Federal Reserve Bulletin, 1983-10

VOLUME 69 • NUMBER 10 • OCTOBER 1983 FEDERAL RESERVE 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 745 FOREIGN EXPERIENCE WITH TARGETS are the only real solution to the problem of FOR MONEY GROWTH delayed availability, before the Subcommittee on Consumer Affairs of the Senate Com- Over the past decade a wide variety of mittee on Banking, Housing, and Urban targeting or forecasting procedures have Affairs, September 28, 1983. been used by the six major foreign industrial countries discussed in this article. 776 Henry C. Wallich, Member, Board of Governors, discusses the impressive strength of 755 INDUSTRIAL PRODUCTION the dollar over the past three years and says that there is no single explanation for the Output rose about 1.5 percent in Septemsubstantial appreciation of the dollar, beber. fore the Subcommittee on Domestic Monetary Policy ofMthe tHouse^ommittee on 757 STATEMENTS TO CONGRESS Banking, Finance and Urban Affairs, October 5, 1983. , Paul A. Volcker, Chairman, Board of Governors, testifying on the proposed Financial 783 ANNOUNCEMENTS Institutions Deregulation Act of 1983, says that the bill, taken as a whole, would make Approval of the fee schedule for definitive possible a significant simplification in the securities safekeeping and noncash collecsupervisory procedures applicable to bank tion services. holding companies and that the Board Amendment to Regulation Q. broadly supports the proposal, before the Senate Committee on Banking, Housing, Amendment to Regulation D. and Urban Affairs, September 13, 1983. Proposed amendment to Regulation J; pro- 769 Preston Martin, Vice Chairman, Board of posed amendment of fee schedule for auto- Governors, presents his views on two bills mated clearinghouses. that are designed to widen and deepen the Publication of supplement to list of oversecondary mortgage market and says that it the-counter stocks. would be sound public policy to encourage a broadening of the secondary mortgage Meeting of Consumer Advisory Council. market through more extensive involve- Change in the hours of the Board's public ment of the private sector, before the Subtour program. committee on Housing and Urban Affairs of the Senate Committee on Banking, Hous- Admission of four state banks to membering, and Urban Affairs, September 22,1983. ship in the Federal Reserve System 773 Vice Chairman Martin presents the views of 787 RECORD OF POLICY ACTIONS OF THE the Board on the Fair Deposit Availability FEDERAL OPENMARKETCOMMITTEE Act of 1983, which addresses the practice of depository institutions prohibiting a deposi- At its meeting on August 23, 1983, the tor from withdrawing, for some period, Committee agreed to maintain the existing funds represented by a newly deposited degree of reserve restraint for the period check, and says that electronic payments immediately ahead. The members anticipat- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ed that such a policy course would be 793 LEGAL DEVELOPMENTS associated with growth of both M2 and M3 Amendments to Regulation O; various bank at annual rates of around 8 percent for the holding company and bank merger orders; period from June to September. The memand pending cases. bers also agreed that the need for greater or lesser restraint on reserve conditions should be evaluated against the background AI FINANCIAL AND BUSINESS STATISTICS of available evidence about trends in economic activity and prices and conditions in A3 Domestic Financial Statistics domestic and international financial mar- A46 Domestic Nonfinancial Statistics kets, including foreign exchange markets. A54 International Statistics Depending upon such developments, lesser restraint would be acceptable in the event A69 GUIDE TO TABULAR PRESENTATION, of a significant shortfall in the growth of the STATISTICAL RELEASES, AND SPECIAL aggregates over the period ahead, while TABLES somewhat greater restraint would be acceptable in the context of more rapid A70 BOARD OF GOVERNORS AND STAFF growth in the aggregates. The Committee continued to anticipate that its third-quarter A72 FEDERAL OPEN MARKET COMMITTEE objectives for the broader aggregates would AND STAFF; ADVISORY COUNCILS be consistent with a deceleration in Ml growth to an annual rate of around 7 per- A73 FEDERAL RESERVE BANKS, BRANCHES, cent from June to September, and that AND OFFICES expansion in total nonfinancial debt would remain within the range of 8V2 to IIV2 A74 FEDERAL RESERVE BOARD percent established for the year. It was PUBLICATIONS agreed that the intermeeting range for the federal funds rate, which provides a mecha- A76 INDEX TO STATISTICAL TABLES nism for initiating consultation of the Committee, would remain at 6 to 10 percent. A78 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Experience with Targets for Money Growth Karen H. Johnson, of the Board's Division of countries with common problems. In general, the International Finance, prepared this article. need was to restrain inflation or prevent its reemergence, while promoting recovery if possi- During the 1970s, authorities in several major ble. The policy dilemma presented by stagflation foreign industrial countries adopted explicit tar- made the authorities and the public increasingly gets for the growth of one or more monetary aware of results drawn from economic analysis aggregates as the focus of their respective mone- that stressed the importance of both the actual tary policies. The economic difficulties of the and the expected growth of the money stock in early years of that decade were jointly experi- determining the behavior of total spending and, enced by these countries and, no doubt, contrib- ultimately, the rate of inflation. This work called uted to the change to explicit monetary targeting for greater importance to be placed on the inforin Germany, Switzerland, Canada, the United mation conveyed by the growth of the money Kingdom, and France during 1974-76. Despite stock, and also emphasized the potentially amthis common history, the target procedures im- biguous way in which other financial variables, plemented and the subsequent experience with especially nominal interest rates, reflected the that approach to monetary policy have differed stance of monetary policy. Efforts to reduce the widely among these countries. inflation rate could be enhanced, it was argued, The breakdown of the Bretton Woods system by central bank announcements of future money and the adoption of flexible exchange rates dur- growth. Such announcements might alter the ing 1968-73 resulted in an international monetary expectations of inflation held by the members of framework in which, it was widely perceived, the private sector and so change their behavior, each central bank could elect to exercise inde- particularly with respect to wage bargaining. pendent control over its own money stock. In- As was the case in the United States, a number deed, the desire of several monetary authorities of foreign industrial countries, in particular Gerfor just that independence was a factor in the many, Switzerland, Canada, the United Kingdecisions not to try to restore the postwar system dom, and France, adopted explicit targeting of of fixed exchange rates. The widespread adop- one or more monetary aggregates. Although tion of floating exchange rates in March 1973 was these five foreign countries took this policy acfollowed shortly by the oil-price shock of 1973- tion during a relatively short interval and at a 74. These events and the macroeconomic poli- time of generally similar problems within their cies put in place by many industrial countries in economies, the implementation of these targets response to them contributed to "stagflation" in and the subsequent economic experience under 1974-75. The generally rapid growth of real out- their use have differed among them. For examput abroad in 1973 gave way to recession in the ple, they set targets for a wide variety of aggrefollowing two years, while in most countries the gates, ranging from the monetary base (Switzeralready substantial rate of inflation in consumer land) to a broad liquidity measure (the United prices in 1973 rose further in 1974 and either Kingdom); they expressed targets as a single worsened or declined only slightly in 1975 (see figure (France) or as a range (Canada); they table 1). announced targets for a single year ahead (Ger- These world events in the early 1970s con- many) or for an indefinite period into the future fronted policymakers in the major industrial (Canada). One major foreign industrial country, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

746 Federal Reserve Bulletin • October 1983 1. Inflation and real growth in output abroad, 1973-82 Percentage change from previous year Item 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 Consumer prices Canada 7.6 10.9 10.8 7.5 8.0 8.9 9.2 10.2 12.5 10.8 France 7.3 13.7 11.8 9.6 9.4 9.1 10.8 13.6 13.4 11.8 Germany 6.9 7.0 6.0 4.5 3.7 2.7 4.1 5.5 5.9 5.3 Japan 11.7 24.5 11.8 9.3 8.1 3.8 3.6 8.0 4.9 2.7 Switzerland 8.7 9.8 6.7 1.7 1.3 1.1 3.6 4.0 6.5 5.6 United Kingdom 9.2 16.0 24.2 16.5 15.8 8.3 13.4 18.0 11.9 8.6 Real GDP or GNP Canada 7.5 3.5 1.1 5.8 2.4 3.9 3.2 .5 3.8 -4.8 France 5.4 3.2 .2 5.2 3.1 3.8 3.3 1.1 .2 1.7 Germany 4.5 .7 -1.6 5.4 3.1 3.1 4.1 1.9 .2 -1.1 Japan 8.8 -1.0 2.3 5.3 5.3 5.0 5.1 4.9 4.0 3.0 Switzerland 3.0 1.5 -7.3 -1.4 2.4 .4 2.5 4.6 1.9 -2.0 United Kingdom 7.5 -1.0 -.7 3.6 1.3 3.7 1.6 -2.0 -2.0 1.2 Japan, has not used targets, but rather a system mum reserves on banks' domestic liabilities at of very short-term forecasts of money growth. constant (January 1974) reserve ratios. Inasmuch Since monetary targets have come into use, as CBM is a particular weighted average of the these countries have confronted different prob- assets that constitute M3, it to some degree lems, made different adjustments, and experi- reflects the growth of all monetary assets; the enced different results. Their record of success in selection of such a composite is one approach to meeting targets is mixed. Moreover, as table 1 the problem of choosing between, for example, shows, none of these countries was able, despite Ml and M2 at times when their growth rates are the use of targets, to prevent a reemergence of diverging. The Bundesbank also has data more rapid inflation during the second rise in world oil promptly for CBM than for the aggregates Ml, prices in 1979-80. The experience with alterna- M2, or M3. Over time, CBM and M3 have tended tive targeting procedures continues; it appears to behave similarly. that no one combination of structure and use of In setting the targets, the German authorithese targets has been able to resolve all the ties have placed primary importance on the sum policy dilemmas or meet the various macroeco- of two critical variables: the growth of potennomic problems of the past decade without modi- tial production and the rate of "unavoidable" fication of some kind. price rises. By this procedure the authorities have hoped to avoid adjustments of the target in response to transitory movements in prices or ADOPTION OF MONEY GROWTH TARGETS output. ABROAD Table 2 contains the record of CBM targets for Germany to the present. The initial target called Most foreign countries have implemented targets for CBM to grow at 8 percent during 1975. The for money growth by selecting a single narrow or announcement in 1974 came at the end of a year broad aggregate. Only Germany chose to form a in which the Bundesbank had been looking inforcomposite of several aggregates and use it as the targeted money stock. 2. German targets for growth in CBM Percent Target period Target rate Germany: Use of a Composite Aggregate December 1974 to December 1975 8 1976 annual average 8 In December 1974, Germany became the first of 1977 annual average 8 1978 annual average 8 the countries under review to set an explicit 1978:4 to 1979:4 6-9 target for the growth of a monetary aggregate. 1979:4 to 1980:4 5-8 1980:4 to 1981:4 4-7 The aggregate selected was central bank money 1981:4 to 1982:4 4-7 1982:4 to 1983:4 4-7 (CBM), defined as currency plus required mini- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Experience with Targets for Money Growth 747 mally to the rate of monetary growth as a guide 3. U.K. targets for money growth for policy actions. The explicit setting of a target Annual rate in percent for CBM growth marked a further movement Monetary Target Target period toward the money stock and away from free aggregates rate liquid reserves (a measure of available excess April 1976-April 1977 M3 12 reserves) as the principal indicator in the short April 1976-April 1977 £M3 9-13 April 1977-April 1978 £M3 9-13 run of the stance of monetary policy. After one April 1978-April 1979 £M3 8-12 October 1978-October 1979 ... £M3 8-12 year the annual average rate of growth in CBM June 1979-April 1980 £M3 7-11 was chosen as the target so that unusual growth June 1979-October 1980 £M3 7-11 in one or two months would not have undue February 1980-April 1981 £M3 7-11 February 1981-April 1982 £M3 6-10 weight in the meeting of the target. In 1978, after February 1982-April 1983 Ml; £M3; PSL2 8-12 rapid appreciation of the German mark, very February 1983-April 1984 Ml; £M3; PSL2 7-11 high rates of CBM growth, and a break in the data series owing to a slight modification in the the target was changed to a range of 9 to 13 procedure for calculating CBM, the Bundesbank percent for average annual growth for the 1976/ switched to expressing the target in terms of a 77 fiscal year of sterling M3 (£M3), that portion range of permissible growth rates from the of M3 denominated in pounds sterling. The nonfourth-quarter average of the base year to that of sterling portion of M3 was excluded because it the next. In its January 1979 Monthly Report, the was believed that those deposits were not closely Bundesbank explained that a target range had related to economic activity in the United Kingbeen adopted so that officials might aim for the dom. lower or upper half of the range in response to Table 3 lists the sequence of U.K. monetary the outcome of economic events during the tar- aggregate targets. Until June 1979, the governget period and that annual average growth was ment set annual targets for £M3 growth, which replaced by growth from fourth quarter to fourth after a time it updated at six-month intervals. quarter in order to give a clearer indication of the These targets implied only slight slowing in mondirection CBM growth would take through the ey growth. After the election of the Thatcher year. The authorities did not lower the target government in 1979, the way in which monetary rates set for CBM growth until 1979, and they targets were used in the United Kingdom have lowered them only slightly to date. changed somewhat. Control over the growth of the money stock was given primary importance in the effort to lower the inflation rate, an objec- Use of Broad Aggregates tive for which the Conservatives had campaigned strongly. £M3 remained the targeted aggregate, Both the United Kingdom and France chose partly because Ml was believed too narrow to broad monetary aggregates when they adopted include all the balances relevant to the inflation targets for money growth. process and partly because £M3 could be conveniently linked to fiscal policy through the public United Kingdom. The United Kingdom first pub- sector borrowing requirement. A forward-looklicly announced a target for money stock growth ing plan, known as the Medium-Term Financial in July 1976. The target called for growth of M3 Strategy, was developed in 1980; it set forth at an annual rate of 12 percent for the remainder joint, consistent targets for decreasing money of the U.K. fiscal year. That rate of growth of growth and curtailing public sector deficits over M3, which consists of notes and coin in circula- several years. tion plus all deposits held by residents (other In 1981, several factors combined to call into than banks) at banks in the United Kingdom, was question the accuracy of the rate of growth of judged to be consistent with the overall econom- £M3 by itself in reflecting monetary conditions. ic program to lower the inflation rate and restore Although £M3 was growing rapidly during the external equilibrium that the government was year, other aggregates, especially Ml, were not. undertaking at the time. After just a few months, Short-term interest rates rose for much of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

748 Federal Reserve Bulletin • October 1983 year and were at very high levels during the December in order to avoid giving undue weight second half of 1981. The pound appeared to be to events in a single month. quite strong. In March 1982, it was announced that monetary policy would henceforth focus explicitly on several variables. In addition to Use of Narrow Aggregates £M3, growth targets were set for Ml and PSL2, a broad measure of private sector liquidity that Canada and Switzerland both began setting tarincludes various savings instruments. Moreover, gets for the growth of their respective Ml meathe exchange rate was specifically listed as a sures in 1975. Since then, however, both have variable that provided information about mone- gone through substantial changes in their use of tary conditions and that would be taken into money growth targets. account in policy decisions. This broader, more eclectic approach to monetary growth targeting Canada. In November 1975, the Bank of Canada has been maintained. announced a target of 10 to 15 percent growth (annual rate) for Ml from the average for the France. France announced its first target in second quarter of that year. As explained in the December 1976. That target called for 12.5 per- Bank of Canada Annual Report for that year, Ml cent growth in M2 over the subsequent 12 was chosen as the targeted aggregate because it months. During the previous year, the authori- bore "a reasonably systematic relationship over ties had made statements about their intentions time to the growth rate of aggregate spending in for M2 growth. As table 4 shows, the French the economy, as measured by the dollar value of continued to express targets for M2 as a single GNE, as well as to short-term interest rates." rate for growth from December to December and The relationship between GNE (gross national lowered them slowly until 1982. French mone- expenditure) and Ml contrasted with the case for tary policy made extensive use of selective credit the broader Canadian aggregates, M2 and M3. controls and ceilings during this time. The M2 Since the Bank Act of 1967, these aggregates had targets and credit policy were selected to be contained bank liabilities that paid market rates consistent with one another. of interest. Although the components of the broad aggregates were very sensitive to relative interest rates, these aggregates were not closely 4. French targets for growth in M2 tied to total nominal spending. The short-run Percent interest sensitivity of Ml was important to its suitability as a targeted aggregate, however, be- Target period Target rate cause it was through its influence over short- December 1976 to December 1977 12.5 term interest rates that the Bank of Canada December 1977 to December 1978 12 December 1978 to December 1979 11 sought to control Ml. December 1979 to December 1980 11 December 1980 to December 1981 10 Subsequent Canadian targets for Ml are re- December 1981 to December 1982 12.5-13.5 Average for November and December 1982, ported in table 5. The target ranges steadily and January 1983, to average for decreased throughout the period in question. The November and December 1983, and January 1984 9 Bank of Canada announced new targets, super- H seding the old ones, at irregular intervals. The The Mitterrand government elected in 1981 5. Canadian targets for growth in Ml introduced a variety of economic policy changes. Annual rate in percent Because the implications for money growth of Target period Target rate these various policy moves were somewhat ambiguous, a growth range was announced for the From 1975:2 10-15 From February-April 1976, average 8-12 first time for 1982. In 1983, French authorities From June 1977 7-11 From June 1978 6-10 returned to a single target rate, but changed the From 1979:2 5-9 From August-October 1980, average 4-8 base to the three-month interval centered on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Experience with Targets for Money Growth 749 target base was usually a period, already several 6. Swiss targets for money growth months in the past, during which Ml was near Percent the middle of the target range then in force. With Target period1 Aggregate Target rate the target announced in 1977, the interpretation placed upon the stated growth range was modi- 1975 annual average Ml 6 1976 annual average Ml 6 fied somewhat. The midpoint of the target range 1977 annual average Ml 5 1978 annual average Ml 5 was the intended trend rate of Ml growth with a 1979 2 margin of plus or minus 2 percent throughout the November 1979 to November 1980 Base 4 target interval to allow for short-run variability of November 1980 to November 1981 1981 annual average Adjusted CBM 4 the aggregate. This interpretation meant that 1982 annual average Adjusted CBM 3 variability near the start of the target interval was 1983 annual average Adjusted CBM 3 no more likely to push the aggregate "outside" 1. Annual average growth in this instance is defined to equal the the target range than that which occurred later; average of the 12-month percentage changes for each of the months January, February, and so forth through the year. and, similarly, the range for the targeted aggre- 2. No target was set for 1979. gate did not become any wider as time passed. During the late 1970s, the Bank of Canada but left no room for an independently chosen observed that financial innovation and regulatory path for the money supply. change over time had disturbed the stability of Swiss authorities announced no target for the relationship between Canadian Ml and nomi- money growth in 1979. At the end of that year nal spending on which targeting monetary they returned to explicit targeting, but the chogrowth depended. As a consequence, reliance on sen aggregate was the monetary base (currency the growth of Ml as a guide to policy was plus deposits at the Swiss National Bank held by "considerably qualified," and other information Swiss banks and by commercial and industrial was increasingly taken into account. No new firms, measured at the end of the month). Swiss target was announced after early 1981; and final- officials have explained that the base was selectly, in November 1982, the Governor of the Bank ed, rather than Ml, because of an apparent of Canada announced that explicit targeting of breakdown in the short run of the previously Ml was discontinued. established multiplier relationship linking the two. November was selected as the target base Switzerland. The Swiss National Bank first an- because the December figure each year included nounced a target for money growth in 1975. The substantial transitory changes owing to end-ofchosen aggregate was Ml, currency in circula- year adjustments made by banks in their balance tion plus sight deposits held by residents, al- sheets. Nevertheless, Swiss officials further though a target for equal growth in the monetary adjusted the data internally. Although reports base was implied. Swiss authorities sought to were released about the growth of the base control Ml by controlling the base and argued relative to target, the actual data used by the that over sufficiently long horizons, these two Swiss National Bank as the basis of the target aggregates would grow together in a predictable calculation were not released. way. The initial targets called for 6 percent In 1981, the targeted aggregate was again annual average growth; the target was later low- changed, to adjusted central bank money. This ered to 5 percent for 1977 and 1978 (see table 6). aggregate is the monthly average of daily figures The Swiss franc appreciated sharply in 1978, for the monetary base adjusted for transitory against the dollar but also against the German fluctuations in banks' balance sheets. At the time mark. In response, Swiss authorities formally it was introduced, both current and historical suspended the Ml growth target and openly data were publicly provided. This aggregate is stated their intention to intervene on the ex- closely controlled by the monetary authority and change market as necessary to keep the ex- avoids being dominated by random events on a change rate between the Swiss franc and the particular day of the month or by the transitory German mark above a stated floor. That policy but predictable elements of adjustments by was successful with respect to the exchange rate, banks to their balance sheets. Over sufficiently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

750 Federal Reserve Bulletin • October 1983 long horizons, adjusted CBM and Ml are expect- 7. Swiss money growth1 ed to grow at similar rates. Annual average rate in percent Adjusted Year Ml CBM FOREIGN EXPERIENCE WITH 1975 4.3 6.8 MONEY GROWTH TARGETS 1976 7.7 3.0 1977 5.4 3.5 1978 16.3 16.7 1979 9.0 6.8 The records of these five countries in meeting the targets described above has been mixed. 1980 -9.0 -7.0 1981 -3.5 -.5 1982 3.1 2.6 19832 12.0 5.0 Comparison of Germany and Switzerland 1. According to published data on the monetary base, not the internally adjusted figures used by the Swiss National Bank, the base declined 2 percent from November 1979 to November 1980, and 1.1 Although Germany has targeted a broad aggre- percent from November 1980 to November 1981. See table 6, note 1. 2. Through June. gate and Switzerland a narrow one, the two countries have experienced common problems in the years since 1975, when both began targeting both countries went substantially over target for money growth. Because the central banks of largely the same reasons: strong international both countries are widely regarded as having demand for their currencies, which was met to been successful at retaining credibility in the some extent by central bank intervention and minds of the public with respect to their efforts to monetary expansion. Chart 1 depicts the 1978 control money growth and reduce inflation, a German CBM target relative to the base calculatcomparison of their experiences with targeting is ed using the actual data for 1977. If one attempts useful. to adjust the 1978 figures for the break in March Chart 1 illustrates the path of German CBM (by shifting upward the April-December data), it and the sequence of targets since 1974. Table 7 becomes clear that the target was overshot sigcontains the record of Swiss Ml and adjusted nificantly in that year. For both countries, how- CBM growth over a similar interval. Both coun- ever, this overshooting came at a time when their tries expressed the target as a single figure currencies were appreciating rapidly and their through 1978. Although the definition of a inflation rates were low. "miss" from such a target is ambiguous, it is From 1979 until this year, growth of the targetclear that in Germany through 1977 the growth of ed aggregate has tended to be well within or even CBM tended to be above the target rate. In below target in both Germany and Switzerland. Switzerland the outcome was clearly above tar- Short-term interest rates rose to high levels in get in 1976 and slightly above in 1977. In 1978, both countries in 1980-81. High and rising interest rates were consistent with very slow growth 1. Central bank money in Germany of largely non-interest-bearing Ml deposits, but they induced substitution into interest-bearing Ratio scale, billions of German marks bank deposits. Charts 2 and 3 show the percentage growth of several monetary aggregates for the two countries. While Ml grew slowly or even declined in 1980-81 in Germany and Switzerland, M2 grew very rapidly. As interest rates in general fell in 1982, growth of M2 diminished and that of Ml rose. Ml has continued to grow rapidly through the first half of 1983. Because German CBM gives the greatest weight to those assets contained in Ml (rather than those included only in M2 or M3), it too has been growing Monthly data, seasonally adjusted. There is a break in the series in rapidly and remains above target through the March 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Experience with Targets for Money Growth 751 2. Ml, M2, and central bank money in Germany sodes when the target was overshot by a wide margin. The first episode was 1980, when part of the growth in £M3 was a response to the lifting of the Special Supplementary Deposits scheme, known as the "corset." That regulatory structure had induced funds to flow into instruments other than bank deposits. When it was removed in mid-1980, funds returned to such deposits; £M3 grew rapidly as a result. The second episode occurred in 1981, when growth in £M3 exceeded the target from very 1975 1977 1979 1981 1983 early in the fiscal year. Some of the growth may have been continued adjustment to the removal Quarterly data, seasonally adjusted. There is a break in the CBM series in March 1978. of the corset. A Civil Service dispute in early 1981 that temporarily halted the processing of tax first half of 1983. In Switzerland, adjusted CBM receipts and thus interrupted the flow of funds has similarly accelerated with Ml, but to a lesser through the banking system further complicated extent. assessment of the underlying trend growth in Both of these countries have experienced epi- £M3. A change in the institutions included in the sodes in which growth of the targeted aggregate definition of the U.K. monetary sector introhas exceeded the target. Both have also just duced a break in the measurement of all the concluded several years in succession of growth aggregates in November. Even if some adjustjust at or below target. The ability to keep ment is made for this break, £M3 clearly reepisodes of rapid growth brief may explain the mained above target through the end of the target way these two central banks have been able to interval, by which time the effects of the Civil maintain their credibility. Service dispute should have been reversed. 3. Ml, M2, and adjusted central bank 4. Sterling M3 in the United Kingdom money in Switzerland Ratio scale, billions of pounds Change from year-earlier quarter, percent 1975 1977 1979 1981 1983 Quarterly data, not seasonally adjusted. United Kingdom The growth of sterling M3 in the United Kingdom is illustrated by chart 4 for the period during which targets for its growth have been set. Although £M3 has had a tendency to be at or 1975 1977 1979 1981 1983 above the target for much of this period, that Monthly data, seasonally adjusted. There is a break in the series in aggregate grew extremely rapidly in two epi- November 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

752 Federal Reserve Bulletin • October 1983 5. Ml and PSL2 in the United Kingdom 6. M2 in France Ratio scale, billions of pounds Ratio scale, billions of francs Monthly data, seasonally adjusted. ceilings—were not being met. After initial questions about the M2 target that was consistent with the Mitterrand administration's economic policy program, M2 grew rapidly early in 1982, but it ended the year below the target range. For Monthly data, seasonally adjusted. There is a break in the series in November 1981. the first months of 1983, M2 growth was once again above target. Throughout 1980-81, other aggregates, especially Ml, had not been growing so rapidly as £M3. Interest rates and the exchange rate gave addi- Canada tional evidence of monetary tightness. Faced with this conflicting evidence, the authorities did The recent path of Canadian Ml and the target not take steps to return £M3 to target. For the ranges established for its growth are illustrated in fiscal year 1982/83 they changed the targeting chart 7. Although there was some short-run procedure to include Ml and PSL2 and stated variability of Ml within the target range, until their intention to take into consideration varia- 1981 the gradually lowered targets were consisbles such as the exchange rate as well. Chart 5 tently achieved by the Bank of Canada. shows the record of Ml and PSL2 to date relative Following the announcement in early 1981 of a to the target range. For 1982 all three aggregates target range of 4 to 8 percent, Ml growth began were essentially at or within the target range, but to appear unstable; no subsequent targets were through the first half of 1983 all were somewhat set. In the 1982 Per Jacobssen Lecture, Gerald above target. K. Bouey, Governor of the Bank of Canada, explained the difficulties experienced by the Canadian authorities: France The decision in 1975 by the Bank of Canada to adopt Chart 6 depicts French M2 along with the annual a money supply target was based on the evidence that targets. Although it is difficult to judge money a narrowly-defined monetary aggregate (Ml) was related in a reasonably stable fashion to movements in growth against a single target rate, French M2 total spending in the economy and to short-term plainly has grown at or above the target rate interest rates. . . . repeatedly over this period. The money growth Notwithstanding the contribution of monetary tartarget in France has been part of a wider mone- getting in getting monetary policy on to a better track, tary policy program that includes explicit credit practical problems have emerged in Canada . . . which have reduced the usefulness of these targets as controls. Failure to achieve a particular M2 policy guides. . . . target did not necessarily mean that other goals Perhaps the most troublesome problem in Canada is of the policy program—particularly the credit that the relationship between our target monetary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Experience with Targets for Money Growth 753 7. Ml in Canada reflecting the attractiveness of these interestbearing deposits. Ratio scale, billions of Canadian dollars Faced with a "process of financial innovation and the response of bank customers" that, according to its Annual Report for 1982, has "been rapid and continuing," the Bank of Canada discontinued monetary targeting. Instead, the Bank observes the growth of all the aggregates and extracts information from such observations without setting any target. 1975 1977 1 9 7 9 1 9 81 1983 Monthly data, seasonally adjusted. Japan: Use of Forecasts of Money Growth aggregate—Ml—and the levels of spending and interest rates has not turned out to be as stable as it In contrast to the countries discussed above, appeared in the mid-1970s. . . . Japan has not officially adopted a system of Another very practical issue in monetary targetting targeting the growth of a monetary aggregate. has been how to cope with exchange rate distur- Japanese authorities do, however, release early bances. in the quarter forecasts of the growth they expect The shifting in the role of M1 to which Gover- to observe in the combined total of M2 and nor Bouey referred was caused at least in part by certificates of deposit from the equivalent quarsignificant financial innovation within the bank- ter one year earlier. Thus, when the forecast is ing system. That development is reflected partly released, approximately three-fourths of the by the rapid growth of M2 in 1980-81 while Ml forecast "horizon" has already been experiwas slowing and even decreasing, as chart 8 enced, and the data are known. The forecast shows. The emergence of bank accounts paying does serve to indicate the direction in which competitive interest on a daily basis, first avail- officials expect to see money growth proceeding able at notice and later available as checkable as a result of both their own previous policy deposits, led to a redefinition of the Canadian actions and market forces. For example, from aggregates and the creation of a new one, MIA. the first quarter of 1982 to the first quarter of This aggregate adds to Ml all daily-interest 1983, the forecast growth rates decreased steadicheckable deposits and the nonpersonal compo- ly from 11 to 7 percent. nent of notice deposits. Since mid-1980, MIA Japanese monetary policy has been implehas consistently grown at a rate faster than Ml, mented by direct intervention in financial market transactions. Interest rates have largely been administered, and "window guidance" from the 8. Ml, MIA, and M2 in Canada Bank of Japan to commercial banks has limited the expansion of bank credit. Although the use of Change from year-earlier quarter, percent direct intervention appears to be diminishing, the Japanese authorities have not yet taken the step of seeking to control the rate of nominal spending indirectly by setting a target for the growth of a monetary aggregate. LESSONS FROM THE FOREIGN EXPERIENCE Over the past decade a wide variety of targeting Quarterly data, seasonally adjusted. or forecasting procedures have been used by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

754 Federal Reserve Bulletin • October 1983 six major foreign industrial countries discussed The adoption of monetary targeting has not in this article. Indeed, no two of them have used eliminated the problem of dealing with conflictthe same procedure. Nevertheless, most of these ing or ambiguous information with respect to countries have found it necessary to make ad- monetary conditions. Very slow growth of narjustments in their particular form of monetary row aggregates and rapid growth of broad ones control as economic events have unfolded over occurred during 1980-81 in several countries, the past several years. The Swiss, who have particularly the United Kingdom, Germany, and preferred targeting a narrow aggregate, and the Switzerland, and caused a major change in policy British, who began by targeting a broad one, procedure in the United Kingdom. Just the rehave made the greatest changes in their proce- verse pattern of money growth has been occurdures while still retaining a monetary policy ring in several countries in 1983, and the diverbased on money growth targets. Only Canada gent behavior of the aggregates may well be one has chosen to discontinue targeting a specific reason authorities have not acted more forcefully aggregate altogether. While France and Germany to date to return money growth within target have made only slight adjustments to their target- ranges. Regulatory change, financial innovation, ing procedures, France has allowed money and structural shifts of many kinds all have the growth to exceed the stated target repeatedly; potential to distort the effects of a given target for and Germany has permitted deviations from tar- money growth from those expected and intendget, once by quite a substantial amount and quite ed. Foreign experience suggests that the ability deliberately, when market conditions seemed to to respond flexibly to disturbances of these kinds warrant it. is an essential aspect of the implementation of targets for monetary aggregates. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

755 Industrial Production Released for publication October 14 1967 average, overall industrial output in September 1983 was near its previous monthly highs Industrial production increased 1.5 percent in reached in March 1979 (153.5 percent) and July September, and the August and July increases 1981 (153.9 percent). The production of consumwere revised upward to 1.2 and 2.2 percent er goods last month was about 5 percent higher respectively. Output gains in September were than in July 1981, but the output of business sizable and widespread, with especially large equipment and of durable goods materials (espeincreases occurring in automotive products and cially steel) remained below earlier peaks. in business equipment. At 153.7 percent of the In market groupings, output of consumer 1967 = 100 1967 = 100 TOTAL INDEX 170 Materials output 170 150 7\ 150 130 Products output 130 FINAL PRODUCTS 190 " MATERIALS Nondurable - 190 / - 170 170 Business equipment \ 150 £ S 150 / ,—>- \ /Durable^ / - J ^ 130 / - 130 Energy sj ~ 110 - 110 90 1 1 i 1 1 1 90 190 190 CONSUMER GOODS INTERMEDIATE PRODUCTS 170 170 Nondurable Business supplies 150 V/ \ / 150 /V - Vm/ Durable\ v / 130 Construction supplies 130 J I I I I 110 110 1969-70=100 Annual rate, millions of units 180 140 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: September. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

756 Federal Reserve Bulletin • October 1983 1967 = 100 Percentage change from preceding month Percentage cchhaannggee,, Grouping 1983 1983 SSeepptt.. 11998822 ttoo SSeepptt.. Aug. Sept. May June July Aug. Sept. 11998833 Major market groupings Total industrial production 151.4 153.7 1.3 1.4 2.2 1.2 1.5 11.9 Products, total 152.5 155.0 1.2 1.3 1.9 1.1 1.6 10.1 Final products 150.2 152.7 1.2 1.3 1.8 .8 1.7 9.1 Consumer goods 156.0 158.2 1.8 1.3 1.7 .6 1.4 10.3 Durable 154.3 158.2 3.6 2.5 2.5 .8 2.5 20.5 Nondurable 156.6 158.3 1.2 .9 1.4 .5 1.1 6.8 Business equipment .. 154.8 158.4 .5 1.7 1.9 1.2 2.3 5.2 Defense and space ... 121.5 122.9 -.5 .3 1.7 1.3 1.2 12.2 Intermediate products .. 161.0 163.2 .9 1.5 2.3 1.8 1.4 13.6 Construction supplies. 148.6 150.7 1.5 2.7 2.6 1.9 1.4 20.1 Materials 149.6 151.7 1.4 1.4 2.6 1.4 1.4 14.9 Major industry groupings Manufacturing 152.3 155.0 1.4 1.6 2.0 1.3 13.1 Durable 138.6 141.7 1.5 1.7 2.7 1.3 2.2 14.7 Nondurable . 172.1 174.2 1.3 1.5 1.4 1.1 1.2 11.2 Mining 116.1 117.3 1.1 -.2 2.0 1.0 1.0 2.3 Utilities 177.9 175.9 .2 3.7 1.1 5.0 NOTE. Indexes are seasonally adjusted. goods increased 1.4 percent in September. Autos The increase in materials output was again were assembled at an annual rate of 7.8 million sizable, with both durable and nondurable mateunits—up about 4 percent from the August level. rials advancing 1.9 percent. Energy materials, Production of consumer-use trucks and home however, declined, mainly due to a reduction in goods also advanced strongly. Output of busi- generation of electricity from exceptionally high ness equipment rose 2.3 percent in September, August levels. reflecting continued large gains in most compo- In industry groupings, manufacturing producnents as well as a strike rebound in the telephone tion rose 1.8 percent in September. Output of apparatus industry. Output of defense and space durables increased 2.2 percent and of nonduraequipment continued to expand, while produc- bles, 1.2 percent. Mining output was up 1.0 tion of construction supplies rose 1.4 percent percent, but output by utilities declined. further. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

757 Statements to Congress Statement by Paul A. Volcker, Chairman, Board take advantage of loopholes or ambiguities in the of Governors of the Federal Reserve System, existing legal fabric and others are not. And in before the Committee on Banking, Housing, and some cases, important objectives of public policy Urban Affairs, U.S. Senate, September 13, 1983. embodied in existing law are threatened or undermined. The pervading atmosphere of unfair- I appreciate the opportunity to appear on behalf ness, of constant stretching and testing of the of the Federal Reserve Board before this com- limits of law and regulation and of circumvention mittee to review with you a wide range of issues of their intent, and of regulatory disarray is affecting the evolution of banks, banking, and the inherently troublesome and basically unhealthy. financial services industry. The proposed "Fi- As I emphasized in April, there can be no nancial Institutions Deregulation Act of 1983," doubt that a reexamination of the existing legislasubmitted to you by the Treasury on behalf of the tive framework has become urgent. We are at a administration provides a focus for these com- crucial point. We can turn the system toward ments. creative innovation consistent with certain broad I testified before this committee in the course and continuing concerns of public policy. Or, left of its general review earlier this spring, and I unattended, we can continue to see the financial expressed then my conviction that the Congress system evolve in haphazard and potentially danshould now move to reform the existing legisla- gerous ways—ways dictated not just by natural tive framework governing banking organizations responses to market needs but by the often to provide some assurance that the powerful capricious effects of existing and now outmoded forces of change are channeled in a manner provisions of law. consistent with the broad public interests at When I was before you in April, I suggested a stake—the need to maintain a safe and stable possible interim step of a temporary limitation on financial system, to assure equitable and compet- combinations of nonbank banks (and thrift instiitive access to financial services by businesses tutions) with nondepository institutions, as well and consumers, and to preserve an effective as a similarly temporary halt to new state authomechanism for transmitting the influence of mon- rizations of expanded nonbanking activities for etary, credit, and other policies to the economy. state-chartered banks. This interim step still Nothing that has happened over the summer seems to me required to provide the Congress has reduced the need for early action—quite the with the minimum time necessary to decide on contrary. New combinations of firms in the fi- appropriate policy approaches rather than to be nancial services area, new services, and new faced with a multiplying number of faits accomcombinations of older services are proceeding. plis, vastly complicating the job of orderly re- No doubt, much of this change reflects a form. natural, and potentially constructive, effort to Since that time, other proposals have been respond to market incentives, customer needs, made to limit acquisitions of banks and thrifts by and new technology. What is so disturbing is that nondepository institutions. The particular promuch of this activity is forced into "unnatural" posals of Chairman St Germain of the House organizational form by the provisions of existing Banking Committee and Chairman Isaac of the law and regulation. The consequences are obvi- Federal Deposit Insurance Corporation (FDIC) ous and serious. In some cases, the services are are more sweeping, requiring divestiture of existless readily available, at higher cost, than would ing combinations, and represent permanent prootherwise be the case. Important competitive hibitions. These proposals, as I understand inequalities exist, as some institutions are able to them, are not set forth as immediate, practical Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

758 Federal Reserve Bulletin • October 1983 legislative initiatives, but rather to emphasize the ing continuing attention to the safety and soundneed for more forward-looking, constructive re- ness of banks. form by indicating the logical alternatives to At the heart of the problem, in setting out an absence of such action. appropriate legislative framework, lies the fact All these proposals have as their fundamental that, in some circumstances, these easy-to-state, premise that the present situation is untenable. I agreed-upon objectives may be in conflict or share that view. We must either move forward, point toward different approaches. We normally or we must define more precisely, carefully, and should and do look toward the marketplace— equitably the boundaries of existing law dealing free of regulations except those necessary to with the separation of banking and commerce preserve competition—to promote competition and of activities within the financial sector. Sim- and efficiency. But when soundness, confidence, ply waiting for the "dust to settle," where it will, and continuity in the provision of money and cannot be a satisfactory alternative. It is all too payments services are at stake, deregulation likely that the dust will fall unevenly and unfairly cannot alone achieve the objectives because and impair the financial machinery. The morato- some degree of government support and regularium proposal can provide only an imperfect, tion is implicit. The creation of the Federal temporary shield while you work out a more Reserve and the FDIC—and, more recently, our forward-looking approach, but it would nonethe- shared concern about the need for more intensiless serve the purpose of preserving your deci- fied supervision of international lending—are obsionmaking flexibility and of setting a deadline vious cases in point. for more comprehensive congressional action. In approaching that dilemma—encouraging the In that sense, I see it as a complement to, and free play of market forces while also recognizing not a substitute for, the initiative taken by the the need to preserve a "hard core" of safety and administration to place before you a specific soundness in the financial and payments sysproposal for reform. We welcome that proposal, tem—we have emphasized in earlier testimony for it provides a constructive framework for your the following points as a basis for legislation: deliberations on a suitable approach to guide us 1. We should continue to recognize that banks, over the next generation. and depository institutions generally, perform a The remainder of my statement first restates unique and critical role in the financial system the broad considerations and criteria that we feel and the economy—as operators of the payments should underlie any legislation and then, against system, as custodians of the bulk of liquid savthat background, deals with more particular as- ings, as essential suppliers of credit, and as a link pects. between monetary policy and the economy. 2. This unique role implies continuing governmental concerns—concerns that may be reflect- GENERAL CONSIDERATIONS ed both in the support provided by lender-of-lastresort and deposit-insurance facilities and by The core objectives of banking and financial regulatory protection against undue risk or bias reform seem simple to cite. As in other areas, we in the credit-decision process. want a system that encourages competition in the 3. A bank or depository institution cannot be provision of banking and financial services; and wholly insulated from the fortunes of its affiliconsistent with those competitive processes, ates—their success or failure or their business consumers and businesses—small or large— objectives. should be able to purchase financial services at In essence, these essential points seem to us to minimal cost. By its nature, a banking system set broad limits on the extent to which market also needs to be responsive to the concerns of and competitive forces alone can be relied upon public policy, including the need for an effective to shape the evolution of banking organizations transmission belt for monetary policy. Finally, within the financial and economic system. For throughout history, here and abroad, there has instance, they underlie the strong tradition in the been special concern about the need to maintain United States of a separation between banking confidence in the basic payments system, imply- and commerce, although the precise line be- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 759 tween the two needs to be reexamined in the light state banking relationships would seem to be a of changes in technology and other factors. It is prerequisite for intelligent approaches to the precisely in drawing lines of this kind—and in latter issues and, as a practical matter, is added achieving an appropriate balance between legiti- reason for dealing with the administration bill mate and continuing regulatory concerns and the promptly. need to respond to competitive forces—that difficult and controversial legislative choices must be made. BANK HOLDING COMPANY REGULATION For our part, we believe the administration UNDER THE ADMINISTRATION BILL bill, taken as a whole, provides a reasonable balance, and we broadly support the proposal. With this background, I would now like to com- This bill would make possible a significant—even ment on the major provisions of the bill and how sweeping—simplification in the supervisory pro- they affect new activities, the definition of bank, cedures applicable to bank holding companies supervisory procedures, conflicts of interest, and and allow them a broadly expanded range of avoidance of excessive risks. The Board may financial activities. But it also maintains the wish to bring additional details to the attention of broad distinctions between banking and com- the committee at a later time. merce and would prohibit, or sharply circumscribe, participation in certain financial areas— underwriting of corporate securities and real New Activities estate development—characterized by particularly strong elements of risk or potential conflicts The powers provisions of the administration bill of interest. are its centerpiece, not only because they repre- I must emphasize that our support for the bill sent a major expansion in the types of activities is predicated on the retention of the essential in which banking organizations may engage, but safeguards—including an adequate supervisory also because they—in combination with the defiframework—to protect the safety and stability of nition of a bank contained in the bill—will deterbanking institutions and the banking system. We mine the types of nonbank firms that may own have also noted certain problem areas with re- banks. Nonbanking activities of bank holding spect to the broader powers, which I will be companies would be expanded to include, with discussing in more detail. We also recognize that the principal exception of corporate underwritthe bill, as encompassing as it is, would leave ing, not only those services "closely related to large areas of unfinished business. I will have banking," but also those of a "financial nature." comments on state-federal regulatory relation- The bill would specifically authorize ownership ships and on the relationship between bank and of thrift institutions, insurance and real estate thrift powers—both areas in which further legis- brokerage, real estate development (with limitalative direction is urgently needed. tions on the amount of capital investment), insur- Important questions have also been raised ance underwriting, and certain securities activiabout the nature and role of deposit insurance in ties if performed in a separate securities affiliate. our evolving banking system—a matter the FDIC These securities affiliates would be authorized to and the Federal Savings and Loan Insurance underwrite municipal revenue and certain types Corporation (FSLIC) have themselves had under of industrial revenue bonds and to sponsor and review—and about the division of supervisory underwrite money market and stock and bond and regulatory responsibilities in the federal gov- mutual funds registered under the Investment ernment—a matter under study by the Bush Task Company Act. Force. I do not in any way minimize the impor- The proposal thus draws the circle separating tance of these matters. My own sense is that "banking" from commerce more broadly, but— your consideration of them might logically fol- taking into account the cautionary comments on low, rather than accompany, your consideration certain activities that I will detail below—still of the present administration bill. Indeed, the within the bounds of what we believe is necessorting out of bank and thrift powers and federal- sary to maintain safety and soundness and to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

760 Federal Reserve Bulletin • October 1983 avoid potentially harmful conflicts of interest, to assist appropriate functional regulation and to excessive concentration of resources, and undue help contain the elements of risk and conflicts of risk—the basic policy objectives that the Con- interest. We believe that the bill before you— gress has sought to attain through the Bank while placing operations of nonbanking activities Holding Company Act. in separate subsidiaries—also provides adequate criteria for authorizing nonbanking activities and provision for supervision to the extent neces- Definition of Bank sary. At the same time, unnecessary regulation would be eliminated, and there would be a major The definition of the term "bank" is a key streamlining of the necessary supervisory proceelement in the bill because it defines the scope of dures. institutions to which the Congress wishes to Present statutory procedures, in effect, require apply these basic policies. The administration that a bank holding company, unlike other comproposal redefines the term "bank" to include panies planning to enter a new line of business, any insured bank, any institution eligible for be able to demonstrate to a public body—the FDIC insurance, and any institution that accepts Board of Governors—that there are positive net transaction accounts and makes commercial public benefits stemming from a nonbanking loans. acquisition. This procedure affords competitors This definition has attracted wide support. It is and other parties opportunities for comment, for contained not only in the administration bill, but hearing, and ultimately for judicial review. In also in our own moratorium proposal and the effect, the burden of proof is on the applicant, moratorium bills suggested by Chairman St Ger- and the process affords opportunities for costly main and the FDIC. This and other provisions and burdensome delay by competitors. would close the nonbank loophole and encom- Under the proposed procedure, a bank holding pass other deposit-taking institutions that could company making an acquisition within the generbecome vehicles for evasion of the policies of the al framework of the permitted powers would still act. While a broadening of the scope of the be required to submit a notice of such acquisidefinition beyond institutions that are federally tion, but it could proceed unless disapproval by chartered and insured should be carefully scruti- the Board of Governors was indicated within a nized to assure that we are not covering more limited time period on the basis of certain statuthan is necessary, it is our initial judgment that tory considerations. Those statutory considerthe broader definition is both necessary and ations—adequacy of financial resources, adedesirable to assure that we are not faced, within a quacy of managerial resources, protection of short period of time, with the same kind of impartiality in the provision of credit, and avoidloophole evasions that are so troubling today. ance of any material adverse effect on affiliated banks' safety and soundness—are designed to assure that certain longstanding purposes of the Supervisory Procedures Bank Holding Company Act are maintained. As a further measure to assure safety and Suggestions have sometimes been made that soundness and fair competition with businesses confining the conduct of new activities within in the same lines of activity, but not associated nonbank subsidiaries of a bank holding company with banks, the bill also provides that criteria be would itself adequately insulate the bank from developed to require that nonbanking activities risks or conflicts of interest involved in such of banking organizations be capitalized at least as activities, and therefore make feasible and ap- well as those of comparable competing busipropriate virtually any activity within a bank nesses. At the same time, the provision in the holding company. As I have stressed before, the present law that requires evaluation of competi- Board does not believe that this concept can tive factors by the Federal Reserve would be achieve its objectives, although legal separation deleted. The antitrust laws would, of course, of parts of the holding company may be desirable continue to apply, and consequently, primary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 761 responsibility for antitrust enforcement for bank toward the joint offering of a variety of products, holding companies, as for other companies, linked together in some significant way. For would shift to the Justice Department. example, the combination of banking with real The law would permit the Board, by general estate, insurance, mutual funds, and securities regulation, to prescribe limitations on any new brokerage in one holding company makes it more activities consistent with the four stated criteria likely that these products will be purchased in and with safe and sound financial practices gen- the same place, and inducements to purchase erally. The bill also provides adequate supervi- one service packaged with another offered at an sory authority over the activities of the holding attractive price are natural. We are already witcompany and its nonbank subsidiaries after they nessing this process in the advertising by a major are in operation. While encouraging reliance on retail and financial firm that it will provide disreports required by other regulatory agencies to counts on its household items if a customer avoid duplication of reporting requirements, the purchases a home through that firm's real estate Board is authorized to obtain further data if brokerage subsidiary. necessary to assess compliance with the Bank There is no doubt that opportunities for tying, Holding Company Act and to institute proce- formal or informal, will exist if banking organizadures to assure compliance with law. tions are able to offer real estate, mutual funds, The net result of the new procedures should be insurance and securities brokerage, together to speed greatly the application process and to with traditional banking products. Because of eliminate the possibility of dilatory tactics by concern about maintaining impartiality in the competitors. At the same time, the Board be- provision of credit, the Congress enacted a spelieves that the statutory criteria and the frame- cific prohibition, at the time it expanded bank work for applying them are adequate to protect holding company powers in 1970, on the tying of the customer, the bank, and the financial system. bank to nonbank services. Under the administration proposal, these prohibitions would remain intact. Conflicts of Interest Our experience in administering these rules indicates that they are effective in preventing One of the major continuing concerns of the abuses of the bank that could endanger its finan- Congress in the Bank Holding Company Act has cial stability. We assume that they continue been to prevent conflicts of interest in the provi- essentially unchanged. sion of credit. The objectives are several and The Board, by regulation, has applied the include the following: the assurance of fair and same rules on tying to transactions involving the open competition in the provision of credit; nonbank subsidiaries of bank holding companies. maintenance of the impartiality of banks in credit However, applying and enforcing such a regulajudgments; and avoidance of practices that could tion would become increasingly difficult as nonundermine the strength of the bank itself. bank activities expand. Moreover, as indicated Those broad concerns remain real, but we also by the earlier example, other companies that believe that extension of bank holding companies provide financial services are not inhibited by into new lines of activity—combined with chang- such rules. If the Congress chooses to encourage ing technology—require reconsideration of the the concept of a supermarket of financial serissue with respect to legislation and regulation. A vices, there is no reason why nonbank subsidiarsingle firm will be able to provide a much broader ies of bank holding companies should not be range of products to its customers—that, indeed, permitted to participate in this development on is the driving force behind the proposal. This the same basis as other providers of financial ability promises to provide the consumer with services. increased convenience through "one-stop shop- We would like to have direction from the ping" for a range of financial services, and Congress about whether, in the framework proshould increase his options. vided by the administration bill, prohibitions At the same time, the natural tendency will be against tying should be maintained among non- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

762 Federal Reserve Bulletin • October 1983 bank subsidiaries of bank holding companies as help maintain one of the basic public policy well as against the bank itself. If so, it would objectives of the act—the maintenance of imparappear competitively inequitable to have such tiality in the credit extension process. strict rules apply (beyond services provided by a bank itself) while continuing to allow nonbank financial institutions the ability, through dis- Controlling Excessive Risk counts and other means, effectively to tie their financial products. A basic question in appraising the administration Another area of potential conflict arises when proposal is whether the result would be to ina lender—and particularly a bank lender and crease unduly the risks to the stability of a bank fiduciary—has important ownership interests. In and to the banking system generally. As indicatthe past, any problem has been minimal in bank- ed earlier, we do not believe that the fortunes of ing because of the strong limitations on equity a bank can be insulated effectively from other investment by a bank and its affiliates. However, parts of its holding company that are subject to as a result of real estate development, insurance common management, notwithstanding adoption company and sponsored mutual funds activities, of formal rules and regulations to avoid conflicts equity investments by a bank holding company of interest and to minimize appearance of a would become much more significant in the common entity. Consequently, we have refuture. viewed the administration proposal from that The provisions of the bill before you provide point of view, and we are satisfied that sufficient some basic protections against abuse of the supervisory authority would be provided to deal bank. The bill does not authorize underwriting of with most sources of potential difficulty. corporate debt or equity securities, an area in We remain concerned with the areas of real which the potential for conflicts of interest and estate investment and development, which are, risk may be particularly great. During an under- by their very nature, subject to high risk. In writing of securities handled by an affiliate, the recognition of those dangers, the proposed bill securities involved could not be purchased by limits the investment a bank holding company another affiliate, and the securities or other as- can make in a real estate development subsidiary sets of an affiliate could not without authoriza- to not more than 5 percent of the primary capital tion be acquired by another affiliate acting in a of the holding company. We view this limit as a fiduciary capacity. The current safeguards on reasonable and necessary restraint on the size of inter-affiliate transactions would be broadened the capital commitment a bank holding company beyond the present restrictions on the extension may make in its real estate development subsidof credit to include complementary restrictions iary, but we also believe, at least in the early on the purchase of assets, the furnishing of stages of bank involvement with this activity, services, and other transactions with a third that further restraints may be necessary. For party in which an affiliate has an interest, essen- example, a high degree of leveraging in relatively tially requiring that these transactions be on speculative or otherwise risky real estate develnonpreferential market terms. opment could effectively impair the intended These are useful provisions, but there are effect of the limit. The experience with real many potential situations, for example in the real estate investment trusts, when banks had no estate area, where objective market values and a equity involvement but felt their name and repu- "market" test are difficult or impossible to mea- tation were at stake, remains relevant in assesssure. For this reason and to lessen the risk of ing the nature of bank exposure to large ventures conflicts that could be harmful to the bank or to carried out by affiliated companies. the public, consideration should be given to a In that light, we believe it appropriate that the prohibition on loans by a bank to any entity in Congress clearly provide regulatory authority for which a bank affiliate has a substantial or con- the Federal Reserve to define more precisely the trolling ownership interest. This would help as- nature of permissible real estate development sure that a bank's lending judgments would not and the amount by which such a subsidiary could be clouded by the equity relationship and would leverage its capital. We also raise the question of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 763 whether such activity should normally extend to At some point in the future, should experience active control and ownership of essentially com- confirm that combinations of insurance and mercial operations—construction companies, banking firms have raised no special problems, building operations, land speculation, and the elimination of all restraints on such amalgamlike. Our understanding is that many bank hold- ations may be appropriate and desirable. For ing companies are primarily interested in oppor- now, we would suggest that the process proceed tunities for equity or equity-like participation in at a more deliberate pace, and an effective means real estate projects under the active management of accomplishing that would be to relate bank and control of others and in fuller participation in holding company investment in an insurance the financing of such ventures. This range of company to a limited fraction of its capital. activities is more congruent with the experience Under such a rule, the largest banks would be and role of financial institutions. able to purchase smaller or medium-sized under- While similar questions have been raised about writers; smaller banks would have to combine in the risks involved in insurance underwriting, and joint ventures to accomplish this result—not an particularly underwriting of property and casual- undesirable result to assure spreading of risk and ty insurance, the record suggests that these risks avoidance of relationships that could result in can be effectively managed through application incentives for tying. Reciprocally, a holding of prudent underwriting practices. Such subsid- company with a dominant large ihsurance comiaries would remain under the supervision of pany would be limited in the size of its bank relevant state authorities. Thus, we do not sug- acquisitions. The bill should be amended to gest statutory limitations on the types of insur- provide explicit authority to apply such an apance underwriting that should be considered proach as we gain experience. permissible. However, because of the potential To assure that the objectives I have outlined risks involved in some kinds of property and can be fully achieved, it would be advisable to casualty insurance, I welcome the flexibility pro- clarify the provisions of the Bank Holding Comvided by the proposed bill to limit the scope of pany Act to assure that the general examination insurance underwriting by bank holding compa- and regulatory authority of the Board extend on nies if experience indicates a need to circum- the same basis to insurance underwriting subsidscribe the scope of participation by banking iaries of bank holding companies as to other organizations in this activity. nonbanking subsidiaries. The provisions of exist- Consideration of risk and potential concentra- ing federal law delegate insurance regulation tion of financial resources coincide in suggesting entirely to the states. that another limitation similar to that imposed by the bill on real estate development companies would be appropriate. As a general proposition, COMPETITIVE EQUALITY bank holding companies could be expected to AMONG DEPOSITORY INSTITUTIONS enter the insurance underwriting business through acquisitions of existing companies with I have reviewed before with the committee our management expertise in place and with sea- concern that as thrifts have assumed more and soned portfolios rather than through de novo more commercial banking powers and as they expansion. The same is also likely to be the case also retain powers that extend well beyond those for insurance companies entering the banking of banks and bank holding companies, competibusiness. The speed or degree to which these tion among depository institutions is distorted major industries, which have historically operat- and inequitable. With these issues left unattended separately, should be permitted to combine ed, we are drifting into an inconsistent and within a holding company structure seems to us irrational public policy. To the extent restrictions an important question. We have doubts about and regulations on bank holding companies are whether it would be good public policy to allow justified by abiding public concern, those restricthe largest banks to acquire the largest insurance tions will be undercut to the extent the same or companies, or conversely, the largest insurance similar banking powers can be exercised in a companies to acquire the nation's largest banks. more liberal (or in this context "laxer") regula- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

764 Federal Reserve Bulletin • October 1983 tory environment. To the extent the restrictions would continue to have more favorable branchare not justified, they should be abolished. ing flexibility and tax treatment, and access to To illustrate the potential in the present situa- Home Loan Bank funds for expansion purposes. tion, firms engaged in any type of commercial or Nonetheless, the proposal will inevitably be financial activity can potentially own a savings controversial, involving as it does a clear step and loan association, which, in turn, has powers toward more uniform regulatory treatment howcomparable with banks but may also (1) have ever justified that may appear to be in view of the branches or otherwise expand interstate and growing banking powers of thrifts. Such concern intrastate; (2) have insurance and real estate may be more justified among thrifts that in fact development subsidiaries; (3) receive long-term are not substantial competitors in traditional expansion funding from the Home Loan Banks; commercial banking markets and that wish to and (4) qualify for special bad debt tax treatment retain their special character in emphasizing resiby the Internal Revenue Service. In practice, dential mortgage lending. federally chartered thrifts still have limited com- I have on a number of occasions, before this mercial loan and demand deposit powers, and committee and elsewhere, noted my personal the Federal Home Loan Bank Board has not belief that specialized financial institutions have encouraged widespread ownership of thrifts by served this country well over time, and that the commercial firms or investment houses. But it is Federal Reserve could be supportive of some also true that some states have provided, at their differences in regulatory, tax, and other apown initiative, full banking powers and more to proaches related to institutions that in fact their own thrifts. choose to remain specialized home lenders. For Under the Garn-St Germain Act, the exemp- example, one could explore the approach that if a tion for the unitary savings and loan association thrift institution or thrift holding company mainholding company from the activity restrictions of tains most of its assets in residential mortgages the Savings and Loan Holding Company Act— (including mortgage-backed securities), such an and therefore from restrictions on interstate ac- institution would maintain most of the attributes tivities and commercial ownership—is lost if an of a unitary savings and loan holding company, association fails to qualify for the special bad its current tax status, full access to Federal debt deduction for tax purposes. However, it Home Loan Bank (FHLB) financing, branching may be relatively easy to meet the required asset intra- and interstate, and most service corporatest and at the same time engage in a rather tion powers. It might also be owned by a comdiversified range of banking activities. Our data mercial company so long as the thrift operation show that the overwhelming majority of thrift was fully separated from the commercial interinstitutions do qualify for the special treatment ests and not operated in tandem, and provided it provided by law because they have in fact spe- could exercise no greater powers than presently cialized in home mortgages. However, over time authorized. We would not recommend interlocks competitive opportunities provided by the exist- with full-scale investment banking houses being rule likely will be increasingly utilized. cause of the envisioned exposure to conflicts of The administration bill approaches these im- interest and risk. As a matter of reference, about balances from two directions. The new powers three-quarters of all savings and loans currently provided to bank holding companies would, in have 65 percent or more of their assets in resiimportant respects, match the powers currently dential mortgages and mortgage-backed securiavailable to thrift holding companies; at the same ties, and two-thirds have that percentage in onetime, the special status afforded to unitary thrift to four-family mortgages and related securities. holding companies would, prospectively, be Any test of the requisite degree of "specializaeliminated and the scope of activities of thrift tion" and related regulatory treatment would holding companies and service corporations also have to take account of the particular tradiwould be the same as those of banking organiza- tion of savings banks. tions. These provisions of the Treasury bill On the other hand, a thrift organization that of would not entirely eliminate the differences be- its own volition engaged in more diversified tween thrift and bank organizations; thrifts activities, including sizable amounts of commer- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 765 cial lending and other business relationships, of powers for banking organizations established should presumably have to forgo the special by the Congress. The Board is concerned that provisions of law that are unavailable, as a competition in financial markets, and competimatter of public policy, to banking organizations. tion between states for economic development, We would envision that it would continue to be is in effect producing competition to establish a supervised by the Federal Home Loan Bank lax regulatory framework for banking organiza- Board as proposed in the administration bill. tions without taking account of the national Such an approach, while needing refinement issues at stake, and at the clear risk of underminand closer examination, seems to me in keeping ing prudential standards. with the basic traditions of the thrift industry. Although I regret the need to take a step that would limit the freedom of action of states, it seems plain that the safety and soundness of the FEDERAL-STATE BANKING AUTHORITIES banking system is, in the end, a matter of national interest. The recent tendency of some states to The administration bill does not deal with anoth- act in a manner out of keeping with national er difficult question—the proper scope of author- concerns requires a response. ity of the federal and state governments in regu- Specifically, institutions, whether federally or lating the nonbanking activities of banks. The state chartered, that are full beneficiaries of the problem arises from some recent state actions federal banking safety net should be subject to authorizing vastly enlarged powers for banks and the minimum federal rules established because of their subsidiaries that are inconsistent with the the overriding national interest in safe and sound comprehensive framework established by the banks. What appears necessary is a provision in Congress for regulating the conduct of nonbank the new legislation setting some limits with reactivities by banking organizations. spect to the ability of states to provide authority The conflicting approaches are of recent ori- for a state-chartered institution to pursue activigin. For many years, the parallel systems— ties within such an institution beyond the powers federal regulation of nonbanking activities permitted to depository institutions and their through the Bank Holding Company Act and holding companies under federal law. The moradual state-federal regulation of banking activi- torium bill that the Board has proposed also ties—have worked tolerably well together; they includes such a provision. afforded an element of useful experimentation States, for instance, might experiment, as they and local adaptation so long as basic goals and have in the past, in areas that do not pose approaches were commonly shared. In this con- fundamental questions of safety and soundness text, the Board has facilitated the freedom of and that are largely local in character. Moreover, action for state authorities by adopting a rule that states might be permitted discretion to authorize a bank holding company may conduct through a any banking and nonbanking activities for statesubsidiary any activity that a state bank could chartered institutions or their subsidiaries that perform directly; in practice, state-authorized they deem to be desirable, provided that these powers for banks did not go far beyond those activities may be performed only for customers permitted for nonbank subsidiaries by federal resident in the authorizing state. Such arrangelaw. Our recent survey of the nonbank powers of ments would preserve local initiative, while asbanks under state law indicates that the great suring that interstate commerce was conducted majority of states have remained conservative in within the framework for a safe and sound banktheir authorization of bank powers and have not ing system that the Congress decides is most gone beyond those provided in the Bank Holding appropriate for the country as a whole. Company Act. Now, however, major inconsistencies have arisen between federal and state law because INTERSTATE BANKING some—so far very few—of the states have authorized bank and thrift powers that are actually or The administration bill also does not address potentially in sharp conflict with the framework another major question facing the American fi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

766 Federal Reserve Bulletin • October 1983 nancial system—the appropriate geographic lim- four states permit entry by certain grandfathered its for banking operations. companies. Despite the Douglas Amendment and the These state actions are constructive in break- McFadden Act, we now have, de facto, a large ing down outmoded barriers, but they also drameasure of interstate banking in some product matically illustrate the haphazard and unequal areas. With more than 7,000 interstate offices, development of interstate activity. A closely some large banking organizations today are con- integrated economy requires and deserves more ducting interstate operations through a variety of uniform rules in this important area. It is reasonavenues, including Edge Act subsidiaries, loan able to ask whether rules that prohibit New York production offices, credit card operations, grand- or St. Louis banking organizations from estabfathered holding companies, interstate acquisi- lishing offices across a river, but permit them to tion of failing banks and thrifts, and a number of sell insurance in Arizona, serve a national puractivities "closely related to banking" allowed pose. Similar doubts arise about the logic of under the Bank Holding Company Act—mort- proposals that allow a bank in Providence, Rhode gage banking, personal loan companies, and oth- Island, to purchase a bank two states and 150 ers. And no counting of offices can illustrate the miles away in southern Vermont, but that a bank further penetration of interstate markets for de- 30 miles away, in Albany, New York, be prohibposits and loans made possible by the speed and ited. We also have the anomaly of states welcomeconomy of modern data processing, communi- ing foreign banks within their borders, while cations, and transportation. prohibiting entry of U.S. banks from neighboring But these developments are uneven and hap- states. hazard. In prohibiting brick and mortar presence For want of any better rule to assure gradualacross state lines for an ordinary range of person- ism and to take state preferences into account in al banking services, present law forces banking the evolution of interstate banking, regional comservices to be fragmented, even within many pacts have had an appeal to some as a transitionmetropolitan areas, whether viewed from the al device. We are concerned, however, about the perspective of the banking organization or its implications for a kind of balkanization of the customers. process that could discriminate against banking The end result is that risks may be increased; organizations in some states and, without serving costs are higher than necessary, making competi- a legitimate local purpose, limit the ability of tion less effective from the customer's perspec- banks wishing to sell or merge to find an approtive; and particular banking institutions are rela- priate partner. These concerns are already retively advantaged or disadvantaged. To take one flected in litigation that has been brought by example of obvious anomalies, deposits can be interested parties to challenge the constitutionaland are now brokered across the country, with ity of regional arrangements. I also have, for securities dealers and others acting as intermedi- these reasons, reservations about the legislation aries through a network of local offices. But proposed to provide authority in federal law for banks themselves cannot attract those deposits such arrangements in New England. directly from local offices beyond their own I have another concern about the impact of the state. rules prohibiting interstate banking. There is a It is not surprising that the states themselves natural tendency by those who are shut off from have begun to recognize the anomalies and have their natural avenues of expansion to divert started to relax some of the restrictions allowed entrepreneurial energies into other areas open to by the McFadden Act and Douglas Amendment. them. Undue restrictions on interstate banking in Four states have authorized interstate banking at effect create an artificial incentive for banks to least on a reciprocal basis; three New England enter into nonbanking fields of activity. Over states are authorizing regional, reciprocal entry; time the tendency would be to diminish the four other states have authorized out-of-state relative importance of the bank within a holding entry for some form of limited banking, such as company structure, and management attention credit card or wholesale banking operations; and given the bank, which would ultimately weaken Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 767 the safety and soundness of the banking system with other banking agencies and other groups to itself. that end. At the same time, I recognize the traditional and historic concern about local control of bank- INTEREST ON DEMAND DEPOSITS ing, the importance of healthy community banks, AND RESERVES and the dangers from excessive concentration of resources. Fortunately, we have a good deal of Comments have also been requested on two experience within large states about the ability of additional issues of significance for monetary small banks to survive and prosper alongside policy and competition among financial institurelative giants—and for the good reason that they tions. These issues concern the federal prohibican operate efficiently and establish solid rela- tion against the payment of interest on demand tions with local consumers and businesses. Over deposits and the payment of interest on reserve time, interstate banking would inevitably mean balances held by depository institutions with the fewer banks and larger average size, but properly Federal Reserve System. implemented and controlled I see no danger that As you know, the Depository Institutions the United States would be bereft of large num- Deregulation Committee (DIDC) recently recombers of smaller banks, or that, with appropriate mended that depository institutions be permitted safeguards, excessive concentration would be- to pay interest on demand deposits. In approachcome a problem. ing this question, it should be recognized that There are a variety of possibilities for transi- developments over a number of years have imtional and more permanent arrangements to help portantly undermined both the effectiveness and assure constructive results. For example, inter- rationale of the prohibitions. These developstate banking might, at least initially, be confined ments include (1) implicit interest payments on to establishing separate legal entities in other demand deposits through the provision of cusstates as part of a multibank holding company tomer services without explicit charge or at fees that would have to conform to state branching below cost, (2) legislative and regulatory changes restrictions and to state law and supervision in to permit explicit interest-bearing transaction other respects. accounts for nonbusiness customers that are Similarly, there are a number of steps that can legally distinct from demand deposits, although be taken to prevent excessive concentration of functionally the same, and (3) market developbanking resources, to limit the ability of the ment of close demand deposit substitutes that largest banks to join together, to define the share earn interest, such as money market mutual of resources in a state or area that would be funds. controlled by a single organization, as well as by The cost implications for depository instituother means. tions as a result of authorizing the payment of In sum, a solution that accommodates the interest on demand deposits should be manageforces of technology and competition, while tak- able over time precisely because many transacing account of our public policy objectives of tion balances are already, directly or indirectly, avoiding concentration of resources and main- earning a market rate of return. The material taining a role for the states in regulating banking submitted to the committee by Secretary Regan in their jurisdictions, is necessary. There have on behalf of the DIDC on this point is consistent been numerous studies and recommendations with our analysis. over the years with regard to the proper balanc- The potential adverse earnings impact of intering of federal and state interests in the geographic est-bearing demand deposits could be mitigated scope for banking operations. by requiring the payment of interest on required What is necessary now is to find a consensus reserve balances held with the Federal Reserve on a particular approach. We would be glad to Banks. As a general matter, the Board believes assist your deliberations by providing, in more that the payment of a market-related interest rate specific terms, a variety of approaches to bal- on reserve balances would be desirable in light of ance the various considerations, and by working both equity and monetary policy considerations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

768 Federal Reserve Bulletin • October 1983 Reserve requirements, while imposed for mon- circumstances in which it could be viewed as a etary policy purposes, also, from the viewpoint transitional step toward payment of interest on of the depository institution, represent a form of demand deposits and related reserve balances. tax that falls unevenly across institutions provid- Other things equal, paying interest on reserve ing comparable services. Interest on required balances generally would involve a drain on reserves would remove this competitive distor- Treasury revenues. Thus, while the Board, as a tion. In addition, such payments would work to matter of principle, favors payment of interest on discourage the incentives toward the develop- all reserve balances, the question remains of an ment of transaction-type accounts outside the appropriate phase-in. This is, of course, inevitadepository system, thus protecting the ability of bly related to the present budgetary position, but the Federal Reserve to carry out monetary policy we do not believe that, over time, reserve reefficiently over time and tending to maintain the quirements should be looked upon as a revenue payments system within the basic framework of measure. If banks and other depository instituregulated depository institutions and the federal tions are to be specially taxed, such a decision safety net. should be made explicitly on grounds other than At the same time, payment of explicit interest as a by-product of the role of reserve requireon demand deposits and reserve balances should ments as an instrument of monetary policy. be consistent with general considerations of effi- Payment of interest only on reserves against ciency in the allocation of economic resources Super NOW accounts and nonpersonal MMDAs, and effective competition. Consequently, the at present interest rates, is estimated to entail a Board supports action along these lines. net revenue loss of $125 million a year initially, More specifically, bills have been introduced and the figure would rise over time as deregulawith the intent of requiring interest to be paid on tion proceeds and these deposit forms become a limited fraction of required reserves—those more important. held against money market deposit accounts We believe that such a decision should imply a (MMDAs) and Super NOW accounts—accounts transition toward payment of interest on reserves upon which depository institutions now pay mar- more generally to avoid distortions among variket rates of interest. (Most MMDAs—those not ous types of transaction accounts. In that case, held by businesses—have no reserve require- the costs would be substantially larger. ment.) Paying interest on reserve balances held Finally, I would like to address a related point against Super NOW accounts would remove one and remind the committee of the long-standing cost for depository institutions not borne by Board view that authority should be provided to money market funds or other providers of a apply reserve requirements to institutions that similar service and then tend to further equalize are not formally depository institutions (and thus competitive opportunities. For a period of time, are not covered by the prudential rules applicainterpretation of the monetary aggregates, partic- ble to these institutions and their holding compaularly Ml, could be further complicated by caus- nies) but that do offer transaction accounts simiing savings funds now held in MMDAs or other lar to those offered by banks. As long as these forms to shift into Super NOW accounts, which close substitutes for bank deposits are free from is a component of Ml. With interest paid on reserve requirements, they have a potential comreserve balances, depositors would be able to petitive advantage relative to bank deposits and, receive as good a yield on Super NOW accounts at times, they can complicate the task of conas on MMDAs (taking into account service ducting monetary policy. charges) and the former would also have the In an environment in which Regulation Q capacity for unlimited transfers by check. (Po- ceilings on deposits have been largely eliminattential shifts of this kind could, of course, also be ed, such problems may not be as acute as they large if market interest rates are to be permitted were in the 1981-82 period. Payment of interest on demand deposits.) However, that adverse on reserves would, as indicated, remove a reeffect is not, in our judgment, a compelling maining source of competitive distortion. At the reason not to adopt the proposal, particularly in same time, however, the process of financial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 769 innovation could well produce still other instru- tions that have transaction or third-party payments that will present new problems. ment powers would be subject to reserve re- Thus, the Board believes it would be prudent quirements. The Board would not expect to use to incorporate into the bill a provision whereby this authority unless conditions arose to demonfinancial instruments issued by nonbank institu- strate its necessity. • Statement by Preston Martin, Vice Chairman, Mae and Freddie Mac, and their present strong Board of Governors of the Federal Reserve Sys- leadership. The ability of both of these organizatem, before the Subcommittee on Housing and tions to finance at rates not far from those of Urban Affairs of the Committee on Banking, Treasury securities of comparable maturity ex- Housing, and Urban Affairs, U.S. Senate, Sep- emplifies the size, presence, and position they tember 22, 1983. have attained in the capital markets. I am confident that both organizations would continue to I appreciate the opportunity to present my per- compete effectively with stronger private rivals. sonal views on the general thrust of S. 1821 and The conventional mortgage-backed security S. 1822, bills that are designed to widen and has proved its worth in the credit markets, even deepen the secondary mortgage market of this during the most recent recession that saw severenation. The committee knows the importance of ly depressed housing conditions and falling enhancing the growth of this already enormous house prices in some submarkets. Mortgage source of funding for housing. Fundamental in- pools of high quality have been found repeatedly volvement in housing finance has been, on bal- and recently to be safe investments, and these ance, a successful public policy spanning five securities have involved credit-risk insurance decades or more. I believe an important aspect of and other arrangements to protect investors and that success has been heavy reliance on private maintain cash flow. It seems to me that the institutions and market processes. Permit me to record supports the objectives and thrust of the admit my pride in my own involvement in the legislation, which is the subject of this hearing. Federal Home Loan Bank System's expansion of The growth of secondary mortgage market its credit facilities in the 1970s as well as the part activity, of course, has been very substantial I played in the founding and initial operating since the late 1960s. Furthermore, the need for policies of the Federal Home Loan Mortgage secondary market channels is likely to increase Corporation, with Chairman Thomas Bomar. in the future, to the extent that some thrift The very success of public policy in the utiliza- institutions utilize the expanded asset powers tion of market processes to further homeowner- recently provided to them by law and regulation. ship and residential financing provides the plat- To better match the duration and interest rate form from which private market initiatives can sensitivity of assets with liabilities, some thrifts and should now be launched. Thirteen years ago and other mortgage originators may move more my associates and I came before this committee and more mortgages to investors through the to advocate the establishment of a secondary secondary markets. Of course, another construcmarket facility for conventional mortgage loans. tive option open to them in this regard would be Our plea then to Chairman Sparkman, Senator to promote and invest in more variable-rate Proxmire, and others was to obtain authority to mortgage instruments. demonstrate the feasibility of the conventional Pass-through securities are relatively new and mortgage-backed security, but we predicted at effective secondary market vehicles that attract a that time that the private market eventually wide variety of capital market investors into could and would take over the function. I believe mortgage instruments. Since the early 1970s, the the time has now arrived for that transfer to be thrust of public policy has been to encourage stimulated, while at the same time recognizing development and growth of markets for securithe outstanding accomplishments of both Fannie ties guaranteed by federal agencies and federally Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

770 Federal Reserve Bulletin • October 1983 sponsored enterprises. By the middle of this vate mortgage-related securities in the convenyear, pass-throughs guaranteed by the Govern- tional mortgage market and in the nation's capiment National Mortgage Association (GNMA), tal markets. As a general principle, I am fully in the Federal Home Loan Mortgage Corporation favor of improving the efficiency of private finan- (FHLMC), or the Federal National Mortgage cial markets and reducing reliance on the govern- Association (FNMA) totaled $211 billion- ment's presence in the credit system, as long as equivalent to a sixth of all residential mortgage these objectives can be achieved without seridebt outstanding. GNMA securities, issued ex- ously compromising other legitimate social and clusively against pools of federally insured or economic goals. As these hearings have amply guaranteed mortgages, account for two-thirds of demonstrated, difficult questions concerning the all federally guaranteed pass-throughs outstand- proper balance of public policy and tradeoffs of ing. But the volume of FHLMC and FNMA competing objectives inevitably arise in this consecurities, issued primarily against pools of con- text. ventional loans, has been expanding very rapidly I will concentrate the balance of my remarks since late 1981. The managements of those enti- on two topics. First, the types of legal and ties have helped to fill a mortgage credit gap regulatory adjustments appropriate to bolster during a critical financial adjustment period. development of the private securities markets— By contrast, development of markets for fully the major focus of the legislation you have introprivate mortgage pass-through securities—that duced. Second, possible government policy tois, securities without federal sponsorship issued ward the federally sponsored secondary mortagainst pools of conventional loans—has been gage market enterprises. In the latter area, my quite modest. While a fair number of banks, comments necessarily will be broad and suggesthrift institutions, mortgage companies, insur- tive since no specific legislative proposals are ance companies, and so-called conduit organiza- extant. tions have issued private pass-throughs, available estimates suggest that the total amount outstanding is less than $10 billion. PRIVATE MORTGAGE-RELATED SECURITIES In my judgment, it would be sound public policy to change laws and regulations, when Laws and regulations that have unfairly disadappropriate, to encourage a broadening of the vantaged the competitive position of private secondary mortgage market through more exten- mortgage securities in our financial markets do sive involvement of the private sector. The Presi- not constitute good public policy, and should be dent's Commission on Housing, on which I modified. In this regard, I am talking about served as a member before being appointed to inadvertent, or unintended, constraints and obthe Federal Reserve Board, identified a host of stacles for the issuer of private securities. At the legal and regulatory impediments to develop- Housing Commission, we determined that there ment of the private mortgage securities markets have been a number of such constraints, somein its 1982 report. As you noted when introducing times caused by state or federal laws or regula- S. 1821 and S. 1822, components of these legisla- tions written long before mortgage-related secutive proposals attempt to crystalize Housing rities were a significant market factor, or arising Commission recommendations for encourage- because of inadequate understanding by lawmakment of private securities as well as to formalize ers or regulators of the nature of mortgage secuthe "TIMs" proposal that grew out of the Com- rities. mission's work. Some of these constraints recently have been As you also noted when introducing this legis- alleviated by regulatory changes at the federal lation, a comprehensive look at both private and level, in line with Housing Commission recompublic secondary market institutions is in order. mendations. For example, the Securities and It is obvious that federal policy toward the two Exchange Commission (SEC) has tailored some sponsored enterprises, FNMA and FHLMC, will of its registration requirements to the special help determine the competitive position of pri- characteristics of both the private mortgage pass- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 771 through securities and the issuers of these types would hate to see isolated problems in the future of securities. At the Federal Reserve Board, we undermine development of the private mortgage have amended Regulation T—which governs securities market. margin credit extended by brokers and dealers The provision of S. 1821 that would involve for the purpose of purchasing or carrying securi- federal preemption of state blue-sky and legalties—to specify that private mortgage-backed investment laws and regulations for all investsecurities are eligible collateral for such credit. ment-grade, mortgage-related securities, subject We also have tailored the Regulation T criterion to reversal by the states within two years, raises concerning marketability of securities in margin further questions about investor protection as accounts to fit special features of the mortgage well as the interests of savers in state-chartered instruments. depository institutions, life insurance compa- Some components of Title I of S. 1821 also nies, and pension funds. As I understand the constitute technical amendments designed to ac- term, "investment grade" is not a particularly commodate properly private mortgage securi- strict standard, and commonly is interpreted to ties. I am referring to such things as the removal cover the top four categories used by the nationof statutory limitations on investment in mort- ally recognized rating firms—extending down to gage-related securities by federally chartered fi- BBB under Standard and Poor's designations. nancial institutions, leaving it up to the regula- Most public offerings of private mortgage passtors to specify investment limits as well as through securities, in fact, have been rated in the factors relating to the diversity of underlying top two categories, and it may be questionable mortgage pools. The law for national banks, in public policy to require the states to treat all effect, currently treats mortgage pass-through investment grade issues as if they were Treasury securities as obligations of the issuer or sponsor or agency securities. rather than as shares in pools of loans constitut- On a subject closer to the Federal Reserve, I ing the obligations of mortgage borrowers. The would like to raise some questions about the current treatment is a good example of law that provision that would grant authority for national does not recognize the true nature of mortgage banks to underwrite and deal in private mortpass-through securities. gage-related securities. The Federal Reserve has Some components of Title I of S. 1821 obvi- been concerned that underwriting private securiously go beyond the types of technical adjust- ties, particularly corporate bonds, could involve ment to law and regulation 1 have been discuss- unusual elements of risk for banks and possibly ing and may involve some tradeoffs of policy could lead to conflicts of interest in the provision objectives that need to be considered carefully. of credit. Though equivalent risks presumably Caution should be exercised whenever federal or would not arise in the pass-through securities state laws or regulations, designed to protect markets—banks already have the authority to savers, investors, or financial institutions, are underwrite issues guaranteed by GNMA, FNMA, amended or preempted in order to accommodate and FHLMC—it is an area that should receive the development of a particular market. some consideration in this legislative process. It appears that investor protection conceivably Concerning S. 1822, a bill that would establish could be compromised, for example, if the SEC a new type of mortgage investment trust under exemption from registration currently available the tax code, I can enthusiastically support the to financial institutions supervised and examined effort to create more flexible trust devices that by state or federal regulators were extended to would retain the flow-through federal income tax any mortgagee approved by the Department of features critical to pass-through securities mar- Housing and Urban Development. The integrity kets. The Housing Commission had discussed of today's mortgage banking industry is not in the need for new types of trust devices for question. But mortgage bankers basically are issuers of mortgage-related securities, as alternaunregulated institutions, and consideration tives to the so-called "grantor trust" currently should be given to ways to set and monitor used for virtually all pass-through issues. As I quality standards for mortgages "pooled." I see it, the major objectives of the effort to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

772 Federal Reserve Bulletin • October 1983 establish new trust devices should be to permit FEDERALLY SPONSORED CREDIT AGENCIES issuance of different classes of securities against a mortgage pool and to allow some degree of The federally sponsored secondary market entermanagement of assets and cash flows by the prises certainly have performed important functrustee. Such features could be used to tailor tions quite well, introducing new types of secissues to the maturity and cash-flow preferences ondary market instruments and developing of different types of investors and could result in channels between conventional mortgage bormore advantageous pricing of pool securities— rowers and a wide range of capital market investhus leading to lower mortgage rates for consum- tors. A little over a decade ago, such channels ers. Thrift institution issuers, for example, would were virtually nonexistent and, as you know, I have the opportunity to market the longer-term was directly involved in the establishment of classes and retain the shorter-term securities, FHLMC as a secondary market facility for conaiding their adjustment of liabilities and assets ventional mortgages. Both FNMA and FHLMC into a better maturity balance. have done pathbreaking work by helping to stan- I am not prepared at this time to testify on the dardize the conventional home mortgage instrumany technical aspects in S. 1822. One thing ment and by moving large amounts of passmissing in that bill, however, is reference either through securities issued against pools of such to quality standards for the TIM securities or to loans into a capital market unaccustomed to supervision of the trustees or managers of TIMs. conventional pass-throughs. At the Housing Commission, we considered the We have now reached a point at which conneed for minimum quality criteria for new types ventional mortgage documents are standardized of mortgage trust vehicles, in order to promote nationally, mortgage pass-through securities are standardization in the private securities market a familiar instrument in national financial marand to obtain favorable treatment of securities by kets, and the private mortgage insurance industhe Department of Labor (for private pension try is capable of providing mortgage pool insurfunds) and possibly by state regulators (for fidu- ance necessary to secure high ratings for a large ciaries under their jurisdiction). I am concerned volume of conventional pass-throughs. Should that creation of new types of mortgage invest- we, therefore, conclude that the federally sponment trusts, which apparently could take a va- sored secondary market agencies have completriety of forms (corporate or otherwise) under ed their job? Is it time to remove whatever legal S. 1822, and which would permit trustees to and regulatory elements have been impeding actively manage the funds entrusted to them by development of the private market—the intent of individual investors, would create leeway for bad S. 1821 and S. 1822—and at the same time sever reinvestment decisions or even for abusive prac- the federal connections of FNMA and FHLMC? tices by trustees or managers. Such events, of As a general principle, it seems obvious to me course, could heavily damage all elements of the that the use of federal enterprise status, and the market for private mortgage pass-through securi- special advantages that go with this status, ties. should be reserved for those activities that are It is difficult to specify, at this time, the type of not, or cannot be, performed adequately by the supervisory structure within which TIMs ideally private sector. It may be possible for the private should operate. One possibility would be to sector to develop a large and efficient market for require that TIMs be subject to the types of mortgage-related securities that would provide controls established for mutual funds registered mortgage borrowers ready access to funds in the under the Investment Company Act of 1940— broad capital market structure at competitive other entities with flow-through tax treatment prices—your legislative proposals are aimed in under the Internal Revenue Code. Another pos- this direction. But as a former issuer of private sibility would be to involve federal agencies with mortgage-backed securities, it is not clear to me considerable expertise in housing finance, such that fully private securities will be able to comas the Federal Home Loan Bank Board, in the pete successfully, head to head, with federally supervisory process. guaranteed instruments, even if the legislative Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 773 package you have introduced should become connections unless the sponsored enterprises law. To date, private securities have been suc- could function effectively on their own. The cessful mainly in the market space left by FNMA Federal Home Loan Mortgage Corporation curand FHLMC. Most issues have been private rently is in a healthy financial condition. But placements tailored to individual investors or more difficult transition issues would be raised public offerings issued against pools of loans with the Federal National Mortgage Association larger than those that can be purchased by the because of its large portfolio of mortgages having federally sponsored enterprises. interest rates below current market levels. Although it is possible to argue for a phase- As a final point, I would like to remind the down of the federal connections of FNMA and subcommittee that housing finance is likely to be FHLMC—in concert with development of viable the first casualty in any future "crowding out" of private sector alternatives—it should also be private financing occasioned by the huge strucrecognized that the federally sponsored enter- tural federal deficits that are on the horizon. It prises can provide some public benefits that would be unfortunate, indeed, if this problem cannot be provided by private alternatives. In were compounded by inefficient market mechaparticular, these enterprises are in a position to nisms. As pointed out in The Report of the funnel the benefits of their federal connections to President's Commission on Housing: mortgage borrowers. Thus, one policy option is to ensure that the benefits accrue to borrowers Since the mid-1960s, the ability of the housing most in need of aid, as identified through the finance system to meet the needs of borrowers has political process. This approach would seek to deteriorated markedly on several occasions, and this target the mortgage securities programs of system currently is in a serious state of disrepair. The volume of residential mortgage lending naturally re- FNMA and FHLMC, in terms of criteria such as flects changes in financial market conditions because maximum loan size or borrower income. the sensitivity of demand for mortgage credit to If the Congress decides that privatization of changes in interest rates is high relative to interest rate one or both of the sponsored enterprises is the sensitivity in other major sectors of the economy. However, the increasingly wide swings in residential appropriate policy objective over the long term, mortgage and housing construction activity also are some transition problems will have to be faced. traceable to structural shortcomings in the housing For one thing, the rights of holders of outstand- finance system.1 • ing stock, debt, and guaranteed pass-through securities would have to be protected. And, of 1. The Report of the President's Commission on Housing course, it would be unwise to sever federal (Government Printing Office, 1982), p. 116. Statement by Preston Martin, Vice Chairman, requires disclosure of an institution's policy re- Board of Governors of the Federal Reserve Sys- garding delayed availability, calculation of intertem, before the Subcommittee on Consumer est from the time the institution receives provi- Affairs of the Committee on Banking, Housing, sional credit for a check deposited into an and Urban Affairs, U.S. Senate, September 28, interest-bearing account, use of standard en- 1983. dorsement procedures, and prompt notification of a decision not to pay because of insufficient I am pleased to appear before this subcommittee funds or other reasons. to present the views of the Federal Reserve Although the Board's surveys of consumers Board on S. 573—the "Fair Deposit Availability and the recording of consumer complaints do not Act of 1983." This bill addresses the practice of indicate that a majority of consumers have fredepository institutions prohibiting a depositor quent problems with delayed availability, our from withdrawing, for some period, funds repre- information does not indicate that the problems sented by a newly deposited check. This is often are in any way trivial. The problems caused by referred to as "delayed availability." The bill delayed availability range from minor inconve- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

774 Federal Reserve Bulletin • October 1983 nience, to service charges for checks written In conjunction with our responsibilities under before deposits are deemed "good," to hard- the Monetary Control Act, the Federal Reserve ships caused by the depositor's inability to use has made a number of operational changes in our needed funds. Two states, New York and Cali- check collection operations, several of which fornia, have already passed legislation on the offer the promise of accelerating collection. subject. These laws, which go further than These include improving our transportation sys- S. 573, not only require the disclosure of "hold" tem to speed the physical movement of checks policies, but also direct state officials to estab- and establishing later hours during which institulish, by regulation, what constitutes reasonable tions can deposit checks for collection and for us delays under different circumstances. to present them for payment. We have also I have changed residence enough to under- proposed a program to accelerate collection of stand the concerns that have been expressed checks drawn on institutions with high dollar about certain delayed funds availability policies, volume located in cities remote from a Federal and am sympathetic to the problems that custom- Reserve check processing office. This proposal ers, particularly new depositors, can experience. would prevent the delays in collection arising As I see it, there are two situations giving rise to from shifts in check clearing volume away from problems—those instances in which the practice institutions located in cities with a Federal Reis not disclosed in advance, and those times serve check processing office. Although it is our when an institution's policy can be construed as belief that these new procedures can greatly beneso inflexible or unreasonable that it imposes an fit the efficiency of checks as a payments mechaundue hardship on its customers. nism, it is too early to tell the extent to which In considering the question of delayed funds these changes will positively affect industry pracavailability, it is important, however, to recog- tices in regard to delayed funds availability. nize that the practice in some form is inherent Though I believe there is some justification for within the structure of our check payment sys- some of the practice of delayed availability, I tem. Since the passage of the Monetary Control also believe that a need exists for financial indus- Act of 1980 there has been considerable impetus try action and for additional operational imwithin the financial industry to arrive at greater provements, which could alleviate much of the efficiency in the collection of checks. Notwith- problem. Specifically, I am encouraged by a standing this progress, it still takes up to two recent call by industry groups, such as the Amerdays for an institution to receive provisional ican Bankers Association, for voluntary action credit for a check. In addition to this delay, it on the delayed funds issue by their members. may take several days longer for a check that is The president of the ABA has written all member not honored by the paying institution to be banks urging a written policy concerning delayed returned. Without going into the details of that funds availability and disclosure of that policy to system, which are outlined in attachment A, customers. In addition, the ABA has provided these delays give rise to the argument that insti- institutions with a model policy and disclosure tutions are exposed to risk of loss in releasing form. funds before allowing for the time for an unpaid As an example of possible additional operacheck to be returned.1 As long as the payments tional improvements now being pursued, we are system involves the movement of paper checks pleased with the early results of a pilot program from one point to another, there will be delays in of the Dallas Federal Reserve Bank with regard the check collection process that may justify an to processing returned checks. This pilot proinstitution delaying availability of funds to some gram will help to determine the feasibility of depositors on some items to protect against such establishing a nationwide service for the direct risks. return of unpaid checks to the institution of first deposit, thereby shortening the chain of institutions in the return process and accelerating funds 1. The attachments to this statement are available on re- availability. A nationwide system for prompt quest from Publications Services, Board of Governors of the return of checks would provide a framework for Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 775 institutions to provide faster funds availability to are, in fact, disclosing their policies. The infortheir customers. mation from these surveys will be valuable in determining whether the banking industry has responded to the challenge of voluntarily dealing DISCLOSURE with the issue and whether disclosures, if made, result in an improvement in consumer awareness. There are two reasons for promoting greater Of course, the problem of delayed funds is not disclosure of funds availability policies. The first limited to commercial banks. It involves all types is simply the fairness of alerting the public to of institutions, including credit unions, savings practices that may affect it adversely. The sec- banks, savings and loan associations, and money ond is the impact that disclosure can have on the market mutual funds. The effectiveness of a practice itself. As institution management for- voluntary disclosure program will ultimately demalizes its policies and prepares disclosures, it is pend on the willingness of other industry groups likely to reexamine the necessity and reasonable- and associations to encourage their members ness of existing practices. also to make voluntary disclosures. It would be Of course, the reasonableness of a particular our hope and it has been our advice to the institution's policy with respect to delaying avail- industry that they pursue their efforts with all ability is difficult to determine. Many factors go due speed. If successful, these efforts will be the into an institution's or a bank employee's deci- most effective answer for customers in allowing sion to delay availability and the length of the them to determine whether their institution's delay. Some institutions with short or no delays policies are reasonable and, if not, allowing them compensate for their risk of loss through in- to take action to avoid problems. creased service charges. Some institutions may establish blanket hold policies for certain categories of checks as the most operationally efficient FEDERAL RESERVE PROGRAM hold policy. Other institutions may place holds on an individual basis, a more costly, but also The Federal Reserve Bank of Dallas is currently generally a more equitable, procedure. Whether conducting a pilot program to test the feasibility or not an institution's policy can be considered of the Federal Reserve System returning a disreasonable is best left up to its customers and to honored check directly to the bank of first deposthe discipline of the marketplace. But this re- it rather than back through each step in the initial quires that customers be informed about their collection route. This program includes having institution's policy. Without disclosure by man- the Federal Reserve provide wire notice to the agement, customers will not be able to judge the last endorsing institution of nonpayment of reasonableness of policies, and competition in checks in the amount of $2,500 or more during the marketplace will not have an impact on the the first phase of the pilot, and in a later phase decisions of individual institutions. directly to the institution of first deposit. Direct In contemplation of the recent action by the returns could provide the framework for enabling ABA, and in order to provide a benchmark for depository institutions to provide faster availmeasuring the effectiveness of this effort, the ability to their customers. Board conducted a survey of consumers in The Dallas project is, however, currently limit- March of this year to determine the level of ed to providing direct return of certain checks consumer awareness of their institution's policy originally collected through the Dallas Reserve and the incidence of consumer problems with Bank to certain banks in the Dallas Federal delayed availability. We plan to conduct a similar Reserve District and there may be operational survey next year to measure any increase in and legal obstacles to expanding the pilot proawareness as a result of the ABA's suggestion. gram further. For example, five states and the In addition, we are considering conducting a District of Columbia do not permit the direct survey of financial institutions sometime next return of checks. The Federal Reserve is conyear to determine the number of institutions that tacting the appropriate officials in those states to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

776 Federal Reserve Bulletin • October 1983 explore the possibility of stimulating changes in involved in efforts to accomplish this, and we their laws to permit direct returns. If the results think the voluntary industry action should be of the Dallas pilot program demonstrate that given a chance to work. We know from experidirect returns will enhance payments mechanism ence that disclosure laws are easy to conceptualefficiency and these state laws continue to be an ize, but far more difficult to implement; and, to obstacle, federal legislation could be appropriate the extent laws like this may impose unnecessary to enable direct returns to be implemented on a costs by forcing industry activity into a few nationwide basis. approved formats, the customer may ultimately Even if a nationwide system of direct returns be the loser. can successfully be implemented, it is still some- In the next year we will be gaining additional what unclear whether such a system would auto- experience with our pilot project to speed up the matically result in better availability for the insti- return item processing, and will be in a better tution's customers. For example, if a direct position to gauge the extent to which this proreturn approach is to be effective in providing a gram may ultimately reduce the delayed funds framework for improved funds availability, it problem. Perhaps a federal disclosure law will may have to be universal. That is, even though ultimately be necessary, but given the industry's some or even most returned checks are sent back recent first step toward self-correction of the directly and quickly, if others are not, the institu- problem and this pilot program, until an assesstion of first deposit will not know in advance ment can be made of their effectiveness, we which items will be returned directly and which suggest that the Congress defer adopting formal will be returned by the present indirect, time- legislation. consuming manner. As a result, institutions may The delayed funds problem should diminish as be reluctant to provide the earlier availability customers become more familiar with alternative that the direct return concept may facilitate. forms of payments other than checks. Many Because of this potential problem, an incentive payments, especially those that recur regularly may need to be established for institutions to use such as salary, dividends, and Social Security, the direct return system or some method institut- can be received through automated clearinged to minimize the risk of loss to the institution of houses, and others can be handled as wire transfirst deposit. Although many of the issues of fers. We believe that electronic payments repreoperational and practical feasibility of direct re- sent a more efficient, faster, and more reliable turns are still unknown, the Dallas pilot program means of payment than paper transfers. We just should provide a great deal of information that published for comment several proposed enwill be useful in providing answers to questions hancements to the automated clearinghouse seron delayed funds availability. vice and are inviting the public to comment on how we can improve this service further. In essence, electronic payments are the only real CONCLUSION solution to the problem of delayed availability. The Federal Reserve continues to be commit- In conclusion, the Board is very sympathetic to ted—as it has been in the past—to promoting the the need for disclosures by institutions to their efficiency of the nation's payments mechanism customers. However, the industry is currently through the development of electronic payments. Statement by Henry C. Wallich, Member, Board It is my pleasure to appear before this subcomof Governors of the Federal Reserve System, mittee to discuss the problems of the strong before the Subcommittee on Domestic Monetary dollar. Policy of the Committee on Banking, Finance The strength of the dollar over the past three and Urban Affairs, U.S. House of Representa- years has been truly impressive. The dollar aptives, October 5, 1983. preciated 46 percent from the fourth quarter of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 36 1980 to September 1983 against a weighted aver- has been a broad association of the real interest age of the currencies of the other major industrial differential between dollar and foreign currency countries. Against the German mark the appreci- assets and the dollar's real exchange value over ation amounted to 40 percent; against the yen, 13 the floating-rate period.1 (I should note that any percent; against sterling, 59 percent; and against measurement of real interest rates is necessarily the French franc, 83 percent. only an approximation because the concept of After making allowance for inflation differen- real interest rates involves expectations of future tials, the rise is somewhat smaller, because infla- inflation, which cannot be measured directly.) tion in the United States over this period was less The real interest differential moved from nearthan that abroad. But even on an inflation- ly 1 percent against the dollar in October 1980 to adjusted ("real") basis, the dollar's appreciation more than 4 percent in favor of the dollar in was still a very substantial 40 percent. Its real August 1983. Unless such a shift were offset by a value is currently some 27 percent above its shift in exchange rate expectations, it would average value over the entire floating-rate period result in an attempt by asset holders to reallocate since March 1973. This type of calculation is their existing portfolios toward dollar assets and sometimes used to measure the degree of "over- away from foreign currency assets. Similarly, valuation" of the dollar on the grounds of current new world savings would be allocated more purchasing power parity. Of course, a different toward dollar investments. base period would lead to a different degree of It seems quite plausible that a large shift in real overvaluation. interest differentials in favor of the dollar should How, then, do we explain this extraordinary result in a large appreciation of the dollar. And it strength of the dollar? There does not appear to is quite plausible that the present high level of be any single, simple explanation. Broadly real interest rates in the United States, and thus speaking, the economic factors that influence the high interest rate differential, is mainly due to exchange rates can be grouped under three cate- massive budget deficits (actual and expected) in gories: (1) inflation, (2) interest rates and rates of the United States. return, and (3) current account deficits and sur- There may be a contributing factor tending to pluses. push up U.S. real interest rates, namely, an High inflation works against a currency, and increase in the prospective profitability of real probably much more forcefully than in propor- investment in the United States. There are some tion to changes in relative purchasing power. By indications that this may have occurred. Changes the same token, the sharp drop in inflation and in tax laws have helped to raise the return on inflation expectations that has occurred in the capital. The discounted value of future profits of United States can be assumed to have contribut- U.S. corporations, as represented in stock prices ed substantially to the strength of the dollar. The (Standard & Poor's index of 425 industrials) has extent to which this has occurred is not measur- surged some 60 percent since August 1982. Inable, but I do not doubt that an important change deed, over the past year or so the profit outlook, has occurred in international perceptions of the reflected in relative movements of stock and dollar as an asset worth holding. bond prices, appears to have improved more in As regards interest rate differentials, distin- the United States than in any other industrial guishing between nominal and real interest rates country, with the exception of Canada. Other is important. Using real rates implies making evidence lending support to the increased profitallowance, as already noted, for the effect of ability of real investment in the United States is inflation on the relative purchasing power of the reported increase of one-third in profits from currencies. To the extent that currencies are current production (economic profits) in the expected to move in proportion to purchasing gross national product accounts from the fourth power changes, it is real interest rates, which already embody these expectations, that are relevant to analyzing exchange rate movements. As 1. The attachments to this statement are available on request from Publications Services, Board of Governors of the the chart attached to my statement shows, there Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

778 Federal Reserve Bulletin • October 1983 quarter of 1982 to the second quarter of this year. of today, of further widening of the current And business fixed investment is significantly account deficit. So long as investor demand for higher in this recovery than had been predicted, net dollar assets at existing exchange rates congiven the level of real interest rates and the tinues to be strong, the negative effect of the degree of capacity utilization. This profit picture current account may be offset. The key question stands against the background of the decline in then is, when are those factors that have led to profitability from the late 1960s through the such a great demand for dollar assets—real inter- 1970s. est differentials, political uncertainties, and the This apparent increase in the profitability of international debt situation—going to change? I real investment may reflect the effects of new am afraid that I do not possess any special technology, for example, the computer revolu- powers of prognostication on these points. Cleartion, in which the United States leads. I believe ly, action by the Congress and the administration that the apparent increase in profitability also significantly to reduce the budget deficit could reflects the beneficial effects, despite the painful have a substantial impact on real interest rates, transition, of moving from high inflation to low and a decline in these rates would be widely inflation. In any event, it appears plausible that expected to contribute to a depreciation of the foreigners should demand the currency of a dollar. In a similar vein, the assurance of adecountry with increased profitability of real in- quate availability of official financing to those vestment. This is not to downplay, however, the developing countries willing to pursue responsirole of U.S. budget deficits in raising real U.S. ble adjustment policies might also tend to reduce interest rates. In my view the deficits are by far the demand for dollars and thus mitigate upward the main factor. pressures on our currency. Recent current account developments seem to The subcommittee has asked me to address the have played little role in the behavior of the question of the impact of the dollar's appreciadollar. The current account was only in small tion on various aspects of the domestic econosurplus in 1980-81 and has deteriorated sharply my. In this connection, it is important to bear in since mid-1982. The factors of strength in the mind that, given the major determinants of exexchange rate picture seem to have predominat- change rates mentioned above, changes in rates ed over this factor of weakness. are likely to be responses to changes in those There are also more special reasons for the determinants, which, in turn, respond to a variedollar's strength over the past three years, how- ty of events. These responses feed through the ever. The presence of actual and threatened economic system via various channels, some of political instability in many parts of the world, which, such as exchange rates and interest rates, both in industrial and developing countries, has can change very quickly, which then affects undoubtedly been a significant factor in foreign other economic variables that change more slowdemand for dollars. And the United States is the ly, such as GNP, employment, and the general "preferred habitat" of flight capital from Latin price level. America. A final factor that should be mentioned The Board staff has simulated the impact on is the international debt problem, which also, at the domestic economy of the appreciation of the least initially, tended to strengthen the dollar. dollar. Let me stress that these estimates should Given the presence of conflicting forces, pre- be treated with great caution. First, they are dicting the future exchange value of the dollar is necessarily dependent upon the particular model bound to be a hazardous undertaking. Some being employed. Second, they represent only the observers have thought that the dollar would effects of an assumed exogenous appreciation of decline with the development this year of mas- the dollar, not the full effects of any policy sive U.S. balance of payments deficits on current change, such as tax cuts, that may have led to account, especially since the 1984 deficit is ex- this appreciation. The overall effect of the tax pected to be even greater. Certainly these defi- cuts on GNP and employment, for example, may cits would tend to cause the dollar to depreciate. well have been positive, even after allowing for But the exchange market, so far, has shrugged any negative effects of the dollar appreciation. off the already large decline and the prospects, as The Board staff estimates that the effect of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 779 dollar's real appreciation since the fourth quarter rates. Probably the most desirable policy action of 1980, which was near the low point for the that could be taken, therefore, would be a sharp dollar, has led, by mid-1983, to a fall of 14 reduction in the budget deficit. This policy action percent in the volume of U.S. merchandise ex- would tend to reduce real interest rates, which in ports and a rise of 15 percent in the volume of turn would tend to reduce the dollar's exchange merchandise imports. In nominal terms, the ef- value, improve the current account, and increase fects were a decline of $50 billion (annual rate) in investment. This action on the budget therefore exports and a decline of $10 billion in the value of would have beneficial results in many directions U.S. imports, with decreases in the dollar prices quite aside from the exchange market, including of imports more than offsetting volume in- reducing inflation and expectations of inflation. creases. The effects of the dollar's appreciation Other means of seeking to influence the exare still working themselves out, and it is esti- change rate are questionable. Intervention in the mated that the full effect on the trade balance will exchange market, if sterilized, as U.S. intervenreach about $50 billion (annual rate) by 1985. tion routinely is, would have only limited effects, These estimates take into account the stimulative unless undertaken on an enormous scale. This effect of the dollar's appreciation on income and was the conclusion I drew from the report of the prices abroad, as well as the opposite impact at Working Group on Exchange Market Intervenhome. tion. There have, in fact, been significant net In these estimates, the effect on the U.S. intervention sales by foreign central banks, consumer price level by mid-1983 is to lower it amounting to $80 billion over the past three about 4'/ percent below the level it would other- years. Intervention involving sales of dollars that 2 wise have reached—reducing the inflation rate was not sterilized would imply a change in our about IV2 percent per year over this period. The monetary policy in an inflationary direction. levels of real GNP and employment are estimat- Clearly it would be highly undesirable to seek to ed to be lower by 1 percent and by 1 million depress the dollar by regenerating inflationary respectively at mid-1983, but these effects are expectations. transitory and would be completely reversed by As you know, the United States has interearly 1985. The latter occurs because the initial vened in only a minimal fashion since March negative impact on GNP and the price level 1981. We have basically sought to counter only induces a decline in interest rates that stimulates the most severe instances of short-run disorder business investment and housing expenditure. in exchange markets. Some have suggested inter- When these effects have fully run their course, vention on a somewhat greater scale. The Federthen, the level of GNP and total employment al Reserve would not object to this in certain would show little net change, but employment in circumstances, but we would not ordinarily exthe traded goods sector would be lower by about pect the results on the dollar's exchange value to 2 million and higher by the same amount in the be large or long-lasting, in the absence of other nontraded sector, which is largely services. That more fundamental policy changes. The Federal is, about 2 million jobs would have been shifted Reserve routinely sterilizes the effects of U.S. from the traded goods to the nontraded goods and foreign dollar intervention on the reserve sector. The regional impacts of such adjustments position of the U.S. banking system. Analyticalcould be severe. ly, intervention sales of dollars may tend to put The subcommittee has requested comment on upward pressure on U.S. interest rates, when the the question of how the dollar's exchange value monetary effects are sterilized, because more could be reduced, or indeed whether it should dollar securities would then have to be held by be. It is in the nature of a smoothly functioning the public. But such operations would, in effect, international monetary system that exchange offset the downward pressure on interest rates rates should be determined by market forces. that arose from an initial excess demand for However, we must recognize also that some of dollars that caused the dollar to appreciate. the market forces that have driven up the dollar Selective controls on external receipts and are of our own making—in particular, the large payments are undesirable. Historically they have budget deficit and ensuing high real interest been ineffective because there are usually so Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

780 Federal Reserve Bulletin • October 1983 many alternative methods of accomplishing the exchange rates with respect to currencies that same type of transactions. For a currency so are themselves inflating. Against such currencies widely held around the world and so widely the dollar should appreciate over time. It also traded in foreign markets as the dollar, controls follows that the better we do on inflation, the less are totally impracticable. we need worry about the high exchange rate. To conclude on this question, the present In light of present uncertain prospects, a word position of the U.S. balance of payments, and on the longer-run outlook for U.S. export mareven more the prospective further increase in the kets seems appropriate. With the reconstruction current account deficit, in my personal view, is and expansion of industrial capacity in foreign highly undesirable. It puts the United States in economies since World War II, the United States the unnatural position of borrowing on an un- has shifted away from having a net export posiprecedented scale from the rest of the world. It tion during the late 1940s in virtually all categotends to drive up real interest rates abroad, ries of goods—agricultural products, capital hampering recovery and making the debt burden goods, automotive products, consumer goods of developing countries harder to bear. Putting other than foods, and autos. The shift has been very large amounts of dollars in foreign hands toward developing net export positions in prodthat may not be willing to hold dollars indefinite- ucts that are land-intensive, skill-intensive, and ly, though they are eager to acquire them now, technologically advanced—such as agricultural creates the danger, although in no way the cer- products, capital goods, chemicals, and military tainty, of a future excessive drop of the dollar. equipment—while developing net import posi- To the extent that the abnormal strength of the tions in fuels and in manufactures that can only dollar is the result of the budget deficit, a reduc- be produced profitability at relatively lower real tion of the budget deficit seems to be the most wage rates. This trend toward a greater degree of appropriate remedy. In my view, that is very international specialization has on balance conpredominantly the case. On the other hand, to tributed to the growth of U.S. productivity and the extent that foreigners' purchases of dollar income. assets reflect a higher profitability of real invest- Since the beginning of 1981, the U.S. net ment in the United States, and to the extent that export position has declined in virtually all catethis situation should persist, strong demand for gories of goods except fuels and military equipthe dollar may be perpetuated and the economy ment. Part of these declines are related to the probably would have to adapt and in conse- appreciation of the dollar against the currencies quence shift resources from the export sector to of other industrial countries, part are related to production for the domestic market. the financing problems and adjustment measures Technically, it would also be possible to con- of some important developing countries, and part duct monetary policy with a view toward influ- to timing differences in the international business encing the exchange rate. Some central banks cycle. It is undeniable that severe costs have follow, from time to time, this kind of policy. For been imposed by these developments on firms the United States, however, this would have the and workers in export and import-competing serious drawback of having to compromise our industries. It also appears to be the case, howevpresent anti-inflation policy. For instance, in er, that those sectors facing the greatest difficulorder to achieve a lower level for the dollar, it ties in competing with imports are industries that would be necessary to take domestic action to currently are paying relatively high wages. Such expand the money supply and so lower, tempo- sectors can only profitably compete in the longer rarily, interest rates. Pursued for any length of run by paying lower real wages or by receiving time, such action would be inflationary and have protection from imports in a manner that allows a reverse (and perverse) effect on interest rates. them to pass along their higher costs in higher That is not to say that we should not consider the prices for consumers or industrial users. Morevalue of the dollar, along with other variables, in over, over time the rise in net imports of prodsetting our monetary targets. I would note that it ucts that the United States produces relatively would be unwise, of course, to seek stability of inefficiently has been counterpart to the growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 781 in net exports of comparatively advantageous resist pressures for import protection and to fight products. Protection of inefficient industries is against foreign import restrictions or export sublikely to restrict the growth of these efficient sidies—particularly those that impede our comindustries. The United States must continue to paratively advantageous export sectors. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

783 Announcements FEE SCHEDULES FOR SECURITIES Federal Reserve began pricing these services in SAFEKEEPING AND NONCASH COLLECTION October 1981. SERVICES In June 1983, the Board proposed, for public comment, revisions of Federal Reserve fee The Federal Reserve Board has approved fee schedules for definitive securities safekeeping schedules for definitive securities safekeeping and noncash collection services. Following reand noncash collection services, effective Octo- view of public comment and further staff analyber 27, 1983. sis, the Board approved the proposed changes to Both definitive securities safekeeping and non- the fee structures. Some of the prices proposed cash collection are components of the Federal in June were modified. Reserve's securities service. Definitive securi- The revisions to the definitive securities safeties safekeeping consists of vault storage, pri- keeping service include—as proposed—the elimmarily of municipal and corporate securities. ination of the account switch and bond redemp- Noncash collection provides a payments mecha- tion fees and a differentiation in account nism designed to collect items that cannot be maintenance fees based on the number of reprocessed through normal check collection chan- ceipts or issues held in an account. nels. These two services are interrelated as a The changes to the noncash collection service large portion of bonds and coupons collected by include adding an out-of-district component to the Federal Reserve Banks are derived from the coupon collection fee and converting the securities held by them in safekeeping. In ac- bond collection charge from a per-item to a percordance with the Monetary Control Act, the transaction fee. The out-of-district fee is a sur- Fee schedules for definitive securities safekeeping and noncash collection services Dollars Definitive safekeeping Noncash collection DDDiiissstttrrriiicccttt DD aa tt ee cc rr (( pp tt pp aa ii oo nn ee oo ss rr ss nn ii -- )) tt ss WW ttrraa iitt nn hh (( ss dd pp aa rr ee cc aa rr tt ww iioo aa nn ll )) ss 1 M -4 p a 0 e i 0 r n t r e e n c a 4 e m n i 0 p c 0 o t e r 1 o e r PP aa uu nn aa tt dd rr cc rr (( cc tt pp aa ii hh nn ss ee oo aa rr aa ss nn -- ll ss )) ee ee ss ss ccoo aa tt ll BB cc rr (( ll tt ee pp aa oo ii cc nn ee nn oo tt rr ss dd nn ii -- oo )) nn eenn cc LL oo vv (( uu ee oo pp ll pp cc ee oo aa rr oo pp ll nn ee )) eenn D c D c II oo vv ii (( nn ss uu ee pp tt tt ll pp ee ee rr oo rr rr oo ii pp cc -- nn tt ee )) cc $$ vv oo 11 PP aa uu ,, ll 00 ee pp uu rr 00 oo ee 00 nn Boston 12.50 12.50 2.80 2.10 15.00 12.50 2.00 2.55 1.00 New York 35.50 35.50 5.35 4.75 23.00 35.50 2.50 2.75 .50 Philadelphia 15.00 15.00 3.00 2.00 19.00 15.00 2.902 2.55 1.00 Cleveland 15.00 15.00 2.25 1.75 25.00 15.00 3.00 2.50 .50 Richmond 15.00 15.00 1.50 1.00 20.00 20.00 2.00 2.50 1.00 Atlanta (3) (3) (3) (3) 7.50 1.40 2.55 .75 Chicago 11.00 11.00 3.00 2.75 19.00 11.00 2.50 2.75 .70 Detroit 11.00 11.00 2.00 1.75 19.00 11.00 2.50 2.60 1.00 St. Louis 8.00 8.00 1.25 .90 10.00 2.00 2.35 .75 Minneapolis 8.00 8.00 1.40 .75 10.00 8.00 2.50 2.70 .60 Kansas City 15.00 15.00 1.50 1.25 20.00 15.00 3.204 2.50 1.00 Dallas 10.00 10.00 2.75 2.50 26.50 15.00 2.10 2.55 1.00 San Francisco 23.50 35.50 4.00 1.00 1. Maintenance is generally priced on a per-receipt basis except in 3. The Federal Reserve Bank of Atlanta will continue its current New York, Cleveland, and Minneapolis where it is priced on a per- prices under an experimental pricing structure. Additional information issue basis. may be obtained from any office in the Sixth District. 2. The Federal Reserve Bank of Philadelphia also offers a fixed 4. The Federal Reserve Bank of Kansas City offers a municipal service contract option on coupon collection. Additional information coupon collection option. Additional information may be obtained may be obtained from the Reserve Bank. from any office in the Tenth District. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

784 Federal Reserve Bulletin • October 1983 charge for coupons payable outside the Federal Interest Required Reserve District in which they are deposited for rate minimum ceiling deposit collection. Account (percent) (dollars) All time deposits of more than 31 days None None Money market deposit accounts None 2,500 REGULATION Q: AMENDMENT Ceiling-free NOW accounts None 2,500 Time deposits of 7 to 31 days None 2,500 Time deposits of 7 to 31 days1 5'/4 0-2,499 Passbook savings 5'/4 None The Federal Reserve Board has amended its NOW accounts 5'/4 0-2,499 Regulation Q (Interest on Deposits) effective 1. Member banks may continue to issue to governmental units time October 1, 1983, to incorporate rules relating to deposits of less than $2,500 with maturities or required notice periods the payment of interest on deposits adopted by of 7 to 31 days, subject to the previous ceiling of 8 percent in effect for such deposits. the Depository Institutions Deregulation Committee (DIDC). however long the funds withdrawn had been on The DIDC was established by the Depository deposit. Institutions Deregulation Act of 1980, which transferred to the committee the authority of the Board (and similar authority of the Federal De- REGULATION D: AMENDMENT posit Insurance Corporation and the Federal Home Loan Bank Board) to prescribe interest The Federal Reserve Board has announced an rate ceilings and other rules relating to the pay- amendment to Regulation D (Reserve Requirement of interest on deposits. ments of Depository Institutions) modifying re- The technical amendments to Regulation Q serve requirements on nonpersonal time deposeffectuate DIDC actions abolishing ceiling inter- its, effective October 6, 1983. est rates on most time accounts. The resulting Under the amendment, nonpersonal time deinterest rate structure for commercial banks, posits with original maturities of IV2 years or including member banks, is the following: more will have no required reserve.1 Nonperson- The Board also revised its Regulation Q to al time deposits with original maturities of less incorporate DIDC actions effective October 1, than 1V2 years will continue to be subject to a 1983, that reduce penalties for early withdrawals reserve requirement of 3 percent. from contracts entered into, renewed, or extend- The existing reserve requirement for nonpered on or after October 1, 1983, according to the sonal time accounts with original maturities of following schedule: less than 2Vi years is 3 percent. The Board For time deposits of 7 to 31 days, a depositor amended the rule in connection with action by must forfeit an amount at least equal to the the Depository Institutions Deregulation Comgreater of (1) all interest earned on the amount mittee (DIDC) freeing most time deposits from withdrawn during the term of the deposit; or (2) interest rate ceilings effective October 1. all interest that could have been earned on the Nonpersonal time deposits are defined by the amount withdrawn in half of the maturity or Monetary Control Act as time deposits that are notice period. transferable, regardless of the nature of the hold- For time deposits of between 32 days and one er, and time deposits in which any beneficial year, a depositor must forfeit an amount at least interest is held by a depositor that is not a natural equal to one month's interest earned, or that person. could have been earned, on the amount with- The Board also amended Regulation D to drawn at the simple interest rate being paid on lower the minimum maturity for all time deposits the deposit, however long the funds withdrawn to 7 days, effective October 1. At present, time had been on deposit. deposits are required to have minimum maturi- For a time deposit of more than one year, a ties of 14 days, except for deposits issued under depositor must forfeit an amount at least equal to three months' interest earned, or that could have been earned, on the amount withdrawn at the 1. All stated reserve ratios are as of the completion of reserve phase-in periods required under the Monetary Consimple interest rate being paid on the deposit, trol Act of 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 785 the category of 7- to 31-day accounts established OTC stocks to determine which stocks meet the by DIDC in September 1982. This action was requirements for inclusion and continued inclutaken in connection with actions by DIDC effec- sion on the list of OTC margin stocks and periodtive October 1, 1983, permitting the 7- to 31-day ically revises the list. account to be issued as a negotiable instrument. The Board's official notice of its actions will be issued shortly. MEETING OF CONSUMER ADVISORY COUNCIL PROPOSED ACTIONS The Federal Reserve Board has announced that its Consumer Advisory Council met on October The Federal Reserve Board has announced that 26 and 27. it is proposing to amend its Regulation J (Collec- The Council comprises 30 members who reption of Checks and Other Items and Wire Trans- resent a broad range of consumer and creditor fers of Funds) to permit Reserve Banks to charge interests. Its function is to advise the Board for checks that would be presented for collection regarding its responsibilities under the Consumer to a bank or other depository institution that is Credit Protection Act and on other matters on closed on a weekday during which the Reserve which the Board seeks the advice of the Council. Bank is open. The Board requested comment by October 14, 1983. The Federal Reserve Board has also requested PUBLIC TOURS OF BOARD BUILDING comment on a revised and restructured fee schedule for services supplied by Federal Re- The Federal Reserve Board has announced a serve Banks to automated clearinghouses change in the hours of its public tour program. (ACHs—computerized facilities for sorting and Guided tours for the general public will be settling electronically originated payments). given each Thursday afternoon at 2:30, except on The Board also requested comment on a num- holidays. The tour features architectural highber of proposed enhancements for Federal Re- lights of the Marriner S. Eccles Federal Reserve serve ACH services and on the reduction and Board Building; visits to the Board Room, the pricing of float generated in connection with research library, and the computer room; and an ACH transactions. All comments should be re- award-winning movie about the functions of the ceived by November 7, 1983. central bank. Group tours, for persons of high school age and older, may be arranged by appointment with SUPPLEMENT TO OTC STOCK LIST the Tour Office, Federal Reserve Board, Washington, D.C., 20551 (202-452-3149). The Federal Reserve Board has published a supplement to its list of over-the-counter (OTC) stocks that are subject to its margin regulations, SYSTEM MEMBERSHIP: effective October 17, 1983. The supplement ADMISSION OF STATE BANKS should be used in conjunction with the list issued on June 20, 1983. Changes that have been made The following banks were admitted to memberin the list, which now includes 1,740 OTC stocks, ship in the Federal Reserve System during the are as follows: 164 stocks have been included for period September 10 through October 10, 1983: the first time; 30 stocks previously on the list Florida have been removed for substantially failing to Miami M Bank meet the requirements for continued listing; and North Dakota 44 stocks have been removed for reasons such as Wahpeton Dakota Bank of Wahpeton listing on a national securities exchange or acqui- Virginia sition of the companies by another firm. Roanoke Dominion Trust Company The Board monitors the market activity of all Wise First Commonwealth Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

787 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON AUGUST 23, 1983 mortgage loan applications and an increase in cancellations of sales contracts suggested some 1. Domestic Policy Directive weakening in home sales in July. On the other hand, recent data continued on The information reviewed at this meeting sug- the average to indicate strengthening in business gested that real GNP, which had grown at an capital spending. The second quarter had marked annual rate of about 9XA percent in the second a turnaround in that sector: new orders and quarter, was continuing to expand quite rapidly shipments of nondefense capital goods were up in the current quarter, propelled to a large extent 14 percent and 4lA percent respectively from the by the relatively sharp swing in business inven- previous quarter; and expenditures for equiptories from liquidation to accumulation that ap- ment rose at an annual rate of 14 percent in real peared to be in process. Available indicators of terms, the largest one-quarter advance in five final purchases remained generally favorable, years. This strengthening tendency appeared to though suggestive of a slowing from the unusual- be continuing. Production of business equipment ly strong rate of expansion in the second quarter. remained strong in June and July, and shipments Personal consumption expenditures in the sec- of nondefense capital goods rose in June to a ond quarter had risen at an exceptional annual level well above the average for the second rate of nearly 10 percent in real terms. Much of quarter. the increased spending occurred in April and The index of industrial production rose 1.8 May, as sales in all major categories advanced percent in July following large advances in the sharply. In June and July the nominal value of second quarter. As in other recent months, sizretail sales showed little further change, but able gains in output occurred across a broad surveys indicated a continuing high level of con- range of industries and were particularly large for sumer confidence. Sales of new domestic auto- consumer durable goods. By July the index had mobiles moved up in June to a relatively strong risen about 10 lA percent from its trough in Noannual rate of 1XA million units and continued at vember 1982, close to the average increase for that pace in July. In early August auto sales rose comparable stages of economic recovery in the somewhat further despite reductions in the avail- postwar period. ability and value of financing concessions and Nonfarm payroll employment, which had inother purchase incentives. creased about 1 million in the second quarter, Total private housing starts edged down in rose about Vi million further in July, and the July, as they had in June, to an annual rate of PA civilian unemployment rate fell 0.5 percentage million units. Permits, however, rose over the point to 9.5 percent. In manufacturing, employ- June-July period—substantially for multifamily ment advanced about 160,000, marking the units and marginally on balance for single-family fourth consecutive month of large gains, and the units. In the second quarter, combined sales of average workweek lengthened a bit further to new and existing houses had risen to a rate more 40.3 hours. than 50 percent above the cyclical low in the In July the producer price index for finished third quarter of 1982, but there was evidence of goods edged up 0.1 percent and the consumer some slowdown as the quarter progressed. price index rose 0.4 percent. Thus far in 1983, the Moreover, reports of an appreciable reduction in producer price index has declined slightly, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • October 1983 the consumer price index and the index of aver- federal government, with growth in nonfinancial age hourly earnings have risen at rates considera- debt remaining within its longer-run range for bly below those in 1982. 1983. Expansion of bank credit was at an annual In foreign exchange markets the trade-weight- rate of around 10 percent in July, about the same ed value of the dollar against major foreign as in the second quarter. Its composition, howcurrencies rose about 4!/2 percent further in July ever, changed substantially. Total loans expandand early August but subsequently depreciated ed at a rate more than double the pace in the about 3 percent. The fluctuation in the exchange second quarter, while acquisitions of U.S. Trearate was related in part to movements in U.S. sury securities slowed appreciably. Outstanding interest rates over the period. The U.S. foreign business loans, which had declined slightly in the trade deficit was smaller in June than in May, but second quarter, grew at an annual rate of about the deficit was much larger in the second quarter 12 percent in July, and consumer loans expanded than in the first, as imports rose while exports at an annual rate of more than 20 percent, nearly were essentially unchanged. twice the pace recorded in the second quarter. At its meeting on July 12-13, 1983, the Com- The pickup in lending to businesses by banks in mittee had decided that open market operations part reflected reduced issuance of bonds by in the period until this meeting should be directed corporations in reaction to increases in long-term at increasing slightly further the existing degree market interest rates. of reserve restraint. That action was expected to Growth in total reserves decelerated to an be associated with growth of M2 and M3 at annual rate of about 6 percent in, July, but annual rates of about 8V2 and 8 percent respec- nonborrowed reserves (including extended credit tively from June to September, consistent with at the discount window) changed little as adjustthe Committee's longer-run ranges of 7 to 10 ment plus seasonal borrowing rose from about percent for M2 for the period from February- $680 million in June to around $875 million in March of 1983 to the fourth quarter of 1983 and July. Such borrowing increased further in the 6V2 to 9Vi percent for M3 for the period from the first half of August to about $1 billion. fourth quarter of 1982 to the fourth quarter of With a little greater restraint on reserve avail- 1983. The Committee had anticipated that a ability relative to demands, the federal funds rate deceleration in growth of Ml to an annual rate of and other short-term interest rates rose about 20 around 7 percent from June to September would to 40 basis points on balance over the intermeetbe consistent with its third-quarter objectives for ing period. Atypically, long-term rates rose by the broader aggregates and that expansion in more than short-term rates, increasing about 80 total domestic nonfinancial debt would remain basis points. Market participants apparently rewithin its associated range of 8V2 to 11V2 percent acted to indications of further strength in the for the year. The intermeeting range for the economy, to concern about possible increases in federal funds rate was retained at 6 to 10 percent. inflationary pressure later during the economic Growth in M2 and M3 slowed substantially in recovery, and to the heavy borrowing by the July to annual rates of about 6lA percent and 5 U.S. Treasury, particularly in connection with percent respectively. By July M2 was at a level the mid-August financing, as well as to the near the midpoint of the Committee's range for slightly firmer degree of restraint on bank re- 1983 and M3 was somewhat below the upper serve positions. After reaching an intermeeting limit of its range. Growth in Ml decelerated to an peak in the second week of August, most interest annual rate of about 9 percent in July, less than rates retraced the greater part of their earlier half the average pace in the May-June period, but increases, apparently reflecting responses to the level of Ml remained above the Committee's slower-than-expected growth in the money supmonitoring range for the second half of the year. ply and incoming data—including the leveling off of retail sales in June and July—that suggested a Total borrowing by domestic nonfinancial secmore moderate pace of economic expansion. tors was estimated to have slowed somewhat in Most commercial banks raised the prime rate July from its average in the second quarter, largely because of reduced borrowing by the charged on short-term business loans by V2 per- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 789 centage point to 11 percent in the early part of tial pickup in business fixed investment might August. Average rates on new commitments for develop as businesses became more optimistic fixed-rate conventional home mortgage loans at about the outlook. Orders for business equipsavings and loan associations were up about 60 ment had been running higher over the course of basis points over the period; the ceiling rate on recent months, and many businesses were re- FHA- and VA-underwritten mortgage loans, porting expanding sales and rising profits. On the which had been raised 1 percentage point as of other hand, members who were less sanguine August 1, was reduced Vi percentage point to 13 about the long-run strength of the recovery caupercent, effective on the day of this meeting. tioned that housing and other interest-sensitive The staff projections presented at this meeting sectors of the economy might weaken appreciaindicated that the economic recovery would con- bly over coming months, given the current relatinue in the latter part of 1983 and in 1984, though tively high level of real interest rates. Reports of at a more moderate pace than in the second and a slowdown in new mortgage applications, inthird quarters of this year. Consumer spending, creased cancellations of existing sales contracts, while continuing to grow, was expected to be- and high vacancy rates in rental units were cited come a less expansive factor. Gains stemming as indications that the recovery in the housing from expenditures on housing and increased bus- sector might wane. A few members also exiness inventories were also expected to provide pressed the view that automobile sales might less stimulus over the projection period. On the slow somewhat more than generally expected as other hand, the staff expected business fixed the pent-up demand for automobiles began to be investment to provide some additional impetus satisfied. Another member suggested more gento overall economic growth. The staff continued erally that growth in consumer spending would to project a gradual decline in the unemployment probably be more moderate than anticipated as rate over the balance of the year and a further consumers attempted to save a higher, and more decline in 1984. Upward pressures on prices and normal, proportion of their incomes than had wages were expected to remain relatively moder- been the case in recent quarters. ate over the projection horizon, although the Members continued to express concern about impact on food prices of adverse weather condi- the prospects for large federal deficits. Although tions might be expected to raise prices, overall, a a stimulative fiscal policy had contributed to the little more than had been previously projected. rebound in economic activity, continued large During the Committee's discussion of the eco- deficits as the recovery proceeded would tend to nomic situation and outlook, the members noted intensify credit market pressures and divert fithe tentative indications of some slowing in the nancial and real resources from needed private pace of the recovery, but they agreed that con- investment in plant and equipment and housing. tinuing economic expansion was a likely pros- The view was expressed that actions to reduce pect for the period through 1984. Views differed future deficits, if of sufficient magnitude, could to some extent regarding the prospective work to ease pressures on interest rates in a strength of the ongoing recovery, although all the period of rising private credit demands. Actual members expected the rate of growth to moder- interest rates would of course be influenced by a ate considerably from its recent pace. Several broad range of developments, including the deagreed that growth at about the moderate pace gree of strength in private credit demands, the projected by the staff was a reasonable expecta- outlook for inflation, and the volume of capital tion for the next several quarters. But some inflows from abroad. believed that the expansion could be on the A number of members commented that strong faster side, whereas others thought that slower competition in many markets, including foreign growth was more probable. competition, along with successful efforts by Factors that would tend to strengthen the many businesses to cut costs, was having a expansion included, it was noted, the substantial restraining effect on prices and wages. Concern momentum of the recovery and the favorable was expressed, however, that upward pressures prospects in such circumstances that a substan- on prices and wages could develop as levels of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • October 1983 capacity utilization and employment continued percent for the period from June to September. to rise. Members also noted the possibility that The members also agreed that the need for the domestic price level would be adversely greater or lesser restraint on reserve conditions affected by higher import prices if the value of should be evaluated against the background of the dollar were to decline substantially on foreign available evidence about trends in economic exchange markets and by rising food prices that activity and prices and conditions in domestic would result from the interaction of adverse and international financial markets, including weather conditions and governmental policies to foreign exchange markets. Depending upon such reduce farm supplies. developments, lesser restraint would be accept- Turning to policy for the near term, the Com- able in the event of a significant shortfall in the mittee considered whether any further adjust- growth of the aggregates over the period ahead, ment in the degree of restraint on bank reserve while somewhat greater restraint would be acconditions would be desirable under current eco- ceptable in the context of more rapid growth in nomic and financial circumstances, given the the aggregates. The Committee continued to behavior of the monetary and credit aggregates. anticipate that its third-quarter objectives for the The members noted that growth in the broader broader aggregates would be consistent with a aggregates, on which the Committee had been deceleration in Ml growth to an annual rate of placing primary emphasis, had slowed substan- around 7 percent from June to September, and tially. Both M2 and M3 appeared to be expanding that expansion in total nonfinancial debt would at rates that were somewhat below their June-to- remain within the range of 8V2 to IV/2 percent September target paths and their recent levels established for the year. It was agreed that the were within the longer-run ranges that the Com- intermeeting range for the federal funds rate, mittee had established for the year. A staff which provides a mechanism for initiating conanalysis suggested that the slowdown in the sultation of the Committee, would remain at 6 to growth of M2 and M3 might have resulted in part 10 percent. from special factors, including an unusually large The following domestic policy directive was buildup in July in the average level of Treasury issued to the Federal Reserve Bank of New balances, which probably led to reduced bank York: reliance on managed liabilities to finance credit The information reviewed at this meeting suggests expansion. An unwinding of these developments continued rapid growth in real GNP in the current in the weeks ahead could be associated with quarter. Industrial production increased sharply in some acceleration in the growth of M2 and M3 July following large gains in the second quarter. Nonover the balance of the third quarter. Growth in farm payroll employment also rose substantially further in July and the civilian unemployment rate de- Ml had moderated somewhat further in July, but clined ¥2 percentage point to 9.5 percent. After rising it remained above the short-run, June-to-Sepsharply in the spring, retail sales have leveled off tember path that the Committee had expected recently. Housing starts edged down over the past two would be consistent with its third-quarter objec- months but permits continued to rise. Recent data on tives for the broader aggregates and also above new orders and shipments on average continued to indicate strength in the demand for business equipits longer-run monitoring range. Incoming data ment. In July, information on producer and consumer suggested, however, that Ml growth would probprices and the index of average hourly earnings was ably continue to decelerate in August. consistent with earlier indications of a considerable moderation in the rate of inflation. At the conclusion of the discussion the mem- Growth in the broader monetary aggregates slowed bers agreed that no change needed to be made at substantially in July, bringing M2 to a level near the this time in the degree of pressure on bank midpoint of the Committee's range for 1983 and M3 to reserves. Accordingly, a consensus was ex- a level somewhat below the upper limit of its range. pressed in favor of maintaining about the existing Growth in Ml decelerated considerably from its Maydegree of reserve restraint for the period immedi- June pace, but its level remained above the Committee's monitoring range for the year. Interest rates rose ately ahead. The members anticipated that such appreciably through much of the intermeeting period a policy course would be associated with growth but recently market rates have retraced most of their of both M2 and M3 at annual rates of around 8 rise. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 791 In part reflecting the course of U.S. interest rates, evaluation of conditions in domestic credit and foreign the weighted average value of the dollar against major exchange markets. foreign currencies rose substantially further in July The Committee seeks in the short run to maintain and early August, but the rise was followed by a the existing degree of reserve restraint. The action is subsequent decline that reversed most of the earlier expected to be associated with growth of M2 and M3 increase. The U.S. foreign trade deficit was smaller in at annual rates of around 8 percent from June to June than in May, but the deficit in the second quarter September, consistent with the targets established for was much larger than in the first as imports rose while these aggregates for the year. Depending on evidence exports were essentially unchanged. about the strength of economic recovery and other The Federal Open Market Committee seeks to fos- factors bearing on the business and inflation outlook, ter monetary and financial conditions that will help to lesser restraint would be acceptable in the context of a reduce inflation further, promote growth in output on a significant shortfall in growth of the aggregates from sustainable basis, and contribute to a sustainable pat- current expectations, while somewhat greater restraint tern of international transactions. At its meeting in would be acceptable should the aggregates expand July the Committee reconsidered the growth ranges more rapidly. The Committee anticipates that a decelfor monetary and credit aggregates established earlier eration in Ml growth to an annual rate of around 7 for 1983 in furtherance of these objectives and set percent from June to September will be consistent tentative ranges for 1984. The Committee recognized with its third-quarter objectives for the broader aggrethat the relationships between such ranges and ulti- gates, and that expansion in total domestic nonfinanmate economic goals have become less predictable; cial debt would remain within the range established for that the impact of new deposit accounts on growth of the year. The Chairman may call for Committee conthe monetary aggregates cannot be determined with a sultation if it appears to the Manager for Domestic high degree of confidence; and that the availability of Operations that pursuit of the monetary objectives and interest on large portions of transaction accounts may related reserve paths during the period before the next be reflected in some changes in the historical trends in meeting is likely to be associated with a federal funds velocity. rate persistently outside a range of 6 to 10 percent. Against this background, the Committee at its July meeting reaffirmed the following growth ranges for the broader aggregates: for the period from February- Votes for this action: Messrs. Volcker, Solomon, March of 1983 to the fourth quarter of 1983, 7 to 10 Gramley, Guffey, Keehn, Martin, Morris, Partee, percent at an annual rate for M2; and for the period Rice, Roberts, Mrs. Teeters, and Mr. Wallich. from the fourth quarter of 1982 to the fourth quarter of Votes against this action: None. 1983, 6'/2 to 9Vz percent for M3. The Committee also agreed on tentative growth ranges for the period from the fourth quarter of 1983 to the fourth quarter of 1984 2. Authorization for Foreign Currency of 6V2 to 9Vi percent for M2 and 6 to 9 percent for M3. Operations The Committee considered that growth in Ml in a range of 5 to 9 percent from the second quarter of 1983 to the fourth quarter of 1983, and in a range of 4 to 8 In August 1982 the Committee had authorized percent from the fourth quarter of 1983 to the fourth the temporary establishment of a special swap quarter of 1984 would be consistent with the ranges for arrangement of $325 million with the Bank of the broader aggregates. The associated range for total Mexico, in addition to the regular swap arrangedomestic nonfinancial debt was reaffirmed at 8V2 to IIV2 percent for 1983 and tentatively set at 8 to 11 ment of $700 million, effective for the period percent for 1984. from August 28, 1982, through August 23, 1983. In implementing monetary policy, the Committee At this meeting the Committee was apprised that agreed that substantial weight would continue to be the Bank of Mexico was making the final repayplaced on the behavior of the broader monetary aggrement of dollars drawn under the special swap gates. The behavior of Ml and total domestic nonfinancial debt will be monitored, with the degree of facility and that the facility would expire today as weight placed on Ml over time dependent on evidence scheduled. It was also noted that drawings made that velocity characteristics are resuming more pre- on the $700 million regular swap arrangement dictable patterns. The Committee understood that had been repaid earlier and that as of this date policy implementation would involve continuing apthere would be no outstanding drawings on the praisal of the relationships between the various measures of money and credit and nominal GNP, including Federal Reserve System by the Bank of Mexico. 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793 Legal Developments AMENDMENTS TO REGULATION O amount of the loan. The lending limit also includes any higher amounts that are permitted by section 5200 of The Board of Governors of the Federal Reserve Sys- the Revised Statutes for the types of obligations listed tem is amending Regulation O (12 C.F.R. Part 215), therein as exceptions to the limit. A member bank's which governs loans by a member bank to insiders, to capital stock and unimpaired surplus equals the sum of implement statutory amendments relating to the limi- (1) of the "total equity capital" of the member bank tations on loans by a member bank to its executive reported on its most recent consolidated report of officers, the aggregate dollar limitation on loans by a condition filed under 12 U.S.C. 1817(a)(3), (2) any member bank to its insiders, and the dollar amount subordinated notes and debentures approved as an above which loans by a member bank to its insiders addition to the member bank's capital structure by the must be approved in advance by the board of directors appropriate Federal banking agency, and (3) any valuof the member bank. ation reserve created by charges to the member bank's Effective October 20, 1983, the Board amends Regu- income. lation O as follows: Part 215—Loans to Executive Officers, 2. Paragraph (b)(1) of Section 215.4 is revised to read Directors, and Principal Shareholders of as follows: Member Banks 1. Paragraph (f) of Section 215.2 is amended by Section 215.4—General Prohibitions revising the first two sentences and adding a third sentence. As amended, paragraph (f) reads as follows: ^ # ^ * * (b) Prior Approval. (1) No member bank may extend credit (which term Section 215.2—Definitions includes granting a line of credit) to any of its executive officers, directors, or principal shareholders or to any related interest of that person in an (f) The "lending limit" for a member bank is an amount that, when aggregated with the amount of all amount equal to the limit on loans to a single borrower other extensions of credit to that person and to all established by section 5200 of the Revised Statutes.2 related interests of that person, exceeds the higher 12 U.S.C. § 84. This amount is 15 per cent of the of $25,000 or 5 per cent of the member bank's capital bank's unimpaired capital and unimpaired surplus in and unimpaired surplus, unless: (i) the extension of the case of loans that are not fully secured, and an credit has been approved in advance by a majority additional 10 per cent of the bank's unimpaired capital of the entire board of directors of that bank, and (ii) and unimpaired surplus in the case of loans that are the interested party has abstained from participating fully secured by readily marketable collateral having a directly or indirectly in the voting. In no event may a market value, as determined by reliable and continu- member bank extend credit to any one of its execuously available price quotations, at least equal to the tive officers, directors, or principal shareholders, or to any related interest of that person, in an amount that, when aggregated with all other extensions of credit to that person, and all related interests of that person, exceeds $500,000, except by complying with the requirements of this paragraph. 2. Where state law establishes a lending limit for a state member bank that is lower than the amount permitted in section 5200 of the 3. The first sentence of paragraph (b) of Section 215.5 Revised Statutes, the lending limit established by applicable state laws shall be the lending limit for the state member bank. is revised to read as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • October 1983 Section 215.5—Additional Restrictions on Definitions Loans to Executive Officers of Member Banks (b) For the purposes of this section - (1) the term "loans and extensions of credit" shall (b) No member bank may extend credit in an aggregate include all direct or indirect advances of funds to a amount greater than the amount permitted in para- person made on the basis of any obligation of that graph (c)(3) of this section to a partnership in which person to repay the funds or repayable from specific one or more of the bank's executive officers are property pledged by or on behalf of the person, and partners and, either individually or together, hold a to the extent specified by the Comptroller of the majority interest. Currency, such term shall also include any liability of a national banking association to advance funds to or on behalf of a person pursuant to a contractual 4. The first sentence of paragraph (c)(3) of Section commitment; and 215.5 is revised to read as follows: (2) the term "person" shall include an individual, sole proprietorship, partnership, joint venture, association, trust, estate, business trust, corporation, (3) for any other purpose not specified in section sovereign government, or agency, instrumentality, 215.5(c)(1) and (2), if the aggregate amount of loans or political subdivision thereof, or any similar entity to that officer under this paragraph does not exceed or organization. at any one time the higher of 2.5 per cent of the bank's capital and unimpaired surplus or $25,000, Exceptions but in no event more than $100,000. (c) The limitations contained in subsection (a) of this 5. Footnotes 2 to 11 are renumbered footnotes 3 to 12. section shall be subject to the following exceptions: (1) Loans or extensions of credit arising from the discount of commercial or business paper evidenc- 6. The Appendix is revised to read as follows: ing an obligation to the person negotiating it with recourse shall not be subject to any limitation based on capital and surplus. Appendix (2) The purchase of bankers' acceptances of the kind described in section 372 of this title and issued by Section 5200 of the Revised Statutes other banks shall not be subject to any limitation based on capital and surplus. Total Loans and Extensions of Credit (3) Loans and extensions of credit secured by bills of landing, warehouse receipts, or similar documents (a)(1) The total loans and extensions of credit by a transferring or securing title to readily marketable national banking association to a person outstanding staples shall be subject to a limitation of 35 per at one time and not fully secured, as determined in a centum of capital and surplus in addition to the manner consistent with paragraph (2) of this subsec- general limitations if the market value of the staples tion, by collateral having a market value at least securing each additional loan or extension of credit equal to the amount of the loan or extension of at all times equals or exceeds 115 per centum of the credit shall not exceed 15 per centum of the unim- outstanding amount of such loan or extension of paired capital and unimpaired surplus of the associa- credit. The staples shall be fully covered by insurtion. ance whenever it is customary to insure such (2) The total loans and extensions of credit by a staples. national banking association to a person outstanding (4) Loans or extensions of credit secured by bonds, at one time and fully secured by readily marketable notes, certificates of indebtedness, or Treasury bills collateral having a market value, as determined by of the United States or by other such obligations reliable and continuously available price quotations, fully guaranteed as to principal and interest by the at least equal to the amount of the funds outstanding United States shall not be subject to any limitation shall not exceed 10 per centum of the unimpaired based on capital and surplus. capital and unimpaired surplus of the association. (5) Loans or extensions of credit to or secured by This limitation shall be separate from and in addition unconditional takeout commitments or guarantees to the limitations contained in paragraph (1) of this of any department, agency, bureau, board, commissubsection. sion, or establishment of the United States or any Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 795 corporation wholly owned directly or indirectly by requirements set forth in subsection (a)(2) of this the United States shall not be subject to any limita- section, to a limitation of 25 per centum of such tion based on capital and surplus. capital and surplus. (6) Loans or extensions of credit secured by a (10) Loans or extensions of credit to the Student segregated deposit account in the lending bank shall Loan Marketing Association shall not be subject to not be subject to any limitation based on capital and any limitation based on capital and surplus. surplus. (7) Loans or extensions of credit to any financial Authority of Comptroller of the Currency institution or to any receiver, conservator, superintendent of banks, or other agent in charge of the (d)(1) The Comptroller of the Currency may prescribe business and property of such financial institution, rules and regulations to administer and carry out the when such loans or extensions of credit are ap- purposes of this section, including rules or regulaproved by the Comptroller of the Currency, shall tions to define or further define terms used in this not be subject to any limitation based on capital and section and to establish limits or requirements other surplus. than those specified in this section for particular classes or categories of loans or extensions of credit. (8)(A) Loans and extensions of credit arising from (2) The Comptroller of the Currency also shall have the discount of negotiable or nonnegotiable inauthority to determine when a loan putatively made stallment consumer paper which carries a full to a person shall for purposes of this section be recourse endorsement or unconditional guarantee attributed to another person. by the person transferring the paper shall be subject under this section to a maximum limitation equal to 25 per centum of such capital and surplus, notwithstanding the collateral require- BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS ments set forth in subsection (a)(2) of this section. (B) If the bank's files or the knowledge of its Orders Under Section 3 of Bank Holding officers of the financial condition of each maker of Company Act such consumer paper is reasonably adequate, and an officer of the bank designated for that purpose The Bank of New Mexico Holding Company, by the board of directors of the bank certifies in Albuquerque, New Mexico writing that the bank is relying primarily upon the responsibility of each maker for payment of such loans or extensions of credit and not upon any full Order Approving Formation of a Bank Holding or partial recourse endorsement or guarantee by Company the transferor, the limitations of this section as to the loans or extensions of credit of each such The Bank of New Mexico Holding Company, Albumaker shall be the sole applicable loan limita- querque, New Mexico, has applied for the Board's approval under section 3(a)(1) of the Bank Holding tions. Company Act (the "Act")(12 U.S.C. § 1842(a)(1)) to (9)(A) Loans and extensions of credit secured by become a bank holding company through the acquisishipping documents or instruments transferring or tion of a least 80 percent of the voting shares of The securing title covering livestock or giving a lien on Bank of Albuquerque, Albuquerque, New Mexico livestock when the market value of the livestock ("Bank"). securing the obligation is not at any time less than Notice of the application, affording opportunity for 115 per centum of the face amount of the note interested persons to submit comments and views, has covered, shall be subject under this section notbeen given in accordance with section 3(b) of the Act. withstanding the collateral requirements set forth The time for filing comments and views has expired, in subsection (a)(2) of this section, to a maximum and the Board has considered the application and all limitation equal to 25 per centum of such capital comments received in light of the factors set forth in and surplus. section 3(c) of the Act. (B) Loans and extensions of credit which arise Applicant, a nonoperating corporation with no subfrom the discount by dealers in dairy cattle of sidiaries, was organized for the purpose of becoming a paper given in payment for dairy cattle, which bank holding company by acquiring Bank, which paper carries a full recourse endorsement or uncontrols deposits of $19.2 million.1 Upon acquisition conditional guarantee of the seller, and which are secured by the cattle being sold, shall be subject under this section, notwithstanding the collateral 1. Banking data are as of June 30, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • October 1983 of Bank, Applicant would control the 73rd largest would be consistent with the public interest and that banking organization in New Mexico and approxi- the application should be approved. mately 0.32 percent of the total commercial bank On the basis of record, including the commitments deposits in the state. made by Applicant, the application is approved for the Bank is the eleventh largest of twelve banking reasons summarized above. The transaction shall not organizations in the relevant banking market,2 and be consummated before the thirtieth calendar day holds 0.91 percent of total commercial bank deposits following the effective date of this Order or later than in the market. Applicant's principals are not principals three months after the effective date of this Order, of any other depository institution in the relevant unless such period is extended for good cause by the banking market. Therefore, consummation of Appli- Board or by the Federal Reserve Bank of Kansas City, cant's proposal would have no adverse effects on acting pursuant to delegated authority. existing or potential competition nor would it result in By order of the Board of Governors, effective an increase in the concentration of banking resources September 12, 1983. in any relevant market. Accordingly, competitive considerations are consistent with approval. Voting for this action: Chairman Volcker and Governors The financial and managerial resources of Applicant Partee, Rice, and Gramley. Absent and not voting: Governors Martin, Wallich, and Teeters. and Bank are regarded as generally satisfactory, and their prospects appear favorable, particularly in light of certain commitments made by Applicant. Specifi- JAMES MCAFEE, [SEAL] Associate Secretary of the Board cally, Applicant has committed to provide Bank with $500 thousand of additional equity capital upon consummation of this transaction, and to maintain the capital to assets ratio of Bank at or above 7 percent in Cambridge Financial Corporation, accordance with the Board's capital guidelines.3 Cambridge, Wisconsin Further, while Applicant will assume some debt as a result of the proposal, Applicant has committed that it Order Denying Formation of a Holding Company will not increase its debt following consummation of the proposal. Moreover, Applicant appears to be capa- Cambridge Financial Corporation, Cambridge, Wisble of servicing its debt within the Board's guidelines4 consin, has applied for the Board's approval under without adversely affecting the condition of Bank. section 3(a)(1) of the Bank Holding Company Act Accordingly, the Board has determined that consider- ("Act") (12 U.S.C. § 1842(a)(1)) to become a bank ations relating to banking factors are consistent with holding company by acquiring 94 percent of Camapproval. bridge State Bank, Cambridge, Wisconsin ("Bank"). Although consummation of this proposal would ef- Notice of the application, affording opportunity for fect no immediate changes in the services offered by interested persons to submit comments and views has Bank, there is no evidence that the banking needs of expired, and the Board has considered the application the community to be served are not being met. Thus, and all comments received in light of the factors set considerations relating to the convenience and needs forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). of the community to be served are consistent with Applicant, a nonoperating Wisconsin corporation approval of the application. Accordingly, the Board with no subsidiaries, was organized for the purpose of has determined that consummation of this proposal becoming a bank holding company by acquiring Bank, which holds deposits of $8.9 million.1 Upon acquisition of Bank, Applicant would control the 536th largest commercial bank in Wisconsin, holding 0.04 percent of statewide commercial bank deposits. Bank competes in the Jefferson banking market 2. The relevant banking market is the Albuquerque RMA, as where it ranks as the ninth largest of 11 commercial defined by the Rand McNally & Company 1982 Commercial Atlas and Marketing Guide. banking organizations and holds 4.2 percent of total 3. See "Policy Statement for Formation of Small One-Bank Hold- market deposits.2 The principals of Applicant are not ing Companies," 66 FEDERAL RESERVE BULLETIN 320 (1980), reprint- affiliated with any other banking organization in the ed in FRRS 11114-855 and 4-S56; amended by the Board and Comptroller of the Currency, "Capital Adequacy Guidelines." 68 FEDERAL RESERVE BULLETIN 33 (1982), reprinted in FRRS H 3-1506; further amended by the Board and the Comptroller of the Currency, "Amendments to the Capital Adequacy Guidelines," 69 FEDERAL RESERVE 1. Deposit and banking data are as of December 31, 1982. BULLETIN 539 (1983). 2. The Jefferson banking market is approximated by the southern 4. 66 FEDERAL RESERVE BULLETIN 320, supra; FRRS 1111 4-S55 and half of Jefferson County and the five eastern most townships in Dane 4-856 supra. County: York, Medina, Deerfield, Christiana, and Albion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 797 Jefferson banking market. The proposed transaction is and needs factors are consistent with, but lend no essentially a corporate reorganization, consummation weight toward, approval of this application. of which would not result in any adverse effects upon On the basis of all of the facts of record, the Board competition or in an increase in the concentration of concludes that the banking considerations involved in banking resources in any relevant area. Accordingly, this proposal present adverse factors bearing upon the the Board concludes that competitive considerations financial and managerial resources and future prosare consistent with approval. pects of Applicant and Bank. Such adverse factors are The Board has indicated on previous occasions that not outweighed by any procompetitive effects or by a holding company should serve as a source of finan- benefits that would result in better serving the convecial and managerial strength to its subsidiary bank and nience and needs of the community. Accordingly, the that the Board would closely examine the condition of Board's judgment is that approval of the application an applicant in each case with this consideration in would not be in the public interest and the application mind. In this case, after considering the reports of should be denied. examination by Bank's primary Federal supervisor On the basis of the facts of record, the application is and other relevant documents, the Board concludes denied for the reasons summarized above. that the record in this application presents adverse By order of the Board of Governors, effective financial and managerial considerations that warrant September 21, 1983. denial of the proposal to form a bank holding company. Voting for this action: Chairman Volcker and Governors In connection with this proposal, Applicant would Martin, Teeters, and Rice. Absent and not voting: Governors Wallich, Partee, and Gramley. incur a sizeable debt. Applicant projects that it will repay its debt within six years, while maintaining JAMES MCAFEE, adequate capital in the Bank. However, in light of [SEAL] Associate Secretary of the Board Bank's performance in recent years and other facts of record, Applicant's projections appear to be overly optimistic. Using less optimistic projections, the Board concludes that it is not likely that Applicant will Comerica Incorporated, be able to reduce its indebtedness within a reasonable Detroit, Michigan period in accordance with the Board's Policy Statement on Assessment of Financial Factors of One-Bank Order Approving Acquisition of Bank, Formation of Holding Companies.3 Bank Holding Company and Merger of Banks The Board's concern with respect to Applicant's ability to service its acquisition debt is heightened by Comerica Incorporated, Detroit, Michigan, a bank Bank's recent overall performance, a continuation of holding company within the meaning of the Bank which would further reduce Bank's ability to pay Holding Company Act of 1956, as amended (12 U.S.C. dividends necessary to enable Applicant to service its § 1841 et seq.) ("BHC Act"), has applied for the acquisition debt. Thus, it is the Board's judgment that Board's approval under sections 3(a)(1) and (3) of the Applicant would not have sufficient financial flexibility BHC Act (12 U.S.C. § 1842(a)(1),(3), and the Bank to service its debt while maintaining adequate capital Merger Act (12 U.S.C. § 1828(c)) to acquire 100 in Bank in accordance with the Board's standards and percent of the outstanding shares of Bank of the the requirements of the Bank's primary supervisor. Commonwealth, Detroit, Michigan ("Bank"). The Moreover, based on the record it is not likely that transaction would be accomplished in several steps, Applicant would serve as a source of strength to Bank, resulting eventually in the merger of Bank with Applior would have the financial and managerial resources cant's lead bank, Comerica Bank—Detroit. Applicant to meet any unforeseen problems that might arise at has also applied for membership in the Federal Re- Bank. Accordingly, based on the record in this case, serve System for two of the interim banks that would the Board concludes that considerations relating to be created to accomplish the transaction. Applicant's financial and managerial resources and Notice of the applications, affording interested perfuture prospects are adverse and weigh against ap- sons the opportunity to submit comments has been proval of this application. given in accordance with section 3(b) of the BHC Act, Applicant does not propose to make any significant and the Bank Merger Act. As required by the Bank changes in Bank's services. Accordingly, convenience Merger Act, reports of the competitive effects of the merger were requested from the United States Attorney General, the Comptroller of the Currency and the 3. Federal Reserve Regulatory Service 4-856. Federal Deposit Insurance Corporation. The time for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • October 1983 filing comments has expired and the Board has consid- total deposits of $796.8 million, representing 3.5 perered the applications and all comments received in cent of the total deposits in commercial banks in the light of the factors set forth in section 3(c) of the BHC market. Upon acquisition of Bank, Applicant would Act. remain the second largest commercial banking organi- Applicant, with 17 banking subsidiaries, is the third zation in the market and would control 21.4 percent of largest commercial banking organization in Michigan the total deposits in commercial banks in the market. with total deposits of $6.1 billion, representing 12.1 In addition, the percent of commercial bank deposits percent of the total deposits in commercial banks in held by the four largest banking organizations in the the state.1 Bank is the eleventh largest commercial market would increase from 71 percent to 74.5 perbanking organization in Michigan with total deposits of cent and the market's Herfindahl-Hirschman Index $774.7 million, representing 1.6 percent of the total ("HHI") would increase by 125 points from 1445 to deposits in commercial banks in the state. Upon 1570, making the transaction one that would be subject consummation of the proposed transaction, Applicant to challenge by the Department of Justice under its would become the second largest commercial banking merger guidelines.4 organization in the state and control 13.7 percent of Approval of this application would eliminate a comthe total deposits in commercial banks in the state. petitor and increase concentration in the Detroit bank- The Board has considered carefully the effects of the ing market. However, based upon the facts and cirproposal on statewide banking structure. This propos- cumstances of this case, the Board concludes that al involves a combination of sizeable banking organi- consummation of this transaction is not likely to result zations and an increase in the percentage of banking in substantial anticompetitive effects. In reaching this resources controlled by the five largest banking orga- conclusion, the Board has considered the following nizations in the state from 55.4 percent to 57 percent. factors. First, the record indicates that Bank's com- However, Michigan is not a highly concentrated state petitive position in the market, as measured by its in terms of banking resources and would not become share of the total deposits in commercial banks in the so upon consummation of the proposal. In addition, market, may be overstated. Bank has experienced the Board notes that numerous banking alternatives severe financial difficulties for a number of years and would remain in Michigan upon consummation of the has failed to offer banking services equivalent to those proposal. On the basis of these considerations, the of other institutions of its approximate size in the Board concludes that the proposed transaction would market. Second, the Board notes that 44 commercial have no substantial adverse effects on the concentra- banking organizations, including nine of Michigan's 15 tion of banking resources in Michigan. largest commercial banking organizations, would re- The financial and managerial resources and future main in the Detroit banking market following consumprospects of Applicant and its subsidiary banks are mation of the proposal. In a number of previous cases, satisfactory and their future prospects appear favor- the Board has indicated that the competitive influence able. As a result of consummation of this proposal, in a market of the largest bank holding companies in a which includes a capital injection into the resulting state may be greater than what would be expected bank, the financial and managerial resources and fu- based on their market shares alone, especially with ture prospects of Bank will be strengthened. Thus, respect to their ability to serve local commercial considerations relating to banking factors lend weight customers.5 toward approval of the transaction. Finally, the Board has considered the fact that there Subsidiary banks of Applicant compete directly with are 21 thrift institutions in the market that hold depos- Bank in the Detroit banking market.2 Applicant is the its of $7.4 billion, which is approximately 25 percent of second largest of 46 commercial banking organizations the total deposits in the market. Two of these instituin the market, with total deposits of $4.07 billion, tions have deposits of over $1.5 billion. The Board has representing 17.9 percent of total deposits in commercial banks in the market.3 Bank is the seventh largest commercial banking organization in the market with 4. United States Department of Justice merger guidelines, June 14, 1982. If the post-merger HHI is between 1000 and 1800, the Depart- 1. Unless otherwise indicated, all banking data are as of June 30, ment is more likely than not to challenge a merger that produces an 1983. increase in the HHI of 100 points or more. 2. The Detroit banking market is approximated by Wayne, Ma- 5. First Tennessee National Corporation, 69 FEDERAL RESERVE comb, and Oakland Counties plus 33 cities and townships from St. BULLETIN, 298 (1983); United Bank Corporation of New York, 67 Clair, Lapeer, Livingston, Washtenaw, and Monroe counties, all in FEDERAL RESERVE BULLETIN, 358 (1981); First Bancorporation of Michigan. Ohio, 67 FEDERAL RESERVE BULLETIN, 799 (1981); and Bank of New 3. Market data are as of June 30, 1982. York ("Empire"), 66 FEDERAL RESERVE BULLETIN, 807 (1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 799 previously indicated that thrift institutions have be- Concurring Statement of Governor Teeters come, or at least have the potential to become, major competitors of commercial banks.6 On this basis, the I believe that the effect of this transaction would be Board has accorded considerable weight to the influ- substantially to lessen competition in the Detroit bankence of thrift institutions in its evaluation of the ing market and that this effect is not mitigated to any competitive effects of a proposal.7 In this case, based significant extent by the factors enumerated by the upon the number, size and market shares of these majority. institutions in the Detroit market, the Board has Upon consummation of this proposal, the four-firm concluded that thrift institutions exert a significant concentration ratio in the Detroit banking market competitive influence that substantially mitigates the would increase from 71.0 percent to 74.5 percent. anticompetitive effects of this proposal.8 Applicant's share of total deposits in commercial The record of this application indicates that this banks in the Detroit banking market would increase to transaction would provide substantial benefits to the 21.4 percent and the Herfindahl-Hirschman Index convenience and needs of the community by averting (HHI) in the market would increase by 125 points from further deterioration of Bank's financial condition.9 In 1445 to 1570. I believe that these increases in market this context, the Board concludes that the benefit of share and concentration reflect a transaction whose maintaining services to Bank's customers that would effect would be substantially to lessen competition in be derived from this proposal are so substantial as the relevant geographic market. to outweigh any anticompetitive effects of this In addition, there is no evidence in the record in this proposal.10 case to indicate that thrift institutions in the Detroit Based on the foregoing and other facts of record, the banking market are exercising their expanded com- Board has determined that the applications under the mercial lending authority to any great extent. There- BHC Act and the Bank Merger Act should be and fore, I do not believe that thrift institutions, which hereby are approved. The transactions shall not be hold only 25 percent of the total deposits in the consummated before the fifth calendar day following market, are competing over the full range of services the effective date of this Order or later than three offered by commercial banks. Based on these facts, months after the effective date of this Order, unless and consistent with prior Board and judicial decisions, such period is extended for good cause by the Board, I do not believe that the competitive influence exerted or by the Federal Reserve Bank of Chicago pursuant by thrift institutions in the Detroit market mitigates the to delegated authority. substantial anticompetitive effects of this transaction. By order of the Board of Governors, effective I am voting to approve this application, however, September 7, 1983. because I believe that the anticompetitive effects of this transaction are clearly outweighed in the public Voting for this action: Chairman Volcker and Governors interest by the benefits to the public that would be Martin, Partee, Teeters, Rice, and Gramley. Absent and not derived from Applicant's acquisition of Bank. Bank voting: Governor Wallich. has not been a viable competitor in the Detroit market for a number of years and has not offered services JAMES MCAFEE, similar to those that are offered by other institutions of [SEAL] Associate Secretary of the Board its size in the market. Because of its financial and managerial problems, Bank's survival as an independent entity is questionable. Acquisition of Bank by Applicant would ensure the continuation and improvement of banking services to Bank's customers. On this 6. General Bancshares Corporation, 69 FEDERAL RESERVE BULLE- basis, I believe the application should be approved. TIN 802; First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). 7. General Bancshares, supra note 6; Fidelcor, Inc. (Southeast September 7, 1983 National Bancshares of Pennsylvania, Inc.), 69 FEDERAL RESERVE BULLETIN 445 (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN, supra note 5. 8. If the thrift institutions in the Detroit banking market are included in the calculation of market concentration, the share of total deposits held by the four largest organizations in the market (one of which is a thrift institution) is 54.2 percent; the HHI declines to 951 required by Michigan's branching laws. The remaining closings are and Applicant and Bank's respective market shares are 13.5 and 2.6 considered necessary by Applicant for business and operational percent. reasons. Applicant states that, with respect to all but one of the 9. Applicant has also indicated that it will provide at Bank's offices, branches to be closed for business reasons, there is a Comerica Bank services such as ATM services and discount securities brokerage, that branch within a mile of each branch to be closed. In view of the facts are not now offered by Bank. of this case, particularly Bank's financial condition, the proposed 10. Applicant has indicated that, upon consummation of the trans- office closings do not reflect adversely upon Applicant's commitment actions, 20 offices of Bank will be closed. Seven of the closings are to the Detroit community. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Federal Reserve Bulletin • October 1983 First Arkansas Bankstock Corporation, has committed to divest Stephens to two current Little Rock, Arkansas directors of Stephens on or before the date of consummation of the acquisition.3 The purchasers would not Order Approving Acquisition of Bank be indebted to Applicant or any of its subsidiaries in connection with this purchase and all director inter- First Arkansas Bankstock Corporation, Little Rock, locks between Applicant and Stephens would be ter- Arkansas, a bank holding company within the meaning minated before consummation. The Board concludes of the Bank Holding Company Act of 1956, as amend- that the sale of Stephens, if consummated on or before ed (12 U.S.C. § 1841 et seq.), has applied for approval Applicant's acquisition of Bank, would eliminate any under section 3(a)(3) of the Act to acquire First substantial adverse effects on existing competition in National Bank of Camden, Camden, Arkansas. the Ouachita County banking market that might other- Notice of the application, affording opportunity for wise result from Applicant's acquisition. interested persons to submit comments, has been The financial and managerial resources of Appligiven in accordance with section 3(b) of the Act. The cant, its subsidiaries and Bank are regarded as generaltime for filing comments has expired, and the applica- ly satisfactory and their future prospects are favortion and all comments received have been considered able. Accordingly, banking factors are consistent with in light of the factors set forth in section 3(c) of the approval. Considerations relating to the convenience Act. and needs of the community to be served also are Applicant, the largest commercial banking organiza- consistent with approval. Thus, based on the foregoing tion in Arkansas, controls four subsidiary banks with and other facts of record, the Board has determined deposits of approximately $807.7 million, representing that consummation of the proposed transaction would 6.9 percent of the total deposits in commercial banks be in the public interest and that the application should in the state.1 Bank, the 41st largest commercial bank- be approved. ing organization in the state, holds $70.2 million in On the basis of the record, the application is apdeposits. After consummation of the proposal and all proved for the reasons summarized above. The transplanned divestitures, Applicant's share of the total action shall not be made before the thirtieth calendar deposits in commercial banks in the state would in- day following the effective date of this Order, or later crease to 7.4 percent. Accordingly, consummation of than three months after the effective date of this this proposal would not result in a significant increase Order, unless such perod is extended for good cause in the concentration of commercial banking resources by the Board, or by the Federal Reserve Bank of in the state. St. Louis pursuant to delegated authority. Applicant and Bank both compete in the Ouachita By order of the Board of Governors, effective County banking market.2 Bank is the largest of four September 22, 1983. commercial banks in the market and controls 47.5 percent of the total deposits in commercial banks in Voting for this action: Chairman Volcker and Governors the market. Applicant operates Stephens Security Martin, Teeters, and Rice. Absent and not voting: Governors Wallich, Partee, and Gramley. Bank ("Stephens"), the third largest bank in the market, which controls 12.4 percent of the total depos- JAMES MCAFEE, its in commercial banks in the market. Upon consum- [SEAL] Associate Secretary of the Board mation of this transaction, Applicant would control 59.9 percent of the total deposits in commercial banks in the market. In the Board's view, the effect of this transaction, absent any planned divestiture, may be substantially to lessen competition in the Ouachita banking market. In order to eliminate the anticompetitive effects that might otherwise result from the acquisition, Applicant 3. The Board's policy with regard to competitive divestitures, as stated in its Order approving the acquisition by Barnett Banks of Florida, Inc., Jacksonville, Florida, of First Marine Banks, Inc., Riviera Beach, Florida, 68 FEDERAL RESERVE BULLETIN 190 (1982), requires that divestitures intended to cure the anticompetitive effects resulting from a merger or acquisition occur on or before the date of 1. Banking data are as of March 31, 1983. consummation of the merger to avoid the existence of anticompetitive 2. The Ouachita County banking market is approximated by Oua- effects. See also, InterFirst Corporation, 69 FEDERAL RESERVE BULchita County, Arkansas. LETIN 383 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 801 First Carmen Bancshares, Inc., Each Applicant is a nonoperating corporation orga- Carmen, Oklahoma nized for the purpose of acquiring one of Banks. Banks are relatively small banking organizations in the state, First Gage Bancorporation, Inc., and together hold approximately $104.3 million in Gage, Oklahoma deposits, representing 0.45 percent of the total deposits in commercial banks in Oklahoma.2 Each bank First Sallisaw Bancshares, Inc., operates in a separate banking market. In one of these Sallisaw, Oklahoma markets, however, a principal of Applicants is associated with two other banking organizations in that First Seminole Bancorporation, Inc., market. Specifically, in addition to Sand Springs Seminole, Oklahoma Bank, a principal of Applicants is associated with Coweta Bancshares, Inc., a one-bank holding compa- Sand Springs Bancshares, Inc., ny with respect to Security National Bank of Coweta, Sand Springs, Oklahoma Coweta, Oklahoma, and Jenks American, Inc., a onebank holding company with respect to Bank of Com- Order Approving Formation of Bank Holding merce, Jenks, Oklahoma, all of which operate in the Companies Tulsa RMA.3 However, the combined market share of these organizations would be only 1.2 percent. Ac- First Carmen Bancshares, Inc., Carmen, Oklahoma cordingly, in light of the small relative and absolute ("Carmen"); First Gage Bancorporation, Inc., Gage, size of the organizations involved, it does not appear Oklahoma ("Gage"); First Sallisaw Bancshares, Inc., that consummation of the Sand Springs proposal Sallisaw, Oklahoma ("Sallisaw"); First Seminole Ban- would have a significant effect on competition or on corporation, Inc., Seminole, Oklahoma ("Seminole"); the concentration of banking resources in any relevant and Sand Springs Bancshares, Inc., Sand Springs, area. Thus, the Board concludes that competitive Oklahoma ("Sand Springs") (together, "Appli- considerations are consistent with approval of these cants"); have each applied for the Board's approval, applications. pursuant to section 3(a)(1) of the Bank Holding Com- Where principals of an applicant are engaged in pany Act (12 U.S.C. § 1842(a)(1)) ("Act") to become operating a chain of banking organizations, the Board bank holding companies. Carmen proposes to acquire analyzes the proposal before it and, in addition, con- First National Bank in Carmen, Carmen, Oklahoma siders the total chain and analyzes the financial and ("Carmen Bank"); Gage proposes to acquire First managerial resources and future prospects of the chain State Bank of Gage, Gage, Oklahoma ("Gage Bank"); and each banking organization that comprises the Sallisaw proposes to acquire First National Bank, chain. In this connection, the Board has considered Sallisaw, Sallisaw, Oklahoma ("Sallisaw Bank"); Applicants' proposals in light of the Board's capital Seminole proposes to acquire First National Bank in adequacy guidelines generally applicable to bank hold- Seminole, Seminole, Oklahoma ("Seminole Bank"); ing companies and chain banking organizations with and Sand Springs proposes to acquire First Bank and consolidated assets of over $150 million.4 Based upon Trust Company, Sand Springs, Oklahoma ("Sand such an analysis, including recent undertakings by Springs Bank") (together, "Banks").1 principals of Applicants with respect to other banking Notice of the applications, affording interested persons an opportunity to submit comments, has been given in accordance with section 3(b) of the Act. The time for filing comments has expired and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). 2. As of June 30, 1982, Carmen Bank held deposits of $6.8 million; Gage Bank held deposits of $5.9 million; Sallisaw Bank held deposits of $18.9 million; Seminole Bank held deposits of $39.4 million and Sand Springs Bank held deposits of $33.3 million. 3. The Tulsa RMA is approximated by all of Tulsa County, the northeastern portion of Creek County, the western half of Wagoner County, the central and southwestern half of Rogers County, and the extreme southeastern portion of Osage County. 4. Federal Reserve Board and Comptroller of the Currency Press Release, December 17, 1981. 68 FEDERAL RESERVE BULLETIN 33 1. Applicants are under the common control of the same four (1982), reprinted in Federal Reserve Regulatory Service, 11 3-1506. principals and, upon consummation, will become part of a chain See also "Definition of Bank Capital Adequacy Guidelines Program" banking organization controlled by these individuals. (SR82-17), dated March 17, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • October 1983 organizations with which they are involved, the Board ri. Applicant controls eight banks in Missouri, five views the financial and managerial resources and banks in Illinois, and one bank in Tennessee. Through future prospects of Applicants, their banking subsid- its five subsidiary banks in Illinois, Applicant is the iaries and the affiliated banking organizations as con- eighteenth largest commercial banking organization in sistent with approval. Illinois,2 and controls commercial bank deposits of Although no significant changes in these banks' approximately $395.4 million, representing 0.43 peroperations or in the services offered to customers are cent of total deposits of commercial banks in the state. anticipated to follow from consummation of the pro- Bank is the 134th largest commercial banking organiposed transactions, considerations relating to the con- zation in Illinois with deposits of $101.4 million, reprevenience and needs of the communities to be served senting 0.11 percent of total deposits of commercial are consistent with approval of these applications. banks in the state. Upon consummation, Applicant Based upon the foregoing and other facts of record, would control 0.54 percent of total commercial bank the Board concludes that consummation of the propos- deposits in the state. Accordingly, consummation of als would be in the public interest and that the applica- this proposal would not have an appreciable effect tions should be approved. upon the concentration of commercial banking re- On the basis of the record, the applications are sources in Illinois. approved for the reasons summarized above. These Section 3(d) of the Bank Holding Company Act transactions shall not be consummated before the prohibits the Board from approving any application by thirtieth calendar day following the effective date of a bank holding company to acquire any bank located this Order or later than three months after the effective outside of the state in which the operations of the bank date of this Order, unless such period is extended for holding company's subsidiaries are principally congood cause by the Board or by the Federal Reserve ducted, unless such acquisition is "specifically autho- Bank of Kansas City pursuant to delegated authority. rized by the statute laws of the state in which such By order of the Board of Governors, effective bank is located, by language to that effect and not September 30, 1983. merely by implication."3 Illinois law prohibits out-ofstate bank holding companies from controlling or Voting for this action: Chairman Volcker and Governors owning more than 5 percent of the voting shares of a Martin, Partee, Teeters, Rice, and Gramley. Absent and not bank in Illinois unless the bank holding company was a voting: Governor Wallich. registered bank holding company and controlled at least two banks in Illinois as of December 31, 1981.4 In WILLIAM W. WILES, addition, the bank to be acquired must have been [SEAL] Secretary of the Board engaged in banking for at least ten years.5 Applicant, an out-of-state bank holding company within the meaning of Illinois law, is eligible to acquire General Bancshares Corporation, an Illinois bank because it was a registered bank St. Louis, Missouri holding company and controlled five banking subsidiaries in Illinois before December 31,1981. In addition, Order Approving Acquisition of Bank Bank has been engaged in banking since 1910, and thus it can be acquired by a bank holding company under General Bancshares Corporation, St. Louis, Missouri, Illinois law. Therefore, based on the foregoing, the a bank holding company within the meaning of the Board has determined, as required by section 3(d) of Bank Holding Company Act, has applied for the the Act, that the proposed acquisition is specifically Board's approval under section 3(a)(3) of the Act authorized by, and conforms with, the statute laws of (12 U.S.C. § 1842(a)(3)), to acquire Security Bank & Illinois. Trust Co., Mt. Vernon, Illinois ("Bank"). Because Applicant's subsidiaries and Bank do not Notice of the application, affording opportunity for operate in the same market, consummation of the interested persons to submit comments, has been proposal would not eliminate existing competition in given in accordance with section 3(b) of the Act. The any relevant market. The Board has examined the time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 3(c) of the Act. Applicant, with total assets of $1.6 billion,1 is a bank 2. Applicant's rank in Illinois is calculated on deposit data as of March 31, 1983, adjusted to reflect bank holding company acquisitions holding company organized under the laws of Missou- approved as of June 15, 1983. 3. 12 U.S.C. § 1842(d). 4. 111. Ann. Stat. chap. 17 § 2510 (Smith-Hurd 1981). 1. Banking data are as of December 31, 1982. 5. 111. Ann. Stat. chap. 17 § 2508 (Smith-Hurd 1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 803 effect of the proposed acquisition by Applicant of of a reasonable number of alternative entrants would Bank upon probable future competition in the relevant only be a general guideline because no single number geographic market in light of the Board's guidelines on could be used as a true indicator in all circumstances. probable future competition.6 These guidelines include The Board was aware that the structure of a particular a consideration of the level of concentration in the market and the limitations on expansion imposed by market, the number of potential entrants into the state law would have to be considered with regard to market, and the attractiveness of the market for each case. de novo or foothold entry. The Board has taken into consideration the limita- Bank operates in the Jefferson County banking tions imposed by Illinois law in its review of Applimarket and is the largest of six banks in the market, cant's proposal. Illinois has divided the state into five controlling 42.3 percent of the total deposits in com- separate banking regions. Under Illinois law, no bank mercial banks in the market.7 In terms of commercial holding company can control a bank except a bank bank deposits only, the three largest commercial bank- whose main banking premises are located within same ing organizations control 90.5 percent of the market's banking region or a contiguous banking region to the commercial bank deposits, a level viewed as highly region in which the acquiring bank holding company is concentrated under the Board's guidelines. located.11 In addition, a bank holding company eligible There are three thrift institutions in the market to acquire a bank in a particular region may not controlling approximately 33 percent of total market acquire a bank that has not engaged in banking busideposits. These institutions are the third, fourth, and ness for at least ten years. Moreover, Illinois law does sixth largest depository institutions in the market, not permit banks to branch, except for limited-service controlling 18.5, 11.2, and 3.5 percent of deposits, facilities located near the bank. respectively. One of these thrifts has offices outside Bank is located in Region 5 and the only banking the market and controls total deposits of over $1 organizations that can acquire Bank are those located billion. The Board has previously indicated that thrift in Region 5 or its contiguous region, Region 4. Alinstitutions have become, or at least have the potential though Illinois has eight commercial banking organizato become, major competitors of banks.8 On this basis, tions with over $1 billion in assets that are not located the Board has accorded considerable weight to the in the market, none of these entities is based in Region competitive influence of thrifts in its evaluation of the 4 or 5 and thus none can legally enter the Jefferson competitive effects of a proposal.9 In this case, the County market. There are two commercial banking Board has considered the presence of thrifts in evalu- organizations that have over $500 million in assets that ating the level of concentration in the Jefferson County can legally enter the Jefferson County market and may market.10 be considered probable future entrants. In view of Utilizing the standards in the Board's guidelines, Applicant's size and resources, it also appears to be a there are fewer than six probable future entrants into probable future entrant into the market. the Jefferson County market. However, when the In this case it appears that several organizations Board published its proposed guidelines, it stated that with assets of less than $500 million could be regarded the use of six probable future entrants as a determinant as probable future entrants into the Jefferson County market. While these organizations are smaller than the Board's guidelines specify, in view of the limitations on expansion in Illinois, acquisition of a bank in Jefferson County would offer one of a limited number of opportunities for them to expand. From the record, 6. "Proposed Policy Statement of the Board of Governors of the several organizations with over $100 million in assets Federal Reserve System for Assessing Competitive Factors Under the have been identified that could be regarded as addi- Bank Merger Act and the Bank Holding Company Act." 47 Federal tional potential entrants into the Jefferson County in Register 9017 (March 3, 1982). Although the proposed policy statement has not been approved by the Board, the Board is using the the particular circumstances of this case. The Board policy guidelines in its analysis of the effect of a proposal on probable also notes that federal thrift institutions may establish future competition. branches in any area of the state and that there are 7. The Jefferson County banking market is defined as Jefferson County, Illinois. 8. First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). 9. Fidelcor, Inc. (Southeast National Bancshares of Pennsylvania, Inc.), 69 FEDERAL RESERVE BULLETIN 445 (1983); First Tennessee National Corporation, note 8 supra. 10. If the thrift institutions in the Jefferson County market are 11. 111. Ann. Stat. chap. 17 § 2507 (Smith-Hurd 1981). A bank included in the calculation of market concentration, the share of total holding company is considered to be located in the region where the deposits held by the three largest organizations in the market (one of main banking premises of the largest bank in Illinois controlled by the which is a thrift) is less than 75 percent, the standard established in the bank holding company is located. 111. Ann. Stat. chap. 17 § 2506 Board's guidelines. (Smith-Hurd 1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • October 1983 numerous federal thrifts in Illinois with assets in By order of the Board of Governors, effective excess of $500 million. August 31, 1983. The Jefferson County market is not in a Standard Metropolitan Statistical Area, as specified in the Voting for this action: Vice Chairman Martin and Gover- Board's guidelines, although the market has approxi- nors Partee and Gramley. Voting against this action: Governor Teeters. Absent and not voting: Chairman Volcker and mately $250 million in deposits. The growth rate of Governors Wallich and Rice. deposits in the market has exceeded the growth rate of deposits in Illinois for the past two years, a fact which JAMES MCAFEE, indicates that the market is attractive for entry. [SEAL] Associate Secretary of the Board In previous cases involving the doctrine of probable future competition, the Board has indicated that market extension mergers should generally be accom- Dissenting Statement of Governor Teeters plished through de novo entry or foothold acquisitions. In this case, Applicant's subsidiary banks are I would deny this application on the grounds that the precluded by state law from de novo entry into Jeffer- proposed acquisition of Security Bank & Trust Co., by son County. With respect to the possibility of a General Bancshares Corporation would have a signififoothold acquisition by Applicant, only six banks cantly adverse effect on probable future competition in operate in the Jefferson County market. Three of the the Jefferson County banking market. I believe that six banks have deposits of less than $10 million, and General Bancshares Corporation has the capacity to are located in small, rural towns outside Mt. Vernon, enter the Jefferson County banking market on a footthe county seat and commercial center of Jefferson hold basis. In light of the concentrated nature of the County. Because of their location and the fact that market and the share of commercial bank deposits they are precluded from branching into Mt. Vernon, held by Security Bank & Trust Co., the elimination of these banks are not regarded as attractive vehicles for General Bancshares Corporation as a probable future entry into the market. entrant is substantially anticompetitive. Accordingly, based on the limitations imposed by I believe that the Board's action approving this state law, the structure of the market, the presence of application represents another situation in which the thrift institutions in the market, and other facts of Board's proposed guidelines relating to probable furecord, the Board concludes that consummation of the ture competition permit acquisitions by bank holding proposed acquisition would not have such adverse companies that have substantially anticompetitive effects on probable future competition in the relevant consequences. As I have previously indicated, I conmarket as to warrant denial of the proposal. tinue to believe that the Board should develop and The financial and managerial resources of Appli- apply standards that more realistically reflect the cant, its subsidiary banks, and Bank are generally adverse effects of the elimination of probable future satisfactory and their future prospects appear favor- competition. able. Accordingly, considerations relating to banking Accordingly, I dissent from the Board's decision factors are consistent with approval. Although no regarding this application. changes in Bank's services are proposed by Applicant, August 31, 1983 there is no evidence in the record indicating that the banking needs of the community to be served are not being met. Accordingly, considerations relating to the Holcomb Bancshares, Inc., convenience and needs of the community to be served Ellsworth, Kansas also are consistent with approval. Based on the foregoing and other facts of record, the Board has deter- Order Denying Formation of Bank Holding Company mined that consummation of the proposed transaction would be consistent with the public interest and that Holcomb Bancshares, Inc., Ellsworth, Kansas, has the application should be approved. applied for the Board's approval under section 3(a)(1) On the basis of the record, the application is ap- of the Bank Holding Company Act (12 U.S.C. proved for the reasons summarized above. The acqui- § 1842(a)(1)) of the formation of a bank holding compasition of shares shall not be made before the thirtieth ny through the acquisition of 100 percent of the voting calendar day following the effective date of this Order shares of First National Bank of Holcomb, Holcomb, or later than three months after the effective date of Kansas ("Bank"). this Order unless such period is extended by the Board Notice of the application, affording opportunity for or by the Federal Reserve Bank of St. Louis, acting interested persons to submit comments, has been pursuant to delegated authority. given in accordance with section 3(b) of the Act. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 805 time for filing comments has expired and the Board cant's capitalization, capital-to-assets ratio, and earnhas considered the application and all comments re- ings projections are consistent with peer group levels. ceived in light of the factors set forth in section 3(c) of In order to facilitate the transfer of local ownership of the Act (12 U.S.C. § 1842(c)). small existing community banks, the Board has adopt- Applicant is a recently organized corporation ed guidelines for the formation of one-bank holding formed for the purpose of becoming a bank holding companies with as much as a 300 percent debt-tocompany through the acquisition of Bank, a newly equity ratio, provided that the Applicant demonstrates chartered bank. Through an exchange of voting com- its ability to become a source of strength to its mon stock, Applicant proposes to transfer ownership subsidiary bank within a relatively short period of of Bank from individuals to a corporation owned by time, such as by reducing its debt-to-equity ratio to a the same individuals, with little change in the Bank's reasonable level (generally 30 percent) within 12 years management or operations. Bank is a de novo bank of consummation.3 In cases involving the formation of which opened, on April 1, 1983, and has no record for a small one-bank holding company through the acquiasset growth or earnings. Therefore, no meaningful sition of a de novo bank, however, the Board has deposit figures or market data are yet available. indicated that, due to the absence of any record of earnings or growth, such a high debt-to-equity ratio Bank is located in the Finney County, Kansas would not be consistent with sound financial practices. banking market.1 The principals of Bank and Appli- In such cases, the Board has found that a debt-tocant operate another bank in Kansas located 150 miles equity ratio of 100 percent or less at formation was from Bank. They do not control any other financial appropriate.4 institution in Bank's market. Accordingly, the Board concludes that consummation of the proposal would Applicant proposes to incur long-term debt for the not result in any adverse effects upon competition or purchase of Bank's shares representing 164 percent of increase the concentration of banking resources in any its pro forma equity, well in excess of the Board's relevant area. policy for bank holding company formations involving The Board has indicated on previous occasions that de novo banks.5 Applicant proposes to service this a holding company should serve as a source of finan- debt by relying almost entirely upon the financial cial and managerial strength to its subsidiary bank, and resources of Bank. The Board has generally found that every proposed acquisition or formation is closely a one-bank holding company that relies on the earnexamined in light of this consideration. With respect to ings of its subsidiary bank to service debt often creates this proposal, the Board concludes that the record a drain on the resources of its subsidiary bank.6 In this presents adverse financial considerations that warrant case, moreover, the Board has carefully considered denial of the proposal. Applicant's earnings and growth projections for Bank and has concluded that these projections are overly The Board has cautioned against the assumption of optimistic. substantial amounts of debt in a bank holding company formation because of concern that the holding compa- Applicant bases its earnings projections on the perny would no longer have the financial flexibility to formance of three de novo banks established in Kanmeet unexpected problems of its subsidiary bank or would be forced to place substantial demands on its subsidiary bank to meet its debt servicing requirements. A high debt-to-equity ratio also may give rise to the risks associated with leveraging. Such risks include a significant reduction in the parent company's ability to use the debt and capital markets to aid its 3. "Federal Reserve Board Policy Statement for Assessing Financial Factors in the Formation of Small One-Bank Holding Compasubsidiary bank should the need arise.2 nies", March 28, 1980. See also First Dodge City Bancshares, Inc., 67 The Board generally regards an applicant's debt-to- FEDERAL RESERVE BULLETIN 800 (1981); Emerson First National equity ratio of 30 percent or less as satisfactory Company, 67 FEDERAL RESERVE BULLETIN 344 (1981). 4. See, e.g., Water Tower Financial Group, Inc., Chicago, Illinois provided that other financial factors, such as appli- (60 FEDERAL RESERVE BULLETIN 731 (1974)) and Mountain Financial Services, Inc., Denver, Colorado (60 FEDERAL RESERVE BULLETIN 677 (1974)) where the debt-to-equity ratios of both companies exceeded 100 percent and the Board denied their holding company formation applications. 5. This debt represents 62 percent of the purchase price. Applicant contends the debt represents 52 percent of the purchase price. However, this computation includes the capitalization of proceeds 1. The Finney County banking market includes Finney County and Bank expects to earn from the commencement of general insurance Garden City, Kansas. activities. The inclusion of such proceeds is not in conformity with 2. See Spur Bancshares Inc., 69 FEDERAL RESERVE BULLETIN 806, generally accepted accounting principles. (1983). 6. Emerson First National Company, supra at 345. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • October 1983 sas. The Board disagrees that their performance sup- ment that approval of the application would not be in ports Applicant's projections. During the first year of the public interest and that the application should be operations, all three banks experienced losses, which denied. is not unusual for de novo banks, and although each of On the basis of the facts of record, the application is the banks became profitable in the second year, each denied for the reasons summarized above. either experienced a subsequent earnings decline or By order of the Board of Governors, effective has not yet generated earnings approaching peer lev- September 26, 1983. els. Bank's earnings projections exceed applicable peer levels, and even if Bank's earnings performance Voting for this action: Vice Chairman Martin and Goverfollowed the pattern of these three banks, Applicant nors Wallich, Partee, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker. would be unable to generate sufficient earnings to adequately service its debt and maintain capital in Bank. JAMES MCAFEE, [SEAL] Associate Secretary of the Board To mitigate the Board's concerns regarding Applicant's high debt-to-equity ratio, Applicant has committed to maintain Bank's primary capital-to-assets ratio at seven percent and to seek prior approval Spur Bancshares, Inc., before incurring additional debt. Based on information Spur, Texas in the record concerning the financial resources of Applicant and its principal shareholders, however, the Order Denying Formation of a Bank Holding Board does not believe that these commitments pro- Company vide sufficient financial support to overcome the adverse financial aspects of the proposal.7 Spur Bancshares, Inc., Spur, Texas ("Applicant"), Applicant further contends that through effective has applied for the Board's approval under section management the debt can be substantially reduced 3(a)(1) of the Bank Holding Company Act (12 U.S.C. over a 12-year period.8 Applicant has expressed plans § 1842(a)(1)) to become a bank holding company by to apply to engage in general insurance activities, the acquiring at least 80 percent of the voting shares of annual commissions from which would enhance Appli- Ranco Bancshares, Inc., Spur, Texas ("Company"), a cant's debt servicing ability. It is the Board s view that registered one-bank holding company by virtue of its these plans do not provide sufficient financial flexibili- control of 98 percent of the voting shares of Spur ty to mitigate the adverse financial factors of this Security Bank, Spur, Texas ("Bank"). proposal. Inasmuch as the holding company formation Notice of the application, affording opportunity for would not affect Bank's services, the Board concludes interested persons to submit comments and views, has that convenience and needs factors are consistent with been given in accordance with section 3(b) of the Act. approval, but lend no weight to outweigh the adverse The time for filing comments and views has expired, financial factors of this application. and the Board has considered the application and all On the basis of all the facts of record, the Board comments received in light of the factors set forth in concludes that the banking considerations involved in section 3(c) of the Act (12 U.S.C. § 1842(c)). this proposal present adverse factors bearing upon the Applicant, a nonoperating corporation with no subfinancial resources and future prospects of Applicant sidiaries, was organized for the purpose of acquiring and Bank. Such adverse factors are not outweighed by Company and, thereby, indirectly acquiring Bank. any procompetitive effects or by benefits that would Upon acquisition of Bank (total deposits of approxiresult in better serving the convenience and needs of mately $17.0 million), Applicant would control one of the community. Accordingly, it is the Board's judg- the smaller banks in the state.1 Bank is the only bank in the relevant banking market and controls 100 percent of the total deposits in commercial banks in the market.2 Although Applicant's principals are associated with other banking organizations, none of these organizations competes in 7. In Water Tower Financial Group, Inc., supra, the principals also the relevant banking market. Thus, consummation of committed to provide additional equity in the event the holding company debt could not be paid out of bank dividends, a commitment similar to Applicant's. However, the Board did not regard the commitment as providing adequate financial support for the new bank. Id. at 731. 8. Applicant projects that its debt-to-equity ratio can be reduced to below 30 percent in 12 years. However, the Board concludes that this 1. All banking data are as of December 31, 1982. would be possible only if Applicant borrowed additional funds in order 2. The relevant banking market is approximated by Dickens Counto maintain a seven percent primary capital-to-assets ratio. ty, Texas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 807 the proposed transaction would have no adverse ef- its subsidiary bank4 and would give rise to the risks fects on competition nor increase the concentration of associated with leveraging. Such risks include a signifbanking resources in any relevant area. Accordingly, icant reduction in the parent company's ability to use the Board concludes that competitive considerations the debt and capital markets to aid its subsidiary bank are consistent with approval of the application. should the need arise. In 1975, Company received approval to become a The Board is prepared to permit relatively high bank holding company through the acquisition of levels of debt such as is contemplated by this proposal Bank. Company has retired all acquisition debt in- only in order to facilitate the transfer of ownership of curred in connection with that transaction. As part of small banks, as discussed above, thereby promoting this transaction, Company's principal proposes to service to the convenience and needs of the communitransfer by sale and gift a total of 43.2 percent of ty. In this case, however, although some voting stock Company's shares to three of his adult children ("Pur- of Company would be transferred to Purchasers, Purchasers"). Purchasers propose to finance their acqui- chaser would not use any of their personal resources in sition by incurring $1.0 million in debt, which would be the transaction and would not be involved in the assumed by Applicant. Following consummation, Ap- management of Applicant, Company, or Bank. In plicant would have a debt-to-equity ratio of 1.46 to 1. addition, Company's principal would remain the larg- Applicant intends to service this debt by dividends est single shareholder of Applicant and would serve in from Bank as well as from the tax benefits associated management positions with Applicant, Company, and with the formation of a bank holding company. Pur- Bank. Based on these facts, the Board concludes that chasers do not intend to use any of their personal no actual change in the ownership and control of Bank resources in this transaction. is contemplated at this time. Moreover, no changes in the services offered by Bank are expected to follow Purchasers' father, who is Company's principal from consummation of the proposed transaction. Conshareholder, would receive 21.4 percent of Applicant's sequently, the Board concludes that this proposal does voting stock and 100 percent of Applicant's nonvoting not qualify for consideration under the Board's policy preferred stock, and would continue to serve as presistatement regarding small one-bank holding compadent of Company and chairman of Bank. Upon connies and that considerations relating to the convesummation of this transaction, Purchasers' father nience and needs of the community to be served lend would become president of Applicant. Purchasers no weight toward approval of the proposal. The manahave indicated that they do not intend to serve in any gerial resources of Applicant, Company, and Bank, capacity with Applicant, Company, or Bank. although satisfactory, lend no weight toward approval The Board has indicated on previous occasions that of the application. a bank holding company should serve as a source of strength to its subsidiary bank and that the Board will Thus, based on the factors the Board is required to examine the condition of an applicant in each case review under the Act, the Board concludes that the with this consideration in mind. Specifically, the considerations relating to the financial resources of Board's experience indicates that a bank holding com- Applicant are adverse and are not outweighed by any pany with a substantial amount of debt generally lacks procompetitive effects or any benefits to the convethe financial flexibility to meet unexpected problems nience and needs of the community. Accordingly, it is of its subsidiary bank. However, the Board has been the Board's judgment that approval of the application willing to approve the formation of one-bank holding would not be in the public interest and the application companies with substantial debt in order to facilitate should be denied. the transfer of local ownership of small community On the basis of the record, the application is denied banks, provided that the Applicant demonstrates its for the reasons summarized above. ability to become a source of strength to its subsidiary By order of the Board of Governors, effective bank within a relatively short period of time, such as September 15, 1983. by reducing its debt-to-equity ratio to a reasonable level (generally 30 percent) within 12 years of consum- Voting for this action: Chairman Volcker and Governors mation.3 Martin, Partee, Rice, and Gramley. Absent and not voting: Governors Wallich and Teeters. In this case, Applicants's formation entails an amount of indebtedness that is so substantial that it will impair its ability to serve as a source of strength to JAMES MCAFEE, [SEAL] Associate Secretary of the Board 3. Federal Reserve Board Policy Statement for Assessing Financial 4. First Dodge City Banchares, Inc., 67 FEDERAL RESERVE BULLE- Factors in the Formation of Small One-Bank Holding Companies, TIN 800 (1981): Emerson First National Company, 67 FEDERAL March 28, 1980. RESERVE BULLETIN 344 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • October 1983 Trilon Financial Corporation, Inasmuch as Applicant and its subsidiaries do not Toronto, Ontaria, Canada control any other banks or conduct any banking operations in the United States, consummation of the pro- Order Approving Acquisition of Banks posed transaction would have no adverse effects on either existing or potential competition in any relevant Trilon Financial Corporation, Toronto, Ontario, Cana- market, and would not increase the concentration of da, has applied for the Board's approval under section resources in any relevant market. Therefore, the 3(a)(1) of the Bank Holding Company Act (12 U.S.C. Board concludes that competitive considerations are § 1842) to become a bank holding company through the consistent with approval of this application. acquisition of 47 percent of the voting shares of Royal The financial and managerial resources and future Trustco Limited, also of Toronto, a registered bank prospects of Applicant and Banks appear satisfactory, holding company by virtue of its ownership of all the and considerations relating to banking factors are voting shares of Royal Trust Bank Corp., Miami, consistent with approval of the application. Consider- Florida, which in turn owns Royal Trust Bank, N.A., ations relating to the convenience and needs of the Miami, Florida; Royal Trust Bank of Florida, N.A., communities to be served are also consistent with St. Petersburg, Florida; Royal Trust Bank, St. Peters- approval. burg, Florida; Royal Trust Bank of Palm Beach, N.A., Based upon the foregoing, including all of the facts Palm Beach, Florida; and Royal Trust Bank of of record and the commitment made by Applicant, the Jacksonville, Jacksonville, Florida (collectively, Board has determined that the application should be "Banks"). and hereby is approved. The transaction shall not be Notice of this application, affording opportunity for consummated before the thirtieth calendar day followinterested persons to submit comments, has been ing the effective date of this Order, or later than three given in accordance with section 3(b) of the Act. The months after the effective date of this Order, unless time for filing comments and views has expired, and such period is extended for good cause by the Board or the Board has considered the application and all by the Federal Reserve Bank of Atlanta under delegatcomments received in light of the factors set forth in ed authority. section 3(c) of the Act. By order of the Board of Governors, effective Applicant is a holding company whose primary September 12, 1983. assets are shares of London Life Insurance Company, London, Ontario, a Canadian life insurance company. Voting for this action: Chairman Volcker and Governors Neither Applicant nor its subsidiaries control any Partee, Rice, and Gramley. Absent and not voting: Governors Martin, Wallich, and Teeters. banks or conduct any banking or nonbanking activities in the United States. Upon acquisition of Royal JAMES MCAFEE, Trustco Limited, Applicant would become a qualifying [SEAL] Associate Secretary of the Board foreign banking organization within the meaning of section 211.23(b) of the Board's Regulation K (12 C.F.R. § 211.23(b)). Unicorp Bancshares, Inc., Royal Trustco Limited is a bank holding company Houston, Texas subject to the Act by virtue of its ownership and control of Banks. These Banks control approximately $737 million in total assets and $486.6 million in total Order Approving Acquisition of Bank domestic deposits, representing approximately one percent of total domestic deposits in commercial Unicorp Bancshares, Inc., Houston, Texas, a bank banks in Florida, and ranking Banks as the 17th largest holding company within the meaning of the Bank commercial banking organization in Florida.1 Royal Holding Company Act, has applied for approval under Trustco Limited has negotiated the sale of all of these section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to Banks to third parties. Applicant supports the decision acquire Unitedbank-Northwest, Houston, Texas of Royal Trustco Limited to sell its banking interests in ("Bank"), a proposed new bank. the United States and has committed to take all action Notice of the application, affording opportunity for within its power to ensure that the sale is completed. interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. The time for filing comments and views has expired, and the application and all comments received have been considered in light of the factors set forth in 1. Banking data are as of December 31, 1982. section 3(c) of the Act (12 U.S.C. § 1842(c)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 809 Applicant, the 35th largest banking organization in consistent with approval. Thus, the Board has deter- Texas, controls two banking subsidiaries with aggre- mined that consummation of the transaction would be gate deposits of approximately $192.2 million,1 repre- in the public interest and that the application should be senting approximately 0.16 percent of statewide de- approved. posits. Accordingly, on the basis of the record, the applica- Applicant has applied to acquire Bank, a proposed tion is approved for the reasons summarized above. new bank. Applicant is thirteenth largest of 104 bank- The transaction shall not be made before the thirtieth ing organizations in the relevant market, controlling calendar day following, or later than three months approximately 0.6 percent of total deposits in commer- after, the effective date of this Order, and Bank shall cial banks in the market.2 In light of the de novo nature be opened for business not later than six months after of this proposal, consummation of this transaction the effective date of this Order. The latter two periods would have no adverse effects on competition or each may be extended for good cause by the Board, or increase the concentration of banking resources in any by the Federal Reserve Bank of Dallas acting pursuant relevant area. Accordingly, the Board concludes that to delegated authority. competitive considerations are consistent with ap- By order of the Board of Governors, effective proval of the application. September 15, 1983. The Board has indicated on previous occasions that a holding company should serve as a source of finan- Voting for this action: Chairman Volcker and Governors cial and managerial strength to its subsidiary bank(s), Martin, Partee, Rice, and Gramley. Absent and not voting: Governors Wallich and Teeters. and that the Board will closely examine the condition of an applicant in each case with this consideration in mind. In addition, where the principal of an applicant JAMES MCAFEE, controls other banking organizations, the Board con- [SEAL] Associate Secretary of the Board siders the financial and managerial resources and future prospects of the institutions comprising the chain.3 In this instance, Applicant is part of a chain United Bancshares, Inc., banking organization consisting of four additional Lincoln, Nebraska banks or bank holding companies, which had combined assets of approximately $444 million on June 30, Order Approving Formation of a Bank Holding 1983. Accordingly, the Board has considered Appli- Company cant's proposal in light of the Board's Capital Adequacy Guidelines4 generally applicable to bank holding United Bancshares, Inc., Lincoln, Nebraska, has apcompanies and chain banking organizations with con- plied for the Board's approval under section 3(a)(1) of solidated assets of over $150 million. the Bank Holding Company Act of 1956, as amended The Board has determined that the financial and ("Act") (12 U.S.C. § 1842(a)(1)), to form a bank managerial resources and future prospects of Appli- holding company by acquiring at least 80 percent of cant, its subsidiary banks and Bank are considered the voting shares of Gateway Bank & Trust Company, generally satisfactory, especially in light of Appli- Lincoln, Nebraska ("Bank"). cant's commitment to increase its capital and to pro- Notice of the application, affording opportunity for vide additional capital to Bank and the combined interested persons to submit comments and views, has chain. Further, Applicant will not incur debt in con- been given in accordance with section 3(b) of the Act. nection with this proposal. Accordingly, consider- The time for filing comments and views has expired, ations relating to banking factors are consistent with and the Board has considered the application and all approval. Considerations relating to the convenience comments received in light of the factors set forth in and needs of the community to be served also are section 3(c) of the Act. Applicant is a nonoperating corporation organized for the purpose of becoming a bank holding company 1. Banking data are as of June 30, 1982, and reflect bank holding by acquiring Bank, which holds deposits of $63.7 company acquisitions approved as of September 30, 1982. million.1 Upon consummation of this proposal, Appli- 2. The relevant banking market is approximated by the Houston RMA. cant will become the 31st largest banking organization 3. See Nebraska Banco, Inc., Ord, Nebraska, 62 FEDERAL RE- in Nebraska controlling 0.56 percent of total deposits SERVE BULLETIN 638 (1976). held by commercial banks in the state. 4. Federal Reserve Board and Comptroller of the Currency Press Release, December 17, 1981. FEDERAL RESERVE BULLETIN 33 (1982), reprinted in Federal Reserve Regulatory Service, 11 3-1506. See also "Definition of Bank Capital and Capital Adequacy Guidelines Program" (SR82-17, dated March 17, 1983). 1. Banking data are as of December 31, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • October 1983 Bank operates in the Lincoln banking market2 Accordingly, the affiliation of Bank with Citizens where it is the third largest of 21 banks and controls 5.5 State Bank and Lincoln Bank East through common percent of total deposits in commercial banks in the control did not result in elimination of any significant market. Principals of Applicant already control a ma- existing competition. Consummation of this proposal jority of Bank's voting shares. Principals of Applicant will not result in elimination of potential competition also control six other banks through one bank holding or concentration of banking resources in any relevant companies, two of which compete with Bank in the market. Therefore, the Board has determined that Lincoln banking market — Citizens State Bank, the considerations relating to competitive factors are consixth largest bank with deposits of $30.8 million, sistent with approval. representing 2.7 percent of total deposits in commer- The financial and managerial resources of Applicant cial banks in the market, and Lincoln Bank East, the and Bank are regarded as generally satisfactory and 12th largest bank with deposits of $12.3 million, repre- their future prospects appear favorable, especially in senting 1.1 percent of total deposits in commercial light of Applicant's proposal to inject additional capital banks in the market. into Bank. Although Applicant proposes to incur debt When principals of an applicant already control the in connection with its proposal, it appears that Applibank to be acquired and also control other banks or cant will be able to retire its debt within the Board's bank holding companies in the same market, the guidelines.5 The Board also has considered the finan- Board, in addition to analyzing the competitive effects cial and managerial resources and future prospects of of the proposal before it, examines the transactions by the other institutions in the chain and considers their which the banks involved came under common control resources and prospects to be satisfactory.6 to determine whether a particular application would Accordingly, it is the Board's judgment that the further an anticompetitive arrangement.3 In this case, proposed acquisition is in the public interest and that while the original affiliation between Bank and Citi- the application should be approved. On the basis of the zens State Bank and Lincoln Bank East eliminated record, the application is approved for the reasons some existing competition at the time of affiliation, summarized above. The transaction shall not be conseveral factors mitigate any adverse competitive summated before the thirtieth calendar day following effects. the effective date of this Order or later than three The Lincoln banking market is regarded as highly months after the effective date of this Order, unless concentrated with the three largest banking organiza- such period is extended for good cause by the Board or tions controlling 79.7 percent of total deposits in by the Federal Reserve Bank of Kansas City, acting commercial banks in the market and a Herfindahl- pursuant to delegated authority. Hirschman Index ("HHI") of 2871. However, a large By order of the Board of Governors, effective portion of the concentration in this market is due to the September 20, 1983. size of the two largest banks in the market, controlling 46.5 percent and 23.9 percent, respectively, of total Voting for this action: Chairman Volcker and Governors deposits in commercial banks in the market. The Martin, Partee, Rice, and Gramley. Absent and not voting: Governors Wallich and Teeters. affiliation of Citizens State Bank and Lincoln Bank East with Bank in 1982 resulted in a chain banking JAMES MCAFEE, organization controlling $106.8 million in deposits, [SEAL] Associate Secretary of the Board representing 9.3 percent of total deposits in commercial banks in the market, and ranking third among banking organizations in the market. This affiliation increased the market HHI by only 41 points.4 Also, there are numerous independent banking alternatives greater to be highly concentrated, but the Department is not likely to in the market. challenge a merger or acquisition resulting in a HHI increase of less than 50 points. 5. Board, "Policy Statement For Formation of Small One-Bank Holding Companies," 66 FEDERAL RESERVE BULLETIN 320 (1980), reprinted in FRRS 11114-855 and 4-856; amended by the Board and the Comptroller of the Currency, "Capital Adequacy Guidelines," 68 FEDERAL RESERVE BULLETIN 33 (1982), reprinted in FRRS H 3-1506; 2. The Lincoln banking market is defined as Lincoln County, further amended by the Board and the Comptroller of the Currency, Nebraska. "Amendments to the Capital Adequacy Guidelines," 69 FEDERAL 3. See Mahaska Investment Company, 63 FEDERAL RESERVE BUL- RESERVE BULLETIN 539 (1983). LETIN 579 (1977); Citizens Bancorp, Inc., 63 FEDERAL RESERVE 6. Where principals of an applicant are engaged in establishing or BULLETIN 1083 (1977); and Mankato Bankshares, Inc., 64 FEDERAL operating a chain of one bank holding companies, the Board analyzes RESERVE BULLETIN 760 (1978). such organizations by standards normally applied to multi-bank 4. According to the Department of Justice's merger guidelines, the holding companies. Nebraska Banco., Inc., 62 FEDERAL RESERVE Department regards a market with post merger HHI of 1,800 points or BULLETIN 638 (1976). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 811 Van Buren Bancorporation, mation of the proposal would increase Applicant's Keosauqua, Iowa share of total deposits in commercial banks in the market to 58.3 percent. In light of these and other facts Order Approving Acquisition of Bank of record, the Board finds that consummation of the proposed transaction would eliminate existing compe- Van Buren Bancorporation, Keosauqua, Iowa, a bank tition between Bank and Applicant, would remove an holding company within the meaning of the Bank independent competitor from the Van Buren County Holding Company Act, has applied for the Board's banking market, and would increase the concentration approval under section 3(a)(3) of the Bank Holding of banking resources in the market. Company Act (12 U.S.C. § 1842(a)(3)) to acquire 86.4 In view of the foregoing discussion and based on the percent of the voting shares of State Savings Bank, facts of record, the Board concludes that the competi- Cantril, Iowa. tive effects of the proposal are substantially adverse. Notice of the application, affording opportunity for Under the standards set forth in section 3(c) of the interested persons to submit comments, has been Bank Holding Company Act, it is clear that the Board given in accordance with section 3(b) of the Act may not approve the subject proposal unless it finds (12 U.S.C. § 1842(b)). The time for filing comments that "the anticompetitive effects of the proposed has expired, and all comments received, including transaction are clearly outweighed in the public interthose of the State of Iowa Department of Banking est by the probable effect of the transaction in meeting recommending approval of this application, have been the convenience and needs of the community to be considered in light of the factors set forth in section served." 3(c) of the Act (12 U.S.C. § 1842(c)). In assessing such considerations in light of the facts Applicant controls one bank subsidiary, Farmers surrounding this proposal, the Board finds that the State Bank, Keosauqua, Iowa ("Farmers"), with total anticompetitive effects are clearly outweighed in the deposits of $25.1 million, representing 0.13 percent of public interest. The financial and managerial resources total deposits held by commercial banks in the state.1 and future prospects of Applicant and its subsidiary It is the 246th largest of the 645 commercial banks in are considered satisfactory and consistent with apthe state. proval of this application. Bank's financial and mana- Bank is 450th largest commercial banking organiza- gerial resources, absent consummation of the instant tion in the state with deposits of $12.6 million, repre- proposal, are less than satisfactory, and its future senting approximately 0.06 percent of deposits held in prospects are uncertain. Bank has suffered losses in its commercial banks in Iowa. Acquisition of Bank would operations and, lacking the internal capability of reincrease Applicant's share of statewide deposits to versing the adverse trend, it appears unlikely that 0.19 percent, and would make Applicant the 145th Bank will be able to continue as a viable organization largest commercial banking organization in the state. in serving the public. Under this proposal, Applicant Because consummation of the transaction would in- has agreed to inject capital of $700,000 and to provide crease Applicant's share of statewide deposits by only significant managerial assistance to Bank. These ac- 0.06 percent, the Board concludes that consummation tions would assure Bank's continued viability and the would not result in a significant increase in the concen- availability of Bank as a source of banking services in tration of banking resources in Iowa. the Van Buren County banking market. Further, Ap- Applicant and Bank both compete in the Van Buren plicant's proposal appears to be the only option avail- County banking market.2 Applicant is the largest of able to prevent further deterioration of the Bank and to four commercial banking organizations in the market, insure its viability. Bank was offered for sale to six with total deposits of $25.1 million representing 42.0 other banking organizations located outside Van Bupercent of total deposits in commercial banks in the ren County. None of these, however, expressed any market. Bank is the third largest banking organization interest in purchase of the Bank. in the market with total deposits of $9.8 million Although the Board would prefer a less anticompetirepresenting 16.3 percent of total deposits.3 Consum- tive acquisition as a means for assuring the continuation of Bank as a vehicle for serving the convenience and needs of the public, it appears that such an alternative is not readily available. Therefore, the 1. All banking data are as of June 30, 1982. Board views the improved financial prospects of Bank 2. The Van Buren County banking market is approximated by the boundaries of Van Buren County. that would result from consummation of this proposal, 3. One of Bank's branches competes in another market. Applicant and convenience and needs considerations as lending has no banking offices in this market, and in light of the facts of significant weight toward approval of the application record, it appears that consummation of this proposal would have no adverse effect on potential competition. and outweighing the substantially adverse competitive Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Federal Reserve Bulletin • October 1983 effects that would result from consummation of the In fulfillment of their statutory responsibilities, the proposal. Accordingly, it is the Board's judgment that Administrator of the Savings and Loan Division of the consummation of the proposal would be in the public North Carolina Department of Commerce and the interest and that the application should be approved. North Carolina Savings Guaranty Corporation have On the basis of record, the application is approved requested that the Board act immediately on this for the reasons summarized above. The transaction application in light of the current financial condition of shall not be made before the thirtieth calendar day Perpetual. As a result of amendments to the BHC Act following the effective date of this Order or later than contained in the Garn-St Germain Depository Instituthree months after the effective date of this Order, tions Act of 1982, section 4(c)(8) of the BHC Act unless such period is extended for good cause by the provides that the Board may dispense with the notice Board, or by the Federal Reserve Bank of Chicago and hearing requirements of section 4(c)(8) with regard pursuant to delegated authority. to the acquisition of a thrift institution if the Board By order of the Board of Governors, effective finds that an emergency exists that requires immediate September 14, 1983. action and the primary federal regulator of the institution concurs in this finding. Voting for this action: Chairman Volcker and Governors Perpetual is a thrift institution as that term is defined Martin, Partee, Rice, and Gramley. Absent and not voting: in the Act and on the basis of the request by North Governors Wallich and Teeters. Carolina authorities and other information of record, the Board finds that an emergency exists that requires JAMES MCAFEE, immediate action on this application. Since Perpetual [SEAL] Associate Secretary of the Board does not have a federal regulator, the Board has determined that no further action is necessary to Orders Under Section 4 of Bank Holding authorize the Board to dispense with notice and oppor- Company Act tunity for hearing. Perpetual's only regulators, the Savings and Loan Administrator and the Guaranty Corporation, have both urged immediate action on the Old Stone Corporation, basis of Perpetual's condition, and the Board therefore Providence, Rhode Island believes that such action is appropriate under the statute.2 Order Approving Acquisition of Stock Savings and As noted above, this application has been filed Loan Association under section 4(c)(8) of the BHC Act as a nonbanking activity. The BHC Act defines a bank as an institution Old Stone Corporation, Providence, Rhode Island, a that accepts deposits that the depositor has a legal bank holding company within the meaning of the Bank right to withdraw on demand and that is engaged in the Holding Company Act (the "BHC Act"), has applied business of making commercial loans. for the Board's approval under section 4(c)(8) of the As a result of the Garn-St Germain Act, any institu- BHC Act (12 U.S.C. § 1843(c)(8)), and section tion that is insured by the FSLIC is exempt from the 225.4(b)(2) of the Board's Regulation Y (12 C.F.R. bank definition even if it accepts demand deposits and § 225.4(b)(2)), to acquire all of the shares of Perpetual is engaged in the business of making commercial Savings and Loan Association, High Point, North loans. Applicant has stated that it wishes to assure Carolina ("Perpetual"), a state-chartered savings and Perpetual's qualification as a nonbank under the Act loan association insured by the North Carolina Sav- by securing FSLIC insurance. In the interim, Perpetuings Guaranty Corporation. Upon consummation of the proposed acquisition, Applicant will engage through Perpetual in the activity of operating a savings and loan association. Although the Board has not (1977); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN 316 (1982); Citicorp, 68 FEDERAL RESERVE BULLETIN 656 (1982). A added the operation of a thrift institution to the list of recent Board staff study of thrift institutions supports the view that activities specified in section 225.4(a) of Regulation Y operating a thrift institution is closely related to banking. Bank as generally permissible for bank holding companies, Holding Company Acquisitions of Thrift Institutions, September 1981. 2. The provisions of section 4(c)(8) allowing the Board to dispense the Board has determined in several individual with notice and an opportunity for hearing were added to the BHC Act cases that the operation of a thrift institution is closely in conjunction with the passage of the "Regulator's Bill," which related to banking.1 permits the acquisition of troubled thrifts across state lines under certain conditions designed to ensure that potential in-state thrift institutions purchasers are given priority. North Carolina authorities have not been able to secure an in-state purchaser for Perpetual and 1. American Fletcher Corp., 60 FEDERAL RESERVE BULLETIN 868 this proposal therefore complies with the spirit of the Regulator's Bill (1974); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 provisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 813 al will not make commercial loans as that term has In 1977, the Board considered the general question been interpreted by the Board in its decision regarding whether savings and loan association ("S&L") activithe Dreyfus Corporation's acquisition of Lincoln State ties are a proper incident to banking. At that time, the Bank. In view of these commitments, and in light of Board determined that, as a general matter, S&L the fact that Perpetual is a "thrift institution" as that activities are not a proper incident to banking since the term is defined in section 2(i) of the BHC Act, the potential adverse effects of generally allowing affili- Board concludes that this application may properly be ations of banks and S&Ls were then sufficiently strong considered under section 4 of the Act as a nonbanking to outweigh such benefits as might result in individual application. cases. (D. H. Baldwin & Co. 63 FEDERAL RESERVE Applicant is a bank holding company by virtue of its BULLETIN 280 (1977)). control of Old Stone Bank, Providence, Rhode Island, Because of the considerations elaborated in D.H. which operates 30 banking offices throughout Rhode Baldwin & Co., the Board has not been prepared to Island and controls $1.5 billion in deposits (as of permit bank holding companies to acquire thrift insti- March 31, 1983). Applicant also operates industrial tutions on a general basis. However, the Board has banking, consumer finance and mortgage banking sub- consistently regarded the BHC Act as authorizing the sidiaries, but none of Applicant's subsidiaries have Board to permit such an acquisition, and during 1982 offices in North Carolina. Perpetual, a stock savings the Board approved two such proposals involving and loan association, operates six offices in western failing thrift institutions on the basis that any adverse North Carolina and controls $173 million in deposits effects of bank/thrift affiliations would be overcome by (as of March 31, 1983). the public benefits of preserving the failing thrift In view of the fact that Applicant's subsidiaries and institution.3 In addition, Congress has recognized the Perpetual operate in separate markets and there is no need to allow bank holding companies to acquire significant amount of direct competition between failing federally insured thrift institutions in the Garnthem, consummation of the proposed acquisition St Germain Act, and as noted above, the procedures would not have a significant effect on existing competi- followed by North Carolina authorities in this matter tion in any relevant market. In view of the relatively are consistent with the provisions of that Act. small size and limited presence of Perpetual in its The Board has reexamined, in the context of this markets, and the number of potential entrants into application, the general adverse factors cited in the these markets, the Board finds that this acquisition Board's 1977 D. H. Baldwin decision, including reguwould not have any significant adverse effect on latory conflict, erosion of institutional rivalry, and the potential competition. Indeed, the proposed acquisi- potential for undermining interstate banking prohibition would have a substantial beneficial impact on tions. The Board has also considered the adverse competition by ensuring the continued operation of factors that might be associated with this particular Perpetual as a viable institution. application,4 including the potential for unfair compe- Section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) tition, conflicts of interests, financial risks, diversion authorizes a bank holding company to acquire a non- of funds, participation in impermissible activities, and bank company where the activities of the nonbank evasion of interest rate limitations. company are determined by the Board to be "so In view of the determination by the North Carolina closely related to banking or managing or controlling Savings and Loan Administrator, the Guaranty Corpobanks as to be a proper incident thereto." The Act ration, and the Board with respect to Perpetual's provides that the Board may make such determina- financial condition, the lack of any potential thrift tions by order or by regulation. As earlier stated, the institution purchaser for Perpetual, and the other Board has determined previously that the operation of considerations detailed below, the Board has detera thrift institution is closely related to banking, and mined that the substantial benefits to the public associreaffirms that determination in this order. ated with preserving Perpetual as a thrift competitor With respect to the "proper incident" requirement, are sufficient to outweigh the generalized adverse however, section 4(c)(8) of the Act requires the Board effects found by the Board in the D. H. Baldwin case. to consider whether the performance of the activity by The Board considers Applicant's acquisition of Peran affiliate of a holding company "can reasonably be petual to be a substantial and compelling public benefit expected to produce benefits to the public, such as in that Applicant will provide Perpetual with sufficient greater convenience, increased competition, or gains in efficiency that outweigh possible adverse effects, such as undue concentration of resources, decreased 3. Interstate Financial Corp., supra; Citicorp, supra. 4. As stated above, the Board has examined the competitive effects or unfair competition, conflicts of interests, or unassociated with this particular application and has concluded that sound banking practices." there are no significant adverse effects associated therewith. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

