Federal Reserve Bulletin, 1983-09

VOLUME 69 • NUMBER 9 • SEPTEMBER 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 663 THE ROLE OF BANKS IN THE ranges established in February for growth INTERNATIONAL FINANCIAL SYSTEM in M2 and M3 for 1983 and agreed on tentative growth ranges for the period from During the late sixties and throughout most the fourth quarter of 1983 to the fourth of the seventies, banks in many countries quarter of 1984 of 6V2 to 9Vi percent for M2 expanded their international activities. and 6 to 9 percent for M3. The Committee considered that growth in Ml in a range of 5 672 TREASUR Y AND FEDERAL RESER VE to 9 percent from the second quarter of 1983 FOREIGN EXCHANGE OPERATIONS to the fourth quarter of 1983, and in a range During the February-July period under re- of 4 to 8 percent from the fourth quarter of view the dollar advanced against most ma- 1983 to the fourth quarter of 1984 would be jor currencies. consistent with the ranges for the broader aggregates. The associated range for total 693 INDUSTRIAL PRODUCTION domestic nonfinancial debt was reaffirmed at 8V2 to 1IV2 percent for 1983 and tentative- Output rose about 0.9 percent in August. ly set at 8 to 11 percent for 1984. With regard to short-run policy, the 695 ANNOUNCEMENTS Committee agreed to seek a slight further Modification of automated clearinghouse increase in the existing degree of restraint service and approval of interim fee schedule on reserves. It was anticipated that such a for ACH deposits made at night. policy course would be associated with growth of M2 and M3 at annual rates of Purchase of improved quality sensor for about 8V2 and 8 percent respectively for the examination of used currency and destrucperiod from June to September. Primary tion of unfit currency. weight would be placed on the performance Amendment to Regulation L. of these broader monetary aggregates in evaluating the conduct of open market op- Amendment to Regulation Y. erations. The members agreed that lesser Decrease in combined assets of overseas restraint on reserve conditions would be branches of member banks. acceptable in the event of a significant shortfall in the growth of the aggregates Revisions to Regulation O. over the period ahead, while somewhat Changes in Board staff. greater restraint would be acceptable in the context of more rapid growth in the aggre- Admission of one state bank to membership gates. It was understood that the need for in the Federal Reserve System. greater or lesser reserve restraint would also be evaluated on the basis of available 699 RECORD OF POLICY ACTIONS OF THE evidence about trends in economic activity FEDERAL OPEN MARKET COMMITTEE and prices and conditions in domestic and international financial markets, including At its meeting on July 12-13, 1983, the foreign exchange markets. The Committee Committee considered its longer-run ranges anticipated that its third-quarter objectives for growth of the monetary and credit agfor the broader aggregates would be congregates. The Committee reaffirmed the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

sistent with a deceleration in M1 growth to A69 GUIDE TO TABULAR PRESENTATION, an annual rate of around 7 percent from STATISTICAL RELEASES, AND SPECIAL June to September, and that expansion in TABLES total domestic nonfinancial debt would remain within the range of SV2 to 11 Vi percent A70 BOARD OF GOVERNORS AND STAFF established for the year. It was agreed that the intermeeting range for the federal funds All FEDERAL OPEN MARKET COMMITTEE rate, which provides a mechanism for initi- AND STAFF; ADVISORY COUNCILS ating consultation of the Committee, would remain at 6 to 10 percent. A73 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES 707 LEGAL DEVELOPMENTS A74 FEDERAL RESERVE BOARD Revision of Regulation G; amendments to PUBLICATIONS Regulation T; revision of Regulation U; amendments to Regulation Y and rules re- A76 INDEX TO STATISTICAL TABLES garding delegation of authority; various bank holding company and bank merger A78 MAP OF FEDERAL RESERVE SYSTEM orders; and pending cases. A1 FINANCIAL AND B USIN ESS S TA TISTICS A3 Domestic Financial Statistics A46 Domestic Nonfinancial Statistics A54 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Role of Banks in the International Financial System This paper was prepared by Nancy H. Teeters, bilities in the area of international banking. As a Member, Board of Governors of the Federal supervisor of banks and bank holding compa- Reserve System, and Henry S. Terrell, Chief of nies, as an agency with responsibilities for monithe Board's International Banking Section, Divi- toring an effective payments mechanism in the sion of International Finance. An earlier version United States, and as a lender to banks and other was presented by Governor Teeters to the Inter- depository institutions through the discount winnational Conference on Multinational Banking dow, the Federal Reserve needs to be aware of and the World Economy at the Leon Recanati foreign as well as domestic factors that influence Graduate School of Business Administration in the condition of individual banks and the banking Tel Aviv, Israel, on June 14, 1983. system. Developments in international banking can The role of banks in the international financial also have important implications for the Federal system expanded significantly in the late sixties Reserve in the conduct of monetary policy. In a and throughout most of the seventies as banks world in which financial integration is proceeding from many countries expanded their internation- at a rapid pace, interpretation of the monetary al activities. International banking has made an and credit aggregates is improved by better inforimportant contribution to a more integrated and mation on credit extended to U.S. borrowers interdependent economic and financial system. from offshore sources and on deposits held by Just as a growing international trading system U.S. residents at offshore banking offices bepermits participants to enjoy the benefits of cause these transactions can be close substitutes specialization and diversity, a more integrated for banking transactions at banking offices locatinternational financial system enables banks to ed in the United States. specialize as lenders or as collectors of deposits In addition to these responsibilities, the Federon an international basis, depending on the sav- al Reserve is charged with maintaining a competing and investing propensities of their customers. itive and equitable banking environment in the This closer integration of financial markets on a United States. In this role the Federal Reserve worldwide basis can benefit both savers and has worked toward developing the statutory and borrowers. A potential problem with internation- regulatory environment in which foreign banks al financial integration is that financial distur- compete in the United States with domestically bances can be transmitted quickly from one chartered banks. The International Banking Act country to another. of 1978 and subsequent regulations issued by the International activities permit greater diversifi- Federal Reserve and the other U.S. banking cation in the assets and liabilities of banks than agencies have established a broad framework of can be achieved from purely domestic banking national treatment for U.S. offices of foreign activities. Expansion into international activi- banks. Although sometimes overlooked because ties, however, exposes banks to a whole new set of more immediate concern with other issues, the of operating risks in terms of dealing in foreign U.S. activities of foreign banks have been an currencies, in foreign legal jurisdictions, and extremely dynamic part of the rapid expansion of with customers, including foreign banks, about international banking. Currently, the U.S. offices whom the banks may have little information. of foreign banks, including U.S.-chartered com- The Federal Reserve, as the central bank of mercial banks whose majority owners are foreign the United States, has important policy responsi- banks as well as U.S. agencies and branches of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin • September 1983 foreign banks, account for 14 percent of total cluding the United States, has been definitely assets of all banks in the United States, and anti-inflationary. Fiscal policy in many industrial about 40 percent of the assets of all banks in New countries other than the United States, when York State. In addition, foreign banks make judged on a discretionary basis, generally has loans to and take deposits from U.S. residents at been tightened, although actual budget deficits their offices located abroad. widened because of weak economic activity With its broad responsibilities in international overall. Monetary authorities in several counbanking, the Federal Reserve follows develop- tries adopted targets for monetary aggregates ments in this area quite closely. This article with the intention of lowering the inflation rate focuses on the current situation in international and not accommodating inflationary pressures lending by banks. exerted by increases in oil prices or wage claims. The result of the restrictive policies in the major industrial countries has been that inflation ECONOMIC SETTING rates have fallen more rapidly than was generally expected (table 1). The success in fighting infla- Because the condition of banking institutions tion has not been universal: in France and Italy reflects the general environment in which they inflation remains quite high, while the United operate, a review of the broad economic setting States, Japan, Germany, and more recently, the will help illuminate the current international role United Kingdom and Canada, have been quite of banks. The past decade has been character- successful in lowering inflation. As a result of ized by worldwide inflation on the order of 10 these anti-inflation policies, the growth of ecopercent per annum in the industrial countries that nomic activity in the industrial countries in 1980are members of the Organisation for Economic 82 was substantially below the growth achieved Co-operation and Development (OECD), com- in the 1976-79 period. pared with about 4 percent in the previous dec- The concerted and simultaneous policy reade. Inflation in the developing countries also sponse to inflation has had important implicaincreased substantially in the seventies. To a tions for the international banking and financial large extent the higher inflation in the seventies system, particularly through its impact on major resulted from the two oil shocks of 1973-74 and borrowers. The stagnation in the major industrial 1979-80. Many countries adopted relatively ex- countries reduced the export earnings of the pansionary policies as their economies slipped developing countries, both because it reduced into recession in 1974-75 after the first oil-price the real volume of exports and because it had an shock. impact on the prices of primary commodities. As Since the second oil-price shock in 1979-80, the chart shows, the export earnings of the the policy focus of most OECD countries, in- developing countries that were not members of 1. Percentage change in consumer price index Fourth quarter from fourth quarter in previous year Country GGNNPP--wweeiigghhtteedd cchhaannggee iinn CCPPII iinn YYeeaarr 66 mmaajjoorr ffoorreeiiggnn United United Canada France Germany Italy Japan ccoouunnttrriieess States Kingdom ((ppeerrcceenntt)) 1973 8.3 9.1 8.3 7.2 11.6 15.0 10.3 10.7 1974 12.2 12.0 15.0 6.5 24.8 23.9 18.2 16.9 1975 7.4 10.2 9.9 5.5 11.4 9.2 25.3 10.7 1976 5.1 5.9 10.0 3.8 21.1 9.4 14.9 9.8 1977 6.5 9.1 9.2 3.7 15.1 6.3 13.1 8.1 1978 9.0 8.7 9.5 2.3 11.5 3.9 8.1 6.1 1979 12.8 9.5 11.5 5.4 17.7 4.9 17.3 9.2 1980 12.5 11.1 13.6 5.3 21.4 7.4 15.3 10.5 1981 9.6 12.3 14.1 6.5 18.4 4.1 11.9 9.3 1982 4.5 9.7 9.5 4.7 16.6 2.9 6.2 6.7 1983' 1.9 4.1 11.5 2.1 13.7 1.6 5.2 5.2 1. First half at an annual rate. Data for countries other than the United States are not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Banks and the International Financial System 665 Exports and debt of non-OPEC developing countries were economically attractive at low real interest Ratio scale, billions of dollars rates, which were often negative, have become uneconomic as real interest rates have reached a range of 5 to 10 percent. The relatively high levels of real interest rates have resulted in part from demands by investors and depositors for protection against the inflationary environment that dominated the seventies. High real interest rates have, of course, also affected the economic viability of domestic investment programs. problems of developing countries appear attributable to internal as well as external causes. A number of these countries were relatively slow to adjust to the environment of higher real interest rates and reduced demand for their exports. The growth rate of the developing countries in general was sustained into 1981—well past the time when the major industrial countries had begun their contractionary policies (table 2). Data on total debt and debt to banks are for year-end; data on exports are for entire year. Developing countries pursued policies that resulted in growth in their external indebtedness of the Organization of Petroleum Exporting Coun- 20 to 25 percent per year, faster than the growth tries (OPEC) were essentially stagnant in 1981 of their export earnings (see the chart). They and 1982 after increasing nearly 20 percent per clearly needed to adjust their policies and develyear on average in the previous four years. opment programs to the altered and less infla- A second important impact on the major bor- tionary economic environment. rowing countries of the policy focus on reducing Adjustment to new economic and financial inflation has been the rapid rise in nominal and conditions can be difficult, particularly when real interest rates associated with the monetary some major participants have made calculations restraint programs. Because interest paid on and commitments in the light of earlier condimuch of the bank debt of these countries is tions that tended to be characterized by high adjusted periodically to reflect the costs of funds inflation and significantly lower real interest to the banks, rising interest rates are translated rates. In the past, the development programs of into rising costs to borrowers within three to six many countries were based on the expectation of months. Projects and development plans that growing markets for exports and relatively inex- 2. Selected data for non-OPEC developing countries Growth rate (percent) GGGrrrooossssss DDDeeebbbttt tttooo TTToootttaaalll YYYeeeaaarrr Developing countries eeexxx ddd ttteee eee rrr bbb nnn ttt aaalll fff bbb ooo aaa rrreee nnn iii kkk ggg sss nnn mmm rrr iii eee nnn sss uuu eee sss rrr vvv ggg eee ooo sss lll ddd dddeee RRR bbbttt aaa ttt sss iiiooo eee rrrvvv ooofff iii ccceee OOEECCDD (((bbbiiilllllliiiooonnnsss ooofff (((bbbiiilllllliiiooonnnsss (((bbbiiilllllliiiooonnnsss ooofff tttooo eeexxxpppooorrrtttsss All Western dddooollllllaaarrrsss))) ooofff dddooollllllaaarrrsss))) dddooollllllaaarrrsss))) (((pppeeerrrccceeennnttt))) Hemisphere 1973 6.1 6.7 8.4 110' 35' 26.1 15.3 1974 .7 5.6 6.9 135' 50' 28.2 15.9 1975 -.2 4.2 3.1 165 62.7 27.2 17.9 1976 4.8 6.6 5.5 200 80.9 38.2 16.8 1977 3.8 5.4 5.0 250 94.3 49.9 17.3 1978 4.0 5.6 4.5 310 131.3 64.6 22.0 1979 3.1 5.0 6.7 365 171.0 74.7 21.9 1980 1.2 4.7 6.0 430 210.2 74.4 20.0 1981 1.4 2.3 -.1 505 253.5 69.9 23.1 1982 -.2 .8 -1.5 555e 282.7 60.6 21.1' 1. The estimates for these years were made without the benefit of e^wtimate. BIS-reported data on bank lending, which are available only since 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin • September 1983 pensive costs of external sources of savings. cally low levels relative to global imports and Investment programs often had long commit- current account balances, while increased access ment and gestation periods; it was thus difficult by member countries to IMF credit, relative to to restrain external needs for additional capital their quotas, placed further strains on IMF reon short notice without imposing severe costs on sources. This decline in IMF resources, relative partially completed investment projects. Inter- to potential uses, limited the ability of the IMF to estingly, however, there are examples of coun- offer temporary financial support to countries tries with well-managed foreign borrowing pro- implementing adjustment programs. grams that appear to have retained their Access by developing countries to credit from creditworthiness internationally even though commercial banks insulated these countries they have experienced the same external against the need to adjust to the first oil shock changes as those countries now having difficul- and delayed, and in some cases made more ties in servicing their external indebtedness. painful, their adjustment to the second one. A positive result has been that developing countries were able to sustain significantly higher PARTICIPATION BY BANKS rates of real economic growth than the OECD countries over this period (table 2). The higher Banks have formed important financial links level of growth in developing countries was between the major industrial countries, the sur- accompanied by a four-fold increase in their plus-earning oil-exporting countries, and the net- external debt, a large increase in the ratio of capital-importing developing countries. Since the export earnings needed to service external debt, early seventies, commercial bank lending to and a decline in the ratio of their international many countries has increased dramatically, and reserves to their external debt from about onethe growth in the banks' share of financial flows fourth in 1973 to one-eighth in 1982. to developing countries has been especially nota- The growing participation of banks in internable. Borrowings from banks provided about two- tional lending has been expressed both through thirds of the financing of the total current ac- participation by more banking institutions and by count deficits and reserve accumulations of the increases in the exposure of the largest banks, developing countries in 1975-81 (table 3). which traditionally have been the most active in The rapid growth in bank lending helped offset international lending. A survey prepared for the slower rates of growth of official bilateral aid and Group of Thirty, a group of private individuals official contributions to multilateral development analyzing international economic issues, indicatbanks. In addition, the resources of the Interna- ed that in the 1970s about 60 new banks a year tional Monetary Fund (IMF) declined to histori- became active in international financing. The 3. Financing of the current account deficits of non-OPEC developing countries Billions of dollars Item 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982e Balance on goods, services, and private transfers -11 -31 -39 -26 -22 -37 -54 -76 -93 -81 Official transfers 5 7 7 7 8 8 12 12 13 12 Current account -6 -24 -32 -19 -14 -29 -42 -64 -80 -68 Source offinancing Direct investment 4 5 5 5 5 6 8 8 1111 8 Borrowing from official sources (excluding IMF) 5 7 11 9 11 12 14 18 18 19 Borrowing from banks 9 16 19 18 11 22 37 43 48 24 IMF credit (net) 2 2 2 -1 0 2 5 5 Miscellaneous and residual -4 -4 -6 -4 -2 5 -7 -7 -6 3 Net accumulation (-) or reduction in official reserves' -8 -2 1 -11 -11 -15 -10 0 4 9 1. Excluding changes due to fluctuations in the value of gold or to e Estimate, the allocation of SDRs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Banks and the International Financial System 667 4. Claims on non-OPEC developing countries, data for nine largest U.S. banks from Country Exposure Lending Survey Billions of dollars Claims on non-OPEC CCllaaiimmss oonn nnoonn-- RReeppoorrttiinngg RReeppoorrttiinngg developing countries TToottaall ffoorreeiiggnn bbaannkkss'' bbaannkkss'' DDaattee OOPPEECC ddeevveellooppiinngg ccllaaiimmss ttoottaall ttoottaall ccoouunnttrriieess aasssseettss ccaappiittaall Percent of Percent of total assets total capital 1977 December 132.7 30.0 372.5 18.4 8.1 163 1978 June 135.9 31.0 390.2 19.0 8.0 164 December 147.3 33.4 422.5 20.0 7.9 176 1979 June 151.8 35.0 449.8 21.1 7.8 166 December 168.2 39.9 486.1 21.9 8.2 182 1980 June 176.7 41.9 508.4 23.0 8.2 182 December 186.1 47.9 531.0 24.0 9.0 199 1981 June 196.0 51.6 553.7 25.0 9.3 206 December 205.0 57.6 564.6 26.1 10.2 220 1982 June 209.5 60.3 566.3 27.1 10.6 222 December 205.3 64.2 588.0 29.0 10.9 221 SOURCE: Semiannual Country Exposure Report and Report of Condition. participation by more institutions fostered com- toward that more rapidly growing economic secpetition in a market that traditionally had been tor. In the United States, the share of exports in dominated by a few large institutions, and in part the total gross national product increased from contributed to lower net returns (narrower lend- 6.6 percent in 1970 to 12.5 percent in 1982. As the ing spreads) to the banks. Table 4 indicates the importance of trade flows increased, individual growth of total foreign claims and claims on banks felt themselves under increasing pressure developing countries of the largest U.S. banks. to expand their international activities to service Clearly, both total foreign lending and lending to the needs of their traditional corporate customdeveloping countries were growing very rapidly ers that were active in international trade and in at these institutions, and their lending to devel- foreign investments. The rapid growth in this oping countries was expanding relative to their sector encouraged entry by financial institutions, assets and capital base. which made the market more competitive. The supply of bank financing to developing Another factor affecting bank lending was the countries in the seventies was quite elastic, at desire of many countries to support and sustain margins above the cost of funds to the banks economic development programs through re- (spreads) that, ex post, appear narrow in relation course to external sources of funds. The oil-price to the risks involved in such lending. Indeed, increases in the 1970s placed budgetary presquite early, even before the difficulties for devel- sures on many donor countries, so that official oping countries surfaced, some forward-looking bilateral and multilateral financing remained relaobservers expressed concerns that these lending tively unchanged; thus an increasing share of the spreads were too narrow to justify the risks enlarged financing requirements of the developassociated with the growing levels of bank expo- ing countries was directed toward banks. sure. Borrowers also played a part in this develop- Why did this rapid growth in international ment. Borrowers facing an elastic supply of lending by banks occur in an environment of funds at interest rates that appeared attractive relatively low returns? There is no obvious sim- did not always tailor their borrowing programs to ple answer to this question, but several factors realistic assumptions about their prospects for seem important. First, international trade was general economic growth or their ability to earn growing more rapidly than purely domestic eco- foreign exchange. In some cases, borrowings nomic activity, and bank lending was directed appear to have been utilized not to finance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin • September 1983 additional investment but, instead, at the margin have concealed impending problems from bank to postpone needed downward adjustments in management especially at the time that available domestic consumption. In several Latin Ameri- data were indicating rapid increases in total and can countries the rise in interest rates seriously short-term debt of several major borrowers. A increased the cash flow problems associated with large proportion of the loans were to foreign servicing existing indebtedness. sovereign borrowers who, it was believed, would Banking institutions proved to be efficient at have very strong incentives to service their debt. organizing themselves to provide funds to these borrowers, and the absence of significant problems in these markets encouraged more banks to POLICY RESPONSES become active. The banks developed a variety of techniques that made such lending attractive to In a situation that has become strained, that more institutions. Loans were priced on a basis appears somewhat disorderly, and that poses a that called for frequent adjustments in the inter- threat to the stability of the international finanest rates, which protected the banks from any cial system, the important question is how to set risks of changing interest rates. Another pricing policy to avoid a major disruption to that system convention allowed some participants to link the in the short run while establishing a more stable interest payments they received to their prime system for the longer run. As noted earlier, the rate, which afforded smaller banks some protec- current situation has evolved because of the tion from external influences on their own pric- actions of borrowers, changes in economic poliing structure. The rapid expansion of the interna- cy, and the actions of lenders—including banks. tional interbank market, while it did not broaden Therefore, a resolution of the situation will rethe overall supply of credit, did augment the quire participation by all groups. liquidity available to individual banks, which at The first two elements of a potential solution the margin may have increased the supply of appear interrelated: more effective adjustment credit to some borrowers. policies by borrowing countries, preferably sup- Perhaps the most significant financing innova- ported by and approved by the IMF, and more tion was the syndicated Eurocurrency credit, in rapid, sustained, and noninflationary expansion which a large bank, or group of large banks, put of the economies of the OECD countries. Such together a borrowing package and an information developments will reduce the current account memorandum, and smaller banks could partici- financing needs of the borrowing countries. The pate in the credit without direct contact with the borrowing countries need adjustment to reduce borrower and without first-hand analysis of the the growth of their indebtedness to some level borrower's creditworthiness. Syndication per- below the rate of growth of their GNP or export mitted large amounts of credit to be raised for a earnings, which will improve the relationship of single borrower on short notice and to be widely their external debt to their ability to produce and diffused among banks. It also allowed smaller export. A number of countries have taken strong banks to participate in international lending with- adjustment measures, and we are currently witout large outlays for analysis and business devel- nessing very low, and in some cases negative, opment. In the face of declining domestic loan economic growth. It can be hoped that this demand, international lending through participa- period of reduced growth will not last too long. tion in loan syndicates allowed many banks to Once these borrowing countries establish a more expand their total assets, although not necessari- viable debt-servicing position, their access to ly their return on assets, in a flexible way. external financing will improve, and the rate of Finally, in the latest stages of the expansion of growth of their external debt should approximate bank lending, banks and borrowers did not ap- the growth of their economies and exports. pear alert to the impending risks of such lending A second adjustment measure is sustained, or to the possibility of fundamental changes in noninflationary growth in the industrial couneconomic policies and conditions that would tries, which would improve the ability of develaffect the viability of continued international oping countries to export. Current estimates lending. The favorable record of lending may suggest that every 1 percent increase in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Banks and the International Financial System 669 growth of the OECD countries raises the exports have to be distributed in a satisfactory way of developing countries on the order of $5 billion among borrowing countries. to $10 billion. An economic recovery is already •i In addition to bank credit, an effective financunder way in the United States, and preliminary ing package for developing countries has two information suggests that economic activity is other important elements. First, the IMF needs picking up in other industrial countries. The adequate resources to perform its functions. As a economic recovery that is beginning will be multilateral official institution, the IMF is considerably more beneficial to indebted coun- uniquely equipped to examine the policies of tries if it is accompanied by a mix of fiscal and borrowing countries and to make recommendamonetary policies in industrial countries, includ- tions concerning those policies. For its recoming the United States, that reduces the general mendations to have any effect, the IMF will need level of real interest rates. sufficient resources to give the borrowing coun- Although both adjustment by borrowers and try the incentive to accept the IMF's policy faster economic growth in the OECD countries guidance. will reduce current account deficits, these defi- A final element of an adequate financing netcits, which are already sharply below those of work to date has involved a source of funds that 1980-81, will require financing. As a structural could be utilized on short notice when problems matter, developing countries will be expected to affect major borrowers. Central banks, and in run current account deficits to import capital for some cases treasuries or finance ministries, have their development programs. been in the best position to provide such funding. Banks are an important potential source of the Recent experience with credit packages to major financing of these current account deficits. They borrowers suggests that these coordinated offihave been a major source of financing to borrow- cial actions have made a significant contribution ing countries in the past, and collectively and toward stabilizing international markets. Such individually have a large stake in the economic packages were intended not as long-term, or viability of these borrowers. Therefore, as part even medium-term financing, but as temporary of several programs negotiated by the IMF with or bridging financing until adjustment programs the borrowing countries, banks as a group are and associated funding could be worked out and continuing to provide some additional credit in implemented. This type of official funding has 1983, although at much slower rates than in the generally been used in a highly selective way, past few years. Given an estimated total bank when some development has threatened the indebt of $283 billion at year-end 1982, an increase ternational financial system. in international bank exposure to non-OPEC Beyond the immediate situation, steps are needdeveloping countries of from 5 to 7 percent in ed to design a more stable long-run environment in 1983 would result in an increase in bank claims which these problems will be less likely to recur. on borrowing countries of $15 billion to $20 Although such steps would help reduce the probabillion—a sharp reduction from new bank credits bility and magnitude of international disturbances, extended in 1982 and more in line with credits a fully risk-free international or domestic environextended by banks before 1978. These sums ment is not an obtainable objective. would provide a reasonable share of financing of Reducing the risk in the international environa vastly reduced aggregate current account defi- ment calls for better and more stable economic cit for these countries. An increase of 5 to 7 policies in both developed and developing counpercent in bank exposure combined with an tries, including the willingness to take early increase in bank capital of about 10 percent in action against inflation. Over the long run, little 1983 also would allow banks to reduce their is gained from inflation, and the costs of fighting exposure to these countries relative to their it rise dramatically as it becomes more deeply capital in 1983, particularly if the increase in embedded in the economic system. Both indusexposure is diffused widely throughout the bank- trial and developing countries have strong incening system to prevent a disproportionate share of tives to avoid policies that encourage inflation. A the burden from falling on any single group of policy mix in industrial countries that relies too banks. These new flows of bank credit will also heavily on monetary restraint can impose a seri- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin • September 1983 ous burden on indebted countries by raising the step that should improve the environment in real costs of servicing outstanding indebtedness. which international lending decisions are made. The recent record appears to indicate that Banks can also learn from this recent experideveloping countries cannot maintain rates of ence. Bank managements should monitor and growth of external borrowing that exceed the control country risk more carefully. Large congrowth of their economies or exports over a long centrations of country exposure need to be reperiod of time without incurring unsustainable viewed regularly because large concentrations of debt-service burdens. On a technical level, the any kind can cause problems for a bank. Banks costs of overvalued currencies and of artificially considering participation in loan syndications low levels of domestic interest rates, which can should analyze the expected returns and should induce heavy private capital outflows when a not participate in a credit simply to increase their country may be borrowing heavily abroad, are total assets or short-term profits. In addition, becoming better understood. Private capital out- although an individual bank may seem to have an flows have intensified the external financing interest in protecting itself by confining its lendproblems of several major borrowers. ing to short-term credits, in the aggregate a The costs of trade protection are generally shortened overall maturity of debt can pose a analyzed in terms of higher domestic prices and serious problem to both borrowers and banks. reduced consumer choice. The recent experience Finally, bank regulatory agencies in the United has taught us that an additional cost of restricting States and other countries are reviewing and trade is the greater difficulty many borrowing improving their supervisory policies on country countries face in achieving a growth of export risk. International cooperation in banking superearnings needed to service their outstanding vision and exchanges of information on supervidebts. sory practices have increased in recent years, Finally, some argue that debt burdens can be notably through the Committee on Banking Regeliminated through inflationary policies that re- ulations and Supervisory Practices, which meets duce the real burden of existing indebtedness. In regularly at the Bank for International Settlea world in which nominal interest rates on out- ments. An agreement that banks and their counstanding indebtedness are adjusted frequently, a try risk exposure be supervised on a consolidatrise in inflation will be translated very quickly ed basis is a helpful development in this area. into higher rates of interest for borrowers. These The revised "Concordat" recently issued by the higher nominal rates of interest, which must be committee, though not dealing directly with paid almost immediately, can actually result in country risk, clarifies the roles and responsibilincreased cash flow problems for borrowing ities for supervising banking institutions operatcountries. ing in or chartered by the major industrial coun- As mentioned earlier, a contribution to greater tries. In addition to these multinational long-run stability can be made by the IMF, which measures, on June 13, 1983, the Federal Reserve as a regular matter consults on the economic and the Comptroller of the Currency issued policies of its member countries. Although the minimum capital guidelines for major U.S. multi- IMF has no direct leverage over a country's national banks; these guidelines underscore the economic policies unless that country is applying importance attached by U.S. bank regulators to for temporary IMF financial assistance, coun- adequate capitalization of banks significantly entries increasingly are respecting the technical gaged in international lending. capabilities of the IMF and may become more It is important, however, not to expect too responsive to its views even if they are not much of bank regulators. Bank regulatory agenseeking access to credit. Staying in the good cies are not equipped to become international graces of the IMF will become especially impor- country-rating agencies. Their expertise in this tant as more countries realize their potential area is not necessarily greater than that of banks. need to borrow from that institution, particularly Nevertheless, they have a special function to if the IMF has adequate resources to be a credi- perform. Because banks benefit from deposit ble lender. The IMF is also exploring ways to insurance on a wide range of their liabilities and broaden statistical information on all countries, a have access to liquidity support at the discount Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Banks and the International Financial System 671 window, they have special advantages over other In developing this new framework for superlenders in competing for funds. Furthermore, vising international lending, U.S. regulators bank liabilities serve as the principal means of were aware of the need to balance the longerpayment in the economy. In light of these advan- term objective of setting the appropriate signals tages and of the importance of a smoothly func- and incentives for banks to engage in internationtioning payments mechanism, the Congress has al lending against the short-run objective of given regulators a role in supervising domestic avoiding excessive restraint that could threaten and international risks that might threaten the the stabilization packages being put together for position of U.S. banks. Therefore, bank supervi- major borrowers. Some of the provisions may sors have a responsibility to review bank portfo- impinge on bank earnings and capital and thus lios, to encourage diversification, and to com- may require a phase-in period to avoid market ment on heavy concentrations in general, disruptions. Other countries are also reviewing especially when a bank has no special expertise their supervisory procedures to improve their or does not enjoy some important advantage surveillance and to avoid situations in which from a large concentration. competitive inequities favor lending by banks In the United States, as part of the legislative chartered in a particular country. process of reviewing the U.S. participation in the increased IMF quotas, the federal bank regulators have been working with the Congress to CONCLUSION develop an improved longer-term statutory and regulatory structure for international lending by The international financial system within which U.S. banks. On April 7, 1983, the federal bank banks are operating has changed considerably in regulators submitted a Joint Memorandum de- recent years, and all the participants are in the tailing a program for improved supervision and process of adapting their behavior to those regulation of international lending. The major changes. The adaptations, while necessary to elements of that new supervisory program were avoid the more serious consequences of continthe following: ued unrestrained inflation, have imposed serious 1. Tightened supervision of the foreign expo- costs on all participants. The challenge for the sures of U.S. banks, including more frequent and immediate future is for all participants in the forceful comments on large international expo- system to recognize their long-term interests in a sures and clearer guidelines for examiners in stable, if certainly not risk-free, system and to commenting about large exposures to bank man- adapt their own behavior in such a manner that agements; the transition is a relatively orderly and well- 2. More frequent and more timely public dis- managed process. The returns to cooperative closure of large concentrations of country risk of behavior by all participants with an interest in U.S. banks, which should result in better market the system are high. surveillance of their activities; The management of this process challenges 3. Adjustment to the accounting conventions macroeconomic policy to maintain the gains that for amortization of spreads and fees that result have been made in combating inflation while from rescheduling, which should make banks allowing sufficient economic growth to permit more cautious in extending new credits, and, it is servicing of outstanding external debts, or in hoped, more accurate in pricing credits that may some cases restructuring of debt on terms that be rescheduled; and are acceptable to both borrowers and lenders. 4. Requirements that banks maintain reserves Agencies charged with responsibility for regulatfor especially troubled international credits, ing banks are reviewing and modifying their which should make the reported earnings and policies to ensure an appropriate environment assets of banks conform more closely to econom- for international bank lending. These challenges ic realities and act as a further caution to banks are formidable and demand coordination of efto restrain commitments, or demand higher com- forts to meet them. A successful outcome seems pensation, for credits because of their potential probable in light of the growing awareness and for a rescheduling or restructuring. understanding of the problem at hand. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Treasury and Federal Reserve Foreign Exchange Operations This 43rd joint report reflects the Treasury- addition to the dollar, these currencies included Federal Reserve policy of making available addi- the Canadian dollar,- pound sterling, and the tional information on foreign exchange opera- Japanese yen. tions from time to time. The Federal Reserve At the outset the dollar showed little of the Bank of New York acts as agent for both the strength that was later to characterize this peri- Treasury and the Federal Open Market Commit- od. Questions remained about the durability of tee of the Federal Reserve System in the conduct the economic upturn here, the outlook for U.S. of foreign exchange operations. interest rates, and the possible implications for This report was prepared by Sam Y. Cross, the dollar of a prospective deterioration in the Manager of Foreign Operations for the System U.S. current account. Economic expansion in Open Market Account and Executive Vice Presi- the United States appeared to be proceeding, as dent in charge of the Foreign Group of the expected, more moderately than previous post- Federal Reserve Bank of New York. It covers the war recoveries and to be limited to interestperiod February through July 1983. Previous sensitive sectors of the economy, such as housreports have been published in the March and ing. The current account was widely forecast to September [October 1982] BULLETINS of each drop into deep deficit, reflecting an additional year beginning with September 1962. drag on domestic output. At the same time, the During the February-July period under review, the dollar advanced against most major foreign 1. Federal Reserve reciprocal currency arrangements currencies, offsetting by varying degrees the Millions of dollars substantial declines in dollar rates that had occurred during the months just before the period. Amount of Effective ; Amount of The dollar's rise took place at a time when the Institution facility Aug. 30, . fifflifw., July 31, 1982 1982 July 31, 1983 world recession was giving way to expansion and Austrian National Bank 250 250 , inflation generally was decelerating. But all National Bank of • TV/. economies were still operating far below capaci- Belgium 1,000 1,000 Bank of Canada 22,,000000 22,,000000 ty, and there was some question as to how strong National Bank of Denmark 250 250 the recovery might be. Also, the pace of expan- Bank of England 3,000 3,000 sion among the industrialized economies was Bank of France 2,000 2,000 German Federal Bank .. 6,000 6,000 uneven. Unemployment stayed well above the Bank of Italy 3,000 3,000 levels of recent recessions; and the decline of Bank of Japan 5,000 55,,000000 ff Bank of Mexico: interest rates from the high levels of mid-1982 Regular facility 700 700 was losing momentum. In some nations, pres- Special facility 0 325 269' Netherlands Bank 500 500 sures therefore remained on policymakers to Bank of Norway 250 ' 250'take action to support economic growth and Bank of Sweden 300 300 Swiss National Bank ... 4,000 4,000 ' create jobs. Under these circumstances, the cur- Bank for International rencies that showed the strongest performance in Settlements: Swiss francs/dollars .. 600 600 the exchange markets were those of countries Other authorized already pulling out of recession, like the United European currency/ dollars 1,250 1,250 States, and of countries seen in the market as 30,100 325 30,369 relatively less vulnerable to such pressures. In 1. Size of facility was reduced as repayments were made. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

673 outlook for inflation improved further in re- By contrast, press reports of substantial foreign sponse to evident productivity increases and interest in U.S. stock and bond markets buoyed weak commodities prices, particularly for oil. sentiment toward the dollar at times. Moreover, as the number of developing coun- By May, reports of large boosts in employtries negotiating debt reschedulings grew, the ment and in output signaled that recovery in the uncertainties about how the international finan- United States was gaining momentum. Looking cial structure would withstand the working-out ahead, a considerable improvement in consumer of these problems continued to cloud the outlook sentiment, the impact on spending of increasing for world economic recovery. Therefore, market values of financial assets, and the prospect of participants held to the view that, for a number new tax cuts in early July all suggested that the of domestic and international reasons, dollar upswing would be far more robust than anticipatinterest rates would soon resume their decline ed just a few months previously and might match after a short reversal in early February and the strength of earlier recoveries. At the same expected the dollar to ease back as well. This time, expectations faded that a compromise view was reinforced in mid-February when the would soon be reached to cut the government's Federal Reserve announced its monetary growth large fiscal deficits for the coming years. Moretargets for 1983, which were interpreted as allow- over, the government was having to borrow an ing room for both a moderately paced recovery unusually large amount for a second quarter, a and further gradual declines in interest rates. time when tax revenues are seasonally heavy. Contrary to expectations, U.S. trade figures Also, there was mounting concern about the for the early months of the year showed a smaller rapid growth of the monetary aggregates, particdeficit than had been recorded during the last ularly the narrowly defined aggregate, Ml. Inpart of 1982. Also, short-term interest rates did coming data showed that the rate of growth of not decline below mid-January levels, and the Ml, after slowing in early April, had rebounded. Federal Reserve kept its discount rate at 8V2 Under these circumstances, U.S. interest rates percent as established in December 1982. But the of all maturities began to rise. Interest rates in improving outlook for prices and for growth other countries were, by comparison, relatively contributed to a further easing in long-term inter- steady, holding on to the declines that had been est rates and buoyed the market for equities. achieved over the past several months. As a Long-term yields moved down in two stages— result, interest rate differentials against most first during February and again in April—while currencies moved more decidedly in favor of the record highs were being registered for major dollar during late May and the adverse differenstock price indexes. tial against sterling was eliminated by mid-June. The dollar held relatively steady through mid- During May and early June the dollar was May, notwithstanding the strains surrounding pushed up again by strong professional bidding. difficult negotiations leading up to an agreement U.S. interest rates were rising, there were no of the Organization of Petroleum Exporting signs of coordinated intervention in the immedi- Countries (OPEC) on new oil prices and produc- ate aftermath of the summit, and after that meettion quotas as well as a major speculative attack ing there appeared to be less foreign pressure on against the curency relationships within the Eu- the United States to modify its policy mix. In ropean Monetary System (EMS). Many market addition, the increasing attractiveness of yields professionals, while impressed by the dollar's on government securities drew a growing amount apparent firmness, still expected the dollar's of investment from nonresidents. Thus, the dolmedium-term trend to be downward because of lar's rise continued without interruption until the outlook for interest rates and current ac- mid-June. counts. Also, for a time talk spread that the After a short period of consolidation around major industrial countries might be preparing to the end of the quarter, the dollar's advance discuss a coordinated intervention effort at the resumed during July. By this time, the vigor of Williamsburg summit. Thus, interbank dealers in the industrial rebound and perceived readiness of foreign exchange and speculators on futures ex- U.S. authorities to allow demand pressures to changes were prepared to sell dollars regularly. show through in higher interest rates were seen Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin • September 1983 in increasing contrast to situations abroad, most ing to become thin and the market to become particularly in continental Europe. In this atmo- disorderly. The U.S. monetary authorities and sphere, even the publication of the largest foreign central banks intervened in coordinated monthly U.S. trade deficit in history for May operations, which had a calming effect on the appeared not to have dampened demand for the market and helped reestablish order at the time. dollar. Instead, the dollar ratcheted upward at an These operations, which the U.S. authorities accelerating rate, the movement most pro- initiated on Friday, July 29, on a small scale, nounced with respect to the German mark. Once were continued during the early days of August. again, professional bidding added momentum to In total, the Trading Desk operated on four the dollar's rise as it passed its earlier highs for occasions during the six business days, July 29the year and then surpassed its peaks of Novem- August 5 to buy $254.1 million equivalent of ber 1982 against several major currencies. Cor- German marks and Japanese yen. The operations porate entities also bought dollars to cover needs involved purchases of $182.6 million equivalent which had been postponed earlier in the year. of German marks and $71.5 million equivalent of By late July the dollar's upward movement Japanese yen, shared equally by the U.S. Treahad taken on a self-sustaining character in in- sury and the Federal Reserve. creasingly unsettled trading. Rate movements During the six months to the end of July, the were sharp and sudden as market participants dollar rose more than 7 percent against the became reluctant to take positions, causing trad- German mark and by larger amounts against the 2. Drawings and repayments by foreign central banks and the Bank for International Settlements Millions of dollars, drawings and repayments (-) dd FF rraa aa ww ccii ii ll nn iitt gg yy bb aa aa nn nn dd kk Ou J t u s 1 t l 9 y a 8 n 2 d 1 , i ng 11998822::33 1982:4 1983:1 1983:2 JJ 11 uu 99 ll 88 yy 33 Ou J t u s 1 l t y 9 a 8 n 3 3 d 1 i , ng Regular reciprocal currency arrangements Bank of Mexico 200.0 f 1,400.01 -217.4 -482.6 0 0 \-900.0J Bank for International Settlements. 0 / 124.01 0 0 0 (against German marks) 1-124.0/ Total 200.0 11,400.0 124 -482.6 0 0 1-900.0 -341 Special swap arrangements with Bank of Mexico U.S. Treasury special temporary facility J 825.01 for $1,000 million 825.0J Special combined credit facility Federal Reserve special facility for $325 f 89.81 million 1 -43.8/ 211.2 67.8 -56.0 0 269.0 U.S. Treasury special facility for $600 / 166.81 million \ -81.3/ 392.2 122.3 -104.0 0 496.0 fl,081.61 Total 950.0/ 603.5 190.0 -160.0 0 765.0 Special swap arrangements between Central Bank of Brazil and U.S. Treasury 3} 500.1 $500 million -500J $280 million 280.0" -280.0 $450 million 450..00 -450.0 .0 $260 million f 250.01 -145.8 1-104.2/ f 200 :§} 1-200 200 :S} -200 1,480.0 400.01 Total -604.2 -1,275.8/ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 675 3. U.S. Treasury securities, foreign currency denominated1 Millions of dollars equivalent; issues or redemptions (—) Amount of Amount of 1983 commitments Issues commitments 1982:3 1982:4 1983:1 1983:2 July July 31, July 1, 1982 1983 Public series Germany 3,171.3 -1,231.9 -664.1 0 -667.9 -607.3 0 Switzerland 458.5 0 0 -458.5 0 0 0 Total 3,629.8 -1,231.9 -664.1 -458.5 -667.9 -607.3 0 1. Data are on a value-date basis. Because of rounding, figures may not add to totals. other EMS currencies. The dollar rose less Bank of Mexico's regular swap facility of $700 against other currencies—53/4 percent in terms of million with the Federal Reserve and also the Swiss franc and less than 1 percent against through special swap facilities totaling $1.85 bilthe Japanese yen and pound sterling. The dollar lion in cooperation with other central banks was down marginally against the Canadian dol- through the BIS. The U.S. portion of the latter lar. In trade-weighted terms the dollar rose sev- facility consisted of $600 million by the Treasury eral percentage points, setting records for the and $325 million by the Federal Reserve. In floating-rate period on many indexes. February, Mexico drew the remaining portion of In other operations during the six-month peri- the special facility, receiving $44.3 million from od, the U.S. monetary authorities continued to the Treasury and $25.8 million from the Federal have credits outstanding to Mexico and Brazil. Reserve. On February 28, the Bank of Mexico On February 1 the Central Bank of Brazil repaid fully repaid the remaining $373 million outstand- $280 million of the $730 million outstanding on ing under the Federal Reserve's regular reciprofacilities made available to it earlier by the Trea- cal currency arrangement, which had been sury. The remaining $450 million facility was drawn last August before other arrangements repaid on March 3. On February 28, the Treasury had been put in place. On May 31, Mexico agreed to provide Brazil with two additional prepaid outstanding swaps under the special faswap facilities of $200 million each in anticipa- cilities, of which $104 million was paid to the tion of Brazil's drawings under a compensatory Treasury and $56 million to the Federal Reserve. financing facility and an extended fund facility of Drawings of $496 million and $269 million were the International Monetary Fund (IMF). These outstanding from the Treasury and the Federal swaps were drawn on February 28 and March 3 Reserve respectively as of July 31 but were and were repaid by March 11. Thus, at that point subsequently repaid upon maturity late in Au- Brazil had repaid in full all Treasury swaps made gust. available to it since October 1982. In December, In April, the BIS, acting with the support of the Bank for International Settlements (BIS), the U.S. Treasury and the monetary authorities acting with the support of the U.S. Treasury and in other countries, agreed to participate in an the monetary authorities of other nations, pro- international financial support package for Yugovided the Central Bank of Brazil with a $1.2 slavia. The Treasury, through the ESF, as part of billion credit facility, which was subsequently a liquidity-support arrangement for the BIS proincreased to $1.45 billion. As part of a liquidity- vided by the participating monetary authorities, support arrangement for the BIS provided by the agreed to be substituted for the BIS for $75 participating monetary authorities, the Treasury million in the event of delayed repayment by through the Exchange Stabilization Fund (ESF) Yugoslavia. By the end of the period, partial agreed to be substituted for the BIS for $500 repayments on this facility reduced the Treasury million of the credit facility in the event of contingent commitment to $57 million. delayed repayment by the Central Bank of On May 12 and on July 26, the U.S. Treasury Brazil. redeemed at maturity the last two German mark- Funding for Mexico was provided through the denominated securities equivalent to $667.9 mil- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin • September 1983 4. Net profits or losses (—) the Treasury held the equivalent of $2,046.5 on U.S. Treasury and Federal Reserve million in such securities as of the end of July. current foreign exchange operations1 Millions of dollars U.S. Treasury GERMAN MARK FFeeddeerraall PPeerriioodd RReesseerrvvee Exchange General Stabilization The German mark had participated in the generaccount Fund alized rise in currencies against the dollar around 1982:3 0 -2.3 89.4 the turn of the year and had firmed within the 1982:4 0 4.3 16.0 1983:1 0 0.5 38.3 EMS. By the beginning of February, however, 1983:2 0 17.0 58.1 the mark had eased back across the board, July 1983 0 0 70.1 Valuation profits and losses on trading at DM 2.4735 against the dollar, as expecoutstanding assets and liabilities as of July 31, 1983.... -803.3 -850.8 0 tations of a continued decline of the dollar weakened. Within the EMS, it drifted down to the 1. Data are on a value-date basis. middle of the narrow band, as speculative buying of marks in anticipation of a realignment subsidlion and $607.3 million respectively. These repre- ed pending early March elections in Germany sented the final redemptions of foreign currency and France. Nevertheless, the sharp swing in notes, public series, which had been issued in the Germany's current account back into surplus Swiss and German markets with the cooperation and further deceleration of inflation during the of the respective authorities in connection with past year had generated expections in the marthe dollar support program of November 1978. kets that the mark would again be revalued in an In the period from February through July, the imminent change in EMS currency relationships. Federal Reserve realized no profits or losses Soon after the opening of the six-month perifrom exchange transactions. The ESF and the od, speculative pressures reemerged as the elec- Treasury general account gained $17.0 million tion dates approached, and the mark again came and $128.2 million respectively in connection into strong demand. By mid-February it had with redemptions of securities denominated in moved to the ceiling of the EMS after opinion German marks. As of July 31, cumulative book- polls predicted that the five-month-old Kohl govkeeping, or valuation, losses on outstanding for- ernment would get a mandate from the electorate eign currency balances were $803.3 million for and have sufficient control of Parliament to purthe Federal Reserve and $850.8 million for the sue its conservative economic policies. In early Treasury ESF. (Valuation gains and losses repre- March, when the election results confirmed the sent the increase or decrease in the dollar value predictions of the polls, the demand for marks of outstanding currency assets and liabilities, increased. With the currency at the top of the using end-of-period exchange rates as compared EMS, both the Bundesbank and other participatwith rates of acquisition.) The above losses re- ing central banks had to intervene heavily to flect the fact that the dollar strengthened since keep the mark within its upper limits. As the the time the foreign currencies were purchased. pressures intensified, several other EMS coun- The Federal Reserve and the Treasury have tries whose currencies were pinned to the bottom invested foreign currency balances acquired in of the EMS supplemented market intervention the market as a result of their foreign exchange with other actions to discourage speculation. operations in a variety of investments that yield Thus, speculative bidding for the mark against market-related rates of return and have a high non-EMS currencies intensified, lifting the mark degree of quality and liquidity. Under the author- some 4 percent against the dollar to its high for ity provided by the Monetary Control Act of the period of DM 2.3685 by March 14 and by 1980, the Federal Reserve invested some of its similar amounts against other major non-EMS own foreign currency resources in securities currencies. In the realignment of March 21, the issued by foreign governments. As of July 31, the mark's central rate was adjusted upward by 5.5 Federal Reserve's holdings of such securities percent. Other EMS currencies were revalued by were equivalent to $1,328.1 million. In addition, smaller amounts or devalued, with the result Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 677 that, in terms of the bilateral central rates, the rarily easing, interest differentials were still admark was revalued about the same amount on a verse to the mark and no longer offset by the trade-weighted basis. prospect of early exchange rate appreciation. Meanwhile, Germany's recession had bot- Also, there was talk of possible liquidation of tomed out late in 1982 and business confidence some OPEC investment in marks to meet current was improving, but the pace of recovery was still payments. The EMS central banks bought large expected to be insufficient to curb a continuing amounts of marks to keep the German currency rise in unemployment. The government was within its lower intervention limits. Also with the committed to fiscal restraint to achieve a long- mark declining against most non-EMS currenstanding German objective of reducing the size cies, the Bundesbank sold dollars. By the end of of the fiscal deficit relative to GNP. Already the April, Germany's foreign currency reserves government had made some progress in imposing dropped more than they had risen during the cuts in social expenditures. previous two months to show a net $1.1 billion Under these circumstances, the Bundesbank decline from January's $40.6 billion level. had taken advantage of the drop in inflation and By mid-May, business confidence in Germany the improvement in the current account to ease had faltered. On the one hand, the benefits of monetary conditions. Early in the year it had decelerating inflation were becoming more apacted out of concern over a possible reversal of parent. A drop in the inflation rate to below V/i the downtrend of interest rates abroad and the percent had paved the way for a very moderate risk that the mark's recovery had stalled, provid- increase in the key pay agreement for metal ing liquidity through open market operations and workers and an even lower average wage inincreasing banks' rediscount quotas, but not crease of 2.6 percent for public service employlowering interest rates. Effective March 18, how- ees. In addition, publication of first-quarter figever, it took the more visible step of cutting its ures confirmed that there had been some revival discount and Lombard rates 1 percentage point, in interest-sensitive sectors of the economy such to 4 percent and 5 percent respectively to signal as investment goods and consumer durables. On its intention to lend support to the economy. But, the other hand, exports—the sector that tradiby this time, the domestic money market had tionally leads Germany out of recession—had become quite liquid and short-term market rates shown almost continuous weakness since midhad declined, partly because of the liquidity 1982. effects of the heavy foreign exchange interven- The trade figures for April revealed a signifition before the realignment. Moreover, the cant drop both in exports and in the trade surscheduled transfer of Bundesbank profits to the plus, suggesting that the strength recorded for federal government in April was also going to the first quarter reflected little more than a inject liquidity. Consequently, the Bundesbank speedup of shipments to other EMS countries in tempered its interest rate action with some cut- anticipation of the EMS realignment. Henceback in banks' rediscount quotas. German inter- forth, export demand was seen as being deest rates nonetheless continued to ease, both pressed, not only by the weakness of markets absolutely and relative to those in the United among the developing countries and OPEC, as States. Thus, by the end of March the adverse before, but also as a result of the revaluation of interest differential in the Euromarkets for three- the mark that was larger than expected in the month maturities, for example, had widened to March realignment and effects of new austerity almost 4Vi percentage points, a level not seen measures in France. Moreover, the scope for since July 1982. providing more impetus to the economy by fur- After the realignment, the mark moved to the ther reducing interest rates was rapidly disapbottom of the new EMS band and also fell back pearing. Central bank money growth was still to early-February levels against the dollar. Spec- running well above the Bundesbank's target ulative inflows and commercial leads and lags range of 4 to 7 percent for the year, even after were unwound. In addition, capital was attracted reversal of the foreign exchange inflows of Febabroad. Although interest rates in other EMS ruary-March. And, abroad, the outlook for intercountries and in the United States were tempo- est rates in the United States was bringing into Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin • September 1983 question hopes that the ten-month-long down- became more subject to sudden rate movements swing in world interest rates would continue. and widening spreads between bid and offered Under these circumstances, the outlook for rates. The U.S. authorities entered the market on the mark became increasingly overshadowed by July 29 to purchase marks as part of an interventhat of the dollar, which was buoyed by pros- tion operation that continued into the subsequent pects of a vigorous economic recovery, strong week and was coordinated with other central corporate profits, and increasingly attractive banks. For its part, the U.S. authorities puryields on fixed-income investments in the United chased a total of $182.6 million equivalent of States. As interest rates in the United States marks during a period of six business days to moved up after mid-May, rates in Germany held counter disorderly trading conditions. generally steady, with the Bundesbank allowing Primarily as a result of intervention opera- German banks to borrow from its Lombard facil- tions, Germany's foreign currency reserves deity heavily and for long periods of time. As a clined a further $1.4 billion after April. For the result, interest differentials adverse to the mark whole six-month period, they fell $2.5 billion to began to widen once more, surpassing the levels $38.1 billion. The mark ended the period at DM of late March by mid-June and increasing further 2.6500 against the dollar, down on balance 7 throughout July. Also, a number of political percent from its early February level. As meafactors weighed on sentiment toward the mark. sured by the Bundesbank's trade-weighted in- The Williamsburg summit passed without appar- dex, however, the mark appreciated by Vi perent agreement on European initiatives pertaining cent, mainly because of the mark's appreciation to interest rates and exchange rates. Meanwhile, vis-a-vis other EMS currencies. reaffirmation of the NATO decision to place In mid-May and in late July, the U.S. Treasury Pershing II and cruise missiles in Germany un- repaid at maturity the final two German markderscored the potential for public debate over a denominated obligations issued in conjunction variety of national security issues. with the November 1978 dollar defense program. Thus, the mark continued to decline against These repayments totaled $1.3 billion equivalent. the dollar, falling by mid-July below its November 1982 low, and generally traded near the bottom of the EMS. Market participants took JAPANESE YEN little apparent note of newly published figures, pointing to a marked upturn in industrial produc- A recovery of the Japanese yen against the tion or improvement in Germany's trade and dollar, which had brought the currency up some current account figures for June. Instead, at the 19 percent from its November 1982 low by early end of July the mark's drop accelerated, as January, stalled just before the period under trading became increasingly hectic, to touch a review. Although the yen remained firm as comseven and a half-year low of DM 2.6600. pared with European currencies, it eased back Throughout the last two and a half months of the against the dollar to ¥240.90 at the beginning of period, the Bundesbank regularly sold modest February. As a result, market participants were amounts of dollars at the fixing but was per- again disappointed in their expectations that Jaceived in the market as not providing strong pan's strong current account position, low inflaresistance to a further drop in the exchange rate tion, and cautious economic policies would set against the dollar. Meanwhile, other EMS cen- the stage for the yen to recapture more of the tral banks bought marks either in compulsory ground lost against the dollar during the precedinterventions at the limits of the 2lA percent band ing two years. or to rebuild reserves. For some time the yen's weak performance By the end of July, trading conditions had against the dollar had been regarded by the deteriorated considerably. As the mark's decline Japanese monetary authorities as substantially relative to the dollar cumulated and major mar- reducing their scope for responding to the weakket makers became less willing to take the posi- ness of domestic economic activity. Fiscal policy tions needed to smooth the flow of orders coming was felt to be constrained by concern over the into the market from their customers, the market budget deficit and a commitment to narrow the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 679 borrowing gap. Monetary policy was felt to be markets. Indeed, inflows of capital from OPEC constrained by the risk that any further easing of countries were considerably diminished and coninterest rates in Japan might again stimulate tributed, along with substantial overseas investoutflows of capital, which had been a major ments by Japanese institutional investors, to an influence in the yen's weakness. The authorities increase in Japan's net long-term capital outflow. wished to avoid adding pressure on the exchange The yen was also caught up at times in the EMS rate at a time when international attention was pressures around mid-March, since the yen was focused on Japan's widening trade surplus. Ja- used to some extent as a vehicle for speculation pan had emerged with the largest current account against those currencies expected to be revalued. surplus of the major industrialized countries, The yen, therefore, showed little trend against close to $7 billion in 1982. the dollar through late March. Although at one In the recessionary environment, which many point in February it rose to ¥231.20, by the end countries faced around the turn of the year, the of the quarter the yen was trading back around prospect that Japan might experience a further ¥240. It declined about 3 percent against the sharp increase in its export penetration this year mark just before the realignment of the EMS. aggravated already severe trade frictions with its However, in the subsequent unwinding of specumajor trading partners. The Bank of Japan, lative positions, the yen recouped most of that therefore, chose not to lower its discount rate loss in just a few days. from the 5xh percent level that had prevailed for At the end of March, with the approaching over a year, and Japanese market rates eased close of the fiscal year and parliamentary action little even as interest rates in most other financial on the budget, public attention focused increascenters declined substantially after mid-1982. ingly on the continued sluggishness of the Japa- During February and March, expectations nese economy. Real growth had amounted to 3.3 about the near-term course of Japanese interest percent in the fiscal year just ending—a disaprates shifted frequently. On numerous occasions, pointing figure by traditional standards—with the expectations developed that the official discount rate of growth decelerating noticeably throughrate would be cut. Economic growth continued out the year. Export demand remained weak, to slow, and output in Japan was slipping to reflecting the worldwide recession, increasing relatively low levels of capacity. Japan's low barriers to Japanese goods, and import cutbacks inflation, high real interest rates, and the outlook by developing countries. Japan's current account for modest wage increases in the spring labor surplus continued to widen, most importantly offensive all suggested that there still might be because imports were depressed by the low level scope for measures to stimulate domestic de- of domestic demand. The yen's earlier appreciamand. Nevertheless, the Bank of Japan repeat- tion and weak commodities prices had contributedly stated that the yen's exchange rate prevent- ed to an improvement in Japan's terms of trade. ed it from lowering its lending rate. With the Although this helped strengthen the corporate outlook for interest rates uncertain and with sector's financial position, industry remained Japan's economy looking stagnant as compared cautious about embarking on new investment with the more vigorous performance of the U.S. projects as long as final demand was flagging. economy, foreign investors became skeptical Thus, loan demand remained weak and the Bank that Japan's stock and bond markets would make of Japan scaled back its projection for new a strong showing relative to those abroad. lending by city banks for the coming quarter. In addition, conditions in world oil markets Under these circumstances, calls for an interand speculation surrounding the EMS realign- est rate cut were increasingly heard from private ment affected trading in the Japanese yen for the as well as some government sources, and talk first three months of the period. Although Japan spread that the government would soon anwas seen as benefiting from declining prices for nounce measures to support economic growth. its oil imports, market attention focused on the On April 5, the government presented an eightimmediate, unfavorable impact on Japan's capi- point program involving primarily a speedup in tal account of the possibility that OPEC nations the disbursement of previously budgeted public might liquidate their holdings in Japanese capital works spending. But the Bank of Japan still Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin • September 1983 viewed the exchange rate as too weak to permit a ruling party's victory in June parliamentary elecdiscount rate cut and thus disappointed hopes tions confirmed that the government's internathat a drop in interest rates would reinforce the tional and economic policies would not be subgovernment's program. ject to major change. During April and into early May, the yen drew Consequently, the yen rate moved up against support from the prospect that Japanese interest the dollar during the latter half of June and held rates would remain stable. In addition, the ap- generally steady during July as the dollar adproaching release of a seven-nation intervention vanced against the continental currencies. But, study and the upcoming Williamsburg summit when the yen became caught up in the pressures focused attention on official exchange rate poli- of a rapidly rising dollar at the month-end, the cies. Market participants interpreted statements Japanese authorities sold dollars as a coordinatby Bank of Japan Governor Maekawa and others ed intervention operation got under way in which as presaging a move to a more active internation- the U.S. authorities bought $71.5 million equivaal intervention policy. They also anticipated that lent of yen. These purchases during the first days the Japanese government might choose to sup- of August were shared equally between the Fedport its currency before the Williamsburg summit eral Reserve and the U.S. Treasury. so as to defuse the trade issue. Although the yen closed the six-month period By May 11, these factors helped boost the yen at ¥242.90, near its low against the dollar, it to a high of ¥230.35 against the dollar. Specula- registered a net decline of less than 1 percent tion in favor of the yen on Chicago's Internation- since the end of January. With the yen relatively al Monetary Market (IMM) became quite heavy steady against the dollar, it showed an almost at times and was an important component of the uninterrupted advance against other currencies runup in the yen, with open interest in yen after mid-March. The yen ended July almost 7 contracts hitting successive records. But the percent higher on balance against the mark, overhang of these positions soon became a thereby challenging its 1978 high against that source of concern, as fears arose that a sudden currency. The Japanese authorities intervened decline in the yen might be triggered by the need little in the exchange markets through the end of to cover them. In addition, a renewed rise in July, with the $1.25 billion increase in foreign U.S. interest rates and the completion of the currency reserves since January to $20.7 billion, Williamsburg summit without any obvious primarily reflecting interest receipts on their curchange in official foreign exchange operations rency holdings. exerted a drag on the yen, which dropped back to a low of ¥243.60 by mid-June. Nevertheless, the yen had shown a steady advance against the German and other continental currencies, rising Swiss FRANC more than 6 percent vis-a-vis the mark during the prior two and a half months. Coming into the period under review, the Swiss After mid-June, the improvement in Japan's franc was trading well above its previous-autumn external sector began to receive more attention levels against all currencies except the Japanese in the exchange markets. A bottoming-out of yen. After leading the recovery of European exports, together with the continuing low level of currencies against the dollar that had begun in imports, led to a widening of Japan's current mid-November, it held up better than others account surplus to a seasonally adjusted annual after the dollar's turnaround in early January to rate of $20 billion for the first five months of trade around SF 2.0250 against the dollar and 1983. In the meantime, the quickening pace of about SF 0.82 in terms of the German mark. recovery in the United States, where the import By February, there was a perception in the of manufactured goods was forecast to rise sig- market that the Swiss authorities might not have nificantly, suggested there would be a further the leeway that they had during much of the expansion of Japan's exports. Moreover, politiprevious year to ease monetary conditions. Inflacal developments in Japan provided background tion, at least at the consumer level, had receded support for the yen during this period, as the less in Switzerland than in Germany, Switzer- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 681 land's major trading partner and competitor in tentious political campaigns were under way in a third markets. The growth of central bank money number of neighboring countries. had begun to rise, coming close to the central For a time during February and March, these bank's 3 percent target for 1982, and the authori- favorable factors were overshadowed by intensities had adopted the same target for the coming fied bidding for German marks in anticipation of year. Consequently, there was seen to be rather an EMS realignment. With the mark rising little scope for interest rates in Switzerland to strongly across the board, the Swiss franc decline from the very low levels of last fall, while dropped steadily as it became one of the curreninterest rates abroad had dropped substantially. cies against which long mark positions were As a result, the large adverse interest differen- established. In all, the franc declined nearly 6 tials that had fostered heavy capital outflows and percent against the mark to SF 0.8663 on March had contributed to last year's weakness of the 14, its lowest level in one and a half years. franc were narrowing considerably. Against the dollar, the Swiss franc swung widely There were other reasons as well why market under the influence of active speculative trading participants anticipated that capital outflows in the interbank market and on Chicago's IMM from Switzerland might not be so large as in before settling around the level of SF 2.0750 in 1982. Foreign official and corporate borrowers, mid-March. especially Japanese entities, continued to borrow By late March, however, the Swiss franc had in Swiss francs throughout the first half of 1983. begun to move back up against the mark as The spot rate on occasion was pushed lower positions taken before the March 21 realignment when the proceeds of new issues were converted of the EMS were reversed. Meanwhile, the into foreign currencies. But, at the same time, franc's traditional interest rate disadvantage narthe sheer size of earlier borrowings was seen as rowed. The Swiss National Bank lowered its increasing the potential that the Swiss franc official lending rates by Vi percentage point on might come into strong demand sometime in the March 17, in coordination with a larger reduction future. If, for example, Swiss interest rates were by the German central bank. But Swiss money to rise substantially more than rates in other market interest rates actually rose during the markets or if the dollar were to decline, earlier second half of March, while those in most other borrowers might bid for francs to cover their centers were declining. With some slowing of the liabilities. Thus, the attitude of market profes- previous rate of foreign borrowing in the Swiss sionals toward the Swiss franc had come to capital market, the franc gained steadily against incorporate a decided sense of two-way risk. the German mark in a trend that was to continue. Sentiment toward the franc was also favorably Against the dollar, the Swiss franc edged up affected by other factors. The country's trade more gradually through mid-May before declindeficit had narrowed by $1 billion to yield a ing in June, along with other foreign currencies. surplus on current account of $3.4 billion last The decline was in response to the renewed rise year, and most forecasts called for a similarly in U.S. interest rates and the revised outlook for sized surplus for 1983. The competitiveness of U.S. economic recovery. Compared with other Swiss exports had actually improved somewhat, continental currencies, however, the franc dereflecting in part last year's decline of the franc clined more modestly. By then, short-term interrelative to the German mark, which had not been est rates in the Swiss market had advanced fully reversed. More importantly, the Swiss gov- almost to the levels prevailing in Germany, ernment's fiscal discipline compared favorably thereby eliminating the traditional negative with that of other countries. Thus, Switzerland spread between the two markets. The increased appeared to have come through the difficult interest rates reflected the wariness of market adjustments of recent years with fewer economic participants that the Swiss National Bank might dislocations, as well as fewer political divisions, tighten the supply of banking reserves in rethan most countries. Moreover, Switzerland's sponse to an apparent overshooting of its monetraditional role as a safe haven and its relative tary target in the first five months of the year. political stability made the franc an attractive Such speculation persisted even after central currency for investment, particularly when con- bank officials pointed out that the year-over-year Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin • September 1983 rise in central bank money so far was a statistical undercutting progress toward the fiscal and monanomaly that need not be offset later in the year etary discipline that had been a hallmark of its and, furthermore, that the central bank would strategy to curb inflation and to restore private accept an overrun by as much as 1 percentage initiative in the economy. point. Meanwhile, expectations had developed that The Swiss franc declined relative to the dollar the government might choose to hold an election as the dollar began its steep run-up late in July. It before its mandated date in 1984. It was anticidropped to a low of SF 2.1530 on the last day of pated that economic policy in general and extrading before closing at SF 2.1420, some 53A change rate policy in particular would be imporpercent below the opening six months earlier. tant campaign issues. The government was But, against the German mark, the franc contin- expected to take credit for bringing inflation ued rising throughout to close 1V2 percent higher down to 4 to 5 percent. But, with the outlook for than at the end of January and some 6V2 percent world trade pessimistic and the domestic econoabove its lowest point in mid-March. Trading at my not strong enough to bring the unemployment SF 0.8083, the franc was approaching levels that rate below 12 percent, there was already considpreviously had brought into question the compet- erable concern about Britain's competitive posiitiveness of industry in Switzerland relative to tion. A major opposition party was calling for a that in Germany. The Swiss authorities did not large devaluation of the pound, as well as for a intervene in the exchange markets until after the sharp acceleration of public spending and subend of the six-month period under review, al- stantially lower interest rates. Talk spread that though they continued to use foreign currency even the government might accept some modest swaps to provide liquidity to the banking system. easing of the exchange rate. The country's foreign exchange reserves showed By late January, the pound had eased against little change, easing back $400 million on balance the dollar to $1.5210, while settling around 81 to $11.8 billion at the end of July. according to the Bank of England's trade-weighted measure. Sterling had fallen when debate on the competitive issue first flared up in late 1982. STERLING Selling pressure against the currency had been countered with sometimes forceful intervention Sterling was affected during the period under by the Bank of England and some backing-up of review by developments in world petroleum mar- interest rates that interrupted a pronounced kets and by uncertainties surrounding the United downtrend over the preceding year. Britain's Kingdom's general election. Prospects of poten- foreign exchange reserves had declined for sevtially large drops in oil prices were seen as having eral months, reaching $9.8 billion by the end of considerable bearing on Britain's external and January. fiscal positions. The current account surplus, During February and March, sterling again which had helped sustain comparatively high came on offer, after the failure of OPEC's Janunominal and trade-weighted values of sterling ary meeting to produce agreement on oil prices during the previous two years, had already dwin- and production quotas left open the question dled, and the non-oil components were forecast whether the widely anticipated oil price drop to deteriorate sharply in the coming year—only would be limited and proceed in an orderly partly because the immediate outlook for growth fashion. The pound fell irregularly on various in the United Kingdom was somewhat better reports of the protracted OPEC negotiations, as than for its European neighbors. The govern- well as of the British National Oil Company's ment had recently provided some fiscal relief, own price negotiations. Even after a mid-March largely to industry, at a time when the domestic agreement by OPEC on prices and production economy was still struggling to emerge from ceilings, the market remained skeptical that the three years of recession. A significant reduction details of the agreement would be adhered to. of oil tax and royalty receipts would have raised Adding to the pressures on sterling at times the possibility that the government might exceed were the activities of trading professionals and its target for public-sector borrowing, thereby their customers in anticipation of a realignment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 683 of the EMS. With the pound already vulnerable cial entities also moved to cover sterling payto selling pressure and the sterling market unen- ments that had been delayed. cumbered by exchange controls, the British cur- During April and early May, other factors also rency was sold against those viewed as sure to be contributed to a further strengthening of sterling. adjusted upward within the European currency Britain's economic recovery appeared to become arrangement. As a result, large short sterling more assured, with evidence of further rises in positions began to be established against the domestic sales and production. Reported infla- German mark by early March in a pattern that tion fell to its lowest rates in fifteen years. And continued until the EMS realignment was an- the current account stayed in modest surplus nounced on March 21. during the first quarter. Under these circum- The Bank of England was seen in the market stances, talk that the government might decide to as cushioning but not resisting this decline, hold a general election as early as June was which was regarded as reflecting largely external viewed as increasingly favorable for sterling. developments. Moreover, outflows from sterling Thus, the pound continued to benefit from the were not mirrored as before in a rise in British reversing of professional short positions, from interest rates. In fact, by mid-March, money new positioning in favor of the currency, and market interest rates in the United Kingdom had from shifts into sterling-denominated securities actually fallen somewhat. The clearing banks by international investors. It proceeded to adtook advantage of a temporary firming of sterling vance, albeit more slowly after May 9 when the exchange rates in mid-March to cut their base announcement of June general elections focused lending rates by V2 percentage point, and the market attention on the immediate uncertainties Bank of England immediately followed with sim- of an election campaign. On the last day of May, ilar reductions of its money market intervention sterling reached the highest level of the sixrates. month period at $1.6145 against the dollar and The sterling market remained generally unset- 88.0 on a trade-weighted basis, before easing to tled through the end of the first quarter in re- around $1.51 and 84.0, respectively, by mid-June. sponse to the continuing uncertainties about oil From mid-June to late July, the sterling market prices, pressures within the EMS, and newspa- became more settled with the spot rate about in per speculation that the government was uncon- the middle of the range over which it had traded cerned about the exchange rate. It fell to its low during the preceeding couple of months. The for the period of $1.4508 against the dollar on election results, which assured continuity in the March 28 and to 77.9 on the Bank of England's economic and financial policies of the Thatcher index. At these levels, the pound was some 15 administration, and a firming of world oil prices, percent below its mid-November value both which suggested that the new price structure against the dollar and in effective terms. Against would hold, dispelled the principal uncertainties the German mark, the pound had declined nearly that had clouded sterling's prospects early in the 44 percent in over two years to a record low of period. The pound's retreat from its late-May DM 3.53 on March 24. Meanwhile, Britain's highs reduced concern that it was at levels inforeign exchange reserves declined a further $1.1 compatible with Britain's ability to compete and billion during February and March. to maintain the momentum of its economic re- At the end of March, sterling turned around as covery. signs of adherence to the OPEC arrangements Meanwhile, the investment flows that had bolwere accumulating. The British National Oil stered the pound at times during the spring also Company had announced its own price reduc- tapered off. Money market interest rates in the tions, which were more modest than some pre- United Kingdom had eased somewhat further, dictions and which did not give rise to competi- which, together with the firming of U.S. rates tive action by OPEC producers of closely since mid-May, left sterling assets without an comparable qualities of crude oil. Soon there interest rate advantage over U.S. investments. began to be a reversal of many of the large short The Bank of England had endorsed the decline in sterling positions that had been established dur- British interest rates by reducing its intervention ing the previous two months, and some commer- rates on two occasions—mid-April and mid- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin • September 1983 June—for a total of approximately 1 percentage winter to spur investment and employment and point, and the clearing banks had followed with acted to lower domestic interest rates as soon as similar reductions of their base lending rates. For exchange market conditions permitted. Concern a time, market participants anticipated that rates deepened that the economic performance of might be lowered further. But, after the govern- France was diverging in important ways from ment reaffirmed its resolve to control inflation that of many other European countries, where and after new evidence showed monetary aggre- inflation was down sharply and current accounts gate growth to be accelerating, the view became were moving back toward surplus. accepted that no more cuts in rates were in the Under these circumstances, market particioffing. pants had come to expect that a new EMS Sterling held relatively steady against the dol- realignment would occur soon after elections in lar when the dollar rose against all other curren- France and Germany scheduled for early March. cies during July. As the period closed, the pound For several months the franc traded close to its was trading at $1.5150, Vi percent lower than its parity against the German mark and generally in level at the beginning of February. In trade- the upper half of the EMS band. The franc was weighted terms, it was 5 percent higher than six supported by intervention of the Bank of France months earlier at 85.4 on the Bank of England's and by sales of foreign currency, which French index; against the German mark, sterling had enterprises borrowed abroad. Such borrowing gained nearly 6V2 percent to trade at DM 4.018. was estimated by Finance Minister Delors to Britain's foreign exchange reserves rose on bal- have been $8.8 billion during 1982. By the end of ance after March to close the six-month period at January the French franc stood at FF 7.0100 $9.0 billion—down $800 million from levels at the against the dollar and FF 2.83 against the mark. end of January. France's foreign currency reserves were $17.6 billion at the end of January, and the government had arranged a $4 billion syndicated loan in the Euromarket. FRENCH FRANC During much of February the franc edged up against the dollar and moved along with the mark Early in 1983, France's relatively high rate of toward the top of the EMS. The pressure against inflation, wide government deficit, and large the franc, while offset in the spot market by current account deficit weighed heavily on mar- intervention by the Bank of France, was neverket sentiment toward the French franc. Even theless showing through. Nonresidents speeded after a temporary freeze on wages and prices, the up their sales of French francs, which were year-to-year increase in consumer prices had not increasingly financed by borrowing in the Eurofallen much below 10 percent and inflationary franc market and were reflected in a widening of expectations remained unfavorable. The govern- the discount on the franc in the forward market. ment was struggling to hold to its target for the Meanwhile, expectations of a downward adjustcentral government deficit of 3 percent of gross ment of the franc rate also contributed to a heavy domestic product (GDP). And the current ac- buildup of imported goods inventories by French count deficit had more than doubled to $12 enterprises and a deterioration in France's trade billion for the whole of 1982. account. The French authorities had adopted several In early March, pressure against the French measures during the preceding months to deal franc intensified. News of a sharply wider trade with these problems. But market participants deficit for January, together with the results of were skeptical that much progress would be the first round of municipal elections in France achieved, particularly if it should require an and the decisive victory for the new government undercutting of earlier efforts to curb unemploy- in Germany's national elections, prompted furment and to stimulate economic growth. In spite ther selling of francs. On March 7 the Bank of of the need for restraint, the French authorities France allowed the franc to fall to the floor of the introduced several measures during the fall and EMS. At the same time the cost of overnight Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 685 financing in the Eurofranc market was bid up to impressed by the scope and decisiveness of the several thousand percent per annum, causing government's measures, in particular the decisome speculators to close out short positions sion to pass its program by decree rather than against the franc. Although the Bank of France going the more lengthy route of legislation. As a was then able to scale back its intervention in the result, speculative positions were unwound and spot market, the accumulated support provided commercial leads and lags swung quickly back in had been substantial, as is partially reflected in favor of the franc. These reflows were reflected, the $3.4 billion decline in French foreign curren- in part, in a sharp drop in Eurofranc interest cy reserves for February and March. rates to their lowest rates since the start of the After lengthy negotiations over the March 18 year. Moreover, with the franc now at its upper weekend, the franc's parity was devalued 2.5 intervention point in the EMS, the Bank of percent as part of an overall realignment of EMS France bought large amounts of other EMS currencies. The franc was, in effect, devalued 8 currencies, thereby rebuilding official reserves. percent against the mark, 6 percent against the At the end of April, French reserves had climbed guilder, 5 percent against the Danish krone, and $2.5 billion to $16.7 billion. 4 percent against the Belgian franc. It remained By May, the reflows back into the French unchanged vis-a-vis the Italian lira and was effec- franc were largely completed while hurdles still tively revalued 1 percent against the Irish pound. had to be surmounted to meet the government's The French government announced that, to re- economic objectives. Efforts to curb inflation duce the trade deficit and to help bring down were being undercut to some extent as the franc inflation, it was prepared to adopt further auster- dropped against the dollar, because France reity measures. In addition, it would seek a large, ceived none of the benefit of declining oil prices medium-term loan from the EC. on its domestic price structure. Some disappoint- On March 25 the French government an- ing trade figures had already made it clear that nounced the details of a new program that aimed the target recently set for the 1983 external at reducing domestic demand by FF 65 billion deficit would be difficult to achieve. On the (about 2 percent of GDP). The program included domestic side, the austerity program was still a mandatory loan to the government based on being met by political opposition. income and wealth taxes paid in 1982, an income Under these circumstances the Bank of France tax surcharge to reduce the deficit of the social was careful about letting interest rates ease, and security system, a special gasoline tax to com- by summer they were still sufficiently high to pensate for declining oil prices and other reve- attract deposits from investors abroad. The monnue-raising measures, as well as a limitation on etary authorities operated on both sides of the the amount of foreign currency French tourists market, adding on balance small amounts of may take abroad. In addition, the money supply foreign currencies to reserves. The government growth target for 1983 was lowered from 10 went ahead with its plan to borrow ECU 4 billion percent to 9 percent. The government projected from the EC's balance of payments facility in a that, as a result of the program, economic growth series of transactions undertaken in June and for the year would be reduced to nearly zero and July. Moreover, the political leadership reafinflation cut to 8 percent. firmed on a number of occasions the need for The French franc had been pulled up by other rigorous economic policies this year and next. EMS currencies before the realignment and was Thus, by the end of July, the franc was still trading on March 18 around FF 6.90 against the trading in the upper half of the EMS band and at dollar. When the exchange markets opened the FF 3.00 against the mark. It continued to decline following Monday, the EMS currencies as a along with the mark against the dollar, closing group fell sharply against the dollar, and the the period some 14 percent down from the end of French franc settled around FF 7.25. Neverthe- January levels at FF 7.9900. But France's foreign less, the franc emerged firmly at the top of the currency reserves increased further during the newly aligned EMS band, where it was to trade last half of the six-month period to close the through late April. The exchange markets were period at $18.5 billion, up $900 million from the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin • September 1983 end of January levels and $4.2 billion from their against the currency. The spot rate dropped from low point of the end of March. the top of the 2VA percent band to a position well below the narrow band, using the greater leeway available to the lira. The Bank of Italy supported ITALIAN LIRA the currency with sales of dollars and, to a lesser extent, of EMS currencies. These operations are Coming in 1983, the economic situation in Italy partly reflected in a decline of $700 million in the was showing modest improvement; there had country's foreign exchange reserves for March. been some progress in bringing down inflation Meanwhile, the lira had also declined somewhat and containing the growth of imports. But these against the dollar to Lit 1,424.00. results had been achieved at the cost of a sharp On March 21, as part of the overall realigndrop in output, and the prospects for further ment, the lira's central rate within the EMS was improvement were still unclear. Inflation differ- adjusted downward 2xh percent, leaving the parientials vis-a-vis most of Italy's trading partners ty unchanged relative to the French franc and had actually widened since the modest scaling with adjustments similar to those for the franc back in Italy's rate of inflation could not match against the other EMS currencies. In the exthe more sizable reductions of inflation in most change market, the lira moved to trade well other industrialized countries. Export volumes above the new narrow band maintained for the had declined more than could be explained by other currencies. Following the realignment, contractions in Italy's major export markets. there were sizable flows back into lire as leads Efforts to contain rapidly growing fiscal deficits and lags were unwound, seasonal inflows began were being frustrated both by recession at home to show through, and Italy's relatively high interand repeated failure to get Parliamentary approv- est rates became attractive again once a devaluaal for increased taxes and revenues. The over- tion was not a near-term prospect. The Bank of shooting of the government deficit contributed to Italy took advantage of the lira's comfortable a rapid expansion of total domestic credit, which position within the joint float to recoup more had significantly exceeded its target for 1982. than earlier losses of foreign currency reserves, Under these circumstances, the Bank of Italy contributing to a rise of nearly $2 billion in concluded that it had no room to ease monetary foreign exchange reserves for the month of April. policy and was one of the few central banks not Soon after the realignment, market interest to lower the official discount rate after August rates in Italy began to ease. Although output had 1982. As a result, interest rates in real terms had stabilized, it remained at a low level. There was actually increased somewhat. little expectation of an early economic recovery, The attraction of relatively high interest rates and unions and employers pushed aggressively kept the lira trading firmly near the top of the for lower interest rates. Commercial banks cut narrow EMS band, a position it was to keep their prime rates twice during the spring a total of through February. The Bank of Italy took advan- 11/4 percentage points to 183A percent, and there tage of this relative strength to rebuild its foreign were similar reductions of Treasury bill auction currency reserves to a level of $13.7 billion at the rates. But the news on price performance was end of January 1983. Against the dollar the lira still disappointing. The consumer price index was trading at Lit 1,418.00 by the opening of the was rising at an annual rate of about 16 percent six-month period. during the first quarter, well above the govern- Early in March, when a realignment of the ment's goal of 13 percent or less. The Bank of EMS arrangement appeared to be imminent, Italy did not join other EMS central banks in market participants came to expect that the reducing official rates during March. But on Italian authorities might seek to protect the com- April 8 it lowered the discount rate 1 percentage petitiveness of the country's exports by negotiat- point to 17 percent. ing a downward adjustment of the lira's central Even so, interest differentials remained strongrate should the French franc be devalued. Be- ly in favor of the lira. Moreover, Italy's current tween March 3 and March 10 the lira came on account deficit was strengthening further. Italy's offer as commercial leads and lags turned quickly trade deficit narrowed considerably during the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 687 first half of 1983, compared with the same period accounts, but the effects were only beginning to of 1982. Increasing tourist receipts and declining show through. The Belgian government, using service costs on Italy's external debt were ex- emergency powers, had imposed a broad austerpected to generate further gains for the Italian ity program to slash government spending, wage current account balance during 1983. These de- costs, and the trade deficit. In Denmark a new velopments helped to buoy the lira even as government had abolished wage indexation and prospects for action to bring Italy's public-sector reversed a stimulative fiscal policy, while the deficit under control faded. The government central bank had kept interest rates relatively collapsed in early May before all the measures to high. In Ireland, the authorities had in place contain the deficit could be passed by Parlia- restrictive fiscal and monetary policies and the ment, and it was unclear whether a new coalition exchange rate had appreciated against sterling, government would take strong measures either the currency of Ireland's major trading partner. to cut spending or to raise taxes in the current In France, however, and to a lesser extent in depressed economic environment. Italy progress toward achieving better balance in The lira continued to trade above the EMS the economy was not yet sufficient to relieve narrow band through July while moving down concern in the markets about the currencies' with other European currencies against the dol- near-term outlook. lar. The easing of pressures on the external In all EMS countries, unemployment was high account permitted the Italian authorities to build and generally still rising, reaching levels of over up their foreign currency reserves and to in- 16 percent in some countries. To varying degrees crease the amount of foreign exchange Italian in all countries the authorities were embarked on tourists may export. By the end of July the lira medium-term efforts to reduce large and persiswas trading at Lit 1,573.00 against the dollar, tent structural fiscal deficits. But recession was down almost 11 percent over the six-month peri- adding to the difficulties of achieving planned od under review and down V/i percent against budgetary savings. Pressure therefore was on the German mark. Meanwhile, Italy's foreign monetary policy to provide support to the doexchange reserves stood at $18.6 billion, up $4.8 mestic economies, and the question remained billion over the period. among market participants whether the general move toward restraint could be sustained long enough to produce more uniform economic per- EUROPEAN MONETARY SYSTEM formance. Under these circumstances, the Dutch guilder The currencies of the EMS were trading steadily stayed virtually at the top of the 2Va percent against each other at the beginning of February, narrow band early in February, with the German but in a configuration that reflected widespread mark and the Danish krone close behind. The market expectations that continued divergence French franc was held close to its bilateral cenin economic performance among the member tral rate relative to the mark, while the Irish countries made another realignment inevitable. pound fluctuated below the middle, and the These expectations were based on observations Belgian franc remained at or near its lower that, in most cases, differentials in inflation and intervention point. Except for the French franc, current account performance had increased there was only modest intervention in support of slightly since the realignment of June 1982. Infla- the currencies within the narrow EMS band. The tion had decelerated more sharply in Germany Italian lira, buoyed by relatively high interest and the Netherlands than in other EMS coun- rates in Italy, was fluctuating within the wider tries. German and Dutch current accounts had limits available to that currency to trade slightly moved strongly into surplus, while other coun- above the 2XA percent intervention limits of the tries, even those whose current accounts had others. improved, remained in sizable deficit. During February, however, the currency rela- To be sure, the authorities in several partici- tionships came under increasing pressure as pating countries had implemented policies during speculation grew that a realignment might occur 1982 to reduce inflation and to improve current soon after early-March elections in France and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin • September 1983 Germany. The mark and guilder became pinned sizable reserve losses and established large debtto their upper intervention points. The French or positions in the European Fund for Monetary franc moved along with the mark until March 7, Cooperation (FECOM), while Germany had the when the French franc was permitted to drop to opposite experience. its lower intervention point. By this time, other On March 21 the seventh realignment became currencies, too, had come under pressure. The effective. Four currencies were revalued—the Danish and Irish currencies fell to the bottom of mark by 5.5 percent, the guilder by 3.5 percent, the EMS, and the Italian lira traversed the whole the Danish krone by 2.5 percent, and the Belgian width of the narrow band to trade about 2 franc by 1.5 percent—and three were devalued— percent below it. To defend the Belgian franc, the French franc and the lira by 2.5 percent and the Belgian National Bank raised official interest the Irish pound by 3.5 percent. In effect, these rates 2Vi percentage points, effective March 9, changes left the trade-weighted values of the and then on March 14 the authorities significant- Danish krone and the Belgian franc about unly tightened exchange controls, particularly af- changed and offset an earlier appreciation of the fecting commercial leads and lags. Meanwhile, a Irish pound against sterling, leaving that currensudden and sharp increase in short-term Euro- cy at about its 1982 level overall. Pursuant to the French franc interest rates effectively curtailed realignment, the French government indicated it speculation by nonresidents selling the French would adopt austerity measures to restore exterfranc short. nal equilibrium. In response to these developments, the focus Immediately after the realignment, speculative of speculative activity shifted toward those cur- positions were reversed and commercial leads rencies expected to be revalued. Bidding for and lags were unwound. These reflows out of marks and guilders quickly intensified against marks and guilders helped drag the entire EMS both dollars and other non-EMS currencies, with down vis-a-vis non-EMS currencies, with the the result that the upward pressure on the strong- result that several of the devalued currencies hit er currencies lent support to the EMS as a group new lows against the dollar. Within the EMS, against the dollar. The central banks in Germany however, the reflows pushed the French, Irish, and the Netherlands took advantage of the and Danish currencies all close to the top and the strength of their currencies, as well as the im- Italian lira moved well above the narrow band. provement in their current accounts and in their With the mark and guilder now at the lower limit price performance, to lower interest rates and of the new band, most participating central banks thereby to lend support to their domestic econo- had an opportunity to reconstitute reserves and mies. By March 18, the Netherlands Bank reduce FECOM debt, most of which was repaid dropped its official lending rates in two stages for by the end of April. a total of 1 percentage point, and the Bundes- As the reflows proceeded, policy adjustments bank lowered its official interest rates that day by were possible in a number of countries, which 1 percentage point as well. As a result of these could then catch up with the generalized decline and earlier declines in interest rates, short-term in interest rates. The authorities in Italy, Belmarket rates had eased in the two countries to gium, Denmark, and Ireland permitted an easing their lowest levels since early 1979. Dutch inter- in domestic interest rates, confirmed in most est rates had declined even more rapidly than cases by cuts in official lending rates. Among the German rates over the preceding year and were largest declines were those in Belgium, where as much as 1 percentage point below those for the central bank lowered its lending rates 5 comparable maturities in Germany. percentage points in four steps, and in Denmark, Meanwhile, the EMS central banks intervened where the central bank lowered its discount rate heavily, both in EMS currencies and in dollars. twice for a total of 2x/i percentage points. In In fact, total EMS intervention in the six weeks addition, foreign exchange controls were relaxed through March 18 considerably exceeded that for in Belgium and Denmark. The Belgian authoriany comparable period since the inception of the ties removed one of the restrictions imposed currency arrangement. Countries whose curren- before the realignment requiring Belgian entercies were under the heaviest pressure suffered prises to convert promptly foreign currency re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 689 ceipts from current account transactions. The debate over the appropriate priorities for eco- Danish authorities eased some long-standing ex- nomic policy, the Canadian authorities remained change restrictions on capital transactions. By committed to the need to promote cost and price contrast, the German and Dutch authorities stability. A public-sector wage and price restemmed the earlier downtrend in their interest straint program had been implemented. Fiscal rates. In fact, market rates in the Netherlands policy remained cautious. Initiatives by the govbacked up sharply to levels above those in Ger- ernment during the winter to boost employment many. Then, effective May 3, the Netherlands and to stimulate investment had been matched Bank validated part of the increase by raising its largely by cuts in planned expenditures elsediscount rate 1 percentage point back to the level where, although the financing requirements of that had prevailed at the start of the six-month both the federal and provincial governments had period. increased mainly for cyclical reasons. In addi- Following these actions, the Belgian franc and tion, monetary policy continued to be aimed at Danish krone eased in the EMS toward the exerting continuous downward pressure on inflabottom and the middle respectively, while the tion to provide a basis for sustained economic guilder edged up toward the middle. But the growth. In the conduct of this policy, the Bank of other currencies were little changed during the Canada had announced in November 1982 that it four and a half months after the March realign- was withdrawing the target range for the expanment, with the German mark staying close to its sion of the specific monetary aggregate, Ml, lower intervention point against the French franc since the aggregate's relationship to interest or Irish pound at the top. The adjustments in rates and total spending was no longer sufficientcurrency relationships that did occur took place ly reliable. In the meantime, the monetary auwithout strain through the end of July, the con- thorities indicated they would look at other fitinued improvement in trade accounts and infla- nancial and economic variables, including the tion figures lending credibility to the 1982 auster- value of the Canadian dollar. ity programs in both Belgium and Denmark. Against this background, the Canadian dollar Against the dollar, however, the EMS currencies held comparatively steady against the U.S. dolas a group moved lower, closing the six-month lar during the six-month period under review, period under review down 7 to 14 percent on fluctuating generally within a 2 percent band balance. For the EMS countries as a whole, around Can.$1.2300, a level to which it had foreign currency reserves changed little on bal- recovered during the fall of 1982. In effect, it also ance over the period. Within the group, howev- rose on balance against most other currencies. er, reserves of Italy, France, and, to a lesser From the beginning of the six-month period, degree, Belgium rose while those of Germany the Canadian dollar drew support from a marked and the Netherlands declined. improvement in Canada's current account position that had become evident in 1982. A sharp drop of imports, reflecting the slowdown in Can- CANADIAN DOLLAR ada's domestic economy, together with a modest expansion in exports, had combined during 1982 Early in 1983, the Canadian economy was just to swing the current account into significant beginning to emerge from recession. For Canada surplus for the first time in more than a decade. the drop in output had been deeper than for most Trade figures early in the year suggested that other industrialized countries and the unemploy- Canada's net export position was strong enough ment rate was still near its peak of 12.8 percent. to hold on to an overall current account surplus In addition, the downturn in inflation had come for the first quarter of 1983. At the same time later than for most countries, with the annual there were a number of conversions by Canadian rate of increase for the consumer price index residents of funds borrowed in markets abroad edging just below double-digit levels by the turn where interest rates were lower than in Canada. of the year. As a result, the Canadian dollar rose on bal- Although the severity of the adjustments tak- ance through early March and fluctuated to a ing place in Canada had given rise to an active high of Can.$1.2210. The Canadian authorities, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin • September 1983 after having taken advantage of opportunities in four years. The balance of payments remained before the period to rebuild their foreign curren- in surplus, bolstered by strong demand for Canacy reserves to U.S.$2.9 billion, continued on da's export of agricultural products and automobalance to add to reserves. In addition, short- tive parts. These favorable developments octerm interest rates eased during February and curred at the same time that the domestic then held generally steady during most of March economy was rebounding strongly, spurred by even as rates for comparable maturities in U.S. consumption and housing. By late June, foredollars temporarily firmed. As a result, Canada's casters were revising upward their growth protraditionally favorable interest rate gap narrowed jection for the current year. In this climate, talk through most of March and, at the three-month circulated in the exchange markets that foreign maturity, actually turned negative for several investment inflows into Canada had picked up. days around the end of the quarter. Under these circumstances, Canadian interest Early in April, sentiment toward the Canadian rates did not match the prolonged advance of dollar briefly became more cautious. With the U.S. interest rates after mid-May. Indeed, shorterosion of Canada's normal interest rate differen- term interest differentials turned negative for the tial and the domestic economy still operating far Canadian currency again by early June and widbelow capacity, market participants came to ened progressively through the end of July. Nevquestion whether the Canadian authorities would ertheless, the Canadian dollar held up better than allow interest rates to back up if U.S. rates were other currencies against the dollar, as the U.S. to continue to rise. In addition, there was uncer- currency strengthened across the board during tainty about the stance of fiscal policy to emerge June and July. The Canadian dollar was suffifrom the budget, which was to be announced ciently strong that the spot rate eased only after midmonth, in view of the continuing pres- modestly from its early-May levels to close the sures for stimulus and talk within the govern- six-month period under review at Can.$1.2330, ment of the need to create jobs. up slightly from the beginning of the period. In the event, the Bank of Canada restrained During this period, the Bank of Canada added to the liquidity positions of Canadian banks, and foreign currency reserves, which rose U.S.$300 short-term interest rates moved up slightly from million over the six-month period to the relativelate-March levels. In the meantime, U.S. interest ly high level of U.S.$3.2 billion. rates resumed a downward course so that interest rate differentials came back in favor of the Canadian dollar. In addition, the government's MEXICAN PESO announcement of its budget for the 1983-84 fiscal year was well received by the business communi- By February, Mexico's external financial crisis, ty and the exchange markets generally. It did which developed in 1982, was at a major turning include a Can.$4.8 billion medium-term recovery point. On the one hand, a number of actions had program to spur investments and to promote been taken to arrest further deterioration in jobs, largely over the next two years. But the Mexico's financial position. The newly elected market was impressed by provisions that would government of President de la Madrid had begun offset most of the cost of the program, albeit with to implement a stringent austerity program dea delay, including a temporary increase in the signed to redress the external imbalance, to federal sales tax in subsequent years when the curtail inflation, and to reduce sharply the huge economy is expected to be more robust. Follow- government deficit. In December, the IMF had ing this announcement, the Canadian dollar approved an extended fund facility for Mexico. moved off its mid-April low near Can.$1.2400. Negotiations were proceeding, although incom- By late in the second quarter, the economic plete, with foreign banks on a $5 billion jumbo situation in Canada was clearly improving. Infla- loan to help ease immediate liquidity strains and tion was dropping steadily with the year-on-year to cover the expected 1983 current account defirate of the increase in the consumer price index cit. The rate of domestic economic activity had down to 5.4 percent by May and major wage slowed, and the large current account deficit had settlements providing for the smallest increases begun to decline. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 691 On the other hand, major problems and uncer- marked the first concrete step by the authorities tainties remained. Inflation continued at around on principal amounts of private-sector debt. 100 percent per annum, clouding prospects for a Shortly thereafter, OPEC reached agreement on deceleration of wages sufficient to break the a new pricing and production structure, and wage-price spiral. Large spending cuts, needed prices of Mexican oil exports were lowered by to bring the public-sector deficit down from 17 $2.75 per barrel in line with the OPEC agreepercent of GNP in 1982, had only just begun to ment. PEMEX oil shipments and earnings rematerialize. Although public-sector interest pay- bounded quickly, which, together with funds ments were current, a program had not yet been becoming available from the jumbo credit, eased agreed upon for restructuring these debts. Mean- the immediate strain on Mexican liquidity. In while, no proposals had been made to deal with early May, the IMF informed the commercial accumulated arrears that had developed in pri- bank group advising Mexico on its external debts vate-sector external debt service and import pay- that the country had come within the IMF's firstments. quarter limit on the current account deficit, de- Reflecting the progress already achieved, the spite the shortfall in oil revenues. In fact, Mexico Mexican peso was trading steadily in early Feb- had a current account surplus in the first quarter, ruary in the offshore interbank market at due mainly to severely depressed imports. In this Mex.$148.50, close to the onshore "free mar- environment, the peso strengthened in the offket" rate established late in 1982 as part of a shore interbank market from late March into move to relax exchange controls. But soon there- early May. after uncertainty deepened, and the peso, while For the remainder of the period under review, remaining at Mex.$147.90 in the onshore "free the peso traded firmly in the offshore interbank market," declined to about Mex.$171 in offshore market close to the rate in the Mexican "free interbank trading. The drop in world spot oil market." The latter remained unchanged at prices threatened to force OPEC to reduce their Mex.$147.90 from January 24 through June 21 oil price, a move that would lead Mexico to and was adjusted higher twice to Mex.$147.60 at follow suit, weakening the outlook for Mexico's the end of the period. The "controlled rate," oil export earnings. About the same time, prog- established along with the "free rate" for foreign ress stalled on the $5 billion bank financing. debt, trade, and other eligible transactions, was During February, the Bank of Mexico drew depreciated steadily over the period as planned down the final amounts available on the $1.85 to take account of inflation differentials vis-a-vis billion joint BIS-U.S. swap facility. In this con- Mexico's major trading partners. It stood at nection, Mexico received $44.3 million from the Mex.$123.83 at the end of July. Treasury and $25.8 million from the Federal The steadiness of the peso reflected growing Reserve. In addition, the Federal Reserve re- market perception that the government's adjustnewed until the end of February the outstanding ment program was on track and that Mexico's balance of $373 million on the regular Federal liquidity position was improving. Early in May, Reserve-Bank of Mexico swap facility, original- for the first time in more than year, there were ly drawn in August 1982. The swap was then market reports that private capital transferred repaid on February 28. out of Mexico earlier was beginning to move Beginning in late February, several important back. Later in May, the IMF released the second issues began moving toward resolution. The $5 extended fund facility tranche of $325 million, billion jumbo loan agreement became a certainty which was used to make an initial payment on on February 27, and $433.7 million in bridge the joint BIS-U.S. swap facility. And, on June financing was arranged for disbursement ahead 22, official creditors signed a multilateral agreeof the signing of the jumbo loan in early March ment to reschedule interest arrears and mediumand the initial drawing under the jumbo agree- and long-term principal payments falling due ment. The Mexican authorities announced the through the end of 1983. first of five schemes to deal with short-term, More important was evidence of gains in areas private-sector foreign credits, the foreign curren- thought to be most intractable. The current accy to be delivered later when available. This count improvement exceeded forecasts, and pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin • September 1983 jections made in late June suggested the possibil- union leaders to restore lost purchasing power. ity of a modest current account surplus for 1983 Reflecting the moderation in wages and increasas a whole. The government deficit had been ing slack in the Mexican economy, the rate of reduced even more sharply than planned. In late increase of consumer prices dropped from about July, the Bank of Mexico said it would soon 10 percent per month at the turn of the year to begin disbursement under the private-sector less than 4 percent in June. Thus, in major areas short-term debt schemes set up in the spring and the Mexican adjustment program appeared to be would announce later in the summer a scheme to well ahead of the schedule set eight months deal with medium- and longer-term private cred- earlier. After the close of the period, on August its. Significant progress was also made in the 23, the Bank of Mexico repaid all remaining area of wages and inflation. Agreements in the amounts due at maturity on the joint BIS-U.S. spring wage negotiations limited increases to 15 swap facility. • percent, far below the 50 percent requested by INTERNATIONAL AGREEMENTS ON growth. This will be the primary objective of a EXCHANGE MARKET INTERVENTION POLICY strengthened multilateral surveillance as agreed in Versailles. Excerpt from Annex to the Williamsburg C. In the formulation of our domestic economic Declaration (May 30, 1983) and financial policies, our countries should have 3. Exchange Rate Policy. We will improve con- regard to the behavior of our exchange rates, as sultations, policy convergence and international one possible indication of need for policy adjustcooperation to help stabilize exchange markets, ment. Close attention should also be given to the bearing in mind our conclusions on the Exchange interactions and wider international implications Market Intervention Study. of policies in each of our countries. D. Under present circumstances, the role of intervention can only be limited. Intervention Excerpt from "Statement on the can be useful to counter disorderly market condi- Intervention Study" (April 29, 1983) tions and to reduce short-term volatility. Intervention may also on occasion express an attitude We have reached agreement on the following: toward exchange markets. Intervention will normally be useful only when complementing and A. The achievement of greater exchange rate supporting other policies. We are agreed on the stability, which does not imply rigidity, is a need for closer consultations on policies and major objective and commitment of our counmarket conditions; and, while retaining our freetries. dom to operate independently, are willing to B. The path to greater exchange rate stability undertake coordinated intervention in instances must lie in the direction of compatible mixes of where it is agreed that such intervention would policies supporting sustainable noninflationary be helpful. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

693 Industrial Production Released for publication September 15 put of home goods and construction supplies; however, output of both autos and steel rose Industrial production increased an estimated 0.9 moderately after their large July advances. At percent in August following upward revised in- 150.5 percent of the 1967 average, industrial creases in July and June of 2.0 and 1.3 percent output in August has increased 11.6 percent respectively; the increases had previously been since November 1982, thus recovering about estimated at 1.8 and 1.1 percent. The August four-fifths of the decline that occurred since the gains in output were widespread among products high of 153.9 percent in July 1981. and materials. Sharp gains continued in the out- In market groupings, output of consumer 1967 = 100 TOTAL INDEX 170 Materials output 150 130 Products output J I L FINAL PRODUCTS 190 ~ MATERIALS Nondurable - 170 Business equipment \ - // v VN 150 / ^ \ Consumer goods ^ \ /Durable^ j AW 130 Defense and space 110 90 190 CONSUMER GOODS 170 /y y s . Nondurable TF^N ^ • 150 ^ Durable \ / v/ 130 v 110 X v 1967 = 100 170 150 130 190 170 150 130 ~ v/ Energy ZJ 110 1 l I 1 1 i 90 190 INTERMEDIATE PRODUCTS 170 Business supplies * ' \ 150 / Construction supplies 130 110 1969-70=100 Annual rate, millions of units 180 18 140 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: August. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin • September 1983 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Grouping 1983 1983 AAAuuuggg... 111999888222 tttooo AAAuuuggg... July Aug/ Apr. May June July Aug. 111999888333 Major market groupings Total industrial production 149.2 150.5 1.9 1.3 1.3 2.0 .9 8.7 Products, total 150.8 151.9 2.0 1.2 1.3 1.8 .7 7.0 Final products 148.9 149.8 2.1 1.2 1.3 1.7 .6 6.1 Consumer goods 155.0 155.9 2.4 1.8 1.3 1.8 .6 8.2 Durable 153.7 155.8 3.1 3.6 2.5 3.1 1.4 17.2 Nondurable 155.5 155.9 2.0 1.2 .8 1.3 .3 4.9 Business equipment 152.6 152.8 2.2 .5 2.0 1.3 .1 -.7 Defense and space 120.5 122.1 1.0 -.5 .3 2.1 1.3 11.5 Intermediate products 157.5 159.5 2.0 .9 1.4 2.1 1.3 10.2 Construction supplies 145.0 147.4 2.5 1.5 2.5 2.2 1.7 16.0 Materials 146.7 148.3 1.5 1.4 1.3 2.2 1.1 11.7 Major industry groupings Manufacturing 150.3 151.4 1.9 1.4 1.6 2.0 .7 9.7 Durable 136.7 137.7 2.2 1.5 1.8 2.6 .7 10.2 Nondurable 170.0 171.1 1.6 1.3 1.4 1.4 .6 9.1 Mining 115.4 117.0 -.9 1.1 .3 2.0 1.4 .1 Utilities 172.0 175.3 2.1 .2 -.4 1.7 1.9 4.0 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. goods increased 0.6 percent following a very Materials output advanced 1.1 percent—about sharp July increase. Autos were assembled at a half the rate of increase in July. The durable, seasonally adjusted annual rate of 7.5 million nondurable, and energy groups all increased, but units—up from a rate of 7.4 million in July, and industries such as coal, steel, and parts for industry schedules call for further increases in consumer durables evidenced smaller increases September. Production of home goods continued than occurred in the previous month. to increase rapidly, led by a further increase in In industry groupings, manufacturing produchousehold appliance output. Nondurable con- tion increased 0.7 percent in August, with similar sumer goods rose 0.3 percent. Production of increases in durable and nondurable manufacbusiness equipment changed little in August as turing. Mining output rose 1.4 percent. Utility industrial equipment rose rapidly, while com- output surged 1.9 percent, mostly because the mercial equipment declined because of a strike in hot weather increased use of electricity sharply the telephone apparatus industry. Production of for the second month in a row. defense and space equipment rose 1.3 percent, and output of construction supplies increased an estimated 1.7 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

695 Announcements AUTOMATED CLEARINGHOUSE SERVICE.- stroyed. Thus the new sensor will enable the NIGHTTIME DEPOSIT DEADLINE Federal Reserve Banks to provide depository institutions with a more consistent quality of The Federal Reserve announced on September currency. This is of particular importance for the 1, 1983, a modification of its automated clearing- operation of automatic teller machines and will house service to permit all types of automated benefit both consumers and depository instituclearinghouse (ACH) transactions to be depos- tions. ited at the nighttime deposit deadline. Installation of the new fitness sensor is to In conjunction with this action, the Board begin in early September 1983 and will be comapproved an interim fee schedule for nighttime pleted by February 1984. The purchase and ACH deposits, effective October 6, 1983. installation of the new fitness sensor culminates Since 1979, the use of the nighttime deposit a two-year, approximately $1 million research deadline has been restricted to cash concentra- and development effort by the Federal Reserve tion debits. Cash concentration debits are used System to develop an improved currency quality by businesses to draw down balances held at a sensor. number of depository institutions in order to To improve both the efficiency of the examinaaccumulate funds for investments or other pur- tion of used currency and quality control, the poses at a primary institution. Reserve Banks have in recent years installed 111 The addition of a later deposit deadline for high-speed, automated currency processing sysother types of transactions will provide origina- tems at 35 locations throughout the country. The tors of ACH payments with additional process- production capacity of the Bureau of Engraving ing time as well as better funds availability for and Printing has also been increased to support a these deposits. higher level of replacement of worn-out notes. The interim fee schedule for the ACH night- Since some nine billion notes are currently in time deposit deadline is as follows: circulation, it is expected that one to two years will be required for the Federal Reserve System Per-item surcharge to originators to achieve fully the high standard of quality of Cents notes in circulation that is the System's objec- Debits 5 tive. Next-day settlement credits 2 Two-day settlement credits 0 REGULATION L: AMENDMENTS NEW SENSOR FOR CURRENCY QUALITY The Federal Reserve Board announced on Au- The Federal Reserve System has announced the gust 31, 1983, adoption of amendments to its purchase of a new and improved type of curren- Regulation L (Management Official Interlocks), cy quality sensor for installation in its automated which implements the Depository Institutions high-speed systems for examination of used cur- Management Interlocks Act, to reflect changes rency and destruction of currency unfit for fur- in the act adopted by the Congress. ther circulation. The new sensor better discrimi- The Board acted after consideration of comnates between soiled notes and notes acceptable ment on proposals published late in 1982. The for recirculation and will cause notes that contain other federal financial institutions regulators are certain defects and transparent tape to be de- preparing similar changes in their regulations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin • September 1983 The Interlocks Act prohibits certain interlock- by the Board in approving the acquisition by ing relationships among officials of financial insti- BankAmerica Corporation of Charles Schwab tutions, including depository holding companies Corporation, a retail discount securities broker. and their affiliates. The Board acted after consideration of com- The amendments adopted by the Board, sub- ment received on a proposal made in February to stantially as proposed for comment, revise Regu- add these activities to the list of nonbanking lation L to accomplish the following: activities in Regulation Y. 1. Simplify procedures for obtaining excep- In its final ruling, as in its approval of the tions to the act and extensions of time to permit BankAmerica-Schwab application, the Board compliance with the act, by requiring only one specified that the brokerage activities are to be agency's approval; restricted to buying and selling securities solely 2. Ease the burden of compliance by redefining as agent for the account of customers (and does terms to avoid covering holding companies locat- not include securities underwriting or the provied in the same geographic area when neither sion of investment advice), and that margin lendcompany has an affiliated depository institution ing on securities is to be conducted by a nonbank in the area; subsidiary of the bank holding company, accord- 3. Broaden the exclusion from the prohibitions ing to the Board's Regulation T (Credit by Broof the act for management officials whose func- kers and Dealers). tions relate exclusively to retail merchandising and manufacturing; 4. Broaden the circumstances under which the ASSETS OF OVERSEAS BRANCHES exception to the prohibitions of the act is avail- OF MEMBER BANKS able on grounds of disruptive management loss; 5. Clarify the circumstances that require termi- The Federal Reserve Board reported on August nation—due to changes in circumstances—of 22, 1983, that the combined assets of the overmanagement official interlocks that are not seas branches of member banks decreased durgrandfathered, and provide that the grace period ing 1982 by $2.5 billion—or 0.6 percent—to a of 15 months for compliance following such total of $388.5 billion. Combined assets, excludchanges apply whether the change in circum- ing claims on other foreign branches of the same stances is voluntary or involuntary. bank, also dropped by 0.6 percent from the The five federal financial institutions regula- comparable level of the previous year-end to tors (Comptroller of the Currency, Federal De- $341.3 billion at December 31, 1982. Both meaposit Insurance Corporation, Federal Home sures reflect an abrupt change in the earlier Loan Bank Board, Federal Reserve Board, and pattern of growth in the assets of foreign the National Credit Union Administration) are branches, which increased at an annual rate preparing a joint Federal Register notice of revi- exceeding 20 percent during the 1970s and about sions in their regulations implementing the De- 10 percent annually in 1980 and 1981. pository Institutions Management Interlocks The recent decline reflects the following prin- Act, to be published shortly. cipal factors: (1) a general decline in international trade and finance during 1982; (2) the higher exchange rate value of the U.S. dollar, which REGULATION Y: AMENDMENTS lowered the dollar value of foreign branch assets denominated in foreign currencies; and (3) the The Federal Reserve Board has amended its emergence of domestic international banking fa- Regulation Y (Bank Holding Companies and cilities (IBFs), which were authorized by the Change in Bank Control) to add securities bro- Board beginning in December 1981. Data are not kerage and related margin lending to the list of available to identify the precise impact of IBFs activities generally permissible for bank holding on foreign branch assets. However, IBFs serve as a substitute for foreign branches for many companies. Individual applications will be conpurposes. sidered on their own merits. The action codifies a previous position taken At year-end 1982, 162 member banks operated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 697 Assets and liabilities of overseas branches of member banks, year-end 1982 Millions of dollars Bahamas and U.S. overseas Item United Kingdom Continental Cayman Latin Far East Near East areas and Totals1 and Ireland Europe America and Africa Islands Trust Territories Assets Cash and balances with banks 37,681 11,241 41,102 2,205 10,517 2,289 1,493 106,531 Loans, net 44,796 19,970 37,912 12,711 36,627 4,849 5,456 162,322 Due from other non-U.S. branches of own bank 30,970 3,540 7,778 204 2,773 390 1,500 47,155 Due from head office and U.S. branches 12,912 231 16,800 222 89 157 167 30,580 Due from consolidated subsidiaries 7,149 939 1,267 944 1,698 78 494 12,567 Other assets 8,318 4,442 3,395 2,450 9,292 396 1,034 29,327 Total 141,827 40,365 108,256 18,734 60,995 8,159 10,147 388,484 Liabilities Deposits of other banks 54,366 17,560 25,912 4,876 10,049 3,047 1,235 117,045 Other deposits 66,347 8,151 43,480 4,362 17,079 2,973 6,419 148,811 Due to other non-U.S. branches of own bank 6,837 5,388 7,450 3,299 17,070 11,,440022 11,,665533 4433,,009999 Due to head office and U.S. branches 7,137 3,015 27,496 2,543 5,816 184 79 4466,,227700 Due to consolidated subsidiaries 248 2,864 2,040 1,292 1,181 97 254 7,976 Other liabilities 6,892 3,387 1,978 2,363 9,800 457 507 25,284 Total1 141,827 40,365 108,256 18,734 60,995 8,159 10,147 388,484 Number of branches 64 119 168 240 207 49 53 900 1. Amounts may not add to totals because of rounding. SOURCE. Board of Governors of the Federal Reserve System. 900 branches in foreign countries and overseas The other federal bank regulatory agencies are territories—a net increase of 59 branches during considering similar revisions of their rules. the year. The accompanying table shows the The Garn-St Germain Depository Institutions distribution of these branches by geographic Act of 1982 amended section 22 of the Federal area. Reserve Act, dealing with member bank credit to These data are derived from reports of condi- bank insiders, including executive officers, direction filed at the end of the year with the Comp- tors, principal shareholders, and their related troller of the Currency and the Federal Reserve interests. System. The reports reflect all assets and liabil- Previously, the Federal Reserve Act and the ities of overseas branches whether denominated Board's Regulation O limited loans by a state in U.S. dollars or in other currencies and differ in member bank to executive officers to specific some respects from other foreign branch data dollar amounts for a home mortgage, education published by the System. Nondollar amounts of an executive officer's children, and for all have been translated into dollars at the year-end other purposes. The new legislation—which was exchange rates. supported by the Federal Reserve—eliminated these specific dollar limitations, and the Board in October 1982 conformed Regulation O to the REVISIONS TO REGULATION O new legislation with respect to home mortgage and education loans. The Federal Reserve Board has adopted in final To further implement the provisions of the form revisions of its Regulation O (Loans to new legislation, the Board amended Regulation Executive Officers, Directors, and Principal O as follows: Shareholders of Member Banks) to implement recent legislative changes. The amendments are • With respect to loans for purposes other than effective October 11, 1983. home mortgages or education, a member bank The Board acted after consideration of com- may lend to an executive officer up to $25,000 or ment received on proposals published in May. 2.5 percent of its capital and unimpaired surplus, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin • September 1983 whichever is greater, with an overall limit of Stephen R. Malphrus has been appointed to $100,000. the position of Assistant Staff Director for Man- • Prior approval is required of a state member agement, Office Automation and Technology, in bank's board of directors for a loan to an insider the Office of the Staff Director for Management, (including related interests of the insider) that, effective August 29, 1983. Mr. Malphrus joined taken together with other such loans, exceeds the Board's staff in April 1975 and assumed his $25,000, or 5 percent of the bank's capital and present position as Chief of the Banking Statissurplus. tics Section in the Division of Data Processing in • Lending to an insider may not exceed, in the December 1982. He holds a B.A. from Washingaggregate, the limit of credit that may be extend- ton State University and an M.A. from Central ed to any one borrower (15 percent of the bank's Michigan University. capital and surplus for loans not fully collateral- Richard J. Manasseri has been named Assistized and an additional 10 percent of the bank's ant Director for Data Systems in the Division of capital and surplus for loans that are fully collat- Data Processing, effective August 29, 1983. Mr. eralized). Manasseri joined the Board in May 1971 and • Prior approval of the bank's directors is re- assumed his present position as Chief of the Data quired for all loans exceeding $500,000 in the Base Development Section in March 1975. He aggregate. holds a B.S. from Boston College and an M.A. from the University of Maryland. Steven M. Roberts has been appointed Assist- CHANGES IN BOARD STAFF ant to the Chairman, effective September 30, 1983. Mr. Roberts was Vice President of Govern- The Board of Governors has announced the ment Affairs at the American Express Company following changes in its official staff. in Washington, D.C. His other experience in- Edward C. Ettin has been transferred from the cludes more than three years as a chief econoposition of Deputy Staff Director in the Office of mist for the Senate Committee on Banking, Staff Director for Monetary and Financial Policy Housing, and Urban Affairs and more than six to become Deputy Director in the Division of years as an economist in the Board's Division of Research and Statistics, effective September 12, Research and Statistics. Mr. Roberts holds a 1983. B.A. from Rutgers University and an M.S. and Donald L. Kohn has been promoted from Ph.D. from Purdue University. Associate Director in the Division of Research and Statistics to Deputy Staff Director for the Office of Staff Director for Monetary and Finan- SYSTEM MEMBERSHIP: cial Policy, effective September 12, 1983. ADMISSION OF STATE BANKS Elliott C. McEntee, Assistant Director, Division of Federal Reserve Bank Operations, has The following bank was admitted to membership been promoted to Associate Director, with sen- in the Federal Reserve System during the period ior supervisory responsibility for checks, elec- August 10 through September 8, 1983: tronic funds transfer, cash, fiscal, protection, and pricing functions, effective August 29, 1983. California Michael J. Prell has been promoted from Sen- Roseville Placer Bank of Commerce ior Associate Director to Deputy Director in the Division of Research and Statistics, effective September 12, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

699 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON JULY 12-13, 1983 With inventories depleted and sales strong, businesses have been meeting demands out of Domestic Policy Directive current production and appear to have started rebuilding stocks in some lines. The index of The information reviewed at this meeting sug- industrial production rose 1.1 percent in May to a gested that the economic recovery was proceed- level 7 percent above its trough six months ing at a strengthened pace. The latest data sug- earlier, and available data, including the statisgested that growth in real GNP may have been tics on employment and hours worked in manueven more rapid in the second quarter than the facturing, suggested another sizable gain in out- 6Vi percent preliminary estimate of the Com- put in June. As in other recent months, gains in merce Department, and it appeared that relative- output and employment occurred across a broad ly strong growth would be sustained into the range of industries. Nonfarm payroll employcurrent quarter. Expenditures for consumer ment rose nearly 350,000 in June, after an ingoods were especially large, and a swing in crease of about 300,000 in May. The civilian business inventories from liquidation to accumu- unemployment rate declined to 10.0 percent in lation seemed to be developing more rapidly than June, down 0.8 percentage point from its peak in anticipated earlier. December. The dollar value of retail sales advanced ap- Data on new orders and shipments continued preciably in May, marking the third consecutive to indicate improvement in the demand for busimonthly increase. Outlays at general merchan- ness equipment. Production of business equipdise outlets and at furniture and appliance stores ment, which had contracted sharply in 1982 and were brisk, but sizable expenditures on autos had continued to decline during the first quarter and automotive products continued to be an of this year, rose substantially in May for the important factor in the strength of retail sales. second month in a row. Sales of new domestic automobiles rose to a rate The producer price index for finished goods of 7.2 million units in June, the strongest monthly (PPI) and the consumer price index (CPI) inselling pace in nearly two years. Survey reports creased 0.3 percent and 0.5 percent respectively of marked improvement in consumer confidence in May, largely reflecting a sharp rise in energy accompanied the vigorous recent gains in con- prices at both the producer and the consumer sumer spending. levels. Exclusion of the volatile energy compo- Total private housing starts increased consid- nents would have resulted in no change in the erably in May to an annual rate of nearly 1.8 PPI and nearly a halving of the increase in the million units, following small declines during the CPI. During the first five months of 1983, the PPI two preceding months. Starts in May were about declined at an annual rate of about 2Va percent 40 percent above their average level in the fourth and the CPI increased at an annual rate of 3 quarter of 1982. Other indicators of housing percent. Over the same period, the index of activity also exhibited strength: newly issued average hourly earnings for private nonfarm propermits for residential buildings rose further in duction workers rose at an annual rate of AVi May as did combined sales of new and existing percent, compared with an increase of 6 percent homes. Both measures were more than 30 per- for the year 1982. cent above the average levels in the fourth quar- In foreign exchange markets the trade-weightter of last year. ed value of the dollar against major foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin • September 1983 currencies rose more than 2Vi percent in late the year was estimated to have remained within May and early June to a record level; subse- the Committee's annual range of 8V2 to WV2 quently it had fluctuated in a narrow range. percent, growth in debt appeared to have been Reflecting the strength of the economy and the more rapid in the second than in the first quarter. persistently high level of the dollar, the U.S. This development reflected an acceleration in foreign trade deficit increased sharply in the borrowing by the U.S. Treasury as well as a April-May period from its reduced first-quarter pickup in private credit demand. Total credit rate; exports declined and both oil and non-oil outstanding at U.S. commercial banks expanded imports rose. at an annual rate of nearly 10 percent in June and At its meeting on May 24, 1983, the Committee in the second quarter as a whole. Sizable acquisihad decided that open market operations in the tions of Treasury securities continued to make period until this meeting should be directed at the major contribution to the expansion in bank increasing only slightly the degree of restraint on credit in June, but real estate lending strengthreserve positions. That action had been taken ened further and business loans registered their against the background of growth in M2 and M3 first significant increase since January. remaining within their long-term ranges and Strong demands for money were associated slightly below the annual rates of 9 and 8 percent with relatively rapid expansion in total reserves respectively established earlier for the quarter, in June, but growth in nonborrowed reserves Ml growing substantially above anticipated lev- (plus extended credit at the discount window) els for some time, and evidence of an accelera- was considerably slower than the increase in tion in the rate of business recovery. The Com- total reserves. With open market operations mittee had agreed that lesser restraint on reserve holding back on the supply of reserves, deposipositions would be appropriate in the context of tory institutions increased their short-term bormore pronounced slowing of growth in the rowing at the discount window and sought rebroader monetary aggregates relative to the serves more actively in the federal funds market. paths implied by the long-term ranges and decel- Adjustment borrowing from the Federal Reserve eration of Ml, or of indications of a weakening in discount window (including seasonal borrowing) the pace of economic recovery. The intermeeting rose to about $680 million in June and rose range for the federal funds rate was retained at 6 further in the first part of July; borrowing tempoto 10 percent. rarily bulged to over $1 billion in the reserve Growth in M2 and M3 accelerated in May and statement week that encompassed the midyear continued relatively strong in June, with both bank statement date and the July 4 holiday aggregates expanding at an estimated annual rate period. The federal funds rate traded in a range of about 10 percent. For the March-to-June peri- of 83/ 4 to 9 percent for most of the period, but od both M2 and M3 grew at an annual rate of most recently the rate had moved up into the 9 to about 8V2 percent, a bit below the quarterly 9l/8 percent range; somewhat higher rates were objective established for M2 and a bit above that temporarily associated with the management of for M3. Relative to the longer-run ranges, M2 by reserve positions over the midyear statement June was somewhat above the midpoint of its date and the holiday period. range and M3 was around the upper limit of its Other short-term market rates rose about 3/4 to range for the year. 1 percentage point during the intermeeting peri- Ml, which had surged to an annual rate of od, reflecting in part responses to the modest growth of about 26 percent in May, expanded at tightening of reserve market conditions that was a rate of around IOV2 percent in June. From the under way and apparently also some anticipatory fourth quarter of 1982 to June, Ml grew at an reaction to the strength of incoming data on the annual rate of about 133/4 percent, considerably monetary aggregates and economic activity. above the Committee's tentative range of 4 to 8 Most long-term interest rates on taxable securipercent for the year. ties increased about 3/4 percentage point over the Though the pace of expansion in debt of do- period, while yields on tax-exempt issues were mestic nonfinancial sectors over the first half of little changed on balance. Average rates on new Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 701 commitments for fixed-rate conventional home put increasing upward pressure on interest rates mortgage loans at savings and loan associations and curtail the availability of financing to private also rose about 3A percentage point. borrowers. Sectors heavily dependent on credit, Given the momentum in economic activity that such as housing and business investment, would appeared to be in train, the staff projections be particularly affected, as would small busipresented at this meeting indicated that growth in nesses. The view was expressed that the rereal GNP in the second half of the year would be straining impact on private credit demands and somewhat higher than had been anticipated earli- economic activity of even current relatively high er. Final purchases in private domestic sectors, interest rates—which seemed especially high in buoyed by expenditures for consumer goods, real terms—could well be underestimated, and a were expected to be maintained at a relatively view was expressed that a decline in interest strong pace in the latter half of the year and rates from present levels would probably be businesses were expected to be adding apprecia- needed to prolong the recovery during 1984. bly to inventories. A gradual decline in the Members generally continued to regard the unemployment rate was anticipated over the near-term outlook for prices as favorable, and it balance of the year, and a further decline was was observed that wage increases remained quite expected in 1984 in association with continued, moderate. However, several members saw acthough more moderate, economic recovery. Up- celeration in the rate of increase in prices as a ward price pressures were expected to be rela- likely prospect for 1984. Reference was made to tively modest over the projection horizon, as- a number of developments that were potentially suming that inflationary expectations remained unfavorable, including possible increases in damped, with related restraint on wage and price prices of key farm products as a consequence of policies of labor and business. governmental policies to reduce farm supplies, In their review of the economic situation and and pressures stemming from rising prices of outlook, the members focused on evidence of the imports if the foreign exchange value of the economy's strong forward momentum and the dollar were to weaken, as many observers anticiprospects for continuing sizable gains in real pated. It was also pointed out that actual price GNP during the months immediately ahead. increases would be sensitive to expectations as Consumer spending, which along with housing conditioned by fiscal and monetary policy develhas played a major role in fostering the recovery, opments. was likely to be sustained by the further reduc- The individual members of the Committee had tion in personal income taxes at midyear. Most prepared specific projections of economic activiof the members agreed, however, that economic ty and prices for this meeting. With regard to activity would probably expand at a more moder- growth in real GNP, the projections had as their ate pace later in the year and in 1984. Spending central tendency a range of 5 to 53A percent for for business inventories was expected to become 1983 and 4 to AVI percent for 1984, measured a less expansive factor as the recovery proceed- from fourth quarter to fourth quarter. Most of the ed, and the outlook for exports remained rela- members projected a rise in the implicit GNP tively weak. The members also referred to a deflator in a range of 4]A to 43A percent during number of potential threats to the recovery, 1983 and 4lA to 5 percent during 1984. The rate of including financial strains related to the debt unemployment was expected to decline gradualproblems of numerous developing countries and ly over the projection period, with most memthe adverse impact of continuing large federal bers anticipating an average rate of about 91/2 deficits in the absence of measures to reduce percent in the fourth quarter of 1983 and 8 XA to them. S3A percent in the fourth quarter of 1984. While the expansive fiscal policy added to At its meeting on May 24, the Committee had purchasing power and supported consumption, reviewed the growth ranges for the monetary and members were concerned that the need to fi- credit aggregates that it had established in Februnance large Treasury borrowing in a period when ary for the year 1983 and had decided not to private credit demands were accelerating would change those ranges but to review them further Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Federal Reserve Bulletin • September 1983 at this meeting. For the broader monetary aggre- regard to the appropriate ranges that should be gates, on which the Committee had agreed to established for growth in M2 and M3 in 1984. place principal weight, the ranges included annu- Most favored a reduction of Vi percentage point al growth rates of 7 to 10 percent for M2, from the 1983 ranges, but in the course of the measured from February-March 1983 to the discussion two members expressed a preference fourth quarter of 1983, and 6V2 to W2 percent for for retaining the 1983 ranges. One member be- M3, measured from the fourth quarter of 1982 to lieved that the prospective relationship between the fourth quarter of 1983. The range for moni- M2 and nominal GNP was subject to a very high toring Ml was set at 4 to 8 percent and an degree of uncertainty and that therefore no speassociated range for total domestic nonfinancial cific target should be set for that aggregate at this debt was estimated at 8V2 to IV/2 percent, both time. for the period from the fourth quarter of 1982 to In the view of most members, the establishthe fourth quarter of 1983. ment of lower ranges for 1984 would be consis- At this meeting the Committee reviewed its tent with the Committee's objective of providing target ranges for 1983 and established tentative adequate monetary growth to support continued ranges for 1984 in light of the basic objectives of economic recovery while encouraging progress encouraging sustained economic recovery while toward reasonable price stability. It was recogfostering continued progress toward price stabil- nized, however, that attainment of these broad ity and promoting a sustainable pattern of inter- economic objectives would be greatly facilitated national transactions. In setting these ranges, the by complementary governmental policies, nota- Committee recognized that the relationships bly further actions to reduce future federal defiamong the money and credit aggregates and cits. Members who preferred to retain the curnominal GNP in the period ahead were subject to rent M2 and M3 ranges for 1984 were concerned considerable uncertainty. It was therefore under- that lower ranges might prove to be more restricstood that the significance to be attached to tive than was desirable and, given the uncertainmovements in the various aggregates in the im- ties that were involved, they preferred not to plementation of policy would depend on continu- reduce the ranges unless there were substantial ing appraisal of evidence about the strength of evidence that inflationary pressures were revivthe economic recovery, the performance of ing. In the view of most members, however, prices, and emerging conditions in domestic and modest and timely action to curb monetary international financial markets. growth would enhance, rather than reduce, pros- In the Committee's discussion, all of the mem- pects for sustaining the economic recovery and bers supported a proposal to retain the 1983 for lower interest rates over time in the context ranges for growth in M2 and M3 established in of diminishing inflationary pressures. February. Recent experience suggested that ac- A majority of the members also supported a tual growth of M2 and especially of M3 might be proposal to retain for 1983 the associated range in the upper half of their respective ranges for the for total domestic nonfinancial debt that had year rather than near the midpoints as anticipat- been set earlier but to reduce that range by V2 ed earlier. The members noted that the massive percentage point for 1984. Some sentiment was shifts of funds into M2 stemming from the intro- expressed in favor of a reduction of 1 percentage duction of money market deposit accounts and point for 1984 on the ground that the range the much more limited shifts relating to the new contemplated by the majority was a little high in Super NOW accounts had abated about as antici- relation to the central tendency of the members' pated; and they assumed that these accounts, projections of nominal GNP; in the past, growth along with the further deregulation of interest in this aggregate had tended to approximate rates on time deposits scheduled for October 1, growth in nominal GNP. However, a majority of would have relatively little impact on growth of the members concluded that allowance should be the broader aggregates over the balance of 1983 made for expansion in total debt in 1984 in excess and in 1984. of nominal GNP growth. Such a development would be consistent with this year's experience The members differed only marginally with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 703 and might be connected with the relatively rapid retained for Ml. In this view Ml would continue expansion in federal debt. to be given reduced weight in the formulation of The members discussed at considerable length monetary policy and primary emphasis would what longer-run ranges to establish for Ml and continue to be placed on the broader aggregates. what weight the Committee should attach to that A few members, however, preferred to suspend aggregate in the implementation of monetary the targeting of Ml at this time because they policy. The income velocity of Ml—the ratio of viewed its prospective behavior as too uncertain nominal GNP to Ml—had deviated substantially to permit the establishment of a meaningful from normal cyclical patterns since the beginning range. A subsidiary reason cited in support of of 1982. It had declined more sharply and longer this view was the difficulty of communicating a than usual during the recent recession and had proper assessment of the reduced role of Ml to failed to rebound as quickly as in the past with outside observers so long as the Committee the onset of recovery. A number of factors continued to set a specific range. One result was apparently contributed to this unusual behavior, a tendency for participants in financial markets including for a time precautionary demands for to attach undue importance to weekly fluctuahighly liquid balances by the public in the face of tions in Ml data, with the consequence that on various economic and financial uncertainties. occasion published figures had a needlessly un- Over the last several months, the behavior of Ml settling impact on financial markets. velocity seemed to reflect the greater sensitivity In reviewing the Ml range for 1983, members of this aggregate to declines in market interest discussed whether that range should continue to rates probably resulting from the much increased be based on the fourth quarter of 1982 or rebased share of interest-bearing NOW accounts in the on the second quarter of 1983 in view of the total. NOW accounts, which may serve as a probability of a prospective change in the behavsavings vehicle as well as fulfilling transactions ior of velocity. If the fourth quarter of 1982 were needs, have been the most rapidly growing com- continued as a base, Ml growth would need to be ponent of Ml since they were introduced on a sharply curtailed to the point of little or no nationwide basis at the beginning of 1981. Regu- growth for the rest of the year; alternatively, the lar NOW accounts bear a ceiling rate of 5V* Ml range for the year would need to be raised percent. The sharp drop in market rates during substantially from the current 4 to 8 percent, the second half of 1982 made the opportunity given the rapid expansion during the first half of cost of holding NOW accounts relatively small the year, to allow for any significant further and, with a lag, increased the demand for them. growth in the second half. If instead Ml were It was noted, though, that the recent expansion rebased on the second quarter, or perhaps on in Ml, with currency and demand deposits show- June, some members were concerned that this ing strength as well, probably also reflected could be misconstrued as an indication that the growing transaction needs relating to the recov- Committee was now weighing Ml more heavily ery in economic activity. in the formulation of monetary policy. However, Against this background, a key uncertainty most members favored rebasing the Ml range for confronting the Committee was whether Ml ve- 1983 on the second quarter to help make it clear locity in the future would exhibit characteristics that the rapid growth in M1 over the past several more in line with earlier postwar experience. quarters was related to special circumstances Recent evidence seemed to suggest that the and that the Committee expected and wished to decline in Ml velocity was ending, as might be see slower growth in the future. Such an apexpected as the lagged upward effect on demand proach, it was stressed, did not in itself imply from earlier declines in interest rates wore off placing more weight on Ml relative to the other and as business and consumer attitudes became aggregates in policy implementation. more optimistic. The members who preferred to continue set- While acknowledging the major uncertainties ting a longer-run range for Ml generally also that existed, a majority of the members nonethe- agreed that it should encompass growth rates less believed that a monitoring range should be close to, or below, the Committee members' Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Federal Reserve Bulletin • September 1983 outlook for expansion in nominal GNP. At one established earlier for growth in M2 and M3 for 1983. extreme the Ml range could allow for very little The Committee also agreed on tentative growth ranges change, or perhaps only a minor increase, in Ml for the period from the fourth quarter of 1983 to the fourth quarter of 1984 of 6V2 to 9'/2 percent for M2 and velocity to accommodate the possibility that the 6 to 9 percent for M3. The Committee considered that demand for Ml would remain stronger than it growth in Ml in a range of 5 to 9 percent from the had been in the earlier postwar period, given second quarter of 1983 to the fourth quarter of 1983, income and interest rates. At the other extreme and in a range of 4 to 8 percent from the fourth quarter such a range could allow for a fairly sizable of 1983 to the fourth quarter of 1984 would be consistent with the ranges for the broader aggregates. The increase in Ml velocity; however, given the associated range for total domestic nonfinancial debt ongoing changes in the composition of Ml, it was was reaffirmed at 8V2 to IV/2 percent for 1983 and recognized that the increase could be somewhat tentatively set at 8 to 11 percent for 1984.1 less than experienced in previous cyclical expansions. Votes for this action: Messrs. Volcker, Solomon, Gramley, Guffey, Keehn, Martin, Partee, Rice, Discussion of specific ranges for Ml centered Roberts, Mrs. Teeters, and Mr. Wallich. Vote on 5 to 9 percent or 4 to 8 percent for the second against this action: Mr. Morris. half of 1983 and the year 1984, although one member preferred a lower range for 1984. Most Mr. Morris dissented from this action because of the members indicated that they could accept he did not believe that target ranges should be set a proposal to establish a range for growth in Ml for Ml and M2. Because of financial innovations, of 5 to 9 percent for the period from the second these aggregates in his view are no longer prequarter of 1983 to the fourth quarter of 1983 and a dictably related to nominal GNP—an essential tentative range of 4 to 8 percent for the period characteristic of an intermediate target for monefrom the fourth quarter of 1983 to the fourth tary policy. Thus, the Committee should turn to quarter of 1984. It was understood that growth broader financial aggregates, specifically M3, within the lower portions of those ranges would total liquid assets, and total domestic nonfinanbe appropriate if the velocity of Ml tended cial debt as targets for monetary policy. toward a relatively normal cyclical increase as In the Committee's discussion of a policy the recovery proceeded; growth in the upper course for the short run, most of the members portions of the ranges would be acceptable if the indicated that they could support a slight further upturn in Ml velocity remained relatively weak. increase in the degree of reserve restraint. In the If there should occur an unexpectedly rapid context of an economy that was much stronger increase or a decline in Ml velocity, the Committhan expected, these members believed that such tee would reassess the ranges; it would in any a policy would provide some insurance against event review the tentative range for 1984 early in the possible need for a considerably greater the year in the light of economic and financial degree of restraint later to maintain control on conditions prevailing then. inflation and growth in money and credit. For the In implementing policy, the Committee agreed third quarter, the members expected this policy that primary emphasis would continue to be to be associated with considerable moderation in placed on the broader aggregates. The behavior the growth of the monetary aggregates, especialof Ml would be monitored, with any increase in ly Ml, although they recognized the substantial the weight placed on that aggregate dependent on uncertainties that governed the short-run perevidence that its velocity behavior was assuming formance of the monetary aggregates, again esa more predictable pattern. Expansion in total pecially that of Ml. nonfinancial domestic debt would also be moni- One member expressed a preference for sometored in assessing the behavior of the monetary what more tightening of reserve conditions over aggregates and the general stance of monetary policy. At the conclusion of its discussion the Com- 1. The Board's Midyear Monetary Policy Report pursuant to the Full Employment and Balanced Growth Act of 1978 mittee voted for the following longer-run policy: (the Humphrey-Hawkins Act) was transmitted to the Con- The Committee reaffirmed the longer-run ranges gress on July 20, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 705 the weeks ahead, while another favored no consultation of the Committee, would remain at change from the existing degree of restraint. In 6 to 10 percent. the view of several members, a slight further At the conclusion of its discussion, the Comtightening by the Committee need not itself be mittee issued the following domestic policy direflected in sizable further changes in interest rective to the Federal Reserve Bank of New rates generally, given the increases that had York: already occurred. It was recognized, however, The rapid growth in real GNP in the second quarter that actual movements in market rates would and other information reviewed at this meeting suggest depend importantly on economic and financial that the economic recovery is proceeding at a strengthdevelopments in the weeks ahead, including the ened pace. Expenditures on consumption and housing performance of the monetary aggregates, the expanded substantially in the second quarter and outlook for the budget, and emerging private businesses apparently began to add to inventories after a period of sharp liquidation. Nonfarm payroll employcredit demands against the background of a ment rose considerably in May and June and the rapidly expanding economy. It was also suggest- civilian unemployment rate declined to 10.0 percent in ed that such an approach to short-run policy June. Industrial production continued to rise markedly would improve prospects for the development of in May and partial data suggest a sizable gain in June. conditions that would permit some easing in the Data on new orders and shipments continued to indicate improvement in the demand for business equipdegree of reserve restraint later. ment. In May housing starts increased substantially At the conclusion of the Committee's discus- following small declines earlier and retail sales rose sion, a majority of the members indicated that appreciably further. Average prices and the index of they favored a slight increase in the degree of average hourly earnings have risen at a reduced pace in the first five months of 1983. reserve restraint for the near term. It was antici- The weighted average value of the dollar against pated that such a policy course would be associmajor foreign currencies rose substantially in late May ated with growth of M2 and M3 at annual rates of and the first half of June and subsequently has fluctuabout SVI and 8 percent respectively for the ated in a narrow range. Reflecting the strength of the period from June to September. Primary weight U.S. economy and the persistent high level of the would be placed on the performance of these dollar, the U.S. foreign trade deficit increased sharply in April-May from its reduced first-quarter rate; exbroader monetary aggregates in evaluating the ports declined and both oil and nonoil imports rose. conduct of open market operations. The mem- Strong growth in the broader aggregates in May and bers agreed that lesser restraint on reserve condi- June raised M2 to a level somewhat above the midtions would be acceptable in the event of a point of the Committee's range for 1983 and M3 to significant shortfall in the growth of the aggre- around the upper limit of its range. Ml grew very rapidly over both months and was well above its range gates over the period ahead, while somewhat for the year. Growth in debt of domestic nonfinancial greater restraint would be acceptable in the cqpsectors appears to have picked up in the second text of more rapid growth in the aggregates. It quarter. Interest rates have risen appreciably since was understood that the need for greater or early May. lesser reserve restraint would also be evaluated The Federal Open Market Committee seeks to foster monetary and financial conditions that will help to on the basis of available evidence about trends in reduce inflation further, promote growth in output on a economic activity and prices and conditions in sustainable basis, and contribute to a sustainable patdomestic and international financial markets, in- tern of international transactions. At its meeting in cluding foreign exchange markets. The Commit- February the Committee established growth ranges for tee anticipated that its third-quarter objectives monetary and credit aggregates for 1983 in furtherance of these objectives. The Committee recognized that for the broader aggregates would be consistent the relationships between such ranges and ultimate with a deceleration in Ml growth to an annual economic goals have been less predictable over the rate of around 7 percent from June to September, past year; that the impact of new deposit accounts on and that expansion in total domestic nonfinancial growth ranges of monetary aggregates cannot be deterdebt would remain within the range of 8V2 to 11V2 mined with a high degree of confidence; and that the availability of interest on large portions of transaction percent established for the year. It was agreed accounts, declining inflation, and lower market rates that the intermeeting range for the federal funds of interest may be reflected in some changes in the rate, which provides a mechanism for initiating historical trends in velocity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706 Federal Reserve Bulletin • September 1983 In establishing growth ranges last February for the The Committee seeks in the short run to increase aggregates for 1983 against this background, the Com- slightly further the existing degree of reserve restraint. mittee felt that growth in M2 might be more appropri- The action is expected to be associated with growth of ately measured after the period of highly aggressive M2 and M3 at annual rates of about 8V2 and 8 percent marketing of money market deposit accounts had respectively from June to September, consistent with subsided. The Committee also felt that a somewhat the targets established for these aggregates for the wider range was appropriate for monitoring Ml. With year. Depending on evidence about the strength of these understandings, the Committee established the economic recovery and other factors bearing on the following growth ranges: for the period from Febru- business and inflation outlook, lesser restraint would ary-March of 1983 to the fourth quarter of 1983, 7 to 10 be acceptable in the context of a significant shortfall in percent at an annual rate for M2, taking into account growth of the aggregates from current expectations, the probability of some residual shifting into that while somewhat greater restraint would be acceptable aggregate from non-M2 sources; and for the period should the aggregates expand more rapidly. The Comfrom the fourth quarter of 1982 to the fourth quarter of mittee anticipates that a deceleration in Ml growth to 1983, 6V2 to 9l/z percent for M3, which appeared to be an annual rate of around 7 percent from June to less distorted by the new accounts. For the same September will be consistent with its third-quarter period a tentative range of 4 to 8 percent was estab- objectives for the broader aggregates, and that expanlished for Ml assuming that Super NOW accounts sion in total domestic nonfinancial debt would remain would draw only modest amounts of funds from within the range established for the year. The Chairsources outside Ml and assuming that the authority to man may call for Committee consultation if it appears pay interest on transaction balances was not extended to the Manager for Domestic Operations that pursuit beyond presently eligible accounts. An associated of the monetary objectives and related reserve paths range of growth for total domestic nonfinancial debt during the period before the next meeting is likely to was estimated at 8V2 to 11percent. These ranges be associated with a federal funds rate persistently were reviewed at the May meeting and left unchanged, outside a range of 6 to 10 percent. pending further review in July. At this meeting, the Committee reaffirmed the long- Votes for this action: Messrs. Volcker, Solomon, er-run ranges established earlier for growth in M2 and Gramley, Guffey, Keehn, Martin, Morris, Partee, M3 for 1983. The Committee also agreed on tentative Rice, and Roberts. Votes against this action: Mrs. growth ranges for the period from the fourth quarter of Teeters and Mr. Wallich. 1983 to the fourth quarter of 1984 of 6V2 to 9Vi percent for M2 and 6 to 9 percent for M3. The Committee Mrs. Teeters dissented from this action beconsidered that growth in Ml in a range of 5 to 9 percent from the second quarter of 1983 to the fourth cause she preferred to direct open market operaquarter of 1983, and in a range of 4 to 8 percent from tions toward maintaining the existing degree of the fourth quarter of 1983 to the fourth quarter of 1984 reserve restraint. In her view the additional would be consistent with the ranges for the broader upward pressure on interest rates from further aggregates. The associated range for total domestic restraint on reserve positions was unnecessary nonfinancial debt was reaffirmed at 8V2 to IIV2 percent for 1983 and tentatively set at 8 to 11 percent for 1984. and would retard activity in interest-sensitive In implementing monetary policy, the Committee sectors of the economy and threaten the sustainagreed that substantial weight would continue to be ability of the recovery. placed on the behavior of the broader monetary aggre- Mr. Wallich dissented from this action because gates. The behavior of Ml and total domestic nonfihe favored a directive calling for somewhat nancial debt will be monitored, with the degree of weight placed on Ml over time dependent on evidence greater reserve restraint. In his judgment, such a that velocity characteristics are resuming more pre- policy course would contribute to better control dictable patterns. The Committee understood that of the monetary aggregates and, given the strong policy implementation would involve continuing apmomentum of the economy, would be more praisal of the relationships between the various mealikely to prove consistent with the Committee's sures of money and credit and nominal GNP, including evaluation of conditions in domestic credit and foreign longer-run objectives of fostering sustained ecoexchange markets. nomic recovery while curbing inflation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

707 Legal Developments REVISION OF REGULATION G Section 207.2—Definitions Regulation G—Securities Credit by Persons Other The terms used in this part have the meanings given Than Banks, Brokers, or Dealers, has been revised in them in section 3(a) of the Act or as defined in this its entirety. The new Regulation G is written in simpli- section. fied language and organized in a more logical fashion. Certain regulatory burdens and obsolete provisions (a) "Affiliate" means any person who, directly or have been removed. indirectly, through one or more intermediaries, con- Effective August 31, 1983, the Board revises Regula- trols, or is controlled by, or is under common control tion G to read as follows: with the lender. (b) "Carrying" credit is credit that enables a customer Part 207—Securities Credit by Persons Other to maintain, reduce, or retire indebtedness originally Than Banks, Brokers, or Dealers incurred to purchase a stock that is currently a margin stock. Section 207.1 Authority, Purpose, and Scope Section 207.2 Definitions (c) "Current market value" of: Section 207.3 General Requirements (1) a security means: Section 207.4 Credit to Broker-Dealers (i) if quotations are available, the closing sale Section 207.5 Employee Stock Option and price of the security on the preceding business Stock Purchase Plans day, as appearing in any regularly published re- Section 207.6 Requirements for the List porting or quotation service; or of OTC Margin Stocks (ii) if there is no closing sale price, the lender may Section 207.7 Supplement; Maximum Loan use any reasonable estimate of the market value Value of Margin Stock and of the security as of the close of business on the Other Collateral preceding business day; or (iii) if the credit is used to finance the purchase of the security the total cost of purchase, which may Authority: §§ 3, 7, 8, 17 and 23 of the Securities Exchange Act of 1934, include any commissions charged. as amended (15 U.S.C. 78c, 78g, 78h, 78q and 78w). (2) any other collateral means a value determined by any reasonable method. (d) "Customer" includes any person or persons acting Section 207.1—Authority, Purpose, and Scope jointly, to or for whom a lender extends or maintains credit. (a) Authority. Regulation G (this part) is issued by the Board of Governors of the Federal Reserve System (e) "Good faith" with respect to: (the Board) pursuant to the Securities Exchange Act of (1) the loan value of collateral means that amount 1934 (the Act) (15 U.S.C. 78a et seq.). (not exceeding 100% of the current market value of the collateral) which a lender, exercising sound (b) Purpose and Scope. This part applies to persons credit judgment, would lend without regard to the other than banks, brokers or dealers, who extend or customer's other assets held as collateral in connecmaintain credit secured directly or indirectly by mar- tion with unrelated transactions. gin stock and who are required to register with the (2) accepting a statement or notice from or on behalf Board under section 207.3(a) of this part. Credit ex- of a customer means that the lender or its duly tended by such persons is regulated by limiting the authorized representative is alert to the circumloan value of the collateral securing the credit, if the stances surrounding the credit, and if in possession purpose of the credit is to buy or carry margin stock. of information that would cause a prudent person Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

708 Federal Reserve Bulletin • September 1983 not to accept the notice or certification without (ii) a company which has at least 95 per cent of its inquiry, investigates and is satisfied that it is truth- assets continuously invested in exempted securiful. ties (as defined in 15 U.S.C. 78c(12)). (f) "Indirectly secured" (j) "Maximum loan value" is the percentage of current (1) includes any arrangement with the customer market value assigned by the Board under section under which: 207.7 of this part to specified types of collateral. The (i) the customer's right or ability to sell, pledge, or maximum loan value of margin stock is stated as a perotherwise dispose of margin stock owned by the centage of current market value. All other collateral customer is in any way restricted while the credit has "good faith" loan value except that puts, calls and remains outstanding; or combinations thereof have no loan value. (ii) the exercise of such right is or may be cause for accelerating the maturity of the credit. (k) "OTC margin stock" means any equity security (2) does not include such an arrangement if: not traded on a national securities exchange that the (i) after applying the proceeds of the credit, not Board has determined has the degree of national more than 25 per cent of the value of the assets investor interest, the depth and breadth of market, the subject to the arrangement, as determined by any availability of information respecting the security and reasonable method, are margin securities; its issuer, and the character and permanence of the (ii) it is a lending arrangement that permits accelissuer to warrant being treated like an equity security erating the maturity of the credit as a result of a traded on a national securities exchange. An OTC default or renegotiation of another credit to the stock is not considered to be an "OTC margin stock" customer by another creditor that is not an affiliunless it appears on the Board's periodically published ate of the lender; list of OTC Margin Stocks. (iii) the lender holds the margin stock only in the capacity of custodian, depositary, or trustee, or under similar circumstances and, in good faith, (1) "Purpose credit" is credit for the purpose, whether has not relied upon the margin stock as collateral; immediate, incidental, or ultimate, of buying or carryor ing a margin stock. (iv) if the lender, in good faith, has not relied upon the margin stock as collateral in extending or maintaining the credit. Section 207.3—General Requirements (g) "In the ordinary course of business" means occur- (a) Registration; termination of registration. ring or reasonably expected to occur in carrying out or (1) Every person who, in the ordinary course of furthering any business purpose, or in the case of an business, extends or maintains credit secured, diindividual, in the course of any activity for profit or the rectly or indirectly, by any margin stock shall regismanagement or preservation of property. ter on Federal Reserve Form F.R. G-l (OMB No. 7100-0011) within 30 days after the end of any (h) "Lender" means any person subject to the regis- calendar quarter during which tration requirements of this part. (i) the amount of credit extended equals $200,000 or more, or (i) "Margin stock" means: (ii) the amount of credit outstanding at any time (1) any equity security registered or having unlisted during that calendar quarter equals $500,000 or trading privileges on a national securities exchange; more. (2) any OTC margin stock; (2) A registered lender may apply to terminate its (3) any debt security convertible into a margin stock registration, by filing Federal Reserve Form F.R. Gor carrying a warrant or right to subscribe to or 2 (OMB No. 7100-0011), if the lender has not, during purchase a margin stock; the preceding six calendar months, had more than (4) any warrant or right to subscribe to or purchase a $200,000 of such credit outstanding. Registration margin stock; or shall be deemed terminated when the application is (5) any security issued by an investment company approved by the Board. registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8), other than: (b) Limitation on Extending Purpose Credit. No lend- (i) a company licensed under the Small Business er, except a plan-lender, as defined in section Investment Company Act of 1958, as amended 207.5(a)(1) of this part, shall extend any purpose (15 U.S.C. 661); or credit, secured directly or indirectly by margin stock Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 709 in an amount that exceeds the maximum loan value of securing such credit shall be considered in determinthe collateral securing the credit, as set forth in section ing whether or not the credit complies with this part. 207.7 of this part. (2) A lender that has extended purpose credit secured by margin stock may not subsequently extend (c) Maintaining credit. A lender may continue to unsecured purpose credit to the same customer maintain any credit initially in compliance with this unless the combined credit does not exceed the part, regardless of: maximum loan value of the margin stock securing (1) reduction in the customer's equity resulting from the prior credit. change in market prices; (3) If a lender extended unsecured purpose credit to (2) change in the maximum loan value prescribed by a customer prior to the extension of purpose credit this part; or secured by margin securities, the credits shall be (3) change in the status of the security (from non- combined and treated as a single credit solely for the margin to margin) securing an existing purpose purposes of the withdrawal and substitution provicredit. sion of paragraph (i) of this section. (4) If a lender extends purpose credit secured by any (d) Arranging credit. No lender may arrange for the margin stock and nonpurpose credit to the same extension or maintenance of any credit, except upon customer, the lender shall treat the credits as two the same terms and conditions under which the lender separate loans and may not rely upon the required itself may extend or maintain credit under this part collateral securing the purpose credit for the nonexcept this limitation shall not apply with respect to purpose credit. the arranging by a lender for a bank to extend or maintain credit on margin stock or exempted securi- (h) Mixed collateral loans. A purpose credit secured in ties. part by margin stock, and in part by other collateral shall be treated as two separate loans, one secured by (e) Purpose statement. Except for credit extended the margin stock and one by all other collateral. A under section 207.5 of this part, whenever a lender lender may use a single credit agreement, if it mainextends credit secured directly or indirectly by any tains records identifying each portion of the credit and margin stock, the lender shall require its customer to its collateral. execute Form F.R. G-3 (OMB No. 7100-0018), which shall be signed and accepted by a duly authorized (i) Withdrawals and substitutions. representative of the lender acting in good faith. (1) A lender may permit any withdrawal or substitution of cash or collateral by the customer if the withdrawal or substitution would not: (f) Purpose statement for revolving credit or multiple (i) cause the credit to exceed the maximum loan draw agreements. value of the collateral; or (1) If a lender extends credit, secured directly or (ii) increase the amount by which the credit exindirectly by any margin stock, under a revolving ceeds the maximum loan value of the collateral. credit or other multiple draw agreement, Form F.R. (2) For purposes of this section, the maximum loan G-3 can either be executed each time a disbursement value of the collateral on the day of the withdrawal is made under the agreement, or at the time the or substitution shall be used. credit arrangement is originally established. (2) If a purpose statement executed at the time the credit arrangement is initially made indicates that (j) Exchange offers. To enable a customer to particithe purpose is to purchase or carry margin stock, the pate in a reorganization, recapitalization, or exchange credit will be deemed in compliance with this part if offer that is made to holders of an issue of margin stock the maximum loan value of the collateral at least a lender may permit substitution of the securities equals the aggregate amount of funds actually dis- received. A nonmargin nonexempted security acbursed. For any purpose credit disbursed under the quired in exchange for a margin stock shall be treated agreement, the lender shall obtain and attach to the as if it is margin stock for a period of 60 days following executed Form F.R. G-3 a current list of collateral— the exchange. which adequately supports all credit extended under the agreement. (k) Renewals and extensions of maturity. A renewal or extension of the maturity of a credit need not be (g) Single credit rule. considered a new extension of credit if the amount of (1) All purpose credit extended to a customer shall the credit is increased only by the addition of interest, be treated as a single credit, and all the collateral service charges, or taxes with respect to the credit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

710 Federal Reserve Bulletin • September 1983 (1) Transfers of credit. (b) Capital Contribution Loans. Credit that the Board (1) A transfer of a credit between customers or has exempted by order upon a finding that the exemplenders shall not be considered a new extension of tion is necessary or appropriate in the public interest credit if: or for the protection of investors, provided the Securi- (i) the original credit was in compliance with this ties Investor Protection Corporation certifies to the part; Board that the exemption is appropriate. (ii) the transfer is not made to evade this part; (iii) the amount of credit is not increased; and (iv) the collateral for the credit is not changed. Section 207.5—Employee Stock Option and (2) Any transfer between customers at the same Stock Purchase Plans lender shall be accompanied by a statement by the transferor customer describing the circumstances (a) Plan-lender; eligible plan. giving rise to the transfer and shall be accepted and (1) Plan-lender means any corporation, (including a signed by a duly authorized representative of the wholly-owned subsidiary, or a lender that is a thrift lender acting in good faith. The lender shall keep organization whose membership is limited to emsuch statement with its records of the transferee ployees and former employees of the corporation, account. its subsidiaries or affiliates) that extends or main- (3) When a transfer is made between lenders, the tains credit to finance the acquisition of margin transferee lender shall obtain a copy of the Form stock of the corporation, its subsidiaries or affiliates F.R. G-3 originally filed with the transferor lender under an eligible plan. and retain the copy with its records of the transferee (2) Eligible Plan. An eligible plan means any emaccount. ployee stock option, purchase, or ownership plan adopted by a corporation and approved by its stock- (m) Action for lender's protection. Nothing in this part holders that provides for the purchase of margin shall require a lender to waive or forego any lien, or stock of the corporation, its subsidiaries, or affiliprevent a lender from taking any action it deems ates. necessary for its protection. (b) Credit to exercise rights under or finance an (n) Mistakes in good faith. A mistake in good faith in eligible plan. connection with the extension or maintenance of cred- (1) If a plan-lender extends or maintains credit under it shall not be a violation of this part. an eligible plan, any margin security that directly or indirectly secures that credit shall have good faith (o) Annual Report. Every registered lender shall, loan value. within 30 days following June 30 of every year, file (2) Credit extended under this section shall be Form F.R. G-4 (OMB No. 7100-0011). treated separately from credit extended under any other section of this part except sections 207.3(a) (p) Where to register and file applications and reports. and 207.3(o) of this part. Registration statements, applications to terminate registration, and annual reports shall be filed with the Federal Reserve Bank of the district in which the Section 207.6—Requirements for the List of principal office of the lender is located. OTC Margin Stocks (a) Requirements for inclusion on the list. Except as Section 207.4—Credit to Broker-Dealers provided in paragraph (d) of this section, an OTC margin stock shall meet the following requirements: No lender shall extend or maintain credit secured, (1) Four or more dealers stand willing to, and do in directly or indirectly, by any margin stock to a creditor fact, make a market in such stock and regularly who is subject to Part 220 of this Chapter except in the submit bona fide bids and offers to an automated following circumstances: quotations system for their own accounts; (2) The minimum average bid price of such stock, as (a) Emergency Loans. Credit extended in good faith determined by the Board, is at least $5 per share; reliance upon a certification from the customer that (3) The stock is registered under section 12 of the the credit is essential to meet emergency needs arising Act, is issued by an insurance company subject to from exceptional circumstances. Any collateral for section 12(g)(2)(G) of the Act, is issued by a closed such credit shall have good faith loan value. end investment management company subject to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 711 registration pursuant to section 8 of the Investment (c) Removal from the list of OTC margin stocks. The Company Act of 1940 (15 U.S.C. 80a-8), is an Board shall periodically remove from the list any stock American Depository Receipt (ADR) of a foreign that: issuer whose securities are registered under section (1) ceases to exist or of which the issuer ceases to 12 of the Act, or is a stock of an issuer required to exist, or file reports under section 15(d) of the Act; (2) no longer substantially meets the provisions of (4) Daily quotations for both bid and asked prices for paragraph (b) of this section or section 207.2(k). the stock are continuously available to the general public; (d) Discretionary authority of Board. Without regard (5) The stock has been publicly traded for at least six to the other paragraphs of this section, the Board may months; add to, or omit or remove from, the OTC margin stock (6) The issuer has at least $4 million of capital, list any equity security, if in the judgment of the surplus, and undivided profits; Board, such action is necessary or appropriate in the (7) There are 400,000 or more shares of such securi- public interest. ty outstanding in addition to shares held benefically by officers, directors or beneficial owners of more (e) Unlawful representations. It shall be unlawful for than 10 per cent of the stock; any lender to make, or cause to be made, any repre- (8) There are 1,200 or more holders of record, as sentation to the effect that the inclusion of a security defined in SEC Rule 12g5-l (17 CFR 240.12g5-l), of on the list of OTC margin stocks is evidence that the the stock who are not officers, directors or benefi- Board or the SEC has in any way passed upon the cial owners of 10 per cent or more of the stock, or merits of, or given approval to, such security or any the average daily trading volume of such a stock, as transactions therein. Any statement in an advertisedetermined by the Board, is at least 500 shares; and ment or other similar communication containing a (9) The issuer or a predecessor in interest has been reference to the Board in connection with the list or in existence for at least three years. securities on that list shall be an unlawful representation. Section 207.7—Supplement: Maximum Loan (b) Requirements for continued inclusion on the list. Value of Stock and Other Collateral Except as provided in paragraph (d) of this section, an OTC margin stock shall meet the following requirements: (a) Maximum loan value of a margin stock. The (1) Three or more dealers stand willing to, and do in maximum loan value of any margin stock, except fact, make a market in such stock and regularly options, is fifty per cent of its current market value. submit bona fide bids and offers to an automated quotations system for their own accounts; (b) Maximum loan value of nonmargin stock and all (2) The minimum average bid price of such security, other collateral. The maximum loan value of a nonmargin stock and all other collateral except puts, calls, as determined by the Board, is at least $2 per share; or combinations thereof is their good faith loan value. (3) The security is registered as specified in paragraph (a)(3) of this section; (c) Maximum loan value of options. Whether they are (4) Daily quotations for both bid and asked prices for margin stock or not, puts, calls, and combinations the stock are continuously available to the general thereof have no loan value. public; (5) The issuer has at least $1 million of capital, surplus, and undivided profits; (6) There are 300,000 or more shares of such stock outstanding in addition to shares held beneficially by AMENDMENTS TO REGULATION T officers, directors, or beneficial owners of more than 10 per cent of the stock; and The Board of Governors has amended its Regulation (7) There continue to be 800 or more holders of T—Credit by Brokers and Dealers, to include language record, as defined in SEC Rule 12g5-l (17 CFR that reflects the earlier revision of criteria for initial 240.12g5-l), of the stock who are not officers, direc- and continued inclusion on the List of OTC Margin tors, or beneficial owners of 10 per cent or more of Stocks. the stock, or the average daily trading volume of Effective November 21, 1983 or any earlier date such stock, as determined by the Board, is at least after June 20, 1983, at the option of the creditor, the 300 shares. Board amends Regulation T as set forth below: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

712 Federal Reserve Bulletin • September 1983 Part 220—Credit by Brokers and Dealers Section 221.1—Authority, Purpose, and Scope Section 220.2—Definitions (a) Authority. Regulation U ("this part") is issued by the Board of Governors of the Federal Reserve Sys- (s)*** An OTC stock is not considered to be an "OTC tem ("the Board") pursuant to the Securities Exmargin stock" unless it appears on the Board's period- change Act of 1934 (the "Act") (15 U.S.C. 78a ically published list of OTC margin stocks. et seq.). Section 220.17—Requirements for List of OTC (b) Purpose and scope. This part imposes credit re- Margin Stocks strictions upon "banks" (as defined in section 221.2(b) of this part) that extend credit for the purpose of (a)*** buying or carrying margin stock if the credit is secured (3) The stock is registered under section 12 of the directly or indirectly by margin stock. Banks may not Act, is issued by an insurance company subject to extend more than the maximum loan value of the section 12(2)(G) of the Act, is issued by a closed-end collateral securing such credit, as set by the Board in investment management company subject to regis- section 221.8 (the Supplement). tration pursuant to section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8), is an American Depository Receipt (ADR) of a foreign issuer whose securities are registered under section Section 221.2—Definitions 12 of the Act, or is a stock of an issuer required to file reports under section 15(d) of the Act; The terms used in this part have the meanings given them in section 3(a) of the Act or as defined in this section. (9) The issuer or a predecessor in interest has been in existence for at least 3 years. (a) "Affiliate" means: (1) any bank holding company of which a bank is a subsidiary within the meaning of the Bank Holding AMENDMENTS TO REGULATION U Company Act of 1956, as amended (12 U.S.C. 1841(d)); Regulation U—Credit by Banks for the Purpose of (2) any other subsidiary of such bank holding com- Purchasing or Carrying Margin Stock, has been re- pany; and vised in its entirety. The new Regulation U is written (3) any other corporation, business trust, associain simplified language and organized in a more logical tion, or other similar organization that is an affiliate fashion. Obsolete provisions and certain regulatory as defined in section 2(b) of the Banking Act of 1933 burdens and form-filing requirements been removed. (12 U.S.C. 221a(c)). Effective August 31, 1983, the Board revises Regulation U to read as follows: (b)(1) "Bank" has the meaning given to it in section 3(a)(6) of the Act (15 U.S.C. 78c(a)(6)) and includes: Part 221—Credit by Banks for the Purpose of (i) any subsidiary of a bank; Purchasing or Carrying Margin Stock (ii) any corporation organized under section 25(a) of the Federal Reserve Act (12 U.S.C. 611); and Section 221.1 Authority, Purpose, and Scope (iii) any agency or branch of a foreign bank Section 221.2 Definitions located within the United States. Section 221.3 General Requirements (2) "Bank" does not include: Section 221.4 Agreements of Nonmember Banks (i) any savings and loan association, Section 221.5 Special Purpose Loans to Brokers (ii) any credit union, and Dealers (iii) any lending institution that is an instrumental- Section 221.6 Exempted Transactions ity or agency of the United States, or Section 221.7 Requirements for the List of OTC (iv) any member of a national securities exchange. Margin Stocks Section 221.8 Supplement; Maximum Loan Value of Margin Stock and Other Collateral (c) "Carrying" credit is credit that enables a customer to maintain, reduce, or retire indebtedness originally incurred to purchase a security that is currently a Authority: §§ 3, 7, 8 and 23 of the Securities Exchange Act of 1934, as amended (15 U.S.C. §§ 78c, 78g, 78h and 78w). margin stock. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 713 (d) "Current market value" of (iii) the bank holds the margin stock only in the (1) a security means: capacity of custodian, depositary, or trustee, or (i) if quotations are available, the closing sale under similar circumstances, and, in good faith, price of the security on the preceding business has not relied upon the margin stock as collateral; day, as appearing on any regularly published or reporting or quotation service; or (iv) the bank, in good faith, has not relied upon the (ii) if there is no closing sale price, the bank may margin stock as collateral in extending or mainuse any reasonable estimate of the market value taining the particular credit. of the security as of the close of business on the preceding business day; or (iii) if the credit is used to finance the purchase of (h) "Margin stock" means: the security, the total cost of purchase, which (1) any equity security registered or having unlisted may include any commissions charged. trading privileges on a national securities exchange; (2) any other collateral means a value determined by (2) any OTC margin stock; any reasonable method in accordance with sound (3) any debt security convertible into a margin banking practices. stock, or carrying a warrant or right to subscribe to or purchase a margin stock; (e) "Customer" includes any person or persons acting (4) any warrant or right to subscribe to or purchase a jointly, to or for whom a bank extends or maintains margin stock; or credit. (5) any security issued by an investment company registered under section 8 of the Investment Compa- (f) "Good faith" with respect to: ny Act of 1940 (15 U.S.C. 80a-8), other than: (1) the loan value of collateral, means that amount (i) a company licensed under the Small Business (not exceeding 100 per cent of the current market Investment Company Act of 1958, as amended value of the collateral) which a bank, exercising (15 U.S.C. 661), or sound banking judgment, would lend, without re- (ii) a company which has at least 95 per cent of its gard to the customer's other assets held as collateral assets continuously invested in exempted securiin connection with unrelated transactions. ties (as defined in 15 U.S.C. 78c(12)). (2) accepting notice or certification from or on behalf of a customer means that the bank or its duly authorized representative is alert to the circum- (i) "Maximum loan value" is the percentage of current stances surrounding the credit, and if in possession market value assigned by the Board under section of information that would cause a prudent person 221.8 of this part to specified types of collateral. The not to accept the notice or certification without maximum loan value of margin stock is stated as a inquiry, investigates and is satisfied that it is truth- percentage of its current market value. Puts, calls and ful; combinations thereof have no loan value except for purposes of section 221.5(c)(10) of this part. All other (g) "Indirectly secured" collateral has "good faith" loan value. (1) includes any arrangement with the customer under which: (i) the customer's right or ability to sell, pledge, or (j) "OTC margin stock" is any equity security not otherwise dispose of margin stock owned by the traded on a national securities exchange that the Board customer is in any way restricted while the credit has determined has the degree of national investor remains outstanding; or interest, the depth and breadth of market, the avail- (ii) the exercise of such right is or may be cause ability of information respecting the security and its for accelerating the maturity of the credit. issuer, and the character and permanence of the issuer (2) does not include such an arrangement if: to warrant being treated like an equity security traded (i) after applying the proceeds of the credit, not on a national securities exchange. An OTC stock is not more than 25 per cent of the value (as determined considered to be an "OTC margin stock" unless it by any reasonable method) of the assets subject to appears on the Board's periodically published list of the arrangement is represented by margin stock; OTC margin stocks. (ii) it is a lending arrangement that permits accelerating the maturity of the credit as a result of a default or renegotiation of another credit to the (k) "Purpose credit" is any credit for the purpose, customer by another lender that is not an affiliate whether immediate, incidental, or ultimate, of buying of the bank; or carrying margin stock. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

714 Federal Reserve Bulletin • September 1983 Section 221.3—General Requirements bursed. For any purpose credit disbursed under the agreement, the bank shall obtain and attach to the (a) Extending, maintaining, and arranging credit. executed Form F.R. U-l a current list of collateral (1) Extending credit. No bank shall extend any which adequately supports all credit extended under purpose credit, secured directly or indirectly by the agreement. margin stock, in an amount that exceeds the maximum loan value of the collateral securing the credit. (d) Single credit rule. The maximum loan value of margin stock (set forth (1) All purpose credit extended to a customer shall in section 221.8 of this part) is assigned by the Board be treated as a single credit, and all the collateral in terms of a percentage of the current market value securing such credit shall be considered in determinof the margin stock. All other collateral has "good ing whether or not the credit complies with this part. faith" loan value, as defined in section 221.2(f) of (2) A bank that has extended purpose credit secured this part. by margin stock may not subsequently extend unsecured purpose credit to the same customer unless (2) Maintaining credit. A bank may continue to the combined credit does not exceed the maximum maintain any credit initially extended in compliance loan value of the collateral securing the prior credit. with this part, regardless of: (3) If a bank extended unsecured purpose credit to a (i) reduction in the customer's equity resulting customer prior to the extension of purpose credit from change in market prices; secured by margin stock, the credits shall be com- (ii) change in the maximum loan value prescribed bined and treated as a single credit solely for the by this part; or purposes of the withdrawal and substitution provi- (iii) change in the status of the security (from sion of paragraph (f) of this section. nonmargin to margin) securing an existing pur- (4) If a bank extends purpose credit secured by any pose credit. margin stock and non-purpose credit to the same customer, the bank shall treat the credits as two separate loans and may not rely upon the required (3) Arranging credit. No bank may arrange for the collateral securing the purpose credit for the nonextension or maintenance of any purpose credit, purpose credit. except upon the same terms and conditions under which the bank itself may extend or maintain purpose credit under this part. (e) Mixed collateral loans. A purpose credit secured in part by margin stock, and in part by other collateral (b) Purpose statement. shall be treated as two separate loans, one secured by (1) Except for credit extended under paragraph (c) margin stock and one by all other collateral. A bank of this section, whenever a bank extends credit may use a single credit agreement, if it maintains secured directly or indirectly by any margin stock, records identifying each portion of the credit and its the bank shall require its customer to execute Form collateral. F.R. U-l (OMB No. 7100-0115), which shall be signed and accepted by a duly authorized officer of (f) Withdrawals and substitutions. the bank acting in good faith. (1) A bank may permit any withdrawal or substitution of cash or collateral by the customer if the withdrawal or substitution would not: (c) Purpose statement for revolving credit or multiple- (i) cause the credit to exceed the maximum loan draw agreements. value of the collateral; or (1) If a bank extends credit, secured directly or (ii) increase the amount by which the credit exindirectly by any margin stock, under a revolving ceeds the maximum loan value of the collateral. credit or other multiple-draw agreement, Form F.R. (2) For purposes of this section, the maximum loan U-l can either be executed each time a disbursevalue of the collateral on the day of the withdrawal ment is made under the agreement, or at the time the or substitution shall be used. credit arrangement is originally established. (2) If a purpose statement executed at the time the credit arrangement is initially made indicates that (g) Exchange offers. To enable a customer to particithe purpose is to purchase or carry margin stock, the pate in a reorganization, recapitalization or exchange credit will be deemed in compliance with this part if offer that is made to holders of an issue of margin the maximum loan value of the collateral at least stock, a bank may permit substitution of the securities equals the aggregate amount of funds actually dis- received, A nonmargin, nonexempted security ac- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 715 quired in exchange for a margin stock shall be treated (b) Any nonmember bank may terminate its agreement as if it is margin stock for a period of 60 days following upon written notification to the Board. the exchange. (h) Renewals and extensions of maturity. A renewal or Section 221.5—Special Purpose Loans to extension of maturity of a credit need not be consid- Brokers and Dealers ered a new extension of credit if the amount of the credit is increased only by the addition of interest, (a) Special purpose loans. A member bank and a service charges, or taxes with respect to the credit. nonmember bank that is in compliance with section 221.4 of this part, may extend and maintain purpose (i) Transfers of credit. credit to brokers and dealers without regard to the (1) A transfer of a credit between customers or limitations set forth in sections 221.3 and 221.8 of this banks shall not be considered a new extension of part, if the credit is for any of the specific purposes and credit if: meets the conditions set forth in paragraph (c) of this (i) the original credit was in compliance with this section. part; (ii) the transfer is not made to evade this part; (b) Written notice. Prior to extending credit for more (iii) the amount of credit is not increased; and than a day under this section, the bank shall obtain and (iv) the collateral for the credit is not changed. accept in good faith a written notice or certification (2) Any transfer between customers at the same from the borrower as to the purposes of the loan. The bank shall be accompanied by a statement by the written notice or certification shall be evidence of contransferor customer describing the circumstances tinued eligibility for the special credit provisions until giving rise to the transfer and shall be accepted and the borrower notifies the bank that it is no longer signed by an officer of the bank acting in good faith. eligible or the bank has information that would cause a The bank shall keep such statement with its records reasonable person to question whether the credit is of the transferee account. being used for the purpose specified. (3) When a transfer is made between banks, the transferee bank shall obtain a copy of the Form F.R. (c) Types of special purpose credit. The types of credit U-l originally filed with the transferor bank and that may be extended and maintained on a good faith retain the copy with its records of the transferee basis are as follows: account. (1) Hypothecation loans. Credit secured by hypoth- (j) Action for bank's protection. Nothing in this part ecated customer securities that, according to written shall require a bank to waive or forego any lien or notice received from the broker or dealer, may be prevent a bank from taking any action it deems neces- hypothecated by the broker or dealer under Securisary in good faith for its protection. ties and Exchange Commission ("SEC") rules. (k) Mistakes in good faith. A mistake in good faith in (2) Temporary advances in payment-against-delivconnection with the extension or maintenance of cred- ery transactions. Credit to finance the purchase or it shall not be a violation of this part. sale of securities for prompt delivery, if the credit is to be repaid upon completion of the transaction. (3) Loans for securities in transit or transfer. Credit Section 221.4—Agreements of Nonmember to finance securities in transit or surrendered for Banks transfer, if the credit is to be repaid upon completion of the transaction. (a) Banks that are not members of the Federal Reserve System shall file an agreement that conforms to the (4) Intra-day loans. Credit to enable a broker or requirements of section 8(a) of the Act (See Form T-l dealer to pay for securities, if the credit is to be for domestic nonmember banks and Form T-2 for all repaid on the same day it is extended. other nonmember banks) prior to extending any credit secured by any nonexempt security registered on a (5) Arbitrage loans. Credit to finance proprietary or national securities exchange to persons subject to Part customer bona fide arbitrage transactions. For the 220 of this Chapter, who are borrowing in the ordinary purpose of this section "bona fide arbitrage" course of business. means: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

716 Federal Reserve Bulletin • September 1983 (i) purchase or sale of a security in one market, security as defined in SEC Rule 3b-8 (17 CFR together with an offsetting sale or purchase of the 240.3b-8) and that the credit will be used solely for same security in a different market at nearly the the purpose of financing the market making activity, same time as practicable, for the purpose of taking provided the credit is extended on a good faith loan advantage of a difference in prices in the two value basis. markets; or (ii) purchase of a security that is, without restric- (12) Third market maker loans. Credit to a dealer tion other than the payment of money, exchange- who has given written notice to the bank that it is a able or convertible within 90 calendar days of the "qualified third market maker," as defined in SEC purchase into a second security, together with an Rule 3b-8 (17 CFR 240.3b-8), and that the credit will offsetting sale of the second security at or about be used solely for the purpose of financing positions the same time, for the purpose of taking advan- in securities assumed as a "qualified third market tage of a concurrent disparity in the price of the maker," provided the credit is extended on a good two securities. faith loan value basis. (6) Distribution loans. Credit to finance the distribu- (13) Block positioner credit. Credit to a dealer who tion of securities to customers. has given written notice to the bank that it is a "qualified block positioner" for a block of securi- (7) Odd-lot loans. Credit to finance the odd-lot ties, as defined in SEC Rule 3b-8 (17 CFR 240.3b-8), transactions of a person registered as an odd-lot and that the credit will be used to finance a position dealer on a national securities exchange. in that block, provided the credit is extended on a good faith loan value basis. (8) Emergency loans. Credit that is essential to meet emergency needs of the broker-dealer business arising from exceptional circumstances. Section 221.6—Exempted Transactions (9) Capital contribution loans. A bank may extend and maintain purpose credit (i) Credit that the Board has exempted by order without regard to the provisions of this part if such upon a finding that the exemption is necessary or credit is extended: appropriate in the public interest or for the protection of investors, provided the Securities Investor (a) to any bank; Protection Corporation certifies to the Board that the exemption is appropriate; or (b) to any foreign banking institution; (ii) credit to a customer for the purpose of making a subordinated loan or capital contribution to a (c) outside the United States; broker or dealer in conformity with the SEC's net capital rules and the rules of the broker's or (d) to an employee stock ownership plan (ESOP) dealer's Examining Authority, provided: qualified under section 401 of the Internal Revenue (A) the customer reduces the credit by the Code (26 U.S.C. 401); amount of any reduction in the loan or contribution to the broker or dealer; and (e) to any "plan lender" as defined in Part 207 of this (B) the credit is not used to purchase securities Chapter to finance such a plan, provided the bank has issued by the broker or dealer in a public no recourse to any securities purchased pursuant to distribution. the plan; (10) Loans to specialists. Credit extended to finance (f) to any customer, other than a broker or dealer, to the specialty security and permitted offset positions temporarily finance the purchase or sale of securities of members of a national securities exchange who for prompt delivery, if the credit is to be repaid in the are registered and acting as specialists on the ex- ordinary course of business upon completion of the change, provided the credit is extended on a good transaction; faith loan value basis. (g) against securities in transit, if the credit is not (11) OTC market maker credit. Credit to a dealer extended to enable the customer to pay for securities who has given written notice to the bank that it is a purchased in an account subject to Part 220 of this "qualified OTC market maker" in an OTC margin Chapter; or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 717 (h) to enable a customer to meet emergency expenses (b) Requirements for continued inclusion on the list. not reasonably foreseeable, and if the extension of Except as provided in paragraph (d) of this section, an credit is supported by a statement executed by the OTC margin stock shall meet the following requirecustomer and accepted and signed by an officer of the ments: bank acting in good faith. For this purpose, emergency (1) Three or more dealers stand willing to, and do in expenses include expenses arising from circumstances fact make a market in such stock and regularly such as the death or disability of the customer, or submit bona fide bids and offers to an automated some other change in circumstances involving extreme quotations system for their own accounts; hardship, not reasonably foreseeable at the time the (2) The minimum average bid price of such stocks, credit was extended. The opportunity to realize mone- as determined by the Board, is at least $2 per share; tary gain or to avoid loss is not a "change in circum- (3) The stock is registered as specified in paragraph stances" for this purpose. (a)(3) of this section; (4) Daily quotations for both bid and asked prices for the stock are continuously available to the general Section 221.7—Requirements for the List of public; OTC Margin Stocks (5) The issuer has at least $1 million of capital, surplus, and undivided profits. (a) Requirements for inclusion on the list. Except as (6) There are 300,000 or more shares of such stock provided in paragraph (d) of this section, an OTC outstanding in addition to shares held beneficially by margin stock shall meet the following requirements: officers, directors, or beneficial owners of more than (1) Four or more dealers stand willing to, and do in 10 per cent of the stock; and fact, make a market in such stock and regularly (7) There continue to be 800 or more holders of submit bona fide bids and offers to an automated record, as defined in SEC Rule 12g5-l (17 CFR quotations system for their own accounts; section 240.12g5-l), of the stock who are not offi- (2) The minimum average bid price of such stock, as cers, directors, or beneficial owners of ten per cent determined by the Board, is at least $5 per share; or more of the stock, or the average daily trading (3) The stock is registered under section 12 of the volume of such stock, as determined by the Board, Act, is issued by an insurance company subject to is at least 300 shares. section 12(g)(2)(G) of the Act, is issued by a closed end investment management company subject to (c) Removal from the list. The Board shall periodically registration pursuant to section 8 of the Investment remove from the list any stock that: Company Act of 1940 (15 U.S.C. 80a-8), is an (1) ceases to exist or of which the issuer ceases to American Depository Receipt (ADR) of a foreign exist, or issuer whose securities are registered under section (2) no longer substantially meets the provisions of 12 of the Act, or is a stock of an issuer required to paragraph (b) of this section or section 221.2(j). file reports under section 15(d) of the Act; (4) Daily quotations for both bid and asked prices for the stock are continuously available to the general (d) Discretionary authority of Board. Without regard public; to the other paragraphs of this section, the Board may (5) The stock has been publicly traded for at least six add to, or omit or remove from, the OTC margin stock months; list, any equity security, if in the judgment of the (6) The issuer had 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 benefically by officers, directors or beneficial owners of more than (e) Unlawful representations. It shall be unlawful for 10 per cent of the stock; any bank to make, or cause to be made, any represen- (8) There are 1,200 or more holders of record, as tation to the effect that the inclusion of a security on defined in SEC Rule 12g5-l (17 CFR 240.12g5-l), of the list of OTC margin stocks is evidence that the the stock who are not officers, directors or benefi- Board or the SEC has in any way passed upon the cial owners of ten per cent or more of the stock, or merits of, or given approval to, such security or any the average daily trading volume of such a stock as transactions therein. Any statement in an advertisedetermined by the Board, is at least 500 shares; and ment or other similar communication containing a (9) The issuer or a predecessor in interest has been reference to the Board in connection with the list or in existence for at least three years. stocks on that list shall be an unlawful representation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

718 Federal Reserve Bulletin • September 1983 Section 221.8—Supplement, Maximum Loan Part 265—Rules Regarding Delegation of Value of Stock and Other Collateral Authority (a) Maximum loan value of margin stock. The maxi- Section 265.2—Specific Functions Delegated to mum loan value of any margin stock, except options, Board Employees and to Federal Reserve is fifty per cent of its current market value. Banks (b) Maximum loan value of nonmargin stock and all 1. Section 265.2(f)(22)(iv) and (v) are revised, and other collateral. The maximum loan value of nonmar- pa(rfa)g *r*ap*h (vi) is added as set forth below: gin stock and all other collateral except puts, calls, or combinations thereof is their good faith loan value. (22) *** (iv) the application raises a significant policy (c) Maximum loan value of options. Except for pur- issue or legal question on which the Board has poses of section 221.5(c)(10) of this part, puts, calls, not established its position; or and combinations thereof have no loan value. (v) with respect to bank holding company formations, bank acquisitions or mergers, the proposed transaction involves two or more banking AMENDMENTS TO REGULATION Y organizations: (A) that rank among a State's ten largest The Board of Governors has amended its Regulation banking organizations in terms of total do- Y—Bank Holding Companies and Change in Bank mestic banking assets; or Control, to include the activities of securities bro- (B) each of which has more than $100 million kerage and margin lending on the list of nonbanking of total deposits in banking offices in the activities that are generally permissible for bank hold- same local banking market that, after coning companies. summation of the proposal, would control Effective September 9, 1983, the Board amends over 10 per cent of total deposits in banking Regulation Y to read as set forth below: offices in that local market; or (vi) with respect to nonbank acquisitions: Part 225—Bank Holding Companies and (A) the nonbanking activities involved do not Change in Bank Control clearly fall within activities that the Board has designated as permissible for bank hold- Section 225.4—Nonbanking activities ing companies under § 225.4(a) of Regulation Y; or (a)*** (B) the proposal would involve the acquisi- (15) providing securities brokerage services, related tion by a banking organization that has total securities credit activities pursuant to the Board's domestic banking assets of $1 billion or more Regulation T (12 C.F.R. Part 220), and incidental of a nonbanking organization that appears to activities such as offering custodial services, indi- have a significant presence in a permissible vidual retirement accounts, and cash management nonbanking activity.2 services, provided that the securities brokerage 2. Effective August 22, 1983, section 265.2(f)(57) is services are restricted to buying and selling securi- amended as set forth below; ^ *** ties solely as agent for the account of customers and do not include securities underwriting or dealing or (57) Under sections 4(c)(8) and 5(b) of the Bank investment advice or research services. Holding Company Act and section 225.4(b) of the Board's Regulation Y, to approve applications by a bank holding company to open additional offices AMENDMENTS TO RULES REGARDING to engage in nonbanking activities for which the DELEGATION OF AUTHORITY particular bank holding company has previously received approval pursuant to Board order, unless The Board of Governors has amended its Rules Re- one of the conditions specified in section garding Delegation of Authority to authorize Reserve 265.2(f)(22)(i), (ii), (iii), or (iv) is present. Banks to approve additional applications under section 4 of the Bank Holding Company Act. 2. While other situations may involve the issue of significant presence, the Board regards, as a general guideline, any company that Effective August 23, 1983, the Board amends Rules ranks among the 20 largest independent firms in any industry as Regarding Delegation of Authority as set forth below: having a significant presence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 719 BANK HOLDING COMPANY AND BANK MERGER In this proposal, Applicant's principal shareholder ORDERS ISSUED BY THE BOARD OF GOVERNORS will purchase additional capital stock of Applicant and will finance this transaction by means other than the Orders Under Section 3 of Bank Holding use of debt. Applicant also has taken steps to minimize Company Act the effects of certain federal funds transactions on its consolidated capital position. Further, Applicant has Dakota Bankshares, Inc., committed to refrain from paying dividends under Fargo, North Dakota certain circumstances. With these modifications, the Board has found that the primary and total capital Order Approving Acquisition of a Bank ratios of Applicant and the chain banking organization of which Applicant is a member, are now above the Dakota Bankshares, Inc., Fargo, North Dakota, a minimum levels specified in the Guidelines. Accordbank holding company within the meaning of the Bank ingly, financial, as well as managerial considerations, Holding Company Act, has applied for the Board's are consistent with approval. approval under section 3(a)(3) of the Act (12 U.S.C. The Board concludes that the banking consider- § 1842(a)(3)) to acquire 80 percent of the outstanding ations involved in this proposal present factors convoting shares of Dakota Bank of Wahpeton, Wahpe- sistent with approval. Moreover, the Board has conton, North Dakota ("Bank"), a proposed de novo sidered the competitive effects of this proposal and for bank. Applicant has also applied for Bank to become a the reasons recited in the Board's order of May 3, member of the Federal Reserve System. 1983, finds that no adverse competitive effects would Notice of the application, affording opportunity for result from consummation of this proposal. Accordinterested persons to submit comments, has been ingly, the Board's judgment is that approval of the given in accordance with section 3(b) of the Act. The application would be in the public interest and the time for filing comments has expired, and the Board application to acquire Bank should be approved. has considered the application and all comments re- With respect to considerations relating to the conveceived in light of the factors set forth in section 3(c) of nience and needs of the community to be served, the the Act (12 U.S.C. § 1842(c)). banking services to be offered by Bank would result in Applicant is the fourth largest banking organization an additional choice of banking facilities for area in North Dakota, with deposits of $126.6 million. residents. These factors are consistent with approval Applicant controls three banking and two nonbanking of this application. Finally, in connection with Applisubsidiaries and holds a 19.1 percent interest in a cant's proposal to acquire Bank, the Board has deterfourth bank. Applicant controls 2.7 percent of the total mined that it is appropriate at this time for Bank to deposits in commercial banks in the state.1 Applicant's become a member of the Federal Reserve System. principal controls three one-bank holding companies On the basis of the facts of record, the application to which, together with Applicant, constitute a chain acquire Bank is approved for the reasons summarized banking organization. above. Also, the application by Bank to become a On May 3, 1983, the Board denied a similar proposal member of the Federal Reserve System is also apby Applicant to acquire Bank. (69 FEDERAL RESERVE proved. The transaction shall not be made before the BULLETIN 442 (1983)). The Board found that Appli- thirtieth calendar day following the effective date of cant and its related chain banking organization did not this Order and Bank shall not be opened for business meet the Board's Capital Adequacy Guidelines2 gen- later than three months after the effective date of this erally applicable to bank holding companies and chain Order unless such periods are extended for good cause banking organizations with consolidated assets of over by the Board, or by the Federal Reserve Bank of $150 million. Applicant's proposed debt would have Minneapolis acting pursuant to delegated authority. further leveraged the banking organization. Applicant By order of the Board of Governors, effective has submitted this proposal, which is revised to ad- August 8, 1983. dress the Board's concerns regarding the capital condition of Applicant and its related chain banking organization. Voting for this action: Chairman Volcker and Governors Wallich, Partee, Teeters, Rice, and Gramley. Absent and not voting: Governor Martin. 1. Banking data are as of September 30, 1982. 2. Federal Reserve Board and Comptroller of the Currency Press JAMES MCAFEE, Release, December 17, 1981. 68 FEDERAL RESERVE BULLETIN 33 (1982), reprinted in Federal Reserve Regulatory Service, 113-1506. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

720 Federal Reserve Bulletin • September 1983 Equality Bankshares, Inc., banking organizations. However, in view of the fact Cheyenne, Wyoming that First State Bank's principals organized Pioneer Bank de novo in 1981 and this proposal represents Order Approving Acquisition of Bank Holding only a transfer of the ownership of these individuals to Companies and Banks a corporation owned by the same individuals, the Board does not regard the effects of the proposed Equality Bankshares, Inc., Cheyenne, Wyoming, a transaction on competition within the Uinta market to registered bank holding company, has applied for the be significant. In addition, none of the other banks Board's approval under section 3(a)(3) of the Bank involved in this proposal competes in the same market Holding Company Act ("Act") (12 U.S.C. and Applicant's principals are not associated with any § 1842(a)(3)) to acquire 100 percent of the voting other financial institutions.2 Therefore, the Board has shares of Century Bankshares, Cheyenne, Wyoming concluded that consummation of the proposal would ("Century"), Pioneer Bankshares, Cheyenne, Wyo- not eliminate any significant competition or increase ming ("Pioneer"), and Jeffrey City State Bank, Jeffrey the concentration of banking resources in any relevant City, Wyoming ("Jeffrey Bank"). Through this trans- area. Accordingly, competitive considerations are action Applicant also would indirectly acquire Centu- consistent with approval of the application. ry's subsidiary bank, First State Bank of Lyman, The financial and managerial resources of Appli- Lyman, Wyoming ("First State Bank"), and Pioneer's cant, Century, Pioneer, their subsidiaries and Jeffrey subsidiary bank, Pioneer Bank of Evanston, Evans- Bank are generally satisfactory and their prospects ton, Wyoming ("Pioneer Bank"). appear favorable, especially in light of Applicant's Notice of the application, affording interested per- commitment to provide additional capital to Jeffrey sons opportunity to submit comments, has been given Bank. In this regard, Applicant would incur debt in in accordance with section 3 of the Act. The time for connection with this proposal for the purpose of filing comments and views has expired, and the Board providing the capital injection. However, based on has considered the application and all comments re- past earnings of the various banks, Applicant would ceived in light of the factors set forth in section 3(c) of appear to have sufficient financial flexibility to meet its the Act. (12 U.S.C. § 1842(c)). annual debt servicing requirements while permitting Applicant's proposal represents a reorganization all four banks to maintain adequate capital positions. and consolidation of the existing stock ownership Therefore, considerations relating to banking factors interests of Applicant's principals. Applicant currently in regard to this proposal are consistent with approval. controls Equality State Bank, Cheyenne, Wyoming, Consummation of this proposal would reduce bankwith total deposits of $19.2 million.1 Applicant's prin- ing services available in Jeffrey City, but would have cipals also control Jeffrey Bank, First State Bank, and the corresponding positive effect of introducing bank- Pioneer Bank, which currently have deposits of $2 ing services to Evansville. Considerations relating to million, $11.2 million, and $8.3 million, respectively. the convenience and needs of the communities to be After consummation of this proposal, Applicant would served are consistent with approval of the application. directly own all four banks, with total deposits of $40.7 Accordingly, the Board has determined that consummillion, representing less than 1 percent of total com- mation of the transaction would be in the public mercial bank deposits in the state. The Board has interest and that the application should be approved. concluded that consummation of this proposal would On the basis of the record, the application is aphave no appreciable effect upon the concentration of proved for the reasons summarized above. The transbanking resources in Wyoming. action shall not be made before the thirtieth calendar First State Bank and Pioneer Bank both are located day following the effective date of this Order or later in the Uinta County banking market. In that market, than three months after the effective date of this First State Bank is the third largest of five banks, Order, unless such period is extended for good cause controlling 7.7 percent of market deposits, and Pioneer by the Board or by the Federal Reserve Bank of Bank is the fourth largest bank, controlling 5.0 percent Kansas City, pursuant to delegated authority. of market deposits. Together, First State Bank and Pioneer Bank control 12.7 percent of aggregate market deposits and would rank as the third largest of four 2. Applicant proposes to move Jeffrey Bank 280 miles from its current location to Evansville, Wyoming, a suburb of Casper, Wyo- 1. Banking data are as of March 31, 1983. ming. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 721 By order of the Board of Governors, effective to avoid undue regulatory delays in the processing of August 10, 1983. applications under the BHC Act, the Board's Rules require that a hearing request include a statement of Voting for this action: Governors Wallich, Partee, Rice, why a written presentation would not suffice in lieu of and Gramley. Absent and not voting: Chairman Volcker and a hearing, identifying specifically any questions of Governors Martin and Teeters. fact that are in dispute and summarizing the evidence that would be presented at a hearing. (12 C.F.R. JAMES MCAFEE, § 262.3(e)). The Protestants were afforded an opportu- [SEAL] Associate Secretary of the Board nity to present facts and evidence justifying a hearing, both in written submissions and at a private meeting Mellon National Corporation, initiated by the Federal Reserve Bank of Cleveland. Pittsburgh, Pennsylvania Protestants' submissions do not identify any questions of fact in dispute or summarize or indicate the Order Approving Acquisition of a Bank Holding evidence that they would present at a hearing. Rather, Company Protestants' hearing request is based on allegations which Protestants have not substantiated with any Mellon National Corporation, Pittsburgh, Pennsylva- facts or other evidence in their numerous submissions. nia ("Mellon"), a bank holding company within the The Board has reviewed the submissions of Protestant meaning of the Bank Holding Company Act, has and Applicant, and other material in the record, inapplied for approval under section 3(a)(5) of the Act cluding the reports of examination of Mellon Bank and (12 U.S.C. § 1842(a)(5)) to merge with CCB Bancorp, Applicant by the Office of the Comptroller of the Inc., State College, Pennsylvania ("CCB"), and there- Currency and the Board. Based on its review of the by to acquire its wholly owned subsidiary, Central entire record in this case, the Board does not believe Counties Bank, State College, Pennsylvania that a hearing is warranted or appropriate. According- ("Bank"). CCB does not engage in any nonbanking ly, the Board hereby denies Protestants' hearing reactivities, either directly or through subsidiaries. quest. Notice of the application, affording opportunity for The Board has considered Protestants' objections, interested persons to submit comments and views, has however, in reviewing the application. Protestants been given in accordance with section 3(b) of the Act. contend that consummation of the proposal would The time for filing comments and views has expired, have adverse competitive effects in Pennsylvania in and the application and all comments received, includ- violation of the antitrust laws of the United States. ing those of the Denominational Ministry Strategy, Applicant, the largest banking organization in Pennsyl- Pittsburgh, Pennsylvania ("Protestants"), have been vania, controls three banking subsidiaries with total considered in light of the factors set forth in section deposits of approximately $14.8 billion, representing 3(c) of the Act (12 U.S.C. § 1842(c)). In addition to 15.8 percent of total deposits in commercial banks in interposing numerous objections to the proposed ac- the state.2 CCB, the 30th largest banking organization quisition, Protestants have requested that the Board in Pennsylvania, controls Bank, with deposits of $480 order a hearing or public meeting as a forum to million, representing 0.6 percent of total deposits in produce evidence of alleged violations of laws and commercial banks in the state. Upon consummation of regulations by Mellon. this transaction, Applicant's share of total deposits in With regard to Protestants' request for a hearing, commercial banks in the state would increase by 0.6 section 3(b) of the BHC Act does not require the percent. In view of the fact that in terms of banking Board to hold a hearing concerning an application Pennsylvania is one of the nation's least concentrated unless the appropriate banking authority makes a states, it is the Board's judgment that consummation timely written recommendation of denial of the appli- of this proposal would have no significant effect on the cation. In this case, no such recommendation of denial concentration of banking resources in Pennsylvania. has been received from the Pennsylvania Banking Bank operates branches in the following five bank- Department, and thus no hearing is required.1 Under ing markets in central Pennsylvania: Altoona, State the Board's Rules of Procedure, however, the Board College, Clinton, Union, and Mifflin.3 Applicant's may order a hearing in its discretion. In order to determine whether a hearing would be appropriate and 2. All deposit and market data are as of March 31, 1983. Consolidated financial data for Applicant include The Girard Company, Bala Cynwyd, Pennsylvania, which was merged with Applicant on April 6, 1983. 1. On July 1, 1983, the Pennsylvania Banking Department approved 3. Each of the five banking markets in which Bank operates consist the proposed acquisition of Bank by Applicant. of the respective counties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

722 Federal Reserve Bulletin • September 1983 subsidiary banks operate in nine banking markets, Accordingly, the Board concludes that consummaseven of which are in Pennsylvania and two of which tion of the proposed transaction would not violate the are in Delaware. None of Applicant's banking or antitrust laws and that competitive considerations are nonbanking subsidiaries competes in the same banking consistent with approval of the application. markets in which Bank competes.4 Accordingly, con- The financial and managerial resources and future summation of the proposed transaction would not prospects of Applicant and its subsidiaries and CCB eliminate any significant amount of existing competi- and Bank are regarded as generally satisfactory.9 tion between Applicant and CCB in any relevant Thus, considerations relating to banking factors are market. consistent with approval of the application. The Board also has examined the effect of the In considering the effects of the proposed acquisiproposal on potential or probable future competition in tion on the convenience and needs of the community the relevant banking markets of Applicant and CCB in to be served, the Board has also considered the record light of the Board's policy statement on market exten- of Applicant's banking subsidiaries in meeting the sion mergers.5 In at least one market, the three-firm credit needs of their communities as provided in the concentration ratio is less than 75 percent and it is Community Reinvestment Act ("CRA") (12 U.S.C. therefore not considered concentrated under the § 2901).10 In so doing, the Board has examined the Board's guidelines.6 In the four markets where CCB objections of Protestants relating to Applicant's record competes that are regarded as concentrated under the of performance under CRA, and particularly the re- Board's guidelines, two are not considered attractive cord of Mellon Bank. Specifically, Protestants allege for de novo entry, and with respect to each market that Mellon Bank has failed to respond to the credit there are numerous large Pennsylvania banking orga- needs of the community and has diverted deposits of nizations that are considered probable future entrants. the local community into foreign lending activities. With respect to the seven Pennsylvania markets in The Board has reviewed the submissions of Proteswhich Applicant operates, six are either not highly tant and Applicant regarding these issues. The Board concentrated or unattractive for de novo entry or both. has also considered the conclusions of the Office of the With respect to the Pittsburgh market, which is highly Comptroller of the Currency, which conducted an concentrated7 and in which Mellon is a leading firm, examination of Mellon Bank that included an assessthere are numerous potential entrants. Moreover, ment of Mellon Bank's record of meeting the requirethere is no evidence that CCB is a reasonably likely ments of CRA. potential entrant into any of these markets, and would Protestants allege that Mellon Bank is systematicalnot be so considered under the Board's guidelines. ly contributing to the economic decline of the Monon- Thus, the Board finds that intensive examination is not gahela Valley by emphasizing foreign lending at the required under the Board's proposed policy statement expense of local credit needs. In support of this in any of the 14 markets in which Applicant and CCB allegation, Protestants assert that foreign lending repoperate. Based on the above and all the facts of resents 26 percent of Mellon's assets, and have subrecord, it does not appear that consummation of this mitted data to demonstrate the extent of Mellon proposal would have a significantly adverse effect on Bank's foreign lending." potential competition in any relevant market.8 4. While a data processing subsidiary of Applicant derives some 9. Protestants have accused Applicant of various types of criminal business from Bank's markets, the amount of this competition is not and collusive activities, including violations of the antitrust laws in considered significant since the relevant market for data processing arranging participations in foreign loans and violations of the Pennsylservices is regional or national. vania Racketeer Influenced and Corrupt Organization Act. Protes- 5. 45 Federal Register 9017 (March 3, 1982). tants have submitted no facts to substantiate these charges, and there 6. In the Altoona and State College markets, thrift institutions hold is nothing in the record to warrant a finding of any violation of these 40 and 33 percent, respectively, of total market deposits of banks and statutes. thrift institutions combined. If thrift deposits are included in calculat- Protestants also have alleged that Mellon has violated the BHC ing the concentration ratios in those markets, the three-firm concen- Act by holding more than 5 percent of the voting shares of nonbanking tration ratio is significantly below 75 percent in these markets. companies. While Mellon Bank may hold, in a fiduciary capacity 7. In the Pittsburgh market, thrift institutions control 30 percent of through its trust department, more than 5 percent of the voting shares combined total market deposits. The three-firm concentration ratio in of nonbanking interest, the record does not indicate that Mellon Pittsburgh is reduced to 59.7 percent if thrift deposits are included in illegally holds more than 5 percent of the voting shares of any the calculation. company engaged in nonbanking activities. 8. While CCB could establish a de novo bank in the Delaware 10. The CRA requires the Board to assess the record of Applicant's markets in which Applicant operates a subsidiary bank, under Dela- banking subsidiaries in helping to meet the credit needs of their entire ware law the operations of a bank established by an out-of-state bank communities, including low- and moderate-income neighborhoods, holding company are restricted to commercial and international consistent with safe and sound operations, and to take that record into business. Applicant's Delaware subsidiary is exempt from these account in its evaluation of this application. restrictions because it was "grandfathered" under Delaware law. 11. Protestants cite Mellon Bank's role in the bankruptcy of Mesta Thus, any Delaware subsidiary established by CCB would not be an Machine Corporation as evidence of its unwillingness to support local effective competitor of Applicant's Delaware subsidiary. industry by extending credit. From the record, it appears that Mellon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 723 In response, Applicant states that much of its for- asset-based lending programs, a health care financing eign lending has resulted from overseas expansion by program, and its small base rate lending program to Mellon Bank's domestic customers, many of which provide loans to small businesses at a special rate. In are large multi-national corporations. Applicant con- addition, Applicant plans to sell Bank's mortgages in tends that its foreign loans are not funded with depos- the secondary market to improve the flow of mortgage its from southwestern Pennsylvania and that it has funds. more foreign deposits than foreign loans outstanding. Thus, based on its review of the facts of record, Applicant also states that a large part of Mellon Bank's including Mellon Bank's performance with respect to international assets are bankers' acceptances which factors to be considered under CRA, the Board conare not customarily funded by deposits. Finally, Appli- cludes that considerations relating to the convenience cant states that it is aware of the economic plight of the and needs of the community to be served are consist- Monongahela Valley, and states that it will make ent with approval of the application. available its resources to revitalize the area and is The transaction shall not be consummated before open to all reasonable requests for support that can be the thirtieth calendar day following the effective date provided by Mellon Bank. of this Order or later than three months after the A review of Mellon Bank's overall CRA record effective date of this Order, unless such period is demonstrates that it is not systematically denying extended for good cause by the Board or by the business or housing credit to its local community, Federal Reserve Bank of Cleveland acting pursuant to including the Monongahela Valley. There is no evi- delegated authority. dence of prescreening to discourage loan applicants or By order of the Board of Governors, effective of discriminatory credit practices. Rather, Mellon August 15, 1983. Bank has contributed significantly to development projects within the Pittsburgh community through its Voting for this action: Governors Wallich, Partee, Rice, Community Development Division and its Branch and Gramley. Voting against this action: Governor Teeters. Absent and not voting: Chairman Volcker and Governor Management System. Specifically, the record shows Martin. that Mellon Bank has played an active role in extending urban development loans, industrial development WILLIAM W. WILES, loans and loans to civic and religious organizations. [SEAL] Secretary of the Board Financial support has also been provided by Mellon Bank through the purchase of local municipal obligations. In addition, Mellon Bank is a leader in extending Dissenting Statement of Governor Teeters student loans and loans under the Small Business Administration programs. I would deny this application on the grounds that the While Mellon Bank has a large portion of its assets proposed combination of these bank holding compain foreign loans, when considered in light of Mellon nies would have a significantly adverse effect on Bank's active involvement in community development probable future competition in four of the five markets in the Pittsburgh area and its expressed interest in where CCB competes. I believe that Mellon National providing financial support to revitalize the Mononga- Corporation has the capacity to enter each of these hela Valley, the Board is unable to conclude that markets on a de novo or foothold basis. In light of the Mellon Bank's foreign lending has caused it to ignore concentrated nature of these markets, the elimination local credit needs. The Board also does not find any of Mellon National Corporation as a probable future evidence in the record to support Protestants' claim entrant is substantially anticompetitive. that Applicant and Mellon Bank are engaged in a I believe that the Board's action approving this conspiracy to close local industrial firms in the Pitts- application represents another situation in which the burgh area. Board's proposed guidelines relating to probable fu- With respect to other convenience and needs con- ture competition permit combinations of bank holding siderations, approval of the application would result in companies that have substantially anticompetitive improved services for Bank's customers. Specifically, consequences. As indicated in my previous dissenting following consummation, Applicant plans to introduce statements in the Board's orders approving the applications of Mellon National Corporation to acquire The Girard Company, 69 FEDERAL RESERVE BULLETIN 302 (1983), Pittsburgh National Corporation to consolidate Bank extended credit to Mesta in recent years despite the fact that Mesta had been experiencing financial difficulties. It was only after with Provident National Corporation, 69 FEDERAL Mesta suspended a significant portion of its operations that Mellon RESERVE BULLETIN 51 (1983), and Banc One Corpora- Bank sought repayment of its loans. The record does not support a tion to merge with Winters National Corporation, 69 finding that Mellon Bank was responsible for Mesta's failure. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

724 Federal Reserve Bulletin • September 1983 FEDERAL RESERVE BULLETIN 379 (1983), I continue to tile and First-Wichita do not operate any subsidiary believe that the Board should develop and apply stan- banks in the same market, consummation of the prodards that more realistically reflect the adverse effects posal would not eliminate existing competition in any of the elimination of probable future competition. relevant market. Accordingly, I dissent from the Board's decision The Board has examined the effect of the proposed regarding this application. merger of Mercantile and First-Wichita upon probable future competition in the relevant geographic markets August 15, 1983 in light of the Board's guidelines on probable future competition.2 Because of First-Wichita's size and its history of limited geographic expansion, the Board Mercantile Texas Corporation, does not consider First-Wichita to be a likely future Dallas, Texas entrant in the markets in which Mercantile is represented. Accordingly, the Board concludes that the Order Approving Merger of Bank Holding proposal would not have substantial adverse effects on Companies probable future competition in any of the markets in which First-Wichita does not operate. Mercantile Texas Corporation, Dallas, Texas ("Mer- First-Wichita operates in the Wichita Falls banking cantile"), a bank holding company within the meaning market.3 In view of Mercantile's size, substantial of the Bank Holding Company Act of 1956, (12 U.S.C. managerial and financial resources and previous his- § 1841 et seq.) has applied for the Board's approval tory of expansion, it appears to be a potential entrant under section 3(a)(5) of the Bank Holding Company into the Wichita Falls market. First-Wichita is the Act (12 U.S.C. § 1842(a)(5)), to merge with First- largest commercial banking organization in the market Wichita Bancshares, Inc., ("First-Wichita") and and controls 38.5 percent of the total deposits in thereby indirectly to acquire The First-Wichita Na- commercial banks in the market. The Wichita Falls tional Bank of Wichita Falls and Southwest National market is highly concentrated, with the three largest Bank of Wichita Falls, all of Wichita Falls, Texas. commercial banking organizations controlling 79.2 Notice of the application, affording opportunity for percent of the market. There are eleven commercial interested persons to submit comments, has been banking organizations operating in the Wichita Falls given in accordance with section 3(b) of the Act. The banking market, and there are numerous other probatime for filing comments has expired, and the Board ble future entrants into the Wichita Falls market. has considered the application and all comments re- These facts mitigate the Board's concerns regarding ceived in light of the factors set forth in section 3(c) of the elimination of Mercantile as a probable future the Act. entrant into the Wichita Falls market. On the basis of Mercantile, the fifth largest commercial banking the above and other facts of record, the Board conorganization in Texas, controls 27 banks with aggre- cludes that consummation of the proposed merger gate deposits of $7.5 billion, representing 5.7 percent would not have such adverse effects on probable of the total deposits in commercial banks in Texas.1 future competition in the relevant market as to warrant First-Wichita, the twentieth largest commercial bank- denial of the proposal. ing organization in Texas, controls two banks with The financial and managerial resources and future aggregate deposits of $440.7 million, representing 0.34 prospects of Mercantile, First-Wichita, and their subpercent of total deposits in commercial banks in Tex- sidiary banks are generally satisfactory. Accordingly, as. Consummation of the proposed transaction would considerations relating to banking factors are consistincrease Applicant's share of the total deposits in ent with approval. Although there is no evidence in the commercial banks in the state to 6.1 percent and its record indicating that the banking needs of the commurank would remain unchanged. Although the size of nity to be served are not being met, consummation of the the organizations involved is significant, approval of this proposal will have little effect on statewide concentration or banking structure. Accordingly, the Board concludes that consummation of the proposal would not have a significant effect on the concentra- 2. "Proposed Policy Statement of the Board of Governors of the tion of banking resources in Texas. Because Mercan- Federal Reserve System for Assessing Competitive Factors Under the Bank Merger Act and the Bank Holding Company Act." 47 Federal Register 9017 (March 3, 1982). Although the proposed policy statement has not been approved by the Board, the Board is using the policy guidelines in its analysis of the effect of a proposal on probable future competition. 3. The Wichita Falls banking market is approximated by the 1. Deposit data are as of December 31, 1982. Wichita Falls SMSA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 725 merger will result in some additional services for First- Orders Under Section 4 of Bank Holding Wichita's customers. Accordingly, considerations re- Company Act lating to the convenience and needs of the community to be served also are consistent with approval. Thus, The Chase Manhattan Corporation, based on the foregoing and other facts of record, the New York, New York Board has determined that consummation of the proposed transaction would be in the public interest and Order Approving Acquisition of Retail Discount that the application should be approved. Broker On the basis of the record, the application is approved for the reasons summarized above. The acqui- The Chase Manhattan Corporation, New York, New sition of shares shall not be made before the thirtieth York ("Chase"), a bank holding company within the calendar day following the effective date of this Order meaning of the Bank Holding Company Act of 1956, as or later than three months after the effective date of amended (12 U.S.C. § 1841, et seq.) (the "Act"), has this Order unless such period is extended by the Board applied for the Board's approval under section 4(c)(8) or by the Federal Reserve Bank of Dallas, acting of the Act (12 U.S.C. § 1843(c)(8) and section pursuant to delegated authority. 225.4(b)(2) of the Board's Regulation Y (12 C.F.R. By Order of the Board of Governors, effective § 225.4(b)(2)), to acquire 100 percent of the voting August 17, 1983. shares of Rose & Company Investment Brokers, Inc., Chicago, Illinois ("Rose"), a company that engages in Voting for this action: Governors Wallich, Partee, Rice, discount retail securities brokerage, margin lending, and Gramley. Voting against this action: Governor Teeters. and related activities. Absent and not voting: Chairman Volcker and Governor Notice of the application, affording interested per- Martin. sons an opportunity to submit comments and views, was duly published in the Federal RegisterThe time JAMES MCAFEE, for filing comments and views has expired, and the [SEAL] Associate Secretary of the Board Board has considered the application and all comments received in light of the factors set forth in section 4(c)(8) of the Act. Chase is a bank holding company by virtue of its Dissenting Statement of Governor Teeters control of The Chase Manhattan Bank, N.A., New I would deny this application on the grounds that the York, New York ("Chase Bank"), and The Chase proposed combination of these bank holding compa- Manhattan Bank (USA), National Association, Wilnies would have a significantly adverse effect on mington, Delaware. Chase holds total consolidated probable future competition in the Wichita Falls bank- assets of $81.5 billion, and is the second largest ing market. I believe that Mercantile Texas Corpora- commercial banking organization in New York and the tion has the capacity to enter the Wichita Falls banking third largest bank holding company in the United market on a de novo or foothold basis. In light of the States.2 Chase also engages, through certain of its concentrated nature of the market and the share of subsidiaries, in various permissible nonbank activities commercial bank deposits held by First-Wichita, the throughout the United States and abroad, including elimination of Mercantile Texas Corporation as a commercial financing, factoring, leasing, mortgage probable future entrant is substantially anticompeti- banking, and credit-related insurance activities. tive. Rose, a "discount" retail securities broker, is en- I believe that the Board's action approving this gaged in the purchase and sale of securities solely as application represents another situation in which the agent upon the order and for the account of customers, Board's proposed guidelines relating to probable fu- extending securities credit in conformity with the ture competition permit combinations of bank holding Board's Regulation T, and various incidental activicompanies that have substantially anticompetitive ties.3 Rose is registered as a broker-dealer with the consequences. As I have previously indicated, I continue to believe that the Board should develop and apply standards that more realistically reflect the adverse effects of the elimination of probable future competition. 1. 48 Federal Register 23485 (May 25, 1983). 2. Asset data and rankings are as of June 30, 1983. Accordingly, I dissent from the Board's decision 3. Rose carries customer credit balances (paying interest on some regarding this application. of them), and provides to its brokerage customers securities custodial services and access to IRA accounts, for some of which Rose acts as trustee in conformity with sections 401 and 408 of the Internal August 17, 1983 Revenue Code. In addition, Rose borrows securities in connection Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

726 Federal Reserve Bulletin • September 1983 Securities and Exchange Commission, is qualified to Act.7 In BankAmerica, the Board also determined that do business in all fifty States and the District of carrying customer credit balances awaiting investment Columbia, and is a member or participant of various (paying interest on some of them), providing access to national and regional securities exchanges and clearing such balances by way of third-party payment devices organizations, including the New York Stock Ex- under arrangements with unaffiliated commercial change, Inc., the National Association of Securities banks, providing securities custodial services, and Dealers, Inc., and the Midwest Securities Trust Com- providing access to IRA accounts and "sweeps" to pany/Midwest Clearing Corporation. Rose's customer unaffiliated money market funds are incidental to the accounts are insured by the Securities Investor Protec- provision of permissible retail securities brokerage and tion Corporation. Rose offers its services nationwide margin credit services.8 At the same time, the Board from its principal office in Chicago, Illinois, and from also determined that retail securities brokerage — additional offices in Boston, Houston, Los Angeles, purchasing and selling securities without recourse, Pittsburgh, and Washington, D.C.4 Rose has plans to solely upon the order and for the accounts of customopen additional offices in New York and San Fran- ers — is not an activity prohibited to member bank cisco. affiliates by the provisions of the Glass-Steagall Act.9 Following consummation of this acquisition, Chase Based upon its review of this application and the proposes to expand Rose's services to include afford- substantial similarity between the proposed activities ing Rose's customers access to their net free balances and those previously approved by the Board in its awaiting investment through checks or debit cards BankAmerica Order, the Board adopts and reaffirms under an arrangement with an unaffiliated commercial its prior determinations and concludes that the probank, and access to a "sweep" arrangement under posed retail discount securities brokerage and margin which Rose's customers may invest portions of such lending activities involved in this application are closebalances in unaffiliated money market funds. In addi- ly related to banking and not proscribed by the provition, Rose proposes to respond to customer requests sions of the Glass-Steagall Act. In addition, the Board for quotations on municipal bonds held by an operat- adopts and reaffirms its prior determination in Banking subsidiary of Chase Bank on a nonpreferential America that the incidental activities involved in this basis.5 Following the acquisition, Rose will not pro- application are incidental to permissible margin lendvide investment advice, solicit orders to purchase or ing and securities brokerage activities, and are themsell particular securities, or engage in securities under- selves closely related to banking.10 writing or market-making activities. Section 4(c)(8) of the Act authorizes a bank holding company to acquire shares of a company that engages in activities determined by the Board (by order or regulation) to be so closely related to banking or 7. The Board's order was recently affirmed by the United States managing or controlling banks as to be a proper Court of Appeals for the Second Circuit. See Securities Industry Association v. Board of Governors of the Federal Reserve System, incident thereto. In its order approving the application No. 83-4019 (2d Cir. July 15, 1983). of Bank America Corporation, San Francisco, Califor- 8. In a recent order, the Board reaffirmed its previous findings that nia, to acquire the Charles Schwab Corporation,6 the offering securities custodial services and carrying customer credit balances awaiting investment (and paying interest on some of them) Board determined that retail discount securities bro- are both closely related to banking and incidental to permissible kerage and extending securities credit in conformity securities brokerage and margin lending activities. See United Jersey with the Board's Regulation T are "closely related to Banks, 69 FEDERAL RESERVE BULLETIN 565 (1983). On February 22, 1983, the Board published for comment a proposed rule that would banking" within the meaning of section 4(c)(8) of the add discount securities brokerage and securities credit lending to the list of nonbanking activities designated in Regulation Y as generally permissible for bank holding companies. (48 Federal Register 7746 (February 24, 1983)). The proposed rule, with minor modifications, was adopted by the Board on August 10, 1983. 9. BankAmerica Corporation, 69 FEDERAL RESERVE BULLETIN at with customers' short sales from Midwest Securities Trust Company/ 114-116. Section 20 of the Glass-Steagall Act prohibits the affiliation Midwest Clearing Corporation ("Midwest") and lends customers' of any bank that is a member of the Federal Reserve System with any margined securities to Midwest on a "marked to market", cash- corporation or similar organization that is "engaged principally in the secured basis. issue, flotation, underwriting, public sale, or distribution" of securi- 4. Rose's securities borrowing and lending activities are conducted ties. (12 U.S.C. § 377). exclusively from the Chicago office on behalf of all of Rose's offices. 10. The Board recognizes that securities borrowing and lending 5. Applicant states that in responding to customer inquiries, Rose activities were not specifically discussed in its order in BankAmerica will not make any recommendations concerning the suitability of any Corporation. However, based on the record of this application, the municipal securities, nor will it encourage the purchase of securities Board finds that these activities are both closely related to banking held in inventory by an affiliate in preference to other municipal and incidental to permissible discount securities brokerage activities securities. and the extension of margin credit in conformity with Regulation T. 6. BankAmerica Corporation, 69 FEDERAL RESERVE BULLETIN 105 See 12 C.F.R. § 220.6(h) (1982); 12 C.F.R. § 220.16, 48 Federal (1983). Register 23161, 23171 (May 24, 1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 727 In determining whether the proposed activities are banking from certain types of securities-related activi- "a proper incident to banking or managing or control- ties. Accordingly, the Board believes that performling banks", section 4(c)(8) of the Act further requires ance of the limited types of securities-related activities the Board to consider whether performance of the involved in this proposal by a subsidiary of a bank proposed activities by an affiliate of a bank holding holding company is consistent with the public interest company "can reasonably be expected to produce and the Glass-Steagall and Bank Holding Company benefits to the public, such as greater convenience, Acts. increased competition, or gains in efficiency, that Based upon the foregoing and other considerations outweigh possible adverse effects, such as undue in the record, the Board has determined that consumconcentration of resources, decreased or unfair com- mation of this proposal can reasonably be expected to petition, conflicts of interests, or unsound banking produce benefits to the public that outweigh adverse practices." (12 U.S.C. § 1843(c)(8)). On the basis of effects, and that the balance of the public interest the record of the application, the Board finds that factors that the Board is required to consider under consummation of this proposal can reasonably be section 4(c)(8) of the Act is favorable. Accordingly, expected to produce significant public benefits in the the application is hereby approved. form of increased competition, greater convenience, This determination is subject to the conditions set and increased efficiency in the provision of retail forth in section 225.4(c) of Regulation Y (12 C.F.R. securities brokerage services, and that these benefits § 225.4(c)) and the Board's authority to require such outweigh possible adverse effects. modification or termination of the activities of a hold- Based on the facts of record, it appears that the ing company or any of its subsidiaries as the Board affiliation of Rose with Chase may reasonably be finds necessary to assure compliance with the proviexpected to result in increased competition, consumer sions and purposes of the Act and the Board's regulaconvenience, and efficiency in the provision of retail tions and orders thereunder, or to prevent evasions securities brokerage services. By affording Rose ac- thereof. cess to Chase's extensive office network and substan- Because of the extensive consideration accorded to tial managerial, technical, and capital resources, con- Rose's securities brokerage, margin lending, and incisummation of this proposal can reasonably be dental activities in the context of this application, and expected to significantly strengthen Rose as a compet- having determined that the public interest consideritor in the nationwide market for retail securities ations of section 4(c)(8) of the Act favor approval of brokerage services, and to make discount brokerage Chase's proposal, the Board has determined that furservices more conveniently accessible to the public. ther applications by Chase to extend Rose's retail Since Rose's brokerage commissions are substantially discount securities brokerage, margin lending, and below the publicly announced commission rates of the incidental activities to additional offices may be proclarger and better known "full-line" brokerage firms, essed in the same manner as other de novo applicastrengthening Rose as a competitor is likely to result in tions under the provisions of section 225.4(b)(1) of additional competitive pressure on full-line brokerage Regulation Y (12 C.F.R. § 225.4(b)(1)). Authority is firms to "unbundle" brokerage services from research hereby delegated to the Federal Reserve Bank of New and advisory services and to lower their publicly York to take action on such notices properly filed, as prescribed in that section. announced brokerage commission rates. In addition, by permitting Chase and Rose to share their respective The proposed activities shall not commence later marketing, managerial, and technical resources, con- than three months after the effective date of this summation of the proposal may be expected to pro- Order, unless such period is extended for good cause duce increased efficiency in their provision of broker- by the Board or by the Federal Reserve Bank of New age and related financial services to the public. York acting pursuant to delegated authority. There is no evidence in the record to indicate that By order of the Board of Governors, effective approval of this application would result in an undue August 10, 1983. concentration of resources, decreased or unfair competition, unsafe or unsound banking practices, or other adverse effects in any market. In this regard, because Voting for this action: Governors Wallich, Partee, Rice, Rose would not deal in securities for its own account and Gramley. Absent and not voting: Chairman Volcker and and would not promote any particular security through Governors Martin and Teeters. the provision of investment advice or otherwise, it would not have the "salesman's stake" or promotional interest in the success of any particular issue of JAMES MCAFEE, securities that led Congress to mandate a separation of [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

728 Federal Reserve Bulletin • September 1983 Fidelcor, Inc., management as to warrant denial of the application. Rosemont, Pennsylvania Applicant, with total assets of $4.1 billion,2 recently received Board approval to merge with Southeast Order Approving Retention of Assets National Bancshares of Pennsylvania, Inc., Malvern, Pennsylvania.3 Upon consummation of the approved Fidelcor, Inc., Rosemont, Pennsylvania, a bank hold- merger, the consolidated organization will have total ing company within the meaning of the Bank Holding assets of $4.9 billion. Applicant has three nonbanking Company Act ("Act"), has applied for the Board's subsidiaries that engage in mortgage banking activiapproval under section 4(c)(8) of the Act (12 U.S.C. ties; Fidelcor Mortgage Corporation, Latimer & Buck § 1843(c)(8)) and section 225.4(b)(2) of the Board's Mortgage Company, and L&B. Of these, only L&B Regulation Y (12 C.F.R. § 225.4(b)(2)) to retain the engages in commercial mortgage activities; the other assets of the Philadelphia office of Dorman & Wilson, two deal solely in residential mortgages. L&B and the Inc., White Plains, New York ("D&W"), that were Philadelphia office of D&W both originate and service acquired by Applicant's wholly-owned subsidiary, commercial mortgages in the regional market approxi- Latimer & Buck, Inc., Philadelphia, Pennsylvania mated by Pennsylvania, southern New Jersey, and ("L&B"). D&W primarily originates and services Delaware.4 Prior to its acquisition of D&W, L&B serviced mortgages totaling $357.5 million which repcommercial mortgages on behalf of investors whose resented 5.3 percent of the commercial mortgages customers are real estate developers, builders and owners of commercial property.1 These activities have serviced by commercial banks and mutual savings banks in the market. D&W serviced mortgages totalbeen determined by the Board to be closely related to ing $120 million which represented 1.8 percent of the banking (12 CFR § 225.4(a)(1) and (3)). commercial mortgages serviced by commercial banks Notice of the application, affording interested parand mutual savings banks in the market. Thus, this ties an opportunity to submit comments on the public acquisition eliminated existing competition between interest factors has been duly published (48 Federal Applicant and D&W. The Board, however, does not Register 24459 (1983)). The time for filing comments consider the elimination of competition to be signifihas expired, and the Board has considered the applicacant because of certain facts of record including the tion and all comments received in light of the public following. interest factors set forth in section 4(c)(8) of the Act. By this application, Applicant seeks to retain the First, there are numerous competitors for commerassets of the Philadelphia office of D&W which it cial mortgage servicing in the market, including 484 acquired on March 22, 1983, without prior Board commercial banks and mutual savings banks. In addiapproval under section 4 of the Act. The record tion to commercial banks and mutual savings banks, indicates that Applicant acted upon the advice of one savings and loan associations and mortgage companies of its officers, who apparently misconstrued the also originate and service commercial mortgages in the Board's regulation, and believed the acquisition of the market. Therefore, the percentage of commercial D&W office was permitted without prior approval mortgages serviced by Applicant would be even smallpursuant to the Board's interpretation of Regulation Y er if all competitors in the market were considered. In found in 12 C.F.R. § 225.132. Upon notification by the addition, the regional market for commercial mort- Reserve Bank that an application under the Act was gages is not concentrated 5 and is characterized by low required, Applicant promptly filed this application and barriers to entry. Accordingly, the Board concludes otherwise cooperated fully with the staff of the Re- that this acquisition did not have any significant effects serve Bank in the resolution of this matter. In light of on competition in the commercial mortgage market. these facts and other facts in the record evidencing Furthermore, there is no evidence in the record to Applicant's intent to comply with the requirements of indicate that the transaction resulted in unfair competithe Act and the Board's regulations, the Board has determined that the circumstances surrounding this matter do not reflect so adversely upon Applicant's Applicant does not intend to engage in the leasing of real property and plans only to service these eight leases until their expiration. Thus, the Board concludes that this application need not include a request for authority to engage in leasing activities pursuant to section 225.4(a)(6)(h) of Regulation Y. 1. As part of the acquisition, L&B acquired the commissions due 2. Banking data are as of December 31, 1982. on eight leases. L&B's obligations regarding these leases are the 3. 69 FEDERAL RESERVE BULLETIN 445 (1983). collection of rent, deduction of a 5 percent commission and remittance 4. The southern New Jersey portion of the market consists of that of the balance to the lessors. Upon the final expiration of the leases, section of New Jersey which is part of the third Federal Reserve Applicant has stated that it will not seek new lessees for the premises District. subject to the leases or accept additional responsibilities with respect 5. The ten largest commercial banks and mutual savings banks hold to the leases. These activities are permissible under section 49.3 percent of the commercial mortgages serviced by these institu- 225.4(a)(6)(h) (12 C.F.R. § 225.4(a)(6)(ii)) of Regulation Y. However, tions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 729 tion, conflicts of interests, unsound banking practices tracts would cover U.S. government securities, negoor any other adverse effects. With respect to the public tiable money market instruments and foreign exbenefits, Applicant expects that lower charges to change. customers will result from the efficiencies in manage- Notice of the application, affording interested perment that will be realized from this acquisition. On the sons an opportunity to submit comments and views on basis of these and other facts of record, the Board the relation of the proposed activity to banking and on concludes that the benefits to the public that will result the balance of the public interest factors regarding the from Applicant's retention of the assets of the Phila- application, has been published (48 Federal Register delphia office of D&W outweigh whatever adverse 20139 (1983)). The time for filing comments and views effects on competition resulted from the acquisition. has expired and the Board has considered the applica- Based upon the foregoing and other considerations tion and all comments received in light of the public reflected in the record, the Board has determined that interest factors set forth in section 4(c)(8) of the Act. the balance of the public interest factors the Board is Applicant, with total domestic assets of $28.1 bilrequired to consider under section 4(c)(8) is favorable. lion, is a bank holding company by virtue of its control Accordingly, the application is hereby approved. This of 22 banks located in an 11 state area including determination is subject to the conditions set forth in Arizona, California, Colorado, Idaho, Nevada, New § 225.4(c) of Regulation Y and to the Board's authority Mexico, Oregon, Utah, Washington, Wyoming, and to require such modification or termination of the Montana. Applicant's lead banking subsidiary, First activities of a holding company or any of its subsidiar- Interstate Bank of California ("FICAL"), is the fifth ies as the Board finds necessary to assure compliance largest banking organization in California with $13.3 with the provisions and purposes of the Act and the billion in deposits, representing 8.04 percent of total Board's regulations and orders issued thereunder, or commercial bank deposits in the state.2 Applicant to prevent evasion thereof. engages through subsidiaries in various nonbanking By order of the Board of Governors, effective activities that are permissible for bank holding com- August 9, 1983. panies. In order to approve an application submitted pursu- Voting for this action: Chairman Volcker and Governors ant to section 4(c)(8) of the Act, the Board must first Wallich, Partee, Teeters, Rice, and Gramley. Absent and not voting: Governor Martin. determine that the proposed activity is closely related to banking or managing or controlling banks. On JAMES MCAFEE, several prior occasions, the Board has determined that [SEAL] Associate Secretary of the Board FCM activities with respect to futures contracts regarding U.S. government securities, money market instruments, and foreign exchange were closely related to banking.3 Upon consideration of all the facts of First Interstate Bancorp, record, the Board has determined that Futures' pro- Los Angeles, California posed activities as an FCM are closely related to banking. Order Approving Application to Engage in Certain FICAL has long participated in the cash and for- Futures Commission Merchant Activities ward markets for foreign exchange for its own account and the account of customers. Since Applicant already First Interstate Bancorp, Los Angeles, California, a has extensive experience in these markets, acting as bank holding company within the meaning of the Bank an FCM in the futures market for this commodity Holding Company Act of 1956, as amended (12 U.S.C. would be an integral adjunct to these present services, § 1841 et seq.) (the "Act"), has applied for the Board's approval under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the Board's Regulation Y (12 C.F.R. § 225.4(b)(2)) to engage reconciliation of trades and communication linkage between customthrough its subsidiary, F.I. Futures Corporation, Los ers and the exchange floor in connection with its proposed FCM services. These functions would be performed for Futures' customers Angeles, California ("Futures"), in acting as a futures only as part of its execution services and would not be offered commission merchant ("FCM") for nonaffiliated per- separately or on a fee basis. It appears that such services are sons, for the execution and clearance of certain futures incidental to the provision of Futures' FCM activities. National Courier Association v. Board of Governors, 516 F.2d 1229, 1241 (D.C. contracts on major commodity exchanges.1 Such con- Cir. 1975). 2. All banking data are as of December 31, 1982. 3. J.P. Morgan & Co. Incorporated, 68 FEDERAL RESERVE BULLE- TIN 514 (1982); Bankers Trust New York Corporation, 68 FEDERAL RESERVE BULLETIN 651 (1982); Citicorp, 68 FEDERAL RESERVE 1. Futures also intends to provide general research and advice on BULLETIN 776 (1982); BankAmerica Corporation, 69 FEDERAL REmarket conditions and trading strategies; client account information, SERVE BULLETIN 216 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

730 Federal Reserve Bulletin • September 1983 particularly since forward contracts in foreign ex- by the CFTC to effectuate the provisions of the change are generally regarded as the functional equiv- Commodity Exchange Act.5 Applicant proposes to alent of futures contracts. conduct its FCM activities through a separately incor- FICAL has been an active participant in the cash porated subsidiary that would be subject to the Commarket for U.S. government securities on behalf of its modity Exchange Act, and regulation by the CFTC correspondent banks and corporate clients. Applicant and the various commodity exchanges. The Board has is also a member of the Association of Primary Deal- considered the impact of this statutory and regulatory ers. In addition, a number of Applicant's banking framework in evaluating the likelihood that significant subsidiaries issue domestic and Eurodollar CDs in the adverse effects regarding conflicts of interests, uncash market and trade in this market for the account of sound banking practices, decreased or unfair competitheir customers. Applicant's experience in these activ- tion, or undue concentration of resources would develities has provided it with useful expertise in areas that op in this case. are operationally or functionally similar to FCM activi- On the basis of all the facts of record, the Board has ties for nonaffiliated persons in government securities determined that the provision by Futures of the proand money market instruments. Thus, the Board con- posed FCM services to nonaffiliated persons would cludes, as it has previously, that the proposed FCM not result in decreased or unfair competition, conflicts activities for government securities, negotiable money of interests, unsound banking practices or undue conmarket instruments and foreign exchange are closely centration of resources in either commercial banking related to banking. or the market for FCM services. In reaching this In order to approve this application, the Board also conclusion, the Board has placed particular reliance is required to determine that the performance of the on the following features of Applicant's proposal to proposed activities by Futures "can reasonably be conduct FCM activities: expected to produce benefits to the public, such as 1. Futures shall not trade for its own account. greater convenience, increased competition or gains in 2. The instruments upon which the proposed futures efficiency that outweigh possible adverse effects, such contracts are based, are essentially financial in as undue concentration of resources, decreased or character and the contracts are of a type that a bank unfair competition, conflicts of interests, or unsound may execute for its own account. banking practices." (12 U.S.C. § 1843(c)(8)). 3. Futures shall have an initial capitalization that is Consummation of this proposal would provide add- in substantial excess of that required by CFTC ed convenience to clients of Applicant trading in the regulations, and will maintain fully adequate capitalcash, forward and futures markets for the financial ization. instruments involved in this application. The Board 4. Futures shall enter into a formal service agreeexpects that the de novo entry of Futures into the ment that specifies the services that FICAL will market for FCM services would increase the level of supply to Futures. These services include the ascompetition among FCMs already in operation. Fur- sessment of customer credit risk and continuous ther, it appears that Futures is particularly well monitoring of customer positions and the status of equipped to provide FCM services to depository insti- customer margin accounts. tutions in light of Applicant's experience in providing 5. Through its proposed service agreement with related services to depository institutions. According- FICAL, Futures will be able to assess customer ly, the Board has concluded that the performance of credit risks, and will take such assessments into the proposed activities by Futures can reasonably be consideration in establishing appropriate position expected to produce benefits to the public. limits for each customer, both with respect to each The Board recognizes that the activity of executing type of contract and with respect to the customer's and clearing futures contracts involves various types aggregate position for all contracts. of financial risks and potential conflicts of interests, 6. Futures shall not, without the prior consent of the and is susceptible to anticompetitive and manipulative Board, become a clearing member of any exchange practices. In previous actions approving applications whose rules require the parent corporation of a to engage in FCM activities, the Board has relied on clearing member to also become a clearing member, actions taken by Congress to address these types of adverse effects through the passage of the Commodity Exchange Act, as amended,4 and the creation of the Commodity Futures Trading Commission ("CFTC"). 5. For example, CFTC regulations require FCMs to keep detailed The Board also has relied on regulations promulgated records on many aspects of FCM activities, such as segregation of funds and investments made on behalf of customers, (17 C.F.R. §§ 1.20, 1.25); prescribe protective procedures for such activities as buying and selling contracts of two customers on opposite sides of the same transaction, (17 C.F.R. § 1.39); and impose minimum financial 4. 7 U.S.C. §§ 1-24. and related reporting requirements, (17 C.F.R. §§ 1.10-. 18). 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Legal Developments 731 unless the requirement is waived with respect to Hongkong and Shanghai Banking Corporation, Applicant. Hong Kong 7. Futures has committed that it will, in addition to time-stamping orders of all customers to the nearest Kellett, N.V., minute, execute all orders, to the extent consistent Curacao, Netherlands Antilles with customers' specifications, in strictly chronological sequence, and that it will execute all orders HSBC Holdings, B.V., with reasonable promptness with due regard to Amsterdam, The Netherlands market conditions. 8. Applicant and its subsidiaries have demonstrated Marine Midland Banks, Inc., expertise and established capability in the cash, Buffalo, New York forward, or futures markets for the contracts involved. Order Approving Application to Engage in Equity 9. Applicant will require Futures to advise each of Financing Activities its customers in writing that doing business with Futures will not in any way affect any provision of The Hongkong and Shanghai Banking Corporation credit to that customer by any other subsidiary of ("HSBC"), Hong Kong; Kellett, N.V., Curacao, Applicant. Netherlands, Antilles; HSBC Holdings, B.V. ("Hold- 10. Applicant is adequately capitalized to engage in ings"), Amsterdam, The Netherlands; and Marine additional nonbanking activities. Midland Banks, Inc. ("MMBI"), Buffalo, New York 11. Futures will not extend credit to a customer for (collectively referred to as "Applicants"), bank holdthe purpose of meeting initial or maintenance margin ing companies within the meaning of the Bank Holding requirements of a customer, subject to the limited Company Act ("Act"), have applied for the Board's exception of posting margin on behalf of customers approval under section 4(c)(8) of the Act (12 U.S.C. in advance of prompt reimbursement. § 1843(c)(8)) and section 225.4(b)(2) of the Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to engage Based upon the foregoing and other considerations de novo, through their wholly-owned subsidiary, Mareflected in the record, the Board has determined that rine Midland Realty Credit Corporation, Buffalo, New the public benefits associated with consummation of York ("Company"), in the activity of arranging equity this proposal can reasonably be expected to outweigh financing. While this activity has not been specified by possible adverse effects, and that the balance of the the Board in Regulation Y as permissible for bank public interest factors, which the Board is required to holding companies, the Board has determined by order consider under section 4(c)(8) of the Act, is favorable. that arranging equity financing subject to certain con- Accordingly, the application is hereby approved. ditions is closely related to banking.1 This determination is subject to the conditions set Notice of the application, affording interested perforth in the Board's Order and section 225.4 of Regula- sons an opportunity to submit comments on the protion Y and the Board's authority to require such posal has been duly published (48 Federal Register modification or termination of the activities of a hold- 24786 (1983)). The time for filing comments has exing company or any of its subsidiaries as the Board pired and the Board has considered the application and finds necessary to assure compliance with the provi- all comments received in light of the public interest sions and purposes of the Act and the Board's regula- factors set forth in section 4(c)(8) of the Act. HSBC, a tions and orders issued thereunder, or to prevent bank organized under the laws of Hong Kong, is the evasion thereof. 26th largest banking organization in the world with The proposed activities shall not commence later total assets of approximately $58 billion.2 HSBC enthan three months after the effective date of this gages in a broad range of financial and commercial Order, unless such period is extended for good cause services directly and indirectly through its offices by the Board or by the Federal Reserve Bank of San worldwide. Through Kellett and Holdings, HSBC Francisco. owns 51 percent of the shares of MMBI, which is the By order of the Board of Governors, effective 13th largest commercial banking organization in the August 24, 1983. United States and the seventh largest in New York Voting for this action: Chairman Volcker and Governors Martin, Wallich, Partee, Teeters, Rice, and Gramley. 1. E.g., BankAmerica Corporation, 68 FEDERAL RESERVE BULLE- WILLIAM W. WILES, TIN 647 (1982). [SEAL] Secretary of the Board 2. Banking data are as of December 31, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

732 Federal Reserve Bulletin • September 1983 with total assets of approximately $20 billion.3 MMBI, nor any affiliate shall participate in managing, developthrough its subsidiary bank, offers a full range of ing or syndicating property for which Company arbanking and trust services from nearly 300 offices in ranges equity financing, nor promote or sponsor the the State of New York. MMBI engages through Com- syndication of such property. Neither Company nor pany in mortgage banking and investment advisory any affiliate will provide financing to the investors in activities for which it has received Board approval connection with an equity financing arrangement. The under section 4(c)(8) of the Act and sections fee Company receives for arranging equity financing 225.4(a)(1), (3) and (5) of Regulation Y. for a project shall not be based on profits derived, or to Applicants have applied to engage de novo through be derived, from the property and should not be larger Company in arranging equity financing on behalf of than the fee that would be charged by an unaffiliated institutional investors for commercial and industrial intermediary. The Board finds that Applicants' proincome-producing realty. Equity financing, as pro- posed equity financing activity will not constitute real posed by Applicants, involves arranging for the financ- estate brokerage, real estate development or real esing of commercial or industrial income-producing real tate syndication, provided the above-mentioned condiestate through the transfer of the title, control and risk tions and limitations are observed by Applicants and of the project from the owner/developer to one or Company. more investors. Company would represent the owner/ The Board has previously found that the arrangedeveloper and would be paid a fee by the owner/ ment of equity financing by bank holding companies developer for this service. The service would be would enhance competition, provide greater conveoffered only as an alternative to traditional financing nience to consumers, increase efficiencies, and lower arrangements, and Company would not solicit for costs. These conclusions appear to be applicable to properties to be sold. While Company would advertise Applicant's proposal as well. There is no evidence in its services as an arranger of equity financing general- the record to indicate that Applicants' performance of ly, it would not advertise specific properties for which equity financing would result in any undue concentrait is seeking financing, list or advertise properties for tion of resources, decreased or unfair competition, sale, or hold itself out or advertise as a real estate unsound banking practices, or other adverse effects. broker or syndicator. This activity would be provided Based upon these and other considerations reflected in only with respect to commercial or industrial income- the record, the Board has determined that the balance producing property and only when the financing ar- of public interest factors that the Board is required to ranged exceeds $1 million. Only institutional or consider under section 4(c)(8) of the Act is favorable. wealthy, professional individual investors would be This determination is conditioned upon Applicants' offered the service. strictly limiting their equity financing activities to The Board has determined that, subject to certain those described in information furnished in connection conditions to prevent a bank holding company or its with this application and as provided in this Order. subsidiary from engaging in real estate brokerage, Based on the foregoing, the Board has determined development and syndication, equity financing is that the application should be approved, and the closely related to banking.4 Applicants have commit- application is hereby approved.6 This determination is ted to engage in the equity financing activity subject to subject to the limitations set forth in this Order, the the same conditions as those previously relied on by conditions set forth in section 225.4(c) of Regulation the Board in finding that the activity is closely related Y, and the Board's authority to require such modificato banking. tion or termination of the activities of a holding Specifically, Applicants have committed that Com- company or any of its subsidiaries as the Board finds pany's function will be limited to acting as an interme- necessary to assure compliance with the provisions diary between developers and investors to arrange and purposes of the Act, and the Board's regulations financing. Neither Applicants nor any affiliate5 may and orders issued thereunder, or to prevent evasion acquire an interest in any real estate project for which thereof. Company arranges equity financing nor have any role The proposed activities shall be commenced not in the development of the project. Neither Company later than three months after the effective date of this Order, unless such period is extended for good cause 3. Banking data are as of March 31, 1983. 4. BankAmerica Corporation, 68 FEDERAL RESERVE BULLETIN at 649. 6. The Board hereby delegates to the Federal Reserve Bank of New 5. The word "affiliate" as used in this Order is to have the meaning York authority to approve future applications by Applicants to expand it has in Section 23A of the Federal Reserve Act, as amended, which their equity financing activities de novo, subject to the terms of the includes in its definition, a sponsored real estate investment trust. Board's previous orders approving such activities. 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Legal Developments 733 by the Board or by the Federal Reserve Bank of New Morgan Guaranty holds total deposits of $39.8 billion,2 York acting pursuant to delegated authority. and is the fourth largest commercial bank in New York By order of the Board of Governors, effective state. Applicant, through certain of its subsidiaries, August 15, 1983. engages in various permissible nonbanking activities. In order to approve an application submitted pursu- Voting for this action: Governors Wallich, Partee, Teeters, ant to section 4(c)(8) of the Act, the Board is first Rice, and Gramley. Absent and not voting: Chairman required to determine that the proposed activity is Volcker and Governor Martin. closely related to banking or managing or controlling banks. Upon consideration of all the facts of record JAMES MCAFEE, and for the reasons explained below, the Board has [SEAL] Associate Secretary of the Board determined that Morgan Futures' proposed activities as an FCM, with respect to the contracts involved in this application, would be closely related to banking. J. P. Morgan & Co. Incorporated, On several prior occasions, the Board has deter- New York, New York mined that FCM activities with respect to futures contracts regarding bullion and U.S. Government se- Order Approving Application to Engage in Certain curities were closely related to banking.3 An option on Futures Commission Merchant Activities a futures contract is functionally and operationally similar to a futures contract for the same commodity. J. P. Morgan & Co., Incorporated, New York, New The purchaser of such an option has the right, but not York, a bank holding company within the meaning of the obligation, to assume the futures contract position the Bank Holding Company Act of 1956, as amended of the grantor of the option. Thus, an option on a (12 U.S.C. § 1841 et seq.) (the "Act"), has applied for futures contract provides an alternative means of the Board's approval, under section 4(c)(8) of the Act hedging against price fluctuations and allows a pur- (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the chaser to limit the potential risk of loss to the premium Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to paid to acquire the option. Similarly, the grantor of an engage through its subsidiary, Morgan Futures Corpo- option may offset at least a portion of any price ration, New York, New York ("Morgan Futures"), in movement adverse to a given futures position with the acting as a futures commission merchant (an "FCM") premium collected from sale of the option, and thereby for nonaffiliated persons, in the execution and clear- hedge against adverse price fluctuations. ance of options in certain futures contracts on major Morgan Guaranty trades in the cash, forward, and commodity exchanges. Such options would cover fu- futures markets for its own accounts and in the cash tures contracts traded on the Commodity Exchange, and forward markets for customers, both with regard Inc., New York, New York, in bullion and futures to bullion and U.S. Government securities. Morgan contracts traded on the Board of Trade of the City of Futures acts as an FCM for futures contracts for the Chicago, Chicago, Illinois, in U.S. Government secu- accounts of Morgan Guaranty and nonaffiliated cusrities. tomers, and has executed and cleared options on Notice of the application, affording interested per- bullion and U.S. Government securities futures consons an opportunity to submit comments on the rela- tracts for Morgan Guaranty since such options were tion of the proposed activity to banking and on the first traded in October of 1982. It therefore appears balance of public interest factors regarding the applica- that Applicant has the expertise to provide the protion, has been duly published (48 Federal Register posed options services. In addition, many large banks 15326 (April 8, 1983)). The time for filing comments are active participants in the cash and futures markets has expired, and the Board has considered the applica- for bullion and government securities, and options tion and all comments received in light of the public transactions with regard to these markets is a specialinterest factors set forth in section 4(c)(8) of the Act.1 ized service that these banks may find helpful. Ac- Applicant is a bank holding company by virtue of its cordingly, the Board finds that the proposed activities control of Morgan Guaranty Trust Company of New are closely related to banking. York, New York, New York ("Morgan Guaranty"). In order to approve this application, the Board also is required to determine that the performance of the proposed activities by Morgan Futures, "can reason- 1. The Board has reviewed the comment by the Dealer Bank Association that the proposed activity be added to the list of activities that are permissible for bank holding companies under Regulation Y, 2. Banking data are as of December 31, 1982. and will consider this proposal in conjunction with comments received 3. E.g., J.P. Morgan & Co. Inc., 68 FEDERAL RESERVE BULLETIN regarding the proposed revisions to Regulation Y. 514 (1982); Citicorp, 68 FEDERAL RESERVE BULLETIN 776 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

734 Federal Reserve Bulletin • September 1983 ably be expected to produce benefits to the public, evaluating the likelihood that significant adverse efsuch as greater convenience, increased competition, fects regarding conflicts of interests, unsound banking or gains in efficiency, that outweigh possible adverse practices, decreased or unfair competition, or undue effects, such as undue concentration of resources, concentration of resources would develop in this case. decreased or unfair competition, conflicts of interests, In addition, the Board has placed particular reliance or unsound banking practices." (12 U.S.C. on the following aspects of Applicant's proposal, each § 1843(c)(8)). of which the Board has previously relied on with Consummation of the proposal would provide added regard to Applicant's original application to engage in convenience to those clients of Morgan Guaranty who FCM activities: trade in the cash, forward, futures, and options mar- 1. Morgan Futures will not trade for its own ackets for the commodities involved in this application. count. The Board expects that the de novo entry of Morgan 2. The instruments and precious metals upon which Futures into the market for options services would the proposed futures contracts are based are essenincrease the level of competition among FCMs already tially financial in character and are of a type that a operating in this area, and would allow Morgan Fu- bank may execute for its own account. tures to compete on a more equal basis with its 3. Morgan Futures has capitalization that is in nonbank competitors. Consummation of the proposal substantial excess of that required by CFTC regulais also likely to provide Applicant with some gains in tions, and will maintain fully adequate capitalizaefficiency, through the reduction of average fixed tion. costs and the increase of economies of scale. Accord- 4. Morgan Futures and Morgan Guaranty have ingly, the Board has concluded that the performance entered into a formal service agreement that speciof the proposed activities by Morgan Futures can fies the services that Morgan Guaranty will supply reasonably be expected to produce benefits to the to Morgan Futures on an explicit fee basis. These public. services include the assessment of customer credit The Board has considered several issues with re- risk and continuous monitoring of customer posispect to possible adverse effects. The Board recog- tions and the status of customer margin accounts. nizes that, like the activity of executing futures con- 5. Through its proposed service agreement with tracts, the execution of options with regard to futures Morgan Guaranty, Morgan Futures will be able to contracts involves various types of financial risks and assess customer credit risks, and will take such potential conflicts of interests, and is susceptible to assessments into consideration in establishing apanticompetitive and manipulative practices. In ap- propriate position limits for each customer, both proving proposals to act as an FCM with regard to with respect, to each type of option and with respect futures, the Board has relied in the past on action to the customer's aggregate position for all options taken by Congress to address these types of possible and contracts. adverse effects through the passage of the Commodity 6. With respect to each futures exchange involved in Exchange Act4 and the creation of the Commodity this application that requires a parent of a clearing Futures Trading Commission ("CFTC"). The Board member to also become a clearing member, Applialso has relied on the regulations adopted by the CFTC cant has obtained a waiver of the requirement. to effectuate the provisions of the Commodity Ex- 7. Morgan Futures has committed that it will, in change Act.5 The CFTC's pilot program regarding addition to time-stamping orders of all customers to options on futures imposes many of the same safe- the nearest minute, execute all orders, to the extent guards that apply to trading in futures, and adds consistent with customers' specifications, in strictly additional limitations such as those requiring audits, chronological sequence, and with reasonable review of promotional materials, and retention of promptness with due regard to market conditions. customer complaints.6 The Board has considered the 8. Applicant and its subsidiaries have demonstrated impact of this statutory and regulatory framework in expertise and established capability in the cash, forward, and futures markets for the contracts involved. 9. Applicant will require Morgan Futures to advise 4. 7 U.S.C. §§ 1-24. 5. For example, CFTC regulations require FCMs to keep detailed each of its customers in writing that doing business records on many aspects of FCM activities, such as segregation of with Morgan Futures will not in any way affect any funds and investments made on behalf of customers (17 C.F.R. §§ 1.20, 1.25); prescribe protective procedures for such activities as provision of credit to that customer by Morgan buying and selling contracts of two customers on opposite sides of the Guaranty or any other subsidiary of Applicant. same transaction; (17 C.F.R. § 1.39); and impose minimum financial 10. Applicant is adequately capitalized to engage in and related reporting requirements (17 C.F.R. §§ 1.10-. 18). 6. 17 C.F.R. § 33.4. additional nonbanking activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 735 11. Morgan Futures will not extend credit to cus- acquire 100 percent of the voting shares of LTCB tomers for the purpose of meeting initial or mainte- Trust Company, New York, New York ("Trust Comnance margin required of customers, subject to the pany"), a de novo limited-purpose trust company that limited exception of posting margin on behalf of will not be insured by the Federal Deposit Insurance customers in advance of prompt reimbursement. Corporation. On July 25, 1983, Applicant received approval from Based upon the foregoing and all the facts of record, the New York State Banking Department to establish the Board has determined that in the circumstances of Trust Company as a limited purpose trust company this case, the provision by Morgan Futures of the under New York banking law. This application to the proposed FCM services to nonaffiliated persons would Board is required because section 8 of the Internationnot result in decreased or unfair competition, conflicts al Banking Act of 1978 ("IBA") (12 U.S.C. § 3106(a)) of interests, unsound banking practices, or undue imposes the nonbanking restrictions of section 4 of the concentration of resources in either commercial bank- Bank Holding Company Act and section 225.4(a)(4), ing or the market for FCM services regarding options. (5) and (8) of Regulation Y on any foreign bank such as Moreover, for the reasons discussed above and Applicant that maintains a branch or agency in the based on the entire record, the Board has determined United States. that the public benefits associated with consummation The activities of Trust Company will include fiduciaof this proposal can reasonably be expected to out- ry, agency or custodial services; investment or finanweigh possible adverse effects, and that the balance of cial advisory services including portfolio advice, stathe public interest factors, which the Board is required tistical forecasting and industry studies; and data to consider under section 4(c)(8) of the Act, is favor- processing services such as reporting and recordable. Accordingly, the application is hereby approved. keeping solely as an incident to the above mentioned This determination is subject to the conditions set activities. These activities have been determined by forth in section 225.4(c) of Regulation Y and the the Board to be closely related to banking and, there- Board's authority to require such modification or fore, permissible as a proper incident thereto. termination of the activities of a holding company or (12 C.F.R. § 225.4(a)(4), (5) and (8)). any of its subsidiaries as the Board finds necessary to Notice of the application, affording opportunity for assure compliance with the provisions and purposes of interested persons to submit comments on the public the Act and the Board's regulations and orders issued interest factors, has been duly published. The time for thereunder, or to prevent evasion thereof. filing comments has expired, and the Board has con- The proposed activities shall not commence later sidered the application and all comments received in than three months after the effective date of this light of the public interest factors set forth in section Order, unless such period is extended for good cause 4(c)(8) of the Bank Holding Company Act. by the Board or by the Federal Reserve Bank of New Applicant, with total assets of approximately $50.7 York. billion, ranks as the second largest of three long-term By order of the Board of Governors, effective credit banks1 and the seventh largest private bank in August 1, 1983. Japan. Applicant is the 35th largest bank worldwide.2 Applicant operates 19 branches in Japan, and operates foreign branches in London and Singapore. In the Voting for this action: Vice Chairman Martin and Gover- United States, Applicant operates a branch in New nors Wallich, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Partee. York, its home state,3 and an agency in Los Angeles with total combined assets of $3.4 billion. Applicant JAMES MCAFEE, has merchant bank subsidiaries in Hong Kong and [SEAL] Associate Secretary of the Board Switzerland and a finance subsidiary in Netherlands Antilles. In addition, Applicant owns 5.44 percent of the The Long-Term Credit Bank of Japan, Limited, voting shares of Sanyo Securities Co., Ltd., Tokyo, Tokyo,Japan Order Approving Acquisition of a Trust Company 1. Applicant's principal business activity is the extension of longterm credit in the form of secured loans, discounts and guarantees. In addition, pursuant to a major revision in the Japanese Banking Law The Long-Term Credit Bank of Japan, Limited, To- enacted in 1982, Applicant is permitted to underwrite and sell central kyo, Japan has applied for the Board's approval under and local government bonds and government-guaranteed bonds. 2. All financial data are on a parent only basis as of March 31, 1982. section 4(c)(8) of the Act and section 225.4(b)(2) of the 3. Applicant selected New York as its home state pursuant to Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to Section 5 of the IBA (12 U.S.C. § 3103). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

736 Federal Reserve Bulletin • September 1983 Japan, which engages in business in the United States This determination is subject to the conditions set through a wholly-owned subsidiary, Sanyo Securities forth in section 225.4(c) of Regulation Y and to the American, Inc. Applicant is entitled to retain its Sanyo Board's authority to require such modification or stock because Applicant acquired the stock prior to termination of the activities of a holding company or 1978 and thus is grandfathered pursuant to section 8(c) any of its subsidiaries as the Board finds necessary to of the IBA (12 U.S.C. § 3106(c)). assure compliance with the provisions and purposes of To approve this application the Board must find that the Bank Holding Company Act and the Board's Applicant's activities through Trust Company can regulations and orders issued thereunder or to prevent reasonably be expected to produce benefits to the the evasion thereof. public, such as greater convenience, increased compe- The transaction shall not be made later than three tition, or gains in efficiency, that outweigh possible months after the effective date of this Order, unless adverse effects such as undue concentration of re- such period is extended for good cause by the Board or sources, decreased or unfair competition, conflicts of by the Federal Reserve Bank of New York. interests, or unsound banking practices. By order of the Board of Governors, effective Trust Company will be established as a de novo August 22, 1983. subsidiary of Applicant, therefore, consummation will not result in decreased or unfair competition. Accord- Voting for this action: Chairman Volcker and Governors ingly, competitive factors are consistent with approv- Martin, Wallich, Partee, Teeters, Rice, and Gramley. al. Financial and managerial factors are also consistent with approval. Although Applicant's capitalization is JAMES MCAFEE, below the standards for comparably sized banking [SEAL] Associate Secretary of the Board organizations in the United States, there appear to be substantial differences between Applicant's business and that conducted by large U.S. banks, particularly Rainier Bancorporation, with respect to its asset and liability status, that Seattle, Washington mitigate the Board's concerns in this regard.4 There is no evidence in the record suggesting that Order Approving Application to Engage in Equity conflicts of interest, or unsound banking practices Financing Activities would result from the establishment of Trust Company. Trust Company will provide fiduciary rather than Rainier Bancorporation, Seattle, Washington, a bank banking services for corporate customers in the Unit- holding company within the meaning of the Bank ed States such as U.S. subsidiaries of Japanese com- Holding Company Act ("Act"), has applied for the panies, Japanese and other foreign corporations, and Board's approval under section 4(c)(8) of the Act foreign governments, through an office in New York (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the City. Applicant has stated that Trust Company will Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to avoid making loans or accepting any deposits except engage de novo, through its wholly-owned subsidiary, on rare occasions when Trust Company's liabilities Rainier Mortgage Company, Seattle, Washington, may include amounts due to customers, but subject to ("Company"), in the activity of arranging equity fithe restrictions of section 225.4(a)(4) of Regulation Y. nancing. While this activity has not been specified by Based upon the foregoing and other considerations the Board in Regulation Y as permissible for bank reflected in the record, the Board has determined holding companies, the Board has determined by order under section 4(c)(8) that establishment of Trust Com- that arranging equity financing subject to certain conpany can reasonably be expected to produce benefits ditions is closely related to banking.1 to the public. Consummation of this proposal would Notice of the application, affording interested pernot result in any undue concentration of resources, sons an opportunity to submit comments on the prodecreased or unfair competition, conflicts of interests, posal has been published (48 Federal Register 27444 unsound banking practices, or other adverse effects on (1983)). The time for filing comments has expired and the public interest. Accordingly, the application is the Board has considered the application and all hereby approved. comments received in light of the public interest factors set forth in section 4(c)(8) of the Act. 4. Applicant's investment in Trust Company represents only about 0.27 percent of Applicant's equity capital and reserves and less than 1. E.g., BankAmerica Corporation, 68 FEDERAL RESERVE BULLE- 0.01 percent of its total assets as of September 30, 1982. TIN 647 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 737 Applicant is the second largest commercial banking nancing. Neither Applicant nor any affiliate4 may organization in Washington with aggregate deposits of acquire an interest in any real estate project for which $3.8 billion, representing 19.8 percent of total commer- Company arranges equity financing nor have any role cial bank deposits in the state.2 Applicant also oper- in the development of the project. Neither Company ates Peoples Bank and Trust Company, Anchorage, nor any affiliate shall participate in managing, develop- Alaska ("Peoples Bank"). Peoples Bank is the elev- ing or syndicating property for which Company arenth largest bank in Alaska, with aggregate deposits of ranges equity financing, nor promote or sponsor the $47.3 million, representing 1.8 percent of commercial syndication of such property. Neither Company nor bank deposits in the state. Applicant engages through any affiliate will provide financing to the investors in Company in mortgage banking, commercial lending connection with an equity financing arrangement. The and insurance activities for which it has received fee Company receives for arranging equity financing Board approval under section 4(c)(8) of the Act and for a project shall not be based on profits derived, or to sections 225.4(a)(1), (3) and (9) of Regulation Y. be derived, from the property and should not be larger Applicant has applied to engage de novo through than the fee that would be charged by an unaffiliated Company in arranging equity financing on behalf of intermediary. The Board finds that Applicant's proinstitutional investors for commercial and industrial posed equity financing activity will not constitute real income-producing realty. Equity financing, as pro- estate brokerage, real estate development or real esposed by Applicant, involves arranging for the financ- tate syndication, provided the above-mentioned condiing of commercial or industrial income-producing real tions and limitations are observed by Applicant and estate through the transfer of the title, control, and risk Company. of the project from the owner/developer to one or The Board previously has found that the arrangemore investors. Company would represent the owner/ ment of equity financing by bank holding companies developer and would be paid a fee by the owner/ would enhance competition, provide greater convedeveloper for this service. The service would be nience to investors, increase efficiencies, and lower offered only as an alternative to traditional financing costs. These conclusions appear to be applicable to arrangements, and Company would not solicit for Applicant's proposal as well. There is no evidence in properties to be sold. While Company would advertise the record to indicate that Applicant's performance of its services as an arranger of equity financing general- equity financing would result in any undue concentraly, it would not advertise specific properties for which tion of resources, decreased or unfair competition, it is seeking financing, list or advertise properties for unsound banking practices, conflicts of interests or sale, or hold itself out or advertise as a real estate other adverse effects. Based upon these and other broker or syndicator. This activity would be provided considerations reflected in the record, the Board has only with respect to commercial or industrial income- determined that the balance of public interest factors producing property and only when the financing ar- that the Board is required to consider under section ranged exceeds $1 million. Only institutional or 4(c)(8) of the Act is favorable. This determination is wealthy, professional individual investors would be conditioned upon Applicant's strictly limiting its equioffered the service. ty financing activities as provided in this Order. The Board has determined that, subject to certain Based on the foregoing, the Board has determined conditions to prevent a bank holding company or its that the application should be approved, and the subsidiary from engaging in real estate brokerage, application is hereby approved.5 This determination is development and syndication, equity financing is subject to the limitations set forth in this Order, the closely related to banking.3 Applicant has committed conditions set forth in section 225.4(c) of Regulation to engage in the equity financing activity subject to the Y, and the Board's authority to require such modificasame conditions as those previously relied on by the tion or termination of the activities of a holding Board in finding that the activity is closely related to company or any of its subsidiaries as the Board finds banking. necessary to assure compliance with the provisions Specifically, Applicant has committed that Compa- and purposes of the Act, and the Board's regulations ny's function will be limited to acting as an intermedi- and orders issued thereunder, or to prevent evasion ary between developers and investors to arrange fi- thereof. 4. The word "affiliate" as used in this Order is to have the meaning it has in Section 23A of the Federal Reserve Act, as amended, which includes in its definition a sponsored real estate investment trust. 5. The Board hereby delegates to the Federal Reserve Bank of San 2. Banking data are as of December 31, 1982. Francisco authority to approve future applications by Applicant to 3. BankAmerica Corporation, 68 FEDERAL RESERVE BULLETIN at expand its equity financing activities de novo, subject to the terms of 649 (1982). this Order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

738 Federal Reserve Bulletin • September 1983 The proposed activities shall be commenced not Notice of these applications affording opportunity later than three months after the effective date of this for interested persons to submit comments has been Order, unless such period is extended for good cause given in accordance with sections 3 and 4 of the Act by the Board or by the Federal Reserve Bank of San (48 Federal Register 29057, June 24, 1983). The time Francisco acting pursuant to delegated authority. for filing comments has expired, and the Board has By order of the Board of Governors, effective considered the applications and all comments received August 23, 1983. in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)) and the considerations specified in section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). Voting for this action: Chairman Volcker and Governors Martin, Wallich, Partee, Teeters, Rice, and Gramley. Applicant, the fifth largest banking organization in Missouri, controls 17 subsidiary banks with aggregate JAMES MCAFEE, deposits of $1.8 billion representing 6 percent of [SEAL] Associate Secretary of the Board deposits in commercial banks in the state.2 Metro is the thirteenth largest commercial banking organization in Missouri, controlling three subsidiary banks. Met- Orders Under Section 3 and 4 of Bank Holding ro's banking subsidiaries have aggregate deposits of Company Act $401 million which represent 1.3 percent of total commercial bank deposits in the state. Upon consum- Boatmen's Bancshares, mation of the proposed acquisition, Applicant would St. Louis, Missouri become the fourth largest commercial banking organization in Missouri holding 7.2 percent of total deposits in commercial banks in the state. Order Approving Acquisition of Bank Holding Company and Trust Company With regard to competitive effects, seven of Applicants' subsidiary banks and all three of Metro's banks operate in the St. Louis banking market.3 Sixty-six Boatmen's Bancshares, St. Louis, Missouri, a bank commercial banking organizations operate in the marholding company within the meaning of the BHC Act, ket, and the share of commercial bank deposits held by has applied for the Board's approval under section the four largest banking organizations in the market is 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire at 46.6 percent. The Herfindahl-Hirschman Index least 80.0 percent of the voting common shares and ("HHI") in the St. Louis market is 752. convertible preference stock of Metro Bancholding Corporation, Crestwood, Missouri ("Metro"). As a Applicant is the third largest banking organization in result of the acquisition, Applicant would acquire the market with $1.0 billion of deposits representing a Metro's subsidiary banks, Metro Bank/St. Louis, St. 7.3 percent share of commercial bank deposits in the Louis, Missouri; Metro Bank/Clayton, Clayton, Mis- market. Metro is the ninth largest banking organizasouri; and Metro Bank/Southwest County, Crest- tion in the market with deposits of $401 million, wood, Missouri. representing 2.8 percent of deposits in commercial Applicant has also applied for the Board's approval banks in the market. Upon consummation of this under section 4(c)(8) of the Act (12 U.S.C. proposal, Applicant's share of the market would in- § 1843(c)(8)) and section 225.4(b)(2) of the Board's crease to 10.1 percent, and its rank as the third largest Regulation Y (12 C.F.R. § 225.4(b)(2)) to acquire banking organization in the market would remain Metro's indirect nonbanking subsidiary, Metro Trust unchanged. Upon consummation the four-firm con- Company, Clayton, Missouri ("Metro Trust").1 Trust centration ratio and the HHI in the market would Company engages in a range of fiduciary services increase to 49.4 percent and 795, respectively.4 including employee benefit trusts, personal trusts, Although the proposed acquisition would eliminate estates, agency and custodial services. It offers such some existing competition between Applicant and services primarily to customers (individuals and cor- Metro in the St. Louis banking market, the Board does porations) of Metro's three subsidiary banks. The Board has determined that these activities are closely related to banking under section 225.4(a)(4) of Regulation Y (12 C.F.R. § 225.4(a)(4)). 2. All banking data are as of December 31, 1982, and reflect mergers consummated and bank holding company acquisitions approved through April 30, 1983. 3. The St. Louis banking market is approximated by the St. Louis 1. Metro has another nonbank subsidiary, Databank Corporation, RMA. Crestwood, Missouri. Applicant, however, intends to complete the 4. Under the Department of Justice merger guidelines, a market with dissolution and liquidation of Databank within thirty days of consum- a post-merger HHI below 1000 is considered unconcentrated and the mation of the proposed transaction. Department is unlikely to challenge mergers in such markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 739 not believe that the effect of this transaction on offer to their customers. These expanded services existing competition would be significant. The St. would include automobile and equipment lease financ- Louis banking market is unconcentrated and numer- ing, expanded international banking services, and reous banking alternatives would remain in the market duced rates on credit-related insurance. Further, Apupon consummation. In addition, there are forty-nine plicant plans to provide a new main office for Metro thrift institutions in the St. Louis banking market, Bank/Clayton, Clayton. Thus, the Board concludes which control $7.6 billion in deposits, representing that considerations relating to the convenience and approximately 35 percent of total deposits of commer- needs of the communities to be served lend some cial banks and thrifts in the market.5 In view of the weight toward approval of this application. unconcentrated nature of the market and other facts of Accordingly, based upon the foregoing and other record, including the competitive influence exerted by facts of record, the Board's judgement is that, under thrift institutions, the Board concludes that competi- section 3 of the Act, consummation of the proposed tive considerations are consistent with approval. transaction should be approved. The Board has also examined the effect of Appli- With respect to the application to acquire Metro's cant's proposed acquisition of Metro on probable nonbank subsidiary, Metro Trust, the market value of future competition in the relevant markets in light of the trust assets which Metro Trust controls is $46.0 the Board's proposed policy statement on market million representing 0.4 percent of the total trust assets extension mergers.6 Applicant operates in seven bank- held by banks and trust companies in the St. Louis ing markets in which Metro is not represented. Be- banking market. Applicant has three banking subsidcause of Metro's size and its history of limited geo- iaries within the St. Louis banking market that offer graphic expansion, there is no evidence that Metro fiduciary services, and the market value of the trust should be considered a likely future entrant into any of assets of these subsidiaries is $1.9 billion, representing these seven markets. Accordingly, the Board con- approximated 10 percent of the market.8 In view of the cludes that consummation of the proposal would not small market share of Metro Trust and since numerous have significant adverse effects on probable future other organizations offer fiduciary services in the St. competition in any of the markets in which Applicant Louis banking market, the Board concludes that conoperates.7 summation of this proposal would have no measurable Based on the foregoing and other facts of record, the effect on competition in this line of business. Board concludes that consummation of the proposed There is no evidence in the record to indicate that transaction would not have any significant adverse approval of the proposed acquisition would result in effects on existing or potential competition and would undue concentration of resources, decreased or unfair not significantly increase the concentration of banking competition, conflicts of interest or unsound banking resources in any relevant area. Thus, competitive practices. Applicant plans to expand the marketing considerations are consistent with approval of the efforts, range, and quality of Metro Trusts' services, application. including the institution of corporate trust services. The financial and managerial resources of Appli- Accordingly, the Board has determined that the balcant, Metro, and their subsidiaries are considered ance of public interest factors it must consider under generally satisfactory and their future prospects ap- section 4(c)(8) of the Act are consistent with approval pear favorable. Thus, considerations relating to bank- of the application, and that the application to acquire ing factors are consistent with approval of the ap- Metro Trust should be approved. plication. Based on the foregoing and other facts of record, the With regard to convenience and needs factors, Ap- applications are approved for the reasons set forth plicant's acquisition of Metro would enable Metro's above. The acquisition of Metro's banking subsidiaries subsidiary banks to expand the services they currently pursuant to section 3 of the Act shall not be made before the thirtieth calendar day following the effective date of this Order, and neither the acquisition of Metro's banking subsidiaries nor the acquisition of its 5. Thrift data are as of September 30, 1981. 6. "Proposed Policy Statement of the Board of Governors of the nonbanking subsidiaries shall be made later than three Federal Reserve System for Assessing Competitive Factors Under the months after the effective date of this Order, unless Bank Merger Act and the Bank Holding Company Act", 47 Federal such period is extended for good cause by the Board or Register 9017 (March 3, 1982). Although the proposed policy statement has not been approved by the Board, the Board has used the by the Federal Reserve Bank of St. Louis, pursuant to proposed policy statement in a number of cases to determine whether an intensive analysis is warranted regarding the effects of a proposal on probable future competition. 7. Because Metro and Applicant both compete in the St. Louis 8. Excluded from this total is $2.2 billion of assets, representing two banking market, the proposed transaction raises no issues with regard public retirement pension trusts originating outside the St. Louis to potential competition in that market. banking market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

740 Federal Reserve Bulletin • September 1983 delegated authority. The approval of Applicant's pro- orders issued thereunder, or to prevent evasion posal to acquire Metro's nonbanking subsidiaries and thereof. to engage in fiduciary activities is subject to the By order of the Board of Governors effective conditions set forth in section 225.4(c) of Regulation Y August 22, 1983. and to the Board's authority to require such modification or termination of the activities of a holding Voting for this action: Chairman Volcker and Governors company or any of its subsidiaries as the Board finds Martin, Wallich, Partee, Teeters, Rice, and Gramley. necessary to assure compliance with the provisions and purposes of the Act and Board's regulations and JAMES MCAFEE, [SEAL] Associate Secretary of the Board ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During August 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) Citizens Financial Corporation, Citizens State Bank, August 1, 1983 Fort Atkinson, Wisconsin Fort Atkinson, Wisconsin First City Bancorporation of Texas, Inc., First City Bank—Forum, N.A., August 29, 1983 Houston, Texas San Antonio, Texas Sun Banks of Florida, Inc., Florida State Bank of Tallahassee, August 9, 1983 Orlando, Florida Tallahassee, Florida The Hillsboro Bank, August 26, 1983 Plant City, Florida 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 Ames National Corporation, State Bank & Trust Co., Chicago July 28, 1983 Ames, Iowa Nevada, Iowa Banc One Corporation, First National City Bank of Cleveland August 4, 1983 Columbus, Ohio Alliance, Alliance, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 741 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Bennett Bancorporation, Bennett National Bank, Kansas City July 22, 1983 Bennett, Colorado Bennett, Colorado Clinton Bancshares, Inc., Clinton Bank & Trust Company, Atlanta August 8, 1983 Clinton, Louisiana Clinton, Louisiana Columbine Bankshares, Ltd. Columbine Valley Bank and Kansas City July 29, 1983 Denver, Colorado Trust Company, Littleton, Colorado Columbus Corp., Stanley Corp., Kansas City July 29, 1983 Columbus, Kansas Stanley, Kansas Stanley Bancshares, Inc., Stanley, Kansas State Bank of Stanley, Stanley, Kansas East Coast Bank Corporation, Bank at Ormond-By-The-Sea, Atlanta July 28, 1983 Ormond Beach, Florida Ormond Beach, Florida Farmers & Merchants Banc- Farmers & Merchants Bank of St. Louis July 29, 1983 shares, Inc., Wright City, Wright City, Missouri Wright City, Missouri First American Bancshares, First American Bank and Dallas August 4, 1983 Inc., Trust of Manvel, Bay town, Texas Manvel, Texas First Bank Holding Company, Sylvester Banking Company, Atlanta August 1, 1983 Sylvester, Georgia Sylvester, Georgia First National Corporation of The First National Bank of Atlanta July 26, 1983 Alexander City, Inc., Alexander City, Alexander City, Alabama Alexander City, Alabama First Sleepy Eye Bancorpora- State Bank of Butterfield, Minneapolis August 5, 1983 tion, Inc., Butterfield, Minnesota Sleepy Eye, Minnesota GL & ML Limited, Aplington Insurance Inc., Chicago August 3, 1983 Aplington, Iowa Aplington, Iowa State Savings Bank, Aplington, Iowa Glasgow Bancshares Corpora- New Farmers National Bank of St. Louis July 28, 1983 tion, Glasgow, Glasgow, Kentucky Glasgow, Kentucky Hawkeye Bancorporation, Tipton Co., Inc., Chicago August 8, 1983 Des Moines, Iowa Tipton, Iowa Tipton State Bank, Tipton, Iowa Haysville Bancshares, Inc., First National Bank, Kansas City July 27, 1983 Haysville, Kansas Haysville, Kansas Home State Bancorp, Inc., Home State Bank of Crystal Chicago August 5, 1983 Crystal Lake, Illinois Lake, Crystal Lake, Illinois JDOB Inc., Security State Bank of Pillager, Minneapolis August 8, 1983 Naples, Florida Pillager, Minnesota McGregor Banco, Inc., State Bank of McGregor, Minneapolis July 29, 1983 McGregor, Minnesota McGregor, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

742 Federal Reserve Bulletin • September 1983 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date N.B.C. Bancshares in National Bank of Commerce in Kansas City July 22, 1983 Pawhuska, Inc., Pawhuska, Pawhuska, Oklahoma Pawhuska, Oklahoma Reelfoot Bancshares, Inc., Reelfoot Bank, St. Louis August 1, 1983 Union City, Tennessee Hornbeak, Tennessee Republic Bancorp of S.C., Inc. Republic National Bank, Richmond August 5, 1983 Columbia, South Carolina Columbia, South Carolina Security Chicago Corp., First Security Bank of Chicago, Chicago August 19, 1983 Chicago, Illinois Chicago, Illinois Southwest First Community American Corporation, Dallas August 3, 1983 Inc., Sinton, Texas Beeville, Texas Commercial State Bank, Sinton, Texas Stanley Corp., Stanley Bancshares, Inc., Kansas City July 29, 1983 Stanley, Kansas Stanley, Kansas State Bank of Stanley Stanley, Kansas Tonica Bancorp, Inc., The Farmers State Bank of Chicago August 3, 1983 Tonica, Illinois Lostant, Lostant, Illinois Washington Independent Banc- Harbor Security Bank, San Francisco July 29, 1983 shares, Inc., McCleary, Washington Olympia, Washington Waxahachie Bancshares, Inc., First National Bank of Dallas August 9, 1983 Waxahachie, Texas Waxahachie, Waxahachie, Texas Section 4 Nonbanking Reserve Effective Applicant company Bank date Security Pacific Corporation, General Finance Service San Francisco August 2, 1983 Los Angeles, California Corporation, Huntingdon, Pennsylvania The Budget Plan of Virginia, Huntingdon, Pennsylvania ORDERS APPROVED UNDER BANK MERGER ACT By the Board of Governors Applicant Bank ^ a t e^ United Virginia Bank, State Bank of Keysville, August 11, 1983 Richmond, Virginia Keysville, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 743 By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Security Bank of Monroe, Security Bank-Monroe County, Chicago August 8, 1983 Monroe, Michigan Newport, Michigan 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. Independent Insurance Agents of America, Inc. and Edwin F. Gordon v. Board of Governors, et al., filed Independent Insurance Agents of Missouri, Inc. v. October 1981, U.S.C.A. for the Eleventh Circuit Board of Governors, filed June 1983, U.S.C A. for (two consolidated cases). the Eighth Circuit (two cases). Allen Wolfson v. Board of Governors, filed September The Committee for Monetary Reform, et al., v. Board 1981, U.S.D.C. for the Middle District of Florida. of Governors, filed June 1983, U.S.D.C. for the Bank Stationers Association, Inc., et al. v. Board of District of Columbia. Governors, filed July 1981, U.S.D.C. for the North- Dakota Bankshares, Inc. v. Board of Governors, filed ern District of Georgia. May 1983m U.S.C.A. for the Eighth Circuit. Public Interest Bounty Hunters v. Board of Gover- Jet Courier Services, Inc., et al. v. Federal Reserve nors, et al., filed June 1981, U.S.D.C. for the Bank of Atlanta, et al. filed February 1983, Northern District of Georgia. U.S.C.A. for the Sixth Circuit. First Bank & Trust Company v. Board of Governors, Securities Industry Association v. Board of Gover- filed February 1981, U.S.D.C. for the Eastern Disnors, et al., filed February 1983, U.S.C.A. for the trict of Kentucky. Second Circuit. 9 to 5 Organization for Women Office Workers v. Flagship Banks, Inc. v. Board of Governors, filed Board of Governors, filed December 1980, January 1983, U.S.D.C. for the District of Colum- U.S.D.C. for the District of Massachusetts. bia. Securities Industry Association v. Board of Gover- Flagship Banks, Inc. v. Board of Governors, filed nors, et al., filed October 1980, U.S.C.A. for the October 1982, U.S.D.C. for the District of Colum- District of Columbia. bia. A. G. Becker, Inc. v. Board of Governors, et al., filed Association of Data Processing Service Organiza- October 1980, U.S.C.A. for the District of Columtions, Inc., et al. v. Board of Governors, filed bia. August 1982, U.S.C.A. for the District of Columbia. A. G. Becker, Inc. v. Board of Governors, et al., filed Richter v. Board of Governors, et al. filed May 1982, August 1980, U.S.C.A. for the District of Columbia. U.S.D.C. for the Northern District of Illinois. Berkovitz, et al. v. Government of Iran, et al., filed Wyoming Bancorporation v. Board of Governors, filed June 1980, U.S.D.C. for the Northern District of May 1982, U.S.C.A. for the Tenth Circuit. California. First Bancorporation v. Board of Governors, filed April 1982, U.S.C.A. for the Tenth Circuit. 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 ALL 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 A25 Gross demand deposits of individuals, partnerships, and corporations POLICY INSTRUMENTS FINANCIAL MARKETS A7 Federal Reserve Bank interest rates A8 Reserve requirements of depository institutions A26 Commercial paper and bankers dollar A9 Maximum interest rates payable on time and acceptances outstanding savings deposits at federally insured institutions A26 Prime rate charged by banks on short-term All Federal Reserve open market transactions business loans All Terms of lending at commercial banks A28 Interest rates in money and capital markets FEDERAL RESERVE BANKS A29 Stock market—Selected statistics A30 Selected financial institutions—Selected assets A12 Condition and Federal Reserve note statements and liabilities A13 Maturity distribution of loan and security holdings FEDERAL FINANCE MONETARY AND CREDIT AGGREGATES A31 Federal fiscal and financing operations A32 U.S. Budget receipts and outlays Al4 Aggregate reserves of depository institutions A33 Federal debt subject to statutory limitation and monetary base A33 Gross public debt of U.S. Treasury—Types and A15 Money stock measures and components ownership A16 Bank debits and deposit turnover A34 U.S. government securities dealers— A17 Loans and securities of all commercial banks Transactions, positions, and financing A35 Federal and federally sponsored credit agencies—Debt outstanding COMMERCIAL BANKING INSTITUTIONS 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

2 Federal Reserve Bulletin • September 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 1983 Q3 Q4 Ql Q2 Mar. Apr. May June July Reserves of depository institutions 1 Total 5.1 11.0 1.1 9.2 19.7 8.8 -1.9 14.0 6.0 2 Required 4.9 10.1 .8 9.4 20.0 7.6 -1.1 13.2 5.2 3 Nonborrowed 11.5 12.7 .6 3.7 13.6 2.5 -.2 -6.0 11.7 4 Monetary base2 6.8 8.0 8.6 10.4 15.0 7.3 10.0 9.9 6.1 Concepts of money and liquid assets3 5 Ml 6.1 13.1 14.1 12.2 15.9 -2.7 26.3 10.2 8.9 6 M2 10.9 9.3 20.3 10.1 11.2 2.8 12.4' 10.4' 6.3 7 M3 12.5 9.5 10.2 8.1 8.1 3.4 11.0 11.0 5.0 8 L 12.1 8.6 n.a. n.a. 11.3 7.3' n.a. n.a. n.a. Time and savings deposits Commercial banks 9 Total 18.2 3.2 12.4 4.5 2.9 6.8 -2.9 11.1 6.9 10 Savings4 -1.8 13.4 -43.4 -14.8 -19.9 -12.6 0 2.6' -10.2 U Small-denomination time5 18.7 -.5 -48.5 24. 1' -38.7 -19.5 -13.3' 3.0 24.4 12 Large-denomination time6 26.8 -6.8 -58.5 -20.8 -27.7 .8 -37.3 2.1 -7.1 13 Thrift institutions7 6.5 6.2 12.1 16.0 16.9' 16.6 9.9' 13.3' 14.3 14 Total loans and securities at commercial banks8 6.0 5.5 9.8 9.8' 11.2 8.7 10.7 9.9' 9.7 Interest rates (levels, percent per annum) 1982 1983 1983 Q3 Q4 Ql Q2 Apr. May June July Aug. Short-term rates 1 1 1 1 7 5 6 8 D T C F r e o i e s d m c a e o s m r u u a 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 - r m b ( o o 3 n r - r t m h o , w o s n i e n t c h g o 1 ) 0 1 n 1 d 12 a ry market)1 1 1 1 9 1 1 0 . . . . 3 0 1 8 2 1 5 3 8 7 9 9. . . . 2 2 8 9 8 5 0 0 8 8 8 8 . . . . 1 3 6 5 1 4 5 0 8 8 8 8 . . . . 4 6 5 8 0 2 0 0 8 8 8 8 . . . . 2 5 8 5 1 3 0 0 8 8 8 8 . . . . 1 3 6 5 9 3 3 0 9 8 8 8 . . . . 0 7 9 5 0 9 8 0 9 9 9 8 . . . . 0 2 3 5 8 5 7 0 9 9 9 8 . . . . 5 3 5 5 4 4 6 0 Long-term rates Bonds 2 1 0 9 S U t . a S te . g a o nd v e l r o n c m al e n g t o 13 v ernment14 1 12 1 . . 9 3 4 9 1 9 0 . . 9 7 0 2 1 9 0 . . 4 8 3 7 1 9 0 . . 2 8 3 1 1 9 0 . . 0 6 5 3 1 9 0 . . 1 6 1 7 1 9 1 . . 5 1 2 2 1 9 1 . . 5 5 3 9 1 9 1 . . 7 % 2 21 Aaa utility (new issue) 14.25 12.10 11.89 11.46 11.41 11.32 11.87 12.32 12.25 22 Conventional mortgages 15.65 13.79 13.26 13.16 13.02 13.09 13.37 14.00 n.a. 1. Unless otherwise noted, rates of change are calculated from average 5. Small-denomination time deposits—including retail RPs—are those issued amounts outstanding in preceding month or quarter. in amounts of less than $100,000. 2. Includes reserve balances at Federal Reserve Banks in the current week 6. Large-denomination time deposits are those issued in amounts of $100,000 plus vault cash held two weeks earlier used to satisfy reserve requirements at all or more. depository institutions plus currency outside the U.S. Treasury, Federal Reserve 7. Savings and loan associations, mutual savings banks, and credit unions. Banks, the vaults of depository institutions, and surplus vault cash at depository 8. Changes calculated from figures shown in table 1.23. Beginning December institutions. 1981, growth rates reflect shifts 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) travelers 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 money market deposit accounts (MMDAs), savings and small- 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by denomination time deposits at all depository institutions, overnight repurchase Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve agreements at commercial banks, overnight Eurodollars held by U.S. residents compilations. other than banks at Caribbean branches of member banks, and balances of money 16. Average rates on new commitments for conventional first mortgages on market mutual funds (general purpose and 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 Department 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 • September 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 FFFaaaccctttooorrrsss 1983 1983 June July Aug. July 20 July 27 Aug. 3 Aug. 10 Aug. 17 Aug. 24P Aug. 3 IP SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 162,133 164,799 164,461 166,199 164,397 164,237 164,132 165,081 164,958 163,779 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss''''' 141,484 143,971 144,893 145,461 143,896 143,975 143,967 145,456 145,584 144,901 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 141,177 143,122 144,820 142,841 143,8% 143,975 143,967 145,456 145,584 144,578 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 307 849 73 2,620 0 0 0 0 0 323 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss 8,922 8,950 8,855 9,036 8,880 8,880 8,880 8,880 8,880 8,769 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,895 8,883 8,849 8,880 8,880 8,880 8,880 8,880 8,880 8,742 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 27 67 6 156 0 0 0 0 0 27 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 38 55 7 129 0 0 0 0 0 30 99999 LLLLLoooooaaaaannnnnsssss 1,716 1,382 1,576 1,236 1,387 1,311 1,520 1,474 1,580 1,714 1111100000 FFFFFllllloooooaaaaattttt 1,670 1,812 1,114 1,573 1,542 1,596 1,137 1,086 1,380 842 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 8,303 8,629 8,016 8,764 8,691 8,475 8,629 8,186 7,534 7,524 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,131 11,131 11,129 11,131 11,131 11,131 11,130 11,128 11,128 11,128 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt ..... 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 159,177 160,683 160,984 160,709 159,916 160,240 161,294 161,443 160,893 160,453 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 536 520 491 524 512 494 515 515 494 490 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,525 4,017 3,554 3,309 4,517 4,024 3,815 3,310 3,559 3,300 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 219 252 228 262 231 292 228 233 204 237 1111199999 OOOOOttttthhhhheeeeerrrrr 541 623 477 690 620 604 504 446 449 431 2222200000 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnnttttt............... 754 902 1,096 884 979 982 1,167 1,065 979 1,069 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 5,107 5,197 5,249 5,313 5,260 5,158 5,116 5,332 5,299 5,289 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaaccccccccccooooouuuuunnnnntttttsssss22222 21,808 22,139 21,915 24,042 21,897 21,976 21,029 22,269 22,614 22,043 End-of-month figures Wednesday figures 1983 1983 June July Aug. July 20 July 27 Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 164,037 163,893 167,778 170,356 163,698 166,134 166,137 164,608 163,571 167,778 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss''''' 141,673 144,255 146,489 147,911 143,500 144,322 145,249 144,972 144,696 146,489 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 140,511 144,255 144,226 144,125 143,500 144,322 145,249 144,972 144,696 144,226 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 1,162 0 2,263 3,786 0 0 0 0 0 2,263 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss 9,105 8,880 8,932 9,020 8,880 8,880 8,880 8,880 8,880 8,932 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,890 8,880 8,742 8,880 8,880 8,880 8,880 8,880 8,880 8,742 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 215 0 190 140 0 0 0 0 0 190 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 203 0 209 74 0 0 0 0 0 209 3333311111 LLLLLoooooaaaaannnnnsssss 3,610 1,113 3,633 2,484 1,349 2,478 1,163 1,722 1,612 3,633 3333322222 FFFFFllllloooooaaaaattttt 1,020 1,066 979 1,825 1,497 1,806 2,033 1,421 872 979 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 8,426 8,579 7,536 9,042 8,472 8,648 8,812 7,613 7,511 7,536 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,131 11,131 11,128 11,131 11,131 11,131 11,128 11,128 11,128 11,128 3333355555 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt ..... 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 160,419 159,973 161,122 160,383 160,002 160,814 161,662 161,307 160,647 161,122 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 533 495 490 520 505 488 515 515 490 490 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 8,764 3,815 4,189 3,998 3,315 3,586 2,804 3,991 3,025 4,189 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 279 369 248 268 242 214 282 223 208 248 4444411111 OOOOOttttthhhhheeeeerrrrr 470 566 465 672 589 518 500 452 540 465 4444422222 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnnttttt............... 775 830 845 823 827 832 836 843 845 845 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 5,111 5,178 5,112 5,179 5,022 4,987 5,036 5,173 5,144 5,112 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaaccccccccccooooouuuuunnnnntttttsssss22222 17,220 22,201 24,839 28,047 22,730 24,230 24,034 21,636 22,204 24,839 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. Dec. Jan. Feb. Mar. Apr. May June July Aug.P 1 Reserve balances with Reserve Banks1 26,163 24,804 24,431 23,530 22,168 22,565 22,010 21,808 22,139 21,915 2 Total vault cash (estimated) 19,538 20,392 21,454 20,035 19,484 19,569 19,710 20,098 20,413 20,263 3 Vault cash at institutions with required reserve balances2 13,577 14,292 14,602 13,705 13,027 13,246 13,339 13,593 13,647 13,746 4 Vault cash equal to required reserves at other institutions 2,178 2,757 2,829 2,562 2,844 2,839 2,933 3,014 3,161 2,941 5 Surplus vault cash at other institutions3 3,783 3,343 4,023 3,768 3,613 3,484 3,438 3,491 3,605 3,576 6 Reserve balances + total vault cash4 45,701 45,196 45,885 43,565 41,652 42,134 41,720 41,906 42,552 42,178 7 Reserve balances + total vault cash used to satisfy reserve requirements4 5 41,918 41,853 41,862 39,797 38,039 38,650 38,282 38,415 38,947 38,602 8 Required reserves (estimated) 41,606 41,353 41,316 39,362 37,602 38,174 37,833 37,935 38,440 38,211 9 Excess reserve balances at Reserve Banks4'6 312 500 546 435 437 476 449 480 507 391 10 Total borrowings at Reserve Banks 642 697 500 557 852 993 902 1,714 1,382 1,576 II Seasonal borrowings at Reserve Banks 53 33 33 39 53 82 98 121 172 198 12 Extended credit at Reserve Banks 149 187 156 277 318 407 514 964 572 490 Weekly averages of daily figures for week ending 1983 June 29 July 6 July 13 July 20p July IIP Aug. 3 Aug. 10 Aug. 17 Aug. 24p Aug. 31P 13 Reserve balances with Reserve Banks1 22,254 22,124 20,586 24,042 21,897 21,976 21,029 22,269 22,614 22,043 14 Total vault cash (estimated) 20,150 20,284 21,027 19,182 20,984 20,684 20,804 20,284 19,409 20,402 15 Vault cash at institutions with required reserve balances2 13,869 13,749 13,625 12,926 14,162 13,896 13,733 13,393 13,595 13,990 16 Vault cash equal to required reserves at other institutions 2,919 3,050 3,531 2,861 3,195 3,144 3,325 3,144 2,550 2,878 17 Surplus vault cash at other institutions3... 3,362 3,485 3,871 3,395 3,627 3,644 3,746 3,747 3,264 3,534 18 Reserve balances + total vault cash4 42,404 42,408 41,613 43,224 42,881 42,660 41,833 42,553 42,023 42,445 19 Reserve balances + total vault cash used to satisfy reserve requirements4'5 39,042 38,923 37,742 39,829 39,254 39,016 38,087 38,806 38,759 38,911 20 Required reserves (estimated) 38,557 38,069 37,246 39,503 38,882 38,454 37,693 38,358 38,341 38,349 21 Excess reserve balances at Reserve Banks4'6 485 854 496 326 372 562 394 448 418 562 22 Total borrowings at Reserve Banks 2,102 2,234 1,147 1,236 1,387 1,311 1,520 1,474 1,580 1,714 23 Seasonal borrowings at Reserve Banks . 143 143 144 179 203 192 178 194 207 216 24 Extended credit at Reserve Banks 1,262 1,103 434 460 464 445 457 502 524 499 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 • September 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 July 6 July 13 July 20 July 27 Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 One day and continuing contract 1 Commercial banks in United States 67,387' 66,505' 60,000' 57,096' 60,046 62,652 58,593 53,344 52,437 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 22,375' 23,141' 23,965' 24,160' 23,992 24,440 23,822 24,299 23,803 3 Nonbank securities dealers 5,307 4,715' 4,928' 4,764 4,292 4,581 4,571 4,761 3,877 4 All other 26,274' 25,863' 25,045' 25,374' 24,222 24,340 25,478 25,886 25,195 All other maturities 5 Commercial banks in United States 5,273' 5,016 5,322 5,481' 5,680 5,637 5,702 5,822 6,184 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 10,416 10,368 10,833 9,668 9,240 9,185 9,388 9,284 9,105 7 Nonbank securities dealers 5.075 5,039 5,938 5,930' 6,324 6,326 6,169 6,232 6,582 8 All other 8,628' 7,851 8,043 8,418' 8,524 8,254 8,821 9,186 9,606 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 30,802' 29,534 27,359' 26,320' 28,424 24,801 23,095 22,415 23,065 10 Nonbank securities dealers 4,623 4,439 4,828 4,042' 4,631 4,675 5,289 5,354 4,710 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 8/31/83 date rate 8/31/83 rate 8/31/83 rate 8/31/83 rate Boston m 12/14/82 9 8'/2 9 91/2 10 10'/2 11 12/14/82 New York 12/15/82 12/15/82 Philadelphia 12/17/82 12/17/82 Cleveland 12/15/82 12/15/82 Richmond 12/15/82 12/15/82 Atlanta 12/14/82 12/14/82 Chicago 12/14/82 12/14/82 St. Louis 12/14/82 12/14/82 Minneapolis 12/14/82 12/14/82 Kansas City .... 12/15/82 12/15/82 Dallas 12/14/82 12/14/82 San Francisco... 8'/2 12/14/82 9 8'/2 9 9'/2 10 101/2 1 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 l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 7V5 71/2 1978— JJuullyy 3 7-71/4 71/4 11998811—— MMaayy 55 13-14 14 1974— Apr. 25 7>/i-8 8 10 7'/4 71/4 88 14 14 3 0 8 8 AAuugg.. 71 73/4 m Nov. 2 13-14 13 Dec. 9 73/4-8 73/4 Sept. 77 8 8 6 13 13 16 73/4 73/4 Oct. 16 8-81/2 81/2 Dec. 4 12 12 ?n 8'/2 81/2 1975— Jan. 6 7'/4-73/4 73/4 Nov. 1 S'/2-9'/2 9'/2 1982— July 20 111/2-12 111/2 10 71/4-73/4 71/4 3 9'/> 91/2 23 ll'/2 11 '/2 24 71/4 71/4 Aug. 2 11-111/2 11 Feb. 5 63/4-7'/4 63/4 1979— July 70 10 10 3 11 11 7 63/4 63/4 AAuugg.. 17 10-10'/2 101/! 16 101/2 101/2 Mar. 10 6l/4-63/4 61/4 70 101/2 101/2 27 10-101/2 10 14 6'/4 6'/4 SSeepptt.. 19 101/2-11 11 30 10 10 May 16 6-6 'A 6 71 11 11 Oct. 12 91/2-10 91/2 23 6 6 Oct. 8 11-12 12 13 9>/2 91/2 10 12 12 Nov. 22 9-9'/2 9 1976— Jan. 19 51/2-6 51/2 26 9 9 23 5'/> 51/2 1980— Feb. 15 12-13 13 Dec. 14 8 i/i-9 9 Nov. 22 51/4-51/2 51/4 19 13 13 15 8'/2-9 81/2 26 51/4 51/4 May 29 12-13 13 17 81/2 81/2 30 12 12 1977— Aug. 30 51/4-53/4 5'/4 June 13 11-12 11 31 51/4-53/4 53/4 16 Sept. 2 53/4 53/4 Julv 78 10-11 10 Oct. 26 6 6 29 10 10 Sept. 76 11 11 1978— Jan. 2 9 0 6- 6 61 > /2 / 2 6 6 V V i 2 N De o c v . . 17 12 1 - 2 1 3 1 1 2 3 May 11 6'/>-7 7 8 13 13 12 7 7 In effect Aug. 31, 1983 81/2 8'/2 1. Applicable to advances when exceptional circumstances or practices involve In 1980 and 1981, the Federal Reserve applied a surcharge to short-term only a particular depository institution and to advances when an institution is adjustment credit borrowings by institutions with deposits of $500 million or more under sustained liquidity pressures. See section 201.3(b)(2) of Regulation A. that had borrowed in successive weeks or in more than 4 weeks in a calendar 2. Rates for short-term adjustment credit. For description and earlier data see quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, the following publications of the Board of Governors: Banking and Monetary 1980. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980, adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and and 1981. 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 • September 1983 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyy dd ppee ee pp oo oo ff ss ii dd tt ee ii pp nn oo ttee ssii rr tt vv ,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo ooff ss iitt dd ee ii pp nn oo ttee 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 7 12/30/76 3 12/30/82 9</z 12/30/76 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 16L/4 12/30/76 By original maturity Less than 2Vi years 3 3/31/83 TTiimmee aanndd ssaavviinnggss11^^ 2 Vi years or more 0 3/31/83 Savings 3 3/16/67 Eurocurrency liabilities TTiimmee44 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2Vz 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 2 Vi 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual 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 1978 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 large 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 iVi 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) Type and maturity of deposit In effect Aug. 31, 1983 Previous maximum In effect Aug. 31, 1983 Previous maximum Eff d e a c te ti ve Ef d fe a c te ti ve Percent Ef d fe a c te ti ve Percent 1 Savings 51/4 7/1/79 7/1/73 5Vi 7/1/79 51/4 2 Negotiable order of withdrawal accounts2 .. 5'/4 12/31/80 1/1/74 5'/4 12/31/80 5 Time accounts3 Fixed ceiling rates by maturity4 3 14-89 daysr 5V4 8/1/79 5 7/1/73 ((66)) (6) 4 90 days to 1 year 53/4 1/1/80 5V2 7/1/73 66 i/1/80 53/4 6 5 2 1 t t o o 2 2 ' A y e y a e rs a 7 r s7 7/1/73 5 5 V 3/4 2 1 1 / / 2 2 1 1 / / 7 7 0 0 6>/i (') 6 53 /4 7 lxh to 4 years7 6W 7/1/73 53/4 1/21/70 63/4 (') 6 8 9 6 4 t t o o 8 6 y y e e a a r r s s 8 8 7 V '/4 / l 12 1 / 1 2 / 3 1 / / 7 7 4 3 7 (9 1 ) / 4 11/1/73 7 7 1 3/ / 4 2 12 1 / 1 2 / 3 1 / / 7 7 4 3 V (* / ) 2 10 8 years or more8 m 6/1/78 (6) 8 6/1/78 (6) 11 Issued to governmental units (all maturities)10 6/1/78 73/4 12/23/74 8 6/1/78 73/4 12 IRAs and Keogh (H.R. 10) plans (3 years or more)10-11 6/1/78 73/4 7/6/77 8 6/1/78 73/4 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loans. 9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or 2. Federally insured commercial banks, savings and loan associations, cooper- more with minimum denominations of $ 1,000 had no ceiling; however, the amount ative banks, and mutual savings banks in Massachusetts and New Hampshire of such certificates that an institution could issue was limited to 5 percent of its were first permitted to offer negotiable order of withdrawal (NOW) accounts on total time and savings deposits. Sales in excess of that amount, as well as Jan. 1, 1974. Authorization to issue NOW accounts was extended to similar certificates of less than $1,000, were limited to the 6'/i percent ceiling on time institutions throughout New England on Feb. 27, 1976, 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 Jan. 5, 1983, the interest rate ceiling is removed tions of $1,000. There is no limitation on the amount of these certificates that for NOW accounts with an initial balance and average maintenance balance of banks can issue. $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 21/2-year-or-more variable-ceiling certificates or in 26at savings and loan associations was decreased to 14 days and the minimum week money market certificates regardless of the level of the Treasury bill rate. maturity period for time deposits at savings and loan associations in excess of $100,000 was decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity NOTE. Before Mar. 31, 1980, the maximum rates that could be paid by federally or notice period for time deposits was decreased from 30 to 14 days at mutual insured commercial banks, mutual savings banks, and savings and loan associasavings banks. tions were established by the Board of Governors of the Federal Reserve System, 5. Effective Oct. 30, 1980, the minimum maturity or notice period for time the Board of Directors of the Federal Deposit Insurance Corporation, and the deposits was decreased from 30 to 14 days at commercial banks. Federal Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526 6. No separate account category. respectively. Title II of the Depository Institutions Deregulation and Monetary 7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to required for savings and loan associations, except in areas where mutual savings establish maximum rates of interest payable on deposits to the Depository banks permitted lower minimum denominations. This restriction was removed for Institutions Deregulation Committee. The maximum rates on time deposits in deposits maturing in less than 1 year, effective Nov. 1, 1973. denominations of $100,000 or more with maturities of 30-89 days were suspended 8. No minimum denomination. Until July 1, 1979, the minimum denomination in June 1970; the maximum rates for such deposits maturing in 90 days or more was $1,000 except for deposits representing funds contributed to an individual were suspended in May 1973. For information regarding previous interest rate retirement account (IRA) or a Keogh (H.R. 10) plan established pursuant to the ceilings on all types of accounts, see earlier issues of the FEDERAL RESERVE Internal Revenue Code. The $1,000 minimum requirement was removed for such BULLETIN, the Federal Home Loan Bank Board Journal, and the Annual Report accounts in December 1975 and November 1976 respectively. of the Federal Deposit Insurance Corporation. For deposits subject to variable ceiling rates and deposits not subject to interest rate ceilings see page A10. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • September 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 Jan. 5, 1983, the minimum denomination required annual investment yield equal to 70 percent of the average investment yield for 52for this deposit is reduced to $2,500. The ceiling rate of interest on these deposits week U.S. Treasury bills as determined by the auction of 52-week Treasury bills is indexed to the discount rate (auction average) on most recently issued 91-day held immediately before the calendar week in which the certificate is issued. A Treasury bills for thrift institutions and the discount rate minimum 25 basis points maximum lifetime exclusion of $ 1,000 ($2,000 on a joint return) from gross income for commercial banks. The rate differential ends 1 year from the effective date of is generally authorized for interest income from ASCs. The annual investment these instruments and is suspended at any time the Treasury bill discount rate is 9 yield for ASCs issued in December 1982 (in percent) was as follows: Dec. 26, 6.26. percent or below for four consecutive auctions. The maximum allowable rates in August 1983 (in percent) for commercial banks and thrifts were as follows: Aug. 2, 1'/2-year to less than 2'/2-year time deposits. Effective Aug. 1, 1981, commercial 9.36; Aug. 9, 9.57; Aug. 16, 9.43; Aug. 23, 9.18; and Aug. 30, 9.28. 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 '/4 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 Jan. 5, 1983, the minimum denomination required for this deposit is category of deposits was reduced to less than 3'/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 2V2 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 August 1983 (in percent) for commercial banks were Bill rate or 4-week Commercial bank ceiling as follows: Aug. 2, 10.45; Aug. 16, 10.80; and Aug. 30, 10.40.; and for thrift average bill rate institutions: Aug. 2, 10.70; Aug. 16, 11.05; and Aug. 30, 10.65. 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 of 1 percentage point plus the higher of tions were authorized to offer variable ceiling nonnegotiable time deposits with no the bill rate or 4-week average bill rate required minimum denomination and with maturities of 2'/2 years or more. Effective Jan. 1, 1980, the maximum rate for commercial banks was 3/4 percentage Thrift ceiling point below the average yield on 2'/2-year U.S. Treasury securities; the ceiling rate 7.25 percent or below 7.75 percent for thrift institutions was V* percentage point higher than that for commercial Above 7.25 percent, but below '/2 of 1 percentage point plus the higher of banks. Effective Mar. 1, 1980, a temporary ceiling of ll'/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 '/2 percentage point. The 8.75 percent or above 'A 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 August 1983 for commercial banks based on the bill rate were as follows: Aug. 2, 9.81; Aug. 9, 9.95; Aug. 16,9.80; Aug. 23, 9.54; and Aug. 30, 9.78, and based on the 4-week average bill rate were as follows: Aug. 2, 9.62; Aug. 9, 9.73; Aug. 16, 9.78; Aug. 23, 9.77; and Aug. 30, 9.76. The maximum allowable rates in August 1983 for thrifts based on the bill rate were as follows: Aug. 2, 9.81; Aug. 9, 9.95; Aug. 16, 9.80; Aug. 23, 9.54; and Aug. 30, 9.78; and based on the 4-week average bill rate were as follows: Aug. 2, 9.62; Aug. 9, 9.73; Aug. 16, 9.78; Aug. 23, 9.77; and Aug. 30, 9.76. 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 Jan. 5, 1983, than one month or condition the payment of a rate on a requirement that the funds the minimum denomination required for this deposit was reduced to $2,500 and remain on deposit for longer than one month. No more than six preauthorized, 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 V/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'/2 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 1983 TTyyppee ooff ttrraannssaaccttiioonn 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May June July U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 7,668 13,899 17,067 0 1,456 1,259 2,880 516 1,721 666 2 . Gross sales 7,331 6,746 8,369 1,983 934 0 0 0 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,389 1,816 3,000 900 300 0 0 0 0 0 Others within 1 year 5 Gross purchases 912 317 312 0 0 0 0 173 0 156 6 Gross sales 0 23 0 0 0 0 0 0 0 0 7 Maturity shift 12,427 13,794 17,295 558 4,564 1,198 826 1,795 1,398 1,162 8 Exchange -18,251 -12,869 -14,164 -544 -2,688 -900 0 -1,842 -916 0 9 Redemptions 0 0 0 0 0 0 0 0 87 0 1 to 5 years 10 Gross purchases 2,138 1,702 1,797 0 0 0 0 595 0 481 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -8,909 -10,299 -14,524 -553 -4,564 -1,198 -684 -41 -1,398 -1,121 13 Exchange 13,412 10,117 11,804 544 1,599 900 0 1,367 916 0 5 to 10 years 14 Gross purchases 703 393 388 0 0 0 0 326 0 215 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shift -3,092 -3,495 -2,172 -5 229 0 -142 -1,754 0 -41 17 Exchange 2,970 1,500 2,128 0 650 0 0 300 0 0 Over 10 years 18 Gross purchases 811 379 307 0 0 0 0 108 0 124 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -426 0 -601 0 -229 0 0 0 0 0 21 Exchange 1,869 1,253 234 0 439 0 0 175 0 0 All maturities 22 Gross purchases 12,232 16,690 19,870 0 1,456 1,259 2,880 1,719 1,721 1,642 23 Gross sales 7,331 6,769 8,369 1,983 934 0 0 0 0 0 24 Redemptions 3,389 1,816 3,000 900 300 0 0 0 87 0 Matched transactions 25 Gross sales 674,000 589,312 543,804 59,398 35,234 47,892 37,873 43,404 50,086 40,934 26 Gross purchases 675,496 589,647 543,173 59,043 38,204 47,724 36,205 45,001 47,783 43,037 Repurchase agreements 27 Gross purchases 113,902 79,920 130,774 6,747 6,697 3,526 7,671 0 7,891 7,816 28 Gross sales 113,040 78,733 130,286 10,451 6,697 3,526 3,984 3,687 6,730 8,978 29 Net change in U.S. government securities 3,869 9,626 8,358 -6,943 3,192 1,090 4,899 -371 493 2,583 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 9 5 8 7 * 17 10 Repurchase agreements 33 Gross purchases 28,895 13,320 18,957 452 276 379 340 0 678 558 34 Gross sales 28,863 13,576 18,638 1,040 276 379 92 248 463 773 35 Net change in federal agency obligations 555 130 130 -596 -5 -8 241 -248 198 -225 BANKERS ACCEPTANCES 36 Repurchase agreements, net 73 -582 1,285 -1,480 0 0 704 -704 203 -203 37 Total net change in System Open Market Account 4,497 9,175 9,773 -9,019 3,187 1,082 5,844 -1,322 893 2,155 NOTE: Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • September 1983 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1983 1983 Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 June July Aug. Consolidated condition statement ASSETS 1 Gold certificate account 11,131 11,128 11,128 11,128 11,128 11,131 11,131 11,128 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 Coin 413 417 425 424 415 382 411 415 Loans 4 To depository institutions 2,478 1,163 1,722 1,612 3,633 3,610 1,113 3,633 5 Other 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements 0 0 0 0 220099 220033 00 220099 Federal agency obligations 7 Bought outright 8,880 8,880 8,880 8,880 8,742 88,,889900 88,,888800 88,,774422 8 Held under repurchase agreements 0 0 0 0 190 215 00 190 U.S. government securities Bought outright 9 Bills 61,049 61,976 61,699 61,423 60,953 58,213 6600,,998822 6600,,995533 10 Notes 63,958 63,958 63,044 63,044 63,044 63,107 63,958 63,044 11 Bonds 19,315 19,315 20,229 20,229 20,229 19,191 19,315 20,229 12 Total1 144,322 145,249 144,972 144,6% 144,226 140,511 144,255 144,226 13 Held under repurchase agreements 0 0 0 0 2,263 1,162 0 2,263 14 Total U.S. government securities 144,322 145,249 144,972 144,696 146,489 141,673 144,255 146,489 15 Total loans and securities 155,680 155,292 155,574 155,188 159,263 154,591 154,248 159,263 16 Cash items in process of collection 9,878 8,441 9,734 7,608 8,158 8,173 8,635 8,158 17 Bank premises 553 553 554 553 553 553 552 553 Other assets 18 Denominated in foreign currencies2 3,884 3,971 3,918 3,706 3,617 4,322 3,839 3,617 19 All other3 4,211 4,288 3,141 3,252 3,366 3,551 4,188 3,366 20 Total assets 190,368 188,708 189,092 186,477 191,118 187,321 187,622 191,118 LIABILITIES 21 Federal Reserve notes 147,929 148,808 148,461 147,775 148,241 147,549 147,094 148,241 Deposits 22 Depository institutions 25,088 24,889 22,490 23,060 25,702 18,004 23,046 25,702 23 U.S. Treasury—General account 3,586 2,804 3,991 3,025 4,189 8,764 3,815 4,189 24 Foreign—Official accounts 214 282 223 208 248 279 369 248 25 Other 492 481 441 529 447 461 551 447 26 Total deposits 29,380 28,456 27,145 26,822 30,586 27,508 27,781 30,586 27 Deferred availability cash items 8,072 6,408 8,313 6,736 7,179 7,153 7,569 7,179 28 Other liabilities and accrued dividends4 1,959 1,894 2,028 1,990 2,056 2,021 1,989 2,056 29 Total liabilities 187,340 185,566 185,947 183,323 188,062 184,231 184,433 188,062 CAPITAL ACCOUNTS 30 Capital paid in 1,428 1,429 1,429 1,430 1,434 1,421 1,427 1,434 31 Surplus 1,359 1,359 1,359 1,359 1,359 1,359 1,359 1,359 32 Other capital accounts 241 354 357 365 263 310 403 263 33 Total liabilities and capital accounts 190,368 188,708 189,092 186,477 191,118 187,321 187,622 191,118 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 111,983 110,746 110,120 108,983 108,053 110,889 94,203 110088,,005533 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) .... 169,568 170,444 170,860 171,546 171,346 166,397 169,213 171,346 36 LESS: Held by bank5 21,639 21,636 22,399 23,771 23,105 18,848 22,119 23,105 37 Federal Reserve notes, net 147,929 148,808 148,461 147,775 148,241 147,549 147,094 148,241 Collateral for Federal Reserve notes 38 Gold certificate account 11,131 11,128 11,128 11,128 11,128 11,131 11,131 11,128 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 132,180 133,062 132,715 132,029 132,495 131,800 131,345 132,495 42 Total collateral 147,929 148,808 148,461 147,775 148,241 147,549 147,094 148,241 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 Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 June 30 July 29 Aug. 31 1 Loans—Total 2,478 1,163 1,722 1,612 3,633 3,610 1,113 3,633 2. Within 15 days 2,366 1,033 1,682 1,569 3,583 3,561 1,045 3,583 3 16 days to 90 days 112 130 40 43 50 49 68 50 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 209 203 0 209 6 Within 15 days 0 0 0 0 209 203 0 209 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 144,322 145,249 144,972 144,696 146,489 141,673 144,255 146,489 10 Within 15 days1 10,318 11,174 6,326 7,871 9,715 3,767 4,116 9,715 11 16 days to 90 days 28,862 30,229 31,482 29,351 28,657 30,111 34,748 28,657 12 91 days to 1 year 43,745 42,449 43,059 43,369 43,975 46,442 43,218 43,975 13 Over 1 year to 5 years 32,332 32,332 32,826 32,826 32,863 32,586 33,108 32,863 14 Over 5 years to 10 years 11,874 11,874 13,690 13,690 13,690 11,700 11,874 13,690 15 Over 10 years 17,191 17,191 17,589 17,589 17,589 17,067 17,191 17,589 16 Federal agency obligations—Total 8,880 8,880 8,880 8,880 8,932 9,105 8,880 8,932 17 Within 15 days1 0 223 289 289 336 406 82 336 18 16 days to 90 days 912 689 659 659 713 583 814 713 19 91 days to 1 year 1,899 1,898 1,862 1,862 1,832 2,012 1,914 1,832 20 Over 1 year to 5 years 4,419 4,418 4,429 4,429 4,370 4,421 4,418 4,370 21 Over 5 years to 10 years 1,132 1,134 1,123 1,123 1,163 1,165 1,134 1,163 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 DomesticN onfinancial Statistics • September 1983 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1983 IItteemm 1979 1980 1981 1982 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July Aug. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 1 Total reserves2 34.23 36.23 37.93 40.78 40.12 40.34 41.00 41.30 41.24 41.72 41.93 41.80 2 Nonborrowed reserves 32.76 34.54 39.45 40.15 39.59 39.76 40.21 40.29 40.29 40.08 40.48 40.26 3 Required reserves 33.91 35.71 39.53 40.28 39.57 39.91 40.57 40.83 40.79 41.24 41.43 41.34 4 Monetary base3 142.8 154.9 173.2 175.6 176.3 178.0 180.2 181.3 182.8 184.3 185.0 186.0 Not seasonally adjusted 5 Total reserves2 34.83 37.24 38.85 41.56 42.23 40.23 40.23 41.05 40.71 40.84 41.42 41.13 6 Nonborrowed reserves 33.35 35.55 38.21 40.93 41.69 39.64 39.44 40.04 39.75 39.20 39.97 39.59 7 Required reserves 34.50 36.72 38.59 41.06 41.67 39.79 39.80 40.57 40.26 40.36 40.92 40.67 8 Monetary base3 145.3 158.2 166.1 178.9 177.7 175.9 177.7 180.3 181.7 183.5 185.6 185.7 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS4 9 Total reserves2 43.91 40.66 41.92 41.85 41.86 39.80 38.04 38.65 38.28 34.42 38.95 38.68 10 Nonborrowed reserves 42.43 38.97 41.29 41.22 41.33 39.22 37.24 37.64 37.33 36.78 37.50 37.13 11 Required reserves 43.58 40.15 40.60 41.35 41.32 39.36 37.60 38.17 37.83 37.93 38.44 38.21 12 Monetary base3 156.1 162.5 169.7 179.3 177.7 175.9 175.7 178.4 179.8 181.6 183.7 183.8 1. Reserve aggregates include required reserves of member banks and Edge of $210 million; Jan. 14, 1982, a reduction of $60 million; Feb. 11, 1982 an increase Act corporations and other depository institutions. Discontinuities associated of $170 million; Mar. 4, 1982, an estimated reduction of $2.0 billion; May 13, 1982, with the implementation of the Monetary Control Act, the inclusion of Edge Act an estimated increase of $150 million; Aug. 12, 1982 an estimated increase of $140 corporation reserves, and other changes in Regulation D have been removed. million; and Sept. 2, 1982, an estimated reduction of $1.2 billion; Oct. 28, 1982 an 2. Reserve balances with Federal Reserve Banks plus vault cash at institutions estimated reduction of $100 million; Dec. 23, 1982 an estimated reduction of $800 with required reserve balances plus vault cash equal to required reserves at other million; Mar. 3, 1983 an estimated reduction of $1.9 billion; and Sept. 1, 1983, an institutions. estimated reduction of $1.2 billion beginning with the week ended Dec. 23, 1981, 3. Consists of reserve balances and service-related balances and adjustments at reserve aggregates have been reduced by shifts of reservable liabilities to IBFs. Federal Reserve Banks in the current week plus vault cash held two weeks earlier On the basis of reports of liabilities transferred to IBFs by U.S. commercial banks used to satisfy reserve requirements at all depository institutions plus currency and U.S. agencies and branches of foreign banks, it is estimated that required outside the U.S. Treasury, Federal Reserve Banks, the vaults of depository reserves were lowered on average by $60 million to $90 million in Dec. 1981 and institutions, and surplus vault cash at depository institutions. $180 million to $230 million in Jan. 1982, mostly reflecting a reduction in 4. Reserves of depository institutions series reflect actual reserve requirement reservable Eurocurrency transactions. Also, beginning with the week ending Apr. percentages with no adjustments to eliminate the effect of changes in Regulation D 20, 1983, required reserves were reduced an estimated $80 million as a result of including changes associated with the implementation of the Monetary Control the elimination of reserve requirements on nonpersonal time deposits with Act. Includes required reserves of member banks and Edge Act corporations and maturities of 2'/^ years or more to less than 3'/2 years. beginning Nov. 13, 1980, other depository institutions. Under the transitional phase-in program of the Monetary Control Act of 1980, the net changes in NOTE. Latest monthly and weekly figures are available from the Board's required reserves of depository institutions have been as follows: Effective H.3(502) statistical release. Back data and estimates of the impact on required Nov. 13, 1980, a reduction of $2.9 billion; Feb. 12, 1981, an increase of $245 reserves and changes in reserve requirements are available from the Banking million; Mar. 12, 1981, an increase of $75 million; May 14, 1981, an increase of Section, Division of Research and Statistics, Board of Governors of the Federal $245 million; Sept. 3, 1981, a reduction of $1.1 billion; Nov. 12, 1981, an increase 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 DDeecc.. DDeecc.. DDeecc.. DDeecc.. AApprr.. MMaayy JJuunnee JJuullyy Seasonally adjusted MEASURES1 1 Ml 389.0 414.1 440.6 478.2 496.5 507.4 511.7' 515.5 2 M2 1,497.5 1,630.3 1,794.9 1,959.5 2,074.8' 2,096.2' 2,114.3' 2,125.4 3 M3 1,758.4 1,936.7 2,167.9 2,377.6 2,454.0 2,476.5 2,499.2' 2,509.6 4 L2 2,131.8 2,343.6 2,622.0 2,896.8 3,006.5 n.a. n.a. n.a. SELECTED COMPONENTS 5 Currency 106.5 116.2 123.2 132.8 138.0 139.3 140.3 140.9 6 Travelers checks3 3.7 4.1 4.5 4.2 4.6 4.7 4.7 4.6 7 Demand deposits 262.0 266.8 236.4 239.8 238.9 242.5 244.0 245.7 8 Other checkable deposits4 17.0 26.9 76.6 101.3 115.0 120.9 122.7 124.2 9 Savings deposits5 423.1 400.7 344.4 359.3 321.5 323.1' 325.0' 323.5 10 Small-denomination time deposits6 635.9 731.7 828.6 859.1 725.7 720.1 722.1' 734.9 11 Large-denomination time deposits7 222.2 258.9 302.6 333.8 300.4 299.5 304.6' 305.9 Not seasonally adjusted MEASURES1 12 Ml 398.8 424.7 452.1 491.0 504.5 499.8 508.3 514.7 13 M2 1,502.1 1,635.0 1,799.6 1,964.5 2,088.4 2,092.7' 2,114.0' 2,126.9 14 M3 1,766.1 1,944.9 2,175.9 2,385.3 2,465.5 2,471.7' 2,495.8' 2,507.5 15 L2 2,138.9 2,350.8 2,629.7 2,904.7 3,021.4 n.a. n.a. n.a. SELECTED COMPONENTS 16 Currency 108.2 118.3 125.4 135.2 137.4 138.9 140.3 142.0 17 Travelers checks3 3.5 3.9 4.3 4.0 4.4 4.5 4.9 5.2 18 Demand deposits 270.1 275.2 244.0 247.7 242.4 238.2 242.1 245.0 19 Other checkable deposits4 17.0 27.2 78.4 104.0 120.2 118.2 121.0 122.5 20 Overnight RPs and Eurodollars8 21.2 28.4 36.1 44.3 50.6 55.1' 55.9' 52.4 21 Savings deposits5 420.7 398.3 342.1 356.7 324.3 324.6 326.3 326.6 22 Money market deposit accounts n.a. n.a. n.a. 43.2 341.2 356.8 367.3 368.4 23 Small-denomination time deposits6 633.1 728.3 824.1 853.9 728.6 722.7 723.9' 734.2 Money market mutual funds 24 General purpose and broker/dealer 33.4 61.4 150.9 177.8' 140.1' 135.0' 132.9' 131.3 25 Institution only 9.5 14.9 36.0 43.1' 36.C 35.7' 34.7' 34.0 26 Large-denomination time deposits7 226.0 262.4 305.9 336.5 298.1 298.2 301.5' 302.3 1. Composition of the money stock measures is as follows: 3. Outstanding amount of U.S. dollar-denominated travelers 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) travelers 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 DomesticN onfinancial Statistics • September 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. 1983 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11998800'' 1199881111 11998822'' Jan. Feb. Mar. Apr. May June Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 62,757.8 80,858.7 90,914.4 103,333.1 102,743.5 102,206.1 103,022.3 107,273.3 106,858.3 2 Major New York City banks 25,156.1 33,891.9 37,932.9 46,353.0 45,133.2 44,327.4 46,025.6 46,891.2 46,444.3 3 Other banks 37,601.7 46,966.9 52,981.6 56,980.1 57,610.3 57,878.7 56,996.7 60,382.1 60,414.1 4 ATS-NOW accounts3 159.3 743.4 1,036.2 1,262.3 1,286.4 1,369.4 1,202.2 1,371.5 1,375.4 5 Savings deposits4 670.0 672.7 721.4 904.3 827.9 803.2 714.9 743.1 784.5 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 198.7 285.8 324.2 361.1 361.3 356.1 359.7 370.4 368.6 7 Major New York City banks 803.7 1,105.1 1,287.6 1,462.3 1,462.5 1,437.4 1,502.8 1,471.5 1,449.0 8 Other banks 132.2 186.2 211.1 223.9 227.2 225.9 222.9 234.3 234.3 9 ATS-NOW accounts3 9.7 14.0 14.5 15.8 15.1 15.6 13.9 15.2 15.0 10 Savings deposits4 3.6 4.1 4.5 6.0 5.8 5.7 5.1 5.4 5.7 Not seasonally adjusted DEBITS TO Demand deposits2 11 All insured banks 63,124.4 81,197.9 91,031.9 101,566.1 92,654.1 109,166.3 100,117.1 103,947.8 113,836.2 12 Major New York City banks 25,243.1 34,032.0 38,001.0 45,657.2 40,937.3 47,496.6 43,678.9 44,942.5 50,643.1 13 Other banks 37,881.3 47,165.9 53,030.9 55,908.8 51,716.8 61,669.7 56,438.1 59,005.4 63,193.1 14 ATS-NOW accounts3 158.0 737.6 1,027.1 1,525.5 1,198.7 1,398.4 1,405.3 1,353.1 1,455.9 15 MMDA5 0 0 0 278.4 324.7 454.9 545.8 505.6 630.7 16 Savings deposits4 669.8 672.9 720.0 980.4 754.3 820.4 779.9 722.2 787.5 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 202.3 286.1 325.0 346.1 334.8 391.8 347.9 368.1 394.3 18 Major New York City banks 814.8 1,114.2 1,295.7 1,368.1 1,366.7 1,561.1 1,446.9 1,471.0 1,563.6 19 Other banks 134.8 186.2 211.5 215.0 209.5 248.5 219.1 234.3 246.5 20 ATS-NOW accounts3 9.7 14.0 14.3 18.6 14.4 16.2 15.6 15.3 16.1 21 MMDA5 0 0 0 2.4 2.0 2.4 2.8 2.4 2.9 22 Savings deposits4 3.6 4.1 4.5 6.6 5.3 5.8 5.6 5.2 5.7 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSAs 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 Banks' Billions of dollars; averages of Wednesday figures 1981 1982 1983 1981 1982 1983 CCaatteeggoorryy Dec.2 Dec. Apr. May June July Dec.2 Dec. Apr. May June July Seasonally adjusted Not seasonally adjusted 1 Total loans and securities3 1,316.3 1,412.1 1,460.6 1,474.4 1,488.0" 1,499.9 1,326.1 1,422.5 1,460.0 1,468.1 1,485.6 1,493.6 2 U.S. Treasury securities 111.0 130.9 157.8 166.1 171.2' 172.9 111.4 131.5 160.6 165.3 171.6 171.6 3 Other securities 231.4 239.1 243.4 245.0 246.2 246.0 232.8 240.6 243.3 245.2 245.9 244.8 4 Total loans and leases3 973.9 1,042.0 1,059.5 1,063.3 1,070.6 1,081.0 981.8 1,050.4 1,056.0 1,057.6 1,068.0 1,077.3 5 Commercial and industrial loans 358.0 392.4 392.8 393.0 395.0 399.1 360.1 394.7 395.2 393.1 394.4 397.9 6 Real estate loans 285.7 303.2 311.4 313.6 317.0' 319.4 286.8 304.1 310.4 312.4 315.4 318.5 7 Loans to individuals 185.1 191.8 196.0 197.9 199.8 203.2 186.4 193.1 194.7 196.7 199.0 202.2 8 Security loans 21.9 24.7 22.9 23.4 22.3 23.7 22.7 25.5 22.9 22.5 23.5 23.1 9 Loans to nonbank financial institutions 30.2 31.1 31.6 31.1 31.1 31.2 31.2 32.1 31.3 30.7 30.7 30.6 10 Agricultural loans 33.0 36.1 37.2 36.9 36.7 36.8 33.0 36.1 36.6 36.7 36.9 37.2 11 Lease financing receivables.... 12.7 13.1 13.1 13.1 13.0 12.9 12.7 13.1 13.1 13.1 13.0 12.9 12 All other loans 47.2 49.7 54.3 54.4 55.7 54.7 49.2 51.7 51.9 52.5 55.2 55.0 MEMO: 13 Total loans and securities plus loans sold3-4 1,319.1 1,415.0 1,463.6 1,477.2 1,490.7 1,502.6 1,328.9 1,425.4 1,462.9 1,470.9 1,488.3 1,496.3 14 Total loans plus loans sold3'4 .... 976.7 1,045.0 1,062.4 1,066.1 1,073.3 1,083.6 984.7 1,053.3 1,059.0 1,060.4 1,070.8 1,080.0 15 Total loans sold to affiliates3'4.... 2.8 2.9 3.0 2.8 2.7 2.7 2.8 2.9 3.0 2.8 2.7 2.7 16 Commercial and industrial loans plus loans sold4 360.2 394.6 395.3 395.1 397.2 401.2 362.3 396.9 397.5 395.3 396.5 399.9 17 Commercial and industrial loans sold4 2.2 2.3 2.4 2.2 2.1 2.1 2.2 2.3 2.4 2.2 2.1 2.1 18 Acceptances held 8.9 8.5 8.9 8.2 8.0 8.5 9.8 9.5 8.2 7.7 8.1 8.4 19 Other commercial and industrial loans 349.1 383.8 384.0 384.8 387.0 390.7 350.3 385.2 386.9 385.4 386.3 389.4 20 To U.S. addressees5 334.9 373.5 372.1 371.8 373.7 378.1 334.3 372.7 375.1 373.4 374.2 377.3 21 To non-U.S. addressees 14.2 10.3 11.9 13.0 13.3 12.5 16.1 12.4 11.8 12.0 12.1 12.1 22 Loans to foreign banks 19.0 13.5 15.2 15.1 15.0 14.4 20.0 14.5 14.6 14.5 14.5 14.1 1. Includes domestically chartered banks; U.S. branches and agencies of 4. Loans sold are those sold outright to a bank's own foreign branches, foreign banks, New York investment companies majority owned by foreign nonconsolidated nonbank affiliates of the bank, the bank's holding company (if banks, and Edge Act corporations owned by domestically chartered and foreign not a bank), and nonconsolidated nonbank subsidiaries of the holding company. banks. 5. United States includes the 50 states and the District of Columbia. 2. Beginning December 1981, shifts of foreign loans and securities from U.S. banking offices to international banking facilities (IBFs) reduced the levels of NOTE. Data are prorated averages of Wednesday estimates for domestically several items. Seasonally adjusted data that include adjustments for the amounts chartered banks, based on weekly reports of a sample of domestically chartered shifted from domestic1 offices to IBFs are available in the Board's 0.7 (407) banks and quarterly reports of all domestically chartered banks. For foreignstatistical release (available from Publications Services, Board of Governors of related institutions, data are averages of month-end estimates based on weekly the Federal Reserve System, Washington, D.C. 20551). reports from large agencies and branches and quarterly reports from all agencies, 3. Excludes loans to commercial banks in the United States. 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 • September 1983 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars 1981 1982 1983 SSoouurrccee Dec. Sept. Oct. Nov.' Dec.' Jan.' Feb.' Mar.' Apr.' May' June' July Total nondeposit funds 1 Seasonally adjusted2 96.5r 78.8' 81.1 87.3 82.8 72.8 75.8 75.3 79.7 90.3 87.7 75.8 2 Not seasonally adjusted 98.(K 81.2' 83.3 89.3 84.3 74.3 76.7 76.0 78.3 89.8 89.9 77.8 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 111.6' 121.6 126.2' 129.2 127.5 131.8 134.7 134.8 139.3 145.3 140.1 131.9 4 Not seasonally adjusted 113.1' 124.0 128.4 131.2 128.9 133.2 135.6 135.5 137.8 144.8 141.8 134.0 5 Net balances due to foreign-related institutions, not seasonally adjusted -17.9' -45.6' -47.9 -44.8 -47.6 -61.9 -61.9 -62.4 -62.5 -57.8 -55.1 -58.8 6 Loans sold to affiliates, not seasonally adjusted4 2.8 2.8 2.8 2.9 2.9 3.0 3.0 3.0 3.0 2.8 2.7 2.7 MEMO 7 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted5 -22.5 -39.0 -40.4 -38.3 -39.8 -50.2 -50.6 -52.9 -52.6 -48.7 -49.2 -51.0 8 Gross due from balances 54.9 68.8 69.8 69.9 72.4 79.4 78.9 79.8 80.1 76.3 75.8 77.5 9 Gross due to balances 32.4 29.7 29.4 31.6 32.6 29.2 28.3 26.9 27.5 27.6 26.6 26.5 10 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted6 4.3 -7.3 -7.5 -6.4 -8.7 -12.0 -11.3 -9.4 -9.8 -9.1 -5.9 -7.8 tl Gross due from balances 48.1 54.6 53.9 53.5 55.3 57.2 55.7 56.1 55.9 55.7 53.9 55.2 12 Gross due to balances 52.4 47.3 46.4 47.1 46.6 45.2 44.4 46.7 46.1 46.7 48.0 47.4 Security RP borrowings 13 Seasonally adjusted' 59.0 65.0 69.0 71.5 71.0 72.2 74.3 74.7 79.3 84.6 81.4 75.5 14 Not seasonally adjusted 59.2 66.0 69.8 72.1 71.1 72.2 73.7 73.9 76.3 82.6 81.5 76.0 U.S. Treasury demand balances8 15 Seasonally adjusted 12.2 11.1 14.4 10.6 11.9 15.7 8.8 12.5 13.5 11.3 13.0 24.1 16 Not seasonally adjusted 11.1 12.3 16.4 7.8 10.8 16.3 10.2 13.2 14.2 12.5 13.2 21.9 Time deposits, $100,000 or more9 17 Seasonally adjusted 324.1 366.7 376.6 360.6 347.3 319.2 303.0 296.0 296.2 287.0 287.5 285.7 18 Not seasonally adjusted 330.4 361.8 364.9 361.7 353.9 325.4 310.5 300.7 293.0 285.0 283.5 281.4 IBF ADJUSTMENTS FOR SELECTED ITEMS10 19 22.4 32.8 33.1 33.3 33.9 34.2 2222200000 11111.....77777 22222.....44444 22222.....44444 22222.....44444 22222.....44444 22222.....44444 2222211111 Item 5 2222200000.....77777 3333300000.....44444 3333300000.....77777 3333300000.....99999 3333311111.....55555 3333311111.....88888 2222222222 Item 7 33333.....11111 55555.....44444 55555.....44444 55555.....55555 55555.....88888 55555.....88888 2222233333 Item 10 1111177777.....66666 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Julyr Aug. DOMESTICALLY CHARTERED COMMERCIAL BANKS' 1 Loans and securities, excluding interbank 1,343.0 1,347.0 1,370.4 1,370.8 1,373.7 1,392.2 1,404.0 11,,441111..99 11,,443355..22 11,,443377..55 11,,445566..99 2 Loans, excluding interbank 988.5 990.4 1,000.8 993.3 991.4 1,001.7 1,004.6 1,006.9 1,025.1 1,028.5 1,042.8 3 Commercial and industrial 355.8 355.4 357.9 355.6 356.3 358.6 358.5 357.3 360.6 361.7 363.6 4 Other 632.7 635.0 642.9 638.2 635.8 643.7 646.8 650.8 664.5 666.9 679.2 5 U.S. Treasury securities 119.4 122.2 129.0 136.0 141.4 150.6 155.5 160.9 166.0 165.1 167.5 6 Other securities 235.1 234.4 240.5 241.6 240.8 239.9 243.9 244.1 244.1 243.9 246.7 7 Cash assets, total 162.1 169.7 184.4 167.8 184.7 168.9 170.1 164.5 176.9 168.7 176.9 8 Currency and coin 20.5 19.0 23.0 20.4 20.3 19.9 20.4 20.3 21.3 20.7 21.0 9 Reserves with Federal Reserve Banks 23.5 22.0 25.4 23.9 25.3 20.5 23.9 22.4 18.8 20.6 22.5 10 Balances with depository institutions . 61.3 64.6 67.6 67.7 71.6 67.1 66.1 65.6 69.7 67.1 69.0 11 Cash items in process of collection ... 56.8 64.1 68.4 55.9 67.5 61.5 59.6 56.3 67.1 60.3 64.4 12 Other assets2 237.0 241.8 265.3 260.1 263.6 257.9 252.4 248.3 253.2 254.5 257.3 13 Total assets/total liabilities and capital . .. 1,742.1 1,758.6 1,820.1 1,798.7 1,822.0 1,818.9 1,826.3 1,824.9 1,865.2 1,860.7 1,891.1 14 Deposits 1,300.2 1,316.9 1,361.8 1,340.6 1,368.3 1,374.2 1,368.0 1,370.8 1,402.7 1,396.5 1,420.2 15 Demand 326.5 338.1 363.9 324.0 337.9 333.4 329.2 324.5 344.4 334.2 344.6 16 Savings 238.2 244.9 296.4 361.5 395.2 419.2 426.9 440.2 445.3 447.5 449.0 17 Time 735.4 733.9 701.5 655.1 635.2 621.6 611.9 606.1 613.1 614.8 626.5 18 Borrowings 203.7 198.1 215.1 221.6 218.0 211.3 224.0 214.1 221.2 217.5 217.2 19 Other liabilities 106.2 109.3 109.2 106.4 106.0 103.5 102.3 104.7 104.3 105.5 107.6 20 Residual (assets less liabilities) 132.0 134.3 133.9 130.1 129.6 130.0 132.0 135.1 137.0 141.1 146.1 MEMO: 21 U.S. Treasury note balances included in borrowing 11.7 2.4 10.7 17.1 7.0 9.6 17.8 2.7 19.3 1199..33 14.8 22 Number of banks 14,797 14,782 14,787 14,780 14,812 14,819 14,823 14,817 14,826 14,785 14,795 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and securities, excluding interbank 1,401.7 1,413.7 1,429.8 1,427.5 1,429.8 1,451.3 1,461.0 1,467.6 1,491.6 1,494.2 1,515.4 24 Loans, excluding interbank 1,042.3 1,052.1 1,054.9 1,044.8 1,042.3 1,054.5 1,055.2 1,055.9 1,074.6 1,078.3 1,094.3 25 Commercial and industrial 393.7 398.9 396.5 393.0 392.9 396.5 394.1 392.3 395.9 398.3 401.2 26 Other 648.6 653.2 658.4 652.4 650.0 658.6 661.8 664.7 678.7 680.0 693.0 27 U.S. Treasury securities 122.7 125.7 132.8 139.5 145.1 155.3 160.3 166.1 171.3 170.3 172.7 28 Other securities 236.7 235.9 242.1 243.2 242.4 241.5 245.5 245.8 245.7 245.6 248.4 29 Cash assets, total 178.7 181.2 200.7 183.7 200.5 185.5 186.3 180.3 193.5 185.2 193.3 30 Currency and coin 20.5 19.0 23.0 20.4 20.3 19.9 20.4 20.3 21.3 20.7 21.1 31 Reserves with Federal Reserve Banks 25.0 23.4 26.8 25.3 26.7 22.0 25.4 23.8 20.0 21.9 24.0 32 Balances with depository institutions . 75.3 74.4 81.4 81.1 84.9 81.0 79.8 78.9 84.0 81.2 82.8 33 Cash items in process of collection ... 57.8 64.3 69.4 56.9 68.6 62.6 60.7 57.3 68.2 61.4 65.4 34 Other assets2 313.9 323.3 341.7 333.2 330.2 325.4 317.7 309.5 318.1 318.7 324.8 35 Total assets/total liabilities and capital .. . 1,894.2 1,918.2 1,972.2 1,944.4 1,960.4 1,962.2 1,964.9 1,957.5 2,003.2 1,998.1 2,033.3 36 Deposits 1,345.2 1,358.1 1,409.7 1,385.4 1,412.6 1,419.5 1,411.0 1,413.1 1,443.8 1,438.1 1,461.5 37 Demand 338.9 344.9 376.2 335.9 350.2 345.7 341.1 336.4 356.4 346.4 356.6 38 Savings 238.5 245.1 296.7 361.9 395.6 419.7 427.3 440.7 445.7 448.0 449.5 39 Time 767.8 768.0 736.7 687.7 666.8 654.1 642.6 636.0 641.6 643.8 655.4 40 Borrowings 268.3 267.0 278.3 283.5 276.0 269.9 281.3 269.5 278.2 277.9 280.5 41 Other liabilities 146.9 156.6 148.4 143.5 140.4 141.1 138.7 137.9 142.3 139.1 143.4 42 Residual (assets less liabilities) 133.9 136.6 135.8 132.0 131.5 131.9 133.9 137.0 138.9 143.0 148.0 MEMO: 43 U.S. Treasury note balances included in borrowing 11.7 2.4 10.7 17.1 7.0 9.6 17.8 2.7 19.3 19.3 14.8 44 Number of banks 15,330 15,318 15,329 15,332 15,366 15,376 15,390 15,385 15,396 15,359 15,370 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 • September 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 Account July 6 July 13 July 20 July 27 Aug. 3p Aug. IOp Aug. 17 p Aug. 24? Aug. 31 p 1 Cash items in process of collection 60,182 49,529 47,364 48,072 50,268 43,096 47,945 43,897 50,410 2 Demand deposits due from banks in the United States. 9,555 6,913 7,381 6,721 7,424 6,645 7,347 6,749 7,759 3 All other cash and due from depository institutions ... 33,325 36,621 37,502 33,829 34,492 35,051 32,649 32,718 35,480 4 Total loans and securities 681,634 667,246 667,159 664,448 672,113 666,202 668,119 666,443 670,961 Securities 5 U.S. Treasury securities 55,742 51,489 51,907 50,126 51,445 50,218 52,075 51,615 51,461 6 Trading account 11,831 9,243 10,104 9,095 9,837 8,240 9,736 9,229 8,303 7 Investment account, by maturity 43,911 42,246 41,804 41,031 41,608 41,978 42,338 42,386 43,158 8 One year or less 14,510 13,957 13,548 13,660 14,342 14,263 13,591 13,684 14,058 9 Over one through five years 26,567 25,596 25,684 24,767 24,597 25,116 26,288 26,235 26,647 10 Over five years 2,835 2,693 2,571 2,605 2,670 2,599 2,460 2,466 2,453 11 Other securities 83,206 81,992 82,743 83,373 84,470 84,171 85,038 84,111 84,415 12 Trading account 6,224 4,922 5,490 5,450 6,416 6,045 7,059 6,322 6,629 13 Investment account 76,982 77,070 77,252 77,923 78,054 78,125 77,979 77,788 77,786 14 U.S. government agencies 16,472 16,392 16,335 16,407 16,563 16,512 16,468 16,551 16,388 15 States and political subdivisions, by maturity 57,084 57,206 57,359 58,008 57,988 58,094 58,007 57,644 57,774 16 One year or less 7,314 6,800 7,020 7,701 7,826 7,861 7,900 7,569 7,640 17 Over one year 49,769 50,407 50,339 50,307 50,162 50,233 50,108 50,075 50,134 18 Other bonds, corporate stocks and securities 3,426 3,471 3,559 3,509 3,503 3,519 3,503 3,593 3,624 Loans 19 Federal funds sold1 51,318 45,706 44,489 43,785 44,049 41,543 39,756 40,406 41,304 20 To commercial banks 40,173 35,461 33,870 32,764 33,276 30,869 28,356 29,611 30,606 21 To nonbank brokers and dealers in securities 7,633 7,002 7,198 7,735 7,526 7,584 8,618 8,048 7,750 22 To others 3,512 3,242 3,421 3,286 3,246 3,090 2,782 2,747 2,947 23 Other loans, gross 504,707 501,385 501,360 500,543 505,539 503,678 504,657 503,724 507,252 24 Commercial and industrial 214,896 214,140 214.254 213,215 215,402 214,677 213,829 213,860 214,047 25 Bankers acceptances and commercial paper 4,561 4,493 4,065 3,749 4,372 3,867 3,749 3,977 3,948 26 All other 210,335 209,648 210,189 209,465 211,030 210,810 210,081 209,883 210,100 27 U.S. addressees 203,488 202,661 203,355 202,553 204,094 203,929 203,186 203,006 203,1% 28 Non-U.S. addressees 6,847 6,987 6,834 6,912 6,936 6,881 6,895 6,877 6,903 29 Real estate 135,013 135,291 135,553 135,665 135,575 135,984 136,485 136,641 137,081 30 To individuals for personal expenditures 76,647 76,720 76,987 77,296 77,522 77,775 78,098 78,454 79,015 To financial institutions 31 Commercial banks in the United States 7,527 7,328 7,080 6,919 7,491 7,178 7,302 7,551 7,490 32 Banks in foreign countries 7,995 7,677 7,975 7,883 8,272 7,972 7,759 7,672 8,304 33 Sales finance, personal finance companies, etc. ... 9,478 9,529 9,006 9,091 9,420 9,194 9,079 9,094 9,287 34 Other financial institutions 16,009 15,997 15,886 15,738 16,283 16,375 16,283 15,956 15,959 35 To nonbank brokers and dealers in securities 9,450 8,595 8,524 8,652 8,842 8,143 9,234 7,990 9,406 36 To others for purchasing and carrying securities2 ... 3,090 3,095 3,106 3,074 3,098 3,106 3,0% 3,074 3,184 37 To finance agricultural production 7,006 6,997 7,047 7,060 7,094 7,140 7,122 7,085 7,123 38 All other 17,596 16,014 15,943 15,949 16,540 16,132 16,370 16,344 16,356 39 LESS: Unearned income 5,081 5,091 5,070 5,064 5,040 5,067 5,042 5,059 5,035 40 Loan loss reserve 8,259 8,235 8,271 8,316 8,350 8,340 8,365 8,353 8,436 41 Other loans, net 491,368 488,059 488,020 487,163 492,149 490,270 491,250 490,312 493,782 42 Lease financing receivables 10,855 10,922 10,854 10,859 10,889 10,882 10,939 10,944 10,948 43 All other assets 148,646 143,731 141,273 139,393 143,024 143,216 142,686 139,668 140,340 44 Total assets 944,197 914,964 911,534 903,322 918,210 905,092 909,686 900,420 915,898 Deposits 45 Demand deposits 195,302 177,072 174,431 173,307 179,472 169,249 174,494 166,493 177,346 46 Mutual savings banks 838 643 743 616 796 705 742 614 711 47 Individuals, partnerships, and corporations 145,468 136,631 132,158 132,724 134,492 129,368 134,201 126,858 134,801 48 States and political subdivisions 5,218 4,654 4,697 4,932 5,309 4,350 4,844 4,541 4,881 49 U.S. government 3,312 987 2,770 2,037 3,221 1,878 1,091 2,078 1,015 50 Commercial banks in the United States 23,977 18,717 19,635 17,987 20,146 18,361 19,409 18,050 20,029 51 Banks in foreign countries 6,568 6,218 5,853 5,810 5,923 6,085 5,692 5,748 5,972 52 Foreign governments and official institutions 1,097 1,046 905 873 1,065 996 992 1,109 1,361 53 Certified and officers' checks 8,823 8,176 7,669 8,328 8,520 7,506 7,522 7,495 8,575 54 Time and savings deposits 416,123 414,990 414,876 414,301 416,182 416,206 417,620 418,146 419,145 55 Savings 176,158 174,859 174,340 173,397 175,006 174,248 173,423 172,444 172,770 56 Individuals and nonprofit organizations 157,789 156,368 155,894 154,837 156,366 155,484 154,597 153,499 153,823 57 Partnerships and corporations operated for profit . 17,220 17,325 17,343 17,445 17,483 17,584 17,649 17,771 17,785 58 Domestic governmental units 1,101 1,113 1,048 1,045 1,100 1,125 1,120 1,115 1,116 59 All other 47 52 55 71 57 54 56 58 45 60 Time 239,965 240,130 240,536 240,904 241,176 241,957 244,197 245,702 246,375 61 Individuals, partnerships, and corporations 212,372 212,534 213,192 213,830 214,371 214,615 216,703 217,944 218,794 62 States and political subdivisions 16,815 16,852 16,784 16,671 16,597 16,955 17,033 17,270 17,074 63 U.S. government 324 330 328 331 327 314 314 318 320 64 Commercial banks in the United States 7,145 7,104 6,935 6,814 6,694 6,844 6,833 6,822 6,831 65 Foreign governments, official institutions, and banks 3,309 3,310 3,298 3,258 3,187 3,230 3,314 3,346 3,355 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 823 2,158 1,532 330 1,430 164 410 381 2,409 67 Treasury tax-and-loan notes 13,580 14,274 13,202 14,024 10,753 8,797 9,9% 11,012 11,066 68 All other liabilities for borrowed money3 173,370 161,942 162,166 155,858 162,672 162,728 157,094 155,594 157,198 69 Other liabilities and subordinated notes and debentures 84,090 83,514 84,496 84,870 86,598 86,666 88,980 87,672 87,357 70 Total liabilities 883,289 853,949 850,704 842,690 857,108 843,811 848,594 839,298 854,521 71 Residual (total assets minus total liabilities)4 60,908 61,014 60,830 60,631 61,102 61,281 61,092 61,122 61,378 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 Si Billion or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1983 Account July 6 July 13 July 20 July 27 Aug. 3P Aug. 10P Aug. 17 P Aug. 24P Aug. 3IP 1 Cash items in process of collection 56,418 46,668 44,601 45,382 47,265 40,574 45,214 41,189 47,494 ? Demand deposits due from banks in the United States.. 8,796 6,301 6,803 6,180 6,864 6,110 6,763 6,265 7,173 3 All other cash and due from depository institutions .... 30,342 33,671 34,468 30,737 31,467 31,927 29,550 29,569 32,471 4 Total loans and securities 633,720 619,640 619,670 617,299 624,738 618,770 620,570 619,022 623,126 Securities U.S. Treasury securities 51,010 46,802 47,127 45,385 46,729 45,433 47,286 46,746 46,678 6 Trading account 11,655 9,138 9,901 8,960 9,751 8,153 9,609 9,076 8,221 7 Investment account, by maturity 39,355 37,665 37,226 36,426 36,978 37,280 37,677 37,670 38,457 8 One year or less 12,701 12,139 11,741 11,820 12,536 12,454 11,948 12,057 12,379 9 Over one through five years 24,071 23,089 23,170 22,254 22,027 22,483 23,523 23,400 23,907 10 Over five years 2,584 2,436 2,315 2,352 2,415 2,343 2,206 2,213 2,171 11 Other securities 75,534 74,312 74,936 75,624 76,776 76,523 77,237 76,411 76.677 N Trading account 6,073 4,740 5,219 5,252 6,276 5,939 6,830 6,224 6,500 13 Investment account 69,461 69,571 69,718 70,372 70,500 70,584 70,407 70,186 70,177 14 U.S. government agencies 14,838 14,808 14,719 14,790 14,950 14,905 14,846 14,920 14,779 15 States and political subdivisions, by maturity 51,566 51,676 51,819 52,460 52,434 52,540 52,428 52,064 52,168 16 One year or less 6,658 6,146 6,378 7,060 7,171 7,206 7,235 6,908 6,956 17 Over one year 44,908 45,530 45,442 45,399 45,263 45,334 45,194 45,156 45,212 18 Other bonds, corporate stocks and securities 3,057 3,087 3,179 3,122 3,116 3,139 3,132 3,202 3,230 Loans 19 Federal funds sold1 46,280 40,963 40,252 39,846 39,940 37,470 35,795 36,651 37,305 70 To commercial banks 35,663 31,254 30,234 29,362 29,620 27,222 24,890 26,328 27,110 71 To nonbank brokers and dealers in securities 7,134 6,503 6,628 7,235 7,098 7,189 8,148 7,601 7,274 77 To others 3,482 3,206 3,389 3,249 3,222 3,060 2,757 2,722 2,921 23 Other loans, gross 473,215 469,862 469,661 468,797 473,660 471,728 472,631 471,594 474,908 74 Commercial and industrial 203,097 202,347 202,433 201,349 203,476 202,783 202,015 202,018 202,122 7.5 Bankers acceptances and commercial paper 4,253 4,189 3,759 3,475 4,077 3,579 3,474 3,735 3,722 76 All other 198,845 198,158 198,674 197,874 199,399 199,204 198,540 198,283 198,400 77 U.S. addressees 192,115 191,289 191,959 191,083 192,597 192,444 191,765 191,531 191,619 78 Non-U.S. addressees 6,729 6,869 6,714 6,792 6,802 6,760 6,776 6,752 6,781 79 Real estate 126,674 126,926 127,174 127,253 127,172 127,502 127,926 128,095 128,506 30 To individuals for personal expenditures 68,008 68,089 68,292 68,601 68,775 68,987 69,272 69,575 70,068 To financial institutions 31 Commercial banks in the United States 7,142 6,873 6,538 6,424 7,031 6,767 6,831 7,071 7,016 32 Banks in foreign countries 7,910 7,584 7,899 7,809 8,201 7,860 7,678 7,583 8,217 33 Sales finance, personal finance companies, etc 9,303 9,353 8,825 8,915 9,213 8,994 8,870 8,880 9,066 34 Other financial institutions 15,289 15,266 15,167 15,014 15,522 15,630 15,544 15,213 15,217 35 To nonbank brokers and dealers in securities 9,386 8,539 8,480 8,580 8,777 8,060 9,161 7,916 9,335 36 To others for purchasing and carrying securities2 .... 2,833 2,841 2,849 2,816 2,839 2,842 2,834 2,812 2,920 37 To finance agricultural production 6,798 6,787 6,834 6,844 6,881 6,919 6,902 6,870 6,908 38 All other 16,773 15,257 15,169 15,190 15,773 15,383 15,597 15,560 15,533 39 LESS; Unearned income 4,488 4,495 4,471 4,469 4,453 4,478 4,449 4,463 4,446 40 Loan loss reserve 7,830 7,805 7,835 7,885 7,915 7.906 7,930 7,917 7,996 41 Other loans, net 460,896 457,563 457,355 456,443 461,292 459,344 460,252 459,214 462,467 47. Lease financing receivables 10,448 10,515 10,447 10,452 10,480 10,471 10,527 10,529 10,531 43 All other assets 144,389 139,547 137,021 135,203 138,668 138,850 138,497 135,598 135,955 44 Total assets 884,113 856,343 853,012 845,254 859,482 846,702 851,120 842,173 856,750 Deposits 45 Demand deposits 181,331 164,274 161,895 161,062 166,591 157,001 162,353 154,490 164,635 46 Mutual savings banks 791 613 715 584 759 680 713 589 683 47 Individuals, partnerships, and corporations 134,726 126,380 122,280 123,008 124,476 119,634 124,576 117,423 124,762 48 States and political subdivisions 4,743 4,165 4,162 4,428 4,788 3,850 4,346 3,940 4,344 49 U.S. government 3,048 823 2,557 1,877 2,961 1,717 943 1,906 904 50 Commercial banks in the United States 21,888 17,138 18,084 16,468 18,408 16,840 17,899 16,568 18,349 51 Banks in foreign countries 6,524 6,174 5,803 5,764 5,876 6,044 5,643 5,703 5,926 52 Foreign governments and official institutions 1,095 1,043 904 868 1,064 990 989 1,108 1,358 53 Certified and officers' checks 8,516 7,939 7,389 8,064 8,258 7,245 7,243 7,254 8,309 54 Time and savings deposits 386,054 384,935 384,831 384,160 385,938 385,898 387,158 387,646 388,639 55 Savings 163,024 161,826 161,330 160,410 161,909 161,174 160,390 159,537 159,808 56 Individuals and nonprofit organizations 146,202 144,910 144,455 143,455 144,878 144,035 143,191 142,214 142,468 57 Partnerships and corporations operated for profit .. 15,790 15,868 15,881 15,947 15,987 16,073 16,138 16,280 16,289 58 Domestic governmental units 986 996 939 937 987 1,013 1,006 986 991 59 All other 45 51 54 70 57 53 56 58 59 60 Time 223,031 223,110 223,501 223,750 224,029 224,724 226,768 228,109 228,831 61 Individuals, partnerships, and corporations 197,453 197,525 198,121 198,606 199,125 199,299 201,170 202,298 203,178 67 States and political subdivisions 15,073 15,108 15,068 14,982 14,918 15,248 15,360 15,564 15,378 63 U.S. government 223 228 226 230 242 240 242 246 247 64 Commercial banks in the United States 6,973 6,938 6,788 6,673 6,557 6,707 6,681 6,655 6,672 65 Foreign governments, official institutions, and banks 3,309 3,310 3,298 3,258 3,187 3,230 3,314 3,346 3,355 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 823 2,158 1,532 330 1,425 154 410 356 2,399 67 Treasury tax-and-loan notes 12,832 13,482 12,406 13,214 10,128 8,255 9,351 10,295 10,368 68 All other liabilities for borrowed money3 163,933 152,748 152,821 146,820 153,548 153,282 147,711 146,434 147,926 69 Other liabilities and subordinated notes and debentures 82,056 81,562 82,494 82,847 84,617 84,706 86,867 85,640 85,263 70 Total liabilities 827,031 799,160 795,978 788,433 802,248 789,295 793,851 784,861 799,231 71 Residual (total assets minus total liabilities)4 57,082 57,183 57,033 56,821 57,233 57,407 57,270 57,312 57,519 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis or 2. Other than financial institutions and brokers and dealers. for other analytic uses. 3. Includes federal funds purchased and securities sold under agreement to 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 DomesticN onfinancial Statistics • September 1983 t.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt July 6 July 13 July 20 July 27 Aug. 3 p Aug. 10'' Aug. 17? Aug. 24p Aug. 3 If 1 Cash items in process of collection 18,333 17,270 15,348 17,454 15,948 14,191 15,675 14,689 17,099 2 Demand deposits due from banks in the United States.. 1,327 1,015 1,204 1,045 1,194 1,163 1,149 1,133 1,020 3 All other cash and due from depository institutions .... 5,679 8,965 7,594 5,212 7,014 8,569 5,397 4,683 6,303 4 Total loans and securities1 147,043 143,658 142,440 141,740 144,824 143,069 143,861 142,695 144,843 Securities 6 7 Investment account, by maturity 9,109 8,265 8,268 7,601 8,108 8,253 8,438 8,289 8,843 8 One year or less 2,083 1,851 1,871 1,859 2,452 2,481 2,464 2,458 2,396 9 Over one through five years 6,362 5,800 5,829 5,178 4,851 5,034 5,517 5,373 5,986 10 Over five years 664 614 568 564 805 738 457 458 461 11 1? 13 Investment account 14,210 14,317 14,498 14,844 14,889 15,046 14,997 14,820 14,833 14 U.S. government agencies 1,527 1,532 1,542 1,550 1,547 1,544 1,533 1,586 1,592 15 States and political subdivisions, by maturity 11,876 11,978 12,125 12,496 12,554 12,713 12,657 12,428 12,435 16 One year or less 1,548 1,530 1,607 1,942 2,010 2,103 2,045 1,835 1,821 17 Over one year 10,328 10,448 10,518 10,554 10,544 10,610 10,612 10,593 10,614 18 Other bonds, corporate stocks and securities 807 806 830 798 788 789 807 806 806 Loans 19 Federal funds sold3 12,247 11,355 10,521 10,590 10,437 10,217 10,700 10,457 10,672 20 To commercial banks 6,740 6,378 5,506 5,354 4,965 4,688 5,418 5,300 5,467 21 To nonbank brokers and dealers in securities 3,942 3,445 3,241 3,745 3,815 4,011 3,856 3,796 3,670 22 To others 1,565 1,532 1,774 1,491 1,657 1,517 1,425 1,362 1,535 23 Other loans, gross 115,421 113,668 113,102 112,706 115,396 113,566 113,728 113,134 114,536 24 Commercial and industrial 58,458 58,760 58,494 58,670 59,499 58,955 58,270 58,584 58,029 25 Bankers' acceptances and commercial paper 1,076 1,324 1,026 942 1,171 1,040 975 1,195 950 26 All other 57,382 57,436 57,468 57,728 58,327 57,915 57,294 57,390 57,080 27 U.S. addressees 55,791 55,784 55,898 56,130 56,772 56,333 55,725 55,791 55,474 28 Non-U.S. addressees 1,591 1,653 1,570 1,598 1,555 1,582 1,569 1,598 1,606 29 Real estate 19,505 19,546 19,546 19,506 19,530 19,598 19,938 19,998 20,131 30 To individuals for personal expenditures 11,822 11,810 11,830 11,885 11,964 12,038 12,069 12,096 1122,,118822 To financial institutions 31 Commercial banks in the United States 2,235 1,752 1,320 1,509 1,787 1,625 1,582 1,720 1,906 32 Banks in foreign countries 2,906 2,528 2,715 2,541 2,909 2,617 2,510 2,516 2,737 33 Sales finance, personal finance companies, etc 3,800 3,859 3,598 3,710 3,903 3,811 3,692 3,663 3,820 34 Other financial institutions 4,364 4,347 4,431 4,356 4,390 4,510 4,430 4,321 4,373 35 To nonbank brokers and dealers in securities 6,008 5,389 5,767 5,427 5,892 4,984 5,781 44,,886611 6,144 36 To others for purchasing and carrying securities4 .... 735 708 695 642 644 654 649 660088 635 37 To finance agricultural production 458 434 438 432 432 432 419 393 422 38 All other 5,130 4,535 4,267 4,027 4,445 4,342 4,388 4,374 4,156 39 LESS: Unearned income 1,408 1,420 1,426 1,430 1,417 1,438 1,422 1,430 1,419 40 Loan loss reserve 2,536 2,527 2,523 2,572 2,588 2,576 2,579 2,575 2,622 41 Other loans, net 111,477 109,721 109,153 108,704 111,390 109,552 109,726 109,129 110,494 42 Lease financing receivables 1,989 2,077 2,076 2,075 2,075 2,072 2,078 2,080 2,074 43 All other assets5 66,675 59,994 58,933 57,663 61,434 59,905 60,793 59,450 59,108 44 Total assets 241,046 232,979 227,595 225,190 232,488 228,968 228,952 224,730 230,447 Deposits 45 Demand deposits 53,159 48,321 46,574 48,140 47,866 44,647 46,803 45,131 48,048 46 Mutual savings banks 395 278 396 289 364 340 373 286 332 47 Individuals, partnerships, and corporations 35,168 32,390 31,063 33,028 31,959 29,448 32,299 30,490 32,065 48 States and political subdivisions 883 815 832 757 710 598 692 559 586 49 U.S. government 859 171 625 554 695 539 226 506 172 50 Commercial banks in the United States 5,676 4,806 5,022 4,052 4,333 4,722 4,635 4,346 5,320 51 Banks in foreign countries 5,184 4,891 4,264 4,391 4,610 4,723 4,334 4,492 4,654 52 Foreign governments and official institutions 849 845 697 65*7 841 786 794 912 1,117 53 Certified and officers' checks 4,146 4,126 3,674 4,411 4,354 3,491 3,450 3,540 3,802 54 Time and savings deposits 72,886 73,124 73,223 72,640 73,102 73,127 73,507 73,027 73,285 55 Savings 29,682 29,511 29,466 29,232 29,281 29,114 28,940 28,847 28,872 56 Individuals and nonprofit organizations 27,042 26,860 26,790 26,607 26,636 26,468 26,300 26,189 26,214 57 Partnerships and corporations operated for profit .. 2,415 2,417 2,441 2,377 2,394 2,414 2,420 2,442 2,448 58 Domestic governmental units 199 205 203 197 212 198 184 177 171 59 All other 26 28 32 50 39 34 35 38 39 60 Time 43,204 43,613 43,758 43,408 43,821 44,013 44,567 44,180 44,413 61 Individuals, partnerships, and corporations 36,802 37,210 37,445 37,197 37,508 37,590 38,279 37,979 38,262 62 States and political subdivisions 1,903 1,962 2,047 2,059 2,199 2,210 2,233 2,235 2,0% 63 U.S. government 15 22 21 23 22 22 22 24 24 64 Commercial banks in the United States 3,074 3,020 2,840 2,728 2,740 2,758 22,,558833 22,,551100 22,,558844 65 Foreign governments, official institutions, and banks 1,410 1,400 1,404 1,401 1,352 11,,443322 11,,445500 11,,443333 11,,444477 Liabilities for borrowed money 66 925 450 1 050 67 Treasury tax-and-loan notes 3,003 3,343 3,063 3,335 2,317 2,119 2,432 2,755 2,789 68 All other liabilities for borrowed money6 58,105 53,542 51,073 47,396 54,112 54,074 50,296 48,718 49,473 69 Other liabilities and subordinated notes and debentures . 34,291 34,067 34,016 34,240 35,027 35,278 36,163 35,327 36,022 70 Total liabilities 221,444 213,322 207,949 205,751 212,874 209,245 209,201 204,958 210,668 71 Residual (total assets minus total liabilities)7 19,601 19,658 19,646 19,438 19,614 19,723 19,751 19,772 19,779 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 July 6 July 13 July 20 July 27 Aug. 3p Aug. I OP Aug. 17? Aug. 24P Aug. 31 p BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross) and securities adjusted1 647,274 637,782 639,549 638,145 644,735 641,562 645,868 642,693 646,337 2 Total loans (gross) adjusted1 508,326 504,301 504,899 504,645 508,820 507,173 508,755 506,967 510,461 3 Demand deposits adjusted2 107,831 107,839 104,661 105,211 105,836 105,914 106,049 102,468 105,892 4 Time deposits in accounts of $100,000 or more 143,350 142,918 142,834 142,708 142,375 142,637 144,303 145,418 145,594 5 Negotiable CDs 95,739 94,537 93,977 93,781 93,172 93,199 94,528 95,185 95,401 6 Other time deposits 47,611 48,381 48,856 48,927 49,204 49,438 49,775 50,233 50,193 7 Loans sold outright to affiliates3 2,634 2,666 2,682 2,636 2,623 2,611 2,533 2,579 2,529 8 Commercial and industrial 2,066 2,080 2,098 2,033 2,024 2,010 1,934 2,022 1,993 9 Other 568 586 584 602 599 601 598 558 536 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and securities adjusted1 603,233 593,813 595,204 593,867 600,455 597,166 601,228 598,003 601,442 11 Total loans (gross) adjusted1 476,689 472,699 473,140 472,857 476,950 475,210 476,705 474,846 478,087 12 Demand deposits adjusted2 99,977 99,644 96,653 97,335 97,958 97,869 98,297 94,827 97,888 13 Time deposits in accounts of $100,000 or more 135,111 134,657 134,572 134,369 134,087 134,291 135,795 136,797 137,033 14 Negotiable CDs 91,101 89,910 89,359 89,111 88,550 88,530 89,755 90,336 90,626 15 Other time deposits 44,010 44,747 45,213 45,258 45,537 45,761 46,040 46,460 46,407 16 Loans sold outright to affiliates3 2,580 2,615 2,633 2,587 2,574 2,562 2,484 2,531 2,480 17 Commercial and industrial 2,023 2,037 2,057 1,991 1,981 1,967 1,890 1,978 1,949 18 Other 557 578 576 596 593 595 594 553 530 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted14 142,012 139,474 139,564 138,879 142,078 140,770 140,862 139,681 141,511 20 Total loans (gross) adjusted1 118,693 116,892 116,798 116,433 119,081 117,470 117,427 116,571 117,835 21 Demand deposits adjusted2 28,291 26,074 25,578 26,079 26,890 25,195 26,267 25,590 25,457 22 Time deposits in accounts of $100,000 or more 32,683 32,939 33,034 32,583 32,757 32,964 33,417 33,008 33,144 23 Negotiable CDs 22,356 22,207 22,095 21,785 21,910 22,072 22,600 22,207 22,468 24 Other time deposits 10,328 10,731 10,939 10,799 10,846 10,892 10,818 10,801 10,676 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 DomesticN onfinancial Statistics • September 1983 1.30 LARGE WEEKLY REPORTING BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt July 6 July 13 July 20 July 27 Aug. 3P Aug. 10P Aug. 17? Aug. 24" Aug. 31p 1 Cash and due from depository institutions. 7,536 7,517 7,340 7,399 7,874 7,366 7,283 6,846 7,323 2 Total loans and securities 41,422 40,350 41,797 40,668 40,852 41,225 40,804 41,616 42,942 3 U.S. Treasury securities 4,489 4,407 4,396 4,369 4,100 4,060 4,255 4,215 4,378 4 Other securities 865 858 858 927 847 848 862 862 901 5 Federal funds sold1 2,629 2,028 2,413 1,850 2,174 2,534 1,876 2,503 2,711 6 To commercial banks in United States .. 2,386 1,916 2,293 1,774 2,049 2,258 1,728 2,396 2,520 7 To others 243 113 120 76 125 276 148 106 190 8 Other loans, gross 33,439 33,057 34,130 33,522 33,731 33,783 33,811 34,036 34,952 9 Commercial and industrial 17,264 17,382 18,323 18,132 18,116 18,034 1188,,335588 18,365 1188,,773344 10 Bankers acceptances and commercial paper 2,817 2,856 2,981 3,020 3,037 3,163 3,099 3,013 3,004 11 All other 14,447 14,526 15,342 15,112 15,079 14,871 15,259 15,352 15,731 12 U.S. addressees 12,732 12,792 13,591 13,327 13,343 13,123 13,450 13,542 13,938 13 Non-U.S. addressees 1,715 1,734 1,751 1,785 1,736 1,748 1,809 1,810 1,793 14 To financial institutions 12,140 11,846 11,707 11,485 11,462 11,782 11,472 11,636 12,080 15 Commercial banks in United States... 9,470 9,400 9,370 9,213 9,141 9,522 9,174 9,294 9,689 16 Banks in foreign countries 2,010 1,870 1,740 1,686 1,732 1,659 1,685 1,740 1,802 17 Nonbank financial institutions 660 576 597 586 590 600 613 602 589 18 For purchasing and carrying securities .. 249 220 342 185 401 298 365 406 466 19 All other 3,786 3,609 3,757 3,720 3,752 3,670 3,615 3,629 3,672 20 Other assets (claims on nonrelated parties) 10,111 10,237 11,009 10,803 11,130 11,250 11,304 11,218 11,436 2.1 Net due from related institutions 12,530 11,826 12,142 12,469 11,543 11,097 10,968 11,882 12,615 22 Total assets 71,599 69,930 72,289 71,339 71,400 70,938 70,360 71,562 74,317 23 Deposits or credit balances2 20,428 20,165 20,195 20,599 21,089 20,876 20,326 20,643 21,197 24 Credit balances 203 158 155 168 195 166 190 147 188 25 Demand deposits 2,034 1,875 1,934 1,864 1,937 1,816 1,770 1,742 1,976 26 Individuals, partnerships, and corporations 985 892 933 942 844 785 834 790 809 27 Other 1,049 983 1,001 922 1,093 1,030 936 952 1,167 28 Total time and savings 18,190 18,131 18,106 18,567 18,957 18,894 18,366 18,754 19,033 29 Individuals, partnerships, and corporations 15,431 15,382 15,088 15,752 16,095 16,146 15,647 15,950 16,381 30 Other 2,759 2,750 3,017 2,816 2,862 2,749 2,719 2,804 2,652 31 Borrowings3 32,293 30,256 32,947 32,826 32,599 32,179 32,414 32,731 33,801 32 Federal funds purchased4 12,194 9,793 11,018 11,018 9,716 9,141 9,318 9,312 10,243 33 From commercial banks in United States 10,520 7,954 9,239 9,100 7,790 7,260 7,510 7,281 8,142 34 From others 1,674 1,838 1,779 1,918 1,925 1,880 1,808 2,032 2,101 3S Other liabilities for borrowed money.... 20,099 20,463 21,929 21,808 22,883 23,038 23,095 23,419 23,558 36 To commercial banks in United States 17,211 17,696 18,137 17,750 18,695 19,062 19,168 19,480 19,618 37 To others 2,888 2,767 3,792 4,058 4,188 3,976 3,927 3,939 3,940 38 Other liabilities to nonrelated parties 11,203 11,180 11,400 11,447 11,730 11,889 12,083 12,035 12,191 39 Net due to related institutions 7,674 8,329 7,747 6,467 5,982 5,994 5,536 6,153 7,128 40 Total liabilities 71,599 69,930 72,289 71,339 71,400 70,938 70,360 71,562 74,317 MEMO 41 Total loans (gross) and securities adjusted* 29,566 29,035 30,134 29,680 29,663 29,445 29,903 29,926 30,732 42 Total loans (gross) adjusted5 24,212 23,770 24,880 24,384 24,716 24,537 24,785 24,849 25,453 1. Includes securities purchased under agreements to resell. 4. Includes securities sold under agreements to repurchase. 2. Balances due to other than directly related institutions. 5. Excludes loans and federal funds transactions with commercial banks in 3. Borrowings from other than directly related institutions. United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

IPC Demand Deposits A25 1.31 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 1982 1983 11997788 1199779922 11998800 11998811 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar. June 1 All holders—Individuals, partnerships, and corporations 294.6 302.2 315.5 288.9 268.9 271.5 276.7 295.4 283.5 289.5 7 Financial business 27.8 27.1 29.8 28.0 27.8 28.6 31.9 35.5 34.0 35.1 3 Nonfinancial business 152.7 157.7 162.3 154.8 138.7 141.4 142.9 151.7 144.4 147.7 4 Consumer 97.4 99.2 102.4 86.6 84.6 83.7 83.3 88.1 85.5 86.9 5 Foreign 2.7 3.1 3.3 2.9 3.1 2.9 2.9 3.0 3.2 3.0 6 Other 14.1 15.1 17.2 16.7 14.6 15.0 15.7 17.1 16.4 16.8 Weekly reporting banks 1982 1983 11997788 1199779944 11998800 11998811 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar. June 7 Ail holders—Individuals, partnerships, and corporations 147.0 139.3 147.4 137.5 126.8 127.9 132.1 144.0 140.7 141.9 8 Financial business 19.8 20.1 21.8 21.0 20.2 20.2 23.4 26.7 25.2 26.3 9 Nonfinancial business 79.0 74.1 78.3 75.2 67.1 67.7 68.7 74.2 72.7 73.1 10 Consumer 38.2 34.3 35.6 30.4 29.2 29.7 29.6 31.9 31.2 30.4 11 Foreign 2.5 3.0 3.1 2.8 2.9 2.8 2.7 2.9 3.0 2.9 12 Other 7.5 7.8 8.6 8.0 7.3 7.5 7.7 8.4 8.6 9.3 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 DomesticN onfinancial Statistics • September 1983 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1983 IInnssttrruummeenntt DD 1199 ee 77 cc 88 .. 1 D 1 D 99 ee 77 cc 99 .. '' DD 1199 ee 88 cc 00 .. DD 1199 ee 88 cc 11 .. DD 11 ee 9988 cc.. 22 22 Feb. Mar. Apr. May June July Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 83,438 112,803 124,374 165,455 166,208 168,562 167,665 170,659 169,503 170,716 172,150 FFiinnaanncciiaall ccoommppaanniieess33 DDeeaalleerr--ppllaacceedd ppaappeerr44 22 TToottaall 12,181 17,359 19,599 29,904 34,067 37.593 36,255 37,481 38,645 39,850 39,027 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 3,521 2,784 3,561 6,045 2,516 2,604 2,030 1,950 1,954 2,192 2,367 DDiirreeccttllyy ppllaacceedd ppaappeerr55 44 TToottaall 51,647 64,757 67,854 81,715 84,183 84,932 85,773 87,831 87,238 87,749 89,585 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 12,314 17,598 22,382 26,914 32,034 31,661 32,951 32,495 32,943 33,420 33,613 66 NNoonnffiinnaanncciiaall ccoommppaanniieess66 19,610 30,687 36,921 53,836 47,958 46,037 45,637 45,347 43,620 43,117 43,538 Bankers dollar acceptances (not seasonally adjusted) 7 Total 33,700 45,321 54,744 69,226 79,543 73,706 70,843 70,389 68,797 70,907 Holder 8 Accepting banks 8,579 9,865 10,564 10,857 10,910 9,567 10,518 9,494 8,223 9,147 9 Own bills 7,653 8,327 8,963 9,743 9,471 8,258 9,083 7,951 7,497 7,998 10 Bills bought 927 1,538 1,601 1,115 1,439 1,308 1,435 1,543 726 1,148 Federal Reserve Banks 11 Own account 587 704 776 195 1,480 0 0 0 0 0 n.a. 12 Foreign correspondents 664 1,382 1,791 1,442 949 1,003 758 778 788 792 13 Others 23,870 33,370 41,614 56,926 66,204 63,136 59,568 60,118 59,786 60,968 Basis 14 Imports into United States 8,574 10,270 11,776 14,765 17,683 14,976 14,217 14,418 13,858 14,324 15 Exports from United States 7,586 9,640 12,712 15,400 16,328 17,633 16,826 17,124 16,074 16,356 16 All other 17,540 25,411 30,257 39,061 45,532 41,097 39,800 38,848 38,865 40,226 1. A change in reporting instructions results in offsetting shifts in the dealer- financing; factoring, finance leasing, and other business lending; insurance placed and directly placed financial company paper in October 1979. underwriting; and other investment activities. 2. Effective December 1, 1982, there was a break in the commercial paper 4. Includes all financial company paper sold by dealers in the open market. series. The key changes in the content of the data involved additions to the 5. As reported by financial companies that place their paper directly with reporting panel, the exclusion of broker or dealer placed borrowings under any investors. master note agreements from the reported data, and the reclassification of a large 6. Includes public utilities and firms engaged primarily in such activities as portion of bank-related paper from dealer-placed to directly placed. communications, construction, manufacturing, mining, wholesale and retail trade, 3. Institutions engaged primarily in activities such as, but not limited to, transportation, and services. commercial, savings, and mortgage banking; sales, personal, and mortgage 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective date Effective Date Average Month rate 1981—No v. 24 16.00 -Aug. 23 13.50 1982—Jan 15.75 1983—Jan Dec. 1 15.75 Oct. 7 13.00 Feb 16.56 Feb 14 12.00 Mar ... 16.50 Mar Nov. 22 11.50 Apr 16.50 16.50 1982—Feb. 18 17.00 June 16.50 June 23 16.50 July 16.26 July July 20 16.00 Aug 14.39 Aug 29 15.50 Sept 13.50 Aug. 2 15.00 1983--Jan. 11 11.00 Oct 12.52 1 1 6 8 1 1 4 4 . . 5 0 0 0 A Fe u b g . . 2 8 8 1101..0500 N De o c v . ...' 1 1 1 1 . . 8 5 5 0 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, May 2-6, 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) 37,412,526 1,048,071 837,428 1,106,290 2,183,547 1,037,743 31,199,446 ? Number of loans 200,209 139,045 25,153 17,287 12,630 1,571 4,522 3 Weighted-average maturity (months) 1.4 4.0 1.2 4.5 5.0 3.3 .8 4 With fixed rates .9 3.4 3.7 3.3 4.7 2.0 .5 5 With floating rates 2.3 5.5 5.3 5.9 5.1 4.1 1.6 6 Weighted-average interest rate (percent per annum) .. 10.31 13.86 13.68 12.62 11.87 11.34 9.87 7 Interquartile range1 9.55-10.52 12.68-14.49 12.34-14.11 11.57-13.80 11.02-12.47 10.92-12.10 9.52-9.96 8 With fixed rates 10.21 14.39 14.36 13.29 11.86 10.72 9.80 9 With floating rates 10.46 12.96 12.55 12.00 11.87 11.58 10.00 Percentage of amount of loans 10 With floating rate 40.1 36.6 37.6 5511..99 63.5 7711..66 3377..22 11 Made under commitment 65.6 39.5 37.9 61.4 54.2 70.5 68.0 12 With no stated maturity 13.4 12.7 18.1 16.9 29.7 32.2 11.4 13 With one-day maturity 37.3 .1 .0 .1 .4 2.1 44.6 1-99 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 14 Amount of loans (thousands of dollars) 4,113,314 775,809 418,758 178,643 2,740,104 15 Number of loans 38,455 35,820 1,990 262 383 16 Weighted-average maturity (months) 55.6 33.4 35.6 44.5 65.6 17 With fixed rates 43.5 36.9 21.9 58.2 54.7 18 With floating rates 61.5 26.3 46.4 42.0 68.8 19 Weighted-average interest rate (percent per annum) .. 11.46 14.52 12.87 11.92 10.35 70 Interquartile range1 9.71-12.19 12.13-14.93 11.73-14.00 11.19-12.68 9.63-11.02 ?1 With fixed rates 12.31 15.02 13.78 11.96 9.61 22 With floating rates 11.04 13.51 12.15 11.92 10.56 Percentage of amount of loans 73 With floating rate 67.2 33.0 5566..11 8844..77 7777..44 24 Made under commitment 71.8 18.3 42.7 75.9 91.2 11--2244 2255--4499 5500--9999 CCOONNSSTTRRUUCCTTIIOONN AANNDD LLAANNDD DDEEVVEELLOOPPMMEENNTT LLOOAANNSS 75 Amount of loans (thousands of dollars) 1,917,014 199,628 77,218 47,315 438,205 1,154,649 76 Number of loans 25,727 21,047 2,219 716 1,460 284 27 Weighted-average maturity (months) 8.3 5.8 7.1 13.8 7.6 8.9 78 With fixed rates 5.2 5.7 6.8 8.6 6.1 4.4 29 With floating rates 12.2 5.9 8.0 14.8 11.3 12.9 30 Weighted-average interest rate (percent per annum) .. 11.72 14.44 13.99 12.91 12.08 10.91 31 Interquartile range1 10.18-12.68 13.50-14.74 13.52-14.76 12.46-13.31 11.84-12.12 9.55-12.41 3? With fixed rates 11.53 14.97 14.42 13.16 11.93 10.01 33 With floating rates 11.93 13.34 12.93 12.87 12.46 11.59 Percentage of amount of loans 34 With floating rate 47.7 3322..22 28.8 8855..00 29.5 5566..99 3S Secured by real estate 56.7 75.3 94.1 84.2 93.5 36.0 36 Made under commitment 48.3 41.5 61.9 64.8 22.4 57.7 37 With no stated maturity 6.9 10.7 2.8 7.0 2.5 8.2 38 With one-day maturity 18.0 .0 .0 .4 .0 29.9 Type of construction 39 1- to 4-family 7.3 20.2 17.2 46.1 8.3 2.4 40 Multifamily 5.5 14.6 6.1 17.2 7.4 2.6 41 Nonresidential 87.2 65.1 76.7 36.7 84.3 95.0 AAllll ssiizzeess 1-9 10-24 25-49 50-99 100-249 250 and over LLOOAANNSS TTOO FFAARRMMEERRSS 4? Amount of loans (thousands of dollars) 1,698,648 195,436 204,859 168,982 254,228 240,631 634,513 43 Number of loans 79,848 54,748 13,889 5.146 3,625 1,724 717 44 Weighted-average maturity (months) 10.6 6.8 8.8 8.0 7.7 29.4 7.0 45 Weighted-average interest rate (percent per annum) .. 13.26 14.01 13.80 13.60 14.23 13.68 12.21 46 Interquartile range1 12.13-14.21 13.43-14.56 13.29-14.18 12.96-14.20 13.42-15.19 13.00-14.45 11.83-12.55 By purpose of loan 47 Feeder livestock 13.35 1144..2266 13.90 13.44 14.36 13.71 12.17 48 Other livestock 13.00 14.01 12.96 13.75 13.26 (2) (2) 49 Other current operating expenses 13.25 13.98 13.59 13.80 13.54 13.76 12.35 50 Farm machinery and equipment 14.78 13.90 15.01 13.64 15.68 14.16 (2) 51 12.62 14.19 14.08 12.97 13.75 13.74 12.03 1. Interest rate range that covers the middle 50 percent of the total dollar NOTE. For more detail, see the Board's E.2 (111) statistical release, amount of loans made. 2. Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • September 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 May June July Aug. Aug. 5 Aug. 12 Aug. 19 Aug. 26 Sept. 2 MONEY MARKET RATES 1 Federal funds1-2 13.36 16.38 12.26 8.63 8.98 9.37 9.56 9.59 9.66 9.67 9.41 9.44 Commercial paper3'4 2 1-month 12.76 15.69 11.83 8.36 8.97 9.15 9.41 9.42 9.59 9.46 9.20 9.34 3 3-month 12.66 15.32 11.89 8.33 9.00 9.25 9.54 9.61 9.75 9.55 9.30 9.46 4 6-month 12.29 14.76 11.89 8.31 9.03 9.36 9.68 9.79 9.90 9.67 9.39 9.61 Finance paper, directly placed3-4 5 1-month 12.44 15.30 11.64 8.28 8.86 9.13 9.35 9.36 9.50 9.39 9.16 9.34 6 3-month 11.49 14.08 11.23 8.19 8.81 9.11 9.41 9.39 9.55 9.48 9.25 9.34 7 6-month 11.28 13.73 11.20 8.15 8.80 9.10 9.42 9.44 9.53 9.48 9.30 9.32 Bankers acceptances4-5 8 3-month 12.72 15.32 11.89 8.36 9.04 9.33 9.59 9.65 9.83 9.57 9.36 9.52 9 6-month 12.25 14.66 11.83 8.33 9.06 9.47 9.71 9.88 9.97 9.62 9.41 9.68 Certificates of deposit, secondary market6 10 1-month 12.91 15.91 12.04 8.44 9.06 9.30 9.52 9.54 9.65 9.59 9.34 9.46 11 3-month 13.07 15.91 12.27 8.49 9.20 9.50 9.77 9.82 9.99 9.78 9.49 9.73 12 6-month 12.99 15.77 12.57 8.62 9.45 9.91 10.17 10.35 10.43 10.10 9.82 10.14 13 Eurodollar deposits, 3-month2 14.00 16.79 13.12 8.96 9.67 10.00 10.27 10.30 10.50 10.30 10.04 10.13 U.S. Treasury bills4 Secondary market7 14 3-month 11.43 14.03 10.61 8.19 8.79 9.08 9.34 9.41 9.52 9.35 9.15 9.26 15 6-month 11.37 13.80 11.07 8.22 8.89 9.26 9.51 9.58 9.67 9.45 9.32 9.52 16 1-year 10.89 13.14 11.07 8.23 8.87 9.34 9.60 9.71 9.80 9.50 9.37 9.64 Auction average8 17 3-month 11.506 14.029 10.686 8.19 8.82 9.12 9.39 9.36 9.57 9.43 9.18 9.28 18 6-month 11.374 13.776 11.084 8.20 8.89 9.29 9.53 9.56 9.70 9.55 9.29 9.53 1199 1100..774488 1133..115599 1111..009999 88..0055 88..8800 99..3366 99..7777 99..7777 CAPITAL MARKET RATES U.S. Treasury notes and bonds9 Constant maturities10 20 1-vear 12.05 14.78 12.27 8.90 9.66 10.20 10.53 10.63 10.77 10.43 10.27 10.57 71 11.05 10.65 22 2-vear 11.77 14.56 12.80 9.49 10.18 10.69 11.07 11.18 11.34 10.93 10.80 11.14 73 2-w-year12 11.40 11.00 24 3-year 11.55 14.44 12.92 9.66 10.32 10.90 11.30 11.38 11.58 11.17 11.03 11.41 25 5-year 11.48 14.24 13.01 10.03 10.63 11.21 11.63 11.74 11.89 11.49 11.34 11.73 26 7-year 11.43 14.06 13.06 10.30 10.83 11.35 11.77 11.88 12.06 11.61 11.47 11.88 27 10-year 11.46 13.91 13.00 10.38 10.85 11.38 11.85 11.95 12.10 11.71 11.58 11.94 28 20-year 11.39 13.72 12.92 10.67 11.12 11.59 11.96 12.10 12.18 11.81 11.71 12.09 29 30-year 11.30 13.44 12.76 10.53 10.93 11.40 11.82 11.93 12.05 11.69 11.55 11.92 Composite13 30 Over 10 years (long-term) 10.81 12.87 12.23 10.21 10.64 11.10 11.42 11.52 11.65 11.28 11.18 11.52 State and local notes and bonds Moody's series14 31 Aaa 7.85 10.43 10.88 8.39 8.76 8.70 9.04 9.00 9.15 9.00 9.00 9.10 32 Baa 9.01 11.76 12.48 9.74 10.21 10.06 10.25 10.20 10.40 10.20 10.20 10.25 33 Bond Buyer series15 8.59 11.33 11.66 9.11 9.52 9.53 9.72 9.74 9.85 9.70 9.59 9.75 Corporate bonds Seasoned issues16 34 All industries 12.75 15.06 14.94 12.30 12.54 12.73 13.01 13.06 13.16 12.97 12.87 13.03 35 Aaa 11.94 14.17 13.79 11.46 11.74 12.15 12.51 12.62 12.71 12.40 12.32 12.54 36 Aa 12.50 14.75 14.41 11.95 12.15 12.39 12.72 12.77 12.88 12.68 12.54 12.76 37 A 12.89 15.29 15.43 12.68 12.88 12.99 13.17 13.18 13.30 13.16 13.07 13.16 38 Baa 13.67 16.04 16.11 13.09 13.37 13.39 13.64 13.64 13.75 13.63 13.55 13.65 Aaa utility bonds17 39 12.74 15.56 14.41 11.32 11.87 12.32 12.25 12.25 40 Recently offered issues 12.70 15.56 14.45 11.37 11.81 12.39 12.75 12.86 12.90 12.68 12.53 12.80 MEMO: Dividend/price ratio18 41 Preferred stocks 10.60 12.36 12.53 10.65 10.81 11.06 11.07 11.04 11.22 10.93 11.09 11.05 42 Common stocks 5.26 5.20 5.81 4.27 4.26 4.21 4.35 4.34 4.39 4.29 4.40 4.32 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 Apr. 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-'/z-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 Mar. 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-Vi-year small saver certificates. (See table 1.16.) Before November 1979, maturities for data shown ire 30-59 days, 90-119 days, 13. Averages of yields (to maturity or call) for all outstanding bonds neither due and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150— por callable in less than 10 years, including several very low yielding "flower" 179 days for finance paper. 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 aFcRtivAelSy 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 Dec. Jan. Feb. Mar. Apr. May June July Aug. 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 80.30 83.25 84.74 87.50 90.61 94.61 96.43 96.74 93.96 2 Industrial 78.64 85.44 78.18 92.00 95.37 97.26 100.61 104.46 109.43 112.52 113.21 109.50 3 Transportation 60.52 72.61 60.41 73.40 75.65 79.44 83.28 85.26 89.07 92.22 92.91 88.06 4 Utility 37.35 38.90 39.75 42.93 45.59 45.92 45.89 46.22 47.62 46.76 46.61 46.94 5 Finance 64.28 73.52 71.99 86.22 85.66 86.57 93.22 99.07 102.45 101.22 99.60 95.76 6 Standard & Poor's Corporation (1941-43 = 10)1 118.71 128.05 119.71 139.37 145.13 146.80 151.88 157.71 164.10 166.39 166.96 162.42 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 150.47 171.79 141.31 166.68 180.47 187.17 191.88 202.51 223.97 237.51 244.03 230.10 Volume of trading (thousands of shares) 8 New York Stock Exchange 44,867 46,967 64,617 76,463 88,463 85,026 82,694 89,627 93,016 89,729 79,508 74,191 9 American Stock Exchange 6,377 5,346 5,283 7,475 9,220 8,256 7,354 8,576 12,260 10,874 8,199 6,329 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers-dealers3 14,721 14,411 13,325 13,325 13,370 13,985 14,483 15,590 16,713 18,292 19,218 t | 11 Margin stock4 14,500 14,150 12,980 12,980 13,070 13,680 14,170 15,260 16,370 17,930 18,870 12 Convertible bonds 219 259 344 344 299 304 312 329 342 361 347 n.a. 13 Subscription issues 2 2 1 1 1 1 1 1 1 1 1 Free credit balances at brokers5 14 Margin-account 2,105 3,515 5,735 5,735 6,257 6,195 6,370 6,090 6,090 6,150 6,275 15 Cash-account 6,070 7,150 8,390 8,390 8,225 7,955 7,965' 7,970 8,310 8,590 8,145 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)6 17 Under 40 14.0 37.0 21.0 21.0 18.0 18.0 17.0 14.0 14.0 13.0 21.0 18 40-49 30.0 24.0 24.0 24.0 23.0 20.0 21.0 19.0 19.0 21.0 28.0 19 50-59 25.0 17.0 24.0 24.0 25.0 27.0 25.0 28.0 30.0 29.0 21.0 n.a. 2 2 0 1 6 7 0 0 - -7 6 9 9 1 9 4 . . 0 0 1 6 0 . . 0 0 1 9 4 . . 0 0 1 9 4 . . 0 0 1 9 6 . . 0 0 1 1 0 6 . . 0 0 1 1 0 8 . . 0 0 1 19 0 . . 0 0 1 1 6 1 . . 0 0 1 1 2 6 . . 0 0 1 9 4 . . 0 0 11 22 80 or more 8.0 6.0 8.0 8.0 9.0 9.0 9.0 9.0 9.0 9.0 7.0 1 Special miscellaneous-account balances at brokers (end of period) t 23 Total balances (millions of dollars)7 21,690 25,870 35,598 35,598 43,838 43,006 43,472 44,999 45,465 47,100 50,580 1 Distribution by equity status (percent) 24 Net credit status 47.8 58.0 62.0 62.0 65.0 66.0 62.0 64.0 62.0 62.0 62.0 nt.a. Debt status, equity of 2 2 5 6 6 L 0 e s p s e r th c a e n n t 6 o 0 r p m er o c r e e nt 4 7 4 . . 7 4 3111..00 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 3 6 2 . . 0 0 3 5 3 . . 0 0 3 6 1 . . 0 0 Margin requirements (percent of market value and effective date)8 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 6. 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 7. 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. Beginning July 5, 1983, the American Stock Exchange rebased its index other collateral in the customer's margin account or deposits of cash (usually sales effectively cutting previous readings in half. proceeds) occur. 3. Margin credit includes all credit extended to purchase or caiTy stocks or 8. Regulations G, T, and U of the Federal Reserve Board of Governors, related equity instruments and secured at least in part by stock. Credit extended is prescribed in accordance with the Securities Exchange Act of 1934, limit the end-of-month data for member firms of the New York Stock Exhange. amount of credit to purchase and carry margin stocks that may be extended on In addition to assigning a current loan value to margin stock generally, securities as collateral by prescribing a maximum loan value, which is a specified Regulations T and U permit special loan values for convertible bonds and stock percentage of the market value of the collateral at the time the credit is extended. acquired through exercise of subscription rights. Margin requirements are the difference between the market value (100 percent) 4. A distribution of this total by equity class is shown on lines 17-22. and the maximum loan value. The term "margin stocks" is defined in the 5. Free credit balances are in accounts with no unfulfilled commitments to the corresponding regulation. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • September 1983 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1982 1983 AAccccoouunntt 11998800 11998811 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayr June July Savings and loan associations 630,712 664,167 692,549 697,189 706,045 714,676 772,352 723,616 727,659 726,331 729,168 736,755 2 Mortgages 503,192 518,547 489,923 488,614 482,234 481,470 481,090 475,688 473,813 470,999 471,853 476,158 3 Cash and investment securities1 57,928 63,123 75,638 78,122 84,767 90,662 94,080 96,649 98,933 103,050 100,816 101,447 4 Other 69,592 82,497 126,988 130,453 139,044 142,544 147,182 151,279 152,913 152,282 156,499 159,150 5 Liabilities and net worth 630,712 664,167 692,549 697,189 706,045 714,676 772,352 723,616 727,659 726,331 729,168 736,755 6 Savings capital 511,636 525,061 547,112 548,439 566,189 582,918 591,913 597,112 600,508 598,168 601,425 606,487 7 Borrowed money 64,586 88,782 100,881 102,948 97,979 88,925 86,544 84,884 83,552 82,548 84,135 84,332 8 FHLBB 47,045 62,794 65,015 64,202 63,861 60,415 58,841 56,859 55,845 54,274 54,101 53,409 9 Other 17,541 25,988 35,866 38,746 34,118 28,510 27,703 28,025 27,707 28,274 30,034 30,923 10 Loans in process 8,767 6,385 8,484 8,967 9,934 10,453 11,039 12,245 13,447 14,504 15,935 16,925 11 Other 12,394 15,544 20,018 21,048 15,720 16,658 17,524 14,767 16,181 18,276 15,505 17,827 12 Net worth2 33,329 28,395 24,538 24,754 26,157 26,175 26,371 26,853 27,418 27,339 28,103 28,109 13 MEMO: Mortgage loan commitments outstanding3 16,102 15,225 18,407 19,682 18,054 19,453 22,051 24,885 27,912 30,060 30,576 32,074 Mutual savings banks4 14 Assets 171,564 175,728 172,908 172,287 174,197 174,726 176,378 178,814 178,826 180,071 181,975 Loans 15 Mortgage 99,865 99,997 94,261 94,017 94,091 93,944 93,607 93,822 93,311 93,587 94,000 16 Other 11,733 14,753 17,035 16,702 16,957 17,420 18,211 17,837 18,353 17,893 17,438 Securities 17 U.S. government5 8,949 9,810 9,219 9,456 9,743 10,248 11,081 12,187 12,364 13,110 13,572 18 State and local government 2,390 2,288 2,505 2,496 2,470 2,446 2,440 2,403 2,311 2,260 2,257 19 Corporate and other6 39,282 37,791 35,599 35,753 36,161 36,430 36,905 37,827 38,342 39,142 40,206 20 Cash 4,334 5,442 6,749 6,291 6,919 6,275 6,104 6,548 6,039 5,960 6,224 21 Other assets 5,011 5,649 7,540 7,572 7,855 7,963 8,031 8,189 8,107 8,118 8,276 n a. 22 Liabilities 171,564 175,728 172,908 172,287 174,197 174,726 176,378 178,814 178,826 180,071 181,975 23 Deposits 154,805 155,110 152,210 151,304 155,196 157,113 159,162 161,489 161,262 162,287 163,990 24 Regular7 151,416 153,003 149,928 149,167 152,777 154,876 156,915 159,088 158,760 159,840 161,573 25 Ordinary savings 53,971 49,425 48,520 49,208 46,862 41,850 41,165 41,183 40,379 40,467 40,451 26 Time 97,445 103,578 101,408 99,959 96,369 90,184 87,377 86,276 84,593 83,506 84,705 27 Other 2,086 2,108 2,283 2,137 2,419 2,237 2,247 2,401 2,502 2,447 2,417 28 Other liabilities 6,695 10,632 11,556 11,893 8,336 7,722 7,542 7,395 7,631 3,114 7,754 29 General reserve accounts 11,368 9,986 9,141 9,089 9,235 9,196 9,197 9,342 9,352 9,377 9,575 30 MEMO: Mortgage loan commitments outstanding® 1,476 1,293 1,281 1,400 1,285 1,253 1,295 1,639 1,860 1,860 1,884 Life insurance companies 31 Assets 479,210 525,803 571,902 578,200 584,311 589,490 595,959 602,770 609,298 591,375 628,224 Securities 32 Government 21,378 25,209 31,791 32,682 34,558 35,567 36,946 38,469 39,210 42,522 43,348 33 United States9. 5,345 8,167 13,538 14,370 16,072 16,731 17,877 19,213 19,213 20,705 21,141 34 State and local 6,701 7,151 7,871 7,935 8,094 8,225 8,333 8,368 8,524 10,053 10,355 35 Foreign10 9,332 9,891 10,382 10,377 10,392 10,611 10,736 10,888 10,940 11,764 11,852 n .a. 36 Business 238,113 255,769 279,918 283,650 283,799 290,178 293,427 296,223 300,558 309,254 313,510 37 Bonds 190,747 208,098 226,879 229,101 228,220 233,380 235,376 236,420 238,689 245,833 248,248 38 Stocks 47,366 47,670 53,039 54,549 55,579 56,798 58,051 59,803 61,869 63,421 65,262 39 Mortgages 131,030 137,747 140,678 140,956 141,919 142,277 142,683 143,031 143,011 143,758 144,725 40 Real estate 15,063 18,278 20,293 20,480 21,019 20,922 21,014 21,175 21,352 21,344 21,629 41 Policy loans 41,411 48,706 52,751 52,916 53,114 53,239 53,383 53,560 53,715 53,804 53,914 42 Other assets 31,702 40,094 46,471 47,516 49,902 47,307 48,506 50,322 51,452 49,889 51,098 Credit unions" 43 Total assets/liabilities and capital. 71,709 77,682 68,157 68,876 69,572 69,639 71,190 73,630 74,607 76,605 44 Federal 39,801 42,382 44,388 44,986 45,483 45,418 46,449 48,057 48,628 49,869 45 State 31,908 35,300 23,769 23,890 24,089 24,221 24,741 25,573 25,979 26,736 46 Loans outstanding 47,774 50,448 42,971 42,995 43,223 42,942 42,785 43,081 43,509 44,012 47 Federal 25,627 27,458 27,648 27,728 27,941 27,724 27,592 27,733 27,995 28,336 48 State 22,147 22,990 15,323 15,267 15,282 15,218 15,193 15,348 15,514 15,676 49 Savings 64,399 68,871 61,829 62,673 62,977 63,226 64,587 67,164 68,404 70,080 50 Federal (shares) 36,348 37,574 40,535 41,076 41,341 41,441 42,404 43,890 44,741 45,782 51 State (shares and deposits). 28,051 31,297 21,294 21,597 21,636 21,785 22,183 23,274 23,663 24,298 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 1982 1983 1983 11998800 11998811 11998822 HI H2 HI May June July U.S. budget 1 Receipts' 517,112 599,272 617,766 322,478 286,338 306,331 33,755 66,517 43,948 2 Outlays1-2 576,675 657,204 728,375 348,678 390,846 396,477 63,040 63,116 65,360 3 Surplus, or deficit (-) -59,563 -57,932 -110,609 -26,200 -104,508 -90,146 -29,285 3,401 -21,412 4 Trust funds 8,801 6,817 5,456 -17,690 -6,576 22,680 24,923 3,722 -5,592 5 Federal funds3 -68,364 -64,749 -116,065 -43,889 -97,934 -112,822 -54,208 -318 -15,820 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt ((--)))) 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -14,549 -20,769 -14,142 -7,942 -4,923 -5,418 -1,433 -1,128 -1,326 77 OOtthheerr44 303 -236 -3,190 227 -2,267 -528 242 -889 33 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -73,808 -78,936 -127,940 -33,914 -111,699 -96,094 -30,476 1,382 -22,705 Source or financing 9 Borrowing from the public 70,515 79,329 134,993 41,728 119,609 102,538 18,497 25,719 11,877 10 Cash and monetary assets (decrease, or increase (-)) -355 -1,878 -11,911 -408 -9,057 -9,664 19,189 -23,605 6,317 11 Other6 3,648 1,485 4,858 -7,405 1,146 3,222 -7,209 -3,496 4,511 MEMO: 12 Treasury operating balance (level, end of period) 20,990 18,670 29,164 10,999 19,773 100,243 5,233 27,997 18,469 13 Federal Reserve Banks 4,102 3,520 10,975 4,099 5,033 19,442 4,372 8,764 4,189 14 Tax and loan accounts 16,888 15,150 18,189 6,900 14,740 72,037 861 19,233 14,280 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 June 1982, data include only federal or federally insured state credit 2. Includes net undistributed income, which is accrued by most, but not all, unions serving natural persons. 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 federally insured state credit unions serving natural persons. 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 • September 1983 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1982 1983 1983 111999888000 111999888111 111999888222 HI H2 HI May June July RECEIPTS 1 A11 sources1 517,112 599,272 617,766 322,478 286,338 306,331 33,755 66,517 43,948 2 Individual income taxes, net 244,069 285,917 297,744 150,565 145,676 144,550 6,384 32,773 21,938 3 Withheld 223,763 256,332 267,513 133,575 131,567 135,531 22,205 23,641 21,437 4 Presidential Election Campaign Fund ... 39 41 39 34 5 30 6 3 3 5 Nonwithheld 63,746 76,844 84,691 66,174 20,040 63,014 1,131 11,131 2,160 6 Refunds 43,479 47,299 54,498 49,217 5,938 54,024 16,958 2,003 1,662 Corporation income taxes 7 Gross receipts 72,380 73,733 65,991 37,836 25,661 33,522 1,903 11,680 2,562 8 Refunds 7,780 12,596 16,784 8,028 11,467 13,809 2,205 11,,772244 11,,770066 9 Social insurance taxes and contributions, net 157,803 182,720 201,498 108,079 94,278 110,521 22,330 17,903 1155,,331177 10 Payroll employment taxes and contributions2 133,025 156,932 172,744 88,795 85,063 90,912 15,680 16,366 1144,,110088 11 Self-employment taxes and contributions3 5,723 6,041 7,941 7,357 177 6,427 418 901 -632 12 Unemployment insurance 15,336 15,763 16,600 9,809 6,857 11,146 5,875 285 1,454 13 Other net receipts14 3,719 3,984 4,212 2,119 2,181 2,196 357 351 387 14 Excise taxes 24,329 40,839 36,311 17,525 16,556 16,904 2,991 3,100<- 3,369 15 Customs deposits 7,174 8,083 8,854 4,310 4,299 4,010 670 857 772 16 Estate and gift taxes 6,389 6,787 7,991 4,208 3,445 2,883 493 530 559 17 Miscellaneous receipts5 12,748 13,790 16,161 7,984 7,891 7,751 1,190 1,400 1,137 OUTLAYS 18 All types1 576,675 657,204 728,424 348,683 390,847 396,477 63,040 63,116 65,360 19 National defense 135,856 159,765 187,418 93,154 100,419 105,072 17,309 18,337 17,394 20 International affairs 10,733 11,130 9,982 5,183 4,406 4,705 438 817 1,038 21 General science, space, and technology ... 5,722 6,359 7,070 3,370 3,903 3,486 589 667 687 22 Energy 6,313 10,277 4,674 2,946 2,059 2,073 375 372 243 23 Natural resources and environment 13,812 13,525 12,934 5,636 6,940 5,892 905 1,033 955 24 Agriculture 4,762 5,572 14,875 7,087 13,260 10,154 558 483 685 25 Commerce and housing credit 7,788 3,946 3,865 1,408 2,244 2,164 136 545 665 26 Transportation 21,120 23,381 20,560 9,915 10,686 9,918 1,531 1,755 1,875 27 Community and regional development .... 10,068 9,394 7,165 3,055 4,186 3,124 469 757 514 28 Education, training, employment, social services 30,767 31,402 26,300 12,607 12,187 12,801 2,113 2,171 1,943 29 Health1 55,220 65,982 74,017 37,219 39,073 41,206 6,966 7,020 6,672 30 Income security 193,100 225,101 248,343 112,782 133,779 143,001 22,304 25,381 22,536 31 Veterans benefits and services 21,183 22,988 23,955 10,865 13,241 11,334 882 1,903 2,024 32 Administration of justice 4,570 4,696 4,671 2,334 2,373 2,522 378 379 453 33 General government 4,505 4,614 4,726 2,400 2,322 2,434 1,002 160 -93 34 General-purpose fiscal assistance 8,584 6,856 6,393 3,325 3,152 3,124 287 277 1,178 35 Net interest® 52,458 68,726 84,697 41,883 44,948 50,383 8,215 12,939 7,606 36 Undistributed offsetting receipts7 -9,887 -16,509 -13,270 -6,490 -8,333 -16,912 -1,414 -11,881 -1,017 1. Effective Feb. 8, 1982, supplemental medical insurance premiums and 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous voluntary hospital insurance premiums, previously included in other insurance receipts. receipts, have been reclassified as offsetting receipts in the health function. 6. Net interest function includes interest received by trust funds. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. 7. Consists of rents and royalties on the outer continental shelf and U.S. 3. Old-age, disability, and hospital insurance. government contributions for employee retirement. 4. Federal employee retirement contributions and civil service retirement and disability fund. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Government" and the Budget of the U.S. Government, Fiscal Year 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1981 1982 1983 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 977.4 1,003.9 1,034.7 1,066.4 1,084.7 1,147.0 1,201.9 1,249.3 1,324.3 2 Public debt securities 971.2 997.9 1,028.7 1,061.3 1,079.6 1,142.0 1,197.1 1,244.5 1,319.6 3 Held by public 771.3 789.8 825.5 858.9 867.9 925.6 987.7 1,043.3 1,090.3 4 Held by agencies 199.9 208.1 203.2 202.4 211.7 216.4 209.4 201.2 229.3 5 Agency securities 6.2 6.1 6.0 5.1 5.0 5.0 4.8 4.8 4.7 6 Held by public 4.7 4.6 4.6 3.9 3.9 3.7 3.7 3.7 3.6 7 Held by agencies 1.5 1.5 1.4 1.2 1.2R 1.2R 1.2R 1.1 1.1 8 Debt subject to statutory limit 972.2 998.8 1,029.7 1,062.2 1,080.5 1,142.9 1,197.9 1,245.3 1,320.4 9 Public debt securities 970.6 997.2 1,028.1 1,060.7 1,079.0 1,141.4 1,196.5 1,243.9 1,319.0 10 Other debt1 1.6 1.6 1.6 1.5 1.5 1.5 1.4 1.4 1.4 11 MEMO: Statutory debt limit 985.0 999.8 1,079.8 1,079.8 1,143.1 1,143.1 1,290.2 1,290.2 1,389.0 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 Apr. May June July Aug. 1 Total gross public debt 845.1 930.2 1,028.7 1,197.1 1,247.9 1,291.4 1,319.6 1,326.9 1,348.4 By type 2 Interest-bearing debt 844.0 928.9 1,027.3 1,195.5 1,242.1 1,289.9 1,318.1 1,320.7' 1,346.9 3 Marketable 530.7 623.2 720.3 881.5 935.5 957.3 978.9 985.7 1,010.4 4 Bills 172.6 216.1 245.0 311.8 325.9 325.2 334.3 337.6 340.4 5 Notes 283.4 321.6 375.3 465.0 494.9 513.6 527.1 527.2 544.2 6 Bonds 74.7 85.4 99.9 104.6 114.6 118.5 117.5 120.9 125.8 7 Nonmarketable1 313.2 305.7 307.0 314.0 306.6 332.6 339.2 335.0 336.5 8 2.2 9 State and local government series 24.6 23.8 23.0 25.7 29.6 29.6 33.1 33.2 33.9 10 Foreign issues3 28.8 24.0 19.0 14.7 12.0 11.1 11.4 11.2 11.1 11 Government 23.6 17.6 14.9 13.0 10.7 10.5 10.8 11.2 11.1 1? Public 5.3 6.4 4.1 1.7 1.3 .6 .6 .0 .0 13 Savings bonds and notes 79.9 72.5 68.1 68.0 68.8 69.2 69.4 69.7 70.0 14 Government account series4 177.5 185.1 196.7 205.4 197.6 222.4 225.0 220.6 221.4 15 Non-interest-bearing debt 1.2 1.3 1.4 1.6 5.9 1.5 1.5 6.2 1.5 By holder5 16 U.S. government agencies and trust funds 187.1 192.5 203.3 209.4 229.3 17 Federal Reserve Banks 117.5 121.3 131.0 139.3 141.7 18 Private investors 540.5 616.4 694.5 848.4 950.5 19 Commercial banks 96.4 116.0 109.4 131.4 171.6 20 Mutual savings banks 4.7 5.4 5.2 n.a. A 21 Insurance companies 16.7 20.1 19.1 38.7 I 22 Other companies 22.9 25.7 37.8 n.a. n.a. n a. n.a. n.a. n.a. 23 State and local governments 69.9 78.8 85.6 113.4 T Individuals 24 Savings bonds 79.9 72.5 68.0 68.3 69.7 25 Other securities 36.2 56.7 75.6 48.2 50.7 26 Foreign and international6 124.4 127.7 141.4 149.4 159.9 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 1 Vi 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 • September 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 May' June' July July 13' July 20' July 27 Aug. 3 Aug. 10 Aug. 17 Immediate delivery1 1 U.S. government securities 18,331 24,728 32,271 41,050 42,649 38,158 38,473 41,330 35,461' 45,184 43,191 48,105 By maturity ? Bills 11,413 14,768 18,398 21,095 22,732 21,998 2233,,331111 2233,,778877 18,537' 24,474 21,854 25,097 3 Other within 1 year 421 621 810 571 637 575 607 611 595 631 505 712 4 1-5 years 3,330 4,360 6,272 9,073 8,222 7,141 6,455 7,386 8,230' 10,985 7,745 10,127 5 5-10 years 1,464 2,451 3,557 4,519 6,156 4,177 4,280 4,909 3,951 3,683 5,009 5,451 6 Over 10 years 1,704 2,528 3,234 5,791 4,903 4,266 3,820 4,637 4,147 5,411 8,078 6,818 By type of customer 7 U.S. government securities dealers 1,484 1,640 1,769 2,240 2,375 2,135 2,077 22,,116600 2,111 2,230 2,120 2,401 8 U.S. government securities brokers 7,610 11,750 15,659 20,711 22,178 19,049 20,314 2200,,667755 17,165 23,670 22,372 25,401 9 All others2 9,237 11,337 15,344 18,099 18.097 16,974 16,082 18,495 16,185' 19,284 18,700 20,303 10 Federal agency securities 3,258 3,306 4,142 5,544 4,827 4,990 4,722 6,271 5,071' 4,315 4,192 6,926 11 Certificates of deposit 2,472 4,477 5,001 3,755 4,177 4,504 3,991 4,979 4,631' 3,944 3,280 5,025 12 Bankers acceptances 1,807 2,502 2,411 2,467 2,618 2,683 2,648 2,365' 2,524 2,408 2,731 13 Commercial paper 6,128 7,595 8,018 8,486 8,275 8,866 8,224 7,157 7,202 7,006 6,188 Futures transactions3 14 Treasury bills 3,523 5,031 6,430 7,737 6,672 6,615 7,066 6,435' 9,331 6,466 7,592 15 Treasury coupons n.a. 1,330 1,490 2,314 2,647 2,498 2,190 2,602 2,828' 3,410 2,986 3,464 16 Federal agency securities 234 259 308 369 447 487 415 615 181 308 359 Forward transactions4 17 U.S. government securities 365 835 1,529 1,396 1,481 632 1,919 1,607' 3,460 1,918 799 18 Federal agency securities 1,370 982 1,562 1,598 1,588 1,690 2,273 1,129' 1,873 2,346 2,734 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 May' June' July July 6 July 13 July 20 July 27 Aug. 3 Net immediate1 1 U.S. government securities 4,306 9,033 9,328 6,298 3,884 558 850' 465 549 1,315 1,108 2 Bills 4,103 6,485 4,837 4,449 3,667 421 500 1,564 1,054 -455 189 3 Other within 1 year -1,062 -1,526 -199 31 63 126 133 167 108 95 125 4 1-5 years 434 1,488 2,932 571 -186 317 -172' -1,031 -347 2,238 1,785 5 5-10 years 166 292 -341 -127 550 366 1,066 683 262 -146 18 6 Over 10 years 665 2,294 2,001 1,374 -210 -673 -676 -918 -528 -418 -1,009 7 Federal agency securities.. 797 2,277 3,712 5,694 5,631 6,919 5.583 6,520 7,434 7,440 7,462 8 Certificates of deposit 3,115 3,435 5,531 4,835 4,488 4,729 4,804 4,795 4,918 4,588 4,425 9 Bankers acceptances 1,746 2,832 3,050 2,405 2,764 3,201 2,962 2,738 2,453 2,817 10 Commercial paper 2,658 3,317 3,029 2,894 2,782 2,469' 2,756 2,832 2,962 2,899 Futures positions 11 Treasury bills -8,934 -2,508 -6,088 -1,023 -1,560 -1,973' -1,346 -983 -2,359 1,960 12 Treasury coupons n a. -2,733 -2,361 -1,478 -2 -1,062 107 -150 -1,341 -2,110 -1,999 13 Federal agency securities.. 522 -224 57 205 413 351 374 584 459 96 Forward positions 14 U.S. government securities -603 -788 -2,057 -635 -1,631 -124 -503 -1,914 -2,603 -3,925 15 Federal agency securities.. -451 -1,190 -1,722 -1,802 -2,197 -1,176' -1,908 -2,657 -2,438 ' -2,726 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 14,568 26,754 23,679 29,613 32,759 37,285 36,943 17 Term agreements 32,048 48,247 49,308 49,145 44,700 47,280 49,717 Repurchase agreements4 18 Overnight and continuing 35,919 49,695 52,378 56,459 59,400 58,868 59,574 19 Term agreements 29,449 43,410 42,350 39,423 34,617 36,086 37,768 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 1983 AAggeennccyy 11998800 11998811 11998822 Feb. Mar. Apr. May June July 1 Federal and federally sponsored agencies 188,665 221,946 237,085 235,607 234,412 234,852 234,289 235,041 236,037 2 Federal agencies 28,606 31,806 33,055 33,045 33,083 33,120 33,065 33,353 33,436 3 Defense Department1 610 484 354 336 335 318 308 298 284 4 Export-Import Bank2 3 11,250 13,339 14,218 14,255 14,304 14,304 14,303 14,563 14,563 5 Federal Housing Administration4 477 413 288 281 271 255 243 228 220 6 Government National Mortgage Association participation certificates5 2,817 2,715 2,165 2,165 2,165 2,165 2,165 2,165 2,165 7 Postal Service6 1,770 1,538 1,471 1,471 1,471 1,471 1,404 1,404 1,404 8 Tennessee Valley Authority 11,190 13,115 14,365 14,415 14,415 14,485 14,520 14,570 14,675 9 United States Railway Association6 492 202 194 122 122 122 122 125 125 10 Federally sponsored agencies7 160,059 190,140 204,030 202,562 201,329 201,732 201,224 201,688 202,601 11 Federal Home Loan Banks 37,268 54,131 55,967 53,071 51,899 50,297 49,756 48,871 49,065 12 Federal Home Loan Mortgage Corporation 4,686 5,480 4,524 4,026 4,475 5,160 5,777 6,500 6,146 13 Federal National Mortgage Association 55,182 58,749 70,052 72,221 71,366 72,058 70,769 71,303 71,612 14 Farm Credit Banks 62,923 71,359 71,896 71,987 72,047 72,227 72,548 72,652 73,306 15 Student Loan Marketing Association (8) 421 1,591 1,257 1,542 1,990 2,374 2,362 2,472 MEMO: 16 Federal Financing Bank debt 87,460 110,698 126,424 126,623 127,717 129,125 130,528 131,987 133,367 Lending to federal and federally sponsored agencies 17 Export-Import Bank3 10,654 12,741 14,177 14,177 14,232 14,232 14,232 14,493 14,493 18 Postal Service6 1,520 1,288 1,221 1,221 1,221 1,221 1,154 1,154 1,154 19 Tennessee Valley Authority 9,465 11,390 12,640 12,690 12,675 12,760 12,795 12,845 12,950 20 United States Railway Association6 492 202 194 122 122 122 122 125 125 Other Lending10 21 Farmers Home Administration 39,431 48,821 53,261 52,431 52,686 53,541 54,586 54,946 55,776 22 Rural Electrification Administration 9,196 13,516 17,157 17,502 17,817' 17,970 18,076 18,378 18,497 23 Other 13,982 18,140 27,774 28,480 28,964' 29,279 29,563 30,046 30,372 1. Consists of mortgages assumed by the Defense Department between 1957 7. Includes outstanding noncontingent liabilities: Notes, bonds, and debenand 1963 under family housing and homeowners assistance programs. tures. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 8. Before late 1981, the Association obtained financing through the Federal 3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. Financing Bank. 4. Consists of debentures issued in payment of Federal Housing Administration 9. The FFB, which began operations in 1974, is authorized to purchase or sell insurance claims. Once issued, these securities may be sold privately on the obligations issued, sold, or guaranteed by other federal agencies. Since FFB securities market. incurs debt solely for the purpose of lending to other agencies, its debt is not 5. Certificates of participation issued before fiscal 1969 by the Government included in the main portion of the table in order to avoid double counting. National Mortgage Association acting as trustee for the Farmers Home Adminis- 10. Includes FFB purchases of agency assets and guaranteed loans; the latter tration; Department of Health, Education, and Welfare; Department of Housing contain loans guaranteed by numerous agencies with the guarantees of any and Urban Development; Small Business Administration; and the Veterans particular agency being generally small. The Farmers Home Administration item Administration. consists exclusively of agency assets, while the Rural Electrification Administra- 6. Off-budget. tion entry contains both agency assets and guaranteed loans. 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, that is, 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 • September 1983 1.45 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1982 1983 Type of issue or issuer, or use 11998800 11998811 11998822 Nov. Dec. Jan/ Feb/ Mar/ Apr/ May' June 1 All issues, new and refunding1 48,367 47,732 78,950 10,287 9,761 3,770 6,150 8,733 10,926 9,363 6,963 Type of issue 2 General obligation 14,100 12,394 21,088 3,392 1,623 869 1,256 2,261 3,457 3,527 1,478 3 U.S. government loans2 38 34 225 34 37 0 3 3 2 6 7 4 Revenue 34,267 35,338 57,862 6,895 8,138 2,901 4,894 6,472 7,469 5,836 5,485 5 U.S. government loans2 57 55 461 57 62 0 2 5 9 14 16 Type of issuer 6 State 5,304 5,288 8,406 1,091 220 237 252 724 1,745 830 249 7 Special district and statutory authority 26,972 27,499 45,000 5,489 6,171 2,1% 4,235 5,416 5,768 4,406 4,025 8 Municipalities, counties, townships, school districts 16,090 14,945 25,544 3,243 3,370 1,337 1,663 2,593 3,413 4,127 2,689 9 Issues for new capital, total 46,736 46,530 74,612 9,496 9,531 3,268 5,059 7,514 8,982 6,865 5,554 Use of proceeds 10 Education 4,572 4,547 6,444 765 895 355 1,089 828 671 817 798 11 Transportation 2,621 3,447 6,256 1,291 1,342 50 541 815 560 416 222 12 Utilities and conservation 8,149 10,037 14,254 1,969 1,891 977 1,050 1,732 2,590 1,504 924 13 Social welfare 19,958 12,729 26,605 2,336 3,121 904 1,497 2,773 3,120 2,052 2,000 14 Industrial aid 3,974 7,651 8,256 877 1,308 319 183 393 447 638 473 15 Other purposes 7,462 8,119 12,797 2,258 974 663 699 973 1,594 1,438 1,137 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 119988KK 11998822rr Nov/ Dec. Jan/ Feb/ Mar/ Apr/ May June 1 All issues1'2 73,694 70,441 84,198 8,887 9,830 7,709 8,491 11,728 10,468 11,489 8,165 2 Bonds 53,206 45,092 53,636 5,497 5,636 4,569 3,839 5,317 6,015 7,017 2,244 Type of offering 3 Public 41,587 38,103 43,838 5,012 4,264 4,569 3,839 5,317 6,015 7,017 2,244 4 Private placement 11,619 6,989 9,798 485 1,372 n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 15,409 12,325 13,123 1,954 1,204 849 655 %2 1,449 2,158 706 6 Commercial and miscellaneous 6,693 5,229 5,681 523 565 562 335 511 1,109 1,055 425 7 Transportation 3,329 2,052 1,474 88 120 32 250 0 175 150 115 8 Public utility 9,557 8,963 12,155 1,246 944 313 763 950 755 1,115 363 9 Communication 6,683 4,280 2,265 115 372 0 0 650 725 505 250 10 Real estate and financial 11,534 12,243 18,938 1,571 2,431 2,813 1,836 2,244 1,802 2,034 385 11 Stocks3 20,489 25,349 30,562 3,390 4,194 3,140 4,652 6,411 4,453 4,472 5,921 Type 12 Preferred 3,631 1,797 5,113 573 421 594 1,962 893 440 492 665 13 Common 16,858 23,552 25,449 2,817 3,773 2,546 2,690 5,518 4,013 3,980 5,256 Industry group 14 Manufacturing 4,839 5,074 5,649 481 921 888 1,038 1,654 1,424 1,545 2,449 15 Commercial and miscellaneous 5,245 7,557 7,770 1,024 693 994 646 1,225 1,494 922 1,358 16 Transportation 549 779 709 225 22 355 283 91 113 221 109 17 Public utility 6,230 5,577 7,517 752 742 350 534 674 639 264 550 18 Communication 567 1,778 2,227 14 1,361 187 2 1,133 37 8 138 19 Real estate and financial 3,059 4,584 6,690 894 455 366 2,149 1,634 746 1,512 1,317 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 other 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 Dec. Jan. Feb. Mar. Apr. Mayr June' July INVESTMENT COMPANIES1 1 Sales of own shares2 20,596 45,675 5,291 8,095 6,115 7,871 8,418 7,577 8,107 6,944 2 Redemptions of own shares3 15,866 30,078 4,835 4,233 3,510 5,066 6,482 4,486 5,416 4,498 3 Net sales 4,730 15,597 456 3,862 2,605 2,805 1,936 3,091 2,691 2,446 4 Assets4 55,207 76,741 76,841 80,384 84,981 90,075 98,669 101,423 106,449 104,287 5 Cash position5 5,277 5,999 6,040 6,943 7,404 7,904 8,496 8,771 9,110 9,021 6 Other 49,930 70,742 70,801 73,441 77,577 82,171 90,173 92,652 97,339 95,266 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 Q1 Q2 Q3 Q4 QK 1 Corporate profits with inventory valuation and capital consumption adjustment 175.4 192.3 164.8 185.0 197.6 192.0 162.0 166.8 168.5 161.9 181.8 2 Profits before tax 234.6 227.0 174.2 219.0 227.7 217.2 173.2 178.8 177.3 167.5 169.7 3 Profits tax liability 84.8 82.8 59.2 80.4 83.7 75.6 60.3 61.4 60.8 54.0 61.5 4 Profits after tax 149.8 144.1 115.1 138.6 144.0 141.6 112.9 117.4 116.5 113.5 108.2 5 Dividends 58.6 64.7 68.7 63.7 66.4 67.3 67.7 67.8 68.8 70.4 71.4 6 Undistributed profits 91.2 79.5 46.6 74.9 77.6 74.3 45.2 49.6 47.7 43.1 36.7 7 Inventory valuation -42.9 -23.6 -8.4 -22.6 -19.4 -15.7 -5.5 -8.5 -9.0 -10.3 -1.7 8 Capital consumption adjustment -16.3 -11.0 -1.1 -11.4 -10.7 -9.5 -5.6 -3.5 0.1 4.7 13.9 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • September 1983 1.49 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1982' 1983 AAccccoouunntt 11997777 11997788 11997799'' 11998800"" 11998811RR QL Q2 Q3 Q4 QL 1 Current assets 912.7 1,043.7 1,214.8 1,327.0 1,419.1 1,417.6 1,416.6 1,440.9 1,424.3 1,435.0 2 Cash 97.2 105.5 118.0 126.9 131.8 121.8 124.0 126.7 143.8 139.5 3 U.S. government securities 18.2 17.2' 16.7 18.7 17.4 16.5 16.5 18.9 22.4 25.8 4 Notes and accounts receivable 330.3 388.0 459.0 506.8 530.3 533.2 530.9 533.8 510.6 517.2 5 Inventories 376.9 431.8 505.1 542.8 585.1 591.5 587.5 596.4 575.0 572.9 6 Other 90.1 101.1' 116.0 131.8 154.6 154.7 157.8 165.1 172.4 179.7 7 Current liabilities 557.1 669.5 807.3 889.3 976.8 985.7 985.6 1,002.5 971.1 976.9 8 Notes and accounts payable 317.6 383.0" 460.8 513.6 559.1 550.7 550.1 555.1 542.7 530.0 9 Other 239.6 286.5' 346.5 375.7 417.7 435.0 435.5 447.5 428.4 446.8 10 Net working capital 355.5 374.3 407.5 437.8 442.3 431.9 431.0 438.4 453.2 458.1 11 MEMO: Current ratio1 1.638 1.559 1.505 1.492 1.453 1.438 1.437 1.437 1.467 1.469 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, Board of Governors of the Federal Reserve System, Washington, D.C. Corporations" in the July 1978 BULLETIN, pp. 533-37. 20551. SOURCE. Federal Trade Commission and Bureau of the Census. 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 Q2 Q3' Q41 1 Total nonfarm business 321.49 316.43 306.57 323.22 315.79 302.77 293.03 293.46 313.04 326.73 Manufacturing 2 Durable goods industries 61.84 56.44 5511..4499 59.03 57.14 50.50 50.74 48.48 53.00 53.73 3 Nondurable goods industries 64.95 63.23 62.49 64.74 62.32 59.59 59.12 60.31 64.44 66.07 Nonmanufacturing 4 Mining 16.86 15.45 12.71 16.56 14.63 13.31 12.03 10.91 13.29 14.60 Transportation 5 Railroad 4.24 4.38 3.75 4.73 3.94 4.31 3.35 3.64 3.70 4.31 6 Air 3.81 3.93 3.75 3.54 4.11 4.85 4.09 4.10 3.10 3.69 7 Other 4.00 3.64 3.63 4.06 3.24 3.25 3.60 3.14 3.70 4.08 Public utilities 8 Electric 29.74 33.40 34.46 32.26 34.98 35.12 33.97 34.86 34.34 34.67 9 Gas and other 8.65 8.55 7.72 9.14 8.40 7.77 7.64 6.62 7.76 8.86 10 Trade and services 86.33 86.95 87.68 88.85 87.31 84.00 82.38 85.85 89.31 93.18 11 Communication and other2 41.06 40.46 38.90 40.33 39.73 40.06 36.11 35.54 40.40 43.54 1. Anticipated by business. SOURCE. Survey of Current Business (Department 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 Q2 Q3 Q4 Ql Q2 ASSETS Accounts receivable, gross 1 Consumer 44.0 52.6 65.7 73.6 85.5 88.0 88.3 89.5 89.9 91.3 2 Business 55.2 63.3 70.3 72.3 80.6 82.6 82.2 81.0 82.2 84.9 3 Total 99.2 116.0 136.0 145.9 166.1 170.6 170.5 170.4 172.1 176.2 4 LESS: Reserves for unearned income and losses.... 12.7 15.6 20.0 23.3 28.9 30.2 30.4 30.5 29.7 30.4 5 Accounts receivable, net 86.5 100.4 116.0 122.6 137.2 140.4 140.1 139.8 142.4 145.8 6 Cash and bank deposits 2.6 3.5 1 7 Securities .9 1.3 V 24.91 27.5 34.2 37.3 39.1 39.7 42.8 44.3 8 All other 14.3 17.3 J 9 Total assets 104.3 122.4 140.9 150.1 171.4 177.8 179.2 179.5 185.2 190.2 LIABILITIES 10 Bank loans 5.9 6.5 8.5 13.2 15.4 14.5 16.8 18.6 16.6 16.3 11 Commercial paper 29.6 34.5 43.3 43.4 51.2 50.3 46.7 45.8 45.2 49.0 Debt 12 Short-term, n.e.c 6.2 8.1 8.2 7.5 9.6 9.3 9.9 8.7 9.8 9.6 13 Long-term, n.e.c 36.0 43.6 46.7 52.4 54.8 60.3 60.9 63.5 64.7 64.5 14 Other 11.5 12.6 14.2 14.3 17.8 18.9 20.5 18.7 22.8 24.0 15 Capital, surplus, and undivided profits 15.1 17.2 19.9 19.4 22.8 24.5 24.5 24.2 26.0 26.7 16 Total liabilities and capital 104.3 122.4 140.9 150.1 171.4 177.8 179.2 179.5 185.2 190.2 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 JJJuuunnneee 333000,,, 111999888333111 Apr. • May June Apr. May June Apr. May June 1 Total 84,894 887 428 789 22,927 25,322 25,341 22,040 24,894 24,552 2 Retail automotive (commercial vehicles) 16,252 830 580 599 1,810 1,615 1,675 980 1,035 1,076 3 Wholesale automotive 12,758 226 239 52 6,494 6,971 7,468 6,268 6,732 7,416 4 Retail paper on business, industrial, and farm equipment 27,713 -116 -167 -98 1,180 1,344 1,331 1,296 1,511 1,429 5 Loans on commercial accounts receivable and factored commercial accounts receivable 9,247 73 -137 -8 11,897 13,457 13,071 11,824 13,594 13,079 6 All other business credit 18,924 -126 -87 -244 1,546 1,935 1,796 1,672 2,022 1,552 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 DomesticN onfinancial Statistics • September 1983 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1983 IItteemm 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May June July Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 83.4 90.4 94.6 88.9 88.4 80.1 89.6 92.1 93.0 97.3 2 Amount of loan (thousands of dollars) 59.2 65.3 69.8 65.4 66.6 60.5 66.5 67.8 69.2 72.3 3 Loan/price ratio (percent) 73.2 74.8 76.6 75.2 77.9 76.8 74.2 77.5 76.9 76.5 4 Maturity (years) 28.2 27.7 27.6 26.5 27.2 24.2 26.9 26.8 27.3 28.1 5 Fees and charges (percent of loan amount)2 2.09 2.67 2.95 2.46 2.78 2.21 2.09 2.44 2.43 2.54 6 Contract rate (percent per annum) 12.25 14.16 14.47 13.00 12.62 12.97 12.02 12.21 11.90 12.02 Yield (percent per annum) 1 FHLBB series3 12.65 14.74 15.12 13.49 13.16 13.41 12.42 12.67 12.36 12.50 8 HUD series4 13.95 16.52 15.79 13.44 13.18 13.17 13.02 13.09 13.37 14.00 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.44 16.31 15.31 12.87 12.65 12.68 12.50 12.41 12.96 14.23 10 GNMA securities6 12.55 15.29 14.68 12.06 11.94 11.87 11.76 11.72 12.09 12.54 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 55,104 58,675 66,031 73,106 73,555 73,666 73,554 74,116 74,669 74,630 12 FHA/V A-insured 37,365 39,341 39,718 38,924 38,768 38,409 37,901 37,669 37,376 37,092 13 Conventional 17,725 19,334 26,312 34,182 34,788 35,257 35,653 36,446 37,293 37,583 Mortgage transactions (during period) 14 Purchases 8,099 6,112 15,116 2,045 1,594 1,433 1,004 1,579 1,333 1,358 15 Sales 0 2 2 0 1 777 586 204 83 786 Mortgage commitments1 16 Contracted (during period) 8,083 9,331 22,105 2,006 785 1,184 1,023 1,534 2,506 1,198 17 Outstanding (end of period) 3,278 3,717 7,606 7,487 6,475 6,187 5,811 5,726 5,887 5,099 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 18 Total 4,362 5,245 5,153 4,560 4,450 4,795 4,997 6,026 19 FHA/VA 2,116 2,236 1,921 1,004 1,000 995 990 984 20 Conventional 2,246 3,010 3,224 3,556 3,450 3,800 4,008 5,042 Mortgage transactions (during period) 21 Purchases 3,723 3,789 23,671 1,479 1,688 2,849 1,807 2,439 n.a. n.a. 22 Sales 2,527 3,531 24,164 1,641 1,756 2,469 1,525 1,408 Mortgage commitments9 23 Contracted (during period) 3,859 6,974 28,187 2,059 868 1,438 3,079 2,334 24 Outstanding (end of period) 447 3,518 7,549 8,098 7,238 5,845 7,253 6,889 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on Government National Mortgage Associmajor institutional lender groups. Compiled by the Federal Home Loan Bank ation guaranteed, mortgage-backed, fully modified pass-through securities, as- Board in cooperation with the Federal Deposit Insurance Corporation. suming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying 2. Includes all fees, commissions, discounts, and "points" paid (by the the prevailing ceiling rate. Monthly figures are unweighted averages of Monday borrower or the seller) to obtain a loan. quotations for the month. 3. Average effective interest rates on loans closed, assuming prepayment at the 7. Includes some multifamily and nonprofit hospital loan commitments in end of 10 years. addition to 1- to 4-family loan commitments accepted in FNMA's free market 4. Average contract rates on new commitments for conventional first mort- auction system, and through the FNMA-GNMA tandem plans. gages, rounded to the nearest 5 basis points; from Department of Housing and 8. Includes participation as well as whole loans. Urban Development. 9. Includes conventional and government-underwritten loans. FHLMC's 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing mortgage commitments and mortgage transactions include activity under mort- Administration-insured first mortgages for immediate delivery in the private gage/securities swap programs, while the corresponding data for FNMA exclude secondary market. Any gaps in data are due to periods of adjustment to changes in swap activity. maximum permissible contract rates. 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 Q2 Q3 Q4 QL Q2 1 1,471,786 1,583,264 1,654,667" 1,624,279 1,632,161 1,654,667" 1,682,634 1,723,874" ? 986,979 1,065,294 1,112,343" 1,089,522 1,097,507 1,1 12,343" 1,134,538" 1,164,433" 3 Multifamily 137,134 136,354 136,725" 138,332 136,508 136,725" 137,938" 140,477" 4 255,655 279,889 298,708" 290,951 291,740 298,708" 303,130" 310,572" 5 92,018 101,727 106,891" 105,474 106,406 106,891" 107,028" 108,392" 6 Major financial institutions 997,168 1,040,827 1,023,339" 1,042,904 1,027,027 1,023,339" 1,030,068" 1,048,339 7 Commercial banks' 263,030 284,536 301,742 294,022 298,342 301,742 305,672 312,663 8 1- to 4-family 160,326 170,013 177,122 172,596 175,126 177,122 179,430 183,533 9 Multifamily 12,924 15,132 15,841 15,431 15,666 15,841 16,147 16,634 10 Commercial 81,081 91,026 100,269 97,522 99,050 100,269 101,575 103,898 11 Farm 8,699 8,365 8,510 8,473 8,500 8,510 8,520 8,598 1? Mutual savings banks 99,865 99,997 97,444" 96,346 94,382 97,444" 105,379" 119,830 13 1- to 4-family 67,489 68,187 66,533" 65,381 63,849 66,533" 72,912" 84,483 14 Multifamily 16,058 15,960 15,247" 15,338 15,026 15,247" 15,862" 17,011 IS Commercial 16,278 15,810 15,635" 15,598 15,479 15,635" 16,577" 18,308 16 Farm 40 40 29" 29 28 29" 28 28 17 Savings and loan associations 503,192 518,547 482,234" 512,997 493,899 482,234" 475,688" 471,638 18 1- to 4-family 419,763 433,142 396,361" 425,890 410,035 396,361" 389,967" 384,630 19 Multifamily 38,142 37,699 36,023 38,321 36,894 36,023 35,534" 35,231 20 Commercial 45,287 47,706 49,850" 48,786 46,970 49,850" 50,187" 51,777 71 Life insurance companies 131,081 137,747 141,919 139,539 140,404 141,919 143,329" 144,208 ?? 1- to 4-family : 17,943 17,201 16,743 16,451 16,865 16,743 16,855" 16,965 73 Multifamily 19,514 19,283 18,847 18,982 18,967 18,847 19,076" 19,100 74 Commercial 80,666 88,163 93,501 91,113 91,640 93,501 94,727" 95,443 25 Farm 12,958 13,100 12,828 12,993 12,932 12,828 12,671" 12,700 76 Federal and related agencies 114,300 126,094 138,185 131,456 134,409 138,185 140,028" 142,136" 77 Government National Mortgage Association 4,642 4,765 4,227 4,669 4,110 4,227 3,753" 3,660 78 1- to 4-family 704 693 676 688 682 676 665 651 29 Multifamily 3,938 4,072 3,551 3,981 3,428 3,551 3,088" 3,009 30 Farmers Home Administration 3,492 2,235 1,786 1,335 947 1,786 2,077 1,605" 31 1- to 4-family 916 914 783 491 302 783 707 381" 32 Multifamily 610 473 218 179 46 218 380 555" 33 Commercial 411 506 377 256 164 377 337 248" 34 Farm 1,555 342 408 409 435 408 653 421" 35 Federal Housing and Veterans Administration 5,640 5,999 5,228 5,908 5,362 5,228 5,138" 5,219 36 1- to 4-family 2,051 2,289 1,980 2,218 2,130 1,980 1,867" 1,919 37 Multifamily 3,589 3,710 3,248 3,690 3,232 3,248 3,271" 3,300 38 Federal National Mortgage Association 57,327 61,412 71,814 65,008 68,841 71,814 73,666 74,669 39 1- to 4-family 51,775 55,986 66,500 59,631 63,495 66,500 68,370 69,396 40 Multifamily 5,552 5,426 5,314 5,377 5,346 5,314 5,296 5,273 41 Federal Land Banks 38,131 46,446 50,350 49,270 49,983 50,350 50,544 50,858" 47 1- to 4-family 2,099 2,788 3,068 2,954 3,029 3,068 3,059 3,030" 43 Farm 36,032 43,658 47,282 46,316 46,954 47,282 47,485 47,828" 44 Federal Home Loan Mortgage Corporation 5,068 5,237 4,780 5,266 5,166 4,780 4,850" 6,125 45 1- to 4-family 3,873 5,181 4,733 5,209 5,116 4,733 4,795" 6,025 46 Multifamily 1,195 56 47 57 50 47 55 100 47 Mortgage pools or trusts2 142,258 163,000 216,654 183,657 198,376 216,654 234,596 252,318 48 Government National Mortgage Association 93,874 105,790 118,940 111,459 114,776 118,940 127,939 139,276" 49 1- to 4-family 91,602 103,007 115,831 108,487 111,728 115,831 124,482 135,628" 50 Multifamily 2,272 2,783 3,109 2,972 3,048 3,109 3,457 3,648 51 Federal Home Loan Mortgage Corporation 16,854 19,853 42,964 28,703 35,132 42,964 48,008 50,587 57 1- to 4-family 13,471 19,501 42,560 28,329 34,739 42,560 47,575 50,112 53 Multifamily 3,383 352 404 374 393 404 433 475 54 Federal National Mortgage Association3 n.a. 717 14,450 4,556 8,133 14,450 18,157 20,933 55 1- to 4-family n.a. 717 14,450 4,556 8,133 14,450 18,157 20,933 56 Farmers Home Administration 31,530 36,640 40,300 38,939 40,335 40,300 40,492 41,522" 57 1- to 4-family 16,683 18,378 20,005 19,357 20,079 20,005 20,263 20,728" 58 Multifamily 2,612 3,426 4,344 4,044 4,344 4,344 4,344 4,343" 59 Commercial 5,271 6,161 7,011 6,762 7,056 7,011 7,115 7,303" 60 Farm 6,964 8,675 8,940 8,776 8,856 8,940 8,770 9,148" 61 Individual and others4 218,060 253,343 276,489" 266,262 272,349 276,489" 277,942" 281,081 6? 1- to 4-family5 138,284 167,297 184,998" 177,284 182,199 184,998" 185,434" 186,019 63 Multifamily 27,345 27,982 30,532 29,586 30,068 30,532 30,995" 31,798 64 Commercial 26,661 30,517 32,065 30,914 31,381 32,065 32,612" 33,595 65 Farm 25,770 27,547 28,894 28,478 28,701 28,894 28,901" 29,669 1. Includes loans held by nondeposit trust companies but not bank trust NOTE. Based on data from various institutional and governmental sources, with departments. some quarters estimated in part by the Federal Reserve in conjunction with the 2. Outstanding principal balances of mortgages backing securities insured or Federal Home Loan Bank Board and the Department of Commerce. Separation of guaranteed by the agency indicated. nonfarm mortgage debt by type of property, if not reported directly, and 3. Outstanding balances on FNMA's issues of securities backed by pools of interpolations and extrapolations when required, are estimated mainly by the conventional mortgages held in trust. The program was implemented by FNMA in Federal Reserve. Multifamily debt refers to loans on structures of five or more October 1981. units. 4. Other holders include mortgage companies, real estate investment trusts, state and local credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and U.S. agencies for which amounts are small or for which separate data are not readily available. 5. Includes a new estimate of residential mortgage credit provided by individ- Digitized for FRASER uals. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • September 1983 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change A Millions of dollars 1982 1983 iyoi 11998822 Dec. Jan. Feb. Mar. Apr. May June July Amounts outstanding (end of period) 1 Total 313,472 331,697 344,798 344,798 343,151 340,343 342,568 344,748 347,189 353,012 358,020 By major holder 2 Commercial banks 147,013 147,622 152,069 152,069 150,906 150,257 151,319 152,408 153,471 156,603 159,666 3 Finance companies 76,756 89,818 94,322 94,322 95,080 93,859 94,817 94,675 95,364 96,349 97,319 4 Credit unions 44,041 45,954 47,253 47,253 46,946 46.757 47,081 47,505 47,838 48,652 49,139 5 Retailers2 28,448 29,551 30,202 30,202 28,859 27,734 27,472 27,455 27,541 27,804 27,900 6 Savings and loans 9,911 11,598 13,891 13,891 14,209 14,860 15,083 15,551 15,842 16,207 16,369 7 Gasoline companies 4,468 4,403 4,063 4,063 4.102 3,780 3,669 3,980 3,943 4,159 4,356 8 Mutual savings banks 2,835 2,751 2,998 2,998 3,049 3,096 3,127 3,174 3,190 3,238 3,271 By major type of credit 9 Automobile 116,838 125,331 130,227 130,227 129,482 129,055 130,959 131,976 133,640 136,183 138,689 1 1 1 2 0 1 Co I D m n i d m re ir e c e t r c c t l i o a p a l a n b p s a e n r ks 2 6 3 6 1 5 , , , 3 5 2 0 3 3 3 6 3 2 3 58 4 3 , , , 0 3 7 8 7 0 1 5 6 2 3 58 3 5 , , , 8 6 1 5 7 7 1 3 8 2 5 3 3 5 8 , , , 6 1 8 7 5 7 8 1 3 57,74 ( ( 0 3 3 ) ) 57,97 ( ( 1 3 3 ) ) 58,56 ( ( 7 3 3 ) ) 59,29 ( ( 1 3 3 ) ) 60,38 ( ( 4 3 3 ) ) 61,87 ( ( 0 3 3 ) ) 63,42 ( ( 5 3 3 ) ) 13 Credit unions 21,060 21,975 22,596 22,596 22,458 22,360 22,518 22,721 22,880 23,269 23,502 14 Finance companies 34,242 45,275 48,780 48,780 49,284 48,724 49,874 49,964 50,376 51,044 51,762 15 Revolving 58,352 62,819 67,184 67,184 65,562 63,372 63,091 63,521 63,459 64,899 65,856 16 Commercial banks 29,765 32,880 36,688 36,688 36,282 35,481 35,533 35,651 35,536 36,515 37,173 17 Retailers 24,119 25,536 26,433 26,433 25,178 24,111 23,889 23,890 23,980 24,225 24,327 18 Gasoline companies 4,468 4,403 4,063 4,063 4,102 3,780 3,669 3,980 3,943 4,159 4,356 19 Mobile home 17,322 18,373 18,988 18,988 19,291 19,374 19,379 19,400 19,448 19,647 19,750 20 Commercial banks 10,371 10,187 9,684 9,684 9,828 9,806 9,739 9,624 9,581 9,651 9,717 21 Finance companies 3,745 4,494 4,965 4,965 4,981 4,960 4,967 4,970 4,976 4,995 4,982 22 Savings and loans 2,737 3,203 3,836 3,836 3,984 4,112 4,174 4,303 4,384 4,485 4,530 23 Credit unions 469 489 503 503 498 496 499 503 507 516 521 24 Other 120,960 125,174 128,399 128,399 128,816 128,542 129,139 129,851 130,642 132,283 133,725 25 Commercial banks 45,341 46,474 46,846 46,846 47,056 46,999 47,480 47,842 47,970 48,567 49,351 26 Finance companies 38,769 40,049 40,577 40,577 40,815 40,175 39,976 39,741 40,012 40,310 40,575 27 Credit unions 22,512 23,490 24,154 24,154 23,990 23,901 24,064 24,281 24,451 24,867 25,116 28 Retailers 4,329 4,015 3,769 3,769 3,681 3,623 3.583 3,565 3,561 3,579 3,573 29 Savings and loans 7,174 8,395 10,055 10,055 10,225 10,748 10,909 11,248 11,458 11,722 11,839 30 Mutual savings banks 2,835 2,751 2,998 2,998 3,049 3,096 3,127 3,174 3,190 3,238 3,271 Net change (during period)4 31 Total 1,448 18,217 13,096 2,418 2,725 735 2,582 2,271 2,696 4,406 4,840 By major holder 32 Commercial banks -7,163 607 4,442 1,111 410 788 1,354 1,186 1,540 2,422 2,766 33 Finance companies 8,438 13,062 4,504 1,024 1,881 -658 487 -520 362 470 909 34 Credit unions -2,475 1,913 1,298 197 20 43 143 708 288 573 662 35 Retailers2 329 1,103 651 -91 -14 36 422 147 169 368 272 36 Savings and loans 1,485 1,682 2,290 201 412 677 187 394 374 456 188 37 Gasoline companies 739 -65 -340 -51 -78 -200 -35 299 -51 77 5 38 Mutual savings banks 95 -85 251 27 94 49 24 57 14 40 38 By major type of credit 39 Automobile 477 8,495 4,898 1,491 625 -233 1,221 689 1,313 1,973 2,421 4 4 4 2 1 0 Co D I m n i d m re ir e c e r t c c t l i o a p a l a n b p s a e n r ks - - - 3 5 2 , , , 1 8 7 0 3 2 4 0 6 - -3 2 - , , 8 4 5 5 5 9 8 5 7 - 7 8 3 7 0 3 0 3 4 5 2 2 9 9 7 8 -58 ( ( 1 3 3 ) ) 3 ( ( 21 3 3 ) ) 2 ( ( 40 3 3 ) ) 6 ( ( 12 3 3 ) ) 1,0 ( ( 66 3 3 ) ) 1,2 ( ( 84 3 3 ) ) 1,4 ( ( 82 3 3 ) ) 43 Credit unions -1,184 914 622 89 20 15 68 341 137 275 328 44 Finance companies 7,491 11,033 3,505 875 1,186 -569 913 -264 no 414 611 45 Revolving 1,415 4,467 4,365 501 68 -135 1,177 917 514 1,210 821 46 Commercial banks -97 3,115 3,808 650 130 61 786 468 373 806 556 47 Retailers 773 1,417 897 -98 16 4 426 150 192 327 260 48 Gasoline companies 739 -65 -340 -51 -78 -200 -35 299 -51 77 5 49 Mobile home 483 1,049 609 -37 420 204 -61 22 17 151 114411 50 Commercial banks -276 -186 -508 -74 193 26 -95 -99 -86 28 6688 51 Finance companies 355 749 471 -15 53 59 -23 8 1 -6 7 52 Savings and loans 430 466 633 49 175 120 54 107 98 123 59 53 Credit unions -25 20 14 3 -1 -1 3 6 4 6 7 54 Other -927 4,206 3,224 463 1,612 899 245 643 852 1,072 1,457 55 Commercial banks -960 1,133 372 8 668 380 423 205 187 304 660 56 Finance companies 592 1,280 528 164 642 -148 -403 -264 251 62 291 57 Credit unions -1,266 975 662 105 1 29 72 361 147 292 327 58 Retailers -444 -314 -246 7 -30 32 -4 -3 -23 41 12 59 Savings and loans 1,056 1,217 1,657 152 237 557 133 287 276 333 129 60 Mutual savings banks 95 -85 251 27 94 49 24 57 14 40 38 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 1983 Feb. Apr. May INTEREST RATES Commercial banks' 1 48-month new car2 14.30 16.54 16.83 14.81 13.90 2 24-month personal 15.47 18.09 18.65 17.47 16.57 3 120-month mobile home2 14.99 17.45 18.05 16.73 15.84 4 Credit card 17.31 17.78 18.51 18.82 18.79 Auto finance companies 5 New car 14.82 16.17 16.15 12.05 12.07 11.90 11.94 11.57 6 Used car 19.10 20.00 20.75 19.91 19.38 18.91 18.76 18.58 OTHER TERMS3 Maturity (months) 7 New car 45.0 45.4 46.0 45.9 45.9 45.8 45.4 45.6 8 Used car 34.8 35.8 34.0 37.7 37.7 37.7 37.9 38.0 Loan-to-value ratio 9 New car 87.6 86.1 85.3 86.0 84.0 86.0 86.0 10 Used car 94.2 91.8 90.3 90.0 91.0 91.0 92.0 Amount financed (dollars) 11 New car 6,322 7,339 8,178 8,755 8,829 8,662 8,572 8,512 12 Used car 3,810 4,343 4,746 4,731 4,802 4,869 4,984 5,039 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 Nonfinancial Statistics • September 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 1983 ly/l 11998822 H2 HI H2 HI H2 HI Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 319.4 369.8 386.0 343.2 377.2 395.3 371.3 392.4 362.0 356.8 434.8 504.9 By sector and instrument 2 U.S. government 56.8 53.7 37.4 79.2 87.4 161.3 92.5 87.8 86.9 106.9 215.5 230.2 3 Treasury securities 57.6 55.1 38.8 79.8 87.8 162.1 93.1 88.3 87.3 108.3 215.9 230.2 4 Agency issues and mortgages -.9 -1.4 -1.4 -.6 -.5 -.9 -.6 -.5 -.4 -1.4 -.4 -.1 5 Private domestic nonfinancial sectors 262.6 316.2 348.6 264.0 289.8 234.1 278.7 304.6 275.1 249.9 219.3 274.7 6 Debt capital instruments 171.1 199.7 211.2 192.0 158.4 152.4 189.9 179.3 137.5 139.7 166.1 222.7 7 Tax-exempt obligations 21.9 28.4 30.3 30.3 21.9 50.5 31.9 21.1 22.6 41.7 59.4 58.1 8 Corporate bonds 22.9 21.1 17.3 26.7 22.1 18.8 20.7 26.1 18.0 10.8 26.9 20.9 9 Mortgages 126.3 150.2 163.6 135.1 114.5 83.0 137.3 132.0 96.9 87.3 79.9 143.7 10 Home mortgages 94.0 112.2 120.0 96.7 75.9 56.6 99.2 92.6 59.2 55.8 58.6 110.2 11 Multifamily residential 7.1 9.2 7.8 8.8 4.3 1.3 9.6 4.9 3.7 4.2 -1.7 7.7 12 Commercial 18.1 21.7 23.9 20.2 24.6 20.0 20.9 25.2 23.9 21.4 18.6 22.5 13 Farm 7.1 7.2 11.8 9.3 9.7 5.2 7.6 9.3 10.1 5.9 4.4 3.3 14 Other debt instruments 91.6 116.5 137.5 72.0 131.5 81.6 88.8 125.3 137.6 110.1 53.2 52.0 15 Consumer credit 40.2 48.8 45.4 4.9 24.1 18.3 13.0 28.9 19.3 19.3 17.4 38.8 16 Bank loans n.e.c 27.1 37.4 51.2 36.7 54.7 54.4 59.7 45.5 63.9 70.1 38.8 14.0 17 Open market paper 2.9 5.2 11.1 5.7 19.2 -3.3 -9.2 12.0 26.3 6.5 -13.0 -16.3 18 Other 21.3 25.1 29.7 24.8 33.4 12.2 25.3 38.9 28.0 14.3 10.2 15.6 19 By borrowing sector 262.6 316.2 348.6 264.0 289.8 234.1 278.7 304.6 275.1 249.9 219.3 274.7 20 State and local governments 15.4 19.1 20.5 20.3 9.7 36.3 21.7 9.1 10.2 29.3 43.3 47.8 21 Households 137.3 169.4 176.4 117.5 120.6 86.3 121.3 139.8 101.3 87.6 86.1 154.6 22 Farm 12.3 14.6 21.4 14.4 16.3 9.0 12.8 20.1 12.5 9.0 9.1 -.6 23 Nonfarm noncorporate 28.0 32.4 34.4 33.7 39.6 29.8 40.6 39.8 39.5 34.6 24.9 34.6 24 Corporate 69.7 80.6 96.0 78.1 103.7 72.7 82.3 95.8 111.5 89.3 56.0 38.2 25 Foreign net borrowing in United States 13.5 33.8 20.2 27.2 27.2 15.7 26.7 31.9 22.5 12.8 18.6 17.7 26 Bonds 5.1 4.2 3.9 .8 5.4 6.6 -.4 3.3 7.6 2.4 10.8 4.4 27 Bank loans n.e.c 3.1 19.1 2.3 11.5 3.7 -6.2 18.5 3.1 4.2 -5.1 -7.2 11.8 28 Open market paper 2.4 6.6 11.2 10.1 13.9 10.7 4.5 20.6 7.1 12.5 9.0 -3.7 29 U.S. government loans 3.0 3.9 2.9 4.7 4.2 4.5 4.0 4.9 3.5 3.0 6.0 5.2 30 Total domestic plus foreign 332.9 403.6 406.2 370.4 404.4 411.0 397.9 424.4 384.5 369.6 453.4 522.6 Financial sectors 31 Total net borrowing by financial sectors 45.8 74.6 82.5 63.3 85.4 69.3 64.0 87.4 83.4 89.8 48.7 71.9 By instrument 32 U.S. government related 22.0 37.1 47.9 44.8 47.4 64.9 40.4 45.2 49.6 61.3 68.4 67.3 33 Sponsored credit agency securities 7.0 23.1 24.3 24.4 30.5 14.9 20.8 28.9 32.1 23.6 6.3 -2.5 34 Mortgage pool securities 16.1 13.6 23.1 19.2 15.0 49.5 18.6 14.9 15.1 37.0 62.1 69.8 35 Loans from U.S. government -1.1 .4 .6 1.2 1.9 .4 1.1 1.4 2.4 .8 36 Private financial sectors 23.8 37.5 34.6 18.5 38.0 4.4 23.6 42.2 33.8 28.5 -19.7 4.6 37 Corporate bonds 10.1 7.5 7.8 7.1 -.8 2.3 3.1 -.3 -1.4 -1.2 5.8 13.0 38 Mortgages * .1 * -.1 -.5 .1 -.2 -.8 -.2 .1 .1 .1 39 Bank loans n.e.c -.3 2.8 -.4 -.4 2.2 3.2 -.4 3.2 1.1 5.2 1.2 -4.2 40 Open market paper 9.6 14.6 18.0 4.8 20.9 -2.0 10.8 23.5 18.4 14.0 -18.0 8.6 41 Loans from Federal Home Loan Banks 4.3 12.5 9.2 7.1 16.2 .8 10.3 16.7 15.8 10.4 -8.8 -12.9 By sector 42 Sponsored credit agencies 5.9 23.5 24.8 25.6 32.4 15.3 21.8 30.3 34.5 24.4 6.3 -2.5 43 Mortgage pools 16.1 13.6 23.1 19.2 15.0 49.5 18.6 14.9 15.1 37.0 62.1 69.8 44 Private financial sectors 23.8 37.5 34.6 18.5 38.0 4.4 23.6 42.2 33.8 28.5 -19.7 4.6 45 Commercial banks 1.1 1.3 1.6 .5 .4 1.2 .3 .2 .5 .7 1.7 1.7 46 Bank affiliates 2.0 7.2 6.5 6.9 8.3 1.9 8.0 6.9 9.7 9.7 -5.8 6.1 47 Savings and loan associations 6.9 13.5 12.6 7.4 15.5 -3.0 12.3 16.8 14.1 9.1 -15.2 -10.1 48 Finance companies 16.9 18.1 16.6 6.3 14.1 4.9 5.8 18.5 9.7 9.5 .2 7.5 49 REITs -2.5 -1.4 -1.3 -2.2 .2 .1 -2.5 .2 .2 .1 .1 .1 All sectors 50 Total net borrowing 378.7 478.2 488.7 433.7 489.8 480.3 462.0 511.8 467.9 459.4 502.1 594.5 51 U.S. government securities 79.9 90.5 84.8 122.9 133.0 225.9 132.0 131.8 134.3 167.6 284.0 297.6 52 State and local obligations 21.9 28.4 30.3 30.3 21.9 50.5 31.9 21.1 22.6 41.7 59.4 58.1 53 Corporate and foreign bonds 38.0 32.8 29.0 34.6 26.7 27.7 23.5 29.1 24.2 12.0 43.5 38.3 54 Mortgages 126.2 150.2 163.5 134.9 113.9 83.0 137.0 131.1 96.6 87.3 79.8 143.7 55 Consumer credit 40.2 48.8 45.4 4.9 24.1 18.3 13.0 28.9 19.3 19.3 17.4 38.8 56 Bank loans n.e.c 29.9 59.3 53.0 47.8 60.6 51.4 77.8 51.8 69.3 70.2 32.8 21.6 57 Open market paper 15.0 26.4 40.3 20.6 54.0 5.4 6.1 56.1 51.9 33.0 -22.1 -11.4 58 Other loans 27.5 41.9 42.4 37.8 55.8 17.9 40.7 61.8 49.7 28.4 7.4 7.9 External corporate equity funds raised in United States 59 Total new share issues 6.5 1.9 -3.8 22.2 -3.7 35.4 28.0 10.2 -17.7 23.7 47.0 80.8 60 Mutual funds .9 -.1 .1 5.2 6.8 18.6 4.6 8.1 5.6 13.2 24.0 38.5 61 All other 5.6 1.9 -3.9 17.1 -10.6 16.8 23.3 2.1 -23.2 10.6 23.0 42.3 62 Nonfinancial corporations 2.7 -.1 -7.8 12.9 -11.5 11.4 18.8 .9 -23.8 7.0 15.8 32.3 63 Financial corporations 2.5 2.5 3.2 2.1 .9 4.1 2.3 .5 1.2 3.8 4.4 4.4 64 Foreign shares purchased in United States .4 -.5 .8 2.1 * 1.3 2.2 .7 -.7 -.2 2.9 5.7 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 1983 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997777 11997788 11997799 11998800 11998811 11998822 H2 HI H2 HI H2 HI 1 Total funds advanced in credit markets to domestic nonfinancial sectors 319.4 369.8 386.0 343.2 377.2 395.3 371.3 392.4 362.0 356.8 434.8 564.9 By public agencies and foreign ? Total net advances 79.3 102.3 75.2 97.0 97.4 109.3 77.2 111133..88 8811..00 110077..99 111100..88 112233..11 3 U.S. government securities 34.9 36.1 -6.3 15.7 17.2 17.9 -.8 31.2 3.1 17.7 18.2 47.7 4 Residential mortgages 20.0 25.7 35.8 31.7 23.4 61.1 28.2 21.9 25.0 48.1 74.0 77.7 5 FHLB advances to savings and loans 4.3 12.5 9.2 7.1 16.2 .8 10.3 16.7 15.8 10.4 -8.8 -12.9 6 Other loans and securities 20.2 28.0 36.5 42.4 40.6 29.5 39.4 44.1 37.1 31.7 27.4 10.6 Total advanced, by sector 7 U.S. government 10.0 17.1 19.0 23.7 24.1 16.7 22.2 27.9 20.3 14.2 19.1 8.8 8 Sponsored credit agencies 22.5 40.3 53.0 45.6 48.2 65.3 44.0 47.2 49.2 62.5 68.1 69.3 9 Monetary authorities 7.1 7.0 7.7 4.5 9.2 9.8 -10.3 2.4 16.0 .1 19.5 12.7 10 Foreign 39.6 38.0 -4.6 23.2 16.0 17.6 21.3 36.4 -4.4 31.1 4.1 32.3 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 22.0 37.1 47.9 44.8 47.4 64.9 40.4 45.2 49.6 61.3 6688..44 6677..33 12 Foreign 13.5 33.8 20.2 27.2 27.2 15.7 26.7 31.9 22.5 12.8 18.6 17.7 Private domestic funds advanced N Total net advances 275.6 338.4 379.0 318.2 354.4 366.6 361.2 355.7 353.1 323.0 411.0 466.8 14 U.S. government securities 45.1 54.3 91.1 107.2 115.9 207.9 132.7 100.6 131.1 149.9 265.8 249.9 15 State and local obligations 21.9 28.4 30.3 30.3 21.9 50.5 31.9 21.1 22.6 41.7 59.4 58.1 16 Corporate and foreign bonds 24.1 23.4 18.5 19.3 19.4 15.4 11.8 20.9 17.9 -1.7 32.4 23.4 17 Residential mortgages 81.0 95.6 91.9 73.7 56.7 -3.3 80.5 75.5 37.9 11.7 -17.2 40.1 18 Other mortgages and loans 107.8 149.3 156.3 94.8 156.9 96.8 114.5 154.3 159.5 131.7 62.0 82.5 19 LESS: Federal Home Loan Bank advances 4.3 12.5 9.2 7.1 16.2 .8 10.3 16.7 15.8 10.4 -8.8 -12.9 Private financial intermediation 70 Credit market funds advanced by private financial institutions 258.8 302.3 294.7 262.3 305.2 271.2 282.8 317.3 293.1 272.8 268.9 361.4 71 Commercial banking 87.8 129.0 123.1 101.1 103.6 108.5 146.5 99.6 107.6 109.7 107.1 140.9 ??, Savings institutions 78.5 72.8 56.7 54.9 27.2 30.6 72.9 41.5 12.8 29.5 31.0 118.4 73 Insurance and pension funds 69.0 75.0 66.4 74.4 79.3 94.2 65.6 75.3 83.4 95.4 93.0 102.8 24 Other finance 23.6 25.5 48.5 32.0 95.2 37.9 -2.2 101.0 89.4 38.1 37.8 -.6 ?5 Sources of funds 258.8 302.3 294.7 262.3 305.2 271.2 282.8 317.3 293.1 272.8 268.9 361.4 26 Private domestic deposits and RP's 139.0 141.0 142.0 168.6 211.7 173.4 174.2 213.8 209.6 163.4 182.7 223.3 27 Credit market borrowing 23.8 37.5 34.6 18.5 38.0 4.4 23.6 42.2 33.8 28.5 -19.7 4.6 78 Other sources 96.1 123.8 118.1 75.2 55.5 93.5 85.0 61.3 49.8 80.8 105.9 133.6 79 Foreign funds 1.4 6.5 27.6 -21.7 -8.7 -27.7 -15.3 -8.7 -8.7 -30.1 -25.4 -23.1 30 Treasury balances 4.3 6.8 .4 -2.6 -1.1 6.1 1.0 6.5 -8.7 -2.1 14.1 7.0 31 Insurance and pension reserves 51.4 62.2 49.1 65.4 73.2 85.9 61.3 62.7 83.8 85.4 86.4 85.4 32 Other, net 39.0 48.4 41.0 34.0 -7.9 29.2 38.0 .8 -16.7 27.6 30.7 64.2 Private domestic nonfinancial investors 33 Direct lending in credit markets 40.6 73.6 118.9 74.4 87.2 99.7 102.0 80.6 93.8 78.7 122.4 110.0 34 U.S. government securities 24.6 36.3 61.4 38.3 47.4 58.1 58.6 37.2 57.6 43.1 72.7 72.8 35 State and local obligations -.8 3.6 9.9 7.0 9.6 30.9 9.2 9.5 9.7 28.4 33.4 41.4 36 Corporate and foreign bonds -3.2 -1.8 5.7 .6 -8.9 -9.4 -.2 -5.5 -12.4 -26.3 7.4 -2.3 37 Open market paper 9.6 15.6 12.1 -4.3 3.7 -2.0 1.4 -3.3 10.7 6.7 -10.7 -11.1 38 Other 10.4 19.9 29.8 32.9 35.4 22.1 32.9 42.7 28.2 26.8 19.6 9.2 39 Deposits and currency 148.6 152.2 151.4 180.0 221.7 179.4 185.5 222.6 220.7 166.2 192.1 243.2 40 Currency 8.3 9.3 7.9 10.3 9.5 8.4 9.7 8.0 11.0 4.5 12.3 14.7 41 Checkable deposits 17.2 16.2 18.7 5.0 18.1 13.0 9.9 29.8 6.5 6.7 19.1 61.3 4? Small time and savings accounts 93.6 65.9 59.2 83.1 47.2 137.0 90.2 30.7 63.6 95.1 178.6 305.8 43 Money market fund shares .2 6.9 34.4 29.2 107.5 24.7 -3.4 104.1 110.8 39.4 10.0 -84.0 44 Large time deposits 25.7 44.4 23.0 44.7 36.4 -5.2 69.8 41.6 31.2 21.2 -31.6 -73.5 45 Security RPs 2.2 7.5 6.6 6.5 2.5 3.8 7.8 7.7 -2.6 1.1 6.6 13.7 46 Deposits in foreign countries 1.3 2.0 1.5 1.1 .5 -2.4 1.7 .8 .2 -1.8 -2.9 5.2 47 Total of credit market instruments, deposits and currency 189.1 225.8 270.3 254.4 308.9 279.1 287.5 303.3 314.5 244.9 314.5 353.2 48 Public holdings as percent of total 23.8 25.3 18.5 26.2 24.1 26.6 19.4 26.8 21.1 29.2 24.4 23.6 49 Private financial intermediation (in percent) 93.9 89.3 77.7 82.4 86.1 74.0 78.3 89.2 83.0 84.4 65.4 77.4 50 Total foreign funds 41.0 44.6 23.0 1.5 7.3 -10.2 6.0 27.8 -13.1 1.0 -21.3 9.2 MEMO: Corporate equities not included above 51 Total net issues 6.5 1.9 -3.8 22.2 -3.7 35.4 28.0 10.2 -17.7 23.7 47.0 80.8 52 Mutual fund shares .9 -.1 .1 5.2 6.8 18.6 4.6 8.1 5.6 13.2 24.0 38.5 53 Other equities 5.6 1.9 -3.9 17.1 -10.6 16.8 23.3 2.1 -23.2 10.6 23.0 42.3 54 Acquisitions by financial institutions 7.4 4.5 9.7 16.8 22.1 27.9 22.3 25.3 18.9 19.3 36.4 66.3 55 Other net purchases -.9 -2.7 -13.5 5.4 -25.9 7.5 5.7 -15.1 -36.6 4.4 10.6 14.5 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. 11. 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 • September 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 Dec. Jan. Feb. Mar. Apr. May" June" July" Aug. 1 Industrial production1 147.0 151.0 138.6 135.2 137.4 138.1 140.0 142.6 144.4 146.3 149.2 150.5 Market groupings 2 Products, total 146.7 150.6 141.8 139.9 140.9 140.3 141.6 144.5 146.2 148.1 150.8 151.9 3 Final, total 145.3 149.5 141.5 139.5 140.1 138.9 139.9 142.8 144.5 146.4 148.9 149.8 4 Consumer goods 145.4 147.9 142.6 142.0 143.6 143.4 144.3 147.7 150.4 152.3 155.0 155.9 5 Equipment 145.2 151.5 139.8 136.1 135.3 132.7 133.8 136.2 136.5 138.4 140.6 141.4 6 Intermediate 151.9 154.4 143.3 141.5 143.7 145.3 147.8 150.8 152.2 154.3 157.5 159.5 7 Materials 147.6 151.6 133.7 127.8 132.0 134.9 137.6 139.7 141.7 143.6 146.7 148.3 Industry groupings 8 Manufacturing 146.7 150.4 137.6 134.5 136.7 138.2 140.4 143.1 145.1 147.4 150.3 151.4 Capacity utilization (percent)12 9 Manufacturing 79.6 79.4 71.1 68.9 70.0 70.6 71.6 72.9 73.8 74.8 76.2 76.7 10 Industrial materials industries 80.4 80.7 70.1 66.6 68.7 70.1 71.5 72.5 73.5 74.4 76.0 76.7 11 Construction contracts (1977 = 100)3 107.0 111.0 111.0 131.0 127.0 119.0 131.0 129.0 148.0 151.0 137.0 137.0 12 Nonagricultural employment, total4 137.4 138.5 136.2 134.7 135.1 134.9 135.0 135.4 135.9 136.5 137.1 136.5 13 Goods-producing, total 110.1 109.4 102.6 98.9 99.5 98.9 98.8 99.4 100.2 100.9 101.8 102.2 14 Manufacturing, total 104.3 103.7 96.9 93.6 93.8 93.8 93.9 94.5 95.1 95.6 96.4 96.5 15 Manufacturing, production-worker ... 99.3 98.0 89.4 85.6 85.9 86.0 86.1 86.9 87.6 88.2 89.2 89.4 16 Service-producing 152.4 154.4 154.7 154.4 154.6 154.6 154.8 155.2 155.5 156.1 156.4 155.3 17 Personal income, total 343.7 386.5 409.3 419.8 421.0 420.7 423.8 426.8" 432.1 434.2 436.7 n.a. 18 Wages and salary disbursements 317.7 349.7 367.2 376.8 376.2 378.6 382.2 386.9 389.0 391.9 n.a. 19 Manufacturing 264.4 287.3 286.2 286.2 286.9 289.3 293.4 296.4 299.3 303.1 n.a. 20 Disposable personal income5 333.8 373.7 397.3 411.2 410.3 413.7 417.4" 421.0 422.6 429.9 372.9 21 Retail sales" 303.8 330.6 326.0 353.3 352.7 348.3 356.4 364.7 376.1 378.9 378.1 372.9 Prices7 22 Consumer 246.8 272.4 289.1 292.4 293.1 293.2 293.4 295.5 297.1 298.1 299.3 n.a. 23 Producer finished goods 247.0 269.8 280.7 285.5 283.9 284.1 283.4 283.0 284.3 285.0 285.7 n.a. 1. The capacity utilization series has been revised back to January 1967. 6. Based on Bureau of Census data published in Survey of Current Business. 2. Ratios of indexes of production to indexes of capacity. Based on data from 7. Data without seasonal adjustment, as published in Monthly Labor Review. Federal Reserve, McGraw-Hill Economics Department, Department of Com- Seasonally adjusted data for changes in the price indexes may be obtained from merce, and other sources. the Bureau of Labor Statistics, U.S. Department of Labor. 3. Index of dollar value of total construction contracts, including residential, nonresidential and heavy engineering, from McGraw-Hill Information Systems NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6, Company, F. W. Dodge Division. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 4. Based on data in Employment and Earnings (U.S. Department of Labor). of Current Business. Series covers employees only, excluding personnel in the Armed Forces. Figures for industrial production for the last two months are preliminary and 5. Based on data in Survey of Current Business (U.S. Department of Com- estimated, respectively. merce). 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1982 1983 1982 1983 1982 1983 Q3 Q4 Ql Q2" Q3 Q4 Ql Q2 Q3 Q4 Ql Q2" Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 138.2 135.3 138.5 144.4 192.8 193.7 194.6 195.5 71.7 69.8 71.2 73.9 2 Mining 117.2 117.0 116.7 112.5 164.8 165.1 165.2 165.3 71.1 70.9 70.6 68.1 3 Utilities 167.9 166.2 163.6 169.4 206.5 207.4 208.5 209.8 81.3 80.1 78.5 80.7 4 Manufacturing 137.7 134.5 138.4 145.2 193.9 194.8 195.7 196.6 71.0 69.0 70.7 73.8 5 Primary processing 132.4 129.3 137.0 145.3 193.0 193.7 194.3 194.8 68.6 66.8 70.5 74.6 6 Advanced processing 140.5 137.3 139.7 145.1 194.3 195.4 196.5 197.6 72.3 70.2 71.1 73.4 7 Materials 132.6 128.7 134.8 141.7 191.0 191.7 192.3 192.9 69.4 67.1 70.1 73.5 8 Durable goods 124.7 117.1 125.2 134.8 194.4 194.8 195.2 195.6 64.2 60.2 64.2 68.9 9 Metal materials 73.0 66.5 78.6 85.2 140.6 140.3 140.2 139.9 51.9 47.4 56.1 60.9 10 Nondurable goods 155.1 157.0 163.7 171.5 215.6 216.9 217.8 218.8 71.9 72.4 75.2 78.4 11 Textile, paper, and chemical 158.4 160.8 169.3 179.3 226.8 228.3 229.4 230.7 69.8 70.5 73.8 77.8 12 Paper 145.9 147.6 149.9 153.3 163.6 164.4 165.3 166.1 89.1 89.7 90.7 92.3 13 Chemical 188.5 191.9 204.7 218.8 290.6 292.8 294.8 296.6 64.9 65.5 69.4 73.8 14 Energy materials 123.8 121.5 122.2 121.5 152.8 153.3 153.9 154.3 81.0 79.2 79.5 78.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A47 2.11 Continued Previous cycle1 Latest cycle2 1982 1982 1983 SSeerriieess High Low High Low Aug. Dec. Jan. Feb. Mar. Apr. May' June' July' Aug. Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 76.5 71.8 69.7 70.7 71.0 71.8 73.1 73.9 74.7 76.1 76.7 16 Mining 91.8 86.0 88.5 84.0 70.9 71.7 73.8 69.9 68.1 67.5 68.2 68.4 69.7 70.7 17 Utilities 94.9 82.0 86.7 83.8 81.6 79.0 78.4 77.7 79.4 80.9 80.9 80.4 81.7 83.0 18 Manufacturing 87.9 69.0 87.5 75.5 71.2 68.9 70.0 70.6 71.6 72.9 73.8 74.8 76.2 76.7 19 Primary processing 93.7 68.2 91.4 72.6 68.7 66.2 68.6 70.8 72.1 73.4 74.6 75.5 76.9 77.9 20 Advanced processing .... 85.5 69.4 85.9 77.0 72.4 70.4 70.9 70.8 71.5 72.5 73.4 74.4 75.8 76.1 71 Materials 92.6 69.3 88.9 74.2 69.5 66.6 68.7 70.1 71.5 72.5 73.5 74.4 76.0 76.7 22 Durable goods 91.4 63.5 88.4 68.4 64.4 59.8 62.3 64.2 66.0 67.7 68.9 70.1 72.0 72.9 23 Metal materials 97.8 68.0 95.4 59.4 51.8 46.8 53.3 56.1 58.8 59.9 61.0 61.7 62.8 63.8 24 Nondurable goods 94.4 67.4 91.7 77.5 71.6 71.6 73.4 75.3 76.8 77.2 78.7 79.3 79.9 80.6 25 Textile, paper, and chemical 95.1 65.4 92.3 75.5 69.5 70.0 71.4 74.1 75.8 76.4 78.1 78.8 79.6 80.4 26 Paper 99.4 72.4 97.9 89.8 89.6 87.4 90.9 90.8 90.3 91.0 92.9 93.0 96.2 n.a. 27 Chemical 95.5 64.2 91.3 70.7 64.2 65.4 66.4 69.9 71.9 72.6 74.0 74.7 75.1 n.a. 28 Energy materials 94.5 84.4 88.7 84.4 81.5 78.5 80.1 79.2 79.2 78.9 78.5 78.8 81.1 81.7 1. Monthly high 1973; monthly low 1975. 2. Preliminary; monthly highs December 1978 through January 1980; monthly lows July through October 1980. 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1983 CCaatteeggoorryy 11998800 11998811 11998822 Feb. Mar. Apr. May June July Aug. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 169,847 172,272 174,451 175,693 175,850 175,996 176,151 176,320 176,498 176,648 2 Labor force (including Armed Forces)1 109,042 110,812 112,384 112,741 112,678 112,988 112,947 114,127 114,067 114,469 3 Civilian labor force 106,940 108,670 110,204 110,553 110,484 110,786 110,749 111,932 111,875 112,261 Employment 4 Nonagricultural industries2 95,938 97,030 96,125 95,670 95,729 96,088 96,190 97,264 97,758 98,074 5 Agriculture 3,364 3,368 3,401 3,393 3,375 3,371 3,367 3,522 3,527 3,489 Unemployment 6 Number 7,637 8,273 10,678 11,490 11,381 11,328 11,192 11,146 10,590 10,699 7 Rate (percent of civilian labor force)... 7.1 7.6 9.7 10.4 10.3 10.2 10.1 10.0 9.5 9.5 8 Not in labor force 60,805 61,460 62,067 62,952 63,172 63,008 63,204 62,193 62,431 62,179 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,406 91,156 89,596 88,746 88,814 89,101 89,421 89,844' 90,202' 89,791 10 Manufacturing 20,285 20,170 18,853 18,245 18,267 18,376 18,493 18,582' 18,742' 18,770 11 Mining 1,027 1,132 1,122 1,014 1,006 997 994 1,003' 1,015' 1,021 12 Contract construction 4,346 4,176 3,912 3,790 3,757 3,786 3,860 3,933' 3,971' 4,024 13 Transportation and public utilities 5,146 5,157 5,057 4,965 4,963 4,988 4,993 4,992' 4,986' 4,331 14 Trade 20,310 20,551 20,547 20,343 20,350 20,329 20,356 20,494' 20,528' 20,544 15 Finance 5,160 5,301 5,350 5,384 5,391 5,423 5,435 5,451 5,463' 5,480 16 Service 17,890 20,547 20,401 19,262 19,356 19,478 19,546 19,668' 19,771' 19,877 17 Government 16,241 16,024 15,784 15,742 15,724 15,724 15,744 15,721' 15,726' 15,744 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 • September 1983 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 1982 1983 r' pro- 11998822 por- avg. tion Aug. Sept. Oct. Nov. Dec. Jan Feb. Mar. Apr. May' June July? Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 138.6 138.4 137.3 135.7 134.9 135.2 137.4 138.1 140.0 142.6 144.4 146.3 149.2 2 Products 60.71 141.8 142.0 140.8 139.3 139.0 139.9 140.9 140.3 141.6 144.5 146.2 148.1 150.8 3 Final products 47.82 141.5 141.2 140.0 138.7 138.3 139.5 140.1 138.9 139.9 142.8 144.5 146.4 148.9 4 Consumer goods 27.68 142.6 144.1 143.4 142.2 141.3 142.0 143.6 143.4 144.3 147.7 150.4 152.3 155.0 5 Equipment 20.14 139.8 137.3 135.2 134.0 134.2 136.1 135.3 132.7 133.8 136.2 136.5 138.4 140.6 6 Intermediate products 12.89 143.3 144.7 143.7 141.6 141.8 141.5 143.7 145.3 147.8 150.8 152.2 154.3 157.5 7 Materials 39.29 133.7 132.8 132.0 130.0 128.4 127.8 132.0 134.9 137.6 139.7 141.7 143.6 146.7 Consumer goods 8 Durable consumer goods 7.89 129.2 132.9 131.3 126.5 124.6 125.9 131.6 134.4 136.3 140.5 145.5 149.1 153.7 9 Automotive products 2.83 129.5 135.5 135.5 123.6 120.7 128.7 136.2 144.3 142.6 144.9 152.2 159.9 167.4 10 Autos and utility vehicles 2.03 99.0 107.1 105.8 89.6 86.9 99.0 107.0 120.8 116.4 117.8 124.9 135.4 145.6 11 Autos 1.90 86.6 93.3 94.3 79.5 77.7 87.9 97.1 107.3 99.9 102.7 107.4 118.3 129.8 12 Auto parts and allied goods .80 206.9 207.6 210.7 210.0 206.6 204.0 210.2 203.9 209.3 213.6 221.5 222.3 222.6 13 Home goods 5.06 129.1 131.4 128.9 128.1 126.8 124.3 129.1 128.8 132.8 138.1 141.8 143.1 146.1 14 Appliances, A/C, and TV 1.40 102.6 104.5 99.4 106.1 104.8 94.2 109.5 105.8 105.0 106.1 112.8 114.0 115.6 15 Appliances and TV 1.33 104.6 108.6 104.1 110.5 108.4 98.3 112.9 108.8 108.5 109.7 116.1 118.0 119.1 16 Carpeting and furniture 1.07 149.7 152.5 153.3 151.9 151.4 150.8 149.0 156.7 168.3 180.5 181.9 185.6 195.3 17 Miscellaneous home goods 2.59 135.0 137.2 134.9 130.1 128.6 129.8 131.4 129.7 133.3 137.9 140.9 141.3 142.3 18 Nondurable consumer goods 19.79 148.0 148.6 148.2 148.5 147.9 148.4 148.3 147.0 147.5 150.5 152.3 153.5 155.5 19 Clothing 4.29 20 Consumer staples 15.50 159.0 159.4 158.8 159.1 158.1 158.8 158.6 157.4 158.1 161.1 162.8 164.1 165.8 71 8.33 149.7 149.6 148.6 150.2 149.0 149.5 150.9 149.5 148.4 150.9 153.2 155 5 22 Nonfood staples 7.17 169.7 170.8 170.7 169.5 168.7 169.6 167.6 166.5 169.4 172.9 174.0 174.1 176.1 23 Consumer chemical products .... 2.63 219.9 222.4 221.7 220.0 218.9 220.9 222.6 220.9 225.6 225.5 227.8 229.0 230.0 24 Consumer paper products 1.92 127.7 129.4 128.2 125.3 125.1 128.3 127.1 127.9 128.1 129.2 128.6 130.1 132.1 25 Consumer energy products 2.62 150.2 149.3 150.6 151.1 150.2 148.4 142.2 140.2 143.3 152.2 153.4 151.2 154.2 2266 11..4455 117700..88 116699..77 116699..55 116699..11 117711..55 116699..33 116644..11 116622..99 116666..11 117755..55 117744..33 117700..55 Equipment 27 Business 12.63 157.9 153.9 150.5 147.1 146.4 148.1 146.6 142.7 143.7 146.9 147.7 150.6 152.6 28 Industrial 6.77 134.9 128.4 123.8 118.3 117.2 117.9 118.4 113.7 113.1 113.5 114.5 116.3 118.4 29 Building and mining 1.44 214.2 190.8 182.1 169.3 165.7 171.9 173.8 153.6 145.3 141.8 146.2 148.7 153.7 30 Manufacturing 3.85 107.2 104.4 101.6 98.0 97.5 97.0 97.6 97.9 99.7 101.7 102.5 105.0 107.1 31 Power 1.47 129.9 130.1 124.7 121.0 121.0 119.7 118.3 116.0 116.2 116.6 115.0 114.1 113.5 32 Commercial transit, farm 5.86 184.4 183.3 181.4 180.5 180.2 183.0 179.2 176.1 179.2 185.4 186.1 190.2 192.1 33 Commercial 3.26 253.5 253.5 254.0 253.5 254.8 258.6 254.9 251.2 255.7 264.3 265.0 272.3 276.7 34 Transit 1.93 103.9 102.0 95.5 93.2 92.3 96.2 90.8 88.2 90.1 92.0 92.6 93.2 91.9 35 Farm .67 80.5 75.8 76.1 76.8 70.7 65.1 66.0 63.4 63.4 70.2 71.3 70.4 69.9 36 Defense and space 7.51 109.4 109.5 109.5 111.9 113.6 115.9 116.4 116.1 117.0 118.2 117.6 118.0 120.5 Intermediate products 37 Construction supplies 6.42 124.3 127.1 125.5 122.5 123.4 123.0 127.0 129.7 133.1 136.4 138.4 141.9 145.0 38 Business supplies 6.47 162.1 162.1 161.8 160.5 160.1 159.8 160.3 160.9 162.3 165.2 166.0 166.7 170.0 39 Commercial energy products 1.14 181.1 178.1 179.2 180.4 182.4 182.4 180.6 178.6 180.3 183.3 183.1 180.5 182.4 Materials 40 Durable goods materials 20.35 125.0 125.1 123.0 118.5 116.4 116.5 121.5 125.3 128.7 132.4 134.7 137.2 140.9 41 Durable consumer parts 4.58 95.3 101.0 97.1 91.4 90.0 91.1 96.2 101.6 104.0 106.5 108.5 109.5 115.0 42 Equipment parts 5.44 166.8 164.1 158.3 155.4 155.1 155.3 157.5 158.8 162.5 167.2 170.6 175.8 180.7 43 Durable materials n.e.c 10.34 116.2 115.4 115.8 111.1 107.7 107.4 113.8 118.2 121.9 125.4 127.5 129.2 131.5 44 Basic metal materials 5.57 79.9 76.1 77.7 73.0 69.1 68.7 78.1 82.4 86.0 87.8 89.3 90.4 91.3 45 Nondurable goods materials 10.47 157.5 154.5 158.5 158.2 157.3 155.6 159.7 164.0 167.5 168.7 172.1 173.7 175.3 46 Textile, paper, and chemical materials 7.62 161.1 157.7 162.2 161.5 161.0 160.0 163.7 170.0 174.3 175.9 180.2 181.9 184.1 47 Textile materials 1.85 102.2 103.2 103.3 104.4 102.5 102.1 104.7 106.4 110.6 110.6 114.6 116.0 116.8 48 Paper materials 1.62 145.6 146.6 148.9 148.9 149.7 144.1 150.1 150.1 149.5 150.8 154.4 154.8 160.3 49 Chemical materials 4.15 193.5 186.5 193.7 192.0 191.6 192.0 195.4 206.2 212.5 214.9 219.6 222.0 223.5 50 Containers, nondurable 1.70 161.4 162.8 167.3 164.9 160.8 155.2 162.1 159.6 163.8 163.2 164.3 166.1 164.6 51 Nondurable materials n.e.c 1.14 127.9 120.1 121.1 125.5 127.4 127.2 129.6 130.5 127.7 129.1 129.7 130.0 132.1 52 Energy materials 8.48 125.1 124.5 121.0 122.6 121.4 120.4 123.0 121.8 121.9 121.6 121.1 121.8 125.4 53 Primary energy 4.65 116.0 113.8 111.1 114.4 113.7 113.5 116.5 115.4 114.4 113.9 113.8 113.4 117.1 54 Converted fuel materials 3.82 136.3 137.4 133.0 132.6 130.8 128.9 130.8 129.6 131.1 131.0 129.9 132.0 135.6 Supplementary groups 55 Home goods and clothing 9.35 119.6 121.3 120.1 119.9 119.6 118.2 120.8 119.9 122.0 126.3 129.2 130.3 133.4 56 Energy, total 12.23 135.7 134.8 132.7 134.1 133.3 132.2 132.4 131.0 131.9 133.9 133.8 133.6 136.9 57 Products 3.76 159.6 158.0 159.3 160.0 160.0 158.7 153.8 151.9 154.5 161.7 162.4 160.1 162.7 58 Materials 8.48 125.1 124.5 121.0 122.6 121.4 120.4 123.0 121.8 121.9 121.6 121.1 121.8 125.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1982 1983 SIC 1982 Grouping code por- avg. tion Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May' June July Aug.f Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities. 12.05 146.3 141.3 139.7 140.4 140.4 140.1 141.3 141.7 137.7 138.9 139.7 139.6 142.1 144.5 2 Mining 6.36 126.1 116.9 114.7 115.9 116.8 118.4 121.9 114.5 112.6 111.6 112.8 113.1 115.4 117.0 3 Utilities 5.69 168.7 168.5 167.5 167.8 166.7 164.2 163.1 171.9 165.8 169.3 169.7 169.1 172.0 175.3 4 Electric 3.88 190.5 189.9 188.2 188.4 188.3 185.6 184.4 191.6 188.2 192.7 192.9 191.5 195.6 200.2 5 Manufacturing 87.95 137.6 138.0 137.1 135.0 134.0 134.5 136.7 138.0 140.4 143.1 145.1 147.4 150.3 151.4 6 Nondurable 35.97 156.2 156.9 156.7 156.2 155.3 155.6 157.4 157.5 160.7 163.3 165.4 167.7 170.0 171.1 7 Durable 51.98 124.7 124.9 123.5 120.3 119.3 119.9 122.5 124.5 126.3 129.1 131.0 133.3 136.7 137.7 Mining 8 Metal 10 .51 82.4 53.4 55.4 63.1 70.4 74.9 81.7 71.2 75.2 79.8 84.4 81.9 79.5 9 Coal 11.12 .69 142.7 135.8 127.9 143.2 134.1 129.7 144.8 135.0 127.3 125.3 125.6 124.6 139.9 145.5 10 Oil and gas extraction ... 13 4.40 131.1 123.3 121.0 119.1 120.3 122.9 124.6 117.5 114.4 112.2 112.5 113.5 114.3 115.5 11 Stone and earth minerals. 14 .75 112.1 105.7 106.3 108.5 111.9 111.7 112.8 108.1 114.0 117.7 122.5 121.7 123.8 Nondurable manufactures 12 Foods 20 8.75 151.1 150.7 149.0 151.5 152.0 152.8 154.4 147.0 152.0 153.7 155.6 157.1 13 Tobacco products 21 .67 118.0 120.6 113.3 110.6 113.0 109.9 104.7 115.9 113.4 114.8 112.9 120.0 14 Textile mill products 22 2.68 124.5 125.9 126.1 125.9 123.1 122.2 125.8 128.7 131.9 136.6 139.6 141.8 145.0 15 Apparel products 23 3 31 16 Paper and products 26 3.21 150.8 152.5 154.3 155.0 154.5 151.1 158.8 160.9 156.3 157.0 161.5 162.9 166.2 169.2 17 Printing and publishing 27 4.72 144.1 145.3 144.3 142.0 141.7 142.8 141.3 135.8 145.9 145.7 145.2 147.4 150.8 151.9 18 Chemicals and products 28 7.74 196.1 195.6 196.4 194.1 192.8 195.9 197.6 200.0 205.7 208.5 211.0 214.6 216.9 19 Petroleum products 29 1.79 121.8 121.4 122.6 123.8 120.0 118.7 113.5 108.6 114.8 120.6 123.8 123.6 124.6 121.7 20 Rubber and plastic products. 30 2.24 254.7 261.1 262.0 256.3 250.2 249.7 256.2 275.2 272.0 283.0 288.0 292.7 295.5 21 Leather and products 31 .86 60.9 60.8 60.9 59.5 57.7 56.0 59.5 64.1 59.4 58.7 59.6 60.1 62.7 Durable manufactures 22 Ordnance, private and government 19.91 3.64 86.9 86.5 86.9 89.5 91.9 92.5 93.5 93.4 91.9 93.2 92.6 93.3 95.2 97.1 23 Lumber and products 24 1.64 112.6 120.3 119.9 117.2 119.1 121.4 130.0 130.5 128.7 132.1 135.8 137.4 140.9 24 Furniture and fixtures 25 1.37 151.9 156.7 155.7 154.3 152.4 153.7 150.0 162.5 161.0 167.7 169.6 173.1 178.4 25 Clay, glass, stone products 32 2.74 128.2 128.8 130.4 128.1 127.3 125.4 128.0 124.8 135.6 138.3 139.2 141.9 144.4 26 Primary metals 33 6.57 75.3 72.9 73.2 69.6 63.6 63.5 73.1 79.4 81.2 83.1 84.9 85.5 87.2 87.5 27 Iron and steel 331.2 4.21 61.7 57.4 56.4 54.1 47.5 46.6 59.0 64.3 66.9 68.5 69.5 69.7 73.2 28 Fabricated metal products 34 5.93 114.8 114.3 112.3 107.6 107.0 107.3 107.6 112.3 113.9 115.3 115.5 118.5 121.4 122.8 29 Nonelectrical machinery .. 35 9.15 149.0 147.2 144.9 140.4 139.6 139.2 138.0 137.1 138.6 143.1 146.1 149.8 154.2 156.3 30 Electrical machinery 36 8.05 169.3 169.7 167.0 165.4 165.5 165.5 169.5 170.1 173.8 177.2 180.1 182.0 187.3 186.3 31 Transportation equipment 37 9.27 104.9 107.0 105.3 100.8 100.2 103.7 106.3 110.5 110.1 111.4 113.8 116.6 119.7 121.1 32 Motor vehicles and parts 371 4.50 109.8 116.7 113.5 103.0 101.7 108.8 113.9 124.8 123.2 125.5 130.4 136.2 142.2 145.0 33 Aerospace and miscellaneous transportation equipment. 372-9 4.77 100.4 97.8 97.6 98.6 98.7 98.9 99.1 97.0 97.7 98.1 98.1 98.1 98.6 98.6 34 Instruments 38 2.11 161.9 165.5 161.9 157.4 155.8 155.2 154.5 151.6 154.0 155.1 156.0 156.1 158.3 160.3 35 Miscellaneous manufactures 39 1.51 137.0 133.9 132.9 129.6 129.5 128.2 131.3 130.6 136.9 145.0 149.0 151.0 153.7 152.0 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 579.6 578.5 575.3 570.0 568.4 572.9 578.1 578.4 584.1 592.6 601.8 611.3 618.7 620.5 37 Final 390.9 451.1 449.2 446.3 442.8 441.3 445.8 448.3 447.3 451.3 457.7 465.6 472.7 477.6 477.6 38 Consumer goods . 277.5 308.0 309.1 309.3 306.6 305.6 306.8 310.9 312.0 313.8 318.8 325.6 331.1 333.7 334.8 39 Equipment 113.4 143.1 140.1 137.0 136.2 135.7 138.9 137.4 135.3 137.5 138.9 140.0 141.6 143.9 142.8 40 Intermediate 116.6 128.5 129.3 129.0 127.2 127.1 127.1 129.8 131.1 132.8 134.9 136.2 138.6 141.1 143.0 1. 1972 dollar value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • September 1983 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1982 1983 IItteemm 1980 11998811 Nov. Dec. Jan. Feb. Mar. Apr. May' June' July Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,191 986 1,001 1,227 1,326 1,447 1,479 1,467 1,536 1,635 1,761 1,816 ? 1-family 710 564 546 738 753 866 835 859 841 940 1,013 932 3 2-or-more-family 480 421 454 489 573 581 644 608 695 695 748 884 4 Started 1,292 1,084 1,062 1,361 1,280 1,694 1,784 1.605 1,506 1,807 1,752 1,741 5 1-family 852 705 663 868 842 1,126 1,103 1.008 1,001 1,183 1,146 1,010 6 2-or-more-family 440 379 400 493 438 568 681 597 505 624 606 731 7 8 Under construction, end of period1 5 8 1 9 5 6 6 3 8 8 2 2 4 7 0 2 0 0 7 39 1 5 2 7 41 3 1 0 4 7 2 5 8 6 7 45 9 5 6 4 8 7 2 2 8 ' 4 8 8 5 9 9 ' ' 5 8 1 9 8 9 9 53 3 6 7 T 9 2-or-more-family 382 301 320 317 319 329 341 356' 370 382 401 | 10 Completed 1,502 1,266 1,006 1,053 1,035 1,195 1,138 1,147' 1,164' 1,354 1,388 n.a. 11 1-family 957 818 631 679 647 782 709 788' 803' 851 950 I 12 2-or-more-family 545 447 374 374 388 413 429 359' 361' 503 438 1 \ 13 Mobile homes shipped 222 241 239 251 243 284 283 276 291 298 308 Merchant builder activity in 1-family units 14 545 436 413 545 529 611 593 611' 635' 661 663 620 15 Number for sale, end of period1 342 278 255 246 251 259 262 262 266' 277 290 293 Price (thousands of dollars)2 Median 16 Units sold 64.7 68.8 69.3 73.5 71.7 73.5 73.8 72.5' 74.7' 74.5 76.1 75.0 Average 17 Units sold 76.4 83.1 83.8 87.8 86.7 87.2 8866..88 8866..22'' 8877..66 8888..55 9900..77 88.1 EXISTING UNITS (1-family) 18 Number sold 2,974 2,418 1,991 2,150 2,260 2,580 2,460 2,710 2,730 2,900 2,940 2,810 Price of units sold (thousands of dollars)2 19 62.1 66.1 67.7 67.7 67.8 68.1 6688..22 68.9 6688..88 69.2 7711..44 71.6 20 Average 72.7 78.0 80.4 80.4 80.6 80.0 80.3 81.1 81.3 81.7 84.7 84.1 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 230,712 239,418 232,048 243,714 240,207 247,914 243,032 241,908 245,548 253,096 263,061 267,710 ?? 175,700 186,069 180,979 190,520 190,768 195,032 194,331 194,865 197,998 204,647 213,428 217,192 73 Residential 87,262 86,567 74,809 81,245 86,018 89,701 93,568 96.127 101,987 107,533 113,787 117,699 24 Nonresidential, total 88,438 99,502 106,170 109,275 104,750 105,331 100,763 98,738 96,011 97,114 99,641 99,493 Buildings 75 Industrial 13,839 17,031 17,346 16,716 15,631 15,182 14,315 14,263 1133,,222233 13,047 13,136 12,606 76 Commercial 29,940 34,243 37,281 37,861 36,934 38,167 36,675 35.469 33,619 33,291 35,898 35,753 77 Other 8,654 9,543 10,507 11,517 11,784 11,983 11,664 11,598 10,770 11,237 10,974 11,639 28 Public utilities and other 36,005 38,685 41,036 43,181 40,401 39,999 38,109 37,408 38,399 39,539 39,633 39,495 79 Public 55,011 53,346 51,068 53,194 49,439 52,882 48,701 47,043 47,549 48,450 49,633 50,517 30 1,880 1,966 2,205 2,572 2,432 2,341 2,421 2,541 2,782 2,232 2,166 2,376 31 Highway 13,770 13,599 13,521 14,409 13,048 13,966 12,509 11,866' 12,900 13,044 12,925 13,648 37 Conservation and development 5,089 5,300 5,029 4,708 4,625 4,756 4,532 4,894 4,706 4,240 4,564 5,287 33 Other 34,272 32,481 30,313 31,505 29,334 31,819 29,239 27,742 27,161 28,934 29,978 29,206 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 n t g h 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 Index level Item July 1982 1983 1983 1983 11998822 11998833 (1967 JJuunnee JJuunnee = 100)1 Sept. Dec. Mar. June Mar. Apr. May June July CONSUMER PRICES2 1 7.1 2.6 4.1 .5 .4 5.4 .1 .6 .5 .2 .4 299.3 1 5.2 1.5 .6 .8 2.8 1.7 .6 .4 .3 -.3 -.1 292.0 1.1 2.1 8.1 10.2 -25.1 21.0 -.9 2.0 2.5 .3 .3 430.1 l\ 8.5 3.0 4.7 -.3 4.4 3.9 .2 .4 .3 .3 .6 286.8 5 6.7 4.0 2.4 5.4 5.7 2.9 .4 .1 .2 .4 .7 242.7 1100..00 2.0 4.6 -4.8 3.7 4.6 .1 .5 .3 .3 .4 337.9 PRODUCER PRICES 7 3.5 1.8 4.2 5.2 -4.7 2.9 -.3' -.1 .3 .5 .1 285.7 111 Q 8 000 -7 3 5 . . . 9 8 6 - 3 .9 . . 1 3 - 3 7 4 0 . . . 7 2 9 7 7 . . . 0 9 8 -3 -2 5 4 , . . < 5 1 r ' y i - 2 2 . . 3 . 5 ' < ' y -3. . . 1 C 2 ' ' -2 1 . . . 4 1 1 ' ' ' - 2 . . 5 . 2 1 - 3 . . 6 . 2 5 -.6 . . 2 5 2 7 2 9 6 4 5 0 0 . . . 3 8 3 111111 55..88 2.8 3.5 3.6 2.0r 2.1' .3' .0' .2 .2 .1 287.4 111222 1.1 0.7 2.3 1.5 -4.7' 3.6' -.4' -.4 .4 .9 .3 318.1 111333 22..44 11..44 11..00 1.0 .8' 2.8' .1' -.1' .4 .4 .3 295.1 Crude materials 1144 -1.7 -3.0 -26.4 1.3 18.1 .8 .7' 3.0 -1.2 -1.6 -2.6 248.6 IISS -.2 .0 8.7 6.4 -9.2' -4.8' .2' -.9' -.3 .0 -.6 787.1 1166 --1122..44 66..11 2.9 -8.0 -16.2' 59.3' 1.7' 2.1' 5.2 4.6 2.2 250.3 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 • September 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 Q2 Q3 Q4 Q1 Q2r GROSS NATIONAL PRODUCT 1 Total 2,631.7 2,954.1 3,073.0 3,070.2 3,090.7 3,109.6 3,171.5 3,270.0 By source 2 Personal consumption expenditures 1,668.1 1,857.2 1,991.9 1,972.8 2,008.8 2,046.9 2,073.0 2,148.4 3 Durable goods 214.7 236.1 244.5 242.9 243.4 252.1 258.5 278.0 4 Nondurable goods 668.8 733.9 761.0 754.7 766.6 773.0 777.1 798.2 5 Services 784.5 887.1 986.4 975.2 998.9 1,021.8 1,037.4 1,072.2 6 Gross private domestic investment 401.9 474.9 414.5 432.5 425.3 377.4 404.1 451.8 7 Fixed investment 411.7 456.5 439.1 443.7 430.2 433.8 443.5 463.7 8 Nonresidential 308.8 352.2 348.3 352.7 342.3 337.0 332.1 335.9 9 Structures 110.9 133.4 141.9 144.2 140.0 138.6 132.9 127.4 10 Producers' durable equipment 197.9 218.9 206.4 208.5 202.2 198.4 199.3 208.5 11 Residential structures 102.9 104.3 90.8 91.0 87.9 96.8 111.3 127.7 12 Nonfarm 98.1 99.8 86.0 86.1 83.4 91.2 106.7 122.7 13 Change in business inventories -9.8 18.5 -24.5 -11.2 -4.9 -56.4 -39.4 -11.9 14 Nonfarm -4.5 10.9 -23.1 -8.8 -2.3 -53.7 -39.0 -10.4 15 Net exports of goods and services 24.0 26.3 17.4 33.3 .9 5.6 17.0 -12.3 16 Exports 338.8 368.8 347.6 364.5 346.0 321.6 326.9 322.8 17 Imports 314.8 342.5 330.2 331.2 345.0 316.1 309.9 335.1 18 Government purchases of goods and services 537.8 595.7 649.2 631.6 655.7 679.7 677.4 682.1 19 Federal 197.1 229.2 258.7 244.1 261.7 279.2 273.5 272.7 20 State and local 340.8 366.5 390.5 387.5 394.0 400.5 404.0 409.4 By major type of product 21 Final sales, total 2,641.5 2,935.6 3,097.5 3,081.4 3,095.6 3,165.9 3,210.9 3,281.9 22 Goods 1,140.6 1,291.9 1,280.9 1,290.8 1,286.7 1,264.8 1,292.2 1,345.7 23 Durable 477.9 528.0 500.8 514.3 518.4 474.0 482.7 534.9 24 Nondurable 662.7 763.9 780.1 776.5 768.3 790.8 809.5 810.8 25 Services 1,225.2 1,374.2 1,511.2 1,496.4 1,527.2 1,560.5 1,588.4 1,623.5 26 Structures 266.0 288.0 281.0 283.0 276.9 284.3 290.9 300.7 27 Change in business inventories -9.8 18.5 -24.5 -11.2 -4.9 -56.4 -39.4 -11.9 28 Durable goods -4.1 3.6 -15.5 -2.5 6.4 -45.0 -38.2 -9.5 29 Nondurable goods -5.7 14.9 -9.1 -8.7 -11.3 -11.4 -1.2 -2.4 30 MEMO: Total GNP in 1972 dollars 1,475.0 1,513.8 1,485.4 1,489.3 1,485.7 1,480.7 1,490.1 1,523.4 NATIONAL INCOME 31 Total 2,116.6 2,373.0 2,450.4 2,448.9 2,458.9 2,474.0 2,528.5 2,612.0 32 Compensation of employees 1,599.6 1,769.3 1,865.7 1,859.9 1,879.5 1,889.0 1,923.7 1,968.8 33 Wages and salaries 1,356.6 1,493.2 1,568.1 1,563.9 1,579.8 1,586.0 1,610.6 1,647.2 34 Government and government enterprises 260.3 284.4 306.0 303.1 307.7 314.5 319.2 323.3 35 Other 1,096.4 1,208.8 1,262.1 1,260.8 1,272.1 1,271.5 1,291.5 1,323.9 36 Supplement to wages and salaries 243.0 276.0 297.6 296.0 299.7 302.9 313.1 321.6 37 Employer contributions for social insurance 115.0 132.5 140.9 140.6 141.5 142.5 148.8 151.5 38 Other labor income 128.0 143.5 156.6 155.4 158.2 160.4 164.3 170.1 39 Proprietors' income1 117.5 120.2 109.0 104.9 103.6 116.2 120.6 129.7 40 Business and professional1 95.6 89.7 87.5 88.1 87.8 90.2 98.4 106.1 41 Farm1 21.8 30.5 21.5 16.8 15.8 26.0 22.2 23.6 42 Rental income of persons2 31.5 41.4 49.9 49.0 50.9 52.3 54.1 54.8 43 Corporate profits1 175.4 192.3 164.8 166.8 168.5 161.9 181.8 214.7 44 Profits before tax3 234.6 227.0 174.2 178.8 177.3 167.5 169.7 199.1 45 Inventory valuation adjustment -42.9 -23.6 -8.4 -8.5 -9.0 -10.3 -1.7 -9.8 46 Capital consumption adjustment -16.3 -11.0 -1.1 -3.5 .1 4.7 13.9 25.4 47 Net interest 192.6 249.9 261.1 268.3 256.4 254.7 248.3 244.0 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 Q2 Q3 Q4 Ql Q2' PERSONAL INCOME AND SAVING 1 Total personal income 2,165.3 2,435.0 2,578.6 2,563.2 2,591.3 2,632.0 2,657.7 2,715.7 2 Wage and salary disbursements 1,356.7 1,493.2 1,568.1 1,563.8 1,579.8 1,586.0 1,610.7 1,648.5 3 Commodity-producing industries 468.1 509.5 509.2 513.7 508.9 499.5 508.6 522.3 4 Manufacturing 354.6 385.3 383.8 386.8 384.8 377.4 385.4 397.4 5 Distributive industries 330.7 361.6 378.8 378.1 381.9 383.5 386.4 394.3 6 Service industries 297.6 337.7 374.1 369.1 381.2 388.5 396.4 407.3 7 Government and government enterprises 260.3 284.4 306.0 303.0 307.7 314.5 319.2 324.6 8 Other labor income 128.0 143.5 156.6 155.4 158.2 160.4 164.3 170.1 9 Proprietors' income' 117.5 120.2 109.0 104.9 103.6 116.2 120.6 129.7 10 Business and professional1 95.6 89.7 87.5 88.1 87.8 90.2 98.4 106.1 11 Farm1 21.8 30.5 21.5 16.8 15.8 26.0 22.2 23.6 12 Rental income of persons2 31.5 41.4 49.9 49.0 50.9 52.3 54.1 54.8 13 Dividends 56.8 62.8 66.4 65.6 66.4 67.9 68.8 69.3 14 Personal interest income 266.0 341.3 366.2 371.9 364.8 363.1 357.2 356.7 15 Transfer payments 297.6 337.2 374.6 364.2 380.4 399.0 398.5 405.2 16 Old-age survivors, disability, and health insurance benefits... 154.2 182.0 204.5 197.3 209.3 216.5 217.4 221.1 17 LESS: Personal contributions for social insurance 88.7 104.6 112.0 111.7 112.7 112.9 116.5 118.6 18 EQUALS: Personal income 2,165.3 2,435.0 2,578.6 2,563.2 2,591.3 2,632.0 2,657.7 2,715.7 19 LESS: Personal tax and nontax payments 336.5 387.4 402.1 404.2 399.8 404.1 401.8 412.7 20 EQUALS: Disposable personal income 1,828.9 2,047.6 2,176.5 2,159.0 2,191.5 2,227.8 2,255.9 2,303.0 21 LESS: Personal outlays 1,718.7 1,912.4 2,051.1 2,031.9 2,068.4 2,107.0 2,134.2 2,210.8 22 EQUALS: Personal saving 110.2 135.3 125.4 127.1 123.0 120.8 121.7 92.2 MEMO: Per capita (1972 dollars) 23 Gross national product 6,478 6,584 6,399 6,425 6,393 6,355 6,382 6,511 24 Personal consumption expenditures 4,092 4,161 4,179 4,180 4,178 4,205 4,226 4,316 25 Disposable personal income 4,487 4,587 4,567 4,574 4,558 4,576 4,599 4,626 26 Saving rate (percent) 6.0 6.6 5.8 5.9 5.6 5.4 5.4 4.0 GROSS SAVING 27 Gross saving 405.9 483.8 405.8 439.5 397.9 351.3 398.5 421.1 28 Gross private saving 435.4 509.6 521.6 520.7 524.9 526.6 541.5 533.0 29 Personal saving 110.2 135.3 125.4 127.1 123.0 120.8 121.7 92.2 30 Undistributed corporate profits' 32.1 44.8 37.0 37.5 38.9 37.5 48.9 67.7 31 Corporate inventory valuation adjustment -42.9 -23.6 -8.4 -8.5 -9.0 -10.3 -1.7 -9.8 Capital consumption allowances 32 Corporate 179.3 202.9 222.0 220.2 224.5 227.7 228.3 230.0 33 Noncorporate 113.8 126.6 137.2 135.9 138.5 140.5 142.6 143.1 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -30.7 -26.9 -115.8 -81.2 -127.0 -175.3 -142.9 -111.9 36 Federal -61.3 -62.2 -147.1 -113.2 -158.3 -208.2 -183.3 -163.7 37 State and local 30.6 35.3 31.3 32.0 31.3 32.9 40.4 51.8 38 Capital grants received by the United States, net 1.2 1.1 .0 .0 .0 .0 .0 .0 39 Gross investment 408.2 478.9 406.2 441.3 400.5 355.5 397.4 415.9 40 Gross private domestic 401.9 474.9 414.5 432.5 425.3 377.4 404.1 451.8 41 Net foreign 6.3 4.0 -8.3 8.7 -24.8 -21.9 -6.7 -35.8 42 Statistical discrepancy 2.3 -4.9 .5 1.7 2.5 4.2 -1.2 -5.2 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 • September 1983 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1982 1983 IItteemm ccrreeddiittss oorr ddeebbiittss 11998800 11998811 11998822 Q1 Q2 Q3 Q4 Ql" 1 Balance on current account 421 4,592 -11,211 564 11,,443344 -6,596 --66,,662211 --33,,004455 259 22,,221188 -8,143 --55,,554466 --22,,996611 3 Merchandise trade balance2 -25,544 -28,067 -36,389 -6,103 --55,,885544 -13,078 --1111,,335544 --88,,773388 4 Merchandise exports 224,237 237,019 211,217 55,636 5544,,999966 52,241 4488,,334444 4499,,556633 5 Merchandise imports -249,781 -265,086 -247,606 -61,739 --6600,,885500 -65,319 --5599,,669988 --5588,,330011 6 Military transactions, net -2,286 -1,355 179 -51 220011 54 --2266 770022 7 Investment income, net3 29,570 33,484 27,304 6,937 77,,553366 6,821 66,,000088 55,,223355 8 Other service transactions, net 5,738 7,462 5,729 1,842 11,,335533 1,349 11,,118822 11,,331199 9 Remittances, pensions, and other transfers -2,347 -2,382 -2,621 -603 -702 -656 -661 -644 10 U.S. government grants (excluding military) -4,709 -4,549 -5,413 -1,458 -1,100 -1,086 -1,770 -919 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,140 -5,078 -5,732 -807 -1,489 -2,502 -934 -1,060 12 Change in U.S. official reserve assets (increase, -) -8,155 -5,175 -4,965 -1,089 -1,132 -794 -1,949 -787 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -16 -1,823 -1,371 -400 -241 -434 -297 -98 15 Reserve position in International Monetary Fund -1,667 -2,491 -2,552 -547 -814 -459 -732 -2,139 16 Foreign currencies -6,472 -861 -1,041 -142 -77 99 -920 1,450 17 Change in U.S. private assets abroad (increase, -)3 -72,757 -100,348 -107,348 -29,560 -38,313 -22,803 -16,670 -19,936 18 Bank-reported claims -46,838 -83,851 -109,346 -32,551 -38,653 -20,631 -17,511 -17,483 19 Nonbank-reported claims -3,174 -1,181 6,976 3,918 -277 998 2,337 n.a. 20 U.S. purchase of foreign securities, net -3,524 -5,636 -7,986 -581 -546 -3,331 -3,527 -2,032 21 U.S. direct investments abroad, net3 -19,221 -9,680 3,008 -346 1,163 161 2,031 -421 22 Change in foreign official assets in the United States (increase, +) 15,566 5,430 3,172 -3,061 1,930 2,642 1,661 -37 23 U.S. Treasury securities 9,708 4,983 5,759 -1,327 -2,094 4,834 4,346 3,166 24 Other U.S. government obligations 2,187 1,289 -670 -301 258 -71 -556 -568 25 Other U.S. government liabilities4 685 -28 504 75 459 -160 130 -390 26 Other U.S. liabilities reported by U.S. banks -159 -3,479 -2,054 -1,697 3,271 -1,911 -1,717 -1,898 27 Other foreign official assets5 3,145 2,665 -367 189 36 -50 -542 -347 28 Change in foreign private assets in the United States (increase, +)3 39,356 75,248 84,693 30,185 29,683 14,971 9,856 17,311 29 U.S. bank-reported liabilities 10,743 42,154 64,263 25,685 24,778 10,977 2,823 9,853 30 U.S. nonbank-reported liabilities 6,845 942 -3,104 -182 -2,517 -425 20 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,645 2,982 7,004 1,288 2,095 1,364 2,257 2,947 32 Foreign purchases of other U.S. securities, net 5,457 7,171 6,141 1,313 2,434 420 1,975 2,887 33 Foreign direct investments in the United States, net3 13,666 21,998 10,390 2,081 2,893 2,635 2,781 1,624 34 Allocation of SDRs 1,152 1,093 0 0 0 0 0 0 35 Discrepancy 29,556 24,238 41,390 3,768 7,887 15,082 14,657 7,554 -729 881 -1,190 1,042 -340 37 Statistical discrepancy in recorded data before seasonal adjustment 29,556 24,238 41,390 4,497 7,006 16,272 13,615 7,894 MEMO'. Changes in official assets 38 U.S. official reserve assets (increase, -) -8,155 -5,175 -4,965 -1,089 -1,132 -794 -1,949 -787 39 Foreign official assets in the United States (increase, +) 14,881 5,458 2,668 -3,136 1,471 2,802 1,531 353 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 12,769 13,581 7,420 5,190 3,024 368 -1,162 -1,442 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 756 680 644 93 125 267 158 42 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 (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. 1983 IItteemm 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May June July 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 220,626 233,677 212,193 17,393 16,326 16,752 16,074 15,566 17,008 16,629 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 244,871 261,305 243,952 20,021 19,015 19,525 19,771 21,514 21,024 21,950 3 Trade balance -24,245 -27,628 -31,759 -2,628 -2,689 -2,774 -3,697 -5,948 -4,016 -5,321 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 (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 1983 TTyyppee 11998800 11998811 11998822 Feb. Mar. Apr. May June July Aug. 1 Total 26,756 30,075 33,958 34,233 34,261 34,173 33,931 33,876 33,373 32,626 2 Gold stock, including Exchange Stabilization Fund1 11,160 11,151 11,148 11,139 11,138 11,132 11,132 11,131 11,131 11,128 3 Special drawing rights2 3 2,610 4,095 5,250 5,284 5,229 5,192 5,525 5,478 5,496 5,543 4 Reserve position in International Monetary Fund2 2,852 5,055 7,348 8,594 9,293 9,284 9,424 9,413 9,475 9,278 5 Foreign currencies4 5 10,134 9,774 10,212 9,216 8,601 8,565 7,850 7,854 7,271 6,657 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 1983 AAsssseettss 11998800 11998811 11998822 Feb. Mar. Apr. May June July Aug. 1 Deposits 411 505 328 352 424 322 445 279 369 248 Assets held in custody 2 U.S. Treasury securities' 102,417 104,680 112,544 116,428 114,999 114,880 115,401 114,499 118,105 113,476 3 Earmarked gold2 14,965 14,804 14,716 14,752 14,726 14,723 14,727 14,724 14,727 14,693 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 • September 1983 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1982 1983 AAsssseett aaccccoouunntt 11997799 11998800 11998811 Dec/ Jan. Feb. Mar. Apr/ May June? All foreign countries 1 Total, all currencies 364,409 401,135 462,847 469,367 462,112 458,201 465,130 453,219 452,173 465,886 2 Claims on United States 32,302 28,460 63,743 91,768 89,695 87,525 93,718 91,262 91,888 97,698 3 Parent bank 25,929 20,202 43,267 61,629 59,694 58,500 63,342' 61,792 62,596 65,644 4 Other 6,373 8,258 20,476 30,139 30,001 29,025 30,376' 29,470 29,292 32,054 5 Claims on foreigners 317,330 354,960 378,954 358,195 352,906 351,407 352,416 343,994 342,240 350,013 6 Other branches of parent bank 79,662 77,019 87,821 91,143 89,488 89,772 89,083 84,839 86,488 88,297 123,420 146,448 150,763 133,577 131,028 129,169 132,108 127,290 123,945 130,047 8 Public borrowers 26,097 28,033 28,197 24.090 24,602 24,734 24,742 25,114 25,547 25,444 9 Nonbank foreigners 88,151 103,460 112,173 109,385 107,788 107,732 106,483 106,751 106,260 106,225 10 Other assets 14,777 17,715 20,150 19,404 19,511 19,269 18,996 17,963 18,045 18,175 11 Total payable in U.S. dollars 267,713 291,798 350,735 361,647 354,749 350,562 356,474 344,541 343,771 357,312 12 Claims on United States 31,171 27,191 62,142 90,048 88,001 85,901 91,281 88,985 89,532 95,235 13 Parent bank 25,632 19,896 42,721 60,973 58,926 57,799 62,409' 61,156 61,797 64,315 14 Other 5,539 7,295 19,421 29,075 29,075 28,102 28.872' 27,829 27,735 30,920 15 Claims on foreigners 229,120 255,391 276,937 259,583 254,926 253,037 253,585 245,022 243,838 251,392 16 Other branches of parent bank 61,525 58,541 69,398 73,512 71,188 71,937 70,768 66,337 67,839 69,448 17 Banks 96,261 117,342 122,110 106,275 103,596 100,797 103,472 98,603 95,961 102,725 18 Public borrowers 21,629 23,491 22,877 18,374 18,785 18,962 18,795 18,941 19,001 18,708 19 Nonbank foreigners 49,705 56,017 62,552 61,422 61,357 61,341 60,550 61,141 61,037 60,511 20 Other assets 7,422 9,216 11,656 12,016 11,822 11,624 11,608 10,534 10,401 10,685 United Kingdom 21 Total, all currencies 130,873 144,717 157,229 161,067 157,464 156,577 156,022 152,408 151,821 155,817 22 Claims on United States 11,117 7,509 11,823 27,354 27,175 26,423 26,259 25,139 24,847 26,465 23 Parent bank 9,338 5,275 7,885 23,017 22,539 21,962 21,912 20,657 20,456 21,384 24 Other 1,779 2,234 3,938 4,337 4,636 4,461 4,347 4,482 4,391 5,081 25 Claims on foreigners 115,123 131,142 138,888 127,734 124,354 124,214 123,993 121,727 121,187 123,835 26 Other branches of parent bank 34,291 34,760 41,367 37,000 34,959 35,437 36,171 32,973 33,361 35,787 27 Banks 51,343 58,741 56,315 50,767 49,497 48,580 48,976 48,301 47,623 48,328 28 Public borrowers 4,919 6,688 7,490 6,240 6,421 6,592 6,337 6,591 6,599 6,570 29 Nonbank foreigners 24,570 30,953 33,716 33,727 33,477 33,605 32,509 33,862 33,604 33,150 30 Other assets 4,633 6,066 6,518 5,979 5,935 5,940 5,770 5,542 5,787 5,517 31 Total payable in U.S. dollars 94,287 99,699 115,188 123,740 120,233 119,273 118,891 113,170 112,585 118,023 32 Claims on United States 10,746 7,116 11,246 26,761 26,581 25,829 25,597 24,374 24,044 25,536 9,297 5,229 7,721 22,756 22,250 21,700 21,626 20,354 20,092 21,017 34 Other 1,449 1,887 3,525 4,005 4,331 4,129 3,971 4,020 3,952 4,519 35 Claims on foreigners 81,294 89,723 99,850 92,228 89,137 88,973 88,797 84,981 84,779 88,587 36 Other branches of parent bank 28,928 28,268 35,439 31,648 29,380 29,918 30,589 27,131 27,579 30,025 37 Banks 36,760 42,073 40,703 36,717 35,616 34,499 34,442 33,228 32,801 34,417 38 Public borrowers 3,319 4,911 5,595 4,329 4,600 4,789 4,413 4,522 4,497 4,547 39 Nonbank foreigners 12,287 14,471 18,113 19,534 19,541 19,767 19,353 20,100 19,902 19,598 40 Other assets 2,247 2,860 4,092 4,751 4,515 4,471 4,497 3,815 3,762 3,900 Bahamas and Caymans 41 Total, all currencies 108,977 123,837 149,108 145,091 142,115 138,730 145,663 142,049 140,941 146,720 42 Claims on United States 19,124 17,751 46,546 59,403 57,302 56,225 62,576 61,417 62,526 66,176 43 Parent bank 15,196 12,631 31,643 34,653 32,958 32,839 37,967' 37,971 39,031 40,318 44 Other 3,928 5,120 14,903 24,750 24,344 23,386 24,609' 23,446 23,495 25,858 45 Claims on foreigners 86,718 101,926 98,057 81,387 80,722 78,527 79,150 76,959 74,759 76,947 46 Other branches of parent bank 9,689 13,342 12,951 18,720 20,091 19,730 17,512 18,295 18,537 16,658 47 Banks 43,189 54,861 55,151 42,636 40,770 39,101 42,347 39,607 37,531 41,746 48 Public borrowers 12,905 12,577 10,010 6,413 6,434 6,494 6,540 6,388 6,170 5,936 49 Nonbank foreigners 20,935 21,146 19,945 13,618 13,427 13,202 12,751 12,669 12,521 12,607 50 Other assets 3,135 4,160 4,505 4,301 4,091 3,978 3,937 3,673 3,656 3,597 51 Total payable in U.S. dollars 102,368 117,654 143,743 139,540 136,278 132,884 139,549 136,115 135,112 140,629 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.14 Continued 1982 1983 LLiiaabbiilliittyy aaccccoouunntt 11997799 11998800 11998811 Dec/ Jan. Feb/ Mar. Apr/ May June? All foreign countries 52 Total, all currencies 364,409 401,135 462,847 469,367 462,112 458,201 465,130 453,219 452,173 465,886 53 To United States 66,689 91,079 137,767 178,878 178,390 178,244 188,828 184,017 183,793 191,557 54 Parent bank 24,533 39,286 56,344 75,521 79,893 79,447 84,966 81,050 80,786 84,203 55 Other banks in United States 13,968 14,473 19,197 33,368 32,797 32,650 34,006 32,687 31,815 33,994 56 Nonbanks 28,188 37,275 62,226 69,989 65,700 66,147 69,856 70,280 71,192 73,360 57 To foreigners 283,510 295,411 305,630 270,653 265,278 261,672 258,524 251,273 250,791 255,962 58 Other branches of parent bank 77,640 75,773 86,396 90,148 88,993 88,555 86,900 84,347 85,313 86,542 59 Banks 122,922 132,116 124,906 96,739 92,875 90,244 91,746 86,950 84,436 87,423 60 Official institutions 35,668 32,473 25,997 19,614 20,246 19,739 17,808 18,384 17,189 18,621 61 Nonbank foreigners 47,280 55,049 68,331 64,152 63,164 63,134 62,070 61,592 63,853 63,376 62 Other liabilities 14,210 14,690 19,450 19,836 18,444 18,285 17,778 17,929 17,589 18,367 63 Total payable in U.S. dollars 273,857 303,281 364,447 378,938 370,202 367,606 374,432 363,515 363,251 275,928 64 To United States 64,530 88,157 134,700 175,391 174,765 174,571 185,330 180,596 180,017 187,873 65 Parent bank 23,403 37,528 54,492 73,195 77,621 77,114 82,655 78,968 78,520 82,006 66 Other banks in United States 13,771 14,203 18,883 33,003 32,273 32,223 33,566 32,226 31,222 33,564 67 Nonbanks 27,356 36,426 61,325 69,193 64,871 65,234 69,109 69,402 70,275 72,303 68 To foreigners 201,514 206,883 217,602 192,323 185,298 183,656 179,704 173,533 174,154 178,701 69 Other branches of parent bank 60,551 58,172 69,299 72,878 71,100 70,887 68,999 66,387 66,972 68,324 70 Banks 80,691 87,497 79,594 57,355 52,225 51,234 52,156 48,428 47,325 50,186 71 Official institutions 29,048 24,697 20,288 15,055 15,940 15,381 13,536 13,801 12,631 13,912 72 Nonbank foreigners 31,224 36,517 48,421 47,035 46,033 46,154 45,013 44,917 47,226 46,279 73 Other liabilities 7,813 8,241 12,145 11,224 10,139 9,379 9,398 9,386 9,080 9,354 United Kingdom 74 Total, all currencies 130,873 144,717 157,229 161,067 157,464 156,577 156,022 152,408 151,821 155,817 75 To United States 20,986 21,785 38,022 53,954 52,650 51,927 55,309 52,883 53,603 57,138 76 Parent bank 3,104 4,225 5,444 13,091 14,287 14,080 14,616 14,343 13,907 14,461 77 Other banks in United States 7,693 5,716 7,502 12,205 12,343 12,198 13,172 12,119 12,773 13,689 78 Nonbanks 10,189 11,844 25,076 28,658 26,020 25,649 27,521 26,421 26,923 28,988 79 To foreigners 104,032 117,438 112,255 99,567 97,827 97,515 93,835 92,460 91,071 91,545 80 Other branches of parent bank 12,567 15,384 16,545 18,361 19,343 21,008 19,653 19,470 20,235 18,376 81 Banks 47,620 56,262 51,336 44,020 41,073 39,892 40,867 38,960 37,594 38,238 87 Official institutions 24,202 21,412 16,517 11,504 12,377 12,025 10,252 10,520 9,413 10,848 83 Nonbank foreigners 19,643 24,380 27,857 25,682 25,034 24,590 23,063 23,510 23,829 24,083 84 Other liabilities 5,855 5,494 6,952 7,546 6,987 7,135 6,878 7,065 7,147 7,134 85 Total payable in U.S. dollars 95,449 103,440 120,277 130,261 126,286 126,007 126,088 120,683 120,301 124,705 86 To United States 20,552 21,080 37,332 53,029 51,808 50,977 54,520 51,993 52,473 56,092 87 Parent bank 3,054 4,078 5,350 12,814 14,105 13,859 14,476 14,212 13,696 14,308 88 Other banks in United States 7,651 5,626 7,249 12,026 12,128 12,041 12,987 11,929 12,439 13,499 89 Nonbanks 9,847 11,376 24,733 28,189 25,575 25,077 27,057 25,852 26,338 28,285 90 To foreigners 72,397 79,636 79,034 73,477 71,000 71,994 68,309 65,485 64,621 65,428 91 Other branches of parent bank 8,446 10,474 12,048 14,300 15,081 16,709 14,918 14,815 15,636 14,117 9? Banks 29,424 35,388 32,298 28,810 25,177 25,563 26,395 23,821 22,960 23,895 93 Official institutions 20,192 17,024 13,612 9,668 10,657 10,121 8,419 8,474 7,306 8,786 94 Nonbank foreigners 14,335 16,750 21,076 20,699 20,085 19,601 18,577 18,375 18,719 18,630 95 Other liabilities 2,500 2,724 3,911 3,755 3,478 3,036 3,259 3,205 3,207 3,185 Bahamas and Caymans 96 Total, all currencies 108,977 123,837 149,108 145,091 142,115 138,730 145,663 142,049 140,941 146,720 97 To United States 37,719 59,666 85,759 104,385 104,398 104,520 111,424 109,644 108,789 111,494 98 Parent bank 15,267 28,181 39,451 47,041 50,441 49,634 55,620 52,009 51,087 53,324 99 Other banks in United States 5,204 7,379 10,474 18,466 17,561 17,328 17,328 17,451 16,143 17,008 100 Nonbanks 17,248 24,106 35,834 38,878 36,396 37,558 38,476 40,184 41,559 41,162 101 To foreigners 68,598 61,218 60,012 38,249 35,470 31,858 32,030 30,187 29,976 33,151 102 Other branches of parent bank 20,875 17,040 20,641 15,796 14,258 11,808 11,536 10,515 10,272 12,020 103 Banks 33,631 29,895 23,202 10,166 9,279 8,451 8,999 8,126 7,618 9,165 104 Official institutions 4,866 4,361 3,498 1,967 1,849 1,720 1,678 1,710 1,734 1,796 105 Nonbank foreigners 9,226 9,922 12,671 10,320 10,084 9,879 9,817 9,836 10,352 10,170 106 Other liabilities 2,660 2,953 3,337 2,457 2,247 2,352 2,209 2,218 2,176 2,075 107 Total payable in U.S. dollars 103,460 119,657 145,284 141,843 138,702 135,377 142,465 138,910 137,845 143,430 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • September 1983 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1983 IItteemm 11998811'' 11998822'' Jan.' Feb.' Mar.' Apr.' May June July? 1 Total1 169,926 172,598 174,986 172,739 172,915 173,335 175,054 175,217 176,196 By type 2 Liabilities reported by banks in the United States2 26,928 24,918 23,882 21,464 22,980 22,821 24,111 24,324 21,957 3 U.S. Treasury bills and certificates3 52,389 46,658 50,432 49,954 47,917 48,399 49,281 49,068 53,581 U.S. Treasury bonds and notes 4 Marketable 53,186 67,684 67,704 69,272 70,233 70,554 70,585 71,029 70,121 5 Nonmarketable4 11,791 8,750 8,750 7,950 7,950 7,950 7,950 7,950 7,950 6 U.S. securities other than U.S. Treasury securities5 25,632 24,588 24,218 24,099 23,835 23,611 23,127 22,846 22,587 By area 7 Western Europe1 65,707 61,242 62,262 61,882 61,470 61,923 62,994 63,649 66,176 8 Canada 2,403 2,070 2,430 2,754 2,942 2,770 3,613 3,741 3,809 9 Latin America and Caribbean 6,953 6,032 7,138 6,099 5,576 6,281 5,918 6,509 5,421 10 Asia 91,791 95,993 95,366 95,723 96,850 95,377 95,581 94,748 94,264 11 Africa 1,829 1,350 1,716 1,327 1,162 1,208 1,203 1,076 1,138 12 Other countries6 1,243 5,911 6,074 4,954 4,915 5,776 5,745 5,494 5,388 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 Sept. Dec.' Mar. June? 1 Banks' own liabilities 1,918 3,748 3,523 4,575 4,760 5,072 5,804 2 Banks' own claims 2,419 4,206 4,980 6,350' 7,700 8,101 7,858 3 Deposits 994 2,507 3,398 3,429 4,245 3,725 3,878 4 Other claims 1,425 1,699 1,582 2,921' 3,455 4,376 3,980 5 Claims of banks' domestic customers1 580 962 971 506 676 637 684 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 1983 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998800 11998811AA 11998822 Jan. Feb. Mar. Apr. May' June July? 1 AH foreigners 205,297 244,043 305,368' 304,851' 304,925' 316,831' 308,359 316,722 321,072 327,104 7 Banks' own liabilities 124,791 163,738 225,427' 219,433' 219,939' 235,031' 225,721 232,881 236,932 238,922 3 Demand deposits 23,462 19,628 15,959' 15,988' 17,405' 16,495 15,606 16,935 17,306 15,976 4 Time deposits1 15,076 28,977r 67,093' 64,347 65,321' 68,491 67,495 69,772 73,392 72,838 5 Other2 17,583 17,632' 23,870' 23,086' 20,366' 24,566 21,877 24,002 25,500 22,954 6 Own foreign offices3 68,670 97,500 118,505' 116,011' 116,846' 125,479' 120,743 122,173 120,735 127,154 7 Banks' custody liabilities4 80,506 80,305 79,941 85,419 84,987 81,800 82,638 83,841 84,139 88,182 8 U.S. Treasury bills and certificates5 57,595 55,316 55,614 62,137 61,904 58,748 60,087 60,508 61,245 65,358 9 Other negotiable and readily transferable instruments6 20,079 19,019 20,625 19,352 19,205 18,830 18,823 19,187 18,731 17,884 10 Other 2,832 5,970 3,702 3,930 3,877 4,222 3,728 4,146 4,163 4,941 11 Nonmonetary international and regional organizations7 2,344 2,721 4,597 6,611 5,969 3,945 5,917 5,260 5,456 5,698 1? Banks' own liabilities 444 638 1,584 1,787 1,695 1,300 2,542 2,925 3,048 4,050 13 Demand deposits 146 262 106 284 195 221 252 267 165 307 14 Time deposits1 85 58 1,339 1,333 1,367 913 2,031 2,447 2,483 3,010 15 Other2 212 318 139 170 134 166 259 211 400 733 16 Banks' custody liabilities4 1,900 2,083 3,013 4,824 4,275 2,645 3,375 2,335 2,408 1,648 17 U.S. Treasury bills and certificates 254 541 1,621 3,603 3,153 1,501 2,230 1,280 1,538 678 18 Other negotiable and readily transferable instruments6 1,646 1,542 1,392 1,221 1,122 1,144 1,145 1,055 870 970 19 Other 0 0 0 0 0 0 0 0 0 0 20 Official institutions8 86,624 79,318 71,576' 74,314' 71,419' 70,897 71,220 73,391 73,393 75,538 71 Banks' own liabilities 17,826 17,094 16,571' 16,451' 14,662' 16,443 16,188 17,365 17,370 15,894 27 Demand deposits 3,771 2,564 1,981 2,168 2,063 2,287 2,322 2,058 2,198 1,958 73 Time deposits1 3,612 4,230 5,504' 4,907 5,485' 5,331 6,039 6,374 6,380 6,559 24 Other2 10,443 10,300 9,087' 9,376' 7,114' 8,825 7,826 8,933 8,792 7,377 75 Banks' custody liabilities4 68,798 62,224 55,006 57,864 56,756 54,454 55,032 56,026 56,023 59,644 26 U.S. Treasury bills and certificates5 56,243 52,389 46,658 50,432 49,954 47,917 48,399 49,281 49,068 53,581 27 Other negotiable and readily transferable instruments6 12,501 9,787 8,319 7,396 6,769 6,512 6,618 6,724 6,937 6,038 28 Other 54 47 28 35 33 25 15 22 17 25 29 Banks9 96,415 136,030 185,081' 178,471' 181,114' 193,415' 183,100 188,605 192,041 195,273 30 Banks' own liabilities 90,456 124,312 168,658' 161,644' 163,102' 175,038' 164,647 169,167 172,586 174,853 31 Unaffiliated foreign banks 21,786 26,812 50,153' 45,632' 46,256' 49,560 43,904 46,994 51,850 47,699 37 Demand deposits 14,188 11,614 8,675' 8,154' 9,627 8,264 7,601 8,832 9,125 8,271 33 Time deposits1 1,703 8,720' 28,249' 25,530' 25,318' 27,617 24,329 25,123 27,994 26,359 34 Other2 5,895 6,477' 13,228' 11,948' 11,312' 13,679 11,974 13,039 14,730 13,069 35 Own foreign offices3 68,670 97,500 118,505' 116,011' 116,846' 125,479' 120,743 122,173 120,735 127,154 36 Banks' custody liabilities4 5,959 11,718 16,423' 16,827' 18,012 18,377 18,453 19,438 19,456 20,420 37 U.S. Treasury bills and certificates 623 1,687 5,809 6,292 6,791 7,122 7,475 7,824 8,396 8,676 38 Other negotiable and readily transferable instruments6 2,748 4,421 7,848' 7,702' 8,345 8,265 8,041 8,333 7,771 7,750 39 Other 2,588 5,611 2,766 2,833 2,876 2,990 2,937 3,282 3,289 3,995 40 Other foreigners 19,914 25,974 44,113' 45,455' 46,423' 48,573 48,122 49,466 50,181 50,595 41 Banks' own liabilities 16,065 21,694 38,615' 39,552' 40,480' 42,250 42,344 43,425 43,928 44,126 42 Demand deposits 5,356 5,189 5,197 5,382' 5,521' 5,724 5,430 5,777 5,817 5,440 43 Time deposits 9,676 15,969 32,001' 32,576' 33,152' 34,631 35,095 35,828 36,534 36,910 44 Other2 1,033 537 1,416 1,593' 1,807 1,896 1,819 1,819 1,578 1,775 45 Banks' custody liabilities4 3,849 4,279 5,499' 5,903' 5,943 6,323 5,778 6,041 6,253 6,470 46 U.S. Treasury bills and certificates 474 699 1,525 1,810 2,006 2,207 1,983 2,123 2,242 2,473 47 Other negotiable and readily transferable instruments6 3,185 3,268 3,065' 3,032' 2,970 2,909 3,018 3,076 3,154 3,126 48 Other 190 312 908 1,062 968 1,207 776 842 857 920 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,745 10,747 14,296 13,367 11,611 11,383 11,604 11,555 11,589 11,057 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 • September 1983 3.17 Continued 1983 AArreeaa aanndd ccoouunnttrryy 11998800 11998811AA 11998822 Jan. Feb. Mar. Apr. May' June July? 1 Total 205,297 244,043 305,368' 304,851' 304,925' 316,831' 308,359 316,722 321,072 327,104 2 Foreign countries 202,953 241,321 300,771' 298,240' 298,956' 312,886' 302,442 311,462 315,616 321,406 3 Europe 90,897 91,309 117,705' 118,764 116,195' 116,457 111,233 115,950 118,659 118,949 4 Austria 523 596 512 467 513 604 576 574 640 610 5 Belgium-Luxembourg 4,019 4,117 2,517 2,270 2,295 2,726 2,800 2,608 2,843 2,955 6 Denmark 497 333 509 996 1,197 765 849 732 616 612 7 Finland 455 296 748 473 369 408 437 280 447 292 8 France 12,125 8,486 8,169 8,462 7,7''0r 6,780 7,091 6,647 6,766 8,838 9 Germany 9,973 7,665 5,375 5,807 6,227 6,458 3,437 3,971 3,423 3,695 10 Greece 670 463 537 589 595 597 670 648 567 589 11 Italy 7,572 7,290 5,674 4,938 4,514 4,312 5,021 5,573 6,634 7,790 12 Netherlands 2,441 2,823 3,362 3,770 3,196 3,704 3,968 3,543 3,246 3,395 13 Norway 1,344 1,457 1,567 1,476 1,407 1,061 1,565 2,227 1,719 900 14 Portugal 374 354 388 398 370 363 346 427 350 338 15 Spain 1,500 916 1,405 1,316 1,524 1,640 1,484 1,621 1,615 1,693 16 Sweden 1,737 1,545 1,380 1,315 1,645 1,379 1,210 1,356 1,493 1,407 17 Switzerland 16,689 18,720 29,06C 28,999' 30,263 30,433 29,390 29,781 29,941 30,762 18 Turkey 242 518 296 190 246' 254 231 248 198 224 19 United Kingdom 22,680 28,287 48,169 50,339 47,294' 47,703 44,980 48,762 50,471 48,017 20 Yugoslavia 681 375 499 470 452 491 504 549 504 427 21 Other Western Europe1 6,939 6,526 6,913' 6,030' 5,940' 6,365 6,215 6,023 6,666 5,867 22 U.S.S.R 68 49 50 47 41 40 44 53 71 74 23 Other Eastern Europe2 370 493 573 412 335 374 413 327 448 465 24 Canada 10,031 10,250 12,217 10,990 13,618 15,159 14,492 16,284 16,354 16,676 25 Latin America and Caribbean 53,170 85,159 112,939' 110,603' 111,184' 120,591' 117,708 118,260 120,385 124,359 26 Argentina 2,132 2,445 3,577 4,833 4,785' 4,686' 4,603 4,746 4,763 5,017 27 Bahamas 16,381 34,856 44,040' 42,930' 45,249' 49,524' 49,086 49,682 49,708 54,356 28 Bermuda 670 765 1,572 1,989 1,913' 2,124 2,128 1,821 2,057 2,362 29 Brazil 1,216 1,568 2,014' 1,916 1,926' 1,948 2,474 2,483 2,735 2,680 30 British West Indies 12,766 17,794 26,366' 24,637' 24,114' 27,520 23,889 22,943 24,153 24,422 31 Chile 460 664 1,626 1,341 1,280 1,084 1,196 1,345 1,355 1,385 32 Colombia 3,077 2,993 2,594' 2,385' 2,336 1,887 1,820 11,,887733 1,719 1,618 33 Cuba 6 9 9 10 10 9 12 88 13 11 34 Ecuador 371 434 453 472 499 575 534 658 581 532 35 Guatemala 367 479 670 682 669 675 666 711 705 691 36 Jamaica 97 87 126 115 103 134 107 108 130 108 37 Mexico 4,547 7,170 7,967 7,930 7,380 8,118 8,351 8,536 9,027 9,141 38 Netherlands Antilles 413 3,182 3,597 3,762 3,474 3,416 3,426 3,622 3,514 3,434 39 Panama 4,718 4,857 4,738 4,923 4,943' 5,617 5,620 5,749 5,648 5,615 40 Peru 403 694 1,147 1,052 903 927 966 1,005 1,148 1,055 41 Uruguay 254 367 759 726 817 818 852 919 955 958 42 Venezuela 3,170 4,245 8,392' 7,649 7,671 8,146 8,585 8,563 8,637 7,700 43 Other Latin America and Caribbean 2,123 2,548 3,291 3,251 3,113' 3,382' 3,394 3,487 3,537 3,274 44 Asia 42,420 50,005 48,698' 48,238' 49,615' 52,545' 5500,,118811 5522,,111177 5511,,995599 5533,,003366 China 45 Mainland 49 158 203 220 196 208 187 158 208 191 46 Taiwan 1,662 2,082 2,751' 3,184' 3,515 3,549' 3,600 3,765 3,744 3,914 47 Hong Kong 2,548 3,950 4,465 4,542 4,986' 5,725 5,127 5,195 5,587 5,554 48 India 416 385 433 514 962 521 669 719 669 606 49 Indonesia 730 640 849 1,156 614 856' 1,028 765 554 1,250 50 Israel 883 592 606 608 515 985 761 789 835 670 51 Japan 16,281 20,750 16,078' 15,836 16,613 17,022 17,052 17,403 17,006 17,659 52 Korea 1,528 2,013 1,692 1,473 1,458 1,418 1,147 1,459 1,326 1,552 53 Philippines 919 874 770 680 787 718 712 783 818 770 54 Thailand 464 534 629 482 529 488 528 566 692 537 55 Middle-East oil-exporting countries3 14,453 13,174 13,433 12,332 11,705' 13,159 11,756 12,610 1111,,883322 11,881 56 Other Asia 2,487 4,854 6,788' 7,210 7,735' 7,895' 7,614 7,906 88,,668888 8,451 57 Africa 5,187 3,180 3,070 3,331 3,103' 2,910 2,829 2,876 2,690 2,916 58 Egypt 485 360 398 500 432' 533 466 513 461 554 59 Morocco 33 32 75 51 51 57 48 50 54 57 60 South Africa 288 420 277 276 317 281 299 358 355 403 61 Zaire 57 26 23 25 31 33 28 32 59 55 62 Oil-exporting countries4 3,540 1,395 1,280 1,603 1,333 975 1,071 867 743 928 63 Other Africa 783 946 1,016 877 939 1,031 916 1,057 1,018 919 64 Other countries 1,247 1,419 6,143' 6,314 5,241 5,224 5,999 5,974 5,568 5,470 65 Australia 950 1,223 5,904 6,080 5,052 4,933 5,804 5,778 5,409 5,250 66 All other 297 196 239' 235 190 291 195 196 159 220 67 Nonmonetary international and regional organizations 2,344 2,721 4,597 6,611 5,969 3,945 5,917 5,260 5,456 5,698 68 International 1,157 1,661 3,724' 5,769 5,186 3,182 5,194 4,540 4,747 5,449 69 Latin American regional 890 710 517 527 487 478 494 453 443 12 70 Other regional5 296 350 357' 316 296 285 229 267 266 237 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 1983 AArreeaa aanndd ccoouunnttrryy 11998800 11998811AA 11998822'' Jan. Feb.' Mar. Apr. May June July 1 Total 172,592 251,356r 355,131 358,198' 361,102 372,887' 361,187 363,392' 372,345 366,096 2 Foreign countries 172,514 251,300' 355,063 358,125' 361,025 372,818' 361,095 363,315' 372,245 366,010 3 Europe 32,108 49,191' 84,629 83,919' 84,638 88,097' 84,325 83,517' 86,013 84,317 4 Austria 236 121 215 232 226 255 307 278' 342 383 5 Belgium-Luxembourg 1,621 2,851 5,129 4,746' 5,377 5,711' 5,350 5,479' 5,794 5,449 6 Denmark 127 187 554 609 650 1,135' 1,124 1,061 1,077 1,052 7 460 546 990 984 967 961 844 766 870 776 8 France 2,958 4,127' 6,856 7,208' 7,396 7,218' 7,342 7,829 7,941 7,919 9 Germany 948 940' 1,869 1,420' 1,740 1,810 1,273 1,186' 1,404 1,113 10 Greece 256 333 452 576 653 652 628 607 576 458 11 Italy 3,364 5,240 7,515 7,548' 7,011 7,142' 7,403 6,985 7,298 7,376 1? Netherlands 575 682 1,425 1,467' 1,358 1,629 1,250 1,262 1,165 967 13 Norway 227 384 572 625 587 544 628 683 651 595 14 Portugal 331 529 950 848' 841 820 797 815 846 839 15 Spain 993 2,100 3,739 3,708' 3,227 3,120 3,004 3,059 3,199 3,339 16 Sweden 783 1,205 3,034 3,113 2,693 2,414 2,289 2,298 2,864 2,910 17 Switzerland 1,446 2,213 1,639 1,552' 1,497 1,668 1,653 1,085 1,598 1,737 18 Turkey 145 424 560 527 616 595 608 578 570 622 19 United Kingdom 14,917 23,774' 45,290 45,084' 46,101 48,710' 46,072 45,793' 45,947 45,191 70 Yugoslavia 853 1,224 1,429 1,394' 1,429 1,393 1,432 1,481 1,463 1,381 71 Other Western Europe1 179 209 378 310 321 322 232 236 334 356 77 U.S.S.R 281 377 263 233 240 310 392 349' 373 288 23 Other Eastern Europe2 1,410 1,725 1,769 1,737' 1,709 1,690 1,697 1,686' 1,702 1,565 24 Canada 4,810 9,192' 14,322 14,950' 15,633 16,505' 15,087 16,539' 16,609 16,470 75 Latin America and Caribbean 92,992 138,251' 187,953 192,243' 193,747 198,737' 195,821 197,899' 199,071 195,450 76 Argentina 5,689 7,522 10,974 11,324' 11,536 11,264 11,228 11,550 11,243 11,112 77 Bahamas 29,419 43,517' 56,484 57,797' 56,796 59,575' 57,177 58,923' 62,576 59,327 7.8 Bermuda 218 346 603 615' 536 500 385 628 452 358 7.9 Brazil 10,496 16,914 23,260 23,091' 23,754 23,551 23,715 23,530' 23,332 23,703 30 British West Indies 15,663 21,965' 29,244 32,830' 33,560 35,232' 34,985 33,265' 32,254 30,305 31 Chile 1,951 3,690 5,513 5,248' 5,420 5,209 5,131 5,568 5,161 5,185 32 Colombia 1,752 2,018 3,211 3,248' 3,162 3,166 3,155 3,484 3,600 3,654 33 Cuba 3 3 3 11 2 2 0 0 0 2 34 Ecuador 1,190 1,531 2,062 2,047' 2,148 2,054 2,093 2,040 2,038 2,018 35 Guatemala3 137 124 124 129 120 84 77 90 90 96 36 Jamaica3 36 62 181 206 199 216 196 197' 207 209 37 Mexico 12,595 22,409 29,488 29,450' 30,635 31,253' 31,726 31,906 32,318 32,846 38 Netherlands Antilles 821 1,076 839 826' 913 970 1,036 824' 519 927 39 Panama 4,974 6,787' 10,197 10,091' 9,324 9,801' 8,956 9,634' 8,823 9,126 40 Peru 890 1,218 2,355 2,307' 2,335 2,301 2,330 2,414 2,651 2,503 41 Uruguay 137 157 686 692' 685 707 859 824 820 831 42 Venezuela 5,438 7,069 10,739 10,276' 10,432 10,615 10,559 10,749 10,848 11,142 43 Other Latin America and Caribbean 1,583 1,844 1,991 2,057 2,190 2,236 2,213 2,275 2,139 2,106 44 39,078 49,787' 60,700 59,173' 59,186 61,479' 57,689 57,403' 62,548 61,594 China 45 Mainland 195 107 214 198 195 195 239 219 166 129 46 Taiwan 2,469 2,461 2,288 2,235' 1,985 1,860 1,786 1,613 1,760 1,715 47 Hong Kong 2,247 4,126 6,668 7,103' 7,155 7,656 7,487 7,552 7,872 7,875 48 India 142 123 222 230 201 160 163 198 230 245 49 Indonesia 245 351 342 370 429 505 541 563 537 595 50 Israel 1,172 1,562 2,028 1,835 1,762 1,744 2,036 1,926 2,438 1,657 51 Japan 21,361 26,768' 28,302 26,792' 26,846 28,545 24,979 24,757' 27,193 27,666 52 Korea 5,697 7,324 9,407 9,072' 9,263 9,170 8,768 8,940 9,122 9,676 53 Philippines 989 1,817 2,571 2,464' 2,628 2,628 2,627 2,493 2,829 2,640 54 Thailand 876 564 643 654' 652 625 741 707 788 689 55 Middle East oil-exporting countries4 1,432 1,577' 3,087 3,428 3,414 3,832' 3,947 4,024 4,452 3,981 56 Other Asia 2,252 3,009 4,928 4,792' 4,655 4,557 4,375 4,413' 5,162 4,726 57 Africa 2,377 3,503 5,352 5,613' 5,539 5,483 5,698 5,538 5,662 5,937 58 Egypt 151 238 322 310 286 309 297 378 421 486 59 Morocco 223 284 353 342 359 375 382 441 463 484 60 South Africa 370 1,011 2,012 2,066' 2,194 2,185 2,123 2,123 2,231 2,407 61 Zaire 94 112 57 57 55 52 104 47 46 45 62 Oil-exporting countries5 805 657 801 914 845 844 750 851 830 850 63 Other 734 1,201 1,807 1,924 1,800 1,717 2,041 1,699 1,671 1,664 64 Other countries 1,150 1,376 2,107 2,228 2,282 2,519 2,475 2,418' 2,342 2,243 65 Australia 859 1,203 1,713 1,714 1,704 1,953 1,889 1,756' 1,722 1,630 66 All other 290 172 394 514 578 566 586 662' 620 613 67 Nonmonetary international and regional organizations6 78 56 68 73 77 69 9922 77 100 8855 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 • September 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 1983 TTyyppee ooff ccllaaiimm 11998800 11998811AA 11998822"" Jan." Feb." Mar. Apr. May" June July 1 Total 111111199999998888888,,,,,,,666666699999998888888 222222288888887777777,,,,,,,333333322222225555555""""""" 333333399999995555555,,,,,,,777777733333331111111 444444411111111111111,,,,,,,111111144444442222222""""""" 444444400000007777777,,,,,,,888888811111118888888 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111177777772222222,,,,,,,555555599999992222222 222222255555551111111,,,,,,,333333355555556666666""""""" 333333355555555555555,,,,,,,111111133333331111111 358,198 361,102 333333377777772222222,,,,,,,888888888888887777777''''''' 361,187 363,392 333333377777772222222,,,,,,,333333344444445555555 366,096 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 22222220000000,,,,,,,888888888888882222222 33333331111111,,,,,,,333333300000002222222 44444445555555,,,,,,,444444455555553333333 44,593 45,733 44444446666666,,,,,,,999999933333335555555 47,582 47,758 44444449999999,,,,,,,222222222222226666666 49,710 44 OOwwnn ffoorreeiiggnn ooffffiicceess'' 66666665555555,,,,,,,000000088888884444444 99999996666666,,,,,,,666666644444447777777 111111122222227777777,,,,,,,222222288888882222222 133,607 134,616 111111144444443333333,,,,,,,888888855555554444444""""""" 135,756 139,166 111111144444440000000,,,,,,,111111133333339999999 135,757 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 55555550000000,,,,,,,111111166666668888888 77777774444444,,,,,,,444444400000008888888""""""" 111111122222220000000,,,,,,,333333333333330000000 116,961 119,133 111111122222221111111,,,,,,,111111177777770000000""""""" 117,246 115,597 111111122222220000000,,,,,,,222222200000007777777 117,503 66 DDeeppoossiittss 8888888,,,,,,,222222255555554444444 22222223333333,,,,,,,222222277777776666666""""""" 44444443333333,,,,,,,666666611111119999999 42,490 44,595 44444448888888,,,,,,,777777788888881111111""""""" 44,481 43,923 44444446666666,,,,,,,777777788888880000000 46,114 77 OOtthheerr 44444441111111,,,,,,,999999911111114444444 55555551111111,,,,,,,111111133333332222222""""""" 77777776666666,,,,,,,777777711111111111111 74,471 74,538 77777772222222,,,,,,,333333388888889999999""""""" 72,765 71,674 77777773333333,,,,,,,444444422222228888888 71,389 88 AAllll ootthheerr ffoorreeiiggnneerrss 33333336666666,,,,,,,444444455555559999999 44444448888888,,,,,,,999999999999999999999 66666662222222,,,,,,,000000066666666666666 63,037 61,619 66666660000000,,,,,,,999999922222229999999""""""" 60,603 60,871 66666662222222,,,,,,,777777777777772222222 63,125 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 22222226666666,,,,,,,111111100000006666666 33333335555555,,,,,,,999999966666668888888 44444440000000,,,,,,,666666600000000000000 33333338888888,,,,,,,222222255555556666666 33333335555555,,,,,,,444444477777773333333 888888888888885555555 1111111,,,,,,,333333377777778888888 2222222,,,,,,,777777788888880000000 2222222,,,,,,,111111122222226666666 2222222,,,,,,,666666633333331111111 11 Negotiable and readily transferable 11111115555555,,,,,,,555555577777774444444 22222226666666,,,,,,,333333355555552222222 33333330000000,,,,,,,777777766666663333333 22222229999999,,,,,,,222222255555550000000 22222226666666,,,,,,,777777700000008888888 12 Outstanding collections and other 9999999,,,,,,,666666644444448888888 8888888,,,,,,,222222233333338888888 7777777,,,,,,,000000055555556666666 6666666,,,,,,,888888888888880000000 6666666,,,,,,,111111133333333333333 13 MEMO: Customer liability on 22222222222222,,,,,,,777777711111114444444 22222229999999,,,,,,,555555511111117777777 33333338888888,,,,,,,333333333333338888888 33333335555555,,,,,,,111111155555553333333 33333334444444,,,,,,,888888822222226666666 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 ... 24,468 39,862 41,210 38,623 38,712 38,444 40,654 41,797 39,698 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 11998800 11998811AA June Sept. Dec. Mar. June'' 1 Total 106,748 154,159" 202,185 214,927 226,933 227,525 230,624 By borrower 2 Maturity of 1 year or less1 82,555 116,130" 153,223 163,294 172,756 171,888 173,029 3 Foreign public borrowers 9,974 15,099 19,480 20,082 21,297 21,602 22,409 4 All other foreigners 72,581 101,030" 133,743 143,212 151,459 150,286 150,619 5 Maturity of over 1 year1 24,193 38,030 48,962 51,634 54,177 55,637 57,596 6 Foreign public borrowers 10,152 15,650 20,077 21,977 23,108 24,623 26,161 7 All other foreigners 14,041 22,380 28,885 29,657 31,068 31,014 31,435 By area Maturity of 1 year or less1 8 Europe 18,715 28,053" 39,813 45,793 49,643 52,852 51,553 9 Canada 2,723 4,657" 6,6% 7,078 7,647 6,874 6,929 10 Latin America and Caribbean 32,034 48,599" 68,676 72,291 73,199 74,379 74,366 11 26,686 31,421" 33,558 33,348 37,355 32,546 35,146 1? Africa 1,757 2,457 3,262 3,621 3,686 3,872 3,858 13 All other2 640 943 1,217 1,163 1,226 1,365 1,177 Maturity of over 1 year1 14 Europe 5,118 8,094 9,206 10,546 11,632 12,011 12,179 15 Canada 1,448 1,774 2,339 2,003 1,931 1,924 1,864 16 Latin America and Caribbean 15,075 25,089 33,010 34,031 35,200 35,696 36,775 17 1,865 1,907 2,480 3,090 3,179 3,531 4,045 18 Africa 507 899 1,298 1,328 1,494 1,480 1,667 19 All other2 179 267 628 635 740 995 1,066 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 June Sept. Dec. Mar. June' Sept.' Dec.' Mar. June*7 1 Total 303.9 352.0 382.9 399.8 414.9' 419.3' 434.6 437.3 438.0 438.1 435.4 2 G 10 countries and Switzerland 138.4 162.1 168.3 172.2 175.4' 174.3' 176.0 175.1 179.2 180.8 175.2 3 Belgium-Luxembourg 11.1 13.0 13.8 14.1 13.3 13.2 14.1 13.6 13.1 13.7 13.1 4 France 11.7 14.1 14.7 16.0 15.3 15.9 16.5 15.8 16.7 16.6 17.1 Germany 12.2 12.1 12.1 12.7 12.9 12.5 12.7 12.2 12.7 13.4 12.5 6 Italy 6.4 8.2 8.4 8.6 9.6 9.0 9.0 9.7 10.3 10.1 10.4 7 Netherlands 4.8 4.4 4.2 3.7 4.0 4.0 4.1 3.8 3.6 4.3 4.1 8 Sweden 2.4 2.9 3.1 3.4 3.7 4.1' 4.0 4.7 5.0 4.3 4.7 9 Switzerland 4.7 5.0 5.2 5.1 5.5 5.3 5.1 5.0 5.0 4.6 4.7 10 United Kingdom 56.4 67.4 67.0 68.8 70.(K 70.2' 69.2 70.1 71.6 72.3 69.5 11 Canada 6.3 8.4 10.8 11.8 10.9 11.6 11.4 11.0 11.1 12.4 10.7 12 Japan 22.4 26.5 28.9 28.0 30.1 28.5' 29.9 29.3 30.1 29.1 28.3 13 Other developed countries 19.9 21.6 24.8 26.4 28.4 30.7' 32.1 32.7 33.7 33.9 34.4 14 Austria 2.0 1.9 2.1 2.2 1.9 2.1 2.1 2.0 1.9 2.1 2.1 15 Denmark 2.2 2.3 2.3 2.5 2.3 2.5 2.6 2.5 2.4 3.3 3.3 16 Finland 1.2 1.4 1.3 1.4 1.7 1.6 1.6 1.8 2.2 2.1 2.1 17 Greece 2.4 2.8 3.0 2.9 2.8 2.9' 2.7 2.6 3.0 2.9 3.2 18 Norway 2.3 2.6 2.8 3.0 3.1 3.2 3.2 3.4 3.3 3.3 3.4 19 Portugal .7 .6 .8 1.0 1.1 1.2 1.5 1.6 1.5 1.4 1.4 20 Spain 3.5 4.4 5.7 5.8 6.7 7.2 7.3 7.7 7.5 7.0 7.2 71 Turkey 1.4 1.5 1.4 1.5 1.4 1.6 1.5 1.5 1.4 1.5 1.4 22 Other Western Europe 1.4 1.7 1.8 1.9 2.1 2.1' 2.2 2.1 2.3 2.2 1.9 7.3 South Africa 1.3 1.1 1.9 2.5 2.8 3.3 3.5 3.6 3.7 3.6 3.9 24 Australia 1.3 1.3 1.7 1.9 2.5 3.0 4.0 4.0 4.4 4.6 4.5 25 OPEC countries2 22.9 22.7 22.2 23.5 24.7' 25.4' 26.4 27.3 27.5 28.5 28.1 76 Ecuador 1.7 2.1 2.0 2.1 2.2 2.3 2.4 2.3 2.2 2.2 2.2 77 Venezuela 8.7 9.1 8.8 9.2 9.9' 10.C 10.1 10.4 10.6 10.4 10.2 78 Indonesia 1.9 1.8 2.1 2.5 2.6' 2.7 2.8 2.9 3.2 3.5 3.2 79 Middle East countries 8.0 6.9 6.8 7.1 7.5 8.2 8.7 9.0 8.7 9.3 9.5 30 African countries 2.6 2.8 2.6 2.6 2.5 2.2 2.5 2.7 2.8 3.0 3.0 31 Non-OPEC developing countries 63.0 77.4 84.8 90.2 96.2 97.4' 103.6 103.9 106.9 107.3 108.2 Latin America 3? Argentina 5.0 7.9 8.5 9.3 9.4 lO.C 9.7 9.2 8.9 9.0 9.4 33 Brazil 15.2 16.2 17.5 17.7 19.1 19.6' 21.3 22.4 22.9 23.1 22.5 34 Chile 2.5 3.7 4.8 5.5 5.8 6.0 6.4 6.2 6.3 6.0 5.8 35 Colombia 2.2 2.6 2.5 2.5 2.6 2.3 2.6 2.8 3.1 2.9 3.2 36 Mexico 12.0 15.9 18.2 20.0 21.6 22.9 25.1 24.9 24.5 24.9 25.0 37 1.5 1.8 1.7 1.8 2.0 1.9 2.5 2.6 2.6 2.4 2.6 38 Other Latin America 3.7 3.9 3.8 4.2 4.1 4.1 4.0 4.3 4.0 4.2 4.3 Asia China 39 Mainland .1 .2 .2 .2 .2 .2 .3 .2 .2 .2 .2 40 Taiwan 3.4 4.2 4.6 5.1 5.1 5.1 5.0 4.9 5.2 5.1 5.0 41 India .2 .3 .3 .3 .3 .5 .5 .5 .6 .4 .5 4? Israel 1.3 1.5 1.8 1.5 2.1 1.7 2.2 1.9 2.3 2.0 2.6 43 Korea (South) 5.4 7.1 8.8 8.6 9.4 8.6 8.9 9.3 10.9 10.8 10.8 44 Malaysia 1.0 1.1 1.4 1.4 1.7 1.7 1.9 1.8 2.1 2.5 2.6 45 Philippines 4.2 5.1 5.1 5.6 6.0 5.9 6.3 6.0 6.3 6.6 6.4 46 Thailand 1.5 1.6 1.5 1.4 1.5 1.4 1.3 1.3 1.6 1.6 1.8 47 Other Asia .5 .6 .7 .8 1.0 1.2 1.1 1.3 1.1 1.4 1.0 Africa 48 Egypt .6 .8 .7 1.0 1.1 1.3 1.3 1.3 1.2 1.1 1.2 49 Morocco .6 .7 .5 .7 .7 .7 .7 .8 .7 .8 .8 50 Zaire .2 .2 .2 .2 .2 .2 .2 .1 .1 .1 .1 51 Other Africa3 1.7 2.1 2.1 2.2 2.3 2.3 2.3 2.2 2.4 2.3 2.2 52 Eastern Europe 7.3 7.4 7.7 7.7 7.8 7.2 6.7 6.3 6.2 6.2 6.0 53 U.S.S.R .7 .4 .5 .4 .6 .4 .4 .3 .3 .3 .4 54 Yugoslavia 1.8 2.3 2.5 2.5 2.5 2.5 2.4 2.2 2.2 2.6 2.3 55 Other 4.8 4.6 4.8 4.7 4.7 4.3 3.9 3.8 3.7 3.3 3.3 56 Offshore banking centers 40.4 47.0 59.3 61.7 63.6' 65.7' 71.7 71.7 66.6 66.1 67.8 57 Bahamas 13.7 13.7 17.9 21.3 19.0' 20.2' 23.9 21.2 18.8 17.3 20.2 58 Bermuda .8 .6 .7 .8 .7 .7 .7 .8 .9 1.0 .8 59 Cayman Islands and other British West Indies 9.4 10.6 12.6 12.1 12.4 12.1' 12.3 13.5 13.0 11.8 11.8 60 Netherlands Antilles 1.2 2.1 2.4 2.2 3.2 3.2 3.0 3.3 3.3 3.2 2.6 61 Panama4 4.3 5.4 6.9 6.7 7.6 7.2' 7.4 8.0 7.6 7.1 6.5 6? Lebanon .2 .2 .2 .2 .2 .2 .2 .1 .1 .1 .1 63 Hong Kong 6.0 8.1 10.3 10.3 11.8 12.9 14.3 14.9 13.8 15.0 14.5 64 Singapore 4.5 5.9 8.1 8.0 8.7 9.3 9.9 9.8 9.1 10.6 11.1 65 Others5 .4 .3 .3 .1 .1 .1 .1 .0 .0 .0 .0 66 Miscellaneous and unallocated6 11.7 14.0 15.7 18.2 18.8 18.5' 18.4 20.3 17.9 16.3 15.7 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 • September 1983 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of doUars, end of period 1982 1983 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997799 11998800 11998811 Mar. June Sept. Dec. Mar.P 1 Total 17,433 22,226 22,506 22,185 21,017 21,491 21,898 21,555 2 Payable in dollars 14,323 18,481 18,787 19,418 18,237 18,375 18,798 18,643 3 Payable in foreign currencies 3,110 3,745 3,719 2,767 2,780 3,116 3,099 2,912 By type 4 Financial liabilities 7,523 11,330 12,143 12,377 10,063 10,749 10,364 10,294 5 Payable in dollars 5,223 8,528 9,475 10,408 8,104 8,441 8,289 8,330 6 Payable in foreign currencies 2,300 2,802 2,668 1,969 1,959 2,308 2,075 1,964 7 Commercial liabilities 9,910 10,896 10,363 9,808 10,955 10,742 11,533 11,261 8 Trade payables 4,591 4,993 4,720 4,035 5,045 4,536 4,582 4,474 9 Advance receipts and other liabilities 5,320 5,903 5,643 5,773 5,910 6,206 6,951 6,787 10 Payable in dollars 9,100 9,953 9,312 9,010 10,133 99,,993344 10,509 10,313 11 Payable in foreign currencies 811 943 1,052 798 822 880088 1,024 948 By area or country Financial liabilities 12 Europe 4,665 6,481 6,816 7,742 5,944 6,389 6,172 6,052 13 Belgium-Luxembourg 338 479 471 562 518 494 502 407 14 France 175 327 709 917 581 672 635 679 15 Germany 497 582 491 503 439 446 470 487 16 Netherlands 829 681 748 750 517 759 702 684 17 Switzerland 170 354 715 707 661 670 673 620 18 United Kingdom 2,477 3,923 3,556 4,195 3,081 3,212 3,061 3,045 19 Canada 532 964 958 914 758 702 685 677 20 Latin America and Caribbean 1,514 3,136 3,356 3,223 2,805 2,969 2,683 2,666 21 Bahamas 404 964 1,279 1,095 1,003 933 876 803 22 Bermuda 81 1 7 6 7 14 14 18 23 Brazil 18 23 22 27 24 28 28 39 24 British West Indies 516 1,452 1,241 1,369 1,044 981 992 991 25 Mexico 121 99 102 67 83 85 121 149 26 Venezuela 72 81 98 97 100 104 114 121 27 Asia 804 723 976 472 526 658 796 866 28 Japan 726 644 792 293 340 424 572 622 29 Middle East oil-exporting countries2 31 38 75 63 66 67 69 68 30 Africa 4 11 14 13 17 17 17 20 31 Oil-exporting countries3 1 1 0 0 0 0 0 0 32 All other4 4 15 24 12 11 13 12 13 Commercial liabilities 33 Europe 3,709 4,402 3,771 3,422 3,742 3,861 3,636 3,420 34 Belgium-Luxembourg 137 90 71 50 47 50 52 42 35 France 467 582 573 504 700 759 595 576 36 Germany 545 679 545 473 457 436 457 439 37 Netherlands 227 219 221 232 248 281 346 350 38 Switzerland 316 499 424 400 412 358 363 372 39 United Kingdom 1,080 1,209 880 824 850 904 850 660 40 Canada 924 888 897 897 1,134 1,197 1,490 1,454 41 Latin America and Caribbean 1,325 1,300 1,044 817 1,418 1,220 991 1,032 42 Bahamas 69 8 2 22 20 6 1166 4 43 Bermuda 32 75 67 71 102 48 8899 117 44 Brazil 203 111 67 83 62 128 60 51 45 British West Indies 21 35 2 27 2 3 32 4 46 Mexico 257 367 340 210 727 484 379 354 47 Venezuela 301 319 276 194 219 269 148 181 48 Asia 2,991 3,034 3,285 3,407 3,301 3,207 4,062 4,278 49 Japan 583 802 1,094 1,090 1,064 1,134 1,150 1,158 50 Middle East oil-exporting countries2 1,014 890 910 998 958 821 1,513 1,732 51 Africa 728 817 703 661 729 663 704 492 52 Oil-exporting countries3 384 517 344 247 340 248 277 158 53 All other4 233 456 664 604 630 595 651 586 1. For a description of the changes in the International Statistics tables, see 3. Comprises Aigeria, 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 1982 1983 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997799 11998800 11998811 Mar. June Sept. Dec. Mar.P 1 Total 31,299 34,482 35,709 30,253 30,559 29,519 27,595 29,970 7 Payable in dollars 28,096 31,528 32,114 27,619 28,056 26,855 24,976 27,253 3 Payable in foreign currencies 3,203 2,955 3,595 2,634 2,502 2,664 2,618 2,718 By type 4 Financial claims 18,398 19,763 20,735 17,743 18,361 17,714 16,656 19,086 5 Deposits 12,858 14,166 14,682 12,725 13,599 12,608 12,129 14,440 6 Payable in dollars 11,936 13,381 14,057 12,267 13,229 12,194 11,703 13,967 7 Payable in foreign currencies 923 785 625 457 370 413 426 473 8 Other financial claims 5,540 5,597 6,053 5,018 4,762 5,106 4,527 4,646 9 Payable in dollars 3,714 3,914 3,599 3,362 3,194 3,419 2,895 3,006 10 Payable in foreign currencies 1,826 1,683 2,454 1,656 1,568 1,687 1,632 1,640 11 Commercial claims 12,901 14,720 14,974 12,510 12,198 11,805 10,939 10,885 1? Trade receivables 12,185 13,960 13,965 11,493 11,069 10,709 9,929 9,681 13 Advance payments and other claims 716 759 1,009 1,017 1,129 1,097 1,010 1,204 14 Payable in dollars 12,447 14,233 14,458 11,989 11,634 11,242 10,378 10,279 15 Payable in foreign currencies 454 487 516 520 564 564 561 605 By area or country Financial claims 16 Europe 6,179 6,069 4,513 4,503 4,658 4,728 4,655 5,885 17 Belgium-Luxembourg 32 145 43 16 13 16 10 58 18 France 177 298 285 375 313 305 129 90 19 Germany 409 230 224 197 148 174 168 127 20 Netherlands 53 51 50 79 56 52 32 55 21 Switzerland 73 54 57 53 63 60 107 82 22 United Kingdom 5,099 4,987 3,522 3,546 3,792 3,749 3,944 5,221 23 Canada 5,003 5,036 6,628 4,942 4,365 4,322 4,199 4,481 24 Latin America and Caribbean 6,312 7,811 8,615 7,432 8,313 7,630 6,889 7,829 25 Bahamas 2,773 3,477 3,925 3,537 3,845 3,366 3,226 3,657 26 Bermuda 30 135 18 27 42 19 8 10 27 Brazil 163 % 30 49 76 76 62 50 28 British West Indies 2,011 2,755 3,503 2,797 3,505 3,171 2,679 2,855 29 Mexico 157 208 313 281 274 268 274 352 30 Venezuela 143 137 148 130 134 133 139 156 31 Asia 601 607 758 668 802 825 723 712 32 Japan 199 189 366 262 327 247 178 233 33 Middle East oil-exporting countries2 16 20 37 36 33 30 15 18 34 Africa 258 208 173 164 156 165 158 153 35 Oil-exporting countries3 49 26 46 43 41 50 48 45 36 All other4 44 32 48 34 66 44 31 25 Commercial claims 37 Europe 4,922 5,544 5,359 4,381 4,273 4,164 3,755 3,558 38 Belgium-Luxembourg 202 233 234 246 211 178 150 140 39 France 727 1,129 776 698 636 646 473 486 40 Germany 593 599 559 454 394 427 356 414 41 Netherlands 298 318 303 227 297 278 347 307 42 Switzerland 272 354 427 354 384 258 339 227 43 United Kingdom 901 929 969 1,062 905 1,035 793 748 44 Canada 859 914 967 943 713 666 635 674 45 Latin America and Caribbean 2,879 3,766 3,479 2,925 2,787 2,772 2,513 2,645 46 Bahamas 21 21 12 80 30 19 21 30 47 Bermuda 197 108 223 212 225 154 259 172 48 Brazil 645 861 668 417 423 481 258 401 49 British West Indies 16 34 12 23 10 7 12 22 50 Mexico 708 1,102 1,022 762 750 869 767 864 51 Venezuela 343 410 424 396 383 373 351 286 52 Asia 3,451 3,522 3,949 3,199 3,385 3,117 3,033 3,108 53 Japan 1,177 1,052 1,244 1,160 1,213 968 1,047 1,115 54 Middle East oil-exporting countries2 765 825 901 757 806 775 748 700 55 Africa 551 653 759 598 627 638 588 559 56 Oil-exporting countries3 130 153 152 143 138 148 140 131 57 All other4 240 321 461 463 413 448 415 341 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 • September 1983 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1983 1983 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998811 11998822 Jan.- July Jan. Feb Mar. Apr. May June July? U.S. corporate securities STOCKS 1 Foreign purchases 40,686 41,916' 42,720 5,175' 5,314' 7,083 5,920 6,619' 6,853 5,756 2 Foreign sales 34,856 37,956" 38,234 4,376 4,349 6,155 5,344 6,365' 6,450 5,196 3 Net purchases, or sales (-) 5,830 3,959' 4,486 799 r 965' 928 576 254 403 560 4 Foreign countries 5,803 3,875' 4,392 790' 945' 902 524 252 428 551 5 Europe 3,662 2,603' 4,044 615' 894' 976 626 296 196 442 6 France 900 -143 155 47 52 8 29 -28 14 34 7 Germany -22 333 887 lite 137 226 222 86 -31 136 8 Netherlands 42 -60 -85 2 8 41 -5 -81 -57 7 9 Switzerland 288 -529 1,460 214' 223 102 278 269 186 187 10 United Kingdom 2,235 3,136' 1,586 183 447' 576 127 116 89 48 11 Canada 783 221 612 90 61 147 122 92 98 1 12 Latin America and Caribbean -30 304 305 0' 83 -23 119 63 28 35 13 Middle East1 1,140 366' -646 -57 -13 -57 -302 -192 35 -59 14 Other Asia 287 246 -13 118 -91 -210 -44 0 68 146 15 Africa 7 2 29 6 4 8 8 3 1 0 16 Other countries -46 131 61 18 6 60 -4 -10 2 -12 17 Nonmonetary international and regional organizations 27 85 95 10 21 26 52 2 -25 9 BONDS2 18 Foreign purchases 17,304 21,919' 13,904 1,948' 1,885 2,312 2,318 2,458 1,550 1,433 19 Foreign sales 12,272' 20,463' 14,156 2,278 1,877 2,448 2,067 2,289 1,741 1,457 20 Net purchases, or sales (-) 5,033r 1,456' -252 -330' 8 -136 251 169' -191 -24 21 Foreign countries 4,972' 1,484' -230 -328' 33 -153 265 193 -193 -48 22 Europe 1,351' 2,081' -50 -174' -148 -266 261 474 -123 -73 23 France 11 295 -43 -21 -2 -22 7 7 -7 -5 24 Germany 848 2,116 114 -96 -35 127 47 85 -12 -2 25 Netherlands 70 28 32 16 0 3 1 12 -4 5 26 Switzerland 108 161 506 29 62 -2 209 188 28 -8 27 United Kingdom 196 -581' -243 -90' -90 -182 -103 141 119 -38 28 Canada -12 25 94 11 15 21 -18 22 -10 53 29 Latin America and Caribbean 132 160 74 23 11 1 -3 10 19 13 30 Middle East1 3,465 -748' -808 -211 86 32 -50 -378 -168 -119 31 Other Asia 44 -23 400 23 72 59 60 62 47 78 32 Africa -1 -19 3 0 -1 0 -5 1 7 0 33 Other countries -7 7 58 0 0 0 21 2 35 0 34 Nonmonetary international and regional organizations 61 -28 -23 -2 -25 17 -14 -24 2 24 Foreign securities 35 Stocks, net purchases, or sales (-) -247 -1,343' -3,319 -327' -227' -447 -548 -641 -649 -480 36 Foreign purchases 9,339 7,165' 7,639 1,032 1,042 1,187 971 1,079 1,344 983 37 Foreign sales 9,586 8,508' 10,958 1,359' 1,270' 1,634 1,519 1,720 1,993 1,463 38 Bonds, net purchases, or sales (-) -5,460 -6,557' -2,400 29' -278 -556 -686 -837 139 -209 39 Foreign purchases 17,553 29,898' 19,991 2,888' 3,526 2,772 2,3% 2,655 3,220 2,534 40 Foreign sales 23,013 36,455' 22,390 2,859 3,804 3,328 3,083 3,492 3,081 2,744 41 Net purchases, or sales (-), of stocks and bonds -5,707 -7,900' -5,719 -299' -506' -1,003 -1,234 -1,478 -510 -689 42 Foreign countries -4,694 -6,735' -5,224 -275' -818' -714 -1,212 -972 -536 -698 43 Europe -728 -2,433' -4,170 -309' -688' -606 -672 -632 -576 -687 44 Canada -3,697 -2,364 -1,121 -20 -449 13 -438 -287 5 55 45 Latin America and Caribbean 69 288' 888 258 345 -24 88 243 -80 57 46 Asia -367 -1,853' -1,219 -192 -37 -144 -221 -309 -182 -133 47 Africa -55 -9 103 -9 21 30 25 9 16 11 48 Other countries 84 -364 295 -2 -10 16 7 4 280 -1 49 Nonmonetary international and regional organizations -1,012 -1,165' -495 -24' 312 -289 -22 -506 26 9 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 1983 Country or area 1981 1982 J J a u n ly .- Jan. Feb. Mar. Apr. May June July Holdings (end of period)1 1 Estimated total2 70,249 85,169 85,458 86,057 88,675 87,462' 89,375' 90,950 88,675 2 Foreign countries2 64,565 80,586 80.854 82,098 83,046 84,001 84,243' 84,817 83,508 3 Europe2 24,012 29,274 29.855 31,039 32,364 33,511 33,557 33,569 33,017 4 Belgium-Luxembourg 543 447 716 -87 -332 -107 -93 -84 82 5 Germany2 11,861 14,841 15,151 16,650 17,560 17,798 16,953 16,876 16,313 6 Netherlands 1,991 2,754 2,839 3,011 3,194 3,230 3,255 3,251 3,262 7 Sweden 643 667 668 681 656 656 670 655 674 8 Switzerland2 846 1,540 1,013 1,039 1,044 1,070 914 877 855 9 United Kingdom 6,709 6,549 6,721 6,941 7,478 7,719 8,045 8,234 8,241 10 Other Western Europe 1,419 2,476 2,748 2,804 2,764 3,146 3,813 3,761 3,589 11 Eastern Europe 0 0 0 0 0 0 0 0 0 12 Canada 514 602 649 639 724 696 863 972 1,047 13 Latin America and Caribbean 736 1,076 1,066' 1,050 951 932 1,039 1,041 886 14 Venezuela 286 188 190 74 77 72 72 72 62 15 Other Latin America and Caribbean 319 656 720 792 690 676 775' 773 636 16 Netherlands Antilles 131 232 156 185 184 184 192 1% 188 17 Asia 38,671 49,502 49,146 49,256 48,897 48,743 48,664 49,107 48,407 18 Japan 10,780 11,578 11,655 11,707 11,736 11,848 12,120 12,582 12,753 19 Africa 631 77 77 80 80 80 79 79 79 20 All other 2 55 60 34 31 39 42 50 72 21 Nonmonetary international and regional organizations 5,684 4,583 4,604 3,959 5,629 3,461' 5,132' 6,133 5,167 22 International 5,638 4,186 4,165 3,405 4,966 2,969 4,469" 5,327 4,455 23 Latin American regional 6 6 6 6 6 6 6 6 Transactions (net purchases, or sales (-) during period) 24 Total2 12,699' 14,920 3,506 289 599 2,618 -1,212 1,912' 1,575 -2,275 25 Foreign countries2 11,604 16,021 2,922 268 1,245 948 955 243 574 -1,310 26 Official institutions 11,730 14,498' 2,437 20 1,567 962 321 31' 444 -908 27 Other foreign2 -126' 1,518' 485 248 -323 -14 633 211' 130 -400 28 Nonmonetary international and regional organizations 1,095' -1,096 584 21 -645 1,670 -2,167 1,670" 1,001 -966 MEMO: Oil-exporting countries 29 Middle East3 11,156 7,534 -1,907 121 -233 -691 -115 -566 -251 -172 30 Africa4 -289 -552 -1 0 0 0 0 -1 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 Aug. 31, 1983 Rate on Aug. 31, 1983 Rate on Aug. 31, 1983 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 3.75 Mar. 1983 France1 12.25 June 1983 Norway 8.0 June 1979 Belgium. 9.0 June 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.. 9.57 Aug. 1983 Japan 5.5 Dec. 1981 Venezuela 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 • September 1983 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1983 CCoouunnttrryy,, oorr ttyyppee 11998800 11998811 11998822 Feb. Mar. Apr. May June July Aug. 1 Eurodollars 14.00 16.79 12.24 9.14 9.25 9.23 8.96 9.66 10.00 10.27 2 United Kingdom 16.59 13.86 12.21 11.29 10.92 10.21 10.18 9.91 9.84 9.83 3 Canada 13.12 18.84 14.38 9.69 9.36 9.39 9.30 9.41 9.42 9.49 4 Germany 9.45 12.05 8.81 5.79 5.40 5.16 5.27 5.52 5.54 5.66 5 Switzerland 5.79 9.15 5.04 2.95 3.64 4.20 4.48 4.98 4.77 4.61 6 Netherlands 10.60 11.52 8.26 4.82 4.34 5.19 5.65 5.81 5.58 6.03 7 France 12.18 15.28 14.61 12.88 12.64 12.12 12.51 12.59 12.33 12.33 8 Italy 17.50 19.98 19.99 19.04 19.19 18.20 17.75 17.72 17.50 17.50 9 Belgium 14.06 15.28 14.10 12.25 13.32 11.05 10.04 9.73 9.08 9.25 10 Japan 11.45 7.58 6.84 6.64 6.72 6.34 6.26' 6.46 6.47 6.52 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 1983 CCoouunnttrryy//ccuurrrreennccyy 11998800 11998811 11998822 Mar. Apr. May June July Aug. 1 Argentina/peso n.a. n.a. 20985.00 62386.95 66868.56 71100.94 8.08 8.85 8.94 2 Australia/dollar1 114.00 114.95 101.65 88.39 86.76 87.85 87.72 87.54 87.93 3 Austria/schilling 12.945 15.948 17.060 16.940 17.176 17.368 17.974 18.208 18.799 4 Belgium/franc 29.237 37.194 45.780 47.519 48.577 49.239 50.928 51.862 53.609 5 Brazil/cruzeiro n.a. 92.374 179.22 401.30 434.77 465.65 517.28 571.73 643.34 6 Canada/dollar 1.1693 1.1990 1.2344 1.2263 1.2325 1.2292 1.2323 1.2323 1.2338 7 Chile/peso n.a. n.a. 51.118 76.378 76.028 75.405 77.500 78.987 80.011 8 China, P.R./yuan n.a. 1.7031 1.8978 1.9834 1.9938 1.9895 1.9949 1.9966 1.9843 9 Colombia/peso n.a. n.a. 64.071 73.179 74.751 76.153 77.380 78.997 80.707 10 Denmark/krone 5.6345 7.1350 8.3443 8.6223 8.6663 8.8003 9.1287 9.3142 9.6308 11 Finland/markka 3.7206 4.3128 4.8086 5.4266 5.4342 5.4361 5.5351 5.5863 5.7063 17 France/franc 4.2250 5.4396 6.5793 7.0204 7.3148 7.4163 7.6621 7.7878 8.0442 13 Germany/deutsche mark 1.8175 2.2631 2.428 2.4110 2.4397 2.4665 2.5490 2.5914 2.6736 14 Greece/drachma n.a. n.a. 66.872 83.897 84.037 84.105 84.486 84.677 89.217 15 Hong Kong/dollar n.a. 5.5678 6.0697 6.6536 6.7868 6.9667 7.2822 7.1678 7.4416 16 India/rupee 7.8866 8.6807 9.4846 9.9652 9.9824 9.9895 10.049 10.0875 10.187 17 Indonesia/rupiah n.a. n.a. 660.43 714.72 970.81 968.83 973.00 978.57 984.09 18 Iran/rial n.a. 79.324 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19 Ireland/pound1 205.77 161.32 142.05 134.79 129.53 128.11 123.81 121.87 117.99 20 Israel/shekel n.a. n.a. 24.407 38.867 40.951 43.427 46.138 49.614 55.949 71 Italy/lira 856.20 1138.60 1354.00 1429.72 1451.88 1467.76 1510.98 1533.41 1589.74 77 Japan/yen 226.63 220.63 249.06 238.25 237.75 234.76 240.03 240.52 244.46 73 Malaysia/ringgit 2.1767 2.3048 2.3395 2.2898 2.3063 2.3009 2.3244 2.3319 2.3523 74 Mexico/peso 22.968 24.547 72.990 161.78 153.77 150.27 149.02 149.36 151.59 7.5 Netherlands/guilder 1.9875 2.4998 2.6719 2.6834 2.7486 2.7737 2.8557 2.8985 2.9912 76 New Zealand/dollar1 97.34 86.848 75.101 66.642 65.726 66.246 65.659 65.383 65.100 77 Norway/krone 4.9381 5.7430 6.4567 7.1852 7.1460 7.1154 7.2678 7.3280 7.4641 78 Peru/sol n.a. n.a. 694.59 1160.19 1284.37 1390.60 1514.46 1645.99 1853.18 79 Philippines/peso n.a. 7.8113 8.5324 9.5896 9.8449 10.015 10.393 11.050 11.050 30 Portugal/escudo 50.082 61.739 80.101 95.867 99.055 99.521 107.39 119.03 123.03 31 Singapore/dollar n.a. 2.1053 2.1406 2.0854 2.1010 2.0920 2.1198 2.1294 2.1416 37 South Africa/rand1 128.54 114.77 92.297 91.64 91.42 92.31 91.65 91.19 89.55 33 South Korea/won n.a. n.a. 731.93 757.94 765.29 767.96 775.82 779.88 787.19 34 Spain/peseta 71.758 92.396 110.09 133.498 135.99 137.76 143.29 147.973 151.302 35 Sri Lanka/rupee 16.167 18.967 20.756 22.982 22.971 22.970 23.050 24.082 24.257 36 Sweden/krona 4.2309 5.0659 6.2838 7.4882 7.4941 7.4978 7.6351 7.6936 7.8585 37 Switzerland/franc 1.6772 1.9674 2.0327 2.0663 2.0587 2.0572 2.1123 2.1184 2.1632 38 Thailand/baht n.a. 21.731 23.014 22.991 22.990 22.988 22.990 22.990 22.990 39 United Kingdom/pound1 232.58 202.43 174.80 149.00 153.61 157.22 154.80 152.73 150.26 40 Venezuela/bolivar n.a. 4.2781 4.2981 7.9500 9.0429 10.233 11.213 12.595 15.600 MEMO: United States/dollar2 87.39 102.94 116.57 120.71 121.82 122.05 125.16 126.62 129.77 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 p. 700 of the August 1978 BULLETIN. of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 global trade of each of the 10 countries. Series revised as of August 1978. For NOTE. Averages of certified noon buying rates in New York for cable tranfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 when SMSAs Standard metropolitan statistical areas the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1983 A76 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference 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 commercial banks, March 31, 1983 August 1983 A70 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 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1983 August 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 DONALD L. KOHN, 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 NAOMI P. SALUS, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director MICHAEL BRADFIELD, General Counsel EDWARD C. ETTIN, Deputy Director J. VIRGIL MATTINGLY, JR., Associate General Counsel MICHAEL J. PRELL, Deputy Director GILBERT T. SCHWARTZ, Associate General Counsel JOSEPH S. ZEISEL, Deputy Director RICHARD M. ASHTON, Assistant General Counsel JARED J. ENZLER, Associate Director NANCY P. JACKLIN, Assistant General Counsel ELEANOR J. STOCKWELL, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel DAVID E. LINDSEY, Deputy Associate Director FREDERICK M. STRUBLE, Deputy Associate Director HELMUT F. WENDEL, Deputy Associate Director OFFICE OF THE SECRETARY MARTHA BETHEA, Assistant Director ROBERT M. FISHER, Assistant Director WILLIAM W. WILES, Secretary SUSAN J. LEPPER, Assistant Director BARBARA R. LOWREY, Associate Secretary THOMAS D. SIMPSON, Assistant Director JAMES MCAFEE, Associate Secretary LAWRENCE SLIFMAN, Assistant Director STEPHEN P. TAYLOR, Assistant Director PETER A. TINSLEY, Assistant Director DIVISION OF CONSUMER LEVON H. GARABEDIAN, Assistant Director AND COMMUNITY AFFAIRS (Administration) GRIFFITH L. GARWOOD, Director JERAULD C. KLUCKMAN, Associate Director DIVISION OF INTERNATIONAL FINANCE GLENN E. LONEY, Assistant Director DOLORES S. SMITH, Assistant Director EDWIN M. TRUMAN, Director ROBERT F. GEMMILL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director DIVISION OF BANKING LARRY J. PROMISEL, Associate Director SUPERVISION AND REGULATION DALE W. HENDERSON, Deputy Associate Director SAMUEL PIZER, Staff Adviser MICHAEL P. DOOLEY, Assistant Director JOHN E. RYAN, Director WILLIAM TAYLOR, Deputy Director RALPH W. SMITH, JR., Assistant 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 STEPHEN R. MALPHRUS, Assistant Staff Director JOSEPH W. DANIELS, SR., Equal Employment Opportunity EDWARD T. MULRENIN, Assistant Staff Director Programs Adviser DIVISION OF DATA PROCESSING DIVISION OF FEDERAL RESERVE BANK OPERATIONS CHARLES L. HAMPTON, Director BRUCE M. BEARDSLEY, Deputy Director CLYDE H. FARNSWORTH, JR., Director GLENN L. CUMMINS, Assistant Director ELLIOTT C. MCENTEE, Associate Director NEAL H. HILLERMAN, Assistant Director DAVID L. ROBINSON, Associate Director ELIZABETH A. JOHNSON, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director RICHARD J. MANASSERI, Assistant Director WALTER ALTHAUSEN, Assistant Director WILLIAM C. SCHNEIDER, JR., Assistant Director CHARLES W. BENNETT, Assistant Director ROBERT J. ZEMEL, Assistant Director ANNE M. DEBEER, Assistant Director JACK DENNIS, JR., Assistant Director RICHARD B. GREEN, Assistant Director DIVISION OF PERSONNEL EARL G. HAMILTON, Assistant Director *JOHN F. SOBALA, Assistant Director DAVID L. SHANNON, Director JOHN R. WEIS, 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 *On loan from the Federal Reserve Bank of New York. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • September 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., BufiFalo, 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 Officer in charge of branch, or facility Zip Deputy Chairman First Vice President branch or facility 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 Albert D. Tinkelenberg Culpeper Communications John G. Stoides and Records Center 22701 ATLANTA 30301 William A. Fickling, Jr. William F. Ford John H. Weitnauer, Jr. Robert P. Forrestal Birmingham 35283 Samuel R. Hill, Jr. Fred R. Herr 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 Joseph P. Garbarini Little Rock 72203 Richard V. Warner John F. Breen Louisville 40232 William C. Ballard, Jr. James E. Conrad G. Rives Neblett Randall C. Sumner Memphis 38101 William G. Phillips E. Gerald Corrigan MINNEAPOLIS 55480 John B. Davis, Jr. Thomas E. Gainor Gene J. Etchart Robert F. McNellis Helena 59601 Paul H. Henson Roger Guffey KANSAS CITY 64198 Doris M. Drury Henry R. Czerwinski James E. Nielson Wayne W. Martin D O e k n la v h er o ma City 7 8 3 0 1 2 2 1 5 7 Christine H. Anthony William G. Evans Robert G. Lueder Robert D. Hamilton Omaha 68102 Gerald D. Hines Robert H. Boy kin DALLAS 75222 John V. James William H. Wallace Chester J. Kesey Joel L. Koonce, Jr. E H l o P us a t s o o n 7 7 9 7 9 2 9 5 9 2 Paul N. Howell J.Z. Rowe Carlos Zuniga Thomas H. Robertson San Antonio 78295 Caroline L. Ahmanson John J. Balles SAN FRANCISCO 94120 Alan C. Furth Richard T. Griffith Bruce M. Schwaegler Richard C. Dunn Los Angeles 90051 John C. Hampton Angelo S. Carella Portland 97208 Wendell J. Ashton A. Grant Holman Salt Lake City 84125 John W. Ellis Gerald R. Kelly Seattle 98124 *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. OPEN MARKET POLICIES AND OPERATING PROCEDURES— FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to $2.00 each in the United States, its possessions, Canada, one address, $1.75 each. and Mexico; 10 or more of same issue to one address, REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- $18.00 per year or $1.75 each. Elsewhere, $24.00 per NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. year or $2.50 each. 1972. 220 pp. Each Volume $3.00; 10 or more to one BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint address, $2.50 each. of Part I only) 1976. 682 pp. $5.00. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- BANKING AND MONETARY STATISTICS. 1941-1970. 1976. ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 pp. Cloth ed. $5.00 each; 10 or more to one address, 1,168 pp. $15.00. $4.50 each. Paper ed. $4.00 each; 10 or more to one ANNUAL STATISTICAL DIGEST address, $3.60 each. 1971-75. 1976. 339 pp. $ 5.00 per copy. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE 1972-76. 1977. 377 pp. $10.00 per copy. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 1973-77. 1978. 361 pp. $12.00 per copy. pp. $4.00 each; 10 or more to one address, $3.60 each. 1974-78. 1980. 305 pp. $10.00 per copy. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1970-79. 1981. 587 pp. $20.00 per copy. 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, ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Canada, and Mexico. Elsewhere, $10.00 per year or 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. Subscripvolume $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 April 20, $3.75 each. 1983, with an appendix containing provisions of certain 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. other statutes affecting the Federal Reserve System. 576 FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 pp. $7.00. each; 10 or more to one address, $1.50 each. 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 copies Monetary Policy and Reserve Requirements Handbook. of the full text or to be added to the mailing list for the series $60.00 per year. may be sent to Publications Services. Securities Credit Transactions Handbook. $60.00 per year. Federal Reserve Regulatory Service. 3 vols. (Contains all 113. BELOW THE BOTTOM LINE: THE USE OF CONTINGENthree Handbooks plus substantial additional material.) CIES AND COMMITMENTS BY COMMERCIAL BANKS, by $175.00 per year. Benjamin Wolkowitz and others. Jan. 1982. 186 pp. Rates for subscribers outside the United States are as 114. MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE follows and include additional air mail costs: ON COMPETITION AND PERFORMANCE IN BANKING Federal Reserve Regulatory Service, $225.00 per year. MARKETS, by Timothy J. Curry and John T. Rose. Jan. Each Handbook, $75.00 per year. 1982. 9 pp. WELCOME TO THE FEDERAL RESERVE, December 1982. 115. COSTS, SCALE ECONOMIES, COMPETITION, AND PROD- PROCESSING BANK HOLDING COMPANY AND MERGER APPLI- UCT MIX IN THE U.S. PAYMENTS MECHANISM, by CATIONS David B. Humphrey. Apr. 1982. 18 pp. SUSTAINABLE RECOVERY: SETTING THE STAGE, November 116. DIVISIA MONETARY AGGREGATES: COMPILATION, 1982. DATA, AND HISTORICAL BEHAVIOR, by William A. REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT ANNUAL Barnett and Paul A. Spindt. May 1982. 82 pp. HUMAN RELATIONS AWARD DINNER, December 1982. 117. THE COMMUNITY REINVESTMENT ACT AND CREDIT REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT DEDICATION ALLOCATION, by Glenn Canner. June 1982. 8 pp. CEREMONIES: FEDERAL RESERVE BANK OF SAN FRAN- 118. INTEREST RATES AND TERMS ON CONSTRUCTION CISCO, March 1983. LOANS AT COMMERCIAL BANKS, by David F. Seiders. RESTORING STABILITY. REMARKS BY CHAIRMAN PAUL A. July 1982. 14 pp. VOLCKER, April 1983. 119. STRUCTURE-PERFORMANCE STUDIES IN BANKING: AN CREDIT CARDS IN THE U.S. ECONOMY: THEIR IMPACT ON UPDATED SUMMARY AND EVALUATION, by Stephen A. COSTS, PRICES, AND RETAIL SALES. July 1983. 114 pp. Rhoades. Aug. 1982. 15 pp. 120. FOREIGN SUBSIDIARIES OF U.S. BANKING ORGANIZA- TIONS, by James V. Houpt and Michael G. Martinson. Oct. 1982. 18 pp. CONSUMER EDUCATION PAMPHLETS 121. REDLINING: RESEARCH AND FEDERAL LEGISLATIVE Short pamphlets suitable for classroom use. Multiple RESPONSE, by Glenn B. Canner. Oct. 1982. 20 pp. copies available without charge. 122. BANK CAPITAL TRENDS AND FINANCING, by Samuel H. Talley. Feb. 1983. 19 pp. Alice in Debitland 123. FINANCIAL TRANSACTIONS WITHIN BANK HOLDING Consumer Handbook to Credit Protection Laws COMPANIES, by John T. Rose and Samuel H. Talley, The Equal Credit Opportunity Act and . . . Age May 1983. 11 pp. The Equal Credit Opportunity Act and . . . Credit Rights in 124. INTERNATIONAL BANKING FACILITIES AND THE EURO- Housing DOLLAR MARKET, by Henry S. Terrell and Rodney H. The Equal Credit Opportunity Act and . . . Doctors, Mills, August 1983. 14 pp. Lawyers, Small Retailers, and Others Who May Provide 125. SEASONAL ADJUSTMENT OF THE WEEKLY MONETARY Incidental Credit AGGREGATES: A MODEL-BASED APPROACH, by David The Equal Credit Opportunity Act and . . . Women A. Pierce, Michael R. Grupe, and William P. Cleveland, Fair Credit Billing August 1983. 23 pp. Federal Reserve Glossary Guide to Federal Reserve Regulations How to File A Consumer Credit Complaint If You Borrow To Buy Stock REPRINTS OF BULLETIN ARTICLES If You Use A Credit Card Most of the articles reprinted do not exceed 12 pages. Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System Perspectives on Personal Saving. 8/80. The Federal Open Market Committee Federal Reserve and the Payments System: Upgrading Elec- Federal Reserve Bank Board of Directors tronic Capabilities for the 1980s. 2/81. Federal Reserve Banks Survey of Finance Companies, 1980. 5/81. Monetary Control Act of 1980 Bank Lending in Developing Countries. 9/81. Organization and Advisory Committees The Commercial Paper Market since the Mid-Seventies. 6/82. Truth in Leasing Applying the Theory of Probable Future Competition. 9/82. U.S. Currency International Banking Facilities. 10/82. What Truth in Lending Means to You U.S. International Transactions in 1982. 4/83. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Index to Statistical Tables References are to pages A3 through A68 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers, 11, 26, 28 Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, 21, 27 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 25 Banks, by classes, 18, 19-22 Turnover, 15 Domestic finance companies, 39 Depository institutions Federal Reserve Banks, 12 Reserve requirements, 8 Foreign banks, U.S. branches and agencies, 23 Reserves and related items, 3, 4, 5, 13 Nonfinancial corporations, 38 Deposits (See also specific types) Savings institutions, 30 Banks, by classes, 3, 18, 19-22, 30 Automobiles Federal Reserve Banks, 4, 12 Consumer installment credit, 42, 43 Turnover, 15 Production, 48, 49 Discount rates at Reserve Banks and at foreign central banks (See Interest rates) BANKERS balances, 18, 19-21 Discounts and advances by Reserve Banks (See 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

A77 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 (See also Mortgages, 3, 40 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 Foreign transactions, 66 of United States, 54-67 New issues, 36 International organizations, 58, 59-61, 64-67 Prices, 29 Inventories, 52 Special drawing rights, 4, 12, 54, 55 Investment companies, issues and assets, 37 State and local governments Investments (See also specific types) Deposits, 19, 20, 21 Banks, by classes, 18, 30 Holdings of U.S. government securities, 33 Commercial banks, 3, 16, 18, 19-21 New security issues, 36 Federal Reserve Banks, 12, 13 Ownership of securities issued by, 19, 20, 21, 30 Savings institutions, 30, 41 Rates on securities, 3 Of*' Stock market, 29 LABOR force, 47 Stocks (See also Securities) Life insurance companies (See Insurance companies) New issues, 36 Loans (See also specific types) Prices, 29 Banks, by classes, 18, 19—22 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 UNEMPLOYMENT, 47 Reserve requirements, 8 U.S. government balances Mining production, 49 Commercial bank holdings, 19, 20, 21 Mobile home shipments, 50 Treasury deposits at Reserve Banks, 4, 12, 31 Monetary and credit aggregates, 3,13 U.S. government securities Money and capital market rates (See Interest rates) Bank holdings, 18, 19-21, 33 Money stock measures and components, 3, 14 Dealer transactions, positions, and financing, 34 Mortgages (See Real estate loans) Federal Reserve Bank holdings, 4, 12, 13, 33 Mutual funds (See Investment companies) Foreign and international holdings and transactions, 12, Mutual savings banks, 9, 19-21, 30, 33, 41, 42, 43 (See also 33, 67 Thrift institutions) Open market transactions, 11 Outstanding, by type and ownership, 33 NATIONAL defense outlays, 32 Ownership of securities issued by, 30 National income, 52 Rates, 3, 28 U.S. international transactions, 54-67 OPEN market transactions, 11 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

