Federal Reserve Bulletin, 1984-08

VOLUME 70 • NUMBER 8 • AUGUST 1984 FEDERAL RESERVE Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost Griffith L. Garwood • James L. Kichline • Edwin M. Truman Naomi P. Salus, Coordinator The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Helen L. Hulen. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 609 MONETARY POLICY REPORT look, before the Joint Economic Committee TO THE CONGRESS of the Congress, July 30, 1984. The nation's economy in the first half of 636 Chairman Volcker reviews the international 1984 was characterized by marked strength debt situation and acknowledges that it is a in sales, production, and employment, and large and complicated problem that must be by relatively low inflation. resolved on a case-by-case basis, before the House Committee on Foreign Affairs, Au- 621 STAFF STUDIES gust 8, 1984. In "Some Implications of Financial Innova- 643 ANNOUNCEMENTS tions in the United States," the authors examine the implications of the effects of Proposed revision of guidelines regarding the recent process of deregulation and mar- capital adequacy for state member banks ket innovation, coupled with more volatility and bank holding companies; proposal to in financial markets, on the behavior of eliminate the "fractional availability creditdepository institutions and the public. ing option" for recovery of interterritory check float. 623 INDUSTRIAL PRODUCTION Actions affecting net settlement service. Output rose about 0.9 percent in July. Changes in Board staff. 625 STATEMENTS TO CONGRESS Admission of three state banks to membership in the Federal Reserve System. Theodore E. Allison, Staff Director for Federal Reserve Bank Activities, Board of 645 RECORD OF POLICY ACTIONS OF THE Governors of the Federal Reserve System, FEDERAL OPEN MARKET COMMITTEE presents the views of the Board on proposed legislation mandating that the Secre- At its meeting on May 21-22, 1984, the tary of the Treasury adopt changes in the Committee agreed that no change should be design for currency and coin only after made at this time in the existing degree of approval by the Congress, before the Sub- pressure on reserve positions. The memcommittee on Consumer Affairs and Coin- bers anticipated that this policy would conage of the House Committee on Banking, tinue to be associated with growth of Ml Finance and Urban Affairs, July 24, 1984. and M2 at annual rates of around 6V2 and 8 percent for the period from March to June 626 Paul A. Volcker, Chairman, Board of Govand with growth of M3 at an annual rate of ernors, reviews monetary policy in the conabout 10 percent, somewhat above the obtext of the nation's overall economic perjective set in March for the second quarter. formance and problems, before the Senate It was agreed that the intermeeting range Committee on Banking, Housing, and Urfor the federal funds rate would remain at ban Affairs, July 25, 1984. IV2 to 11V2 percent. It was also recognized 632 Chairman Volcker presents a brief discus- that, within the context of this overall polision of some general considerations of mon- cy approach, operations might need to be etary policy and the problems that present modified if unusual financial strains apevident risks to an otherwise positive out- peared to be developing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

In keeping with the Committee's usual Ai FINANCIAL AND BUSINESS STATISTICS practice, the members contemplated that A3 Domestic Financial Statistics operations might be adjusted during the A42 Domestic Nonfinancial Statistics intermeeting period toward implementing A50 International Statistics somewhat greater or somewhat lesser restraint on reserves if monetary growth A65 GUIDE TO TABULAR PRESENTATION, should prove to be significantly faster or STATISTICAL RELEASES, AND SPECIAL slower than targeted for the current quarter. TABLES In the view of most members, the implementation of open market operations A66 BOARD OF GOVERNORS AND STAFF should be equally sensitive to the potential need for greater or lesser restraint over the A68 FEDERAL OPEN MARKET COMMITTEE weeks ahead. Any such adjustment should AND STAFF, ADVISORY COUNCILS not be made automatically but should be undertaken only after an appraisal of the A70 FEDERAL RESERVE BOARD strength of economic activity and inflation- PUBLICATIONS ary pressures, and evaluations of conditions in financial and banking markets and the A73 INDEX TO STATISTICAL TABLES rate of growth in total domestic nonfinancial debt. A75 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES 651 LEGAL DEVELOPMENTS Amendments to Regulation L; various bank A76 MAP OF FEDERAL RESERVE SYSTEM holding company, bank service corporation, and bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 25, For the near term, the prospects for continuing 1984, pursuant to the Full Employment and good gains in economic activity appear favor- Balanced Growth Act of 1978.' able. Consumers seem to be willing to spend, and they have the wherewithal to do so. The rising trend of contracts and orders points to further THE OUTLOOK FOR THE ECONOMY sizable increases in business plant and equipment spending. And inflation should remain rela- As reviewed in later sections of this report, the tively subdued in the period immediately ahead, nation's economy in the first half of 1984 was given the recent behavior of labor and material characterized by marked strength in sales, pro- costs. duction, and employment, and by relatively low However, as we look beyond the near term, inflation. Moreover, economic activity still ap- the stresses and imbalances in the economy give peared to have substantial forward momentum at rise to significant uncertainties in assessing the midyear, and the strong growth of the U.S. economic and price outlook and pose substantial economy was helping to encourage recovery challenges for public policy. The members of the abroad as well. Amid the favorable overall per- Federal Open Market Committee recognized this formance, however, some important structural fact as they prepared their economic projections imbalances and financial strains were apparent for the remainder of 1984 and for 1985 at their that need attention lest they impair the sustaina- meeting earlier this month, emphasizing that the bility of orderly growth. In particular, extraordi- probability of maintaining highly satisfactory nary increases in domestic demand have been accompanied by a further deterioration of our Economic projections for 1984 and 19851 trade and current account deficits, which has FOMC members and contributed to dangerous protectionist pres- other FRB presidents sures. The persistent strength of the dollar in IItteemm foreign exchange markets has helped to keep R-ge terfdency inflation quiescent, but that strength has been 1984 dependent on a pattern of massive capital inflows. Interest rates, under pressure from the PPeerrcceenntt cchhaannggee,, ffoouurrtthh qquuaarrtteerr ttoo ffoouurrtthh qquuaarrtteerr combined credit demands of the federal govern- N R N Ree oo aa mm ll ii GG nnaa NN ll PP GG NNPP 99VVii 66 tt tt oo oo 11 77 11 ''//zz 66 11 VV 00 ** '' //22 tt oo tt oo 66 33 11 //44 11 ment and the rapidly growing private sector, IIImmmpppllliiiccciiittt dddeeeffflllaaatttooorrr fffooorrr GGGNNNPPP 33!!//44 ttoo AAVVii AA ttoo AAVVii have risen from what already were high levels AAAvvveeerrraaagggeee llleeevvveeelll iiinnn ttthhheee fffooouuurrrttthhh qqquuuaaarrrttteeerrr,,, historically, adding to stresses on some sectors pppeeerrrccceeennnttt UUUnnneeemmmpppllloooyyymmmeeennnttt rrraaattteee 66VVii ttoo 77''//44 6633//44 ttoo 77 of the U.S. economy and on heavily indebted foreign countries. As labor and capital resources 1985 have become much more fully utilized, and as PPPeeerrrccceeennnttt ccchhhaaannngggeee,,, fffooouuurrrttthhh qqquuuaaarrrttteeerrr tttooo real growth has continued exceptionally rapid, fffooouuurrrttthhh qqquuuaaarrrttteeerrr NNNooommmiiinnnaaalll GGGNNNPPP 6633//44 ttoo 99 VVii 88 ttoo 99 the possibility of demand pressures contributing RRReeeaaalll GGGNNNPPP 22 ttoo 44 33 ttoo 33''//44 Implicit deflator for GNP 33''//:: ttoo 66''AA 55VV** ttoo 55MM to renewed inflationary tendencies has become a Average level in the fourth quarter, concern to many. percent Unemployment rate 66''//44 ttoo IIVV** 66VV22 ttoo 77 ^ 1. The administration has yet to publish its Mid-Session Budget 1. The charts for the report are available on request from Review document, and consequently the customary comparison of Publications Services, Board of Governors of the Federal FOMC forecasts and administration economic goals is not included in Reserve System, Washington, D.C. 20551. this report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610 Federal Reserve Bulletin • August 1984 performance could only be assured by timely to VA percent next year and some further decline decisions in a number of public policy areas. In in the unemployment rate. The Committee exformulating its own policy plans, the Committee pects price increases to be somewhat larger in agreed that, while flexibility and sensitivity 1985 than this year, with the central tendency of might be required in conducting monetary policy members' forecasts being 5!/4 to 5!/2 percent, on during this crucial period, Federal Reserve poli- the assumption that the dollar would remain in cy would need to remain basically oriented to- the trading range of the past year or so; the ward encouraging growth in a context of main- expectation of some pickup in price increases in taining progress over time toward price stability. fact partly reflects the assumption that the infla- The specific monetary objectives outlined in the tion-damping influence of dollar appreciation will next section provided part of the assumptions abate, but on the basis of past experience some underlying the projections. cyclical pressures on wages and prices might also At this time, the members of the FOMC (in- be anticipated as a result of reduced slack in cluding those Reserve Bank presidents who are labor and product markets. not at present voting members) generally foresee The behavior of the dollar in foreign exchange appreciable gains in economic activity over the markets is only one of the uncertainties in the remainder of 1984, but with growth of real gross outlook for 1985. Strains in financial markets national product less rapid than in the first half of have been aggravated by the historically large the year. While clear evidence of substantial current and prospective federal budget deficits, moderation in the pace of expansion is still and international debt problems will continue to limited, some slowing seems likely in light of require attention. With respect to the federal some softening of demand in the housing market, budget, Committee members are assuming that the probable tendency for inventory investment the Congress and the administration will soon to level off after a sharp surge in the first half, complete action on a series of measures that and other factors. The central tendency of Com- represent an initial "down payment" toward mittee members' forecasts is for an increase in reducing current and prospective federal budget real output of about 6V2 percent for the year as a deficits. Although no specific assumptions were whole. The unemployment rate, which averaged made regarding further deficit-reducing steps in about IV2 percent in the second quarter of 1984, 1985, it was recognized that additional, substanis expected to fall further in coming months, tial budgetary actions will be needed to enhance although much will depend on the highly uncer- the prospects for sustained, orderly economic tain behavior of labor force participation rates growth. and productivity growth, as well as on the strength of demand in the economy. The implicit deflator for gross national product is expected to THE FEDERAL RESERVE S OBJECTIVES rise slightly faster than in the first half of 1984, FOR GROWTH OF MONEY AND CREDIT but even so, the central tendency of Committee members' inflation forecasts shows an increase The Federal Open Market Committee has refor the year that—at around AXA percent—would viewed its target ranges for 1984 and established be only slightly above the 1983 rise and would be tentative ranges for 1985 in light of its objective lower than generally expected at the start of this of achieving sustained growth in the context of year. continuing progress toward reasonable price sta- Members of the FOMC believe that growth in bility over time. The behavior of Ml and M2 in activity is likely to continue in 1985, though at a the first half of 1984 was broadly consistent with slower pace. That slower pace would be satisfac- the Committee's expectations and objectives. tory to the extent it reflected the settling of the Although difficulties in anticipating demands for economy into a sustainable pattern of longer-run various measures of money and credit under expansion after a rebound from an exceptionally changing economic circumstances remained, deep recession. Specifically, the central tenden- partly reflecting the new deposit accounts introcy of FOMC forecasts calls for real growth of 3 duced in the recent period of deregulation and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 611 changing financial practices, no developments The Committee also discussed the ranges for were foreseen that would call for changes in the the aggregates to be established on a tentative 1984 targets for Ml and M2. Consequently, the basis for 1985. The Committee reaffirmed its Committee reaffirmed the existing target ranges intention to lower over time growth of money for 1984 for those aggregates. and credit to rates appropriate to progress to- M3 expanded above its target range and do- ward price stability in an environment of sustainmestic nonfinancial sector debt ran well above its able economic growth. Consistent with these monitoring range during the first half of the year. goals, the FOMC established tentative ranges for The unexpectedly brisk expansion of spending Ml and M2 that were somewhat below those for appears to be a factor influencing credit expan- 1984. For Ml, the upper limit was lowered one sion. But in addition, this rapid growth is partly percentage point, and the range was set at 4 to 7 attributable to the unusual amount of corporate percent. For M2, the upper limit was lowered mergers and buyouts, which also have led to a one-half point, and a tentative range of 6 to 8V2 sharp reduction in corporate equity shares out- percent was established. standing. Some of this rapid debt expansion may The width of the Ml range was brought more have influenced M3, as banks issued CDs, for in line with the dimensions of the ranges for the example, to finance credit expansion, though it is other aggregates. This reflected experience over always difficult to evaluate how institutions or the past year in which the behavior of Ml has depositors would have behaved if circumstances been more consistent with previous cyclical pathad differed. terns than was the case in the recent recession. It appears that the factors that led to growth in Consequently, the Committee felt that it would M3 and in debt above the upper limits of their be appropriate to give roughly equal weight to all ranges in the first half could be less important of the monetary aggregates in implementing poliduring the second half. Credit flows associated cy. Nonetheless, it was recognized that uncerwith corporate acquisition activity should dimin- tainties remained about the behavior of Ml, as ish, partly because of higher prevailing interest well as of the other aggregates, in periods of rates and partly because of greater caution on the changing market conditions. For instance, part of lenders in evaluating the soundness of should market interest rates change consideraproposed transactions. It also seems likely that bly, it is possible that funds would flow quickly growth of household spending and consumer and into or out of such fixed interest deposits as mortgage credit demands will moderate some- NOW accounts, leading to sizable movements in what. However, given the levels of the money Ml—but, with limited experience to date with and credit aggregates at midyear, it is unlikely the present account structure, the extent of these that M3 and debt will be within their ranges by movements cannot be projected with confidence. year-end, although some deceleration toward the Moreover, the process of financial deregulation upper limits of the ranges is expected to occur. continues. At the beginning of 1985, the mini- Under the circumstances, the Committee con- mum denomination for Super NOW accounts sidered the question of whether increases in the and MMDAs is scheduled to decline from $2,500 ranges for 1984 for M3 and domestic nonfinancial to $1,000; it was assumed that this change will sector debt would be appropriate. On balance, have no more than a minimal impact on Ml and the Committee was of the view that the broad M2. Should legislative action permit interest on direction of policy would best be communicated reserves or on demand deposits, this interest by retaining the current range for M3 and the would tend to affect—perhaps significantly—the associated monitoring range for domestic nonfi- demand for monetary aggregates, particularly nancial sector debt. While the Committee antici- Ml. pated growth somewhat above the ranges for the The Committee retained for 1985 the current year as a whole, it was felt that higher "target" target range for M3 and the current monitoring ranges would provide an improper benchmark range for domestic nonfinancial sector debt. As for evaluating desired longer-term trends in these noted above, these aggregates might be someaggregates. what above their ranges in 1984. Thus, growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

612 Federal Reserve Bulletin • August 1984 next year within their ranges would represent an gross national product accelerated to an annual actual slowing from this year's pace. The Com- rate of almost 9 percent. Employment also inmittee noted that some deceleration in growth of creased rapidly, and the unemployment rate these aggregates is both desirable and likely, dropped to its lowest level in more than four reflecting a slowing in expansion of nominal years. Price increases continued to be relatively GNP and a drop in corporate merger activity. moderate. Still, business demands for external finance are In 1983, the economy had followed a path that likely to remain strong, and absent a substantial was fairly typical of previous postwar recoverimprovement in the stock and bond markets ies; with the continued rapid growth of activity in would tend to continue to be concentrated at 1984, the current expansion has proved stronger banks and in short-term credit markets generally. than during comparable cyclical periods since Although household borrowing is expected to World War II, the only exception being the moderate somewhat in 1985, state and local period of the Korean war buildup. Real GNP has government borrowing may be heavier than in grown faster, and the levels of economic slack 1984, and the federal budget implies the continu- have declined more rapidly, than in the usual ation of exceptionally large Treasury borrowing. expansion. In addition, real gross domestic In its discussion, the Committee noted that spending rose even more rapidly than production only limited progress has been made recently in during the first half—about 10VA percent at an reducing federal budget deficits, and that current annual rate—and was reflected in a surge in the and prospective structural deficits remain huge. demand for imports as well as strong demands The massive fiscal stimulus and credit demands for the goods and services being produced doassociated with these structural deficits will tend mestically. These gains, of course, followed a to hold interest rates at high levels. Further deep recession. The civilian unemployment rate progress in lowering the deficit would help to at midyear—at just over 7 percent—had dropped relieve credit market pressures. about 33/» percentage points from its peak, but is The Committee felt that implementation of still above "full employment" levels. The capacmonetary policy would require continuing ap- ity utilization rate in manufacturing is slightly praisal of the progress of economic activity and below the postwar average. prices and of conditions in domestic and interna- The strong growth, reduced unemployment, tional financial markets—especially in light of and more stable prices of the past year and a half the sensitive state of these markets and of a have been reflected in rising productivity and number of economic sectors. The Committee higher real incomes for most Americans. After emphasized, however, the importance of appro- the immediate hardships associated with the repriate restraint in monetary and credit growth. A cession, progress toward our long-range goals good start has been made in reversing the debili- has been apparent. Even so, the economy still tating trends of rising inflation and languishing faces a number of serious problems and, in some productivity that plagued our economy for so respects, these problems have grown more wormany years. But monetary vigilance—in combi- risome over time. During the current expansion, nation with determined action to reduce the there has been an enormous increase in federal federal presence in the credit markets—is essen- debt and an unprecedented deterioration in our tial to the achievement of durable reductions in balance of trade. A number of domestic producinterest rates, overall financial and economic ers have not shared fully in the expansion, and stability, and sustained growth of the economy. many developing nations still are burdened by large external debts. Concern about financial stress in both the domestic and international THE PERFORMANCE OF THE ECONOMY economies has heightened this year as interest IN THE FIRST HALF OF 1984 rates have risen from levels that already were high by historical standards. The economic expansion gained further momen- Widespread concern about the outlook for tum in the first half of 1984, as the growth of real inflation also persists, despite the continuation of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 613 favorable wage and price patterns through the Spending for housing also continued to adfirst half of 1984. One cause for concern is that vance in the first half of 1984, thereby maintaingrowth in the demands placed on the economy ing the vigorous cyclical expansion that was could continue at a pace that, if maintained for apparent during 1983. Housing starts spurted to a long, would damage the prospects for sustaining six-year high in January and February, and outreal growth, achieving better balance in financial lays for residential construction rose in both the markets, and making further progress toward first and second quarters. All told, the rebound in price stability—central objectives of public poli- housing activity over the past year and a half has cy. Inflationary pressures would be intensified if been stronger than generally expected and has the exchange value of the U.S. dollar were to exceeded the gains experienced during most predecline sharply from its current high level in the vious housing recoveries. During this period, face of unprecedentedly large current account demographic influences and relatively stable deficits. These concerns are importantly related house prices provided underlying support for to the strains on real and financial markets housing demand, and innovations in housing stemming from federal budget deficits, actual finance helped to soften the effect of high mortand potential, which, among other implications, gage interest rates. While home sales appeared to now complicate the conduct of monetary policy. be moving lower toward midyear, there should continue to be a supporting influence in housing markets from some of the same factors that have The Household Sector helped to boost activity to a high level during the early phases of the expansion. Strength in the household sector continued to Household balance sheets are no longer provide a strong impetus for expansion in the strengthening as they did during the recession first half of 1984. Personal income, in nominal and early phases of the recovery. Some of the terms, rose at an annual rate of about 103/4 earlier gains in stock market wealth have been percent during the first half of the year, and with reversed during this year's decline in stock inflation low, most of that nominal gain translat- prices, and household debt has been growing ed directly into sizable increases in real purchas- much more rapidly than in 1983. In addition, ing power. In addition, despite the recent up- there are troubling aspects to some of the recent swing in interest rates and some decline in stock patterns of household credit growth. Consumer market wealth, consumers remain generally opti- credit has been rising much faster than income mistic about future business conditions. Reflect- this year, and some of the recent innovations in ing that optimism, they have continued to con- mortgage lending, while supportive of current sume heavily out of current income and have housing activity, also increase the level of borbecome increasingly willing to take on higher rower exposure to adverse movements in interlevels of debt. As a result, personal consumption est rates or unexpected shortfalls in future expenditures, in real terms, rose rapidly in the household incomes. first half of 1984—at an annual rate of nearly 6 percent. The Business Sector Consumer spending for new cars was particularly robust in the first half of 1984 as unit auto Economic conditions in the business sector have sales rose to the highest level since mid-1979. strengthened during the past year and a half. With quotas limiting the imports of foreign mod- Output, sales, profits, productivity, and investels, most of the rise in spending was channeled ment spending have all been rising throughout into sharply higher purchases of domestically the expansion. By the first quarter of 1984, afterproduced automobiles, and in light of strong tax profits in the domestic nonfinancial corporate sales, many domestic auto plants operated near sector were about twice the levels of late 1982. full capacity in the first half of 1984. Auto output, Fixed investment spending, in real terms, has in real terms, was about 50 percent above the risen roughly 25 percent during the first year and depressed level of 1982. a half of the recovery. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

614 Federal Reserve Bulletin • August 1984 The rise in business investment spending dur- ment of equity so far this year. The business ing the current expansion has been much stron- sector has remained heavily reliant on short-term ger than generally expected. Unused capacity credit as its source of finance and is still relativewas at a particularly high level when the expan- ly vulnerable to adverse interest-rate developsion began and appeared likely to inhibit new ments. capital outlays for some time. However, as the Financial problems of a more severe nature are economic expansion started to look more dura- evident in particular sectors of the economy. In ble during the course of 1983, businesses began farming, for example, export developments have rushing to modernize old units or to add to continued to be discouraging, land prices are capacity. In addition, other factors, such as the falling in important agricultural areas, and many 1982-83 stock market boom and changes in tax farmers who had accumulated large volumes of laws, contributed to the ebullience in investment debt during the more inflationary years are, at spending. The widespread adoption of new com- present, facing severe financial strains. puter-based technologies, which was evident even during the recession, also has continued to provide an element of strong support in the The Government Sector capital goods sector, and, more generally, businesses have recognized a need to invest in new With the cyclical strengthening in economic actechnologies in order to remain competitive with tivity, federal tax revenues have increased, and foreign producers. Reflecting these influences, the rate of growth in federal spending for income spending for new capital equipment recorded support programs has slowed markedly. Neverparticularly strong gains during the past year and theless, federal debt has continued to accumulate a half, and spending for structures also has at an enormous rate, reflecting both an underlystrengthened markedly in recent quarters. ing uptrend in federal outlays and the series of Inventory accumulation during 1983 was less tax reductions that took effect during the past rapid than in the early phases of many previous three years. Federal debt outstanding has risen recoveries, but, in light of lengthening delivery more than 80 percent since the end of 1979. Net times and the sustained strength of sales, busi- interest payments on the debt have more than nesses appear to have become more willing to doubled over that same period, rising to an rebuild stocks in the first half of 1984. In real annual rate of about $110 billion by the first half terms, business inventories rose at an annual rate of 1984. Current prospects are for further sizable of more than $30 billion in the first quarter of the increases in both outstanding debt and net interyear, and a further sizable accumulation was est payments in coming years. apparent in the second quarter. Even so, stocks These spending and revenue policies of the in most industries still appear lean relative to the federal government have provided an extraordirecent pace of sales. nary stimulus to aggregate demand for goods and Despite the impressive improvement in activi- services, but they also have contributed to high ty over the past year and a half, businesses have interest rates, unsettled conditions in financial not restored their financial ratios to positions markets, and a startling deterioration in our comparable to pre-inflation and pre-recession balance of trade. Recognizing the dangers posed levels. As is typical in the early phases of eco- by current policies, the Congress and the adminnomic expansions, many businesses began mov- istration have sought appropriate ways to reduce ing to strengthen their balance sheets in 1983, but federal budget deficits, but the actions taken to the period of balance sheet restructuring in the date are only a limited beginning toward dealing current expansion appears to have been unusual- with the full magnitude of the problem. ly brief. A downturn in stock prices this year has The underlying thrust toward higher federal made equity financing less attractive, and rising spending has been obscured in some of the long-term interest rates have inhibited bond fi- recent data. For example, in real terms, federal nancing. Mergers and so-called "leveraged purchases of goods and services in the first half buyouts" have resulted in a disturbing net retire- of 1984 were slightly below year-earlier levels as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 615 outlays early in the year were depressed by an through its impact on relative prices, has been unusually rapid liquidation of the farm inven- both a depressant of exports and a strong stimutories held by the government's Commodity lant to import growth. Credit Corporation. For other goods and ser- Recent trade developments also reflect the vices, federal purchases in the first half were sharply divergent growth patterns in the world nearly 4 percent more than a year earlier, after economy. The exceptional strength of the U.S. adjustment for inflation. Real outlays for defense economy over the past year and a half has been were up about 51/4 percent from a year earlier. manifested partly in a surge of import buying. In The financial situation of state and local gov- contrast, the economic recovery in other indusernments has improved markedly during the ex- trial nations has been substantially less rapid pansion. In real terms, state and local outlays, than in the United States, and exports to those though up moderately in the first half of 1984, nations have lagged. Many developing countries still have shown only a small real gain over the that are burdened with huge external debts have, past three years as a whole; these cautious necessarily, sharply constrained imports, includspending patterns, coupled with increased tax ing those from the United States. revenues associated with the expansion, have resulted in large operating surpluses for state and Labor Market Developments local governing units as a whole. Labor market developments in the first half of 1984 were shaped both by the vigorous expan- The Foreign Sector sion in economic activity and by widespread restraint on increases in nominal wages and • »• f After falling sharply in 1981 and 1982, the volume salaries. Employment rose rapidly, work schedof U.S. exports rose moderately during 1983 and ules lengthened, and unemployment declined. increased further in the early part of this year. Thus far in the current expansion, payroll em- However, imports have grown much faster, and ployment has risen a little more rapidly than in as a result the trade deficit increased from an most previous postwar recoveries; the average annual rate of roughly $40 billion in the first workweek, another indicator of labor demand, quarter of 1983 to a rate of more than $100 billion has increased much faster than usual. in the first quarter of 1984. The U.S. current The slack economic conditions during the reaccount deficit registered a corresponding shift cession and the early phases of the recovery may during this period, with the first-quarter deficit have discouraged many persons from seeking reaching an annual rate of nearly $80 billion. new jobs, but as the expansion has lengthened Data through May indicate that the trade balance into 1984, new jobseekers started entering the remained weak into the second quarter. The labor force at a faster pace. However, employmagnitudes of these trade and current account ment opportunities rose even faster and, as a deficits are without historical precedent. result, unemployment rates continued to fall. By While the gains in exports in recent quarters June the civilian unemployment rate had have not fully reversed the declines that oc- dropped to nearly 7 percent, its lowest level curred during the last recession, imports have since April 1980. surged far above their pre-recession peak. A Notwithstanding the general improvement in major influence on these trade patterns has been labor market conditions, there are wide disparithe tremendous appreciation in the exchange ties in the job situations across different regions. value of the U.S. dollar in recent years. Buoyed Unemployment is still quite high in many of the by high U.S. interest rates and an eagerness of traditional industrial states, and problems of foreigners to invest in dollar-denominated assets, longer-term unemployment remain especially the dollar rose about 45 percent against other acute in communities where plants were permacurrencies from late 1980 to late 1983 and, after nently closed during the recession. Jobless rates turning down temporarily in early 1984, rose to for blacks and teenagers also remain exceptionalnew highs around midyear. This appreciation, ly high. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Federal Reserve Bulletin • August 1984 Recent wage developments appear to have year and a half of the expansion. The consumer been affected both by changes in behavior that price index rose at an annual rate of about 4Vi first were evident during the recession period percent during the first five months of 1984; the and by the moderation of price increases. Nomi- price deflator for gross national product was up nal wage increases, which were running close to at a rate of only 33/t percent in the first half. The 10 percent per year at the start of the decade, fell rate of increase in the CPI was slightly above the sharply in 1982 as unemployment rose to nearly pace experienced during 1983; the GNP deflator 11 percent of the labor force. As the economy has risen at the same rate this year as in 1983. has expanded, the rate of wage increase has Producer prices, after rising only fractionally in remained close to those lower levels. Year-to- 1983, increased at close to a 3 percent rate in the year increases in the employment cost index, a first half of this year; basic commodity prices fairly comprehensive measure of wage and bene- have been declining in recent weeks, reversing fit change, held at about 53A percent from Sep- some of the sharp advances that occurred earlier tember 1983 through March 1984; the hourly in the expansion. earnings index, a measure of wage change for Taken together, these and other price data production and nonsupervisory workers, has suggest that inflation in the first half remained in slowed a little further in the first half of this year the range that has generally prevailed since early to an annual rate of about 3'/4 percent. 1982 and is running at little more than one-third By the 1970s, large annual increases in nomi- of the peak inflation rates of the period from 1979 nal wages had become almost automatic in a to 1981. Price behavior over the past year and a number of industries, thereby imparting strong half has been constrained by highly competitive momentum to the inflationary process. Howev- markets, as well as by the ample plant capacity er, as labor markets weakened in the early 1980s and labor resources generally available during and price expectations moderated, there were the recovery period. In addition, because of the marked changes in patterns of wage determina- sharp rise of the dollar in exchange markets, the tion. Outright declines in wages occurred in dollar prices of imported goods have increased many troubled industries, and workers in general only slightly thus far in the expansion and have became more concerned about job security than been a greater restraining influence on domestic about automatic wage increases. Workers and prices than in past expansions. managers alike took new interest in measures to Imbalances between supply and demand have improve productivity and to enhance competi- been an important influence on price developtiveness in foreign markets. ments in food and energy markets, sectors in With labor markets now tightening, a key which inflationary pressures had been particularquestion in the outlook is whether the recent ly acute in the 1970s. Because of spare capacity conservative patterns of wage determination will in world oil markets, a protracted war in the be maintained or, alternatively, whether there Persian Gulf has, to date, had little effect on the will be a reversion to the more inflationary prices of oil or petroleum products; consumer patterns of the previous decade. Important signs energy prices, in relative terms, have continued regarding the outlook for wages should emerge to decline this year. Similarly, the slack export later this year, as new collective bargaining nego- demand for U.S. farm products has helped to tiations get under way, including some in indus- damp price pressures in the food sector; despite tries in which economic conditions have the severe drought of last summer and a damagstrengthened markedly during the expansion. ing freeze this past winter, the rise in consumer food prices in the first half of the year was not much different from the general rate of inflation. Price Developments All told, the nation is enjoying a better price performance than for any other sustained period Inflation rates fell dramatically during 1982 in more than a decade. The fact that inflation and—by the standards of the past decade—have rates and underlying wage trends have remained remained relatively moderate through the first moderate during a particularly robust expansion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 617 is an encouraging development. However, there Growth of money and credit typically has been little price acceleration in the Percentage changes first two years of business expansions; the dan- Domestic gers have become greater in the later stages of Period Ml M2 M3 nonfinancial sector debt expansion. Moreover, while the foreign sector has provided an important restraining influence Fourth quarter to June 1984 7.5 7.0 9.7 13.le Fourth quarter to second on domestic prices thus far in the current expan- quarter 1984 6.7 6.9 9.7 13. le sion, that influence has been dependent on an Fourth quarter to fourth exceptionally strong dollar and a high level of quarter 1978 8.2 8.0 11.8 13.3 capital inflows from abroad. Thus, although cur- 1979 7.5 8.1 10.3 12.1 1980 7.4 9.0 9.6 9.6 rent price trends are favorable, important tests of 1981 5.1 9.3 12.3 9.9 progress toward greater price stability remain (2.5)' 1982 8.7 9.5 10.5 9.0 ahead. 1983 10.0 12.1 9.7 10.8 Quarterly growth rates 1983:1 12.8 20.5 10.8 8.9 2 11.6 10.6 9.3 10.4 3 9.5 6.9 7.4 11.8 4 4.8 8.5 9.8 10.3 MONEY, CREDIT, AND FINANCIAL MARKETS 1984:1 7.2 7.0 9.0 12.5 IN THE FIRST HALF OF 1984 2 6.1 6.8 10.2 13.3e Earlier this year, the Federal Open Market Com- 1. Ml figure in parentheses is adjusted for shifts to NOW accounts in 1981. mittee established specific growth objectives for e Estimated. the monetary and credit aggregates for 1984. These objectives were 4 to 8 percent for Ml, 6 to 9 percent for both M2 and M3, and 8 to 11 Even though, as 1984 began, there was some percent for domestic nonfinancial sector debt. evidence that the velocity of Ml was behaving The ranges were set Vi or a full percentage point more in accord with past patterns, the Commitbelow the ranges for 1983, to be consistent with tee decided that it would not yet be appropriate continued restraint on inflationary pressures to place full weight on that aggregate as a policy while encouraging sustainable expansion in eco- guide and that its growth would need to be nomic activity. interpreted in light of growth in the other aggre- In setting these objectives, the FOMC as- gates. Moreover, growth of all the aggregates sumed that special factors that had contributed needed to be appraised in the context of the to strong demands for money in 1982 and 1983 outlook for economic activity and prices, and would not be nearly so important in 1984. The overall credit market developments. massive shifts of funds brought about by the In the first part of the year, credit demands introduction of the new deposit accounts were proved to be exceptionally strong, reflecting the largely completed last year. The continuing continued rapid expansion in private sectors of strength of the economic rebound and the size of the economy, coupled with sustained, large fedfederal budget deficits made it appear that fur- eral borrowing needs. Indeed, growth in the debt ther substantial declines in interest rates, such as of domestic nonfinancial sectors accelerated in those that had accompanied the recession in 1982 the first quarter and remained at an advanced and had contributed to sharp declines in mone- pace of around 13 percent at an annual rate tary velocity, were unlikely over the near term. through the first half, significantly above the Moreover, greatly improved prospects for em- range set by the FOMC at the beginning of the year. The debt of private sectors increased at ployment and incomes seemed to be reducing the about a \2Vi percent annual rate in the first half uncertainties that earlier had swelled demands of the year—some 41/2 percentage points more for precautionary balances. Consequently, the than last year—while federal debt expansion relationships of the monetary aggregates to inremained strong at an annual rate of around 143/4 come and interest rates were expected to fall percent. more into line with historical norms. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin • August 1984 In appraising credit growth over the first half whereas they normally rise much less than shortof the year, account needs to be taken of an term rates. unusually large volume of merger activity. Sev- The Federal Reserve in implementation of eral large mergers and many smaller ones were monetary policy added moderately to pressures financed largely with debt and led to liquidation on the reserves of the banking system around the of a sizable amount of equity. Such mergers are end of the first quarter to maintain appropriate estimated to have accounted for roughly one growth of money and credit. To meet credit percentage point of the annual growth rate of demand and deposit growth, institutions had to domestic nonfinancial sector debt in the first half turn somewhat more to the discount window; of the year. borrowing for adjustment and seasonal purposes Much of the debt expansion was concentrated at the window rose to around $1 billion in March in short-term markets. Growth in bank credit and April after averaging only about $640 million accelerated to a 14 percent annual rate in the first during the first two months of the year. The quarter of the year, though it slowed somewhat narrower monetary aggregates—Ml and M2— in the spring as banks liquidated securities to a have remained within their ranges. However, greater extent in accommodating loan demands. under the pressure of strong public and private Large amounts of credit also were raised in the credit demands, both M3 and total domestic commercial paper market. Corporate borrow- credit have been expanding at a more rapid rate ers—which as a group had not had any signifi- than anticipated. cant need for net external financing in the previ- As reserve pressures increased, growth of ous two years—this year began to experience a total reserves and the monetary base slowed rise in the financing gap, as spending for inven- substantially during the early spring. Part of the tories and plant and equipment came to outpace slowing in growth of total reserves reflected the internally generated funds. return of excess reserves to more usual levels While borrowing in short-term markets partic- after they had expanded sharply in February, at ularly strengthened, the demand for funds in the time of the introduction of contemporaneous longer-term debt markets remained large relative reserve accounting. In May and June, growth in to the supply of savings in those instruments. the reserve aggregates accelerated, partly re- Mortgage borrowing by households rose sharply, flecting the upward impact on required reserves and corporate bond issuance picked up some- of shifts in the deposit mix as banks relied what from its pace of the second half of last year. relatively more heavily on large time deposits Meanwhile, the federal government continued to and as government and interbank deposits also market a sizable amount of longer-term debt rose. The large borrowing by Continental Illinois obligations to meet its continuing large cash Bank over this period was offset in open market needs and to roll over maturing debt. On the operations by reduced holdings of U.S. governother hand, activity in the municipal bond mar- ment securities, so that borrowing by depository ket was subdued during the first half, at least by institutions apart from that bank remained close comparison with the past two years, reflecting a to the level reached in early spring. lapse in authority to issue mortgage revenue The federal funds rate rose from about 9'/2 bonds and anticipated legislative limits on indus- percent in the early part of the year to around 10 trial development and student loan bonds retro- percent in early spring and to around 11 percent active to January. in June and early July. The Federal Reserve The strength of total credit demands exerted discount rate was raised from 8V2 to 9 percent in upward pressures on interest rates. These pres- April. While the rise in the funds rate—which is sures were reflected in a rise of about 1 to 2 sensitive to banks' day-to-day demands for repercentage points in short-term rates over the serves relative to supply—in part reflected somefirst half of the year. Long-term rates also rose what greater restraint by the Federal Reserve in about that amount, reflecting in part the weight the provision of reserves through open market of Treasury financing and uncertainties about the operations during the spring, it also reflected the budgetary and economic outlook generally, increased willingness of banks to pay more for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 619 federal funds as credit demands remained strong, about 10 percent below an extrapolation of its and as other sources of funds became relatively pre-1982 trend—suggesting that at least some expensive. relatively permanent, sizable increase in demand The loss of confidence in the Continental Illi- for Ml may have stemmed from the impact on nois Bank and well-publicized problems related the public's money preferences of the sharp drop to ongoing international debt negotiations in May of market interest rates in 1982 as inflation led to a widening in the spread of yields on abated, given the comparatively low opportunity certificates of deposit issued by depository insti- cost of holding Ml that developed with the larger tutions over Treasury securities of similar matu- role of interest-bearing transaction accounts in rity. Indeed, investors increasingly seemed to that aggregate. show a preference for government securities Growth in M2 also has been well below that of relative to private credit instruments generally. GNP over the first half of 1984. To some degree, More recently, yield spreads have narrowed, as expansion in M2 appears to have been restrained progress has been made on debt questions and by heavy inflows to individual retirement acthe Continental Illinois situation has remained counts (IRAs) and Keogh accounts, which are unique and contained. excluded from money stock measures. Inflows to Ml has grown generally in the upper half of the IRA and Keogh accounts at depository institu- 4 to 8 percent range adopted by the Committee. tions alone surged more than $20 billion over the From the fourth quarter of 1983 through June of first half of the year, much of which likely has this year, that aggregate grew at a IVi percent not yet been taken into account by seasonal annual rate, close to the rate of growth during the adjustment factors. The composition of growth second half of 1983, but significantly lower than in the nontransaction component of M2 has during 1983 as a whole. Growth in currency, tended in recent months to shift toward small demand deposits, and travelers checks (essen- time deposits, perhaps reflecting a willingness of tially the narrow measure of money used before investors to sacrifice liquidity in order to receive 1980) has remained near last year's 5Va percent higher yields. At the same time, the fact that pace. depository institutions have lagged in raising their offering rates on time deposits relative to However, other checkable deposits (OCDs) market interest rates probably has encouraged have decelerated sharply from the nearly 30 some savers to invest in market instruments percent rate of growth of 1983 to around 14 instead. percent this year. OCDs—primarily consisting of NOW accounts—are interest earning, and tend However, M3 growth—like growth in total to be used not only for transactions but also as a debt—has pushed above the upper end of its repository for liquid savings. This year's slowing range. This aggregate comprises, in addition to apparently reflects a waning of the motives that all of the assets in M2, large CDs and certain led to heavy demands for liquid assets in 1982 other borrowings by depository institutions. and 1983, as well as recent increases in the Thrift institutions have continued to issue large opportunity cost of holding such balances as CDs at a rapid pace, owing to heavy acquisitions interest rates on other instruments have risen. of mortgages and mortgage-backed securities While Ml growth has slowed relative to last and moderate growth of core deposits. Loan year, its income velocity—measured by the ratio growth at commercial banks strengthened furof gross national product to money—increased ther in the first half of 1984. Commercial banks, rapidly, given the strength of the economy and which last year ran off about $40 billion of large associated demands for money and credit. Over CDs in response to the flood of money market the first half of the year the income velocity of deposit account money and sluggish loan de- Ml has increased at about a 5Vi percent annual mand, increased outstandings $25 billion in the rate, a little more rapid than usually has occurred first six months of the year to fund the surge in in the second year of an expansion. Nonetheless, loan demand. Growth in M3 would probably the level of Ml velocity still remains about 3 have been even more rapid had not commercial percent below the peak reached during 1981, and banks supplemented deposit funds by heavy bor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin • August 1984 rowing from foreign offices, amounting to $15 been originating and holding a growing volume of billion over the first half of 1984. consumer loans. Both of these types of assets In general, the rapid further expansion of the carry yields that more closely track current mareconomy in the first half of 1984 has been fi- ket yields than do long-term fixed rate mortnanced by an accelerated rise in velocity of gages. Despite the shift away from origination of money and by large-scale extensions of credit, all fixed-rate mortgages, however, the asset stocks accompanied by further increases in interest of thrift institutions remain heavily concentrated rates and by an unusually large share of credit in such instruments, leaving industry earnings raised abroad. In the process, greater stresses, or vulnerable to rising interest rates. their potential, have been evident this year in the The foreign exchange value of the dollar on a financial position of some economic sectors. trade-weighted basis declined somewhat during Depository institutions as a group have not the first few months of the year, but has since been under pressure from disintermediation as retraced all of its decline and more, establishing they often were in the past when interest rates bilateral record highs against several currencies. rose because regulatory ceilings on yields pay- The dollar's rebound appears partly related to able by depository institutions have largely been increases in dollar interest rates relative to yields removed. Thus, deposit flows have been well on assets denominated in foreign currencies. maintained. Still the profits of banks and thrifts Demand for the dollar may have been spurred deteriorated in the first half of 1984—in the case also by the favorable inflation performance in the of banks, partly because of continuing problem United States and a perception that monetary loans, and in the case of thrifts, mainly because policy will continue to resist inflationary presof rising interest rates. sures. In addition, part of the dollar's strength With regard to the corporate business sector, may reflect labor relations problems that have the reduction in equity shares outstanding thus affected European currencies, as well as military far this year, together with the concentration of conflicts in the Mideast. Reports of a widening overall borrowing in short-term market sectors, trade deficit may have weakened the dollar, but has in some degree reversed the progress made on balance the forces mentioned above more last year toward stronger balance sheet posi- than offset the effects of the deficit. tions. In the household sector, rapid growth in The large net inflow of funds that foreigners consumer credit and in mortgage debt, especially have been willing to place in the United States adjustable-rate mortgages, has increased the ac- has been an important factor enabling credit tual and potential share of income devoted to markets to finance the faster rise in private debt service. borrowing needs, while still accommodating the There has been a sharp upswing in use of unusually large and continuing federal credit adjustable-rate mortgages, most of which are demands. Thus, the imbalance, at current intermade at initial rates well below the cost of fixed- est rates, between domestic savings and domesrate financing, that has tended to support hous- tic demands on that saving from the federal ing activity and mortgage lending. Nearly two- budgetary deficit and private spending for investthirds of conventional mortgages originated by ment has been accommodated by a large further savings and loan institutions in early 1984 were rise in debt owed to foreigners. of the adjustable-rate variety. Thrifts also have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

621 Staff Studies The staffs of the Board of Governors of the indicate concurrence by the Board of Governors, Federal Reserve System and of the Federal by the Federal Reserve Banks, or by the mem- Reserve Banks undertake studies that cover a bers of their staffs. wide range of economic and financial subjects. Single copies of the full text of each of the From time to time the results of studies that are studies or papers summarized in the BULLETIN of general interest to the professions and to are available without charge. The list of Federal others are summarized in the FEDERAL RESERVE Reserve Board publications at the back of each BULLETIN. BULLETIN includes a separate section entitled The analyses and conclusions set forth are "Staff Studies" that lists the studies that are those of the authors and do not necessarily currently available. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN THE UNITED STATES Thomas D. Simpson and Patrick M. Parkinson—Staff, Board of Governors Prepared as a staff study in mid-1984. The deregulation and market innovation of re- come or wealth—affecting the demands for moncent years, coupled with more volatility in finan- etary assets; and implications of lessened intercial markets, have markedly altered the behavior est rate sensitivity of money demand for setting of depository institutions and the public. Rate and adjusting objectives for monetary growth. ceilings on a growing array of retail deposit A variety of evidence examined in this study instruments first were linked to market interest suggests that, by enhancing the control deposirates and later removed. The relaxation of rate tory institutions have over their deposits and the ceilings has provided depository institutions with sensitivity of their interest costs to market rates, more control over their retail deposit base, but at deregulation of deposit rates has tended in some the same time has heightened the sensitivity of markets to increase reliance on price rationing their interest costs to market interest rates. and reduce the importance of availability consid- Moreover, the incentive for the public to reallo- erations; these developments are most evident in cate portfolios of financial assets in response to those sectors serviced by thrift institutions and variations in market rates has diminished greatly smaller-sized commercial banks—the instituas deposit rates have tended to move more tions that have been most dependent on retail closely with those in the open market. This paper deposits. However, these institutions account focuses on the implications of such develop- for a relatively small share of the overall credit ments for four general matters: implications of extended to the economy, and for some time the deposit deregulation for the cost and availability bulk of credit has flowed through institutions or of credit at depository institutions; implications open markets in which price considerations domof a burgeoning financial futures market for the inate. Thus this study concludes that any shift way commercial banks manage interest rate risk toward price rationing of credit in the economy and for the response of spending, principally likely has been minor, and that the degree to investment, to interest rate changes; implications which interest rates must vary to stabilize aggreof financial change for the scale variable—in- gate spending growth has not been altered signifi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin • August 1984 cantly. Another development that could affect enced more importantly by wealth considerthe response of the economy to interest rates is ations, as Ml balances have become a more the growing availability of financial futures mar- attractive repository of liquid assets. The broadkets and more active participation by commer- er money stock measures, which appear to be cial banks in those markets, a development that more heavily influenced by the stock of assets or provides investors with more opportunities to wealth, may also be undergoing change as a lock in interest costs. However, the presence of number of innovations have tended to enhance futures markets does not appear to have much the liquidity of various kinds of assets; as a bearing on the decision to invest: futures con- consequence, the role of a comprehensive wealth tracts affect the wealth position of holders, but measure may be expanding. likely affect the decision to invest only marginal- Finally, the tendency for money demand to ly at best. become less sensitive to open market rates sug- This study also examines how financial gests that objectives for longer-term monetary change, by affecting the liquidity of a wide range growth generally can conform more closely to of assets and the opportunity costs of monetary objectives for growth in spending. It also sugassets, may be influencing the scale variables gests that in the short run adjustments to the affecting the demand for monetary aggregates— monetary control mechanism may be needed to income or wealth—and their relative contribu- reestablish the historical relationships between tions to variations in monetary growth. Besides monetary and spending disturbances and interest being affected by transaction activity, the narrow rates and the economy. money stock measure (Ml) may now be influ- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

623 Industrial Production Released for publication August 15 goods was up 0.6 percent, reflecting a sharp gain in durables; production of nondurables was little Industrial production rose an estimated 0.9 per- changed. Autos were assembled at an annual rate cent in July following an upward revised gain of of 7.9 million units, compared with the rate of 7.8 0.9 percent in June. Increases in output in July million in June. Production of goods for the were widespread among products and materials. home—appliances and furnishings—advanced At 165.6 percent of the 1967 average, the July sharply. Output of business equipment increased index was 10.6 percent higher than a year ago. 1.2 percent in July following upward revised In market groupings, output of consumer gains of 1.7 and 1.8 percent in Mav and June 1967=100 1967 = 100 TOTAL INDEX 170 Products ouput 170 L / * 150 150 Materials ouput 130 130 MATERIALS 190 170 S Durable v 150 ' x / x S/. ^ r\ \t 130 110 90 190 INTERMEDIATE PRODUCTS Business supplies 170 150 — 7 » / \ / \ J \ ^ / Durable \ / \J - 130 130 Construction supplies' 110 110 1969-70=100 Annual rate, millions of units 1967 = 100 180 z AUTOS - 18 190 140 v Stocks 14 100 = 10 80 ><A ^ Sales - 60 Domestic assemblies \/ ^ 40 30 ( 1 1 ,1 1 1978 1980 1982 1984 1978 1980 1982 1984 All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: July. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin • August 1984 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Grouping 1984 1984 JJJuuulllyyy 111999888333 tttooo JJJuuulllyyy June July Mar. Apr. May June July 111999888444 Major market groupings Total industrial production 164.1 165.6 .5 .8 .4 .9 .9 10.6 Products, total 164.6 165.9 .4 .9 .5 .8 .8 9.9 Final products 162.7 164.0 .4 1.0 .6 1.0 .8 10.1 Consumer goods 162.9 163.8 .5 .7 .2 .7 .6 5.8 Durable 162.9 165.5 .4 -.6 -.5 .9 1.6 8.2 Nondurable 162.9 163.1 .6 1.3 .4 .7 .1 4.8 Business equipment . 179.6 181.8 .1 .8 1.7 1.8 1.2 18.6 Defense and space .. 133.4 135.1 .5 2.4 .0 .2 1.3 12.2 Intermediate products . 171.8 172.7 .7 .5 .2 .2 .5 9.2 Construction supplies 159.2 159.8 1.6 .3 -.1 -.2 .4 9.6 Materials 163.3 165.1 .6 .7 .2 .9 1.1 11.7 Major industry groupings Manufacturing 165.3 166.9 .4 .8 .5 .7 1.0 10.8 Durable .... 154.4 156.7 .6 .8 .5 .7 1.5 14.5 Nondurable. 181.1 181.8 .2 .8 .3 .8 .4 6.6 Mining 127.1 129.9 -.2 -.4 1.7 1.4 2.2 13.0 Utilities 185.1 183.8 2.0 1.5 -.1 1.4 -.7 4.4 NOTE. Indexes are seasonally adjusted. respectively. Over the last 12 months, produc- In industry groupings, manufacturing output tion of business equipment has increased 18.6 increased 1.0 percent in July. Production at percent. Output of supplies for construction and mines rose sharply, with an especially large business rose moderately in July. increase in coal output. Utility output, however, Total output of materials advanced 1.1 percent was off 0.7 percent from the unusually high levels in July following a gain of 0.9 percent in June and attained in June because of a decline in electriconly a small increase in May. Durable materials ity generation. gained 1.5 percent and nondurable materials, 1.0 percent; output of energy materials was unchanged overall. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

625 Statements to Congress Statement by Theodore E. Allison, Staff Director ing beyond which public confidence in our curfor Federal Reserve Bank Activities, Board of rency would be lost, with consequent deleterious Governors of the Federal Reserve System, be- effects on the financial systems and ultimately on fore the Subcommittee on Consumer Affairs and the economy. Coinage of the Committee on Banking, Finance Of growing concern are advances in reproand Urban Affairs, U.S. House of Representa- graphic technology that make it easier to manutives, July 24, 1984. facture high quality color reproductions. This development could have serious repercussions in I appreciate the opportunity to appear on behalf the areas of security printing and, in particular, of the Board of Governors of the Federal Re- currency printing. This threat has been conserve System to present our view on the pro- firmed by research conducted by Battelle Columposed "Currency Design Act." Under the pro- bus Laboratories on the possible impact of reposal, the Secretary of the Treasury could adopt cent and foreseeable advances in reprographics changes in the design for currency and coin only on counterfeiting activities. Battelle's first report after approval by the Congress. We appreciate was issued in January 1983, and a follow-up the fact that the proposed legislation reflects the report was prepared in August of that year. The desires of its sponsors to be kept informed about first report highlighted electrophotographic color this important area. In view of the Federal Re- copies as the main cause of concern because serve's role in the issuance and maintenance of these copies would make counterfeiting a crime currency, we welcome the opportunity to explain of opportunity. Battelle observed, too, that other the possible changes in the design of Federal traditional forms of counterfeiting would become Reserve notes that are being considered and why easier, cheaper, and of better quality. In its we believe such changes are desirable. second report, Battelle estimated that, with no As the nation's central bank, the Federal Re- improvements in the design of U.S. currency, serve is the issuer and caretaker of currency in there would be a significant increase in the circulation. Implicit in our currency-related du- possible level of counterfeiting activity. Most of ties is a concern for the quality and integrity of this threat would come from color copies. our currency. The Federal Reserve Banks and In response to this mounting counterfeiting Branches process—that is, receive, count, in- threat, the Federal Reserve, together with the spect, and either destroy or subsequently recir- Treasury Department, has been considering a culate—about 12 billion notes per year. number of alternatives that could be incorporat- In addition to ensuring high quality levels by ed into the design of Federal Reserve notes to destroying notes judged unfit for further circula- make it easier for the public to determine the tion, the Reserve Banks examine each note for authenticity of their currency. Other countries as authenticity. In order to preserve confidence in well are concerned about this problem and are our currency, a principle underlying our cur- taking measures similar to those that we are rency-processing operations is that counterfeit considering. notes must not be recirculated. To date, we have We support the decision of the Secretary of the been quite successful in this endeavor. As a Treasury last year to focus research and developresult of efforts by law enforcement agencies, ment on the areas of background colors, a securidepository institutions, and the public, the large ty thread, and an optically variable device. We majority of counterfeit notes are detected, al- believe that these modifications, though reprethough the public does experience some losses. senting little change in the traditional currency It is apparent that there is a level of counterfeit- design, will enable the public to detect counter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Federal Reserve Bulletin • August 1984 feits more readily and ensure that the high confi- The greatest challenge oi an improved currendence that the public now has in our currency is cy design is to achieve a balance among a numpreserved. ber of complex technical variables to achieve To implement the results of this research, it effectiveness in counterfeiting deterrence, manuwill be necessary to make selected design facturing feasibility, central bank processing, changes to improve the resistance of our curren- and automated currency processes of the public. cy to counterfeiting. The replacement of most At the same time, it is essential that aesthetic present-design currency with the more counter- design objectives consider public acceptability feit-resistant currency should be completed dur- and tradition, as well as national prestige. While ing 1988. Under this schedule, the distribution of we do not believe that legislation in this area is improved-design currency would be accom- necessary at this time, the Board welcomes plished through the Federal Reserve Banks' nor- congressional interest in this important issue and mal currency processing procedures, wherein your continuing review of the efforts that we unfit currency would be removed from circula- have made to date in conjunction with the Treation and replaced with improved-design notes. In sury Department, the Secret Service, and the this regard, we do not anticipate any changes in Bureau of Engraving and Printing to respond to the current procedures we follow in issuing Fed- the potential problem. We stand ready to provide eral Reserve notes to the public. We estimate the Congress with any and all information that it that the replacement period will last from two to desires concerning the counterfeit deterrence two and one-half years. This schedule could be program and to assure that the real and increasaccelerated should it prove necessary, though at ing threat of expanding currency counterfeiting a higher cost. will be met in an effective and a timely manner. Statement by Paul A. Volcker, Chairman, Board THE OVERALL of Governors of the Federal Reserve System, ECONOMIC PERFORMANCE before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 25, 1984. Measures of aggregate economic activity, employment, costs, and prices have provided an I appreciate the opportunity to appear once again almost unbroken string of favorable news so far before this committee to review monetary policy in 1984. The process of recovery from the deep in the context of our overall economic perform- and prolonged recession—a recovery that began ance and problems. In accordance with the Hum- amid widespread doubts about both its potential phrey-Hawkins Act, the semiannual report of vigor and staying power—had proceeded strongthe Federal Reserve Board reviewing economic ly through 1983. There were widespread anticidevelopments and the decisions of the Federal pations early this year that, as we moved beyond Open Market Committee with respect to mone- recovery into a new expansion phase, the pace of tary and credit targets for 1984 and 1985 was growth would slow. But in fact growth actually transmitted to you this morning. (See pages 609- accelerated as we moved into this year. During 20 of this BULLETIN.) As indicated there, the the second quarter of 1984, the economy as a FOMC reaffirmed the target and monitoring whole operated at a level more than 4 percent ranges for the various monetary and credit aggre- higher than in the closing months of last year and gates for 1984 and decided to reduce the top end IVi percent higher than a year earlier. of the ranges for Ml and M2 for 1985. I will Almost three million more people have been discuss that later in my testimony. First, I would employed so far this year, bringing the total gains like to summarize some key points about the over the past 18 months to close to seven million. economy and call your attention to particular The unemployment rate has dropped to about 7 problems that present clear risks to an otherwise percent. Business investment has risen very rappositive outlook. idly this year, while consumer spending has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 627 remained strong. The forward momentum of the of $170 billion to $175 billion. The Congress is in economy still appears considerable. the process of enacting the so-called "down At the same time, inflationary pressures have payment" against future deficits, part of which to this point remained subdued, with most sum- has already been signed by the President. But the mary price measures rising little, if at all, faster hard fact is, as I am sure the Congress is fully than the sharply reduced rate of 1983. In fact, a aware, that the deficit remains huge in absolute number of sensitive commodity prices have and relative terms, and absent further action dropped recently, following sizable cyclical in- little or no further decline now seems probable creases. Highly competitive domestic and inter- for 1985 and beyond, even assuming that the national markets, influenced by the strength of economy continues to move to "full employthe dollar overseas and continued strong efforts ment" levels. to discipline costs, have been key factors con- That circumstance has been reflected in contributing to greater price stability. The net result tinued large Treasury borrowings and expectahas been rising productivity and good gains in tions of indefinite continuation. Meanwhile, prireal incomes, even while nominal wage and vate credit demands, responding to and salary increases have remained moderate. supporting growth in consumption and invest- Looking only at these overall measures, this ment, have accelerated. Personal savings relarecovery and expansion period has been atypi- tive to income have remained in the lower range cal—atypical in the sense that such a rapid characteristic of the late 1970s, and despite expansion has been maintained longer after the growth in internally generated corporate cash recession trough than in any comparable cyclical flows the sources of domestic funds have fallen period since World War II, excepting only the far below our demands. In these circumstances, Korean War episode. But the period has been interest rates—already historically high—tended atypical in other ways as well—in ways that to move still higher during the spring. Those high potentially could have severely adverse implica- interest rates, combined with favorable economtions unless dealt with by timely and effective ic conditions generally in this country, have policy actions. attracted more and more capital from abroad to help meet our domestic needs, and the dollar has appreciated despite deterioration in our trade IMBALANCES AND STRAINS and current accounts. The strong dollar and the ample availability of In any period of recovery and expansion, some goods from abroad at a time when growth in most sectors fare relatively better or worse than oth- other developed countries has been relatively ers, and in that general respect this period has sluggish have certainly been potent forces helpbeen no exception. Some of our heavy indus- ing to contain inflation. The capital inflow, suptries—for instance, steel and other metals and plementing our net domestic savings by a quarheavy machinery—are still at operating rates ter, has been a factor containing pressures on our well below earlier experience. Demand for our own financial markets. And, the large rise in our agricultural products from abroad has not been imports has helped stimulate economic activity buoyant, and many farmers—particularly those among some of our leading trading partners and with large debts—are being severely squeezed by eased somewhat the severe adjustment process high interest rates and falling land prices. under way in Latin America. What is different, in degree and in kind, is that But what is in question is the sustainability of some inevitable unevenness in patterns of that process, as the United States becomes more growth in particular sectors has been aggravated and more dependent on foreign capital, as our by the massive and related imbalances in both export- and import-competing industries are our fiscal position and our international trading damaged and seek protectionist relief, and as accounts and by some strains in financial mar- interest rate pressures remain strong. The only kets. As you know, rapid growth has been re- real question is whether the needed and inevitaflected in some reduction in the budgetary defi- ble adjustments will be facilitated and encourcit, estimated for fiscal 1984 in the neighborhood aged by constructive public policies, consistent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin • August 1984 with long-term growth and stability, or whether In reaching its policy judgments, the commitwe are content, despite all the strains and dan- tee members shared the widespread view that the gers, to let events simply take their course. overall rate of economic growth would moderate Shortsighted relapses into lack of financial disci- soon as resources become more fully employed pline, widespread protectionism, and wage and and would continue through 1985 at a sustainable pricing excesses could only aggravate the situa- pace. While the rate of price increase has been tion. somewhat slower than expected over the first It is, in the end, the choice between building half of 1984, that rate is generally expected to on the enormous progress of the past to achieve rise a percentage point or so next year, assuming sustained growth in a framework of greater sta- that the dollar remains in the same general range bility or a relapse into inflationary economic as over the past year. In making those projecmalaise. With that choice clear, I am confident tions, which are detailed in table 1, Committee that the needed policies are well within our members also noted that continued high budget collective grasp. deficits and other factors, unless dealt with effec- The continuing difficulties of some heavily tively, would pose substantial risks of less satisindebted developing countries in Latin America, factory results with respect to economic activity and in some other places as well, has been one or prices or both.1 point of uncertainty. A sense of greater concern The economic projections, of course, took has, ironically, come at a time when several of account of the decisions made on monetary the largest borrowers have more clearly made policy. Broadly, monetary policy will remain substantial progress toward reducing external directed toward providing enough money to supfinancing requirements and toward carrying out port sustainable growth while continuing to enthe more fundamental adjustments that should courage greater price stability over time. As provide a firm base for their renewed growth. detailed in the full report, the Committee mem- But other borrowing nations have made less bers felt that that broad objective was consistent progress, and the uncertainties have been fed by with the growth ranges for money and credit signs of growing protectionism in industrialized specified in February for this year, and no countries and by the increases in interest rates in changes were made. For 1985, the tentative the United States that impact directly on debt decision was reached to reduce the ranges slightservice costs of countries with large external ly for both Ml and M2, specifically by lowering dollar-denominated debt. the top end of the ranges specified for this year 1 Within the United States, the relatively high percent and xh percent respectively. The target level of interest rates has aggravated financial range for M3 and the monitoring range for dopressures in the farm sector. Many thrift institu- mestic credit were left unchanged. These tentations face the prospect of weak earnings at a time tive decisions for 1985 will be carefully reviewed when capital positions have been eroded by at the start of next year. losses earlier in the decade. And, despite the In assessing the appropriate ranges, and the rapid growth of the economy and strong in- relative weight to be placed upon the various creases in business profitability overall, more aggregates, the Committee reviewed the evistable prices have exposed some weaknesses in dence of more typical cyclical behavior of Ml in credit practices in the energy and other areas recent quarters relative to GNP, following the encouraged by earlier inflationary expectations. unusual behavior of velocity in 1982 and early 1983. In the light of that examination, the Committee felt that roughly equal weight should be MONETAR Y POLIC Y given each of the monetary aggregates in implementing policy. However, appraisals of their These developments have provided the setting for the implementation of monetary policy thus far in 1984 and for the review of monetary and 1. The attachments to this statement are available on credit objectives by the Federal Open Market request from Publications Services, Board of Governors of Committee for this year and next. the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 629 movements, and relationships among them, will consumer and business credit and a continued continue to be judged in the light of develop- high level of mortgage borrowing. ments in economic activity, inflationary pres- With long-term markets unreceptive, much of sures, financial market conditions, and the rate the increase in business and consumer borrowing of credit growth. is being done at banks. Thrift institutions remain While both Ml and M2 have grown within highly active in the mortgage markets. These their targeted ranges of this year, 4 percent to 8 institutions, in turn, rely increasingly on certifipercent and 6 percent to 9 percent respectively, cates of deposit and other forms of market fi- M3 and particularly domestic credit have ex- nance included in the M3 aggregate, accounting panded faster than anticipated. Credit growth for its relative strength. has, in fact, continued to outpace that of nominal In implementing the policies reflected in the GNP, as was the case last year but contrary to various targets, steps were taken during the late longer-term trends. Viewed in a medium-term or winter and early spring to increase somewhat the longer perspective, those growth rates for M3 pressures on bank reserve positions, and the and domestic credit are higher than consistent discount rate was raised once from 8V2 percent to with sustainable rates of growth in the economy 9 percent. Reserve pressures have not changed and progress toward price stability. For that appreciably since that time, as reflected in relareason, the Committee decided not to raise the tively unchanged borrowings at the discount target ranges for this year, feeling that such window (apart from those by the troubled Contiaction would provide an inappropriate bench- nental Illinois Bank). With both Ml and M2 mark for measuring desired long-run growth, remaining within their target ranges, and against even though Committee members recognized the background of the economic, price, and that, as a practical matter, growth in these aggre- financial market developments reviewed earlier, gates, at least for domestic credit, would likely stronger restraining actions on money and credit exceed the specified ranges. growth generally have not appeared appropriate. In reaching those judgments, the Committee At the same time, the relatively rapid rates of recognized that the rate of growth in business growth in M3 and domestic credit are flashing credit had been amplified by an unusual spate of cautionary signals. merger activity and corporate financial reorgani- While pressures on bank reserves did not zations—so-called "leveraged buy-outs"—that increase further, both long- and short-term interhad the effect of substituting debt for equity. The est rates rose over the spring. The continued implications of those financings, while potential- heavy credit demands, expectations that those ly adverse from the standpoint of the overall demands would persist against the background of financial strength of particular businesses, are the huge federal deficit and strong economic relatively neutral from the standpoint of de- expansion, and fears of a resurgence of inflationmands on real resources and overall credit mar- ary pressures as both labor and capital are more ket conditions. Estimated adjustments for that fully employed all played a part. In more recent activity on the rate of overall credit growth weeks, rates have tended to stabilize at high would reduce the indicated expansion over the levels, perhaps partly because current price first half of the year from a rate of about 13 trends have, at least so far, not borne out more percent to 12 percent, closer to, but still above, extreme inflationary concerns expressed earlier. the monitoring range. That growth, together with Nonetheless, markets remain volatile and apprethe extraordinary rise in consumer and federal hensive. government debt, is shown in table 3. Typically, federal deficits shrink substantially INTERNATIONAL AND DOMESTIC BANKING as the economy moves into the second and third MARKETS years of expansion—there was a day when balance or surplus was the reasonable objective. The atmosphere surrounding credit and banking That is not happening this time. And in contrast markets at times during recent months has been to 1982 and most of 1983, the Treasury must appreciably influenced by the apparent difficulcompete strongly with accelerated demands for ties of one of the nation's largest banks and by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin • August 1984 continuing concerns over the ability of some and will provide a firm base for a healthy but developing countries to service debts held main- considerably smaller bank. ly by large commercial banks around the world. That situation is unique for a large bank, but As I have reported to the committee before, the episode may be an object lesson about the orderly and full resolution of the latter problem importance of looking ahead to anticipate probwill require a strong cooperative effort by bor- lems. rowers and lenders alike over a considerable In a period of rapid economic and credit experiod of time. A few minutes ago, I noted that pansion, there can be temptations to relax pruthere are, in fact, encouraging signs that the dent credit standards in an effort to maximize difficult process of internal and external adjust- growth. With deposit markets deregulated, there ment is beginning to bear fruit in important may be a perception by individual banks that countries in Latin America, including Mexico, added funds can be raised as needed in domestic Venezuela, and Brazil. Negotiations are current- or foreign markets by bidding rates higher to ly under way by the first two of those countries fund larger and larger loan portfolios—and that with banks looking toward a long-term restruc- loan rates can be raised as fast as deposit rates. turing of their external debt at terms reflecting But the aggregate supply of funds is ultimately the evidence of prudent policies and improving not really inexhaustible; confidence must be creditworthiness. Provided that growth is main- maintained, and high and volatile interest rates tained in the industrialized countries and markets can undermine the creditworthiness of weaker for their products are not closed, prospects for borrowers. economic recovery and growth on a sustainable When external economic developments and basis in those Latin American countries appear high interest rates impair the ability of otherwise more favorable, helped to a substantial extent by creditworthy borrowers fully to maintain schedthe growth in our own markets. In other coun- uled debt service on loans made earlier in a tries the adjustment process is less advanced, but different economic environment, prudent bankthe progress of some, both in adjustment and ing may indeed suggest forebearance and renegofinancing, can point the way for others. While tiation of outstanding loans. We, for instance, the challenge for all remains substantial, we need have introduced supervisory procedures to asto view it realistically as a situation that justifies sure that examiners refrain from criticizing banks neither neglect nor despair. Rather, appropriate for exercising forebearance on agricultural credapproaches tailored to the needs of each country its when consistent with safety and soundness. I can bring results. But with that effort on all sides, also believe that, when heavily indebted counthe problem is manageable. tries are moving aggressively to improve their The problems of Continental Bank essentially creditworthiness, restructuring of foreign credits reflected serious weaknesses in the domestic over a substantial period, and the provision of loan portfolio of a bank that had engaged in new money as part of an appropriate adjustment aggressive growth and lending practices for some program under auspices of the International time, including heavy involvement in participa- Monetary Fund, may be indispensable parts of a tions in energy loans of the Penn Square Bank favorable resolution of the international debt that failed two years ago. As other credit losses problem over time. surfaced and earnings pressures continued, mar- But clearly the need remains to anticipate new ket sources of funding were reduced and the problems, as well as to deal with old ones. bank became heavily dependent on discount Recent credit-financed mergers have attracted a window borrowings during the spring. As the great deal of attention, and some of those have atmosphere surrounding the bank deteriorated involved very large and strong companies. But and threatened to disturb markets more general- there is a disturbing element in some mergers and ly, the supervisory authorities, together with a in leveraged buy-out activity viewed more genergroup of other major banks, provided a massive ally; it reduces appreciably the equity cushions financial assistance program pending a more of the resulting company. permanent solution. I believe that those more For the economy as a whole, equity in U.S. lasting arrangements will be announced shortly corporations (apart from retained earnings) was Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 631 retired at an annual rate of about $75 billion over symptom of the excessive demands on our savthe first half of 1984. That seems anomalous at a ings as well as lingering (and related) concerns time of rising business activity and profits, and about inflation. Certainly, there is no evidence, when stronger corporate balance sheet ratios in the midst of rapid economic expansion, high would be welcome. In evaluating prospective rates of growth in debt, and the monetary trends loans to support mergers or leveraged buy-outs, that I have described, that the economy has been bank managers need to appraise the risks pru- starved for money and credit. Indeed, the chaldently, taking full account of the possibility of a lenge over time will remain to work toward more adverse economic and interest rate envi- growth of money and credit consistent with ronment. That, of course, is and should be the lasting price stability. And we need to do that in customary policy of banks, and I sense that some ways that relieve heavy pressures on vulnerable banks have reviewed practices in that respect to sectors of the economy, make us less dependent make sure that they are appropriate in today's on foreign capital, and reduce strains on the circumstances. international financial system. Asset growth in any event needs to be support- None of these problems will be cured by ed by adequate risk capital, and I am glad to attempts to drive interest rates down artificially report that capital positions of the largest banks by excessive money creation; the inflationary and their holding companies have generally im- repercussions could only aggravate the situation. proved over the past few years from the relative- Nor can distortions arising from other sources be ly low levels reached during the 1970s. The dealt with effectively by any general monetary supervisory agencies are in the process of devel- measures. oping guidelines for further improvement for But we are, as a country, by no means helpless those banks and holding companies, and specific in dealing with the strains and risks. proposals are now being tested against public With respect to the budget deficits, as things comment. The approaches that we are adopting now stand, deficits next year will remain in the are, I believe, fully consistent with the intent of same area as currently, and unacceptably large the International Lending Supervision Act spon- thereafter. The implications for financial markets sored by this committee last year and, so far as and the economy become more adverse precisely holding companies are concerned, with the spirit as growth in the private sector generates more of the provisions touching upon capital in need for credit and capital. That outlook must be S. 2851. changed in the only way it constructively can In that connection, I would also emphasize be—moving beyond the welcome "down paythat capital adequacy and asset strength are only ment" to further substantive action on the budtwo of several important tests of the strength of a get as soon as feasible. banking organization. Maintaining an adequate With respect to our exceedingly large trade liquidity cushion and opportunities for maintain- deficit, protectionist pressures are understanding and improving earnings without undue risk able, but it is no less important to avoid meaare also of critical importance. sures—all too likely to be emulated abroad—that would drive up costs, undermine the fabric of trade, and place new barriers in the place of CONCLUSION heavily burdened debtors already struggling to make necessary adjustments. And industry and Indicators of overall economic performance have labor must continue to be sensitive to the need to been exceptionally favorable for more than a remain competitive in their own wage and price year. So far, a strong economic expansion has decisions. been consistent with better price performance With respect to our financial fabric, public than we have enjoyed for many years. policy needs, at one and the same time, to At the same time, there are obvious strains, respond strongly to threats as they emerge while imbalances, and risks that, unless dealt with undertaking supervisory approaches, such as enforcefully, could undercut much of what has couraging banks to increase capital, to strengthbeen achieved. High interest rates are plainly a en that fabric over time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin • August 1984 And, of course, the challenge remains to reach monetary policy consistent with stability and appropriate judgments on growth in money and growth. credit, with the objective of encouraging sustain- In the areas of our responsibility—both moneable growth at more stable prices. I have spoken tary and supervisory policy—we are working of our plans, and I am prepared to address your toward that end. We count on progress in other questions on that matter today. directions as well. The facts with respect to But I first want to emphasize that the success growth and inflation for more than a year demonof all those approaches—and they plainly are strate that we all have much upon which to build. within our capacity as a nation—are dependent But there are also clear signals that—far from on each other. No monetary policy can work basking in the warmth of past and present prowithout strains in the face of deficits that pre- gress—the strongest kind of effort will be necesempt so much of our savings as the economy is sary to convert potential success into sustained more fully employed—and, of course, efforts in growth and stability. • fiscal and trade policy must presume a prudent Statement by Paul A. Volcker, Chairman, Board the pace of growth would slow. But, in fact, of Governors of the Federal Reserve System, growth actually accelerated as we moved into before the Joint Economic Committee, July 30, this year. During the first half of 1984, the 1984. economy as a whole grew at an annual rate of nearly 9 percent, compared with a pace of 6V2 I appreciate the opportunity to appear once again percent during 1983. In addition, almost three before the Joint Economic Committee. As you million more people have been employed so far know, the Federal Reserve submitted to the this year, bringing the total gains over the past 18 Congress last week its semiannual report re- months close to seven million, and the unemquired under the Humphrey-Hawkins Act, ployment rate has dropped to about 7 percent. which reviewed economic developments and the Much of the strength in economic activity this decisions of the Federal Open Market Commit- year has come from consumer spending, as unit tee with respect to monetary and credit targets auto sales in the first half rose to the highest level for 1984 and 1985. My prepared remarks this since mid-1979. With real income growth strong morning, therefore, will be brief and confined to and consumer confidence high, the demand for more general considerations of monetary policy other big ticket items—such as furniture and in the context of our overall economic perform- appliances—also has been robust. In the busiance and the problems that present evident risks ness sector, sales and profits have been rising to an otherwise positive outlook. rapidly, prompting a vigorous expansion in outlays for new plant and, particularly, equipment. The widespread need for acquiring new electron- THE OVERALL ECONOMIC PERFORMANCE ic and data processing technologies has continued to provide an element of strong demand for Measures of aggregate economic activity, em- investment in capital goods. Potentially, this ployment, costs, and prices have provided an investment will be reflected in rising productivialmost unbroken string of favorable news so far ty, although the extent to which the trend of in 1984. The process of recovery from the deep productivity growth is rising faster than during the late 1970s is still not clear. and prolonged recession—a recovery that began amid widespread doubts about both its potential Despite the surprising strength of activity this vigor and staying power—had proceeded strong- year, inflationary pressures, as measured by ly through 1983. There were widespread antici- most summary price measures, have to this point pations early this year that, as we moved beyond remained subdued. In fact, a number of sensitive the initial recovery into a new expansion phase, commodity prices have dropped recently, fol- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 633 lowing sizable cyclical increases. Highly compet- vate credit demands, responding to and itive domestic and international markets, influ- supporting growth in consumption and investenced by the strength of the dollar overseas and ment, have accelerated. But the sources of docontinued strong efforts to discipline costs, have mestic funds supplied to credit markets have been key factors contributing to greater price fallen far below our combined public and private stability. The net result has been rising produc- demands for credit. In these circumstances, intivity and good gains in real income, even while terest rates—already historically high—tended to increases in nominal wage rates have remained move still higher during the spring. moderate. Those high interest rates, combined with fa- Looking only at these overall measures, this vorable economic conditions generally in this recovery and expansion period has been atypi- country, have attracted more and more capital cal—atypical in the sense that rapid expansion from abroad to help meet our domestic financing has been maintained longer after the recession needs, and the dollar has appreciated despite trough than in any comparable cyclical period deterioration in our trade and current accounts. since World War II, excepting only the Korean The strong dollar certainly has been a potent war episode. But the period has been atypical in force helping to contain inflation and reduce other ways as well—in ways that potentially will pressures on our financial markets. But what is have severely adverse implications unless dealt in question is the sustainability of that process as with by timely and effective policy action. the United States becomes more and more dependent on foreign capital, as our export- and import-competing industries are damaged and IMBALANCES AND STRAINS seek protectionist relief, and as interest rate pressures remain strong. In that sense, we are In any period of recovery and expansion, some literally living on borrowed time. sectors fare relatively better or worse than oth- The continuing difficulties of some heavily ers, and in that general respect this period has indebted developing countries in Latin America, been no exception. What is different, in degree and in some other places as well, has been and in kind, is that some inevitable unevenness another point of uncertainty. A sense of greater in patterns of growth in particular sectors has concern has, ironically, come at a time when been aggravated by the massive and related several of the largest borrowers have more clearimbalances in both our fiscal position and our ly made substantial progress toward reducing international trading accounts and by some external financing requirements and toward carstrains in financial markets. rying out the more fundamental adjustments that As you know, rapid growth has been reflected should provide a firm base for their renewed in some reduction in the budgetary deficit, esti- growth. mated for fiscal 1984 in the neighborhood of $170 That sense of concern has been related imporbillion to $175 billion. The Congress is in the tantly to both the increases in interest rates over process of enacting the so-called "downpay- the spring, and to fears of protectionist measures ment" against future deficits, part of which has damaging the capabilities of the indebted counalready been signed by the President. But the tries to export. Put another way, the related hard fact is, as I am sure the Congress is fully deficits—budgetary and trade—place heavy aware, that the deficit remains huge in absolute pressure on the international financial and tradand relative terms. Absent further action, little or ing systems—pressures that can only be dealt no further decline now seems probable for 1985 with by attacking the source of the problem. and beyond. Indeed, we cannot rule out that the Within the United States, the relatively high deficit could be higher next year, even assuming level of interest rates has aggravated financial that the economy continues to move toward "full strains in the farm sector. Many thrift institutions employment" levels. face the prospect of weak earnings at a time That circumstance has been reflected in con- when capital positions have been eroded by tinued large Treasury borrowings, and expecta- losses earlier in the decade. And, despite the tions of indefinite continuation. Meanwhile, pri- rapid growth of the economy and strong in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin • August 1984 creases in business profitability overall, more the ranges specified for this year 1 percent and Vi stable prices have exposed some weaknesses in percent respectively. The target range for M3 credit practices of banks and others in the energy and the monitoring range for domestic credit and other areas encouraged by earlier inflation- were left unchanged. These tentative decisions ary expectations. for 1985 will be carefully reviewed at the start of next year. The Committee also reviewed the relative MONETAR Y POLIC Y weights to be placed upon the monetary aggregates, and felt that roughly equal weight should These developments have provided the setting be given each of them in implementing policy. for the implementation of monetary policy thus However, appraisal of their movements, and far in 1984 and for the review of monetary and relationships among them, will continue to be credit objectives by the Federal Open Market judged in light of developments with respect to Committee for this year and next. the economy, domestic and international finan- In reaching its policy judgments, the Commit- cial markets, and price pressures. tee members shared the widespread view that the Although both Ml and M2 have grown within overall rate of economic growth would moderate their targeted ranges this year, M3 and particusoon, as resources become more fully employed, larly domestic credit have expanded faster than and would continue at a sustainable pace through anticipated. Credit growth has, in fact, continued 1985. While the rate of price increase has been to outpace that of nominal GNP, as was the case somewhat slower than expected over the first last year but contrary to longer-term trends. half of 1984, that rate is generally expected to Growth in the business component of nonfinanrise a percentage point or so next year, assuming cial credit has been amplified by an unusual spate that the dollar remains in the same general range of merger activity and corporate financial reorgaas over the past year. In making those projec- nizations—so-called "leveraged buy-outs"— tions, which are detailed in table 1, the Commit- that had the effect of substituting debt for equity. tee members also noted that the continued high The implications of those financings, while pobudget deficits and other factors noted earlier, tentially adverse from the standpoint of the overunless dealt with effectively, would pose sub- all financial strength of particular businesses, are stantial risks of less satisfactory results with relatively neutral from the standpoint of derespect to economic activity or prices or both.1 mands on real resources and overall credit mar- In that sense, the projections should not be taken ket conditions. Estimated adjustments for that to assume that satisfactory results are assured, activity on the rate of overall credit growth absent policy adjustments. would reduce the indicated expansion over the The economic projections, of course, took first half of the year from a rate of about 13 account of the decisions made on monetary percent to 12 percent, closer to, but still above, policy. Broadly, monetary policy will remain the monitoring range. That growth, together with directed toward providing enough money to sup- the extraordinary rise in consumer and federal port sustainable growth while continuing to en- government debt, is shown in table 3. courage greater price stability over time. As In implementing the policies reflected in the detailed in the full report, the Committee mem- various targets, steps were taken during the late bers felt that broad objective was consistent with winter and early spring to increase somewhat the growth ranges for money and credit specified pressures on bank reserve positions, and the in February for this year, and no changes were discount rate was raised once, from SV2 percent made. For 1985, the tentative decision was to 9 percent. Reserve pressures have not reached to reduce the ranges slightly for both Ml changed appreciably since that time, as reflected and M2, specifically by lowering the top end of in relatively unchanged borrowings at the discount window (apart from those by the troubled Continental Illinois Bank). With both Ml and M2 1. The attachments to this statement are available on remaining within their target ranges, and against request from Publications Services, Board of Governors of the background of the economic, price, and the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 635 financial market developments reviewed earlier, the strength of the financial system. In a period stronger restraining actions on money and credit of rapid economic expansion, there can be tempgrowth generally have not appeared appropriate. tations to relax credit standards in an effort to At the same time, the relatively rapid rates of maximize growth. Bank managers need to apgrowth in M3 and domestic credit are flashing praise the risks prudently, taking full account of cautionary signals. the possibility of a more adverse economic and While pressures on bank reserves did not interest rate environment. That, of course, is and increase further, both long- and short-term inter- should be the customary policy of banks, and I est rates rose over the spring. The continued sense that some have reviewed their practices to heavy credit demands, expectations that those make sure that they are appropriate in today's demands would persist against the background of circumstances. the huge federal deficit and strong economic expansion, and fears of a resurgence of inflationary pressures as both labor and capital are more CONCLUSION fully employed all played a part. In more recent weeks, rates have tended to stabilize at high Indicators of overall economic performance have levels, perhaps partly because current price been exceptionally favorable for more than a trends have, at least so far, not borne out more year. So far, a strong economic expansion has extreme inflationary concerns expressed earlier. been consistent with better price performance Nonetheless, markets remain volatile and appre- than we have enjoyed for many years. hensive. At the same time, there are obvious strains, imbalances, and risks that could undercut much of what has been achieved. The only real ques- BANKING MARKETS tion is whether we as a nation will deal with them promptly and forcefully with constructive public The atmosphere surrounding credit and banking policies, consistent with long-term growth and markets at times during recent months has been stability, or whether we will be content, despite appreciably influenced by the apparent difficul- all the strains and dangers, to let events simply ties of one of the nation's largest banks and by take their course. Shortsighted relapses into lack continuing concerns over the ability of some of financial discipline, widespread protectionism, developing countries to service debts held main- and wage and pricing excesses could only aggraly by large commercial banks around the world. vate the situation. As I have reported to the Congress before, None of these problems will be cured by orderly and full resolution of the latter problem attempts to drive interest rates down artificially will require a strong cooperative effort by bor- by excessive money creation; the inflationary rowers and lenders alike over a considerable repercussions could only aggravate the situation. period of time. As I noted a few minutes ago, the Nor can distortions arising from other sources be difficult process of internal and external adjust- dealt with effectively by any general monetary ment is beginning to bear fruit in important measures. countries in Latin America, including Mexico, It is, in the end, the choice between building Venezuela, and Brazil. In other countries the on the enormous progress of the past to achieve adjustment process is less advanced, but the sustained growth in a framework of greater staprogress of some, both in adjustment and financ- bility or a relapse into inflationary economic ing, can point the way for others. While the malaise. With that choice clear, I am confident challenge for all remains substantial, with effort that the needed policies are well within our on all sides, the problem is manageable. collective grasp. Recent concerns about strains on our banking In the areas of our responsibility—both moneinstitutions have focused on the problems of tary and supervisory policies—we are working Continental Bank. That situation is unique for a toward achieving stability and growth. We count large bank, but the episode may be an object on progress in other directions as well. The facts lesson for all of us concerned with maintaining with respect to growth and inflation for more Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Federal Reserve Bulletin • August 1984 than a year demonstrate that we all have much past and present progress—we must undertake upon which to build. But there are also clear the strongest kind of effort to convert potential signals that—far from basking in the warmth of success into sustained growth and stability. • Statement by Paul A. Volcker, Chairman, Board extending certainly for several more years of Governors of the Federal Reserve System, ahead. In that context, the main danger may, in before the Committee on Foreign Affairs, House fact, be a human tendency to procrastinate, to of Representatives, August 8, 1984. relax the necessary effort, and to fail to maintain the high level of cooperation among parties with I am pleased to have this opportunity to review disparate particular interests, despite the overwith you the international debt situation. whelming common interest in an orderly resolu- It is a large and complicated problem that must tion. That danger can be avoided. I believe the be effectively managed—managed in our own problem is manageable. And I also believe that immediate economic interest in maintaining the your interest and your inquiries can help assure domestic and international financial stability nec- that result. essary to support our own growth, and managed I will not burden you with reviewing the oriin our broader interest of the economic growth, gins of the debt problem, which by now I believe the political stability and the democratic evolu- are well known—the successive oil price disturtion of the developing world. bances, overly enthusiastic borrowing and lend- For reasons I will touch upon later, the solu- ing policies fostered in substantial part by an tions, in my judgment, are not likely to be found inflationary environment and inflationary expecin some grand new initiative or in a single tations, failure to encourage and attract more "across-the-board" approach culminating in in- direct investment from abroad in developing tergovernmental negotiations among borrowing countries, and the related undermining of the and lending countries. Rather, the effort has confidence of those with capital within the borrequired, and will continue to require, coopera- rowing countries. World recession and higher tive and imaginative efforts by all the affected interest rates helped account for the timing and parties to deal with the particular problems and extent of the difficulties, but, with the benefit of needs of particular borrowing countries. hindsight, unsustainable trends had emerged well Certainly, there are, and will be, important before that time. common elements in those country-by-country Suffice it to say that there are lessons for the approaches. The policies of these countries future here for all of us. But I want to concenthemselves are always crucial. The major com- trate today on assessing the nature and dimenmercial banks around the world, which are the sions of the problem and the more immediate major lenders and which have so much at stake, approaches for dealing with it. need to concert their approaches. The international financial institutions—with the International Monetary Fund initially in the lead, but THE EXTENT OF THE DEBT-SERVICING with the World Bank potentially playing an in- PROBLEMS creasingly critical role—provide a focus for leadership and coordination. And none of that will In assessing the debt problems, I would first work effectively without the understanding and point out that they do not uniformly impact support of national governments—and, most of developing countries as a whole. Many of the all, that of the United States. larger developing countries in Asia—including As all of that implies, we face not so much a those that are major borrowers from banks (for "crisis" that can be dealt with by a single master instance, South Korea and Taiwan)—have constroke, but rather a continuing hard-slogging tinued to meet fully and on schedule their debteffort to contain the strains and to manage a servicing obligations; financial markets remain return to "normalcy" over a period of time open to them, and growth has continued at a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 637 rapid rate. Their ability to achieve and maintain turbed circumstances, these arrangements inhigh rates of export sales has been a major factor volve negotiations affecting virtually all bank of strength. lenders. At the other end of the spectrum, most of the poorest of the developing countries, concentrat- • Expanded Role of the International Moneed on the African continent, have been less tary Fund. Thirty-six countries are currently affected by the slowing in international bank operating with IMF-arranged and IMF-monilending for the simple reason that these countries tored stabilization programs. The IMF also has had never been able to borrow sizable amounts helped in coordinating financial resources from and had not become dependent on external pri- banks and official sources to cover financing vate sources of credit. They do have severe requirements of debtor countries. The IMF's development problems, and a few of them had capacity to operate on this scale has been failed to maintain debt service years before the strengthened by the implementation last year of more general problem arose. But the financial the quota increase and the enlargement of the exposure of private lenders is limited. General Arrangements to Borrow. The debt-servicing problems of more general import have been mainly concentrated in Latin • Official Bilateral and Multilateral Assis- America, among several East European coun- tance. An expansion of official export credits and tries, and in Nigeria and the Philippines. Among other forms of official assistance has been essendeveloping countries, these have generally had tial in helping cover the financial needs of a relatively higher incomes and they typically had number of debtor countries. Multilateral and experienced rapid growth during much of the regional lending institutions also have redirected 1960s and 1970s. While in varying degrees, these some of their activities to hplp cov$r the financial countries have faced—and are continuing to requirements of borrowing countries. Before face—severe external payments difficulties, they bank and IMF resources come on stream, govalso have diverse needs and capabilities. Some, ernments and central banks (sometimes under for instance, are large oil exporters; others are the aegis of the Bank for International Settleheavily dependent on imports of energy. Some ments) occasionally have found it necessary to have a sizable manufacturing base, while others provide short-term bridge financing. are more dependent on agriculture or mining. Their internal economic approaches and prob- • Sustained Noninflationary World Economic lems differ, so that even within this group of Recovery. Growing markets for exports are escountries faced with large external debts, a prag- sential over time to enable borrowing countries matic and flexible case-by-case approach has to restore balance to their international accounts. evolved toward dealing with them. The strong recovery of the United States has That approach has relied on several common been especially helpful in this regard; recovery in elements: some other industrial countries appears to be on the way and will broaden the markets for devel- • Adjustment by Borrowing Countries. Over- oping-country exports. The maintenance of a extended developing countries have recognized free and open trading system is essential if the need to reduce external financing require- the borrowing countries are to expand their exments and to improve economic management ports. and incentives internally to restore a base for sustained growth. As these approaches imply, debtor countries, commercial banks, industrial countries, and in- • Continued Lending by Commercial Banks. ternational institutions must be willing to work In the process of restoring and maintaining or- closely together to deal with a problem beyond derly debt servicing, current maturities need to the capacity of any of those parties individually. be extended and some new money—typically in In other words, an extraordinary continuing efdiminishing amounts—may need to be provided fort in international cooperation, among counas the internal adjustments are made. In dis- tries and official institutions, and between bor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin • August 1984 rowers and private lenders, has been, and will almost cut in half between 1981 and 1983. The continue to be, required. reduction in the deficits of 10 major borrowing countries, most of whom have experienced debtservicing difficulties, has been even larger—from THE ADJUSTMENT PATH some $46 billion in 1981 to about $16 billion in OF BORROWING COUNTRIES 1983. (See table l.1) Some further progress is taking place this year. The core of any successful effort lies in the Some key debtor countries—Mexico and Venadjustment actions of the borrowing countries ezuela in Latin America, Yugoslavia and Hungathemselves—all else rests on the perception and ry in Eastern Europe—have actually moved into the reality of their own efforts to rebuild a base current account surplus, notwithstanding their for sustained growth with reduced reliance on heavy interest payments. In others, notably Braexternal funds. In most cases, those actions have zil, trade surpluses are significantly exceeding been framed in cooperation with, and have re- expectations, and the remaining current account ceived the financial support of, the International deficits are smaller than anticipated. Moreover, Monetary Fund, and that has been a crucial the payments performance of some of these ingredient in building further financial support. countries has allowed them to replenish their The results thus far of the adjustment efforts reserves, which were depleted following the onby some of the most important borrowing coun- set of the debt problem. tries have been encouraging. In Mexico, Brazil, The large trade surpluses being recorded by and Venezuela, for example, budget deficits are these countries are a partial counterpart of the being sharply reduced by 4 percent or more of enlargement of the U.S. trade deficit. The the gross national product in a single year—the strength of the U.S. economic recovery and the equivalent of moving the U.S. budget deficit appreciation of the dollar have stimulated U.S. from its present position into balance or surplus demand for imports, and the weakness of interin one fell swoop. Other measures, including nal demand in many of the major developing restraint on money growth, have been taken to countries and the strong dollar have reduced bring domestic demand more in line with domes- foreign demand for U.S. exports. As a result, the tic capacity and to reduce inflationary pressures. U.S. trade deficit with Latin American and Asian In order to correct external deficits and long- developing countries nearly doubled between the standing distortions in relative prices at home, fourth quarter of 1982 and the second quarter of borrowing countries have allowed sharp depreci- 1984 (from about $21.5 billion to nearly $41 ation of their currencies and reduced subsidies, billion). Those countries that started effective at the expense of higher prices of important adjustment programs earlier, and have thus been goods and services. able to take advantage of growing markets in the In the midst of that difficult process, a number United States and elsewhere, have benefited of countries have, perhaps inevitably, experi- most from the factors contributing to the widenenced a sharp contraction in economic activity. ing of the U.S. trade deficit. But those countries that responded promptly to At the same time, I must emphasize that so far their balance of payments and debt-servicing a disproportionate part of the improvement on problems with comprehensive adjustment pro- the external side has come from sharp declines in grams do show substantial improvement in their imports. In fact, imports in a number of countries external positions. Now, some signs of a resump- have dropped to levels inconsistent with growth tion of growth are appearing. At the same time, and development. Over time, both imports and the challenge remains to restore growth over economic activity must expand if the adjustment time in a manner consistent with a more limited programs are to be successful and consistent availability of foreign bank financing. with social and political stability. Moreover, The results of adjustment efforts adopted by borrowing countries in the aggregate have been 1. The attachments to this statement are available on impressive. The combined current account defirequest from Publications Services, Board of Governors of cit of the non-OPEC developing countries was the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 639 there are a number of countries that, so far, have borrowers. Higher interest costs directly add to not been able to implement effective policies, debt service burdens. An unwillingness on the and related financing and refinancing programs part of industrial countries to accept more imare in abeyance. ports would make it impossible for the borrowing The difficulties in this area are apparent. Effec- countries to earn the foreign exchange they need tive measures in practical terms mean strong and to service their debts. politically difficult actions that sometimes must Recent changes in these respects are not so be shaped in the midst of blossoming democratic significant as to thwart the adjustment process. movements. That implies a need for a high In fact, to the extent that the higher interest rates degree of consensus—no simple task for those of are a reflection of U.S. economic growth that us who have enjoyed stable democratic govern- was stronger than anticipated, the burden is ments for many years. offset to a considerable degree by the higher In this situation, concern is often and under- exports to the United States. Nonetheless, anstandably expressed that too much is expected of ticipations of further changes have been a source these countries by the IMF in shaping its lending of considerable uncertainty, tending to undercut programs, by creditor countries, or by banks. the cooperative effort to manage the debt prob- But I question whether there can be an easy, lems in an orderly way. painless way to restore equilibrium, or whether Given our own strong interest in achieving an failure to adjust can be in the basic interest of the orderly resolution of the debt problem, these borrowing countries themselves. concerns reinforce the urgency of forceful and Economic growth in developing countries over prompt action by the Congress and the adminisa long period ahead, and the prospects for politi- tration to reach agreement on ways to reduce the cal stability, will be dependent on their ability to huge budget deficits that have helped keep our participate fully in an interdependent world. In interest rates high and indirectly aggravated the that world, creditworthiness and credit availabil- deficit in our own trade. Although I understand ity will be precious, for they are essential to that these hearings on the international debt support trade and investment. Once lost, those situation are not intended to result in legislation, qualities are difficult to restore—and democracy I cannot resist suggesting that further efforts in is not likely to flourish in the midst of accelerat- resolving our budget deficit problem would be ing inflation and economic isolation. the single most important contribution that the In many of those countries, their excessive Congress could make to an easing of internationdebt burdens can be traced, in large part, to a al debt problems. flight of capital by their own citizens discouraged from investing at home. To me, the ultimate test of a successful economic program will not be FINANCING ADJUSTMENT AND GROWTH whether, at a moment in time, it is acceptable to the IMF or to bank lenders, but whether it, in In the near term, the major borrowing countries fact, can restore and maintain the confidence of a must, by force of circumstances, bring their nation's own citizens—and whether, as a conse- current account positions into alignment with a quence, its own savings are employed produc- reduced availability of external financing. By the tively at home. standards of the late 1970s, new bank lending is likely to remain restrained relative to the bank's own capital and assets; a number of banks in the THREATS TO ADJUSTMENT United States and elsewhere will probably be looking to reduce their exposure relative to their At the same time, the efforts of the borrowing capital. The amounts of indebtedness by major countries will not be successful without a reason- borrowing countries and the loans of commercial ably favorable economic climate elsewhere. Spe- banks are displayed in tables 2 and 3. As indicatcifically, prolonged increases in interest rates ed there, growth of such lending has in fact and increased protectionism in the industrialized slowed, and the exposure of banks, relative to world can undermine the best efforts of the assets or capital, has begun to decline marginal- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin • August 1984 ly. In a context of growth, both in the industrial- suddenly, their economic futures would be jeopized and developing world, this relative exposure ardized, and, as a result, the basic value of could decline much more significantly, even as existing credits would be undermined. the total loans outstanding rise moderately. By cooperation, and at times with transitional The financial constraints for the borrowers, support from governments, central banks, and and the risks to lenders, would both be reduced the IMF, a coordinated and constructive apby restoration of, and increases in, the flow of proach has been maintained, resting on analysis direct investment to developing countries. In the that extension of old credits—and, in a number light of the financial and economic uncertainties of cases, new credits—can be justified when of the past two years, the opposite has happened. necessary policies are adopted and long-term This emphasizes the importance of the borrow- debt servicing capacity maintained and ening countries, as part of a reshaping of their hanced. economic policies, to attach priority to ap- That kind of approach is not new for bankers; proaches that will strengthen confidence in their a similar appraisal is necessary when difficulties economic prospects abroad as well as at home. arise in meeting debt service requirements of That process inevitably takes time, but it is domestic business. What is new is the level of urgent that it begin. The adjustment programs complexity when hundreds of lending instituundertaken are broadly consistent with the need, tions, various governments, and international but much more could be done to deal with institutions are all involved with many differing specific obstacles to foreign investment. interests, different accounting and legal systems, Given smaller inflows of capital from abroad, and historical lending relationships. The one growth in major borrowing countries of necessity feature that tends to bind all these efforts togethwill have to be financed to a greater extent than er is a common appreciation that the success of in the past by internal savings. Stabilization the total effort depends on cooperation by all programs designed to curb inflation, to maintain participants. And we can now see instances in realistic interest and exchange rates, and to which the adjustment effort and transitional fieliminate or reduce price distortions are designed nancing appear to be strengthening the basic to be consistent with that goal. Over time, en- creditworthiness of borrowing countries. couragement of domestic savings and economically rational investment decisions can provide a far sounder base for development than unsus- A NEW PHASE tainable amounts of foreign borrowing, important as capital imports may continue to be at the Indeed, I believe that the stage has been set for a margin. new phase in financing programs tailored to the In the best of circumstances, these adjust- progress and circumstances of individual counments could not bear fruit in self-sustaining tries. The bulk of the financing has been, and will growth immediately. And, lenders need to appre- continue to be, provided by commercial banks, ciate that countries launching an adjustment ef- and is a matter for negotiation by borrowers and fort will need financial support from abroad for a lenders. But I am glad to see that, recognizing time that will not be forthcoming spontaneous- the progress made by certain countries, the ly—that is by the uncoordinated action of indi- banks are now engaged in negotiations for mulvidual banks and countries. Indeed, as debt tiyear restructuring of debts on terms that both problems first became apparent, the understand- reflect the stronger creditworthiness of individable reaction of individual lenders was to pull ual countries and permit planning on a more back abruptly, under the pressure of directors, assured basis for the future. These arrangeaccountants, and public opinion, suddenly con- ments, combined with prudent policies by the scious of risks that had not been so apparent only lender, can pave the way for meeting any more a short while before. But experienced bankers limited further needs for new money in the years quickly realized that that approach would guar- ahead through more normal and spontaneous antee precisely the result they feared—that bor- market processes. rowers would, in fact, be unable to repay so All of this seems to me entirely consistent with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 641 the conclusions of the recent Economic Summit I am aware of the difficulty of conducting in London: "in cases where debtor countries are negotiations with so many borrowers and many themselves making successful efforts to improve lenders, and with so many individual and synditheir position," the Summit participants attached cated loan agreements involved. There are conparticular importance to "encouraging more ex- cerns that each renegotiated loan may be intertended multiyear rescheduling of commercial preted as a precedent for future agreements debts and standing ready where appropriate to when circumstances may not be similar. Lenders negotiate similarly in respect of debts to govern- or borrowers have particular negotiating obments and government agencies." jectives that may be difficult to reconcile. But The process of renegotiating the debts to both have clear and overriding incentives to banks has required the resolution of difficult and build on the constructive attitudes and the efforts contentious issues in a financially and politically by important borrowing countries to restore dosensitive environment. In the process, consider- mestic and external stability. Relevant negotiaable experience has been developed and the tions are under way now with Mexico and Veneeffort has become better organized and more zuela. I hope they can be concluded shortly. orderly. Steering committees act as negotiators and perform a liaison function with the much larger group of lending banks, and better lines of CONCL UDING OBSER VA TIONS communication have been established. The role of the International Monetary Fund in In sum, there are grounds for encouragement in the loan renegotiation process has been expand- the progress that has been made over the past ed and also has been defined more clearly. The two years in dealing with the international debt IMF also has improved the flow of its technical problem. The record and the prospects do not information about borrowing countries to lending justify a sense of despair. But neither do they banks in a manner that does not appear to have suggest grounds for complacency—the threat to compromised its ongoing relationship with its international financial stability remains real, and members. But, as time has passed, shortcomings will need the continuing attention of governin the process are also apparent. The new ar- ments as well as private lenders if it is to be rangements in a situation in which there could be successfully resolved. no "track record" of adjustment, have typically In the light of all the difficulties and strains, been for relatively short periods, and rates and proposals have been made that the slogging, terms reflected the appreciation of extra risk. difficult, continuing process of adjustment, nego- One of the dangers has been that, as the sense of tiation, and refinancing country by country be emergency passed, the effort would flag and a essentially abandoned and replaced by some sense of frustration about continuing negotia- sweeping new initiative to settle the problem tions would impair the effectiveness of the effort. decisively and "across the board." These pro- Now, however, the opportunity has arisen, posals seem to me based on unrealistic assumpwithin the general framework of a case-by-case tions—typically on an expectation that someone approach, to take a longer perspective. Growth else is prepared to assume large new burdens. in the industrialized countries has resumed. I do not sense, in that connection, any willing- Some important borrowing countries have dem- ness on the part of the U.S. Congress, or other onstrated their ability to adjust their external parliaments, to provide massive new financial positions and to encourage export-led growth. assistance for countries that, in the economic Lenders can recognize that progress in extending hierarchy of developing countries, are among the maturities and in providing more favorable terms most advanced. Lending banks understandably in other respects. do not volunteer to provide large interest subsi- As a result, there is an opportunity to move dies for, or to write down, loans that can, after progressively from a "crisis" stage of debt man- all, be serviced; nor is that necessarily in the agement to longer-term arrangements on reason- interest of countries that will be looking to interable terms. I believe it is critically important that national markets for credit to support growth in that opportunity be seized. the years ahead. Those countries are not in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin • August 1984 same position, in terms of their own resources spective. I am thinking in part of the possibilities and in terms of the efforts they have made to of encouraging so-calied "co-financing" techplace their own economies on a sounder footing, niques, combining the strengths and resources of and it would be difficult—even perverse—to pro- private lenders with those of international instivide the same terms and conditions for all. tutions. These initiatives, it seems to me, de- I do not minimize the real strains or, almost as serve our sympathic attention, and the instituimportant, the sense of fatigue that can set in tions themselves our continuing financial support when a large and complicated effort needs to be as required by prudent and effective policies. All sustained. Results take time. That is one reason of this would represent a natural evolution, prowhy, as I noted above, that as progress and viding both a transition to "normalcy" and a performance justify it, it does seem to me criti- basis for constructive new patterns of internacally important to move to a new phase in which tional lending. individual borrowers will be able to refinance With this continuing effort, successful managematuring debt for some period ahead at reason- ment of the debt problem can continue so long as able terms, permitting both borrowers and lend- certain fundamentals are respected—persistent ers to have a more certain and stable base for and effective adjustment efforts by the borrowplanning. ers, continuing growth among the industrial As the initial adjustments under the aegis of countries as a whole, maintenance of open marthe IMF are made, the role for the World Bank kets for the products of developing countries and the regional development banks should be- ready to compete fairly in world markets, and come relatively more important, both in helping reasonable stability in financial markets (or betborrowers develop appropriate investment strat- ter yet, declining interest rates) which, in turn, egies and seeing to it that they can be appropri- rests on keeping inflation and budgetary deficits ately financed. There are promising initiatives under control. None of that requires perfection under way in the World Bank, for instance, that in every respect, and none of it will produce could importantly supplement the efforts of the sudden and complete success in every case IMF, the borrowing countries and the banks as across the board. The process will take time. But the total effort is viewed in a longer-term per- it can work, and I believe it is working. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

643 Announcements PROPOSED ACTIONS debit positions. The network must agree that large-dollar payments will not be processed un- The Federal Reserve Board has asked for com- der any circumstances and that the Federal Rement by September 24 on a proposed revision of serve may terminate net settlement services imits guidelines regarding capital adequacy for state mediately if there is any indication that the member banks and bank holding companies, as network is being used for large-dollar transfers. well as on a proposed supporting regulation The network must agree to provide information establishing procedures for requiring compliance to the Federal Reserve regarding its operations with capital requirements. and transactions when requested. The Federal Reserve has the right to modify or terminate the The Federal Reserve Board has also published agreement at any time. for public comment a proposal to eliminate the In addition, the Board requests that the Refractional availability crediting option for the serve Banks monitor such networks' net settlerecovery of interterritory check float. The Board ment entries to ensure that the network is not requests comment by September 7. being used for large-dollar transfers. The Board has also delegated to the Director of the Division of Federal Reserve Bank Opera- ACTIONS AFFECTING NET SETTLEMENT tions the authority to approve requests for same- SERVICES day finality of net settlement services provided to large-dollar funds transfer networks that com- The Board has recently taken two actions that ply with the interim net settlement guidelines affect the Federal Reserve's net settlement ser- that were published by the Board on March 29, vice. First, the Board approved entering into net 1984. As a condition of access, the participants settlement arrangements with three small-dollar must also agree to implement the risk-reduction electronic funds transfer (ATM) networks. Sec- measures that the Board may adopt in the future. ond, the Board approved the provision of same- In granting net settlement services to a largeday finality for the net settlement services pro- dollar funds transfer network, the network will vided to Bankwire. be required to establish an escrow account with The Board delegated to the Director of the its local Reserve Bank. Network participants in Division of Federal Reserve Bank Operations, net debit positions will be required to send with the concurrence of the General Counsel, Fedwires to fund the account at the close of authority to approve net settlement arrange- business. The network will then use the incoming ments for small-dollar electronic funds transfer funds to send Fedwires to participants in net networks under the following conditions. Net credit positions. The Reserve Bank will monitor settlement services may be provided to small- the balance in the escrow account and not redollar electronic funds transfer networks under lease any transfer that would result in an overthe terms of a standard agreement that will be draft in the escrow account. developed by the Reserve Banks and reviewed by the Board's Legal Division. The agreement must stipulate that net settlement entries are to be considered provisional until the business day CHANGES IN BOARD STAFF following the presentment of a statement to the Federal Reserve in order to ensure the settling The Federal Reserve Board has announced the depository institutions' ability to cover their net following changes in its official staff in the Divi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin • August 1984 sion of Banking Supervision and Regulation Frederick M. Struble has been promoted from effective July 30, 1984: Deputy Associate Director in the Division of Herbert A. Biern has been appointed Assistant Research and Statistics to Associate Director in Director. Mr. Biern joined the Board's staff in the Division of Banking Supervision and Regula- June 1979. He has a B.A. from New York tion. University and a J.D. from Brooklyn Law School. Anthony G. Cornyn has been appointed As- SYSTEM MEMBERSHIP: sistant Director. Mr. Cornyn, a member of the ADMISSION OF STATE BANKS Board's staff since January 1971, has a B.S. from Villanova University and an M.B.A. from the The following banks were admitted to member- University of Pittsburgh. ship in the Federal Reserve System during the Stephen C. Schemering has been appointed period July 10 through August 10, 1984: Assistant Director. Mr. Schemering joined the Board's staff in July 1974. He has a B.S. from Arizona Old Dominion University. Safford Eastern Arizona Bank Richard Spillenkothen has been appointed As- Colorado sistant Director. Mr. Spillenkothen, a Board Denver Citizens Bank of Glendale employee since February 1976, has a B.A. from Florida Harvard University and an M.B.A. from the Hialeah Global Bank University of Chicago. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

645 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MAY 21-22, 1984 months. Sales gains were reported at all major types of stores but were particularly strong at Domestic Policy Directive automotive outlets and at general merchandise, apparel, and furniture and appliance stores. The information reviewed at this meeting sug- Sales of new domestic automobiles, which had gested that growth in real GNP, while moderat- dipped in March, rebounded in April to an annual ing from the annual rate of 83/4 percent recorded rate of 8!/4 million units and then surged to a rate for the first quarter, was continuing at a relative- of about 83/ million units in early May. 4 ly rapid pace in the current quarter. Thus far in In April, private housing starts recovered from 1984, average prices, as measured by the fixed- a sizable decline in March and, at an annual rate weight index for gross domestic business prod- of nearly 2 million units, matched their advanced uct, appeared to be increasing at about the same first-quarter pace. Building permits for residenrate as in 1983. tial construction were unchanged in April at an Industrial production rose nearly IV2 percent annual rate of slightly more than 1.7 million in April, after slowing to an increase of Vi percent units, somewhat below the level earlier in the in March. Gains in April were widespread across year. In the first quarter, sales of new houses most major product and material categories. continued at about the same pace as in the fourth Auto production declined, however, primarily quarter of 1983, while sales of existing homes reflecting reduced output at plants producing rose appreciably. small cars and the less popular large-size models. Business investment spending moderated from Some plants producing fast-selling models were the extraordinarily rapid rate of expansion in the encountering capacity constraints. The rate of second half of 1983, but remained brisk. In real capacity utilization in manufacturing rose 1 per- terms, fixed investment spending rose at an centage point further in April to 82.3 percent, annual rate of about 143/4 percent in the first somewhat above the 81.8 percent average for the quarter. Data on shipments and new orders of 1967-82 period. nondefense capital goods have moved erratically Nonfarm payroll employment surged by in recent months; both series declined sharply in 400,000 in April. The rise was attributable in April after exhibiting considerable strength in large part to a rebound in employment at con- some earlier months of 1984. But other recent struction sites after a weather-related decline in information, including survey reports that indi- March and to substantial employment gains in cate upward revisions in business spending service industries. In manufacturing, employ- plans, generally suggests continuing strength in ment rose by 100,000, about the same as the business fixed investment. average monthly increase over the previous The producer price index for finished goods twelve months, and the length of the average was unchanged in April, after increases of about factory workweek reached 41.2 hours, its highest VI percent per month in the first quarter. A level in nearly two decades. Despite continued reversal of the sharp runup in food prices congains in employment, the civilian unemployment tributed to the favorable performance in April. rate was unchanged at 7.8 percent in March and The consumer price index rose VI percent in April, as the labor force increased appreciably. April, slightly more than the average rate in the Total retail sales climbed 2.9 percent in April, first quarter; large increases in prices of energyabout offsetting declines in the preceding two related items and some commodities accounted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin • August 1984 for the April rise. Over the first four months of path. From the fourth quarter of 1983 through the year, the index of average hourly earnings April, Ml grew at a rate a little below the increased at about the same pace as in 1983. midpoint of the Committee's range of 4 to 8 In foreign exchange markets the trade-weight- percent for 1984; M2 increased at a rate in the ed value of the dollar against major foreign lower part of its 6 to 9 percent longer-run range; currencies had increased about 5LA percent since and M3 expanded at a rate a bit above the 9 late March to a level close to its peak for the percent upper limit of its range. floating-rate period, reached in the first part of Total domestic nonfinancial debt appeared to January. Increases in U.S. interest rates relative be growing at a pace above the Committee's to foreign rates, together with labor unrest in monitoring range for the year. Credit growth some European countries and conflict in the accelerated in April because of a faster pace of Persian Gulf area, apparently contributed to the borrowing by the federal government; business dollar's appreciation. The merchandise trade borrowing also remained brisk, with most bordeficit widened further in the first quarter, as a rowing still concentrated in the short-term area. surge in non-oil imports exceeded a rise in ex- Growth in business loans at domestic offices of ports. U.S. commercial banks slowed from the vigor- At its meeting on March 26-27, 1984, the ous pace of recent months, as banks booked a Federal Open Market Committee had decided to sizable volume of loans offshore and firms shiftseek to maintain pressures on reserve positions ed more of their borrowing to the commercial that were deemed to be consistent with growth of paper market. In the household sector, consumer Ml, M2, and M3 from March to June at annual installment credit expanded at an annual rate of rates of around 6V2, 8, and 8V2 percent respec- about 17 percent in the first quarter and appeared tively; it was decided that initially those pres- to have remained strong in April; mortgage borsures should be close to those that had emerged rowing also was continuing to grow at a rapid in the days preceding the March meeting. The pace. members had agreed that greater restraint on Total reserves showed little net change in reserve conditions would be acceptable in the April, as a decline in excess reserves offset event of more substantial growth of the monetary further increases in required reserves. In the aggregates, while somewhat lesser restraint three complete reserve maintenance periods endmight be acceptable if growth of the aggregates ing May 9, adjustment plus seasonal borrowing slowed significantly. It was also agreed that the at the discount window averaged somewhat less need for greater or lesser restraint would be than $1.2 billion compared with about $1.1 billion considered in the context of the continuing at the time of the previous meeting. In the strength of the business expansion, inflationary current two-v/eek statement period ending May pressures, and the rate of credit growth. The 23, average borrowing was running considerably intermeeting range for the federal funds rate, higher, in excess of $4 billion, because of adwhich provides a mechanism for initiating con- vances to a large bank that was experiencing sultation of the Committee, was set at IV2 to 11V2 substantial outflows of funds caused by market percent. uncertainties about the bank's underlying condi- Ml changed little in April, but data available tion. for early May suggested a considerable strength- The federal funds rate rose from an average of ening. Given the pickup in early May, it was around 10 percent in the period immediately estimated that growth of Ml since March was preceding the March FOMC meeting to about roughly in line with the 6V2 percent annual rate of IOV2 percent recently. Most other interest rates expansion sought by the Committee for the moved considerably higher over the intermeeting March-to-June period. Expansion in M2 was at interval, generally rising about V2 to 1 VA percentan annual rate of about IVA percent in April, close age points in both short- and long-term markets. to the rate specified by the Committee for the Commercial banks raised their "prime" rate three-month period, while growth in M3, at an twice during the period, by a total of 1 percentannual rate of 103/4 percent in April, was well age point, to I2V2 percent. On April 6 the Federal above its 8V2 percent March-to-June growth Reserve announced an increase of V2 percentage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 647 point in the discount rate to 9 percent. The direction. It was also pointed out that there had increases in market rates apparently reflected been a sizable rise in interest rates over the past continuing strong credit demands as economic several weeks; current rate levels, particularly activity expanded, the absence of rapid progress against the background of concerns about potenin reducing the federal deficit, and related con- tial liquidity problems, could have a considerable cerns about future inflationary pressures and a effect, after some lag, in curbing expenditures in possible need for a more restrictive provision of interest-sensitive sectors of the economy and, reserves. Late in the intermeeting period, market more broadly, in fostering more cautious conconditions also reflected a heightened degree of sumer and investor attitudes. Developments in anxiety and sensitivity to potential liquidity financial markets had already contributed to a strains, and especially the persistent rumors that more guarded investor climate in some respects, a major bank was in serious financial difficulty. as reflected in some declines in stock prices and There were also renewed concerns about the a tendency among investors to back away from possible implications of continuing international the long-term debt markets. The problems of a debt problems, particularly in the light of in- major commercial bank had sensitized markets creased interest rates. to other potential problem areas such as out- The staff projections presented at this meeting standing loans to less developed countries that continued to suggest that real GNP would grow were experiencing debt servicing difficulties. In at a much more moderate pace over the balance general, it was difficult to evaluate how such of the year and in 1985, in line with the slower uncertainties—which were seen as likely to perpattern characteristic of maturing business ex- sist for some time even if the most immediately pansions. The unemployment rate was projected pressing problems were resolved—would affect to decline over the period and, while current business and consumer spending. evidence of growing cost and price pressures was Most of the members, as they had at previous limited, the rate of price increase was expected meetings, expressed concern that growing capacto pick up modestly from its recent pace. ity constraints, declining unemployment, and the In the Committee's discussion of the economic prospect of reduced productivity growth might situation and outlook, the members noted that be conducive to greater inflationary pressures the expansion in economic activity did indeed over time. Individual members also commented appear to be moderating from an unsustainable on the development of price and wage pressures pace in the first quarter, but the extent of the in some industries and occupations. While indislowdown remained in question as did the pro- cations of greater inflationary pressures were spective degree of upward price pressures as the still limited, there was a danger that they might expansion continued. In the course of the discus- become more widespread later in the year. In sion, the members gave considerable emphasis that connection some members commented that to uncertainties inherent in the unusually sensi- the terms of the wage settlements in the automotive conditions in financial markets and volatile tive industry later in the year, should they prove market attitudes. to be higher than the generally restrained pattern It was noted that growth in nominal GNP to date, might have a pervasive effect on other might moderate relatively little if business and settlements, while others thought the circumconsumer spending remained strongly buoyed by stances in that industry were unique. a highly stimulative fiscal policy. In that connec- A more optimistic view of the outlook for tion members commented that credit growth had inflation emphasized the possibility of currently shown no sign of slowing so far and there were, relatively favorable wage-cost developments as yet, no significant indications of a stiffening in continuing for some time. In particular, producloan standards and credit availability; in fact, tivity growth might not diminish as much as there were indications of aggressive lending some observers expected, given the prospect practices in real estate and other areas. On the that many businesses would continue their efother hand, some members stressed the cyclical forts toward greater operating efficiencies. One tendency for a maturing expansion to slow and member also observed that the relatively rapid they saw some evidence already pointing in that growth in the labor force over the course of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin • August 1984 recent months, if it persisted, would have favor- reserve positions. The members anticipated that able wage-cost implications. this policy would continue to be associated with In the Committee's discussion of policy for the growth of M l and M2 at annual rates of around weeks ahead, most of the members supported a 6V2 and 8 percent for the period from March to proposal to maintain the current degree of re- June and with growth of M3 at an annual rate of straint, although some sentiment in favor of about 10 percent, somewhat above the objective marginally greater restraint was also expressed. set in March for the second quarter. It was In the view of most members, no significant agreed that the intermeeting range for the federal change in policy—in either direction—was desir- funds rate would remain at IVi to 1V/2 percent. It able at this time in light of the performance of the was also recognized that, within the context of economy, the behavior of the monetary aggre- this overall policy approach, operations might gates, and conditions in financial markets. Under need to be modified if unusual financial strains present circumstances, it was argued, any signifi- appeared to be developing. cant further restraint would produce added In keeping with the Committee's usual pracstrains in interest-sensitive sectors of the econo- tice, the members contemplated that operations my such as housing and agriculture and would might be adjusted during the intermeeting period incur an undue risk of a pronounced effect on toward implementing somewhat greater or somealready somewhat unsettled financial markets, what lesser restraint on reserves if monetary with adverse effects on economic activity. At the growth should prove to be significantly faster or same time, the apparent strength of the ongoing slower than targeted for the current quarter. In expansion and inflationary concerns argued the view of most members, the implementation against any significant easing. An argument ad- of open market operations should be equally vanced in favor of slightly greater restraint was sensitive to the potential need for greater or that such a policy would tend to improve the lesser restraint over the weeks ahead. Any such prospects of achieving a desirable moderation in adjustment should not be made automatically but the rate of business expansion and progress over should be undertaken only after an appraisal of time in containing inflation. the strength of economic activity and inflationary The members noted that, according to a staff pressures, and evaluations of conditions in finananalysis, implementation of approximately the cial and banking markets and the rate of growth current degree of reserve restraint was likely to in total domestic nonfinancial debt. continue to be consistent with attainment of the At the conclusion of the meeting, the following growth objectives for Ml and M2 that the Com- domestic policy directive was issued to the Fedmittee had previously established for the second eral Reserve Bank of New York: quarter. Growth in M3 was expected to exceed The information reviewed at this meeting suggests the second-quarter objective because depository that growth in real GNP, while moderating from the institutions were currently making more active unusually strong first-quarter pace, remains relatively use of managed liabilities than had been antici- rapid in the current quarter. In April, industrial production and nonfarm payroll employment rose subpated to finance their share of the large rise in stantially following decreased growth in March; the total credit. civilian unemployment rate was unchanged at 7.8 A few members favored raising the current percent in March and April as the labor force inintermeeting range for the federal funds rate by a creased appreciably. Retail sales grew rapidly in April small amount as a technical adjustment to bring after two months of decline, and housing starts recovered to a rate equaling their first-quarter average. the present trading level of the federal funds rate Information on outlays and spending plans generally closer to the midpoint of the range. However, suggests continuing strength in business fixed investmost of the members preferred to retain the ment. Since the beginning of the year, prices and current range, which they believed was likely to wages have continued to rise at about the same pace as encompass the probable trading range over the in 1983. intermeeting period. Ml changed little in April on average, but data available for early May suggest a considerable At the conclusion of the discussion, all but one strengthening. In April M2 grew about in line with member agreed that no change should be made at expectations while M3 expanded more rapidly than this time in the existing degree of pressure on anticipated. From the fourth quarter of 1983 through Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 649 April, Ml grew at a rate a little below the midpoint of The Committee understood that policy implementathe Committee's range for 1984; M2 increased at a rate tion would require continuing appraisal of the relationin the lower part of its longer-run range, while M3 ships not only among the various measures of money expanded at a rate a bit above the upper limit of its and credit but also between those aggregates and range. Total domestic nonfinancial debt apparently is nominal GNP, including evaluation of conditions in growing at a pace above the Committee's monitoring domestic credit and foreign exchange markets. range for the year, with borrowing by businesses In the short run, the Committee seeks to maintain continuing to be concentrated in the short-term mar- existing pressures on bank reserve positions. This is kets. Interest rates have risen considerably further expected to be consistent with growth in Ml, M2, and since late March. On April 6, the Federal Reserve M3 at annual rates of around 6V2, 8, and 10 percent, announced an increase in the discount rate from 8V2 to respectively, during the period from March to June. 9 percent. Recently, day-to-day market conditions Somewhat greater reserve restraint might be accepthave reflected considerable sensitivity to potential able in the event of more substantial growth of the liquidity strains, as highlighted by problems of one monetary aggregates, while somewhat lesser restraint large bank, and to uncertainties about the financial and might be acceptable if growth of the monetary aggrebudgetary outlook generally. gates slowed significantly. In either case, such a The foreign exchange value of the dollar against a change would be considered only in the context of trade-weighted average of major foreign currencies appraisals of the continuing strength of the business has risen considerably further since late March to a expansion, inflationary pressures, financial market level close to the peak in early January. The merchan- conditions, and the rate of credit growth. The Chairdise trade deficit widened further in the first quarter, man may call for Committee consultation if it appears as a sharp rise in non-oil imports offset a substantial to the Manager for Domestic Operations that pursuit rise in exports. of the monetary objectives and related reserve paths The Federal Open Market Committee seeks to fos- during the period before the next meeting is likely to ter monetary and financial conditions that will help to be associated with a federal funds rate persistently reduce inflation further, promote growth in output on a outside a range of IV2 to IIV2 percent. sustainable basis, and contribute to an improved pattern of international transactions. The Committee es- Votes for this action: Messrs. Volcker, Solomon, tablished growth ranges for the broader aggregates of 6 Boehne, Corrigan, Gramley, Mrs. Horn, Messrs. to 9 percent for both M2 and M3 for the period from Martin, Partee, Rice, and Wallich. Vote against this the fourth quarter of 1983 to the fourth quarter of 1984 action: Mr. Boykin. (Absent and not voting: Mrs. The Committee also considered that a range of 4 to 8 Teeters.) percent for Ml would be appropriate for the same period, taking account of the possibility that, in the light of the changed composition of Ml, its relation- Mr. Boykin dissented because he believed a ship to GNP over time may be shifting. Pending directive calling for somewhat greater reserve further experience, growth in that aggregate will need restraint and marginally lower monetary growth to be interpreted in the light of the growth in the other would improve the prospects for curbing inflamonetary aggregates, which for the time being would continue to receive substantial weight. The associated tion and achieving sustainable expansion without range for total domestic nonfinancial debt was set at 8 incurring a material risk of unsettling financial to 11 percent for the year 1984. markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

651 Legal Developments AMENDMENTS TO REGULATION L (1) Both are depository institutions, each has an office in the same relevant metropolitan statistical The Office of the Comptroller of the Currency, the area, and either institution has total assets of $20 Board of Governors of the Federal Reserve System, million or more; the Federal Deposit Insurance Corporation, the Feder- (2) Offices of depository institution affiliates of both al Home Loan Bank Board, and the National Credit are located in the same relevant metropolitan statis- Union Administration (collectively referred to as the tical area and either of the depository institution "agencies") are amending their respective regulations affiliates has total assets of $20 million or more; or implementing the Depository Institution Management (3) One is a depository institution that has an office Interlocks Act, which generally prohibits certain man- in the same relevant metropolitan statistical area as agement official interlocks between unaffiliated depos- a depository institution affiliate of the other and itory institutions and depository holding companies either the depository institution or the depository depending upon their asset size and location. The institution affiliate has total assets of $20 million or amendments conform the regulations to a change in more. the Depository Institution Management Interlocks Act 4. Section 212.6 is amended by revising paragraph (a) which deleted all references to "Standard Metropoli- to read as follows: tan Statistical Areas" ("SMSAs") and substituted therefore the new classifications for Metropolitan Sta- Section 212.6—Changes in Circumstances tistical Areas adopted by the Office of Management and Budget. (a) Non-grandfathered interlocks. If a person's service Effective July 10, 1984, the Board of Governors as a management official is not grandfathered under amends 12 C.F.R. Part 212 as set forth below: section 212.5 of this part, the person's service must be terminated if a change in circumstances causes such Part 212—Management Official Interlocks service to become prohibited. Such a change may include, but is not limited to, an increase in asset size 1. The authority citation for Part 212 reads as follows: of an organization due to natural growth, a change in Authority: 12 U.S.C. 3201 et seq. relevant metropolitan statistical area or community 2. Section 212.2 is amended by adding a new para- boundaries or the designation of a new relevant metrograph (n) to read as follows: politan statistical area, an acquisition, merger, or consolidation, the establishment of an office, or a Section 212.2—Definitions disaffiliation. (n) "Relevant metropolitan statistical area" means a Primary Metropolitan Statistical Area, a Metropolitan BANK HOLDING COMPANY, BANK MERGER, AND Statistical Area, or a Consolidated Metropolitan Sta- BANK SERVICES CORPORATION ORDERS ISSUED tistical Area that is not comprised of designated Pri- BY THE BOARD OF GOVERNORS mary Metropolitan Statistical Areas as defined by the Office of Management and Budget. Orders Issued Under Section 3 of Bank Holding 3. Section 212.3 is amended by revising paragraph (b) Company Act to read as follows: Commercial Landmark Corporation Section 212.3—General Prohibitions Muskogee, Oklahoma Order Approving Acquisition of a Bank Holding (b) Metropolitan Statistical Area. A management offi- Company cial of a depository organization may not serve at the same time as a management official of another deposi- Commercial Landmark Corporation, Muskogee, Oklatory organization not affiliated with it if: homa, a bank holding company within the meaning of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin • August 1984 the Bank Holding Company Act (12 U.S.C. § 1841 et representing 2.1 percent of the total deposits in comseq.), has applied for approval under section 3 of the mercial banks in the market. Upon consummation of Act to acquire The First Tahlequah Corporation, Tah- the proposal, Applicant would control 34.1 percent of lequah, Oklahoma ("Company"), and thereby indi- the total deposits in commercial banks in the market. rectly acquire First National Bank of Tahlequah, Tah- The Muskogee banking market is concentrated, with a lequah, Oklahoma ("Tahlequah Bank"), and First four-firm concentration ratio of 85.9 percent and a National Bank of Fort Gibson, Fort Gibson, Oklaho- Herfindahl-Hirschman Index ("HHI") equal to 2118. ma ("Fort Gibson Bank"). Upon consummation of the proposed transaction, the Notice of the application, affording opportunity for four-firm concentration ratio would increase to 88 interested persons to submit comments, has been percent and the HHI would increase by 134 points to given in accordance with section 3(b) of the Act. The 2252.4 time for filing comments has expired, and the applica- In view of the significant expansion of the commertion and all comments received have been considered cial lending po wers of federal thrift institutions authoin light of the factors set forth in section 3(c) of the rized in the Garn-St Germain Depository Institutions Act. Act of 1982, the Board has, in a number of recent Applicant, the 18th largest commercial banking or- cases, considered the presence and extent of competiganization in Oklahoma, controls two banks with total tion offered by thrift institutions in the relevant bankdeposits of $154 million, representing 0.6 percent of ing market in analyzing the competitive effects of a the total deposits in commercial banks in Oklahoma.1 proposal.5 Two thrift institutions operate in the Mus- Company, with deposits of $78.8 million is the 66th kogee banking market and are the largest and third largest commercial banking organization in the state largest depository institutions in the market. Together, and controls 0.3 percent of the total deposits in com- these thrift institutions control $217 million in deposmercial banks in the state. After consummation of the its, representing approximately 36.4 percent of the proposal, Applicant would become the 11th largest total deposits in the market. One of these thrift institucommercial banking organization in the state and tions, Victor Federal Savings and Loan Association, is Applicant would control 0.9 percent of the total depos- active in soliciting commercial loan business and its in commercial banks in the state. Accordingly, prominently advertises itself as a bank.6 Both of the consummation of this proposal would not have a thrift institutions in the market offer NOW accounts significant effect on the concentration of commercial and make consumer loans. Accordingly, the Board has banking resources in Oklahoma. considered the presence of thrift institutions in the Tahlequah Bank operates in the Cherokee County Muskogee banking market as a significant factor in banking market where Applicant is not represented.2 assessing the competitive effects of this transaction.7 With deposits of $70.9 million, Tahlequah Bank ranks Consequently, while consummation of the proposal as the largest of the four commercial banking organiza- would eliminate some existing competition in the tions in the market and controls 51.1 percent of the relevant banking market, the Board has determined deposits in commercial banks in the market. Inasmuch that, in view of all of the facts of record, consummaas Applicant is not currently represented in this mar- tion of this proposal would not have a significant ket, consummation of the proposal would not have any adverse effect on competition in the Muskogee banksignificant adverse effect upon existing competition in ing market. the market. The financial and managerial resources of Appli- Applicant's bank subsidiary, Commercial Bank and cant, its subsidiary banks, Tahlequah Bank and Fort Trust Company, Muskogee, Oklahoma ("Commercial Bank"), and Fort Gibson Bank both operate in the Muskogee banking market.3 Commercial Bank is the 4. Under the Department of Justice Merger Guidelines, a market in which the post-merger HHI exceeds 1800 is considered highly concenlargest of the seven commercial banking organizations trated, and a merger that produces an increase in excess of 100 points in this market, with deposits of $121.1 million, repre- would generally be subject to challenge by the Department. The senting 32 percent of the total deposits in commercial Department of Justice, however, has not submitted any objection to the proposal. banks in the market. Fort Gibson Bank is the smallest 5. See, e.g., NCNB Corporation, 70 FEDERAL RESERVE BULLETIN bank in the market, with deposits of $7.9 million, 225 (1984); Barnett Banks of Florida, 69 FEDERAL RESERVE BULLETIN 44 (1983); First Tennessee National Corporation, 69 FEDERAL RE- SERVE BULLETIN 298 (1983). 6. Victor Federal recently won a lawsuit brought by the Oklahoma Bankers Association, which sought to enjoin Victor Federal from 1. All banking data are as of June 30, 1983. using the words "bank" and "banking" in its advertising. 2. The Cherokee County banking market is approximated by Cher- 7. If 50 percent of the deposits held by thrift institutions were okee County, Oklahoma. included in the calculation of market concentration, upon consumma- 3. The relevant banking market is approximated by the Muskogee, tion of the transaction, the HHI would increase by 80 points to 1618 Oklahoma RMA. Tahlequah Bank acquired Fort Gibson Bank in points and the four-firm concentration ratio would be 70.8 percent. satisfaction of a debt previously contracted. Applicant would control 26.5 percent of market's deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 653 Gibson Bank, are regarded as generally satisfactory. ceived in light of the factors set forth in section 3(c) of The Board notes that this proposal entails a significant the Act, 12 U.S.C. § 1842(c). increase in Applicant's debt level. However, projec- Applicant, a multibank holding company, is the tions indicate that Applicant can service its debt and largest banking organization in Arkansas. It has eight maintain a satisfactory consolidated capital position. subsidiary banks with total deposits of $1.2 billion,1 Applicant's overall financial resources would remain which represents 9.8 percent of total deposits in comgenerally satisfactory following consummation of the mercial banks in the state. CBI controls 94 percent of proposal, and Applicant's consolidated capital ratios the outstanding shares of First State Bank and Trust will remain above the levels set forth in the Board's Company ("First State Bank"), Conway, Arkansas. Capital Adequacy Guidelines. Considerations relating First State Bank holds total deposits of $107 million, to convenience and needs of the community to be which represents 0.8 percent of total deposits in Arserved also are consistent with approval. Based upon kansas. NBC controls all of the voting shares of the foregoing and all the facts of record, the Board has National Bank of Commerce of Pine Bluff ("Pine Bluff determined that consummation of the proposed trans- Bank"), Pine Bluff, Arkansas. Pine Bluff Bank holds action would be in the public interest and that the total deposits of $159 million, which represents 1.3 application should be approved. percent of total deposits of commercial banks in the On the basis of the record, the application is ap- state. Harrison Bank has total deposits of $65 million, proved for the reasons summarized above. The trans- which represents 0.5 percent of total deposits in comaction shall not be consummated before the thirtieth mercial banks in the state. The same person controls calendar day following the effective date of this Order, CBI, NBC, and Harrison Bank, which have combined or later than three months after the effective date of deposits of $330 million and represent 2.6 percent of this Order, unless such period is extended for good total deposits in commercial banks in Arkansas. Upon cause by the Board or by the Federal Reserve Bank of consummation of this proposal, Applicant would re- Kansas City pursuant to delegated authority. main the largest banking organization in Arkansas. It By order of the Board of Governors, effective would control total deposits of approximately $1.6 July 25, 1984. billion, which represents 12.4 percent of the total deposits in commercial banks in the state. Banking resources are relatively unconcentrated in Voting for this action: Vice Chairman Martin and Governors Wallich, Partee, Gramley, and Seger. Absent and not Arkansas, which has a four-firm concentration ratio of voting: Chairman Volcker and Governor Rice. 22.4 percent. Moreover, Arkansas law limits the size of bank holding companies in Arkansas.2 Thus, con- JAMES MCAFEE summation of this proposal would not have any sub- [SEAL] Associate Secretary of the Board stantially adverse effects upon the concentration of banking resources in Arkansas. No bank or bank holding company that Applicant First Arkansas Bankstock Corporation proposes to acquire operates in the same geographic Little Rock, Arkansas market as any of Applicant's subsidiary banks. Moreover, no principal of Applicant is a principal of another Order Approving Acquisition of Bank Holding depository institution in any of the relevant markets of Companies and Bank the bank or the bank holding companies to be acquired. Thus, this proposal will not eliminate any First Arkansas Bankstock Corporation, Little Rock, existing competition in the line of commerce denoted Arkansas, has applied for the Board's approval under by commercial banking. section 3(a)(3) of the Bank Holding Company Act Applicant currently operates an industrial loan orga- ("Act"), 12 U.S.C. § 1842(a)(3), to acquire 100 per- nization, National Credit Corporation ("NCC"), Pine cent of the voting shares of Conway Bancshares, Inc. Bluff, Arkansas, in the Jefferson County banking mar- ("CBI"), Conway, Arkansas; 98.2 percent of the voting shares of the First National Bank in Harrison ("Harrison Bank"), Harrison, Arkansas; and 94.1 percent of the voting shares of National Bankshares 1. Unless otherwise noted, deposit data are as of December 31, Corporation ("NBC"), Pine Bluff, Arkansas. 1983. Notice of the applications, affording an opportunity 2. Ark. Stat. Ann. § 67-2112 (1983). Under section 67-2112(B), a bank holding company cannot own or control banks that have more for interested persons to submit comments, has been than 12 percent (15 percent as of December 1984) of the total given in accordance with section 3(b) of the Act. The individual, partnership, and corporate ("IPC") deposits held by all state and national banks having principal offices in the state of time for filing comments has expired, and the Board Arkansas. Applicant's IPC deposits will be within the limitation upon has considered the application and all comments re- consummation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin • August 1984 ket.3 NCC does not offer transaction accounts, but siderations rel ated to the convenience and needs of the does compete with Pine Bluflf Bank and the other communities to be served are consistent with apcommercial banks in the Jefferson County market by proval. offering consumer, commercial, and residential real On the basis of the record, the application is apestate loans. proved for the reasons summarized above. The trans- In the Jefferson County market, NCC has approxi- action shall not be consummated before the thirtieth mately $3.9 million in direct consumer loans, and $5.8 calendar day following the effective date of this Order, million in consumer real estate loans. NCC's share of or later than three months after the effective date of these products, on the basis of bank, S&L, and this Order, unless such period is extended for good industrial loan assets in Jefferson County, is 5.3 per- cause by the Board or by the Federal Reserve Bank of cent, and 3 percent, respectively. Pine Bluflf Bank has St. Louis, acting pursuant to delegated authority. 8 percent and 9 percent, of these respective products. By order of the Board of Governors, effective With regard to commercial lending, NCC holds only July 2, 1984. $1.7 million in such loans, and there are many organizations outside of the local banking market that offer Voting for this action: Chairman Volcker and Governors such loans, and would be considered competitors for Martin, Partee, Rice, and Gramley. Absent and not voting: this line of business. On balance, the Board concludes Governor Wallich. that any adverse competitive effects associated with JAMES MCAFEE this proposal are not significant. [SEAL] Associate Secretary of the Board The Board also has considered the effect of this proposal on potential competition. In doing so the Board analyzed this proposal in light of its proposed The Frankford Corporation market extension merger guidelines.4 Under these Philadelphia, Pennsylvania guidelines, Applicant would be considered a probable future entrant in the Jefferson County, Harrison, and Order Approving Acquisition of a Bank Faulkner County markets.5 However, the Jefferson County, Harrison, and Faulkner County markets The Frankford Corporation, Philadelphia, Pennsylvawould not be considered attractive for foothold entry nia, a bank holding company within the meaning of the under the Board's guidelines, and Arkansas law pro- Bank Holding Company Act, has applied for the hibits an existing bank holding company from estab- Board's approval under section 3(a)(3) of the Act lishing or acquiring a de novo bank. In addition, no (12 U.S.C. § 1842(a)(3)) to acquire all of the outstandfoothold entry possibilities exist in the Faulkner Coun- ing voting shares of Colonial Savings Bank, Philadelty market. Moreover, the Harrison market is only phia, Pennsylvania ("Bank"). Bank is a state-charmoderately concentrated. On the basis of all the facts tered savings bank operating in mutual form, the of record, the Board concludes that consummation of accounts of which are insured by the FDIC. Bank will the proposal would not result in any significant ad- convert to a state-chartered stock savings bank in verse effect on existing or probable future competi- connection with this proposal. tion. Notice of the application, affording opportunity for The financial and managerial resources and future interested persons to submit comments, has been prospects of Applicant, its subsidiaries, and the banks given in accordance with section 3(b) of the Act. The to be acquired are generally satisfactory. Affiliation time for filing comments and views has expired, and with Applicant will allow the banks to be acquired to the Board has considered the application and all offer some new services to their customers, and con- comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). The Board has previously determined that a statechartered stock savings bank is a "bank" for the purposes of the Act if it accepts demand deposits, 3. The Jefferson County banking market is approximated by Jefferengages in the business of making commercial loans, son County, Arkansas. 4. "Policy Statement of the Board of Governors of The Federal and is not covered by the exemption created by the Reserve System for Assessing Competitive Factors Under the Bank Garn-St Germain Depository Institutions Deregula- Merger Act and the Bank Holding Company Act," 47 Federal• Register 9017 (March 3, 1982). Although the proposed policy state- tion Act of 1982 for FSLIC insured thrift institutions.1 ment 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 future competition. 5. The Harrison, Arkansas banking market is approximated by the counties of Boone, Marion, Newton, and Searcy, Arkansas. The 1. The One Bancorp, 70 FEDERAL RESERVE BULLETIN 359 (1984); Faulkner County banking market is approximated by Faulkner Coun- Amoskeag Bank Shares, 69 FEDERAL RESERVE BULLETIN 860 (1983); ty, Arkansas. First NH Banks, Inc., 69 FEDERAL RESERVE BULLETIN 874 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 655 Bank accepts demand deposits and engages in the The record of this application also indicates that the business of making commercial loans, and its deposits proposed transaction would significantly benefit the are not insured by the FSLIC. Accordingly, the Board convenience and needs of the community to be served has determined that Bank is a "bank" for purposes of by ensuring that Bank would remain a viable competithe Act and has considered the application in light of tor in the market. Applicant proposes to offer new the requirements of section 3 of the Act pertaining to products and services to Bank's customers. Accordthe acquisition of banks. ingly, the Board concludes that considerations relating Applicant is the 64th largest depository institution to the convenience and needs of the community are among commercial banks and savings banks in Penn- consistent with approval of this proposal. sylvania, controlling one banking subsidiary, Frank- Based on the foregoing and other facts of record, the ford Trust Company, Philadelphia, Pennsylvania, with Board has determined that consummation of the prodeposits of $223.2 million.2 Bank is the 158th largest posed transaction would be in the public interest and depository institution among commercial banks and that the application should be, and hereby is, apsavings banks in Pennsylvania with deposits of $71.4 proved. The transaction shall not be consummated million. Upon consummation, Applicant would con- before the thirtieth calendar day following the effective trol less than 0.3 percent of the total deposits in date of the Order or later than three months after the commercial banks and savings banks in Pennsylvania effective date of this Order, unless such period is and would become the 50th largest depository institu- extended for good cause by the Board or by the tion among commercial banks and savings banks in the Federal Reserve Bank of Philadelphia acting pursuant state. The Board has determined that the transaction to delegated authority. would not have a significant effect upon the concentra- By order of the Board of Governors, effective tion of banking resources in Pennsylvania. July 25, 1984. Bank is the 82nd largest depository institution in the "Philadelphia, Pennsylvania, PA-NJ PMSA" banking Voting for this action: Vice Chairman Martin and Govermarket,3 and controls 0.20 percent of the total deposits nors Wallich, Partee, Gramley, and Seger. Absent and not in depository institutions in the market. Applicant's voting: Chairman Volcker and Governor Rice. existing banking subsidiary operates in the same market as Bank, where it is the 20th largest commercial JAMES MCAFEE banking organization with 0.80 percent of total depos- [SEAL] Associate Secretary of the Board its in commercial banks. Among all depository institutions, Applicant is the 37th largest and controls 0.40 percent of the total deposits in depository institutions. Security Richland Bancorporation Given Applicant's and Bank's relatively low rank and Miles City, Montana small share of deposits in the market, the Board concludes that consummation of the proposal would Order Approving Acquisition of a Bank not have any significant effect on existing or probable future competition nor would it significantly increase Security Richland Bancorporation, Miles City, Monthe concentration of banking resources in this market. tana, a bank holding company within the meaning of The financial and managerial resources and future the Bank Holding Company Act, has applied for the prospects of Applicant are regarded as satisfactory Board's approval under section 3(a)(3) of the Act and consistent with approval of this proposal. Con- (12 U.S.C. § 1842(a)(3)) to acquire all of the outstandsummation of this transaction would strengthen ing voting shares of The First National Bank of Bank's financial and managerial resources. Applicant Glendive, Glendive, Montana ("Bank"). has indicated that it will provide Bank with additional Notice of the application, affording opportunity for capital upon consummation and will provide manage- interested persons to submit comments, has been ment support to Bank's existing management. Accord- given in accordance with section 3(b) of the Act. The ingly, the Board has concluded that financial and time for filing comments has expired, and the Board managerial considerations are consistent with approv- has considered the application and all comments real of this proposal. ceived in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant is the seventh largest banking organization in Montana. It controls two banking subsidiaries, First Security Bank and Trust of Miles City, Miles 2. Banking data are as of December 31, 1983. 3. The Philadelphia, Pennsylvania, PA-NJ PMSA banking market City, Montana, and Richland National Bank and includes the Philadelphia, Montgomery, Bucks, Chester, and Dela- Trust, Sidney, Montana, with deposits of $126.0 milware Counties in Pennsylvania, and the Camden, Burlington, and Gloucester Counties in New Jersey. lion, representing 2.3 percent of the total deposits in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin • August 1984 commercial banks in the state.1 Bank, the 14th largest On the basis of the facts of record, the application to banking organization in Montana, with deposits of acquire Bank is approved for the reasons summarized $51.7 million, controls 0.9 percent of the total deposits above. The transaction shall not be consummated in commercial banks in the state. Applicant's acquisi- before the thirtieth calendar day following the effective tion of Bank would increase Applicant's statewide date of this Order or later than three months after the share of deposits in commercial banks to 3.2 percent effective date of this Order, unless such period is and Applicant's rank in the state would remain un- extended for good cause by the Board or by the changed. Accordingly, the Board concludes that the Federal Reserve Bank of Minneapolis acting pursuant acquisition of Bank would not have a significant effect to delegated authority. upon the concentration of banking resources in By order of the Board of Governors, effective Montana. July 20, 1984. Bank is the largest of six banking organizations in the relevant banking market, and controls 32 percent Voting for this action: Chairman Volcker and Governors of the total deposits in commercial banks therein. Martin, Wallich, Partee, Rice, Gramley, and Seger. Neither of Applicant's banking subsidiaries operates in the same market as Bank. Consummation of the JAMES MCAFEE proposal would not have any effect on existing or [SEAL] Associate Secretary of the Board probable future competition or increase the concentration of banking resources in this market. The financial and managerial resources and the Selin Corporation capital position of Applicant and its subsidiary banks Chicago, Illinois are satisfactory. The proposed acquisition is substantial as a percentage of Applicant's total assets and is to Order Approving Acquisition of Additional Banks be funded through an increase in Applicant's indebtedness. The acquisition would result in a decline in Selin Corporation, Chicago, Illinois, has applied for Applicant's primary capital ratio. However, Appli- the Board's approval under section 3(a)(3) of the cant's capital would remain at a level consistent with Bank Holding Company Act ("Act"), 12 U.S.C. the minimum level specified in the Board's Capital § 1842(a)(3), to acquire all of the voting shares of Adequacy Guidelines for banking organizations of its Wheeling Trust & Savings Bank ("Wheeling Bank"), size.2 To address the Board's concerns with this Wheeling, Illinois; and at least 80 percent of the voting reduction in capital as well as the increase in Appli- shares of the following banks: American National cant's indebtedness, Applicant has submitted a capital Bank of South Chicago Heights ("South Chicago improvement plan under which it would increase its Bank"), South Chicago Heights, Illinois; First Nationprimary capital within a short period of time to a level al Bank of Crystal Lake ("Crystal Lake Bank"), that is materially above the minimum levels specified Crystal Lake, Illinois; and Wauconda National Bank in the Board's Guidelines. In light of Applicant's and Trust Co. ("Wauconda Bank"), Wauconda, Illicommitments, capital improvement plan and previous nois. favorable record of operations, the Board concludes Notice of the applications, affording an opportunity that Applicant's financial resources are sufficient to for interested persons to submit comments and views, meet its debt servicing obligations while maintaining has been given in accordance with section 3(b) of the an adequate capital position. Accordingly, the Board Act. The time for filing comments has expired, and the concludes that financial considerations are satisfac- Board has considered the applications and all comtory and consistent with approval of the application. ments received in light of the factors set forth in Considerations relating to the convenience and section 3(c) of the Act, 12 U.S.C. § 1842(c). needs of the community to be served are consistent Applicant has one banking subsidiary, First Nationwith approval of the application. Accordingly, it is the al Bank of Niles, Niles, Illinois. First National Bank of Board's judgment that the proposed acquisition is in Niles has total deposits of $101.2 million, which reprethe public interest and that the application should be sents 0.1 percent of the total deposits in commercial approved. banks in Illinois.1 One of Applicant's principals controls Northland Insurance Agency, Inc. ("Northland"), Chicago, Illinois, a bank holding company owning shares of South Chicago Bank; and Keeco, 1. Banking data are as of September 30, 1983. 2. See the Board's Capital Adequacy Guidelines, Regulation Y, Appendix A (12 C.F.R. 225, Appendix A), reprinted in Federal 1. Unless otherwise indicated, all deposit data are as of Decem- Reserve Regulatory Service, 11 3-1506. ber 31, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 657 Inc. ("Keeco"), Chicago, Illinois, a bank holding The Board, in acting on this application, has placed company owning shares of Wheeling Bank.2 South considerable weight on the fact that approval of this Chicago Bank holds total deposits of $51.2 million, proposal would facilitate the injection of additional which represents less than 0.1 percent of the total capital into one of the banks to be acquired, and on deposits in commercial banks in Illinois. Wheeling Applicant's commitments designed to maintain the Bank holds total deposits of $102 million, which repre- financial resources of the other banks. In light of these sents 0.1 percent of the total deposits in commercial facts, financial factors are consistent with approval of banks in Illinois. Crystal Lake Bank holds total depos- this proposal. Considerations relating to the conveits of $46.1 million, which represents less than 0.1 nience and needs of the communities to be served are percent of the total deposits in commercial banks in also consistent with approval of this application. Illinois. Wauconda Bank holds total deposits of $43.7 On the basis of the record, the application is apmillion, which represents less than 0.1 percent of the proved for the reasons summarized above. The transtotal deposits in commercial banks in Illinois. action shall not be consummated before the thirtieth Upon consummation of this transaction, Applicant calendar day following the effective date of this Order, would become the 24th largest commercial banking or later than three months after the effective date of organization in Illinois, and control total deposits of this Order, unless such period is extended for good $344.2 million, which represents approximately 0.3 cause by the Board or by the Federal Reserve Bank of percent of the total deposits in commercial banks in Chicago, acting pursuant to delegated authority. Illinois. Consummation of this proposal would have no By order of the Board of Governors, effective significant effect upon the concentration of banking July 17, 1984. resources in Illinois. Crystal Lake Bank competes in the Elgin banking Voting for this action: Chairman Volcker and Governors market,3 and Applicant's subsidiary bank does not Martin, Wallich, Rice, Gramley, and Seger. Absent and not compete in that market. Accordingly, consummation voting: Governor Partee. of the proposal would have no effect on competition in JAMES MCAFEE that market. Applicant, South Chicago Bank, Wau- [SEAL] Associate Secretary of the Board conda Bank, and Wheeling Bank all compete in the Chicago banking market.4 Applicant's subsidiary bank is the 110th largest banking organization in the market, Orders Issued Under Section 4 of Bank Holding controlling 0.1 percent of the total deposits in commer- Company Act cial banks therein. The combined market share of the three banks to be acquired in the Chicago banking First Bank System, Inc. market is 0.3 percent of the total deposits in commer- Minneapolis, Minnesota cial banks. In view of the small size and market shares of Applicant and the banks to be acquired, the uncon- Order Approving Application to Acquire a General centrated nature of the Chicago banking market,5 and Insurance Agency the fact that this proposal is essentially a reorganization of the existing ownership interests of Applicant's First Bank System, Inc., Minneapolis, Minnesota, a principals, the Board concludes that the amount of bank holding company within the meaning of the Bank existing competition that would be eliminated by this Holding Company Act of 1956, as amended (12 U.S.C. proposal is not significant. Accordingly, competitive § 1841 et seq.) ("BHC Act"), has applied under considerations are consistent with approval of the section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) proposal. and section 225.23(a)(2) of the Board's Regulation Y (12 C.F.R. § 225.23(a)(2)), 49 Federal Register 974 (1984)), for the Board's approval to acquire 100 percent of the voting shares of Hoiness-LaBar Insurance 2. The transaction proposed by Applicant would involve the acqui- Company, Billings, Montana ("Company"), a general sition by Northland and Keeco of more than 5 percent of the voting shares of Applicant. Thus, before this transaction is consummated, insurance agency with its principal office in Billings, Northland and Keeco must seek the Board's prior approval under Montana, and an additional office in Worland, Wyosection 3(a)(3) of the Act, 12 U.S.C. § 1842(a)(3), to acquire more than ming.1 5 percent of the voting shares of Applicant. 3. The Elgin banking market is approximated by the southern half of McHenry County, the northern third of Kane County, and includes the city of Elgin, Illinois. 1. Company engages in the activity of selling to individual and 4. The Chicago banking market is approximated by Cook, DuPage, commercial customers, as agent or broker, multiline insurance, such and Lake Counties, Illinois. as fire, property, casualty, life, surety, professional liability, special- 5. The share of deposits held by the four largest banking organiza- ity, and inland marine insurance. Company also performs, on an tions in the market is 51 percent and would not increase as a result of incidental basis, third-party claims administration services for one of this proposal. Company's commercial customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin • August 1984 Notice of the application, affording interested per- tory of the exemption, to permit a qualifying grandsons an opportunity to submit comments, has been fathered bank holding company to engage in insurance duly published (49 Federal Register 23696 (1984)). The agency activities without limiting those activities to time for filing comments has expired, and the Board the locations where the company did business prior to has considered this application and all comments 1971.4 Accordingly, the Board may approve this applireceived in light of the public interest factors set forth cation, notwithstanding the fact that Applicant was not in section 4(c)(8) of the BHC Act. engaged in insurance agency activities in Wyoming, Applicant, with total consolidated assets of $20.6 where Company's second office is located, in 1971.5 billion,2 is one of the two largest commercial banking Applicant, through First System Agency of Monorganizations in Minnesota. Applicant controls 80 tana, indirectly controls one general insurance agency subsidiary banks in five states in the Midwest. In in Fort Benton, Montana, and another in Forsyth, addition, Applicant has a number of subsidiaries en- Montana. Fort Benton and Forsyth are located apgaged in permissible nonbanking activities, including proximately 181 and 96 miles from Billings, respective- First System Agencies, Inc., a company which holds ly, and neither agency operates in the same market the stock of 60 general insurance agencies indirectly served by Company. Accordingly, no existing compeowned by Applicant. tition will be eliminated in the general insurance agen- Title VI of the Garn-St Germain Depository Institu- cy area upon consummation of this transaction. tions Act of 1982 amended section 4(c)(8) of the BHC There is no evidence in the record to indicate that Act to provide that insurance agency activities are not consummation of Applicant's proposal would result in "closely related to banking" and thus are not permis- any undue concentration of resources, conflicts of sible activities for bank holding companies, unless the interests, unsound banking practices, or other adverse activities are included within one of seven specific effects. Moreover, the Board also has determined that exemptions (contained in clauses A through G of the balance of the public interest factors the Board is section 4(c)(8)). Applicant claims it is authorized to required to consider under section 4(c)(8) of the BHC engage in general insurance agency activities under Act is favorable. Applicant has indicated that it will exemption G, which exempts from the general insur- use its existing marketing and distribution system to ance prohibition of the Act insurance agency activities provide Company's customers with additional sources conducted by bank holding companies that received of insurance or special types of insurance more effi- Board approval, prior to 1971, to engage in such ciently. activities. Unless Applicant's proposal qualifies under Accordingly, based upon the foregoing and other this exemption or some other exemption in section facts of record, the Board has determined that the 4(c)(8), the operation of a general insurance agency is application should be and hereby is approved. This not presently a permissible activity for bank holding determination is subject to all the conditions set forth companies. in the Board's Regulation Y, including those in sec- The record indicates that on July 21,1959, Applicant tions 225.4(d) and 225.23(b) (12 C.F.R. §§ 225.4(d) and received approval from the Board under the provisions 225.23(b)), and to the Board's authority to require of the Bank Holding Company Act of 1956, to retain 19 such modification or termination of the activities of a insurance agencies (located in Minnesota, North Da- bank holding company or any of its subsidiaries as the kota, South Dakota, and Montana), which Applicant Board finds necessary to assure compliance with the had organized into one subsidiary, First Service Agen- provisions and purposes of the BHC Act and the cies, Inc. (45 FEDERAL RESERVE BULLETIN 917 Board's regulations and orders issued thereunder, or (1959)).3 Each of these 19 insurance agencies engaged to prevent evasion thereof. in a general insurance agency business and sold insur- This transaction shall be consummated not later ance to customers of Applicant's bank subsidiaries, as than three months after the effective date of this well as to the general public. Applicant has been Order, unless such period is extended for good cause engaged in general insurance agency activities on a continuous basis since receiving Board approval in 1959, and Applicant is one of 16 active bank holding 4. Norwest Corporation, 70 FEDERAL RESERVE BULLETIN 235 companies that qualifies for exemption G. (1984). 5. In another previous Order, the Board held that, for those In a previous Order, the Board interpreted exemp- companies that engaged in general insurance agency activities pursution G, consistent with the terms and legislative his- ant to Board approval prior to 1971, the continued operation of general insurance agencies, without restriction as to type of insurance sold, is permissible under exemption G of section 4(c)(8) of the BHC Act. Norwest Corporation, 70 FEDERAL RESERVE BULLETIN 470 (1984). 2. Data on Applicant's assets is as of March 31, 1984. Accordingly, the fact that Applicant may not have sold the exact type 3. The name of First Service Agencies, Inc. has been changed to of insurance that company sells does not prevent the Board from First System Agencies, Inc. approving the application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 659 by the Board or by the Federal Reserve Bank of leasing such property have been determined by the Minneapolis, acting pursuant to delegated authority. Board to be closely related to banking and permissible By order of the Board of Governors, effective for bank holding companies under Regulation Y, sub- July 16, 1984. ject to the conditions set forth therein (12 C.F.R. § 225.25(b)(5)). Voting for this action: Chairman Volcker and Governors Notice of the application, affording interested per- Martin, Partee, Rice, Gramley, and Seger. Abstaining from sons an opportunity to submit comments, has been this action: Governor Wallich. duly published (49 Federal Register 18179 (1984)). The time for filing comments has expired, and the Board has considered the application and all comments re- JAMES MCAFEE [SEAL] Associate Secretary of the Board ceived in light of the public interest factors set forth in section 4(c)(8) of the Act. Applicant, with banks in California and ten other First Interstate Bancorp states, is a multi-bank holding company with total Los Angeles, California domestic deposits of approximately $29.6 billion.4 Applicant's lead bank, First Interstate Bank of Califor- Order Approving Application to Engage in Leasing nia, is the fifth largest banking organization in Califor- Activities Through a Joint Venture nia, with total domestic deposits of approximately $12.6 billion, representing 7.4 percent of the total First Interstate Bancorp, Los Angeles, California deposits in commercial banks in that state. Applicant ("First Interstate"), a bank holding company within is also engaged in various nonbanking activities, inthe meaning of the Bank Holding Company Act (the cluding leasing, through nonbank subsidiaries. "Act")(12 U.S.C. §§ 1841 et seq.), has applied for the In view of the fact that the proposal involves the use Board's approval pursuant to section 4(c)(8) of the Act of a joint venture between a bank holding company (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the and a nonbanking company, the Board has analyzed Board's Regulation Y (12 C.F.R. § 225.23(a)), to the proposal with respect to its effects on existing engage in certain leasing activities through a joint competition between Applicant and Avidyne in the venture arrangement with Avidyne Group, Ltd., San relevant commercial leasing market.5 Both Applicant Francisco, California ("Avidyne"), a closely held and Avidyne are currently engaged in the commercial company that leases aircraft equipment. Applicant leasing business, but Applicant's leasing activities would conduct the activity through its subsidiary, differ from those of Avidyne. Applicant engages pri- First Interstate Lease Investments Corporation, Pasa- marily in lease servicing activities and does not have dena, California ("FILIC"), and Avidyne Financial the technical expertise to engage to any significant Services Company, Pasadena, California ("Compa- degree in the type of commercial leasing transactions ny"). Company would be a subsidiary of both FILIC proposed in this application.6 Avidyne does not have and Avidyne.1 sufficient capital or an adequate customer base to Under the joint venture arrangement, Company and engage in this activity independently. FILIC would originate, structure, syndicate and mar- The joint venture has been proposed to enable the ket tax-oriented,2 personal property lease transactions co-venturers to combine their differing strengths and for sophisticated customers throughout the United resources in order to engage in a leasing activity that States.3 The activities of leasing personal or real neither co-venturer would engage in separately. Furproperty or acting as agent, broker, or adviser in thermore, the commercial leasing industry in the United States has numerous participants, and this proposal involves an association of two participants that have 1. All of the voting shares of Company will be owned by Avidyne. FILIC will lend Company $750,000 and will purchase Company's subordinated debt securities for $750,000. These securities will be 4. Banking data are as of December 31, 1983. convertible into nonvoting preferred shares of Company equal to 25 5. The Board has previously expressed concerns regarding the percent of Company's total stockholders' equity. potential for undue concentration of resources or other adverse effects 2. Applicant proposes to offer a financial lease product under which that result through the combination in a joint venture of banking and a lessor can "leverage" a lease by borrowing up to 80 percent of the nonbanking institutions. Deutsch Bank AG, 67 FEDERAL RESERVE purchase price of the property from a long-term lender on a non- BULLETIN 449 (1981); Maryland National Corporation, 65 FEDERAL recourse basis, with rentals and the property pledged as collateral for RESERVE BULLETIN 271 (1979). the loan. The lessor derives certain tax advantages from these 6. Avidyne's contribution to the joint venture will be the technical transactions, including interest deductions and depreciation. expertise of its principals. Company, a newly organized subsidiary of 3. The joint venture may not solicit any leasing business for Avidyne, has been formed to serve as a mechanism to compensate the Avidyne, and Avidyne's leasing operations must be maintained sepa- principals in a manner that will permit them to share in the profits of rate and distinct from those of FILIC and Company. the proposed leasing business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin • August 1984 only de minimis shares of the market. Accordingly, the the United States that would provide most commercial Board's judgment is that consummation of this propos- banking services, with the exception of making comal would have no significant effects upon competition mercial loans (i.e., "nonbank banks"). in any relevant market. Notice of the application, affording interested per- Consummation of the proposal may be expected to sons an opportunity to submit comments and views, result in public benefits inasmuch as the joint venture has been duly published. The time for filing comments would enable Applicant to provide an additional leas- has expired and the Board has considered the applicaing service to its customers. The financial and manage- tion and all comments received in light of the factors rial resources of Applicant, FILIC and Company are set forth in section 4(c)(8) of the Act, 12 U.S.C. considered satisfactory, and there is no evidence in the § 1843(c)(8). record to indicate that consummation of the proposal First Interstate, with consolidated assets of $42.6 would result in undue concentration of resources, billion,1 proposes to commence the activity of estabunfair competition, conflicts of interests, unsound lishing and operating nonbank banks nationwide with banking practices, or other adverse effects on the the conversion of First Interstate Bancard Company, public interest. N.A. ("First Bancard"), Simi Valley, California, into Based on the foregoing and other facts of record, the a nonbank bank. First Bancard, with total assets of Board concludes that the balance of the public interest $139 million, is a national bank chartered in 1982. First factors it must consider under section 4(c)(8) of the Bancard has a full national bank charter, but has Act favors approval of the application. Accordingly, voluntarily limited its activities to credit card operathe Board has determined that the application should tions. The conversion of First Bancard into a nonbank be and hereby is approved. This determination is bank will be effected by transferring First Bancard's subject to all the conditions set forth in the Board's corporate credit card accounts (which are its only Regulation Y, including those in sections 225.4(d) and commercial loans) to another subsidiary of First Inter- 225.23(b), and to the Board's authority to require such state. First Bancard and the other proposed nonbank modification or termination of the activities of a bank banks would take demand deposits, and provide conholding company or any of its subsidiaries as the sumer and residential real estate loans, as well as trust Board finds necessary to assure compliance with the and investment advisory services. First Bancard will provisions and purposes of the Act and the Board's not make commercial loans as that term is defined in regulations and orders issued thereunder, or to pre- the Board's Regulation Y. vent evasion thereof. In U.S. Trust Corporation, the Board reluctantly By order of the Board of Governors, effective found that acceptance of demand deposits through an July 20, 1984. FDIC-insured national bank was a permissible nonbanking activity under the Act, as long as the Appli- Voting for this action: Chairman Volcker and Governors cant agreed not to make commercial loans as the Martin, Wallich, Partee, Rice, Gramley, and Seger. Board had defined that term in Regulation Y.2 There is no evidence in the record that consummation of this JAMES MCAFEE proposal would result in any undue concentration of [SEAL! Associate Secretary of the Board resources, decreased or unfair competition, conflicts of interest, unsound banking practices, or other adverse effects. Although the Board in U.S. Trust Corpo- First Interstate Bancorp ration relied on several conditions that were designed Los Angeles, California to prevent certain linkages between the nonbank bank and the Applicant, such conditions appear to be un- Order Conditionally Approving Application to necessary in this case because First Interstate could Establish and Operate a Nonbank Bank acquire a full service bank in California. First Interstate argues that section 225.23(b)(1) of First Interstate Bancorp ("First Interstate"), Los An- the Board's Regulation Y and the accompanying comgeles, California, a bank holding company within mentary eliminate the requirement of filing of applicathe meaning of the Bank Holding Company Act, tions before First Interstate opens subsequent de novo 12 U.S.C. § 1841 et seq., has applied for the Board's offices of First Bancard or forms de novo subsidiaries approval pursuant to section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), and section 225.23 of the Board's Regulation Y (to be codified at 12 C.F.R. § 225.23), to engage in the activity of establishing and 1. Unless otherwise indicated, asset data are as of March 31, 1984. 2. U.S. Trust Corporation, 70 FEDERAL RESERVE BULLETIN 371 operating national or state chartered banks throughout (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 661 to engage in the same activities as First Bancard, 225.23(b). The approval of this application is also unless the holding company is experiencing financial subject to the Board's authority to require modificaproblems. tion or termination of the activities of a bank holding That interpretation of section 225.23(b)(1) is incor- company or any of its subsidiaries as the Board finds rect. Section 225.23(b)(1) is not an absolute waiver of necessary to assure compliance with the provisions the Board's authority to require a notice or an applica- and purposes of the Act and the Board's regulations tion before de novo expansion of a previously ap- and orders, or to prevent evasions thereof. proved nonbanking activity. In section This transaction shall not be consummated later 225.23(b)(l)(iii), the Board expressly reserved the au- than three months after the effective date of this thority to require notice for the de novo expansion of a Order, unless such period is extended for good cause nonbanking activity previously approved by the by the Board, or by the Federal Reserve Bank of San Board. The commentary accompanying this provision Francisco, pursuant to delegated authority. states that the Board will invoke this authority "where By order of the Board of Governors, effective the Board wishes to monitor the expansion of a July 23, 1984. particular activity more closely." 49 Federal Register 794, 813 (1984). Voting for this action: Vice Chairman Martin and Gover- The application of First Interstate to engage nation- nors Wallich, Gramley, and Seger. Absent and not voting: wide in the activity of establishing and operating Chairman Volcker and Governors Partee and Rice. nonbank banks involves an activity the expansion of which the Board wishes to monitor more closely. The JAMES MCAFEE establishment of nonbank banks nationwide could [SEAL] Associate Secretary of the Board frustrate two purposes of the Act. First, nonbank banks may undermine the separation of banking and commerce. Second, nonbank banks may be used to Manufacturers Hanover Corporation avoid the prohibition against interstate banking con- New York, New York tained in section 3(d) of the Act. 12 U.S.C. § 1842(d). Although First Interstate's establishment of a nonbank Order Approving Application to Underwrite and bank only in California would not have such effects, Deal in Government Securities and Money Market the acquisition of nonbank banks in other states could Instruments and to Offer Investment Advisory undermine section 3(d). Moreover, the Board must Services consider many factors in approving an application under section 4(c)(8) of the Act, including the applica- Manufacturers Hanover Corporation, New York, ble banking statutes in each state in which First New York, a bank holding company within the mean- Interstate might open a de novo bank outside of ing of the Bank Holding Company Act, 12 U.S.C. California.3 This is especially true when the proposed § 1841 et seq. ("BHC Act"), has applied for the activity is not on Regulation Y's list of permissible Board's approval pursuant to section 4(c)(8) of the nonbanking activities, and when the relationship be- BHC Act and section 225.21(a) of the Board's Regulatween the public benefits of the activity and its possi- tion Y, 49 Federal Register 794 (1984), to be codified ble adverse effects may vary from state to state. Thus, at 12 C.F.R. § 225.21(a), to engage through its wholly the Board's approval of this application is expressly owned subsidiary, Manufacturers Hanover Money conditioned on First Interstate applying to the Board Market Corporation ("Corporation"), in underwritbefore it opens each subsequent de novo nonbank ing, dealing in, brokering, and purchasing and selling bank outside of California. obligations of the U.S. government and its agencies, Based upon the foregoing and all the facts of record, general obligations of the various states and their the Board has determined that the balance of public political subdivisions, and such other obligations that interest factors it must consider under section 4(c)(8) is state member banks of the Federal Reserve System favorable. Accordingly, the application is approved. may be authorized to underwrite and deal in under This determination is subject to the condition set forth 12 U.S.C. §§ 24 and 335, including money market in this Order and all of the conditions set forth in instruments such as certificates of deposit, and bank- Regulation Y, including sections 225.4(d) and ers acceptances. These activities, subject to certain conditions, have been determined by the Board to be permissible for bank holding companies in section 3. In general, the Board cannot approve applications under the Act 225.25(b)(16) of Regulation Y. In addition, Corporathat would be prohibited by a valid state law. Whitney National Bank tion will provide general economic information and v. Bank of New Orleans, 379 U.S. 411 (1965); Florida Association of specific investment advice on a nonfee basis to cus- Insurance Agents v. Board of Governors, 591 F.2d 334 (5th Cir. 1979). 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662 Federal Reserve Bulletin • August 1984 tomers concerning these securities and instruments. which also would reduce the potential for conflicts of The proposed advisory services also have been deter- interest, and the Board conditions its action herein on mined by the Board to be permissible for bank holding Applicant's disclosure to its customers of its interest companies in section 225.25(b)(4) of Regulation Y.1 as a principal in the proposed securities and instru- Notice of the application, affording opportunity for ments.5 Finally, Applicant's performance of these interested persons to submit comments, has been activities will add a new competitor in the market for given in accordance with section 4 of the BHC Act. these services and, therefore, will be procompetitive. (49 Federal Register 6170 and 49 Federal Register Based upon a consideration of all the relevant facts, 9271 (1984)). The time for filing comments has expired, the Board concludes that the balance of the public and the Board has considered the application and all interest factors that the Board is required to consider comments received in light of the public interest under section 4(c)(8) is favorable. Accordingly, the factors set forth in section 4(c)(8) of the BHC Act. application is hereby approved. This determination is Applicant, a bank holding company by virtue of its subject to all of the conditions set forth in Regulation control of Manufacturers Hanover Trust Company, Y, including those contained in sections 225.4(d), New York, New York ("Bank"), Manufacturers Han- 225.23(b), 225.25(b)(4), and 225.25(b)(16), and to the over, N.A., Rochester, New York, and Manufacturers Board's authority to require such modification or Hanover Bank, Wilmington, Delaware, has consoli- termination of the activities of a bank holding compadated assets of approximately $64.3 billion and is the ny or any of its subsidiaries as the Board finds fourth largest banking organization in the United necessary to assure compliance with the provisions States.2 Applicant, through its subsidiaries, engages in and purposes of the BHC Act and the Board's regulavarious permissible nonbanking activities. tions issued thereunder. Under section 4(c)(8) the Board is required to con- The transaction shall be made not later than three sider whether the performance of the proposed activi- months after the effective date of this Order, unless ties by Applicant would result in net public benefits. In such period is extended for good cause by the Board or the past, the Board has been concerned that the by the Federal Reserve Bank of New York, acting performance of investment advisory services in con- pursuant to delegated authority. nection with securities brokerage activities could cre- By order of the Board of Governors, effective ate conflicts of interests or other adverse effects within July 30, 1984. the meaning of section 4(c)(8).3 Although Congress has prohibited banks from un- Voting for this action: Vice Chairman Martin and Goverderwriting and dealing in most securities, it has ex- nors Wallich, Gramley, and Seger. Absent and not voting: cluded the securities at issue here from that prohibi- Chairman Volcker and Governors Partee and Rice. tion.4 Moreover, the 15 banks that are primary dealers in government securities routinely provide investment JAMES MCAFEE advice to their customers. Applicant's clients will be [SEAL] Associate Secretary of the Board limited to major corporations and sophisticated individuals who are experienced in dealing in these securities and instruments. The Board's regulation permit- Mark Twain Bancshares, Inc. ting investment advice requires that Applicant observe St. Louis, Missouri the standards of conduct applicable to fiduciaries, Order Approving Acquisition of a Mortgage Banking Company 1. Although Applicant has asserted that the provision of investment Mark Twain Bancshares, Inc., St. Louis, Missouri advisory services is incidental to its proposed underwriting and dealing activities, the Board does not believe it is necessary to decide ("Applicant"), a bank holding company within the this question at this time. meaning of the Bank Holding Company Act ("Act") 2. All banking data are as of December 31, 1983. (12 U.S.C. § 1841 et seq.), has applied for approval 3. Press Release of August 11, 1983, regarding discount securities brokerage as a permissible activity for bank holding companies. under section 4(c)(8) of the Act (12 U.S.C. 4. The Banking Act of 1933, commonly known as the Glass- Steagall Act, prohibits banks and bank holding companies from acting as an underwriter or dealer for securities except to the extent authorized for national banks. Pursuant to 12 U.S.C. §§ 24(7) and 335, 5. Applicant's proposed subsidiary would be a registered brokernational and state member banks are expressly authorized to under- dealer, and its government securities operations would be subject to write and deal in U.S. government and agency obligations, and the regulation of the National Association of Securities Dealers as well general obligations of states and their political subdivisions. Banks as to the anti-fraud provisions of the Securities Exchange Act of 1934. generally are authorized to deal in money market instruments as an Applicant has stated that it will abide by the standards of the NASD incident to the other activities expressly permitted by statute for and the anti-fraud provisions in the securities laws with regard to banks. money market instruments as well. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 663 § 1843(c)(8)) and section 225.23(a)(2) of the Board's Board's authority to require a holding company or any Regulation Y (12 C.F.R. § 225.23(a)(2)), to acquire of its subsidiaries to modify or terminate any activities Voss Mortgage Corp., St. Louis, Missouri ("Compa- necessary to assure compliance with or prevent evany"), through Mark Twain Mortgage Company, St. sion of the provisions and purposes of the Act and the Louis, Missouri, a wholly owned subsidiary of Appli- Board's regulations and orders. The transaction shall cant. The mortgage banking activities that Applicant be consummated not later than three months after the proposes to conduct have been determined by the effective date of this Order, unless that period is Board to be closely related to banking (12 C.F.R. extended for good cause by the Board or by the § 225.25(b)(1)). Federal Reserve Bank of St. Louis, acting pursuant to Notice of the application, affording opportunity for delegated authority. interested persons to comment, has been duly pub- By order of the Board of Governors, effective lished (49 Federal Register 19578, May 8, 1984). The July 23, 1984. time for filing comments and views has expired, and the Board has considered the application and all Voting for this action: Vice Chairman Martin and Govercomments received in light of the factors set forth in nors Wallich, Gramley, and Seger. Absent and not voting: Chairman Volcker and Governors Partee and Rice. section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). Applicant, with consolidated assets of $940.9 million, is the ninth largest commercial banking organiza- JAMES MCAFEE tion in Missouri, operating 11 subsidiary banks, with [SEAL] Associate Secretary of the Board total deposits of approximately $767.4 million.1 Mark Twain Mortgage Company was organized in 1981 for the purpose of conducting mortgage banking activities, New City Bancorp but has not yet commenced business. Orange, California Company has total assets of $4.1 million and engages in the origination and servicing of home mort- Order Approving Application to Engage in Insurance gage loans.2 While Applicant, through its subsidiary Activities banks, and Company both engage in mortgage banking activities in the St. Louis banking market, the Board New City Bancorp, Orange, California, a bank holding believes that, in view of Company's small size, the company within the meaning of the Bank Holding large number of competitors in the market, and the low Company Act ("Act"), has applied for the Board's barriers to entering the mortgage banking business, approval under section 4(c)(8) of the Act, 12 U.S.C. consummation of the proposal would not have a § 1843(c)(8), and section 225.23 of the Board's Regulasignificant adverse effect on competition in any rele- tion Y, 12 C.F.R. § 225.23, to engage in general vant market.3 insurance activities (except for the sale of life insur- In addition, there is no evidence in the record to ance and annuities) in a community that has a populaindicate that consummation of the proposal would tion greater than 5,000. Applicant, a bank holding result in undue concentration of resources, conflicts of company with total assets of $50 million or less, relies interests, unsound banking practices, or other adverse on the statutory language contained in section 601(F) effects on the public interest. Accordingly, the Board of the Garn-St Germain Depository Institutions Act of concludes that the balance of public interest factors 1982, 12 U.S.C. § 1843(c)(8)(F), as authorization for that it must consider under section 4(c)(8) of the Act this activity. favors approval of the application. Notice of the application, affording interested per- Based upon the foregoing and all the facts of record, sons an opportunity to submit comments on the prothe Board has determined that the application should posal, has been duly published. The time for filing be, and hereby is, approved. This determination is comments has expired and the Board has considered subject to all the conditions set forth in Regulation Y, the application and all comments received in light of including sections 225.4(d) and 225.23(b), and the the public interest factors set forth in section 4(c)(8) of the Act. Applicant, with total assets of $12 million,1 proposes to engage in general insurance agency activities in 1. All banking data are as of March 31, 1984. 2. Company also acts on a limited basis as agent for credit-related life and health insurance. Applicant will discontinue Company's credit-related insurance agency activities upon consummation of the proposed acquisition. 3. The St. Louis banking market is approximated by the St. Louis 1. Unless otherwise indicated, asset data is as of December 31, RMA. 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin • August 1984 Orange, California, by expanding the activities of its By order of the Board of Governors, effective subsidiary, New City Leasing.2 Applicant's subsidiary July 9, 1984. bank, New City Bank, Orange, California, has total assets of $9.5 million. Voting for this action: Chairman Volcker and Governors In order to approve an application under section Martin and Gramley. Abstaining from this action: Governor 4(c)(8) of the Act, the Board must determine that the Wallich. Absent and not voting: Governors Partee, Rice, and Seger. proposed activity is "so closely related to banking or managing or controlling banks as to be a proper JAMES MCAFEE incident thereto. .." 12 U.S.C. § 1843(c)(8). The [SEAL] Associate Secretary of the Board Board has recently found by order that the sale of general insurance by bank holding companies with total assets of $50 million or less is an activity that is Orders Issued Under Sections 3 and 4 of Bank closely related to banking within the meaning of sec- Holding Company Act tion 4(c)(8). A.S.B. Bancshares, Inc., 70 FEDERAL RESERVE BULLETIN 363 (1984); Whitewater Bancorp, Bank of Montreal Inc., 69 FEDERAL RESERVE BULLETIN 815 (1983).3 Montreal, Canada Section 4(c)(8) also requires the Board to determine that the performance of a proposed activity by an First Canadian! Financial U.S. Holdings individual applicant "can reasonably be expected to New York, New York produce benefits to the public . . . that outweigh possible adverse effects. . .", 12 U.S.C. § 1843(c)(8). The Order Approving Acquisition of Bank Holding Board's review of the record of this application indi- Company cates that Applicant's de novo entry into the general insurance market would provide greater convenience By Order dated July 25, 1984, the Board approved the to the public and increase competition in insurance applications of Bank of Montreal, Montreal, Canada, a services. Furthermore, there is no evidence in the registered bank holding company within the meaning record to indicate that consummation of the proposed of the Bank Holding Company Act ("the Act") transaction would result in unfair competition, con- (12 U.S.C. § 1841 et seq.), and its wholly owned flicts of interest, unsound banking practices or any subsidiary, First Canadian Financial U.S. Holdings, other effects that would be adverse to the public Inc., New York, New York, pursuant to section 3(a) interest. Accordingly, the Board concludes that the of the Act (12 U.S.C. § 1842(a)) to acquire all of the balance of the public interest factors it must consider outstanding voting shares of Harris Bankcorp, Inc., under section 4(c)(8) of the Act is favorable and Chicago, Illinois, a registered bank holding company consistent with approval. by virtue of its ownership of Harris Trust and Savings Based upon the foregoing, other facts of record, and Bank, Chicago, Illinois; Harris Bank Argo, Summit, Applicant's commitment, the Board has determined Illinois; Harris Bank Roselle, Roselle, Illinois; Bank of that the application is approved. This determination is Naperville, Naperville, Illinois; First National Bank of subject to all of the conditions set forth in Regulation Wilmette, Wilmette, Illinois; Hinsdale Capital Corpo- Y, including sections 225.4(d) and 225.23(b), and the ration, Chicago, Illinois, and its subsidiary, The First Board's authority to require a holding company or any National Bank of Hinsdale, Hinsdale, Illinois; of its subsidiaries to modify or terminate any activities Firstwin Corporation, and its subsidiary, The First necessary to assure compliance with or to prevent National Bank of Winnetka, Winnetka, Illinois; and evasion of the provisions and purposes of the Act, and Glencoe Capital Corporation, and its subsidiary, Glenthe Board's regulations and orders. The transaction coe National Bank, Glencoe, Illinois. The Board also shall be consummated not later than three months approved the applications of Bank of Montreal and after the effective date of this Order, unless that period First Canadian Financial U.S. Holdings, Inc., puris extended for good cause by the Board or by the suant to section 4(c)(8) of the Act (12 U.S.C. Federal Reserve Bank of San Francisco acting pursu- § 1843(c)(8)) to acquire the following nonbanking subant to delegated authority. sidiaries of Harris Bankcorp, Inc.: Harris Trust Company of New York, New York, Harris Trust Company of Arizona, Scottsdale, Arizona, and, Harris Trust Company of Florida, West Palm Beach, Florida, each 2. On April 25, 1984, Applicant received approval from the Board of which is a riondeposit trust company; Harris Futo engage in leasing de novo through New City Leasing. tures Corporation, Chicago, Illinois, which engages in 3. Applicant has committed to divest the general insurance activithe activities of a futures commission merchant; and ties once its total assets are more than $50 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 665 Harriscorp Finance, Inc., Chicago, Illinois, which with section 5(a) of the IBA and section 3(d) of the engages in the Chicago Standard Metropolitan Statisti- Bank Holding Company Act (12 U.S.C. § 1842(d)). cal Area in consumer finance and mortgage lending Harris Bankcorp, with approximately $7.8 billion in activities, and in the sale of credit-related life and total assets, is the third largest commercial banking accident and health insurance. In addition, the Board organization in Illinois and, as of June 30, 1983, held approved the applications of Bank of Montreal and approximately $4.0 billion in total deposits, represent- First Canadian Financial U.S. Holdings, Inc., to ac- ing 4.1 percent of deposits held by commercial banking quire Harris Bank International Corporation, New organizations statewide. The bank subsidiaries of Har- York, New York, which is a corporation organized ris Bankcorp, which includes Harris Trust and Savings pursuant to section 25(a) of the Federal Reserve Act Bank, the third largest commercial bank in Illinois, (the "Edge Act") (12 U.S.C. § 611 et seq.). Finally, and seven smaller commercial banks, all operate in the the Board approved the application by Bank of Mon- Chicago, Illinois banking market2 and together hold treal pursuant to section 4(c)(8) of the Act to convert approximately 6.0 percent of the deposits held by the operations of its two existing U.S. bank subsidiar- commercial banking organizations in that market. Neiies, Bank of Montreal (California), San Francisco, ther Bank of Montreal nor First Canadian Financial California, and Bank of Montreal Trust Company, U.S. Holdings, Inc., operate any banking institutions New York, New York, to nondeposit trust companies in Illinois. Based on all of the facts of record, the and to conform the activities, including the deposit Board concludes that consummation of the proposed taking and lending activities, of these subsidiaries to transaction would have no adverse effects on either the requirements of section 225.25(b)(3) of the Board's existing or potential competition in any relevant mar- Regulation Y. ket and would not increase the concentration of re- In this Statement, the Board sets forth its reasons sources in any relevant area or product line. Thus, for approving these applications. competitive considerations under section 3 of the Act Bank of Montreal, with total assets of approximate- are consistent with approval. Considerations regarding ly $50.8 billion, is the third largest bank in Canada and the convenience and needs of the communities to be the 34th largest commercial banking organization in served are also consistent with approval. the world.1 In the United States, in addition to operat- Section 3(c) of the Act requires that, in every case, ing the bank subsidiaries in New York and in Califor- the Board consider the financial resources of the nia noted above, Bank of Montreal operates a branch applicant organization and the bank or bank holding in New York, New York, an agency in San Francisco, company to be acquired. The Board has previously California, and plans to open an additional branch in stated in its policy statement on supervision and Chicago, Illinois. Bank of Montreal had originally regulation of foreign bank holding companies and in selected New York as its home state under the Board's subsequent Board decisions that foreign banks seeking Regulation K (12 C.F.R. § 211.22(b)), but has notified to establish or acquire banking operations in the the Board of its intention to change its home state to United States should meet the same general standards Illinois pursuant to the provision of Regulation K of strength, experience and reputation as are required permitting a one-time change of home states of domestic banking organizations and should be able (12 C.F.R. § 211.22(c)). Because its branch in New to serve on a continuing basis as a source of strength to York is not grandfathered under section 5(a) of the their banking operations in the United States.3 The International Banking Act ("IBA") (12 U.S.C. Board is also aware that foreign banks operate outside § 3103(a)), Bank of Montreal has committed that, the United States in accordance with different regulaeffective upon the change of home state, it will limit tory and supervisory requirements, which makes comthe deposit-taking operations of its New York branch parisons of the financial condition of foreign and office to those permissible for a corporation organized domestic banks difficult. under section 25(a) of the Federal Reserve Act (12 Recently, in acting on an acquisition by a foreign U.S.C. § 611 et seq.), as is required by section 5 of the bank to acquire a United States banking organization, IBA. Moreover, as discussed below, Bank of Montreal the Board noted that the appropriate balancing of has applied to convert its bank subsidiaries in New these concerns raises a number of complex issues that York and California to nondeposit trust companies. the Board believes requires careful consideration and Accordingly, the Board concludes that the acquisition of Harris Bankcorp by Bank of Montreal is consistent 2. The Chicago, Illinois banking market is approximated by Cook, 1. All banking data are as of January 31, 1984, unless otherwise DuPage, and Lake Counties, Illinois. noted. 3. 1 Federal Reserve Regulatory Service 1! 4-835 (1979). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin • August 1984 that is currently under review.4 The Board indicated The Board has placed considerable weight on certhat it would continue to consult with appropriate tain commitments made by Applicants regarding the foreign bank supervisors, particularly with regard to operation of Harris Bankcorp. In this regard, Appliwork that is currently in progress among foreign and cants have committed to take certain actions to indomestic bank supervisory officials to develop more crease the capital ratio of Harris Bankcorp to a specifully the concept of functional equivalency of capital fied level that is significantly above the Board's ratios for banks of different countries. Pending the minimum capital guidelines and would place Harris outcome of these consultations and deliberations, the Bankcorp among the more strongly capitalized banks Board stated it would consider the issues raised by of comparable size. Applicants have also committed to applications by foreign banks to acquire domestic take any steps necessary to maintain this level of banks on a case-by-case basis. capital. In applying these principles to this application, the Even with the benefit of adjustments for differing Board has considered a number of factors that affect financial and legal requirements and methodology bethe ability of Applicants to serve as a source of tween United States and Canadian banking organizastrength to their operations in the United States. In tions, this case presents a difficult decision for the reviewing the financial condition of Applicants, the Board, particularly because of the size of Harris Board noted that, after consummation of the proposal Bankcorp and the relative prominence of Applicants' and after certain accounting adjustments to reflect U.S. operations. On balance, however, after review- United States banking practice, particularly with re- ing the record as it relates to the overall financial gard to Bank of Montreal's specific provision for loan condition of Applicants and their U.S. banking operalosses, the primary capital of Bank of Montreal would tions, Applicants' commitments regarding the operabe approximately at the minimum capital level for tion of Harris Bankcorp, the affirmations by Canadian U.S. multinational bank holding companies set forth in supervisory authorities, as well as other facts of rethe Board's Capital Adequacy Guidelines. Consum- cord, the Board believes that Applicants' financial mation of the proposal would result in an increase in condition is consistent with approval of this applicathe size of Bank of Montreal's U.S. banking opera- tion. tions to approximately 20 percent of its consolidated Bank of Montreal and First Canadian Financial U.S. worldwide assets. The Board believes that when a Holdings, Inc., have also applied, pursuant to section foreign bank's U.S. operations become so significant 4(c)(8) of the Act, to acquire the nonbanking subsidiarin relation to the totality of its activities, its capital and ies of Harris Bankcorp listed above, and to conform reserves represent an especially important measure of the operations of its current U.S. bank subsidiaries, its ability to serve as a source of financial strength to the Bank of Montreal Trust Company, New York, its U.S. operations. New York, and the Bank of Montreal (California), San While the Board, taking account of the guidelines Francisco, California, to the activities permissible for applicable to U.S. bank holding companies, considers nondeposit trust companies under section 225.25(b)(3) the capital position of Bank of Montreal as a negative of the Board's Regulation Y. The Board has previousfactor, the Board has also taken into account a number ly determined that each of the activities that Applicant of other mitigating factors that affect the Board's proposes to conduct is a permissible nonbanking activdecision regarding the ability of Applicants to serve as ity for bank holding companies.5 a source of strength to their operations in the United Bank of Montreal and First Canadian Financial U.S. States. Bank of Montreal is in compliance with the Holdings, Inc., currently do not operate any nonbankcapital and other requirements of the supervisory ing institutions in the United States. Harris Bankcorp authorities in Canada and its resources and prospects currently operates a nondeposit trust company in New are viewed as satisfactory by those authorities. Bank York, Harris Trust Company of New York. Bank of of Montreal also has a large and relatively stable Montreal conducts trust company activities through its deposit base and has a satisfactory record of operation New York bank subsidiary, Bank of Montreal Trust in local and international markets. As a further signifi- Company, and proposes to convert the operations of cant factor, Bank of Montreal has initiated a capital Bank of Montreal Trust Company exclusively to the program that it projects will raise its capital ratios over activities of a nondeposit trust company. While there time. Recently, Bank of Montreal raised approximate- is some competition between these two companies in ly C$600 million in new capital in anticipation of the the New York banking market, each company serves a proposed transaction. different and specialized segment of the market for 4. The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (June 1984). 5. See 12 C.F.R. §§ 225.25(b)(1), (3), (8), and (18). 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Legal Developments 667 trust services. Moreover, the market share represent- Dissenting Statement of Governor Partee ed by each of these companies is small and there are numerous competitors providing trust company ser- I dissent from the Board's decision in this case. Harris vices in the New York market. Based on all the facts Bankcorp is a strong, well-managed institution, and, in of record, the Board believes that this proposal will my view, the Illinois banking community has been well not result in undue concentration of resources, de- served by its operation as an independent banking creased or unfair competition, conflicts of interests, organization. In my estimation, in light of the structure unsound banking practices, or other effects adverse to of commercial banking in the Chicago market, the the public interest. Accordingly, the Board has deter- benefits to Harris Bankcorp and the Illinois banking mined that considerations relating to the public inter- community that derive from the continued indepenest factors under section 4 of the Act are consistent dent operation of Harris Bankcorp—the third largest with approval of these applications. commercial banking organization in Illinois—outweigh The financial and managerial resources of Bank of the benefits that Applicant expects would result from Montreal and First Canadian Financial U.S. Holdings, the proposed affiliation. In particular, there would be Inc., also are consistent with the acquisition of Harris the possibility—perhaps remote, but still present— Bankcorp's Edge Corporation. The acquisition of Har- that the regional emphasis of Harris Bankcorp's busiris Bank International Corporation by Applicants ness could be diluted by future operational requirewould result in the continuation of the international ments of the much larger Applicant organization. services currently provided, and is consistent with the More generally, I am troubled by the difficulties purposes of the Edge Act. Accordingly the Board finds referred to by the majority in judging the financial that the acquisition of Harris Bank International Cor- factors of foreign banks and their ability to serve as a poration by Bank of Montreal and First Canadian source of strength to their U.S. operations in the Financial U.S. Holdings, Inc., would be in the public context of proposals involving acquisitions of major interest. U.S. banking organizations. This case underscores the Based on all the facts of record and the commit- difficulties and complex issues involved in such proments made by Applicants, the Board has determined posals because of the size of Harris Bankcorp and its that the applications under sections 3 and 4 of the Act importance to the Chicago banking market and to and section 25(a) of the Federal Reserve Act should Illinois and Midwestern banking in general, and the be, and hereby are, approved. fact that Applicant's capital approximates only the The acquisitions shall not be consummated before minimum level specified in the Board's Capital Adethe thirtieth day following the effective date of the quacy Guidelines. Board's Order or later than three months after the Accordingly, I do not favor approval of the effective date of the Board's Order, unless such period proposal. is extended by the Board or by the Federal Reserve Bank of Chicago, pursuant to delegated authority. The July 27, 1984 determinations herein regarding nonbank activities are subject to the conditions stated herein as well as all of the conditions set forth in Regulation Y, including Seattle Bancorporation sections 225.4(d) and 225.23(b), and to the Board's Seattle, Washington authority to require such modification or termination of the activities of a holding company or any of its Order Denying Acquisition of Bank Holding subsidiaries as the Board finds necessary to assure Company compliance with, or to prevent evasion of, the provisions and purposes of the Act and the Board's regula- Seattle Bancorporation ("Seattle Bancorp"), Seattle, tions and orders issued thereunder. Washington, has applied for the Board's approval Board of Governors of the Federal Reserve System, under section 3(a)(3) of the Bank Holding Company July 27, 1984. Act ("Act"), 12 U.S.C. § 1842(a)(3), to acquire all of the voting shares of Alaska Pacific Bancorporation Voting for this action: Chairman Volcker and Governors ("Alaska Pacific"), Anchorage, Alaska, and thereby Martin, Wallich, Rice, Gramley, and Seger. Voting against indirectly to acquire Alaska Pacific Bank ("Alaska this action: Governor Partee. Bank"), Anchorage, Alaska; and First National Bank of Fairbanks ("Fairbanks Bank"), Fairbanks, Alaska. Applicant has also applied under section 4(c)(8) of the JAMES MCAFEE Act, 12 U.S.C. § 1843(c)(8), and section 225.23 of the [SEAL] Associate Secretary of the Board Board's Regulation Y, 12 C.F.R. § 225.23, to acquire Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin • August 1984 indirectly the following nonbanking subsidiaries of corp, and the name of Seattle Bancorp would be Alaska Pacific: Alaska Pacific Mortgage Company, changed to Pacific Bancorporation. The post-merger Anchorage, Alaska; Pentek Leasing, Inc., San Jose, board of directors of Seattle Bancorp would consist of California; and All Coast Financial, Inc., San Diego, 11 members, two of whom would be pre-merger Seat- California. tle Bancorp people and nine of whom would be pre- Notice of the applications, affording an opportunity merger Alaska Pacific people.3 for interested persons to submit comments, has been The issue raised by this application is whether the given in accordance with sections 3 and 4 of the Act. acquisition is prohibited by the Douglas Amendment The time for filing comments has expired, and the to the Act.4 The Douglas Amendment generally pro- Board has considered the application and all com- hibits Board approval of an application by a bank ments received in light of the factors set forth in holding company to acquire a bank located outside of section 3(c) of the Act, 12 U.S.C. § 1842(c), and the the bank holding company's home state unless the considerations specified in section 4(c)(8) of the Act, state in which the target bank is located has specifical- 12 U.S.C. § 1843(c)(8). In particular, the Board has ly authorized the acquisition. The home state of the considered the comments of the Acting Supervisor of acquiring holding company is defined for Douglas Banking for the State of Washington. Amendment purposes as the state in which the opera- Applicant, a one-bank holding company with con- tions of the bank holding company's banking subsidsolidated assets of $45.1 million,1 acquired its only iaries were principally conducted on the later of July 1, subsidiary, Bank of Seattle, Seattle, Washington, on 1966, or the date on which the company became a December 31, 1983. Alaska Pacific, with consolidated bank holding company.5 assets of $409.5 million, has two subsidiary banks and Seattle Bancorp's home state for purposes of the six nonbanking subsidiaries. Douglas Amendment is Washington because that was This proposal is the second phase of a two-step the state where Bank of Seattle's principal operations transaction to join Seattle Bancorp and Alaska Pacific. were conducted when Seattle Bancorp became a bank In the first phase, Seattle Bancorp became a bank holding company on December 31, 1983. As the Board holding company by acquiring Bank of Seattle. In the has previously found,6 the statute laws of Alaska second phase, Seattle Bancorp proposes to acquire the authorize the acquisition of Alaska banks by out-ofmuch larger Alaska Pacific by means of a "reverse state bank holding companies, including a bank holdtriangular merger." Under this arrangement, a subsid- ing company with a home state in Washington.7 iary of Seattle Bancorp, formed for this purpose, will The acquisition of Seattle Bancorp by Alaska Pacifmerge with Alaska Pacific, and Alaska Pacific share- ic, on the other hand, would not be permissible under holders will receive new shares of Seattle Bancorp the Douglas Amendment because Washington law common stock in exchange for their shares of Alaska permits the acquisition of Washington banks by out-of- Pacific.2 As a result, Alaska Pacific will become a state bank holding companies only if the Washington wholly owned subsidiary of Seattle Bancorp, and the bank or bank holding company is in danger of closing, existing shareholders of Alaska Pacific will control approximately 88 percent of the new shares of Seattle Bancorp common stock. The existing shareholders of Seattle Bancorp will receive new shares of Seattle 3. Within 60 days of the acquisition, Seattle Bancorp would in- Bancorp, representing approximately 12 percent of the crease its board by up to 10 members so that 51 percent of its directors would be Washington residents. outstanding new shares of Seattle Bancorp common 4. The Douglas Amendment provides that: stock, and will also receive from Seattle Bancorp a cash distribution of approximately $4 a share, original- Notwithstanding any other provision of this section, no application (except an application filed as a re sult of a transaction authorized under section 1823(f) of this ly to have been funded by Alaska Pacific. title) shall be approved under this section which will permit any bank holding company or any subsidiary thereof to acquire, directly or indirectly, any voting Upon consummation, the Chairman of the Board shares of, interest in, or all or substantially all of the assets of any additional bank and President of Alaska Pacific would become the located outside of the State in which the operations of such bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the Chairman of the Board and President of Seattle Ban- date on which such company became a bank holding company, whichever is later, unless the acquisition of such shares or assets of a State bank by an out-of-State bank holding company is specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication. . . . 1. Unless otherwise indicated, all asset data are as of March 31, 1984. 12 U.S.C. § 1842(d). 2. Specifically, Alaska Merging Corporation ("AMC"), an Alaska 5. For Douglas Amendment purposes, the state in which the corporation formed and wholly owned by Seattle Bancorp, will merge operations of the bank holding company's banking subsidiaries were into Alaska Pacific. Simultaneous with this merger, the shares of principally conducted is the state in which the total deposits of all such AMC stock held by Seattle Bancorp will be converted into shares of banking subsidiaries were largest. 12 U.S.C. § 1842(d). Alaska Pacific stock and all other outstanding shares of Alaska Pacific 6. Rainier Bancorporation, 69 FEDERAL RESERVE BULLETIN 295 common stock will be exchanged for new shares of Seattle Bancorp (1983). common stock. 7. Alaska Stat. § 06.05.235(e) (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 669 failing, or insolvency.8 Seattle Bancorp and Bank of Several factors indicate that this transaction is, in Seattle are not in danger of closing, failing, or insol- substance, an acquisition by Alaska Pacific of Seattle vency. Bancorp. First, Alaska Pacific shareholders would Applicant contends that the Douglas Amendment control substantially all of the new shares of Seattle does not prohibit this transaction because, as struc- Bancorp common stock after the acquisition, and the tured, the proposal represents the acquisition by a existing Seattle Bancorp shareholders' control over Washington bank holding company of an Alaska bank Seattle Bancorp would be reduced to that of a small holding company and its two subsidiary banks, a minority interest (approximately 12 percent). Second, transaction specifically authorized by the statute laws in conjunction with this transaction, the existing shareof Alaska. Applicant argues that the Board's review of holders of Seattle Bancorp would receive their pro the transaction under the BHC Act is limited to the rata share of a cash distribution. Third, after the form in which the applicant has structured the propos- merger, the managing official of Alaska Pacific would al and that the Board may not, in applying the Douglas become the Chairman and President of Seattle Ban- Amendment to the proposal, take into account the corp, and would assume control of its management great disparity in size between Seattle Bancorp and and policies. Fourth, Alaska Pacific directors would Alaska Pacific and the other factors specified above, constitute over 80 percent of the post-merger Seattle which indicate that Alaska Pacific is the dominant and Bancorp board of directors. moving force behind the proposal.9 In the Board's judgment, these factors are inconsis- The Acting Supervisor of Banking for Washington tent with a conclusion that Seattle Bancorp is the State opposes the proposed merger, contending that acquiring bank holding company in this proposal.11 In Seattle Bancorp would be an out-of-state bank holding reaching this conclusion, the Board has taken into company under Washington law once the merger is account the purposes and legislative history of the consummated, and that its acquisition of a Washington Act, which reflect an intent to preserve the authority bank is prohibited by Washington law. The supervisor of the states over the structure of banking within the also contends that the proposal violates the spirit and state.12 The Board also notes that the Act's definition intent of Washington law because the proposal, in of a bank holding company's home state (as that state substance, represents the acquisition of a Washington in which the deposits of its subsidiary banks was bank by an out-of-state bank holding company. largest on the date it became a bank holding company) After carefully considering the facts of record in this was intended to prevent a bank holding company from case, including the statement submitted by the Wash- shifting its home state and thereby expanding its ington banking supervisor, the Board has concluded banking activities in other states.13 In effect, Alaska that, although the form of the transaction has been Pacific is attempting to accomplish that same result structured to reflect the acquisition of an Alaska bank through the proposed "reverse triangular merger" holding company by a Washington bank holding com- under which it relocates its home office by assuming pany, a transaction permissible under the Douglas Amendment, the proposal represents in substance the acquisition by an Alaska bank holding company of a form in which a transaction has been clothed to its substance in order bank in Washington, a transaction for which Board to prevent evasions of the Act. Wilshire Oil Company of Texas v. approval is barred by the Douglas Amendment. The Board of Governors of the Federal Reserve System, 668 F.2d 732, 738 (3d Cir. 1981), cert, denied, 457 U.S. 1132 (1982). See also First Board disagrees with Applicant's contention that the National Bank in Plant City v. Dickinson, 396 U.S. 122 (1969). Board is strictly limited to the form of the proposal and 11. In this regard, the Board notes that Seattle Bancorp would be may not consider its substance.10 deemed the "successor" to Alaska Pacific under section 2(e) of the Act, 12 U.S.C. § 1841(e), because the acquisition by Seattle Bancorp of Alaska Pacific's bank effects no substantial change in the control of Alaska Pacific's banks or the beneficial ownership of their shares 8. Wash. Rev. Code Ann. § 30.04.230(4)(b)(i) (1984). since the existing Alaska Pacific shareholders will control 88 percent 9. Applicant relies on Marshall and Ilsey Corporation v. Heimann, of Seattle Bancorp after the acquisition. As a successor, Seattle 652 F.2d 685 (7th Cir. 1981), cert, denied, 455 U.S. 981 (1982); Vial v. Bancorp would succeed not only to the privileges of Alaska Pacific First Commerce Corporation, 564 F.Supp. 650 (E.D. Ka. 1983); under the BHC Act, but should also be subject to limitations imposed Leuthold v. Camp, 273 F.Supp. 695 (D. Mont. 1967), affd, 405 F.2d by the Act on Alaska Pacific, including the limitations of the Douglas 499 (9th Cir. 1969); and State of South Dakota v. Bank of South Amendment. The "successor" provision was added to the Act in Dakota, 219 F.Supp. 842 (D.S.D. 1963), affd, 335 F.2d 444 (8th Cir. order to prevent a bank holding company from transferring its bank to 1964), cert, denied, 379 U.S. 970 (1965). some other organization that would not itself technically fall within the All of these cases are distinguishable from Seattle Bancorp's Act's prohibition. Hearings before the House Committee on Banking application. None of these cases involved the type of transaction at and Currency on H.R. 6504, 82nd Cong., 2d Sess. 22 (1952); Hearings issue here and none involved an evasion of the BHC Act's prohibi- on S. 76 and S. 1118 before the Senate Banking Committee, 83d Cong., 1st Sess. 15 (1953). tions. 10. The Board has explicit authority under section 5(b) of the BHC 12. H. Rep. No. 609, 84th Cong., 1st Sess. 3 (1955). Act to consider the substance, rather than the form, of a proposal in 13. Senate Committee on Banking and Currency, 89th Cong., 1st order to ". . . carry out the purposes of the [Bank Holding Company Sess., Analyses of S. 2353, S. 2418, and H.R. 7371 and Comparative Act] and prevent evasions thereof." 12 U.S.C. § 1844(b). The courts Print Showing Changes in Existing Law 11-12 (Comm. Print 1965). have held that the Board is authorized to look beyond the contractual See also S. Rep. No. 1179, 89th Cong., 2d Sess. 9 (1966). 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670 Federal Reserve Bulletin • August 1984 the corporate identity of Seattle Bancorp without any For the foregoing reasons, the Board concludes that material alteration in Alaska Pacific's shareholders, in substance this transaction involves the acquisition management, or business operations. by Alaska Pacific of Seattle Bancorp, a transaction for The Board is concerned that approval of this case which Board approval is prohibited by the Douglas would establish a precedent for proposals aimed at Amendment.14 Accordingly, Seattle Bancorp's applievading the restrictions of the Douglas Amendment cations are hereby denied. under which a bank holding company would assume By order of the Board of Governors, effective the corporate identity of a bank holding company July 16, 1984. located in another state as a means to expand its banking operations in that other state without the Voting for this action: Chairman Volcker and Governors state's specific authority as required by the Douglas Martin, Wallich, Rice, Gramley, and Seger. Absent and not Amendment. The Board believes, however, that inter- voting: Governor Partee. state banking should be effected through legislative JAMES MCAFEE action in order to establish a proper framework for its [SEAL] Associate Secretary of the Board development, including the appropriateness of a transitional adjustment period and the development of standards adequate to deal with the problems of undue 14. In view of the Board's determination with respect to the concentration of resources and other potential adverse Douglas Amendment's prohibition of this transaction, the Board has not considered whether Washington law provides an independent factors. basis for denial of this application. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During July 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(s) (effective date) Bakken Securities Corporation Citizens State Bank July 24, 1984 St. Louis Park, Minnesota St. Louis Park, Minnesota First Neodesha Bancshares, Inc. First National Bank of Neodesha July 31, 1984 Neodesha, Kansas Neodesha, Kansas Mid-Continent Financial Services, Inc. State Bank of Edgerton July 30, 1984 Minneapolis, Minnesota Edgerton, Minnesota Peoples Bankshares, Ltd. First State Bank July 20, 1984 Waterloo, Iowa Britt, Iowa RepublicBank Corporation RepublicBank Eldridge, N.A. July 23, 1984 Dallas, Texas Houston, Texas Rossville Bankshares, Inc. Rossville Bank July 13, 1984 Rossville, Georgia Rossville, Georgia United New Mexico Financial Corpora- United New Mexico Bank at Las July 31, 1984 tion Cruces, N.A. Albuquerque, New Mexico Las Cruces, New Mexico Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 671 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 Alden Bancshares Company Alden State Bank Chicago June 29, 1984 Alden, Iowa Alden, Iowa Alice Bancshares, Inc. Alice National Bank Dallas July 6, 1984 Alice, Texas Alice, Texas Allied Bancshares, Inc. Allied Bank Keller, N.A. Dallas July 9, 1984 Houston, Texas Keller, Texas Amarillo Western Bancshares, City National Bank Dallas July 10, 1984 Inc. Amarillo, Texas Amarillo, Texas American National Bankshares American National Bank & Trust Richmond July 24, 1984 Inc. Company of Danville Danville, Virginia Danville, Virginia Americorp Financial, Inc. First National Bank and Trust Chicago July 12, 1984 Rockford, Illinois Company of Pekin Pekin, Illinois Amoskeag Bank Shares, Inc. Amoskeag National Bank & Trust Boston July 17, 1984 Manchester, New Hampshire Co. Manchester, New Hampshire Andover Bancorp, Inc. The Andover Bank Cleveland July 20, 1984 Andover, Ohio Andover, Ohio Bancshares, Inc. North Belt National Bank Dallas July 20, 1984 Houston, Texas Harris County, Texas Bankers Southwest Corporation State Bank and Trust Company Dallas July 19, 1984 Waxahachie, Texas Dallas, Texas State Bank and Trust Company Ovilla, Texas Bay Point Bancorp, Inc. Meredith Bank & Trust Boston July 2, 1984 Meredith, New Hampshire Meredith, New Hampshire Boulevard Bancorp, Inc. The First National Bank of Des Chicago July 11, 1984 Chicago, Illinois Plaines Des Plaines, Illinois Breckinridge Bancorp, Inc. Breckinridge Bank St. Louis July 18, 1984 Cloverport, Kentucky Cloverport, Kentucky CSB Bancorp, Inc. Coflfeyville State Bank Kansas City July 3, 1984 Coflfeyville, Kansas Coflfeyville, Kansas C.S.B. Co. St. Paul National Bank Kansas City June 25, 1984 Cozad, Nebraska St. Paul, Nebraska Cawker City Bancshares, Inc. Farmers and Merchants State Kansas City July 3, 1984 Overland Park, Kansas Bank Cawker City, Kansas Citizens Bancshares of Wood- Citizens State Bank of Woodville Minneapolis July 23, 1984 ville, Inc. Woodville, Wisconsin Woodville, Wisconsin Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin • August 1984 Section 3—Continued . „ ,, . Reserve Effective Applicant Bank(s) ^ date Community Bancshares, Inc. Community National Bank Kansas City July 17, 1984 Senaca, Kansas Senaca, Kansas Community Bank Corp of Okla- Stillwater Community Bank Kansas City July 12, 1984 homa, Inc. Stillwater, Oklahoma Stillwater, Oklahoma Community Banks, Inc. Brooklyn Bancshares Chicago June 26, 1984 Middle ton, Wisconsin Brooklyn, Wisconsin Corydon State Bancorp The Corydon State Bank St. Louis July 24, 1984 Corydon, Indiana Corydon, Indiana Dyer F&M Bancshares, Inc. Farmers & Merchants Bank St. Louis July 6, 1984 Dyer, Tennessee Dyer, Tennessee Elk Horn Bancshares, Inc. Elk Horn Bank & Trust Company St. Louis July 25, 1984 Arkadelphia, Arkansas Arkadelphia, Arkansas Eskrow Corporation of Ameri- Citizens National Bank of Will- Minneapolis July 12, 1984 ca, Inc. mar Pennock, Minnesota Willmar, Minnesota Evergreen Bancorporation Evergreen National Bank Kansas City July 20, 1984 Evergreen, Colorado Evergreen, Colorado EWN Investments, Inc. Ute State Bank Chicago July 17, 1984 Ute, Iowa Ute, Iowa Fidelity Bancshares, Inc. Waco State Bank Dallas July 18, 1984 Temple, Texas Waco, Texas First Charter Bancshares, Inc. First State Bank St. Louis July 25, 1984 North Little Rock, Arkansas Beebe, Arkansas First Community Bancorp First Community Bank of Wash- San Francisco July 23, 1984 Lacey, Washington ington Lacey, Washington First Community Financial Corp The First State Bank of Decatur Chicago July 13, 1984 Decatur, Indiana Decatur, Illinois First Farmers Bank Holding Farmers Bank & Trust Company St. Louis June 26, 1984 Company Bardstown, Kentucky Bardstown, Kentucky First Fulton Bancshares, Inc. First Fulton Bank and Trust Atlanta July 10, 1984 Palmetto, Georgia Palmetto, Georgia First West Chester Corporation First National Bank of West Philadelphia July 16, 1984 West Chester, Pennsylvania Chester West Chester, Pennsylvania First Western Bancshares, Inc. Citizens Bank St. Louis July 13, 1984 Booneville, Arkansas Booneville, Arkansas Fishkill National Corporation The Fishkill National Bank New York July 25, 1984 Beacon, New York Beacon, New York FSB Corp The Farmers State Bank (West Chicago July 12, 1984 College Corner, Ohio College Corner, Indiana) College Corner, Ohio Gallup Bancshares, Inc. First Interstate Bank of Gallup Kansas City June 28, 1984 Gallup, New Mexico Gallup, New Mexico Geiger Corporation Heritage Bank, N.A. Chicago June 21, 1984 Edina, Minnesota Aurelia, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 673 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Georgia Bancshares, Inc. Tennille Banking Company Atlanta July 11, 1984 Macon, Georgia Tennille, Georgia Grant County Bancshares, Inc. State Bank of Wendell Minneapolis July 25, 1984 Elbow Lake, Minnesota Wendell, Minnesota Bank of Elbow Lake Elbow Lake, Minnesota Great Plains Bank Corporation Eden Bank Holding Company, Minneapolis July 10, 1984 Eureka, South Dakota Inc. Eden, South Dakota Green River Bancorp, Inc. Green River Bank St. Louis July 13, 1984 Morgantown, Kentucky Morgantown, Kentucky Henderson Financial Corpora- Henderson County State Bank St. Louis July 25, 1984 tion Corydon, Kentucky Henderson, Kentucky High Plains Bank Corp High Plains Bank of Elizabeth, Kansas City July 17, 1984 Kiowa, Colorado N.A. Elizabeth, Colorado Highland Community Company Highland Community Bank Chicago July 17, 1984 Chicago, Illinois Chicago, Illinois Holden Bankshares, Inc. Bank of Holden Kansas City June 29, 1984 Holden, Missouri Holden, Missouri Indecorp Indiana Bank & Trust Company Chicago July 24, 1984 Martinsville, Indiana Martinsville, Indiana Intercontinental Bank Shares Intercontinental Bank-Lackland Dallas July 19, 1984 Corporation San Antonio, Texas San Antonio, Texas Intercontinental National Bank- Starcrest San Antonio, Texas J.E. Coonley Company Alden Bancshares Company Chicago June 29, 1984 Dows, Iowa Alden, Iowa Klein Bancshares, Inc. Klein Bank Dallas July 25, 1984 Houston, Texas Spring, Texas Landmark Bancshares Corpora- Landmark Bank of Kansas City St. Louis June 20, 1984 tion Kansas City, Missouri St. Louis, Missouri Liberty Investment Corp Liberty Bank San Francisco July 17, 1984 Glendale, Arizona Glendale, Arizona M.G. Bancorporation, Inc. Worth Bancorp, Inc. Chicago July 25, 1984 Chicago, Illinois Chicago, Illinois Worth Bank and Trust Worth, Illinois M&I American Bank & Trust M&I Bank of Mount Pleasant Chicago July 9, 1984 Co. Racine, Wisconsin Racine, Wisconsin Maplesville Bancorp Bank of Maplesville Atlanta July 24, 1984 Maplesville, Alabama Maplesville, Alabama Marion Bancorp First National Bank in Marion Chicago June 25, 1984 Marion, Indiana Marion, Indiana Marion National Corporation Marion National Bank Richmond July 20, 1984 Marion, South Carolina Marion, South Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin • August 1984 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date McLeod Bancshares, Inc. The First Bank of Minnesota Minneapolis June 25, 1984 Glencoe, Minnesota Stewart, Minnesota Mercantile Bancorporation Inc. Mercantile Bank of Northwest St. Louis July 18, 1984 St. Louis, Missouri County National Association St. Louis County, Missouri Miami Corporation The First National Bank of Des Chicago July 11, 1984 Chicago, Illinois Plaines Des Plaines, Illinois Mineola Banshares, Inc. Mineola State Bank Chicago July 20, 1984 Mineola, Iowa Mineola, Iowa Nebanco, Inc. American State Bank Kansas City June 29, 1984 Wallace, Nebraska McCook, Nebraska Nine Tribes Bankshares, Inc. The Bank of Quapaw Kansas City July 12, 1984 Quapaw, Oklahoma Quapaw, Oklahoma Northtown Bancshares Corpora- Northtown Bank of Decatur Chicago July 23, 1984 tion Decatur, Illinois Decatur, Illinois Ohio Valley Bancorp First Bank of Madison St. Louis June 25, 1984 Madison, Indiana Madison, Indiana Oneida Valley Bancshares, Inc. The Oneida Valley National Bank New York July 20, 1984 Oneida, New York of Oneida Oneida, New York P.T.C. Bancorp People's Trust Company Chicago July 12, 1984 Brookville, Indiana Brookville, Indiana Plainview Bancorp, Inc. Plainview Bancshares, Inc. Dallas July 6, 1984 Plainview, Texas Plainview, Texas The City National Bank of Plainview Plainview, Texas Prairie Bancorporation, Inc. Citizens State Bank of Walnut Minneapolis July 23, 1984 Walnut Grove, Minnesota Grove Walnut Grove, Minnesota RepublicBank Corporation Seagoville State Bank Dallas July 2, 1984 Dallas, Texas Seagoville, Texas Rush County National Corpora- The Rush County National Bank Chicago July 3, 1984 tion of Rushville Rushville, Indiana Rushville, Indiana Silver Lake Bancorporation, Citizens State Bank of Silver Minneapolis July 6, 1984 Inc. Lake Silver Lake, Minnesota Silver Lake, Minnesota Schmid Bros. Investment Com- Bank of Illmo St. Louis July 24, 1984 pany, Inc. Scott City, Missouri Clayton, Missouri Financial Bancshares, Inc. Sunset Hills, Missouri Soldier Valley Financial Ser- Soldier Valley Savings Bank Chicago July 5, 1984 vices, Inc. Soldier, Iowa Soldier, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 675 Section 3—Continued T, , , , Reserve Effective Applicant Bank(s) ^ Bank Somonauk FSB Bancorp, Inc. Millbrook-Newark Bank Chicago July 12, 1984 Somonauk, Illinois Newark, Illinois Southern Ohio Community Ban- The Glouster Community Bank Cleveland July 25, 1984 corp, Inc. Glouster, Ohio Glouster, Ohio St. Croix Banco, Inc. Polk County Banco, Inc. Minneapolis July 6, 1984 New Richmond, Wisconsin Balsam Lake, Wisconsin State Financial Services Corpo- State Bank, Hales Corners Chicago July 6, 1984 ration Hales Corners, Wisconsin Hales Corners, Wisconsin Stock Exchange Bancshares, The Stock Exchange Bank Kansas City June 29, 1984 Inc. Woodward, Oklahoma Woodward, Oklahoma Universal Corporation The National Bank of Ypsilanti Chicago July 6, 1984 Ypsilanti, Michigan Ypsilanti, Michigan Washington State Bancshares, Washington State Bank Atlanta July 11, 1984 Inc. Washington, Louisiana Washington, Louisiana Western Commercial Merced Bank of Commerce, N.A. San Francisco June 26, 1984 Fresno, California Merced, California White County Bancshares, Inc. White County Bank Atlanta July 23, 1984 Cleveland, Georgia Cleveland, Georgia Section 4 Nonbanking Reserve Effective Applicant company Bank date Banc One Corporation UML Financial Corporation Cleveland June 26, 1984 Columbus, Ohio Pasadena, California Colonial Bancshares, Inc. Guido Insurance Agency, Inc. St. Louis July 16, 1984 Des Peres, Missouri St. Louis, Missouri CoreStates Financial Corp Peoples Loan Corporation Philadelphia July 20, 1984 Philadelphia, Pennsylvania Buffalo, New York Signal Finance Corporation Pittsburgh,Pennsylvania Delano State Agency, Inc. to continue to engage in general Minneapolis July 26, 1984 Delano, Minnesota insurance activities First Interstate Bancorp LeLand O'Brien Ruberstein San Francisco July 6, 1984 Los Angeles, California Associates Incorporated Los Angeles, California First Railroad & Banking Com- Absher Finance Company, Inc. Atlanta July 2, 1984 pany of Georgia Wytheville, Virginia Augusta, Georgia Manufacturers Hanover Corpo- Cenla Finance, Inc. New York July 13, 1984 ration Pineville, Louisiana New York, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin • August 1984 Section 4—Continued Nonbanking Reserve Effective Applicant company Bank date Merchants National Corporation Mortgage Company of Indiana, Chicago July 19, 1984 Indianapolis, Indiana Inc. Indianapolis, Indiana Norstar Bancorp Inc. Adams, McEntee & Company New York July 20, 1984 Albany, New York New York, New York AM Acquisition Corporation Albany, New York Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Colorado Springs Banking Cor- Pueblo Bancorporation Kansas City July 13, 1984 poration Pueblo Springs, Colorado Colorado Springs, Colorado The Pueblo Bank and Trust Company Pueblo Springs, Colorado Hayesville Bancshares, Inc. Mertz Insurance Agency Chicago July 9, 1984 Hayesville, Iowa Hayesville, Iowa Lyons Bancorp, Inc. Valley Bank of Lyons Kansas City June 29, 1984 Brighton, Colorado Lyons, Colorado Centennial Insurance Services, Inc. Lyons, Colorado 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. Old Stone Corp. v. Board of Governors, No. 84-1498 Florida Bankers Association v. Board of Governors, (1st Cir., filed June 20, 1984). No. 84-3269 and No. 84-3270 (11th Cir., filed Apr. Bank of Boston Corp. v. Board of Governors, No. 84- 20, 1984). 4089 (2d Cir., filed June 14, 1984). Northeast Bancorp, Inc. v. Board of Governors, No. Bank of New York Company, Inc. v. Board of Gover- 84-4047, No. 84-4051, No. 84-4053 (2d Cir., filed nors, No. 84-4091 (2d Cir., filed June 14, 1984). Mar. 27, 1984). Citicorp v. Board of Governors, No. 84-4081 (2d Cir., Huston v. Board of Governors, No. 84-1361 (8th Cir., filed May 22, 1984). filed Mar. 20, 1984); and No. 84-1084 (8th Cir. filed Lamb v. Pioneer First Federal Savings and Loan Jan. 17, 1984). Association, No. C84-702 (D. Wash., filed May 8, De Young v. Owens, No. SC 9782-20-6 (Iowa Dist. 1984). Ct., filed Mar. 8, 1984). Girard Bank v. Board of Governors, No. 84-3262 (3rd First Tennessee National Corp. v. Board of Gover- Cir., filed May 2, 1984). nors, No. 84-3201 (6th Cir., filed Mar. 6, 1984). Melcher v. Federal Open Market Committee, No. 84- Independent Insurance Agents of America v. Board of 1335 (D.D.C., filed, Apr. 30, 1984). Governors, No. 84-1083 (D.C. Cir., filed Mar. 5, 1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 677 State of Ohio, v. Board of Governors, No. 84-1270 Securities Industry Association v. Board of Gover- (10th Cir., filed Jan. 30, 1984). nors, No. 83-614 (U.S., filed Feb. 3, 1983). Ohio Deposit Guarantee Fund v. Board of Governors, Association of Data Processing Service Organizations No. 84-1257 (10th Cir., filed Jan. 28, 1984). v. Board of Governors, No. 82-1910 (D.C. Cir., filed Colorado Industrial Bankers Association v. Board of Aug. 16, 1982); and No. 82-2108 (D.C. Cir., filed Governors, No. 84-1122 (10th Cir., filed Jan. 27, Aug. 16, 1982). 1984). First Bancorporation v. Board of Governors, No. 82- Financial Institutions Assurance Corp. v. Board of 1401 (10th Cir., filed Apr. 9, 1982). Governors, No. 84-1101 (4th Cir., filed Jan. 27, Wolfson v. Board of Governors, No. 83-3570 (11th 1984). Cir., filed Sept. 28, 1981). First Bancorporation v. Board of Governors, No. 84- First Bank & Trust Company v. Board of Governors, 1011 (10th Cir., filed Jan. 5, 1984). No. 81-38 (E.D. Ky., filed Feb. 24, 1981). Dimension Financial Corporation v. Board of Gover- 9 to 5 Organization for Women Office Workers v. nors, No. 83-2696 (10th Cir., filed Dec. 30, 1983). Board of Governors, No. 83-1171 (1st Cir., filed Oklahoma Bankers Association v. Federal Reserve Dec. 30, 1980). Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983). Securities Industry Association v. Board of Gover- Independent Insurance Agents of America, Inc. v. nors, No. 82-1766 (U.S., filed Oct. 24, 1980). Board of Governors, No. 83-1818 (8th Cir., filed A. G. Becker, Inc. v. Board of Governors, No. 82-1766 June 21, 1983); and No. 83-1819 (8th Cir., filed June (U.S., filed Oct. 14, 1980). 21, 1983). A. G. Becker, Inc. v. Board of Governors, No. 81-1493 The Committee for Monetary Reform v. Board of (D.C. Cir., filed Aug. 25, 1980). Governors, No. 84-5067 (D.C. Cir., filed June 16, 1983). 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 Reserves, money stock, liquid assets, and debt A20 Balance sheet memoranda measures A20 Branches and agencies of foreign banks A4 Reserve balances of depository institutions, A21 Gross demand deposits of individuals, Reserve Bank credit partnerships, and corporations A5 Reserves and borrowings of depository institutions A5 Federal funds and repurchase agreements of FINANCIAL MARKETS large member banks A22 Commercial paper and bankers dollar acceptances outstanding POLICY INSTRUMENTS A22 Prime rate charged by banks on short-term business loans A6 Federal Reserve Bank interest rates A23 Terms of lending at commercial banks A7 Reserve requirements of depository institutions A24 Interest rates in money and capital markets A8 Maximum interest rates payable on time and A25 Stock market—Selected statistics savings deposits at federally insured institutions A26 Selected financial institutions—Selected assets A9 Federal Reserve open market transactions and liabilities FEDERAL RESERVE BANKS FEDERAL FINANCE A10 Condition and Federal Reserve note statements All Federal fiscal and financing operations All Maturity distribution of loan and security A28 U.S. Budget receipts and outlays holdings A29 Federal debt subject to statutory limitation A29 Gross public debt of U.S. Treasury—Types and ownership MONETARY AND CREDIT AGGREGATES A30 U.S. government securities dealers— Transactions, positions, and financing A12 Aggregate reserves of depository institutions A31 Federal and federally sponsored credit and monetary base agencies—Debt outstanding A13 Money stock, liquid assets, and debt measures 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 • August 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 11998844 Q3 Q4 Ql Q2 Feb. Mar. Apr. May June Reserves of depository institutions2 1 Total 6.0 .5 6.9 7.8 19.0 1.3 .0 10.7 26.5 2 Required 5.9 -.1 4.5 9.6 8.0 9.3 7.4 8.0 20.6 3 Nonborrowed 2.9 8.0 8.2 -12.1 24.5 -11.7 -9.6 -46.2 17.7 4 Monetary base3 8.1 7.8 9.0 7.0 10.5 .8 6.0 10.1 11.7 Concepts of money, liquid assets, and debt4 5 Ml 9.5 4.8 7.2 6.2 6.6 5.C .7' 12.8' 11.5 6 M2 6.9 8.5 6.9' 6.9 8.5 4.0' 7.C 8.6' 7.1 7 M3 7.4 9.8' 9.0 10.4 10.1 9.2' 10.8' 11.4' 9.2 8 L 9.6 8.8' 10.9 n.a. 11.1' 15.6' 9.8' 11.7 n.a. 9 Debt 11.8 10.4' 12.5 n.a. 13.0 12.2 13.5' 14.8 n.a. Nontransaction components 10 In M25 6.1 9.7 6.9 7.1 9.2 3.7 9.0 7.2' 5.7 11 In M3 only6 9.8' 15.8' 17.& 25.3 16.6^ 31.(K 26.7' 23.2' 17.6 Time and savings deposits Commercial banks 12 Savings7 -6.3 -6.4 -16.2 -6.4 -18.2 -11.1 -2.8 -3.7 -1.9 13 Small-denomination time8 13.7 19.3 4.4 8.6 -.3 2.4 8.5' 15.2' 17.3 14 Large-denomination time9'10 -4.8 -.2 10.0 24.2 5.8 23.7 18.6 37.6' 28.5 Thrift institutions 15 Savings7 -2.2 -4.4 -5.1 .5 -8.1 .7 2.(y 2.7' .7 16 Small-denomination time 12.3 18.8 11.8 9.0 10.8 4.8 6.7 10.6^ 18.9 17 Large-denomination time9 63.5 58.1 59.0' 46.4 64.3' 37.5' 41.6' 43.2' 54.3 Debt components4 18 Federal 22.9 13.3 14.7 n.a. 22.0 13.7' 12.7 19.3 n.a. 19 Nonfederal 8.7 9.6' 11.8 n.a. 10.4' 13.6 13.8' 13.5 n.a. 20 Total loans and securities at commercial banks" 9.7 10.4 14.0 10.5 17.6r 13.4' 5.8' 10.5' 2.0 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 " xable 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 • August 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 Factors 1984 May June July June IT July 4 July 11 July 18 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 173,797 175,397 176,910 174,525 176,524 176,570' 175,297 178,811 177,945 2 U.S. government securities' 152,987 154,500 152,628 154,735 155,037 155, 153,003 154,554 154,054 3 Bought outright 152,313 153,354 152,050 154,383 153,350 152, 153,0030 152,947 153,102 4 Held under repurchase agreements 674 1,146 578 352 1,687 2, 1,607 952 5 Federal agency obligations 8,571 8,602 8,540 8,534 8,612 8,501 8,635 8,542 6 Bought outright 8,527 8,503 8,500 8,502 8,501 8,501 8,501 8,500 7 Held under repurchase agreements 44 99 40 32 111 0 134 42 8 Acceptances 50 106 0 18 175 0 0 0 9 Loans 2,964 3,166 6,023 2,508 3,421 4,845 4,824 5,891 10 Float 524 594 822 470 754 314 1,739 713 11 Other Federal Reserve assets 8,701 8,429 8,897 8,260 8,525 8,634 9,059 8,745 12 Gold stock 11,106 11,103 11,099 11,104 11,104 11,100 11,100 11,099 13 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 14 Treasury currency outstanding 16,018 16,082 16,147 16,070 16,085 16,117 16,130 16,145 ABSORBING RESERVE FUNDS 15 Currency in circulation 172,013 174,219 176,358 174,414 174,275 174,021 175,612 177,399 176,844 16 Treasury cash holdings 544 530 514 535 530 527 523 522 521 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,960 3,894 3,966 3,311 4,081 3,401 3,911 4,486 3,415 18 Foreign 241 244 227 234 269 236 256 206 248 19 Service-related balances and adjustments 1,456 1,388 1,526 1,318 1,434 1,427 1,443 1,377 1,339 20 Other 487 439 329 394 489 359 416 371 341 21 Other Federal Reserve liabilities and capital 5,874 6,214 6,128 5,849 6,222 6,946 6,020 6,083 6,196 22 Reserve balances with Federal Reserve Banks2 19,964 20,272 19,726 20,261 21,030 21,474' 18,952 20,215 20,904 End-of-month figures Wednesday figures 1984 May July June 13 June 20 June 27 July 4 July 11 July 18 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 175,753 175,051 176,127 173,197 181,880 173,877 176,882 178,485 181,230 24 U.S. government securities1 154,869 152,859 150,705 153,635 158,583 152,907 153,811 155,513 155,637 25 Bought outright 151,745 152,859 150,705 153,635 153,182 152,907 153,811 152,430 152,630 26 Held under repurchase agreements... 3,124 0 0 0 5,401 0 0 3,083 3,007 27 Federal agency obligations 8,851 8,501 8,499 8,501 8,872 8,501 8,501 8,775 8,659 28 Bought outright 8,515 8,501 8,499 8,501 8,501 8,501 8,501 8,500 8,500 29 Held under repurchase agreements... 336 0 0 0 371 0 0 275 159 30 Acceptances 426 0 0 0 619 0 0 0 0 31 Loans 2,832 4,760 7,238 2,404 4,394 3,332 5,222 4,600 6,958 32 Float 588 -655 671 212 590 352 674 771 1,006 33 Other Federal Reserve assets 8,187 9,586 9,014 8,445 8,822 8,785 8,674 8,826 8,970 34 Gold stock 11,104 11,100 11,099 11,104 11,103 11,100 11,100 11,099 11,099 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 16,053 16,111 16,173 16,083 16,098 16,113 16,128 16,143 16,158 ABSORBING RESERVE FUNDS 37 Currency in circulation 173,803 175,069 175,634 174,603 174,114 174,441 176,648 177,555 176,549 38 Treasury cash holdings 534 523 497 530 528 523 523 522 512 Deposits, other than reserve balances with Federal Reserve Banks 39 Treasury 4,855 4,397 3,972 3,524 2,922 3,533 2,891 3,488 3,848 40 Foreign 295 237 215 251 179 243 205 217 195 41 Service-related balances and adjustments ... 1,148 1,148 1,159 1,150 1,150 1,149 1,148 1,155 1,156 42 Other 416 432 309 342 405 310 364 381 275 43 Other Federal Reserve liabilities and capital 5,939 5,971 6,035 5,752 6,240 5,942 6,054 5,938 6,126 44 Reserve balances with Federal Reserve Banks2 20,538 19,104 20,196 18,849 28,161 19,567 20,895 21,089 24,444 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. Dec. Jan. Feb. Mar. Apr. May June July 1 Reserve balances with Reserve Banks1 26,163 24,804 20,986 21,325 18,414 19,484 20,351 19,560 20,210 19,891 2 Total vault cash2 19,538 20,392 20,755 22,578 22,269 20,396 20,152 20,446 20,770 21,134 3 Vault cash used to satisfy reserve requirements3 . 15,755 17,049 17,908 18,795 17,951 16,794 16,802 16,960 17,308 17,590 4 Surplus vault cash4 3,783 3,343 2,847 3,782 4,318 3,602 3,349 3,486 3,461 3,544 5 Total reserves5 41,918 41,853 38,894 40,120 36,365 36,278 37,154 36,519 37,518 37,480 6 Required reserves 41,606 41,353 38,333 39,507 35,423 35,569 36,664 35,942 36,752 36,864 7 Excess reserve balances at Reserve Banks6 312 500 561 613 942 709 490 577 767 616 8 Total borrowings at Reserve Banks 642 697 745 715 567 952 1,234 2,988 3,300 5,924 9 Seasonal borrowings at Reserve Banks 53 33 96 86 103 133 139 196 264 308 10 Extended credit at Reserve Banks7 149 187 2 4 5 27 44 37 1,873 5,008 Biweekly averages of daily figures for weeks ending 1984 Mar. 28 Apr. 11 Apr. 25 May 9 May 23 June 6 June 20 July 4 July 18p Aug. 1 P 11 Reserve balances with Reserve Banks1 18,859 20,237 20,556 20,029 19,390 19,329 20,603 20,189 20,546 19,093 12 Total vault cash2 20,938 19,803 20,476 20,010 20,655 20,570 20,604 21,121 20,708 21,597 13 Vault cash used to satisfy reserve requirements3 . 17,188 16,520 17,103 16,582 17,167 17,023 17,284 17,513 17,404 17,814 14 Surplus vault cash4 3,750 3,282 3,373 3,429 3,489 3,547 3,320 3,608 3,304 3,783 15 Total reserves5 36,047 36,758 37,659 36,611 36,556 36,352 37,887 37,702 37,950 36,906 16 Required reserves 35,322 36,413 37,091 36,019 35,937 35,865 37,208 36,645 37,499 36,249 17 Excess reserve balances at Reserve Banks6 725 344 568 592 620 487 679 1,058 451 658 18 Total borrowings at Reserve Banks 1,136 1,313 1,232 1,064 4,180 3,070 2,965 3,909 5,358 7,155 19 Seasonal borrowings at Reserve Banks 149 131 138 159 195 239 257 289 284 340 20 Extended credit at Reserve Banks7 30 36 44 61 34 16 1,974 2,846 4,614 6,098 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 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 June 4 June 11 June 18 June 25 July 2 July 9 July 16 July 23 July 30 One day and continuing contract 1 Commercial banks in United States 61,315 66,186 61,024 57,342 56,052 64,992 59,295 55,870 54,303 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 22,309 23,296 21,313 21,271 18,828 21,053 19,970 19,502 19,437 3 Nonbank securities dealers 6,043 5,553 4,893 4,916 5,570 5,361 4,740 5,027 4,750 4 All other 27,514 25,275 25,176 24,743 24,075 24,357 24,793 25,787 25,655 All other maturities 5 Commercial banks in United States 9,870 9,790 9,604 9,647 9,296 8,908 9,084 9,065 9,131 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 12,309 11,921 11,770 12,247 11,980 11,728 12,033 10,799 10,650 7 Nonbank securities dealers 7,498 6,770 6,720 6,895 6,557 5,466 5,723 5,901 6,862 8 All other 8,835 9,207 9,294 8,957 9,186 8,535 9,586 9,484 9,734 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 27,458 28,633 27,140 24,389 25,103 24,915 24,751 23,693 23,960 10 Nonbank securities dealers 5,938 4,971 4,951 4,845 5,328 4,936 4,896 4,239 3,951 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 • August 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 clays 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 6/30/84 date rate 6/30/84 rate 6/30/84 rate 6/30/84 rate Boston 9 4/9/84 sw 9 8W 10 9W 11 10W 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 8W 9 8W 10 9W 11 10W 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 e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. m m In effect Dec. 31, 1973 11997788—— JJuullyy 3 7-7 V* 71/4 11998811—— MMaayy 55 13-14 14 11997744—— AApprr.. 25 7W-8 8 10 7V4 7'/4 88 14 14 30 8 8 Aug. 21 73/4 73/4 Nov. 2 13-14 13 Dec. 9 73/t-8 73/4 Sept. 22 8 8 6 13 13 16 73/4 73/4 Oct. 16 8-8'A 8 Vi Dec. 4 12 12 20 sw 8W 1975— Jan. 6 7!/4-73/4 73/4 Nov. 1 8 W-9W 9 Vi 1982— July 20 11W-12 11W 10 7i/4-73A 7V4 3 9Vz 9W 23 11 Vi 11W 24 IV4 7'/4 Aug. 2 11-11W 11 Feb. 5 63/4-7 >/4 63/4 1979— July 20 10 10 3 11 11 7 63/4 63/4 AAuugg.. 17 10-10W 10 Vi 16 10W 10W Mar. 10 6'/4-63/4 6'/4 20 10W 10W 27 10-10W 10 14 6'/4 6'/4 SSeepptt.. 19 10W-11 11 30 10 10 May 16 6-61/4 6 21 11 11 Oct. 12 9W-10 9W 23 6 6 Oct. 8 11-12 12 13 9W 9W 10 12 12 Nov. 22 9-9 W 9 1976— Jan. 19 5V2-6 5 W 26 9 9 Nov. 2 2 2 3 5V 5 4 W r- 5lA 55WlA 1980— Feb. 1 1 9 5 12 1 - 3 1 3 1 1 3 3 Dec. 1 1 4 5 8 8 W W - - 9 9 9 8 W 26 5!/4 51/4 May 29 12-13 13 17 8W 8W 30 12 12 1977— Aug. 30 5'/4-53/4 5'/4 June 13 11-12 11 1984— Apr. 9 8W-9 9 31 5'/4-53/4 53/4 16 11 11 13 9 9 Sept. 2 53/4 53/4 July 28 10-11 10 Oct. 26 6 6 1 29 10 10 Sept. 26 11 11 1978— Jan. 9 6-6 W 6W Nov. 17 12 12 20 6W 67W Dec. 5 12-13 13 May 11 6W-7 7 8 13 13 12 7 In effect July 31, 1984 9 9 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 TTyy dd ppee ee pp oo oo ff ss ii dd tt eepp iinn oo tt ss ee ii rr tt vv ,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo ttee ssii rr tt vv ,, aa aa ll55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts7,8 7 12/30/76 $0-$28.9 million 3 12/29/83 9'A 12/30/76 Over $28.9 million 1122 1122//2299//8833 $10 million-$100 million 113/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 16»/4 12/30/76 By original maturity Less than 1V5 years 3 10/6/83 Time and savings2,3 1 Vi years or more 0 10/6/83 SSaavviinnggss 3 3/16/67 Eurocurrency liabilities Time4 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2Vi 1/8/76 4 years or more 1 10/30/75 Over $5 million, by maturity 30-179 days 6 12/12/74 180 days to 4 years 2'/z 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 wil l 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 heid 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 lxh 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 Domestic Nonfinancial Statistics • August 1984 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 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 an k s a ( s t s h o r c if i t a t i i n o s n t s i tu a t n i d o ns)1 In effect July 31, 1984 In effect July 31, 1984 Type of deposit Effective date Effective date 2 1 N Sa e v g i o n t g ia s ble order of withdrawal accounts 5 5 '/ '/ > 4 12/ 1 3 / 1 1 / / 8 84 0 5 51 '/ / 2 4 12 7 /3 /1 1 / / 7 8 9 0 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 5Vl 5 7-31 days of less than $2,500" 1/1/84 51/2 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 Dec. Jan. Feb. Mar. Apr. May June U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 13,899 17,067 18,888 3,695 0 368 3,159 3,283 610 801 2 Gross sales 6,746 8,369 3,420 0 1,967 828 0 0 2,003 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 1,816 3,000 2,400 0 1,300 600 0 3,283 2,200 801 Others within 1 year 5 Gross purchases 317 312 484 0 0 0 0 198 0 0 6 Gross sales 23 0 0 0 0 0 0 0 0 0 7 Maturity shift 13,794 17,295 18,887 915 573 -2,488 1,012 347 2,739 1,069 8 Exchange -12,869 -14,164 -16,553 0 1,530 -4,574 0 -2,223 -1,807 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 0 0 808 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -10,299 -14,524 -15,533 -915 -487 2,488 -1,012 -273 -2,279 -1,069 13 Exchange 10,117 11,804 11,641 0 1,530 2,861 0 2,223 1,150 0 5 to 10 years 14 Gross purchases 393 388 890 0 0 0 0 220000 0 0 15 Gross sales 0 0 0 0 300 0 0 0 0 0 16 Maturity shift -3,495 -2,172 -2,450 0 -86 97 0 -75 -383 0 17 Exchange 1,500 2,128 2,950 0 0 1,000 0 0 400 0 Over 10 years 18 Gross purchases 379 307 383 0 0 0 0 277 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 -601 -904 0 0 -97 0 0 -77 0 21 Exchange 1,253 234 1,962 0 0 713 0 0 257 0 All maturities 22 Gross purchases 16,690 19,870 22,540 3,695 0 368 3,159 1,484 610 801 23 Gross sales 6,769 8,369 3,420 0 2,267 828 0 0 2,003 0 24 Redemptions 1,816 3,000 2,487 0 1,300 600 0 0 2,200 0 Matched transactions 25 Gross sales 589,312 543,804 578,591 58,979 54,833 55,656 66,827 72,293 79,313 61,017 26 Gross purchases 589,647 543,173 576,908 56,404 58,096 47,310 73,634 71,754 79,608 61,331 Repurchase agreements 27 Gross purchases 79,920 130,774 105,971 3,644 14,245 0 4,996 1155,,331133 88,,226677 2233,,229988 28 Gross sales 78,733 130,286 108,291 2,260 15,629 0 4,996 8,220 12,199 26,460 29 Net change in U.S. government securities 9,626 8,358 12,631 2,504 -1,688 -9,407 9,966 11,321 -7,228 -2,047 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 494 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 108 189 292 2 40 38 10 2 40 15 Repurchase agreements 33 Gross purchases 13,320 18,957 8,833 634 931 0 609 11,,224477 616 1,819 34 Gross sales 13,576 18,638 9,213 426 1,139 0 609 820 744 2,117 35 Net change in federal agency obligations 130 130 -672 206 -248 -38 -10 424 -169 -313 BANKERS ACCEPTANCES 36 Repurchase agreements, net -582 1,285 -1,062 418 -418 0 0 305 122 -426 37 Total net change in System Open Market Account 9,175 9,773 10,897 3,128 -2,354 -9,444 9,956 12,050 -7,275 -2,786 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 Nonfinancial Statistics • August 1984 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAccccoouunntt 1984 1984 June 27 July 4 July 11 July 18 July 25 May June July Consolidated condition statement ASSETS 1 Gold certificate account 11,100 11,100 11,099 11,099 11,099 11,104 11,100 11,099 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 445 421 437 413 429 443 435 437 Loans 4 To depository institutions 3,332 5,222 4,600 6,958 6,995 2,832 4,760 7,238 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 00 00 00 00 442266 00 00 Federal agency obligations 7 Bought outright 8,501 8,501 8,500 8,500 8,499 88,,551155 88,,550011 8,499 8 Held under repurchase agreements 0 0 275 159 0 336 0 0 U.S. government securities Bought outright 9 Bills 66,976 67,880 66,499 66,699 64,236 65,814 66,928 64,774 10 Notes 63,870 63,870 63,870 63,870 63,870 63,870 63,870 63,870 11 Bonds 22,061 22,061 22,061 22,061 22,061 22,061 22,061 22,061 12 Total bought outright1 152,907 153,811 152,430 152,630 150,167 151,745 152,859 150,705 n Held under repurchase agreements 0 0 3,083 3,007 0 3,124 0 0 14 Total U.S. government securities 152,907 153,811 155,513 155,637 150,167 154,869 152,859 150,705 15 Total loans and securities 164,740 167,534 168,888 171,254 165,661 166,978 166,120 166,442 16 Cash items in process of collection 7,511 10,956 7,966 8,489 6,312 8,770 6,350 9,747 17 Bank premises 555 555 555 556 555 553 556 555 Other assets 18 Denominated in foreign currencies2 3,814 3,735 3,737 3,740 3,743 3,794 3,733 3,638 19 All other3 4,416 4,384 4,534 4,674 4,750 3,840 5,297 4,821 20 Total assets 197,199 203,303 201,834 204,843 197,167 200,100 198,209 201,357 LIABILITIES 21 Federal Reserve notes 159,296 161,464 162,371 161,316 160,396 158,727 159,915 160,395 Deposits 2? To depository institutions 20,716 22,043 22,244 25,600 20,221 21,686 20,252 21,355 23 U.S. Treasury—General account 3,533 2,891 3,488 3,848 3,958 4,855 4,397 3,972 24 Foreign—Official accounts 243 205 217 195 246 295 237 215 25 Other 310 364 381 275 265 416 432 309 26 Total deposits 24,802 25,503 26,330 29,918 24,690 27,252 25,318 25,851 77 Deferred availability cash items 7,159 10,282 7,195 7,483 6,114 8,182 7,005 9,076 28 Other liabilities and accrued dividends4 2,530 2,485 2,567 2,705 2,553 2,593 2,528 2,463 29 Total liabilities 193,787 199,734 198,463 201,422 193,753 196,754 194,766 197,785 CAPITAL ACCOUNTS 30 Capital paid in 1,541 1,544 1,546 1,547 1,545 1,531 1,541 1,545 31 Surplus 1,465 1,465 1,465 1,465 1,465 1,465 1,465 1,465 32 Other capital accounts 406 560 360 409 404 350 437 562 33 Total liabilities and capital accounts 197,199 203,303 201,834 204,843 197,167 200,100 198,209 201,357 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 116,908 116,080 115,478 115,622 116,143 114,495 111166,,223344 115,318 Federal Reserve note statement 35 Federal Reserve notes outstanding 187,787 187,827 188,448 188,860 188,964 185,998 187,637 188,428 36 LESS: Held by bank 28,491 26,363 26,077 27,544 28,568 27,271 27,722 28,033 37 Federal Reserve notes, net 159,296 161,464 162,371 161,316 160,3% 158,727 159,915 160,395 Collateral held against notes net: 38 Gold certificate account 11,100 11,100 11,099 1111,,009999 11,099 11,104 1111,,110000 11,099 39 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 143,578 145,746 146,654 145,599 144,679 143,005 144,197 144,678 42 Total collateral 159,296 161,464 162,371 16)1,316 160,396 158,727 159,915 160,395 1. Includes securities loaned—fully guaranteed by U.S. government securities 3. Includes special investment account at Chicago of Treasury bills maturing pledged with Federal Reserve Banks—and excludes (if any) securities sold and within 90 days. scheduled to be bought back under matched sale-purchase transactions. 4. Includes exchange-translation account reflecting the monthly revaluation at 2. Assets shown in this line are revalued monthly at market exchange rates. market exchange rates of foreign-exchange commitments. 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 TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1984 1984 June 27 July 4 July 11 July 18 July 25 May 31 June 29 July 31 1 Loans—Total 3,332 5,222 4,600 6,958 6,995 2,832 4,760 7,238 ? Within 15 days 3,294 5,029 4,413 6,917 6,947 2,764 4,674 7,135 16 days to 90 days 38 193 187 41 48 68 86 103 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 0 426 0 0 6 Within 15 days 0 0 0 0 0 426 0 0 7 16 days to 90 days 0 0 0 0 0 0 0 0 8 91 days to 1 year 0 0 0 0 0 0 0 0 9 U.S. government securities—Total 152,907 153,811 155,513 155,637 150,167 154,869 152,859 150,705 10 Within 15 days1 7,687 4,659 7,763 6,446 3,289 7,751 5,129 3,013 111? 9 1 1 6 d d a a y y s s t t o o 9 1 0 y d ea a r y s 4 3 5 1 , , 0 6 4 1 1 4 4 35 5 , , 0 2 2 1 1 3 4 3 3 5 , , 3 4 3 9 5 7 4 3 4 5 , , 9 2 8 9 0 3 4 3 7 0 , , 1 8 0 5 7 3 4 3 7 0 , , 6 9 3 2 1 2 4 34 5 , , 0 1 5 1 3 2 4 3 4 3 , ,3 7 1 0 7 2 n Over 1 year to 5 years 35,138 35,491 35,491 35,574 35,574 35,138 35,138 36,329 14 Over 5 years to 10 years 14,339 14,339 14,339 14,256 14,256 14,339 14,339 14,256 15 Over 10 years 19,088 19,088 19,088 19,088 19,088 19,088 19,088 19,088 16 Federal agency obligations—Total 8,501 8,501 8,775 8,659 8,499 8,851 8,501 8,499 17 Within 15 days1 159 41 381 349 103 495 159 85 18 16 days to 90 days 519 654 549 568 593 559 519 613 19 91 days to 1 year 1,647 1,630 1,669 1,566 1,684 1,638 1,647 1,719 70 Over 1 year to 5 years 4,476 4,476 4,476 4,476 4,408 4,421 4,476 4,371 71 Over 5 years to 10 years 1,301 1,301 1,301 1,301 1,312 1,339 1,301 1,312 22 Over 10 years 399 399 399 399 399 399 399 399 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 Nonfinancial Statistics • August 1984 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1983 1984 - 1980 1981 1982 1983 Dec. Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjustec ADJUSTED FOR 1 Total reserves2 30.64 31.51 33.63 35.28 35.25 35.28 35.50 36.07 36.10 36.10 36.43 37.23 2 Nonborrowed reserves 28.95 30.88 33.00 34.51 34.34 34.51 34.79 35.50 35.15 34.87 33.44 33.93 3 Nonborrowed reserves plus extended credit3 28.95 31.03 33.18 34.51 34.35 34.51 34.79 35.50 35.18 34.91 33.48 35.80 4 Required reserves 30.13 31.20 33.13 34.72 34.72 34.72 34.89 35.12 35.40 35.61 35.85 36.47 5 Monetary base4 150.11 157.82 169.81 184.97 183.95 184.97 186.94 188.58 188.72 189.66 191.26 193.12 Not seasonally adjusted 6 Total reserves2 31.34 32.23 34.35 36.00 35.35 36.00 37.30 35.65 35.63 36.46' 35.76 36.76 7 Nonborrowed reserves 29.65 31.59 33.71 35.22 34.45 35.22 36.59 35.09 34.68 35.23 32.78 33.46 8 Nonborrowed reserves plus extended credit3 29.65 31.74 33.90 35.23 34.45 35.23 36.59 35.09 34.70 35.28 32.81 35.33 9 Required reserves 30.82 31.91 33.85 35.44 34.82 35.44 36.69 34.71 34.71r 35.97' 35.19 35.99 10 Monetary base4 152.80 160.65 172.83 188.23 185.04 188.23 188.10 185.93 187.17 189.65 190.33 193.20 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 40.66 41.93 41.85 38.89 38.14 38.89 40.12 36.37 36.28 37.15 36.52 37.52 12 Nonborrowed reserves 38.97 41.29 41.22 38.12 37.24 38.12 39.41 35.80 35.33' 35.92 33.53 34.22 13 Nonborrowed reserves plus extended credit3 38.97 41.44 41.41 38.12 37.25 38.12 39.41 35.80 35.33 35.78 33.83 36.22 14 Required reserves 40.15 41.61 41.35 38.33 37.62 38.33 39.51 35.42 35.57 36.66 35.94 36.75 15 Monetary base4 163.00 170.47 180.52 192.36 188.97 192.36 192.30 186.67 187.81 190.34' 191.01 193.96 1. Figures incorporate adjustments for discontinuities associated with the of vault cash holdings of thrift institutions that is included in the currency implementation of the Monetary Control Act and other regulatory changes to component of the money stock plus, for institutions not having required reserve reserve requirements. To adjust for discontinuities due to changes in reserve balances, the excess of current vault cash over the amount applied to satisfy requirements on reservable nondeposit liabilities, the sum of such required current reserve requirements. After the introduction of contemporaneous reserve reserves is subtracted from the actual series. Similarly, in adjusting for discontin- requirements (CRR), currency and vault cash figures are measured over the uities in the monetary base, required clearing balances and adjustments to weekly computation period ending Monday. compensate for float also are subtracted from the actual series. Before CRR, all components of the monetary base other than excess reserves 2. Total reserves not adjusted for discontinuities consist of reserve balances are seasonally adjusted as a whole, rather than by component, and excess with Federal Reserve Banks, which exclude required clearing balances and reserves are added on a not seasonally adjusted basis. After CRR, the seasonally adjustments to compensate for float, plus vault cash used to satisfy reserve adjusted series consists of seasonally adjusted total reserves, which include requirements. Such vault cash consists of all vault cash held during the lagged excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted computation period by institutions having required reserve balances at Federal currency component of the money stock and the remaining items seasonally Reserve Banks plus the amount of vault cash equal to required reserves during the adjusted as a whole. maintenance period at institutions having no required reserve balances. 5. Reflects actual reserve requirements, including those on nondeposit liabil- 3. Extended credit consists of borrowing at the discount window under the ities, with no adjustments to eliminate the effects of discontinuities associated terms and conditions established for the extended credit program to help with implementation of the Monetary Control Act or other regulatory changes to depository institutions deal with sustained liquidity pressures. Because there is reserve requirements. not the same need to repay such borrowing promptly as there is with traditional short-term adjustment credit, the money market impact of extended credit is NOTE. Latest monthly and biweekly figures are available from the Board's similar to that of nonborrowed reserves. H.3(502) statistical release. Historical data and estimates of the impact on 4. The monetary base not adjusted for discontinuities consists of total reserves required reserves of changes in reserve requirements are available from the plus required clearing balances and adjustments to compensate for float at Federal Banking Section, Division of Research and Statistics, Board of Governors of the Reserve Banks and the currency component of the money stock less the amount 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 1984 1980 1981 1982 1983 DDeecc.. DDeecc.. DDeecc.. DDeecc.. MMaarr.. AApprr..'' MMaayy'' JJuunnee Seasonally adjusted 1 Ml 414.9 441.9 480.5 525.3 535.1' 535.4 541.1 546.3 7 M2 1,632.6 1,796.6 1,965.3 2,196.2 2,229.9' 2,242.9 2,258.9 2,272.3 M3 1,989.8 2,236.7 2,460.3 2,707.8' 2,765.3' 2,790,1 2,816.7 2,838.3 4 L 2,326.0 2,598.4 2,868.7 3,178.0' 3,268.8' 3,295.4 3,327.6 n.a. 5 Debt2 3,946.9 4,323.8 4,710.1 5,204.3' 5,371.4' 5,431.8 5,497.2 n.a. Ml components 6 Currency2 116.7 124.0 134.1 148.0 150.9 151.8 152.9 154.2 7 Travelers checks3 4.2 4.3 4.3 4.9 5.0 5.1 5.1 5.1 8 Demand deposits4 266.5 236.2 239.7 243.7 244.0 245.3 245.3 248.3 9 Other checkable deposits5 27.6 77.4 102.4 128.8 135.3 133.2 137.8 138.7 Nontransactions components 10 In M26 1,217.7 1,354.6 1,484.8 1,670.9 1,694.8 1,707.5 1,717.8 1,726.0 11 In M3 only7 357.2 440.2 495.0 511.7' 535.3' 547.2 557.8 566.0 Savings deposits9 12 Commercial Banks 185.9 159.7 164.9 134.6 128.9 128.6 128.2 128.0 13 Thrift Institutions 215.6 186.1 197.2 178.2 176.6 176.9 177.3 177.2 Small denomination time deposits9 14 Commerical Banks 287.5 349.6 382.2 353.1 353.5 356.0 360.5 365.7 15 Thrift Institutions 443.9 477.7 474.7 440.0 449.9 452.4 453.4 463.6 Money market mutual funds 16 General purpose and broker/dealer 61.6 150.6 185.2 138.2 144.8 146.0 146.5 148.8 17 Institution-only 15.0 36.2 48.4 40.3 41.8 41.8 42.0 42.3 Large denomination time deposits10 18 Commercial Banks11 213.9 247.3 261.8 225.5 232.8 236.4 243.8 249.6 19 Thrift Institutions 44.6 54.3 66.1 100.4 115.5 119.5 123.8 129.4 Debt components 20 Federal debt 742.8 830.1 991.4 1,174.0 1,220.7 1,233.6 1,253.4 n.a. 21 Non-federal debt 3,204.1 3,493.7 3,718.7 4,030.4' 4,150.7' 4,198.2 4,243.8 n.a. Not seasonally adjusted 22 Ml 424.8 452.3 491.9 537.8 528.1 543.2 543.9 545.5 23 M2 1,635.4 1,798.7 1,967.4 2,198.0 2,230.9 2,254.7 2,253.8 2,274.1 24 M3 1,996.1 2,242.7 2,466.6 2,713.9' 2,766.5' 2,798.7 2,812.0 2,837.0 25 L 2,332.8 2,605.6 2,876.5 3,185.8' 3,275.0' 3,306.9 3,323.5 n.a. 26 Debt2 3,946.9 4,323.8 4,710.1 5,197.5' 5,352.9' 5,409.2 5,469.8 n.a. Ml components 27 Currency2 118.8 126.1 136.4 150.5 149.8 151.5 152.9 154.9 28 Travelers checks3 3.9 4.1 4.1 4.6 4.8 4.8 5.0 5.4 29 Demand deposits4 274.7 243.6 247.3 251.6 239.4 247.8 241.3 247.0 30 Other checkable deposits5 27.4 78.5 104.1 131.2 134.1 139.0 135.8 138.2 Nontransactions components 31 M26 1,210.6 1,346.3 1,475.5 1,660.2 1,702.8 1,711.5 1,718.9 1,728.6 32 M3 only7 360.7 444.1 499.2 514.8 536.3 544.0 558.2 562.9 Money market deposit accounts 33 Commercial banks n.a. n.a. 26.3 230.0 242.6 245.4 244.3 244.9 34 Thrift institutions n.a. n.a. 16.6 145.9 149.9 151.0 150.2 148.0 Savings deposits8 35 Commercial Banks 183.8 157.5 162.1 132.0 130.2 130.5 129.9 129.7 36 Thrift Institutions 214.4 184.7 195.5 176.5 177.0 178.2 178.3 178.9 Small denomination time deposits9 37 Commercial Banks 286.0 347.7 380.1 351.0 356.0 356.5 360.5 365.4 38 Thrift Institutions 442.3 475.6 472.4 437.6 451.6 454.2 457.4 463.9 Money market mutual funds 39 General purpose and broker/dealer 61.6 150.6 185.2 138.2 144.8 146.0 146.5 148.8 40 Institution-only 15.0 36.2 48.4 40.3 41.8 41.8 42.0 42.3 Large denomination time deposits10 41 Commercial Banks11 218.5 252.1 266.2 229.0 233.1 233.7 241.6 247.1 42 Thrift Institutions 44.3 54.3 66.2 100.7 114.2 118.2 123.3 128.2 Debt components 43 Federal debt 742.8 830.1 991.4 1,170.2 1,223.6 1,235.9 1,248.7 n.a. 44 Non-federal debt 3,204.1 3,943.7 3,718.7 4,027.3' 4,129.3' 4,173.3 4,221.1 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 • August 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. 1984 1199881111 1199882211 Jan. Feb. Mar. Apr. May June DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 80,858.7 90,914.4 108,646.4 120,954.6 126,749.9 116,416.7 129,229.4 131,456.9 121,488.2 2 Major New York City banks 33,891.9 37,932.9 47,336.9 51,952.5 55,776.7 50,765.2 57,868.3 60,351.3 53,147.7 3 Other banks 46,966.9 52,981.6 61,309.5 69,002.2 70,973.1 65,651.5 71,361.1 71,105.6 68,340.4 4 ATS-NOW accounts3 743.4 1,036.2 1,394.9 1,345.1 1,491.1 1,464.9 1,432.1 1,608.9 1,515.8 5 Savings deposits4 672.7 721.4 735.7 620.8 708.3 688.9 606.5 688.8 677.9 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 285.8 324.2 376.8 414.2 434.7 394.9 441.7 442.7 401.8 7 Major New York City banks 1,105.1 1,287.6 1,512.0 1,650.9 1,747.7 1,649.5 2,012.5 1,938.7 1,665.2 8 Other banks 186.2 211.1 238.5 264.9 273.3 248.7 270.5 267.5 252.7 9 ATS-NOW accounts3 14.0 14.5 15.5 13.8 15.0 14.7 14.6 16.0 15.1 10 Savings deposits4 4.1 4.5 5.3 4.7 5.5 5.4 4.8 5.5 5.4 Not seasonally adjusted DEBITS TO Demand deposits2 11 All insured banks 81,197.9 91,031.9 108,459.5 123,567.2 114,721.3 124,088.6 121,514.4 132,521.7 128,522.3 12 Major New York City banks 34,032.0 38,001.0 47,238.2 52,895.2 50,724.8 54,301.1 53,514.4 60,214.5 57,168.1 13 Other banks 47,165.9 53,030.9 61,221.3 70,672.0 63,996.5 69,787.5 68,000.0 72,307.2 71,354.3 14 ATS-NOW accounts3 737.6 1,027.1 1,387.5 1,601.5 1,389.5 1,504.3 1,670.1 1,599.0 1,621.7 15 MMDA5 0 0 567.4 793.4 682.1 790.3 918.9 883.6 894.8 16 Savings deposits4 672.9 720.0 736.4 672.5 649.9 711.9 665.7 673.8 686.2 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 286.1 325.0 376.1 412.3 402.7 431.8 410.8 456.8 428.6 18 Major New York City banks 1,114.2 1,295.7 1,510.0 1,581.5 1,618.7 1,795.5 1,770.2 1,997.1 1,792.0 19 Other banks 186.2 211.5 238.1 265.4 252.4 271.4 256.0 278.1 266.3 20 ATS-NOW accounts3 14.0 14.3 15.4 16.2 14.3 15.2 16.4 16.1 16.2 21 MMDA5 0 0 2.8 3.4 2.9 3.3 3.8 3.6 3.7 22 Savings deposits4 4.1 4.5 5.3 5.2 5.1 5.5 5.2 5.3 5.4 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, Digitized fodra FtaR arAe SonE aRn end-of-month basis. Washington, D.C. 20551. 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 1982 1983 1984 1982 1983 1984 category Dec. Dec/ Mar/ Apr/ Mayr June Dec. Dec/ Mar/ Apr/ May' June Seasonally adjusted Not seasonally adjusted 1 Total loans and securities3 1,412.0 1,566.5 1,621.8 1,630.6 1,651.4 1,655.7 1,422.4 1,577.8 1,616.3 1,630.1 1,644.3 1,653.0 2 U.S. Treasury securities 130.9 188.0 187.1 185.9 187.5 183.3 131.5 188.8 189.8 189.2 186.7 183.8 3 Other securities 239.2 247.5 253.1 250.5 249.7 248.3 240.6 249.0 252.5 250.4 249.9 248.0 4 Total loans and leases3 1,042.0 1,131.0 1,181.7 1,194.3 11,,221144..22 11,,222244..11 11,,005500..33 11,,114400..00 11,,117744..00 11,,119900..44 11,,220077..88 11,,222211..22 5 Commercial and industrial loans 392.3 413.8 434.1 437.2 447.6 453.2 394.5 416.2 432.8 439.7 447.7 452.4 6 Real estate loans 303.1 334.6 346.7 350.5 354.6 359.3 304.0 335.6 345.7 349.4 353.2 357.5 7 Loans to individuals 191.9 219.2 231.4 235.3 239.7 243.8 193.2 220.7 229.3 233.6 238.3 242.8 8 Security loans 24.7 27.3 27.3 26.9 27.5 25.1 25.5 28.2 26.5 26.9 26.4 26.4 9 Loans to nonbank financial institutions 31.1 29.7 30.6 30.9 31.7 31.9 32.1 30.6 30.2 30.7 31.3 31.5 10 Agricultural loans 36.3 39.6 40.2 40.6 40.8 40.9 36.3 39.6 39.4 39.9 40.6 41.) 11 Lease financing receivables... 13.1 13.1 13.5 13.5 13.6 13.7 13.1 13.1 13.5 13.5 13.6 13.7 12 All other loans 49.5 53.7 57.9 59.5 58.8 56.3 51.5 56.0 56.6 56.8 56.8 55.8 MEMO 13 Total loans and securities plus loans sold3,4 1,415.0 1,568.9 1,624.9 1,633.8 1,654.2 1,658.3 1,425.4 1,580.2 1,619.4 1,633.2 1,647.2 1,655.7 14 Total loans plus loans sold3'4 ... 1,044.9 1,133.4 1,184.7 1,197.4 1,217.0 1,226.8 1,053.3 1,142.4 1,177.1 1,193.6 1,210.6 1,223.9 15 Total loans sold to affiliates3'4... 2.9 2.4 3.1 3.1 2.8 2.7 2.9 2.4 3.1 3.1 2.8 22..77 16 Commercial and industrial loans plus loans sold4 394.5 415.6 436.0 439.1 449.5 455.2 396.8 418.0 434.8 441.6 449.7 454.4 17 Commercial and industrial loans sold4 2.3 1.8 1.9 1.9 2.0 1.9 2.3 1.8 1.9 1.9 2.0 1.9 18 Acceptances held 8.5 8.3 9.4 9.6 9.9 9.6 9.5 9.1 9.0 8.8 9.3 9.7 19 Other commercial and industrial loans 383.7 405.5 424.6 427.6 437.7 443.6 385.1 407.1 423.8 430.8 438.4 442.8 20 To U.S. addressees5 373.4 395.3 412.4 415.5 424.7 430.6 372.6 394.5 411.7 418.9 426.6 431.2 21 To non-U.S. addressees .... 10.3 10.3 12.3 12.1 12.9 13.0 12.4 12.6 12.1 12.0 11.8 11.6 22 Loans to foreign banks 13.5 12.7 12.8 13.0 12.7 12.5 14.5 13.6 12.5 12.5 12.2 12.0 1. Includes domestically chartered banks; U.S. branches and agencies of 4. Loans sold are those sold outright to a bank's own foreign branches, foreign banks, New York investment companies majority owned by foreign nonconsolidated nonbank affiliates of the bank, the bank's holding company (if banks, and Edge Act corporations owned by domestically chartered and foreign not a bank), and nonconsolidated nonbank subsidiaries of the holding company. banks. 5. United States includes the 50 states and the District of Columbia. 2. Beginning December 1981, shifts of foreign loans and securities from U.S. banking offices to international banking facilities (IBFs) reduced the levels of NOTE. Data are prorated averages of Wednesday estimates for domestically several items. Seasonally adjusted data that include adjustments for the amounts chartered banks, based on weekly reports of a sample of domestically chartered shifted from domestic offices to IBFs are available in the Board's G.7 (407) banks and quarterly reports of all domestically chartered banks. For foreignstatistical release (available from Publications Services, Board of Governors of related institutions, data are averages of month-end estimates based on weekly the Federal Reserve System, Washington, D.C. 20551). reports from large agencies and branches and quarterly reports from all agencies, 3. Excludes loans to commercial banks in the United States. branches, investment companies, and Edge Act corporations engaged in banking. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • August 1984 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars 1981 1982 1983 1984 source Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan/ Feb.' Mar/ Apr.' May' June Total nondeposit funds 1 Seasonally adjusted2 96.3 82.9 83.4 85.4 82.0 96.3 100.3 98.2 102.3 108.1 111.7 116.7 105.3 2 Not seasonally adjusted 98.1 84.9 86.2 86.5 83.0 99.6 102.5 99.3 103.8 109.5 112.9 121.0 108.2 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 111.8 127.7 132.7 134.2 135.2 140.8 140.7 139.4 143.0 141.8 142.3 142.4 136.8 4 Not seasonally adjusted 113.5 129.7 135.5 135.3 136.2 144.1 142.8 140.4 144.5 143.3 143.5 146.7 139.6 5 Net balances due to foreign-related institutions, not seasonally adjusted -18.1 -47.7 -51.8 -51.3 -55.7 -47.0 -42.7 -43.6 -43.2 -36.9 -33.8 -28.5 -34.1 6 Loans sold to affiliates, not seasonally adjusted4 2.8 2.9 2.6 2.6 2.6 2.5 2.4 2.4 2.5 3.1 3.1 2.8 2.7 MEMO 7 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted5 -22.4 -39.6 -45.2 -46.3 -48.5 -43.0 -39.8 -38.8 -39.0 -34.9 -33.2 -29.9 -33.0 8 Gross due from balances 54.9 72.2 73.6 74.7 76.4 76.5 75.3 73.2 74.7 73.8 73.6 73.5 73.8 9 Gross due to balances 32.4 32.6 28.3 28.3 27.9 33.6 35.5 34.5 35.7 38.8 40.3 43.6 40.8 10 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted6 4.3 -8.1 -6.5 -5.0 -7.2 -4.0 -3.0 -4.8 -4.2 -1.9 -0.6 1.4 -1.1 11 Gross due from balances 48.1 54.7 53.6 53.5 55.5 53.5 54.1 53.4 53.0 50.2 49.7 49.9 50.9 12 Gross due to balances 52.4 46.6 47.0 48.5 48.3 49.5 51.1 48.6 48.8 48.3 49.2 51.3 49.8 Security RP borrowings 13 Seasonally adjusted" 59.0 71.0 76.1 78.1 79.9 83.3 84.8 85.5 86.9 85.5 86.9 84.0 79.0 14 Not seasonally adjusted 59.2 71.2 77.0 77.3 79.1 84.6 85.1 84.6 86.5 85.1 86.2 86.4 80.0 U.S. Treasury demand balances8 15 Seasonally adjusted 12.2 12.8 20.3 16.7 18.9 12.0 13.1 16.5 20.6 16.7 15.9 12.2 12.9 16 Not seasonally adjusted 11.1 10.8 16.4 17.9 24.7 7.5 10.8 19.6 22.3 17.5 16.5 12.8 12.4 Time deposits, $100,000 or more9 17 Seasonally adjusted 325.4 347.9 284.1 282.8 278.3 280.7 283.1 284.4 283.8 289.2 292.3 302.8 312.5 18 Not seasonally adjusted 330.4 354.6 284.4 284.7 280.3 283.0 288.1 287.1 285.0 288.8 288.7 298.7 307.4 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 BANKS' 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 11,,448833..00 11,,550022..33 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 • August 1984 1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on December 31, 1982, Assets and Liabilities Millions of dollars, Wednesday figures 1984 AAccccoouunntt May 30 June 6' June 13r June 2V June 27' July 4 July 11 July 18 July 25 1 Cash and balances due from depository institutions 96,538 87,576 86,772 97,030 86,774 105,555 88,175 92,149 82,079 2 Total loans, leases and securities, net 760,239 765,062 757,904 763,425 758,518 770,225 759,080 762,310 760,895 Securities 3 U.S. Treasury and government agency 76,848 75,013 73,615 72,234 72,172 72,898 74,155 71,977 72,432 4 Trading account 11,813 9,949 8,952 7,749 7,630 8,327 10,157 8,225 8,642 5 Investment account, by maturity 65,035 65,065 64,662 64,485 64,542 64,571 63,998 63,752 63,791 6 One year or less 16,980 17,395 16,916 16,965 16,570 17,270 16,448 16,196 16,018 7 Over one through five years 35,772 35,511 35,549 35,390 35,596 34,995 35,282 35,304 35,490 8 Over five years 12,283 12,158 12,198 12,130 12,376 12,306 12,268 12,252 12,282 9 Other securities 48,675 48,569 48,168 47,263 47,590 46,977 46,417 46,666 46,911 10 Trading account 4,446 4,643 4,321 4,002 4,112 4,443 3,818 3,905 4,077 11 Investment account 44,229 43,926 43,848 43,261 43,478 42,534 42,599 42,762 42,834 12 States and political subdivisions, by maturity 40,047 39,942 39,896 39,608 39,458 38,502 38,533 38,666 38,740 13 One year or less 4,806 4,774 4,651 4,415 4,412 3,909 4,031 4,077 4,121 14 Over one year 35,241 35,168 35,245 35,193 35,046 34,594 34,501 34,589 34,619 15 Other bonds, corporate stocks, and securities 4,182 3,984 3,952 3,653 4,021 4,031 4,066 4,0% 4,094 16 Other trading account assets 1,932 2,292 2,256 2,265 2,256 2,339 2,436 2,507 2,404 Loans and leases 17 Federal funds sold1 44,043 48,558 43,695 48,661 42,507 47,372 40,969 46,358 41,927 18 To commercial banks 30,021 36,477 31,475 35,961 29,086 34,357 28,259 33,760 29,551 19 To nonbank brokers and dealers in securities 8,397 7,870 7,618 8,173 8,411 8,520 7,981 7,873 7,523 20 To others 5,625 4,211 4,602 4,527 5,010 4,495 4,729 4,725 4,853 21 Other loans and leases, gross 603,617 605,612 605,165 608,014 608,978 616,227 610,700 610,403 612,866 22 Other loans, gross 592,012 593,918 593,476 596,312 597,259 604,420 598,985 598,677 601,091 23 Commercial and industrial 239,622 240,759 240,703 242,940 243,601 244,652 243,457 244,296 244,198 24 Bankers acceptances and commercial paper 3,776 3,527 3,792 3,610 3,916 4,267 4,301 4,032 3,877 25 All other 235,846 237,233 236,911 239,331 239,685 240,385 239,156 240,264 240,321 26 U.S. addressees 229,264 230,797 230,422 232,980 233,243 233,792 232,502 233,622 233,721 27 Non-U.S. addressees 6,582 6,436 6,489 6,350 6,442 6,592 6,655 6,642 6,600 28 Real estate loans 149,327 149,608 150,226 150,550 150,773 150,848 151,282 152,009 151,860 29 To individuals for personal expenditures 97,510 97,842 98,244 98,795 99,339 99,497 99,708 100,117 100,587 30 To depository and financial institutions 42,352 42,283 41,748 40,649 41,050 43,194 41,629 41,159 41,400 31 Commercial banks in the United States 9,877 9,528 9,808 8,894 9,359 10,065 9,129 8,920 9.154 32 Banks in foreign countries 6,662 6,799 6,388 6,128 6,388 6,784 6,557 6,354 6,756 33 Nonbank depository and other financial institutions. 25,813 25,956 25,552 25,627 25,303 26,346 25,943 25,886 25,489 34 For purchasing and carrying securities 14,509 14,517 13,871 14,130 13,127 14,311 12,224 11,341 12,252 35 To finance agricultural production 7,586 7,648 7,718 7,790 7,784 7,809 7,829 7,874 7,816 36 To states and political subdivisions 23,304 23,771 23,920 24,074 24,126 24,837 25,315 24,616 24,612 37 To foreign governments and official institutions .... 4,022 4,010 4,050 4,030 3,995 4,287 4,135 4,102 4,031 38 All other 13,780 13,478 12,996 13,354 13,463 14,984 13,404 13,162 14,335 39 Lease financing receivables 11,605 11,693 11,689 11,702 11,719 11,807 11,714 11,726 11,775 40 LESS: Unearned income 5,106 5,088 5,116 5,130 5,140 5,117 5,160 5,159 5,168 41 Loan and lease reserve 9,769 9,894 9,879 9,882 9,846 10,470 10,437 10,442 10,478 42 Other loans and leases, net 588,742 590,629 590,170 593,001 593,993 600,640 595,104 594,802 597,220 43 All other assets 134,873 140,717 137,733 139,442 140,450 145,481 142,337 138,969 136,800 44 Total assets 991,651 993,355 982,408 999,897 985,742 1,021,261 989,592 993,428 979,774 Deposits 45 Demand deposits 185,052 180,237 180,307 180,545 177,274 204,450 180,661 180,600 173,460 46 Individuals, partnerships, and corporations 140,804 137,820 140,526 136,720 134,729 153,670 138,988 137,088 132,511 47 States and political subdivisions 4,623 4,669 4,261 5,041 4,701 5,444 4,799 4,938 4,633 48 U.S. government 1,076 1,879 1,366 4,066 2,295 1,417 2,191 3,035 1,741 49 Depository institutions in United States 22,562 21,132 19,903 21,382 20,964 27,510 20,623 21,246 19,231 50 Banks in foreign countries 6,585 6,345 5,772 5,618 6,215 6,519 5,914 5,913 6,281 51 Foreign governments and official institutions 845 791 798 816 788 1,140 900 866 1,015 52 Certified and officers' checks 8,557 7,601 7,681 6,901 7,581 8,751 7,246 7,513 8,048 53 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers).. 32,673 34,386 33,569 32,700 31,967 34,483 33,447 33,033 32,342 54 Nontransaction balances 426,900 428,718 429,317 428,780 431,359 432,228 432,223 432,202 433,528 55 Individuals, partnerships and corporations 395,658 397,878 398,407 397,574 399,602 401,516 401,740 401,848 402,651 56 States and political subdivisions 19,547 19,074 19,370 19,258 19,443 19,027 19,225 19,433 19,898 57 U.S. government 324 322 303 316 311 337 311 307 314 58 Depository institutions in the United States 8,106 7,970 7,746 8,144 8,328 8,101 7,740 7,506 7,4% 59 Foreign governments, official institutions and banks .. 3,264 3,474 3,491 3,488 3,674 3,247 3,207 3,108 3,171 60 Liabilities for borrowed money 180,319 187,058 176,711 194,274 177,603 181,874 179,122 182,230 175,757 61 Borrowings from Federal Reserve Banks 1,857 3,915 1,950 3,690 2,466 4,445 4,000 6,235 6,217 62 Treasury tax-and-loan notes 2,960 2,748 2,066 15,719 10,751 2,458 7,568 6,231 7,889 63 All other liabilities for borrowed money2 175,502 180,395 172,695 174,864 164,386 174,970 167,554 169,763 161,651 64 Other liabilities and subordinated note and debentures 99,626 94,957 94,707 96,160 100,249 101,351 97,120 98,556 97,839 65 Total liabilities 924,570 925,356 914,611 932,458 918,452 954,386 922,573 926,620 912,927 66 Residua) (total assets minus total liabilities)3 67,080 67,999 67,797 67,439 67,290 66,874 67,019 66,808 66,847 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. 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 May 30 June 6 June 13 June 20 June 27' July 4 July 11 July 18 July 25 1 Cash and balances due from depository institutions 22,490 19,721 19,170 23,327 20,276 23,864 20,219 22,330 20,861 2 Total loans, leases and securities, net1 164,164 163,778 160,949 164,208 162,920 167,776 160,555 163,157 162,231 Securities 4 5 Investment account, by maturity. 10,142 9,840 9,765 9,632 9,494 9,419 9,441 9,440 9,405 6 One year or less 1,905 1,791 1,719 1,637 1,498 1,832 1,695 1,650 1,658 7 Over one through five years 7,090 6,897 6,895 6,847 6,848 6,449 6,599 6,642 6,603 8 Over five years 1,148 1,152 1,151 1,149 1,149 1,138 1,147 1,148 1,144 Q 10 11 Investment account 9,699 9,638 9,535 9,451 9,431 9,052 9,083 9,155 9,162 12 States and political subdivisions, by maturity 8,968 8,959 8,845 8,770 8,751 8,384 8,406 8,479 8,486 N One year or less 1,572 1,563 1,445 1,380 1,355 1,055 1,072 1,085 1,095 14 Over one year 7,396 7,396 7,400 7,391 7,397 7,328 7,333 7,394 7,391 15 Other bonds, corporate stocks and securities 731 679 690 681 679 668 677 676 676 1166 Loans and leases 17 Federal funds sold3 14,771 14,187 12,286 15,575 14,462 16,478 12,440 15,365 12,489 18 To commercial banks 7,283 8,463 6,442 9,196 8,056 10,461 6,575 9,489 7,238 19 To nonbank brokers and dealers in securities 4,324 3,617 3,426 3,848 3,660 3,829 3,310 3,336 2,838 20 To others 3,164 2,106 2,418 2,531 2,746 2,188 2,555 2,540 2,413 71 Other loans and leases, gross 134,033 134,655 133,924 134,123' 134,056 137,319 134,104 133,705 135,692 22 Other loans, gross 132,011 132,615 131,894 132,080' 132,013 135,295 132,080 131,670 133,649 23 Commercial and industrial 63,160' 64,118 63,821 64,432' 64,176 64,827 64,278 64,526 64,441 24 Bankers acceptances and commercial paper 948 800 870 763 736 756 780 736 782 25 All other 62,213' 63,319 62,951 63,668 63,441 64,071 63,498 63,790 63,658 26 U.S. addressees 60,902' 62,029 61,682 62,408 62,259 62,877 62,347 62,691 62,595 27 Non-U.S. addressees 1,310 1,290 1,269 1,261 1,182 1,194 1,151 1,099 1,064 28 Real estate loans 21,866' 21,925 22,056 22,235 22,171 22,014 22,224 22,294 21,997 29 To individuals for personal expenditures 14,605' 14,752 14,721 14,794 14,846 14,715 14,748 14,823 14,869 30 To depository and financial institutions 12,732 12,782 12,638 11,791 12,224 13,398 12,700 12,642 12,875 31 Commercial banks in the United States 2,010 2,014 2,265 1,6% 2,010 2,379 1,860 1,891 1,714 32 Banks in foreign countries 2,187 2,402 2,125 1,875 2,016 2,318 2,288 2,228 2,626 33 Nonbank depository and other financial institutions. 8,534 8,366 8,248 8,221 8,197 8,702 8,552 8,522 8,534 34 For purchasing and carrying securities 7,888' 7,382 7,114 6,838 6,598 7,160 5,590 5,041 5,965 35 To finance agricultural production 520 510 497 507 474 472 480 470 460 36 To states and political subdivisions 6,732 7,101 7,168 7,282 7,332 7,712 7,856 7,800 7,848 37 To foreign governments and official institutions .... 406 393 381 3% 388 594 426 381 381 38 All other 4,101 3,650 3,500 3,804 3,803 4,402 3,777 3,693 4,813 39 Lease financing receivables 2,022 2,041 2,030 2,042 2,043 2,024 2,023 2,036 2,044 40 LESS: Unearned income 1,522 1,521 1,530 1,532 1,516 1,511 1,536 1,531 1,526 41 Loan and lease reserve 2,960 3,022 3,031 3,042 3,008 2,979 2,977 2,977 2,992 42 Other loans and leases, net 129,551 130,113 129,363 129,549 129,532 132,828 129,591 129,197 131,174 43 All other assets4 63,430 67,309 66,050 63,981 63,328 67,765 66,886 63,537 62,599 44 Total assets 250,084 250,808 246,169 251,516 246,524 259,406 247,660 249,024 245,691 Deposits 45 Demand deposits 47,373 44,406 44,273 45,136 45,382 52,565 43,798 46,083 46,273 46 Individuals, partnerships, and corporations 32,016 29,766 30,731 31,130 30,451 35,372 29,980 31,223 30,995 47 States and political subdivisions 563 637 541 737 696 863 704 896 610 48 U.S. government 175 419 265 765 547 249 504 688 392 49 Depository institutions in the United States 4,554 4,722 4,262 4,635 4,782 6,470 4,406 4,690 4,321 50 Banks in foreign countries 5,194 4,992 4,426 4,337 4,856 5,116 4,591 4,526 4,983 51 Foreign governments and official institutions 618 594 547 618 583 932 704 664 812 52 Certified and officers' checks 4,252 3,276 3,501 2,913 3,466 3,563 2,909 3,394 4,160 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) .. 3,651 3,803 3,745 3,666 3,606 3,812 3,716 3,707 3,540 54 Nontransaction balances 76,050 76,875 77,285 77,490 78,519 78,750 78,278 78,531 79,536 55 Individuals, partnerships and corporations 68,522 69,189 69,614 69,591 70,259 71,248 70,723 71,066 71,850 56 States and political subdivisions 2,601 2,608 2,747 2,936 2,961 2,892 2,919 3,028 3,178 57 U.S. government 28 30 30 31 34 33 29 29 35 58 Depository institutions in the United States 3,283 3,222 2,985 3,042 3,235 2,951 2,989 2,7% 2,840 59 Foreign governments, official institutions and banks .. 1,615 1,826 1,908 1,890 2,028 1,627 1,618 1,611 1,633 60 Liabilities for borrowed money 59,448 64,272 59,237 63,152 54,414 58,629 58,778 55,748 51,262 61 575 750 400 62 Treasury tax-and-loan notes 913 678 520 4,005 2,760 511 1,966 1,659 2,148 63 All other liabilities for borrowed money5 58,536 63,020 58,717 58,397 51,654 58,118 56,812 53,689 49,114 64 Other liabilities and subordinated note and debentures.. 41,629 39,040 39,404 40,046 42,691 43,453 40,837 42,814 42,956 65 Total liabilities 228,152 228,396 223,944 229,491 224,612 237,209 225,406 226,883 223,567 66 Residual (total assets minus total liabilities)6 21,932 22,411 22,225 22,025 21,912 22,197 22,253 22,142 22,124 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 Nonfinancial Statistics • August 1984 t.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1984 AAccccoouunntt May 30 June 6 June 13 June 20 June 27' July 4 July 11 July 18 July 25 BANKS WITH ASSETS OF $1.4 BILLION OR MORE 1 Total loans and leases (gross) and investments adjusted1 735,216' 734,04C 731,616' 733,582' 735,059 741,390 737,287 735,232 737,836 2 Total loans and leases (gross) adjusted1 607,762' 608,165' 607,577' 611,819' 613,040 619,177 614,280 614,081 616,088 3 Time deposits in amounts of $100,000 or more 152,853 153,412 154,512 154,256 156,846 155,835 156,229 156,196 157,291 4 Loans sold outright to affiliates—total2 2,518 2,557 2,618 2,675 2,741 2,753 2,794 2,918 2,895 5 Commercial and industrial 1,914 1,952 1,929 1,940 1,960 1,957 1,986 2,103 2,083 6 Other 603 605 689 735 781 796 809 816 811 7 Nontransaction savings deposits (including MMDAs)... 155,357 155,819 155,195 154,360' 154,138 155,181 154,488 154,056 153,056 BANKS IN NEW YORK CITV 8 Total loans and leases (gross) and investments adjusted1'3 .. 159,352 157,843 156,804 157,889 157,378 159,427 156,632 156,286 157,797 9 Total loans and leases (gross) adjusted1 139,510 138,365 137,503 138,806 138,452 140,956 138,108 137,691 139,229 10 Time deposits in amounts of $100,000 or more 32,668 33,266 33,894 34,118 34,712 34,845 34,625 34,675 35,288 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 $750 MILLION OR MORE ON JUNE 30, 1980 Assets and Liabilities Millions of dollars, Wednesday figures 1984 AAccccoouunntt May 30 June 6 June 13 June 20 June 27' July 4 July 11 July 18 July 25 1 Cash and due from depository institutions. 6,489 7,351' 6,764 7,394 6,858 7,229 6,720 6,631 6,840 2 Total loans and securities 47,286 46,507 45,894 46,374 46,985 47,594 46,108 46,843 44,714 3 U.S. Treasury and govt, agency securities1 4,395 4,610 4,556 4,466 4,339 4,296 4,295 4,385 4,334 4 Other securities1 789 780 784 802 798 822 839 964 984 f5 Federal funds sold2 4,748 3,360 3,488 3,382 4,328 4,981 3,555 4,665 2,792 To commercial banks in the United States 4,467 3,128 3,335 3,250 4,273' 4,786 3,427 4,480 2,736 7 To others 281 232 153 132 55' 195 128 185 56 8 Other loans, gross 37,354 37,756 37,066 37,724 37,520 37,495 37,419 36,828 36,603 9 Commercial and industrial 20,153 20,513 20,034 20,320 20,321 20,734 20,948 20,867 20,383 10 Bankers acceptances and commercial paper 3,215 3,162 3,261 3,234 3,312 3,388 3,475 3,410 3,333 11 All other 16,938 17,350 16,773 17,086 17,008 17,346 17,472 17,457 17,050 12 U.S. addressees 15,295 15,694 15,151 15,423 15,320 15,457 15,647 15,548 15,187 13 Non-U.S. addressees 1,643 1,656 1,622 1,663 1,689 1,889 1,826 1,909 1,862 14 To financial institutions 13,601 13,742 13,455 14,039 13,989 13,367 13,060 12,775 12,919 15 Commercial banks in the United States . 11,400 11,640 11,353 11,966 11,714 11,178 10,914 10,627 10,790 16 Banks in foreign countries 1,456 1,470 1,399 1,348 1,450 1,431 1,542 1,505 1,505 17 Nonbank financial institutions 745 632 703 726 825 758 604 643 624 18 To foreign govts, and official institutions3 . 812 803 789 760 760 794 789 792 827 19 For purchasing and carrying securities .. 951 828 839 664 643 643 710 479 631 20 All other3 1,838 1,869 1,949 1,940 1,807 1,956 1,912 1,915 1,843 21 Other assets (claims on nonrelated parties) 15,267 15,691 15,910' 15,953 15,376 15,520 15,730 16,095 16,260 22 Net due from related institutions 9,764 11,428 11,804' 11,767 11,498 11,316 11,796 11,579 11,898 23 Total assets 78,806 80,978' 80,372 81,488 80,717 81,659 80,354 81,147 79,712 24 Deposits or credit balances due to other than directly related institutions 21,776' 21,766 21,898' 21,884' 22,362' 22,474 22,175 22,204 22,300 25 Credit balances 169 143 127 112 132 207 115 170 203 26 Demand deposits 1,794' 1,797 1,572 1,901 1,697' 1,728 1,696 1,737 1,759 27 Individuals, partnerships, and corporations 883' 791 802 806 799 926 839 810 792 28 Other 912 1,006 769 1,095 898' 802 857 926 966 29 Time and savings deposits 19,813' 19,836' 20,200' 19,871' 20,532' 20,540 20,363 20,297 20,338 30 Individuals, partnerships, and corporations 16,625 16,494 16,895' 16,473' 17,084' 17,052 16,917 16,957 16,966 31 Other 3,188' 3,343' 3,304 3,398' 3,448' 3,488 3,447 3,340 3,372 32 Borrowings from other than directly related institutions 32,22C 35,384' 34,089' 34,986' 33,903' 33,857 34,298 34,836 34,352 33 Federal funds purchased4 7,508 11,363 10,258 10,836 8,770 9,310 9,734 10,387 9,985 34 From commercial banks in the United States 4,718 8,757 7,811 8,066 5,976 6,629 7,101 7,398 6,951 35 From others 2,791 2,606 2,447 2,770 2,794 2,681 2,634 2,990 3,034 36 Other liabilities for borrowed money 24,712' 24,022' 23,83C 24,150' 25,132' 24,547 24,563 24,449 24,367 37 To commercial banks in the United States 21,280' 20,798' 20,375' 20,467' 21,06(y 20,445 20,480 20,302 20,228 38 To others 3,432 3,224 3,455' 3,683 4,072 4,102 4,083 4,147 4,139 39 Other liabilities to nonrelated parties 15,803 16,265 16,418 16,477 15,872 16,206 16,394 16,564 16,799 40 Net due to related institutions 9,006 7,552' 7,967 8,140 8,581 9,121 7,487 7,543 6,260 41 Total liabilities 78,806 80,978' 80,372 81,488 80,71'' 81,659 80,354 81,147 79,712 MEMO 42 Total loans (gross) and securities adjusted5 31,419 31,738 31,207 31,158 30,998' 31,630 31,767 31,736 31,188 43 Total loans (gross) adjusted5 26,236 26,348 25,867 25,890 25,862' 26,512 26,633 26,386 25,870 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 290.0 302.3 315.5 288.9 291.7 272.0 281.9 280.3 293.5 279.3 2 Financial business 27.0 27.1 29.8 28.0 35.4 32.7 34.6 32.1 32.8 31.7 3 Nonfinancial business 146.9 157.7 162.8 154.8 150.5 139.9 146.9 150.2 161.3 150.3 4 Consumer 98.2 99.2 102.4 86.6 85.9 79.4 80.3 77.9 78.5 78.1 5 Foreign 2.8 3.1 3.3 2.9 3.0 3.1 3.0 2.9 3.3 3.3 6 Other 15.1 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 1199779933 11998800 11998811 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Dec. Mar. June Sept. Dec.4 Mar. 7 AH holders—Individuals, partnerships, and corporations 127.6 139.3 147.4 137.5 144.2 133.0 139.6 136.3 146.2 139.2 8 Financial business 18.2 20.1 21.8 21.0 26.7 24.3 26.1 23.6 24.2 23.5 9 Nonfinancial business 67.2 74.1 78.3 75.2 74.3 68.9 72.8 72.9 79.8 76.4 10 Consumer 32.8 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 6.8 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. Beginning in March 1979, demand 2. Beginning with the March 1979 survey, the demand deposit ownership deposit ownership estimates for these large banks are constructed quarterly on the survey sample was reduced to 232 banks from 349 banks, and the estimation basis of 97 sample banks and are not comparable with earlier data. The following procedure was modified slightly. To aid in comparing estimates based on the old estimates in billions of dollars for December 1978 have been constructed for the and new reporting sample, the following estimates in billions of dollars for new large-bank panel; financial business, 18.2; nonfinancial business, 67.2; December 1978 have been constructed using the new smaller sample; financial consumer, 32.8; foreign, 2.5; other, 6.8. business, 27.0; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and 4. In January 1984 the weekly reporting panel was revised; it now includes 168 other, 15.1. banks. Beginning with March 1984, estimates are constructed on the basis of 92 sample banks and are not comparable with earlier data. Estimates in billions of dollars for December 1983 based on the newly weekly reporting panel are: financial business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other, 9.5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • August 1984 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 19843 IInnssttrruummeenntt 11 DD 99 ee 77 cc 99 .. '' DD 1199 ee 88 cc 00 .. DD 1199 ee 88 cc 11 .. DD 11 ee 99 cc 88 .. 22 22 DD 1199 ee 88 cc 33 .. Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 112,803 124,374 165,829 166,670 185,852 184,480 191,004 200,517 209,565 213,582 218,583 FFiinnaanncciiaall ccoommppaanniieess44 DDeeaalleerr--ppllaacceedd ppaappeerr55 22 TToottaall 17,359 19,599 30,333 34,634 41,688 42,7% 44,749 46,573 49,864 51,926 52,356 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 2,784 3,561 6,045 2,516 2,441 2,087 1,765 1,767 1,865 1,696 1,943 DDiirreeccttllyy ppllaacceedd ppaappeerr66 44 TToottaall 64,757 67,854 81,660 84,130 96,548 98,495 102,606 107,421 109,376 110,791 109,413 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 17,598 22,382 26,914 32,034 35,566 37,636 36,958 39,617 41,881 46,338 43,960 66 NNoonnffiinnaanncciiaall ccoommppaanniieess77 30,687 36,921 53,836 47,906 47,616 43,189 43,649 46,523 50,325 50,865 56,814 Bankers dollar acceptances (not seasonally adjusted) 7 Total 45,321 54,744 69,226 79,543 78,309 73,450 74,367 73,221 78,457 79,530 82,067 Holder 8 Accepting banks 9,865 10,564 10,857 10,910 9,355 9,546 9,237 8,734 11,160 9,927 10,877 9 Own bills 8,327 8,963 9,743 9,471 8,125 7,814 7,897 7,040 9,029 8,422 9,354 10 Bills bought 1,538 1,601 1,115 1,439 1,230 1,732 1,340 1,694 22,,113311 1,504 11,,552233 Federal Reserve Banks 11 Own account 704 776 195 1,480 418 0 0 0 0 0 0 12 Foreign correspondents 1,382 1,791 1,442 949 729 729 777 896 834 679 697 13 Others 33,370 41,614 56,731 66,204 68,225 63,174 64,353 63,592 66,468 68,925 70,493 Basis 14 Imports into United States 10,270 11,776 14,765 17,683 15,649 15,028 15,495 15,107 16,579 16,687 17,301 15 Exports from United States 9,640 12,712 15,400 16,328 16,880 16,159 15,818 15,572 16,283 15,938 16,421 16 All other 25,411 30,257 39,060 45,531 45,781 42,262 43,055 42,542 45,545 46,906 48,345 1. A change in reporting instructions results in offsetting shifts in the dealer- 4. Institutions engaged primarily in activities such as, but not limited to, placed and directly placed financial company paper in October 1979. commercial, savings, and mortgage banking; sales, personal, and mortgage 2. Effective Dec. 1, 1982, there was a break in the commercial paper series. The financing; factoring, finance leasing, and other business lending; insurance key changes in the content of the data involved additions to the reporting panel, underwriting; and other investment activities. the exclusion of broker or dealer placed borrowings under any master note 5. Includes all financial company paper sold by dealers in the open market. agreements from the reported data, and the reclassification of a large portion of 6. As reported by financial companies that place their paper directly with bank-related paper from dealer-placed to directly placed. investors. 3. Correction of a previous misclassification of paper by a reporter has created 7. Includes public utilities and firms engaged primarily in such activities as a break in the series beginning January 1984. The correction shifts some paper communications, construction, manufacturing, mining, wholesale and retail trade, from nonfinancial companies to dealer-placed financial paper. transportation, and services. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Rate Effective Date Rate Month Average Month rate 16.00 1982—Oct. 7 13.00 1982—Jan 15.75 1983—Apr.. 15.75 14 12.00 Feb 16.56 May. Nov. 22 11.50 Mar 16.50 June, 16.50 July , 16.50 11.00 May 16.50 Aug. 17.00 1983—Jan. 11 16.50 Sept. 1 1 6 6 . . 5 0 0 0 F A e u b g . . 28 8 1101..0500 J A u u ly g 1 1 6 4 . . 2 3 6 9 O No ct v . . , 15.50 Sept 13.50 Dec. 15.00 1984—Mar. 19 11.50 Oct 12.52 14.50 Apr. 5 12.00 Nov 11.85 1984—Jan. 14.00 May 8 12.50 Dec 11.50 Feb. 13.50 June 25 13.00 Mar. 1983—Jan 11.16 Apr. Feb 10.98 May Mar 10.50 June July 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, May 7-11, 1984 Size of loan (in thousands of dollars) All Item sizes 1-24 25-49 50-99 100-499 500-999 and over SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 38,733,851 1,071,948 786,804 947,786 2,643,636 987,715 32,295,962 2 Number of loans 194,776 135,176 23,944 14,370 15,327 1,503 4,456 3 Weighted-average maturity (months) 1.4 4.5 4.6 5.0 5.4 3.5 ..88 4 With fixed rates 1.0 3.8 4.0 3.0 4.1 2.1 ..77 5 With floating rates 2.1 6.0 5.4 7.0 6.3 4.6 1.1 6 Weighted-average interest rate (percent per annum) .. 12.45 14.93 14.46 14.41 13.86 13.37 12.12 7 Interquartile range1 11.82-12.75 13.95-15.87 13.70-15.39 13.80-14.94 13.24-14.37 12.68-13.88 11.75-12.36 8 With fixed rates 12.23 14.89 14.16 14.28 13.76 12.86 11.99 9 With floating rates 12.80 14.99 14.80 14.50 13.90 13.61 12.36 Percentage of amount of loans 10 With floating rate 39.2 3344..77 4466..22 5577..88 6677..44 6688..88 3355..44 11 Made under commitment 69.7 32.3 40.1 51.7 54.8 70.6 73.4 12 With no stated maturity 9.9 9.1 10.2 18.6 24.7 35.4 7.7 13 With one-day maturity 39.0 .1 .1 .1 .3 3.4 46.7 1-99 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 14 Amount of loans (thousands of dollars) 4,129,515 683,061 348,909 198,394 2,899,152 15 Number of loans 35,908 33,322 1,689 296 600 16 Weighted-average maturity (months) 47.9 42.8 46.1 45.2 49.4 17 With fixed rates 44.3 38.2 57.2 54.6 44.6 18 With floating rates 50.2 46.2 42.5 43.7 53.1 19 Weighted-average interest rate (percent per annum) .. 13.12 15.00 13.91 13.50 12.56 20 Interquartile range1 12.00-13.92 14.37-15.87 13.10-14.45 12.68-14.09 11.75-13.24 21 With fixed rates 12.58 14.98 14.03 12.75 11.94 22 With floating rates 13.49 15.02 13.87 13.62 13.04 Percentage of amount of loans 23 With floating rate 59.9 5588..44 7755..77 8866..77 5566..55 24 Made under commitment 75.4 37.0 57.1 74.5 86.7 1-24 25-49 50-99 500 and over CONSTRUCTION AND LAND DEVELOPMENT LOANS 25 Amount of loans (thousands of dollars) 2,567,543 211,528 118,448 163,406 890,297 1, 183,865 26 Number of loans 32,938 22,087 3,012 2,292 4,563 984 27 Weighted-average maturity (months) 8.2 10.4 9.3 7.7 5.9 191..70 28 With fixed rates 7.9 12.7 9.3 6.1 4.2 29 With floating rates 8.5 5.8 9.1 11.8 8.5 8.6 30 Weighted-average interest rate (percent per annum) .. 13.76 15.04 14.78 14.71 13.92 13.19 31 Interquartile range1 13.22-14.50 14.37-15.79 14.75-15.03 14.37-15.57 13.24-14.50 12.02-14.09 3? With fixed rates 13.53 15.05 14.87 14.80 14.00 12.28 33 With floating rates 14.07 15.03 14.33 14.51 13.80 14.06 Percentage of amount of loans 34 With floating rate 43.2 3355..33 1177..11 3311..77 4400..88 5500..77 35 Secured by real estate 72.6 95.4 98.3 97.8 78.7 57.8 36 Made under commitment 43.8 50.0 18.0 25.1 37.9 52.2 37 With no stated maturity 9.5 3.7 33.6 5.8 3.4 13.1 38 With one-day maturity .0 .0 .1 .6 .0 .0 Type of construction 39 1- to 4-family 28.8 53.5 91.1 79.3 34.0 7.2 40 Multifamily 3.6 3.0 2.2 5.9 2.8 4.1 41 Nonresidential 67.6 43.5 6.8 14.8 63.1 88.6 AAllll ssiizzeess 1-9 1100--2244 25-49 50-99 100-249 250 and over LLOOAANNSS TTOO FFAARRMMEERRSS 42. Amount of loans (thousands of dollars) 1,502,201 199,153 176,270 195,641 173,959 339,127 418,052 43 Number of loans 77,344 53,658 11,974 6,105 2,720 2,312 574 44 Weighted-average maturity (months) 8.3 6.6 7.1 8.0 8.4 11.3 7.5 45 Weighted-average interest rate (percent per annum).. 14.25 14.64 14.35 14.41 14.24 14.51 13.75 46 Interquartile range1 13.55-14.95 13.96-15.02 13.67-15.02 13.80-14.95 13.59-15.03 14.09-15.02 12.55-14.49 By purpose of loan 4 4 7 8 O Fe th ed er e r l i l v i e v s e t s o t c o k c k 1 1 4 3 . . 5 8 1 6 1 11 3 44 . .. 9 77 7 99 11 1 44 4 .. . 00 5 77 9 11 1 44 4 .. . 33 6 44 3 1144 ( ..66233 ) 1144 ( ..88244 ) 1 11 3 33 . .. 3 77 3 44 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 t in e g q u e i x p p m e e n n s t e s 1 1 5 4 . . 0 2 4 9 1 1 5 4 . . 8 5 8 6 1 14 4 . . 4 5 1 5 1 1 4 4 . . 6 5 8 4 14 ( .221 ) 14 ( .424 ) 13 ( .829 ) 51 Other 13.93 14.59 14.02 13.91 14.10 14.14 13.63 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 Nonfinancial Statistics • August 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 Apr. May June July July 6 July 13 July 20 July 27 Aug. 3 MONEY MARKET RATES 1 Federal funds1-2 16.38 12.26 9.09 10.29 10.32 11.06 11.23 10.91 11.25 11.21 11.19 11.53 2 Discount window borrowing1-2 3 13.42 11.02 8.50 8.87 9.00 9.00 9.00 9.00 9.00 9.00 9.00 99..0000 Commercial paper4-5 3 1-month 15.69 11.83 8.87 10.17 10.38 10.82 11.06 11.11 11.13 11.03 10.98 11.02 4 3-month 15.32 11.89 8.88 10.18 10.65 10.98 11.19 11.28 11.26 11.18 11.11 11.12 5 6-month 14.76 11.89 8.89 10.22 10.87 11.23 11.34 11.42 11.41 11.34 11.26 11.19 Finance paper, directly placed4-5 6 1-month 15.30 11.64 8.80 10.08 10.26 10.76 10.99 11.14 11.11 10.96 10.90 10.83 7 3-month 14.08 11.23 8.70 9.86 10.16 10.38 10.54 10.52 10.56 10.51 10.55 10.58 8 6-month 13.73 11.20 8.69 9.76 10.03 10.25 10.42 10.41 10.47 10.40 10.40 1100..4455 Bankers acceptances5-6 9 3-month 15.32 11.89 8.90 10.22 10.84 11.04 11.30 11.40 11.36 11.31 11.22 11.14 10 6-month 14.66 11.83 8.91 10.26 11.06 11.30 11.44 11.55 11.52 11.48 11.34 11.17 Certificates of deposit, secondary market7 11 1-month 15.91 12.04 8.96 10.24 10.62 11.02 11.28 11.41 11.32 11.25 11.19 11.21 12 3-month 15.91 12.27 9.07 10.41 11.11 11.34 11.56 11.75 11.60 11.54 11.47 11.39 13 6-month 15.77 12.57 9.27 10.73 11.64 11.96 12.08 12.20 12.18 12.10 11.98 11.77 14 Eurodollar deposits, 3-month8 16.79 13.12 9.56 10.83 11.53 11.68 12.02 12.25 12.08 12.00 11.86 11.73 U.S. Treasury bills5 Secondary market9 15 3-month 14.03 10.61 8.61 9.69 9.83 9.87 10.12 9.92 10.04 10.11 10.25 10.42 16 6-month 13.80 11.07 8.73 9.84 10.31 10.51 10.53 10.43 10.50 10.55 10.56 10.63 17 1-year 13.14 11.07 8.80 9.95 10.57 10.93 10.89 11.01 10.94 10.89 10.79 10.73 Auction average10 18 3-month 14.029 10.686 8.63 9.69 9.90 9.94 10.13 10.01 10.04 10.17 10.30 10.40 19 6-month 13.776 11.084 8.75 9.83 10.31 10.55 10.58 10.54 10.52 10.60 10.64 10.64 ?() 1133..115599 1111..009999 8.86 99..8866 1100..6644 1100..9922 1100..9999 1100..9999 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 14.78 12.27 9.57 10.90 11.66 12.08 12.03 12.17 12.10 12.03 11.90 11.84 2n2 2-year 14.56 12.80 10.21 11.69 12.47 12.91 12.88 13.12 12.97 12.88 12.70 12.50 13 05 12 75 24 3-year 14.44 12.92 10.45 11.98 12.75 13.18 13.08 13.38 13.19 13.06 12.86 12.63 25 5-year 14.24 13.01 10.80 12.37 13.17 13.48 13.28 13.67 13.39 13.23 13.03 12.77 26 7-year 14.06 13.06 11.02 12.56 13.34 13.56 13.35 13.77 13.46 13.31 13.10 12.83 27 10-year 13.91 13.00 11.10 12.63 13.41 13.56 13.36 13.80 13.46 13.32 13.11 12.82 28 20-year 13.72 12.92 11.34 12.65 13.43 13.54 13.36 13.76 13.43 13.31 13.15 12.87 29 30-year 13.44 12.76 11.18 12.65 13.43 13.44 13.21 13.57 13.24 13.16 13.06 12.79 Composite14 30 Over 10 years (long-term) 12.87 12.23 10.84 12.17 12.89 13.00 12.82 13.21 12.89 12.79 12.62 12.36 State and local notes and bonds Moody's series15 31 Aaa 10.43 10.88 8.80 9.54 9.98 10.05 10.10 10.25 10.15 10.10 9.90 9.75 32 Baa 11.76 12.48 10.17 10.30 10.55 10.68 10.61 10.70 10.60 10.65 10.50 10.45 33 Bond Buyer series16 11.33 11.66 9.51 9.96 10.49 10.67 10.42 10.69 10.44 10.36 10.19 9.92 Corporate bonds Seasoned issues17 34 All industries 15.06 14.94 12.78 13.59 14.13 14.40 14.32 14.54 14.40 14.31 14.18 13.96 35 Aaa 14.17 13.79 12.04 12.81 13.28 13.55 13.44 13.69 13.53 13.36 13.32 13.05 36 Aa 14.75 14.41 12.42 13.48 14.10 14.33 14.12 14.38 14.20 14.15 13.92 13.66 37 A 15.29 15.43 13.10 13.77 14.37 14.66 14.57 14.80 14.69 14.54 14.40 14.25 38 Baa 16.04 16.11 13.55 14.31 14.74 15.05 15.15 15.29 15.16 15.18 15.09 14.89 39 A-rated, recently-offered utility bonds18 16.63 15.49 12.73 13.96 14.79 15.00 14.93 15.30 14.88 14.85 14.54 14.10 MEMO: Dividend/price ratio19 40 Preferred stocks 12.36 12.53 11.02 11.66 11.72 12.04 12.13 12.12 12.17 12.09 12.13 12.08 41 Common stocks 5.20 5.81 4.40 4.64 4.72 4.86 4.93 4.86 4.97 4.91 4.99 4.84 1. Weekly and monthly figures are averages of all calendar days, where the places. Thus, average issuing rates in bill auctions will be reported using two rate for a weekend or holiday is taken to be the rate prevailing on the preceding rather than three decimal places. business day. The daily rate is the average of the rates on a given day weighted by 11. Yields are based on closing bid prices quoted by at least five dealers. the volume of transactions at these rates. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 2. Weekly figures are averages for statement week ending Wednesday. are read from a yield curve at fixed maturities. Based on only recently issued, 3. Rate for the Federal Reserve Bank of New York. actively graded securities. 4. Unweighted average of offering rates quoted by at least five dealers (in the 13. Each biweekly figure is the average of five business days ending on the case of commercial paper), or finance companies (in the case of finance paper). Monday following the date indicated. Until Mar. 31, 1983, the biweekly rate Before November 1979, maturities for data shown are 30-59 days, 90-119 days, determined the maximum interest rate payable in the following two-week period and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150- on 2-'/2-year small saver certificates. (See table 1.16.) 179 days for finance paper. 14. Averages (to maturity or call) for all outstanding bonds neither due nor 5. Yields are quoted on a bank-discount basis, rather than an investment yield callable in less than 10 years, including several very low yielding "flower" bonds. basis (which would give a higher figure). 15. General obligations based on Thursday figures; Moody's Investors Service. 6. Dealer closing offered rates for top-rated banks. Most representative rate 16. General obligations only, with 20 years to maturity, issued by 20 state and (which may be, but need not be, the average of the rates quoted by the dealers). local governmental units of mixed quality. Based on figures for Thursday. 7. Unweighted average of offered rates quoted by at least five dealers early in 17. Daily figures from Moody's Investors Service. Based on yields to maturity the day. on selected long-term bonds. 8. Calendar week average. For indication purposes only. 18. Compilation of the Federal Reserve. This series is an estimate of the yield 9. Unweighted average of closing bid rates quoted by at least five dealers. on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 10. Rates are recorded in the week in which bills are issued. Beginning with the call protection. Weekly data are based on Friday quotations. 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 transportation. Common stock ratios on the 500 stocks in the price index. 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 Nov. Dec. Jan. Feb. Mar. Apr. May June July 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 95.36 94.92 96.16 90.60 90.66 90.67 90.07 88.28 87.08 2 Industrial 85.44 78.18 107.45 110.77 110.60 112.16 105.44 105.92 106.56 105.94 104.04 102.29 3 Transportation 72.61 60.41 89.36 97.68 98.79 97.98 86.33 86.10 83.61 81.62 79.29 76.72 4 Utility 38.90 39.75 47.00 48.50 47.00 47.43 45.67 44.83 43.86 44.22 43.65 44.17 5 Finance 73.52 71.99 95.34 94.48 94.25 95.79 89.95 89.50 88.22 85.06 80.75 79.03 6 Standard & Poor's Corporation (1941-43 = 10)' ... 128.05 119.71 160.41 165.23 164.36 166.39 157.70 157.44 157.60 156.55 153.12 151.08 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 171.79 141.31 216.48 218.42 221.31 224.83 207.95 210.09 207.66 206.39 201.24 192.82 Volume of trading (thousands of shares) 8 New York Stock Exchange 46,967 64,617 85,418 86,405 88,041 105,518 96,641 84,328 85,874 88,170 85,920 79,156 9 American Stock Exchange 5,346 5,283 8,215 6,160 6,939 7,167 6,431 5,382 5,863 5,935 5,071 5,141 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 14,411 13,325 23,000 22,075 23,000 23,132 22,557 22,668 22,830 22,360 23,450 | 11 Margin stock 14,150 12,980 22,720 21,790 22,720 22,870 22,330 22,460 12 Convertible bonds 259 344 279 285 279 261 226 208 n.a. n.a. n.a. n.a. 13 Subscription issues 2 1 1 1 1 I 1 * Free credit balances at brokers4 14 Margin-account 3,515 5,735 6,620 6,512 6,620 6,510 6,420 6,520 6,450 6,685 6,430 15 Cash-account 7,150 8,390 8,430 7,599 8,430 8,230 8,420 8,265 7,910 8,115 8,304 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)s 17 Under 40 " 37.0 21.0 41.0 48.0 41.0 43.0 48.0 46.0 47.0 53.0 50.0 18 40-49 24.0 24.0 22.0 22.0 22.0 21.0 20.0 20.0 20.0 18.0 19.0 19 50-59 17.0 24.0 16.0 17.0 16.0 15.0 13.0 14.0 13.0 12.0 12.0 n a. 2 2 0 1 6 7 0 0 - -7 6 9 9 1 6 0 . . 0 0 1 9 4 . . 0 0 9 6 . . 0 0 1 7 0 . . 0 0 9 6 . . 0 0 9 6 . . 0 0 8 6 . . 0 0 9 6 . . 0 0 6 8. . 0 0 5 7 . . 0 0 6 8 . . 0 0 11 22 80 or more 6.0 8.0 6.0 6.0 6.0 6.0 5.0 5.0 6.0 5.0 5.0 t Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 25,870 35,598 58,329 57,490 58,329 62,670 63,410 65,860' 66,340 70,110 69,410 f| Distribution by equity status (percent) 24 Net credit status 58.0 62.0 63.0 63.0 63.0 61.0 59.0 61.0 60.0 60.0 56.0 n.a. 25 De 6 b 0 t p s e ta r t c u en s, t e o q r u m ity o r o e f 31.0 29.0 28.0 29.0 28.0 29.0 29.0 28.0 29.0 27.0 30.0 11 26 Less than 60 percent 11.0 9.0 9.0 8.0 9.0 10.0 12.0 11.0 11.0 13.0 14.0 t Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks 70 80 65 55 65 50 28 Convertible bonds 50 60 50 50 50 50 29 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance 5. Each customer's equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of 2. 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. Beginning July 1983, under the revised Regulation T, margin credit at 7. Regulations G, T, and U of the Federal Reserve Board of Governors, broker-dealers includes credit extended against stocks, convertible bonds, stocks prescribed in accordance with the Securities Exchange Act of 1934, limit the acquired through exercise of subscription rights, corporate bonds, and govern- amount of credit to purchase and carry margin stocks that may be extended on ment securities. Separate reporting of data for margin stocks, convertible bonds, securities as collateral by prescribing a maximum loan value, which is a specified and subscription issues was discontinued in April 1984, and margin credit at percentage of the market value of the collateral at the time the credit is extended. broker-dealers became the total that is distributed by equity class and shown on Margin requirements are the difference between the market value (100 percent) lines 17-22. and the maximum loan value. The term "margin stocks" is defined in the 4. 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 • August 1984 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1983 1984 AAccccoouunntt 11998811 Aug. Sept. Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr. May JuneP Savings and loan associations 1 Assets 664,167 707,646 746,998 748,491 756,953 763,365 771,705 772,723 780,107 796,095 806,482 823,737 838,169 2 Mortgages 518,547 483,614 483,178 482,305 485,366 489,720 493,432 494,682 497,987 502,143 509,283 518,214 526,838 3 Cash and investment securities' 63,123 85,438 99,812 100,243 101,553 101,553 103,395 101,883 103,917 108,565 105,950 109,102 107,862 4 Other 82,497 138,594 164,008 165,943 170,034 172,259 174,878 176,158 178,203 185,387 191,249 196,421 203,469 5 Liabilities and net worth 664,167 707,646 746,998 748,491 756,953 763,365 771,705 772,723 780,107 796,095 806,482 823,737 838,169 6 Savings capital 525,061 567,961 615,369 618,002 622,577 625,013 634,076 639,694 644,588 656,252 660,262 670,259 681,492 7 Borrowed money 88,782 97,850 84,267 85,976 87,367 89,235 91,443 86,322 86,526 93,321 97,468 102,281 107,032 8 FHLBB 62,794 63,861 52,182 52,179 52,678 51,735 52,626 50,880 50,465 50,663 51,951 53,485 56,501 9 Other 25,988 33,989 32,085 33,797 34,689 37,500 38,817 35,442 36,061 42,658 45,517 48,796 50,531 6,385 9,934 17,967 18,812 19,209 19,728 21,117 21,498 21,939 22,929 23,898 24,717 25,701 11 Other 15,544 15,602 18,615 15,4% 17,458 19,179 15,275 15,777 17,520 14,938 16,904 19,207 16,827 12 Net worth3 28,395 26,233 28,626 29,017 29,551 29,938 30,911 30,930 31,473 31,584 31,848 31,990 32,818 13 MEMO: Mortgage loan commitments outstanding4 15,225 18,054 32,415 32,483 32,798 34,780 32,996 33,504 36,150 39,813 41,672 45,207 44,395 Mutual savings banks5 14 Assets 175,728 174,197 183,612 186,041 187,385 189,149 193,535 194,217 195,168 197,178 198,000 200,087 Loans 15 Mortgage 99,997 94,091 93,941 94,831 94,863 95,600 97,356 97,703 97,895 98,472 99,017 99,881 16 Other 14,753 16,957 17,929 17,830 19,589 19,675 19,129 20,463 21,694 21,97) 22,531 22,907 Securities 17 U.S. government6 9,810 9,743 14,484 14,794 14,634 15,092 15,360 15,167 15,667 15,772 15,913 16,404 18 State and local government 2,288 2,470 2,247 2,244 2,195 2,195 2,177 2,180 2,054 2,067 2,033 2,024 19 Corporate and other7 37,791 36,161 41,045 41,889 42,092 42,629 43,580 43,542 43,439 43,547 43,122 43,200 20 Cash 5,442 6,919 5,168 5,560 4,993 4,983 6,263 4,788 4,580 5,040 5,008 5,031 21 Other assets 5,649 7,855 8,799 8,893 9,019 8,975 9,670 10,374 9,839 10,309 10,376 10,640 22 Liabilities 175,728 174,197 183,612 186,041 187,385 189,149 193,535 194,217 195,168 197,178 198,000 200,087 n .a. 155,110 155,1% 165,087 165,887 168,064 169,356 172,665 173,636 174,370 176,044 175,875 176,253 153,003 152,777 162,600 162,998 165,575 167,006 170,135 171,099 171,957 173,385 173,010 173,310 25 Ordinary savings 49,425 46,862 39,360 39,768 38,485 38,448 38,554 37,992 37,642 37,866 37,329 37,147 103,578 %,369 86,446 85,603 91,795 93,073 95,129 96,519 %,005 97,339 %,920 97,236 27 Other 2,108 2,419 2,487 2,889 2,489 2,350 2,530 2,537 2,413 2,659 2,865 2,943 28 Other liabilities 10,632 8,336 7,884 9,475 8,779 9,185 10,154 9,917 10,019 10,390 11,211 12,861 29 General reserve accounts 9,986 9,235 9,932 9,879 10,015 10,210 10,368 10,350 10,492 10,373 10,466 10,554 30 MEMO: Mortgage loan commitments outstanding9 1,293 1,285 2,046 2,023 2,210 2,418 2,387 n.a. n.a. n.a. n.a. n.a. Life insurance companies 31 Assets 525,803 588,163 638,826 644,295 647,149 652,904 658,979 663,013 664,677 668,833 673,410 Securities 25,209 36,499 45,700 46,109 47,767 47,170 49,417 49,690 49,711 50,505 50,697 33 United States10 8,167 16,529 22,817 23,134 24,380 24,232 26,364 26,659 27,285 28,267 28,484 34 State and local 7,151 8,664 10,695 10,739 10,791 10,686 10,796 10,673 10,048 9,822 9,727 9,891 11,306 12,188 12,236 12,596 12,252 12,257 12,358 12,378 12,416 12,486 255,769 287,126 318,584 321,568 320,964 325,787 325,015 329,697 330,303 332,342 334,965 n.a. n.a. 37 Bonds 208,099 231,406 253,977 256,131 256,332 260,432 259,591 264,430 266,234 268,173 270,551 38 Stocks 47,670 55,720 64,607 65,437 64,632 65,355 65,424 65,267 64,069 64,169 64,414 137,747 141,989 146,400 147,356 148,256 148,947 151,599 151,878 151,630 151,968 152,880 18,278 20,264 21,749 21,903 22,141 22,278 22,683 22,700 23,032 23,420 23,606 41 Policy loans 48,706 52,961 54,063 54,165 54,255 54,362 54,518 54,559 54,631 54,698 54,801 42 Other assets 40,094 48,571 52,330 53,194 53,765 54,360 55,747 54,474 55,370 55,900 56,461 Credit unions'2 43 Total assets/liabilities and capital 60,611 69,585 79,241 80,189 80,419 81,094 81,961 82,287 83,779 86,498 87,204 89,378 90,021 39,181 45,493 52,261 53,086 53,297 53,801 54,482 54,770 55,753 57,569 58,127 59,636 59,748 45 State 21,430 24,092 26,980 27,103 27,122 27,293 27,479 27,517 28,026 28,929 29,077 29,742 30,273 46 Loans outstanding 42,333 43,232 46,940 47,829 48,454 49,240 50,083 50,477 51,386 52,353 53,355 54,813 56,272 27,096 27,948 30,582 31,212 31,691 32,304 32,930 33,270 33,878 34,510 35,286 36,274 36,872 48 State 15,237 15,284 16,358 16,617 16,763 16,936 17,153 17,207 17,508 17,843 18,069 18,539 19,400 54,152 62,990 72,214 73,280 73,661 74,051 74,739 75,373 76,423 79,150 80,032 81,571 82,319 50 Federal (shares) 35,250 41,352 47,847 48,709 49,044 49,400 49,889 50,438 51,218 52,905 53,587 54,632 54,780 51 State (shares and deposits) 18,902 21,638 24,367 24,571 24,617 24,651 24,850 24,935 25,205 26,245 26,445 26,939 27,539 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A27 1.37 Continued 1983 1984 AAccccoouunntt 11998811 11998822 Aug. Sept. Oct. Nov. Dec. Jan.r Feb/ Mar/ Apr. May June? FSLIC-insured federal savings banks 52 Assets 6,859 46,191 57,4% 59,422 61,717 64,%9 69,835 72,143 75,555 77,374 78,952 81,301 53 Mortgages 3,353 28,086 34,814 35,637 37,166 38,698 41,754 43,371 44,708 45,900 46,791 48,175 54 Cash and investment securities1 7,514 9,245 9,587 9,653 10,436 11,243 11,662 12,552 12,762 12.814 13,079 55 Other 10,591 13,437 14,198 14,898 15,835 16,838 17,110 18,295 18,712 19,347 20,047 56 Liabilities and net worth 6,859 46,191 57,4% 59,422 61,717 64,%9 69,835 72,143 75,555 77,374 78,952 81,301 57 Savings and capital 5,877 37,284 47,058 48,544 50,384 53,227 57,195 59,107 61,433 62,495 63,026 64,341 58 Borrowed money 5,445 6,598 6,775 6,981 7,477 8,048 8,088 9,213 9,707 10,475 11,487 59 FHLBB 3,572 4,192 4,323 4,381 4,640 4,751 4,884 5,232 5,491 5,900 6,551 60 Other 1,873 2,406 2,452 2,600 2,837 3,297 3,204 3,981 4,216 4,575 4,936 61 Other 1,142 1,089 1,293 1,428 1,157 1,347 1,545 1,360 1,548 1,747 1,662 62 Net worth3 2,320 2,751 2,810 2,924 3,108 3,245 3,403 3,549 3,624 3,704 3,811 MEMO 63 Loans in process2 98 934 1,120 1,181 1,222 1,264 1,387 1,531 1,669 1,716 1,787 1,861 64 Mortgage loan committments outstanding4 1,774 2,130 2,064 2,230 2,151 2,974 2,704 3,253 3,714 3,763 3,566 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 FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 1982 1983 1984 11998811 11998822 11998833 HI H2 HI Apr. May June U.S. budget 1 Receipts1 599,272 617,766 600,562 322,478 286,338 306,331 80,180 37,459 69.282 2 Outlays1 657,204 728,375 795,917 348,678 390,846 396,477 68,687 71,391 71.283 3 Surplus, or deficit (-) -57,932 -110,609 -195,355 -26,200 -104,508 -90,146 11,493 -33,932 -2,001 4 Trust funds 6,817 5,456 23,056 -17,690 -6,576 22,680 5,033 3,849 10,425 5 Federal funds2-3 -64,749 -116,065 -218,410 -43,889 -97,934 -112,822 6,459 -37,781 -12,425 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays -20,769 -14,142 -10,404 -7,942 -4,923 -5,418 -920 1,171 -1,504 7 Other3'4 -236 -3,190 -1,953 227 -2,267 -528 262 -181 -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 10,833 -35,284 -3,801 Source of financing 9 Borrowing from the public 79,329 134,993 212,425 41,728 119,609 102,538 17,038 8,604 5,524 10 Cash and monetary assets (decrease, or increase (-))4 -1,878 -11,911 -9,889 -408 -9,057 -9,664 -24,772 31,023 -6,388 11 Other5 1,485 4,858 5,176 -7,405 1,146 3,222 -3,099 -4,344 4,666 MEMO 12 Treasury operating balance (level, end of period) 18,670 29,164 37,057 10,999 19,773 100,243 38,204 8,182 13,567 13 Federal Reserve Banks 3,520 10,975 16,557 4,099 5,033 19,442 16,729 4,855 4,397 14 Tax and loan accounts 15,150 18,189 20,500 6,900 14,740 72,037 21,474 3,327 9,170 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 Digitized fomro FneRtaAryS aEssRet s. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • August 1984 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1982 1983 1984 111999888111 111999888222 111999888333 HI H2 HI Apr. May June RECEIPTS 1 All sources 599,272 617,766 600,563 322,478 286,338 306,331 80,180 37,459 69,282 2 Individual income taxes, net 285,917 297,744 288,938 150,565 145,676 144,550 39,192 4,333 32,200 3 Withheld 256,332 267,513 266,010 133,575 131,567 135,531 22,321 2233,,551199 23,347 4 Presidential Election Campaign Fund ... 41 39 36 34 5 30 5 88 3 5 Nonwithheld 76,844 84,691 83,586 66,174 20,040 63,014 31,993 1,269 11,196 6 Refunds 47,299 54,498 60,692 49,217 5,938 54,024 1155,,112277 2200,,446633 22,,334466 Corporation income taxes 7 Gross receipts 73,733 65,991 61,780 37,836 25,661 33,522 11,786 2,295 11,929 8 Refunds 12,596 16,784 24,758 8,028 11,467 1133,,880099 22,,669911 22,,001155 614 9 Social insurance taxes and contributions, net 182,720 201,498 209,001 108,079 94,278 110,521 26,036 2266,,444411 1199,,775599 10 Payroll employment taxes and contributions' 156,932 172,744 179,010 88,795 85,063 90,912 1188,,553322 1177,,116688 1177,,881111 11 Self-employment taxes and contributions2 6,041 7,941 6,756 7,357 177 6,427 4,637 432 1,165 12 Unemployment insurance 15,763 16,600 18,799 9,809 6,857 11,146 2,501 8,457 373 13 Other net receipts3 3,984 4,212 4,436 2,119 2,181 2,196 366 384 410 14 Excise taxes 40,839 36,311 35,300 17,525 16,556 16,904 3,042 3,322 3,229 15 Customs deposits 8,083 8,854 8,655 4,310 4,299 4,010 937 990 1,060 16 Estate and gift taxes 6,787 7,991 6,053 4,208 3,445 2,883 505 550 466 17 Miscellaneous receipts4 13,790 16,161 15,594 7,984 7,891 7,751 1,374 1,543 1,253 OUTLAYS 18 All types 657,204 728,424 795,917 348,683 390,847 396,477 68,687 71,391 71,283 19 National defense 159,765 187,418 210,461 93,154 100,419 105,072 18,711 19,955 19,659 20 International affairs 11,130 9,982 8,927 5,183 4,406 4,705 973 999 857 21 General science, space, and technology ... 6,359 7,070 7,777 3,370 3,903 3,486 685 756 705 22 Energy 10,277 4,674 4,035 2,946 2,059 2,073 57 119 350 23 Natural resources and environment 13,525 12,934 12,676 5,636 6,940 5,892 923 951 975 24 Agriculture 5,572 14.875 22,173 7,087 13,260 10,154 1,364 687 191 25 Commerce and housing credit 3,946 3,865 4,721 1,408 2,244 2,164 -22 2,013 296 26 Transportation 23,381 20,560 21,231 9,915 10,686 9,918 1,716 1,798 2,077 27 Community and regional development .... 9,394 7,165 7,302 3,055 4,186 3,124 481 563 638 28 Education, training, employment, social services 31,402 26,300 25,726 12,607 12,187 12,801 2,210 2,260 2,022 29 Health 26,858 27,435 28,655 2,577 2,638 2,515 30 Social security and medicare 178,733 202,531 223,311 150,0015 l''2,852 184,207 19,405 19,555 21,718 31 Income security 85,514 92,084 106,211 8,677 8,498 6,380 32 Veterans benefits and services 22,988 23,955 24,845 112,782 13,241 11,334 891 2,204 3,151 33 Administration of justice 4,696 4,671 5,014 2,334 2,373 2,522 476 441 463 34 General government 4,614 4,726 4,991 2,400 2,322 2,434 265 558 471 35 General-purpose fiscal assistance 6,856 6,393 6,287 3,325 3,152 3,124 1,219 80 204 36 Net interest" 68,726 84,697 89,774 41,883 '14,948 42,358 9,211 10,235 9,606 37 Undistributed offsetting receipts7 -16,509 -13,270 -21,424 -6,490 -8,333 -8,885 -1,130 -2,918 -998 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 A29 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 1,415.3 1,468.3 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 1,174.4 1,223.9 4 Held by agencies 202.4 211.7 216.4 209.4 201.2 229.3 239.0 236.3 239.8 5 Agency securities 5.1 5.0 5.0 4.8 4.8 4.7 4.7 4.6 4.6 6 Held by public 3.9 3.9 3.7 3.7 3.7 3.6 3.6 3.5 3.5 7 Held by agencies 1.2 1.2 1.2 1.2 1.1 1.1 1.1 1.1 1.1 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 TTyyppee aanndd hhoollddeerr 11997799 11998800 11998811 11998822 Q3 Q4 Q1 Q2 1 Total gross public debt 845.1 930.2 1,028.7 1,197.1 1,377.2 1,410.7 1,463.7 1,512.7 By type 2 Interest-bearing debt 844.0 928.9 1,027.3 1,195.5 1,375.8 1,400.9 1,452.1 1,501.1 3 Marketable 530.7 623.2 720.3 881.5 1,024.0 1,050.9 1,097.7 1,126.6 4 Bills 172.6 216.1 245.0 311.8 340.7 343.8 350.2 343.3 5 Notes 283.4 321.6 375.3 465.0 557.5 573.4 604.9 632.1 6 Bonds 74.7 85.4 99.9 104.6 125.7 133.7 142.6 151.2 7 Nonmarketable1 313.2 305.7 307.0 314.0 351.8 350.0 354.4 374.5 8 State and local government series 24.6 23.8 23.0 25.7 35.1 36.7 38.1 39.9 9 Foreign issues2 28.8 24.0 19.0 14.7 11.5 10.4 9.9 8.8 10 Government 23.6 17.6 14.9 13.0 11.5 10.4 9.9 8.8 11 Public 5.3 6.4 4.1 1.7 .0 .0 .0 .0 12 Savings bonds and notes 79.9 72.5 68.1 68.0 70.3 70.7 71.6 72.3 13 Government account series3 177.5 185.1 196.7 205.4 234.7 231.9 234.6 253.2 14 Non-interest-bearing debt 1.2 1.3 1.4 1.6 1.5 9.8 11.6 11.6 By holder4 15 U.S. government agencies and trust funds 187.1 192.5 203.3 209.4 239.0 236.3 239.8 16 Federal Reserve Banks 117.5 121.3 131.0 139.3 155.4 151.9 150.8 17 Private investors 540.5 616.4 694.5 848.4 982.7 1,022.6 1,073.0 18 Commercial banks 96.4 116.0 109.4 131.4 176.3 188.8 189.8 19 Money market funds 4.7 5.4 5.2 n.a. 22.1 22.8 19.4 20 Insurance companies 16.7 20.1 19.1 38.7 47.3 48.9 n.a. n.a. 21 Other companies 22.9 25.7 37.8 n.a. 35.9 40.2 43.1 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 70.6 71.5 72.2 24 Other securities 36.2 56.7 75.6 48.2 58.4 61.9 64.1 25 Foreign and international5 124.4 127.7 141.4 149.4 160.2 168.9 166.4 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 se- mutual savings banks, corporate pension trust funds, dealers and brokers, certain ries 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 Financial Statistics • August 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 May' June' July June 6r June 13 June 20 June 27 July 4 July 11 Immediate delivery1 1 U.S. government securities 24,728 32,271 42,135 54,972 51,010 47,316 65,524 51,002 50,742 45,804 45,817 51,331 By maturity 2 Bills 14,768 18,398 22,393 29,016 27,513 23,407 34,751 29,435 28,757 22,051 24,106 25,621 3 Other within 1 year 621 810 708 1,168 1,206 1,195 1,400 989 968 1,359 1,535 1,208 4 1-5 years 4,360 6,272 8,758 11,387 10,606 9,813 11,876 8,606 9,225 13,488 9,486 8,869 5 5-10 years 2,451 3,557 5,279 6,736 6,785 7,679 11,686 6,970 6,637 5,137 6,199 9,465 6 Over 10 years 2,528 3,234 4,997 6,665 4,899 5,222 5,811 5,002 5,154 3,769 4,492 6,168 By type of customer 7 U.S. government securities dealers 1,640 1,769 2,257 2,459 2,270 2,395 2,716 1,835 2,264 2,413 2,902 2,660 8 U.S. government securities brokers 11,750 15,659 21,045 28,000 26,510 23,525 33,288 27,023 28,043 23,032 21,324 24,649 9 All others2 11,337 15,344 18,832 24,512 22,231 21,397 29,520 22,144 20,435 20,359 21,593 24,022 10 Federal agency securities 3,306 4,142 5,576 6,574 7,088 7,954 8,284 6,665 8,523 6,310 6,889 7,737 11 Certificates of deposit 4,477 5,001 4,333 6,181 3,976 4,508 4,692 3,876 3,549 3,813 4,257 4,993 12 Bankers acceptances 1,807 2,502 2,642 3,324 3,107 3,183 3,689 3,267 2,803 2,816 2,981 3,260 13 Commercial paper 6,128 7,595 8,036 8,877 10,034 11,580 10,480 9,435 99,,660088 1100,,336611 1122,,225511 1111,,003388 Futures transactions3 14 Treasury bills 3,523 5,031 6,655 11,285 8,173 7,126 10,871 7,302 9,603 7,389 6,033 6,699 15 Treasury coupons 1,330 1,490 2,501 5,512 4,960 4,260 6,235 4,509 5,528 4,239 3,821 4,883 16 Federal agency securities 234 259 265 356 381 221 367 350 445 213 417 263 Forward transactions4 17 U.S. government securities 365 835 1,493 1,773 1,703 1,138 1,609 1,221 2,590 1,285 1,382 1,151 18 Federal agency securities 1,370 982 1,646 3,069 2,810 2,711 3,231 3,015 3,406 1,943 2,997 3,367 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 May' June' July May 30' June 6 June 13 June 20 June 27 Positions Net immediate1 1 U.S. government securities 9,033 9,328 6,263 -9,052 -6,387 -6,118 -11,218 -6,985 -5,023 -4,696 -7,714 2 Bills 6,485 4,837 4,282 -7,097 -2,628 -2,359 -8,046 -4,432 -1,350 -712 -4,087 3 Other within 1 year -1,526 -199 -177 -291 -596 -601 -541 -427 -365 -647 -848 4 1-5 years 1,488 2,932 1,709 50 343 326 716 -177 -125 171 1,093 5 5-10 years 292 -341 -78 -939 -1,341 -858 -1,719 -541 -1,463 -1,502 -1,431 6 Over 10 years 2,294 2,001 528 -865 -2,250 -2,715 -1,713 -1,490 -1,803 -2,089 -2,535 7 Federal agency securities 2,277 3,712 7,172 16,857 15,999 16,040 16,715 17,279 16,547 15,714 14,981 8 Certificates of deposit 3,435 5,531 5,839 6,403 6,990 7,400 6,029 6,679 6,667 6,991 7,289 9 Bankers acceptances 1,746 2,832 3,332 3,186 3,498 4,183 2,624 3,236 3,606 3,841 3,172 10 Commercial paper 2,658 3,317 3,159 2,937 3,969 3,161 3,050 4,232 4,039 4,001 33,,881177 Futures positions 11 Treasury bills -8,934 -2,508 -4,125 9,273 2,613 -1,385 11,525 8,223 4,922 -547 -95 12 Treasury coupons -2,733 -2,361 -1,032 1,083 1,844 3,368 1,340 1,537 1,700 1,043 2,354 13 Federal agency securities 522 -224 170 602 826 622 620 604 840 701 977 Forward positions 14 U.S. government securities -603 -788 -1,935 -4,588 -836 -1,794 -3,844 -2,734 -667 -283 -416 15 Federal agency securities -451 -1,190 -3,561 -10,278 -10,763 -10,272 -9,711 -10,860 -11,242 -10,563 -10,161 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 14,568 26,754 29,099 46,269 44,990 1 47,621 44,539 46,331 45,490 44,412 17 Term agreements 32,048 48,247 52,493 65,742 65,225 1 65,805 61,823 63,221 64,082 68,725 Repurchase agreements4 n.a. 18 Overnight and continuing 35,919 49,695 57,946 72,513 70,133 i 71,484 72,335 70,385 72,674 71,413 19 Term agreements 29,449 43,410 44,410 54,805 102,380 t 56,375 53,130 52,722 52,160 55,059 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1984 AAggeennccyy 11998800 11998811 11998822 Jan. Feb. Mar. Apr. May June 1 Federal and federally sponsored agencies 188,665 221,946 237,085 239,872 241,628 244,691' 247,148 252,044 255,376 2 Federal agencies 28,606 31,806 33,055 33,919 33,785 32,800 34,273 34,231 34,473 3 Defense Department1 610 484 354 234 215 206 197 188 181 4 Export-Import Bank2'3 11,250 13,339 14,218 14,852 14,846 15,347 15,344 15,344 15,604 5 Federal Housing Administration4 477 413 288 173 169 166 162 156 155 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 1,337 1,337 8 Tennessee Valley Authority 11,190 13,115 14,365 14,980 14,875 14,805 14,890 14,930 14,980 9 United States Railway Association6 492 202 194 111 111 111 111 111 51 10 Federally sponsored agencies7 160,059 190,140 204,030 205,953 207,843 211,891 212,872 217,813 220,903 11 Federal Home Loan Banks 37,268 54,131 55,967 48,344 48,224 48,594 49,786 52,281 54,799 12 Federal Home Loan Mortgage Corporation 4,686 5,480 4,524 6,679 7,556 8,633 8,134 9,131 8,988 13 Federal National Mortgage Association 55,182 58,749 70,052 74,676 75,865 77,966 78,073 79,267 79,871 14 Farm Credit Banks 62,923 71,359 71,896 73,023 72,856 73,180 73,130 73,138 73,061 15 Student Loan Marketing Association (8) 421 1,591 3,231 3,342 3,518 3,749 3,996 4,184 MEMO 16 Federal Financing Bank debt 87,460 110,698 126,424 135,940 135,859 137,707 138,769 139,936 141,734 Lending to federal and federally sponsored agencies 17 Export-Import Bank3 10,654 12,741 14,177 14,789 14,789 15,296 15,296 15,296 15,556 18 Postal Service6 1,520 1,288 1,221 1,154 1,154 1,154 1,154 1,087 1,087 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 13,255 13,150 13,080 13,165 13,205 13,255 21 United States Railway Association6 492 202 194 111 111 111 111 111 51 Other Lending10 22 Farmers Home Administration 39,431 48,821 53,261 54,776 54,471 55,186 55,691 56,476 57,701 23 Rural Electrification Administration 9,196 13,516 17,157 19,927 19,982 20,186 20,413 20,456 20,611 24 Other 11,262 12,740 22,774 26,928 27,202 27,694 27,939 28,305 28,473 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 2. Figures cover financing involving U.S. government and federal agency owned by nonbank dealer firms and dealer departments of commercial banks on a securities, negotiable CDs, bankers acceptances, and commercial paper. commitment, that is, trade-date basis, including any such securities that have 3. Includes all reverse repurchase agreements, including those that have been been sold under agreements to repurchase (RPs). The maturities of some arranged to make delivery on short sales and those for which the securities repurchase agreements are sufficiently long, however, to suggest that the securi- obtained have been used as collateral on borrowings, that is, matched agreements. ties involved are not available for trading purposes. Prior to 1984, securities 4. Includes both repurchase agreements undertaken to finance positions and owned, and hence dealer positions, do not include all securities acquired under "matched book" repurchase agreements. reverse RPs. After January 1984, immediate positions include reverses to maturity, which are securities that were sold after having been obtained under reverse NOTE. Data for positions are averages of daily figures, in terms of par value, repurchase agreements that mature on the same day as the securities. Before based on the number of trading days in the period. Positions are shown net and are 1981, data for immediate positions include forward positions. on a commitment basis. Data for financing are based on Wednesday figures, in terms of actual money borrowed or lent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • August 1984 1.45 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1983 1984 Type of issue or issuer, or use 11998811 11998822 11998833 Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr/ May 1 All issues, new and refunding1 47,732 79,138 86,421 6,701 5,945 9,833 5,061 4,535 5,422 5,302 7,057 Type of issue 2 General obligation 12,394 21,094 21,566 1,951 1,730 1,153 1,117 1,830 2,491 2,235 2,380 3 U.S. government loans2 34 225 96 15 15 15 0 2 2 3 3 4 Revenue 35,338 58,044 64,855 4,750 4,215 8,680 3,944 2,705 2,931 3,067 4,677 5 U.S. government loans2 55 461 253 39 39 39 1 2 4 8 13 Type of issuer 6 State 5,288 8,438 7,140 856 405 204 327 935 584 885 497 7 Special district and statutory authority 27,499 45,060 51,297 4,406 3,358 6,323 3,500 2,114 2,962 2,693 3,742 8 Municipalities, counties, townships, school districts 14,945 25,640 27,984 1,439 2,182 3,306 1,234 1,486 1,876 1,724 2,818 9 Issues for new capital, total 46,530 74,804 72,441 5,238 5,448 9,405 4,058 3,950 4,618 4,209 5,983 Use of proceeds 10 Education 4,547 6,482 8,099 470 406 753 388 348 592 446 883 11 Transportation 3,447 6,256 4,387 250 353 438 126 327 53 546 402 12 Utilities and conservation 10,037 14,259 13,588 608 1,122 1,243 1,915 734 1,261 636 1,368 13 Social welfare 12,729 26,635 26,910 2,599 2,175 2,951 830 1,108 1,060 1,020 1,353 14 Industrial aid 7,651 8,349 7,821 355 584 2,945 126 287 76 319 438 15 Other purposes 8,119 12,822 11,637 956 808 1,075 673 1,146 1,576 1,242 1,539 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 se o r issuer, 11998811 11998822'' 11998833rr Oct/ Nov. Dec. Jan/ Feb. Mar. Apr. May 1 All issues1-2 70,441 84,640 98,550 6,884 8,103 6,812 7,690 7,629 5,442 6,047 4,023 2 Bonds 45,092 54,078 46,971 3,042 4,075 3,173 5,647 5,250 3,346 4,262 2,214 Type of offering 3 Public 38,103 44,280 46,971 3,042 4,075 3,173 5,647 5,250 3,346 4,262 2,214 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 12,923 7,842 366 22 423 179 452 68 691 383 6 Commercial and miscellaneous 5,229 5,579 5.158 114 23 201 976 626 258 1,096 221 7 Transportation 2,052 1,491 1,038 0 111 105 10 75 180 69 0 8 Public utility 8,963 12,237 7,241 510 910 120 325 385 521 495 100 9 Communication 4,280 2,389 3.159 50 0 0 210 0 200 0 0 10 Real estate and financial 12,243 19,460 22,531 2,002 3,009 2,324 3,947 3,712 2,119 1,911 1,510 11 Stocks3 25,349 30,562 51,579 3,842 4,028 3,639 2,043 2,379 2,096 1,785 1,809 Type 12 Preferred 1,797 5,113 7,213 300 433 253 305 425 227 339 579 13 Common 23,552 25,449 44,366 3,542 3,595 3,386 1,738 1,954 1,869 1,446 1,230 Industry group 14 Manufacturing 5,074 5,649 14,135 744 498 649 427 299 387 165 442 15 Commercial and miscellaneous 7,557 7,770 13,112 868 1,498 852 465 616 486 732 718 16 Transportation 779 709 2,729 305 192 413 54 15 105 62 84 17 Public utility 5,577 7,517 5,001 588 622 245 225 45 134 188 116 18 Communication 1,778 2,227 1,822 36 13 12 30 20 18 94 16 19 Real estate and financial 4,584 6,690 14,780 1,301 1,145 1,468 842 1,384 966 544 433 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 Nov. Dec. Jan. Feb. Mar. Apr. May June INVESTMENT COMPANIES' I Sales of own shares2 45,675 84,793 6,341 6,846 10,274 8,233 8,857 9,549 8,657 8,343 2 Redemptions of own shares3 30,078 57,120 3,920 5,946 5,544 5,162 5,339 7,451 5,993 6,156 3 Net sales 15,597 27,673 2,421 900 4,730 3,071 3,518 2,098 2,664 2,187 4 Assets4 76,841 113,599 113,052 113,599 114,839 111,068 114,537 116,812 111,071' 115,034 5 Cash position5 6,040 8,343 9,395 8,343 8,963 9,140 10,406 10,941 10,847 12,072 6 Other 70,801 105,256 103,657 105,256 105,876 101,928 104,131 105,871 100,224' 102,962 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' 1984' AAccccoouunntt 11998811'' 11998822'' 11998833'' Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql 1 Corporate profits with inventory valuation and capital consumption adjustment 189.9 159.1 225.2 161.7 163.3 151.6 179.1 216.7 245.0 260.0 277.4 2 Profits before tax 221.1 165.5 203.2 169.8 168.9 155.8 161.7 198.2 227.4 225.5 243.3 3 Profits tax liability 81.1 60.7 75.8 62.9 61.9 55.0 59.1 74.8 84.7 84.5 92.7 4 Profits after tax 140.0 104.8 127.4 106.9 107.0 100.8 102.6 123.4 142.6 141.1 150.6 5 Dividends 66.5 69.2 72.9 68.6 69.0 70.2 71.1 71.7 73.3 75.4 77.7 6 Undistributed profits 73.5 35.6 54.5 38.2 38.1 30.6 31.4 51.7 69.3 65.6 72.9 7 Inventory valuation -23.6 -9.5 -11.2 -8.9 -10.1 -12.6 -4.3 -12.1 -19.3 -9.2 -13.5 8 Capital consumption adjustment -7.6 -3.1 33.2 .8 4.5 8.4 21.7 30.6 36.9 43.6 47.6 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 • August 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 Q3 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. 1983 1984 IInndduussttrryy11 11998822 11998833 1199884411 Ql Q2 Q3 Q4 QL Q2 Q3' Q41 1 Total nonfarm business 282.71 269.22 308.98 261.71 261.16 270.05 283.96 293.15 303.79 314.52 324.45 Manufacturing 2 Durable goods industries 56.44 51.78 61.40 50.74 48.48 53.06 54.85 58.94 58.28 63.39 65.00 3 Nondurable goods industries 63.23 59.75 67.36 59.12 60.31 58.06 61.50 63.84 67.72 67.02 70.86 Nonmanufacturing 4 Mining 15.45 11.83 13.97 12.03 10.91 11.93 12.43 13.95 13.32 14.14 14.47 Transportation 5 Railroad 4.38 3.92 4.90 3.35 3.64 4.07 4.63 4.41 5.12 5.40 4.67 6 Air 3.93 3.77 2.67 4.09 4.10 3.57 3.32 2.77 2.69 2.57 2.65 7 Other 3.64 3.50 4.40 3.60 3.14 3.36 3.91 4.28 4.32 4.35 4.64 Public utilities 8 Electric 33.40 34.99 35.58 33.97 34.86 35.84 35.31 35.74 35.12 35.38 36.07 9 Gas and other 8.55 7.00 9.40 7.64 6.62 6.38 7.37 7.87 9.31 9.75 10.67 10 Commercial and other2 93.68 92.67 109.30 87.17 89.10 93.79 100.62 101.35 107.92 112.52 115.42 •Trade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade; finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). 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 1984 AAccccoouunntt 11997788 11997799 11998800 11998811 11998822 Q1 Q2 Q3 Q4 QL ASSETS Accounts receivable, gross 1 Consumer 52.6 65.7 73.6 85.5 89.5 89.9 91.3 92.3 92.8 96.9 2 Business 63.3 70.3 72.3 80.6 81.0 82.2 84.9 86.8 95.2 101.1 3 Total 116.0 136.0 145.9 166.1 170.4 172.1 176.2 179.0 188.0 198.0 4 LESS: Reserves for unearned income and losses— 15.6 20.0 23.3 28.9 30.5 29.7 30.4 30.1 30.6 31.9 5 Accounts receivable, net 100.4 116.0 122.6 137.2 139.8 142.4 145.8 148.9 157.4 166.1 6 Cash and bank deposits 3.5 1 7 Securities 1.3 \ 24.9' 27.5 34.2 39.7 42.8 44.3 45.0 45.3 47.1 8 All other 17.3 J 9 Total assets 122.4 140.9 150.1 171.4 179.5 185.2 190.2 193.9 202.7 213.2 LIABILITIES 10 Bank loans 6.5 8.5 13.2 15.4 18.6 16.6 16.3 17.0 19.1 14.7 11 Commercial paper 34.5 43.3 43.4 51.2 45.8 45.2 49.0 49.7 53.6 58.4 Debt 12 Short-term, n.e.c 8.1 8.2 7.5 9.6 8.7 9.8 9.6 8.7 11.3 12.2 13 Long-term, n.e.c 43.6 46.7 52.4 54.8 63.5 64.7 64.5 66.2 65.4 68.7 14 Other 12.6 14.2 14.3 17.8 18.7 22.8 24.0 24.4 27.1 29.8 IS Capital, surplus, and undivided profits 17.2 19.9 19.4 22.8 24.2 26.0 26.7 27.9 26.2 29.4 16 Total liabilities and capital 122.4 140.9 150.1 171.4 179.5 185.2 190.2 193.9 202.7 213.2 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments receivable AAAccccccooouuunnntttsss rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg 1984 1984 1984 MMMaaayyy 333111,,, 111999888444111 Mar. Apr. May Mar. Apr. May Mar. Apr. May 1 Total 102,682 706 818 997 26,006 24,643 27,451 25,300 23,825 26,454 2 Retail automotive (commercial vehicles) 24,503 364 466 816 1,878 2,002 2,391 1,514 1,536 1,575 3 Wholesale automotive 16,855 -10 343 -402 7,728 8,713 8,626 7,738 8,370 9,028 4 Retail paper on business, industrial, and farm equipment 29,432 352 -5 233 1,304 1,142 1,406 952 1,147 1,173 5 Loans on commercial accounts receivable and factored commercial accounts receivable 10,715 -236 -78 302 12,709 10,705 12,468 12,945 10,783 12,166 6 All other business credit 21,177 236 92 48 2,387 2,081 2,560 2,151 1,989 2,512 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics • August 1984 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1983 1984 Dec. Jan. Feb. Mar. Apr. May June 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 94.8 92.9 104.1 94.0 92.4 93.9' 93.4 2 Amount of loan (thousands of dollars) 65.3 69.8 69.6 73.3 71.7 77.8 73.4 71.1 72.8' 72.5 3 Loan/price ratio (percent) 74.8 76.6 77.1 79.1 79.2 77.8 80.4 79.2 79.8' 79.9 4 Maturity (years) 27.7 27.6 26.7 27.3 27.8 27.3 27.9 28.0 27.6' 28.1 5 Fees and charges (percent of loan amount)2 2.67 2.95 2.40 2.56 2.61 2.41 2.52 2.63 2.63' 2.58 6 Contract rate (percent per annum) 14.16 14.47 12.20 11.94 11.80 11.78 11.56 11.55 11.68' 11.61 Yield (percent per annum) 7 FHLBB series5 14.74 15.12 12.66 12.42 12.29 12.23 12.02 12.04 12.18' 12.10 8 HUD series4 16.52 15.79 13.43 13.41 13.28 13.31 13.57 13.77 14.38 14.65 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 16.31 15.31 13.11 13.25 13.08 13.20 13.68 13.80 15.01 14.91 10 GNMA securities6 15.29 14.68 12.26 12.49 12.35 12.31 12.70 13.01 13.67 14.14 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 58,675 66,031 74,847 78,256 79,049 79,350 80,974 81,956 82,697 83,243 12 FHA/VA-insured 39,341 39,718 37,393 36,211 40,873 35,420 35,329 35,438 35,309 35,153 13 Conventional 19,334 26,312 37,454 42,045 38,177 43,930 45,645 46,518 47,388 48,090 Mortgage transactions (during period) 14 Purchases 6,112 15,116 17,554 2,204 1,285 1,507 2,030 1,775 1,379 1,209 15 Sales 2 2 3,528 250 20 723 0 235 0 0 Mortgage commitments1 16 Contracted (during period) 9,331 22,105 18,607 1,471 1,772 1,930 1,626 1,561 1,233 1,995 17 Outstanding (end of period) 3,717 7,606 5,461 5,461 5,470 5,872 5,333 5,135 4,981 5,640 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 Total 5,231 5,131 5,9% 7,633 8,049 8,566 8,980 9,143 9,224 19 FHA/VA 1,065 1,027 974 941 940 934 929 924 918 20 Conventional 4,166 4,102 5,022 6,691 7,109 7,632 8,050 8,219 8,306 n a. Mortgage transactions (during period) 21 Purchases 3,800 23,673 23,089 1,685 1,419 1,389 1,291 983 987 22 Sales 3,531 24,170 19,686 1,115 984 810 863 717 829 Mortgage commitments9 23 Contracted (during period) 6,8% 28,179 32,852 1,704 1,470 1,386 1,874 1,701 1,966 24 Outstanding (end of period) 3,518 7,549 16,964 16,964 16,994 16,944 17,514 18,183 19,139 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 Q2 Q3 Q4 Ql' Q2 1 AH holders 1,583,264 1,655,036'' 1,826,395 1,723,052 1,775,117 1,826,395 1,868,630 1,927,073 2 1- to 4-family 1,065,294 1,105,717' 1,214,592 1,146,926 1,182,356 1,214,592 1,244,154 1,281,179 3 Multifamily 136,354 140,551' 150,949 144,731 147,052 150,949 153,400 159,607 4 Commercial 279,889 302,055' 351,287 323,427 336,697 351,287 361,018 375,346 5 101,727 106,713' 109,567 107,968 109,012 109,567 110,058 110,941 6 Major financial institutions 1,040,827 1,023,611' 1,109,963 1,048,688 1,079,605 1,109,963 1,136,168 1,180,558 7 Commercial banks1 284,536 300,203 328,878 310,217 320,299 328,878 338,877 351,246 8 1- to 4-family 170,013 173,157 181,672 174,032 178,054 181,672 184,925 190,727 9 Multifamily 15,132 16,421 18,023 16,876 17,424 18,023 19,689 20,548 10 Commercial 91,026 102,219 119,843 110,437 115,692 119,843 124,571 129,961 11 Farm 8,365 8,406 9,340 8,872 9,129 9,340 9,692 10,010 12 Mutual savings banks 99,997 97,805 136,054 119,236 129,645 136,054 143,180 148,756 13 1- to 4-family 68,187 66,777 96,569 84,349 92,467 96,569 101,868 105,836 14 Multifamily 15,960 15,305 17,785 16,667 17,588 17,785 18,441 19,077 15 Commercial 15,810 15,694 21.671 18,192 19,562 21,671 22,841 23,813 16 Farm 40 29 29 28 28 29 30 30 17 Savings and loan associations 518,547 483,614 493,432 474,510 482,305 493,432 502,143 526,838 18 1- to 4-family 433,142 393,323 389,811 377,947 381,744 389,811 395,940 413,304 19 Multifamily 37,699 38,979 42,435 39,954 41,334 42,435 43,435 45,835 20 Commercial 47,706 51,312 61,186 56,609 59,227 61,186 62,768 67,699 21 Life insurance companies 137,747 141,989' 151,599 144,725 147,356 151,599 151,968 153,718 V 1- to 4-family 17,201 16,751' 15,385 15,860 15,534 15,385 14,971 14,982 23 Multifamily 19,283 18,856' 19,189 18,778 18,857 19,189 19,153 19,312 24 Commercial 88,163 93,547' 104,279 97,416 100,209 104,279 105,270 106,774 25 Farm 13,100 12,835' 12,746 12,671 12,756 12,746 12,574 12,650 26 Federal and related agencies 126,094 138,138 147,370 142,094 142,224 147,370 150,784 153,389 27 Government National Mortgage Association 4,765 4,227 3,395 3,643 3,475 3.395 2,900 3,050 28 1- to 4-family 693 676 630 651 639 630 618 633 29 Multifamily 4,072 3,551 2,765 2,992 2,836 2,765 2,282 2,417 30 Farmers Home Administration 2,235 1,786 2,141 1,605 600 2,141 2,094 1,844 31 1- to 4-family 914 783 1,159 381 211 1,159 1,005 885 32 Multifamily 473 218 173 555 32 173 303 267 33 Commercial 506 377 409 248 113 409 319 281 34 Farm 342 408 400 421 244 400 467 411 35 Federal Housing and Veterans Administration 5,999 5,228 4,894 5,084 5,050 4,894 4,832 4,771 36 1- to 4-family 2,289 1,980 1,893 1,911 2,061 1,893 1,956 1,846 37 Multifamily 3,710 3,248 3,001 3,173 2,989 3,001 2,876 2,925 38 Federal National Mortgage Association 61,412 71,814 78,256 74,669 75,174 78,256 80,975 83,243 39 1- to 4-family 55,986 66,500 73,045 69,396 69,938 73,045 75,770 77,633 40 Multifamily 5,426 5,314 5,211 5,273 5,236 5,211 5,205 5,610 41 Federal Land Banks 46,446 50,350 51,052 50,858 51,069 51,052 51,004 51,107 42 1- to 4-family 2,788 3,068 3,000 3,030 3,008 3,000 2,982 2,966 43 Farm 43,658 47,282 48,052 47,828 48,061 48,052 48,022 48,141 44 Federal Home Loan Mortgage Corporation 5,237 4,733 7,632 6,235 6,856 7,632 8,979 9,374 45 1- to 4-family 5,181 4,686 7,559 6,119 6,799 7,559 8,847 9,188 46 Multifamily 56 47 73 116 57 73 132 186 47 Mortgage pools or trusts2 163,000 216,654 285,073 252,665 272,611 285,073 296,481 304,468 48 Government National Mortgage Association 105,790 118,940 159,850 139,276 151,597 159,850 166,261 170,693 49 1- to 4-family 103,007 115,831 155,801 135,628 147,761 155,801 161,943 166,260 50 Multifamily 2,783 3,109 4,049 3,648 3,836 4,049 4,318 4,433 51 Federal Home Loan Mortgage Corporation 19,853 42,964 57,895 50,934 54,152 57,895 59,376 61,169 52 1- to 4-family 19,501 42,560 57,273 50,446 53,539 57,273 58,776 60,119 53 Multifamily 352 404 622 488 613 622 600 1,050 54 Federal National Mortgage Association3 717 14,450 25,121 20,933 23,819 25,121 28,354 29,256 55 1- to 4-family 717 14,450 25,121 20,933 23,819 25,121 28,354 29,256 56 Farmers Home Administration 36,640 40,300 42,207 41,522 43,043 42,207 42,490 43,350 57 1- to 4-family 18,378 20,005 20,404 20,728 21,083 20,404 20,573 20,989 58 Multifamily 3,426 4,344 5,090 4,343 5,042 5,090 5,081 5,184 59 Commercial 6,161 7,011 7,351 7,303 7,542 7,351 7,456 7,607 60 Farm 8,675 8,940 9,362 9,148 9,376 9,362 9,380 9,570 61 Individual and others4 253,343 276,633 283,989 279,605 280,677 283,989 285,197 288,658 62 1- to 4-family5 167,297 185,170 185,270 185,515 185,699 185,270 185,626 186,555 63 Multifamily 27,982 30,755 32,533 31,868 31,208 32,533 31,885 32,763 64 Commercial 30,517 31,895 36,548 33,222 34,352 36,548 37,793 39,211 65 Farm 27,547 28,813 29,638 29,000 29,418 29,638 29,893 30,129 1. Includes loans held by nondeposit trust companies but not bank trust pension funds, credit unions, and U.S. agencies for which amounts are small or departments. for which separate data are not readily available. 2. Outstanding principal balances of mortgages backing securities insured or 5. Includes estimate of residential mortgage credit provided by individuals. guaranteed by the agency indicated. NOTE. Based on data from various institutional and governmental sources, with 3. Outstanding balances on FNMA's issues of securities backed by pools of some quarters estimated in part by the Federal Reserve in conjunction with the conventional mortgages held in trust. Implemented by FNMA in October 1981. Federal Home Loan Bank Board and the Department of Commerce. Separation of 4. Other holders include mortgage companies, real estate investment trusts, nonfarm mortgage debt by type of property, if not reported directly, and state and local credit agencies, state and local retirement funds, noninsured interpolations and extrapolations when required, are estimated mainly by the Federal Reserve. Multifamily debt refers to loans on structures of five or more units. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • August 1984 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net ChangeA Millions of dollars 1983 1984 11998800 11998811 11998822 Nov. Dec. Jan. Feb. Mar. Apr. May June Amounts outstanding (end of period) 1 Total 314,910 335,691 355,849 384,410 396,082 394,922 399,177 402,466 407,671 418,080 427,565 By major holder 2 Commercial banks 147,013 147,622 152,490 165,670 171,978 171,934 175,941 177,625 181,022 186,668 191,519 3 Finance companies 76,756 89,818 98,693 102,560 102,862 101,680 101,702 101,619 101,119 102,967 104,460 4 Credit unions 44,041 45,953 47,253 52,578 53,471 53,882 54,851 55,892 56,962 58,517 59,893 5 Retailers2 28,697 31,348 32,735 32,371 35,911 34,505 33,455 33,208 33,327 33,730 34,206 6 Savings and loans 9,911 12,410 15,823 21,023 21,615 21,823 22,269 23,071 23,957 24,915 25,837 7 Gasoline companies 4,468 4,403 4,063 4,157 4,131 4,300 4,025 3,944 3,955 4,020 4,289 8 Mutual savings banks 4,024 4,137 4,792 6,051 6,114 6,798 6,934 7,107 7,329 7,263 7,361 By major type of credit 9 Automobile 116,838 125,331 131,086 141,107 142,449 143,186 146,047 146,047 147,944 152,225 155,937 1 1 1 1 2 0 Co I D m n i d r m e ir e c e r t c c t l i o a p a l a n b p s a e n r ks 6 3 2 1 5 6 , , , 2 3 5 3 0 3 3 3 6 2 5 3 8 3 4 , , , 0 7 3 8 7 0 1 5 6 2 3 5 3 4 9 , , , 4 7 5 7 5 5 2 5 5 65,9 < ( 17 3 3 ) ) 67,55 ( ( 7 3 3 ) ) 68,7 ( 4 ( 7 3 3 ) ) 71,3 ( 2 ( 7 3 3 ) ) 71,2 ( 3 ( 7 3 3 ) ) 73,0 ( ( 16 3 3 ) ) 75,78 ( ( 73 3 ) ) 78,0 ( 1 ( 8 3 3 ) ) 13 Credit unions 21,060 21,975 22,596 25,147 25,574 25,771 26,234 26,732 27,244 27,988 49,273 14 Finance companies 34,242 45,275 48,935 50,043 49,318 48,668 48,486 48,078 47,684 48,450 28,646 15 Revolving 58,506 64,500 69,998 74,032 80,823 78,566 77,671 79,110 80,184 82,436 84,598 16 Commercial banks 29,765 32,880 36,666 40,774 44,184 43,118 43,506 45,235 46,149 47,936 49,374 17 Retailers 24,273 27,217 29,269 29,101 32,508 31,148 30,140 29,931 30,080 30,480 30,935 18 Gasoline companies 4,468 4,403 4,063 4,157 4,131 4,300 4,025 3,944 3,955 4,020 4,289 19 Mobile home 17,321 17,958 22,254 23,492 23,680 23,668 23,571 23,661 23,850 24,104 24,427 20 Commercial banks 10,371 10,187 9,605 9,871 9,842 9,829 9,663 9,589 9,580 9,573 9,621 21 Finance companies 3,745 4,494 9,003 9,270 9,365 9,345 9,324 9,333 9,361 9,434 9,528 22 Savings and loans 2,737 2,788 3,143 3,793 3,906 3,923 4,003 4,147 4,306 4,478 4,644 23 Credit unions 469 489 503 558 567 571 581 592 603 619 634 24 Other 122,244 127,903 132,511 145,779 149,130 149,502 151,888 153,648 155,693 159,315 162,603 25 Commercial banks 45,341 46,474 46,664 49,108 50,395 50,240 51,445 51,564 52,277 53,372 54,506 26 Finance companies 38,769 40,049 40,755 43,247 44,179 43,667 43,892 44,208 44,074 45,083 45,659 27 Credit unions 22,512 23,490 24,154 26,873 27,330 27,540 28,036 28,568 29,115 29,910 30,613 28 Retailers 4,424 4,131 3,466 3,270 3,403 3,357 3,315 3,277 3,247 3,250 3,271 29 Savings and loans 7,174 9,622 12,680 17,230 17,709 17,900 18,266 18,924 19,651 20,437 21,193 30 Mutual savings banks 4,024 4,137 4,792 6,051 6,114 6,798 6,934 7,107 7,329 7,263 7,361 Net change (during period)4 31 Total 1,448 18,217 13,096 4,819 5,782 4,469 6,608 5,870 6,408 10,233 7,825 By major holder 32 Commercial banks -7,163 607 4,442 2,832 3,977 2,029 4,914 3,422 4,025 6,065 3,835 33 Finance companies 8,438 13,062 4,504 -40 -146 -66 258 -193 -350 1,304 1,353 34 Credit unions -2,475 1,913 1,298 912 731 916 712 1,230 1,529 1,453 962 35 Retailers2 329 1,103 651 318 537 422 325 355 278 476 471 36 Savings and loans 1,485 1,682 2,290 584 589 364 414 813 868 979 1,069 37 Gasoline companies 739 -65 -340 58 -31 72 -172 2 2 46 89 38 Mutual savings banks 95 -85 251 155 126 731 156 242 66 -90 46 By major type of credit 39 Automobile 477 8,495 4,898 1,268 1,468 2,106 2,799 326 2,158 3,689 2,897 4 4 4 2 0 1 Co D I m n i d r m e ir e c e r t c c t l i o a p a l a n b p s a e n r ks - - -3 2 5 , , , 1 7 8 0 2 3 4 6 0 - - 2 3 - , , 8 5 4 5 9 5 8 7 5 -2 2 - 3 2 9 4 5 1,2 ( ( 57 3 3 ) ) 1,5 ( ( 68 3 3 ) ) 1,7 (( 2 ' 2 3) ) 2,63 ( ( 5 3 3 ) ) 4 ( ( 32 3 3 ) ) 1,7 ( ( 66 3 3 ) ) 2,80 ( ( 7 3 3 ) ) 1,9 ( ( 07 3 3 ) ) 43 Credit unions -1,184 914 622 436 349 428 276 660 734 695 461 44 Finance companies 7,491 11,033 3,505 -425 -449 -44 -112 -766 -342 187 529 45 Revolving 1,415 4,467 4,365 1,427 1,690 505 1,273 2,962 1,868 2,817 1,569 46 Commercial banks -97 3,115 3,808 1,040 1,207 18 1,127 2,613 1,568 2,298 1,047 47 Retailers 773 1,417 897 329 515 414 318 347 298 473 433 48 Gasoline companies 739 -65 -340 58 -31 72 -172 2 2 46 89 49 Mobile home 483 1,049 609 -64 1 -92 -127 285 285 302 454 50 Commercial banks -276 -186 -508 -4 39 -15 -112 -85 27 -50 10 51 Finance companies 355 749 471 -164 -166 -104 -93 218 110 156 258 52 Savings and loans 430 466 633 94 120 18 68 141 132 183 174 53 Credit unions -25 20 14 10 9 9 10 10 16 13 12 54 Other -927 4,206 3,224 2,188 2,623 1,950 2,662 2,298 2,097 3,425 2,905 55 Commercial banks -960 1,133 372 539 1,163 304 1,264 463 653 1,010 871 56 Finance companies 592 1,280 528 549 469 82 463 355 -118 961 566 57 Credit unions -1,266 975 662 466 374 479 426 558 780 745 489 58 Retailers -444 -314 -246 -11 22 8 7 8 -20 3 38 59 Savings and loans 1,056 1,217 1,657 490 469 346 346 673 735 796 895 60 Mutual savings banks 95 -85 251 155 126 731 156 242 66 -90 46 • 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, $80.7 billion at the end of entertainment companies. 1981, $85.9 billion at the end of 1982, and $96.9 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 Dec. Jan. Feb. Mar. Apr. May June INTEREST RATES Commercial banks1 1 16.54 16.83 13.92 13.32 13.53 ? 18.09 18.65 16.68 16.16 16.35 17.45 18.05 15.91 15.45 15.54 4 1177..7788 1188..5511 1188..7733 1188..7733 1188..7711 Auto finance companies 5 New car 16.17 16.15 12.58 13.92 14.18 14.11 14.05 14.06 14.17 14.33 6 Used car 20.00 20.75 18.74 18.06 17.54 17.59 17.52 17.59 17.60 17.64 OTHER TERMS3 Maturity (months) 7 New car 45.4 46.0 45.9 46.3 46.3 46.4 46.7 47.1 47.7 48.2 8 Used car 35.8 34.0 37.9 37.9 39.5 39.4 39.4 39.5 39.7 39.8 Loan-to-value ratio 9 New car 86.1 85.3 86.0 87 88 87 87 88 88 88 10 Used car 91.8 90.3 92.0 92 92 91 92 92 92 92 Amount financed (dollars) 11 New car 7,339 8,178 8,787 9,167 9,099 9,072 9,139 9,190 9,262 9,311 12 Used car 4,343 4,746 5,033 5,401 5,392 5,418 5,474 5,547 5,675 5,774 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 • August 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 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11997788 11997799 11998800 11998811 11998822 11998833 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 369.8 386.0 343.2 377.2 395.3 523.3 392.4 362.0 356.8 434.8 504.7 541.9 By sector and instrument 2 U.S. government 53.7 37.4 79.2 87.4 161.3 186.6 87.8 86.9 106.9 215.5 231.3 141.8 3 Treasury securities 55.1 38.8 79.8 87.8 162.1 186.7 88.3 87.3 108.3 215.9 231.4 141.9 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 316.2 348.6 264.0 289.8 234.1 336.8 304.6 275.1 249.9 219.3 273.4 400.1 6 Debt capital instruments 199.7 211.2 192.0 158.4 152.4 237.6 179.3 137.5 139.7 166.1 221.7 253.5 7 Tax-exempt obligations 28.4 30.3 30.3 21.9 50.5 52.0 21.1 22.6 41.7 59.4 60.3 43.8 8 Corporate bonds 21.1 17.3 26.7 22.1 18.8 14.9 26.1 18.0 10.8 26.9 21.1 8.6 9 Mortgages 150.2 163.6 135.1 114.5 83.0 170.7 132.0 96.9 87.3 79.9 140.3 201.1 10 Home mortgages 112.2 120.0 96.7 75.9 56.6 110.9 92.6 59.2 55.8 58.6 92.9 128.9 11 Multifamily residential 9.2 7.8 8.8 4.3 1.3 8.9 4.9 3.7 4.2 -1.7 6.3 11.6 12 Commercial 21.7 23.9 20.2 24.6 20.0 48.0 25.2 23.9 21.4 18.6 40.1 55.8 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 99.2 125.3 137.6 110.1 53.2 51.7 146.7 15 Consumer credit 48.8 45.4 4.9 24.1 18.3 51.3 28.9 19.3 19.3 17.4 35.9 66.6 16 Bank loans n.e.c 37.4 51.2 36.7 54.7 54.4 26.1 45.5 63.9 70.1 38.8 17.3 34.9 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 14.9 31.1 19 By borrowing sector 316.2 348.6 264.0 289.8 234.1 336.8 304.6 275.1 249.9 219.3 273.4 400.1 20 State and local governments 19.1 20.5 20.3 9.7 36.3 43.7 9.1 10.2 29.3 43.3 50.7 36.7 21 Households 169.4 176.4 117.5 120.6 86.3 166.7 139.8 101.3 87.6 86.1 134.5 199.0 22 Farm 14.6 21.4 14.4 16.3 9.0 3.8 20.1 12.5 9.0 9.1 -.4 7.9 23 Nonfarm noncorporate 32.4 34.4 33.7 39.6 29.8 65.0 39.8 39.5 34.6 24.9 51.4 78.7 24 Corporate 80.6 96.0 78.1 103.7 72.7 57.5 95.8 111.5 89.3 56.0 37.2 77.9 25 Foreign net borrowing in United States 33.8 20.2 27.2 27.2 15.7 17.7 31.9 22.5 12.8 18.6 18.4 17.0 26 Bonds 4.2 3.9 .8 5.4 6.6 3.6 3.3 7.6 2.4 10.8 4.4 2.9 27 Bank loans n.e.c 19.1 2.3 11.5 3.7 -6.2 3.8 3.1 4.2 -5.1 -7.2 14.6 -7.0 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 4.3 4.9 3.5 3.0 6.0 4.0 4.6 30 Total domestic plus foreign 403.6 406.2 370.4 404.4 411.0 541.0 424.4 384.5 369.6 453.4 523.1 558.9 Financial sectors 31 Total net borrowing by financial sectors .. 74.6 82.5 63.3 85.4 69.3 89.8 87.4 83.4 89.8 48.7 75.2 104.4 By instrument 32 U.S. government related 37.1 47.9 44.8 47.4 64.9 67.7 45.2 49.6 61.3 68.4 68.0 67.5 33 Sponsored credit agency securities 23.1 24.3 24.4 30.5 14.9 1.4 28.9 32.1 23.6 6.3 -2.4 5.3 3 3 4 5 M Lo o a r n tg s a f g r e o m p o U ol . S s . e c g u o r v i e ti r e n s ment 13.6 23.1 19.2 15.0 49.5 4 66.3 14 1 .9 4 1 2 5 . . 4 1 37. . 0 8 62.1 70.4 62.3 36 Private financial sectors 37.5 34.6 18.5 38.0 4.4 22.0 42.2 33.8 28.5 -19.7 7.2 36.9 37 Corporate bonds 77..55 7.8 7.1 -.8 2.3 17.1 -.3 -1 .41 -1.2 5.8 15.4 18.8 38 Mortgages ..11 -.1 -.5 .1 * -.8 - .1 .1 * * 39 Bank loans n.e.c 2.8 -.4 -.4 2.2 3.2 -1.0 3.2 1.1 5.2 1.2 -4.7 2.6 40 Open market paper 14.6 18.0 4.8 20.9 -2.0 13.0 23.5 18.4 14.0 -18.0 9.3 16.6 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 1.4 30.3 34.5 24.4 6.3 -2.4 5.3 43 Mortgage pools 13.6 23.1 19.2 15.0 49.5 66.3 14.9 15.1 37.0 62.1 70.4 62.3 44 Private financial sectors 37.5 34.6 18.5 38.0 4.4 22.0 42.2 33.8 28.5 -19.7 7.2 36.29 45 Commercial banks 1.3 1.6 .5 .4 1.2 .5 .2 .5 .7 1.7 .8 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 -4.2 16.8 14.1 9.1 -15.2 -12.8 4.4 4 4 9 8 R Fi E n I a T n s c e companies - 1 1 8 . . 4 1 - 1 1 6 .3 .6 -2 6 . . 2 3 14. . 1 2 4. . 9 1 17. . 7 2 18. . 5 2 9. . 7 2 9. . 5 1 . . 2 1 13. . 7 2 21. _ 7 2 All sectors 50 Total net borrowing 478.2 488.7 433.7 489.8 480.3 630.8 511.8 467.9 459.4 502.1 598.3 663.3 51 U.S. government securities.. 90.5 84.8 122.9 133.0 225.9 254.4 131.8 134.3 167.6 284.0 299.4 209.4 52 State and local obligations... 28.4 30.3 30.3 21.9 50.5 52.0 21.1 22.6 41.7 59.4 60.3 43.8 53 Corporate and foreign bonds 32.8 29.0 34.6 26.7 27.7 35.6 29.1 24.2 12.0 43.5 40.8 30.3 54 Mortgages 150.2 163.5 134.9 113.9 83.0 170.6 131.1 96.6 87.3 79.8 140.2 201.0 55 Consumer credit 48.8 45.4 4.9 24.1 18.3 51.3 28.9 19.3 19.3 17.4 35.9 66.6 56 Bank loans n.e.c 59.3 53.0 47.8 60.6 51.4 28.9 51.8 69.3 70.2 32.8 27.2 30.6 57 Open market paper 26.4 40.3 20.6 54.0 5.4 17.8 56.1 51.9 33.0 -22.1 -11.5 47.1 58 Other loans 41.9 42.4 37.8 55.8 17.9 20.2 61.8 49.7 28.4 7.4 6.0 34.5 External corporate equity funds raised in United States 59 Total new share issues 1.9 -3.8 22.2 -3.7 35.4 70.6 10.2 -17.7 23.7 47.0 87.2 54.1 60 Mutual funds -.1 .1 5.2 6.8 18.6 34.1 8.1 5.6 13.2 24.0 39.0 29.3 61 All other 1.9 -3.9 17.1 -10.6 16.8 36.5 2.1 -23.2 10.6 23.0 48.2 24.8 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 4.3 .5 1.2 3.8 4.4 4.3 4.4 64 Foreign shares purchased in United States -.5 .8 2.1 * 1.3 3.9 .7 -.7 -.2 2.9 5.7 2.1 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 369.8 386.0 343.2 377.2 395.3 523.3 392.4 362.0 356.8 434.8 504.7 541.9 By public agencies and foreign 2 Total net advances 102.3 75.2 97.0 97.4 109.3 117.2 113.8 8811..00 110077..99 111100..88 112299..11 110055..22 3 U.S. government securities 36.1 -6.3 15.7 17.2 17.9 27.4 31.2 3.1 17.7 18.2 50.8 4.0 4 Residential mortgages 25.7 35.8 31.7 23.4 61.1 76.0 21.9 25.0 48.1 74.0 80.7 71.3 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 20.8 44.1 37.1 31.7 27.4 10.5 31.2 Total advanced, by sector 7 U.S. government 17.1 19.0 23.7 24.1 16.7 9.7 27.9 20.3 14.2 19.1 8.2 11.2 8 Sponsored credit agencies 40.3 53.0 45.6 48.2 65.3 68.8 47.2 49.2 62.5 68.1 69.1 68.4 9 Monetary authorities 7.0 7.7 4.5 9.2 9.8 10.9 2.4 16.0 .1 19.5 12.0 9.8 10 Foreign 38.0 -4.6 23.2 16.0 17.6 27.8 36.4 -4.4 31.1 4.1 39.9 15.7 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 67.7 45.2 4499..66 6611..33 6688..44 6688..00 6677..55 12 Foreign 33.8 20.2 27.2 27.2 15.7 17.7 31.9 22.5 12.8 18.6 18.4 17.0 Private domestic funds advanced 13 Total net advances 338.4 379.0 318.2 354.4 366.6 491.6 355.7 353.1 323.0 411.0 461.9 521.2 14 U.S. government securities 54.3 91.1 107.2 115.9 207.9 227.0 100.6 131.1 149.9 265.8 248.6 205.4 15 State and local obligations 28.4 30.3 30.3 21.9 50.5 52.0 21.1 22.6 41.7 59.4 60.3 43.8 16 Corporate and foreign bonds 23.4 18.5 19.3 19.4 15.4 12.7 20.9 17.9 -1.7 32.4 19.9 5.6 17 Residential mortgages 95.6 91.9 73.7 56.7 -3.3 43.8 75.5 37.9 11.7 -17.2 18.4 69.2 18 Other mortgages and loans 149.3 156.3 94.8 156.9 96.8 149.0 154.3 159.5 131.7 62.0 101.9 196.1 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 financial institutions 302.3 294.7 262.3 305.2 271.2 373.8 317.3 293.1 272.8 268.9 353.5 394.0 21 Commercial banking 129.0 123.1 101.1 103.6 108.5 132.7 99.6 107.6 109.7 107.1 130.0 135.5 22 Savings institutions 72.8 56.7 54.9 27.2 30.6 133.6 41.5 12.8 29.5 31.0 132.1 135.1 23 Insurance and pension funds 75.0 66.4 74.4 79.3 94.2 103.1 75.3 83.4 95.4 93.0 107.4 98.7 24 Other finance 25.5 48.5 32.0 95.2 37.9 4.4 101.0 89.4 38.1 37.8 -16.0 24.8 25 Sources of funds 302.3 294.7 262.3 305.2 271.2 373.8 317.3 293.1 272.8 268.9 353.5 394.0 26 Private domestic deposits and RPs 141.0 142.0 168.6 211.7 173.4 204.4 213.8 209.6 163.4 182.7 219.7 189.0 27 Credit market borrowing 37.5 34.6 18.5 38.0 4.4 22.0 42.2 33.8 28.5 -19.7 7.2 36.9 28 Other sources 123.8 118.1 75.2 55.5 93.5 147.4 61.3 49.8 80.8 105.9 126.7 168.1 29 Foreign funds 6.5 27.6 -21.7 -8.7 -27.7 22.4 -8.7 -8.7 -30.1 -25.4 -18.0 62.9 30 Treasury balances 6.8 .4 -2.6 -1.1 6.1 -5.3 6.5 -8.7 -2.1 14.1 8.8 -19.5 31 Insurance and pension reserves 62.2 49.1 65.4 73.2 85.9 89.8 62.7 83.8 85.4 86.4 93.1 86.6 32 Other, net 48.4 41.0 34.0 -7.9 29.2 40.5 .8 -16.7 27.6 30.7 42.8 38.1 Private domestic nonfinancial investors 33 Direct lending in credit markets 73.6 118.9 74.4 87.2 99.7 139.8 80.6 93.8 78.7 122.4 115.6 164.0 34 U.S. government securities 36.3 61.4 38.3 47.4 58.1 89.6 37.2 57.6 43.1 72.7 88.9 90.2 35 State and local obligations 3.6 9.9 7.0 9.6 30.9 35.9 9.5 9.7 28.4 33.4 48.2 23.5 36 Corporate and foreign bonds -1.8 5.7 .6 -8.9 -9.4 -3.3 -5.5 -12.4 -26.3 7.4 -19.2 12.6 37 Open market paper 15.6 12.1 -4.3 3.7 -2.0 6.6 -3.3 10.7 6.7 -10.7 -10.1 23.4 38 Other 19.9 29.8 32.9 35.4 22.1 11.0 42.7 28.2 26.8 19.6 7.7 14.3 39 Deposits and currency 152.2 151.4 180.0 221.7 179.4 222.5 222.6 220.7 166.2 192.1 239.9 205.0 40 Currency 9.3 7.9 10.3 9.5 8.4 13.6 8.0 11.0 4.5 12.3 14.1 13.2 41 Checkable deposits 16.2 18.7 5.0 18.1 13.0 21.0 29.8 6.5 6.7 19.1 55.4 -13.4 42 Small time and savings accounts 65.9 59.2 83.1 47.2 137.0 220.8 30.7 63.6 95.1 178.6 300.2 141.4 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 -1.9 41.6 31.2 21.2 -31.6 -63.1 59.2 45 Security RPs 7.5 6.6 6.5 2.5 3.8 8.5 7.7 -2.6 1.1 6.6 11.0 6.0 46 Deposits in foreign countries 2.0 1.5 1.1 .5 -2.4 4.5 .8 .2 -1.8 -2.9 6.1 2.8 47 Total of credit market instruments, deposits and currency 225.8 270.3 254.4 308.9 279.1 362.3 303.3 314.5 244.9 314.5 355.5 369.1 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 24.7 18.8 49 Private financial intermediation (in percent) 89.3 77.7 82.4 86.1 74.0 76.0 89.2 83.0 84.4 65.4 76.5 75.6 50 Total foreign funds 44.6 23.0 1.5 7.3 -10.2 50.2 27.8 -13.1 1.0 -21.3 21.9 78.6 MEMO: Corporate equities not included above 51 Total net issues 1.9 -3.8 22.2 -3.7 35.4 70.6 10.2 -17.7 23.7 47.0 87.2 54.1 52 Mutual fund shares -.1 .1 5.2 6.8 18.6 34.1 8.1 5.6 13.2 24.0 39.0 29.3 53 Other equities 1.9 -3.9 17.1 -10.6 16.8 36.5 2.1 -23.2 10.6 23.0 48.2 24.8 54 Acquisitions by financial institutions 4.5 9.7 16.8 22.1' 27.9 55.3 25.3 18.9 19.3 36.4 68.4 42.3 55 Other net purchases -2.7 -13.5 5.4 -25.9 7.5 15.3 -15.1 -36.6 4.4 10.6 18.8 11.9 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 • August 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 Nov. Dec. Jan. Feb. Mar. Apr.' May' June' July 1 Industrial production 151.0 138.6 147.6 155.3 156.2 158.5 160.0 160.8 162.1 162.7 164.1 165.6 Market groupings 2 Products, total 150.6 141.8 149.2 155.8 157.4 159.7 160.4 161.1 162.5 163.3 164.6 165.9 3 Final, total 149.5 141.5 147.1 153.2 155.2 157.5 158.0 158.6 160.2 161.1 162.7 164.0 4 Consumer goods 147.9 142.6 151.7 156.1 157.7 159.5 159.4 160.2 161.4 161.7 162.9 163.8 5 Equipment 151.5 139.8 140.8 149.1 151.8 154.9 156.1 156.4 158.5 160.4 162.4 164.4 6 Intermediate 154.4 143.3 156.6 165.5 165.4 167.8 169.0 170.2 171.0 171.4 171.8 172.7 7 Materials 151.6 133.7 145.2 154.5 154.5 156.6 159.4 160.4 161.5 161.9 163.3 165.1 Industry groupings 8 Manufacturing 150.4 137.6 148.2 156.4 156.8 159.5 161.4 162.1 163.4 164.2 165.3 166.9 Capacity utilization (percent)1 9 Manufacturing 79.4 71.1 75.2 78.8 78.9 80.1 80.9 81.0 81.5 81.6 82.0 82.6 10 Industrial materials industries 80.7 70.1 75.2 79.6 79.6 80.6 81.9 82.2 82.5 82.6 83.1 83.9 11 Construction contracts (1977 = 100)2 111.0 111.0 138.0 145.0 134.0 150.0 150.0 144.0 145.0 165.0 148.0 n.a. 12 Nonagricultural employment, total3 138.5 136.2 136.8 139.3 139.9 140.4 141.1 141.4 142.0 142.5 143.0 143.4 13 Goods-producing, total 109.4 102.6 101.5 103.2 103.8 104.6 105.4 105.5' 106.2 106.6 107.2 107.8 14 Manufacturing, total 103.7 96.9 96.0 97.8 98.4 99.0 99.6 100.1 100.4 100.6 101.0 101.5 15 Manufacturing, production-worker ... 98.0 89.4 88.7 91.2 91.9 92.5 93.1 93.6 94.0 94.1 94.4 95.1 16 Service-producing 154.4 154.6 156.1 159.1 159.6 160.0 160.7 161.1 161.6 162.2 162.6 163.0 17 Personal income, total 386.5 410.3' 435.6' 449^ 454.(K 459^ 464.0' 466.8' 471.3 473.1 476.9 18 Wages and salary disbursements 349.7 367.4' 3M.& 401.0' 404.7' 409.3' All.Or 413.3' 418.1 419.0 421.9 n.a. 19 Manufacturing 287.3 285.5' 294.7' 307.2' 310.4' 314.0' 317.1' 318.8' 322.0 321.8 323.2 1 20 Disposable personal income4 372.6' 398.C 427.1' 442^ 446.9' 453.(K 457.1' 459.9' 464.5 466.2 469.7 T 21 Retail sales5 330.6 326.0 373.0 389.3 391.4 407.3 403.0 396.9 410.8 413.6 415.7 411.9 Prices6 22 Consumer 272.4 289.1 298.4 303.1 303.5 305.2 306.6 307.3 308.8 309.7 310.7 n.a. 23 Producer finished goods 269.8 280.7 285.2 286.8 287.2 289.5' 290.6 291.7 291.4 291.5 291.2 n.a. 1. Ratios of indexes of production to indexes of capacity. Based on data from 5. Based on Bureau of Census data published in Survey of Current Business. Federal Reserve, McGraw-Hill Economics Department, Department of Com- 6. Data without seasonal adjustment, as published in Monthly Labor Review. merce, and other sources. Seasonally adjusted data for changes in the price indexes may be obtained from 2. Index of dollar value of total construction contracts, including residential, the Bureau of Labor Statistics, U.S. Department of Labor. nonresidential and heavy engineering, from McGraw-Hill Information Systems Company, F. W. Dodge Division. NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6, 3. Based on data in Employment and Earnings (U.S. Department of Labor). and indexes for series mentioned in notes 3 and 7 may also be found in the Survey Series covers employees only, excluding personnel in the Armed Forces. of Current Business. 4. Based on data in Survey of Current Business (U.S. Department of Com- Figures for industrial production for the last two months are preliminary and merce). estimated, respectively. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1983 1984 1983 1984 1983 1984 Q3 Q4 Ql Q2' Q3 Q4 Ql Q2' Q3 Q4 Ql Q2' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 151.8 155.5 159.8 163.0 196.4 197.3 198.4 199.7 77.3 78.8 80.5 81.6 2 Mining 116.1 121.0 124.2 125.3 165.4 165.5 165.7 165.9 70.2 73.1 75.0 75.5 3 Utilities 178.2 178.4 179.2 183.4 211.1 212.4 213.8 215.3 84.4 84.0 83.8 85.2 4 Manufacturing 152.8 156.5 161.0 164.3 197.5 198.4 199.5 201.0 77.4 78.9 80.7 81.7 5 Primary processing 152.8 156.4 160.5 162.2 195.3 195.8 196.5 197.2 78.3 79.9 81.7 82.3 6 Advanced processing 152.8 156.1 161.7 165.2 198.6 199.7 201.0 203.0 76.9 78.2 80.3 81.4 7 Materials 149.9 154.3 158.8 162.2 193.4 194.0 194.7 195.9 77.5 79.6 81.6 82.8 8 Durable goods 144.2 150.3 157.6 161.8 196.0 196.5 197.1 198.3 73.6 76.5 79.9 81.6 9 Metal materials 89.3 93.8 97.3 100.0 139.8 139.6 139.1 138.5 63.9 67.2 70.0 72.2 10 Nondurable goods 179.1 183.5 183.7 186.9 219.6 220.6 221.8 223.4 81.5 83.2 82.8 83.6 11 Textile, paper, and chemical 188.0 193.2 193.2 196.4 231.6 232.7 234.2 236.2 81.2 83.0 82.5 83.1 12 Paper 162.8 167.4 165.8 166.7 166.9 167.7 168.5 169.5 97.5 99.8 98.4 98.3 13 Chemical 227.8 235.0 236.7 242.1 298.3 300.1 302.3 305.2 76.4 78.3 78.3 79.3 14 Energy materials 127.4 127.8 131.2 132.7 154.7 155.3 155.8 156.4 82.3 82.3 84.2 84.8 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 High Low High Low June' Nov. Dec. Jan. Feb. Mar. Apr/ May June' July Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 69.6 76.3 78.7 79.0 80.1 80.7 80.9 81.3 81.5 82.0 82.5 16 Mining 91.8 86.0 88.5 69.6 69.5 73.2 74.7 75.4 74.9 74.7 74.3 75.6 76.6 78.2 17 Utilities 94.9 82.0 86.7 79.0 83.5 83.0 85.7 84.8 82.5 84.0 85.0 84.8 85.8 85.0 18 Manufacturing 87.9 69.0 87.5 68.8 76.4 78.8 78.9 80.1 80.9 81.0 81.5 81.6 82.0 82.6 19 Primary processing 93.7 68.2 91.4 66.2 77.1 80.0 79.2 80.6 82.2 82.2 82.2 82.3 82.2 83.0 20 Advanced processing .... 85.5 69.4 85.9 70.0 76.0 78.0 78.6 80.0 80.4 80.6 81.0 81.2 81.9 82.5 21 Materials 92.6 69.3 88.9 66.6 76.5 79.6 79.6 80.6 81.9 82.2 82.5 82.6 83.1 83.9 22 Durable goods 91.4 63.5 88.4 59.8 72.1 76.5 77.0 78.5 80.5 80.7 81.5 81.4 81.8 83.0 23 Metal materials 97.8 68.0 95.4 46.2 62.3 66.8 66.8 67.3 71.1 71.5 73.0 72.3 71.2 72.0 24 Nondurable goods 94.4 67.4 91.7 70.7 80.7 83.8 81.6 81.9 83.0 83.6 83.2 83.6 84.0 84.6 25 Textile, paper, and chemical 95.1 65.4 92.3 68.6 80.4 83.7 81.2 81.5 82.8 83.1 82.7 83.0 83.6 84.4 26 Paper 99.4 72.4 97.9 86.3 96.7 101.3 98.8 99.3 99.0 96.8 98.5 97.8 98.6 99.3 27 Chemical 95.5 64.2 91.3 64.0 75.9 79.0 76.2 76.7 78.6 79.5 78.9 79.1 80.0 80.9 28 Energy materials 94.5 84.4 88.9 78.5 82.6 81.8 83.6 84.4 84.1 84.1 84.5 84.5 85.5 85.4 1. Monthly high 1973; monthly low 1975 . 2. Monthly highs 1978 through 1980; monthly lows 1982. 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1983 1984 CCaatteeggoorryy 11998811 11998822 11998833 Dec. Jan. Feb. Mar. Apr. May June July HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 172,272 174,450 176,414 177,325 177,733 177,882 178,033 178,185 178,337 178,501 178,669 2 Labor force (including Armed Forces)1 110,812 112,383 113,749 114,340 114,415 114,896 115,121 115,461 116,017 116,094 116,167 3 Civilian labor force 108,670 110,204 111,550 111122,,113366 112,215 111122,,669933 112,912 113,245 113,803 111133,,887777 111133,,993388 Employment 4 Nonagricultural industries2 97,030 96,125 97,450 99,585 99,918 100,496 100,859 101,009 101,899 102,344 102,050 5 Agriculture 3,368 3,401 3,383 33,,335566 3,271 33,,339955 3,281 3,393 3,389 33,,440033 33,,334455 Unemployment 6 Number 8,273 10,678 10,717 9,195 9,026 8,801 8,772 8,843 8,514 8,130 8,543 7 Rate (percent of civilian labor force) ... 7.6 9.7 9.6 8.2 8.0 7.8 7.8 7.8 7.5 7.1 7.5 8 Not in labor force 61,460 62,067 62,665 62,985 63,318 62,986 62,912 62,724 62,320 62,407 62,502 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 91,156 89,596 89,986 92,026 92,391 92,846 93,058 93,449 93,768' 94,076' 94,378 10 Manufacturing 20,170 18,853 18,678 19,143 19,254 19,373 19,466 19,530 19,570' 19,639' 19,744 11 Mining 1,132 1,143 1,021 969 975 978 978 984 995' 1,002' 1,002 12 Contract construction 4,176 3,911 3,949 4,086 4,154 4,226 4,151 4,246 4,286' 4,348' 4,380 13 Transportation and public utilities 5,157 5,081 4,943 5,055 5,095 5,105 5,112 5,129 5,144' 5,151' 5,179 14 Trade 20,551 20,401 20,508 21,228 21,320 21,418 21,493 21,568 21,658' 21,735' 21,775 15 Finance 5,301 5,340 5,456 5,546 5,573 5,593 5,613 5,640 5,662' 5,676' 5,677 16 Service 20,547 19,064 19,685 20,130 20,162 20,278 20,378 20,449 20,549' 20,652' 20,692 17 Government 16,024 15,803 15,747 15,869 15,858 15,875 15,873 15,903 15,904' 15,873' 15,931 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 • August 1984 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 1983 1984 pro- 1983 por- avg. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May June? Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 147.6 149.7 151.8 153.8 155.0 155.3 156.2 158.5 160.0 160.8 162.1 162.7 164.1 2 Products 60.71 149.2 150.9 153.2 154.9 155.6 155.8 157.4 159.7 160.4 161.1 162.5 163.3 164.6 3 Final products 47.82 147.1 149.0 150.7 152.1 152.7 153.2 155.2 157.5 158.0 158.6 160.2 161.1 162.7 4 Consumer goods 27.68 151.7 154.8 156.3 157.4 156.9 156.1 157.7 159.5 159.4 160.2 161.4 161.7 162.9 5 Equipment 20.14 140.8 141.0 143.1 144.9 147.0 149.1 151.8 154.9 156.1 156.4 158.5 160.4 162.4 6 Intermediate products 12.89 156.6 158.1 162.2 165.3 166.5 165.5 165.4 167.8 169.0 170.2 171.0 171.4 171.8 7 Materials 39.29 145.2 147.8 149.7 152.3 154.0 154.5 154.5 156.6 159.4 160.4 161.5 161.9 163.3 Consumer goods 8 Durable consumer goods 7.89 147.5 152.9 154.2 157.4 156.7 155.9 158.6 163.4 162.5 163.1 162.2 161.4 162.9 9 Automotive products 2.83 158.2 167.0 168.1 172.9 171.3 171.5 178.4 184.5 182.1 184.1 180.9 179.8 182.9 10 Autos and utility vehicles 2.03 134.0 145.4 147.0 153.1 149.2 149.2 157.8 163.3 162.2 164.1 158.4 155.9 158.7 11 Autos 1.90 117.4 129.8 132.0 135.0 129.6 129.4 137,4 140.7 140.4 142.4 134.5 132.9 136.2 12 Auto parts and allied goods .80 219.6 221.9 221.8 223.1 227.4 228.2 230.7 238.4 232.6 234.7 238.0 240.6 244.2 13 Home goods 5.06 141.4 144.9 146.4 148.7 148.4 147.2 147.5 151.5 151.5 151.3 151.7 151.0 151.7 14 Appliances, A/C, and TV 1.40 116.4 116.2 121.2 125.2 129.2 127.0 126.3 136.4 135.1 134.4 136.1 133.4 133.0 15 Appliances and TV 1.33 120.1 119.7 125.0 129.7 133.3 131.3 130.2 140.0 138.6 138.0 138.8 136.2 136.1 16 Carpeting and furniture 1.07 178.1 187.3 187.5 186.3 185.5 182.7 184.0 183.1 178.7 180.2 181.0 180.1 181.0 17 Miscellaneous home goods 2:59 139.9 143.0 143.2 145.9 143.6 143.4 143.9 146.7 149.1 148.5 148.0 148.6 149.7 18 Nondurable consumer goods 19.79 153.4 155.6 157.1 157.5 157.1 156.1 157.3 157.9 158.2 159.1 161.1 161.8 162.9 19 Clothing 4.29 20 Consumer staples 15.50 163.7 166.1 168.0 168.0 167.2 165.4 166.0 166.5 166.9 168.0 170.2 171.4 173.1 21 Consumer foods and tobacco 8.33 153.5 156.6 156.3 154.9 156.0 154.5 155.4 156.5 156.8 157.6 160.4 161.3 22 Nonfood staples 7.17 175.4 177.2 181.6 183.2 180.3 178.1 178.3 178.2 178.7 180.1 181.6 183.2 186.3 23 Consumer chemical products .... 2.63 231.0 233.8 239.7 241.5 238.7 232.4 229.9 231.6 231.9 231.3 233.4 233.9 240.9 24 Consumer paper products 1.92 132.7 132.6 137.4 138.2 137.6 136.6 137.2 138.8 140.3 141.8 144.0 145.6 147.2 25 Consumer energy products 2.62 150.9 153.2 155.7 157.7 153.0 154.1 156.5 153.4 153.3 156.8 157.1 159.8 160.3 2266 11..4455 117733..44 117733..22 117799..99 118822..88 117744..55 117755..88 118855..22 118800..00 117722..88 117777..77 117777..44 118811..11 Equipment 27 Business 12.63 153.3 153.3 156.6 158.8 161.3 164.1 167.3 170.7 171.9 172.1 173.5 176.5 179.6 28 Industrial 6.77 120.4 119.9 124.3 125.6 126.6 128.6 130.8 133.7 134.6 134.8 135.9 138.5 140.2 29 Building and mining 1.44 159.3 154.4 159.2 160.8 166.9 175.8 185.3 185.1 182.0 175.2 173.6 182.9 186.5 30 Manufacturing 3.85 107.1 108.9 113.3 115.0 114.6 114.3 115.1 119.7 120.9 124.2 126.2 127.4 128.6 31 Power 1.47 117.1 114.6 119.0 118.8 118.5 119.4 118.4 120.0 123.8 122.7 124.1 124.1 125.2 32 Commercial transit, farm 5.86 191.3 191.9 194.0 196.7 201.3 205.1 209.6 213.3 215.1 215.3 217.0 220.5 225.2 33 Commercial 3.26 273.2 276.0 277.4 281.2 288.1 292.5 298.9 303.2 305.9 306.9 309.6 315.5 322.0 34 Transit 1.93 95.2 92.0 95.9 97.6 100.0 103.2 106.0 110.1 110.1 109.2 108.9 109.7 113.1 35 Farm .67 69.5 70.8 70.8 71.0 70.9 73.5 73.5 73.6 75.7 75.0 78.0 77.1 76.8 36 Defense and space 7.51 119.9 120.4 120.2 121.8 122.9 124.0 125.7 128.3 129.5 130.1 133.2 133.2 133.4 Intermediate products 37 Construction supplies 6.42 142.5 145.8 149.0 151.1 152.3 151.6 151.5 155.5 156.6 159.1 159.6 159.5 159.2 38 Business supplies 6.47 170.7 170.4 175.3 179.3 180.6 179.4 179.3 180.1 181.3 181.3 182.3 183.1 184.3 39 Commercial energy products 1.14 184.3 185.2 186.9 190.2 187.0 187.6 188.0 192.1 191.6 187.0 190.0 190.9 191.7 Materials 40 Durable goods materials 20.35 138.6 141.1 144.2 147.2 149.4 150.3 151.3 154.6 158.6 159.5 161.3 161.5 162.7 41 Durable consumer parts 4.58 113.6 115.6 119.9 123.1 124.9 125.0 127.9 131.6 133.1 133.0 133.2 132.6 133.7 42 Equipment parts 5.44 176.4 180.8 183.6 186.0 188.3 192.5 193.4 198.2 204.0 206.7 210.9 210.6 214.1 43 Durable materials n.e.c 10.34 129.9 131.5 134.2 137.4 139.8 139.3 139.5 141.8 146.0 146.3 147.7 148.5 148.5 44 Basic metal materials 5.57 90.2 90.8 93.1 94.5 98.0 97.1 96.9 97.7 103.0 103.0 105.7 104.7 103.1 45 Nondurable goods materials 10.47 174.5 177.0 178.0 183.4 185.3 184.8 180.3 181.2 184.1 185.9 185.7 186.7 188.2 46 Textile, paper, and chemical materials 7.62 182.6 186.1 186.4 192.0 195.4 194.7 189.6 190.5 193.9 195.3 195.0 196.1 198.2 47 Textile materials 1.85 116.2 119.0 121.5 123.1 124.0 121.9 121.3 119.9 119.9 120.6 118.9 121.2 120.4 48 Paper materials 1.62 158.2 161.1 161.8 165.4 166.3 169.8 166.0 167.0 166.8 163.5 166.7 165.8 167.6 49 Chemical materials 4.15 221.7 225.9 225.1 233.1 238.7 237.0 229.3 231.3 237.6 241.1 240.0 241.3 244.9 50 Containers, nondurable 1.70 167.9 166.5 170.6 179.1 175.9 176.6 173.0 173.5 173.0 176.0 175.7 176.1 175.8 51 Nondurable materials n.e.c 1.14 130.5 131.3 133.0 132.6 131.9 130.6 129.5 130.5 135.2 137.7 138.6 140.1 139.6 52 Energy materials 8.48 124.8 127.7 128.0 126.4 126.3 127.1 130.0 131.3 131.0 131.3 132.1 132.1 133.9 53 Primary energy 4.65 114.7 115.4 113.9 112.8 114.1 115.5 117.6 119.3 121.3 119.6 119.5 120.3 121.7 54 Converted fuel materials 3.82 137.0 142.7 145.2 142.8 141.2 141.1 145.1 145.8 142.8 145.4 147.3 146.5 148.8 Supplementary groups 55 Home goods and clothing 9.35 129.9 132.3 133.3 113355..22 113355..55 135.9 137.6 140.1 140.3 140.1 141.0 140.0 139.9 56 Energy, total 12.23 135.9 138.5 139.4 139.0 137.7 138.5 141.1 141.6 141.4 141.9 142.8 143.5 144.9 57 Products 3.76 161.0 162.9 165.2 167.5 163.3 164.3 166.0 165.1 164.9 166.0 167.1 169.3 169.8 58 Materials 8.48 124.8 127.7 128.0 126.4 126.3 127.1 130.0 131.3 131.0 131.3 132.1 132.1 133.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A45 2.13 Continued 1967 1983 1984 SIC pro- 1983 GGrroouuppiinngg code por- avg. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May June? July Index (1967 = 100) MAJOR INDUSTRY 12.05 142.9 143.8 146.0 146.5 145.8 147.2 151.5 151.4 148.9 150.4 151.3 152.4 154.5 155.3 6.36 116.6 115.0 116.1 117.1 118.3 121.1 123.7 124.8 124.1 123.8 123.3 125.4 127.1 129.9 3 Utilities 5.69 172.4 176.0 179.3 179.3 176.5 176.3 182.5 181.0 176.5 180.0 182.7 182.5 185.1 183.8 3.88 196.0 200.9 205.4 204.5 200.7 200.2 208.0 206.8 200.0 204.6 207.7 207.1 210.6 208.5 87.95 148.2 150.6 152.8 155.1 156.2 156.4 156.8 159.5 161.4 162.1 163.4 164.2 165.3 166.9 35.97 168.1 170.6 172.9 174.6 175.6 174.8 173.9 175.2 177.2 177.6 179.1 179.7 181.1 181.8 5511..9988 113344..55 113366..88 113388..88 141.6 142.8 143.6 145.0 148.6 150.5 151.4 152.6 153.4 154.4 156.7 Mining 8 Metal 10 .51 80.9 82.5 80.9 78.7 81.0 84.6 82.3 89.4 97.4 100.0 98.5 9988..55 98.3 9 Coal 11.12 .69 136.3 139.9 141.2 140.5 142.7 144.8 145.2 151.5 163.2 164.0 151.4 153.4 161.0 177.0 10 Oil and gas extraction 13 4.40 116.6 113.9 114.7 116.3 117.3 119.8 123.4 123.1 119.6 118.2 118.8 120.9 121.8 122.9 11 Stone and earth minerals 14 .75 122.8 121.2 125.0 126.5 127.4 132.2 133.9 134.8 133.0 135.8 140.4 144.5 146.2 Nondurable manufactures 12 Foods 20 8.75 156.4 159.9 159.3 158.2 157.6 157.1 157.7 159.4 160.0 161.2 116633..11 116644..66 21 .67 112.1 112.9 117.1 112.7 109.1 109.5 112.3 116.4 110.9 111.8 113.3 112.8 22 2.68 114400..88 114466..77 114477..44 114488..77 114488..77 114455..88 114455..00 143.9 142.3 143.5 140.0 140.5 141.1 23 3 31 16 Paper and products 26 3.21 164.3 165.1 168.6 170.4 171.5 172.1 170.1 172.3 176.6 173.8 172.4 170.9 173.0 173.7 17 Printing and publishing 27 4.72 152.5 152.0 157.8 161.7 162.7 162.0 161.7 163.4 164.8 165.2 166.3 167.5 168.3 168.9 28 7 74 215.0 218.3 220.3 224.1 228.4 225.6 221.1 221.5 224.8 225.0 228.3 227.9 232.2 19 Petroleum products 29 1.79 120.3 124.3 123.2 125.1 123.6 125.4 114.4 118.8 127.6 127.0 126.8 127.9 127.6 125.0 20 Rubber and plastic products 30 2.24 291.9 296.1 306.9 310.9 310.8 309.1 314.4 317.2 318.5 323.8 328.0 334.1 335.9 21 Leather and products 31 .86 61.9 62.3 64.4 64.2 64.0 63.2 66.0 61.4 63.9 63.9 63.5 60.8 63.3 Durable manufactures 22 Ordnance, private and government ... 19.91 3.64 95.4 95.2 96.8 98.0 98.8 99.3 99.8 99.7 99.6 100.6 101.4 101.4 101.8 110033..00 24 1.64 137.2 141.3 141.6 142.3 141.7 141.0 143.8 146.0 145.6 149.3 151.2 146.3 147.4 24 Furniture and fixtures 25 1.37 170.5 175.2 179.0 180.7 181.0 177.5 177.9 183.8 185.6 184.6 186.6 190.5 193.9 32 2.74 143.4 145.8 147.9 151.7 151.9 152.7 153.8 157.8 160.4 160.2 160.0 161.6 159.7 26 Primary metals 33 6.57 85.4 85.5 87.5 90.6 95.3 92.2 90.4 93.2 98.4 97.5 99.3 98.3 95.9 97.4 331.2 4.21 71.5 71.8 75.1 78.2 84.3 79.2 74.1 80.7 86.0 84.4 84.0 83.5 81.4 28 Fabricated metal products 34 5.93 120.2 122.7 126.0 127.4 26.9 128.5 129.2 131.7 132.8 134.9 135.5 136.5 137.2 138.5 29 Nonelectrical machinery 35 9.15 150.6 154.2 157.3 158.3 159.2 161.8 164.3 169.5 170.9 171.9 174.9 178.8 182.2 183.0 30 Electrical machinery 36 8.05 185.5 188.3 189.2 195.8 198.4 200.1 201.5 206.2 209.9 212.0 214.6 214.4 215.8 222.0 31 Transportation equipment 37 9.27 117.8 119.7 121.1 124.7 125.5 127.3 130.8 134.9 135.2 135.8 134.5 135.0 137.1 139.4 32 Motor vehicles and parts 371 4.50 137.1 142.3 144.3 150.9 150.9 152.9 158.9 166.3 164.4 165.8 161.9 163.0 165.0 167.5 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 99.6 98.5 99.2 100.0 101.6 103.2 104.3 105.3 107.7 107.5 108.8 108.6 110.9 113.0 34 Instruments 38 2.11 158.7 159.3 161.6 163.6 163.0 163.0 164.6 167.8 168.6 169.7 171.0 171.8 174.3 175.7 35 Miscellaneous manufactures 39 1.51 146.2 153.7 153.1 151.7 149.1 148.9 149.3 151.1 152.0 152.3 152.1 152.0 148.9 151.3 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 612.6 620.5 626.6 637.0 637.8 638.4 645.4 655.1 656.9 661.8 661.1 665.6 37 Final 390.9 472.6 478.2 481.8 489.9 490.7 490.8 497.8 505.3 505.0 509.6 509.0 514.2 38 Consumer goods . 277.5 328.7 333.7 336.7 341.6 340.2 338.3 341.9 345.3 345.3 347.7 347.8 349.8 39 Equipment 113.4 144.0 144.5 145.1 148.4 150.5 152.5 155.9 160.0 159.7 161.9 161.2 164.4 40 Intermediate 116.6 140.0 142.3 144.8 147.1 147.1 147.6 147.6 149.8 151.9 152.2 152.2 151.4 1. 1972 dollar value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • August 1984 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1983 1984 IItteemm 11998811 11998822 Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr/ May' June Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 986 1,001 1,605 1,540 1,650 1,649 1,602 1,799 1,902 1,727 1,758 1,745 1,776 2 1-family 564 546 902 864 905 919 913 989 1,083 974 957 913 906 3 2-or-more-family 421 454 703 676 745 730 689 810 819 753 801 832 870 4 Started 1,084 1,062 1,703 1,679 1,672 1,730 1,694 1,980 2,262 1,662 2,015 1,805 1,900 5 1-family 705 663 1,068 1,038 1,017 1,074 1,021 1,301 1,463 1,071 1,1% 1,151 1,068 6 2-or-more-family 379 400 636 641 655 656 673 679 799 591 819 654 832 7 8 Un 1 d e f r a m c i o l n y struction, end of period1 6 3 8 8 2 2 4 72 0 0 0 1,0 5 0 2 3 4 5 99 4 1 5 9 5 9 4 4 2 1,0 5 1 4 1 3 1,0 5 2 4 0 2 1, 5 0 5 3 2 2 1,0 5 3 5 3 7 1,0 5 6 7 5 1 1,0 5 9 8 5 4 1,1 5 0 9 8 6 i| 9 2-or-more-family 301 320 479 446 452 468 478 480 477 494 511 513 1 10 Completed 1,266 1,006 1,391 1,512 1,567 1,445 1,489 1,606 1,565 1,590 1,631 1,705 n.a. 11 1-family 818 631 924 1,006 1,028 994 986 1,014 1,034 1,031 %5 1,069 1 12 2-or-more-family 447 374 466 506 539 451 503 592 531 559 666 636 1 13 Mobile homes shipped 241 24 (y 295 305 308 313 310 314 293 287 287 295 1 Merchant builder activity in 1-family units 14 Number sold 436 413 622 597 624 636 755 681 712 682 645 616 620 15 Number for sale, end of period1 278 255 303 299 301 304 300 302 303 320 329 335 341 Price (thousands of dollars)2 Median 16 Units sold 68.8 69.3 75.5 81.0 75.9 75.9 75.9 76.2 79.2 78.4 79.6 82.1 78.9 17 Units sold 83.1 83.8 89.9 97.8 89.5 91.4 91.7 92.2 94.4 97.7 96.2 103.6 100.0 EXISTING UNITS (1-family) 18 Number sold 2,418 1,991 2,719 2,770 2,720 2,700 2,850 2,890 2,910 3,020 3,090 3,060 2,990 Price of units sold (thousands of dollars)2 19 Median 66.1 67.7 69.8 69.9 69.8 70.4 69.9 71.3 7711..88 7722..22 7722..55 7733..11 7744..22 20 Average 78.0 80.4 82.5 82.8 83.0 83.4 82.9 84.8 84.9 85.1 86.1 86.2 88.3 Value of new construction3 (millions of dollars)' CONSTRUCTION 21 Total put in place 239,112 230,068 262,167 281,725 267,930 267,017 263,867 280,897 300,355 309,744 305,262 311,304 310,631 22 Private 185,761 179,090 211,369 229,616 219,164 217,444 . 213,272 229,972 248,104 254,958 250,6% 255,800 253,607 23 Residential 86,564 74,808 111,727 128,573 118,605 113,455 109,706. 121,931 137,403 141,087 133,694 134,235 131,176 24 Nonresidential, total 99,197 104,282 99,642 101,043 100,559 103,989 103,566' 108,041 110,701 113,871 117,002 121,565 122,431 Buildings 25 Industrial 17,031 17,346 12,863 12,617 10,363 11,632 12,208 12,872 13,969 14,363 13,734 15,092 15,006 26 Commercial 34,243 37,281 35,787 37,173 37,441 38,132 37,364 41,057 42,076 45,280 47,501 49,564 50,189 27 Other 9,543 10,507 11,660 12,144 12,243 12,028 11,854 12,742 12,999 13,190 13,384 13,899 13,713 28 Public utilities and other 38,380 39,148 39,332 39,109 40,512 42,197 42,140 41,370 41,657 41,038 42,383 43,010 43,523 29 Public 53,346 50,977 50,798 52,109 48,766 49,573 50,5% 50,925 52,251 54,786 54,566 55,504 57,023 30 Military 1,966 2,205 2,544 2,630 2,590 3,064 2,898 2,608 2,474 2,872 3,020 2,867 2,961 31 Highway 13,599 13,428 14,225 15,092 14,397 14,059 14,666 14,240 14,993 16,205 16,734 16,899 16,954 32 Conservation and development 5,300 5,029 4,822 4,995 4,041 3,916 4,984 4,319 4,608 4,531 4,516 4,357 4,487 33 Other 32,481 30,315 29,207 29,392 27,738 28,534 28,048 29,758 30,176 31,178 30,2% 31,381 32,621 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 n t g h e s f e r a om rli e 1 r 2 Change ( a f t r o a m nn 3 u a m l o r n at t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm JJJuuunnneee 1983 1984 1984 111999888444 11998833 11998844 (((111999666777 JJuunnee JJuunnee === 111000000)))''' Sept. Dec. Mar. June Feb. Mar. Apr. May June CONSUMER PRICES2 1 All items 2.6 4.2 4.5 4.0 5.0 3.3 .4 .2 .5 .2 .2 310.7 2 Food 1.5 3.4 1.1 4.3 9.0 -.7 .7 -.1 .0 -.3 .1 302.0 3 Energy items 2.1 .3 3.4 -1.7 -1.4 .8 .2 -.2 .7 .2 -.7 428.5 4 All items less food and energy 3.0 5.1 5.9 4.9 5.1 4.7 .3 .4 .5 .3 .3 300.2 5 Commodities 4.1 4.7 6.8 4.6 3.4 3.7 .2 .4 .6 .2 .1 252.8 6 Services 2.0 5.4 5.2 5.3 5.9 5.3 .4 .4 .5 .4 .4 354.7 PRODUCER PRICES 7 Finished goods 1.8 2.2 2.0 1.1 6.0 -.3 .4 .5 .0 .0 .0 291.2 8 Consumer foods -.8 3.7 2.5 5.8 17.4 -8.9 .6 .8 -.6 -1.2 -.6 270.8 9 Consumer energy .2 -2.9 -1.3 -10.4 -7.2 8.5 .y -1.0' .7 1.5 -.2 768.5 10 Other consumer goods 3.2 2.5 2.7 1.5 4.7 1.1 .2' .8' -.1 .1 .3 245.5 11 Capital equipment 2.7 2.6 2.1 1.8 4.3 2.2 .4' .4' .3 .2 .0 294.2 12 Intermediate materials3 .5 3.2 4.0 2.5 2.6 3.6 .y .4' .1 .3 .5 326.5 13 Excluding energy 1.4 3.3 3.6 4.1 3.5 2.1 .y .5' .1 .1 .3 304.1 Crude materials 14 Foods -3.0 3.4 15.6 12.1 13.7 -22.1 -3.1' 4.3' -1.2 -2.7 -2.3 260.7 15 Energy -.1 -.4 -1.7 -2.3 -1.3 3.8 .1 -.7' .4 .4 .2 788.1 16 Other 6.6 9.1 16.6 2.4 -9.2 30.0 .8 .2 2.9 2.6 1.2 272.3 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds, rental equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • August 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'' Q2 Q3 Q4 Ql' Q2 GROSS NATIONAL PRODUCT 1 Total 2,957.8 3,069.2 3,304.8 3,267.0 3,346.6 3,431.7 3,553.3 3,646.4 By source 2 Personal consumption expenditures 1,849.1 1,984.9 2,155.9 2,141.6 2,181.4 2,230.2 2,276.5 2,326.7 3 Durable goods 235.4 245.1 279.8 276.1 284.1 299.8 310.9 318.7 4 Nondurable goods 730.7 757.5 801.7 796.9 811.7 823.0 841.3 857.8 5 Services 883.0 982.2 1,074.4 1,068.6 1,085.7 1,107.5 1,124.4 1,150.2 6 Gross private domestic investment 484.2 414.9 471.6 449.6 491.9 540.0 623.8 631.5 7 Fixed investment 458.1 441.0 485.1 469.0 496.2 527.3 550.0 577.7 8 Nonresidential 353.9 349.6 352.9 339.3 353.9 383.9 398.8 421.2 9 Structures 135.3 142.1 129.7 125.6 126.2 136.6 142.2 152.1 10 Producers' durable equipment 218.6 207.5 223.2 213.6 227.8 247.3 256.7 269.1 11 Residential structures 104.2 91.4 132.2 129.8 142.3 143.4 151.2 156.6 12 Nonfarm 99.8 86.6 127.6 125.3 137.7 138.7 146.4 151.4 13 Change in business inventories 26.0 -26.1 -13.5 -19.4 -4.3 12.7 73.8 53.8 14 Nonfarm 18.2 -24.0 -3.1 -5.4 11.6 14.1 60.6 51.2 15 Net exports of goods and services 28.0 19.0 -8.3 -6.5 -16.4 -29.8 -51.5 -58.0 lb Exports 369.9 348.4 336.2 328.1 342.0 346.1 358.9 371.4 17 Imports 341.9 329.4 344.4 334.5 358.4 375.9 410.4 429.4 18 Government purchases of goods and services 596.5 650.5 685.5 682.2 689.8 691.4 704.4 746.1 19 Federal 228.9 259.0 269.7 270.5 269.2 266.3 267.6 299.3 20 State and local 367.6 391.5 415.8 411.6 420.6 425.1 436.8 446.7 By major type of product 21 Final sales, total 2,931.7 3,095.4 3,318.3 3,286.4 3,350.9 3,419.0 3,479.5 3,592.5 22 Goods 1,294.8 1,276.8 1,355.7 1,337.2 1,373.1 1,423.9 1,498.0 1,540.5 23 Durable 530.4 499.9 555.3 541.1 576.9 607.4 632.3 632.3 24 Nondurable 764.4 776.9 800.4 796.1 796.2 816.5 865.7 908.2 25 Services 1,373.0 1,510.8 1,639.3 1,627.2 1,654.5 1,681.3 1,713.7 1,745.6 26 Structures 289.9 281.7 309.8 302.6 319.0 326.5 341.6 360.2 27 Change in business inventories 26.0 -26.1 -13.5 -19.4 -4.3 12.7 73.8 53.8 28 Durable goods 7.3 -18.0 -2.1 -5.5 12.5 14.5 34.9 11.3 29 Nondurable goods 18.8 -8.1 -11.3 -13.9 -16.8 -1.7 38.9 42.5 30 MEMO: Total GNP in 1972 dollars 1,512.2 1,480.0 1,534.7 1,524.8 1,550.2 1,572.7 1,610.9 1,640.2 NATIONAL INCOME 31 Total 2,363.8 2,446.8 2,646.7 2,609.0 2,684.4 2,766.5 2,873.5 n.a. 32 Compensation of employees 1,765.4 1,864.2 1,985.0 1,962.4 2,000.7 2,055.4 2,113.4 2,157.9 33 Wages and salaries 1,493.2 1,568.7 1,658.8 1,640.8 1,670.8 1,715.4 1,755.9 1,792.2 34 Government and government enterprises 284.6 306.6 328.2 325.0 330.6 335.0 342.9 347.5 35 Other 1,208.6 1,262.2 1,331.1 1,315.9 1,340.3 1,380.4 1,413.0 1,444.7 36 Supplement to wages and salaries 272.2 295.5 326.2 321.6 329.9 340.0 357.4 365.7 37 Employer contributions for social insurance 132.3 140.0 153.1 151.7 153.9 157.9 169.4 172.2 38 Other labor income 140.0 155.5 173.1 169.9 175.9 182.1 188.1 193.5 39 Proprietors' income1 125.1 111.1 121.7 116.9 123.3 131.9 154.9 152.9 40 Business and professional1 93.6 89.2 107.9 106.8 112.1 114.6 122.5 126.8 41 Farm1 31.5 21.8 13.8 10.1 11.2 17.3 32.5 26.1 42 Rental income of persons2 42.3 51.5 58.3 59.0 56.2 60.4 61.0 62.4 43 Corporate profits1 189.9 159.1 225.2 216.7 245.0 260.0 277.4 n.a. 44 Profits before tax3 221.2 165.5 203.2 198.2 227.4 225.5 243.3 n.a. 45 Inventory valuation adjustment -23.6 -9.5 -11.2 -12.1 -19.3 -9.2 -13.5 -7.9 46 Capital consumption adjustment -7.6 3.1 33.2 30.6 36.9 43.6 47.6 52.9 47 Net interest 241.0 260.9 256.6 254.2 259.2 258.9 266.8 280.6 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 Q2 Q3 Q4 QK PERSONAL INCOME AND SAVING 1 Total personal income 2,429.5 2.584.6 2,744.2 2,714.4 2,763.3 2,836.5 2,920.5 2 Wage and salary disbursements 1,493.1 1.568.7 1,659.2 1,642.1 1,671.3 1.715.4 1,755.7 3 Commodity-producing industries 509.3 509.3 519.3 511.4 523.5 539.0 555.9 4 Manufacturing 385.6 382.9 395.2 389.3 399.1 411.9 424.6 5 Distributive industries 361.6 378.6 398.6 395.4 399.7 413.2 419.2 6 Service industries 337.7 374.3 413.1 409.1 417.0 428.2 437.9 7 Government and government enterprises 284.6 306.6 328.2 326.2 331.0 335.0 342.8 8 Other labor income 140.0 155.5 173.1 169.9 175.9 182.1 188.1 9 Proprietors' income1 125.1 111.1 121.7 116.9 123.3 131.9 154.9 10 Business and professional1 93.6 89.2 107.9 106.8 112.1 114.6 122.5 11 Farm' 31.5 21.8 13.8 10.1 11.2 17.3 32.5 12 Rental income of persons2 42.3 51.5 58.3 59.0 56.2 60.4 61.0 13 Dividends 64.3 66.5 70.3 69.1 70.7 72.8 75.0 14 Personal interest income 331.8 366.6 376.3 368.8 382.3 388.2 403.9 15 Transfer payments 337.2 376.0 405.0 407.3 403.9 408.8 411.3 16 Old-age survivors, disability, and health insurance benefits.. 182.0 204.5 221.6 219.8 222.4 227.7 232.1 17 LESS: Personal contributions for social insurance 104.5 111.4 119.6 118.5 120.4 123.2 129.6 18 EQUALS: Personal income 2,429.5 2,584.6 2,744.2 2,714.4 2.763.3 2.836.5 2.920.5 19 LESS: Personal tax and nontax payments 387.7 404.1 404.2 411.6 395.8 407.9 418.3 20 EQUALS: Disposable personal income 2,041.7 2,180.5 2,340.1 2,302.9 2.367.4 2.428.6 2,502.2 21 LESS: Personal outlays 1,904.4 2,044.5 2,222.0 2,206.1 2,248.4 2,300.0 2.349.6 22 EQUALS: Personal saving 137.4 136.0 118.1 96.7 119.0 128.7 152.5 MEMO Per capita (1972 dollars) 23 Gross national product 6,572.8 6,369.6 6,543.4 6,509.8 6,601.9 6,681.4 6.829.4 24 Personal consumption expenditures 4,131.4 4,145.9 4,302.8 4,295.8 4,325.2 4,386.0 4.426.5 25 Disposable personal income 4,561.0 4,555.0 4,670.0 4,619.0 4,694.0 4,776.0 4,865.0 26 Saving rate (percent) 6.7 6.2 5.0 4.2 5.0 5.3 6.1 GROSS SAVING 27 Gross saving 484.3 408.8 437.2 414.7 455.2 485.7 543.9 28 Gross private saving 509.9 524.0 571.7 538.1 588.6 615.0 651.3 29 Personal saving 137.4 136.0 118.1 96.7 119.0 128.7 152.5 30 Undistributed corporate profits' 42.3 29.2 76.5 70.2 86.9 100.0 107.0 31 Corporate inventory valuation adjustment -23.6 -9.5 -11.2 -12.1 -19.3 -9.2 -13.5 Capital consumption allowances 32 Corporate 202.6 221.8 231.2 228.2 233.4 236.4 239.9 33 Noncorporate 127.6 137.1 145.9 143.0 149.4 150.0 151.8 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -26.7 -115.2 -134.5 -123.4 -133.5 -129.3 -107.4 36 Federal -64.3 -148.2 -178.6 -167.3 -180.9 -180.5 -161.3 37 State and local 37.6 32.9 44.1 43.9 47.4 51.2 53.9 38 Capital grants received by the United States, net 1.1 .0 .0 .0 .0 .0 39 Gross investment 490.0 408.3 437.7 418.7 450.3 480.9 546.1 40 Gross private domestic 484,2 414.9 471.6 449.6 491.9 540.0 623.8 41 Net foreign 5.8 -6.6 -33.9 -30.9 -41.5 -59.1 -77.7 42 Statistical discrepancy 5,6 -4.8 2.2 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • August 1984 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1983 1984 IItteemm ccrreeddiittss oorr ddeebbiittss 11998811 11998822 Ql Q2 Q3 Q4 Q1P 1 Balance on current account 6,294 -9,199 -41,563 -2,943 -9,560 -11,846 -17,213 -19,408 -2,332 -8,769 -14,498 -15,964 -18,360 3 Merchandise trade balance2 -28,001 -36,469 -61,055 -9,277 -14,870 -17,501 -19,407 -25,641 4 Merchandise exports 237,085 211,198 200,257 49,246 48,745 50,437 51,829 54,164 5 Merchandise imports -265,086 -247,667 -261,312 -58,523 -63,615 -67,938 -71,236 -79,805 6 Military transactions, net -1,116 195 515 790 53 -55 -273 -284 7 Investment income, net3 34,053 27,802 23,508 5,238 5,978 7,172 5,119 7,619 8 Other service transactions, net 8,191 7,331 4,121 1,879 1,127 681 434 1,050 9 Remittances, pensions, and other transfers -2,382 -2,635 -2,590 -599 -638 -665 -688 -723 10 U.S. government grants (excluding military) -4,451 -5,423 -6,060 -974 -1,210 -1,478 -2,398 -1,429 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,107 -6,143 -5,013 -1,130 -1,251 -1,204 -1,429 -1,989 12 Change in U.S. official reserve assets (increase, -) -5,175 -4,965 -1,196 -787 16 529 -953 -657 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,823 -1,371 -66 -98 -303 -209 545 -226 15 Reserve position in International Monetary Fund -2,491 -2,552 -4,434 -2,139 -212 -88 -1,996 -200 16 Foreign currencies -861 -1,041 3,304 1,450 531 826 498 -231 17 Change in U.S. private assets abroad (increase, -)3 -100,694 -107,790 -43,281 -22,447 175 -8,548 -12,461 -3,281 18 Bank-reported claims -84,175 -111,070 -25,391 -18,175 3,894 -2,871 -8,239 -334 19 Nonbank-reported claims -1,181 6,626 -5,333 -3,199 -230 -233 -1,671 n.a. 20 U.S. purchase of foreign securities, net -5,714 -8,102 -7,676 -1,866 -3,257 -1,571 -983 244 21 U.S. direct investments abroad, net3 -9,624 4,756 -4,881 793 -232 -3,873 -1,568 -3,191 22 Change in foreign official assets in the United States (increase, +) 5,003 3,318 5,339 -252 1,739 -2,703 6,555 -2,859 23 U.S. Treasury securities 5,019 5,728 6,989 3,012 1,985 -611 2,603 -269 24 Other U.S. government obligations 1,289 -694 -487 -371 -170 -363 417 -36 25 Other U.S. government liabilities4 -300 382 199 -533 434 137 161 185 26 Other U.S. liabilities reported by U.S. banks -3,670 -1,747 433 -1,978 316 -1,403 3,498 -2,140 27 Other foreign official assets5 2,665 -351 -1,795 -382 -826 -463 -124 -599 28 Change in foreign private assets in the United States (increase, +)3 76,310 91,863 76,383 16,139 10,714 22,281 27,249 14,662 29 U.S. bank-reported liabilities 42,128 65,922 49,059 10,244 1,698 14,792 22,325 9,763 30 U.S. nonbank-reported liabilities 917 -2,383 -1,318 -2,337 -64 1,311 -228 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,946 7,062 8,731 2,924 3,139 995 1,673 1,490 32 Foreign purchases of other U.S. securities, net 7,171 6,396 8,612 3,003 2,614 1,861 1,134 1,547 33 Foreign direct investments in the United States, net3 23,148 14,865 11,299 2,305 3,327 3,322 2,345 1,862 34 Allocation of SDRs 1,093 0 0 0 0 0 0 0 35 Discrepancy 22,275 32,916 9,331 11,420 -1,833 1,491 -1,748 13,532 -579 439 -2,518 2,657 -172 37 Statistical discrepancy in recorded data before seasonal adjustment 22,275 32,916 9,331 11,999 -2,272 4,009 -4,405 13,704 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -5,175 -4,965 -1,196 -787 16 529 -953 -657 39 Foreign official assets in the United States (increase, +) 5,303 2,936 5,140 281 1,305 -2,840 6,394 -3,044 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 13,581 7,291 -8,639 -1,466 -3,482 -2,051 -1,640 -2,525 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 675 593 205 42 30 49 84 27 1. Seasonal factors are no longer calculated for lines 6, 10, 12-16, 18-20,22-34, 4. Primarily associated with military sales contracts and other transactions and 38-41. arranged with or through foreign official agencies. 2. Data are on an international accounts (IA) basis. Differs from the Census 5. Consists of investments in U.S. corporate stocks and in debt securities of basis data, shown in table 3.11, for reasons of coverage and timing; military private corporations and state and local governments. exports are excluded from merchandise data and are included in line 6. 3. Includes reinvested earnings. 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 Dec. Jan. Feb. Mar. Apr. May June 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 233,677 212,193 200,486 17,298 18,326 17,212 17,727 17,521 17,950 17,633 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 261,305 243,952 258,048 22,976 26,586 26,147 26,771 28,368 25,569 25,356 3 Trade balance -27,628 -31,759 -57,562 -5,678 -8,260 -8,935 -9,044 -10,846 -7,619 -7,723 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 1984 TTyyppee 11998811 11998822 11998833 Jan. Feb. Mar. Apr. May June July 1 Total 30,075 33,958 33,747 33,887 34,820 34,975 34,585 34,713 34,547 34,392 2 Gold stock, including Exchange Stabilization Fund1 11,151 11,148 11,121 11,120 11,116 11,111 11,107 11,104 11,100 11,099 3 Special drawing rights2'3 4,095 5,250 5,025 5,050 5,320 5,341 5,266 5,513 5,459 5,453 4 Reserve position in International Monetary Fund2 5,055 7,348 11,312 11,422 11,707 11,706 11,618 11,666 11,659 11,735 5 Foreign currencies4 9,774 10,212 6,289 6,295 6,677 6,817 6,594 6,430 6,329 6,105 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 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position in 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 1984 AAsssseettss 11998811 11998822 11998833 Jan. Feb. Mar. Apr. May June July 1 Deposits 505 328 190 251 246 222 345 295 238 215 Assets held in custody 2 U.S. Treasury securities1 104,680 112,544 117,670 117,076 119,499 116,768 117,808 114,562 117,143 115,760 3 Earmarked gold2 14,804 14,716 14,414 14,347 14,291 14,278 14,278 14,268 14,266 14,270 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 • August 1984 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1983r 1984 Nov. Dec. Jan/ Feb/ Mar/ Apr. May'' All foreign countries 1 Total, all currencies 401,135 462,847 469,712 464,207 476,539 457,936 465,498 480,629 474,103 484,881 2 Claims on United States 28,460 63,743 91,805 109,714 115,065 112,237 112,778 121,813 120,834 125,659 3 Parent bank 20,202 43,267 61,666 75,724 81,113 77,697 79,429 86,379 85,150 88,863 4 Other 8,258 20,476 30,139 33,990 33,952 34,540 33,349 35,434 35,684 36,796 5 Claims on foreigners 354,960 378,954 358,493 335,959 342,609 326,312 332,383 338,726 333,187 338,633 6 Other branches of parent bank 77,019 87,821 91,168 89,457 92,718 85,985 85,754 90,703 92,842 95,095 7 Banks 146,448 150,763 133,752 114,557 117,593 107,633 110,848 114,200 107,048 112,199 8 Public borrowers 28,033 28,197 24,131 24,319 24,508 25,288 25,719 24,775 24,753 24,385 9 Nonbank foreigners 103,460 112,173 109,442 107,626 107,790 107,406 110,062 109,048 108,544 106,954 10 Other assets 17,715 20,150 19,414 18,534 18,865 19,387 20,337 20,090 20,082 20,589 11 Total payable in U.S. dollars 291,798 350,735 361,982 358,581 370,958 349,408 350,306 364,591 358,606 371,620 12 Claims on United States 27,191 62,142 90,085 107,223 112,959 110,139 110,543 119,436 118,355 123,284 13 Parent bank 19,896 42,721 61,010 74,202 80,018 76,550 78,200 85,067 83,729 87,683 14 Other 7,295 19,421 29,075 33,021 32,941 33,589 32,343 34,369 34,626 35,601 15 Claims on foreigners 255,391 276,937 259,871 240,925 247,327 228,647 229,241 235,215 229,872 237,487 16 Other branches of parent bank 58,541 69,398 73,537 71,460 75,207 68,113 66,792 70,940 70,100 75,503 17 Banks 117,342 122,110 106,447 90,155 93,257 82,551 84,230 87,764 82,702 86,138 18 Public borrowers 23,491 22,877 18,413 17,778 17,881 17,880 18,127 18,104 17,935 17,669 19 Nonbank foreigners 56,017 62,552 61,474 61,532 60,982 60,103 60,092 58,407 59,135 58,177 20 Other assets 9,216 11,656 12,026 10,433 10,672 10,622, 10,522 9,940 10,379 10,849 United Kingdom 21 Total, all currencies 144,717 157,229 161,067 155,964 158,732 155,096 157,972 161,007 161,109 159,059 22 Claims on United States 7,509 11,823 27,354 32,352 34,433 36,603 36,646 38,072 38,428 36,148 23 Parent bank 5,275 7,885 23,017 26,872 29,111 30,728 30,875 32,201 32,855 30,266 24 Other 2,234 3,938 4,337 5,480 5,322 5,875 5,771 5,871 5,573 5,882 25 Claims on foreigners 131,142 138,888 127,734 118,275 119,280 113,316 116,055 118,200 117,713 117,808 26 Other branches of parent bank 34,760 41,367 37,000 35,642 36,565 33,871 33,296 34,617 38,571 36,804 27 Banks 58,741 56,315 50,767 42,683 43,352 40,119 42,300 43,804 39,779 42,084 28 Public borrowers 6,688 7,490 6,240 6,307 5,898 6,063 6,213 6,076 6,072 5,992 29 Nonbank foreigners 30,953 33,716 33,727 33,643 33,465 33,263 34,246 33,703 33,291 32,928 30 Other assets 6,066 6,518 5,979 5,337 5,019 5,177 5,271 4,735 4,968 5,103 31 Total payable in U.S. dollars 99,699 115,188 123,740 121,744 126,012 121,195 121,944 124,501 123,174 122,215 32 Claims on United States 7,116 11,246 26,761 31,671 33,756 35,886 35,934 37,282 37,598 35,210 33 Parent bank 5,229 7,721 22,756 26,537 28,756 30,383 30,515 31,789 32,453 29,876 34 Other 1,887 3,525 4,005 5,134 5,000 5,503 5,419 5,493 5,145 5,334 35 Claims on foreigners 89,723 99,850 92,228 86,614 88,917 82,190 83,067 84,599 82,769 83,925 36 Other branches of parent bank 28,268 35,439 31,648 30,371 31,838 28,770 28,103 28,723 29,247 30,278 37 Banks 42,073 40,703 36,717 31,158 32,188 28,749 30,158 31,613 29,135 30,036 38 Public borrowers 4,911 5,595 4,329 4,377 4,194 4,356 4,414 4,390 4,408 4,296 39 Nonbank foreigners 14,471 18,113 19,534 20,708 20,697 20,315 20,392 19,873 19,979 19,315 40 Other assets 2,860 4,092 4,751 3,459 3,339 3,119 2,943 2,620 2,807 3,080 Bahamas and Caymans 41 Total, all currencies 123,837 149,108 145,156 147,457 151,532 141,573 140,198 149,164 144,502 155,805 42 Claims on United States 17,751 46,546 59,403 71,563 74,832 70,729 70,706 77,807 75,443 83,311 43 Parent bank 12,631 31,643 34,653 44,614 47,807 43,444 44,474 50,146 47,566 54,122 44 Other 5,120 14,903 24,750 26,949 27,025 27,285 26,232 27,661 27,877 29,189 45 Claims on foreigners 101,926 98,057 81,450 71,995 72,788 66,926 65,609 67,422 65,152 68,440 46 Other branches of parent bank 13,342 12,951 18,720 17,993 17,340 15,989 14,657 15,265 14,811 16,931 47 Banks 54,861 55,151 42,699 35,353 36,767 32,451 32,525 34,295 32,231 33,237 48 Public borrowers 12,577 10,010 6,413 5,890 6,084 5,992 5,956 6,028 5,983 5,920 49 Nonbank foreigners 21,146 19,945 13,618 12,759 12,597 12,494 12,471 11,834 12,127 12,352 50 Other assets 4,160 4,505 4,303 3,899 3,912 3,918 3,883 3,935 3,907 4,054 51 Total payable in U.S. dollars 117,654 143,743 139,605 141,046 145,091 135,166 133,836 142,677 138,102 149,340 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A53 3.14 Continued 1983' 1984 LLiiaabbiilliittyy aaccccoouunntt 11998800 11998811 11998822 Nov. Dec. Jan/ Feb/ Mar/ Apr. MayP All foreign countries 52 Total, all currencies 401,135 462,847 469,712 464,207 476,539' 457,936 465,498 480,629 474,103 484,881 53 To United States 91,079 137,767 179,015 184,443 187,602' 181,735 184,482 187,444 183,691 190,340 54 Parent bank 39,286 56,344 75,621 79,615 80,537' 79,136 81,112 77,320 75,282 80,027 55 Other banks in United States 14,473 19,197 33,405 26,202 29,107 26,660 25,678 28,689 26,810 27,451 56 Nonbanks 37,275 62,226 69,989 78,626 77,958' 75,939 77,692 81,435 81,599 82,862 57 To foreigners 295,411 305,630 270,853 260,813 269,602' 257,155 261,522 273,151 270,242 274,753 58 Other branches of parent bank 75,773 86,396 90,191 86,793 89,055' 81,793 81,684 87,229 90,937 92,254 59 Banks 132,116 124,906 96,860 88,080 92,882' 86,961 89,538 95,690 90,166 94,050 60 Official institutions 32,473 25,997 19,614 18,487 18,893' 19,702 20,549 18,250 17,882 19,608 61 Nonbank foreigners 55,049 68,331 64,188 67,453 68,772' 68,699 69,751 71,982 71,257 68,841 62 Other liabilities 14,690 19,450 19,844 18,951 19,335' 19,046 19,494 20,034 20,170 19,788 63 Total payable in U.S. dollars 303,281 364,447 379,270 374,798 387,740' 367,557 369,156 381,976 374,664 389,683 64 To United States 88,157 134,700 175,528 180,401 183,837 177,864 180,161 183,148 179,389 185,966 65 Parent bank 37,528 54,492 73,295 77,160 78,328 76,778 78,512 74,729 72,856 77,568 66 Other banks in United States 14,203 18,883 33,040 25,711 28,573 26,166 25,111 28,103 26,223 26,798 67 Nonbanks 36,426 61,325 69,193 77,530 76,936 74,920 76,538 80,316 80,310 81,600 68 To foreigners 206,883 217,602 192,510 184,452 194,056' 180,676 179,884 189,612 185,165 193,763 69 Other branches of parent bank 58,172 69,299 72,921 69,457 72,002 64,830 63,480 68,557 69,096 73,380 70 Banks 87,497 79,594 57,463 52,086 57,015 50,583 50,683 56,202 50,874 54,932 71 Official institutions 24,697 20,288 15,055 13,453 13,852 14,673 15,835 13,161 13,347 14,835 72 Nonbank foreigners 36,517 48,421 47,071 49,456 51,187' 50,590 49,886 51,692 51,848 50,616 73 Other liabilities 8,241 12,145 11,232 9,945 9,847 9,017 9,111 9,216 10,110 9,954 United Kingdom 74 Total, all currencies 144,717 157,229 161,067 155,964 158,732 155,096 157,972 161,007 161,109 159,059 75 To United States 21,785 38,022 53,954 57,095 55,799 55,618 56,550 56,228 56,526 55,353 76 Parent bank 4,225 5,444 13,091 17,312 14,021 17,075 18,307 15,850 16,311 17,820 77 Other banks in United States 5,716 7,502 12,205 10,176 11,328 10,640 10,570 11,440 10,542 9,487 78 Nonbanks 11,844 25,076 28,658 29,607 30,450 27,903 27,673 28,938 29,673 28,046 79 To foreigners 117,438 112,255 99,567 91,714 95,847 92,268 93,734 97,109 97.064 96,339 80 Other branches of parent bank 15,384 16,545 18,361 18,841 19,038 18,526 17,741 21,477 21,939 20,617 81 Banks 56,262 51,336 44,020 38,888 41,624 38,812 39,548 42,073 40,751 41,597 8? Official institutions 21,412 16,517 11,504 10,071 10,151 10,530 11,531 8,833 9,403 10,377 83 Nonbank foreigners 24,380 27,857 25,682 23,914 25,034 24,400 24,914 24,726 24,971 23,748 84 Other liabilities 5,494 6,952 7,546 7,155 7,086 7,210 7,688 7,670 7,519 7,367 85 Total payable in U.S. dollars 103,440 120,277 130,261 127,234 131,167 126,987 127,622 130,985 128,369 128,255 86 To United States 21,080 37,332 53,029 55,907 54,691 54,535 55,105 55,031 55,201 54,094 87 Parent bank 4,078 5,350 12,814 17,094 13,839 16,838 17,900 15,606 16,127 17,624 88 Other banks in United States 5,626 7,249 12,026 9,880 11,044 10,406 10,247 11,204 10,292 9,200 89 Nonbanks 11,376 24,733 28,189 28,933 29,808 27,291 26,958 28,221 28,782 27,270 90 To foreigners 79,636 79,034 73,477 68,011 73,279 69,557 69,438 72,892 69,739 70,764 91 Other branches of parent bank 10,474 12,048 14,300 15,044 15,403 14,758 13,956 17,559 14,801 15,733 9? Banks 35,388 32,298 28,810 26,343 29,320 26,386 26,229 28,833 27,286 27,308 93 Official institutions 17,024 13,612 9,668 8,029 8,279 8,594 9,777 6,910 7,650 8,760 94 Nonbank foreigners 16,750 21,076 20,699 18,595 20,277 19,819 19,476 19,590 20,002 18,963 95 Other liabilities 2,724 3,911 3,755 3,316 3,197 2,895 3,079 3,062 3,429 3,397 Bahamas and Caymans % Total, all currencies 123,837 149,108 145,156 147,457 151,532 141,573 140,198 149,164 144,502 155,805 97 To United States 59,666 85,759 104,425 106,828 110,831 104,170 104,552 109,975 106,672 113,920 98 Parent bank 28,181 39,451 47,081 46,709 50,256 44,734 44,186 45,227 43,211 45,987 99 Other banks in United States 7,379 10,474 18,466 14,117 15,711 14,401 13,578 15,636 14,867 16,530 100 Nonbanks 24,106 35,834 38,878 46,002 44,864 45,035 46,788 49,112 48,594 51,403 101 To foreigners 61,218 60,012 38,274 38,169 38,362 35,163 33,409 36,836 35,502 39,390 10? Other branches of parent bank 17,040 20,641 15,796 15,521 13,376 12,253 11,790 11,987 12,858 14,031 103 Banks 29,895 23,202 10,166 9,618 11,869 9,883 9,351 11,405 9,859 12,106 104 Official institutions 4,361 3,498 1,967 1,624 1,916 2,309 1,870 2,395 1,869 2,197 105 Nonbank foreigners 9,922 12,671 10,345 11,406 11,201 10,718 10,398 11,049 10,916 11,056 106 Other liabilities 2,953 3,337 2,457 2,460 2,339 2,240 2,237 2,353 2,328 2,495 107 Total payable in U.S. dollars 119,657 145,284 141,908 143,804 147,727 137,709 136,517 145,128 140,261 151,664 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • August 1984 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1983 1984 IItteemm 11998811 11998822 Dec. Jan. Feb. Mar. Apr. May June" 1 Total1 169,735 172,718 177,922 176,23,1 176,461 174,906 175,319 177,243 173,068 By type 2 Liabilities reported by banks in the United States2 26,737 24,989 25,503 22,768 23,169 23,373 23,834 23,124 23,366 3 U.S. Treasury bills and certificates3 52,389 46,658 54,341 55,32'' 56,084 53,681 53,171 51,035 53,977 U.S. Treasury bonds and notes 4 Marketable 53,186 67,733 68,514 69,053 69,061 69,545 70,167 69,146 68,269 5 Nonmarketable4 11,791 8,750 7,250 7,250 6,600 6,600 6,600 6,600 6,600 6 U.S. securities other than U.S. Treasury securities5 25,632 24,588 22,314 21,823 21,907 21,707 21,547 21,338 20,856 By area 7 Western Europe1 65,699 61,298 67,645 66,185 67,903 67,714 69,928 69,333 69,202 8 Canada 2,403 2,070 2,438 2,511 2,329 1,944 1,557 1,247 994 9 Latin America and Caribbean 6,953 6,057 6,248 6,443 7,605 6,460 7,468 6,474 7,077 10 Asia 91,607 96,034 92,544 92,185 90,547 90,610 88,517 86,382 88,321 11 Africa 1,829 1,350 958 1,051 1,067 1,038 941 1,179 996 12 Other countries6 1,244 5,909 8,089 7,846 7,370 7,140 6,908 6,628 6,478 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored 2. Principally demand deposits, time deposits, bankers acceptances, commer- agencies, and U.S. corporate stocks and bonds. cial paper, negotiable time certificates of deposit, and borrowings under repur- 6. Includes countries in Oceania and Eastern Europe. chase agreements. 3. Includes nonmarketable certificates of indebtedness (including those pay- NOTE. Based on Treasury Department data and on data reported to the able in foreign currencies through 1974) and Treasury bills issued to official Treasury Department by banks (including Federal Reserve Banks) and securities institutions of foreign countries. dealers in the United States. 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and notes payable in foreign currencies. 3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in Foreign Currencies Millions of dollars, end of period 1983 1984 IItteemm 11998800 11998811 11998822 June' Sept/ Dec/ Mar." 1 Banks' own liabilities 3,748 3,523 4,844 5,880 5,976 5,310 6,168 2 Banks' own claims 4,206 4,980 7,707 7,879 7,998 7,231 8,992 3 Deposits 2,507 3,398 4,251 3,907 3,045 2,731 4,000 4 Other claims 1,699 1,582 3,456 3,971 4,953 4,501 4,992 5 Claims of banks' domestic customers1 962 971 676 684 717 1,059 361 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 Dec/ Jan. Feb. Mar. Apr.' May JuneP 1 All foreigners 205,297 243,889 307,056 369,560 358,958' 368,902' 377,173 379,806 393,441 400,025 2 Banks' own liabilities 124,791 163,817 227,089 278,977 264,951' 271,858' 284,926 286,601 301,039 303,350 3 Demand deposits 23,462 19,631 15,889 17,602 16,124' 16,639 17,466 17,162 17,183 17,553 4 Time deposits' 15,076 29,039 68,035 89,977 87,846' 91,220' 96,462 96,629 103,345 105,197 5 Other2 17,583 17,647 23,946 26,406 23,277' 24,012' 24,485 24,082 23,733 22,934 6 Own foreign offices3 68,670 97,500 119,219 144,993 137,703' 139,988' 146,513 148,728 156,778 157,665 7 Banks' custody liabilities4 80,506 80,072 79,967 90,582 94,007 97,043 92,247 93,205 92,402 96,675 8 U.S. Treasury bills and certificates5 57,595 55,315 55,628 68,669 71,083 74,277 69,666 69,893 68,511 72,191 9 Other negotiable and readily transferable instruments6 20,079 18,788 20,636 17,529 18,063 17,864 18,075 18,703 18,780 19,480 10 Other 2,832 5,970 3,702 4,385 4,862 4,903 4,506 4,608 5,112 5,003 11 Nonmonetary international and regional organizations7 2,344 2,721 4,922 5,957 4,759 6,831 6,243 6,356 5,316 5,055 12 Banks' own liabilities 444 638 1,909 4,632 2,867 2,317 4,047 3,528 2,229 2,920 13 Demand deposits 146 262 106 297 271 347 414 194 255 182 14 Time deposits1 85 58 1,664 3,584 2,235 1,611 2,656 2,468 1,640 2,209 15 Other2 212 318 139 750 361 360 977 866 335 529 16 Banks' custody liabilities4 1,900 2,083 3,013 1,325 1,892 4,514 2,196 2,827 3,087 2,135 17 U.S. Treasury bills and certificates 254 541 1,621 463 1,045 3,416 1,224 1,759 2,057 887 18 Other negotiable and readily transferable instruments6 1,646 1,542 1,392 862 847 1,098 971 1,068 1,030 1,248 19 Other 0 0 0 0 0 0 0 0 0 0 20 Official institutions8 86,624 79,126 71,647 79,844 78,095 79,253 77,053 77,005 74,160 77,343 21 Banks' own liabilities 17,826 17,109 16,640 19,396 16,488 17,512 17,105 17,532 16,779 16,345 22 Demand deposits 3,771 2,564 1,899 1,837 1,753 1,663 1,955 1,761 1,733 1,897 23 Time deposits' 3,612 4,230 5,528 7,320 7,286 7,638 6,698 7,489 7,168 7,387 24 Other2 10,443 10,315 9,212 10,239 7,449 8,211 8,452 8,282 7,878 7,061 25 Banks' custody liabilities4 68,798 62,018 55,008 60,448 61,607 61,741 59,948 59,473 57,380 60,998 26 U.S. Treasury bills and certificates5 56,243 52,389 46,658 54,341 55,327 56,084 53,681 53,171 51,035 53,977 27 Other negotiable and readily transferable instruments6 12,501 9,581 8,321 6,082 6,257 5,623 6,249 6,287 6,307 6,930 28 Other 54 47 28 25 23 34 19 15 38 91 29 Banks9 96,415 136,008 185,881 226,886 218,387' 222,995' 233,424 234,285 249,019 251,743 30 Banks' own liabilities 90,456 124,312 169,449 205,347 195,811' 200,477' 211,040 211,812 225,869 227,070 31 Unaffiliated foreign banks 21,786 26,812 50,230 60,354 58,107' 60,489' 64,527 63,083 69,092 69,405 32 Demand deposits 14,188 11,614 8,675 8,787 8,175' 8,394 8,328 8,797 8,879 9,010 33 Time deposits' 1,703 8,720 28,386 36,964 35,189' 37,538' 41,905 40,055 45,369 45,751 34 Other2 5,895 6,477 13,169 14,603 14,743 14,557' 14,294 14,230 14,845 14,644 35 Own foreign offices3 68,670 97,500 119,219 144,993 137,703' 139,988' 146,513 148,728 156,778 157,665 36 Banks' custody liabilities4 5,959 11,696 16,432 21,540 22,576 22,519 22,384 22,473 23,150 24,673 37 U.S. Treasury bills and certificates 623 1,685 5,809 10,178 10,776 10,756 10,760 10,795 11,182 12,771 38 Other negotiable and readily transferable instruments6 2,748 4,400 7,857 7,485 7,416 7,378 7,447 7,586 7,523 7,531 39 Other 2,588 5,611 2,766 3,877 4,384 4,385 4,177 4,092 4,445 4,371 40 Other foreigners 19,914 26,035 44,606 56,872 57,717' 59,822 60,454 62,160 64,946 65,884 41 Banks' own liabilities 16,065 21,759 39,092 49,603 49,785' 51,552 52,734 53,728 56,161 57,014 42 Demand deposits 5,356 5,191 5,209 6,681 5,925 6,234 6,770 6,409 6,317 6,463 43 Time deposits 9,676 16,030 32,457 42,109 43,136' 44,434 45,203 46,617 49,169 49,851 44 Other2 1,033 537 1,426 813 724' 884 761 703 675 701 45 Banks' custody liabilities4 3,849 4,276 5,514 7,269 7,932 8,270 7,719 8,431 8,785 8,870 46 U.S. Treasury bills and certificates 474 699 1,540 3,686 3,935 4,021 4,001 4,168 4,238 4,556 47 Other negotiable and readily transferable instruments6 3,185 3,265 3,065 3,100 3,542 3,764 3,408 3,763 3,919 3,772 48 Other 190 312 908 483 455 484 311 501 628 541 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,745 10,747 14,307 10,407 10,307 9,416 9,688 10,128 10,630 10,948 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 • August 1984 3.17 Continued 1983 1984 AArreeaa aanndd ccoouunnttrryy 11998800 11998811AA 11998822 Dec. Jan. Feb. Mar. Apr. May JuneP 1 Total 205,297 243,889 307,056 369,560' 358,958' 368,902' 377,173 379,806' 393,441 400,025 2 Foreign countries 202,953 241,168 302,134 363,603' 354,199' 362,070' 370,931 373,450' 388,125 394,970 3 Europe 90,897 91,275 117,756 138,045' 134,899' 140,061' 142,406 147,724' 151,531 155,475 4 Austria 523 596 519 585 755 756 861 883' 867 764 5 Belgium-Luxembourg 4,019 4,117 2,517 2,709 2,972 3,218 3,367 3,585' 4,680 5,129 6 Denmark 497 333 509 466 372 355 285 307 378 291 / Finland 455 296 748 531 298 398 287 485 405 11,,224411 8 France 12,125 8,486 8,171 9,441 8,122 10,098 10,728 10,730' 12,118 1111,,666688 9 Germany 9,973 7,645 5,351 3,599 3,823 4,586' 4,878 5,205' 3,990 3,660 10 Greece 670 463 537 520 513 513 503 528 594 596 11 Italy 7,572 7,267 5,626 8,462' 7,622 7,648 7,395 7,813' 8,315 8,135 12 Netherlands 2,441 2,823 3,362 4,290 4,008 4,210 4,444 5,036' 5,030 5,735 13 Norway 1,344 1,457 1,567 1,673 1,481 1,452 1,285 1,847 1,536 2,082 14 Portugal 374 354 388 373 377 352 403 414' 401 422 1!) Spain 1,500 916 1,405 1,603 1,645 1,664 1,749 1,707' 1,663 1,757 16 Sweden 1,737 1,545 1,390 1,799 1,896 1,755' 1,838 1,673 1,962 1,479 17 Switzerland 16,689 18,716 29,066 32,219' 31,956 32,241' 32,237 32,765 32,784 35,164 18 Turkey 242 518 296 467 334 400 318 335 444 315 19 United Kingdom 22,680 28,286 48,172 60,683' 61,806' 64,436' 64,971 67,805' 69,006 69,674 20 Yugoslavia 681 375 499 562 505 477 479 448 511 555 21 Other Western Europe1 6,939 6,541 7.006 7,403' 5,872 4,965 5,738 5,584 6,309 6,165 22 U.S.S.R 68 49 50 65 62 74 177 61 53 41 23 Other Eastern Europe2 370 493 576 596 482 464 464 510 484 600 24 Canada 10,031 10,250 12,232 16,026 16,270 17,679 17,182 16,707 17,455 17,573 25 Latin America and Caribbean 53,170 85,223 114,163 140,270' 136,091' 138,465' 143,255 143,864' 151,894 151,818 I26t Argentina 2,132 2,445 3,578 4,011 4,303 4,536 4,365 4,616 4,534 4,546 Bahamas 16,381 34,856 44,744 55,977' 52,381' 52,845' 58,141 56,930 62,656 61,411 28 Bermuda 670 765 1,572 2,328 2,745 3,165 2,886 3,097 3,276 2,604 29 Brazil 1,216 1,568 2,014 3,178' 2,997 3,485' 3,723 3,795' 3,562 3,780 30 British West Indies 12,766 17,794 26,381 34,545' 33,082' 32,504' 32,677 32,936' 33,777 34,300 31 Chile 460 664 1,626 1,842 1,811 1,935 1,876 1,972 1,887 1,969 32 Colombia 3,077 2,993 2,594 1,689 1,586' 1,840 11,,666699 11,,881144 1,765 1,807 33 Cuba 6 9 9 8 9 13 88 88 10 9 34 Ecuador 371 434 455 1,047 828 826 825 970 885 908 35 Guatemala 367 479 670 788 800 812 815 850 842 825 36 Jamaica 97 87 126 109 113 131 132 131 131 157 37 Mexico 4,547 7,235 8,377 10,392' ii,oo&- 10,705' 10,699 11,187' 11,874 11,976 38 Netherlands Antilles 413 3,182 3,597 3,879 3,773 4,503 4,901 4,668' 4,397 4,458 39 Panama 4,718 4,857 4,805 5,924 5,372' 5,545 5,498 5,482 6,293 6,650 40 Peru 403 694 1,147 1,166 1,130 1.146 1,157 1,179 1,249 1,279 41 Uruguay 254 367 759 1,232 1,278 1,321 1,418 1,330 1,367 1,309 42 Venezuela 3,170 4,245 8,417 8,622' 9,332' 9,461' 8,566 9,076 9,434 10,049 43 Other Latin America and Caribbean 2,123 2,548 3,291 3,533' 3,543' 3,693' 3,899 3,823' 3,955 3,781 44 Asia 4422,,442200 49,822 48,716 58,490' 56,043' 5555,,334444'' 5577,,666622 5544,,995511'' 5577,,118800 6600,,117733 China 45 Mainland 49 158 203 249 249 168 272 302 400 469 46 Taiwan 1,662 2,082 2,761 3,997 4,270 4,291 4,193 4,388 4,364 4,578 47 Hong Kong 2,548 3,950 4,465 6,610 6,196 5,884 6,387 5,447 5,862 6,412 48 India 416 385 433 464 670 749 687 651 646 498 49 Indonesia 730 640 857 997 1,093 859 753 784 897 1,281 50 Israel 883 592 606 1,722 786 752 832 706' 754 768 51 Japan 16,281 20,750 16,078 18,079 17,069 17,615 19,216 18,862 20,522 19,434 52 Korea 1,528 2,013 1,692 1,648 1,614 1,542 1,748 1,409 1,337 1,276 53 Philippines 919 874 770 1,234 1,235 1,280 1,264 1,015 1,130 1,030 54 Thailand 464 534 629 747' 776 622 714 636' 730 865 55 Middle-East oil-exporting countries3 14,453 12,992 13,433 12,970' 12,516 11,587 12,197 12,269' 11,615 12,337 56 Other Asia 2,487 4,853 6,789 9,693' 9,570' 9,994' 9,398 8,482 8,924 11,225 57 Africa 5,187 3,180 3,124 2,800 2,917 3,070 3,111 3,182 3,140 33,,332222 58 Egypt 485 360 432 645 572 568 561 649 698 888877 59 Morocco 33 32 81 84 109 138 122 127 132 133 60 South Africa 288 420 292 449 486 502 .538 264 329 420 61 Zaire 57 26 23 87 61 66 77 119 124 136 62 Oil-exporting countries4 3,540 1,395 1,280 620 869 839 893 1,046 895 816 63 Other Africa 783 946 1,016 917 821 957 920 978 962 931 64 Other countries 1,247 1,419 6,143 8,053 7,979 7,451 7,315 7,023 6,925 6,608 65 Australia 950 1,223 5,904 7,857 7,742 7,197 7,095 6,803 6,685 6,316 66 All other 297 196 239 196 237 255 220 220 240 292 67 Nonmonetary international and regional organizations 2,344 2,721 4,922 5,957 4,759 6,831 6,243 6,356 5,316 5,055 68 International 1,157 1,661 4,049 5,273 4,174 6,189 5,426 5,641 4,741 4,436 69 Latin American regional 890 710 517 419 433 457 451 419 428 438 70 Other regional5 296 350 357 265 152 186 366 296 146 180 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 Dec. Jan. Feb. Mar. Apr.' May June" 1 Total 172,592 251,589 355,705 389,329' 373,493' 377,732' 385,029 387,429 398,940 407,286 2 Foreign countries 172,514 251,533 355,636 389,166' 373,429' 377,568' 384,879 387,355 398,837 407,172 3 Europe 32,108 49,262 85,584 91,416' 90,578' 91,496' 91,836 95,959 97,993 103,537 4 Austria 236 121 229 401 354 414 449 679 456 587 5 Belgium-Luxembourg 1,621 2,849 5,138 5,639 5,942 6,182 5,970 6,238 6,626 6,790 6 Denmark 127 187 554 1,275 1,301' 1,244 1,283 1,197 1,118 1,212 7 Finland 460 546 990 1,044 945 952 931 1,021 1,041 1,099 8 France 2,958 4,127 7,251 8,766' 7,998' 8,314 8,388 8,734 9,029 9,393 9 Germany 948 940 1,876 1,294 1,058 1,047 1,098 1,502 1,111 1,203 10 Greece 256 333 452 476 508 549 694 830 940 1,036 11 Italy 3,364 5,240 7,560 9,018' 7,899' 7,904 8,161 8,286 7,901 8,551 12 Netherlands 575 682 1,425 1,302 1,407 1,319 1,309 2,329 1,787 1,781 13 Norway 227 384 572 690 652 645 638 705 719 729 14 Portugal 331 529 950 939 954 944 908 1,079 1,146 1,247 15 Spain 993 2,095 3,744 3,583' 3,391 3,280 3,347 3,719 3,700 3,791 16 Sweden 783 1,205 3,038 3,358 3,373 3,356 3,528 3,646 2,957 3,206 17 Switzerland 1,446 2,213 1,639 1,856 1,452 1,302 1,447 1,844 1,570 1,903 18 Turkey 145 424 560 812 814' 933' 958 1,019 1,002 1,103 19 United Kingdom 14,917 23,849 45,781 47,025' 48,621' 49,219' 48,800 49,051 52,850 55,754 20 Yugoslavia 853 1,225 1,430 1,673 1,718 1,702 1,706 1,694 1,719 1,746 21 Other Western Europe1 179 211 368 477 493 547 499 651 565 571 22 U.S.S.R 281 377 263 192 162 169 181 174 154 158 23 Other Eastern Europe2 1,410 1,725 1,762 1,598 1,537 1,475 1,540 1,562 1,602 1,678 24 Canada 4,810 9,193 13,678 16,336' 15,881' 15,984 17,233 17,065 17,874 17,531 25 Latin America and Caribbean 92,992 138,347 187,969 204,053' 194,811' 197,398' 201,810 201,573 209,720 208,829 26 Argentina 5,689 7,527 10,974 11,740 11,746 11,751 11,626 11,427 11,071 11,172 27 Bahamas 29,419 43,542 56,649 58,808' 53,084' 52,278' 57,169 56,958 61,526 59,341 28 Bermuda 218 346 603 566 644 409 532 614 845 554 29 Brazil 10,496 16,926 23,271 24,482 24,828' 24,928 25,697 25,926 25,865 26,000 30 British West Indies 15,663 21,981 29,101 35,232' 31,558' 33,188' 33,157 33,893 36,788 37,433 31 Chile 1,951 3,690 5,513 6,038' 6,163 6,286 6,131 6,085 6,146 6,492 32 Colombia 1,752 2,018 3,211 3,745 3,695 3,536 3,667 3,649 3,524 3,562 33 Cuba 3 3 3 0 0 0 0 4 0 21 34 Ecuador 1,190 1,531 2,062 2,307 2,367 2,350 2,334 2,335 2,332 2,371 35 Guatemala3 137 124 124 129 189 126 128 129 127 104 36 Jamaica3 36 62 181 215 218 219 210 227 242 218 37 Mexico 12,595 22,439 29,552 34,705' 34,565' 34,685 34,593 34,575 35,228 35,575 38 Netherlands Antilles 821 1,076 839 1,154 971 1,043 1,245 1,149 1,163 1,312 39 Panama 4,974 6,794 10,210 7,848 7,847 8,794 8,367 7,679 7,964 7,813 40 Peru 890 1,218 2,357 2,536 2,467 2,415 2,453 2,380 22,,443388 2,466 41 Uruguay 137 157 686 977 982 908 924 923 888877 950 42 Venezuela 5,438 7,069 10,643 11,287 11,255' 11,183 11,142 11,105 11,019 11,169 43 Other Latin America and Caribbean 1,583 1,844 1,991 2,283' 2,232 2,298 2,436 2,514 2,555 2,275 44 Asia 39,078 49,851 60,952 67,802' 62,876' 62,746' 64,347 63,004 63,546 67,443 China 45 Mainland 195 107 214 292 420 337 364 428 348 552 46 Taiwan 2,469 2,461 2,288 1,908 1,810' 1,710 1,657 1,654 1,585 2,200 47 Hong Kong 2,247 4,132 6,787 8,429 8,129 8,030 7,470 7,921 7,448 8,125 48 India 142 123 222 330 344 253 337 372 362 365 49 Indonesia 245 352 348 805 853 899 935 911 983 966 50 Israel 1,172 1,567 2,029 1,832' 1,556 1,478 1,607 1,846 1,822 2,006 51 Japan 21,361 26,797 28,379 30,564' 27,333 27,845 28,688 26,173 27,147 29,154 52 Korea 5,697 7,340 9,387 9,889' 9,600' 9,513 9,676 10,259 9,565 9,595 53 Philippines 989 1,819 2,625 2,099 2,408 2,357 2,371 2,359 2,404 2,467 54 Thailand 876 565 643 1,099' 1,091' 1,109' 999 1,014 1,139 945 55 Middle East oil-exporting countries4 1,432 1,581 3,087 4,954 4,637 4,264 5,039 5,122 5,208 5,099 56 Other Asia 2,252 3,009 4,943 5,599' 4,696' 4,952' 5,203 4,945 5,535 5,969 57 Africa 2,377 3,503 5,346 6,654 6,571 7,226 6,919 6,645 6,762 6,838 58 Egypt 151 238 322 747 738 712 744 698 666 734 59 Morocco 223 284 353 440 450 481 484 486 561 497 60 South Africa 370 1,011 2,012 2,634 2,684 2,928 2,989 2,908 2,974 3,065 61 Zaire 94 112 57 33 29 16 13 26 28 39 62 Oil-exporting countries5 805 657 801 1,073 1,037 1,124 1,029 1,000 967 1,001 63 Other 734 1,201 1,802 1,727 1,631 1,964 1,661 1,526 1,566 1,503 64 Other countries 1,150 1,376 2,107 2,904 2,712 2,718 2,734 3,109 2,942 2,995 65 Australia 859 1,203 1,713 2,276' 2,105 2,048 2,007 2,489 2,345 2,434 66 All other 290 172 394 627' 607 670 727 620 597 561 67 Nonmonetary international and regional organizations6 78 56 68 164 64 164 150 74 103 114 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 • 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 • August 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 Dec/ Jan/ Feb/ Mar. Apr.' May June? 1 Total 111111199999998888888,,,,,,,666666699999998888888 222222288888887777777,,,,,,,555555555555557777777 333333399999996666666,,,,,,,000000011111115555555 444444422222224444444,,,,,,,222222233333332222222 444444422222221111111,,,,,,,222222211111114444444 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111177777772222222,,,,,,,555555599999992222222 222222255555551111111,,,,,,,555555588888889999999 333333355555555555555,,,,,,,777777700000005555555 333333388888889999999,,,,,,,333333322222229999999 373,493 377,732 333333388888885555555,,,,,,,000000022222229999999 387,429 398,940 407,286 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 22222220000000,,,,,,,888888888888882222222 33333331111111,,,,,,,222222266666660000000 44444445555555,,,,,,,444444422222222222222 55555557777777,,,,,,,555555500000000000000 58,248 57,349 55555557777777,,,,,,,777777733333331111111 58,041 58,053 58,618 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 66666665555555,,,,,,,000000088888884444444 99999996666666,,,,,,,666666655555553333333 111111122222227777777,,,,,,,222222299999993333333 111111144444444444444,,,,,,,999999966666664444444 139,476 141,717 111111144444446666666,,,,,,,444444466666667777777 145,865 155,694 157,758 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 55555550000000,,,,,,,111111166666668888888 77777774444444,,,,,,,777777700000004444444 111111122222221111111,,,,,,,333333377777777777777 111111122222223333333,,,,,,,333333344444444444444 115,225 116,877 111111111111119999999,,,,,,,4444444%%%%%%% 121,472 123,419 128,218 66 DDeeppoossiittss 8888888,,,,,,,222222255555554444444 22222223333333,,,,,,,333333388888881111111 44444444444444,,,,,,,222222222222223333333 44444447777777,,,,,,,000000000000005555555 43,105 44,742 44444445555555,,,,,,,333333366666664444444 45,068 47,066 49,769 77 OOtthheerr 44444441111111,,,,,,,999999911111114444444 55555551111111,,,,,,,333333322222222222222 77777777777777,,,,,,,111111155555553333333 77777776666666,,,,,,,333333333333338888888 72,120 72,135 77777774444444,,,,,,,111111133333332222222 76,403 76,354 78,449 88 AAllll ootthheerr ffoorreeiiggnneerrss 33333336666666,,,,,,,444444455555559999999 44444448888888,,,,,,,999999977777772222222 66666661111111,,,,,,,666666611111114444444 66666663333333,,,,,,,555555522222222222222 60,544 61,788 66666661111111,,,,,,,333333333333335555555 62,051 61,774 62,693 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 22222226666666,,,,,,,111111100000006666666 33333335555555,,,,,,,999999966666668888888 44444440000000,,,,,,,333333311111110000000 33333334444444,,,,,,,999999900000003333333 33333336666666,,,,,,,111111188888885555555 888888888888885555555 1111111,,,,,,,333333377777778888888 2222222,,,,,,,444444499999991111111 2222222,,,,,,,999999966666669999999 3333333,,,,,,,666666666666660000000 11 Negotiable and readily transferable 11111115555555,,,,,,,555555577777774444444 22222226666666,,,,,,,333333355555552222222 33333330000000,,,,,,,777777766666663333333 22222226666666,,,,,,,000000066666664444444 22222225555555,,,,,,,999999999999992222222 12 Outstanding collections and other 9999999,,,,,,,666666644444448888888 8888888,,,,,,,222222233333338888888 7777777,,,,,,,000000055555556666666 5555555,,,,,,,888888877777770000000 6666666,,,,,,,555555533333333333333 13 MEMO: Customer liability on 22222222222222,,,,,,,777777711111114444444 22222229999999,,,,,,,999999955555552222222 33333338888888,,,,,,,111111155555553333333 33333337777777,,,,,,,888888822222220000000 33333336666666,,,,,,,999999988888884444444 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 ... 24,468 40,369 42,358 44,994 44,836 46,991 46,136' 47,272 46,%2 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 1983 1984 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998800 11998811AA 11998822 June' Sept.' Dec/ Mar. 1 Total 106,748 154,590 228,150 232,669 237,217 243,602 235,501 By borrower 2 Maturity of 1 year or less1 82,555 116,394 173,917 174,949 176,258 176,623 161,864 3 Foreign public borrowers 9,974 15,142 21,256 23,194 25,563 24,455 20,656 4 All other foreigners 72,581 101,252 152,661 151,756 150,695 152,168 141,208 5 Maturity of over 1 year1 24,193 38,197 54,233 57,720 60,958 66,979 73,637 6 Foreign public borrowers 10,152 15,589 23,137 26,516 28,284 32,478 35,825 7 All other foreigners 14,041 22,608 31,095 31,204 32,674 34,501 37,812 By area Maturity of 1 year or less1 8 Europe 18,715 28,130 50,500 52,210 53,499 56,078 53,167 9 Canada 2,723 4,662 7,642 7,119 6,652 6,206 6,566 10 Latin America and Caribbean 32,034 48,717 73,291 74,953 76,3% 73,974 65,082 11 26,686 31,485 37,578 35,277 33,686 34,569 31,238 12 Africa 1,757 2,457 3,680 3,854 4,570 4,206 4,472 13 Allother2 640 943 1,226 1,536 1,454 1,589 11,,334400 Maturity of over 1 year1 14 Europe 5,118 8,100 11,636 12,297 12,358 13,354 13,068 15 Canada 1,448 1,808 1,931 1,861 1,760 1,857 2,035 16 Latin America and Caribbean 15,075 25,209 35,247 36,759 39,150 43,561 49,907 17 1,865 1,907 3,185 4,070 4,735 4,828 5,131 18 Africa 507 900 1,494 1,667 1,819 2,278 2,291 19 All other2 179 272 740 1,066 1,136 1,101 1,206 1. Remaining time to maturity. A Liabilities and claims of banks in the United States were increased, 2. Includes nonmonetary international and regional organizations. beginning in December 1981, by the shift from foreign branches to international banking facilities in the United States of liabilities to, and claims on, foreign residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data 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 1984 AArreeaa oorr ccoouunnttrryy 11997799 11998800 11998811 June Sept. Dec. Mar. June Sept. Dec. Mar.'' 1 Total 303.9 352.0 415.2 435.5 438.4 438.7 441.1 437.4 428.3 434.1 430.8 2 G-10 countries and Switzerland 138.4 162.1 175.5 176.3 175.4 179.7 182.2 176.9 168.3 167.2 165.0 3 Belgium-Luxembourg 11.1 13.0 13.3 14.1 13.6 13.1 13.7 13.3 12.6 12.4 11.0 4 France 11.7 14.1 15.3 16.5 15.8 17.1 17.1 17.1 16.2 16.3 15.9 5 Germany 12.2 12.1 12.9 12.7 12.2 12.7 13.5 12.6 11.6 11.3 11.7 6 6.4 8.2 9.6 9.0 9.7 10.3 10.2 10.5 10.0 11.4 11.2 7 Netherlands 4.8 4.4 4.0 4.1 3.8 3.6 4.3 4.0 3.6 3.5 3.4 8 Sweden 2.4 2.9 3.7 4.0 4.7 5.0 4.3 4.7 4.9 5.1 5.2 9 Switzerland 4.7 5.0 5.5 5.1 5.1 5.0 4.6 4.8 4.2 4.3 4.2 10 United Kingdom 56.4 67.4 70.1 69.4 70.3 72.1 72.9 70.3 67.4 64.4 63.9 11 Canada 6.3 8.4 10.9 11.4 11.0 10.4 12.5 10.8 9.0 8.3 8.6 12 Japan 22.4 26.5 30.2 29.9 29.3 30.2 29.2 28.7 28.8 30.1 30.0 13 Other developed countries 19.9 21.6 28.4 32.2 32.7 33.7 34.0 34.4 34.2 35.9 35.5 14 Austria 2.0 1.9 1.9 2.1 2.0 1.9 2.1 2.1 1.9 1.9 2.0 15 Denmark 2.2 2.3 2.3 2.6 2.5 2.4 3.3 3.4 3.3 3.4 3.4 16 Finland 1.2 1.4 1.7 1.6 1.8 2.2 2.1 2.1 1.8 2.4 2.1 17 Greece 2.4 2.8 2.8 2.7 2.6 3.0 2.9 2.9 2.9 2.8 3.0 18 Norway 2.3 2.6 3.1 3.2 3.4 3.3 3.3 3.4 3.2 3.3 3.2 19 Portugal .7 .6 1.1 1.5 1.6 1.5 1.4 1.4 1.3 1.3 1.1 20 Spain 3.5 4.4 6.6 7.3 7.7 7.5 7.1 7.2 7.2 7.1 7.1 21 Turkey 1.4 1.5 1.4 1.5 1.5 1.4 1.5 1.4 1.5 1.7 1.9 22 Other Western Europe 1.4 1.7 2.1 2.2 2.1 2.3 2.3 2.0 2.1 1.8 1.8 23 South Africa 1.3 1.1 2.8 3.5 3.6 3.7 3.6 3.9 4.7 4.7 4.8 24 Australia 1.3 1.3 2.5 4.0 4.0 4.4 4.6 4.6 4.4 5.5 5.2 25 OPEC countries2 22.9 22.7 24.8 26.4 27.3 27.4 28.5 28.3 27.2 28.9 28.5 26 Ecuador 1.7 2.1 2.2 2.4 2.3 2.2 2.2 2.2 2.1 2.2 2.1 27 Venezuela 8.7 9.1 9.9 10.1 10.4 10.5 10.4 10.4 9.8 9.9 9.7 28 Indonesia 1.9 1.8 2.6 2.8 2.9 3.2 3.5 3.2 3.4 3.8 4.0 29 Middle East countries 8.0 6.9 7.5 8.7 9.0 8.7 9.3 9.5 9.1 10.0 9.8 30 African countries 2.6 2.8 2.5 2.5 2.7 2.8 3.0 3.0 2.8 3.0 3.0 31 Non-OPEC developing countries 63.0 77.4 96.3 103.7 104.1 107.1 107.7 108.3 109.1 110.6 111.9 Latin America 32 Argentina 5.0 7.9 9.4 9.6 9.2 8.9 9.0 9.4 9.5 9.5 9.5 33 Brazil 15.2 16.2 19.1 21.4 22.4 22.9 23.1 22.6 22.9 22.9 24.9 34 Chile 2.5 3.7 5.8 6.4 6.2 6.3 6.0 5.8 6.2 6.4 6.4 35 Colombia 2.2 2.6 2.6 2.6 2.8 3.1 2.9 3.2 3.2 3.2 3.1 36 Mexico 12.0 15.9 21.6 25.2 25.0 24.5 25.1 25.2 25.8 26.0 25.5 37 1.5 1.8 2.0 2.4 2.6 2.6 2.4 2.6 2.4 2.4 2.3 38 Other Latin America 3.7 3.9 4.1 4.0 4.3 4.0 4.2 4.3 4.2 4.2 4.4 Asia China 39 Mainland .1 .2 .2 .3 .2 .2 .2 .2 .2 .3 .4 40 Taiwan 3.4 4.2 5.1 5.0 4.9 5.3 5.1 5.1 5.2 5.3 5.0 41 India .2 .3 .3 .5 .5 .6 .4 .5 .5 .6 1.0 42 Israel 1.3 1.5 2.1 2.2 1.9 2.3 2.0 2.3 1.7 1.8 1.6 43 Korea (South) 5.4 7.1 9.4 8.9 9.4 10.9 10.9 10.8 10.8 11.3 11.1 44 Malaysia 1.0 1.1 1.7 1.9 1.8 2.1 2.5 2.6 2.8 2.9 2.8 45 Philippines 4.2 5.1 6.0 6.3 6.1 6.3 6.6 6.4 6.2 6.2 6.7 46 Thailand 1.5 1.6 1.5 1.3 1.3 1.6 1.6 1.8 1.7 2.0 1.9 47 Other Asia .5 .6 1.0 1.1 1.3 1.1 1.4 1.2 1.0 1.0 .9 Africa 48 Egypt .6 .8 1.1 1.3 1.3 1.2 1.1 1.3 1.4 1.5 1.4 49 Morocco .6 .7 .7 .7 .8 .7 .8 .8 .8 .8 .8 50 Zaire .2 .2 .2 2 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 1.7 2.1 2.3 2.3 2.2 2.4 2.3 2.2 2.4 2.3 2.2 52 Eastern Europe 7.3 7.4 7.8 6.7 6.3 6.2 5.7 5.7 5.3 5.3 4.9 53 U.S.S.R .7 .4 .6 .4 .3 .3 .3 .4 .2 .2 .2 54 Yugoslavia 1.8 2.3 2.5 2.4 2.2 2.2 2.2 2.3 2.3 2.3 2.2 55 Other 4.8 4.6 4.7 3.9 3.8 3.7 3.2 3.0 2.8 2.8 2.5 56 Offshore banking centers 40.4 47.0 63.7 72.1 72.2 66.8 66.2 67.6 67.5 69.2 68.9 57 Bahamas 13.7 13.7 19.0 24.1 21.4 19.0 17.4 19.6 20.5 20.7 23.6 58 Bermuda .8 .6 .7 .7 .8 .9 1.0 .8 .8 .9 .7 59 Cayman Islands and other British West Indies 9.4 10.6 12.4 12.4 13.6 12.9 12.0 12.2 10.6 12.2 10.8 60 Netherlands Antilles 1.2 2.1 3.2 3.0 3.3 3.3 3.1 2.6 4.1 4.2 3.2 61 Panama4 4.3 5.4 7.7 7.4 8.1 7.6 7.1 6.6 5.7 6.0 6.3 62 Lebanon .2 .2 .2 .2 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 6.0 8.1 II.8 14.4 15.1 13.9 15.1 14.6 15.1 14.9 14.3 64 Singapore 4.5 5.9 8.7 9.9 9.8 9.2 10.3 11.0 10.5 10.2 9.8 65 Others5 .4 .3 .1 .1 .0 .0 .0 .0 .1 .0 .0 66 Miscellaneous and unallocated6 11.7 14.0 18.8 18.4 20.4 17.9 16.8 16.1 16.8 17.0 16.2 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 • August 1984 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States' Millions of dollars, end of period 1983 1984 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998800 11998811 11998822 Mar. June Sept. Dec/ Mar.P 1 Total 29,434 28,618 25,663 23,450 22,846 24,762 23,791 27,958 2 Payable in dollars 25,689 24,909 22,470 20,459 19,922 21,895 20,715 24,677 3 Payable in foreign currencies 3,745 3,709 3,193 2,991 2,924 2,867 3,076 3,282 By type 4 Financial liabilities 11,330 12,157 11,001 10,996 11,181 10,946 10,504 14,129 5 Payable in dollars 8,528 9,499 8,829 8,952 9,120 8,976 8,646 12,037 6 Payable in foreign currencies 2,802 2,658 2,172 2,044 2,061 1,971 1,858 2,092 7 Commercial liabilities 18,104 16,461 14,662 12,454 11,665 13,815 13,286 13,829 8 Trade payables 12,201 10,818 7,707 5,627 6,026 7,056 6,615 6,758 9 Advance receipts and other liabilities 5,903 5,643 6,955 6,827 5,640 6,760 6,672 7,071 10 Payable in dollars 17,161 15,409 13,641 11,507 10,802 12,919 12,069 12,639 11 Payable in foreign currencies 943 1,052 1,021 947 864 8% 1,218 1,190 By area or country Financial liabilities 12 Europe 6,481 6,825 6,438 6,319 6,337 6,027 5,721 7,041 13 Belgium-Luxembourg 479 471 557 459 482 379 302 426 14 France 327 709 731 725 756 785 820 933 15 Germany 582 491 470 487 460 454 498 524 16 Netherlands 681 748 711 699 728 730 581 532 17 Switzerland 354 715 753 710 629 530 486 641 18 United Kingdom 3,923 3,565 3,075 3,097 3,108 2,992 2,885 3,835 19 Canada 964 963 746 733 876 788 768 798 20 Latin America and Caribbean 3,136 3,356 2,749 2,787 2,623 2,709 2,592 4,858 21 Bahamas 964 1,279 904 857 776 771 749 1,411 22 Bermuda 1 7 14 18 10 13 13 51 23 Brazil 23 22 28 39 34 32 32 37 24 British West Indies 1,452 1,241 1,025 1,053 1,033 1,023 1,003 2,595 25 Mexico 99 102 121 149 151 185 215 245 26 Venezuela 81 98 114 121 124 117 124 121 27 Asia 723 976 1,039 1,124 1,319 1,388 1,396 1,404 28 Japan 644 792 715 781 943 957 962 1,013 29 Middle East oil-exporting countries2 38 75 169 168 205 201 170 170 30 Africa 11 14 17 20 17 19 18 19 31 Oil-exporting countries3 1 0 0 0 0 0 0 0 32 All other4 15 24 12 13 9 15 10 9 Commercial liabilities 33 Europe 4,402 3,770 3,649 3,443 3,368 3,384 3,153 3,354 34 Belgium-Luxembourg 90 71 52 45 41 47 62 40 35 France 582 573 597 578 617 506 437 481 36 Germany 679 545 467 455 439 461 427 416 37 Netherlands 219 220 346 351 342 243 268 259 38 Switzerland 499 424 363 354 357 448 241 413 39 United Kingdom 1,209 880 850 679 633 786 637 734 40 Canada 888 897 1,490 1,433 1,465 1,407 1,841 1,789 41 Latin America and Caribbean 1,300 1,044 1,008 1,066 1024 11,,006677 11,,112255 1,426 42 Bahamas 8 2 16 4 1 11 11 14 43 Bermuda 75 67 89 117 76 76 67 144 44 Brazil 111 67 60 51 49 48 44 68 45 British West Indies 35 2 32 4 22 14 6 33 46 Mexico 367 340 379 355 399 429 536 619 47 Venezuela 319 276 165 198 236 217 180 254 48 Asia 10,242 9,384 7,160 5,437 4,799 6,852 6,032 5,961 49 Japan 802 1,094 1,226 1,235 1,236 1,294 1,247 1,291 50 Middle East oil-exporting countries2'5 8,098 7,008 4,531 2,803 2,294 4,072 3,498 3,209 51 Africa 817 703 704 497 492 506 442 539 52 Oil-exporting countries3 517 344 277 158 167 204 157 243 53 All other4 456 664 651 578 518 600 692 760 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 States' Millions of dollars, end of period 1983 1984 Type, and area or country 998800 11998811 11998822 Mar. June Sept. Dec/ Mar." 1 Total 34,482 36,185 28,483 31,230 31,505 31,656 34,083 32,426 2 Payable in dollars 31,528 32,582 25,851 28,510 28,849 28,780 31,077 29,519 3 Payable in foreign currencies 2,955 3,603 2,632 2,720 2,656 2,877 3,006 2,908 By type 4 Financial claims 19,763 21,142 17,501 20,261 20,896 20,831 22,978 21,579 5 Deposits 14,166 15,081 12,965 15,610 16,072 15,987 17,911 16,495 6 Payable in dollars 13,381 14,456 12,534 15,130 15,632 15,542 17,415 16,066 7 Payable in foreign currencies 785 625 430 480 439 445 497 428 8 Other financial claims 5,597 6,061 4,536 4,651 4,824 4,845 5,067 5,084 9 Payable in dollars 3,914 3,599 2,895 3,006 3,226 3,019 3,165 3,277 10 Payable in foreign currencies 1,683 2,462 1,641 1,645 1,598 1,826 1,902 1,808 11 Commercial claims 14,720 15,043 10,982 10,969 10,609 10,825 11,105 10,847 12 Trade receivables 13,960 14,007 9,973 9,765 9,241 9,526 9,695 9,540 13 Advance payments and other claims.. 759 1,036 1,010 1,203 1,367 1,299 1,410 1,307 14 Payable in dollars 14,233 14,527 10,422 10,374 9,991 10,219 10,498 10,176 15 Payable in foreign currencies 487 516 561 595 618 606 607 671 By area or country Financial claims 16 Europe 6,069 4,5% 4,868 6,229 6,847 6,202 6,374 6,446 17 Belgium-Luxembourg 145 43 10 58 12 25 37 30 18 France 298 285 134 98 140 135 130 145 19 Germany 230 224 178 127 216 151 129 121 20 Netherlands 51 50 97 140 136 89 49 57 21 Switzerland 54 117 107 107 37 34 38 90 22 United Kingdom 4,987 3,546 4,064 5,434 6,058 5,547 5,768 5,783 23 Canada 5,036 6,755 4,287 4,613 4,885 4,958 5,836 5,577 24 Latin America and Caribbean 7,811 8,812 7,458 8,527 8,089 8,609 9,767 8,467 25 Bahamas 3,477 3,650 3,265 3,811 3,291 3,389 4,732 3,233 26 Bermuda 135 18 32 21 92 62 96 3 27 Brazil 96 30 62 50 48 49 53 87 28 British West Indies 2,755 3,971 3,171 3,408 3,447 3,932 3,801 4,243 29 Mexico 208 313 274 352 348 315 291 279 30 Venezuela 137 148 139 156 152 137 134 130 31 Asia 607 758 698 712 771 764 709 776 32 Japan 189 366 153 233 288 257 242 333 33 Middle East oil-exporting countries2 20 37 15 18 14 8 4 7 34 Africa 208 173 158 153 154 151 147 144 26 46 48 45 48 45 55 42 35 Oil-exporting countries3 32 48 31 25 149 148 145 169 36 All other4 Commercial claims 5,544 5,405 3,777 3,594 3,410 3,349 3,678 3,623 37 Europe 233 234 150 140 144 131 142 188 38 Belgium-Luxembourg 1,129 776 473 489 499 486 459 413 39 France 599 561 356 424 364 381 348 363 40 Germany 318 299 347 309 242 282 333 308 41 Netherlands 354 431 339 227 303 270 317 336 42 Switzerland 929 985 808 754 739 734 809 786 43 United Kingdom 44 Canada 914 %7 632 648 716 788 829 1,052 45 Latin America and Caribbean 3,766 3,479 2,521 2,699 2,722 2,864 2,695 2,420 46 Bahamas 21 12 21 30 30 15 8 8 47 Bermuda 108 223 259 172 108 242 190 216 48 Brazil 861 668 258 402 512 611 493 357 49 British West Indies 34 12 12 21 21 12 7 7 50 Mexico 1,102 1,022 774 894 956 897 884 745 51 Venezuela 410 424 351 288 273 282 272 268 52 Asia 3,522 3,959 3,048 3,128 2,871 2,936 3,041 2,994 53 Japan 1,052 1,245 1,047 1,115 949 1,037 1,092 1,200 54 Middle East oil-exporting countries2 825 905 751 702 700 719 737 701 55 Africa 653 772 588 559 528 562 585 497 56 Oil-exporting countries3 153 152 140 131 130 131 139 133 57 All other4 321 461 417 342 361 326 277 261 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 • August 1984 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1984 1983 1984 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998822 11998833 Jan.- June Dec. Jan. Feb. Mar. Apr. May JunC U.S. corporate securities STOCKS 1 Foreign purchases 41,881 69,770' 31,883 6,007' 5,438' 6,234 6,101 4,510 5,048 4,552 2 Foreign sales 37,981 64,360' 31,804 5,736' 5,799' 5,823 5,599 4,189 5,494 4,899 3 Net purchases, or sales (-) 3,901 5,410' 79 271' -361' 411 502 321 -446 -347 4 Foreign countries 3,816 5,312' 109 281' —350' 480 470 320 -454 -357 5 Europe 2,530 3,979' -82 -281' -168' 147 329 208 -281 -317 6 France -143 -97 -38 -64 -72' -97 -4 38 100 -3 7 Germany 333 1,045 280 -51 95 116 151 -43 -40 2 8 Netherlands -63 -109 -104 13 1' 1 32 -15 -47 -76 9 Switzerland -579 1,325 -63 -208 -92 282 -3 90 -220 -120 10 United Kingdom 3,117 l^ -275 47' -94' -168 125 137 -96 -179 11 Canada 222 1,151 877 183 83 323 300 73 -61 158 12 Latin America and Caribbean 317 529 325 239 124 43 14 25 82 38 13 Middle East1 366 -807 -1,043 13 -361 -44 -197 -58 -168 -215 14 Other Asia 247 394 31 122 -48 36 33 66 -28 -27 15 Africa 2 42 11 2 5 10 -7 5 -4 3 16 Other countries 131 24 -11 1 16 -34 -1 2 6 2 17 Nonmonetary international and regional organizations 85 98 -30 -7 -11 -70 32 1 8 10 BONDS2 18 Foreign purchases 21,639 24,049' 11,614 1,698' 1,834' 2,113 2,200 1,701' 1,763 2,004 19 Foreign sales 20,188 23,092' 10,881 1,4%' 1,773' 1,943' 2,074 1,857 1,442 1,792 20 Net purchases, or sales (-) 1,451 957' 733 202' 61' 170' 126 -156' 321 211 21 Foreign countries 1,479 942' 640 195' 72 82' 183 -224' 355 171 22 Europe 2,082 961' 383 -53' 72 -55' -15 21' 85 275 23 France 305 -89 -8 -4 -1 -5 -1 -5 0 4 24 Germany 2,110 347' 345 -27' -37' -32 117 68 107 122 25 Netherlands 33 51 35 3 3 25 9 -12 -1 11 26 Switzerland 157 632 -115 78 12 -102' -45 -22 8 35 27 United Kingdom -589 434' -41 -128' 127' 101 -58 -239 -59 87 28 Canada 24 123 -74 -22 1 -10 -23 -77 3 32 29 Latin America and Caribbean 159 100 207 20 9 16 18 -8 157 15 30 Middle East1 -752 -1,159 -477 42 -26 58' 30 -263 11 -287 31 Other Asia -22 865 600 207 18 75 170 102 100 135 32 Africa -19 0 0 0 -1 0 0 1 0 0 33 Other countries 7 52 1 0 0 -2 3 1 0 0 34 Nonmonetary international and regional organizations -28 15 93 7 -11 87 -57 67 -34 40 Foreign securities 35 Stocks, net purchases, or sales (-) -1,341 -3,765' 382 -187' -114' 345' 145' -18 64 -40 36 Foreign purchases 7,163 13,281' 7,785 1,132' 1,215' 1,487' 1,575 1,242 1,156 1,110 37 Foreign sales 8,504 17,046' 7,403 1,320' 1,329' 1,142 1,429' 1,260 1,092 1,150 38 Bonds, net purchases, or sales (-) -6,631 -3,651' -505 -884' 267' -72' 77' -399 -631 252 39 Foreign purchases 27,167 35,922' 26,588 3,076' 3,424' 3,903' 4,985' 3,812 5,165 5,298 40 Foreign sales 33,798 39,572' 27,093 3,96C 3,157' 3,975 4,907 4,211 5,797 5,045 41 Net purchases, or sales (-), of stocks and bonds -7,972 -7,416' 123 -1,071' ISY 273' 223' -417 -567 212 42 Foreign countries -6,806 -6,971' -357 —910' 124' 241' -415 -642 198 43 Europe -2,584 -5,866' -3,187 -643' -34' -404 -236' -537 -1,520 -456 44 Canada -2,363 -1,344' -288 -60' 14' 185' 117' -187 38 122 45 Latin America and Caribbean 336 1,120 1,541 17 114 188 49 126 602 462 46 -1,822 -855' 1,046 -81 33 282' 220 187 243 80 47 Africa -9 141 -51 0 -11 -10 -4 -16 -4 48 Other countries -364 -166 6 -143 2 1 -3 0 12 -6 49 Nonmonetary international and regional organizations -1,165 -445 233 -161 28 32 85 -2 74 15 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 J J u a n n e . - Dec.' Jan. Feb. Mar. Apr. May June p Holdings (end of period)1 1 Estimated total2 85,220 88,932 88,932 89,645' 90,206' 89,656' 92,005' 92,848 92,799 2 Foreign countries2 80,637 83,818 83,818 84,534' 84,382' 84,383' 85,408' 85,227 86,254 3 Europe2 29,284 35,509 35,509 36,009' 37,3ISK 37,226' 37,787' 37,800 38,690 4 Belgium-Luxembourg 447 16 16 33 50 57 91 61 135 5 Germany2 14,841 17,290 17,290 17,581 18,527 18,834' 19,201 19,507 19,593 6 Netherlands 2,754 3,129 3,129 3,113 3,052 3,023 3,117 2,979 3,000 7 Sweden 677 847 847 878' 898' 945' 949' 954 940 8 Switzerland2 1,540 1,118 1,118 1,167 1,206 1,256 1,241 979 1,328 9 United Kingdom 6,549 8,515 8,515 8,701' 8,587' 8,406' 8,411' 8,647 9,191 10 Other Western Europe 2,476 4,594 4,594 4,536' 5,00C 4,707' 4,776' 4,674 4,503 11 Eastern Europe 0 0 0 0 0 0 0 -1 -1 12 Canada 602 1,301 1,301 1,298 1,310 1,090 1,299 1,308 1,415 13 Latin America and Caribbean 1,076 863 863 1,426 840 563 572 962 862 14 Venezuela 188 64 64 64 64 64 65 65 75 15 Other Latin America and Caribbean 656 716 716 696 574 504 453 546 490 16 Netherlands Antilles 232 83 83 665 201 -6 53 351 297 17 Asia 49,543 46,026 46,026 45,690' 44,811' 45,401' 45,610' 44,992 45,122 18 Japan 11,578 13,911 13,911 14,013' 14,351 14,334' 14,547 14,871 15,361 19 Africa 77 79 79 79 78 82 85 88 88 20 All other 55 38 38 31' 23' 21' 57' 77 77 21 Nonmonetary international and regional organizations 4,583 5,114 5,114' 5,111' 5,824' 5,273' 6,597' 7,621 6,545 22 International 4,186 4,404 4,404 4,467 5,139 4,614 5,936 6,946 5,860 23 Latin American regional 6 6 6 6 6 6 6 6 6 Transactions (net purchases, or sales ( -) during period) 24 Total2 14,972 3,711 3,867 -612 7iy 561' -550 2,348 843 -49 25 Foreign countries2 16,072 3,180 2,436 116 1W -152' 1 1,025 -182 1,027 26 Official institutions 14,550 779 -253 -435 539 8' 476 622' -1,021 -878 27 Other foreign2 1,518 2,400 2,693 551 178' -159' -475 403' 840 1,906 28 Nonmonetary international and regional organizations -1,097 535 1,426 -727 -4' 712 -551 1,322 1,024 -1,077 MEMO: Oil-exporting countries 29 Middle East3 7,575 -5,419 -2,945 -54 -515 -829' 46 -678 -1,063 95 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 July 31, 1984 Rate on July 31, 1984 Rate on July 31, 1984 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.5 June 1984 France1 11.25 July 1984 Norway 8.0 June 1979 Belgium. 11.0 Feb. 1984 Germany, Fed. Rep. of 4.5 June 1984 Switzerland 4.0 Mar. 1983 Brazil... 49.0 Mar. 1981 Italy 15.5 May 1984 United Kingdom2. Canada.. 13.24 July 1984 Japan 5.0 Oct. 1983 Venezuela 11.0 May 1983 Denmark 7.0 Oct. 1983 Netherlands 5.0 Sept. 1983 1. As of the end of February 1981, the rate is that at which the Bank of France or makes advances against eligible commercial paper and/or government commerdiscounts Treasury bills for 7 to 10 days. cial banks or brokers. For countries with more than one rate applicable to such 2. Minimum lending rate suspended as of Aug. 20, 1981. discounts or advances, the rate shown is the one at which it is understood the central bank transacts the largest proportion of its credit operations. NOTE. Rates shown are mainly those at which the central bank either discounts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • August 1984 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1984 CCoouunnttrryy,, oorr ttyyppee 11998811 11998822 11998833 Jan. Feb. Mar. Apr. May June July 1 Eurodollars 16.79 12.24 9.57 9.78 9.91 10.40 10.83 11.53 11.68 12.02 2 United Kingdom 13.86 12.21 10.06 9.40 9.35 8.90 8.84 9.32 9.43 11.38 3 Canada 18.84 14.38 9.48 9.84 9.85 10.40 10.75 11.52 11.86 13.03 4 Germany 12.05 8.81 5.73 6.07 5.91 5.82 5.81 6.08 6.11 6.09 5 Switzerland 9.15 5.04 4.11 3.65 3.47 3.60 3.61 3.83 4.15 4.72 6 Netherlands 11.52 8.26 5.58 6.01 5.95 6.09 6.04 6.05 6.09 6.39 7 France 15.28 14.61 12.44 12.22 12.36 12.53 12.46 12.16 12.23 11.70 8 Italy 19.98 19.99 18.95 17.75 17.40 17.28 17.38 16.80 16.75 16.73 9 Belgium 15.28 14.10 10.51 10.68 11.43 12.02 11.66 11.80 11.90 11.90 10 Japan 7.58 6.84 6.49 6.35 6.34 6.41 6.26 6.24 6.35 6.31 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 1984 CCoouunnttrryy//ccuurrrreennccyy 11998811 11998822 11998833 Feb. Mar. Apr. May June July 1 Australia/dollar1 114.95 101.65 90.14 93.48 95.13 92.31 90.61 88.26 83.42 2 Austria/schilling 15.948 17.060 17.968 19.028 18.285 18.630 19.316 19.226 19.998 3 Belgium/franc 37.194 45.780 51.121 55.279 53.135 54.078 55.925 55.840 57.714 4 Brazil/cruzeiro 92.374 179.22 573.27 1131.37 1266.64 1387.52 1497.64 1,643.81 1,819.00 5 Canada/dollar 1.1990 1.2344 1.2325 1.2480 1.2697 1.2796 1.2944 1.3040 1.3238 6 China, P.R./yuan 1.7031 1.8978 1.9809 2.0628 2.0646 2.0929 2.1866 2.2178 2.2996 7 Denmark/krone 7.1350 8.3443 9.1483 9.8549 9.5175 9.7311 10.0618 10.050 10.4178 8 Finland/markka 4.3128 4.8086 5.5636 5.7892 5.6136 5.6434 5.8115 5.8182 6.0187 9 France/franc 5.4396 6.5793 7.6203 8.3051 8.0022 8.1411 8.4435 8.4181 8.7438 10 Germany/deutsche mark 2.2631 2.428 2.5539 2.6984 2.5973 2.6474 2.7484 2.7397 2.8492 11 Greece/drachma n.a. 66.872 87.895 101.80 102.40 104.89 108.37 108.85 112.40 12 Hong Kong/dollar 5.5678 6.0697 7.2569 7.7883 7.7942 7.8073 7.8159 7.8131 7.8519 13 India/rupee 8.6807 9.4846 10.1040 10.744 10.714 10.820 11.017 11.064 11.371 14 Ireland/pound1 161.32 142.05 124.81 114.21 117.88 115.67 111.75 111.67 107.63 15 Israel/shekel n.a. 24.407 55.865 130.21 146.40 168.76 191.56 215.06 253.14 16 Italy/lira 1138.60 1354.00 1519.30 1666.39 1614.17 1638.48 1696.32 1,694.80 1,751.18 17 Japan/yen 220.63 249.06 237.55 233.60 225.27 225.20 230.48 233.57 243.07 18 Malaysia/ringgit 2.3048 2.3395 2.3204 2.3363 2.2933 2.2904 2.3029 2.3109 2.3385 19 Mexico/peso 24.547 72.990 155.01 168.49 172.93 179.07 198.35 196.54 196.63 20 Netherlands/guilder 2.4998 2.6719 2.8543 3.0455 2.9326 2.9864 3.0926 3.0882 3.2155 21 New Zealand/dollar1 86.848 75.101 66.790 65.810 66.714 65.834 64.892 64.205 55.631 22 Norway/krone 5.7430 6.4567 7.3012 7.6937 7.5028 7.5992 7.8100 7.8162 8.2151 23 Philippines/peso 7.8113 8.5324 11.0940 14.050 14.186 14.257 14.262 14.250 n.a. 24 Portugal/escudo 61.739 80.101 111.610 135.01 131.70 134.46 139.85 141.83 152.17 25 Singapore/dollar 2.1053 2.1406 2.1136 2.1279 2.0893 2.0853 2.1006 2.1122 2.1473 26 South Africa/rand1 114.77 92.297 89.85 81.31 82.10 80.19 78.15 76.49 66.52 27 South Korea/won n.a. 731.93 776.04 799.06 794.51 796.41 801.54 802.20 810.96 28 Spain/peseta 92.396 110.09 143.500 154.20 149.68 150.26 154.03 154.75 161.37 29 Sri Lanka/rupee 18.967 20.756 23.510 25.270 25.177 25.133 25.161 25.176 25.223 30 Sweden/krona 5.0659 6.2838 7.6717 7.9976 7.7323 7.8444 8.0782 8.0993 8.3063 31 Switzerland/franc 1.9674 2.0327 2.1006 2.2050 2.1490 2.1913 2.2680 2.2832 2.4115 32 Taiwan/Dollar n.a. n.a. n.a. 40.236 40.078 39.784 39.716 39.843 39.477 33 Thailand/baht 21.731 23.014 22.991 23.000 23.004 23.010 23.010 23.010 23.020 34 United Kingdom/pound1 202.43 174.80 151.59 144.17 145.57 142.10 138.94 137.70 132.00 35 Venezuela/bolivar 4.2781 4.2981 10.6840 13.023 13.470 14.375 15.661 14.709 13.067 MEMO United States/dollar2 102.94 116.57 125.34 131.71 128.07 130.01 133.99 134.31 139.30 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 June 1984 A83 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference 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 commercial banks, December 31, 1983 June 1984 A66 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 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1983 June 1984 All 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 HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director ROBERT M. FISHER, Assistant Director OFFICE OF THE SECRETARY SUSAN J. LEPPER, Assistant Director THOMAS D. SIMPSON, Assistant Director WILLIAM W. WILES, Secretary LAWRENCE SLIFMAN, Assistant Director BARBARA R. LOWREY, Associate Secretary STEPHEN P. TAYLOR, Assistant Director JAMES MCAFEE, Associate Secretary PETER A. TINSLEY, Assistant Director LEVON H. GARABEDIAN, Assistant Director (Administration) DIVISION OF CONSUMER AND COMMUNITY AFFAIRS DIVISION OF INTERNATIONAL FINANCE GRIFFITH L. GARWOOD, Director JERAULD C. KLUCKMAN, Associate Director EDWIN M. TRUMAN, Director GLENN E. LONEY, Assistant Director LARRY J. PROMISEL, Senior Associate Director DOLORES S. SMITH, Assistant Director CHARLES J. SIEGMAN, Senior Associate Director DALE W. HENDERSON, Associate Director ROBERT F. GEMMILL, Staff Adviser DIVISION OF BANKING SAMUEL PIZER, Staff Adviser SUPERVISION AND REGULATION PETER HOOPER, III, Assistant Director DAVID H. HOWARD, Assistant Director RALPH W. SMITH, JR., Assistant Director JOHN E. RYAN, Director WILLIAM TAYLOR, Deputy Director FREDERICK R. DAHL, Associate Director DON E. KLINE, Associate Director FREDERICK M. STRUBLE, Associate Director HERBERT A. BIERN, Assistant Director ANTHONY G. CORNYN, Assistant Director JACK M. EGERTSON, Assistant Director ROBERT S. PLOTKIN, Assistant Director STEPHEN C. SCHEMERING, Assistant Director RICHARD SPILLENKOTHEN, 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 EMMETT J. RICE MARTHA R. SEGER LYLE E. GRAMLEY 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 PORTIA W. THOMPSON, EEO Programs Officer DIVISION OF FEDERAL RESERVE BANK OPERATIONS DIVISION OF DATA PROCESSING CLYDE H. FARNSWORTH, JR., Director CHARLES L. HAMPTON, Director ELLIOTT C. MCENTEE, Associate Director BRUCE M. BEARDSLEY, Deputy Director DAVID L ROBINSON, Associate Director GLENN L. CUMMINS, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director NEAL H. HILLERMAN, Assistant Director WALTER ALTHAUSEN, Assistant Director RICHARD J. MANASSERI, Assistant Director CHARLES W. BENNETT, Assistant Director ELIZABETH B. RIGGS, Assistant Director ANNE M. DEBEER, Assistant Director WILLIAM C. SCHNEIDER, JR., Assistant Director JACK DENNIS, JR., Assistant Director ROBERT J. ZEMEL, 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 GEORGE M. LOPEZ, Assistant 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 • August 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 MARTHA R. SEGER 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 BARRY F. SULLIVAN, Seventh District LEWIS T. PRESTON, Second District WILLIAM H. BO WEN, 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. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- 1972. 220 pp. Each volume, $3.00; 10 or more to one TIONS. 1974. 125 pp. address, $2.50 each. ANNUAL REPORT. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 $2.00 each in the United States, its possessions, Canada, pp. Cloth ed. $5.00 each; 10 or more to one address, and Mexico; 10 or more of same issue to one address, $4.50 each. Paper ed. $4.00 each; 10 or more to one $18.00 per year or $1.75 each. Elsewhere, $24.00 per address, $3.60 each. year or $2.50 each. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 of Part I only) 1976. 682 pp. $5.00. pp. $4.00 each; 10 or more to one address, $3.60 each. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1,168 pp. $15.00. 1973. 271 pp. $3.50 each; 10 or more to one address, ANNUAL STATISTICAL DIGEST $3.00 each. 1971-75. 1976. 339 pp. $ 5.00 per copy. IMPROVING THE MONETARY AGGREGATES: REPORT OF THE 1972-76. 1977. 377 pp. $10.00 per copy. ADVISORY COMMITTEE ON MONETARY STATISTICS. 1973-77. 1978. 361 pp. $12.00 per copy. 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 1974-78. 1980. 305 pp. $10.00 per copy. each. 1970-79. 1981. 587 pp. $20.00 per copy. IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. 1980. 1981. 241 pp. $10.00 per copy. 1978. 170 pp. $4.00 each; 10 or more to one address, 1981. 1982. 239 pp. $ 6.50 per copy. $3.75 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 $2.25; 10 or more of same volume to one year or $2.00 each in the United States, its possessions, address, $2.00 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. 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in each; 10 or more to one address, $1.50 each. the United States, its possessions, Canada, and Mexico; INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; 10 or more of same issue to one address, $13.50 per year 10 or more to one address, $1.25 each. or $.35 each. Elsewhere, $20.00 per year or $.50 each. PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. THE FEDERAL RESERVE ACT, as amended through April 20, $13.50 each. 1983. with an appendix containing provisions of certain NEW MONETARY CONTROL PROCEDURES: FEDERAL REother statutes affecting the Federal Reserve System. 576 SERVE STAFF STUDY. 1981. pp. $7.00. SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL ERAL RESERVE SYSTEM. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- Truth in Leasing ed at least monthly. (Requests must be prepaid.) U.S. Currency Consumer and Community Affairs Handbook. $60.00 per What Truth in Lending Means to You year. Monetary Policy and Reserve Requirements Handbook. $60.00 per year. Securities Credit Transactions Handbook. $60.00 per year. STAFF STUDIES: Summaries Only Printed in the Federal Reserve Regulatory Service. 3 vols. (Contains all Bulletin three Handbooks plus substantial additional material.) $175.00 per year. Studies and papers on economic and financial subjects that Rates for subscribers outside the United States are as are of general interest. Requests to obtain single copies of follows and include additional air mail costs: the full text or to be added to the mailing list for the series Federal Reserve Regulatory Service, $225.00 per year. may be sent to Publications Services. Each Handbook, $75.00 per year. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- WELCOME TO THE FEDERAL RESERVE. DENCE ON COMPETITION AND PERFORMANCE IN BANKING MARKETS, by Timothy J. Curry and John T. PROCESSING BANK HOLDING COMPANY AND MERGER APPLI- Rose. Jan. 1982. 9 pp. CATIONS. REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT ANNUAL 115. COSTS, SCALE ECONOMIES, COMPETITION, AND PROD- HUMAN RELATIONS AWARD DINNER, December 1982. UCT MIX IN THE U.S. PAYMENTS MECHANISM, by David B. Humphrey. Apr. 1982. 18 pp. REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT DEDICATION CEREMONIES: FEDERAL RESERVE BANK OF SAN FRAN- 116. DIVISIA MONETARY AGGREGATES: COMPILATION, CISCO, March 1983. DATA, AND HISTORICAL BEHAVIOR, by William A. Barnett and Paul A. Spindt. May 1982. 82 pp. Out of RESTORING STABILITY. REMARKS BY CHAIRMAN PAUL A. VOLCKER, April 1983. print. CREDIT CARDS IN THE U.S. ECONOMY: THEIR IMPACT ON 117. THE COMMUNITY REINVESTMENT ACT AND CREDIT COSTS, PRICES, AND RETAIL SALES, July 1983. 114 pp. ALLOCATION, by Glenn Canner. June 1982. 8 pp. REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT THE ANNU- 118. INTEREST RATES AND TERMS ON CONSTRUCTION AL DINNER OF THE JAPAN SOCIETY, June 1984. LOANS AT COMMERCIAL BANKS, by David F. Seiders. July 1982. 14 pp. THE MONETARY AUTHORITY OF THE FEDERAL RESERVE, May 1984. (High School Level.) 119. STRUCTURE-PERFORMANCE STUDIES IN BANKING: AN UPDATED SUMMARY AND EVALUATION, by Stephen A. Rhoades. Aug. 1982. 15 pp. 120. FOREIGN SUBSIDIARIES OF U.S. BANKING ORGANIZA- CONSUMER EDUCATION PAMPHLETS TIONS, by James V. Houpt and Michael G. Martinson. Short pamphlets suitable for classroom use. Multiple copies Oct. 1982. 18 pp. Out of print. available without charge. 121. REDLINING: RESEARCH AND FEDERAL LEGISLATIVE RESPONSE, by Glenn B. Canner. Oct. 1982. 20 pp. 122. BANK CAPITAL TRENDS AND FINANCING, by Samuel Alice in Debitland H. Talley. Feb. 1983. 19 pp. Out of print. Consumer Handbook to Credit Protection Laws 123. FINANCIAL TRANSACTIONS WITHIN BANK HOLDING The Equal Credit Opportunity Act and . . . Age COMPANIES, by John T. Rose and Samuel H. Talley. The Equal Credit Opportunity Act and . . . Credit Rights in May 1983. 11 pp. Housing 124. INTERNATIONAL BANKING FACILITIES AND THE EU- The Equal Credit Opportunity Act and . . . Doctors, Law- RODOLLAR MARKET, by Henry S. Terrell and Rodney yers, Small Retailers, and Others Who May Provide Inci- H. Mills. August 1983. 14 pp. dental Credit 125. SEASONAL ADJUSTMENT OF THE WEEKLY MONETARY The Equal Credit Opportunity Act and . . . Women AGGREGATES: A MODEL-BASED APPROACH, by David Fair Credit Billing A. Pierce, Michael R. Grupe, and William P. Cleve- Federal Reserve Glossary land. August 1983. 23 pp. Guide to Federal Reserve Regulations 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- How to File A Consumer Credit Complaint KET INTERVENTION, by Donald B. Adams and Dale If You Borrow To Buy Stock W. Henderson. August 1983. 5 pp. If You Use A Credit Card 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- Instructional Materials of the Federal Reserve System VENTION: JANUARY-MARCH 1975, by Margaret L. Series on the Structure of the Federal Reserve System Greene. The Board of Governors of the Federal Reserve System *128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- The Federal Open Market Committee VENTION: SEPTEMBER 1977-OcTOBER 1981, by Marga- Federal Reserve Bank Board of Directors ret L. Greene. Federal Reserve Banks 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- Monetary Control Act of 1980 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. Try on. 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. 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- LINES, AND THE LIMITS OF CONCENTRATION IN LO- CAL BANKING MARKETS, by James Burke. June 1984. 14 pp. 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN THE UNITED STATES, by Thomas D. Simpson and Patrick M. Parkinson. August 1984. 20 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 liabilities) 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 Thrift institutions, 3 (See also Credit unions, Mutual Capacity utilization, 42 savings banks, and Savings and loan associations) Production, 42, 45 Time and savings deposits, 3, 8, 13, 16, 17-20 Margin requirements, 25 Trade, foreign, 51 Member banks (See also Depository institutions) Treasury currency, Treasury cash, 4 Federal funds and repurchase agreements, 5 Treasury deposits, 4, 10, 27 Reserve requirements, 7 Treasury operating balance, 27 Mining production, 45 UNEMPLOYMENT, 43 Mobile homes shipped, 46 U.S. government balances Monetary and credit aggregates, 3, 12 Commercial bank holdings, 17, 18, 19 Money and capital market rates (See Interest rates) Treasury deposits at Reserve Banks, 4, 10, 27 Money stock measures and components, 3,13 U.S. government securities Mortgages {See Real estate loans) Bank holdings, 16, 17-19, 20, 29 Mutual funds (See Investment companies) Dealer transactions, positions, and financing, 30 Mutual savings banks, 8, 18-19, 26, 29, 37, 38 (See also Federal Reserve Bank holdings, 4, 10, 11, 29 Thrift institutions) Foreign and international holdings and transactions, 10, 29, 63 NATIONAL defense outlays, 28 Open market transactions, 9 National income, 48 Outstanding, bv type and holder, 26, 29 Rates, 3, 24 OPEN market transactions, 9 U.S. international transactions, 50-63 Utilities, production, 45 PERSONAL income, 49 Prices VETERANS Administration, 36, 37 Consumer and producer, 42, 47 Stock market, 25 WEEKLY reporting banks, 18-20 Prime rate, commercial banks, 22 Wholesale (producer) prices, 42, 47 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 Robert W. Eisenmenger 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 Robert E. Boni 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. Hen- 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 Roby L. Sloan 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 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 \Se",t ile Helena j Minneapolis i { ® [) ^^iXrV^P^^fief*Y®^ ! r?*cisc. o I Den i• II Kansas '©a Oklahoma On; ^Memphis Nashvill^ little Rock Birminghai*®lantl Dallas® \ f ~H ^ © "1 „ _ , HoustonI ./VCH' Orleans San Antonio \mml April 1984 ALASKA JHHHB @@ "" VVii YYP j »2js 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,4 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. LMNNO LE4SING LE4SMG LMMNG TRUTH IN LE4SING What Ttuthln Lending Means ToYou The Equal Credit Opportunity Act I ...andl IF 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. Thev 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 Svstem. 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