814 Federal Reserve Bulletin • October 1983 new capital funds to enable perpetual to continue its a. No banking or other subsidiary of Old Stone operations and to remain a viable competitor. The will link its deposit-taking activities to accounts at record establishes that Applicant has the financial and Perpetual in a sweeping arrangement or similar managerial resources and commitment to serving the arrangement. convenience and needs of the public to achieve this b. Neither Old Stone nor any of its subsidiaries result. The acquisition will preserve a competitor in will solicit deposits or loans for Perpetual, nor the markets served by Perpetual, thus ensuring the shall perpetual solicit deposits or loans for any continuation of services by Perpetual to its customers other subsidiary of Applicant. and protecting the interests of Perpetuals' depositors. 5. Applicant will not change Perpetual's name to The affiliation of Applicant and Perpetual also is not include the word "bank" or any other term that likely to result in unfair competition in view of the might confuse the public regarding Perpetual's stavarious commitments offered by Applicant to ensure tus as a nonbank thrift institution. that Perpetual will be operated independently and not 6. Perpetual will not convert its charter to that of a utilized to further or enhance the activities of Appli- national or state commercial bank without the cants' other subsidiaries. In addition, Perpetual's ac- Board's prior approval. tivities will be limited to those permissible under the 7. Perpetual will not engage in any transaction that BHC Act and its offices will be limited to locations at would be in violation of section 23A of the Federal which banks located in North Carolina may establish Reserve Act, as if Perpetual were a member bank. branches. 8. To the extent necessary to ensure independent To guard against possible adverse effects of affili- operation of Perpetual and prevent the improper ation in this case between a banking organization and a diversion of funds, there shall be no transaction savings and loan association, including the potential between Perpetual and Old Stone or any of its for unfair competition and diversion of funds, the subsidiaries without the prior approval of the Feder- Board has relied on the following commitments offered al Reserve Bank of Boston. This limitation encomby Applicant: passes the transfer, purchase, sale or loan of any 1. Applicant will operate Perpetual as a savings and assets or liabilities, but does not include infusions of loan association having as its primary purpose the capital from Old Stone, the payment of dividends by provision of residential housing credit. Perpetual Perpetual to Old Stone, or the sale of residential real will limit its activities to those permitted to federal estate loans from Perpetual to any subsidiary of Old savings and loan associations currently under the Stone. Home Owners' Loan Act, but shall not engage in any activity prohibited to bank holding companies and their subsidiaries under section 4(c)(8) of the The Board concludes that consummation of the Bank Holding Company Act. These limitations will proposal, subject to the commitments set out above, apply to perpetual's wholly owned service corpora- may not reasonably be expected to result in conflicts tion, which shall have two years from the date of of interests, unsound banking practices, undue conthis Order to complete the divestiture of its imper- centration of resources, or other adverse effects. missible real estate development projects. Based upon the foregoing and other facts and cir- 2. Perpetual will not establish or operate a remote cumstances reflected in the record, the Board has service unit at any location outside North Carolina. determined that the acquisition of Perpetual by Appli- 3. Perpetual will not establish or operate branches cant would result in substantial and compelling public at locations not permissible for national or state benefits that are sufficient to outweigh any adverse banks located in North Carolina.5 effects that may reasonably be expected to result from 4. Perpetual will be operated as a separate, indepen- this proposal, including any potential adverse effects dent, profit-oriented corporate entity and shall not of the affiliation of a commercial banking organization be operated in tandem with any other subsidiary of with a thrift institution. Accordingly, the application is Applicant. Applicant and Perpetual will limit their approved subject to the commitments described in this operations to effect this condition, and will observe Order, and the record of this application. the following conditions: The Board's decision is further subject to the conditions set forth in section 225.4(c) of Regulation Y and to the Board's authority to require such modification or termination of the activities of a holding company or 5. The Federal Reserve Bank of Boston is hereby delegated author- any of its subsidiaries as the Board finds necessary to ity to act on applications by Applicant to open additional offices of assure compliance with the provisions and purposes of Perpetual under section 225.4(b)(1) of Regulation Y. (12 C.F.R. § 225.4(b)(1)). the Act and the Board's regulations and orders issued Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 815 thereunder, or to prevent evasion thereof. The trans- Citizens State Bank, Whitewater, Wisconsin (total action shall be made not later than three months after deposits of $39.2 million as of March 31, 1983), and the effective date of this Order, unless that period is that its service area will be the state of Wisconsin. extended for good cause by the Board or by the In order to approve an application submitted pursu- Federal Reserve Bank of Boston acting pursuant to ant to section 4(c)(8) of the Act, the Board is required authority hereby delegated. to determine that the proposed activity is "so closely By order of the Board of Governors, effective related to banking or managing or conducting banks as September 7, 1983. to be a proper incident thereto ..." (12 U.S.C. § 1843(c)(8)). In this regard, the Board has not previ- Voting for this action: Chairman Volcker and Governors ously found that the sale of general insurance by bank Martin, Partee, Teeters, Rice, and Gramley. Absent and not holding companies with assets of less than $50 million voting: Governor Wallich. is an activity closely related to banking within the meaning of section 4(c)(8) of the BHC Act. However, JAMES MCAFEE, in 1982 Congress amended section 4(c)(8) by adoption [SEAL] Associate Secretary of the Board of Title VI of the Garn-St Germain Depository Institutions Act. In relevant part Title VI of the Garn-St Whitewater Bancorp, Inc., Germain Act reads as follows: Whitewater, Wisconsin It is not closely related to banking or managing or controlling banks for a bank holding company to provide insurance as Order Approving Application to Engage in Insurance principal, agent or broker except: Activities Whitewater Bancorp, Inc., Whitewater, Wisconsin, a bank holding company within the meaning of the Bank (F) Any insurance agency activity engaged in by a bank Holding Company Act ("Act"), has applied for the holding company, or any of its subsidiaries, which bank Board's approval under section 4(c)(8) of the Act holding company has total assets of $50,000,000 or less; (12 U.S.C. § 1843(c)(8)) and section 225.4 of the provided, however, that such bank holding company and its subsidiaries may not engage in the sale of life insurance or Board's Regulation Y (12 C.F.R. § 225.4), to engage annuities except as provided in subparagraph (A), (B), or (C). de novo in general insurance agency activities in a community with a population greater than 5,000. While this activity has not been specified by the Board On the basis of the terms of the statute, an examinain Regulation Y as permissible for bank holding com- tion of the legislative history of the Garn-St Germain panies, Applicant, as a bank holding company with Act2 and the facts of record, the Board concludes that the sale of general insurance by a bank holding compatotal assets of $50 million or less, relies on the statuny with consolidated assets of $50 million or less is an tory language contained in section 601(F) of the Garnactivity closely related to banking and is not prohibited St Germain Depository Institutions Act of 1982' as by the provisions of the Garn-St Germain Act, except authorization for this activity. that the sale of life insurance or annuities is limited as Notice of the application, affording interested perprovided in subsections (A), (B), and (C) of 12 U.S.C. sons an opportunity to submit comments on the pro- § 1843(c)(8).3 posal, has been duly published. (48 Federal Register However, while the activity as proposed by Appli- 21201 (May 11, 1983)). The time for filing comments cant is closely related to banking, in order to approve has expired and the Board has considered the applicathe application, the Board must determine that the tion in light of the public interest factors set forth in performance of the proposed activities by Applicant section 4(c)(8) of the Act. Applicant, with total assets of $45.2 million as of December 31, 1982, proposes to engage in general 2. H. Rep. No. 845, 96th Cong., 2d Sess. 6, 15-16 (1980) ("House insurance activities in Whitewater, Wisconsin, a com- Report"). S. Rep. No. 923, 96th Cong., 2d Sess. 4, 9-10 (1980). S. munity with a population of 12,038 as of the 1970 Rep. No. 536, 97th Cong., 2d Sess. 41-42 (1982) ("Senate Report"). See 126 Cong. Rec. H4911 (daily ed. June 12, 1980) (remarks of Rep. census. Applicant states that the activities will be Ashley); 125 Cong. Rec. 2591 (1979) (remarks of Rep. Hanley); 126 conducted from the offices of its subsidiary bank, First Cong. Rec. H4871 (daily ed. June 12, 1980) (remarks of Rep. McGuire). Also see, Competition in Banking Act of 1980: Hearings on S.39, S.380 and H.R. 2255 before the Senate Committee on Banking, Housing and Urban Affairs, 96th Cong. 2d Sess. 20-21 (1980). 3. The legislative history of Title VI states that such activities must 1. Garn-St Germain Depository Institutions Act of 1982, Pub. L. be terminated if the holding company's assets exceed $50 million. See No. 97-320, 96 Stat. 1469 (1982), as amended by, S.J. Res. 271, Pub. Senate Report at 41-42. In this regard, Applicant has committed to L. No. 97-457, 96 Stat. 2508 (1983). ("Garn-St Germain Act"). divest itself of such activities if its assets exceed $50 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

816 Federal Reserve Bulletin • October 1983 "can reasonably be expected to produce benefits to effects, and that the balance of the public interest the public, such as greater convenience, increased factors favors approval of this application. Accordingcompetition, or gains in efficiency, that outweigh ly, the application is hereby approved. possible adverse effects, such as undue concentration This determination is subject to the conditions set of resources, decreased or unfair competition, con- forth in section 225.4(c) of Regulation Y and the flicts of interests, or unsound banking practices." Board's authority to require such modification or (12 U.S.C. § 1843(c)(8)).4 In this regard, the Board termination of the activities of a holding company or views Applicant's proposal as procompetitive and in any of its subsidiaries as the Board finds necessary to the public interest because de novo entry will provide assure compliance with the provisions and purposes of greater convenience to the public and increased com- the Act and the Board's regulations and orders issued petition in the provision of insurance services in the thereunder, or to prevent evasion thereof. geographic area to be served. Given the relative ease The proposed activities shall commence not later of entry into the market for insurance agency activi- than three months after the effective date of this ties, possible adverse effects, such as undue concen- Order, unless such period is extended for good cause tration of resources or decreased or unfair competi- by the Board or by the Federal Reserve Bank of tion, appear to be limited. Chicago. Based upon the foregoing and all the facts of record, By order of the Board of Governors, effective the Board has determined that the public benefits September 22, 1983. associated with consummation of this proposal can reasonably be expected to outweigh possible adverse Voting for this action: Chairman Volcker, and Governors Martin, Teeters, and Rice. Absent and not voting: Governors Wallich, Partee, and Gramley. 4. See House Report at 15-16 (1980) (statement of Rep. Patterson); JAMES MCAFEE, 126 Cong. Rec. H4907 (daily ed. June 12, 1980) (remarks of Rep. Hansen); Senate Report at 41-42. [SEAL] Associate Secretary of the Board ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During September 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) Ellis Banking Corporation, Jacksonville National Bank, September 26, 1983 Bradenton, Florida Jacksonville, Florida First Bancshares Corporation of Illinois, Airport National Bank, September 26, 1983 Alton, Illinois Bethalto, Illinois Grand Lake Bancorp, Inc., Grand Lake Bank, September 15, 1983 Grove, Oklahoma Grove, Oklahoma Section 4 Effective Applicant Bank(s) ^ American Fletcher Corporation, American Fletcher Mortgage September 22, 1983 Indianapolis, Indiana Company, Inc., Indianapolis, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 817 Section 4—Continued Effective Applicant Bank(s) date European American Bancorp, Dorman & Wilson, Inc., September 13, 1983 New York, New York White Plains, New York First Atlanta Corporation, First Atlanta Mortgage Corporation, September 13, 1983 Atlanta, Georgia Atlanta, Georgia Walter E. Heller International Corpora- Abacus Real Estate Finance Company, September 12, 1983 tion, Chicago, Illinois Chicago, Illinois By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Allied Bancshares, Inc., Commercial National Bank of Dallas August 26, 1983 Houston, Texas Longview, Longview, Texas Ashley Bancstock Company, First National Bank of Crossett, St. Louis August 31, 1983 Crossett, Arkansas Crossett, Arkansas Baker Holding Company, The Bank of Baker, Minneapolis September 2, 1983 Bozeman, Montana Baker, Montana Bank South Corporation, Georgia Bancshares, Inc., Atlanta August 24, 1983 Atlanta, Georgia Macon, Georgia Baylor Bancshares, Inc., Matador Bancshares, Inc., Dallas August 24, 1983 Seymour, Texas Matador, Texas Blanchard Bancshares, Inc., First State Bank, Kansas City August 31, 1983 Blanchard, Oklahoma Blanchard, Oklahoma Borger First Corporation, First National Bank of Borger, Dallas September 9, 1983 Borger, Texas Borger, Texas Buffalo Bancshares, Inc., Oklahoma State Bank, Kansas City August 18, 1983 Buffalo, Oklahoma Buffalo, Oklahoma Burke Securities Company, Bank of Sheridan, Minneapolis September 1, 1983 Missoula, Montana Sheridan, Montana Caney Valley Bancshares, Inc., Caney Valley National Bank, Kansas City September 14, 1983 Caney, Kansas Caney, Kansas Central Bancshares Corpora- The Central National Bank Dallas August 31, 1983 tion, of San Angelo, San Angelo, Texas San Angelo, Texas The Central National Bank-West, San Angelo, Texas Central Montana Bancorpora- First Security Bank of Roundup, Minneapolis September 9, 1983 tion, Roundup, Montana Roundup, Montana Central Montana Agency, Inc., Roundup, Montana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

818 Federal Reserve Bulletin • October 1983 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Central Wisconsin Bankshares, The State Bank of Fall Creek, Chicago August 31, 1983 Inc., Fall Creek, Wisconsin Wausau, Wisconsin Centurion Bancorp, Inc., Citizens National Bank of Richmond September 21, 1983 Charleston, West Virginia St. Albans, St. Albans, West Virginia The Citizens Bancorp of Hick- The Citizens Bank, St. Louis August 24, 1983 man, Inc., Hickman, Kentucky Hickman, Kentucky Citizens Ban-Corporation, Laddonia State Bank, Kansas City August 24, 1983 Rock Port, Missouri Laddonia, Missouri Citizens Community Bank- Citizens State Bank of Witten- Chicago September 9, 1983 shares, Inc., berg, Wittenberg, Wisconsin Wittenberg, Wisconsin Citizens Financial Service Citizens Bank and Trust St. Louis September 2, 1983 Corporation, Company, Van Buren, Arkansas Van Buren, Arkansas Cobanco, Inc., County Bank and Trust, San Francisco September 19, 1983 Santa Cruz, California Santa Cruz, California Comm. Bancorp, Inc., Community National Bank, Philadelphia September 9, 1983 Forest City, Pennsylvania Forest City, Pennsylvania County Bankshares, Inc., Crestwood Bank, Chicago August 30, 1983 Blue Island, Illinois Crestwood, Illinois Dix Bancshares, Inc., First State Bank of Dix, St. Louis September 8, 1983 Dix, Illinois Dix, Illinois Eagle Bank Holding Corp., Citizens State Bank, Minneapolis September 16, 1983 Clarissa, Minnesota Eagle Bend, Minnesota Farmers Bancshares, Inc., The Security State Bank, Atlanta September 22, 1983 Cadwell, Georgia McRae, Georgia Farmers State Bancorporation, The Farmers State Bank of Chicago September 1, 1983 Inc., Waupaca, Waupaca, Wisconsin Waupaca, Wisconsin Financial Management Banc- Farmers' and Merchants' Bank, Richmond September 16, 1983 shares of West Virginia, Inc., Morgantown, West Virginia Morgantown, West Virginia F & M Bank of Suncrest, Inc., Morgantown, West Virginia First Burlington Corporation, First Security Bank, Willow- Chicago August 26, 1983 La Grange, Illinois brook, Willowbrook, Illinois First Connecticut Bancorp, Inc., The Independent Bank and Trust Boston September 15, 1983 Hartford, Connecticut Company, Willimantic, Connecticut First Montgomery Bancorp, Montgomery Bancgroup & Co., St. Louis September 23, 1983 Inc., St. Louis, Missouri Litchfield, Illinois First National Bank of Litchfield, Litchfield, Illinois First National Carlisle Corp., The First National Bank of Car- Cleveland August 25, 1983 Carlisle, Kentucky lisle, Carlisle, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 819 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date First Sweetwater Bancshares, The Texas Bank and Trust Com- Dallas September 8, 1983 Inc., pany, Sweetwater, Texas Sweetwater, Texas Flathead Lake Bancorporation, First Citizens Bank of Poison, Minneapolis September 8, 1983 Inc., Poison, Montana Poison, Montana Florida Bay Banks, Inc., Bay Bank and Trust Company, Atlanta September 1, 1983 Panama City, Florida Panama City, Florida Florida County Banks, Inc., The Farmers and Merchants Atlanta September 16, 1983 Trenton, Florida Bank of Trenton, Trenton, Florida Frankfort Bancshares, Inc., Frankfort State Bank, Chicago September 8, 1983 Frankfort, Illinois, Frankfort, Illinois Freeborn Bancorporation, Inc., First State Bank of Freeborn, Minneapolis September 12, 1983 Freeborn, Minnesota Freeborn, Minnesota Fremont Bank Corporation, Fremont National Bank of Canon Kansas City September 6, 1983 Canon City, Colorado City, Canon City, Colorado Frontier Financial Corporation, Frontier Bank, San Francisco August 24, 1983 Everett, Washington Everett, Washington Genoa Bancshares, Inc., Genoa State Bank, Chicago September 14, 1983 Genoa, Illinois Genoa, Illinois Grand Ridge Bancorporation, Verona Exchange Bank, Chicago August 31, 1983 Inc., Verona, Illinois Grand Ridge, Illinois Great Lakes Financial Re- Community Bank of Homewood- Chicago September 7, 1983 sources, Inc., Flossmoor, Blue Island, Illinois Homewood, Illinois Gulf Southwest Bancorp, Inc., Dickinson State Bank, Dallas September 16, 1983 Houston, Texas Dickinson, Texas Harbor Country Banking Corpo- The Bank of Three Oaks, Chicago August 31, 1983 ration, Three Oaks, Michigan Three Oaks, Michigan Hill Investment Co., Great Mid-West Financial Com- Chicago September 8, 1983 Jewell, Iowa pany, Ames, Iowa Horizon Bancorp, The First-Merchants National Chicago August 31, 1983 Michigan City, Indiana Bank of Michigan City, Michigan City, Indiana Independent Community Banks, Retirement Accounts, Inc., Atlanta September 23, 1983 Inc., Winter Park, Florida Sanibel, Florida Iola Bancshares, Inc., First Bank of Iola, Chicago September 16, 1983 Iola, Wisconsin Iola, Wisconsin Joaquin Bankshares, Inc., Texas State Bank, Dallas September 8, 1983 Huntington, Texas Joaquin, Texas Jorgenson Insurance Agency, State Bank of Kenmare, Minneapolis September 16, 1983 Inc., Kenmare, North Dakota Kenmare, North Dakota Latham Bancorp, Inc., State Bank of Latham, Chicago September 19, 1983 Latham, Illinois Latham, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

820 Federal Reserve Bulletin • October 1983 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Leedey Bancorporation, Inc., The First National Bank of Kansas City September 12, 1983 Leedey, Oklahoma Leedey, Leedey, Oklahoma Lewisville Bancshares, Inc., North Texas Bank, Dallas August 29, 1983 Lewisville, Texas Lewisville, Texas Lincoln Bancshares, Inc., The Farmers Bank of Lincoln, Kansas City September 9, 1983 Lincoln, Missouri Lincoln, Missouri Marionville Bancshares, Inc., First State Bank of Marionville, St. Louis September 20, 1983 Neosho, Missouri Marionville, Missouri Mercantile Bancorporation Inc., First Community Bancorporation, St. Louis August 26, 1983 St. Louis, Missouri Joplin, Missouri Mid Central BanCorp, Inc., Osage Valley Bank, Kansas City August 30, 1983 Warsaw, Missouri Warsaw, Missouri Midwest Financial Group, Inc., Corn Belt Bank, Chicago September 23, 1983 Peoria, Illinois Bloomington, Illinois Montana Bancsystem, Inc., Bank of Montana System, Minneapolis September 19, 1983 Billings, Montana Great Falls, Montana Morgan Capital Corporation, Fort Morgan State Bank, Kansas City September 2, 1983 Fort Morgan, Colorado Fort Morgan, Colorado MSB Holding Company, Inc., Moorhead State Bank, Chicago September 19, 1983 Moorhead, Iowa Moorhead, Iowa NC Bancorp, Inc., Edens Plaza State Bank, Chicago September 7, 1983 Chicago, Illinois Wilmette, Illinois Norban Financial Group, Inc., Northern State Bank, San Francisco August 25, 1983 Coeur d'Alene, Idaho Coeur d'Alene, Idaho North Pacific Bancorporation, North Pacific Bank, San Francisco August 22, 1983 Tacoma, Washington Tacoma, Washington Old National Bancshares, Inc., The Old National Bank of St. Louis September 2, 1983 Centralia, Illinois Centralia, Centralia, Illinois Farmers & Merchants Bank of Carlyle, Carlyle, Illinois One Valley Bancorp of West Mercer County Bank, Richmond September 1, 1983 Virginia, Inc., Princeton, West Virginia Charleston, West Virginia Oquawka Bancshares, Inc., Bank of Oquawka, Chicago September 7, 1983 Oquawka, Illinois Oquawka, Illinois Palmetto State Bankshares, Palmetto State Bank, Richmond September 9, 1983 Inc., Hampton, South Carolina Hampton, South Carolina Peoples BanCorp, Carteret Bank & Trust Company, New York September 1, 1983 Belleville, New Jersey Carteret, New Jersey Peoples Bancorporation, Inc., Winfield State Bank, Atlanta September 2, 1983 Winfield, Alabama Winfield, Alabama P.J.K., Inc., First State Bank of Forest City, Kansas August 30, 1983 Forest City, Missouri Forest City, Missouri Post Bancorp, Inc., Northern National Bank, Kansas City September 6, 1983 Colorado Springs, Colorado Colorado Springs, Colorado Randall Bancshares, Inc., Andes State Bank, Minneapolis September 8, 1983 Lake Andes, South Dakota Lake Andes, South Dakota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 821 Section 3—Continued Reserve Effective Applicant BBaannkk((ss)) Bank date River Valley Bancorporation, River Valley State Bank, Chicago September 20, 1983 Inc., Rothschild, Wisconsin Rothschild, Wisconsin Sandwich Banco, Inc., The Sandwich State Bank, Chicago September 9, 1983 Sandwich, Illinois Sandwich, Illinois First National Bank in DeKalb, DeKalb, Illinois Stromsburg Financial Services, Stromsburg Bank, Kansas City August 19, 1983 Inc., Stromsburg, Nebraska Stromsburg, Nebraska Tabor Enterprises, Inc., First State Bank, Chicago September 2, 1983 Tabor, Iowa Tabor, Iowa TransTexas Bancshares, Inc., First State Bank, Dallas September 21, 1983 Beaumont, Texas Pflugerville, Texas United Bankers, Inc., Travis Bank and Trust, Dallas September 20, 1983 Waco, Texas Austin, Texas Wakefield Bancorporation, Inc., First National Bank of Wakefield, Minneapolis September 9, 1983 Wakefield, Michigan Wakefield, Michigan Section 4 Nonbanking Reserve Effective Applicant company Bank date Douglas Bancorporation, Inc. Parker Industrial Bank, Kansas City September 8, 1983 Parker, Colorado Parker, Colorado Eaton Capital Corporation, Alpha Insurance Management, Kansas City September 9, 1983 Eaton, Colorado Inc., Ault, Colorado Fleet Financial Group, Inc., Credico Financial, Inc., Boston September 16, 1983 Providence, Rhode Island Iselin, New Jersey Colonial American Life Insurance Company, Metairie, Louisiana Credico Mortgage Corp., Altamonte Springs, Florida Norwest Corporation, USLife Credit Corporation, Minneapolis September 16, 1983 Minneapolis, Minnesota Schaumburg, Illinois South Carolina National Corpo- Berkeley Loans, Inc., Richmond September 13, 1983 ration, Charleston, South Carolina Columbia, South Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

822 Federal Reserve Bulletin • October 1983 Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant company Bank date Horizon Bancorp, Northern National Corporation, New York August 29, 1983 Morristown, New Jersey Moorestown, New Jersey Northern National Financial Corp., Wilmington, Delaware 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 1983, 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 A22 Banks in New York City institutions A23 Balance sheet memoranda A6 Federal funds and repurchase agreements of A24 Branches and agencies of foreign banks large member banks 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 A27 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 MONETAR Y AND CREDIT AGGREGATES A31 Federal fiscal and financing operations A32 U.S. Budget receipts and outlays A14 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

80 Federal Reserve Bulletin • October 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 1982f 1983r 1983 Q3 Q4 Qi Q2 Apr/ Mayr Juner July Aug. Reserves of depository institutions 1 Total 4.1 11.8 4.1 12.4 11.0 -.8 15.6 6.0 -3.4 2 Required 3.8 10.8 3.8 2.6 10.1 .1 14.8 5.2 -1.5 3 Nonborrowed 11.2 13.6 3.5 6.2 4.4 1.1 -6.7 12.4 -6.6 4 Monetary base2 6.7 8.2 9.5 11.1 7.8 10.5 10.1 5.1 6.5 Concepts of money and liquid assets3 5 Ml 6.1 13.1 14.1 12.2 -2.7 26.3 10.2 8.9 3.3 6 M2 10.9 9.3 20.3 10.1 2.8 12.4 10.4 6.3 6.7 7 M3 12.5 9.5 10.2 8.1 3.4 11.0 11.0 5.0 8.7 8 L 12.1 8.6 n.a. n.a. 7.3 10.3 n.a. n.a. n.a. Time and savings deposits Commercial banks 9 Total 14.7 5.3 14.7 3.0 7.3 3.1 10.1 6.6 5.7 10 Savings4 -1.8 13.4 -43.4 -14.8 -12.6 0 0 -10.2 11.2 II Small-denomination time5 18.7 -.5 -48.5 24.1 -19.5 -10.1 2.6 24.8 22.4 12 Large-denomination time6 18.i -2.0 -53.9 -24.8 23 38.0 -.8 -8.8 -2.9 13 Thrift institutions7 6.5 6.2 12.1 16.0 16.6 12.0 13.3 14.6 13.5 14 Total loans and securities at commercial banks8 6.0 5.5 9.8 9.8r 13.6 10.7 9.9 9.7 11.2 Interest rates (levels, percent per annuml 1982 1983 1983 Q4 Qi Q2 Q3 May June July Aug. Sept. Short-term rates 15 Federal funds9 9.28 8.65 8.80 9.46 8.63 8.98 9.37 9.56 9.45 16 Discount window borrowing10 9.25 8.50 8.50 8.50 8.50 8.50 8.50 8.50 8.50 17 Treasury bills (3-month, secondary market)11 7.90 8.11 8.40 9.14 8.19 8.79 9.08 9.34 9.00 18 Commercial paper (3-month)1112 8.80 8.34 8.62 9.34 8.33 9.00 9.25 9.54 9.24 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 overnment14 1 9 0 . . 9 7 0 2 1 9 0 . . 4 8 3 7 1 9 0 . . 2 8 3 1 11.79 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 9 2 6 1 9 1 . . 5 8 8 2 21 Aaa utility (new issue) 12.10 11.89 11.46 12.39 11.32 11.87 12.32 12.25 12.53 22 Conventional mortgages 13.79 13.26 13.16 13.83 13.09 13.37 14.00 13.90 13.60 1. Unless otherwise noted, rates of change are calculated from average 5. Small-denomination time deposits—including retail RPs—are those issued amounts outstanding in preceding month or quarter. in amounts of less than $100,000. 2. Includes reserve balances at Federal Reserve Banks in the current week 6. Large-denomination time deposits are those issued in amounts of $100,000 plus vault cash held two weeks earlier used to satisfy reserve requirements at all or more. depository institutions plus currency outside the U.S. Treasury, Federal Reserve 7. Savings and loan associations, mutual savings banks,'and credit unions. Banks, the vaults of depository institutions, and surplus vault cash at depository 8. Changes calculated from figures shown in table 1.23. Beginning December institutions. 1981, growth rates reflect shifts offoreign loans and securities from U.S. banking 3. Ml: Averages of daily figures for (1) currency outside the Treasury, Federal offices to international banking facilities. Reserve Banks, and the vaults of commercial banks; (2) 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 • October 1983 1.11 RESERVES OF DEPOSITORY INSTITUTIONS, RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week ending Factors 1983 1983 July Aug Sept. Aug. 17 Aug. 24 Aug. 31 Sept. 7 Sept. 14 Sept. 2V Sept. 28p SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 164,799 163,698 168,154 165,081 164,934 163,699 163,830 163,970 169,100 173,651 2 U.S. government securities' 143,971 144,901 148,550 145,456 145,584 144,901 145,379 144.732 149,095 153,334 3 Bought outright 143,122 144,578 145,487 145,456 145,584 144,578 144,751 144,732 145,805 146,463 4 Held under repurchase agreements 849 323 3,063 0 0 323 628 0 3,290 6,871 5 Federal agency securities 8,950 8,769 8,995 8,880 8,880 8.769 8,756 8,740 8,985 9,414 6 Bought outright 8,883 8,742 8,739 8.880 8.880 8,742 8,742 8,740 8,737 8,737 7 Held under repurchase agreements 67 27 256 0 0 27 14 0 248 677 8 Acceptances 55 30 139 0 0 30 41 0 61 289 9 Loans 1,382 1.712 1,446 1.474 1,579 1.712 1,246 1,150 2,109 1,281 10 Float 1,812 763 1,171 1,086 1.357 764 943 1,603 949 1,152 11 Other Federal Reserve assets 8,629 7,524 7,853 8,186 7,534 7,524 7,466 7,745 7,901 8,181 12 Gold stock 11,131 11,128 11,128 11,128 11,128 11,128 11,128 11,128 11,128 11,128 13 Special drawing rights certificate account . 4,618 4,618 4,618 4.618 4.618 4,618 4.618 4,618 4,618 4,618 14 Treasury currency outstanding 13,786 13,786 13,786 13,786 13.786 13.786 13,786 13,786 13,786 13,786 ABSORBING RESERVE FUNDS 15 Currency in circulation 160,683 160,453 161,684 161,443 160,893 160,453 162,024 162,678 161,542 160,656 16 Treasury cash holdings 520 490 471 515 494 490 469 474 474 471 Deposits, other than reserves, with Federal Reserve Banks 17 Treasury 4,017 3,300 7,584 3.310 3,559 3,300 3,414 3,438 7,175 14,157 18 Foreign 252 237 212 233 204 237 224 200 207 200 19 Other 623 431 491 446 449 431 498 461 605 417 20 Service-related balances and adjustment ... 902 1,066 1,117 1.065 977 1.066 1,093 1,070 1,113 1,048 21 Other Federal Reserve liabilities and capital 5,197 5,289 5,569 5,332 5,299 5,289 5,191 5,649 5,617 5,770 22 Reserve accounts2 22,139 21.965 20.557 22,269 22,592 21.966 20,449 19,533 21,901 20,466 End-of-month figures Wednesday figures 1983 1983 July Aug. Sept. Aug. 17 Aug. 24 Aug. 31 Sept. 7 Sept. 14 Sept. 21P Sept. 28P SUPPLYING RESERVE FUNDS 23 Reserve Bank credit outstanding 163,893 167,778 175,755 164,608 163,571 167,778 168,925 165,819 174,750 170,883 24 U.S. government securities' 144,255 146,489 155.423 144,972 144,696 146,489 148,668 144,791 149,502 149,370 25 Bought outright 144,255 144,226 146,171 144,972 144,696 144,226 144,277 144,791 148,924 145,194 26 Held under repurchase agreements 0 2,263 9,252 0 0 2,263 4,391 0 578 4,176 27 Federal agency securities 8,880 8,932 9,288 8,880 8,880 8,932 8,840 8,737 8,998 9,071 28 Bought outright 8,880 8.742 8,737 8,880 8,880 8,742 8,742 8,737 8,737 8,737 29 Held under repurchase agreements 0 190 551 0 0 190 98 0 261 334 30 Acceptances 0 209 1,122 0 0 209 288 0 9 89 31 Loans 1,113 3,633 1,625 1.722 1,612 3,633 1,535 2,410 6,817 2,359 32 Float 1,066 979 -60 1.421 872 979 1,782 1,574 1,420 1,737 33 Other Federal Reserve assets 8,579 7,536 8,357 7,613 7,511 7,536 7,812 8,307 8,004 8,257 34 Gold stock 11,131 11,128 11,128 11,128 11,128 11,128 11,128 11,128 11,128 11,128 35 Special drawing rights certificate account . 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 36 Treasury currency outstanding 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 13,786 ABSORBING RESERVE FUNDS 37 Currency in circulation 159.973 161,122 161,046 161,307 160,647 161,122 162,798 162,285 161,136 160,787 38 Treasury cash holdings 495 490 468 515 490 490 474 474 471 468 Deposits, other than reserves, with Federal Reserve Banks 39 Treasury 3,815 4,189 16,557 3,991 3,025 4,189 3.355 3,273 12,806 14,253 40 Foreign 369 248 297 223 208 248 259 243 186 205 41 Other 566 465 438 452 540 465 450 443 470 416 42 Service-related balances and adjustment ... 830 845 911 843 845 845 863 885 898 908 43 Other Federal Reserve liabilities and capital 5,178 5,112 5,800 5,173 5,144 5,112 5,250 5,273 5,462 5,535 44 Reserve accounts2 22,201 24,839 19,769 21,636 22,204 24,839 25,008 22,475 22,853 17,843 1. Includes securities loaned—fully guaranteed by U.S government securities 2. Excludes required clearing balances, pledged with Federal Reserve Banks—and excludes (if any) securities sold and scheduled to be bought back under matched sale-purchase transactions. NOTE. For amounts of currency and coin held as reserves, see table 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Depository Institutions A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages of daily figures Reserve classification 1981 Feb. Mar. Apr. May July Aug. Sept.' 1 Reserve balances with Reserve Banks' 26,163 24,804 23,530 22,168 22,565 22,010 21,808 22,139 21,965 20,533 2 Total vault cash (estimated) 19,538 20,392 20,035 19,484 19,569 19,710 20,098 20,413 20,035 20,791 3 Vault cash at institutions with required reserve balances2 13,577 14,292 13,705 13,027 13,339 13,593 13,647 13,656 14,007 4 Vault cash equal to required reserves at other institutions 2,178 2,757 2,562 2,844 2,839 2,933 3,014 3,161 3,039 3,303 5 Surplus vault cash at other institutions3... 3,783 3,343 3,768 3,613 3,484 3,438 3,491 3,605 3,340 3,481 6 Reserve balances + total vault cash4 45,701 45,196 43,565 41,652 42,134 41,720 41,906 42,552 42,000 41,324 7 Reserve balances + total vault cash used to satisfy reserve requirements4'5 41,918 41.853 39,797 38,039 38,650 38,282 38,415 38,947 38,660 37,843 8 Required reserves (estimated) 41,606 41,353 39,362 37,602 38,174 37,833 37,935 38,440 38,214 37,410 9 Excess reserve balances at Reserve Banks4 6 312 500 435 437 476 449 480 507 446 433 10 Total borrowings at Reserve Banks 642 697 557 852 993 902 1,714 1,382 1,573 1,446 11 Seasonal borrowings at Reserve Banks . 53 33 39 53 82 98 121 172 198 191 12 Extended credit at Reserve Banks 149 187 277 318 407 514 964 572 490 515 Weekly averages of daily figures for week ending 1983 July 27f Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 Sept. 7 Sept. 14 Sept. 21 p Sept. 28p 13 Reserve balances with Reserve Banks' 21,897 21,976 21,029 22,269 22,592 21,966 20,449 19,533 21,901 20,466 14 Total vault cash (estimated) 20,984 20,684 20,804 20,284 19.414 19,361 20,735 21,364 19,648 21,424 15 Vault cash at institutions with required reserve balances2 14,162 13,896 13,733 13,393 13,503 13,894 13,752 13,828 13,588 14,578 16 Vault cash equal to required reserves at other institutions 3,195 3,144 3,325 3,144 2,656 2,986 3,470 3,757 2,924 3,326 17 Surplus vault cash at other institutions3 3,627 3,644 3,746 3,747 3,255 2,481 3,513 3,779 3,136 3,520 18 Reserve balances + total vault cash4 42,881 42,660 41,833 42,553 42,006 41,327 41,184 40,897 41,549 41,890 19 Reserve balances + total vault cash used to satisfy reserve requirements4-5 39,254 39,016 38,087 38,806 38,751 38,846 37,671 37,118 38,413 38,370 20 Required reserves (estimated) 38,882 38,454 37,693 38,358 38,350 38,353 36,914 36,714 38,096 37,908 21 Excess reserve balances at Reserve Banks4-6 372 562 394 448 401 493 757 404 317 462 22 Total borrowings at Reserve Banks 1,387 1,311 1,520 1,474 1,579 1,712 1,246 1,150 2,109 1,281 23 Seasonal borrowings at Reserve Banks 203 192 178 194 207 216 192 185 186 204 24 Extended credit at Reserve Banks 464 445 457 502 524 499 489 501 520 542 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 • October 1983 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks1 Averages of daily figures, in millions of dollars 1983, week ending Wednesday BByy mmaattuurriittyy aanndd ssoouurrccee Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 One day and continuing contract 1 Commercial banks in United States 60,046 62,652 58,593 53,344 52,437 59,161 61,633 56,262 52,230 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 23,992 24,440 23,822 24,299 23,803 23,687 23,248 25,292 24,304 3 Nonbank securities dealers 4,292 4,581 4,571 4,761 3,877 4,210 4,054 3,925 4,071 4 All other 24,222 24,340 25,478 25,886 25,195 24,940 25,675 25,611 25,121 All other maturities 5 Commercial banks in United States 5,680 5,637 5,702 5,822 6,184 5,754 5,825 5,885 6,664 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 9,240 9,185 9,388 9,284 9,105 8,994 9,110 8,656 8,976 7 Nonbank securities dealers 6,324 6,326 6,169 6,232 6,582 6,134 5,689 5,814 6,415 8 All other 8,524 8,254 8,821 9,186 9,606 9,713 9,721 9,278 9,182 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 28,424 24,801 23,095 22,415 23,065 25,322 24,379 22,948 22,084 10 Nonbank securities dealers 4,631 4,675 5,289 5,354 4,710 4,736 4,750 4,012 4,469 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 A 7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit 1 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 9/30/83 date rate 9/30/83 rate 9/30/83 rate 9/30/83 rate Boston 8!/2 12/14/82 9 81/: 9 9'/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 D Sa a n l la F s rancisco... 81/2 1 1 2 2 / / 1 1 4 4 / / 8 8 2 2 9 8'/! 9 9'/2 10 l0</2 11 1 1 2 2 / / 1 1 4 4 / / 8 8 2 2 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. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba of n k Banks N.Y. Banks N.Y. Banks N.Y. I 1 n 9 7 ef 4 f — ec A t D pr e . c. 2 3 5 1 , 1973 m7 V-%i 71/2 1978— July 1 3 0 7- 7 7 1 1 /4 /4 7 7 1 1 / / 4 4 11998811—— MMaayy 55 88 13 1 - 4 1 4 1 1 4 4 3 0 8 Aug. 21 73/4 73/4 Nov. 2 13-14 13 Dec. 9 73/4-8 73/4 Sept. 22 8 8 6 13 13 16 73/4 73/4 Oct. 2 16 0 8-88i</> /2 88'/'2/ 2 Dec. 4 12 12 1975— Jan. 1 6 0 7 71 '/ / 4 4 - - 7 75 3/ / 4 4 7 7 3 '/ / 4 4 Nov. 1 3 81/ 9 2 1 - / 9 2 1 /2 9 9 1 '/ / 2 ! 1982— July 2 2 0 3 ! 1 l 1 l' / / 2 2 - 12 WHi/2V J 24 71/4 7!/4 Aug. 2 ll-ll'/! 11 Feb. 5 6V4-71/4 63/4 1979—July 20 10 10 3 11 11 7 6V4 63/4 Aug. 17 10-10'/2 10'/! 16 10'/2 101/2 Mar. 1 1 0 4 61/ 6 4 ' -6 A V 4 6 61 '/ / 4 4 Sept. 2 19 0 w1/021/2- 11 1 1 0 1 ' /2 3 2 0 7 10-1 1 0 0 1 /2 1 1 0 0 May 16 6-61/4 6 21 11 11 Oct. 12 91/2-10 91/2 23 6 6 Oct. 8 11-12 12 13 91/2 91/2 10 12 12 Nov. 22 9-91/2 9 1976— Jan. 2 1 3 9 51 5 / 1 2 / - 2 6 551/V2 i 1980—Feb. 15 12-13 13 Dec. 2 1 6 4 81/ 9 2 -9 9 9 Nov. 22 51/4-5^ 5'/4 19 13 13 15 81/2—9 81/2 26 51/4 5'/4 May 29 12-13 13 17 8'/2 81/2 30 12 12 1977— Aug. 30 5!/4-53/4 51/4 June 13 11-12 11 31 51/4-53/4 5?4 16 11 11 Sept. 2 53/4 53/4 July 28 10-11 10 Oct. 26 6 6 29 10 10 Sept. 26 11 11 1978— Jan. 9 6-6 '/i 6 Vi Nov. 17 12 12 20 6>/2 6'/2 Dec. 5 12-13 13 May 11 6'A-7 7 13 13 12 7 7 In effect Sept. 30, 1983 81/! 81/2 1. Applicable to advances when exceptional circumstances or practices involve In 1980 and 1981, the Federal Reserve applied a surcharge to short-term only a particular depository institution and to advances when an institution is adjustment credit borrowings by institutions with deposits of $500 million or more under sustained liquidity pressures. See section 201.3(b)(2) of Regulation A. that had borrowed in successive weeks or in more than 4 weeks in a calendar 2. Rates for short-term adjustment credit. For description and earlier data see quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, the following publications of the Board of Governors: Banking and Monetary 1980. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 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 DomesticN onfinancial Statistics • October 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 TTyypp dd ee ee pp oo oo ff ss dd iitt eepp iinn oo tt ss ee ii rr tt,, vv aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo ttee ssii rr tt vv ,, aa aa ll55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts1 $ 7 12/30/76 $0—S26.3 million 3 12/30/82 9[/i 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 16'/4 12/30/76 By original maturity Less than 2Vi years 3 3/31/83 Time and savings2-* 2Vi years or more 0 3/31/83 Savings 3 3/16/67 Eurocurrency liabilities Time4 All types 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 21/2 1/8/76 4 years or more 1 10/30/75 Over $5 million, by maturity 30-179 days 6 12/12/74 180 days to 4 years 2Vi 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual percent above the base used to calculate the marginal reserve in the statement Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was for 1976, table 13. Under provisions of the Monetary Control Act, depository reduced to the extent that foreign loans and balances declined. institutions include commercial banks, mutual savings banks, savings and loan 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97associations, credit unions, agencies and branches of foreign 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 7'/2 proved institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A 87 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 Sept. 30, 1983 Previous maximum In effect Sept. 30, 1983 Previous maximum Effective Effective Effective Effective date date date date 1 Savings 5'A 7/1/79 7/1/73 5Vi 7/1/79 5'A 2 Negotiable order of withdrawal accounts2.. 5'A 12/31/80 1/1/74 5'/4 12/31/80 5 1/1/74 Time accounts3 Fixed ceiling rates by maturity4 3 14-89 days' 5!/4 8/1/79 5 7/1/73 (6) (6) 4 7 9 5 6 8 9 6 2 4 2 1 0 ' / t t t t 2 o o o o d a t 6 2 8 2 o y V s y y y i 4 e e e t y o a a a y e r r r e s s s a 1 a 7 8 8 r r y s s 7 e 7 a r 5 6 7 7 3 ' ' / / 4 ' A 2 / 2 12 1 7 7 / 1 1 2 / / / / 1 1 3 1 1 / / / / / 7 7 7 7 8 3 3 4 3 0 5 7 5 5 < 3 » ' '/ / / ) 4 4 V 2 z 1 1 1 1 7 1 / / / 2 2 2 / / 1 1 1 1 1 / / / / / 7 7 7 7 7 3 3 0 0 0 6 6 6 7 7 1 3 } 1 / / A 4 / 2 : 12 1 / 1 1 2 ( ( / / 3 1 1 ' ') ) / / / 7 7 8 4 3 0 5 5 6 6 7 o V 3 ' / / 4 : 4 1 1 1 1 / / / 1 2 2 2 ( / 1 1 1 1 ') / / / / 7 7 7 7 0 3 0 0 10 8 years or more8 73/4 6/1/78 <6) 8 6/1/78 (6) 11 Issued to governmental units (all 73/4 maturities)10 6/1/78 12/23/74 6/1/78 73/4 12/23/74 12 IRAs and Keogh (H.R. 10) plans (3 years or more)10-" 6/1/78 73/4 7/6/77 6/1/78 73/4 7/6/77 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loans. 9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or 2. Federally insured commercial banks, savings and loan associations, cooper- more with minimum denominations of $ 1,000 had no ceiling; however, the amount ative banks, and mutual savings banks in Massachusetts and New Hampshire of such certificates that an institution could issue was limited to 5 percent of its were first permitted to offer negotiable order of withdrawal (NOW) accounts on total time and savings deposits. Sales in excess of that amount, as well as Jan. 1, 1974. Authorization to issue NOW accounts was extended to similar certificates of less than $1,000, were limited to the 61/: percent ceiling on time institutions throughout New England on Feb. 27, 1976, New York State on deposits maturing in 2Vi years or more. Effective Nov. 1, 1973, ceilings were Nov. 10, 1978, New Jersey on Dec. 28, 1979, and to similar institutions nationwide reimposed on certificates maturing in 4 years or more with minimum denominaeffective Dec. 31, 1980. Effective 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/>-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 • October 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 September 1983 (in percent) for commercial banks and thrifts were as follows: 1'/2-year to less than 2'/2-year time deposits. Effective Aug. 1. 1981, commercial Sept. 7, 9.21: Sept. 13, 9.04; Sept. 20, 8.99; and Sept. 27, 8.73. banks are authorized to pay interest on any variable ceiling nonnegotiable time deposit with an original maturity of 2Vi years to less than 4 years at a rate not to Six-month money market time deposits. Effective June 1. 1978. commercial exceed 'A 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 2'/> 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. I. 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 (I) 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 September 1983 (in percent) for commercial banks Bill rate or 4-week Commercial bank ceiling were as follows: Sept. 13, 10.40; and Sept. 27, 10.10; and for thrift institutions: average bill rate Sept. 13. 10.65; and Sept. 27, 10.35. 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 1/4 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 3A 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 '/» percentage point higher than that for commercial Above 7.25 percent, but below '/> of 1 percentage point plus the higher of banks. Effective Mar. 1, 1980, a temporary ceiling of ll3/4 percent was placed on 8.50 percent the bill rate or 4-week average bill rate these accounts at commercial banks and 12 percent on these accounts at savings 8.50 percent or above, but below 9 percent and loans. Effective June 2, 1980, the ceiling rates for these deposits at 8.75 percent commercial banks and savings and loans were increased V2 percentage point. The 8.75 percent or above lA 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 September 1983 for commercial banks and thrifts based on the bill rate were as follows: Sept. 7, 9.65: Sept. 13, 9.39; Sept. 20, 9.32: and Sept. 27, 9.09, and based on the 4-week average bill rate were as follows: Sept. 7, 9.69; Sept. 13, 9.59; Sept. 20, 9.53; and Sept. 27, 9.36. 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 3'/2 years or more that are not subject to IRAs and Keogh (H.R. 10) plans (18 months or more). Effective Dec. 1, 1981. interest rate ceilings. Such time deposits have no minimum denomination, but depository institutions are authorized to offer time deposits not subject to interest must be made available in a $500 denomination. Additional deposits may be made rate ceilings when the funds are deposited to the credit of, or in which the entire to the account during the first year without extending its maturity. Effective beneficial interest is held by, an individual pursuant to an IRA agreement or Apr. 1. 1983, the minimum maturity period for this category of deposits was Keogh (H.R. 10) plan. Such time deposits must have a minimum maturity of 18 reduced to 2'/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 A 89 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1983 TTyyppee ooff ttrraannssaaccttiioonn 11998800 11998811 11998822 Feb. Mar. Apr. May June July Aug. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 7,668 13,899 17,067 1,456 1,259 2,880 516 1,721 666 1,768 2 Gross sales 7,331 6,746 8,369 934 0 0 0 0 0 289 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,389 1,816 3,000 300 0 0 0 0 0 0 Others within I year 5 Gross purchases 912 317 312 0 0 0 173 0 156 0 6 Gross sales 0 23 0 0 0 0 0 0 0 0 7 Maturity shift 12,427 13,794 17,295 4,564 1,198 826 1,795 1,398 1,162 2,212 8 Exchange -18,251 -12,869 -14,164 -2,688 -900 0 -1,842 -916 0 -5,344 9 Redemptions 0 0 0 0 0 0 0 87 0 0 I to 5 years 10 Gross purchases 2,138 1,702 1,797 0 0 0 595 0 481 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -8,909 -10,299 -14,524 -4,564 -1,198 -684 -41 -1,398 -1,121 -2,212 13 Exchange 13,412 10,117 11,804 1,599 900 0 1,367 916 0 3,130 5 to 10 years 14 Gross purchases 703 393 388 0 0 0 326 0 215 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shift -3,092 -3,495 -2,172 229 0 -142 -1,754 0 -41 516 17 Exchange 2,970 1,500 2,128 650 0 0 300 0 0 1,300 Over 10 years 18 Gross purchases 811 379 307 0 0 0 108 0 124 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -426 0 -601 -229 0 0 0 0 0 -516 21 Exchange 1,869 1,253 234 439 0 0 175 0 0 914 All maturities 22 Gross purchases 12,232 16,690 19,870 1,456 1,259 2,880 1,719 1,721 1,642 1,768 23 Gross sales 7,331 6,769 8,369 934 0 0 0 0 0 289 24 Redemptions 3,389 1,816 3,000 300 0 0 0 87 0 0 Matched transactions 25 Gross sales 674,000 589,312 543,804 35,234 47,892 37,873 43,404 50,086 40,934 45,989 26 Gross purchases 675,496 589,647 543,173 38,204 47,724 36,205 45,001 47,783 43,037 44,480 Repurchase agreements 27 Gross purchases 113,902 79,920 130,774 6,697 3,526 7,671 0 7,891 7,816 2,263 28 Gross sales 113,040 78,733 130,286 6,697 3,526 3,984 3,687 6,730 8,978 0 29 Net change in U.S. government securities 3,869 9,626 8,358 3,192 1,090 4,899 -371 493 2,583 2,234 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 5 8 7 * 17 10 138 Repurchase agreements 33 Gross purchases 28,895 13,320 18,957 276 379 340 0 678 558 189 34 Gross sales 28,863 13,576 18,638 276 379 92 248 463 773 0 35 Net change in federal agency obligations 555 130 130 -5 -8 241 -248 198 -225 51 BANKERS ACCEPTANCES 36 Repurchase agreements, net 73 -582 1,285 0 0 704 -704 203 -203 209 37 Total net change in System Open Market Account 4,497 9,175 9,773 3,187 1,082 5,844 -1,322 893 2,155 2,493 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 • October 1983 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1983 1983 Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 July Aug. Sept. Consolidated condition statement ASSETS 1 Gold certificate account 11,128 11,128 11,128 11,128 11,128 11,131 11,128 11,128 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 415 409 416 433 444 411 415 443 Loans 4 To depository institutions 3,633 1,535 2,410 6,817 2,359 1,113 3,633 1,625 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 209 288 0 9 89 0 209 1,122 Federal agency obligations / Bought outright 8,742 8,742 8,737 8,737 8,737 8,880 8,742 8,737 8 Held under repurchase agreements 190 98 0 261 334 0 190 551 U.S. government securities Bought outright 9 Bills 60,953 61,004 61,518 65,651 61,921 60,982 60,953 62,898 10 Notes 63,044 63,044 63,044 63,044 63,044 63,958 63,044 63,044 11 Bonds 20,229 20,229 20,229 20,229 20,229 19,315 20,229 20,229 12 Total bought outright1 144,226 144,277 144,791 148,924 145,194 144,255 144,226 146,171 13 Held under repurchase agreements 2,263 4,391 0 578 4,176 0 2,263 9,252 14 Total U.S. government securities 146,489 148,668 144,791 149,502 149,370 144,255 146,489 155,423 15 Total loans and securities 159,263 159,331 155,938 165,326 160,889 154,248 159,263 167,458 16 Cash items in process of collection 8,158 11,108 9,181 8,648 8,298 8,635 8,158 7,490 17 Bank premises 553 553 553 553 553 552 553 552 Other assets 18 Denominated in foreign currencies2 3,617 3,620 3,632 3,633 3,637 3,839 3,617 3,721 19 All other3 3,366 3,639 4,122 3,818 4,067 4,188 3,366 4,084 20 Total assets 191,118 194,406 189,588 198,157 193,634 187,622 191,118 199,494 LIABILITIES 21 Federal Reserve notes 148,241 149,895 149,389 148,254 147,913 147,094 148,241 148,172 Deposits 22 To depository institutions 25,702 25,884 23,378 23,776 18,767 23,046 25,702 20,697 23 U.S. Treasury—General account 4,189 3,355 3,273 12,806 14,253 3,815 4,189 16,557 24 Foreign—Official accounts 248 259 243 186 205 369 248 297 25 Other 447 437 425 445 400 551 447 421 26 Total deposits 30,586 29,935 27,319 37,213 33,625 27,781 30,586 37,972 27 Deferred availability cash items 7,179 9,326 7,607 7,228 6,561 7,569 7,179 7,550 28 Other liabilities and accrued dividends4 2,056 2,095 2,109 2,290 2,346 1,989 2,056 2,466 29 Total liabilities 188,062 191,251 186,424 194,985 190,445 184,433 188,062 196,160 CAPITAL ACCOUNTS 30 Capital paid in 1,434 1,436 1,437 1,439 1,447 1,427 1,434 1,446 31 Surplus 1,359 1,359 1,359 1,359 1,359 1,359 1,359 1,359 32 Other capital accounts 263 360 368 374 383 403 263 529 33 Total liabilities and capital accounts 191,118 194,406 189,588 198,157 193,634 187,622 119911,,111188 119999,,449944 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 108,053 109,048 111,055 109,609 110,279 94,203 108,053 109,117 Federal Reserve note statement 35 Federal Reserve notes outstanding 171,346 171,490 172,212 172,644 173,014 169,213 171,346 173,093 36 LESS: Held by bank5 23,105 21,595 22,823 24,390 25,101 22,119 23,105 24,921 37 Federal Reserve notes, net 148,241 149,895 149,389 148,254 147,913 147,094 148,241 148,172 Collateral held against notes net: 38 Gold certificate account 11,128 11,128 11,128 11,128 11,128 11,131 11,128 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 132,495 134,149 133.643 132,508 132,167 131,345 132,495 132,426 42 Total collateral 148,241 149,895 149,389 148,254 147,913 147,094 148,241 148,172 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. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 July 29 Aug. 31 Sept. 30 1 Loans—Total 3,633 1,535 2,410 6,817 2,359 1,113 3,633 1,625 2 Within 15 days 3,583 1,432 2,309 6,786 2,321 1,045 3,583 1,553 3 16 days to 90 days 50 103 101 31 38 68 50 72 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 209 288 0 9 89 0 209 1,122 6 Within 15 days 209 288 0 9 89 0 209 1,122 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 146,489 148,668 144,791 149,502 149,370 144,255 146,489 155,423 10 Within 15 days' 9,715 12,183 6,211 10,388 10,341 4,116 9,715 13,007 11 16 days to 90 days 28,657 30,529 31,099 29,998 29,913 34,748 28,657 33,599 12 91 days to 1 year 43,975 41,814 43,339 44,974 44,974 43,218 43,975 44,925 13 Over 1 year to 5 years 32,863 32,863 32,863 32,863 32,863 33,108 32,863 32,713 14 Over 5 years to 10 years 13,690 13,690 13,690 13,690 13,690 11,874 13,690 13,690 15 Over 10 years 17,589 17,589 17,589 17,589 17,589 17,191 17,589 17,589 16 Federal agency obligations—Total 8,932 8,840 8,737 8,998 9,071 8,880 8,932 9,288 17 Within 15 days1 336 178 70 467 508 82 336 725 18 16 days to 90 days 713 782 762 626 648 814 713 648 19 91 days to 1 year 1,832 1,843 1,933 1,933 1,897 1,914 1,832 1,897 20 Over 1 year to 5 years 4,370 4,356 4,311 4,311 4,331 4,418 4,370 4,331 21 Over 5 years to 10 years 1,163 1,163 1,143 1,143 1,169 1,134 1,163 1,169 22 Over 10 years 518 518 518 518 518 ' 518 518 518 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • October 1983 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1983' IItteemm 1979' 1980r I98K 1982r Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July Aug. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 1 Total reserves2 36.80 37.15 37.13 37.61 37.80 37.71 2 Nonborrowed reserves 29.24 30.77 33.11 35.60 35.10 35.52 36.01 36.14 36.18 35.98 36.35 36.16 3 Required reserves.... 30.38 31.94 33.43 35.73 35.09 35.66 36.37 36.68 36.68 37.13 37.29 37.25 4 Monetary base3 139.3 151.1 158.8 171.1 171.9 173.8 176.1 177.3 178.8 180.3 181.1 182.1 Not seasonally adjusted 5 Total reserves2 31.26 33.4 34.61 36.96 37.61 35.97 36.06 36.91 36.64 36.79 37.34 37.08 6 Nonborrowed reserves 29.79 31.72 33.98 36.33 37.08 35.39 35.26 35.90 35.69 35.15 35.89 35.53 7 Required reserves 30.93 32.89 34.29 36.46 37.06 35.54 35.62 36.44 36.19 36.31 36.83 36.62 8 Monetary base3 141.5 154.4 161.9 174.4 173.2 171.8 173.6 176.3 177.8 179.6 181.7 181.8 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 38.42 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 41.60 41.35 41.32 39.36 37.60 38.17 37.83 37.93 38.44 38.21 12 Monetary base3 156.1 162.5 169.7 179.3 177.9 176.0 175.9 178.4 179.8 181.6 183.7 183.8 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. I, 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 2l/i years or more to less than 3'/: 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 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. MMaayy JJuunnee JJuullyy AAuugg.. Seasonally adjusted MEASURES' 1 Ml 389.0 414.1 440.6 478.2 507.4 511.7 515.5 516.7 ? M2 1,497.5 1,630.3 1,794.9 1,959.5 2,096.2 2,114.3 2,126.0' 2,136.9 3 M3 1,758.4 1,936.7 2,167.9 2,377.6 2,476.2' 2,498.7' 2,510.2' 2,528.5 4 L2 2,131.8 2.343.6 2,622.0 2,896.8 3,032.V n.a. n.a. n.a. SELECTED COMPONENTS 5 Currency 106.5 116.2 123.2 132.8 139.3 140.3 140.9 141.8 6 Travelers checks3 3.7 4.1 4.5 4.2 4.7 4.7 4.6 4.7 7 Demand deposits 262.0 266.8 236.4 239.8 242.5 244.0 245.8' 244.5 8 Other checkable deposits4 17.0 26.9 76.6 101.3 120.9 122.7 124.2 125.8 9 Savings deposits5 423.1 400.7 344.4 359.3 323.1 325.0 323.5 322.1 10 Small-denomination time deposits6 635.9 731.7 828.6 859.1 720.1 722.1 735.1' 748.0 11 Large-denomination time deposits7 222.2 258.9 302.6 333.8 299.2' 304. V 305.9 311.8 Not seasonally adjusted MEASURES' 1? Ml 398.8 424.7 452.1 491.0 499.8 508.3 514.7 511.6 13 M2 1,502.1 1,635.0 1,799.6 1,964.5 2,092.7 2,114.0 2,127.4' 2,129.2 14 VM3 1,766.1 1,944.9 2,175.9 2,385.3 2,471.5' 2,495.4' 2,508.1' 2,519.5 15 2,138.9 2,350.8 2,629.7 2.904.7 3,030.6' n.a. n.a. SELECTED COMPONENTS 16 Currency 108.2 118.3 125.4 135.2 138.9 140.3 142.0 142.1 17 Travelers checks3 3.5 3.9 4.3 4.0 4.5 4.9 5.2 5.1 18 Demand deposits 270.1 275.2 244.0 247.7 238.2 242.1 245.1 241.3 19 Other checkable deposits4 17.0 27.2 78.4 104.0 118.2 121.0 122.5 123.0 20 Overnight RPs and Eurodollars8 21.2 28.4 36.1 44.3 55.1 56.0' 52.7' 52.5 21 Savings deposits5 420.7 398.3 342.1 356.7 324.6 326.3 326.6 321.5 22 Money market deposit accounts n.a. n.a. n.a. 43.2 356.8 367.3 368.4 366.3 23 Small-denomination time deposits6 633.1 728.3 824.1 853.9 722.7 723.9 734.3' 746.0 Money market mutual funds 24 General purpose and broker/dealer 33.4 61.4 150.9 177.8 135.0 132.9 131.3 131.3 25 Institution only 9.5 14.9 36.0 43.1 35.7 34.7 34.0 33.9 26 Large-denomination time deposits7 226.0 262.4 305.9 336.5 298.0' 301.0' 302.3 310.5 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 Domestic Nonfinancial Statistics • October 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'' 11998811'' 11998822'' Mar. Apr. May June July Aug. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 62,757.8 80,858.7 90,914.4 102,206.1 103,022.3 107,273.3 106,799.4 107,884.4 111,538.1 2 Major New York City banks 25,156.1 33,891.9 37,932.9 44,327.4 46,025.6 46,891.2 46,445.4 46,978.0 48,373.3 3 Other banks 37,601.7 46,966.9 52,981.6 57,878.7 56,996.7 60,382.1 60,354.1 60,906.4 63,164.9 4 ATS-NOW accounts3 159.3 743.4 1,036.2 1,369.4 1,202.2 1,371.5 1,342.1 1,390.1 1,679.5 5 Savings deposits4 670.0 672.7 721.4 803.2 714.9 743.1 776.2 659.4 706.3 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 198.7 285.8 324.2 356.1 359.7 370.4 367.5 371.5 385.7 7 Major New York City banks 803.7 1,105.1 1,287.6 1,437.4 1,502.8 1,471.5 1,449.1 1,432.2 1,526.7 8 Other banks 132.2 186.2 211.1 225.9 222.9 234.3 233.4 236.5 245.3 9 ATS-NOW accounts3 9.7 14.0 14.5 15.6 13.9 15.2 14.7 15.0 17.9 10 Savings deposits4 3.6 4.1 4.5 5.7 5.1 5.4 5.6 4.8 5.2 Not seasonally adjusted DEBITS TO Demand deposits2 11 All insured banks 63,124.4 81,197.9 91,031.9 109,166.3 100,117.1 103,947.8 113,773.4 105,057.8 115,776.6 12 Major New York City banks 25,243.1 34,032.0 38,001.0 47,496.6 43,678.9 44,942.5 50,643.1 45,601.0 49,788.2 13 Other banks 37,881.3 47,165.9 53,030.9 61,669.7 56,438.1 59,005.4 63,130.4 59,456.8 65,988.3 14 ATS-NOW accounts3 158.0 737.6 1,027.1 1,398.4 1,405.3 1,353.1 1,420.7 1,325.3 1,468.9 15 MMDA5 0 0 0 454.9 545.8 505.6 714.3 603.3 655.5 16 Savings deposits4 669.8 672.9 720.0 820.4 779.9 722.2 779.3 661.6 694.3 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 202.3 286.1 325.0 391.8 347.9 368.1 393.1 357.6 406.7 18 Major New York City banks 814.8 1,114.2 1,295.7 1,561.1 1,446.9 1,471.0 1,563.6 1,383.5 1,621.6 19 Other banks 134.8 186.2 211.5 248.5 219.1 234.3 245.6 227.9 259.8 20 ATS-NOW accounts3 9.7 14.0 14.3 16.2 15.6 15.3 15.7 14.5 16.0 21 MMDA5 0 0 0 2.4 2.8 2.4 3.3 2.8 3.0 22 Savings deposits4 3.6 4.1 4.5 5.8 5.6 5.2 5.6 4.8 5.1 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 Banks1 Billions of dollars; averages of Wednesday figures 1981 1982 1983 1981 1982 1983 CCaatteeggoorryy Dec.2 Dec. May June Julyr Aug. Dec.2 Dec. May June July' Aug. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities3 1,316.3 1,412.1 1,474.4 1,488.0 1,499.9 1,513.2 1,326.1 1,422.5 1,468.1 1,485.6 1,493.6 1,507.0 2 U.S. Treasury securities 111.0 130.9 166.1 171.2 172.9 174.4 111.4 131.5 165.3 171.6 171.6 172.4 3 Other securities 231.4 239.1 245.0 246.2 246.1 247.8 232.8 240.6 245.2 245.9 244.8 247.0 4 Total loans and leases3 973.9 1,042.0 1,063.3 1,070.6 1,080.9 1,091.0 981.8 1,050.4 1,057.6 1,068.0 1,077.2 1,087.5 5 Commercial and industrial loans 358.0 392.4 393.0 395.0 399.2 402.7 360.1 394.7 393.1 394.4 397.9 400.2 6 Real estate loans 285.7 303.2 313.6 317.0 319.4 322.5 286.8 304.1 312.4 315.4 318.4 322.2 7 Loans to individuals 185.1 191.8 197.9 199.8 203.1 205.5 186.4 193.1 196.7 199.0 202.1 205.7 8 Security loans 21.9 24.7 23.4 22.3 23.7 22.9 22.7 25.5 22.5 23.5 23.1 23.6 9 Loans to nonbank financial institutions 30.2 31.1 31.1 31.1 31.2 30.9 31.2 32.1 30.7 30.7 30.6 30.7 10 Agricultural loans 33.0 36.1 36.9 36.7 36.8 37.2 33.0 36.1 36.7 36.9 37.2 37.6 11 Lease financing receivables.... 12.7 13.1 13.1 13.0 12.9 12.9 12.7 13.1 13.1 13.0 12.9 12.9 12 All other loans 47.2 49.7 54.4 55.7 54.6 56.5 49.2 51.7 52.5 55.2 55.0 54.6 MEMO: 13 Total loans and securities plus loans sold3-4 1,319.1 1,415.0 1,477.2 1,490.7 1,502.6 1,515.7 1,328.9 1,425.4 1,470.9 1,488.3 1,496.3 1,509.6 14 Total loans plus loans sold3 4 .... 976.7 1,045.0 1,066.1 1,073.3 1,083.5 1,093.5 984.7 1,053.3 1,060.4 1,070.8 1,079.9 1,090.1 15 Total loans sold to affiliates3 4.... 2.8 2.9 2.8 2.7 2.7 2.6 2.8 2.9 2.8 2.7 2.7 2.6 16 Commercial and industrial loans plus loans sold4 360.2 394.6 395.1 397.2 401.3 404.7 362.3 396.9 395.3 396.5 400.0 402.2 17 Commercial and industrial loans sold4 2.2 2.3 2.2 2.1 2.1 2.0 2.2 2.3 2.2 2.1 2.1 2.0 18 Acceptances held 8.9 8.5 8.2 8.0 8.5 8.5 9.8 9.5 7.7 8.1 8.4 8.2 19 Other commercial and industrial loans 349.1 383.8 384.8 387.0 390.7 394.1 350.3 385.2 385.4 386.3 389.5 392.0 20 To U.S. addressees5 334.9 373.5 371.8 373.7 378.2 381.6 334.3 372.7 373.4 374.2 377.4 379.8 21 To non-U.S. addressees 14.2 10.3 13.0 13.3 12.5 12.5 16.1 12.4 12.0 12.1 12.1 12.2 22 Loans to foreign banks 19.0 13.5 15.1 15.0 14.4 14.5 20.0 14.5 14.5 14.5 14.0 14.0 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 domestic offices to IBFs are available in the Board's G.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 • October 1983 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1981 1982 1983 SSoouurrccee Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug. Total nondeposit funds 1 Seasonally adjusted2 96.5 81.1 87.3 82.8 72.8 75.8 75.3 79.7 90.3 87.8' 75.9 81.4 2 Not seasonally adjusted 98.0 83.3 89.3 84.3 74.3 76.7 76.0 78.3 89.8 89.4' 77.9 85.6 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 111.6 126.2 129.2 127.5 131.8 134.7 134.8 139.3 145.3 140.1 132.0 130.2 4 Not seasonally adjusted 113.1 128.4 131.2 128.9 133.2 135.6 135.5 137.8 144.8 141.8 134.1 134.4 5 Net balances due to foreign-related institutions, not seasonally adjusted -17.9 -47.9 -44.8 -47.6 -61.9 -61.9 -62.4 -62.5 -57.8 -55.1 -58.8 -51.4 6 Loans sold to affiliates, not seasonally adjusted4 2.8 2.8 2.9 2.9 3.0 3.0 3.0 3.0 2.8 2.7 2.7 2.6 MEMO 7 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted5 -22.5 -40.4 -38.3 -39.8 -50.2 -50.6 -52.9 -52.6 -48.7 -49.2 -51.0 -45.1 8 Gross due from balances 54.9 69.8 69.9 72.4 79.4 78.9 79.8 80.1 76.3 75.8 77.5 73.7 9 Gross due to balances 32.4 29.4 31.6 32.6 29.2 28.3 26.9 27.5 27.6 26.6 26.5 28.6 10 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted6 4.3 -7.5 -6.4 -8.7 -12.0 -11.3 -9.4 -9.8 -9.1 -5.9 -7.8 -6.3 11 Gross due from balances 48.1 53.9 53.5 55.3 57.2 55.7 56.1 55.9 55.7 53.9 55.2 53.5 12 Gross due to balances 52.4 46.4 47.1 46.6 45.2 44.4 46.7 46.1 46.7 48.0 47.4 47.2 Security RP borrowings 13 Seasonally adjusted' 59.0 69.0 71.5 71.0 72.2 74.3 74.7 79.3 84.6 81.4 75.5 74.2 14 Not seasonally adjusted 59.2 69.8 72.1 71.1 72.2 73.7 73.9 76.3 82.6 81.5 76.1 76.9 U.S. Treasury demand balances8 15 Seasonally adjusted 12.2 14.4 10.6 11.9 15.7 8.8 12.5 13.5 11.3 13.0 24.0 20.5 16 Not seasonally adjusted 11.1 16.4 7.8 10.8 16.3 10.2 13.2 14.2 12.5 13.2 21.8 16.3 Time deposits, $100,000 or more9 17 Seasonally adjusted 324.1 376.6 360.6 347.3 319.2 303.0 296.0 296.2 287.0 287.5 285.8 285.2 18 Not seasonally adjusted 330.4 364.9 361.7 353.9 325.4 310.5 300.7 293.0 285.0 283.5 281.5 284.0 IBF ADJUSTMENTS FOR SELECTED ITEMS10 19 22.4 33.1 33.3 33.9 34.2 2222200000 11111.....77777 22222.....44444 22222.....44444 22222.....44444 22222.....44444 2222211111 2222200000.....77777 3333300000.....77777 3333300000.....99999 3333311111.....55555 3333311111.....88888 2222222222 33333.....11111 55555.....44444 55555.....55555 55555.....88888 55555.....88888 2222233333 Item 10 1111177777.....66666 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 (lBFs). 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 Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept. DOMESTICALLY CHARTERED COMMERCIAL BANKS' 1 Loans and securities, excluding interbank 1,347.0 1,370.4 1,370.8 1,373.7 1,392.2 1,404.0 1,411.9 1,435.2 1,437.5 1,457.1 1,466.0 2 Loans, excluding interbank 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 1,049.1 3 Commercial and industrial 355.4 357.9 355.6 356.3 358.6 358.5 357.3 360.6 361.7 363.4 364.6 4 Other 635.0 642.9 638.2 635.8 643.7 646.8 650.8 664.5 666.9 679.4 684.5 5 U.S. Treasury securities 122.2 129.0 136.0 141.4 150.6 155.5 160.9 166.0 165.1 167.5 171.2 6 Other securities 234.4 240.5 241.6 240.8 239.9 243.9 244.1 244.1 243.9 246.8 245.8 7 Cash assets, total 169.7 184.4 167.8 184.7 168.9 170.1 164.5 176.9 168.7 176.9 160.0 8 Currency and coin 19.0 23.0 20.4 20.3 19.9 20.4 20.3 21.3 20.7 21.0 20.8 9 Reserves with Federal Reserve Banks 22.0 25.4 23.9 25.3 20.5 23.9 22.4 18.8 20.6 22.5 15.4 10 Balances with depository institutions . 64.6 67.6 67.7 71.6 67.1 66.1 65.6 69.7 67.1 69.0 66.7 11 Cash items in process of collection ... 64.1 68.4 55.9 67.5 61.5 59.6 56.3 67.1 60.3 64.4 56.9 12 Other assets2 241.8 265.3 260.1 263.6 257.9 252.4 248.3 253.2 254.5 257.3 252.4 13 Total assets/total liabilities and capital ... 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 1,878.4 14 Deposits 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 1,420.1 1,408.0 15 Demand 338.1 363.9 324.0 337.9 333.4 329.2 324.5 344.4 334.2 344.7 328.1 16 Savings 244.9 296.4 361.5 395.2 419.2 426.9 440.2 445.3 447.5 449.0 448.8 17 Time 733.9 701.5 655.1 635.2 621.6 611.9 606.1 613.1 614.8 626.4 631.2 18 Borrowings 198.1 215.1 221.6 218.0 211.3 224.0 214.1 221.2 217.5 217.2 217.8 19 Other liabilities 109.3 109.2 106.4 106.0 103.5 102.3 104.7 104.3 105.5 107.6 107.1 20 Residual (assets less liabilities) 134.3 133.9 130.1 129.6 130.0 132.0 135.1 137.0 141.1 146.2 145.5 MEMO: 21 U.S. Treasury note balances included in borrowing 2.4 10.7 17.1 7.0 9.6 17.8 2.7 19.3 19.3 14.8 20.8 22 Number of banks 14,782 14,787 14,780 14,812 14,819 14,823 14,817 14,826 14,785 14,795 14,804 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and securities, excluding interbank 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 1,525.4 24 Loans, excluding interbank 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 1,101.9 25 Commercial and industrial 398.9 396.5 393.0 392.9 396.5 394.1 392.3 395.9 398.3 401.1 403.3 26 Other 653.2 658.4 652.4 650.0 658.6 661.8 664.7 678.7 680.0 693.2 698.6 27 U.S. Treasury securities 125.7 132.8 139.5 145.1 155.3 160.3 166.1 171.3 170.3 172.7 176.1 28 Other securities 235.9 242.1 243.2 242.4 241.5 245.5 245.8 245.7 245.6 248.4 247.5 29 Cash assets, total 181.2 200.7 183.7 200.5 185.5 186.3 180.3 193.5 185.2 193.3 174.7 30 Currency and coin 19.0 23.0 20.4 20.3 19.9 20.4 20.3 21.3 20.7 21.1 20.9 31 Reserves with Federal Reserve Banks 23.4 26.8 25.3 26.7 22.0 25.4 23.8 20.0 21.9 24.0 16.6 32 Balances with depository institutions . 74.4 81.4 81.1 84.9 81.0 79.8 78.9 84.0 81.2 82.8 79.3 33 Cash items in process of collection ... 64.3 69.4 56.9 68.6 62.6 60.7 57.3 68.2 61.4 65.4 58.0 34 Other assets2 323.3 341.7 333.2 330.2 325.4 317.7 309.5 318.1 318.7 324.6 320.9 35 Total assets/total liabilities and capital ... 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 2,033.4 2,021.0 36 Deposits 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 1,461.4 1,448.8 37 Demand 344.9 376.2 335.9 350.2 345.7 341.1 336.4 356.4 346.4 356.6 340.0 38 Savings 245.1 296.7 361.9 395.6 419.7 427.3 440.7 445.7 448.0 449.5 449.3 39 Time 768.0 736.7 687.7 666.8 654.1 642.6 636.0 641.6 643.8 655.3 659.5 40 Borrowings 267.0 278.3 283.5 276.0 269.9 281.3 269.5 278.2 277.9 280.5 282.6 41 Other liabilities 156.6 148.4 143.5 140.4 141.1 138.7 137.9 142.3 139.1 143.4 142.3 42 Residual (assets less liabilities) 136.6 135.8 132.0 131.5 131.9 133.9 137.0 138.9 143.0 148.1 147.3 MEMO: 43 U.S. Treasury note balances included in borrowing 2.4 10.7 17.1 7.0 9.6 17.8 2.7 19.3 19.3 14.8 20.8 44 Number of banks 15,318 15,329 15,332 15,366 15,376 15,390 15,385 15,396 15,359 15,370 15,382 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 • October 1983 1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $750 Million or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 3 1p Sept. IP Sept. 14P Sept. 21 p Sept. 28p 1 Cash items in process of collection 15,948 14,191 15,675 14,689 17,099 14,667 14,492 14,584 14,313 2 Demand deposits due from banks in the United States.. 1,194 1,163 1,149 1,133 1,020 1,163 1,105 1,122 1,005 3 All other cash and due from depository institutions .... 7,014 8,569 5,397 4,683 6,303 8,348 5,565 5,664 3,477 4 Total loans and securities 144,824 143,069 143,861 142,695 144,843 143,228 142,305 142,336 141,575 Securities 5 U.S. Treasury securities 6 Trading account 7 Investment account, by maturity 8,108 8,253 8,438 8,289 8,843 8,905 8,998 8,968 8,975 8 One year or less 2,452 2,481 2,464 2,458 2,3% 2,391 2,360 2,343 2,708 9 Over one through five years 4,851 5,034 5,517 5,373 5,986 5,978 5,931 5,929 5,517 10 Over five years 805 738 457 458 461 536 708 696 750 11 Other securities 12 Trading account 13 Investment account 14,889 15,046 14,997 14,820 14,833 14,760 14,699 14,695 14,659 14 U.S. government agencies 1,547 1,544 1,533 1,586 1,592 1,578 1,578 1,578 1,500 IS States and political subdivisions, by maturity 12,554 12,713 12,657 12,428 12,435 12,385 12,328 12,338 12,380 16 One year or less 2,010 2,103 2,045 1,835 1,821 1,778 1,702 1,696 1,684 17 Over one year 10,544 10,610 10,612 10,593 10,614 10,607 10,626 10,642 10,695 18 Other bonds, corporate stocks and securities 788 789 807 806 806 796 793 778 780 Loans 19 Federal funds sold1 10,437 10,217 10,700 10,457 10,672 9,927 9,910 8,654 9,872 20 To commercial banks 4,965 4,688 5,418 5,300 5,467 4,542 5,132 4,537 5,093 21 To nonbank brokers and dealers in securities 3,815 4,011 3,856 3,796 3,670 3,702 3,428 3,057 3,459 22 To others 1,657 1,517 1,425 1,362 1,535 1,683 1,350 1,060 1,320 23 Other loans, gross 115,396 113,566 113,728 113,134 114,536 113,708 112,786 114,126 112,136 24 Commercial and industrial 59,499 58,955 58,270 58,584 58,029 58,100 57,791 57,934 56,932 25 Bankers acceptances and commercial paper 1,171 1,040 975 1,195 950 1,008 1,069 1,132 1,064 26 All other 58,327 57,915 57,294 57,390 57,080 57,092 56,722 56,802 55,868 27 U.S. addressees 56,772 56,333 55,725 55,791 55,474 55,516 55,166 55,230 54,265 28 Non-U.S. addressees 1,555 1,582 1,569 1,598 1,606 1,576 1,556 1,572 1,602 29 Real estate 19,530 19,598 19,938 19,998 20,131 20,053 20,114 20,248 20,284 30 To individuals for personal expenditures 11,964 12,038 12,069 12,096 12,182 12,233 12,366 12,452 12,494 To financial institutions 31 Commercial banks in the United States 1,787 1,625 1,582 1,720 1,906 1,829 1,614 1,869 1,591 32 Banks in foreign countries 2,909 2,617 2,510 2,516 2,737 2,767 2,524 2,551 2,597 33 Sales finance, personal finance companies, etc 3,903 3,811 3,692 3,663 3,820 3,868 3,729 3,883 3,831 34 Other financial institutions 4,390 4,510 4,430 4,321 4,373 4,421 4,336 4,353 4,385 35 To nonbank brokers and dealers in securities 5,892 4,984 5,781 4,861 6,144 4,969 4,620 5,780 4,729 36 To others for purchasing and carrying securities2 .... 644 654 649 608 635 609 577 594 586 37 To finance agricultural production 432 432 419 393 422 428 434 466 452 38 All other 4,445 4,342 4,388 4,374 4,156 4,431 4,680 3,995 4,253 39 LESS: Unearned income 1,417 1,438 1,422 1,430 1,419 1,433 1,442 1,464 1,453 40 Loan loss reserve 2,588 2,576 2,579 2,575 2,622 2,638 2,647 2,642 2,613 41 Other loans, net 111,390 109,552 109,726 109,129 110,494 109,636 108,697 110,020 108,069 42 Lease financing receivables 2,075 2,072 2,078 2,080 2,074 2,060 2,060 2,057 2,057 43 All other assets 61,434 59,905 60,793 59,450 59,108 60,318 64,728 61,909 61,872 44 Total assets 232,488 228,968 228,952 224,730 230,447 229,783 230,256 227,674 224,299 Deposits 45 Demand deposits 47,866 44,647 46,803 45,131 48,048 47,612 46,295 45,076 44,068 46 Mutual savings banks 364 340 373 286 332 343 232 329 240 47 Individuals, partnerships, and corporations 31,959 29,448 32,299 30,490 32,065 32,463 31,764 30,717 29,896 48 States and political subdivisions 710 598 692 559 586 660 580 666 629 49 U.S. government 695 539 226 506 172 324 684 363 446 50 Commercial banks in the United States 4,333 4,722 4,635 4,346 5,320 4,446 3,766 4,483 3,988 51 Banks in foreign countries 4,610 4,723 4,334 4,492 4,654 5,121 5,264 4,132 4,428 52 Foreign governments and official institutions 841 786 794 912 1,117 1,050 752 719 518 53 Certified and officers' checks 4,354 3,491 3,450 3,540 3,802 3,203 3,253 3,667 3,923 54 Time and savings deposits 73,102 73,127 73,507 73,027 73,285 73,262 73,158 72,304 72,359 55 Savings 29,281 29,114 28,940 28,847 28,872 29,230 29,323 29,289 29,417 56 Individuals and nonprofit organizations 26,636 26,468 26,300 26,189 26,214 26,504 26,586 26,539 26,638 57 Partnerships and corporations operated for profit .. 2,394 2,414 2,420 2,442 2,448 2,499 2,499 2,532 2,544 58 Domestic governmental units 212 198 184 177 171 192 198 179 201 59 All other 39 34 35 38 39 35 40 38 34 60 Time 43,821 44,013 44,567 44,180 44,413 44,032 43,835 43,016 42,942 61 Individuals, partnerships, and corporations 37,508 37,590 38,279 37,979 38,262 37,948 37,841 37,132 37,023 62 States and political subdivisions 2,199 2,210 2,233 2,235 2,096 2,052 2,010 1,983 2,003 63 U.S. government 22 22 22 24 24 24 22 22 22 64 Commercial banks in the United States 2,740 2,758 2,583 2,510 2,584 2,632 2,593 2,529 22,,555511 65 Foreign governments, official institutions, and banks 1,352 1,432 1,450 1,433 1,447 1,376 11,,336688 11,,334488 1,343 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 450 1,050 1,205 3,350 67 Treasury tax-and-loan notes 2,317 2,119 2,432 2,755 2,790 1,415 2,186 4,035 4,034 68 All other liabilities for borrowed money3 54,112 54,074 50,296 48,718 49,473 53,978 53,539 48,012 48,823 69 Other liabilities and subordinated notes and debentures . 35,027 35,278 36,163 35,327 36,022 33,645 33,998 35,200 35,429 70 Total liabilities 212,874 209,245 209,201 204,958 210,668 209,912 210,381 207,976 204,713 71 Residual (total assets minus total liabilities)4 19,614 19,723 19,751 19,772 19,779 19,872 19,874 19,698 19,586 1. Includes securities purchased under agreements to resell. 4. Not a measure of equity capital for use in capital adequacy analysis or for 2. Other than financial institutions and brokers and dealers. other analytic uses. 3. Includes federal funds purchased and securities sold under agreements to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.27 LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1 Billion or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt Aug 3 Aug. 10 Aug. 17 Aug. 24 Aug. 3IP Sept. 7p Sept. 14 p Sept. 21 p Sept. 28p 1 Cash items in process of collection 50,268 43,090 47,945 43,897 50,404 52,192 48,882 46,292 44,579 2 Demand deposits due from banks in the United States.. 7,424 6,645 7,347 6,749 7,820 7,780 7,509 7,727 7,363 3 All other cash and due from depository institutions .... 34,492 35,051 32,649 32,718 35,447 36,521 34,810 33,857 29,454 4 Total loans and securities 672,010 666,098 668,026 666,443 670,862 671,386 668,254 667,620 669,408 Securities 5 U.S. Treasury securities 51,564 50,337 52,075 51,615 51,401 52,674 53,485 52,101 52,100 6 Trading account 9,837 8,240 9,736 9,229 8,384 9,211 9,928 8,586 8,297 7 Investment account, by maturity 41,727 42,097 42,338 42,386 43,017 43,463 43,557 43,515 43,804 8 One year or less 14,460 14,382 13,591 13,684 13,890 14,168 13,940 13,761 14,307 9 Over one through five years 24,597 25,116 26,288 26,235 26,663 26,758 26,893 27,046 26,727 10 Over five years 2,670 2,599 2,460 2,466 2,464 2,536 2,724 2,708 2,770 11 Other securities 84,352 84,052 85,038 84,111 84,421 84,732 84,079 84,429 84,178 12 Trading account 6,416 6,045 7,059 6,322 6,651 6,962 6,420 6,581 6,454 13 Investment account 77,936 78,006 77,979 77,788 77,769 77,770 77,659 77,848 77,723 14 U.S. government agencies 16,445 16,393 16,468 16,551 16,389 16,438 16,271 16,317 16,132 15 States and political subdivisions, by maturity 57,988 58,094 58,007 57,644 57,756 57,678 57,731 57,889 57,948 16 One year or less 7,826 7,861 7,900 7,569 7,640 7,786 7,739 7,746 7,729 17 Over one year 50,162 50,233 50,108 50,075 50,116 49,891 49,992 50,143 50,219 18 Other bonds, corporate stocks and securities 3,503 3,519 3,503 3,593 3,624 3,654 3,656 3,641 3,643 Loans 19 Federal funds sold1 44,049 41,543 39,756 40,406 41,216 40,065 38,363 36,092 39,436 20 To commercial banks 33,276 30,869 28,356 29,611 30,541 29,173 28,266 26,198 29,096 21 To nonbank brokers and dealers in securities 7,526 7,584 8,618 8,048 7,730 7,683 7,376 7,027 7,672 22 To others 3,246 3,090 2,782 2,747 2,946 3,208 2,721 2,867 2,668 23 Other loans, gross 505,436 503,573 504,564 503,724 507,293 507,476 505,893 508,582 507,202 24 Commercial and industrial 215,299 214,572 213,736 213,860 214,063 214,100 213,532 214,634 213,348 25 Bankers acceptances and commercial paper 4,268 3,762 3,656 3,977 3,955 4,048 4,218 3,916 3,653 26 All other 211,030 210,810 210,081 209,883 210,108 210,052 209,314 210,718 209,696 27 U.S. addressees 204,094 203,929 203,186 203,006 203,199 203,186 202,471 203,807 202,775 28 Non-U.S. addressees 6,936 6,881 6,895 6,877 6,909 6,876 6,843 6,911 6,920 29 Real estate 135,575 135,984 136,485 136,641 137,078 137,224 137,592 137,939 138,142 30 To individuals for personal expenditures 77,528 77,781 78,104 78,460 79,033 79,093 79,458 79,845 80,290 To financial institutions 31 Commercial banks in the United States 7,491 7,178 7,302 7,551 7,496 7,395 6,732 7,181 6,959 32 Banks in foreign countries 8,272 7,972 7,759 7,672 8,312 8,650 8,442 8,247 8,492 33 Sales finance, personal finance companies, etc 9,420 9,194 9,079 9,094 9,287 9,391 9,155 9,275 9,350 34 Other financial institutions 16,283 16,375 16,283 15,956 15,954 16,199 16,340 16,245 16,163 35 To nonbank brokers and dealers in securities 8,842 8,143 9,234 7,990 9,421 8,911 7,788 9,231 8,290 36 To others for purchasing and carrying securities2 .... 3,098 3,106 3,096 3,074 3,182 3,135 3,140 3,187 3,206 37 To finance agricultural production 7,094 7,140 7,122 7,085 7,124 7,166 7,125 7,186 7,147 38 All other 16,534 16,126 16,364 16,338 16,342 16,262 16,589 15,612 15,816 39 LESS: Unearned income 5,040 5,067 5,042 5,059 5,034 5,040 5,054 5,071 5,048 40 Loan loss reserve 8,350 8,340 8,365 8,353 8,435 8,521 8,512 8,512 8,461 41 Other loans, net 492,046 490,165 491,157 490,312 493,823 493,915 492,327 494,998 493,693 42 Lease financing receivables 10,889 10,882 10,939 10,944 10,948 10,957 10,916 10,919 10,927 43 All other assets 143,127 143,321 142,779 139,668 140,125 141,418 145,287 143,228 142,450 44 Total assets 918,210 905,086 909,686 900,420 915,606 920,255 915,656 909,643 904,182 Deposits 45 Demand deposits 179,472 169,240 174,505 166,490 177,389 181,364 179,118 170,580 167,698 46 Mutual savings banks 796 705 742 614 711 766 553 633 557 47 Individuals, partnerships, and corporations 134,492 129,359 134,212 126,855 134,789 137,965 137,874 130,820 128,737 48 States and political subdivisions 5,309 4,350 4,844 4,541 4,931 4,797 4,735 5,098 4,686 49 U.S. government 3,221 1,878 1,091 2,078 995 1,380 2,600 1,847 1,610 50 Commercial banks in the United States 20,146 18,361 19,409 18,050 20,049 21,231 18,712 18,569 17,960 51 Banks in foreign countries 5,923 6,085 5,692 5,748 5,971 6,532 6,578 5,396 5,660 52 Foreign governments and official institutions 1,065 996 992 1,109 1,361 1,312 970 894 732 53 Certified and officers' checks 8,520 7,506 7,522 7,495 8,582 7,380 7,098 7,321 7,754 54 Time and savings deposits 416,182 416,206 417,620 418,146 419,019 420,218 418,706 417,298 417,904 55 Savings 175,006 174,256 173,423 172,444 172,768 174,651 174,040 172,634 172,470 56 Individuals and nonprofit organizations 156,366 155,492 154,597 153,499 153,814 155,484 154,915 153,487 153,200 57 Partnerships and corporations operated for profit .. 17,483 17,584 17,649 17,771 17,786 17,968 17,906 17,945 18,086 58 Domestic governmental units 1,100 1,125 1,120 1,115 1,124 1,156 1,176 1,160 1,145 59 All other 57 54 56 58 45 42 43 42 38 60 Time 241,176 241,950 244,197 245,702 246,250 245,567 244,666 244,663 245,434 61 Individuals, partnerships, and corporations 214,371 214,607 216,703 217,944 218,694 217,983 217,048 217,106 218,042 62 States and political subdivisions 16,597 16,955 17,033 17,270 17,065 17,058 17,062 17,198 17,179 63 U.S. government 327 314 314 318 320 310 307 302 270 64 Commercial banks in the United States 6,694 6,844 6,833 6,822 6,815 6,951 66,,994455 66,,778822 66,,880033 65 Foreign governments, official institutions, and banks 3,187 3,230 3,314 3,346 3,355 3,264 33,,330044 33,,227755 33,,114400 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 1,412 146 392 363 2,409 446 1,280 5,638 1,105 67 Treasury tax-and-loan notes 10,753 8,797 9,996 11,012 11,162 6,730 7,806 15,312 15,159 68 All other liabilities for borrowed money3 162,587 162,645 157,022 155,615 156,931 163,997 160,859 153,366 115544,,221166 69 Other liabilities and subordinated notes and debentures 86,701 86,771 89,058 87,672 87,311 85,955 86,326 86,157 86,885 70 Total liabilities 857,108 843,805 848,594 839,298 854,222 858,749 854,096 848,350 842,966 71 Residual (total assets minus total liabilities)4 61,102 61,281 61,092 61,122 61,384 61,505 61,561 61,293 61,215 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 Domestic Nonfinancial Statistics • October 1983 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 3 1p Sept. IP Sept. 14 p Sept. 21 p Sept. 28p 1 Cash items in process of collection 47,265 40,568 45,214 41,189 47,487 48,752 45,706 43,352 41,997 2 Demand deposits due from banks in the United States.. 6,864 6,110 6,763 6,265 7,234 7,130 6,870 7,064 6,771 3 All other cash and due from depository institutions .... 31,467 31,927 29,550 29,569 32,437 33,431 31,888 30,668 26,412 4 Total loans and securities1 624,634 618,665 620,477 619,022 623,027 623,113 619,904 619,580 621,120 Securities 5 U.S. Treasury securities2 46,848 45,552 47,286 46,746 46,618 47,798 48,587 47,272 47,159 6 Trading account2 9,751 8,153 9,609 9,076 8,302 9,047 9,765 8,421 8,144 7 Investment account, by maturity 37,097 37,399 37,677 37,670 38,316 38,751 38,822 38,851 39,014 8 One year or less 12,655 12,573 11,948 12,057 12,211 12,481 12,210 12,085 12,634 9 Over one through five years 22,027 22,483 23,523 23,400 23,923 23,981 24,135 24,304 23,854 10 Over five years 2,415 2,343 2,206 2,213 2,182 2,289 2,476 2,462 2,526 11 Other securities2 76,657 76,404 77,237 76,411 76,682 76,928 76,305 76,533 76,368 12 Trading account2 6,276 5,939 6,830 6,224 6,522 6,842 6.296 6,395 6,309 13 Investment account 70.382 70,465 70,407 70,186 70,160 70,086 70,008 70,138 70,058 14 U.S. government agencies 14,832 14,786 14,846 14,920 14,781 14,770 14,636 14,637 14,470 13 States and political subdivisions, by maturity 52,434 52,540 52,428 52,064 52,150 52,054 52,108 52,246 52,324 16 One year or less 7,171 7,206 7,235 6,908 6,956 7,106 7,058 7,067 7,084 17 Over one year 45,263 45,334 45,194 45,156 45,194 44,948 45,050 45,179 45,241 18 Other bonds, corporate stocks and securities 3,116 3,139 3,132 3,202 3,230 3,262 3,264 3,254 3,264 Loans 19 Federal funds sold3 39,940 37,470 35,795 36,651 37,218 35,713 33,873 32,288 35,610 20 To commercial banks 29,620 27,222 24,890 26,328 27,045 25,312 24,362 23,005 25,962 21 To nonbank brokers and dealers in securities 7,098 7,189 8,148 7,601 7,253 7,219 6,821 6,445 7,008 22 To others 3,222 3,060 2,757 2,722 2,919 3,182 2,689 2,838 2,640 23 Other loans, gross 473,557 471,624 472,538 471,594 474,949 475,205 473,672 476,034 474,461 24 Commercial and industrial 203,373 202,679 201,922 202,018 202,138 202,226 201,781 202,752 201,427 25 Bankers' acceptances and commercial paper 3,974 3,475 3,381 3,735 3,729 3,849 4,032 3,723 3,466 26 All other 199,399 199,204 198,540 198,283 198,409 198,377 197,749 199,029 197,960 27 U.S. addressees 192,597 192,444 191.765 191,531 191,622 191,633 191,027 192,241 191.160 28 Non-U.S. addressees 6,802 6,760 6,776 6,752 6,787 6,744 6,722 6,788 6,800 29 Real estate 127,172 127,502 127,926 128,095 128,503 128,571 128,876 129,180 129,317 30 To individuals for personal expenditures 68,781 68,993 69,278 69,581 70,086 70,133 70,457 70,806 71,195 To financial institutions 31 Commercial banks in the United States 7,031 6,767 6,831 7,071 7,023 6,928 6,320 6,687 6,412 32 Banks in foreign countries 8,201 7,860 7,678 7,583 8,225 8,568 8,349 8,168 8,395 33 Sales finance, personal finance companies, etc 9,213 8,994 8,870 8,880 9,066 9,184 8,942 9,064 9,139 34 Other financial institutions 15,522 15,630 15,544 15,213 15,212 15,462 15,596 15,492 15,430 35 To nonbank brokers and dealers in securities 8,777 8,060 9,161 7,916 9,351 8,842 7,725 9,145 8,199 36 To others for purchasing and carrying securities4 .... 2,839 2,842 2,834 2,812 2,918 2,865 2,874 2,928 2,936 37 To finance agricultural production 6,881 6,919 6,902 6,870 6,909 6,897 6,908 6,972 6,936 38 All other 15,767 15,377 15,591 15,554 15,519 15,527 15,844 14,841 15,076 39 LESS: Unearned income 4,453 4,478 4,449 4,463 4,445 4,451 4,462 4,478 4,457 40 Loan loss reserve 7,915 7,906 7,930 7,917 7,995 8,080 8,069 8,070 8,021 41 Other loans, net 461,189 459,239 460,159 459,214 462,508 462,673 461,140 463,486 461,983 42 Lease financing receivables 10,480 10,471 10,527 10,529 10,531 10,538 10,495 10,496 10,502 43 All other assets5 138,771 138,955 138,590 135,598 135,740 137,200 141,169 138,974 138,164 44 Total assets 859,482 846,696 851,120 842,173 856,457 860,163 856,033 850,134 844,967 Deposits 45 Demand deposits 166,591 156,992 162,364 154,487 164,678 168,108 166,136 157,973 155,738 46 Mutual savings banks 759 680 713 589 682 735 533 609 534 47 Individuals, partnerships, and corporations 124,476 119,625 124,587 117,420 124.750 127,624 127,686 121,218 119,231 48 States and political subdivisions 4,788 3,850 4,346 3,940 4,394 4,244 4,196 4,388 4,164 49 U.S. government 2,961 1,717 943 1,906 884 1.191 2,162 1,384 1,457 50 Commercial banks in the United States 18,408 16,840 17,899 16,568 18,369 19,388 17,221 17,077 16,491 51 Banks in foreign countries 5,876 6,044 5,643 5,703 5,925 6,486 6,524 5,357 5,612 52 Foreign governments and official institutions 1,064 990 989 1,108 1,358 1,312 968 889 731 53 Certified and officers' checks 8,258 7,245 7,243 7,254 8.316 7,127 6,846 7,051 7,518 54 Time and savings deposits 385,938 385,898 387,158 387,646 388,513 389,552 388,068 386,695 387,258 55 Savings 161,909 161,174 160,390 159,537 159,807 161,503 160,874 159,654 159,552 56 Individuals and nonprofit organizations 144,878 144,035 143,191 142,214 142,458 143,942 143,372 142,145 141,935 57 Partnerships and corporations operated for profit .. 15,987 16,073 16,138 16,280 16,291 16,474 16,394 16,417 16,546 58 Domestic governmental units 987 1,013 1,006 986 998 1,030 1,051 1,036 1,019 59 All other 57 53 56 58 59 57 57 57 52 60 Time 224,029 224,724 226,768 228,109 228,706 228,049 227,194 227,040 227,706 61 Individuals, partnerships, and corporations 199,125 199,299 201,170 202,298 203,078 202,367 201,464 201,331 202,164 62 States and political subdivisions 14,918 15,248 15,360 15,564 15,369 15,380 15,385 15,556 15,488 63 U.S. government 242 240 242 246 247 239 240 237 251 64 Commercial banks in the United States 6,557 6,707 6,681 6,655 6,656 6,799 6,801 6,641 6,662 65 Foreign governments, official institutions, and banks 3,187 3,230 3,314 3,346 3,355 3,264 3,304 3,275 3,140 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 1,407 392 338 2,399 420 1,270 5,576 1,058 67 Treasury tax-and-loan notes 10,128 8,255 9,351 10,295 10,449 6,333 7,356 14,496 14,360 68 All other liabilities for borrowed money6 153,464 153,198 147,639 146,455 147,676 154,288 151,344 143,970 144,557 69 Other liabilities and subordinated notes and debentures . 84,720 84,811 86,946 85,640 85,217 83.822 84,158 83,979 84,647 70 Total liabilities 802,248 789,289 793,851 784,861 798,932 802,524 798,332 792,690 787,618 71 Residual (total assets minus total liabilities)7 57,233 57,407 57,270 57,312 57,525 57,639 57,701 57,444 57,349 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 capita! 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 Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31? Sept. IP Sept. 14? Sept. 21 p Sept. 28? BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross) and securities adjusted1 644,632 641,457 645,775 642,693 646,294 648,379 646,823 647,825 646,862 2 Total loans (gross) adjusted1 508,717 507,068 508,662 506,967 510,472 510,973 509,259 511,295 510,584 3 Demand deposits adjusted2 105,836 105,912 106,060 102,465 105,941 106,561 108,925 103,872 103,548 4 Time deposits in accounts of $100,000 or more 142,375 142,637 144,303 145,418 145,492 144,550 143,317 143,018 143,712 5 Negotiable CDs 93,172 93,199 94,528 95,185 95,127 94,073 92,634 92,335 93,384 6 Other time deposits 49,204 49,438 49,775 50,233 50,366 50,477 50,683 50,683 50,328 7 Loans sold outright to affiliates3 2,623 2,611 2,533 2,579 2,529 2,588 2,617 2,492 2,535 8 Commercial and industrial 2,024 2,010 1,934 2,022 1,993 2,020 2,019 1,896 1.940 9 Other 599 601 598 558 536 568 598 596 595 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and securities adjusted1 600,352 597,061 601,135 598,003 601,399 603,404 601,754 602,436 601,224 11 Total loans (gross) adjusted1 476,847 475,105 476,612 474,846 478,098 478,677 476,862 478,631 477,697 12 Demand deposits adjusted2 97,958 97,866 98,308 94,824 97,938 98,777 101,047 96,160 95,793 13 Time deposits in accounts of $100,000 or more 134,087 134,291 135,795 136,797 136,932 136,022 134,890 134,444 135,056 14 Negotiable CDs 88,550 88,530 89.755 90,336 90,352 89,360 88,033 87,624 88,535 15 Other time deposits 45,537 45,761 46,040 46,460 46,580 46,662 46,856 46,820 46,521 16 Loans sold outright to affiliates3 2,574 2,562 2,484 2,531 2,480 2,539 2,568 2,444 2,484 17 Commercial and industrial 1,981 1,967 1,890 1,978 1,949 1,976 1,975 1,852 1,894 18 Other 593 595 594 553 530 563 593 591 591 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted14 142,078 140,770 140,862 139,681 141,511 140,928 139,648 140,036 138,957 20 Total loans (gross) adjusted1 119,081 117,470 117,427 116,571 117,835 117,263 115,950 116,374 115,323 21 Demand deposits adjusted2 26,890 25,195 26,267 25,590 25,457 28,175 27,353 25,645 25,321 22 Time deposits in accounts of $100,000 or more 32,757 32,964 33,417 33,008 33,144 32,695 32,417 31,634 31,702 23 Negotiable CDs 21,910 22,072 22,600 22,207 22,468 22,119 21,766 21,020 21,054 24 Other time deposits 10,846 10,892 10.818 10,801 10,676 10,576 10,651 10,614 10,648 1. Exclusive of loans and federal funds transactions with domestic commercial 3. Loans sold are those sold outright to a bank's own foreign branches, banks. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 2. All demand deposits except U.S. government and domestic banks less cash not a bank), and nonconsolidated nonbank subsidiaries of the holding company, items in process of collection. 4. Excludes trading account securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • October 1983 1.30 LARGE WEEKLY REPORTING BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1983 AAccccoouunntt Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 3IP Sept. IP Sept. 14P Sept. 21P Sept. 28p 1 Cash and due from depository institutions . 7,874 7,366 7,283 6,846 7,323 6,827 6,483 6,476 6,121 2 Total loans and securities 40,852 41,225 40,804 41,572 42,942 42,416 42,337 43,338 44,846 3 U.S. Treasury securities 4,100 4,060 4,255 4,215 4,418 4,346 4,196 4,034 4,080 4 Other securities 847 848 862 862 861 859 872 905 934 5 Federal funds sold1 2,174 2,534 1,876 2,503 2,711 2,264 1,995 2,023 2,804 6 To commercial banks in United States .. 1,999 2,258 1,728 2,396 2,520 2,190 1,812 1,811 2,740 7 To others 175 276 148 106 190 74 182 212 64 8 Other loans, gross 33,731 33,783 33,811 33,992 34,952 34,947 35,274 36,375 37,027 9 Commercial and industrial 18,116 18,034 18,358 18,318 18,609 18,491 1188,,661100 1188,,772266 1199,,113311 10 Bankers acceptances and commercial paper 3,037 3,163 3,099 3,013 3,004 3,112 3,161 3,141 3,122 11 All other 15,079 14,871 15,259 15,305 15,606 15,379 15,449 15,586 16,009 12 U.S. addressees 13,343 13,123 13,450 13,496 13,813 13,594 13,643 13,720 14,104 13 Non-U.S. addressees 1,736 1,748 1,809 1,810 1,793 1,785 1,806 1,866 1,905 14 To financial institutions 11,462 11,782 11,472 11,636 12,080 12,179 12,628 13,356 13,623 15 Commercial banks in United States... 9,141 9,522 9,174 9,294 9,689 9,752 10,244 10,966 11,123 16 Banks in foreign countries 1,732 1,659 1,685 1,740 1,802 1,807 1,804 1,805 1,915 17 Nonbank financial institutions 590 600 613 602 589 620 580 586 585 18 For purchasing and carrying securities .. 401 298 365 408 591 573 499 727 536 19 AH other 3,752 3,670 3,615 3,629 3,672 3,704 33,,553377 33,,556655 33,,773366 20 Other assets (claims on nonrelated parties) 11,109 11,250 11,304 11,370 11,436 11,432 11,568 11,578 11,750 21 Net due from related institutions 11,543 11,097 10,968 11,874 12,615 12,287 11,759 12,378 11,521 22 Total assets 71,379 70,938 70,360 71,663 74,317 72,963 72,146 73,770 74,237 23 Deposits or credit balances2 21,089 20,876 20,326 20,635 21,197 20,414 20,357 20,416 20,517 24 Credit balances 195 166 190 147 188 176 196 189 196 25 Demand deposits 1,937 1,816 1,770 1,734 1,976 1,774 1,627 11,,665577 11,,773366 26 Individuals, partnerships, and corporations 844 785 834 781 809 800 780 745 748 27 Other 1,093 1,030 936 952 1,167 974 847 911 989 28 Total time and savings 18,957 18,894 18,366 18,754 19,033 18,464 18,534 1188,,557700 18,584 29 Individuals, partnerships, and corporations 16,095 16,146 15,647 15,950 16,381 15,744 15,783 15,876 15,756 30 Other 2,862 2,749 2,719 2,804 2,652 2,720 2,751 2,694 2,828 31 Borrowings3 32,599 32,179 32,414 32,731 33,824 33,830 33,648 35,008 34,643 32 Federal funds purchased4 9,716 9,141 9,318 9,312 10,243 9,610 88,,663300 99,,003377 88,,773377 33 From commercial banks in United States 7,790 7,270 7,510 7,281 8,152 7,832 6,755 7,026 6,951 34 From others 1,925 1,870 1,808 2,032 2,091 1,778 1,875 2,010 1,786 35 Other liabilities for borrowed money 22,883 23,038 23,095 23,419 23,580 24,219 25,018 25,970 25,906 36 To commercial banks in United States 18,695 19,062 19,168 19,480 19,618 20,274 20,897 21,910 22,045 37 To others 4,188 3,976 3,927 3,939 3,962 3,945 4,121 4,061 3,861 38 Other liabilities to nonrelated parties 11,730 11,889 12,083 12,144 12,168 12,102 12,430 12,446 12,491 39 Net due to related institutions 5,961 5,994 5,536 6,153 7,128 6,617 5,712 5,900 6,587 40 Total liabilities 71,379 70,938 70,360 71,663 74,317 72,963 72,146 73,770 74,237 MEMO 41 Total loans (gross) and securities adjusted* 29,713 29,445 29,903 29,882 30,732 30,474 30,281 30,561 30,983 42 Total loans (gross) adjusted5 24,766 24,537 24,785 24,804 25,453 25,270 25,212 25,622 25,968 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 Corporations1 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 2 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 AU 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 Domestic Nonfinancial Statistics • October 1983 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1983 IInnssttrruummeenntt D 19 e 7 c 8 . 1 D 9 e 7 c 9 . ' D 19 e 8 c 0 . D 19 e 8 c 1 . D 1 e 9 c 82 .2 Mar. Apr. May June July Aug. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 83,438 112,803 124,374 165,455 166,208 167,665 170,659 169,503 170,716 172,199' 174,669 Financial companies3 Dealer-placed paper4 2 Total 12,181 17,359 19,599 29,904 34,067 36,255 37,481 3388,,664455 3399,,885500 3399,,002277 40,749 3 Bank-related (not seasonally adjusted) 3,521 2,784 3,561 6,045 2,516 2,030 1,950 1,954 2,192 2,367 2,353 Directly placed paper5 4 Total 51,647 64,757 67,854 81,715 84,183 85,773 87,831 87,238 87,749 8899,,558855 90,628 5 Bank-related (not seasonally adjusted) 12,314 17,598 22,382 26,914 32,034 32,951 32,495 32,943 33,420 33,613 35,085 6 Nonfinancial companies6 19,610 30,687 36,921 53,836 47,958 45,637 45,347 43,620 43,117 43,587' 43,292 Bankers dollar acceptances (not seasonally adjusted) 7 Total 33,700 45,321 54,744 69,226 79,543 70,843 70,389 68,797 70,907 72,710 Holder 8 Accepting banks 8,579 9,865 10,564 10,857 10,910 10,518 9,494 8,223 9,147 9,008 9 Own bills 7,653 8,327 8,963 9,743 9,471 9,083 7,951 7,497 7,998 8,231 10 Bills bought 927 1,538 1,601 1,115 1,439 1,435 1,543 726 1,148 777 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 1,442 949 758 778 788 792 670 13 Others 23,870 33,370 41,614 56,926 66,204 59,568 60,118 59,786 60,968 63,032 Basis 14 Imports into United States 8,574 10,270 11,776 14,765 17,683 14,217 14,418 13,858 14,324 15,122 15 Exports from United States 7,586 9,640 12,712 15,400 16,328 16,826 17,124 16,074 16,356 16,286 16 All other 17,540 25,411 30,257 39,061 45,532 39,800 38,848 38,865 40,226 41,301 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 Dec. 1, 1982, there was a break in the commercial paper series. The 4. Includes all financial company paper sold by dealers in the open market. key changes in the content of the data involved additions to the reporting panel, 5. As reported by financial companies that place their paper directly with the exclusion of broker or dealer placed borrowings under any master note investors. agreements from the reported data, and the reclassification of a large portion of 6. Includes public utilities and firms engaged primarily in such activities as 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 Rate Effective Date Rate Month Average Month Average rate rate 1981—Nov. 24 16.00 -Aug. 23 13.50 1982—Jan 15.75 1983—Jan 11.16 Dec. 1 15.75 Oct. 7 13.00 Feb 16.56 Feb 10.98 14 12.00 16.50 Mar 10.50 Nov. 22 11.50 Apr 16.50 10.50 May 16.50 10.50 1982—Feb. 18 17.00 June 16.50 June 10.50 23 16.50 July 16.26 July 10.50 July 20 16.00 Aug 14.39 Aug 10.89 29 15.50 Sept 13.50 Sept 11.00 Aug. 2 15.00 1983—Jan. 11 11.00 Oct 12.52 16 14.50 Feb. 28 10.50 Nov 11.85 18 14.00 Aug. 8 11.00 Dec 11.50 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, August 1-5, 1983 Size of loan (in thousands of dollars) All Item sizes 1-24 25-49 50-99 100-499 500-999 and 1 0 o 0 v 0 e r SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 36,819,868 949,559 668,400 1,094,777 2,138,132 986,449 30,982,550 2 Number of loans 171,400 115,850 20,397 17,109 12,274 1,478 4,291 3 Weighted-average maturity (months) 1.2 3.7 4.3 3.4 4.0 3.9 .8 4 With fixed rates .7 3.3 4.2 2.6 3.5 2.8 .4 5 With floating rates 2.1 4.6 4.5 4.7 4.3 4.5 1.5 6 Weighted-average interest rate (percent per annum) .. 11.09 13.99 13.56 12.73 11.89 11.81 10.81 7 Interquartile range1 10.52-11.07 13.10-14.93 12.25-14.50 11.85-13.65 11.02-12.53 11.02-12.46 1100..5522---11.01 8 With fixed rates 11.01 14.41 13.98 12.97 12.08 11.90 10.76 9 With floating rates 11.23 13.28 12.87 12.50 11.80 11.77 10.92 Percentage of amount of loans 10 With floating rate 36.2 37.6 38.3 50.4 66.0 71.7 32.4 11 Made under commitment 64.3 32.9 33.2 45.9 51.8 65.7 67.4 12 With no stated maturity 11.3 11.2 15.7 24.7 25.2 36.4 8.9 13 With one-day maturity 38.0 .1 .1 .2 .6 .9 45.0 1-99 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 14 Amount of loans (thousands of dollars) 4,491,493 531,982 386,952 151,196 3,421,363 15 Number of loans 26,332 23,262 2,176 228 667 16 Weighted-average maturity (months) 55.3 48.8 68.5 40.0 55.5 17 With fixed rates 61.8 54.2 112.8 53.1 52.6 18 With floating rates 53.7 38.3 46.5 37.7 55.9 19 Weighted-average interest rate (percent per annum) .. 11.83 14.53 12.06 11.66 11.39 20 Interquartile range1 10.92-12.40 12.68-15.60 11.02-12.96 11.02-12.13 10.92--11.73 21 With fixed rates 13.00 15.54 12.05 11.77 11.17 22 With floating rates 11.53 12.59 12.07 11.64 11.42 Percentage of amount of loans 23 With floating rate 79.8 34.1 66.8 85.4 88.1 24 Made under commitment 66.0 17.1 43.8 72.3 75.8 1-24 25-49 50-99 500 and over CONSTRUCTION AND LAND DEVELOPMENT LOANS 25 Amount of loans (thousands of dollars) 1,340.014 166,917 85,626 47,270 481,527 558,674 26 Number of loans 23,995 18,146 2,401 726 2,485 237 27 Weighted-average maturity (months) 15.5 5.4 10.4 11.5 19.7 17.0 28 With fixed rates 14.1 3.2 10.9 9.4 22.9 4.6 29 With floating rates 16.5 10.1 8.1 12.3 14.0 18.4 30 Weighted-average interest rate (percent per annum) .. 12.99 14.91 13.47 12.70 12.97 12.40 31 Interquartile range1 12.13-13.81 13.24-15.51 13.50-13.81 12.13-13.24 11.07-14.37 11.62-13.24 32 With fixed rates 14.18 15.57 13.66 13.10 14.08 12.61 33 With floating rates 12.33 13.50 12.81 12.56 11.93 12.37 Percentage of amount of loans 34 With floating rate 64.1 32.1 22.0 73.3 51.7 90.0 35 Secured by real estate 80.8 81.8 97.5 89.5 96.3 63.8 36 Made under commitment 75.4 80.1 60.9 74.6 83.5 69.3 37 With no stated maturity 10.1 1.0 2.7 7.6 24.8 1.4 38 With one-day maturity .4 .1 .2 .8 .3 .5 Type of construction 39 1- to 4-family 23.3 65.5 17.0 36.2 12.1 20.2 40 Multifamily 10.5 7.2 4.9 16.6 8.2 13.9 41 Nonresidential 66.2 27.3 78.1 47.2 79.7 65.9 All sizes 1-9 10-24 25-49 50-99 100-249 250 and over LOANS TO FARMERS 42 Amount of loans (thousands of dollars) 942,246 157,098 153,852 152,314 129,834 89,163 259,986 43 Number of loans 62,461 44,542 10,599 4,307 1,987 642 383 44 Weighted-average maturity (months) 7.1 6.7 6.1 7.0 8.0 6.4 8.0 45 Weighted-average interest rate (percent per annum) .. 13.72 14.30 14.03 14.15 13.79 13.60 12.94 46 Interquartile range1 12.87-14.49 13.42-14.85 13.42-14.57 13.50-14.63 13.00-14.49 12.43-14.97 11.84-14.49 By purpose of loan 4 4 8 7 O Fe th ed er e r l i l v i e v s e t s o t c o k c k 1 13 4 . . 0 1 5 4 1 1 6 4 . . 8 3 9 5 1 14 3 . . 3 9 1 0 1 1 4 4 . . 7 0 0 7 13 ( .921 ) 1 1 3 1 . . 3 5 3 7 12 ( .023 ) 4 5 9 0 O Fa th rm er m cu a r c r h e i n n t e o ry p e a r n a d t in e g q u e i x p p m e e n n s t e s 1 1 3 4 . . 9 2 3 6 1 14 4 . . 0 5 1 5 1 1 3 4 . . 9 0 1 3 1 14 4 . . 0 4 7 0 13 ( .929 ) 13 < . 2 8 ) 1 13 ( .724 ) 51 Other 13.17 14.21 13.88 13.92 13.05 13.95 11.67 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 • October 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 June July Aug. Sept. Sept. 2 Sept. 9 Sept. 16 Sept. 23 Sept. 30 MONEY MARKET RATES 1 Federal funds1-2 13.36 16.38 12.26 8.98 9.37 9.56 9.45 9.44 9.53 9.54 9.48 9.04 Commercial paper3'4 2 1-month 12.76 15.69 11.83 8.97 9.15 9.41 9.19 9.34 9.33 9.28 9.16 8.97 3 3-month 12.66 15.32 11.89 9.00 9.25 9.54 9.24 9.46 9.39 9.30 9.18 9.01 4 6-month 12.29 14.76 11.89 9.03 9.36 9.68 9.28 9.61 9.47 9.35 9.20 9.02 Finance paper, directly placed3-4 5 1-month 12.44 15.30 11.64 8.86 9.13 9.35 9.15 9.34 9.27 9.20 9.10 8.97 6 3-month 11.49 14.08 11.23 8.81 9.11 9.41 9.09 9.34 9.33 9.08 9.06 8.83 7 6-month 11.28 13.73 11.20 8.80 9.10 9.42 9.09 9.32 9.34 9.09 9.06 8.81 Bankers acceptances4-5 8 3-month 12.72 15.32 11.89 9.04 9.33 9.59 9.23 9.52 9.36 9.30 9.15 9.03 9 6-month 12.25 14.66 11.83 9.06 9.47 9.71 9.26 9.68 9.43 9.33 9.13 9.01 Certificates of deposit, secondary market6 10 1-month 12.91 15.91 12.04 9.06 9.30 9.52 9.28 9.46 9.37 9.32 9.28 9.08 U 3-month 13.07 15.91 12.27 9.20 9.50 9.77 9.39 9.73 9.54 9.43 9.34 9.17 12 6-month 12.99 15.77 12.57 9.45 9.91 10.17 9.64 10.14 9.85 9.68 9.52 9.36 13 Eurodollar deposits, 3-month2 14.00 16.79 13.12 9.67 10.00 10.27 9.82 10.13 10.14 9.91 9.85 9.50 U.S. Treasury bills4 Secondary market7 14 3-month 11.43 14.03 10.61 8.79 9.08 9.34 9.00 9.26 9.13 9.08 8.94 8.75 15 6-month 11.37 13.80 11.07 8.89 9.26 9.51 9.15 9.52 9.35 9.21 9.02 8.89 16 1-year 10.89 13.14 11.07 8.87 9.34 9.60 9.27 9.64 9.47 9.33 9.15 9.04 Auction average8 17 3-month 11.506 14.029 10.686 8.82 9.12 9.39 9.05 9.28 9.21 9.04 8.99 8.73 18 6-month 11.374 13.776 11.084 8.89 9.29 9.53 9.19 9.53 9.40 9.14 9.06 8.84 1199 1100..774488 1133..115599 1111..009999 88..8800 99..3366 99..7777 99..6644 99..6644 CAPITAL MARKET RATES U.S. Treasury notes and bonds9 Constant maturities10 20 1-year 12.05 14.78 12.27 9.66 10.20 10.53 10.16 10.57 10.38 10.21 10.01 9.89 ">1 10.65 10.35 2n2 2-vear 11.77 14.56 12.80 10.18 10.69 11.07 10.79 11.14 10.95 10.83 10.70 10.56 10.85 10.80 24 3-year 11.55 14.44 12.92 10.32 10.90 11.30 11.07 11.41 11.23 11.14 10.99 10.82 25 5-year 11.48 14.24 13.01 10.63 11.21 11.63 11.43 11.73 11.56 11.46 11.37 11.22 26 7-year 11.43 14.06 13.06 10.83 11.35 11.77 11.61 11.88 11.73 11.64 11.54 11.42 27 10-year 11.46 13.91 13.00 10.85 11.38 11.85 11.65 11.94 11.76 11.69 11.59 11.46 28 20-year 11.39 13.72 12.92 11.12 11.59 11.96 11.82 12.09 11.92 11.85 11.78 11.64 29 30-year 11.30 13.44 12.76 10.93 11.40 11.82 11.63 11.92 11.73 11.67 11.57 11.45 Composite13 30 Over 10 years (long-term) 10.81 12.87 12.23 10.64 11.10 11.42 11.26 11.52 11.37 11.28 11.20 11.09 State and local notes and bonds Moody's series14 31 Aaa 7.85 10.43 10.88 8.76 8.70 9.04 8.97 9.10 9.05 9.00 8.90 8.80 32 Baa 9.01 11.76 12.48 10.21 10.06 10.25 10.10 10.25 10.20 10.10 10.00 9.95 33 Bond Buyer series15 8.59 11.33 11.66 9.52 9.53 9.72 9.58 9.75 9.67 9.62 9.42 9.46 Corporate bonds Seasoned issues16 34 All industries 12.75 15.06 14.94 12.54 12.73 13.01 12.91 13.03 12.98 12.94 12.88 12.81 35 Aaa 11.94 14.17 13.79 11.74 12.15 12.51 12.37 12.54 12.47 12.40 12.31 12.22 36 Aa 12.50 14.75 14.41 12.15 12.39 12.72 12.62 12.76 12.68 12.67 12.58 12.49 37 A 12.89 15.29 15.43 12.88 12.99 13.17 13.11 13.16 13.15 13.15 13.10 13.04 38 Baa 13.67 16.04 16.11 13.37 13.39 13.64 13.55 13.65 13.60 13.55 13.51 13.49 Aaa utility bonds17 34 12.74 15.56 14.41 11.87 12.32 12.25 12.53 12.63 12.43 40 Recently offered issues 12.70 15.56 14.45 11.81 12.39 12.75 12.50 12.80 12.59 12.55 12.31 12.38 MEMO: Dividend/price ratio18 41 Preferred stocks 10.60 12.36 12.53 10.81 11.06 11.07 11.06 11.05 11.18 11.07 11.02 10.96 42 Common stocks 5.26 5.20 5.81 4.26 4.21 4.35 4.24 4.32 4.22 4.29 4.23 4.23 1. Weekly and monthly figures are averages of all calendar days, where the 11. Each biweekly figure is the average of five business days ending on the rate for a weekend or holiday is taken to be the rate prevailing on the preceding Monday following the date indicated. Beginning 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-'/2-year small the volume of transactions at these rates. saver certificates. (See table 1.16.) 2. Weekly figures are statement week averages—that is, averages for the 12. Each biweekly figure is the average of five business days ending on the week ending Wednesday. Monday following the date indicated. Until 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-'/2-year small saver certificates. (See table 1.16.) Before November 1979, maturities for data shown are 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- nor 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 of ten issues: four public utilities, four industrials, one financial, and one 9. Yields are based on closing bid prices quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields are read from a yield curve at fixed maturities. Based on only recently issued, Digitized for FacRtivAeSly EtrRad ed securities. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets A29 1.36 STOCK MARKET Selected Statistics 1983 IInnddiiccaattoorr 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May June July Aug. Sept. 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 83.25 84.74 87.50 90.61 94.61 96.43 96.74 93.96 96.70 2 Industrial 78.64 85.44 78.18 95.37 97.26 100.61 104.46 109.43 112.52 113.21 109.50 112.76 3 Transportation 60.52 72.61 60.41 75.65 79.44 83.28 85.26 89.07 92.22 92.91 88.06 94.56 4 Utility 37.35 38.90 39.75 45.59 45.92 45.89 46.22 47.62 46.76 46.61 46.94 48.16 5 Finance 64.28 73.52 71,99 85.66 86.57 93.22 99.07 102.45 101.22 99.60 95.76 97.00 6 Standard & Poor's Corporation (1941-43 = 10)' ... 118.71 128.05 119.71 145.13 146.80 151.88 157.71 164.10 166.39 166.96 162.42 167.16 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 150.47 171.79 141.31 180.47 187.17 191.88 202.51 223.97 237.51 244.03 230.10 234.36 Volume of trading (thousands of shares) 8 New York Stock Exchange 44,867 46,967 64,617 88,463 85,026 82,694 89,627 93,016 89,729 79,508 74,191 82,866 9 American Stock Exchange 6,377 5,346 5,283 9,220 8,256 7,354 8,576 12,260 10,874 8,199 6,329 6,629 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers-dealers3 14,721 14,411 13,325 13,370 13,985 14,483 15,590 16,713 18,292 19,218 19,437 f 11 Margin stock4 14,500 14,150 12,980 13,070 13,680 14.170 15,260 16,370 17,930 18,870 19,090 1 12 Convertible bonds 219 259 344 299 304 312 329 342 361 347 346 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 6,257 6,195 6,370 6,090 6,090 6,150 6,275 6,350 15 Cash-account 6,070 7,150 8,390 8,225 7,955 7,965' 7,970 8,310 8,590 8,145 8,035 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 18.0 18.0 17.0 14.0 14.0 13.0 21.0 23.0 18 40-49 30.0 24.0 24.0 23.0 20.0 21.0 19.0 19.0 21.0 28.0 28.0 19 50-59 25.0 17.0 24.0 25.0 27.0 25.0 28.0 30.0 29.0 21.0 20.0 n.a. 20 60-69 14.0 10.0 14.0 16.0 16.0 18.0 19.0 16.0 16.0 14.0 13.0 1 2 2 2 1 8 7 0 0 o 7 r 9 more 8 9 . . 0 0 6 6 . . 0 0 8 9 . .0 0 9 9 . . 0 0 1 9 0 . . 0 0 1 9 0 . . 0 0 1 9 0 . . 0 0 1 9 1 . . 0 0 1 9 2 . . 0 0 9 7 . . 0 0 9 7 . . 0 0 •1 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)7 21,690 25,870 35,598 43,838 43,006 43,472 44,999 45,465 47,100 50,580 50,267 t Distribution by equity status (percent) 1 24 Net credit status 47.8 58.0 62.0 65.0 66.0 62.0 64.0 62.0 62.0 62.0 62.0 n.a. Debt status, equity of I 25 60 percent or more 44.4 31.0 29.0 28.0 27.0 28.0 30.0 32.0 33.0 31.0 31.0 1 26 Less than 60 percent 7.7 11.0 9.0 8.0 7.0 9.0 6.0 6.0 5.0 6.0 7.0 T 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 carry 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 Besides assigning a current loan value to margin stock generally, Regulations T securities as collateral by prescribing a maximum loan value, which is a specified and U permit special loan values for convertible bonds and stock acquired through percentage of the market value of the collateral at the time the credit is extended. 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 • October 1983 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1982 1983 AAccccoouunntt 11998811 Oct. Nov. Dec. Jan. Feb. Mar. Apr/ Mayr Juner July Aug.? Savings and loan associations 1 Assets 630,712 664,167 692,549 697,189 706,045 714,676 772,352 723,616 728,487 728,156 731,275 739,575 745,303 2 Mortgages 503,192 518,547 489,923 488,614 482,234 481,470 481,090 475,688 476,248 472,124 473,134 477,919 482,093 3 Cash and investment securities' 57,928 63,123 75,638 78,122 84,767 90,662 94,080 96,649 99,226 103,468 101,284 101,754 98,949 4 Other 69,592 82,497 126,988 130,453 139,044 142,544 147,182 151,279 153,013 152,564 156,857 159,902 164,261 5 Liabilities and net worth 630,712 664,167 692,549 697,189 706,045 714,676 772,352 723,616 728,487 728,156 731,275 739,575 745,303 6 Savings capital 511,636 525,061 547,112 548,439 566,189 582,918 591,913 597,112 601,171 599,673 603,178 608,683 613,426 7 Borrowed monev 64,586 88,782 100,881 102,948 97,979 88,925 86,544 84,884 83,640 82,722 84,328 84,682 84,242 8 FHLBB 47,045 62,794 65,015 64,202 63,861 60,415 58,841 56,859 55,933 54,392 54,234 53,579 52,261 9 Other 17,541 25,988 35.866 38,746 34,118 28,510 27,703 28,025 27,707 28,330 30,094 31,103 31,981 10 Loans in process 8,767 6,385 8,484 8,967 9,934 10,453 11,039 12,245 13,462 14,528 15,972 17,063 17,894 11 Other 12,394 15,544 20,018 21,048 15,720 16,658 17,524 14,767 16,210 18,323 15,548 17,931 19,104 12 Net worth2 33,329 28,395 24,538 24,754 26,157 26,175 26,371 26,853 27,466 27,438 28,221 28,279 28,531 13 MEMO: Mortgage loan commitments outstanding3 16,102 15,225 18,407 19,682 18,054 19,453 22,051 24,885 27,920 30,089 30,630 31,667 32,594 Mutual savings banks4 14 Assets 171,564 175,728 172,908 172,287 174,197 174,726 176,378 178,814 178,826 180,071 181,975 182,822 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 93,998 16 Other 11,733 1144,,775533 17,035 16,702 16,957 17,420 18,211 17,837 18,353 17,893 1177,,443388 18,134 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 13,931 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 2,248 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 40,667 20 Cash 4,334 5,442 6,749 6,291 6,919 6,275 6,104 6,548 6,039 5,960 6,224 5,322 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 8,522 n a. 22 Liabilities 171,564 175,728 172,908 172,287 174,197 174,726 176,378 178,814 178,826 180,071 181,975 182,822 23 Deposits 154,805 155,110 152,210 151,304 155,196 157,113 159,162 161,489 161,262 162.287 163,990 164,848 24 Regular7 151,416 153,003 149,928 149,167 152,777 154,876 156,915 159,088 158,760 159,840 161,573 162,271 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 39,983 26 Time 97,445 103,578 101,408 99,959 96,369 90,184 87,377 86,276 84,593 83,506 84,705 85,445 27 Other 2,086 2,108 2,283 2,137 2,419 2,237 2,247 2,401 2,502 2,447 2,417 2,577 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 7,596 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 9,684 30 MEMO: Mortgage loan commitments outstanding8 1,476 1,293 1,281 1.400 1,285 1,253 1.295 1.639 1,860 1,860 1,884 1,969 Life insurance companies 31 Assets 479,210 525,803 571,902 578,200 584,311 589,490 595,959 602,770 609,298 591,375 628,224 633,569 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 44,751 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 22,228 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 10,504 35 Foreign10 9,332 9,891 10,382 10,377 10,392 10,611 10,736 10,888 10,940 11,764 11,852 12,019 36 Business 238,113 255,769 279,918 283,650 283,799 290,178 293,427 296,223 300,558 309,254 313,510 316,934 n .a. 37 Bonds 190,747 208,098 226,879 229,101 228,220 233,380 235,376 236,420 238,689 245,833 248,248 252,397 38 Stocks 47,366 47,670 53,039 54,549 55,579 56,798 58,051 59,803 61,869 63,421 65,262 64,537 39 Mortgages 131,030 137,747 140,678 140,956 141,919 142,277 142,683 143,031 143,011 143,758 144,725 145,086 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 21,690 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 53,972 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 51,136 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 78,143 44 Federal 39,801 42,382 44,388 44,986 45,483 45,418 46,449 48,057 48,628 49,869 50,829 45 State 31,908 35,300 23,769 23,890 24,089 24,221 24,741 25,573 25,979 26,736 27,314 46 Loans outstanding 47,774 50,448 42,971 42,995 43,223 42,942 42,785 43,081 43,509 44,012 44,861 n .a. n .a. 47 Federal 25,627 27,458 27,648 27,728 27,941 27,724 27,592 27,733 27,995 28,336 28,859 48 State 22,147 22,990 15,323 15,267 15,282 15,218 15,193 15,348 15,514 15,676 16,002 49 Savings 64,399 68,871 61,829 62,673 62,977 63,226 64,587 67,164 68,404 70,080 71,601 50 Federal (shares) 36,348 37,574 40,535 41,076 41,341 41,441 42,404 43,890 44,741 45,782 46,654 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 24,947 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 June July Aug. U.S. budget 1 Receipts1 517,112 599,272 617,766 322,478 286,338 306,331 66,517 43,948 49,683 2 Outlays1'2 576,675 657,204 728,375 348,678 390,846 396,477 63,116 65,360 67,160 3 Surplus, or deficit (-) -59,563 -57,932 -110,609 -26,200 -104,508 -90,146 3,401 -21,412 -17,477 4 Trust funds 8,801 6,817 5,456 -17,690 -6,576 22,680 3,722 -5,592 289 5 Federal funds3 -68,364 -64,749 -116,065 -43,889 -97,934 -112,822 -318 -15,820 -17,765 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt ((--)))) 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -14,549 -20,769 -14,142 -7,942 -4,923 -5,418 -1,128 -1,326 -1,112 77 OOtthheerr44 303 -236 -3,190 227 -2,267 -528 -889 33 -155 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 1,382 -22,705 -18,744 Source or financing 9 Borrowing from the public 70,515 79,329 134,993 41,728 119,609 102,538 25,719 11,877 20,522 10 Cash and monetary assets (decrease, or increase (-)) -355 -1,878 -11,911 -408 -9,057 -9,664 -23,605 6,317 4,328 11 Other6 3,648 1,485 4,858 -7,405 1,146 3,222 -3,496 4,511 -6,106 MEMO; 12 Treasury operating balance (level, end of period) 20,990 18,670 29,164 10,999 19,773 100,243 27,997 21,646r 18,469 13 Federal Reserve Banks 4,102 3,520 10,975 4,099 5,033 19,442 8,764 3,815' 4,189 14 Tax and loan accounts 16,888 15,150 18,189 6,900 14,740 72,037 19,233 17,831r 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 • October 1983 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyy 111 eee 999 aaa 888 rrr 000 yyy 111 eee 999888 aaarrr 111 yyy 111 eee 999888 aaarrr 222 1982 1983 1983 HI H2 HI June July Aug. RECEIPTS 1 All sources1 517,112 599,272 617,766 322,478 286,338 306,331 66,517 43,948 49,683 2 Individual income taxes, net 244,069 285,917 297,744 150,565 145,676 144,550 32,773 21,938 23,259 3 Withheld 223,763 256,332 267,513 133,575 131,567 135,531 23,641 21,437 22,519 4 Presidential Election Campaign Fund ... 39 41 39 34 5 30 3 3 2 5 Nonwithheld 63,746 76,844 84,691 66,174 20,040 63,014 11,131 2,160 1,967 6 Refunds 43,479 47,299 54,498 49,217 5,938 54,024 2,003 11,,666622 11,,222288 Corporation income taxes 7 Gross receipts '. 72,380 73,733 65,991 37,836 25,661 33,522 11,680 2,562 1,816 8 Refunds 7,780 12,596 16,784 8,028 11,467 13,809 11,,772244 11,,770066 11,,443333 9 Social insurance taxes and contributions, net 157,803 182,720 201,498 108,079 94,278 110,521 1177,,990033 1155,,331177 2200,,008899 10 Payroll employment taxes and contributions2 133,025 156,932 172,744 88,795 85,063 90,912 1166,,336666 1144,,110088 1166,,113377 11 Self-employment taxes and contributions3 5,723 6,041 7,941 7,357 177 6,427 901 -632 0 12 Unemployment insurance 15,336 15,763 16,600 9,809 6,857 11,146 285 1,454 3,529 13 Other net receipts1-4 3,719 3,984 4,212 2,119 2,181 2,1% 351 387 423 14 Excise taxes 24,329 40,839 36,311 17,525 16,556 16,904 3,100' 3,369 3,112 15 Customs deposits 7,174 8,083 8,854 4,310 4,299 4,010 857 772 %7 16 Estate and gift taxes 6,389 6,787 7,991 4,208 3,445 2,883 530 559 514 17 Miscellaneous receipts5 12,748 13,790 16,161 7,984 7,891 7,751 1,400 1,137 1,359 OUTLAYS 18 All types1 576,675 657,204 728,424 348,683 390,847 396,477 63,116 65,360 67,160 19 National defense 135,856 159,765 187,418 93,154 100,419 105,072 18,337 17,394 18,548 20 International affairs 10,733 11,130 9,982 5,183 4,406 4,705 817 1,038 209 21 General science, space, and technology ... 5,722 6,359 7,070 3,370 3,903 3,486 667 687 707 22 Energy 6,313 10,277 4,674 2,946 2,059 2,073 372 243 258 23 Natural resources and environment 13,812 13,525 12,934 5,636 6,940 5,892 1,033 955 1,188 24 Agriculture 4,762 5,572 14,875 7,087 13,260 10,154 483 685 -5 25 Commerce and housing credit 7,788 3,946 3,865 1,408 2,244 2,164 545 665 -332 26 Transportation 21,120 23,381 20,560 9,915 10,686 9,918 1,755 1,875 2,101 27 Community and regional development .... 10,068 9,394 7,165 3,055 4,186 3,124 757 514 689 28 Education, training, employment, social services 30,767 31,402 26,300 12,607 12,187 12,801 2,171 1,943 2,673 29 Health1 55,220 65,982 74,017 37,219 39,073 41,206 7,020 6,672 7,420 30 Income security 193,100 225,101 248,343 112,782 133,779 143,001 25,381 22,536 22,418 31 Veterans benefits and services 21,183 22,988 23,955 10,865 13,241 11,334 1,903 2,024 2,258 32 Administration of justice 4,570 4,696 4,671 2,334 2,373 2,522 379 453 491 33 General government 4,505 4,614 4,726 2,400 2,322 2,434 160 -93 1,248 34 General-purpose fiscal assistance 8,584 6,856 6,393 3,325 3,152 3,124 277 1,178 36 35 Net interest® 52,458 68,726 84,697 41,883 44,948 50,383 12,939 7,606 8,695 36 Undistributed offsetting receipts7 -9,887 -16,509 -13,270 -6,490 -8,333 -16,912 -11,881 -1,017 -1,444 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 May June July Aug. Sept. 1 Total gross public debt 845.1 930.2 1,028.7 1,197.1 1,291.4 1,319.6 1,326.9 1,348.4 1,377.2 By type 2 Interest-bearing debt 844.0 928.9 1,027.3 1,195.5 1,289.9 1,318.1 1,320.7 1,346.9 1,375.8 3 Marketable 530.7 623.2 720.3 881.5 957.3 978.9 985.7 1,010.4 1,024.0 4 Bills 172.6 216.1 245.0 311.8 325.2 334.3 337.6 340.4 340.7 5 Notes 283.4 321.6 375.3 465.0 513.6 527.1 527.2 544.2 557.5 6 Bonds 74.7 85.4 99.9 104.6 118.5 117.5 120.9 125.8 125.7 7 Nonmarketable1 313.2 305.7 307.0 314.0 332.6 339.2 335.0 336.5 351.8 K 2 2 9 State and local government series 24.6 23.8 23.0 25.7 29.6 33.1 33.2 33.9 35.1 10 Foreign issues3 28.8 24.0 19.0 14.7 11.1 11.4 11.2 11.1 11.5 11 Government 23.6 17.6 14.9 13.0 10.5 10.8 11.2 11.1 11.5 1? Public 5.3 6.4 4.1 1.7 .6 .6 .0 .0 .0 13 Savings bonds and notes 79.9 72.5 68.1 68.0 69.2 69.4 69.7 70.0 70.3 14 Government account series4 177.5 185.1 196.7 205.4 222.4 225.0 220.6 221.4 234.7 15 Non-interest-bearing debt 1.2 1.3 1.4 1.6 1.5 1.5 6.2 1.5 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. 21 Insurance companies 16.7 20.1 19.1 38.7 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 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 lVi 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 • October 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 July Aug. Sept. Aug. 1(K Aug. 17' Aug. 24 Aug. 31 Sept. 7 Sept. 14 Immediate delivery1 1 U.S. government securities 18,331 24,728 32,271 38,095 45,684 47,617 43,108 48,116 41,962 48,052 46,610 39,807 By maturity 2 Bills 11,413 14,768 18,398 21,941 23,911 24,031 21,699 25,077 21,404 25,915 24,281 20,460 3 Other within 1 year 421 621 810 575 669 665 513 712 526 884 698 820 4 1-5 years 3,330 4,360 6,272 7,124 10,192 10,311 7,768 10,144 9,482 11,992 7,128 7,857 5 5-10 years 1,464 2,451 3,557 4,177 4,814 7,343 5,146 5,457 4,698 4,822 10,455 6,006 6 Over 10 years 1,704 2,528 3,234 4,278 6,098 5,267 7,984 6,726 5,852 4,439 4,048 4,664 By type of customer 7 U.S. government securities dealers 1,484 1,640 1,769 2,134 2,179 2,377 2,119 2,400 1,819 2,384 2,366 1,900 8 U.S. government securities brokers 7,610 11,750 15,659 19,058 23,951 24,261 22,230 25,382 22,104 24,911 22,863 19,651 9 All others2 9,237 11,337 15,344 16,904 19,553 20,980 18,760 20,334 18,039 20,758 21,381 18,255 10 Federal agency securities 3,258 3,306 4,142 5,005 5,267 6,170 4,209 7,005 5,083 5,326 4,532 6,287 11 Certificates of deposit 2,472 4,477 5,001 4,504 4,425 4,736 3,280 5,024 5,050 4,401 4,415 4,586 12 Bankers acceptances A 1,807 2,502 2,615 2,658 3,061 2,407 2,731 3,031 2,369 3,059 3,086 13 Commercial paper T 6,128 7,595 8,275 7,130 7,633 7,006 7,614 6,911 77,,007711 88,,226611 77,,446600 Futures transactions3 14 Treasury bills 1 3,523 5,031 6,684 7,459 5,979 6,505 7,603 6,307 8,068 5,432 4,858 15 Treasury coupons n.a. 1,330 1,490 2,503 3,144 2,749 2,957 3,298 3,298 3,076 1,978 2,182 16 Federal agency securities 1 234 259 446 270 191 316 361 204 229 139 163 Forward transactions4 17 U.S. government securities 1 365 835 1,498 1,795 2,116 1,944 809 1,894 1,146 1,084 1,833 18 Federal agency securities t 1,370 982 1,591 2,118 1,886 2,358 2,752 1,840 1,416 1,276 1,892 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 June July Aug. Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 Net immediate1 1 U.S. government securities 4,306 9,033 9,328 3,877' 572 3,255 1,108 3,819 2,956 2,843 4,270 2 Bills 4,103 6,485 4,837 3,657' 411 880 189 606 1,003 859 958 3 Other within 1 year 1,062 -1,526 -199 63 126 -198 125 201 -89 -553 -541 4 1-5 years 434 1,488 2,932 -183 326 2,216 1,786 2,250 1,248 1,818 3,779 5 5-10 years 166 292 -341 550 352 147 18 617 374 168 -457 6 Over 10 years 665 2,294 2,001 -210 -643 211 -1,009 145 421 551 530 7 Federal agency securities.. 797 2,277 3,712 5,631 6,904 7,994 7,462 8,423 8,641 7,287 7,904 8 Certificates of deposit 3,115 3,435 5,531 4,488 4,729 4,687 4,425 4,683 4,526 4,461 5,230 9 Bankers acceptances 1,746 2,832 2,405 2,764 2,917 2,817 2,840 2,890 2,875 2,986 10 Commercial paper 2,658 3,317 2,894 2,782 2,755 2,899 3,013 2,643 2,462 2,744 Futures positions 11 Treasury bills -8,934 -2,508 -1,023 -1,578 1,493 1,960 5,396 3,413 -970 -3,208 12 Treasury coupons n.a. -2,733 -2,361 -2 -1,077 -1,715 -1,999 -2,523 -2,015 -1,118 -952 13 Federal agency securities.. 522 -224 204 381 428 96 403 626 439 435 Forward positions 14 U.S. government securities -603 -788 -635 -1,631 -4,348 -3,925 -4,269 -4,676 -4,652 -3,940 15 Federal agency securities.. -451 -1,190 -1,802 -2,199 -4,046 -2,726 -3,242 -4,682 -4,320 -4,721 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 14,568 26,754 29,613 34,936 31,969 31,019 32,870 31,967 17 Term agreements 32,048 48,247 49,145 48,064 49,325 50,484 50,725 53,484 Repurchase agreements4 18 Overnight and continuing 35,919 49,695 56,459 59,099 58,369 57,932 60,765 56,115 19 Term agreements 29,449 43,410 39,423 36,772 37,866 39,189 41,511 45,851 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 Mar. Apr. May June July Aug. 1 Federal and federally sponsored agencies 188,665 221,946 237,085 234,412 234,852 234,289 235,041 236,037 236,931 2 Federal agencies 28,606 31,806 33,055 33,083 33,120 33,065 33,353 33,436 33,420 3 Defense Department1 610 484 354 335 318 308 298 284 274 4 Export-Import Bank2'3 11,250 13,339 14,218 14,304 14,304 14,303 14,563 14,563 14,564 5 Federal Housing Administration4 477 413 288 271 255 243 228 220 213 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 1,404 1,404 1,404 1,404 8 Tennessee Valley Authority 11,190 13,115 14,365 14,415 14,485 14,520 14,570 14,675 14,675 9 United States Railway Association6 492 202 194 122 122 122 125 125 125 10 Federally sponsored agencies7 160,059 190,140 204,030 201,329 201,732 201,224 201,688 202,601 203,511 11 Federal Home Loan Banks 37,268 54,131 55,967 51,899 50,297 49,756 48,871 49,065 49,081 12 Federal Home Loan Mortgage Corporation 4,686 5,480 4,524 4,475 5,160 5,777 6,500 6,146 5,875 13 Federal National Mortgage Association 55,182 58,749 70,052 71,366 72,058 70,769 71,303 71,612 72,163 14 Farm Credit Banks 62,923 71,359 71,896 72,047 72,227 72,548 72,652 73,306 73,744 15 Student Loan Marketing Association (8) 421 1,591 1,542 1,990 2,374 2,362 2,472 2,648 MEMO: 16 Federal Financing Bank debt 87,460 110,698 126,424 127,717 129,125 130,528 131,987 133,367 134,505 Lending to federal and federally sponsored 17 Export-Import Bank3 10,654 12,741 14,177 14,232 14,232 14,232 14,493 14,493 14,493 18 Postal Service6 1,520 1,288 1,221 1,221 1,221 1,154 1,154 1,154 1,154 19 Tennessee Valley Authority 9,465 11,390 12,640 12,675 12,760 12,795 12,845 12,950 12,950 20 United States Railway Association6 492 202 194 122 122 122 125 125 125 Other Lending10 21 Farmers Home Administration 39,431 48,821 53,261 52,686 53,541 54,586 54,946 55,776 56,386 22 Rural Electrification Administration 9,1% 13,516 17,157 17,817 17,970 18,076 18,378 18,497 18,638 23 Other 13,982 18,140 27,774 28,964 29,279 29,563 30,046 30,372 30,759 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 • October 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 Dec. Jan/ Feb/ Mar/ Apr/ Mayr June' July 1 All issues, new and refunding1 48,367 47,732 78,950 9,761 3,777 6,165 8,733 10,930 9,426 6,970 4,084 Type of issue 2 General obligation 14,100 12,394 21,088 1,623 869 1,256 2,261 3,456 3,532 1,491 806 3 U.S. government loans2 38 34 225 37 0 3 3 2 6 7 7 4 Revenue 34,267 35,338 57,862 8,138 2,908 4,909 6,472 7,474 5,894 5,479 3,278 5 U.S. government loans2 57 55 461 62 0 2 5 9 14 16 26 Type of issuer 6 State 5,304 5,288 8,406 220 237 252 724 1,745 830 249 484 7 Special district and statutory authority 26,972 27,499 45,000 6,171 2,200 4,250 5,417 5,767 4,440 4,010 2,914 8 Municipalities, counties, townships, school districts 16,090 14,945 25,544 3,370 1,340 1,663 2,592 3,418 4,156 2,711 686 9 Issues for new capital, total 46,736 46,530 74,612 9,531 3,275 5,074 7,513 8,927 6,921 5,562 3,641 Use of proceeds 10 Education 4,572 4,547 6,444 895 355 1,089 831 673 817 780 532 11 Transportation 2,621 3,447 6,256 1,342 50 542 816 560 416 225 269 12 Utilities and conservation 8,149 10,037 14,254 1,891 977 1,050 1,732 2,590 1,504 927 252 13 Social welfare 19,958 12,729 26,605 3,121 907 1,511 2,775 3,114 2,057 2,002 1,854 14 Industrial aid 3,974 7,651 8,256 1,308 323 183 389 452 683 478 265 15 Other purposes 7,462 8,119 12,797 974 663 699 970 1,598 1,444 1,150 469 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 iissssuuee oorr iissssuueerr,, 11998800 11998811 11998822 oorr uussee Dec. Jan. Feb. Mar. Apr. May June July 1 All issues1-2 73,694 70,441 84,198 9,830 7,709 8,491 11,728 10,468 11,489 8,165 6,474 2 Bonds 53,206 45,092 53,636 5,636 4,569 3,839 5,317 6,015 7,017 2,244 2,550 Type of offering 3 Public 41,587 38,103 43,838 4,264 4,569 3,839 5,317 6,015 7,017 2,244 2,550 4 Private placement 11,619 6,989 9,798 1,372 n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 15,409 12,325 13,123 1,204 849 655 962 1,449 2,158 706 60 6 Commercial and miscellaneous 6,693 5,229 5,681 565 562 335 511 1,109 1,055 425 228 7 Transportation 3,329 2,052 1,474 120 32 250 0 175 150 115 148 8 Public utility 9,557 8,963 12,155 944 313 763 950 755 1,115 363 322 9 Communication 6,683 4,280 2,265 372 0 0 650 725 505 250 1,100 10 Real estate and financial 11,534 12,243 18,938 2,431 2,813 1,836 2,244 1,802 2,034 385 692 11 Stocks3 20,489 25,349 30,562 4,194 3,140 4,652 6,411 4,453 4,472 5,921 3,924 Type 12 Preferred 3,631 1,797 5,113 421 594 1,962 893 440 492 665 290 13 Common 16,858 23,552 25,449 3,773 2,546 2,690 5,518 4,013 3,980 5,256 3,634 Industry group 14 Manufacturing 4,839 5,074 5,649 921 888 1,038 1,654 1,424 1,545 2,449 1,015 15 Commercial and miscellaneous 5,245 7,557 7,770 693 994 646 1,225 1,494 922 1,358 1,415 16 Transportation 549 779 709 22 355 283 91 113 221 109 337 17 Public utility 6,230 5,577 7,517 742 350 534 674 639 264 550 72 18 Communication 567 1,778 2,227 1,361 187 2 1,133 37 8 138 20 19 Real estate and financial 3,059 4,584 6,690 455 366 2,149 1,634 746 1,512 1,317 1,065 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 1983 IItteemm 11998811 11998822 Jan. Feb. Mar. Apr. May June July Aug. INVESTMENT COMPANIES' 1 Sales of own shares2 20,596 45,675 8,095 6,115 7,871 8,418 7,577 8,107 6,944 6,032 2 Redemptions of own shares3 15,866 30,078 4,233 3,510 5,066 6,482 4,486 5,416 4,500 4,879 3 Net sales 4,730 15,597 3,862 2,605 2,805 1,936 3,091 2,691 2,444 1,153 4 Assets4 55,207 76,841' 80,384 84,981 90,075 98,669 101,423 106,449 104,279 104,529 5 Cash position5 5,277 5,999 6,943 7,404 7,904 8,496 8,771 9,110 8,815 8,045 6 Other 49,930 70,742 73,441 77,577 82,171 90,173 92,652 97,339 95,464 96,484 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 Q3 Q4 QL Q2 Q3 Q4 QL Q2 1 Corporate profits with inventory valuation and capital consumption adjustment 117755..44 119922..33 116644..88 119977..66 119922..00 116622..00 166.8 116688..55 116611..99 118811..88 221188..22 ? 234.6 227.0 174.2 227.7 217.2 173.2 178.8 177.3 167.5 169.7 203.3 3 Profits tax liability 84.8 82.8 59.2 83.7 75.6 60.3 61.4 60.8 54.0 61.5 76.0 4 149.8 144.1 115.1 144.0 141.6 112.9 117.4 116.5 113.5 108.2 127.2 5 58.6 64.7 68.7 66.4 67.3 67.7 67.8 68.8 70.4 71.4 72.0 6 Undistributed profits 91.2 79.5 46.6 77.6 74.3 45.2 49.6 47.7 43.1 36.7 55.2 7 Inventory valuation -42.9 -23.6 -8.4 -19.4 -15.7 -5.5 -8.5 -9.0 -10.3 -1.7 -10.6 8 Capital consumption adjustment -16.3 -11.0 -1.1 -10.7 -9.5 -5.6 -3.5 0.1 4.7 13.9 25.6 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 • October 1983 1.49 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1982' 1983 AAccccoouunntt 11997777 11997788 11997799'' 11998800'' 11998811'' QI Q2 Q3 Q4 QI 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 QI Q2 Q31 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 51.49 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 44.0 52.6 65.7 73.6 85.5 88.0 88.3 89.5 89.9 91.3 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 86.5 100.4 116.0 122.6 137.2 140.4 140.1 139.8 142.4 145.8 2.6 3.5 1 .9 1.3 } 24.9' 27.5 34.2 37.3 39.1 39.7 42.8 44.3 8 All other 14.3 17.3 J 110044..33 112222..44 114400..99 115500..11 171.4 177.8 179.2 179.5 185.2 190.2 LIABILITIES 5.9 6.5 8.5 13.2 15.4 14.5 16.8 18.6 16.6 16.3 29.6 3344..55 43.3 43.4 51.2 50.3 46.7 45.8 45.2 49.0 Debt 6.2 88..11 8.2 7.5 9.6 9.3 9.9 8.7 9.8 9.6 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 15.1 17.2 19.9 19.4 22.8 24.5 24.5 24.2 26.0 26.7 110044..33 112222..44 114400..99 115500..11 117711..44 117777..88 117799..22 117799..55 118855..22 190.2 1. Beginning Ql 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.52 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 JJJuuulllyyy 333111,,, 111999888333''' May June July May June July May June July 1 Total 84,299 428 789 396 25,322 25,341 23,387 24,894 24,552 22,991 2 Retail automotive (commercial vehicles) 16,809 580 599 503 1,615 1,675 1,615 1,035 1,076 1,112 3 Wholesale automotive 11,747 239 52 -239 6,971 7,468 6,363 6,732 7,416 6,602 4 Retail paper on business, industrial, and farm equipment 27,818 -167 -98 -67 1,344 1,331 1,220 1,511 1,429 1,287 5 Loans on commercial accounts receivable and factored commercial accounts receivable 9.333 -137 -8 189 13,457 13,071 12,616 13,594 13,079 12,427 6 All other business credit 18,592 -87 -244 10 1,935 1,796 1,573 2,022 1,552 1,563 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • October 1983 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1983 IItteemm Feb. Mar. Apr. May June July Aug. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes 1 Purchase price (thousands of dollars) 83.4 90.4 94.6 88.4 80.1 89.6 92.1 93.0 97.3 94.0 2 Amount of loan (thousands of dollars) 59.2 65.3 69.8 66.6 60.5 66.5 67.8 69.2 72.3 66.6 3 Loan/price ratio (percent) 73.2 74.8 76.6 77.9 76.8 74.2 77.5 76.9 76.5 73.0 4 Maturity (years) 28.2 27.7 27.6 27.2 24.2 26.9 26.8 27.3 28.1 25.5 5 Fees and charges (percent of loan amount)2 2.09 2.67 2.95 2.78 2.21 2.09 2.44 2.43 2.54 1.90 6 Contract rate (percent per annum) 12.25 14.16 14.47 12.62 12.97 12.02 12.21 11.90 12.02 11.99 Yield (percent per annum) 7 FHLBB series3 12.65 14.74 15.12 13.16 13.41 12.42 12.67 12.36 12.50 12.35 8 HUD series4 13.95 16.52 15.79 13.18 13.17 13.02 13.09 13.37 14.00 13.90 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.44 16.31 15.31 12.65 12.68 12.50 12.41 12.96 14.23 13.78 10 GNMA securities6 12.55 15.29 14.68 11.94 11.87 11.76 11.72 12.09 12.54 13.01 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 55,104 58,675 66,031 73,555 73,666 73,554 74,116 74,669 74,630 75,057 12 FHA/VA-insured 37,365 39,341 39,718 38,768 38,409 37,901 37,669 37,376 37,092 36,894 13 Conventional 17,725 19,334 26,312 34,788 35,257 35,653 36,446 37,293 37,583 38,163 Mortgage transactions (during period) 14 Purchases 8,099 6,112 15,116 1,594 1,433 1,004 1,579 1,333 1,358 1,213 15 Sales 0 2 2 1 777 586 204 83 786 18 Mortgage commitments1 16 Contracted (during period) 8,083 9,331 22,105 785 1,184 1,023 1,534 2,506 1,198 1,282 17 Outstanding (end of period) 3,278 3,717 7,606 6,475 6,187 5,811 5,726 5,887 5,099 5,165 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 Total 4,362 5,245 5,153 4,450 4,795 4,997 6,026 6,235 6,182 19 FHA/VA 2,116 2,236 1,921 1,000 995 990 984 982 971 20 Conventional 2,246 3,010 3,224 3,450 3,800 4,008 5,042 5,253 5,211 Mortgage transactions (during period) 21 Purchases 3,723 3,789 23,671 1,688 2,849 1,807 2,439 1,494 1,523 n a. 22 Sales 2,527 3,531 24,164 1,756 2,469 1,525 1,408 1,244 1,491 Mortgage commitments9 23 Contracted (during period) 3,859 6,974 28,187 868 1,438 3,079 2,334 2,358 4,671 24 Outstanding (end of period) 447 3,518 7,549 7,238 5,845 7,253 6,889 7,719 10,794 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 QI Q2 1 AH holders 1,471,786 1,583,264 1,654,667 1,624,279 1,632,161 1,654,667 1,682,634 l,723,739r 2 1- to 4-family 986,979 1,065,294 1,112,343 1,089,522 1,097,507 1,112,343 1,134,538 1,164,425' 3 Multifamily 137,134 136,354 136,725 138,332 136,508 136,725 137,938 140,350' 4 Commercial 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 banks1 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 12 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 1 "5 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 21 Life insurance companies 131,081 137,747 141,919 139,539 140,404 141,919 143,329 144,208 22 1- to 4-family 17,943 17,201 16,743 16,451 16,865 16,743 16,855 16,965 23 Multifamily 19,514 19,283 18,847 18,982 18,967 18,847 19,076 19,100 24 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 26 Federal and related agencies 114,300 126,094 138,185 131,456 134,409 138,185 140,028 142,001' 27 Government National Mortgage Association 4,642 4,765 4,227 4,669 4,110 4,227 3,753 3,660 28 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 5,084' 36 1- to 4-family 2,051 2,289 1,980 2,218 2,130 1,980 1,867 1,911' 37 Multifamily 3,589 3,710 3,248 3,690 3,232 3,248 3,271 3,173' 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 69,3% 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 42 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 142,258 163,000 216,654 183,657 198,376 216,654 234,5% 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 52 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 62 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. Digitized for F5. RInAcSluEdeRs a new estimate of residential mortgage credit provided by individuals. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • October 1983 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net ChangeA Millions of dollars 1983 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt Jan. Feb. Mar. Apr. May June July Aug. Amounts outstanding (end of period) 1 Total 313,472 331,697 344,798 343,151 340,343 342,568 344,748 347,189 353,012 358,020 363,662 By major holder 2 Commercial banks 147,013 147,622 152,069 150,906 150,257 151,319 152,408 153,471 156,603 159,666 163,313 3 Finance companies 76,756 89,818 94,322 95,080 93,859 94,817 94,675 95,364 96,349 97,319 97,708 4 Credit unions 44,041 45,954 47,253 46,946 46,757 47,081 47,505 47,838 48,652 49,139 50,121 5 Retailers2 28,448 29,551 30,202 28,859 27,734 27,472 27,455 27,541 27,804 27,900 28,067 6 Savings and loans 9,911 11,598 13,891 14,209 14,860 15,083 15,551 15,842 16,207 16,369 16,615 7 Gasoline companies 4,468 4,403 4,063 4,102 3,780 3,669 3,980 3,943 4,159 4,356 4,457 8 Mutual savings banks 2,835 2,751 2,998 3,049 3,096 3,127 3,174 3,190 3,238 3,271 3,381 By major type of credit 9 Automobile 116,838 125,331 130,227 129,482 129,055 130,959 131,976 133,640 136,183 138,689 114411,,667777 1 1 1 2 1 0 Co D I m n i d m re i e r c e r t c ct l i o a p l a a n b p s a e n r ks 6 2 3 1 6 5 , , , 5 3 2 3 0 3 6 3 3 5 2 3 8 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 57,7 ( 4 ( 03 3 ) ) 57,97 ( ( 1 3 3 ) ) 58,56 < ( 73 3 ) ) 59,29 ( ( 1 3 3 ) ) 60,38 << (( 4 33 33 )) )) 61,87 ( ( 0 3 3 ) ) 63,42 ( ( 5 3 3 ) ) 66,06 ( ( 5 3 3 ) ) 13 Credit unions 21,060 21,975 22,596 22,458 22,360 22,518 22,721 22,880 23,269 23,502 23,972 14 Finance companies 34,242 45,275 48,780 49,284 48,724 49,874 49,964 50,376 51,044 51,762 51,640 15 Revolving 58,352 62,819 67,184 65,562 63,372 63,091 63,521 63,459 64,899 65,856 66,913 16 Commercial banks 29,765 32,880 36,688 36,282 35,481 35,533 35,651 35,536 36,515 37,173 37,973 17 Retailers 24,119 25,536 26,433 25,178 24,111 23,889 23,890 23,980 24,225 24,327 24,483 18 Gasoline companies 4,468 4,403 4,063 4,102 3,780 3,669 3,980 3,943 4,159 4,356 4,457 19 Mobile home 17,322 18,373 18,988 19,291 19,374 19,379 19,400 19,448 19,647 19,750 19,882 20 Commercial banks 10,371 10,187 9,684 9,828 9,806 9,739 9,624 9,581 9,651 9,717 9,741 21 Finance companies 3,745 4,494 4,965 4,981 4,960 4,967 4,970 4,976 4,995 4,982 5,012 22 Savings and loans 2,737 3,203 3,836 3,984 4,112 4,174 4,303 4,384 4,485 4,530 4,598 23 Credit unions 469 489 503 498 496 499 503 507 516 521 531 24 Other 120,960 125,174 128,399 128,816 128,542 129,139 129,851 130,642 132,283 133,725 135,190 25 Commercial banks 45,341 46,474 46,846 47,056 46,999 47,480 47,842 47,970 48,567 49,351 49,534 26 Finance companies 38,769 40,049 40,577 40,815 40,175 39,976 39,741 40,012 40,310 40,575 41,056 27 Credit unions 22,512 23,490 24,154 23,990 23,901 24,064 24,281 24,451 24,867 25,116 25,618 28 Retailers 4,329 4,015 3,769 3,681 3,623 3,583 3,565 3,561 3,579 3,573 3,584 29 Savings and loans 7,174 8,395 10,055 10,225 10,748 10,909 11,248 11,458 11,722 11,839 12,017 30 Mutual savings banks 2,835 2,751 2,998 3,049 3,096 3,127 3,174 3,190 3,238 3,271 3,381 Net change (during period)4 31 Total 1,448 18,217 2,418 2,725 735 2,582 2,271 2,696 4,406 4,840 3,388 By major holder 32 Commercial banks -7,163 607 1,111 410 788 1,354 1,186 1,540 2.422 2,766 22,,331177 33 Finance companies 8,438 13,062 1,024 1,881 -658 487 -520 362 470 909 239 34 Credit unions -2,475 1,913 197 20 43 143 708 288 573 662 510 35 Retailers2 329 1,103 -91 -14 36 422 147 169 368 272 5 36 Savings and loans 1,485 1,682 201 412 677 187 394 374 456 188 147 37 Gasoline companies 739 -65 -51 -78 -200 -35 299 -51 77 5 65 38 Mutual savings banks 95 -85 27 94 49 24 57 14 40 38 105 By major type of credit 39 Automobile 477 8,495 1,491 625 -233 11,,222211 689 1,313 1,973 22,,442211 22,,552211 4 4 4 2 0 1 Co D I m n i d m re i e r c e r t c c t l i o a p l a 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 5 4 2 2 9 7 9 8 -58 ( ( 1 3 3 ) ) 3 ( ( 21 3 3 ) ) 2 ( ( 40 3 3 ) ) 61 ( ( 2 3 3 ) ) 1,0 ( ( 66 3 3 ) ) 1,2 < < 84 3 3 ) ) 1,4 ( ( 82 3 3 ) ) 2,35 < ( 9 3 3 ) ) 43 Credit unions -1,184 914 89 20 15 68 341 137 275 328 232 44 Finance companies 7,491 11,033 875 1,186 -569 913 -264 110 414 611 -70 45 Revolving 1,415 4,467 501 68 -135 1,177 917 514 1,210 821 313 46 Commercial banks -97 3,115 650 130 61 786 468 373 806 556 217 47 Retailers 773 1,417 -98 16 4 426 150 192 327 260 31 48 Gasoline companies 739 -65 -51 -78 -200 -35 299 -51 77 5 65 49 Mobile home 483 1,049 -37 420 204 -61 22 17 151 141 70 50 Commercial banks -276 -186 -74 193 26 -95 -99 -86 28 68 -14 51 Finance companies 355 749 -15 53 59 -23 8 1 -6 7 15 52 Savings and loans 430 466 49 175 120 54 107 98 123 59 64 53 Credit unions -25 20 3 -1 -1 3 6 4 6 7 5 54 Other -927 4,206 463 1,612 899 245 643 852 1,072 1,457 484 55 Commercial banks -960 1,133 8 668 380 423 205 187 304 660 -245 56 Finance companies 592 1,280 164 642 -148 -403 -264 251 62 291 294 57 Credit unions -1,266 975 105 1 29 72 361 147 292 327 273 58 Retailers -444 -314 7 -30 32 -4 -3 -23 41 12 -26 59 Savings and loans 1,056 1,217 152 237 557 133 287 276 333 129 83 60 Mutual savings banks 95 -85 27 94 49 24 57 14 40 38 105 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. A 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 IItteemm 11998800 11998811 11998822 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks1 1 14.30 16.54 16.83 14.81 13.90 13.50 15.47 18.09 18.65 17.47 16.57 16.28 14.99 17.45 18.05 16.73 15.84 15.58 4 1177..3311 1177..7788 1188..5511 1188..8822 1188..7799 1188..7755 Auto finance companies 5 New car 14.82 16.17 16.15 12.05 12.07 11.90 11.94 11.57 11.84 12.77 6 Used car 19.10 20.00 20.75 19.91 19.38 18.91 18.76 18.58 18.28 18.25 OTHER TERMS3 Maturity (months) 7 New car 45.0 45.4 46.0 45.9 45.9 45.8 45.4 45.6 45.7 45.9 8 Used car 34.8 35.8 34.0 37.7 37.7 37.7 37.9 38.0 38.0 38.0 Loan-to-value ratio 9 New car 87.6 86.1 85.3 86.0 84.0 86.0 86.0 87 87 87 10 Used car 94.2 91.8 90.3 90.0 91.0 91.0 92.0 92 93 93 Amount financed (dollars) 11 New car 6,322 7,339 8,178 8,755 8,829 8,662 8,572 8,512 8,642 8,724 12 Used car 3,810 4,343 4,746 4,731 4,802 4,869 4,984 5,039 5,052 5,103 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 • October 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 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11997777 11997788 11997799 11998800 11998811 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. (> 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 522A 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 ••»•> -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.;$ 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.& 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 319.4 369.8 386.0 343.2 377.2 395.3 371.3 392.4 362.0 356.8 434.8 504.9 By public agencies and foreign 2 Total net advances 79.3 102.3 75.2 97.0 97.4 109.3 77.2 113.8 81.0 107.9 110.8 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 68.4 67.3 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 13 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 20 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 21 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 22 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 23 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 25 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 28 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 29 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 42 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 • October 1983 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1983 MMeeaassuurree 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May June July Aug. Sept. 1 Industrial production1 147.0 151.0 138.6 137.4 138.1 140.0 142.6 144.4 146.4 149.6 151.4 153.7 Market groupings 2 Products, total 146.7 150.6 141.8 140.9 140.3 141.6 144.5 146.2 148.1 150.9 152.5 155.0 3 Final, total 145.3 149.5 141.5 140.1 138.9 139.9 142.8 144.5 146.4 149.0 150.2 152.7 4 Consumer goods 145.4 147.9 142.6 143.6 143.4 144.3 147.7 150.4 152.4 155.0 156.0 158.2 5 Equipment 145.2 151.5 139.8 135.3 132.7 133.8 136.2 136.5 138.2 140.7 142.4 145.2 6 Intermediate 151.9 154.4 143.3 143.7 145.3 147.8 150.8 152.2 154.5 158.1 161.0 163.2 7 Materials 147.6 151.6 133.7 132.0 134.9 137.6 139.7 141.7 143.7 147.5 149.6 151.7 Industry groupings 8 Manufacturing 146.7 150.4 137.6 136.7 138.2 140.4 143.1 145.1 147.4 150.4 152.3 155.0 Capacity utilization (percent)1-2 9 Manufacturing 79.6 79.4 71.1 70.0 70.6 71.6 72.9 73.8 74.9 76.3 77.1 78.4 10 Industrial materials industries 80.4 80.7 70.1 68.7 70.1 71.5 72.5 73.5 74.4 76.4 77.4 78.4 11 Construction contracts (1977 = 100)3 107.0 111.0 111.0 127.0 119.0 131.0 129.0 148.0 151.0 137.0' 146.0 n.a. 12 Nonagricultural employment, total4 137.4 138.5 136.2 135.1 134.9 135.0 135.4 135.9 136.5 137.0' 136.4' 137.5 13 Goods-producing, total 110.1 109.4 102.6 99.5 98.9 98.8 99.4 100.2 100.9 101.8 102.2 102.7 14 Manufacturing, total 104.3 103.7 96.9 93.8 93.8 93.9 94.5 95.1 95.6 96.3' 96.6' 97.0 15 Manufacturing, production-worker ... 99.3 98.0 89.4 85.9 86.0 86.1 86.9 87.6 88.2 89.2 89.4 89.9 16 Service-producing 152.4 154.4 154.7 154.6 154.6 154.8 155.2 155.5 156.1 156.3' 155.1' 156.6 17 Personal income, total 343.7 386.5 409.3 421.0 420.7 423.8 426.8' 432.1 434.2 436.3' 437.3' n.a. 18 Wages and salary disbursements 317.7 349.7 367.2 376.8 376.2 378.6 382.2 386.9 389.0 391.8' 393.4' n.a. 19 Manufacturing 264.4 287.3 286.2 286.2 286.9 289.3 293.4 296.4 299.3 302.8' 304.3' n.a. 20 Disposable personal income5 333.8 373.7 397.3 411.2 410.3 413.7 417.4 420.5' 422.0' 429.3' 430.2 n.a. 21 Retail sales" 303.8 330.6 326.0 352.7 348.3 356.4 364.7 376.1 378.9 380.3' 374.3' 380.4 Prices7 22 Consumer 246.8 272.4 289.1 293.1 293.2 293.4 295.5 297.1 298.1 299.3' 300.3' n.a. 23 Producer finished goods 247.0 269.8 280.7 283.9 284.1 283.4 283.0 284.3 285.0 285.7' 286.2' 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 Q4 QI Q2' Q3 Q4 QI Q2' Q3 Q4 Ql Q2' Q3 Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 135.3 138.5 144.5 151.6 193.7 194.6 195.5 196.4 69.8 71.2 73.9 77.2 2 Mining 117.0 116.7 112.3 116.1 165.1 165.2 165.3 165.4 70.9 70.6 67.9 70.2 3 Utilities 166.2 163.6 169.6 176.6 207.4 208.5 209.8 211.1 80.1 78.5 80.8 83.6 4 Manufacturing 134.5 138.4 145.2 152.6 194.8 195.7 196.6 197.5 69.0 70.7 73.8 77.3 5 Primary processing 129.3 137.0 145.2 152.7 193.7 194.3 194.8 195.3 66.8 70.5 74.6 78.2 6 Advanced processing 137.3 139.7 145.1 152.3 195.4 196.5 197.6 198.6 70.2 71.1 73.5 76.7 7 Materials 128.7 134.8 141.7 149.6 191.7 192.3 192.9 193.4 67.1 70.1 73.5 77.4 8 Durable goods 117.1 125.2 134.7 143.8 194.8 195.2 195.6 196.0 60.2 64.2 68.9 73.4 9 Metal materials 66.5 78.6 84.9 89.0 140.3 140.2 139.9 139.8 47.4 56.1 60.7 63.7 10 Nondurable goods 157.0 163.7 171.7 178.8 216.9 217.8 218.8 219.6 72.4 75.2 78.5 81.4 11 Textile, paper, and chemical 160.8 169.3 179.6 187.7 228.3 229.4 230.7 231.6 70.5 73.8 77.9 81.0 12 Paper 147.6 149.9 153.4 n.a. 164.4 165.3 166.1 n.a. 89.7 90.7 92.3 n.a. 13 Chemical 191.9 204.7 219.4 n.a. 292.8 294.8 296.6 n.a. 65.5 69.4 74.0 n.a. 14 Energy materials 121.5 122.2 121.5 127.6 153.3 153.9 154.3 154.7 79.2 79.5 78.7 82.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A47 2.11 Continued Previous cycle1 Latest cycle2 1982 1983 SSeerriieess High Low High Low Sept. Jan. Feb. Mar. Apr. May June' July' Aug.' Sept. Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 76.5 71.1 70.7 71.0 71.8 73.1 73.9 74.8 76.3 77.1 78.1 16 Mining 91.8 86.0 88.5 84.0 69.6 73.8 69.9 68.1 67.5 68.2 68.1 69.5 70.2 70.9 17 Utilities 94.9 82.0 86.7 83.8 81.0 78.4 77.7 79.4 80.9 80.9 80.8 83.6 84.3 83.1 18 Manufacturing 87.9 69.0 87.5 75.5 70.6 70.0 70.6 71.6 72.9 73.8 74.9 76.3 77.1 78.4 19 Primary processing 93.7 68.2 91.4 72.6 69.0 68.6 70.8 72.1 73.4 74.6 75.7 77.0 78.2 79.4 20 Advanced processing .... 85.5 69.4 85.9 77.0 71.4 70.9 70.8 71.5 72.5 73.4 74.4 75.9 76.5 77.8 71 Materials 92.6 69.3 88.9 74.2 69.0 68.7 70.1 71.5 72.5 73.5 74.4 76.4 77.4 78.4 22 Durable goods 91.4 63.5 88.4 68.4 63.2 62.3 64.2 66.0 67.7 68.9 70.0 72.0 73.4 74.8 23 Metal materials 97.8 68.0 95.4 59.4 52.6 53.3 56.1 58.8 59.9 61.0 61.2 62.2 63.8 65.2 24 Nondurable goods 94.4 67.4 91.7 77.5 73.3 73.4 75.3 76.8 77.2 78.7 79.6 80.4 81.2 82.6 25 Textile, paper, and chemical 95.1 65.4 92.3 75.5 71.3 71.4 74.1 75.8 76.4 78.1 79.2 80.1 80.8 82.1 26 Paper 99.4 72.4 97.9 89.8 90.8 90.9 90.8 90.3 91.0 92.9 93.1 96.7 95.5 n.a. 27 Chemical 95.5 64.2 91.3 70.7 66.5 66.4 69.9 71.9 72.6 74.0 75.3 75.6 76.2 n.a. 28 Energy materials 94.5 84.4 88.7 84.4 79.1 80.1 79.2 79.2 78.9 78.5 78.8 82.7 82.7 81.8 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 Mar. Apr. May June July Aug. Sept. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 169,847 172,272 174,451 175,850 175,996 176,151 176,320 176,498 176,648 176,811 2 Labor force (including Armed Forces)1 109,042 110,812 112,384 112,678 112,988 112,947 114,127 114,067 114,469 114,577 3 Civilian labor force 106,940 108,670 110,204 110,484 110,786 110,749 111,932 111,875 112,261 112,368 Employment 4 Nonagricultural industries2 95,938 97,030 96,125 95.729 96,088 96,190 97,264 97,758 98,074 98,655 5 Agriculture 3,364 3,368 3,401 3,375 3,371 3,367 3,522 3,527 3,489 3,290 Unemployment 6 Number 7,637 8,273 10,678 11,381 11,328 11,192 11,146 10,590 10,699 10,423 7 Rate (percent of civilian labor force)... 7.1 7.6 9.7 10.3 10.2 10.1 10.0 9.5 9.5 9.3 8 Not in labor force 60,805 61,460 62,067 63,172 63,008 63,204 62,193 62,431 62,179 62,234 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,406 91,156 89,596 88,814 89,101 89,421 89,844' 90,152' 89,735' 90,468 10 Manufacturing 20,285 20,170 18,853 18,267 18,376 18,493 18,582' 18,733' 18,785' 18,854 11 Mining 1,027 1,132 1,122 1,006 997 994 1,003' 1,017' 1,025' 1,023 12 Contract construction 4,346 4,176 3,912 3,757 3,786 3,860 3,933' 3,974' 4,022' 4.050 13 Transportation and public utilities 5,146 5,157 5,057 4,963 4,988 4,993 4,992' 4,984' 4,343' 5,015 14 Trade 20,310 20,551 20,547 20,350 20,329 20,356 20,494' 20,529' 20,591' 20,494 15 Finance 5,160 5,301 5,350 5,391 5,423 5,435 5,451 5,465' 5,488' 5,485 16 Service 17,890 20,547 20,401 19,356 19,478 19,546 19,668' 19,770' 19,829' 19,889 17 Government 16,241 16,024 15,784 15,724 15,724 15,744 15,721' 15,680' 15,652' 15,658 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 • October 1983 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 1982 11998833 GGrroouuppiinngg p p r o o r - - a 11 v 9988 g 22 . tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Juner July Aug.P Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 138.6 137.3 135.7 134.9 135.2 137.4 138.1 140.0 142.6 144.4 146.4 149.6 151.4 2 Products 60.71 141.8 140.8 139.3 139.0 139.9 140.9 140.3 141.6 144.5 146.2 148.1 150.9 152.5 3 Final products 47.82 141.5 140.0 138.7 138.3 139.5 140.1 138.9 139.9 142.8 144.5 146.4 149.0 150.2 4 Consumer goods 27.68 142.6 143.4 142.2 141.3 142.0 143.6 143.4 144.3 147.7 150.4 152.4 155.0 156.0 5 Equipment 20.14 139.8 135.2 134.0 134.2 136.1 135.3 132.7 133.8 136.2 136.5 138.2 140.7 142.4 6 Intermediate products 12.89 143.3 143.7 141.6 141.8 141.5 143.7 145.3 147.8 150.8 152.2 154.5 158.1 161.0 7 Materials 39.29 133.7 132.0 130.0 128.4 127.8 132.0 134.9 137.6 139.7 141.7 143.7 147.5 149.6 Consumer goods Durable consumer goods 7.89 129.2 131.3 126.5 124.6 125.9 131.6 134.4 136.3 140.5 145.5 149.2 153.0 154.3 9 Automotive products 2.83 129.5 135.5 123.6 120.7 128.7 136.2 144.3 142.6 144.9 152.2 160.0 167.0 167.9 10 Autos and utility vehicles 2.03 99.0 105.8 89.6 86.9 99.0 107.0 120.8 116.4 117.8 124.9 135.4 145.4 147.0 11 Autos 1.90 86.6 94.3 79.5 77.7 87.9 97.1 107.3 99.9 102.7 107.4 118.3 129.8 132.0 12 Auto parts and allied goods .80 206.9 210.7 210.0 206.6 204.0 210.2 203.9 209.3 213.6 221.5 222.6 221.9 221.0 13 Home goods 5.06 129.1 128.9 128.1 126.8 124.3 129.1 128.8 132.8 138.1 141.8 143.2 145.1 146.7 14 Appliances, A/C, and TV 1.40 102.6 99.4 106.1 104.8 94.2 109.5 105.8 105.0 106.1 112.8 114.4 115.3 121.2 15 Appliances and TV 1.33 104.6 104.1 110.5 108.4 98.3 112.9 108.8 108.5 109.7 116.1 118.4 118.7 125.1 16 Carpeting and furniture 1.07 149.7 153.3 151.9 151.4 150.8 149.0 156.7 168.3 180.5 181.9 185.6 189.3 187.4 17 Miscellaneous home goods 2.59 135.0 134.9 130.1 128.6 129.8 131.4 129.7 133.3 137.9 140.9 141.3 143.0 143.6 18 Nondurable consumer goods 19.79 148.0 148.2 148.5 147.9 148.4 148.3 147.0 147.5 150.5 152.3 153.6 155.8 156.6 19 Clothing 4.29 20 Consumer staples 15.50 159.0 158.8 159.1 158.1 158.8 158.6 157.4 158.1 161.1 162.8 164.3 166.4 167.0 ?1 8.33 149.7 148.6 150.2 149.0 149.5 150.9 149.5 148.4 150.9 153.2 155.9 157.0 22 Nonfood staples 7.17 169.7 170.7 169.5 168.7 169.6 167.6 166.5 169.4 172.9 174.0 174.1 177.4 178.8 23 Consumer chemical products .... 2.63 219.9 221.7 220.0 218.9 220.9 222.6 220.9 225.6 225.5 227.8 229.0 233.8 236.1 24 Consumer paper products 1.92 127.7 128.2 125.3 125.1 128.3 127.1 127.9 128.1 129.2 128.6 130.1 133.1 134.5 25 Consumer energy products 2.62 150.2 150.6 151.1 150.2 148.4 142.2 140.2 143.3 152.2 153.4 151.2 153.2 153.8 2266 11..4455 117700..88 116699..55 116699..11 117711..55 116699..33 116644..11 116622..99 116666..11 117755..55 117744..33 117700..55 117733..22 Equipment 21 Business 12.63 157.9 150.5 147.1 146.4 148.1 146.6 142.7 143.7 146.9 147.7 150.2 153.0 154.8 28 Industrial 6.77 134.9 123.8 118.3 117.2 117.9 118.4 113.7 113.1 113.5 114.5 116.3 119.4 122.0 29 Building and mining 1.44 214.2 182.1 169.3 165.7 171.9 173.8 153.6 145.3 141.8 146.2 148.7 154.4 158.6 30 Manufacturing 3.85 107.2 101.6 98.0 97.5 97.0 97.6 97.9 99.7 101.7 102.5 105.0 108.5 110.4 31 Power 1.47 129.9 124.7 121.0 121.0 119.7 118.3 116.0 116.2 116.6 115.0 114.1 113.6 116.3 32 Commercial transit, farm 5.86 184.4 181.4 180.5 180.2 183.0 179.2 176.1 179.2 185.4 186.1 189.5 191.9 192.7 33 Commercial 3.26 253.5 254.0 253.5 254.8 258.6 254.9 251.2 255.7 264.3 265.0 270.9 275.9 275.2 34 Transit 1.93 103.9 95.5 93.2 92.3 96.2 90.8 88.2 90.1 92.0 92.6 93.2 92.0 95.5 35 Farm .67 80.5 76.1 76.8 70.7 65.1 66.0 63.4 63.4 70.2 71.3 70.4 70.8 71.3 36 Defense and space ,7.51 109.4 109.5 111.9 113.6 115.9 116.4 116.1 117.0 118.2 117.6 118.0 120.0 121.5 Intermediate products 37 Construction supplies 6.42 124.3 125.5 122.5 123.4 123.0 127.0 129.7 133.1 136.4 138.4 142.1 145.8 148.6 38 Business supplies 6.47 162.1 161.8 160.5 160.1 159.8 160.3 160.9 162.3 165.2 166.0 166.8 170.3 173.3 39 Commercial energy products 1.14 181.1 179.2 180.4 182.4 182.4 180.6 178.6 180.3 183.3 183.1 181.4 185.6 185.6 Materials 40 Durable goods materials 20.35 125.0 123.0 118.5 116.4 116.5 121.5 125.3 128.7 132.4 134.7 137.0 140.9 143.9 41 Durable consumer parts 4.58 95.3 97.1 91.4 90.0 91.1 96.2 101.6 104.0 106.5 108.5 109.5 115.6 120.1 42 Equipment parts 5.44 166.8 158.3 155.4 155.1 155.3 157.5 158.8 162.5 167.2 170.6 175.8 180.8 182.7 43 Durable materials n.e.c 10.34 116.2 115.8 111.1 107.7 107.4 113.8 118.2 121.9 125.4 127.5 128.7 131.2 134.0 44 Basic metal materials 5.57 79.9 77.7 73.0 69.1 68.7 78.1 82.4 86.0 87.8 89.3 89.6 90.6 93.1 45 Nondurable goods materials 10.47 157.5 158.5 158.2 157.3 155.6 159.7 164.0 167.5 168.7 172.1 174.3 176.4 178.3 46 Textile, paper, and chemical materials 7.62 161.1 162.2 161.5 161.0 160.0 163.7 170.0 174.3 175.9 180.2 182.8 185.5 187.2 47 Textile materials 1.85 102.2 103.3 104.4 102.5 102.1 104.7 106.4 110.6 110.6 114.6 116.0 118.3 121.5 48 Paper materials 1.62 145.6 148.9 148.9 149.7 144.1 150.1 150.1 149.5 150.8 154.4 155.0 161.1 159.4 49 Chemical materials 4.15 193.5 193.7 192.0 191.6 192.0 195.4 206.2 212.5 214.9 219.6 223.6 225.0 227.4 50 Containers, nondurable 1.70 161.4 167.3 164.9 160.8 155.2 162.1 159.6 163.8 163.2 164.3 166.1 166.5 169.6 51 Nondurable materials n.e.c 1.14 127.9 121.1 125.5 127.4 127.2 129.6 130.5 127.7 129.1 129.7 129.9 130.3 131.9 52 Energy materials 8.48 125.1 121.0 122.6 121.4 120.4 123.0 121.8 121.9 121.6 121.1 121.8 127.8 128.0 53 Primary energy 4.65 116.0 111.1 114.4 113.7 113.5 116.5 115.4 114.4 113.9 113.8 112.6 115.6 115.8 54 Converted fuel materials 3.82 136.3 133.0 132.6 130.8 128.9 130.8 129.6 131.1 131.0 129.9 132.9 142.6 142.9 Supplementary groups 55 Home goods and clothing 9.35 119.6 120.1 119.9 119.6 118.2 120.8 119.9 122.0 126.3 129.2 130.2 132.3 134.0 56 Energy, total 12.23 135.7 132.7 134.1 133.3 132.2 132.4 131.0 131.9 133.9 133.8 133.6 138.6 138.9 57 Products 3.76 159.6 159.3 160.0 160.0 158.7 153.8 151.9 154.5 161.7 162.4 160.4 163.0 163.4 58 Materials 8.48 125.1 121.0 122.6 121.4 120.4 123.0 121.8 121.9 121.6 121.1 121.8 127.8 128.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1982 1983 Grouping c S o I d C e p p o ro r- - a 1 v 98 g 2 . tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Juner July Aug.P Sept.'' Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities 12.05 146.3 139.7 140.4 140.4 140.1 141.3 141.7 137.7 138.9 139.7 139.6 143.8 145.3 145.0 2 Mining 6.36 126.1 114.7 115.9 116.8 118.4 121.9 114.5 112.6 111.6 112.8 112.6 114.9 116.1 117.3 3 Utilities 5.69 168.7 167.5 167.8 166.7 164.2 163.1 171.9 165.8 169.3 169.7 169.8 176.0 177.9 175.9 4 Electric 3.88 190.5 188.2 188.4 188.3 185.6 184.4 191.6 188.2 192.7 192.9 192.0 201.1 203.6 200.4 5 Manufacturing 87.95 137.6 137.1 135.0 134.0 134.5 136.7 138.0 140.4 143.1 145.1 147.4 150.4 152.3 155.0 6 Nondurable 35.97 156.2 156.7 156.2 155.3 155.6 157.4 157.5 160.7 163.3 165.4 167.8 170.2 172.1 174.2 7 Durable 51.98 124.7 123.5 120.3 119.3 119.9 122.5 124.5 126.3 129.1 131.0 133.2 136.8 138.6 141.7 Mining 8 Metal 10 .51 82.4 55.4 63.1 70.4 74.9 81.7 71.2 75.2 79.8 84.4 82.9 82.5 82.2 9 Coal 11.12 .69 142.7 127.9 143.2 134.1 129.7 144.8 135.0 127.3 125.3 125.6 124.6 139.9 141.2 140.2 10 Oil and gas extraction 13 4.40 131.1 121.0 119.1 120.3 122.9 124.6 117.5 114.4 112.2 112.5 112.6 114.1 115.2 116.7 11 Stone and earth minerals 14 .75 112.1 106.3 108.5 111.9 111.7 112.8 108.1 114.0 117.7 122.5 121.7 118.9 121.6 Nondurable manufactures 12 Foods 20 8.75 151.1 149.0 151.5 152.0 152.8 154.4 147.0 152.0 153.7 155.6 157.7 159.3 13 Tobacco products 21 .67 118.0 113.3 110.6 113.0 109.9 104.7 115.9 113.4 114.8 112.9 120.0 112.9 14 Textile mill products 22 2.68 124.5 126.1 125.9 123.1 122.2 125.8 128.7 131.9 136.6 139.6 141.8 146.7 149.3 15 Apparel products 23 3.31 16 Paper and products 26 3.21 150.8 154.3 155.0 154.5 151.i 158.8 160.9 156.3 157.0 161.5 163.0 165.0 167.3 168.9 17 Printing and publishing 27 4.72 144.1 144.3 142.0 141.7 142.8 141.3 135.8 145.9 145.7 145.2 147.4 151.0 154.3 156.2 18 Chemicals and products 28 7.74 196.1 196.4 194.1 192.8 195.9 197.6 200.0 205.7 208.5 211.0 214.7 217.6 220.2 19 Petroleum products 29 1.79 121.8 122.6 123.8 120.0 118.7 113.5 108.6 114.8 120.6 123.8 123.0 125.2 123.1 127.2 20 Rubber and plastic products 30 2.24 254.7 262.0 256.3 250.2 249.7 256.2 275.2 272.0 283.0 288.0 293.8 296.1 303.7 21 Leather and products 31 .86 60.9 60.9 59.5 57.7 56.0 59.5 64.1 59.4 58.7 59.6 60.1 62.3 62.9 Durable manufactures 22 Ordnance, private and government 19.91 3.64 86.9 86.9 89.5 91.9 92.5 93.5 93.4 91.9 93.2 92.6 93.3 95.2 96.5 97.9 23 Lumber and products 24 1.64 112.6 119.9 117.2 119.1 121.4 130.0 130.5 128.7 132.1 135.8 137.4 141.3 144.5 24 Furniture and fixtures 25 1.37 151.9 155.7 154.3 152.4 153.7 150.0 162.5 161.0 167.7 169.6 173.1 174.9 175.6 25 Clay, glass, stone products 32 2.74 128.2 130.4 128.1 127.3 125.4 128.0 124.8 135.6 138.3 139.2 141.7 145.8 149.7 26 Primary metals 33 6.57 75.3 73.2 69.6 63.6 63.5 73.1 79.4 81.2 83.1 84.9 84.8 85.5 87.4 89.8 27 Iron and steel 331.2 4.21 61.7 56.4 54.1 47.5 46.6 59.0 64.3 66.9 68.5 69.5 69.7 71.8 74.6 28 Fabricated metal products 34 5.93 114.8 112.3 107.6 107.0 107.3 107.6 112.3 113.9 115.3 115.5 118.5 122.5 125.1 127.6 29 Nonelectrical machinery 35 9.15 149.0 144.9 140.4 139.6 139.2 138.0 137.1 138.6 143.1 146.1 149.5 154.2 157.1 160.6 30 Electrical machinery 36 8.05 169.3 167.0 165.4 165.5 165.5 169.5 170.1 173.8 177.2 180.1 182.4 188.2 187.9 193.9 31 Transportation equipment 37 9.27 104.9 105.3 100.8 100.2 103.7 106.3 110.5 110.1 111.4 113.8 116.6 119.7 121.4 123.6 32 Motor vehicles and parts 371 4.50 109.8 113.5 103.0 101.7 108.8 113.9 124.8 123.2 125.5 130.4 136.2 142.3 145.1 148.9 33 Aerospace and miscellaneous transportation equipment... 372-9 4.77 100.4 97.6 98.6 98.7 98.9 99.1 97.0 97.7 98.1 98.1 98.1 98.5 99.1 99.8 34 Instruments 38 2.11 161.9 161.9 157.4 155.8 155.2 154.5 151.6 154.0 155.1 156.0 156.1 159.3 162.3 165.8 35 Miscellaneous manufactures 39 1.51 137.0 132.9 129.6 129.5 128.2 131.3 130.6 136.9 145.0 149.0 151.0 153.7 153.8 155.6 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 579.6 575.3 570.0 568.4 572.9 578.1 578.4 584.1 592.6 601.8 610.5 619.4 623.7 636.0 37 Final 390.9 451.1 446.3 442.8 441.3 445.8 448.3 447.3 451.3 457.7 465.6 471.8 477.8 479.7 490.3 38 Consumer goods . 277.5 308.0 309.3 306.6 305.6 306.8 310.9 312.0 313.8 318.8 325.6 330.4 333.4 335.5 341.4 39 Equipment 113.4 143.1 137.0 136.2 135.7 138.9 137.4 135.3 137.5 138.9 140.0 141.4 144.4 144.2 148.9 40 Intermediate 116.6 128.5 129.0 127.2 127.1 127.1 129.8 131.1 132.8 134.9 136.2 138.7 141.6 144.0 145.7 1. 1972 dollar value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • October 1983 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1982 1983 IItteemm 11998800 11998811 11998822 Nov. Dec. Jan. Feb. Mar. Apr. May' June' July Aug. 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 1,782 1,666 ? 1-family 710 564 546 738 753 866 835 859 841 940 1,013 920 913 3 2-or-more-family 480 421 454 489 573 581 644 608 695 695 748 862 753 4 Started 1,292 1,084 1,062 1,361 1,280 1,694 1,784 1,605 1,506 1,807 1,736 1,785 1,935 1-family 852 705 663 868 842 1,126 1,103 1,008 1,001 1,183 1,127 1,025 1,135 6 2-or-more-family 440 379 400 493 438 568 681 597 505 624 609 760 800 8 7 Un 1 d - e fa r m c i o ly n struction, end of period1 8 5 9 1 6 5 6 3 8 8 2 2 4 7 0 2 0 0 7 39 1 5 2 4 7 1 3 1 0 4 7 2 5 8 6 4 7 5 9 5 6 4 8 7 2 2 8 4 8 8 5 9 9 9 5 0 1 0 8 9 5 3 3 5 5 9 5 6 4 8 2 i T 9 2-or-more-family 382 301 320 317 319 329 341 356 370 382 400 426 1 1 1 0 1 Co 1 m -f p a l m et i e ly d 1, 9 5 5 0 7 2 1, 8 2 1 6 8 6 1, 6 0 3 0 1 6 1, 6 05 7 3 9 1, 6 0 4 3 7 5 1, 7 19 8 5 2 1, 7 1 0 3 9 8 1, 7 14 8 7 8 1, 8 1 0 6 3 4 1, 8 3 5 5 1 3 1, 9 3 5 8 4 3 1, 9 4 8 1 4 3 n. | a. 12 2-or-more-family 545 447 374 374 388 413 429 359 361 502 429 429 1 1 13 Mobile homes shipped 222 241 239 251 243 284 283 276 291 298 308 299 Merchant builder activity in 1-family units 14 Number sold 545 436 413 545 529 611 593 611 635 665 666 660099 557788 15 Number for sale, end of period1 342 278 255 246 251 259 262 262 266 273 285 292 297 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 75.9 75.2 77.1 Average 17 Units sold 76.4 83.1 83.8 87.8 86.7 87.2 86.8 8866..22 8877..66 88.8 9900..66 8888..00 9922..44 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 2,790 2,710 Price of units sold (thousands of dollars)2 19 Median 62.1 66.1 67.7 67.7 67.8 68.1 68.2 68.9 6688..88 6699..22 7711..44 7711..88 7711..99 20 Average 72.7 78.0 80.4 80.4 80.6 80.0 80.3 81.1 81.3 81.7 84.7 84.2 85.2 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 230,712 239,418 232,048 243,714 240,207 247,914 243,032 241,908 247,360^ 254,763 264,321 269,495 276,099 ?? 175,700 186,069 180,979 190,520 190,768 195,032 194,331 194,865 199,462' 206,029 214,729 218,399 223,462 73 87,262 86,567 74,809 81,245 86,018 89,701 93,568 96,127 101,961' 107,494 113,524 118,094 120,235 24 Nonresidential, total 88,438 99,502 106,170 109,275 104,750 105,331 100,763 98,738 97,501' 98,535 101,205 100,305 103,227 Buildings 75 Industrial 13,839 17,031 17,346 16,716 15,631 15,182 14,315 14,263 13,223 13,047 13,136 1122,,222277 1133,,443388 76 Commercial 29,940 34,243 37,281 37,861 36,934 38,167 36,675 35,469 33,619 33,291 35,898 35,871 36,857 77 Other 8,654 9,543 10,507 11,517 11,784 11,983 11,664 11,598 10,770 11,237 10,974 11,250 12,136 28 Public utilities and other 36,005 38,685 41,036 43,181 40,401 39,999 38,109 37,408 39,889r 40,960 41,197 40,957 40,796 79 Public 55,011 53,346 51,068 53,194 49,439 52,882 48,701 47,043 47,897' 48,734 49,592 51,096 52,637 30 1,880 1,966 2,205 2,572 2,432 2,341 2,421 2,541 2,784' 2,255 1,894 2,336 2,196 31 13,770 13,599 13,521 14,409 13,048 13,966 12,509 11,866' 12,900 13,044 12,925 14,091 15,274 3? Conservation and development 5,089 5,300 5,029 4,708 4,625 4,756 4,532 4,894 5,023' 4,548 4,853 5,612 5,100 33 Other 34,272 32,481 30,313 31,505 29,334 31,819 29,239 27,742 27,19c 28,887 29,920 29,057 30,067 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 Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (at annual rate) IIInnndddeeexxx llleeevvveeelll IIIttteeemmm AAAuuuggg... 1982 1983 1983 111999888333 11998822 11998833 (((111999666777 AAuugg.. AAuugg.. === 111000000)))''' Sept. Dec. Mar. June Apr. May June July Aug. CONSUMER PRICES2 1 AH items 5.9 2.6 4.1 .5 .4 5.4 .6 .5 .2 .4 .4 300.3 2 Food 3.6 1.7 .6 .8 2.8 1.7 .4 .3 -.3 -.1 .2 292.2 3 Energy items 2.0 1.2 8.1 10.2 -25.1 21.0 2.0 2.5 .3 .3 .7 429.8 4 All items less food and energy 7.1 3.0 4.7 -.3 4.4 3.9 .4 .3 .3 .6 .5 288.2 5 Commodities 5.7 4.5 2.4 5.4 5.7 2.9 .1 .2 .4 .7 .5 244.2 6 Services 8.2 1.7 4.6 -4.8 3.7 4.6 .5 .3 .3 .4 .4 339.3 PRODUCER PRICES 7 Finished goods 4.0 1.4 4.2 5.2 -4.7 2.9 .C .2' .5 .1 .4 286.2 8 Consumer foods 1.3 .5 -7.7 .8 4.1 -.3 1.1 -.5 -.6 -.6 .4 261.0 9 Consumer energy .3 -5.4 30.9 7.0 -35.5 12.0 -2.5' 2.3' 3.2 .2 .3 798.8 10 Other consumer goods 5.6 3.1 4.2 7.9 -2.0 2.5 .1 .(K .5 .5 .2 240.6 11 Capital equipment 5.6 2.6 3.5 3.6 2.0 2.1 -.1' .4' .2 .1 .7 288.0 12 Intermediate materials3 .5 1.0 2.3 1.5 -4.7 3.6 .9 .3 .4 319.2 13 Excluding energy .8 2.3 1.0 1.0 .8 2.8 -.1 .4 .4 .3 .4 295.9 Crude materials 14 Foods -4.7 2.8 -26.4 1.3 18.1 .8 3.0 -1.2 -1.6 -2.6 3.9 256.6 15 Energy 1.9 -2.0 8.7 6.4 -9.2 -4.8 -i.<y -.2' .0 -.6 -.2 785.9 16 Other -13.3 9.6 2.9 -8.0 -16.2 59.3 2.5' 4.8' 4.6 2.2 1.0 255.7 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 • October 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 Ql Q2' 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 3,272.0 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 2,147.0 3 Durable goods 214.7 236.1 244.5 242.9 243.4 252.1 258.5 277.7 4 Nondurable goods 668.8 733.9 761.0 754.7 766.6 773.0 777.1 799.6 5 Services 784.5 887.1 986.4 975.2 998.9 1,021.8 1,037.4 1,069.7 6 Gross private domestic investment 401.9 474.9 414.5 432.5 425.3 377.4 404.1 450.1 7 Fixed investment 411.7 456.5 439.1 443.7 430.2 433.8 443.5 464.6 8 Nonresidential 308.8 352.2 348.3 352.7 342.3 337.0 332.1 336.3 9 Structures 110.9 133.4 141.9 144.2 140.0 138.6 132.9 127.4 10 Producers' durable equipment 197.9 218.9 206.4 208.5 202.2 198.4 199.3 208.8 li Residential structures 102.9 104.3 90.8 91.0 87.9 96.8 111.3 128.4 12 Nonfarm 98.1 99.8 86.0 86.1 83.4 91.2 106.7 123.3 13 Change in business inventories -9.8 18.5 -24.5 -11.2 -4.9 -56.4 -39.4 -14.5 14 Nonfarm -4.5 10.9 -23.1 -8.8 -2.3 -53.7 -39.0 -10.3 15 Net exports of goods and services 24.0 26.3 17.4 33.3 .9 5.6 17.0 -8.5 lb Exports 338.8 368.8 347.6 364.5 346.0 321.6 326.9 327.1 17 Imports 314.8 342.5 330.2 331.2 345.0 316.1 309.9 335.6 18 Government purchases of goods and services 537.8 595.7 649.2 631.6 655.7 679.7 677.4 683.4 19 Federal 197.1 229.2 258.7 244.1 261.7 279.2 273.5 273.7 20 State and local 340.8 366.5 390.5 387.5 394.0 400.5 404.0 409.7 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 3,286.6 22 Goods 1,140.6 1,291.9 1,280.9 1,290.8 1,286.7 1,264.8 1,292.2 1,346.8 23 Durable 477.9 528.0 500.8 514.3 518.4 474.0 482.7 536.8 24 Nondurable 662.7 763.9 780.1 776.5 768.3 790.8 809.5 810.0 25 Services 1,225.2 1,374.2 1,511.2 1,496.4 1,527.2 1,560.5 1,588.4 1,623.4 26 Structures 266.0 288.0 281.0 283.0 276.9 284.3 290.9 301.9 27 Change in business inventories -9.8 18.5 -24.5 -11.2 -4.9 -56.4 -39.4 -14.5 28 Durable goods -4.1 3.6 -15.5 -2.5 6.4 -45.0 -38.2 -8.9 29 Nondurable goods -5.7 14.9 -9.1 -8.7 -11.3 -11.4 -1.2 -5.7 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 1,525.1 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 2,612.8 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 1,968.7 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 1,647.1 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 1,323.8 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 117.5 120.2 109.0 104.9 103.6 116.2 120.6 127.2 40 Business and professional1 95.6 89.7 87.5 88.1 87.8 90.2 98.4 106.2 41 Farm1 21.8 30.5 21.5 16.8 15.8 26.0 22.2 21.0 42 Rental income of persons2 31.5 41.4 49.9 49.0 50.9 52.3 54.1 54.8 43 Corporate profits1 175.4 192.3 164.8 166.8 168.5 161.9 181.8 218.2 44 Profits before tax3 234.6 227.0 174.2 178.8 177.3 167.5 169.7 203.3 45 Inventory valuation adjustment -42.9 -23.6 -8.4 -8.5 -9.0 -10.3 -1.7 -10.6 46 Capital consumption adjustment -16.3 -11.0 -1.1 -3.5 .1 4.7 13.9 25.6 47 Net interest 192.6 249.9 261.1 268.3 256.4 254.7 248.3 243.8 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 Q2r 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 2,713.6 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 1,648.4 3 Commodity-producing industries 468.1 509.5 509.2 513.7 508.9 499.5 508.6 522.2 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' income1 117.5 120.2 109.0 104.9 103.6 116.2 120.6 127.2 10 Business and professional1 95.6 89.7 87.5 88.1 87.8 90.2 98.4 106.2 11 Farm1 21.8 30.5 21.5 16.8 15.8 26.0 22.2 21.0 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 266.0 341.3 366.2 371.9 364.8 363.1 357.2 357.1 15 Transfer payments 297.6 337.2 374.6 364.2 380.4 399.0 398.5 405.3 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 2,713.6 19 LESS: Personal tax and nontax payments 336.5 387.4 402.1 404.2 399.8 404.1 401.8 412.6 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 2,301.0 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 2,209.5 22 EQUALS: Personal saving 110.2 135.3 125.4 127.1 123.0 120.8 121.7 91.5 MEMO: Per capita (1972 dollars) 23 Gross national product 6,478 6,584 6,399 6,425 6,393 6,355 6,382 6,518 24 Personal consumption expenditures 4,092 4,161 4,179 4,180 4,178 4,205 4,226 4,319 25 Disposable personal income 4,487 4,587 4,567 4,574 4,558 4,576 4,599 4,629 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 405.9 483.8 405.8 439.5 397.9 351.3 398.5 420.6 28 Gross private saving 435.4 509.6 521.6 520.7 524.9 526.6 541.5 535.0 29 Personal saving 110.2 135.3 125.4 127.1 123.0 120.8 121.7 91.5 30 Undistributed corporate profits1 32.1 44.8 37.0 37.5 38.9 37.5 48.9 70.1 31 Corporate inventory valuation adjustment -42.9 -23.6 -8.4 -8.5 -9.0 -10.3 -1.7 -10.6 Capital consumption allowances 32 Corporate 179.3 202.9 222.0 220.2 224.5 227.7 228.3 229.8 33 Noncorporate 113.8 126.6 137.2 135.9 138.5 140.5 142.6 143.5 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 -114.4 36 Federal -61.3 -62.2 -147.1 -113.2 -158.3 -208.2 -183.3 -166.1 37 State and local 30.6 35.3 31.3 32.0 31.3 32.9 40.4 51.7 38 Capital grants received by the United States, net 1.2 1.1 .0 .0 .0 .0 .0 .0 39 Gross investment 408.2 478.9 406.2 441.3 400.5 355.5 397.4 417.1 40 Gross private domestic 401.9 474.9 414.5 432.5 425.3 377.4 404.1 450.1 41 Net foreign 6.3 4.0 -8.3 8.7 -24.8 -21.9 -6.7 -33.0 42 Statistical discrepancy 2.3 -4.9 .5 1.7 2.5 4.2 -1.2 -3.5 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 • October 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 Q2 Q3 Q4 QK Q2" 1 Balance on current account 421 4,592 -11,211 11,,443344 -6,596 --66,,662211 --33,,558877 -9,712 22,,221188 -8,143 --55,,554466 --33,,339955 -8,942 3 Merchandise trade balance2 -25,544 -28,067 -36,389 --55,,885544 -13,078 --1111,,335544 --88,,881100 -14,661 4 Merchandise exports 224,237 237,019 211,217 5544,,999966 52,241 4488,,334444 4499,,550066 48,913 5 Merchandise imports -249,781 -265,086 -247,606 --6600,,885500 -65,319 --5599,,669988 --5588,,331166 -63,574 6 Military transactions, net -2,286 -1,355 179 220011 54 --2266 551166 201 7 Investment income, net3 29,570 33,484 27,304 77,,553366 6,821 66,,000088 55,,008899 5,933 8 Other service transactions, net 5,738 7,462 5,729 11,,335533 1,349 11,,118822 11,,117799 653 9 Remittances, pensions, and other transfers -2,347 -2,382 -2,621 -702 -656 -661 -608 -640 10 U.S. government grants (excluding military) -4,709 -4,549 -5,413 -1,100 -1,086 -1,770 -953 -1,198 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,140 -5,078 -5,732 -1,489 -2,502 -934 -1,053 -1,126 12 Change in U.S. official reserve assets (increase, -) -8,155 -5,175 -4,965 -1,132 -794 -1,949 -787 16 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -16 -1,823 -1,371 -241 -434 -297 -98 -303 15 Reserve position in International Monetary Fund -1,667 -2,491 -2,552 -814 -459 -732 -2,139 -212 16 Foreign currencies -6,472 -861 -1,041 -77 99 -920 1,450 531 17 Change in U.S. private assets abroad (increase, -)3 -72,757 -100,348 -107,348 -38,313 -22,803 -16,670 -19,859 -259 18 Bank-reported claims -46,838 -83,851 -109,346 -38,653 -20,631 -17,511 -15,935 3,547 19 Nonbank-reported claims -3,174 -1,181 6,976 -277 998 2,337 -2,374 n.a. 20 U.S. purchase of foreign securities, net -3,524 -5,636 -7,986 -546 -3,331 -3,527 -1,808 -3,222 21 U.S. direct investments abroad, net3 -19,221 -9,680 3,008 1,163 161 2,031 258 -584 22 Change in foreign official assets in the United States (increase, +) 15,566 5,430 3,172 1,930 2,642 1,661 49 2,686 23 U.S. Treasury securities 9,708 4,983 5,759 -2,094 4,834 4,346 3,008 2,012 24 Other U.S. government obligations 2,187 1,289 -670 258 -71 -556 -371 -164 25 Other U.S. government liabilities4 685 -28 504 459 -160 130 -270 332 26 Other U.S. liabilities reported by U.S. banks -159 -3,479 -2,054 3,271 -1,911 -1,717 -1,939 1,333 27 Other foreign official assets5 3,145 2,665 -367 36 -50 -542 -379 -827 28 Change in foreign private assets in the United States (increase, +)3 39,356 75,248 84,693 29,683 14,971 9,856 16,404 8,016 29 U.S. bank-reported liabilities 10,743 42,154 64,263 24,778 10,977 2,823 10,588 1,128 30 U.S. nonbank-reported liabilities 6,845 942 -3,104 -2,517 -425 20 -2,136 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,645 2,982 7,004 2,095 1,364 2,257 2,912 2,934 32 Foreign purchases of other U.S. securities, net 5,457 7,171 6,141 2,434 420 1,975 2,986 2,464 33 Foreign direct investments in the United States, net3 13,666 21,998 10,390 2,893 2,635 2,781 2,054 1,490 34 Allocation of SDRs 1,152 1,093 0 0 0 0 0 0 35 Discrepancy 29,556 24,238 41,390 7,887 15,082 14,657 8,833 379 881 -1,190 1,042 -212 801 37 Statistical discrepancy in recorded data before seasonal adjustment 29,556 24,238 41,390 7,006 16,272 13,615 9,045 -422 MEMO: Changes in official assets 38 U.S. official reserve assets (increase, -) -8,155 -5,175 -4,965 -1,132 -794 -1,949 -787 16 39 Foreign official assets in the United States (increase, +) 14,881 5,458 2,668 1,471 2,802 1,531 319 2,354 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 3,024 368 -1,162 -1,397 -3,349 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 756 680 644 125 267 158 42 30 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 Feb. Mar. Apr. May June July Aug. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 220,626 233,677 212,193 16,326 16,752 16,074 15,566 17,008 16,629 16,630 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 244,871 261,305 243,952 19,015 19,525 19,771 21,514 21,024 21,950 22,782 3 Trade balance -24,245 -27,628 -31,759 -2,689 -2,774 -3,697 -5,948 -4,016 -5,321 -6,152 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 Mar. Apr. May June July Aug. Sept. 1 Total 26,756 30,075 33,958 34,261 34,173 33,931 33,876 33,373 32,624r 33,066 2 Gold stock, including Exchange Stabilization Fund1 11,160 11,151 11,148 11,138 11,132 11,132 11,131 11,131 11,128 11,128 3 Special drawing rights2-3 2,610 4,095 5,250 5,229 5,192 5,525 5,478 5,496 5,543 5,628 4 Reserve position in International Monetary Fund2 2,852 5,055 7,348 9,293 9,284 9,424 9,413 9,475 9,296' 9,399 5 Foreign currencies4'5 10,134 9,774 10,212 8,601 8,565 7,850 7,854 7,271 6,657 6,911 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. I, 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 Mar. Apr. May June July Aug. Sept. 1 Deposits 411 505 328 424 322 445 279 369 248 297 Assets held in custody 2 U.S. Treasury securities' 102,417 104,680 112,544 114,999 114,880 115,401 114,499 118,105 113,476 113,498 3 Earmarked gold2 14,965 14,804 14,716 14,726 14,723 14,727 14,724 14,727 14,693 14,621 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 • October 1983 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1983 ly oz Jan. Feb. Mar/ Apr. May June July All foreign countries 1 Total, all currencies 401,135 462,847 469,367 462,112 458,201 465,332 453,219 452,173 465,770 455,871 2 Claims on United States 28,460 63,743 91,768 89,695 87,476r 93,718 91,262 91,888 97,689 97,205 3 Parent bank 20,202 43,267 61,629 59,694 58,451' 63,342 61,792 62,596 65,821 67,726 4 Other 8,258 20,476 30,139 30,001 29,025 30,376 29,470 29,292 31,868 29,479 5 Claims on foreigners 354,960 378,954 358,195 352,906 351,456' 352,623 343,994 342,240 350,007 340,716 6 Other branches of parent bank 77,019 87,821 91,143 89,488 89,772 89,099 84,839 86,436' 88,352 84,891 7 Banks 146,448 150,763 133,577 131,028 129,218r 132,310 127,290 123,997' 130,356 123,423 8 Public borrowers 28,033 28,197 24,090 24,602 24,734 24,715 25,114 25,547 25,443 25,864 9 Nonbank foreigners 103,460 112,173 109,385 107,788 107,732 106,499 106,751 106,260 105,856 106,538 10 Other assets 17,715 20,150 19,404 19,511 19,269 18,991 17,963 18,045 18,074 17,950 11 Total payable in U.S. dollars 291,798 350,735 361,647 354,749 350,562 356,641 344,541 343,771 357,405 350,505 12 Claims on United States 27,191 62,142 90,048 88,001 85,868' 91,281 88,985 89,532 95,414 94,749 13 Parent bank 19,896 42,721 60,973 58,926 57,766r 62,409 61,156 61,797 64,494 66,300 14 Other 7,295 19,421 29,075 29,075 28,102 28,872 27,829 27,735 30,920 28,449 15 Claims on foreigners 255,391 276,937 259,583 254,926 253,070' 253,757 245,022 243,838 251,400 244,982 16 Other branches of parent bank 58,541 69,398 73,512 71,188 71,937 70,782 66,337 67,787' 69,496 67,182 17 Banks 117,342 122,110 106,275 103,596 100,830' 103,642 98,603 96,013r 102,933 97,051 18 Public borrowers 23,491 22,877 18,374 18,785 18,962 18,766 18,941 19,001 18,707 19,098 19 Nonbank foreigners 56,017 62,552 61,422 61,357 61,341 60,567 61,141 61,037 60,264 61,651 20 Other assets 9,216 11,656 12,016 11,822 11,624 11,603 10,534 10,401 10,591 10,774 United Kingdom 21 Total, all currencies 144,717 157,229 161,067 157,464 156,577 156,022 152,408 151,821 155,629 153,229 22 Claims on United States 7,509 11,823 27,354 27,175 26,423 26,259 25,139 24,847 26,277 26,009 23 Parent bank 5,275 7,885 23,017 22,539 21,962 21,912 20,657 20,456 21,382 20,846 24 Other 2,234 3,938 4,337 4,636 4,461 4,347 4,482 4,391 4,895 5,163 25 Claims on foreigners 131,142 138,888 127,734 124,354 124,214 123,993 121,727 121,187 123,835 121,781 26 Other branches of parent bank 34,760 41,367 37,000 34,959 35,437 36,171 32,973 33,361 35,787 25,636 27 Banks 58,741 56,315 50,767 49,497 48,580 48,976 48,301 47,623 48,328 46,596 28 Public borrowers 6,688 7,490 6,240 6,421 6,592 6,337 6,591 6,599 6,570 6,425 29 Nonbank foreigners 30,953 33,716 33,727 33,477 33,605 32,509 33,862 33,604 33,150 33,124 30 Other assets 6,066 6,518 5,979 5,935 5,940 5,770 5,542 5,787 5,517 5,439 31 Total payable in U.S. dollars 99,699 115,188 123,740 120,233 119,273 118,891 113,170 112,585 118,023 116,526 32 Claims on United States 7,116 11,246 26,761 26,581 25,829 25,597 24,374 24,044 25,536 25,179 33 Parent bank 5,229 7,721 22,756 22,250 21,700 21,626 20,354 20,092 21,017 20,433 34 Other 1,887 3,525 4.005 4,331 4,129 3,971 4,020 3,952 4,519 4,746 35 Claims on foreigners 89,723 99,850 92,228 89,137 88,973 88,797 84,981 84,779 88,587 87,447 36 Other branches of parent bank 28,268 35,439 31,648 29,380 29,918 30,589 27,131 27,579 30,025 30,126 37 Banks 42,073 40,703 36,717 35,616 34,499 34,442 33,228 32,801 34,417 33,082 38 Public borrowers 4,911 5,595 4,329 4,600 4,789 4,413 4,522 4,497 4,547 4,410 39 Nonbank foreigners 14,471 18,113 19,534 19,541 19,767 19,353 20,100 19,902 19,598 19,829 40 Other assets 2,860 4,092 4,751 4,515 4,471 4,497 3,815 3,762 3,900 3,900 Bahamas and Caymans 41 Total, all currencies 123,837 149,108 145,091 142,115 138,730 145,663 142,049 140,941 146,792 142,433 42 Claims on United States 17,751 46,546 59,403 57,302 56,225 62,576 61,417 62,526 66,355 66,289 43 Parent bank 12,631 31,643 34,653 32,958 32,839 37,967 37,971 39,031 40,497 42,944 44 Other 5,120 14,903 24,750 24,344 23,386 24,609 23,446 23,495 25,858 23,345 45 Claims on foreigners 101,926 98,057 81,387 80,722 78,527 79,150 76,959 74,759 76,834 72,427 46 Other branches of parent bank 13,342 12,951 18,720 20,091 19,730 17,512 18,295 18,537 16,658 15,583 47 Banks 54,861 55,151 42,636 40,770 39,101 42,347 39,607 37,531 41,778 37,303 48 Public borrowers 12,577 10,010 6,413 6,434 6,494 6,540 6,388 6,170 5,935 6,541 49 Nonbank foreigners 21,146 19,945 13,618 13,427 13,202 12,751 12,669 12,521 12,463 13,000 50 Other assets 4,160 4,505 4,301 4,091 3,978 3,937 3,673 3,656 3,603 3,17 51 Total payable in U.S. dollars 117,654 143,743 139,540 136,278 132,884 139,549 136,115 135,112 140,702 136,299 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.14 Continued 1983 170U Jan. Feb. Mar/ Apr. May June July All foreign countries 52 Total, all currencies 401,135 462,847 469,367 462,112 458,201 465,332 453,219 452,173 465,770 455,871 53 To United States 91,079 137,767 178,878 178,390 178,244 189,044 184,017 183,793 191,466 187,381 54 Parent bank 39,286 56,344 75,521 79,893 79,447 85,214 81,050 80,786 84,505 81,703 55 Other banks in United States 14,473 19,197 33,368 32,797 32,650 33,974 32,687 31,815 33,682 31,378 56 Nonbanks 37,275 62,226 69,989 65,700 66,147 69,856 70,280 71,192 73,279 74,300 57 To foreigners 295,411 305,630 270,653 265,278 261,672 258,508 251,273 250,791 256,201 250,183 58 Other branches of parent bank 75,773 86,396 90,148 88,993 88,555 86,928 84,347 85,102r 86,791 84,122 59 Banks 132,116 124,906 96,739 92,875 90,244 91,738 86,950 84,647r 87,335 85,101 60 Official institutions 32,473 25,997 19,614 20,246 19,739 17,808 18,384 17,189 18,621 18,290 61 Nonbank foreigners 55,049 68,331 64,152 63,164 63,134 62,034 61,592 63,853 63,454 62,670 62 Other liabilities 14,690 19,450 19,836 18,444 18,285 17,780 17,929 17,589 18,103 18,307 63 Total payable in U.S. dollars 303,281 364,447 378,938 370,202 367,606 374,642 363,515 363,251 376,000 368,483 64 To United States 88,157 134,700 175,391 174,765 174,571 185,546 180,596 180,017 187,970 183,889 65 Parent bank 37,528 54,492 73,195 77,621 77,114 82,903 78,968 78,520 82,308 79,422 66 Other banks in United States 14,203 18,883 33,003 32,273 32,223 33,534 32,226 31,222 33,252 31,006 67 Nonbanks 36,426 61,325 69,193 64,871 65,234 69,109 69,402 70,275 72,410 73,461 68 To foreigners 206,883 217,602 192,323 185,298 183,656 179,696 173,533 174,154 178,921 175,063 69 Other branches of parent bank 58,172 69,299 72,878 71,100 70,887 69,038 66,387 66,863r 68,554 67,439 70 Banks 87,497 79,594 57,355 52,225 51,234 52,145 48,428 47,434' 50,098 48,483 71 Official institutions 24,697 20,288 15,055 15,940 15,381 13,536 13,801 12,631 13,912 13,520 72 Nonbank foreigners 36,517 48,421 47,035 46,033 46,154 44,977 44,917 47,226 46,357 45,621 73 Other liabilities 8,241 12,145 11,224 10,139 9,379 9,400 9,386 9,080 9,109 9,531 United Kingdom 74 Total, all currencies 144,717 157,229 161,067 157,464 156,577 156,022 152,408 151,821 155,629 153,229 75 To United States 21,785 38,022 53,954 52,650 51,927 55,309 52,883 53,603 56,950 56,659 76 Parent bank 4,225 5,444 13,091 14,287 14,080 14,616 14,343 13,907 14,461 15,009 77 Other banks in United States 5,716 7,502 12,205 12,343 12,198 13,172 12,119 12,773 13,503 12,878 78 Nonbanks 11,844 25,076 28,658 26,020 25,649 27,521 26,421 26,923 28,986 28,772 79 To foreigners 117,438 112,255 99,567 97,827 97,515 93,835 92,460 91,071 91,545 89,524 80 Other branches of parent bank 15,384 16,545 18,361 19,343 21,008 19,653 19,470 20,235 18,376 17,556 81 Banks 56,262 51,336 44,020 41,073 39,892 40,867 38,960 37,594 38,238 37,405 82 Official institutions 21,412 16,517 11,504 12,377 12,025 10,252 10,520 9,413 10,848 10,146 83 Nonbank foreigners 24,380 27,857 25,682 25,034 24,590 23,063 23,510 23,829 24,083 24,417 84 Other liabilities 5,494 6,952 7,546 6,987 7,135 6,878 7,065 7,147 7,134 7,046 85 Total payable in U.S. dollars 103,440 120,277 130,261 126,286 126,007 126,088 120,683 120,301 124,705 123,200 86 To United States 21,080 37,332 53,029 51,808 50,977 54,520 51,993 52,473 56,092 55,787 87 Parent bank 4,078 5,350 12,814 14,105 13,859 14,476 14,212 13,696 14,308 14,785 88 Other banks in United States 5,626 7,249 12,026 12,128 12,041 12,987 11,929 12,439 13,313 12,720 89 Nonbanks 11,376 24,733 28,189 25,575 25,077 27,057 25,852 26,338 28,471 28,282 90 To foreigners 79,636 79,034 73,477 71,000 71,994 68,309 65,485 64,621 65,428 64,114 91 Other branches of parent bank 10,474 12,048 14,300 15,081 16,709 14,918 14,815 15,636 14,117 13,398 92 Banks 35,388 32,298 28,810 25,177 25,563 26,395 23,821 22,960 23,895 23,635 93 Official institutions 17,024 13,612 9,668 10,657 10,121 8,419 8,474 7,306 8,786 8,065 94 Nonbank foreigners 16,750 21,076 20,699 20,085 19,601 18,577 18,375 18,719 18,630 19,016 95 Other liabilities 2,724 3,911 3,755 3,478 3,036 3,259 3,205 3,207 3,185 3,299 Bahamas and Caymans 96 Total, all currencies 123,837 149,108 145,091 142,115 138,730 145,663 142,049 140,941 146,792 142,433 97 To United States 59,666 85,759 104,385 104,398 104,520 111,424 109,644 108,789 111,591 108,591 98 Parent bank 28,181 39,451 47,041 50,441 49,634 55,620 52,009 51,087 53,626 50,730 99 Other banks in United States 7,379 10,474 18,466 17,561 17,328 17,328 17,451 16,143 16,882 15,498 100 Nonbanks 24,106 35,834 38,878 36,396 37,558 38,476 40,184 41,559 41,083 42,363 101 To foreigners 61,218 60,012 38,249 35,470 31,858 32,030 30,187 29,976 33,127 31,594 102 Other branches of parent bank 17,040 20,641 15,796 14,258 11,808 11,536 10,515 10,272 12,020 12,461 103 Banks 29,895 23,202 10,166 9,279 8,451 8,999 8,126 7,618 9,063 8,086 104 Official institutions 4,361 3,498 1,967 1,849 1,720 1,678 1,710 1,734 1,796 2,104 105 Nonbank foreigners 9,922 12,671 10,320 10,084 9,879 9,817 9,836 10,352 10,248 8,943 106 Other liabilities 2,953 3,337 2,457 2,247 2,352 2,209 2,218 2,176 2,074 2,248 107 Total payable in U.S. dollars 119,657 145,284 141,843 138,702 135,377 142,465 138,910 137,845 143,502 139,247 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • October 1983 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1983 IItteemm 11998811 11998822 Feb. Mar. Apr. May June' July Aug.P 1 Total' 169,926 172,598 172,739 172,915 173,335 175,054 174,545 175,897 173,076 By type 2 Liabilities reported by banks in the United States2 26,928 24,918 21,464 22,980 22,821 24,111 23,677 21,742 22,807 3 U.S. Treasury bills and certificates3 52,389 46,658 49,954 47,917 48,399 49,281 49,068 53,524 50,965 U.S. Treasury bonds and notes 4 Marketable 53,186 67,684 69,272 70,233 70,554 70,585 71,003 70,089 68,990 5 Nonmarketable4 11,791 8,750 7,950 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 24,099 23,835 23,611 23,127 22,847 22,592 22,364 By area 7 Western Europe1 65,707 61,242 61,882 61,470 61,923 62,994 63,649 66,316 64,009 8 Canada 2,403 2,070 2,754 2,942 2,770 3,613 3,117 3,293 3.713 9 Latin America and Caribbean 6,953 6,032 6,099 5,576 6,281 5,918 6,509 5,421 5.714 10 Asia 91,791 95,993 95,723 96,850 95,377 95,581 94,701 94,342 92,902 11 Africa 1,829 1,350 1,327 1,162 1,208 1,203 1,075 1,138 1,150 12 Other countries6 1,243 5,911 4,954 4,915 5,776 5,745 5,494 5,387 5,589 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 5,810 2 Banks' own claims 2,419 4,206 4,980 6,35c 7,700 8,101 7,817 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 3,940 5 Claims of banks' domestic customers' 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 Feb. Mar. Apr. May June' July Aug.? 1 All foreigners 205,297 244,043 305,368 304,925 316,831 308,359 316,722 320,984 326,795 333,309 2 Banks' own liabilities 124,791 163,738 225,427 219,939 235,031 225,721 232,881 236,845 238,920 246,652 3 Demand deposits 23,462 19,628 15,959 17,405 16,495 15,606 16,935 17,314 15,982 16,014 4 Time deposits' 15,076 28,977 67,093 65,321 68,491 67,495 69,772 73,938 73,471 77,975 5 Other2 17,583 17,632 23,870 20,366 24,566 21,877 24,002 24,881 22,462 22,875 6 Own foreign offices3 68,670 97,500 118,505 116,846 125,479 120,743 122,173 120,712 127,004 129,788 7 Banks' custody liabilities4 80,506 80,305 79,941 84,987 81,800 82,638 83,841 84,139 87,875 86,657 8 U.S. Treasury bills and certificates5 57,595 55,316 55,614 61,904 58,748 60,087 60,508 61,245 65,225 63,900 9 Other negotiable and readily transferable instruments6 20,079 19,019 20,625 19,205 18,830 18,823 19,187 18,731 18,017 18,507 10 Other 2,832 5,970 3,702 3,877 4,222 3,728 4,146 4,163 4,634 4,249 11 Nonmonetary international and regional organizations7 2,344 2,721 4,597 5,969 3,945 5,917 5,260 5,456 5,678 5,555 12 Banks' own liabilities 444 638 1,584 1,695 1,300 2,542 2,925 3,048 4,030 3,433 13 Demand deposits 146 262 106 195 221 252 267 165 307 325 14 Time deposits' 85 58 1,339 1,367 913 2,031 2,447 2,483 3,010 2,507 15 Other2 212 318 139 134 166 259 211 400 713 601 16 Banks' custody liabilities4 1,900 2,083 3,013 4,275 2,645 3,375 2,335 2,408 1,648 2,121 17 U.S. Treasury bills and certificates 254 541 1,621 3,153 1,501 2,230 1,280 1,538 678 1,294 18 Other negotiable and readily transferable instruments6 1,646 1,542 1,392 1,122 1,144 1,145 1,055 870 970 828 19 Other 0 0 0 0 0 0 0 0 0 0 20 Official institutions8 86,624 79,318 71,576 71,419 70,897 71,220 73,391 72,747 75,265 73,773 21 Banks' own liabilities 17,826 17,094 16,571 14,662 16,443 16,188 17,365 16,723 15,613 16,582 22 Demand deposits 3,771 2,564 1,981 2,063 2,287 2,322 2,058 2,198 1,958 2,030 23 Time deposits' 3,612 4,230 5,504 5,485 5,331 6,039 6,374 6,352 6,587 6,753 24 Other2 10,443 10,300 9,087 7,114 8,825 7,826 8,933 8,173 7,068 7,800 25 Banks' custody liabilities4 68,798 62,224 55,006 56,756 54,454 55,032 56,026 56,023 59,652 57,191 26 U.S. Treasury bills and certificates5 56,243 52,389 46,658 49,954 47,917 48,399 49,281 49,068 53,524 50,965 27 Other negotiable and readily transferable instruments6 12,501 9,787 8,319 6,769 6,512 6,618 6,724 6,937 6,100 6,186 28 Other 54 47 28 33 25 15 22 17 29 39 29 Banks' 96,415 136,030 185,081 181,114 193,415 183,100 188,605 191,977 194,856 201,954 30 Banks' own liabilities 90,456 124,312 168,658 163,102 175,038 164,647 169,167 172,521 174,735 181,514 31 Unaffiliated foreign banks 21,786 26,812 50,153 46,256 49,560 43,904 46,994 51,809 47,731 51,726 32 Demand deposits 14,188 11,614 8,675 9,627 8,264 7,601 8,832 9,134 8,279 8,300 33 Time deposits' 1,703 8.720 28,249 25,318 27,617 24,329 25,123 27,944 26,446 29,694 34 Other2 5,895 6,477 13,228 11,312 13,679 11,974 13,039 14,730 13,006 13,732 35 Own foreign offices3 68,670 97,500 118,505 116,846 125,479 120,743 122,173 120,712 127,004 129,788 36 Banks' custody liabilities4 5,959 11,718 16,423 18,012 18,377 18,453 19,438 19,456 20,121 20,440 37 U.S. Treasury bills and certificates 623 1,687 5,809 6,791 7,122 7,475 7,824 8,396 8,601 9,000 38 Other negotiable and readily transferable instruments6 2,748 4,421 7,848 8,345 8,265 8,041 8,333 7,771 7,821 7,599 39 Other 2,588 5,611 2,766 2,876 2,990 2,937 3,282 3,289 3,699 3,841 40 Other foreigners 19,914 25,974 44,113 46,423 48,573 48,122 49,466 50,805 50,996 52,027 41 Banks' own liabilities 16,065 21,694 38,615 40,480 42,250 42,344 43,425 44,552 44,542 45,122 42 Demand deposits 5,356 5,189 5,197 5,521 5,724 5,430 5,777 5,817 5,439 5,359 43 Time deposits 9,676 15,969 32,001 33,152 34,631 35,095 35,828 37,158 37,428 39,020 44 Other2 1,033 537 1,416 1,807 1,896 1,819 1,819 1,578 1,675 743 45 Banks' custody liabilities4 3,849 4,279 5,499 5,943 6,323 5,778 6,041 6,253 6,454 6,905 46 U.S. Treasury bills and certificates 474 699 1,525 2,006 2,207 1,983 2,123 2,242 22,,442222 22,,664411 47 Other negotiable and readily transferable instruments6 3,185 3,268 3,065 2,970 2,909 3,018 3,076 3,154 3,126 3,895 48 Other 190 312 908 968 1,207 776 842 857 906 369 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,745 10,747 14,296 11,611 11,383 11,604 11,555 11,589 11,062 10,720 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 • October 1983 3.17 Continued 1983 AArreeaa aanndd ccoouunnttrryy 11998800 11998811AA 11998822 Feb. Mar. Apr. May Juner July Aug.P 1 Total 205,297 244,043 305,368 304,925 316,831 308,359 316,722 320,984 326,795 333,309 2 Foreign countries 202,953 241,321 300,771 298,956 312,886 302,442 311,462 315,528 321,117 327,754 3 Europe 90,897 91,309 117,705 116,195 116,457 111,233 115,950 118,531 118,790 120,429 4 Austria 523 596 512 513 604 576 574 640 610 556 5 Belgium-Luxembourg 4,019 4,117 2,517 2,295 2,726 2,800 2,608 2,843 2,955 3,116 6 Denmark 497 333 509 1,197 765 849 732 616 612 573 7 Finland 455 2% 748 369 408 437 280 447 292 459 8 France 12,125 8,486 8,169 7,770 6,780 7,091 6,647 6,766 8,847 8,490 9 Germany 9,973 7,665 5,375 6,227 6,458 3,437 3,971 3,423 3,707 3,537 10 Greece 670 463 537 595 597 670 648 567 588 636 11 Italy 7,572 7,290 5,674 4,514 4,312 5,021 5,573 6,634 7,790 7,267 12 Netherlands 2,441 2,823 3,362 3,196 3,704 3,968 3,543 3,246 3,413 3,633 13 Norway 1,344 1,457 1,567 1,407 1,061 1,565 2,227 1,719 900 1,044 14 Portugal 374 354 388 370 363 346 427 350 338 335 15 Spain 1,500 916 1,405 1,524 1,640 1,484 1,621 1,615 1,694 1,584 16 Sweden 1,737 1,545 1,380 1,645 1,379 1,210 1,356 1,493 1,407 1,205 17 Switzerland 16,689 18,720 29,060 30,263 30,433 29,390 29,781 29,941 29,958 29,628 18 Turkey 242 518 296 246 254 231 248 198 224 316 19 United Kingdom 22,680 28,287 48,169 47,294 47,703 44,980 48,762 50,343 48,015 51,259 20 Yugoslavia 681 375 499 452 491 504 549 504 427 462 21 Other Western Europe1 6,939 6,526 6,913 5,940 6,365 6,215 6,023 6,666 6,514 5,914 22 U.S.S.R 68 49 50 41 40 44 53 71 45 31 23 Other Eastern Europe2 370 493 573 335 374 413 327 448 453 384 24 Canada 10,031 10,250 12,217 13,618 15,159 14,492 16,284 16,345 16,676 17,903 25 Latin America and Caribbean 53,170 85,159 112,939 111,184 120,591 117,708 118,260 120,440 124,242 128,393 26 Argentina 2,132 2,445 3,577 4,785 4,686 4,603 4,746 4,763 5,017 4,249 27 Bahamas 16,381 34,856 44,040 45,249 49,524 49,086 49,682 49,741 54,491 53,809 28 Bermuda 670 765 1,572 1,913 2,124 2,128 1,821 2,064 2,360 2,953 29 Brazil 1,216 1,568 2,014 1,926 1,948 2,474 2,483 2,675 2,681 3,078 30 British West Indies 12,766 17,794 26,366 24,114 27,520 23,889 22,943 24,213 24,172 26,810 31 Chile 460 664 1,626 1,280 1,084 1,196 1,345 1,355 1,385 1,465 32 Colombia 3,077 2,993 2,594 2,336 1,887 1,820 1,873 1,719 1,618 1,674 33 Cuba 6 9 9 10 9 12 8 13 11 12 34 Ecuador 371 434 453 499 575 534 658 581 532 598 35 Guatemala 367 479 670 669 675 666 711 705 697 718 36 Jamaica 97 87 126 103 134 107 108 130 108 106 37 Mexico 4,547 7,170 7,967 7,380 8,118 8,351 8,536 9,027 9,142 9,444 38 Netherlands Antilles 413 3,182 3,597 3,474 3,416 3,426 3,622 3,514 3,434 3,485 39 Panama 4,718 4,857 4,738 4,943 5,617 5,620 5,749 5,670 5,608 5,925 40 Peru 403 694 1,147 903 927 966 1,005 1,148 1,055 1,127 41 Uruguay 254 367 759 817 818 852 919 955 958 1,050 42 Venezuela 3,170 4,245 8,392 7,671 8,146 8,585 8,563 8,631 7,715 8,575 43 Other Latin America and Caribbean 2,123 2,548 3,291 3,113 3,382 3,394 3,487 3,537 3,257 3,314 44 42,420 5500,,000055 48,698 49,615 52,545 50,181 5522,,111177 5511,,995577 5533,,002255 5522,,447733 China 45 Mainland 49 158 203 196 208 187 158 208 191 176 46 Taiwan 1,662 2,082 2,751 3,515 3,549 3,600 3,765 3,744 3,913 4,085 47 Hong Kong 2,548 3,950 4,465 4,986 5,725 5,127 5,195 5,587 5,554 5,574 48 India 416 385 433 962 521 669 719 669 606 528 49 Indonesia 730 640 849 614 856 1,028 765 554 1,245 839 50 Israel 883 592 606 515 985 761 789 835 670 812 51 Japan 16,281 20,750 16,078 16,613 17,022 17,052 17,403 17,006 17,655 16,861 52 Korea 1,528 2,013 1,692 1,458 1,418 1,147 1,459 1,326 1,552 1,552 53 Philippines 919 874 770 787 718 712 783 818 770 912 54 Thailand 464 534 629 529 488 528 566 692 537 529 55 Middle-East oil-exporting countries3 14,453 13,174 13,433 11,705 13,159 11,756 12,610 11,832 11,866 11,724 56 Other Asia 2,487 4,854 6,788 7,735 7,895 7,614 7,906 8,685 8,467 8,879 57 Africa 5,187 3,180 3,070 3,103 2,910 2,829 2,876 2,693 2,916 2,836 58 Egypt 485 360 398 432 533 466 513 467 554 447 59 Morocco 33 32 75 51 57 48 50 54 57 48 60 South Africa 288 420 277 317 281 299 358 355 403 458 61 Zaire 57 26 23 31 33 28 32 59 55 29 62 Oil-exporting countries4 3,540 1,395 1,280 1,333 975 1,071 867 743 928 934 63 Other Africa 783 946 1,016 939 1,031 916 1,057 1,014 919 920 64 Other countries 1,247 1,419 6,143 5,241 5,224 5,999 5,974 5,562 5,469 5,719 65 Australia 950 1,223 5,904 5,052 4,933 5,804 5,778 5,404 5,250 5,512 66 All other 297 196 239 190 291 195 196 159 219 208 67 Nonmonetary international and regional organizations 2,344 2,721 4,597 5,969 3,945 5,917 5,260 5,456 5,678 5,555 68 International 1,157 1,661 3,724 5,186 3,182 5,194 4,540 4,747 4,987 4,861 69 Latin American regional 890 710 517 487 478 494 453 443 454 441 70 Other regional5 296 350 357 296 285 229 267 266 237 252 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 11998811 •• 11998822 Feb. Mar. Apr. May Juner July Aug.'' 1 Total 172,592 251,356 355,131 361,102 372,887 361,187 363,392 372,437 365,913 374,009 2 Foreign countries 172,514 251,300 355,063 361,025 372,818 361,095 363,315 372,337 365,828 373,924 3 Europe 32,108 49,191 84,629 84,638 88,097 84,325 83,517 86,335 84,456 87,917 4 Austria 236 121 215 226 255 307 278 342 383 642 5 Belgium-Luxembourg 1,621 2,851 5,129 5,377 5,711 5,350 5,479 5,796 5,449 5,551 6 Denmark 127 187 554 650 1,135 1,124 1,061 1,077 1,064 1,080 7 Finland 460 546 990 967 961 844 766 870 777 637 8 France 2,958 4,127 6,856 7,396 7,218 7,342 7,829 7,941 7,900 8,576 9 Germany 948 940 1,869 1,740 1,810 1,273 1,186 1,404 1,112 1,126 10 Greece 256 333 452 653 652 628 607 576 458 375 11 Italy 3,364 5,240 7,515 7,011 7,142 7,403 6,985 7,323 7,401 7,355 12 Netherlands 575 682 1,425 1,358 1,629 1,250 1,262 1,165 967 1,048 13 Norway 227 384 572 587 544 628 683 652 598 625 14 Portugal 331 529 950 841 820 797 815 846 844 848 15 Spain 993 2,100 3,739 3,227 3,120 3,004 3,059 3,199 3,339 3,367 16 Sweden 783 1,205 3,034 2,693 2,414 2,289 2,298 2,864 2,910 2,806 17 Switzerland 1,446 2,213 1,639 1,497 1,668 1,653 1,085 1,598 1,727 1,630 18 Turkey 145 424 560 616 595 608 578 570 629 588 19 United Kingdom 14,917 23,774 45,290 46,101 48,710 46,072 45,793 46,250 45,306 47,990 20 Yugoslavia 853 1,224 1,429 1,429 1,393 1,432 1,481 1,463 1,381 1,347 21 Other Western Europe1 179 209 378 321 322 232 236 334 356 403 22 U.S.S.R 281 377 263 240 310 392 349 373 288 232 23 Other Eastern Europe2 1,410 1,725 1,769 1,709 1,690 1,697 1,686 1,692 1,566 1,692 24 Canada 4,810 9,192 14,322 15,633 16,505 15,087 16,539 16,616 16,487 17,477 25 Latin America and Caribbean 92,992 138,251 187,953 193,747 198,737 195,821 197,899 198,880 195,033 197,519 26 Argentina 5,689 7,522 10,974 11,536 11,264 11,228 11,550 11,243 11,112 11,317 27 Bahamas 29,419 43,517 56,484 56,796 59,575 57,177 58,923 62,153 58,815 57,240 28 Bermuda 218 346 603 536 500 385 628 447 358 390 29 Brazil 10,496 16,914 23,260 23,754 23,551 23,715 23,530 23,333 23,711 24,184 30 British West Indies 15,663 21,965 29,244 33,560 35,232 34,985 33,265 32,536 30,349 31,656 31 Chile 1,951 3,690 5,513 5,420 5,209 5,131 5,568 5,161 5,188 5,379 32 Colombia 1,752 2,018 3,211 3,162 3,166 3,155 3,484 3,600 3,656 3,592 33 Cuba 3 3 3 2 2 0 0 0 0 0 34 Ecuador 1,190 1,531 2,062 2,148 2,054 2,093 2,040 2,038 2,018 2,004 35 Guatemala3 137 124 124 120 84 77 90 90 96 100 36 Jamaica3 36 62 181 199 216 196 197 207 209 204 37 Mexico 12,595 22,409 29,488 30,635 31,253 31,726 31,906 32,318 32,862 33,679 38 Netherlands Antilles 821 1,076 839 913 970 1,036 824 519 943 838 39 Panama 4,974 6,787 10,197 9,324 9,801 8,956 9,634 8,824 9,127 10,067 40 Peru 890 1,218 2,355 2,335 2,301 2,330 2,414 2,624 2,506 2,421 41 Uruguay 137 157 686 685 707 859 824 820 833 816 42 Venezuela 5,438 7,069 10,739 10,432 10,615 10,559 10,749 10,848 11,145 11,040 43 Other Latin America and Caribbean 1,583 1,844 1,991 2,190 2,236 2,213 2,275 2,120 2,104 2,592 44 Asia 39,078 49,787 60,700 59,186 6611,,447799 57,689 57,403 6622,,550022 61,667 6622,,331199 China 45 Mainland 195 107 214 195 195 239 219 166 124 179 46 Taiwan 2,469 2,461 2,288 1,985 1,860 1,786 1,613 1,760 1,715 1,632 47 Hong Kong 2,247 4,126 6,668 7,155 7,656 7,487 7,552 7,845 7,876 7,994 48 India 142 123 222 201 160 163 198 230 245 274 49 Indonesia 245 351 342 429 505 541 563 537 595 631 50 Israel 1,172 1,562 2,028 1,762 1,744 2,036 1,926 2,181 1,657 1,639 51 Japan 21,361 26,768 28,302 26,846 28,545 24,979 24,757 27,381 27,708 27,337 52 Korea 5,697 7,324 9,407 9,263 9,170 8,768 8,940 9,143 9,639 9,684 53 Philippines 989 1,817 2,571 2,628 2,628 2,627 2,493 2,829 2,640 2,539 54 Thailand 876 564 643 652 625 741 707 788 689 722 55 Middle East oil-exporting countries4 1,432 1,577 3,087 3,414 3,832 3,947 4,024 4,452 4,003 4,627 56 Other Asia 2,252 3,009 4,928 4,655 4,557 4,375 4,413 5,191 4,776 5,063 57 Africa 2,377 3,503 5,352 5,539 5,483 5,698 5,538 5,662 5,937 6,523 58 Egypt 151 238 322 286 309 297 378 421 486 529 59 Morocco 223 284 353 359 375 382 441 463 484 444 60 South Africa 370 1,011 2,012 2,194 2,185 2,123 2,123 2,231 2,407 2,630 61 Zaire 94 112 57 55 52 104 47 46 45 40 62 Oil-exporting countries5 805 657 801 845 844 750 851 830 850 1,050 63 Other 734 1,201 1,807 1,800 1,717 2,041 1,699 1,671 1,664 1,830 64 Other countries 1,150 1,376 2,107 2,282 2,519 2,475 2,418 2,342 2,248 2,169 65 Australia 859 1,203 1,713 1,704 1,953 1,889 1,756 1,722 1,635 1,627 66 All other 290 172 394 578 566 586 662 620 613 542 67 Nonmonetary international and regional organizations6 78 56 68 77 69 92 77 100 85 85 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 • October 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 Feb. Mar. Apr. May June' July Aug.P 1 Total 111111199999998888888,,,,,,,666666699999998888888 222222288888887777777,,,,,,,333333322222225555555 333333399999995555555,,,,,,,777777733333331111111 444444411111111111111,,,,,,,111111144444442222222 444444400000007777777,,,,,,,999999911111110000000 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111177777772222222,,,,,,,555555599999992222222 222222255555551111111,,,,,,,333333355555556666666 333333355555555555555,,,,,,,111111133333331111111 361,102 333333377777772222222,,,,,,,888888888888887777777 361,187 363,392 333333377777772222222,,,,,,,444444433333337777777 365,913 374,009 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 22222220000000,,,,,,,888888888888882222222 33333331111111,,,,,,,333333300000002222222 44444445555555,,,,,,,444444455555553333333 45,733 44444446666666,,,,,,,999999933333335555555 47,582 47,758 44444449999999,,,,,,,222222244444440000000 49,596 50,605 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 66666665555555,,,,,,,000000088888884444444 99999996666666,,,,,,,666666644444447777777 111111122222227777777,,,,,,,222222288888882222222 134,616 111111144444443333333,,,,,,,888888855555554444444 135,756 139,166 111111144444440000000,,,,,,,111111133333339999999 135,454 139,507 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 55555550000000,,,,,,,111111166666668888888 77777774444444,,,,,,,444444400000008888888 111111122222220000000,,,,,,,333333333333330000000 119,133 111111122222221111111,,,,,,,111111177777770000000 117,246 115,597 111111122222220000000,,,,,,,555555555555559999999 117,592 120,329 66 DDeeppoossiittss 8888888,,,,,,,222222255555554444444 22222223333333,,,,,,,222222277777776666666 44444443333333,,,,,,,666666611111119999999 44,595 44444448888888,,,,,,,777777788888881111111 44,481 43,923 44444446666666,,,,,,,888888888888883333333 46,147 47,282 77 OOtthheerr 44444441111111,,,,,,,999999911111114444444 55555551111111,,,,,,,111111133333332222222 77777776666666,,,,,,,777777711111111111111 74,538 77777772222222,,,,,,,333333388888889999999 72,765 71,674 77777773333333,,,,,,,666666677777776666666 71,445 73,048 88 AAllll ootthheerr ffoorreeiiggnneerrss 33333336666666,,,,,,,444444455555559999999 44444448888888,,,,,,,999999999999999999999 66666662222222,,,,,,,000000066666666666666 61,619 66666660000000,,,,,,,999999922222229999999 60,603 60.871 66666662222222,,,,,,,444444499999999999999 63,272 63,569 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,,,,,,,888888811111111111111 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 ... 24,468 39,862 41,210 39,321' 38,856' 41,272' 42,758' 40,471' 40,663' 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 • 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 106,748 154,159 202,185 214,927 226,933 227,525 231,022 By borrower 2 Maturity of 1 year or less1 82,555 116,130 153,223 163,294 172,756 171,888 173,596 3 Foreign public borrowers 9,974 15,099 19,480 20,082 21,297 21,602 22,442 4 All other foreigners 72,581 101,030 133,743 143,212 151,459 150,286 151,154 5 Maturity of over 1 year1 24,193 38,030 48,962 51,634 54,177 55,637 57,427 6 Foreign public borrowers 10,152 15,650 20,077 21,977 23,108 24,623 26,170 7 All other foreigners 14,041 22,380 28,885 29,657 31,068 31,014 31,257 By area Maturity of 1 year or less1 8 Europe 18,715 28,053 39,813 45,793 49,643 52,852 51,797 9 Canada 2,723 4,657 6,696 7,078 7,647 6,874 6,957 10 Latin America and Caribbean 32,034 48,599 68,676 72,291 73,199 74,379 74,622 11 Asia 26,686 31,421 33,558 33,348 37,355 32,546 35,183 12 Africa 1,757 2,457 3,262 3,621 3,686 3,872 3,854 13 All other2 640 943 1,217 1,163 1,226 1,365 1,182 Maturity of over 1 year1 14 Europe 5,118 8,094 9,206 10,546 11,632 12,011 12,181 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 36,604 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. • 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

Bank-Reported Data A63 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1981 1982 1983 AArreeaa oorr ccoouunnttrryy 11997799 11998800 June Sept. Dec. Mar. June Sept. Dec. Mar. June 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 5 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 70.0 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 21 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 23 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 26 Ecuador 1.7 2.1 2.0 2.1 2.2 2.3 2.4 2.3 2.2 2.2 2.2 27 Venezuela 8.7 9.1 8.8 9.2 9.9 10.0 10.1 10.4 10.6 10.4 10.2 28 Indonesia 1.9 1.8 2.1 2.5 2.6 2.7 2.8 2.9 3.2 3.5 3.2 29 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 32 Argentina 5.0 7.9 8.5 9.3 9.4 10.0 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 Peru 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 42 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 62 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 • October 1983 3.22 LIABILITIES TO 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. 1 Total 17,433 29,434' 28,604' 27,633' 25,447' 24,995' 24,940' 21,740 2 Payable in dollars 14,323 25,689' 24,904' 24,884' 22,685' 21,896' 21,841' 18,846 3 Payable in foreign currencies 3,110 3,745 3,700' 2,749' 2,763' 3,099' 3,099 2,893 By type 4 Financial liabilities 7,523 11,330 12,143 12,377 10,063 10,749 10,388' 10,478 5 Payable in dollars 5,223 8,528 9,494' 10,426' 8,121' 8,458' 8,313' 8,533 6 Payable in foreign currencies 2,300 2,802 2,649' 1,951' 1,941' 2,291' 2,075 1,945 7 Commercial liabilities 9,910 18,104' 16,461' 15,256' 15,385' 14,245' 14,552' 11,261 8 Trade payables 4,591 12,201' 10,818' 9,483' 9,475' 8,039' 7,601' 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 17,161' 15,409' 14,457' 14,563' 13,438' 13,528' 10,313 11 Payable in foreign currencies 811 943 1,052 798 822 808 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 6,090 13 Belgium-Luxembourg 338 479 471 562 518 494 502 407 14 France 175 327 709 917 581 672 635 685 15 Germany 497 582 491 503 439 446 470 487 16 Netherlands 829 681 748 750 517 759 702 687 17 Switzerland 170 354 715 707 661 670 673 623 18 United Kingdom 2,477 3,923 3,556 4,195 3,081 3,212 3,061 3,071 19 Canada 532 964 958 914 758 702 685 723 20 Latin America and Caribbean 1,514 3,136 3,356 3,223 2,805 2,969 2,707' 2,690 21 Bahamas 404 964 1,279 1,095 1,003 938' 890' 817 22 Bermuda 81 1 7 6 7 9' 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 1,002' 1,001 25 Mexico 121 99 102 67 83 85 121 149 26 Venezuela 72 81 98 97 100 104 114 121 27 Asia 804 723 976 472 526 658 796 943 28 Japan 726 644 792 293 340 424 572 699 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 3,770' 3,508' 3,844' 3,957' 3,636 3,420 34 Belgium-Luxembourg 137 90 71 50 47 50 52 42 35 France 467 582 573 507' 703' 762' 595 576 36 Germany 545 679 545 473 457 436 457 439 37 Netherlands 227 219 220' 230' 246' 277' 346 350 38 Switzerland 316 499 424 400 412 358 363 372 39 United Kingdom 1,080 1,209 880 910' 951' 1,001' 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 1,044 827' 1,460' 1,235' 991 1,032 42 Bahamas 69 8 2 22 20 6 16 4 43 Bermuda 32 75 67 71 102 48 89 117 44 Brazil 203 111 67 83 62 128 60 51 45 British West Indies 21 35 2 27 2 3 32 4 46 Mexico 257 367 340 218' 769' 499' 379 354 47 Venezuela 301 319 276 197' 219 269 148 181 48 Asia 2,991 10,242' 9,384' 8,758' 7,588' 6,593' 7,080' 4,278 49 Japan 583 802 1,094 1,106' 1,085' 1,147' 1,150 1,158 50 Middle East oil-exporting countries2-5 1,014 8,098' 7,008' 6,331' 5,195' 4,178' 4,531' 1,732 51 Africa 728 817 703 661 729 669' 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 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 5. Revisions include a reclassification of transactions, which also aifects the United Arab Emirates (Trucial States). totals for Asia and the grand totals. 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. 1 Total 31,299 34,482 35,814' 30,301' 30,758' 29,852' 27,600' 30,594 2 Payable in dollars 28,096 31,528 32,220' 27,667' 28,256' 27,199' 24,982' 27,866 3 Payable in foreign currencies 3,203 2,955 3,595 2,634 2,502 2,653' 2,618 2,728 By type 4 Financial claims 18,398 19,763 20,800' 17,748' 18,442' 17,988' 16,661' 19,710 5 Deposits 12,858 14,166 14,747' 12,730' 13,680' 12,882' 12,134' 15,059 6 Payable in dollars 11,936 13,381 14,122' 12,272' 13,310' 12,469' 11,709' 14,581 7 Payable in foreign currencies 923 785 625 457 370 413 426 478 X Other financial claims 5,540 5,597 6,053 5,018 4,762 5,106 4,527 4,651 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 1,645 11 Commercial claims 12,901 14,720 15,014' 12,553' 12,316' 11,864' 10,939 10,885 12 Trade receivables 12,185 13,960 13,978' 11,509' 11,137' 10,758' 9,929 9,681 13 Advance payments and other claims 716 759 1,036' 1,044' 1,179' 1,106' 1,010 1,204 14 Payable in dollars 12,447 14,233 14,499' 12,033' 11,752' 11,311' 10,378 10,279 15 Payable in foreign currencies 454 487 516 520 564 552' 561 605 By area or country Financial claims 16 Europe 6,179 6,069 4,573' 4,503 4,734' 4,884' 4,670' 6,066 17 Belgium-Luxembourg 32 145 43 16 13 16 10 58 18 France 177 298 285 375 324' 326' 134' 90 19 Germany 409 230 224 197 148 215' 178' 127 20 Netherlands 53 51 50 79 56 62' 32 140 21 Switzerland 73 54 117' 53 74' 60 107 99 22 United Kingdom 5,099 4,987 3,522 3,546 3,847' 3,834' 3,945' 5,301 23 Canada 5,003 5,036 6,628 4,942 4,365 4,322 4,219' 4,605 24 Latin America and Caribbean 6,312 7,811 8,620' 7,437' 8,319' 7,727' 6,884' 8,147 25 Bahamas 2,773 3,477 3,556' 3,454' 3,762' 3,389' 3,108' 3,747 26 Bermuda 30 135 18 27 42 16' 8 10 27 Brazil 163 96 30 49 76 76 62 50 28 British West Indies 2,011 2,755 3,872' 2,880' 3,588' 3,237' 2,787' 3,063 29 Mexico 157 208 313 281 274 268 274 352 30 Venezuela 143 137 148 130 134 133 139 156 31 Asia 601 607 758 668 802 846' 698' 712 32 Japan 199 189 366 262 327 268' 153' 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 5,382' 4,404' 4,330' 4,227' 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 298 318 299' 222' 291' 267' 347 307 42 Switzerland 272 354 427 354 414' 291' 339 227 43 United Kingdom 901 929 969 1,062 905 1,035 793 748 44 Canada 859 914 967 939' 714' 666 635 674 45 Latin America and Caribbean 2,879 3,766 3,479 2,925 2,789' 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 3,954' 3,209' 3,422' 3,091' 3,033 3,108 53 Japan 1,177 1,052 1,244 1,170' 1,249' 973' 1,047 1,115 54 Middle East oil-exporting countries2 765 825 905' 757 809' 777' 748 700 55 Africa 551 653 772' 612' 648' 660' 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 • October 1983 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1983 1983 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998811 11998822 J A a u n g .- . Feb. Mar. Apr. May Juner July Aug.? U.S. corporate securities STOCKS 1 Foreign purchases 40,686 41,916 47,882 5,314 7,083 5,920 6,619 6,864 5,758 5,150 2 Foreign sales 34,856 37,956 43,362 4,349 6,155 5,344 6,365 6,454 5,198 5,122 3 Net purchases, or sales (—) 5,830 3,959 4,520 965 928 576 254 410 560 27 4 Foreign countries 5,803 3,875 4,426 945 902 524 252 435 551 29 5 Europe 3,662 2,603 4,146 894 976 626 296 202 442 96 6 France 900 -143 78 52 8 29 -28 14 33 -77 7 Germany -22 333 940 137 226 222 86 -31 135 54 8 Netherlands 42 -60 -99 8 41 -5 -81 -57 7 -13 9 Switzerland 288 -529 1,516 223 102 278 269 186 187 56 10 United Kingdom 2,235 3,136 1,673 447 576 127 116 95 49 79 11 Canada 783 221 686 61 147 122 92 98 1 75 12 Latin America and Caribbean -30 304 207 83 -23 119 63 28 35 -98 13 Middle East1 1,140 366 -743 -13 -57 -302 -192 36 -59 -98 14 Other Asia 287 246 62 -91 -210 -44 0 68 146 75 15 Africa 7 2 36 4 8 8 3 1 0 7 16 Other countries -46 131 32 6 60 -4 -10 2 -12 -28 17 Nonmonetary international and regional organizations 27 85 93 21 26 52 2 -25 9 -1 BONDS2 18 Foreign purchases 17,304 21,919 16,024 1,885 2,312 2,318 2,458 1,546 1,438 2,119 19 Foreign sales 12,272 20,463 16,089 1,877 2,448 2,067 2,289 1,741 1,463 1,926 20 Net purchases, or sales (-) 5,033 1,456 -65 8 -136 251 169 -195 -25 193 21 Foreign countries 4,972 1,484 -144 33 -153 265 193 -197 -49 91 22 Europe 1,351 2,081 69 -148 -266 261 474 -122 -74 120 23 France 11 295 -49 -2 -22 7 7 -7 -5 -6 24 Germany 848 2,116 132 -35 127 47 85 -12 -8 25 25 Netherlands 70 28 29 0 —3 2 1 12 -4 5 -3 26 Switzerland 108 161 506 62 209 188 28 -8 -1 27 United Kingdom 196 -581 -120 -90 -182 -103 141 120 -33 117 28 Canada -12 25 91 15 21 -18 22 -10 53 -3 29 Latin America and Caribbean 132 160 53 11 1 -3 10 19 13 -21 30 Middle East1 3,465 -748 -886 86 32 -50 -378 -168 -119 -78 31 Other Asia 44 -23 474 72 59 60 62 47 78 74 32 Africa -1 -19 -2 -1 0 -5 1 2 0 0 33 Other countries -7 7 57 0 0 21 2 35 0 0 34 Nonmonetary international and regional organizations 61 -28 80 -25 17 -14 -24 2 24 102 Foreign securities 35 Stocks, net purchases, or sales (-) -247 -1,343 -3,524 -227 -447 -548 -641 -647 -487 -199 36 Foreign purchases 9,339 7,165 8,661 1,042 1,187 971 1,079 1,346 972 1,032 37 Foreign sales 9,586 8,508 12,185 1,270 1,634 1,519 1,720 1,993 1,458 1,231 38 Bonds, net purchases, or sales (-) -5,460 -6,557 -2,852 -278 -556 -686 -837 127 -209 -440 39 Foreign purchases 17,553 29,898 22,700 3,526 2,772 2,396 2,655 3,220 2,534 2,709 40 Foreign sales 23,013 36,455 25,551 3,804 3,328 3,083 3,492 3,092 2,744 3,149 41 Net purchases, or sales (-), of stocks and bonds .... -5,707 -7,900 -6,376 -506 -1,003 -1,234 -1,478 -520 -696 -640 42 Foreign countries -4,694 -6,735 -5,887 -818 -714 -1,212 -972 -546 -705 -646 43 Europe -728 -2,433 -4,456 -688 -606 -672 -632 -583 -682 -284 44 Canada -3,697 -2,364 -1,198 -449 13 -438 -287 5 55 -77 45 Latin America and Caribbean 69 288 950 345 -24 88 243 -80 57 62 46 Asia -367 -1,853 -1,209 -37 -144 -221 -309 -182 -145 23 47 Africa -55 -9 113 21 30 25 9 13 11 14 48 Other countries 84 -364 -89 -10 16 7 4 280 0 -385 49 Nonmonetary international and regional organizations -1,012 -1,165 -488 312 -289 -22 -506 26 9 7 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 A a u n g .- . Feb. Mar. Apr. May June' July Aug.P Holdings (end of period)1 1 Estimated total2 70,249 85,169 86,057 88,675 87,462 89,375 90,932 88,650 86,972 2 Foreign countries2 64,565 80,586 82.098 83,046 84,001 84,243 84,779 83,464 82,329 3 Europe2 24,012 29,274 31,039 32,364 33,511 33,557 33,567 33,010 32,810 4 Belgium-Luxembourg 543 447 -87 -332 -107 -93 -84 82 72 5 Germany2 11,861 14,841 16,650 17,560 17,798 16,953 16,876 16,313 16,109 6 7 S N w et e h d e e r n l ands 1, 6 99 4 1 3 2,7 6 5 6 4 7 3,0 6 1 8 1 1 3,1 6 9 5 4 6 3,2 65 3 6 0 3,2 6 5 7 5 0 3,2 6 5 5 1 5 3,2 6 6 7 2 4 3,2 61 4 7 4 8 Switzerland2 846 1,540 1,039 1,044 1,070 914 877 855 943 9 United Kingdom 6,709 6,549 6,941 7,478 7.719 8,045 8,231 8,233 8,195 10 Other Western Europe 1,419 0 2,476 0 2,804 0 2,764 0 3,146 0 3,813 0 3,761 0 3,589 0 3,631 0 11 Eastern Europe 12 Canada 514 602 639 724 696 863 972 1,047 1,076 13 Latin America and Caribbean 736 1,076 1,050 951 932 1,039 1,041 800 14 Venezuela 286 188 74 77 72 72 72 62 62 15 Other Latin America and Caribbean 319 656 792 690 676 775 773 636 622 16 Netherlands Antilles 131 232 185 184 184 192 196 188 116 17 Asia 38,671 49,502 49,256 48,897 48.743 48,664 49,072 48,371 47,505 18 Japan 10,780 11,578 11,707 11,736 11,848 12,120 12,582 12,753 12,997 19 Africa 631 77 80 80 80 79 79 79 79 20 All other 2 55 34 31 39 42 50 71 59 21 Nonmonetary international and regional organizations 5,684 4,583 3,959 5,629 3,461 5,132 6,153 5,186 4,643 22 International 5,638 4,186 3,405 4,966 2,969 4,469 5,327 4,455 4,041 23 Latin American regional 1 6 6 6 6 6 6 6 6 Transactions (net purchases, or sales (-) during period) 24 Total2 12,699 14,920 1,803 599 2,618 -1,212 1,912 1,557 -2,281 -1,678 25 Foreign countries2 11,604 16,021 1,743 1,245 948 955 243 536 -1,316 -1,134 26 Official institutions 11,730 14,498 1,306 1,567 962 321 31 418 -914 -1,100 27 Other foreign2 -126 1,518 438 -323 -14 633 211 118 -400 -35 28 Nonmonetary international and regional organizations 1,095 -1,096 60 -645 1,670 -2,167 1,670 1,021 -966 -544 MEMO: Oil-exporting countries 29 Middle East3 11,156 7,534 -3,676 -233 -691 -115 -566 -277 -172 -1,743 30 Africa4 -289 -552 -1 0 0 0 -1 0 0 0 1. Estimated official and private holdings of marketable U.S. Treasury securi- 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to ties with an original maturity of more than 1 year. Data are based on a benchmark private foreign residents denominated in foreign currencies. survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and nonmarketable U.S. Treasury bonds and notes held by official institutions of United Arab Emirates (Trucial States). foreign countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on 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.. 9.56 Sept. 1983 Japan 5.5 Dec. 1981 Venezuela 13.0 Sept. 1982 Denmark 7.5 Apr. 1983 Netherlands 5.0 Sept. 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 • October 1983 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1983 CCoouunnttrryy,, oorr ttyyppee 11998800 11998811 11998822 Mar. Apr. May June July Aug. Sept. 1 Eurodollars 14.00 16.79 12.24 9.25 9.23 8.96 9.66 10.00 10.27 9.82 2 United Kingdom 16.59 13.86 12.21 10.92 10.21 10.18 9.91 9.84 9.83 9.63 3 Canada 13.12 18.84 14.38 9.36 9.39 9.30 9.41 9.42 9.49 9.35 4 Germany 9.45 12.05 8.81 5.40 5.16 5.27 5.52 5.54 5.66 5.83 5 Switzerland 5.79 9.15 5.04 3.64 4.20 4.48 4.98 4.77 4.61 4.40 6 Netherlands 10.60 11.52 8.26 4.34 5.19 5.65 5.81 5.58 6.03 6.15 7 France 12.18 15.28 14.61 12.64 12.12 12.51 12.59 12.33 12.33 12.42 8 Italy 17.50 19.98 19.99 19.19 18.20 17.75 17.72 17.50 17.50 17.42 9 Belgium 14.06 15.28 14.10 13.32 11.05 10.04 9.73 9.08 9.25 9.25 10 Japan 11.45 7.58 6.84 6.72 6.34 6.26' 6.46 6.47 6.52 6.68 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 Apr. May June July Aug. Sept. 1 Argentina/peso n.a. n.a. 20985.00 66868.56 71100.94 8.08 8.85 8.94 11.22 2 Australia/dollar1 114.00 114.95 101.65 86.76 87.85 87.72 87.54 87.93 88.77 3 Austria/schilling 12.945 15.948 17.060 17.176 17.368 17.974 18.208 18.799 18.754 4 Belgium/franc 29.237 37.194 45.780 48.577 49.239 50.928 51.862 53.609 53.841 5 Brazil/cruzeiro n.a. 92.374 179.22 434.77 465.65 517.28 571.73 643.34 701.38 6 Canada/dollar 1.1693 1.1990 1.2344 1.2325 1.2292 1.2323 1.2323 1.2338 1.2326 7 Chile/peso n.a. n.a. 51.118 76.028 75.405 77.500 78.987 80.011 81.767 8 China, P.R./yuan n.a. 1.7031 1.8978 1.9938 1.9895 1.9949 1.9966 1.9843 1.9867 9 Colombia/peso n.a. n.a. 64.071 74.751 76.153 77.380 78.997 80.707 82.494 10 Denmark/krone 5.6345 7.1350 8.3443 8.6663 8.8003 9.1287 9.3142 9.6308 9.5926 11 Finland/markka 3.7206 4.3128 4.8086 5.4342 5.4361 5.5351 5.5863 5.7063 5.7057 12 France/franc 4.2250 5.4396 6.5793 7.3148 7.4163 7.6621 7.7878 8.0442 8.0598 13 Germany/deutsche mark 1.8175 2.2631 2.428 2.4397 2.4665 2.5490 2.5914 2.6736 2.6679 14 Greece/drachma n.a. n.a. 66.872 84.037 84.105 84.486 84.677 89.217 92.837 15 Hong Kong/dollar n.a. 5.5678 6.0697 6.7868 6.9667 7.2822 7.1678 7.4416 8.0079 16 India/rupee 7.8866 8.6807 9.4846 9.9824 9.9895 10.049 10.0875 10.187 10.200 17 Indonesia/rupiah n.a. n.a. 660.43 970.81 968.83 973.00 978.57 984.09 986.24 18 Iran/rial n.a. 79.324 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19 Ireland/pound1 205.77 161.32 142.05 129.53 128.11 123.81 121.87 117.99 117.41 20 Israel/shekel n.a. n.a. 24.407 40.951 43.427 46.138 49.614 55.949 60.059 21 Italy/lira 856.20 1138.60 1354.00 1451.88 1467.76 1510.98 1533.41 1589.74 1602.62 22 Japan/yen 226.63 220.63 249.06 237.75 234.76 240.03 240.52 244.46 242.35 23 Malaysia/ringgit 2.1767 2.3048 2.3395 2.3063 2.3009 2.3244 2.3319 2.3523 2.3506 24 Mexico/peso 22.968 24.547 72.990 153.77 150.27 149.02 149.36 151.59 152.20 25 Netherlands/guilder 1.9875 2.4998 2.6719 2.7486 2.7737 2.8557 2.8985 2.9912 2.9844 26 New Zealand/dollar1 97.34 86.848 75.101 65.726 66.246 65.659 65.383 65.100 65.316 27 Norway/krone 4.9381 5.7430 6.4567 7.1460 7.1154 7.2678 7.3280 7.4641 7.4271 28 Peru/sol n.a. n.a. 694.59 1284.37 1390.60 1514.46 1645.99 1853.18 1995.33 29 Philippines/peso n.a. 7.8113 8.5324 9.8449 10.015 10.393 11.050 11.050 11.050 30 Portugal/escudo 50.082 61.739 80.101 99.055 99.521 107.39 119.03 123.03 124.41 31 Singapore/dollar n.a. 2.1053 2.1406 2.1010 2.0920 2.1198 2.1294 2.1416 2.1417 32 South Africa/rand1 128.54 114.77 92.297 91.42 92.31 91.65 91.19 89.55 89.86 33 South Korea/won n.a. n.a. 731.93 765.29 767.96 775.82 779.88 787.19 790.83 34 Spain/peseta 71.758 92.396 110.09 135.99 137.76 143.29 147.973 151.302 152.022 35 Sri Lanka/rupee 16.167 18.967 20.756 22.971 22.970 23.050 24.082 24.257 24.397 36 Sweden/krona 4.2309 5.0659 6.2838 7.4941 7.4978 7.6351 7.6936 7.8585 7.8773 37 Switzerland/franc 1.6772 1.9674 2.0327 2.0587 2.0572 2.1123 2.1184 2.1632 2.1623 38 Thailand/baht n.a. 21.731 23.014 22.990 22.988 22.990 22.990 22.990 22.990 39 United Kingdom/pound1 232.58 202.43 174.80 153.61 157.22 154.80 152.73 150.26 149.86 40 Venezuela/bolivar n.a. 4.2781 4.2981 9.0429 10.233 11.213 12.595 15.600 13.833 MEMO: United States/dollar2 87.39 102.94 116.57 121.82 122.05 125.16 126.62 129.77 129.74 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 STEVEN M. ROBERTS, Assistant to the Chairman DONALD L. KOHN, Deputy Staff Director FRANK O'BRIEN, JR., Deputy Assistant to the Board STANLEY J. SIGEL, Assistant to the Board ANTHONY F. COLE, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM R. JONES, Special Assistant to the Board NAOMI P. SALUS, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director EDWARD C. ETTIN, Deputy Director MICHAEL BRADFIELD, General Counsel MICHAEL J. PRELL, Deputy Director J. VIRGIL MATTINGLY, JR., Associate General Counsel JOSEPH S. ZEISEL, Deputy Director GILBERT T. SCHWARTZ, Associate General Counsel JARED J. ENZLER, Associate Director RICHARD M. ASHTON, Assistant General Counsel ELEANOR J. STOCKWELL, Associate Director NANCY P. JACKLIN, Assistant General Counsel DAVID E. LINDSEY, Deputy Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel FREDERICK M. STRUBLE, Deputy Associate Director HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director OFFICE OF THE SECRETARY ROBERT M. FISHER, Assistant Director SUSAN J. LEPPER, Assistant Director WILLIAM W. WILES, Secretary THOMAS D. SIMPSON, Assistant Director BARBARA R. LOWREY, Associate Secretary LAWRENCE SLIFMAN, Assistant Director JAMES MCAFEE, Associate Secretary STEPHEN P. TAYLOR, Assistant Director PETER A. TINSLEY, Assistant Director LEVON H. GARABEDIAN, Assistant Director DIVISION OF CONSUMER (Administration) AND COMMUNITY AFFAIRS GRIFFITH L. GARWOOD, Director DIVISION OF INTERNATIONAL FINANCE JERAULD C. KLUCKMAN, Associate Director GLENN E. LONEY, Assistant Director EDWIN M. TRUMAN, Director DOLORES S. SMITH, Assistant Director ROBERT F. GEMMILL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director LARRY J. PROMISEL, Associate Director DIVISION OF BANKING DALE W. HENDERSON, Deputy Associate Director SUPERVISION AND REGULATION SAMUEL PIZER, Staff Adviser MICHAEL P. DOOLEY, Assistant Director JOHN E. RYAN, Director RALPH W. SMITH, JR., Assistant Director WILLIAM TAYLOR, Deputy Director FREDERICK R. DAHL, Associate Director DON E. KLINE, Associate Director JACK M. EGERTSON, Assistant Director ROBERT A. JACOBSEN, Assistant Director ROBERT S. PLOTKIN, Assistant Director THOMAS A. SIDMAN, Assistant Director SIDNEY M. SUSSAN, Assistant Director SAMUEL H. TALLEY, Assistant Director LAURA M. HOMER, Securities Credit Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 and Official Staff NANCY H. TEETERS LYLE E. GRAMLEY EMMETT J. RICE OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES S. DAVID FROST, Staff Director THEODORE E. ALLISON, Staff Director 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

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

A73 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Robert P. Henderson Frank E. Morris Thomas I. Atkins James A. Mcintosh NEW YORK* 10045 John Brademas Anthony M. Solomon Gertrude G. Michelson Thomas M. Timlen Buffalo 14240 M. Jane Dickman John T. Keane PHILADELPHIA 19105 Robert M. Landis, Esq. Edward G. Boehne Nevius M. Curtis Richard L. Smoot CLEVELAND* 44101 J.L. Jackson Karen N. Horn William H. Knoell William H. Hendricks Cincinnati 45201 Clifford R. Meyer Robert E. Showalter Pittsburgh 15230 Milton G. Hulme, Jr. Harold J. Swart RICHMOND* 23219 Steven Muller Robert P. Black William S. Lee, III Jimmie R. Monhollon Baltimore 21203 Edward H. Co veil Robert D. McTeer, Jr. Charlotte 28230 Henry Ponder Albert D. Tinkelenberg Culpeper Communications John G. Stoides and Records Center 22701 ATLANTA 30301 William A. Fickling, Jr. Vacancy 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 Rocfeevelt Steptoe James D. Hawkins CHICAGO* 60690 John Sagan Silas Keehn Stanton R. Cook DDaanniieell MM.. DDooyyllee 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 Memphis 38101 G. Rives Neblett Randall C. Sumner MINNEAPOLIS 55480 William G. Phillips E. Gerald Corrigan John B. Davis, Jr. Thomas E. Gainor Helena 59601 Gene J. Etchart Robert F. McNellis KANSAS CITY 64198 Paul H. Henson Roger Guffey Doris M. Drury HHeennrryy RR.. CCzzeerrwwiinnsskkii Denver 80217 James E. Nielson Wayne W. Martin Oklahoma City ... 73125 Christine H. Anthony William G. Evans Omaha 68102 Robert G. Lueder Robert D. Hamilton DALLAS 75222 Gerald D. Hines Robert H. Boykin John V. James William H. Wallace El Paso 79999 Chester J. Kesey Joel L. Koonce, Jr. Houston 77252 Paul N. Howell J.Z. Rowe San Antonio 78295 Carlos A. Zuniga Thomas H. Robertson SAN FRANCISCO 94120 Caroline L. Ahmanson John J. Balles Alan C. Furth Richard T. Griffith Los Angeles 90051 Bruce M. Schwaegler Richard C. Dunn Portland 97208 John C. Hampton Angelo S. Carella Salt Lake City.... 84125 Wendell J. Ashton A. Grant Holman Seattle 98124 John W. Ellis Gerald R. Kelly *Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, payable to the order of the Board of Governors of the Federal Mail Stop 138, Board of Governors of the Federal Reserve Reserve System. Remittance from foreign residents should System, Washington, D.C. 20551. When a charge is indicat- be drawn on a U.S. bank. Stamps and coupons are not ed, remittance should accompany request and be made accepted. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- Parts 2 and 3, $1.00 each; 10 or more to one address, $.85 TIONS. 1974. 125 pp. each. ANNUAL REPORT. OPEN MARKET POLICIES AND OPERATING PROCEDURES— FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to $2.00 each in the United States, its possessions, Canada, one address, $1.75 each. and Mexico; 10 or more of same issue to one address, REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- $18.00 per year or $1.75 each. Elsewhere, $24.00 per NISM. Vol. I. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. year or $2.50 each. 1972. 220 pp. Each Volume $3.00; 10 or more to one BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint address, $2.50 each. of Part I only) 1976. 682 pp. $5.00. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- BANKING AND MONETARY STATISTICS. 1941-1970. 1976. ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 1,168 pp. $15.00. pp. Cloth ed. $5.00 each; 10 or more to one address, ANNUAL STATISTICAL DIGEST $4.50 each. Paper ed. $4.00 each; 10 or more to one 1971-75. 1976. 339 pp. $ 5.00 per copy. address, $3.60 each. 1972-76. 1977. 377 pp. $10.00 per copy. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE 1973-77. 1978. 361 pp. $12.00 per copy. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 1974-78. 1980. 305 pp. $10.00 per copy. pp. $4.00 each; 10 or more to one address, $3.60 each. 1970-79. 1981. 587 pp. $20.00 per copy. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1980. 1981. 241 pp. $10.00 per copy. 1973. 271 pp. $3.50 each; 10 or more to one address, 1981. 1982. 239 pp. $ 6.50 per copy. $3.00 each. FEDERAL RESERVE CHART BOOK. Issued four times a year in IMPROVING THE MONETARY AGGREGATES: REPORT OF THE February, May, August, and November. Subscription ADVISORY COMMITTEE ON MONETARY STATISTICS. includes one issue of Historical Chart Book. $7.00 per 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 year or $2.00 each in the United States, its possessions, each. Canada, and Mexico. Elsewhere, $10.00 per year or ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— $3.00 each. Regulation Z) Vol. I ^Regular Transactions). 1969. 100 HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each tion to the Federal Reserve Chart Book includes one volume $1.00; 10 or more of same volume to one issue. $1.25 each in the United States, its possessions, address, $.85 each. Canada, and Mexico; 10 or more to one address, $1.00 FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY each. Elsewhere, $1.50 each. UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- address, $1.50 each. RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in THE BANK HOLDING COMPANY MOVEMENT TO 1978: A the United States, its possessions, Canada, and Mexico; COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to 10 or more of same issue to one address, $13.50 per year one address, $2.25 each. or $.35 each. Elsewhere, $20.00 per year or $.50 each. IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. THE FEDERAL RESERVE ACT, as amended through April 20, 1978. 170 pp. $4.00 each; 10 or more to one address, 1983, with an appendix containing provisions of certain $3.75 each. other statutes affecting the Federal Reserve System. 576 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. pp. $7.00. FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 each; 10 or more to one address, $1.50 each. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; ERAL RESERVE SYSTEM. 10 or more to one address, $1.25 each. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. OF THE U.S. GOVERNMENT SECURITIES MARKET. 1969. $13.50 each. 48 pp. $.25 each; 10 or more to one address, $.20 each. NEW MONETARY CONTROL PROCEDURES: FEDERAL RE- JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOV- SERVE STAFF STUDY, 1981. ERNMENT SECURITIES MARKET; STAFF STUDIES—PART SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL each. PART 2, 1971. 153 pp. and PART 3, 1973. 131 pp. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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. 121. REDLINING: RESEARCH AND FEDERAL LEGISLATIVE RESPONSE, by Glenn B. Canner. Oct. 1982. 20 pp. CONSUMER EDUCATION PAMPHLETS 122. BANK CAPITAL TRENDS AND FINANCING, by Samuel H. Short pamphlets suitable for classroom use. Multiple Talley. Feb. 1983. 19 pp. copies available without charge. 123. FINANCIAL TRANSACTIONS WITHIN BANK HOLDING COMPANIES, by John T. Rose and Samuel H. Talley, Alice in Debitland May 1983. 11 pp. Consumer Handbook to Credit Protection Laws 124. INTERNATIONAL BANKING FACILITIES AND THE EURO- The Equal Credit Opportunity Act and . . . Age DOLLAR MARKET, by Henry S. Terrell and Rodney H. The Equal Credit Opportunity Act and . . . Credit Rights in Mills, August 1983. 14 pp. Housing 125. SEASONAL ADJUSTMENT OF THE WEEKLY MONETARY The Equal Credit Opportunity Act and . . . Doctors, Law- AGGREGATES: A MODEL-BASED APPROACH, by David yers, Small Retailers, and Others Who May Provide Inci- A. Pierce, Michael R. Grupe, and William P. Cleveland, dental Credit August 1983. 23 pp. The Equal Credit Opportunity Act and . . . Women Fair Credit Billing Federal Reserve Glossary Guide to Federal Reserve Regulations REPRINTS OF BULLETIN ARTICLES How to File A Consumer Credit Complaint Most of the articles reprinted do not exceed 12 pages. If You Borrow To Buy Stock If You Use A Credit Card Perspectives on Personal Saving. 8/80. Series on the Structure of the Federal Reserve System Federal Reserve and the Payments System: Upgrading The Board of Governors of the Federal Reserve System Electronic Capabilities for the 1980s. 2/81. The Federal Open Market Committee Survey of Finance Companies, 1980. 5/81. Federal Reserve Bank Board of Directors Bank Lending in Developing Countries. 9/81. Federal Reserve Banks The Commercial Paper Market since the Mid-Seventies. 6/82. Monetary Control Act of 1980 Applying the Theory of Probable Future Competition. 9/82. Organization and Advisory Committees International Banking Facilities. 10/82. Truth in Leasing U.S. International Transactions in 1982. 4/83. U.S. Currency New Federal Reserve Measures of Capacity and Capacity What Truth in Lending Means to You Utilization. 7/83. 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, 20, 21, 22, 27 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 25 Banks, by classes, 19-22 Turnover, 16 Domestic finance companies, 39 Depository institutions Federal Reserve Banks, 12 Reserve requirements, 8 Foreign banks, U.S. branches and agencies, 24 Reserves and related items, 3, 4, 5, 14 Nonfinancial corporations, 38 Deposits (See also specific types) Savings institutions, 30 Banks, by classes, 3, 19-23, 30 Automobiles Federal Reserve Banks, 4, i2 Consumer installment credit, 42, 43 Turnover, 16 Production, 48, 49 Discount rates at Reserve Banks and at foreign central banks (See Interest rates) BANKERS balances, 19-22 Discounts and advances by Reserve Banks (See Loans) (See also Foreigners) Dividends, corporate, 37 Bonds (See also U.S. government securities) New issues, 36 Rates, 3 EMPLOYMENT, 46, 47 Branch banks, 17, 23, 56 Eurodollars, 28 Business activity, nonfinancial, 46 Business expenditures on new plant and equipment, 38 Business loans (See Commercial and industrial loans) FARM mortgage loans, 41 Federal agency obligations, 4, 11, 12, 13, 34 CAPACITY utilization, 46 Federal credit agencies, 35 Capital accounts Federal finance Banks, by classes, 19 Debt subject to statutory limitation and types and Federal Reserve Banks, 12 ownership of gross debt, 33 Central banks, discount rates, 67 Receipts and outlays, 31, 32 Certificates of deposit, 23, 28 Treasury financing of surplus, or deficit, 31 Commercial and industrial loans Treasury operating balance, 31 Commercial banks, 17, 23, 27 Federal Financing Bank, 31, 35 Weekly reporting banks, 19-24 Federal funds, 3, 6, 18, 20, 21, 22, 24, 28, 31 Commercial banks Federal Home Loan Banks, 35 Assets and liabilities, 19-22 Federal Home Loan Mortgage Corporation, 35, 40, 41 Business loans, 27 Federal Housing Administration, 35, 40, 41 Commercial and industrial loans, 17, 23, 24, 27 Federal Land Banks, 41 Consumer loans held, by type, 42, 43 Federal National Mortgage Association, 35, 40, 41 Loans sold outright, 22 Federal Reserve Banks Nondeposit funds, 18 Condition statement, 12 Number, by classes, 19 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, 20, 21, 42, 43 Corporations Paper, 26, 28 Profits and their distribution, 37 Financial institutions Security issues, 36, 66 Loans to, 20, 21, 22, 24 Cost of living (See Consumer prices) Selected assets and liabilities, 30 Credit unions, 30, 42 Float, 4 (See also Thrift institutions) Flow of funds, 44, 45 Currency and coin, 19 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 15 agencies, 24 Customer credit, stock market, 29 Foreign currency operations, 12 Foreign deposits in U.S. banks, 4, 12, 20, 21, 22 DEBITS to deposit accounts, 16 Foreign exchange rates, 68 Debt (See specific types of debt or securities) Foreign trade, 55 Demand deposits Foreigners Adjusted, commercial banks, 16 Claims on, 56, 58, 61, 62, 63, 65 Banks, by classes, 19-24 Liabilities to, 22, 55, 56-60, 64, 66, 67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All GOLD REAL estate loans Certificate account, 12 Banks, by classes, 17, 20-22, 41 Stock, 4, 55 Rates, terms, yields, and activity, 3, 40 Government National Mortgage Association, 35, 40, 41 Savings institutions, 30 Gross national product, 52, 53 Type of holder and property mortgaged, 41 Repurchase agreements and federal funds, 6, 20-22 HOUSING, new and existing units, 50 Reserve requirements, 8 Reserves Commercial banks, 19 INCOME, personal and national, 46, 52, 53 Depository institutions, 3, 4, 5, 14 Industrial production, 46, 48 Federal Reserve Banks, 12 Installment loans, 42, 43 U.S. reserve assets, 55 Insurance companies, 30, 33, 41 Residential mortgage loans, 40 Interbank loans and deposits, 19 Retail credit and retail sales, 42, 43, 46 Interest rates 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, 68 National income accounts, 53 Money and capital markets, 3, 28 Savings and loan association, 9, 30, 41, 42, 44 (See also Mortgages, 3, 40 Thrift institutions) Prime rate, commercial banks, 26 Savings deposits (See Time and savings deposits) Time and savings deposits, 9 Securities (See specific types) International banking facilities, 18 Federal and federally sponsored credit agencies, 35 International capital transactions of United States, 54-67 Foreign transactions, 66 International organizations, 58, 59-61, 64-67 New issues, 36 Inventories, 52 Prices, 29 Investment companies, issues and assets, 37 Special drawing rights, 4, 12, 54, 55 Investments (See also specific types) State and local governments Banks, by classes, 19-22, 30, 41 Deposits, 20-22 Commercial banks, 3, 17, 19-22 Holdings of U.S. government securities, 33 Federal Reserve Banks, 12, 13 New security issues, 36 Savings institutions, 30, 41 Ownership of securities issued by, 20, 21, 22, 30 Rates on securities, 3 LABOR force, 47 Stock market, 29 Life insurance companies (See Insurance companies) Stocks (See also Securities) Loans (See also specific types) New issues, 36 Banks, by classes, 19-22 Prices, 29 Commercial banks, 3, 17, 19-22, 23, 27 Federal Reserve Banks, 4, 5, 7, 12, 13 Insured or guaranteed by United States, 40, 41 TAX receipts, federal, 32 Savings institutions, 30, 41 Thrift institutions, 3 (See also Credit unions, Mutual savings banks, and Savings and loan associations) MANUFACTURING Time and savings deposits, 3, 9, 15, 18, 19-23 Capacity utilization, 46 Trade, foreign, 55 Production, 46, 49 Treasury currency, Treasury cash, 4 Margin requirements, 29 Treasury deposits, 4, 12, 31 Member banks (See also Depository institutions) Treasury operating balance, 31 Federal funds and repurchase agreements, 6 Reserve requirements, 8 Mining production, 49 UNEMPLOYMENT, 47 Mobile homes shipped, 50 U.S. government balances Monetary and credit aggregates, 3, 14 Commercial bank holdings, 19, 20, 21, 22 Money and capital market rates (See Interest rates) Treasury deposits at Reserve Banks, 4, 12, 31 Money stock measures and components, 3, 15 U.S. government securities Mortgages (See Real estate loans) Bank holdings, 18, 19-22, 24, 33 Mutual funds (See Investment companies) Dealer transactions, positions, and financing, 34 Mutual savings banks, 9, 20-22, 30, 33, 41, 42 (See also Federal Reserve Bank holdings, 4, 12, 13, 33 Thrift institutions) Foreign and international holdings and transactions, 12, 33, 67 Open market transactions, 11 NATIONAL defense outlays, 32 Outstanding, by type and holder, 30, 33 National income, 52 Rates, 3, 28 U.S. international transactions, 54-67 Utilities, production, 49 OPEN market transactions, 11 PERSONAL income, 53 VETERANS Administration, 40, 41 Prices Consumer and producer, 46, 51 Stock market, 29 WEEKLY reporting banks, 20-24 Prime rate, commercial banks, 26 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