A78 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

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with exten- To promote public understanding of its regulatory sions of credit for the purchase of securities, together functions, the Board publishes the Federal Reserve with all related statutes, Board interpretations, rul- Regulatory Service, a three-volume looseleaf service ings, and staff opinions. Also included is the Board's containing all Board regulations and related statutes, list of OTC margin stocks. interpretations, policy statements, rulings, and staff The Consumer and Community Affairs Handbook opinions. For those with a more specialized interest in contains Regulations B, C, E, M, Z, AA, and BB and the Board's regulations, parts of this service are associated materials. published separately as handbooks pertaining to mon- For domestic subscribers, the annual rate is $175 for etary policy, securities credit, and consumer affairs. the Federal Reserve Regulatory Service and $60 for These publications are designed to help those who each handbook. For subscribers outside the United must frequently refer to the Board's regulatory materi- States, the price including additional air mail costs is als. They are updated at least monthly, and each $225 for the Service and $75 for each Handbook. All contains conversion tables, citation indexes, and a subscription requests must be accompanied by a check subject index. or money order payable to Board of Governors of the The Monetary Policy and Reserve Requirements Federal Reserve System. Orders should be addressed Handbook contains Regulations A, D, and Q plus to Publications Services, Mail Stop 138, Federal Rerelated materials. For convenient reference, it also serve Board, 20th Street and Constitution Avenue, contains the rules of the Depository Institutions N.W., Washington, D.C. 20551. Deregulation Committee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT sumer credit protections. This 44-page booklet ex- PUBLICATIONS plains how to use the credit laws to shop for credit, apply for it, keep up credit ratings, and complain about an unfair deal. The Federal Reserve Board publishes a series of Protections offered by the Electronic Fund Transfer pamphlets covering individual credit laws and topics, Act are explained in Alice in Debitland. This booklet as pictured below. The series includes such subjects as offers tips for those using the new "paperless" syshow the Equal Credit Opportunity Act protects wom- tems for transferring money. en against discrimination in their credit dealings, how Copies of consumer publications are available free to use a credit card, and how to use Truth in Lending of charge from Publications Services, Mail Stop 138, information to compare credit costs. Board of Governors of the Federal Reserve System, The Board also publishes the Consumer Handbook Washington, D.C. 20551. Multiple copies for classto Credit Protection Laws, a complete guide to con- room use are also available free of charge. LE4SING LE4SMG IBCHG TRUTH IN LE4SING What ir Ihithln You Lending Borrow Means To Buy ToYou Stock— C F- IF YOU USE A CREDIT CARD Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis