29 Commercial banks, 3, 16, 18, 19-22, 23, 27 Federal Reserve Banks, 3, 4, 5, 7, 12, 13 Insured or guaranteed by United States, 40, 41 TAX receipts, federal, 32 Savings institutions, 30, 41 Thrift institutions, 3 (See also Credit unions, Mutual savings banks, and Savings and loan associations) MANUFACTURING Time and savings deposits, 3, 9, 15, 18, 19-22 Capacity utilization, 46 Trade, foreign, 55 Production, 46, 49 Margin requirements, 29 Treasury currency, Treasury cash, 4 Member banks (See also Depository institutions) Treasury deposits, 4, 12, 31 Federal funds and repurchase agreements, 6 Treasury operating balance, 31 Reserve requirements, 8 Mining production, 49 UNEMPLOYMENT, 47 Mobile home shipments, 50 U.S. government balances Monetary and credit aggregates, 3, 13 Commercial bank holdings, 19, 20, 21 Money and capital market rates (See Interest Treasury deposits at Reserve Banks, 4, 12, 31 rates) U.S. government securities Money stock measures and components, 3, 14 Bank holdings, 18, 19-21, 33 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 34 Mutual funds (See Investment companies) Federal Reserve Bank holdings, 4, 12, 13, 33 Mutual savings banks, 9, 19-21, 30, 33, 41, 42, 43 Foreign and international holdings and transactions, 12, (See also Thrift institutions) 33, 67 Open market transactions, 11 NATIONAL defense outlays, 32 Outstanding, by type and ownership, 33 National income, 52 Ownership of securities issued by, 30 Rates, 3, 28 OPEN market transactions, 11 U.S. international transactions, 54-67 Utilities, production, 49 PERSONAL income, 53 Prices VETERANS Administration, 40, 41 Consumer and producer, 46, 51 Stock market, 29 Prime rate, commercial banks, 27 WEEKLY reporting banks, 19-24 Producer prices, 46, 51 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

A78 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Isil^ Kansas City^ \ - -M ST Xm\MmepmKpSh is NaslM^a-< "^^UttleRock Birminghui^ ® ^ A lan Dallas® T" — 1© LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch * Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with exten- To promote public understanding of its regulatory sions of credit for the purchase of securities, together functions, the Board publishes the Federal Reserve with all related statutes, Board interpretations, rul- Regulatory Service, a three-volume looseleaf service ings, and staff opinions. Also included is the Board's containing all Board regulations and related statutes, list of OTC margin stocks. interpretations, policy statements, rulings, and staff The Consumer and Community Affairs Handbook opinions. For those with a more specialized interest in contains Regulations B, C, E, M, Z, AA, and BB and the Board's regulations, parts of this service are associated materials. published separately as handbooks pertaining to mon- For domestic subscribers, the annual rate is $175 for etary policy, securities credit, and consumer affairs. the Federal Reserve Regulatory Service and $60 for These publications are designed to help those who each handbook. For subscribers outside the United must frequently refer to the Board's regulatory materi- States, the price including additional air mail costs is als. They are updated at least monthly, and each $225 for the Service and $75 for each Handbook. All contains conversion tables, citation indexes, and a subscription requests must be accompanied by a check subject index. or money order payable to Board of Governors of the The Monetary Policy and Reserve Requirements Federal Reserve System. Orders should be addressed Handbook contains Regulations A, D, and Q plus to Publications Services, Federal Reserve Board, 20th related materials. For convenient reference, it also Street and Constitution Avenue, N.W., Washington, contains the rules of the Depository Institutions D.C. 20551. Deregulation Committee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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. LE45INO LE4SMG TRUTH MLE45ING What If Thithln You Lending Borrow Means To Buy To You Stock— The Equal Credit Opportunity Act and... WOMEN YOU USE A CREDIT CARD Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis