Federal Reserve Bulletin, 1984-05

VOLUME 70 • NUMBER 5 • MAY 1984 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • 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 401 RECENT FINANCING ACTIVITY OF 423 J. Charles Partee, Member, Board of Gov- NONFINANCIAL CORPORATIONS ernors, discusses the role of the Federal Reserve with respect to criminal miscon- Nonfinancial corporations were able to imduct and abuse by bank insiders and says prove their overall financial position as a that because all types of improper insider result of the more favorable financial condiactivities can have an adverse effect on a tions that emerged in late 1982 and 1983. bank's condition, undermine public confidence in banking organizations generally, 411 INDUSTRIAL PRODUCTION and contribute to a bank's failure, all such Output rose about 1.4 percent in April. activities require a prompt and effective supervisory response, before the Com- 413 STATEMENTS TO CONGRESS merce, Consumer, and Monetary Affairs Subcommittee of the House Committee on E. Gerald Corrigan, President, Federal Re- Government Operations, May 3, 1984. serve Bank of Minneapolis, reviews developments over the past three years in the priced services activities of the Federal 427 ANNOUNCEMENTS Reserve Banks and says that the Federal Reserve is now better positioned to turn its Publication of The U.S. Economy in An attention to fostering further improvements Interdependent World: A Multicountry in the efficiency, safety, and integrity of the Model. payments mechanism, before the Senate Statement on the role of the Federal Re- Committee on Banking, Housing, and Urserve in the Argentine financing package. ban Affairs, April 11, 1984. Change in boundaries of Federal Reserve 419 Anthony M. Solomon, President, Federal Districts. Reserve Bank of New York, testifies on behalf of the Federal Reserve System about Changes in Board staff. the recently announced financial package Admission of two state banks to memberfor helping Argentina meet interest payship in the Federal Reserve System. ments on its bank debt and says that by participating in this arrangement the Federal Reserve acted only as an agent and did 429 LEGAL DEVELOPMENTS not back or guarantee payment to the com- Amendments to Regulation A; amendment mercial banks with its own funds, before to Rules Regarding Delegation of Authorthe Subcommittee on International Finance ity; various bank holding company and and Monetary Policy of the Senate Commitbank merger orders; and pending cases. tee on Banking, Housing, and Urban Affairs, May 3, 1984. Similar testimony was presented by Mr. Solomon before the Sub- Ai FINANCIAL AND BUSINESS STATISTICS committee on International Trade, Investment and Monetary Policy of the House A3 Domestic Financial Statistics Committee on Banking, Finance and Urban A42 Domestic Nonfinancial Statistics Affairs on May 1, 1984. A50 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A65 GUIDE TO TABULAR PRESENTATION, A70 FEDERAL RESERVE BOARD STATISTICAL RELEASES, AND SPECIAL PUBLICATIONS TABLES A73 INDEX TO STATISTICAL TABLES A66 BOARD OF GOVERNORS AND STAFF A75 FEDERAL RESERVE BANKS, BRANCHES, A68 FEDERAL OPEN MARKET COMMITTEE AND OFFICES AND STAFF; ADVISORY COUNCILS A76 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Financing Activity of Nonfinancial Corporations Michael J. Moran of the Board's Division of have been short lived. When interest rates began Research and Statistics prepared this article. to rise after spring 1983, bond volume fell off Elizabeth G. Schroeder provided research assis- sharply. Stock prices, too, lost their upward tance. momentum in the second half of 1983, and the brisk pace of new equity issuance began to The more favorable financial conditions that moderate; in early 1984, offerings of new stock emerged in late 1982 and 1983 allowed business slowed still further as the stock market experifirms to improve their overall financial position, enced its first substantial decline since 1982. At which had been deteriorating for several years. the same time that issuance of bonds and stocks During the late 1970s and early 1980s, nonfinan- began to slow, business capital expenditures and cial corporations increasingly turned to credit external financing requirements were beginning markets to finance growing outlays as profits and to swell. As a result, firms began to rely more internal cash flows weakened. Sagging stock heavily on short-term debt as a source of funds. prices, high interest rates, and uncertainty about During the period of restructuring in 1982 and future inflation and interest rates discouraged 1983, many companies considerably improved firms from raising funds in the long-term capital their balance sheets; however, such activity did markets and led to a massive buildup of short- not produce a marked improvement in the traditerm debt. The large volume of short-term debt tional financial ratios for the business sector as a and the increased volatility of interest rates made whole. Moreover, barring a reversal of the fithe financing costs and the earnings of compa- nancing patterns of recent months, these ratios nies more uncertain. Reflecting the diminishing are likely to deteriorate over the course of 1984. financial strength of many firms, downgradings The implications of this potential deterioration of corporate debt became common (chart 1). for the overall financial condition of these firms In response to a sharp drop in interest rates may not be as serious as in the past. The uncerand a surge in share prices in the latter half of tain financial environment in the late 1970s and 1982 and early 1983, nonfinancial corporations issued a large volume of long-term debt and a record volume of new equities. Corporate profits 1. Rating changes on long-term corporate debt by improved in 1983 so that the flow of internal Moody's Investors Service1 funds for these firms was larger than their capital Number of changes expenditures. In the absence of the need to raise external funds, the financing activity of nonfinancial corporations as a group largely represented the restructuring of balance sheets: the proceeds of the stock and bond sales allowed firms to reduce their dependence on short-term debt and to build liquid assets. Similar patterns of corporate financing were 1977 1979 1981 1983 evident in the early stages of some past recover- 1. The number of changes on a corporation's highest-ranking debt ies. In the current cycle, however, the efforts by issues. In April 1982, Moody's increased the number of rating categories by dividing most of its major categories into three subcatecorporations to restructure their balance sheets gories. Only changes from one major category to another are counted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

402 Federal Reserve Bulletin • May 1984 early 1980s stimulated innovation in corporate 3. The financing gap of nonfinancial corporations1 finance, and the impact of inflation made the Billions of dollars book values of assets and liabilities less meaningful, so that an examination of traditional balance sheet measures may not reveal a true picture of financial condition. Indeed, although further restructuring seems likely should interest rates fall, financial managers do not appear to be under severe market pressure to bolster their financial position in the current environment. 1. The financing gap is capital expenditures less gross internal funds. SOURCE. Federal Reserve flow of funds accounts, quarterly data, CAPITAL EXPENDITURES AND seasonally adjusted annual rates. INTERNAL CASH FLOW After declining for more than a year, capital expenditures by nonfinancial corporations Although total capital expenditures of nonfiturned upward sharply during 1983, with spend- nancial corporations increased sharply in the ing on both fixed investment and inventories early stages of the recovery, external financing contributing to the growth (chart 2). Fixed-in- requirements were moderate. Indeed, for 1982 and 1983 as a whole, the flow of internal funds exceeded capital outlays (chart 3). The strong 2. Capital expenditures of nonfinancial corporations internal cash flow was attributable primarily to Billions of dollars an improvement in economic profits (that is, reported profits plus the inventory valuation adjustment and the capital consumption adjustment) and a lower tax burden resulting from the Economic Recovery Tax Act of 1981. After declining to low levels in 1982, beforetax economic profits of nonfinancial corporations rose markedly in 1983 (chart 4), reflecting both stronger sales and higher profit margins. Total capital expenditures include fixed investment, inventory Profit margins increased as improvements in investment, and purchases of mineral rights from the U.S. government. Fixed investment includes plant and equipment expenditures productivity and relatively moderate increases in and investment in residential construction. wages combined to produce only small changes SOURCE. Federal Reserve flow of funds accounts, quarterly data, seasonally adjusted annual rates. in unit labor costs. Also, net interest expenses vestment spending exhibited one of the sharpest 4. Economic profits of nonfinancial corporations recoveries in the postwar period owing primarily Billions of dollars to expenditures on equipment; outlays for structures declined slightly, on balance, in the first year of the current recovery. Businesses began to rebuild their inventories during 1983, and in light of the unusually sharp reductions in 1982, this rebound contributed significantly to the strength in total capital outlays. Inventory investment strengthened considerably further in early 1984. Relative to the volume of sales, however, the level of inventories was low com- Economic profits are reported profits plus the inventory valuation adjustment and the capital consumption adjustment. pared with historical standards. SOURCE. U.S. Department of Commerce. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Financing Activity of Nonfinancial Corporations 403 5. Effective average tax rate on economic before-tax EXTERNAL FINANCING profits of nonfinancial corporations During late 1982 and early 1983, nonfinancial corporations seized the opportunity to issue a large volume of long-term bonds and stock. With 75 strong internal cash flows, this activity was 50 largely an effort to restructure balance sheets. Beginning in the second half of 1983, conditions 25 in the capital markets deteriorated somewhat, inducing firms to slow their stock and bond 1971 1973 1975 1977 1979 1981 1983 issuance and to turn toward short-term debt Economic profits are reported profits plus the inventory valuation adjustment and the capital consumption adjustment. (table 1). SOURCE. U.S. Department of Commerce. The bond market experienced a strong rally in the second half of 1982 as weak economic activiwere reduced as the level of interest rates de- ty and diminishing inflation, along with falling clined in late 1982 and early 1983. The ratio of short-term rates, produced sharp declines in before-tax economic profits to gross domestic long-term interest rates (chart 6). With the deproduct of nonfinancial corporations—an ap- cline in interest rates, the spreads between the proximate measure of profit margins—increased yields on corporate bonds and Treasury securifrom about 6V2 percent in late 1982 to about 103/t ties decreased to their lowest levels since 1979. percent in the fourth quarter of 1983, close to the Nonfinancial corporations responded to these highest levels achieved during the 1970s. movements with a flood of new bonds, primarily Since the Economic Recovery Tax Act was in the public market. In preceding quarters, enacted in 1981, firms have been able to keep a companies had deferred desired long-term bormuch greater share of gross earnings. This act rowing in the hope that they later would find liberalized the schedule for accelerated deprecia- more attractive market conditions, and corporate tion and expanded the coverage of the invest- bond volume had fallen to its lowest level since ment tax credit. After these changes, preliminary 1973; indeed, in real terms, it had fallen to its data indicate that the effective average tax rate of lowest level since the mid-1960s. corporations, that is, the ratio of tax payments to Besides boosting the total volume of bonds in economic profits before taxes, fell to about 30 late 1982 and early 1983, nonfinancial corporapercent (chart 5)—the lowest level in the postwar tions also increased the proportion of issues with period. longer maturities. As interest rates earlier had 1. Net funds raised in markets by nonfinancial corporations Billions of dollars 1982' 1983' TTyyppee ooff iinnssttrruummeenntt 11997777 11997788 11997799 11998800 11998811 H, | H2 H2 Total, long-term 35.8 32.8 20.9 52.5 22.5 31.7 58.7 74.6 36.7 Equity 2.7 -.1 -7.8 12.9 -11.5 7.0 15.8 38.2 18.4 Notes and bonds2 29.6 28.8 27.3 37.6 35.5 24.7 43.3 31.8 17.0 Mortgages 3.5 4.1 1.4 2.0 -1.5 .0 -.4 4.6 1.3 Total, short-term 36.6 47.7 67.3 38.5 69.7 64.6 13.2 .2 60.2 Bank loans3 20.9 32.3 47.1 30.6 44.1 55.3 31.4 3.9 30.5 Commercial paper 1.6 2.7 9.0 4.0 14.7 8.7 -18.2 -8.7 7.8 Finance company loans 13.5 11.5 10.2 3.1 8.7 1.7 -2.6 8.8 18.8 Acceptances .6 1.2 1.0 .8 2.2 -1.1 2.6 -3.8 3.1 1. Seasonally adjusted annual rate. nonfinancial corporations and tax-exempt bonds issued by state or 2. Includes notes and bonds sold in foreign markets by U.S. local governments for the benefit of a corporation. 3. Includes a small amount of U.S. government loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

404 Federal Reserve Bulletin • May 1984 6. Selected interest rates and yield spreads stock or were sold with warrants that entitled the Percent holder to purchase common stock in the future at a predetermined price. These privileges afforded investors the potential for large gains in the future and permitted companies to issue bonds with lower current yields. In contrast to public offerings, private placements of corporate bonds remained at relatively low levels (table 2). Activity in the private market began to slow in the late 1970s as life insur- 1977 1979 1981 1983 ance companies—the dominant purchasers of The interest rate on A-rated utility bonds is the Federal Reserve Board's series on recently offered corporate bonds, monthly averages private placements—decreased their participaof Friday quotes. The Treasury rate is the 30-year constant maturity tion. Life insurers experienced a reduction in series, monthly averages of daily data. The yield spread is the corporate rate less the Treasury rate. their discretionary cash flow for investment as a result of increased demand for policy loans and declining insurance sales. Growth of policy loans risen and become more volatile, firms had moved progressively toward intermediate-term issues so 2. Private placement of bonds that by 1982 only about one-third of total gross by nonfinancial corporations bond volume had maturities of 20 years or longer Millions of dollars (chart 7). In the first half of 1983, however, the Year or half year Total Industrial Utilities proportion of longer-term bonds jumped to nearly 50 percent—a figure still below that typical in 1977 17,859 14,205 3,654 1978 17,516 12,605 4,911 the 1970s, but a marked increase over the more 1979 16,353 8,245 8,108 1980 11,862 7,224 4,638 recent experience. 1981 13,156 7,181 5,975 1982 12,692 8,930 3,762 As interest rates declined in 1982 and 1983 and 1983:H1' 10,782 8.034 2,748 as risk perceptions were altered with the improving economy, investors sought to maintain the 1. Annual rate, not seasonally adjusted. SOURCE: Investment Dealers Digest. Since the second half of 1983, yields on their portfolios by acquiring securities the Digest no longer makes its data on private placements publicly bearing lower credit ratings. This shift is reflect- available. ed in the narrowing of interest rate spreads and a more receptive market for lower-rated bonds. In has tailed off in the past two years, and in vest- 1983, nearly one-fourth of total gross bond vol- able funds from sources such as annuities, penume had either no credit rating or a rating below sion funds, employee benefit plans, and new Baa. In previous years, these lower-rated firms insurance products have increased. The experiaccounted for only 10 to 15 percent of total bond ence of previous years, however, has left portfovolume. Many of the bonds sold by lower-rated lio managers at insurance companies with a firms last year were convertible into common desire to maintain more liquid portfolios, and they have tended to emphasize public bond is- 7. Long-term bond issuance i sues, which are more readily resold in the sec- Percent ondary market. Also, the lower-quality issuers that found the public market more receptive last year might otherwise have sought to raise funds in the private market. An important change in the private placement market recently has been a shift from longerterm to intermediate-term maturities. As in the 1977 1979 1981 1983 public market, this shift reflects in part the 1. Proportion of total gross bond volume in the public market with perceived high level of real interest rates and the maturities of 20 years or longer. Includes both nonfinancial and financial corporations. volatility of rates in recent years. Another impor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Financing Activity of Nonfinancial Corporations 405 3. Gross bond issuance by U.S. firms sold in the U.S. market because under current in foreign markets laws their interest income would be subject to a Millions of dollars 30 percent "withholding" tax; in addition, investors usually can achieve a greater degree of Type of corporation AAllll YYeeaarr oorr qquuaarrtteerr anonymity in the Euromarket because bonds ccoorrppoorraattiioonnss Nonfinancial | Financial generally are issued in bearer form. 1977 1,128 n.a. n.a. Eurobond issuance by U.S. firms swelled in 1978 1,116 n.a. n.a. 1979 2,868 n.a. n.a. 1982, but volume diminished in 1983 as external 1980 4,104 n.a. n.a. financing needs were small and companies pre- 1981 6,180 n.a. n.a. 1982 13,632 9,192 4,440 ferred to issue the longer-maturity bonds that 1983 8,340 3,912 4,428 1984:1' 17,472 10,344 7,128 could be sold readily only in the domestic market. As intermediate-term issues again became 1. Annual rate, not seasonally adjusted, common in early 1984, however, U.S. firms n.a. Not available. returned to the Euromarket with an even greater tant factor in the private market has been a volume of offerings than in 1982. change in the nature of the liabilities of life Stock prices turned sharply upward in summer insurance companies. Insurance companies now 1982: measured from the lows of August 1982 to receive a large amount of their investable funds the peaks attained the following summer, the from annuity contracts and pension funds for major stock price indexes advanced 60 to 110 which they guarantee a fixed rate of return for percent (chart 8 and table 4). These advances periods typically ranging from three to ten years. mark the largest one-year increase in share The desire of insurance companies to match the prices in the postwar period. Over this span, the duration of their bond portfolios with that of their market value of common stock on the New York guaranteed investment contracts has led them to and American exchanges and in the over-theacquire more intermediate-term instruments. counter market increased about $700 billion. Another change in corporate financing patterns has been the increased use of the offshore 4. Percentage change in stock prices1 market (table 3). Well-known firms have found the Euromarket attractive because they fre- August June January 1982 1983 1984 quently can issue intermediate-term debt (nearly Index to to to June January April all Eurobond issues have maturities in the five- 1983 1984 1984 year to ten-year range) at lower interest rates DJIA2 60.7 3.1 -12.1 than in the domestic market. This disparity in NYSE composite 68.4 -1.3 -8.6 AMEX composite 107.4 -7.6 -10.2 financing costs exists because the domestic and NASDAQ composite 106.2 -12.3 -16.0 Euromarkets are segmented: foreign investors are discouraged from directly purchasing bonds 1. Percent change from the peak or trough in the first month listed to the peak or trough in the second month listed. 2. Dow Jones Industrial Average. 8. Movements in selected stock price indexes The desire to restructure balance sheets and Index the strong performance of stock prices stimulated nonfinancial corporations to issue record amounts of new equity shares (table 1). Even after adjustment for inflation, late 1982 and 1983 represented the most active period on record for new equity sales. Most of the stock issuance was by corporations with stock already traded publicly, but the market for initial public offerings also AMEX = American Stock Exchange; NASDAQ = National Asso- was extremely active: during 1983, an estimated ciation of Securities Dealers Automated Quotations; NYSE = New %1Vi billion of equity issuance represented first- York Stock Exchange. Each index is a monthly average, adjusted to equal 100 in August 1982. time stock sales by nonfinancial corporations, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

406 Federal Reserve Bulletin • May 1984 more than twice the previous record volume in most of this volume was accounted for by inter- 1981. The increase in stock prices also had an mediate-term issues. Meanwhile, business loans effect on the types of bonds sold. As previously at commercial banks and finance companies and mentioned, the issuance of convertible bonds the issuance of commercial paper by nonfinanand bonds with warrants was common during cial corporations increased sharply. A portion of 1983. this shorter-term borrowing was undertaken to Stock prices lost their upward momentum in finance mergers and acquisitions, but the pace the second half of 1983, and although issuance was strong even after allowance for this influwas still strong by historical standards, the vol- ence. ume of new equity began to slow. The major stock price indexes fell about 10 percent in INNOVATION IN CORPORATE FINANCE January and February, and new stock sales by nonfinancial firms in early 1984 were limited. During the 1970s and early 1980s, many new Furthermore, because large amounts of stock instruments and financing techniques came into were retired in merger transactions, net issuance use as firms and investors endeavored to cope of equity shares in the first quarter of 1984 was with an increasingly uncertain economic and decidedly negative. financial climate—one marked in particular by Increased bond issuance during late 1982 and rapid inflation and high and volatile interest early 1983, combined with strong internal cash rates. Perhaps the most basic technique used by flows and heavy stock issuance, allowed nonfi- business firms was diversification of the liability nancial corporations to reduce their dependence side of their balance sheets to avoid being subject on loans and short-term market debt, which had to constraints on the availability of funds and to increased rapidly in the preceding years (table 1). ensure access to the lowest-cost funds. The large Business loans at commercial banks rose only volume of funds raised in the Euromarket is one moderately from the fourth quarter of 1982 indication of this trend. Moreover, many large through the third quarter of 1983. In addition, corporations have established finance subsidiarnonfinancial corporations paid down commercial ies. While these subsidiaries provide a broad paper and bankers acceptances over the same array of financial services, one of their most period. Borrowing at finance companies was important functions is to maintain a presence in strong in 1983, but the major area of strength was several credit markets and to channel funds to loans for commercial vehicles, which generally the parent company. The rapid growth of both have longer maturities than those on commercial commercial bank lines of credit and commercial bank loans or commercial paper. paper also suggests that corporations are con- A substitution of longer-term debt and equity cerned with immediate access to alternative for shorter-term debt typically has occurred in sources of credit. Since 1977, the volume of the late stages of recession and the early part unused loan commitments advanced to nonfinanof recovery. In the current cycle, however, the cial corporations has nearly tripled to about $350 period of restructuring was relatively short. billion. Similarly, in the mid-1970s only 500 non- When interest rates rose in the second half of financial corporations had access to the commer- 1983—from what already were regarded by many cial paper market, and the volume of paper as very high real levels—business firms became outstanding was about $13 billion; in early 1984 more reluctant to issue longer-term debt. Overall about 800 nonfinancial firms had issued commerbond volume slowed markedly, and there was cial paper, and the outstanding volume had inonce again a tendency to move toward intermedi- creased to $50 billion. Many firms that have ate maturities (chart 7). In addition, the volume started issuing commercial paper in recent years of shorter-term borrowing by nonfinancial corpo- ordinarily would not have credit ratings high rations surged in the fourth quarter, with sub- enough to tap this market; however, a letter of stantial expansion in nearly all categories. credit from a commercial bank specifically backing their paper has given them access on attrac- The emphasis on shorter-term financing contive terms. tinued in the first quarter of 1984. Bond issuance in both the domestic and Euromarkets rose, but Another important source of funding used by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Financing Activity of Nonfinancial Corporations 407 corporations in recent years is the tax-exempt goods and make periodic rental payments rather market. State and local governments, subject to than interest payments on debt. Leasing fresome constraints imposed by the federal govern- quently is attractive because it allows firms to ment, can raise funds on behalf of corporations expand without showing larger amounts of debt to be employed for private purposes. This financ- directly on their balance sheets (in most cases, ing is allowed to support either small projects or lease obligations are reported in the footnotes of projects that will benefit the community, such as financial statements). Also, firms might lease the purchase of pollution control equipment or capital goods to avoid owning equipment that the construction of airports and seaports. Corpo- may become obsolete. Finally, tax factors may rate financing in this market grew steadily be involved. A firm with low tax bills would not throughout most of the 1970s and early 1980s so need to shelter income by utilizing the depreciathat in recent years issuing bonds in the tax- tion expenses and investment tax credits associexempt market became a major source of funding ated with the outright ownership of durable for nonfinancial corporations. Bond issuance by goods. businesses in this market slowed dramatically in The Financial Accounting Standards Board early 1984 because the tax-exempt status of such and the Securities and Exchange Commission bonds was jeopardized by bills in the Congress to recently approved another technique, known as limit private purpose funding in the tax-exempt in-substance defeasance, that allows firms to market. remove debt from their balance sheets. In these The development of alternative sources of transactions, a firm places in an irrevocable trust financing has led commercial banks to adjust the essentially risk-free assets, such as cash or U.S. pricing of commercial and industrial loans. Spe- government obligations, that generate sufficient cifically, commercial banks found that they had cash flow to service a portion of its debt. Beto offer loan terms that were more competitive cause all principal and interest payments on the with those available from the commercial paper debt will be made from the assets held in trust, market and foreign banks, another source of the firm can remove the debt and the assets from funds developed by corporations. In previous its balance sheet. The firm also can book a periods, commercial banks typically priced their capital gain if older, low-coupon debt is removed term business loans that carried floating rates at from the balance sheet. Treasury securities bearspreads off the prime rate; in recent years, how- ing current market yields would be capable of ever, competitive pressures forced them to offer servicing a larger volume of low-coupon debt, loan agreements in which borrowers have the and the firm could report as current income an ability to select (and switch) among pricing op- amount approximately equal to the difference tions that frequently include bases such as the between the book values of the defeased debt London interbank offered rate or the rate on and the assets placed in trust. In effect, this boost negotiable certificates of deposit. This flexibility to income represents the present value of future enables firms to manage their exposure to inter- net income that would be earned if the asset and est rate risk more actively, as well as potentially debt remained on the balance sheet. Besides to lower their borrowing costs. Below-prime increasing income reported in the current period, lending also has become common in recent years these transactions will improve a firm's debt for short-term loans, but such lending is usually ratios, although this improvement comes at the available only to larger customers—especially expense of some decline in liquidity. Data are not those who have access to the commercial paper available on the amount of debt removed from market. balance sheets through in-substance defeasance, but market participants indicate that it has been Along with developing new sources of funds, used frequently since its approval at the end of nonfinancial corporations have adopted new 1983. techniques to fund their expansion or to improve the condition of their balance sheets. For in- Another innovation that has been used since stance, lease financing has become more com- 1982 is the "interest rate swap." With this type mon in recent years. Instead of borrowing to of transaction, two firms issue debt under their finance expenditures, firms can lease capital own names, the debt of one bearing a fixed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

408 Federal Reserve Bulletin • May 1984 interest rate and that of the other a floating process of registering securities for sale so that interest rate; and then they exchange their inter- large, well-known corporations could market est rate obligations. This generally allows each of securities more quickly. Initially, the changes the parties to service its preferred type of debt— authorized by the commission involved abbrevifixed rate or variable rate—at a lower interest ated registration statements, disclosure of inforcost than either could obtain by issuing debt mation by reference to other documents the firm individually. For these transactions to be benefi- already had made public, and selective review of cial to both parties, the issuers must have a documents by the SEC staff. With these changes comparative advantage in a particular type of in force, issuers could have a registration statedebt or in a particular market. With each party ment approved in as short a time as two days; specializing in the market in which its relative before the changes, the registration process costs are lowest, the combined interest expense might well consume several weeks. will be minimized, and the overall cost savings In March 1982, the Securities and Exchange will be divided by the terms of the swap agree- Commission went a step further by authorizing a ment. Multinational corporations have engaged technique known as shelf registration. Under this in similar transactions known as "currency system, larger corporations (those with outstandswaps." Rather than exchanging fixed-rate and ing stock exceeding $150 million in market value) variable-rate interest obligations, these arrange- can register the full amount of debt or equity they ments involve firms swapping interest obliga- reasonably expect to sell over a two-year period. tions denominated in different currencies. Pre- After this initial registration, the firm can sell the cise data are not available on the volume of securities without further delay when funds are either type of transaction, but several reports needed or market conditions seem favorable. suggest that swapping activity has been widely Shelf registration is an important financing techused. nique if market conditions are volatile because it Because interest rate swaps and currency offers firms the flexibility to react quickly when swaps allow corporations to service the type of conditions become favorable. Shelf registration debt they prefer, these transactions probably also seems to reduce the costs of issuing securilimit the exposure of the firms to risk associated ties because savings can be achieved on legal, with changes in interest rates and exchange accounting, and printing expenses, and greater rates. Another method corporations can use to competition among investment bankers may rereduce their exposure to such risk is to hedge duce underwriting fees. with financial futures, options, and forward con- Corporations quickly adopted the shelf registracts. Interest rate futures are now traded in a tration technique in the bond market: 50 to 60 variety of maturities for several different instru- percent of all debt sales during the past two years ments, and options are available on Treasury involved this technique (table 5). The data in the securities as well as on Treasury futures. Similar- table are aggregated over all corporations, but ly, futures and options in the major currencies disaggregated data would show that financial are traded actively. In recent years, several firms have used the shelf technique for debt commercial banks have begun to offer forward securities somewhat more frequently than have interest rate contracts that allow their customers nonfinancial firms. Financial firms are accusto fix the rate on loans or deposits before the tomed to raising funds quickly in a variety of actual date of the transaction. By utilizing these markets, and shelf registration allows them acinstruments effectively, firms can reduce their cess to the bond market in a manner similar to interest rate risk for periods of up to two years that of alternative sources. In the equity market, and their exchange rate risk for periods of up to shelf registration accounts for less than 10 perone year. cent of total issuance. Some market analysts Another important development that has as- have argued that new equity shares sitting on the sisted corporations in raising external funds in- shelf tend to depress the current price of a firm's volves the mechanics of issuing securities in the stock because existing shares will trade on a fully public market. In 1978 the Securities and Ex- diluted basis as investors immediately discount change Commission began to streamline the the effect of potential new equity sales. Also, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Financing Activity of Nonfinancial Corporations 409 5. Bonds issued through shelf registration attest to the seriousness of their financial deterio- Millions of dollars ration. The number of bankruptcies soared in 1982, downgradings of corporate debt rose to Bonds sold through shelf YYeeaarr aanndd TToottaall ggrroossss registration record levels, and unprecedented numbers of vvoolluummee ooff qquuaarrtteerr bboonnddss iissssuueedd firms reduced or omitted dividend payments. Dollar volume Percent of total The aggressive balance sheet restructuring that 1982:2 ... 8,696 1,704 19.6 3... 13,822 7,774 56.2 was evident in late 1982 and early 1983 further 4... 15,702 9,164 58.4 demonstrates that corporations were greatly con- 1983:1 ... 13,725 7,682 56.0 cerned with their overall financial position. At 2... 15,276 7,445 48.7 3 ... 7,962 3,950 49.6 the same time, however, the abrupt slowdown in 4... 10,302 5,908 57.3 bond issuance in the second half of 1983 and in 1984:1 ... 14,265 8,392 58.8 equity issuance in early 1984 indicates that corporations are willing to restructure only when many firms prefer that their stock sales be widely interest rates and price-earnings ratios are at distributed through a large syndicate of under- levels they find attractive. Moreover, the narrow writers. Because sales of securities by shelf risk spreads and the market access of lowerregistration frequently occur quickly through a rated firms suggest that the investment commularge investment bank, extensive syndicates typ- nity is not especially uncomfortable with the ically are not assembled, and the securities are current situation. not broadly distributed. Because of strong internal cash flows, nonfinancial corporations were able to use proceeds of their long-term bond and equity financing in CORPORATE LIQUIDITY AND late 1982 and 1983 to reduce their reliance on CAPITALIZATION shorter-term debt and to build liquid assets. Reflecting this activity, the ratio of liquid assets As measured by traditional yardsticks of finan- to short-term liabilities increased sharply during cial strength that are applied to individual com- 1982 and 1983 (chart 9). Except for a brief period panies, the balance sheets of nonfinancial corpo- in 1981, this ratio has declined continuously rations as a whole have deteriorated over the since the end of 1976. Part of the decline in the past decade: debt has had heavier emphasis than late 1970s probably is related to the greater equity, loans and short-term market debt have confidence firms have gained in their ability to played a larger role than long-term debt, and obtain credit to meet their immediate financing liquid assets have declined relative to both total needs. To the extent that nonfinancial corporaassets and current liabilities. In part, this deterioration in key financial ratios reflects the toll 9. Selected balance sheet ratios of nonfinancial taken on the corporate sector by sluggish eco- corporations nomic growth and poor corporate profits in the Percent late 1970s and early 1980s. However, the escalation of inflation over this period and the institutional changes already discussed probably altered the desired balance sheet position of corporations as well as the standards of soundness applied by the market. Furthermore, the traditional balance sheet indicators of corporate 1971 1975 1979 1983 well-being became increasingly questionable, Short-term debt includes commercial bank loans, commercial paowing to the differences between book values per, bankers acceptances, finance company loans, and U.S. government loans. Liquid assets include currency, demand and time deposand market values of assets and liabilities as well its, foreign deposits, security RPs, U.S. government securities, state as to accounting practices that may not reflect and local government obligations, and open market paper. Total current liabilities include short-term debt, trade debt, and profits taxes the economic well-being of a corporation. payable. * = break in the series. Nevertheless, the problems that corporations SOURCE. Federal Reserve flow of funds accounts, quarterly data, experienced in the late 1970s and early 1980s seasonally adjusted annual rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

410 Federal Reserve Bulletin • May 1984 tions have unused lines of credit and ready 1980s. New equity issuance was discouraged by access to the commercial paper market, the need sagging stock prices, and retained earnings gento hold liquid assets diminishes. However, the erally were low because of poor corporate profbrief increase in liquidity in 1981 and the strong its. As a result, firms relied primarily on borrowrebound in 1982 and 1983 suggest that corpora- ings to meet their funding requirements, and the tions viewed their holdings of liquid assets as ratio of equity to debt declined steadily from deficient. The ratio of liquid assets to short-term 1976 to mid-1982 (chart 10). Some decline in liabilities began to level off in the second half of observed ratios of equity to debt reflects distor- 1983 and likely moved lower in the first quarter tions related to inflation; that is, existing assets of 1984. and liabilities continue to be valued at historical The reduced dependence on loans and short- cost on firms' balance sheets and do not reflect term market debt in 1982 and 1983 also helped to market values. Management may perceive its reduce the ratio of short-term debt to total debt; company's equity position as stronger than that however, the improvement was only moderate reported on the books if the value of assets has and by the fourth quarter of 1983 this ratio was increased with inflation and the real value of again pushing upward (chart 9). This ratio and long-term debt has depreciated. Also, firms have the liquidity ratio already discussed are distorted real incentives to increase their leverage as somewhat by measurement problems. Specifical- prices accelerate; in particular, the tax-sheltering ly, outstanding bonds are considered long-term aspects of interest expenses are a more impordebt, even when they are maturing within the tant factor as nominal interest rates rise with next year or if their financing costs are uncertain inflation. Notwithstanding these considerations, because they are variable-rate obligations. Simi- the equity position of nonfinancial corporations larly, all bank loans, including term loans, are declined considerably during the late 1970s. With classified as short-term debt. Measurement prob- the record volume of new equity sales in 1982 lems aside, a strong trend has been evident in and 1983 and the increase in retained earnings, this ratio since the early 1970s as the high level of the ratio of equity to debt on a book-value basis interest rates and the uncertainty about the fu- showed marked improvement. However, beture behavior of inflation and interest rates has cause of the low volume of new equity issuance consistently caused firms to avoid long-term in the first quarter of 1984, the retirement of debt. By shifting to shorter-term and variable- stock associated with heavy merger activity, and rate sources of funds, however, corporations the pronounced pickup in short-term debt, the have exposed their financing costs to the wide ratio of equity to debt likely turned downward fluctuations of the interest rate cycle. With the once again. volatility that has been evident in recent years, The failure thus far of the key financial ratios financing costs and earnings have become more of nonfinancial corporations to return to the cyclical. levels of the mid-1970s reflects both an alteration The equity position of nonfinancial corpora- in the desired balance sheet position and only a tions deteriorated during the late 1970s and early brief period of restructuring in 1982 and 1983. While an appreciable drop in long-term interest rates or a rally in the stock market likely would 10. Ratio of stockholders' equity to total debt for manufacturing firms stimulate further restructuring, financial managers and market participants in the aggregate appear to be fairly content with the balance sheet positions in the current environment. However, as expanding economic activity increases the needs of corporations for external financing, a continuation of the recent reliance on borrowing—especially in the form of loans and shortterm market paper—could push firms into un- 1973 1975 1977 1979 1981 1983 comfortable balance sheet postures. • SOURCE. Quarterly Financial Report, U.S. Bureau of the Census. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

411 Industrial Production Released for publication May 15 percent of the 1967 average, industrial output in April was 6.0 percent above its previous peak Industrial production increased an estimated 1.4 reached in July 1981. percent in April following a rise of 0.5 percent in In market groupings, production of consumer March and larger increases in January and Feb- goods advanced 1.1 percent in April, with duraruary. The April increase was the 17th consecu- bles up 0.4 percent and nondurables up 1.3 tive monthly gain. Advances in output were percent. Autos were assembled at an annual rate widespread among most products and materials, of 7.7 million units, somewhat below recent sales with the exception of motor vehicles. At 163.1 levels, and down from the rate of 8.2 million 1967=100 1967 = 100 TOTAL INDEX 170 Products ouput 170 150 X,— ^ i /1 150 Materials ouput 130 - 130 1 1 1 i i 1 FINAL PRODUCTS MATERIALS 190 190 Business equipment \ 170 170 —^ _ N 150 150 Consumer goods 130 130 Defense and space 110 110 90 CONSUMER GOODS INTERMEDIATE PRODUCTS 190 Business supplies Nondurable 170 150 \ r N / Durable \ / V /V / 130 v Construction supplies ^ —' 1969-70=100 Annual rate, millions of units 180 140 1978 1980 1982 1984 1978 1980 1982 All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

412 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Grouping 1984 1983 1984 AAAppprrr... 111999888333 tttooo AAAppprrr... Mar. Apr. Dec. Jan. j Feb. Mar. Apr. 111999888444 Major market groupings Total industrial production 1.0 1.4 14.4 Products, total .5 .4 1.2 12.9 Final products .4 .4 1.2 12.5 Consumer goods .1 .2 1.1 9.4 Durable -.4 .4 .4 16.7 Nondurable .3 .2 1.3 6.7 Business equipment . .9 .5 1.3 19.4 Defense and space .. .9 .8 1.7 12.3 Intermediate products . .8 .5 1.4 14.3 Construction supplies 1.0 1.1 1.5 18.3 Materials 1.9 .6 1.4 16.6 Major industry groupings Manufacturing 162.4 164.9 .3 1.7 1.3 .5 1.5 15.2 Durable 151.7 154.4 1.0 2.5 1.3 .7 1.8 19.6 Nondurable 177.8 179.9 -.5 .7 1.3 .2 1.2 10.2 Mining 123.5 123.3 2.1 .9 -.2 -.8 -.2 10.5 Utilities 178.3 178.7 3.5 -.8 -2.4 1.0 .2 5.6 NOTE. Indexes are seasonally adjusted. units in March; these seasonally adjusted rates Output of materials increased 1.4 percent in take into account temporary plant closings in April. Among durable materials, there were parconnection with model changeovers. Output of ticularly strong gains in equipment parts and in home goods as well as production of consumer basic metals. Production of nondurable materials nondurable s gained sharply in April following also rose rapidly, but output of energy materials two months of little change. Production of equip- rose only 0.3 percent. ment was up 1.5 percent, with sizable increases In industry groupings, manufacturing output in the manufacturing, commercial, and defense gained 1.5 percent in April, with sharp increases equipment groups. There were sharp gains in in both durable and nondurable industries. Outoutput of construction supplies throughout the put by utilities edged up, but mining output slid first quarter, and the brisk pace apparently con- 0.2 percent, in part due to a decline in coal tinued in April. production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

413 Statements to Congress Statement by E. Gerald Corrigan, President, Reflecting in part the legacy of 70 years experi- Federal Reserve Bank of Minneapolis, before the ence, I believe there is virtually unanimous Committee on Banking, Housing, and Urban agreement that the Federal Reserve, as the na- Affairs, U.S. Senate, April 11, 1984. tion's central bank, has a natural and continuing interest in the efficient and safe functioning of the I am pleased to have this opportunity to review payments mechanism. In part, that natural interdevelopments over the past three years regarding est arises from the fact that disruptions in the the priced services activities of the Federal Re- payments mechanism—regardless of their oriserve Banks. My prepared statement is divided gins—can threaten the safety and soundness of into four parts: (1) an overview of the role of the financial institutions and financial markets and, Federal Reserve in the provision of payments in the extreme, the smooth functioning of the services to depository institutions; (2) a general economy at large. However great those concerns review of our experience with the pricing of such may have been 70 years ago, they take on even services as required by the Monetary Control greater importance in the context of today's Act of 1980; (3) comments on the draft report on highly interdependent domestic and international such activities prepared by the General Account- banking and financial markets. ing Office (GAO) at the request of members of The point should also be made that transaction this committee; and (4) some brief remarks on balances at depository institutions and the assothe subject of delayed availability of funds asso- ciated reserve balances held at the Fed are, at ciated with some check deposits. one and the same time, the vehicle through which most payments are made, the bedrock THE ROLE OF THE FEDERAL RESERVE upon which all other financial flows rest, and the IN THE PAYMENTS MECHANISM mechanism through which monetary policy is conducted. This trilogy of unique functions is The operation of the nation's payments mecha- one of the reasons why banks have, in effect, had nism is a vast and complex undertaking that an exclusive franchise on the operation of the daily—directly or indirectly—affects virtually payments mechanism, and it is one of the reaevery citizen, every business, and every finan- sons why I believe that banks are special. That cial institution in this country and millions of trilogy points, in my judgment, to the imperaothers abroad. For most of us, the act of making tives of strong banks, strong financial markets, or receiving payment is as routine as getting out and a strong and efficient clearing system. of bed in the morning. However, although literal- To put it more pointedly, the payments system ly hundreds of billions of dollars change hands demands the highest degree of public confidence. daily with such reliability and efficiency, we It simply would not be possible to make hunshould not take for granted the smooth workings dreds of billions of dollars in payments daily if of the payments mechanism. The safe, efficient, public confidence in the certainty of payments and the payments process were shaken or underand trusted operation of the payments system is mined. While perhaps not of the same order of clearly a matter of high public interest in the importance, the operation of the payments mech- United States and around the world. Indeed, anism inevitably involves other public policy these very considerations relating to the safety considerations relating, for example, to the ease and efficiency of the payments mechanism were and terms with which smaller economic entities a central element in the decision of the Congress and more remotely located institutions and indito create the Federal Reserve more than 70 years viduals have access to the payments system. ago. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

414 Federal Reserve Bulletin • May 1984 The question, therefore, is not whether the the payments mechanism has been one of the central bank has a responsibility to promote the primary factors that has permitted and encoursafety and efficiency of the payments mecha- aged the payments system in the United States to nism, but rather it is one of how that responsibil- achieve this lofty status. ity can most effectively be discharged. More One can speculate as to whether the result particularly, should the Fed seek to achieve would have been different had the historic role of these public policy objectives by regulation the Fed been confined to that of a regulator of the alone; should it act as a processor of last resort, payments system. That speculation—however taking on only those functions that others are interesting—cannot alter 70 years experience nor unwilling to provide or unable to provide at can it alter the fact of where we are today. Let reasonable fees and conditions; or should it me cite a few examples that may help to illustrate maintain an operational presence in the pay- my point. ments mechanism along the broad lines that have • Is it reasonable to conclude that the book prevailed for the past 70 years? From my per- entry system for U.S. government securities spective, the dictates of public policy point would have developed as quickly as it did—if at strongly in the direction of preserving the opera- all—if the Fed had been only a regulator rather tional presence of the Fed in the payments than a participant in the payments mechanism? mechanism—recognizing, of course, that the ex- • Is it reasonable to assume that one or more act configuration of that presence need not, and private entities could, or would even want to, probably will not, remain as it is today. In saying fully displace the Fed's funds transfer network? this I should also stress that an operational • Is it reasonable to assume that, absent a presence for the central bank along the general Federal Reserve operational presence, 99 perlines of the Fed's current activities is by no cent of the checks written in this vast country means unique among central banks in the induswith its 40,000 depository institutions would be trialized countries of the world. collected in two days or less? "The processor of last resort" concept is • On the other side of the coin, as late as 1979, deceptively appealing, but, in my judgment, it is the Federal Reserve attempted, in the form of a not workable. The Federal Reserve Banks could Board policy statement, to put a halt to delayed not maintain the standby facilities, equipment, disbursement of checks. However, we probably and personnel that would be needed to function have more delayed disbursement of checks today on an on-again, off-again basis or to step into than we did in 1979. The Federal Reserve— those situations in which an adequate level of through the so-called "high dollar group sort payments services might not be available nation- program," which will be implemented on April wide at reasonable costs and terms. Moreover, 23 of this year, is now seeking to achieve through even the simplest aspects of the payments mech- its operations what it could not achieve through anism require a continuity of expertise and work- "regulation." ing knowledge that would be very difficult to The point, of course, is that the payments maintain in such an environment. Even if feasi- mechanism is so complex, legally and operationble, the cost to the taxpayers would be high. ally, that it is far from clear that public policy Therefore, assigning to the Fed a role as proces- objectives could be achieved simply by writing sor of last resort is simply not viable. regulations. Moreover, it is quite possible that In my opinion the United States has—taking absent the "hands on" working knowledge account of the size of our economy and the size gained through operations, regulatory efforts of our country—the most efficient payments sys- would quickly take on an ivory tower character tem in the world. That fact cannot be attributed that would be ineffective, impair the efficiency of to technological superiority, and it surely cannot the payments mechanism, or both. There is no be attributed to the presence of a neat and clean doubt in my mind that the Fed's operational banking and financial structure. While many presence in the payments mechanism is a better factors may be involved, I would suggest that the alternative than what otherwise would be a cumside-by-side presence of the Federal Reserve and bersome and very costly regulatory apparatus. the private banking system in the operation of While I am skeptical that regulation alone Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 415 could provide a cost-effective and efficient meth- safe payments system that we enjoy in the Unitod of ensuring that the public policy objectives ed States. Alternative configurations are easy to associated with the operation of the payments conceive, but may not be so easy to operate in a mechanism would be well served, there are other way that is appropriately sensitive to those pubaspects of the Fed's operational presence that lic interest considerations I spoke of earlier. would be very difficult to duplicate if it were Much of what I have said about the role of the simply a regulator of the payments system. For Federal Reserve is germane to one of the most example, the Fed can be thought of as something basic issues raised by the GAO draft report, of a neutral and trusted intermediary in the namely, whether there is a conflict of interest payments process. Its only interest is bringing between the Fed's role as a service provider and together collectors and payors in the fastest and as a regulator of the payments mechanism. I will safest manner possible. It has no particular inter- readily concede that there is a potential conflict est in whether a check is large or small, whether of interest between the Fed's role as a regulator the collecting or paying institution is large or and as a provider of payments services in a small, or whether the writer of a check is an competitive environment. However, there are otherwise valued customer. Indeed, the fact that powerful forces that seem to me to more than the Federal Reserve has no relationships with adequately ensure that potential conflicts will bank customers that Eire not depository institu- never become actual conflicts. These powerful tions is a feature that makes it an attractive countervailing forces include the generalized source of payments services for many depository public scrutiny of Fed actions, the oversight and institutions. general supervisory role of the Board of Gover- This role as a trusted and neutral intermediary nors, the public comment process, the activities is reinforced by the fact that the Fed is also the of the GAO, and the oversight by the Congress bankers' bank whose solvency is never in ques- itself. tion. This feature permits the Fed prudentially to Moreover, I think the point should be stressed assume risks such as the intraday credit expo- that removal of the Fed from an operational role sure on Fedwire or to act as a correspondent for in the payments system will not eliminate potenproblem banks when others may be unable or tial conflicts of interest—it will in fact create or unwilling to accept such risks. In tandem, the intensify other potential sources of conflict. That neutral intermediary and the ever-solvent bank- is, private suppliers of payments services legitiers' bank are aspects of the Fed's role in the mately look first to the interests of their custompayments mechanism that contribute, in no small ers and their shareholders in determining the way, to that essentia] public confidence in the operational posture they will take in providing payments system. such services. That is wholly appropriate, but at None of the above should be construed to times it may not yield results that are in the mean that the Fed's operational presence should public interest. The payments process is, inevitaremain exactly the same as it is today. Techno- bly, one that entails collisions of interests: paylogical developments, the advent of interstate ors want to slow it down; collectors want to banking, the creative efforts of individual banks, speed it up; large economic agents have more and a host of other factors, no doubt, will change clout and flexibility than do the small ones. that role over time. Moreover, the Congress may These potential conflicts are subtle and not easy wish to provide different direction to the Federal to detect or resolve. The potential conflicts asso- Reserve asking that we do more, that we do less, ciated with Fed activities—to the extent that or that we do nothing. At this juncture, however, they are real—are highly visible and readily I personally would urge that we retain the legisla- subject to remedy if abuses were to develop. tive status quo. Having said all of that, I should hasten to add The bottom line, as I see it, is that the financial that there will always be situations in which system, the business community, and the public operational activities of the Federal Reserve at large have been the clear beneficiaries of the Banks impinge on "regulatory" considerations Fed's role—in partnership with the banking com- and vice versa. Let me cite a few very contempomunity—in promoting the highly efficient and rary examples: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

416 Federal Reserve Bulletin • May 1984 • Just two weeks ago, the Federal Reserve price its payments services so that over the long Board requested public comment on a wide run fees would be established based upon the full variety of possible measures for reducing risk in costs of providing such services, including the the operation of large-dollar wire transfer sys- costs of float, taxes, and capital the Federal tems, including Fedwire itself. Reserve would incur if it were a private firm. • Beginning on April 23, the Federal Reserve Within little more than two years of the date will commence an operational program designed that the MCA required the Federal Reserve to to accelerate the collection of checks drawn on commence pricing, the following has occurred: certain institutions located outside Federal Re- • All payments services provided to depository serve cities. In certain instances, the practice of institutions have been priced and are now generdrawing checks on such institutions could under- ating sufficient total revenues to cover the full mine the efficiency of the check collection sys- costs of providing such services, including the tem, raise questions of equity, and, in the ex- costs of float, taxes, and capital the Fed would treme, also raise questions of safety and incur if it were a private firm. soundness. • Federal Reserve services have been opened • Later in this statement I will make reference to all depository institutions regardless of size to a possible operational change by the Fed that and location. could provide a major step forward in coping • Operational improvements by the Federal with the delayed availability problem on certain Reserve have dramatically reduced the daily check deposits. average amount of Federal Reserve check float In all of these areas, and in others I could from $4.5 billion in 1980 to a daily average of $1.2 mention, we must very carefully weigh opera- billion in the fourth quarter of 1983. Of the latter tional and policy considerations. In the final amount, $500 million was recovered through "as analysis, our actions should have a powerful of' adjustments and explicit fees, and the cost of public interest motivation. However, even when $700 million in "residual" check float was added the case for a particular action makes over- to the cost base subject to recovery through per whelming sense on both operational and public item fees. A major thrust of the Federal Repolicy grounds some market participants may serve's activities over the past two years was to object to our initiatives on the grounds that our reduce float to the extent possible through operaaction may be harmful to them or to their cus- tional improvements that added only modestly to tomers. I do not think we can or should avoid operating costs. This approach serves both equithose problems, but I do believe that the system ty and efficiency. If the value of all check float as of checks and balances I referred to earlier of 1982 and 1983 had simply been added—across provides more than adequate protection against the board—to costs and prices, sizable incenthe misuse of regulatory power by the Federal tives to increase float—particularly by the writ- Reserve. Indeed, as I see it, those checks and ers of large dollar checks—would have been balances may be so tilted that there is the danger created and the costs of such float shifted to the of the Federal Reserve not doing things that collection system generally, rather than being would serve the public interest simply to avoid borne by those who create and benefit from float. "rocking the boat." The transition to the priced services environment was managed not only with a view toward satisfying cost-recovery objectives, but also with EXPERIENCE WITH THE PRICING PROVISION a view toward seeking to enhance and improve OF THE MONETARY CONTROL ACT the efficiency of the payments mechanism. The goal of greater efficiency was served in a number During 1983, the Federal Reserve essentially of important respects including, but not limited completed the transition to pricing of its pay- to, the following: ments services to depository institutions as • Federal Reserve pricing served as a further called for in the Monetary Control Act of 1980 catalyst for moving in the direction of electronic (MCA). Specifically, the act required that the payments. Federal Reserve begin by September 1981 to • Federal Reserve pricing spurred the reemer- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 417 gence of local clearing arrangements among pri- prehensive draft report regarding the pricing of vate depositories. This tended to remove one Federal Reserve check-clearing services. The step in the processing cycle for many local draft report covers a wide range of issues raised checks, thereby resulting in faster and cheaper by members of the committee and still others clearing services. raised by a few commercial banks. The commit- • Changed deposit deadlines, processing cy- tee, I believe, is also aware that the Federal cles, and presentment times at many Federal Reserve engaged the services of a major account- Reserve offices permitted the shift of checks ing firm to take an even more detailed look at valued at about $2 billion per day from two-day other aspects of our priced service activities. collection to one-day collection. That report is a couple of months away from • It would appear that the amount of society's completion, and we will submit the conclusions real resources devoted to the payments mecha- of the report for the record at that time. nism has declined. Based on my reading of the GAO report, it • The Federal Reserve has deployed almost seems to me that steps already taken by the 3,000 low-cost terminals in small- and medium- Federal Reserve respond to most of the report's sized depository institutions, thus providing major suggestions or recommendations. We will, these institutions with convenient and inexpen- of course, submit a detailed response to the sive access to a wide range of payments and overall GAO report. There are, however, several related services. areas in which I would offer some further com- These achievements and the rapid transition to ments at this time. a "profitable" base of operations did not come • First, we fully agree with the need for more easily. Indeed, I believe it is entirely fair to and better disclosure on the part of the Federal suggest that the transition to the priced services Reserve regarding its priced services activities. environment was more difficult and complex— Toward that end, we have recently issued a and more contentious—than most of us anticipat- "Report on Priced Service Activities for 1983" ed at the time the MCA was enacted. Speaking and contemplate that a similar report—augmentfor myself, I think I can also say that if I had to ed by abbreviated quarterly reports—will be do it over again, there are some things I would prepared annually.1 have done differently. On balance, however, I • Second, the GAO report strikes me as somebelieve that the net effect of Fed pricing has been what cautious on the question of presentment good for the Fed, good for the banking industry, fees and on the specific question of whether—in and good for the public at large. some situations—the Federal Reserve should be I also believe that with the difficult initial required to pay presentment fees. This is an area transition to pricing now largely behind us, we in in which I have very strong views. I believe it the Federal Reserve are better positioned to turn would be a mistake to subject the Federal Reour attention to the more important questions of serve to presentment fees. If there is a case for what we can do—in cooperation with the bank- legislative action regarding presentment fees, I ing industry—to foster still further improvements would argue that such fees should be banned in the efficiency, safety, and integrity of the altogether for any check presented to a payor payments mechanism. These issues loom all the institution in advance of the 2:00 p.m. cut-off more important in the face of the financial inter- hour established in the Uniform Commercial dependencies that are now such a prominent Code. feature of contemporary financial institutions • Third, the GAO suggests several areas in and markets. which our internal procedures for allocating certain overhead costs to specific priced services might be improved. We are looking closely at these suggestions and at others made by our own THE GAO REPORT ON FED CHECK- CLEARING ACTIVITIES 1. The attachments to this statement are available on At the request of members of this committee, the request from Publications Services, Board of Governors of General Accounting Office has prepared a com- the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

418 Federal Reserve Bulletin • May 1984 staff and by our accounting firm. Some changes costs but is perceived to have a clear public in these procedures have already been made and purpose, it seems to me that we would have no others will be made, but—like the GAO—I do choice but to consult with the Congress. In the not believe such changes will have a material near term, I do not see that situation arising, but effect on costs or prices. over time it certainly could, particularly in the While these and other issues raised in the GAO face of the sweeping changes in the structure of report are important, there are two questions our financial system that are almost certain to raised in the chapter of the report on "Competi- occur over the next several years. Indeed, the tive Issues" that I believe are central. The first is potential for that situation arising is even greater the question of how to assure that the Federal in a context in which we perceive a strong and Reserve—with its central bank status and ability continuing interest on the part of the Congress in to influence the market it serves—continues to ensuring that an adequate level of payments exercise its authority responsibly. I spoke to that services are made available to all institutions issue earlier. The second of these central ques- regardless of their size and location. tions is what response the Federal Reserve There is one other point implied by the GAO should make if it becomes clear that the price the report that is relevant to the preceding discussion market will ultimately be willing to pay for a and warrants a few words. We in the Federal service the Federal Reserve provides is less than Reserve need to articulate a clear statement of what the Federal Reserve must charge to recover our future role in the operation of the payments its full costs. That question comes down to what system in a priced environment. It was not should the Fed do if it cannot cover its costs in a possible to develop a statement of this nature particular operation? In one sense, the answer to until the initial transition to pricing had been that question is very easy, but in another sense it accomplished. Now that the transition is behind is very difficult. Not every service we provide or us, we are well positioned to proceed with that might provide has the same degree of public task, and I would hope that such a statement interest considerations associated with it. For would be adopted by the Federal Reserve Board example, in considering the efficiency, safety, by midyear. and integrity of the payments mechanism, nobody would seriously argue that there are great DELAYED AVAILABILITY public policy considerations associated with coin wrapping. At the other extreme, I think most I am keenly aware that there is acute interest in everyone would readily concede that there are this committee and elsewhere in the Congress in significant public policy considerations associat- finding ways to stop the practice of excessive ed with the electronic transfer of reserve bal- delays by some depository institutions in passing ances and securities by the Federal Reserve. credit to their customers on some check depos- Given these differences in the public interest its. Allow me, therefore, to close with a few brief content of our various services, our response to comments on this subject. My comments are as the question can, in some instances, be rather follows: straightforward. Absent some strong public pur- • First, the incidence of abuse in delaying cuspose, a failure to cover costs in a particular tomer availability on check deposits varies conservice area must lead to the discontinuation of siderably from market to market—and from instithe service in question by the Federal Reserve. tution to institution—and unfortunately in some Indeed, we may have to face that very situation cases is far too lengthy. with respect to certain of our safekeeping opera- • Second, efforts by some states and by depositions for paper securities. In those circum- tory institutions and their trade associations, stances, we are quite prepared to discontinue interest on the part of the Congress, and the particular operations, but in the process we will recently issued policy statement of federal finanhave to face some very difficult questions of how cial institutions regulators represent constructive and with what speed such services are phased steps in dealing with the problem. out. • Third, I have reservations about efforts to In the case of a service that does not cover legislate availability schedules in part because Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 419 there is a danger, however remote, that such tion to the practice—and to the larger problems legislated schedules could have the perverse associated with the mountains of paper payments effect of encouraging banks that do not delay made daily—is to continue to accelerate the availability to do so and in part because I believe move toward electronic payments. I said earlier our objectives should be more ambitious than that I believe that one of the benefits of the MCA current procedures and technology would per- was that it helped reduce some of the barriers to mit. For example, under recently adopted state the more widespread use of electronics in bankregulations and as contemplated in some ver- ing for consumers and businesses alike. The sions of proposed federal legislation, delays in technology is certainly there, and our younger availability on some checks of up to eight days people—to say nothing of our school-age chilare authorized. I believe we can do much better dren—are less intimidated by computer termiand would not, therefore, want to institutionalize nals than are many of us. Similarly, the relative delays of that duration. costs of paper versus electronic payments con- • Fourth, in a context in which we are willing to tinue to shift in a direction that is favorable to provide some reasonable time for voluntary ini- electronics. Yet, the current paper-based system tiatives to take hold, the Federal Reserve is provides real or perceived advantages to many— actively considering a phased-in approach to a advantages that in substantial ways grow out of universal system of wire or telephonic advice of the inefficiences of the paper-based system, inlarge dollar return items. With such a system in cluding the substantial amounts of non-Federalplace, the case for a depository institution delay- Reserve float associated with its operations. ing funds availability on all checks to protect Thus, seizing the opportunities associated with against the risk of loss on the tiny fraction of electronic payments will require a dual effort items that are returned would be greatly dimin- pushing the efficiency of the paper system to its ished, particularly as the dollar cutoff for wire limit while at the same time developing and advice is reduced over time. This is a good exploiting the benefits of electronics. example of how advancing technology can work We in the Federal Reserve are strongly comto produce better results than might be gained mitted to those efforts and to the larger goal of through legislatively imposed availability sched- promoting the safety and efficiency of the payules that—to some extent—are captive to current ments mechanism. We look forward to working procedures and techniques. closely with the banking industry and with others While these steps can help solve or minimize in the furtherance of that goal. • the delayed availability problem, the only solu- Statement by Anthony M. Solomon, President, these hearings can be helpful in setting the record Federal Reserve Bank of New York, before the straight and in clearing up any misunderstand- Subcommittee on International Finance and ings that may have arisen about the Federal Monetary Policy of the Committee on Banking, Reserve's role in these arrangements. Housing, and Urban Affairs, U.S. Senate, Assistant Secretary Mulford has outlined the May 3, 19841 main features of the package and has described the events leading up to the agreement on that I welcome this opportunity to testify, on behalf package. I will comment on the role of the of the Federal Reserve System, about the recent- Federal Reserve and respond to some questions ly announced financial package to help Argentina that have been raised about the significance of meet interest payments on its bank debt. I think this agreement. Let me make clear at the outset that there was no Federal Reserve money and no Federal Re- 1. Mr. Solomon presented similar testimony before the serve guarantee in any way involved in the Subcommittee on International Trade, Investment and Monearrangement. The Federal Reserve participated tary Policy of the Committee on Banking, Finance and Urban as agent, and only as agent, through the Federal Affairs, U.S. House of Representatives, May 1, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

420 Federal Reserve Bulletin • May 1984 Reserve Bank of New York, at the request of the New York Reserve Bank. The Argentineans other parties to the agreement. transmitted instructions to the New York Fed to In this capacity, the Federal Reserve had no give effect to that understanding. We in turn financial interest in the transaction, but received informed the eleven banks that procedures reand held the money that was being provided by flecting Argentine obligations to repay the $100 the other parties, and, at the proper moment, million loan had been completed. In general, in transferred that money to an agent bank that the course of the discussions leading up to the made the payments to meet Argentina's overdue agreement and the Federal Reserve's operational interest obligations. role, we were, naturally, in close touch with The New York Federal Reserve routinely acts Treasury officials, some commercial banks, and as an intermediary in transactions at the request interested foreign central banks. of other central banks, just as they sometimes act It should be clear that, by participating in this for us, and in that sense this transaction was not arrangement, the New York Federal Reserve has extraordinary. In the normal course of business not backed or guaranteed payment to the comwe regularly receive and hold funds for other mercial banks with its own funds, and no party central banks, generally funds that represent the has any claim against the Federal Reserve. I dollar reserves of these nations. At the owners' repeat this because some of the press reports instruction, we invest these funds, largely in may have conveyed a different impression. U.S. government securities, or disburse them. Your letter inviting the Federal Reserve to As agent for the Argentine financing package, testify asked that we comment on its significance the New York Federal Reserve set up an escrow with respect to several matters, including the account on its books. On March 30 we received ongoing process of managing the Latin American deposits of $500 million into the escrow account, debt problem, the stability and soundness of representing $100 million from the government of financial markets and the banking system, and Argentina, $100 million from the eleven commer- Argentina's negotiations with the IMF and with cial banks on the working committee for Argenti- the banks. na, and $300 million from the monetary authori- My own assessment is that the agreement on ties of Mexico, Venezuela, Brazil, and the financial package constituted a very positive Colombia. We also received from the Managing and constructive move of benefit to all the par- Director of the International Monetary Fund a ties. The U.S. participation is consistent with progress report stating that constructive discus- earlier actions taken, for example, with respect sions had taken place with the Argentine govern- to Mexico and Brazil supporting their adoption ment on Argentina's recent economic policies of IMF adjustment programs. I think this action and the main elements of a program of economic has substantially improved the prospects for stabilization that would provide the basis for working out Argentina's debt problem and do- IMF support. With the full $500 million on de- mestic economic difficulties on a satisfactory posit and with this progress report, we trans- basis. As a first step, that process inevitably ferred the $500 million to the agent bank in New requires a rescheduling of maturing debt obliga- York, which in turn disbursed funds to banks tions along with a new money package, both around the world to meet Argentina's overdue linked directly to a new IMF-supported adjustinterest obligations. ment program. The short-term financial package There was one additional way in which the that we are discussing today provided both valu- New York Fed played an operational role. As able time and positive momentum for that appart of the arrangement, the Argentine govern- proach. But the package itself does not assure a ment agreed to repay the eleven commercial satisfactory resolution of the Argentine problem, banks in the lending group $100 million upon the much less resolve the broader debt issues of completion of pending lending arrangements Latin America as a whole. with a large syndicate of banks. If those lending Perhaps it would help if I sketched in a bit of arrangements are not completed by June 30, the the background of Argentina's debt problem. Argentine government has agreed to repay the Argentina's difficulties in servicing its debt began eleven banks from Argentine deposits held at the to emerge even before the time of the Falklands Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 421 war, when its economy was experiencing large cess of 90 days would not be cleared up by capital outflows, domestic recession, and rapidly March 31. They had accepted the fact that accruaccelerating inflation. Early in 1983, agreement als of interest income on many Argentine public was reached on an IMF-supported adjustment sector loans would stop, and that prior accruals program, and progress was made on clearing up would be reversed as of that date. Nonetheless, I arrears and on rescheduling the debt. But later in think that there was genuine concern among all 1983, during the final months of the military parties, including Argentina as well as others, government, wage policy slipped badly, inflation that such a development entailed substantial rates soared, and interest arrears on the external risks. Clearly there would have been an appeardebt began once again to build up rapidly. ance that the situation was eroding and that The newly elected Alfonsin government set positions might harden on all sides. Should that forth the main themes of its approach to the debt situation have developed, there were several problem soon after it took office in December. It concerns. For one, the domestic financial situamade clear that it wanted to reach agreement tion in Argentina could have deteriorated further with the IMF on a new adjustment program— from capital outflows and other financial preswhile emphasizing its intention to make the ad- sures. Also, the prospects of rescheduling Arjustments its economy needed largely through gentina's debt on acceptable terms, and in the major reductions in government expenditures framework of a new IMF program, would diminand in the size of the budget deficit, but without ish, with possible adverse spillover effects for the further recession or cuts in real wages. The new debt problem more broadly. government also stated that it wanted to work Argentina would have been the first major out rescheduling agreements with banks and Latin American borrower in recent times to shift other creditors—but warned that it would press into nonaccrual status on its sovereign debt. It is for better terms than had been negotiated by the not clear what might have been the reaction, previous military government. either of creditors—who might be troubled about While discussions continued with the IMF and the precedent for other debt situations—or of with the creditor banks, Argentina's interest Argentina as well as of other debtors. Certainly it arrears accumulated, particularly to bank credi- would have been much more difficult to arrange tors. For U.S. banks, interest in arrears for more new bank financing for Argentina in the future— than 90 days has particular significance. Under even with an IMF program—if Argentine loans the reporting requirements used by our federal had shifted to nonaccrual status. And it might bank supervisory agencies, as well as those used have made refinancings more difficult for other in certain states including New York, banks sovereign debtors as well. It was against this generally can continue to accrue interest as in- background that the Mexicans took the initiative come once it is past due and unpaid for only up to to propose a new financial package. Both the 90 days. Thus, once interest is unpaid for more Argentineans and the creditors quickly saw the than 90 days, under current practice, U.S. banks advantages of that approach. would generally have to stop reporting that inter- The Argentine package in no way represented est as income in quarterly reports filed with bank a "bank bailout" with taxpayers' money. U.S. supervisors. They would, in most cases, also government financing, through the Treasury's reverse previous accruals and take that unpaid Exchange Stabilization Fund (ESF), is to be interest out of income or reserves. Since U.S. available, on a temporary basis, for one essential banks must publish their balance sheets on a purpose—to encourage agreement between Arquarterly basis—March 31, June 30, and so on— gentina and the IMF on an adjustment program. the March 31 date was significant. Let me state This encouragement is in close conformance that this was particularly, if not uniquely, signifi- with U.S. law, which calls for the ESF to be used cant for U.S. banks, given our system of compre- to support U.S. objectives in the IMF, and with hensive public quarterly reporting, which has no past practice, since similar bridging loans have parallel in the other major industrial countries. played an essential role in the adjustment efforts, for example, of Mexico and Brazil. It is very I think that most U.S. banks had more or less likely that a new IMF-supported adjustment proassumed that Argentina's interest arrears in ex- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

422 Federal Reserve Bulletin • May 1984 gram, which this package is designed to encour- some cases the potential effect was not signifiage, will call for additional financing from the cant, particularly if arrears had continued to commercial banks. Moreover, I am certain that build up for an extended period; but in all cases within the framework of an IMF program, every the immediate impact was, in my opinion, quite effort will be made, in accordance with that same manageable. Nor do I think concern over the U.S. legislative provision, to arrange a resched- immediate impact on the stability of financial uling of debt that is "consistent with safe and markets was the most important aspect of this sound banking practices and the [borrowing] matter—there is nothing to suggest that the proscountry's ability to pay." pect of nonpayment was not largely, if not entire- Your letter asked whether current growth and ly, discounted by financial markets. Rather, I interest rate projections provide reason for opti- think the Argentine package was prompted by a mism that the debt crisis is soluble. The outlook shared objective to improve the prospects for for recovery and expansion in the industrial agreement on an IMF adjustment program, and countries is encouraging, with growth at about as a basis for a more workable and acceptable 3 ¥2 percent this year and next—which means that rescheduling of the Argentine debt. Let me cite less developed countries' exports could grow 5 some key, closely related advantages. to 7 percent and commodity prices should con- First, it demonstrated to the new Argentine tinue to move up. This growth would certainly government both that there was a willingness on help debtors, but not enough to resolve their all sides to help deal with Argentina's severe problems. debt and economic problems and that there was a Increases in interest rates are, of course, par- strong international interest—including interest ticularly burdensome to heavily indebted na- among other Latin American borrowers—in seetions—a rise of 1 percent worldwide adds $3Vi ing Argentina move promptly to formulate an billion or more to debt-servicing costs of non-oil effective economic program and to reach agreedeveloping countries after a full year. That figure ment with the IMF. lends stark emphasis to the need for urgent and Second, it brought together five key Latin decisive action on our budget deficit, certainly American governments—Argentina and the four the single most effective means of countering the lending countries—under the umbrella of a Latin problem of high interest costs. In addition, those American initiative, to cooperate in finding ways involved in debt negotiations might want to con- to meet their debt obligations. This should help sider techniques of limiting, by some kind of cap defuse some of the North-South rhetoric on a on interest rates, the potential problems for the problem that will require cooperation, not consuccessful implementation of IMF-supported ad- frontation to resolve successfully. justment programs that might result if there were Third, in my judgment, it brought Argentina further increases in interest rates. and the IMF closer toward agreement on an I do not think that failure to arrange the adjustment program and strengthened the incen- Argentine package, with resulting nonpayment tives to reach final agreement on an IMF proof interest, would, by itself, have had a signifi- gram in order that the Latin American creditor cant adverse impact on the safety and soundness governments can be repaid promptly. of the U.S. banking system. I have attached to Some say the result was only to buy time. But my statement a table that summarizes the infor- the Argentine package does more—not only is mation presented publicly by several of the larg- there now more time, but there is also an imest U.S. banks in their first-quarter financial proved environment for coming to grips with the statements regarding the effect of the package on outstanding issues between Argentina and the their quarterly earnings.2 As those data certainly IMF and between Argentina and the creditor suggest, the soundness of the banking system banks. Yet, unquestionably some formidable iswas not endangered. That is not to suggest that in sues still remain to be negotiated. Argentina is, of course, just one of a number of nations in Latin America and elsewhere that 2. The attachments to this statement are available on have encountered serious debt problems. These request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. problems have to be viewed not as a single Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 423 problem but as thirty or more individual prob- achieved in dealing with the Argentine debt lems, each with its own unique characteristics problem, that success will to some extent spill and with its own political and economic setting. over and encourage success elsewhere. Similar- Yet they do all have common features, and ly, demonstrated progress in dealing with the success—or failure—in one country, particularly debt problems of other countries will improve a large one, can breed success—or failure—in the environment for Argentina. • others. Thus, in my judgment, if success can be Statement by J. Charles Partee, Member, Board authorities and provide assistance as requested of Governors of the Federal Reserve System, by those authorities. before the Commerce, Consumer, and Monetary The Federal Reserve System has primary su- Affairs Subcommittee of the Committee on Gov- pervisory authority at the federal level for about ernment Operations, U.S. House of Representa- 1,000 state member banks and for more than tives, May 3, 1984. 5,000 bank holding companies. The System fulfills its supervisory responsibilities primarily I am glad to appear before this subcommittee to through the conduct of periodic on-site examinadiscuss the role of the banking agencies in the tions during which examiners evaluate, among identification of violations of criminal law by other things, the quality of a bank's loans and bank insiders and in the protection of commer- investments, liquidity, capital adequacy, and cial banks from the effects of illegal or improper general financial condition. Examiners also reactivities of insiders. My testimony will address view the activities of a banking organization's the general supervisory responsibilities and ac- management and directors; the adequacy of intivities of the Federal Reserve with respect to ternal systems and controls; any material transcriminal misconduct and insider abuse. Detailed actions with officers, directors, or principal answers to the specific questions raised in Chair- shareholders; and compliance with a wide variman Barnard's letter of April 5 are contained in a ety of laws and regulations affecting a bank's separate Federal Reserve staff report submitted relations with insiders, depositors, borrowers, to the subcommittee. investors, and the bank's general community. We at the Federal Reserve share the subcom- The process is designed to determine that the mittee's concern over the need to detect in a bank is being operated in a sound and prudent timely manner potentially improper insider activ- manner in compliance with banking laws and ity and to take effective action to stop the activity regulations. and to protect the banking institution. Prompt In carrying out its responsibilities for nonproband effective action is critical for two reasons. lem state member banks, the Federal Reserve First, as a matter of public policy, it is essential often relies on examinations conducted in alterin banking, as in all other endeavors, to ensure a nate years by state banking authorities. With continuing high level of compliance with laws regard to bank subsidiaries of bank holding comand regulations. Second, criminal misconduct panies, the Federal Reserve utilizes examination and other forms of questionable or unsound reports prepared by the primary supervisor of activities by bank insiders historically have been the bank subsidiary. These procedures are inmajor factors contributing to bank problems and tended to reduce the burden associated with failures. For these reasons, when violations of overlapping regulatory authority and to strengthsound banking practices or laws and regulations en the dual banking system and further cooperare discovered, it is our firm policy to take action ation between federal and state banking agento halt such activities and to protect the banking cies. institution from their effects. Although the Fed- In considering supervisory responses to bank eral Reserve has no authority for criminal prose- problems, it is important, I believe, to clarify the cutions, we do refer possible criminal violations meaning of the terms "criminal misconduct" and that are uncovered by examiners to appropriate "insider abuse." Criminal misconduct refers to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

424 Federal Reserve Bulletin • May 1984 violations or possible violations of criminal stat- ual involved. Often—though not always—such utes. The term "insider abuse" covers a wider acts are committed by less senior bank employrange of activities on the part of the bank's ees and frequently do not involve amounts that principals that can have harmful consequences have a major impact on the bank's financial for the bank, possibly at the same time benefiting condition. the insider or his or her related interests. Thus, As a practical matter, however, criminal violainsider abuse may include improper lending prac- tions that have had a materially adverse effect on tices such as the extension of unsound, exces- a bank's financial condition and that have insive, or privileged loans to insiders or their volved senior officials usually surface in the first related interests, as well as possible violations of instance in the form of inadequately documented criminal statutes such as fraud or misapplication loans, incomplete credit information concerning of bank funds. Indeed, some criminal activities, borrowers, and other forms of incomplete recsuch as theft or embezzlement, may not be the ordkeeping. Such forms of inadequate recordfault of the bank's principal insiders. While insid- keeping, while not widespread, are not uncomer abuse includes criminal misconduct, the term mon in banks, and almost always are the result of also comprises other actions or practices that lax procedures rather than criminal misconduct. may be equally or more harmful to a bank's Thus, in the vast majority of such cases, lax overall condition, such as violations of insider procedures are addressed by examiners and eflending limits or excessive loan concentrations. fectively remedied through the supervisory fol- Since all types of improper insider activities low-up process, including, when appropriate, can have an adverse effect on a bank's condition, formal civil enforcement action. In those few undermine public confidence in banking organi- cases in which further digging indicates that zations generally, and contribute to a bank's criminal activities may be involved, extensive failure, all such activities are cause for serious criminal investigations and prosecutions—lasting supervisory concern and require a prompt and in some cases for years—are often necessary to effective supervisory response. Examiners are prove the violations. instructed to identify apparent violations of It should be emphasized that it is not our banking statutes or unsound practices that are policy to wait until the criminal investigation has having an adverse impact on the bank, and run its course before taking action to protect the supervisory authorities are responsible for for- institution. In those instances when evidence mulating enforcement programs, including cease suggests that improper activities could harm the and desist action or removal proceedings, to institution or the public, the Federal Reserve enforce banking laws, protect the bank's condi- takes prompt action to stop those activities and tion, and promote the safety of depositors' to prevent their recurrence. In most situations, funds. Examiners also refer situations involving bringing the matter to the attention of the institupossible criminal violations to law enforcement tion's board of directors is sufficient; they norauthorities and cooperate in the gathering of mally are quick to correct the situation or to additional information. But it is important to replace the individuals who were responsible. In recognize that there is no foolproof way to those few cases when the directors do not act— ensure that banks will not be adversely affected often when the individual involved in misconduct by improper activities of insiders, particularly is also a control-owner—there are a number of when such transactions involve the commission enforcement mechanisms available to the regulaand concealment of criminal acts. tory agencies. These include cease and desist One obstacle that can hinder the early detec- authority, the assessment of civil money penaltion of possible criminal activity by senior bank ties, and the suspension and removal of an officer officials derives from the manner in which such or director. activity initially begins to surface. Some forms of Over the last several years, the effects of criminal activity in banks, such as embezzlement economic recession and the accompanying finanand teller theft, often come to light abruptly and cial pressures on borrowers have contributed to usually result in the immediate termination of an increase in bank failures. Severe economic employment and legal action against the individ- difficulties can undermine the financial condition Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 425 of both sound banks and those in an already do sometimes provide expert testimony in crimiweakened condition. However, banks with poor nal cases. management and imprudent lending policies, or As I have stated, the Federal Reserve takes those weakened by questionable insider activi- supervisory action against any unsound or questies, are often more vulnerable to adverse finan- tionable insider activity or bank practice, regardcial developments. In addition, deteriorating less of whether the activity or practice involves a conditions may tend to encourage the relatively possible criminal violation. The Federal Reserve small number of banks that are poorly managed completed 30 formal enforcement actions in 1982 or inclined to insider abuse, self-dealing, or ex- and 50 such actions in 1983 involving state memcessive risktaking to undertake greater risks or ber banks or bank holding companies. A summaquestionable insider activities to offset the effect ry of these actions is enclosed with the Federal of poor operating results. Reserve staff report that has been submitted to It is the policy of the Federal Reserve to the subcommittee. In the first quarter of 1984, ensure that circumstances suggesting a possible the Federal Reserve completed 22 formal enviolation of a criminal statute are referred to the forcement actions. In addition, the Board recentappropriate law enforcement authority. Our pro- ly issued a notice of removal and suspension cedures concerning criminal referrals were against an officer and director of a bank holding worked out in conjunction with the other banking company for excessive and unsound insider agencies and in consultation with federal law loans and violations of banking law. In this case, enforcement authorities. Whenever examiners the staff is presently negotiating the provisions of uncover evidence or information suggesting the a permanent prohibition agreement with the indipossible violation of a criminal law, a determina- vidual. Over time, it has been our experience tion is made as to whether or not the bank itself that the actual or planned initiation of removal has properly referred the violation. We have and suspension proceedings usually results in found that, in the vast majority of cases, the resignations of the individuals cited, thereby banks themselves do make timely referrals and obviating the need to complete the removal actake action to remedy the situation, usually by tion. terminating the employment of the individual The subcommittee's letter appears to raise the involved. However, if the bank does not report question of whether there is a need for some the violation, or if it appears advisable for any form of monitoring system to prevent "dishonother reason, examiners will refer the situation est" bank officials or individuals removed by directly to the local office of the U.S. Attorney. bank management or the banking agencies from In such situations, examiners gather as much being reemployed in the banking industry. In this information as is reasonable in light of the indi- regard, we would note that section 19 of the vidual circumstances and as is necessary to Federal Deposit Insurance Act requires the determine the effect of the incident on the bank. FDIC's approval for the employment by a bank The judicial and procedural considerations of any person previously convicted of a criminal pertaining to criminal investigations and prose- offense involving dishonesty or a breach of trust. cutions are different in many respects from Moreover, as I have indicated, the Federal Reconsiderations of safety and soundness and re- serve takes enforcement action to protect state quire specialized expertise. Nonetheless, the member banks from the improper activities of banking agencies have participated in special any individual or insider. As a matter of princiinvestigations conducted under the direction of ple, however, the primary responsibility must the law enforcement agencies and have assisted fall on the financial institution to determine the enforcement agencies in preparing cases by whether or not a prospective employee who is to providing expertise in banking matters. Deci- be given important fiduciary responsibilities has sions on whether or not to indict or seek addi- the proper qualifications for such a position. We tional information are made by the primary law believe that it would be inappropriate for the enforcement authorities. Generally, the Federal banking agencies to maintain a list of individuals Reserve is not involved in the process of indict- that had been the subject solely of civil enforcement or prosecution, although System examiners ment actions for the purpose of preventing their Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

426 Federal Reserve Bulletin • May 1984 future employment with any institution. Indeed, public annually on a bank's aggregate loans to its we believe that great care must be taken to avoid executive officers, principal shareholders, and any official action that could undermine an indi- their related interests. vidual's rights or due process under the law. The question of whether there should be rou- It should be pointed out that the banking tine disclosure by supervisory agencies of all agencies routinely exchange examination and enforcement actions against individuals or instirelated supervisory reports in accordance with tutions requires careful consideration of a numapplicable statutes. These reports contain infor- ber of important procedural, privacy, and supermation on the background and performance of visory matters. It can be argued that public bank management and directors and are used in disclosure may serve as a deterrent to those connection with our supervision of banks and insiders who might be inclined to abuse their our review of notices of changes in bank control. positions or otherwise engage in improper or This less formalized exchange of reports with our self-serving activities. However, public disclosister supervisory agencies assists us in identify- sure of supervisory actions in some instances ing potential situations in which an individual of could prove counterproductive from a supervisoquestionable background could have an adverse ry standpoint. For example, such disclosures effect on a banking organization. While not per- could have a disruptive effect on a bank's fundfect, we believe this approach is preferable to the ing or overall financial condition, thereby potenmaintenance of formal lists that may be subject tially aggravating a delicate situation that the to error, misuse, or inadvertent disclosure, and supervisory action was intended to correct. In that could in turn deny an individual due process addition, our experience suggests that if it were or unfairly damage his reputation. understood that supervisory agencies would, as a In considering the question raised by the sub- matter of routine, disclose all enforcement accommittee of the public disclosure of enforce- tions, financial institutions or individuals subject ment actions, it should be noted that a good deal to such proceedings would be more likely to of disclosure already takes place. For example, refuse to consent voluntarily to its provisions. companies that are required to file public finan- This refusal would tend to frustrate expeditious cial statements must also disclose any enforce- correction of the problems. ment actions that are deemed to be material. In The Federal Reserve, together with the other addition, the banking agencies make public on an supervisory agencies, has a vital interest in enannual basis case-by-case summaries of supervi- suring that possible criminal misconduct in the sory enforcement actions. These summaries do nation's banks be uncovered and promptly terminot identify specific companies or individuals, nated. We support vigorous and timely prosecubut they do provide detail on the enforcement tion and punishment of any bank officer, direcprovisions of individual supervisory actions and tor, or other insider found to be engaged in the specific types of problems the actions are criminal activities, and stand ready to assist in intended to correct. In certain egregious cases, this process in any manner that is consistent with the Federal Reserve has disclosed the names of our statutory authority and primary responsibilindividuals or companies subjected to civil mon- ities. In any event, we remain firmly committed ey penalties for engaging in improper conduct or to taking timely remedial action against any violations of substantive banking regulations. insider abuse, regardless of whether or not it Finally, information is made available to the constitutes a violation of criminal statutes. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

427 Announcements PUBLICATION OF BOOK the effects of switches in exchange rate regimes, ON THE MULTICOUNTRY MODEL the transmission of the effects of policy changes from one country to another, and the impact of In order to improve the analysis of the interna- changes in intervention policy and asset prefertional influences on the U.S. economy and those ences. on the world economy emanating from the Unit- The book is $14.50 a copy and may be obtained ed States, the Board of Governors, through its from Publications Services, Board of Governors Division of International Finance, developed the of the Federal Reserve System, Washington, concept of the Multicountry Model. In its pres- D.C. 20551. ent form, the Multicountry Model is a system of national macroeconomic models at the center of which is a medium-sized model of the U.S. STATEMENT ON ARGENTINE economy. Linked to the U.S. model and to each FINANCING PACKAGE other are models for Canada, West Germany, Japan, and the United Kingdom, and an abbrevi- The following statement was released on April ated model representing the rest of the world. 12, 1984, in response to inquiries about the role The Multicountry Model focuses on the impact of the Federal Reserve in the Argentine financing of the foreign sector on key domestic variables, package. allows for a regime of either flexible or fixed exchange rates, and incorporates the major real 1. No Federal Reserve money or guarantee is and financial linkages between the U.S. and involved in the $100 million Argentine loan from foreign economies. a group of commercial banks. The U.S. Economy in an Interdependent 2. Federal Reserve involvement derives en- World: A Multicountry Model by Guy V.G. tirely from the fact that the Federal Reserve Stevens, Richard B. Berner, Peter B. Clark, Bank of New York is agent for foreign central Ernesto Hernandez-Cata, Howard J. Howe, and banks and in the normal course holds their Sung Y. Kwack describes the system, its proper- deposits and makes payments from their acties, and the intellectual process underlying its counts. development. The book discusses in detail the 3. Pursuant to an agreement among Argentina theoretical structure of the system and its basic and the government lenders, Argentina agreed, empirical characteristics—the estimated parame- in the event of failure, to complete pending ters, statistics of performance, and basic multi- arrangements for lending with the entire syndipliers. Whenever possible, the theoretical and cate of banks and to pay the banks in the lending empirical characteristics are compared with group $100 million out of Argentine deposits with those for other existing theoretical and econo- the Federal Reserve Bank of New York by metric models. Also examined are the alterna- June 30. tives considered for achieving the objectives of 4. Such instructions were transmitted to the the project and the justification of the structure Federal Reserve Bank of New York by Argentiactually chosen for the system. In addition to the na, and the Bank in turn did inform the commernormal range of fiscal and monetary multipliers, cial banks that procedures reflecting Argentine the book includes the results of simulations that obligations to repay this loan had been completgive a view of the full range of the Multicountry ed. This is the full extent of the Federal Re- Model's capabilities: for example, estimates of serve's involvement with the banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

428 Federal Reserve Bulletin • May 1984 CHANGE IN BOUNDARIES Peter Hooper III has been appointed Assistant OF FEDERAL RESERVE DISTRICTS Director. David H. Howard has been appointed Assis- The Board of Governors has approved the trans- tant Director. fer of eight counties in Oklahoma from the Elev- Raymond Lubitz has been appointed Assistant enth Federal Reserve District to the Tenth Fed- Director. eral Reserve District, effective May 24, 1984. Mr. Hooper came to the Board in September These counties include Atoka, Bryan, Choctaw, 1973 and was appointed Chief of the Quantitative Coal, Johnston, McCurtain, Marshall, and Push- Studies Section in June 1981. Mr. Hooper has a mataha. This date is the beginning of a reserve Ph.D. in Economics from the University of maintenance period under the contemporaneous Michigan. reserve requirement procedures and therefore Mr. Howard has been employed at the Board should facilitate the transfer for the financial since June 1975 and has been Senior Economist, institutions in the eight counties in southeast World Payments and Economic Activities Sec- Oklahoma. tion, since February 1982. Mr. Howard holds a Beginning May 24, all operational and other Ph.D. in Economics from the University of Virmatters relating to member banks in these coun- ginia. ties will be assumed by the Federal Reserve Mr. Lubitz came to the Board in September Bank Branch in Oklahoma City, Oklahoma, or 1973 and has been Chief, World Payments and by the Federal Reserve Bank of Kansas City, Economic Activity Section, since June 1981. Mr. Missouri, with the exception of matters related Lubitz has a Ph.D. in Economics from Harvard to delivery and receipt of currency and coin. University. Currency and coin operations will continue to be the responsibility of the Federal Reserve Bank of Dallas. SYSTEM MEMBERSHIP: ADMISSION OF STATE BANKS CHANGES IN BOARD STAFF The following banks were admitted to membership in the Federal Reserve System during the The Board of Governors has announced the period April 10 through May 10, 1984: following changes in the official staff of the Division of International Finance: Florida Larry J. Promisel, Associate Director, has Kissimmee Barnett Bank of Kissimmee been promoted to Senior Associate Director. Illinois Dale W. Henderson, Deputy Associate Direc- Carbondale .... Midamerica Bank and Trust tor, has been promoted to Associate Director. Company of Carbondale Robert F. Gemmill has been designated Staff Adviser. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

429 Legal Developments AMENDMENTS TO REGULATION A Federal Rate Effective Reserve Bank The Board of Governors has amended its Regulation Boston 9 April 9, 1984 A, "Extensions of Credit by Federal Reserve Banks," New York 9 April 9, 1984 for the purpose of adjusting discount rates. The Philadelphia 9 April 9, 1984 Cleveland 9 April 10, 1984 change—the first since late 1982—was undertaken in Richmond 9 April 9, 1984 the light of the relatively wide spread that has devel- Atlanta 9 April 10, 1984 Chicago 9 April 9, 1984 oped in recent weeks between short-term market rates St. Louis 9 April 9, 1984 and the discount rate. Minneapolis 9 April 9, 1984 Kansas City 9 April 13, 1984 The changes were effective on the dates specified Dallas 9 April 9, 1984 San Francisco 9 April 13, 1984 below: (b) The rates for other extended credit provided to Part 201—Extensions of Credit by Federal depository institutions under sustained liquidity pres- Reserve Banks sures or where there are exceptional circumstances or practices involving a particular institution under 1. Section 201.51 is revised to read as follows: § 201.3(b)(2) of Regulation A are: Section 201.51—Short Term Adjustment Credit Federal Rate Effective for Depository Institutions Reserve Bank Boston April 9, 1984 The rates for short term adjustment credit provided to New York April 9, 1984 Philadelphia April 9, 1984 depository institutions under § 201.3(a) of Regulation Cleveland April 10, 1984 A are: Richmond April 9, 1984 Atlanta April 10, 1984 Chicago April 9, 1984 Federal St. Louis April 9, 1984 Reserve Bank Rate Effective Minneapolis April 9, 1984 Kansas City April 13, 1984 Dallas April 9, 1984 Boston April 9, 1984 San Francisco April 13, 1984 New York April 9, 1984 Philadelphia April 9, 1984 Cleveland April 10, 1984 NOTE: These rates apply for the first 60 days of borrowing. A 1 per Richmond April 9, 1984 cent surcharge applies for borrowing during the next 90 days, and a 2 Atlanta April 10, 1984 per cent surcharge applies for borrowing thereafter. Chicago April 9, 1984 St. Louis April 9, 1984 Minneapolis April 9, 1984 Kansas City April 13, 1984 Dallas April 9, 1984 AMENDMENT TO RULES REGARDING San Francisco April 13, 1984 DELEGATION OF A UTHORITY The Board is amending 12 CFR Part 265, Rules 2. Section 201.52 is revised to read as follows: Regarding Delegation of Authority, to revise its procedures for reviewing Reserve Bank expenses under its general oversight authority. This change is intended to Section 201.52—Extended Credit to Depository clarify that the source of a Reserve Bank's authority to Institutions take actions in certain areas is to be distinguished from actions taken on behalf of the Board pursuant to a (a) The rates for seasonal credit extended to deposi- grant of authority from the Board. tory institutions under § 201.3(b)(1) of Regulation A Effective April 11, 1984, the Board amends Rules are: Regarding Delegation of Authority by removing para- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

430 Federal Reserve Bulletin • May 1984 graph (d) and reserving it for future use; by changing markets. Bank operates in the Reno County banking the first semi-colon to a colon in the introductory market,2 wherein it controls 2.4 percent of the total paragraph 265.2(f) and removing the words "as to its deposits in commercial banks. A principal of Appliofficers under paragraph (f)(23) of this section; and as cant currently owns a bank holding company whose to its own facilities under paragraph (f)(26) of this subsidiary bank is located in Bank's market; however, section:" and by removing subparagraphs (23), (26), the principal will divest that banking organization prior and (33) through (42) and redesignating subparagraphs to consummation of this proposal. Accordingly, con- (24), (25), (27) through (32), and (43) through (58), summation of this proposal would have no significant respectively. effect on competition or the concentration of banking resources in any relevant area. The financial and managerial resources of Applicant BANK HOLDING COMPANY, BANK MERGER, AND and the banks and holding companies to be acquired BANK SERVICES CORPORATION ORDERS ISSUED are regarded as generally satisfactory and their pros- BY THE BOARD OF GOVERNORS pects are favorable, particularly in light of certain commitments by Applicant's principal. Considerations Orders Issued Under Section 3 of Bank Holding relating to the convenience and needs of the communi- Company Act ty to be served also are consistent with approval of the proposal. Ark-Valley Bancorp, Inc. On the basis of the record, the application is ap- Hutchinson, Kansas proved for the reasons summarized above. The transactions shall not be consummated before the thirtieth Order Approving Formation of a Bank Holding calendar day following the effective date of this Order, Company or later than three months after the effective date of this Order, unless such period is extended for good Ark-Valley Bancorp, Inc., Hutchinson, Kansas, has cause by the Board or by the Federal Reserve Bank of applied for the Board's approval under section 3(a)(1) Kansas City, acting pursuant to delegated authority. of the Bank Holding Company Act ("Act"), 12 U.S.C. By order of the Board of Governors, effective § 1842(a)(1), to become a bank holding company by April 16, 1984. acquiring all of the voting shares of Northgate National Bank, Hutchinson, Kansas ("Bank"), 19.9 percent Voting for this action: Chairman Volcker and Governors of the voting shares of Valley Bancorp, Inc., Hutchin- Martin, Wallich, Partee, Rice, and Gramley. Absent and not voting: Governor Teeters. son, Kansas ("Valley"), and 16.7 percent of the voting shares of Garden Banc Shares, Inc., Hutchinson, JAMES MCAFEE, Kansas ("Garden"). Both Valley and Garden are bank [SEAL] Associate Secretary of the Board holding companies within the meaning of the Act. Notice of the application, affording opportunity for Charter 95 Corporation interested persons to submit comments, has been Hudson, Wisconsin given in accordance with section 3(b) of the Act. The time for filing comments has expired, and the Board Order Approving Acquisition of a Bank has considered the application and all comments received in light of the factors set forth in section 3(c) of Charter 95 Corporation, Hudson, Wisconsin, a bank the Act. holding company within the meaning of the Bank Applicant is a nonoperating Kansas corporation Holding Company Act ("Act") (12 U.S.C. § 1841 organized for the purpose of becoming a bank holding et seq.), has applied for the Board's approval under company. Bank holds deposits of $11.3 million and is section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to one of the smaller banks in Kansas.1 Valley is a oneacquire 99.8 percent of the voting shares of Hammond bank holding company that controls Valley State State Bank, Hammond, Wisconsin ("Bank"). Bank, Syracuse, Kansas ("Valley Bank"), which Notice of the application, affording an opportunity holds deposits of $15.3 million. Garden is a one-bank for interested persons to submit comments, has been holding company that controls Fourth Bank of Garden given in accordance with section 3(b) of the Act. The City, N.A., Garden City, Kansas ("Fourth Bank"), time for filing comments has expired and the Board which holds deposits of $6.5 million. Bank, Valley has considered the application and all comments re- Bank and Fourth Bank operate in separate banking 2. The Reno County banking market consists of Reno County, 1. Banking data are as of December 31, 1983. Kansas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 431 ceived in light of the factors set forth in section 3(c) of Citicorp the Act (12 U.S.C. § 1842(c)). New York, New York Applicant, the 208th largest commercial banking organization in Wisconsin, controls one bank with Order Approving Acquisition of a Bank total deposits of approximately $29 million, representing 0.1 percent of total deposits in commercial banks in Citicorp, New York, New York, a bank holding comthe state.1 Bank is one of the smaller commercial pany within the meaning of the Bank Holding Compabanking organizations in Wisconsin, with total depos- ny Act (the "Act"), has applied for the Board's its of approximately $8.4 million, representing less approval under section 3(a)(3) of the Act (12 U.S.C. than 0.1 percent of the total deposits in commercial § 1842(a)(3)) to acquire all of the voting shares of banks in the state. Upon consummation of this propos- Citibank (Maryland), N.A., Towson, Maryland al, Applicant would control total deposits of $37.4 ("Bank"), a proposed new bank. million, representing 0.1 percent of the total deposits Notice of the application, affording opportunity for in commercial banks in the state. Applicant's acquisi- interested persons to submit comments, has been tion of Bank would have no significant effects on the given in accordance with section 3(b) of the Act. The concentration of banking resources in Wisconsin. time for filing comments has expired, and the Board Bank is the 17th largest of 19 commercial banks in has considered the application and all comments rethe St. Croix Falls banking market,2 wherein it con- ceived, including those submitted by the Coalition trols 1.6 percent of the total deposits in commercial Against Redlining, New York, New York, in light of banks.3 Applicant does not operate in the St. Croix the factors set forth in section 3(c) of the Act Falls banking market. Consummation of this proposal (12 U.S.C. § 1842(c)). would not result in any adverse effects on competition. Citicorp, with total consolidated assets of $134.6 The financial and managerial resources of Applicant billion as of December 31, 1983, is the largest banking and Bank are regarded as consistent with approval of organization in the United States. Citicorp currently the application and their prospects appear favorable. operates four subsidiary banks. Its lead bank, Citi- While Applicant has not proposed any new services to bank, N.A., New York, New York, which accounts be conducted by Bank upon consummation of this for approximately 84 percent of Citicorp's consolidatproposal, there is no evidence in the record to indicate ed assets, is the second largest commercial bank in that the banking needs of the community to be served New York State, with $25.7 billion in total domestic are not being met. deposits, representing 13.8 percent of total deposits in Based on the foregoing and other facts of record, the commercial banks in New York State.1 Citibank (New Board has determined that approval of the application York State), N.A., Buffalo, New York, is a full service would be consistent with the public interest and that commercial bank operating principally through the application should be and hereby is approved. The branches in the state north of the New York City transaction shall not be consummated before the thirti- metropolitan area. Citibank (South Dakota), N.A., eth calendar day following the effective date of this Sioux Falls, South Dakota, is principally engaged in Order, or later than three months after the effective nationwide credit card activities, and Citibank (Deladate of this Order, unless such period is extended for ware), Wilmington, Delaware, engages primarily in good cause by the Board or the Federal Reserve Bank wholesale banking on a national and international of Minneapolis, acting pursuant to delegated author- basis. Citicorp also engages, directly and through ity. subsidiaries, in a variety of nonbanking activities. By order of the Board of Governors, effective Bank is a newly chartered bank. It will offer on a April 27, 1984. nationwide basis various consumer credit products, including certain credit cards, that are currently of- Voting for this action: Chairman Volcker and Governors fered only on a regional basis by Citicorp Financial, Martin, Wallich, Partee, Rice, and Gramley. Absent and not Inc., Towson, Maryland, a nonbanking subsidiary of voting: Governor Teeters. Citicorp. In addition, Bank will accept demand deposits and make commercial loans. JAMES MCAFEE, Section 3(d) of the Act (12 U.S.C. § 1842(d)) prohib- [SEAL] Associate Secretary of the Board its the Board from approving any application by a bank holding company to acquire any bank located outside the state in which the operations of the bank holding 1. Unless otherwise indicated, banking data are as of December 31, company's banking subsidiaries are principally con- 1983. 2. The St. Croix Falls banking market is defined as all of Polk and St. Croix Counties, Burnett County except for the township of Hudson, and the northern quadrant of Pierce County, Wisconsin. 1. Unless otherwise indicated, banking and market data are as of 3. As of March 31, 1983. December 31, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

432 Federal Reserve Bulletin • May 1984 ducted unless such acquisition is "specifically autho- The financial and managerial resources and future rized by the statute laws of the state in which the bank prospects of Citicorp, its subsidiaries, and Bank are is located, by language to that effect and not merely by consistent with approval of this application. In this implication." The State of Maryland recently amend- regard, the Board has considered the capital position ed its banking laws to provide that a bank holding of Citicorp in light of the Board's capital adequacy company located outside of Maryland may acquire all guidelines. The Board has noted the improvements of the voting shares of a single newly established bank that Citicorp has made in its capital position, Citilocated in Maryland that complies with several limita- corp's compliance with the commitment made in contions, including requirements that the bank have no nection with its application to acquire New Biscayne more than one office open to the public to conduct Federal Savings and Loan Association and First Fedbanking business and be operated "in a manner and at eral Savings and Loan Association to raise sufficient a location that is not likely to attract customers from additional capital by March 31, 1984, to place Citicorp [Maryland] to the substantial detriment of existing in conformance with the Board's minimum capital state banking institutions, or national banks or federal adequacy guidelines, and Citicorp's statement that, savings banks located in [Maryland]."2 subject to reasonable economic and market condi- The proposed acquisition under Maryland law is tions, it will increase its capital ratio materially above subject to approval by the State Bank Commissioner, the Board's minimum capital adequacy guidelines by who must consider the financial and managerial re- December 31, 1984. In its consideration of the finansources of the out-of-state bank holding company, the cial aspects of this application, the Board has relied on future prospects of the bank to be acquired, the Citicorp's continuing efforts to improve its capital financial history and future prospects of the out- position. Accordingly, the Board has determined that of-state bank holding company, and whether the banking factors are consistent with approval of this proposed acquisition may result in an undue con- proposal. centration of resources or substantial reduction of In considering the effects of the proposed acquisicompetition in Maryland.3 The Maryland Bank Com- tion on the convenience and needs of the communities missioner has reviewed the proposal by Citicorp to to be served, the Board has considered the record of acquire Bank and, on January 6, 1984, approved the Citicorp's subsidiaries in meeting the credit needs of proposal under Maryland law. Based on the foregoing their communities as provided in the Community and all the facts of record, the Board has determined Reinvestment Act of 1977 ("CRA") (12 U.S.C. that the proposed acquisition conforms with Maryland §§ 2901-05) and the Board's Regulation BB (12 CFR law and is specifically authorized by the statute laws of § 228). In this regard, the Board has reviewed the Maryland for purposes of section 3(d) of the Act. objections raised by the Coalition Against Redlining In view of the limitations imposed by Maryland law ("Protestant") concerning the performance of Cition the operations of Bank, it is not likely that Bank corp's lead bank, Citibank, N.A., under the CRA. will be a significant competitor in the Baltimore bank- Protestant argues that, since 1979, Citibank has ing market.4 The Board notes that the primary focus of engaged in a pattern of branch closings, particularly in Bank will be the offering of various consumer credit the Bronx and Brooklyn, that discriminates against products, including certain credit cards, on a nation- minority and low-to-moderate income residents, parwide basis. Bank will also hold demand and other ticularly with regard to the availability of residential types of deposits, and make commercial loans. Inas- mortgages.5 As the Board has previously stated, while much as Bank will provide these services de novo, the the Board may not prescribe the manner in which an Board concludes that the proposal will not have ad- applicant conducts its operations provided they converse effects on competition in any relevant area, and form with applicable law and banking practice, the that the overall competitive effects of the proposal are Board does expect an applicant to conduct its operaconsistent with approval. tions with due regard to serving the needs of its community.6 In this regard, the Board notes that the opening and closing of branches is a factor that is considered by the Federal bank regulatory agencies in 2. Maryland Financial Institutions Code Annotated § 5-903(b) (Supp. 1983). Maryland law also provides that a bank acquired by an out-of-state bank holding company may be operated in a manner likely to attract and retain customers with whom the bank, the out-of-state bank holding company, or the banking or nonbanking subsidiaries of 5. The Board has previously considered whether the closing of four the bank holding company have or have had business relations. of these branches in the Bronx illustrated a policy by Citibank of 3. Maryland Financial Institutions Code Annotated § 5-904(b) "disengagement" in the Bronx, and determined that the facts at that (Supp. 1983). time did not support a finding that Citibank was pursuing such a 4. The Baltimore banking market is approximated by the Baltimore policy. Citicorp, 68 FEDERAL RESERVE BULLETIN 499, 500 (August RMA, and includes all of Baltimore and Harford Counties, northern 1982). Anne Arundel County, northern Howard County, and the eastern 6. Id. at 500. Accord, First National Boston Corporation, 66 portion of Carroll County, all in Maryland. FEDERAL RESERVE BULLETIN 162 (February 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 433 assessing the record of performance of a bank in branch closings by banks should be accomplished in meeting the credit needs of its community.7 accordance with an overall objective that is consistent After reviewing all of the facts of record in this case, with the bank's continuing and affirmative obligation the Board does not find that the record supports a to help meet the banking needs of its entire communidetermination that Citibank is pursuing a discrimina- ty, including low- and moderate-income neighbortory policy of branch closings. The Board notes that hoods, and will continue to review Citibank's branch the number of branches closed by Citibank in predomi- closings, in the context of applications under the Act, nantly minority and low-income areas is proportion- to assure that these obligations are met. ately higher than the number closed in predominantly The Board has also considered the effect of this non-minority and higher-income areas, and the num- proposal on the convenience and needs of the commuber of branches opened by Citibank in predominantly nities to be served by Bank and notes that, upon minority and low-income areas is proportionately low- consummation of this proposal, a variety of financial er than the number opened in predominantly non- services will become available to customers in the area minority and higher-income areas. In this regard, served by Bank, including various deposit alterna- Protestant has submitted information alleging that in tives, a new source of consumer and commercial the areas of Bronx County where Citibank has closed credit, and proposed ATM facilities. These additional branches, the number of mortgage loans made by the services lend weight to approval of the proposed bank decreased proportionately more than in areas acquisition. Accordingly, the Board has determined where Citibank did not close branches. The Reserve that considerations relating to the convenience and Bank has conducted an independent analysis which needs of the communities to be served are consistent indicates, however, that, while mortgage lending has with approval, and approval of this application would decreased in some areas where Citibank has closed be consistent with the public interest. branches, Citibank's overall mortgage lending activity Based on all the facts of record, the Board has is not limited to areas where Citibank maintains a determined that the application should be, and hereby branch.8 The Board also notes that Citibank has is, approved. The transaction shall not be consummatinitiated many special programs to help meet the credit ed before the thirtieth calendar day following the needs of the communities it serves. Citibank's per- effective date of this Order, or later than three months formance under the CRA has been deemed satisfac- after the effective date of this Order, unless such tory by the OCC as a result of an examination in April period is extended for good cause by the Board or the 1983. Federal Reserve Bank of New York, acting pursuant In view of these and all of the other facts of record, to delegated authority. the Board has determined that the issues raised by By order of the Board of Governors, effective Protestant do not outweigh the positive aspects of April 30, 1984. Citibank's record under CRA and that Citicorp's overall record is consistent with the purposes of the CRA.9 Voting for this action: Chairman Volcker and Governors The Board would be seriously concerned about a Martin, Wallich, Partee, Rice, and Gramley. Absent and not voting: Governor Teeters. pattern of branch closings in minority and low-tomoderate income neighborhoods that impaired a JAMES MCAFEE, bank's ability to provide banking services to all seg- [SEAL] Associate Secretary of the Board ments of its community.10 The Board believes that Duke Financial Group, Inc. 7. See, e.g., section 228.7(g) of the Board's Regulation BB, 12 CFR New Prague, Minnesota § 228.7(g). 8. For example, in Brooklyn, Queens, and the Bronx, approximate- Order Approving Acquisition of a Bank Holding ly 68, 72, and 60 percent, respectively, of the residential mortgages originated by Citibank were made in neighborhoods in which Citibank Company and Bank did not maintain a branch. 9. The Board has also considered Protestant's request for a public meeting regarding this matter and has determined that, in light of all of Duke Financial Group, Inc., New Prague, Minnesota, the information presented by Protestant and Citicorp and the private a bank holding company within the meaning of the meetings between Protestant, representatives of Citicorp, and mem- Bank Holding Company Act of 1956, as amended bers of the staff of the Federal Reserve Bank of New York, a public meeting is not warranted or necessary. Accordingly, the Board denies (12 U.S.C. § 1841 et seq.) ("Act"), has applied under Protestant's request for a public meeting. section 3(a)(3) of the. Act (12 U.S.C. § 1842(a)(3)) to 10. Applicant has informed the Board that Citibank has established acquire Flag, Inc., Cambridge, Minnesota ("Flag"), internal standards and procedures which it uses to make determinations for closing branches. In addition, Citibank is considering seeking and thereby indirectly acquire Peoples State Bank of the views of community representatives before making a firm determi- Cambridge, Cambridge, Minnesota ("Cambridge nation whether a branch should be closed, an action that the Board Bank"). encourages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

434 Federal Reserve Bulletin • May 1984 Notice of the application, affording an opportunity The financial and managerial resources and future for interested persons to submit comments, has been prospects of Applicant are satisfactory. The financial given in accordance with section 3(b) of the Act. The and managerial resources of Flag and Cambridge Bank time for filing comments has expired, and the Board would be improved as a result of their acquisition by has considered the application and all comments re- Applicant, and upon consummation of this acquisition, ceived in light of the factors set forth in section 3(c) of their future prospects would appear favorable. Althe Act. though the services offered by Cambridge Bank would Applicant is the 152nd largest commercial banking not change as a result of this proposal, there is no organization in Minnesota, controlling one bank with evidence that Cambridge Bank is not meeting the total deposits of $24.2 million, which represents 0.09 needs of its community. Accordingly, considerations percent of the total deposits in commercial banks in relating to the convenience and needs of the communithe state.1 Flag, the 50th largest banking organization ties to be served are consistent with approval of this in Minnesota, controls one bank, Cambridge Bank, proposal. with total deposits of $45.5 million, representing 0.16 Based on the foregoing, and other facts of record, it percent of deposits in commercial banks in the state. is the Board's judgment that the proposed transactions Upon consummation, Applicant would become the would be in the public interest and that the applica- 19th largest banking organization in the state, control- tions should be and hereby are approved. The proling 0.25 percent of total deposits in commercial banks posed transactions shall not be consummated before in the stater The Board concludes consummation the thirtieth calendar day following the effective date would have no significant effect on the concentration of this Order, or later than three months after the of banking resources in Minnesota. effective date of this Order, unless such period is Cambridge Bank is the largest of 12 commercial extended for good cause by the Board or the Federal banking organizations in the Cambridge banking mar- Reserve Bank of Minneapolis, acting pursuant to ket,2 controlling 18.5 percent of total deposits in delegated authority. commercial banks in the market. Applicant does not By order of the Board of Governors, effective compete in the Cambridge banking market. Accord- April 12, 1984. ingly, the proposed acquisition would not result in the elimination of any existing competition in this market. Voting for this action: Vice Chairman Martin and Gover- The Board also has considered the effects of Appli- nors Wallich, Partee, Rice, and Gramley. Absent and not cant's proposal on probable future competition in the voting: Chairman Volcker and Governor Teeters. Cambridge market in light of the Board's proposed guidelines for determining whether an intensive exami- JAMES MCAFEE, [SEAL] Associate Secretary of the Board nation of a proposed market extension merger or acquisition is warranted.3 The proposal does not warrant an intensive analysis under the guidelines because Applicant is not a probable future entrant under the guidelines since it is not one of the four largest banking First Kentucky National Corporation organizations statewide and controls less than $500 Louisville, Kentucky million in assets. On the basis of the facts of record, the Board concludes that consummation of this pro- Order Approving Acquisition of Bank posal would have no significant effect on probable future competition in the Cambridge banking market. First Kentucky National Corporation, Louisville, Kentucky, a bank holding company within the meaning of the Bank Holding Company Act, 12 U.S.C. § 1841 et seq. ("BHC Act"), has applied for the Board's approval pursuant to section 3(a)(3) of the BHC Act to acquire First National Bank, Louisville, Richmond, Virginia ("Bank"), a proposed de novo bank. Notice of the application, affording interested per- 1. Banking data are as of March 31, 1983. sons an opportunity to submit comments, has been 2. The Cambridge banking market is approximated by Isanti Coungiven in accordance with section 3(b) of the BHC Act. ty, the southern one-quarter of Mille Lacs County, and the northern three-fifths of Chisago County. The time for filing comments has expired, and the 3. "Proposed Policy Statement of the Board of Governors of the Board has considered the application and all com- Federal Reserve System for Assessing Competitive Factors Under the ments received in light of the factors set forth in Bank Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (March 3, 1982). section 3(c) of the BHC Act, 12 U.S.C. § 1842(c). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 435 Applicant, the largest banking organization in Ken- Bank is consistent with the interstate banking prohibitucky, with consolidated assets of $2.7 billion, con- tions of section 3(d) and relevant state laws. trols two banks in that state, First National Bank of Section 2(c) of the BHC Act defines "bank" to Louisville, Louisville, Kentucky ("Louisville Bank"), mean any institution that (1) accepts deposits that the and First Kentucky Trust Company, Louisville, Ken- depositor has a legal right to withdraw on demand, and tucky.1 (2) engages in the business of making commercial Applicant proposes to acquire Bank to engage pri- loans. Although Bank will be engaged primarily in marily in credit card operations. Applicant will trans- credit card operations, Applicant has stated that Bank fer the credit card operations of Louisville Bank to will engage in limited deposit-taking and commercial Bank, in light of Virginia's more liberal revolving loan operations. In view of the purposes of the BHC credit interest rate and credit card fee laws.2 In Act, the Board believes that the inclusion of Bank as a addition, Bank will engage in limited deposit-taking "bank" within the meaning of section 2(c) is appropriand commercial loan activities. ate. Section 3(d) of the BHC Act, 12 U.S.C. § 1842(d), The proposal represents a transfer of the credit card prohibits the Board from approving any application by operations of Louisville Bank to Bank and, thus, is a bank holding company to acquire any bank located essentially an internal reorganization that will not alter outside of the state in which the operations of the bank the number of firms or the structure of the national holding company's banking subsidiaries are principal- market for bank credit card services. Because of the ly conducted unless such acquisition "is specifically limitations imposed on Bank's operations by Virginia authorized by the statute laws of the State in which law, Bank will not generally be in direct competition such bank is located, by language to that effect and not with local commercial banks in the state. However, to merely by implication." Virginia has recently passed the extent that Bank will offer limited banking services legislation authorizing an out-of-state bank holding as a new competitor in the market, the effect of the company to acquire a newly established bank in Vir- proposal will be procompetitive. Accordingly, the ginia3 provided the acquiree bank has only a single overall competitive effects of the proposal are consisoffice open to the public for the conduct of its banking tent with approval. business, the bank is created primarily to engage in a The financial and managerial resources and future significant multi-state credit card operation, the bank prospects of Applicant, its subsidiaries and Bank are will have at least $5 million or an amount equal to eight regarded as satisfactory. Transfer of Louisville Bank's percent of its assets in paid-in capital, whichever is credit card operations will allow Applicant to continue greater, on the date it commences business, the bank to service its customers who desire such services and employs 40 persons in Virginia within one year from will result in greater efficiency. Based upon the foregothe date it commences business, the bank is operated ing and all the facts of record, the Board concludes in a location not likely to attract customers from the that convenience and needs factors are favorable and general public and the acquisition has the prior ap- lend weight toward approval of the proposal. proval of the State Corporation Commission.4 Appli- On the basis of all the facts of record in this matter, cant has stated that Bank has complied or will comply it is the Board's judgment that approval of the applicawith each of these conditions. Based on the foregoing, tion would be in the public interest and that the the Board concludes that the proposed acquisition of application should be approved. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made before the thirtieth calendar day following the effective date of this Order or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of St. Louis pursuant to dele- 1. All banking data are as of September 30, 1983. 2. The Supreme Court has upheld the right of a national bank to gated authority. charge interest rates to out-of-state credit card customers at the rate By order of the Board of Governors, effective permitted by the law of its home state. Marquette National Bank v. First of Omaha Serv. Corp. 439 U.S. 249 (1978). April 6, 1984. 3. VA. Code § 61-393 (1983). The Virginia statute is similar to other state laws that the Board has found to be a valid exercise of a state's Voting for this action: Governors Wallich, Partee, Rice, authority under section 3(d) of the BHC Act. Citicorp (Citibank and Gramley. Absent and not voting: Chairman Volcker and (South Dakota)), 67 FEDERAL RESERVE BULLETIN 181 (1981). See Bank of New England Corp., 70 FEDERAL RESERVE BULLETIN 374 Governors Martin and Teeters. (1984) (Press Release of March 26). 4. The Virginia Commissioner of Financial Institutions has approved the application. In addition, the Comptroller of the Currency WILLIAM W. WILES, has approved Applicant's charter application for Bank. [SEAL] Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

436 Federal Reserve Bulletin • May 1984 First Railroad & Banking Company of Georgia market extension Guidelines.2 Based on its review of Augusta, Georgia the record, the Board concludes that consummation of the proposal would not have a significant adverse Order Approving the Acquisition of a Bank Holding effect upon potential competition in any relevant Company market. SBT operates in six markets in which Applicant First Railroad & Banking Company of Georgia, Au- does not operate.3 Four of these markets have deposgusta, Georgia, a bank holding company within the its of less than $250 million, and thus are not considmeaning of the Bank Holding Company Act ("Act"), ered attractive for entry and are not subject to intenhas applied for the Board's approval under section 3 of sive analysis under the Guidelines. In the Macon the Act (12 U.S.C. § 1842) to acquire SBT Corpora- banking market, SBT is not considered a market tion, Savannah, Georgia ("SBT"), and thereby indi- leader because it is the fourth largest of the nine rectly acquire Savannah Bank & Trust Company, commercial banking organizations that operate in the Savannah, Georgia; Bank of Screven County, Syl- market and controls only 5 percent of the deposits in vania, Georgia; Commercial Bank, Waycross, Geor- commercial banks in the market. gia; First National Bank & Trust Company, Vidalia, In the Savannah market, SBT is the second largest Georgia; The First National Bank of Valdosta, Valdos- of the 10 commercial banking organizations that operta, Georgia; and Central Bank of Georgia, Macon, ate in the market and controls 33 percent of the Georgia. deposits of commercial banks in the market. The Notice of the application, affording opportunity for market is highly concentrated, with the three largest interested persons to submit comments, has been commercial banking organizations controlling 81 pergiven in accordance with section 3 of the Act (49 cent of the total deposits of commercial banks in the Federal Register 3528 (January 27, 1984)). The time market. In addition, there are only two other Georgia for filing comments has expired, and the Board has banking organizations with assets over $1 billion that considered the application and all comments received do not operate in the market, and the average growth in light of the factors set forth in section 3(c) of the Act rate of deposits in the market for the past two years is (12 U.S.C. § 1842(c)). equal to the national average of 14 percent. In light of Applicant is the fourth largest commercial banking these factors, the Board has carefully examined the organization in Georgia with eight subsidiary banks proposed acquisition to determine its effects on probathat control aggregate deposits of $1.3 billion,1 repre- ble future competition in the Savannah market. senting 5.5 percent of total deposits in commercial In its analysis of this proposal, the Board has banks in the state. SBT is the seventh largest commer- examined the effect of thrift institutions in the market. cial banking organization in the state, with six banking The Board has previously indicated that, as a result of subsidiaries that control aggregate deposits of $543.5 the Garn-St Germain Depository Institutions Act of million, representing 2.4 percent of total deposits in 1982,4 which expanded the commercial lending powers commercial banks in the state. Upon consummation of of federal thrift institutions, and various state statutes, the proposed acquisition. Applicant's share of total thrift institutions have become, or at least have the deposits in commercial banks in the state would in- potential to become, major competitors of banks.5 crease to 7.9 percent, and Applicant would remain the There are five thrift institutions that operate in the fourth largest commercial banking organization in the Savannah market, controlling $450 million of the destate. In the Board's view, consummation of this posits in the market, representing almost one-third of acquisition would not have any significant adverse the market's total deposits. In addition, the market's effects on the concentration of commercial banking largest depository institution is a thrift institution; two resources in Georgia. Because Applicant and SBT do not operate in any of the same markets, consummation of this proposal would not have a significant adverse effect upon 2. "Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Bank existing competition in any relevant market. The Merger Act and the Bank Holding Company Act," 47 Federal Board has examined the effect of the proposed acquisi- Register 9017 (March 3, 1982). While the proposed policy statement tion upon probable future competition in the relevant has not been adopted by the Board, the Board is using the policy Guidelines as part of its analysis of the effect of a proposal on probable geographic markets in light of the Board's proposed future competition. 3. These banking markets are as follows: Lowndes County, Screven County, Toombs County, Ware County, Macon, and Savannah, all in Georgia. 4. Title III, 96 Stat. 1469, 1499-500. 5. General Bancshares Corporation, 69 FEDERAL RESERVE BULLE- TIN 802 (1983); First Tennessee National Corporation, 69 FEDERAL 1. Unless otherwise indicated, deposit data are as of June 30, 1982. RESERVE BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 437 of the thrift institutions represented in the market are intensive analysis under the Guidelines. The Atlanta among the largest thrift institutions in the state; and market is not concentrated, with the three largest one of the thrift institutions represented in the market commercial banking organizations controlling 46 peris a branch of the third largest thrift institution in the cent of the total deposits in commercial banks in the country. All of these institutions offer NOW accounts market. and are active in the consumer lending area. More- While the Dalton market is considered concentrated over, the record indicates that the larger thrift institu- under the Guidelines, the Board does not regard it as tions in the market actively seek commercial loans. attractive for entry because of its size and structure. While the commercial loan portfolios of these institu- The Columbus market is highly concentrated, with the tions are not substantial at the present time, this three largest commercial banking organizations conappears due to the fact that they have only recently trolling 82 percent of the total deposits of commercial obtained commercial lending powers. In this connec- banks in the market. However, there are a number of tion, some of these institutions, including the market's other potential entrants into the market. After considlargest depository institution, have converted to feder- ering these facts, as well as the actual and potential al savings banks and hold themselves out as full competition afforded by the thrift institutions in these service banks. markets, the Board concludes that consummation of Based upon this and other evidence of record, the this proposal would not result in a significant adverse Board believes that substantial weight should be given effect on probable future competition in the Dalton or to these institutions as competitors or potential com- Columbus markets. petitors in the market.6 Accordingly, in view of the The financial and managerial resources of Applilarge share of the market's deposits held by thrift cant, SBT, and their subsidiary banks are generally institutions, their absolute size, and the actual and satisfactory and their future prospects appear favorpotential competition provided by thrift institutions, able. Accordingly, considerations relating to banking the Board concludes that consummation of the pro- factors are consistent with approval. There is no posed acquisition would not have such adverse effects evidence in the record indicating that the banking on probable future competition in the Savannah mar- needs of the communities to be served are not being ket so as to warrant denial of the application. met. Applicant will expand its automatic teller ma- Applicant operates in nine markets in which SBT is chine network to Macon, an area where SBT does not not represented.7 While SBT would not be considered provide these services. In addition, Applicant will a probable future entrant into these markets under the soon become a member of Nationnet, a nationwide Guidelines because of its size relative to that of other system of automatic teller machines, and SBT's sublarge banking organizations in the state, in view of its sidiaries will also become members of this system. managerial and financial resources and past history of Accordingly, considerations relating to the conveexpansion, the Board has examined the markets in nience and needs of the community to be served also which Applicant operates to determine if the elimina- are consistent with approval. Based on the foregoing tion of SBT as an entrant would result in an adverse and other facts of record, the Board has determined effect on probable future competition. A review of the that consummation of the proposed transaction would nine markets in which Applicant, but not SBT, oper- be consistent with the public interest and that the ates indicates that six of these markets are unattractive application should be approved. for entry because of size and/or because the average On the basis of the record, the application is apgrowth rate of deposits for the last two years in the proved for the reasons summarized above. The acquimarket is below the state or national average. sition of shares shall not be made before the thirtieth With regard to the remaining three markets in which calendar day following the effective date of this Order Applicant operates, the Board finds that these markets or later than three months after the effective date of do not meet all of the criteria that would trigger this Order, unless such period is extended by the Board or by the Federal Reserve Bank of Atlanta, acting pursuant to delegated authority. By order of the Board of Governors, effective 6. If 50 percent of the deposits held by thrift institutions in this April 6, 1984. market were included for determining the level of concentration in the market, the market shares of the three largest depository institutions in the market would be 69 percent. Moreover, if thrift institutions Voting for this action: Governors Wallich, Partee, Rice, were considered as potential competitors, there would be numerous and Gramley. Chairman Volcker and Governors Martin and potential entrants into the Savannah market under the Board's Guide- Teeters did not participate in the consideration of this applilines. 7. These banking markets are as follows: Coweta County, Harris cation. County, Spalding County, Pike County, Fayette County, Richmond County, Atlanta, and Dalton, all in Georgia, and the Columbus JAMES MCAFEE, market, which is defined as Chattahoochee and Muscogee Counties, Georgia, Russell County, Alabama, and the city of Smiths, Alabama. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

438 Federal Reserve Bulletin • May 1984 First York Ban Corp. attempt to monopolize the business of banking in any York, Nebraska part of the United States; or (2) may substantially lessen competition or tend to create a monopoly or be Order Approving Acquisition of Banks in restraint of trade in any banking market, unless the Board finds that such anticompetitive effects are clear- First York Ban Corp., York, Nebraska, a bank holding ly outweighed by the convenience and needs of the company within the meaning of the Bank Holding community to be served. In applying these standards Company Act (12 U.S.C. § 1841 et seq.), has applied to a proposal such as this one, involving banking under section 3(a)(3) of the Act (12 U.S.C. organizations located in the same market, the Board § 1842(a)(3)) to acquire all of the voting shares of The considers the competitive effects of the transaction First National Bank of Bradshaw, Bradshaw, Nebras- whereby common control of the institutions was estabka ("Bradshaw Bank"); The Blue River Bank, lished.3 McCool Junction, Nebraska ("McCool Bank"); and In this instance, the four banks have been under Farmers and Traders Bank, Waco, Nebraska ("Waco common control continuously since 1905. The then- Bank"). principals of Bank acquired Waco Bank (then in Notice of the applications, affording opportunity for operation for one year) in 1885, McCool Bank (then in interested persons to submit comments, has been operation for two years) in 1889, and organized Bradgiven in accordance with section 3(b) of the Act. The shaw Bank de novo in approximately 1905. The four time for filing comments has expired, and the Board banks were sold as a unit in 1912, and again in 1957. has considered the applications and all comments The four banks have historically been operated as a received in light of the factors set forth in section 3(c) unit. In 1973, Bank was sold to Applicant, which was of the Act (12 U.S.C. § 1842(c)). formed by two individuals who had been officers and Applicant, with only one banking subsidiary, The directors and had directed the operations of the four First National Bank of York, York, Nebraska banks since the 1960's. Following the sale, the individ- ("Bank"), is the 22nd largest banking organization in uals continued as officers and directors of each of the Nebraska, controlling less than 1 percent of total four banks and, according to the facts of record, deposits in commercial banks in the state.1 Upon continued to control the management and policies of consummation of the proposal, Applicant would be- the banks and, in effect, operated the four banks as a come the 9th largest banking organization in the state unit. and its share of deposits in commercial banks in the The Board previously has approved bank holding state would remain less than 1 percent. Accordingly, company applications involving affiliated banks in the consummation of this proposal will have no significant same market, relying on the small absolute size of the effect upon the concentration of banking resources in banks at the time of affiliation, the substantial number Nebraska. of years that the institutions had been affiliated, and Applicant's subsidiary, Bank (deposits of $80 mil- the existence of the affiliation before the application of lion), is the largest of seven banks located in the York certain of the antitrust laws to bank mergers.4 County banking market, holding approximately 49.4 These factors are present in this case. Common percent of the market's total deposits in commercial control of these four institutions was established in the banks.2 McCool Bank (deposits of $5.1 million), Brad- early 1900's, well before the enactment of the Bank shaw Bank (deposits of $5.5 million), and Waco Bank Merger Act of 1960 or the Celler-Kefauver Antimerger (deposits of $7.2 million) are the fourth, fifth, and sixth Act of 1950. The record establishes that the affiliation largest banks in the market and hold 4.4, 3.4, and 3.1 of these four banks has continued throughout the 79 percent of the market's deposits in commercial banks, year-period from 1905 to date. After considering the respectively. Upon acquisition of these three banks, facts of record, particularly the continuous and long- Applicant would control 60.4 percent of the market's standing affiliation of the four institutions, the Board deposits. concludes that consummation of the proposal will not Section 3(c) of the Act precludes the Board from substantially lessen competition in the relevant approving any proposed acquisition of a bank that (1) market. would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or 3. See Mid Nebraska Bancshares, Inc., v. Board of Governors of the Federal Reserve System, 627 F.2d 26 (D.C. Cir. 1980). 1. Deposit data are as of June 30, 1983. 4. First Monco Bancshares, Inc., 69 FEDERAL RESERVE BULLETIN 2. The York County banking market consists of York County, 293 (1983); Texas East Bancorp, 69 FEDERAL RESERVE BULLETIN 363 Nebraska. (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 439 The financial and managerial resources and future total deposits in commercial banks in the state.1 Bank prospects of Applicant, Bank, Bradshaw Bank, is the 56th largest banking organization in Indiana, McCool Bank and Waco Bank appear to be generally with total deposits of $116.7 million, representing 0.37 satisfactory. It appears that Applicant will be able to percent of total deposits in commercial banks in the service the debt incurred in this proposal in accord- state. Upon consummation, Applicant would remain ance with the Board's standards applicable to small the fourth largest commercial banking organization in bank holding companies. Therefore, considerations Indiana and would control 2.1 percent of total deposits relating to banking factors are consistent with approv- in commercial banks in the state. Thus, the Board al of the applications. Considerations relating to con- concludes that acquisition of Bank would have no venience and needs of the community to be served significant effect on the concentration of banking realso are consistent with approval of the applications. sources in Indiana. Accordingly, it is the Board's judgment that the pro- Applicant and Bank compete in the Gary-Hammond posed acquisitions are in the public interest and that banking market.2 Applicant is the largest banking the applications should be approved. organization in the market, controlling 21.4 percent of On the basis of the record, the applications are total deposits in commercial banks in the market. approved for the reasons summarized above. The Bank, the ninth largest banking organization in the transactions shall not be consummated before the market, holds 4.6 percent of total deposits held by thirtieth calendar day following the effective date of commercial banks in the market. Upon consummathis Order or later than three months after the effective tion, Applicant's market share of deposits would indate of this Order, unless such period is extended for crease to 26 percent. The Gary-Hammond banking good cause by the Board or the Federal Reserve Bank market is considered moderately concentrated, with of Kansas City acting pursuant to delegated authority. the four largest banking organizations controlling 51.2 By order of the Board of Governors, effective percent of market deposits in commercial banks and a April 3, 1984. Herfindahl-Hirschman Index ("HHI") of 1024. Upon consummation of this proposal, the four-firm concen- Voting for this action: Vice Chairman Martin and Gover- tration ratio would increase to 55.8 percent and the nors Wallich, Partee, Rice, and Gramley. Absent and not HHI to 1221.3 voting: Chairman Volcker and Governor Teeters. Although the proposed acquisition would eliminate some existing competition, the Board has concluded JAMES MCAFEE, that any adverse competitive consequences resulting [SEAL] Associate Secretary of the Board from this acquisition are mitigated by several factors. In evaluating the competitive effects of a proposal in previous cases, the Board has accorded considerable Gainer Corporation weight to the influence of thrift institutions in circum- Merrillville, Indiana stances in which these institutions provide an alternative for banking services.4 Savings and loan associa- Order Approving Acquisition of Bank tions have a significant presence in the Gary- Hammond market, representing four of the 10 largest Gainer Corporation, Merrillville, Indiana, a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841 et seq.) (the "Act"), has applied for the Board's approval under section 3(a)(3) of the Act (12 U.S.C. 1. All banking data are as of June 30, 1983, unless otherwise indicated. § 1842(a)(3)) to acquire Hoosier State Bank of Indiana, 2. The Gary-Hammond banking market is approximated by Lake Hammond, Indiana ("Bank"). and Porter Counties, Indiana, which comprise the Gary-Hammond Primary Metropolitan Statistical Area. Notice of this application, affording opportunity for 3. Under the Department of Justice Merger Guidelines (June 14, interested persons to submit comments, has been 1982), a market with an HHI between 1000 and 1800 is considered given in accordance with section 3(b) of the Act. The moderately concentrated. The Justice Department has stated that where a post-merger market HHI is between 1000 and 1800 and the time for filing comments has expired and the Board merger produces an increase in the HHI of 100 points or more, the has considered the application and all comments re- Justice Department is more likely than not to challenge such a merger. ceived in light of the factors set forth in section 3(c) of 4. First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298; Fidelcor, Inc. (Southeast National Bancshares of the Act. Pennsylvania, Inc.), 69 FEDERAL RESERVE BULLETIN 445; NBD Applicant, with one subsidiary bank, is the fourth Bancorp, Inc., (Pontiac State Bank), 69 FEDERAL RESERVE BOARD 917; Comerica (Bank of the Commonwealth), 69 FEDERAL RESERVE largest banking organization in Indiana, with total BULLETIN 797; General Bancshares Corporation, 69 FEDERAL REdeposits of $540 million, representing 1.7 percent of SERVE BULLETIN 802 (1983). 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440 Federal Reserve Bulletin • May 1984 depository organizations in the market. The 17 savings of Bank by Applicant.12 Based on information in the and loan offices in the market hold 38.4 percent of total record, it appears that DFI complied with the requiredeposits among commercial banks and savings and ments of the statute. The record shows that DFI found loan associations in the market.5 Based on the deposit- Bank to be "in imminent danger of becoming a troutaking and lending activities of thrift institutions in the bled financial institution as defined in I.C. 28-1-7-2, Gary-Hammond market, the Board has concluded that with no reasonable prospect of recovery." Further, these institutions exert a mitigating influence on the the record shows DFI reached this conclusion after competitive effects of this proposal.6 finding Bank was in imminent danger of having its The Board also has considered the fact that the capital impaired. Accordingly, the Board concludes Indiana Department of Financial Institutions ("DFI") that DFI conformed with the requirements of Indiana has declared Bank to be in imminent danger of becom- law and that the proposed transaction would not ing a "troubled financial institution," as defined by violate state law. Indiana law.7 DFI has arranged the proposed acquisi- Further, although the Board is required by section tion under the section of the Indiana code governing 3(c) of the Act to evaluate bank holding company acquisition of troubled financial institutions in order to applications in light of the factors listed in section 3(c), ensure Bank's continued existence. Accordingly, the including concentration of resources, competitive ef- Board concludes that this acquisition, which will en- fects, financial and managerial resources and future able Bank to remain a viable competitor in the market, prospects of the parties, the Board is not required to further mitigates any adverse competitive effects of review DFI's selection of an appropriate bidder for the the proposal. failing Bank.13 The application has been protested by a commenter The financial and managerial resources of Applicant who asserts that the proposed acquisition would create and its subsidiary are considered satisfactory and their a multibank holding company in contravention of future prospects appear favorable. Although Bank is Indiana law. In addition, the protestant has requested currently in less than satisfactory condition, with the the Board to consider other alternatives for the Bank. acquisition by Applicant, the prospects of Bank also Although Indiana law prohibits the formation of appear favorable. Thus, banking factors are consistent multibank holding companies generally,8 the statutes with approval. provide an exception for acquisition of a "troubled Upon acquisition, Applicant's trust department exfinancial institution" by a bank holding company.9 pertise, as well as its data processing system and This statute permits DFI to authorize a merger or check clearing capabilities, will be available to Bank acquisition of a bank if DFI makes certain findings and should result in decreased costs and increased demonstrating that the institution has, or is in immi- efficiency to Bank. Further, as noted above, the nent danger of having, a capital ratio of less than 3 proposed acquisition by Applicant will enable Bank to percent, impairment of its capital stock, or suspended remain a viable source of banking services in the payments of its obligations.10 Further, in selecting a market. Thus, considerations relating to the convemerger or acquisition partner, DFI must follow bid- nience and needs of the community to be served are ding procedures set forth in the statute.11 consistent with approval. The protestant claims that DFI failed to make the Accordingly, based on the foregoing and other facts required findings and that this transaction, thus, is not of record, the Board has determined that consummaauthorized under state law. The Board has carefully tion of the proposed transaction would be consistent considered the issues raised by the protestant concern- with the public interest and that the application should ing the permissibility under state law of the acquisition be approved. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made before the thirtieth calendar 5. Savings and loan data are as of September 30, 1982. day following the effective date of this Order, or later 6. When savings and loan data are considered, Applicant's market than three months after the effective date of this share falls to 13.2 percent, and it remains as the largest depository institution in the market. Bank's market share falls to 2.8 percent and it becomes the 13th largest depository institution in the market. In addition, including savings and loan institutions, the four-firm concentration ratio of the Gary-Hammond market is 33.4 percent and would rise to 36.2 percent upon consummation of the proposal. Similarly, the HHI of the market is 559 and would rise by 74 points to 633. 12. Under Whitney Bank v. New Orleans Bank, 379 U.S. 411, 419 7. Indiana Code § 28-l-7.2-3(a) (Supp. 1983). (1965), the Board is prohibited from approving an application by a 8. Indiana Code § 28-8-2-3 (1973). bank holding company if consummation of the proposed transaction 9. Indiana Code § 28-1-7.2-3 (Supp. 1983). would be prohibited by valid state law. 10. Id. 13. Citicorp (Biscayne Federal), 70 FEDERAL RESERVE BULLETIN 11. Indiana Code § 28-l-7.2-3(b)-(f) (Supp. 1983). 157, 159, n.7 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 441 Order, unless such period is extended for good cause with any other banking organization in the market and, by the Board, or by the Federal Reserve Bank of therefore, consummation of the proposal would not Chicago pursuant to delegated authority. result in any adverse effects upon competition in any By order of the Board of Governors, effective relevant area. April 3, 1984. The financial and managerial resources of Applicant and Bank are regarded as generally satisfactory, and Voting for this action: Vice Chairman Martin and Gover- the future prospects of each appear favorable, particunors Wallich, Partee, Rice, and Gramley. Absent and not larly in light of certain commitments made by Applivoting: Chairman Volcker and Governor Teeters. cant's principals. Although Applicant does not anticipate any immediate changes in the services offered by JAMES MCAFEE, Bank, considerations relating to the convenience and [SEAL] Associate Secretary of the Board needs of the community to be served are consistent with approval of the application. Accordingly, the Board has determined that consummation of the trans- McKenzie County Bancorp action would be consistent with the public interest and Watford City, North Dakota that the application should be approved. On the basis of the record, the application is ap- Order Approving Formation of a Bank Holding proved for the reasons summarized above. The trans- Company action shall not be consummated before the thirtieth calendar day following the effective date of this Order McKenzie County Bancorp, Watford City, North Da- or later than three months after the effective date of kota, has applied for the Board's approval under this Order, unless such period is extended for good section 3(a)(1) of the Bank Holding Company Act cause by the Board or by the Federal Reserve Bank of (12 U.S.C. § 1842(a)(1)), to become a bank holding Minneapolis, acting pursuant to delegated authority. company by acquiring at least 93 percent of the voting By order of the Board of Governors, effective shares of The McKenzie County National Bank, Wat- April 10, 1984. ford City, North Dakota ("Bank"). Notice of the application, affording opportunity for Voting for this action: Chairman Volcker and Governors interested persons to submit comments and views, has Martin, Partee, Rice, and Gramley. Absent and not voting: been given in accordance with section 3(b) of the Act. Governors Wallich and Teeters. The time for filing comments and views has expired, and the Board has considered the application and all JAMES MCAFEE, comments received in light of the factors set forth in [SEAL] Associate Secretary of the Board section 3(c) of the Act. Applicant, a nonoperating corporation with no subsidiaries, was organized under the laws of North Mellon National Corporation Dakota for the purpose of becoming a bank holding Pittsburgh, Pennsylvania company by acquiring Bank, which controls deposits of approximately $9.0 million.1 Upon acquisition of Order Denying Acquisition of a Bank and Merger of Bank, Applicant would control the 117th largest com- Bank Holding Companies mercial banking organization in North Dakota and approximately 0.2 percent of the total deposits in Mellon National Corporation, Pittsburgh, Pennsylvacommercial banks in the state. Consummation of this nia, a bank holding company within the meaning of the proposal would have no significant effects on the Bank Holding Company Act of 1956, as amended, concentration of banking resources in North Dakota. 12 U.S.C. § 1841 et seq., has applied for the Board's Bank is the smallest of seven banking organizations approval under section 3(a) of the Act to acquire 100 in the relevant banking market,2 and holds 2.9 percent percent of the voting shares of Heritage Bank, N.A., of the total deposits in commercial banks therein. Jamesburg, New Jersey ("Heritage Bank"), and to Neither Applicant nor any of its principals is affiliated merge with Heritage Bancorporation, Jamesburg, New Jersey ("Heritage Bancorp"). Mellon proposes to acquire Heritage Bancorp and its subsidiary bank, Heritage Bank, through a series of transactions. First, Mellon's subsidiary, Girard Bank, 1. All banking data are as of March 31, 1983. Bala Cynwyd, Pennsylvania, would merge into Heri- 2. The relevant banking market is approximated by William and McKenzie Counties, North Dakota. tage Bank, followed immediately by a merger of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

442 Federal Reserve Bulletin • May 1984 Heritage Bancorp into Mellon. Simultaneous with the located in Pennsylvania and one bank located in Girard Bank/Heritage Bank merger, Mellon's shares Delaware. Heritage Bank controls total assets of $1.8 of Girard Bank would be cancelled and replaced with billion and has total domestic deposits of $1.5 billion. new voting shares issued by Heritage Bank (renamed Heritage Bank operates 90 branches in the State of Mellon Bank East). At the same time, Heritage Ban- New Jersey and one branch in Philadelphia, Pennsylcorp's shares of Heritage Bank would be cancelled, vania, which holds $10 million in deposits. Heritage thereby giving Mellon control of Heritage Bank Bank, one of only two national banks with branches in (which, at this point, would have absorbed Girard by more than one state, is authorized to retain its Philamerger). Heritage Bancorp's shareholders would re- delphia branch by the McFadden Act, which permits a ceive Mellon stock or cash for their shares of Heritage national bank to retain branches in operation before Bancorp. By letter dated February 27, 1984, the Board February 25, 1927.3 determined that Mellon was required to obtain prior Although consummation of this proposal would approval for the proposed transactions under section eliminate some existing competition between Appli- 3(a) of the BHC Act. cant and Heritage Bancorp in the Philadelphia and On March 2, 1984, Mellon filed an application with Wilmington banking markets, the Board concludes the Board for prior approval under the Act for the that the acquisition would not have any significant proposal (reserving the claim that no application is adverse effects on competition in any relevant area. required). Notice of this application, affording an Neither market is highly concentrated, and numerous opportunity for interested persons to submit com- commercial banking organizations would remain in ments, has been given in accordance with section 3(b) each market upon consummation of the proposal. The of the Act. The time for filing comments has expired financial and managerial resources and future prosand the Board has considered the application and all pects of the organizations involved and considerations comments received, including those from the Attorney relating to the convenience and needs of the communi- General and the Banking Commissioner of the State of ties to be served are consistent with approval of this New Jersey, in light of the factors and requirements of application. section 3 of the Act (12 U.S.C. § 1842(c)). The decisive issue in this application is whether the On March 27, 1984, the Comptroller of the Currency Board is prohibited by the Douglas Amendment (secapproved the merger of Girard Bank into Heritage tion 3(d) of the Act, 12 U.S.C. § 1842(d)) from approv- Bank and determined that the retention by Heritage ing Mellon's application to acquire Heritage Bank. Bank of branches at the former Girard and Heritage The Douglas Amendment prohibits the Board from Bank locations was consistent with the McFadden Act approving an application by a bank holding company and the statutes governing the merger of national to acquire any additional bank "located outside of the banks.1 State" in which the acquiring bank holding company's Mellon, the largest commercial banking organiza- subsidiary banks principally conduct their operations, tion in Pennsylvania, has consolidated assets of $26.4 unless the state in which the bank to be acquired is billion and total domestic deposits of $12.6 billion.2 In located specifically authorizes the acquisition.4 In addition to Girard, Mellon controls three other banks Lewis v. B.T. Investment Managers, the United States Supreme Court stated that the Douglas Amendment 1. 12 U.S.C. §§ 36 and 215a. The Comptroller concluded that 3. 12 U.S.C. § 36. Heritage could have established branches at each of the Girard branch 4. The Douglas Amendment provides that: sites under the McFadden Act (which allows a national bank to No application . . . shall be approved under this section which establish a branch within the state in which it is situated) because will permit any bank holding company or any subsidiary thereof Heritage is "situated" in both New Jersey and Pennsylvania for to acquire, directly or indirectly, any voting shares of, interest in, purposes of the McFadden Act. or all or substantially all of the assets of any additional bank The Comptroller found that Heritage Bank would have its "princi- located outside of the State in which the operations of such bank pal place of business" in Pennsylvania and could, therefore, branch holding company's banking subsidiaries were principally conwithin Pennsylvania because Heritage Bank's proposed articles will ducted on the effective date of this amendment or the date on provide that, for purposes of Pennsylvania law, Heritage Bank's which such company became a bank holding company, whichev- "principal place of business" will be a designated office in Philadel- er is later, unless the acquisition of such shares or assets of a phia. The Comptroller also found that Heritage Bank could retain its State bank by an out-of-State bank holding company is specifical- New Jersey branches under New Jersey law and the McFadden Act ly authorized by the statute laws of the State in which such bank because, inter alia, Heritage Bank would maintain its "main office, is located, by language to that effect and not merely by implicawhich shall also be its principal and head office" in New Jersey and tion. For the purposes of this section, the State in which the would be located in New Jersey for purposes of New Jersey law as operations of a bank holding company's subsidiaries are princiwell as the National Bank Act. pally conducted is that State in which total deposits of all such 2. Deposit data are as of June 30, 1982. banking subsidiaries are largest. 12 U.S.C. § 1842(d). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 443 establishes a general federal prohibition on the acquisition or judgment concerning its purposes and, in the light of expansion of banking subsidiaries across state lines. . . [and] these purposes, a common sense analysis as to where granted to the States. . . the authority to create exceptions to Heritage Bank is located. In this framework, the this general prohibition, that is, to permit expansion of Board has reviewed the facts concerning Heritage banking across state lines where it otherwise would be federally prohibited, (emphasis in the original).5 Bank's charter, operations, management, deposits, and branches. Thus, by its terms, the Douglas Amendment prohib- Heritage Bank is chartered in New Jersey; its artiits the Board from approving an application by a cles provide, as required by the National Bank Act, Pennsylvania bank holding company to acquire a bank that its "main office, which shall also be its principal located in any state outside of Pennsylvania, unless office and head office" will be located in New Jersey. that state by statute specifically authorizes the acquisi- Mellon and Heritage Bank have also advised the tion. The issue that must be decided in this case is Comptroller that the "principal office" of Heritage whether Heritage Bank is a bank that is located Bank will not be transferred to Pennsylvania after the outside of Pennsylvania and, if so, whether the state in merger. Heritage Bank's management officials and which it is located has specifically authorized the administrative offices are located in New Jersey and acquisition of Heritage Bank by an out-of-state bank would continue in that location after the proposed holding company. merger. Heritage Bank's board of directors meet and The Attorney General and the Banking Commis- issue orders from offices in New Jersey and, similarly, sioner of New Jersey oppose the Mellon application on would continue this arrangement after the proposed the grounds that Heritage Bank is located in New merger. Jersey because it is chartered and conducts its princi- Heritage Bank has significantly expanded its New pal operations in New Jersey, and that it may not, Jersey operations over the years through branching de therefore, be acquired by a bank holding company, novo in New Jersey and through mergers with other such as Mellon, with a home state outside of New New Jersey banks. As of September, 1983, Heritage Jersey without the specific authorization of New Jer- Bank maintained 90 branches in New Jersey. In consey. The Attorney General states that New Jersey trast, since establishment of its branch in Pennsylvania statute laws do not specifically authorize an out-of- in 1813, 171 years ago, Heritage Bank has never state bank holding company to acquire a bank located further expanded its operations in that State and has in New Jersey. The Attorney General also contends maintained only one branch in Pennsylvania. Finally, that the acquisition is expressly prohibited by a New over 99 percent of Heritage Bank's deposits are de- Jersey law that prohibits the acquisition of a bank rived through its branches located in New Jersey. located in New Jersey by an out-of-state bank holding Thus, applying the literal language of the Douglas company. Amendment to these facts, the proposed acquisition Mellon asserts that the proposed transaction is not would be prohibited since it is clear that Heritage Bank barred by the Douglas Amendment because Heritage is located outside of Pennsylvania. Moreover, pursuis located in Pennsylvania by virtue of its Philadelphia ing the analysis beyond the literal language leads to the branch and that the Douglas Amendment does not bar same result. the acquisition by a bank holding company of a bank The Douglas Amendment does not contain a specific located in the bank holding company's home state. definition to guide the Board in determining whether Mellon argues that the McFadden Act and Douglas Heritage Bank is an additional bank "located outside Amendment were intended to achieve the same result of' Pennsylvania, the applicant bank holding compaand that, because the proposal is consistent with the ny's home state.6 The Douglas Amendment states McFadden Act, it is consistent with the Douglas explicitly that the location of the acquiring bank hold- Amendment. Alternatively, Mellon argues that, if the ing company—in this case, Mellon—is determined by Douglas Amendment applies to this transaction, New the state in which the total deposits of its subsidiary Jersey law contains a provision that specifically autho- banks are the largest—clearly Pennsylvania in this rizes this transaction. case. It is evident that Congress had in mind some The technical legal arguments outlined above, put level of appropriate contacts as a basis for determining forward by Applicant and the State of New Jersey, location, which in turn would serve as a basis for have been carefully evaluated by the Board. The applying the policies contained in the Amendment. Board believes that the decision in this case turns upon the language of the Douglas Amendment, a basic 6. The primary dictionary definition of the verb "locate" is "to take up one's residence; establish oneself or one's business." Web- 5. 447 U.S. 27, 47 (1980). ster's New International Dictionary, Third Edition (1956). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

444 Federal Reserve Bulletin • May 1984 In the absence of specific Congressional direction way contrary to State policy."8 In view of the fact that on this issue, the Board believes it would be reason- Heritage Bank is located in New Jersey, it would be able to apply the Douglas Amendment standard for inconsistent with the purposes of the Douglas Amendlocation of bank holding companies to determine the ment to adopt a technical definition of the term "locatstate in which Heritage Bank is located. By this ed outside of the State [of Pennsylvania]" so as to criterion, Heritage Bank is located in New Jersey, the deny to the State of New Jersey the opportunity to state in which over 99 percent of its deposits are held. apply its policy to the acquisition of a bank that is However, it is unnecessary in this case to make a clearly and predominantly located in that State. specific choice of standards since, by any other ratio- This analysis of the facts of this case and of the nal criterion, it is also obvious that Heritage Bank is Douglas Amendment is consistent with prior Board located in New Jersey. Viewed from the perspective of interpretations. In Credit and Commerce Holdings/ its charter, the state in which it maintains its principal Financial General Bankshares, the Board stated that office, and from which it conducts its affairs, Heritage "section 3(d) was designed to preclude the Board from Bank is also located in New Jersey. Similarly, seen approving the creation of additional interstate bank from the point of view of the state in which all but one holding companies above and beyond those grandfathof its branches are situated, Heritage Bank is located ered under the Act."9 The Board determined that the in New Jersey. acquisition of a grandfathered multi-state bank holding Thus, by all common sense criteria, the overwhelm- company by a shell corporation would be permissible ing evidence is that Heritage Bank is located in New under the Douglas Amendment because "no addition- Jersey, and thus outside of Pennsylvania. The fact that al bank would be added to an existing multi-state bank Heritage maintains a very small branch in Philadelphia holding company structure." does not change this result. The Board does not Approval of Mellon's application would add Mellon, believe it would be reasonable to use this incidental which is not a grandfathered multi-state bank holding branch to justify avoiding the application of the Doug- company, to the list of multi-state bank holding comlas Amendment and New Jersey law to the proposed panies.10 Moreover, the multi-state bank holding commerger of a Pennsylvania bank holding company with pany system that would result from Mellon's proposed a bank whose contacts are almost exclusively in New transaction would include additional banks (Mellon's Jersey. Such an interpretation would provide a vehicle subsidiary banks in Pennsylvania) that were not previfor evading the clear Congressional intent contained in ously part of a grandfathered bank holding company the Douglas Amendment. system and that could not lawfully have been acquired The Douglas Amendment was clearly intended to by that system under the Douglas Amendment. prevent an out-of-state bank holding company from Mellon's argument rests on the proposition that, acquiring a bank located in a state unless the state consistent with the interpretation of the term "situataffirmatively authorized the acquisition. This amend- ed" in the McFadden Act, Heritage is "located" for ment represented a compromise position between the purposes of the Douglas Amendment in each state in House and Senate versions of the original 1956 BHC which it maintains a branch.11 As noted, this proposi- Act. The House-passed bill expressly prohibited all interstate arrangements,7 while the original Senate bill did not prohibit the Board from approving interstate 8. 102 CSC 6860 (1956) (remarks by Senator Douglas). acquisitions by bank holding companies. During the 9. 65 FEDERAL RESERVE BULLETIN 254, 259 (1979). 10. Indeed, if Heritage Bancorp were a grandfathered multi-state debate on the bill on the floor of the Senate, Senator bank holding company with a bank in New Jersey and a bank in Douglas offered a provision, similar to that now codi- Pennsylvania (instead of a branch in Pennsylvania), this application fied as section 3(d) of the BHC Act, explaining that would plainly be prohibited by the Douglas Amendment because Heritage's New Jersey bank would be an additional bank located this provision was the "logical continuation of the outside the state in which Mellon's banking operations are principally principles of the McFadden Act" and would serve the conducted. purpose "in principle almost identical with the present 11. In approving the Heritage Bank/Girard Bank merger, the Comptroller relied upon the decision in Seattle Trust & Savings Bank provision which governs branch banking . . . which v. Bank of California, N.A., 492 F.2d 48 (9th Cir. 1974), cert, denied, tried to prevent the federal power from being used to 419 U.S. 844 (1974). In that case, the court held that, for purposes of permit national banks to expand across state lines in a the McFadden Act, a bank is "situated" in each state in which it operates a branch. The court held that, because the Bank of California operated a grandfathered branch in Washington, it was "situated" in Washington and therefore could also expand in Washington by branching as if it were a Washington state bank, even though Bank of 7. The House Report on the 1956 Act recognizes that, without this California was chartered in California and conducted most of its type of prohibition, "States have no way to protect themselves against operations in that state. The Seattle Trust decision only addresses the an outside bank holding company coming in and buying stock in question of opening a de novo branch outside the Bank of California's banks, especially national banks, located within their borders." H. home state in order that the bank not be competitively disadvantaged Rep. No. 609, 84th Cong., 1st Sess. 3 (1955). vis-a-vis similarly situated Washington banks. That decision does not Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 445 tion, however, concedes that Heritage is located in of equity, a Pennsylvania bank holding company New Jersey as well as Pennsylvania and, under the should be able to expand into New Jersey by acquisiterms of the Douglas Amendment, approval of Mel- tion of Heritage Bank. The McFadden Act's grandfalon's proposal is prohibited. ther provision for interstate branches established be- To avoid this result, Mellon recasts the language of fore 1927 allows Heritage Bank to maintain a presence the Douglas Amendment, arguing that the Douglas in Pennsylvania and is an exception to the principle of Amendment does not prohibit the acquisition by a state authority over branching in recognition of the bank holding company if any part of the target bank is fact that Heritage Bank operated a branch for over 100 located within the home state of the acquiring bank years in Pennsylvania. The Board believes that it holding company. Under this interpretation, the Doug- would not be consistent with either the language or the las Amendment would not bar Mellon's acquisition of purpose and intent of the Douglas Amendment to Heritage Bank because it is located in Pennsylvania, extend this limited grandfather right under the McFadnotwithstanding the fact that, even under Mellon's den Act into the Douglas Amendment, particularly view, Heritage Bank would also be located in New where, as here, such an interpretation would vitiate Jersey. the ability of New Jersey to apply its policy of inter- Mellon's argument might be given more weight if the state acquisitions to a bank that by any reasonable facts did not place Heritage Bank almost exclusively in standard is clearly and predominantly located in New New Jersey. However, in the context of this case, this Jersey. However, under existing Pennsylvania law and interpretation relies upon the technicality of a $10 as a practical matter, any expansion by Heritage Bank million deposit branch in Pennsylvania to acquire a in Pennsylvania would likely be limited. Moreover, holding company with almost $2 billion of assets any acquisition by Heritage Bancorp (or any other located in New Jersey, despite a clear federal statutory New Jersey bank holding company that acquired Heriprohibition and the absence of the specific authoriza- tage Bancorp) of a Pennsylvania bank would be subtion of the state with the overwhelming policy interest ject to the BHC Act and the Douglas Amendment. in the acquisition. Such an interpretation would re- The Board has also carefully considered Mellon's quire the Board to ignore the plain terms of the statute, contention that the acquisition of a bank located in which prohibits the acquisition by Mellon of a bank New Jersey by an out-of-state bank holding company located outside of Pennsylvania, and would plainly be has been "specifically authorized by the statute laws contrary to the concept and intent of the Douglas of [New Jersey] ... by language to that effect and not Amendment, giving to the states the right to authorize merely by implication," as would be required by the entry into the state by out-of-state bank holding com- Douglas Amendment before the Board could approve panies. Mellon's proposal. 12 U.S.C. § 1842(d). The Board recognizes that the Comptroller has New Jersey law contains a prohibition against the approved the merger of Girard into Heritage Bank as acquisition of banks located in New Jersey by out-ofpermissible under the McFadden Act. However, the state bank holding companies.12 Mellon argues that Douglas Amendment applies different statutory lan- this statute, however, provides an exception for an guage and addresses a different type of transaction. acquisition of bank shares resulting from a merger or The McFadden Act deals with the location of national consolidation of a bank with another bank.13 Mellon bank branches; the Douglas Amendment deals with argues that, because its acquisition of Heritage Bank's the interstate ownership of banks. The fact that Heritage Bank may, under an interpretation of the National Bank Act, expand into Pennsylvania by merger does 12. Section 17:9A-345 of the New Jersey Statutes provides: not address the question of whether a Pennsylvania Except as provided by sections 3 and 4 of this Act, bank holding company may acquire the resulting inter- * * * state bank. The Board has also considered the argument that (b) No company which owns more than 25 percent of the stock of either a bank located outside this State or a foreign bank shall since, under the Comptroller's ruling, Heritage Bank own or acquire ownership of more than 5 percent of the stock of a may expand into Pennsylvania by merger, as a matter bank located in this state. Both the New Jersey Attorney General and the Comptroller have concluded that Heritage Bank has its principal office and is located in New Jersey for purposes of New Jersey law. 13. The exception upon which Mellon relies (section 4 of the Act referred to in Section 17:9A-345 of the New Jersey statutes) provides: address the question of whether a multi-state bank may, by a merger, [n]othing in this act shall prohibit a company from acquiring bank acquire and retain branches outside of its home state, such as is stock in excess of the limitation imposed by section 2 of this Act proposed in the Heritage/Girard merger, or the question presented in [§ 17:9A-345] if such acquisition results from an exchange of this case of whether a bank holding company located outside of stock resulting from the merger or consolidation of a bank with California may acquire Bank of California. another bank or banks. N.J. Stat. Ann. § 17:9A-347. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

446 Federal Reserve Bulletin • May 1984 voting shares would occur as a result of the merger of interstate acquisitions (section 345(b)) was enacted in Heritage Bank with Girard Bank, New Jersey law 1968—11 years later and was placed in the same provides specific authorization for the interstate acqui- section of the New Jersey bank holding company sition of Heritage Bank by Mellon. statute as the 1957 ban on multi-bank holding compa- The Board has previously concluded that an excep- nies. Based upon these facts and others specified in his tion to a prohibition may be a sufficient specific opinion, the Attorney General has stated that the authorization for purposes of the Douglas Amendment exception in section 347 does not apply to the prohibiwhere it is clear from the terms of the statute, its tion in section 345. Moreover, he states that, in these legislative history, or state practice under the statute circumstances, the exception in section 347 cannot be that the state enacted the exception in order to autho- read to affirmatively authorize an acquisition of stock rize interstate acquisitions.14 In its decision in NCNB, of a New Jersey bank by an out-of-state bank holding the Board found that the exception to the general company. interstate prohibition in Florida law was a sufficient In the Board's view, based upon all the facts of authorization under the Douglas Amendment because record, including the opinion of the Attorney General, (1) the Florida statute clearly and on its face specifical- the New Jersey statute upon which Mellon relies does ly excepted certain grandfathered institutions from the not constitute a specific authorization "by language to state prohibition; (2) there was evidence of the clear that effect and not merely by implication," as required intent of the legislature to permit certain interstate by the Douglas Amendment. In contrast to the Iowa acquisitions by grandfathered entities, as demonstrat- and Florida statutes, where it was clear from the terms ed by the use of the state statute in previous cases to of the statutes, their legislative histories, or state permit grandfathered out-of-state bank holding compa- practice that the states intended to permit some types nies to acquire additional institutions in the state; and of interstate acquisitions, there is no indication that (3) the Attorney General of Florida determined that New Jersey intended to permit any interstate acquisi- NCNB, a grandfathered out-of-state bank holding tions. company, was not prohibited from acquiring a Florida Without any definitive legislative history, the Board bank.15 believes that is unreasonable to impute to the New In this case, the New Jersey Attorney General has Jersey legislature the belief that, by amending one rendered a formal opinion to the effect that the excep- section of its law, it was specifically authorizing outtion upon which Mellon relies does not apply to New of-state bank holding companies to acquire banks in Jersey's interstate banking statute.16 The exception New Jersey, particularly where the exception was upon which Mellon relies (section 347) was enacted in enacted 11 years before and not in connection with 1957 to ensure that the 1957 New Jersey statute New Jersey's interstate banking prohibition. Thus, if banning the formation of multi-bank holding compa- the New Jersey law authorizes interstate acquisitions, nies was not interpreted to prohibit a bank owned by a this authorization is implied from the structure of the New Jersey bank holding company from merging with New Jersey statute, and the authorization is not an other banks in the same county. At that time, New express authorization as explicitly required by the Jersey law did not contain an express prohibition Douglas Amendment. Moreover, the Board notes that, against acquisitions of New Jersey banks by out-of- unlike the Florida law at issue in NCNB, the New state bank holding companies. New Jersey's ban on Jersey statute, which is over 15 years old, has never been used to permit any type of interstate bank holding company acquisition in New Jersey. For the foregoing reasons, the Board concludes that 14. NCNB Corporation, 68 FEDERAL RESERVE BULLETIN 59 (1982). The Board made a similar determination with respect to an the Douglas Amendment prohibits the Board from Iowa statute. See Northwest Bancorporation, 38 Federal Register approving Mellon's proposed acquisition of Heritage 21530 (1973), affd. sub nom., Iowa Independent Bankers v. Board of Bancorp and Heritage Bank. Accordingly, Mellon's Governors of the Federal Reserve System, 511 F.2d 1288 (D.C. Cir. 1975). Although the issue of whether the Iowa statute was a specific application is hereby denied. authorization under the Douglas Amendment was not before the By order of the Board of Governors, effective court, the court implicitly approved the use of the exception as a form April 24, 1984. of language that could specifically authorize a transaction. 15. The issue in NCNB was whether an out-of-state bank holding company that owned a trust company in Florida before the grandfa- Voting for this action: Chairman Volcker and Governors ther date in the Florida statute could acquire a bank in Florida. It was Martin, Wallich, Rice, and Gramley. Voting against this undisputed that such a company could acquire another Florida trust action: Governor Partee. Absent and not voting: Governor company and that an out-of-state bank holding company that owned a bank in Florida before the grandfather date could acquire an additional Teeters. bank in Florida. 16. When interpreting state law, the Board has given substantial weight to the reasoned opinions of state authorities. NCNB, supra; Northwest Kansas Banc Shares, Inc., 69 FEDERAL RESERVE BULLE- JAMES MCAFEE, TIN 98 (1983). [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 447 Omaha National Corporation consummation of the proposed transaction would not Omaha, Nebraska eliminate any substantial existing competition. The Board has also evaluated the effect of the proposed Order Approving Acquisition and Merger of Bank merger of Applicant and FNLC upon probable future Holding Companies competition in their respective banking markets and considered the proposal in light of the Board's pro- Omaha National Corporation, Omaha, Nebraska, a posed guidelines on market extension mergers.2 In bank holding company within the meaning of the Bank evaluating the effect of a proposed transaction on Holding Company Act of 1956, as amended (12 U.S.C. probable future competition, the Board considers the § 1841 et seq.)("Act"), has applied for the Board's level of concentration in the market, the number of approval under section 3(a) of the Act (12 U.S.C. probable future entrants into the market, the size of § 1842(a)) to acquire 45.2 percent of the voting shares the bank to be acquired, and the attractiveness of the of First National Lincoln Corp., Lincoln, Nebraska market for de novo or foothold entry. After consider- ("FNLC"), also a bank holding company under the ation of these factors in the context of the specific Act. Applicant will thereby acquire control of FNLB's facts of this case, the Board concludes that consumsubsidiary bank, First National Bank and Trust Com- mation of this proposal would not have any significant pany of Lincoln, Lincoln, Nebraska ("Lincoln effects on probable future competition in any relevant market. Bank"). Subsequently, FNLC will be merged into Applicant, which will continue operations under the Applicant's subsidiary bank, Omaha National Bank name "Firstier, Inc." ("Omaha Bank"), operates in the Omaha, Nebraska, Notice of the applications, affording opportunity for banking market,3 and is the largest commercial bank in interested persons to submit comments, has been the market controlling 23.5 percent of total deposits in given in accordance with section 3(b) of the Act. commercial banks in the market. The Omaha banking (12 U.S.C. § 1842(b)). The time for filing comments market is not highly concentrated. The three largest has expired, and the Board has considered the applica- commercial banking organizations in the market contions and all comments received in light of the factors trol 64.5 percent of the total deposits in commercial set forth in section 3(c) of the Act (12 U.S.C. banks in the market, and there is no evidence in the § 1842(c)). record that the market is not competitive. The Su- Applicant, the second largest banking organization preme Court has indicated that "the potential competiin Nebraska, controls one subsidiary bank with depos- tion doctrine has meaning only as applied to concenits of $714.4 million, which represent 6.2 percent of the trated markets."4 Thus, the Board has determined that total deposits in commercial banks in the state.1 the proposed transaction would have no significant FNLC, the fifth largest banking organization in Ne- adverse effects on probable future competition in the braska, controls one bank with deposits of $534.2 Omaha banking market. million, which represent 4.7 percent of the total depos- FNLC's subsidiary bank, Lincoln Bank, operates in its in commercial banks in the state. Upon consumma- the Lincoln, Nebraska, banking market,5 and is the tion of the proposal, Applicant would become the largest banking organization in the market, controlling largest banking organization in Nebraska, controlling 48.2 percent of the total deposits in commercial banks deposits of $1.2 billion, representing 10.9 percent of in the market. Because of Applicant's size and finanthe total deposits in commercial banks in the state. cial and managerial resources, the proximity of Lin- With regard to concentration of banking resources, coln to Omaha, and the relative size and importance of Nebraska is one of the least concentrated states in the the Lincoln market within the state, Applicant appears nation and would remain so upon consummation of to be a likely entrant into the Lincoln market absent this transaction. The four largest banking organiza- approval of this proposal. The three largest banking tions in Nebraska control 25 percent of the total organizations in the market control 82.2 percent of the deposits in commercial banks in the state and this total deposits in commercial banks in the market, a figure would increase to 29.7 percent upon consummation of this transaction. Accordingly, it is the Board's 2. "Proposed Policy Statement of the Board of Governors of the judgment that consummation of the proposed transac- Federal Reserve System for Assessing Competitive Factors Under the tion would not have a significant effect on the concen- Bank Merger Act and the Bank Holding Company Act." 47 Federal Register 9017 (March 3, 1982). Although the Board has not approved tration of banking resources in Nebraska. the policy statement, it is using the policy guidelines in its analysis of Because Applicant's subsidiary bank and FNLC's the effect of a proposal on probable future competition. subsidiary bank operate in separate banking markets, 3. The Omaha banking market is approximated by the Omaha RMA. 4. United States v. Marine Bancorporation, 418 U.S. 602, 630 (1974). 1. All deposit data are as of December 31, 1982, unless otherwise 5. The Lincoln banking market is approximated by the Lincoln indicated. RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

448 Federal Reserve Bulletin • May 1984 level viewed as highly concentrated under the Board's The Board's proposed market extension guidelines guidelines.6 state that, where there are more than six probable In its evaluation of the competitive effects of bank future entrants into a market, the elimination of an expansion proposals, the Board has previously indi- applicant as a potential competitor is not likely to have cated that thrift institutions have become, or at least an adverse effect on probable future competition. have the potential to become, major competitors of When it issued the guidelines, the Board stated that banks, and has accorded considerable weight to the the number of probable future entrants specified in the competitive influence of thrift institutions.7 This is due guidelines was intended to be used only as a general to a significant expansion of the services that thrifts standard, because no single number of entrants could may offer, particularly as a result of the enactment of be used as a true indicator in all circumstances. The the Consumer Checking Account Equity Act of 1980,8 Board was aware that the structure of a particular which authorized thrift institutions to offer NOW market and the limitations on expansion imposed by accounts, the Garn-St Germain Depository Institu- state law would have to be considered with regard to tions Act of 1982,9 which greatly expanded the com- each case. mercial lending powers of federal thrift institutions, The Board notes that there are only five banking and various state statutes. organizations with assets over $500 million in the State The Lincoln banking market contains six thrift insti- of Nebraska. Two of these are located in the Lincoln tutions that control 33.8 percent of the total deposits in market, leaving only three, including Applicant, that banks and savings and loan associations in the market, meet the Board's definition of probable future entrant and operate 31 offices in the market (as compared to contained in the guidelines. Nevertheless, Nebraska the 15 commercial bank offices). The three largest has seven banking organizations with assets of less thrift institutions in the market are the first, third and than $500 million, but more than $100 million, that fifth largest depository institutions in Nebraska, and appear to have the financial and managerial resources each controls more than $500 million in deposits necessary to enter the Lincoln banking market. While statewide. The record shows that these and other thrift these organizations have fewer deposits than specified institutions in Nebraska have extensive branch net- in the guidelines to be considered probable future works in the state; aggressively solicit transaction entrants, in light of the relatively small size of Nebrasaccounts, time and savings accounts, and consumer ka banking organizations generally and recent amendloans; and offer residential and commercial mortgages ments to Nebraska law that expand branching opporand transaction accounts. In addition, federal thrift tunities and allow the formation of multibank holding institutions can accept demand deposits from business companies,11 the Board believes that these organizacustomers with whom they have a lending relation- tions represent probable future entrants into the Linship. Four of the six thrift institutions in Lincoln have coln market. hired commercial lending officers and instituted com- Finally, to the extent that thrift institutions are not mercial loan programs. While the commercial loan considered existing competitors of commercial banks, portfolios of these institutions are not substantial at they would, based upon their power to offer many of the present time, this appears due to the fact that thrift the products and services offered by commercial institutions have only recently obtained expanded banks, be viewed as potential entrants into the comcommercial lending powers. In any event, the record mercial banking product market, where, as here, they establishes that thrift institutions in the Lincoln mar- have evidenced the intent to provide commercial ket are prepared and intend to expand their commer- banking services. cial lending operations. Accordingly, based on all the evidence of record, In the Board's view, this evidence indicates that including the actual and potential competition offered thrift institutions should be given substantial weight in by thrift institutions and the structure of banking in determining concentration in the market.10 Nebraska, the Board concludes that consummation of this acquisition would not have such adverse effects on probable future competition in the Lincoln banking 6. Market data are as of September 30, 1983. market as to warrant denial of the proposal. 7. First Railroad <£ Banking Company of Georgia, 70 FEDERAL RESERVE BULLETIN 436, (Press Release dated April 16, 1984); NBD The financial and managerial resources of Appli- Bancorp, Inc. (Pontiac State Bank), 69 FEDERAL RESERVE BULLETIN cant, FNLC, and their subsidiary banks, are satisfac- 917; Comerica (Pontiac State Bank), 69 FEDERAL RESERVE BULLETIN tory and their future prospects appear favorable. Con- 911; General Bancshares Corporation, 69 FEDERAL RESERVE BULLE- TIN 802; Comerica (Bank of the Commonwealth), 69 FEDERAL RE- summation of the transaction would enable each of SERVE BULLETIN 797; and First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). 8. Title III, 94 Stat. 132, 145 codified at 12 U.S.C. § 1832. deposits held by the three largest depository institutions in the market 9. Title III, 97 Stat. 1469, 1499-1500. would be 67 percent and the market would not be considered highly 10. If only 50 percent of the deposits held by thrift institutions were concentrated under the Board's guidelines. included in the calculation of market concentration, the share of 11. Neb. Rev. Stat. §§ 8-903 and 8-157 (1983 Supp.). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 449 those institutions to increase and improve their ser- banking organization in Illinois, with aggregate deposvices to their customers. Specifically, the combined its of $66.7 million, representing less than 1 percent of organization would have a higher lending limit, and the total deposits in commercial banks in the state.1 Applicant states that the affiliation would result in Bank is the 478th largest banking organization in lower credit costs at both institutions. Also, consum- Illinois, with deposits of $38.7 million. Upon consummation of the proposal would result in the addition of mation of the proposed transaction, Applicant would tax and leasing expertise to Lincoln Bank's staff and control less than 1 percent of the total deposits in farm management expertise to Omaha Bank's staflF. commercial banks in Illinois. Accordingly, consumma- Accordingly, considerations relating to the conve- tion of this transaction would have no significant effect nience and needs of the community to be served are on the concentration of banking resources in the state. consistent with approval of the applications. Based on Applicant is the fifth largest of 24 commercial bankthe foregoing and other facts of record, the Board has ing organizations that operate in the Aurora banking determined that consummation of the proposed trans- market,2 controlling 6.5 percent of total deposits in action would be consistent with the public interest and commercial banks in the market. Bank is the ninth that the application should be approved. largest commercial banking organization in the Aurora On the basis of the record, these applications are banking market, controlling 3.8 percent of total deposapproved for the reasons summarized above. The its in commercial banks in the market. Upon consumacquisition of shares and merger of bank holding mation of the proposed transaction, Applicant would companies shall not be made before the thirtieth become the third largest banking organization in the calendar day following the effective date of this Order, Aurora banking market and would control 10.3 percent or later than three months after the effective date of of the total deposits in commercial banks in the this Order, unless such period is extended by the market. Board or by the Federal Reserve Bank of Kansas City, Although this proposal would result in the eliminaacting pursuant to delegated authority. tion of some existing competition in the Aurora bank- By order of the Board of Governors, effective ing market, several factors mitigate the competitive April 24, 1984. effects of the proposal. The Aurora banking market is not concentrated, with the four largest commercial Voting for this action: Governors Martin, Wallich, Partee, banking organizations controlling 44.8 percent of total Rice, and Gramley. Absent and not voting: Governor deposits in commercial banks in the market. In addi- Teeters. Voting against this action: Chairman Volcker. tion, numerous other banking alternatives will remain in the market after consummation of the proposal. JAMES MCAFEE, Accordingly, the Board concludes that consummation [SEAL] Associate Secretary of the Board of the proposed transaction will not have a significant effect on existing competition in the Aurora banking market. Norris Bancorp, Inc. The financial and managerial resources of Appli- St. Charles, Illinois cant, its subsidiaries, and Bank are generally satisfactory and their future prospects are favorable. More- Order Approving Acquisition of a Bank over, Applicant has committed to inject enough capital into Bank to increase Bank's capital to the minimum Norris Bancorp, Inc., St. Charles, Illinois, a bank levels set by the Board. Although Applicant does not holding company within the meaning of the Bank anticipate any immediate changes in the services of- Holding Company Act of 1956, as amended, fered by Bank, considerations relating to the conve- (12 U.S.C. § 1841 et seq.), has applied for the Board's nience and needs of the community to be served are approval pursuant to section 3(a)(3) of the Act consistent with approval. (12 U.S.C. § 1842(a)(3)), to acquire First National On the basis of the record, the application is ap- Bank of Batavia, Batavia, Illinois. proved for the reasons summarized above. The trans- Notice of the application, affording interested per- action shall not be made before the thirtieth day sons an opportunity to submit comments, has been following the effective date of this Order or later than given in accordance with section 3(b) of the Act. The three months after the effective date of this Order, time for filing comments has expired, and the Board unless such period is extended for good cause by the has considered the application and all comments received in light of the factors set forth in section 3(c) of 1. All banking data are as of June 30, 1983. the Act. 2. The Aurora banking market is approximated by the southern portion of Kane County; Piano, Bristol, Oswego, Fox, and Kendall Applicant controls one banking subsidiary, the State townships in Kendall County; and Sandwich Township in DeKalb Bank of St. Charles, the 254th largest commercial County, all in Illinois. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

450 Federal Reserve Bulletin • May 1984 Board or by the Federal Reserve Bank of Chicago, services currently provided by Bank. However, there acting pursuant to delegated authority. is no evidence that the banking needs of the communi- By order of the Board of Governors, effective ty to be served are not being met. Accordingly, April 12, 1984. considerations relating to the convenience and needs of the community to be served are consistent with Voting for this action: Vice Chairman Martin and Gover- approval of this proposal. nors Wallich, Partee, Rice, and Gramley. Absent and not Based on the foregoing and the record of this voting: Chairman Volcker and Governor Teeters. application, it is the Board's judgment that the proposed acquisition is in the public interest and that the JAMES MCAFEE, application should be approved and hereby is ap- [SEAL] Associate Secretary of the Board proved for the reasons summarized above. The transaction shall not be consummated before the thirtieth calendar day following the effective date of this Order Paducah Bank Shares, Inc. or later than three months after the effective date of Paducah, Kentucky this Order, unless such period is extended for good cause by the Board or the Federal Reserve Bank of St. Order Approving Formation of a Bank Holding Louis, acting pursuant to delegated authority. Company By order of the Board of Governors, effective April 6, 1984. Paducah Bank Shares, Inc., Paducah, Kentucky, has applied for the Board's approval under section 3(a)(1) Voting for this action: Governors Wallich, Partee, Rice, of the Bank Holding Company Act (12 U.S.C. and Gramley. Absent and not voting: Chairman Volcker and Governors Martin and Teeters. § 1842(a)(1)) ("Act") to become a bank holding company by acquiring 80 percent or more of the voting JAMES MCAFEE, shares of Paducah Bank & Trust Company, Paducah, [SEAL] Associate Secretary of the Board Kentucky ("Bank"). Notice of the application, affording opportunity for interested persons to submit comments and views, has Salem Capital Corp. been given in accordance with section 3(b) of the Act. Elkhart, Indiana The time for filing comments and views has expired, and the Board has considered the application and all Order Approving Formation of a Bank Holding comments received in light of the factors set forth in Company section 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant is a nonoperating corporation organized Salem Capital Corp., Elkhart, Indiana, has applied for for the purpose of becoming a bank holding company the Board's approval, pursuant to section 3(a)(1) of the by acquiring Bank, which holds deposits of $73.2 Bank Holding Company Act (12 U.S.C. § 1842(a)(1)), million. Upon consummation of the proposal, Appli- to become a bank holding company by acquiring 44 cant would control the 54th largest commercial bank in percent of the voting stock of Salem Financial Corpo- Kentucky and would hold 0.38 percent of the total ration, Goshen, Indiana ("Salem Financial"), a bank deposits in commercial banks in the state.1 holding company within the meaning of the Act, and Bank is the third largest of seven banks in the thereby indirectly acquiring Salem Bank and Trust McCracken County banking market and holds 12.4 Company, Goshen, Indiana ("Bank"). percent of total deposits in commercial banks in the Notice of the application, affording opportunity for market.2 Applicant's proposal is essentially a corpo- interested persons to submit comments and views, has rate reorganization, consummation of which would not been given in accordance with section 3(b) of the Act. result in any adverse affects upon competition or in an The time for filing comments has expired, and the increase in the concentration of banking resources in Board has considered the application and all comany relevant market. ments received in light of the factors set forth in The financial and managerial resources of Applicant section 3(c) of the Act (12 U.S.C. § 1842(c)). and Bank are considered to be generally satisfactory, Applicant is a nonoperating corporation organized and their future prospects appear favorable. Applicant to acquire Bank, which is the 31st largest commercial does not propose to make any specific changes in the bank in Indiana with deposits of $157.5 million, representing 0.56 percent of total deposits in commercial banks in the state.1 Consummation of this proposal 1. Banking data are as of September 30, 1983. 2. The McCracken County banking market is defined as McCracken County, Kentucky, and Massac County, Illinois. 1. Banking data are as of June 30, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 451 will have no significant effects on the concentration of (the "Act") (12 U.S.C. § 1842(a)(1)) to form a bank banking resources in the state. holding company by acquiring 95 percent of the voting Bank operates in the Elkhart-Niles-South Bend shares of The Union National Bank of Macomb, banking market, where it is the sixth largest of 30 Macomb, Illinois ("Bank"). commercial banks, controlling 6.1 percent of total Notice of the application, affording opportunity for deposits in commercial banks in the market.2 Neither interested persons to submit comments, has been Applicant nor any of its principals has an ownership given in accordance with section 3(b) of the Act. The interest in any other banking organization in the mar- time for filing comments has expired, and the Board ket, and it appears that consummation of this proposal has considered the application and all comments rewill have no significant effects on competition or ceived in light of the factors set forth in section 3(c) of increase the concentration of banking resources in any the Act. relevant area. Applicant is a nonoperating Nebraska corporation The financial and managerial resources of Appli- organized for the purpose of becoming a bank holding cant, Salem Financial, and Bank are considered to be company by acquiring Bank, which holds deposits of generally satisfactory, and their future prospects ap- $54.8 million.1 Bank is the second largest of seven pear favorable. Applicant has proposed no new activi- commercial banking organizations competing in the ties or services for Bank upon consummation of this McDonough County banking market2 and holds 28.5 proposal. However, there is no evidence indicating percent of total deposits in commercial banks in the that the needs of the community to be served are not market. Upon acquisition of Bank, Applicant would being met. Accordingly, considerations relating to the control the 309th largest commercial banking organizaconvenience and needs of the community to be served tion in Illinois and approximately 0.06 percent of total are consistent with approval of this proposal. deposits in commercial banks in the state. Based on the foregoing and the record of this This proposal involves a restructuring of Bank's application, the Board has determined that this pro- ownership from an individual to a corporation conposal should be and hereby is approved. The transac- trolled by the same individual. Applicant's principal, tion shall not be consummated before the thirtieth who owns 95 percent of the outstanding shares of calendar day following the effective date of this Order, Bank, also owns 51 percent of the outstanding voting nor later than three months after the effective date of shares of First National Bank of Macomb, Macomb, this Order, unless such period is extended for good Illinois ("First"), which is located five road miles from cause by the Board or by the Federal Reserve Bank of Bank. First, with deposits of $9.4 million, also com- Chicago, acting pursuant to delegated authority. petes in the McDonough County banking market By order of the Board of Governors, effective where it is the fifth largest banking organization, April 5, 1984. controlling 4.9 percent of total deposits in commercial banks in the market. Voting for this action: Governors Wallich, Partee, Rice, Section 3(c) of the Act precludes the Board from and Gramley. Absent and not voting: Chairman Volcker and approving any proposed acquisition that may tend to Governors Martin and Teeters. create a monopoly or may substantially lessen compe- JAMES MCAFEE, tition or be in restraint of trade in any part of the [SEAL] Associate Secretary of the Board United States, unless the Board finds that such anticompetitive effects are clearly outweighed by the convenience and needs of the community to be served. In analyzing a case under these standards where, as Sturm Investment, Inc. here, a principal of an applicant controls another Omaha, Nebraska banking organization in the same market as the bank to be placed in the holding company, the Board considers Order Approving Formation of a Bank Holding the competitive effects of the transaction whereby Company common control of the formerly competing institutions was established.3 Sturm Investment, Inc., Omaha, Nebraska, has ap- In this instance, the two banks had been affiliated plied for the Board's approval under section 3(a)(1) of since the de novo establishment of First by the original the Bank Holding Company Act of 1956, as amended, 2. The Elkhart-Niles-South Bend banking market is defined as all of 1. All banking data are as of December 31, 1982. CaSs County, Michigan, the townships of Berrien, Oronoko, Buchan- 2. The McDonough County banking market is approximated by all an, Niles, and Bertrand in Berrien County, Michigan, all of Elkhart of McDonough County, Illinois. County, Indiana, and all of St. Joseph County, Indiana, except for the 3. See Mid Nebraska Bancshares, Inc. v. Board of Governors, 627 townships of Warren and Olive. F.2d 266 (D.C. Cir. 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

452 Federal Reserve Bulletin • May 1984 principals of Bank in 1964. First provided an additional ties. In addition, CIT operates industrial banks in source of banking services in the market; thus, its California, Hawaii, Iowa, Kentucky, Tennessee, establishment can be viewed as procompetitive. In Washington, and West Virginia,1 and acts throughout 1983, Applicant's principal acquired control of Bank the United States as agent or broker for the sale of and First from the common principals of both institu- credit-related life, accident and health, and disability tions. Because the affiliation of Bank and First was not insurance. CIT also acts as broker for property and anticompetitive at its inception, their acquisition by casualty insurance related to extensions of credit by its Applicant's principal is not viewed as anticompetitive. consumer financing subsidiaries in 44 states.2 Accordingly, the Board concludes competitive consid- Manufacturers Hanover Corporation has also aperations are consistent with approval. plied for the Board's approval under section 25(a) of The financial and managerial resources and future the Federal Reserve Act ("Edge Act") to acquire all of prospects of Applicant and Bank appear to be general- the outstanding voting shares of CIT Holdings Inc., ly satisfactory, particularly in light of commitments by and Service Leasing Corporation of Canada, Limited, Applicant. Convenience and needs of the community both of Toronto, Ontario, Canada. Finally, Manufacto be served are also consistent with approval. Ac- turers Hanover Corporation has provided notice, cordingly, it is the Board's judgment that the proposed under section 4(c)(14) of the Act (12 U.S.C. acquisition is in the public interest and that the appli- § 1843(c)(14)), of its intention to acquire all of the cation should be approved. outstanding shares of CIT International Sales Corpo- On the basis of the record, the application is ap- ration, New York, New York, an export trading proved for the reasons summarized above. The trans- company. action shall not be consummated before the thirtieth Notice of the application, affording interested percalendar day following the effective date of this Order sons an opportunity to submit comments and views, or later than three months after the effective date of has been duly published (49 Federal Register 4147 this Order, unless such period is extended for good (1984)). The time for filing comments has expired, and cause by the Board or by the Federal Reserve Bank of the Board has considered the application and the Chicago acting pursuant to delegated authority. notice and all comments received in light of the factors By order of the Board of Governors, effective specified in section 4 of the Act and the purposes of April 4, 1984. the Edge Act. Applicant, with consolidated assets of approximate- Voting for this action: Governors Wallich, Partee, Rice, ly $64.3 billion, is the third largest commercial banking and Gramley. Absent and not voting: Chairman Volcker and organization in New York and operates three bank Governors Martin and Teeters. subsidiaries, including Manufacturers Hanover Trust WILLIAM W. WILES, Company, which controls $42.2 billion in deposits.3 [SEAL] Secretary of the Board Applicant engages, through seven nonbank subsidiaries operating in 33 states, in various permissible nonbanking activities, including commercial finance, leas- Orders Issued Under Section 4 of Bank Holding ing, mortgage banking, factoring, consumer finance, Company Act credit-related insurance agency activities, and nondepository trust company activities. Manufacturers Hanover Corporation New York, New York Permissible Nonbanking Activities. CIT, with total assets of $6.2 billion, is one of the largest diversified Order Approving the Acquisition of Nonbank finance companies in the United States, operating 275 Company consumer finance offices and 48 commercial finance Manufacturers Hanover Corporation, New York, New York, a bank holding company within the mean- 1. CIT Financial Corporation states that the industrial banks that it ing of the Bank Holding Company Act, has applied for owns and operates do not accept deposits and are not eligible for the Board's approval under section 4(c)(8) of the Act FDIC insurance. Applicant has committed that, after consummation of the proposed acquisition, these industrial banks will not accept (12 U.S.C. § 1843(c)(8)) to acquire all of the voting deposits. Accordingly, the Board has determined that this portion of shares of CIT Financial Corporation, New York, New the application is subject to section 4 of the Act. York ("CIT"). CIT engages through sixty-one subsid- 2. CIT also owns all of the voting shares of North American Company for Life and Health Insurance, which acts as an underwriter iaries operating throughout the United States in factor- for life and accident and health insurance, and North American ing, commercial and industrial lending, mortgage Company for Property and Casualty Insurance, which acts as an banking, consumer finance, leasing, sales financing, underwriter for property and casualty insurance. Applicant will not acquire these companies, both of which will be acquired by RCA. credit servicing, and community development activi- 3. All financial data are as of December 31, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 453 offices in 44 states. CIT's factoring, consumer finance, considered the financial and managerial resources of commercial and industrial finance, mortgage banking, Manufacturers Hanover Corporation, including its sales financing, credit servicing, leasing, industrial capital position and data on its domestic and foreign banking, credit-related life, accident and health, and loan portfolio, and the effect on these resources of the disability insurance agency, and community develop- proposed acquisition of CIT. The Board has stated and ment activities have been determined by the Board to continues to believe that capital adequacy is an espebe closely related to banking and are permissible for cially important factor in the analysis of bank holding bank holding companies.4 company expansion proposals, particularly where sig- As discussed below, the Board also concludes that nificant acquisitions are proposed or where the organi- Applicant may, under section 225.25(b)(8)(i) of Regu- zation has a significant loan exposure. In evaluating lation Y and section 4(c)(8)(D) of the Act, sell property capital, the Board will consider, among other factors, and casualty insurance in connection with extensions the implications of a significant level of intangible of credit by consumer finance subsidiaries of CIT in assets, including that arising from a proposed expanthe 27 states in which the consumer finance subsidiary sion. The Board will also consider the capitalization of of Applicant is authorized to conduct this activity and the acquired company—relative to the accepted norm in other states up to the limits specified in section for companies in the same industry—and whether that 4(c)(8)(B) of the Act. Finally, the Board concludes that capitalization is adequately reflected in the consolidat- CIT's tuition budget plan, under which CIT receives ed primary capital of the applicant. periodic payments from parents of students and dis- While the Board notes that there is a material burses the funds received to designated educational amount of intangible assets involved in this acquisition institutions as tuition bills come due, is closely related and that finance companies are normally more highly to banking and a proper incident thereto because it is capitalized than banks, the Board believes that this operationally and functionally equivalent to an escrow proposal meets acceptable standards in light of the account or bill payment service commonly provided steady and substantial improvement in Applicant's by banking institutions. capital ratios and its plans for still further strengthen- In acting on an application under section 4(c)(8) of ing of its capital position. The Board notes that, in the Act, the Board must consider whether Applicant's connection with the proposed acquisition, Applicant performance of the proposed activities "can reason- has committed to raise more than $500 million of ably be expected to produce benefits to the public, additional primary capital; and in fact has already such as greater convenience, increased competition, raised approximately $200 million in common stock or gains in efficiency, that outweigh possible adverse since year-end 1983. Substantially all of the balance of effects, such as undue concentration of resources, this capital commitment will be raised simultaneously decreased or unfair competition, conflicts of interest, with consummation of this proposal. Moreover, subseor unsound banking practices." This consideration quent to year-end 1983, Applicant raised an additional also requires an evaluation of the financial and mana- $100 million in equity commitment notes. Upon congerial aspects associated with the proposal. 12 CFR summation of this transaction, Applicant's pro forma § 225.24. capital position will be significantly above the minimum ratio for multinational organizations. Further- Financial Factors. The Board views with concern any more, Applicant has committed to maintain its capital proposal involving a major expenditure of funds for position at at least this level and has presented the expansion that could limit a bank holding company's Board with a plan under which Applicant will take ability to serve as a source of strength to its subsidiary steps toward a significant further strengthening of its banks, particularly its ability to raise new equity capital position. capital to deal with unforeseen difficulties. Thus, in The Board also notes that CIT is a strong domestic evaluating this application, the Board has carefully competitor in a number of product lines and that its financial and managerial resources and future prospects are satisfactory, as indicated by CIT's historic above average capital position and earnings record. While the investment is not without risk in view of the 4. 12 CFR § 225.25(b)(1), (2), (5), (6), and (8). CIT currently is the growing competition in the financial services markets owner-lessor under 13 personal property leases that do not conform to the requirements of section 225.25(b)(5) of the Board's Regulation Y. served by CIT, the Board believes that, on balance, These leases represented a total investment of approximately $9 the acquisition of CIT by Applicant should strengthen million as of October 31, 1983, and the latest termination date of these and result in a desirable diversification of Applicant's leases is year-end 1987. Applicant has committed that, in the event of Board approval of the proposed acquisition, Applicant would conform overall financial resources. The Board also notes that these leases to the requirements of Regulation Y by year-end 1987 and the financing for the proposed acquisition is made up would limit the future leasing activities of CIT and its subsidiaries to in large part by the issuance to the seller of new leases that conform to the requirements of the Board's Regulation Y. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

454 Federal Reserve Bulletin • May 1984 primary capital of Applicant and acquisition debt that that the relevant geographic market for consumer has been structured to minimize future financing finance activities is approximated by the local banking risks.5 market and the relevant product market is the making Taking into account these factors and all of the facts of personal cash loans.7 Consumer finance subsidiarof record, the Board concludes that any adverse ies of Applicant and CIT compete with each other in 83 effects of consummation of this proposal on the finan- local banking markets in 31 states. In all but five of cial and managerial resources of Applicant would not these markets, the market share of Applicant and CIT be significant and that consummation of this proposal is small and their combined market share would be less would be consistent with the Board's policy that a than 10 percent. bank holding company maintain its ability to serve as a The five markets in which Applicant's and CIT's source of financial strength to its subsidiary banks. combined market share would exceed 10 percent are the metropolitan New York market; Tampa, Florida; Competitive Considerations. Applicant and CIT are Houma, Louisiana; Charleston, South Carolina; and both among the nation's largest providers of financial Danville, Virginia, markets. The metropolitan New services to individuals and businesses and both offer York market and the Tampa, Florida market are consumer finance, factoring, commercial finance, and unconcentrated, and CIT's market share in consumer leasing products and services within national, region- finance activities in each of these two markets is less al, and local geographic markets. Applicant is the fifth than one percent. In the other three markets, the largest factor in the United States, with 6.1 percent of combined market share for Applicant and CIT would the national market.6 CIT ranks as the largest factor in be 16.5 percent, 18.8 percent, and 12.0 percent, rethe nation, controlling 15.6 percent of the national spectively. However, each of these three markets is factoring market. The market for factoring is uncon- unconcentrated and would remain unconcentrated afcentrated, with a Herfindahl-Hirshman Index ("HHI"), ter consummation of the proposal, with an HHI below upon consummation of the proposed acquisition, of 600 after giving effect to the proposed acquisition in only 819 and a four-firm concentration ratio of 44.7 each of these markets. In each of the 83 markets in percent. Moreover, there are a large number of exist- which Applicant and CIT compete, there are a large ing and potential competitors in the factoring business. number of existing and potential competitors. The Applicant also engages in leasing real and personal Board also notes that in many of these markets the property, and is the second largest leasing firm in the consumer finance activities of CIT primarily involve nation, with approximately 1.7 percent of the nation- mobile home and home equity financing, while the wide leasing business. CIT is the 13th largest leasing consumer finance activities of Applicant involve prifirm in the nation, controlling only 0.4 percent of the marily making personal cash loans. nationwide leasing business. The market for the leas- While Applicant and CIT also both engage in morting activities of Applicant and CIT is unconcentrated gage banking, community development, and creditwith an HHI below 50; and there are also numerous related insurance activities, the relevant market shares existing and potential competitors in the leasing busi- of Applicant and CIT are not significant. Based upon ness. the foregoing and all of the facts of record, the Board Applicant and CIT both engage in various commer- concludes that consummation of the proposal will not cial finance company activities throughout the United have any significant adverse effects on existing or States. The geographic market for this activity is potential competition in any relevant product line or regional in scope, and the combined market shares of geographic market. Applicant and CIT in each of the regions where they both compete is less than 4 percent. Moreover, there Concentration of Resources. This proposal would are numerous existing and potential competitors in result in the affiliation of one of the nation's largest these markets. commercial banking organization with one of the na- Applicant and CIT also both engage in consumer tion's larger finance companies. Accordingly, the finance activities in numerous markets throughout the Board has considered whether the proposal would United States. The Board has previously determined result in an undue concentration of resources in the financial services industry or in any relevant line of commerce, particularly in the provision of nationwide factoring and consumer finance services. The financial 5. Applicant has financed $800 million of the purchase price in fixed rate debt held by the seller. 6. The Board has previously determined that the factoring market is a nationwide market. Barclays Bank Limited, 66 FEDERAL RESERVE 7. See, e.g., Norwest Bancorporation, 68 FEDERAL RESERVE BUL- BULLETIN 980 (1980). LETIN 519, 520 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 455 services industry in general and each of the product holding company or any of its subsidiaries on May 1, lines in which CIT and Applicant specifically compete 1982. Under this exemption, Applicant's consumer are highly competitive. Moreover, the barriers to entry finance subsidiary, Manufacturers Hanover Financial in each of these product lines are not substantial, and Services, Inc. ("MHFS"), may sell credit-related there are, as noted above, a large number of potential property and casualty insurance at any location in 27 entrants into each activity. The Board also notes that, states: the 22 states in which MHFS engages in that while this proposal would result in Applicant becom- activity and was so engaged on May 1, 1982, the ing one of the larger competitors in several product grandfather date,8 as well as in New York, Applicant's lines, there will remain numerous other large and home state, and the states adjacent to New York. capable competitors in each of these product lines, It is clear from the terms and legislative history of including some of the largest business organizations in this exception (section 4(c)(8)(D) of the Act) that, if the country. Accordingly, based on all the facts of MHFS were to acquire CIT's consumer finance offices record, the Board believes that the proposed acquisi- in these 27 states, MHFS would not be prohibited by tion will not result in an undue concentration of the Garn-St Germain Act from selling credit-related resources. property and casualty insurance at these offices. The Board does not believe that a different result should Permissibility of credit-related property and casualty pertain where the parent holding company of the insurance activities. Applicant seeks authority for CIT grandfathered subsidiary acquires these same offices to engage in the sale of credit-related property and directly, as is proposed in this case. There is no casualty insurance through CIT's consumer finance increase in the number of states in which the grandsubsidiaries. In 1972, the Board determined that the fathered activity is conducted, nor is the grandfathered sale by a bank holding company of property and activity being extended to a subsidiary engaged in a casualty insurance to protect collateral securing an different activity. Property and casualty insurance will extension of credit by a subsidiary of the bank hold- be sold only in connection with extensions of credit by ing company was closely related to banking and per- CIT's consumer finance subsidiaries. In this connecmissible for bank holding companies. 12 CFR tion, the Board notes that the Conference Report §§ 225.25(b)(8) and 225.128. However, the Garn-St regarding Title VI of the Garn-St Germain Act states Germain Depository Institutions Act of 1982 ("Garn- that "nothing in this title is intended to prevent the St Germain Act") provided that the sale of credit- transferring of grandfathered insurance activities of a related property and casualty insurance was not close- bank holding company to the parent or any of its ly related to banking except under certain specified subsidiaries if the transferral is brought about for circumstances. management or efficiency purposes." H. Rep. No. 97- Under one of these exceptions, a finance company 899, 97th Cong., 2d Sess. 91 (1982). Accordingly, the subsidiary may act as agent or broker for property and Board concludes that Applicant may engage through casualty insurance directly related to an extension of CIT's consumer finance subsidiaries in the sale of credit by the finance company of not more than credit-related property and casualty insurance at any $10,000 ($25,000 for mobile home loans) (12 U.S.C. location within the 27 states in which MHFS may § 1843(c)(8)(B)). Accordingly, consistent with the engage in that activity. Garn-St Germain Act and the Board's Regulation Y, The Applicant claims that, in addition to these 27 the Board concludes that Applicant may sell credit- states, CIT may sell credit-related property and casurelated property and casualty insurance at CIT's con- alty insurance in any other of the remaining 23 states sumer finance subsidiaries subject to these dollar under section 4(c)(8)(D) of the BHC Act because a limitations at any geographic location in the country. mortgage banking subsidiary of Applicant sold credit- CIT currently provides property and casualty insur- related life insurance throughout the United States on ance related to extensions of credit in excess of the May 1, 1982. CIT currently sells credit-related properdollar limits stipulated in the finance company excep- ty and casualty insurance in 15 of these 23 states. tion. Accordingly, Applicant seeks a Board ruling that Applicant's claim raises several issues concerning the CIT's consumer finance offices may continue to sell scope of the exemption provided in section 4(c)(8)(D), credit-related property and casualty insurance in reli- issues that the Board has specifically requested public ance on the grandfather rights of Applicant's existing comment on in connection with its March 2, 1984 consumer finance subsidiary under another section of the Garn-St Germain Act (12 U.S.C. § 1843(c)(8)(D)). This exception, codified in section 4(c)(8)(D) of the Bank Holding Company Act, provides an exception to 8. These states are Alabama, Arizona, California, Colorado, Florida, Georgia, Indiana, Kansas, Louisiana, Maryland, Mississippi, the insurance prohibitions of the Garn-St Germain Act Missouri, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, for insurance agency activities engaged in by a bank South Carolina, Tennessee, Texas, Washington, and West Virginia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

456 Federal Reserve Bulletin • May 1984 notice of rulemaking regarding that section. (49 Feder- The financial and managerial resources of Manufacal Register 9215 (March 12, 1984)). The Board believes turers Hanover Corporation are also consistent with it appropriate to defer ruling on Applicant's claim until approval of the applications under the Edge Act. The the conclusion of that rulemaking, and Applicant has Board has also considered the notice of Applicant's agreed to conform its activities to the results of the proposed investment in CIT International Sales Corrulemaking and not to expand CIT's existing credit- poration under section 4(c)(14) of the Bank Holding related property and casualty activities during the Company Act. Based on the facts of record, including pendency of the rulemaking other than as authorized the capital to assets ratio of the export trading compaby this Order. For these same reasons, the Board has ny, the Board has determined that disapproval of the determined to consider in the context of the Board's proposed investment is not warranted. general rulemaking regarding the extent of permissible Based on the foregoing and all the facts of record, insurance activities under the Garn-St Germain Act the Board has determined that these applications whether Applicant may act as agent for noncredit- should be, and hereby are, approved. These transacrelated life insurance sold in connection with CIT's tions shall not be consummated later than three tuition budget plan. months after the effective date of this Order unless the Based on all the facts of record, the Board believes period for consummation is extended for good cause that consummation of the proposal would not result in by the Board or by the Federal Reserve Bank of New conflicts of interests, unsound banking practices, un- York under delegated authority. This determination is fair competition or other adverse effects on the public subject to the conditions stated herein as well as all of interest. Applicant has stated that it will provide the conditions set forth in Regulation Y, including support, encouragement, and resources to CIT to sections 225.4(d) and 225.23(b), and to the Board's enable CIT to expand its existing operations and authority to require such modification or termination develop new products, including the expansion of of the activities of a holding company or any of its CIT's lending products in both commercial and con- subsidiaries as the Board finds necessary to assure sumer markets, thereby enabling CIT to offer a more compliance with, or to prevent evasion of, the provicomplete range of services to its customers. More- sions and purposes of the Act and the Board's regulaover, Applicant expects that this acquisition will en- tions and orders issued thereunder. hance the ability of both Applicant and CIT to com- By order of the Board of Governors, effective pete more aggressively in the consumer finance area as April 24, 1984. well as in providing credit to small and medium sized businesses. In this regard, Applicant has informed the Voting for this action: Chairman Volcker, and Governors Board that it intends to reverse the recent withdrawal Martin, Wallich, Partee, Rice, and Gramley. Governor Wallich abstained from the insurance portions of this application. by CIT from small cash consumer lending and instead, Absent and not voting: Governor Teeters. with the assistance of subsidiaries of Applicant that currently conduct an extensive direct cash loan busi- JAMES MCAFEE, ness, expand the direct cash personal loan business of [SEAL] Associate Secretary of the Board CIT. Applicant also states that, with its support, CIT will expand its other consumer lending products, such as home equity financing, mortgage loans, and other Union Financial Corporation secured and nonsecured credit facilities of CIT, as well Manhattan, Kansas as continue to supply credit needs in the larger item sales finance market. This should increase competition Order Approving Application to Engage in Lending, and benefit the customers of both Applicant and CIT. Loan Servicing, and Insurance Activities In addition, Applicant intends to combine its own expertise and extensive international contacts with the Union Financial Corporation, Manhattan, Kansas, a extensive contacts of CIT with domestic manufactur- bank holding company within the meaning of the Bank ers in order to expand exports of these manufacturers Holding Company Act (12 U.S.C. §§ 1841 et seq.), has through a CIT export trading company as well as applied for the Board's approval pursuant to section through other facilities of Applicant. Applicant also 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section anticipates that consummation of this proposal will 225.21(a) of the Board's Regulation Y (12 CFR increase operational and management efficiency §225.21(a)), to acquire 50 percent of the voting shares through the consolidation of operations and support of UNIFI, Manhattan, Kansas. The remaining 50 perfacilities. Accordingly, the Board concludes that the cent of UNIFI would be held by Professional Services, balance of public interest factors that it must consider Inc., Manhattan, Kansas ("PSI"). UNIFI proposes to under section 4(c)(8) of the Act is consistent with serve the credit needs of medical and other professionapproval of this proposal. als by engaging de novo in the activities of directly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 457 extending credit to professionals, billing their accounts Applicant engages through Bank in lending and loan and notes, purchasing their notes payable at a dis- servicing activities in the Riley County, Kansas, bankcount, collecting accounts and notes that were ser- ing market. PSI is not engaged in lending activities. viced or held by UNIFI prior to their delinquency, and Although PSI does currently engage in loan servicing, acting as agent for the sale of credit life, accident and PSI does not service the same base of customers that health insurance directly related to UNIFI's exten- Bank serves. Furthermore, PSI's nationwide service sions of credit.1 These activities have been determined area is much larger than Bank's limited service area by the Board to be closely related to banking and around Manhattan, Kansas. As mentioned above, all permissible for bank holding companies. (12 CFR of PSI's loan servicing activities would be transferred §§ 225.25(b)(1), (8)(i)). to UNIFI upon consummation of the proposal. Appli- Notice of the application, affording interested per- cant estimates that less than one percent of UNIFI's sons an opportunity to submit comments, has been business would be originated from Bank's service area duly published (48 Federal Register 56851 (1983)). The in and around Manhattan, Kansas. Accordingly, contime for filing comments has expired, and the Board summation of this proposal would have no significant has considered the application and all comments re- effects upon existing competition in any relevant ceived in light of the public interest factors set forth in market. section 4(c)(8) of the Act. With respect to potential competition, although Ap- Applicant controls one bank, Union National Bank plicant and PSI could presumably engage in all of the and Trust Company, Manhattan, Kansas ("Bank"), proposed activities alone (and PSI is, in fact, currently which holds total deposits of $79.0 million, represent- engaged in loan servicing activities) the Board , does ing 0.5 percent of the total deposits in commercial not consider Applicant to be a likely independent banks in the state.2 Bank operates in the Riley County entrant into the specialized field of providing credit banking market,3 where it is the second largest of and credit services to professionals, given the fact that seven commercial banking organizations, controlling Applicant does not have a sufficient customer base to 29.7 percent of the total deposits in commercial banks justify the cost of independent entry into these activiin the relevant market. Applicant has no nonbanking ties.6 The Board does not consider PSI to be a likely subsidiaries. PSI, which has total assets of only independent entrant into the business of providing $11,000 as of August 31, 1983, is currently engaged in credit to professionals because of its small size and loan servicing activities for professionals throughout lack of access to additional capital resources through the United States. Upon consummation of this propos- which it could extend credit. In addition, because al, PSI would transfer its loan servicing activities to barriers to entry into the lending and loan servicing UNIFI.4 businesses are low, there are numerous potential entrants into the market. The loss of Applicant or PSI as This proposal involves a de novo acquisition and a potential entrant, therefore, would have little effect normally consummation of the transaction would not on potential competition in the market. Accordingly, have any adverse effects upon either existing or potenthe Board concludes that consummation of the protial competition. However, in view of the fact that the posed joint venture would not significantly decrease proposal involves the use of a joint venture between a competition in any market. bank holding company and a nonbanking company, the Board has analyzed the proposal with respect to its Consummation of the proposal may be expected to effects on existing and potential competition between result in public benefits inasmuch as UNIFI, a de novo Applicant and PSI in the relevant lending, loan servic- corporation, would allow for the continued availability ing, and insurance markets.5 of the services now offered by PSI and would provide an additional and convenient source of credit for professionals. The financial and managerial resources of Applicant, Bank, and UNIFI are considered satis- 1. UNIFI will not sell credit-related insurance in connection with factory, and there is no evidence in the record to loans that it merely services. The sale of such insurance does not appear to be permissible under Title VI of the Garn-St. Germain Act indicate that consummation of the proposal would of 1982 (12 U.S.C. § 1843(c)(8)(A)). result in undue concentration of resources, unfair 2. All banking data are as of June 30, 1983. competition, conflicts of interests, unsound banking 3. The Riley County banking market is approximated by Riley County, Kansas. practices, or other adverse effects on the public in- 4. After consummation of the proposal, PSI would have no remain- terest. ing operating function, except for a contact lens sales and service program that is currently in its developmental stages. 5. The Board has previously expressed concerns regarding the potential for undue concentration of resources or other adverse effects that result through the combination in a joint venture of banking and 6. See, Southern Bancorporation, Inc., 69 FEDERAL RESERVE nonbanking institutions. Deutsch Bank AG, 67 FEDERAL RESERVE BULLETIN 224 (1983); Florida Coast Banks, Inc., 68 FEDERAL RE- BULLETIN 449 (1981); BankAmerica Corporation, 60 FEDERAL RE- SERVE BULLETIN 781 (1982); and Svenska Handelsbanken, 68 FEDER- SERVE BULLETIN 517 (1974). AL RESERVE BULLETIN 788 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

458 Federal Reserve Bulletin • May 1984 Based on the foregoing and other facts of record, the Cedar Hill National Bank, Cedar Hill, Texas; NBC Board concludes that the balance of the public interest Bancshares, Inc., Austin, Texas ("NBC"), and indifactors it must consider under section 4(c)(8) of the rectly, its two subsidiary banks, National Bank of Act favors approval of the application. Accordingly, Commerce, Austin, Texas, and National Bank of the Board has determined that the application should Commerce-South, Austin, Texas; Collin Creek Bank, be and hereby is approved. This determination is N.A., Piano, Texas ("Collin"); and Allied Bank North subject to all the conditions set forth in the Board's Central, N.A., Dallas, Texas, ("Allied Bank"), a Regulation Y, including those in sections 225.4(d) and de novo bank. 225.23(b), and to the Board's authority to require such Applicant has also applied for the Board's approval modification or termination of the activities of a bank under section 4(c)(8) of the Act (12 U.S.C. holding company or any of its subsidiaries as the § 1843(c)(8)) and section 225.23(a) of the Board's Board finds necessary to assure compliance with the Regulation Y (12 CFR § 225.23(a)), to establish Allied provisions and purposes of the Act and the Board's Bancshares Leasing Company, Houston, Texas ("Alregulations and orders issued thereunder, or to pre- lied Leasing"), a de novo company which will engage vent evasion thereof. in leasing real and personal property. This activity has The transaction shall be consummated not later than been determined by the Board to be closely related to three months after the elfective date of this Order, banking and permissible for bank holding companies unless such period is extended for good cause by the (12 CFR § 225.25(b)(5)). Board or by the Federal Reserve Bank of Kansas City, Notice of the applications, affording opportunity for acting pursuant to delegated authority. interested persons to submit comments, has been By order of the Board of Governors, effective given in accordance with sections 3 and 4 of the Act April 23, 1984. (48 Federal Register 50615 (November 2, 1983)). The time for filing comments has expired, and the Board Voting for this action: Vice Chairman Martin and Gover- has considered the applications and all comments nors Wallich, Partee, Rice, and Gramley. Governor Wallich received in light of the factors set forth in section 3(c) abstained from the insurance portion of this application. of the Act (12 U.S.C. § 1842(c)) and the considerations Absent and not voting: Chairman Volcker and Governor specified in section 4(c)(8) of the Act. Teeters. Applicant proposes to acquire Texas United and NBC through their merger into Allied Fort Worth JAMES MCAFEE, Bancshares, Inc., Houston, Texas, and Allied Austin [SEAL) Associate Secretary of the Board Bancshares, Inc., Austin, Texas, respectively, newly established, wholly owned subsidiaries of Applicant. Both mergers are to be accomplished through an Orders Issued Under Sections 3 and 4 of Bank exchange of shares without Applicant assuming or Holding Company Act incurring additional debt. Applicant proposes to acquire Collin through a cash purchase of $4.9 million. Allied Bancshares, Inc. Applicant, the seventh largest banking organization Houston, Texas in Texas, controls 48 banking subsidiaries with aggregate deposits of $5.3 billion, representing 4.43 percent Order Approving Acquisition of Bank Holding of the total deposits in commercial banks in Texas.1 Companies, Banks and a Company to Engage in Texas United is the 39th largest banking organization Leasing Personal and Real Property in Texas, controlling aggregate deposits of $198.7 million, representing 0.16 percent of the total deposits Allied Bancshares, Inc., Allied Fort Worth Banc- in commercial banks in the state. NBC is the 426th shares, Inc., and Allied Austin Bancshares, Inc., all of largest banking organization in Texas, controlling ag- Houston, Texas (together referred to as "Applicant"), gregate deposits of $32.9 million, representing 0.03 bank holding companies within the meaning of the percent of the total deposits in commercial banks in Bank Holding Company Act ("Act") (12 U.S.C. § 1841 Texas. Collin is the 975th largest banking organization et seq.), have applied for the Board's approval under in Texas with aggregate deposits of $8.0 million, section 3 of the Act to acquire: Texas United Bancorp, representing 0.01 percent of the total deposits in Inc., Fort Worth, Texas ("Texas United"), and indi- commercial banks in Texas. rectly, its five subsidiary banks, Northeast National Bank of Fort Worth, Richland Hills, Texas, First State Bank, Bedford, Texas, American National Bank of Dallas, Texas, Northwest Bank, Roanoke, Texas, and 1. All banking data are as of December 31, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 459 Upon consummation of the proposed transaction, zations with 0.98 percent of deposits in commercial Applicant will control approximately $5,548 billion in banks in the market. Applicant's closest subsidiary is deposits, constituting approximately 4.63 percent of located in a separate banking market 40 miles from deposits in commercial banks in the state. In view of Austin. This acquisition would not result in significant the small increase in Applicant's share of deposits in adverse effects on potential competition within this commercial banks in the state and the fact the Appli- market because the Austin market is not highly concant's rank in the state will remain the same upon centrated under the Board's Guidelines. consummation of the proposed acquisitions, the Board Collin competes in the Dallas, Texas, banking marconcludes that the proposed acquisitions would have ket, where it is the 106th largest banking organization no adverse effects on the concentration of banking with 0.03 percent of deposits in commercial banks in resources in Texas. the market. Applicant's closest subsidiary is Allied Texas United currently operates in both the Dallas, Lakewood Bank located approximately 16 miles from Texas, and Fort Worth, Texas, banking markets.2 In Collin. Consummation of this proposal and the prothe Dallas market, Texas United operates two subsid- posed acquisition of Texas United would increase iary banks and ranks 76th of the 133 banking organiza- Applicant's share of the Dallas market to 2.46 percent. tions in the market. Its subsidiary banks hold $18.5 Applicant has also applied for approval to establish million in deposits, which represent 0.07 percent of Allied Bank , a de novo bank, with an initial capitalizatotal deposits in commercial banks in the market. tion of $1.5 million. The establishment of Allied Bank Applicant, the eighth largest banking organization in is procompetitive and should increase competition in the Dallas market, operates six subsidiary banks that the Dallas banking market. hold $593.8 million in deposits, representing 2.36 per- Based on the record as a whole, the Board concent of total deposits in commercial banks in the cludes that the proposed acquisition of Texas United, market. NBC, Collin and Allied Bank would not have any In the Fort Worth banking market, Texas United significantly adverse effects on existing or potential operates three subsidiary banks, and ranks seventh of competition, or on the concentration of banking rethe 43 banking organizations in the market. Texas sources in any relevant market. United's subsidiary banks hold $180.1 million in mar- The financial and managerial resources and future ket deposits, representing 2.86 percent of the total prospects of Applicant and the organizations to be deposits in commercial banks in the market. Because acquired are considered generally satisfactory. Based Applicant is not currently represented in the Fort on all the facts of record, the Board believes that Worth banking market, this acquisition would produce banking factors are consistent with approval of these no significant adverse effect on existing competition applications. Considerations relating to the convewithin this market. The Forth Worth banking market is nience and needs of the community to be served also not highly concentrated under the Board's proposed are consistent with approval. Potential Competition Guidelines, and, accordingly, Applicant proposes to engage through Allied Leasthis acquisition would not result in any significant ing in the leasing of real and personal property on a full adverse effects on potential competition in this mar- payout basis, and will have its principal place of ket. business and operations in Texas. Other geographic NBC competes in the Austin, Texas, banking mar- areas to be served include Arkansas, California, Louiket3, where it is the 12th largest of 24 banking organi- siana, Oklahoma and New Mexico. There is no evidence in the record to indicate that approval of this proposal would result in undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices or other adverse effects on the public interest. Accordingly, the Board 2. The Dallas banking market is approximated by Dallas County, has determined that the balance of the public interest the southeast quadrant of Denton County (including Denton and Lewisville), the southwest quadrant of Collin County (including factors it must consider under section 4(c)(8) of the McKinney and Piano), the northern half of Rockwall County, the Act is favorable and consistent with approval of the communities of Forney and Terrell in Kaufman County, Midlothian, application. Waxahatchie, and Ferris in Ellis County, and Grapevine and Arlington in Tarrant County. Based on the foregoing and facts of record, the The Fort Worth banking market is approximated by Tarrant County Board has determined that the applications under excluding Grapevine and Arlington, the community of Cleburne in Johnson County, the eastern half of Parker County (including Weath- sections 3 and 4 of the Act should be and are hereby erford and Springtown), the communities of Boyd and Rhome in Wise approved. The acquisition of the bank holding compa- County, and the community of Roanoke in Denton County. nies and the banks shall not be made before the 3. The Austin banking market is approximated by the Austin, Texas RMA. thirtieth calendar day following the effective date of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

460 Federal Reserve Bulletin • May 1984 this Order. The acquisition of the bank holding compa- following nonbanking subsidiaries of Liberty, all in nies and the banks and the acquisition of the leasing Oklahoma City: Liberty Financial Corporation, which subsidiary shall be consummated not later than three originates and services mortgages and provides conmonths after the effective date of this Order, unless the struction financing secured by real estate; Liberty period is extended for good cause by the Board or by Mortgage Company, which originates and services the Federal Reserve Bank of Dallas, pursuant to mortgages, services non-mortgage loans and extendelegated authority. sions of credit, and sells credit life insurance directly The determination as to Applicant's leasing activi- related to extensions of credit by Liberty and its ties are subject to the conditions set forth in Regula- subsidiaries; Mid-America Leasing Corporation, tion Y, including section 225.4(d) and 225.23(b), and to which leases personal property and equipment; Midthe Board's authority to require such modification or America Credit Life Assurance Company, which untermination of the activities of a holding company or derwrites credit life and credit accident and health any of its subsidiaries as the Board finds necessary to insurance directly related to extensions of credit by assure compliance with the provisions and purposes of Liberty and its subsidiaries; and Mid-America Insurthe Act and the Board's regulations and orders issued ance Agency, Inc., which provides insurance agent or thereunder, or to prevent evasion thereof. broker services for Liberty and its subsidiaries. In By order of the Board of Governors, effective addition, Applicant has applied to continue the direct April 23, 1984. lending activities previously approved by the Board for Liberty. Voting for this action: Vice Chairman Martin and Gover- Applicant also has applied to acquire the following nors Wallich, Partee, Rice, and Gramley. Absent and not nonbanking subsidiaries of First Tulsa, all in Tulsa: voting: Chairman Volcker and Governor Teeters. Firstul Leasing and Financial Company, which leases personal property, automobiles, and equipment; Fir- JAMES MCAFEE, stul Mortgage Company, which originates and services [SEAL] Associate Secretary of the Board mortgage loans and provides construction financing; Financial Loan and Investment Company, which engages in consumer finance activities; and Irwin Securi- Banks of Mid-America, Inc. ties, Inc., which provides securities brokerage ser- Oklahoma City, Oklahoma vices solely on the order and for the account of customers. These activities have been determined by Order Approving Consolidation of Bank Holding the Board to be closely related to banking (12 CFR Companies and Acquisition of Companies Engaged § 225.25(a)(1), (5), (8), (9), and (15)). in Mortgage Lending, Insurance, Leasing, Notice of these applications, affording opportunity Commercial Lending, Financing, and Securities for interested persons to submit comments and views, Brokerage Activities has been given in accordance with sections 3 and 4 of the Act (48 Federal Register 55175 (1983)). The time Banks of Mid-America, Inc., Oklahoma City, Oklaho- for filing comments and views has expired, and the ma, has applied for the Board's approval under section Board has considered the applications and all com- 3 of the Bank Holding Company Act of 1956, as ments received in light of the factors set forth in amended ("Act") (12 U.S.C. § 1842), to become the section 3(c) of the Act (12 U.S.C. § 1842(c)) and the successor through consolidation of Liberty National considerations specified in section 4(c)(8) of the Act. Corporation, Oklahoma City, Oklahoma ("Liberty"), Liberty, the second largest commercial banking and First Tulsa Bancorporation, Inc., Tulsa, Oklaho- organization in Oklahoma, controls one subsidiary ma ("First Tulsa"), both bank holding companies bank with total deposits of $1.7 billion, representing within the meaning of the Act. This proposal would 6.8 percent of the total deposits in commercial banks result in the indirect acquisition by Applicant of Liber- in the state.1 First Tulsa, the fourth largest commercial ty National Bank and Trust Company, Oklahoma City, banking organization in Oklahoma, controls one sub- Oklahoma ("Liberty Bank"), and the First National sidiary bank with total deposits of $1.05 billion, repre- Bank and Trust Company of Tulsa, Tulsa, Oklahoma senting 4.2 percent of the total deposits in commercial ("Tulsa Bank"). Applicant would thereby become a banks in the state. Upon consolidation, Applicant bank holding company. would control 11 percent of total deposits in commer- In addition, Applicant has applied for the Board's approval under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(2) of the Board's Regulation Y (12 CFR § 225.23(a)(2)) to acquire the 1. All banking data are as of December 31, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 461 cial banks in Oklahoma and would become the largest total deposits in commercial banking organizations in commercial banking organization in the state.2 the market. The Oklahoma City banking market is not The Board has carefully considered the effects of the highly concentrated; the three largest commercial proposal on statewide banking structure and on com- banking organizations control only 53.6 percent of petition in the relevant markets. This proposal in- total deposits in commercial banks in the market. volves the consolidation of two of the largest banking Moreover, the record indicates a trend toward deconorganizations in Oklahoma. In terms of concentration centration of banking resources in the market. In of deposits in commercial banks, however, Oklahoma addition, the Oklahoma City banking market contains is and would remain upon consummation of this pro- 14 savings and loan associations ("thrifts") that conposal one of the least concentrated states in the United trol 14.7 percent of total deposits in commercial banks States. The four largest banking organizations in Okla- and thrifts in the market. homa control 27.3 percent of the total deposits in First Tulsa is the second largest commercial banking commercial banks in the state; this figure would in- organization in the Tulsa banking market, and its one crease to only 29.1 percent upon consummation of this banking subsidiary controls 19.9 percent of total detransaction. Accordingly, it is the Board's view that posits in commercial banks in the market. The Tulsa the proposed consolidation would not have a signifi- banking market is not highly concentrated; the three cantly adverse effect on the concentration of banking largest commercial banking organizations control only resources in Oklahoma. 56 percent of total deposits in commercial banks in the Liberty's banking subsidiary operates in the Okla- market. Furthermore, the record indicates a trend homa City banking market,3 while First Tulsa's bank- toward deconcentration of banking resources in the ing subsidiary operates in the Tulsa banking market.4 market. In addition, there are 11 thrifts in the Tulsa Inasmuch as the banking subsidiaries of Liberty and banking market that control 21.8 percent of total First Tulsa do not compete in the same banking deposits in commercial banks and thrifts in the market. markets, consummation of the proposal would not In its evaluation of the competitive aspects of this eliminate any existing competition. case, particularly with respect to potential competition The Board has considered the effects of this propos- in the relevant markets as well as the state, the Board al on probable future competition in the Oklahoma has considered that there are only a few banking City and Tulsa markets and also has examined the organizations in the state with resources comparable proposal in light of the Board's proposed guidelines for to those of Liberty and First Tulsa so as to make them assessing the competitive effects of market-extension likely entrants into these markets, the largest—in mergers or acquisitions.5 In evaluating the effects of a terms of deposits and business activity—in the state. proposed merger or consolidation on probable future However, the Board's concern is alleviated by the fact competition, the Board considers market concentra- that these markets are not highly concentrated. Theretion, the number of probable future entrants into the fore, on balance, the Board concludes that consummamarket, the size of the bank to be acquired, and the tion of this proposal would not have significant adattractiveness of the market for de novo or foothold verse effects on probable future competition in any entry. relevant market. Liberty is the second largest commercial banking The Board views with concern any decline in capital organization in the Oklahoma City banking market, resulting from the combination of banking organizaand its one banking subsidiary controls 19.5 percent of tions such as would occur in this case. In its evaluation of the banking factors in this case, the Board has taken particular note that, in spite of the decline in capital resulting from the proposal, the pro forma capital 2. Oklahoma bank holding company law (Okla. Stat. Ann. tit. 6, § 502(D) (West 1983)) prohibits a bank holding company from acquir- position of Banks of Mid-America would nevertheless ing any federally insured financial institution if such acquisition would remain relatively high. The Board also has noted that result in control of more than 11 percent of the total deposits in Applicant would have substantial cash resources that Oklahoma of all federally insured financial institutions, including savings and loan associations and credit unions. Since Applicant would be maintained as a cushion to meet possible would not control more than 11 percent of the total deposits in the future needs and has relied on certain commitments state's federally insured financial institutions, the proposed acquisirelative to maintenance of capital ratios, liquidity, and tions are consistent with Oklahoma law. 3. The Oklahoma City banking market is defined as the Oklahoma management. Based on these and other facts of re- City Ranally Metropolitan Area. cord, including the current financial condition of the 4. The Tulsa banking market is defined as the Tulsa Ranally banks concerned, the Board concludes that the finan- Metropolitan Area. 5. 47 Federal Register 9017 (March 3,1982). Although the proposed cial and managerial resources and future prospects of policy statement has not been adopted by the Board, the Board is Applicant, Liberty Bank, and Tulsa Bank are consisusing the policy guidelines in its analysis of the effects of a proposal on tent with approval of these applications. Considerprobable future competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

462 Federal Reserve Bulletin • May 1984 ations relating to the convenience and needs of the Dissenting Statement of Governor Wallich communities to be served also are consistent with approval of the applications. I dissent from the Board's action regarding this appli- Applicant has also applied, pursuant to section cation. In my view, one of the most important justifi- 4(c)(8) of the Act, to acquire the nonbanking subsidiar- cations for combining two relatively large banks ies of Liberty and First Tulsa, which engage in mort- should be a combined organization that has a stronger gage lending, leasing, insurance, and securities broker- financial condition than either institution standing age activities. In addition, Applicant has applied to alone. In the manner structured, the proposal will continue the direct lending authority previously ap- reduce the existing capital of the two banking organiproved for Liberty. There is no evidence in the record zations. Even though the capital level of the resulting to indicate that approval of this proposal would result organization exceeds the Board's minimum standards, in undue concentration of resources, unfair competi- I believe it is inappropriate to permit this reduction in tion, conflicts of interest, unsound banking practices, capital, particularly in view of the fact that both banks or other adverse effects.6 Accordingly, the Board has recently experienced a sharp downturn in earnings. I determined that the balance of the public interest would have viewed the transaction favorably had it factors it must consider under section 4(c)(8) of the involved an exchange of common shares or had it been Act is favorable and consistent with approval. financed so that no net reduction in capital support Based on the foregoing and other facts of record, the would have resulted. Board has determined that the applications under For these reasons, I would deny the application. sections 3 and 4 of the Act should be and hereby are approved. The acquisition of Liberty Bank and Tulsa April 26, 1984 Bank shall not be consummated before the thirtieth day following the effective date of this Order. The Eagle Financial Services, Inc. acquisition of the banks and the nonbanking subsidiar- Northfield, Illinois ies shall not be consummated later than three months after the effective date of this Order, unless such E.F. Wonderlic Companies, Inc. period is extended for good cause by the Board or by Northfield Illinois the Federal Reserve Bank of Kansas City, pursuant to delegated authority. The approval of Applicant's pro- Order Approving Formation of Bank Holding posal to acquire the nonbanking activities of Liberty Companies and Acquisition of Companies Engaged and First Tulsa is subject to the conditions set forth in in Consumer and Commercial Lending and Loan Regulation Y, including sections 225.4(d) and Servicing Activities 225.23(b) (12 CFR §§ 225.4(d) and 225.23(b)), and to the Board's authority to require such modification or Eagle Financial Services, Inc., Northfield, Illinois termination of the activities of a holding company or ("Eagle"), has applied for the Board's approval under any of its subsidiaries as the Board finds necessary to section 3(a)(1) of the Bank Holding Company Act assure compliance with the provisions and purposes of (12 U.S.C. § 1842(a)(1)) ("Act") to become a bank the Act and the Board's regulations and orders issued holding company by acquiring 97.4 percent of the thereunder, or to prevent evasion thereof. voting shares of State Bank of Richmond, Richmond, By order of the Board of Governors, effective Illinois ("Bank"). In a related transaction, E.F. Won- April 26, 1984. derlic Companies, Inc., Northfield, Illinois ("Wonderlic"), a nonoperating corporation, has applied under Voting for this action: Chairman Volcker and Governors section 3(a)(1) of the Act to become a bank holding Martin, Partee, Rice, and Gramley. Voting against this ac- company by acquiring 100 percent of the voting shares tion: Governor Wallich. Governor Wallich abstained from the of Eagle and, thereby, indirectly to acquire Bank. insurance portion of these applications. Absent and not Together Eagle and Wonderlic are referred to as voting: Governor Teeters. Applicants. JAMES MCAFEE, [SEAL] Associate Secretary of the Board Wonderlic has also applied for the Board's approval under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) to acquire directly 100 percent of the voting shares of E.F. Wonderlic and Associates, Inc., 6. Liberty's mortgage banking subsidiaries, Liberty Financial Corporation and Liberty Mortgage Company, derive business from the market served by First Tulsa, and First Tulsa's mortgage company, Firstul Mortgage Company, derives business from the market served 1. Associates, which was incorporated in May 1961, is the succesby Liberty. Inasmuch as numerous mortgage banking competitors sor to a business which began operations in 1938 and which had been exist in the relevant markets, the Board concludes that consummation engaged in the publication and sale of personnel tests and related of this proposal would have no significant impact on competition materials. Upon consummation of this proposal, Associates will cease among these nonbanking subsidiaries of Liberty and First Tulsa. engaging in these impermissible nonbanking activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 463 Northfield, Illinois ("Associates"), a corporation1 balance of the public interest factors it must consider which owns Eagle Finance Corporation ("Finance"), under section 4 of the Act is consistent with approval and Eagle Acceptance Corporation ("Acceptance").2 of the application. Both Finance and Acceptance engage in the activity of Based on the foregoing and other facts of record, the making, acquiring and servicing consumer and com- Board has determined that the applications should be, mercial loans and other extensions of credit. These and hereby are, approved. activities have been determined by the Board to be The acquisition of Bank's shares by Eagle, and of closely related to banking (12 CFR § 225.25(b)(1)). Eagle's shares by Wonderlic, shall not be made before Notice of the applications, affording an opportunity the thirtieth calendar day following the effective date for interested persons to submit comments and views, of this Order. All the transactions shall not be consumhas been given in accordance with sections 3 and 4 of mated later than three months after the effective date the Act (49 Federal Register 4848, 9470) (1984). The of this Order, unless such period is extended for good time for filing comments and views has expired, and cause by the Board or by the Federal Reserve Bank of the Board has considered the applications and all Chicago, acting pursuant to delegated authority. The comments received in light of the factors set forth in determination as to Wonderlic's acquisition of Assosection 3(c) and the considerations specified in section ciates and its nonbank subsidiaries is subject to the 4(c)(8) of the Act. conditions set forth in the Board's Regulation Y and Applicants, which are nonoperating Illinois corpora- the Board's authority to require such modification or tions, were organized for the purpose of becoming termination of the activities of a holding company or bank holding companies by acquiring, directly and any of its subsidiaries as the Board finds necessary to indirectly, 97.4 percent of the voting shares of Bank. assure compliance with the provisions and purposes of Upon acquisition of their direct and indirect interests the Act and the Board's regulations and orders issued in Bank, Applicants would control a banking organiza- thereunder, or to prevent evasion thereof. tion with approximately $15.3 million in deposits,3 By order of the Board of Governors, effective which is one of the smaller banking organizations in April 5, 1984. Illinois. Consummation of this proposal would have no significant effects on the concentration of banking Voting for this action: Governors Wallich, Partee, Rice, resources in Illinois. and Gramley. Absent and not voting: Chairman Volcker and The proposed transaction is essentially a corporate Governors Martin and Teeters. reorganization and would not increase the concentra- JAMES MCAFEE, tion of banking resources in any relevant area. Neither [SEAL] Associate Secretary of the Board Applicants nor any of their principals is affiliated with any other banking organization in any relevant banking market and, therefore, consummation of the pro- Landmark Banking Corporation of Florida posal would not result in any adverse effects upon Fort Lauderdale, Florida competition in any relevant area. The financial and managerial resources of Appli- Preferred Equity Investors of Florida, Inc. cants and Bank are generally satisfactory, and the Knoxville, Tennessee future prospects of each appear favorable. Although Applicants do not anticipate any immediate changes in Order Approving Acquisition and Merger of Bank the services offered by Bank, considerations relating Holding Companies and Acquisitions of Companies to the convenience and needs of the communities to be Engaged in Insurance, Mortgage Banking, Real served also are consistent with approval of the applica- Estate Appraisals, Data Processing and Electronic tions. Further, there is no evidence in the record to Funds Transfer Activities indicate that approval of this proposal would result in undue concentration of resources, decreased or unfair Landmark Banking Corporation of Florida, Fort Laucompetition, conflicts of interests, unsound banking derdale, Florida ("Landmark"), a bank holding compractices or other adverse effects on the public inter- pany within the meaning of the Bank Holding Compaest. Accordingly, the Board has determined that the ny Act of 1956, as amended ("Act"), has applied for the Board's approval under section 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to merge with Southwest 2. Finance and Acceptance have 10 offices in Florida and Illinois. Florida Banks, Inc., Fort Myers, Florida ("South- Associates also controls E.F. Wonderlic Management Corporation, a west"). Preferred Equity of Investors of Florida, Inc., subsidiary engaged exclusively in the preparation of payroll services for Associates' subsidiaries. Pursuant to 12 CFR § 225.22(a)(2)(iv), ("Preferred Equity") Knoxville, Tennessee, a bank Wonderlic may acquire this servicing subsidiary without obtaining the holding company within the meaning of the Act by Board's prior approval. 3. Deposit data are as of December 31, 1983. virtue of its ownership of 27.1 percent of Landmark's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

464 Federal Reserve Bulletin • May 1984 voting securities, also has applied pursuant to section in the state. Upon consummation of the proposed 3(a)(3) of the Act, to acquire indirect control of South- acquisition, Applicant's share of the total deposits in west (together, Preferred Equity and Landmark are commercial banks in the state would increase to 5.3 referred to as "Applicant").1 percent, and Applicant would become the fifth largest Applicant also has applied for the Board's approval commercial banking organization in the state. While under section 4(c)(8) of the Act (12 U.S.C. this combination of the ninth and tenth largest com- § 1843(c)(8)) and section 225.23(a)(2) of the Board's mercial banking organizations in Florida would have Regulation Y (12 CFR § 225.23(a)(2)), to acquire some effect on the concentration of banking resources Southwest Mortgage Services, Inc., Fort Myers, Flor- within the state, the share of commercial bank deposida, a company engaged in mortgage banking activi- its held by the four largest banking organizations in ties; Southwest Financial Services, Inc., Fort Myers, Florida would remain at 43.7 percent after consumma- Florida, a company engaged in the sale of credit life tion of the proposed merger. Thus, Florida would insurance and real estate appraisal services; and remain moderately concentrated in terms of banking Southwest Data Services, Inc., Fort Myers, Florida, a resources upon consummation of the proposal. Accompany that engages in data processing activities. cordingly, it is the Board's view that consummation of Applicant also has applied to acquire Southwest's this acquisition would not have any significantly adinterest in the Florida Interchange Group, a company verse effects on the concentration of commercial bankthat provides electronic funds transfer services. These ing resources in Florida. activities have been determined by the Board to be Applicant's subsidiary banks compete directly with closely related to banking and permissible for bank Southwest's subsidiary banks in the Tampa and Pinelholding companies (12 CFR § 225.23(b)(1), (7), (8), and las County banking markets. In the Tampa banking (13). market, Applicant is the fifth largest commercial bank- Notice of the applications, affording opportunity for ing organization, with deposits of $107 million, repreinterested persons to submit comments, has been senting approximately 4 percent of the total deposits in given in accordance with sections 3 and 4 of the Act. commercial banks in the market.4 Southwest is the The time for filing comments has expired, and the sixth largest commercial banking organization in the Board has considered the applications and all com- market, with deposits of $102 million, also representments received in light of the factors set forth in ing approximately 4 percent of the total deposits in section 3(c) of the Act (12 U.S.C. § 1842(c)) and the commercial banks in the market. Upon consummation considerations specified in section 4(c)(8) of the Act.2 of the proposal, Applicant would remain the fifth Applicant is the tenth largest banking organization largest commercial banking organization in the market in Florida with five subsidiary banks that control and control approximately 8 percent of the total deposaggregate deposits of $1.2 billion,3 representing 2.5 its in commercial banks in the market. percent of the total deposits in commercial banks in While consummation of this proposal would elimithe state. Southwest is the ninth largest banking orga- nate some existing competition between Applicant and nization in the state, with 18 banking subsidiaries that Southwest in the Tampa banking market, this market control aggregate deposits of $1.4 billion, representing is not highly concentrated, with the four largest com- 2.8 percent of the total deposits in commercial banks mercial banking organizations in the market controlling 69.4 percent of the deposits in commercial banks in the market. The Herfindahl-Hirschman Index ("HHI") in the market is 1365 and would increase to 1. Preferred Equity has also applied for the Board's prior approval to acquire warrants to purchase 1,425,345 of Southwest's common 1393 upon consummation of the proposal. In addition, shares. Upon exercise of the warrants, these shares would represent numerous other commercial banking organizations approximately 15.6 percent of Southwest's outstanding common shares. would remain as alternatives for banking services in 2. The Board received comments from four individuals regarding the Tampa banking market after consummation of the the proposed acquisitions. Two of the comments stated that the terms proposal. In light of these facts, the Board concludes of Applicant's offer were unfair to minority shareholders and two comments stated that a performance incentive plan approved by that the acquisition would not have any significant Southwest for its management was not in the best interests of its adverse effect on competition in the Tampa market. shareholders. In general, the Act does not require the Board to Applicant is the second largest commercial banking consider the fairness of a stock purchase offers to minority shareholders when it considers a bank holding company application. Western organization in the Pinellas County banking market, Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th Cir. with deposits of approximately $324 million, repre- 1973). In addition, the Board has examined the performance incentive plan for Southwest's management and believes that the plan has no senting approximately 9 percent of the total deposits in bearing on the proposal by Applicant to acquire Southwest. Accordingly, the Board has determined that the comments do not present substantive issues that, if true, would require denial of the application. 4. The Tampa banking market is defined as Hillsborough County 3. Deposit data are as of June 30, 1982. plus the town of Land O'Lakes in Pasco County, Florida. 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Legal Developments 465 commercial banks in the market.5 Southwest is the future entrant into these markets. Four of these mar- 19th largest commercial banking organization in the kets are not concentrated as measured by the Board market, with deposits of $64 million, representing 2 guidelines, however. In addition, there are more than percent of the total deposits in commercial banks in six commercial banking organizations that appear to the market. Upon consummation of the proposal, be probable future entrants into the Immokalee bank- Applicant would remain the second largest commer- ing market. The Naples banking market is unattractive cial banking organization in the market. While con- for entry based on the average deposit growth rate for summation of the proposal would eliminate some the past two years, and in the Venice and Port existing competition between Applicant and South- Charlotte markets, Southwest's subsidiaries are not west in the Pinellas banking market, this market is among the three largest commercial banking organizaunconcentrated and would remain unconcentrated af- tions in the market. Accordingly, the Board concludes ter consummation of the proposal, with the four larg- that consummation of the proposal would not result in est commercial banks controlling only 44.1 percent of any significant adverse effect on probable future comthe market's deposits. The HHI in the market is 721 petition in any relevant market. and would increase to 750 upon consummation of the The financial and managerial resources of Appliproposal. In addition, numerous other commercial cant, Southwest and their subsidiaries are regarded as banks would remain as alternatives for banking ser- generally satisfactory, and their future prospects apvices after consummation of the proposal. According- pear favorable. Considerations relating to the convely, the Board concludes that the acquisition would not nience and needs of the communities to be served also have any significant adverse effects on competition in are consistent with approval of the application. the Pinellas County banking market. Applicant also has applied, pursuant to section The Board has considered the effects of this propos- 4(c)(8) of the Act, to acquire Southwest Mortgage al on probable future competition in the 11 markets in Services, Inc., Fort Myers, Florida, a company enwhich Applicant and Southwest do not compete di- gaged in mortgage banking activities; Southwest Firectly. The Board also has examined the proposal in nancial Services, Inc., Fort Myers, Florida, a compalight of its proposed guidelines for assessing the com- ny engaged in the sale of credit life insurance and real petitive effects of market extension mergers and acqui- estate appraisal services; and Southwest Data Sersitions.6 Applicant operates in three banking markets vices, Inc., Fort Myers, Florida, a company that in which Southwest does not operate: South Brevard engages in data processing activities. Applicant also County, Miami-Fort Lauderdale and Orlando. Be- has applied to acquire Southwest's interest in the cause of its size and financial resources and past Florida Interchange Group, a joint venture that prohistory of expansion, Southwest appears to be a vides electronic funds transfer services for ten Florida probable future entrant into these markets. None of banking organizations. Although Applicant engages, these markets are concentrated, however, as mea- through several subsidiaries in the sale of credit relatsured by the Board's guidelines, and in the Orlando ed insurance, no adverse competitive effect would and Miami-Fort Lauderdale markets, Applicant's sub- result from this acquisition because the activities of sidiaries are not among the market's three largest Southwest Financial Services, Inc., would be limited commercial banking organizations and do not control to the sale of insurance directly related to extensions 10 percent of the market's deposits. Accordingly, of credit made by the subsidiaries of Southwest acconsummation of the proposal would not result in a quired through this transaction. Although Applicant significant elimination of probable future competition also engages in mortgage banking and data processing in these markets. services in the relevant markets served by Southwest, Southwest operates in eight markets where Appli- Applicant's market share in these services is not cant does not operate.7 Because of its size and finan- significant and there are numerous other competitors cial resources, Applicant is viewed as a probable that provide these services. Accordingly, it does not appear that Applicant's acquisition of these subsidiaries would have any significant adverse effect upon 5. The Pinellas County banking market is defined as Pinellas existing or potential competition. County, Florida. Furthermore, there is no evidence in the record to 6. "Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Bank indicate that approval of this proposal would result in Merger Act and the Bank Holding Company Act," 47 Federal undue concentration of resources, decreased or unfair Register 9017 (March 3, 1982). While the proposed policy statement competition, conflicts of interests, unsound banking has not been approved by the Board, the Board is using the policy guidelines as part of its analysis of the effect of a proposal on probable practices or other adverse effects on the public interfuture competition. est. Accordingly, the Board has determined that the 7. These markets are: Immokalee, Port Charlotte, Naples, Fort balance of the public interest factors it must consider Myers, Sarasota, Venice, New Port Richey, and Bradenton. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

466 Federal Reserve Bulletin • May 1984 under section 4(c)(8) of the Act is favorable and gaged in the activity of underwriting, as reinsurer, consistent with approval of the applications to acquire credit life, accident and health insurance directly relatthese nonbanking subsidiaries. ed to extensions of credit made by Bank. This activity Based on the foregoing and the facts of record, the has been determined by the Board to be closely related Board has determined that the applications under to banking and permissible for bank holding compasections 3 and 4 of the Act should be and hereby are nies (12 CFR § 225.25(b)(9)), and this determination approved. The acquisition of Southwest shall not be has not been affected by the recent amendments to consummated before the thirtieth calendar day follow- section 4(c)(8) of the Act limiting the permissible ing the effective date of this Order or later than three insurance activities of bank holding companies.1 months after the effective date of this Order, unless Notice of the applications, affording opportunity for such period is extended for good cause by the Board or interested persons to submit comments, has been by the Federal Reserve Bank of Atlanta pursuant to given in accordance with sections 3 and 4 of the Act delegated authority. The determinations as to Appli- (49 Federal Register 4986, 7869 (1984)). The time for cant's nonbanking activities are subject to the condi- filing comments has expired, and the Board has contions set forth in section 225.23(b)(3) of Regulation Y sidered the applications and all comments received in (12 CFR § 225.23(b)(3)) and to the Board's authority to light of the factors set forth in section 3(c) of the Act require such modification or termination of the activi- (12 U.S.C. § 1842(c)) and the considerations specified ties of a holding company or any of its subsidiaries as in section 4(c)(8) of the Act. the Board finds necessary to assure compliance with Applicant is the fifth largest banking organization in the provisions and purposes of the Act and the Board's Pennsylvania with two subsidiary banks that control regulations and orders issued thereunder, or to pre- aggregate deposits of approximately $3.1 billion, repvent evasion thereof. resenting 4 percent of the total deposits in commercial By order of the Board of Governors, effective banks in the state.2 FNBA is the fourteenth largest April 9, 1984. commercial banking organization in the state, with one banking subsidiary that controls deposits of $988.7 Voting for this action: Chairman Volcker and Governors million, representing 1.3 percent of the total deposits Martin, Partee, Rice, and Gramley. Governor Gramley ab- in commercial banks in the state. Upon consummation stained from voting on the data processing portion of these of the proposed acquisition, Applicant's share of the applications. Absent and not voting: Governors Wallich and total deposits in commercial banks in Pennsylvania Teeters. would increase to 5.3 percent, and Applicant would become the fourth largest commercial banking organi- JAMES MCAFEE, zation in the state. The Board has carefully considered [SEAL] Associate Secretary of the Board the effects of the proposal on the structure of banking in Pennsylvania and has concluded that consummation Meridian Bancorp, Inc. of this transaction would not have a significant adverse Reading, Pennsylvania effect on the concentration of banking resources in the state. Order Conditionally Approving Acquisition of Bank Applicant's subsidiary banks compete directly with Holding Company and Company Engaged in FNBA's subsidiary bank in three banking markets: the Insurance Activities Allentown-Bethlehem; Philadelphia; and Reading banking markets. Applicant is the tenth largest of 42 Meridian Bancorp, Inc., Reading, Pennsylvania ("Ap- commercial banking organizations in the Allentownplicant"), a bank holding company within the meaning Bethlehem banking market,3 with $72.6 million in of the Bank Holding Company Act of 1956, as amend- deposits, representing 1.9 percent of the total deposits ed (12 U.S.C. § 1841 et seq.), has applied for the in commercial banks in the market.4 FNBA is the Board's approval under section 3(a)(3) of the Act largest banking organization in the Allentown-Bethle- (12 U.S.C. § 1842(a)(3)) to acquire all of the voting hem banking market, with deposits of $829.6 million, shares of First National Bancorp of Allentown, Inc., Allentown, Pennsylvania ("FNBA"), and thereby indirectly to acquire FNBA's subsidiary bank, First National Bank of Allentown, Allentown, Pennsylvania 1. See, Garn-St Germain Depository Institutions Act of 1982, Pub. L. No. 97-320, § 601, 96 Stat. 1469, 1536-38 (1982). ("Bank"). 2. State banking data are as of December 31, 1983. Applicant has also applied for the Board's approval 3. The Allentown-Bethlehem banking market is approximated by under section 4(c)(8) of the Act (12 U.S.C. Lehigh, Carbon, and Northampton Counties, Pennsylvania, and by Warren County, New Jersey. § 1843(c)(8)) to acquire Firal Life Insurance Company, 4. All market data are as of June 30, 1982, and reflect acquisitions Allentown, Pennsylvania ("Firal"), a company en- as of December 31, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 467 representing approximately 21.4 percent of the total Applicant is the eighth largest commerical banking deposits in commercial banks in the market. Upon organization in the Philadelphia banking market9 and consummation of this proposal, Applicant would be- controls 4.8 percent of the total deposits in commercial come the largest commercial banking organization in banks in the market. FNBA is the 52nd largest banking the market, controlling approximately 23.3 percent of organization in the relevant banking market, controlthe total deposits in commercial banks in the market. ling 0.03 percent of the total deposits in commercial While consummation of the proposal would elimi- banks in the market. The Philadelphia banking market nate some exisiting competition in the Allentown- is unconcentrated and would remain so after consum- Bethlehem banking market, the Board believes that mation of the proposal, with a post-merger HHI of these competitive effects are not significant. Upon 835.5 points. Accordingly, the Board concludes that consummation of the transaction, the Herfindahl- the acquisition would not have any significant effects Hirschman Index ("HHI") would increase by only 81 on competition in the Philadelphia banking market. points to 1173,5 the share of deposits held by the four Applicant is the largest of 13 commercial banking largest banking organizations in the market would organizations in the Reading banking market,10 with increase by 1.9 percent to 55.3 percent, and the market $828.3 million in deposits, representing 40.5 percent of would remain moderately concentrated as measured the total deposits in commercial banks in the market. by both these indexes. Moreover, 41 commercial FNBA is the seventh largest commercial banking banking alternatives would remain in the market after organization in the Reading market, controlling one consummation of the transaction. branch in the market with $38.6 million in deposits, Finally, in its evaluation in previous cases of the representing 1.9 percent of the total deposits in comcompetitive effects of a proposal, the Board has indi- mercial banks in the Reading market. FNBA's branch cated that thrift institutions have become, or at least in the Reading market is located in Kutztown, Pennhave the potential to become, major competitors of sylvania, where Applicant also has a branch with commercial banks.6 On this basis, the Board has deposits of $9 million. Upon consummation of this accorded substantial weight to the influence of thrift proposal, Applicant would control two of the three institutions in its evaluation of the competitive effects banking offices located in Kutztown. of a proposal. In this case, the increase in concentra- The Board is concerned about the effect of this tion in the Allentown-Bethlehem banking market is proposal on the concentration of banking resources in further alleviated by the presence of 24 thrift institu- the Reading banking market, particularly because the tions in the market, controlling $1.4 billion in deposits, transaction would result in a single banking organizawhich represents approximately 26 percent of the total tion controlling 42.4 percent of the total deposits in deposits in commercial banks and thrift institutions in commercial banks in the market. In addition, the the market. The thrift institutions in the market cur- Reading banking market is now highly concentrated, rently offer a full range of consumer services and with a four-firm concentration ratio of 89.9 percent, transaction accounts. Further, under provisions of the which would increase to 91.8 percent, and with an Garn-St Germain Depository Institutions Act of 1982, HHI of 2614, which would increase 154 points to 2768 the commercial lending powers of federal thrift institu- upon consummation of this proposal.11 In view of the tions have been significantly expanded, and Pennsylabove, the Board concludes that consummation of the vania law extends comparable commercial lending proposal would eliminate a substantial amount of powers to state-chartered thrift institutions.7 Conseexisting competition in the Reading banking market. quently, the Board has determined that consummation of this proposal would not have a significantly adverse effect on existing competition in the Allentown-Bethlehem banking market.8 percent, FNBA's market share would be 15.8 percent, and the HHI would be 670. Upon consummation of the proposal, Applicant's market share would increase to 17.2 percent, and the HHI would increase only 44 points to 714. 9. The Philadelphia banking market is approximated by Philadelphia, Montgomery, Bucks, Chester and Delaware Counties, all in 5. Under the United States Justice Department Merger Guidelines Pennsylvania, and by Camden, Burlington, and Gloucester Counties, (June 14, 1982), a market in which the post-merger HHI is between all in New Jersey. 1000 and 1800 is considered moderately concentrated. In such mar- 10. The Reading banking market is approximated by Berks County, kets, the Department is not likely to challenge a merger such as this Pennsylvania. proposal that produces an increase in the HHI of less than 100 points. 11. Under the Justice Department's Merger Guidelines, a market in 6. Comerica Inc. (Bank of the Commonwealth), 69 FEDERAL which the post-merger HHI is above 1800 is considered highly RESERVE BULLETIN 797 (1983); General Bancshares Corporation, 69 concentrated. In such markets, the Department is likely to challenge a FEDERAL RESERVE BULLETIN 802 (1983); First Tennessee National merger that produces an increase in the HHI of 100 points or more, as Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). in this case. The Justice Department has also indicated that it is likely 7. 7 PA. Stat. Ann. §§ 506(a)(iv), 6020-101(a)(22) (Supp. 1982- to challenge the merger of any firm with at least one percent of the 1983). market with a leading firm that controls at least 35 percent of the 8. If the deposits of the thrift institutions were taken into account in market and whose market share is approximately twice as large as that computing market shares, Applicant's market share would be 1.4 of the second largest firm in the market, as in this case. 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468 Federal Reserve Bulletin • May 1984 The Board believes in this instance that the anticom- have any significant adverse effects on probable future petitive effects of the transaction are not significantly competition in any relevant area. mitigated by the presence of thrift institutions in the The financial and managerial resources of Appli- Reading banking market. Seven thrift institutions op- cant, FNBA and their subsidiaries are regarded as erate in the market, and they control 22.5 percent of generally satisfactory, and their prospects appear fathe total deposits in the market. The record indicates vorable. Thus, banking factors are consistent with that only two of the thrift institutions currently are approval of the application. The record of this applicaengaged actively in commercial lending. Moreover, tion indicates that Applicant would expand FNBA's even if 100 percent of the deposits of the thrift institu- automatic teller system and expand or improve tions were included in the commercial banking product FNBA's consumer, student and mortgage lending acmarket, the Board believes that the market share tivity, as well as other bank services, such as cash involved and the resulting concentration in the market management, personal trust and electronic funds would be so substantial as to warrant denial of the transfer. In addition, it appears that Applicant may application. Applicant would remain the largest insti- provide Bank's customers with new discount brokertution in the market with a market share of 31.3 age, mortgage banking, and personal asset managepercent; FNBA's would be 1.5 percent; and, upon ment services. In the Board's view, these considerconsummation of the proposal, Applicant would con- ations do not outweigh the substantially adverse trol 32.8 percent of the total deposits in commercial competitive effects that would occur as a result of this banks and thrift institutions in the market. Further- proposal, absent a divestiture of FNBA's branch in the more, the share of deposits held by the four largest Reading banking market prior to consummation of the financial institutions in the market would increase transaction. from 74.0 percent to 75.5 percent, and the HHI would Applicant has also applied, pursuant to section increase 94 points to 1789. Although the market would 4(c)(8) of the Act, to acquire Firal, a wholly owned be only moderately concentrated using the HHI Index subsidiary of FNBA, which underwrites, as reinsurer, and would remain so upon consummation of the credit life, accident and health insurance directly relatproposal, the transaction barely falls below the level ed to extensions of credit made by Bank. Although which would be subject to challenge under the Depart- Applicant also has a nonbanking subsidiary engaged in ment of Justice Merger Guidelines. the reinsurance of credit life, accident and health As indicated above, only one of FNBA's 29 insurance, it appears from the facts of record that no branches is located in the Reading banking market. adverse competitive effects would result from this This branch holds $38.6 million in deposits, represent- acquisition. Accordingly, it does not appear that Aping only a small part of the total transaction (approxi- plicant's acquisition of Firal would have any signifimately 1 percent of the deposits of Applicant and cant adverse effect upon existing or potential competi- FNBA combined). If FNBA were to divest this branch tion. prior to consummation of this proposal, no existing Furthermore, there is no evidence in the record to competition would be eliminated in the Reading bank- indicate that approval of this proposal would result in ing market and, based upon the Board's finding of no undue concentration of resources, decreased or unfair significant adverse competitive impact on any other competition, conflicts of interests, unsound banking relevant market, the Board would approve the applica- practices or other adverse effects on the public intertion. Accordingly, the Board has determined to ap- est. Accordingly, the Board has determined that the prove the application on the condition that FNBA balance of the public interest factors it must consider divest its branch in the Reading market prior to under section 4(c)(8) of the Act is favorable and consummation of the proposal. consistent with approval of the application to acquire The Board has considered the effects of this propos- Firal. al on probable future competition in the three markets Based on the foregoing and other facts of record, the in which Applicant and FNBA do not compete directly Board has determined that the applications under and in the Reading banking market, since the Board's sections 3(a)(3) and 4(c)(8) of the Act should be, and approval of this proposal would be conditioned upon hereby are, approved, subject to the condition that the divestiture of FNBA's only branch in the Reading FNBA divest its branch in the Reading banking market banking market prior to consummation of the propos- on or before the date of its acquisition by Applicant.12 al. The Board has also examined this proposal in the context of its proposed guidelines for assessing the 12. The Board's policy with regard to competitive divestitures requires that divestitures intended to cure the anticompetitive effects competitive effects of market extension mergers and resulting from a merger or acquisition occur on or before the date of acquisitions. Because there are numerous potential consummation of the merger to avoid the existence of anticompetitive entrants into each of these markets, the Board con- efiFects. See Barnett Banks of Florida, Inc., 68 FEDERAL RESERVE cludes that consummation of this proposal would not BULLETIN 190 (1982); InterFirst Corporation, 68 FEDERAL RESERVE BULLETIN 243 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 469 Applicant's acquisition of FNBA's bank subsidiary sions of credit;1 (2) Nevada First Thrift, Reno, Nevada shall not be made before the thirtieth calendar day ("NFT"), which engages in the same activities perfollowing the effective date of this Order, and neither formed by SST and, in addition, leases personal propthe acquisition of the banking nor nonbanking subsid- erty where the lease is equivalent to an extension of iary shall occur later than three months after the credit and performs appraisals of real estate in support effective date of this Order, unless such period is of credit requests;2 and (3) Lori Insurance Company, extended for good cause by the Board or by the Ltd., Grand Turk, Turks & Caicos Islands ("LIC"), Federal Reserve Bank of Philadelphia, acting pursuant which reinsures credit life and credit health and accito delegated authority. The determinations as to Appli- dent insurance.3 These activities have been detercant's nonbanking activities are subject to the condi- mined by the Board to be closely related to banking tions set forth in the Board's Regulation Y and the and permissible for bank holding companies (12 CFR Board's authority to require such modification or § 225.25(b)(1), (2), (3), (5), (8), (9), and (13)). Neither termination of the activities of a holding company or SST nor NFT offers transaction accounts. any of its subsidiaries as the Board finds necessary to Notice of the applications, affording opportunity for assure compliance with the provisions and purposes of interested persons to submit comments and views, has the Act and the Board's regulations and orders issued been given in accordance with sections 3 and 4 of the thereunder, or to prevent evasion thereof. Act (49 Federal Register 935 (1984)). The time for By order of the Board of Governors, effective filing comments has expired, and the Board has con- April 16, 1984. sidered the applications and all comments received in light of the factors set forth in section 3(c) of the Act Voting for this action: Governors Martin, Wallich, Partee, and the considerations specified in section 4(c)(8) of Rice, and Gramley. Governor Wallich abstained from the the Act. insurance portion of these applications. Present and not Applicant, a development corporation under Nevavoting: Chairman Volcker. Absent and not voting: Governor da law, has applied to acquire Bank, a de novo Teeters. institution. Applicant is the parent company of NFT, SST, and LIC, and currently has no banking subsidiar- JAMES MCAFEE, ies. [SEAL] Associate Secretary of the Board Bank would be located in the metropolitan Reno banking market.4 Since Bank would be a de novo commercial bank, consummation of the proposal can be expected to result in increased competition in this Nevada First Development Corporation market. Since neither Applicant nor any of its princi- Reno, Nevada pals has an ownership interest in any other banking organization in the market, consummation of the pro- Order Approving Formation of a Bank Holding posal would not result in any adverse effects on Company and Retention of Nonbanking Subsidiaries competition or increase the concentration of banking resources. Accordingly, the Board concludes that Nevada First Development Corporation, Reno, Neva- competitive considerations lend weight toward apda, has applied for the Board's approval under section proval of the application to acquire Bank. 3(a)(1) of the Bank Holding Company Act ("Act") (12 U.S.C. § 1842(a)(1)) to become a bank holding company through the acquisition of Nevada First 1. SST also currently sells property insurance to its loan customers Bank, Reno, Nevada ("Bank"), a proposed new bank. to protect collateral in the form of personal property. This activity is prohibited to bank holding companies under Title VI of the Garn-St Applicant has also applied for the Board's approval Germain Depository Institutions Act of 1982, and Applicant has under section 4(c)(8) of the Act (12 U.S.C. committed to discontinue sale of this type of insurance within two § 1843(c)(8)) and section 225.4(b) of the Board's Regu- years of approval of its application in accordance with section 4(a)(2) of the Act. lation Y (12 CFR § 225.4(b)) to retain the following 2. NFT also sells property insurance to its loan customers to nonbanking subsidiaries: (1) Silver State Thrift and protect collateral in the form of personal property and acts as agent for Loan Association, Reno, Nevada ("SST"), which the sale of term life insurance that is unrelated to extensions of credit by NFT. Applicant has committed to discontinue NFT's impermissimakes loans for its own account, operates as a thrift ble insurance activities within two years of approval of this applicacompany (an entity similar to an industrial loan com- tion. pany) in the manner authorized by Nevada law, per- 3. Applicant has committed that LIC will only reinsure credit insurance policies related to extensions of credit by NFT, SST, and forms the escrow agent activities that may be per- Bank. Applicant has also committed immediately to begin efforts to formed by a trust company, and acts as insurance divest LIC and to divest LIC, at the latest, within two years of agent for the sale and issuance of credit life and credit approval of this application. 4. The metropolitan Reno banking market is approximated by the health and accident insurance directly related to exten- Reno Ranally Metropolitan Area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

470 Federal Reserve Bulletin • May 1984 The financial and managerial resources of Applicant interest and that the applications should be approved. and its subsidiaries are regarded as generally satisfac- On the basis of the record, the applications are aptory, and their prospects appear favorable. Thus, proved. This determination is subject to the conditions banking factors are consistent with approval of the set forth in this Order and in section 225.4(c) of applications. Considerations relating to the conve- Regulation Y, and the Board's authority to require nience and needs of the community to be served also such modification or termination of the activities of a are consistent with approval. holding company or any of its subsidiaries as the Under Nevada law, NFT and SST are prohibited Board finds necessary to assure compliance with the from accepting demand deposits or offering transac- provisions and purposes of the Act and the Board's tion accounts. Accordingly, these institutions are not regulations and orders issued thereunder, or to pre- "banks" within the meaning of the Act. In recent vent evasion thereof. cases involving the acquisition of industrial loan com- The acquisition of Bank shall not be consummated panies similar to the thrift companies in this proposal, before the thirtieth calendar day following the effective however, the Board has imposed as a condition of date of this Order or later than three months after the approval the requirement that the applicant not use effective date of this Order, unless such period is sweep accounts or tandem operations between the extended for good cause by the Board or by the industrial loan company and any other subsidiary or Federal Reserve Bank of San Francisco, pursuant to other financial institution as a means of offering as a delegated authority. package the demand deposit and commercial lending By order of the Board of Governors, effective services that define a bank under the Act. The Board April 18, 1984. has imposed this condition in order to ensure that industrial loan companies and similar institutions are Voting for this action: Vice Chairman Martin and Governot used as a device to evade the Act, and the Board nors Wallich, Partee, Rice, and Gramley. Governor Wallich believes that it is appropriate to impose this condition abstained from the insurance portion of these applications. Absent and not voting: Chairman Volcker and Governor in approving this application. Accordingly, the Teeters. Board's approval of this proposal is subject to the condition that Bank not engage in any tandem opera- JAMES MCAFEE, tions or sweep arrangements with NFT or SST that [SEAL] Associate Secretary of the Board would result in the offering of the demand deposit and commercial lending services that define a bank under the Act. Under Nevada law, Applicant, as a development Orders Issued Under Bank Services corporation, and NFT and SST, as thrift companies, Corporation Act are authorized to engage in real estate development and investment activities broader than those permitted Norwest Corporation for a bank holding company and its subsidiaries under Minneapolis, Minnesota the Act. Neither Applicant nor its subsidiaries currently engage in real estate development activities. Appli- Order Approving Applications to Acquire a Bank cant has committed that it will not engage in real estate Holding Company and to Engage in General development activities and that neither NFT nor SST Insurance Agency Activities and the Underwriting of will engage in any real estate activities impermissible Credit Life and Credit Accident and Health for the subsidiaries of a bank holding company under Insurance the Act. There is no evidence in the record to indicate that Norwest Corporation, Minneapolis, Minnesota, a Applicant's proposal to retain NFT, SST, and LIC bank holding company within the meaning of the Bank would result in any undue concentration of resources, Holding Company Act of 1956, as amended (12 U.S.C. decreased or unfair competition, conflicts of interests, § 1841 et seq.) ("BHC Act"), has applied under unsound banking practices, or other adverse effects on section 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to the public interest. Accordingly, the Board has deter- acquire Bankshares of Nebraska, Inc., Grand Island, mined that the balance of the public interest factors Nebraska ("BON"), also a bank holding company and that it must consider under section 4(c)(8) is favorable thereby to acquire indirectly BON's subsidiary bank, and consistent with approval of the applications. The First National Bank of Grand Island ("Bank"). In Based on the foregoing, including the commitments addition, Norwest has applied under section 4(c)(8) of made by Applicant, the Board has determined that the Act (12 U.S.C. § 1843(c)(8)) and section consummation of the proposal would be in the public 225.23(a)(2) of the Board's Regulation Y (12 CFR Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 471 225.23(a)(2)), (49 Federal Register 974 (1984)) for the deposits of savings and loan associations are included, Board's approval to acquire BON's nonbanking sub- Norwest controlled approximately 6.43 percent of the sidiaries: Bankshares of Nebraska Life Insurance total deposits in Nebraska thrifts and commercial Company, Phoenix, Arizona ("Bankshares Life") banks as of December 31, 1983. which engages in underwriting and reinsuring credit BON is the largest of the five commercial banks in life and credit accident and health insurance directly the Grand Island banking market,5 controlling 38.2 related to extensions of credit by BON's subsidiaries; percent of total deposits of commercial banks in the and the insurance agency and leasing activities con- market. Norwest does not compete in the Grand ducted by BON directly. Island banking market. Accordingly, the proposal Notice of the applications, affording interested per- would not result in the elimination of any existing sons an opportunity to submit comments, has been competition in this market. given in accordance with sections 3 and 4 of the Act. The Board also has considered the effects of Nor- (49 Federal Register 4149 (1984)). The time for filing west's proposal on probable future competition in the comments has expired and the Board has considered Grand Island market in light of its proposed guidelines these applications and all comments received in light for determining whether an intensive examination of a of the factors specified in section 3(c) and the consid- proposed market extension merger or acquisition is erations set forth in section 4(c)(8) of the Act. warranted.6 The proposal does not trigger an intensive Norwest, with total consolidated assets of $19.9 analysis under the Board's proposed guidelines bebillion,1 controls 86 banks in seven states, including cause the market is not highly concentrated. Accord- Iowa, Minnesota, Montana, Nebraska, North Dakota, ingly, consummation of this proposal would have no South Dakota and Wisconsin. Norwest, the largest significant effect on probable future competition in the banking organization in Nebraska, controls five subsi- Grand Island banking market. dary banks in Nebraska with deposits of $907 million, The financial and managerial resources of Norwest representing 7.83 percent of total deposits in commer- are considered to be consistent with approval of these cial banks in the state.2 BON, with deposits of $122.6 proposals. The financial and managerial resources of million, controls approximately 1.1 percent of the total BON will be improved as a result of its acquisition by deposits in commercial banks in Nebraska.3 Upon Norwest. The future prospects of Bank are favorable. consummation of the proposed acquisition, Norwest Considerations relating to convenience and needs of would remain the largest bank holding company in the communities to be served, including consider- Nebraska with approximately 8.9 percent of the total ations under the Community Reinvestment Act, also deposits in commercial banks in the state. are consistent with approval. Although Norwest is an out-of-state bank holding Norwest will indirectly acquire two of BON's induscompany for purposes of the BHC Act, Nebraska has trial bank subsidiaries located in Nebraska.7 These specifically authorized this interstate acquisition by subsidiaries will be merged into Bank prior to consumstatute as required by section 3(d) of the Act mation of the proposed transaction. (12 U.S.C. 1842(d)). Section 8-903 of the Revised Norwest proposes to acquire Bankshares Life, a Statutes of Nebraska authorizes any out-of-state bank company engaged in reinsurance and underwriting of holding company that controlled two or more banks in credit life and credit accident and health insurance Nebraska on March 12, 1963, to acquire additional directly related to extensions of credit by BON's banks in Nebraska provided only that the out-of-state subsidiaries. These insurance underwriting activities company may not control more than nine banks or 9 have been determined by the Board to be closely percent of the total deposits in commercial banks and related to banking (12 CFR 225.25(b)(9)). savings and loan associations in the state.4 If the Norwest also proposes to engage in general insurance agency activities in Nebraska through acquisition of the insurance agency operated directly by BON. Title VI of the Garn-St Germain Act of 1982 amended 1. All banking data are as of December 31, 1983, unless otherwise indicated. 2. The data involving the percentage of total deposits in commercial banks in Nebraska are as of June 30, 1983. 5. The Grand Island banking market is defined as Hall County, 3. These figures include the deposits of BON's two industrial bank Nebraska. subsidiaries that will be merged into Bank, but they exclude the 6. "Proposed Policy Statement of the Board of Governors of the deposits of BON's industrial bank in Hastings, Nebraska, which will Federal Reserve System for Assessing Competitive Factors Under the be divested prior to consummation of this proposed acquisition. Bank Merger Act and the Bank Holding Company Act," 47 Federal 4. A similar Iowa statute was found to be constitutional as a Register 9017 (March 3, 1982). legitimate grandfathering of existing companies operating in Iowa, 7. A third industrial bank subsidiary of BON located in Hastings, despite the fact that Norwest was the only out-of-state company to Nebraska, will be divested prior to consummation of this proposed qualify. acquisition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

472 Federal Reserve Bulletin • May 1984 section 4(c)(8) of the BHC Act to provide that insur- since it received approval in 1959 to sell any type of ance agency activities are not "closely related to insurance and the sale of new types of insurance, if banking" and thus are not permissible activities for any are contemplated through BON, is within the bank holding companies, unless the activities are scope of Norwest's original 1959 authorization. Acincluded within one of seven specific exemptions (A cordingly, for those companies that engaged in general through G) contained in section 4(c)(8). Norwest insurance agency activities pursuant to Board approvclaims it is authorized to engage in general insurance al prior to 1971, the continued operation of general agency activities under exemption G which permits insurance agencies, without restriction as to type of those bank holding companies that received Board insurance sold, is permissible under exemption G of approval prior to 1971 to engage in insurance agency section 4(c)(8) of the BHC Act. activities to continue to engage in such activities. Norwest's finance company subsidiary, Norwest Unless Norwest's proposal qualifies under this exemp- Financial Services, Inc., Des Moines, Iowa ("NFS"), tion or some other exemption in section 4(c)(8), the operates an office in Grand Island, Nebraska, and it operation of a general insurance agency is not present- competes in the areas of consumer and commercial ly a permissible activity for bank holding companies. lending with Bank. NFS began to expand its small Norwest has been engaged in general insurance business lending activity in mid-1982 upon its acquisiagency operations since 1929. In 1959, Norwest re- tion by Norwest,10 and does not have a significant ceived approval from the Board under the provisions market share. Moreover, there are many competing of the Bank Holding Company Act of 1956 to retain financial institutions offering these commercial lending eight insurance agencies which Norwest had organized services. Accordingly, there will be no significant into two subsidiaries.8 Both of these subsidiaries en- elimination of competition in the area of commercial gaged in general insurance agency activities, and Nor- lending. west has been engaged in general insurance agency The relevant market for consumer lending is considactivities on a continuous basis since receiving Board ered to be Hall County. Although this proposal will approval in 1959. Norwest is one of 16 active compa- result in elimination of a consumer lending competitor, nies that qualify for exemption G. there remain 20 alternative sources of consumer loans. In a previous Order the Board interpreted exemp- Moreover, Bank's share of the consumer loan market tion G to permit a qualifying bank holding company to is approximately 3 percent, and the competitive effect engage in insurance agency activities without limiting of this acquisition on consumer financial services in those activities to the locations where the company did the Grand Island market is not substantially adverse. business prior to 1971.9 The issue raised by this There is evidence in the record indicating that application is whether the bank holding companies consummation of Norwest's proposal would not result that received Board approval to engage in general in any undue concentration of resources, conflicts of insurance agency activities before the effective date of interests, unsound banking practices, or other adverse 1970 amendments to the BHC Act may act as agent in effects. Moreover, the Board also has determined that the sale of types of insurance that those companies the balance of the public interest factors the Board is may not have actually offered prior to 1971. Norwest required to consider under section 4(c)(8) of the Act is asserts that its approval by the Board to retain a favorable. Norwest will provide a source for insurance general insurance agency in 1959 permits it to operate that will be particularly convenient for its customers. a general insurance agency offering any type of insur- It has indicated that it will act affirmatively to ensure ance in Nebraska without regard to whether it will sell compliance with all laws and regulations prohibiting only those types of insurance it may have sold prior to tie-ins. It will engage in underwriting and reinsurance 1971. activities at rates below the maximum authorized The Board, in approving the application of Norwest rates. to engage in such general insurance agency activities Based on the foregoing and other facts of record, the prior to 1971, did not attempt to limit or restrict the Board has determined that the applications under types of insurance that Norwest could sell. By this sections 3 and 4 of the Act should be approved. The application, therefore, Norwest is seeking only to acquisition of BON's banking subsidiary pursuant to engage in the same type of general insurance agency section 3 of the Act shall not be consummated before activities that it was engaged in prior to 1971. The fact the thirtieth calendar day following the effective date that it may offer a new insurance product is irrelevant of this Order. The acquisition of BON's banking and nonbanking subsidiaries shall not be consummated 8. 45 FEDERAL RESERVE BULLETIN 963 (1959). 9. See Norwest Corporation, 70 FEDERAL RESERVE BULLETIN 235 (1984). 10. 68 FEDERAL RESERVE BULLETIN 519 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 473 later than three months after the effective date of this organizations with 0.17 percent of total deposits in Order, unless such period is extended for good cause commercial banks in the state. Bank is also one of the by the Board or by the Federal Reserve Bank of state's smallest banking organizations, controlling $9 Minneapolis, pursuant to delegated authority. The million in deposits. Upon consummation of the proapproval of Norwest's proposal to acquire BON's posed merger, Applicant's share of statewide deposits nonbanking subsidiaries and activities is subject to the would increase by approximately 0.04 percent. Conconditions set forth in section 225.23(b) of Regulation summation of the proposal thus would have no appre- Y (12 CFR § 225.23(b)) and to the Board's authority to ciable effect on the concentration of banking resources require modification or termination of the activities of in Iowa. a holding company or any of its subsidiaries as the Applicant and Bank compete in the Mitchell County Board finds necessary to assure compliance with the banking market.2 Applicant is the second largest of six provisions and purposes of the Act and the Board's banks in the market, controlling 26.3 percent of total regulations and orders issued thereunder, or to pre- deposits in commercial banks in the market. Bank is vent evasion thereof. the fifth largest bank in the market, with 6.7 percent of By order of the Board of Governors, effective total deposits in commercial banks in the market. April 24, 1984. Upon consummation of this proposal, Applicant would become the largest commercial bank in the Voting for this action: Vice Chairman Martin and Gover- market and would control 33.0 percent of market nors Wallich, Partee, Rice, and Gramley. Governor Wallich deposits. The Mitchell County banking market is highabstained from the insurance portion of these applications. ly concentrated, with a four-firm concentration ratio of Absent and not voting: Chairman Volcker and Governor 90.5 percent and a Herfindahl-Hirschman Index Teeters. ("HHI") of 2229. Upon consummation of the pro- JAMES MCAFEE, posed transaction, the four-firm concentration ratio [SEAL] Associate Secretary of the Board would increase to 97.2 percent and the HHI would increase by 362 points to 2591. Although consummation of this proposal would re- Orders Issued Under Bank Merger Act sult in the elimination of existing competition, several factors mitigate the competitive effects of the propos- St. Ansgar State Bank al. The Board has considered the fact that Mitchell St. Ansgar, Iowa County3 is a sparsely populated area that has experienced a significant decline in population.4 In addition, Order Approving Merger of Banks Mitchell County has a lower population-per-bank ratio than its neighboring counties or the statewide average. St. Ansgar State Bank, St. Ansgar, Iowa, has applied Mitchell County also has fewer residents per bank for approval under the Bank Merger Act (12 U.S.C. office than the state average and fewer residents per § 1828(c)) ("Act") to merge with Stacyville Savings bank office than all but one of its neighboring coun- Bank, Stacyville, Iowa ("Bank"). The surviving bank ties.5 will operate under the charter and name of St. Ansgar The Board also has considered the fact that Bank, State Bank. with total deposits of only $9.3 million, is among the Notice of the proposed merger has been given in accordance with the Bank Merger Act and the Board's Rules of Procedure (12 CFR § 262.3(b)). As required by the Bank Merger Act, reports on competitive 2. The Mitchell County banking market is approximated by all of Mitchell County, Iowa, and Oak Dale, Chester, Jamestown, and factors have been requested from the Attorney Gener- Sarasota townships in Howard County, Iowa. Applicant contends that al, the Comptroller of the Currency, and the Federal a more appropriate definition of the market would be an area Deposit Insurance Corporation. The time for filing encompassed within a 20-mile radius of St. Ansgar, Iowa, and Stacyville, Iowa. Upon a review of the data provided by Applicant, comments and views has expired, and the application the Board continues to believe that the Mitchell County banking and all comments received have been considered in market as defined above remains the relevant market for Applicant's light of the factors set forth in the Act. and Bank's services. 3. Mitchell County, Iowa, is used as an approximation of the Applicant, a state-chartered bank, controls deposits Mitchell County banking market in view of the ready availability of of $37 million1 and is among Iowa's smaller banking relevant data at the county level. 4. 1980 census data indicates that Mitchell County's population has declined by 5.9 percent since 1970. Only five of Iowa's ninety-nine counties experienced a more significant decline in population. 5. Bureau of the Census, 1980 Census of Population and Housing, 1. Unless otherwise noted, market and deposit data are as of Final Counts (March 1981). Federal Deposit Insurance Corporation, June 30, 1983. Bank and Branches Data Book (June 30, 1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

474 Federal Reserve Bulletin • May 1984 smallest depository institutions in the state and in the cent. Customers of Bank also would benefit from the Mitchell County banking market. Moreover, Bank has addition of new or enhanced services, including the experienced a very low rate of growth since its estab- offering of Individual Retirement Accounts as well as lishment in 1911. In addition, the record indicates that expanded credit programs and financial services espe- Bank's share of deposits in the Mitchell County bank- cially developed for local agricultural and commercial ing market has slowly declined from 8.6 percent in operations. Thus, considerations relating to conve- 1973 to 7.5 percent in 1978, and again to 6.7 percent in nience and needs of the community to be served are 1983.6 Comparative data regarding Bank's mix of consistent with approval and outweigh any adverse products and services likewise indicates that Bank has effects of the transaction. not been an active competitive factor in the market. Based on the foregoing and all the facts of record, it Consequently, the Board has determined that, in is the Board's judgment that consummation of the view of all of the facts of record and in the particular transaction would be consistent with the public intercontext of a declining market containing a relatively est. On the basis of the record and for the reasons large number of banks, and the proposed merger of a summarized above, the Board has determined that the very small, relatively noncompetitive organization, application should be, and hereby is, approved. The consummation of this proposal would not have a transaction shall not be consummated before the thirtisignificant adverse effect on existing competition in eth day following the effective date of this Order, or the Mitchell County banking market. Thus, competi- later than three months after the effective date of this tive effects are consistent with approval. Order, unless such period is extended for good cause The financial and managerial resources of Applicant by the Board or by the Federal Reserve Bank of and Bank are regarded as generally satisfactory and Chicago, pursuant to delegated authority. their prospects appear favorable. Accordingly, consid- By order of the Board of Governors, effective erations relating to banking factors are consistent with April 12, 1984. approval. The proposed transaction would enhance the quanti- Voting for this action: Vice Chairman Martin and Goverty and quality of services offered by Bank. Bank's nors Wallich, Partee, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Teeters. weekly hours of operation would increase by 72 per- JAMES MCAFEE, 6. In the last two years alone, Bank's share of market deposits fell by 0.7 percent—10 percent of Bank's total market share. [SEAL] Associate Secretary of the Board ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT BY THE BOARD OF GOVERNORS During April 1984 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 (effective date) date) Charter 95 Corporation, Hammond State Bank, April 27, 1984 Hudson, Wisconsin Hammond, Wisconsin McKenzie County Bancorp, The McKenzie County National Bank, April 10, 1984 Watford City, North Dakota Watford City, North Dakota Paducah Bank Shares, Inc., The Paducah Bank & Trust Company, April 6, 1984 Paducah, Kentucky Paducah, Kentucky Salem Capital Corporation, Salem Financial Corporation, April 5, 1984 Elkhart, Indiana Goshen, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 475 By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Acorn Bankshares, Inc., Bloomingdale State Bank, Chicago March 23, 1984 Bloomingdale, Illinois Bloomingdale, Illinois Banner County Bancorp, Banner County Bank, Kansas City March 19, 1984 Harrisburg, Nebraska Harrisburg, Nebraska Battle Lake Bancshares, Inc., The First National Bank of Minneapolis March 23, 1984 Battle Lake, Minnesota Battle Lake, Battle Lake, Minnesota Baxley State Banking Company, Baxley State Bank, Atlanta March 30, 1984 Baxley, Georgia Baxley, Georgia Bippus State Corporation, The Bippus State Bank, Chicago March 20, 1984 Bippus, Indiana Bippus, Indiana Blountsville Bancshares, Inc., The Bank of Blountsville, Atlanta April 5, 1984 Blountsville, Alabama Blountsville, Alabama BNB Bancorp, Burbank National Bank, San Francisco March 21, 1984 Burbank, California Burbank, California Brownsville Bancshares Corpo- Brownsville Bank, St. Louis April 5, 1984 ration, Brownsville, Tennessee Brownsville, Tennessee CSB Bancorp, The Citizens State Bank of St. Louis April 9, 1984 Petersburg, Indiana Petersburg, Petersburg, Indiana Central Financial Group, Inc., National Bank of Monticello, Chicago April 5, 1984 Monticello, Illinois Monticello, Illinois De Land State Bank, De Land, Illinois Central Louisiana Capital Cor- Louisiana Central Bank, Dallas April 9, 1984 poration, Ferriday, Louisiana Ferriday, Louisiana Churubusco Bancorp, Churubusco State Bank, Chicago April 5, 1984 Churubusco, Indiana Churubusco, Indiana Chester State Bancshares, Inc., First State Bank, Dallas April 11, 1984 Chester, Texas Colmesneil, Texas Childersburg Bancorporation, First Bank of Childersburg, Atlanta March 19, 1984 Inc., Childersburg, Alabama Childersburg, Alabama Citizens and Southern Georgia FSB Bancorp, Inc., Atlanta March 27, 1984 Corporation, Peachtree City, Georgia Atlanta, Georgia Citizens Guaranty Bancshares, Citizens Guaranty Bank, Cleveland April 11, 1984 Inc., Irvine, Kentucky Irvine, Kentucky Citizens Security Bancshares, Citizens Security Bank and Kansas City April 11, 1984 Inc., Trust Company, Bixby, Oklahoma Bixby, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

476 Federal Reserve Bulletin • May 1984 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Collier Bancshares Holding City National Bank, Dallas March 20, 1984 Company, Inc., Weslaco, Texas McAllen, Texas Lower Rio Grande Valley Bancshares, Inc., La Feria, Texas Colony Bankcorp, Inc., Pitts Banking Company, Atlanta March 23, 1984 Fitzgerald, Georgia Pitts, Georgia Commercial Bancshares, Inc., The Wood Ridge National Bank, New York April 19, 1984 Jersey City, New Jersey Wood Ridge, New Jersey Commercial Landmark Corpora- Commercial Bancshares, Inc., Kansas City April 6, 1984 tion, Tulsa, Oklahoma Muskogee, Oklahoma Crystal Valley Financial Corpo- First State Bank of Middlebury, Chicago April 11, 1984 ration, Middlebury, Indiana Middlebury, Indiana Elkhart Bancorp, Inc., Citizens Northern Bank of Chicago March 19, 1984 Elkhart, Indiana Elkhart, Elkhart, Indiana F and M Holding Company, F & M Bank and Trust Company, Atlanta April 10, 1984 Manchester, Georgia Manchester, Georgia Farmers State Bancorp, Inc., Farmers State Bank, Cleveland March 20, 1984 Booneville, Kentucky Boone ville, Kentucky First and Ocean BanCorp, First and Ocean National Bank of Boston April 9, 1984 Newburyport, Massachusetts Newburyport, Newburyport, Massachusetts First Bancorp, Inc., The First Bank and Trust Compa- Philadelphia April 13, 1984 Mechanicsburg, Pennsylvania ny of Mechanicsburg, Pa., Mechanicsburg, Pennsylvania First Burkburnett Bancshares, First National Bank in Burk- Dallas March 23, 1984 Inc., burnett, Burkburnett, Texas Burkburnett, Texas First Citizens United, Inc., Citizens Union Bank, St. Louis April 6, 1984 Central City, Kentucky Central City, Kentucky First Commercial Corporation, Morrilton Security Bank, St. Louis April 2, 1984 Little Rock, Arkansas Morrilton, Arkansas First Community Bancorp, Inc., The Second National Bank of Philadelphia April 4, 1984 Nazareth, Pennsylvania Nazareth, Nazareth, Pennsylvania First Carolina Bancshares Cor- Carolina Bank & Trust Company, Richmond April 13, 1984 poration, Lamar, South Carolina Darlington, South Carolina First Galena Bancshares, Inc., The First National Bank of Chicago March 27, 1984 Galena, Illinois Galena, Galena, Illinois First Haralson Corporation, First National Bank of Haralson Atlanta March 19, 1984 Buchanan, Georgia County, Buchanan, Georgia First Lake Forest Corporation, The First National Bank of Chicago March 21, 1984 Lake Forest, Illinois Lake Forest, Lake Forest, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments All Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date First McMinnville Corporation, The First National Bank of Atlanta April 6, 1984 McMinnville, Tennessee McMinnville, McMinnville, Tennessee First State Capital Corporation, First State Bank, St. Louis April 16, 1984 Holly Springs, Mississippi Holly Springs, Mississippi FSB Bancorp, Inc., First State Bank of Altus, Kansas City April 9, 1984 Altus, Oklahoma Altus, Oklahoma Gateway Bancshares, Inc., The Bank of McMechen, Cleveland April 2, 1984 McMechen, West Virginia McMechen, West Virginia Geiger Corporation, Iowa National Bank & Trust, Chicago April 9, 1984 Edina, Minnesota Lytton, Iowa Greater Texas Bancshares, Inc., Central Texas Financial Corpora- Dallas April 2, 1984 Georgetown, Texas tion, Georgetown, Texas Harrah National Bancshares, The National Bank of Harrah, Kansas City April 5, 1984 Inc., Harrah, Oklahoma Harrah, Oklahoma Heritage Bancorp, Inc., Kanawha Union Bank, Richmond April 3, 1984 Glenville, West Virginia Glenville, West Virginia The Weston National Bank, Glenville, West Virginia Huntington Bancshares, Inc., Huntington State Bank, Dallas April 3, 1984 Huntington, Texas Huntington, Texas Independence Bancorp, Inc., Bank of New Jersey, New York April 13, 1984 Allendale, New Jersey Allendale, New Jersey Independent Bancshares, Inc., Bank of Red Bay, Atlanta March 27, 1984 Red Bay, Alabama Red Bay, Alabama Independent Community Banks, Community National Bank, Atlanta March 26, 1984 Inc., Kissimmee, Florida Sanibel, Florida Jeff City Bancorp, Inc., First National Bank of Wood- St. Louis April 3, 1984 Woodlawn, Illinois lawn, Woodlawn, Illinois Kent Bancshares, Inc., Kent State Bank, Minneapolis March 20, 1984 Kent, Minnesota Kent, Minnesota Key Bancshares, Inc., Key Bank of Florida, Atlanta April 13, 1984 Tampa, Florida Tampa, Florida Landmark Bancshares Corpora- The First National Bank of St. Louis March 23, 1984 tion, St. Charles, Clayton, Missouri St. Charles, Missouri Lewisville Bancorp, Inc., Merchants State Bank of Minneapolis April 9, 1984 Lewisville, Minnesota Lewisville, Lewisville, Minnesota Mammoth Investments & Credit Peoples Bank of Mammoth St. Louis April 3, 1984 Corp., Inc., Spring, Mammoth Spring, Arkansas Mammoth Spring, Arkansas McAllen Metropolitan Metropolitan National Bank, Dallas April 3, 1984 Bancshares, Inc., McAllen, Texas McAllen, Texas Mid-Cities Bancshares, Inc., Mid-Cities National Bank, Dallas April 4, 1984 Hurst, Texas Hurst, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

478 Federal Reserve Bulletin • May 1984 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Monroe Bancorp, Monroe County State Bank, Chicago April 5, 1984 Bloomington, Indiana Bloomington, Indiana Ninnescah Banc Shares, Inc., Arlington Insurance Agency, Kansas City April 2, 1984 Arlington, Kansas Arlington, Kansas NBC Capital Corporation, National Bank of Commerce of St. Louis April 11, 1984 Starkville, Mississippi Mississippi, Starkville, Mississippi Ohio Bancorp, The Union Commercial & Cleveland March 20, 1984 Youngstown, Ohio Savings Bank, East Palestine, Ohio Pan American Banks, Inc., Central Bank of Delray Beach, Atlanta March 30, 1984 Miami, Florida Delray Beach, Florida Pan American Banks, Inc., Royal Trust Bank of Jacksonville, Atlanta March 30, 1984 Miami, Florida Jacksonville, Florida Professional Bancorp, Dixie National Bank of Dade Atlanta March 30, 1984 Coral Gables, Florida County, Miami, Florida Rose Capital Bancshares, Inc., Rose Capital Bank, Dallas April 10, 1984 Tyler, Texas Tyler, Texas Rural Financial Services, Inc., Dousman State Bank, Chicago April 6, 1984 Dousman, Wisconsin Dousman, Wisconsin Mansfield State Bank, Johnson Creek, Wisconsin Saver's Bancorp, Inc., The Saver's Bank, Boston March 22, 1984 Littleton, New Hampshire Littleton, New Hampshire North Country Bank, Berlin, New Hampshire Schwertner Financial Schwertner State Bank, Dallas April 9, 1984 Corporation, Schwertner, Texas Schwertner, Texas Sevier County Bancshares, Inc., Sevier County Bank, Atlanta April 18, 1984 Sevierville, Tennessee Sevierville, Tennessee Shamrock Holdings, Inc., The Union Bank, Atlanta April 17, 1984 Evergreen, Alabama Repton, Alabama Texas Commerce Bancshares, Texas Commerce Bank-River Dallas April 3, 1984 Inc., Oaks, N.A., Houston, Texas Houston, Texas Texas Gulf Coast Bancorp, Inc., Mainland Bancshares, Inc., Dallas March 23, 1984 Houston, Texas Houston, Texas Texas Regional Bancshares, Texas State Bank, Dallas March 21, 1984 Inc., Mc Allen, Texas McAllen, Texas Harlingen State Bank, Harlingen, Texas Texas Southwest Bancorp, Inc., Southwest Bank-Garland, Dallas April 5, 1984 Mesquite, Texas Garland, Texas The First Jermyn Corp., The First National Bank of Philadelphia April 4, 1984 Jermyn, Pennsylvania Jermyn, Jermyn, Pennsylvania The Merchants Holding The Merchants National Bank, Minneapolis April 2, 1984 Company, Winona, Minnesota Winona, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 479 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Tucker Bros., Inc., Tucker Holding Company, Inc., Atlanta March 23, 1984 Jacksonville, Florida Jacksonville, Florida Tucker Bank of Jacksonville, Jacksonville, Florida Turner Bancshares, Inc., Turner State Bank, Kansas City April 6, 1984 Kansas City, Kansas Kansas City, Kansas TCB Corporation, The County Bank, Richmond March 27, 1984 Greenwood, South Carolina Greenwood, South Carolina USBANCORP, Inc., Three Rivers Bank & Trust Philadelphia March 26, 1984 Johnstown, Pennsylvania Company, Pittsburgh, Pennsylvania Van Alstyne Financial First National Bank of Van Dallas March 21, 1984 Corporation, Alstyne, Van Alstyne, Texas Van Alstyne, Texas Washington Trust Bancorp, The Washington Trust Company Boston April 9, 1984 Inc., of Westerly, Westerly, Rhode Island Westerly, Rhode Island Waverly Bancshares, Inc., Waverly Investment Company, Kansas City March 19, 1984 Waverly, Missouri Kansas City, Missouri Wayne Bancorp, Inc., Wayne County Bank, Richmond April 2, 1984 Wayne, West Virginia Wayne, West Virginia Wesbanco, Inc., Citizens National Bank of Cleveland March 26, 1984 Wheeling, West Virginia Follansbee, Follansbee, West Virginia West Banco, First Security Bank of West Minneapolis April 2, 1984 Bozeman, Montana Yellowstone, West Yellowstone, Montana Westport Bancorp, Inc., The Westport Bank and Trust New York April 13, 1984 Westport, Connecticut Company, Westport, Connecticut Whitney Corporation of Iowa, Schroeder-Goodenow Chicago March 27, 1984 Atlantic, Iowa Management Co., Exira, Iowa Willow Bend Bancshares, Inc., Willow Bend National Bank, Dallas March 21, 1984 Piano, Texas Piano, Texas Wolcott Bancorp, Inc., Bank of Wolcott, Chicago March 20, 1984 Wolcott, Indiana Wolcott, Indiana Yoder Bankshares, Inc., Farmers State Bank, Kansas City April 5, 1984 Yoder, Kansas Yoder, Kansas Section 4 Nonbanking Reserve Effective company Bank date American Bancorporation Thorp Credit and Thrift, Minneapolis March 22, 1984 Holding Company, Brainerd, Minnesota Brainerd, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

480 Federal Reserve Bulletin • May 1984 Section 4—Continued Reserve Effective Applicant Bank(s) Bank date American Ligonier Bancorp, sale of credit-related insurance Chicago March 26, 1984 Inc., Ligonier, Indiana Bank Shares Incorporated, Holm and Associates, Inc., Minneapolis April 9, 1984 Minneapolis, Minnesota Minneapolis, Minnesota First Interstate Bancorp, Harris, Bretall, McEldowney and San Francisco April 5, 1984 Los Angeles, California Sullivan, Los Angeles, California First Railroad & Banking Valley Finance Corporation, Atlanta April 11, 1984 Company of Georgia, Roanoke, Virginia Augusta, Georgia Pickens County Bancshares, Northeastern General Insurance Atlanta March 23, 1984 Inc., Agency of Jasper, Jasper, Georgia Jasper, Georgia Security Pacific Corporation, KMS Corporate Brokers, Inc., San Francisco April 3, 1984 Los Angeles, California New York, New York Security Pacific Corporation, Regal Premium Finance, Inc., San Francisco March 22, 1984 Los Angeles, California Maple Shade, New Jersey Section 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Canton Bancshares, Inc., First American Bank, Minneapolis April 5, 1984 Canton, South Dakota Canton, South Dakota Fairview Insurance Agency, Canton, South Dakota Chokio Agency, Inc., Chokio State Bank, Minneapolis March 27, 1984 Chokio, Minnesota Chokio, Minnesota general insurance agency activities MNB Bancshares, Inc., The Malvern National Bank, St. Louis March 26, 1984 Malvern, Arkansas Malvern, Arkansas real estate appraisal Nicholls State Bancshares, Inc., Nicholls State Bank, Atlanta March 30, 1984 Nicholls, Georgia Nicholls, Georgia Full Service Financial, Inc., Pearson, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 481 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. Colorado Industrial Bankers Association v. Board of Securities Industry Association v. Board of Gover- Governors, filed January 1984, U.S.C.A. for the nors, et al., filed February 1983, Supreme Court. Tenth Circuit. Association of Data Processing Service Organiza- Financial Institutions Assurance Corp. v. Board of tions, et al. v. Board of Governors, filed August Governors, filed January 1984, U.S.C.A. for the 1982, U.S.C.A. for the District of Columbia Circuit. Fourth Circuit. Wyoming Bancorporation v. Board of Governors, filed First Bancorporation v. Board of Governors, filed May 1982, U.S.C.A. for the Tenth Circuit. January 1984, U.S.C.A. for the Tenth Circuit. Edwin F. Gordon v. Board of Governors, et al., filed Thomas H. Huston v. Board of Governors, filed October 1981, U.S.C.A. for the Eleventh Circuit January 1984, U.S.C.A. for the Eighth Circuit. (two consolidated cases). Ohio Deposit Guarantee Fund v. Board of Governors, Edwin F. Gordon v. John Heimann, et al., filed filed January 1984, U.S.C.A. for the Tenth Circuit. September 1981, U.S.C.A. for the Eleventh Circuit. State of Ohio, et al. v. Board of Governors, filed Allen Wolfson v. Board of Governors, filed September January 1984, for the Tenth Circuit. 1981, U.S.D.C. for the Middle District of Florida. Dimension Financial Corporation, et al. v. Board of Public Interest Bounty Hunters v. Board of Gover- Governors, filed December 1983, U.S.C.A. for the nors, et al., filed June 1981, U.S.C.A. for the Tenth Circuit. Eleventh Circuit. Oklahoma Bankers Association v. Federal Reserve First Bank & Trust Company v. Board of Governors, Board, filed December 1983, U.S.C.A. for the Tenth filed February 1981, U.S.D.C. for the Eastern Dis- Circuit. trict of Kentucky. Independent Insurance Agents of America, Inc. and 9 to 5 Organization for Women Office Workers v. Independent Insurance Agents of Missouri, Inc. v. Board of Governors, filed December 1980, Board of Governors, filed June 1983, U.S.C.A. for U.S.C.A. for the First Circuit. the Eighth Circuit (two cases). A. G. Becker, Inc. v. Board of Governors, et al., filed The Committee for Monetary Reform, et al. v. Board October 1980, U.S.C.A. for the District of Columof Governors, filed June 1983, U.S.D.C. for the bia. District of Columbia Circuit. A. G. Becker, Inc. v. Board of Governors, et al., filed August 1980, Supreme Court. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A18 All reporting banks A19 Banks in New York City A3 Monetary aggregates and interest rates A20 Balance sheet memoranda A4 Reserves of depository institutions, Reserve A20 Branches and agencies of foreign banks Bank credit A21 Gross demand deposits of individuals, A5 Reserves and borrowings of depository partnerships, and corporations institutions A5 Federal funds and repurchase agreements of large member banks FINANCIAL MARKETS A22 Commercial paper and bankers dollar POLICY INSTRUMENTS acceptances outstanding A22 Prime rate charged by banks on short-term A6 Federal Reserve Bank interest rates business loans A7 Reserve requirements of depository institutions A23 Terms of lending at commercial banks A8 Maximum interest rates payable on time and A24 Interest rates in money and capital markets savings deposits at federally insured institutions A25 Stock market—Selected statistics A9 Federal Reserve open market transactions A26 Selected financial institutions—Selected assets and liabilities FEDERAL RESERVE BANKS FEDERAL FINANCE A10 Condition and Federal Reserve note statements All Maturity distribution of loan and security All Federal fiscal and financing operations holdings A28 U.S. Budget receipts and outlays A29 Federal debt subject to statutory limitation A29 Gross public debt of U.S. Treasury—Types and MONETAR Y AND CREDIT AGGREGATES ownership A30 U.S. government securities dealers— A12 Aggregate reserves of depository institutions Transactions, positions, and financing and monetary base A31 Federal and federally sponsored credit A13 Money stock measures and components agencies—Debt outstanding A14 Bank debits and deposit turnover A15 Loans and securities of all commercial banks COMMERCIAL BANKING INSTITUTIONS A16 Major nondeposit funds A17 Assets and liabilities, last-Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • May 1984 SECURITIES MARKETS AND International Statistics CORPORATE FINANCE A50 U.S. international transactions—Summary A32 New security issues—State and local A51 U.S. foreign trade governments and corporations A51 U.S. reserve assets A33 Open-end investment companies—Net sales and A51 Foreign official assets held at Federal Reserve asset position Banks A33 Corporate profits and their distribution A52 Foreign branches of U.S. banks—Balance sheet A34 Nonfinancial corporations—Assets and data liabilities A54 Selected U.S. liabilities to foreign official A34 Total nonfarm business expenditures on new institutions plant and equipment A35 Domestic finance companies—Assets and liabilities and business credit REPORTED BY BANKS IN THE UNITED STATES A54 Liabilities to and claims on foreigners REAL ESTATE A55 Liabilities to foreigners A57 Banks' own claims on foreigners A36 Mortgage markets A58 Banks' own and domestic customers' claims on A37 Mortgage debt outstanding foreigners A58 Banks' own claims on unaffiliated foreigners A59 Claims on foreign countries—Combined CONSUMER INSTALLMENT CREDIT domestic offices and foreign branches A38 Total outstanding and net change A39 Terms REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES FLOW OF FUNDS A60 Liabilities to unaffiliated foreigners A61 Claims on unaffiliated foreigners A40 Funds raised in U.S. credit markets A41 Direct and indirect sources of funds to credit markets SECURITIES HOLDINGS AND TRANSACTIONS A62 Foreign transactions in securities Domestic Nonfinancial Statistics A63 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions A42 Nonfinancial business activity—Selected measures A42 Output, capacity, and capacity utilization INTEREST AND EXCHANGE RATES A43 Labor force, employment, and unemployment A44 Industrial production—Indexes and gross value A63 Discount rates of foreign central banks A46 Housing and construction A64 Foreign short-term interest rates A47 Consumer and producer prices A64 Foreign exchange rates A48 Gross national product and income A49 Personal income and saving A65 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 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 IItteemm 1983 1984 1983 1984 Q2 Q3 Q4 Ql Nov. Dec. Jan. Feb. Mar. Reserves of depository institutions2 1 Total 11.8 6.0 .5 6.9 -2.4 1.2 7.6 19.1 1.1 2 Required 12.0 5.9 -.1 4.5 -3.3 .1 5.9 8.1 9.2 3 Nonborrowed 5.2 2.9 8.0 8.2 -4.6 5.8 9.8 24.6 -11.8 4 Monetary base3 10.2 8.2 7.8 9.0 7.2 6.7 10.7' 10.5' .8 Concepts of money, liquid assets, and debt4 5 Ml 11.6 9.5 4.8 7.2 3.2 5.3 10.7 6.6 5.2 6 M2 10.6 6.9 8.5 6.8 8.3 7.7 5.7' 8.4' 3.6 7 M3 9.3 7.4 9.9 8.9 14.4 8.0 6.6' 10.4' 8.3 8 L 10.3 9.6 8.8' n.a. 12.7 10.7 7.4 n.a. n.a. 9 Debt 10.7' 11.5' 10.1' n.a. 9.6 12.3 12.2' 12.7 n.a. Nontransaction components 10 In M25 10.2 6.1 9.6 6.8 9.9 8.4 4.2' 8.9' 3.1 11 In M3 only6 3.8 9.8 16.3 17.4 41.4 9.2' 10.1' 18.9' 28.5 Time and savings deposits Commercial banks 12 Savings7 -14.8 -6.3 -6.4 -16.2 -7.9 13.2 -22.3 -18.2 -29.1 13 Small-denomination time8 -21.2 13.7 19.3 4.4 18.1 10.6 -.7 -.3 2.4 14 Large-denomination time910 -14.6 -4.6 -.4 9.0 13.5 7.0 8.5 6.3' 23.1 Thrift institutions 15 Savings7 -1.3 -2.2 -4.4 -5.1 -6.7 -6.7 -3.4 -8.8 .7 16 Small-denomination time -17.0 12.3 18.8 11.8 20.5 12.4 11.2 10.8' 4.3 17 Large-denomination time9 51.2 63.5 57.6 58.2 34.5 46.0 69.4 63.3 3.0 Debt components4 18 Federal 23.2' 21.2' 12.4' n.a. 7.0 8.5' 27.4' 16.6 n.a. 19 Nonfederal 7.3' 8.8' 9.5' n.a. 10.3 13.4 7.8' 11.5 n.a. 20 Total loans and securities at commercial banks" 9.8 9.7 10.2 13.3 13.4 13.7 11.1 15.0 14.8 1. Unless otherwise noted, rates of change are calculated from average funds (general purpose and broker/dealer), foreign governments and commercial amounts outstanding in preceding month or quarter. banks, and the U.S. government. Also subtracted is a consolidation adjustment 2. Figures incorporate adjustments for discontinuities associated with the that represents the estimated amount of demand deposits and vault cash held by implementation of the Monetary Control Act and other regulatory changes to thrift institutions to service their time and savings deposits. reserve requirements. To adjust for discontinuities due to changes in reserve M3: M2 plus large-denomination time deposits and term RP liabilities (in requirements on reservable nondeposit liabilities, the sum of such required amounts of $100,000 or more) issued by commercial banks and thrift institutions, reserves is subtracted from the actual series. Similarly, in adjusting for discontin- term Eurodollars held by U.S. residents at foreign branches of U.S. banks uities in the monetary base, required clearing balances and adjustments to worldwide and at all banking offices in the United Kingdom and Canada, and compensate for float also are subtracted from the actual series. balances in both taxable and tax-exempt, institution-only money market mutual 3. The monetary base not adjusted for discontinuities consists of total funds. Excludes amounts held by depository institutions, the U.S. government, reserves plus required clearing balances and adjustments to compensate for float money market funds, and foreign banks and official institutions. Also subtracted is at Federal Reserve Banks plus the currency component of the money stock less a consolidation adjustment that represents the estimated amount of overnight RPs the amount of vault cash holdings of thrift institutions that is included in the and Eurodollars held by institution-only money market mutual funds. currency component of the money stock plus, for institutions not having required L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term reserve balances, the excess of current vault cash over the amount applied to Treasury securities, commercial paper and bankers acceptances, net of money satisfy current reserve requirements. After the introduction of contemporaneous market mutual fund holdings of these assets. reserve requirements (CRR), currency and vault cash figures are measured over Debt: Debt of domestic nonfinancial sectors consists of outstanding credit the weekly computation period ending Monday. market debt of the U.S. government, state and local governments, and private Before CRR, all components of the monetary base other than excess reserves nonfinancial sectors. Private debt consists of corporate bonds, mortgages, conare seasonally adjusted as a whole, rather than by component, and excess sumer credit (including bank loans), other bank loans, commercial paper, bankers reserves are added on a not seasonally adjusted basis. After CRR, the seasonally acceptances, and other debt instruments. The source of data on domestic adjusted series consists of seasonally adjusted total reserves, which include nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted data are on an end-of-month basis. Growth rates for debt reflect adjustments for currency component of the money stock plus the remaining items seasonally discontinuities over time in the levels of debt presented in other tables. adjusted as a whole. 5. Sum of overnight RPs and Eurodollars, money market fund balances 4. Composition of the money stock measures and debt is as follows: (general purpose and broker/dealer), MMDAs, and savings and small time Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults deposits less the estimated amount of demand deposits and vault cash held by of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits thrift institutions to service their time and savings deposit liabilities. at all commercial banks other than those due to domestic banks, the U.S. 6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents, government, and foreign banks and official institutions less cash items in the money market fund balances (institution-only), less a consolidation adjustment process of collection and Federal Reserve float; and (4) other checkable deposits that represents the estimated amount of overnight RPs and Eurodollars held by (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer institution-only money market mutual funds. service (ATS) accounts at depository institutions, credit union share draft 7. Excludes MMDAs. accounts, and demand deposits at thrift institutions. The currency and demand 8. Small-denomination time deposits—including retail RPs—are those issued deposit components exclude the estimated amount of vault cash and demand in amounts of less than $100,000. All IRA and Keogh accounts at commercial deposits respectively held by thrift institutions to service their OCD liabilities. banks and thrifts are subtracted from small time deposits. M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) 9. Large-denomination time deposits are those issued in amounts of $100,000 issued by all commercial banks and overnight Eurodollars issued to U.S. residents or more, excluding those booked at international banking facilities. by foreign branches of U.S. banks worldwide, MMDAs, savings and small- 10. Large-denomination time deposits at commercial banks less those held by denomination time deposits (time deposits—including retail RPs—in amounts of money market mutual funds, depository institutions, and foreign banks and less than $100,000), and balances in both taxable and tax-exempt general purpose official institutions. and broker/dealer money market mutual funds. Excludes individual retirement 11. Changes calculated from figures shown in table 1.23. Beginning December accounts (IRA) and Keogh balances at depository institutions and money market 1981, growth rates reflect shifts of foreign loans and securities from U.S. banking funds. Also excludes all balances held by U.S. commercial banks, money market offices to international banking facilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • May 1984 1.11 RESERVE BALANCES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week ending 1984 1984 Feb. Mar. Apr. Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 166,904 168,738 174,313 169,028 169,316 168,956 169,794 171,507 171,564 2 U.S. government securities' 148,137 149,546 154,226 149,174 149,897 149,620 150,442 151,112 152,425 3 Bought outright 148,137 149,128 152,859 148,318 149,897 148,623 150,442 151,112 152,425 4 Held under repurchase agreements 0 418 1,367 856 0 997 0 0 0 5 Federal agency obligations 8,573 8,604 8,660 8,610 8,558 8,698 8,558 8,557 8,556 6 Bought outright 8,573 8,562 8,557 8,564 8,558 8,558 8,558 8,557 8,556 7 Held under repurchase agreements 0 42 103 46 0 140 0 0 0 8 Acceptances 0 14 87 1 0 59 0 0 0 9 Loans 588 905 1,285 886 1,077 1,195 1,114 1,513 751 10 Float 1,100 1,002 837 1,775 1,091 481 714 1,344 669 11 Other Federal Reserve assets 8,506 8,667 9,219 8,581 8,692 8,902 8,966 8,981 9,162 12 Gold stock 11,118 11,115 11,110 11,116 11,114 11,114 11,111 11,111 11,109 13 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 14 Treasury currency outstanding 15,813 15,863 15,915 15,855 15,867 15,879 15,891 15,903 15,915 ABSORBING RESERVE FUNDS 15 Currency in circulation 167,179 168,317 170,394 168,598 168,634 168,263 169,026 170,363 170,827 16 Treasury cash holdings 485 488 522 481 485 494 507 515 521 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,669 4,012 6,637 2,825 5,327 4,358 3,754 3,098 3,964 18 Foreign 214 229 220 224 225 210 236 208 217 19 Service-related balances and adjustments 1,452 1,940 1,215 1,553 1,596 1,548 1,677 1,542 1,525 20 Other 549 579 394 525 667 537 536 429 389 21 Other Federal Reserve liabilities and capital 5,492 5,705 6,098 5,634 5,570 5,832 5,874 6,313 5,818 22 Reserve balances with Federal Reserve Banks2 18,414 19,066 20,597 20,776 18,411 19,325 19,805 20,672 19,946 End-of-month figures Wednesday figures Feb. Apr. Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 161,971 170,168 182,683 174,644 170,957 165,262 169,530 171,860 174,982 24 U.S. government securities' 140,847 150,814 162,134 151,465 150,968 145,670 151,027 150,972 155,409 25 Bought outright 140,847 150,814 155,042 148,570 150,968 145,670 151,027 150,972 155,409 26 Held under repurchase agreements... 0 0 7,092 2,895 0 0 0 0 0 27 Federal agency obligations 8,568 8,558 8,982 8,713 8,558 8,558 8,558 8,556 8,556 28 Bought outright 8,568 8,558 8,556 8,558 8,558 8,558 8,558 8,556 8,556 29 Held under repurchase agreements... 0 0 426 155 0 0 0 0 0 30 Acceptances 0 0 305 5 0 0 0 0 0 31 Loans 1,020 896 907 2,449 935 718 588 2,425 671 32 Float 3,193 787 609 3,108 1,655 1,240 334 763 1,003 33 Other Federal Reserve assets 8,343 9,113 9,746 8,904 8,841 9,076 9,023 9,144 9,343 34 Gold stock 11,116 11,111 11,109 11,116 11,114 11,114 11,111 11,109 11,109 35 Special drawing rights certificate account . 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 36 Treasury currency outstanding 15,841 15,889 15,937 15,865 15,877 15,889 15,901 15,913 15,925 ABSORBING RESERVE FUNDS 37 Currency in circulation 167,206 168,737 170,309 168,863 168,528 168,488 169,719 171,001 170,962 38 Treasury cash holdings 484 503 534 484 493 503 513 520 528 Deposits, other than reserve balances with Federal Reserve Banks 39 Treasury 3,226 3,684 16,729 2,575 5,545 3,838 4,701 2,827 7,677 40 Foreign 247 221 345 283 241 187 200 217 183 41 Service-related balances and adjustments . 1,070 1,103 1,136 1,093 1,104 1,103 1,133 1,133 1,138 42 Other 498 562 324 502 550 506 457 421 336 43 Other Federal Reserve liabilities and capital 5,555 5,912 6,391 5,625 5,409 5,595 5,698 5,623 5,671 44 Reserve balances with Federal Reserve Banks2 15,260 21,064 18,579 26,819 20,696 16,663 18,740 21,758 20,139 1. Includes securities loaned—fully guaranteed by U.S government securities 2. Excludes required clearing balances and adjustments to compensate for pledged with Federal Reserve Banks—and excludes (if any) securities sold and float. scheduled to be bought back under matched sale-purchase transactions. NOTE. For amounts of currency and coin held as reserves, see table 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Depository Institutions A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages of daily figures RReesseerrvvee ccllaassssiiffiiccaattiioonn 1981 1982 1983 1984 Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.P 1 Reserve balances with Reserve Banks1 26,163 24,804 21,965 20,585 21,059 20,943 20,986 21,325 18,414 19,484 2 Total vault cash2 19,538 20,392 20,035 20,798 20,471 20,558 20,755 22,578 22,269 20,396 3 Vault cash used to satisfy reserve requirements3 . 15,755 17,049 16,695 17,331 17,078 17,201 17,908 18,795 17,951 16,791 4 Surplus vault cash4 3,783 3,343 3,340 3,467 3,393 3,357 2,847 3,782 4,318 3,604 5 Total reserves5 41,918 41,853 38,660 37,916 38,137 38,144 38,894 40,120 36,365 36,275 6 Required reserves 41,606 41,353 38,214 37,418 37,632 37,615 38,333 39,507 35,423 35,568 7 Excess reserve balances at Reserve Banks6 312 500 446 498 505 529 561 613 942 707 8 Total borrowings at Reserve Banks 642 697 1,573 1,441 837 912 745 715 567 952 9 Seasonal borrowings at Reserve Banks 53 33 198 191 142 119 % 86 103 133 10 Extended credit at Reserve Banks7 149 187 490 515 255 6 2 4 5 27 Weekly and biweekly averages of daily figures for week ending8 1984 Jan. 11 Jan. 18 Jan. 25 Feb. 1 Feb. 15 Feb. 29 Mar. 14 Mar. 28 Apr. IIP Apr. 25p 11 Reserve balances with Reserve Banks1 21,443 21,466 20,956 20,798 18,445 18,212 19,948 18,859 20,234 20,545 12 Total vault cash2 21,508 24,027 23,238 22,475 22,774 21,750 19,980 20,938 19,803 20,471 13 Vault cash used to satisfy reserve requirements3 . 18,219 19,617 19,294 18,567 18,406 17,452 16,458 17,188 16,495 17,098 14 Surplus vault cash4 3,289 4,410 3,944 3,908 4,368 4,298 3,522 3,750 3,307 3,373 15 Total reserves5 39,662 41,083 40,250 39,365 36,851 35,664 36,406 36,047 36,730 37,643 16 Required reserves 38,980 40,608 39,670 38,862 35,656 34,943 35,635 35,322 36,399 37,081 17 Excess reserve balances at Reserve Banks6 682 475 580 503 1,195 721 770 725 330 561 18 Total borrowings at Reserve Banks 563 781 505 677 556 571 689 1,136 1,313 1,232 19 Seasonal borrowings at Reserve Banks 69 79 96 109 90 116 118 149 131 138 20 Extended credit at Reserve Banks7 2 4 6 3 3 7 21 30 36 44 1. Excludes required clearing balances and adjustments to compensate for adjustments to compensate for float, plus vault cash used to satisfy reserve float. requirements. Such vault cash consists of all vault cash held during the lagged 2. Dates refer to the maintenance periods in which the vault cash can be used to computation period by institutions having required reserve balances at Federal satisfy reserve requirements. Under contemporaneous reserve requirements, Reserve Banks plus the amount of vault cash equal to required reserves during the maintenance periods end 30 days after the lagged computation periods in which maintenance period at institutions having no required reserve balances. the balances are held. 6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy 3. Equal to all vault cash held during the lagged computation period by reserve requirements less required reserves. institutions having required reserve balances at Federal Reserve Banks plus the 7. Extended credit consists of borrowing at the discount window under the amount of vault cash equal to required reserves during the maintenance period at terms and conditions established for the extended credit program to help institutions having no required reserve balances. depository institutions deal with sustained liquidity pressures. Because there is 4. Total vault cash at institutions having no required reserve balances less the not the same need to repay such borrowing promptly as there is with traditional amount of vault cash equal to their required reserves during the maintenance short-term adjustment credit, the money market impact of extended credit is period. similar to that of nonborrowed reserves. 5. Total reserves not adjusted for discontinuities consist of reserve balances 8. Biweekly averages beginning Feb. 15, 1984. with Federal Reserve Banks, which exclude required clearing balances and 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks1 Averages of daily figures, in millions of dollars 1984 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee Mar. 5 Mar. 12 Mar. 19 Mar. 26 Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 30 One day and continuing contract 1 Commercial banks in United States 57,784 58,394' 54,980'' 53,253 52,319 62,747 6600,,114400 5577,,000022 5533,,338888 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 24,028 24,534 24,542 24,458 22,624 23,784 23,007 21,030 20,604 3 Nonbank securities dealers 5,334 5,596 5,383 6,223 6,841 6,334 6,022 5,984 6,124 4 All other 26,400 26,646 26,538 25,984' 26,592 27,527 24,903 24,413 25,817 All other maturities 5 Commercial banks in United States 7,236 7,787 7,732 7,454 7,516 7,810 8,463 8,991 88,,227711 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 9,476 10,010 10,710 10,614' 10,832 10,727 11,421 11,324 11,588 7 Nonbank securities dealers 8,097 8,021 8,035 8,292' 7,240 6,667 7,366 8,845 8,608 8 All other 9,080 9,169 8,991 9,303 9,104 8,780 11,634 12,086 9,132 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 24,918 24,067 23,013 23,285 22,142 24,229 23,674 23,439 21,454 10 Nonbank securities dealers 6,230 5,371 5,293 4,404 5,315 5,490 5,116 5,109 5,415 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

A6 Domestic Nonfinancial Statistics • May 1984 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit1 SShhoorrtt--tteerrmm aaddjjuussttmmeenntt ccrreeddiitt FFFeeedddeeerrraaalll RRReeessseeerrrvvveee aanndd sseeaassoonnaall ccrreeddiitt First 60 days Next 90 days BBBaaannnkkk of borrowing of borrowing After 150 days EEffffeeccttiivvee ddaattee ffoorr ccuurrrreenntt rraatteess Rate on Effective Previous Rate on Previous Rate on Previous Rate on Previous 4/30/84 date rate 4/30/84 rate 4/30/84 rate 4/30/84 rate Boston 9 4/9/84 8l/2 9 %Vi 10 9 Vi 11 9 Vi 4/9/84 New York 4/9/84 4/9/84 Philadelphia 4/9/84 4/9/84 Cleveland 4/10/84 4/10/84 Richmond 4/9/84 4/9/84 Atlanta 4/10/84 4/10/84 Chicago 4/9/84 4/9/84 St. Louis 4/9/84 4/9/84 Minneapolis 4/9/84 4/9/84 Kansas City 4/13/84 4/13/84 Dallas 4/9/84 4/9/84 San Francisco... 9 4/13/84 8Vi 9 8l/2 10 9'/2 11 9l/2 4/13/84 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 A le l v l el F > . — R. Ba of n k Effective date A le l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. I 1 n 9 7 e 4 f — fec t A D pr e . c . 2 3 5 1 , 1973 V7'//21 -8 7 8 1 /2 1978— July 1 3 0 7- 7 7 V '/ * » 7 7 1 1 / / 4 4 1981— May 5 8 13 1 - 4 1 4 1 1 4 4 30 8 8 Aug. 21 73/4 73/4 Nov. 2 13-14 13 Dec. 9 73/4-8 73/4 Sept. 22 8 8 6 13 13 16 73/4 73/4 Oct. 16 8-81/2 81^ Dec. 4 12 12 20 8V2 8'/2 1975— Jan. 2 1 6 4 0 7 7 1 '/ / 4 I 4 - - V 7 7 3 3 / * / 4 4 7 7 7 1 1 3 / / / 4 4 4 Nov. 1 3 8'/ 9 2 ' - / 9 2 ' /2 9 9 > > / / 2 2 1982—J A u u ly g . 2 2 0 3 2 U 11 l ' - / V > 11 - / 1 2 V 2 i U1 1 1 1 VVi i Feb. 5 63/4-7'/4 63/4 1979—July 20 10 10 3 11 11 7 63/4 63/4 Aug. 17 10-1C/2 10'/2 16 10'/! 10Vi Mar. 1 1 0 4 61/4 6 — '/4 6 3/4 661/V4 * Sept. 2 1 0 9 10 W '/> / - 2 l 1 1 11 0 '/> 3 2 0 7 lO- 1 lO 0 Vi 1 1 0 0 May 16 6-6V4 6 21 11 11 Oct. 12 91^-10 9>/2 23 6 6 Oct. 8 11-12 12 13 9Vi 9>/2 10 12 12 Nov. 22 9-9 >/2 9 1976— N Ja o n v . . 2 2 1 2 3 9 5 5 1 15 /4 /2 — 1-6/ 5 2 V 2 55 51 '/ / >! 4 /2 1980— Feb. 1 1 5 9 12 1 - 3 1 3 1 1 3 3 Dec. 1 2 1 4 6 5 8 8 ' 8> /2 9 / <2 - 9 -9 / 2 9 9 8 1/2 26 51/4 51/4 May 29 12-13 13 17 8>/2 30 12 12 1977— Aug. 30 5'/4-53/4 51/4 June 13 11-12 11 1984— Apr. 9 81/2-9 31 51/4-53/4 53/4 16 11 11 Sept. 2 53/4 53/4 July 28 10-11 10 Oct. 26 6 6 29 10 10 1978— J M an ay . 2 1 9 0 1 6 61 6 -6 /2 V ' - /2 7 2 6 6 1 ' l / / 2 2 S N D e e o p c v t . . . 2 1 5 6 7 8 12 1 1 1 - 2 1 3 1 3 U 1 1 1 2 3 3 12 7 7 In effect Apr. 30, 1984 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 1981, and 1982. 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

Policy Instruments A7 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the Typ d e e p o o f s i d t ep in o t s e i r t v , a a l nd Monetary Control Act Ty d p e e p o o f s i d t e i p n o te s r i v t, a l a 5 n d Monetary Control Act6 Effective date Percent Net demand2 Net transaction accounts7,8 $0 million-$2 million 7 12/30/76 $0-$28.9 million $2 million-$10 million 9>/2 12/30/76 Over $28.9 million $10 million-$100 million 113/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million I6V4 12/30/76 By original maturity Less than l'/z years Time and savings2'3 1 '/2 years or more Savings 3/16/67 Eurocurrency liabilities Time4 All types $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2 Vi 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 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97- Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report 320) provides that $2 million of reservable liabilities (transaction accounts, for 1976, table 13. Under provisions of the Monetary Control Act, depository nonpersonal time deposits, and Eurocurrency liabilities) of each depository institutions include commercial banks, mutual savings banks, savings and loan institution be subject to a zero percent reserve requirement. The Board is to adjust associations, credit unions, agencies and branches of foreign banks, and Edge Act the amount of reservable liabilities subject to this zero percent reserve requirecorporations. ment each year for the next succeeding calendar year by 80 percent of the 2. Requirement schedules are graduated, and each deposit interval applies to percentage increase in the total reservable liabilities of all depository institutions, that part of the deposits of each bank. Demand deposits subject to reserve measured on an annual basis as of June 30. No corresponding adjustment is to be requirements were gross demand deposits minus cash items in process of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the collection and demand balances due from domestic banks. exemption was established at $2.1 million. Effective with the reserve maintenance The Federal Reserve Act as amended through 1978 specified different ranges of period beginning Jan. 12, 1984, the amount of the exemption is $2.2 million. In requirements for reserve city banks and for other banks. Reserve cities were determining the reserve requirements of a depository institution, the exemption designated under a criterion adopted effective Nov. 9, 1972, by which a bank shall apply in the following order: (1) nonpersonal money market deposit accounts having net demand deposits of more than $400 million was considered to have the (MMDAs) authorized under 12 CFR section 1204.122; (2) net NOW accounts character of business of a reserve city bank. The presence of the head office of (NOW accounts less allowable deductions); (3) net other transaction accounts; such a bank constituted designation of that place as a reserve city. Cities in which and (4) nonpersonal time deposits or Eurocurrency liabilities starting with those there were Federal Reserve Banks or branches were also reserve cities. Any with the highest reserve ratio. With respect to NOW accounts and other banks having net demand deposits of $400 million or less were considered to have transaction accounts, the exemption applies only to such accounts that would be the character of business of banks outside of reserve cities and were permitted to subject to a 3 percent reserve requirement. maintain reserves at ratios set for banks not in reserve cities. 6. For nonmember banks and thrift institutions that were not members of the Effective Aug. 24, 1978, the Regulation M reserve requirements on net balances Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3, due from domestic banks to their foreign branches and on deposits that foreign 1987. For banks that were members on or after July 1, 1979, but withdrew on or branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends respectively. The Regulation D reserve requirement of borrowings from unrelated on Oct. 24, 1985. For existing member banks the phase-in period of about three banks abroad was also reduced to zero from 4 percent. years was completed on Feb. 2, 1984. All new institutions will have a two-year Effective with the reserve computation period beginning Nov. 16, 1978, phase-in beginning with the date that they open for business, except for those domestic deposits of Edge corporations were subject to the same reserve institutions that have total reservable liabilities of $50 million or more. requirements as deposits of member banks. 7. Transaction accounts include all deposits on which the account holder is 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as permitted to make withdrawals by negotiable or transferable instruments, pay- Christmas and vacation club accounts were subject to the same requirements as ment orders of withdrawal, and telephone and preauthorized transfers (in excess savings deposits. of three per month) for the purpose of making payments to third persons or others. The average reserve requirement on savings and other time deposits before However, MMDAs and similar accounts offered by institutions not subject to the implementation of the Monetary Control Act had to be at least 3 percent, the rules of the Depository Institutions Deregulation Committee (DIDC) that permit minimum specified by law. no more than six preauthorized, automatic, or other transfers per month of which 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent no more than three can be checks—are not transaction accounts (such accounts was imposed on large time deposits of $100,000 or more, obligations of affiliates, are savings deposits subject to time deposit reserve requirements.) and ineligible acceptances. This supplementary requirement was eliminated with 8. The Monetary Control Act of 1980 requires that the amount of transaction the maintenance period beginning July 24, 1980. accounts against which the 3 percent reserve requirement applies be modified Effective with the reserve maintenance period beginning Oct. 25, 1979, a annually by 80 percent of the percentage increase in transaction accounts held by marginal reserve requirement of 8 percent was added to managed liabilities in all depository institutions determined as of June 30 each year. Effective Dec. 31, excess of a base amount. This marginal requirement was increased to 10 percent 1981, the amount was increased accordingly from $25 million to $26 million; and beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and effective Dec. 30, 1982, to $26.3 million; and effective Dec. 29, 1983, to $28.9 was eliminated beginning July 24, 1980. Managed liabilities are defined as large million. time deposits, Eurodollar borrowings, repurchase agreements against U.S. 9. In general, nonpersonal time deposits are time deposits, including savings government and federal agency securities, federal funds borrowings from non- deposits, that are not transaction accounts and in which a beneficial interest is member institutions, and certain other obligations. In general, the base for the held by a depositor that is not a natural person. Also included are certain marginal reserve requirement was originally the greater of (a) $100 million or (b) transferable time deposits held by natural persons, and certain obligations issued the average amount of the managed liabilities held by a member bank, Edge to depository institution offices located outside the United States. For details, see corporation, or family of U.S. branches and agencies of a foreign bank for the two section 204.2 of Regulation D. reserve computation periods ending Sept. 26, 1979. For the computation period beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease NOTE. Required reserves must be held in the form of deposits with Federal in an institution's U.S. office gross loans to foreigners and gross balances due Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a from foreign offices of other institutions between the base period (Sept. 13-26, Federal Reserve Bank indirectly on a pass-through basis with certain approved 1979) and the week ending Mar. 12, 1980, whichever was greater. For the institutions. computation period beginning May 29, 1980, the base was increased by 7Vi percent above the base used to calculate the marginal reserve in the statement week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and balances declined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 DomesticN onfinancialS tatistics • May 1984 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions' Percent per annum Commercial banks mut S u a al v i s n a g v s i n a g n s d b l a o n a k n s a ( s t s h o r c if i t a t i i n o s n t s it u a t n io d n s)1 In effect Apr. 30, 1984 In effect Apr. 30, 1984 Type of deposit Percent Effective date Percent Effective date 1 Savings 5'/! 1/1/84 5l/i 7/1/79 2 Negotiable order of withdrawal accounts 5'/4 12/31/80 51/4 12/31/80 3 Negotiable order of withdrawal accounts of $2,500 or more2 1/5/83 1/5/83 4 Money market deposit account2 12/14/82 12/14/82 Time accounts by maturity 5 7-31 days of less than $2,5004 5 >/2 1/1/84 5'/i 9/1/82 6 7-31 days of $2,500 or more2 1/5/83 1/5/83 7 More than 31 days 10/1/83 10/1/83 1. Effective Oct. 1, 1983, restrictions on the maximum rates of interest payable period is required for this account, but depository institutions must reserve the by commercial banks and thrift institutions on various categories of deposits were right to require seven days notice before withdrawals. When the average balance removed. For information regarding previous interest rate ceilings on all catego- is less than $2,500, the account is subject to the maximum ceiling rate of interest ries of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the for NOW accounts; compliance with the average balance requirement may be Federal Home Loan Bank Board Journal, and the Annual Report of the Federal determined over a period of one month. Depository institutions may not guarantee Deposit Insurance Corporation before November 1983. a rate of interest for this account for a period longer than one month or condition 2. Effective Dec. 1, 1983, IRA/Keogh (HR10) Plan accounts are not subject to the payment of a rate on a requirement that the funds remain on deposit for longer minimum deposit requirements. than one month. 3. Effective Dec. 14, 1982, depository institutions are authorized to offer a new 4. Deposits of less than $2,500 issued to governmental units continue to be account with a required initial balance of $2,500 and an average maintenance subject to an interest rate ceiling of 8 percent. balance of $2,500 not subject to interest rate restrictions. No minimum maturity Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1983 1984 TTyyppee ooff ttrraannssaaccttiioonn 11998811 11998822 11998833 Sept. Oct. Nov. Dec. Jan. Feb. Mar. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 13,899 17,067 18,888 3,184 309 11,,443355 3,695 0 336688 33,,115599 2 Gross sales 6,746 8,369 3,420 214 0 0 0 1,967 828 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 1,816 3,000 2,400 500 0 700 0 1,300 600 0 Others within 1 year 5 Gross purchases 317 312 484 0 0 115555 0 00 00 00 6 Gross sales 23 0 0 0 0 0 0 0 0 0 7 Maturity shift 13,794 17,295 18,887 902 529 2,828 915 573 -2,488 1,012 8 Exchange -12,869 -14,164 -16,553 -753 -636 -2,930 0 1,530 -4,574 0 9 Redemptions 0 0 87 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,702 1,797 1,896 0 0 882200 0 0 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -10,299 -14,524 -15,533 -902 -256 -1,684 -915 -487 2,488 -1,012 13 Exchange 10,117 11,804 11,641 753 636 1,796 0 1,530 2,861 0 5 to 10 years 14 Gross purchases 393 388 890 0 0 334499 0 0 0 0 15 Gross sales 0 0 0 0 0 0 0 300 0 0 16 Maturity shift -3,495 -2,172 -2,450 0 -273 -250 0 -86 97 0 17 Exchange 1,500 2,128 2,950 0 0 700 0 0 1,000 0 Over 10 years 18 Gross purchases 379 307 383 0 0 151 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 -601 -904 0 0 -894 0 0 -97 0 21 Exchange 1,253 234 1,962 0 0 434 0 0 713 0 All maturities 22 Gross purchases 16,690 19,870 22,540 3,184 309 2,909 3,695 0 368 3,159 23 Gross sales 6,769 8,369 3,420 214 0 0 0 2,267 828 0 24 Redemptions 1,816 3,000 2,487 500 0 700 0 1,300 600 0 Matched transactions 25 Gross sales 589,312 543,804 578,591 48,193 53,751 56,858 58,979 54,833 55,656 66,827 26 Gross purchases 589,647 543,173 576,908 47,667 53,367 57,991 56,404 58,096 47,310 73,634 Repurchase agreements 27 Gross purchases 79,920 130,774 105,971 3377,,221111 19,247 33,,225577 33,,664444 1144,,224455 00 44,,99%% 28 Gross sales 78,733 130,286 108,291 30,223 28,499 3,257 2,260 15,629 0 4,9% 29 Net change in U.S. government securities 9,626 8,358 12,631 8,933 -9,326 3,342 2,504 -1,688 -9,407 9,966 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 494 0 0 0 0 00 0 00 00 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 108 189 292 5 6 84 2 40 38 10 Repurchase agreements 33 Gross purchases 13,320 18,957 8,833 2,871 1,960 497 634 931 0 609 34 Gross sales 13,576 18,638 9,213 2,510 2,510 497 426 1,139 0 609 35 Net change in federal agency obligations 130 130 -672 356 -557 -84 206 -248 -38 -10 BANKERS ACCEPTANCES 36 Repurchase agreements, net -582 1,285 -1,062 913 -1,122 0 418 -418 0 0 37 Total net change in System Open Market Account 9,175 9,773 10,897 10,203 -11,005 33,,225588 3,128 -2,354 -9,444 9,956 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

A10 Domestic NonfinancialS tatistics • May 1984 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1984 1984 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 Feb. Mar. Apr. Consolidated condition statement ASSETS 1 Gold certificate account 11,114 11.111 11,109 11,109 11,109 11,116 11,111 11,109 2 Special drawing rights certificate account 4,618 4.618 4,618 4,618 4,618 4,618 4,618 4,618 3 Coin 515 514 514 503 488 534 520 482 Loans 4 To depository institutions 718 588 2,425 671 6,334 1,020 889966 990077 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 00 00 00 334499 00 00 330055 Federal agency obligations 7 Bought outright 8,558 8,558 8,556 8,556 88,,555566 88,,556688 88,,555588 88,,555566 8 Held under repurchase agreements 0 0 0 0 325 0 0 426 U.S. government securities Bought outright 9 Bills 61,222 66,579 66,524 69,478 68,886 5566,,339999 6666,,336666 6699,,111111 10 Notes 62,921 62,921 62,921 64,127 64,127 62,921 62,921 64,127 11 Bonds 21,527 21,527 21,527 21,804 21,804 21,527 21,527 21,804 12 Total bought outright1 145,670 151,027 150,972 155,409 154,817 140,847 150,814 155,042 13 Held under repurchase agreements 0 0 0 0 3,514 0 0 7,092 14 Total U.S. government securities 145,670 151,027 150,972 155,409 158,331 140,847 150,814 162,134 15 Total loans and securities 154,946 160,173 161,953 164,636 173,895 150,435 160,268 172,328 16 Cash items in process of collection 8,181 10,236 8,139 9,484 8,356 11,193 7,698 7,044 17 Bank premises 549 549 549 549 548 549 549 548 Other assets 18 Denominated in foreign currencies2 3,942 4,013 4,015 4,017 4,020 3,915 44,,001111 33,,991122 19 All other3 4,585 4,461 4,580 4,777 5,088 3,879 4,553 5,286 20 Total assets 188,450 195,675 195,477 199,693 208,122 186,239 193,328 205,327 LIABILITIES 21 Federal Reserve notes 153,617 154,844 156,122 156,068 155,680 152,383 153,871 155,388 Deposits 22 To depository institutions 17,766 19,873 22,891 21,277 23,818 16,330 2222,,116677 1199,,771155 23 U.S. Treasury—General account 3,838 4,701 2,827 7,677 14,045 3,226 3,684 16,729 24 Foreign—Official accounts 187 200 217 183 251 247 221 345 25 Other 506 457 421 336 319 498 562 324 26 Total deposits 22,297 25,231 26,356 29,473 38,433 20,301 26,634 37,113 27 Deferred availability cash items 6,941 9,902 7,376 8,481 8,002 8,000 6,911 6,435 28 Other liabilities and accrued dividends4 2,301 2,340 2,330 2,312 2,660 2,099 2,427 2,920 29 Total liabilities 185,156 192,317 192,184 196,334 204,775 182,783 189,843 201,856 CAPITAL ACCOUNTS 30 Capital paid in 1,498 1,501 1,514 1,516 1,518 1,482 1,499 1,520 31 Surplus 1,465 1,465 1,465 1,465 1,465 1,465 1,465 1,465 32 Other capital accounts 331 392 314 378 364 509 521 486 33 Total liabilities and capital accounts 188,450 195,675 195,477 199,693 208,122 186,239 193,328 205,327 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 117,565 114,928 115,738 114,051 114,193 119,391 111133,,554477 111166,,117733 Federal Reserve note statement 183,081 183,452 183,744 184,269 184,534 182,185 183,132 184,496 LESS: Held by bank5 29,464 28,608 27,622 28,201 28,854 29,838 29,261 29,108 Federal Reserve notes, net 153,617 154,844 156,122 156,068 155,680 152,347 153,871 155,388 Collateral held against notes net: Gold certificate account 11,114 11,111 11,109 11,109 11,109 11,116 11,111 11,109 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 Other eligible assets 0 0 0 0 0 0 0 0 U.S. government and agency securities .. 137,885 139,115 140,395 140,341 139,953 136,613 138,142 139,661 42 Total collateral. 153,617 154,844 156,122 156,068 155,680 152,347 153,871 155,388 1. Includes securities loaned—fully guaranteed by U.S. government securities 4. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes (if any) securities sold and market exchange rates of foreign-exchange commitments. scheduled to be bought back under matched sale-purchase transactions. 5. Beginning September 1980, Federal Reserve notes held by the Reserve Bank 2. Assets shown in this line are revalued monthly at market exchange rates. are exempt from the collateral requirement. 3. Includes special investment account at Chicago of Treasury bills maturing within 90 days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks; Banking Aggregates All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity groupings 1984 1984 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 Feb. 29 Mar. 30 Apr. 30 1 Loans—Total 718 588 2,425 670 6,334 1,020 896 907 2 Within 15 days 678 519 2,351 634 6,312 941 864 864 3 16 days to 90 days 40 69 74 36 22 79 32 43 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 349 0 0 305 6 Within 15 days 0 0 0 0 349 0 0 305 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 145,670 151,027 150,972 155,409 158,331 140,847 150,814 162,134 10 Within 15 days1 5,045 5,192 4,294 6,551 7,071 4,499 3,424 10,462 11 16 days to 90 days 29,318 33,515 34,153 36,223 36,277 25,076 35,062 35,614 12 91 days to 1 year 43,959 44,588 44,793 43,617 45,965 43,925 44,980 46,562 13 Over 1 year to 5 years 34,522 34,906 34,906 35,789 35,789 34,521 34,522 36,267 14 Over 5 years to 10 years 14,196 14,196 14,196 14,322 14,322 14,196 14,196 14,322 15 Over 10 years 18,630 18,630 18,630 18,907 18,907 18,630 18,630 18,907 16 Federal agency obligations—Total. 8,558 8,558 8,556 8,556 8,881 8,568 8,558 8,982 17 Within 15 days1 188 37 256 351 460 162 188 561 18 16 days to 90 days 763 881 666 571 617 688 763 635 19 91 days to 1 year 1,668 1,701 1,680 1,680 1,675 1,587 1,668 1,657 20 Over 1 year to 5 years 4,176 4,176 4,191 4,191 4,409 4,378 4,176 4,409 21 Over 5 years to 10 years 1,360 1,360 1,360 1,360 1,321 1,350 1,360 1,321 22 Over 10 years 403 403 403 403 399 403 403 399 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

A12 Domestic NonfinancialS tatistics • May 1984 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1983 1984 11998800 11998811 11998822 11998833 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS'' 11 TToottaall rreesseerrvveess22 30.64 31.51 33.63 35.28 35.22 35.31 35.32 35.25 35.28 35.50 36.07 36.10 22 NNoonnbboorrrroowweedd rreesseerrvveess 28.95 30.88 33.00 34.51 33.67 33.87 34.47 34.34 34.51 34.79 35.50 35.15 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt33 28.95 31.03 33.18 34.51 34.16 34.38 34.73 34.35 34.51 34.79 35.50 35.18 44 RReeqquuiirreedd rreesseerrvveess 30.13 31.20 33.13 34.72 34.77 34.81 34.81 34.72 34.72 34.89 35.12 35.39 55 MMoonneettaarryy bbaassee44 150.11 157.82 169.81 184.97 180.13 181.78 182.85 183.95 184.97 186.94 188.58 188.71 Not seasonally adjusted 6 Total reserves2 31.34 32.23 34.35 36.00 34.71 35.01 35.31 35.35 36.00 37.30 35.65 35.63 7 Nonborrowed reserves 29.65 31.59 33.71 35.22 33.17 33.57 34.47 34.45 35.22 36.59 35.09 34.68 8 Nonborrowed reserves plus extended credit3 29.65 31.74 33.90 35.23 33.66 34.08 34.73 34.45 35.23 36.59 35.09 34.70 9 Required reserves 30.82 31.91 33.85 35.44 34.27 34.51 34.81 34.82 35.44 36.69 34.71 34.92 10 Monetary base4 152.80 160.65 172.83 188.23 180.14 181.24 182.67 185.04 188.23 188.10 185.93 187.16 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 40.66 41.93 41.85 38.89 38.66 37.92 38.14 38.14 38.89 40.12 36.37 36.28 12 Nonborrowed reserves 38.97 41.29 41.22 38.12 37.11 36.48 37.29 37.24 38.12 39.41 35.80 35.32 13 Nonborrowed reserves plus extended credit3 38.97 41.44 41.41 38.12 37.61 36.99 37.55 37.25 38.12 39.41 35.80 35.33 14 Required reserves 40.15 41.61 41.35 38.33 38.21 37.42 37.63 37.62 38.33 39.41 35.42 35.58 15 Monetary base4 163.00 170.47 180.52 192.36 185.40 185.11 186.60 188.97 192.36 192.30 186.67 187.81 1. Figures incorporate adjustments for discontinuities associated with the Reserve Banks and the currency component of the money stock less the amount implementation of the Monetary Control Act and other regulatory changes to of vault cash holdings of thrift institutions that is included in the currency reserve requirements. To adjust for discontinuities due to changes in reserve component of the money stock plus, for institutions not having required reserve requirements on reservable nondeposit liabilities, the sum of such required balances, the excess of current vault cash over the amount applied to satisfy reserves is subtracted from the actual series. Similarly, in adjusting for discontin- current reserve requirements. After the introduction of contemporaneous reserve uities in the monetary base, required clearing balances and adjustments to requirements (CRR), currency and vault cash figures are measured over the compensate for float also are subtracted from the actual series. weekly computation period ending Monday. 2. Total reserves not adjusted for discontinuities consist of reserve balances Before CRR, all components of the monetary base other than excess reserves with Federal Reserve Banks, which exclude required clearing balances and are seasonally adjusted as a whole, rather than by component, and excess adjustments to compensate for float, plus vault cash used to satisfy reserve reserves are added on a not seasonally adjusted basis. After CRR, the seasonally requirements. Such vault cash consists of all vault cash held during the lagged adjusted series consists of seasonally adjusted total reserves, which include computation period by institutions having required reserve balances at Federal excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted Reserve Banks plus the amount of vault cash equal to required reserves during the currency component of the money stock and the remaining items seasonally maintenance period at institutions having no required reserve balances. adjusted as a whole. 3. Extended credit consists of borrowing at the discount window under the 5. Reflects actual reserve requirements, including those on nondeposit liabilterms and conditions established for the extended credit program to help ities, with no adjustments to eliminate the effects of discontinuities associated depository institutions deal with sustained liquidity pressures. Because there is with implementation of the Monetary Control Act or other regulatory changes to not the same need to repay such borrowing promptly as there is with traditional reserve requirements. short-term adjustment credit, the money market impact of extended credit is similar to that of nonborrowed reserves. NOTE. Latest monthly and biweekly figures are available from the Board's 4. The monetary base not adjusted for discontinuities consists of total reserves H.3(502) statistical release. Historical data and estimates of the impact on plus required clearing balances and adjustments to compensate for float at Federal required reserves of changes in reserve requirements are available from the Banking Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A13 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Billions of dollars, averages of daily figures 1983 1984 1980 1981 1982 1983 Dec. Dec. Dec. Dec. Dec. Jan. Feb. Mar. Seasonally adjusted 1 Ml 414.9 441.9 480.5 525.3 525.3 530.0' 532.9 535.2 2 M2 1,632.6 1,796.6 1,965.3 2,196.1 2,196.1 2,206.6' 2,222.0 2,228.8 3 M3 1,989.8 2,236.7 2,460.3 2,706.7' 2,706.7' 2,721.5' 2,744.9' 2,765.6 4 L 2,326.0 2,598.4 2,868.7 3,175.9' 3,175.9' 3,195.4 n.a. n.a. 5 Debt2 3,946.9 4,323.8 4,710.1 5,219.0 5,219.0 5,271.9 5,327.5 n.a. Ml components 6 Currency2 116.7 124.0 134.1 148.0 148.0 149.9 150.2 150.9 7 Travelers checks3 4.2 4.3 4.3 4.9 4.9 4.9 5.0 5.0 8 Demand deposits4 266.5 236.2 239.7 243.7 243.7 244.5 243.8 244.0 9 Other checkable deposits5 27.6 77.4 102.4 128.8 128.8 130.7 133.9 135.3 Nontransactions components 10 In M26 1,217.7 1,354.6 1,484.8 1,670.8 1,670.8 1,676.2' 1,689.1 1,693.5 11 In M3 only7 357.2 440.2 495.0 510.6' 510.6' 514.9' 523.0' 535.4 Savings deposits9 12 Commercial Banks 185.9 159.7 164.9 134.6 134.6 132.1 130.1 128.9 13 Thrift Institutions 215.6 186.1 197.2 178.2 178.2 177.7 176.4 176.5 Small denomination time deposits9 14 Commerical Banks 287.5 349.6 382.2 353.1 353.1 352.9 352.8 353.5 15 Thrift Institutions 443.9 477.7 474.7 440.0 440.0 444.1 448.1' 449.7 Money market mutual funds 16 General purpose and broker/dealer 61.6 150.6 185.2 138.2 138.2 137.9 142.1' 144.8 17 Institution-only 15.0 36.2 48.4 40.3 40.3 40.6 41.6 41.8 Large denomination time deposits10 18 Commercial Banks11 213.9 247.3 261.8 225.5 225.5 227.1' 228.3' 232.7 19 Thrift Institutions 44.6 54.3 66.1 100.3 100.3 106.1 111.7 115.1 Debt components 20 Federal debt 742.8 830.1 991.4 1,177.9 1,177.9 1204.8 1,221.5 n.a. 21 Non-federal debt 3,204.1 3,493.7 3,718.7 4,041.0 4,041.0 4067.1 4,106.0 n.a. Not seasonally adjusted 22 Ml 424.8 452.3 491.9 537.8 537.8 534.8 521.9 528.1 23 M2 1,635.4 1,798.7 1,967.4 2,198.0 2,198.0 2,210.4' 2,211.9' 2,229.5 24 M3 1,996.1 2,242.7 2,466.6 2,712.8' 2,712.8'' 2,727.4' 2,737.7' 2,765.3 25 L 2,332.8 2,605.6 2,876.5 3,183.7' 3,183.7' 3,206.8 n.a. n.a. 26 Debt2 3,946.9 4,323.8 4,710.1 5,219.0 5,219.0 5,259.7' n.a. Ml components 27 Currency2 118.8 126.1 136.4 150.5 150.5 148.4 148.3 149.8 28 Travelers checks3 3.9 4.1 4.1 4.6 4.6 4.6 4.7 4.8 29 Demand deposits4 274.7 243.6 247.3 251.6 251.6 249.4 237.9 239.4 30 Other checkable deposits5 27.4 78.5 104.1 131.2 131.2 132.5 130.9 134.1 Nontransactions components 31 M26 1,210.6 1,346.3 1,475.5 1,660.1 1,660.1 1,675.6' 1,690.0' 1,701.4 32 M3 only7 360.7 444.1 499.2 514.8' 514.8' 517.(K 525.8' 535.7 Money market deposit accounts 33 Commercial banks n.a. n.a. 26.3 230.1 230.1 234.2 238.3 242.6 34 Thrift institutions n.a. n.a. 16.6 146.0 146.0 146.3 147.9 150.2 Savings deposits8 35 Commercial Banks 183.8 157.5 162.1 132.0 132.0 131.3 129.9 130.2 36 Thrift Institutions 214.4 184.7 195.5 176.5 176.5 176.1 175.2 176.8 Small denomination time deposits9 37 Commercial Banks 286.0 347.7 380.1 351.0 351.0 353.7 355.3 356.1 38 Thrift Institutions 442.3 475.6 472.4 437.6 437.6 445.7 450.2' 451.4 Money market mutual funds 39 General purpose and broker/dealer 61.6 150.6 185.2 138.2 138.2 137.9 142.1' 144.8 40 Institution-only 15.0 36.2 48.4 40.3 40.3 40.6 41.6 41.8 Large denomination time deposits10 41 Commercial Banks11 218.5 252.1 266.2 228.9 228.9 229.3' 229.7' 233.0 42 Thrift Institutions 44.3 54.3 66.2 100.7 100.7 105.6' 110.9 113.8 Debt components 43 Federal debt 742.8 830.1 55))9911..44 1,177.9 1,177.9 1,201.6' 1,219.8 n.a. 44 Non-federal debt 3,204.1 3,943.7 3,718.7 4,041.0 4,041.0 4,058.1' 4,088.1 n.a. For notes see bottom of next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • May 1984 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 1984 Sept. Oct. Nov. Dec. Jan. Feb. DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 80,858.7 90,914.4 108,646.4 110,700.7 118,407.2 114,466.6 115,381.5 120,954.6 126,749.9 2 Major New York City banks 33,891.9 37,932.9 47,336.9 46,903.7 52,639.9 49,715.8 48,255.7 51,952.5 55,776.7 3 Other banks 46,966.9 52,981.6 61,309.5 63,796.9 65,767.3 64,750.8 67,125.8 69,002.2 70,973.1 4 ATS-NOW accounts3 743.4 1,036.2 1,394.9 1,495.9 1,392.8 1,447.4 1,499.6 1,345.1 1,491.1 5 Savings deposits4 672.7 721.4 735.7 712.7 643.7 674.9 661.4 620.8 708.3 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 285.8 324.2 376.8 384.7 409.6 398.3 395.7 414.2 434.7 7 Major New York City banks 1,105.1 1,287.6 1,512.0 1,508.8 1,703.8 1,645.6 1,541.4 1,650.9 1,747.7 8 Other banks 186.2 211.1 238.5 248.6 254.7 251.8 257.9 264.9 273.3 9 ATS-NOW accounts3 14.0 14.5 15.5 15.9 14.9 15.5 15.9 13.8 15.0 10 Savings deposits4 4.1 4.5 5.3 5.3 4.9 5.1 5.0 4.7 5.5 Not seasonally adjusted DEBITS TO Demand deposits2 11 All insured banks 81,197.9 91,031.9 108,459.5 111,741.3 114,191.9 110,963.9 122,558.3 123,567.2 114,721.3 12 Major New York City banks 34,032.0 38,001.0 47,238.2 48,276.1 49,910.9 47.508.1 52,418.5 52,895.2 50,724.8 13 Other banks 47,165.9 53,030.9 61,221.3 63,465.2 64,280.9 63,455.8 70,139.7 70,672.0 63,996.5 14 ATS-NOW accounts3 737.6 1,027.1 1,387.5 1,388.3 1,373.2 1,327.2 1,465.4 1,601.5 1,389.5 15 MMDA5 0 0 567.4 641.4 700.3 639.1 745.8 793.4 682.1 16 Savings deposits4 672.9 720.0 736.4 688.9 672.9 635.3 647.1 672.5 649.9 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 286.1 325.0 376.1 387.2 391.1 381.7 407.0 412.3 402.7 18 Major New York City banks 1,114.2 1,295.7 1,510.0 1,574.5 1,595.5 1,553.4 1,613.6 1,581.5 1,618.7 19 Other banks 186.2 211.5 238.1 246.1 246.6 244.0 261.1 265.4 252.4 20 ATS-NOW accounts3 14.0 14.3 15.4 15.0 14.6 14.0 15.1 16.2 14.3 21 MMDA5 0 0 2.8 2.9 3.2 2.8 3.3 3.4 2.9 22 Savings deposits4 4.1 4.5 5.3 5.2 5.1 4.8 4.9 5.2 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. NOTES TO TABLE 1.21 1. Composition of the money stock measures and debt is as follows: 2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults commercial banks. Excludes the estimated amount of vault cash held by thrift of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits institutions to service their OCD liabilities. at all commercial banks other than those due to domestic banks, the U.S. 3. Outstanding amount of U.S. dollar-denominated travelers checks of nongovernment, and foreign banks and official institutions less cash items in the bank issuers. Travelers checks issued by depository institutions are included in process of collection and Federal Reserve float; and (4) other checkable deposits demand deposits. (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer 4. Demand deposits at commercial banks and foreign-related institutions other service (ATS) accounts at depository institutions, credit union share draft than those due to domestic banks, the U.S. government, and foreign banks and accounts, and demand deposits at thrift institutions. The currency and demand official institutions less cash items in the process of collection and Federal deposit components exclude the estimated amount of vault cash and demand Reserve float. Excludes the estimated amount of demand deposits held at deposits respectively held by thrift institutions to service their OCD liabilities. commercial banks by thrift institutions to service their OCD liabilities. M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) 5. Consists of NOW and ATS balances at all depository institutions, credit issued by all commercial banks and overnight Eurodollars issued to U.S. residents union share draft balances, and demand deposits at thrift institutions. Other by foreign branches of U.S. banks worldwide, MMDAs, savings and small- checkable deposits seasonally adjusted equals the difference between the seasondenomination time deposits (time deposits—including retail RPs—in amounts of ally adjusted sum of demand deposits plus OCD and seasonally adjusted demand less than $100,000), and balances in both taxable and tax-exempt general purpose deposits. Included are all ceiling free "Super NOWs," authorized by the and broker/dealer money market mutual funds. Excludes individual retirement Depository Institutions Deregulation committee to be offered beginning Jan. 5, accounts (IRA) and Keogh balances at depository institutions and money market 1983. funds. Also excludes all balances held by U.S. commercial banks, money market 6. Sum of overnight RPs and overnight Eurodollars, money market fund funds (general purpose and broker/dealer), foreign governments and commercial balances (general purpose and broker/dealer), MMDAs, and savings and small banks, and the U.S. government. Also subtracted is a consolidation adjustment time deposits, less the consolidation adjustment that represents the estimated that represents the estimated amount of demand deposits and vault cash held by amount of demand deposits and vault cash held by thrift institutions to service thrift institutions to service their time and savings deposits. their time and savings deposits liabilities. M3: M2 plus large-denomination time deposits and term RP liabilities (in 7. Sum of large time deposits, term RPs and term Eurodollars of U.S. amounts of $100,000 or more) issued by commercial banks and thrift institutions, residents, money market fund balances (institution-only), less a consolidation term Eurodollars held by U.S. residents at foreign branches of U.S. banks adjustment that represents the estimated amount of overnight RPs and Eurodolworldwide and at all banking offices in the United Kingdom and Canada, and lars held by institution-only money market funds. balances in both taxable and tax-exempt, institution-only money market mutual 8. Savings deposits exclude MMDAs. funds. Excludes amounts held by depository institutions, the U.S. government, 9. Small-denomination time deposits—including retail RPs— are those issued money market funds, and foreign banks and official institutions. Also subtracted is in amounts of less than $100,000. All individual retirement accounts (IRA) and a consolidation adjustment that represents the estimated amount of overnight RPs Keogh accounts at commercial banks and thrifts are subtracted from small time and Eurodollars held by institution-only money market mutual funds. deposits. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 10. Large-denomination time deposits are those issued in amounts of $100,000 Treasury securities, commercial paper and bankers acceptances, net of money or more, excluding those booked at international banking facilities. market mutual fund holdings of these assets. 11. Large-denomination time deposits at commercial banks less those held by Debt: Debt of domestic nonfinancial sectors consists of outstanding credit money market mutual funds, depository institutions, and foreign banks and market debt of the U.S. government, state and local governments, and private official institutions. nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers NOTE: Latest monthly and weekly figures are available from the Board's H.6 acceptances, and other debt instruments. The source of data on domestic (508) release. Historical data are available from the Banking Section, Division of nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt Research and Statistics, Board of Governors of the Federal Reserve System, data are on an end-of-month basis. Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A15 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1981 1982 1983 1984 1981 1982 1983 1984 CCaatteeggoorryy Dec.2 Dec. Nov. Dec. Jan. Feb. Dec.2 Dec. Nov. Dec. Jan. Feb. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities3 1,316.3 1,412.1 1,548.9 1,567.6 1,582.8 1,601.1 1,326.1 1,422.5 1,556.1 1,579.0 1,585.1 1,596.5 7. U.S. Treasury securities 111.0 130.9 186.2 188.0 189.2 189.1 111.4 131.5 185.0 188.8 188.4 189.9 3 Other securities 231.4 239.1 247.1 247.5 251.2 250.4 232.8 240.6 247.6 249.0 251.4 249.8 4 Total loans and leases3 973.9 11,,004422..00 1,115.7 1,132.1 1,142.4 1,161.6 981.8 1,050.4 1,123.5 1,141.1 1,145.2 1,156.8 5 Commercial and industrial loans 358.0 392.4 407.8 413.0 417.6 423.1 360.1 394.7 409.7 415.4 416.2 421.4 6 Real estate loans 285.7 303.2 332.1 335.6 340.5 343.8 286.8 304.1 333.4 336.6 341.2 343.5 7 Loans to individuals 185.1 191.8 215.4 219.7 224.3 228.0 186.4 193.1 216.7 221.2 225.0 227.3 8 Security loans 21.9 24.7 26.2 27.3 27.5 30.9 22.7 25.5 26.7 28.2 27.6 29.8 9 Loans to nonbank financial institutions 30.2 31.1 29.8 29.7 30.8 30.7 31.2 32.1 30.2 30.6 30.9 30.8 10 Agricultural loans 33.0 36.1 39.3 39.6 39.8 40.0 33.0 36.1 39.6 39.6 39.6 39.4 11 Lease financing receivables 12.7 13.1 13.0 13.1 13.4 13.5 12.7 13.1 13.0 13.1 13.4 13.5 12 All other loans 47.2 49.5 52.1 54.1 48.4 51.6 49.2 51.5 54.1 56.4 51.2 51.2 MEMO 13 Total loans and securities plus loans sold3'4 1,319.1 1,415.0 1,551.4 1,570.0 1,585.2 1,603.6 1,328.9 1,425.4 1,558.6 1,581.4 1,587.5 1,599.0 14 Total loans plus loans sold3-4 976.7 1,045.0 1,118.2 1,134.5 1,144.9 1,164.1 984.7 1,053.3 1,126.0 1,143.5 1,147.7 1,159.3 15 Total loans sold to affiliates3'4 2.8 2.9 2.5 2.4 2.4 2.5 2.8 2.9 2.5 2.4 2.4 2.5 16 Commercial and industrial loans plus loans sold4 360.2 394.6 409.7 414.9 419.4 425.0 362.3 396.9 411.6 417.3 418.1 423.3 17 Commercial and industrial loans sold4 2.2 2.3 1.9 1.8 1.9 1.9 2.2 2.3 1.9 1.8 1.9 1.9 18 Acceptances held 8.9 8.5 8.6 8.3 8.2 8.5 9.8 9.5 8.9 9.1 8.6 8.6 19 Other commercial and industrial loans 349.1 383.8 399.2 404.8 409.4 414.6 350.3 385.2 400.8 406.4 407.7 412.7 20 To U.S. addressees5 334.9 373.5 386.9 394.7 397.0 402.6 334.3 372.7 388.0 393.9 395.5 400.8 21 To non-U.S. addressees 14.2 10.3 12.3 10.1 12.4 12.1 16.1 12.4 12.7 12.5 12.2 12.0 22 Loans to foreign banks 19.0 13.5 14.5 12.7 12.4 13.2 20.0 14.5 14.5 13.6 12.9 13.0 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 shitted 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

A16 Domestic NonfinancialS tatistics • May 1984 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1981 1982 1983 1984 source Dec. Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Total nondeposit funds 1 Seasonally adjusted2 96.3 82.9' 90.9 88.4 77.9' 83.2' 85.0' 81.7' 96.2' 100.3' 98.2' 103.9^ 107.0 2 Not seasonally adjusted 98.1 84.9 90.5 90.1 78.6 se.O' 86.1 82.8 99.4 102.4 99.2 105.4 108.5 Federal funds, RPs, and other borrowings from nonbanks5 3 Seasonally adjusted 111.8 127.7'" 146.0 140.9 134.2' 132.5' 133.9' 134.9' 140.7' 140.5' 139.3' 142.7' 140.8 4 Not seasonally adjusted 113.5 129.7 145.6 142.6 134.9 135.3 135.1 136.0 143.9 142.7 140.3 144.2 142.3 5 Net balances due to foreign-related institutions, not seasonally adjusted -18.1 -47.7 -57.8 -55.2 -59.0' -si.y -51.5 -55.8 -47.0 -42.7 -43.6 -41.3 -36.6 6 Loans sold to affiliates, not seasonally adjusted4 2.8 2.9 2.8 2.7 2.7 2.6 2.6 2.6 2.5 2.4 2.4 2.5 2.8 MEMO 7 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted5 -22.4 -39.6 -48.7 -49.2 -50.9 -45.3 -46.3 -48.5 -42.9 -39.7 -38.7 -37.5 -34.7 8 Gross due from balances 54.9 72.2 76.3 75.8 77.4 73.6 74.7 76.4 76.5 75.2 73.0 71.9 73.4 9 Gross due to balances 32.4 32.6 27.6 26.6 26.5 28.3 28.3 27.9 33.6 35.5 34.3 34.5 38.7 10 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted6 4.3 -8.1 -9.1 -6.0 -8.0 -6.6 -5.1 -7.3 -4.1 -3.0 -4.9 -3.9 -1.9 11 Gross due from balances 48.1 54.7 55.8 53.9 55.2 53.5 53.5 55.4 53.1 53.6 52.7 50.6 49.5 12 Gross due to balances 52.4 46.6 46.7 47.9 47.2 47.0 48.3 48.0 49.0 50.6 47.8 46.7 47.6 Security RP borrowings 13 Seasonally adjusted' 59.0 71.(K 84.7 81.4 77.3' 76.1' 78.1' 79.9r 83.3' 84.8' 85.5' 85.5 14 Not seasonally adjusted 59.2 71.2 82.7 81.5 76.2 77.0 77.3 79.1 84.6 85.1 84.6 86.5 85.1 U.S. Treasury demand balances8 15 Seasonally adjusted 12.2 12.8' 11.3 13.0 21.7' 20.3' 16.7' IS^ n.O' 13.1' 16.5' 20.6' 16.7 16 Not seasonally adjusted 11.1 10.8 12.5 13.2 21.8 16.4 17.9 24.7 7.5 10.8 19.6 22.3 17.5 Time deposits, $100,000 or more9 17 Seasonally adjusted 325.4 347.9' 287.7 287.4 285.9' 284.1' 282.8' 278.3' 280.7' 283.1' 284.3' 283.7' 288.9 18 Not seasonally adjusted 330.4 354.6' 285.5 284.0 281.5' 284.4' 284.7' 280.3' 283.0' 288.1' 287.1' 284.9' 288.6 1. Commercial banks are those in the 50 states and the District of Columbia banks, term federal funds, overdrawn due from bank balances, loan RPs, and with national or state charters plus agencies and branches of foreign banks, New participations in pooled loans. Includes averages of daily figures for member York investment companies majority owned by foreign banks, and Edge Act banks and averages of current and previous month-end data for foreign-related corporations owned by domestically chartered and foreign banks. institutions. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 4. Loans initially booked by the bank and later sold to affiliates that are still nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. held by affiliates. Averages of Wednesday data. Includes averages of Wednesday data for domestically chartered banks and 5. Averages of daily figures for member and nonmember banks. averages of current and previous month-end data for foreign-related institutions. 6. Averages of daily data. 3. Other borrowings are borrowings on any instrument, such as a promissory 7. Based on daily average data reported by 122 large banks. note or due bill, given for the purpose of borrowing money for the banking 8. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at business. This includes borrowings from Federal Reserve Banks and from foreign commercial banks. Averages of daily data. 9. Averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Banking Institutions A17 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1982 1983 Dec. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and securities, excluding interbank 1,370.3 1,392.2 1,403.8 1,411.9 1,435.1 1,437.4 1,457.0 1,466.1 1,483.0 1,502.3 11,,552255..22 2 Loans, excluding interbank 1,000.7 1,001.7 1,005.1 1,007.5 1,025.6 1,029.1 1,043.4 1,049.7 1,060.3 1,075.5 1,095.1 3 Commercial and industrial 356.7 358.0 357.9 356.7 360.1 361.1 363.0 364.0 367.0 372.8 380.8 4 Other 644.0 643.7 647.2 650.8 665.6 668.0 680.4 685.7 693.3 702.7 714.4 5 U.S. Treasury securities 129.0 150.6 155.5 160.9 166.0 165.1 167.5 171.2 176.8 180.4 181.4 6 Other securities 240.5 239.9 243.3 243.5 243.5 243.3 246.1 245.2 245.9 246.4 248.7 7 Cash assets, total 184.4 168.9 170.1 164.5 176.9 168.7 176.9 160.0 164.0 179.0 190.5 8 Currency and coin 23.0 19.9 20.4 20.3 21.3 20.7 21.0 20.8 20.5 22.3 23.3 9 Reserves with Federal Reserve Banks 25.4 20.5 23.9 22.4 18.8 20.6 22.5 15.4 19.7 17.6 18.6 10 Balances with depository institutions . 67.6 67.1 66.1 65.6 69.7 67.1 69.0 66.7 67.1 70.9 75.6 11 Cash items in process of collection ... 68.4 61.5 59.6 56.3 67.1 60.3 64.4 56.9 56.6 69.0 73.0 12 Other assets2 265.3 257.9 252.4 248.3 253.2 254.5 257.2 252.3 253.0 261.9 253.8 13 Total assets/total liabilities and capital ... 1,820.0 1,818.9 1,826.3 1,824.8 1,865.2 1,860.6 1,891.0 1,878.4 1,900.0 1,943.9 1,969.5 14 Deposits 1,361.8 1,374.2 1,368.0 1,370.8 1,402.7 1,396.5 1,420.1 1,408.1 1,419.5 1,459.2 1,482.6 15 Demand 363.9 333.4 329.2 324.5 344.4 334.2 344.7 328.1 331.3 358.1 371.0 16 Savings 296.4 419.2 426.9 440.2 445.3 447.5 449.0 448.8 451.5 458.3 460.7 17 Time 701.5 621.6 611.9 606.1 613.1 614.8 626.4 631.2 636.8 642.8 650.8 18 Borrowings 215.1 211.3 224.0 214.1 221.2 217.5 217.2 217.8 226.8 219.7 216.3 19 Other liabilities 109.2 103.5 102.3 104.7 104.3 105.5 107.6 107.1 106.5 112.6 117.9 20 Residual (assets less liabilities) 133.8 130.0 132.0 135.1 137.0 141.0 146.1 145.4 147.2 152.4 152.8 MEMO 21 U.S. Treasury note balances included in borrowing 10.7 9.6 17.8 2.7 19.3 19.3 14.8 20.8 22.5 2.8 8.8 22 Number of banks 14,787 14,819 14,823 14,817 14,826 14,785 14,795 14,804 14,800 14,799 14,796 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and securities, excluding interbank 1,429.7 1,451.3 1,460.8 1,467.6 1,491.5 1,494.1 1,515.4 1,525.4 1,541.8 1,563.2 1,586.8 24 Loans, excluding interbank 1,054.8 1,054.5 1,055.7 1,056.4 1,075.2 1,078.8 1,094.9 1,102.5 1,112.2 1,129.2 1,149.3 25 Commercial and industrial 395.3 395.9 393.5 391.7 395.3 397.7 400.6 402.7 405.3 412.0 420.1 26 Other 659.5 658.6 662.2 664.7 679.9 681.2 694.3 699.8 706.8 717.2 729.2 27 U.S. Treasury securities 132.8 155.3 160.2 166.1 171.3 170.3 172.7 176.1 182.0 185.9 186.9 28 Other securities 242.1 241.5 244.9 245.2 245.1 245.0 247.8 246.9 247.7 248.1 250.6 29 Cash assets, total 200.7 185.5 186.3 180.3 193.5 185.2 193.3 174.7 178.4 195.0 205.0 30 Currency and coin 23.0 19.9 20.4 20.3 21.3 20.7 21.1 20.9 20.5 22.3 23.4 31 Reserves with Federal Reserve Banks 26.8 22.0 25.4 23.8 20.0 21.9 24.0 16.6 20.8 19.1 19.7 32 Balances with depository institutions . 81.4 81.0 79.8 78.9 84.0 81.2 82.8 79.3 79.5 83.6 88.0 33 Cash items in process of collection ... 69.4 62.6 60.7 57.3 68.2 61.4 65.4 58.0 57.6 70.0 74.0 34 Other assets2 341.7 325.4 317.8 309.5 318.1 318.7 324.6 320.9 318.8 329.7 321.3 35 Total assets/total liabilities and capital .. . 1,972.1 1,962.2 1,964.9 1,957.4 2,003.2 1,998.0 2,033.3 2,021.0 2,039.1 2,088.0 2,113.1 36 Deposits 1,409.7 1,419.5 1,411.0 1,413.1 1,443.8 1,438.1 1,461.4 1,448.9 1,459.0 1,499.4 1,524.8 37 Demand 376.2 345.7 341.1 336.4 356.4 346.4 356.6 340.0 343.2 369.9 383.2 38 Savings 296.7 419.7 427.3 440.7 445.7 448.0 449.5 449.3 452.0 458.8 461.3 39 Time 736.7 654.1 642.6 636.0 641.6 643.8 655.3 659.5 663.8 670.6 680.4 40 Borrowings 278.3 269.9 281.3 269.5 278.2 277.9 280.5 282.6 289.6 282.5 275.1 41 Other liabilities 148.4 141.1 138.6 137.9 142.3 139.1 143.4 142.3 141.5 151.9 158.6 42 Residual (assets less liabilities) 135.7 131.9 133.9 137.0 138.9 142.9 148.0 147.3 149.1 154.2 154.7 MEMO 43 U.S. Treasury note balances included in borrowing 10.7 9.6 17.8 2.7 19.3 19.3 14.8 20.8 22.5 2.8 8.8 44 Number of banks 15,329 15,376 15,390 15,385 15,396 15,359 15,370 15,382 15,383 15,382 15,380 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

A18 Domestic Nonfinancial Statistics • May 1984 1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More December 31, 1982, Assets and Liabilities Millions of dollars, Wednesday figures 1984 AAccccoouunntt Feb. 29r Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 1 Cash and balances due from depository institutions 86,720 82,577 96,141 86,207 83,347 90,760 87,341 90,982 91,294 2 Total loans, leases and securities, net 742,750 737,465 739,549 736,817 737,184 746,871 745,896 751,455 751,095 Securities 3 U.S. Treasury and govt, agency 80,186 79,773 80,226 79,025 78,682 79,190 79,267 79,894 78,649 4 Trading account 10,952 10,581 11,015 10,774 10,452 11,173 11,534 12,278 11,431 .•> Investment account, by maturity 69,234 69,192 69,212 68,250 68,230 68,016 67,733 67,616 67,217 6 One year or less 18,139 18,267 18,378 18,254 18,549 18,383 18,221 18,064 18,251 7 Over one through five years 38,705 38,330 38,093 37,316 36,999 36,994 36,871 36,718 36,119 8 Over five years 12,389 12,595 12,741 12,681 12,682 12,639 12,642 12,834 12,847 9 Other securities 49,137 49,454 49,738 49,235 49,429 48,779 48,439 49,767 49,988 10 Trading account 3,214 3,672 3,884 3,636 3,916 3,952 3,590 5,490 5,707 11 Investment account 45,923 45,782 45,854 45,599 45,514 44,827 44,849 44,277 44,281 12 States & political subdivisions, by maturity 41,808 41,726 41,787 41,538 41,357 40,769 40,757 40,180 40,138 13 One year or less 5,085 4,882 4,879 4,843 4,794 4,648 4,656 4,909 4,856 14 Over one year 36,723 36,844 36,908 36,694 36,564 36,120 36,101 35,270 35,282 IS Other bonds, corporate stocks and securities 4,115 4,055 4,067 4,061 4,156 4,058 4,092 4,097 4,143 16 Other trading account assets 1,853 2,070 2,016 1,957 1,983 2,217 2,088 2,636 2,491 Loans and leases 17 Federal funds sold1 46,880 42,419 43,828 39,701 40,871 45,683 45,961 41,631 41,733 18 To commercial banks 31,653 29,169 30,611 26,880 26,939 31,751 32,632 28,454 28,373 19 To nonbank brokers and dealers in securities 9,409 8,139 8,345 8,269 9,095 9,166 8,481 8,536 8,634 20 To others 5,818 5,111 4,872 4,552 4,837 4,766 4,847 4,641 4,725 21 Other loans and leases, gross 579,456 578,594 578,585 581,713 581,026 585,642 584,830 592,111 592,922 22 Other loans, gross 567,970 567,091 567,090 570,218 569,579 574,171 573,372 580,650 581,446 23 Commercial and industrial 226,943 228,546 228,339 231,031 231,104 232,463 232,352 234,419 234,707 24 Bankers' acceptances and commercial paper .... 3,517 3,928 3,415 3,656 3,575 3,487 3,288 3,330 3,224 25 All other 223,426 224,618 224,924 227,375 227,530 228,976 229,064 231,089 231,484 26 U.S. addressees 216,531 217,890 218,165 220,678 220,780 222,100 222,432 224,485 225,064 27 Non-U.S. addressees 6,894 6,728 6,759 6,697 6,750 6,876 6.632 6,604 6,420 28 Real estate loans 145,450 145,800 146,608 146,790 146,784 147,436 147,776 148,227 148,510 29 To individuals for personal expenditures 93,454 93,371 93,539 93,630 94,028 94,382 94,625 95,143 95,899 30 To depository and financial institutions 40,718 40,178 39,024 39,586 38,991 40,049 39,900 41,000 40,451 31 Commercial banks in the U.S 8,616 8,369 7,915 7,786 7,650 7,927 8,148 8,475 8,614 32 Banks in foreign countries 7,316 6,800 6,523 6,854 7,019 6,991 6,790 6,962 6,961 33 Nonbank depository and other financial institutions. 24,785 25,009 24,585 24,946 24,322 25,131 24,962 25,563 24,875 34 For purchasing and carrying securities 15,712 13,602 14,410 13,033 12,680 12,959 12,609 13,848 14,360 35 To finance agricultural production 7,361 7,397 7,438 7,462 7,403 7,460 7,396 7,455 7,477 36 To states and political subdivisions 21,107 20,993 21,111 21,298 21,429 21,612 21,640 22,322 22,479 37 To foreign governments and official institutions .... 4,499 4,526 4,579 4,771 4,675 4,536 4,411 4,470 4,481 38 All other 12,727 12,676 12,042 12,618 12,484 13,273 12,662 13,765 13,082 39 Lease financing receivables 11,486 11,503 11,495 11,495 11,447 11,471 11,457 11,461 11,475 40 LESS: Unearned income 5,197 5,182 5,199 5,204 5,253 5,221 5,223 5,105 5,139 41 Loan and lease reserve 9,566 9,662 9,645 9,610 9,556 9,419 9,466 9,480 9,547 42 Other loans and leases, net 564,694 563,749 563,740 566,899 566,218 571,002 570,141 577,527 578,235 43 All other assets 137,954 138,999 131,862 131,964 137,644 143,404 142,436 138,708 135,392 44 Total assets 967,424 959,041 967,552 954,988 958,175 981,035 975,673 981,145 977,781 Deposits 45 Demand deposits 185,654 174,470 180,302 171,550 176,086 187,445 183,475 184,830 178,982 46 Individuals, partnerships, and corporations 140,432 134,167 138,701 131,648 134,156 140,978 140,631 140,530 137,178 47 States and political subdivisions 5,447 4,347 4,389 4,650 4,250 4,609 5,017 4,940 4,742 48 U.S. government 2,446 2,043 2,445 1,105 1,736 3,624 2,504 3,911 2,854 49 Depository institutions in U.S 22,624 19,961 20,166 20,318 21,285 22,640 20,436 20,898 19,213 50 Banks in foreign countries 6,376 5,866 6,076 5,698 6,292 5,723 5,875 5,982 5,877 51 Foreign governments and official institutions 969 818 786 868 734 802 881 814 837 52 Certified and officers' checks 7,360 7,268 7,739 7,262 7,633 9,068 88,,113322 77,,775555 88,,228822 53 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers).. 32,787 33,688 33,395 33,224 32,899 35,426 35,353 35,857 33,180 54 Nontransaction balances 411,094 412,712 412,978 413,308 415,351 415,594 415,886 414,329 413,224 55 Individuals, partnerships and corporations 382,522 384,066 384,077 384,384 386,014 386,854 386,760 385,109 383,907 56 States & political subdivisions 18,247 18,317 18,259 18,353 18,698 18,072 18,212 18,204 18,482 57 U.S. government 406 395 402 395 390 390 396 404 393 58 Depository institutions in U.S 7,145 7,039 7,314 7,302 7,387 7,436 7,342 7,196 7,004 59 Foreign governments, official institutions and banks .. 2,774 2,894 2,926 2,874 2,862 2,842 3,175 3,415 3,439 60 Liabilities for borrowed money 181,504 182,608 182,131 178,863 175,644 178,914 180,546 182,806 188,438 61 Borrowings from federal reserve banks 486 30 1,825 178 20 60 1,992 40 4,931 62 Treasury tax-and-loan notes 16,207 10,157 6,902 13,032 10,636 3,390 2,579 10,573 16,641 63 All other liabilities for borrowed money2 164,811 172,421 173,404 165,654 164,988 175,464 175,975 172,192 166,865 64 Other liabilities and subordinated note and debentures 90,980 90,119 93,193 92,858 93,066 97,452 93,893 97,240 98,008 65 Total liabilities 902,018 893,598 901,999 889,803 893,046 914,831 909,153 915,062 911,833 66 Residual (total assets minus total liabilities)3 65,406 65,443 65,554 65,186 65,129 66,204 66,519 66,083 65,948 1. Includes securities purchased under agreements to resell. 3. This is not a measure of equity capital for use in capital adequacy analysis or 2. Includes federal funds purchased and securities sold under agreements to for other analytic uses, repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. 1.27 LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1 Billion or More on December 31, 1977, Assets and LiabilitiesA ASeries Discontinued. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A19 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1984 AAccccoouunntt Feb. 29 Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 1 Cash and balances due from depository institutions 19,057 19,047 25,111 19,240 19,473 21,505 21,259 20,578 23,503 2 Total loans, leases and securities, net1 156,706 152,599 154,979 154,310 153,271 158,749 154,360 155,934 158,034 Securities 5 Investment account, by maturity 10,868 10,953 10,734 10,353 10,467 10,616 10,410 10,370 10,231 6 1,885 1,897 1,894 1,863 2,260 2,007 1,960 1,954 2,032 7 Over one through five years 7,796 7,696 7,486 7,142 6,858 7,266 7,106 7,049 6,838 8 Over five years 1,186 1,359 1,355 1,348 1,350 1,344 1,344 1,367 1,362 11 Investment account 9,543 9,584 9,636 9,634 9,702 9,306 9,407 9,814 9,798 1? States and political subdivisions, by maturity 8,718 8,776 8,818 8,812 8,777 8,498 8,581 8,978 8,952 13 One year or less 1,292 1,293 1,272 1,278 1,278 1,095 1,106 1,535 1,534 14 Over one year 7,425 7,483 7,546 7,534 7,498 7,402 7,474 7,443 7,418 15 Other bonds, corporate stocks and securities 826 808 818 822 925 808 827 836 846 Loans and leases 17 Federal funds sold3 12,902 10,542 12,842 11,540 11,455 14,872 11,707 10,240 12,163 18 To commercial banks 6,206 4,082 6,092 4,875 4,345 7,036 5,378 4,038 6,118 19 To nonbank brokers and dealers in securities 4,208 3,632 3,880 4,116 4,441 5,182 4,061 4,084 4,004 70 To others 2,489 2,828 2,870 2,548 2,669 2,654 2,267 2,118 2,040 71 Other loans and leases, gross 127,684 125,836 126,115 127,0% 125,943 128,285 127,175 129,852 130,242 ?? Other loans, gross 125,665 123,817 124,0% 125,078 123,920 126,275 125,166 127,837 128,226 73 Commercial and industrial 59,544 59,540 59,560 60,818 60,614 61,308 61,180 61,979 61,609 74 Bankers' acceptances and commercial paper 876 938 738 792 846 790 743 699 702 ?5 All other 58,668 58,602 58,822 60,027 59,768 60,518 60,437 61,281 60,907 76 U.S. addressees 57,124 57,262 57,529 58,796 58,498 59,149 59,223 60,131 59,809 77 Non-U.S. addressees 1,544 1,340 1,293 1,230 1,270 1,369 1,214 1,149 1,098 78 Real estate loans 21,065 21,126 21,339 21,361 21,381 21,439 21,443 21,478 21,608 7,9 To individuals for personal expenditures 13,337 13,385 13,328 13,322 13,357 14,236 14,255 14,253 14,486 30 To depository and financial institutions 12,746 12,342 11,593 12,324 11,693 11,902 11,479 12,054 12,024 31 Commercial banks in the United States 1,524 1,505 1,209 1,478 1,122 1,268 1,230 1,420 1,598 37 Banks in foreign countries 2,897 2,533 2,332 2,515 2,585 2,449 2,282 2,276 2,436 33 Nonbank depository and other financial institutions. 8,325 8,304 8,052 8,331 7,985 8,185 7,968 8,358 7,990 34 For purchasing and carrying securities 8,045 6,492 7,416 6,139 5,873 6,273 5,979 6,822 7,537 35 To finance agricultural production 621 608 627 614 569 571 563 544 542 36 To states and political subdivisions 6,148 6,118 6,160 6,237 6,321 6,319 6,302 6,421 6,529 37 To foreign governments and official institutions 735 760 757 825 783 605 456 452 437 38 All other 3,424 3,446 3,315 3,437 3,329 3,622 3,508 3,833 3,454 39 Lease financing receivables 2,019 2,018 2,019 2,018 2,023 2,010 2,010 2,015 2,016 40 LESS: Unearned income 1,441 1,433 1,461 1,462 1,478 1,499 1,509 1,502 1,529 41 Loan and lease reserve 2,849 2,883 2,888 2,852 2,818 2,832 2,832 2,840 2,871 47 Other loans and leases, net 123,393 121,520 121,766 122,782 121,647 123,954 122,835 125,510 125,842 43 All other assets4 61,843 64,044 59,397 60,579 61,517 64,986 66,199 66,714 62,795 44 Total assets 237,607 235,690 239,487 234,129 234,262 245,240 241,818 243,227 244,332 Deposits 45 Demand deposits 48,254 43,749 45,891 42,742 45,908 47,749 45,104 46,330 47,009 46 Individuals, partnerships, and corporations 32,850 30,723 31,359 29,164 30,906 31,734 30,361 31,553 32,132 47 States and political subdivisions 764 536 642 618 514 627 604 667 636 48 U.S. government 632 425 626 250 437 940 691 1,107 635 49 Depository institutions in the United States 5,362 3,813 4,378 4,530 4,961 5,150 4,421 4,779 4,261 50 Banks in foreign countries 5,048 4,539 4,616 4,360 4,991 4,391 4,532 4,521 4,552 51 Foreign governments and official institutions 800 599 591 693 553 594 580 623 652 52 Certified and officers' checks 2,796 3,114 3,679 3,127 3,546 4,312 3,914 3,080 4,139 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) .. 3,651 3,698 3,6% 3,709 3,677 4,004 4,056 4,214 33,,882233 54 Nontransaction balances 71,268 71,591 71,744 71,421 72,160 72,122 72,019 71,963 71,363 55 Individuals, partnerships and corporations 65,526 65,721 65,852 65,469 66,194 66,191 65,810 65,411 64,826 56 States and political subdivisions 2,194 2,208 2,140 2,153- 2,155 2,020 2,013 2,150 2,222 57 U.S. Government 18 18 26 26 28 28 29 29 28 58 Depository institutions in United States 2,482 2,504 2,632 2,668 2,663 2,754 2,600 2,605 2,495 59 Foreign governments, official institutions and banks .. 1,048 1,141 1,095 1,106 1,119 1,129 1,566 1,767 1,791 60 Liabilities for borrowed money 57,207 60,612 61,395 58,320 55,463 60,374 62,572 60,351 60,587 735 1,525 2,675 67 Treasury tax-and-loan notes 3,984 2,470 1,791 3,366 2,789 822 699 3,116 4,284 63 All other liabilities for borrowed money5 53,223 58,142 58,869 54,954 52,674 59,552 60,348 57,235 53,628 64 Other liabilities and subordinated note and debentures.. 36,074 34,846 35,4% 36,786 36,051 39,441 36,420 38,843 40,147 65 Total liabilities 216,455 214,496 218,222 212,978 213,260 223,690 220,172 221,701 222,928 66 Residual (total assets minus total liabilities)6 21,153 21,194 21,265 21,151 21,002 21,550 21,647 21,525 21,404 1. Excludes trading account securities. 5. Includes federal funds purchased and securities sold under agreements to 2. Not available due to confidentiality. repurchase. 3. Includes securities purchased under agreements to resell. 6. Not a measure of equity capital for use in capital adequacy analysis or for 4. Includes trading account securities. other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic NonfinancialS tatistics • May 1984 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1984 AAccccoouunntt Feb. 29 Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 BANKS WITH ASSETS OF $1.4 BILLION OR MORE 1 Total loans and leases (gross) and investments adjusted1 717,243' 714,772 715,866 716,966 717,404 721,833 719,804 729,110 728,795 2 Total loans and leases (gross) adjusted1 586,067' 583,474 583,886 586,748 587,309 591,647 590,010 596,813 597,667 3 Time deposits in amounts of $100,000 or more 142,041' 143,218 142,937 142,647 143,392 142,417 141,964 141,242 141,228 4 Loans sold outright to affiliates—total2 2,538 2,546 2,490 3,010 3,066 3,102 3,095 3,092 3,220 5 Commercial and industrial 1,912 1,951 1,929 1,917 1,932 1,884 1,886 1,887 1,999 6 Other 626 595 561 1,093 1,134 1,218 1,209 1,205 1,220 7 Nontransaction savings deposits (including MMDA).... 153,399' 153,696 153,913 154,353 155,393 156,861 157,635 156,294 154,781 BANKS IN NEW YORK CITY 8 Total loans and leases (gross) and investments adjusted1,3 .. 153,268 151,327 152,026 152,271 152,100 154,776 152,092 154,818 154,718 9 Total loans and leases (gross) adjusted1 132,857 130,790 131,655 132,283 131,931 134,854 132,274 134,634 134,688 10 Time deposits in amounts of $100,000 or more 28,717 29,483 29,448 29,182 29,186 29,315 28,604 28,588 28,798 1. Exclusive of loans and federal funds transactions with domestic commercial nonconsolidated nonbank affiliates of the bank, the bank's holding company (if banks. not a bank), and nonconsolidated nonbank subsidiaries of the holding company. 2. Loans sold are those sold outright to a bank's own foreign branches, 3. Excludes trading account securities. 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS WITH ASSETS OF $1.4 BILLION OR MORE ON JUNE 30, 1980 Assets and Liabilities Millions of dollars, Wednesday figures 1984 AAccccoouunntt Feb. 29 Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 1 Cash and due from depository institutions. 6,662 6,062 6,416 6,119 6,841 6,782 7,087 6,770 6,938 2 Total loans and securities 44,619 43,580 44,778 45,197 46,895 44,903 45,342 44,888 45,492 3 U.S. Treasury and govt, agency securities1 4,666 4,663 4,658 4,631 4,376 4,663 4,501 4,480 4,480 4 Other securities1 741 760 762 755 772 777 756 789 791 5 Federal funds sold2 3,933 2,209 3,573 3,486 4,581 2,344 3,760 3,111 4,340 6 To commercial banks in the United States 3,488 1,773 3,220 3,097 4,296 2,024 3,502 2,778 4,048 7 To others 445 436 353 388 286 320 259 333 292 8 Other loans, gross 35,278 35,948 35,786 36,325 37,167 37,118 36,325 36,509 35,881 9 Commercial and industrial 20,212 20,333 20,206 20,174 20,163 20,752 1199,,661177 1199,,885511 1199,,773300 10 Bankers acceptances and commercial paper 2,966 3,067 3,045 2,944 3,024 2,837 3,017 3,122 3,101 11 All other 17,245 17,266 17,161 17,229 17,139 17,915 16,600 16,728 16,629 12 U.S. addressees 15,488 15,518 15,417 15,379 15,315 16,057 14,769 15,000 14,877 13 Non-U.S. addressees 1,757 1,748 1,744 1,850 1,824 1,858 1,831 1,728 1,752 14 To financial institutions 10,069 10,841 10,902 11,534 13,282 12,984 13,070 13,114 12,606 15 Commercial banks in the United States . 7,791 8,575 8,764 9,439 11,156 10,943 10,982 10,970 10,483 16 Banks in foreign countries 1,592 1,700 1,607 1,511 1,520 1,391 1,380 1,421 1,364 17 Nonbank financial institutions 685 565 531 584 607 650 709 722 759 18 To foreign govts, and official institutions3 .. 744 770 808 783 792 836 819 799 782 19 For purchasing and carrying securities .. 924 791 782 785 840 595 841 793 780 20 All other3 3,330 3,214 3,087 3,049 2,089 1,950 1,978 11,,995533 11,,998844 21 Other assets (claims on nonrelated parties) 13,863 13,856 14,090 14,031 14,029 13,701 13,960 14,447 14,427 22 Net due from related institutions 8,713 9,867 9,654 8,946 8,319 9,424 9,591 9,902 9,347 23 Total assets 73,856 73,364 74,938 74,294 76,084 74,810 75,981 7766,,000088 7766,,220055 24 Deposits or credit balances due to other than directly related institutions 19,678 19,938 20,388 20,116 20,752 20,518 20,170 20,012 19,838 25 Credit balances 192 136 186 175 138 204 168 147 166 26 Demand deposits 1,779 1,685 1,957 1,682 1,916 1,894 11,,884411 11,,992200 11,,772266 27 Individuals, partnerships, and corporations 896 784 854 854 850 926 826 826 773 28 Other 883 900 1,102 828 1,067 968 1,014 1,094 952 29 Time and savings deposits 17,707 18,116 18,245 18,259 18,697 18,420 18,161 17,945 1177,,994466 30 Individuals, partnerships, and corporations 15,165 15,392 15,358 15,414 15,797 15,478 15,135 14,817 14,854 31 Other 2,541 2,724 2,886 22,,8844((33 2,900 2,942 3,026 33,,112288 33,,009922 32 Borrowings from other than directly related institutions 31,792 32,395 32,781 31,778 31,464 32,630 33,070 33,487 33,268 33 Federal funds purchased4 10,848 10,773 10,674 9,807 8,356 10,309 10,223 9,541 10,113 34 From commercial banks in the United States 9,159 8,274 7,798 6,721 5,589 7,412 7,609 6,491 6,999 35 From others 1,689 2,499 2,875 3,086 2,767 2,897 2,614 3,050 3,114 36 Other liabilities for borrowed money.... 20,943 21,623 22,107 21,971 23,109 22,321 22,847 2233,,994466 2233,,115555 37 To commercial banks in the United States 17,712 18,491 18,962 18,802 19,954 19,414 19,836 20,801 19,932 38 To others 3,231 3,132 3,145 3,170 3,154 2,906 3,010 3,145 3,224 39 Other liabilities to nonrelated parties 14,581 14,560 14,764 14,612 14,644 14,169 14,740 15,062 15,119 40 Net due to related institutions 7,806 6,472 7,006 7,788 9,224 7,494 8,001 7,446 7,980 41 Total liabilities 73,856 73,364 74,938 74,294 76,084 74,810 75,981 76,008 76,205 MEMO 42 Total loans (gross) and securities adjusted5 33,339 33,232 32,794 32,660 31,444 31,936 30,859 31,140 30,961 43 Total loans (gross) adjusted5 27,932 27,810 27,375 27,274 26,297 26,496 25,602 25,871 25,690 1. Prior to Jan. 4, 1984 U.S. Government Agency securities were included in 4. Includes securities sold under agreements to repurchase. other securities. 5. Exclusive of loans to and federal funds sold to commercial banks in the 2. Includes securities purchased under agreements to resell. United States. 3. As of Jan. 4, 1984 loans to foreign governments and official institutions is reported as a separate item. Before that date it was included in all other loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

IPC Demand Deposits A21 1.31 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 1982 1983 1984 11997788 1199779922 11998800 11998811 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Dec/ Mar/ June' Sept. Dec. Mar. 1 All holders—Individuals, partnerships, and corporations 294.6 302.2 31S.5 288.9 291.7 272.0 281.9 280.3 293.7 279.3 2 Financial business 27.8 27.1 29.8 28.0 35.4 32.7 34.6 32.1 32.8 31.7 3 Nonfinancial business 152.7 157.7 162.8 154.8 150.5 139.9 146.9 150.2 161.3 150.3 4 Consumer 97.4 99.2 102.4 86.6 85.9 79.4 80.3 77.9 78.5 78.1 5 Foreign 2.7 3.1 3.3 2.9 3.0 3.1 3.0 2.9 3.3 3.3 6 Other 14.1 15.1 17.2 16.7 17.0 16.9 17.2 17.1 17.8 15.9 Weekly reporting banks 1982 1983 1984 11997788 1199779944 11998800 11998811 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Dec/ Mar/ June' Sept. Dec. Mar. 7 All holders—Individuals, partnerships, and corporations 147.0 139.3 147.4 137.5 144.2 133.0 139.6 136.3 146.2 139.2 8 Financial business 19.8 20.1 21.8 21.0 26.7 24.3 26.2 23.6 24.2 23.5 9 Nonfinancial business 79.0 74.1 78.3 75.2 74.3 68.9 72.8 72.9 79.8 76.4 10 Consumer 38.2 34.3 35.6 30.4 31.9 28.7 28.5 28.1 29.7 28.4 11 Foreign 2.5 3.0 3.1 2.8 2.9 3.0 2.8 2.8 3.1 3.2 12 Other 7.5 7.8 8.6 8.0 8.4 8.1 9.3 8.9 9.3 7.7 1. Figures include cash items in process of collection. Estimates of gross 3. After the end of 1978 the large weekly reporting bank panel was changed to deposits are based on reports supplied by a sample of commercial banks. Types of 170 large commercial banks, each of which had total assets in domestic offices depositors in each category are described in the June 1971 BULLETIN, p. 466. exceeding $750 million as of Dec. 31, 1977. See "Announcements," p. 408 in the 2. Beginning with the March 1979 survey, the demand deposit ownership May 1978 BULLETIN. Beginning in March 1979, demand deposit ownership survey sample was reduced to 232 banks from 349 banks, and the estimation estimates for these large banks are constructed quarterly on the basis of 97 sample procedure was modified slightly. To aid in comparing estimates based on the old banks and are not comparable with earlier data. The following estimates in billions and new reporting sample, the following estimates in billions of dollars for of dollars for December 1978 have been constructed for the new large-bank panel; December 1978 have been constructed using the new smaller sample; financial financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5; business, 27.0; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 6.8. other, 15.1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • May 1984 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1983 1984 11997788 11997799'' 11998800 11998811 11998822 IInnssttrruummeenntt DDeecc.. DDeecc.. DDeecc.. DDeecc.. DDeecc..22 Oct. Nov. Dec. Jan. Feb. Mar. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAUU iissssuueerrss 83,438 112,803 124,374 165,829' 166,67(K 175,150' 180,606' 185,852' 184,4^ 190,808' 200,631 FFiinnaanncciiaall ccoommppaanniieess33 DDeeaalleerr--ppllaacceedd ppaappeerr44 22 TToottaall 12,181 17,359 19,599 30,333' 34,634' 38,660' 41,459' 41,688' 39,884' 41,363' 43,167 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 3,521 2,784 3,561 6,045 2,516 2,195 2,341 2,441 2,087 1,765 1,767 DDiirreeccddyy ppllaacceedd ppaappeerr55 44 TToottaall 51,647 64,757 67,854 81,66c 84,130' 91,737' 93,878' 96,548' 98,495' 102,606' 107,421 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 12,314 17,598 22,382 26,914 32,034 34,622 35,001 35,566 37,636' 36,958' 39,617 66 NNoonnffiinnaanncciiaall ccoommppaanniieess66 19,610 30,687 36,921 53,836 47,906' 44,753' 45,269' 47,616' 46,04C 46,839' 50,043 Bankers dollar acceptances (not seasonally adjusted) 7 Total 33,700 45,321 54,744 69,226 79,543 72,902 77,919 78,309 73,450 74,367 73,221 Holder 8 Accepting banks 8,579 9,865 10,564 10,857 10,910 9,501 10,894 9,355 9,546 9,237 8,734 9 Own bills 7,653 8,327 8,963 9,743 9,471 8,212 9,558 8,125 7,814 7,897 7,040 10 Bills bought 927 1,538 1,601 1,115 1,439 1,289 1,337 1,230 1,732 1,340 1,694 Federal Reserve Banks 11 Own account 587 704 776 195 1,480 0 0 418 0 0 0 12 Foreign correspondents 664 1,382 1,791 1,442 949 483 573 729 729 777 896 13 Others 24,456 33,370 41,614 56,731 66,204 62,917 66,452 68,225 63,174 64,353 63,592 Basis 14 Imports into United States 8,574 10,270 11,776 14,765 17,683 14,829 14,906 15,649 15,028 15,495 15,107 15 Exports from United States 7,586 9,640 12,712 15,400 16,328 16,036 17,209 16,880 16,159 15,818 15,572 16 All other 17,541 25,411 30,257 39,060 45,531 42,036 45,806 45,781 42,262 43,055 42,542 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 Average rate 16.00 1982—Oct. 14 12.00 1982—Jan 15.75 1983—Feb. 15.75 Nov. 22 11.50 Feb 16.56 Mar. 16.50 Apr. 16.50 May 17.00 1983—Jan. 11 11.00 16.50 June 16.50 Feb. 28 10.50 June 16.50 July 16.00 Aug. 8 11.00 July 16.26 Aug. 15.50 Aug 14.39 Sept, 15.00 1984—Mar. 19 11.50 Sept 13.50 Oct. 14.50 Apr. 5 12.00 Oct 12.52 Nov. 14.00 Nov 11.85 Dec. 13.50 Dec 11.50 13.00 1984—Jan. 1983—Jan 11.16 Feb. Mar. Apr. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business Lending A23 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 6-10, 1984 Size of loan (in thousands of dollars) All Item sizes 1-24 25-49 50-99 100-499 500-999 an 1 d 0 o 0 v 0 e r SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 38,330,316 991,513 549,652 709,274 2,247,241 972,939 32,859,696 2 Number of loans 171,352 125,356 16,856 10,749 12,402 1,483 4,507 3 Weighted-average maturity (months) 1.1 4.6 4.2 3.5 4.2 3.1 .7 4 With fixed rates .7 4.0 3.8 2.0 2.5 1.5 .5 5 With floating rates 2.2 6.1 4.9 5.1 5.2 4.1 1.3 6 Weighted-average interest rate (percent per annum).. 11.06 14.13 13.45 13.33 12.66 11.99 10.75 7 Interquartile range1 10.45-11.24 13.24-14.93 12.55-14.20 12.13-14.54 11.57-13.80 11.46-12.68 10.40-10.89 8 With fixed rates 10.93 14.44 13.70 13.89 13.03 11.45 10.68 9 With floating rates 11.35 13.53 13.13 12.76 12.49 12.20 10.91 Percentage of amount of loans 10 With floating rate 32.6 33.9 44.7 49.6 69.3 72.4 28.3 11 Made under commitment 63.7 33.8 37.8 44.5 58.7 69.8 65.6 12 With no stated maturity 10.4 11.6 12.5 27.4 22.7 35.4 8.4 13 With one-day maturity 40.3 .1 .1 .2 .6 2.2 46.9 1-99 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 14 Amount of loans (thousands of dollars) 3,705,613 473,173 351,506 206,780 2,674,153 15 Number of loans 29,580 26,742 1,980 309 548 16 Weighted-average maturity (months) 48.0 40.4 39.6 42.2 50.9 17 With fixed rates 48.5 36.5 37.0 38.2 57.0 18 With floating rates 47.9 43.7 40.9 43.2 49.5 19 Weighted-average interest rate (percent per annum) .. 11.92 14.21 12.13 12.18 11.46 20 Interquartile range1 10.86-12.69 13.00-14.93 11.46-13.10 11.57-12.96 10.65-12.28 21 With fixed rates 12.33 15.24 11.29 12.15 11.33 22 With floating rates 11.78 13.31 12.53 12.18 11.49 Percentage of amount of loans 23 With floating rate 76.0 53.5 68.1 80.5 80.7 24 Made under commitment 73.9 31.1 69.3 81.1 81.5 1-24 25-49 50-99 500 and over CONSTRUCTION AND LAND DEVELOPMENT LOANS 25 Amount of loans (thousands of dollars) 2,278,565 189,847 358,574 249,161 909,700 571,282 26 Number of loans 43,012 23,372 10,406 3,977 4,978 279 27 Weighted-average maturity (months) 8.9 5.3 9.9 5.8 11.2 7.2 28 With fixed rates 4.3 5.4 7.6 5.0 3.2 2.2 29 With floating rates 13.5 5.1 12.0 7.5 20.1 9.3 30 Weighted-average interest rate (percent per annum) .. 13.34 14.03 13.38 13.80 13.77 12.22 31 Interquartile range1 12.00-14.20 13.27-14.45 12.37-14.50 12.92-14.76 12.00-14.21 11.57-12.69 32 With fixed rates 14.13 14.12 13.75 14.29 15.05 11.74 33 With floating rates 12.60 13.79 13.05 12.73 12.42 12.41 Percentage of amount of loans 34 With floating rate 51.3 26.7 53.6 31.5 48.5 71.3 35 Secured by real estate 91.3 80.8 99.5 96.2 97.8 77.1 36 Made under commitment 61.6 36.7 76.5 65.2 46.1 83.8 37 With no stated maturity 49.9 47.9 44.0 51.9 73.4 15.9 38 With one-day maturity 6.0 10.6 .5 18.8 4.3 5.3 Type of construction 39 1- to 4-family 44.1 41.6 55.5 29.4 22.3 78.8 40 Multifamily 2.3 2.7 1.5 1.5 2.8 2.2 41 Nonresidential .0 .0 .0 .0 .0 .0 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) 1,352,194 158,661 161,008 194,352 199,351 216,433 422,389 43 Number of loans 64,008 42,006 11,116 5,719 3,212 1,516 438 44 Weighted-average maturity (months) 8.5 8.6 9.5 8.9 8.6 10.6 6.7 45 Weighted-average interest rate (percent per annum) .. 13.50 14.12 14.22 14.12 13.90 14.00 12.27 46 Interquartile range1 12.63-14.45 13.50-14.75 13.66-14.76 13.51-14.93 13.24-14.38 13.08-14.45 11.53-12.75 By purpose of loan 4 4 8 7 O Fe th e e d r e r l i l v i e v s e t s o t c o k c k 1 1 3 2 . . 6 6 2 8 1 11 3 44 . .. 9 22 2 99 1 1 4 4 . . 0 2 6 4 1 1 3 3 . .6 8 1 6 13(.27)4 13(.27)1 1 1 3 1 . . 0 9 4 6 5 4 0 9 O Fa th rm er m cu a r c r h e i n n t e r o y p e a r n a d ti n e g q u e i x p p m e e n n s t e s 1 13 3 . . 8 8 1 6 1 1 4 4 . . 0 0 5 9 1 1 4 4 . . 0 1 4 9 14(.21)5 13(.291) 14(. 2 05) 11(.29)4 51 Other 13.47 14.42 14.56 14.42 14.05 14.13 12.69 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

A24 Domestic NonfinancialS tatistics • May 1984 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. 1984 1984, week ending IInnssttrruummeenntt 11998811 11998822 11998833 Jan. Feb. Mar. Apr. Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 MONEY MARKET RATES 1 Federal funds1'2 16.38 12.26 9.09 9.56 9.59 9.91 10.29 9.97 10.41 10.13 10.37 9.98 2 Discount window borrowing1-2-3 13.42 11.02 8.50 8.50 8.50 8.50 8.87 8.50 8.50 8.71 9.00 9.00 Commercial paper4-5 3 1-month 15.69 11.83 8.87 9.23 9.35 9.81 10.17 10.04 10.16 10.11 10.23 10.16 4 3-month 15.32 11.89 8.88 9.20 9.32 9.83 10.18 10.09 10.15 10.12 10.22 10.21 5 6-month 14.76 11.89 8.89 9.18 9.31 9.86 10.22 10.11 10.17 10.13 10.26 10.27 Finance paper, directly placed4-5 6 1-month 15.30 11.64 8.80 9.20 9.34 9.76 10.08 9.95 10.16 10.08 10.04 10.00 7 3-month 14.08 11.23 8.70 9.08 9.14 9.54 9.86 9.74 9.81 9.87 9.83 9.92 8 6-month 13.73 11.20 8.69 9.02 9.06 9.38 9.76 9.60 9.66 9.72 9.80 9.86 Bankers acceptances5-6 9 3-month 15.32 11.89 8.90 9.23 9.38 9.88 10.22 10.12 10.20 10.15 10.26 10.26 10 6-month 14.66 11.83 8.91 9.19 9.35 9.91 10.26 10.15 10.22 10.15 10.33 10.34 Certificates of deposit, secondary market7 11 1-month 15.91 12.04 8.96 9.33 9.43 9.91 10.24 10.18 10.26 10.19 10.28 10.24 12 3-month 15.91 12.27 9.07 9.42 9.54 10.08 10.41 10.34 10.40 10.33 10.42 10.46 13 6-month 15.77 12.57 9.27 9.56 9.73 10.37 10.73 10.59 10.69 10.61 10.76 10.84 14 Eurodollar deposits, 3-month8 16.79 13.12 9.56 9.78 9.91 10.40 10.83 10.61 10.79 10.73 10.89 10.89 U.S. Treasury bills5 Secondary market9 15 3-month 14.03 10.61 8.61 8.90 9.09 9.52 9.69 9.72 9.74 9.65 9.76 9.64 16 6-month 13.80 11.07 8.73 9.02 9.18 9.66 9.84 9.85 9.91 9.79 9.86 9.79 17 1-year 13.14 11.07 8.80 9.07 9.20 9.67 9.95 9.86 9.% 9.82 9.98 10.00 Auction average10 18 3-monVh 14.029 10.686 8.63 8.93 9.03 9.44 9.69 9.76 9.67 9.66 9.80 9.64 19 6-month 13.776 11.084 8.75 9.06 9.13 9.58 9.83 9.88 9.83 9.82 9.92 9.74 1133..115599 1111..009999 88..8866 99..0044 99..2244 99..6688 99..8866 99..8866 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 14.78 12.27 9.57 9.90 10.04 10.59 10.90 10.79 10.91 10.76 10.94 10.98 22 2-year 14.56 12.80 10.21 10.64 10.79 11.31 11.69 11.54 11.67 11.55 11.69 11.79 23 2-w-year13. 11.80 11.85 24 3-year 14.44 12.92 10.45 10.93 11.05 11.59 11.98 11.80 11.% 11.84 11.99 12.08 25 5-year 14.24 13.01 10.80 11.37 11.54 12.02 12.37 12.20 12.36 12.24 12.38 12.47 26 7-year 14.06 13.06 11.02 11.58 11.75 12.25 12.56 12.39 12.54 12.41 12.58 12.66 27 10-year 13.91 13.00 11.10 11.68 11.84 12.32 12.63 12.46 12.61 12.49 12.66 12.74 28 20-year 13.72 12.92 11.34 11.82 12.00 12.45 12.65 12.51 12.54 12.52 12.73 12.78 29 30-year 13.44 12.76 11.18 11.75 11.95 12.38 12.65 12.47 12.60 12.50 12.70 12.76 Composite14 30 Over 10 years (long-term) 12.87 12.23 10.84 11.29 11.44 11.90 12.17 12.00 12.13 12.05 12.21 12.27 State and local notes and bonds Moody's series15 31 Aaa 10.43 10.88 8.80 9.00 9.04 9.41 9.54 9.40 9.50 9.60 9.50 9.55 32 Baa 11.76 12.48 10.17 10.10 9.94 10.22 10.30 10.25 10.30 10.30 10.30 10.30 33 Bond Buyer series16 11.33 11.66 9.51 9.63 9.64 9.94 9.96 9.93 10.04 9.97 9.89 9.94 Corporate bonds Seasoned issues17 34 AH industries 15.06 14.94 12.78 12.92 12.88 13.33 13.59 13.48 13.53 13.51 13.60 13.70 35 Aaa 14.17 13.79 12.04 12.20 12.08 12.57 12.81 12.71 12.74 12.71 12.79 12.95 36 Aa 14.75 14.41 12.42 12.71 12.70 13.22 13.48 13.33 13.42 13.36 13.48 13.62 37 A 15.29 15.43 13.10 13.13 13.11 13.54 13.77 13.70 13.74 13.73 13.75 13.84 38 Baa 16.04 16.11 13.55 13.65 13.59 13.99 14.31 14.15 14.21 14.22 14.37 14.41 39 A-rated, recently-offered utility bond18 16.63 15.49 12.73 12.99 13.05 13.63 13.% 13.80 13.86 13.87 14.05 14.18 MEMO: Dividend/price ratio19 40 Preferred stocks 12.36 12.53 11.02 11.35 11.16 11.39 11.66 11.52 11.79 11.63 11.62 11.60 41 Common stocks 5.20 5.81 4.40 4.27 4.59 4.63 4.64 4.57 4.63 4.70 4.62 4.61 1. Weekly and monthly figures are averages of all calendar days, where the 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields rate for a weekend or holiday is taken to be the rate prevailing on the preceding are read from a yield curve at fixed maturities. Based on only recently issued, business day. The daily rate is the average of the rates on a given day weighted by actively traded securities. the volume of transactions at these rates. 13. Each biweekly figure is the average of five business days ending on the 2. Weekly figures are averages for statement week ending Wednesday. Monday following the date indicated. Until Mar. 31, 1983, the biweekly rate 3. Rate for the Federal Reserve Bank of New York. determined the maximum interest rate payable in the following two-week period 4. Unweighted average of offering rates quoted by at least five dealers (in the on 2-!/2-year small saver certificates. (See table 1.16.) case of commercial paper), or finance companies (in the case of finance paper). 14. Averages (to maturity or call) for all outstanding bonds neither due nor Before November 1979, maturities for data shown are 30-59 days, 90-119 days, callable in less than 10 years, including several very low yielding "flower" bonds. and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150- 15. General obligations based on Thursday figures; Moody's Investors Service. 179 days for finance paper. 16. General obligations only, with 20 years to maturity, issued by 20 state and 5. Yields are quoted on a bank-discount basis, rather than an investment yield local governmental units of mixed quality. Based on figures for Thursday. basis (which would give a higher figure). 17. Daily figures from Moody's Investors Service. Based on yields to maturity 6. Dealer closing offered rates for top-rated banks. Most representative rate on selected long-term bonds. (which may be, but need not be, the average of the rates quoted by the dealers). 18. Compilation of the Federal Reserve. This series is an estimate of the yield 7. Unweighted average of offered rates quoted by at least five dealers early in on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of the day. call protection. Weekly data are based on Friday quotations. The Federal Reserve 8. Calendar week average. For indication purposes only. previously published interest rate series on both newly-issued and recently- 9. Unweighted average of closing bid rates quoted by at least five dealers. offered Aaa utility bonds, but discontinued these series in January 1984 owing to 10. Rates are recorded in the week in which bills are issued. Beginning with the the lack of Aaa issues. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the 19. Standard and Poor's corporate series. Preferred stock ratio based on a percentage yield (on a bank discount basis) that they would accept to two decimal sample of ten issues: four public utilities, four industrials, one financial, and one places. Thus, average issuing rates in bill auctions will be reported using two transportation. Common stock ratios on the 500 stocks in the price index. rather than three decimal places. 11. Yields are based on closing bid prices quoted by at least five dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets A25 1.36 STOCK MARKET Selected Statistics 1983 1984 IInnddiiccaattoorr 11998811 11998822 11998833 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 74.02 68.93 92.63 93.96 96.70 96.78 95.36 94.92 96.16 90.60 90.66 90.67 2 Industrial 85.44 78.18 107.45 109.50 112.76 112.87 110.77 110.60 112.16 105.44 105.92 106.56 3 Transportation 72.61 60.41 89.36 88.06 94.56 95.41 97.68 98.79 97.98 86.33 86.10 83.61 4 Utility 38.90 39.75 47.00 46.94 48.16 48.73 48.50 47.00 47.43 45.67 44.83 43.86 5 Finance 73.52 71.99 95.34 95.76 97.00 94.79 94.48 94.25 95.79 89.95 89.50 88.22 6 Standard & Poor's Corporation (1941-43 = 10)' ... 128.05 119.71 160.41 162.42 167.16 167.65 165.23 164.36 166.39 157.70 157.44 157.60 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 171.79 141.31 216.48 230.10 234.36 223.76 218.42 221.31 224.83 207.95 210.09 207.66 Volume of trading (thousands of shares) 8 New York Stock Exchange 46,967 64,617 85,418 74,191 82,866 85,445 86,405 88,041 105,518 96,641 84,328 85,874 9 American Stock Exchange 5,346 5,283 8,215 6,329 6,629 7,751 6,160 6,939 7,167 6,431 5,382 5,863 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers-dealers3 14,411 13,325 23,000 19,437 20,124 21,030 22,075 23,000 23,132 22,557 22,668 f 11 Margin stock4 14,150 12,980 22,720 19,090 19,760 20,690 21,790 22,720 22,870 22,330 22,460 I 12 Convertible bonds 259 344 279 346 363 339 285 279 261 226 208 n.a. 13 Subscription issues 2 1 1 1 1 1 1 1 1 1 * Free credit balances at brokers5 14 Margin-account 3,515 5,735 6,620 6,350 6,550 6,630 6,512 6,620 6,51(K 6,420 6,520 15 Cash-account 7,150 8,390 8,430 8,035 7,930 7,695 7,599 8,430 8,230r 8,420 8,265 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 37.0 21.0 41.0 23.0 24.0 35.0 48.0 41.0 43.0 48.0 46.0 18 40-49 24.0 24.0 22.0 28.0 27.0 24.0 22.0 22.0 21.0 20.0 20.0 19 50-59 17.0 24.0 16.0 20.0 21.0 17.0 17.0 16.0 15.0 13.0 14.0 n.a. 20 60-69 10.0 14.0 9.0 13.0 12.0 10.0 10.0 9.0 9.0 8.0 9.0 1 21 70-79 6.0 9.0 6.0 9.0 9.0 7.0 7.0 6.0 6.0 6.0 6.0 1 22 80 or more 6.0 8.0 6.0 7.0 7.0 7.0 6.0 6.0 6.0 5.0 5.0 t Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)7 25,870 35,598 58,329 50,267 51,211 54,029 57,490 58,329 62,670 63,411 65,855 I Distribution by equity status (percent) 1 24 Net credit status 58.0 62.0 63.0 62.0 64.0 63.0 63.0 63.0 61.0 59.0 61.0 n.a. Debt status, equity of 1 25 60 percent or more 31.0 29.0 28.0 31.0 29.0 28.0 29.0 28.0 29.0 29.0 28.0 1 26 Less than 60 percent 11.0 9.0 9.0 7.0 7.0 9.0 8.0 9.0 10.0 12.0 11.0 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

A26 Domestic Nonfinancial Statistics • May 1984 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1983 1984 AAccccoouunntt 11998811 11998822 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.? Savings and loan associations 1 Assets 664,167 707,646 729,920 733,074 741,416 746,998 748,491 756,953 763,365 771,705 772,723 780,107 796,968 2 Mortgages 518,547 483,614 473,481 474,510 479,322 48?, 178 482,305 485,366 489,720 493,432 494,682 497,987 502,646 3 Cash and investment securities1 63,123 85,438 104,245 102,063 102,546 99,812 100,243 101,553 101,553 103,395 101,883 103,917 108,719 4 Other 82,497 138,594 152,194 156,501 159,548 164,008 165,943 170,034 172,259 174,878 176,158 178,203 185,603 5 Liabilities and net worth 664,167 707,646 729,920 733,074 741,416 746,998 748,491 756,953 763,365 771,705 772,723 780,107 796,968 6 Savings capital 525,061 567,961 601,731 605,282 610,826 615,369 618,002 622,577 625,013 634,076 639,694 644,588 656,844 7 Borrowed money 88,782 97,850 82,731 84,342 84,694 84,267 85,976 87,367 89,235 91,443 86,322 86,526 93,557 8 FHLBB 62,794 63,861 54,392 54,234 53,579 52,182 52,179 52,678 51,735 52,626 50,880 50,465 50,766 9 Other 25,988 33,989 28,339 30,108 31,115 32,085 33,797 34,689 37,500 38,817 35,442 36,061 42,791 10 Loans in process2 6,385 9,934 14,548 15,998 17,094 17,967 18,812 19,209 19,728 21,117 21,498 21,939 22,947 11 Other 15,544 15,602 17,936 15,140 17,527 18,615 15,496 17,458 19,179 15,275 15,777 17,520 14,908 12 Net worth3 28,395 26,233 27,522 28,310 28,369 28,626 29,017 29,551 29,938 30,911 30,930 31,473 31,654 13 MEMO: Mortgage loan commitments outstanding* 15,225 18,054 30,148 30,691 31,733 32,415 32,483 32,798 34,780 32,996 33,504 36,150 39,741 Mutual savings banks5 14 Assets 175,728 174,197 180,071 181,975 182,822 183,612 186,041 187,385' 189,149' 193,535' 194,217' 195,168 Loans 15 Mortgage 99,997 94,091 93,587 94,000 93,998 93,941 94,831 94,863' 95,600 97,356' 97,704' 97,895 16 Other 14,753 16,957 17,893 17,438 18,134 17,929 17,830 19,589' 19,675' 19,129' 20,469' 21,694 Securities 17 U.S. government6 9,810 9,743 13,110 13,572 13,931 14,484 14,794 14,634' 15,092' 15,36C 1155,,116677'' 15,667 18 State and local government 2,288 2,470 2,260 2,257 2,248 2,247 2,244 2,195' 2,195' 2,177 2,180 2,054 19 Corporate and other7 37,791 36,161 39,142 40,206 40,667 41,045 41,889 42,092' 42,629' 43,58(K 43,541' 43,439 20 Cash 5,442 6,919 5,960 6,224 5,322 5,168 5,560 4,993' 4,983' 6,263' 4,783' 4,580 21 Other assets 5,649 7,855 8,118 8,276 8,522 8,799 8,893 9,019' 8,975' 9,67 C 10,373' 9,839 22 Liabilities 175,728 174,197 180,071 181,975 182,822 183,612 186,041 187,385' 189,149' 193,535' 194,217' 195,168 n a. 23 Deposits 155,110 155,196 162,287 163,990 164,848 165,087 165,887 168,064' 169,356' 172,665' 173,637' 174,349 24 Regular8 153,003 152,777 159,840 161,573 162,271 162,600 162,998 165,575' 167,006' 170,135' 171,099' 171,935 25 Ordinary savings 49,425 46,862 40,467 40,451 39,983 39,360 39,768 38,485' 38,448 38,554' 37,999 37,642 26 Time 103,578 96,369 83,506 84,705 85,445 86,446 85,603 91,795' 93,073' 95,129' 96,520 96,983 27 Other 2,108 2,419 2,447 2,417 2,577 2,487 2,889 2,489' 2,350 2,53(K 2,538' 2,414 28 Other liabilities 10,632 8,336 3,114 7,754 7,596 7,884 9,475 8,779' 9,185' 10,154' 9,932' 9,932 29 General reserve accounts 9,986 9,235 9,377 9,575 9,684 9,932 9,879 10,015' 10,210' 10,368' 10,334' 10,566 30 MEMO: Mortgage loan commitments outstanding9 1,293 1,285 1,860 1,884 1,969 2,046 2,023 2,210 22,,441188 22,,338877 n.a. n.a. Life insurance companies 31 Assets 525,803 588,163 620,572 628,224 633,569 638,826 644,295 647,149 652,904 658,979 663,013 664,677 Securities 32 Government 25,209 36,499 42,523 43,348 44,751 45,700 46,109 47,767 47,170 49,417 4499,,669900 49,711 33 United States10 8,167 16,529 20,706 21,141 22,228 22,817 23,134 24,380 24,232 26,364 26,659 27,285 7,151 8,664 10,053 10,355 10,504 10,695 10,739 10,791 10,686 10,796 10,673 10,048 9,891 11,306 11,764 11,852 12,019 12,188 12,236 12,596 12,252 12,257 12,358 12,378 255,769 287,126 309,254 313,510 316,934 318,584 321,568 320,964 325,787 325,015 329,697 330,303 n.a. 37 Bonds 208,099 231,406 245,833 248,248 252,397 253,977 256,131 256,332 260,432 259,591 264,430 266,234 38 Stocks 47,670 55,720 63,421 65,262 64,537 64,607 65,437 64,632 65,355 65,424 65,267 64,069 137,747 141,989 143,758 144,725 145,086 146,400 147,356 148,256 148,947 151,599 151,878 151,630 40 Real estate 18,278 20,264 21,344 21,629 21,690 21,749 21,903 22,141 22,278 22,683 22,700 23,032 48,706 52,961 53,804 53,914 53,972 54,063 54,165 54,255 54,362 54,518 54,559 54,631 42 Other assets 40,094 48,571 48,889 51,098 51,136 52,330 53,194 53,765 54,360 55,747 54,474 55,370 Credit unions 12' 43 Total assetsAiabilities and capital 60,611 69,585 76,762 78,362 78,846 79,241 80,189 80,419 81,094 81,961 82,287 83,779 86,498 39,181 45,493 50,275 51,430 51,859 52,261 53,086 53,297 53,801 54,482 54,770 55,753 57,569 45 State 21,430 24,092 26,487 26,932 26,987 26,980 27,103 27,122 27,293 27,479 27,517 28,026 28,929 42,333 43,232 44,058 45,006 45,647 46,940 47,829 48,454 49,240 50,083 50,477 51,386 52,353 47 Federal 27,096 27,948 28,512 29,175 29,672 30,582 31,212 31,691 32,304 32,930 33,270 33,878 34,510 48 State 15,237 15,284 15,546 15,831 15,975 16,358 16,617 16,763 16,936 17,153 17,207 17,508 17,843 49 Savings 54,152 62,990 70,475 71,610 72,232 72,214 73,280 73,661 74,051 74,739 75,373 76,423 79,150 50 Federal (shares) 35.25C 41,352 46,192 47,145 47,713 47,847 48,709 49,044 49,400 49,889 50,438 51,218 52,905 51 State (shares and deposits) 18,902 21,638 24,283 24,465 24,519 24,367 24,571 24,617 24,651 24,850 24,935 25,205 26,245 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.37 Continued 1983 1984 AAccccoouunntt 11998811 11998822 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.P FSLIC-insured federal savings banks 52 6,859 33,667 39,660 41,763 46,191 57,496 59,422 61,717 64,969 69,835 72,143 53 Mortgages 3,353 21,248 25,236 26,494 28,086 34,814 35,637 37,166 38,698 41,754 43,371 54 Cash and investment securities 5,901 6,675 6,890 7,514 9,245 9,587 9,653 10,436 11,243 11,662 55 Other 6,518 7,749 8,379 10,591 13,437 14,198 14,898 15,835 16,838 17,110 56 Liabilities and net worth 6,859 33,667 39,660 41,763 46,191 57,496 59,422 61,717 64,969 69,835 72,143 57 Savings and capital 5,877 27,419 32,446 34,108 37,284 47,058 48,544 50,384 53,227 57,195 59,107 58 Borrowed money 4,146 4,831 5,008 5,445 6,598 6,775 6,981 7,477 8,048 8,088 59 FHLBB 2,755 3,094 3,131 3,572 4,192 4,323 4,381 4,640 4,751 4,884 60 Other 1,391 1,737 1,877 1,873 2,406 2,452 2,600 2,837 3,297 3,204 61 Other 759 755 919 1,142 1,089 1,293 1,428 1,157 1,347 1,545 62 Net worth3 1,343 1,628 1,728 2,320 2,751 2,810 2,924 3,108 3,245 3,403 MEMO 63 Loans in process2 650 791 828 934 1,120 1,181 1,222 1,264 1,387 1,531 64 Mortgage loan committments outstanding4 1,113 1,438 1,743 1,774 2,130 2,064 2,230 2,151 2,974 2,704 1. Holdings of stock of the Federal Home Loan Banks are in "other assets." 11. Issues of foreign governments and their subdivisions and bonds of the 2. Beginning in 1982, loans in process are classified as contra-assets and are International Bank for Reconstruction and Development. not included in total liabilities and net worth. Total assets are net of loans in 12. As of June 1982, data include only federal or federally insured state credit process. unions serving natural persons. 3. Includes net undistributed income accrued by most associations. 4. Excludes figures for loans in process. NOTE. Savings and loan associations: Estimates by the FHLBB for all 5. The National Council reports data on member mutual savings banks and on associations in the United States. Data are based on monthly reports of federally savings banks that have converted to stock institutions, and to federal savings insured associations and annual reports of other associations. Even when revised, banks. data for current and preceding year are subject to further revision. 6. Beginning April 1979, includes obligations of U.S. government agencies. Mutual savings banks: Estimates of National Council of Savings Institutions for Before that date, this item was included in "Corporate and other." all savings banks in the United States. 7. Includes securities of foreign governments and international organizations Life insurance companies: Estimates of the American Council of Life Insurance and, before April 1979, nonguaranteed issues of U.S. government agencies. for all life insurance companies in the United States. Annual figures are annual- 8. Excludes checking, club, and school accounts. statement asset values, with bonds carried on an amortized basis and stocks at 9. Commitments outstanding (including loans in process) of banks in New year-end market value. Adjustments for interest due and accrued and for York State as reported to the Savings Banks Association of the State of New differences between market and book values are not made on each item separately York. but are included, in total, in "other assets." 10. 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 data. 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1982 1983 1984 111999888111 111999888222 111999888333 HI H2 HI Jan. Feb. Mar. U.S. budget 1 Receipts' 599,272 617,766 600,562 322,478 286,338 306,331 62,537 47,886 44,464 2 Outlays1 657,204 728,375 795,917 348,678 390,846 396,477 68,052 68,267 73,020 3 Surplus, or deficit (-) -57,932 -110,609 -195,355 -26,200 -104,508 -90,146 -5,515 -20,381 -28,556 4 Trust funds 6,817 5,456 23,056 -17,690 -6,576 22,680 1,043 557 -2,827 5 Federal funds2-3 -64,749 -116,065 -218,410 -43,889 -97,934 -112,822 -6,558 -20,938 -25,728 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays -20,769 -14,142 -10,404 -7,942 -4,923 -5,418 -121 -8 -1,431 7 Other3-4 -236 -3,190 -1,953 227 -2,267 -528 -129 -198 -296 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -78,936 -127,940 -207,711 -33,914 -111,699 -96,094 -5,762 --2200,,558888 --3300,,228822 Source of financing 9 Borrowing from the public 79,329 134,993 212,425 41,728 119,609 102,538 23,686 18,172 77,,556688 10 Cash and monetary assets (decrease, or increase (-))4 -1,878 -11,911 -9,889 -408 -9,057 -9,664 -21,127 8,722 9,415 11 Other5 1,485 4,858 5,176 -7,405 1,146 3,222 3,202 -6,306 13,299 MEMO 12 Treasury operating balance (level, end of period) 18,670 29,164 37,057 10,999 19,773 100,243 28,544 23,758 14,054 13 Federal Reserve Banks 3,520 10,975 16,557 4,099 5,033 19,442 7,153 3,226 3,684 14 Tax and loan accounts 15,150 18,189 20,500 6,900 14,740 72,037 21,392 20,531 10,369 1. Effective Feb. 8, 1982, supplemental medical insurance premiums and 5. Includes accrued interest payable to the public; allocations of special voluntary hospital insurance premiums, previously included in other insurance drawing rights; deposit funds; miscellaneous liability (including checks outstandreceipts, have been reclassified as offsetting receipts in the health function. ing) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S. 2. 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. 3. Other off-budget includes Postal Service Fund; Rural Electrification and Telephone Revolving Fund; Rural Telephone Bank; and petroleum acquisition SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. and transportation and strategic petroleum reserve effective November 1981. Government." Treasury Bulletin, and the Budget of the United States Govern- 4. Includes U.S. Treasury operating cash accounts; SDRs; gold tranche ment, Fiscal Year 1985. drawing rights; loans to International Monetary Fund; and other cash and monetary assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic NonfinancialS tatistics • May 1984 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyy 111 eee 999888 aaarrr 111 yyy 111999 eee 888 aaarrr 222 yyy 111 eee 999888 aaarrr 333 1982 1983 1984 HI H2 HI Jan. Feb. Mar. RECEIPTS 1 All sources 599,272 617,766 600,563 322,478 286,338 306,331 62,537 47,886 44,464 2 Individual income taxes, net 285,917 297,744 288,938 150,565 145,676 144,550 33,881 22,190 12,895 3 Withheld 256,332 267,513 266,010 133,575 131,567 135,531 21,070 23,523 26,877 4 Presidential Election Campaign Fund ... 41 39 36 34 5 30 0 4 9 5 Nonwithheld 76,844 84,691 83,586 66,174 20,040 63,014 12,728 1,501 2,776 6 Refunds 47,299 54,498 60,692 49,217 5,938 54,024 -82 22,,883388 1166,,776666 Corporation income taxes 7 Gross receipts 73,733 65,991 61,780 37,836 25,661 33,522 2,985 1,892 9,441 8 Refunds 12,596 16,784 24,758 8,028 11,467 13,809 11,,336666 11,,883333 11,,447766 9 Social insurance taxes and contributions, net 182,720 201,498 209,001 108,079 94,278 110,521 2211,,446622 1199,,997722 1177,,770022 10 Payroll employment taxes and contributions1 156,932 172,744 179,010 88,795 85,063 90,912 19,446 1166,,777744 1166,,770044 11 Self-employment taxes and contributions2 6,041 7,941 6,756 7,357 177 6,427 478 523 433 12 Unemployment insurance 15,763 16,600 18,799 9,809 6,857 11,146 1,112 2,308 191 13 Other net receipts3 3,984 4,212 4,436 2,119 2,181 2,1% 427 369 373 14 Excise taxes 40,839 36,311 35,300 17,525 16,556 16,904 3,148 2,693 2,870 15 Customs deposits 8,083 8,854 8,655 4,310 4,299 4,010 776 839 974 16 Estate and gift taxes 6,787 7,991 6,053 4,208 3,445 2,883 488 570 523 17 Miscellaneous receipts4 13,790 16,161 15,594 7,984 7,891 7,751 1,163 1,613 1,535 OUTLAYS 18 All types 657,204 728,424 795,917 348,683 390,847 396,477 68,052 68,267 73,020 19 National defense 159,765 187,418 210,461 93,154 100,419 105,072 18,283 18,515 19,516 20 International affairs 11,130 9,982 8,927 5,183 4,406 4,705 709 780 1,180 21 General science, space, and technology ... 6,359 7,070 7,777 3,370 3,903 3,486 503 721 611 22 Energy 10,277 4,674 4,035 2,946 2,059 2,073 255 34 265 23 Natural resources and environment 13,525 12,934 12,676 5,636 6,940 5,892 963 790 861 24 Agriculture 5,572 14,875 22,173 7,087 13,260 10,154 1,835 1,737 1,315 25 Commerce and housing credit 3,946 3,865 4,721 1,408 2,244 2,164 709 -648 224 26 Transportation 23,381 20,560 21,231 9,915 10,686 9,918 1,953 1,517 1,555 27 Community and regional development .... 9,394 7,165 7,302 3,055 4,186 3,124 434 524 514 28 Education, training, employment, social services 31,402 26,300 25,726 12,607 12,187 12,801 2,476 2,305 2,172 29 Health 26,858 27,435 28,655] 2,540 2,729 30 Social security and medicare 178,733 202,531 223,311) 150,001s 172,852 118844,,220077 3300,,445566 19,164 20,192 31 Income security 85,514 92,084 106,21 lj 8,585 9,791 32 Veterans benefits and services 22,988 23,955 24,845 112,782 13,241 11,334 1,202 2,108 3,293 33 Administration of justice 4,696 4,671 5,014 2,334 2,373 2,522 487 505 435 34 General government 4,614 4,726 4,991 2,400 2,322 2,434 88 495 585 35 General-purpose fiscal assistance 6,856 6,393 6,287 3,325 3,152 3,124 1,153 201 86 36 Net interest^ 68,726 84,697 89,774 41,883 44,948 42,358 7,808 9,801 8,592 37 Undistributed offsetting receipts7 -16,509 -13,270 -21,424 -6,490 -8,333 -8,885 -1,263 -1,407 -824 1. Old-age, disability, and hospital insurance, and railroad retirement accounts. function. Before February 1984, these outlays were included in the income 2. Old-age, disability, and hospital insurance. security and health functions. 3. Federal employee retirement contributions and civil service retirement and 6. Net interest function includes interest received by trust funds. disability fund. 7. Consists of rents and royalties on the outer continental shelf and U.S. 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous government contributions for employee retirement. receipts. 5. In accordance with the Social Security Amendments Act of 1983, the SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Treasury now provides social security and medicare outlays as a separate Government" and the Budget of the U.S. Government, Fiscal Year 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1982 1983 1984 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 1,066.4 1,084.7 1,147.0 1,201.9 1,249.3 1,324.3 1,381.9 1415.3 n.a. 2 Public debt securities 1,061.3 1,079.6 1,142.0 1,197.1 1,244.5 1,319.6 1,377.2 1,410.7 1,463.7 3 Held by public 858.9 867.9 925.6 987.7 1,043.3 1,090.3 1,138.2 1174.4 i 4 Held by agencies 202.4 211.7 216.4 209.4 201.2 229.3 239.0 236.3 | 5 Agency securities 5.1 5.0 5.0 4.8 4.8 4.7 4.7 4.6 n.a. 6 Held by public 3.9 3.9 3.7 3.7 3.7 3.6 3.6 3.5 1 7 Held by agencies 1.2 1.2 1.2 1.2 1.1 1.1 1.1 1.1 T 8 Debt subject to statutory limit 1,062.2 1,080.5 1,142.9 1,197.9 1,245.3 1,320.4 1,378.0 1,411.4 1,464.5 9 Public debt securities 1,060.7 1,079.0 1,141.4 1,196.5 1,243.9 1,319.0 1,376.6 1,410.1 1,463.1 10 Other debt1 1.5 1.5 1.5 1.4 1.4 1.4 1.3 1.3 1.3 11 MEMO: Statutory debt limit 1,079.8 1,143.1 1,143.1 1,290.2 1,290.2 1,389.0 1,389.0 1,490.0 1,490.0 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 1984 Type and holder 991199 11998800 11998811 11998822 Q2 Q3 Q4 QL 1 Total gross public debt 845.1 930.2 1,028.7 1,197.1 1,319.6 1,377.2 1,410.7 1,463.7 By type 2 Interest-bearing debt 844.0 928.9 1,027.3 1,195.5 1,318.1 1,375.8 1,400.9 1,452.1 3 Marketable 530.7 623.2 720.3 881.5 978.9 1,024.0 1,050.9 1,097.7 4 Bills 172.6 216.1 245.0 311.8 334.3 340.7 343.8 350.2 5 Notes 283.4 321.6 375.3 465.0 527.1 557.5 573.4 604.9 6 Bonds 74.7 85.4 99.9 104.6 117.5 125.7 133.7 142.6 7 Nonmarketable' 313.2 305.7 307.0 314.0 339.2 351.8 350.0 354.4 8 State and local government series 24.6 23.8 23.0 25.7 33.1 35.1 36.7 38.1 9 Foreign issues2 28.8 24.0 19.0 14.7 11.4 11.5 10.4 9.9 10 Government 23.6 17.6 14.9 13.0 10.8 11.5 10.4 9.9 11 Public 5.3 6.4 4.1 1.7 .6 .0 .0 .0 12 Savings bonds and notes 79.9 72.5 68.1 68.0 69.4 70.3 70.7 71.6 13 Government account series3 177.5 185.1 196.7 205.4 225.0 234.7 231.9 234.6 14 Non-interest-bearing debt 1.2 1.3 1.4 1.6 1.5 1.5 9.8 11.6 By holder4 15 U.S. government agencies and trust funds 187.1 192.5 203.3 209.4 229.3 239.0 236.3 16 Federal Reserve Banks 117.5 121.3 131.0 139.3 141.7 155.4 151.9 17 Private investors 540.5 616.4 694.5 848.4 948.6 982.7 1,022.6 18 Commercial banks 96.4 116.0 109.4 131.4 171.6 176.3 188.9 19 Mutual savings banks 4.7 5.4 5.2 n.a. 28.3 22.1 22.8 20 Insurance companies 16.7 20.1 19.1 38.7 44.8 47.3 48.9 21 Other companies 22.9 25.7 37.8 n.a. 32.8 35.9 40.2 n a. 22 State and local governments 69.9 78.8 85.6 113.4 n.a. n.a. n.a. Individuals 23 Savings bonds 79.9 72.5 68.0 68.3 69.7 70.6 71.5 24 Other securities 36.2 56.7 75.6 48.2 51.6 58.4 61.9 25 Foreign and international5 124.4 127.7 141.4 149.4 160.1 160.2 168.9 26 Other miscellaneous investors6 90.1 106.9 152.3 233.2 n.a. n.a. n.a. 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Consists of investments of foreign and international accounts. Excludes nontion Administration; depository bonds, retirement plan bonds, and individual interest-bearing notes issued to the International Monetary Fund. retirement bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable dollar-denominated and foreign currency-denominated mutual savings banks, corporate pension trust funds, dealers and brokers, certain series held by foreigners. U.S. government deposit accounts, and U.S. government-sponsored agencies. 3. Held almost entirely by U.S. government agencies and trust funds. SOURCES. Data by type of security, U.S. Treasury Department, Monthly 4. Data for Federal Reserve Banks and U.S. government agencies and trust Statement of the Public Debt of the United States; data by holder. Treasury funds are actual holdings; data for other groups are Treasury estimates. Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • May 1984 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1984 1984 week ending Wednesday IItteemm 11998811 11998822 11998833 Jan. Feb. Mar. Feb. 22 Feb. 29 Mar. 7 Mar. 14 Mar. 21 Mar. 28 Immediate delivery1 1 U.S. government securities 24,728 32,271 42,135 45,623 52,445 50,344 51,037 55,040 47,162 44,793 50,719 52,509 By maturity 2 Bills 14,768 18,398 22,393 23,140 24,937 23,278 28,165 25,033 21,657 22,561 25,408 22,633 3 Other within 1 year 621 810 708 1,119 895 906 909 999 807 752 819 1,107 4 1-5 years 4,360 6,272 8,758 9,615 11,827 11,038 10,053 12,653 8,926 8,309 10,793 15,138 5 5-10 years 2,451 3,557 5,279 5,647 8,052 7,798 6,262 9,714 9,120 6,689 6,663 6,923 6 Over 10 years 2,528 3,234 4,997 6,102 6,734 7,324 5,648 6,641 6,651 6,482 7,037 6,708 By type of customer 7 U.S. government securities dealers 1,640 1,769 2,257 2,751 4,164 2,050 4,662 3,345 1,849 1,859 1,850 2,368 8 U.S. government securities brokers 11,750 15,659 21,045 21,066 24,952 27,263 23,275 27,787 26,484 25,114 26,952 27,606 9 All others2 11,337 15,344 18,832 21,806 23,329 21,031 23,100 23,907 18,829 17,821 21,918 22,536 10 Federal agency securities 3,306 4,142 5,576 6,541 7,577 7,097 6,064 7,437 7,277 6,923 8,357 6,502 11 Certificates of deposit 4,477 5,001 4,333 4,886 5,324 4,572 5,870 5,780 5,420 4,972 4,038 3,817 12 Bankers acceptances 1,807 2,502 2,642 3,119 2,702 2,481 2,795 3,175 2,681 2,298 2,359 2,613 n Commercial paper 6,128 7,595 8,036 8,891 8,114 8,124 8,327 7,883 7,714 7,319 8,444 8,239 Futures transactions3 14 Treasury bills 3,523 5,031 6,655 5,431 6,984 8,557 7,341 7,319 8,282 10,169 7,092 8,363 15 Treasury coupons 1,330 1,490 2,501 2,625 3,561 4,630 2,986 4,733 4,861 5,100 4,706 3,661 16 Federal agency securities 234 259 265 157 302 437 232 398 485 334 459 379 Forward transactions4 17 U.S. government securities 365 835 1,493 713 1,616 1,373 1,020 1,484 819 1,184 1,096 2,282 18 Federal agency securities 1,370 982 1,646 2,147 2,595 2,586 2,656 1,985 2,363 2,874 3,001 2,342 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 1984 1984 week ending Wednesday IItteemm 11998811 11998822 11998833 Jan. Feb. Mar. Feb. 22 Feb. 29 Mar. 7 Mar. 14 Mar. 21 Positions Net immediate1 1 U.S. government securities 9,033 9,328 6,263 3,130 1,290 -4,215 -3,166 584 -837 -4,225 -5,999 2 Bills 6,485 4,837 4,282 2,730 3,226 -1,055 472 2,254 768 -907 -835 3 Other within 1 year -1,526 -199 -177 -158 -227 -362 -497 -403 -329 -286 -265 4 1-5 years 1,488 2,932 1,709 1,552 -428 -1,959 -2,874 -872 -1,622 -2,366 -3,237 5 5-10 years 292 -341 -78 -705 -1,610 -326 -1,195 -1,281 193 -416 -821 6 Over 10 years 2,294 2,001 528 -288 328 -514 928 886 153 -250 -843 7 Federal agency securities 2,277 3,712 7,172 11,236 12,386 16,076 12,274 12,413 14,624 16,753 17,470 8 Certificates of deposit 3,435 5,531 5,839 6,528 7,323 6,913 7,503 7,838 7,645 6,890 6,504 9 Bankers acceptances 1,746 2,832 3,332 3,494 3,243 2,819 3,171 3,062 3,163 2,611 2,664 10 Commercial paper 2,658 3,317 3,159 2,754 2,771 3,012 2,398 2,438 3,128 3,077 2,975 Futures positions 11 Treasury bills -8,934 -2,508 -4,125 -10,286 -7,796 -1,128 12 Treasury coupons -2,733 -2,361 -1,032 758 1,254 2,053 1,585 1,925 1,439 2,226 2,411 13 Federal agency securities 522 -224 170 38 -174 201 -104 117 -220 163 380 Forward positions 14 U.S. government securities -603 -788 -1,935 -1,454 -2,257 -714 -1,419 -1,375 -1,153 -963 -288 15 Federal agency securities -451 -1,190 -3,561 -7,506 -8,019 -9,747 -8,059 -8,159 -8,412 -10,451 -10,658 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 14,568 26,754 29,099 37,309 39,798 A 40,617 40,444 36,363 39,064 41,483 17 Term agreements 32,048 48,247 52,493 60,280 60,666 f 58,848 62,432 64,922 64,818 63,773 Repurchase agreements4 n.a. 1 IX 9 T O e v r e m rn i a g g h r t e e a m nd e n c t o s ntinuing 2 3 9 5 , , 4 9 4 1 9 9 4 4 3 9 , , 4 6 1 9 0 5 4 5 4 7 , , 4 9 1 4 0 6 66 5 77 1 ,, , 66 1 88 2 55 3 7 52 0 , , 1 1 0 2 9 6 1t 6 5 8 1 , , 7 0 6 9 8 9 5 7 0 2 , , 9 2 7 5 4 6 5 6 4 9 , , 3 0 9 1 1 3 5 6 1 9 , , 9 4 7 8 7 8 5 70 4 , , 2 3 8 8 1 0 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1983 1984 AAggeennccyy 11998800 11998811 11998822 Oct. Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies 188,665 221,946 237,085 239,121 240,177 239,716 239,872 241,628 382,398 2 Federal agencies 28,606 31,806 33,055 33,735 33,813 33,940 33,919 33,785 32,800 3 Defense Department1 610 484 354 258 253 243 234 215 206 4 Export-Import Bank2 3 11,250 13,339 14,218 14,740 14,740 14,853 14,852 14,846 15,347 5 Federal Housing Administration4 477 413 288 203 197 194 173 169 166 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 1,404 1,404 1,404 1,404 1,404 1,404 8 Tennessee Valley Authority 11,190 13,115 14,365 14,840 14,945 14,970 14,980 14,875 14,805 9 United States Railway Association6 492 202 194 125 109 111 111 111 111 10 Federally sponsored agencies7 160,059 190,140 204,030 205,386 206,364 205,776 205,953 207,843 211,891 11 Federal Home Loan Banks 37,268 54,131 55,967 49,956 49,285 48,930 48,344 48,224 48,594 12 Federal Home Loan Mortgage Corporation 4,686 5,480 4,524 6,950 7,024 6,793 6,679 7,556 8,633 13 Federal National Mortgage Association 55,182 58,749 70,052 71,965 73,531 74,594 74,676 75,865 77,966 14 Farm Credit Banks 62,923 71,359 71,896 73,465 73,474 72,409 73,023 72,856 73,180 15 Student Loan Marketing Association (8) 421 1,591 3,050 3,050 3,050 3,231 3,342 3,518 MEMO 16 Federal Financing Bank debt 87,460 110,698 126,424 134,799 135,361 135,791 135,940 135,859 137,707 Lending to federal and federally sponsored agencies 17 Export-Import Bank3 10,654 12,741 14,177 14,676 14,676 14,789 14,789 14,789 15,296 18 Postal Service6 1,520 1,288 1,221 1,154 1,154 1,154 1,154 1,154 1,154 19 Student Loan Marketing Association 2,720 5,400 5,000 5,000 5,000 5,000 5,000 5,000 5,000 20 Tennessee Valley Authority 9,465 11,390 12,640 13,175 13,220 13,245 13,255 13,150 13,080 21 United States Railway Association6 492 202 194 125 109 111 111 111 111 Other Lending10 22 Farmers Home Administration 39,431 48,821 53,261 55,916 55,916 55,266 54,776 54,471 55,186 23 Rural Electrification Administration 9,196 13,516 17,157 19,093 19,216 19,766 19,927 19,982 20,186 24 Other 11,262 12,740 22,774 25,660 26,070 26,460 26,928 27,202 27,694 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

A32 DomesticN onfinancialS tatistics • May 1984 1.45 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1983 1984 Type of issue or issuer, 11998811 11998822 11998833 or use July Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues, new and refunding1 47,732 78,950 85,092 4,370 6,194 6,160 6,650 5,829 8,854 5,066' 4,539 Type of issue 2 General obligation 12,394 21,088 21,470 860 1,614 1,266 1,935 1,679 1,134 1,118' 1,794 3 U.S. government loans2 34 225 96 7 9 14 15 15 15 0 2 4 Revenue 35,338 57,862 63,622 3,510 4,580 4,894 4,715 4,150 7,720 3,948' 2,745 5 U.S. government loans2 55 461 253 26 29 35 39 39 39 1 2 Type of issuer 6 State 5,288 8,406 7,135 484 673 452 856 405 198 325 935 7 Special district and statutory authority 27,499 45,000 50,632 3,009 3,357 4,199 4,387 3,318 5,790 2,032 8 Municipalities, counties, townships, school districts 14,945 25,544 27,325 877 2,164 1,509 1,407 2,106 2,866 1,235' 1,572 9 Issues for new capital, total 46,530 74,613 71,120 3,884 4,612 5,512 5,187 5,333 8,438 4,077' 3,850 Use of proceeds 10 Education 4,547 6,444 8,170 535 714 527 457 515 744 399' 339 11 Transportation 3,447 6,256 4,353 274 261 195 250 336 421 127 327 12 Utilities and conservation 10,037 14,254 13,547 268 285 1,238 605 1,101 1,230 2,027 716 13 Social welfare 12,729 26,605 26,378 1,920 2,139 2,334 2,580 2,080 2,676 819 1,075 14 Industrial aid 7,651 8,256 7,088 393 254 494 323 516 2,317 127 287 15 Other purposes 8,119 12,797 11,584 494 959 724 972 785 1,050 578 1,106 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 1983 1984 Type of i o s r s u u e s e o r issuer, 11998811 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues1'2 70,441 84,198 98,845 6,474 5,941 6,568 6,897' 8,103 6,812 7,691 7,595 2 Bonds 45,092 53,636 47,266 2,550 2,547 2,865 3,055 4,075 3,173 5,648 5,216 Type of offering 3 Public 38,103 43,838 47,266 2,550 2,547 2,865 3,055 4,075 3,173 5,648 5,216 4 Private placement 6,989 9,798 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 12,325 13,123 8,133 60 200 282 367 22 423 179 452 6 Commercial and miscellaneous. 5,229 5,681 5,374 228 458 353 114 23 201 976 626 7 Transportation 2,052 1,474 1,086 148 0 0 0 111 105 10 75 8 Public utility 8,963 12,155 7,066 322 355 590 510 910 120 325 385 9 Communication 4,280 2,265 3,380 1,100 0 100 50 0 0 210 0 10 Real estate and financial 12,243 18,938 22,227 692 1,534 1,540 2,014 3,009 2,324 3,948 3,678 11 Stocks3 25,349 30,562 51,579 3,924 3,394 3,703 3,842 4,028 3,639 2,043 2,379 Type 12 Preferred 1,797 5,113 7,213 290 247 644 300 433 253 305 425 13 Common 23,552 25,449 44,366 3,634 3,147 3,059 3,542 3,595 3,386 1,738 1,954 Industry group 14 Manufacturing 5,074 5,649 14,135 1,015 1,309 962 744 458 649 427 299 15 Commercial and miscellaneous. 7,557 7,770 13,112 1,415 743 997 868 1,598 852 465 616 16 Transportation 779 709 2,729 337 145 165 305 192 413 54 15 17 Public utility 5,577 7,517 5,001 72 263 200 588 622 245 225 45 18 Communication 1,778 2,227 1,822 20 236 0 36 13 12 30 20 19 Real estate and financial 4,584 6,690 14,780 1,065 698 1,379 1,301 1,145 1,468 842 1,384 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 A33 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1983 1984 IItteemm 11998822 11998833 Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar. INVESTMENT COMPANIES1 1 Sales of own shares2 45,675 84,793 6,032 5,915 6,532 6,341 6,846 10,274 8,233 8,844 2 Redemptions of own shares3 30,078 57,120 4,885 4,412 4,264 3,920 5,946 5,544 5,162 5,335 3 Net sales 15,597 27,673 1,147 1,503 2,268 2,421 900 4,730 3,071 3,509 4 Assets4 76,841 113,599 104,494 109,455 107,314 113,052 113,599 114,839 111,068 114,475 5 Cash position5 6,040 8,343 8,045 8,868 8,256 9,395 8,343 8,963 9,140 10,377 6 Other 70,801 105,256 93,449 100,587 99,058 103,657 105,256 105,876 101,928 104,098 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. 1982 1983 AAccccoouunntt 11998811 11998822 11998833 Q1 Q2 Q3 Q4 QL Q2 Q3 Q4 1 Corporate profits with inventory valuation and capital consumption adjustment 192.3 164.8 229.2 162.0 166.8 168.5 161.9 181.8 218.2 248.4 268.2 2 Profits before tax 227.0 174.2 207.6 173.2 178.8 177.3 167.5 169.7 203.3 229.1 228.2 3 Profits tax liability 82.8 59.1 76.9 60.3 61.4 60.8 54.0 61.5 76.0 84.9 85.3 4 Profits after tax 144.1 115.1 130.6 112.9 117.4 116.5 113.5 108.2 127.2 144.1 142.9 5 Dividends 64.7 68.7 73.2 67.7 67.8 68.8 70.4 71.4 72.0 73.7 75.9 6 Undistributed profits 79.4 46.4 57.3 45.2 49.5 47.7 43.1 36.7 55.2 70.4 67.0 7 Inventory valuation -23.6 -8.3 -9.2 -5.5 -8.5 -9.0 -10.3 -1.7 -10.6 -18.3 -6.3 8 Capital consumption adjustment -11.0 -1.1 30.8 -5.6 -3.5 .1 4.7 13.9 25.6 37.6 46.2 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • May 1984 1.49 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1982 1983 AAccccoouunntt 11997777 11997788 11997799 11998800 11998811 Q4 Ql' Q2' Q3r Q4 1 Current assets 912.7 1,043.7 1,214.8 1,327.0 1,419.3 1,425.4 1,437.3 1,465.1 1,522.5 1,561.2 2 Cash 97.2 105.5 118.0 126.9 131.8 144.0 138.7 145.0 148.1 164.9 3 U.S. government securities 18.2 17.2 16.7 18.7 17.4 22.4 26.0 27.9 26.6 30.2 4 Notes and accounts receivable 330.3 388.0 459.0 506.8 530.3 511.0 518.4 535.0 563.4 579.0 5 Inventories 376.9 431.8 505.1 542.8 585.1 575.2 573.4 571.0 590.7 591.9 6 Other 90.1 101.1 116.0 131.8 154.6 172.6 180.7 186.2 193.7 195.3 7 Current liabilities 557.1 669.5 807.3 889.3 976.3 977.8 987.1 996.4 1,037.1 1,056.7 8 Notes and accounts payable 317.6 383.0 460.8 513.6 558.8 552.8 542.7 550.8 577.3 598.8 9 Other 239.6 286.5 346.5 375.7 417.5 425.0 444.4 445.6 459.9 457.9 10 Net working capital 355.5 374.3 407.5 437.8 442.9 447.6 450.2 468.6 485.4 504.6 11 MEMO: Current ratio1 1.638 1.559 1.505 1.492 1.454 1.458 1.456 1.470 1.468 1.477 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 1984 IInndduussttrryy11 11998822 11998833 11998844'' Q3 Q4 Q1 Q2 Q3 Q4 Q I1 Q21 1 Total nonfarm business 316.43 302.50 343.57 313.76 303.18 293.03 293.46 304.70 318.83 332.66 335.40 Manufacturing 2 Durable goods industries 56.44 51.78 62.78 56.61 50.51 50.74 48.48 53.06 54.85 59.21 59.01 3 Nondurable goods industries 63.23 59.75 66.93 61.65 59.72 59.12 60.31 58.06 61.50 65.49 67.25 Nonmanufacturing 4 Mining 15.45 11.83 14.34 14.57 13.41 12.03 10.91 11.93 12.43 13.57 13.87 Transportation 5 Railroad 4.38 3.92 4.73 4.01 4.35 3.35 3.64 4.07 4.63 4.09 4.85 6 Air 3.93 3.77 2.78 4.07 4.76 4.09 4.10 3.57 3.32 2.42 2.82 7 Other 3.64 3.50 4.49 3.21 3.22 3.60 3.14 3.36 3.91 4.57 4.31 Public utilities 8 Electric 33.40 34.99 35.54 34.73 35.15 33.97 34.86 35.84 35.31 35.51 35.72 9 Gas and other 8.55 7.00 9.24 8.29 7.85 7.64 6.62 6.38 7.37 8.21 8.95 10 Trade and services 86.95 87.94 100.25 86.88 84.36 82.38 85.85 91.06 92.44 98.56 97.93 11 Communication and other2 40.46 38.02 42.47 39.75 39.84 36.11 35.54 37.38 43.05 41.03 40.68 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 A35 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1983 AAccccoouunntt 11997777 11997788 11997799 11998800 11998811 11998822 Q1 Q2 Q3 Q4 ASSETS Accounts receivable, gross 1 Consumer 44.0 52.6 65.7 73.6 85.5 89.5 89.9 91.3 92.3 92.8 2 Business 55.2 63.3 70.3 72.3 80.6 81.0 82.2 84.9 86.8 95.2 3 Total 99.2 116.0 136.0 145.9 166.1 170.4 172.1 176.2 179.0 188.0 4 LESS: Reserves for unearned income and losses 12.7 15.6 20.0 23.3 28.9 30.5 29.7 30.4 30.1 30.6 5 Accounts receivable, net 86.5 100.4 116.0 122.6 137.2 139.8 142.4 145.8 148.9 157.4 6 Cash and bank deposits 2.6 3.5 1 7 Securities .9 1.3 /^ 24.9' 27.5 34.2 39.7 42.8 44.3 45.0 45.3 8 All other 14.3 17.3 9 Total assets 104.3 122.4 140.9 150.1 171.4 179.5 185.2 190.2 193.9 202.7 LIABILITIES 10 Bank loans 5.9 6.5 8.5 13.2 15.4 18.6 16.6 16.3 17.0 19.1 11 Commercial paper 29.6 34.5 43.3 43.4 51.2 45.8 45.2 49.0 49.7 53.6 Debt 12 Short-term, n.e.c 6.2 8.1 8.2 7.5 9.6 8.7 9.8 9.6 8.7 11.3 13 Long-term, n.e.c 36.0 43.6 46.7 52.4 54.8 63.5 64.7 64.5 66.2 65.4 14 Other 11.5 12.6 14.2 14.3 17.8 18.7 22.8 24.0 24.4 27.1 15 Capital, surplus, and undivided profits 15.1 17.2 19.9 19.4 22.8 24.2 26.0 26.7 27.9 26.2 16 Total liabilities and capital 104.3 122.4 140.9 150.1 171.4 179.5 185.2 190.2 193.9 202.7 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments receivable AAAccccccooouuunnntttsss rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg 1983 1984 1983 1984 1983 1984 FFFeeebbb... 222999,,, 111999888444''' Dec. Jan. Feb. Dec. Jan. Feb. Dec. Jan. Feb. 1 Total 99,338 2,721 2,973 1,934 27,338 30,660 28,218 24,617 27,687 26,284 2 Retail automotive (commercial vehicles) 22,437 485 959 700 1,836 2,347 2,157 1,351 1,388 1,457 3 Wholesale automotive 16,471 583 625 638 7,690 9,392 9,856 7,107 8,767 9,218 4 Retail paper on business, industrial, and farm equipment 29,069 602 449 568 1,610 1,525 1,488 1,008 1,076 920 5 Loans on commercial accounts receivable and factored commercial accounts receivable 10,958 121 1,037 -117 13,441 14,787 12,313 13,320 13,750 12,430 6 All other business credit 20,403 930 -97 145 2,761 2,609 2,404 1,831 2,706 2,259 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics • May 1984 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1983 1984 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 90.4 94.6 92.8 100.7 95.8 98.0 94.8 92.9 104.1' 93.6 2 Amount of loan (thousands of dollars) 65.3 69.8 69.6 76.5 72.5 76.7 73.3 71.7 77.8' 73.0 3 Loan/price ratio (percent) 74.8 76.6 77.1 78.5 78.4 80.5 79.1 79.2 77.8' 80.2 4 Maturity (years) 27.7 27.6 26.7 27.2 26.9 26.5 27.3 27.8 27.3' 28.0 5 Fees and charges (percent of loan amount)2 2.67 2.95 2.40 2.45 2.33 2.54 2.56 2.61 2.41' 2.54 6 Contract rate (percent per annum) 14.16 14.47 12.20 12.08 11.80 11.82 11.94 11.80 11.78' 11.64 Yield (percent per annum) 7 FHLBB series3 14.74 15.12 12.66 12.54 12.25 12.34 12.42 1122..2299 1122..2233'' 12.11 8 HUD series4 16.52 15.79 13.43 13.60 13.52 13.48 13.41 13.28 13.31' 13.57 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 16.31 15.31 13.11 13.55 13.23 1133..2233 1133..2255 1133..0088 1133..2200 13.68 10 GNMA securities6 15.29 14.68 12.26 12.73 12.42 12.51 12.49 12.35 12.31 12.70 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 58,675 66,031 74,847 75,174 75,665 76,714 78,256 7799,,004499 7799,,335500 80,974 12 FHA/VA-insured 39,341 39,718 37,393 36,670 36,455 36,349 36,211 40,873 35,420 35,329 13 Conventional 19,334 26,312 37,454 38,505 39,210 40,365 42,045 38,177 43,930 45,645 Mortgage transactions (during period) 14 Purchases 6,112 15,116 17,554 1,203 1,244 1,348 2,204 11,,228855 11,,550077 2,030 15 Sales 2 2 3,528 464 257 0 250 20 723 0 Mortgage commitments7 16 Contracted (during period) 9,331 22,105 18,607 2,739 1,882 997 1,471 1,772 1,930 1,626 17 Outstanding (end of period) 3,717 7,606 5,461 6,684 7,182 6,493 5,461 5,470 5,872 5,333 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 18 Total 5,231 5,131 5,996 6,857 6,971 77,,009933 7,633 88,,004499 88,,556666 19 FHA/VA 1,065 1,027 974 961 955 940 941 940 934 20 Conventional 4,166 4,102 5,022 5,8% 6,016 6,153 6,691 7,109 7,632 Mortgage transactions (during period) 21 Purchases 3,800 23,673 23,089 2,263 2,886 11,,228877 1,685 11,,441199 11,,338899 n.a. 22 Sales 3,531 24,170 19,686 1,556 2,750 1,143 1,115 984 810 Mortgage commitments9 23 Contracted (during period) 6,896 28,179 32,852 3,283 2,598 2,093 1,704 1,470 1,386 24 Outstanding (end of period) 3,518 7,549 16,964 16,512 16,198 16,994 16,964 16,994 16,944 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on Government National Mortgage Associamajor institutional lender groups; compiled by the Federal Home Loan Bank tion guaranteed, mortgage-backed, fully modified pass-through securities, assum- Board in cooperation with the Federal Deposit Insurance Corporation. ing prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the 2. Includes all fees, commissions, discounts, and "points" paid (by 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; from Department of Housing and Urban Development. 8. Includes participation as well as whole loans. 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing 9. Includes conventional and government-underwritten loans. FHLMC's mort- Administration-insured first mortgages for immediate delivery in the private gage commitments and mortgage transactions include activity under mortgage/ secondary market. Any gaps in data are due to periods of adjustment to changes in securities swap programs, while the corresponding data for FNMA exclude swap maximum permissible contract rates. activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A37 1.54 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1983 1984 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998811 11998822 11998833 QL Q2 Q3 Q4 QL 1 All holders 1,583,264 1,655,013 1,826,356' 1,681,630 1,723,052 1,775,117 1,826,356' 1,871,215 2 1- to 4-family 1,065,294 1,105,756 1,214,550' 1,122,111 1,146,926 1,182,356 1,214,550' 1,247,780 3 Multifamily 136,354 140,542 150,950' 141,500 144,731 147,052 150,950' 153,870 4 Commercial 279,889 302,009 351,289' 311,107 323,427 336,697 351,289' 359,343 5 Farm 101,727 106,706 109,567' 106,912 107,968 109,012 109,567' 110,222 6 Major financial institutions 1,040,827 1,023,541 1,109,975' 1,028,802 1,048,688 1,079,605 1,109,975' 1,134,658 7 Commercial banks1 284,536 300,203 328,878' 303,371 310,217 320,299 328,878' 337,878 8 1- to 4-family 170,013 173,157 181,672' 172,346 174,032 178,054 181,672' 185,833 9 Multifamily 15,132 16,421 18,023' 16,230 16,876 17,424 18,023' 18,583 10 Commercial 91,026 102,219 119,843' 106,301 110,437 115,692 119,843' 123,832 11 Farm 8,365 8,406 9,340' 8,494 8,872 9,129 9,340' 9,630 12 Mutual savings banks 99,997 97,805 136,066' 105,378 119,236 129,645 136,066' 142,255 13 1- to 4-family 68,187 66,777 96,577' 73,240 84,349 92,467 96,577' 101,176 14 Multifamily 15,960 15,305 17,787' 15,587 16,667 17,588 17,787' 18,341 15 Commercial 15,810 15,694 21,673' 16,522 18,192 19,562 21,673' 22,708 16 Farm 40 29 29 29 28 28 29 30 17 Savings and loan associations 518,547 483,614 493,432 477,022 474,510 482,305 493,432 502,646 18 1- to 4-family 433,142 393,323 389,811 384,718 377,947 381,744 389,811 396,336 19 Multifamily 37,699 38,979 42,435 39,259 39,954 41,334 42,435 43,479 20 Commercial 47,706 51,312 61,186 53,045 56,609 59,227 61,186 62,831 21 Life insurance companies 137,747 141,919 151,599 143,031 144,725 147,356 151,599 151,879 22 1- to 4-family 17,201 16,743 15,385 16,388 15,860 15,534 15,385 15,351 23 Multifamily 19,283 18,847 19,189 18,825 18,778 18,857 19,189 19,207 24 Commercial 88,163 93,501 104,279 95,158 97,416 100,209 104,279 104,621 25 Farm 13,100 12,828 12,746 12,660 12,671 12,756 12,746 12,700 26 Federal and related agencies 126,094 138,185 147,371' 140,028 142,094 142,224 147,371' 151,396 27 Government National Mortgage Association 4,765 4,227 3,395 3,753 3,643 3,475 3,395 3,273 28 1- to 4-family 693 676 630 665 651 639 630 607 29 Multifamily 4,072 3,551 2,765 3,088 2,992 2,836 2,765 2,666 30 Farmers Home Administration 2,235 1,786 2,141 2,077 1,605 600 2,141 2,141 31 1- to 4-family 914 783 1,159 707 381 211 1,159 1,159 32 Multifamily 473 218 173 380 555 32 173 173 33 Commercial 506 377 409 337 248 113 409 409 34 Farm 342 408 400 653 421 244 400 400 35 Federal Housing and Veterans Administration 5,999 5,228 4,894' 5,138 5,084 5,050 4,894' 4,969 36 1- to 4-family 2,289 1,980 1,893' 1,867 1,911 2,061 1,893' 1,929 37 Multifamily 3,710 3,248 3,001' 3,271 3,173 2,989 3,001' 3,040 38 Federal National Mortgage Association 61,412 71,814 78,256 73,666 74,669 75,174 78,256 80,975 39 1- to 4-family 55,986 66,500 73,045 68,370 69,396 69,938 73,045 75,770 40 Multifamily 5,426 5,314 5,211 5,296 5,273 5,236 5,211 5,205 41 Federal Land Banks 46,446 50,350 51,052 50,544 50,858 51,069 51,052 51,022 42 1- to 4-family 2,788 3,068 3,000 3,059 3,030 3,008 3,000 2,993 43 Farm 43,658 47,282 48,052 47,485 47,828 48,061 48,052 48,029 44 Federal Home Loan Mortgage Corporation 5,237 4,780 7,633 4,850 6,235 6,856 7,633 9,016 45 1- to 4-family 5,181 4,733 7,576 4,795 6,119 6,799 7,576 8,951 46 Multifamily 56 47 57 55 116 57 57 65 47 Mortgage pools or trusts2 163,000 216,654 285,021 234,596 252,665 272,611 285,021 297,690 48 Government National Mortgage Association 105,790 118,940 159,850 127,939 139,276 151,597 159,850 166,914 49 1- to 4-family 103,007 115,831 155,801 124,482 135,628 147,761 155,801 162,596 50 Multifamily 2,783 3,109 4,049 3,457 3,648 3,836 4,049 4,318 51 Federal Home Loan Mortgage Corporation 19,853 42,964 57,843 48,008 50,934 54,152 57,843 59,422 52 1- to 4-family 19,501 42,560 57,206 47,575 50,446 53,539 57,206 58,755 53 Multifamily 352 404 637 433 488 613 637 667 54 Federal National Mortgage Association3 717 14,450 25,121 18,157 20,933 23,819 25,121 28,354 55 1- to 4-family 717 14,450 25,121 18,157 20,933 23,819 25,121 28,354 56 Farmers Home Administration 36,640 40,300 42,207 40,492 41,522 43,043 42,207 43,000 57 1- to 4-family 18,378 20,005 20,404 20,263 20,728 21,083 20,404 20,787 58 Multifamily 3,426 4,344 5,090 4,344 4,343 5,042 5,090 5,186 59 Commercial 6,161 7,011 7,351 7,115 7,303 7,542 7,351 7,489 60 Farm 8,675 8,940 9,362 8,770 9,148 9,376 9,362 9,538 61 Individual and others4 253,343 276,633 283,989' 278,204 279,605 280,677 283,989' 287,471 62 1- to 4-family5 167,297 185,170 185,270' 185,479 185,515 185,699 185,270' 187,183 63 Multifamily 27,982 30,755 32,533' 31,275 31,868 31,208 32,533' 32,940 64 Commercial 30,517 31,895 36,548' 32,629 33,222 34,352 36,548' 37,453 65 Farm 27,547 28,813 29,638' 28,821 29,000 29,418 29,638' 29,895 1. Includes loans held by nondeposit trust companies but not bank trust 5. Includes a new estimate of residential mortgage credit provided by individdepartments. uals. 2. Outstanding principal balances of mortgages backing securities insured or NOTE. Based on data from various institutional and governmental sources, with guaranteed by the agency indicated. some quarters estimated in part by the Federal Reserve in conjunction with the 3. Outstanding balances on FNMA's issues of securities backed by pools of Federal Home Loan Bank Board and the Department of Commerce. Separation of conventional mortgages held in trust. The program was implemented by FNMA in nonfarm mortgage debt by type of property, if not reported directly, and October 1981. interpolations and extrapolations when required, are estimated mainly by the 4. Other holders include mortgage companies, real estate investment trusts, Federal Reserve. Multifamily debt refers to loans on structures of five or more state and local credit agencies, state and local retirement funds, noninsured units. pension funds, credit unions, and U.S. agencies for which amounts are small or for which separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • May 1984 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change A Millions of dollars 1983 1984 iyoi lyoz Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Amounts outstanding (end of period) 1 Total 314,910 335,691 355,849 371,295 375,246 379,334 384,410 396,082 394,922 399,177 402,466 By major holder 2 Commercial banks 147,013 147,622 152,490 158,402 160,973 163,274 165,670 171,978 171,934 175,941 177,625 3 Finance companies 76,756 89,818 98,693 102,541 102,174 102,338 102,560 102,862 101,680 101,702 101,619 4 Credit unions 44,041 45,953 47,253 50,121 51,123 51,767 52,578 53,471 53,882 54,851 55,892 5 Retailers2 28,697 31,348 32,735 30,648 30,926 31,337 32,371 35,911 34,505 33,455 33,208 6 Savings and loans 9,911 12,410 15,823 19,461 19,985 20,472 21,023 21,615 21,823 22,269 23,071 7 Gasoline companies 4,468 4,403 4,063 4,457 4,338 4,243 4,157 4,131 4,300 4,025 3,944 8 Mutual savings banks 4,024 4,137 4,792 5,665 5,727 5,903 6,051 6,114 6,798 6,934 7,107 By major type of credit 9 Automobile 116,838 125,331 131,086 138,242 139,002 140,101 141,107 142,449 143,186 146,047 146,047 10 Commercial banks 61,536 58,081 59,555 62,178 63,448 64,780 65,917 67,557 68,747 71,327 71,237 11 Indirect paper 35,233 34,375 34,755 (3) (3) (3) (3) (3) (3) (3) (3) 12 Direct loans 26,303 23,706 23,472 (3) (3) (3) (3) (3) (3) (3) (3) 13 Credit unions 21,060 21,975 22,596 23,972 24,451 24,759 25,147 25,574 25,771 26,234 26,732 14 Finance companies 34,242 45,275 48,935 52,092 51,103 50,562 50,043 49,318 48,668 48,486 48,078 15 Revolving 58,506 64,500 69,998 70,006 71,039 72,105 74,032 80,823 78,566 77,671 79,110 16 Commercial banks 29,765 32,880 36,666 38,162 39,041 39,774 40,774 44,184 43,118 43,506 45,235 17 Retailers 24,273 27,217 29,269 27,387 27,660 28,088 29,101 32,508 31,148 30,140 29,931 18 Gasoline companies 4,468 4,403 4,063 4,457 4,338 4,243 4,157 4,131 4,300 4,025 3,944 19 Mobile home 17,321 17,958 22,254 22,993 23,189 23,358 23,492 23,680 23,668 23,571 23,661 20 Commercial banks 10,371 10,187 9,605 9,851 9,876 9,877 9,871 9,842 9,829 9,663 9,589 21 Finance companies 3,745 4,494 9,003 9,140 9,1% 9,250 9,270 9,365 9,345 9,324 9,333 22 Savings and loans 2,737 2,788 3,143 3,471 3,575 3,682 3,793 3,906 3,923 4,003 4,147 23 Credit unions 469 489 503 531 542 549 558 567 571 581 592 24 Other 122,244 127,903 132,511 140,054 142,016 143,770 145,779 149,130 149,502 151,888 153,648 25 Commercial banks 45,341 46,474 46,664 48,211 48,608 48,843 49,108 50,395 50,240 51,445 51,564 26 Finance companies 38,769 40,049 40,755 41,309 41,875 42,526 43,247 44,179 43,667 43,892 44,208 27 Credit unions 22,512 23,490 24,154 25,618 26,130 26,459 26,873 27,330 27,540 28,036 28,568 28 Retailers 4,424 4,131 3,466 3,261 3,266 3,249 3,270 3,403 3,357 3,315 3,277 29 Savings and loans 7,174 9,622 12,680 15,990 16,410 16,790 17,230 17,709 17,900 18,266 18,924 30 Mutual savings banks 4,024 4,137 4,792 5,665 5,727 5,903 6,051 6,114 6,798 6,934 7,107 Net change (during period)4 31 Total 1,448 18,217 13,096 4,093 2,553 5,093 4,819 5,782 4,469 6,608 5,870 By major holder 32 Commercial banks -7,163 607 4,442 2,278 1,709 2,713 2,832 3,977 2,029 4,914 3,422 33 Finance companies 8,438 13,062 4,504 638 -385 470 -40 -146 -66 258 -193 34 Credit unions -2,475 1,913 1,298 510 646 942 912 731 916 712 1,230 35 Retailers2 329 1,103 651 164 225 215 318 537 422 325 355 36 Savings and loans 1,485 1,682 2,290 265 448 437 584 589 364 414 813 37 Gasoline companies 739 -65 -340 65 -167 131 58 -31 72 -172 2 38 Mutual savings banks 95 -85 251 173 77 185 155 126 731 156 242 By major type of credit 39 Automobile 477 8,495 4,898 2,372 295 1,709 1,268 1,468 2,106 2,799 326 40 Commercial banks -5,830 -3,455 -9 2,063 1,014 1,483 1,257 1,568 1,722 2,635 432 41 Indirect paper -3,104 -858 225 (3) (3) (3) (3) (3) (3) (3) (3) 42 Direct loans -2,726 -2,597 -234 (3) (3) (3) (3) (3) (3) (3) (3) 43 Credit unions -1,184 914 622 232 309 451 436 349 428 276 660 44 Finance companies 7,491 11,033 3,505 77 -1,028 -225 -425 -449 -44 -112 -766 45 Revolving 1,415 4,467 4,365 541 579 1,238 1,427 1,690 505 1,273 2,962 46 Commercial banks -97 3,115 3,808 315 511 875 1,040 1,207 18 1,127 2,613 47 Retailers 773 1,417 897 161 235 232 329 515 414 318 347 48 Gasoline companies 739 -65 -340 65 -167 131 58 -31 72 -172 2 49 Mobile home 483 1,049 609 222 255 -30 -64 1 -92 -127 285 50 Commercial banks -276 -186 -508 -11 10 23 -4 39 -15 -112 -85 51 Finance companies 355 749 471 153 137 -158 -164 -166 -104 -93 218 52 Savings and loans 430 466 633 75 101 95 94 120 18 68 141 53 Credit unions -25 20 14 5 7 10 10 9 9 10 10 54 Other -927 4,206 3,224 958 1,424 2,176 2,188 2,623 1,950 2,662 2,298 55 Commercial banks -960 1,133 372 -89 174 332 539 1,163 304 1,264 463 56 Finance companies 592 1,280 528 408 506 853 549 469 82 463 355 57 Credit unions -1,266 975 662 273 330 481 466 374 479 426 558 58 Retailers -444 -314 -246 3 -10 -17 -11 22 8 7 7 59 Savings and loans 1,056 1,217 1,657 190 347 342 490 469 346 346 673 60 Mutual savings banks 95 -85 251 173 77 185 155 126 731 156 242 • These data have been revised from July 1979 through February 1984. 4. For 1982 and earlier, net change equals extensions, seasonally adjusted less 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, and scheduled to be repaid (or with the option of repayment) in two or more NOTE: Total consumer noninstallment credit outstanding—credit scheduled to installments. be repaid in a lump sum, including single-payment loans, charge accounts, and 2. Includes auto dealers and excludes 30-day charge credit held by travel and service credit—amounted to, not seasonally adjusted, $79.4 billion at the end of entertainment companies. 1981, $84.5 billion at the end of 1982, and $95.5 billion at the end of 1983. 3. Not reported after December 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A39 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT Percent unless noted otherwise 1983 1984 IItteemm 11998811 11998822 11998833 Sept. Oct. Nov. Dec. Jan. Feb. Mar. INTEREST RATES Commercial banks1 1 16.54 16.83 13.92 13.46 13.32 ~> 18.09 18.65 16.68 16.39 16.16 17.45 18.05 15.91 15.47 15.45 4 1177..7788 1188..5511 1188..7733 1188..7755 1188..7733 Auto finance companies New car 16.17 16.15 12.58 13.62 13.54 13.50 13.92 14.18 14.11 14.05 6 Used car 20.00 20.75 18.74 18.21 18.15 18.16 18.06 17.54 17.59 17.52 OTHER TERMS3 Maturity (months) 7 New car 45.4 46.0 45.9 46.2 46.2 46.3 46.3 46.3 46.4 46.7 8 Used car 35.8 34.0 37.9 38.0 38.0 38.0 37.9 39.5 39.4 39.4 Loan-to-value ratio 9 New car 86.1 85.3 86.0 87 86 86 87 88 87 87 10 Used car 91.8 90.3 92.0 93 93 93 92 92 91 92 Amount financed (dollars) 11 New car 7,339 8,178 8,787 8,792 8,982 9,118 9,167 9,099 9,072 9,139 12 Used car 4,343 4,746 5,033 5,144 5,213 5,316 5,401 5,392 5,418 5,474 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

A40 Domestic Nonfinancial Statistics • May 1984 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1981 1982 1983 ly/y HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 369.8 386.0 343.2 377.2 395.3 509.5 392.4 362.0 356.8 434.8 497.3 521.7 By sector and instrument 2 U.S. government 53.7 37.4 79.2 87.4 161.3 186.6 87.8 86.9 106.9 215.5 231.1 142.1 3 Treasury securities 55.1 38.8 79.8 87.8 162.1 186.7 88.3 87.3 108.3 215.9 231.2 142.2 4 Agency issues and mortgages -1.4 -1.4 -.6 -.5 -.9 -.1 -.5 -.4 -1.4 -.4 -.1 -.1 5 Private domestic nonfinancial sectors 316.2 348.6 264.0 289.8 234.1 322.9 304.6 275.1 249.9 219.3 266.2 379.7 6 Debt capital instruments 199.7 211.2 192.0 158.4 152.4 227.9 179.3 137.5 139.7 166.1 221.1 234.7 7 Tax-exempt obligations 28.4 30.3 30.3 21.9 50.5 44.3 21.1 22.6 41.7 59.4 59.8 28.8 8 Corporate bonds 21.1 17.3 26.7 22.1 18.8 15.0 26.1 18.0 10.8 26.9 21.1 9.0 9 Mortgages 150.2 163.6 135.1 114.5 83.0 168.6 132.0 96.9 87.3 79.9 140.2 196.9 10 Home mortgages 112.2 120.0 96.7 75.9 56.6 111.4 92.6 59.2 55.8 58.6 92.9 129.8 11 Multifamily residential 9.2 7.8 8.8 4.3 1.3 9.2 4.9 3.7 4.2 -1.7 6.2 12.1 12 Commercial 21.7 23.9 20.2 24.6 20.0 45.2 25.2 23.9 21.4 18.6 40.1 50.3 13 Farm 7.2 11.8 9.3 9.7 5.2 2.9 9.3 10.1 5.9 4.4 1.0 4.7 14 Other debt instruments 116.5 137.5 72.0 131.5 81.6 95.0 125.3 137.6 110.1 53.2 45.1 145.0 15 Consumer credit 48.8 45.4 4.9 24.1 18.3 54.2 28.9 19.3 19.3 17.4 39.8 68.6 16 Bank loans n.e.c 37.4 51.2 36.7 54.7 54.4 19.1 45.5 63.9 70.1 38.8 6.6 31.6 17 Open market paper 5.2 11.1 5.7 19.2 -3.3 -1.2 12.0 26.3 6.5 -13.0 -16.3 14.0 18 Other 25.1 29.7 24.8 33.4 12.2 23.0 38.9 28.0 14.3 10.2 15.0 30.9 19 By borrowing sector 316.2 348.6 264.0 289.8 234.1 322.9 304.6 275.1 249.9 219.3 266.2 379.7 20 State and local governments 19.1 20.5 20.3 9.7 36.3 35.9 9.1 10.2 29.3 43.3 50.3 21.6 21 Households 169.4 176.4 117.5 120.6 86.3 163.6 139.8 101.3 87.6 86.1 128.5 198.7 22 Farm 14.6 21.4 14.4 16.3 9.0 3.9 20.1 12.5 9.0 9.1 -.4 8.2 23 Nonfarm noncorporate 32.4 34.4 33.7 39.6 29.8 62.0 39.8 39.5 34.6 24.9 51.3 72.7 24 Corporate 80.6 96.0 78.1 103.7 72.7 57.4 95.8 111.5 89.3 56.0 36.5 78.4 25 Foreign net borrowing in United States 33.8 20.2 27.2 27.2 15.7 19.2 31.9 22.5 12.8 18.6 18.5 19.9 26 Bonds 4.2 3.9 .8 5.4 6.6 3.3 3.3 7.6 2.4 10.8 4.4 2.2 27 Bank loans n.e.c 19.1 2.3 11.5 3.7 -6.2 5.9 3.1 4.2 -5.1 -7.2 14.7 -2.8 28 Open market paper 6.6 11.2 10.1 13.9 10.7 6.0 20.6 7.1 12.5 9.0 -4.6 16.5 29 U.S. government loans 3.9 2.9 4.7 4.2 4.5 4.0 4.9 3.5 3.0 6.0 4.0 4.0 30 Total domestic plus foreign 403.6 406.2 370.4 404.4 411.0 528.7 424.4 384.5 369.6 453.4 515.7 541.6 Financial sectors 31 Total net borrowing by financial sectors 74.6 82.5 63.3 85.4 69.3 88.6 87.4 83.4 89.8 48.7 74.1 103.2 By instrument 32 U.S. government related 37.1 47.9 44.8 47.4 64.9 68.1 45.2 49.6 61.3 68.4 68.0 68.3 33 Sponsored credit agency securities 23.1 24.3 24.4 30.5 14.9 1.6 28.9 32.1 23.6 6.3 -2.4 5.7 34 Mortgage pool securities 13.6 23.1 19.2 15.0 49.5 66.5 14.9 15.1 37.0 62.1 70.4 62.5 ^ Loans from U.S. government .4 .6 1.2 1.9 .4 1.4 2.4 8 36 Private financial sectors 37.5 34.6 18.5 38.0 4.4 20.5 42.2 33.8 28.5 -19.7 6.1 35.0 37 Corporate bonds 7.5 7.8 7.1 -.8 2.3 17.2 -.3 -1.4 -1.2 5.8 15.3 19.2 38 Mortgages .1 * -.1 -.5 .1 .1 -.8 -.2 .1 .1 .1 .1 39 Bank loans n.e.c 2.8 -.4 -.4 2.2 3.2 -2.9 3.2 1.1 5.2 1.2 -5.2 -.7 40 Open market paper 14.6 18.0 4.8 20.9 -2.0 13.2 23.5 18.4 14.0 -18.0 8.8 17.6 41 Loans from Federal Home Loan Banks 12.5 9.2 7.1 16.2 .8 -7.0 16.7 15.8 10.4 -8.8 -12.9 -1.2 By sector 42 Sponsored credit agencies 23.5 24.8 25.6 32.4 15.3 1.6 30.3 34.5 24.4 6.3 -2.4 5.7 43 Mortgage pools 13.6 23.1 19.2 15.0 49.5 66.5 14.9 15.1 37.0 62.1 70.4 62.5 44 Private financial sectors 37.5 34.6 18.5 38.0 4.4 20.5 42.2 33.8 28.5 -19.7 66..11 35.0 45 Commercial banks 1.3 1.6 .5 .4 1.2 .6 .2 .5 .7 1.7 ..88 .5 46 Bank affiliates 7.2 6.5 6.9 8.3 1.9 8.6 6.9 9.7 9.7 -5.8 6.1 11.1 47 Savings and loan associations 13.5 12.6 7.4 15.5 -3.0 -5.2 16.8 14.1 9.1 -15.2 -10.8 .3 48 Finance companies 18.1 16.6 6.3 14.1 4.9 17.2 18.5 9.7 9.5 .2 10.7 23.7 49 REITs -1.4 -1.3 -2.2 .2 .1 .1 .2 .2 .1 .1 .1 .1 All sectors 50 Total net borrowing 478.2 488.7 433.7 489.8 480.3 617.3 511.8 467.9 459.4 502.1 589.8 644.8 51 U.S. government securities 90.5 84.8 122.9 133.0 225.9 254.7 131.8 134.3 167.6 284.0 299.1 210.4 52 State and local obligations 28.4 30.3 30.3 21.9 50.5 44.3 21.1 22.6 41.7 59.4 59.8 28.8 53 Corporate and foreign bonds 32.8 29.0 34.6 26.7 27.7 35.5 29.1 24.2 12.0 43.5 40.7 30.3 54 Mortgages 150.2 163.5 134.9 113.9 83.0 168.6 131.1 96.6 87.3 79.8 140.2 197.0 55 Consumer credit 48.8 45.4 4.9 24.1 18.3 54.2 28.9 19.3 19.3 17.4 39.8 68.6 56 Bank loans n.e.c 59.3 53.0 47.8 60.6 51.4 22.1 51.8 69.3 70.2 32.8 16.1 28.0 5/ Open market paper 26.4 40.3 20.6 54.0 5.4 18.0 56.1 51.9 33.0 -22.1 -12.1 48.0 58 Other loans 41.9 42.4 37.8 55.8 17.9 19.9 61.8 49.7 28.4 7.4 6.1 33.7 External corporate equity funds raised in United States 59 Total new share issues 1.9 -3.8 22.2 -3.7 35.4 69.2 10.2 -17.7 23.7 47.0 87.1 51.3 60 Mutual funds -.1 .1 5.2 6.8 18.6 32.6 8.1 5.6 13.2 24.0 38.7 26.4 61 All other 1.9 -3.9 17.1 -10.6 16.8 36.6 2.1 -23.2 10.6 23.0 48.3 24.9 62 Nonfinancial corporations -.1 -7.8 12.9 -11.5 11.4 28.3 .9 -23.8 7.0 15.8 38.2 18.4 63 Financial corporations 2.5 3.2 2.1 .9 4.1 4.4 .5 1.2 3.8 4.4 4.4 4.5 64 Foreign shares purchased in United States -.5 .8 2.1 * 1.3 3.9 .7 -.7 -.2 2.9 5.7 2.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 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. 1981 1982 1983 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997788 11997799 11998800 11998811 11998822 11998833 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 369.8 386.0 343.2 377.2 395.3 509.5 392.4 362.0 356.8 434.8 449977..33 552211..77 By public agencies and foreign ? Total net advances 102.3 75.2 97.0 97.4 109.3 114.8 111133..88 8811..00 110077..99 111100..88 112299..55 110000..00 3 U.S. government securities 36.1 -6.3 15.7 17.2 17.9 27.7 31.2 3.1 17.7 18.2 51.2 4.2 4 Residential mortgages 25.7 35.8 31.7 23.4 61.1 75.9 21.9 25.0 48.1 74.0 80.7 71.0 5 FHLB advances to savings and loans 12.5 9.2 7.1 16.2 .8 -7.0 16.7 15.8 10.4 -8.8 -12.9 -1.2 6 Other loans and securities 28.0 36.5 42.4 40.6 29.5 18.3 44.1 37.1 31.7 27.4 10.4 26.1 Total advanced, by sector 7 U.S. government 17.1 19.0 23.7 24.1 16.7 9.8 27.9 20.3 1144..22 1199..11 88..22 1111..33 8 Sponsored credit agencies 40.3 53.0 45.6 48.2 65.3 68.9 47.2 49.2 62.5 68.1 69.1 68.7 9 Monetary authorities 7.0 7.7 4.5 9.2 9.8 10.9 2.4 16.0 ..11 19.5 12.1 9.7 10 Foreign 38.0 -4.6 23.2 16.0 17.6 25.2 36.4 -4.4 3311..11 4.1 40.1 10.3 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 37.1 47.9 44.8 47.4 64.9 6688..11 4455..22 4499..66 6611..33 6688..44 6688..00 6688..33 12 Foreign 33.8 20.2 27.2 27.2 15.7 19.2 31.9 22.5 12.8 18.6 18.5 19.9 Private domestic funds advanced N Total net advances 338.4 379.0 318.2 354.4 366.6 482.0 335555..77 353.1 332233..00 441111..00 445544..22 550099..88 14 U.S. government securities 54.3 91.1 107.2 115.9 207.9 227.0 100.6 131.1 149.9 265.8 247.9 206.2 15 State and local obligations 28.4 30.3 30.3 21.9 50.5 44.3 21.1 22.6 41.7 59.4 59.8 28.8 16 Corporate and foreign bonds 23.4 18.5 19.3 19.4 15.4 12.1 20.9 17.9 -1.7 32.4 19.9 4.4 17 Residential mortgages 95.6 91.9 73.7 56.7 -3.3 44.6 75.5 37.9 11.7 -17.2 18.3 70.9 18 Other mortgages and loans 149.3 156.3 94.8 156.9 96.8 146.9 154.3 159.5 131.7 62.0 95.3 198.4 19 LESS: Federal Home Loan Bank advances 12.5 9.2 7.1 16.2 .8 -7.0 16.7 15.8 10.4 -8.8 -12.9 -1.2 Private financial intermediation 20 Credit market funds advanced by private finan- 302.3 294.7 262.3 305.2 271.2 368.5 317.3 293.1 227722..88 226688..99 334477..55 338899..55 71 Commercial banking 129.0 123.1 101.1 103.6 108.5 135.3 99.6 107.6 109.7 107.1 127.6 143.0 7? Savings institutions 72.8 56.7 54.9 27.2 30.6 128.6 41.5 12.8 29.5 31.0 130.6 126.6 73 Insurance and pension funds 75.0 66.4 74.4 79.3 94.2 102.1 75.3 83.4 95.4 93.0 107.4 96.8 24 Other finance 25.5 48.5 32.0 95.2 37.9 2.6 101.0 89.4 38.1 37.8 -18.0 23.1 75 Sources of funds 302.3 294.7 262.3 305.2 271.2 368.5 317.3 293.1 272.8 268.9 347.5 389.5 76 Private domestic deposits and RPs 141.0 142.0 168.6 211.7 173.4 200.3 213.8 209.6 163.4 182.7 211.6 189.0 27 Credit market borrowing 37.5 34.6 18.5 38.0 4.4 20.5 42.2 33.8 28.5 -19.7 6.1 35.0 78 Other sources 123.8 118.1 75.2 55.5 93.5 147.7 61.3 49.8 80.8 105.9 129.8 165.5 29 Foreign funds 6.5 27.6 -21.7 -8.7 -27.7 17.2 -8.7 -8.7 -30.1 -25.4 -18.9 53.4 30 Treasury balances 6.8 .4 -2.6 -1.1 6.1 -6.0 6.5 -8.7 -2.1 14.1 8.4 -20.4 31 Insurance and pension reserves 62.2 49.1 65.4 73.2 85.9 88.0 62.7 83.8 85.4 86.4 93.1 82.9 32 Other, net 48.4 41.0 34.0 -7.9 29.2 48.4 .8 -16.7 27.6 30.7 47.2 49.6 Private domestic nonfinancial investors 33 Direct lending in credit markets 73.6 118.9 74.4 87.2 99.7 134.0 80.6 93.8 7788..77 112222..44 111122..88 115555..33 34 U.S. government securities 36.3 61.4 38.3 47.4 58.1 89.8 37.2 57.6 43.1 72.7 88.0 91.5 35 State and local obligations 3.6 9.9 7.0 9.6 30.9 31.9 9.5 9.7 28.4 33.4 47.7 16.1 36 Corporate and foreign bonds -1.8 5.7 .6 -8.9 -9.4 -6.1 -5.5 -12.4 -26.3 7.4 -19.1 6.8 37 Open market paper 15.6 12.1 -4.3 3.7 -2.0 7.7 -3.3 10.7 6.7 -10.7 -11.2 26.6 38 Other 19.9 29.8 32.9 35.4 22.1 10.8 42.7 28.2 26.8 19.6 7.4 14.2 39 Deposits and currency 152.2 151.4 180.0 221.7 179.4 217.5 222.6 220.7 166.2 192.1 231.9 203.2 40 Currency 9.3 7.9 10.3 9.5 8.4 13.9 8.0 11.0 4.5 12.3 14.1 13.8 41 Checkable deposits 16.2 18.7 5.0 18.1 13.0 22.5 29.8 6.5 6.7 19.1 53.1 -8.0 47 Small time and savings accounts 65.9 59.2 83.1 47.2 137.0 216.6 30.7 63.6 95.1 178.6 295.8 137.4 43 Money market fund shares 6.9 34.4 29.2 107.5 24.7 -44.1 104.1 110.8 39.4 10.0 -84.0 -4.2 44 Large time deposits 44.4 23.0 44.7 36.4 -5.2 -2.3 41.6 31.2 21.2 -31.6 -64.4 59.8 45 Security RPs 7.5 6.6 6.5 2.5 3.8 7.5 7.7 -2.6 1.1 6.6 11.0 4.0 46 Deposits in foreign countries 2.0 1.5 1.1 .5 -2.4 3.3 .8 .2 -1.8 -2.9 6.1 .4 47 Total of credit market instruments, deposits and currency 225.8 270.3 254.4 308.9 279.1 351.6 303.3 314.5 224444..99 314.5 334444..77 335588..55 48 Public holdings as percent of total 25.3 18.5 26.2 24.1 26.6 21.7 26.8 21.1 29.2 24.4 25.1 18.5 49 Private financial intermediation (in percent) 89.3 77.7 82.4 86.1 74.0 76.5 89.2 83.0 84.4 65.4 76.5 76.4 50 Total foreign funds 44.6 23.0 1.5 7.3 -10.2 42.5 27.8 -13.1 1.0 -21.3 21.2 63.7 MEMO: Corporate equities not included above 51 Total net issues 1.9 -3.8 22.2 -3.7 35.4 69.2 10.2 -17.7 2233..77 47.0 8877..11 5511..33 5? Mutual fund shares -.1 .1 5.2 6.8 18.6 32.6 8.1 5.6 13.2 24.0 38.7 26.4 53 Other equities 1.9 -3.9 17.1 -10.6 16.8 36.6 2.1 -23.2 10.6 23.0 48.3 24.9 54 Acquisitions by financial institutions 4.5 9.7 16.8 22.1 27.9 54.4 25.3 18.9 19.3 36.4 68.4 40.3 55 Other net purchases -2.7 -13.5 5.4 -25.9 7.5 14.8 -15.1 -36.6 4.4 10.6 18.6 11.0 NOTES BY LINE NUMBER. 32. Mainly retained earnings and net miscellaneous liabilities. 1. Line 1 of table 1.58. 33. Line 12 less line 20 plus line 27. 2. Sum of lines 3-6 or 7-10. 34-38. Lines 14-18 less amounts acquired by private finance. Line 38 includes 6. Includes farm and commercial mortgages. mortgages. 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

A42 Domestic Nonfinancial Statistics • May 1984 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1983 1984 MMeeaassuurree 11998811 11998822 11998833 Aug. Sept. Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr. 1 Industrial production1 151.0 138.6 147.6 151.8 153.8 155.0 155.3 156.2 158.5 160.1 160.9 163.1 Market groupings 2 Products, total 150.6 141.8 149.2 153.2 154.9 155.6 155.8 157.4 159.7 160.5 161.2 163.2 3 Final, total 149.5 141.5 147.1 150.7 152.1 152.7 153.2 155.2 157.5 158.2 158.8 160.7 4 Consumer goods 147.9 142.6 151.7 156.3 157.3 156.9 156.1 157.7 159.5 159.6 159.9 161.6 5 Equipment 151.5 139.8 140.8 143.1 144.9 147.0 149.1 151.8 154.9 156.3 157.2 159.5 6 Intermediate 154.4 143.3 156.6 162.2 165.4 166.5 165.5 165.4 167.8 169.1 169.9 172.3 7 Materials 151.6 133.7 145.2 149.7 152.2 154.0 154.5 154.5 156.6 159.6 160.6 162.9 Industry groupings 8 Manufacturing 150.4 137.6 148.2 152.8 155.1 156.2 156.4 156.8 159.5 161.6 162.4 164.9 Capacity utilization (percent)1'2 9 Manufacturing 79.4 71.1 75.2 77.3 78.4 78.9 78.8 78.9 80.1 81.0 81.2 82.3 10 Industrial materials industries 80.7 70.1 75.2 77.4 78.6 79.5 79.6 79.6 80.6 82.0 82.3 83.3 11 Construction contracts (1977 = 100)3 111.0 111.0 138.0 154.0 143.0 139.0 145.0 134.0 150.0 150.0 n.a. n.a. 12 Nonagricultural employment, total4 138.5 136.2 136.8 136.4 138.1 138.4 138.8 139.2 139.7 140.4 140.6 141.2 13 Goods-producing, total 109.4 102.6 101.5 102.2 102.7 103.7 104.3 104.7 105.6 106.3 106.3 107.1 14 Manufacturing, total 103.7 96.9 96.0 96.6 97.0 98.0 98.6 99.1 99.7 100.3 100.6 101.1 15 Manufacturing, production-worker ... 98.0 89.4 88.7 89.5 89.9 91.2 91.9 92.5 93.1 93.7 94.0 94.7 16 Service-producing 154.4 154.6 156.1 155.1 157.5 157.5 157.8 158.1 158.4 159.0 159.4 159.9 17 Personal income, total 386.5 409.3 453.3 437.5 441.5 446.5 450.0 453.7 461.4 464.6 466.7 i 18 Wages and salary disbursements 349.7 367.2 389.8 393.6 396.2 400.6 401.7 404.1 409.5 411.5 412.8 19 Manufacturing 287.3 286.2 300.4 304.6 308.2 310.2 312.8 314.3 320.4 323.3 324.6 20 Disposable personal income3 373.7 397.3 426.3 430.1 434.1 438.8 442.1 446.2 454.0 457.2 459.5 n a. 21 Retail sales6 330.6 326.0 373.(K 375.5r 380.3' 385.6' 389. ¥ 391.4' 407.3 403.0 395.0 Prices7 22 Consumer 272.4 289.1 298.4 300.3 301.8 302.6 303.1 303.5 305.2 306.6 307.3 23 Producer finished goods 269.8 280.7 285.2 286.1 285.1 287.9 286.8 287.1 289.4 290.6 291.7 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 1. 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 1983 1984 1983 1984 1983 1984 Q2 Q3 Q4 Ql' Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 144.5 151.8 155.5 159.8 195.5 196.4 197.3 198.3 73.9 77.3 78.8 80.6 2 Mining 112.3 116.1 121.0 124.3 165.3 165.4 165.5 165.7 67.9 70.2 73.1 75.0 3 Utilities 169.6 178.2 178.4 178.6 209.8 211.1 212.4 213.8 80.8 84.4 84.<y 83.5 4 Manufacturing 145.2 152.8 156.5 161.2 196.6 197.5 198.4 199.5 73.8 77.4 78.9 80.8 5 Primary processing 145.2 152.8 156.4 160.7 194.8 195.3 195.8 196.4 74.6 78.3 79.9 81.6 6 Advanced processing 145.1 152.8 156.1 161.8 197.6 198.6 199.7 201.0 73.5 76.9 78.2 80.3 7 Materials 141.7 149.9 154.3 158.9 192.9 193.4 194.0 194.7 73.5 77.5 79.6 81.6 8 Durable goods 134.7 144.2 150.3 157.6 195.6 196.0 196.5 197.1 68.9 73.6 76.5 80.0 9 Metal materials 84.9 89.3 93.8 97.3 139.9 139.8 139.6 139.1 60.7 63.9 67.2 70.0 10 Nondurable goods 171.7 179.1 183.5 184.1 218.8 219.6 220.6 221.8 78.5 81.5 83.2r 83.0 11 Textile, paper, and chemical 179.6 188.0 193.2 193.9 230.7 231.6 232.7 234.2 77.9 81.2 83 ,<y 82.8 12 Paper 153.4 162.8 167.4 166.7 166.1 166.9 167.7 168.5 92.3 97.5 99.8r 98.9 13 Chemical 219.4 227.8 235.0 237.5 296.6 298.3 300.1 302.3 74.0 76.4 78. y 78.5 14 Energy materials 121.5 127.4 127.8 131.0 154.3 154.7 155.3 155.8 78.7 82.3 82.3' 84.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A43 2.11 Continued Previous cycle1 Latest cycle2 1983 1983 1984 SSeerriieess High Low High Low Apr. Aug. Sept. Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr. Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 76.5 73.1 77.3 78.2 78.7 78.7 79.1 80.1 80.8 81.0 81.9 16 91.8 86.0 88.5 84.0 67.5 70.2 70.8 71.5 73.2 74.7 75.4 75.1 74.5 74.3 17 Utilities 94.9 82.0 86.7 83.8 80.9 85.0 84.8 83.3 83.0 85.7 84.8 82.6 83.2 83.2 18 Manufacturing 87.9 69.0 87.5 75.5 72.9 77.3 78.4 78.9 78.8 78.9 80.1 81.0 81.2 82.3 19 Primary processing 93.7 68.2 91.4 72.6 73.4 78.1 79.7 80.4 80.0 79.2 80.5 82.0 82.3 83.2 20 Advanced processing.... 85.5 69.4 85.9 77.0 72.5 76.9 77.8 77.9 78.0 78.6 79.9 80.5 80.7 81.7 71 Materials 92.6 69.3 88.9 74.2 72.5 77.4 78.6 79.5 79.6 79.6 80.6 82.0 82.3 83.3 ?? Durable goods 91.4 63.5 88.4 68.4 67.7 73.6 75.2 76.1 76.5 77.0 78.5 80.4 80.9 82.2 23 Metal materials 97.8 68.0 95.4 59.4 59.9 64.0 65.5 68.0 66.8 66.8 67.3 70.9 71.7 73.3 24 Nondurable goods 94.4 67.4 91.7 77.5 77.2 81.1 82.9 84.1 83.8 81.6 81.9 83.2 83.9 84.7 25 Textile, paper, and chemical 95.1 65.4 92.3 75.5 76.4 80.5 82.6 84.1 83.7 81.2 81.5 8833..11 8833..77 8844..44 76 Paper 99.4 72.4 97.9 89.8 91.0 96.9 99.0 99.4 101.3 98.8 99.3 99.0 98.3 n.a. 27 Chemical 95.5 64.2 91.3 70.7 72.6 75.5 77.8 79.7 79.0 76.2 76.7 79.0 79.8 n.a. 28 Energy materials 94.5 84.4 88.7 84.4 78.9 82.8 81.6 81.4 81.8 83.6 84.4 84.2 83.7 83.8 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 1984 CCaatteeggoorryy 11998811 11998822 11998833 Sept. Oct. Nov. Dec. Jan. Feb/ Mar/ Apr. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 172,272 174,450 176,414 176,811 176,990 177,151 177,325 177,733 177,882 178,033 178,185 2 Labor force (including Armed Forces)1 110,812 112,383 113,749 114,438 114,077 114,235 114,340 114,415 114,8% 115,121 115,461 3 Civilian labor force 108,670 110,204 111,550 112,229 111,866 112,035 112,136 112,215 112,693 112,912 113,245 4 Nonagricultural industries2 97,030 96,125 97,450 98,568 98,730 99,349 99,585 99,918 100,4% 100,859 101,009 5 Agriculture 3,368 3,401 3,383 3,308 3,240 3,257 3,356 3,271 3,395 3,281 3,393 Unemployment 6 Number 8,273 10,678 10,717 10,353 9,8% 9,429 9,195 9,026 88,,880011 88,,777722 88,,884433 7 Rate (percent of civilian labor force) ... 7.6 9.7 9.6 9.2 8.8 8.4 8.2 8.0 7.8 7.8 7.8 8 Not in labor force 61,460 62,067 62,665 62,373 62,913 62,916 62,985 63,318 62,986 62,912 62,724 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 91,156 89,596 89,986 90,851 91,084 91,355 91,599 91,930 92,357 92,506 92,913 10 Manufacturing 20,170 18,853 18,678 18,871 19,064 19,172 19,280 19,389 19,499 19,560 19,661 11 Mining 1,132 1,143 1,021 1,026 1,044 1,045 1,047 1,051 1,053 1,052 1,053 1? Contract construction 4,176 3,911 3,949 4,038 4,060 4,094 4,088 4,177 4,233 4,170 4,244 13 Transportation and public utilities 5,157 5,081 4,943 5,031 5;019 5,019 5,015 5,057 5,063 5,073 5,085 14 20,551 20,401 20,508 20,612 20,666 20,718 20,781 20,860 20,918 20,975 20,990 15 Finance 5,301 5,340 5,456 5,499 5,503 5,515 5,525 5,553 5,570 5,580 5,599 16 Service 20,547 19,064 19,685 19,913 19,956 20,016 20,093 20,101 20,249 20,339 20,516 17 Government 16,024 15,803 15,747 15,861 15,775 15,776 15,770 15,742 15,773 15,756 15,757 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

A44 Domestic Nonfinancial Statistics • May 1984 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 1983 Grouping p p r o o r - - a 1 v 98 g 3 . tion Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan/ Feb. Mar.? Apr. Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 147.6 142.6 144.4 146.4 149.7 151.8 153.8 155.0 155.3 156.2 158.5 160.1 2 Products 60.71 149.2 144.5 146.2 148.1 150.9 153.2 154.9 155.6 155.8 157.4 159.7 160.5 3 Final products 47.82 147.1 142.8 144.5 146.4 149.0 150.7 152.1 152.7 153.2 155.2 157.5 158.2 4 Consumer goods 27.68 151.7 147.7 150.4 152.4 154.8 156.3 157.4 156.9 156.1 157.7 159.5 159.6 5 Equipment 20.14 140.8 136.2 136.5 138.2 141.0 143.1 144.9 147.0 149.1 151.8 154.9 156.3 6 Intermediate products 12.89 156.6 150.8 152.2 154.5 158.1 162.2 165.3 166.5 165.5 165.4 167.8 169.1 7 Materials 39.29 145.2 139.7 141.7 143.7 147.8 149.7 152.3 154.0 154.5 154.5 156.6 159.6 Consumer goods 8 Durable consumer goods 7.89 147.5 140.5 145.5 149.2 152.9 154.2 157.4 156.7 155.9 158.6 163.4 162.7 9 Automotive products 2.83 158.2 144.9 152.2 160.0 167.0 168.1 172.9 171.3 171.5 178.4 184.5 182.3 10 Autos and utility vehicles 2.03 134.0 117.8 124.9 135.4 145.4 147.0 153.1 149.2 149.2 157.8 163.3 162.9 11 Autos 1.90 117.4 102.7 107.4 118.3 129.8 132.0 135.0 129.6 129.4 137.4 140.7 141.2 12 Auto parts and allied goods .80 219.6 213.6 221.5 222.6 221.9 221.8 223.1 227.4 228.2 230.7 238.4 231.6 13 Home goods 5.06 141.4 138.1 141.8 143.2 144.9 146.4 148.7 148.4 147.2 147.5 151.5 151.6 14 Appliances, AJC, and TV 1.40 116.4 106.1 112.8 114.4 116.2 121.2 125.2 129.2 127.0 126.3 136.4 135.1 15 Appliances and TV 1.33 120.1 109.7 116.1 118.4 119.7 125.0 129.7 133.3 131.3 130.2 140.0 138.6 16 Carpeting and furniture 1.07 178.1 180.5 181.9 185.6 187.3 187.5 186.3 185.5 182.7 184.0 183.1 178.7 17 Miscellaneous home goods 2.59 139.9 137.9 140.9 141.3 143.0 143.2 145.9 143.6 143.4 143.9 146.7 149.4 18 Nondurable consumer goods 19.79 153.4 150.5 152.3 153.6 155.6 157.1 157.5 157.1 156.1 157.3 157.9 158.3 19 Clothing 4.29 20 Consumer staples 15.50 1637 161.1 162.8 164.3 166.1 168.0 168.0 167.2 165.4 166.0 166.5 166.9 21 Consumer foods and tobacco 8.33 153.5 150.9 153.2 155.9 156.6 156.3 154.9 156.0 154.5 155.4 156.5 156.8 22 Nonfood staples 7.17 175.4 172.9 174.0 174.1 177.2 181.6 183.2 180.3 178.1 178.3 178.2 178.7 23 Consumer chemical products 2.63 231.0 225.5 227.8 229.0 233.8 239.7 241.5 238.7 232.4 229.9 231.6 231.9 24 Consumer paper products 1.92 132.7 129.2 128.6 130.1 132.6 137.4 138.2 137.6 136.6 137.2 138.8 140.3 25 Consumer energy products 2.62 150.9 152.2 153.4 151.2 153.2 155.7 157.7 153.0 154.1 156.5 153.4 153.3 26 Residential utilities 1.45 173.4 175.5 174.3 170.5 173.2 179.9 182.8 174.5 175.8 185.2 180.0 172.8 Equipment 27 Business 12.63 153.3 146.9 147.7 150.2 153.3 156.6 158.8 161.3 164.1 167.3 170.7 172.2 28 Industrial 6.77 120.4 113.5 114.5 116.3 119.9 124.3 125.6 126.6 128.6 130.8 133.7 134.9 29 Building and mining 1.44 159.3 141.8 146.2 148.7 154.4 159.2 160.8 166.9 175.8 185.3 185.1 181.9 30 Manufacturing 3.85 107.1 101.7 102.5 105.0 108.9 113.3 115.0 114.6 114.3 115.1 119.7 121.6 31 Power 1.47 117.1 116.6 115.0 114.1 114.6 119.0 118.8 118.5 119.4 118.4 120.0 123.8 32 Commercial transit, farm 5.86 191.3 185.4 186.1 189.5 191.9 194.0 196.7 201.3 205.1 209.6 213.3 215.3 33 Commercial 3.26 273.2 264.3 265.0 270.9 276.0 277.4 281.2 288.1 292.5 298.9 303.2 305.7 34 Transit 1.93 95.2 92.0 92.6 93.2 92.0 95.9 97.6 100.0 103.2 106.0 110.1 111.2 35 Farm .67 69.5 70.2 71.3 70.4 70.8 70.8 71.0 70.9 73.5 73.5 73.6 75.7 36 Defense and space 7.51 119.9 118.2 117.6 118.0 120.4 120.2 121.8 122.9 124.0 125.7 128.3 129.5 Intermediate products 37 Construction supplies 6.42 142.5 136.4 138.4 142.1 145.8 149.0 151.1 152.3 151.6 151.5 155.5 157.1 38 Business supplies 6.47 170.7 165.2 166.0 166.8 170.4 175.3 179.3 180.6 179.4 179.3 180.1 181.0 39 Commercial energy products 1.14 184.3 183.3 183.1 181.4 185.2 186.9 190.2 187.0 187.6 188.0 192.1 191.6 Materials 40 Durable goods materials 20.35 138.6 132.4 134.7 137.0 141.1 144.2 147.2 149.4 150.3 151.3 154.6 158.5 41 Durable consumer parts 4.58 113.6 106.5 108.5 109.5 115.6 119.9 123.1 124.9 125.0 127.9 131.6 133.1 42 Equipment parts 5.44 176.4 167.2 170.6 175.8 180.8 183.6 186.0 188.3 192.5 193.4 198.2 204.0 43 Durable materials n.e.c 10.34 129.9 125.4 127.5 128.7 131.5 134.2 137.4 139.8 139.3 139.5 141.8 145.8 44 Basic metal materials 5.57 90.2 87.8 89.3 89.6 90.8 93.1 94.5 98.0 97.1 96.9 97.7 102.7 45 Nondurable goods materials 10.47 174.5 168.7 172.1 174.3 177.0 178.0 183.4 185.3 184.8 180.3 181.2 184.6 46 Textile, paper, and chemical materials 7.62 182.6 175.9 180.2 182.8 186.1 186.4 192.0 195.4 194.7 189.6 190.5 194.6 47 Textile materials 1.85 116.2 110.6 114.6 116.0 119.0 121.5 123.1 124.0 121.9 121.3 119.9 119.9 48 Paper materials 1.62 158.2 150.8 154.4 155.0 161.1 161.8 165.4 166.3 169.8 166.0 167.0 166.9 49 Chemical materials 4.15 221.7 214.9 219.6 223.6 225.9 225.1 233.1 238.7 237.0 229.3 231.3 238.9 50 Containers, nondurable 1.70 167.9 163.2 164.3 166.1 166.5 170.6 179.1 175.9 176.6 173.0 173.5 173.0 51 Nondurable materials n.e.c 1.14 130.5 129.1 129.7 129.9 131.3 133.0 132.6 131.9 130.6 129.5 130.5 135.1 52 Energy materials 8.48 124.8 121.6 121.1 121.8 127.7 128.0 126.4 126.3 127.1 130.0 131.3 131.2 53 Primary energy 4.65 114.7 113.9 113.8 112.6 115.4 113.9 112.8 114.1 115.5 117.6 119.3 121.8 54 Converted fuel materials 3.82 137.0 131.0 129.9 132.9 142.7 145.2 142.8 141.2 141.1 145.1 145.8 142.7 Supplementary groups 55 Home goods and clothing 9.35 129.9 126.3 129.2 130.2 132.3 133.3 135.2 135.5 135.9 137.6 140.1 140.5 56 Energy, total 12.23 135.9 133.9 133.8 133.6 138.5 139.4 139.0 137.7 138.5 141.1 141.6 141.5 57 Products 3.76 161.0 161.7 162.4 160.4 162.9 165.2 167.5 163.3 164.3 166.0 165.1 164.9 58 Materials 8.48 124.8 121.6 121.1 121.8 127.7 128.0 126.4 126.3 127.1 130.0 131.3 131.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A45 2.13 Continued 1967 1983 1984 SIC pro- 1983 Grouping code por- avg. tion Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan/ Feb. Mar.P Apr/ Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities 12.05 142.9 138.9 139.7 139.6 143.8 146.0 146.5 145.8 147.2 151.5 151.4 149.1 149.4 149.5 2 Mining 6.36 116.6 111.6 112.8 112.6 115.0 116.1 117.1 118.3 121.1 123.7 124.8 124.5 123.5 123.3 3 Utilities 5.69 172.4 169.3 169.7 169.8 176.0 179.3 179.3 176.5 176.3 182.5 181.0 176.6 178.3 178.7 4 Electric 3.88 196.0 192.7 192.9 192.0 200.9 205.4 204.5 200.7 200.2 208.0 206.8 200.1 202.2 202.8 5 Manufacturing 87.95 148.2 143.1 145.1 147.4 150.6 152.8 155.1 156.2 156.4 156.8 159.5 161.6 162.4 164.9 6 Nondurable 35.97 168.1 163.3 165.4 167.8 170.6 172.9 174.6 175.6 174.8 173.9 175.2 177.4 177.8 179.9 7 Durable 51.98 134.5 129.1 131.0 133.2 136.8 138.8 141.6 142.8 143.6 145.0 148.6 150.6 151.7 154.4 Mining 8 Metal 10 .51 80.9 79.8 84.4 82.9 82.5 80.9 78.7 81.0 84.6 82.3 89.4 97.4 100.6 9 Coal 11.12 .69 136.3 125.3 125.6 124.6 139.9 141.2 140.5 142.7 144.8 145.2 151.5 163.2 164.0 159.0 10 Oil and gas extraction 13 4.40 116.6 112.2 112.5 112.6 113.9 114.7 116.3 117.3 119.8 123.4 123.1 120.1 117.6 117.9 11 Stone and earth minerals 14 .75 122.8 117.7 122.5 121.7 121.2 125.0 126.5 127.4 132.2 133.9 134.8 133.2 136.3 Nondurable manufactures 12 Foods 20 8.75 156.4 153.7 155.6 157.7 159.9 159.3 158.2 157.6 157.1 157.7 159.4 160.0 13 Tobacco products 21 .67 112.1 114.8 112.9 120.0 112.9 117.1 112.7 109.1 109.5 112.3 116.4 110.9 14 Textile mill products 22 2.68 140.8 136.6 139.6 141.8 146.7 147.4 148.7 148.7 145.8 145.0 143.9 142.3 142.9 15 Apparel products 23 3.31 16 Paper and products 26 3.21 164.3 157.0 161.5 163.0 165.1 168.6 170.4 171.5 172.1 170.1 172.3 176.2 174.9 176.0 17 Printing and publishing 27 4.72 152.5 145.7 145.2 147.4 152.0 157.8 161.7 162.7 162.0 161.7 163.4 164.8 165.1 167.0 18 Chemicals and products 28 7.74 215.0 208.5 211.0 214.7 218.3 220.3 224.1 228.4 225.6 221.1 221.5 226.1 227.0 19 Petroleum products 29 1.79 120.3 120.6 123.8 123.0 124.3 123.2 125.1 123.6 125.4 114.4 118.8 127.6 127.8 130.9 20 Rubber and plastic products 30 2.24 291.9 283.0 288.0 293.8 296.1 306.9 310.9 310.8 309.1 314.4 317.2 318.5 323.4 21 Leather and products 31 .86 61.9 58.7 59.6 60.1 62.3 64.4 64.2 64.0 63.2 66.0 61.4 63.9 63.9 Durable manufactures 22 Ordnance, private and government 19.91 3.64 95.4 93.2 92.6 93.3 95.2 96.8 98.0 98.8 99.3 99.8 99.7 99.6 100.4 102.0 23 Lumber and products 24 1.64 137.2 132.1 135.8 137.4 141.3 141.6 142.3 141.7 141.0 143.8 146.0 146.0 147.7 24 Furniture and fixtures 25 1.37 170.5 167.7 169.6 173.1 175.2 179.0 180.7 181.0 177.5 177.9 183.8 185.6 186.0 25 Clay, glass, stone products 32 2.74 143.4 138.3 139.2 141.7 145.8 147.9 151.7 151.9 152.7 153.8 157.8 160.4 160.7 26 Primary metals 33 6.57 85.4 83.1 84.9 84.8 85.5 87.5 90.6 95.3 92.2 90.4 93.2 98.4 97.7 99.8 27 Iron and steel 331.2 4.21 71.5 68.5 69.5 69.7 71.8 75.1 78.2 84.3 79.2 74.1 80.7 86.0 84.5 28 Fabricated metal products 34 5.93 120.2 115.3 115.5 118.5 122.7 126.0 127.4 26.9 128.5 129.2 131.7 132.6 134.9 137.5 29 Nonelectrical machinery 35 9.15 150.6 143.1 146.1 149.5 154.2 157.3 158.3 159.2 161.8 164.3 169.5 171.5 173.1 176.9 30 Electrical machinery 36 8.05 185.5 177.2 180.1 182.4 188.3 189.2 195.8 198.4 200.1 201.5 206.2 209.9 211.8 217.8 31 Transportation equipment 37 9.27 117.8 111.4 113.8 116.6 119.7 121.1 124.7 125.5 127.3 130.8 134.9 135.6 136.0 135.4 32 Motor vehicles and parts 371 4.50 137.1 125.5 130.4 136.2 142.3 144.3 150.9 150.9 152.9 158.9 166.3 165.1 166.1 163.0 33 Aerospace and miscellaneous transportation equipment... 372-9 4.77 99.6 98.1 98.1 98.1 98.5 99.2 100.0 101.6 103.2 104.3 105.3 107.7 107.7 109.5 34 Instruments 38 2.11 158.7 155.1 156.0 156.1 159.3 161.6 163.6 163.0 163.0 164.6 167.8 168.6 170.2 173.5 35 Miscellaneous manufactures 39 1.51 146.2 145.0 149.0 151.0 153.7 153.1 151.7 149.1 148.9 149.3 151.1 152.0 152.9 155.9 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 612.6 592.6 601.8 610.5 620.5 626.6 637.0 637.8 638.4 645.4 655.1 655.5 659.7 667.1 37 Final 390.9 472.6 457.7 465.6 471.8 478.2 481.8 489.9 490.7 490.8 497.8 505.3 503.5 508.1 512.8 38 Consumer goods . 277.5 328.7 318.8 325.6 330.4 333.7 336.7 341.6 340.2 338.3 341.9 345.3 343.6 346.7 348.9 39 Equipment 113.4 144.0 138.9 140.0 141.4 144.5 145.1 148.4 150.5 152.5 155.9 160.0 159.9 161.4 163.9 40 Intermediate 116.6 140.0 134.9 136.2 138.7 142.3 144.8 147.1 147.1 147.6 147.6 149.8 152.0 151.6 154.3 1. 1972 dollar value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • May 1984 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1983 1984 IItteemm 11998811 11998822 11998833 June July Aug. Sept. Oct. Nov. Dec. Jan/ Feb/ Mar. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 986 1,001 1,590 1,761 1,782 1,652 1,506 1,630 1,642 1,549 1,817 1,946 1,714 2 1-family 564 546 891 1,013 920 874 837 880 911 898 1,001 1,107 969 3 2-or-more-family 421 454 699 748 862 778 669 750 731 651 816 839 745 4 Started 1,084 1,062 1,703 1,743 1,793 1,873 1,679 1,672 1,730 1,694 1,980 2,231 1,638 5 1-family 705 663 1,068 1,124 1,048 1,124 1,038 1,017 1,074 1,021 1,301 1,447 1,026 6 2-or-more-family 379 400 636 619 745 749 641 655 656 673 679 784 612 7 Under construction, end of period1 682 720 1,006 933 963 977 988 987 1,011 1,020' 1,037 1,044 8 1-family ;... 382 400 525 532 537 542 542 536 543 542' 554 562 9 2-or-more-family 301 320 482 400 425 435 446 450 468 478' 483 481 10 Completed 1,266 1,006 1,390 1,386 1,432 1,729 1,476 1,567 1,445 1,489' 1,589 1,551 n a. 11 1-family 818 631 924 959 1,000 1,050 966 1,028 994 986' 1,001 1,023 12 2-or-more-family 447 374 466 427 432 679 510 539 451 503' 588 528 13 Mobile homes shipped 241 239 295 299 296 307 305 308 313 310 314 293 Merchant builder activity in 1-family units 14 Number sold 436 413 622 655 606 558 597 624 636 755' 677 700 666 15 Number for sale, end of period1 278 255 303 283 289 296 299 301 304 300' 303 305 321 Price (thousands of dollars)2 Median 16 Units sold 68.8 69.3 75.5 75.8 75.2 76.8 81.0 75.9 75.9 75.9' 76.5 78.7 78.7 17 Units sold 83.1 83.8 89.9 90.9 89.2 91.3 97.8 89.5 91.4 91.7' 92.2 93.4 96.6 EXISTING UNITS (1-family) 18 Number sold 2,418 1,991 2,719 2,820 2,780 2,760 2,770 2,720 2,700 2,850 2,890 2,910 3,030 Price of units sold (thousands of dollars)2 19 Median 66.1 67.7 69.8 71.4 71.8 71.5 69.9 69.8 70.4 69.9 71.3 71.8 72.4 20 Average 78.0 80.4 82.5 84.7 84.2 84.7 82.8 83.0 83.4 82.9 84.8 84.9 85.3 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 239,418 232,048 262,668 264,321 274,205 281,997 285,384 265,626 265,780 265,319 275,676 292,004 295,550 7.7 Private 186,069 180,979 212,287 214,729 222,759 228,529 232,561 216,976 214,920 215,497 224,963 239,202 243,509 73 Residential 86,567 74,809 110,708 113,524 122,297 127,136 129,142 116,478 110,385 107,973 116,899 128,286 131,924 24 Nonresidential, total 99,502 106,170 101,579 101,205 100,462 101,393 103,419 100.498 104,535 107,524 108,064 110,916 111,585 Buildings 75 Industrial 17,031 17,346 13,143 13,136 12,227 14,227 13,166 10,532 12,280 12,921 13,091 13,921 13,718 76 Commercial 34,243 37,281 36,267 35.898 35,871 36,277 36,901 36,118 38,081 38,955 40,874 42,735 43,807 7.7 Other 9,543 10,507 11,705 10,974 11,250 12,038 12,564 12,279 12,001 12,121 13,062 13,077 12,988 28 Public utilities and other 38,685 41,036 40,464 41,197 41.114 38,851 40,788 41,569 42,173 43,527 41,037 41,183 41,072 79 Public 53,346 51,068 50,380 49,592 51,446 53,469 52,823 48,649 50,860 49,821 50,713 52,802 52,041 30 Military 1,966 2,205 2,536 1,894 2,655 2,258 2,705 2,458 3,192 2,977 2,821 2,716 3,227 31 Highway 13,599 13,521 14,178 12,925 14,091 15,906 15,896 14,644 14,360 14,780 13,738 14,928 15,894 32 Conservation and development 5,300 5,029 4,823 4,853 5,608 5,210 5,048 4,253 3,902 4,896 4,259 4,639 4,479 33 Other 32,481 30.313 28,843 29,920 29,092 30,095 29,174 27,294 29,406 27,168 29,895 30,519 28,441 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 A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted C m h o a n ng th e s f e ro a m rli e 1 r 2 Change ( a f t r o a m nn 3 u a m l o ra n t t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm MMMaaarrr... 1983 1984 1983 1984 111999888444 11998833 11998844 (((111999666777 MMaarr.. MMaarr.. === 111000000)))''' June Sept. Dec. Mar. Nov. Dec. Jan. Feb. Mar. CONSUMER PRICES2 1 All items 3.6 4.7 5.4 4.5 4.0 5.0 .4 .2 .6 .4 .2 307.3 7 Food 2.7 4.0 1.7 1.1 4.3 9.0 .2 .4 1.6 .7 -.1 302.2 3 Energy items -1.5 4.6 19.1 3.4 -1.7 -1.4 ..11 -.3 -.4 .2 -.2 418.1 4 All items less food and energy 4.7 5.0 4.2 5.9 4.9 5.1 ..55 .3 .5 .3 .4 296.7 Commodities 6.1 4.5 3.2 6.8 4.6 3.4 .4 .3 .2 .2 .4 249.9 6 Services 3.6 5.3 4.8 5.2 5.3 5.9 .5 .3 .7 .4 .4 350.7 PRODUCER PRICES 7 Finished goods 2.2 2.9 2.6 2.0 1.0 6.1 -.1 .1 .6 .4 .5 291.7 8 Consumer foods 1.6 6.1 -.9 2.5 5.5' 17.8 -.y 2.7 .7 ..88 277.0 9 Consumer energy -4.9 -1.8 12.9 -1.3 -9.5 -8.0 -1.2' — .8' -1.2 .4 --11..22 759.8 10 Other consumer goods 3.8 2.8 2.2 2.7 1.2 5.0 ,4r .(K .2 .2 .9 244.8 11 Capital equipment 3.6 2.5 1.7 2.1 2.1 4.1 .V .y .1 .5 .3 292.7 1? Intermediate materials3 -.4 3.0 2.8 4.0 2.7 2.5 .V .2 .0 .2 .5 324.2 13 Excluding energy .7 3.5 2.8 3.6 3.3 4.3 .y .2' .2 .2 .6 302.5 Crude materials 14 .5 8.7 -5.8 15.6 12.4 13.4 ,5r 1.6 ' 2.2 -3.1 44..22 270.7 IS Energy 1.6 -2.6 -5.1 -1.7 -2.1 -1.5 .2' ,3r .4 .0 -.8 780.7 16 Other -1.7 12.4 49.1 16.6 3.4 -10.1 .0 .6 -3.6 .8 .2 274.6 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

A48 Domestic Nonfinancial Statistics • May 1984 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1983 1984 AAccccoouunntt 11998811 11998822 11998833 QL Q2 Q3 Q4 QL GROSS NATIONAL PRODUCT 1 Total 2,954.1 3,073.0 3,310.5 3,171.5 3,272.0 3,362.2 3,436.2 3,541.2 By source 2 Personal consumption expenditures 1,857.2 1,991.9 2,158.0 2,073.0 2,147.0 2,181.1 2,230.9 2,280.5 3 Durable goods 236.1 244.5 279.4 258.5 277.7 282.8 298.6 310.3 4 Nondurable goods 733.9 761.0 804.1 777.1 799.6 814.8 825.0 844.4 5 Services 887.1 986.4 1,074.5 1,037.4 1,069.7 1,083.5 1,107.3 1,125.8 6 Gross private domestic investment 474.9 414.5 471.9 404.1 450.1 501.1 532.5 595.3 7 Fixed investment 456.5 439.1 478.4 443.5 464.6 492.5 512.8 533.1 8 Nonresidential 352.2 348.3 348.4 332.1 336.3 351.0 374.0 384.2 9 Structures 133.4 141.9 131.1 132.9 127.4 130.9 133.3 140.3 10 Producers' durable equipment 218.8 206.4 217.2 199.3 208.8 220.2 240.7 243.9 11 Residential structures 104.3 90.8 130.0 111.3 128.4 141.5 138.8 148.9 12 Nonfarm 99.8 86.0 124.9 106.7 123.3 136.3 133.5 143.7 13 Change in business inventories 18.4 -24.5 -6.4 -39.4 -14.5 8.5 19.6 62.2 14 Nonfarm 10.9 -23.1 -2.8 -39.0 -10.3 18.4 19.7 41.1 15 Net exports of goods and services 26.3 17.4 -9.0 17.0 -8.5 -18.3 -26.1 -45.2 16 Exports 368.8 347.6 335.4 326.9 327.1 341.1 346.5 357.7 17 Imports 342.5 330.2 344.4 309.9 335.6 359.4 372.6 402.9 18 Government purchases of goods and services 595.7 649.2 689.5 677.4 683.4 698.3 699.0 710.6 19 Federal 229.2 258.7 274.8 273.5 273.7 278.1 274.1 275.0 20 State and local 366.5 390.5 414.7 404.0 409.7 420.2 424.9 435.6 By major type of product 21 Final sales, total 2,935.6 3,097.5 3,316.9 3,210.9 3,286.6 3,353.7 3,416.6 3,479.0 22 Goods 1,291.8 1,280.8 1,366.5 1,292.2 1,346.8 1,388.9 1,438.2 1,492.4 23 Durable 528.0 500.8 548.7 482.7 536.8 568.9 606.4 607.4 24 Nondurable 763.9 780.1 817.8 809.5 810.0 820.0 831.8 885.0 25 Services 1,374.2 1,511.2 1,635.6 1,588.4 1,623.4 1,651.0 1,679.6 1,711.3 26 Structures 288.0 281.0 308.4 290.9 301.9 322.3 318.5 337.5 27 Change in business inventories 18.4 -24.5 -6.4 -39.4 -14.5 8.5 19.6 62.2 28 Durable goods 3.6 -15.5 -3.9 -38.2 -8.9 13.1 18.3 16.0 29 Nondurable goods 14.8 -9.1 -2.5 -1.2 -5.7 -4.5 1.4 46.1 30 MEMO: Total GNP in 1972 dollars 1,513.8 1,485.4 1,535.3 1,490.1 1,525.1 1,553.4 1,572.5 1,604.3 NATIONAL INCOME 31 Total 2,373.0 2,450.4 2,650.2' 2,528.5 2,612.8 2,686.9 2,772.4' n.a. 32 Compensation of employees 1,769.2 1,865.7 1,990.2 1,923.7 1,968.7 2,011.8 2,056.6 2,113.0 33 Wages and salaries 1,493.2 1,568.1 1,664.1 1,610.6 1,647.1 1,681.5 1,717.3 1,756.2 34 Government and government enterprises 284.4 306.0 326.2 319.2 323.3 328.4 332.1 339.2 35 Other 1,208.8 1,262.1 1,338.4 1,291.5 1,323.8 1,353.1 1,385.2 1,416.9 36 Supplement to wages and salaries 276.0 297.6 326.1 313.1 321.6 330.3 339.4 356.8 37 Employer contributions for social insurance 132.5 140.9 152.7 148.8 151.5 153.9 156.7 167.9 38 Other labor income 143.5 156.6 173.4 164.3 170.1 176.4 182.7 189.0 4 3 0 9 Pro B p u r s i i e n t e o s r s s ' a i n n d c o p m ro e f 1 e ssional1 1 8 2 9 0 . . 7 2 1 8 0 7 9 . . 4 0 1 12 0 8 7 . . 5 6 1 9 2 8 0 . . 4 6 1 1 2 0 7 6 . . 2 2 1 1 2 1 6 1 . . 7 2 1 11 3 4 9 . . 5 4 1 12 6 1 9 . . 7 0 41 Farm1 30.5 21.5 20.9 22.2 21.0 15.5 25.0 47.3 42 Rental income of persons2 41.4 49.9 54.8 54.1 54.8 53.9 56.2 57.0 43 Corporate profits1 192.3 164.8 229.1 181.8 218.2 248.4 268.2' n.a. 44 Profits before tax3 227.0 174.2 207.5 169.7 203.3 229.1 228.2' n.a. 45 Inventory valuation adjustment -23.6 -8.4 -9.2 -1.7 -10.6 -18.3 -6.3 -10.0 46 Capital consumption adjustment -11.0 -1.1 30.8 13.9 25.6 37.6 46.2 50.3 47 Net interest 249.9 261.1 247.5 248.3 243.8 246.1 251.9 262.0 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

National Income Accounts A49 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1983 1984 11998811 11998822 11998833 QL Q2 Q3 Q4 Ql PERSONAL INCOME AND SAVING 1 Total personal income 2,435.0 2,578.6 2,742.1 2,657.7 2,713.6 2,761.9 2,835.2 2,924.6 2 Wage and salary disbursements 1,493.2 1,568.1 1,664.6 1,610.7 1,648.4 1,681.9 1,717.3 1,756.2 3 Commodity-producing industries 509.5 509.2 529.7 508.6 522.2 537.8 550.0 567.1 4 Manufacturing 385.3 383.8 402.8 385.4 397.4 409.2 419.0 432.8 5 Distributive industries 361.6 378.8 397.2 386.4 394.3 398.9 409.3 415.4 6 Service industries 337.7 374.1 411.5 396.4 407.3 416.4 425.8 434.4 7 Government and government enterprises 284.4 306.0 326.2 319.2 324.6 328.8 332.1 339.2 8 Other labor income 143.5 156.6 173.4 164.3 170.1 176.4 182.7 189.0 9 Proprietors' income1 120.2 109.0 128.5 120.6 127.2 126.7 139.4 169.0 10 Business and professional1 89.7 87.4 107.6 98.4 106.2 111.2 114.5 121.7 11 Farm1 30.5 21.5 20.9 22.2 21.0 15.5 25.0 47.3 12 Rental income of persons2 41.4 49.9 54.8 54.1 54.8 53.9 56.2 57.0 13 Dividends 62.8 66.4 70.5 68.8 69.3 70.9 72.9 75.1 14 Personal interest income 341.3 366.2 366.3 357.2 357.1 369.9 381.1 395.8 15 Transfer payments 337.2 374.6 403.6 398.5 405.3 402.6 408.1 411.3 16 Old-age survivors, disability, and health insurance benefits. 182.0 204.5 222.8 217.4 221.1 223.8 228.8 233.1 17 LESS: Personal contributions for social insurance 104.6 112.0 119.5 116.5 118.6 120.5 122.5 128.7 18 EQUALS: Personal income 2,435.0 2,578.6 2,742.1 2,657.7 2,713.6 2,761.9 2,835.2 2,924.6 19 LESS: Personal tax and nontax payments 387.4 402.1 406.5 401.8 412.6 400.1 411.4 421.3 20 EQUALS: Disposable personal income 2,047.6 2,176.5 2,335.6 2,255.9 2,301.0 2,361.7 2,423.9 2,503.3 21 LESS: Personal outlays 1,912.4 2,051.1 2,222.0 2,134.2 2,209.5 2,245.9 2,298.3 2,350.0 22 EQUALS: Personal saving 135.3 125.4 113.6 121.7 91.5 115.8 125.6 153.3 MEMO Per capita (1972 dollars) 23 Gross national product 6,584.1 6,399.3 6,552.8 6,381.5 6.518.0 6,622.5 6,687.5 6,809.2 24 Personal consumption expenditures 4,161.5 4,179.8 4,316.7 4,225.7 4.319.1 4,331.4 4,389.8 4,443.0 25 Disposable personal income 4,587.0 4,567.0 4,672.0 4,599.0 4,629.0 4,690.0 4,769.0 4,877.0 26 Saving rate (percent) 6.6 5.8 4.9 5.4 4.0 4.9 5.2 6.1 GROSS SAVING 27 Gross saving 483.8 405.8 439.6 398.5 420.6 455.4 484.0' n.a. 28 Gross private saving 509.6 521.6 569.9'' 541.5 535.0 587.2 615.7 n.a. 29 Personal saving 135.3 125.4 113.6 121.7 91.5 115.8 125.6 153.3 30 Undistributed corporate profits1 44.8 37.0 78.9 48.9 70.1 89.7 107.0' n.a. 31 Corporate inventory valuation adjustment -23.6 -8.4 -9.2 -1.7 -10.6 -18.3 -6.3 -10.0 Capital consumption allowances 32 Corporate 202.9 222.0 231.6 228.3 229.8 233.1 235.2 238.0 33 Noncorporate 126.6 137.2 145.7 142.6 143.5 148.6 148.0 150.3 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -26.9 -115.8 -130.2 -142.9 -114.4 -131.8 -131.8 n.a. 36 Federal -62.2 -147.1 -181.6 -183.3 -166.1 -187.3 -189.9 n.a. 37 State and local 35.3 31.3 51.4 40.4 51.7 55.5 58.1 n.a. 38 Capital grants received by the United States, net 1.1 .0 .0 .0 .0 .0 .0 .0 39 Gross investment 478.9 406.2 437.4 397.4 417.1 457.9 477.1 525.7 40 Gross private domestic 474.9 414.5 471.9 404.1 450.1 501.1 532.5 595.3 41 Net foreign 4.0 -8.3 -34.6 -6.7 -33.0 -43.2 -55.3 -69.6 42 Statistical discrepancy -4.9 .5 -2.V -1.2 -3.5 2.5 -6.7 -6.7 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

A50 International Statistics • May 1984 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 11998811 11998822 11998833PP Q4 Qi Q2 Q3 Q4p 1 Balance on current account 4,592 -11,211 -40,776 --66,,662211 --33,,666655 --99,,774477 --1122,,007744 --1155,,229911 --55,,554466 --33,,339955 --88,,889988 --1144,,110011 --1144,,338822 3 Merchandise trade balance2 -28,067 -36,389 -60,550 --1111,,335544 --88,,885566 --1144,,770055 --1188,,117788 --1188,,881111 4 Merchandise exports 237,019 211,217 200,203 4488,,334444 4499,,335500 4488,,775577 5500,,442299 5511,,666677 5 Merchandise imports -265,086 -247,606 -260,753 --5599,,669988 --5588,,220066 --6633,,446622 --6688,,660077 --7700,,447788 6 Military transactions, net -1,355 179 483 --2266 551166 111177 --113322 --1177 7 Investment income, net3 33,484 27,304 23,581 66,,000088 55,,003366 55,,663300 66,,888811 66,,003322 8 Other service transactions, net 7,462 5,729 4,309 11,,118822 11,,220000 11,,003344 11,,447700 660044 9 Remittances, pensions, and other transfers -2,382 -2,621 -2,631 -661 -608 -636 -662 -724 10 U.S. government grants (excluding military) -4,549 -5,413 -5,967 -1,770 -953 -1.187 -1,453 -2,375 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,078 -5,732 -4,897 -934 -1,053 -1,162 -1,206 -1,476 12 Change in U.S. official reserve assets (increase, -) -5,175 -4,965 -1,196 -1,949 -787 16 529 -953 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,823 -1,371 -66 -297 -98 -303 -209 545 15 Reserve position in International Monetary Fund -2,491 -2,552 -4,434 -732 -2,139 -212 -88 -1,996 16 Foreign currencies -861 -1,041 3,304 -920 1,450 531 826 498 17 Change in U.S. private assets abroad (increase, -)3 -100,348 -107,348 -43,204 -16,670 -19,793 570 -8,449 -15,532 18 Bank-reported claims -83,851 -109,346 -24,966 -17,511 -15,935 5,166 -2,025 -12,172 19 Nonbank-reported claims -1,181 6,976 -3,146 2,337 -2,374 -440 -332 n.a. 20 U.S. purchase of foreign securities, net -5,636 -7,986 -7,484 -3,527 -1,808 -3,222 -1,543 -912 21 U.S. direct investments abroad, net3 -9,680 3,008 -7,608 2,031 324 -934 -4,549 -2,448 22 Change in foreign official assets in the United States (increase, +) 5,430 3,172 6,083 1,661 49 1,973 -2,581 6,642 23 U.S. Treasury securities 4,983 5,759 7,140 4,346 3,008 1,955 -538 2,715 24 Other U.S. government obligations 1,289 -670 -464 -556 -371 -170 -363 440 25 Other U.S. government liabilities4 -28 504 318 130 -270 403 207 -22 26 Other U.S. liabilities reported by U.S. banks -3,479 -2,054 877 -1,717 -1,939 611 -1,425 3,630 27 Other foreign official assets5 2,665 -367 -1,788 -542 -379 -826 -462 -121 28 Change in foreign private assets in the United States (increase, +)3 75,248 84,693 76,935 9,856 16,404 8,984 22,028 29,521 29 U.S. bank-reported liabilities 42,154 64,263 51,295 2,823 10,588 919 15,068 24,720 30 U.S. nonbank-reported liabilities 942 -3,104 -1,060 20 -2,136 134 942 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,982 7,004 8,599 2,257 2,912 3,072 1,011 1,604 32 Foreign purchases of other U.S. securities, net 7,171 6,141 8,587 1,975 2,986 2,628 1,842 1,132 33 Foreign direct investments in the United States, net3 21,998 10,390 9,514 2,781 2,054 2,231 3,165 2,065 34 Allocation of SDRs 1,093 0 0 00 0 0 00 0 35 Discrepancy 24,238 41,390 7,054 1144,,665577 8,845 -634 11,,775533 -2,911 11,,004422 -200 802 --11,,336611 758 37 Statistical discrepancy in recorded data before seasonal adjustment 24,238 41,390 7,054 1133,,661155 9,045 -1,436 33,,111144 -3,669 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -5,175 -4,965 -1,196 -1,949 -787 16 529 -953 39 Foreign official assets in the United States (increase, +) 5,458 2,668 5,765 1,531 319 1,570 -2,788 6,664 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 13,581 7,420 -8,591 -1,162 -1,397 -3,433 -2,104 -1,657 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 680 644 209 158 42 30 49 88 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 A51 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1983 1984 IItteemm 11998811 11998822 11998833 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 233,677 212,193 200,486 17,257 17,033 17,063 17,298 18,326 17,212 17,727 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 261,305 243,952 258,048 22,451 24,333 23,115 22,976 26,586 26,147 26,771 3 Trade balance -27,628 -31,759 -57,562 -5,195 -7,300 -6,052 -5,678 -8,260 -8,935 -9,044 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 1984 TTyyppee 11998800 11998811 11998822 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Total 26,756 30,075 33,958 33,273 33,655 33,747 33,887 34,823 34,978 34,588 2 Gold stock, including Exchange Stabilization Fund1 11,160 11,151 11,148 11,126 11,123 11,121 11,120 11,116 11,111 11,107 3 Special drawing rights2 3 2,610 4,095 5,250 5,641 5,735 5,025 5,050 5,320 5,341 5,266 4 Reserve position in International Monetary Fund2 2,852 5,055 7,348 9,554 9,883 11,312 11,422 11,710 11,709 11,621 5 Foreign currencies4-5 10,134 9,774 10,212 6,952 6,914 6,289 6,295 6,677 6,817 6,594 1. Gold held under earmark at Federal Reserve Banks for foreign and interna- 3. Includes allocations by the International Monetary Fund of SDRs as follows: tional accounts is not included in the gold stock of the United States; see table $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1, 3.13. Gold stock is valued at $42.22 per fine troy ounce. 1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based million on Jan. 1, 1981; plus transactions in SDRs. on a weighted average of exchange rates for the currencies of member countries. 4. Valued at current market exchange rates. From July 1974 through December 1980, 16 currencies were used; from January 5. Includes U.S. government securities held under repurchase agreement 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position in against receipt of foreign currencies in 1979 and 1980. the IMF also are valued on this basis beginning July 1974. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1983 1984 AAsssseettss 11998800 11998811 11998822 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Deposits 411 505 328 339 360 190 251 246 222 345 Assets held in custody 2 U.S. Treasury securities1 102,417 104,680 112,544 116,327 116,398 117,670 117,076 119,499 116,768 117,808 3 Earmarked gold2 14,965 14,804 14,716 14,550 14,475 14,414 14,347 14,291 14,278 14,278 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

A52 International Statistics • May 1984 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1983 1984 Aug. Sept. Oct. Nov. Dec/ Jan. Feb.'' All foreign countries 1 Total, all currencies 401,135 462,847 469,432 452,596 460,261 458,894 463,467 475,593 453,982 462,397 2 Claims on United States 28,460 63,743 91,768 99,484 101,356 102,497 109,511 114,956 110,969 112,765 3 Parent bank 20,202 43,267 61,629 67,137 65,561 69,655 75,521 81,004 76,430 79,244 4 Other 8,258 20,476 30,139 32,347 35,795 32,842 33,990 33,952 34,539 33,521 5 Claims on foreigners 354,960 378,954 358,258 335,036 340,413 337,848 335,518 342,018 324,094 329,756 6 Other branches of parent bank 77,019 87,821 91,143 84,572 89,304 87,543 89,447 92,634 86,866 85,728 7 Banks 146,448 150,763 133,640 119,288 120,177 117,631 114,495 117,576 106,877 110,265 8 Public borrowers 28,033 28,197 24,090 25,147 24,982 25,061 24,256 24,360 23,951 24,342 9 Nonbank foreigners 103,460 112,173 109,385 106,029 105,950 107,613 107,320 107,448 106,400 109,421 10 Other assets 17,715 20,150 19,406 18,076 18,492 18,549 18,438 18,619 18,919 19,876 11 Total payable in U.S. dollars 291,798 350,735 361,712 348,330 354,595 351,483 358,204 370,515 348,454 349,833 12 Claims on United States 27,191 62,142 90,048 96,995 98,510 99,938 107,015 112,850 108,866 110,520 13 Parent bank 19,896 42,721 60,973 65,711 63,716 68,126 73,999 79,914 75,283 78,015 14 Other 7,295 19,421 29,075 31,284 34,794 31,812 33,016 32,936 33,583 32,505 15 Claims on foreigners 255,391 276,937 259,646 241,063 245,541 241,221 240,768 247,080 229,041 228,852 16 Other branches of parent bank 58,541 69,398 73,512 66,609 71,273 69,324 71,451 75,131 69,006 66,772 17 Banks 117,342 122,110 106,338 93,806 95,113 92,048 90,143 93,248 82,553 84,398 18 Public borrowers 23,491 22,877 18,374 18,804 18,455 18,644 17,752 17,817 17,670 17,784 19 Nonbank foreigners 56,017 62,552 61,422 61,844 60,700 61,205 61,422 60,884 59,812 59,898 20 Other assets 9,216 11,656 12,018 10,272 10,544 10,324 10,421 10,585 10,547 10,461 United Kingdom 21 Total, all currencies 144,717 157,229 161,067 154,865 156,048 156,803 155,964 158,717 155,098 157,973 22 Claims on United States 7,509 11,823 27,354 29,722 28,947 30,853 32,352 34,433 35,634 36,647 23 Parent bank 5,275 7,885 23,017 22,169 20,816 25,507 26,872 29,111 29,759 30,876 24 Other 2,234 3,938 4,337 7,553 8,131 5,346 5,480 5,322 5,875 5,771 25 Claims on foreigners 131,142 138,888 127,734 119,672 121,518 120,660 118,275 119,280 114,287 116,055 26 Other branches of parent bank 34,760 41,367 37,000 35,555 36,382 36,556 35,642 36,565 34,842 33,296 27 Banks 58,741 56,315 50,767 44,303 45,451 43,888 42,683 43,352 40,126 42,508 28 Public borrowers 6,688 7,490 6,240 6,342 6,274 6,280 6,307 5,898 6,056 6,005 29 Nonbank foreigners 30,953 33,716 33,727 33,472 33,411 33,936 33,643 33,465 33,263 34,246 30 Other assets 6,066 6,518 5,979 5,471 5,583 5,290 5,337 5,004 5,177 5,271 31 Total payable in U.S. dollars 99,699 115,188 123,740 119,377 121,238 121,817 121,744 125,997 121,197 121,945 32 Claims on United States 7,116 11,246 26,761 28,905 27,837 30,095 31,671 33,756 34,917 35,935 33 Parent bank 5,229 7,721 22,756 21,720 20,036 25,084 26,537 28,756 29,414 30,516 34 Other 1,887 3,525 4,005 7,185 7,801 5,011 5,134 5,000 5,503 5,419 35 Claims on foreigners 89,723 99,850 92,228 86,868 89,530 88,253 86,614 88,917 83,161 83,067 36 Other branches of parent bank 28,268 35,439 31,648 30,053 31,409 31,414 30,371 31,838 29,741 28,103 37 Banks 42,073 40,703 36,717 31,718 33,237 31,796 31,158 32,188 28,756 30,331 38 Public borrowers 4,911 5,595 4,329 4,410 4,329 4,346 4,377 4,194 4,349 4,241 39 Nonbank foreigners 14,471 18,113 19,534 20,687 20,555 20,697 20,708 20,697 20,315 20,392 40 Other assets 2,860 4,092 4,751 3,604 3,871 3,469 3,459 3,324 3,119 2,943 Bahamas and Caymans 41 Total, all currencies 123,837 149,108 145,156 139,699 143,148 141,311 147,257 151,463 141,293 140,198 42 Claims on United States 17,751 46,546 59,403 63,923 66,547 66,253 71,363 74,728 70,459 70,705 43 Parent bank 12,631 31,643 34,653 40,308 40,152 40,105 44,414 47,703 43,174 44,301 44 Other 5,120 14,903 24,750 23,615 26,395 26,148 26,949 27,025 27,285 26,404 45 Claims on foreigners 101,926 98,057 81,450 72,021 72,826 71,268 71,995 72,788 66,916 65,597 46 Other branches of parent bank 13,342 12,951 18,720 15,354 16,789 15,817 17,993 17,340 15,989 14,655 47 Banks 54,861 55,151 42,699 37,350 36,609 35,964 35,353 36,767 32,451 32,527 48 Public borrowers 12,577 10,010 6,413 6,404 6,461 6,643 5,890 6,084 5,992 5,956 49 Nonbank foreigners 21,146 19,945 13,618 12,913 12,967 12,844 12,759 12,597 12,484 12,459 50 Other assets 4,160 4,505 4,303 3,755 3,775 3,790 3,899 3,947 3,918 3,896 51 Total payable in U.S. dollars 117,654 143,743 139,605 133,233 136,851 134,684 140,841 145,017 134,881 133,825 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A53 3.14 Continued 1983 1984 LLiiaabbiilliittyy aaccccoouunntt 11998800 Aug. Sept. Oct. Nov. Dec.' Jan. Feb.'' All foreign countries 52 Total, all currencies 401,135 462,847 469,432 452,596 460,261 458,894 463,467 475,593 453,982 462,397 53 To United States 91,079 137,767 178,918 183,864 182,588' 185,551' 184,202' 187,481 179,255 182,553 54 Parent bank 39,286 56,344 75,561 77,556 78,027 85,028 79,574 80,459 76,845 79,230 55 Other banks in United States 14,473 19,197 33,368 29,880 30,961' 27,094 26,264 29,175 26,718 25,633 56 Nonbanks 37,275 62,226 69,989 76,428 73,600' 73,429' 78,364' 77,847 75,692 77,690 57 To foreigners 295,411 305,630 270,678 250,563 259,525' 254,682' 260,335' 268,958 255,954 260,190 58 Other branches of parent bank 75,773 86,396 90,148 81,714' 86,714' 84,004' 86,792' 88,903 81,983 ,81,856 59 Banks 132,116 124,906 96,739 85,433 86,550 84,533 88,023 92,800 86,564 89,076 60 Official institutions 32,473 25,997 19,614 17,830 20,513 19,403 18,377 18,801 19,507 20,450 61 Nonbank foreigners 55,049 68,331 64,177 65,586' 65,748' 66,742' 67,143' 68,454 67,900 68,808 62 Other liabilities 14,690 19,450 19,836 18,169 18,148 18,661 18,930 19,154 18,773 19,654 63 Total payable in U.S. dollars 303,281 364,447 379,003 365,584' 373,061' 369,936' 374,426' 387,287 365,144 367,285 64 To United States 88,157 134,700 175,431 180,174' 178,814' 181,645' 180,206' 183,766 175,435 178,239 65 Parent bank 37,528 54,492 73,235 75,245' 75,743' 82,661' 77,127' 78,257 74,493 76,636 66 Other banks in United States 14,203 18,883 33,003 29,334 30,415 26,538 25,773 28,641 26,224 25,066 67 Nonbanks 36,426 61,325 69,193 75,595 72,656' 72,446' 77,306' 76,868 74,718 76,537 68 To foreigners 206,883 217,602 192,348 175,616 184,430' 178,943' 184,278' 193,785 180,795 179,720 69 Other branches of parent bank 58,172 69,299 72,878 64,522' 69,308' 66,502' 69,457' 71,899 64,926 63,469 70 Banks 87,497 79,594 57,355 49,522 50,862 48,264 52,072 57,013 50,604 50,675 71 Official institutions 24,697 20,288 15,055 13,029 15,400 14,630 13,453 13,852 14,673 15,829 72 Nonbank foreigners 36,517 48,421 47,060 48,543' 48.86C 47,547' 49,296' 51,021 50,592 49,747 73 Other liabilities 8,241 12,145 11,224 9,794 9,817 9,348 9,942 9,736 8,914 9,326 United Kingdom 74 Total, all currencies 144,717 157,229 161,067 154,865 156,048 156,803 155,964 158,717 155,098 157,973 75 To United States 21,785 38,022 53,954 58,347 56,924 60,903 57,095 55,799 55,620 56,596 76 Parent bank 4,225 5,444 13,091 16,145 16,852 21,385 17,312 14,021 17,077 18,333 77 Other banks in United States 5,716 7,502 12,205 12,462 12,174 10,751 10,176 11,328 10,640 10,570 78 Nonbanks 11,844 25,076 28,658 29,740 27,898 28,767 29,607 30,450 27,903 27,693 79 To foreigners 117,438 112,255 99,567 89,458 92,122 88,727 91,714 95,847 92,268 93,689 80 Other branches of parent bank 15,384 16,545 18,361 17,595 19,365 18,288 18,841 19,038 18,526 17,716 81 Banks 56,262 51,336 44,020 37,571 37,122 35,847 38,888 41,624 38,812 39,548 8? Official institutions 21,412 16,517 11,504 9,588 11,448 10,611 10,071 10,151 10,530 11,531 83 Nonbank foreigners 24,380 27,857 25,682 24,704 24,187 23,981 23,914 25,034 24,400 24,894 84 Other liabilities 5,494 6,952 7,546 7,060 7,002 7,173 7,155 7,071 7,210 7,688 85 Total payable in U.S. dollars 103,440 120,277 130,261 125,656 127,868 128,600 127,234 131,152 126,989 127,623 86 To United States 21,080 37,332 53,029 57,359 55,931 59,824 55,907 54,691 54,537 55,151 8877 Parent bank 4,078 5,350 12,814 15,829 16,673 21,145 17,094 13,839 16,840 17,926 8888 Other banks in United States 5,626 7,249 12,026 12,223 11,886 10,523 9,880 11,044 10,406 10,247 89 Nonbanks 11,376 24,733 28,189 29,307 27,372 28,156 28,933 29,808 27,291 26,978 90 To foreigners 79,636 79,034 73,477 64,801 68,252 65,347 68,011 73,279 69,557 69,393 91 Other branches of parent bank 10,474 12,048 14,300 13,421 15,166 14,542 15,044 15,403 14,758 13,931 97 Banks 35,388 32,298 28,810 24,447 24,478 23,136 26,343 29,320 26,386 26,229 93 Official institutions 17,024 13,612 9,668 7,630 9,381 8,742 8,029 8,279 8,594 9,777 94 Nonbank foreigners 16,750 21,076 20,699 19,303 19,227 18,927 18,595 20,277 19,819 19,456 95 Other liabilities 2,724 3,911 3,755 3,496 3,685 3,429 3,316 3,182 2,895 3,079 Bahamas and Caymans % Total, all currencies 123,837 149,108 145,156 139,699 143,148 141,311 147,257 151,463 141,293 140,198 97 To United States 59,666 85,759 104,425 104,470 104,59c 104.15C 106,633' 110,762 103,896 104,485 98 Parent bank 28,181 39,451 47,081 46,491 45,493 48,235 46,676 50,187 44,604 44,186 99 Other banks in United States 7,379 10,474 18,466 14,560 16,17C 14,322 14,117 15,711 14,391 13,533 100 Nonbanks 24,106 35,834 38,878 43,419 42,927' 41,593' 45,84C 44,864 44,901 46,766 101 To foreigners 61,218 60,012 38,274 32,875 36,239' 34,782' 38,164' 38,362 35,157 33,440 102 Other branches of parent bank 17,040 20,641 15,796 11,621' 13,357' 12,634' 15,521' 13,376 12,253 11,789 103 Banks 29,895 23,202 10,166 8,737 9,506 9,059 9,618 11,869 9,883 9,351 104 Official institutions 4,361 3,498 1,967 2,170 2,237 1,976 1,624 1,916 2,309 1,870 105 Nonbank foreigners 9,922 12,671 10,345 10,347' 11,139' 11,113' 11,401' 11,201 10,712 10,430 106 Other liabilities 2,953 3,337 2,457 2,354 2,319 2,379 2,460 2,339 2,240 2,273 107 Total payable in U.S. dollars 119,657 145,284 141,908 136,228' 139,855' 137,514' 143,604' 147,658 137,429 136,514 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • May 1984 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1983r 1984 IItteemm 11998811 11998822 Sept. Oct. Nov. Dec. Jan/ Feb. Mar.P 1 Total1 169,735 172,718 171,465 173,216 173,860 177,859 176,239 176,820 174,661 By type 2 Liabilities reported by banks in the United States2 26,737 24,989 21,924 22,057 22,816 25,422 22,768 23,150 23,187 3 U.S. Treasury bills and certificates3 52,389 46,658 50,374 51,618 52,558 54,341 55,327 56,084 53,681 U.S. Treasury bonds and notes 4 Marketable 53,186 67,733 69,205 69,715 68,942 68,541 69,080 69,116 69,547 5 Nonmarketable4 11,791 8,750 7,950 7,950 7,250 7,250 7,250 6,600 6,600 6 U.S. securities other than U.S. Treasury securities5 25,632 24,588 22,012 21,876 22,294 22,305 21,814 21,870 21,646 By area 7 Western Europe1 65,699 61,298 63,874 64,894 65,648 67,669 66,208 67,926 67,676 8 Canada 2,403 2,070 2,707 2,811 2,665 2,438 2,511 2,329 1,922 9 Latin America and Caribbean 6,953 6,057 5,502 5,629 6,468 6,217 6,443 7,605 6,439 10 Asia 91,607 96,034 92,767 92,305 91,457 92,488 92,181 90,523 90,449 11 Africa 1,829 1,350 1,196 1,023 801 958 1,051 1,067 1,035 12 Other countries6 1,244 5,909 5,419 6,554 6,821 8,089 7,845 7,370 7,135 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 thosepay- 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 1983 IItteemm 11998800 11998811 11998822 Mar/ June' Sept/ Dec. 1 Banks' own liabilities 3,748 3,523 4,844 5,088 5,880 5,976 5,205 2 Banks' own claims 4,206 4,980 7,707 8,110 7,862 7,984 7,256 3 Deposits 2,507 3,398 4,251 3,728 3,912 3,061 2,838 4 Other claims 1,699 1,582 3,456 4,382 3,950 4,923 4,418 5 Claims of banks' domestic customers' 962 971 676 637 684 717 1,059 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 A55 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1983 1984 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998800 11998811AA 11998822 Sept/ Oct. Nov. Dec. Jan.' Feb. Mar.P 1 All foreigners 205,297 243,889 307,056 338,026 338,117' 351,382' 369,226' 358,486 368,502 376,457 2 Banks' own liabilities 124,791 163,817 227,089 251,994 249,952' 262,226' 278,644' 264,478 271,459 284,250 3 Demand deposits 23,462 19,631 15,889 16,327 17,094 17,198 17,594 16,100 16,640 17,609 4 Time deposits1 15,076 29,039 68,035 81,624 80,865' 84,735' 90,098' 87,691 91,068 96.183 5 Other2 17,583 17,647 23,946 24,656 22,288' 22,863' 26,100 23,287 23,970 24,565 6 Own foreign offices3 68,670 97,500 119,219 129,387 129,706' 137,430' 144,851' 137,401 139,781 145,892 7 Banks' custody liabilities4 80,506 80,072 79,967 86,032 88,165' 89,156 90,582 94,007 97,043 92,207 8 U.S. Treasury bills and certificates5 57,595 55,315 55,628 64,062 65,735 66,746 68,669 71,083 74,277 69,669 9 Other negotiable and readily transferable instruments6 20,079 18,788 20,636 17,302 17,182 17,721 17,529 18,063 17,880 18,051 10 Other 2,832 5,970 3,702 4,669 5,247' 4,690 4,385 4,862 4,886 4,486 11 Nonmonetary international and regional organizations7 2,344 2,721 4,922 5,308 4,619 6,363' 5,957 4,759 6,831 66,,225533 1? Banks' own liabilities 444 638 1,909 3,024 3,294 4,939' 4,632 2,867 2,317 4,057 n Demand deposits 146 262 106 252 452 437 297 271 347 414 14 Time deposits1 85 58 1,664 2,168 2,487 4,079 3,885 2,235 1,611 2,666 15 Other2 212 318 139 605 355 423' 449 361 360 977 16 Banks' custody liabilities4 1,900 2,083 3,013 2,284 1,325 1,424 1,325 1,892 4,514 2,196 17 U.S. Treasury bills and certificates 254 541 1,621 1,442 441 484 463 1,045 3,416 1,224 18 Other negotiable and readily transferable instruments6 1,646 1,542 1,392 842 884 939 862 847 1,098 971 19 Other 0 0 0 0 0 0 0 0 0 0 20 Official institutions8 86,624 79,126 71,647 72,299 73,675 75,374 79,764 78,095 79,234 76,867 21 Banks' own liabilities 17,826 17,109 16,640 16,147 16,532 16,673 19,315 16,488 17,493 16,934 22 Demand deposits 3,771 2,564 1,899 1,886 1,818 2,023 1,837 1,753 1,663 2,038 n Time deposits1 3,612 4,230 5,528 6,228 6,661' 6,723' 7,294 7,286 7,638 6,467 24 Other2 10,443 10,315 9,212 8,033 8,053' 7,926' 10,184 7,449 8,192 8,429 25 Banks' custody liabilities4 68,798 62,018 55,008 56,152 57,144 58,701 60,448 61,607 61,741 59,933 26 U.S. Treasury bills and certificates5 56,243 52,389 46,658 50,374 51,618 52,558 54,341 55,327 56,084 53,681 27 Other negotiable and readily transferable instruments6 12,501 9,581 8,321 5,745 5,489 6,115 6,082 6,257 5,623 6,234 28 Other 54 47 28 32 36 28 25 23 34 19 29 Banks9 96,415 136,008 185,881 206,381 204,672' 214,010' 226,485' 217,907 222,587 232,786 30 Banks' own liabilities 90,456 124,312 169,449 185,313 182,731' 192,572' 204,945' 195,330 200,068 210,415 31 Unaffiliated foreign banks 21,786 26,812 50,230 55,926 53,025' 55,142' 60,094' 57,929 60,287 64,524 32 Demand deposits 14,188 11,614 8,675 8,618 9,102 8,770 8,756 8,151 8,396 8,359 33 Time deposits1 1,703 8,720 28,386 31,883 30,691' 32,678' 36,734' 35,036 37,358 41,799 34 Other2 5,895 6,477 13,169 15,425 13,232' 13,695' 14,604 14,743 14,534 14,366 35 Own foreign offices3 68,670 97,500 119,219 129,387 129,706' 137,43C 144,851' 137,401 139,781 145,892 36 Banks' custody liabilities4 5,959 11,696 16,432 21,069 21,941 21,438 21,540 22,576 22,519 22,371 37 U.S. Treasury bills and certificates 623 1,685 5,809 9,440 10,036 9,967 10,178 10,776 10,756 10,763 38 Other negotiable and readily transferable instruments6 2,748 4,400 7,857 7,553 7,542 7,251 7,485 7,416 7,395 77,,445511 39 Other 2,588 5,611 2,766 4,075 4,363 4,221 3,877 4,384 4,368 4,157 40 Other foreigners 19,914 26,035 44,606 54,038 55,151' 55,635 57,021 57,725 59,850 60,551 41 Banks' own liabilities 16,065 21,759 39,092 47,510 47,396' 48,042 49,751 49,793 51,580 52,843 4? Demand deposits 5,356 5,191 5,209 5,571 5,723 5,968 6,703 5,925 6,234 6,798 43 Time deposits 9,676 16,030 32,457 41,345 41,025' 41,255 42,185 43,134 44,462 45,252 44 Other2 1,033 537 1,426 594 648 819 863 734 884 794 45 Banks' custody liabilities4 3,849 4,276 5,514 6,528 7,755 7,593 7,269 7,932 8,270 7,707 46 U.S. Treasury bills and certificates 474 699 1,540 2,805 3,640 3,737 3,686 3,935 4,021 4,001 47 Other negotiable and readily transferable instruments6 3,185 3,265 3,065 3,162 3,267 3,415 3,100 3,542 3,764 3,395 48 Other 190 312 908 561 848' 441 483 455 484 311 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,745 10,747 14,307 10,346 9,995 10,385 10,407 10,307 9,416 9,700 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

A56 International Statistics • May 1984 3.17 Continued 1983 1984 AArreeaa aanndd ccoouunnttrryy 11998800 11998811AA 11998822 Sept. Oct. Nov. Dec. Jan. Feb. Mar .P 1 Total 205,297 243,889 307,056 338,026r 338,117' 351,382' 369,226' 358,486' 368,502 376,457 2 Foreign countries 202,953 241,168 302,134 332,718r 333,498' 345,019' 363,269' 353,726' 361,671 370,204 3 Europe 90,897 91,275 117,756 125,969' 127,131' 130,671" 138,006 134,887' 140,029 141,936 4 Austria 523 596 519 659 570 641 585 755' 763 861 5 Belgium-Luxembourg 4,019 4,117 2,517 2,795 2,856' 2,470' 2,709 2,972' 3,211 3,365 6 Denmark 497 333 509 593 544 538 466 372 385 285 7 Finland 455 296 748 373 372 375 531 298 398 287 8 France 12,125 8,486 8,171 8,827 8,638 8,083 9,441 8,122' 10,098 10,713 9 Germany 9,973 7,645 5,351 3,438 4,307 4,337 3,599 3,823' 4,582 4,863 10 Greece 670 463 537 604 595 544 520 513 513 503 11 Italy 7,572 7,267 5,626 6,931 7,703 7,824' 8,459 7,622 7,638 7,395 12 Netherlands 2,441 2,823 3,362 3,892 3,735 3,701 4,290 4,008 4,200 4,423 13 Norway 1,344 1,457 1,567 1,457 1,072 1,531 1,673 1,481 1,452 1,285 14 Portugal 374 354 388 302 297 306 373 377 352 403 15 Spain 1,500 916 1,405 1,678 1,592 1,534 1,603 1,645 1,664 1,759 lb Sweden 1,737 1,545 1,390 1,337 1,489 1,652 1,799 1,896' 1,752 1,835 17 Switzerland 16,689 18,716 29,066 29,94C 30,822' 30,623' 32,117 31,956' 32,237 32,266 18 Turkey 242 518 296 333 277 319 467 334 400 335 19 United Kingdom 22,680 28,286 48,172 55,708r 55,082' 58,437' 60,658 61,794' 64,404 64,627 20 Yugoslavia 681 375 499 506 464 552 562 505 477 478 21 Other Western Europe1 6,939 6,541 7,006 6,048' 6,102 6,660 7,493 5,872 4,965 5,607 22 U.S.S.R 68 49 50 23 37 27 65 62 74 177 23 Other Eastern Europe2 370 493 576 525 576 518 596 482' 464 468 24 Canada 10,031 10,250 12,232 16,470 16,335' 16,369' 16,026' 16,27c 17,679 17,224 25 Latin America and Caribbean 53,170 85,223 114,163 126,709' 126,640' 134,139' 140,033' 135,671' 138,168 143,127 26 Argentina 2,132 2,445 3,578 4,148 4,018 4,377 4,011 4,303 4,536 4,365 27 Bahamas 16,381 34,856 44,744 49.52C 50,496' 53,703' 55,877' 52,314' 52,779 58,161 28 Bermuda 670 765 1,572 2,706' 2,632 2,582 2,328 2,745 3,165 2,903 29 Brazil 1,216 1,568 2,014 3,406 3,818 4,150 3,158' 2,997 3,473 3,725 30 British West Indies 12,766 17,794 26,381 28,520' 27,466' 30,624' 34,431' 32,531' 32,297 32,353 31 Chile 460 664 1,626 1,616' 1,697 1,783 1,842 1,811 1,935 1,876 32 Colombia 3,077 2,993 2,594 1,611 1,617 1,645 11,,668899 1,584 1,840 1,656 33 Cuba 6 9 9 10 10 10 88 9 13 20 34 Ecuador 371 434 455 670 825 1,003 1,047 828 826 825 35 Guatemala 367 479 670 758 750 766 788 800 812 815 36 Jamaica 97 87 126 109 105 234 109 113 131 596 37 Mexico 4,547 7,235 8,377 9,702' 9,449 9,463 10,389 10,994 10,693 10,215 38 Netherlands Antilles 413 3,182 3,597 3,586' 3,888' 3,941 3,879 3,773 4,501 4,895 39 Panama 4,718 4,857 4,805 6,084' 5,902 5,946' 5,924 5,586' 5,545 5,608 40 Peru 403 694 1,147 1,203 1,049 1,090 1,166 1,130 1,146 1,157 41 Uruguay 254 367 759 1,116 1,202 1,173 1,232 1,278 1,321 1,418 42 Venezuela 3,170 4,245 8,417 8,385' 8,202 8,024 8,603 9,313 9,442 8,565 43 Other Latin America and Caribbean 2,123 2,548 3,291 3,561 3,513 3,626 3,551 3,562' 3,712 3,972 44 42,420 49,822 48,716 54,948' 5533,,887711'' 5544,,227788'' 5588,,335511 5566,,000022'' 5555,,227744 5577,,551100 China 45 Mainland 49 158 203 190 216 183 249 249 168 272 46 Taiwan 1,662 2,082 2,761 3,852 3,992 4,063 3,997 4,27 C 4,291 4,165 47 Hong Kong 2,548 3,950 4,465 6,586' 6,511' 6,971 6,610 6,1%' 5,884 6,402 48 India 416 385 433 712 830 725 464 670 749 686 49 Indonesia 730 640 857 622 871 661 997 1,093 859 758 50 Israel 883 592 606 848 812 808 1,722 786' 733 830 51 Japan 16,281 20,750 16,078 17,455' 17,140' 17,138 18,079 17,069' 17,615 19,018 52 Korea 1,528 2,013 1,692 1,478 1,353 1,591 1,648 1,614 1,542 1,748 53 Philippines 919 874 770 1,181 747 1,012 1,234 1,235 1,280 1,259 54 Thailand 464 534 629 581 522 569 716 776 622 714 55 Middle-East oil-exporting countries3 14,453 12,992 13,433 12,975' 12.86C 12,650' 12,960 12,516' 11,587 12,185 56 Other Asia 2,487 4,853 6,789 8,468' 8,017' 7,907 9,676 9,528 9,943 9,473 57 Africa 5,187 3,180 3,124 3,132 2,845 2,694 2,800 2,917 3,070 3,096 58 Egypt 485 360 432 488 576 589 645 572 568 547 59 Morocco 33 32 81 84 73 96 84 109 138 122 60 South Africa 288 420 292 520 394 389 449 486 502 538 61 Zaire 57 26 23 34 43 32 87 61 66 77 62 Oil-exporting countries4 3,540 1,395 1,280 963 736 679 620 869 839 892 63 Other Africa 783 946 1,016 1,042 1,023 909 917 821 957 920 64 Other countries 1,247 1,419 6,143 5,490 6,675 6,868 8,053 7,979 7,451 7,310 65 Australia 950 1,223 5,904 5,284 6,461 6,666 7,857 7,742 7,197 7,091 66 All other 297 196 239 206 214 202 196 237 255 220 67 Nonmonetary international and regional organizations 2,344 2,721 4,922 5,308 4,619 6,363' 5,957 4,759 6,831 6,253 68 International 1,157 1,661 4,049 4,674 3,944 5,598' 5,273 4,174 6,189 5,426 69 Latin American regional 890 710 517 445 437 415 419 433 457 451 70 Other regional5 296 350 357 189 238 350 265 152 186 376 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 A57 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 1984 AArreeaa aanndd ccoouunnttrryy 11998800 11998811AA 11998822 Sept/ Oct/ Nov/ Dec/ Jan/ Feb. Mar." 1 Total 172,592 251,589 355,705 376,847 373,311 375,118 387,710 372,146 376,349 383,928 2 Foreign countries 172,514 251,533 355,636 376,249 373,251 375,048 387,547 372,081 376,185 383,778 Europe 32,108 49,262 85,584 91,041 89,145 90,243 90,743 90,378 91,374 91,003 4 Austria 236 121 229 351 334 395 401 354 414 466 5 Belgium-Luxembourg 1,621 2,849 5,138 5,673 5,533 5,548 5,639 5,942 6,182 5,943 6 Denmark 127 187 554 1,135 1,107 1,272 1,275 1,296 1,244 1,252 7 Finland 460 546 990 697 789 822 1,044 945 952 911 8 France 2,958 4,127 7,251 7,869 7,457 7,942 8,761 7,984 8,309 8,390 9 Germany 948 940 1,876 1,428 1,095 1,256 1,294 1,058 1,034 1,108 10 Greece 256 333 452 411 372 412 476 508 549 694 11 Italy 3,364 5,240 7,560 7,083 7,713 8,459 9,013 7,869 7,899 8,095 1? Netherlands 575 682 1,425 1,189 1,071 1,396 1,302 1,407 1,318 1,324 13 Norway 227 384 572 550 575 590 690 652 645 625 14 Portugal 331 529 950 861 893 891 939 954 944 908 15 Spain 993 2,095 3,744 3,402 3,162 3,654 3,573 3,391 3,277 3,429 16 Sweden 783 1,205 3,038 3,081 3,059 3,249 3,358 3,373 3,356 3,403 17 Switzerland 1,446 2,213 1,639 1,781 1,625 2,114 1,856 1,452 1,302 1,431 18 Turkey 145 424 560 616 660 693 812 795 879 958 19 United Kingdom 14,917 23,849 45,781 51,183 50,041 47,762 46,372 48,488 49,177 48,099 20 Yugoslavia 853 1,225 1,430 1,369 1,468 1,582 1,673 1,718 1,702 1,700 71 Other Western Europe1 179 211 368 536 405 429 477 493 547 522 77 U.S.S.R 281 377 263 219 211 173 192 162 169 201 23 Other Eastern Europe2 1,410 1,725 1,762 1,606 1,575 1,603 1,598 1,537 1,475 1,543 24 Canada 4,810 9,193 13,678 16,578 15,892 16,382 16,330 15,868 15,975 17,200 75 Latin America and Caribbean 92,992 138,347 187,969 195,069 194,991 197,785 203,269 193,898 196,953 201,717 76 Argentina 5,689 7,527 10,974 11,464 11,638 11,899 11,740 11,746 11,751 11,614 77 Bahamas 29,419 43,542 56,649 55,179 55,756 56,131 58,351 52,586 53,167 57,303 78 Bermuda 218 346 603 564 477 620 566 644 409 531 79 Brazil 10,496 16,926 23,271 24.340 24,232 24,532 24,482 24,826 24,928 25,646 30 British West Indies 15,663 21,981 29,101 31,202 31,005 32,251 34,921 31,171 32,874 32,901 31 Chile 1,951 3,690 5,513 5,808 5,756 5,860 6,029 6,163 6,286 6,121 3? Colombia 1,752 2,018 3,211 3,670 3,653 3,734 3,745 3,695 3,536 3,672 33 Cuba 3 3 3 0 3 0 0 0 0 0 34 Ecuador 1,190 1,531 2,062 2,006 2,141 2,262 2,307 2,367 2,350 2,333 35 Guatemala3 137 124 124 112 115 122 129 189 126 128 36 Jamaica3 36 62 181 214 203 210 215 218 219 210 37 Mexico 12,595 22,439 29,552 33,798 33,562 33,729 34,710 34,547 34,680 34,551 38 Netherlands Antilles 821 1,076 839 917 1,033 1,186 1,154 971 1,043 1,189 39 Panama 4,974 6,794 10,210 9,206 8,835 8,336 7,848 7,847 8,794 8,494 40 Peru 890 1,218 2,357 2,470 2,434 2,469 2,536 2,467 2,415 2,460 41 Uruguay 137 157 686 857 883 903 977 982 908 926 4? Venezuela 5,438 7,069 10,643 11,046 10,888 11,086 11,287 11,247 11,168 11,130 43 Other Latin America and Caribbean 1,583 1,844 1,991 2,217 2,377 2,455 2,271 2,232 2,298 2,510 44 39,078 49,851 60,952 64,783 63,949 61,286 67,648 62,655 62,018 64,206 China 45 Mainland 195 107 214 227 295 249 292 420 337 350 46 Taiwan 2,469 2,461 2,288 1,829 1,618 1,574 1,908 1,820 1,709 1,666 47 Hong Kong 2,247 4,132 6,787 8,711 8,337 8,758 8,429 8,129 7,509 7,714 48 India 142 123 222 259 324 305 330 344 253 327 49 Indonesia 245 352 348 695 704 711 805 853 899 934 50 Israel 1,172 1,567 2,029 1,726 1,780 1,817 1,795 1,556 1,478 1,586 St Japan 21,361 26,797 28,379 28,547 28,280 25,829 30,573 27,333 27,894 28,247 57 Korea 5,697 7,340 9,387 9,648 9,324 9,629 9,891 9,489 9,435 9,793 53 Philippines 989 1,819 2,625 2,779 2,376 2,427 2,099 2,408 2,354 2,359 54 Thailand 876 565 643 806 831 867 1,021 1,021 1,035 966 5S Middle East oil-exporting countries4 1,432 1,581 3,087 4,155 4,689 4,276 4,954 4,637 4,261 5,050 56 Other Asia 2,252 3,009 4,943 5,402 5,390 4,845 5,549 4,646 4,853 5,215 57 Africa 2,377 3,503 5,346 6,501 6,910 6,830 6,654 6,571 7,154 6,900 58 Egypt 151 238 322 610 642 692 747 738 709 744 59 Morocco 223 284 353 444 462 461 440 450 481 474 60 South Africa 370 1,011 2,012 2,719 2,578 2,892 2,634 2,684 2,868 2,967 61 Zaire 94 112 57 38 38 37 33 29 16 14 67 Oil-exporting countries5 805 657 801 964 1,485 1,039 1,073 1,037 1,124 1,026 63 Other 734 1,201 1,802 1,727 1,705 1,709 1,727 1,631 1,955 1,676 64 Other countries 1,150 1,376 2,107 2,276 2,365 2,522 2,904 2,712 2,712 2,751 65 Australia 859 1,203 1,713 1,683 1,701 1,899 2,272 2,105 2,043 2,013 66 All other 290 172 394 593 664 624 632 607 669 738 67 Nonmonetary international and regional organizations6 78 56 68 598 60 70 164 64 164 150 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 before 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 A 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

A58 International Statistics • May 1984 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 1984 TTyyppee ooff ccllaaiimm 11998800 11998811AA 11998822 Sept/ Oct/ Nov/ Dec/ Jan/ Feb. Mar.P 1 Total 111111199999998888888,,,,,,,666666699999998888888 222222288888887777777,,,,,,,555555555555557777777 333333399999996666666,,,,,,,000000011111115555555 444444411111112222222,,,,,,,999999944444444444444 444444422222221111111,,,,,,,666666655555553333333 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111177777772222222,,,,,,,555555599999992222222 222222255555551111111,,,,,,,555555588888889999999 333333355555555555555,,,,,,,777777700000005555555 333333377777776666666,,,,,,,888888844444447777777 373,311 375,118 333333388888887777777,,,,,,,777777711111110000000 372,146 376,349 383,928 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 22222220000000,,,,,,,888888888888882222222 33333331111111,,,,,,,222222266666660000000 44444445555555,,,,,,,444444422222222222222 55555554444444,,,,,,,333333377777779999999 54,954 56,026 55555557777777,,,,,,,222222255555555555555 58,115 58,540 57,914 44 OOwwnn ffoorreeiiggnn ooffffiicceess'' 66666665555555,,,,,,,000000088888884444444 99999996666666,,,,,,,666666655555553333333 111111122222227777777,,,,,,,222222299999993333333 111111133333337777777,,,,,,,666666600000009999999 141,655 137,520 111111144444444444444,,,,,,,000000011111116666666 138,377 140,654 145,452 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 55555550000000,,,,,,,111111166666668888888 77777774444444,,,,,,,777777700000004444444 111111122222221111111,,,,,,,333333377777777777777 111111122222222222222,,,,,,,444444455555555555555 115,021 118,619 111111122222222222222,,,,,,,777777777777779999999 115,211 116,176 119,356 66 DDeeppoossiittss 8888888,,,,,,,222222255555554444444 22222223333333,,,,,,,333333388888881111111 44444444444444,,,,,,,222222222222223333333 44444448888888,,,,,,,777777700000009999999 44,697 44,738 44444446666666,,,,,,,333333399999992222222 43,092 44,622 45,488 77 OOtthheerr 44444441111111,,,,,,,999999911111114444444 55555551111111,,,,,,,333333322222222222222 77777777777777,,,,,,,111111155555553333333 77777773333333.......777777744444446666666 70,324 73,881 77777776666666,,,,,,,333333388888887777777 72,119 71,555 73,868 88 AAllll ootthheerr ffoorreeiiggnneerrss 33333336666666,,,,,,,444444455555559999999 44444448888888,,,,,,,999999977777772222222 66666661111111,,,,,,,666666611111114444444 66666662222222,,,,,,,444444400000004444444 61,681 62,952 66666663333333,,,,,,,666666666666661111111 60,442 60,979 61,206 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 22222226666666,,,,,,,111111100000006666666 33333335555555,,,,,,,999999966666668888888 44444440000000,,,,,,,333333311111110000000 33333336666666,,,,,,,000000099999997777777 33333333333333,,,,,,,999999944444443333333 888888888888885555555 1111111,,,,,,,333333377777778888888 2222222,,,,,,,444444499999991111111 2222222,,,,,,,666666655555554444444 2222222,,,,,,,999999966666669999999 11 Negotiable and readily transferable 11111115555555,,,,,,,555555577777774444444 22222226666666,,,,,,,333333355555552222222 33333330000000,,,,,,,777777766666663333333 22222227777777,,,,,,,555555555555550000000 22222225555555,,,,,,,111111100000004444444 12 Outstanding collections and other 9999999,,,,,,,666666644444448888888 8888888,,,,,,,222222233333338888888 7777777,,,,,,,000000055555556666666 5555555,,,,,,,888888899999992222222 5555555,,,,,,,888888877777770000000 13 MEMO: Customer liability on 22222222222222,,,,,,,777777711111114444444 22222229999999,,,,,,,999999955555552222222 33333338888888,,,,,,,111111155555553333333 33333334444444,,,,,,,666666611111119999999 33333337777777,,,,,,,333333322222224444444 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 ... 24,468 40,369 42,186 42,529 45,185 47,922 44,325 44,845 47,141 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 11998811 •• Dec. Mar/ June' Sept/ Dec/ 1 106,748 154,590 228,150 230,439 232,704 237,162 242,933 By borrower 2 Maturity of 1 year or less' 82,555 116,394 173,917 174,343 175,021 176,271 175,970 3 Foreign public borrowers 9,974 15,142 21,256 21,782 23,124 25,479 24,258 4 All other foreigners 72,581 101,252 152,661 152,561 151,897 150,792 151,712 5 Maturity of over 1 year' 24,193 38,197 54,233 56,096 57,683 60,891 66,963 6 Foreign public borrowers 10,152 15,589 23,137 25,094 26,455 28,231 32,482 7 All other foreigners 14,041 22,608 31,095 31,002 31,227 32,660 34,481 By area Maturity of 1 year or less' 8 Europe 18,715 28,130 50,500 54,127 52,208 53,332 55,550 9 Canada 2,723 4,662 7,642 6,878 7,110 6,642 6,200 10 Latin America and Caribbean 32,034 48,717 73,291 75,262 74,967 76,383 73,997 11 26,686 31,485 37,578 32,760 35,345 33,890 34,518 1? Africa 1,757 2,457 3,680 3,872 3,854 4,570 4,206 13 All other2 640 943 1,226 1,444 1,536 1,454 1,499 Maturity of over 1 year' 14 Europe 5,118 8,100 11,636 12,027 12,289 12,338 13,300 15 Canada 1,448 1,808 1,931 1,928 1,861 1,760 1,857 16 Latin America and Caribbean 15,075 25,209 35,247 35,916 36,730 39,102 43,498 17 1,865 1,907 3,185 3,590 4,070 4,735 4,838 18 Africa 507 900 1,494 1,485 1,667 1,819 2,278 19 All other2 179 272 740 1,150 1,066 1,136 1,191 1. Remaining time to maturity. • Liabilities and claims of banks in the United States were increased, 2. Includes nonmonetary international and regional organizations. beginning in December 1981, by the shift from foreign branches to international banking facilities in the United States of liabilities to, and claims on, foreign residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks' Billions of dollars, end of period 1982 1983 AArreeaa oorr ccoouunnttrryy 11997799 11998800 11998811 Mar. June Sept. Dec. Mar. June Sept. Dec. 1 303.9 352.0 415.2 419.6 435.3 438.2 438.6 440.6 436.5 425.5 435.7 2 G-10 countries and Switzerland 138.4 162.1 175.5 174.5 176.3 175.4 179.7 182.1 176.7 167.8 167.1 3 Belgium-Luxembourg 11.1 13.0 13.3 13.2 14.1 13.6 13.1 13.7 13.3 12.6 12.4 4 France 11.7 14.1 15.3 16.0 16.5 15.8 17.1 17.1 17.1 16.2 16.3 5 Germany 12.2 12.1 12.9 12.5 12.7 12.2 12.7 13.4 12.6 11.6 11.4 6 6.4 8.2 9.6 9.0 9.0 9.7 10.3 10.2 10.5 9.9 11.7 7 Netherlands 4.8 4.4 4.0 4.0 4.1 3.8 3.6 4.3 4.0 3.6 3.5 8 Sweden 2.4 2.9 3.7 4.1 4.0 4.7 5.0 4.3 4.7 4.9 5.1 9 Switzerland 4.7 5.0 5.5 5.3 5.1 5.1 5.0 4.6 4.8 4.2 4.3 10 United Kingdom 56.4 67.4 70.1 70.3 69.4 70.3 72.1 72.9 70.2 67.0 64.1 11 Canada 6.3 8.4 10.9 11.6 11.4 11.0 10.4 12.4 10.8 9.0 8.3 12 Japan 22.4 26.5 30.2 28.5 29.9 29.3 30.2 29.2 28.7 28.9 30.0 13 Other developed countries 19.9 21.6 28.4 30.7 32.1 32.7 33.7 33.9 34.4 34.1 36.0 14 Austria 2.0 1.9 1.9 2.1 2.1 2.0 1.9 2.1 2.1 1.9 1.9 15 Denmark 2.2 2.3 2.3 2.5 2.6 2.5 2.4 3.3 . 3.4 3.3 3.5 16 Finland 1.2 1.4 1.7 1.6 1.6 1.8 2.2 2.1 2.1 1.8 2.4 17 Greece 2.4 2.8 2.8 2.9 2.7 2.6 3.0 2.9 2.9 2.9 2.8 18 Norway 2.3 2.6 3.1 3.2 3.2 3.4 3.3 3.3 3.4 3.2 3.2 19 Portugal .7 .6 1.1 1.2 1.5 1.6 1.5 1.4 1.4 1.3 1.3 20 Spain 3.5 4.4 6.6 7.2 7.3 7.7 7.5 7.0 7.2 7.1 7.2 21 Turkey 1.4 1.5 1.4 1.6 1.5 1.5 1.4 1.5 1.4 1.5 1.7 22 Other Western Europe 1.4 1.7 2.1 2.1 2.2 2.1 2.3 2.2 2.0 2.1 1.9 73 South Africa 1.3 1.1 2.8 3.3 3.5 3.6 3.7 3.6 3.9 4.7 4.7 24 Australia 1.3 1.3 2.5 3.0 4.0 4.0 4.4 4.6 4.5 4.4 5.5 25 OPEC countries2 22.9 22.7 24.8 25.4 26.4 27.3 27.4 28.5 28.2 27.2 29.1 26 Ecuador 1.7 2.1 2.2 2.3 2.4 2.3 2.2 2.2 2.2 2.1 2.2 27 Venezuela 8.7 9.1 9.9 10.0 10.1 10.4 10.5 10.4 10.4 9.8 9.9 28 Indonesia 1.9 1.8 2.6 2.7 2.8 2.9 3.2 3.5 3.2 3.4 3.8 29 Middle East countries 8.0 6.9 7.5 8.2 8.7 9.0 8.7 9.3 9.5 9.0 10.0 30 African countries 2.6 2.8 2.5 2.2 2.5 2.7 2.8 3.0 3.0 2.8 3.1 31 Non-OPEC developing countries 63.0 77.4 96.3 97.5 103.6 104.0 107.0 107.6 108.2 108.8 111.1 Latin America 3? Argentina 5.0 7.9 9.4 10.0 9.6 9.2 8.9 9.0 9.4 9.5 9.6 33 Brazil 15.2 16.2 19.1 19.7 21.4 22.4 22.9 23.1 22.5 22.9 23.0 34 Chile 2.5 3.7 5.8 6.0 6.4 6.2 6.3 6.0 5.8 6.2 6.5 35 Colombia 2.2 2.6 2.6 2.3 2.6 2.8 3.1 2.9 3.2 3.2 3.2 36 Mexico 12.0 15.9 21.6 22.9 25.2 25.0 24.5 25.1 25.2 25.8 26.1 37 1.5 1.8 2.0 1.9 2.5 2.6 2.6 2.4 2.6 2.4 2.4 38 Other Latin America 3.7 3.9 4.1 4.1 4.0 4.3 4.0 4.2 4.3 4.2 4.3 Asia China 39 Mainland .1 .2 .2 .2 .3 .2 .2 .2 .2 .2 .3 40 Taiwan 3.4 4.2 5.1 5.1 5.0 4.9 5.2 5.1 5.1 5.2 5.3 41 India .2 .3 .3 .5 .5 .5 .6 .4 .5 .5 .6 4? Israel 1.3 1.5 2.1 1.7 2.2 1.9 2.3 2.0 2.3 1.7 1.8 43 Korea (South) 5.4 7.1 9.4 8.6 8.9 9.3 10.8 10.8 10.8 10.8 11.3 44 Malaysia 1.0 1.1 1.7 1.7 1.9 1.8 2.1 2.5 2.6 2.8 2.9 45 Philippines 4.2 5.1 6.0 5.9 6.3 6.0 6.3 6.6 6.4 6.2 6.2 46 Thailand 1.5 1.6 1.5 1.4 1.3 1.3 1.6 1.6 1.8 1.7 1.9 47 Other Asia .5 .6 1.0 1.2 1.1 1.3 1.1 1.4 1.2 1.0 1.0 Africa 48 Egypt .6 .8 1.1 1.3 1.3 1.3 1.2 1.1 1.3 1.4 1.4 49 Morocco .6 .7 .7 .7 .7 .8 .7 .8 .8 .8 .8 50 Zaire .2 .2 .2 .2 .2 .1 .1 .1 .1 .1 .1 51 Other Africa3 1.7 2.1 2.3 2.3 2.3 2.2 2.4 2.3 2.2 2.4 2.3 52 Eastern Europe 7.3 7.4 7.8 7.2 6.7 6.3 6.2 5.8 5.7 5.3 5.4 53 U.S.S.R .7 .4 .6 .4 .4 .3 .3 .3 .4 .2 .2 54 Yugoslavia 1.8 2.3 2.5 2.5 2.4 2.2 2.2 2.2 2.3 2.3 2.4 55 Other 4.8 4.6 4.7 4.3 3.9 3.8 3.7 3.3 3.0 2.8 2.8 56 Offshore banking centers 40.4 47.0 63.7 65.7 72.0 72.1 66.8 66.1 67.3 65.5 70.2 57 Bahamas 13.7 13.7 19.0 20.2 24.1 21.4 19.0 17.3 19.5 19.0 21.9 58 Bermuda .8 .6 .7 .7 .7 .8 .9 1.0 .8 .8 .9 59 Cayman Islands and other British West Indies 9.4 10.6 12.4 12.1 12.3 13.6 12.9 11.9 12.1 10.2 12.0 60 Netherlands Antilles 1.2 2.1 3.2 3.2 3.0 3.3 3.3 3.1 2.6 4.1 4.1 61 Panama4 4.3 5.4 7.7 7.2 7.4 8.1 7.6 7.1 6.6 5.7 6.0 62 Lebanon .2 .2 .2 .2 .2 .1 .1 .1 .1 .1 .1 63 Hong Kong 6.0 8.1 11.8 12.9 14.3 15.0 13.9 15.2 14.5 15.1 14.9 64 Singapore 4.5 5.9 8.7 9.3 9.9 9.8 9.1 10.3 11.0 10.4 10.2 65 Others5 .4 .3 .1 .1 .1 .0 .0 .0 .0 .1 .0 66 Miscellaneous and unallocated6 11.7 14.0 18.8 18.5 18.4 20.3 17.9 16.7 16.1 16.8 16.8 1. The banking offices covered by these data are the U.S. offices and foreign 2. Besides the Organization of Petroleum Exporting Countries shown individbranches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. ually, this group includes other members of OPEC (Algeria, Gabon, Iran, Iraq, Offices not covered include (1) U.S. agencies and branches of foreign banks, and Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 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

A60 International Statistics • May 1984 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States' Millions of dollars, end of period 1982 1983 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998800 11998811 11998822 Dec. Mar. June Sept. Dec.P 1 Total 29,434 28,618 25,568 25,568 23,285 22,531 24,595 23,571 2 Payable in dollars 25,689 24,909 22,375 22,375 20,302 19,625 21,728 20,484 3 Payable in foreign currencies 3,745 3,709 3,193 3,193 2,983 2,906 2,867 3,087 By type 4 Financial liabilities 11,330 12,157 10,906 10,906 10,831 10,866 10,779 10,383 5 Payable in dollars 8,528 9,499 8,734 8,734 8,795 8,823 8,809 8,504 6 Payable in foreign currencies 2,802 2,658 2,172 2,172 2,036 2,043 1,971 1,879 7 Commercial liabilities 18,104 16,461 14,662 14,662 12,454 11,665 13,815 13,189 8 Trade payables 12,201 10,818 7,707 7,707 5,627 6,026 7,056 6,496 9 Advance receipts and other liabilities 5,903 5,643 6,955 6,955 6,827 5,640 6,760 6,693 10 Payable in dollars 17,161 15,409 13,641 13,641 11,507 10,802 12,919 11,980 11 Payable in foreign currencies 943 1,052 1,021 1,021 947 864 896 1,208 By area or country Financial liabilities 12 Europe 6,481 6,825 6,369 6,369 6,233 6,220 5,978 5,715 13 Belgium-Luxembourg 479 471 505 505 410 436 379 302 14 France 327 709 731 731 725 756 785 820 15 Germany 582 491 470 470 487 460 454 505 16 Netherlands 681 748 711 711 699 728 730 581 17 Switzerland 354 715 753 753 702 621 530 525 18 United Kingdom 3,923 3,565 3,070 3,070 3,081 3,069 2,943 2,834 19 Canada 964 963 746 746 733 865 788 770 20 Latin America and Caribbean 3,136 3,356 2,724 2,724 2,707 2,435 2,658 2,541 21 Bahamas 964 1,279 899 899 827 695 771 749 22 Bermuda 1 7 14 14 18 10 13 13 23 Brazil 23 22 28 28 39 34 32 32 24 British West Indies 1,452 1,241 1,010 1,010 1,009 932 972 896 25 Mexico 99 102 121 121 149 151 185 215 26 Venezuela 81 98 114 114 121 124 117 124 27 723 976 1,039 1,039 1,124 1,319 1,322 1,330 28 Japan 644 792 715 715 781 943 957 962 29 Middle East oil-exporting countries2 38 75 169 169 168 205 201 170 30 Africa 11 14 17 17 20 17 19 18 31 Oil-exporting countries3 1 0 0 0 0 0 0 0 32 All other4 15 24 12 12 13 9 15 10 Commercial liabilities 33 Europe 4,402 3,770 3,649 3,649 3,443 3,368 3,384 3,122 34 Belgium-Luxembourg 90 71 52 52 45 41 47 62 35 France 582 573 597 597 578 617 506 436 36 Germany 679 545 467 467 455 439 461 436 37 Netherlands 219 220 346 346 351 342 243 275 38 Switzerland 499 424 363 363 354 357 448 232 39 United Kingdom 1,209 880 850 850 679 633 786 605 40 Canada 888 897 1,490 1,490 1,433 1,465 1,407 1,827 41 Latin America and Caribbean 1,300 1,044 1,008 1,008 1,066 1024 11,,006677 11,,006633 42 Bahamas 8 2 16 16 4 1 11 11 43 Bermuda 75 67 89 89 117 76 76 63 44 Brazil 111 67 60 60 51 49 48 44 45 British West Indies 35 2 32 32 4 22 14 6 46 Mexico 367 340 379 379 355 399 429 491 47 Venezuela 319 276 165 165 198 236 217 166 48 10,242 9,384 7,160 7,160 5,437 4,799 6,852 6,040 49 Japan 802 1,094 1,226 1,226 1,235 1,236 1,294 1,234 50 Middle East oil-exporting countries2-5 8,098 7,008 4,531 4,531 2,803 2,294 4,072 3,498 51 Africa 817 703 704 704 497 492 506 446 52 Oil-exporting countries3 517 344 277 277 158 167 204 157 53 All other4 456 664 651 651 578 518 600 690 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 affects 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 A61 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 11998800 11998811 11998822 Dec. Mar. June Sept. Dec.'' 1 Total 34,482 36,185 28,411 28,411 31,189 31,421 31,656' 33,329 2 Payable in dollars 31,528 32,582 25,784 25,784 28,472 28,778 28.78C 30,169 3 Payable in foreign currencies 2,955 3,603 2,628 2,628 2,718 2,643 2,877 3,160 By type 4 Financial claims 19,763 21,142 17,429 17,429 20,220 20,812 20,831 22,299 5 Deposits 14,166 15,081 12,893 12,893 15,569 15,976 15,987 17,318 6 Payable in dollars 13,381 14,456 12,467 12,467 15,092 15,549 15,542 16,821 7 Payable in foreign currencies 785 625 426 426 478 426 445 497 8 Other financial claims 5,597 6,061 4,536 4,536 4,651 4,836 4,845 4,981 9 Payable in dollars 3,914 3,599 2,895 2,895 3,006 3,238 3,019 2,919 10 Payable in foreign currencies 1,683 2,462 1,641 1,641 1,645 1,598 1,826 2,062 11 Commercial claims 14,720 15,043 10,982 10,982 10,969 10,609 10,825' 11,030 12 Trade receivables 13,960 14,007 9,973 9,973 9,765 9,241 9,526' 9,655 13 Advance payments and other claims 759 1,036 1,010 1,010 1,203 1,367 1,299 1,375 14 Payable in dollars 14,233 14,527 10,422 10,422 10,374 9,991 10,219' 10,429 15 Payable in foreign currencies 487 516 561 561 595 618 606 601 By area or country Financial claims 16 Europe 6,069 4,596 4,835 4,835 6,196 6,817 6,202 6,423 17 Belgium-Luxembourg 145 43 10 10 58 12 25 37 18 France 298 285 134 134 98 140 135 130 19 Germany 230 224 178 178 127 217 151 129 20 Netherlands 51 50 97 97 140 136 89 49 21 Switzerland 54 117 107 107 107 37 34 38 22 United Kingdom 4,987 3,546 4,044 4,044 5,414 6,040 5,547 5,768 23 Canada 5,036 6,755 4,287 4,287 4,613 4,881 4,958 5,759 24 Latin America and Caribbean 7,811 8,812 7,420 7,420 8,520 8,040 8,609 9,110 25 Bahamas 3,477 3,650 3,236 3,236 3,806 3,244 3,389 4,332 26 Bermuda 135 18 32 32 21 93 62 96 71 Brazil 96 30 62 62 50 48 49 53 28 British West Indies 2,755 3,971 3,161 3,161 3,365 3,339 3,932 3,509 79 Mexico 208 313 274 274 352 348 315 273 30 Venezuela 137 148 139 139 156 152 137 134 31 Asia 607 758 698 698 712 772 764 714 3? Japan 189 366 153 153 233 288 257 246 33 Middle East oil-exporting countries2 20 37 15 15 18 14 8 4 34 Africa 208 173 158 158 153 154 151 147 35 Oil-exporting countries3 26 46 48 48 45 48 45 55 36 All other4 32 48 31 31 25 149 148 145 Commercial claims 37 Europe 5,544 5,405 3,777 3,777 3,594 3,410 3,349 3,604 38 Belgium-Luxembourg 233 234 150 150 140 144 131 142 39 France 1,129 776 473 473 489 499 486 455 40 Germany 599 561 356 356 424 364 381' 346 41 Netherlands 318 299 347 347 309 242 282 332 42 Switzerland 354 431 339 339 227 303 270 295 43 United Kingdom 929 985 808 808 754 739 734 802 44 Canada 914 967 632 632 648 716 788 822 45 Latin America and Caribbean 3,766 3,479 2,521 2,521 2,699 2,722 2,864 2,697 46 Bahamas 21 12 21 21 30 30 15 8 47 Bermuda 108 223 259 259 172 108 242 194 48 Brazil 861 668 258 258 402 512 611 493 49 British West Indies 34 12 12 12 21 21 12 7 50 Mexico 1,102 1,022 774 774 894 956 897 883 51 Venezuela 410 424 351 351 288 273 282 273 52 3,522 3,959 3,048 3,048 3,128 2,871 2,936' 3,045 53 Japan 1,052 1,245 1,047 1,047 1,115 949 1,037 1,091 54 Middle East oil-exporting countries2 825 905 751 751 702 700 719 737 55 Africa 653 772 588 588 559 528 562 584 56 Oil-exporting countries3 153 152 140 140 131 130 131 139 57 All other4 321 461 417 417 342 361 326 277 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

A62 International Statistics • May 1984 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1984 1983 1984 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998822 11998833rr Jan.- Mar. Sept/ Oct. Nov. Dec. Jan. Feb. Mar.'' U.S. corporate securities STOCKS 1 Foreign purchases 41,881 69,896 17,769 5,513 5,534' 4,853' 6,020 5,445' 6,237 6,086 2 Foreign sales 37,981 64,466 17,214 5,115 5,388' 4,794' 5,745 5,798 5,827 5,588 3 Net purchases, or sales (-) 3,901 5,430 555 398 145' 60' 275 -353' 410 498 4 Foreign countries 3,816 5,332 604 390 141' 59' 283 -342' 479 466 5 Europe 2,530 3,999 311 257 -93' -60' -278 -160 146 325 6 France -143 -97 -173 -10 -33' -68' -64 -71 -97 -5 7 Germany 333 1,045 361 39 55 53 -51 95 116 151 8 Netherlands -63 -109 32 -49 -15 24 13 0 1 32 9 Switzerland -579 1,325 186 123 -18 -97 -208 -92 281 -4 10 United Kingdom 3,117 1,818 -130 174 -133' 21 51 -87 -168 125 11 Canada 222 1,151 708 154 124 -1 183 83 324 301 12 Latin America and Caribbean 317 529 181 107 -4C 14' 239 124 43 14 13 Middle East1 366 -807 -603 -178 49 45 13 -361' -44 -197 14 Other Asia 247 394 21 51 103 63 122 -48 36 33 15 Africa 2 42 7 4 -1 1 2 5 10 -7 16 Other countries 131 24 -20 -6 -1 -3 1 16 -34 -1 17 Nonmonetary international and regional organizations 85 98 -49 8 4 0 -7 -11 -70 32 BONDS2 18 Foreign purchases 21,639 23,976 6,138 1,900 2,537 2,039 1,661 1,836' 2,113 2,189 19 Foreign sales 20,188 23,076 6,084 1,960 2,492 1,304 1,493 1,775' 1,864 2,445 20 Net purchases, or sales (-) 1,451 900 54 -60 45 735 168 62' 248 -257 21 Foreign countries 1,479 885 34 -65 142 715 160 72' 161 -199 22 Europe 2,082 904 118 26 303 458 -87 72' 52 -6 23 France 305 -89 -7 0 2 -31 -4 -1 -5 -1 24 Germany 2,110 286 46 41 66 53 -10 -38 -32 117 25 Netherlands 33 51 36 1 11 5 3 3 25 9 26 Switzerland 157 632 -24 -19 7 15 78 12 5 -41 27 United Kingdom -589 438 173 42 136 390 -126 129' 101 -58 28 Canada 24 123 -35 -10 22 46 -22 1' -10 -26 29 Latin America and Caribbean 159 100 -287 4 24 -6 20 9 16 -312 30 Middle East1 -752 -1,159 -28 -130 -249 116 42 -26 30 -32 31 Other Asia -22 865 267 44 45 101 207 18 75 173 32 Africa -19 0 0 2 0 0 0 -1 0 0 33 Other countries 7 52 0 -2 -4 0 0 0 -2 3 34 Nonmonetary international and regional organizations -28 15 20 6 -97 20 7 -11 87 -57 Foreign securities 35 Stocks, net purchases, or sales (-) -1,341 -3,867 355 -113 -13' -31' -190 -125' 315 165 36 Foreign purchases 7,163 13,143 4,231 1,293 1,142' 907' 1,126 1,197' 1,456 1,578 37 Foreign sales 8,504 17,010 3,877 1,407 1,155' 939' 1,317 1,323 1,141 1,413 38 Bonds, net purchases, or sales (-) -6,631 -3,694 27 -12 -202' 173 -689 125' -73 -26 39 Foreign purchases 27,167 35,669 11,924 3,756 3,903' 3,114' 3,072 3,273' 3,902 4,748 40 Foreign sales 33,798 39,363 11,897 3,768 4,105' 2,940 3,761 3,148' 3,975 4,774 41 Net purchases, or sales (-), of stocks and bonds .... -7,972 -7,561 381 -125 -215' 142' -879 0' 242 139 42 Foreign countries -6,806 -7,116 235 -153 -264' 38' -719 -29' 210 54 43 Europe -2,584 -5,713 -643 117 -367' -426' -448 -45' -407 -191 44 Canada -2,363 -1,582 -60 -355 6 37 -64 -128' 184 -116 45 Latin America and Caribbean 336 1,120 355 23 5 135 17 114' 188 54 46 Asia -1,822 -914 609 105 90 158' -81 33' 255 320 47 Africa -9 141 -26 16 11 1 0 -5 -11 -10 48 Other countries -364 -166 0 -59 -10 133' -143 2 1 -3 49 Nonmonetary international and regional organizations -1,165 -445 146 28 49 105 -161 28 32 85 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 A63 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1984 1983 1984 11998822 11998833 Country or area M Ja a n r . . - Sept. Oct. Nov. Dec. Jan. Feb. Mar. P Holdings (end of period)1 1 Estimated total2 85,220 88,94C 88,571' 90,938r 89,509' 88,94c 89,666' 90,244 89,741 2 Foreign countries2 80,637 83,82C 82,648' 84,283' 83,668' 83,82C 84,549' 84,415 84,463 3 Europe2 29,284 35,537' 33,384' 34,469' 35,106' 35,537' 36,049' 37,394 37,324 4 Belgium-Luxembourg 447 16 58 18 2 16 33 50 57 5 Germany2 14,841 17,290 16,156 16,570 17,092 17,290 17,581 18,527 18,837 6 Netherlands 2,754 3,129 3,034 2,987 3,048 3,129 3,113 3,052 3,023 7 Sweden 677 867r 691' 739' 783' 867' 898' 918 960 8 Switzerland2 1,540 1,118 1,087 1,177 1,064 1,118 1,167 1,206 1,252 9 United Kingdom 6,549 8,524 8,289 8,629 8,626 8,524 8,723 8,608 8,427 10 Other Western Europe 2,476 4,592r 4,070' 4,350' 4,49c 4,592' 4,535' 5,034 4,768 11 Eastern Europe 0 0 0 0 0 0 0 0 0 12 Canada 602 1,301 1,063 1,265 1,225 1,301 1,298 1,310 1,090 13 Latin America and Caribbean 1,076 863 774 695 914 863 1,426 840 563 14 Venezuela 188 64 65 66 64 64 64 64 64 15 Other Latin America and Caribbean 656 716 631 540 674 716 696 574 504 16 Netherlands Antilles 232 83 78 89 176 83 665 201 -6 17 Asia 49,543 46,00c 47,301' 47,720' 46,301' 46.00C 45,664' 44,768 45,382 18 Japan 11,578 13,910 13,210 13,446 13,600 13,910 14,012 14,351 14,333 19 Africa 77 79 79 79 79 79 79 78 82 20 All other 55 40 48 56 43 40 33 25 22 21 Nonmonetary international and regional organizations 4,583 5,120' 5,923' 6,655' 5,841' 5,I2C 5,117' 5,829 5,278 22 International 4,186 4,404 5,421 6,094 5,030 4,404 4,467 5,139 4,613 23 Latin American regional 6 6 6 6 0 6 6 6 6 Transactions (net purchases, or sales ( -) during period) 24 Total2 14,972 3,720' 801 1,116' 2,367' -1,422 -576 726' 579 -503 25 Foreign countries2 16,072 3,183' 643 -114' 1,635' -615 152 729' -134 48 26 Official institutions 14,550 806' 1,005 -45' 51C -773' -401 539' 36 431 27 Other foreign2 1,518 2,381' -363 -69' 1,125' 158' 554 189' -169 -383 28 Nonmonetary international and regional organizations -1,097 531' 157 1,230' 732' -808 -729 -3 711 -551 MEMO: Oil-exporting countries 29 Middle East3 7,575 -5,424' -1,293 -305 -373 -968 -60 -515 -801 23 30 Africa4 -552 -1 0 0 0 0 0 0 0 0 1. Estimated official and private holdings of marketable U.S. Treasury securi- 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to ties with an original maturity of more than 1 year. Data are based on a benchmark private foreign residents denominated in foreign currencies. survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and nonmarketable U.S. Treasury bonds and notes held by official institutions of United Arab Emirates (Trucial States). foreign countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Apr. 30, 1984 Rate on Apr. 30, 1984 Rate on Apr. 30, 1984 CCoouunnttrryy CCoouunnttrryy CCoouunnttrryy Per- Month Per- Month Per- Month cent effective cent effective cent effective 444444......222222555555 MMMMMMaaaaaarrrrrr...... 111111999999888888444444 111111222222......000000 DDDDDDeeeeeecccccc...... 111111999999888888333333 888...000 JJJuuunnneee 111999777999 111111111111......000000 FFFFFFeeeeeebbbbbb...... 111111999999888888444444 GGeerrmmaannyy,, FFeedd.. RReepp.. ooff ...... 444444......000000 MMMMMMaaaaaarrrrrr...... 111111999999888888333333 444...000 MMMaaarrr... 111999888333 444444999999......000000 MMMMMMaaaaaarrrrrr...... 111111999999888888111111 IIttaallyy 111111666666......000000 FFFFFFeeeeeebbbbbb...... 111111999999888888444444 111111000000......888888444444 AAAAAApppppprrrrrr...... 111111999999888888444444 555555......000000 OOOOOOcccccctttttt...... 111111999999888888333333 111111...000 MMMaaayyy 111999888333 777777......000000 OOOOOOcccccctttttt...... 111111999999888888333333 555555......000000 SSSSSSeeeeeepppppptttttt...... 111111999999888888333333 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

A64 International Statistics • May 1984 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1983 1984 CCoouunnttrryy,, oorr ttyyppee 11998811 11998822 11998833 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Eurodollars 16.79 12.24 9.57 9.54 9.79 10.08 9.78 9.91 10.40 10.83 2 United Kingdom 13.86 12.21 10.06 9.34 9.26 9.34 9.40 9.35 8.90 8.84 3 Canada 18.84 14.38 9.48 9.31 9.40 9.83 9.84 9.85 10.40 10.75 4 Germany 12.05 8.81 5.73 6.13 6.26 6.43 6.07 5.91 5.82 5.81 5 Switzerland 9.15 5.04 4.11 4.07 4.11 4.29 3.65 3.47 3.60 3.61 6 Netherlands 11.52 8.26 5.58 6.07 6.17 6.20 6.01 5.95 6.09 6.04 7 France 15.28 14.61 12.44 12.42 12.31 12.16 12.22 12.36 12.53 12.46 8 Italy 19.98 19.99 18.95 17.51 17.71 17.75 17.75 17.40 17.28 17.38 9 Belgium 15.28 14.10 10.51 9.44 9.89 10.50 10.68 11.43 12.02 11.66 10 Japan 7.58 6.84 6.49 6.52 6.35 6.45 6.35 6.34 6.41 6.26 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 1984 CCoouunnttrryy//ccuurrrreennccyy 11998811 11998822 11998833 Nov. Dec. Jan. Feb. Mar. Apr. 1 Australia/dollar' 114.95 101.65 90.14 91.59 90.04 90.60 93.48 95.13 92.31 2 Austria/schilling 15.948 17.060 17.968 18.900 19.383 19.815 19.028 18.285 18.630 3 Belgium/franc 37.194 45.780 51.121 54.538 55.939 57.354 55.279 53.135 54.078 4 Brazil/cruzeiro 92.374 179.22 573.27 870.21 943.43 1022.81 1131.37 1266.64 1387.52 5 Canada/dollar 1.1990 1.2344 1.2325 1.2367 1.2469 1.2484 1.2480 1.2697 1.2796 6 China, P.R./yuan 1.7031 1.8978 1.9809 1.9940 1.9920 2.0490 2.0628 2.0646 2.0929 7 Denmark/krone 7.1350 8.3443 9.1483 9.6791 9.9530 10.1793 9.8549 9.5175 9.7311 8 Finland/markka 4.3128 4.8086 5.5636 5.7468 5.8515 5.9385 5.7892 5.6136 5.6434 9 France/franc 5.4396 6.5793 7.6203 8.1646 8.3839 8.5948 8.3051 8.0022 8.1411 10 Germany/deutsche mark 2.2631 2.428 2.5539 2.6846 2.7500 2.8110 2.6984 2.5973 2.6474 11 Greece/drachma n.a. 66.872 87.895 96.229 98.815 102.601 101.80 102.40 104.89 12 Hong Kong/dollar 5.5678 6.0697 7.2569 7.8120 7.8044 7.7968 7.7883 7.7942 7.8073 13 India/rupee 8.6807 9.4846 10.1040 10.378 10.4895 10.7152 10.744 10.714 10.820 14 Ireland/pound1 161.32 142.05 124.81 115.85 112.91 110.20 114.21 117.88 115.67 15 Israel/shekel n.a. 24.407 55.865 89.344 100.599 116.728 130.21 146.40 168.76 16 Italy /lira 1138.60 1354.00 1519.30 1625.79 1666.88 1706.63 1666.39 1614.17 1638.48 17 Japan/yen 220.63 249.06 237.55 235.03 234.46 233.80 233.60 225.27 225.20 18 Malaysia/ringgit 2.3048 2.3395 2.3204 2.3450 2.3407 2.3411 2.3363 2.2933 2.2904 19 Mexico/peso 24.547 72.990 155.01 162.36 164.84 166.33 168.49 172.93 179.07 20 Netherlands/guilder 2.4998 2.6719 2.8543 3.0078 3.0856 3.1602 3.0455 2.9326 2.9864 21 New Zealand/dollar1 86.848 75.101 66.790 65.854 65.120 64.860 65.810 66.714 65.834 22 Norway/krone 5.7430 6.4567 7.3012 7.4696 7.7237 7.8763 7.6937 7.5028 7.5992 23 Philippines/peso 7.8113 8.5324 11.0940 14.050 14.050 14.050 14.050 14.186 14.257 24 Portugal/escudo 61.739 80.101 111.610 127.82 131.91 136.29 135.01 131.70 134.46 25 Singapore/dollar 2.1053 2.1406 2.1136 2.1334 2.1317 2.1309 2.1279 2.0893 2.0853 26 South Africa/rand1 114.77 92.297 89.85 84.23 82.15 79.54 81.31 82.10 80.19 27 South Korea/won n.a. 731.93 776.04 7%. 32 799.23 800.33 799.06 794.51 796.41 28 Spain/peseta 92.396 110.09 143.500 154.66 158.01 159.832 154.20 149.68 150.26 29 Sri Lanka/rupee 18.967 20.756 23.510 24.572 24.767 25.181 25.270 25.177 25.133 30 Sweden/krona 5.0659 6.2838 7.6717 7.9201 8.0608 8.1782 7.9976 7.7323 7.8444 31 Switzerland/franc 1.9674 2.0327 2.1006 2.1701 2.1983 2.2380 2.2050 2.1490 2.1913 32 Taiwan/Dollar n.a. n.a. n.a. 38.780 39.613 40.202 40.236 40.078 39.784 33 Thailand/baht 21.731 23.014 22.991 22.990 22.992 23.006 23.000 23.004 23.010 34 United Kingdom/pound1 202.43 174.80 151.59 147.66 143.38 140.76 144.17 145.57 142.10 35 Venezuela/bolivar 4.2781 4.2981 10.6840 12.782 12.834 13.021 13.023 13.470 14.375 MEMO United States/dollar2 102.94 116.57 125.34 130.26 132.84 135.07 131.71 128.07 130.01 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

A65 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 1983 A84 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference 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 commercial banks, June 30, 1983 December 1983 A68 Assets and liabilities of commercial banks, September 30, 1983 March 1984 A68 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 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1983 December 1983 A74 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1983 March 1984 A74 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 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 LARRY J. PROMISEL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director DALE W. HENDERSON, Associate Director DIVISION OF BANKING ROBERT F. GEMMIL, Staff Adviser SUPERVISION AND REGULATION SAMUEL PIZER, Staff Adviser PETER HOOPER III, Assistant Director JOHN E. RYAN, Director DAVID H. HOWARD, Assistant Director WILLIAM TAYLOR, Deputy Director RAYMOND LUBITZ, Assistant Director FREDERICK R. DAHL, Associate Director RALPH W. SMITH, JR., Assistant Director DON E. KLINE, Associate Director JACK M. EGERTSON, Assistant Director ROBERT S. PLOTKIN, Assistant Director SIDNEY M. SUSSAN, Assistant Director LAURA M. HOMER, Securities Credit Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 and Official Staff NANCY H. TEETERS LYLE E. GRAMLEY EMMETT J. RICE OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES S. DAVID FROST, Staff Director THEODORE E. ALLISON, Staff Director EDWARD T. MULRENIN, Assistant Staff Director JOSEPH W. DANIELS, SR., Advisor, Equal Employment STEPHEN R. MALPHRUS, Assistant Staff Director for Office Opportunity Programs Automation and Technology DIVISION OF FEDERAL RESERVE DIVISION OF DATA PROCESSING BANK OPERATIONS CHARLES L. HAMPTON, Director CLYDE H. FARNSWORTH, JR., Director BRUCE M. BEARDSLEY, Deputy Director ELLIOTT C. MCENTEE, Associate Director GLENN L. CUMMINS, Assistant Director DAVID L. ROBINSON, Associate Director NEAL H. HILLERMAN, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director RICHARD J. MANASSERI, Assistant Director WALTER ALTHAUSEN, Assistant Director ELIZABETH B. RIGGS, Assistant Director CHARLES W. BENNETT, Assistant Director WILLIAM C. SCHNEIDER, JR., Assistant Director ANNE M. DEBEER, Assistant Director ROBERT J. ZEMEL, Assistant Director JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant Director * JOHN F. SOBALA, Assistant Director DIVISION OF PERSONNEL 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 ROBERT E. FRAZIER, 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

68 Federal Reserve Bulletin • May 1984 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman ANTHONY M. SOLOMON, Vice Chairman EDWARD G. BOEHNE LYLE E. GRAMLEY J. CHARLES PARTEE ROBERT H. BOYKIN KAREN N. HORN EMMETT J. RICE E. GERALD CORRIGAN PRESTON MARTIN NANCY H. TEETERS HENRY C. WALLICH STEPHEN H. AXILROD, Staff Director and Secretary RICHARD G. DAVIS, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary DONALD L. KOHN, Associate Economist NANCY M. STEELE, Deputy Assistant Secretary RICHARD W. LANG, Associate Economist MICHAEL BRADFIELD, General Counsel DAVID E. LINDSEY, Associate Economist JAMES H. OLTMAN, Deputy General Counsel MICHAEL J. PRELL, Associate Economist JAMES L. KICHLINE, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist (International) GARY H. STERN, Associate Economist JOSEPH E. BURNS, Associate Economist JOSEPH S. ZEISEL, Associate Economist JOHN M. DAVIS, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL JOHN G. MCCOY, President JOSEPH J. PINOLA, Vice President VINCENT C. BURKE, JR., N. BERNE HART, AND LEWIS T. PRESTON, Directors ROBERT L. NEWELL, First District ROGER E. ANDERSON, Seventh District LEWIS T. PRESTON, Second District WILLIAM H. BOWEN, Eighth District GEORGE A. BUTLER, Third District E. PETER GILLETTE, JR., Ninth District JOHN G. MCCOY, Fourth District N. BERNE HART, Tenth District VINCENT C. BURKE, JR., Fifth District NAT S. ROGERS, Eleventh District PHILIP F. SEARLE, Sixth District JOSEPH J. PINOLA, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 and Advisory Councils CONSUMER ADVISORY COUNCIL WILLARD P. OGBURN, Boston, Massachusetts, Chairman TIMOTHY D. MARRINAN, Minneapolis, Minnesota, Vice Chairman RACHEL G. BRATT, Medford, Massachusetts FREDERICK H. MILLER, Norman, Oklahoma JAMES G. BOYLE, Austin, Texas MARGARET M. MURPHY, Columbia, Maryland GERALD R. CHRISTENSEN, Salt Lake City, Utah ROBERT F. MURPHY, Detroit, Michigan THOMAS L. CLARK, JR., New York, New York LAWRENCE S. OKINAGA, Honolulu, Hawaii JEAN A. CROCKETT, Philadelphia, Pennsylvania ELVA QUIJANO, San Antonio, Texas MEREDITH FERNSTROM, New York, New York JANET J. RATHE, Portland, Oregon ALLEN J. FISHBEIN, Washington, D.C. JANET SCACCIOTTI, Providence, Rhode Island E.C.A. FORSBERG, SR., Atlanta, Georgia GLENDA G. SLOANE, Washington, D.C. STEVEN M. GEARY, Jefferson City, Missouri HENRY J. SOMMER, Philadelphia,Pennsylvania RICHARD F. HALLIBURTON, Kansas City, Missouri WINNIE F. TAYLOR, Gainesville, Florida LOUISE MCCARREN HERRING, Cincinnati, Ohio MICHAEL M. VAN BUSKIRK, Columbus, Ohio CHARLES C. HOLT, Austin, Texas CLINTON WARNE, Cleveland, Ohio HARRY N. JACKSON, Minneapolis, Minnesota FREDERICK T. WEIMER, Chicago, Illinois KENNETH V. LARKIN, San Francisco, California MERVIN WINSTON, Minneapolis, Minnesota THRIFT INSTITUTIONS ADVISORY COUNCIL THOMAS R. BOMAR, Miami, Florida, President RICHARD H. DEIHL, LOS Angeles, California, Vice President JAMES A. ALIBER, Detroit, Michigan NORMAN M. JONES, Fargo, North Dakota GENE R. ARTEMENKO, Chicago, Illinois ROBERT R. MASTERTON, Portland, Maine J. MICHAEL CORNWALL, Dallas, Texas JOHN T. MORGAN, New York, New York JOHN R. EPPINGER, Villanova, Pennsylvania FRED A. PARKER, Monroe, North Carolina SARAH R. WALLACE, Newark, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY Mail Stop 138, Board of Governors of the Federal Reserve OF THE U.S. GOVERNMENT SECURITIES MARKET. 1969. System, Washington, D.C. 20551. When a charge is indicat- 48 pp. $.25 each; 10 or more to one address, $.20 each. ed, remittance should accompany request and be made JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOVpayable to the order of the Board of Governors of the Federal ERNMENT SECURITIES MARKET; STAFF STUDIES—PART Reserve System. Remittance from foreign residents should 1, 1970. 86 pp. $.50 each; 10 or more to one address, $.40 be drawn on a U.S. bank. Stamps and coupons are not each. PART 2, 1971. Out of print. PART 3, 1973. 131 pp. accepted. $1.00; 10 or more to one address, $.85 each. OPEN MARKET POLICIES AND OPERATING PROCEDURES— STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- one address, $1.75 each. TIONS. 1974. 125 pp. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- ANNUAL REPORT. NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or 1972. 220 pp. Each volume, $3.00; 10 or more to one $2.00 each in the United States, its possessions, Canada, address, $2.50 each. and Mexico; 10 or more of same issue to one address, THE ECONOMETRICS OF PRICE DETERMINATION CONFER- $18.00 per year or $1.75 each. Elsewhere, $24.00 per ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 year or $2.50 each. pp. Cloth ed. $5.00 each; 10 or more to one address, BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint $4.50 each. Paper ed. $4.00 each; 10 or more to one of Part I only) 1976. 682 pp. $5.00. address, $3.60 each. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE 1,168 pp. $15.00. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 ANNUAL STATISTICAL DIGEST pp. $4.00 each; 10 or more to one address, $3.60 each. 1971-75. 1976. 339 pp. $ 5.00 per copy. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1972-76. 1977. 377 pp. $10.00 per copy. 1973. 271 pp. $3.50 each; 10 or more to one address, 1973-77. 1978. 361 pp. $12.00 per copy. $3.00 each. 1974-78. 1980. 305 pp. $10.00 per copy. IMPROVING THE MONETARY AGGREGATES: REPORT OF THE 1970-79. 1981. 587 pp. $20.00 per copy. ADVISORY COMMITTEE ON MONETARY STATISTICS. 1980. 1981. 241 pp. $10.00 per copy. 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 1981. 1982. 239 pp. $ 6.50 per copy. each. 1982. 1983. 266 pp. $ 7.50 per copy. ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— FEDERAL RESERVE CHART BOOK. Issued four times a year in Regulation Z) Vol. I (Regular Transactions). 1969. 100 February, May, August, and November. Subscription pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each includes one issue of Historical Chart Book. $7.00 per volume $1.00; 10 or more of same volume to one year or $2.00 each in the United States, its possessions, address, $.85 each. Canada, and Mexico. Elsewhere, $10.00 per year or FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY $3.00 each. UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- address, $1.50 each. tion to the Federal Reserve Chart Book includes one THE BANK HOLDING COMPANY MOVEMENT TO 1978: A issue. $1.25 each in the United States, its possessions, COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to Canada, and Mexico; 10 or more to one address, $1.00 one address, $2.25 each. each. Elsewhere, $1.50 each. IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- 1978. 170 pp. $4.00 each; 10 or more to one address, RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in $3.75 each. the United States, its possessions, Canada, and Mexico; 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. 10 or more of same issue to one address, $13.50 per year FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 or $.35 each. Elsewhere, $20.00 per year or $.50 each. each; 10 or more to one address, $1.50 each. THE FEDERAL RESERVE ACT, as amended through April 20, INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; 1983. with an appendix containing provisions of certain 10 or more to one address, $1.25 each. other statutes affecting the Federal Reserve System. 576 PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. pp. $7.00. $13.50 each. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- NEW MONETARY CONTROL PROCEDURES: FEDERAL RE- ERAL RESERVE SYSTEM. SERVE STAFF STUDY. 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: Truth in Leasing REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL U.S. Currency ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. What Truth in Lending Means to You FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updated at least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $60.00 per year. STAFF STUDIES • Summaries Only Printed in the Monetary Policy and Reserve Requirements Handbook. Bulletin $60.00 per year. Studies and papers on economic and financial subjects that Securities Credit Transactions Handbook. $60.00 per year. are of general interest. Requests to obtain single copies of Federal Reserve Regulatory Service. 3 vols. (Contains all the full text or to be added to the mailing list for the series three Handbooks plus substantial additional material.) may be sent to Publications Services. $175.00 per year. Rates for subscribers outside the United States are as follows and include additional air mail costs: 113. BELOW THE BOTTOM LINE: THE USE OF CONTINGEN- Federal Reserve Regulatory Service, $225.00 per year. CIES AND COMMITMENTS BY COMMERCIAL BANKS, by Each Handbook, $75.00 per year. Benjamin Wolkowitz and others. Jan. 1982. 186 pp. WELCOME TO THE FEDERAL RESERVE. 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- PROCESSING BANK HOLDING COMPANY AND MERGER APPLI- DENCE ON COMPETITION AND PERFORMANCE IN CATIONS BANKING MARKETS, by Timothy J. Curry and John T. Rose. Jan. 1982. 9 pp. SUSTAINABLE RECOVERY: SETTING THE STAGE, November 1982. 115. COSTS, SCALE ECONOMIES, COMPETITION, AND PROD- REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT ANNUAL UCT MIX IN THE U.S. PAYMENTS MECHANISM, by HUMAN RELATIONS AWARD DINNER, December 1982. David B. Humphrey. Apr. 1982. 18 pp. REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT DEDICATION 116. DIVISIA MONETARY AGGREGATES: COMPILATION, CEREMONIES: FEDERAL RESERVE BANK OF SAN FRAN- DATA, AND HISTORICAL BEHAVIOR, by William A. CISCO, March 1983. Barnett and Paul A. Spindt. May 1982. 82 pp. RESTORING STABILITY. REMARKS BY CHAIRMAN PAUL A. 117. THE COMMUNITY REINVESTMENT ACT AND CREDIT VOLCKER, April 1983. ALLOCATION, by Glenn Canner. June 1982. 8 pp. CREDIT CARDS IN THE U.S. ECONOMY: THEIR IMPACT ON 118. INTEREST RATES AND TERMS ON CONSTRUCTION COSTS, PRICES, AND RETAIL SALES, July 1983. 114 pp. LOANS AT COMMERCIAL BANKS, by David F. Seiders. July 1982. 14 pp. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTICOUNTRY MODEL, MAY 1984. 590 PP. $14.50 119. STRUCTURE-PERFORMANCE STUDIES IN BANKING: EACH. AN UPDATED SUMMARY AND EVALUATION, by Stephen A. Rhoades. Aug. 1982. 15 pp. 120. FOREIGN SUBSIDIARIES OF U.S. BANKING ORGANIZA- TIONS, by James V. Houpt and Michael G. Martinson. CONSUMER EDUCATION PAMPHLETS Oct. 1982. 18 pp. Short pamphlets suitable for classroom use. Multiple copies 121. REDLINING: RESEARCH AND FEDERAL LEGISLATIVE available without charge. RESPONSE, by Glenn B. Canner. Oct. 1982. 20 pp. 122. BANK CAPITAL TRENDS AND FINANCING, by Samuel H. Talley. Feb. 1983. 19 pp. Out of print. Alice in Debitland 123. FINANCIAL TRANSACTIONS WITHIN BANK HOLDING Consumer Handbook to Credit Protection Laws COMPANIES, by John T. Rose and Samuel H. Talley. The Equal Credit Opportunity Act and . . . Age May 1983. 11 pp. The Equal Credit Opportunity Act and . . . Credit Rights in 124. INTERNATIONAL BANKING FACILITIES AND THE EU- Housing RODOLLAR MARKET, by Henry S. Terrell and Rodney The Equal Credit Opportunity Act and . . . Doctors, Law- H. Mills. August 1983. 14 pp. yers, Small Retailers, and Others Who May Provide Inci- 125. SEASONAL ADJUSTMENT OF THE WEEKLY MONETARY dental Credit AGGREGATES: A MODEL-BASED APPROACH, by David The Equal Credit Opportunity Act and . . . Women A. pierce, Michael R. Grupe, and William P. Cleve- Fair Credit Billing land. August 1983. 23 pp. Federal Reserve Glossary 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- Guide to Federal Reserve Regulations KET INTERVENTION, by Donald B. Adams and Dale How to File A Consumer Credit Complaint W. Henderson. August 1983. 5 pp. If You Borrow To Buy Stock *127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- If You Use A Credit Card VENTION: JANUARY-MARCH 1975, by Margaret L. Instructional Materials of the Federal Reserve System Greene. Series on the Structure of the Federal Reserve System *128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- The Board of Governors of the Federal Reserve System VENTION: SEPTEMBER 1977-OcTOBER 1981, by Marga- The Federal Open Market Committee ret L. Greene. Federal Reserve Bank Board of Directors *129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- Federal Reserve Banks VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret Organization and Advisory Committees L. Greene. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- REPRINTS OF BULLETIN ARTICLES TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- Most of the articles reprinted do not exceed 12 pages. BLES: A REVIEW OF THE LITERATURE, by Victoria S. Farrell with Dean A. DeRosa and T. Ashby McCown. January 1984. 21 pp. Survey of Finance Companies. 1980. 5/81. 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- Bank Lending in Developing Countries. 9/81. DEUTSCHE MARK INTERVENTION, by Laurence R. The Commercial Paper Market since the Mid-Seventies. 6/82. Jacobson. October 1983. 8 pp. Applying the Theory of Probable Future Competition. 9/82. 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- International Banking Facilities. 10/82. TWEEN EXCHANGE RATES AND INTERVENTION: A New Federal Reserve Measures of Capacity and Capacity REVIEW OF THE TECHNIQUES AND LITERATURE, by Utilization. 7/83. Kenneth Rogoff. October 1983. 15 pp. Foreign Experience with Targets for Money Growth. 10/83. 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- Intervention in Foreign Exchange Markets: A Summary of VENTION, AND INTEREST RATES: AN EMPIRICAL IN- Ten Staff Studies. 11/83. VESTIGATION, by Bonnie E. Loopesko. November A Financial Perspective on Agriculture. 1/84. 1983. 20 pp. U.S. International Transactions in 1983. 4/84. 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET INTERVENTION: A REVIEW OF THE LITERATURE, by Ralph W. Try on. October 1983. 14 pp. *135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET INTERVENTION: APPLICATIONS TO CANADA, GERMA- NY, AND JAPAN, by Deborah J. Danker, Richard A. Haas, Dale W. Henderson, Steven A. Symansky, and Ralph W. Tryon. 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- MY, by Darrell Cohen and Peter B. Clark. January 1984. 16 pp. 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF FINANCIAL DEREGULATION, INTERSTATE BANKING, AND FINANCIAL SUPERMARKETS, by Stephen A. Rhoades. February 1984. 8 pp. The availability of these studies will be announced in a forthcoming BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 Index to Statistical Tables References are to pages A3 through A64 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers, 9, 22, 24 Demand deposits—Continued Agricultural loans, commercial banks, 18, 19, 23 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 21 Banks, by classes, 17-19 Turnover, 14 Domestic finance companies, 35 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Foreign banks, U.S. branches and agencies, 20 Reserves and related items, 3, 4, 5, 12 Nonfinancial corporations, 34 Deposits (See also specific types) Savings institutions, 26 Banks, by classes, 3, 17-20, 26 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 38, 39 Turnover, 14 Production, 44, 45 Discount rates at Reserve Banks and at foreign central banks (See Interest rates) BANKERS acceptances, 9, 22, 24 Discounts and advances by Reserve Banks (See Loans) Bankers balances, 17-19 (See also Foreigners) Dividends, corporate, 33 Bonds (See also U.S. government securities) New issues, 32 EMPLOYMENT, 42, 43 Rates 3 Eurodollars, 24 Branch banks, 14, 20, 52 Business activity, nonfinancial, 42 Business expenditures on new plant and equipment, 34 FARM mortgage loans, 37 Business loans (See Commercial and industrial loans) Federal agency obligations, 4, 9, 10, 11, 30 Federal credit agencies, 31 CAPACITY utilization, 42 Federal finance Capital accounts Debt subject to statutory limitation and types and Banks, by classes, 17 ownership of gross debt, 29 Federal Reserve Banks, 10 Receipts and outlays, 27, 28 Central banks, discount rates, 63 Treasury financing of surplus, or deficit, 27 Certificates of deposit, 20, 24 Treasury operating balance, 27 Commercial and industrial loans Federal Financing Bank, 27, 31 Commercial banks, 15, 20, 23 Federal funds, 3, 5, 16, 18, 19, 20, 24, 27 Weekly reporting banks, 18-20 Federal Home Loan Banks, 31 Commercial banks Federal Home Loan Mortgage Corporation, 31, 36, 37 Assets and liabilities, 17-19 Federal Housing Administration, 31, 36, 37 Business loans, 23 Federal Land Banks, 37 Commercial and industrial loans, 15, 20, 23 Federal National Mortgage Association, 31, 36, 37 Consumer loans held, by type, and terms, 38, 39 Federal Reserve Banks Loans sold outright, 19 Condition statement, 10 Nondeposit fund, 16 Discount rates (See Interest rates) Number, by classes, 17 U.S. government securities held, 4, 10, 11, 29 Real estate mortgages held, by holder and property, 37 Federal Reserve credit, 4, 5, 10, li Time and savings deposits, 3 Federal Reserve notes, 10 Commercial paper, 3, 22, 24, 35 Federally sponsored credit agencies, 31 Condition statements (See Assets and liabilites) Finance companies Construction, 42, 46 Assets and liabilities, 35 Consumer installment credit, 38, 39 Business credit, 35 Consumer prices, 42, 47 Loans, 18, 38, 39 Consumption expenditures, 48, 49 Paper, 22, 24 Corporations Financial institutions Profits and their distribution, 33 Loans to, 18, 19, 20 Security issues, 32, 62 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 38 (See also Thrift institutions) Flow of funds, 40, 41 Currency and coin, 17 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 20 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 18, 19 DEBITS to deposit accounts, 14 Foreign exchange rates, 64 Debt (See specific types of debt or securities) Foreign trade, 51 Demand deposits Foreigners Adjusted, commercial banks, 14 Claims on, 52, 54, 57, 58, 59, 61 Banks, by classes, 17-20 Liabilities to, 19, 51, 52-56, 60, 62, 63 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 GOLD REAL estate loans Certificate account, 10 Banks, by classes, 15, 18, 19, 37 Stock, 4, 51 Rates, terms, yields, and activity, 3, 36 Government National Mortgage Association, 31, 36, 37 Savings institutions, 26 Gross national product, 48, 49 Type of holder and property mortgaged, 37 Repurchase agreements, 5, 16, 18, 19, 20 HOUSING, new and existing units, 46 Reserve requirements, 7 Reserves INCOME, personal and national, 42, 48, 49 Commercial banks, 17 Industrial production, 42, 44 Depository institutions, 3, 4, 5, 12 Installment loans, 38, 39 Federal Reserve Banks, 10 Insurance companies, 26, 29, 37 U.S. reserve assets, 51 Interbank loans and deposits, 17 Residential mortgage loans, 36 Interest rates Retail credit and retail sales, 38, 39, 42 Bonds, 3 Business loans of banks, 23 SAVING Federal Reserve Banks, 3, 6 Flow of funds, 40, 41 Foreign central banks and foreign countries, 63, 64 National income accounts, 49 Money and capital markets, 3, 24 Savings and loan associations, 8, 26, 37, 38, 40 (See also Mortgages, 3, 36 Thrift institutions) Prime rate, commercial banks, 22 Savings deposits (See Time and savings deposits) Time and savings deposits, 8 Securities (See specific types) International capital transactions of United States, 50-63 Federal and federally sponsored credit agencies, 31 International organizations, 54, 55-57, 60-63 Foreign transactions, 62 Inventories, 48 New issues, 32 Investment companies, issues and assets, 33 Prices, 25 Investments (See also specific types) Special drawing rights, 4, 10, 50, 51 Banks, by classes, 17, 19, 26 State and local governments Commercial banks, 3, 15, 17-19, 20, 37 Deposits, 18, 19 Federal Reserve Banks, 10, 11 Holdings of U.S. government securities, 29 Savings institutions, 26, 37 New security issues, 32 Ownership of securities issued by, 18, 19, 26 LABOR force, 43 Rates on securities, 3 Life insurance companies (See Insurance companies) Stock market, 25 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 17-19 New issues, 32 Commercial banks, 3, 15, 17-19, 20, 23 Prices, 25 Federal Reserve Banks, 4, 5, 6, 10, 11 Insured or guaranteed by United States, 36, 37 Student Loan Marketing Association, 31 Savings institutions, 26, 37 TAX receipts, federal, 28 MANUFACTURING Capacity utilization, 42 Thrift institutions, 3 (See also Credit unions, Mutual Production, 42, 45 savings banks, and Savings and loan associations) Margin requirements, 25 Time and savings deposits, 3, 8, 13, 16, 17-20 Member banks (See also Depository institutions) Trade, foreign, 51 Federal funds and repurchase agreements, 5 Treasury currency, Treasury cash, 4 Reserve requirements, 7 Treasury deposits, 4, 10, 27 Mining production, 45 Treasury operating balance, 27 Mobile homes shipped, 46 UNEMPLOYMENT, 43 Monetary and credit aggregates, 3, 12 U.S. government balances Money and capital market rates (See Interest rates) Commercial bank holdings, 17, 18, 19 Money stock measures and components, 3, 13 Treasury deposits at Reserve Banks, 4, 10, 27 Mortgages (See Real estate loans) U.S. government securities Mutual funds (See Investment companies) Bank holdings, 16, 17-19, 20, 29 Mutual savings banks, 8, 18-19, 26, 29, 37, 38 (See also Dealer transactions, positions, and financing, 30 Thrift institutions) Federal Reserve Bank holdings, 4, 10, 11, 29 Foreign and international holdings and transactions, 10, NATIONAL defense outlays, 28 29, 63 National income, 48 Open market transactions, 9 Outstanding, by type and holder, 26, 29 OPEN market transactions, 9 Rates, 3, 24 U.S. international transactions, 50-63 PERSONAL income, 49 Utilities, production, 45 Prices Consumer and producer, 42, 47 VETERANS Administration, 36, 37 Stock market, 25 Prime rate, commercial banks, 22 WEEKLY reporting banks, 18-20 Producer prices, 42, 47 Wholesale (producer) prices, 42, 47 Production, 42, 44 Profits, corporate, 33 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 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 Edward G. Boehne Nevius M. Curtis Richard L. Smoot CLEVELAND* 44101 William H. Knoell Karen N. Horn E. Mandell de Windt William H. Hendricks Cincinnati 45201 Vacant Charles A. Cerino Pittsburgh 15230 Milton G. Hulme, Jr. Harold J. Swart RICHMOND* 23219 William S. Lee Robert P. Black Leroy T. Canoles, Jr. Jimmie R. Monhollon Baltimore 21203 Robert L. Tate Robert D. McTeer, Jr. Charlotte 28230 Henry Ponder Albert D. Tinkelenberg Culpeper Communications John G. Stoides and Records Center 22701 ATLANTA 30301 John H. Weitnauer, Jr. Robert P. Forrestal Bradley Currey, Jr. Jack Guynn Birmingham 35283 Martha A. Mclnnis Fred R. Herr Jacksonville 32231 Jerome P. Keuper James D. Hawkins Miami 33152 Sue McCourt Cobb Patrick K. Barron Nashville 37203 C. Warren Neel Jeffrey J. Wells New Orleans 70161 Sharon A. Perlis Henry H. Bourgaux CHICAGO* 60690 Stanton R. Cook Silas Keehn Edward F. Brabec Daniel M. Doyle Detroit 48231 Russell G. Mawby William C. Conrad ST. LOUIS 63166 W.L. Hadley Griffin Theodore H. Roberts Mary P. Holt Joseph P. Garbarini Little Rock 72203 Sheffield Nelson John F. Breen Louisville 40232 Sister Eileen M. Egan James E. Conrad Memphis 38101 Patricia W. Shaw Paul I. Black, Jr. MINNEAPOLIS 55480 William G. Phillips E. Gerald Corrigan John B. Davis, Jr. Thomas E. Gainor Helena 59601 Ernest B. Corrick Robert F. McNellis KANSAS CITY 64198 Doris M. Drury Roger Guffey Irvine O. Hockaday, Jr. Henry R. Czerwinski Denver 80217 James E. Nielson Wayne W. Martin Oklahoma City 73125 Patience Latting William G. Evans Omaha 68102 Robert G. Lueder Robert D. Hamilton DALLAS 75222 Robert D. Rogers Robert H. Boykin John V. James William H. Wallace El Paso 79999 Mary Carmen Saucedo Joel L. Koonce, Jr. Houston 77252 Paul N. Howell J.Z. Rowe San Antonio 78295 Lawrence L. Crum 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 Paul E. Bragdon 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

A76 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories LEGEND ' Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories * Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

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