Federal Reserve Bulletin, 1983-06

VOLUME 69 • NUMBER 6 • JUNE 1983 FEDERAL RESERVE B U L L E T IN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost 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 395 DEVELOPMENTS IN CONSUMER Proposal to revise the Board's rules regard- ELECTRONIC FUND TRANSFERS ing loans by state member banks to certain insiders; proposal to update and revise Reg- All evidence points to a continuing rapid ulation Y. growth in the volume of consumer electronic fund transfers, and compliance costs for Admission of three state banks to membereach EFT transaction are likely to fall. ship in the Federal Reserve System. 404 FOREIGN EXCHANGE OPERATIONS.- INTERIM REPORT 421 RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE During the February-April period under review, the dollar generally held steady At its meeting on March 28-29, 1983, all of against most currencies. the members of the Committee found acceptable a policy calling for maintaining 409 INDUSTRIAL PRODUCTION generally the current degree of reserve restraint, pending the availability of further Output rose about 1.1 percent in May. evidence on the behavior of the monetary aggregates and on the economic situation. 411 ST A TEMENT TO CONGRESS The members anticipated that such a policy Preston Martin, Vice Chairman, Board of course would be consistent with substantial Governors, discusses the current employ- slowing in the growth of M2 and M3 to ment situation and says that with a respon- annual rates of about 9 percent and 8 persible fiscal policy to complement the mone- cent respectively over the period from tary policies now in place the recovery can March to June. The Committee expected prove to be a durable one, associated with that Ml growth at an annual rate of about 6 rising living standards and increased em- to 7 percent over the three-month period ployment, before the Subcommittee on Do- would be associated with its objectives for mestic Monetary Policy of the House Com- the broader aggregates. mittee on Banking, Finance and Urban The Committee members agreed that Affairs, June 1, 1983. lesser restraint on reserve positions would be acceptable in the context of more pro- 416 ANNOUNCEMENTS nounced slowing of growth in the monetary aggregates, relative to the paths implied by Nominations for upcoming vacancies on the the long-term ranges (taking account of the Consumer Advisory Council. distortions relating to the introduction of Amendments to Regulation K to authorize new deposit accounts), or indications of a investments in export trading companies. weakening in the pace of the economic recovery. It was understood that the inter- Revision of Regulation T. meeting range for the federal funds rate, Publication of a revised list of over-the- which provides a mechanism for initiating counter stocks that are subject to margin consultation of the Committee, would be retained at 6 to 10 percent. regulations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

429 LEGAL DEVELOPMENTS A70 BOARD OF GOVERNORS AND STAFF Revision of Regulation T; various bank A72 FEDERAL OPEN MARKET COMMITTEE holding company and bank merger orders; AND STAFF. ADVISORY COUNCILS and pending cases. A73 FEDERAL RESERVE BANKS, BRANCHES, Al FINANCIAL AND BUSINESS STATISTICS AND OFFICES A3 Domestic Financial Statistics A46 Domestic Nonfinancial Statistics ALA FEDERAL RESERVE BOARD A54 International Statistics PUBLICATIONS A69 GUIDE TO TABULAR PRESENTATION, A79 INDEX TO STATISTICAL TABLES STATISTICAL RELEASES, AND SPECIAL TABLES A8l MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in Consumer k Electronic Fund Transfers Frederick J. Schroeder of the Board's Division of achieve compliance with consumer EFT regula- Research and Statistics prepared this article. tion. Ever since the telegraph and telephone came into public use, commercial participants in the na- CONSUMER USE OF EFT tion's payment system have been able to use electronic communication to facilitate the trans- The extent to which electronic fund transfer fer of funds among themselves. In the public spreads depends primarily on three elements. sector, the Federal Reserve System has been The first—and the precondition—is the automaactively involved in electronic fund transfers tion of operations by financial institutions. The since 1918, when the first Morse code wire second is the extent to which institutions make transfer network was established for the move- EFT services available to consumers by providment of funds among reserve accounts of mem- ing accessible systems and promoting their use. ber banks at Federal Reserve Banks. The third is the willingness of consumers to Only recently, however, have individual con- accept the new means of payment. This factor sumers been able to order convenient and inex- will ultimately determine the growth of the elecpensive electronic payments to and from their tronic payments system. accounts at financial institutions. Rapid improve- Consumers have, in fact, quickly taken to ments in electronic data processing and the de- EFTs* and the use of them is likely to grow velopment of low-cost, high-speed telecommuni- dramatically, for two reasons (see the inset). The cations have made possible the widespread use first lies in the price of EFTs relative to alternaof electronic fund transfer (EFT) by consumers. tive means of payment, particularly checks. The In many transactions, EFT can now largely cost to the banking system of operating the displace other methods of payment, such as check-clearing mechanism was estimated to be cash, checks, and credit cards. Nonetheless, at about $0.50 per check in 1979. According to a this time consumer EFTs still collectively ac- 1981 Treasury-sponsored study of bank handling count for only a small portion—less than 1 per- of social security payments, checks deposited by cent—of all payments in the retail economy. mail had an average incremental processing cost With the technology of payments poised for of $0.59, while preauthorized direct deposits by further advances and with major changes coming EFT had an average incremental processing cost in the structure of the financial services industry of $0.07. Preauthorized electronic deposits and as new competitors enter and new rules take debits are the most automatic type of EFT and effect, further displacement of traditional paper- therefore the least costly to process; the costs of based payment methods by EFT is likely. All other types of EFT are greater and may vary evidence points to continuing rapid growth in the widely, depending on the size and efficiency of volume of consumer EFTs. the transfer systems involved. As institutions This article describes the extent to whicl move toward pricing checking services to reflect consumers use EFT, reviews the rationale foi costs, however, and as average EFT costs fall public regulation of EFT, and presents new with the expansion of EFT volume, electronic evidence on the costs and benefits associated transactions will become more competitive with with the efforts financial institutions make to checks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

396 Federal Reserve Bulletin • June 1983 Developments in consumer use of electronic fund transfers Consumer use of EFTs has grown vigorously over the past institutions in 1981. These providers accounted for about few years, as demonstrated by the following evidence: one-fifth of the assets of all depository institutions in the nation. Telephone bill payments grew approximately 20 • A Board-sponsored survey conducted in April 1983 percent in 1982 to an annual rate of 72 million transacfound that of the households with a checking, savings, tions.4 NOW, or share draft account, more than 68 percent had an account with an EFT feature and used it at least occasion- • The volume of transactions through automated clearally. In March 1981 the proportion was 54 percent. inghouses (ACHs) continued to grow substantially during the past year. Of the more than 49 million payments of • A recent survey of automation by commercial banks federal salaries and benefits in December 1982, nearly 18 confirms the trend toward expansion of EFT services. million, or 36 percent, were made by EFT.5 Another 16 Many small banks offer EFT services, and nearly all banks million electronic payments were originated each month engage in computerized operations, a necessary condition last year by about 20,000 private organizations. Total ACH for the spread of EFT.' volume reached an annual rate of 408 million electronic transactions, an increase of 30 percent over the year.6 • The number of automated teller machines (ATMs) in use has grown rapidly. At the end of 1982, financial institutions were operating an estimated 36,000 ATMs, 38 • Surveys indicate that 71 percent of all households now percent more than at the end of 1981. The average annual have at least one account at a financial institution that volume of transactions, excluding inquiries about balances, offers ATM access, and that at least one person in 32 rose 32 percent to 86,000 transactions per machine. Total percent of all households used an ATM in November volume increased 74 percent to an annual rate of 3.1 billion 1982.7 transactions at the end of 1982.2 • The number of financial institutions offering ATM • Point-of-sale EFT and home banking systems are access increased dramatically during 1981. According to a developing at an increasingly rapid pace. Of commercial recent survey, 29 percent of the nation's 14,400 commer- banks with total deposits exceeding $500 million, 13 percial banks were offering ATM services in 1982, up from 19 cent supported some form of EFT at point of sale, and 14 percent a year earlier; and 14 percent planned to offer ATM percent more planned to support such a system. Of banks services. Of banks offering such services, more than half with deposits between $100 million and $500 million, 3 were engaged in some form of ATM sharing with other percent supported and 10 percent planned to support pointinstitutions.3 of-sale EFT.8 Experiments with home banking systems are spreading: in 1980, 2 institutions operated pilot projects; by • Telephone bill-payment services were offered by more 1982, 80 institutions had pilots.9 About 25 systems are than 450 financial institutions in 1982, compared with 403 expected to be in full operation by 1986. 1. National Operations!Automation Survey 1981 (Washington, 6. NACHA SurePay Update (Washington, D.C.: National Auto- D.C.: American Bankers Association, 1981). mated Clearing House Association, December 1982). 2. Linda Fenner Zimmer, "ATMs: In the Wake of the Network 7. ATM Appeal and Usage—One-Year Update (Atlanta, Georgia: Scramble," Magazine of Bank Administration, vol. 59 (May 1983), The Unidex Reports, November 1982). pp. 26-30. 8. Richard R. Dart, Point of Sale: Current Status, Trends, and the 3. 1982 Retail Deposit Services Report (Washington, D.C.: Ameri- Task Force Approach (Cambridge, Maryland: Trans Data Corporacan Bankers Association, 1982). tion, 1982). 1 4. "Is Pay-By-Phone Reaching a Flashpoint?" Bank Network 9. Robert W. Price, "Videotex/Home Banking: Current Status and News, vol. 1, November 23, 1982. Trends," TransDatagram (Cambridge, Maryland: Trans Data Corpo- 5. Direct Deposit Volume Report (U.S. Department of the Trea- ration, October 30, 1982). sury, December 1982). Many consumers prefer convenience and self- terminals in convenient locations. Similarly, diservice in retail transactions generally because of rect deposit programs have offered consumers the price or quality advantages. The success of greater reliability and more convenient, more supermarkets, self-service gasoline stations, and immediate access to funds than alternative direct-dial telephone systems amply demon- means of deposit. Bill payments can be ordered strates that preference. In many of their dealings by telephone in any amount at any time of the with financial institutions, too, consumers prefer day through the computerized systems offered convenience and the opportunity to serve them- by most providers, and the consumer can specify selves. Those EFT services that have satisfied the date on which each transfer is to be made by these preferences have been swiftly adopted by his or her institution. As more merchants accept consumers. The most successful automated tell- EFTs as a means of payment at point of sale er machine programs have offered around-the- (POS), consumers are likely to make heavy use clock access to funds through highly reliable of them there as well. Complete documentation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in Consumer Electronic Fund Transfers 397 of transfers for recordkeeping and proof of pay- liability limits for losses from unauthorized transment is yet another convenience that attracts fers, disclosures to account holders, documentaconsumers to EFT. tion of transfers, notice of preauthorized credits, Automated teller machines (ATMs) are cur- error-resolution procedures, and other matters, rently the most prominent of the five principal Among the Board's statutory obligations is a forms of consumer EFT (the others are tele- requirement that it analyze the act's economic phone bill payment, home banking, point-of-sale effects, particularly the costs and benefits of the payments, and transfers through automated act to consumers and to other users of EFT clearinghouses). Despite their popularity, ATMs systems. To improve the quality of the analysis, have limited usefulness because they are not in 1981 and 1982 the Board's staff conducted a designed for use at the point of sale, the site of survey of financial institutions to determine their most retail transactions. Moreover, they cannot costs of complying with Regulation E and their in most circumstances handle payments to and perceptions of its benefits, from third parties. Nevertheless, ATMs are a From the Board's perspective, an understandsignificant step in the long-run development of ing of the economic and institutional effects of EFT systems. First, they have already familiar- Regulation E is important, for a number of ized people with debit cards and remote elec >n- reasons. First, the Board requires information on ic terminals, providing experience that can be compliance efforts to ensure that the consumer applied in point-of-sale transactions and home protections established in the act are implementbanking. Second, ATM networks will proliferate ed. Second, the Board seeks to ensure that its and form a national system of telecommunication regulations are not unduly burdensome or comlinks and interconnected message switches capa- plex. Third, recent laws, in particular the Finanble of handling large volumes of POS and home- cial Regulation Simplification Act of 1980 and the banking transactions. Regulatory Flexibility Act of 1980, require that the Board review all its regulations in order to minimize compliance costs and eliminate unnecessary burdens that compliance imposes on small REGULATION OF CONSUMER EFT businesses. Fourth, a regulation that affects so fast-growing a sector of the payment system as The Electronic Fund Transfer Act, which be- consumer EFT must be monitored to determine came law in November 1978, introduced a new its effect on growth and efficiency in the payment factor into the development of consumer EFT mechanism. Finally, because it is relatively new, services. Broad in its coverage of financial insti- Regulation E can serve as a paradigm for the tutions and technically exacting in its require- study of the costs of compliance associated with ments, the act had as its primary purpose the similar new regulations and thereby provide inestablishment of consumer rights and protec- sight into the economic effects of the regulatory tions. Although it provided certain protections process. for financial institutions involved in EFT, the act To meet these informational needs the Board principally imposed regulatory duties and liabil- undertook a survey of a sample of financial ities on institutions. Before its implementation, institutions to assess their costs of and benefits no one knew how costly compliance with the act from complying with Regulation E. The design would be for individual institutions or the indus- and findings of that survey are summarized in the try as a whole. Similarly, no one knew the extent following sections. The newness of the regulaof the benefits the act would engender. tion and of compliance efforts enhanced the The Congress gave the Federal Reserve Board chances for meaningful results from the survey, the responsibility for writing regulations to im- Financial institutions were expected to have betplement the Electronic Fund Transfer Act. The ter, more complete information on the costs of Board also was given the responsibility for ad- complying with Regulation E than on the costs ministering and enforcing the act for state mem- associated with older, more established regulaber banks. In Regulation E, the Board sets out tions, to which the institutions had adjusted long the rules for issuance of EFT access devices, ago. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

398 Federal Reserve Bulletin • June 1983 Survey Design the classes should divide the respondents into groups of approximately equal number to facili- Survey questions were formulated to collect in- tate statistical cross-class comparisons. The formation on incremental compliance costs, or same size classes are used throughout this report costs above and beyond what would have been so that comparisons can be made across tables. incurred in the absence of Regulation E. Respon- Of particular importance for the analysis of dents were asked to classify their incremental compliance costs is information on the types of compliance costs into start-up and ongoing ex- EFT services an institution offers. Compliance penses using the following functional categories: with Regulation E may be achieved at varying administration, training, legal services, labor, levels of expense and effort, depending on the changes in data processing systems, postage, level and complexity of EFT services an institutelephone statements, disclosures, and premises tion offers. Table 1 shows the number and perand equipment. In addition, each respondent was centage of respondents that offered each of the asked which EFT services it offered, its annual major EFT services covered by Regulation E. total volume of EFT transactions, and its percep- Several characteristics of the survey respontions regarding the benefits and costs of Regula- dents are evident in table 1. First, all but one of tion E. Participation in the survey was wholly the institutions offered direct deposit programs voluntary. General announcements of the survey and therefore became subject to the regulation's and calls for participants were published in the basic provisions, which specify error-resolution FEDERAL RESERVE BULLETIN and the Federal procedures and periodic statement documenta- Register. The 67 institutions that subsequently tion, among other things. Second, three-fourths supplied complete responses to the survey ques- of all respondents also offered automated teller tionnaire were located in 33 states and the Dis- machines or cash dispensers, thereby becoming trict of Columbia; they represented a wide varie- subject to additional regulatory provisions, such ty of sizes, geographic regions, state branching as those governing liability exposure, the issulaws, and bank holding company affiliations. ance of terminal access devices (mainly debit cards), and the dispensing of terminal receipts. Third, some institutions provided more compli- Characteristics of Respondents cated forms of EFT, including telephone bill payment, point-of-sale debit cards, or automatic The total domestic deposits of survey respon- payment features; because they usually involve dents ranged from less than $25 million to more on-line telecommunications or special use of the than $25 billion. The classes used to aggregate automated clearinghouse network, these serand report the data were chosen using two crite- vices may have required additional efforts to ria: (1) the classes should group respondents that comply with Regulation E and, consequently, could be expected to be roughly similar in such additional compliance costs. size-related aspects as operating methods, orga- Table 1 also shows that the smaller institutions nizational type, access to capital, scope of mar- tended to offer fewer EFT services than the kets, and attainable level of automation; and (2) larger institutions, although that observation 1. Percentage of survey respondents offering EFT services, by size of deposits Deposits (millions of dollars) AAllll EEFFTT sseerrvviiccee rreessppoonn-- Less than 100 100-500 500-1,000 1,000-3,000 3,000 or more ddeennttss Automated teller machine or cash dispenser 46 47 93 92 93 75 Telephone bill payment 9 7 14 31 29 18 Automatic payment features 54 80 57 77 86 72 Check authorization or guarantee 18 7 14 23 21 16 Point-of-sale debit card 18 7 14 31 14 16 Direct deposit program 100 100 93 100 100 98 Other 0 0 14 8 0 4 MEMO: Number of respondents in size class 11 15 14 13 14 67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in Consumer Electronic Fund Transfers 399 does not hold for every kind of service. Taken total ongoing costs tended to rise with the size of together, smaller institutions did, in fact, offer the institution, a pattern that might develop every type of EFT service, and they were not because larger institutions have a more compliseriously underrepresented in any type. Almost cated organizational structure to prepare for half of the smaller respondents offered ATMs, an compliance or invest more heavily in prepara- EFT service offered by virtually all respondents tions for compliance in hopes of selling such with more than $500 million in deposits. With the services to their correspondents. Second, smallproliferation of ATM networks, smaller institu- er institutions devoted, on average, larger shares tions are likely to find it increasingly easy to offer of their expenditures on compliance to legal, ATMs to their customers. It is apparent that their administrative, and training costs than larger size does not preclude some small institutions institutions did, possibly because the smaller from offering EFT services. Differences between ones had to assign a larger proportion of their institutions in services offered may become less managers to compliance activities or had to hire pronounced as sharing and franchising relation- outside consultants. Third, for the aggregate of ships develop and as the cost of providing ser- all respondents, the change in data processing vices falls. systems was the most expensive start-up func- Although the survey respondents represent a tion; and labor, probably for preparation of the broad range of institutional sizes and types, extra periodic statements and for error resolugeneralizations from their experiences about the tion, was the most costly ongoing function. compliance costs likely for other institutions Although the relationship does not hold for all should be cautiously made. The survey was a comparisons between size classes, larger finanvoluntary one, and it was not based on random- cial institutions seem to enjoy lower compliance sampling techniques. Respondents may have costs per EFT transaction (table 3), as they do been more likely to have active compliance pro- per million dollars of total deposits (table 4). A grams than most institutions at the time of the possible inference from these data is that some survey. Moreover, the costs of setting up a financial institutions suffer from a cost disadvancompliance program and complying with the tage in compliance merely because they are regulation may have changed since the survey. If small: they must incur the same costs as larger interpreted with these cautions in mind, the institutions do in setting up and maintaining their survey findings nevertheless may be considered compliance programs, which thus claim a larger indicative of the compliance costs other institu- proportion of their resources. The recent intions experience. creased availability of shared EFT networks, EFT services packaged for resale, and assistance in complying with Regulation E from a variety of Costs of Compliance vendors may mitigate such disadvantages. • Regulatory relief may also help offset the cost The survey was designed to determine start-up disadvantages that smaller institutions face in and ongoing compliance costs separately be- complying with Regulation E. For example, the cause expenditure patterns were presumed to be Federal Reserve Board recently amended Regusubstantially different for the two kinds of cost. lation E to provide relief to small institutions: for Start-up expenses were thought to be analogous the 26,000 depository institutions with assets of to fixed costs, and ongoing expenses were $25 million or less, all preauthorized electronic thought to be analogous to variable costs in the transfers to and from any consumer account are classic cost model. fully exempt from the regulation. Table 2 shows the average start-up and ongo- While the total cost of compliance per EFT ing costs that were reported by respondents in transaction, shown in the last line of table 3, may each size class. It also shows the percentage of appear to be high relative to the cost of an EFT total compliance costs incurred for each kind of transaction, it is probably not high enough to cost for each size class. Several conclusions may compromise the cost advantage EFT transacbe drawn. First, the ratio of total start-up costs to tions may otherwise have over check-based Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

400 Federal Reserve Bulletin • June 1983 transactions. In the long run, additional EFT more heavily utilized systems and, therefore, transactions can probably be made at little incre- lower costs per transaction. mental cost either for the payment system or for A rigorous statistical analysis of the survey compliance. Consequently, as EFT systems ma- findings about the effects on compliance cost of ture and are more heavily utilized, the average bank size, transaction volume, and level of EFT compliance cost per transaction will fall. The services offered will be presented in a forthcomlarger survey respondents were likely to have ing Board staff study. 2. Average costs per institution for compliance with Regulation E, by cost category and size of deposits of survey respondents Deposits (millions of dollars) Less than 100 100-500 500-1,000 1.000-3,000 3,000 or more All respondents Cost category Dollar Percent Dollar Percent Dollar Percent Dollar Percent Dollar Percent Dollar Percent amount of total amount of total amount of total amount of total amount of total amount of total Start-up costs Administration 2,333 38 3,361 18 18,808 22 17,275 11 75,663 20 24,228 18 Training 1,102 18 2,421 13 6,010 7 10,521 7 28,374 8 9,949 8 Legal services 684 11 3,255 17 17,248 20 15,035 10 23,960 6 12,369 9 Changes in data processing systems 572 9 7,257 38 37,846 44 83,082 53 173,681 47 62,039 47 Premises, furniture, supplies, equipment 450 7 687 4 464 0 9,047 6 5,804 2 3,293 2 Statement forms and disclosure documents 634 10 1,698 9 3,769 4 15,187 10 50,835 14 14,841 11 Other 432 7 417 2 949 1 6,745 4 14,387 4 4,677 4 Total 6,207 100 19,096 100 85,094 100 156,892 100 372,704 100 131,396 100 Ongoing costs Administration 2,992 23 7,143 33 42,995 41 4,107 6 23,282 10 16,946 19 Labor 6,351 50 7.370 34 39,197 37 15,787 24 80,310 36 31,186 35 Training 446 4 1,077 5 4,332 4 2,366 4 12,786 6 4,416 5 Legal services 168 1 1,017 5 1,676 2 1,550 2 9,891 4 3,014 3 Printing or purchase of statements 1,306 10 951 4 3,134 3 22,662 35 16,747 8 9,112 10 Postage 753 6 1,427 6 13,145 12 17,633 27 40,281 18 15,282 17 Premises, furniture, supplies, equipment 393 3 1,520 7 144 0 0 0 21,418 10 4,983 6 Telephone 122 1 909 4 485 0 385 1 468 0 492 0 Other 264 2 526 2 0 0 1,095 2 18,702 8 4,356 5 Total 12,795 100 21,940 100 105,108 100 65,585 100 223,885 100 89,787 100 Total costs through first year of compliance Administration 5,325 28 10,504 26 61,803 32 21,382 10 98,945 17 41,174 19 Training 1,548 8 3,498 9 10,342 5 12,887 6 41,160 7 14,365 6 Labor 6,351 33 7,370 18 39,197 21 15,787 7 80,310 13 31,186 14 Legal services 852 4 4,272 10 18,924 10 16,585 7 33,851 6 15,383 7 Changes in data processing systems 572 3 7,257 18 37,846 20 83,082 37 173,681 29 62,039 28 Printing or purchase of statements 1,306 7 951 2 3,134 2 22,662 10 16,747 3 9,112 4 Postage 753 4 1,427 3 13,145 7 17,633 8 40,281 7 15,282 7 Premises, furniture, supplies, equipment 843 4 2,207 5 608 0 9,047 4 27,222 4 8,276 4 Statement forms and disclosure documents 634 3 1,698 4 3,769 2 15,187 7 50,835 9 14,841 7 Telephone 122 1 909 2 485 0 385 0 468 0 492 0 Other 6% 943 949 0 7,840 33,089 9,033 Total 19,002 100 41,036 100 190,202 100 222,477 100 596,589 100 221,183 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in Consumer Electronic Fund Transfers 401 3. Average costs per EFT transaction for compliance with Regulation E, by cost category and size of deposits of survey respondents Cents Deposits (millions of dollars) All rreessppoonn-- Less than 100 100-500 500-1,000 1,000-3,000 3,000 or more dents Start-up costs Administration 4.3 1.6 2.4 1.4 1.2 1.4 Training 2.1 1.2 .8 .8 .5 .6 Legal services 1.3 1.6 2.2 1.2 .4 .7 Changes in data processing systems 1.1 3.5 4.8 6.6 2.9 3.6 Premises, furniture, supplies, equipment .8 .3 .1 .7 .1 .2 Statement forms and disclosure documents ... 1.2 .8 .5 1.2 .8 .9 Other .8 .2 .1 .5 .2 .3 Total 11.6 9.2 10.9 12.4 6.1 7.7 Ongoing costs Administration 5.1 3.0 5.1 .3 .4 .9 Labor 10.7 3.0 4.7 1.2 1.2 1.6 Training .8 .4 .5 .2 .2 .2 Legal services .3 .4 .2 .1 .2 .2 Printing or purchase of statements 2.2 .4 .4 1.7 .3 .5 Postage 1.3 .6 1.6 1.3 .6 .8 Premises, furniture, supplies, equipment .7 .6 0 0 .3 .3 Telephone .2 .4 .1 0 0 0 Other .4 .2 0 .1 .3 .2 Total 21.7 9.0 12.6 4.9 3.5 4.7 | . ... . . .. • 3® Total costs through first year of compliance Administration 9.4 4.6 7.5 1.7 1.6 2.3 Training 2.9 1.6 1.3 1.0 .7 .8 Labor 10.7 3.0 4.7 1.2 1.2 1.6 Legal services 1.6 2.0 2.4 1.3 .6 .9 Changes in data processing systems 1.1 3.5 4.8 6.6 2.9 3.6 Printing or purchase of statements 2.2 .4 .4 1.7 .3 .5 Postage 1.3 .6 1.6 1.3 .6 .8 Premises, furniture, supplies, equipment 1.5 .9 .1 .7 .4 .5 Statement forms and disclosure documents 1.2 .8 .5 1.2 .8 .9 Telephone .2 .4 .1 .0 .0 .0 Other 1.2 .4 .1 .6 .5 .5 Total 33.3 18.2 23.5 17.3 9.6 12.4 Benefits of Compliance received only 75 complaints regarding EFT; 37 concerned banks not supervised by the Board The survey of financial institutions also included and were referred to other supervisory agencies. questions regarding the benefits of Regulation E Of the 38 complaints concerning banks superto consumers, financial institutions, and the pay- vised by the Board, only 3 involved a bank ment system. Answers to those questions were violation; the rest involved no bank error, a necessarily subjective and nonquantifiable. Vir- clerical error, or a factual dispute, or were in the tually all financial institutions that responded to process of being resolved. Measured against the the questions about benefits stated that no oper- 3 billion EFT transactions a year at ATMs alone, ating costs had been reduced or eliminated as a the number of official complaints is minute. It side benefit of compliance efforts. Some men- suggests that only few errors or problems occur tioned that consumers and the payment system and that financial institutions are able to resolve in general would benefit from the standardization them. of error-resolution procedures, uniform limits on Another source of evidence on consumer liability, and consumers' increased awareness of benefits is a pair of Board-sponsored consumer EFT issues, rights, and responsibilities. surveys based on random samples, one conduct- Evidence on consumer benefits is available ed in March 1981 and the other in April 1983 from two other sources. One is the Board's Con- (table 5). The 1983 survey found that about 6 sumer Complaint Control System, which in 1982 percent of households holding a transaction ac- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

402 Federal Reserve Bulletin • June 1983 4. Average costs per million dollars of total deposits for compliance with Regulation E, by cost category and size of deposits of survey respondents Dollars Deposits (millions of dollars) AAllll CCoosstt ccaatteeggoorryy rreessppoonn-- Less than 100 100-500 500-1,000 1,000-3,000 3,000 or more ddeennttss Start-up costs Administration 51.14 15.03 26.19 9.26 8.92 10.35 Training 24.16 10.82 8.37 5.64 3.35 4.25 Legal services 15.00 14.55 24.02 8.06 2.83 5.28 Changes in data processing systems 12.54 32.44 52.70 44.53 20.48 26.49 Premises, furniture, supplies, equipment 9.87 3.07 .65 4.85 .68 1.41 Statement forms and disclosure documents ... 13.90 7.59 5.25 8.14 5.99 6.34 Other 9.47 1.86 1.32 3.62 1.70 2.00 Total 136.08 85.36 118.50 84.10 43.95 56.12 Ongoing costs Administration 59.64 27.68 55.59 2.03 2.55 6.59 Labor 126.59 28.55 50.68 7.81 8.79 12.13 Training 8.88 4.17 5.60 1.17 1.40 1.72 Legal services 3.35 3.94 2.17 .77 1.08 1.17 Printing or purchase of statements 26.03 3.68 4.05 11.21 1.83 3.54 Postage 15.00 5.53 17.00 8.72 4.41 5.94 Premises, furniture, supplies, equipment 7.82 5.89 .19 0 2.35 1.94 Telephone 2.43 3.52 .63 .19 .05 .19 Other 5.26 2.04 0 .54 2.05 1.69 Total 255.00 85.00 135.91 32.44 24.51 34.91 Total costs through first year of compliance Administration 110.78 42.71 81.78 11.29 11.47 16.94 Training 33.04 14.99 13.97 6.81 4.75 5.97 Labor 126.59 28.55 50.68 7.81 8.79 12.13 Legal services 18.35 18.49 26.19 8.83 3.91 6.45 Changes in data processing systems 12.54 32.44 52.70 44.53 20.48 26.49 Printing or purchase of statements 26.03 3.68 4.05 11.21 1.83 3.54 Postage 15.00 5.53 17.00 8.72 4.41 5.94 Premises, furniture, supplies, equipment 17.69 8.96 .84 4.85 3.03 3.35 Statement forms and disclosure documents ... 13.90 7.59 5.25 8.14 5.99 6.34 Telephone 2.43 3.52 .63 .19 .05 .19 Other 14.73 3.90 1.32 4.16 3.75 3.69 Total 391.08 170.36 254.41 116.54 68.46 91.03 count with an EFT feature alleged that the insti- A primary benefit intended by the act is the tution had made an error in the past year because information conveyed to consumers by the disof the feature. Most of these alleged errors closures that institutions must regularly send appeared to involve misunderstandings, mechan- out. The 1983 survey revealed that 53 percent of ical malfunctions of ATMs, or accounting mis- households with an EFT account feature were takes, rather than errors in the actual transfer of aware of receiving notices of error-resolution funds. Of those who complained to the institu- procedures from the financial institution (up tion about an alleged error, virtually all reported from 45 percent in 1981). Only 10 percent of being satisfied with the way in which the institu- those households were aware of a federal law or tion resolved the complaint. regulation concerning EFT-related errors, de- In the 1983 survey, fewer than 1 percent of spite having received the required notices reguhouseholds with an account subject to EFT larly (down from 14 percent in 1981). Fewer than alleged an unauthorized withdrawal in the past 12 percent of the households with an EFT feature year because of that feature. Furthermore, none in their account had heard of any federal legislaof those households lost any money in the end. tion or regulation limiting the amount of money a Given the frequency of electronic transfers in the consumer could lose through an unauthorized payment system, the number of EFT errors as electronic transfer. Although these findings sugdefined in Regulation E seems to be negligible. gest that consumers have little awareness of Moreover, some of the alleged errors were not rules and regulations about EFTs, this apparent actually related to EFT. failure may in fact demonstrate that EFT sys- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in Consumer Electronic Fund Transfers 403 5. Survey of consumer EFT accounts Item Number P of e r t c o e t n a t l pe B rc a e se n t f a o g r e 1 Households interviewed 707 Had any checking, savings, NOW, or share draft accounts 635 93.2 (581 Account had at least one EFl feature and that feature was used at least occasionally 435 68.5 635 Alleged an error by a financial institution in the past year because of an EFT feature2 26 6.0 435 Complained to the institution about the error 21 84.0 25 Were satisfied with the institution's resolution of the error 20 95.2 21 Were aware of receiving error-resolution procedure notice from the institution 232 53.3 435 Were aware of a federal law or regulation concerning EFTrelated errors 43 9.9 435 Alleged unauthorized withdrawal from an account because of an EFT feature3 3 .7 435 Ultimately lost money because of the alleged withdrawal 0 0 3 Were aware of any federal law or regulation that limits the amount of money that a consumer would lose from an unauthorized withdrawal because of an EFT feature 51 11.7 435 1. For some responses the base for calculating percentages is SOURCE. The survey was conducted for the Federal Reserve Board smaller than the number interviewed because some respondents did in April 1983 by the University of Michigan Survey Research Center. not reply to those questions. A national random sample of 707 households was interviewed by 2. In some cases responses indicate that the error was actually telephone; 681 usable responses were obtained. Because of sampling made by the consumer or that the problem was a misunderstanding error normally encountered in a survey of this type and size, the rather than an error by the institution. sample response rates are likely to be within 2 percentage points of the 3. In some cases responses indicate a misunderstanding or a underlying rates for the population 95 percent of the time. withdrawal by another family member rather than a fraudulent withdrawal. terns have been working well, so that consumers celerating. That acceleration shows no signs of do not feel they need to read or understand the abating. As institutions comply with EFT reguladisclosures. Moreover, many of the provisions in tion, their costs will reflect their initial efforts to the regulation, such as limitations on liability for set up compliance programs as well as their unauthorized transfers, provide benefits regard- ongoing expenses to maintain them. As EFT less of whether consumers are aware of them. systems mature, as transaction volume builds, and as start-up costs for compliance are amortized, compliance costs for each EFT transaction CONCLUSION are likely to fall. With regard to consumer rights in EFT, there appear to be few problems, and Regulation of consumer EFT began at a time available evidence indicates that the number of when the number of financial institutions offering account errors and unauthorized transfers is neg- EFT services, the number of consumers de- ligible both in absolute terms and relative to the manding those services, and the volume of con- volume of EFT transactions occurring in the sumer electronic transactions were steadily ac- payment system. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

404 Treasury and Federal Reserve Foreign Exchange Operations: Interim Report This interim report, covering the period Febru- January 1983. This firm performance was conary through April 1983, is the twenty-first of a trary to the forecasts of the many experts and series providing information on Treasury and market observers who were anticipating a signifi- System foreign exchange operations to supple- cant further easing of the dollar through early ment the regular series of semiannual reports 1983. that are usually issued each March and Septem- The dollar's firmer-than-expected tone first ber. It was prepared by Sam Y. Cross, Manager emerged in response to definite signs that recesof Foreign Operations of the System Open Mar- sion in the United States was giving way to a ket Account and Executive Vice President in significant recovery. However, for a period after charge of the Foreign Group of the Federal mid-February, those initial signs of a strong Reserve Bank of New York. industrial upturn were superseded by later indications that the expansion was likely to be more During the February-April period under review, moderately paced, confined largely to increased the decline in global economic activity appeared activity in a few sectors of the economy and to a to have ended, but questions remained about the turnaround in inventory investment. Thus, some breadth and scope of recovery and the prospects skepticism reappeared that the recovery would for a resumption in growth of world trade. De- prove durable in the face of continued high real mand for oil remained weak and oil prices soft- interest rates. ened to the point of challenging the ability of the Nevertheless, the economic outlook remained Organization of Petroleum Exporting Countries more promising for the United States than for to set production quotas and price differentials most other industrialized countries. Moreover, and thereby effectively to limit price declines. shortly after the President's State of the Union Meanwhile, persistent concern about the diver- and budget messages, the administration's ecogence of economic performances within Europe nomic advisers were suggesting that the projecgenerated a major speculative attack against the tions for growth of real output for 1983, then exchange rate relationships within the European estimated at 1.4 percent, should be revised Monetary System (EMS). This speculation strongly upward. By comparison, European offiprompted the heaviest central bank intervention cials forecast little or no growth in continental in support of the EMS rate structure in the four- economies, and Japan's forecast growth rate of year history of the EMS before the rates were 3.4 percent for fiscal 1983-84 looked modest realigned on March 21. compared with that country's presumed poten- As the exchange markets reacted to the cross- tial. currents of these developments, the dollar gener- The dollar was sustained in the market as a ally held steady against most currencies. On number of concerns subsided that had weighed balance, between the end of January and the end against the currency during the late fall and early of April the dollar was little changed against the winter. In particular, the fear that economic German mark and narrowly mixed vis-a-vis other recovery would necessarily be accompanied by a currencies. Although trading below its highs of rekindling of inflation tended to dissipate as late 1982 against the major foreign currencies, prospects for substantial gains in productivity the dollar remained well above its lows reached improved. Market observers also became less immediately preceding the reporting period in concerned about cost pressures from basic mate- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

405 rials, as expectations grew of a substantial reduc- In addition, the dollar frequently became tion of world oil prices. The U.S. trade account caught up in developments primarily involving turned out to be in smaller deficit during the first European currencies, particularly the events surquarter than had generally been expected, and rounding the realignment on March 21 of parities the deficit even narrowed somewhat from that in the EMS. From early February, sentiment recorded in the last three months of 1982. This became increasingly favorable toward the Gerresult reflected a sharp drop in the oil import bill, man mark, which strengthened against other which was expected to be largely temporary and European currencies as well as the dollar, as was associated with reduced demand in response market participants speculated first about the to the relatively warm winter and the liquidation outcome of upcoming national elections in Gerof inventories in anticipation of lower prices many and then about the likelihood that a longlater. Market forecasts of a large U.S. current anticipated realignment of EMS parities would account deficit for the year as a whole were not take place shortly thereafter. Speculative buying significantly revised. Nevertheless, the tempo- of German marks and Dutch guilders, both conrary respite from monthly releases of large deficit sidered virtually certain to be revalued in any figures seemed to defuse what had previously restructuring of the EMS, intensified while the been an important negative factor for the dollar, weaker currencies in the European joint float, so that considerations of relative trade and cur- including particularly the French and Belgian rent account performances received little atten- francs, came on offer. tion in the exchange markets during the period The French franc, after having been mainunder review. tained around the middle of the EMS band for The exchange markets were also influenced at some weeks, was allowed to drop to its mandatimes by shifting assessments of the prospects tory lower intervention point after March 6, and, for dollar interest rates. During February the subsequently, Euro-French franc interest rates improving scenario for inflation, together with soared to unprecedented levels. The Belgian the prospect for only a moderate recovery, gave authorities, also faced with intensifying presa lift to U.S. credit markets, and long-term sures, imposed stringent new foreign exchange interest rates began to turn down. In this envi- controls. With speculation against these two ronment, market operators considered the possi- currencies becoming prohibitively expensive, bility that the Federal Reserve would not resist a positioning in favor of the stronger EMS currendecline in short-term interest rates and might cies increasingly took the form of sales of nonlower its discount rate, both to lend support to EMS currencies, including the dollar. At the the recovery at home and to help foster an same time, official intervention to defend the international economic climate in which heavily EMS parities, while primarily conducted in Euindebted countries might be better able to meet ropean currencies, also involved substantial the objectives of their stabilization programs. In sales of dollars by the central banks whose fact, short-term rates held steady through April, currencies were weak within the system. EMSand the Federal Reserve kept its discount rate at related sales by both private and official parties the level of 8V2 percent established in December. thus contributed to a tendency of the dollar to But long-term rates did continue to ease, moving decline moderately during the first three weeks down in two stages—first during February and of March, particularly against the German mark. again in April. It appears that, as long-term rates The reversal of these flows after the March 21 eased, substantial amounts of funds were moved realignment similarly contributed to the dollar's into the United States by investors hoping to subsequent recovery. realize further capital gains. At the same time, By April, as the new quarter opened and many real interest rates remained relatively high, and of the reflows into dollars associated with the foreign investment was attracted also by the recent EMS realignment were completed, exbullish U.S. stock market, continuing safe-haven change market activity settled down to a subconsiderations, and the apparently better growth dued pace, and the dollar traded in a relatively prospects in the United States than abroad. narrow range. Some uncertainty was generated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

406 Federal Reserve Bulletin • June 1983 1. Drawings and repayments1 Millions of dollars; drawings, or repayments Outstanding, 1983 Outstanding, Bank, or drawings 1982: 1 1982: 2 1982: 3 1982: 4 1983: 1 Jan. 1, 1982 April April 30, 1,983 Foreign central banks and the Bank for International Settlements under regular reciprocal currency arrangements BBaannkk ddrraawwiinngg oonn FFeeddeerraall RReesseerrvvee SSyysstteemm BBaannkk ooff MMeexxiiccoo J 800.01 11,400.01 0 0 [-600.0] 1-900.0} -217.4 -482.6 0 0 BBaannkk ffoorr IInntteerrnnaattiioonnaall SSeettttlleemmeennttss22 ((aaggaaiinnsstt } 124.01 0 0 0 0 (-124.0} 0 0 0 GGeerrmmaann mmaarrkkss)) Bank of Mexico under special swap arrangements Drawings on U.S. Treasury special temporary facility for f 825.01 $1,000 million [-825.0J Special combined credit facility Federal Reserve special facility for f 89.81 $325 million I" 43.8} 211.2 67.8 325.0 U.S. Treasury special facility for $600 million [ 166.8 392.2 122.3 600.0 [- 81.3 [1,081.61 Total. 1 —950.01 603.5 190.00 0 925.0 Central Bank of Brazil under special swap arrangements with the U.S. Treasury Drawings on U.S. Treasury special facilities for 500.01 $500 million -500.0} $280 million 280.0 - 280.0 $450 million 450.0 - 450.0 250.01 $250 million -104.2} - 145.8 ] 200.0] $200 million 1- 200.01 } 200.0] $200 million \- 200.0J l,480.0j { 400.0 Total -604.2J I—1,275.8J 1. Data are on a value-date basis. Because of rounding, details may 2. BIS drawings and repayments of dollars against European curnot add to totals. rencies other than Swiss francs to meet temporary cash requirements. by the persistent divergence between the dollar's released by the summit ministers, accompanied apparent firmness and the still widely held view by a statement on intervention and related matthat the medium-term trend of the dollar would ters. But, in the cautious atmosphere that had be downward because of the outlook for interest prevailed during much of April, market profesrates and current accounts. Adding to the uncer- sionals were prepared to sell dollars, thereby tainty were concerns that trade protectionist stemming any marked upward movement of the pressures might be deepening in response to two dollar, while commercial participants often were years of declining world growth. In this context, substantial buyers when the dollar eased. As a talk spread among market participants that the result, the dollar market was well balanced. major industrial countries might be preparing a There was a marked change of the dollar only coordinated intervention effort—now that the against the pound sterling, which, in an environintervention study commissioned at last year's ment of stabilizing oil prices, recovered nearly 7 summit meeting had been completed and on percent from an earlier decline. speculation that exchange rates would be a major By the close of the period the dollar traded at point of discussion at the Williamsburg summit. DM 2.4615 in terms of the German mark and By late April, however, expectations of substan- ¥ 237.80 against the yen, some Vi percent and tial changes in official intervention policy faded, 1 percent respectively below the levels of three and on April 29 the intervention study was months earlier. Against the pound sterling, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 407 2. U.S. Treasury securities, foreign commitments, currency denominated1 Millions of dollars equivalent; issues, or redemptions (—) Amount of Amount of 1983, Issues commitments, 1982: 1 1982: 2 1982: 3 1982: 4 1983: 1 commitments, April Jan. 1, 1982 April 30, 1983 Public series Germany ... 3,622.3 0 -451.0 -1,231.9 -664.1 0 0 1,275.2 Switzerland 458.5 0 0 0 0 -458.5 0 0 Total 4,080.8 0 -451.0 -1,231.9 -664.1 -458.5 0 1,275.2 1. Data are on a value-date basis. Because of rounding, details may not add to totals. dollar ended the period down nearly 3 percent as during this three-month period, Mexico reduced compared with three months earlier, while it its net outstanding borrowing from the Federal increased 2 percent against the Swiss franc. In Reserve and the Treasury under these facilities terms of a trade-weighted average, the dollar by $303.0 million. rose about 1 percent to close the period only On February 1 the Central Bank of Brazil slightly below the historically high levels it had repaid $280 million of the $730 million outstandreached in November 1982. The U.S. authorities ing on facilities made available to it earlier by the did not intervene in the exchange markets during Treasury. The remaining $450 million facility the period under review. was repaid on March 3. On February 28, the In other operations during the three-month Treasury agreed to provide Brazil with two addiperiod, the U.S. monetary authorities continued tional swap facilities of $200 million each in to provide credits to Mexico and Brazil. At the anticipation of Brazil's drawings under the comsame time, both countries made repayments on pensatory financing facility and the extended 4 earlier bridging credits provided by the U.S. Fund facility of the International Monetary monetary authorities as they drew on other fi- Fund. These swaps were drawn on February 28 nancing arrangements. and March 3 and were repaid by March 11. Thus, As discussed in the previous report, both the at that point Brazil had repaid in full all Treasury Federal Reserve and the U.S. Treasury's Ex- swaps that had been made available to it since change Stabilization Fund had provided credits October 1982, to Mexico during 1982-83. Funding was provided In April, the Bank for International Settlethrough the Bank of Mexicos' regular swap facil- ments, acting with the support of the U.S. Treaity of $700 million with the Federal Reserve, and sury and the monetary authorities in other counalso through special swap facilities in cooper- tries, agreed to participate in an international ation with other central banks through the Bank financial support package for Yugoslavia. The for International Settlements. In February, Mex- Treasury, through the Exchange Stabilization ico drew the remaining portion of the special Fund, as part of the liquidity-support arrangefacility, receiving $44.25 million from the Trea- ment for the BIS provided by the participating sury and $25.75 million from the Federal Re- monetary authorities agreed to substitute for the serve. As of April 30, drawings of $325 million BIS for $75 million in the unlikely event of and $600 million were outstanding from the Fed- delayed repayment by Yugoslavia. eral Reserve and the Treasury respectively, rep- In the period from February through April, the resenting the entire $925 million available under Federal Reserve and the Treasury realized no the U.S. portion of the multilateral swap facility. profits or losses from exchange transactions. As On February 28, the Bank of Mexico fully repaid of April 30, cumulative bookeeping or valuation the remaining $373 million outstanding on its losses on outstanding foreign currency balances swap line under the Federal Reserve's regular were $578.1 million for the Federal Reserve and reciprocal currency arrangement, which had $951.3 million for the Treasury Exchange Stabilibeen drawn last August before other arrange- zation Fund, while the Treasury general account ments had been put in place. Thus, on balance, showed valuation gains of $360.9 million related Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

408 Federal Reserve Bulletin • June 1983 3. Net Profits and losses (-) on U.S. Treasury and valued at end-of-period exchange rates, com- Federal Reserve current foreign exchange pared with the rates prevailing at the time the operations1 foreign currencies were acquired. Millions of dollars The Federal Reserve and the Treasury have United States Treasury invested foreign currency balances they had ac- FFeeddeerraall quired in the market as a result of their foreign PPeerriioodd RReesseerrvvee S E ta x b c il h i a z n at g i e o n General exchange operations in a variety of investments account Fund that yield market-related rates of return and have February 1 through a high degree of quality and liquidity. Under the April 30, 1983 0 0 0 Valuation profits and authority provided by the Monetary Control Act losses on outstanding of 1980, the Federal Reserve had invested some assets and liabilities as of April 30, 1983 .. -578.1 -951.3 360.9 of its own foreign currency resources and those held under warehousing agreements with the 1. Data are on a value-date basis. Treasury in securities issued by foreign governments. As of April 30, the Federal Reserve's to outstanding issues of securities denominated holdings of such securities were equivalent to in foreign currencies. These valuation gains and $1,509 million. In addition, the Treasury directly losses represent the decrease in the dollar value held the equivalent of $2,589 million in these of outstanding currency assets and liabilities securities as of the end of April. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

409 Industrial Production Released for publication June 15 age gain for six months after a cyclical low. At 144.3 percent of the 1967 average, the index for Industrial production increased an estimated 1.1 May was about 6 percent below the prerecession percent in May, with gains widespread among high in mid-1981. materials and products. Large advances oc- In market groupings, output of durable concurred in the output of automotive products, sumer goods continued to advance strongly in business equipment, and construction supplies. May, while output of nondurable goods in- Since the low in November 1982, total industrial creased slightly. Autos were assembled at an output has increased 7 percent—about the aver- annual rate of 6.2 million units compared with a 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: May. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

410 Federal Reserve Bulletin • June 1983 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, GGGrrrooouuupppiiinnnggg 1983 1983 MMMaaayyy 111999888222 tttooo MMMaaayyy Apr.p Maye Jan. Feb. Mar. Apr. May 111999888333 Major market groupings Total industrial production 142.7 144.3 1.6 .5 1.3 2.0 1.1 3.7 Products, total 144.3 146.0 .7 -.4 1.0 1.8 1.2 2.6 Final products 142.6 144.3 .4 -.9 .8 1.9 1.2 1.5 Consumer goods 146.8 148.1 1.1 -.1 .8 1.6 .9 3.1 Durable 139.1 142.4 4.5 2.1 1.2 2.3 2.4 7.4 Nondurable 149.9 150.4 -.1 -.9 .5 1.4 .3 1.7 Business equipment . 147.2 149.7 -1.0 -2.7 .8 2.3 1.7 -6.4 Defense and space .. 119.4 120.9 .4 -.3 .9 2.0 1.3 12.3 Intermediate products . 150.7 152.6 1.6 1.1 1.8 1.9 1.3 7.0 Construction supplies 137.0 139.6 3.3 2.1 3.1 2.5 1.9 14.2 Materials 140.1 141.5 3.3 2.2 1.7 2.1 1.0 5.4 Major industry groupings Manufacturing 143.2 145.0 1.6 1.1 1.5 2.1 1.3 5.1 Durable 129.1 131.1 2.2 1.1 1.9 2.3 1.5 4.0 Nondurable 163.6 165.1 1.2 1.0 1.0 1.9 .9 6.5 Mining 111.9 113.1 3.0 -5.2 -2.7 -.5 1.1 -12.3 Utilities 167.5 167.3 -.7 -.7 2.3 1.1 -.1 -2.1 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. 5.9 rate in April, and current industry schedules 2.5 percent per month since last December. suggest a sizable further increase for June. The Materials output increased 1.0 percent in May, output of lightweight trucks for consumer use reflecting gains in durable and nondurable matewas also up sharply in May. Production of home rials and a small decline in energy materials. The goods, which had surged in both March and strong pace of advance in the production of April, advanced further in May at a somewhat durable materials during the preceding four slower pace. months lessened somewhat to an increase of 1.4 Output of business equipment increased 1.7 percent in May. Among nondurable materials, percent in May. Output of building and mining production of chemicals, paper, and textiles equipment rose sharply, as oil and gas well showed sizable increases. drilling activity increased and a strike at an In industry groupings, output of manufacturing equipment producer was resolved in late April. increased 1.3 percent in May, reflecting gains of Production of manufacturing, commercial, and 1.5 percent in durable manufacturing and 0.9 transit equipment also was up further in May. percent in nondurable manufacturing. Mining Output of construction supplies continued to activity turned upward, but output by utilities advance rapidly, and the gain has averaged about edged down. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

411 Statement to Congress Statement by Preston Martin, Vice Chairman, sions of the economic situation, particularly as Board of Governors of the Federal Reserve Sys- they affect labor markets, and will indicate what, tem, before the Subcommittee on Domestic in my view, the Federal Reserve can do—and Monetary Policy of the Committee on Banking, cannot do—to help establish a climate for sus- Finance and Urban Affairs, U.S. House of Rep- tainable improvement in economic activity and resentatives, June 1, 1983. employment. My colleague, Mr. Silas Keehn, President of the Federal Reserve Bank of Chica- I am pleased to have this opportunity to discuss go, will then focus on the particular employment the current employment situation, which, quite problems of several of the states within his rightly, is a matter of great concern both to the Reserve Bank's District. members of this committee and to the Federal At the present time our economy is emerging Reserve. As you are well aware, the nation's from a most trying and difficult period. Throughunemployment rate reached a postwar high dur- out the 1970s we were afflicted by an increasingly ing the recent recession; and although labor virulent inflation that, by the end of the decade, demand is now strengthening, one-tenth of our was threatening to undermine our economy in labor force was still unemployed when the most rather fundamental ways. The underlying inflarecent labor market surveys were conducted in tion rate had accelerated to the double-digit level mid-April. Similar problems of high unemploy- and seemed likely to go higher. Price speculation ment characterize our trading partners because was spreading into the decisionmaking processes of a long period of slow growth in the world of both businesses and consumers, and the dollar economy. had weakened considerably in foreign exchange This recent period of high unemployment has markets. An even more troubling development disrupted the lives of millions of willing workers was the high inflation that was coming to be and their families. Many persons who had held viewed as a permanent feature of our economy; jobs have lost them in the wake of declining more and more, inflation was being built into the economic activity. Others, seeking jobs for the structure of interest rates, and rising inflationary first time, have been unable to find them, and expectations were exerting an increasingly have instead fallen into the ranks of the unem- strong hold on the behavior of savers and invesployed. Still others, discouraged by poor labor tors alike. market conditions, have dropped out of the labor This gradual worsening of inflation, and the force altogether. application of restrictive policies necessary to Obviously, an employment situation like this bring inflation under control, eventually culmicreates extensive strains within our society. We nated in a prolonged period of economic stagnacan point with considerable pride to our success tion. On balance, from mid-1979 to late 1982, in reducing inflation over the last two years. there was little change in real output, and our However, that gain would represent only a par- economy fell substantially beneath its potential tial success if it were to leave a large part of our to produce. In labor markets the total number of work force outside the mainstream of economic unemployed workers rose 5V2 million from late life for extended periods. Therefore, we at the 1979 to the end of 1982, and the unemployment Federal Reserve share this committee's interest rate reached a maximum of 10.8 percent, about 5 in exploring the dimensions of the current em- percentage points above the lowest point ployment situation and in seeking ways in which reached during the economic expansion of the it might be constructively addressed. In my late 1970s. remarks today I will focus on the broad dimen- The long period of economic stagnation and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

412 Federal Reserve Bulletin • June 1983 rising unemployment affected most industries, It is true that part of that slowdown in inflation regions, occupations, and demographic groups. reflected the influence of special developments The most serious impact, however, was felt by in agricultural and energy markets. However, the cyclically sensitive construction and durable there have also been strong indications of more goods manufacturing industries, many of which fundamental gains, as the wage-price interacalready were facing difficult transitions because tions that had helped perpetuate inflation of heightened competition from foreign produc- through the 1970s began losing momentum. ers. In some key sectors—including steel, autos, Many businesses have been adapting their pricand lumber—operating rates fell to extremely ing policies to the realities of a more competitive low levels, and economic hardships became and less inflationary economy. Work rules are widespread in the communities that were depen- changing as firms strive to bolster productivity dent on these industries. Unemployment rose and trim costs. At the same time, workers are especially rapidly among adult men, who hold a agreeing to smaller pay increases than in earlier disproportionate number of jobs in the durable years; but, happily, with inflation falling so rapgoods producing industries. Among blacks and idly, the slowing of nominal wage increases teenagers, unemployment rose further from rates generally has been consistent with gains in real that already were far above the national average. purchasing power. A slower rate of increase in As the period of economic recession became labor costs is relieving pressures on prices, and more prolonged, the number of long-term unem- in turn a slowing of prices is damping inflationary ployed rose to an exceptionally high level. expectations and relieving workers' fears of fall- At the same time, despite a discouraging labor ing behind in an inflationary spiral. market situation overall, there continued to be For the time being, at least, this cumulative signs of underlying employment stability in sev- process of disinflation appears to be continuing. eral sectors—and even a few pockets of vitali- Wage adjustments so far this year have been ty—as the rapid growth of new industries led to holding at a reduced pace similar to that of late expanding job opportunities. For example, the 1982, and recent price developments have been service sector of the economy continued to grow exceptionally encouraging. The consumer price throughout the recession and now employs IV2 index rose at an annual rate of about 2 percent million more people than it did at the beginning over the first four months of this year, and the of 1980. Over that period, the use of computers producer price index actually fell at an annual in our economy increased rapidly, and the num- rate of nearly 4 percent during that same period. ber of workers providing computer and data Although these price data were influenced in part processing services, though still a small share of by declining oil prices early in the year, they also total employment, has risen by more than a indicate a continued easing in underlying inflafourth in the past three years. tionary trends. Because inflation had become so deeply em- Curbing the momentum of inflation is now bedded in our economy, prices kept rising rapid- beginning to have the salutary effects on real ly in 1980 and 1981, even as the economy was activity that had long been anticipated. The falling into recession. Inflation in 1980 remained halving of inflation rates during 1982, as well as a near the double-digit level, and in 1981 the slow- number of other factors, contributed to substaning of prices was mainly confined to a few tial declines in interest rates over the second half sectors of the economy. of last year. As a result, activity in housing began In 1982, however, the application of policies to to improve last summer; gains in consumer combat inflation began to bear substantial fruit. spending started to appear last fall; and in recent The slowing of price advances became more months a number of other broad economic indiwidespread and potentially more lasting, as all cators have been pointing to a strengthening major price indexes advanced at considerably economy. Barometers of consumer attitudes and slower rates than in 1981. For some price mea- business sentiment have strongly improved, and sures, the increases in 1982 were the smallest in increases in production and sales are now apparmore than a decade, and price developments ent in a wide range of industries. have continued to be favorable into early 1983. The upturn in economic activity has, in turn, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 413 led to some firming of labor market conditions. it will escalate again once a new expansion has The rate of layoffs began slackening in late 1982, gained momentum. To a considerable extent, and the unemployment rate has started to come that fear arises from more than a decade of failed down from its peak level. Total payroll employ- efforts to reduce inflation for more than brief ment has increased about 650,000 since the end periods; and because such expectations of inflaof last year, with more than one-third of those tion are still very much in evidence, we must be gains occurring in the manufacturing sector, in especially prudent in designing monetary policy which employment had previously declined in the period ahead. In particular, focusing monsteadily for a year and a half. So far, the gains etary policy solely on the need for rapid growth have been about average for the early stages of a and ignoring the still-present threat of inflation recovery. would risk surrendering the gains that we have The price and employment developments made against inflation at such a high social cost. since the beginning of the year have been broadly To be sure, the task of controlling inflation and in line with the economic expectations held by restoring growth should not be viewed as the members of the Federal Open Market Committee responsibility of monetary policy alone. Fiscal and included in our February monetary policy policy, too, must do its part. I am well aware that report to the Congress. The general thrust of the Congress and the administration are sensitive those projections, you may recall, was that activ- to the dangers of the looming budget deficits; but ity and employment were expected to expand at at the same time the events of recent weeks a moderate rate this year and that the pace of the illustrate the great difficulties of reaching a conrecovery would be consistent with further prog- sensus on how best to reduce these deficits. ress toward price stability. With the recovery While mindful of these difficulties, I would apparently gaining momentum in recent months, strongly urge you to continue seeking positive I believe that there is an excellent chance that solutions that mitigate the dangers associated this year's economic performance will be at least with persistent, huge structural deficits. as good as was projected in mid-February. Other obstacles to an economic recovery re- At the same time, a number of potential obsta- flect current difficulties in the world economy, cles to sustained economic growth were apparent into which we have become increasingly intewhen the monetary policy report was prepared, grated in the past decade. Poor economic condiand despite the favorable economic develop- tions in foreign nations, as well as a strong dollar, ments of the past few months, those obstacles have limited U.S. exports in the past two years still confront us today. Foremost among these is and have contributed importantly to the loss of the prospect that federal budget deficits will jobs in several of our basic industries. This persist at very substantial levels in the years external drag on our economy, if it were to ahead, even as the economy moves well into an continue, would be an impediment to renewed expansion. The federal deficit in the current expansion in the U.S. economy. Perhaps an even fiscal year is expected to exceed 6 percent of more serious development is that the prolonged gross national product, and unless constructive period of slow growth worldwide has exacerbataction is taken, this share will remain extremely ed debt-servicing problems in the developing large in the years ahead. In part because of these nations and is causing a rise in protectionist prospective megadeficits, intermediate- and sentiment in the industrial nations. The dangers long-term interest rates remain high relative both inherent in this world economic situation are to their historical levels and to current inflation substantial; but they are not insurmountable, and rates, and financial markets remain unsettled, I remain hopeful that we can deal with them reflecting concerns that the deficits will keep successfully through the cooperative efforts of pressures on interest rates and eventually lead to private and public institutions. a renewed surge of price inflation. So long as we make progress toward solving Concern about a budget-induced resurgence of these difficulties, both at home and in the interinflation is symptomatic of a more widespread national arena, the most likely outcome for our and still-persistent fear that inflation has been economy will be that of expanding activity and brought under control only temporarily and that declining unemployment. Those gains, of course, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

414 Federal Reserve Bulletin • June 1983 may not be steady from month to month and will The concept of structural unemployment is not show up evenly in all sectors. Indeed, be- obviously a useful one in that it seeks to identify cause of the stresses and uncertainties spawned that portion of total unemployment that is less by many years of high inflation and slow growth, related to the normal workings of the business many businesses will likely be hesitant to expand cycle and for which special programs that seek to investment and employment until there are more attain a better match between workers and jobs convincing signs that the recovery will prove might prove effective. lasting. Unemployment, therefore, will probably Structural unemployment has long been a still be at a high level at the end of this year. problem among certain groups—teenagers, for What matters most, though, is not the pace of example—who often lack the training needed in a the recovery in its first few months, but whether rapidly changing labor force. But it also arises as we can achieve a broad-based and sustained patterns of labor demand shift in association with expansion; and it is to that end that our current such factors as changing population patterns, policies must be directed. Monetary and fiscal technological advances, and the increased compolicies must necessarily share responsibility for petitiveness in international markets. Typically, the long-run state of the economy, but at the these structural changes occur gradually, with same time we should be fully aware of the diminished employment in some regions and particular ways in which monetary policy can industries being offset by an expansion of job influence the economy and of the ways in which opportunities in other areas. Because it takes its influence is limited. time for dislocated workers to obtain new train- Economic analysis shows rather convincingly, ing, to relocate, or to revise their wage expecta- I believe, that monetary policy can be a contrib- tions, the spells of unemployment for these uting factor determining the rate of growth in workers tend to be particularly long. nominal income, but that there is no certainty In practice, unfortunately, there has never that a particular monetary policy will have the been a clear-cut analytical or statistical distincintended effect on real economic activity and tion between structural unemployment and cycliemployment, particularly in the long run. One of cal unemployment, and attempting to apply the the lessons learned in the past decade is that distinction is especially difficult in the current there is no reliable trade-off between inflation period. It may well be, for instance, that strucand unemployment; and because the dangers of tural change has occurred at an unusually rapid inflation were neglected far too long, the process pace in recent years, and that some industries of moving back toward a more stable price will continue to fall well short of their previous environment has become lengthy and costly. peak levels of activity, even with a healthy and We would all agree, I think, that what we want sustained economic recovery. Presumably, some ultimately for our citizens is an environment of of the workers displaced from those industries rising real incomes and expanding job opportuni- will discover new employment opportunities in ties. I am convinced that the best way the sectors that are expanding, such as the high- Federal Reserve can help achieve that end is by technology industries. But such employment working to establish the kind of noninflationary shifts take time, and there is legitimate concern economic expansion that can be sustained for a about whether the new industries can absorb long period. Given an economy in which there is expeditiously the workers dislocated from deconfidence of continued price stability, a steady clining industries, especially given differences in rise in employment and in living standards is geographic location and required job skills. likely to follow. Our historical experience suggests that a por- There remain, Mr. Chairman, the difficult tion of today's unemployment problem—probaquestions of the extent to which the present bly a sizable portion—can best be alleviated recovery might reduce unemployment and, con- through macroeconomic policies designed to enversely, the extent to which "structural," as well courage a sustainable recovery in activity, and as "frictional," unemployment would still per- some of the problems that now appear structural sist even when the economy has returned to its may disappear as activity recovers. Neverthelong-run noninflationary growth path. less, it appears that a significant unemployment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 415 problem is likely to persist even in a steadily In conclusion, Mr. Chairman, monetary policy expanding economy. In the late 1970s, for in- best serves by continuing to be focused on stance, the unemployment rate dipped only fostering a lasting expansion in business activity slightly below the 6 percent mark, even after four within the framework of continued progress years of economic expansion, and at present it against inflation. At the same time we recognize does not seem likely that the rate will drop back fully our responsibilities in promoting safety and to that level any time soon. Indeed, the difficul- soundness in the financial markets and in supties of reducing unemployment in the period porting a strengthening of the international finanahead may be exacerbated by the deep-seated, cial system. This nation has experienced the and perhaps irreversible, changes that are affect- difficult adjustment process of restructuring for a ing many of our primary industries. productive, less inflationary economy after a Unfortunately, monetary and fiscal policies decade of low productivity and destructive inflaare ill-equipped to deal with the special problems tionary pressures. The human and economic of structural unemployment. However, over costs of this disinflation process have been high. time a number of programs have evolved to We cannot step back now from our commitments address the difficulties of the structurally unem- and thus jeopardize the gains that we have garployed. The approaches taken have included nered to date. The health and sustainability of training and educational programs, relocation the economic recovery depend, of course, not assistance, and special job-creating policies. We only on monetary policy, but also on fiscal are still learning whether some of these ap- policy, in particular on whether policymakers proaches, when carefully crafted to encompass can reduce the dangers of massive out-year budthe cooperative actions of business, labor, and get deficits. With a responsible fiscal policy to government, can contribute to an easing of the complement the monetary policies now in place, unemployment problems that confront us. A I am confident that the recovery can prove a particular challenge for the period ahead will be durable one, associated with rising living stanto adapt these approaches so as to best aid those dards and increased employment. • workers displaced by the rapid changes now occurring in our industrial sector. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

416 Announcements NOMINATIONS FOR APPOINTMENTS TO investors as to the policies and procedures the CONSUMER ADVISORY COUNCIL Board will follow in carrying out its responsibilities under the act. The regulations also incorpo- The Federal Reserve Board has announced that rate an exemption from the collateral requireit is seeking nominations of qualified individuals ments of section 23 A of the Federal Reserve Act for eight appointments to its Consumer Advisory for certain transactions between a bank and an Council to replace members whose terms expire affiliated export trading company to finance on December 31, 1983. trade in goods by the export trading company. Nominations should be submitted in writing to Consistent with the purposes and objectives of Dolores S. Smith, Assistant Director, Division of the BESA, the regulations define an export trad- Consumer and Community Affairs, Board of ing company as one that is exclusively engaged Governors of the Federal Reserve System, in activities related to international trade and that Washington, D.C. 20551, and must be received derives more than half its revenues from the no later than August 5, 1983. Nominations export of, or facilitiating the export of, goods or should include the name, address, and telephone services produced in the United States by pernumber of the nominee; past and present posi- sons other than the export trading company or its tions held; and special knowledge, interests, and subsidiaries. If the revenues test is not met over experience related to consumer financial mat- a two-year period, the company will be expected ters. to provide an explanation and adopt and imple- The Consumer Advisory Council was estab- ment a plan to meet the requirement. The regulalished by the Congress in 1976, at the suggestion tion defined revenues as including net sales reveof the Board, to advise the Board on the exercise nues from trading of goods by the company and of its duties under the Consumer Credit Protec- gross revenues from all other activities of the tion Act and on other consumer-related matters. company. Under these regulations, an export The Council meets three times a year. trading company in which a banking organization invests can engage in a broad range of services, including but not limited to consulting, market- REGULATION K: AMENDMENTS ing, warehousing, freight forwarding, certain types of insurance activities, and taking title to The Federal Reserve Board issued on June 2, goods, when these activities serve to facilitate 1983, regulations implementing the Bank Export trade in goods and services produced by others. Services Act (BESA) authorizing investments in The BESA, in providing for Federal Reserve export trading companies. The BESA is part of review of investments in export trading compathe Export Trading Company Act of 1982. nies by eligible banking organizations, estab- Investment in export trading companies may lishes expedited procedures requiring 60 days' be made by bank holding companies directly, or prior written notice to the Board of an investindirectly through an Edge or Agreement corpo- ment in an export trading company. If the Board ration subsidiary, but not through a bank. does not disapprove the investment within this The regulations, which are amendments to time (which the Board may extend 30 days if it Regulation K (International Banking Opera- needs additional information), the investment tions), are limited in scope and are primarily may be made. designed to clarify ambiguities in the law and to The regulations provide for a further notificaprovide key definitions and basic guidance to tion when the export trading company expands Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 417 into new activities that would alter the funda- posed investment, also address the capital ademental character of the company's operation. quacy of the holding company. Under the regulations, companies filing notifications of investment will follow the checklist of information used for Regulation K notifications REGULATION T: REVISION of proposed investments. Notification procedures will not differ for in- The Federal Reserve Board has adopted a comvestments in joint venture export trading compa- pletely revised and simplified version of Regulanies. The regulations prohibit lending to a part- tion T (Credit by Brokers and Dealers). ner in a joint venture on terms more favorable The revision of Regulation T, one of the than terms available to others. This applies to Board's four regulations concerning margin repartners with at least 10 percent interest in the quirements, is part of the Board's Regulatory joint venture export trading company. Improvement Program. Under this program, the The Board also determined that, after more Board is reviewing all of its regulations to update experience is gained with export trading compa- them, simplify their language, eliminate obsolete nies and within at least one year, it will consider or unneeded language or provisions, and to lightwhether a general consent procedure should be en the burden of compliance. The revised regulaprovided for certain investments in export trad- tion has been shortened approximately a third. ing companies. In 1982, the Board adopted several major The Board may disapprove proposed invest- substantive changes to Regulation T and pubments to prevent unsafe or unsound banking lished for comment a proposal to completely practices, undue concentration of resources, de- revise the regulation. The final regulation, as creased or unfair competition or conflicts of adopted after consideration of comment reinterest, material adverse effects on bank subsid- ceived, includes the following significant iaries of bank holding companies, or failure to changes: file accurate or material information. • Conformation of Regulation T to take cogni- Notifications must include information as to zance of new instruments—options on foreign the leveraging characteristics of the export trad- currency that are traded on securities exchanges ing company. The Board stated that capital ade- and options on certificates of deposit and on quacy is a critical determinant of the financial stock indexes—that came within the Board's strength of an export trading company and its authority to set margins as a result of recent ability to withstand unexpected adverse develop- legislation. ments so as not to affect the financial resources • Setting the margin level of these instruments of the parent organization or the safety or sound- as the amount specified by the rules of the ness of affiliated banks. Accordingly, the Board national securities exchange on which the option will consider the capital adequacy of an export is traded, provided that all such rules have been trading company as an important factor to be approved by the Securities and Exchange Comtaken into account in determining whether to mission. disapprove a proposed bank holding company • Authorizing margin credit on over-theinvestment. After further experience with these counter (OTC) corporate debt securities, with at companies, the Board will also consider whether least $25 million outstanding at the time of origito establish capital adequacy guidelines for ex- nal issue rather than at the time of the extension port trading companies. of the credit. The Board noted that bank holding company • Permission to use convertible or exchangeinvestment in export trading companies also able securities as a proxy for the related security raises the need to review the adequacy of the when call options are written in a cash account. capital of the parent organization. When a bank • Provisions that permit a clearing agency to holding company seeks to expand its activities accept as the required deposit any margin securiand operations through an export trading com- ties underlying options issued by the clearing pany, the Board will, in evaluating the pro- agency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

418 Federal Reserve Bulletin • June 1983 • Revision of rules for extending credit to moved for reasons such as listing on a national option specialists, to permit a "good faith" mar- securities exchange or acquisition of the compagin instead of the 25 percent margin on long and nies by another firm. short positions in stocks underlying the option. The Board monitors the market activity of all • Expansion of the class of brokers and dealers OTC stocks to determine which stocks meet the who may make loans to other brokers and deal- requirements for inclusion and continued incluers, as well as authorization for them to finance sion on the list of OTC margin stocks and periodpositions with other brokers and dealers. ically revises the list. • Authorization for a clearing broker to main- Margin regulations generally limit the amount tain separate margin accounts for a single person of credit a person or firm may obtain to buy, or who is introduced by different brokers. Introduc- carry, securities. Stocks on the list of OTC ing brokers may maintain separate accounts for margin stocks are subject to the same margin the same person if the accounts are cleared by requirements (currently 50 percent) as stocks different clearing brokers. In addition, separate listed on national stock exchanges. These reaccounts may also be established for the same quirements mean that a person or firm buying a person by a broker or dealer when the broker or stock on credit must make a down payment equal dealer or a third-party investment advisor has to at least 50 percent of the purchase price of the investment discretion. stock and may obtain credit for the remaining 50 • Consolidation along functional lines of the 11 percent. types of accounts currently required to be main- Margin requirements on OTC stocks apply tained by brokers and dealers into 7 types of only to credit extended on the date the stock accounts. becomes an OTC margin stock and thereafter. • Changes in terminology, throughout the reg- Credit extended by banks to purchase or carry ulation, from "maximum loan value/adjusted OTC stocks before they appeared on the list debit balance" to the use of "equity/margin becomes subject on that date to the retention and requirements." withdrawal requirements of the Board's Regula- The new regulation will go into effect on tion U (Credit by Banks for the Purpose of November 21, 1983. However, creditors may Purchasing or Carrying Margin Stocks) if the begin to operate under its terms, at their option, credit is collateralized by any margin stock. Such as early as June 20, 1983. credit previously extended by lenders subject to The Board's revised Regulation T is available, Regulation G (Securities Credit by Persons Other upon request, from the Federal Reserve Banks. Than Banks, Brokers, or Dealers) becomes subject to retention and withdrawal requirements if collateralized by "margin securities." REVISED LIST OF OTC STOCKS It is unlawful for any person to cause any representation to be made that inclusion of a The Federal Reserve Board has published a security on this list indicates that the Board or revised list of over-the-counter (OTC) stocks the Securities and Exchange Commission has in that are subject to its margin regulations, effec- any way approved such security or any transactive June 20, 1983. tion therein. Any references to the Board in The list supersedes the revised list of OTC connection with the list or any securities thereon margin stocks that was issued July 26, 1982, and in any advertisement or similar communication is the amendments to that list effective on October unlawful. The list is published by the Board for 18, 1982, and February 22, 1983. Changes that the information of lenders and the general public. have been made in the list, which now includes 1,649 OTC stocks, are the following: 96 stocks have been included for the first time; 19 stocks PROPOSED ACTIONS previously on the list have been removed for substantially failing to meet the requirements for The Federal Reserve Board has proposed for continued listing; and 24 stocks have been re- public comment revisions of its rules regarding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 419 loans by state member banks to certain insiders, SYSTEM MEMBERSHIP: to implement recent legislative changes. Com- ADMISSION OF STATE BANKS ments must be received by June 20, 1983. The following banks were admitted to member- The Board also proposed for public comment a ship in the Federal Reserve System during the complete overhaul and updating of the Board's period May 11, 1983, through June 10, 1983: Regulation Y (Bank Holding Companies and Colorado Change in Bank Control). The Board requested Eagle Alpine Bank comments by July 18, 1983. Rangely Rio Blanco State Bank Ohio Columbus Independent State Bank of Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

421 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MARCH 28-29, 1983 al rate of about 6.1 million units, the same as in the fourth quarter. 1. Domestic Policy Directive Spending for business fixed investment has remained weak in recent months. Shipments of Based on partial information available for the nondefense capital goods fell sharply in January first quarter, it appeared that real GNP rose and edged down further in February, and new moderately in the first three months of the year, orders dropped appreciably in February after following a decline at an annual rate of about 1 firming for several months. Outlays for nonresipercent in the fourth quarter of 1982. The turn- dential construction increased in January, but around in economic activity reflected a consider- high vacancy rates for office buildings and the able slowing in the pace of inventory liquidation. reduced drilling activity associated with declin- Meanwhile, private final sales in real terms, ing oil prices apparently have damped such exwhich had risen in the fourth quarter, continued penditures recently. The Department of Comto increase. The rise in average prices, as mea- merce survey taken in late January and February sured by the fixed-weight price index for gross indicated that in 1983 business outlays for plant domestic business product, slowed further. and equipment would decline about PA percent Final sales were sustained by a marked in nominal terms, about the same as in 1982. strengthening in housing activity in early 1983. Nonfarm payroll employment rose about Private housing starts rose to an average annual 150,000 on balance over January and February, rate of 1.7 million units in January and February, after an extended period of declines. The monthup nearly 40 percent from the pace in the fourth to-month employment figures, which showed a quarter. Newly issued permits for residential substantial rise in January and a decline in Febconstruction also rose substantially over the two- ruary, were distorted by unusual weather patmonth period. Sales of new homes increased in terns. But employment in manufacturing—par- January, the latest month for which data were ticularly in the auto and related metals available; although sales of existing homes industries—increased in both months. The civildipped in February, they were appreciably high- ian unemployment rate was unchanged in Februer in the first two months combined than in the ary at 10.4 percent. Industrial production has fourth quarter. risen at an annual rate of about 7 VA percent since Other elements of final sales were not quite so its trough in November, less than the average strong on balance as in the fourth quarter of last pace in the early stages of previous cyclical year. Personal consumption expenditures contin- recoveries. ued to expand in early 1983, but at a slower rate The producer price index for finished goods than in the previous quarter. The nominal value fell nearly 1 percent over the first two months of of retail sales fell in January and February, the year, reflecting sharp declines in prices of primarily reflecting declines in sales at automo- energy-related items. The consumer price index tive outlets, gasoline stations, and furniture and was virtually unchanged over the period, as a appliance stores, although sales at general mer- substantial drop in prices of gasoline and other chandise and apparel stores rose appreciably petroleum products was about offset by moderfrom their level in the fourth quarter. Sales of ate increases in prices of most other commodities new domestic automobiles continued at an annu- and services. Food prices have changed little Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

422 Federal Reserve Bulletin • June 1983 thus far in 1983 and in February were only 2 M2 grew at an estimated annual rate of about percent above their level a year earlier. 24 percent in February, only a little below the The advance in the index of average hourly exceptional pace in January, as its growth conearnings has slowed further in recent months. tinued to be greatly affected by shifts of funds With productivity apparently continuing to im- from market instruments and other non-M2 prove in early 1983, cost pressures in the non- sources into the new money market deposit farm business sector have abated further. accounts (MMDAs) included in M2. M3 grew at In foreign exchange markets the trade-weight- annual rates of about 12 and 13 ¥2 percent in ed value of the dollar had risen about 2 percent January and February respectively. However, on balance since the Committee's meeting in growth in both of the broader aggregates ap- February. The U.S. merchandise trade deficit peared to have decelerated substantially during declined marginally in January. Exports rose March. The deceleration reflected in part a somewhat and total imports continued at about marked slowing in the volume of funds shifted the fourth-quarter rate, as oil imports dropped into MMDAs from market instruments and apsharply while non-oil imports strengthened. parently also a moderation in the underlying At its meeting on February 8-9, 1983, the growth of the nontransaction component of these Committee established the following ranges for aggregates. Growth in Ml accelerated to an growth of the monetary aggregates: for the peri- extraordinary annual rate of about 22 percent in od from February-March of 1983 to the fourth February, and, on the basis of preliminary data, quarter of 1983, 7 to 10 percent at an annual rate was estimated to have remained rapid in March, for M2, taking into account the probability of though probably slowing somewhat from the some residual shifting into that aggregate from February rate. An acceleration in growth of non-M2 sources; and for the period from the NOW accounts and a large increase in holdings fourth quarter of 1982 to the fourth quarter of of currency contributed to the expansion in Ml. 1983, 6V2 to 9V2 percent for M3, which appeared The income velocity of Ml apparently declined to be less distorted by shifts associated with new sharply in the first quarter, continuing the trend deposit accounts. For the same period, a tenta- that became evident in the course of 1982. tive range of 4 to 8 percent was established for Total and nonborrowed reserves declined ap- Ml, assuming that Super NOW accounts would preciably in February, but turned up in March. draw only modest amounts of funds from sources The behavior of reserves did not reflect the outside Ml and that the authority to pay interest strength in the aggregates largely because reon transaction accounts would not be extended quired reserves at member banks were lowered beyond currently eligible accounts. An associat- by shifts out of personal savings and small time ed range of growth for total domestic nonfinan- deposits into nonreservable MMDAs and there cial debt was estimated at 8V2 to IIV2 percent. was an associated runoff of large-denomination At the February meeting, the Committee CDs. The monetary base grew considerably agreed that the near-term outlook for growth in more than the reserve measures, owing to the the monetary aggregates remained subject to rapid expansion of currency in circulation. Adunusual uncertainties and that an appropriate justment borrowing (including seasonal borrowassessment of such growth would need to take ing) fluctuated between $140 million and $600 account of the distortions that might continue to million over the intermeeting period. Excess be created by the introduction of new deposit reserves were also volatile and were somewhat accounts. Consequently, the Committee decided higher than usual on average; strong demands for that open market operations in the period until excess reserves at times appeared to be related this meeting should be directed toward maintain- to slow responses by banks to reductions in ing the existing degree of restraint on reserve reserve requirements. Federal funds continued positions. It was agreed that lesser restraint to trade near the 8V2 percent discount rate over would be acceptable in the context of apprecia- most of the intermeeting interval, though rising ble slowing of growth in the monetary aggre- to around 83A percent in the week prior to this gates, to or below the paths implied by the long- meeting. term ranges. Most short-term market interest rates rose Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 423 about Vs percentage point over the intermeeting ic outlook and expressed differing views regardinterval, while bond rates declined about Vs to V2 ing the direction of possible deviations from the percentage point. The average rate on new com- staff projection. mitments for fixed-rate conventional home mort- Some members saw the staff projection as the gage loans at savings and loan associations de- middle of a plausible range of possible outcomes clined 20 basis points further. At the end of for 1983, given the outlook for fiscal and mone- February, the prime rate charged by most com- tary policy. Several members believed, however, mercial banks on short-term business loans was that the risks of a deviation were in the direction reduced by Vi percentage point to IOV2 percent. of a shortfall. These members stressed potential Total credit outstanding at U.S. commercial obstacles to a vigorous recovery. These included banks, which had grown at an annual rate of the possibility of further unsettlement in internaabout 6 percent in the fourth quarter of 1982, tional and domestic financial markets, the outexpanded at an average annual rate of about 10 look for poor export markets, and the prospects percent over the first two months of this year. for continuing weakness in business investment, Banks acquired a sizable volume of securities, at least over the quarters immediately ahead, particularly Treasury securities, and also ex- against the backdrop of low capacity utilization panded their loans somewhat. Very preliminary rates in industry and recent overbuilding of data suggested that the total debt of domestic many types of commercial properties. Reference nonfinancial sectors was increasing in early 1983 was also made to the retarding impact of relativeat a rate near the lower end of the Committee's ly high real interest rates, and some members estimated range for the year. There was a sharp expressed the view that an appreciable rise in increase in the share of debt financed through interest rates, if such a rise were to occur, could depository institutions, which had experienced greatly inhibit the recovery in interest-sensitive massive inflows of funds as a result of aggressive sectors of the economy, such as housing and marketing of the newly authorized MMDAs. automobiles, which had tended to lead the recov- Staff projections presented at this meeting ery thus far. indicated that real GNP would probably grow at A differing view was expressed, which a moderate pace throughout 1983, with unem- stressed the possibility of a stronger recovery ployment remaining high. Private final purchases that, like many previous recoveries in the postwere projected to pick up somewhat in the latter war period, would tend to gather momentum as it half of the year, partly in response to the third developed. In support of this view, it was noted phase of the tax cut. It was anticipated that the that private final purchases had risen appreciably liquidation of business inventories would end by in the fourth and first quarters, and such purmidyear and that some restocking of depleted chases could strengthen markedly further in reinventories would occur in the second half. The action to the federal tax cut at midyear and rise in the average level of prices was expected to anticipated improvement in business spending. remain moderate, even as economic recovery Moreover, cutbacks in inventories had been unproceeded over the balance of 1983, given the usually pronounced during the recession, so that favorable outlook for oil prices and the prospects gains in consumer spending would tend to be for continued limited increases in unit labor translated directly into increased production. costs. Members referred to the favorable outlook for In the Committee's discussion of the economic prices in 1983, partly associated with an imsituation and outlook, the members agreed that a proved trend in productivity and reduced wagerecovery in economic activity appeared to be cost pressures, but some members also comunder way, although several commented that the mented that the longer-run outlook for inflation evidence available thus far was too fragmentary and for a sustainable recovery would be influto permit a firm evaluation of the strength of the enced greatly by progress in holding down future upturn. While the staff projection of moderate federal deficits and by success in achieving the growth for 1983 as a whole was cited as a Committee's objectives for monetary growth. It reasonable expectation, members commented on was noted that the effects of an expansionary the many uncertainties surrounding the econom- federal budget would be offset to some extent by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

424 Federal Reserve Bulletin • June 1983 efforts of state and local governments to curb recovery. The view was also expressed that a expenditures and to raise taxes. On balance, sustainable recovery might not develop at the however, it appeared that markets remained ap- present levels of nominal and real interest rates. prehensive about the outlook for the federal On the other hand, no member expressed sentibudget, and that concern was reflected in contin- ment for a substantial easing in the existing ued pressures on interest rates, especially in degree of reserve restraint in the absence of clear long-term debt markets. evidence of a pronounced slowing in monetary In discussing a policy course for the weeks growth or of indications that the economic recovimmediately ahead, Committee members recog- ery was faltering. nized that substantial uncertainties affected both While a few members indicated a preference the economic outlook and the interpretation of for leaning in the direction of slightly more, or the monetary aggregates. Concern was ex- slightly less, restraint on reserve positions in the pressed about the implications of the rapid period immediately ahead—depending on their growth in the monetary aggregates, particularly assessment of the economic outlook, credit conif it should continue. However, it was also noted ditions, and the monetary aggregates—all of the that the rapid expansion of recent months, given members found acceptable a policy calling for the distortions related to various institutional maintaining generally the current degree of rechanges, probably did not have the significance serve restraint, pending the availability of further for future economic and price developments that evidence on the behavior of the monetary aggreit might have had in the past. It was generally gates and on the economic situation. The memrecognized that much of the recent growth in the bers anticipated that such a policy course would broad aggregates, especially M2, reflected shifts be consistent with substantial slowing in the of investment preferences by individuals away growth of M2 and M3 to annual rates of about 9 from market instruments toward the new percent and 8 percent respectively over the peri- MMDAs, given the very attractive rates being od from March to June; these growth rates offered on the accounts by depository institu- assumed that shifts of funds into the new deposit tions in a highly competitive environment. Note accounts from market instruments would have was also taken of the marked slowing in mone- only a relatively small further impact on the tary growth that appeared to be in train for broad aggregates—perhaps no more than a per- March, and of a staff analysis suggesting that centage point or so in the case of M2. The underlying growth of the broad aggregates—as Committee also expected that Ml growth at an well as growth in Ml—might be moderate in the annual rate of about 6 to 7 percent over the threemonths ahead as the lagged effects of earlier month period would be associated with its objecdeclines in market interest rates dissipated. With tives for the broader aggregates, assuming basirespect to Ml, most members felt that persis- cally no distortion in Ml on balance from the tence of its unusually sharp decline in velocity newly introduced accounts. Should these asearly this year cast doubt on the aggregate as a sumptions about distortions from the new acprincipal guide for policy at this time; however, a counts prove to be incorrect, it was understood view was also expressed in favor of giving Ml that appropriate adjustments would have to be more weight in the formulation of the Commit- made in the monetary growth objectives. tee's policy. The Committee members agreed that lesser In evaluating the overall financial situation, it restraint on reserve positions would be acceptwas also pointed out that the strength of the able in the context of more pronounced slowing aggregates needed to be judged in the context of in the growth of the monetary aggregates, after the apparently moderate expansion of domestic taking account of any distortions relating to the nonfinancial debt and of the relatively high level introduction of new deposit accounts, or of eviof real interest rates. With the economic recov- dence of a weakening in the pace of the economic ery still in its early and fragile stages, the view recovery. If monetary expansion proved to be was expressed that strong upward pressures on appreciably higher than expected, without being interest rates would involve an unacceptable risk clearly explained by the effects of ongoing instiof unduly retarding, and perhaps aborting, the tutional changes, it was understood that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 425 Committee would consult about the desirability of new deposit accounts on growth rates of monetary under the prevailing circumstances of any sub- aggregates cannot be determined with a high degree of stantial further restraint on bank reserve posi- confidence; and that the availability of interest on large portions of transaction accounts, declining inflations. It was further understood that the intertion, and lower market rates of interest may be reflectmeeting range for the federal funds rate, which ed in some changes in the historical trends in velocity. provides a mechanism for initiating consultation A substantial shift of funds into M2 from market of the Committee, would be retained at 6 to 10 instruments, including large certificates of deposit not percent. included in M2, in association with the extraordinarily rapid build-up of money market deposit accounts, has At the conclusion of its discussion, the Comdistorted growth in that aggregate during the first mittee issued the following domestic policy di- quarter. rective to the Federal Reserve Bank of New In establishing growth ranges for the aggregates for York: 1983 against this background, the Committee felt that growth in M2 might be more appropriately measured after the period of highly aggressive marketing of The information reviewed at this meeting suggests money market deposit accounts has subsided. The that real GNP rose moderately in the first quarter, Committee also felt that a somewhat wider range was after a decline in the fourth quarter; the turnaround appropriate for monitoring Ml. Those growth ranges reflects a considerable slowing in inventory liquida- will be reviewed in the spring and altered, if approprition. Private final sales apparently increased only ate, in the light of evidence at that time. slightly less than in the fourth quarter with housing With these understandings, the Committee estabactivity strengthening further. Business fixed invest- lished the following growth ranges: for the period from ment has remained weak. Nonfarm payroll employ- February-March of 1983 to the fourth quarter of 1983, ment rose on balance in January and February, after 7 to 10 percent at an annual rate for M2, taking into an extended period of declines; the civilian unemploy- account the probability of some residual shifting into ment rate was unchanged in February at 10.4 percent. that aggregate from non-M2 sources; and for the In early 1983 the rise in average prices and the advance period from the fourth quarter of 1982 to the fourth in the index of average hourly earnings have slowed quarter of 1983, 6V2 to 9Vi percent for M3, which further. appeared to be less distorted by the new accounts. For The weighted average value of the dollar against the same period a tentative range of 4 to 8 percent was major foreign currencies rose somewhat on balance established for Ml, assuming that Super NOW acbetween early February and late March. The U.S. counts would draw only modest amounts of funds from merchandise trade deficit declined marginally in Janu- sources outside Ml and assuming that the authority to ary. pay interest on transaction balances is not extended M2 continued to grow at an exceptional rate in beyond presently eligible accounts. An associated February and M3 also expanded at a rapid pace, but range of growth for total domestic nonfinancial debt growth in both of the broader aggregates appears to be was estimated at 8V2 to 11V* percent. decelerating substantially in March. The deceleration In implementing monetary policy, the Committee reflects in part the marked slowing in growth of money agreed that substantial weight would be placed on market deposit accounts (MMDAs) in recent weeks behavior of the broader monetary aggregates, expectand apparently also a moderation in the underlying ing that distortions in M2 from the initial adjustment to growth of these aggregates, abstracting from shifts the new deposit accounts will abate. The behavior of from market instruments. Ml has expanded rapidly Ml will be monitored, with the degree of weight placed since late January, largely reflecting accelerated on that aggregate over time dependent on evidence growth in NOW accounts. Growth in debt of domestic that velocity characteristics are resuming more prenonfinancial sectors appears to have been moderate in dictable patterns. Debt expansion, while not directly the first quarter. Short-term interest rates have risen targeted, will be evaluated in judging responses to the somewhat since early February while long-term rates, monetary aggregates. The Committee understood that including mortgage rates, have declined. policy implementation would involve continuing ap- The Federal Open Market Committee seeks to fos- praisal of the relationships between the various meater monetary and financial conditions that will help to sures of money and credit and nominal GNP, including reduce inflation further, promote a resumption of evaluation of conditions in domestic credit and foreign growth in output on a sustainable basis, and contribute exchange markets. to a sustainable pattern of international transactions. For the short run, the Committee seeks to maintain At its meeting in February the Committee established generally the existing degree of restraint on reserve growth ranges for monetary and credit aggregates for positions, anticipating that would be consistent with a 1983 in furtherance of these objectives. The Commit- slowing from March to June in growth of M2 and M3 to tee recognized that the relationships between such annual rates of about 9 and 8 percent, respectively. ranges and ultimate economic goals have been less The Committee expects that Ml growth at an annual predictable over the past year; that the current impact rate of about 6 to 7 percent would be consistent with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

426 Federal Reserve Bulletin • June 1983 its objectives for the broader aggregates. Lesser re- greater frequency because of the longer intervals straint would be acceptable in the context of more between Committee meetings and the increased pronounced slowing of growth in the monetary aggresize of the net variation in market factors affectgates relative to the paths implied by the long-term ing reserves. In 1981 and 1982, such temporary ranges (taking account of the distortions relating to the introduction of new accounts), or indications of a increases had been authorized in half of the weakening in the pace of economic recovery. The intermeeting periods. A permanent increase in Chairman may call for Committee consultation if it the limit to $4 billion would reduce the number of appears to the Manager for Domestic Operations that occasions requiring special Committee action, pursuit of the monetary objectives and related reserve while still calling to the Committee's attention paths during the period before the next meeting is likely to be associated with a federal funds rate persis- needs for particularly large changes. The Comtently outside a range of 6 to 10 percent. mittee concurred in the Manager's view that such an increase would be appropriate. Votes for this action: Messrs. Volcker, Solomon, The Committee also approved the deletion of Gramley, GuflFey, Keehn, Martin, Morris, Partee, paragraph 2 of the authorization, which had Rice, Roberts, Mrs. Teeters, and Mr. Wallich. authorized, under certain conditions, the direct Votes against this action: None. lending of securities held in the System account to the U.S. Treasury and the purchase of special short-term certificates of indebtedness directly 2. Review of Continuing Authorizations from the Treasury. Paragraph 2 had been in a state of de facto suspension since June 1981 The Committee followed its customary practice when the statutory authority on which it was of reviewing all of its continuing authorizations based expired. In the past, the Congress had and directives at this first regular meeting of the enacted the legislation for limited periods and Federal Open Market Committee following the occasionally had allowed it to lapse prior to its election of new members from the Federal Rerenewal. Since no legislation to renew the auserve Banks to serve for the year beginning thority was under consideration, the Committee March 1, 1983. The Committee reaffirmed the concurred in a staff recommendation to delete authorization for foreign currency operations, paragraph 2 and renumber the remaining parathe foreign currency directive, and the procedurgraphs in the authorization.1 al instructions with respect to foreign currency Accordingly, effective March 28, 1983, the operations in the forms in which they were authorization for domestic open market operacurrently outstanding. tions was amended to read as follows: Votes for these actions: Messrs. Volcker, Solomon, Gramley, GuflFey, Keehn, Martin, Morris, 1. The Federal Open Market Committee authorizes Partee, Rice, Roberts, Mrs. Teeters, and Mr. Wal- and directs the Federal Reserve Bank of New York, to lich. Votes against these actions: None. the extent necessary to carry out the most recent domestic policy directive adopted at a meeting of the Committee: (a) To buy or sell U.S. Government securities, 3. Authorization for Domestic Open including securities of the Federal Financing Bank, Market Operations and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States in the open market, from or to On the recommendation of the Manager for securities dealers and foreign and international ac- Domestic Operations, System Open Market Accounts maintained at the Federal Reserve Bank of count, the Committee amended paragraph 1(a) of the authorization for domestic open market operations to raise from $3 billion to $4 billion the 1. The following conforming amendments to other Committee documents were also approved: deletion of section limit on intermeeting changes in System account 270.4(d) of the Regulation Relating to Open Market Operaholdings of U.S. government and federal agency tions of Federal Reserve Banks and redesignation of the securities. The Manager noted that in recent remaining paragraph as 270.4(d); and deletion of paragraph 2 of the Resolution of Federal Open Market Committee Authoyears the Committee had found it necessary to rizing Certain Actions by Federal Reserve Banks during an authorize temporary increases in the limit with Emergency, and renumbering of remaining paragraphs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 427 New York, on a cash, regular, or deferred delivery ties clearing arrangements conducted through a Federbasis, for the System Open Market Account at market al Reserve Bank, under such instructions as the prices, and, for such Account, to exchange maturing Committee may specify from time to time. U.S. Government and Federal agency securities with 3. In order to ensure the effective conduct of open the Treasury or the individual agencies or to allow market operations, while assisting in the provision of them to mature without replacement; provided that the short-term investments for foreign and international aggregate amount of U.S. Government and Federal accounts maintained at the Federal Reserve Bank of agency securities held in such Account (including New York, the Federal Open Market Committee auforward commitments) at the close of business on the thorizes and directs the Federal Reserve Bank of New day of a meeting of the Committee at which action is York (a) for System Open Market Account, to sell taken with respect to a domestic policy directive shall U.S. Government securities to such foreign and internot be increased or decreased by more than $4.0 national accounts on the bases set forth in paragraph billion during the period commencing with the opening 1(a) under agreements providing for the resale by such of business on the day following such meeting and accounts of those securities within 15 calendar days on ending with the close of business on the day of the next terms comparable to those available on such transacsuch meeting; tions in the market; and (b) for New York Bank (b) When appropriate, to buy or sell in the open account, when appropriate, to undertake with dealers, market, from or to acceptance dealers and foreign subject to the conditions imposed on purchases and accounts maintained at the Federal Reserve Bank of sales of securities in paragraph 1(c), repurchase agree- New York, on a cash, regular, or deferred delivery ments in U.S. Government and agency securities, and basis, for the account of the Federal Reserve Bank of to arrange corresponding sale and repurchase agree- New York at market discount rates, prime bankers ments between its own account and foreign and interacceptances with maturities of up to nine months at national accounts maintained at the Bank. Transacthe time of acceptance that (1) arise out of the current tions undertaken with such accounts under the shipment of goods between countries or within the provisions of this paragraph may provide for a service United States, or (2) arise out of the storage within the fee when appropriate. United States of goods under contract of sale or expected to move into the channels of trade within a Votes for these actions: Messrs. Volcker, Soloreasonable time and that are secured throughout their mon, Gramley, Guflfey, Keehn, Martin, Morris, life by a warehouse receipt or similar document con- Partee, Rice, Roberts, Mrs. Teeters, and Mr. Walveying title to the underlying goods; provided that the lich. Votes against these actions: None. aggregate amount of bankers acceptances held at any one time shall not exceed $100 million; Subsequently, on May 9-10, 1983, members of (c) To buy U.S. Government securities, obligations the Committee voted to increase from $4 billion that are direct obligations of, or fully guaranteed as to to $5 billion the limit on changes between Comprincipal and interest by, any agency of the United States, and prime bankers acceptances of the types mittee meetings in System Account holdings of authorized for purchase under 1(b) above, from deal- U.S. government and federal agency securities ers for the account of the Federal Reserve Bank of specified in paragraph 1(a) of the authorization New York under agreements for repurchase of such for domestic open market operations, effective securities, obligations, or acceptances in 15 calendar May 10 for the period ending with the close of days or less, at rates that, unless otherwise expressly authorized by the Committee, shall be determined by business on May 24, 1983. competitive bidding, after applying reasonable limitations on the volume of agreements with individual Votes for this action: Messrs. Volcker, Gramley, dealers; provided that in the event Government securi- Guflfey, Keehn, Martin, Morris, Partee, Rice, Robties or agency issues covered by any such agreement erts, Mrs. Teeters, Messrs. Wallich, and Timlen. are not repurchased by the dealer pursuant to the Votes against this action: None. (Mr. Timlen voted agreement or a renewal thereof, they shall be sold in as alternate for Mr. Solomon.) the market or transferred to the System Open Market Account; and provided further that in the event bank- This action was taken on recommendation of ers acceptances covered by any such agreement are the Manager for Domestic Operations. The Mannot repurchased by the seller, they shall continue to be held by the Federal Reserve Bank or shall be sold in ager had advised that since the March meeting, the open market. large net purchases of securities had been under- 2. In order to ensure the effective conduct of open taken to meet reserve needs due to increases in market operations, the Federal Open Market Commit- currency in circulation and required reserves, tee authorizes and directs the Federal Reserve Banks reducing the leeway for further purchases over to lend U.S. Government securities held in the System Open Market Account to Government securities deal- the intermeeting interval to slightly under $1 ers and to banks participating in Government securi- billion. It appeared likely that purchases in ex- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

428 Federal Reserve Bulletin • June 1983 cess of that leeway would be required over the same currencies at the same exchange rate to the remainder of the intermeeting period. ESF. Pursuant to that agreement, the Committee had agreed that the Federal Reserve would be prepared to warehouse for the Treasury or for 4. Agreement with Treasury the ESF up to $5 billion of eligible foreign to Warehouse Foreign Currencies currencies. At this meeting the Committee reaffirmed the agreement on the terms adopted on At its meeting on January 17-18, 1977, the Com- March 18, 1980, with the understanding that it mittee had agreed to a suggestion by the Trea- would be subject to annual review. sury that the Federal Reserve undertake to "warehouse" foreign currencies—that is, to Votes for this action: Messrs. Volcker, Solomon, make spot purchases of foreign currencies from Gramley, GufiFey, Keehn, Martin, Morris, Partee, the Exchange Stabilization Fund (ESF) and Rice, Roberts, Mrs. Teeters, and Mr. Wallich. simultaneously to make forward sales of the Votes against this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

429 Legal Developments COMPLETE REVISION OF REGULATION T seq.). Its principal purpose is to regulate extensions of credit by and to brokers and dealers; it also covers The Board is adopting a completely revised and simpli- related transactions within the Board's authority unfied Regulation T. The new regulation incorporates der the Act. It imposes, among other obligations, changes made in response to comments received on initial margin requirements and payment rules on the complete revision of Regulation T as well as securities transactions. proposals previously published and adopted. The eleven accounts currently required to be maintained by (b) Scope. brokers and dealers will be consolidated into seven (1) This part provides a margin account and seven accounts along functional lines. In addition, the new special purpose accounts in which to record all regulation will facilitate option writing by institutions financial relations between a customer and a crediand permit options clearing agencies to accept, under tor. Any transaction not specifically permitted in a specified conditions, any underlying security as the special account shall be recorded in a margin acrequired Regulation T deposit. count. Effective November 21, 1983, or any earlier date (2) This part does not preclude any exchange, naafter June 20, 1983 at the option of the creditor, the tional securities association, or creditor from impos- Board revises Regulation T as set forth below: ing additional requirements or taking action for its own protection. Part 220—Credit By Brokers And Dealers Section 220.2—Definitions Section 220.1 Authority, purpose, and scope The terms used in this part have the meanings given Section 220.2 Definitions them in section 3(a) of the Act or as defined in this Section 220.3 General provisions section. Section 220.4 Margin account Section 220.5 Margin account exceptions and special (a) "Credit balance" means the cash amount due the provisions customer in a margin account after debiting amounts Section 220.6 Special memorandum account transferred to the special memorandum account. Section 220.7 Arbitrage account Section 220.8 Cash account (b) "Creditor" means any broker or dealer (as defined Section 220.9 Nonsecurities credit account in sections 3(a)(4) and 3(a)(5) of the Act), any member Section 220.10 Omnibus account of a national securities exchange, or any person asso- Section 220.11 Broker-dealer credit account ciated with a broker or dealer (as defined in section Section 220.12 Market functions account 3(a)(18) of the Act), except for business entities con- Section 220.13 Arranging for loans by others trolling or under common control with the creditor. Section 220.14 Clearance of securities Section 220.15 Borrowing by creditors (c) "Customer" includes: Section 220.16 Borrowing and lending securities (1) any person or persons acting jointly: (i) to or for Section 220.17 Requirements for list of OTC margin whom a creditor extends, arranges, or maintains any stocks credit; or (ii) who would be considered a customer Section 220.18 Supplement to Regulation T of the creditor according to the ordinary usage of the trade; Section 220.1—Authority, Purpose, and Scope (2) any partner in a firm who would be considered a customer of the firm absent the partnership relation- (a) Authority and purpose. Regulation T (this part) is ship; and issued by the Board of Governors of the Federal (3) any joint venture in which a creditor participates Reserve System (the Board) pursuant to the Securities and which would be considered a customer of the Exchange Act of 1934 (the Act) (15 U.S.C. § 78a et creditor if the creditor were not a participant. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

430 Federal Reserve Bulletin • June 1983 (d) "Debit balance" means the cash amount owed to (1) "Margin call" means a demand by a creditor to a the creditor in a margin account after debiting amounts customer for a deposit of additional cash or securities transferred to the special memorandum account. to eliminate or reduce a margin deficiency as required under this part. (e) "Delivery against payment," "Payment against delivery," or a "C.O.D. transaction" refers to an (m) "Margin deficiency" means the amount by which arrangement under which a creditor and a customer the required margin exceeds the equity in the margin agree that the creditor will deliver to, or accept from, account. the customer, or the customer's agent, a security against full payment of the purchase price. (n) "Margin excess" means the amount by which the equity in the margin account exceeds the required (f) "Equity" means the total current market value of margin. When the margin excess is represented by security positions held in the margin account plus any securities, the current value of the securities is subject credit balance less the debit balance in the margin to the percentages set forth in section 220.18 (the account. Supplement). (g) "Escrow agreement" means any agreement issued (o) "Margin security" means any registered security, in connection with a call or put option under which a OTC margin stock, OTC margin bond, or any security bank, holding the underlying security, foreign curren- issued by either an open-end investment company or cy, certificate of deposit, or required cash, is obligated unit investment trust which is registered under section to deliver to the creditor (in the case of a call option) or 8 of the Investment Company Act of 1940 (15 U.S.C. accept from the creditor (in the case of a put option) § 80a-8). the underlying security, foreign currency, or certificate of deposit against payment of the exercise price (p) "Nonexempted security" means any security othupon exercise of the call or put. er than an exempted security (as defined in section 3(a)(12) of the Act). (h) "Examining authority" means: (1) the national securities exchange or other self- (q) "Nonmember bank" means a bank that is not a regulatory organization of which a creditor is a member of the Federal Reserve System. member; or (2) if not a member of any such self-regulatory (r) "OTC margin bond" means: organization, the Regional Office of the Securities (1) A debt security not traded on a national securiand Exchange Commission (SEC) where the credi- ties exchange which meets all of the following tor has its principal place of business; or requirements: (3) if a member of more than one self-regulatory (i) At the time of the original issue, a principal organization, the organization designated by the amount of not less than $25,000,000 of the issue SEC as the examining authority for the creditor. was outstanding; (ii) The issue was registered under section 5 of (i) "Good faith margin" means the amount of margin the Securities Act of 1933 (15 U.S.C. § lit) and which a creditor, exercising sound credit judgment, the issuer either files periodic reports pursuant to would customarily require for a specified security section 13(a) or 15(d) of the Act or is an insurance position and which is established without regard to the company which meets all of the conditions specicustomer's other assets or securities positions held in fied in section 12(g)(2)(G) of the Act; and connection with unrelated transactions. (iii) At the time of the extension of credit, the creditor has a reasonable basis for believing that (j) "In or at the money" means the current market the issuer is not in default on interest or principal price of the underlying security is not more than one payments; or standard exercise interval below (with respect to a call (2) A private mortgage pass-through security (not option) or above (with respect to a put option) the guaranteed by an agency of the U.S. government) exercise price of the option. meeting all of the following requirements: (i) An aggregate principal amount of not less than (k) "In the money" means the current market price of $25,000,000 (which may be issued in series) was the underlying security is not below (with respect to a issued pursuant to a registration statement filed call option) or above (with respect to a put option) the with the SEC under section 5 of the Securities Act exercise price of the option. of 1933; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 431 (ii) Current reports relating to the issue have been (3) A short call or a short put on stock index options filed with the SEC; and obligates the customer to pay the holder of an "in (iii) At the time of the credit extension, the credi- the money" long put or call who has exercised the tor has a reasonable basis for believing that mort- option the cash difference between the exercise gage interest, principal payments and other distri- price and the current assigned value of the index as butions are being passed through as required and established by the option contract. that the servicing agent is meeting its material obligations under the terms of the offering. (x) "Specialist joint account" means an account which, by written agreement, provides for the com- (s) "OTC margin stock" means any equity security mingling of the security positions of the participants not traded on a national securities exchange that the and a sharing of profits and losses from the account on Board has determined has the degree of national some predetermined ratio. investor interest, the depth and breadth of market, the availability of information respecting the security and (y) "Underlying security" means the security that its issuer, and the character and permanence of the will be delivered upon exercise of an option. issuer to warrant being treated like an equity security traded on a national securities exchange. An OTC Section 220.3—General Provisions stock is not considered to be an "OTC margin stock" until it appears on the Board's periodically published (a) Records. The creditor shall maintain a record for list of OTC margin stocks. each account showing the full details Ofsall transactions. (t) "Overlying option" means: (1) a put option purchased or a call option written (b) Separation of accounts. Except as provided for in against a long position in an underlying security in the margin account and the special memorandum the specialist record in section 220.12(b); or account, the requirements of an account may not be (2) a call option purchased or a put option written met by considering items in any other account. If against a short position in an underlying security in withdrawals of cash or securities are permitted under the specialist record in section 220.12(b). the regulation, written entries shall be made when cash or securities are used for purposes of meeting require- (u) "Purpose credit" means credit for the purpose of: ments in another account. (1) buying, carrying, or trading in securities; or (2) buying or carrying any part of an investment (c) Maintenance of credit. Except as prohibited by contract security which shall be deemed credit for this part, any credit initially extended in compliance the purpose of buying or carrying the entire securi- with this part may be maintained regardless of: ty. (1) reductions in the customer's equity resulting from changes in market prices; (v) "Registered security" means any security that: (2) any security in an account ceasing to be margin (1) is registered on a national securities exchange; or exempted; or or (3) any change in the margin requirements pre- (2) has unlisted trading privileges on a national scribed under this part. securities exchange. (d) Guarantee of accounts. No guarantee of a custom- (w) "Short call or short put" means a call option or a er's account shall be given any effect for purposes of put option that is issued, endorsed, or guaranteed in or this part. for an account. (1) A short call obligates the customer to sell the (e) Receipt of funds or securities. underlying security, foreign currency, or certificate (1) A creditor, acting in good faith, may accept as of deposit at the exercise price upon receipt of an immediate payment: exercise notice at any time prior to the expiration (i) cash or any check, draft, or order payable on date of the option. presentation; or (2) A short put obligates the customer to purchase (ii) any security with sight draft attached. the underlying security, foreign currency, or certifi- (2) A creditor may treat a security, check or draft as cate of deposit at the exercise price upon receipt of received upon written notification from another an exercise notice at any time prior to the expiration creditor that the specified security, check, or draft date of the option. has been sent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

432 Federal Reserve Bulletin • June 1983 (3) Upon notification that a check, draft, or order inclusion in another account shall be recorded in the has been dishonored or when securities have not margin account. been received within a reasonable time, the creditor (2) A creditor may establish separate margin acshall take the action required by this part when counts for the same person to: payment or securities are not received on time. (i) clear transactions for other creditors where the transactions are introduced to the clearing credi- (f) Exchange of securities. tor by separate creditors; or (1) To enable a customer to participate in an offer to (ii) clear transactions through other creditors if exchange securities which is made to all holders of the transactions are effected by separate credian issue of securities, a creditor may submit for tors; or exchange any securities held in a margin account, (iii) provide one or more accounts over which the without regard to the other provisions of this part, creditor or a third party investment adviser has provided the consideration received is deposited investment discretion. into the account. (2) If a nonmargin, nonexempted security is ac- (b) Required margin. The required margin for each quired in exchange for a margin security, its reten- position in securities is set forth in section 220.18 (the tion, withdrawal, or sale within 60 days following its Supplement) and is subject to the exceptions and acquisition shall be treated as if the security is a special provisions contained in section 220.5 (Margin margin security. Account Exceptions and Special Provisions). (g) Valuing securities. The current market value of a (c) When additional margin is required. security shall be determined as follows: (1) Computing deficiency. All transactions on the (1) Throughout the day of the purchase or sale of a same day shall be combined to determine whether security, the creditor shall use the security's total additional margin is required by the creditor. For the cost of purchase or the net proceeds of its sale purpose of computing equity in an account, security including any commissions charged. positions are established or eliminated and a credit (2) At any other time, the creditor shall use the or debit created on the trade date of a security closing sale price of the security on the preceding transaction. Additional margin is required on any business day, as shown by any regularly published day when the day's transactions create or increase a reporting or quotation service. If there is no closing margin deficiency in the account and shall be for the price, the creditor may use any reasonable estimate amount of the margin deficiency. of the market value of the security as of the close of (2) Satisfaction of deficiency. The additional rebusiness on the preceding business day. quired margin may be satisfied by a transfer from the special memorandum account or by a deposit of (h) Innocent mistakes. If any failure to comply with cash, margin securities, exempted securities, or any this part results from a mistake made in good faith in combination thereof. executing a transaction or calculating the amount of (3) Time limits. margin, the creditor shall not be deemed in violation of (i) A margin call shall be satisfied within 7 busithis part if, promptly after the discovery of the mis- ness days after the margin deficiency was created take, the creditor takes appropriate corrective action. or increased. (ii) The 7 day period may be extended for one or (i) Variable annuity contracts issued by insurance more limited periods upon application by the companies. Any insurance company that issues or creditor to a self-regulatory organization or nasells variable annuity contracts or engages in a general tional securities association unless the organizasecurities business as a broker or dealer shall be tion or association believes that the creditor is not subject to this part only for transactions in connection acting in good faith or that the creditor has not with those activities. Extensions of credit associated sufficiently determined that exceptional circumwith conventional lending practices of insurance com- stances warrant such action. Applications shall be panies are subject to Part 207 of this Chapter. filed and acted upon prior to the end of the 7 day period or the expiration of any subsequent extension. However, applications filed by firms having Section 220.4—Margin Account no direct electronic access to the organization or association may be accepted as timely filed if (a) Margin transactions. postmarked by midnight of the last day of the 7 (1) All transactions not specifically authorized for day period or any subsequent extension. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 433 (4) Satisfaction restriction. Any transaction, posi- be withdrawn from the account if: tion, or deposit that is used to satisfy one require- (i) the withdrawal does not create or increase a ment under this part shall be unavailable to satisfy margin deficiency in the account; or any other requirement. (ii) the current market value of any securities withdrawn does not exceed 10 per cent of the current market value of the security with respect (d) Liquidation in lieu of deposit. If any margin call is to which they were distributed. not met in full within the required time, the creditor shall liquidate securities sufficient to meet the margin Section 220.5—Margin Account Exceptions and call or to eliminate any margin deficiency existing on Special Provisions. the day such liquidation is required, whichever is less. If the margin deficiency created or increased is $500 or (a) Unissued securities. less, no action need be taken by the creditor. (1) The required margin on a net long or net short commitment in an unissued security is the margin (e) Withdrawals of cash or securities. that would be required if the security were an issued (1) Cash or securities may be withdrawn from an margin security, plus any unrealized loss on the account, except if: commitment or less any unrealized gain. (i) additional cash or securities are required to be (2) Margin is not required on a net short commitdeposited into the account for a transaction on the ment in unissued securities when the account consame or a previous day ; or tains the related issued securities, nor for any net (ii) the withdrawal, together with other transacshort or net long position in unissued exempted tions, deposits, and withdrawals on the same day, securities. would create or increase a margin deficiency. (2) Margin excess may be withdrawn or may be (b) Short sales. transferred to the special memorandum account (1) The required margin for the short sale of a (section 220.6) by making a single entry to that security shall be the amount set forth in section account which will represent a debit to the margin 220.18 (the Supplement). account and a credit to the special memorandum (2) A short sale "against the box" shall be treated account. as a long sale for the purpose of computing the (3) If a creditor does not receive a distribution of equity and the required margin. cash or securities which is payable with respect to any security in a margin account on the day it is (c) Options. payable and withdrawal would not be permitted (1) Margin or cover for options on exempted debt under this paragraph, a withdrawal transaction shall securities, certificates of deposit, stock indices, or be deemed to have occurred on the day the distribusecurities exchange traded options on foreign curtion is payable. rencies. The required margin for each transaction involving any short put or short call on an exempted (f) Interest, service charges, etc. debt security, certificate of deposit, stock index, or (1) Without regard to the other provisions of this foreign currency (if the option is traded on a securisection, the creditor, in its usual practice, may debit ties exchange), shall be the amount or positions in the following items to a margin account if they are lieu of margin set forth in section 220.18 (the Suppleconsidered in calculating the balance of such ac- ment). count: (2) Margin for options on equity securities. The (i) interest charged on credit maintained in the required margin for each transaction involving any margin account; short put or short call on an equity security shall be (ii) premiums on securities borrowed in connec- the amount set forth in section 220.18 (the Suppletion with short sales or to effect delivery; ment), plus any unrealized loss on the commitment (iii) dividends, interest, or other distributions due or minus any unrealized gain. However, the reon borrowed securities; quired margin may not exceed the current market (iv) communication or shipping charges with re- value of the underlying security in the case of a call, spect to transactions in the margin account; and or the exercise price in the case of a put. (v) any other service charges which the creditor (3) Cover or positions in lieu of margin. No margin may impose. is required for an option written on an equity (2) A creditor may permit interest, dividends, or security position when the account holds any of the other distributions credited to a margin account to following: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

434 Federal Reserve Bulletin • June 1983 (i) the underlying security in the case of a short used for determining on any given day which securicall, or a short position in the underlying security ty position will be used in lieu of the margin to in the case of a short put; support an option transaction. Any security held in (ii) securities immediately convertible into or ex- the account which serves in lieu of the required changeable for the underlying security without the margin for a short put or a short call shall be payment of money in the case of a short call, if the unavailable to support any other option transaction right to convert or exchange does not expire on or in the account. before the expiration date of the short call; (iii) an escrow agreement for the underlying se- (d) Accounts of partners. If a partner of the creditor curity or foreign exchange (in the case of a short has a margin account with the creditor, the creditor call) or cash (in the case of a short put); shall disregard the partner's financial relations with (iv) a long call on the same number of shares of the firm (as shown in the partner's capital and ordinary the same underlying security if the long call does drawing accounts) in calculating the margin or equity not expire before the expiration date of the short of the partner's margin account. call, and if the amount (if any), by which the exercise price of the long call exceeds the exercise (e) Contribution to joint venture. If a margin account price of the short call is deposited in the account; is the account of a joint venture in which the creditor (v) a long put on the same number of shares of the participates, any interest of the creditor in the joint same underlying security if the long put does not account in excess of the interest which the creditor expire before the expiration date of the short put, would have on the basis of its right to share in the and if the amount (if any), by which the exercise profits shall be treated as an extension of credit to the price of the short put exceeds the exercise price of joint account and shall be margined as such. the long put is deposited in the account; (vi) a warrant to purchase the underlying securi- (f) Transfer of accounts. ty, in the case of a short call, if the warrant does (1) A margin account that is transferred from one not expire on or before the expiration date of the creditor to another may be treated as if it had been short call, and if the amount (if any), by which the maintained by the transferee from the date of its exercise price of the warrant exceeds the exercise origin, if the transferee accepts, in good faith, a price of the short call is deposited in the account. signed statement of the transferor (or, if that is not A warrant used in lieu of the required margin practicable, of the customer), that any margin call under this provision shall contribute no equity to issued under this part has been satisfied. the account. (2) A margin account that is transferred from one (4) Adjustments. customer to another as part of a transaction, not (i) When a short position held in the account undertaken to avoid the requirements of this part, serves in lieu of the required margin for a short may be treated as if it had been maintained for the put, the amount prescribed by paragraph (c)(2) of transferee from the date of its origin, if the creditor this section as the amount to be added to the accepts in good faith and keeps with the transferee required margin in respect of short sales shall be account a signed statement of the transferor describincreased by any unrealized loss on the position. ing the circumstances for the transfer. (ii) When a security held in the account serves in lieu of the required margin for a short call, the security shall be valued at no greater than the exercise price of the short call. Section 220.6—Special Memorandum Account. (5) Straddles. When both a short put and a short call are in a margin account on the same number of (a) A special memorandum account (SMA) may be shares of the same underlying security, the required maintained in conjunction with a margin account. A margin shall be the margin on either the short put or single entry amount may be used to represent both a the short call, whichever is greater, plus any unreal- credit to the SMA and a debit to the margin account. A ized loss on the other option. transfer between the two accounts may be effected by (6) Exclusive designation. The customer may desig- an increase or reduction in the entry. When computing nate at the time the option order is entered which the equity in a margin account, the single entry amount security position held in the account is to serve in shall be considered as a debit in the margin account. A lieu of the required margin, if such service is offered payment to the customer or on the customer's behalf by the creditor; or the customer may have a standing or a transfer to any of the customer's other accounts agreement with the creditor as to the method to be from the SMA reduces the single entry amount. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 435 (b) The SMA may contain the following entries: into the underlying security, without the payment (1) dividend and interest payments; of money) is held in or purchased for the account (2) cash not required by this part, including cash on the same day, and the option premium is held deposited to meet a maintenance margin call or to in the account until cash payment for the underlymeet any requirement of a self-regulatory organiza- ing or convertible security is received; or tion that is not imposed by this part; (ii) in the case of a put option, the creditor obtains (3) proceeds of a sale of securities or cash no longer cash in an amount equal to the exercise price or required on any expired or liquidated security- posi- holds in the account any of the following instrution that may be withdrawn under section 220.4(e) of ments with a current market value at least equal to this part; and the exercise price and with one year or less to (4) margin excess transferred from the margin ac- maturity: securities issued or guaranteed by the count under section 220.4(e)(2) of this part. United States or its agencies, negotiable bank certificates of deposit, or bankers acceptances Section 220.7—Arbitrage Account issued by banking institutions in the United States and payable in the United States. In an arbitrage account a creditor may effect and (4) use an escrow agreement in lieu of the cash or finance for any customer bona fide arbitrage transac- underlying security position if: tions. For the purpose of this section, the term bona (i) in the case of a call or a put, the creditor is fide arbitrage" means: advised by the customer that the required securi- (1) a purchase or sale of a security in one market ties or cash are held by a bank and the creditor together with an offsetting sale or purchase of the independently verifies that an appropriate escrow same security in a different market at as nearly the agreement will be delivered by the bank promptly; same time as practicable for the purpose of taking or advantage of a difference in prices in the two mar- (ii) in the case of a call issued, endorsed, or kets, or guaranteed on the same day the underlying securi- (2) a purchase of a security which is, without re- ty is purchased in the account and the underlying striction other than the payment of money, ex- security is to be delivered to a bank, the creditor changeable or convertible within 90 calendar days of verifies that an appropriate escrow agreement will the purchase into a second security together with an be delivered by the bank promptly. offsetting sale of the second security at or about the same time, for the purpose of taking advantage of a (b) Time periods for payment; cancellation or liquidaconcurrent disparity in the prices of the two securi- tion. ties. (1) Full cash payment. A creditor shall obtain full cash payment for customer purchases within 7 busi- Section 220.8—Cash Account ness days of the date: (i) any nonexempted security was purchased; (a) Permissible transactions. In a cash account, a (ii) any unissued security was made available by creditor may: the issuer for delivery to purchasers; (1) buy for or sell to any customer any security if: (iii) any "when distributed" security was distrib- (i) there are sufficient funds in the account; or uted under a published plan; (ii) the creditor accepts in good faith the custom- (iv) a security owned by the customer has maer's agreement that the customer will promptly tured or has been redeemed and a new refunding make full cash payment for the security before security of the same issuer has been purchased by selling it and does not contemplate selling it prior the customer, provided: to making such payment; (A) the customer purchased the new security (2) buy from or sell for any customer any security if: no more than 35 calendar days prior to the date (i) the security is held in the account; or of maturity or redemption of the old security; (ii) the creditor accepts in good faith the custom- (B) the customer is entitled to the proceeds of er's statement that the security is owned by the the redemption; and customer or the customer's principal, and that it (C) the delayed payment does not exceed 103 will be promptly deposited in the account; percent of the proceeds of the old security. (3) issue, endorse, or guarantee an option for any (2) Delivery against payment. If a creditor purcustomer if: chases for or sells to a customer a security in a (i) in the case of a call option, the underlying delivery against payment transaction, the creditor security (or a security immediately convertible shall have up to 35 calendar days to obtain payment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

436 Federal Reserve Bulletin • June 1983 if delivery of the security is delayed due to the timely filed if it is postmarked no later than midnight mechanics of the transaction and is not related to the of the last day of the 7 day period or any subsequent customer's willingness or ability to pay. extension. (3) Shipment of securities, extension. If any shipment of securities is incidental to consummation of a Section 220.9—Nonsecurities Credit Account transaction, a creditor may extend the 7 business day period by the number of days required for (a) In a nonsecurities credit account a creditor may: shipment, but not by more than 7 business days. (1) Effect and carry transactions in commodities; (4) Cancellation; liquidation; minimum amount. A (2) Effect and carry transactions in foreign excreditor shall promptly cancel or otherwise liquidate change; a transaction, or any part of a transaction for which (3) Extend and maintain secured or unsecured nonthe customer has not made full cash payment within purpose credit, subject to the requirements of parathe required time. A creditor may, at its option, graph (b) of this section. disregard any sum due from the customer not exceeding $500. (b) Every extension of credit, except as provided in paragraphs (a)(1) and (2) of this section, shall be (c) 90 day freeze. deemed to be purpose credit unless, prior to extending (1) If a nonexempted security in the account is sold the credit, the creditor accepts in good faith from the or delivered to another broker or dealer without customer a written statement that it is not purpose having been previously paid for in full by the cus- credit. The statement shall conform to the requiretomer, the privilege of delaying payment beyond the ments established by the Board. To accept the customtrade date shall be withdrawn for 90 calendar days er's statement in good faith, the creditor shall be aware following the date of sale of the security. Cancella- of the circumstances surrounding the extension of tion of the transaction other than to correct an error credit and shall be satisfied that the statement is shall constitute a sale. truthful. (2) The 90 day freeze shall not apply if: (i) within 7 business days of the trade date, full payment is Section 220.10—Omnibus Account received or any check or draft in payment has cleared and the proceeds from the sale are not (a) In an omnibus account, a creditor may effect and withdrawn prior to such payment or check clear- finance transactions for a broker or dealer who is ance; or (ii) the purchased security was delivered to registered with the SEC under section 15 of the Act another broker or dealer for deposit in a cash and who gives the creditor written notice that: account which holds sufficient funds to pay for the (1) all securities will be for the account of customers security. The creditor may rely on a written state- of the broker or dealer; and ment accepted in good faith from the other broker or (2) any short sales effected will be short sales made dealer that sufficient funds are held in the other cash on behalf of the customers of the broker or dealer account. other than partners. (b) The written notice required by paragraph (a) shall (d) Extension of time periods; transfers. conform to any SEC rule on the hypothecation of (1) Unless a self-regulatory organization or associacustomers' securities by brokers or dealers. tion believes that the creditor is not acting in good faith or that the creditor has not sufficiently determined that exceptional circumstances warrant such Section 220.11—Broker-dealer Credit Account action, it may, upon application by the creditor: (i) extend any period specified in paragraph (b) of (a) Permissible transactions. In a broker-dealer credit this section; account, a creditor may: (ii) authorize transfer to another account of any (1) Purchase any security from or sell any security transaction involving the purchase of a margin or to another creditor under a good faith agreement to exempted security; or promptly deliver the security against full payment of (iii) grant a waiver from the 90 day freeze. the purchase price. (2) Applications shall be filed and acted upon prior (2) Effect or finance transactions of any of its ownto the end of the 7 day period or the expiration of ers if the creditor is a clearing and servicing broker any subsequent extension. However, an application or dealer owned jointly or individually by other filed from firms having no direct electronic access to creditors. the exchange or association may be accepted as (3) Extend and maintain credit to any partner or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 437 stockholder of the creditor for the purpose of mak- of the same underlying security which is "in the ing a capital contribution to, or purchasing stock of, money"; the creditor, affiliated corporation or another credi- (ii) a long option position which is "in or at the tor. money" and is not offset by a long or short option (4) Extend and maintain, with the approval of the position for an equal or greater number of shares appropriate examining authority: of the same underlying security which is "in the (i) credit to meet the emergency needs of any money"; creditor; or (iii) a short option position against which an exer- (ii) subordinated credit to another creditor for cise notice was tendered; capital purposes, if the other creditor: (iv) a long option position which was exercised; (A) is an affiliated corporation; or (v) a net long position in a security (other than an (B) will not use the proceeds of the loan to option) in which the specialist makes a market; or increase the amount of dealing in securities for (vi) a net short position in a security (other than the account of the creditor, its firm or corpora- an option) in which the specialist makes a market. tion or an affiliated corporation. (3) Required margin. The required margin for a specialist's transactions shall be: (b) For purposes of paragraph (a)(3) and (4) of this (i) good faith margin for any long or short position section "affiliated corporation" means a corporation in a security in which the specialist makes a all the common stock of which is owned directly or market; indirectly by the firm or general partners and employ- (ii) good faith margin for any wholly-owned marees of the firm, or by the corporation or holders of the gin security or exempted security ; controlling stock and employees of the corporation (iii) the margin prescribed by section 220.18 (the and the affiliation has been approved by the creditor's Supplement) when a security purchased or sold examining authority. short in the account does not qualify as a specialist or permitted offset position. Section 220.12—Market Functions Account (4) Additional margin; restriction on "free-riding." (i) Except as required by paragraph (b)(5) of this (a) Requirements. In a market functions account, a section, the creditor shall issue a margin call on creditor may effect or finance the transactions of any day when additional margin is required as a market participants in accordance with the following result of specialist transactions. The creditor may provisions. A separate record shall be kept for the allow the specialist a maximum of 7 business days transactions specified for each category described in to satisfy a margin call. paragraphs (b) through (e) of this section. Any position (ii) If a specialist fails to satisfy a margin call in a separate record shall not be used to meet the within the period specified in this paragraph (and requirements of any other category. the creditor is required to liquidate securities to satisfy the call), the creditor shall be prohibited (b) Specialists. for a 15 calendar day period from extending any (1) Applicability. A creditor may clear or finance further credit to the specialist to finance transacspecialist transactions for any specialist, or any tions in nonspecialty securities. specialist joint account, in which all participants, or (iii) The restriction on "free-riding" shall not all participants other than the creditor, are regis- apply to: tered as specialists on a national securities exchange (A) any specialist on a national securities exthat requires regular reports on the use of specialist change that has an S EC-approved rule on credit from the registered specialists. "free-riding" by specialists; or (2) Permitted offset positions. A specialist in op- (B) the acquisition or liquidation of a permitted tions may establish, on a share-for-share basis, a offset position. long or short position in the securities underlying the (5) Deficit status. On any day when a specialist's options in which the specialist makes a market, and separate record would liquidate to a deficit, the a specialist in securities other than options may creditor shall not extend any further specialist credit purchase or write options overlying the securities in in the account and shall issue a margin call at least as which the specialist makes a market, if the account large as the deficit. If the call is not met by noon of holds the following permitted offset positions: the following business day, the creditor shall liqui- (i) a short option position which is "in or at the date positions in the specialist's account. money" and is not offset by a long or short option (6) Withdrawals. Withdrawals may be permitted to position for an equal or greater number of shares the extent that the equity exceeds the margin re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

438 Federal Reserve Bulletin • June 1983 quirements specified in paragraph (b)(3) of this provisions) if the sale is exempted from the registrasection. tion requirements of the Securities Act of 1933 under section 4(2) or section 4(6) of the Act. (c) Underwritings and distributions. A creditor may effect or finance for any dealer or group of dealers Section 220.14—Clearance of Securities transactions for the purpose of facilitating the underwriting or distribution of all or a part of an issue of (a) Credit for clearance of securities. The provisions securities with a good faith margin. of this part shall not apply to the extension or maintenance of any credit that is not for more than one day if (d) OTC marketmakers and third marketmakers. it is incidental to the clearance of transactions in (1) A creditor may clear or finance with a good faith securities directly between members of a national margin, marketmaking transactions for an OTC marsecurities exchange or association or through any ketmaker or a third marketmaker who: clearing agency registered with the SEC. (i) is in compliance with any applicable SEC rule, including minimum net capital rules; (b) Deposit of securities with options clearing agency. (ii) regularly submits bona fide competitive bid The provisions of this part shall not apply to the and offer quotations to a recognized inter-dealer deposit of securities with an options clearing agency quotation system; for the purpose of meeting its deposit requirements if: (iii) is ready, willing, and able to effect transac- (1) the clearing agency issues options on securities; tions in reasonable amounts with other brokers (2) the clearing agency is registered with the SEC; and dealers at the quoted prices; and (3) the deposit consists of any underlying securities (iv) has a reasonable average rate of inventory for classes of option contracts outstanding at the turnover. time of the deposit; and (2) If the credit extended to a marketmaker ceases (4) the deposit complies with the rules of the clearto be for the purpose of marketmaking, or the dealer ing agency which have been approved by the SEC. ceases to be a marketmaker for an issue of securities for which credit was extended, the credit shall be subject to the margin specified in section 220.18 (the Section 220.15—Borrowing by Creditors Supplement). (a) Restrictions on borrowing. A creditor may not (e) Odd-lot dealers. A creditor may clear and finance borrow in the ordinary course of business as a broker odd-lot transactions for any creditor who is registered or dealer using as collateral any registered nonexemptas an odd-lot dealer on a national securities exchange ed security, except: with a good faith margin. (1) from or through a member bank of the Federal Reserve System; or (2) from any nonmember bank that has filed with Section 220.13—Arranging for Loans by Others the Board an agreement as prescribed in paragraph (b) of this section, which agreement is still in effect; A creditor may not arrange for the extension or or maintenance of credit to or for any customer by any (3) from another creditor if the loan is permissible person upon terms and conditions other than those under this part. upon which the creditor may itself extend or maintain credit under the provisions of this part, except that this (b) Agreements of nonmember banks. limitation shall not apply to credit arranged for a (1) A nonmember bank shall file an agreement that customer which does not violate Parts 207 and 221 of conforms to the requirements of section 8(a) of the this Chapter and results solely from: Act (See Form F.R. T-2) if: (a) investment banking services, provided by the (i) its principal place of business is in a territory creditor to the customer, including, but not limited or insular possession of the United States; or to, underwritings, private placements, and advice (ii) it has an office or agency in the United States and other services in connection with exchange and its principal place of business is outside the offers, mergers or acquisitions, except for under- United States. writings that involve the public distribution of an (2) Any other nonmember bank shall file an agreeequity security with installment or other deferred ment that conforms to the requirements of section payment provisions; or 8(a) of the Act (See Form F.R. T-l). (b) the sale of nonmargin securities (including secu- (3) Any nonmember bank may terminate its agreerities with installment or other deferred payment ment if it obtains the written consent of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 439 Section 220.16—Borrowing and Lending stock, or the average daily trading volume of such Securities stock as determined by the Board, is at least 500 shares; and Without regard to the other provisions of this part, a (9) The issuer has been in existence for at least creditor may borrow or lend securities for the purpose three years. of making delivery of the securities in the case of short sales, failure to receive securities required to be deliv- (b) Requirements for continued inclusion on the list. ered, or other similar situations. Each borrowing shall Except as provided in paragraph (d) of this section, be secured by a deposit of one or more of the follow- OTC margin stock shall meet the following requireing: cash, securities issued or guaranteed by the Unit- ments: ed States or its agencies, negotiable bank certificates (1) Three or more dealers stand willing to, and do in of deposit and bankers acceptances issued by banking fact, make a market in such stock and regularly institutions in the United States and payable in the submit bona fide bids and offers to an automated United States, or irrevocable letters of credit issued by quotations system for their own accounts; a bank insured by the Federal Deposit Insurance (2) The minimum average bid price of such stocks, Corporation or a foreign bank that has filed an agree- as determined by the Board, is at least $2 per share; ment with the Board on Form F.R. T-2. Such deposit (3) The stock is registered as specified in paragraph made with the lender of the securities shall have at all (a)(3) of this section. times a value at least equal to 100 per cent of the (4) Daily quotations for both bid and asked prices market value of the securities borrowed, computed as for the stock are continuously available to the of the close of the preceding business day. general public; (5) The issuer has at least $1 million of capital, Section 220.17—Requirements for List of OTC surplus, and undivided profits; Margin Stocks (6) There are 300,000 or more shares of such stock outstanding in addition to shares held beneficially by (a) Requirements for inclusion on the list. Except as officers, directors, or beneficial owners of more than provided in paragraph (d) of this section, OTC margin 10 per cent of the stock; and stock shall meet the following requirements: (7) There continue to be 800 or more holders of record, as defined in SEC Rule 12g5-l (17 CFR (1) Four or more dealers stand willing to, and do in § 240.12g5-l), of the stock who are not officers, fact, make a market in such stock and regularly directors, or beneficial owners of 10 per cent or submit bona fide bids and olfers to an automated more of the stock, or the average daily trading quotations system for their own accounts; volume of such stock, as determined by the Board, (2) The minimum average bid price of such stock, as is at least 300 shares. determined by the Board, is at least $5 per share; (3) The stock is registered under section 12 of the (c) Removal from the list. The Board shall periodical- Act, or is an American Depository Receipt (ADR) of ly remove from the list any stock that: a foreign issuer whose securities are registered (1) ceases to exist or of which the issuer ceases to under section 12 of the Act, or is a stock of a foreign exist, or issuer required to file reports under section 15(d) of (2) no longer substantially meets the provisions of the Act; paragraph (b) of this section or section 220.2(s). (4) Daily quotations for both bid and asked prices for the stock are continuously available to the (d) Discretionary authority of Board. Without regard general public; to the other paragraphs of this section, the Board may (5) The stock has been publicly traded for at least add to, or omit or remove from the OTC margin stock six months; list, any equity security, if in the judgment of the (6) The issuer has at least $4 million of capital, Board, such action is necessary or appropriate in the surplus, and undivided profits; public interest. (7) There are 400,000 or more shares of such stock outstanding in addition to shares held beneficially by (e) Unlawful representations. It shall be unlawful for officers, directors or beneficial owners of more than any creditor to make, or cause to be made, any 10 per cent of the stock; representation to the effect that the inclusion of a (8) There are 1,200 or more holders of record, as security on the list of OTC margin stocks is evidence defined in SEC Rule 12g5-l (17 CFR § 240.12g5-l), that the Board or the SEC has in any way passed upon of the stock who are not officers, directors or the merits of, or given approval to, such security or beneficial owners of 10 per cent or more of the any transactions therein. Any statement in an adver- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

440 Federal Reserve Bulletin • June 1983 tisement or other similar communication containing a is traded, provided that all such rules have been reference to the Board in connection with the list or approved or amended by the SEC. stocks on that list shall be an unlawful representation. (i) Short put or short call on a stock index-. The amount or other security positions specified by the Section 220.18—Supplement to Regulation T rules of the national securities exchange on which the option is traded, provided that all such rules have been Margin Requirements approved or amended by the SEC. The required margin for each security position held in a margin account shall be as follows: BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS (a) Margin security except for (b) below: 50 per cent of the current market value of the security. Orders Under Section 3 of Bank Holding Company Act (b) Exempted security, registered non-convertible debt security or OTC margin bond: the margin re- Augustana College Association, quired by the creditor in good faith. Sioux Falls, South Dakota (c) Short put or short call on an equity security: 30 per Order Approving Formation of a Bank Holding cent of the current market value of the underlying Company security, but not less than $250, adjusted or waived in accordance with section 220.5(c). Augustana College Association, Sioux Falls, South Dakota, has applied for the Board's approval under (d) Short sale of nonexempted security: 150 per cent section 3(a)(1) of the Bank Holding Company Act of the current market value of the security or 100 per (12 U.S.C. § 1842(a)(1)) to become a bank holding cent of the current market value if a security ex- company through the acquisition of at least 87.4 perchangeable or convertible within 90 calendar days cent of State Bank of Hendricks, Hendricks, Minnesowithout restriction other than the payment of money ta ("Bank"). into the security sold short is held in the account. Notice of the application, affording opportunity for interested persons to submit comment, has been given (e) Short sale of an exempted security: 100 per cent of in accordance with section 3(b) of the Act. The time the current market value of the security plus the for filing comments and views has expired, and the margin required by the creditor in good faith. Board has considered the application and all comments received, including the comments of the Minne- (f) Nonmargin, nonexempted security or a long posi- sota Commissioner of Banks, in light of the factors set tion in any option: 100 per cent of the current market forth in section 3(c) of the Act. value. Applicant is a nonprofit, tax-exempt corporation under section 501(c)(3) of the Internal Revenue Code (g) Short put or short call on an exempted debt that operates a four-year liberal arts college offering security or certificate of deposit: undergraduate degrees in 40 major fields of study. (1) The amount or other position specified by the Although generally an institution that engages in nonrules of the national securities exchange on which banking activities is prohibited from becoming a bank the option is traded, provided that all such rules holding company under the Act, the legislative history have been approved or amended by the SEC; or of the 1966 Amendments to the Act indicates that (2) in the case of an over-the-counter option on an Congress intended to permit nonprofit, tax-exempt exempted debt security that the SEC has not deter- institutions that were engaged in exclusively religious, mined to be an exempted security, an amount or charitable, or educational activities to own banks other position which the creditor in good faith subject to the Act's provisions.1 The legislative history deems to be equivalent to the margin or cover on indicates that the exclusively religious, charitable, or comparable exchange-traded options. educational activities of such institutions were not (h) Short put or short call (securities exchange traded) 1. S. Rep. No. 1179, 89th Cong., 2d Sess. 3 (1966). Based on the on foreign currency: The amount, other option posi- legislative history, the Board has previously determined that the Act permits an institution engaged in exclusively charitable activities to tion, or foreign currency position specified by the rules become a bank holding company. The Retirement Research Foundaof the national securities exchange on which the option tion, 64 FEDERAL RESERVE BULLETIN 891 (1978). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 441 intended to be regarded as "activities" for purposes of with approval. the prohibitions of section 4 of the Act. Accordingly, The financial and managerial resources and future approval of the application is not barred due to Appli- prospects of Applicant and Bank are regarded as cant's educational activities. satisfactory. Accordingly, considerations relating to Applicant engages in a number of profit making banking factors are consistent with approval. While no activities related to its educational functions, including major changes in Bank's services are contemplated, the operation of dormitories and recreational facilities, considerations relating to the convenience and needs a food service and cafeteria facilities, a student book- of the community to be served also are consistent with store, a health service, and other activities of the type approval. generally engaged in by educational institutions. In In its review of the application, the Board has taken connection with its educational program, Applicant into consideration the views of the Minnesota Comalso provides facilities and personnel for certain tax missioner of Banks expressing concern regarding the exempt organizations engaged in educational, re- nature of Applicant's nonbanking activities. The search, and community service activities. None of Board believes that the Commissioner's concerns are these activities produces independent business income resolved by Applicant's commitment to divest of imfor purposes of the Internal Revenue Code, and the permissible real estate and other assets and by Appli- Board believes that such activities may be regarded as cant's conformance with the legislative history of the incidental to Applicant's educational activities. 1966 Amendments to the Act which indicates that Applicant also owns and administers an endowment nonprofit, tax-exempt organizations engaged in exclufund and a gift fund consisting primarily of short-term sively religious, charitable, or educational activities investments which would be permissible for a bank were not intended to be precluded from owning banks. holding company to own, including stocks and bonds Accordingly, the Board has determined that conrepresenting less than 5 percent of the voting stock of summation of the transaction would be consistent with the issuer, real estate mortgages and notes. The in- the public interest and that the application should be come generated from these assets represents less than approved. On the basis of the record, the application is 3 percent of Applicant's total revenue and is not hereby approved for the reasons summarized above. regarded as independent business income under the The transaction shall not be made before the thirtieth Internal Revenue Code. In connection with these calendar day following the effective date of this Order, funds, Applicant also holds certain real estate received or later than three months following the effective date as gifts which would not be permissible for a bank of this Order, unless such period is extended for good holding company to hold. Applicant has made appro- cause by the Board or by the Federal Reserve Bank of priate commitments for the divestiture of this real Minneapolis acting pursuant to delegated authority. estate and any other assets received in the future that By order of the Board of Governors, effective would be impermissible for a bank holding company to May 10, 1983. own. Since the revenue derived from the funds is used to fund Applicant's educational activities and since Voting for this action: Vice Chairman Martin and Goversuch funds are common methods by which educational nors Partee, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Wallich. institutions fund themselves, the Board believes that the funds and Applicant's fundraising activities with JAMES MCAFEE, respect thereto may be regarded as incidental to [SEAL] Associate Secretary of the Board Applicant's educational activities. Bank is the 612th largest banking organization in Minnesota with total deposits of $3.4 million, representing .01 percent of total deposits in commercial Banco Nororiental de Venezuela, banks in the State. Bank ranks as the 16th largest C.A., Caracas. Venezuela banking organization in the relevant banking market with .94 percent of total market deposits.3 Applicant Corpofin, C.A., has no other banking subsidiaries and its principals are Caracas Venezuela not associated with any other banking organizations in the relevant market. Accordingly, the Board con- Corpofin, N.V., cludes that competitive considerations are consistent Netherlands Antilles 2. Banking data are as of December 31, 1981. Order Approving Acquisition of a Bank 3. The relevant banking market is approximated by the counties of Lincoln, Lyon, and Murray, the western two thirds of Yellow Banco Nororiental de Venezuela, C.A., Caracas, Ven- Medicine County, and the western one-quarter of Redwood County, South Dakota. ezuela; Corpofin, C.A., Caracas, Venezuela; and Cor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

442 Federal Reserve Bulletin • June 1983 pofin, N.V., Netherlands Antilles, have applied for the has determined that considerations relating to banking Board's approval under section 3(a)(1) of the Bank factors are consistant with approval of the applica- Holding Company Act (12 U.S.C. § 1842) to become tions. Although consummation of the proposal would bank holding companies through the acquisition of a not result in any changes in the services offered by total of 72.18 percent of the voting shares of Peoples Bank, considerations relating to the convenience and Hialeah National Bank, Hialeah, Florida ("Bank"). needs of the community to be served are consistent Notice of these applications, affording the opportu- with approval of the applications. Accordingly, the nity for interested persons to submit comments, has Board has determined that consummation of the transbeen given in accordance with section 3(b) of the Act. actions would be in the public interest and that the The time for filing comments and views has expired, applications should be approved. and the Board has considered the application and all Based upon the foregoing, including all of the facts comments received in light of the factors set forth in of record and the commitments made by Applicants section 3(c) of the Act. and shareholders of Applicants, the Board has deter- Banco Nororiental de Venezuela, which is a com- mined that the applications should be and hereby are mercial bank organized under the laws of Venezuela in approved. The transaction shall not be consummated July 1980, has assets totalling $147.8 million and before the thirtieth day following the effective date of controls deposits totalling $94.6 million.1 Corpofin, this Order, or later than three months after the effec- C.A., and its subsidiary, Corpofin, N.V., are nonoper- tive date of this Order, unless such period is extended ating holding companies majority owned and con- for good cause by the Board or by the Federal Reserve trolled by the principal shareholders of Banco Noror- Bank of Atlanta under delegated authority. iental de Venezuela. Banco Nororiental de Venezuela By order of the Board of Governors, effective owns 10 percent of the voting shares of Corpofin, May 20, 1983. C.A., and of Corpofin, N.V., and proposes to acquire 10 percent of the voting shar es of Bank. The remaining Voting for this action: Vice Chairman Martin and Gover- 62.18 percent of the shares of Bank will be acquired nors Wallich, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Partee. directly by Corpofin, N.V. Upon acquisition of Bank, Applicants would control the 65th largest commercial banking organization in JAMES MCAFEE, the Miami-Fort Lauderdale banking market,2 with [SEAL] Associate Secretary of the Board total deposits of $10.5 million, representing approximately 0.07 percent of the deposits in commercial banks in the relevant market.3 Inasmuch as Applicants Dakota Bankshares, Inc., do not conduct any banking operations or other busi- Fargo, North Dakota ness in the United States, consummation of the proposed transaction would have no adverse effects on Order Denying Acquisition of a Bank existing or potential competition in any relevant market and would not increase the concentration of re- Dakota Bankshares, Inc., Fargo, North Dakota, a sources in any relevant market. Therefore, the Board bank holding company within the meaning of the Bank concludes that competitive considerations are consist- Holding Company Act, has applied for the Board's ent with approval of these applications. approval under section 3(a)(3) of the Act (12 U.S.C. The financial and managerial resources of each of § 1842(a)(3)) to acquire 80 percent of the outstanding the Applicants and of Bank appear generally satisfac- voting shares of Dakota Bank of Wahpeton, Wahpetory and the future prospects of each appear favorable. ton, North Dakota ("Bank"), a proposed de novo In this regard, Applicants have consented to make bank. Applicant has also applied for Bank to become a their books and records available to the Board in the member of the Federal Reserve System. United States subject to certain restrictions in Venezu- Notice of the application, affording opportunity for elan law. interested persons to submit comments and views, has Based on this and other commitments offered by been given in accordance with section 3(b) of the Act. Applicant and shareholders of Applicants, the Board The time for filing comments and views has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). 1. Banking data for Banco Nororiental de Venezuela is as of December 31, 1982. Applicant is the fourth largest banking organization 2. The Miami-Fort Lauderdale banking market comprises Dade and in North Dakota, with deposits of $126.6 million. Broward Counties, Florida. 3. All banking data for Bank are as of June 30, 1982. Applicant controls three banking and two nonbanking Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 443 subsidiaries and holds a 19.1 percent interest in a In this connection, the Board has considered Applifourth bank. Applicant controls 2.65 percent of the cant's proposal in light of the Board's Capital Adequatotal deposits in commercial banks in the state.1 Appli- cy Guidelines5 generally applicable to bank holding cant's acquisition of Bank would not initially increase companies and chain banking organizations with con- Applicant's deposit share since Bank is a proposed solidated assets of over $150 million.6 The Board's de novo bank. guidelines for capital adequacy, particularly its stan- Bank would be located in the Wahpeton, North dards for primary capital, reflect the Board's assess- Dakota-Breckenridge, Minnesota banking market, in ment as to the minimum appropriate capital levels for which Bank would be the smallest of twelve banks.2 banks and bank holding companies of various sizes. Applicant's principal controls three additional one- Under the Guidelines, the primary and total capital bank holding companies, which had combined assets ratios of the chain banking organization of which of $58 million on December 31, 1982, and which, Applicant is a member are below the minimum levels together with Applicant, constitute a chain banking specified in the Guidelines and are less than satisfacorganization.3 Neither Applicant's banking subsidiar- tory for community bank organizations of the comies nor any of the related chain banks currently bined size of the chain.7 In this regard, in approving an operate in the Wahpeton-Breckenridge market. Ac- earlier banking acquisition by Applicant, the Board cordingly, the Board concludes that consummation of advised Applicant of the Board's concerns regarding the proposal would not result in any adverse effects the capital position of the chain banking organization upon competition or increase the concentration of of which Applicant is a part and cautioned that their banking resources in any relevant area. Competitive future expansion would be evaluated on the basis of considerations, therefore, are consistent with approval the consolidated capital ratios for the chain banking of the application. organization and the Board's capital adequacy guidelines for an organization with over $150 million in The Board has indicated on previous occasions that consolidated assets. Based on the Guideline criteria a holding company should serve as a source of finanand other facts of record, the Board concludes that, in cial and managerial strength to its subsidiary bank(s), the context of Applicant's proposal to expand further and that the Board will closely examine the condition its banking operations, the chain banking organization of an applicant in each case with this consideration in is undercapitalized. mind. In addition, where the principal of an applicant controls other banking organizations, the Board con- The Board also notes that Applicant itself does not siders the financial and managerial resources and operate at, or above, the minimum primary capital future prospects of the institutions comprising the level for a community banking organization of its size. chain.4 Even if the Board accepts the accounting method Applicant uses to calculate its consolidated capital, Applicant's current capital position barely meets the 1. Banking data are as of September 30, 1982. minimum acceptable level specified in the Guidelines. 2. This market consists of Sargeant and Richland Counties in North In view of this fact and the recent decline in Appli- Dakota and the southern two-thirds of Wilkins County in Minnesota. 3. Applicant's principal is an officer and director of each one-bank cant's capital position, the Board concludes that Apholding company as well as an officer and/or director of each plicant should improve its capital position in order that subsidiary bank of these holding companies. In addition, Applicant's principal is the single largest shareholder of one of the three bank Applicant may be in a position to serve as a source of holding companies and owns well in excess of 25 percent of the voting strength and to meet the financial needs of its existing shares of the other two. No other single shareholder owns a greater subsidiary banks. interest in either of these two bank holding companies. Under both the Bank Holding Company Act of 1956 (12 U.S.C. § 1842(a)(2)) and the Change in Bank Control Act of 1978 (12 U.S.C. § 1817(j)(8)(B)), an ownership interest of the magnitude held by Applicant's principal in these bank holding companies would place Applicant's principal in 5. Federal Reserve Board and Comptroller of the Currency Press control of the holding companies. Based on these facts, the Board Release, December 17, 1981. 68 FEDERAL RESERVE BULLETIN 33 concludes that Applicant and the three related one-bank holding (1982), reprinted in Federal Reserve Regulatory Service, 113-1506. See companies constitute a chain banking organization, which is con- also "Definition of Bank Capital and Capital Adequacy Guidelines trolled by Applicant's principal. Program" (SR82-17, dated March 17, 1982). 4. See Nebraska Banco, Inc., Ord, Nebraska (62 FEDERAL RE- 6. Applicant's total assets equal $169 million and the combined SERVE BULLETIN 638 (1976)), where the Board stated that in analyzing banking assets of Applicant and the three related one-bank holding the financial and managerial resources of an applicant that is part of a companies equal approximately $227 million as of December 31, 1982. chain of one-bank holding companies the Board would look beyond 7. The two principal measurements of capital contained in the the applicant to the other banks that are part of that chain. The Board Guidelines are: (1) primary capital to total assets and (2) total capital concluded that this analysis was appropriate because of the "interde- to total assets. Primary capital consists of common stock, perpetual pendence of the banks in a chain of commonly-owned one-bank preferred stock, capital surplus, undivided profits, reserves for continholding companies and the distinct possibility that the financial and gencies and other capital reserves, mandatory convertible instrumanagerial resources of one or more of the banks in the chain may be ments, and allowance for possible loan losses. Total capital includes used to support the operations of other members of the banking the primary capital components plus limited-life preferred stock and group." Id. at 639. qualifying subordinated notes and debentures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

444 Federal Reserve Bulletin • June 1983 While the Board has considered Applicant's submis- On the basis of the facts of record, the application to sions, which project an improved capital position over acquire Bank is denied for the reasons summarized time, those submissions do not address the Board's above. concerns regarding the capital and financial resources By order of the Board of Governors, effective of Applicant and the chain with respect to the pro- May 3, 1983. posed expansion. Applicant has projected that, through earnings retention, the combined consolidated Voting for this action: Governors Martin, Wallich, Partee, capital ratios of the chain banking organization will and Rice. Absent and not voting: Chairman Volcker and Governors Teeters and Gramley. increase over a five year period. Applicant has not, however, provided a specific capital augmentation program responsive to the capital deficiencies raised JAMES MCAFEE, by this proposal. Applicant's projections are uncertain [SEAL] Associate Secretary of the Board and provide no assurance that the chain organization's capital will be raised to a satisfactory level. Ellis Banking Corporation, Without an adequate plan to improve the capital of Bradenton, Florida Applicant and of the chain, the Board is concerned that the financial consequences associated with the Order Approving Acquisition of Bank high debt level of this proposal presents an additional adverse financial factor. Applicant proposes to acquire Ellis Banking Corporation, Bradenton, Florida, a bank 80 percent of Bank's shares for $800,0008 and to holding company within the meaning of the Bank borrow $500,000 to finance this purchase. The use of Holding Company Act, has applied for the Board's this acquisition debt would further increase Appli- approval under section 3(a)(3) of the Act (12 U.S.C. cant's high debt level, thereby reducing its financial § 1842(a)(3)) to acquire 100 percent of the voting flexibility and its ability to serve as a source of shares of Dixie County State Bank, Cross City, Floristrength to Bank and Applicant's other subsidiary da ("Bank"). banks. Notice of the application, affording an opportunity The Board concludes that the banking consider- for interested persons to submit comments and views, ations involved in this proposal present adverse fac- has been given in accordance with section 3(b) of the tors bearing upon the financial resources and future Act. The time for filing comments and views has prospects of Applicant and the chain banking organi- expired and the Board has considered the application zation of which it is a significant part. Such adverse and all comments received in light of the factors set factors are not outweighed by any procompetitive forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). effects or by any benefits that may result in better Applicant, the eighth largest banking organization in serving the convenience and needs of the community. Florida, controls 18 banks with aggregate deposits of Accordingly, the Board's judgment is that approval of approximately $1.1 billion, representing approximatethe application would not be in the public interest and ly 2.8 percent of total deposits in commercial banks in the application to acquire bank should be denied. the state.1 Bank, with deposits of $18.6 million, is the With respect to considerations relating to the conve- 371st largest commercial bank in Florida, holding less nience and needs of the community to be served, the than 0.1 percent of total deposits in commercial banks banking services to be offered by Bank would not in the state. Acquisition of Bank would have no differ substantially from those already available in the appreciable effect upon the concentration of banking Wahpeton-Breckenridge market, although consumma- resources in Florida. Bank is the only bank competing tion of the proposal would result in an additional in the Dixie County banking market.2 Because Applichoice of banking facilities for area residents. These cant does not currently operate in this market, confactors are consistent with, but lend no significant summation of the proposed transaction will not elimiweight toward approval of this application. Finally, nate any existing competition. The Board concludes inasmuch as Applicant has stated that it would not that consummation of the proposal would not elimiopen Bank without approval of the related application nate substantial probable future competition in the to acquire Bank, it is unnecessary at this time for the market because of the large number of potential en- Board to act on Bank's application to become a trants into the market and other facts of record. member of the Federal Reserve System. Accordingly, the Board concludes that competitive 1. All banking data are as of June 30, 1982. 8. The remaining shares will be acquired by local individual inves- 2. The Dixie County banking market includes all of Dixie County, tors. Florida. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 445 considerations are consistent with approval of the the transaction, Fidelcor would acquire Bancshares' application. subsidiary bank, Southeast National Bank of Pennsyl- The financial and managerial resources of Appli- vania, Malvern, Pennsylvania, ("Southeast Bank"). cant, its subsidiaries and Bank are regarded as general- Notice of the application, affording an opportunity ly satisfactory and their future prospects appear favor- for interested persons to submit comments, has been able. The Board has indicated on previous occasions given in accordance with section 3(b) of the Act. The that a holding company should serve as a source of time for filing comments has expired, and the Board financial and managerial strength to its subsidiary has considered the application and all comments rebank(s), and that the Board would examine closely the ceived in light of the factors set forth in section 3(c) of condition of an applicant in each case with this consid- the Act (12 U.S.C. § 1842(c)).1 Applicant, the seventh eration in mind. In this case, the Board concludes that largest commercial banking organization in Pennsylvaalthough the proposal would entail the use of acquisi- nia, controls one bank, The Fidelity Bank ("Fidelition debt, the amount of debt involved in this proposal ty"), with aggregate deposits of $2.4 billion, representwould not preclude Applicant from serving as a source ing 3.3 percent of the total deposits in commercial of strength to its subsidiary banks. Thus, consider- banks in the state.2 Bancshares, the sixteenth largest ations relating to banking factors are consistent with commercial banking organization in Pennsylvania, controls one subsidiary bank with aggregate deposits approval of the application. Considerations relating to of $672 million, representing 0.9 percent of the total the convenience and needs of the community to be deposits in commercial banks in the state. Upon served also are consistent with approval. Accordingly, consummation of the proposal Applicant would beit is the Board's judgment that consummation of the come the fourth largest commercial banking organizaproposal to acquire Bank would be in the public tion in the state, controlling 4.2 percent of the total interest and that the application should be approved. deposits in commercial banks in the state. In addition, On the basis of the record, the application is apthe share of commercial bank deposits held by the four proved for the reasons summarized above. The acquilargest banking organizations in the state would insition of shares of Bank shall not be made before the crease from 36.4 percent to only 36.8 percent, and thirtieth calendar day following the effective date of Pennsylvania would remain one of the least concenthis Order or later than three months after that date, trated states in the United States. Accordingly, the unless such period is extended for good cause by the merger of Applicant and Bancshares would not have Board of Governors or by the Federal Reserve Bank of any significant effect on the concentration of banking Atlanta, pursuant to delegated authority. resources in Pennsylvania. By order of the Board of Governors, effective May 10, 1983. Both Fidelity and Southeast Bank operate exclusively in the Philadelphia banking market.3 Fifty-six Voting for this action: Vice Chairman Martin and Gover- commercial banks operate 967 offices throughout the nors Partee, Teeters, Rice, and Gramley. Absent and not market, and the share of commercial banking deposits voting: Chairman Volcker and Governor Wallich. held by the four largest banking organizations in the market is 45.3 percent. The Herfindahl-Hirschman JAMES MCAFEE, Index ("HHI") in the Philadelphia market is 762. [SEAL] Associate Secretary of the Board Fidelity is the fifth largest commercial banking organization in the Philadelphia market, controlling 8.5 percent of the total deposits in commercial banks in the Fidelcor, Inc., Rosemont, Pennsylvania Order Approving Merger of Bank Holding 1. This application was protested by the Philadelphia Council of Neighborhood Organizations (PCNO) which alleged violations of the Companies Community Reinvestment Act. Specifically, PCNO asserted that Applicant's banking subsidiary, The Fidelity Bank, did not adequately Fidelcor, Inc., Rosemont, Pennsylvania, a bank hold- meet the credit needs of low income residents and small businesses in its service area and that the bank engaged in discriminatory mortgage ing company within the meaning of the Bank Holding lending practices. Applicant and PCNO had several meetings to Company Act of 1956, as amended (12 U.S.C. § 1841 discuss PCNO's allegations and, after the parties reached a formal agreement, PCNO withdrew its protest. et seq.), has applied for the Board's approval under 2. Unless otherwise indicated, all banking data are as of Decemsection 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to ber 31, 1982. merge with Southeast National Bancshares of Penn- 3. The Philadelphia banking market is approximated by the Philadelphia SMSA, which is comprised of Philadelphia, Montgomery, sylvania, Inc., Malvern, Pennsylvania ("Banc- Bucks, Chester, and Delaware counties, Pennsylvania; and Camden, shares"), also a bank holding company. As a result of Burlington, and Glouster counties, New Jersey. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

446 Federal Reserve Bulletin • June 1983 market. Southeast is the tenth largest commercial any relevant market. The effect of this transaction on banking organization in the market, controlling 2.8 probable future competition would not be significant percent of the total deposits in commercial banks in since L&B already operates in the geographic markets the market.4 Upon consummation of the proposal, served by Southeast Bank, and the Bank, because of Applicant would become the third largest commercial its limited resources, does not appear to be a probable banking organization in the market and control 11.3 future entrant into the geographic markets served by percent of the total deposits in commercial banks in L&B. the market. The four-firm concentration ratio and the Both Applicant, through Fidelcor Mortgage Corpo- HHI in the market would increase to 47.7 percent and ration, and Southeast Bank engage in consumer fi- 810 respectively.5 nance activities. Applicant, however, operates in the Although the merger would eliminate some existing southern United States while Southeast Bank operates competition between Applicant and Bancshares in the primarily in the Philadelphia region. Thus, this trans- Philadelphia banking market, the Board does not be- action would have no effect on existing competition in lieve that the effect of this transaction on existing this line of commerce. Any effect on probable future competition would be significant. The Philadelphia competition resulting from this merger would be insigbanking market is unconcentrated and numerous nificant in light of the numerous probable future enbanking alternatives would remain in the market upon trants and the ease of entry into this line of commerce. consummation. In addition, the Philadelphia banking The financial and managerial resources of Applimarket contains 125 thrift institutions that control cant, Bancshares and their respective subsidiaries are deposits of $20.2 billion representing 49.3 percent of considered generally satisfactory, and banking factors the total deposits in the market. The Board believes are therefore consistent with approval of this applicathat thrift institutions exert a considerable competitive tion. Although there is no indication that the conveinfluence in this market as they are providers of NOW nience and needs of the community are not being met, accounts, other transaction accounts, and consumer consummation of the proposal will produce certain loans. In addition, thrift institutions in this market benefits to the communities served, including an inhave the power to and are in fact engaged in the crease in Fidelity's and Southeast Bank's lending business of making commercial loans and provide an limits. Also, Southeast Bank will begin to offer interalternative for such services for customers in the national services (financing and foreign exchanges), Philadelphia banking market.6 Thus, the Board has asset-based lending, and an educational loan program. considered the presence of thrift institutions in the In addition, both subsidiary banks have satisfactory Philadelphia market in assessing the competitive ef- records of meeting the credit needs of their communifects of this transaction and concludes that competi- ties under the Community Reinvestment Act. Thus, tive considerations are consistent with approval of the considerations relating to the convenience and needs transaction. of the community to be served are consistent with The Board has also considered the effect on existing approval. and potential competition in the nonbanking activities Based on the foregoing and other facts of record, the in which Applicant and Bancshares engage. Applicant, Board has determined that the application under secthrough its subsidiary, Latimer and Buck, Inc. tion 3 of the Act should be and is hereby approved. ("L&B"), originates and services commercial and The merger shall not be made before the thirtieth residential mortgages. Southeast Bank also engages in calendar day following the effective date of this Order, these activities and holds small market shares of each and shall not be made later than three months after the product. These product lines, however, are character- effective date of this Order, unless such period is ized by numerous competitors and, therefore, the extended for good cause by the Board or by the combination of L&B and Southeast Bank will have Federal Reserve Bank of Philadelphia, pursuant to virtually no impact upon the competitive structure in delegated authority. By order of the Board of Governors, effective May 17, 1983. Voting for this action: Chairman Volcker and Governors 4. Market data are as of June 30, 1981 and include mergers and Wallich, Partee, Teeters, Rice, and Gramley. Absent and not acquisitions approved as of April 1983. voting: Governor Martin. 5. Under the Department of Justice merger guidelines, a market with a post-merger HHI below 1,000 is considered unconcentrated and the Department is unlikely to challenge mergers in such markets. 6. Under provisions of the recently enacted Garn-St Germain Depository Institutions Act of 1982 the commercial lending powers of federal thrift institutions have been significantly expanded. Title III 96 JAMES MCAFEE, Stat. 1469, 1499-1500. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 447 Orders Under Section 4 of Bank Holding ed to by Protestants, involved allegations similar to Company Act those raised by Protestants with respect to this application.4 Commerce Bancshares, Inc., A formal public hearing, conducted in accordance Kansas City, Missouri with the Board's Rules of Practice for Hearings (12 C.F.R. Part 263) was held in St. Louis, Missouri, Order Approving Insurance Agency Activities on June 1-8, 1982, before an Administrative Law Judge appointed at the Board's request. A substantial Commerce Bancshares, Inc., Kansas City, Missouri, a record on the application was developed through subbank holding company within the meaning of the Bank mission of exhibits and testimony and participation of Holding Company Act ("Act"), has applied pursuant Applicant, Protestants, and counsel for the Board. to section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) In his Recommended Decision dated January 12, and section 225.4(b)(1) of the Board's Regulation Y 1983, Administrative Law Judge Max O. Regensteiner (12 C.F.R. § 225.4(b)(1)), for permission to engage concluded, based upon evidence of record, that, subde novo, through its subsidiary, Commerce Property ject to certain conditions, Applicant's proposal was and Casualty Agency, Inc. ("Agency"), in the sale of likely to result in public benefits and was not likely to property and casualty insurance directly related to result in adverse effects and, accordingly, recommendextensions of credit by Applicant's bank and nonbank ed that the Board approve the application. Protestants subsidiaries and insurance directly related to the pro- timely filed exceptions to the Administrative Law vision of other financial services by Applicant's sub- Judge's Recommended Decision. sidiaries. Such nonbank activities have been deter- Having carefully considered the entire record of the mined by the Board to be closely related to banking proceeding, including the comments received, and the and therefore permissible for bank holding companies. transcript, exhibits, written testimony, rulings, and (12 C.F.R. § 225.4(a)(9)).1 briefs filed in connection with the hearing, and the Notice of the application, affording opportunity for Recommended Decision filed by the Administrative interested persons to submit comments and views on Law Judge, together with the exceptions thereto, the the public interest factors, has been duly published.2 Board has determined that the Administrative Law The Independent Insurance Agents of America, Inc., Judge's findings of fact, conclusions of law, and recand the Independent Insurance Agents of Missouri, ommendations, as modified and supplemented herein, Inc. (collectively "Protestants") submitted comments are fully supported by the evidence of record and in opposition to the application and requested the should be adopted as the findings and conclusions of Board to order a formal hearing on the proposal. On the Board. January 12,1982, the Board issued an order scheduling Applicant is the third largest banking organization in a formal public administrative hearing to determine Missouri, with aggregate deposits of over $2 billion. whether consummation of the subject proposal could Agency would engage de novo in the sale as agent or reasonably be expected to produce benefits to the broker of property and casualty insurance in connecpublic, such as greater convenience, increased compe- tion with extensions of credit by Applicant's subsidtition, or gains in efficiency that outweigh possible iary banks.5 Such insurance would include casualty adverse effects, such as undue concentration of re- insurance to protect any property used as collateral in sources, decreased or unfair competition, conflicts of which Applicant's subsidiaries have a security interest interests, or unsound banking practices. The Board as a result of an extension of credit, and liability stated that the United States Court of Appeals for the insurance that as a general practice is written in Eighth Circuit had recently vacated a Board order conjunction with insurance protecting collateral in approving an application by Mercantile Bancorpora- which Applicant's subsidiaries have a security interest tion, Inc., St. Louis, Missouri ("Mercantile") to en- as a result of an extension of credit. Agency's activigage in property and casualty insurance and remanded the case for an evidentiary hearing.3 The Board stated 4. In the interests of economy, the hearings on these two applicathat the Mercantile application, which was also object- tions were partially consolidated. The court in Mercantile directed a hearing on the following issues: (a) the precise manner in which de novo entry was to be effected; (b) the general cost of insurance to be issued; (c) potential conflicts of interest; (d) the potential for tying 1. Because it was pending on May 1, 1982, this application is not (either coercive or voluntary); and (e) the competitive impact of the subject to the prohibitions of the Garn-St Germain Depository Institu- proposal. 658 F.2d at 576. tions Act of 1982, Pub. L. No. 97-320, § 601(D), 96 Stat. 1537 (1982). 5. The application also encompassed the sale of similar insurance 2. 46 Federal Register 48761 (1981). related to extensions of credit by applicant's two nonbank subsid- 3. Independent Insurance Agents of America, Inc. v. Board of iaries, insurance directly related to "the provision of other finan- Governors, 658 F.2d 571, reh. denied, 666 F.2d 177 (1981) cial services" by Applicant's subsidiaries, and certain safekeeping ("Mercantile"). insurance. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

448 Federal Reserve Bulletin • June 1983 ties would be conducted from a central office located decision suggests that, in assessing the public benefits at Applicant's headquarters in Kansas City. Under claimed by Applicant, the Board must determine if Applicant's proposal, insurance would be sold on bank laws cited by Protestants might restrict the manner in premises by employees of the subsidiary banks, who which Applicant contemplates carrying out the prowill be licensed insurance agents. posed activities and thus affect the likelihood of ex- Section 4(c)(8) of the Act provides that the Board pected public benefits or adverse effects. may approve a bank holding company's application to The laws governing the powers of national and engage in a nonbanking activity only after the Board Missouri banks would not affect this proposal unless has determined that the proposed activity is so closely Applicant's subsidiary banks are, to some extent at related to banking as to be a proper incident thereto. least, themselves engaged in the activity proposed by The Board has determined by regulation that the sale, Applicant. With respect to Applicant's Missouri-charas agent, of credit-related insurance and the sale of tered banks, it is unnecessary for the Board to considinsurance related to the provision of other financial er this question because, even if these banks are services are permissible nonbank activities.6 This de- viewed as engaged in selling credit property and termination was affirmed on judicial review in Ala- casualty insurance, it seems reasonably clear that they bama Association of Insurance Agents v. Board of are permitted to do so under Missouri law. In resolving Governors.7 issues of state law, the Board considers the relevant To approve an application under section 4(c)(8) of statute itself, any judicial interpretations of that law the Act, the Board must also determine that the and, in the absence of judicial construction, opinions performance of the proposed activities by a nonbank of the relevant state administrator. There is no Missubsidiary of a bank holding company can reasonably souri statute or court opinion directly pertaining to this be expected to produce benefits to the public, such as issue, but, at the Administrative Law Judge's request, greater convenience, increased competition, or gains the state Commissioner of Finance submitted an opinin efficiency, that outweigh possible adverse effects, ion on this issue, stating that Missouri banks are such as undue concentration of resources, decreased authorized to provide the type of credit-related insuror unfair competition, conflicts of interests, or un- ance proposed by Applicant based on, among other sound banking practices. things, a 1981 statute permitting a state bank to exercise all powers "necessary, proper and conve- Public Benefits and Adverse Effects nient" to effect any or all of the purposes for which it was formed.10 The Board does not believe that the Consistency with State and Federal Banking Law Commissioner's opinion is unreasonable or plainly erroneous. It is not unreasonable to view selling Protestants assert that neither national banks nor property and casualty insurance to protect the collatbanks chartered under Missouri law are expressly eral the bank has taken on an extension of credit as authorized to act as agents in selling credit property necessary and convenient to the making of the loan, and casualty insurance and that therefore Applicant's because property and casualty coverage of the collatsubsidiary banks are prohibited from engaging in the eral is a prerequisite in many cases to the making of a proposed insurance agency activities.8 However, secured loan.11 these laws relied on by Protestants govern the powers Protestants argue that if the Missouri legislature had of banks and do not by their terms prohibit the intended to permit banks to sell credit property and acquisition by a bank holding company of a nonbank casualty insurance, it would have said so expressly. subsidiary engaged in selling credit-related insurance. The very purpose of an incidental powers clause, At least one court has held, however, that the Board's however, is to avoid the necessity of enumerating determination whether public benefits may be expect- specific activities. Moreover, contrary to Protestants' ed from a particular proposal to engage in insurance claim, the Commissioner's interpretation of the scope activities depends on whether applicable laws may of necessary incidental powers does not blur the restrict or limit the manner in which the applicant distinction between a state bank and a state trust conducts the proposed services.9 The rationale of this company, which may serve as an insurance broker generally, 12 because a bank may only sell property and casualty insurance directly related to an extension 6. 12 C.F.R. § 225.4(a)(9). of credit by the bank, while trust company insurance 7. 533 F.2d 224 (5th Cir. 1976), modified on rehearing, 558 F.2d 729 (1977), cert, denied, 435 U.S. 904 (1978). 8. Applicant has both national and Missouri-chartered subsidiary 10. Mo. Ann. Stat. § 362.106(1). banks. 11. See Alabama Ass'n. of Ins. Agents v. Board of Governors, 533 9. Florida Ass'n. of Ins. Agents v. Board of Governors, 591 F.2d F.2d at 244. 334, 338-40 (5th Cir. 1979). 12. Mo. Ann. Stat. § 362.105.2(7). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 449 agency activities are under no such limitation. In their Contrary to Protestants' claims, the Board, as eviarguments on the expected convenience aspects of this denced by its consistent and longstanding practice, has proposal, Protestants recognize that the limitation to the authority to impose conditions on its approval of a credit-related insurance differentiates that activity proposal under section 4(c)(8) to eliminate from the from general insurance agency functions.13 proposal grounds that would justify denial of the With respect to national banks, the law regarding application. In any event, Applicant has not objected credit-related property and casualty insurance is less to the imposition of the condition requiring employclear. The only court opinion on the sale by national ment contracts, nor have Protestants identified any banks of such insurance ruled that the activity is not particular disputed facts relating to the operation of authorized.14 In a letter to the Administrative Law this condition that would necessitate an evidentiary Judge, the Comptroller's staff stated that this decision hearing on this point. was incorrect because, among other things, it has now been recognized that national banks may sell credit life Expected Public Benefits insurance as a permissible incidental activity and that credit property and casualty coverage may also rea- Increased Competition. Approval of Applicant's prosonably be viewed as an appropriate incidental activi- posal will add one new competitor with at least 38 ty. This staff opinion has not yet been adopted by any offices in the state of Missouri. Congress expressly court, creating uncertainty as to whether Applicant's authorized the Board to differentiate, in connection subsidiary national banks, if deemed to be engaged to with a bank holding company's application to engage some extent in the proposed activity, may do so under in nonbanking activities, between de novo entry into a the National Bank Act. field and acquisition of a going concern.16 Because Accordingly, the Administrative Law Judge recom- de novo expansion provides an additional source of mended that the application be approved on the condi- competition, the Board and the courts view such tion that employees of Applicant's national bank sub- expansion as being procompetitive in the absence of sidiaries enter into employment contracts with Agency evidence to the contrary.17 providing for the payment by the holding company of a In its ruling on the Mercantile order, the court of regular salary to those employees and permitting appeals found that the Board may not automatically Agency to control the employees' selling of credit approve all de novo acquisitions and directed the property and casualty insurance. The Board adopts Board to hold an evidentiary hearing on the precise this condition recommended by the Administrative manner in which de novo entry is to be accomplished Law Judge in order to eliminate any legal uncertainty as well as other possible adverse effects.18 Because the concerning whether the proposed activities will be hearing on this case has been held jointly with that on carried out in the manner planned by Applicant. In the the Mercantile application, the facts surrounding the Board's view, such a condition would give the holding manner of Applicant's de novo entry into credit propcompany sufficient control over the conduct of the erty and casualty insurance business also have been selling of insurance that the activity would not be examined. The record here demonstrates that approvviewed as an activity of the bank.15 al of Applicant's proposal would result in the introduction of a competitor offering a more convenient service—the ability to obtain a loan and insurance at a 13. The Commissioner also found authority to sell credit property and casualty insurance implicit in a Missouri bank's statutory author- single location. According to the record, the attracity to make loans. Mo. Ann. Stat. § 362.105.1(1). Protestants point to a tiveness of "one-stop shopping" is likely to force 1936 opinion of the Missouri Attorney General interpreting the lending independent agents to improve their services in order and other powers of state banks and concluding that the lack of express authorization precludes a state bank from selling any insur- to compete with the new entrants.19 In addition, ance. However, the fact that for eight years state banks have been Applicant will offer certain insurance products, such permitted by the Commissioner to sell credit life insurance suggests that the rationale of the Attorney General's opinion is no longer adhered to. 14. Saxon v. Georgia Ass'n. of Independent Ins. Agents, 399 F.2d 1010 (5th Cir. 1968). The court reasoned that since a national bank is 16. 12 U.S.C. § 1843(c)(8). The legislative history of the Act expressly permitted to act as an agent for life, fire, and other types of demonstrates that Congress authorized this distinction because it insurance coverage in a town with a population of less than 5,000, the viewed de novo entry as beneficial to competition. S. Rep. No. 1084, bank is prohibited from offering insurance in towns with a greater 91st Cong., 2d sess. 15, 16 (1970). population. Virtually all of Applicant's national bank subsidiaries are 17. BankAmerica Corporation (Decimus Corporation), 66 FEDERlocated in towns with a population in excess of 5,000. AL RESERVE BULLETIN 511 (1980); Citicorp (Person to Person), 65 15. Grandview Bank & Trust Co. v. Board of Governors, 550 F.2d FEDERAL RESERVE BULLETIN 507 (1979); U.N. Bancshares, Inc., 59 417, 429 (8th Cir.), cert, denied, 434 U.S. 821 (1977) (holding that as a FEDERAL RESERVE BULLETIN 204 (1973); Alabama Ass'n. of Ins. general matter, the separate corporate entities of companies in a bank Agents v. Board of Governors, 533 F.2d at 249. holding company system should be respected, unless the corporate 18. 658 F.2d at 574-75. entities are operated in a unitary fashion or there is "fraud or a 19. Protestants' claim that this competition would be unfair is complete subterfuge"). discussed below. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

450 Federal Reserve Bulletin • June 1983 as mobile home insurance, not currently offered in all er's perspective.22 The Board considers the insurance geographic markets. Finally, the record indicates that agency activities of holding companies to be an alterother bank holding companies and other financial native to, rather than a replacement for, services institutions, including one of the largest holding com- provided by independent insurance agents, and bepanies in the state,20 currently sell credit property and lieves that insurance customers should be allowed to casualty insurance. Approval of this proposal would choose between such alternatives. Protestants, on the permit Applicant to offer a similar range of services as other hand, in effect assert that customers should be these organizations and to compete even more effec- denied this choice because Applicant cannot offer a tively for banking customers.21 complete range of services. The Board finds this contention to be without merit. Greater Convenience. Applicant would place a li- Protestants also assert that because Applicant's censed insurance agent at each office of its bank or agents would spend a relatively small part of their time nonbank subsidiaries where insurance would be of- on insurance activities, the quality of their service to fered. The evidence shows that this arrangement the public would be lower than that provided by would provide increased convenience at least for those independent agents. This contention is not supported loan customers who do not already have insurance by the record. The employees of Applicant would coverage that would automatically extend to the loan provide only a few types of insurance coverage, so it is collateral or could easily be extended to cover the likely that they would develop expertise in those collateral. Such customers would be able to avoid an limited fields. Nor does the record support a finding additional visit with another agent (and the resulting that the quality of service provided by Applicant's duplicative paperwork) and to deal with a single per- agents would be significantly less than the average son knowledgeable about both aspects of the transac- quality of services provided by independent agents. tion. Protestants allege that this increased convenience, Increased Efficiency. Applicant claims that efficienfound by the Administrative Law Judge to be "self cies will be gained as a result of the proposal, resulting evident," would be offset by alleged inconveniences primarily from economies of scale due to centralizainherent in the proposed services. For example, Pro- tion of Applicant's operations. Because of a lack of testants point out that when the loan covering insured specific evidence to support these contentions, the collateral has been paid, Applicant could not renew Administrative Law Judge found little likelihood of the insurance coverage on the collateral. Nor could increased efficiency as a result of this proposal. This Applicant offer multi-car or "fleet" discounts if Appli- finding is reasonable and is adopted by the Board. cant has not extended credit on all the insured's vehicles. However, Applicant has obligated its agents Lowest Practicable Cost. Applicant has indicated that to advise customers of the limitation on the scope of it would offer insurance at the lowest practicable cost coverage Applicant offers. Thus, a customer who to the customer. This intention reflects the statement chooses insurance offered by Applicant is likely to be made by the Board in the preamble to the amendment aware of any potential inconveniences and would to Regulation Y adding insurance agency activities to presumably not purchase the insurance if it were the list of permissible activities for bank holding seriously inconvenient. The Board believes that the companies. The Board expressed its expectation that fact that a holding company either chooses not to offer certain services, or is prevented by the Board's regula- . . . any holding company or subsidiary that acts as tions from offering those services, does not represent an insurance agent on the basis of the new regulatory the kind of adverse effect with which section 4(c)(8) is provision will exercise a fiduciary responsibility—that concerned, because the adverse effect asserted by is by making its best effort to obtain the insurance at Protestants is completely avoidable from the borrow- the lowest practicable cost to the customer.23 The Administrative Law Judge found, based on testimony that Applicant could not offer the lowest 20. See First Union Bancorporation, 67 FEDERAL RESERVE BULLE- premiums in the market but would attempt to offer TIN 515 (1981). 21. Applicant also offered evidence that its de novo entry would insurance as cheaply as possible, that Applicant would have a beneficial effect on price competition. The Administrative Law comply with the Board's expectation on cost of insur- Judge found such evidence unpersuasive, particularly in light of ance. Protestants challenge this finding, asserting that the fact that the cost of insurance coverage is usually determined by the underwriter, not the agent. The Board makes no findings on any Applicant has failed to submit any evidence as to the compelling procompetitive effects due to increased price competition. relative cost of the insurance to be sold. These conten- 22. See Virginia National Bankshares, Inc., 66 FEDERAL RESERVE BULLETIN 668, 671 (1980), affd sub nom., Independent Ins. Agents of America, Inc. v. Board of Governors, 646 F.2d 868 (4th Cir. 1981) ("Virginia National"). 23. 36 Federal Register 15,525 (1971). 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Legal Developments 451 tions appear in part to be based on a misunderstanding considered a positive public benefit for purposes of the of the nature of the Board's expectation concerning section 4(c)(8) balancing test. On the other hand, the cost of credit insurance sold by bank holding evidence that an applicant would not exercise reasoncompanies. able diligence in obtaining insurance coverage at the The Board has not had prior occasion to elaborate lowest practicable cost must be viewed as an adverse on the meaning of its expectation that a bank holding effect that, when weighed against possible public benecompany would provide insurance at the lowest practi- fits, might well require denial of such an application. cable cost. Based on a review of the issues raised in There is no evidence in the record that the cost of the original rulemaking proceeding on insurance activ- the credit-related insurance sold by Applicant here ities, the Board believes that its expectation that a would necessarily be higher than the costs of comparabank holding company selling insurance would be ble coverage sold by other agents or that Applicant's under a fiduciary duty means that the holding compa- agents would not make reasonable efforts to obtain the ny should serve as agent for the loan customer/ types of coverage it chooses to sell on the best possible insured, not solely for itself or for the underwriter of terms, including the lowest cost. Applicant submitted the insurance being sold. Thus, a holding company no specific evidence on the underwriters of the credit should put aside its own interest in obtaining a com- insurance to be sold or on the relative costs of such mission and make a reasonably diligent effort to obtain insurance, but reiterated that, judged in terms of costs the insurance for the customer on the best possible as well as services provided, Applicant would endeavterms, including the lowest cost.24 Since the fiduciary or to provide insurance as cheaply as possible. In light duty to obtain insurance is limited by concerns of of this evidence the Board finds that cost considerpracticability, however, the holding company should ations would not present any adverse effects but, in also consider the quality of the services to be provided the absence of any affirmative showing of reductions in determining what constitutes the lowest cost. of costs, would produce only slight public benefits.27 In any event, it is clear that the Board does not In summary, the Board finds that this proposal is require an affirmative showing by a bank holding likely to result in benefits to the public in the form of company that the cost of the insurance it sells must be increased competition and greater convenience. reduced below the prevailing costs for the particular type of coverage involved as a prerequisite for approv- Lack of Significant Adverse Effects al of an application. Where the Board has imposed a requirement of reduced costs as a condition for engag- Decreased Competition or Undue Concentration of ing in a nonbanking activity, as it has done regarding Resources. Since Applicant would enter the credit the underwriting of credit life insurance, the Board has property and casualty insurance field de novo, this made this condition explicit in the terms of Regulation proposal would not result in the elimination of any Y itself.25 The Board has in the past approved many existing or potential competition or in any undue applications to sell credit-related insurance without concentration of resources. Protestants allege that the requiring a specific showing of a reduction in the cost proposal will have a harmful effect on independent of the insurance to be sold. In the Alabama case, for insurance agents, pointing to evidence that because of example, the court upheld the Board's determination Applicant's size and statewide presence, Agency that particular applications to sell credit-related insur- would soon reach significant size in relation to the ance, including property and casualty insurance, met typical independent agency. The fact that Applicant, the net public benefits test of section 4(c)(8) without by offering lower prices or better services, may take any specific showing that the insurance would be business away from some inefficient independent offered at a cost lower than insurance sold by competi- agents does not in itself constitute decreased competitors.26 Some applicants have made a voluntary com- tion for purposes of section 4(c)(8) for, as the Board mitment to provide insurance to their customers at has noted elsewhere, the antitrust laws are designed to below prevailing costs. Such a commitment has been protect competition, not competitors.28 In any event, there is no persuasive evidence that Agency's size alone will give it unwarranted market power, given the 24. As a general rule, any insurance agent who obtains insurance on behalf of an insured is under a fiduciary duty to the insured. E.g., Zejf Dist. Co. v. Aetna Casualty & Surety Co., 389 S.W. 2d 789, 795 (Mo. 1965); Myers, Legal and Professional Responsibilities of Agents and Brokers, in Property and Liability Insurance Handbook, 1028, 1034- 27. In directing a hearing on the Mercantile proposal, the court of 35 (J. Long and D. Gregg eds. 1965). appeals stated that the Board must consider general proposed insur- 25. 12 C.F.R. § 225.4(a)(10) ("The Board will only approve applica- ance rates in reviewing the validity of Protestants' claims that tions [to act as underwriter for credit life insurance] in which an Mercantile's rates will be much higher than those offered by indepenapplicant demonstrates that approval will benefit the consumer . . . dent agents in the relevant markets. 658 F.2d at 576 n.7. Protestants [by] a projected reduction in rates . . . ."). have not advanced such claims with respect to this application. 26. 533 F.2d at 249. (The court noted only that there was evidence 28. E.g., BankAmerica Corp (Decimus Corp.), 66 FEDERAL REof some pressure for lower prices). SERVE BULLETIN at 515. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

452 Federal Reserve Bulletin • June 1983 generally low barriers to entry into the industry and tial for voluntary tying in the context of the proposal as the fact that, while independent agencies are free to a whole is not significant. offer a full line of insurance, Agency may provide only In addition, Applicant has made a number of comproperty and casualty insurance related to extensions mitments designed to minimize the likelihood of volunof credit by Applicant's subsidiaries. Moreover, as tary tying. Applicant has committed that it would pointed out above, approval of this application would advise its customers in writing that the customer may permit Applicant to compete with at least one other choose insurance from any source, that Applicant's statewide bank holding company that currently is agent/loan officers would not discuss credit insurance authorized to provide credit property and casualty with a prospective borrower until after the credit had insurance, and to offset the potential dominance of been granted, and that the agent would not be compenthat company in this product submarket. sated based on the amount of insurance sold.32 Protestants question the likelihood of compliance with these Unfair Competition—Voluntary Tie-Ins. Protestants commitments. However, the Board's practice of reliallege that this proposal would result in the unfair tying ance on similar commitments has been approved by of insurance sales to extensions of credit. Section 106 the courts,33 the Board possesses ample authority to of the BHC Act Amendments of 197029 makes it illegal enforce such commitments,34 and Protestants have for a bank to require the purchase of some additional offered no specific evidence that such commitments service from the bank in order to obtain credit. By its would not be observed. terms, section 106, which the Board has applied by Protestants challenge the Administrative Law regulation to bank holding companies,30 prohibits both Judge's conclusions regarding evidence submitted by implicit and explicit conduct on the part of the lender Protestants relating generally to the unlikelihood of designed to convey the requirement that an additional tie-ins in bank sales of credit insurance. The Adminisservice must be purchased. Protestants have produced trative Law Judge found some of this testimony quite no evidence that Applicant has not or will not comply persuasive but concluded that the conclusions drawn with this prohibition. by Protestants from such testimony had already been Protestants also allege that, apart from explicitly rejected by prior Board decisions. Protestants assert coerced joint sales, the proposal would also produce the Judge erred in not considering the particular facts significant voluntary tying, which results when a cus- in the record on this proposal, notwithstanding prior tomer believes that he or she stands a better chance of Board determinations. In light of these objections, an obtaining a scarce product by purchasing another independent review of this evidence has been made, product or service from the same seller.31 As the and the Board concludes that the Administrative Law Board has consistently found, in accordance with Judge correctly determined that this record does not congressional and judicial teaching, the likelihood of show a substantial likelihood of voluntary tie-ins. The voluntary tying depends on the market power of the evidence cited by Protestants, which consists of severseller and the scarcity of the product offered. The al economic studies prepared by Board staff and possibility of voluntary tying is significantly reduced others, and expert testimony that tie-ins were likely where the relevant markets are competitive and the because of the dominant power of the lender in a credit number of alternative sources for the product (e.g., transaction, is based primarily on economic theory credit) is large. The record shows, as the Administra- and on facts inherent in any sale of credit insurance by tive Law Judge found, that there are at least several a banking organization and does not relate to any and, in many cases, significant numbers of banks and matter unique to Applicant's proposal. The Board has other lending institutions that serve as alternative considered and commented on this evidence or evisources of credit in the relevant geographic markets in dence very similar in the rulemaking proceeding on the which Applicant's subsidiary banks operate. Although permissibility of credit insurance activities, in congresthere is evidence of market concentration in a few sional hearings, and in many other applications under relevant markets, the banks involved represent such a the Act. For the reasons stated in the Board's testimosmall portion of Applicant's operations that the poten- ny and its orders on these occasions, the Board does 29. 12 U.S.C. §§ 1971-78. 30. 12 C.F.R. § 225.4(c)(1). The statute also provides that a person 32. As explained above, the Board has conditioned approval of this injured by an illegal tying arrangement may recover treble damages. proposal on a requirement that agents employed by Applicant's 12 U.S.C. § 1975. subsidiary national banks be compensated for their insurance activi- 31. Voluntary ties (or implicitly coerced joint sales) are to be ties by a salary from Agency. The Board expects this commitment to distinguished from truly voluntary joint sales, which may create a extend to such salaries paid by Agency. public benefit by reducing the inconvenience of searching for the 33. E.g., Virginia National, 646 F.2d at 869-70. second product. 34. E.g., 12 U.S.C. § 1818(b)(1), (b)(3). 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Legal Developments 453 not believe that such evidence demonstrates the likeli- found that such promotional practices might enhance hood of voluntary tying in the sale of credit insurance the possibility of tying if followed in the sale of credit by a banking organization, nor does the Board find property and casualty insurance. He recommended that its staffs tie-in study (taking into account criti- that conditions be imposed that would prohibit internal cisms of that study) shows substantial probability of promotional activities designed to encourage Appliadverse tying arrangements.35 cant's agents to sell property and casualty insurance, Protestants point to evidence directly related to this such as special recognition programs for successful proposal, in particular the fact that, unlike other agents, and that would require Applicant to provide insurance agency proposals, under Applicant's pro- affirmative instruction in this regard to the concerned posal the employee making the loan would also serve personnel. The Board finds these conditions are reaas the agent selling the credit insurance in a number of sonable and adopts them. Based on the facts of record, cases. As the Administrative Law Judge found, how- and in light of commitments made by Applicant, the ever, any increased potential for tying resulting from Board finds that the possibility of tying does not this arrangement would be offset by the structure of represent a serious adverse effect of this proposal.37 the relevant markets and by Applicant's commitments, especially the commitment not to discuss insur- Conflicts of Interest. Protestants also assert that the ance until after the loan has been approved. proposal would result in serious conflicts of interest The record also indicates that Applicant has because, for example, Applicant may encourage cusachieved significantly high penetration rates36 in the tomers to finance insurance premiums rather than take sale of credit-related life insurance, which is offered advantage of cheaper premium deferral plans or to directly by its subsidiary banks. However, penetration choose lower deductibles in order to obtain better rates alone do not necessarily demonstrate the extent protection for the underlying collateral. Applicant, for of implicitly coerced joint sales, and experience re- its part, states that it would offer premium deferral garding the sale of credit life insurance is not necessar- plans if offered by the underwriters selected, would ily indicative of practices in the sale of credit property not encourage the selection of low deductibles, and and casualty insurance since, unlike credit property would advise customers of the possibility of "fleet" and casualty insurance, credit life insurance is offered discounts under their existing policies if Applicant had only by lenders, and is significantly less expensive not extended credit on all of the customers' vehicles. than credit property and casualty insurance. In addition, compensation of Applicant's agents would Because of the existence of alternative sources and not depend on the amount of insurance sold and the relatively high cost, borrowers are likely to feel special rewards to employees for the sale of credit much less obligated to volunteer to purchase property property and casualty insurance would be prohibited and casualty insurance through Applicant than to under the conditions imposed on approval of this purchase credit life insurance. Moreover, the sale of application. credit life insurance by Applicant's banks does not Based on the record, the Board concludes that the appear to be subject to the anti-tying commitments possibility of adverse effects resulting from conflicts of made here with respect to the sale by Agency of credit interest as a result of the proposal is only slight. As the property and casualty coverage. court in the Alabama case stated: Nevertheless, the record indicates that Applicant has aggressively encouraged the sale of credit life [cjontrary to the argument of the NAIA parties insurance by its loan officers and has established a [Protestants], the fact that a holding company's interprogram of recognition for bank officers who achieve est as a lender and as an insurer do not totally high penetration rates. The Administrative Law Judge converge does not require the conclusion that conflicts of interest will occur.38 35. Much of this general evidence cited by Protestants relates to other types of insurance, such as credit life and title insurance, that 37. Protestants' assertion that Applicant would engage in unfair differ in material respects from credit property and casualty coverage, competition by requiring independent agencies to submit their cusor relates to lenders, such as independent finance companies, that are tomer lists in connection with loans from Applicant's subsidiaries to not subject to the comprehensive federal regulation applicable to such agencies does not appear realistic, since Applicant may sell banking institutions. Moreover, the theoretical arguments concerning credit insurance only to its loan customers, a fact that may be the dominant position of a creditor in a loan transaction are countered independently obtained from Applicant's own records. Nor does it by accepted economic doctrine that such power is diluted by the appear that a banking organization would obtain any unfair advantage existence of other sources of credit. Finally, the Board has, in by having exclusive access to prospective customers for insurance at testimony presented to Congress, explained why the criticisms of its the time they seek a loan and hence have most need of insurance staff study do not undermine the conclusions reached by the study. coverage. These same customers are very likely to have a relationship 36. Penetration rate refers to the percentage of loan customers of a with a non-bank-related agent for types of insurance, i.e., ordinary life particular lender who also purchase credit insurance from the lender insurance, that a banking organization may not sell. or its affiliate. 38. 533 F.2d at 252. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

454 Federal Reserve Bulletin • June 1983 Protestants' Procedural Claims Based upon the foregoing and other considerations reflected in the record, the Board has determined that Protestants object to the Administrative Law Judge's the balance of the public interest factors that the Board rejection of Protestants' motion to strike the brief filed is required to consider under section 4(c)(8) is favorby counsel representing the Board in this proceeding, able. Accordingly, the application is hereby approved, which Protestants assert was biased against them. subject to the conditions that (1) all employees of Since this motion was without merit, the Administra- Applicant's national bank subsidiaries engaged in selltive Law Judge clearly did not abuse his discretion in ing credit property and casualty insurance enter into denying it. A review of the record indicates that Board employment contracts with Agency providing for the counsel did not unfairly carry Applicant's burden of payment of a regular salary by the holding company to proof.39 The Board's regulations governing formal such employees and permitting Agency to control the hearings do not prohibit Board counsel from taking a employees' sale of insurance; and that (2) neither position on the evidence adduced at a hearing, espe- Applicant nor any of its subsidiaries undertake internal cially if, as here, the Board has already taken positions promotional activities, including employee recognition on the legal ramifications of many of the facts in- and similar programs, designed to encourage Applivolved.40 The fact that such positions were adverse to cant's agents to sell credit property and casualty Protestants does not demonstrate unfair bias. More- insurance, and that Applicant provide instruction to over, the lack of prejudice to Protestants is further such agents concerning this requirement. This deterdemonstrated by the fact that Protestants were able to, mination is subject to the conditions set forth in and did, submit to the Administrative Law Judge and section 225.4(c) of Regulation Y and to the Board's the Board briefs pointing out in detail what Protestants authority to require such modification or termination believed to be errors in the positions taken by Board of the activities of a holding company or any of its counsel. Protestants' claim that the Administrative subsidiaries as the Board finds necessary to assure Law Judge was unduly influenced by Board counsel is compliance with the provisions and purposes of the without merit. It is evident from the Recommended Act and the Board's regulations and orders issued Decision that the Administrative Law Judge conduct- thereunder or to prevent evasion thereof. The Board ed an independent review of the evidence and argu- has also relied on the commitments made by Applicant ments and, indeed, did not accept Board counsel's with regard to this proposal and is prepared to ensure arguments on some points. compliance with those commitments. Protestants also request the opportunity to present The transaction shall be made not later than three oral argument before the Board on this case. In the months after the effective date of this Order, unless Board's view, the numerous briefs and other submis- such period is extended for good cause by the Board or sions of the parties adequately explain the issues by the Federal Reserve Bank of Kansas City, pursuant involved and, accordingly, oral argument before the to delegated authority. Board at this time would serve no useful purpose. By order of the Board of Governors, effective May 31, 1983. Based upon all evidence and legal arguments presented by the parties, the Board finds that consummation Voting for this action: Vice Chairman Martin and Goverof this proposal, subject to the conditions imposed in nors Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Partee. Present and abstainthis Order, may not reasonably be expected to proing: Governor Wallich. duce any significant undue concentration of resources, decreased or unfair competition, conflicts of interests, JAMES MCAFEE, unsound banking practices or other adverse effects. [SEAL] Associate Secretary of the Board The Board further finds that public benefits in the form of increased competition and greater convenience can reasonably be expected to result from this proposal, Florida Coast Banks, Inc., and that such public benefits are sufficient to outweigh Pompano Beach, Florida the slight possibility that adverse effects, such as voluntary tying or conflicts of interest, might result Midlantic Banks, Inc., from this proposal. Edison, New Jersey 39. Indeed, Board counsel's cross-examination of Applicant's wit- Order Approving the Opening of Additional Offices ness demonstrated that the strength of its commitment on cost of insurance sold was not what it appeared to be initially. of Florida Coast Midlantic Trust Company, NA. 40. The Board's rules provide that Board counsel "shall represent the Board in a nonadversary capacity for the purpose of developing Florida Coast Banks, Inc., Pompano Beach, Florida for the record information relevant to the issues to be determined by the presiding officer and the Board." 12 C.F.R. § 263.6(d). ("Florida Coast"), and Midlantic Banks, Inc., Edison, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 455 New Jersey ("Midlantic"), both bank holding compa- and Trust Company of Palm Beach County, Boynton nies within the meaning of the Bank Holding Company Beach, Florida ("First Bank"). Therefore, consum- Act ("BHC Act") (12 U.S.C. § 1841 et seq.), have mation of this proposal would eliminate some existing applied for the Board's approval, under section 4(c)(8) competition between First Bank and Trust Company of the BHC Act (12 U.S.C. § 1843(c)(8)) and section in the market for trust services in the eastern Palm 225.4(b) of the Board's Regulation Y (12 C.F.R. Beach County banking market. § 225.4(b)), to establish in Boca Raton and Palm In this regard, Florida Coast and Midlantic have Beach, Florida, de novo offices of their joint venture stated that Trust Company would not seek directly or trust company, Florida Coast Midlantic Trust Compa- indirectly referrals of trust customers from the retail ny, N.A., Lighthouse Point, Florida ("Trust Compa- banking network or trust operations of First Bank. The ny"). The Board previously authorized Midlantic and de novo offices would seek customers in eastern Palm Florida Coast to establish Trust Company as a joint Beach County who do not have a banking or fiduciary venture.1 Trust Company engages in functions or relationship with First Bank. Further, the market for activities that may be performed by a trust company. provision of trust services in eastern Palm Beach Such activities have been found by the Board to be County is not concentrated and there are numerous closely related to banking (12 C.F.R. § 225.4(a)(4)). other providers of trust services in that market. Based Notice of the application, affording opportunity for on the foregoing, the Board concludes that consummainterested persons to submit comments and views has tion of this proposal would not have an adverse effect been duly published. 48 Federal Register 11,511 and on existing competition for trust services in the eastern 16,540 (March 18 and April 18, 1983). The time for Palm Beach County banking market. filing comments and views has expired and the Board With regard to the effect of this proposal on probahas considered the application and all comments re- ble future competition, the Board previously deterceived in light of the factors set forth in section 4(c)(8) mined that Midlantic is not a likely independent enof the BHC Act. trant into the markets for trust services in Florida Midlantic controls seven banks with aggregate de- served by Florida Coast and Florida Coast is not a posits of approximately $3.2 billion and is the second likely entrant into the New Jersey markets served by largest bank holding company in New Jersey.2 Midlantic.5 The Board also found that, since the Through its nonbanking subsidiaries, Midlantic is en- barriers to entry in the trust business are low, there are gaged in the activities of mortgage banking, equipment numerous potential entrants in this market. The Board leasing, factoring, and holding overseas investments. has reviewed the facts and circumstances relating to Midlantic also engages in the activity of providing trust the instant applications in this regard and believes it is services through its subsidiary banks. Midlantic man- appropriate to reaffirm its previous determinations. ages $1.4 billion in trust assets through its lead bank. Accordingly, the Board concludes that consummation Florida Coast controls two banks with aggregate of this proposal would not adversely affect probable deposits of approximately $358.9 million and is the future competition in any market. twentieth largest bank holding company in Florida. Consummation of this proposal would provide a Florida Coast also provides trust services through its new source of trust services at two locations in eastern subsidiary banks. Palm Beach County. This proposal, therefore, may be Trust Company currently operates through one of- expected to increase competition for trust services in fice, which is located in the Miami-Fort Lauderdale eastern Palm Beach County and provide greater conbanking market.3 This proposal represents an expan- venience to the communities served, as well as to sion of Trust Company's operations into the eastern Midlantic's trust customers who move to Florida. In Palm Beach County banking market.4 Midlantic does addition, the combination of Midlantic's expertise in not provide trust services in eastern Palm Beach the provision of trust services with Florida Coast's County. However, Florida Coast engages in providing knowledge of the relevant market is likely to result in full service trust and fiduciary services in eastern Trust Company's becoming capable of competing for Palm Beach County through its subsidiary, First Bank trust services with the large banking organizations in the eastern Palm Beach County banking market. There is no evidence in the record to indicate that consummation of the proposal would result in undue 1. Florida Coast Banks, Inc., and Midlantic Banks, Inc., 68 FEDER- concentration of resources, decreased or unfair com- AL RESERVE BULLETIN 781 (1982). petition, conflicts of interests, unsound banking prac- 2. Banking data for Midlantic and Florida Coast are as of June 30, 1982. 3. The Miami-Fort Lauderdale banking market consists of Dade and Broward counties, Florida. 4. The eastern Palm Beach County banking market consists of the 5. Florida Coast Banks, Inc., and Midlantic Banks, Inc., supra at eastern portions of Palm Beach County, Florida. 781, 782. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

456 Federal Reserve Bulletin • June 1983 tices, or other adverse effects on the public interests.6 Mercantile Bancorporation, Inc., Accordingly, the Board concludes that the balance of St. Louis, Missouri public interest factors that it must consider under section 4(c)(8) of the BHC Act favors approval. In Order Approving Insurance Agency Activities addition, financial and managerial resources and future prospects of Florida Coast, Midlantic and Trust Mercantile Bancorporation, Inc., St. Louis, Missouri, Company are considered consistent with approval of a bank holding company within the meaning of the the applications and the Board has determined that the Bank Holding Company Act ("Act"), has applied applications should be approved. pursuant to section 4(c)(8) of the Act (12 U.S.C. This determination is subject to the conditions set § 1843(c)(8)) and section 225.4(b)(1) of the Board's forth in section 225.4(c) of Regulation Y and to the Regulation Y (12 C.F.R. § 225.4(b)(1)), for permission Board's authority to require such modifications or to engage de novo, through its subsidiary, MBI Insurterminations of the activities of bank holding compa- ance Agency, Inc., St. Louis, Missouri ("MBI"), in nies or their subsidiaries as the Board finds necessary the sale of property and casualty insurance directly to assure compliance with the provisions and purposes related to extensions of credit by Applicant's subsidof the BHC Act and the Board's regulations and orders iary banks in Missouri. Such nonbank activities have issued thereunder or to prevent evasions of the BHC been determined by the Board to be closely related to Act. Finally, inasmuch as the Board has extensively banking and therefore permissible for bank holding considered the offering of trust services through the companies (12 C.F.R. § 225.4(a)(9)).1 instant joint venture between Florida Coast and Mid- In September 1979, Applicant submitted an applicalantic and has determined that the public interest tion to engage de novo through MBI in the sale of considerations of section 4(c)(8) favor approval of credit-related property and casualty insurance. Notice these applications, the Board has determined that of the application, affording opportunity for interested future applications by Midlantic and Florida Coast to persons to submit comments on the public interest extend Trust Company's activities to additional offices factors was published.2 The application was protested may be processed in the same manner as other de novo by the Independent Insurance Agents of America, applications under the provisions of section 225.4(b)(1) Inc., and the Independent Insurance Agents of Misof Regulation Y (12 C.F.R. § 225.4(b)(1)). Accordingly souri (collectively "Protestants"). authority is hereby delegated to the Federal Reserve On August 22, 1980, the Board issued an Order Banks of New York and Atlanta jointly to take action approving the application, finding that the application with respect to applications properly filed as predescribed the proposed activities with sufficient clarity scribed in that section. and that the proposal was likely to have a procompet- The proposed activities shall not commence later itive effect and was not likely to result in the tying of than three months after the effective date of this insurance to the extensions of credit by Applicant's Order, unless such period is extended for good cause banks, reduced convenience, or other adverse efby the Board or by the Federal Reserve Banks of fects.3 Finding no disputed issue of material fact, the Atlanta and New York, pursuant to delegated author- Board denied Protestants' request for a formal hearing ity. on the proposal.4 By order of the Board of Governors, effective Protestants sought judicial review of the Board's May 23, 1983. Order and, on September 1, 1981, the United States Voting for this action: Vice Chairman Martin and Gover- Court of Appeals for the Eighth Circuit vacated the nors Wallich, Teeters, Rice, and Gramley. Absent and not Board's Order and remanded the application to the voting: Chairman Volcker and Governor Partee. Board for an evidentiary hearing.5 In particular, the Court directed the Board to afford opportunity for JAMES MCAFEE, presentation of documentary evidence and testimony [SEAL] Associate Secretary of the Board on the following issues: (a) The precise manner in which Mercantile's de novo entry into the proposed 6. In Lewis v. BT Investment Managers, Inc., 447 U.S. 27 (1980), insurance agency activities is to be effected; (b) the the Supreme Court held a provision of Florida law (Fla. Stat. Ann. § 658.29 (West 1981 Supp.)) that generally prohibited an out-of-state bank or bank holding company from acquiring a trust company or 1. Because it was pending on May 1, 1982, this application is not investment advisory company in Florida, to be unconstitutional at subject to the prohibitions of the Garn-St Germain Depository Instituleast insofar as it related to the acquisition of an investment advisory tions Act of 1982. Pub. L. No. 97-320, § 601(D), 96 Stat. 1537 (1982). company. The rationale of that decision is directly applicable to the 2. 44 Federal Register 64,564 (1979). trust company prohibitions of section 658.29. The State of Florida has 3. 66 FEDERAL RESERVE BULLETIN 799 (1980). not objected upon the basis of this statute to previous applications of 4. Id. at 801-02. this type. Accordingly, the Board concludes that section 658.29 does 5. Independent Insurance Agents v. Board of Governors, 658 F.2d not bar Midlantic's participation in this proposal. 571 (8th Cir.), reh. denied, 664 F.2d 177 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 457 general cost of insurance to be issued by MBI in $3.1 billion. Applicant proposes to act de novo as comparison to insurance issued by independent agen- agent or broker for property and casualty insurance cies; (c) the potential conflict of interest that may directly related to extensions of credit by its subsidiary result when Mercantile's loan officer and insurance banks. These insurance activities would be performed agent are the same person; (d) the potential for tying through MBI, a Missouri corporation that will be a (coercive and voluntary) the issuance of loan approval non-banking subsidiary of Applicant. MBI's activities to the purchase of insurance; and (e) the competitive would be conducted from a central office located at impact of Mercantile's entry into the relevant insur- Applicant's headquarters in St. Louis. Under Appliance market in relation to existing insurance agencies. cant's proposal, insurance would be sold on bank On January 12, 1982, in accordance with the deci- premises by employees of its subsidiary banks, who sion of the Eighth Circuit, the Board issued an Order will be licensed insurance agents. scheduling a formal public administrative hearing on Section 4(c)(8) of the Act provides that the Board Mercantile's application. In the interests of adminis- may approve a bank holding company's application to trative economy, the hearing on this application was engage in a nonbanking activity if the Board deterpartially consolidated with the hearing ordered by the mines that the proposed activity is so closely related to Board on a pending application by Commerce Banc- banking as to be a proper incident thereto. The Board shares, Inc Kansas City, Missouri, to engage in has determined by regulation that the sale, as agent, of v similar activities. Protestants have also objected to the credit-related insurance is a permissible nonbanking Commerce application. activity.6 This determination was affirmed on judicial A formal public hearing on both applications, con- review in Alabama Association of Insurance Agents v. ducted in accordance with the Board's Rules of Prac- Board of Governors J tice for Formal Hearings (12 C.F.R. Part 263) was held To approve an application under section 4(c)(8) of in St. Louis, Missouri on June 1-8, 1982, before an the Act, the Board must also determine that the Administrative Law Judge appointed at the Board's performance of the proposed activities by a nonbank request. A substantial record on the application was subsidiary of a bank holding company can reasonably developed through submission of exhibits and testimo- be expected to produce benefits to the public, such as ny and participation of Applicant, Protestants, and greater convenience, increased competition, or gains counsel for the Board. in efficiency, that outweigh possible adverse effects, In his Recommended Decision dated January 12, such as undue concentration of resources, decreased 1983, Administrative Law Judge Max O. Regensteiner or unfair competition, conflicts of interests, or unconcluded, based upon evidence of record, that the sound banking practices. application should be approved on condition that Applicant comply with the Board's requirements con- Sufficiency of the Description of the Proposal cerning the cost of insurance to be sold. In all other respects, Judge Regensteiner found that the proposal Protestants assert that Applicant's proposal is not complied with the requirements set out in § 4(c)(8) of sufficiently specific to allow the Board to analyze it the Act. Protestants and Applicant timely filed excep- under section 4(c)(8). First, Protestants allege that tions to the Recommended Decision. Applicant has failed to describe the specific types of Having carefully considered the entire record of the credit property and casualty insurance Applicant proproceedings, including the comments received, and poses to sell. However, the Administrative Law Judge the transcript, exhibits, written testimony, rulings, and admitted into the hearing record the application and briefs filed in connection with the hearing and the related correspondence,8 which contained specific ex- Recommended Decision filed by the Administrative amples of the types of credit-related insurance pro- Law Judge, together with the exceptions thereto, the posed: (1) physical damage insurance on property used Board finds for the reasons explained below that the as collateral for an extension of credit, such as fire Board's requirement concerning the cost of insurance insurance on improved real property, fire and inland to be sold does not preclude the granting of this marine insurance on household contents, boats and application. In all other respects, the Board has deter- equipment, physical damage insurance on mobile mined that the Administrative Law Judge's findings of fact, conclusions of law, and recommendations, as 6. 12 C.F.R. §§ 225.4(a)(9), 225.128(b). modified and supplemented herein, are fully supported 7. 533 F.2d 224 (5th Cir. 1976), modified on rehearing, 558 F.2d 729 (1977), cert, denied, 435 U.S. 904 (1978). by the evidence of record and should be adopted as the 8. The Board finds no error in the admission of the application and findings and conclusions of the Board. related correspondence into evidence. As Protestants have recognized Applicant is among the two largest banking organi- in their own pleadings, the standards for admission of documentary evidence applicable in administrative hearings are quite permissive. zations in Missouri, with aggregate deposits of over See 12 C.F.R. § 263.9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

458 Federal Reserve Bulletin • June 1983 homes, and collision and comprehensive coverage on basic information on the operation of its proposed automobiles; and (2) insurance customarily sold as insurance sales activity. An officer or employee at part of a package with such insurance, such as auto- each of Applicant's subsidiary banks would be a mobile liability insurance and comprehensive personal licensed agent and would not be compensated based liability coverage, as part of a homeowner's or mobile on the amount of insurance sold. The record does not homeowner's policy.9 In accordance with the decision reflect that the alleged lack of specific operational of the Administrative Law Judge and its previous details has impaired the Board's ability to assess the ruling on this application, the Board finds that the net public benefits associated with the proposal or proposed activities are described in sufficient detail to Protestant's ability to challenge this aspect of the assure compliance with the Act. The Board's determi- application. Moreover, in the Alabama Insurance nation that the sale of credit-related property and Agents case, where the applications were framed in no casualty and related liability insurance is permissible greater detail concerning day-to-day operations than necessarily permits the sale of any particular lines of Applicant's proposal here, the court expressly stated insurance that reasonably fall within that general cate- that detailed descriptions of the procedures for carrygory. Applicant has not proposed to sell types of ing on the activity are neither feasible nor required, insurance that are not credit-related property or casu- especially in the case of de novo applications where alty or other types of permissible insurance and has the applicant lacks experience in the proposed activigiven specific examples of particular lines to be of- ties.13 fered. Protestants have not alleged any prejudice resulting from being unable to identify as yet unspecified Public Benefits and Adverse Effects lines of credit-related insurance.10 Protestants also allege that, as recognized in the Consistency with State and Federal Banking Law Alabama Insurance Agents decision, they are entitled to have a specific proposal to challenge under the Protestants assert that neither national banks nor public benefits test and Applicant has not disclosed banks chartered under Missouri law are expressly many of the details concerning the manner in which authorized to act as agent in selling credit-related MBI would operate. The level of detail necessary for property and casualty insurance and that therefore application of the public benefits tests depends on the Applicant's subsidiary banks are prohibited from ennature of the determinations that must be made, which gaging in the proposed insurance agency activities.14 are "necessarily imprecise and to some degree specu- However, these laws relied on by Protestants govern lative."11 Congress could not reasonably have re- the powers of banks and do not by their terms prohibit quired a bank holding company to describe proposed the acquisition by a bank holding company of a operations of permissible nonbank activities in such nonbank subsidiary engaged in selling credit-related detail that the company could not adapt such opera- insurance. At least one court has held, however, that tions to changing market conditions without obtaining the Board's determination whether public benefits additional approval. On the other hand, the Board may be expected from a particular proposal to engage cannot carry out its statutory obligation and potential in insurance activities depends on whether applicable competitors cannot exercise their right to challenge a laws may restrict or limit the manner in which the particular application absent a reasonably specific applicant conducts the proposed services.15 The ratioproposal.12 The Board, however, adopts the Adminis- nale of this decision suggests that, in assessing the trative Law Judge's finding that Applicant's proposal public benefits claimed by Applicant, the Board must is sufficiently specific. Applicant has provided the determine if laws cited by Protestants might restrict the manner in which Applicant contemplates carrying out the proposed activities and thus affect the likeli- 9. The application also referred to insurance related to "the provi- hood of expected public benefits or adverse effects. sion of other financial services." In response to a request from the Federal Reserve Bank of St. Louis to define that phrase, Applicant The laws governing the powers of national and responded that the phrase was taken directly from Regulation Y, Missouri banks would not affect this proposal unless where it is not defined. Applicant gave as a possible example Applicant's subsidiary banks are, to some extent at insurance in connection with the servicing of mortgage loans for investors. No question has been raised concerning this aspect of the least, themselves engaged in the activity proposed by application. Applicant. With respect to Applicant's Missouri-char- 10. Approval of the application will not, as Protestants claim, give Applicant a blank check to alter its approved activities at will. Regulation Y provides that nonbanking activities approved by the Board shall not be altered in any significant respect from those considered by the Board in making its determination, unless the prior 13. 533 F.2d at 253. approval requirements of the Act are complied with. 12 C.F.R. 14. Applicant has both national and Missouri-chartered subsidiary § 225.4(c)(2). banks. 11. 533 F.2d at 246. 15. Florida Ass'n. of Ins. Agents v. Board of Governors, 591 F.2d 12. Id. at 253. 334, 338-40 (5th Cir. 1979). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 459 tered banks, it is unnecessary for the Board to consid- credit-related property and casualty insurance ruled er this question because, even if these banks are that the activity is not authorized.20 In a letter to the viewed as engaged in selling credit property and Administrative Law Judge, the Comptroller's staff casualty insurance, it seems reasonably clear that they stated that this decision was incorrect because, among are permitted to do so under Missouri law. In resolving other things, it has now been recognized that national issues of state law, the Board considers the statute banks may sell credit life insurance as a permissible itself, any judicial interpretations of that law and, in incidental activity and that credit property and casualthe absence of judicial construction, opinions of the ty coverage may also reasonably be viewed as an relevant state administrator. There is no Missouri appropriate incidental activity. This staff opinion has statute or court opinion directly pertaining to this not yet been adopted by any court, creating uncertainissue, but, at the Administrative Law Judge's request, ty as to whether Applicant's subsidiary national the state Commissioner of Finance submitted an opin- banks, if deemed to be engaged to some extent in the ion on this issue, stating that Missouri banks are proposed activity, may do so under the National Bank authorized to provide the type of credit-related insur- Act. Accordingly, the Administrative Law Judge recance proposed by Applicant based on, among other ommended that the application be approved on the things, a 1981 statute permitting a state bank to condition that employees of Applicant's national bank exercise all powers "necessary, proper and conve- subsidiaries enter into employment contracts with nient" to effect any or all of the purposes for which it MBI providing for the payment by the holding compawas formed. 16 The Board does not believe that the ny of a regular salary to those employees and permit- Commissioner's opinion is unreasonable or plainly ting MBI to control the employees' selling of credit erroneous. It is not unreasonable to view selling property and casualty insurance. The Board adopts property and casualty insurance to protect the collat- this condition recommended by the Administrative eral the bank has taken on an extension of credit as Law Judge in order to eliminate any legal uncertainty necessary, proper, and convenient to the making of concerning whether the proposed activities will be the loan, since property and casualty coverage of the carried out in the manner planned by Applicant. In the collateral is a prerequisite in many cases to the making Board's view, such a condition would give the holding of a secured loan.17 company sufficient control over the conduct of the Protestants argue that if the Missouri legislature had selling of insurance that the activity would not be intended to permit banks to sell credit property and viewed as an activity of the bank.21 casualty insurance, it would have said so expressly. Contrary to Protestants' claims, the Board, as evi- The very purpose of an incidental powers clause, denced by its consistent and longstanding practice, has however, is to avoid the necessity of enumerating the authority to impose conditions on its approval of a specific activities. Moreover, contrary to Protestants' proposal under section 4(c)(8) to eliminate from the claim, the Commissioner's interpretation of the scope activity grounds that would justify denial of the appliof necessary incidental powers does not blur the cation. In any event, Applicant has not objected to the distinction between state banks and state trust compa- imposition of the condition requiring employment connies, which may serve as insurance brokers general- tracts, nor have Protestants identified any particular ly,18 because banks may only sell property and casual- disputed facts relating to the operation of this condity insurance directly related to an extension of credit tion that would necessitate an evidentiary hearing on by the bank, while trust company insurance agency this point. activities are under no such limitation. In their arguments on the expected convenience aspects of this proposal, Protestants recognize that the limitation to and other powers of state banks and concluding that the lack of credit-related insurance differentiates that activity express authorization precludes a state bank from selling any insurfrom general insurance agency functions.19 ance. However, the fact that for eight years state banks have been permitted by the Commissioner to sell credit life insurance suggests With respect to national banks, the law is less clear. that the rationale of the Attorney General's opinion is no longer The only court opinion on the sale by national banks of adhered to. 20. Saxon v. Georgia Ass'n. of Independent Ins. Agents, 399 F.2d 1010 (5th Cir. 1968). The court reasoned that since a national bank is expressly permitted to act as an agent for a life, fire, and other types of insurance company in a town with a population of less than 5,000, the bank is prohibited from offering insurance in towns with a greater 16. Mo. Ann. Stat. § 362.106(1). population. Virtually all of Applicant's national bank subsidiaries are 17. See Alabama Ass'n. of Ins. Agents v. Board of Governors, 533 located in towns with populations in excess of 5,000. F.2d at 244. 21. Grandview Bank & Trust Co. v. Board of Governors, 550 F.2d 18. Mo. Ann. Stat. § 362.105.2(7). 417, 429 (8th Cir.), cert, denied, 434 U.S. 821 (1977). (As a general 19. The Commissioner also found authority to sell credit property matter, the separate corporate entities of companies in a bank holding and casualty insurance implicit in a Missouri bank's statutory author- company system should be respected, unless the corporate entities are ity to make loans. Mo. Ann. Stat. § 362.105.1(1). Protestants point to a operated in a unitary fashion or there is "fraud or a complete 1936 opinion of the Missouri Attorney General interpreting the lending subterfuge"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

460 Federal Reserve Bulletin • June 1983 Expected Public Benefits Greater Convenience. Applicant would place at least one licensed insurance agent at each main office of its Increased Competition. Approval of Applicant's pro- subsidiary banks. The evidence shows that this arposal will add one new competitor with 34 offices in rangement would provide increased convenience at the state of Missouri. Congress expressly authorized least for those loan customers who do not already have the Board to differentiate, in connection with a bank insurance coverage that would automatically extend to holding company's application to engage in nonbank- the loan collateral or could easily be extended to cover ing activities, between de novo entry into a field and the collateral. Such customers would be able to avoid acquisition of a going concern.22 Because de novo an additional visit with another agent (and the resulting expansion provides an additional source of competi- duplicative paperwork) and to deal with a single pertion, the Board and the courts view such expansion as son knowledgeable about both aspects of the transacbeing procompetitive in the absence of evidence to the tion. contrary.23 Protestants allege that this increased convenience, In remanding this case for a formal hearing, the found by the Administrative Law Judge to be "self court of appeals ruled that the Board may not automat- evident," would be offset by alleged inconveniences ically approve all de novo acquisitions and directed the inherent in the proposed services. For example, Prot- Board to hold an evidentiary hearing on the precise estants point out that when the loan covering insured manner in which de novo entry is to be accomplished collateral has been paid, Applicant could not renew as well as other possible adverse effects.24 The record the insurance coverage on the collateral. Nor could here demonstrates that approval of Applicant's pro- Applicant offer multi-car or "fleet" discounts if Appliposal would result in the introduction of a competitor cant has not extended credit on all the insured's offering a more convenient service—the ability to vehicles. However, Applicant has represented that it obtain both a loan and insurance at a single location. would encourage customers to take advantage of dis- According to the record, the attractiveness of "one- counts available through other agents. Thus, a customstop shopping" is likely to force independent agents to er who chooses insurance offered by Applicant is improve their services in order to compete with the likely to be aware of any potential inconveniences and new entrants.25 In addition, the record indicates that presumably would not purchase the insurance if it other bank holding companies and other financial were seriously inconvenient. The Board believes that institutions, including one of the largest holding com- the fact that a holding company either chooses not to panies in the state,26 currently sell credit property and offer certain services, or is prevented by the Board's casualty insurance. Approval of this proposal would regulations from offering those services, does not permit Applicant to offer a range of services similar to represent the kind of adverse effect with which section those offered by these organizations and thus to com- 4(c)(8) was concerned, since the adverse effect assertpete more effectively with them.27 ed by Protestants is avoidable from the borrower's perspective.28 The Board considers the insurance agency activities of holding companies to be an alternative to, rather than a replacement for, services provided by independent insurance agents, and believes that insurance customers should be allowed to 22. 12 U.S.C. § 1843(c)(8). The legislative history of the Act choose between such alternatives. Protestants, on the demonstrates that Congress authorized this distinction because it other hand, in effect assert that customers should be viewed de novo entry as beneficial to competition. S. Rep. No. 1084, 91st Cong., 2d Sess. 15, 16 (1970). denied this choice because Applicant cannot offer a 23. BankAmerica Corporation (Decimus Corporation), 66 FEDER- complete range of services. The Board finds this AL RESERVE BULLETIN 511 (1980); Citicorp (Person to Person), 65 contention to be without merit. FEDERAL RESERVE BULLETIN 507 (1979); U.N. Bancshares, Inc., 59 FEDERAL RESERVE BULLETIN 204 (1973); Alabama Ass'n. of Ins. Protestants also assert that, because Applicant's Agents, 533 F.2d at 249. agents would spend a relatively small part of their time 24. 658 F.2d at 574-75. on insurance activities, the quality of their service to 25. Protestants' claim that this competition would be unfair is discussed below. the public would be lower than that provided by 26. See First Union Bancorporation, 67 FEDERAL RESERVE BULLE- independent agents. This contention is not supported TIN 515 (1981). 27. Applicant also offered evidence that its de novo entry would by the record. The employees of Applicant would have a beneficial effect on price competition. The Administrative Law Judge found such evidence unpersuasive, particularly in light of the fact that the cost of insurance coverage is usually determined by the underwriter, not the agent, and in light of his finding that Applicant 28. See Virginia National Bankshares, Inc., 66 FEDERAL RESERVE has not committed to obtain insurance at the lowest practicable cost. BULLETIN 668, 671 (1980), afiTd sub nom.; Independent Ins. Agents of The Board makes no findings on any compelling procompetitive America Inc., v. Board of Governors, 646 F.2d 868 (4th Cir. 1981) effects due to increased price competition as a result of this proposal. ("Virginia National"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 461 provide only a few types of insurance coverage, so it is issues raised in the original rulemaking proceeding on likely that they would develop expertise in those insurance activities, the Board believes that its expeclimited fields. Nor does the record support a finding tation that a bank holding company selling insurance that the quality of service provided by Applicant's would be under a fiduciary duty means that the holding agents would be significantly less than the average company should serve as agent for the loan customer/ quality of services provided by independent agents. insured, not solely for itself or for the underwriter of the insurance being sold. Thus, a holding company Increased Efficiency. Applicant claims that efficien- should put aside its own interest in obtaining a comcies will result from its proposal, primarily because of mission and make a reasonably diligent effort to obtain the centralization of its operations. Because of a lack the insurance for the customer on the best possible of specific evidence in the record to support these terms, including the lowest cost.30 Since the fiduciary contentions, the Administrative Law Judge found little duty to obtain insurance is limited by concerns of likelihood of increased efficiency as a result of this practicability, however, the holding company should proposal. This finding is reasonable and is adopted by also consider the quality of the services to be provided the Board. in determining what constitutes the lowest cost. In any event, it is clear that the Board does not Lowest Practicable Cost. Applicant has indicated that require an affirmative showing by a bank holding it would offer insurance at the lowest practicable cost company that the cost of the insurance it sells must be to the customer. This intention reflects the statement reduced below the prevailing costs for the particular made by the Board in the preamble to the amendment type of coverage involved as a prerequisite for approvto Regulation Y adding insurance agency activities to al of an application. Where the Board has imposed a the list of permissible activities for bank holding requirement of reduced costs as a condition for engagcompanies. The Board expressed its expectation that ing in a nonbanking activity, as it has done regarding the underwriting of credit life insurance, the Board has made this condition explicit in the terms of Regulation . . . any holding company or subsidiary that acts as an insurance agent on the basis of the new regulatory Y itself.31 The Board has in the past approved many provision will exercise a fiduciary responsibility—that applications to sell credit-related insurance without is by making its best effort to obtain the insurance at requiring a specific showing of a reduction in the cost the lowest practicable cost to the customer.29 of the insurance to be sold. In the Alabama case, for example, the court upheld the Board's determination The Administrative Law Judge found, based on that particular applications to sell credit-related insurtestimony of Applicant's president that the cost of ance, including property and casualty insurance, met insurance offered by Applicant would be competitive, the net public benefits test of section 4(c)(8) without that Applicant failed to demonstrate that it would in any specific showing that the insurance would be fact offer insurance at the lowest practicable cost. The offered at a cost lower than insurance sold by competi- Administrative Law Judge further concluded that, tors.32 Some applicants have made a voluntary combecause compliance with the lowest practicable cost mitment to provide insurance to their customers at standard is a prerequisite to approval, the application below prevailing costs. Such a commitment has been should be denied absent imposition of some condition considered a positive public benefit for purposes of the requiring compliance with that standard. section 4(c)(8) balancing test. On the other hand, The Board adopts the Administrative Law Judge's evidence that an applicant would not exercise reasonfinding that no public benefits would result from cost able diligence in obtaining insurance coverage at the considerations related to Applicant's proposal, but is lowest practicable cost must be viewed as an adverse unable to adopt the recommendation of denial, which appears to be based on a misunderstanding of the nature of the Board's expectation concerning the cost of credit insurance sold by bank holding companies. 30. As a general rule, any insurance agent who obtains insurance on The Board has not had occasion prior to this applicabehalf of an insured is under a fiduciary duty to the insured. E.g., Zeff tion to elaborate on the meaning of its expectation that Dist. Co. v. Aetna Casualty & Surety Co., 389 S.W. 2d 789, 795 (Mo. a bank holding company would provide insurance at 1965); Myers, "Legal and Professional Responsibilities of Agents and Brokers", in Property and Liability Insurance Handbook, 1028, 1034the lowest practicable cost. Based on a review of the 35 (J. Long and D. Gregg, eds. 1965). 31. 12 C.F.R. § 225.4(a)(10). ("The Board will only approve applications [to act as underwriter for credit life insurance] in which an applicant demonstrates that approval will benefit the consumer . . . [by] a projected reduction in rates . . . ."). 32. 533 F.2d at 249. (The court noted only that there was evidence 29. 36 Federal Register 15,525 (1971). of some pressure for lower prices). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

462 Federal Reserve Bulletin • June 1983 effect that, when weighed against possible public bene- competition, not competitors.35 In any event, there is fits, might well require denial of such an application.33 no persuasive evidence that MBI's size alone will give The Administrative Law Judge found no evidence of it unwarranted market power, given the generally low any awareness of fiduciary duty in the testimony of barriers to entry into the industry and the fact that, Applicant's president on Applicant's cost policies. while independent agencies are free to offer a full line Applicant states that its president misunderstood an of insurance, MBI may provide only property and ambiguous standard and that Applicant would comply casualty insurance related to extensions of credit by with the meaning of the lowest practicable cost stan- Applicant's subsidiaries. Moreover, as pointed out dard as clarified by the Board. The Board has now above, approval of this application would permit Approvided some guidance as to its expectation concern- plicant to compete with at least one other statewide ing lowest practicable cost of insurance and expects bank holding company that currently is authorized to Applicant to comply with that direction. provide credit property and casualty insurance, and to There is no evidence in the record that the cost of offset the potential dominance of that company in this the credit-related insurance sold by Applicant here product submarket. would be higher than the cost of comparable coverage sold by other agents or that Applicant would not make Unfair Competition—Voluntary Tie-Ins. Protestants reasonable efforts to obtain the types of coverage it allege that this proposal would result in the unfair tying chooses to sell on the best possible terms, including of insurance sales to extensions of credit. Section 106 the lowest cost. Thus, the Board finds that cost of the Bank Holding Company Act Amendments of considerations would not present any serious adverse 197036 makes it illegal for a bank to require the effects, but would not produce any significant public purchase of some additional service from the bank in benefits.34 order to obtain credit. By its terms, section 106, which In summary, the Board finds that this proposal is the Board has applied by regulation to bank holding likely to result in benefits to the public in the form of companies,37 prohibits both implicit and explicit conincreased competition and greater convenience. duct on the part of the lender designed to convey the requirement that an additional service must be pur- Lack of Significant Adverse Effects chased. Protestants have produced no evidence that Applicant has not or would not comply with this Decreased Competition or Undue Concentration of prohibition. Resources. Since Applicant would enter the credit Protestants also allege that, apart from explicitly property and casualty insurance field de novo, this coerced joint sales, the proposal would also produce proposal would not result in the elimination of any significant voluntary tying, which results when a cusexisting or potential competition or in any undue tomer believes that he or she stands a better chance of concentration of resources. Protestants allege that the obtaining a scarce product by purchasing another proposal will have a harmful effect on independent product or service from the same seller.38 As the insurance agents, pointing to evidence that because of Board has consistently found, in accordance with Applicant's size and statewide presence, MBI would congressional and judicial teaching, the likelihood of soon reach significant size in relation to the typical voluntary tying depends on the market power of the independent agency. The fact that Applicant, by offer- seller and the scarcity of the product offered.39 The ing lower prices or better services, may take business possibility of voluntary tying is significantly reduced away from some inefficient independent agents does where the relevant markets are competitive and the not in itself constitute decreased competition for pur- number of alternative sources for a product (e.g., poses of section 4(c)(8) for, as the Board has noted elsewhere, the antitrust laws are designed to protect 35. E.g., BankAmerica Corp (Decimus Corp.), 66 FEDERAL RE- SERVE BULLETIN at 515. 36. 12 U.S.C. §§ 1971-78. 33. Although the Administrative Law Judge's findings as to the 37. 12 C.F.R. § 225.4(c)(1). The statute also provides that a person facts are entitled to weight, see Alabama Ins. Agents, 533 F.2d at 247, injured by an illegal tying arrangement may recover treble damages. the Judge's decision here on the meaning of the Board's statement on 12 U.S.C. § 1975. lowest practicable cost is a purely legal determination concerning a 38. Voluntary ties (or implicitly coerced joint sales) are to be Board-imposed expectation applying generally to all holding company distinguished from truly voluntary joint sales, which may create a insurance agency activities. public benefit by reducing the inconvenience of searching for the 34. In directing a hearing on this proposal, the court of appeals second product. stated that the Board must consider general proposed insurance rates 39. E.g., Virginia National Bancshares, Inc., 66 FEDERAL REin reviewing the validity of Protestants' claims that Mercantile's rates SERVE BULLETIN at 670 (1980); H.R. Rep. No. 1747, 91st Cong., 2d will be much higher than those offered by independent agents in the Sess. 18, reprinted in 1970 U.S. Code Cong. & Ad. News 5561, 5569; relevant markets. 658 F.2d at 576 n.7. Protestants have not advanced Alabama Ass'n. of Ins. Agents v. Board of Governors, 533 F.2d at such claims in this proceeding. 250. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 463 credit) is large. The record shows, as the Administra- a banking organization and does not relate to any tive Law Judge found, that there are at least several matter unique to Applicant's proposal. The Board has and, in many cases, significant numbers of banks and considered and commented on the same evidence or other lending institutions that serve as alternative very similar evidence in the rulemaking proceeding on sources of credit in the relevant geographic markets in the permissibility of insurance activities, in congreswhich Applicant's subsidiary banks operate. Although sional hearings, and in many other applications under there is evidence of market concentration in a few the Act. For the reasons stated in the Board's testimorelevant markets, the banks involved represent such a ny and its orders on these occasions, the Board does small portion of Applicant's operations that the poten- not believe that such evidence demonstrates the likelitial for voluntary tie-ins in the context of the proposal hood of substantial voluntary tying in the sale of credit as a whole is not significant. insurance by a banking organization, nor does the In addition, Applicant has made a number of com- Board find that its staff's tie-in study (taking into mitments designed to minimize the likelihood of volun- account criticisms of that study) shows substantial tary tying. Applicant has committed that it would probability of adverse tying arrangements.43 advise its customers in writing that the customer may Protestants point to evidence directly related to this choose insurance from any source, that Applicant's proposal, in particular the fact that, unlike other agents/loan officers would not discuss credit insurance insurance agency proposals, under Applicant's prowith a prospective borrower until after the credit had posal the employee making the loan would also serve been granted, and that the agent would not be compen- as the agent selling the insurance in some cases. As the sated based on the amount of insurance sold.40 Protes- Administrative Law Judge found, however, any intants question the likelihood of compliance with these creased potential for tying resulting from this arrangecommitments. However, the Board's practice of reli- ment would be offset by the structure of the relevant ance on similar commitments has been approved by markets and by Applicant's commitments, especially the courts,41 the Board possesses ample authority to the commitment not to discuss insurance until after the enforce such commitments,42 and Protestants have loan has been approved. offered no specific evidence that such commitments The record also indicates that Applicant has would not be observed. achieved significantly high penetration rates44 in the Protestants challenge the Administrative Law sale of credit-related life insurance, which is offered Judge's conclusions regarding evidence submitted by directly by its subsidiary banks, and in the testimony Protestants relating generally to the unlikelihood of of Applicant's president that, at least in some rural tie-ins in bank sales of credit insurance. The Adminis- banks, bank officers actively solicited credit life sales. trative Law Judge found some of this testimony quite However, penetration rates alone do not necessarily persuasive but concluded that the conclusions drawn demonstrate the extent of implicitly coerced joint by Protestants from such testimony had already been sales, and experience regarding the sale of credit life rejected by prior Board decisions. Protestants assert insurance is not necessarily indicative of likely practhe Judge erred in not considering the particular facts tices in the sale of credit property and casualty insurin the record on this proposal, notwithstanding prior ance since, unlike credit property and casualty insur- Board determinations. In light of these objections, an ance, credit life insurance is offered only by lenders, independent review of the record has been made, and and is significantly less expensive than credit property the Board concludes that the Administrative Law and casualty insurance. Judge correctly determined that this record does not Because of the existence of alternate sources and show a substantial likelihood of voluntary tie-ins. The the relatively high cost, borrowers are likely to feel evidence cited by Protestants, which consists of sever- much less obligated to volunteer to purchase property al economic studies prepared by Board staff and others, and expert testimony that tie-ins were likely because of the dominant power of the lender in a credit 43. Much of this general evidence cited by Protestants relates to other types of insurance, such as credit life and title insurance, that transaction, is based primarily on economic theory differ in material respects from credit property and casualty coverage, and on facts inherent in any sale of credit insurance by or relates to lenders, such as independent finance companies, that are not subject to the comprehensive federal regulation applicable to banking institutions. Moreover, the theoretical arguments concerning the dominant position of a creditor in a loan transaction are countered 40. As explained above, the Board has conditioned approval of this by accepted economic doctrine that such power is diluted by the proposal on a requirement that agents employed by Applicant's existence of other sources of credit. Finally, the Board has, in subsidiary national banks be compensated for their insurance activi- testimony presented to Congress, explained why the criticisms of its ties by a salary from MBI. The Board expects this commitment to staff study do not undermine the conclusions reached by the study. extend to such salaries paid by MBI. 44. Penetration rate refers to the percentage of loan customers of a 41. E.g., Virginia National, 646 F.2d at 869-70. particular lender who also purchase credit insurance from the lender 42. E.g., 12 U.S.C. § 1818(b)(1), (b)(3). or its affiliate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

464 Federal Reserve Bulletin • June 1983 and casualty insurance through Applicant than to pur- denying it. A review of the record indicates that Board chase credit life insurance. Moreover, the sale of credit counsel clearly did not unfairly carry Applicant's life insurance by Applicant's banks does not appear to burden of proof.47 The Board's regulations governing be subject to the anti-tying commitments made here with formal hearings do not prohibit Board counsel from respect to the sale by MBI of credit property and taking a position on the evidence adduced at a hearing, casualty coverage. Based on the facts of record, and in especially if, as here, the Board has already taken light of commitments made by Applicant, the Board positions on the legal ramifications of many of the finds that the possibility of tying does not represent a facts involved.48 The fact that such positions were serious adverse effect of this proposal.45 adverse to Protestants does not demonstrate unfair bias. Moreover, the lack of prejudice to Protestants is Conflicts of Interest. Protestants also assert that the further demonstrated by the fact that Protestants were proposal would result in serious conflicts of interest able to, and did, submit to the Administrative Law because, for example, Applicant may encourage cus- Judge and to the Board, briefs pointing out in detail tomers to finance insurance premiums rather than take what Protestants believed to be errors in the positions advantage of cheaper premium deferral plans or to taken by Board counsel. Protestants' claim that the choose lower deductibles in order to obtain better Administrative Law Judge was unduly influenced by protection for the underlying collateral. Applicant, for Board counsel is without merit. It is evident from the its part, states that it is in Applicant's ultimate best Recommended Decision that the Administrative Law interests not to take advantage of its customers for Judge conducted an independent review of the evishort-run profit and would not promote the sale of dence and arguments and, indeed, did not accept insurance if the borrower could obtain discounts else- Board counsel's arguments on some points.49 where. In addition, the compensation of Applicant's Protestants also request the opportunity to present agents would not depend on the amount of insurance oral argument before the Board on this case. In the sold. The record also indicates that the amount of the Board's view, the numerous briefs and other submisdeductible on insurance covering collateral is not of sions of the parties adequately explain the issues significant importance to lenders. involved and, accordingly, oral argument before the Based on the record, the Board concludes that the Board at this time would serve no useful purpose. possibility of adverse effects resulting from conflicts of Based upon all evidence and legal arguments preinterest as a result of the proposal is only slight. As the sented by the parties, the Board finds that consummacourt in the Alabama case stated: tion of this proposal, subject to the conditions imposed [c]ontrary to the argument of the NAIA parties in this Order, may not reasonably be expected to [Protestants], the fact that a holding company's inter- produce any significant undue concentration of reest as a lender and as an insurer do not totally sources, decreased or unfair competition, conflicts of converge does not require the conclusion that conflicts interests, unsound banking practices or other adverse of interest will occur.46 effects. The Board further finds that public benefits in the form of increased competition and greater conve- Protestants' Procedural Claims nience can reasonably be expected to result from this proposal, and that such public benefits are sufficient to Protestants object to the Administrative Law Judge's outweigh the slight possibility that adverse effects, rejection of Protestants' motion to strike the brief filed such as voluntary tying or conflicts of interest, might by counsel representing the Board in this proceeding, result from this proposal. which, Protestants assert, was biased against them. Based upon the foregoing and other considerations Since this motion was without merit, the Administra- reflected in the record, the Board has determined that tive Law Judge clearly did not abuse his discretion in 47. Indeed, Board counsel's cross-examination of Applicant's wit- 45. Protestants' assertion that Applicant would engage in unfair ness demonstrated that the strength of its commitment on cost of competition by requiring independent agencies to submit their cus- insurance sold was not what it appeared initially. tomer lists in connection with loans from Applicant's subsidiaries to 48. The Board's rules provide that Board Counsel "shall represent such agencies does not appear realistic, since Applicant may sell the Board in a nonadversary capacity for the purpose of developing credit insurance only to its loan customers, a fact that may be for the record information relevant to the issues to be determined by independently obtained from Applicant's own records. Nor does it the presiding officer and the Board." 12 C.F.R. § 263.6(d). appear that a banking organization would obtain any unfair advantage 49. The Board has considered Protestants' other procedural arguby having exclusive access to prospective customers for insurance at ments and finds them to be without merit. These arguments relate to the time they seek a loan and hence have most need of insurance the weight to be accorded certain record evidence. The Board believes coverage. These same customers are very likely to have a relationship that the fact that an applicant describes its proposed insurance with a non-bank-related agent for types of insurance, i.e., ordinary life operations in a written application or in the testimony of a non-expert insurance, that a banking organization may not sell. does not make the Administrative Law Judge's findings based on such 46. 533 F.2d at 252. evidence less than substantial. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 465 the balance of the public interest factors that the Board interested persons to submit comments, has been is required to consider under section 4(c)(8) is favor- given in accordance with section 4 of the Act. (48 able. Accordingly, the application is hereby approved, Federal Register 8587). The time for filing comments subject to the condition that all employees of Appli- has expired, and the Board has considered the applicacant's national bank subsidiaries engaged in selling tion and all comments received in light of the public credit property and casualty insurance enter into em- interest factors set forth in section 4(c)(8) of the Act. ployment contracts with MBI providing for the pay- Applicant, with consolidated assets of $1.4 billion, ment of a regular salary by the holding company to controls four banks in the State of Oregon. The such employees, and permitting MBI to control the activities Applicant proposes are currently performed employees' sale of insurance. This determination is by Applicant's lead bank, The Oregon Bank (total subject to the conditions set forth in section 225.4(c) of deposits of $693 million), or by Applicant's commer- Regulation Y and to the Board's authority to require cial finance company, Northwest Acceptance Corposuch modification or termination of the activities of a ration, (total assets of $346 million as of April 30, holding company or any of its subsidiaries as the 1982).1 Board finds necessary to assure compliance with the Applicant seeks approval for Orbanco Securities provisions and purposes of the Act and the Board's Corporation ("Orbanco Securities") to engage de regulations and orders issued thereunder or to prevent novo in the activities of soliciting, underwriting, dealevasion thereof. The Board has also relied on the ing in, purchasing, and selling such obligations of the commitments made by Applicant with regard to this United States, general obligations of various states proposal and is prepared to ensure compliance with and political subdivisions thereof, and such other those commitments. obligations, including money market instruments such The transaction shall be made not later than three as bankers acceptances and certificates of deposit, as months after the effective date of this Order, unless state member banks may from time to time be authosuch period is extended for good cause by the Board or rized to underwrite and deal in. These activities would by the Federal Reserve Bank of St. Louis, pursuant to be performed from an office of Orbanco Securities delegated authority. located in Portland, Oregon, and serving the states of By order of the Board of Governors, effective Washington and Oregon. These activities are not in- May 31, 1983. cluded in the list of permissible activities for bank holding companies contained in section 225.4(a) of Voting for this action: Vice Chairman Martin and Gover- Regulation Y. nors Teeters, Rice, and Gramley. Absent and not voting: In determining whether an activity is permissible Chairman Volcker and Governor Partee. Present and abstainunder section 4(c)(8) of the Act, the Board first must ing: Governor Wallich. determine that the activity is "closely related to banking or managing or controlling banks."2 In 1974, the JAMES MCAFEE, Board published for comment notice of proposed [SEAL] Associate Secretary of the Board rulemaking to add to the list of permissible bank holding company activities, underwriting and dealing Orbanco Financial Services Corporation, in government securities and other obligations that a Portland, Oregon state member bank may be authorized to underwrite or deal in.3 In orders dated October 20, 1976, and Jan- Order Authorizing Underwriting and Dealing in uary 26, 1978, the Board determined that such activi- Certain Government Securities and Money Market ties are closely related to banking. The Board decided Instruments not to add these activities to the list of permissible activities,"however, but rather to consider applications Orbanco Financial Services Corporation, Portland, to engage in the activities on a case-by-case basis. The Oregon, a bank holding company within the meaning Board found that these activities are closely related to of the Bank Holding Company Act ("Act"), has banking because national and state member banks are applied for the Board's approval under section 4(c)(8) expressly authorized by statute to engage in the activities (12 U.S.C. §§ 24 (Seventh), 335), and many banks of the Act, 12 U.S.C. § 1843(c)(8), and section 225.4(b)(1) of the Board's Regulation Y (12 C.F.R. § 225.4(b)(1)) to allow its subsidiary, Orbanco Securi- 1. All banking data are as of December 31, 1982, unless otherwise ties Corporation, to engage de novo in the activities of indicated. underwriting and dealing in certain government securi- 2. See Board of Governors v. Investment Company Institute, 450 U.S. 46 (1981); National Courier Association v. Board of Governors, ties and money market instruments. 516 F.2d 1229, (D.C. Cir. 1975). Notice of the application, affording opportunity for 3. 39 Federal Register 13007 (1974). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

466 Federal Reserve Bulletin • June 1983 do engage in the activities.4 The Board has reiterated government securities without being subject to many the view that underwriting and dealing in government of the restrictions that currently apply to a member securities and other obligations as authorized by stat- bank's conduct of these activities. The Board is conute for state member banks is closely related to cerned that the lack of restrictions on the proposed banking in approving several applications to engage in activity might create the potential for unsound banking these activities.5 The Board regards the government practices. Accordingly, to obviate the possibility that securities activities in which Orbanco has proposed to adverse effects would result from this proposal, the engage as substantially the same as those activities the Board expects that Orbanco Securities will conduct Board has approved in its previous orders. the proposed activities subject to the same restrictions In addition, Applicant proposes to underwrite and and prudential limitations under which member banks deal in bankers acceptances, certificates of deposit, currently conduct such activities.9 Any breach of and other money market instruments that state mem- these restrictions by Orbanco Securities would constiber banks may from time to time be authorized to tute an unsafe or unsound practice that could be the underwrite and deal in.6 Banks are permitted to deal subject of formal supervisory action by the Board. in these money market instruments as an incident to There is no evidence in the record that consummation the activities expressly authorized by statute and a of the proposal would result in any other effects that number of banks currently serve as dealers in bankers would be adverse to the public interest. acceptances and certificates of deposit.7 Thus, the Based upon a consideration of all the relevant facts, Board regards such activities as closely related to the Board concludes that the balance of the public banking because banks engage in such functions, and interest factors that the Board is required to consider the Board has approved such activities in a recent under section 4(c)(8) is favorable. Accordingly, the order.8 application is hereby approved. This determination is Before permitting a bank holding company to en- subject to the conditions set forth in section 225.4(c) of gage in a nonbanking activity, however, the Board also Regulation Y and to the Board's authority to require must examine any public benefits that reasonably may such modification or termination of the activities of a be expected to derive from bank holding company bank holding company or any of its subsidiaries as the performance of the activity and weigh them against Board finds necessary to assure compliance with the any possible adverse effects to determine whether the provisions and purposes of the Act and the Board's activity is a proper incident to banking or managing or regulations and orders issued thereunder, or to precontrolling banks. Applicant's proposal represents a vent evasion thereof. corporate reorganization wherein, as noted above, The transaction shall be made not later than three activities currently performed by its subsidiaries, The months after the effective date of this Order, unless Oregon Bank and the Northwest Acceptance Corpora- such period is extended for good cause by the Board or tion, will be conducted by Orbanco Securities. Since by the Federal Reserve Bank of San Francisco pursuthe proposal would result in a transfer of an activity ant to delegated authority. within the same corporate structure, approval of the By order of the Board of Governors, effective application would have no adverse competitive ef- May 9, 1983. fects. In addition, the public will benefit from improvements in operational efficiency that will result from Voting for this action: Vice Chairman Martin, and Goverimplementation of this proposal. nors Partee, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Wallich. The Board notes, however, that as a nonbank subsidiary of Applicant, Orbanco Securities would be JAMES MCAFEE, permitted to engage in underwriting and dealing in [SEAL! Associate Secretary of the Board 4. 41 Federal Register 47083 (1976); 43 Federal Register 5382 9. For example, member banks by statute are permitted to under- (1978). write certain types of public housing and dormitory bonds of states 5. Citicorp, 68 FEDERAL RESERVE BULLETIN 249 (1982); United and municipalities, provided that the amount of such securities of a Oklahoma Bankshares, Inc., 65 FEDERAL RESERVE BULLETIN 363 single issuer held by the bank does not exceed ten percent of the (1979); United Bancorp, 64 FEDERAL RESERVE BULLETIN 222 (1978); bank's capital and surplus. 12 U.S.C. § 24 (Seventh). Such securities Stepp, Inc., 64 FEDERAL RESERVE BULLETIN 223 (1978). are designated "Type II" securities in regulations of the Comptroller 6. At present, Applicant proposes to deal in only bankers accep- of the Currency. 12 C.F.R. § 1.3(a). (The regulations of the Comptroltances and certificates of deposit. These instruments are not regarded ler of the Currency generally are applicable to state member banks. as "securities" subject to the prohibitions in sections 16 and 21 of the See 12 U.S.C. § 335; 12 C.F.R. § 250.121.) Thus, Orbanco Securities Glass-Steagall Act. should not underwrite, deal in, or hold Type II securities by any issuer 7. See "Comptroller's Handbook for National Bank Examiners", § in amounts that would not be permitted if such activities were 204; M. Stigum, "The Money Market: Myth, Reality and Practices," conducted by a member bank and should not sell securities to trust 410 and 475 (1978). accounts of affiliated banks except as permitted by the regulations of 8. Citicorp, supra. the Comptroller of the Currency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments A61 Orders Under Section 3 and 4 of Bank Applicant's principals to maintain Bank's capital at Holding Company Act adequate levels. Applicant's principals have satisfactory records managing other banks, including Appli- Cedaredge Financial Services, Inc., cant's president, who will become president of Bank Denver, Colorado upon consummation of this proposal. It is anticipated that affiliation with Applicant will result in improve- Order Approving Formation of a Bank Holding ments in Bank's overall operations. Thus, Bank's Company and Commencement of General Insurance financial and managerial resources and future pros- Agency Activities pects are consistent with approval. While Applicant will incur debt in connection with this proposal, Appli- Cedaredge Financial Services, Inc., Denver, Colora- cant appears to have sufficient financial flexibility to do, has applied for the Board's approval under sec- meet its debt servicing requirements while maintaining tions 3(a)(1) and 4(c)(8) of the Bank Holding Company Bank's capital at acceptable levels. Therefore, based Act (12 U.S.C. §§ 1842(a)(1) and 1843(c)(8)) to become on these and other facts of record, the Board cona bank holding company by acquiring The First Na- cludes that considerations relating to banking factors tional Bank of Cedaredge, Cedaredge, Colorado lend weight for approval of the application. ("Bank"), and to commence general insurance agency Although consummation of the proposal would efactivities in Cedaredge, a town of less than 5,000 fect no immediate changes in the services offered by population. Bank, considerations relating to the convenience and Notice of the application, affording opportunity for needs of the community to be served are consistent interested persons to submit comments and views, has with approval of the application. been given in accordance with sections 3(b) and 4(c)(8) In connection with Applicant's proposal under secof the Act. The time for filing comments and views has tion 4(c)(8) of the Act (12 U.S.C § 1843(c)(8)) to engage expired and the Board has considered the application de novo in general insurance activities, the Board has and all comments received in light of the factors set concluded that consummation of this proposal can forth in sections 3(c) and 4(c)(8) of the Act (12 U.S.C. reasonably be expected to produce significant public §§ 1842(c) and 1843(c)(8)). benefits in the form of increased competition, efficien- Applicant is a nonoperating corporation organized cy, and convenience in the provision of insurance for the purpose of acquiring Bank, which holds depos- services to the Cedaredge community, with no signifiits of $8.2 million.1 Upon acquisition of Bank, Appli- cant adverse effects.4 Accordingly, the Board has cant would control the 272nd largest banking organiza- determined that consummation of the transaction tion in Colorado and less than 1 percent of the total would be in the public interest and that the application deposits in commercial banks in the state.2 should be approved. Bank is the 5th largest of 6 banks competing in the On the basis of the record, the application is ap- Delta banking market3 and holds approximately 6.0 proved for the reasons summarized above. This deterpercent of the total deposits in commercial banks in mination is subject to the conditions set forth in that market. Although three of Applicant's principals section 225.4(c) of Regulation Y and the Board's are associated with six other depository institutions in authority to require such modification or termination Colorado and Wyoming, none of those other deposi- of the activities of a holding company or any of its tory institutions competes in the Delta banking mar- subsidiaries as the Board finds necessary to assure ket. Since Applicant has no other subsidiaries, con- compliance with the provisions and purposes of the summation of the proposed transaction would have no Act and the Board's regulations and orders issued adverse effect on competition or on the concentration thereunder, or to prevent evasion thereof. of banking resources in any relevant area. Thus, the The acquisition of Bank shall not be consummated Board concludes that competitive considerations are before the thirtieth calendar day following the effective consistent with approval of the application. date of this Order and neither the acquisition of Bank Applicant's managerial and financial resources are nor the commencement of general insurance agency considered satisfactory, and its future prospects ap- activities shall take place later than three months after pear favorable, particularly in light of commitments by the effective date of this Order, unless such period is 4. The Board's determination that general insurance agency activi- 1. Deposit data are as of December 31, 1982. ties in towns with populations not exceeding 5,000 are closely related 2. State and market shares and rankings are based on deposit data to banking (section 225.4(a)(9)(ii)) of Regulation Y (12 C.F.R. as of December 31, 1981. § 225.4(a)(9)(h)) was undisturbed by the Garn-St Germain Depository 3. The Delta banking market is approximated by Delta County, Institutions Act of 1982. See Pub. L. 97-290, Title VI, § 601, 96 Stat. Colorado. 1536 (October 15, 1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

468 Federal Reserve Bulletin • June 1983 extended for good cause by the Board or by the ing activities."2 Under the 1956 BHC Act, the Board Federal Reserve Bank of Kansas City pursuant to denied a number of bank holding company proposals delegated authority. on the basis that they would have significant adverse By order of the Board of Governors, effective effects on state banking structure or statewide concen- May 31, 1983. tration of resources. Three such Board denials were unheld by courts in the early 1960's.3 Voting for this action: Chairman Volcker and Governors The legislative history of the 1966 Amendments to Martin, Wallich, Partee, Rice, and Gramley. Absent and not the BHC Act, which altered the text of § 3(c) to its voting: Governor Teeters. Governor Wallich abstained from present form, indicates only that the BHC Act was voting on the application to engage in insurance agency being amended to conform it to the Bank Merger Act activities. of 1966.4 The legislative history of the 1966 Amendments to the Bank Merger Act is, therefore, relevant JAMES MCAFEE, to consideration of the 1966 BHC Act Amendments. [SEAL] Associate Secretary of the Board The legislative history of the 1966 Bank Merger Act InterFirst Corporation, indicates that the amendments were merely a "re- Dallas, Texas phrasing" of the language concerning the banking factors in the 1960 Bank Merger Act5 and were not intended to limit the agencies' authority or responsibil- The Board's Order approving the merger of bank ity to consider all the factors previously relevant under holding companies and the acquisition of companies the 1960 Act. Under the Bank Merger Act of engaged in insurance and data processing activities 1960 an agency could approve a merger only if the was published in the Federal Reserve Bulletin at page agency found that the merger was in the public inter- 383 of the issue for May 1983. The following is the est. The legislative history of the 1960 Bank Merger dissenting statement of Governor Teeters. Act indicates the agencies were to consider "any lessening of competition . . . whether appreciable, Dissenting Statement of Governor Teeters perceptible, slight, substantial, serious or great . . ."6 The House Report on the 1966 Bank Merger Act I would deny this application because the combination stated: of these two large bank holding companies will have a significant adverse effect on the concentration of banking resources in the state of Texas, on existing compe- Of course, the expression of these factors in the tition in the Dallas-Fort Worth banking market, and on statute would not preclude the agencies, charged as they are with general supervisory responsibility, from probable future competition in the Tyler, Victoria, and considering in any particular case, such other factors Wichita Falls banking markets. as they may deem relevant.7 The original language in § 3(c) of the Bank Holding Company Act ("BHC Act") set forth five separate In 1966, Congress was concerned with the increasfactors for the Board to consider when reviewing a ing number of bank mergers. This concern is evibank holding company acquisition of a bank: financial denced by statements that the agencies "had been aspects, future prospects, the character of management, convenience, needs and welfare of the community, and "whether or not the effect of [the] acquisition . . . would be to expand the size or extent of the bank holding company system involved beyond limits con- 2. H. Rep. No. 609, 84th Cong. 1st Sess. 1-2 (1955); S. Rep. No. sistent with adequate and sound banking, the public 1095, 84th Cong. 1st Sess 10 (1955). 3. First Wisconsin Bankshares v. Board of Governors, 325 F.2d 946 interest, and the preservation of competition in the (7th Cir. 1963); Marine Bancorp v. Board of Governors, 325 F.2d 967 field of banking."1 (7th Cir. 1963); Northwest Bancorp v. Board of Governors, 303 F.2d 832, 842 (8th Cir. 1962). In Northwest, the Eighth Circuit stated that The competitive standard in the 1956 BHC Act is the BHC Act required the Board to view "the structure of the entire broad and the legislative history of the BHC Act industry of banking." At that time, the Supreme Court had provided indicates that Congress designed it to control the only limited guidance as to the meaning of the antitrust standard in § 7 of the Clayton Act. growth of bank holding companies, to protect and 4. 112 Cong. Rec. 12384 (1966) (remarks of Sen. Robertson). foster "the growth of independent unit banks," and to 5. H. Rep. No. 1221 , 89th Cong. 2d Sess. 4 (1966). prevent the "undue concentration of control of bank- 6. H. Rep. No. 1416, 86th Cong. 2d Sess. 10 (1960). 7. H. Rep. No. 1221 supra at 4. Also see Remarks of Sen. Robertson, Chairman of the Senate Banking Committee: "The bill means that all the factors which the regulatory agencies presently consider under the Bank Merger Act are still relevant as are, of course, the factors set out in the final paragraph of (section 1. § 3(c), ch. 240, 70 Stat. 135 (1956). 3(c)). 112 Cong. Rec. 2663 (1966). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 469 more liberal in granting approvals" and that the Bank and demographic changes in the Dallas-Fort Worth Merger Act was intended "to make bank mergers metropolis, particularly in the mid-cities area, have more difficult, not easier." 112 Cong. Rec. 2444 (1966) resulted in a merging of the Dallas and Fort Worth (Remarks of Cong. Reuss).8 Based upon the legisla- banking markets.11 When the merger is reviewed in the tive history, the 1966 amendments to the Bank Merger context of a combined Dallas-Fort Worth market, it Act and the BHC Act, therefore, could not possibly would result in a combination of the largest and fifth have been intended to narrow the powers of the largest competitors in that market, and produce a firm regulatory agencies to scrutinize competitive factors in that controls over 28 percent of the total deposits in a merger or acquisition. In my opinion, the Board commercial market. Such a merger would substantialcontinues to be responsible, under the BHC Act, for ly lessen existing competition in the market. considering the effect on state structure and concen- Even if Dallas and Fort Worth are considered to be tration of resources within a state of a merger or separate banking markets, approval of this application consolidation of large competitors in a state. would have a substantial adverse competitive effect in Under the standards as set out in the statutes and the Dallas banking market that would warrant denial. clarified by the legislative history, it is clear that the Applicant's lead bank is located in Dallas and is the combination of the two bank holding companies in this largest banking organization in the market holding 29.9 case will substantially lessen competition in commer- percent of the total deposits in commercial banks in cial banking within the state of Texas. InterFirst is the the market. First United's subsidiary in the Dallas largest banking organization in the state and controls market is the sixteenth largest banking organization in 11.56 percent of total deposits in commercial banks in the market, and holds 0.4 percent of the total deposits the state. First United is the tenth largest banking in commercial banks in the market. In view of Appliorganization in the state and controls 1.52 percent of cant's dominant position in the market and the martotal deposits in commercial banks in the state. First ket's highly concentrated structure (pre-merger HHI United is a strong competitor in Texas and has shown of 1874), it is my opinion that this merger would have a the ability to expand beyond its home market and is substantial adverse effect on competition in the Dallas the largest competitor in Fort Worth, the third largest market and should be denied. market in the state. In my opinion, elimination of First Finally, I would deny this application on the United as a competitor will substantially lessen com- grounds that the combination of these bank holding petition in Texas. companies would have a significant adverse effect on Approval will also accelerate a disturbing trend probable future competition in the Fort Worth (if that toward concentration of banking resources in Texas. market were considered as a separate market from Upon consummation of this proposal, the four largest Dallas), Tyler, Victoria, and Wichita Falls banking banking organizations in Texas will control 41.95 markets. Applicant clearly is a likely future entrant percent9 of the total deposits in commercial banks in into the Fort Worth market because Applicant already the state. This represents an increase of approximately had established a de novo bank in Fort Worth that it 10 percentage points since 1980, when the four-firm divested in anticipation of this merger. Approval of the concentration ratio was only 32.44 percent.10 The application eliminates the probability that Applicant Supreme Court stated in Brown Shoe Co. v. United would make a procompetitive de novo or foothold States, 370 U.S. 294, 317 (1961) that agencies have acquisition in the Fort Worth market, a result that in authority to arrest mergers at a time when the trend to my view is substantially anticompetitive. In addition, a lessening of competition in a line of commerce is in in view of First United's size and history of expansion, its incipiency. I believe that such a trend is present in I believe that First United is likely to enter the Texas and that denial of this application would "brake remaining three markets on a de novo or foothold this force at its outset and before it gather(s) momen- basis. In light of the high concentration of banking tum." 370 U.S. at 318. resources in these markets, the elimination of First Further, I believe that Fort Worth and Dallas have United as a probable future entrant is substantially combined into a single banking market. The evidence anticompetitive. of record shows that in the last ten years, economic 11. This change is reflected in the growing importance of the 8. Accord. 112 Cong. Rec. 2441, 2451, 2442, 2443 (1966) (Remarks regional airport which serves both cities and straddles Tarrant and of Cong. Patman, Minish, Widnall, and Multner, respectively); also S. Dallas County and the combination of Dallas and Forth Worth into Rep. No. 1179, 89th Cong. 2d Sess. 11 (1966). one SMSA. 9. This figure reflects deposit data as of June 30, 1982 and bank Although it is 30 miles from center-city Dallas to center-city Fort holding company formations and acquisitions approved as of Worth, the distance between the city limits is far smaller. It is also March 31, 1983. important to note that in a state the size of Texas, 30 miles is a less 10. This figure reflects deposit data as of June 30, 1980. significant distance than it might be in a smaller, Eastern state. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

470 Federal Reserve Bulletin • June 1983 The Board has proposed guidelines regarding proba- nies that have substantially anticompetitive conseble future competition as a method of addressing the quences. standards set out by the United States Court of I believe the Board should develop and apply stan- Appeals for the Fifth Circuit in Mercantile Texas dards that more realistically reflect the adverse effects Corporation v. Board of Governors, 638 F. 2d 1255 (5th of the elimination of probable future competition. Cir. 1981). As I have previously indicated, these Accordingly, I dissent from the Board's decision to guidelines will be difficult to enforce. Today's action in approve this application. Texas reaffirms my belief that the guidelines, as proposed, permit combinations of bank holding compa- April 20, 1983 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During May 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) First Bankshares, Inc., The First State Bank, May 17, 1983 Barboursville, West Virginia Barboursville, West Virginia First National Bankshares, Inc., First National Bank and Trust Company, May 16, 1983 Stuart, Florida Stuart, Florida The Manila Banking Corporation, Manilabank California, May 23, 1983 Manila Philippines Los Angeles, California Mercantile Bankshares Corporation, County Banking and Trust Company, May 13, 1983 Baltimore, Maryland Elkton, Maryland Merchants Bancshares, Inc., Merchants Trust & Savings Bank, May 2, 1983 Kenner, Louisiana Kenner, Louisiana Shawsville Bancorp, Inc., Bank of Shawsville, May 10, 1983 Shawsville, Virginia Shawsville, Virginia Tennessee Homestead Company, Bank of Utah, May 9, 1983 Ogden, Utah Ogden, Utah Wood County Bancorporation, Inc., Wood County Bank, May 24, 1983 Washington, D.C. Parkersburg, West Virginia By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date American Bancshares Holding Corp. American Bank & Trust Company, Dallas May 9, 1983 Shreveport, Louisiana Shreveport, Louisiana American National Bancshares, Inc., American National Bank, Kansas City May 5, 1983 Baxter Springs, Kansas Baxter Springs, Kansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 471 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Andrews Financial Corporation, First National Bank of Hamilton, Dallas April 21, 1983 Andrews, Texas Hamilton, Texas Ardmore Bancshares, Inc., Bank of Ardmore, Atlanta April 22, 1983 Ardmore, Tennessee Ardmore, Tennessee Ashley Bancstock Company, First National Bank of Crossett, St. Louis May 3, 1983 Crossett, Arkansas Crossett, Arkansas Baileyville Bancshares, Inc., Baileyville State Bank, Kansas City April 29, 1983 Baileyville, Kansas Baileyville, Kansas BancUnion Corp., Union Bank & Trust, Chicago April 25, 1983 Lancaster, Wisconsin Lancaster, Wisconsin Belmont Bancorp, Belmont County National Bank, Cleveland May 20, 1983 Bridgeport, Ohio St. Clairsville, Ohio Burns Bancorporation, Inc., Burns National Bank of Durango, Kansas City April 28, 1983 St. Paul, Minnesota Durango, Colorado CB&T Bancshares, Inc., West Georgia Financial Corporation, Atlanta April 26, 1983 Columbia, Georgia Tallapoosa, Georgia Carroll County Financial Corporation, Temple, Georgia Century State Bancshares, Inc., Century State Bank, St. Louis May 20, 1983 Columbia, Missouri Columbia, Missouri CharterCorp, Thornton, Bank, Kansas City April 19, 1983 Kansas City, Missouri Nevada, Missouri Citizens Union Bancorp, Inc., Citizens Union Bank, Atlanta April 29, 1983 Rogersville, Tennessee Rogersville, Tennessee Clear Lake Bancorp, Inc., Bank of Clear Lake, Minneapolis May 20, 1983 Clear Lake, Wisconsin Clear Lake, Wisconsin Collier Bancshares Holding Company, Lower Rio Grande Valley Dallas April 22, 1983 Inc., Bancshares, Inc., McAllen, Texas La Feria, Texas The First National Bank of La Feria, La Feria, Texas The First National Bank of Mercedes, Mercedes, Texas Valley National Bank, Harlingen, Texas Commercial BancShares, Inc., Commercial Banking and Trust Richmond April 29, 1983 Parkersburg, West Virginia Company, Parkersburg, West Virginia Commercial State Bancorp, Inc., Commercial State Bancshares, Inc., Dallas May 6, 1983 Houston, Texas Houston, Texas Community Bancorp, Inc., Bank Bismarck, St. Louis April 22, 1983 Manchester, Missouri Bismarck, Missouri Cottage Grove BanCorporation, Inc., Minnesota National Bank of Minneapolis April 22, 1983 St. Paul, Minnesota Cottage Grove, Cottage Grove, Minnesota D'Arbonne Bancshares, Inc., The D'Arbonne Bank and Trust Dallas May 12, 1983 Farmers ville, Louisiana Company, Farmers ville, Louisiana Eagan BanCorporation, Inc., Minnesota National Bank of Eagan, St. Paul. Minnesota Eagan, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

472 Federal Reserve Bulletin • June 1983 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Elmore Bancshares, Inc., First National Bank of Elmore, Minneapolis April 29, 1983 Elmore, Minnesota Elmore, Minnesota F&M Bancshares, Inc., Farmers & Merchants Bank, Atlanta April 29, 1983 Leslie, Georgia Leslie, Georgia Farmers Bancshares, Inc., The Farmers Bank of Malone, Atlanta May 23, 1983 Malone, Florida Malone, Florida Financial Properties, Inc., Citizens National Bank of Jacksonville, St. Louis May 5, 1983 Jacksonville, Arkansas Jacksonville, Arkansas First American Corporation of American Heritage Corporation, Kansas City April 21, 1983 Colorado Springs, St. Paul, Minnesota St. Paul, Minnesota First and Farmers Bancshares, Inc., First and Farmers Bank of Somerset, Cleveland May 23, 1983 Somerset, Kentucky Somerset, Kentucky First Bancorp of Belleville, Inc., Fairview Heights Community Bank, St. Louis April 22, 1983 Belleville, Illinois Fairview Heights, Illinois First Illinois Corporation, The Wilmette Bank, Chicago May 18, 1983 Evanston, Illinois Wilmette, Illinois First Newport Bancshares, Inc., The First State Bank of Newport, St. Louis April 28, 1983 Newport, Arkansas Newport, Arkansas First Rockwall Bancshares, Inc., The First State Bank, Dallas May 13, 1983 Rockwall, Texas Rockwall, Texas First State Bancorp, Inc., First State Bank of Dunkirk, Chicago May 20, 1983 Marion, Indiana Dunkirk, Indiana Forstrom Bancorporation, Inc., Citizens State Bank of Clara City, Minneapolis May 12, 1983 Clara City, Minnesota Clara City, Minnesota GGB Bancshares, Inc., Grant County Bank, St. Louis April 22, 1983 Sheridan, Arkansas Sheridan, Arkansas Gresham Bancshares, Inc., State Bank, Chicago May 3, 1983 Gresham, Wisconsin Gresham, Wisconsin Hamburg Financial, Inc., State Bank of Hamburg, Minneapolis May 6, 1983 Edina, Minnesota Hamburg, Minnesota Independence Bancorp, Inc., Union Bank and Trust Company of Philadelphia May 19, 1983 Perkasie, Pennsylvania Eastern Pennsylvania, Bethlehem, Pennsylvania Cheltenham Corporation, Cheltenham, Pennsylvania JAW Bancshares Corp., Farmers State Bank, Chicago April 29, 1983 Stanhope, Iowa Stanhope, Iowa Jena Holding Company, LaSalle Bancshares, Inc., Dallas May 18, 1983 New Orleans, Louisiana Jena, Louisiana LBO Bancorp, Inc., Louisiana Bank of Ouachita Parish, Dallas April 20, 1983 West Monroe, Louisiana West Monroe, Louisiana Lake Valley Bancorp, Inc., The Peoples Bank, St. Louis May 9, 1983 Taylorsville, Kentucky Taylorsville, Kentucky Linn Holding Company, Linn State Bank, St. Louis May 2, 1983 Linn, Missouri Linn, Missouri Madison Agency Inc., Sanborn State Bank, Minneapolis May 12, 1983 Madison, Minnesota Sanborn, Minnesota Merchants Trust, Inc., Merchants Bank, Atlanta May 4, 1983 Jackson, Alabama Jackson, Alabama Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 473 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Missouri Farmers Bancshares, Inc., Maitland Bancshares, Inc., Kansas City May 3, 1983 Maitland, Missouri Maitland, Missouri Newton Financial Corporation, The Newton Trust Company, New York May 3, 1983 Newton, New Jersey Newton, New Jersey North East Bancshares, Inc., Northeast State Bank of Alabama, Atlanta May 20, 1983 Henagar, Alabama Henagar, Alabama Northway Bancshares, Inc., Richardson National Bank, Dallas May 23, 1983 Richardson, Texas Richardson, Texas Northway National Bank, Addison, Texas Oakland City Bancshares Corp., First Bank and Trust Company of St. Louis April 22, 1983 Oakland City, Indiana Oakland City, Oakland City, Indiana One Valley Bancorp of West Virginia, Security Bank of Huntington, Richmond May 20, 1983 Inc., Huntington, West Virginia Charleston, West Virginia Planters Financial Corporation, Planters Bank & Trust Company, St. Louis May 20, 1983 Hopkinsville, Kentucky Hopkins ville, Kentucky Rosedale First National Corp., First National Bank, St. Louis May 6, 1983 Rosedale, Mississippi Rosedale, Mississippi Roseville Bancorp., Inc., Mid America National Bank of Minneapolis May 13, 1983 Roseville, Minnesota Roseville, Roseville, Minnesota Security Financial Corp., Security State Bank, St. Louis April 25, 1983 Starkville, Mississippi Starkville, Mississippi St. Charles Bancshares, Inc., First National Bank of Stewartville, Minneapolis May 4, 1983 St. Charles, Minnesota Stewartville, Minnesota St. James Bancorporation, Inc., St. James Bank and Trust Company, Atlanta May 6, 1983 Lutcher, Louisiana Lutcher, Louisiana State National Corporation, The Bank & Trust Company of Chicago April 28, 1983 Evanston, Illinois Arlington Heights, Arlington Heights, Illinois Stillwater Holding Company, First State Bank of Hugo, Minneapolis May 16, 1983 Stillwater, Minnesota Hugo, Minnesota Tennessee Eastern Bancshares, Inc., Bank of Oak Ridge, Atlanta April 19, 1983 Oak Ridge, Tennessee Oak Ridge, Tennessee Terry Bancorporation, Farmers Savings Bank, Chicago May 3, 1983 Walford, Iowa Walford, Iowa Texas Southwest Bancorp, Inc., Southwest Bank, Dallas April 29, 1983 Mesquite, Texas Mesquite, Texas Trans Kentucky Bancorp, The Citizens Bank of Pikeville, Cleveland May 16, 1983 Pike ville, Kentucky Pikeville, Kentucky Tritten Bancshares, Inc., The First National Bank, St. Louis May 9, 1983 St. Robert, Missouri St. Robert, Missouri Union Illinois Company, The State Bank of Jersey ville, St. Louis May 17, 1983 East St. Louis, Illinois Jersey ville, Illinois Union National Corporation, The McDowell National Bank of Cleveland May 17, 1983 Mt. Lebanon, Pennsylvania Sharon, Sharon, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

474 Federal Reserve Bulletin • June 1983 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date United Bankers, Inc., Farmers State Bank of Madisonville, Dallas April 28, 1983 Waco, Texas Texas, Madisonville, Texas Uvalde Bancshares, Inc., The Uvalde Bank, Dallas May 20, 1983 Uvalde, Texas Uvalde, Texas Walz-Stuart Agency, Inc., First Sierra National Bank, Dallas May 20, 1983 St. Paul, Minnesota Truth or Consequences, New Mexico Whitmore Company, Inc., Whitmore Bancorporation, Inc., Chicago April 29, 1983 Corning, Iowa Corning, Iowa Yukon Temporary Holding Company, First Yukon Bancshares, Inc., Kansas City May 9, 1983 Yukon, Oklahoma Yukon, Oklahoma Section 4 Nonbanking Reserve Effective Applicant company Bank date Bent Tree Bancshares, Inc., Bent Tree Mortgage, Inc., Dallas April 21, 1983 Dallas, Texas Dallas, Texas Goodenow Bancorporation, Franck and Goodenow Insurance Chicago May 3, 1983 Wall Lake, Iowa Agency, Wall Lake, Iowa general insurance business First Interstate Bancorp, Spoor, Behrins, Campbell & Young, San Francisco May 12, 1983 Los Angeles, California New York, New York Zions Utah Bancorporation, Republic Industrial Bank, San Francisco May 19, 1983 Salt Lake City, Utah Widefield, Colorado Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective company or activity Bank date Martinius Corporation, State Bank of Rogers, Minneapolis May 17, 1983 Rogers, Minnesota Rogers, Minnesota to engage in general insurance activities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 475 ORDERS APPROVED UNDER BANK MERGER ACT By Board of Governors Effective Applicant Bank(s) Hempstead Bank, Island State Bank, May 13, 1983 Hempstead, New York Patchogue, New York Peninsula National Bank, Cedarhurst, New York By Federal Reserve Banks . n w ^ Reserve Effective Applicant Bank(s) ^ Bank Bank of West Point, First Settlers Bank, Richmond April 29, 1983 West Point, Virginia Hayes, Virginia Citizens Bank, Citizens North Side Bank, Chicago April 27, 1983 Sheboygan, Wisconsin Sheboygan, Wisconsin PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits Charles G. Vick v. Paul A. Volcker, et al., filed March against the Federal Reserve Banks in which the Board 1982, U.S.D.C. for the District of Columbia. of Governors is not named a party. Jolene Gustafson v. Board of Governors, filed March 1982, U.S.C.A. for the Fifth Circuit. Jet Courier Services, Inc., et al. v. Federal Reserve Edwin F. Gordon v. Board of Governors, et al., filed Bank of Atlanta, et al., filed February 1983, October 1981, U.S.C.A. for the Eleventh Circuit U.S.C.A. for the Sixth Circuit. (two consolidated cases). Securities Industry Association v. Board of Gover- Allen Wolfson v. Board of Governors, filed September nors, et al., filed February 1983, U.S.C.A. for the 1981, U.S.D.C. for the Middle District of Florida. Second Circuit. Bank Stationers Association, Inc., et al. v. Board of Flagship Banks, Inc. v. Board of Governors, filed Governors, filed July 1981, U.S.D.C. for the North- January 1983, U.S.D.C. for the District of Colum- ern District of Georgia. bia. Public Interest Bounty Hunters v. Board of Gover- Flagship Banks, Inc. v. Board of Governors, filed nors, et al., filed June 1981, U.S.D.C. for the October 1982, U.S.D.C. for the District of Colum- Northern District of Georgia. bia. First Bank & Trust Company v. Board of Governors, Hayton v. State of Utah, et al., filed September 1982, filed February 1981, U.S.D.C. for the Eastern Dis- U.S.D.C. for the District of Utah. trict of Kentucky. Association of Data Processing Service Organiza- 9 to 5 Organization for Women Office Workers v. tions, Inc., et al. v. Board of Governors, filed Board of Governors, filed December 1980, August 1982, U.S.C.A. for the District of Columbia. U.S.D.C. for the District of Massachusetts. Bowler v. Treasurer of the U.S., et al, filed July 1982, Securities Industry Association v. Board of Gover- U.S.C.A. for the First Circuit. nors, et al., filed October 1980, U.S.C.A. for the The Philadelphia Clearing House Association, et al. v. District of Columbia. Board of Governors, filed July 1982, U.S.D.C. for A. G. Becker, Inc. v. Board of Governors, et al., filed the Eastern District of Pennsylvania. October 1980, U.S.C.A. for the District of Colum- Richter v. Board of Governors, et al., filed May 1982, bia. U.S.D.C. for the Northern District of Illinois. A. G. Becker, Inc. v. Board of Governors, et al., filed Wyoming Bancorporation v. Board of Governors, filed August 1980, U.S.C.A. for the District of Columbia. May 1982, U.S.C.A. for the Tenth Circuit. Berkovitz, et al. v. Government of Iran, et al., filed First Bancorporation v. Board of Governors, filed June 1980, U.S.D.C. for the Northern District of April 1982, U.S.C.A. for the Tenth Circuit. California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS Domestic Financial Statistics WEEKLY REPORTING COMMERCIAL BANKS A3 Monetary aggregates and interest rates Assets and liabilities A4 Reserves of depository institutions, Reserve A20 All reporting banks Bank credit A21 Banks with assets of $1 billion or more A5 Reserves and borrowings of depository A22 Banks in New York City institutions A23 Balance sheet memoranda A6 Federal funds and repurchase agreements of A24 Branches and agencies of foreign banks large member banks A24 Commercial and industrial loans A25 Gross demand deposits of individuals, partnerships, and corporations POLICY INSTRUMENTS A7 Federal Reserve Bank interest rates FINANCIAL MARKETS A8 Reserve requirements of depository institutions A9 Maximum interest rates payable on time and A26 Commercial paper and bankers dollar savings deposits at federally insured institutions acceptances outstanding All Federal Reserve open market transactions A26 Prime rate charged by banks on short-term business loans A27 Terms of lending at commercial banks FEDERAL RESERVE BANKS A28 Interest rates in money and capital markets A29 Stock market—Selected statistics A12 Condition and Federal Reserve note statements A30 Selected financial institutions—Selected assets A13 Maturity distribution of loan and security and liabilities holdings FEDERAL FINANCE MONETARY AND CREDIT AGGREGATES A31 Federal fiscal and financing operations A14 Aggregate reserves of depository institutions A32 U.S. Budget receipts and outlays and monetary base A33 Federal debt subject to statutory limitation A15 Money stock measures and components A33 Gross public debt of U.S. Treasury—Types and A16 Bank debits and deposit turnover ownership A17 Loans and securities of all commercial banks A34 U.S. government securities dealers— Transactions, positions, and financing A35 Federal and federally sponsored credit COMMERCIAL BANKING INSTITUTIONS agencies—Debt outstanding A18 Major nondeposit funds A19 Assets and liabilities, last Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

85 Federal Reserve Bulletin • June 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 and 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 Terms 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 Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 IItteemm 1982 1983 1982 1983 Q2 Q3 Q4 Ql Dec. Jan. Feb. Mar. Apr. Reserves of depository institutions 1 Total 4.8 5.1 11.0' 1.1 11.1 -19.5' 6.6' 19.7 8.8 2 Required 5.3' 4.9 10.1 .8 8.3 -21.2 10.2 20.0 7.6 3 Nonborrowed 8.5 11.5 12.7 .6 10.9 -16.7 5.1 13.7 2.6 4 Monetary base2 7.7 6.8 8.0 8.6 8.7 4.7 11.4 15.0 6.9 Concepts of money and liquid assets3 3 Ml 3.2 6.1 13.1 14.1 10.6 9.8 22.4 15.9 -2.7 6 M2 7.0 10.9 9.3 20.3 8.9' 30.9 24.4 11.2 2.8 7 M3 8.5' 12.5 9.5 10.2 3.7' 13.0 13.6 8.2 4.3 8 L 10.5 12.1 8.8 n.a. 6.7 n.a. n.a. n.a. n.a. Time and savings deposits Commercial banks 9 Total 13.4' 18.2 3.2 12.4 5.8 27.9 8.8 2.9 6.8 10 Savings4 -1.7' -1.8 13.4 -43.4 -20.2 -85.9 -55.4 -19.9 -12.6 11 Small-denomination time5 -17.0' 18.7 -.5 -48.5 -18.5 -83.0 -63.9 -38.7 -19.5 12 Large-denomination time6 17.0 26.8 -6.8 -58.5 -44.3 -97.1 -60.9 -27.7 .8 13 Thrift institutions7 4.1 6.5' 6.2 12.1 4.1 10.8 21.3' 17.2 17.1 14 Total loans and securities at commercial banks8 -6.7 6.0 5.5 9.8 10.5 12.8 7.6 11.2 8.7 Interest rates (levels, percent per annum) Q2 Q3 Q4 Q1 Feb. Mar. Short-term rates 1 1 1 1 6 5 7 8 T D C Fe r o i e s d m c a e o s m r u a u e l r n y r t f c u i b w a n i l i l d n ls p s d 9 a o ( p 3 w e -m r b o o ( n 3 r t r - h o m w m o in n a g r t k h 10 e ) t 1 1 y 1 i 2 e .. ld .. ) 1 1 1 1 4 2 2 3 . . . . 5 4 8 00 2 2 1 1 1 1 9 1 1 0 . . . . 0 3 1 8 2 5 3 1 9 9 7 8 . . . . 2 2 9 80 5 8 0 8 8 8 8 . . . . 3 5 6 1 4 0 5 1 8 7 8. . . 1 5 8 7 0 6 8 8 8 8 . . . . 5 3 5 11 1 4 0 8 8 8 8 . . . . 7 5 3 5 7 0 5 2 Long-term rates Bonds 2 1 0 9 S U t . a S te . g a o n v d e l r o n c m al e n g t o 13 v ernment14 1 1 3 2 . . 7 3 4 3 1 1 2 1 . . 9 3 4 9 1 9 0 . . 9 7 0 2 1 9 0 . . 4 8 3 7 1 9 0 . . 5 7 0 8 1 9 1 . . 5 0 8 3 1 9 0 . . 2 8 0 0 21 Aaa utility (new issue)' 15.73 14.25 12.10 11.89 12.05 12.08 11.70 22 Conventional mortgages 16.63 15.65 13.79 13.26 13.44 13.18 13.17 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 of foreign 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 • June 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 1983 1983 Mar. Apr. May Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 p SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 155,883 159,250 160,050 157,557 160,426 159,600 162,224 159,554 159,993 159,739 2 U.S. government securities' 135,201 137,877 139,481 136,576 138,847 138,223 139,990 138,058 139,806 140,400 3 Bought outright 135,087 137,453 139,362 136,576 138,847 137,690 138,178 138,058 139,806 140,400 4 Held under repurchase agreements 114 424 119 0 0 533 1,812 0 0 0 5 Federal agency securities 8,929 8,931 8,916 8,912 8,908 8,920 9,022 8,908 8,908 8,908 6 Bought outright 8,917 8,910 8,908 8,912 8,908 8,908 8,908 8,908 8,908 8,908 7 Held under repurchase agreements 12 21 8 0 0 12 114 0 0 0 8 Acceptances 9 72 22 0 0 41 366 0 0 0 9 Loans 850 995 907 582 666 1,171 925 707 1,073 951 10 Float 1,948 1,996 2,016 2.243 2,574 1,724 2,268 2,215 1,522 1,649 11 Other Federal Reserve assets 8,946 9,379 8,708 9.244 9,431 9,521 9,653 9,667 8,684 7,831 12 Gold stock 11,138 11,137 11,133 11,138 11,137 11,135 11,135 11,134 11,132 11,132 13 Special drawing rights certificate account . 4,618 4,618 4,618 4,618 4,618 4,618 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 153,186 155,354 157,143 155,812 155,643 155,098 155,756 156,991 157,365 157,004 16 Treasury cash holdings 482 514 532 513 515 519 526 532 533 533 Deposits, other than reserves, with Federal Reserve Banks 17 Treasury 3,361 3,841 3,521 3,009 3,267 4,165 5,853 3,812 3,131 2,966 18 Foreign 244 254 244 239 236 253 258 223 272 214 19 Other 547 642 565 622 636 636 700 554 560 535 20 Required clearing balances 578 625 693 616 632 629 645 687 697 705 21 Other Federal Reserve liabilities and capital 4,858 4,995 4,959 4,883 5,018 5,015 5,173 4,894 4,867 4,985 22 Reserve accounts2 22,168 22,565 21,930 21,404 24,020 22,822 22,851 21,398 22,105 22,332 End-of-month figures Wednesday figures 1983 1983 Mar. Apr. May Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25? SUPPLYING RESERVE FUNDS 23 Reserve Bank credit outstanding 158,047 161,866 160,828 156,759 161,279 165,501 160,042 159,100 161,986 161,531 24 U.S. government securities' 136,651 141,550 141,180 135,419 138,899 141,108 138,331 136,869 141,297 140,750 25 Bought outright 136,651 137,864 141,180 135,419 138,899 137,376 138,331 136,869 141,297 140,750 26 Held under repurchase agreements 0 3,686 0 0 0 3,732 0 0 0 0 27 Federal agency securities 8,915 9,156 8,908 8,908 8,908 8,995 8,908 8,908 8,908 8,908 28 Bought outright 8,915 8,908 8,908 8,908 8,908 8,908 8,908 8,908 8,908 8,908 29 Held under repurchase agreements 0 248 0 0 0 87 0 0 0 0 30 Acceptances 0 704 0 0 0 285 0 0 0 0 31 Loans 2,808 848 1,260 519 1,263 4,073 798 1,170 2,028 1,548 32 Float 486 -1,124 850 2,559 2,717 1,274 2,398 2,305 1,951 2,225 33 Other Federal Reserve assets 9,187 10,732 8,630 9,354 9,492 9,766 9,607 9,848 7,802 8,100 34 Gold stock 11,138 11,135 11,132 11,137 11,137 11,135 11,135 11,132 11,132 11,132 35 Special drawing rights certificate account . 4,618 4,618 4,618 4,618 4,618 4,618 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 154,307 155,307 158,634 156,224 155,729 155,661 156,639 157,718 157,546 157,627 38 Treasury cash holdings 498 524 532 513 515 521 530 532 534 532 Deposits, other than reserves, with Federal Reserve Banks 39 Treasury 3,572 6,015 4,372 3,523 4,5% 6,803 4,043 3,552 2,673 2,809 40 Foreign 425 322 445 212 220 194 217 222 250 240 41 Other 535 796 679 554 620 668 559 556 517 684 42 Required clearing balances 601 641 711 615 633 634 646 689 697 705 43 Other Federal Reserve liabilities and capital 4,834 5,253 5,144 4,764 4,818 4,994 4,772 4,680 4,696 4,798 44 Reserve accounts2 22,816 22,547 19,847 19,895 23,689 25,564 22,174 20,687 24,609 23,672 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. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. MayP 1 Reserve balances with Reserve Banks' 26,163 23,385 24,252 24,604 24,804 24,431 23,530 22,168 22,565 21,930 2 Total vault cash (estimated) 19,538 19,921 19,578 19,807 20,392 21,454 20,035 19,484 19,569 19,709 3 Vault cash at institutions with required reserve balances2 13,577 13,651 13,658 13,836 14,292 14,602 13,705 13,027 13,246 13,429 4 Vault cash equal to required reserves at other institutions 2,178 2,927 2,677 2,759 2,757 2,829 2,562 2,844 2,839 2,845 5 Surplus vault cash at other institutions3 3,783 3,343 3,243 3,212 3,343 4,023 3,768 3,613 3,484 3,435 6 Reserve balances + total vault cash4 45,701 43,306 43,830 44,411 45,1% 45,885 43,565 41,652 42,134 41,639 7 Reserve balances + total vault cash used to satisfy reserve requirements4 5 41,918 39,963 40,587 41,199 41,853 41,862 39,797 38,039 38,650 38,204 8 Required reserves (estimated) 41,606 39,579 40,183 40,797 41,353 41,316 39,362 37,602 38,174 37,840 9 Excess reserve balances at Reserve Banks4 6 312 384 404 402 500 546 435 437 476 364 10 Total borrowings at Reserve Banks 642 976 455 579 697 500 557 852 993 907 11 Seasonal borrowings at Reserve Banks 53 102 86 47 33 33 39 53 82 98 12 Extended credit at Reserve Banks 149 118 141 188 187 156 277 318 407 514 Weekly averages of daily figures for week ending 1983 Mar. 23 Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 P 13 Reserve balances with Reserve Banks' 23,138 22,373 21,780 21,404 24,020 22,822 22,851 21,398 22,105 22,332 14 Total vault cash (estimated) 18,297 19,392 19,692 20,059 18,625 19,630 20,244 20,307 19,516 18,896 15 Vault cash at institutions with required reserve balances2 12,652 13,137 13,285 13,198 12,891 13,417 13,709 13,512 13,081 13,213 16 Vault cash equal to required reserves at other institutions 2,438 2,779 2,863 3,126 2,478 2,832 2,977 3,123 2,947 2,555 17 Surplus vault cash at other institutions3 3,207 3,476 3,544 3,735 3,256 3,381 3,558 3,672 3,488 3,128 18 Reserve balances + total vault cash4 41,435 41,765 41,472 41,463 42,645 42,452 43,095 41,705 41,621 41,228 19 Reserve balances + total vault cash used to satisfy reserve requirements4,5 38,228 38,289 37,928 37,728 39,389 39,071 39,537 38,033 38,133 38,100 20 Required reserves (estimated) 37,896 37,825 37,296 37,165 39,170 38,612 38,935 37,572 37,755 37,640 21 Excess reserve balances at Reserve Banks4,6 332 464 632 563 219 459 602 461 378 460 22 Total borrowings at Reserve Banks 641 897 1,762 582 666 1,171 925 707 1,073 951 23 Seasonal borrowings at Reserve Banks 59 62 80 72 77 90 101 91 91 104 24 Extended credit at Reserve Banks 346 305 328 353 405 484 493 506 519 511 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 • June 1983 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1983, week ending Wednesday BByy mmaattuurriittyy aanndd ssoouurrccee Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 One day and continuing contract 1 Commercial banks in United States 58,326 67,280 69,189 63,218 56,409 59,065 63,386 61,792 58,702 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 24,571 25,303 26,703 28,252 28,880 30,120 29,157 29,147 29,088 3 Nonbank securities dealers 4,250 4,139 4,322 4,164 5,375 5,067 4,518 5,046 6,394 4 All other 23,790 22,398 25,794 24,030 25,942 26,907 27,172 26,420 26,918 All other maturities 5 Commercial banks in United States 5,292 5,988 4,934 5,270 4,858 4,883 4,776 4,849 5,140 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 11,005 11,456 10,509 10,560 9,681 9,781 9,337 9,351 9,578 7 Nonbank securities dealers 5,518 5,992 5,323 5,566 5,944 6,263 6,227 6,422 6,525 8 All other 9,714 10,998 7,904 9,707 8,926 8,584 9,352 9,616 9,535 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 20,413 25,898 27,496 24,826 22,556 25,686 24,544 24,315 22,972 10 Nonbank securities dealers 4,356 4,481 4,532 4,252 4,315 4,332 3,932 3,858 4,287 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 credit1 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 5/31/83 date rate 5/31/83 rate 5/31/83 rate 5/31/83 rate Boston m 12/14/82 9 m 9 91/2 10 101/2 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... m 12/14/82 9 %Vi 9 9Vi 10 lO'/i 11 12/14/82 Range of rates in recent years2 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le ll v e F l . s R - . B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 IVi m 1978— July 3 7-7'/» 71/4 1981— May 5 13-14 14 1974— Apr. 25 7Vi-8 10 71/4 7'/4 8 14 14 3 0 8 Aug. 21 73/4 73/4 Nov. 2 13-14 13 Dec. 9 73/4-8 73/4 Sept. 22 8 8 6 13 13 16 73/4 73/4 Oct. 16 8-8 !/2 816 Dec. 4 12 12 20 8Vi m 1975— Jan. 6 71/4-73/4 73/4 Nov. 1 8'/2-9'/2 9V4 1982—July 20 llVi-12 iivi 10 7'/4-73/4 7>/4 3 9Vi 9 Vi 23 llVi llVi 24 71/4 7'/4 Aug. 2 1I-11V5 11 Feb. 5 7 6V 6 4 3 - / 7 4 V 4 6 6 3 3 / / 4 4 1979—J A u u ly g . 2 1 0 7 10 1 - 0 1 0Vi 1 1 0 0 Vi 1 3 6 im 11 1 1 1 0 'h Mar. 10 6'/4-63/4 6l/4 20 lOVi 10Vi 27 10-10'/! 10 14 6'/4 6'/4 Sept. 19 10Vi-ll 11 30 10 10 May 16 6-6'/4 6 21 11 11 Oct. 12 91/2-10 91h 23 6 6 Oct. 8 11-12 12 13 m 9ih 10 12 12 Nov. 22 9-9'A 9 1976— Jan. 2 1 3 9 51 5 />l/ i 6 5 5V '/! 5 1980—Feb. 15 12-13 13 Dec. 1 26 4 81/2 9 - 9 9 9 Nov. 22 5'/4-5'/i 51/4 19 13 13 15 8Vi-9 8 Vi 26 51/4 5V4 May 29 12-13 13 17 8V2 81/2 30 12 12 1977— Aug. 30 5'/4-53/4 5'/4 June 13 11-12 11 3 1 51/4-55/4 53/4 16 11 11 Sept. 2 5% 51/4 July 28 10-11 10 Oct. 26 6 6 29 10 10 Sept. 26 11 11 1978— Jan. 9 6-6 Vi 6Vi Nov. 17 12 12 20 6 Vi 6'/2 Dec. 5 12-13 13 May 11 61/2-7 7 13 13 12 7 7 In effect May 31, 1983 8Vi 8Vi 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 • June 1983 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyy dd pp ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo ttee ss rr ii vv tt,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo oo ss ff ii tt dd ee iinn pp tt oo ee ss rr ii vv tt,, aa ll aa 55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts7,8 $0 million-$2 million 7 12/30/76 3 12/30/82 $2 million-$10 million 9lA 12/30/76 Over $26.3 million 1122 1122//3300//8822 $10 million-$100 million 113/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 16'/4 12/30/76 By original maturity Less than 2xh years 3 3/31/83 TTiimmee aanndd ssaavviinnggss22 33 22''//22 yyeeaarrss oorr mmoorree 0 3/31/83 Savings 3 3/16/67 Eurocurrency liabilities TTiimmee44 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2W 1/8/76 4 years or more 1 10/30/75 Over $5 million, by maturity 30-179 days 6 12/12/74 180 days to 4 years 2Vi 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual percent above the base used to calculate the marginal reserve in the statement Statistical Digest, 1971-1975 and for prior changes, see Board's Annual Report week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was for 1976, table 13. Under provisions of the Monetary Control Act, depository reduced to the extent that foreign loans and balances declined. institutions include commercial banks, mutual savings banks, savings and loan 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97associations, credit unions, agencies and branches offoreign banks, and Edge Act 320) provides that $2 million of reservable liabilities (transaction accounts, corporations. nonpersonal time deposits, and Eurocurrency liabilities) of each depository 2. Requirement schedules are graduated, and each deposit interval applies to institution be subject to a zero percent reserve requirement. The Board is to adjust that part of the deposits of each bank. Demand deposits subject to reserve the amount of reservable liabilities subject to this zero percent reserve requirerequirements were gross demand deposits minus cash items in process of ment each year for the next succeeding calendar year by 80 percent of the collection and demand balances due from domestic banks. percentage increase in the total reservable liabilities of all depository institutions, The Federal Reserve Act as amended through 1918 specified different ranges of measured on an annual basis as of June 30. No corresponding adjustment is to be requirements for reserve city banks and for other banks. Reserve cities were made in the event of a decrease. Effective Dec. 9, 1982, the amount of the designated under a criterion adopted effective Nov. 9, 1972, by which a bank exemption was established at $2.1 million. In determining the reserve requirehaving net demand deposits of more than $400 million was considered to have the ments of a depository institution, the exemption shall apply in the following order: character of business of a reserve city bank. The presence of the head office of (1) nonpersonal money market deposit accounts (MMDAs) authorized under 12 such a bank constituted designation of that place as a reserve city. Cities in which CFR section 1204.122; (2) net NOW accounts (NOW accounts less allowable there were Federal Reserve Banks or branches were also reserve cities. Any deductions); (3) net other transaction accounts; and (4) nonpersonal time deposits banks having net demand deposits of $400 million or less were considered to have or Eurocurrency liabilities starting with those with the highest reserve ratio. With the character of business of banks outside of reserve cities and were permitted to respect to NOW accounts and other transaction accounts, the exemption applies maintain reserves at ratios set for banks not in reserve cities. only to such accounts that would be subject to a 3 percent reserve requirement. Effective Aug. 24, 1978, the Regulation M reserve requirements on net balances 6. For nonmember banks and thrift institutions that were not members of the due from domestic banks to their foreign branches and on deposits that foreign Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3, branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent 1987. For banks that were members on or after July 1, 1979, but withdrew on or respectively. The Regulation D reserve requirement of borrowings from unrelated before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends banks abroad was also reduced to zero from 4 percent. on Oct. 24, 1985. For existing member banks the phase-in period is about three Effective with the reserve computation period beginning Nov. 16, 1978, years, depending on whether their new reserve requirements are greater or less domestic deposits of Edge corporations were subject to the same reserve than the old requirements. All new institutions will have a two-year phase-in requirements as deposits of member banks. beginning with the date that they open for business, except for those institutions 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as that have total reservable liabilities of $50 million or more. Christmas and vacation club accounts were subject to the same requirements as 7. Transaction accounts include all deposits on which the account holder is savings deposits. permitted to make withdrawals by negotiable or transferable instruments, pay- The average reserve requirement on savings and other time deposits before ment orders of withdrawal, and telephone and preauthorized transfers (in excess implementation of the Monetary Control Act had to be at least 3 percent, the of three per month) for the purpose of making payments to third persons or others. minimum specified by law. However, MMDAs and similar accounts offered by institutions not subject to the 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent rules of the Depository Institutions Deregulation Committee (DIDC) that permit was imposed on large time deposits of $100,000 or more, obligations of affiliates, no more than six preauthorized, automatic, or other transfers per month of which and ineligible acceptances. This supplementary requirement was eliminated with no more than three can be checks—are not transaction accounts (such accounts the maintenance period beginning July 24, 1980. are savings deposits subject to time deposit reserve requirements.) Effective with the reserve maintenance period beginning Oct. 25, 1979, a 8. The Monetary Control Act of 1980 requires that the amount of transaction marginal reserve requirement of 8 percent was added to managed liabilities in accounts against which the 3 percent reserve requirement applies be modified excess of a base amount. This marginal requirement was increased to 10 percent annually by 80 percent of the percentage increase in transaction accounts held by beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and all depository institutions determined as of June 30 each year. Effective Dec. 31, was eliminated beginning July 24, 1980. Managed liabilities are defined as iarge 1981, the amount was increased accordingly from $25 million to $26 million; and time deposits, Eurodollar borrowings, repurchase agreements against U.S. effective Dec. 30, 1982, to $26.3 million. government and federal agency securities, federal funds borrowings from non- 9. In general, nonpersonal time deposits are time deposits, including savings member institutions, and certain other obligations. In general, the base for the deposits, that are not transaction accounts and in which the beneficial interest is marginal reserve requirement was originally the greater of (a) $100 million or (b) held by a depositor that is not a natural person. Also included are certain the average amount of the managed liabilities held by a member bank, Edge transferable time deposits held by natural persons, and certain obligations issued corporation, or family of U.S. branches and agencies of a foreign bank for the two to depository institution offices located outside the United States. For details, see reserve computation periods ending Sept. 26, 1979. For the computation period section 204.2 of Regulation D. beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's U.S. office gross loans to foreigners and gross balances due NOTE. Required reserves must be held in the form of deposits with Federal from foreign offices of other institutions between the base period (Sept. 13-26, Reserve Banks or vault cash. After implementation of the Monetary Control Act, 1979) and the week ending Mar. 12, 1980, whichever was greater. For the nonmembers may maintain reserves on a pass-through basis with certain apcomputation period beginning May 29, 1980, the base was increased by 7'/2 proved institutions. 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 Savings and loan associations and Commercial banks mutual savings banks (thrift institutions) TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy ooofff dddeeepppooosssiiittt In effect May 31, 1983 Previous maximum In effect May 31, 1983 Previous maximum Percent Eff d e a c t t e i ve Percent Ef d fe a c te ti ve Percent Ef d fe a c te ti ve Percent Eff d e a c t t e i ve 1 Savings 5555VVVV4444 7777////1111////77779999 5555 77//11//7733 55551111////2222 7/1/79 5555''''////4444 (•) 2 Negotiable order of withdrawal accounts2 55551111////4444 11112222////33331111////88880000 5555 11//11//7744 5555VVVV4444 12/31/80 5555 1/1/74 Time accounts3 Fixed ceiling rates by maturity4 3 14-89 daysr 55551111////4444 8888////1111////77779999 5555 77//11//7733 ((((6666)))) ((((6666)))) 7 4 5 6 9 2 2 1 0 l / t 2 o t d o a t 2 o 2 y x s h y 4 t e y o y a e e r a 1 s a r 7 r s y s 7 e 7 ar 5 6 6 7 5 6 6 7 5 6 6 7 5 6 6 7VVVV 3333 ' ' ' ' //// //// 4444 iiii 4444 1111 7 7 7 7 7 7 7 7 1111 1111 / / / / / / / / //// //// 1 1 1 1 1 1 1 1 1111 1111 / / / / / / / / //// //// 7 7 7 7 7 7 7 7 8888 7777 3 3 3 3 3 3 3 3 0000 3333 ((((9999)))) 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 3 3 3 3 3 3 3 3 Y ' Y ' Y ' Y ' / / / / / / / / //// 4 4 4 4 4 4 4 4 iiii iiii 11 1 1 1 1 77 // / / / / 22 2 2 2 2 //11 11 1 1 1 1 // // / / / / 77 77 7 7 7 7 33 00 0 0 0 0 6 6 6 6 6 6 6 6 6 6 6 63333 VVVV ////4444 2222.... 111 111 111 0 ( 0 ( 0 ( /// /// *** 111 111 ))) /// /// ))) 888 777 000 333 ((((9999)))) 5 5 6 6 5 5 6 6 5 5 6 6 5 5 6 6 3333 3333 ////4444 ////,,,, 1 1 1 / / / 2 2 2 ( 1 1 1 ') / / / 7 7 7 0 0 0 9 6 to 8 years8 7777 7777 3333 VVVV ////4444 iiii 11112222 6666 ////2222 ////1111 3333 //// //// 7777 7777 8888 4444 ((((6666)))) 7777 ''''////4444 11/1/73 7 7 7 7 7 7 7 73333 VVVV ////4444 iiii 111222 666 ///222 ///111 333 /// /// 777 777 888 444 ((((6666)))) 7777 VVVV4444 11/1/73 11 Issued to governmental units (all 8888 maturities)10 8888 6666////1111////77778888 77773333////4444 12/23/74 8888 666///111///777888 77773333////4444 12/23/74 12 IRAs and Keogh (H.R. 10) plans (3 years 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 6Vi percent ceiling on time institutions throughout New England on Feb. 27, 1976, in New York State on deposits maturing in 2xh 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 2Vi-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 NonfinancialS tatistics • June 1983 1.16 Continued TIME DEPOSITS SUBJECT TO VARIABLE CEILING RATES 91-day time deposits. Effective May 1, 1982, depository institutions were 12-month all savers certificates. Effective Oct. 1, 1981, depository institutions authorized to offer time deposits that have a minimum denomination of $7,500 and are authorized to issue all savers certificates (ASCs) with a 1-year maturity and an a maturity of 91 days. Effective January 5, 1983, the minimum denomination annual investment yield equal to 70 percent of the average investment yield for 52required for this deposit is reduced to $2,500. The ceiling rate of interest on these week U.S. Treasury bills as determined by the auction of 52-week Treasury bills deposits is indexed to the discount rate (auction average) on most recently issued held immediately before the calendar week in which the certificate is issued. A 91-day Treasury bills for thrift institutions and the discount rate minimum 25 basis maximum lifetime exclusion of $1,000 ($2,000 on ajoint return) from gross income points for commercial banks. The rate differential ends 1 year from the effective is generally authorized for interest income from ASCs. The annual investment date of these instruments and is suspended at any time the Treasury bill discount yield for ASCs issued in December 1982 (in percent) was as follows: Dec. 26, 6.26. rate is 9 percent or below for four consecutive auctions. The maximum allowable rates in May 1983 (in percent) for commercial banks and thrifts were as follows: 1'/2-year to less than 2'/2-year time deposits. Effective Aug. 1, 1981, commercial May 3, 8.04; May 10, 8.14; May 17, 8.10; May 24, 8.46. banks are authorized to pay interest on any variable ceiling nonnegotiable time deposit with an original maturity of 2'/2 years to less than 4 years at a rate not to Six-month money market time deposits. Effective June 1, 1978, commercial exceed V* of 1 percent below the average 2'/2-year yield for U.S. Treasury banks and thrift institutions were authorized to offer time deposits with a maturity securities as determined and announced by the Treasury Department immediately of exactly 26 weeks and a minimum denomination requirement of $10,000. before the date of deposit. Effective May 1, 1982, the maximum maturity for this Effective January 5, 1983, the minimum denomination required for this deposit is category of deposits was reduced to less than V/2 years. Effective Apr. 1, 1983, the reduced to $2,500. The ceiling rate of interest on these deposits is indexed to the maximum maturity for this category of deposits was reduced to less than 2l/i years discount rate (auction average) on most recently issued 26-week U.S. Treasury and the minimum maturity was reduced to l'/2 years. Thrift institutions may pay bills. Interest on these certificates may not be compounded. Effective for all 6- interest on these certificates at a rate not to exceed the average 1 '/2-year yield for month money market certificates issued beginning Nov. 1, 1981, depository Treasury securities as determined and announced by the Treasury Department institutions may pay rates of interest on these deposits indexed to the higher of (1) immediately before the date of deposit. If the announced average 1'/2-year yield the rate for 26-week Treasury bills established immediately before the date of for Treasury securities is less than 9.50 percent, commercial banks may pay 9.25 deposit (bill rate) or (2) the average of the four rates for 26-week Treasury bills percent and thrift institutions 9.50 percent for these deposits. These deposits have established for the 4 weeks immediately before the date of deposit (4-week no required minimum denomination, and interest may be compounded on them. average bill rate). Ceilings are determined as follows: The ceiling rates of interest at which they may be offered vary biweekly. The maximum allowable rates in May 1983 (in percent) for commercial banks were as Bill rate or 4-week Commercial bank ceiling follows: May 10, 9.25; May 24, 9.25; and for thrift institutions: May 10, 9.50; average bill rate May 24, 9.50. 7.50 percent or below 7.75 percent Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks and thrift institu- Above 7.50 percent '/4 t o h f e 1 b i p ll e r r c a e te n t o a r g e 4 - p w o e i e n k t p a l v u e s r a th ge e b h i i l g l h r e a r t e o f t r i e o q n u s i r w ed e re m a i u n t i h m o u r m ize d d e t n o o o m ff i e n r a t v i a o r n i ab a l n e d c e w ili i n th g n m o a n t n u e r g it o ie ti s a b o le f ti 2 m l/z e d y e e p a o rs s it o s r w m ith o r n e o . Effective Jan. 1, 1980, the maximum rate for commercial banks was V4 percentage Thrift ceiling point below the average yield on 2'/i-year U.S. Treasury securities; the ceiling rate 7.25 percent or below 7.75 percent for thrift institutions was V4 percentage point higher than that for commercial Above 7.25 percent, but below Vi of 1 percentage point plus the higher of banks. Effective Mar. 1, 1980, a temporary ceiling of ll3/4 percent was placed on 8.50 percent the bill rate or 4-week average bill rate these accounts at commercial banks and 12 percent on these accounts at savings 8.50 percent or above, but below 9 percent and loans. Effective June 2, 1980, the ceiling rates for these deposits at 8.75 percent commercial banks and savings and loans were increased V2 percentage point. The 8.75 percent or above '/» of 1 percentage point plus the higher of temporary ceiling was retained, and a minimum ceiling of 9.25 percent for the bill rate or 4-week average bill rate commercial banks and 9.50 percent for thrift institutions was established. The maximum rates in May 1983 for commercial banks based on the bill rate were as follows: May 3, 8.30; May 10, 8.38; May 17, 8.39; May 24, 8.72, and based on the 4-week average bill rate were as follows: May 3, 8.43; May 10, 8.40; May 17, 8.38; May 24, 8.44. The maximum allowable rates in May 1983 for thrifts based on the bill rate were as follows: May 3, 8.55; May 10, 8.63; May 17, 8.64; May 24, 8.97; and based on the 4-week average bill rate were as follows: May 3, 8.68; May 10, 8.65; May 17, 8.63; May 24, 8.69. TIME DEPOSITS NOT SUBJECT TO INTEREST RATE CEILINGS Money market deposit account. Effective Dec. 14,1982, depository institutions Time deposits of 7 to 31 days. Effective Sept. 1, 1982, depository institutions are authorized to offer a new account with a required initial balance of $2,500 and were authorized to issue nonnegotiable time deposits of $20,000 or more with a an average maintenance balance of $2,500 not subject to interest rate restrictions. maturity or required notice period of 7 to 31 days. The maximum rate of interest No minimum maturity period is required for this account, but depository payable by thrift institutions was the rate established and announced (auction institutions must reserve the right to require seven days' notice before withdraw- average on a discount basis) for U.S. Treasury bills with maturities of 91 days at als. When the average balance is less than $2,500, the account is subject to the the auction held immediately before the date of deposit or renewal ("bill rate"). maximum ceiling rate of interest for NOW accounts; compliance with the average Commercial banks could pay the bill rate minus 25 basis points. The interest rate balance requirement may be determined over a period of one month. Depository ceiling was suspended when the bill rate is 9 percent or below for the four most institutions may not guarantee a rate of interest for this account for a period longer recent auctions held before the date of deposit or renewal. Effective January 5, than one month or condition the payment of a rate on a requirement that the funds 1983, the minimum denomination required for this deposit was reduced to $2,500 remain on deposit for longer than one month. No more than six preauthorized, and the interest rate ceiling was removed. automatic, or other third-party transfers are permitted per month, of which no more than three can be checks. Telephone transfers to third parties or to another Time deposits of 2'/2 years or more. Effective May 1, 1982, depository account of the same depositor are regarded as preauthorized transfers. institutions were authorized to offer negotiable or nonnegotiable time deposits with a minimum original maturity of 3'/2 years or more that are not subject to IRAs and Keogh (H.R. 10) plans <18 months or more). Effective Dec. 1, 1981, interest rate ceilings. Such time deposits have no minimum denomination, but depository institutions are authorized to offer time deposits not subject to interest must be made available in a $500 denomination. Additional deposits may be made rate ceilings when the funds are deposited to the credit of, or in which the entire to the account during the first year without extending its maturity. Effective beneficial interest is held by, an individual pursuant to an IRA agreement or Apr. 1, 1983, the minimum maturity period for this category of deposits was Keogh (H.R. 10) plan. Such time deposits must have a minimum maturity of 18 reduced to 2'/i years. months, and additions may be made to the time deposit at any time before its maturity without extending the maturity of all or a portion of the balance of the account. 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 1983 TTyyppee ooff ttrraannssaaccttiioonn 11998800 11998811 11998822 Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 7,668 13,899 17,067 774 2,552 1,897 0 1,456 1,259 2,880 2 Gross sales 7,331 6,746 8,369 0 0 731 1,983 934 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,389 1,816 3,000 0 0 200 900 300 0 0 Others within 1 year 5 Gross purchases 912 317 312 0 88 0 0 0 0 0 6 Gross sales 0 23 0 0 0 0 0 0 0 0 7 Maturity shift 12,427 13,794 17,295 623 2,819 906 558 4,564 1,198 826 8 Exchange -18,251 -12,869 -14,164 0 -1,924 -943 -544 -2,688 -900 0 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 0 485 0 0 0 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -8,909 -10,299 -14,524 -623 -2,204 -906 -553 -4,564 -1,198 -684 13 Exchange 13,412 10,117 11,804 0 1,515 943 544 1,599 900 0 5 to 10 years 14 Gross purchases 703 393 388 0 194 0 0 0 0 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shift -3,092 -3,495 -2,172 0 -616 0 -5 229 0 -142 17 Exchange 2,970 1,500 2,128 0 250 0 0 650 0 0 Over 10 years 18 Gross purchases 811 379 307 0 132 0 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -426 0 -601 0 0 0 0 -229 0 0 21 Exchange 1,869 1,253 234 0 159 0 0 439 0 0 All maturities 22 Gross purchases 12,232 16,690 19,870 774 3,452 1,897 0 1,456 1,259 2,880 23 Gross sales 7,331 6,769 8,369 0 0 731 1,983 934 0 0 24 Redemptions 3,389 1,816 3,000 0 0 200 900 300 0 0 Matched transactions 25 Gross sales 674,000 589,312 543,804 45,655 39,579 72,123 59,398 35,234 47,892 37,873 26 Gross purchases 675,496 589,647 543,173 46,370 41,724 69,088 59,043 38,204 47,724 36,205 Repurchase agreements 27 Gross purchases 113,902 79,920 130,774 5,618 4,161 15,229 6,747 6,697 3,526 7,671 28 Gross sales 113,040 78,733 130,286 9,420 4,161 11,525 10,451 6,697 3,526 3,984 29 Net change in U.S. government securities 3,869 9,626 8,358 -2,313 5,596 1,636 -6,943 3,192 1,090 4,899 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 * 6 9 5 8 7 Repurchase agreements 33 Gross purchases 28,895 13,320 18,957 1,776 739 2,566 452 276 379 340 34 Gross sales 28,863 13,576 18,638 2,778 739 1,978 1,040 276 379 92 35 Net change in federal agency obligations 555 130 130 -1,008 * 582 -596 -5 -8 241 BANKERS ACCEPTANCES 36 Repurchase agreements, net 73 -582 1,285 -813 0 1,480 -1,480 0 0 704 37 Total net change in System Open Market Account 4,497 9,175 9,773 -4,134 5,596 3,697 -9,019 3,187 1,082 5,844 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 DomesticN onfinancial Statistics • June 1983 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1983 1983 Apr. 27 May 4 May 11 May 18 May 25 Mar. Apr. May Consolidated condition statement ASSETS 1 Gold certificate account 11,135 11,135 11,132 11,132 11,132 11,138 11,135 11,132 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 Coin 444 466 439 432 426 477 452 403 Loans 4 To depository institutions 4,073 798 1,170 2,028 1,548 2,808 884488 11,,226600 5 Other 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements 285 00 00 00 00 00 770044 00 Federal agency obligations 7 Bought outright 8,908 8,908 8,908 88,,990088 88,,990088 88,,991155 88,,990088 88,,990088 8 Held under repurchase agreements 87 0 0 0 0 0 224488 00 U.S. government securities Bought outright 9 Bills 56,194 57,149 55,687 58,912 58,365 5555,,446699 5566,,668822 5588,,779955 10 Notes 62,187 62,187 62,187 63,107 63,107 62,187 62,187 63,107 11 Bonds 18,995 18,995 18,995 19,278 19,278 18,995 18,995 19,278 12 Total1 137,376 138,331 136,869 141,297 140,750 136,651 137,864 141,180 13 Held under repurchase agreements 3,732 0 0 0 0 0 3,686 0 14 Total U.S. government securities 141,108 138,331 136,869 141,297 140,750 136,651 141,550 141,180 15 Total loans and securities 154,461 148,037 146,947 152,233 151,206 148,374 152,258 151,348 16 Cash items in process of collection 8,959 9,742 8,834 9,087 8,797 6,584 6,354 6,607 17 Bank premises 551 553 553 553 553 552 552 553 Other assets 18 Denominated in foreign currencies2 4,983 4,958 4,969 4,389 4,394 4,962 4,957 44,,337766 19 All other3 4,232 4,0% 4,326 2,860 3,153 3,673 5,223 3,701 20 Total assets 189,383 183,605 181,818 185,304 184,279 180,378 185,549 182,738 LIABILITIES 21 Federal Reserve notes 142,841 143,850 144,903 144,726 144,799 141,497 142,497 145,783 Deposits 22 Depository institutions 26,201 22,823 21,380 25,311 24,383 2233,,441199 2233,,119933 2200,,556677 23 U.S. Treasury—General account 6,803 4,043 3,552 2,673 2,809 3,572 6,015 4,372 24 Foreign—Official accounts 194 217 222 250 240 425 322 445 25 Other 665 556 552 512 678 533 791 670 26 Total deposits 33,863 27,639 25,706 28,746 28,110 27,949 30,321 26,054 27 Deferred availability cash items 7,685 7,344 6,529 7,136 6,572 6,098 7,478 5,757 28 Other liabilities and accrued dividends4 1,906 1,696 1,577 1,600 1,698 1,752 2,069 1,849 29 Total liabilities 186,295 180,529 178,715 182,208 181,179 177,296 182,365 179,443 CAPITAL ACCOUNTS 30 Capital paid in 1.407 1,408 1,409 1,413 1,413 1,393 1,407 1,413 31 Surplus 1,359 1,359 1,359 1,359 1,359 1,359 1,359 1,359 32 Other capital accounts 322 309 335 324 328 330 418 523 33 Total liabilities and capital accounts 189,383 183,605 181,818 185,304 184,279 180,378 185,549 182,738 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 110,748 110,881 109,971 109,667 107,950 112,120 109,843 110,198 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) .. 161,329 161,510 162,019 162,920 163,353 159,568 161,327 163,394 36 LESS: Held by bank5 18,488 17,660 17,116 18,194 18,554 18,130 18,830 17,611 37 Federal Reserve notes, net 142,841 143,850 144,903 144,726 144,799 141,438 142,497 145,783 Collateral for Federal Reserve notes 38 Gold certificate account 11,135 11,135 11,132 11,132 11,132 11,138 11,135 11,132 39 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 127,088 128,097 129,153 128,976 129,049 125,682 126,744 130,033 42 Total collateral. 142,841 143,850 144,903 144,726 144,799 141,438 142,497 145,783 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 1983 1983 Apr. 27 May 4 May 11 May 18 May 25 Mar. 31 Apr. 29 May 31 1 Loans—Total 4,073 798 1,170 2,028 1,548 2,808 848 1,260 2 Within 15 days 4,040 744 1,132 2,011 1,508 2,782 805 1,220 3 16 days to 90 days 33 54 38 17 40 26 43 40 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 285 0 0 0 0 0 704 0 6 Within 15 days 285 0 0 0 0 0 704 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 141,108 138,331 136,869 141,297 140,750 136,651 141,550 141,180 10 Within 15 days1 6,694 5,771 6,269 7,822 6,335 3,525 4,947 4,011 11 16 days to 90 days 29,095 26,726 24,799 30,918 30,501 26,664 30,724 32,654 12 91 days to 1 year 43,736 44,734 44,701 40,807 42,165 44,879 44,296 42,680 H Over 1 year to 5 years 31,972 31,489 31,489 32,983 32,983 31,830 31,972 33,067 14 Over 5 years to 10 years 12,828 12,828 12,828 11,700 11,700 12,970 12,828 11,700 15 Over 10 years 16,783 16,783 16,783 17,067 17,066 16,783 16,783 17,068 16 Federal agency obligations—Total 8,995 8,908 8,908 8,908 8,908 8,915 9,156 8,908 17 Within 15 days1 323 126 32 93 61 309 484 188 18 16 days to 90 days 499 581 549 489 489 508 499 585 19 91 days to 1 year 2,026 2,054 2,095 2,094 2,200 1,862 2,026 1,977 20 Over 1 year to 5 years 4,499 4,499 4,529 4,540 4,450 4,614 4,499 4,450 21 Over 5 years to 10 years 1,130 1,130 1,185 1,174 1,190 1,104 1,130 1,190 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • June 1983 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1982 1983 11997788 11997799 11998800 11998811 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 1 Total reserves2 32.83 34.23 36.23 37.93 39.93 40.41 40.78 40.12 40.34 41.00 41.31 41.27 2 Nonborrowed reserves 31.96 32.76 34.54 39.45 39.45 39.79 40.15 39.59 39.76 40.21 40.30 40.32 3 Required reserves 32.59 33.91 35.71 39.53 39.53 40.01 40.28 39.57 39.91 40.57 40.83 40.80 4 Monetary base3 132.2 142.8 154.9 173.2 173.2 174.3 175.6 176.3 178.0 180.2 181.2 182.9 Not seasonally adjusted 5 Total reserves2 33.33 37.24 37.24 40.00 40.00 40.68 41.56 42.23 40.23 40.23 41.05 40.74 6 Nonborrowed reserves 32.46 35.55 35.55 39.52 39.52 40.06 40.93 41.69 39.64 39.44 40.04 39.78 7 Required reserves 33.10 36.72 36.72 39.59 39.59 40.28 41.06 41.67 39.79 39.80 40.58 40.27 8 Monetary base3 134.7 158.2 158.2 173.2 173.2 175.4 178.9 177.7 175.9 177.7 180.3 181.8 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS4 9 Total reserves2 41.68 40.66 40.66 40.59 40.59 41.20 41.85 41.86 39.80 38.04 38.65 38.31 10 Nonborrowed reserves 40.81 38.97 38.97 40.11 40.11 40.58 41.22 41.33 39.22 37.24 37.65 37.36 11 Required reserves 41.45 40.15 40.15 40.18 40.18 40.80 41.35 41.32 39.36 37.60 38.18 37.84 12 Monetary base3 144.5 162.5 162.5 173.8 173.8 176.0 179.3 177.9 176.0 175.9 178.4 179.9 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 with the implementation of the Monetary Control Act, the inclusion of Edge Act November 13, 1980, a reduction of $2.9 billion; February 12, 1981, an increase of corporation reserves, and other changes in Regulation D have been removed. $245 million; March 12, 1981, an increase of $75 million; May 14, 1981, an increase Beginning with the week ended December 23, 1981, reserve aggregates have been of $245 million; September 3, 1981, a reduction of $1.1 billion; November 12, reduced by shifts of reservable liabilities to international banking facilities (IBFs). 1981, an increase of $210 million; January 14, 1982, a reduction of $60 million; On the basis of reports of liabilities transferred to IBFs by U.S. commercial banks February 11, 1982 an increase of $170 million; March 4, 1982, an estimated and U.S. agencies and branches of foreign banks, it is estimated that required reduction of $2.0 billion; May 13, 1982, an estimated increase of $150 million; reserves were lowered on average $10 millon to $20 million in December 1981 and August 12, 1982 an estimated increase of $140 million; and September 2, 1982, an $40 million to $70 million in January 1982. estimated reduction of $1.2 billion; October 28, 1982 an estimated reduction of 2. Reserve balances with Federal Reserve Banks (which exclude required $100 million; December 23, 1982 an estimated reduction of $800 million; and clearing balances) plus vault cash at institutions with required reserve balances March 3, 1983 an estimated reduction of $2.1 billion. Beginning with the week plus vault cash equal to required reserves at other institutions. ended December 23, 1981, reserve aggregates have been reduced by shifts of 3. Includes reserve balances and required clearing balances at Federal Reserve reservable liabilities to IBFs. On the basis of reports of liabilities transferred to Banks in the current week plus vault cash held two weeks earlier used to satisfy IBFs by U.S. commercial banks and U.S. agencies and branches offoreign banks, reserve requirements at all depository institutions plus currency outside the U.S. it is estimated that required reserves were lowered on average by $60 million to Treasury, Federal Reserve Banks, the vaults of depository institutions, and $90 million in December 1981 and $180 million to $230 million in January 1982, surplus vault cash at depository institutions. mostly reflecting a reduction in reservable Eurocurrency transactions. 4. Reserves of depository institutions series reflect actual reserve requirement percentages with no adjustments to eliminate the effect of changes in Regulation D NOTE. Latest monthly and weekly figures are available from the Board's including changes associated with the implementation of the Monetary Control H.3(502) statistical release. Back data and estimates of the impact on required Act. Includes required reserves of member banks and Edge Act corporations and reserves and changes in reserve requirements are available from the Banking beginning November 13, 1980, other depository institutions. Under the transition- Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A15 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1983 1979 1980 1981 1982 Item Dec. Dec. Dec. Dec. Jan. Feb. Mar.' Apr. Seasonally adjusted MEASURES' 1 Ml 389.0 414.1 440.6 478.2 482.1 491.1 497.6 496.5 2 M2 1,497.5 1,630.3 1,794.9 1,959.5 2,010.0' 2,050.8 2,070.0 2,074.9 3 M3 1,758.4 1,936.7 2,167.9 2,377.6 2,403.3 2,430.6 2,447.3 2,456.0 4 L2 2,131.8 2,343.6 2,622.0 2,896.8' n.a. n.a. n.a. n.a. SELECTED COMPONENTS 5 Currency 106.5 116.2 123.2 132.8 134.2 135.6 137.0 138.0 6 Traveler's checks3 3.7 4.1 4.5 4.2 4.1 4.3 4.5 4.6 7 Demand deposits 262.0 266.8 236.4 239.8 239.4 238.7 240.1 238.9 8 Other checkable deposits4 17.0 26.9 76.6 101.3 104.5' 112.5 116.0 115.0 9 Savings deposits5 423.1 400.7 344.4 359.3r 335.1 325.7 322.8 321.9 10 Small-denomination time deposits6 635.9 731.7 828.6 859.1 797.4 755.1 733.8 725.7 11 Large-denomination time deposits7 222.2 258.9 302.6 333.8 310.7' 297.9 296.3 300.8 Not seasonally adjusted MEASURES' 12 Ml 398.8 424.7 452.1 491.0 489.7' 480.7' 489.2 504.4 13 M2 1,502.1 1,635.0 1,799.6 1,964.5 2,018.3' 2,042.5 2,066.0 2,088.6 14 M3 1,766.1 1,944.9 2,175.9 2,385.3 2,415.2' 2,427.0' 2,446.0 2,467.5 15 L2 2,138.9 2,350.8 2,629.7 2,904.7' n.a. n.a. n.a. n.a. SELECTED COMPONENTS 16 Currency 108.2 118.3 125.4 135.2 133.2 133.7 135.4 137.4 17 Traveler's checks3 3.5 3.9 4.3 4.0 3.9 4.1 4.3 4.4 18 Demand deposits 270.1 275.2 244.0 247.7 245.1 232.8 235.2 242.4 19 Other checkable deposits4 17.0 27.2 78.4 104.C 107.5' 110.0' 114.3' 120.3' 20 Overnight RPs and Eurodollars8 21.2 28.4 36.1 44.3 47.3 49.1' 48.6 50.4 21 Savings deposits5 420.7 398.3 342.1 356.2 332.1 321.0' 319.5 321.5 22 Money market deposit accounts n.a. n.a. n.a. 26.5 114.2 163.3 185.9 198.0 23 Small-denomination time deposits6 633.1 728.3 824.1 853.9 798.6 758.5 737.7 728.7 Money market mutual funds 24 General purpose and broker/dealer 33.4 61.4 150.9 182.2 166.7 159.6' 154.0 146.7 25 Institution only 9.5 14.9 36.0 47.6 46.1 45.2 43.5 41.0 26 Large-denomination time deposits7 226.0 262.4 305.9 336.5 314.2 302.6 299.0 298.6 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 all money market deposit accounts and (4) negotiable order of withdrawal (NOW) and automatic transfer service (MMDAs). (ATS) accounts at banks and thrift institutions, credit union share draft (CUSD) 6. Issued in amounts of less than $100,000 and includes retail RPs. accounts, and demand deposits at mutual savings banks. 7. Issued in amounts of $100,000 or more and are net of the holdings of M2: Ml plus money market deposit accounts, savings, and small-denomination domestic banks, thrift institutions, the U.S. government, money market mutual time deposits at all depository institutions, overnight repurchase agreements at funds, and foreign banks and official institutions. commercial banks, overnight Eurodollars held by U.S. residents other than banks 8. Overnight (and continuing contract) RPs are those issued by commercial at Caribbean branches of member banks and balances of money market mutual banks to other than depository institutions and money market mutual funds funds (general purpose and broker/dealer). (general purpose and broker/dealer), and overnight Eurodollars are those issued M3: M2 plus large-denomination time deposits at all depository institutions, by Caribbean branches of member banks to U.S. residents other than depository term RPs at commercial banks and savings and loan associations, and balances of institutions and money market mutual funds (general purpose and broker/dealer). institution-only money market mutual funds. 2. L: M3 plus other liquid assets such as term Eurodollars held by U.S. NOTE: Latest monthly and weekly figures are available from the Board's H.6 residents other than banks, bankers acceptances, commercial paper, Treasury (508) release. Back data are available from the Banking Section, Division of bills and other liquid Treasury securities, and U.S. savings bonds. Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic NonfinancialS tatistics • June 1983 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 1983 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11998800'' 1199881111 11998822'' Oct. Nov. Dec. Jan. Feb. Mar. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 62,757.8 80,858.7 90,914.4 97,097.0 95,475.9 97,748.5 103,333.1 102,743.5 102,206.1 2 Major New York City banks 25,156.1 33,891.9 37,932.9 42,077.9 38,971.6 42,104.4 46,353.0 45,133.2 44,327.4 3 Other banks 37,601.7 46,966.9 52,981.6 55,019.1 56,504.4 55,644.1 56,980.1 57,610.3 57,878.7 4 ATS-NOW accounts3 159.3 743.4 1,036.2 1,109.4 1,224.6 1,448.1 1,262.3 1,286.4 1,369.4 5 Savings deposits4 670.0 672.7 721.4 637.0 697.1 889.3 904.3 827.9 803.2 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 198.7 285.8 324.2 343.0 333.8 342.6 361.1 361.3 356.1 7 Major New York City banks 803.7 1,105.1 1,287.6 1,298.7 1,263.7 1,381.2 1,462.3 1,462.5 1,437.4 8 Other banks 132.2 186.2 211.1 219.5 221.4 218.3 223.9 227.2 225.9 9 ATS-NOW accounts3 9.7 14.0 14.5 14.7 15.6 18.4 15.8 15.1 15.6 10 Savings deposits4 3.6 4.1 4.5 4.0 4.3 4.7 6.0 5.8 5.7 Not seasonally adjusted DEBITS TO Demand deposits2 11 All insured banks 63,124.4 81,197.9 91,031.9 93,543.3 91,838.3 107,454.9 101,566.1 92,654.1 109,166.3 12 Major New York City banks 25,243.1 34,032.0 38,001.0 39,657.6 36,893.5 47,576.3 45,657.2 40,937.3 47,496.6 N Other banks 37,881.3 47,165.9 53,030.9 53,885.7 54,944.8 59,878.6 55,908.8 51,716.8 61,669.7 14 ATS-NOW accounts3 158.0 737.6 1,027.1 1,098.0 1,115.0 1,411.9 1,525.5 1,198.7 1,398.4 15 MMDA5 0 0 0 0 0 0 278:4 324.7 454.9 16 Savings deposits4 669.8 672.9 720.0 672.7 663.3 878.0 980.4 754.3 820.4 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 202.3 286.1 325.0 327.8 319.3 367.2 346.1 334.8 391.8 18 Major New York City banks 814.8 1,114.2 1,295.7 1,220.8 1,198.6 1,540.7 1,368.1 1,366.7 1,561.1 19 Other banks 134.8 186.2 211.5 213.1 213.9 228.8 215.0 209.5 248.5 20 ATS-NOW accounts3 9.7 14.0 14.3 14.5 14.1 17.5 18.6 14.4 16.2 71 MMDA5 0 0 0 0 0 0 2.4 2.0 2.4 22 Savings deposits4 3.6 4.1 4.5 4.2 4.1 4.7 6.6 5.3 5.8 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, MMDA and special club accounts, such as Christmas and vacation clubs. 5. Money Market Deposit Accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1981 1982 1983 1981 1982 1983 CCaatteeggoorryy Dec.2 Dec. Jan.3 Feb. Mar. Apr. Dec.2 Dec. Jan.3 Feb. Mar. Apr. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities4 1,316.3 1,412.1 1,428.2 1,436.5 1,450.2 1,460.9 1,326.1 1,422.5 1,430.5 1,432.2 1,445.0 1,460.2 2 U.S. Treasury securities 111.0 130.9 139.8 144.5 151.0 157.9 111.4 131.5 139.3 145.1 153.2 160.7 3 Other securities 231.4 239.1 243.3 243.2 242.8 243.4 232.8 240.6 243.5 242.6 242.3 243.4 4 Total loans and leases4 973.9 11,,004422..00 1,045.1 1,048.8 1,056.3 1,059.6 981.8 1,050.4 1,047.7 1,044.4 1,049.5 1,056.1 5 Commercial and industrial loans 358.0 392.4 395.2 394.9 396.2 393.0 360.1 394.7 394.2 393.4 395.1 395.2 6 Real estate loans 285.7 303.2 305.3 307.6 309.5 311.4 286.8 304.1 305.9 307.3 308.6 310.4 7 Loans to individuals 185.1 191.8 192.6 192.9 194.8 196.0 186.4 193.1 193.2 192.3 193.0 194.7 8 Security loans 21.9 24.7 22.7 22.2 22.6 22.9 22.7 25.5 22.9 21.5 22.0 22.9 9 Loans to nonbank financial institutions 30.2 31.1 31.7 31.6 32.0 31.6 31.2 32.1 31.9 31.7 31.6 31.3 10 Agricultural loans 33.0 36.1 36.4 36.7 37.1 37.2 33.0 36.1 36.1 36.1 36.3 36.6 11 Lease financing receivables.... 12.7 13.1 13.3 13.3 13.1 13.1 12.7 13.1 13.3 13.3 13.1 13.1 12 All other loans 47.2 49.7 47.8 49.6 51.0 54.3 49.2 51.7 50.3 48.8 49.8 51.9 MEMO: 13 Total loans and securities plus loans sold4'5 1,319.1 1,415.0 1,431.2 1,439.4 1,453.1 1,463.8 1,328.9 1,425.4 1,433.5 1,435.1 1,448.0 1,463.2 14 Total loans plus loans sold4-5 .... 976.7 1,045.0 1,048.0 1,051.7 1,059.3 1,062.6 984.7 1,053.3 1,050.7 1,047.4 1,052.5 1,059.1 15 Total loans sold to affiliates4'5 2.8 2.9 3.0 3.0 3.0 3.0 2.8 2.9 3.0 3.0 3.0 3.0 16 Commercial and industrial loans plus loans sold5 360.2 394.6 397.5 397.2 398.6 395.4 362.3 396.9 396.5 395.8 397.4 397.6 17 Commercial and industrial loans sold5 2.2 2.3 2.3 2.3 2.4 2.4 2.2 2.3 2.3 2.3 2.4 2.4 18 Acceptances held 8.9 8.5 8.8 8.2 8.9 8.9 9.8 9.5 9.2 8.4 8.5 8.2 19 Other commercial and industrial loans 349.1 383.8 386.4 386.7 387.3 384.1 350.3 385.2 384.9 385.1 386.6 387.0 20 To U.S. addressees6 334.9 373.5 374.1 374.5 375.0 372.2 334.3 372.7 372.7 372.8 374.4 375.2 21 To non-U.S. addressees 14.2 10.3 12.3 12.2 12.3 11.9 16.1 12.4 12.2 12.3 12.2 11.8 22 Loans to foreign banks 19.0 13.5 13.7 14.3 14.9 15.2 20.0 14.5 14.3 14.1 14.6 14.6 1. Includes domestically chartered banks; U.S. branches and agencies of billion. As of Feb. 2, 1983, real estate loans increased $0.5 billion and commercial foreign banks, New York investment companies majority owned by foreign and industrial loans decreased $0.5 billion. banks, ahd Edge Act corporations owned by domestically chartered and foreign 4. Excludes loans to commercial banks in the United States. banks. 5. Loans sold are those sold outright to a bank's own foreign branches, 2. Beginning December 1981, shifts of foreign loans and securities from U.S. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if banking offices to international banking facilities (IBFs) reduced the levels of not a bank), and nonconsolidated nonbank subsidiaries of the holding company. several items. Seasonally adjusted data that include adjustments for the amounts 6. United States includes the 50 states and the District of Columbia. shifted from domestic offices to IBFs are available in the Board's G.7 (407) statistical release (available from Publications Services, Board of Governors of NOTE. Data are prorated averages of Wednesday estimates for domestically the Federal Reserve System, Washington, D.C. 20551). chartered banks, based on weekly reports of a sample of domestically chartered 3. Due to loan reclassifications, several categories have breaks in series: banks and quarterly reports of all domestically chartered banks. For foreignbeginning Jan. 12, 1983, real estate loans increased $0.4 billion and loans to related institutions, data are averages of month-end estimates based on weekly individuals decreased $0.2 billion. As of Jan. 26, 1983, other securities increased reports from large agencies and branches and quarterly reports from all agencies, $0.2 billion and total loans and commercial and industrial loans decreased $0.2 branches, investment companies, and Edge Act corporations engaged in banking. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • June 1983 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1981 1982 1983 SSoouurrccee Dec. June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Total nondeposit funds 1 Seasonally adjusted2 96.0 89.7 85.0 81.7 78.4 80.6 86.7 82.1 72.3 75.6 75.7 80.0 2 Not seasonally adjusted 97.5 91.2 86.7 85.4 80.8 82.8 88.7 83.5 73.8 76.5 76.2 78.6 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 111.5 119.0 119.3 120.2 121.6 126.1 129.1 127.3 131.6 134.6 134.5 141.5 4 Not seasonally adjusted 113.0 120.5 121.0 123.9 124.0 128.3 131.1 128.8 133.1 135.5 135.2 137.6 5 Net balances due to foreign-related institutions, not seasonally adjusted -18.2 -32.2 -37.3 -41.3 -46.3 -48.0 -44.8 -48.1 -62.4 -62.0 -61.9 -61.9 6 Loans sold to affiliates, not seasonally adjusted4 2.8 3.0 2.8 2.8 2.8 2.8 2.9 2.9 3.0 3.0 3.0 3.0 MEMO 7 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted5 -22.5 -29.2 -33.1 -34.5 -39.0 -40.3 -38.3 -39.8 -50.1 -50.5 -52.8 -52.5 8 Gross due from balances 54.9 57.7 60.7 65.2 68.8 69.6 69.9 72.4 79.3 78.8 79.8 80.0 9 Gross due to balances 32.4 28.5 27.6 30.8 29.7 29.4 31.6 32.6 29.2 28.3 26.9 27.5 10 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted6 4.3 -2.9 -4.3 -6.9 -7.3 -7.8 -6.5 -8.3 -12.3 -11.5 -9.1 -9.4 11 Gross due from balances 48.1 50.2 52.9 53.8 54.6 54.1 53.7 54.9 57.6 56.1 56.1 55.9 12 Gross due to balances 52.4 47.3 48.6 46.9 47.3 46.4 47.2 46.6 45.3 44.6 47.1 46.5 Security RP borrowings 13 Seasonally adjusted' 59.0 61.7 61.9 65.2 65.0 69.0 71.5 71.0 72.2 74.3 74.5 79.2 14 Not seasonally adjusted 59.2 61.7 62.2 67.5 66.0 69.8 72.1 71.1 72.2 73.7 73.7 76.2 U.S. Treasury demand balances8 15 Seasonally adjusted 12.2 10.5 9.0 10.1 11.1 14.4 10.6 11.9 15.7 8.8 12.5 13.5 16 Not seasonally adjusted 11.1 10.7 8.2 8.1 12.3 16.4 7.8 10.8 16.3 10.2 13.2 14.2 Time deposits, $100,000 or more9 17 Seasonally adjusted 324.1 349.6 360.3 367.1 366.7 376.6 360.6 347.3 319.2 303.0 295.9 296.0 18 Not seasonally adjusted 330.4 344.8 350.6 359.3 361.8 364.9 361.7 353.9 325.4 310.4 300.6 292.7 IBF ADJUSTMENTS FOR SELECTED ITEMS10 19 22.4 32.0 32.2 32.5 32.8 33.1 33.3 33.9 34.2 2222200000 11111.....77777 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 2222211111 Item 5 2222200000.....77777 2222299999.....66666 2222299999.....88888 3333300000.....11111 3333300000.....44444 3333300000.....77777 3333300000.....99999 3333311111.....55555 3333311111.....88888 2222222222 Item 7 33333.....11111 55555.....00000 55555.....11111 55555.....33333 55555.....44444 55555.....44444 55555.....55555 55555.....88888 55555.....88888 2222233333 Item 10 1111177777.....66666 2222244444.....66666 2222244444.....77777 2222244444.....99999 2222255555.....00000 2222255555.....33333 2222255555.....44444 2222255555.....77777 2222266666.....00000 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

Banking Institutions A19 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1982 1983 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and securities, excluding interbank 1,313.2 1,318.8 1,337.1 1,343.0 1,347.0 1,370.4 1,370.8 11,,337733..77 11,,339922..22 11,,440044..00 11,,441111..99 2 Loans, excluding interbank 966.6 970.6 985.9 988.5 990.4 1,000.8 993.3 991.4 1,001.7 1,004.6 1,006.9 3 Commercial and industrial 346.4 346.2 354.4 355.8 355.4 357.9 355.6 356.3 358.6 358.5 357.3 4 Other 620.3 624.4 631.5 632.7 635.0 642.9 638.2 635.8 643.7 646.8 650.8 5 U.S. Treasury securities 113.4 113.7 115.0 119.4 122.2 129.0 136.0 141.4 150.6 155.5 160.9 6 Other securities 233.2 234.5 236.2 235.1 234.4 240.5 241.6 240.8 239.9 243.9 244.1 7 Cash assets, total 154.5 160.8 157.4 162.1 169.7 184.4 167.8 184.7 168.9 170.1 164.5 8 Currency and coin 20.5 20.3 20.4 20.5 19.0 23.0 20.4 20.3 19.9 20.4 20.3 9 Reserves with Federal Reserve Banks 25.1 26.1 17.0 23.5 22.0 25.4 23.9 25.3 20.5 23.9 22.4 10 Balances with depository institutions . 55.4 58.8 60.4 61.3 64.6 67.6 67.7 71.6 67.1 66.1 65.6 11 Cash items in process of collection ... 53.6 55.5 59.6 56.8 64.1 68.4 55.9 67.5 61.5 59.6 56.3 12 Other assets2 224.2 231.3 234.9 237.0 241.8 265.3 260.1 263.6 257.9 252.4 248.3 13 Total assets/total liabilities and capital ... 1,692.0 1,710.9 1,729.3 1,742.1 1,758.6 1,820.1 1,798.7 1,822.0 1,818.9 1,826.3 1,824.9 14 Deposits 1,266.4 1,279.1 1,290.7 1,300.2 1,316.9 1,361.8 1,340.6 1,368.3 1,374.2 1,368.0 1,370.8 15 Demand 314.4 315.5 323.0 326.5 338.1 363.9 324.0 337.9 333.4 329.2 324.5 16 Savings 227.1 229.5 230.9 238.2 244.9 296.4 361.5 395.2 419.2 426.9 440.2 17 Time 724.8 734.1 736.8 735.4 733.9 701.5 655.1 635.2 621.6 611.9 606.1 18 Borrowings 195.4 196.0 202.8 203.7 198.1 215.1 221.6 218.0 211.3 224.0 214.1 19 Other liabilities 99.1 103.9 103.4 106.2 109.3 109.2 106.4 106.0 103.5 102.3 104.7 20 Residual (assets less liabilities) 131.1 131.9 132.5 132.0 134.3 133.9 130.1 129.6 130.0 132.0 135.1 MEMO; 21 U.S. Treasury note balances included in borrowing 8.0 5.9 17.0 11.7 2.4 10.7 17.1 7.0 9.6 17.8 22..77 22 Number of banks 14,752 14,770 14,785 14,797 14,782 14,787 14,780 14,812 14,819 14,823 14,817 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and securities, excluding interbank 1,371.3 1,376.6 1,397.3 1,401.7 1,413.7 1,429.8 1,427.5 1,429.8 1,451.3 1,461.0 11,,446677..66 24 Loans, excluding interbank 1,020.8 1,024.7 1,042.4 1,042.3 1,052.1 1,054.9 1,044.8 1,042.3 1,054.5 1,055.2 1,055.9 25 Commercial and industrial 384.4 384.5 395.0 393.7 398.9 396.5 393.0 392.9 396.5 394.1 392.3 26 Other 636.4 640.2 647.4 648.6 653.2 658.4 652.4 650.0 658.6 661.8 664.7 27 U.S. Treasury securities 115.7 115.8 117.2 122.7 125.7 132.8 139.5 145.1 155.3 160.3 166.1 28 Other securities 234.8 236.1 237.7 236.7 235.9 242.1 243.2 242.4 241.5 245.5 245.8 29 Cash assets, total 169.3 176.2 173.7 178.7 181.2 200.7 183.7 200.5 185.5 186.3 180.3 30 Currency and coin 20.5 20.4 20.4 20.5 19.0 23.0 20.4 20.3 19.9 20.4 20.3 31 Reserves with Federal Reserve Banks 26.5 27.5 18.4 25.0 23.4 26.8 25.3 26.7 22.0 25.4 23.8 32 Balances with depository institutions . 67.8 71.8 74.2 75.3 74.4 81.4 81.1 84.9 81.0 79.8 78.9 33 Cash items in process of collection ... 54.6 56.5 60.6 57.8 64.3 69.4 56.9 68.6 62.6 60.7 57.3 34 Other assets2 299.4 306.8 310.3 313.9 323.3 341.7 333.2 330.2 325.4 317.7 309.5 35 Total assets/total liabilities and capital... 1,840.1 1,859.6 1,881.3 1,894.2 1,918.2 1,972.2 1,944.4 1,960.4 1,962.2 1,964.9 1,957.5 36 Deposits 1,307.3 1,321.7 1,335.5 1,345.2 1,358.1 1,409.7 1,385.4 1,412.6 1,419.5 1,411.0 1,413.1 37 Demand 326.8 327.7 335.1 338.9 344.9 376.2 335.9 350.2 345.7 341.1 336.4 38 Savings 227.4 229.7 231.1 238.5 245.1 296.7 361.9 395.6 419.7 427.3 440.7 39 Time 753.1 764.3 769.2 767.8 768.0 736.7 687.7 666.8 654.1 642.6 636.0 40 Borrowings 260.0 260.0 267.6 268.3 267.0 278.3 283.5 276.0 269.9 281.3 269.5 41 Other liabilities 139.8 144.1 143.8 146.9 156.6 148.4 143.5 140.4 141.1 138.7 137.9 42 Residual (assets less liabilities) 133.0 133.8 134.4 133.9 136.6 135.8 132.0 131.5 131.9 133.9 137.0 MEMO: 43 U.S. Treasury note balances included in borrowing 8.0 5.9 17.0 11.7 2.4 10.7 17.1 7.0 9.6 17.8 2.7 44 Number of banks 15,271 15,289 15,311 15,330 15,318 15,329 15,332 15,366 15,376 15,390 15,385 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

A20 Domestic Nonfinancial Statistics • June 1983 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 1983 AAccccoouunntt Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27p May 4p May IIP May 18P May 25p 1 Cash items in process of collection 49,325 52,165 49,457 50,748 47,572 52,362 47,365 50,071 43,484 2 Demand deposits due from banks in the United States.. 6,788 7,095 6,691 7,309 6,599 7,287 6,566 7,002 6,826 3 All other cash and due from depository institutions .... 33,978 32,359 31,061 33,591 35,833 31,989 32,358 35,159 34,433 4 Total loans and securities 652,512 668,910 662,138 662,077 657,064 666,383 661,926 660,384 657,721 Securities 5 U.S. Treasury securities 49,098 51,389 51,964 51,809 50,996 52,444 53,2% 53,484 52,581 6 Trading account 8,510 9,467 10,196 10,495 9,878 10,224 10,014 9,236 9,516 7 Investment account, by maturity 40,587 41,922 41,768 41,314 41,118 42,220 43,281 44,248 43,065 8 One year or less 12,996 13,901 13,744 13,335 13,217 13,419 13,982 13,945 13,728 9 Over one through five years 24,971 25,358 25,366 25,360 25,248 26,065 26,565 27,515 26,660 10 Over five years 2,621 2,662 2,658 2,618 2,653 2,US 2,734 2,788 2,677 11 Other securities 81,523 81,783 81,603 83,943 84,151 84,563 83,477 83,492 83,456 12 Trading account 4,679 5,294 4,931 6,624 6,602 7,365 6,031 5,938 5,784 13 Investment account 76,844 76,489 76,672 77,319 77,549 77,198 77,446 77,554 77,672 14 U.S. government agencies 16,220 16,209 16,231 16,553 16,757 16,766 16,865 16,867 16,866 15 States and political subdivisions, by maturity 57,083 56,735 56,850 57,182 57,314 56,988 57,150 57,221 57,318 16 One year or less 6,663 6,541 6,625 7,086 7,042 7,028 7,218 7,151 7,076 17 Over one year 50,420 50,194 50,225 50,096 50,272 49,960 49,932 50,070 50,241 18 Other bonds, corporate stocks and securities 3,542 3,544 3,592 3,584 3,478 3,444 3,431 3,466 3,488 Loans 19 Federal funds sold1 35,752 47,793 43,768 39,624 38,906 42,880 42,482 40,508 40,877 20 To commercial banks 25,216 36,485 31,438 27,823 27,369 31,123 31,836 30,350 30,305 21 To nonbank brokers and dealers in securities 7,228 7,860 8,897 8,798 8,275 8,569 8,122 7,555 7,830 22 To others 3,308 3,448 3,433 3,004 3,262 3,188 2,524 2,603 2,742 23 Other loans, gross 499,458 501,166 498,060 499,962 496,296 499,843 496,059 496,281 494,301 24 Commercial and industrial 216,581 217,432 215,562 216,022 214,742 216,333 214,345 213,016 212,600 25 Bankers acceptances and commercial paper 4,847 4,883 4,262 4,227 4,261 4,730 4,485 3,880 3,499 26 All other 211,734 212,549 211,299 211,795 210,481 211,602 209,860 209,136 209,101 27 U.S. addressees 204,931 205,836 204,543 205,040 203,946 204,645 203,038 202,298 202,253 28 Non-U.S. addressees 6,803 6,714 6,756 6,755 6,536 6,957 6,822 6,837 6,847 29 Real estate 133,922 133,991 134,093 134,189 134,009 133,981 133,919 134,207 134,209 30 To individuals for personal expenditures 74,789 74,815 74,904 75,278 75,3% 7755,,447788 7755,,334433 7755,,331199 7755,,443322 To financial institutions 31 Commercial banks in the United States 7,586 7,576 7,583 7,700 7,999 8,242 7,680 8,031 7,553 32 Banks in foreign countries 7,585 7,842 7,715 7,486 7,024 7,469 7,372 7,416 7,489 33 Sales finance, personal finance companies, etc 10,504 10,598 10,323 10,173 9,490 9,398 9,242 9,152 9,241 34 Other financial institutions 16,077 15,836 15,906 15,911 15,811 16,239 16,155 15,852 15,656 3 3 5 6 T T o o o n t o h n e b r a s n f k o r b p ro u k rc e h rs a s a i n n d g d an e d al e c r a s r r i y n i n s g e c s u e r c it u i r e i s t ies2 .... 8 2 , , 1 6 3 7 8 3 2 7 , , 7 5 2 3 7 2 7 2 , , 8 6 4 5 5 5 8 2 , , 1 8 6 2 0 4 7 2 , , 2 7 1 9 7 3 8 2 , , 2 7 1 7 5 7 7 2 , , 5 8 6 1 8 4 8 2 , , 0 9 2 9 8 2 7 2 , , 0 9 4 1 9 4 37 To finance agricultural production 6,638 6,693 6,782 6,841 6,808 6,857 6,843 6,869 6,902 38 All other 14,964 16,124 14,692 15,376 15,007 14,854 14,777 15,398 15,256 39 LESS: Unearned income 5,327 5,320 5,325 5,307 5,282 5,215 5,212 5,191 5,215 40 Loan loss reserve 7,991 7,901 7,932 7,954 8,003 8,131 8,175 8,191 8,279 41 Other loans, net 486,139 487,945 484,803 486,700 483,011 486,4% 482,672 482,900 480,807 42 Lease financing receivables 11,058 11,076 11,081 11,095 11,074 11,082 11,068 11,025 11,015 43 All other assets 141,703 146,750 144,585 144,023 140,470 144,576 142,788 139,598 135,098 44 Total assets 895,364 918,355 905,013 908,843 898,613 913,678 902,071 903,240 888,577 Deposits 45 Demand deposits 173,384 180,339 176,615 179,049 170,795 180,034 172,014 174,279 166,138 46 Mutual savings banks 541 704 668 707 640 730 608 683 581 47 Individuals, partnerships, and corporations 130,197 135,534 136,187 135,173 129,353 132,154 132,138 130,807 126,675 48 States and political subdivisions 4,439 4,942 4,375 5,020 4,863 5,924 4,594 4,771 4,622 49 U.S. government 2,095 1,817 1,586 4,234 3,477 3,472 2,107 2,757 1,548 50 Commercial banks in the United States 18,668 20,536 19,157 19,464 17,587 20,718 17,874 19,913 18,691 51 Banks in foreign countries 5,600 5,738 5,800 5,364 5,572 5,759 5,768 5,502 55,,662266 52 Foreign governments and official institutions 1,064 901 1,016 982 1,051 %1 1,016 974 998888 53 Certified and officers' checks 10,780 10,166 7,825 8,104 8,252 10,316 7,908 8,871 7,408 54 Time and savings deposits 415,145 415,356 416,465 413,895 409,971 409,700 409,528 408,680 409,685 55 Savings 164,469 168,963 169,494 169,232 166,842 169,255 170,165 171,430 172,086 56 Individuals and nonprofit organizations 148,179 152,491 152,849 152,533 149,953 152,135 152,788 153,684 154,228 57 Partnerships and corporations operated for profit .. 15,081 15,314 15,500 15,525 15,764 15,939 16,218 16,555 16,702 58 Domestic governmental units 1,100 1,073 1,056 1,082 1,030 1,083 1,068 1,101 1,068 59 All other 109 85 89 93 94 97 91 90 88 60 Time 250,676 246,393 246,971 244,663 243,128 240,445 239,362 237,250 237,599 61 Individuals, partnerships, and corporations 216,971 213,962 214,027 212,323 211,067 209,452 208,417 206,508 208,044 62 States and political subdivisions 19,789 19,088 19,286 19,196 19,264 18,659 18,842 18,651 18,685 63 U.S. government 519 502 623 595 579 526 349 350 357 64 Commercial banks in the United States 9,710 9,251 9,387 9,042 8,683 88,,228877 88,,221166 88,,330077 77,,114444 65 Foreign governments, official institutions, and banks 3,686 3,589 3,648 3,507 33,,553366 33,,552211 33,,553388 33,,443344 33,,336699 Liabilities for borrowed money 66 1,196 140 570 3,229 145 543 1 222 684 67 Treasury tax-and-loan notes 7,583 3,548 3,674 12,897 13,919 11,513 9,163 6,956 1,517 68 All other liabilities for borrowed money3 156,391 177,602 165,571 161,425 159,573 170,014 169,892 169,779 166,465 69 Other liabilities and subordinated notes and debentures . 82,533 81,483 82,606 81,172 81,533 82,000 80,432 81,995 83,957 70 Total liabUities 836,232 858,468 844,930 849,008 839,020 853,406 841,572 842,911 828,446 71 Residual (total assets minus total liabilities)4 59,132 59,888 60,082 59,835 59,593 60,272 60,499 60,329 60,130 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

Weekly Reporting Banks A21 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 1983 AAccccoouunntt Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27p May 4p May 11? May 18P May 25? 1 Cash items in process of collection 46,745 49,227 46,480 47,438 44,575 49,302 44,698 47,207 40,918 2 Demand deposits due from banks in the United States.. 6,272 6,535 6,128 6,709 6,024 6,767 6,058 6,429 6,282 3 All other cash and due from depository institutions .... 31,020 29,653 28,331 30,406 32,794 29,306 29,508 32,317 31,422 4 Total loans and securities 606,847 621,652 615,042 615,260 610,775 619,094 615,204 613,827 611,891 Securities 5 U.S. Treasury securities 44,674 46,901 47,498 47,376 46,614 48,032 48,889 48,967 48,130 6 Trading account 8,341 9,249 10,005 10,280 9,656 10,025 9,883 9,071 9,360 7 Investment account, by maturity 36,333 37,652 37,493 37,096 36,958 38,007 39,006 39,896 38,769 8 One year or less 11,293 12,130 11,982 11,632 11,579 11,681 12,214 12,160 11,961 9 Over one through five years 22,672 23,114 23,109 23,101 22,980 23,826 24,293 25,183 24,358 10 Over five years 2,367 2,408 2,403 2,364 2,399 2,500 2,499 2,553 2,450 11 Other securities 74,191 74,500 74,244 76,485 76,628 76,930 75,903 75,798 75,788 12 Trading account 4,527 5,140 4,735 6,477 6,490 7,182 5,875 5,684 5,594 13 Investment account 69,664 69,360 69,509 70,008 70,138 69,748 70,028 70,114 70,194 14 U.S. government agencies 14,818 14,824 14,868 15,133 15,245 15,192 15,298 15,298 15,285 15 States and political subdivisions, by maturity 51,657 51,350 51,423 51,666 51,796 51,506 51,667 51,721 51,802 16 One year or less 5,917 5,806 5,894 6,305 6,258 6,226 6,409 6,341 6,259 17 Over one year 45,739 45,544 45,530 45,362 45,537 45,280 45,258 45,380 45,543 18 Other bonds, corporate stocks and securities 3,189 3,185 3,218 3,209 3,097 3,050 3,063 3,096 3,106 Loans 19 Federal funds sold1 31,280 41,781 37,896 34,370 34,162 37,492 37,591 36,100 37,056 20 To commercial banks 21,278 31,072 26,216 23,318 23,239 26,352 27,493 26,466 26,995 21 To nonbank brokers and dealers in securities 6,769 7,344 8,323 8,129 7,733 7,989 7,596 7,050 7,339 22 To others 3,233 3,364 3,357 2,923 3,189 3,152 2,502 2,584 2,722 23 Other loans, gross 469,006 470,683 467,654 469,277 465,641 468,977 465,195 465,323 463,392 24 Commercial and industrial 205,053 205,922 204,104 204,487 203,225 204,617 202,586 201,245 200,883 25 Bankers acceptances and commercial paper 4,439 4,491 3,904 3,867 3,859 4,304 4,035 3,420 3,050 26 All other 200,613 201,431 200,200 200,620 199,366 200,312 198,551 197,826 197,833 27 U.S. addressees 193,919 194,829 193,550 193,973 192,938 193,466 191,841 191,107 191,105 28 Non-U.S. addressees 6,694 6,602 6,650 6,647 6,428 6,847 6,709 6,719 6,728 29 Real estate 125,842 125,864 125,924 126,049 125,831 125,814 125,735 126,002 126,005 30 To individuals for personal expenditures 66,527 66,498 66,585 66,915 67,022 67,104 66,957 66,929 67,012 To financial institutions 31 Commercial banks in the United States 7,130 7,184 7,213 7,231 7,588 7,842 7,297 7,632 7,155 32 Banks in foreign countries 7,500 7,757 7,638 7,365 6,936 7,398 7,301 7,344 7,416 33 Sales finance, personal finance companies, etc 10,329 10,427 10,144 10,004 9,310 9,228 9,071 8,979 9,056 34 Other financial institutions 15,444 15,212 15,285 15,292 15,194 15,570 15,489 15,199 15,016 35 To nonbank brokers and dealers in securities 8,104 7,496 7,815 8,114 7,170 8,168 7,530 7,986 7,014 36 To others for purchasing and carrying securities2 .... 2,434 2,489 2,418 2,578 2,552 2,540 2,575 2,755 2,675 37 To finance agricultural production 6,445 6,499 6,587 6,644 6,610 6,656 6,639 6,662 6,699 38 All other 14,199 15,334 13,941 14,596 14,203 14,039 14,015 14,589 14,461 39 LESS: Unearned income 4,717 4,717 4,720 4,702 4,676 4,617 4,614 4,590 4,615 40 Loan loss reserve 7,588 7,497 7,529 7,547 7,594 7,720 7,761 7,772 7,860 41 Other loans, net 456,702 458,470 455,405 457,028 453,371 456,640 452,820 452,961 450,917 42 Lease financing receivables 10,666 10,677 10,677 10,687 10,666 10,675 10,664 10,627 10,617 43 All other assets 137,282 142,644 140,417 139,887 136,335 140,381 138,709 135,502 131,064 44 Total assets 838,833 860,387 847,076 850,386 841,170 855,525 844,841 845,910 832,195 Deposits 45 Demand deposits 161,227 167,522 163,813 165,911 158,279 167,112 159,804 161,896 154,283 46 Mutual savings banks 518 661 632 681 615 694 579 649 553 47 Individuals, partnerships, and corporations 120,804 125,677 126,247 125,439 119,853 122,190 122,507 121,184 117,282 48 States and political subdivisions 3,842 4,326 3,850 4,383 4,283 5,348 4,076 4,170 4,151 49 U.S. government 1,898 1,580 1,256 3,449 2,921 3,164 1,958 2,513 1,432 50 Commercial banks in the United States 17,164 18,943 17,617 17,913 16,100 19,059 16,323 18,391 17,205 51 Banks in foreign countries 5,547 5,694 5,760 5,319 5,528 5,714 5,726 5,456 5,582 52 Foreign governments and official institutions 1,062 900 1,015 981 1,050 960 1,015 973 986 53 Certified and officers' checks 10,394 9,741 7,434 7,746 7,928 9,982 7,620 8,559 7,092 54 Time and savings deposits 386,236 386,132 387,236 384,680 380,896 380,643 380,470 379,601 380,457 55 Savings 152,264 156,382 156,880 156,666 154,478 156,671 157,551 158,738 159,376 56 Individuals and nonprofit organizations 137,356 141,313 141,640 141,363 138,970 140,966 141,607 142,444 142,980 57 Partnerships and corporations operated for profit .. 13,788 14,003 14,181 14,214 14,468 14,610 14,868 15,187 15,321 58 Domestic governmental units 1,020 990 978 1,003 955 1,006 990 1,023 991 59 All other 100 77 81 85 85 89 86 84 84 60 Time 233,971 229,749 230,355 228,014 226,418 223,972 222,919 220,863 221,082 61 Individuals, partnerships, and corporations 202,565 199,543 199,649 197,904 196,593 195,147 194,140 192,261 193,690 62 States and political subdivisions 17,786 17,154 17,333 17,247 17,307 16,756 16,949 16,787 16,800 63 U.S. government 430 408 528 509 492 446 258 258 262 64 Commercial banks in the United States 9,504 9,056 9,198 8,849 8,490 8,102 8,034 8,122 6,960 65 Foreign governments, official institutions, and banks 3,686 3,589 3,648 3,507 3,536 3,521 3,538 3,434 3,369 Liabilities for borrowed money 66 1,158 130 544 3,145 145 543 1,215 668 67 Treasury tax-and-loan notes 7,114 3,324 3,466 12,229 13,209 10,868 8,622 6,539 1,440 68 All other liabilities for borrowed money3 147,288 167,610 155,770 151,739 150,223 160,284 160,312 160,190 157,113 69 Other liabilities and subordinated notes and debentures 80,476 79,593 80,519 79,245 79,622 80,036 78,428 79,967 81,923 70 Total liabilities 783,499 804,311 790,804 794,349 785,375 799,089 788,181 789,407 775,884 71 Residual (total assets minus total liabilities)4 55,334 56,076 56,272 56,036 55,795 56,436 56,660 56,502 56,311 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

A22 Domestic Nonfinancial Statistics • June 1983 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1983 Account Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27p May Ap May IIP May 18" May 25p 1 Cash items in process of collection 18,952 18,548 16,742 17,208 15,856 17,214 16,302 18,229 14,489 2 Demand deposits due from banks in the United States.. 1,064 1,101 934 1,017 902 1,257 1,020 1,245 1,212 3 All other cash and due from depository institutions .... 5,884 7,476 5,085 4,373 5,628 7,298 6,167 6,518 5,880 4 Total loans and securities1 142,175 145,475 142,749 142,886 141,999 142,754 142,088 144,466 142,980 Securities 5 6 7 Investment account, by maturity 8,860 9,475 9,467 9,454 9,399 9,718 10,485 10,685 9,555 8 One year or less 1,413 1,635 1,628 1,630 1,684 1,817 2,368 2,363 2,248 9 Over one through five years 6,935 7,292 7,278 7,316 7,211 7,360 7,574 7,814 6,799 10 Over five years 511 548 561 508 504 541 543 508 508 11 1? 13 Investment account 13,815 13,746 13,769 14,078 14,044 13,916 14,085 14,151 14,133 14 U.S. government agencies 1,444 1,465 1,465 1,464 1,447 1,458 1,450 1,528 1,522 15 States and political subdivisions, by maturity 11,585 11,501 11,515 11,802 11,777 11,630 11,792 11,805 11,800 16 One year or less 1,376 1,301 1,309 1,568 1,518 1,466 1,609 1,562 1,528 17 Over one year 10,209 10,200 10,206 10,234 10,258 10,164 10,183 10,244 10,271 18 Other bonds, corporate stocks and securities 786 780 790 812 821 827 843 818 811 Loans 19 Federal funds sold3 8,839 11,083 9,872 9,279 11,033 10,108 10,065 12,383 13,051 20 To commercial banks 4,160 5,528 4,363 4,153 5,527 4,584 5,129 7,433 7,643 21 To nonbank brokers and dealers in securities 3,019 3,886 3,903 3,690 4,004 4,085 4,105 3,955 4,220 22 To others 1,660 1,668 1,605 1,436 1,503 1,438 831 995 1,187 23 Other loans, gross 114,586 115,010 113,537 113,986 111,447 112,948 111,398 111,182 110,233 24 Commercial and industrial 59,295 59,628 58,739 58,814 57,876 58,283 57,536 57,051 56,786 25 Bankers' acceptances and commercial paper 1,211 952 1,086 1,037 951 1,165 1,171 917 908 26 All other 58,084 58,676 57,653 57,777 56,925 57,118 56,365 56,133 55,879 27 U.S. addressees 56,525 57,228 56,188 56,306 55,431 55,616 54,856 54,655 54,403 28 Non-U.S. addressees 1,559 1,448 1,465 1,471 1,494 1,502 1,508 1,479 1,476 29 Real estate 19,264 19,317 19,297 19,408 19,498 19,533 19,419 19,586 19,574 30 To individuals for personal expenditures 11,460 11,460 11,480 11,578 11,541 11,620 1111,,661122 1111,,555555 1111,,556600 To financial institutions 31 Commercial banks in the United States 2,255 2,362 2,423 2,240 2,501 2,377 2,201 2,238 2,105 32 Banks in foreign countries 2,592 2,728 2,781 2,496 2,339 2,758 2,726 2,613 2,712 33 Sales finance, personal finance companies, etc 4,515 4,606 4,428 4,317 3,942 3,864 3,800 3,747 3,725 34 Other financial institutions 4,919 4,795 4,751 4,942 4,885 4,918 4,616 4,543 4,498 35 To nonbank brokers and dealers in securities 5,298 4,732 4,722 5,329 4,167 4,881 4,805 4,829 4,146 36 To others for purchasing and carrying securities4 .... 686 680 678 599 570 587 564 540 551 37 To finance agricultural production 480 480 483 506 481 467 458 472 474 38 All other 3,821 4,220 3,754 3,756 3,645 3,660 3,661 4,008 4,101 39 LESS: Unearned income 1,426 1,416 1,432 1,440 1,432 1,404 1,409 1,396 1,405 40 Loan loss reserve 2,498 2,423 2,464 2,471 2,492 2,531 2,537 2,539 2,587 41 Other loans, net 110,661 111,171 109,641 110,075 107,523 109,013 107,452 107,247 106,242 42 Lease financing receivables 2,008 2,020 2,028 2,042 2,041 2,032 2,032 2,012 2,012 43 All other assets5 56,502 60,269 62,041 63,782 60,583 63,432 62,693 59,580 55,475 44 Total assets 226,586 234,888 229,579 231,307 227,009 233,988 230,302 232,049 222,048 Deposits 45 Demand deposits 49,699 49,709 47,665 48,766 46,146 49,174 46,818 48,946 44,860 46 Mutual savings banks 179 279 294 369 312 302 262 311 246 47 Individuals, partnerships, and corporations 31,807 32,722 32,692 33,206 30,726 30,471 31,525 31,857 30,007 48 States and political subdivisions 574 747 606 710 646 1,103 727 688 680 49 U.S. government 555 273 381 965 915 854 586 630 419 50 Commercial banks in the United States 4,640 5,083 4,496 4,684 4,139 5,485 4,300 5,529 4,739 51 Banks in foreign countries 4,238 4,509 4,544 4,059 4,322 4,432 4,437 4,200 4,199 52 Foreign governments and official institutions 833 680 795 765 859 772 816 768 794 53 Certified and officers' checks 6,872 5,416 3,857 4,008 4,226 5,753 4,165 4,961 3,775 54 Time and savings deposits 74,760 74,811 74,976 73,852 72,728 72,126 72,063 72,283 72,471 55 Savings 25,310 26,457 26,949 27,094 27,013 27,537 27,899 28,428 28,705 56 Individuals and nonprofit organizations 23,053 24,198 24,653 24,707 24,600 25,049 25,360 25,752 26,032 57 Partnerships and corporations operated for profit .. 1,986 2,007 2,057 2,132 2,165 2,205 2,265 2,389 2,411 58 Domestic governmental units 199 205 186 197 189 220 214 228 203 59 All other 72 47 53 58 58 62 60 59 58 60 Time 49,450 48,354 48,028 46,758 45,716 44,590 44,164 43,856 43,766 61 Individuals, partnerships, and corporations 40,711 40,048 39,187 38,232 37,354 36,537 36,383 35,976 36,836 62 States and political subdivisions 2,271 2,213 2,266 2,283 2,299 2,196 2,201 2,188 2,220 63 U.S. government 81 70 303 280 230 230 39 39 39 64 Commercial banks in the United States 4,877 4,538 4,711 4,503 44,,335555 44,,118844 44,,007733 44,,223333 33,,330055 65 Foreign governments, official institutions, and banks 11,,551100 1,486 1,561 1,460 11,,447766 11,,444444 11,,446677 11,,442200 11,,336666 Liabilities for borrowed money 66 475 1,110 400 1 120 67 Treasury tax-and-loan notes 1,994 922 971 3,041 3,134 2,578 2,184 1,707 478 68 All other liabilities for borrowed money6 49,541 58,041 54,351 53,917 52,580 58,664 58,191 55,750 51,150 69 Other liabilities and subordinated notes and debentures . 31,783 32,156 32,270 32,007 32,190 32,124 31,137 32,773 33,649 70 Total liabUities 207,778 215,641 210,234 212,058 207,889 214,666 210,792 212,579 202,608 71 Residual (total assets minus total liabilities)7 18,807 19,248 19,346 19,250 19,120 19,322 19,510 19,470 19,440 1. Excludes trading account securities. 5. Includes trading account securities. 2. Not available due to confidentiality. 6. Includes federal funds purchased and securities sold under agreements to 3. Includes securities purchased under agreements to resell. repurchase. 4. Other than financial institutions and brokers and dealers. 7. Not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A23 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1983 AAccccoouunntt Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. Hp May Ap May \ \p May 18" May 25p BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross) and securities adjusted1 633,028 638,071 636,375 639,815 634,981 640,365 635,798 635,384 633,357 2 Total loans (gross) adjusted1 502,408 504,899 502,808 504,063 499,834 503,358 499,026 498,408 497,320 3 Demand deposits adjusted2 103,296 105,822 106,415 104,603 102,158 103,482 104,668 101,537 102,416 4 Time deposits in accounts of $100,000 or more 154,933 151,141 151,702 149,291 147,913 145,113 144,558 142,564 143,112 5 Negotiable CDs 106,730 103,225 103,772 101,270 99,732 97,203 96,557 94,601 95,119 6 Other time deposits 48,202 47,916 47,930 48,021 48,181 47,909 48,000 47,963 47,993 7 Loans sold outright to affiliates3 3,017 3,036 3,051 3,047 2,868 2,790 2,808 2,808 2,757 8 Commercial and industrial 2,390 2,412 2,426 2,427 2,243 2,172 2,189 2,189 2,145 9 Other 626 624 625 619 624 617 619 619 611 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and securities adjusted1 590,743 595,609 593,862 596,959 592,218 597,238 592,789 592,090 590,216 11 Total loans (gross) adjusted1 471,878 474,208 472,121 473,098 468,976 472,276 467,997 467,325 466,298 12 Demand deposits adjusted2 95,421 97,772 98,460 97,111 94,683 95,587 96,825 93,785 94,727 13 Time deposits in accounts of $100,000 or more 146,783 143,037 143,618 141,157 139,763 137,193 136,683 134,724 135,127 14 Negotiable CDs 102,353 98,804 99,390 96,864 95,317 92,909 92,295 90,381 90,806 15 Other time deposits 44,430 44,233 44,228 44,293 44,446 44,284 44,388 44,343 44,321 16 Loans sold outright to affiliates3 2,953 2,972 2,988 2,991 2,813 2,734 2,753 2,755 2,704 17 Commercial and industrial 2,345 2,366 2,380 2,384 2,200 2,128 2,145 2,146 2,104 18 Other 608 606 608 606 612 606 608 609 600 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted14 139,684 141,424 139,858 140,404 137,896 139,728 138,703 138,730 137,223 20 Total loans (gross) adjusted1 117,010 118,202 116,622 116,872 114,452 116,094 114,133 113,894 113,535 21 Demand deposits adjusted2 25,552 25,805 26,045 25,909 25,236 25,620 25,630 24,557 25,212 22 Time deposits in accounts of $100,000 or more 38,409 37,387 37,198 35,977 35,062 33,830 33,639 33,471 33,438 23 Negotiable CDs 28,382 27,308 27,183 25,913 25,058 23,774 23,639 23,362 23,408 24 Other time deposits 10,027 10,079 10,015 10,063 10,004 10,056 10,000 10,109 10,031 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

A24 Domestic NonfinancialS tatistics • June 1983 1.291 LARGE WEEKLY REPORTING BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27p May 4p May 11 p May 18? May 25p 1 Cash and due from depository institutions. 7,448 7,816 7,626 7,245 7,148 8,138 7,076 7,448 6,873 2 Total loans and securities 43,530 41,268 40,265 41,666 40,949 40,957 40,458 40,832 39,972 3 U.S. Treasury securities 3,935 4,065 3,985 3,738 3,956 4,148 4,068 3,985 4,282 4 Other securities 901 876 844 833 838 844 887 918 923 5 Federal funds sold1 2,661 2,270 1,700 2,919 2,130 2,491 1,838 2,588 2,152 6 To commercial banks in United States .. 2,578 2,180 1,637 2,688 1,717 2,093 1,593 2,430 2,058 7 To others 83 90 63 230 413 399 245 157 94 8 Other loans, gross 36,033 34,057 33,736 34,176 34,026 33,474 33,665 33,342 32,615 9 Commercial and industrial 18,690 17,696 17,653 17,719 17,512 17,264 17,596 1177,,446611 1177,,221100 10 Bankers acceptances and commercial paper 2,700 2,621 2,676 2,616 2,566 2,482 2,570 2,500 2,452 11 All other 15,990 15,075 14,977 15,103 14,945 14,782 15,026 14,961 14,759 12 U.S. addressees 14,252 13,406 13,323 13,379 13,274 12,890 13,174 13,184 12,966 13 Non-U.S. addressees 1,738 1,669 1,654 1,725 1,671 1,892 1,852 1,776 1,793 14 To financial institutions 13,390 12,642 12,443 12,504 12,563 12,247 12,349 12,093 11,717 15 Commercial banks in United States... 10,175 9,566 9,285 9,445 9,618 9,293 9,357 9,144 8,880 16 Banks in foreign countries 2,656 2,485 2,554 2,443 2,356 2,387 2,415 2,385 2,260 17 Nonbank financial institutions 558 591 604 617 589 567 578 565 576 18 For purchasing and carrying securities .. 426 312 244 370 356 457 236 193 224 19 All other 3,526 3.407 3,396 3,582 3,595 3,506 3,484 3,595 3,463 20 Other assets (claims on nonrelated parties) 10,242 9,940 10,358 10,461 10,781 10,645 10,729 9,797 9,929 21 Net due from related institutions 12,854 15,163 14,192 12,636 12,915 13,100 13,444 12,056 11,370 22 Total assets 74,073 74,186 72,441 72,008 71,794 72,840 71,707 70,134 68,143 23 Deposits or credit balances2 24,111 23,622 22,440 22,288 22,123 21,851 21,980 22,198 21,072 24 Credit balances 188 176 193 173 183 207 178 204 203 25 Demand deposits 1,703 2,351 1,696 1,781 1,689 2,253 1,815 2,616 1,820 26 Individuals, partnerships, and corporations 800 851 778 789 782 843 768 1,047 900 27 Other 904 1,500 918 991 906 1,411 1,048 1,568 920 28 Total time and savings 22,219 21,095 20,551 20,334 20,250 19,391 19,987 19,378 19,048 29 Individuals, partnerships, and corporations 18,922 17,999 17,619 17,581 17,524 16,604 17,286 16,516 16,179 30 Other 3,297 3,096 2,932 2,753 2,727 2,787 2,701 2,862 2,869 31 Borrowings3 29,914 31,988 31,842 30,453 29,993 30,776 30,914 28,621 29,429 32 Federal funds purchased4 8,255 11,190 10,905 10,024 10,143 11,197 11,466 9,762 10,387 33 From commercial banks in United States 6,402 9,451 9,166 8,419 8,500 9,421 9,554 7,930 8,367 34 From others 1,852 1,739 1,738 1,605 1,643 1,776 1,912 1,832 2,020 35 Other liabilities for borrowed money.... 21,660 20,798 20,937 20,429 19,850 19,579 19,448 18,859 19,042 36 To commercial banks in United States 19,242 18,466 18,291 17,836 17,058 16,802 16,717 16,245 16,424 37 To others 2,418 2,333 2,646 2,593 2,792 2,776 2,731 2,614 2,618 38 Other liabilities to nonrelated parties 11,071 10,890 11,225 11,361 11,614 11,586 11,591 11,342 11,248 39 Net due to related institutions 8,977 7,685 6,934 7,906 8,064 8,627 7,221 7,973 6,394 40 Total liabilities 74,073 74,186 72,441 72,008 71,794 72,840 71,707 70,134 68,143 MEMO 41 Total loans (gross) and securities adjusted' 30,776 29,522 29,343 29,533 29,614 29,571 29,508 29,258 29,033 42 Total loans (gross) adjusted5 25,941 24,580 24,514 24,961 24,820 24,579 24,553 24,356 23,828 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. 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans A ASeries discontinued. 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 Corporations1 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. Dec. 1 All holders—Individuals, partnerships, and corporations 294.6 302.2 315.5 t 277.5 288.9 268.9 271.5 276.7 295.4 | 2 Financial business 27.8 27.1 29.8 28.2 28.0 27.8 28.6 31.9 35.5 3 Nonfinancial business 152.7 157.7 162.3 n.a. 148.6 154.8 138.7 141.4 142.9 151.7 4 Consumer 97.4 99.2 102.4 1 82.1 86.6 84.6 83.7 83.3 88.1 5 Foreign 2.7 3.1 3.3 3.1 2.9 3.1 2.9 2.9 3.0 6 Other 14.1 15.1 17.2 15.5 16.7 14.6 15.0 15.7 17.1 Weekly reporting banks 1981 1982 11997788 1199779944 11998800 DDeecc.. DDeecc.. DDeecc.. June3 Sept. Dec. Mar. June Sept. Dec. 7 All holders—Individuals, partnerships, and corporations 147.0 139.3 147.4 131.3 137.5 126.8 127.9 132.1 144.0 8 Financial business 19.8 20.1 21.8 n.a. 20.7 21.0 20.2 20.2 23.4 26.7 9 Nonfinancial business 79.0 74.1 78.3 71.2 75.2 67.1 67.7 68.7 74.2 10 Consumer 38.2 34.3 35.6 28.7 30.4 29.2 29.7 29.6 31.9 11 Foreign 2.5 3.0 3.1 2.9 2.8 2.9 2.8 2.7 2.9 12 Other 7.5 7.8 8.6 y 7.9 8.0 7.3 7.5 7.7 8.4 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 Nonfinancial Statistics • June 1983 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1982 1983 IInnssttrruummeenntt 1977 1978 1979' 1980 1981 Dec. Dec. Dec. Dec. Dec. Nov. Dec.6' Jan/ Feb/ Mar/ Apr. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 65,051 83,438 112,803 124,374 165,455 165,110 166,263 165,311 168,679 167,750 170,745 Financial companies2 Dealer-placed paper3 2 Total 8,796 12,181 17,359 19,599 29,904 35,219 34,101 35,468 37,622 36,255 37,481 3 Bank-related (not seasonally adjusted) 2,132 3,521 2,784 3,561 6,045 6,232 2,516 2,660 2,604 22,,003300 1,950 Directly placed paper* 4 Total 40,574 51,647 64,757 67,854 81,715 78,290 84,204 82,978 8855,,002200 8855,,885588 87,917 5 Bank-related (not seasonally adjusted) 7,102 12,314 17,598 22,382 26,914 27,769 32,034 31,691 31,661 32,951 32,495 6 Nonfinancial companies5 15,681 19,610 30,687 36,921 53,836 51,601 47,958 46,865 46,037 45,637 45,347 Bankers dollar acceptances (not seasonally adjusted) 7 Total 25,450 33,700 45,321 54,744 69,226 77,125 79,543 77,529 73,706 70,843 Holder 8 Accepting banks 10,434 8,579 9,865 10,564 10,857 10,596 10,910 10,249 9,567 10,518 9 Own bills 8,915 7,653 8,327 8,963 9,743 9,455 9,471 9,067 8,258 9,083 10 Bills bought 1,519 927 1,538 1,601 1,115 1,140 1,439 1,182 1,308 1,435 Federal Reserve Banks 11 Own account 954 587 704 776 195 0 1,480 0 0 0 n.a. 12 Foreign correspondents 362 664 1,382 1,791 1,442 992 949 965 1,003 758 13 Others 13,700 23,870 33,370 41,614 56,926 65,537 66,204 66,315 63,136 59,568 Basis 14 Imports into United States 6,378 8,574 10,270 11,776 14,765 16,716 17,683 15,803 14,976 14,217 15 Exports from United States 5,863 7,586 9,640 12,712 15,400 16,711 16,328 17,931 17,633 16,826 16 All other 13,209 17,540 25,411 30,257 39,061 43,699 45,532 43,794 41,097 39,800 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. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective date Effective Date Average rate 1981—Nov. 17 16.50- Aug. 2 15.00 1982—Jan 15.75 1982—Nov 17.00 16 14.50 Feb 16.56 Dec 20 16.50 18 14.00 Mar 16.50 24 16.00 23 13.50 Apr 16.50 1983—Jan Dec. 1 15.75 Oct. 7 13.00 May 16.50 Feb 14 12.00 June 16.50 Mar 1982—Feb. 18 17.00 Nov. 22 11.50 July 16.26 23 16.50 Aug 14.39 May July 20 16.00 1983—Jan. 11 11.00 Sept 13.50 29 15.50 Feb. 28 10.50 Oct 12.52 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business Lending All 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 7-11, 1983 Size of loan (in thousands of dollars) All Item sizes 1-24 25-49 50-99 100-499 500-999 and over SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 41,172,020 1,021,295 553,106 692,787 1,803,408 797,941 36,303,484 2 Number of loans 168,504 125,222 16,919 11,148 9,316 1,200 4,698 3 Weighted-average maturity (months) 1.0 4.1 4.2 4.8 4.1 3.2 .6 4 With fixed rates .7 3.9 3.2 4.5 2.8 1.7 .5 5 With floating rates 2.5 4.6 5.8 5.5 5.5 4.7 1.7 6 Weighted-average interest rate (percent per annum) .. 10.20 14.44 13.57 13.40 12.71 11.59 9.81 7 Interquartile range1 9.42-10.33 13.12-15.48 12.68-14.37 12.47-14.37 11.68-13.75 10.64-12.56 9.38-9.96 8 With fixed rates 10.01 14.73 14.09 13.79 13.07 10.76 9.72 9 With floating rates 10.93 13.76 12.97 12.84 12.45 12.10 10.27 Percentage of amount of loans 10 With floating rate 20.6 29.5 46.2 4411..00 5566..66 6611..99 1166..99 11 Made under commitment 57.3 32.2 44.5 39.2 46.5 66.7 58.8 12 With no stated maturity 7.6 12.0 19.3 13.7 21.2 30.1 6.0 13 With one-day maturity 46.6 .0 .1 .1 .3 6.4 52.7 1-99 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 14 Amount of loans (thousands of dollars) 3,511,595 462,857 450,537 144,074 2,454,128 15 Number of loans 24,758 21,881 2,201 218 459 16 Weighted-average maturity (months) 52.5 42.2 75.2 41.2 50.9 17 With fixed rates 52.0 41.3 34.9 49.3 60.3 18 With floating rates 52.7 43.2 95.9 39.5 47.5 19 Weighted-average interest rate (percent per annum) .. 11.81 14.56 13.86 12.48 10.88 20 Interquartile range1 9.95-12.68 12.68-16.08 12.68-15.16 11.57-13.03 9.76-11.73 21 With fixed rates 12.19 15.68 14.27 12.09 10.34 22 With floating rates 11.64 13.22 13.65 12.56 11.07 Percentage of amount of loans 23 With floating rate 69.3 45.5 6666..11 8822..66 7733..77 24 Made under commitment 69.0 27.0 54.5 65.7 79.8 11--2244 2255--4499 5500--9999 CCOONNSSTTRRUUCCTTIIOONN AANNDD LLAANNDD DDEEVVEELLOOPPMMEENNTT LLOOAANNSS 25 Amount of loans (thousands of dollars) 1,859,351 131,679 143,094 174,067 325,998 1,084,513 26 Number of loans 26,699 16,985 4,323 2,764 2,253 374 27 Weighted-average maturity (months) 6.2 4.7 7.7 6.8 9.0 5.3 28 With fixed rates 4.3 4.3 7.8 4.3 3.9 3.4 29 With floating rates 7.9 6.6 7.5 8.1 11.5 6.7 30 Weighted-average interest rate (percent per annum) .. 12.56 14.84 15.54 13.45 13.89 11.35 31 Interquartile range1 10.92-13.81 13.43-16.83 13.88-18.12 12.55-15.02 13.24-14.75 10.09-12.13 32 With fixed rates 12.52 15.18 16.03 12.66 13.52 10.63 33 With floating rates 12.60 13.40 12.96 13.85 14.06 11.83 Percentage of amount of loans 34 With floating rate 55.5 19.1 15.9 6666..33 6677..55 5599..88 35 Secured by real estate 61.1 71.4 32.7 81.3 97.9 49.3 36 Made under commitment 45.1 40.9 26.8 44.1 84.4 36.4 37 With no stated maturity 3.8 10.1 1.3 3.6 1.6 4.0 38 With one-day maturity 2.1 .1 .0 .0 .0 3.6 Type of construction 39 1- to 4-family 20.4 53.5 26.5 41.4 36.7 7.3 40 Multifamily 5.7 .6 1.6 2.0 4.0 8.0 41 Nonresidential 73.9 45.9 71.9 56.6 59.4 84.7 AAllll ssiizzeess 1-9 1100--2244 2255--4499 50-99 100-249 250 and over LLOOAANNSS TTOO FFAARRMMEERRSS 42 Amount of loans (thousands of dollars) 1,245,489 163,829 181,268 155,502 170,728 346,388 227,774 43 Number of loans 66,458 44,427 12,094 4,528 2,701 2,349 359 44 Weighted-average maturity (months) 9.6 7.9 8.9 7.1 11.2 12.7 6.9 45 Weighted-average interest rate (percent per annum) .. 13.85 14.44 14.48 14.21 14.05 13.99 12.30 46 Interquartile range1 13.10-14.75 13.52-15.03 13.96-15.00 13.65-14.93 13.62-14.49 13.52-14.65 11.47-13.38 By purpose of loan 47 Feeder livestock 13.76 1144..3377 14.40 1144..5511 1133..2277 1144..6644 1122..3388 48 Other livestock 14.23 14.63 14.51 14.71 (2) (2) (2) 49 Other current operating expenses 14.10 14.46 14.48 13.87 14.24 14.55 12.87 50 Farm machinery and equipment 14.15 13.99 14.33 14.26 (2) (2) (2) 51 Other 13.14 14.69 14.91 14.43 14.11 12.94 10.96 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 NonfinancialS tatistics • June 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. 1983 1983, week ending IInnssttrruummeenntt 11998800 11998811 11998822 Feb. Mar. Apr. May Apr. 29 May 6 May 13 May 20 May 27 MONEY MARKET RATES 1 Federal funds1'2 13.36 16.38 12.26 8.51 8.77 8.80 8.63 8.58 8.80 8.48 8.59 8.72 Commercial paper3'4 2 1-month 12.76 15.69 11.83 8.30 8.56 8.58 8.36 8.36 8.29 8.22 8.39 8.48 3 3-month 12.66 15.32 11.89 8.34 8.52 8.53 8.33 8.33 8.21 8.16 8.35 8.54 4 6-month 12.29 14.76 11.89 8.39 8.48 8.48 8.31 8.30 8.14 8.11 8.33 8.56 Finance paper, directly placed3 4 5 1-month 12.44 15.30 11.64 8.25 8.48 8.52 8.28 8.34 8.20 8.13 8.28 8.43 6 3-month 11.49 14.08 11.23 8.24 8.35 8.41 8.19 8.29 8.10 8.04 8.19 8.37 7 6-month 11.28 13.73 11.20 8.26 8.35 8.41 8.15 8.28 8.07 7.99 8.16 8.35 Bankers acceptances4'5 8 3-month 12.72 15.32 11.89 8.36 8.54 8.49 8.36 8.29 8.17 8.18 8.41 8.60 9 6-month 12.25 14.66 11.83 8.41 8.52 8.43 8.33 8.27 8.09 8.10 8.37 8.64 Certificates of deposit, secondary market6 10 1-month 12.91 15.91 12.04 8.40 8.62 8.60 8.44 8.39 8.32 8.29 8.48 8.62 11 3-month 13.07 15.91 12.27 8.54 8.69 8.63 8.49 8.40 8.32 8.30 8.52 8.75 12 6-month 12.99 15.77 12.57 8.77 8.80 8.76 8.62 8.56 8.35 8.38 8.66 8.99 13 Eurodollar deposits, 3-month2 14.00 16.79 13.12 9.14 9.25 9.23 8.96 9.09 8.88 8.71 8.89 9.14 U.S. Treasury bills4 Secondary market7 14 3-month 11.43 14.03 10.61 8.11 8.35 8.21 8.19 8.11 8.03 8.03 8.14 8.48 15 6-month 11.37 13.80 11.07 8.23 8.37 8.30 8.22 8.16 8.02 8.05 8.21 8.50 16 1-year 10.89 13.14 11.07 8.28 8.36 8.29 8.23 8.16 8.00 8.04 8.24 8.51 Auction average8 17 3-month 11.506 14.029' 10.686 8.130 8.304 8.252 8.19 8.15 8.04 8.14 8.10 8.46 18 6-month 11.374 13.776' 11.084 8.233 8.325 8.343 8.20 8.22 8.05 8.13 8.14 8.47 1199 1100..774488 1133..115599 1111..009999 88..330088 88..442277 88..227755 88..0055 88..0055 CAPITAL MARKET RATES U.S. Treasury notes and bonds9 Constant maturities10 20 1-vear 12.05 14.78 12.27 8.92 9.04 8.98 8.90 8.83 8.64 8.70 8.93 9.23 •>1 9.00 9.35 22 2-year 11.77 14.56 12.80 9.64 9.66 9.57 9.49 9.44 9.23 9.27 9.54 9.81 73 9.35 9.65 24 3-year 11.55 14.44 12.92 9.91 9.84 9.76 9.66 9.68 9.43 9.45 9.69 9.95 25 5-year 11.48 14.24 13.01 10.26 10.08 10.02 10.03 9.95 9.77 9.84 10.10 10.32 26 7-year 11.43 14.06 13.06 10.56 10.31 10.29 10.30 10.20 10.07 10.12 10.38 10.55 27 10-year 11.46 13.91 13.00 10.72 10.51 10.40 10.38 10.33 10.19 10.21 10.45 10.59 28 20-year 11.39 13.72 12.92 11.03 10.80 10.63 10.67 10.57 10.45 10.48 10.78 10.90 29 30-year 11.30 13.44 12.76 10.88 10.63 10.48 10.53 10.43 10.32 10.35 10.62 10.73 Composite13 30 Over 10 years (long-term) 10.81 12.87 12.23 10.60 10.34 10.19 10.21 10.13 10.00 10.03 10.29 10.43 State and local notes and bonds Moody's series14 31 Aaa 7.85 10.43 10.88 8.80 8.42 8.28 8.39 8.20 8.10 8.20 8.50 8.75 32 Baa 9.01 11.76 12.48 10.59 10.05 9.75 9.74 9.40 9.40 9.60 9.85 10.10 33 Bond Buyer series15 8.59 11.33 11.66 9.58 9.20 9.05 9.11 8.82 8.78 8.86 9.29 9.51 Corporate bonds Seasoned issues16 34 All industries 12.75 15.06 14.94 13.02 12.71 12.44 12.30 12.35 12.19 12.13 12.33 12.49 35 Aaa 11.94 14.17 13.79 12.01 11.73 11.51 11.46 11.43 11.29 11.29 11.54 11.67 36 Aa 12.50 14.75 14.41 12.58 12.32 12.06 11.95 12.01 11.81 11.80 11.98 12.16 37 A 12.89 15.29 15.43 13.52 13.15 12.86 12.68 12.80 12.65 12.53 12.70 12.82 38 Baa 13.67 16.04 16.11 13.95 13.61 13.29 13.09 13.16 12.99 12.92 13.09 13.28 Aaa utility bonds17 39 New issue 12.74 15.56 14.41 12.08 11.70 11.41 11.32 11.32 10.92 10.99 11.56 11.81 40 Recently offered issues 12.70 15.56 14.45 12.09 11.74 11.50 11.37 11.34 11.03 11.18 11.49 11.62 MEMO: Dividend/price ratio18 41 Preferred stocks 10.60 12.36 12.53 11.13 10.86 10.80 10.65 10.73 10.59 10.62 10.62 10.78 42 Common stocks 5.26 5.20 5.81 4.74 4.59 4.44 4.27 4.33 4.30 4.26 4.30 4.23 1. Weekly and monthly figures are averages of all calendar days, where the 11. Each biweekly figure is the average of five business days ending on the rate for a weekend or holiday is taken to be the rate prevailing on the preceding Monday following the date indicated. Beginning April 1,1983, this rate determines business day. The daily rate is the average of the rates on a given day weighted by the maximum interest payable in the following two-week period on l-'/2 year small the volume of transactions at these rates. saver certificates. (See table 1.16.) 2. Weekly figures are statement week averages—that is, averages for the 12. Each biweekly figure is the average of five business days ending on the week ending Wednesday. Monday following the date indicated. Until March 31, 1983, the biweekly rate 3. Unweighted average of offering rates quoted by at least five dealers (in the determined the maximum interest rate payable in the following two-week period case of commercial paper), or finance companies (in the case of finance paper). on 2-xh year small saver certificates. (See table 1.16.) Before November 1979, maturities for data shown are 30-59 days, 90—119 days, 13. Unweighted averages of yields (to maturity or call) for all outstanding notes and 120-179 days for commercial paper; and 30-59 days, 90—119 days, and 150- and bonds neither due nor callable in less than 10 years, including several very low 179 days for finance paper. yielding "flower" bonds. 4. Yields are quoted on a bank-discount basis, rather than an investment yield 14. General obligations only, based on figures for Thursday, from Moody's basis (which would give a higher figure). Investors Service. 5. Dealer closing offered rates for top-rated banks. Most representative rate 15. General obligations only, with 20 years to maturity, issued by 20 state and (which may be, but need not be, the average of the rates quoted by the dealers). local governmental units of mixed quality. Based on figures for Thursday. 6. Unweighted average of offered rates quoted by at least five dealers early in 16. Daily figures from Moody's Investors Service. Based on yields to maturity the day. on selected long-term bonds. 7. Unweighted average of closing bid rates quoted by at least five dealers. 17. Compilation of the Federal Reserve. Issues included are long-term (20 8. Rates are recorded in the week in which bills are issued. Beginning with the years or more). New-issue yields are based on quotations on date of offering; Treasury bill auction held on Apr. 18, 1983, bidders were required to state the those on recently offered issues (included only for first 4 weeks after termination percentage yield (on a bank discount basis) that they would accept to two decimal of underwriter price restrictions), on Friday close-of-business quotations. places. Thus, average issuing rates in bill auctions will be reported using two 18. Standard and Poor's corporate series. Preferred stock ratio based on a rather than three decimal places. sample often 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, Digitized for FacRtivAelSy EtrRad ed securities. 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 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 70.21 76.10 79.75 80.30 83.25 84.74 87.50 90.61 94.61 2 Industrial 78.64 85.44 78.18 80.08 86.67 90.76 92.00 95.37 97.26 100.61 104.46 109.43 3 Transportation 60.52 72.61 60.41 61.39 66.64 71.92 73.40 75.65 79.44 83.28 85.26 89.07 4 Utility 37.35 38.90 39.75 40.36 42.67 43.46 42.93 45.59 45.92 45.89 46.22 47.62 5 Finance 64.28 73.52 71.99 69.66 80.59 88.66 86.22 85.66 86.57 93.22 99.07 102.45 6 Standard & Poor's Corporation (1941-43 = 10)1 ... 118.71 128.05 119.71 122.43 132.66 138.10 139.37 145.13 146.80 151.88 157.71 164.10 7 American Stock Exchange (Aug. 31, 1973 = 100) 300.94 343.58 282.62 286.22 308.74 333.54 333.36 360.92 373.84 383.76 405.02 447.94 Volume of trading (thousands of shares) 8 New York Stock Exchange 44,867 46,967 64,617 73,710 98,508 88,431 76,463 88,463 85,026 82,694 89,627 93,016 9 American Stock Exchange 6,377 5,346 5,283 5,064 7,828 8,672 7,475 9,220 8,256 7,354 8,576 12,260 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers-dealers2 14,721 14,411 13,325 11,208 11,728 12,459 13,325 13,370 13,985 14,483 15,590 11 Margin stock3 14,500 14,150 12,980 10,950 11,450 12,170 12,980 13,070 13,680 14,170 15,260 12 Convertible bonds 219 259 344 257 277 288 344 299 304 312 329 13 Subscription issues 2 2 1 1 1 1 1 1 1 1 1 n a. Free credit balances at brokers4 14 Margin-account 2,105 3,515 5,735 4,990 5,520 5,600 5,735 6,257 6,195 6,370 6,090 15 Cash-account 6,070 7,150 8,390 7,475 8,120 8,395 8,390 8,225 7,955 7,965' 7,970 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 14.0 37.0 21.0 27.0 21.0 20.0 21.0 18.0 18.0 17.0 14.0 18 40-49 30.0 24.0 24.0 26.0 24.0 21.0 24.0 23.0 20.0 21.0 19.0 19 50-59 25.0 17.0 24.0 20.0 22.0 25.0 24.0 25.0 27.0 25.0 28.0 n.a. 2 2 1 0 7 6 0 0 - - 7 6 9 9 1 9 4 . . 0 0 1 6 0 . . 0 0 1 9 4 . . 0 0 1 8 2 . . 0 0 1 9 6 . . 0 0 1 1 5 0 . . 0 0 1 9 4 . . 0 0 1 9 6 . . 0 0 1 1 0 6 . . 0 0 1 1 8 0 . . 0 0 1 1 9 0 . . 0 0 1I 22 80 or more 8.0 6.0 8.0 7.0 8.0 9.0 8.0 9.0 9.0 9.0 9.0 1 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 21,690 25,870 35,598 31,644 33,689 34,909 35,598 43,838 43,006 43,472 44,999 Distribution by equity status (percent) 24 Net credit status 47.8 58.0 62.0 61.0 61.0 62.0 62.0 65.0 66.0 6622..00 64.0 n.a. Debt status, equity of 1 2 2 6 5 6 L 0 e s p s e t r h c a e n n t 6 o 0 r p m er o c r e e n t 4 7 4 . . 7 4 3 1 1 1 . . 0 0 2 9 9 . . 0 0 2 1 7 2 . . 0 0 2 1 9 0 . . 0 0 2 9 9 . . 0 0 2 9 9 . . 0 0 2 8 8 . . 0 0 2 7 7 . . 0 0 2 9 8 . . 0 0 3 6 0 . . 0 0 \ Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks 70 80 65 55 65 50 28 Convertible bonds 50 60 50 50 50 50 29 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance 5. Each customer's equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of 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. 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A30 Domestic Nonfinancial Statistics • June 1983 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1982 1983 AAccccoouunntt 11998800 11998811 July Aug. Sept. Oct. Nov. Dec/ Jan/ Feb/ Mar. Apr.P Savings and loan associations 1 Assets 630,712 664,167 697,690 703,399 691,077 692,549 697,189 706,045 714,676 772,352 723,616 728,680 2 Mortgages 503,192 518,547 510,678 509,776 493,899 489,923 488,614 482,234 481,470 481,090 475,6 88 476,526 Cash and investment securities' 57,928 63,123 72,854 74,141 74,692 75,638 78,122 84,767 90,662 94,080 96,649 99 089 4 Other 69,592 82,497 114,158 119,482 122,486 126,988 130,453 139,044 142,544 147,182 151,279 153,065 5 Liabilities and net worth 630,712 664,167 697,690 703,399 691,077 692,549 697,189 706,045 714,676 772,352 723,616 728,680 6 Savings capital 511,636 525,061 539,830 542,648 547,628 547,112 548,439 566,189 582,918 591,913 597,112 601,325 7 Borrowed money 64,586 88,782 98,433 98,803 99,771 100,881 102,948 97,979 88,925 86,544 84,8 84 83,559 8 FHLBB 47,045 62,794 67,019 66,374 65,567 65,015 64,202 63,861 60,415 58,841 56,859 55,874 9 Other 17,541 25,988 31,414 32,429 34,204 35,866 38,746 34,118 28,510 27,703 28,025 27,685 10 Loans in process 8,767 6,385 7,250 7,491 8,084 8,484 8,967 9,934 10,453 11,039 12,245 13,493 11 Other 12,394 15,544 27,375 29,965 19,202 20,018 21,048 15,720 16,658 17,524 14,767 16,373 12 Net worth2 33,329 28,395 24,802 24,492 24,476 24,538 24,754 26,157 26,175 26,371 26,853 27,429 N MEMO: Mortgage loan commitments outstanding3 16,102 15,225 15,924 16,943 17,256 18,407 19,682 18,054 19,453 22,051 24,885 24,895 Mutual savings banks4 14 Assets 171,564 175,728 175,683 172,901 173,487 172,908 172,287 174,197 174,726 176,378 178,814 Loans 15 Mortgage 99,865 99,997 96,282 94,498 94,382 94,261 94,017 94,091 93,944 93,607 93,822 16 Other 1111,,773333 1144,,775533 17,128 16,929 17,458 17,035 16,702 16,957 17,420 18,211 17,837 Securities 17 U.S. government5 8,949 9,810 10,058 9,675 9,404 9,219 9,456 9,743 10,248 11,081 12,187 18 State and local government 2,390 2,288 2,236 2,201 2,191 2,505 2,496 2,470 2,446 2,440 2,403 19 Corporate and other6 39,282 37,791 36,651 35,937 35,845 35,599 35,753 36,161 36,430 36,905 37,827 70 Cash 4,334 5,442 6,225 6,460 6,695 6,749 6,291 6,919 6,275 6,104 6,548 21 Other assets 5,011 5,649 7,104 7,192 7,514 7,540 7,572 7,855 7,963 8,031 8,189 n.a. 22 Liabilities 171,564 175,728 175,683 172,901 173,487 172,908 172,287 174,197 174,726 176,378 178,814 n Deposits 154,805 155,110 154,314 152,014 153,089 152,210 151,304 155,196 157,113 159,162 161,489 ?4 Regular7 151,416 153,003 151,969 149,736 150,795 149,928 149,167 152,777 154,876 156,915 159 088 75 Ordinary savings 53,971 49,425 47,580 46,901 47,496 48,520 49,208 46,862 41,850 41,165 41,183 76 Time 97,445 103,578 116,998 116,213 103,299 101,408 99,959 110,462 103,658 100,851 99,687 27 Other 2,086 2,108 2,345 2,278 2,294 2,283 2,137 2,419 2,237 2,247 2,401 28 Other liabilities 6,695 10,632 11,926 11,671 11,166 11,556 11,893 8,336 7,722 7,542 7,395 29 General reserve accounts 11,368 9,986 9,443 9,216 9,232 9,141 9,089 9,235 9,196 9,197 9,342 30 MEMO: Mortgage loan commitments outstanding® 1,476 1,293 992 1,056 1,217 1,281 1,400 1,285 1,253 1,295 1,639 Life insurance companies 31 Assets 479,210 525,803 551,124 557,094 563,321 571,902 578,200 584,311 589,490 595,959 Securities 3? Government 21,378 25,209 28,694 30,263 30,759 31,791 32,682 34,558 35,567 36,946 33 United States9 5,345 8,167 10,774 12,214 12,606 13,538 14,370 16,072 16,731 17,877 34 State and local 6,701 7,151 7,705 7,799 7,834 7,871 7,935 8,094 8,225 8,333 35 Foreign10 9,332 9,891 10,215 10,250 10,319 10,382 10,377 10,392 10,611 10,736 n a. n.a. 36 Business 238,113 255,769 267,627 270,029 273,539 279,918 283,650 283,799 290,178 293,427 37 Bonds 190,747 208,098 221,503 221,642 223,783 226,879 229,101 228,220 233,380 235,376 38 Stocks 47,366 47,670 46,124 48,387 49,756 53,039 54,549 55,579 56,798 58,051 39 Mortgages 131,030 137,747 140,044 140,244 140,404 140,678 140,956 141,919 142,277 142,683 40 Real estate 15,063 18,278 20,198 20,176 20,268 20,293 20,480 21,019 20,922 21,014 41 Policy loans 41,411 48,706 51,867 52,238 . 52,525 52,751 52,916 53,114 53,239 53,383 42 Other assets 31,702 40,094 42,694 44,144 45,826 46,471 47,516 49,902 47,307 48,506 Credit unions" 43 Total assets/liabilities and capital 71,709 77,682 84,423 85,102 86,554 88,144 89,261 69,673 69,741 71,293 73,737 44 Federal 39,801 42,382 45,931 46,310 47,076 47,649 48,272 45,483 45,418 46,449 48,057 45 State 31,908 35,300 38,492 38,792 39,478 40,495 40,989 24,190 23,323 24,844 25,680 46 Loans outstanding 47,774 50,448 50,133 50,733 51,047 50,934 50,936 43,577 43,293 43,135 43,433 n .a. 47 Federal 25,627 27,458 27,351 27,659 27,862 27,789 27,824 28,184 27,966 27,832 27,974 48 State 22,147 22,990 22,782 23,074 23,185 23,145 23,139 15,393 15,328 15,303 15,459 49 Savings 64,399 68,871 75,088 75,331 76,874 78,529 79,799 63,071 63,321 64,684 67,266 50 Federal (shares) 36,348 37,574 40,969 41,178 41,961 42,852 43,413 41,341 41,441 42,404 43,890 51 State (shares and deposits) 28,051 31,297 34,119 34,153 34,913 35,677 36,386 21,730 21,880 22,280 23,376 For notes see bottom of opposite page. 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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 1983 11998800 11998811 11998822 H2 HI H2 Feb. Mar. Apr. U.S. budget 1 Receipts1 517,112 599,272 617,766 301,777 322,478 286,338 38,816 43,504 66,234 2 Outlays12 576,675 657,204 728,375 358,558 348,678 390,846 64,152 69,540 69,542 3 Surplus, or deficit (-) -59,563 -57,932 -110,609 -56,780 -26,200 -104,508 -25,336 -26,036 -3,308 4 Trust funds 8,801 6,817 5,456 -8,085 -17,690 -6,576 -4,830 2,085 403 5 Federal funds -68,364 -64,749 -116,065 -48,697 -43,889 -97,934 -20,506 -28,120 -3,711 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt ((--)))) 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -14,549 -20,769 -14,142 -8,728 -7,942 -4,923 -52 -1,244 -1,290 77 OOtthheerr 303 -236 -3,190 -1,752 227 -2,267 47 -16 151 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 -25,341 -27,296 -4,447 Source or financing 9 Borrowing from the public 70,515 79,329 134,993 54,081 41,728 119,609 17,919 31,303 2,681 10 Cash and monetary assets (decrease, or increase (-))5 -355 -1,878 -11,911 -1,111 -408 -9,057 7,496 -6,767 -8,156 11 Other6 3,648 1,485 4,858 14,290 -7,405 1,146 -74 2,761 9,922 MEMO: 12 Treasury operating balance (level, end of period) 20,990 18,670 29,164 12,046 10,999 19,773 10,006 15,452 24,053 13 Federal Reserve Banks 4,102 3,520 10,975 4,301 4,099 5,033 2,856 3,572 6,015 14 Tax and loan accounts 16,888 15,150 18,189 7,745 6,900 14,740 7,150 11,880 18,038 1. Effective Feb. 8, 1982, supplemental medical insurance premiums and 5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold voluntary hospital insurance premiums, previously included in other insurance tranche drawing rights; loans to International Monetary Fund; and other cash and receipts, have been reclassified as offsetting receipts in the health function. monetary assets. 2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was 6. Includes accrued interest payable to the public; allocations of special reclassified from an off-budget agency to an on-budget agency in the Department drawing rights; deposit funds; miscellaneous liability (including checks outstandof Labor. ing) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S. 3. Half-year figures are calculated as a residual (total surplus/deficit less trust currency valuation adjustment; net gain/loss for IMF valuation adjustment; and fund surplus/deficit). profit on the sale of gold. 4. Other off-budget includes Postal Service Fund; Rural Electrification and Telephone Revolving Fund; and Rural Telephone Bank; it also includes petroleum SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. acquisition and transportation and strategic petroleum reserve effective Novem- Government." Treasury Bulletin, and the Budget of the United States Governber 1981. ment, Fiscal Year 1984. 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." 11. As of December 1982, National Credit Union Administration data no longer 2. Includes net undistributed income, which is accrued by most, but not all, includes either federally chartered or state chartered corporate credit unions. associations. 3. Excludes figures for loans in process, which are shown as a liability. NOTE. Savings and loan associations: Estimates by the FHLBB for all 4. The NAMSB reports that, effective April 1979, balance sheet data are not associations in the United States. Data are based on monthly reports of federally strictly comparable with previous months. Beginning April 1979, data are reported insured associations and annual reports of other associations. Even when revised, on a net-of-valuation-reserves basis. Before that date, data were reported on a data for current and preceding year are subject to further revision. gross-of-valuation-reserves basis. Mutual savings banks: Estimates of National Association of Mutual Savings 5. Beginning April 1979, includes obligations of U.S. government agencies. Banks for all savings banks in the United States. Before that date, this item was included in "Corporate and other." Life insurance companies: Estimates of the American Council of Life Insurance 6. Includes securities of foreign governments and international organizations for all life insurance companies in the United States. Annual figures are annualand, before April 1979, nonguaranteed issues of U.S. government agencies. statement asset values, with bonds carried on an amortized basis and stocks at 7. Excludes checking, club, and school accounts. year-end market value. Adjustments for interest due and accrued and for 8. Commitments outstanding (including loans in process) of banks in New York differences between market and book values are not made on each item separately State as reported to the Savings Banks Association of the state of New York. but are included, in total, in "other assets." 9. Direct and guaranteed obligations. Excludes federal agency issues not Credit unions: Estimates by the National Credit Union Administration for a guaranteed, which are shown in the table under "Business" securities. group of federal and state-chartered credit unions that account for about 30 percent of credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • June 1983 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1981 1982 1983 111999888000 111999888111 111999888222 H2 HI H2 Feb. Mar. Apr. RECEIPTS 1 All sources' 517,112 599,272 617,766 301,777 322,478 286,338 38,816 43,504 66,234 2 Individual income taxes, net 244,069 285,917 297,744 147,035 150,565 145,676 20,544 15,658 35,040 3 Withheld 223,763 256,332 267,513 134,199 133,575 131,567 22,288 24,808 21,636 4 Presidential Election Campaign Fund ... 39 41 39 5 34 5 4 9 8 5 Nonwithheld 63,746 76,844 84,691 17,391 66,174 20,040 1,970 3,604 31,961 6 Refunds 43,479 47,299 54,498 4,559 49,217 5,938 3,717 12,764 18,564 Corporation income taxes 7 Gross receipts 72,380 73,733 65,991 31,056 37,836 25,661 2,115 6,985 8,445 8 Refunds 7,780 12,596 16,784 6,847 8,028 11,467 2,388 2,612 3,650 9 Social insurance taxes and contributions, net 157,803 182,720 201,498 91,592 108,079 94,278 13,797 1177,,993399 21,481 10 Payroll employment taxes and contributions2 133,025 156,932 172,744 82,984 88,795 85,063 11,845 16,975 14,567 11 Self-employment taxes and contributions3 5,723 6,041 7,941 244 7,357 177 43 418 4,232 12 Unemployment insurance 15,336 15,763 16,600 6,355 9,809 6,857 1,553 160 2,324 13 Other net receipts14 3,719 3,984 4,212 2,009 2,119 2,181 356 387 358 14 Excise taxes 24,329 40,839 36,311 22,097 17,525 16,556 2,795 2,755 2,557 15 Customs deposits 7,174 8,083 8,854 4,661 4,310 4,299 503 733 762 16 Estate and gift taxes 6,389 6,787 7,991 3,742 4,208 3,445 349 500 458 17 Miscellaneous receipts5 12,748 13,790 16,161 8,441 7,984 7,891 1,101 1,545 1,141 OUTLAYS 18 All types1'6 576,675 657,204 728,424 358,532 348,683 390,847 64,152 69,540 69,542 19 National defense 135,856 159,765 187,418 87,421 93,154 100,419 16,567 19,038 17,524 20 International affairs 10,733 11,130 9,982 4,646 5,183 4,406 108 1,601 937 21 General science, space, and technology ... 5,722 6,359 7,070 3,388 3,370 3,903 610 526 607 22 Energy 6,313 10,277 4,674 4,394 2,946 2,059 330 488 212 23 Natural resources and environment 13,812 13,525 12,934 7,296 5,636 6,940 998 913 1,036 24 Agriculture 4,762 5,572 14,875 5,181 7,087 13,260 2,170 1,003 2,717 25 Commerce and housing credit 7,788 3,946 3,865 1,825 1,408 2,244 -559 395 434 26 Transportation 21,120 23,381 20,560 10,753 9,915 10,686 1,557 1,776 1,581 27 Community and regional development .... 10,068 9,394 7,165 4,269 3,055 4,186 405 562 427 28 Education, training, employment, social services 30,767 31,402 26,300 13,874 12,607 12,187 2,159 2,114 1,985 79 Health1 55,220 65,982 74,017 35,322 37,219 39,073 6.575 6,913 7,120 30 Income security6 193,100 225,101 248,343 129,269 112,782 133,779 22,812 24,840 24,654 31 Veterans benefits and services 21,183 22,988 23,955 12,880 10,865 13,241 2,063 2,292 3,357 32 Administration of justice 4,570 4,696 4,671 2,290 2,334 2,373 412 473 432 33 General government 4,505 4,614 4,726 2,320 2,400 2,322 345 427 163 34 General-purpose fiscal assistance 8,584 6,856 6,393 3,043 3,325 3,152 89 40 1,162 35 Net Interest' 52,458 68,726 84,697 39,952 41,883 44,948 8,416 6,854 6,343 36 Undistributed offsetting receipts8 -9,887 -16,509 -13,270 -9,564 -6,490 -8,333 -905 -715 -1,148 1. Effective Feb. 8, 1982, supplemental medical insurance premiums and 6. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was voluntary hospital insurance premiums, previously included in other insurance reclassified from an off-budget agency to an on-budget agency in the Department receipts, have been reclassified as offsetting receipts in the health function. of Labor. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. 7. Net interest function includes interest received by trust funds. 3. Old-age, disability, and hospital insurance. 8. Consists of rents and royalties on the outer continental shelf and U.S. 4. Federal employee retirement contributions and civil service retirement and government contributions for employee retirement. disability fund. 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. receipts. 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 1981 1982 1983 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 970.9 977.4 1,003.9 1,034.7 1,066.4 1,084.7 1,147.0 1,201.9 1,249.3 2 Public debt securities 964.5 971.2 997.9 1,028.7 1,061.3 1,079.6 1,142.0 1,197.1 1,244.5 3 Held by public 773.7 771.3 789.8 825.5 858.9 867.9 925.6 987.7 1,043.3 4 Held by agencies 190.9 199.9 208.1 203.2 202.4 211.7 216.4 209.4 201.2 5 Agency securities 6.4 6.2 6.1 6.0 5.1 5.0 5.0 4.8 4.8 6 Held by public 4.9 4.7 4.6 4.6 3.9 3.9 3.7 3.7 3.7 7 Held by agencies 1.5 1.5 1.5 1.4 1.2 1.1 1.3 1.1 1.1 8 Debt subject to statutory limit 965.5 972.2 998.8 1,029.7 1,062.2 1,080.5 1,142.9 1,197.9 1,245.3 9 Public debt securities 963.9 970.6 997.2 1,028.1 1,060.7 1,079.0 1,141.4 1,196.5 1,243.9 10 Other debt1 1.6 1.6 1.6 1.6 1.5 1.5 1.5 1.4 1.4 11 MEMO: Statutory debt limit 985.0 985.0 999.8 1,079.8 1,079.8 1,143.1 1,143.1 1,290.2 1,290.2 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 1983 TTyyppee aanndd hhoollddeerr 11997799 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May 1 Total gross public debt 845.1 930.2 1,028.7 1,197.1 1,201.0 1,215.3 1,244.5 1,247.9 1,291.4 By type 2 Interest-bearing debt 844.0 928.9 1,027.3 1,195.5 1,199.6 1,213.7 1,243.0 1,242.1 1,289.9 3 Marketable 530.7 623.2 720.3 881.5 8£8 .7 907.7 937.8 935.5 957.4 4 Bills 172.6 216.1 245.0 311.8 308.1 314.9 331.9 325.9 325.2 5 Notes 283.4 321.6 375.3 465.0 473.0 481.3 494.1 494.9 513.6 6 Bonds 74.7 85.4 99.9 104.6 107.6 111.5 111.4 14.6 118.5 7 Nonmarketable1 313.2 305.7 307.0 314.0 310.9 306.1 305.2 306.6 332.6 8 2.2 9 State and local government series 24.6 23.8 23.0 25.7 25.6 25.7 27.1 28.0 29.6 10 Foreign issues3 28.8 24.0 19.0 14.7 14.0 12.7 12.4 12.0 1.1 11 Government 23.6 17.6 14.9 13.0 12.7 11.4 11.1 10.7 10.5 12 Public 5.3 6.4 4.1 1.7 1.3 1.3 1.3 1.3 0.6 13 Savings bonds and notes 79.9 72.5 68.1 68.0 8.1 68.3 68.5 68.8 69.2 14 Government account series4 177.5 185.1 196.7 205.4 203.0 199.1 197.0 197.6 222.4 15 Non-interest-bearing debt 1.2 1.3 1.4 1.6 1.4 1.6 1.5 5.9 1.5 By holder5 16 U.S. government agencies and trust funds 187.1 192.5 203.3 209.4 207.0 203.3 201.2 17 Federal Reserve Banks 117.5 121.3 131.0 139.3 132.4 135.6 136.7 18 Private investors 540.5 616.4 694.5 848.4' 906.6 19 Commercial banks 96.4 116.0 109.4 131.4 153.2 20 Mutual savings banks 4.7 5.4 5.2 n.a. n.a. 21 Insurance companies 16.7 20.1 19.1 38.7' 40.0 22 Other companies 22.9 25.7 37.8 n.a. n.a. n.a. n.a. 23 State and local governments 69.9 78.8 85.6 113.4' n a. l.a. n.a. Individuals 24 Savings bonds 79.9 72.5 68.0 68.3 68.3 25 Other securities 36.2 56.7 75.6 48.2' 48.4 26 Foreign and international6 124.4 127.7 141.4 149.4' 156.3 27 Other miscellaneous investors7 90.1 106.9 152.3 233.2' n.a. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • June 1983 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1983 1983, week ending Wednesday IItteemm 11998800 11998811 11998822 Feb/ Mar/ Apr. Apr. 2(K Apr. 27' May 4 May 11 May 18 May 25 Immediate delivery1 1 U.S. government securities 18,331 24,728 32,271 40,570 37,900 38,468 39,723 39,170 42,728 48,263 40,399 35,028 By maturity 2 Bills 11,413 14,768 18,398 20,327 20,195 22,142 22,299 20,760 20,844 24,792 21,643 19,098 3 Other within 1 year 421 621 810 706 519 611 673 580 651 545 659 493 4 1-5 years 3,330 4,360 6,272 9,245 7,884 7,385 7,022 10,217 10,604 8,108 8,190 7,576 5 5-10 years 1,464 2,451 3,557 5,251 5,196 4,136 4,869 3,774 5,139 5,771 4,627 3,434 6 Over 10 years 1,704 2,528 3,234 5,042 4,106 4,194 4,860 3,839 5,490 9,047 5,281 4,428 By type of customer 7 U.S. government securities dealers 1,484 1,640 1,769 1,904 1,757 2,418 1,842 2,122 2,786 2,748 2,163 1,852 8 U.S. government securities brokers 7,610 11,750 15,659 20,005 18,414 18,535 19,924 19,151 21,220 24,969 20,171 17,678 9 All others2 9,237 11,337 15,344 18,662 17,728 17,515 17,957 17,897 18,722 20,546 18,065 15,499 10 Federal agency securities 3,258 3,306 4,142 4,982 4,575 5,584 5,800 6,202 5,749 5,689 5,969 5,641 11 Certificates of deposit 2,472 4,477 5,001 4,402 3,702 4,541 4,329 4,798 4,493 3,895 3,672 3,326 12 Bankers acceptances i 1,807 2,502 2,593 2,255 3,063 3,313 3,063 3,097 2,917 2,381 1,897 13 Commercial paper t 6,128 77,,559955 7,806 7,604 8,603 8,736 8,603 8,551 7,772 8,269 7,882 Futures transactions3 14 Treasury bills I 3,523 5,031 6,303 6,040 6,057 6,192 6,144 5,895 6,092 7,116 6,217 15 Treasury coupons n.a. 1,330 1,490 2,055 2,138 1,779 2,085 1,890 2,068 2,314 2,523 2,342 16 Federal agency securities 1 234 259 236 262 194 193 241 198 288 194 361 Forward transactions4 | 17 U.S. government securities 365 835 1,707 1,628 1,322 1,212 1,189 2,222 2,361 1,328 743 18 Federal agency securities T 1,370 982 1,175 1,439 1,493 1,770 1,131 1,431 2,037 1,726 1,166 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. 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing Averages of daily figures, in millions of dollars 1983 1983, week ending Wednesday IItteemm 11998800 11998811 11998822 Feb/ Mar/ Apr. Apr. 13 Apr. 20 Apr. 27 May 4 May 11 Positions Net immediate1 1 U.S. government securities 4,306 9,033 9,328 14,192 11,399 9,014 6,924 10,271 10,698 11,748 11,813 2 Bills 4,103 6,485 4,837 10,534 9,544 7,775 6,650 9,412 8,119 8,345 6,886 3 Other within 1 year -1,062 -1,526 -199 -428 3 -371 -491 -404 -298 -118 97 4 1-5 years 434 1,488 2,932 2,719 1,263 733 -53 -131 2,336 2,537 2,560 5 5-10 years 166 292 -341 -203 -748 -57 -270 304 -53 158 209 6 Over 10 years 665 2,294 2,001 1,570 1,337 934 1,087 1,089 593 827 2,062 7 Federal agency securities.. 797 2,277 3,712 4,455 4,855 5,278 5,022 5,659 5,221 5,647 5,581 8 Certificates of deposit 3,115 3,435 5,531 5,683 6,104 5,474 5,307 5,492 5,401 5,761 5,103 9 Bankers acceptances 1,746 2,832 2,901 2,809 3,051 2,740 3,177 3,275 4,254 3,834 10 Commercial paper 2,658 3,317 2,892 3,173 3,228 3,345 3,204 2,943 3,950 3,575 Futures positions 11 Treasury bills -8,934 -2,508 -3,217 -530 -7,151 -6,649 -8,613 -7,851 -9,644 -10,259 12 Treasury coupons n.a. -2,733 -2,361 -1,206 -1,907 -1,966 -2,136 -2,025 -1,593 -2,059 -2,214 13 Federal agency securities.. 522 -224 -137 -64 112 79 227 177 79 51 Forward positions 14 U.S. government securities -603 -788 -1,061, -1,782 -887 -1,002 -1,312 -664 -563 -863 15 Federal agency securities.. -451 -1,190 -1,962! -1,906 -1,570 -1,747 -1,853 -1,200 -1,091 -1,573 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 14,568 26,754 24,136 19,668 22,351 22,216 19,978 24,087 20,823 17 Term agreements 32,048 48,247 49,425 49,637 49,414 50,187 51,123 47,891 46,993 Repurchase agreements4 18 Overnight and continuing 35,919 49,695 56,033 51,228 51,702 52,272 51,826 53,252 53,429 19 Term agreements 29,449 43,410 42,891 43,450 41,890 41,769 43,816 41,922 40,313 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A35 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1982 1983 AAggeennccyy 11997799 11998800 11998811 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies1 163,290 193,229 227,210 245,951 244,599 243,535 247,119 247,887 244,243' 240,475 2 Federal agencies 24,715 28,606 31,806 32,606 32,713 32,772 33,055 33,018 33,045 33,083 3 Defense Department2 738 610 484 388 377 364 354 346 336 335 4 Export-Import Bank3 4 9,191 11,250 13,339 14,042 14,000 13,999 14,218 14,267 14,255 14,304 5 Federal Housing Administration5 537 477 413 335 323 311 288 282 281 271 6 Government National Mortgage Association participation certificates6 2,979 2,817 2,715 2,165 2,165 2,165 2,165 2,165 2,165 2,165 7 Postal Service7 1,837 1,770 1,538 1,471 1,471 1,471 1,471 1,471 1,471 1,471 8 Tennessee Valley Authority 8,997 11,190 13,115 14,010 14,185 14,270 14,365 14,365 14,415 14,415 9 United States Railway Association7 436 492 202 195 192 192 194 122 122 122 10 Federally sponsored agencies' 138,575 164,623 195,404 213,345 212,886 210,763 214,064 214,869 211,198' 207,392 11 Federal Home Loan Banks 33,330 41,258 58,090 61,251 60,904 60,356 61,447 59,969 57,515' 54,880 12 Federal Home Loan Mortgage Corporation 2,771 2,536 2,604 3,000 3,000 3,000 3,000 3,000 3,202 2,002 13 Federal National Mortgage Association 48,486 55,185 58,749 68,130 67,916 66,852 70,052 72,247 72,221 71,366 14 Federal Land Banks 16,006 12,365 9,717 7,652 6,813 6,813 6,813 5,802 5,802 5,802 15 Federal Intermediate Credit Banks 2,676 1,821 1,388 926 926 926 926 926 926 926 16 Banks for Cooperatives 584 584 220 220 220 220 220 220 220 220 17 Farm Credit Banks' 33,216 48,153 60,034 65,553 66,449 65,877 65,014 66,360 65,796 65,653 18 Student Loan Marketing Association 1,505 2,720 4,600 6,611 6,657 6,718 6,591 6,404 6,257 6,542 19 Other 1 1 2 2 1 1 1 1 1 1 MEMO: 20 Federal Financing Bank debt1'8 67,383 87,460 110,698 124,357 125,064 125,707 126,424 126,587 126,623 127,717 Lending to federal and federally sponsored agencies 21 Export-Import Bank4 8,353 10,654 12,741 13,954 13,954 13,954 14,177 14,177 14,177 14,232 22 Postal Service7 1,587 1,520 1,288 1,221 1,221 1,221 1,221 1,221 1,221 1,221 23 Tennessee Valley Authority 7,272 9,465 11,390 12,285 12,460 12,545 12,640 12,640 12,690 12,675 24 United States Railway Association7 436 492 202 195 192 192 194 122 122 122 Other Lending9 25 Farmers Home Administration 32,050 39,431 48,821 53,736 53,661 53,661 53,261 53,056 52,431 52,686 26 Rural Electrification Administration 6,484 9,196 13,516 16,282 16,600 16,750 17,157 17,330 17,502 17,816 27 Other 9,696 13,982 18,140 21,684 26,976 27,384 27,774 28,041 28,480 28,965 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 1.43 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 Nonfinancial Statistics • June 1983 1.45 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1982r 1983 Type of issue or issuer, or use 11998800 11998811 11998822 Sept. Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr. 1 All issues, new and refunding1 48,367 47,732 78,950 6,673 8,466 10,287 9,761 3,625 5,998 8,141 10,149 Type of issue 2 General obligation 14,100 12,394 21,088 1,716 2,331 3,392 1,623 847 1,250 2,230 3,278 3 U.S. government loans2 38 34 225 30 30 34 37 0 3 3 2 4 Revenue 34,267 35,338 57,862 4,957 6,135 6,895 8,138 2,778 4,748 5,911 6,871 5 U.S. government loans2 57 55 461 54 57 57 62 0 2 5 9 Type of issuer 6 State 5,304 5,288 8,406 1,077 1,010 1,091 220 237 275 724 1,745 7 Special district and statutory authority 26,972 27,499 45,000 3,607 5,160 5,489 6,171 2,100 4,123 5,046 5,227 8 Municipalities, counties, townships, school districts 16,090 14,945 25,544 1,821 2,296 3,243 3,370 1,288 1,600 2,371 3,177 9 Issues for new capital, total 46,736 46,530 74,612 6,470 7,275 9,496 9,531 3,127 4,909 6,709 8,242 Use of proceeds 10 Education 4,572 4,547 6,444 840 546 765 895 352 1,079 811 605 11 Transportation 2,621 3,447 6,256 557 636 1,291 1,342 49 539 815 559 12 Utilities and conservation 8,149 10,037 14,254 292 1,338 1,969 1,891 956 1,039 1,716 2,508 13 Social welfare 19,958 12,729 26,605 2,647 2,918 2,336 3,121 817 1,391 2,376 2,637 14 Industrial aid 3,974 7,651 8,256 1,082 621 877 1,308 306 167 330 350 15 Other purposes 7,462 8,119 12,797 1,052 1,212 2,258 974 647 694 904 1,583 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. 1.46 NEW SECURITY ISSUES of Corporations Millions of dollars 1982 1983 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11998800 11998811 11998822 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 All issues1-2 73,694 69,991 83,788 9,318 8,247 9,989 8,802 9,830 7,598 8,481 11,608 2 Bonds 53,206 44,642 53,226 6,553 5,762 7,121 5,412 5,636 4,470 3,819 5,267 Type of offering 3 Public 41,587 37,653 43,428 5,546 5,308 6,426 4,927 4,264 4,470 3,819 5,267 4 Private placement 11,619 6,989 9,798 1,007 454 695 485 1,372 n.a. n.a. n.a. Industry group 5 Manufacturing 15,409 12,325 13,307 1,602 1,730 2,044 2,138 1,204 849 635 962 6 Commercial and miscellaneous 6,693 5,229 5,681 1,202 481 417 523 565 702 361 511 7 3,329 2,052 1,474 402 64 285 88 120 31 250 8 Public utility 9,557 8,963 12,155 934 1,021 1,663 1,246 944 313 813 950 9 6,683 4,280 2,265 205 311 208 115 372 650 10 Real estate and financial 11,534 11,793 18,344 2,208 2,156 2,504 1,302 2,431 2,575 1,760 2,194 11 Stocks3 20,489 25,349 30,562 2,765 2,485 2,868 3,390 4,194 3,128 4,662 6,341 Type 12 Preferred 3,631 1,797 5,113 622 522 611 573 421 594 1,962 893 13 Common 16,858 23,552 25,449 2,143 1,963 2,257 2,817 3,773 2,534 2,700 5,448 Industry group 14 Manufacturing 4,839 5,074 5,649 717 345 666 481 921 876 1,048 1,584 15 Commercial and miscellaneous 5,245 7,557 7,770 375! 742 640 1,024 693 994 646 1,225 16 Transportation 549 779 709 62! 84 80 225 22 355 283 91 17 Public utility 6,230 5,577 7,517 759 1,003 620 752 742 350 534 674 18 Communication 567 1,778 2,227 495 4 33 14 1,361 187 2 1,133 19 Real estate and financial 3,059 4,584 6,690 357 307 829 894 455 366 2,149 1,634 1. Figures, which represent gross proceeds of issues maturing in more than one 2. Data for 1983 include only public offerings. year, sold for cash in the United States, are principal amount or number of units 3. Beginning in August 1981, gross stock offerings include new equity volume multiplied by offering price. Excludes offerings of less than $100,000, secondary from swaps of debt for equity. offerings, undefined or exempted issues as defined in the Securities Act of 1933, employee stock plans, investment companies otheT than closed-end, intracorpo- SOURCE. Securities and Exchange Commission and the Board of Governors of rate transactions, and sales to foreigners. the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A37 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1982 1983 IItteemm 11998811 11998822 Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. INVESTMENT COMPANIES' 1 Sales of own shares2 20,596 45,675 4,709 5,668 5,815 5,291 8,095 6,115 7,871 8,421 2 Redemptions of own shares3 15,866 30,078 3,052 3,046 3,493 4,835 4,233 3,510 5,066 6,482 3 Net sales 4,730 15,597 1,657 2,622 2,322 456 3,862 2,605 2,805 1,939 4 Assets4 55,207 76,741 63,783 70,964 74,864 76,841 80,384 84,981 90,075 98,660 5 Cash position5 5,277 5,999 5,556 5,948 5,838 6,040 6,943 7,404 7,904 8,948 6 Other 49,930 70,742 58,227 65,016 69,026 70,801 73,441 77,577 82,171 89,712 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. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1981 1982 1983 AAccccoouunntt 11998800 11998811 11998822 Q2 Q3 Q4 QL Q2 Q3 Q4 QL 1 Corporate profits with inventory valuation and capital consumption adjustment 181.6 190.6 160.8 185.1 193.1 183.9 157.1 155.4 166.2 164.6 185.4 2 Profits before tax 242.4 232.1 174.9 225.4 233.3 216.5 171.6 171.7 180.3 175.9 178.3 3 Profits tax liability 84.6 81.2 57.7 79.2 82.4 71.6 56.7 55.3 60.9 58.0 65.7 4 Profits after tax 157.8 150.9 117.1 146.2 150.9 144.9 114.9 116.3 119.4 117.9 112.5 5 Dividends 58.1 65.1 70.3 64.0 66.8 68.1 68.8 69.3 70.5 72.4 73.5 6 Undistributed profits 99.7 85.8 46.9 82.2 84.1 76.8 46.1 47.0 48.8 45.5 39.0 7 Inventory valuation -43.0 -24.6 -9.2 -22.8 -23.0 -17.1 -4.4 -9.4 -10.3 -12.6 -.7 8 Capital consumption adjustment -17.8 -16.8 -4.9 -17.5 -17.1 -15.5 -10.1 -6.9 -3.8 1.3 7.8 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 • June 1983 1.49 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1981 1982r AAccccoouunntt 11997766 11997777 11997788 11997799 11998800 Q4 Ql Q2 Q3 Q4 1 Current assets 827.4 912.7 1,043.7 1,218.2 1,333.5 1,426.8 1,424.6 1,422.6 1,446.9 1,430.9 2 Cash 88.2 97.2 105.5 118.0 127.1 131.9 122.0 124.4 126.9 143.7 3 U.S. government securities 23.5 18.2 17.3 17.0 19.3 18.0 16.9 17.1 19.6 23.1 4 Notes and accounts receivable 292.9 330.3 388.0 461.1 510.6 536.2 539.2 536.8 539.7 517.0 5 Inventories 342.5 376.9 431.6 505.5 543.7 587.1 592.7 588.4 598.0 577.5 6 Other 80.3 90.1 101.3 116.7 132.7 153.6 153.7 155.8 162.7 169.6 7 Current liabilities 495.1 557.1 669.3 807.8 890.9 979.5 988.0 987.5 1,005.2 976.5 8 Notes and accounts payable 282.1 317.6 382.9 461.2 515.2 562.4 555.5 555.1 559.7 548.7 9 Other 213.0 239.6 286.4 346.6 375.7 417.1 432.5 432.4 445.5 427.8 10 Net working capital 332.4 355.5 374.4 410.5 442.6 447.3 436.6 435.1 441.7 454.4 11 MEMO: Current ratio1 1.671 1.638 1.559 1.508 1.497 1.457 1.442 1.441 1.439 1.465 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. 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1982 1983 IInndduussttrryy11 11998811 11998822 1199883311 Q2 Q3 Q4 Ql Q21 Q3' Q41 1 Total nonfarm business 321.49 316.43 305.53 323.22 315.79 302.77 293.03 302.23 306.83 320.02 Manufacturing 7 Durable goods industries 61.84 56.44 51.95 59.03 57.14 50.50 50.74 49.64 53.34 54.09 3 Nondurable goods industries 64.95 63.23 60.84 64.74 62.32 59.59 59.12 61.34 60.75 62.15 Nonmanufacturing 4 Mining 16.86 15.45 13.24 16.56 14.63 13.31 12.03 13.69 13.54 13.70 Transportation 5 Railroad 4.24 4.38 3.96 4.73 3.94 4.31 3.35 4.00 4.09 4.41 6 Air 3.81 3.93 3.42 3.54 4.11 4.85 4.09 3.25 2.68 3.66 7 Other 4.00 3.64 3.42 4.06 3.24 3.25 3.60 3.40 3.17 3.51 Public utilities 8 Electric 29.74 33.40 33.84 32.26 34.98 35.12 33.97 34.16 32.97 34.24 9 Gas and other 8.65 8.55 7.76 9.14 8.40 7.77 7.64 8.03 7.48 7.87 10 Trade and services 86.33 86.95 87.13 88.85 87.31 84.00 82.38 85.33 87.41 93.37 11 Communication and other2 41.06 40.46 39.97 40.33 39.73 40.06 36.11 39.40 41.39 43.00 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 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1982 1983 AAccccoouunntt 11997777 11997788 11997799 11998800 11998811 Q1 Q2 Q3 Q4 Q1 ASSETS Accounts receivable, gross 1 Consumer 44.0 52.6 65.7 73.6 85.5 85.1 88.0 88.3 89.5 89.9 2 Business 55.2 63.3 70.3 72.3 80.6 80.9 82.6 82.2 81.0 82.2 Total 99.2 116.0 136.0 145.9 166.1 166.0 170.6 170.5 170.4 172.1 4 LESS: Reserves for unearned income and losses.... 12.7 15.6 20.0 23.3 28.9 29.1 30.2 30.4 30.5 29.7 ,5 Accounts receivable, net 86.5 100.4 116.0 122.6 137.2 136.9 "140.4 140.1 139.8 142.4 6 Cash and bank deposits 2.6 3.5 1 7 Securities .9 1.3 V 24.9' 27.5 34.2 35.0 37.3 39.1 39.7 42.8 8 All other 14.3 17.3 J 9 Total assets 104.3 122.4 140.9 150.1 171.4 171.9 177.8 179.2 179.5 185.2 LIABILITIES 10 Bank loans 5.9 6.5 8.5 13.2 15.4 15.4 14.5 16.8 18.6 16.6 11 Commercial paper 29.6 34.5 43.3 43.4 51.2 46.2 50.3 46.7 45.8 45.2 Debt 12 Short-term, n.e.c 6.2 8.1 8.2 7.5 9.6 9.0 9.3 9.9 8.7 9.8 13 Long-term, n.e.c 36.0 43.6 46.7 52.4 54.8 59.0 60.3 60.9 63.5 64.7 14 Other 11.5 12.6 14.2 14.3 17.8 19.0 18.9 20.5 18.7 22.8 15 Capital, surplus, and undivided profits 15.1 17.2 19.9 19.4 22.8 23.3 24.5 24.5 24.2 26.0 16 Total liabilities and capital 104.3 122.4 140.9 150.1 171.4 171.9 177.8 179.2 179.5 185.2 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments receivable AAAccccccooouuunnntttsss rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg 1983 1983 1983 MMMaaarrr... 333111,,, 111999888333''' Jan. Feb. Mar. Jan. Feb. Mar. Jan. Feb. Mar. 1 Total 82,239 1,030 126 -80 22,808 22,458 23,924 21,778 22,332 24,004 2 Retail automotive (commercial vehicles) 13,772 269 396 645 1,230 1,336 1,604 961 940 959 3 Wholesale automotive 12,525 182 115 -590 6,458 6,643 6,058 6,276 6,258 6,648 4 Retail paper on business, industrial, and farm equipment 27,627 -41 381 283 1,308 1,477 1,252 1,349 1,096 969 5 Loans on commercial accounts receivable and factored commercial accounts receivable 9,320 501 -243 102 12,286 11,634 13,327 11,785 11,877 13,225 6 All other business credit 18,995 119 -523 -520 1,526 1,368 1,683 1,407 1,891 2,203 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics • June 1983 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1982 1983 IItteemm 11998800 11998811 11998822 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Terms and yields in primary and secondary markets PPRRIIMMAARRYY MMAARRKKEETTSS CCoonnvveennttiioonnaall mmoorrttggaaggeess oonn nneeww hhoommeess TTeerrmmss'' 11 PPuurrcchhaassee pprriiccee ((tthhoouussaannddss ooff ddoollllaarrss)) 888333...444 999000...444 94.6 99.1 97.9 91.8 88.9 888888...444 888000...111 888999...666 22 AAmmoouunntt ooff llooaann ((tthhoouussaannddss ooff ddoollllaarrss)) 555999...222 666555...333 69.8 74.4 75.6 67.6 65.4 666666...666 666000...555 666666...555 33 LLooaann//pprriiccee rraattiioo ((ppeerrcceenntt)) 777333...222 777444...888 76.6 77.9 79.0 75.2 75.2 777777...999 777666...888 777444...222 44 MMaattuurriittyy ((yyeeaarrss)) 222888...222 222777...777 27.6 28.4 27.9 26.9 26.5 222777...222 222444...222 222666...999 55 FFeeeess aanndd cchhaarrggeess ((ppeerrcceenntt ooff llooaann aammoouunntt))22 222...000999 222...666777 2.95 2.74 2.76 2.98 2.46 222...777888 222...222111 222...000999 66 CCoonnttrraacctt rraattee ((ppeerrcceenntt ppeerr aannnnuumm)) 111222...222555 111444...111666 14.47 13.86 13.26 13.09 13.00 111222...666222 111222...999777 111222...000222 YYiieelldd ((ppeerrcceenntt ppeerr aannnnuumm)) 77 FFHHLLBBBB sseerriieess55 111222...666555 111444...777444 15.12 14.41 13.81 13.69 13.49 111333...111666 111333...444111 111222...444222 88 HHUUDD sseerriieess44 111333...999555 111666...555222 15.79 13.95 13.80 13.62 13.44 111333...111888 111333...111777 111333...000222 SSEECCOONNDDAARRYY MMAARRKKEETTSS YYiieelldd ((ppeerrcceenntt ppeerr aannnnuumm)) 99 FFHHAA mmoorrttggaaggeess ((HHUUDD sseerriieess))55 111333...444444 111666...333111 15.31 12.99 12.82 12.80 12.87 111222...666555 111222...666888 111222...555000 1100 GGNNMMAA sseeccuurriittiieess66 111222...555555 111555...222999 14.68 12.83 12.66 12.60 12.06 111111...999444 111111...888777 111111...777666 FFNNMMAA aauuccttiioonnss77 111444...111111 111666...777000 nnn...aaa... nnn...aaa... nnn...aaa... 111444...444333 111666...666444 1155..9955 1133..9922 1133..7755 1133..7722 nnn...aaa... nnn...aaa... nnn...aaa... Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total 55,104 58,675 66,031 69,152 70,126 71,814 73,106 73,555 73,666 73,553 14 FHA/V A-insured 37,365 39,341 39,718 39,523 39,174 39,057 38,924 38,768 38,409 37,901 15 Conventional 17,725 19,334 26,312 29,629 30,952 32,757 34,182 34,788 35,257 35,653 Mortgage transactions (during period) 16 Purchases 8,099 6,112 15,116 1,449 1,681 2,495 2,045 1,594 1,433 1,004 17 Sales 0 2 2 1 1 1 0 1 777 586 Mortgage commitments8 18 Contracted (during period) 8,083 9,331 22,105 1,426 2,795 3,055 2,006 785 1,184 1,023 19 Outstanding (end of period) 3,278 3,717 7,606 6,268 7,286 7,606 7,487 6,475 6,187 5,811 Auction of 4-month commitments to buy Government-underwritten loans 20 Offered 8,605.4 2,487.2 307.4 2.5 27.0 4.6 2.0 n.a. n.a. n.a. 21 Accepted 4,002.0 1,478.0 104.3 0 0 0 0 n.a. n.a. n.a. Conventional loans 22 Offered 3,639.2 2,524.7 445.3 13.6 22.1 23.2 7.8 1.8 n.a. n.a. 23 Accepted 1,748.5 1,392.3 237.6 8.9 11.4 15.3 0 n.a. n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 24 Total 4,362 5,245 5,153 4,957 4,676 4,733 4,560 4,450 4,795 4,997 25 FHA/V A 2,116 2,236 1,921 1,016 1,012 1,009 1,004 1,000 995 990 26 Conventional 2,246 3,010 3,224 3,891 3,618 3,724 3,556 3,450 3,800 4,008 Mortgage transactions (during period) 27 Purchases 3,723 3,789 23,671 2,000 1,917 3,916 1,479 1,688 2,849 1,807 28 Sales 2,527 3,531 24,164 2,197 2,182 3,798 1,641 1,756 2,469 1,525 Mortgage commitments10 29 Contracted (during period) 3,859 6,974 28,187 2,506 1,714 1,068 2,059 868 1,438 3,079 30 Outstanding (end of period) 447 3,518 7,549 10,572 10,407 7,549 8,098 7,238 5,845 7,253 1. Weighted averages based on sample surveys of mortgages originated by prevailing ceiling rate. Monthly figures are unweighted averages of Monday major institutional lender groups. Compiled by the Federal Home Loan Bank quotations for the month. Board in cooperation with the Federal Deposit Insurance Corporation. 7. Average gross yields (before deduction of 38 basis points for mortgage 2. Includes all fees, commissions, discounts, and "points" paid (by the servicing) on accepted bids in Federal National Mortgage Association's auctions borrower or the seller) to obtain a loan. of 4-month commitments to purchase home mortgages, assuming prepayment in 3. Average effective interest rates on loans closed, assuming prepayment at the 12 years for 30-year mortgages. No adjustments are made for FNMA commitment end of 10 years. fees or stock related requirements. Monthly figures are unweighted averages for 4. Average contract rates on new commitments for conventional first mort- auctions conducted within the month. FNMA's commitment auctions were gages, rounded to the nearest 5 basis points; from Department of Housing and discontinued in March 1983. 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. FHLMC's 6. Average net yields to investors on Government National Mortgage Associa- mortgage commitments and mortgage transactions include activity under morttion guaranteed, mortgage-backed, fully modified pass-through securities, assum- gage/securities swap programs, while the corresponding data for FNMA exclude ing prepayment in 12 years on pools of 30-year FHAA'A mortgages carrying the swap activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A41 1.54 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1982 1983 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998800 11998811 11998822 QL Q2 Q3 Q4 QL 1 All holders 1,471,786 1,583,264 1,652,126' 1,602,855 1,624,279 1,632,161 1,652,126' 1,679,911' ? 1- to 4-family 986,979 1,065,294 1,112,352' 1,076,930 1,089,522 1,097,507 1,112,352' 1,133,012' 3 Multifamily 137,134 136,354 136,515 137,712 138,332 136,508 136,515 138,164' 4 Commercial 255,655 279,889 296,369' 284,306 290,951 291,740 296,369' 301,703' 5 92,018 101,727 106,890 103,907 105,474 106,406 106,890 107,032' Major financial institutions 997,168 1,040,827 1,020,527 1,041,702 1,042,904 1,027,027 1,020,527 1,026,582' 7 Commercial banks' 263,030 284,536 301,742 289,365 294,022 298,342 301,742 305,672 8 1- to 4-family 160,326 170,013 177,122 171,350 172,5% 175,126 177,122 179,430 9 Multifamily 12,924 15,132 15,841 15,338 15,431 15,666 15,841 16,147 10 Commercial 81,081 91,026 100,269 94,256 97,522 99,050 100,269 101,575 11 Farm 8,699 8,365 8,510 8,421 8,473 8,500 8,510 8,520 12 Mutual savings banks 99,865 99,997 94,452 97,464 96,346 94,382 94,452 93,697 13 1- to 4-family 67,489 68,187 64,095 66,305 65,381 63,849 64,095 63,582 14 Multifamily 16,058 15,960 15,037 15,536 15,338 15,026 15,037 14,917 15 Commercial 16,278 15,810 15,292 15,594 15,598 15,479 15,292 15,170 16 Farm 40 40 28 29 29 28 28 28 17 Savings and loan associations 503,192 518,547 482,414 516,111 512,997 493,899 482,414 484,08C 18 1- to 4-family 419,763 433,142 398,537' 430,178 425,890 410,035 398,537' 397,178' 19 Multifamily 38,142 37,699 36,023 37,986 38,321 36,894 36,023 36,511' 20 Commercial 45,287 47,706 47,854' 47,947 48,786 46,970 47,854' 50,391' 21 Life insurance companies 131,081 137,747 141,919 138,762 139,539 140,404 141,919 143,133 22 1- to 4-family 17,943 17,201 16,743 17,086 16,451 16,865 16,743 16,836 23 Multifamily 19,514 19,283 18,847 19,199 18,982 18,967 18,847 19,054 24 Commercial 80,666 88,163 93,501 89,529 91,113 91,640 93,501 94,618 25 Farm 12,958 13,100 12,828 12,948 12,993 12,932 12,828 12,625 26 Federal and related agencies 114,300 126,094 138,185 128,698 131,456 134,449 138,185 140,023' 27 Government National Mortgage Association 4,642 4,765 4,227 4,438 4,669 4,110 4,227 3,785 28 1- to 4-family 704 693 676 689 688 682 676 665 29 Multifamily 3,938 4,072 3,551 3,749 3,981 3,428 3,551 3,120 30 Farmers Home Administration 3,492 2,235 1,786 2,469 1,335 947 1,786 2,077' 31 1- to 4-family 916 914 783 715 491 302 783 707' 32 Multifamily 610 473 218 615 179 46 218 38(K 33 Commercial 411 506 377 499 256 164 377 337' 34 Farm 1,555 342 408 640 409 435 408 653' 35 Federal Housing and Veterans Administration 5,640 5,999 5,228 6,003 5,908 5,362 5,228 5,156 36 1- to 4-family 2,051 2,289 1,980 2,266 2,218 2,130 1,980 1,883 37 Multifamily 3,589 3,710 3,248 3,737 3,690 3,232 3,248 3,273 38 Federal National Mortgage Association 57,327 61,412 71,814 62,544 65,008 68,841 71,814 73,666 39 1- to 4-family 51,775 55,986 66,500 57,142 59,631 63,495 66,500 68,370 40 Multifamily 5,552 5,426 5,314 5,402 5,377 5,346 5,314 5,2% 41 Federal Land Banks 38,131 46,446 50,350 47,947 49,270 49,983 50,350 50,544 42 1- to 4-family 2,099 2,788 3,068 2,874 2,954 3,029 3,068 3,059 43 Farm 36,032 43,658 47,282 45,073 46,316 46,954 47,282 47,485 44 Federal Home Loan Mortgage Corporation 5,068 5,237 4,780 5,297 5,266 5,166 4,780 4,795 45 1- to 4-family 3,873 5,181 4,733 5,240 5,209 5,116 4,733 4,740 46 Multifamily 1,195 56 47 57 57 50 47 55 47 Mortgage pools or trusts2 142,258 163,000 216,654' 172,303 183,657 198,376 216,654' 234,5%' 48 Government National Mortgage Association 93,874 105,790 118,940' 108,592 111,459 114,776 118,940' 127,939' 49 1- to 4-family 91,602 103,007 115,831' 105,701 108,487 111,728 115,831' 124,482' 50 Multifamily 2,272 2,783 3,109 2,891 2,972 3,048 3,109 3,457 51 Federal Home Loan Mortgage Corporation 16,854 19,853 42,964 23,970 28,703 35,132 42,964 48,008 52 1- to 4-family 13,471 19,501 42,560 23,610 28,329 34,739 42,560 47,575 53 Multifamily 3,383 352 404 360 374 393 404 433 54 Federal National Mortgage Association3 n.a. 717 14,450 2,786 4,556 8,133 14,450 18,157 55 1- to 4-family n.a. 717 14,450 2,786 4,556 8,133 14,450 18,157 56 Farmers Home Administration 31,530 36,640 40,300 36,955 38,939 40,335 40,300 40,492' 57 I- to 4-family 16,683 18,378 20,005 18,740 19,357 20,079 20,005 20,263' 58 Multifamily 2,612 3,426 4,344 3,447 4,044 4,344 4,344 4,344' 59 Commercial 5,271 6,161 7,011 6,351 6,762 7,056 7,011 7,115' 60 Farm 6,964 8,675 8,940 8,417 8,776 8,856 8,940 8,770' 61 Individual and others4 218,060 253,343 276,760' 260,152 266,262 272,349 276,760' 278.710' 62 1- to 4-family5 138,284 167,297 185,269' 172,248 177,284 182,199 185,269' 186,085' 63 Multifamily 27,345 27,982 30,532 29,395 29,586 30,068 30,532 31,177 64 Commercial 26,661 30,517 32,065 30,130 30,914 31,381 32,065 32,497 65 Farm 25,770 27,547 28,894 28,379 28,478 28,701 28,894 28,951 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 (981. 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 DomesticN onfinancialS tatistics • June 1983 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net ChangeA Millions of dollars 1982 1983 11998800 11998811 11998822 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Amounts outstanding (end of period) 1 Total 313,472 331,697 344,798 337,469 336,473 338,372 344,798 343,151 340,343 342,568 344,748 By major holder 2 Commercial banks 147,013 147,622 152,069 149,801 149,528 149,651 152,069 150,906 150,257 151,319 152,408 3 Finance companies 76,756 89,818 94,322 93,357 92,541 93,462 94,322 95,080 93,859 94,817 94,675 4 Credit unions 44,041 45,954 47,253 46,846 46,645 46,832 47,253 46,946 46,757 47,081 47,505 5 Retailers2 28,448 29,551 30,202 26,829 27,046 27,639 30,202 28,859 27,734 27,472 27,455 6 Savings and loans 9,911 11,598 13,891 13,051 13,457 13,672 13,891 14,209 14,860 15,083 15,551 7 Gasoline companies 4,468 4,403 4,063 4,669 4,322 4,141 4,063 4,102 3,780 3,669 3,980 8 Mutual savings banks 2,835 2,751 2,998 2,916 2,934 2,975 2,998 3,049 3,096 3,127 3,174 By major type of credit 9 Automobile 116,838 125,331 130,227 128,856 128,375 129,299 130,227 129,482 129,055 130,959 131,976 10 Commercial banks 61,536 58,081 58,851 58,542 58,552 58,701 58,851 57,740 57,971 58,567 59,291 11 Indirect paper 35,233 34,375 35,178 34,728 34,744 34,884 35,178 (3) (3) (3) (3) 12 Direct loans 26,303 23,706 23,673 23,814 23,808 23,817 23,673 (3) (3) (3) (3) 13 Credit unions 21,060 21,975 22,596 22,402 22,306 22,395 22,596 22,458 22,360 22,518 22,721 14 Finance companies 34,242 45,275 48,780 47,921 47,518 48,203 48,780 49,284 48,724 49,874 49,964 15 Revolving 58,352 62,819 67,184 61,845 61,836 62,362 67,184 65,562 63,372 63,091 63,521 16 Commercial banks 29,765 32,880 36,688 34,017 34,110 34,233 36,688 36,282 35,481 35,533 35,651 17 Retailers 24,119 25,536 26,433 23,159 23,404 23,988 26,433 25,178 24,111 23,889 23,890 18 Gasoline companies 4,468 4,403 4,063 4,669 4,322 4,141 4,063 4,102 3,780 3,669 3,980 19 Mobile home 17,322 18,373 18,988 19,011 19,043 19,049 18,988 19,291 19,374 19,379 19,400 20 Commercial banks 10,371 10,187 9,684 9,956 9,860 9,806 9,684 9,828 9,806 9,739 9,624 21 Finance companies 3,745 4,494 4,965 4,953 4,971 4,970 4,965 4,981 4,960 4,967 4,970 22 Savings and loans 2,737 3,203 3,836 3,604 3,716 3,775 3,836 3,984 4,112 4,174 4,303 23 Credit unions 469 489 503 498 496 498 503 498 496 499 503 24 Other 120,960 125,174 128,399 127,748 127,219 127,662 128,399 128,816 128,542 129,139 129,851 25 Commercial banks 45,341 46,474 46,846 47,286 47,006 46,911 46,846 47,056 46,999 47,480 47,842 26 Finance companies 38,769 40,049 40,577 40,483 40,052 40,289 40,577 40,815 40,175 39,976 39,741 27 Credit unions 22,512 23,490 24,154 23,946 23,844 23,939 24,154 23,990 23,901 24,064 24,281 28 Retailers 4,329 4,015 3,769 3,670 3,642 3,651 3,769 3,681 3,623 3,583 3,565 29 Savings and loans 7,174 8,395 10,055 9,447 9,741 9,897 10,055 10,225 10,748 10,909 11,248 30 Mutual savings banks 2,835 2,751 2,998 2,916 2,934 2,975 2,998 3,049 3,096 3,127 3,174 Net change (during period)4 31 Total 1,448 18,217 13,096 1,256 -131 2,015 2,418 2,725 735 2,582 2,271 By major holder 32 Commercial banks -7,163 607 4,442 688 73 457 1,111 410 788 1,354 1,186 33 Finance companies 8,438 13,062 4,504 106 -372 1,051 1,024 1,881 -658 487 -520 34 Credit unions -2,475 1,913 1,298 255 38 412 197 20 43 143 708 35 Retailers2 329 1,103 651 69 -67 -51 -91 -14 36 422 147 36 Savings and loans 1,485 1,682 2,290 200 274 181 201 412 677 187 394 37 Gasoline companies 739 -65 -340 -88 -108 -35 -51 -78 -200 -35 299 38 Mutual savings banks 95 -85 251 26 31 0 27 94 49 24 57 By major type of credit 39 Automobile 477 8,495 4,898 349 -70 1,534 1,491 625 -233 1,221 689 40 Commercial banks -5,830 -3,455 770 360 137 336 527 -581 321 240 612 41 Indirect paper -3,104 -858 803 238 117 134 429 (3) (3) (3) (3) 42 Direct loans -2,726 -2,597 -33 122 20 202 98 (3> (3) (3) (3) 43 Credit unions -1,184 914 622 110 16 211 89 20 15 68 341 44 Finance companies 7,491 11,033 3,505 -121 -223 987 875 1,186 -569 913 -264 45 Revolving 1,415 4,467 4,365 311 81 39 501 68 -135 1,177 917 46 Commercial banks -97 3,115 3,808 311 223 74 650 130 61 786 468 47 Retailers 773 1,417 897 88 -34 0 -98 16 4 426 150 48 Gasoline companies 739 -65 -340 -88 -108 -35 -51 -78 -200 -35 299 49 Mobile home 483 1,049 609 75 -35 23 -37 420 204 -61 22 50 Commercial banks -276 -186 -508 -6 -105 -47 -74 193 26 -95 -99 51 Finance companies 355 749 471 18 -9 5 -15 53 59 -23 8 52 Savings and loans 430 466 633 60 78 61 49 175 120 54 107 53 Credit unions -25 20 14 3 1 4 3 -1 -1 3 6 54 Other -927 4,206 3,224 521 -107 419 463 1,612 899 245 643 55 Commercial banks -960 1,133 372 23 -182 94 8 668 380 423 205 56 Finance companies 592 1,280 528 209 -140 59 164 642 -148 -403 -264 57 Credit unions -1,266 975 662 142 21 197 105 1 29 72 361 58 Retailers -444 -314 -246 -19 -33 -51 7 -30 32 -4 -3 59 Savings and loans 1,056 1,217 1,657 140 196 120 152 237 557 133 287 60 Mutual savings banks 95 -85 251 26 31 0 27 94 49 24 57 1. The Board's series cover most short- and intermediate-term credit extended liquidations, seasonally adjusted. Beginning 1983, net change equals outstandings, to individuals through regular business channels, usually to finance the purchase seasonally adjusted less outstandings of the previous period, seasonally adjusted. of consumer goods and services or to refinance debts incurred for such purposes, NOTE: Total consumer noninstallment credit outstanding—credit scheduled to and scheduled to be repaid (or with the option of repayment) in two or more be repaid in a lump sum, including single-payment loans, charge accounts, and installments. service credit—amounted to, not seasonally adjusted, $74.8 billion at the end of 2. Includes auto dealers and excludes 30-day charge credit held by travel and 1980, $80.6 billion at the end of 1981, and $85.9 billion at the end of 1982. entertainment companies. 3. Not reported after December 1982. • These data have been revised from December 1980 through February 1983. 4. For 1982 and earlier, net change equals extensions, seasonally adjusted less Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A43 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT Percent unless noted otherwise 1982 1983 Item Feb. Mar. INTEREST RATES Commercial banks' 1 48-month new car2 14.30 16.54 16.83 15.97 14.81 2 24-month personal 15.47 18.09 18.65 17.99 17.47 3 120-month mobile home2 14.99 17.45 18.05 17.55 16.73 4 Credit card 17.31 17.78 18.51 18.75 18.82 Auto finance companies 5 New car 14.82 16.17 16.15 12.82 12.57 12.25 12.05 12.07 6 Used car 19.10 20.00 20.75 20.68 20.63 20.20 19.91 19.38 OTHER TERMS3 Maturity (months) 7 New car 45.0 45.4 46.0 46.4 46.4 46.0 45.9 45.9 8 Used car 34.8 35.8 34.0 36.9 36.9 38.2 37.7 37.7 Loan-to-value ratio 9 New car 87.6 85.3 87.0 87.0 86.0 86.0 84.0 10 Used car 94.2 91.8 90.3 91.0 90.0 90.0 90.0 91.0 Amount financed (dollars) 11 New car 6,322 7,339 8.178 8,339 8,468 8,683 8,755 8,829 12 Used car 3,810 4,343 4,746 4,822 4,846 4,742 4,731 4,802 1. Data for midmonth of quarter only. 3. At auto finance companies. 2. Before 1983 the maturity for new car loans was 36 months, and for mobile home loans was 84 months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic NonfinancialS tatistics • June 1983 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1980 1981 1982 11997777 11997788 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 317.7 368.6 388.8 355.0 391.1 412.7 325.1 384.9 402.7 379.6 365.9 459.6 By sector and instrument 2 U.S. government 56.8 53.7 37.4 79.2 87.4 161.3 63.3 95.1 81.9 92.9 100.2 222.4 3 Treasury securities 57.6 55.1 38.8 79.8 87.8 162.1 63.9 95.7 82.4 93.2 101.5 222.7 4 Agency issues and mortgages -.9 -1.4 -1.4 -.6 -.5 -.9 -.6 -.6 -.5 -.4 -1.4 -.4 5 Private domestic nonfinancial sectors 260.9 314.9 351.5 275.8 303.7 251.5 261.9 289.7 320.8 286.7 265.7 237.2 6 Debt capital instruments 169.8 198.7 216.0 204.1 175.0 168.4 203.8 204.4 196.5 153.5 157.1 179.7 7 Tax-exempt obligations 21.9 28.4 29.8 35.9 32.9 59.5 30.7 41.0 35.1 30.6 52.7 66.3 8 Corporate bonds 21.0 20.1 22.5 33.2 23.9 25.5 37.3 29.0 24.7 23.0 13.4 37.7 9 Mortgages 126.9 150.2 163.7 135.1 118.3 83.3 135.8 134.3 136.7 99.9 91.1 75.6 10 Home mortgages 94.3 112.1 120.1 96.7 78.6 58.8 96.5 96.9 95.2 62.0 58.6 59.0 11 Multifamily residential 7.1 9.2 7.8 8.8 4.6 1.3 8.1 9.5 5.1 4.1 4.2 -1.6 12 Commercial 21.7 23.9 20.2 25.3 18.0 20.3 20.1 27.4 23.2 22.8 13.3 13 Farm 18.4 7.2 11.8 9.3 9.8 5.2 10.9 7.8 9.0 10.5 5.4 4.9 14 Other debt instruments 91.1 116.2 135.5 71.7 128.8 83.0 58.1 85.4 124.3 133.2 108.6 57.5 15 Consumer credit 40.2 48.8 45.4 4.9 25.3 14.4 -3.3 13.0 29.4 21.2 14.4 14.4 16 Bank loans n.e.c 26.7 37.1 49.2 35.4 51.1 57.4 18.0 52.7 47.7 54.6 77.4 37.5 17 Open market paper 2.9 5.2 11.1 6.6 19.2 -2.8 20.3 -7.1 10.7 27.6 4.4 -9.9 18 Other 21.3 25.1 29.7 24.9 33.1 14.0 23.0 26.7 36.5 29.8 12.4 15.6 19 By borrowing sector 260.9 314.9 351.5 275.8 303.7 251.5 261.9 289.7 320.8 286.7 265.7 237.2 20 State and local governments 15.4 19.1 20.2 27.3 22.3 45.8 21.8 32.8 25.1 19.5 41.1 50.4 21 Households 137.3 169.3 176.5 117.5 120.4 88.5 115.2 119.8 141.0 99.9 88.1 89.0 22 Farm 12.3 14.6 21.4 14.4 16.4 9.0 15.7 13.0 19.9 12.8 8.4 9.6 23 Nonfarm noncorporate 28.3 32.4 34.4 33.8 40.5 24.7 27.5 40.2 41.8 39.3 32.4 16.9 24 Corporate 67.6 79.4 99.0 82.8 104.1 83.5 81.7 83.9 93.0 115.2 95.7 71.2 25 Foreign net borrowing in U.S 13.5 33.8 20.2 27.2 27.3 15.3 29.0 25.3 34.0 20.6 17.5 13.2 26 Bonds 5.1 4.2 3.9 .8 5.5 6.4 2.0 -.4 3.3 7.6 2.2 10.7 27 Bank loans n.e.c 3.1 19.1 2.3 11.5 3.7 -6.2 5.9 17.2 5.0 2.3 -.4 -12.1 28 Open market paper 2.4 6.6 11.2 10.1 13.9 10.7 15.7 4.5 20.6 7.1 12.5 9.0 29 U.S. government loans 3.0 3.9 2.9 4.7 4.3 4.4 5.4 4.0 5.0 3.6 3.2 5.7 30 Total domestic plus foreign 331.2 402.3 409.1 382.2 418.4 428.0 354.2 410.2 436.7 400.2 383.3 472.8 Financial sectors 31 Total net borrowing by financial sectors 48.8 75.0 80.7 61.3 80.7 68.8 57.6 65.0 85.8 75.5 93.5 44.2 By instrument 32 U.S. government related 21.9 36.7 47.3 43.6 45.1 62.6 47.3 39.8 42.5 47.8 59.3 65.9 33 Sponsored credit agency securities 7.0 23.1 24.3 24.4 30.1 13.1 27.1 21.7 26.9 33.3 21.4 4.7 34 Mortgage pool securities 16.1 13.6 23.1 19.2 15.0 49.5 20.2 18.1 15.6 14.5 37.9 61.2 ^ -1.2 36 Private financial sectors 26.9 38.3 33.4 17.7 35.6 6.2 10.3 25.2 43.4 27.8 34.2 -21.8 37 Corporate bonds 10.1 7.5 7.8 7.1 -.8 2.3 9.9 4.4 -2.1 .4 -3.3 7.9 38 Mortgages 3.1 .9 -1.2 -.9 -2.9 1.8 -5.3 3.5 -2.3 -3.5 1.9 1.6 39 Bank loans n.e.c -.3 2.8 -.4 -.4 2.2 3.2 .1 -.9 3.7 .7 6.0 .5 40 Open market paper 9.6 14.6 18.0 4.8 20.9 -1.8 -.1 9.7 24.8 17.0 16.0 -19.6 41 Loans from Federal Home Loan Banks 4.3 12.5 9.2 7.1 16.2 .8 5.8 8.5 19.3 13.2 13.8 -12.1 By sector 42 Sponsored credit agencies 5.8 23.1 24.3 24.4 30.1 13.1 27.1 21.7 26.9 33.3 21.4 4.7 43 Mortgage pools 16.1 13.6 23.1 19.2 15.0 49.5 20.2 18.1 15.6 14.5 37.9 61.2 44 Private financial sectors 26.9 38.3 33.4 17.7 35.6 6.2 10.3 25.2 43.4 27.8 34.2 -21.8 45 Commercial banks 1.1 1.3 1.6 .5 .4 1.2 .8 .3 .2 .5 .7 1.7 46 Bank affiliates 2.0 7.2 6.5 6.9 8.3 1.9 5.8 8.0 6.9 9.7 9.7 -5.8 47 Savings and loan associations 9.9 14.3 11.4 6.6 13.1 -1.7 .1 13.2 19.2 6.9 16.6 -19.9 48 Finance companies 16.9 18.1 16.6 6.3 14.1 5.3 6.0 6.5 17.3 11.0 7.7 2.9 49 REITs -2.5 -1.4 -1.3 -2.2 .2 .1 -2.0 -2.5 .2 .2 .1 .1 All sectors 50 Total net borrowing 379.9 477.4 489.7 443.5 499.1 496.9 411.8 475.2 522.5 475.7 476.8 516.9 51 U.S. government securities 79.9 90.5 84.8 122.9 132.6 224.0 110.7 135.1 124.5 140.7 159.6 288.4 52 State and local obligations 21.9 28.4 29.8 35.9 32.9 59.5 30.7 41.0 35.1 30.6 52.7 66.3 53 Corporate and foreign bonds 36.1 31.8 34.2 41.1 28.5 34.2 49.3 33.0 26.0 30.9 12.2 56.3 54 Mortgages 129.9 151.0 162.4 134.0 115.2 85.0 130.4 137.7 134.3 96.2 92.8 77.1 55 Consumer credit 40.2 48.8 45.4 4.9 25.3 14.4 -3.3 13.0 29.4 21.2 14.4 14.4 56 Bank loans n.e.c 29.5 59.0 51.0 46.5 57.0 54.4 24.0 69.0 56.4 57.6 82.9 26.0 57 Open market paper 15.0 26.4 40.3 21.6 54.0 6.1 35.9 7.2 56.2 51.8 32.8 -20.6 58 Other loans 27.4 41.5 41.8 36.6 53.7 19.2 34.1 39.2 60.7 46.6 29.3 9.1 External corporate equity funds raised in U.S. 59 Total new share issues 6.S 1.9 -3.8 22.1 -2.9 34.5 16.3 27.9 11.2 -17.0 23.5 45.6 60 Mutual funds .9 -.1 .1 5.0 7.7 19.6 5.5 4.5 8.9 6.5 14.5 24.7 61 All other 5.6 1.9 -3.9 17.1 -10.6 14.9 10.8 23.4 2.3 -23.5 9.0 20.8 62 Nonfinancial corporations 2.7 -.1 -7.8 12.9 -11.5 11.4 6.9 18.8 .9 -23.8 7.0 15.8 63 Financial corporations 2.5 2.5 3.2 2.1 .9 2.2 1.9 2.3 .8 1.0 2.2 2.2 64 Foreign shares purchased in U.S .4 -.5 .8 2.1 * 1.3 1.9 2.2 .7 -.7 -.2 2.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A45 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates 1980 1981 1982 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997777 11997788 11997799 11998800 11998811 11998822 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 317.7 368.6 388.8 355.0 391.1 412.7 325.1 384.9 402.7 379.6 365.9 459.6 By public agencies and foreign ? Total net advances 79.2 101.9 74.6 95.8 95.9 110.9 104.6 87.0 98.7 9933..22 9922..22 112299..66 3 U.S. government securities 34.9 36.1 -6.3 15.7 17.2 17.7 20.5 10.9 15.9 18.5 .2 35.2 4 Residential mortgages 20.0 25.7 35.8 31.7 23.4 61.1 34.9 28.5 21.4 25.5 47.4 74.7 5 FHLB advances to savings and loans 4.3 12.5 9.2 7.1 16.2 .8 5.8 8.5 19.3 13.2 13.8 -12.1 6 Other loans and securities 20.1 27.6 35.9 41.3 39.1 31.4 43.4 39.1 42.1 36.0 30.9 31.8 Total advanced, by sector 7 U.S. government 10.0 17.1 19.0 23.7 24.2 19.4 24.6 22.8 27.1 21.2 14.0 24.9 8 Sponsored credit agencies 22.4 39.9 52.4 44.4 46.0 63.5 45.2 43.7 44.3 47.7 60.4 66.6 9 Monetary authorities 7.1 7.0 7.7 4.5 9.2 9.8 14.9 -5.9 -3.7 22.1 -6.3 25.9 10 Foreign 39.6 38.0 -4.6 23.2 16.6 18.2 19.9 26.5 30.9 2.2 24.1 12.3 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies & mortgage pools 21.9 36.7 47.3 43.6 45.1 62.6 47.3 39.8 42.5 47.8 59.3 65.9 12 Foreign 13.5 33.8 20.2 27.2 27.3 15.3 29.0 25.3 34.0 20.6 17.5 13.2 Private domestic funds advanced 13 Total net advances 273.9 337.1 381.8 329.9 367.6 379.7 296.9 362.9 380.5 354.7 350.4 409.1 14 U.S. government securities 45.1 54.3 91.1 107.2 115.4 206.3 90.2 124.2 108.5 122.3 159.4 253.2 15 State and local obligations 21.9 28.4 29.8 35.9 32.9 59.5 30.7 41.0 35.1 30.6 52.7 66.3 16 Corporate and foreign bonds 22.2 22.4 23.7 25.8 20.6 21.2 31.6 20.1 18.6 22.7 * 42.4 17 Residential mortgages 81.4 95.5 92.0 73.7 59.7 -1.1 69.6 77.8 78.8 40.5 15.3 -17.5 18 Other mortgages and loans 107.6 149.1 154.3 94.4 155.3 94.6 80.6 108.3 158.7 151.8 136.7 52.4 19 LESS: Federal Home Loan Bank advances 4.3 12.5 9.2 7.1 16.2 .8 5.8 8.5 19.3 13.2 13.8 -12.1 Private financial intermediation 20 Credit market funds advanced by private financial institutions 261.7 302.9 292.2 257.9 301.3 262.5 245.4 270.4 326.3 276.3 278.7 246.3 21 Commercial banking 87.6 128.7 121.1 99.7 103.5 107.8 64.7 134.8 107.8 99.2 122.5 93.1 22 Savings institutions 81.6 73.6 55.5 54.1 24.6 24.0 34.9 73.2 43.9 5.3 29.8 18.2 23 Insurance and pension funds 69.0 75.0 66.4 74.4 75.8 88.6 84.3 64.4 75.8 75.8 87.2 90.0 24 Other finance 23.5 25.6 49.2 29.8 97.4 42.1 61.5 -1.9 98.8 95.9 39.2 44.9 25 Sources of funds 261.7 302.9 292.2 257.9 301.3 262.5 245.4 270.4 326.3 276.3 278.7 246.3 26 Private domestic deposits and RP's 138.9 141.1 142.5 167.8 211.2 170.4 162.5 173.1 212.0 210.3 161.1 179.6 27 Credit market borrowing 26.9 38.3 33.4 17.7 35.6 6.2 10.3 25.2 43.4 27.8 34.2 -21.8 28 Other sources 96.0 123.5 116.4 72.4 54.6 85.9 72.7 72.1 70.9 38.2 83.4 88.4 29 Foreign funds 1.2 6.3 25.6 -23.0 -8.8 -28.6 -20.0 -26.0 -.7 -16.8 -18.3 -39.0 30 Treasury balances 4.3 6.8 .4 -2.6 -1.1 6.1 -6.1 1.0 6.0 -8.2 -5.1 17.2 31 Insurance and pension reserves 51.4 62.2 49.1 65.4 70.8 78.1 70.3 60.5 66.0 75.6 77.3 78.8 32 Other, net 39.1 48.3 41.3 32.6 -6.4 30.4 28.6 36.6 -.4 -12.3 29.4 31.4 Private domestic nonfinancial investors 33 Direct lending in credit markets 39.0 72.5 122.9 89.7 101.9 123.5 61.7 117.7 97.5 106.2 105.9 141.0 34 U.S. government securities 24.6 36.3 61.4 38.3 50.4 70.6 23.3 53.3 43.0 57.7 59.4 81.8 35 State and local obligations -.8 3.6 9.4 12.6 20.3 41.3 6.2 18.9 22.8 17.8 40.8 41.7 36 Corporate and foreign bonds -5.1 -2.9 10.2 9.3 -7.9 -8.3 7.8 10.8 -9.2 -6.6 -26.6 10.0 37 Open-market paper 9.6 15.6 12.1 -3.4 3.5 -2.3 -8.1 1.4 -1.4 8.4 7.8 -12.5 38 Other 10.7 19.9 29.8 32.9 35.6 22.3 32.5 33.3 42.3 29.0 24.5 20.0 39 Deposits and currency 148.5 152.3 151.9 179.2 221.0 176.5 172.4 186.1 218.6 223.4 161.1 191.8 40 Currency 8.3 9.3 7.9 10.3 9.5 8.4 9.3 11.3 5.8 13.2 2.0 14.8 41 Checkable deposits 17.2 16.3 19.2 4.2 18.3 17.0 -2.5 11.0 26.5 10.1 9.2 24.8 42 Small time and savings accounts 93.5 63.7 61.0 79.5 46.6 122.7 73.4 85.7 26.9 66.3 77.7 167.6 43 Money market fund shares .2 6.9 34.4 29.2 107.5 24.7 61.9 -3.4 104.1 110.8 39.4 10.1 44 Large time deposits 25.8 46.6 21.2 48.3 36.3 2.1 24.4 72.1 46.8 25.7 33.7 -29.5 45 Security RPs 2.2 7.5 6.6 6.5 2.5 3.8 5.3 7.8 7.7 -2.6 1.1 6.6 46 Deposits in foreign countries 1.3 2.0 1.5 1.1 .3 -2.3 .6 1.7 .8 -.2 -2.0 -2.6 47 Total of credit market instruments, deposits and currency 187.5 224.9 274.8 269.0 322.8 300.0 234.1 303.8 316.1 329.6 267.0 332.9 48 Public holdings as percent of total 23.9 25.3 18.2 25.1 22.9 25.9 29.5 21.2 22.6 23.3 24.1 27.4 49 Private financial intermediation (in percent) 95.6 89.9 76.5 78.2 82.0 69.1 82.7 74.5 85.8 77.9 79.5 60.2 50 Total foreign funds 40.8 44.3 21.0 .2 7.8 -10.4 * .5 30.3 -14.6 5.9 -26.7 MEMO: Corporate equities not included above 51 Total net issues 6.5 1.9 -3.8 22.1 -2.9 34.5 16.3 27.9 11.2 -17.0 23.5 45.6 52 Mutual fund shares .9 -.1 .1 5.0 7.7 19.6 5.5 4.5 8.9 6.5 14.5 24.7 53 Other equities 5.6 1.9 -3.9 17.1 -10.6 14.9 10.8 23.4 2.3 -23.5 9.0 20.8 54 Acquisitions by financial institutions 7.4 4.6 10.4 14.6 22.9 31.4 8.6 20.7 25.3 20.5 21.1 41.6 55 Other net purchases -.8 -2.7 -14.2 7.5 -25.8 3.2 7.7 7.2 -14.1 -37.5 2.4 4.0 NOTES BY LINE NUMBER. 32. Mainly retained earnings and net miscellaneous liabilities. 1. Line 1 of table 1.58. 33. Line 12 less line 20 plus line 27. 2. Sum of lines 3-6 or 7-10. 34-38. Lines 14-18 less amounts acquired by private finance. Line 38 includes 6. Includes farm and commercial mortgages. mortgages. II. Credit market funds raised by federally sponsored credit agencies, and net 40. Mainly an offset to line 9. issues of federally related mortgage pool securities. 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. Also 48. Line 2/line 1. sum of lines 28 and 47 less lines 40 and 46. 49. Line 20/line 13. 18. Includes farm and commercial mortgages. 50. Sum of lines 10 and 29. 26. Line 39 less lines 40 and 46. 51. 53. Includes issues by financial institutions. 27. Excludes equity issues and investment company shares. Includes line 19. 29. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, and liabilities of foreign banking agencies to foreign affiliates. outstanding, may be obtained from Flow of Funds Section, Division of Research 30. Demand deposits at commercial banks. and Statistics, Board of Governors of the Federal Reserve System, Washington, 31. Excludes net investment of these reserves in corporate equities. D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • June 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 Industrial production1 147.0 151.0 138.6 137.3 135.7 134.9 135.2 137.4 138.1 139.9 142.7 144.3 Market groupings 2 Products, total 146.7 150.6 141.8 140.8 139.3 139.0 139.9 140.9 140.3 141.7 144.3 146.0 i Final, total 145.3 149.5 141.5 140.0 138.7 138.3 139.5 140.1 138.9 140.0 142.6 144.3 4 Consumer goods 145.4 147.9 142.6 143.4 142.2 141.3 142.0 143.6 143.4 144.5 146.8 148.1 5 Equipment 145.2 151.5 139.8 135.2 134.0 134.2 136.1 135.3 132.7 133.9 136.8 139.0 6 Intermediate 151.9 154.4 143.3 143.7 141.6 141.8 141.5 143.7 145.3 147.9 150.7 152.6 7 Materials 147.6 151,6 133.7 132.0 130.0 128.4 127.8 132.0 134.9 137.2 140.1 141.5 Industry groupings 8 Manufacturing 146.7 150.4 137.6 137.1 135.0 134.0 134.5 136.7 138.2 140.3 143.2 145.0 Capacity utilization (percent)1'2 9 Manufacturing 79.1 78.5 69.8 69.2 68.0 67.4 67.5 68.5 69.1 69.9 71.3 72.0 10 Industrial materials industries 80.0 79.9 68.9 67.7 66.6 65.7 65.2 67.3 68.6 69.7 71.0 71.7 11 Construction contracts (1977 = 100)3 107.0 111.0 111.0 117.0 105.0 122.0 131.0 127.0 119.0 131.0 129.0 n.a. 12 Nonagricultural employment, total4 137.4 138.5 136.2 135.6' 135.2' 134.9 134.7' 135.1 134.9 ns.O' 135.4' 136.0 13 Goods-producing, total 110.1 109.4' 102.6' 101.0 99.9' 99.2' 98.9' 99.5' 98.9' 98.8' 99.3' 100.2 14 Manufacturing, total 104.3 103.7 96.9 95.4' 94.4' 93.7' 93.6' 93.8' 93.8' 93.9' 94.5 95.0 15 Manufacturing, production-worker ... 99.3 98.0 89.4' 87.7' 86.4' 85.6' ss.e' 85.9' 86.(K 86.1 86.9 87.7 16 Service-producing 152.4 154.4 154.7 154.6' 154.5' 154.5 154.4' 154.6' 154.6' 154.8' 155.2' 155.6 17 Personal income, total 342.9 383.5 407.9 412.3 414.2 417.1 418.3 419.3 419.7 422.0 425.3 18 Wages and salary disbursements 317.6 349.9 365.5 367.7 368.0 368.2 370.0 373.8 373.3 375.4 378.4 n.a. 19 Manufacturing 264.3 288.1 285.3 284.5 281.3 280.0 279.3 283.9 285.5 287.5 291.3 n.a. 20 Disposable personal income5 332.9 370.3 396.7 402.0 403.7 406.8 407.4 409.5 409.2 411.6 415.7 n.a. 21 Retail sales" 303.8 330.6 326.0 343.5 347.4 353.4 353.3 352.7 348.3 356.4 362.5 370.1 Prices7 22 Consumer 246.8 272.4 289.1 293.3 294.1 293.6 292.4 292.6 293.2 293.4 295.5 n.a. 23 Producer finished goods 247.0 269.8 280.6 281.2 284.1 284.9 285.5' 283.6 283.7 283.4 283.0 n.a. 1. The industrial production and capacity utilization series have been revised 6. Based on Bureau of Census data published in Survey of Current Business. back to January 1979. 1. Data without seasonal adjustment, as published in Monthly Labor Review. 2. Ratios of indexes of production to indexes of capacity. Based on data from Seasonally adjusted data for changes in the price indexes may be obtained from Federal Reserve, McGraw-Hill Economics Department, and Department of 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 1983 1982 1983 1982 1983 denes Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing 138.1 137.7 134.5 138.4 196.4 197.7 198.9 200.1 70.3 69.7 67.6 69.2 2 Primary processing 132.3 132.4 129.3 136.9 199.5 200.4 201.3 202.3 66.3 66.1 64.2 67.7 3 Advanced processing 141.2 140.5 137.3 139.7 194.9 196.2 197.6 199.0 72.5 71.6 69.5 70.2 4 Materials 134.7 132.6 128.7 134.7 193.7 194.6 195.5 196.6 69.6 68.1 65.8 68.5 5 Durable goods 127.1 124.7 117.1 125.1 197.3 198.3 199.2 200.2 64.4 62.9 58.8 62.5 6 Metal materials 77.0 73.0 66.5 78.3 142.4 142.3 142.4 142.6 54.1 51.3 46.7 54.9 7 Nondurable goods 156.8 155.1 157.0 163.5 216.1 217.4 218.9 220.2 72.6 71.3 71.8 74.3 8 Textile, paper, and chemical 160.5 158.4 160.8 169.1 227.3 228.8 230.5 231.9 70.6 69.2 69.8 72.9 9 Textile 101.8 102.0 103.0 107.2 142.4 142.8 143.1 143.6 71.5 71.5 72.0 74.7 10 Paper 142.0 145.9 147.6 149.7 164.6 165.4 166.3 167.0 86.3 88.2 88.7 89.6 11 Chemical 194.0 188.5 191.9 204.3 289.6 291.9 294.3 296.7 67.0 64.6 65.2 68.8 12 Energy materials 125.5 123.8 121.5 122.2 157.0 157.6 158.2 158.8 79.9 78.5 76.8 76.9 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 High Low High Low May Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Capacity utilization rate (percent) 13 Manufacturing 88.0 69.0 87.2 74.9 70.2 69.2 68.0 67.4 67.5 68.5 69.1 69.9 71.3 72.0 14 Primary processing 93.8 68.2 90.1 71.0 66.1 66.4 65.0 63.9 63.7 66.0 67.7 68.8 70.6 71.2 15 Advanced processing .... 85.5 69.4 86.2 77.2 72.5 70.7 69.6 69.2 69.5 70.0 69.9 70.5 71.6 72.4 16 Materials 92.6 69.4 88.8 73.8 69.4 67.7 66.6 65.7 65.2 67.3 68.6 69.7 71.0 71.7 17 Durable goods 91.5 63.6 88.4 68.2 64.2 61.9 59.6 58.4 58.4 60.8 62.6 64.1 65.8 66.7 18 Metal materials 98.3 68.6 96.0 59.6 53.9 51.9 48.6 45.5 46.0 52.4 55.2 57.2 58.0 n.a. 19 Nondurable goods 94.5 67.2 91.6 77.5 72.5 72.8 72.5 71.9 71.0 72.7 74.5 75.6 76.8 77.6 20 Textile, paper, and chemical 95.1 65.3 92.2 75.3 70.6 70.7 70.3 69.9 69.3 70.8 73.3 74.7 76.2 77.2 21 Textile 92.6 57.9 90.6 80.9 71.5 72.3 73.0 71.6 71.3 73.0 74.1 77.0 78.3 n.a. 22 Paper 99.4 72.4 97.7 89.3 86.1 89.8 89.7 90.0 86.5 89.9 89.9 89.1 89.4 n.a. 23 Chemical 95.5 64.2 91.3 70.7 66.9 66.2 65.4 65.1 65.1 66.0 69.5 71.0 72.8 n.a. 24 Energy materials 94.6 84.8 88.3 82.7 79.9 76.6 77.6 76.8 76.0 77.5 76.7 76.6 76.8 76.6 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 Nov. Dec. Jan. Feb. Mar. Apr. May HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 169,847 172,272 174,451 175,238 175,381 175,543 175,693 175,850 175,996' 176,151 2 Labor force (including Armed Forces)1 109,042 110,812 112,384 113,222 113,311 112,737 112,741 112,678 112,988 112,947 3 Civilian labor force 106,940 108,670 110,204 111,042 111111,,112299 111100,,554488 111100,,555533 111100,,448844 111100,,778866 111100,,774499 Employment 4 Nonagricultural industries2 95,938 97,030 96,125 95,670 95,682 95,691 95,670 95,729 96,088' 96,190 5 Agriculture 3,364 3,368 3,401 3,466 3,411 3,412 3,393 3,375 33,,337711 33,,336677 Unemployment 6 Number 7,637 8,273 10,678 11,906 12,036 11,446 11,490 11,381 11,328 11,192 7 Rate (percent of civilian labor force)... 7.1 7.6 9.7 10.7 10.8 10.4 10.4 10.3 10.2 10.1 8 Not in labor force 60,805 61,460 62,067 62,016 62,070 62,806 62,952 63,172 63,008 63,204 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,406 91,105 89,619 88,785' 88,665' 88,886' 88,745' 88,814' 89,087' 89,461 10 Manufacturing 20,285 20,173 18,849 18,222' 18,193' 18,244' 18,245' 18,267' 18,373' 18,477 11 Mining 1,020 1,132 1,122 1,066' 1,053' 1,037' 1,014' 1,006' 997' 1,004 12 Contract construction 4,399 4,176 3,912 3,843' 3,815' 3,905' 3,790' 3,757' 3,785' 3,866 13 Transportation and public utilities 5,143 5,157 5,057 5,019' 5,008' 4,980' 4,965' 4,963' 4,988' 4,994 14 Trade 20,386 20,551 20,547 20,320' 20,256' 20,355' 20,343' 20,35(K 20,317' 20,344 15 Finance 5,168 5,301 5,350 5,356' 5,367' 5,374' 5,384' 5,391' 5,417' 5,418 16 Service 17,901 18,592 19,000 19,187' 19,215' 19,238' 19,262' 19,356' 19,484' 19.603 17 Government 16,249 16,024 15,784 15,772' 15,758' 15,753' 15,742' 15,724' 15,726' 15,755 1 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 1983 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 • June 1983 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 1982 11998833 On upin eg p p r o o r - - a 11 v 9988 g 22 . tion May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar. Apr .p Mayf Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 138.6 139.2 138.7 138.8 138.4 137.3 135.7 134.9 135.2 137.4 138.1 139.9 142.7 144.3 2 Products 60.71 141.8 142.3 142.1 142.6 142.0 140.8 139.3 139.0 139.9 140.9 140.3 141.7 144.3 146.0 3 Final products 47.82 141.5 142.2 142.1 142.5 141.2 140.0 138.7 138.3 139.5 140.1 138.9 140.0 142.6 144.3 4 Consumer goods 27.68 142.6 143.6 144.8 145.8 144.1 143.4 142.2 141.3 142.0 143.6 143.4 144.5 146.8 148.1 5 Equipment 20.14 139.8 140.4 138.4 138.0 137.3 135.2 134.0 134.2 136.1 135.3 132.7 133.9 136.8 139.0 6 Intermediate products 12.89 143.3 142.6 141.9 142.8 144.7 143.7 141.6 141.8 141.5 143.7 145.3 147.9 150.7 152.6 7 Materials 39.29 133.7 134.3 133.5 133.0 132.8 132.0 130.0 128.4 127.8 132.0 134.9 137.2 140.1 141.5 Consumer goods 8 Durable consumer goods 7.89 129.2 132.6 134.6 137.3 132.9 131.3 126.5 124.6 125.9 131.6 134.4 136.0 139.1 142.4 9 Automotive products 2.83 129.5 138.9 143.0 149.7 135.5 135.5 123.6 120.7 128.7 136.2 144.3 142.3 144.7 150.3 10 Autos and utility vehicles 2.03 99.0 111.8 117.1 127.7 107.1 105.8 89.6 86.9 99.0 107.0 120.8 116.4 117.8 124.8 11 Autos 1.90 86.6 96.1 101.9 114.6 93.3 94.3 79.5 77.7 87.9 97.1 107.3 99.9 102.7 107.4 12 Auto parts and allied goods .80 206.9 207.6 208.6 205.4 207.6 210.7 210.0 206.6 204.0 210.2 203.9 208.3 213.0 215.0 13 Home goods 5.06 129.1 129.1 129.9 130.4 131.4 128.9 128.1 126.8 124.3 129.1 128.8 132.5 135.9 137.9 14 Appliances, A/C, and TV 1.40 102.6 100.5 106.4 102.7 104.5 99.4 106.1 104.8 94.2 109.5 105.8 105.0 107.1 110.8 15 1.33 104.6 101.5 108.8 106.1 108.6 104.1 110.5 108.4 98.3 112.9 108.8 108.5 110.8 16 1.07 149.7 145.9 149.0 151.4 152.5 153.3 151.9 151.4 150.8 149.0 156.7 167.3 178.1 17 Miscellaneous home goods 2.59 135.0 137.7 134.9 136.7 137.2 134.9 130.1 128.6 129.8 131.4 129.7 133.1 134.2 135.6 18 Nondurable consumer goods 19.79 148.0 147.9 148.8 149.1 148.6 148.2 148.5 147.9 148.4 148.3 147.0 147.8 149.9 150.4 19 4 29 20 Consumer staples 15.50 159.0 159.0 159.9 159.7 159.4 158.8 159.1 158.1 158.8 158.6 157.4 158.5 160.3 160.8 21 Consumer foods and tobacco 8.33 149.7 149.9 150.9 149.9 149.6 148.6 150.2 149.0 149.5 150.9 149.5 149.0 22 Nonfood staples 7.17 169.7 169.5 170.4 171.2 170.8 170.7 169.5 168.7 169.6 167.6 166.5 169.4 171.7 172.4 23 Consumer chemical products .... 2.63 219.9 216.6 219.8 222.3 222.4 221.7 220.0 218.9 220.9 222.6 220.9 225.6 226.2 ">4 1.92 127.7 126.7 126.7 128.1 129.4 128.2 125.3 125.1 128.3 127.1 127.9 128.1 128.9 2.62 150.2 153.6 152.8 151.4 149.3 150.6 151.1 150.2 148.4 142.2 140.2 143.3 114488..44 2266 11..4455 117700..88 117733..77 117711..11 116677..77 116699..77 116699..55 116699..11 117711..55 116699..33 116644..11 116622..99 116666..11 Equipment 27 Business 12.63 157.9 159.9 156.7 154.9 153.9 150.5 147.1 146.4 148.1 146.6 142.7 143.9 147.2 149.7 28 Industrial 6.77 134.9 138.9 134.0 131.3 128.4 123.8 118.3 117.2 117.9 118.4 113.7 113.2 114.5 117.6 29 Building and mining 1.44 214.2 224.4 209.0 200.4 190.8 182.1 169.3 165.7 171.9 173.8 153.6 145.3 143.2 153.8 30 Manufacturing 3.85 107.2 109.7 107.5 106.0 104.4 101.6 98.0 97.5 97.0 97.6 97.9 99.7 102.4 104.0 31 Power 1.47 129.9 131.5 129.9 129.6 130.1 124.7 121.0 121.0 119.7 118.3 116.0 116.8 117.8 117.9 32 Commercial transit, farm 5.86 184.4 184.1 183.0 182.2 183.3 181.4 180.5 180.2 183.0 179.2 176.1 179.4 184.9 186.8 33 Commercial 3.26 253.5 247.7 247.5 248.8 253.5 254.0 253.5 254.8 258.6 254.9 251.2 255.7 263.2 265.0 34 Transit 1.93 103.9 110.9 108.3 106.3 102.0 95.5 93.2 92.3 96.2 90.8 88.2 90.8 92.5 93.8 35 .67 80.5 85.8 84.1 76.9 75.8 76.1 76.8 70.7 65.1 66.0 63.4 63.4 70.4 36 Defense and space 7.51 109.4 107.7 107.6 109.5 109.5 109.5 111.9 113.6 115.9 116.4 116.1 117.1 119.4 120.9 Intermediate products 37 Construction supplies 6.42 124.3 122.2 123.1 124.1 127.1 125.5 122.5 123.4 123.0 127.0 129.7 133.7 137.0 139.6 38 6.47 162.1 162.8 160.6 161.4 162.1 161.8 160.5 160.1 159.8 160.3 160.9 162.0 164.4 3399 11..1144 118811..11 118800..33 117788..33 117799..88 117788..11 117799..22 118800..44 182.4 118822..44 118800..66 117788..66 118800..33 118822..22 Materials 40 Durable goods materials 20.35 125.0 126.6 126.6 126.0 125.1 123.0 118.5 116.4 116.5 121.5 125.3 128.4 132.2 134.1 41 Durable consumer parts 4.58 95.3 98.9 103.1 103.8 101.0 97.1 91.4 90.0 91.1 96.2 101.6 103.7 106.2 108.5 42 Equipment parts 5.44 166.8 170.0 168.3 166.1 164.1 158.3 155.4 155.1 155.3 157.5 158.8 162.5 167.0 168.9 43 Durable materials n.e.c 10.34 116.2 116.1 115.1 114.8 115.4 115.8 111.1 107.7 107.4 113.8 118.2 121.4 125.4 127.1 44 5.57 79.9 79.4 77.4 75.7 76.1 77.7 73.0 69.1 68.7 78.1 82.4 85.1 86.5 45 Nondurable goods materials 10.47 157.5 156.6 153.5 152.3 154.5 158.5 158.2 157.3 155.6 159.7 164.0 166.9 169.9 171.8 46 Textile, paper, and chemical materials 7.62 161.1 160.4 156.7 155.3 157.7 162.2 161.5 161.0 160.0 163.7 170.0 173.5 177.4 180.0 4477 1.85 102.2 101.8 99.1 99.6 103.2 103.3 104.4 102.5 102.1 104.7 106.4 110.6 112.6 4488 1.62 145.6 141.8 140.7 142.1 146.6 148.9 148.9 149.7 144.1 150.1 150.1 149.0 149.9 49 4.15 193.5 193.9 188.7 185.4 186.5 193.7 192.0 191.6 192.0 195.4 206.2 211.2 217.2 50 1.70 161.4 157.2 158.5 158.1 162.8 167.3 164.9 160.8 155.2 162.1 159.6 163.4 163.4 51 11..1144 127.9 130.6 124.8 123.4 120.1 121.1 125.5 127.4 127.2 129.6 130.5 127.8 129.2 52 Energy materials 88..4488 125.1 125.4 125.4 126.0 124.5 121.0 122.6 121.4 120.4 123.0 121.8 121.7 122.2 122.1 53 4.65 116.0 116.9 116.6 117.2 113.8 111.1 114.4 113.7 113.5 116.5 115.4 114.2 113.5 5544 33..8822 113366..33 113355..77 113366..00 113366..77 113377..44 113333..00 113322..66 113300..88 112288..99 113300..88 112299..66 113300..88 113322..88 Supplementary groups 55 Home goods and clothing 9.35 119.6 119.5 120.2 121.4 121.3 120.1 119.9 119.6 118.2 120.8 119.9 121.9 125.1 126.5 56 Energy, total 12.23 135.7 136.5 136.2 136.4 134.8 132.7 134.1 133.3 132.2 132.4 131.0 131.8 133.4 133.5 57 3.76 159.6 161.7 160.5 160.0 158.0 159.3 160.0 160.0 158.7 153.8 151.9 154.5 158.6 58 Materials 8.48 125.1 125.4 125.4 126.0 124.5 121.0 122.6 121.4 120.4 123.0 121.8 121.7 122.2 122.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1982 1983 SIC pro- 1982 GGrroouuppiinngg code por- avg. tion May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar. Apr.P Mayf Index (1967 = 100) MAJOR INDUSTRY 1 12.05 146.3 148.8 145.2 142.6 141.3 139.7 140.4 140.4 140.1 141.3 141.7 136.6 133.4 132.6 1 6.36 126.1 128.9 123.5 120.1 116.9 114.7 115.9 116.8 118.4 121.9 114.5 112.3 112.1 113.8 ->, 5.69 168.7 170.9 169.4 167.7 168.5 167.5 167.8 166.7 164.2 163.1 171.9 163.9 157.1 153.2 4 3.88 190.5 193.4 191.6 189.2 189.9 188.2 188.4 188.3 185.6 184.4 191.6 181.6 173.8 171.0 5 87.95 137.6 137.9 137.7 138.1 138.0 137.1 135.0 134.0 134.5 136.7 138.0 141.4 143.3 145.1 6 35.97 156.2 155.0 155.3 155.7 156.9 156.7 156.2 155.3 155.6 157.4 157.5 160.7 162.8 164.5 7 5511..9988 112244..77 112266..11 112255..55 125.9 124.9 123.5 120.3 119.3 119.9 122.5 124.5 128.0 129.8 131.7 Mining 8 Metal 10 .51 82.4 90.0 71.8 58.1 53.4 55.4 63.1 70.4 74.9 81.7 71.2 74.2 8811..22 9 Coal 11.12 .69 142.7 149.2 144.4 140.3 135.8 127.9 143.2 134.1 129.7 144.8 135.0 133.3 130.8 133.0 10 Oil and gas extraction 13 4.40 131.1 132.7 129.1 127.0 123.3 121.0 119.1 120.3 122.9 124.6 117.5 114.2 112.0 113.1 11 Stone and earth minerals 14 .75 112.1 114.6 106.6 103.8 105.7 106.3 108.5 111.9 111.7 112.8 108.1 108.2 117.1 Nondurable manufactures 1? Foods 20 8.75 151.1 150.5 151.0 151.0 150.7 149.0 151.5 152.0 152.8 115544..44 114477..00 114477..66 N Tobacco products 21 .67 118.0 118.6 123.6 121.4 120.6 113.3 110.6 113.0 109.9 104.7 115.9 116.5 14 Textile mill products 22 2.68 124.5 123.5 123.7 124.3 125.9 126.1 125.9 123.1 122.2 125.8 128.7 132.8 138.6 23 3.31 16 Paper and products 26 3.21 150.8 146.5 146.8 147.0 152.5 154.3 155.0 154.5 151.1 158.8 160.9 163.9 163.1 162.4 17 Printing and publishing 27 4.72 144.1 143.8 142.6 143.9 145.3 144.3 142.0 141.7 142.8 141.3 135.8 137.9 140.0 144.2 18 Chemicals and products 28 7.74 196.1 193.6 193.2 194.1 195.6 196.4 194.1 192.8 195.9 197.6 200.0 206.6 211.2 19 Petroleum products 29 1.79 121.8 122.2 124.3 124.7 121.4 122.6 123.8 120.0 118.7 113.5 108.6 110.0 116.7 121.1 20 Rubber and plastic products 30 2.24 254.7 257.0 258.9 256.8 261.1 262.0 256.3 250.2 249.7 256.2 275.2 285.7 283.2 21 Leather and products 31 .86 60.9 61.1 62.3 62.9 60.8 60.9 59.5 57.7 56.0 59.5 64.1 62.4 62.4 Durable manufactures 22 Ordnance, private and government . 19.91 3.64 86.9 86.3 86.5 87.1 86.5 86.9 89.5 91.9 92.5 93.5 93.4 94.3 9944..88 9966..99 r\ Lumber and products 24 1.64 112.6 110.6 112.2 116.9 120.3 119.9 117.2 119.1 121.4 130.0 130.5 130.8 135.3 74 Furniture and fixtures 25 1.37 151.9 151.1 152.5 154.5 156.7 155.7 154.3 152.4 153.7 150.0 162.5 162.7 167.2 25 Clay, glass, stone products 32 2.74 128.2 125.0 126.1 126.9 128.8 130.4 128.1 127.3 125.4 128.0 124.8 131.0 139.0 26 Primary metals 33 6.57 75.3 75.2 72.8 72.9 72.9 73.2 69.6 63.6 63.5 73.1 79.4 86.5 87.3 87.9 77 Iron and steel 331.2 4.21 61.7 62.4 58.0 58.1 57.4 56.4 54.1 47.5 46.6 59.0 64.3 71.6 73.3 78 Fabricated metal products 34 5.93 114.8 115.8 115.0 115.5 114.3 112.3 107.6 107.0 107.3 107.6 112.3 115.5 115.2 116.4 79 Nonelectrical machinery 35 9.15 149.0 150.0 147.4 147.1 147.2 144.9 140.4 139.6 139.2 138.0 137.1 138.7 142.4 144.3 30 Electrical machinery 36 8.05 169.3 170.9 170.8 170.3 169.7 167.0 165.4 165.5 165.5 169.5 170.1 174.0 176.5 179.2 31 Transportation equipment 37 9.27 104.9 110.0 111.6 112.7 107.0 105.3 100.8 100.2 103.7 106.3 110.5 114.4 114.4 117.6 32 Motor vehicles and parts 371 4.50 109.8 119.8 124.0 127.2 116.7 113.5 103.0 101.7 108.8 113.9 124.8 130.6 131.3 137.0 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 100.4 100.8 99.9 99.0 97.8 97.6 98.6 98.7 98.9 99.1 97.0 99.1 98.5 99.4 34 Instruments 38 2.11 161.9 163.8 164.8 165.2 165.5 161.9 157.4 155.8 155.2 154.5 151.6 152.7 152.8 155.9 35 Miscellaneous manufactures 39 1.51 137.0 141.7 136.8 134.7 133.9 132.9 129.6 129.5 128.2 131.3 130.6 136.0 135.1 136.0 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 507.4 579.6 586.1 584.1 585.8 578.5 575.3 570.0 568.4 572.9 578.1 578.4 584.4 593.9 601.1 37 390.9 451.1 458.3 456.7 457.2 449.2 446.3 442.8 441.3 445.8 448.3 447.3 451.4 458.4 464.4 38 277.5 308.0 312.3 313.1 314.9 309.1 309.3 306.6 305.6 306.8 310.9 312.0 313.4 318.2 321.3 39 113.4 143.1 146.0 143.5 142.3 140.1 137.0 136.2 135.7 138.9 137.4 135.3 138.0 140.2 143.1 4400 111166..66 112288..55 112277..88 112277..44 112288..77 129.3 129.0 127.2 127.1 127.1 129.8 131.1 133.1 135.6 136.7 1. 1972 dollar value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • June 1983 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1982 1983 Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar.' Apr. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,191 986 1,001' 928' 1,029^ 1,154' 1,227' 1,326' 1,447' 1,479 1,467 1,563 2 1-family 710 564 546' 515' 576' 657' 738' 753' 866' 835 859 836 3 2-or-more-family 480 421 454' 413' 453' 497' 489' 573' 581' 644 608 727 4 Started 1,292 1,084 1,062 1,046 1,134 1,142 1,361 1,280 1,694 1,784 1,627 1,490 5 1-family 852 705 663 651 683 716 868 842 1,126 1,103 1,023 983 6 2-or-more-family 440 379 400 395 451 426 493 438 568 681 604 507 7 Under construction, end of period1 896 682 720 671 685 691 712 730 756 798 834 y 8 1-family 515 382 400 374 380 383 395 411 428 457 474 9 2-or-more-family 382 301 320 296 306 307 317 319 329 341 360 10 Completed 1,502 1,266 1,006 1,001 936 1,077 1,053 1,035 1,195' 1,140 1,139 n a. 11 1-family 957 818 631 638 585 679 679 647 782' 708 793 12 2-or-more-family 545 447 374 363 351 398 374 388 413' 432 346 13 Mobile homes shipped 222 241 239 234 222 224 251 243 284 283 276 < Merchant builder activity in 1-family units 14 Number sold 545 436 413 389 473 481 545 529 611' 592 597 573 15 Number for sale, end of period1 342 278 255 248 247 245 246 251 259' 263 266 270 Price (thousands of dollars)2 Median 16 Units sold 64.7 68.8 69.3 70.1 67.7 69.7 73.5 71.7 73.5' 73.7 73.1 74.9 17 Units sold 76.4 83.1 83.8 86.5 79.6 79.9 87.8 86.7 87.2' 87.1 87.0 89.2 EXISTING UNITS (1-family) 18 Number sold 2,974 2,418 1,991 1,860 1,910 1,990 2,150 2,260 2,580 2,460 2,710 2,750 Price of units sold (thousands of dollars)2 19 Median 62.1 66.1 67.7 68.9 67.3 66.9 67.7 67.8 68.1 68.2 68.9 68.9 20 Average 72.7 78.0 80.4 82.0 80.0 79.3 80.4 80.6 80.0 80.3 81.1 81.3 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 230,748 238,198 229,566 228,053 228,136 230,818 239,637 239,031 255,969 249,355 246,863 248,041 22 Private 175,701 185,221 179,418 176,644 177,002 179,792 187,517 191,441 200,071 199,176 198,822 202,316 23 Residential 87,261 86,566 75,003 72,139 71,451 75,687 81,744 86,950 93,406 96,391 98,572 104,362 24 Nonresidential, total 88,440 98,655 104,415 104,505 105,551 104,105 105,773 104,491 106,665 102,785 100,250 97,954 Buildings 25 Industrial 13,839 17,031 16,670 16,691 16,587 17,072 15,838 15,257 15,518 14,431 13,894 12,930 7.6 Commercial 29,940 34,243 37,125 36,091 37,129 35,677 37,769 37,516 38,773 37,330 36,313 34,596 27 Other 8,654 9,543 10,421 10,499 10,506 10,778 11,100 11,476 12,234 11,871 11,693 11,006 28 Public utilities and other 36,007 37,838 40,199 41,224 41,329 40,578 41,066 40,242 40,140 39,153 38,350 39,422 29 Public 55,047 52,977 50,148 51,409 51,134 51,026 52,120 47,590 55,898 50,179 48,041 45,725 30 Military 1,880 1,966 2,192 2,481 2,674 2,324 2,527 2,320 2,671 2,709 2,721 2,647 31 Highway 13,808 13,304 13,180 13,327 13,464 14,314 13,906 12,417 14,757 13,245 12,243 12,005 32 Conservation and development 5,089 5,225 4,983 5,036 4,719 4,541 4,718 4,601 5,214 4,889 5,209 4,677 33 Other 34,270 32,482 29,793 30,565 30,277 29,847 30,969 28,252 33,256 29,336 27,868 26,396 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 C m h o a n ng th e s f e ro ar m li e 1 r 2 Change ( a f t r o a m nn u 3 a m l o ra n t t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm AAAppprrr... 1982 1983 1982 1983 111999888333 11998822 11998833 (((111999666777 AApprr.. AApprr.. === 111000000)))111 June Sept. Dec. Mar. Dec. Jan. Feb. Mar. Apr. CONSUMER PRICES2 1 All items 6.6 3.9 9.8 4.1 .5 .4 -.3 .2 -.2 .1 .6 295.5 7 Food 4.0 2.8 6.2 .6 .8 2.8 .0 .1 .0 .6 .4 291.9 3 Energy items -3.4 3.6 7.5 8.1 10.2 -25.1 .3 -2.5 -3.7 -.9 2.0 410.0 4 All items less food and energy 8.8 4.3 9.6 4.7 -.3 4.4 -.2 .5 .4 .2 .4 284.0 Commodities 6.4 5.7 9.9 2.4 5.4 5.7 .3 .5 .5 .4 .1 240.2 6 Services 10.9 3.2 11.3 4.6 -4.8 3.7 -1.0 .5 .3 .1 .5 334.8 PRODUCER PRICES 7 Finished goods 3.3 2.1 4.6 4.2 5.2' -4.7' .3' -1.2' .1 -.1 -.1 283.0 8 Consumer foods 3.2 1.1 9.8 -7.7 .8' 3.6' .2 -.2 .6 .5 1.2 262.9 9 Consumer energy -9.2 -3.3 -9.2 30.9 7.0' -34.3' -.8' -4.2 -2.9 -3.2 -2.8 749.7 10 Other consumer goods 5.6 3.5 5.7 4.2 7.9' -2.3' -1.4' .7 .1 .2 238.6 11 Capital equipment 6.3 3.4 5.2 3.5 3.6' 3.3' .5 .0' .5 .4 -.3 286.5 12 Intermediate materials3 1.8 -.3 -.5 2.3 1.5 -5.1 .0 -.4 -.2 -.8 -.4 314.0 13 Excluding energy 3.3 .8 .0 1.0 1.0' 1.1' .1' .(K .4 -.1 -.2 293.0 Crude materials 14 Foods -3.5 .9 15.8 -26.4 1.3 18.1 .4 1.1 2.4 .7 3.0 256.8 15 Energy -1.5 2.0 1.6 8.7 6.4' -7.6' -l.CK -1.4' -.6 .0 -1.4 794.2 16 Other -11.2 -1.2 19.2 2.9 -S.O' -15.7' -.4 -2.9 -2.8 1.5 2.0 243.8 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds, rental-equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • June 1983 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1982 1983 AAccccoouunntt 11998800 11998811 11998822 Ql Q2 Q3 Q4 Ql' GROSS NATIONAL PRODUCT 1 Total 2,633.1 2,937.7 3,059.3 2,995.5 3,045.2 3,088.2 3,108.2 3,170.9 By source 2 Personal consumption expenditures 1,667.2 1,843.2 1,971.1 1,919.4 1,947.8 1,986.3 2,030.8 2,054.2 3 Durable goods 214.3 234.6 242.7 237.9 240.7 240.3 251.8 257.3 4 Nondurable goods 670.4 734.5 762.1 749.1 755.0 768.4 775.7 776.8 5 Services 782.5 874.1 966.3 932.4 952.1 977.6 1,003.3 1,020.0 6 Gross private domestic investment 402.4 471.5 420.3 414.8 431.5 443.3 391.5 421.3 7 Fixed investment 412.4 451.1 444.1 450.4 447.7 438.6 439.9 458.6 8 Nonresidential 309.2 346.1 348.0 357.0 352.2 344.2 338.4 338.1 9 Structures 110.5 129.7 141.5 141.4 143.6 141.3 139.6 137.4 10 Producers' durable equipment 198.6 216.4 206.5 215.6 208.6 203.0 198.8 200.7 11 Residential structures 103.2 105.0 96.2 93.4 95.5 94.3 101.4 120.5 12 Nonfarm 98.3 99.7 90.5 87.9 89.6 88.7 95.7 114.8 13 Change in business inventories -10.0 20.5 -23.8 -35.6 -16.2 4.7 -48.3 -37.3 14 Nonfarm -5.7 15.0 -24.3 -36.0 -15.0 3.7 -50.0 -36.6 15 Net exports of goods and services 25.2 26.1 20.5 31.3 34.9 6.9 9.1 19.0 16 Exports 339.2 367.3 350.8 359.9 365.8 349.5 328.1 331.9 17 Imports 314.0 341.3 330.3 328.6 330.9 342.5 319.1 312.9 18 Government purchases of goods and services 538.4 596.9 647.4 630.1 630.9 651.7 676.8 676.4 19 Federal 197.2 229.0 257.9 249.7 244.3 259.0 278.7 274.0 20 State and local 341.2 368.0 389.4 380.4 386.6 392.7 398.0 402.5 By major type of product 21 Final sales, total 2,643.1 2,917.3 3,083.1 3,031.1 3,061.4 3,083.5 3,156.5 3,208.2 22 Goods 1,141.9 1,289.2 1,280.4 1,269.4 1,283.1 1,295.5 1,273.6 1,298.9 23 Durable 477.3 528.1 493.3 482.4 505.9 516.9 467.9 482.3 24 Nondurable 664.6 761.1 787.1 787.0 777.2 778.6 805.7 816.6 25 Services 1,225.6 1,364.3 1,494.4 1,444.4 1,476.7 1,509.5 1,547.0 1,567.6 26 Structures 265.7 284.2 284.5 281.7 285.3 283.2 287.7 304.5 27 Change in business inventories -10.0 20.5 -23.8 -35.6 -16.2 4.7 -48.3 -37.3 28 Durable goods -5.2 8.7 -18.9 -30.9 -6.6 10.1 -48.3 -36.3 29 Nondurable goods -4.8 11.8 -5.0 -4.8 -9.6 -5.4 .0 -1.0 30 MEMO: Total GNP in 1972 dollars 1,474.0 1,502.6 1,476.9 1,470.7 1,478.4 1,481.1 1,477.2 1,486.2 NATIONAL INCOME 31 Total 2,117.1 2,352.5 2,436.6 2,396.9 2,425.2 2,455.6 2,468.8 2,523.9 32 Compensation of employees 1,598.6 1,767.6 1,856.5 1,830.8 1,850.7 1,868.3 1,876.1 1,908.4 33 Wages and salaries 1,356.1 1,494.0 1,560.6 1,541.5 1,556.6 1,570.0 1,574.5 1,597.6 34 Government and government enterprises 260.2 283.1 302.3 296.3 300.0 303.5 309.2 313.2 35 Other 1,095.9 1,210.9 1,258.4 1,245.2 1,256.6 1,266.4 1,265.4 1,284.5 36 Supplement to wages and salaries 242.5 273.6 295.8 289.3 294.1 298.3 301.6 310.8 37 Employer contributions for social insurance 115.3 133.2 142.1 140.2 141.7 142.8 143.7 150.1 38 Other labor income 127.3 140.4 153.8 149.1 152.5 155.5 157.9 160.6 39 Proprietors' income1 116.3 124.7 120.3 116.4 117.3 118.4 128.9 128.4 4 4 0 1 B Fa u r s m in 1 e ss and professional1 9 1 6 9 . . 9 4 1 2 0 4 0. . 7 0 10 1 1 9 . . 3 0 9 1 8 7 . . 6 8 9 1 9 7 . . 9 4 10 1 1 6 . . 7 6 1 2 0 4 4 . . 1 8 10 1 9 8 . . 9 6 42 Rental income of persons2 32.9 33.9 34.1 33.9 34.2 34.6 33.9 35.3 43 Corporate profits1 181.6 190.6 160.8 157.1 155.4 166.2 164.6 185.4 44 Profits before tax3 242.5 232.1 174.9 171.6 171.7 180.3 175.9 178.3 45 Inventory valuation adjustment -43.0 -24.6 -9.2 -4.4 -9.4 -10.3 -12.6 -.7 46 Capital consumption adjustment -17.8 -16.8 -4.9 -10.1 -6.9 -3.8 1.3 7.8 47 Net interest 187.7 235.7 264.9 258.7 267.5 268.1 265.3 266.4 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 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. 1982 1983 AAccccoouunntt 11998800 11998811 11998822 Q1 Q2 Q3 Q4 QL' PERSONAL INCOME AND SAVING 1 Total personal income 2,160.2 2,404.1 2,569.9 2,510.5 2,552.7 2,592.5 2,624.0 2,648.2 2 Wage and salary disbursements 1,356.1 1,493.9 1,560.7 1,541.6 1,556.6 1,570.0 1,574.5 1,597.6 3 Commodity-producing industries 468.0 510.8 509.9 514.3 513.6 510.2 501.6 509.8 4 Manufacturing 354.4 386.4 382.6 385.1 385.6 383.8 375.8 383.0 5 Distributive industries 330.5 361.4 376.0 371.4 375.4 378.4 378.8 381.3 6 Service industries 297.5 338.6 372.5 359.5 367.6 377.8 385.0 393.3 7 Government and government enterprises 260.2 283.1 302.3 296.5 300.0 303.5 309.2 313.2 8 Other labor income 127.3 140.4 153.8 149.1 152.5 155.5 157.9 160.6 9 Proprietors' income1 116.3 124.7 120.3 116.4 117.3 118.4 128.9 128.4 10 Business and professional1 96.9 100.7 101.3 98.6 99.9 101.7 104.8 109.9 11 Farm1 19.4 24.0 19.0 17.8 17.4 16.6 24.1 18.6 12 Rental income of persons2 32.9 33.9 34.1 33.9 34.2 34.6 33.9 35.3 13 Dividends 55.9 62.5 67.0 65.8 66.1 67.2 68.8 69.8 14 Personal interest income 256.3 308.5 371.2 359.7 372.0 378.2 374.6 377.1 15 Transfer payments ...; 297.2 336.3 374.7 354.6 365.2 381.0 397.8 395.8 16 Old-age survivors, disability, and health insurance benefits.... 154.2 182.0 204.5 194.7 197.5 209.2 216.6 217.1 17 LESS: Personal contributions for social insurance 88.7 104.9 111.7 110.6 111.4 112.4 112.5 116.4 18 EQUALS: Personal income 2,160.2 2,404.1 2,569.9 2,510.5 2,552.7 2,592.5 2,624.0 2,648.2 19 LESS: Personal tax and nontax payments 336.2 386.7 397.2 393.4 401.2 394.4 399.7 401.0 20 EQUALS: Disposable personal income 1,824.1 2,029.2 2,172.7 2,117.1 2,151.5 2,198.1 2,224.3 2,247.2 21 LESS: Personal outlays 1,717.9 1,898.9 2,030.5 1,977.9 2,007.2 2,046.1 2,090.9 2,115.3 22 EQUALS: Personal saving 106.2 130.2 142.2 139.1 144.3 152.0 133.4 131.9 MEMO: Per capita (1972 dollars) 23 Gross national product 6,474 6,536 6,364 6,360 6,380 66,,337766 66,,334422 66,,336655 24 Personal consumption expenditures 4,087 4,122 4,123 4,104 4,121 4,117 4,151 4,168 25 Disposable personal income 4,472 4,538 4,545 4,527 4,552 4,555 4,547 4,559 26 Saving rate (percent) 5.8 6.4 6.5 6.6 6.7 6.9 6.0 5.9 GROSS SAVING 27 Gross saving 406.3 477.5 414.0 428.8 441.5 422.4 363.3 412.3 28 Gross private saving 438.3 504.7 531.4 520.3 529.0 546.1 531.1 544.0 29 Personal saving 106.2 130.2 142.2 139.1 144.3 152.0 133.4 131.9 30 Undistributed corporate profits' 38.9 44.4 32.8 32.5 30.7 34.8 34.2 46.1 31 Corporate inventory valuation adjustment -43.0 -24.6 -9.2 -4.4 -9.4 -10.3 -12.6 -.7 Capital consumption allowances 181.2 206.2 225.1 218.9 222233..44 222277..55 223300..66 223322..11 33 Noncorporate 112.0 123.9 131.3 129.8 130.5 131.9 132.9 134.0 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and -33.2 -28.2 -117.4 -90.7 -87.5 --112233..77 --116677..77 --113311..77 36 Federal -61.4 -60.0 -149.5 -118.4 -119.6 -156.0 -204.2 -173.9 37 State and local 28.2 31.7 32.1 27.7 32.1 32.3 36.4 42.2 38 Capital grants received by the United States, net 1.2 1.1 .0 .0 .0 .0 .0 .0 39 Gross investment 410.1 475.6 415.7 421.3 442.3 426.0 373.1 416.2 40 Gross private domestic 402.4 471.5 420.3 414.8 431.5 443.3 391.5 421.3 41 Net foreign 7.8 4.1 -4.6 6.5 10.8 -17.3 -18.5 -5.1 42 Statistical discrepancy 3.9 -1.9 1.7 -7.5 .8 3.6 9.7 3.9 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 • June 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 11998800 11998811 11998822 Q4 Ql Q2 Q3 Q4 1 Balance on current account 1,520 4,471 -8,093 --992277 1,034 22,,118888 --55,,221144 --66,,110033 11,,229933 729 22,,884411 --77,,443366 --44,,222277 3 Merchandise trade balance2 -25,338 -27,889 -36,331 -9,185 -5,938 -5,762 -12,495 -12,136 4 Merchandise exports 224,237 236,254 211,013 57,593 55,607 55,001 52,334 48,071 5 Merchandise imports -249,575 -264,143 -247,344 -66,778 -61,545 -60,763 -64,829 -60,207 6 Military transactions, net -2,472 -1,541 640 -528 167 247 201 24 7 Investment income, net3 29,910 33,037 28,720 8,529 6,867 7,694 7,082 7,076 8 Other service transactions, net 6,203 7,471 6,746 2,127 1,986 1,749 1,647 1,364 9 Remittances, pensions, and other transfers -2,101 -2,104 -2,455 -562 -575 -671 -601 -608 10 U.S. government grants (excluding military) -4,681 -4,504 -5,413 -1,308 -1,473 -1,069 -1,048 -1,823 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,126 -5,137 -5,766 -987 -904 -1,547 -2,496 -818 12 Change in U.S. official reserve assets (increase, -) -8,155 -5,175 -4,965 262 -1,089 -1,132 -794 -1,949 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -16 -1,824 -1,371 -134 -400 -241 -434 -297 15 Reserve position in International Monetary Fund -1,667 -2,491 -2,552 -358 -547 -814 -459 -732 16 Foreign currencies -6,472 -861 -1,041 754 -142 -77 99 -920 17 Change in U.S. private assets abroad (increase, -)3 -72,746 -98,982 -107,535 -46,952 -29,264 -35,166 -22,307 -20,800 18 Bank-reported claims -46,838 -84,531 -106,711 -42,645 -32,708 -36,923 -20,430 -16,650 19 Nonbank-reported claims -3,146 -331 4,750 -508 4,112 -304 942 n.a. 20 U.S. purchase of foreign securities, net -3,524 -5,429 -7,772 -2,843 -531 -441 -3,266 -3,535 21 U.S. direct investments abroad, net3 -19,238 -8,691 2,198 -956 -137 2,502 447 -615 22 Change in foreign official assets in the United States (increase, +) 15,442 4,785 3,043 8,119 -3,122 1,998 2,494 1,673 23 U.S. Treasury securities 9,708 4,983 5,716 4,439 -1,344 -2,076 4,825 4,311 24 Other U.S. government obligations 2,187 1,289 -670 -246 -296 258 -76 -556 25 Other U.S. government liabilities4 561 -69 -12 275 -182 387 -286 69 26 Other U.S. liabilities reported by U.S. banks -159 -4,083 -1,713 3,436 -1,516 3,393 -1,981 -1,609 27 Other foreign official assets3 3,145 2,665 -278 215 216 36 12 -542 28 Change in foreign private assets in the United States (increase, +)3 39,041 73,136 81,451 30,988 28,202 27,621 14,178 11,451 29 U.S. bank-reported liabilities 10,743 41,262 62,869 20,476 25,423 22,552 10,687 4,207 30 U.S. nonbank-reported liabilities 6,530 532 -3,760 -457 -982 -2,304 -474 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,645 2,932 6,945 1,238 1,277 2,095 1,316 2,257 32 Foreign purchases of other U.S. securities, net 5,457 7,109 5,973 396 1,319 2,497 220 1,938 33 Foreign direct investments in the United States, net3 13,666 21,301 9,424 9,336 1,165 2,781 2,429 3,049 34 Allocation of SDRs 1,152 1,093 0 0 0 0 0 0 35 Discrepancy 28,870 25,809 41,864 9,497 5,142 6,038 14,139 16,546 2,474 -802 672 -1,904 2,035 37 Statistical discrepancy in recorded data before seasonal adjustment 28,870 25,809 41,864 7,023 5,944 5,366 16,043 14,511 MEMO: Changes in official assets 38 U.S. official reserve assets (increase, -) -8,155 -5,175 -4,965 262 -1,089 -1,132 -794 -1,949 39 Foreign official assets in the United States (increase, +) 14,881 4,854 3,055 7,844 -2,940 1,611 2,780 1,604 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 12,769 13,314 7,176 2,230 4,988 3,079 350 -1,241 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 631 602 514 64 93 125 137 158 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 1983 IItteemm 11998800 11998811 11998822 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 220,626 233,677 212,193 16,671 15,852 16,347 17,393 16,326 16,752 16,074 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 244,871 261,305 243,952 21,006 18,892 19,154 20,021 19,015 19,525 19,771 3 Trade balance -24,245 -27,628 -31,759 -4,335 -3,041 -2,808 -2,628 -2,689 -2,774 -3,697 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Total 18,956 26,756 30,075 34,006 33,958 33,936 34,233 34,261 34,173 33,931 2 Gold stock, including Exchange Stabilization Fund1 11,172 11,160 11,151 11,148 11,148 11,144 11,139 11,138 11,132 11,132 3 Special drawing rights2,3 2,724 2,610 4,095 4,929 5,250 5,267 5,284 5,229 5,192 5,525 4 Reserve position in International Monetary Fund2 1,253 2,852 5,055 7,185 7,348 8,035 8,594 9,293 9,284 9,424 5 Foreign currencies4,5 3,807 10,134 9,774 10,744 10,212 9,490 9,216 8,601 8,565 7,850 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. Gold stock is valued at $42.22 per fine troy ounce. 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. 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 in 1979 and 1980. 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Deposits 429 411 505 386 328 366 352 424 322 445 Assets held in custody 2 U.S. Treasury securities' 95,075 102,417 104,680 107,467 112,544 115,872 116,428 114,999 114,880 115,401 3 Earmarked gold2 15,169 14,965 14,804 14,711 14,716 14,717 14,752 14,726 14,723 14,727 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 interna- 2. Earmarked gold is valued at $42.22 per fine troy ounce. tional 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 • June 1983 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1982 1983 AAsssseett aaccccoouunntt 11997799 Sept. Oct. Nov. Dec. Jan/ Feb. Mar.P All foreign countries 1 Total, all currencies 364,409 401,135 462,790 471,085 463,601 468,376 468,740 462,435 457,848 465,254 2 Claims on United States 32,302 28,460 63,743 90,267 89,036 90,844 91,752 89,249 87,567 93,830 3 Parent bank 25,929 20,202 43,267 60,872 61,283 62,476 61,629 59,247 58,470 63,398 4 Other 6,373 8,258 20,476 29,395 27,753 28,368 30,123 30,002 29,097 30,432 5 Claims on foreigners 317,330 354,960 378,899 360,462 354,373 357,104 357,5% 353,675 351,015 352,427 6 Other branches of parent bank 79,662 77,019 87,821 93,283 90,030 91,894 91,067 89,470 89,715 89,099 7 Banks 123,420 146,448 150,708 135,454 133,365 133,269 133,300 130,%5 129,067 132,279 8 Public borrowers 26,097 28,033 28,197 24,333 23,850 23,340 23,968 24,464 24,585 24,547 9 Nonbank foreigners 88,151 103,460 112,173 107,392 107,128 108,601 109,261 108,776 107,648 106,502 10 Other assets 14,777 17,715 20,148 20,356 20,192 20,428 19,392 19,511 19,266 18,997 11 Total payable in U.S. dollars 267,713 291,798 350,678 369,746 361,804 363,483 361,169 355,165 350,314 356,613 12 Claims on United States 31,171 27,191 62,142 88,613 87,316 88,971 90,032 87,555 85,941 91,391 13 Parent bank 25,632 19,896 42,721 60,207 60,538 61,662 60,973 58,479 57,767 62,463 14 Other 5,539 7,295 19,421 28,406 26,778 27,309 29,059 29,076 28,174 28,928 15 Claims on foreigners 229,120 255,391 276,882 268,253 261,896 261,701 259,127 255,788 252,752 253,618 16 Other branches of parent bank 61,525 58,541 69,398 77,470 74,032 74,759 73,463 71,174 71,885 70,782 17 Banks 96,261 117,342 122,055 110,591 107,448 106,636 106,001 103,538 100,697 103,609 18 Public borrowers 21,629 23,491 22,877 18,984 18,659 18,187 18,303 18,717 18,891 18,694 19 Nonbank foreigners 49,705 56,017 62,552 61,208 61,757 62,119 61,360 62,359 61,279 60,533 20 Other assets 7,422 9,216 11,654 12,880 12,592 12,811 12,010 11,822 11,621 11,604 United Kingdom 21 Total, all currencies 130,873 144,717 157,229 167,189 164,582 165,687 1(1,067 157,464 156,577 156,022 22 Claims on United States 11,117 7,509 11,823 27,534 27,829 28,677 27,354 27,175 26,423 26,259 23 Parent bank 9,338 5,275 7,885 22,970 23,717 24,278 23,017 22,539 21,962 21,912 24 Other 1,779 2,234 3,938 4,564 4,112 4,399 4,337 4,636 4,461 4,347 25 Claims on foreigners 115,123 131,142 138,888 132,746 129,913 130,666 127,734 124,354 124,214 123,993 26 Other branches of parent bank 34,291 34,760 41,367 40,385 37,013 38,319 37,000 34,959 35,437 36,171 27 Banks 51,343 58,741 56,315 52,203 52,568 51,414 50,767 49,497 48,580 48,976 28 Public borrowers 4,919 6,688 7,490 6,086 6,157 6,170 6,240 6,421 6,592 6,337 29 Nonbank foreigners 24,570 30,953 33,716 34,072 34,175 34,763 33,727 33,477 33,605 32,509 30 Other assets 4,633 6,066 6,518 6,909 6,840 6,344 5,979 5,935 5,940 5,770 31 Total payable in U.S. dollars 94,287 99,699 115,188 131,129 127,517 128,863 123,740 120,Z33 119,273 118,891 32 Claims on United States 10,746 7,116 11,246 26,919 27,255 28,093 26,761 26,581 25,829 25,597 33 Parent bank 9,297 5,229 7,721 22,758 23,478 24,035 22,756 22,250 21,700 21,626 34 Other 1,449 1,887 3,525 4,161 3,777 4,058 4,005 4,331 4,129 3,971 35 Claims on foreigners 81,294 89,723 99,850 99,008 95,269 95,870 92,228 89,137 88,973 88,797 36 Other branches of parent bank 28,928 28,268 35,439 35,703 32,243 33,154 31,648 29,380 29,918 30,589 37 Banks 36,760 42,073 40,703 39,786 39,077 38,310 36,717 35,616 34,499 34,442 38 Public borrowers 3,319 4,911 5,595 4,214 4,251 4,281 4,329 4,600 4,789 4,413 39 Nonbank foreigners 12,287 14,471 18,113 19,305 19,698 20,125 19,534 19,541 19,767 19,353 40 Other assets 2,247 2,860 4,092 5,202 4,993 4,900 4,751 4,515 4,471 4,497 Bahamas and Caymans 41 Total, all currencies 108,977 123,837 149,051 140,614 139,438 140,939 144,843 142,718 138,676 145,663 42 Claims on United States 19,124 17,751 46,546 55,467 55,713 57,076 59,387 56,855 56,205 62,686 43 Parent bank 15,196 12,631 31,643 32,155 32,927 34,022 34,653 32,511 32,819 38,021 44 Other 3,928 5,120 14,903 23,312 22,786 23,054 24,734 24,344 23,386 24,665 45 Claims on foreigners 86,718 101,926 98,002 81,054 79,539 79,185 81,157 81,773 78,494 79,040 46 Other branches of parent bank 9,689 13,342 12,951 17,772 17,955 18,066 18,720 20,118 19,730 17,512 47 Banks 43,189 54,861 55,096 41,333 40,439 41,025 42,406 40,732 39,068 42,288 48 Public borrowers 12,905 12,577 10,010 6,999 6,743 6,310 6,413 6,434 6,494 6,540 49 Nonbank foreigners 20,935 21,146 19,945 14,950 14,402 13,784 13,618 14,489 13,202 12,700 50 Other assets 3,135 4,160 4,503 4,093 4,186 4,678 4,299 4,089 3,977 3,937 51 Total payable in U.S. dollars 102,368 117,654 143,686 136,077 134,607 135,648 139,292 136,881 132,830 139,549 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.14 Continued 1982 1983 LLiiaabbiilliittyy aaccccoouunntt 11998811 Sept. Oct. Nov. Dec. Jan/ Feb. Mar.P All foreign countries 52 Total, all currencies 364,409 401,135 462,790 471,085 463,601 468,376 468,740 462,435 457,848 465,254 53 To United States 66,689 91,079 137,712 172,994 169,312 171,762 178,449 178,434 176,071 185,154 54 Parent bank 24,533 39,286 56,289 69,592 64,102 66,254 75,118 79,950 77,301 81,209 55 Other banks in United States 13,968 14,473 19,197 33,763 32,607 31,764 33,353 32,784 32,643 33,930 56 Nonbanks 28,188 37,275 62,226 69,639 72,603 73,744 69,978 65,700 66,127 70,015 57 To foreigners 283,510 295,411 305,630 277,886 274,222 276,287 270,494 265,591 263,523 262,320 58 Other branches of parent bank 77,640 75,773 86,396 91,189 91,658 91,270 90,079 89,293 90,384 91,349 59 Banks 122,922 132,116 124,906 99,966 98,259 98,209 96,677 92,857 90,218 91,786 60 Official institutions 35,668 32,473 25,997 20,527 19,440 21,095 19,614 20,250 19,742 17,812 61 Nonbank foreigners 47,280 55,049 68,331 66,204 64,865 65,713 64,124 63,491 63,179 61,373 62 Other liabilities 14,210 14,690 19,448 20,205 20,067 20,327 19,797 18,410 18,254 17,780 63 Total payable in U.S. dollars 273,857 303,281 364,390 385,440 377,121 379,142 378,457 370,618 367,352 374,620 64 To United States 64,530 88,157 134,645 170,098 166,377 168,291 174,966 174,813 172,402 181,666 65 Parent bank 23,403 37,528 54,437 67,678 62,191 63,963 72,7% 77,682 74,972 78,908 66 Other banks in United States 13,771 14,203 18,883 33,508 32,362 31,428 32,988 32,260 32,216 33,490 67 Nonbanks 27,356 36,426 61,325 68,912 71,824 72,900 69,182 64,871 65,214 69,268 68 To foreigners 201,514 206,883 217,602 203,989 199,297 198,938 192,271 185,667 185,570 183,553 69 Other branches of parent bank 60,551 58,172 69,299 75,935 76,237 74,621 72,848 71,442 72,753 73,495 70 Banks 80,691 87,497 79,594 62,535 59,782 58,829 57,355 52,258 51,267 52,217 71 Official institutions 29,048 24,697 20,288 16,607 15,253 16,774 15,055 15,940 15,381 13,536 72 Nonbank foreigners 31,224 36,517 48,421 48,912 48,025 48,714 47,013 46,027 46,169 44,305 73 Other liabilities 7,813 8,241 12,143 11,353 11,447 11,913 11,220 10,138 9,380 9,401 United Kingdom 74 Total, all currencies 130,873 144,717 157,229 167,189 164,582 165,687 161,067 157,464 156,577 156,022 75 To United States 20,986 21,785 38,022 53,919 53,777 54,003 53,954 52,650 51,927 55,309 76 Parent bank 3,104 4,225 5,444 11,336 10,568 10,597 13,091 14,287 14,080 14,616 77 Other banks in United States 7,693 5,716 7,502 13,280 12,567 12,374 12,205 12,343 12,198 13,172 78 Nonbanks 10,189 11,844 25,076 29,303 30,642 31,032 28,658 26,020 25,649 27,521 79 To foreigners 104,032 117,438 112,255 104,967 102,611 103,927 99,567 97,827 97,515 93,835 80 Other branches of parent bank 12,567 15,384 16,545 19,123 18,399 19,372 18,361 19,343 21,008 19,653 81 Banks 47,620 56,262 51,336 45,526 45,601 44,266 44,020 41,073 39,892 40,867 82 Official institutions 24,202 21,412 16,517 12,348 11,379 12,940 11,504 12,377 12,025 10,252 83 Nonbank foreigners 19,643 24,380 27,857 27,970 27,232 27,349 25,682 25,034 24,590 23,063 84 Other liabilities 5,855 5,494 6,952 8,303 8,194 7,757 7,546 6,987 7,135 6,878 85 Total payable in U.S. dollars 95,449 103,440 120,277 137,268 133,591 135,188 130,261 126,286 126,007 126,088 86 To United States 20,552 21,080 37,332 53,262 53,146 53,056 53,029 51,808 50,977 54,520 87 Parent bank 3,054 4,078 5,350 11,223 10,442 10,306 12,814 14,105 13,859 14,476 88 Other banks in United States 7,651 5,626 7,249 13,142 12,472 12,188 12,026 12,128 12,041 12,987 89 Nonbanks 9,847 11,376 24,733 28,897 30,232 30,562 28,189 25,575 25,077 27,057 90 To foreigners 72,397 79,636 79,034 80,025 76,519 77,982 73,477 71,000 71,994 68,309 91 Other branches of parent bank 8,446 10,474 12,048 15,548 14,614 15,310 14,300 15,081 16,709 14,918 92 Banks 29,424 35,388 32,298 31,187 30,404 29,092 28,810 25,177 25,563 26,395 93 Official institutions 20,192 17,024 13,612 11,012 9,806 11,198 9,668 10,657 10,121 8,419 94 Nonbank foreigners 14,335 16,750 21,076 22,278 21,695 22,382 20,699 20,085 19,601 18,577 95 Other liabilities 2,500 2,724 3,911 3,981 3,926 4,150 3,755 3,478 3,036 3,259 Bahamas and Caymans 96 Total, all currencies 108,977 123,837 149,051 140,614 139,438 140,939 144,843 142,718 138,676 145,663 97 To United States 37,719 59,666 85,704 99,500 96,810 98,475 104,139 104,572 102,466 107,576 98 Parent bank 15,267 28,181 39,396 44,370 40,225 41,900 46,811 50,622 47,587 51,636 99 Other banks in United States 5,204 7,379 10,474 17,927 17,481 16,805 18,461 17,554 17,321 17,300 100 Nonbanks 17,248 24,106 35,834 37,203 39,104 39,770 38,867 36,396 37,558 38,640 101 To foreigners 68,598 61,218 60,012 38,401 39,793 39,603 38,249 35,900 33,859 35,878 102 Other branches of parent bank 20,875 17,040 20,641 15,126 17,421 17,566 15,796 14,688 13,809 16,055 103 Banks 33,631 29,895 23,202 10,910 10,297 10,413 10,166 9,279 8,451 9,027 104 Official institutions 4,866 4,361 3,498 2,091 2,137 1,846 1,967 1,849 1,720 1,678 105 Nonbank foreigners 9,226 9,922 12,671 10,274 9,938 9,778 10,320 10,084 9,879 9,118 106 Other liabilities 2,660 2,953 3,335 2,713 2,835 2,861 2,455 2,246 2,351 2,209 107 Total payable in U.S. dollars 103,460 119,657 145,227 137,717 136,574 137,828 141,595 139,305 135,323 142,465 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • June 1983 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1982 1983 IItteemm 11998800 11998811rr Oct. Nov. Dec. Jan. Feb. Mar.P Apr.? 1 Total1 164,578 170,109 171,406 168,025 172,780 175,163 172,915 173,119 173,414 By type 2 Liabilities reported by banks in the United States2 30,381 26,928 27,056 25,338 24,873 23,842 21,422 22,980 22,693 3 U.S. Treasury bills and certificates3 56,243 52,389 43,964 42,906 46,658 50,432 49,954 47,917 48,399 U.S. Treasury bonds and notes 4 Marketable 41,455 53,186 65,619 65,850 67,715 67,735 69,303 70,250 70,558 5 Nonmarketable4 14,654 11,791 9,350 8,750 8,750 8,750 7,950 7,950 7,950 6 U.S. securities other than U.S. Treasury securities5 21,845 25,815 25,417 25,181 24,784 24,404 24,286 24,022 23,814 By area 7 Western Europe1 81,592 65,891 60,846 59,447 61,501 62,525 62,103 61,734 62,169 8 Canada 1,562 2,403 2,204 2,044 2,070 2,430 2,754 2,942 2,770 9 Latin America and Caribbean 5,688 6,954 7,231 5,900 6,028 7,138 6,100 5,578 6,161 10 Asia 70,784 91,790 95,110 93,960 95,922 95,278 95,677 96,789 95,331 11 Africa 4,123 1,829 1,452 1,371 1,350 1,716 1,327 1,162 1,208 12 Other countries6 829 1,242 4,563 5,303 5,909 6,076 4,954 4,914 5,775 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 1982 1983 IItteemm 11997799 11998800 11998811 June Sept. Dec. Mar.P 1 Banks' own liabilities 1,918 3,748 3,523 4,513 4,575 4,751 5,072 2 Banks' own claims 2,419 4,206 4,980 5,895 6,337 7,689 8,101 3 Deposits 994 2,507 3,398 3,565 3,429 4,241 3,725 4 Other claims 1,425 1,699 1,582 2,329 2,908 3,448 4,376 5 Claims of banks' domestic customers1 580 962 971 921 506 676 637 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 1983 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11997799 11998800 11998811AA Oct. Nov. Dec. Jan. Feb. Mar. Apr.'' 1 All foreigners 187,521 205,297 244,043 300,811 302,776 305,320 304,779 304,653' 316,117 308,936 2 Banks' own liabilities 117,196 124,791 163,738 221,055 226,068 225,379 219,361 219,666' 234,317 226,019 3 Demand deposits 23,303 23,462 19,628 17,059 17,148 16,017 16,089 17,423 16,495 15,695 4 Time deposits1 13,623 15,076 28,992 62,172 62,718 67,072 64,347 65,273 68,491 67,303 5 Other2 16,453 17,583 17,617 22,930 24,414 23,791 22,918 20,295 24,566 21,882 6 Own foreign offices3 63,817 68,670 97,500 118,894 121,788 118,499 116,006 116,676' 124,765 121,139 7 Banks' custody liabilities4 70,325 80,506 80,305 79,756 76,708 79,941 85,419 84,987 81,800 82,917 8 U.S. Treasury bills and certificates5 48,573 57,595 55,316 53,374 52,138 55,614 62,137 61,904 58,747 60,087 9 Other negotiable and readily transferable instruments6 19,396 20,079 19,019 22,668 20,965 20,625 19,352 19,205 18,831 18,799 10 Other 2,356 2,832 5,970 3,715 3,605 3,702 3,930 3,877 4,222 4,031 11 Nonmonetary international and regional organizations7 2,356 2,344 2,721 6,036 6,465 4,597 6,611 5,969 3,949 5,917 12 Banks' own liabilities 714 444 638 2,337 3,387 1,584 1,787 1,695 1,304 2,542 13 Demand deposits 260 146 262 261 257 106 284 195 221 252 14 Time deposits1 151 85 58 431 969 1,339 1,333 1,367 917 2,031 15 Other2 303 212 318 1,645 2,161 139 170 134 166 259 16 Banks' custody liabilities4 1,643 1,900 2,083 3,699 3,078 3,013 4,824 4,275 2,645 3,375 17 U.S. Treasury bills and certificates 102 254 541 2,160 1,774 1,621 3,603 3,153 1,501 2,230 18 Other negotiable and readily transferable instruments6 1,538 1,646 1,542 1,539 1,304 1,392 1,221 1,122 1,144 1,145 19 Other 2 0 0 0 0 0 0 0 0 0 20 Official institutions8 78,206 86,624 79,318 71,021 68,244 71,531 74,274 71,377 70,897 71,092 21 Banks' own liabilities 18,292 17,826 17,094 16,989 16,638 16,526 16,411 14,620 16,443 16,060 22 Demand deposits 4,671 3,771 2,564 2,138 2,074 1,981 2,168 2,063 2,287 2,322 23 Time deposits1 3,050 3,612 4,230 6,132 5,539 5,489 4,907 5,481 5,331 6,031 24 Other2 10,571 10,443 10,300 8,720 9,025 9,057 9,336 7,076 8,825 7,706 25 Banks' custody liabilities4 59,914 68,798 62,224 54,031 51,607 55,006 57,864 56,756 54,454 55,032 26 U.S. Treasury bills and certificates5 47,666 56,243 52,389 43,964 42,906 46,658 50,432 49,954 47,917 48,399 27 Other negotiable and readily transferable instruments6 12,196 12,501 9,787 10,033 8,672 8,319 7,396 6,769 6,512 6,618 28 Other 52 54 47 34 28 28 35 33 25 15 29 Banks9 88,316 96,415 136,030 182,766 185,679 185,097 178,460 180,891' 192,698 183,610 30 Banks' own liabilities 83,299 90,456 124,312 166,268 169,412 168,679 161,637 162,878' 174,321 165,157 31 Unaffiliated foreign banks 19,482 21,786 26,812 47,374 47,624 50,179 45,631 46,202 49,556 44,019 32 Demand deposits 13,285 14,188 11,614 9,882 9,724 8,733 8,186 9,627 8,264 7,691 33 Time deposits1 1,667 1,703 8,735 26,026 26,035 28,267 25,556 25,297 27,613 24,233 34 Other2 4,530 5,895 6,462 11,466 11,865 13,179 11,889 11,278 13,679 12,095 35 Own foreign offices3 63,817 68,670 97,500 118,894 121,788 118,499 116,006 116,676' 124,765 121,139 36 Banks' custody liabilities4 5,017 5,959 11,718 16,498 16,267 16,419 16,822 18,012 18,377 18,453 37 U.S. Treasury bills and certificates 422 623 1,687 5,634 5,792 5,809 6,292 6,791 7,122 7,475 38 Other negotiable and readily transferable instruments6 2,415 2,748 4,421 8,061 7,782 7,844 7,698 8,345 8,266 8,041 39 Other 2,179 2,588 5,611 2,803 2,693 2,766 2,833 2,876 2,990 2,937 40 Other foreigners 18,642 19,914 25,974 40,989 42,388 44,095 45,434 46,416 48,573 48,316 41 Banks' own liabilities 14,891 16,065 21,694 35,461 36,631 38,591 39,526 40,473 42,249 42,260 42 Demand deposits 5,087 5,356 5,189 4,778 5,093 5,197 5,452 5,539 5,724 5,430 43 Time deposits 8,755 9,676 15,969 29,583 30,175 31,977 32,551 33,128 34,630 35,009 44 Other2 1,048 1,033 537 1,100 1,363 1,416 1,524 1,807 1,896 1,821 45 Banks' custody liabilities4 3,751 3,849 4,279 5,528 5,756 5,504 5,908 5,943 6,323 6,056 46 U.S. Treasury bills and certificates 382 474 699 1,615 1,666 1,525 1,810 2,006 2,207 1,983 47 Other negotiable and readily transferable instruments6 3,247 3,185 3,268 3,035 3,207 3,070 3,037 2,970 2,909 2,995 48 Other 123 190 312 878 884 908 1,062 968 1,207 1,078 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,984 10,745 10,747 15,029 14,408 14,296 13,367 11,611 11,383 11,603 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 • June 1983 3.17 Continued 1982 1983 AArreeaa aanndd ccoouunnttrryy 11997799 11998800 11998811AA Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total 187,521 205,297 244,043 300,811 302,776 305,320 304,779 304,653' 316,117 308,936 2 Foreign countries 185,164 202,953 241,321 294,776 2%,311 300,723 298,168 298,683' 312,168 303,018 3 Europe 90,952 90,897 91,309 116,015 117,242 117,695 118,764 116,019 116,456 111,279 4 Austria 413 523 596 508 441 512 467 513 604 576 5 Belgium-Luxembourg 2,375 4,019 4,117 2,782 2,499 2,517 2,270 2,295 2,726 2,800 6 Denmark 1,092 497 333 166 221 509 996 1,197 765 849 1 Finland 398 455 296 478 572 748 473 369 408 437 8 France 10,433 12,125 8,486 7,358 7,065 8,169 8,462 7,723 6,780 7,098 9 Germany 12,935 9,973 7,665 5,360 6,093 5,375 5,807 6,227 6,458 3,441 10 Greece 635 670 463 516 496 537 589 595 597 671 11 Italy 7,782 7,572 7,290 5,541 4,779 5,674 4,938 4,514 4,312 5,024 12 Netherlands 2,337 2,441 2,823 3,102 3,100 3,362 3,770 3,196 3,704 3,966 13 Norway 1,267 1,344 1,457 2,026 2,197 1,567 1,476 1,407 1,061 1,566 14 Portugal 557 374 354 356 453 388 398 370 363 346 15 Spain 1,259 1,500 916 1,315 1,301 1,405 1,316 1,524 1,640 1,484 16 Sweden 2,005 1,737 1,545 1,997 1,615 1,380 1,315 1,645 1,379 1,212 17 Switzerland 17,954 16,689 18,720 27,619 27,994 28,999 28,996 30,263' 30,433 29,468 18 Turkey 120 242 518 317 255 296 190 . 251 254 231 19 United Kingdom 24,700 22,680 28,287 49,009 50,274 48,169 50,339 47,202 47,703 45,007 20 Yugoslavia 266 681 375 390 470 499 470 452 491 504 21 Other Western Europe1 4,070 6,939 6,526 6,524 6,889 6,965 6,033 5,898' 6,365 6,137 22 U.S.S.R 52 68 49 111 45 50 47 41 40 44 23 Other Eastern Europe2 302 370 493 541 486 573 412 335 374 416 24 Canada 7,379 10,031 10,250 12,163 11,719 12,217 10,990 13,618 15,159 14,695 25 Latin America and Caribbean 49,686 53,170 85,159 108,687 110,140 112,916 110,576 111,105' 119,895 118,013 26 Argentina 1,582 2,132 2,445 3,482 3,432 3,577 4,833 4,891 4,684 4,603 27 Bahamas 15,255 16,381 34,856 43,123 44,125 44,026 42,911 45,029' 48,832 49,379 28 Bermuda 430 670 765 1,507 1,596 1,572 1,989 1,903 2,124 2,137 29 Brazil 1,005 1,216 1,568 2,020 1,986 2,010 1,916 2,010 1,948 2,477 30 British West Indies 11,138 12,766 17,794 23,068 24,276 26,372 24,630 23,963 27,520 23,882 31 Chile 468 460 664 1,447 1,444 1,626 1,341 1,280 1,084 1,196 32 Colombia 2,617 3,077 2,993 2,407 22,,442266 2,593 2,384 2,336 1,887 1,825 33 Cuba 13 6 9 7 88 9 10 10 9 12 34 Ecuador 425 371 434 556 519 453 472 499 575 534 35 Guatemala 414 367 479 636 639 670 682 669 675 666 36 Jamaica 76 97 87 118 108 126 115 103 134 107 37 Mexico 4,185 4,547 7,170 8,031 8,047 7,967 7,930 7,380 8,118 8,353 38 Netherlands Antilles 499 413 3,182 3,677 3,518 3,597 3,762 3,474 3,416 3,426 39 Panama 4,483 4,718 4,857 4,770 4,798 4,738 4,923 4,983 5,617 5,428 40 Peru 383 403 694 1,031 959 1,147 1,052 903 927 1,158 41 Uruguay 202 254 367 844 651 759 726 817 818 852 42 Venezuela 4,192 3,170 4,245 8,796 8,315 8,382 7,649 7,671 8,146 8,585 43 Other Latin America and Caribbean 2,318 2,123 2,548 3,166 3,293 3,291 3,251 3,185 3,381 3,394 44 33,005 42,420 5500,,000055 49,803 4488,,556655 4488,,667799 48,193 4499,,661144'' 5522,,552244 5500,,220022 China 45 Mainland 49 49 158 216 214 203 220 196 208 187 46 Taiwan 1,393 1,662 2,082 2,568 2,769 2,716 3,139 3,515 3,535 3,600 47 Hong Kong 1,672 2,548 3,950 4,957 4,847 4,465 4,542 4,988 5,725 5,119 48 India 527 416 385 439 507 433 514 962 521 669 49 Indonesia 504 730 640 757 534 849 1,156 614 855 1,028 50 Israel 707 883 592 612 705 606 608 515 985 1,775 51 Japan 8,907 16,281 20,750 16,830 15,680 16,098 15,836 16,613 17,022 16,038 52 Korea 993 1,528 2,013 1,927 1,776 1,692 1,473 1,458 1,418 1,175 53 Philippines 795 919 874 736 768 770 680 787 718 712 54 Thailand 277 464 534 365 349 629 482 529 488 528 55 Middle-East oil-exporting countries3 15,300 14,453 13,174 14,053 14,396 13,433 12,332 11,672 13,155 11,755 56 Other Asia 1,879 2,487 4,854 6,344 6,020 6,784 7,210 7,764' 7,893 7,616 57 Africa 3,239 5,187 3,180 3,369 3,192 3,070 3,331 3,087 2,910 2,829 58 Egypt 475 485 360 242 373 398 500 416 533 466 59 Morocco 33 33 32 54 66 75 51 51 57 48 60 South Africa 184 288 420 279 564 277 276 317 281 299 61 Zaire 110 57 26 23 22 23 25 31 33 28 62 Oil-exporting countries4 1,635 3,540 1,395 1,669 1,250 1,280 1,603 1,333 975 1,071 63 Other Africa 804 783 946 1,103 918 1,016 877 939 1,031 916 64 Other countries 904 1,247 1,419 4,738 5,452 6,146 6,314 5,241 5,224 6,001 65 Australia 684 950 1,223 4,530 5,224 5,904 6,080 5,052 4,933 5,805 66 All other 220 297 196 207 228 243 235 190 291 195 67 Nonmonetary international and regional organizations 2,356 2,344 2,721 6,036 6,465 4,597 6,611 5,969 3,949 5,917 68 International 1,238 1,157 1,661 5,141 5,522 3,705 5,769 5,186 3,182 5,194 69 Latin American regional 806 890 710 573 533 517 527 487 478 494 70 Other regional5 313 296 350 322 410 375 316 296 289 229 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. • 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 1983 AArreeaa aanndd ccoouunnttrryy 11997799 11998800 11998811AA Oct. Nov. Dec. Jan. Feb/ Mar. Aprs 1 Total 133,943 172,592 251,082 334,783 336,551 353,733 357,333 358,695 372,551 360,138 2 Foreign countries 133,906 172,514 251,026 334,728 336,494 353,665 357,260 358,618 372,482 360,046 3 Europe 28,388 32,108 49,067 78,358 79,190 84,005 83,503 84,289 88,028 83,347 4 Austria 284 236 121 173 197 216 232 226 255 307 5 Belgium-Luxembourg 1,339 1,621 2,851 4,965 5,395 5,115 4,730 5,363 5,700 5,348 6 Denmark 147 127 187 396 406 554 609 648 1,134 1,124 7 Finland 202 460 546 813 904 990 984 957 961 844 8 France 3,322 2,958 4,124 6,219 6,627 6,863 7,204 7,367 7,216 7,222 9 Germany 1,179 948 938 1,522 1,756 1,860 1,407 1,740 1,810 1,271 10 Greece 154 256 333 335 373 452 576 632 652 628 11 Italy 1,631 3,364 5,240 7,346 7,708 7,498 7,544 7,005 7,125 7,373 1? Netherlands 514 575 682 1,285 1,122 1,428 1,470 1,356 1,629 1,247 13 Norway 276 227 384 544 650 572 625 587 544 628 14 Portugal 330 331 529 1,018 924 943 843 834 820 797 IS Spain 1,051 993 2,100 3,558 3,643 3,730 3,699 3,223 3,120 3,004 16 Sweden 542 783 1,205 2,799 2,804 3,030 3,113 2,693 2,414 2,289 17 Switzerland 1,165 1,446 2,213 1,636 1,516 1,639 1,568 1,496 1,668 2,362 18 Turkey 149 145 424 603 598 560 527 567 595 608 19 United Kingdom 13,795 14,917 23,654 41,661 40,868 44,754 44,703 45,916 48,671 44,533 20 Yugoslavia 611 853 1,224 1,248 1,261 1,418 1,382 1,399 1,393 1,432 71 Other Western Europe1 175 179 209 266 380 378 310 319 322 232 71 U.S.S.R 268 281 377 242 227 263 233 250 310 392 23 Other Eastern Europe2 1,254 1,410 1,725 1,728 1,832 1,741 1,745 1,709 1,690 1,706 24 Canada 4,143 4,810 9,164 12,982 12,500 14,216 14,865 15,583 16,477 15,069 75 Latin America and Caribbean 67,993 92,992 138,138 180,564 180,902 187,379 192,024 192,002 198,501 195,728 7.6 Argentina 4,389 5,689 7,522 11,019 10,816 10,960 11,231 11,431 11,264 11,223 77 Bahamas 18,918 29,419 43,446 51,848 52,207 56,300 58,003 56,654 59,354 57,200 78 Bermuda 496 218 346 602 957 603 582 536 506 385 29 Brazil 7,713 10,496 16,914 22,999 22,978 23,204 23,036 23,377 23,555 23,712 30 British West Indies 9,818 15,663 21,930 28,270 27,370 29,162 32,790 33,376 35,212 34,958 31 Chile 1,441 1,951 3,690 5,276 5,091 5,560 5,229 5,302 5,209 5,130 3? Colombia 1,614 1,752 2,018 2,838 2,895 3,185 3,221 3,159 3,167 3,148 33 Cuba 4 3 3 3 3 3 11 2 2 0 34 Ecuador 1,025 1,190 1,531 2,057 2,101 2,053 2,038 2,054 2,054 2,084 35 Guatemala3 134 137 124 111 140 124 129 119 84 77 36 Jamaica3 47 36 62 151 218 181 206 197 216 196 37 Mexico 9,099 12,595 22,409 29,422 29,558 29,449 29,422 30,234 31,251 31,709 38 Netherlands Antilles 248 821 1,076 685 731 814 815 906 970 1,037 39 Panama 6,041 4,974 6,779 10,286 10,516 10,133 10,040 9,296 9,797 8,951 40 Peru 652 890 1,218 2,244 2,252 2,332 2,299 2,273 2,301 2,329 41 Uruguay 105 137 157 572 609 681 687 684 707 859 47 Venezuela 4,657 5,438 7,069 9,925 10,250 10,682 10,225 10,283 10,615 10,537 43 Other Latin America and Caribbean 1,593 1,583 1,844 2,257 2,211 1,953 2,057 2,117 2,236 2,193 44 Asia 30,730 39,078 49,780 55,723 56,671 60,629 59,032 58,966 61,476 57,738 China 45 Mainland 35 195 107 139 194 210 198 195 195 238 46 Taiwan 1,821 2,469 2,461 2,020 2,255 2,285 2,223 1,975 1,860 1,786 47 Hong Kong 1,804 2,247 4,126 5,976 6,201 7,705 7,081 7,112 7,656 7,482 48 India 92 142 123 254 258 222 230 200 160 163 49 Indonesia 131 245 351 315 314 342 370 429 505 535 50 Israel 990 1,172 1,562 1,748 1,895 2,043 1,835 1,732 1,744 2,035 51 Japan 16,911 21,361 26,762 26,722 25,952 27,199 26,741 26,845 28,545 24,943 52 Korea 3,793 5,697 7,324 7,790 8,536 9,389 9,052 9,183 9,170 8,891 53 Philippines 737 989 1,817 2,560 2,467 2,555 2,444 2,599 2,628 2,627 54 Thailand 933 876 564 442 501 643 649 651 625 737 55 Middle East oil-exporting countries4 1,548 1,432 1,575 2,848 3,176 3,087 3,428 3,403 3,829 3,926 56 Other Asia 1,934 2,252 3,009 4,910 4,923 4,948 4,781 4,643 4,557 4,374 57 Africa 1,797 2,377 3,503 5,017 5,274 5,350 5,608 5,504 5,483 5,689 58 Egypt 114 151 238 365 349 322 310 277 309 291 59 Morocco 103 223 284 367 384 347 342 359 375 382 60 South Africa 445 370 1,011 1,744 1,832 2,013 2,061 2,193 2,185 2,119 61 Zaire 144 94 112 61 58 57 57 54 52 104 62 Oil-exporting countries5 391 805 657 764 903 803 914 841 844 750 63 Other 600 734 1,201 1,717 1,747 1,807 1,924 1,781 1,717 2,041 64 Other countries 855 1,150 1,376 2,083 1,957 2,086 2,228 2,274 2,519 2,475 65 Australia 673 859 1,203 1,713 1,528 1,713 1,714 1,696 1,953 1,889 66 All other 182 290 172 370 429 373 514 578 566 586 67 Nonmonetary international and regional organizations6 36 78 56 56 57 68 73 77 69 92 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 • June 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 1983 TTyyppee ooff ccllaaiimm 11997799 11998800 11998811AA Oct. Nov. Dec. Jan. Feb/ Mar. Apr.? 1 Total 111111155555554444444,,,,,,,000000033333330000000 111111199999998888888,,,,,,,666666699999998888888 222222288888887777777,,,,,,,000000055555551111111 333333399999993333333,,,,,,,666666644444442222222 444444411111110000000,,,,,,,666666600000002222222 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111133333333333333,,,,,,,999999944444443333333 111111177777772222222,,,,,,,555555599999992222222 222222255555551111111,,,,,,,000000088888882222222 334,783 336,551 333333355555553333333,,,,,,,777777733333333333333 357,333 358,695 333333377777772222222,,,,,,,555555555555551111111 360,138 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 11111115555555,,,,,,,999999933333337777777 22222220000000,,,,,,,888888888888882222222 33333331111111,,,,,,,333333300000002222222 42,429 42,296 44444444444444,,,,,,,666666600000001111111 44,360 45,423 44444446666666,,,,,,,999999933333338888888 47,512 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 44444447777777,,,,,,,444444422222228888888 66666665555555,,,,,,,000000088888884444444 99999996666666,,,,,,,666666644444447777777 117,329 118,060 111111122222227777777,,,,,,,222222277777775555555 133,589 134,460 111111144444443333333,,,,,,,666666688888884444444 135,425 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 44444440000000,,,,,,,999999922222227777777 55555550000000,,,,,,,111111166666668888888 77777774444444,,,,,,,111111133333334444444 114,464 115,123 111111111111119999999,,,,,,,333333322222227777777 116,434 117,731 111111122222221111111,,,,,,,000000000000008888888 116,633 66 DDeeppoossiittss 6666666,,,,,,,222222277777774444444 8888888,,,,,,,222222255555554444444 22222223333333,,,,,,,000000011111112222222 42,165 41,227 44444443333333,,,,,,,000000011111112222222 42,160 44,133 44444448888888,,,,,,,666666622222226666666 44,257 77 OOtthheerr 33333334444444,,,,,,,666666655555554444444 44444441111111,,,,,,,999999911111114444444 55555551111111,,,,,,,111111122222223333333 72,299 73,896 77777776666666,,,,,,,333333311111115555555 74,274 73,598 77777772222222,,,,,,,333333388888882222222 72,376 88 AAllll ootthheerr ffoorreeiiggnneerrss 22222229999999,,,,,,,666666655555550000000 33333336666666,,,,,,,444444455555559999999 44444448888888,,,,,,,999999999999999999999 60,561 61,073 66666662222222,,,,,,,555555533333330000000 62,950 61,081 66666660000000,,,,,,,999999922222221111111 60,568 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 22222220000000,,,,,,,000000088888888888888 22222226666666,,,,,,,111111100000006666666 33333335555555,,,,,,,999999966666668888888 33333339999999,,,,,,,999999900000009999999 33333338888888,,,,,,,000000055555551111111 999999955555555555555 888888888888885555555 1111111,,,,,,,333333377777778888888 2222222,,,,,,,222222222222226666666 1111111,,,,,,,999999933333339999999 11 Negotiable and readily transferable 11111113333333,,,,,,,111111100000000000000 11111115555555,,,,,,,555555577777774444444 22222226666666,,,,,,,333333355555552222222 33333330000000,,,,,,,666666622222227777777 22222229999999,,,,,,,222222233333330000000 12 Outstanding collections and other 6666666,,,,,,,000000033333332222222 9999999,,,,,,,666666644444448888888 8888888,,,,,,,222222233333338888888 7777777,,,,,,,000000055555556666666 6666666,,,,,,,888888888888882222222 13 MEMO: Customer liability on 11111118888888,,,,,,,000000022222221111111 22222222222222,,,,,,,777777711111114444444 22222229999999,,,,,,,555555511111117777777 33333338888888,,,,,,,333333399999991111111 33333335555555,,,,,,,333333311111111111111 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 ... 22,333 24,468 39,862 45,717 46,884 40,967 38,263 38,608 37,614 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, foreign banks: principally amounts due from head office or parent foreign bank, p. 550. and foreign branches, agencies, or wholly owned subsidiaries of head office or A 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 1982 1983 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11997799 11998800 11998811AA June Sept. Dec. Mar.P 1 Total 86,181 106,748 153,879 200,596 213,223 225,853 226,429 By borrower 2 Maturity of 1 year or less1 65,152 82,555 115,849 151,698 161,686 171,852 171,000 3 Foreign public borrowers 7,233 9,974 15,099 19,367 20,057 20,999 21,597 4 All other foreigners 57,919 72,581 100,750 132,331 141,629 150,852 149,404 5 Maturity of over 1 year1 21,030 24,193 38,030 48,898 51,537 54,001 55,429 6 Foreign public borrowers 8,371 10,152 15,650 20,057 21,925 22,883 24,553 7 All other foreigners 12,659 14,041 22,380 28,841 29,612 31,118 30,875 By area Maturity of 1 year or less1 8 Europe 15,235 18,715 27,914 39,064 44,880 49,232 52,859 9 Canada 1,777 2,723 4,634 6,594 7,039 7,554 6,794 10 Latin America and Caribbean 24,928 32,034 48,489 68,046 71,686 72,922 73,588 11 Asia 21,641 26,686 31,413 33,518 33,297 37,226 32,538 12 Africa 1,077 1,757 2,457 3,259 3,621 3,692 3,862 13 All other2 493 640 943 1,217 1,163 11,,222255 11,,335599 Maturity of over 1 year1 14 Europe 4,160 5,118 8,094 9,244 10,510 11,559 11,924 15 Canada 1,317 1,448 1,774 2,340 1,955 1,923 1,924 16 Latin America and Caribbean 12,814 15,075 25,089 32,919 34,020 35,121 35,574 17 1,911 1,865 1,907 2,479 3,088 3,168 3,531 18 Africa 655 507 899 1,295 1,328 1,491 1,480 19 All other2 173 179 267 622 635 740 995 1. Remaining time to maturity. A 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 1981 1982' 1983 AArreeaa oorr ccoouunnttrryy 11997799 11998800 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar.P 1 Total 303.9 352.0 372.1 382.9 399.8 414.4 417.7 432.6 434.5 436.3 433.6 2 G 10 countries and Switzerland 138.4 162.1 168.5 168.3 172.2 175.2 173.7 175.0 173.6 177.3 178.1 3 Belgium-Luxembourg 11.1 13.0 13.6 13.8 14.1 13.3 13.2 14.1 13.6 13.0 13.5 4 France 11.7 14.1 14.5 14.7 16.0 15.3 15.9 16.4 15.7 16.7 16.5 5 Germany 12.2 12.1 13.3 12.1 12.7 12.9 12.5 12.7 12.2 12.6 12.9 6 Italy 6.4 8.2 7.7 8.4 8.6 9.6 9.0 9.0 9.7 10.3 10.2 7 Netherlands 4.8 4.4 4.6 4.2 3.7 4.0 4.0 4.1 3.8 3.6 4.3 8 Sweden 2.4 2.9 3.2 3.1 3.4 3.7 4.0 4.0 4.7 5.0 4.2 9 Switzerland 4.7 5.0 5.1 5.2 5.1 5.5 5.3 5.1 5.0 5.0 4.6 10 United Kingdom 56.4 67.4 68.5 67.0 68.8 69.9 69.8 68.5 69.0 71.0 72.0 11 Canada 6.3 8.4 8.9 10.8 11.8 10.9 11.6 11.3 10.8 11.0 10.7 12 Japan 22.4 26.5 29.1 28.9 28.0 30.1 28.4 29.8 29.0 29.0 29.2 13 Other developed countries 19.9 21.6 23.5 24.8 26.4 28.4 30.6 32.1 32.6 33.6 33.8 14 Austria 2.0 1.9 1.8 2.1 2.2 1.9 2.1 2.1 2.0 1.9 2.1 15 Denmark 2.2 2.3 2.4 2.3 2.5 2.5 2.6 2.5 2.4 3.3 16 Finland 1.2 1.4 1.4 1.3 1.4 1.6 1.6 1.8 2.2 2.1 17 Greece 2.4 2.8 2.7 3.0 2.9 2.8 2.6 2.5 2.9 2.8 18 Norway 2.3 2.6 2.8 2.8 3.0 3.1 3.2 3.2 3.4 3.3 3.3 19 Portugal .7 .6 .6 .8 1.0 1.1 1.2 1.5 1.6 1.5 1.4 20 Spain 3.5 4.4 5.5 5.7 5.8 7.2 7.3 7.7 7.5 7.0 21 Turkey 1.4 1.5 1.5 1.4 1.5 1.6 1.5 1.5 1.4 1.5 22 Other Western Europe 1.4 1.7 1.8 1.8 1.9 2.2 2.2 2.1 2.3 2.2 23 South Africa 1.3 1.1 1.5 1.9 2.5 3.3 3.5 3.6 3.7 3.6 24 Australia 1.3 1.3 1.5 1.7 1.9 3.0 4.0 4.0 4.4 4.6 25 OPEC countries2 22.9 22.7 21.7 22.2 23.5 24.5 25.1 26.1 27.0 27.4 28.4 26 Ecuador 1.7 2.1 2.0 2.0 2.1 2.2 2.3 2.4 2.3 2.2 2.2 27 Venezuela 8.7 9.1 8.3 8.8 9.2 9.7 9.7 9.8 10.1 10.6 10.3 28 Indonesia 1.9 1.8 2.1 2.1 2.5 2.5 2.7 2.8 2.9 3.2 3.5 29 Middle East countries 8.0 6.9 6.7 6.8 7.1 7.5 8.2 8.7 9.0 8.7 9.3 30 African countries 2.6 2.8 2.6 2.6 2.6 2.5 2.2 2.5 2.7 2.8 3.1 31 Non-OPEC developing countries 63.0 77.4 82.2 84.8 90.2 96.2 97.5 103.6 103.9 106.7 107.0 Latin America 32 Argentina 5.0 7.9 9.5 8.5 9.3 9.4 9.9 9.7 9.2 8.9 9.0 33 Brazil 15.2 16.2 17.0 17.5 17.7 19.1 19.7 21.3 22.4 22.8 22.9 34 Chile 2.5 3.7 4.0 4.8 5.5 5.8 6.0 6.4 6.2 6.3 6.0 35 Colombia 2.2 2.6 2.4 2.5 2.5 2.6 2.3 2.6 2.8 3.0 3.0 36 Mexico 12.0 15.9 17.0 18.2 20.0 21.6 22.9 25.1 24.9 24.4 24.6 37 Peru 1.5 1.8 1.8 1.7 1.8 2.0 1.9 2.5 2.6 2.6 2.4 38 Other Latin America 3.7 3.9 4.7 3.8 4.2 4.1 4.1 4.0 4.3 4.0 4.3 Asia China 39 Mainland .1 .2 .2 .2 .2 .2 .2 .3 .2 .2 .2 40 Taiwan 3.4 4.2 4.4 4.6 5.1 5.1 5.1 5.0 4.9 5.3 5.1 41 India .2 .3 .3 .3 .3 .3 .5 .5 .5 .6 .4 42 Israel 1.3 1.5 1.3 1.8 1.5 2.1 1.7 2.2 1.9 2.3 2.0 43 Korea (South) 5.4 7.1 7.7 8.8 8.6 9.4 8.6 8.9 9.3 10.8 10.8 44 Malaysia 1.0 1.1 1.2 1.4 1.4 1.7 1.7 1.9 1.8 2.1 2.5 45 Philippines 4.2 5.1 4.8 5.1 5.6 6.0 5.9 6.3 6.0 6.2 6.6 46 Thailand 1.5 1.6 1.6 1.5 1.4 1.5 1.4 1.3 1.3 1.6 1.6 47 Other Asia .5 .6 .5 .7 .8 1.0 1.2 1.1 1.3 1.1 1.3 Africa 48 Egypt .6 .8 .8 .7 1.0 1.1 1.3 1.3 1.3 11..22 1.1 49 Morocco .6 .7 .6 .5 .7 .7 .7 .7 .8 .7 .8 50 Zaire .2 .2 .2 .2 .2 .2 .2 .2 .1 .1 .1 51 Other Africa3 1.7 2.1 2.2 2.1 2.2 2.3 2.3 2.3 2.2 2.4 2.3 52 Eastern Europe 7.3 7.4 7.7 7.7 7.7 7.8 7.2 6.7 6.3 6.2 6.1 53 U.S.S.R .7 .4 .4 .5 .4 .6 .4 .4 .3 .3 .3 54 Yugoslavia 1.8 2.3 2.4 2.5 2.5 2.5 2.5 2.4 2.2 2.2 2.5 55 Other 4.8 4.6 4.8 4.8 4.7 4.7 4.3 3.9 3.8 3.7 3.3 56 Offshore banking centers 40.4 47.0 53.7 59.3 61.7 63.5 65.3 71.1 71.0 67.5 64.5 57 Bahamas 13.7 13.7 15.5 17.9 21.3 18.9 19.9 23.6 20.8 18.6 16.8 58 Bermuda .8 .6 .7 .7 .8 .7 .7 .7 .8 .9 1.0 59 Cayman Islands and other British West Indies 9.4 10.6 11.9 12.6 12.1 12.4 12.0 12.2 13.4 13.2 11.5 60 Netherlands Antilles 1.2 2.1 2.3 2.4 2.2 3.2 3.2 3.0 3.3 3.3 3.2 61 Panama4 4.3 5.4 6.5 6.9 6.7 7.6 7.1 7.3 8.0 7.5 6.8 62 Lebanon .2 .2 .2 .2 .2 .2 .2 .2 .1 .1 .1 63 Hong Kong 6.0 8.1 8.4 10.3 10.3 11.8 12.9 14.3 14.9 14.8 14.8 64 Singapore 4.5 5.9 7.3 8.1 8.0 8.7 9.3 9.8 9.8 9.1 10.3 65 Others5 .4 .3 .9 .3 .1 .1 .1 .1 .0 .0 .0 66 Miscellaneous and unallocated6 11.7 14.0 14.9 15.7 18.2 18.8 18.3 18.2 20.1 17.6 16.2 1. The banking offices covered by these data are the U.S. offices and foreign 2. In addition to the Organization of Petroleum Exporting Countries shown branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. individually, this group includes other members of OPEC (Algeria, Gabon, Iran, Offices not covered include (1) U.S. agencies and branches of foreign banks, and Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are well as Bahrain and Oman (not formally members of OPEC). adjusted to exclude the claims on foreign branches held by a U.S. office or another 3. Excludes Liberia. foreign branch of the same banking institution. The data in this table combine 4. Includes Canal Zone beginning December 1979. foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims 5. Foreign branch claims only. of U.S. offices in table 3.18 (excluding those held by agencies and branches of 6. Includes New Zealand, Liberia, and international and regional organizaforeign banks and those constituting claims on own foreign branches). tions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • June 1983 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1981 1982 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997799 11998800 11998811 Sept. Dec. Mar. June Sept. Dec." 1 Total 17,433 22,226 22,480 23,608 22,480 22,393 20,965 21,440 21,795 2 Payable in dollars 14,323 18,481 18,758 20,377 18,758 19,623 18,182 18,324 18,6% 3 Payable in foreign currencies 3,110 3,745 3,722 3,230 3,722 2,770 2,783 3,116 3,099 By type 4 Financial liabilities 7,523 11,330 12,117 13,084 12,117 12,599 10,028 10,707 10,253 5 Payable in dollars 5,223 8,528 9,446 10,688 9,446 10,627 8,066 8,399 8,178 6 Payable in foreign currencies 2,300 2,802 2,671 2,396 2,671 1,972 1,961 2,308 2,075 7 Commercial liabilities 9,910 10,896 10,363 10,524 10,363 9,794 10,937 10,733 11,542 8 Trade payables 4,591 4,993 4,720 4,430 4,720 4,022 5,027 4,527 4,471 9 Advance receipts and other liabilities 5,320 5,903 5,643 6,094 5,643 5,773 5,910 6,206 7,071 10 Payable in dollars 9,100 9,953 9,312 9,689 9,312 8,9% 10,115 99,,992255 10,518 11 Payable in foreign currencies 811 943 1,052 835 1,052 798 822 880088 1,024 By area or country Financial liabilities 12 Europe 4,665 6,481 6,819 7,968 6,819 7,883 5,947 6,389 6,152 13 Belgium-Luxembourg 338 479 471 507 471 605 518 494 502 14 France 175 327 709 929 709 924 581 672 635 15 Germany 497 582 491 430 491 503 439 446 422 16 Netherlands 829 681 748 664 748 755 517 759 702 17 Switzerland 170 354 715 465 715 707 661 670 653 18 United Kingdom 2,477 3,923 3,559 4,800 3,559 4,282 3,084 3,212 3,061 19 Canada 532 964 958 977 958 914 758 702 685 20 Latin America and Caribbean 1,514 3,136 3,356 3,293 3,356 3,333 2,805 2,%9 2,683 21 Bahamas 404 964 1,279 1,019 1,279 1,095 1,003 933 866 22 Bermuda 81 1 7 6 7 6 7 14 23 23 Brazil 18 23 22 20 22 27 24 28 28 24 British West Indies 516 1,452 1,241 1,398 1,241 1,469 1,044 981 992 25 Mexico 121 99 102 107 102 67 83 85 121 26 Venezuela 72 81 98 90 98 97 100 104 114 27 Asia 804 723 957 814 957 455 502 631 718 28 Japan 726 644 792 696 792 293 340 424 527 29 Middle East oil-exporting countries2 31 38 75 51 75 63 66 67 70 30 Africa 4 11 3 3 3 2 3 3 4 31 Oil-exporting countries3 1 1 0 1 0 0 0 0 0 32 All other4 4 15 24 29 24 12 11 13 12 Commercial liabilities 33 Europe 3,709 4,402 3,771 3,963 3,771 3,422 3,742 3,861 3,578 34 Belgium-Luxembourg 137 90 71 79 71 50 47 50 50 35 France 467 582 573 575 573 504 700 759 602 36 Germany 545 679 545 590 545 473 457 436 464 3/ Netherlands 227 219 221 239 221 232 248 281 340 38 Switzerland 316 499 424 569 424 400 412 358 335 39 United Kingdom 1,080 1,209 880 925 880 824 850 904 802 40 Canada 924 888 897 853 897 884 1,116 1,188 1,482 41 Latin America and Caribbean 1,325 1,300 1,044 1,137 1,044 817 1,418 1,220 1,127 42 Bahamas 69 8 2 3 2 22 20 6 16 43 Bermuda 32 75 67 113 67 71 102 48 89 44 Brazil 203 111 67 61 67 83 62 128 65 45 British West Indies 21 35 2 11 2 27 2 3 32 46 Mexico 257 367 340 392 340 210 727 484 475 47 Venezuela 301 319 276 273 276 194 219 269 157 48 Asia 2,991 3,034 3,285 3,221 3,285 3,404 3,298 3,207 3,966 49 Japan 583 802 1,094 775 1,094 1,090 1,064 1,134 1,028 50 Middle East oil-exporting countries2 1,014 890 910 881 910 998 958 821 1,538 51 Africa 728 817 703 757 703 664 732 663 736 52 Oil-exporting countries3 384 517 344 355 344 247 340 248 284 53 All other4 233 456 664 593 664 604 630 595 653 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 Sept. Dec. Mar. June Sept. Dec.'' 1 Total 31,299 34,482 35,672 34,170 35,672 30,203 30,483 29,488 27,153 2 Payable in dollars 28,096 31,528 32,071 31,161 32,071 27,564 27,983 26,835 24,545 3 Payable in foreign currencies 3,203 2,955 3,601 3,010 3,601 2,639 2,500 2,653 2,608 By type 4 Financial claims 18,398 19,763 20,742 19,171 20,742 17,748 18,360 17,714 16,432 5 Deposits 12,858 14,166 14,688 13,611 14,688 12,730 13,603 12,608 11,918 6 Payable in dollars 11,936 13,381 14,057 12,876 14,057 12,267 13,229 12,194 11,552 7 Payable in foreign currencies 923 785 631 734 631 463 374 413 366 8 Other financial claims 5,540 5,597 6,054 5,561 6,054 5,018 4,757 5,106 4,514 9 Payable in dollars 3,714 3,914 3,600 3,867 3,600 3,362 3,189 3,419 2,833 10 Payable in foreign currencies 1,826 1,683 2,454 1,694 2,454 1,656 1,568 1,687 1,681 11 Commercial claims 12,901 14,720 14,930 14,999 14,930 12,455 12,122 11,774 10,721 12 Trade receivables 12,185 13,960 13,965 14,062 13,965 11,493 11,069 10,709 9,752 13 Advance payments and other claims.. 716 759 965 937 965 962 1,053 1,065 969 14 Payable in dollars 12,447 14,233 14,414 14,417 14,414 11,935 11,565 11,222 10,160 15 Payable in foreign currencies 454 487 516 582 516 520 557 552 561 By area or country Financial claims 16 Europe 6,179 6,069 4,515 4,515 4,515 4,506 4,661 4,728 4,524 17 Belgium-Luxembourg 32 145 43 43 43 16 13 16 10 18 France 177 298 285 285 285 375 313 305 129 19 Germany 409 230 224 224 224 197 148 174 168 20 Netherlands 53 51 50 50 50 79 56 52 30 21 Switzerland 73 54 57 43 57 53 63 60 84 22 United Kingdom 5,099 4,987 3,525 3,525 3,525 3,549 3,795 3,749 3,839 23 Canada 5,003 5,036 6,628 6,040 6,628 4,942 4,365 4,322 4,199 24 Latin America and Caribbean 6,312 7,811 8,615 7,762 8,615 7,432 8,312 7,630 6,783 25 Bahamas 2,773 3,477 3,925 3,284 3,925 3,537 3,845 3,366 3,137 26 Bermuda 30 135 18 15 18 27 42 19 13 27 Brazil 163 96 30 66 30 49 76 76 60 28 British West Indies 2,011 2,755 3,503 3,315 3,503 2,797 3,504 3,171 2,656 29 Mexico 157 208 313 283 313 281 274 268 274 30 Venezuela 143 137 148 143 148 130 134 133 139 31 Asia 601 607 762 501 762 670 800 825 736 32 Japan 199 189 366 113 366 257 327 247 191 33 Middle East oil-exporting countries2 16 20 37 29 37 36 33 30 15 34 Africa 258 208 173 169 173 164 156 165 158 35 Oil-exporting countries3 49 26 46 41 46 43 41 50 48 36 All other4 44 32 48 116 48 34 66 44 31 Commercial claims 4,922 5,544 5,359 5,378 5,359 4,381 4,273 4,164 3,658 37 Europe 202 233 234 220 234 246 211 178 152 38 Belgium-Luxembourg 727 1,129 776 767 776 698 636 646 465 39 France 593 599 557 582 557 452 392 427 341 40 Germany 298 318 303 308 303 227 297 278 364 41 Netherlands 272 354 427 404 427 354 384 258 328 42 Switzerland 901 929 969 1,034 969 1,062 905 1,035 765 43 United Kingdom 44 Canada 859 914 967 1,017 967 943 713 666 635 45 Latin America and Caribbean 2,879 3,766 3,479 3,734 3,479 2,925 2,787 2,772 2,376 46 Bahamas 21 21 12 18 12 80 30 19 21 47 Bermuda 197 108 223 241 223 212 225 154 259 48 Brazil 645 861 668 726 668 417 423 481 252 49 British West Indies 16 34 12 13 12 23 10 7 9 50 Mexico 708 1,102 1,022 985 1,022 762 750 869 672 51 Venezuela 343 410 424 456 424 396 383 373 342 52 Asia 3,451 3,522 3,914 3,700 3,914 3,155 3,323 3,086 3,104 53 Japan 1,177 1,052 1,244 1,129 1,244 1,160 1,213 968 1,157 54 Middle East oil-exporting countries2 765 825 901 829 901 757 806 775 710 55 Africa 551 653 750 717 750 587 614 638 535 56 Oil-exporting countries3 130 153 152 154 152 143 138 148 133 57 All other4 240 321 461 453 461 463 413 448 413 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 • June 1983 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1983 1982 1983 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998811 11998822 Jan.- Apr. Oct. Nov. Dec. Jan. Feb. Mar. Apr.? U.S. corporate securities STOCKS 1 Foreign purchases 40,686 41,902 23,460 5,967 5,581 5,839 5,141 5,310 7,083 5,926 2 Foreign sales 34,856 37,948 20,195 5,675 5,245 4,868 4,376 4,349 6,155 5,316 3 Net purchases, or sales (-) 5,830 3,954 3,265 292 336 971 765 961 928 611 4 Foreign countries 5,803 3,869 3,156 282 325 946 755 940 902 559 5 Europe 3,662 2,596 3,105 175 69 672 586 890 976 653 6 France 900 -143 136 -30 -8 43 47 52 8 29 7 Germany -22 333 670 47 26 138 84 137 226 222 8 Netherlands 42 -60 46 -102 -24 25 2 8 41 -5 9 Switzerland 288 -529 815 -118 -208 226 211 223 102 278 10 United Kingdom 2,235 3,129 1,363 435 317 242 183 442 576 162 11 Canada 783 221 420 5 72 154 90 61 147 122 12 Latin America and Caribbean -30 304 171 142 54 39 -5 83 -23 116 13 Middle East1 1,140 368 -417 -98 9 -153 -57 -13 -57 -290 14 Other Asia 287 246 -227 22 112 210 118 -91 --221100 --4455 15 Africa 7 2 25 0 2 3 6 4 88 88 16 Other countries -46 131 80 35 7 22 18 6 60 -4 17 Nonmonetary international and regional organizations 27 85 108 10 11 25 10 21 26 52 BONDS2 18 Foreign purchases 17,304 21,631 8,508 2,778 2,099 2,099 1,933 1,885 2,312 2,378 19 Foreign sales 12,252 20,480 8,620 2,961 2,280 2,457 2,278 1,877 2,448 2,018 20 Net purchases, or sales (-) 5,052 1,151 -113 -183 -181 -358 -345 8 -136 360 21 Foreign countries 4,991 1,179 -88 -223 -190 -348 -343 33 -153 374 22 Europe 1,371 1,848 -247 408 -236 -158 -189 -148 -266 356 23 France 11 295 -38 -17 24 146 -21 -2 -22 7 24 Germany 848 2,116 43 187 11 43 -96 -35 127 4477 25 Netherlands 70 28 19 -2 -4 -1 16 0 3 11 26 Switzerland. 108 161 318 -4 -13 44 29 62 -2 229 27 United Kingdom 196 -903 -404 225 -327 -461 -105 -90 -182 -27 28 Canada -12 25 28 -152 10 -2 11 15 2211 -18 29 Latin America and Caribbean 132 160 33 -15 28 -6 23 11 11 -2 30 Middle East1 3,465 -821 -128 -435 -20 -177 -211 86 32 -35 31 Other Asia 44 -23 211 -30 28 -5 23 72 59 57 32 Africa -1 -19 -6 0 0 0 0 -1 0 -5 33 Other countries -7 7 20 0 0 -1 0 0 0 21 34 Nonmonetary international and regional organizations 61 -28 -25 41 10 -10 -2 -25 17 -14 Foreign securities 35 Stocks, net purchases, or sales (-) -247 -1,340 -1,541 -308 -740 -272 -320 -226 -447 -548 36 Foreign purchases 9,339 7,170 4,232 706 772 927 1,032 1,042 1,187 971 37 Foreign sales 9,586 8,511 5,773 1,014 1,512 1,199 1,352 1,268 1,634 1,519 38 Bonds, net purchases, or sales (-) -5,460 -6,610 -1,459 -1,331 -458 -417 22 -278 -556 -646 39 Foreign purchases 17,553 29,900 11,609 3,058 2,953 2,962 2,881 3,526 2,772 2,430 40 Foreign sales 23,013 36,510 13,068 4,389 3,411 3,379 2,859 3,804 3,328 3,076 41 Net purchases, or sales (-), of stocks and bonds .... -5,707 -7,950 -3,000 -1,639 -1,199 -689 -298 -504 -1,003 -1,194 42 Foreign countries -4,694 -6,778 -3,031 -1,247 -1,168 -736 -272 -817 -714 -1,227 43 Europe -728 -2,436 -2,284 -517 -572 -555 -307 -687 -604 -686 44 Canada -3,697 -2,364 -894 -181 -7 -29 -20 -449 13 -438 45 Latin America and Caribbean 69 246 666 -268 -62 29 258 345 -24 87 46 -367 -1,851 -597 -283 -536 -195 -192 -37 -146 -221 47 Africa -55 -9 58 0 4 4 -9 21 30 16 48 Other countries 84 -364 20 3 5 10 -2 -10 1166 1166 49 Nonmonetary international and regional organizations -1,012 -1,172 31 -392 -31 47 -26 312 -289 33 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 1983 1982 1983 Country or area 1981 1982 J A a p n r . . - Oct. Nov. Dec. Jan. Feb. Mar. Apr.P Holdings (end of period)1 1 Estimated total2 70,249 85,169 83,860 84,667 85,169 85,458 86,057 88,675 87,511 2 Foreign countries2 64,565 80,586 79,166 79,447 80,586 80,854 82,098 83,046 84,025 3 Europe2 24,012 29,274 29,071 29,447 29,274 29,855 31,039 32,364 33,496 4 Belgium-Luxembourg 543 447 834 448 447 716 -87 -332 -107 5 Germany2 11,861 14,841 14,493 14,704 14,841 15,151 16,650 17,560 17,791 6 Netherlands 1,991 2,754 2,356 2,473 2,754 2,839 3,011 3,194 3,228 7 Sweden 643 667 655 687 667 668 681 656 656 8 Switzerland2 846 1,540 1,266 1,532 1,540 1,013 1,039 1,044 1,063 9 United Kingdom 6,709 6,549 7,237 7,099 6,549 6,721 6,941 7,478 7,736 10 Other Western Europe 1,419 2,476 2,230 2,505 2,476 2,748 2,804 2,764 3,130 11 Eastern Europe 0 0 0 0 0 0 0 0 0 12 Canada 514 602 482 552 602 649 639 724 696 13 Latin America and Caribbean 736 1,076 1,086 1,231 1,076 1,067 1,050 951 932 14 Venezuela 286 188 204 172 188 190 74 77 72 15 Other Latin America and Caribbean 319 656 657 759 656 720 792 690 676 16 Netherlands Antilles 131 232 225 300 232 156 185 184 184 17 Asia 38,671 49,502 48,288 48,079 49,502 49,146 49,256 48,897 48,782 18 Japan 10,780 11,578 11,396 11,314 11,578 11,655 11,707 11,736 11,850 19 Africa 631 77 178 77 77 77 80 80 80 20 All other 2 55 61 62 55 60 34 31 39 21 Nonmonetary international and regional organizations 5,684 4,583 4,694 5,220 4,583 4,604 3,959 5,629 3,486 22 International 5,638 4,186 4,417 4,939 4,186 4,165 3,405 4,966 2,969 23 Latin American regional 1 6 -4 -4 6 6 6 6 6 Transactions (net purchases, or sales ( -) during period) 24 Total2 12,700 14,920 2,342 1,703 808 502 289 599 2,618 -1,163 25 Foreign countries2 11,604 16,021 3,439 792 281 1,139 268 1,245 948 979 26 Official institutions 11,730 14,529 2,843 641 231 1,866 20 1,567 947 308 27 Other foreign2 -127 1,487 596 151 50 -727 248 -323 1 670 28 Nonmonetary international and regional organizations 1,096 -1,096 -1,096 910 527 -637 21 -645 1,670 -2,142 MEMO: Oil-exporting countries 29 Middle East3 11,156 7,534 -917 209 -320 303 121 -233 -691 -115 30 Africa4 -289 -552 0 0 -100 0 0 0 0 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 May 31, 1983 Rate on May 31, 1983 Rate on May 31, 1983 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 3.75 Mar. 1983 France1 12.5 Feb. 1983 Norway 9.0 Nov. 1979 Belgium. 9.5 May 1983 Germany, Fed. Rep. of 4.0 Mar. 1983 Switzerland 4.0 Mar. 1983 Brazil... 49.0 Mar. 1981 Italy 17.0 Apr. 1983 United Kingdom2. Canada.. 9.38 May 1983 Japan 5.5 Dec. 1981 Venezuela 13.0 Sept. 1982 Denmark 7.5 Apr. 1983 Netherlands 4.5 May 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 • June 1983 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1982 1983 CCoouunnttrryy,, oorr ttyyppee 11998800 11998811 11998822 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Eurodollars 14.00 16.79 12.24 9.77 9.47 8.97 9.14 9.25 9.23 8.96 2 United Kingdom 16.59 13.86 12.21 9.30 10.55 11.04 11.29 10.92 10.21 10.18 3 Canada 13.12 18.84 14.38 11.08 10.56 9.87 9.69 9.36 9.39 9.30 4 Germany 9.45 12.05 8.81 7.24 6.54 5.78 5.79 5.40 5.16 5.27 5 Switzerland 5.79 9.15 5.04 3.76 3.71 2.78 2.95 3.64 4.20 4.48 6 Netherlands 10.60 11.52 8.26 6.36 5.66 4.97 4.82 4.34 5.19 5.65 7 France 12.18 15.28 14.61 12.98 12.70 12.55 12.88 12.64 12.12 12.51 8 Italy 17.50 19.98 19.99 19.05 19.20 18.95 19.04 19.19 18.20 17.75 9 Belgium 14.06 15.28 14.10 12.50 12.25 12.25 12.25 13.32 11.05 10.04 10 Japan 11.45 7.58 6.84 6.98 6.96 6.47 6.64 6.78 6.69 6.64 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 Dec. Jan. Feb. Mar. Apr. May 1 Argentinaypeso n.a. n.a. 20985.00 43883.91 48916.66 50239.47 62386.95 66868.56 71100.94 2 Australia/dollar1 114.00 114.95 101.65 96.82 98.26 96.62 88.39 86.76 87.85 3 Austria/schilling 12.945 15.948 17.060 16.994 16.783 17.076 16.940 17.176 17.368 4 Belgium/franc 29.237 37.194 45.780 47.493 46.888 47.739 47.519 48.577 49.239 5 Brazil/cruzeiro n.a. 92.374 179.22 244.63 262.30 309.01 401.30 434.77 465.65 6 Canada/dollar 1.1693 1.1990 1.2344 1.2385 1.2287 1.2277 1.2263 1.2325 1.2292 7 Chile/peso n.a. n.a. 51.118 72.630 74.257 76.863 76.378 76.028 75.405 8 China, P.R./yuan n.a. 1.7031 1.8978 1.9445 1.9238 1.9653 1.9834 1.9938 1.9895 9 Colombia/peso n.a. n.a. 64.071 69.526 70.762 71.751 73.179 74.751 76.153 10 Denmark/krone 5.6345 7.1350 8.3443 8.5275 8.4171 8.5811 8.6223 8.6663 8.8003 11 Finland/markka 3.7206 4.3128 4.8086 5.3425 5.3120 5.3907 5.4266 5.4342 5.4361 12 France/franc 4.2250 5.4396 6.5793 6.8548 6.7725 6.8855 7.0204 7.3148 7.4163 13 Germany/deutsche mark 1.8175 2.2631 2.428 2.4193 2.3893 2.4280 2.4110 2.4397 2.4665 14 Greece/drachma n.a. n.a. 66.872 70.788 80.761 83.621 83.897 84.037 84.105 15 Hong Kong/dollar n.a. 5.5678 6.0697 6.5417 6.5252 6.6060 6.6536 6.7868 6.9667 16 India/rupee 7.8866 8.6807 9.4846 9.6926 9.7938 9.9184 9.9652 9.9824 9.9895 17 Indonesia/rupiah n.a. n.a. 660.43 687.95 694.62 700.01 714.72 970.81 968.83 18 Iran/rial n.a. 79.324 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19 Ireland/pound1 205.77 161.32 142.05 137.69 139.16 136.81 134.79 129.53 128.11 20 Israel/shekel n.a. n.a. 24.407 32.966 34.863 36.986 38.867 40.951 43.427 21 Italyflira 856.20 1138.60 1354.00 1398.74 1374.71 1399.78 1429.72 1451.88 1467.76 22 Japan/yen 226.63 220.63 249.06 241.94 232.73 236.12 238.25 237.75 234.76 23 Malaysia/ringgit 2.1767 2.3048 2.3395 2.3529 2.2822 2.2757 2.2898 2.3063 2.3009 24 Mexico/peso 22.968 24.547 72.990 147.35 150.75 157.81 161.78 153.77 150.27 25 Netherlands/guilder 1.9875 2.4998 2.6719 2.6698 2.6310 2.6779 2.6834 2.7486 2.7737 26 New Zealand/dollar1 97.34 86.848 75.101 72.569 72.921 71.895 66.642 65.726 66.246 27 Norway/krone 4.9381 5.7430 6.4567 7.0346 7.0447 7.1171 7.1852 7.1460 7.1154 28 Peru/sol n.a. n.a. 694.59 942.47 1019.54 1087.43 1160.19 1284.37 1390.60 29 Philippines/peso n.a. 7.8113 8.5324 9.0546 9.2632 9.4488 9.5896 9.8449 10.015 30 Portugal/escudo 50.082 61.739 80.101 92.685 94.548 93.771 95.867 99.055 99.521 31 Singapore/dollar n.a. 2.1053 2.1406 2.1522 2.0768 2.0758 2.0854 2.1010 2.0920 32 South Africa/rand1 128.54 114.77 92.297 92.03 93.82 91.04 91.64 91.42 92.31 33 South Korea/won n.a. n.a. 731.93 746.36 749.80 752.19 757.94 765.29 767.96 34 Spain/peseta 71.758 92.396 110.09 126.125 126.844 129.886 133.498 135.99 137.76 35 Sri Lanka/rupee 16.167 18.967 20.756 21.166 21.378 22.355 22.982 22.971 22.970 36 Sweden/krona 4.2309 5.0659 6.2838 7.3555 7.3227 7.4385 7.4882 7.4941 7.4978 37 Switzerland/franc 1.6772 1.9674 2.0327 2.0588 1.9679 2.0180 2.0663 2.0587 2.0572 38 Thailand/baht n.a. 21.731 23.014 23.000 23.000 22.999 22.991 22.990 22.988 39 United Kingdom/pound1 232.58 202.43 174.80 161.60 157.56 153.29 149.00 153.61 157.22 40 Venezuela/bolivar n.a. 4.2781 4.2981 4.2971 4.2973 4.3101 7.9500 9.0429 10.233 MEMO: United States/dollar2 87.39 102.94 116.57 119.22 117.73 119.70 120.71 121.82 122.05 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 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1983 A76 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Assets and liabilities of commercial banks, March 31, 1982 July 1982 A70 Assets and liabilities of commercial banks, June 30, 1982 October 1982 A70 Assets and liabilities of commercial banks, September 30, 1982 January 1983 A70 Assets and liabilities of commercial banks, December 31, 1982 April 1983 A70 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 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1982 April 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 STANLEY J. SIGEL, Assistant to the Board WILLIAM R. JONES, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM R. MALONI, Special Assistant to the Board NAOMI P. SALUS, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director JOSEPH S. ZEISEL, Deputy Director MICHAEL BRADFIELD, General Counsel MICHAEL J. PRELL, Senior Associate Director J. VIRGIL MATTINGLY, JR., Associate General Counsel JARED J. ENZLER, Associate Director GILBERT T. SCHWARTZ, Associate General Counsel DONALD L. KOHN, Associate Director RICHARD M. ASHTON, Assistant General Counsel ELEANOR J. STOCKWELL, Associate Director NANCY P. JACKLIN, Assistant General Counsel DAVID E. LINDSEY, Deputy Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel FREDERICK M. STRUBLE, Deputy Associate Director HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director OFFICE OF THE SECRETARY ROBERT M. FISHER, Assistant Director SUSAN J. LEPPER, Assistant Director THOMAS D. SIMPSON, Assistant Director WILLIAM W. WILES, Secretary LAWRENCE SLIFMAN, Assistant Director BARBARA R. LOWREY, Associate Secretary JAMES MCAFEE, Associate Secretary STEPHEN P. TAYLOR, Assistant Director PETER A. TINSLEY, Assistant Director LEVON H. GARABEDIAN, Assistant Director (Administration ) DIVISION OF CONSUMER 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 DOLORES S. SMITH, Assistant Director ROBERT F. GEMMILL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director LARRY J. PROMISEL, Associate Director DIVISION OF BANKING DALE W. HENDERSON, Deputy Associate Director 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 S. DAVID FROST, Staff Director THEODORE E. ALLISON, Staff Director EDWARD T. MULRENIN, Assistant Staff Director JOSEPH W. DANIELS, SR., Equal Employment Opportunity Programs Adviser DIVISION OF DATA PROCESSING DIVISION OF FEDERAL RESERVE CHARLES L. HAMPTON, Director BANK OPERATIONS BRUCE M. BEARDSLEY, Deputy Director GLENN L. CUMMINS, Assistant Director CLYDE H. FARNSWORTH, JR., Director NEAL H. HILLERMAN, Assistant Director LORIN S. MEEDER, Associate Director ELIZABETH A. JOHNSON, Assistant Director DAVID L. ROBINSON, Associate Director WILLIAM C. SCHNEIDER, JR., Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director ROBERT J. ZEMEL, Assistant Director WALTER ALTHAUSEN, Assistant Director CHARLES W. BENNETT, Assistant Director ANNE M. DEBEER, Assistant Director DIVISION OF PERSONNEL JACK DENNIS, JR., Assistant Director RICHARD B. GREEN, Assistant Director DAVID L. SHANNON, Director EARL G. HAMILTON, Assistant Director JOHN R. WEIS, Assistant Director ELLIOTT C. MCENTEE, Assistant Director CHARLES W. WOOD, Assistant Director OFFICE OF THE CONTROLLER GEORGE E. LIVINGSTON, Controller BRENT L. BOWEN, Assistant 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

155 Federal Reserve Bulletin • June 1983 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman ANTHONY M. SOLOMON, Vice Chairman LYLE E. GRAMLEY PRESTON MARTIN EMMETT J. RICE ROGER GUFFEY FRANK E. MORRIS THEODORE H. ROBERTS SILAS KEEHN J. CHARLES PARTEE NANCY H. TEETERS HENRY C. WALLICH STEPHEN H. AXILROD, Staff Director and Secretary RICHARD G. DAVIS, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary THOMAS E. DAVIS, Associate Economist NANCY M. STEELE, Deputy Assistant Secretary ROBERT EISENMENGER, Associate Economist MICHAEL BRADFIELD, General Counsel EDWARD C. ETTIN, Associate Economist JAMES H. OLTMAN, Deputy General Counsel MICHAEL J. PRELL, Associate Economist JAMES L. KICHLINE, Economist KARL A. SCHELD, Associate Economist EDWIN M. TRUMAN, Economist (International) CHARLES J. SIEGMAN, Associate Economist ANATOL BALBACH, Associate Economist JOSEPH S. ZEISEL, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL 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, Chicago, Illinois, Chairman WILLIAM J. O'CONNOR, JR., 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, JR., 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. Fred R. Hen- 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. 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 Gene 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 Mail Stop 138, 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. Parts 2 and 3, $1.00 each; 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. 1972. 220 pp. Each Volume $3.00; 10 or more to one BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint address, $2.50 each. of Part I only) 1976. 682 pp. $5.00. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- BANKING AND MONETARY STATISTICS. 1941-1970. 1976. ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 1,168 pp. $15.00. pp. Cloth ed. $5.00 each; 10 or more to one address, $4.50 each. Paper ed. $4.00 each; 10 or more to one ANNUAL STATISTICAL DIGEST 1971-75. 1976. 339 pp. $ 5.00 per copy. address, $3.60 each. 1972-76. 1977. 377 pp. $10.00 per copy. FEDERAL RESERVE STAFF STUDY; WAYS TO MODERATE 1973-77. 1978. 361 pp. $12.00 per copy. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 1974-78. 1980. 305 pp. $10.00 per copy. pp. $4.00 each; 10 or more to one address, $3.60 each. 1970-79. 1981. 587 pp. $20.00 per copy. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1973. 271 pp. $3.50 each; 10 or more to one address, 1980. 1981. 241 pp. $10.00 per copy. $3.00 each. 1981. 1982. 239 pp. $ 6.50 per copy. IMPROVING THE MONETARY AGGREGATES: REPORT OF THE FEDERAL RESERVE CHART BOOK. Issued four times a year in ADVISORY COMMITTEE ON MONETARY STATISTICS. February, May, August, and November. Subscription 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 includes one issue of Historical Chart Book. $7.00 per each. year or $2.00 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $10.00 per year or ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Regulation Z) Vol. I (Regular Transactions). 1969. 100 $3.00 each. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- volume $1.00; 10 or more of same volume to one tion to the Federal Reserve Chart Book includes one address, $.85 each. issue. $1.25 each in the United States, its possessions, FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY Canada, and Mexico; 10 or more to one address, $1.00 UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one each. Elsewhere, $1.50 each. address, $1.50 each. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- THE BANK HOLDING COMPANY MOVEMENT TO 1978; A RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to the United States, its possessions, Canada, and Mexico; one address, $2.25 each. 10 or more of same issue to one address, $13.50 per year IMPROVING THE MONETARY AGGREGATES; STAFF PAPERS. or $.35 each. Elsewhere, $20.00 per year or $.50 each. 1978. 170 pp. $4.00 each; 10 or more to one address, THE FEDERAL RESERVE ACT, as amended through December $3.75 each. 1976, with an appendix containing provisions of certain 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. other statutes affecting the Federal Reserve System. 307 FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 each; 10 or more to one address, $1.50 each. pp. $2.50. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- 10 or more to one address, $1.25 each. ERAL RESERVE SYSTEM. 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 Monetary Policy and Reserve Requirements Handbook. copies of the full text or to be added to the mailing list for $60.00 per year. the series 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- REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT DEDICATION CATION, by Glenn Canner. June 1982. 8 pp. CEREMONIES: FEDERAL RESERVE BANK OF SAN FRAN- INTEREST RATES AND TERMS ON CONSTRUCTION LOANS AT CISCO, March 1983. COMMERCIAL BANKS, by David F. Seiders. July 1982. RESTORING STABILITY. REMARKS BY CHAIRMAN PAUL A. 14 pp. VOLCKER, April 1983. STRUCTURE-PERFORMANCE STUDIES IN BANKING: AN UP- DATED SUMMARY AND EVALUATION, by Stephen A. Rhoades. Aug. 1982. 15 pp. FOREIGN SUBSIDIARIES OF U.S. BANKING ORGANIZATIONS, CONSUMER EDUCATION PAMPHLETS by James V. Houpt and Michael G. Martinson. Oct. Short pamphlets suitable for classroom use. Multiple 1982. 18 pp. copies available without charge. REDLINING: RESEARCH AND FEDERAL LEGISLATIVE RE- SPONSE, by Glenn B. Canner. Oct. 1982. 20 pp. Alice in Debitland BANK CAPITAL TRENDS AND FINANCING, by Samuel H. Consumer Handbook to Credit Protection Laws Talley. Feb. 1983. 19 pp. The Equal Credit Opportunity Act and . . . Age FINANCIAL TRANSACTIONS WITHIN BANK HOLDING COMPA- The Equal Credit Opportunity Act and . . . Credit Rights in NIES, by John T. Rose and Samuel H. Talley, May 1983. Housing 11 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 Federal Reserve and the Payments System: Upgrading If You Borrow To Buy Stock Electronic Capabilities for the 1980s. 2/81. If You Use A Credit Card Survey of Finance Companies, 1980. 5/81. Series on the Structure of the Federal Reserve System Bank Lending in Developing Countries. 9/81. The Board of Governors of the Federal Reserve System The Commercial Paper Market since the Mid-Seventies. 6/82. The Federal Open Market Committee Applying the Theory of Probable Future Competition. 9/82. Federal Reserve Bank Board of Directors International Banking Facilities. 10/82. Federal Reserve Banks U.S. International Transactions in 1982. 4/83. Monetary Control Act of 1980 Organization and Advisory Committees 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 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES—BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM1 Approximate Date or period Weekly Releases release days to which data refer Aggregate Reserves of Depository Institutions and Monetary Base. Monday Week ended previous H.3 (502) [1.22] Wednesday Actions of the Board; Applications and Reports. H.2 (501) Friday Week ended previous Saturday Assets and Liabilities of Domestically Chartered and Foreign Related Wednesday Wednesday, 2 weeks earlier Banking Institutions. H.8 (510) [1.25] Changes in State Member Banks. K.3 (615) Tuesday Week ended previous Saturday Factors AfiFecting Reserves of Depository Institutions and Condition Friday Week ended previous Statement of Federal Reserve Banks. H.4.1 (503) [1.11] Wednesday Foreign Exchange Rates. H.10 (512) [3.28] Monday Week ended previous Friday Money Stock Measures and Liquid Assets. H.6 (508) [1.21] Friday Week ended Wednesday of previous week Selected Borrowings in Immediately Available Funds of Large Thursday Week ended Thursday of Member Banks. H.5 (507) [1.13] previous week Selected Interest Rates. H. 15 (519) [ 1.35] Monday Week ended previous Saturday Weekly Consolidated Condition Report of Large Commercial Banks Friday Wednesday, 1 week earlier and Domestic Subsidiaries. H.4.2 (504) [1.26, 1.27, 1.28, 1.29, I.291] Weekly Report of Assets and Liabilities of International Banking Monday Wednesday, 2 weeks earlier Facilities. H. 14 (518) Weekly Summary of Reserves and Interest Rates. H.9 (511) Friday Week ended previous Wednesday; and week ended Wednesday of previous week Monthly Releases Capacity Utilization: Manufacturing and Materials. G.3 (402) [2.11] Mid month Previous month Changes in Status of Banks and Branches. G.4.5 (404) 1 st of month Previous month Consumer Installment Credit. G.19 (421) [1.56, 1.57] 14th working day 2nd month previous of month Debits and Deposit Turnover at Commercial Banks. G.6 (406) [1.20] 12th of month Previous month Finance Companies. G.20 (422) [1.52, 1.53] 5th working day of 2nd month previous month Foreign Exchange Rates. G.5 (405) [3.28] 1st of month Previous month 1. Release dates are those anticipated or usually met. However, please note that for some releases there is normally a certain variability because of reporting or processing procedures. Moreover, for all series unusual circumstances may, from time to time, result in a release date being later than anticipated. The BULLETIN table that reports these data is designated in brackets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Approximate Date or period Monthly Releases—Continued release days to which data refer Industrial Production. G.12.3 (414) [2.13] Mid month Previous month Loan Commitments at Selected Large Commercial Banks. G.21 (423) 5th of month 2nd month previous Loans and Securities at all Commercial Banks. G.7 (407) [1.23] 20th of month Previous month Major Nondeposit Funds of Commercial Banks. G.10 (411) [1.24] 20th of month Previous month Maturity Distribution of Outstanding Negotiable Time Certificates of 24th of month Last Wednesday of previous Deposit. G.9 (410) month Research Library—Recent Acquisitions. G.15 (417) 1st of month Previous month Selected Interest Rates. G.13 (415) [1.35] 3rd working day of Previous month month Summary of Equity Security Transactions. G. 16 (418) Last week of month Release date Quarterly Releases Agricultural Finance Databook. E.15 (125) End of March, January, April, July, and June, September, October and December Flow of Funds: Seasonally adjusted and unadjusted. Z.l (780) [1.58, 15th of February, Previous quarter 1.59] May, August, and November Geographical Distribution of Assets and Liabilities of Major Foreign 15th of March, June Previous quarter Branches of U.S. Banks. E.ll (121) September, and December Survey of Terms of Bank Lending. E.2 (111) [1.34] 15th of March, June February, May, August and September, and November December Semiannual Releases Domestic Offices, Commercial Bank Assets and Liabilities May and November End of previous December and June Consolidated Report of Condition. E.3.4 (113) [1.26, 1.27, 1.28] February and July Previous 6 months Check Collection Services—Federal Reserve System. E.9 (119) May and November End of previous December Country Exposure Lending Survey. E.16 (126) and June List of OTC Margin Stocks. E.7 (117) February, June and Release date October Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Approximate Date or period Annual Releases release days to which data refer Aggregate Summaries of Annual Surveys of Security Credit February End of previous June Extension. C.2 (101) Bank Holding Companies and Subsidiary Banks (Domestic and March Previous year Foreign). C.6 (105) Bank Holding Companies and Subsidiary Banks (Domestic only). March Previous year C.5 (104) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 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 Loans) (See also Foreigners) Dividends, corporate, 37 Banks for Cooperatives, 35 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 fund, 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

A80 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 association, 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 TAX receipts, federal, 32 Insured or guaranteed by United States, 40, 41 Thrift institutions, 3 (See also Credit unions, Mutual Savings institutions, 30, 41 savings banks, and Savings and loan associations) Time and savings deposits, 3, 9, 15, 18, 19-22 MANUFACTURING Trade, foreign, 55 Capacity utilization, 46 Treasury currency, Treasury cash, 4 Production, 46, 49 Treasury deposits, 4, 12, 31 Margin requirements, 29 Treasury operating balance, 31 Member banks (See also Depository institutions) Federal funds and repurchase agreements, 6 Reserve requirements, 8 UNEMPLOYMENT, 47 Mining production, 49 U.S. government balances Mobile home shipments, 50 Commercial bank holdings, 19, 20, 21 Monetary and credit aggregates, 3, 13 Treasury deposits at Reserve Banks, 4, 12, 31 Money and capital market rates (See Interest 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 WEEKLY reporting banks, 19-24 Prime rate, commercial banks, 27 Wholesale (producer) prices, 46, 51 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

A81 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories 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