Federal Reserve Bulletin, 1985-04

VOLUME 71 • NUMBER 4 • APRIL 1985 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost • Griffith L. Garwood • James L. Kichline • Edwin M. Truman Naomi P. Salus, Coordinator The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 187 MONETAR Y POLIC Y REPOR T for the economy in the context of some TO THE CONGRESS important unfinished business facing those responsible for economic policy, before the Nineteen eighty-four was another year of Senate Committee on Banking, Housing, substantial economic growth, and the exand Urban Affairs, February 20, 1985. The pansion of the past two years has been the Chairman presented similar testimony bestrongest cyclical upswing since the early fore the House Committee on Banking, 1950s. Finance and Urban Affairs on February 26, 1985. 200 STAFF STUDIES 221 Chairman Volcker discusses the role of the In "Compliance Costs and Consumer Bene- United States in the global economy—spefits of the Electronic Fund Transfer Act: cifically the overall relationships between Recent Survey Evidence," the author ex- U.S. expansion and growth in the rest of the amines the compliance costs and consumer world, trade and exchange rate policy, and benefits of Regulation E (Electronic Fund debt of the developing countries, before the Transfers), through the findings of a survey Senate Foreign Relations Committee, Febof financial institutions conducted by the ruary 27, 1985. Board's staff in 1981 and 1982. 225 ANNOUNCEMENTS 202 INDUSTRIAL PRODUCTION Meeting of the Consumer Advisory Coun- Output rose 0.4 percent in January. cil. Withdrawal of application by Citicorp. 204 STATEMENTS TO CONGRESS Amendment to Regulation J. Paul A. Volcker, Chairman, Board of Governors, gives a broad view of the current Proposal to amend Regulation T. economic setting, with some emphasis on Publication of Trust Examination Manual. the interrelationships between domestic and international developments, before the Changes in Board staff. Joint Economic Committee, February 5, Revisions to data on the money stock. 1985. Admission of one state bank to membership 209 Chairman Volcker discusses the economic in the Federal Reserve System. situation, and in that context some implications of the budgetary choices that must be 231 RECORD OF POLICY ACTIONS OF THE made for the economy, for financial mar- FEDERAL OPEN MARKET COMMITTEE kets, and for the international position of the United States, before the Senate Budget At its meeting on December 17-18, 1984, Committee, February 8, 1985. the Committee adopted a directive that 211 Chairman Volcker presents the Federal Re- called for some further reduction in the serve's monetary policy objectives for 1985 degree of restraint on reserve positions. and discusses the decisions of the Federal The members expected that such an ap- Open Market Committee and the outlook proach to policy implementation would be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

consistent with growth of M1 at an annual 239 LEGAL DEVELOPMENTS rate of around 7 percent during the four- Various bank holding company, bank sermonth period from November to March and vice corporation, and bank merger orders; with expansion of both M2 and M3 at an and pending cases. annual rate of about 9 percent during the same period. Because of the currently esti- Ai FINANCIAL AND BUSINESS STATISTICS mated shortfall in Ml growth in the fourth quarter compared with the members' ex- A3 Domestic Financial Statistics pectations at the beginning of the quarter, A44 Domestic Nonfinancial Statistics the Committee decided that somewhat A53 International Statistics more rapid growth of Ml would be acceptable for the period ahead, particularly if the A69 GUIDE TO TABULAR PRESENTATION, faster growth occurred in the context of STATISTICAL RELEASES, AND SPECIAL sluggish expansion in economic activity and TABLES continued strength of the dollar in foreign exchange markets. The Committee also in- A78 BOARD OF GOVERNORS AND STAFF dicated that greater restraint on reserve positions might be acceptable in the event A80 FEDERAL OPEN MARKET COMMITTEE of substantially more rapid growth in the AND STAFF; ADVISORY COUNCILS monetary aggregates than was currently expected and indications that economic activi- A82 FEDERAL RESERVE BOARD ty and inflationary pressures were strength- PUBLICATIONS ening significantly. It was agreed that the intermeeting range for the federal funds A85 INDEX TO STATISTICAL TABLES rate, which provides a mechanism for initiating consultation of the Committee when A87 FEDERAL RESERVE BANKS, BRANCHES, its boundaries are persistently exceeded, AND OFFICES should be reduced by one percentage point to 6 to 10 percent. A88 MAP OF FEDERAL RESERVE SYSTEM 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 February the average. Sectors of the economy facing in- 20, 1985, pursuant to the Full Employment and tense competition from abroad, such as agricul- Balanced Growth Act of 1978.1 ture and certain mining and manufacturing industries, have not participated in the rapid economic expansion overall and have been under strong THE OUTLOOK FOR THE ECONOMY IN 1985 financial stress. Strains also remain evident among financial institutions: a number of deposi- Nineteen eighty-four was another year of sub- tory institutions have experienced a deteriorastantial economic growth in the United States. tion in the quality of their loan portfolios, and the Production and employment gains were large, earnings of thrift institutions remain constrained making the expansion of the past two years— by low-yielding assets accumulated in earlier with growth in real gross national product aver- years. aging 6 percent per year—the strongest cyclical While it has not been an impediment to ecoupswing since the early 1950s. Moreover, contin- nomic expansion to date, growth in credit has ued vigor of the economy was accompanied by been exceptionally rapid, and many households signs of some further lowering of inflationary and businesses have accumulated substantial inexpectations. Aggregate price measures rose debtedness, often in short-term or variable-rate around 4 percent last year, about the same as forms that make them especially vulnerable to during the two preceding years. While prices of unexpected economic developments. Also, deservices continued to rise 5 to 6 percent, prices spite the impetus from strong U.S. demand, of many goods were relatively flat, and underly- growth in economic activity has been limited in a ing wage trends seemed to be moderating. number of important industrialized countries; Economic growth had been extraordinarily and many developing countries, in Latin Amerirapid in the first half of 1984, and then slowed ca and elsewhere, are still struggling to restore abruptly around midyear. Although some slow- satisfactory growth. While progress was made in ing in growth was widely anticipated, the abrupt- stabilizing the external finances of some of the ness of the change raised some question about largest of those countries, that progress can only the continuing strength of expansionary forces. be secure in the context of greater stability in However, during the last few months of the year, their own economies and of sustained growth in output and employment were clearly rising, the industrialized world. though at a more moderate pace than earlier in Many of the problems afflicting particular inthe year. dustries have causes and complications that, at The strong gains in overall activity during the least in part, must be dealt with in direct and year drew attention away from a number of specific ways. But it is also evident that the continuing problems, but those problems are enormous imbalances in our federal fiscal posnonetheless real and serious. The overall rate of ture and in our trade and current account posiunemployment is still uncomfortably high and tion have aggravated the problems and made the joblessness among certain groups—for exam- constructive solutions much more difficult. In an ple, teenagers and blacks—remains well above expanding economy requiring more private credit, the need to finance the large federal deficits has contributed to the pressures that have held 1. The charts to the report are available on request from real interest rates at historically high levels. The Publications Services, Board of Governors of the Federal failure to deal with budgetary deficits also has Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

188 Federal Reserve Bulletin • April 1985 sustained doubts in the minds of the public about while, some imbalances in business inventories the ability of the government to continue to curb that developed during 1984 appear to be well inflation over the long run. along in the process of correction, and in some The large federal deficits are mirrored in our sectors inventories are quite lean relative to external imbalance. Many foreign investors have sales. Many states and localities are experiencing been attracted to the comparatively high real an improvement in their finances, which porrates of return offered on dollar-denominated tends further support to the expansion from that assets, and U.S. lending abroad has been re- sector. And, at the federal level, there continues duced. Other forces stimulating capital inflows to be a strongly stimulative thrust from fiscal have been at work as well, including political and policy. economic uncertainties in other countries and The smallest increases in nominal wages and the relative stability and vigor of our economy. compensation in more than a decade have been The shift in capital flows has supplemented do- accompanied by an improvement in productivity mestic saving and helped finance the federal and downward pressures on energy and comgovernment deficit and private investment. But, modity prices. These developments help support at the same time, the strong demand for the the possibilities of continuing restraint in price dollar has driven its value on foreign exchange increases. Also, in the context of an economy markets to extremely high levels. As the dollar expanding at a sustainable rate, they are consishas appreciated, the demand for our exports has tent with continuing growth in average real insuffered and our purchases of imported goods come. have increased dramatically, resulting in strong Taking account of these factors, the members competitive pressures on the manufacturing, of the Federal Open Market Committee (as well mining, and agriculture sectors and leading to as Federal Reserve Bank Presidents who are not calls for protectionist measures. Moreover, the at present FOMC members) now foresee the capital inflows lead to mounting financial claims probable continuation of the economic expanof foreigners that the nation must be prepared to sion through its third year, although at a more deal with in future years, through reduced im- moderate pace than in the first two years. The ports or increased exports, in either case lower- central tendency of the members' forecasts indiing domestic consumption. cates the probability of an increase in real gross national product of between V/i and 4 percent this year. The unemployment rate is expected to The Economic Projections of the FOMC decline in 1985 to a level of between 63/4 and 7 percent by the fourth quarter. At the same time, Notwithstanding the risks associated with the most members expect general measures of price domestic and international problems just out- inflation to remain close to recent trends. lined, the weight of the evidence points to rea- When considering the general outlook for sonably favorable near-term prospects for aggre- 1985, members of the FOMC recognized that gate economic performance. In recent months, persisting problems could become aggravated for personal income growth has been strong, reflect- particular sectors of the economy, and that there ing continuing substantial gains in employment are risks for the economy as a whole. Clearly, and helping to support consumer spending. there is growing distress in many farm communi- Overbuilding of multifamily residential units and ties. Incomes from farming have been low, land offices in some parts of the country may pose prices are falling, and many producers face questions about the outlook in these areas, but heavy debt burdens. In the household and busithe lower interest rates that developed over ness sectors, higher levels of indebtedness are recent months suggest that single-family home- unlikely to forestall further gains in spending, but building may strengthen. Surveys of businesses unless moderated, they would in time add to indicate plans for continued growth in plant and financial pressures. equipment spending in the coming months, Favorable price performance has been encourthough at a slower pace than last year; mean- aged by the strength of the dollar in the exchange Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 189 Economic projections for 1985 FOMC members and other FRB Presidents AAddmmiinniiss-- CCoonnggrreessssiioonnaall IItteemm ttrraattiioonn BBuuddggeett OOffffiiccee r. „ Central ^ tendency Change, fourth quarter to fourth quarter (percent) Nominal GNP 7 to 8'/2 7'/: to 8 8.5 7.7 Real GNP 3'/4 to 4'/4 3'/2 to 4 4.0 3.4 GNP deflator 3 to 4V4 3V2 to 4 4.3 4.2 Average unemployment rate in the fourth quarter (percent) 6V2 to 7'/4 63/i to 7 6.9 7.0 markets. A sharp and large reversal of that through the fourth quarter of 1985, the same as strength could be reflected in at least temporarily that tentatively selected last July; (2) established stronger inflationary pressures. Greater confi- target ranges of 6 to 9 percent and 6 to 9,/2 dence in prospects for price stability is, of percent for M2 and M3 respectively, Vi percentcourse, dependent over time on suitably re- age point higher at the upper end of the range strained growth in the money supply; and that than that tentatively set in July; and (3) set an necessary approach and more moderate real in- associated monitoring range of 9 to 12 percent for terest rates would be facilitated by effective the debt of domestic nonfinancial sectors, 1 action to reduce substantially the size of federal percentage point higher than tentatively indicatbudget deficits in the upcoming and subsequent ed. The upper end of the range for Ml is 1 fiscal years. Action to restore balance in the percentage point below that of 1984, and the government's fiscal position is important to the range for M2 is the same as last year's. The achievement of an environment conducive to upper end of the target range for M3 is slightly stable, strong economic growth. In their fore- above that for last year. That increase, as well as casts, the Committee members assumed that the the upward adjustment in the associated moniexchange rate would remain within the range of toring range for the debt of domestic nonfinancial recent months and that effective fiscal action is in sectors, reflects analysis of developments during prospect. 1984 suggesting that growth somewhat greater The "central tendency" forecast of the FOMC than anticipated earlier may be consistent with members is broadly consistent with that of the Committee objectives for the year. Expansion administration, as indicated in the Economic within these ranges would represent a significant Report of the President, and that of the Congres- deceleration in the actual growth of M3 and debt sional Budget Office. The Administration's pro- from the experience of last year when the target jections for both real GNP growth and inflation ranges were exceeded. do fall, however, toward the upper part of the In formulating these objectives, the Commitranges of Committee members' forecasts, while tee assumed that no new statutory or regulatory the CBO's estimate of real growth is a bit lower developments would be enacted that would apthan the central tendency range of the FOMC. preciably influence the behavior of the monetary and credit aggregates in 1985. Although at the beginning of the year the minimum denomination THE FEDERAL RESERVE S OBJECTIVES of Super NOW and money market deposit ac- FOR MONEY AND CREDIT IN 1985 counts was reduced from $2,500 to $1,000, to date the promotional activity accompanying this At its meeting of February 12-13, the FOMC set change has been minor, and it appears that Ml monetary and credit growth ranges for 1985 and M2 have not been affected significantly. designed to be consistent with further sustain- On average, the behavior of Ml velocity— able economic growth and progress toward rea- nominal GNP divided by the money stock— sonable price stability over time. Specifically, during 1984 was broadly consistent with previous the Committee (1) set a growth range for Ml of 4 cyclical patterns. Together with other evidence, to 7 percent from the fourth quarter of 1984 this development suggests that the factors re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

190 Federal Reserve Bulletin • April 1985 sponsible for the highly unusual velocity behav- particularly strong in recent months, reflecting ior over 1982 and early 1983 have receded. the unusually favorable yield spreads in favor of Nonetheless, a range of uncertainty inevitably monetary assets that emerged temporarily toremains about the trend of Ml relative to nomi- ward the end of last year; open market interest nal GNP in light of recent deposit deregulation rates dropped more swiftly than rates offered by and other financial innovations that have affected depository institutions on retail deposits and the funding policies of banks and the cash man- returns on money market mutual funds. In addiagement practices of the public. On balance, it tion, M3 growth has reflected substantial issuappears likely that the process of deposit deregu- ance of large CDs by thrift institutions to support lation will lead to a trend rate of increase in the their lending in mortgage and consumer loan velocity of Ml that may be somewhat lower than markets. in the period as a whole since World War II. Growth of the broader monetary aggregates is However, in view of the multiplicity of changes influenced, as well, by the pattern of internationin financial instruments and practices that influ- al capital inflows associated with the huge curence the behavior of all the monetary measures, rent account deficit. Domestic banks may contininterpretation of all the aggregates will continue ue to borrow sizable amounts of Eurodollar to be made within the context of the outlook for funds from their foreign branches and unaffiliateconomic activity, inflationary pressures, and ed foreign banks; such borrowings are not inconditions in domestic and international financial cluded in the measured monetary aggregates. By markets, including the strength of credit de- reducing the need for funding through other mands. managed liabilities included in M2 and M3, these The new target range of 4 to 7 percent for Ml inflows tend to restrain measured monetary encompasses growth in Ml consistent with ve- growth in relation to growth of bank credit and of locity expansion over the coming year approxi- credit generally. Moreover, many domestic bormating that of last year, and also higher Ml rowers, including the federal government and growth than would be needed should velocity private corporations, may continue to tap overgrow at a rate approximating the reduced trend seas securities markets directly, reducing the suggested above. The movements in velocity need for credit expansion by U.S. intermediarduring 1984 occurred in a context of moderate ies. increases in interest rates over much of the year; Given the federal budget deficit as projected however, velocity has slowed substantially in by the administration for 1985—as well as a recent months in the context of an appreciable likely expansion of spending by domestic sectors rise in money growth and following declines in in excess of nominal GNP growth, as part of that interest rates. In all the circumstances, a some- spending flows abroad—the Committee contemwhat higher rate of money growth than implied plates that domestic nonfinancial debt may conby straight-line projections from the fourth quar- tinue to increase more rapidly than nominal ter 1984 base to the targets for the fourth quarter GNP. Still, actual growth of debt in 1985 should of 1985 may be appropriate early in the year, but be markedly less than in 1984, as nominal GNP growth of Ml would be expected to slow, and growth and overall credit demands moderate. velocity growth to rise, as the current adjust- Growth within the debt range for 1985 assumes ments are completed. Thus, as the year pro- also a slowing in credit for mergers, leveraged gresses, growth of Ml would be expected to buyouts, and other financial restructuring. Such move gradually toward and into the FOMC's credit led to some erosion in corporate equity target range. Depending upon developments with cushions last year, and a more cautious approach respect to velocity and price behavior, growth of is anticipated this year. Ml and of the other monetary aggregates in the The outlook for financial conditions generally upper parts of their ranges may be appropriate is again expected to be affected importantly by over the year as a whole. Those developments current and prospective federal budget deficits, will, of course, be closely monitored over the which will remain enormous in comparison with year. experience in previous economic expansions. Like Ml, growth of M2 and M3 have been This massive federal borrowing will compete for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 191 available domestic savings with the strong pri- ment in the economy as well as the adjustments vate credit demands accompanying further of wages in some sectors to the realities of forces growth of economic activity, keeping interest associated with deregulation and foreign comperates and exchange rates higher than they other- tition. Wage changes also reflected the favorable wise would be. Such relatively high interest rates feedback effect of lower inflation on anticipatory and exchange rates limit expansion in those or catch-up pay demands. sectors that are most sensitive to the cost of Although the nation as a whole has made credit and impair the competitive positions of substantial progress in the past two years toward domestic import-competing and export indus- the goals of sustained growth and high employtries. Decisive and credible actions to reduce ment along with price stability, important segfederal budget deficits would have favorable ments of the economy have continued to experieffects on investors' expectations and help to ence considerable difficulty. One symptom of lower interest rates, especially longer-term rates, continuing imbalances has been interest rates even before these reductions become fully effec- that, relative to the prevailing rate of inflation, tive. Such actions would work to relieve the have remained exceptionally high by historical imbalances and strains within the economy, con- standards. However, after moving upward durtribute to further abatement of inflationary ex- ing the first half of the year when economic pectations, and so reinforce the prospects for expansion was especially brisk, interest rates continued growth and stability. retraced their advances in the second half of the year. At year-end, they were, on balance, a little lower. THE PERFORMANCE OF THE ECONOMY IN 1984 Federal government tax and spending policies have provided substantial stimulus to aggregate The economy recorded major gains in 1984, with demands for goods and services, but in credit the real gross national product up 5VI percent and markets the deficits have added strongly to the the unemployment rate down more than 1 per- demands for funds and have been one important centage point over the year. The growth in force keeping interest rates high. Moreover, output and employment was exceptionally strong there is general agreement that, unless legislative in comparison with experience in other post- measures are enacted, budget deficits are likely Korean War expansions. But even more striking, to increase further, even in the context of a in terms of its departure from past norms, was reasonably growing economy. This prospect, the extraordinary rise in domestic spending, with its implication of continuing pressures on which again appreciably outstripped growth in the supply of savings, has been a factor in the domestic production. Over the course of the year rise in the foreign exchange value of the dollar such spending rose about &A percent in real and the attendant emergence of enormous defiterms. Consumers and businesses purchased cits in our trade and current accounts with other greatly increased quantities of imported goods, nations. Although, as noted above, the sharply whose relative prices were lowered by the appre- higher value of the dollar has been an important ciation of the dollar in exchange markets, and the factor in the movement toward price stability, U.S. trade deficit reached record proportions. inflationary pressures could become more apparent if the U.S. dollar were to decline sharply—a Last year's economic gains were achieved risk that could increase as fundamentally unsuswithout a pickup in inflationary pressures, in part tainable fiscal and external postures are extendowing to the rise in the exchange value of the ed. dollar. Aggregate indexes of prices rose about 4 percent or less, similar to rates of inflation recorded in 1983. Ample availability of industrial The Household Sector capacity here and abroad helped to contain price increases. Labor cost pressures also were limit- The household sector continued to benefit last ed, as wage increases actually were slightly year from the economic expansion. Adjusting for lower than a year earlier. Labor markets contin- inflation, the rise in disposable income from the ued to reflect the still considerable unemploy- fourth quarter of 1983 to the fourth quarter of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

192 Federal Reserve Bulletin • April 1985 1984 was 53/ percent, surpassing the large gain in The second year of strong growth in income 4 1983. This strong increase in income supported a and spending was accompanied by significant rapid rise in spending for consumer goods even changes in household balance sheets. Late in as the personal saving rate rose. 1983 and in the first half of 1984, financial assets Household sector outlays in this expansion declined relative to income—owing primarily to have been tilted more toward durable goods than the sluggish performance of stock prices—retrachas been typical. In the 1980-82 period, a time of ing a portion of the strong gains made earlier in relatively slow income growth and high unem- the recovery. However, the subsequent rise in ployment, consumers had curtailed discretionary equity prices helped to restore household asset purchases of household goods. Since the end of positions to their previous high levels, and since 1982, however, strong employment and income the turn of the year, with stock prices up sharply, growth and rising consumer confidence have asset positions have improved further. Meanbeen translated into an appreciable restocking of while, growth of household indebtedness picked household durables. up noticeably last year, and consumer install- The strength of automobile purchases in 1984 ment debt as a share of disposable income moved was a part of this restocking process. As the to near its previous peak in the late 1970s. stock of existing autos has aged, replacement Despite the rise in indebtedness, there were demand has grown. Most recently, reductions in few signs of increased financial stress in the gasoline prices have lowered operating costs. household sector. The incidence of payment Automobile sales in 1984 rose to 10V2 million difficulties on consumer installment debt reunits, the highest level since 1979. The foreign mained historically low, and home mortgage share of the market declined, owing in large part delinquency rates were about unchanged for the to the impact of limitations on Japanese units year as a whole. Nonetheless, the proportion of during a period of expanding sales. Indeed, de- problem loans in the home mortgage market has mand for domestic autos proved to be so strong not receded from its recession high, and there is that producers had difficulty supplying many of some special concern about future prospects in the more popular models, even though auto this area owing to the added risk exposure of companies operated some factories at near full homeowners who took on mortgages carrying capacity over most of the year. Total auto pro- adjustable features, especially those made with duction was up 14 percent from the preceding sizable initial interest rate concessions. The susyear, despite brief strikes in the autumn. tained high level of mortgage loan delinquencies Spending for new homes slowed over the to date appears attributable not so much to course of 1984, with rising mortgage interest adjustable-rate loans as to a combination of rates through midyear a factor reducing housing unemployment that is still high and real estate activity. However, there were some initial signs prices that are more stable than some borrowers of improvement in the housing sector at year- had anticipated. end, associated with earlier declines in interest rates during the fall. From the fourth quarter of 1983 to the fourth quarter of 1984, residential The Business Sector construction outlays, in real terms, were up 3Vz percent after an extremely rapid advance in 1983. The increase in business spending for plant and For 1984 as a whole, 1.7 million new housing equipment was greater in 1984 than in 1983. In units were started. This was below the peak rates fact, the rise in gross business capital outlays in the 1970s, but a marked improvement over the over these two years combined was much larger performance of the first years of the 1980s, as than in any other economic expansion since housing demand continued to be supported by World War II. Profits in the nonfinancial corpofavorable demographic factors and expanding rate sector were up substantially in 1984, alincomes. Moreover, relatively stable house though by year-end the level had fallen back a bit prices and the growing use of adjustable-rate owing to the slowing in sales growth. mortgages made home purchases more accessi- Growth in business fixed investment spending ble for many households. was strongest in the first half of the year, but Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 193 continued at a double-digit pace in real terms in paper to total debt of nonfinancial corporations the second half. For the year as a whole, large rose, as did the ratio of debt to equity. gains were registered for both equipment and Severe financial strains, in many cases related structures outlays. The ebullience of total spend- to the high exchange value of the dollar, persisting reflected a number of factors, including the ed in some of the nation's basic industries. more favorable tax laws enacted in 1981, the Farmers continued to face less favorable export desire to take advantage of technological ad- conditions than in much of the previous decade, vances, and the further narrowing of the margin land prices fell farther, on average, and farm of unused factory capacity under strong demand income remained depressed. As a result, farmers growth. Continued competitive pressure from with large volumes of debt remaining from the foreign producers provided additional impetus late 1970s continue to face serious debt-servicing for rapid modernization. At the same time, many problems. The metals, agricultural implements, U.S. producers of capital equipment, especially and some equipment industries also continue to outside the "high tech" area, did not fully bene- face significant problems. fit from this spending. Instead, foreign manufacturers captured an increasing share of capital The Government Sector goods purchased by U.S. firms; for domestic equipment spending, this share—approximately The expanding economy lifted federal govern- 25 percent—was nearly twice that experienced in ment receipts in 1984. At the same time, outlay the late 1970s. growth was limited by further declines in reces- Businesses accumulated inventories in 1984 sion-related expenditures and by a drop in agriafter reducing stocks in the preceding two years. cultural support payments. Nonetheless, the fed- In real terms, business inventories rose $24 bil- eral budget deficit remained enormous—more lion, a historically large gain. Those gains were than 5 percent of GNP and larger than total concentrated largely in the first half of the year, domestic personal saving. Moreover, at the end alongside the rapid pace of the expansion of final of the year the deficit was again rising. demand. When sales growth slackened in the Federal government purchases of goods and summer and autumn, businesses quickly cut services, the component of the budget that diback on orders and production to avoid severe rectly adds to GNP and accounts for about a imbalances. third of total federal outlays, rose strongly last In order to finance the combined increase in year. Excluding changes in Commodity Credit capital spending and inventory investment, busi- Corporation farm inventories, federal purchases nesses relied heavily on external sources of were up nearly SVi percent, after adjustment for credit. Nonetheless, gross issuance of new equi- inflation. A major thrust to federal purchases ty weakened as stock prices declined early in the came from defense spending, which increased year and then failed to surpass earlier highs when almost 7 percent in real terms. they rallied in the summer. After accounting for At the state and local government level, real the retirement of equity associated with merger purchases of goods and services rose V/i percent activity and share repurchases, the net issuance in 1984, following two years of no change. The of stock was decidedly negative. Shorter-term renewed growth in such spending followed an borrowing was favored by businesses in the first appreciable improvement in this sector's fiscal half of 1984, as firms elected to finance mergers position: state and local governments experiinitially through bank loans and commercial pa- enced a sizable operating and capital surplus in per, and the high level of long-term interest rates 1983 and early 1984 owing to the effects of the discouraged bond issuance. In the second half of economic recovery as well as to increases in tax the year, merger financing slowed and the de- rates. cline in interest rates contributed to some movement toward longer-term debt issuance. Even so, The Foreign Sector the traditional balance sheet ratios used to assess aggregate business financial strength worsened The appreciation of the dollar over the past four over the year: the ratio of loans and short-term years directly contributed to the imbalance be- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

194 Federal Reserve Bulletin • April 1985 tween exports and imports in 1984. On a trade- employment prospects, growth of the labor force weighted average basis, the dollar climbed a picked up last year. But the number of new jobs further 12 percent during the course of the year, expanded even more rapidly, and the unemploybringing the cumulative appreciation since the ment rate was 7.2 percent in the fourth quarter, end of 1980 to about 65 percent, and the rise has more than a percentage point below the rate at continued into 1985. Part of the dollar's strength the end of 1983. Indeed, since the recession low in the first half of last year may have been in late 1982, nonfarm payroll employment has generated by a widening of the differential be- increased nearly 7 million, the largest two-year tween real interest rates in the United States and gain in three decades. real rates abroad; however, the influence of this In 1984, employment growth continued to be factor appears to have been reversed in the widespread across industries. The trade and sersecond half of the year. The relative dynamism vice sectors each added more than one million of the U.S. economy and success in curbing jobs. And there was a gain in construction eminflation helped attract capital from abroad. Con- ployment, owing in large part to a rise in nonresiversely, relatively slow economic growth else- dential building. Government employment was where and economic and political uncertainties up a quarter of a million, reflecting the rise in in various countries also may have contributed to spending by state and local units. The manufacthe dollar's appreciation throughout the year. turing sector, which has borne the brunt of Notwithstanding a further weakening of the increased foreign competition, registered a large international competitive position of U.S. firms increase of almost three-quarter million in 1984; owing to the dollar's appreciation, and despite even so, the level of manufacturing employment the sluggishness of foreign economies, the vol- remained below its pre-recession peak. ume of U.S. merchandise exports increased 9 Wage developments in 1984 were more favorpercent in 1984. Exports to Canada, some of able to the control of inflation; even though labor which are reimported after further fabrication, market slack was reduced substantially further accounted for about a third of the rise, with during the year, wage rates increased less than in Western Europe and Mexico receiving most of 1983. The employment cost index, a comprehenthe remainder of the increase in exports. Eco- sive measure of change in wages and benefits, nomic growth in many developing nations, oil- rose just 4 percent in 1984, nearly 1 percentage producing as well as others, was limited by their point less than the year earlier. Moreover, major debt servicing problems, and demand by those collective bargaining agreements during the year countries for U.S.-produced goods remained showed no acceleration in nominal wage rates, generally depressed. even in those industries with improved economic The vigorous expansion of the U.S. economy conditions. and the strength of the dollar pushed the volume These wage developments suggest that inflaof merchandise imports sharply higher. Consum- tionary expectations continued to moderate this er goods, materials, and capital equipment past year; to an increasing degree, workers and shared in the increase. The merchandise trade managers now appear to be focusing on improvdeficit rose to about $110 billion. In addition to ing job security and on enhancing productivity, the growing trade deficit, net service receipts often in an attempt to remain competitive with were reduced, and the current account deficit foreign producers. Productivity increases in 1984 was about $100 billion in 1984, compared with were substantial in the first half of the year, when $42 billion in 1983. output grew rapidly, and helped keep overall cost pressures down. Over the course of the year, labor productivity increased 2lA percent, Labor Market Developments partly reflecting a cyclical adjustment to higher levels of output as well as some improvement apparently in the underlying trend rate of growth Developments in labor markets continued to be from the very low pace of the 1970s. The combifavorable during the second year of expansion. nation of moderate compensation increases and Reflecting the strength of activity and improved Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 195 favorable productivity developments held down MONETAR Y POLICY AND FINANCIAL cost pressures on prices; unit labor costs rose 2 DEVELOPMENTS IN 1984 percent over 1984, less than a fifth of the rate experienced in 1979 and 1980. Monetary policy in 1984 aimed basically at supporting sustainable economic growth within the context of long-term progress toward price sta- Price Developments bility. The target ranges for the monetary and credit aggregates chosen by the Federal Open Over 1984, the consumer price index rose 4 Market Committee last February, and reaffirmed percent and the implicit deflator for the gross in July, called for growth rates V2 to 1 percentage national product VA percent. The increases in point below those set for 1983. Measured from these broad indexes represent little change from the fourth quarter of 1983 to the fourth quarter of inflation rates that have prevailed since the be- 1984, the target ranges for the monetary aggreginning of the expansion. The producer price gates were 4 to 8 percent for Ml, and 6 to 9 index for finished goods, which excludes the percent for M2 and M3. The associated monitorprices of services, rose less than 2 percent last ing range for the debt of domestic nonfinancial year; basic commodity prices, which had ad- sectors was fixed at 8 to 11 percent. vanced more than 30 percent early in 1983, fell Underlying these objectives was the Commitduring most of 1984. tee's expectation that the special factors distort- The relative softness of demand in worldwide ing monetary growth rates in 1982 and 1983 markets and the strength of the dollar against would be less important in 1984, and that relaforeign currencies played a large role last year in tionships among the monetary aggregates—parholding down prices of basic commodities. Im- ticularly Ml—and economic activity and inflaportantly, energy prices, which have been a tion would be more consistent with historical major factor in inflation rate movements for trends and cyclical patterns. Portfolio adjustmore than a decade, moved down. The weakness ments associated with the previous introduction of demand during the recession and early recov- of new deposit accounts and with the steep drop ery period restrained energy prices in 1981 and in interest rates during the 1982 recession ap- 1982; moreover, conservation measures and ad- peared to have ended. Furthermore, the economditional oil production capacity in many coun- ic expansion seemed to be reducing uncertainties tries have continued to relieve energy price pres- about employment and income prospects that sures. earlier had boosted demands for liquid precau- Food prices at the retail level rose about in line tionary balances. with overall prices in 1984. Early in the year, Over the year, increasing evidence suggested food prices jumped sharply because farm sup- that Ml was in fact behaving more in line with plies were limited by the 1983 summer drought historical experience. As a result, this aggregate and a winter freeze. However, supplies again was given more weight in policy implementation became plentiful as the year progressed, reflect- than had been the case during the latter part of ing more favorable harvests and sagging export the cyclical downswing and the early phase of volume. the economic recovery. However, all of the Apart from the food and energy areas, con- monetary and credit measures continued to be sumer price inflation was little changed from a evaluated in light of the outlook for the economy year earlier. The rise in consumer goods prices and domestic and international financial marslowed appreciably, owing in part to the relative- kets. ly small increase in prices of imported goods, as well as the accompanying competitive pressures on domestic products. Service prices rose more Money, Credit, and Monetary Policy rapidly over 1984 than in 1983, although the rate of inflation in the sector remained well below The actual growth rates of Ml and M2 over 1984 those rates recorded in the early 1980s. were well within the target ranges established by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

196 Federal Reserve Bulletin • April 1985 the Federal Reserve, with Ml expanding 5.2 Growth of money and credit1 percent, somewhat below the midpoint of its Percentage changes range, and M2 increasing 7.7 percent, a bit above Domestic its midpoint. As had been anticipated in the Period Ml M2 M3 nonfinancial midyear policy report to the Congress, growth of sector debt M3 and domestic nonfinancial debt, at 10.5 per- Fourth quarter to fourth quarter cent and 13.4 percent respectively, exceeded 1979 7.5 8.1 10.3 12.1 their ranges.2 The relatively wide divergence 1980 7.5 9.0 9.6 9.6 1981 5.1 9.3 12.4 10.0 between M2 and M3 growth rates reflected main- (2.5)2 1982 8.8 9.1 10.0 9.1 ly substantial issuance of large CDs and other 1983 10.4 12.2 10.0 10.8 managed liabilities by thrift institutions and com- 1984 5.2 7.7 10.5 13.4 mercial banks in the face of heavy credit de- Quarterly growth rates 1984:1 6.2 7.2 9.2 12.9 mands. 2 6.5 7.1 10.5 13.1 3 4.5 6.9 9.5 12.7 Credit growth last year was the most rapid on 4 3.4 9.0 11.0 12.7 record, and much stronger relative to GNP expansion than historical trends would suggest. An 1. Ml, M2, and M3 incorporate effects of benchmark and seasonal adjustment revisions made in February 1985. unusually large volume of mergers and related 2. Ml figure in parentheses is adjusted for shifts to NOW accounts activity, including "leveraged buyouts," involv- in 1981. ing nonfinancial corporations accounted for percent, reversing two consecutive yearly deabout 1 percentage point of the growth of overall clines. The strengthening of velocity over 1984 debt. Around $75 billion of equity was liquidated apparently reflected, in part, some unwinding of in this process, with much of it replaced, at least the precautionary and other motives that had for a time, with short-term debt. In addition, swelled demands for liquid assets in 1982 and more than $10 billion of equity was retired early 1983, as well as the rise of short-term through corporate share repurchases, frequently interest rates in the first part of the year and, in in defensive maneuvers to ward off unfriendly the case of M2, the abatement of dramatic intakeover attempts. flows to money market deposit accounts Even after allowance is made for the unusually (MMDAs) associated with the initial authorizalarge volume of merger-related borrowing, it is tion of these accounts. clear that total credit demands were exception- Demands for Ml balances, and for bank really strong last year. Federal debt expansion, at serves to support deposit growth, were robust more than 16 percent, was unprecedented for the early in the year as the economy expanded second year of an economic expansion, both in rapidly. Credit demands also were very strong, absolute terms and in relation to income. Private and market interest rates began rising even as the domestic nonfinancial debt grew about 11 Vi per- Federal Reserve, through open market operacent (abstracting from growth of merger-related tions, was keeping the degree of pressure on debt issues), also faster than, but much closer to, bank reserve positions unchanged. In early comparable stages of previous recoveries. spring, with credit and money demands continu- The behavior of Ml velocity in 1984 was ing unabated and with economic growth continubroadly consistent with past cyclical patterns. In ing at an extraordinary pace, the FOMC adopted contrast to the unusual weakness of the previous a somewhat more restraining posture toward two years, Ml velocity in 1984 increased 4 supplying reserves, and both short- and longpercent, only a little above the average rate of term interest rates rose further as banks relied growth during the second year of previous eco- more heavily on discount window credit to meet nomic expansions. M2 velocity increased Wi their reserve needs.3 Borrowing for adjustment and seasonal purposes increased to around $1 2. The figures cited herein for the monetary aggregates are based on recent benchmark and seasonal adjustment revi- 3. Annual seasonal and benchmark revisions to the monesions. Before those revisions, the 1984 increases were mea- tary aggregates subsequently lowered somewhat the growth sured at 5.0 percent for Ml, 7.5 percent for M2, and 10.0 of Ml in the first half of 1984 relative to what was estimated percent for M3. during the period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 197 billion in March and April after averaging about range. However, by late August and early Sep- $650 million during the first two months of the tember, as evidence appeared of much slower year. In April, the discount rate was raised Vi economic growth, with financial tensions high percentage point, to 9 percent, to bring this rate and with the dollar rising rapidly on foreign into better alignment with short-term market exchange markets, the Federal Reserve moved rates. to lessen the degree of restraint on bank reserve Despite the absence of any further tightening positions. That process continued through much of reserve availability by the Federal Reserve, of the rest of the year. Borrowing at the discount pressures on private short-term interest rates window receded, reaching levels of around $575 intensified around early May in reaction to the million by late in 1984 and dropping further to well-publicized liquidity problems of Continental around $340 million, on average, during January Illinois Bank.4 Uncertainties related to the inter- 1985. Total reserves and nonborrowed reserves, national debt situation also added to market which had shown little expansion since June, concerns. In this environment, quality differen- increased markedly in the final two months of the tials between yields on private money market year and into early 1985. instruments and Treasury securities widened Mirroring the easing of reserve market condisubstantially. tions, short-term interest rates dropped consider- While Ml growth early in the year remained in ably from their late-summer highs. Moreover, the upper part of the FOMC's target range, M2 quality spreads on various money market instruincreased at a pace slightly below the midpoint of ments returned to within normal ranges as the its range even as the economy expanded rapidly. strains related to the problems of Continental Growth in M2 relative to income may have been Illinois Bank remained contained and progress damped by substantial inflows to IRAs and was made in Latin American debt negotiations. Keogh accounts, which are excluded from the Responding to the provision of reserves and the monetary aggregates. Also, as market interest reduced rates on alternative outlets for liquid rates firmed, sizable spreads developed between funds, Ml-type balances rose rather sharply in these rates and yields on retail deposits and late 1984 and early 1985. Growth of M2 also was money market mutual funds, likely encouraging very rapid, as open market interest rates fell some investors to place funds directly in credit below average yields on MMDAs, small-denomimarket instruments. M3, meanwhile, pushed nation time deposits, and money market mutual above its longer-run range, as banks and thrift fund shares. institutions issued large CDs and other managed The easing in financial markets during the liabilities to accommodate rapidly rising credit second half of 1984 was reflected in, and to an demands. extent encouraged by, two successive reductions After midyear, economic expansion slowed in the discount rate, first to 8!/2 percent in Nomarkedly, particularly during the summer, tend- vember and then to 8 percent in December. By ing to reduce transaction demands for money. year-end, short-term interest rates were 2xh to Growth in M3, though remaining somewhat 31/2 percentage points lower than they had been above the upper limit of its range, also moderat- during the summer, and V* to V/2 percentage ed as demands for short-term business credit points below their levels at the beginning of the slackened and as some banks adopted more year—in some cases near their cyclical lows of cautious lending and funding policies in light of early 1982. the strains on financial markets. Long-term interest rates also declined in the Initially, the slowing in Ml was not resisted, as second half of the year, in part reflecting some it reversed a bulge that had brought Ml growth moderation of inflationary expectations. But for well above the midpoint of the FOMC's target the year as a whole, most long-term rates declined less than V2 percentage point, and remained above their earlier cyclical lows. The still 4. Large discount window borrowing by Continental Illirelatively high level of long-term rates appears to nois Bank, beginning in May, was offset in terms of its impact on overall reserve supplies through open market operations. be influenced by the continuing budgetary uncer- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

198 Federal Reserve Bulletin • April 1985 tainties, current strong demands for total credit, depository institutions. As the year wore on, and lingering, though lessened, fears of inflation. there were signs of more forceful efforts to deal with these problems and their consequences. Loan-loss provisions were significantly in- Other Developments in Financial Markets creased, and steps are being taken to correct weaknesses in credit standards. The largest bank Foreign savings financed a large share of the holding companies generally improved their capdomestic borrowing in 1984. Net inflows of capi- ital positions over the year, partly in response to tal from abroad were more than double the supervisory guidelines to raise capital ratios. already advanced pace of 1983, thus supplement- These approaches will take time to bear full fruit, ing domestic saving and enabling the financing of and progress in strengthening balance sheets will the massive federal deficits at the same time that be dependent on reasonable profitability as well private investment expanded rapidly. Banks con- as on developments external to the banking tinued to intermediate substantial amounts of system. In that connection, the strains in agriculthese inflows, and sales of Eurobonds by U.S. tural areas, on heavily indebted foreign councorporations reached record levels. Direct in- tries, and in sectors of the energy industry pose vestment in the United States also was very continuing challenges. strong, reflecting several large takeovers of do- In long-term markets, municipal bond offermestic firms by foreign corporations. ings achieved new highs in 1984. Tax-exempt Much of the credit market borrowing—partic- offerings were relatively light over the first half ularly that related to merger activity—was at of the year as authority to issue single-family short term. Commercial paper debt of nonfinan- housing revenue bonds lapsed and as the market cial businesses surged more than 50 percent, anticipated the imposition of retroactive ceilings offsetting two consecutive years of runoffs. With on issuance of industrial development bonds strong loan demands in business, real estate, and (IDBs). But volume rebounded in early summer consumer areas, total loans at commercial banks after passage of the Deficit Reduction Act, which grew more than 14 percent. reauthorized housing bonds and stimulated a Given only moderate inflows to core deposits flood of issues toward year-end to avoid stricter in the face of this brisk loan growth, commercial rules for IDBs and student loan bonds, effective banks increased their outstanding CDs in 1984 January 1, 1985. Financial and nonfinancial cormore than 14 percent, after having allowed a porations also raised record amounts through large volume of CDs to run off during 1983. bond offerings; however, the maturities of new Credit growth at banks was especially rapid issues tended to be much shorter than in previduring the first half of last year, reflecting a wave ous years, and many offerings carried provisions of bank-financed mergers. The bulk of the CD that essentially transformed these obligations issuance was concentrated in this period and into short-term or variable-rate debt. likely would have been even greater had not Variable-rate instruments exhibited increasing banks also borrowed heavily from their foreign popularity within the home mortgage sector as offices. In the second half, loan expansion slack- well. Adjustable-rate mortgages (ARMs) acened appreciably, and large time deposit growth counted for almost two-thirds of the number of tapered off, as some earlier merger-related loans conventional first mortgages on homes at major were repaid with the proceeds from issuance of institutional originators in 1984, up considerably commercial paper and other debt obligations and from only one-quarter of such originations the from selective sales of assets of the merged previous year. Thrifts, in particular, preferred to companies. acquire ARMs rather than fixed-rate mortgages Strains on some sectors of the economy, as in an attempt to reduce their already acute expowell as the effects of overly aggressive lending sure to interest rate risk. The widespread acceppolicies by some institutions, continued to be tance of ARMs by consumers was attributable reflected in relatively high levels of nonperform- partly to substantial initial rate advantages ofing and other troubled loans in a number of fered on ARMs compared with fixed-rate mort- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 199 gages, as well as to other features that limited underwriting of ARMs by private mortgage inborrower exposure to higher future interest pay- surers. Yet, despite the shift toward ARMs durments, at least for several years. Large initial ing 1984 and increased consumer and business rate discounts became less prevalent after the lending, the assets of thrifts remained heavily adoption of somewhat tighter standards both for concentrated in relatively low-yielding instrupurchases by federal credit agencies and for the ments. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 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. STUDY SUMMARY COMPLIANCE COSTS AND CONSUMER BENEFITS OF THE ELECTRONIC FUND TRANSFER ACT: RECENT SURVEY EVIDENCE Frederick J. Schroeder—Staff, Board of Governors Prepared as a staff study in the fall of 1984. An understanding of the economic and institu- conducted a survey of financial institutions in tional effects of the Board's consumer protection 1981-82. Respondents represented a wide varieregulations is important if the Board is to carry ty of sizes, geographic regions, state branching out the responsibilities given to it by the Con- laws, and bank holding company affiliations. The gress. The Board requires information on com- results of the survey are analyzed in this study. pliance efforts to ascertain that statutory con- The survey was designed to determine start-up sumer protections are implemented and that and ongoing compliance costs separately. Severregulations are not unduly burdensome or com- al conclusions may be drawn. Larger institutions plex. Furthermore, recent laws require that the tended to have higher ratios of start-up costs to Board review all of its regulations with a view to ongoing costs. Smaller institutions devoted, on minimizing compliance costs and eliminating un- average, greater shares of their expenditures for necessary burdens that compliance imposes on compliance to legal, administrative, and training small businesses. costs than larger institutions did. For all institu- The number of financial institutions offering tions as a group, the change in data processing electronic fund transfer (EFT) services, the num- systems was the most expensive start-up funcber of consumers demanding those services, and tion, and labor was the most costly ongoing the volume of consumer electronic transactions function. Larger institutions tended to have lowhave steadily accelerated in the past decade. er compliance costs per EFT transaction and per This study examines the compliance costs and million dollars of total deposits; a possible inferconsumer benefits of Regulation E, which regu- ence is that some small institutions experience a lates consumer EFTs. To ascertain the costs of cost disadvantage in compliance. complying with Regulation E, the Board's staff Econometric estimation of a cost relation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

201 showed that start-up compliance costs varied dence of economies of scale in compliance and directly and significantly with the size of con- imply that, as EFT transactions increase in volsumer transaction deposits and with the provi- ume and importance at an institution, average sion of automated teller machines. Ongoing com- compliance cost per transaction is likely to fall. pliance costs varied directly and significantly Consumer rights in EFT do not appear to be a with the number of EFT transactions. There was problem, and available evidence indicates that no indication that the deposit growth rate, the the number of account errors and unauthorized branching structure of the institution, or the size transfers is negligible both in absolute terms and of the parent firm significantly affected compli- relative to the volume of EFT transactions ocance costs. The econometric results provide evi- curring in the payments system. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

202 Industrial Production Released for publication February 15 the index for January was 5.1 percent above a year earlier. Industrial production increased an estimated 0.4 In market groupings, output of consumer percent in January following gains of 0.5 percent goods rose 0.7 percent in January as production in December and 0.4 percent in November. The of durable consumer goods increased 2.0 peroverall rise for January is based on strong gains cent. Automobiles were assembled at an annual in automotive products, defense equipment, and rate of 8.6 million units in January following a energy materials, with relatively little change rate of 8.1 million in December. Production of elsewhere. At 166.6 percent of the 1967 average, home goods rose 0.5 percent. Nondurable con- 1967 = 100 1967= 100 All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: January. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

203 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Grouping 1984 1985 1984 1985 JJJaaannn... 111999888444 tttooo JJJaaannn... Dec. Jan. Sept. Oct. Nov. Dec. Jan. 111999888555 Major market groupings Total industrial production 165.9 166.6 -.6 -.4 .4 .5 .4 5.1 Products, total 169.2 170.1 -.5 .3 .5 .8 .5 6.5 Final products 167.7 168.8 -.3 .4 .7 .8 .7 7.2 Consumer goods 163.6 164.7 -.6 .0 .8 .4 .7 3.3 Durable 163.7 166.9 -1.8 -.6 2.1 1.0 2.0 2.1 Nondurable 163.5 163.8 .0 .2 .3 .2 .2 3.7 Business equipment.. 190.9 191.4 -.6 .5 .6 1.3 .3 12.1 Defense and space... 144.1 145.7 2.0 1.1 .9 1.3 1.1 13.6 Intermediate products.. 174.6 175.0 -1.2 .2 .2 4.3 Construction supplies 158.9 159.3 -1.7 .3 -.9 1.1 .3 2.4 Materials 160.7 161.3 -.7 -1.5 .1 .1 .4 3.0 Major industry groupings Manufacturing 168.0 168.4 -.2 .3 .2 5.6 Durable 159.2 159.8 .0 .3 1.0 .4 7.5 Nondurable. 180.7 180.8 -.5 .3 .4 .1 3.2 Mining 124.6 125.2 -4.0 1.0 -.2 .5 .3 Utilities 181.2 184.9 -.2 2.3 -1.9 2.0 2.2 NOTE. Indexes are seasonally adjusted. sumer goods increased slightly again in January. increased 0.4 percent, and nondurable goods Output of defense and space equipment contin- output was little changed. Steel production, alued to be strong, increasing 1.1 percent. Howev- though still at depressed levels, posted gains in er, business equipment rose only about 0.3 per- both January and December. Mining output rose cent following a gain of 1.3 percent in December. 0.5 percent in January. Utilities gained 2.0 per- Output of construction supplies also rose slightly cent, following a decline of 1.9 percent in the in January. Production of both durable and non- previous month, reflecting a larger-than-seasonal durable materials continued to show little shift to winter weather between December and change, but energy materials increased 2.2 per- January. cent in January. In industry groupings, manufacturing output rose 0.2 percent in January as durable goods Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Statements to Congress Statement by Paul A. Volcker, Chairman, Board world. To a considerable degree, the "buts" and of Governors of the Federal Reserve System, "ifs" are well understood. Yet, that intellectual before the Joint Economic Committee of the understanding will be for naught if the appropri- U.S. Congress, February 5, 1985. ate policy responses are lacking, whether because of unwarranted complacency bred by cur- I am pleased to appear once again before this rent performance, because of the inherent committee to discuss the economic situation. As political difficulty of reaching the necessary conyou know, the Federal Reserve will be submit- sensus, or because of some combination of the ting its semiannual report on monetary policy to two. the Congress in about two weeks. My testimony then will provide a full account of recent monetary developments and will report on the deci- EVIDENCE OF PROGRESS sions to be taken shortly by the Federal Open Market Committee regarding money and credit The clearest evidence of progress toward our targets for 1985. Therefore, in my prepared re- long-run aims lies in the combination of bettermarks this morning, I will limit myself to a than-anticipated growth and lower-than-anticibroader view of the current economic setting, pated inflation over the past two years. To be with some emphasis on the interrelationships sure, the current expansion began from a low between domestic and international develop- level, and unemployment has not yet been rements. duced to levels we have enjoyed historically and Two years ago, when the current business want to regain. But after widespread doubts expansion was just beginning, I expressed to this about our economic prospects, the recovery of committee my belief that, through a difficult 1983 has blossomed into what has been one of period of economic and financial adjustment, we the strongest expansions of the postwar period. had potentially been laying the groundwork for Real gross national product grew more than sustained growth and prosperity. I felt then, and 5Vi percent over the course of 1984, bringing the I feel now, that restoring and maintaining a cumulative gain in domestic output over the past greater sense of price stability would be central two years to about 12 percent. The rise in to that effort. production has been associated with an increase Today, I think it is fair to say that that bright in employment of more than 7 million since the promise for the longer run remains. Economic end of 1982, and the unemployment rate has growth has, in fact, been strong over the past two fallen about V/i percentage points over that periyears, and inflation has remained at or very close od, to about VA percent. As part of that general to the much lower levels reached at the start of improvement, there has been a sharp rebound in the recovery period. Since 1985 started, most profits and a surge in business investment, facobservers have shared the view that prospects tors that should bode well for our future growth for further growth remain good, and expectations potential. Spending for innovative, high-technolof stronger inflationary pressures as the expan- ogy capital has grown especially rapidly. Producsion period is extended, quite prevalent earlier, tivity has grown more strongly, although there have been at the least muted. are still important questions as to how much the underlying trend has improved. Nonetheless, clear risks and obstacles remain to making good on our own potential both for The recent monthly data on consumer and stability and growth, and to accomplishing that, producer prices continue to show only very small as we must, in the context of a more prosperous increases for a wide range of goods. For some Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

205 important commodities, including petroleum and zons are lengthened, the financial structure a number of raw materials, price declines have should be strengthened, and less "inflation insurbeen more common than price increases. Prices ance" will be built into long-term interest rates. of most services have continued to increase at a substantially more rapid rate—averaging 5 to 6 percent at the consumer level. Most of our OBSTACLES AND RISKS economy today is, in fact, a "service" economy. Those services are generally subject less directly After all the disappointments of the past with to competitive pressures from overseas. More- failed anti-inflationary efforts, that process inevover, labor-intensive sectors of the economy, itably takes time. Meanwhile, we cannot simply such as many services, may have less opportuni- assume that inflation has been conquered, or that ty for productivity growth. Nevertheless, the we have in fact reached a new era of sustained rate of price increase for services has been growth. There are still too many obstacles to significantly less than in the late 1970s and the permit that kind of satisfaction. first years of the 1980s. To put it bluntly, there are large and unsustain- Further improvement will be necessary in able imbalances in our economy, and in the these areas to maintain progress toward stability. world economy. In the midst of the overall In a direct sense, that depends in considerable improvement that I cited earlier, those imbalpart on whether the rate of nominal wage in- ances are reflected, for instance, in the intensity creases continues to decline in service industries of the strains in agriculture and in a number of to levels more characteristic of the rest of the other basic industries. There have been excepeconomy. tionally high levels of unemployment in many With inflation down, workers in general have other industrialized countries, and, looking apparently felt less need to press for large in- ahead, too few signs of really significant imcreases to make up for past price increases or to provement in that respect. That outlook bears on stay ahead of expected inflation. Businessmen our own markets. Moreover, the financial posiand workers in manufacturing, mining, and con- tion of the heavily indebted developing countries struction have also recognized that they often remains vulnerable, and their difficulties can feed operate in a more competitive and more interna- back on our economic outlook and financial tional environment—one in which there are obvi- system. And, as I noted earlier, interest rates ous perils in rising costs and prices and a premi- remain high relative both to historical experience um on efficiency. The restraint on wages and and to recent rates of inflation. costs generally need not mean, however, re- These difficulties arise, in part, out of structurduced prospects for gains in real income. To the al problems unique to one sector or another, and contrary, the "payoff' in a growing economy, to that extent must be addressed at that level. with rising productivity and more stable prices, The painful pressures on some businesses, is more jobs and higher real incomes for the farms, and financial institutions also reflect the average worker. strain of adjusting to a less inflationary environ- Success in containing inflation can help to ment, when their financial decisions had, implicbreed further success. It is indispensable to itly or explicitly, been based on expectations of prospects for achieving and maintaining a lower accelerating inflation. But these strains are being level of interest rates, which, despite declines in aggravated by financial pressures and dislocarecent months, have remained historically high. tions related to our budgetary problems. Until Over time, expectations of greater price stability that underlying problem is dealt with approprishould become increasingly woven into the fab- ately, we will unnecessarily be putting at risk all ric of household, business, and financial deci- those bright prospects for stability and growth of sionmaking. Efficiency and productivity should which I have spoken. benefit as less energy is spent in the largely futile The distortions in the economy are manifest in search for ways to "beat" inflation. Pressures our massive trade and overall current account for "precautionary" wage and price increases deficits, which reached levels of almost $110 have diminished. As borrowing and lending hori- billion and $100 billion respectively during 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin • April 1985 It is not a coincidence that those external deficits our trading prospects. And, the resulting imbalare accompanied by an enormous internal budget ances and financial strains generate political deficit—a deficit that, according to both adminis- pressures, here and abroad, for counterproductration and Congressional Budget Office esti- tive protectionism, for economic nationalism, mates, will tend to grow further in the absence of and for excessive money creation that would, if corrective action, even assuming healthy eco- implemented, undercut and jeopardize all the nomic growth. progress we have made. Given the deep recession and high levels of unemployment in 1982, the sluggishness of the world economy, and the strains on developing THE EXTERNAL DIMENSION countries, sizable deficits in our budget and trade accounts could and did serve an important tran- While much of our rhetoric still skirts the issue, sitional function in helping to encourage recov- the time has passed when we can intelligently ery here and abroad. Specifically, the domestic assess our performance and our policies without deficit helped sustain and increase domestic pur- considering the external dimension—the implicachasing power, and the more favorable tax treat- tions for international trade and capital flows, ment for investment helped encourage capital exchange rates, and economic and financial conspending. The growth of our markets has proba- ditions elsewhere. Like it or not, world financial bly been the single greatest expansionary force markets and economies are integrated as never for other countries over the past two years, and before. Over time, I believe, we derive enormous our economy absorbed the brunt of the neces- benefits from that fact. But it imposes disciplines sary efforts of the heavily indebted Latin Ameri- of its own. can countries to restore external financial and The complications in analysis and the potential economic equilibrium. for good or ill were amply illustrated in 1984. As At the same time, the strength of the dollar in you know, the growth of economic activity the exchange markets, together with the ready slowed abruptly during the summer and early availability of goods from abroad, has been a fall. Following the exceptionally rapid growth potent factor in damping inflationary forces and over the first half of the year, some slowdown satisfying our consumption demands. What then, should not have been surprising, given the fluctuit might be asked, is the difficulty? Why not rest ations in consumption and inventory imbalances content? common as an expansion period is extended. By The answer, most fundamentally, is that eco- year-end, there was evidence once again of more nomic analysis and common sense coincide in positive trends in household spending and some telling us that the budgetary and trade deficits of inventory imbalances appeared to be at least the magnitude we are running at a time of grow- partially corrected. ing prosperity are simply unsustainable indefi- But as domestic demands slowed, the more nitely. They imply a dependence on growing fundamental imbalances remained and became foreign borrowing by the United States that, left more obvious. Throughout this recovery, domesunchecked, would sooner or later undermine the tic purchases of goods and services have inconfidence in our economy essential to a strong creased faster than domestic production. In escurrency and prospects for lower interest rates. sence, a lot of demand generated in this country At the same time, the hard fact is that the budget has flowed abroad through our rising trade defideficit, on top of the private investment needed cit, providing stimulus for production overseas to support growth and productivity, outruns our rather than in this country. The increase in internal savings potential. The largest and richest imports did not seem to matter much so long as economy in the world has perforce been required output and employment generally were expandfor the time being to draw on savings generated ing so rapidly. But even then, important sectors abroad; in that real sense we are living beyond of the economy, in a real sense, did not share at our means. As we continue to draw so heavily on all fully in the overall recovery, with trade presthe world's savings, there is a drag on internally sures aggravating deep-seated structural probgenerated expansion elsewhere, feeding back on lems. As soon as domestic demand dropped from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 207 the extraordinarily rapid rate of the first half of that, without the ready availability of savings the year, the effects of the demand slowdown on from the rest of the world, pressures on our production were amplified by the rising trade financial markets would have been greater and deficit. domestic interest rates would have been still From 1982 to the second half of 1984, the higher, at some point undermining the outlook current account deteriorated about $100 billion, for domestic housing and investment. pushing us into an external deficit equivalent to The kind of obvious "crowding out," so wide- 2Vi to 3 percent of the gross national product. ly anticipated a year or two earlier, has been Just as for a household or a business, current avoided. But, in a real sense, important sectors spending abroad can exceed current income only of our economy are paying the price. Those to the extent that we can draw on foreign assets dependent on foreign markets and those competor that debt is increased. As a consequence, the ing with imports are being "crowded." To put United States is in the process of moving from the point in perspective, the $100 billion deteriobeing the world's largest creditor to being the ration in our current account—a measure of world's largest debtor. "lost" markets for U.S. producers—is equiva- Thus far in the expansion, the net inflow of lent in size to about two-thirds of the entire capital needed to finance the current account residential housing sector. deficit has been readily forthcoming, so much so As I emphasized earlier, viewed in a world that the dollar exchange rate has persistently context, our ability and willingness to run a strengthened even as the U.S. current account sizable trade and current account deficit during a has deteriorated. No single factor appears to period of strong domestic recovery had construcaccount for that flow. Relatively high interest tive implications for others. But, as we look rates in this country, our success in reducing ahead, neither we nor other countries can expect inflation, and perceptions of political stability growth to be maintained indefinitely on a shaky and economic vitality all have contributed. But foundation of large and growing trade deficits, political and economic uncertainties abroad ap- massive capital flows to the United States, and pear to have played a part as well. accelerating international indebtedness. The strong flow of funds from abroad has The visible strains in some sectors of our been a key factor helping to ameliorate financial economy and interest rates that have remained stresses in this country, as expansion generated historically high are clear warning signals. Perlarge new demands for private financing on top haps less obvious, but nonetheless real, the drain of the continuing federal deficit. Two tables illus- of savings from other countries to the United trate the point.1 States and the related tendency for their curren- As indicated, net domestic savings—personal, cies to depreciate vis-a-vis the dollar appear to business, and state and local government—have be inhibiting more forceful policies to encourage increased appreciably as the economy has ex- "home grown" expansion abroad. A healthy panded. The ratio of net savings to the GNP is world economy—and better export markets for near the top of its historical range. But those the United States—are ultimately dependent on domestic savings have not been nearly enough to that expansion. The dilemma is that so long as finance both rising private investment and the demands on our own capital markets exceed our federal deficit. Those requirements, relative to capacity to save, the stability of our own finanthe gross national product, have risen about 43/4 cial markets is, in effect, hostage to a large percentage points in the past two years to about continuing inflow of foreign capital. 11 Vi percent of the GNP, far above past relation- That flow, in turn, is dependent on the mainteships. About half of the increase was met by nance of confidence in our own prospects and in higher savings from abroad. our own currency. But so long as the imbalance I do not believe we can escape the conclusion in our trade persists and increases, the greater the risk that that confidence will be eroded, disturbing our financial markets and jeopardizing 1. The attachments to this statement are available on our growth. It is that apparent inconsistency that request from Publications Services, Board of Governors of must be confronted. the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

208 Federal Reserve Bulletin • April 1985 THE ROLE OF MONETARY POLICY affected industries. But that approach toward "relief' is symptomatic, not fundamental. In- While I will be testifying with respect to Federal deed, yielding to those pressures could only Reserve policy in some detail shortly, a few aggravate the difficulties, so long as the underlygeneral observations about monetary policy are ing financial imbalances persist. appropriate in this context. That policy, in the Suppose, for instance, strong protectionist most general terms, is directed toward encourag- measures actually had a pronounced effect in ing the process of restoring price stability while closing our trade deficit. Then, the capital inflow providing enough money to support sustainable from abroad would also be reduced, and the growth in demand and output. Reasonable pro- interest rate and inflationary pressures would be gress in those directions was made in 1984. increased. The benefits to one industry would be Indeed, the strength of the dollar, despite the offset by greater financial market pressures and larger current account deficit, helped to recon- damage to others. Or, if the capital inflows were cile strong growth in demand over the year as a maintained, the dollar would presumably be drivwhole with restraint on prices. But, as I indicated en still higher, shifting the burden to exporters a few moments ago, the rising trade deficit, as and unprotected industries. more of the domestically generated demand More realistically, protectionism here would spilled over abroad, clearly raises questions of be matched, or more than matched, abroad, with the sustainability of a process dependent on large devastating consequences for world trade and inflows of capital. growth. Monetary policy can stimulate growth in the money supply, but it cannot create the real savings necessary to finance high levels of in- A CONSTRUCTIVE APPROACH vestment and excessive budget deficits simultaneously. That depends upon all the factors induc- One lesson from our experience seems clear. The ing individuals and businesses to save for the progress that has been made toward greater future. Efforts to, in effect, paper over the diffi- efficiency, cost restraint, and innovation needs culty by financing the huge budget deficit with to be continued and encouraged by public policy excessive money creation would surely be coun- in a variety of ways rather than discouraged by a terproductive. We would undermine the growing retreat into protectionism or new permanent confidence in prospects for stability. That confi- federal subsidies that distort the economy and dence is a necessary ingredient in any effort to aggravate the deficit. see lower interest rates in the years ahead. It is I do not want to suggest all the burden of also essential to maintain the flow of capital from sustaining a favorable economic climate and reabroad upon which we are for the time being storing external equilibrium rests on the United dependent. States. A number of industrialized countries In sum, I see no realistic escape from our might reasonably review their own possibilities dilemma by reverting to inflationary monetary for stimulus in the light of their high levels of policies. They could only accelerate the distur- unemployment and rather sluggish growth, and bances we want to avoid. Indeed, without action they could constructively work to remove the on the budget and other fronts, the possibility of structural impediments to their growth. There is a reduced flow of capital from abroad would, if it too much protection of markets abroad, and the materialized, constrict the flexibility of monetary efforts to deal with that need to be maintained. policy. There is no single "magic pill" to restore equilibrium and assure growth. But neither can there be real doubt that it is within our capacity THE PROTECTIONIST ''SOLUTION'' to take a large step, here and now, to ease the necessary adjustments in agriculture and indus- The current trade imbalances and the strong try at home, to make us less dependent on pressures on particular economic sectors certain- foreign savings, to improve trade prospects, and ly lead to strong pressures for protection from thus to reinforce prospects for growth and stabil- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 209 ity. That step would be to make decisive reduc- of recession or in the early stages of recovery tions in our budget deficit. Those reductions, to turn destructive at a time of relative prosperity. be credible, should be large enough and assured They are reflected in imbalances in our own enough to have an impact on expectations and economy. At the same time, our dependence on confidence, even if they cannot be fully effective foreign savings can only impede the prospects for some time. for self-sustaining growth abroad—and we can- That is, of course, by now a familiar plea—but not indefinitely be virtually the only engine for it is no less urgent for its familiarity. To the world expansion. contrary, the sharply increased size of our exter- Action now, and action large and forceful nal deficit, the tendency for the budget deficit to enough to be seen to be decisive, is the construcgrow even as the economy expands strongly, and tive way to resolve the impasse and to work the still high interest rates should be warning toward international balance. In the process, it enough that we are on an ultimately unsustain- will help enormously to ensure those bright prosable path. pects for growth and stability of which I spoke at Deficits that are relatively benign in the depths the start. • Statement by Paul A. Volcker, Chairman, Board ed by our twin deficits—in our budget and in our of Governors of the Federal Reserve System, external trading accounts. Those two deficits are before the Committee on the Budget, U.S. Sen- themselves related to each other. ate, February 8, 1985. Until those underlying problems are adequately addressed, we will be putting at risk our hard- I am pleased to appear once again before this won gains and the bright promise for the future. committee to discuss the economic situation and, It is difficult for me to see a constructive solution in that context, some implications of the budget- to those problems without going to their source. ary choices that you must make for the economy, The implication seems clear to me—we need to for financial markets, and for our international deal effectively with the reality of an enormous position. I realize that the task that confronts you budget deficit at a time of growing prosperity and in dealing with the budgetary position is extreme- with the clear threat that, left untended, that ly difficult. Those difficulties are matched by deficit will rise over future years even in the their significance for the well-being of our econ- context of a growing economy. omy and, indeed, of the world economy gen- As background for your deliberations, I would erally. emphasize the linkage of our budgetary posture Earlier this week I testified before the Joint to the external side of the economy. The simple Economic Committee. That testimony reviewed fact is that we can no longer view our economy in our economic progress, the obstacles and risks isolation from the rest of the world. As you before us, and attempted to place questions of know, the imbalances in our economy are most monetary and fiscal policy in that setting. obviously manifested in our massive trade and Suffice it to say that the past two years have current account deficits, which reached about demonstrated highly encouraging progress to- $110 billion and $100 billion respectively during ward returning the economy to a path of sus- 1984. It is not a coincidence that these external tained growth and stability. Most observers con- deficits have developed alongside the internal cur that the immediate prospects remain budget deficit. favorable. But at the same time there are large That budget deficit, together with the rising imbalances in our economic performance and investment needed to support growth and propoints of severe strain here and abroad. There ductivity, must be financed either internally or are particular factors helping to account for externally. We do not have the capacity now or many of those strains, and they must be dealt prospectively, given the size of the federal defiwith directly. But it is also true that most of those cit, to save enough domestically to meet those specific difficulties are reflected in and aggravat- needs. We have become perforce dependent on a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

210 Federal Reserve Bulletin • April 1985 growing net inflow of foreign savings to supple- times the suggestion is made that we can go ment our own. further and somehow resolve the imbalance be- The two tables illustrate the point.1 Even as tween domestic savings and investment by exdomestic savings have grown, about one-quarter panding the money supply. But printing money is of our net needs for investment and for deficit not a substitute for the real savings necessary to financing have had to be met from foreign finance high levels of investment and budget sources. So far, that capital has been readily deficits simultaneously. Excessive money creavailable, partly because more new funds have ation would be counterproductive in two repoured in from abroad and partly because our spects. To the extent it stirred new inflationary banks are lending less to other countries. That fears, after all the progress that has been made, flow has had the effect of containing pressures on those fears would sustain the level of interest interest rates and on our capital markets, even rates and even drive them higher. By underminthough interest rates, as you know, have re- ing the growing confidence in prospects for stamained high historically and relative to the cur- bility, it could discourage the capital inflow on rent rate of inflation. which, for the time being, we are dependent. But the implications of that capital inflow are The Federal Reserve, the administration, and not all favorable, and the adverse implications the Congress have no magic wands to restore are mounting. The mirror image of a capital equilibrium and to assure growth in one easy inflow is the trade and current account deficits, stroke. Efforts must be made in a number of with adverse impacts on all those industries that directions to sustain the bright promise of the look to export markets or that compete with economy. But the key ingredient in the policy imports. One effect is that sizable sectors of the mix seems clear enough. Steps now toward deci- American economy have not participated at all sive, creditable reductions in our budget defifully in the recovery. The drain on foreign sav- cits—large enough to have an impact on expectaings and the related depreciation of their curren- tions and confidence in markets—would provide cies vis-a-vis the dollar seem to be inhibiting the necessary sense of reassurance while workprospects for internally generated growth ing to alleviate the underlying imbalance beabroad. At the same time, our capital markets tween our capacity to save and the demands on and interest rates have become hostage to a those resources. continuing flow of foreign capital. Over time, the 1 am sensitive to the difficult, practical, and interest cost of those foreign borrowings will political decisions that must be made. But I also compound upon themselves. know the longer the choices are delayed, the A basic objective of monetary policy is, of greater the risks and the larger the task. As we course, to provide enough money to sustain saw in the 1970s, confidence can be a fragile growth in domestic demand in a framework of thing. It needs to be nourished and defended. moving toward greater price stability. Some- It will take action, and strong action, to get the deficit on a downward trend. Then growth can help to do the rest. And your action on the budget will help enormously in assuring that 1. The attachments to this statement are available on growth can be sustained in a framework of request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. greater price stability. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 211 Statement by Paul A. Volcker, Chairman, Board at the wholesale and retail levels rose less than of Governors of the Federal Reserve System, that. While the evidence is less tangible, there before the Committee on Banking, Housing, and are also encouraging signs that chronic expecta- Urban Affairs, U.S. Senate, February 20, 1985. tions of future inflation have been damped. The behavior of actual prices and nominal I appreciate this opportunity to appear before wages, which by some measures rose more slowyou to present the Federal Reserve's monetary ly in 1984 than in 1983 despite expanding depolicy objectives for 1985. In accordance with mands for labor, may in some part reflect those the Humphrey-Hawkins Act, the semiannual changes in attitude. Businessmen and workers report of the Federal Reserve was transmitted to no longer seem so preoccupied with a need to you this morning. That report reviews in detail anticipate inflation in their pricing and wage economic developments and monetary policy in decisions. And declines in bond yields after 1984, and sets forth for 1985 the plans for policy midyear seemed to reflect, to some degree, less by the Federal Open Market Committee. This fear of future inflation. morning I would like to discuss the Committee's To be sure, a number of factors that may not decisions and the outlook for the economy in the be lasting have helped to hold price increases context of some important unfinished business down. The continuing appreciation of the dollar facing all of us responsible for economic policy. and strong competition from imports have placed strong pressures on prices and wages in some manufacturing and mining industries. Wide- THE ECONOMIC SETTING spread declines in commodity prices cannot persist indefinitely. Unemployment is still higher The familiar objective of monetary policy is to than we would like to see. But it is also true that foster sustained economic growth and employ- progress against inflation, as it is prolonged, can ment in a context of reasonable price stability. potentially feed on itself by encouraging re- Stated so generally, that objective can hardly be strained price and wage behavior. challenged: it indeed encompasses the broad As we start 1985, the immediate economic goals of economic stabilization policy generally. outlook appears reasonably favorable in these Measured in those terms, there is clear reason respects. Projections of Federal Open Market for satisfaction in the performance of the econo- Committee members that I will be reviewing my last year. In summary, with real gross nation- later in my testimony broadly parallel those of al product up 51/2 percent over the year, and the administration, the Congressional Budget about 12 percent in two years, we have enjoyed Office, and many other observers; economic the strongest expansion since the Korean War growth is expected to remain strong enough in period. On top of the gains in jobs in 1983, 1985 to produce some further decline in unememployment increased more than 3 million last ployment, with little if any pickup in inflation. year. The unemployment rate fell one full per- But we must not be beguiled by those tranquil centage point to 7.2 percent at year-end. Real forecasts into any false sense of comfort that all incomes for the average American are up. is well. If the enormous potential of the Ameri- Prospects for sustained growth and productivi- can economy for growth and stability—not just ty over time rest importantly on success in for 1985 but for the years beyond—is to become achieving and maintaining an environment of reality, we need a sense of urgency, not of greater stability of prices and financial markets. relaxation. In that light, it is encouraging that, contrary to For one thing, with the general price level still widespread earlier expectations, the strong rising in the neighborhood of 4 percent a year— growth of 1984 took place without inflation in- and with prices of services that today account for creasing appreciably from the sharply reduced so much of the economy rising more rapidly than levels of 1982 and 1983. Specifically, the con- that—we should not confuse evidence of prosumer price index increased about 4 percent last gress against inflation with ultimate success. year, little changed from the previous two years, Indeed, the more favorable price expectations I and prices of most goods (in contrast to services) noted a few moments ago could prove fragile— Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

212 Federal Reserve Bulletin • April 1985 highly vulnerable to any indications that public It is no coincidence that the record external policy is prepared to accept and to accommodate imbalance and continued high interest rates have inflationary forces. That must be of particular been accompanied by large federal budget deficoncern in the conduct of monetary policy. cits—deficits that according to projections of Perhaps more immediately, despite the both the administration and the Congressional strength of the overall expansion, some impor- Budget Office will only deepen in the years ahead tant areas of the economy are under strain and in the absence of decisive corrective action. there have been recurrent international and do- Government deficits can be relatively benign, mestic credit problems. Those strains and pres- and even useful, in boosting incomes and pursures are aggravated by underlying imbalances chasing power in the slough of recession and that, unless dealt with effectively, will undercut when private investment and credit demands are the long-term outlook. weak. It is also true that our growing volume of One of those imbalances was highlighted by imports over the past two years has provided an the slowdown in growth of gross national prod- impetus for growth in other countries when other uct we experienced in the third quarter. Such a expansionary forces were weak. Moreover, the "pause" is not an unusual feature of an expan- kind of obvious squeeze on, or "crowding out" sion period. Demand does not grow smoothly, of, domestic housing and investment that many and occasional inventory imbalances will devel- anticipated as the expansion has developed has op that require production adjustments. What not been apparent. was unusual last summer was that the slowing of We have been able to reconcile high deficits, demand growth was accompanied by a surge in sharply rising imports, and strong investment imports, magnifying the effects on domestic pro- mainly for one reason: we have been able to ducers. That summer import surge was reversed attract an enormous amount of savings from by year-end, but the underlying trend toward abroad to supplement our own. The net capital higher imports is clear. Our trade deficit in- inflow approached $100 billion last year, and it creased to about $110 billion in 1984, far higher will probably need to be still larger this year. than ever before, and the entire external current Domestic net savings—by individuals, busiaccount deficit—counting both goods and ser- nesses, and state and local governments—are vices—has deteriorated about $100 billion since running at about $325 billion, so the supplement 1982. The sustainability of that trend, politically from abroad adds close to a third to net savings as well as economically, is, to say the least, generated internally. The net capital inflow was questionable. equivalent last year to more than half the budget The rising trade deficit helps account for the deficit. failure of a number of important sectors to partic- That same inflow of funds has encouraged a ipate at all fully in the expansion. Agriculture, very strong dollar. The strong dollar, in turn, heavy capital equipment producers, and the met- contributes importantly to the huge and growing als industry, all of which face difficult structural trade deficit. Our policy dilemma is simple but problems in any event, are examples. They are perhaps not fully understood. We cannot logicalfurther pressed by interest rates that, as you ly welcome the capital inflow from abroad in one know, remain historically high, both in nominal breath and complain about the trade deficit in the terms and relative to recent inflation. next. They are two sides of the same coin. Looking abroad, growth in many industrial We are managing to finance the deficit and countries remains sluggish amid continuing high maintain housing and investment expenditures levels of unemployment, and depreciation of with the help of imported capital. At the same their currencies vis-a-vis the dollar seems to be time, the exporter, those competing with imone factor inhibiting more expansionary policies. ports, and the farmer are being "crowded out." Important developing countries are still strug- Looking ahead, the stability of our capital and gling to restore stability and maintain growth money markets is now dependent as never bewhile laboring under heavy debt burdens. In this fore on the willingness of foreigners to continue interdependent world, these difficulties feed to place growing amounts of money in our marback on our own prospects. kets. So far, they have been not only willing but Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 213 eager to do so. But we are in a real sense living Growth ranges for the aggregates for 1984 compared on borrowed money and time. with actual growth It is up to all of us to make constructive use of Percentage increases, fourth quarter to fourth quarter both the money and the time. In essence, that is Actual Aggregate Ranges the challenge for all of us—for monetary and Growth fiscal policy, and for all the other policies that Ml 4 to 8 5.2 can contribute to a productive, growing econo- M2 6 to 9 7.7 M3 6 to 9 10.5 my. Domestic nonfinancial debt 8 to 11 13.4 In May, a liquidity crisis developed in one of MONETAR Y POLIC Y IN 1984 the largest commercial banks in the country, growing out of continuing concerns over weak- As you will recall, the economy was expanding nesses in its loan portfolio. The Federal Reserve, particularly rapidly during the early part of 1984, the Federal Deposit Insurance Corporation and demands for money and credit—and for (FDIC), and the primary supervisor of the bank, bank reserves to support monetary growth— the Comptroller of the Currency, worked closely were also strong. By early spring, data available together to support the orderly functioning of the at the time showed Ml increasing at rates well institution while more permanent recapitalizainto the upper portion of its range for the year, tion and other elements of a long-term solution which targeted growth at 4 to 8 percent.1 At the could be developed. Nonetheless, that incident, same time, driven by the financing needs genertogether with continuing concerns about internaated by rising levels of private spending and by tional debt problems, for a time contributed to the federal government, M3 and nonfinancial uneasiness in banking markets, and interest rates credit were expanding around or above the upper on short-term private credit instruments rose end of their long-term ranges. appreciably above those on government securi- The strong expansionary forces in the econo- ties.2 my were reflected in some limited upward move- Demands for money slackened after midyear ments in interest rates in February and March, as the economic expansion slowed. Long-term and early in the spring the Federal Reserve began interest rates began to drop from the higher to exert some additional restraint on reserves levels reached in the spring as inflation concerns being supplied through open market operations. moderated. With the problems of the Continental Consequently, depository institutions were Illinois Bank contained and progress made toforced to rely increasingly on borrowing at the ward restructuring the debts of some important discount window to satisfy demands for redeveloping countries, the abnormal interest rate serves. With credit demands and the economy spreads began to narrow, but the money markets continuing to expand strongly, and with markets as a whole remained under some pressure. By concerned about the possibility that inflationary late August and September, with Ml growth forces might reassert themselves as the period of moving toward the midpoint of its range and M3 strong expansion lengthened, interest rates expansion slowing toward the upper end of its moved noticeably higher in the spring. In April range, and with some evidence that economic the Federal Reserve increased its discount rate Vi growth had slowed, the Federal Reserve began of a percentage point to 9 percent to bring this to ease pressures on reserve positions. rate into better alignment with market rates and That process continued through the fall, and to discourage reserve adjustment at the discount borrowing at the discount window fell steadily window. from September through January. Late in the year, total and nonborrowed reserves began to grow rapidly. Short-term interest rates declined 1. The data in this testimony for the monetary aggregates reflect recent seasonal and benchmark revisions. While the changes for the year as a whole were small, the revised data for Ml for the first half of the year are lower, and the second 2. Appendixes A and B summarize these and related half higher, than had been reported earlier. developments, and the Federal Reserve response, more fully. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

214 Federal Reserve Bulletin • April 1985 between Vh and Vh percentage points over the The rise in M3 and credit during 1984 exceeded last four months of the year. Reacting to these expectations at the start of the year, and both declines, and to an extent facilitating them, the measures exceeded by a considerable margin the Federal Reserve in two half-point steps reduced upper limits of their ranges over the year as a the discount rate to 8 percent, the lowest level whole. In fact, credit increased at its most rapid since 1978. pace for the entire period since World War II, Several additional factors influenced judg- both in absolute terms and relative to nominal ments about the appropriate degree of easing of GNP. Debt growth of this magnitude would reserve positions during the fall. The dollar re- appear to be much faster than consistent with the mained exceptionally strong in foreign exchange long-run health of our economy and financial markets, potentially increasing pressures on system. It reflects to some degree the imbalances some sectors of the American economy and a in our economy I emphasized earlier. source of growing concern among some of our For example, the budget deficit led to expantrading partners experiencing depreciating cur- sion of federal debt of 16 percent, an unprecerencies vis-a-vis the dollar. At the same time, dented rate of growth in the second year of a relatively favorable incoming data about prices business cycle. The growth of the debt of nonfedand wages tended to allay concerns about actual eral sectors, at nearly 13 percent, also was high and potential inflationary pressures. In fact, relative to past experience. A portion of this prices of many sensitive commodities were fall- growth in private debt—perhaps about IV2 pering appreciably. In these circumstances, re- centage points—can be attributed to a huge volserves could be provided more liberally, and ume of mergers, leveraged buyouts, and stock growth in the money supply more actively sup- repurchases by businesses, which had the effect ported without providing a basis for a destructive of substituting debt for equity. Despite some rise in inflation expectations. sizable sales of new stock, nonfinancial corpora- The fall in interest rates and the more generous tions on balance retired about $70 billion of stock provision of reserves in the context of some last year. increases in economic activity led to a rather Whatever the circumstances and justification strong revival of Ml and M2 growth around year- for the particular companies involved, a financial end, bringing both aggregates relatively close to structure that tends toward more debt (and the midpoints of their respective ranges. As shorter debt) relative to equity becomes more monetary and credit growth continued at a rela- vulnerable over time. More cash flow must be tively rapid pace into January, the easing process dedicated to debt servicing; exposure to shortcame to an end. run increases in interest rates is magnified; and Unlike the pattern during much of 1982 and cushions against adverse economic or financial 1983, when Ml grew more rapidly than nominal developments are reduced. These are factors GNP (that is "velocity" slowed), the income that prudent lending institutions should take into velocity of Ml rose 4 percent last year. That is account in evaluating new credits, and reports broadly in line with cyclical experience in the suggest that some banks did in fact review their past, taking into account both the pattern of policies toward mergers and leveraged buyout interest rate movements and income growth. M2 financing as the year wore on. velocity also increased, rising about l!/2 percent While the effect cannot be isolated, the rapid after two yearly declines. growth of debt relative to GNP may also reflect These developments provide some support for the fact that domestic spending increased apprethe view that velocity trends over time, as well as ciably faster than domestic production, which is cyclical changes for these aggregates, may be what the GNP measures. A new machine, for returning to patterns more along the lines of instance, will require financing, whether purearlier experience. In contrast, in 1982 and 1983, chased at home or abroad, and sharply increasduring a period of rapid transition to deregulation ing amounts of capital equipment have in fact of deposit interest rates and substantial econom- been imported. As I indicated earlier, directly or ic uncertainty, those earlier patterns had been indirectly, that financing may be supplied from disrupted and velocity had declined appreciably. abroad, alleviating the pressures on our market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 215 But the debt burden inevitably rests with the Growth ranges for the aggregates adopted for 1985 borrower. compared with tentative ranges and those for 1984 Percentage increases, fourth quarter to fourth quarter Tentative MONETAR Y POLIC Y IN 1985 Adopted ranges Ranges Aggregate ranges for 1985 for 1984 for 1985 set in mid-1984 At its meeting last week the FOMC agreed to some small changes in some of the ranges for the Ml 4 to 7 4 to 7 4 to 8 M2 6 to 9 6 to 81/: 6 to 9 monetary and debt aggregates tentatively set out M3 6 to 9Vi 6 to 9 6 to 9 last July. The modifications are in response to Domestic nonfinancial debt 9 to 12 8 to 11 8 to 11 analysis of information now available and do not represent any change in policy intentions. As shown in the accompanying table, for Ml, the expected by FOMC members and nonvoting Committee reaffirmed the lower tentative range Reserve Bank Presidents to support another year it adopted last July of 4 to 7 percent growth from of satisfactory economic expansion without an the fourth quarter of 1984 to the fourth quarter of acceleration of inflation. Forecasts of real GNP 1985. M2 is targeted to grow between 6 and 9 growth centered around rates of V/i to 4 percent percent, the same range as used in 1984. The from the fourth quarter of 1984 to the fourth upper end of that range was increased Vi percent quarter of 1985—rates anticipated to be sufficient from the tentative range for 1985 set in July. That to reduce the unemployment rate to around 63/4 small adjustment reflects a technical judgment— to 7 percent by year-end. Inflation, as measured based on assessment of recent developments— by the GNP deflator, was expected most frethat M2 could expand more in line with income quently to be in a range of V/i to 4 percent over growth this year, in keeping with the historic the year, about the same rate as prevailed in record of little trend growth in its velocity. 1984.3 The upper end of the new M3 range of 6 to 9VI In view of the necessarily tenuous nature of percent was also set Vi percent higher than any judgment about the outlook for exchange tentatively agreed in July. The associated moni- rates, FOMC members in preparing their projectoring range for credit was set at 9 to 12 percent, tions assumed that the dollar would fluctuate in a a percentage point above the 1984 range. Adjust- range encompassing its level of recent months. ments in both target ranges still contemplate a They also assumed that the federal budget deficit considerable slowing in these two aggregates would be reduced significantly in fiscal 1986 from what actually occurred in 1984. Even so, relative to base-line projections, a development credit growth, fueled in part by the budget defi- that would help damp both interest rate and cit, is expected to be quite strong, significantly inflationary expectations. Obviously, those asexceeding the rate of expansion of GNP for the sumptions suggest some of the important risks third consecutive year. inherent in the outlook. The Committee does not anticipate that As I indicated in discussing 1984 developgrowth of debt within the targeted range would ments, we entered 1985 with the various monenecessarily pose significant new risks for the tary aggregates growing relatively rapidly. The economy or the financial system in the year targets for this year take, as usual, the actual immediately ahead. However, a healthy financial average for the fourth quarter of the previous structure will in time require more restraint on year as a starting point (or "base"). Consequentborrowing relative to the economic growth that, ly, we are starting the year with the levels of the in the last analysis, provides the wherewithal to aggregates above the target ranges as they have service the debt. One continuing problem in that been conventionally illustrated—that is by sorespect is the extent to which the current tax structure tends to favor debt rather than equity 3. These projections, now regularly set out in our Humfinancing, a point addressed in the administra- phrey-Hawkins Reports, should not be interpreted as indicattion's reform proposals. ing "targets" for real growth or inflation in the short or longer run. As discussed in appendix C, the Committee does not The ranges for growth in money and credit are target a specific long-range growth path for the economy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

216 Federal Reserve Bulletin • April 1985 1. Ml target ranges and actual Ml positions undertaken in the latter part of 1984 has ended. The provision of reserves through open Billions of dollars market operations is currently being conducted a bit more cautiously to guard against inadvertent "overshoots" in supplying reserves. Any further change in approach will, as always, depend upon assessments of the trend of monetary growth in the period ahead, evaluated in the context of the flow of information in the economy, on prices, and on domestic credit and exchange markets. The annual target ranges for Ml and M2 assume that trends in velocity are returning to a more normal and predictable pattern. However, there is some analysis that suggests the trend of velocity over time may be a little lower than the trend of 3 percent or so characteristic of much of the postwar period when interest rates were called "cones" starting at a point late the previ- trending higher. Should developments during ous year and widening through the current year. 1985 tend to confirm that somewhat lower veloci- (See charts 1 to 4.) ty growth, and provided that inflationary pres- That conventional and widely used "picture" sures remain subdued, the Committee anticiis essentially arbitrary. Interpreted rigidly (and pates that those aggregates might end the year in wrongly), the narrowness of a cone in the early the upper part of their ranges. The lower part of part of the year—literally narrower than some the Ml range would be consistent with greater weekly fluctuations in the money supply—would cyclical growth in velocity than now thought attach policy importance to levels or movements likely. As usual, these ranges will be reviewed at in the various aggregates that in fact have no midyear, in accordance with Humphrey-Hawsignificance. kins Act procedures. We have sometimes considered, and others have suggested, a better "pictorial" approach would be to illustrate the targets by a different THE CHALLENGE AHEAD (but also necessarily arbitrary) convention—parallel lines drawn back from the outer bounds of The approach toward monetary policy that I the specified fourth quarter target ranges to the have outlined for 1985 is designed to promote, as base period, as shown in the charts. The target range is then portrayed as maintaining the same 2. M2 target ranges and actual M2 width throughout the year. The current levels of Billions of dollars the aggregates, as you can see in the charts, are within such parallel lines.4 As a matter of economics and policy, rather than graphics, the Committee is not disturbed by the present level of Ml and M2 relative to its intentions for the year. It contemplates that, as the year progresses, growth will slow consistent with the target ranges. Consistent with that approach, as I indicated earlier, the progressive process of easing reserve 4. Appendix D addresses the different but related questions of the appropriate "base" used in setting and illustrating targeted growth ranges. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 217 3. M3 target ranges and actual M3 collective peril. Credibility in the effort to deal with inflation is a precious thing. The lesson here Billions of dollars and abroad, now and through history, is that, once a sense of price stability is lost, it can be restored only with pain and suffering. The Federal Reserve can theoretically run the modern equivalent of the printing press—we can create more money. But more money is not the same as correcting the gross imbalance between our ability to generate real savings and the demands for those savings posed by housing, by investment, and by the federal deficit. To create money beyond that needed to sustain orderly growth would be to invite renewed 1983 1984 1985 inflation—damaging incentives to save in the process. In contrast, to encourage savings from income would be to provide more of the real best we can, our common objectives of sustained resources we need for future growth—and it growth and stability. We can build on the strong would help spur productivity and reduce price progress of 1983 and 1984. There is forward pressures in the process. momentum in the economy. The public at large If that route isn't open to us—and as a practiseems to sense a greater degree of control over cal matter we probably can't do much right now inflation than for many a year—and I sense some to change ingrained savings behavior—then the chance of further progress toward price stability only constructive alternative is to attack the this year even as the economy grows. problem from the other side of the ledger by Happily, despite the strength of the economic reducing the federal deficit. advance and the financing of a huge deficit, For the time being, capital from abroad has interest rates are today little above those of two been readily available to close the growing gap years ago. The threats of financial dislocation between our domestic savings and the demands growing out of the debt problems of much of the upon them, moderating pressures on interest developing world, or from more purely domestic rates. Indeed, the money attracted partly by financial pressures, have been well contained. perceptions of our strength has come so freely Points of strain will, without doubt, require con- we have an exceptionally strong dollar. But that tinuing attention this year. But, in the context of a healthy economy, they are capable of resolution. 4. Debt monitoring ranges and actual debt By encouraging appropriate growth in money Billions of dollars and credit, in discharging our supervisory re- [2% sponsibilities, in performing when necessary the essential functions of lender of last resort, and in our general surveillance of the financial system, the Federal Reserve can help build on that progress. We aim to do so. But it is equally important to understand clearly what monetary policy and the Federal Reserve cannot do. The progress against inflation, the strength of the dollar and the competition from abroad, and some margins (if diminishing) of capacity and manpower have provided a certain degree of flexibility in the conduct of monetary policy. But 1983 1984 1985 that limited flexibility would be abused at our Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

218 Federal Reserve Bulletin • April 1985 same strong dollar contributes to a massive trade capacity to save and our need to invest and to deficit that strains key sectors of industry and finance the government that I have emphasized our agriculture, aggravating structural problems. today. No doubt bad monetary policy could drive the dollar down—a monetary policy that aroused inflationary expectations, undermined confidence, and drove away foreign capital. But then, CONCLUSION how would we finance our investment and our budget deficit? I fully appreciate the difficulties of the decisions Nor is the process of money creation adapted before you as you collectively approach those to relieving particular sectoral strains within our excruciating budgetary choices. As you do so, I economy. We can and will, in our administration know that you are aware of the priority that of the discount window and in our actions as progressive reduction of the deficit deserves. lender of last resort, protect the essential finan- That, indeed, would provide the most fundamencial fabric by supporting creditworthy depository tal kind of reassurance that growth can be susinstitutions faced with extraordinary needs. tained in an environment of greater stability. But the evident problems of particular sectors, For our part, in the conduct of monetary in the last analysis, will yield only to measures policy, we in the Federal Reserve will be sensithat support their efficiency and broaden their tive to both the opportunities and the dangers markets. That in itself is a large agenda, for before us. We believe the approach I have outgovernment and those involved alike. And the lined with respect to the monetary targets and process will be much easier if we at the same our implementation of policy sensibly reflects time address the basic imbalance between our and balances the concerns I am sure we share. APPENDIX A: THE IMPLICATIONS FOR liquidity. That lending rose irregularly from MONETARY POLICY OF THE NEAR FAILURE about $3 billion during most of May to a peak of OF THE CONTINENTAL ILLINOIS BANK more than $7 billion in August. During the autumn the amount of outstanding loans declined to The condition of the Continental Illinois Bank— much reduced levels. the seventh largest in the United States at the Provision of funds through the discount winbeginning of 1984—had been a matter of concern dow has the effect of expanding total bank reto regulatory authorities and market participants serves, and unless otherwise offset, the lending for some time, particularly after the failure of the to the bank would have had the effect of expand- Penn Square Bank in the middle of 1982 brought ing the money supply well beyond targeted to light large loan losses and weaknesses in credit ranges. To maintain consistency of the reserve policy. Continuing profit and loan problems cul- provision with FOMC intentions, essentially minated in rumors of possible impending failure equivalent amounts of reserves were absorbed and a liquidity crisis in May 1984, involving by open market operations. While the large borwithdrawal or failure to renew billions of dollars rowings necessarily involved some added techniof deposits in the bank over a few days. cal difficulties and uncertainties in the conduct of The Federal Deposit Insurance Corporation, open market operations, the Committee was able the Federal Reserve, and the Comptroller of the to achieve its reserve objectives. Currency, with the cooperation of a group of At the same time, however, the liquidity crisis major banks, developed arrangements to provide of Continental Illinois Bank, particularly in an temporary capital and liquidity support pending environment in which international debt and more permanent solutions and reorganization. other credit problems were attracting attention, The Federal Reserve—acting as lender of last generated concern about possible threats to the resort—provided large amounts of funds through stability of other financial institutions. As a rethe discount window to maintain the bank's sult, interest rates on banking liabilities rose Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 219 appreciably relative to interest rates on Treasury The improvements in external accounts in securities during the spring. More cautious fund- Mexico and Venezuela in Latin America, and in ing and lending policies by a number of banks Yugoslavia and Hungary in Eastern Europe, appeared to have some effect on maintaining produced current account surpluses last year. short-term interest rates at higher levels than Brazil's current account deficit was essentially might otherwise have been the case. eliminated, and a number of other countries had The extraordinary concerns in the marketplace reduced deficits. dissipated as the year wore on, reflecting some This progress was faciliated in many cases by sense of progress in dealing with both the inter- significant increases in exports, particularly to national debt situation and points of domestic the United States, and in most cases was accomfinancial strain. Strong liquidity pressures at one panied by a recovery—or at least a slower rate of of the largest savings and loan organizations decline—of imports. Such developments, couduring the late summer and fall, requiring sizable pled with continued moderate capital inflows, liquidity support by the Federal Home Loan contributed to sizable increases in the interna- Bank System, had lesser effects on market atti- tional reserves of many of these countries and to tudes. The experience of 1984, together with the prospects of reduced demands for extraordisupervisory efforts and the strong continuing nary external financing in the future. At the same pressures on some sectors of the economy have time, most of those countries managed to underscored for depository institutions the im- achieve domestic growth. portance of adequate capital and prudent lending Against this background, several of the major policies, and other means of assessing and con- borrowing countries were able to move on to a trolling risk. Substantial efforts have been made second phase in their adjustment and financing by many of the larger banking organizations to programs. One important initiative, when warincrease capital ratios and to review credit stan- ranted by progress in adjustment, has been plandards. In time, in the environment of a growing ning for longer-term or multiyear restructuring of economy, these efforts should be reflected in outstanding debts on terms that reflect stronger stronger institutions and a reinforced banking creditworthiness and permit planning on a more system. assured basis for the future. Such arrangements have been agreed in principle between the commercial banks and Mexico and Venezuela; seri- APPENDIX B: THE INTERNATIONAL DEBT ous negotiations have begun with Brazil and SITUATION IN 1984 Yugoslavia; and the financing package prepared for Argentina contains some longer-term ele- At times during 1984, concerns about the exter- ments. nal debt problems of key borrowing countries However, it is also evident from developments continued to be an important factor affecting in 1984 and the first months of 1985 that the attitudes in financial markets. As the year began, process of adjustment, which began in 1982, is far markets had substantial doubts about the viabili- from complete, particularly on the internal side. ty of the Brazilian adjustment program, the pro- Financial markets will remain sensitive to indicagrams of the new Venezuelan and Argentine tions of progress or the lack thereof. Cooperation governments were unknown, and there was among borrowing countries, commercial banks, some sense of weariness among the borrowing multilateral institutions, and creditor countries countries and their creditors. Tensions were ag- will continue to be required. The need for imagigravated by increases in dollar interest rates in native and constructive solutions to problems the spring and early summer. faced by individual countries is not over. Subsequently, concerns in financial markets receded somewhat as interest rates moved low- APPENDIX C: TARGETING REAL GROWTH er, clear progress was recorded in narrowing some countries' external imbalances, and plans Questions sometimes arise as to whether the for long-term debt restructuring were developed Committee's forecasts for real GNP growth or for some of the largest borrowers. prices are in the nature of short-run targets Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

220 Federal Reserve Bulletin • April 1985 toward which the Federal Reserve "fine tunes" mittee in deciding on targets for the monetary policy, or whether the Committee has precon- and credit aggregates for the calendar year. Conceptions about just how rapidly the economy can sistent with the Humphrey-Hawkins Act proceand should grow over the medium or longer run. dures, the Committee's target ranges are speci- The answer to those questions is no. Monetary fied each February as a range of the growth from policy is, of course, broadly directed toward the fourth quarter of the previous calendar year sustaining the growth process in a noninflation- to the fourth quarter of the current calendar ary environment. But the Committee as a group year. has no preconceived notion as to just how rapid The convention that is usually used, is that the growth can or should be over a particular period beginning point—or "base" from which growth of time, without straining our resources or giving is measured—is taken to be the fourth quarter rise to price pressures and imbalances that would average growth of a particular monetary or credit make it ultimately unsustainable. aggregate. Other "bases" could be used—and Our capacity for growth over time depends on occasionally have been used—if the conventionsuch variables as the trends in productivity, in al base period is seriously distorted, by instituthe labor force, in incentives to save and invest, tional change or otherwise. and in other factors over which monetary policy During its recent meeting the Committee, as it has essentially no direct or long-run influence. has from time to time, discussed the issue of the There are other policies, public and private, desirability of choosing a base for 1985 for one or quite outside the purview of monetary policy that more of the aggregates other than the convenwill influence both our growth potential and tional one. It concluded that none of the fourthactual growth paths over time. There are debates quarter averages for the targeted aggregates were in and outside the Federal Reserve as to some of distorted in a manner that strongly suggested the these factors that affect economic growth, but desirability of departing from the usual convenannual monetary targets and operational deci- tion, and that such a departure might indeed sions do not, and need not, rest on such assump- confuse communication of the Committee's intions for the long run. tentions. It also noted that the average level of For instance, the Committee would presum- both Ml and M2 during the fourth quarter of 1984 ably welcome faster growth than predicted for was reasonably close to the midpoint of the 1985 if that proved consistent with moderating previous year's range, an alternative base suginflationary forces, and indeed, less inflation gested by some. M3 and credit ran significantly than anticipated would tend to encourage greater above the 1984 ranges. Rebasing those aggregrowth, consistent with our monetary targets. gates at the midpoint of the 1984 ranges would Indeed, the relationship between money and thus have implied a wrenching adjustment in the economic growth at any point in time is suffi- levels of those aggregates, a result that would be ciently loose that many other factors bear upon contrary to the Committee's intentions. Essenactual performance. tially, such a change would have implied a sub- In sum, policies are periodically reassessed in stantial tightening to bring the growth of those light of incoming information about prices, out- aggregates into the new ranges, or, alternatively, put, exchange rates, and other variables bearing a specification of ranges of growth for 1985 that on our growth potential and prospects for infla- would have been extraordinarily high and quite tion. In practice there is sufficient flexibility in out of keeping with longer-range intentions. our targeting procedures to accommodate infor- More broadly, a decision to regularly target mation that might suggest greater or lesser growth from the midpoint of a previous year's growth potential over time. range would seem to imply the continuing validity of a judgment made a year earlier that the APPENDIX D: THE BASE FOR MONETARY midpoint of a previous range is in some sense a TARGET RANGES uniquely "correct" level of a monetary aggregate. The Committee does not share such a Some questions have been raised concerning the conviction. Instead, it believes that the appropri- "base" used by the Federal Open Market Com- ate trend of each aggregate needs to be judged in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 221 the light of evidence as to velocity changes and themselves, or in the conduct of policy within other factors as they emerge over time. those ranges, can take account of any modest In setting targets for any year, the Committee distortions in the base. Such considerations are is, of course, aware of the base level of the reflected in the discussion of policy in the testiaggregate. Adjustments in the new target ranges mony. Chairman Volcker presented identical testimony before the House Subcommittee on Domestic Monetary Policy of the Committee on Banking, Finance and Urban Affairs, February 26, 1985. Statement by Paul A. Volcker, Chairman, Board ment figures. In the United States, jobs have of Governors of the Federal Reserve System, increased 7 million since the end of 1982. In before the Foreign Relations Committee, U.S. contrast, there has been virtually no increase in Senate, February 27, 1985. employment in the rest of the OECD area as a whole, and in many of those countries unemploy- I am pleased to discuss with you this morning the ment rates have continued to fluctuate around role of the United States in the global economy. their post-World War II highs. That role, of course, has many dimensions, and I At the same time, the growth and relative can only touch upon a few of them this morn- dynamism of the American economy have ing—specifically on the relationships between helped attract a flow of funds from abroad, our expansion and growth in the world generally, strengthening the dollar even as our external certain aspects of trade and exchange rate poli- trade and current accounts have moved into deep cy, and the problem of developing country debt. deficit. The growing net capital inflow—now As you know, we have enjoyed a strong recov- supplementing net domestic savings of individery for more than two years, with the real gross uals, businesses, and state and local governnational product rising some 12V2 percent from ments by nearly a third—has been a critically the fourth quarter of 1982 to the fourth quarter of important factor in enabling us to finance both 1984. rising investment and the enormous federal defi- GNP is a measure of production. Throughout cit. The strength of the dollar and the ready this period, domestic demand has increased fast- availability of goods from abroad have also been er than GNP. In essence, a significant fraction of potent factors restraining price increases for demand currently generated here—more than 2Vi manufactured goods in the United States. percent—is now flowing abroad, providing stim- From one perspective, those results are gratiulus to production overseas. Put another way, fying for us, and our trading partners have bene- U.S. purchases of goods and services have in- fited as well. But there are, of course, serious creased about 15 percent over the past two flaws—flaws that unless dealt with constructiveyears, as compared with the \2Vi percent in- ly, will undermine all the progress. Strains and crease in production. distortions are evident, for instance, in pressures With strong stimulus absent in the rest of the on our farmers, miners, and producers of heavy world, the growth of demand in the United States capital equipment. There have been exceptionalrepresented 70 percent of the total growth of ly high levels of unemployment in many other demand in the Organisation for Economic Co- industrialized countries, and, looking ahead, too operation and Development (OECD) area from few signs of significant improvement in that 1982 to 1984, even though we accounted for only respect. Moreover, the financial position of the 40 percent of GNP for the OECD in 1982. heavily indebted developing countries remains Moreover, countries outside the OECD area, vulnerable. Those difficulties feed back on prosincluding importantly many countries in Latin pects for our exports and for our financial sys- America, have similarly benefited from the vigor tem. Interest rates remain high relative both to of the U.S. recovery. historical experience and to recent rates of inflation. The difference in economic performance over this period has been starkly evident in employ- Those strains have specific causes and poten- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

222 Federal Reserve Bulletin • April 1985 tial remedies. But it is also true that they are all import, from the United States and other indusaggravated by underlying imbalances in our trade trialized countries. But that success will be deand budgetary accounts. U.S. trade and overall nied if the United States and other industrial current account deficits reached levels of almost countries protect their own markets from fair $110 billion and $100 billion respectively, during competition by developing countries. 1984. Such deficits seemed almost unimaginable Even if we could somehow shield developing a few years ago; yet the present prospect is that countries from broad protectionist measures— those external deficits could rise still further. and it is not clear that in practice we could do And it is not a coincidence that those external so—there are other high economic costs from deficits are accompanied by internal budget defi- widespread protectionism. Quotas, new tariffs, cits of unprecedented size during a period of or import surcharges all act directly to raise prosperity—deficits that, according to estimates prices, and the problem would not be temporary of both the administration and the Congressional if the effect would be to refuel inflationary expec- Budget Office, will tend to grow further in the tations—just at a time when so much progress absence of corrective action even assuming has been made in changing that psychology. healthy U.S. economic growth. Other things equal, protectionist measures that Economic analysis and common sense coin- actually had the effect of appreciably reducing cide in telling us that the budgetary and trade some imports would presumably be reflected in deficits of the magnitude we are running are not still further upward pressures on the dollar, sustainable indefinitely in a framework of growth hurting exporters and industries that were not and prosperity. They imply a dependence on protected. foreign borrowing by the United States that, left Beyond those specifics there are potentially unchecked, will sooner or later undermine the much more damaging risks of a breakdown in a confidence in our economy essential to a strong world trading order built up so laboriously after currency and to prospects for lower interest the chaos of the 1930s. rates. But the hard fact is that we have come to Consider, for example, the proposals now berely on that foreign borrowing to finance the ing discussed for a temporary import surcharge. combination of a budget deficit and the private Those proposals are sometimes coupled with investment demands generated by a growing other measures to reduce our budget deficit. economy. The largest and richest economy in the Such proposals are offered as a relatively painworld has perforce been required for the time less means of raising government revenue while being to draw on savings that might otherwise simultaneously addressing the trade deficit. have been invested abroad. Indeed, the inflow of One attraction is that an import surcharge savings from abroad is equal to something on the effectively taxes foreign exporters as well as order of 15 percent of net savings (or about 8 domestic residents. But it is also clear that any percent of gross savings) in all other OECD benefits, either for trade or for the budget, would countries combined. And, the related exchange be temporary. More lasting favorable conserate pressures, trade imbalances, and financial quences of the proposals would be derived not strains generate political as well as economic from the temporary surcharge but from the acpressures toward economic nationalism and pro- companying budget measures. tectionism. I would question whether the imposition of a It seems to me essential that those pressures surcharge makes those accompanying measures be resisted. There are powerful reasons why easier, or more difficult, to enact. In any event, such an approach is not in our economic interest so attractive a tax to the United States would whatever the response abroad. certainly be attractive to others as well. Most For instance, we have encouraged developing countries have budget deficits larger than they countries to adopt policies that will enable them would like, and with high unemployment would to service their debts, to enhance over time their not be averse to reducing imports. If the surproductive capacity, and to grow. Success is charge approach is, in effect, legitimized by the dependent upon their ability to increase ex- United States, wouldn't others find almost irreports—and as their exports grow they will also sistible temptations to emulate our example? Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 223 Would not that eliminate any net benefits and have produced current account surpluses. Braalso have destructive implications for world zil's current account deficit was essentially elimitrade—upon which our hard-pressed farmers, nated last year. Happily, most of those countries among others, are so dependent? have also managed to restore a measure of At a more fundamental level, we cannot logi- domestic growth. All of that progress was facilically take actions to reduce our trade deficit and tated by access to foreign markets, most imporat the same time welcome the associated capital tantly in the United States. inflows from abroad. The trade deficit and our In some instances, the progress in adjustment capital inflow are two sides of the same coin. has encouraged and justified longer-term or mul- Unless we reduce our budget deficit, success in tiyear restructuring of outstanding debts on improving our trade balance, and thus reducing terms that reflect stronger creditworthiness and the capital inflow, will only threaten stronger permit planning on a more assured basis for the pressures on our domestic financial markets, future. Such arrangements have been agreed in jeopardizing housing and investment. principle between the commercial banks and In essence, a lasting solution to the problem of Mexico, Venezuela, and Ecuador, and serious our external imbalance rests on simultaneously negotiations are under way with Brazil and Yurestoring internal financial equilibrium. I know of goslavia. no approach to that problem that promises suc- However, these signs of progress do not mean cess other than straightforward measures to re- that the "debt problem" is behind us—or that, duce our budget deficit over time. Approaches more broadly, the borrowing countries are firmly that obscure that basic need will, in the end, be on a path of sustained, strong growth in a context counterproductive. of political and economic stability. Indeed, some I do not want in any way to suggest that, of the more fundamental adjustments necessary important as action with respect to the budget to that end are still absent, or only partially in deficit is, that approach will somehow deal with place. Inflation, for instance, remains disturbingall the problems of the global economy. In partic- ly high in many of the countries, and in some is ular, other industrial countries have clear re- still rising to new peaks. Spontaneous new insponsibility and opportunity to take actions vestment by either domestic firms or from themselves to enhance their economic prospects. abroad has often been slow to develop, reflecting The importance of policies to deal with structural in considerable part concern in some countries rigidities in their economies has often been not- about the role for private investment and the ed. Moreover, in some important countries degree of controls and market distortions. Morewhere inflationary pressures have been success- over, on the more purely financial side, cooperfully contained, and where credible long-term ation among borrowing countries, commercial anti-inflationary monetary policies are firmly in banks, multilateral institutions, and creditor place, there may be scope for action to stimulate countries will continue to be required despite the their growth by constructive measures to speed protracted and tedious nature of the process. tax reductions or otherwise. Rather than impatience, the need remains for Certainly, much remains to be done to restore energetic and constructive approaches to the sustainable growth patterns in much of the devel- longer-term problems faced by individual counoping world. Over the past two years or more, a tries. number of the more advanced and largest devel- I will conclude with a few words about the oping countries, particularly in Latin America, dollar. Few if any anticipated the degree of have made serious efforts to implement appropri- strength that the dollar has displayed persistently ate adjustment programs in conjunction with the for some time, nor can it fully be explained by International Monetary Fund (IMF) and private such factors as relative interest rates or differfinancing arrangements. Clear progress—in ences in inflation rates. No doubt, relative confisome cases, spectacular progress—has been dence in our economic prospects, in our political made in eliminating or narrowing external imbal- stability, and in our business climate have played ances. Mexico and Venezuela in Latin America a part, as has a sharp diminution in our bank and Yugoslavia and Hungary in Eastern Europe lending abroad. At the same time, the widening Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

224 Federal Reserve Bulletin • April 1985 gap in our trade position suggests that our basic their savings in their own countries, and funds competitive position cannot support so high a could again be attracted in greater volume from dollar indefinitely. the United States or elsewhere. The policy question is what measures can be At times, forceful official intervention in extaken to encourage a reasonably competitive change markets could have a useful role to play. equilibrium over time. I suggest that the general But that role has to be complementary and approach I have alluded to today would work in subsidiary to more basic measures to have lastthat direction. ing impact. That is why measures to deal with the Credible measures to reduce the U.S. budget fundamental imbalances in our own financial deficit would alleviate one source of inflationary requirements are so important. concern and encourage lower real interest rates Over the near term, prospects for the economthan would otherwise be the case. In that envi- ic performance of the United States, and to a ronment, some other important industrial coun- lesser extent the rest of the world, appear to be tries might find it easier to undertake more favorable. We want to build sensibly on those stimulative policies at home. If they managed at strengths and to deal in a lasting way with the the same time to deal more effectively with some imbalances. Purely symptomatic treatment is not structural rigidities, the perceived contrast be- adequate—and, in the form of protectionism, will tween the opportunities in the U.S. economy and be counterproductive. The more basic approachthe relative sluggishness of European economies es necessarily take time, and we have let too could constructively be diminished. If develop- much time pass already. But fortunately we can ing countries could reduce inflation and restore still proceed from a position of strength. I trust more confidence in their own business climate, we will make the most of the opportunity before their own citizens would then employ more of us. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

225 Announcements MEETING OF and other permissible securities. This formula CONSUMER ADVISORY COUNCIL would have allowed bank holding companies to underwrite a volume of securities equal to or The Federal Reserve Board announced that its greater than that of the largest securities under- Consumer Advisory Council met on March 13 writers or, indeed, would have permitted the and 14, in sessions open to the public. acquisition by bank holding companies of the The council's function is to advise the Board largest investment banking firms whose underon the exercise of the Board's responsibilities writing activities (other than those in government under the Consumer Credit Protection Act and and other permissible securities) constitute only on other matters on which the Board seeks its a minor portion of their total activities. advice. While the Board, in accordance with its established practice, has allowed the withdrawal of the application, the Board's preliminary analysis WITHDRAWAL OF CITICORP APPLICATION indicated that the application would be inconsistent with the Glass-Steagall Act. The Federal Reserve Board has announced that The Board believes that the Congress is the Citicorp has withdrawn its application under the appropriate forum for resolution of the public Bank Holding Company Act to engage, through a policy considerations involved in proposals, wholly owned subsidiary, in underwriting and such as that advanced by Citicorp, that would dealing in corporate debt securities (including dramatically alter the framework established by commercial paper), municipal revenue bonds, the Congress in the Glass-Steagall Act for the mortgage-backed securities, and certain other conduct of commercial banking and investment debt obligations. The application was withdrawn banking businesses. before the Board decided whether to publish The Board believes that certain changes in this notice of the proposal in the Federal Register, framework are appropriate and desirable and which would have provided an opportunity for has, accordingly, supported legislation to authopublic comment on the proposal. rize bank holding companies to sponsor, control, The Citicorp application presented a novel and distribute the securities of mutual funds and proposal that required an interpretation of the to underwrite and deal in municipal revenue scope of the prohibition in the Glass-Steagall Act bonds, one- to four-family residential mortgageagainst member banks being affiliated with com- backed securities, and commercial paper. The panies engaged principally in underwriting and Board urges early congressional consideration of certain other securities activities and also a find- this and other banking structure issues that need ing under the Bank Holding Company Act that legislative resolution. these activities are closely related to banking and a proper incident thereto. Citicorp argued that its subsidiary would not AMENDMENT TO REGULATION J be engaged principally in the proposed securities activities within the meaning of section 20 of the The Federal Reserve Board has adopted an Glass-Steagall Act because the subsidiary would amendment to Regulation J (Collection of voluntarily limit the volume of these activities to Checks and Other Items and Wire Transfers of less than 20 percent of its total activity, including Funds) to improve the system of notification for underwriting and dealing in U.S. government nonpayment of checks of $2,500 or more that are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

226 Federal Reserve Bulletin • April 1985 processed through the Federal Reserve. At the Stephen P. Taylor, Assistant Director, retired, same time the Board approved a proposal to effective March 1, 1985. improve notification services offered by the Re- David E. Lindsey, Deputy Associate Director, serve Banks as part of the check collection has been promoted to Associate Director, effecprocess. Both actions will become effective in tive February 19, 1985. October 1985. Thomas D. Simpson, Assistant Director, has The Board's action, in general, requires a been promoted to Deputy Associate Director, depository institution upon which a large dollar effective February 19, 1985. check is drawn (payor institution) to notify the Lawrence Slifman, Assistant Director, has institution of first deposit within a specified time been promoted to Deputy Associate Director, limit that it is returning the check. To assist effective February 19, 1985. payor institutions in meeting this requirement, David B. Humphrey and Richard D. Porter Reserve Banks will enhance their current notifi- have both been appointed Assistant Directors, cation service. An enhanced notification service effective February 19, 1985. will also be available to depository institutions Mr. Humphrey has a Ph.D. from the Universifor checks collected outside the Federal Re- ty of California at Berkeley and has been chief of serve. the Financial Studies Section since 1980. Mr. Porter has a Ph.D. from the University of Wisconsin and has been Chief of the Economet- PROPOSED ACTION ric and Computer Applications Section since 1974. The Federal Reserve Board has proposed for comment an amendment to Regulation T (Credit The Board has also announced the temporary by Brokers and Dealers) that would change the appointment of Thomas E. Cimeno, Jr., as Depuinitial margin requirements for the writing of ty Director in the Division of Banking Supervioptions on equity securities. Comment is re- sion and Regulation, effective February 15, 1985. quested by March 15, 1985. Mr. Cimeno, who is currently Senior Vice President for Bank Supervision and Credit of the Federal Reserve Bank of Boston, will be on loan PUBLICATION OF to the Board for about one year. TRUST EXAMINATION MANUAL The Trust Examination Manual is now available. REVISIONS TO MONEY STOCK DATA This manual provides a clear statement of Federal Reserve trust examination policies, standards, Measures of the money stock have been revised and procedures to provide guidance for examina- to incorporate annual benchmark and seasonal tion personnel. It was prepared for use by trust adjustment changes, including revised monthly examination personnel of the Federal Reserve and weekly seasonal adjustment factors, which Banks and should not be considered a legal appear in the accompanying tables. Data prereference. The manual will be updated at least sented in tables 1.10 and 1.21 of the BULLETIN twice a year and is available on request at a price will reflect these revisions beginning with this of $20 from Publications Services, Board of issue. Governors of the Federal Reserve System, Deposits have been benchmarked to recent Washington, D.C. 20551. call reports. In addition, a new survey has been used to benchmark repurchase aggreements (RPs). The net impact of benchmark revisions CHANGES IN BOARD STAFF has been to raise growth of the aggregates somewhat in 1984 and also in 1983. For M3, in which The Board has announced the following changes benchmark revisions are largest, the most imporin the Division of Research and Statistics: tant source of revisions was term RPs at thrift Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 227 institutions, which now incorporate information Following the practice introduced last year, the from the new RP survey. nontransaction portion of M2 has been seasonal- Revisions to seasonal factors were based on an ly adjusted as a whole—instead of being built up X-ll ARIMA procedure used in recent years. from seasonally adjusted savings and small time 1. Seasonal factors used to construct Ml, M2 and M3, monthly, 1984-85 NNoonnbbaannkk Nontransaction components TTrraannssaaccttiioonn DDeemmaanndd YYeeaarr aanndd mmoonntthh CCuurrrreennccyy ttrraavveelleerrss ddeeppoossiittss'' ddeeppoossiittss'' cchheecckkss M2 M3 only 1984—January .9931 .9393 1.0180 1.0234 .9994 .9987 February .9875 .9480 .9785 .9729 1.0013 1.0017 March .9908 .9517 .9861 .9781 1.0037 1.0029 April .9966 .9542 1.0187 1.0108 1.0028 .9995 May 1.0005 .9794 .9867 .9830 1.0007 1.0026 June 1.0042 1.0549 .9992 .9959 1.0013 .9975 July 1.0085 1.1230 1.0025 1.0042 1.0015 .9934 August 1.0039 1.1069 .9870 .9880 .9993 1.0019 September .9982 1.0548 .9924 .9946 .9962 .9992 October .9977 1.0006 1.0007 1.0052 .9985 .9971 November 1.0046 .9519 1.0042 1.0085 .9978 1.0038 December 1.0138 .9360 1.0256 1.0355 .9961 1.0035 1985—January .9934 .9384 1.0175 1.0234 .9998 .9975 February .9877 .9471 .9788 .9729 1.0023 .9997 March .9911 .9510 .9863 .9778 1.0040 1.0023 April .9966 .9547 1.0183 1.0103 1.0028 1.0000 May 1.0006 .9800 .9869 .9830 1.0008 1.0029 June 1.0044 1.0560 1.0000 .9964 1.0014 .9984 July 1.0085 1.1237 1.0028 1.0050 1.0014 .9939 August 1.0038 1.1075 .9869 .9880 .9988 1.0025 September .9981 1.0548 .9924 .9948 .9958 .9993 October .9977 1.0001 1.0006 1.0054 .9983 .9966 November 1.0046 .9518 1.0039 1.0080 .9978 1.0042 December 1.0133 .9354 1.0253 1.0350 .9962 1.0035 1. Factors for transaction deposits are used to seasonally adjust the between seasonally adjusted transaction deposits and seasonally sum of demand deposits and other checkable deposits. Seasonally adjusted demand deposits. adjusted other checkable deposits are derived as the difference 2. Seasonal factors for selected components of the monetary aggregates, monthly, 1984-85 Experimental (model-based) factors Commercial bank deposits Thrift institution deposits for Ml YYeeaarr aanndd mmoonntthh Small- Large- Small- Large- Nonbank Trans- Savings denomi- denomi- Savings denomi- denomi- Currency travelers action nation nation nation nation checks deposits time time time time 1984—January .9964 1.0040 1.0047 .9935 1.0093 .9983 .9935 .9393 1.0189 February .9916 1.0057 1.0011 .9907 1.0075 1.0014 .9881 .9480 .9778 March 1.0021 1.0030 1.0037 .9993 1.0013 .9947 .9915 .9517 .9827 April 1.0109 .9910 .9910 1.0064 .9958 .9933 .9959 .9542 1.0137 May 1.0104 .9886 .9917 1.0068 .9879 .9995 1.0004 .9794 .9839 June 1.0100 .9896 .9964 1.0133 .9875 .9968 1.0034 1.0549 .9987 July 1.0095 .9947 .9955 1.0133 .9950 .9996 1.0080 1.1230 .9995 August .9985 1.0028 1.0056 .9965 .9994 1.0081 1.0051 1.1069 .9908 September .9924 1.0058 1.0051 .9939 1.0014 1.0038 .9981 1.0548 .9979 October .9954 1.0079 1.0031 .9982 1.0074 1.0081 .9993 1.0006 1.0006 November .9915 1.0068 .9999 .9950 1.0068 1.0035 1.0075 .9519 1.0089 December .9903 1.0016 1.0055 .9931 1.0015 .9951 1.0167 .9360 1.0278 1985—January .9956 1.0043 1.0029 .9929 1.0097 .9965 .9940 .9384 1.0206 February .9919 1.0055 .9982 .9908 1.0079 .9996 .9879 .9471 .9771 March 1.0026 1.0023 1.0013 .9992 1.0008 .9941 .9909 .9510 .9809 April 1.0111 .9904 .9907 1.0060 .9956 .9938 .9965 .9547 1.0153 May 1.0109 .9878 .9923 1.0071 .9870 .9996 .9999 .9800 .9834 June 1.0107 .9889 .9982 1.0144 .9867 .9972 1.0029 1.0560 .9976 July 1.0095 .9949 .9968 1.0132 .9949 1.0006 1.0085 1.1237 1.0007 August .9984 1.0031 1.0067 .9965 .9995 1.0090 1.0049 1.1075 .9899 September .9925 1.0062 1.0061 .9939 1.0015 1.0037 .9978 1.0548 .9973 October .9956 1.0081 1.0036 .9986 1.0076 1.0084 .9996 1.0001 1.0018 November .9915 1.0070 .9998 .9953 1.0072 1.0036 1.0065 .9518 1.0080 December .9900 1.0018 1.0048 .9926 1.0018 .9947 1.0176 .9354 1.0282 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

228 Federal Reserve Bulletin • April 1985 3. Seasonal factors for selected components of the monetary aggregates, weekly, December 1984-December 1985 Commercial bank deposits TTrraannssaaccttiioonn DDeemmaanndd WWeeeekk eennddiinngg CCuurrrreennccyy ddeeppoossiittss'' ddeeppoossiittss'' Small- Large- Savings denomination denomination time time 1984—December 3 .9999 1.0086 1.0141 .9911 1.0040 1.0024 10 1.0156 1.0252 1.0249 .9948 1.0015 1.0021 17 1.0117 1.0239 1.0329 .9912 1.0002 1.0037 24 1.0212 1.0163 1.0260 .9874 1.0007 1.0072 31 1.0089 1.0371 1.0589 .9876 1.0028 1.0105 1985—January 7 1.0086 1.0692 1.0850 .9979 1.0024 1.0067 14 1.0007 1.0400 1.0493 .9977 1.0041 1.0024 21 .9915 1.0094 1.0137 .9958 1.0054 1.0012 28 .9819 .9720 .9697 .9928 1.0054 1.0025 February 4 .9872 .9937 .9910 .9913 1.0047 1.0007 11 .9942 .9875 .9817 .9922 1.0049 .9988 18 .9909 .9783 .9745 .9921 1.0056 .9967 25 .9793 .9596 .9505 .9912 1.0065 .9968 March 4 .9849 .9849 .9765 .9945 1.0048 1.0004 11 .9958 .9958 .9854 1.0007 1.0039 1.0024 18 .9920 .9898 .9836 1.0017 1.0032 .9988 25 .9871 .9690 .9588 1.0042 1.0014 1.0028 AApprriill 11 .9865 .9876 .9810 1.0091 .9987 1.0012 88 1.0046 1.0284 1.0197 1.0182 .9905 .9988 15 1.0020 1.0363 1.0270 1.0138 .9897 .9919 22 .9957 1.0235 1.0140 1.0073 .9902 .9858 29 .9872 .9865 .9799 1.0056 .9904 .9855 May 6 1.0015 1.0017 .9962 1.0085 .9880 .9864 13 1.0054 .9975 .9950 1.0112 .9884 .9889 20 .9999 .9900 .9890 1.0118 .9875 .9918 27 .9982 .9622 .9554 1.0114 .9875 .9975 June 3 .9997 .9967 .9949 1.0112 .9883 .9989 10 1.0107 1.0144 1.0066 1.0129 .9896 1.0025 17 1.0052 1.0115 1.0074 1.0106 .9892 .9962 24 .9989 .9815 .9762 1.0090 .9881 .9947 JJuullyy 11 1.0000 .9912 .9940 1.0100 .9887 .9993 88 1.0210 1.0225 1.0235 1.0124 .9952 .9946 15 1.0141 1.0209 1.0249 1.0115 .9945 .9931 22 1.0073 .9943 .9952 1.0094 .9945 .9963 29 .9986 .9749 .9759 1.0063 .9947 1.0015 August 5 1.0067 1.0016 1.0031 1.0021 1.0006 1.0028 12 1.0111 .9981 1.0015 1.0011 1.0032 1.0050 19 1.0041 .9904 .9966 .9983 1.0034 1.0063 26 .9946 .9666 .9657 .9962 1.0033 1.0092 September 2 .9983 .9786 .9782 .9940 1.0050 1.0097 9 1.0077 1.0089 1.0082 .9954 1.0065 1.0050 16 1.0001 1.0076 1.0117 .9933 1.0056 1.0020 23 .9934 .9769 .9765 .9901 1.0065 1.0061 30 .9888 .9763 .9796 .9910 1.0060 1.0099 October 7 1.0053 1.0137 1.0166 .9991 1.0075 1.0049 14 1.0053 1.0172 1.0242 .9979 1.0089 1.0037 21 .9977 .9994 1.0050 .9954 1.0080 1.0031 28 .9894 .9779 .9821 .9916 1.0081 1.0056 November 4 .9972 1.0117 1.0148 .9913 1.0087 .9975 11 1.0084 1.0111 1.0139 .9934 1.0086 .9952 18 1.0041 1.0104 1.0188 .9919 1.0068 .9982 25 1.0004 .9852 .9867 .9904 1.0061 1.0048 December 2 1.0061 1.0009 1.0062 .9901 1.0047 1.0033 9 1.0141 1.0229 . 1.0236 .9943 1.0019 1.0004 16 1.0115 1.0241 1.0318 .9912 1.0007 1.0031 23 1.0184 1.0171 1.0273 .9873 1.0008 1.0055 30 . 1.0124 1.0305 1.0498 .9863 1.0028 1.0102 1. Factors for transaction deposits are used to seasonally adjust the between seasonally adjusted transaction deposits and seasonally sum of demand deposits and other checkable deposits. Seasonally adjusted demand deposits, adjusted other checkable deposits are derived as the difference Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 229 deposits—to reduce distortions caused by siz- SYSTEM MEMBERSHIP: able portfolio shifts in recent years. A similar ADMISSION OF STATE BANKS procedure has been used to seasonally adjust the non-M2 portion of M3. The following bank was admitted to membership Complete historical data also will be available in the Federal Reserve System during the period soon on request from the Banking Section, February 1 through March 1, 1985: Board of Governors of the Federal Reserve Virginia System, Washington, D.C. 20551. Springfield Hallmark Bank and Trust Company of Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

231 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON DECEMBER 17-18, 1984 theless, sales thus far in the fourth quarter were running at an annual rate about Vi million units 1. Domestic Policy Directive below the third-quarter rate of nearly 8 million units. The information reviewed at this meeting indicat- Total private housing starts, at an annual rate ed a mixed pattern of developments, with some of 1.5 million units in November, were about sectors showing a pickup from the lull of earlier unchanged from the reduced October pace. months. On balance, however, economic activity However, newly issued building permits for resiappeared to be expanding in the current quarter dential construction rose nearly 11 percent in at a rate approximating the considerably reduced November. The declines in mortgage rates over pace recorded in the third quarter. Broad mea- recent months apparently helped to bolster home sures of prices generally continued to increase at sales: in October, sales of new homes rose rates close to those in 1983. slightly further after a surge in September and After two months of decline, industrial pro- sales of existing homes leveled off after declining duction increased about 0.4 percent in Novem- for five consecutive months. ber, largely reflecting a rebound in auto produc- The rise in business fixed investment spending tion from strike-reduced levels. Production of had slowed substantially in recent months, folbusiness equipment and construction supplies lowing exceptionally rapid growth earlier. Shipdeclined further, while output of materials turned ments and orders of equipment from domestic up and production of defense and space equip- capital goods producers declined markedly in ment continued to advance strongly. October. Nevertheless, recent surveys of busi- The rise in nonfarm payroll employment ex- ness spending plans for 1985 indicated continceeded 300,000 in November for the second ued, though moderating, growth in expenditures month in a row, compared with monthly in- in the quarters ahead. creases averaging about 200,000 in the third The producer price index for finished goods quarter. There were large gains in the service and rose 0.5 percent in November, after declining 0.2 retail trade industries, but employment in manu- percent in each of the preceding two months. facturing rose only slightly. The civilian unem- The reversal reflected in part a 0.7 percent ployment rate fell 0.2 percentage point to 7.2 increase in food prices, which had declined on percent, following four months of virtually no balance since July; prices for a variety of other change. consumer goods also picked up in November. Retail sales, after changing little in October, Thus far in 1984 producer prices for finished rose an estimated 1.8 percent in November ac- goods had risen at an annual rate of less than 2 cording to the advance report of the Census percent. Through October, the latest month for Bureau. The November gain was broadly based, which data on consumer prices were available, but sales were especially strong at stores selling the CPI had increased at an annual rate of about primarily discretionary items such as apparel and 4VA percent. The index of average hourly earngeneral merchandise. Sales of new domestic ings over the first 11 months of the year rose at automobiles were at an annual rate of about IVA an annual rate of about 3 percent, compared with million units in both October and November, but an increase of 4 percent in 1983 as a whole. rebounded to an annual rate of nearly 83/4 million The foreign exchange value of the dollar apunits in the first ten days of December. Never- preciated about 5 percent over the intermeeting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

232 Federal Reserve Bulletin • April 1985 interval; this rise reversed most of the previous November, reflecting very large government decline from the peak in mid-October. The dollar borrowing and continued strong growth in primoved up during the period despite a narrowing vate credit. Thus far in 1984, expansion in doin the differential between U.S. and foreign inter- mestic nonfinancial debt was running appreciaest rates. In October the U.S. foreign trade bly above the Committee's monitoring range for deficit was significantly reduced from the rate in the year. the third quarter, mainly because of a sharp Open market operations over the intermeeting decline in non-oil imports. interval were directed at achieving some reduc- At its meeting on November 7, 1984, the tion in pressures on bank reserves against the Committee had adopted a directive that called background of lagging growth in the narrow for a somewhat reduced degree of restraint on money supply, generally sluggish expansion in reserve positions. The members expected that the economy, subdued inflation, and continued such an approach to policy implementation strength of the dollar in foreign exchange marwould be consistent with growth of M2 and M3 at kets. The average level of borrowing by deposiannual rates of about IVi and 9 percent respec- tory institutions at the discount window moved tively, as established at the early October meet- down on balance over the period, and in Noveming for the period from September to December. ber nonborrowed and total reserves increased at Given the appreciable decline in Ml in October, annual rates of about 17'/2 and 11'A percent its growth over the three-month period was ex- respectively. The decline in borrowing, along pected to be at an annual rate of around 3 with a reduction in the discount rate from 9 to %Vz percent, rather than the 6 percent rate anticipat- percent on November 21, was associated with a ed at the October meeting; however, the mem- drop in the federal funds rate from the 9lA to 10 bers indicated that more rapid growth in Ml than percent area at the time of the November FOMC currently anticipated would be acceptable for the meeting to around 83/4 percent recently, with quarter. Lesser restraint on reserve positions trading on the days immediately preceding this would be sought if growth in the monetary aggre- meeting somewhat below that level. Other shortgates was significantly below expectations, eval- term interest rates also moved down, declining uated in the context of the strength of the busi- about 50 to 90 basis points; intermediate-term ness expansion and inflationary pressures, rates fell about 45 to 65 basis points, while most conditions in domestic and international financial long-term rates declined only modestly. At savmarkets, and the rate of growth in domestic ings and loan associations, however, the average nonfinancial debt. Conversely, greater restraint rate on new commitments for fixed-rate convenmight be acceptable in the event of substantially tional home mortgage loans—which typically more rapid growth than expected in the mone- move in lagged response to changes in market tary aggregates and evidence that economic ac- yields—declined 65 basis points over the period. tivity and inflationary pressures were strengthen- Most commercial banks reduced their "prime" ing significantly. The intermeeting range for the rate in several steps by 75 basis points to WVA federal funds rate was set at 7 to 11 percent. percent, and a few banks were lowering their In November Ml increased at an annual rate of rates further at the time of this meeting. about 8V2 percent, offsetting the decline in Octo- The staff projections presented at this meeting ber. Since early summer Ml had grown little on suggested that growth in real GNP in the short balance, and from the fourth quarter of 1983 run would be somewhat slower than previously through November its growth was in the lower anticipated as some final demands were expected half of the Committee's range for 1984. Growth to be satisfied by reductions of inventories rather in M2 and M3 was especially rapid in November, than through current production. For the year at annual rates of about 15 and 16 percent 1985, however, the staff continued to expect a respectively, bringing M2 to the midpoint of its moderate rate of expansion in economic activity. longer-run range and M3 a bit further above the The unemployment rate was projected to edge upper limit of its range. Expansion in total do- down over the period and the rate of price mestic nonfinancial debt was estimated to have increase to remain close to that experienced in picked up to an annual rate of about 14 percent in 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 233 In the Committee's discussion of the economic further increases in debt-financed expenditures. situation and outlook, the members differed to Moreover, a substantial portion of consumer some extent on the prospects for economic activ- demand might in any event continue to be met ity in 1985, but they generally agreed that under- from imports, with adverse consequences for lying economic conditions favored further mod- domestic production. erate growth during the year, especially in the Members noted that growth in business fixed context of a stimulative fiscal policy and the investment had moderated considerably in redecline in interest rates that had occurred. While cent months from an exceptionally rapid pace various measures of economic activity continued earlier. While continuing growth could be exto indicate a mixed pattern of developments, pected in 1985, it would probably contribute some recent information suggested a less slug- much less than earlier to overall gains in economgish overall performance than earlier. With refer- ic activity, but uncertainties connected with the ence to the staff projection, a few members felt recent tax proposals might affect the extent of that the risks of a deviation were in the direction the slowdown. On the other hand, reduced mortof somewhat faster growth. Some others saw gage rates would make housing a less constrainthose risks as about evenly balanced, while sev- ing influence on economic activity than it had eral believed there were more risks of a shortfall. been in recent quarters, and the view was ex- Many members were concerned that the project- pressed that some revival in housing construced rate of expansion was in any event inadequate tion was a reasonable prospect for 1985. It was in light of the availability of labor and capacity noted, though, that uncertainties about future tax and other factors. legislation could exert some restraining effect on The members continued to give considerable housing, notably with regard to certain financing emphasis to the many risks that could lead to an activities and particular types of housing such as unexpected outcome, especially in view of po- second homes. tential complications associated with massive As they had at previous meetings, the memand sustained federal deficits and very large bers gave a good deal of attention to the effects of imbalances in the nation's foreign trade. Other the continuing strength of the dollar in foreign areas of uncertainty related to various financial exchange markets. The related surge in imports strains or other problems in several sectors of the was having a very negative impact on production economy, including energy-related industries in many domestic industries, while expansion in and especially agriculture, which was experienc- exports was being curbed by the appreciated ing serious difficulties in many parts of the coun- value of the dollar as well as by relatively slow try. It was also noted that the recent tax propos- economic growth abroad. Some members comals of the U.S. Treasury might tend to alter mented that they saw little or no prospect for business spending plans in uncertain ways as the significant improvement in the trade balance in likelihood of implementation of various elements 1985. If the foreign exchange value of the dollar of the proposals was assessed. were to decline moderately, foreign suppliers The members recognized that the performance were viewed as likely to absorb some of the of the economy in the months immediately ahead exchange loss through their profits, at least in the would depend in important measure on consum- short run, in order to protect their market shares er expenditures. The rising incomes of consum- in the United States, in the process moderating ers, their large holdings of liquid assets, and an any inflationary impact of the dollar's decline. It apparently high degree of consumer confidence was noted that a rapid decline of the dollar might pointed to continuing growth in consumer spend- have undesirable effects on confidence or on the ing. In the view of at least some members, stability of markets if it led to a worsening of however, such spending might remain relatively inflationary expectations. sluggish during the year ahead. They noted in The members continued to regard the outlook this regard that consumer expenditures often for inflation as relatively favorable in the sense tended to falter during the third year of an that a moderate expansion in economic activity expansion and that the substantial rise that had was not seen as likely to be associated with already occurred in consumer debt might inhibit renewed upward pressures on wages and prices Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

234 Federal Reserve Bulletin • April 1985 or, absent a sharp decline in the dollar, strong improve the prospects for economic expansion in new price pressures from other sources. Mem- 1985. The views of these members differed to bers noted that prices of sensitive commodities some extent on the degree of easing that should were still declining and that there appeared to be sought. A few members, though, wanted have been a downward shift in inflationary ex- essentially to maintain, pending new developpectations in recent months, with favorable im- ments, the lesser degree of reserve restraint that plications for future progress in containing wage had been achieved recently. and price increases. Indeed, a number of mem- In the discussion of the pressures to be sought bers commented that somewhat faster economic on reserve positions, some members stressed the growth than was generally expected at this time risks of inadequate economic expansion in 1985 might also be compatible with little or no addi- and commented that even a relatively rapid pace tional inflationary pressures in 1985. At the same of economic growth next year would not be time, it was emphasized that the rate of inflation likely to incur much risk of stimulating a signifiwas still too high and needed to be reduced over cant intensification of inflationary pressures. time. One member also expressed the view that Some observed that despite sizable declines in improvements in productivity were likely to con- nominal interest rates, real interest rates were tribute to diminishing inflationary pressures over still quite high, partly because of a downward the longer run. On the negative side, a sizable shift in inflationary expectations, and were exertdecline in the value of the dollar would in time ing considerable restraint on economic activity. exert upward pressure on domestic prices, al- A number of members also commented that though given the lags that were involved, any domestic considerations in favor of lesser resuch impact might be relatively limited during straint were reinforced by the need to take 1985. Reference was also made to uncertainties account of the strength of the dollar in foreign about productivity improvements and to a desire exchange markets and the severe debt-servicing to raise profit margins in many industries, even problems of several developing countries. Other though competitive factors, both domestic and members, particularly those who preferred little international, might well continue to hold prices or no easing of reserve conditions, noted the down for a time. possibility that the expansion might turn out to At its meeting in July the Committee had be more vigorous than was generally expected. agreed on policy objectives that called for tenta- The impact of reduced interest rates had not yet tive growth ranges for the period from the fourth been fully reflected in the economy and more quarter of 1984 to the fourth quarter of 1985 of 4 time was needed to gauge that impact as the to 7 percent for Ml, 6 to SV2 percent for M2, and Committee endeavored to steer an appropriate 6 to 9 percent for M3. The associated range for policy course that would encourage expansion in total domestic nonfinancial debt was provisional- economic activity while avoiding an intensificaly set at 8 to 11 percent for 1985. At this meeting tion of inflation. the Committee reviewed background factors The members concurred that growth in Ml bearing on the ranges for 1985—including how might accelerate over the months ahead, partly experience in 1984 may affect the establishment in lagged response to sizable declines in shortand implementation of those ranges—in the ex- term interest rates during recent months, but pectation that at its next meeting it would reas- several were of the view that some additional sess and set specific ranges for the year within easing of reserve conditions was probably needthe framework of the Full Employment and ed to help assure adequate growth in Ml. It was Balanced Growth Act of 1978 (the Humphrey- noted that there was as yet no clear evidence that Hawkins Act). the recent easing of reserve conditions and ac- During the Committee's discussion of policy companying decline in short-term interest rates implementation for the intermeeting period would foster a sustained rebound in Ml growth. ahead, most of the members expressed a prefer- On the other hand, growth in the broader aggreence for directing open market operations to- gates appeared to be exceeding the Committee's ward some further easing of reserve conditions expectations for the fourth quarter by a substanto encourage satisfactory growth in Ml and to tial margin and it was suggested that the perform- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 235 ance of Ml needed to be evaluated in light of that growth in the monetary aggregates than was development. With respect to the outlook for the currently expected and indications that ecobroader aggregates, the members generally antic- nomic activity and inflationary pressures were ipated appreciable slowing from the unusually strengthening significantly. It was agreed that the rapid growth experienced in recent weeks, large- intermeeting range for the federal funds rate, ly because they expected inflows of funds to which provides a mechanism for initiating conmoney market deposit accounts and money mar- sultation of the Committee when its boundaries ket mutual funds to slow substantially as the are persistently exceeded, should be reduced by interest rates paid on such accounts were adjust- one percentage point to 6 to 10 percent. ed down to bring them into better alignment with At the conclusion of the meeting, the following short-term market rates. domestic policy directive was issued to the Fed- Along with other short-term rates, the federal eral Reserve Bank of New York: funds rate had declined considerably in recent The information reviewed at this meeting indicates a weeks and might fall a little more if pressures on mixed pattern of developments but on balance sugreserve positions were eased somewhat further. gests that economic activity is continuing to expand in Under the circumstances, most of the members the current quarter at a rate approximating the considwere in favor of a technical downward adjust- erably reduced pace recorded in the third quarter. ment in the current intermeeting range of 7 to 11 Nonfarm payroll employment rose substantially further outside of manufacturing in November, and the percent. It was suggested during this discussion civilian unemployment rate fell from 7.4 to 7.2 perthat a rise in the federal funds rate to around the cent. After two months of decline industrial producupper limit of the existing range would imply tion increased somewhat in November, largely reflectreserve conditions that were inconsistent with ing a rebound in auto production from strike-reduced the Committee's objectives for monetary levels. Retail sales registered a large gain in November after changing little in October. Information on outlays growth. On the other hand, some members causuggests substantially slower expansion in business tioned that a decline in the rate that was too fixed investment, following exceptionally rapid growth precipitous or sizable might signal more of an earlier. Since the beginning of the year, broad meaeasing to markets than was needed to achieve the sures of prices generally have continued to rise at rates Committee's objectives. close to, or somewhat above, those recorded in 1983, and the index of average hourly earnings has risen At the conclusion of the Committee's discussomewhat more slowly. sion, a majority of the members indicated that Growth of the monetary aggregates strengthened they favored or could accept a directive that markedly in November. The November expansion in called for some further reduction in the degree of Ml offset the decline in October, and this aggregate restraint on reserve positions. The members ex- has grown little on balance since early summer; from the fourth quarter of 1983 through November, Ml pected that such an approach to policy implegrew at a rate in the lower half of the Committee's mentation would be consistent with growth of range for 1984. Growth in the broader aggregates was Ml at an annual rate of around 7 percent during especially rapid in November, bringing M2 to the the four-month period from November to March midpoint of its longer-run range and M3 a bit further and with expansion of both M2 and M3 at an above the upper limit of its range. Expansion in total domestic nonfinancial debt is continuing above the annual rate of about 9 percent during the same Committee's monitoring range for the year, reflecting period. Because of the currently estimated shortvery large government borrowing and strong private fall in Ml growth in the fourth quarter compared credit growth. Interest rates have fallen further since with the members' expectations at the beginning the November meeting of the Committee, with the of the quarter, the Committee decided that some- largest declines concentrated in short-term markets. On November 21, the Federal Reserve approved a what more rapid growth of Ml'would be acceptreduction in the discount rate from 9 to SVz percent. able for the period ahead, particularly if the Since early November the foreign exchange value of faster growth occurred in the context of sluggish the dollar against a trade-weighted average of major expansion in economic activity and continued foreign currencies has appreciated substantially, restrength of the dollar in foreign exchange mar- versing most of the previous decline from its midkets. The Committee also indicated that greater October peak. The merchandise trade deficit in October was significantly reduced from the rate in the third restraint on reserve positions might be acceptquarter, mainly reflecting a sharp decline in non-oil able in the event of substantially more rapid imports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

236 Federal Reserve Bulletin • April 1985 The Federal Open Market Committee seeks to fos- believed such action should be relatively graduter monetary and financial conditions that will help to al. In particular, he was concerned that the reduce inflation further, promote growth in output on a provision of reserves sought by the Committee sustainable basis, and contribute to an improved patrisked an excessive decline in short-term rates tern of international transactions. In furtherance of these objectives the Committee agreed at the July and an overreaction in the financial markets. He meeting to reaffirm the ranges for monetary growth therefore preferred a more cautious probing tothat it had established in January: 4 to 8 percent for Ml wards easier reserve conditions. and 6 to 9 percent for both M2 and M3 for the period Mr. Gramley dissented because he could not from the fourth quarter of 1983 to the fourth quarter of accept a directive that called for further easing of 1984. The associated range for total domestic nonfinancial debt was also reaffirmed at 8 to 11 percent for reserve conditions. In his view the underlying the year 1984. It was anticipated that M3 and nonfinan- strength of the economy together with the ongocial debt might increase at rates somewhat above the ing effects of earlier declines in interest rates upper limits of their 1984 ranges, given developments provided the basis for a likely rebound in ecoin the first half of the year, but the Committee felt that nomic growth during 1985. He also believed that higher target ranges would provide inappropriate benchmarks for evaluating longer-term trends in M3 the Committee needed to take greater account of and credit growth. For 1985 the Committee agreed on the broader monetary aggregates whose expantentative ranges of monetary growth, measured from sion appeared to be exceeding the Committee's the fourth quarter of 1984 to the fourth quarter of 1985, expectations by a substantial margin in the fourth of 4 to 7 percent for Ml, 6 to 8V2 percent for M2, and 6 quarter. Under current circumstances he was to 9 percent for M3. The associated range for nonfinancial debt was set at 8 to 11 percent. concerned that significant further easing of re- The Committee understood that policy implementa- serve conditions would foster additional declines tion would require continuing appraisal of the relation- in interest rates that would have to be reversed ships not only among the various measures of money later as economic growth picked up again. and credit but also between those aggregates and On January 18, 1985, the Committee held a nominal GNP, including evaluations of conditions in domestic credit and foreign exchange markets. telephone conference to discuss recent foreign In the implementation of policy in the short run, the exchange market developments in the context of Committee seeks to reduce pressures on reserve posi- the announcement made by the G-5 Ministers of tions consistent with growth of Ml, M2, and M3 at Finance and Central Bank Governors. Against annual rates of around 7, 9, and 9 percent, respectivethe background of various measures that could ly, during the period from November to March. Somewhat more rapid growth of Ml would be acceptable in contribute to greater exchange rate stability, that light of the currently estimated shortfall in growth for announcement reaffirmed, in light of recent dethe fourth quarter relative to the Committee's expecta- velopments, the commitment made at the Wiltions at the beginning of the period, particularly in the liamsburg Summit to undertake coordinated incontext of sluggish growth in economic activity and tervention in exchange markets as necessary. It continued strength of the dollar in exchange markets. Greater restraint on reserve positions might be accept- was noted in the course of discussion that the able in the event of substantially more rapid monetary Committee's authorizations for foreign currency growth and indications of significant strengthening of operations provided adequate scope for any aceconomic activity and inflationary pressures. The tions in exchange markets that might be under- Chairman may call for Committee consultation if it taken by the System in this context. appears to the Manager for Domestic Operations that pursuit of the monetary objectives and related reserve paths during the period before the next meeting is 2. Authorization for Domestic likely to be associated with a federal funds rate persis- Open Market Operations tently outside a range of 6 to 10 percent. At this meeting the Committee voted to increase Votes for this action: Messrs. Volcker, Boehne, from $4 billion to $6 billion the limit on changes Boykin, Corrigan, Mrs. Horn, Messrs. Martin, between Committee meetings in System Account Partee, Rice, Ms. Seger, and Mr. Wallich. Votes against this action: Messrs. Solomon and Gramley. holdings of U.S. government and federal agency securities specified in paragraph 1(a) of the au- Mr. Solomon dissented from this action be- thorization for domestic open market operations, cause, although he thought some further easing effective for the intermeeting period ending with would be appropriate over the coming period, he the close of business on February 13, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 237 Votes for this action: Messrs. Volcker, Solomon, Manager had advised that substantial net sales of Boehne, Boykin, Corrigan, Gramley, Mrs. Horn, securities were likely to be necessary during the Messrs. Martin, Partee, Rice, Ms. Seger, and Mr. weeks ahead in order to absorb reserves that had Wallich. Votes against this action: None. been provided recently to meet increased sea- This action was taken on the recommendation sonal needs for currency in circulation and reof the Manager for Domestic Operations. The quired reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

239 Legal Developments AMENDMENTS TO REGULATION J that it is received as specified by the operating circular of the paying bank's Reserve Bank by the The Board of Governors has amended Regulation J depositary bank by midnight of the second banking (12 C.F.R. Part 210) to strengthen the current require- day of the paying bank following the deadline for ment that payor depository institutions provide notice return of the item as specified in paragraph (a) of this when they are returning unpaid large dollar checks section. If the day the paying bank is required to presented through the Federal Reserve. The amend- provide notice to the depositary bank is not a ment requires the payor institution to provide timely banking day for the depositary bank, receipt of notice to the depository institution at which the check notice on the depositary bank's next banking day was originally deposited that the check is being re- shall constitute timely notice under this paragraph. turned unpaid. The Federal Reserve Banks will en- Notice may be provided through any means, includhance the notification service they currently provide ing return of the cash item so long as the cash item is to assist payor institutions in meeting this require- received by the depositary bank within the time ment. The Federal Reserve's notification service will limits specified in this subparagraph. also be available to depository institutions for checks (3) The information contained in the notice shall collected outside the Federal Reserve. include the name of the paying bank, the name of the Effective October 1, 1985, the Board amends payee, the amount of the item, the reason for return, 12 C.F.R. Part 210 as follows: the date of the indorsement of the depositary bank, the account number of the depositor, the branch at which the item was first deposited, and the trace Part 210—Federal Reserve Bank Check number on the item of the depositary bank, and Collection System should otherwise be in accordance with uniform standards and procedures specified by the operating In § 210.12, the last sentence of the section is designat- circular of the paying bank's Reserve Bank. A ed as paragraph (d), and new paragraph (c) is added paying bank is not required to provide any informaafter paragraph (b) to read as follows: tion in the notice that it, after exercising ordinary care and acting in good faith, is not able to determine with reasonable certainty from the item itself. (4) A paying bank is not required to, but may voluntarily, provide notice to the department of the Section 210.12—Return of Cash Items depositary bank or other entity specified by the depositary bank to receive the notice. (5) If a paying bank provides a notice pursuant to subparagraph (1) of this paragraph and subsequently (c) Notification of Nonpayment. determines to pay the item, the paying bank shall provide to the depositary bank a second notice as (1) A paying bank that receives a cash item in the soon as reasonably possible. This second notice amount of $2500 or more directly or indirectly from should indicate that it is a second notice that is a Reserve Bank and determines not to pay it shall cancelling a previous notice and should contain provide notice to the first bank to which the item sufficient information to enable the depositary bank was transferred for collection ("depositary bank") to match the second notice with the previous notice. that the paying bank is returning the item unpaid. If (6) A paying bank that fails to exercise ordinary care the depositary bank is not located in a state, the in meeting the requirements of this paragraph shall paying bank shall provide the notice to the bank be liable to the depositary bank for losses incurred located in a state that first handled the item for by the depositary bank, up to the amount of the collection. item, reduced by the amount of the loss that the (2) The paying bank shall provide the notice such depositary bank would have incurred even if the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

240 Federal Reserve Bulletin • April 1985 paying bank had used ordinary care. A paying bank BANK HOLDING COMPANY, BANK MERGER, AND that fails to act in good faith in meeting the require- BANK SERVICE CORPORATION ORDERS ISSUED ments of this paragraph may be liable for other BY THE BOARD OF GOVERNORS damages, if any, suffered by the depositary bank as a proximate consequence. If the paying bank or the Orders Issued Under Section 3 of Bank Holding depositary bank prevails in litigation involving the Company Act requirements of this paragraph, it may recover its court costs and reasonable attorneys' fees. A paying Pikeville National Corporation bank shall not be liable for mistake, neglect, negli- Pikeville, Kentucky gence, misconduct, insolvency or default of any other bank or other person in connection with Order Denying Acquisition of a Bank providing notice under this paragraph. (7) Notwithstanding the provisions of section 210.6 Pikeville National Corporation, Pikeville, Kentucky, a of this subpart, a Reserve Bank that fails to exercise bank holding company within the meaning of the Bank ordinary care in undertaking to provide the notice Holding Company Act ("Act") (12 U.S.C. § 1841 required in this paragraph on a paying bank's behalf et seq.), has applied for the Board's approval under shall be liable to the depositary bank for losses section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to incurred by the depositary bank, up to the amount of acquire 100 percent of the voting shares of First the item, reduced by the amount of the loss that the Guaranty Bank of Martin, Martin, Kentucky depositary bank would have incurred even if the ("Bank"). Reserve Bank had used ordinary care. A Reserve Notice of the application, affording opportunity for Bank that fails to act in good faith in undertaking to interested persons to submit comments and views, has provide the notice required in this paragraph on a been given in accordance with section 3(b) of the Act. paying bank's behalf may be liable for other dam- The time for filing comments and views has expired, ages, if any, suffered by the depositary bank as a and the Board has considered the application and all proximate consequence. If the Reserve Bank or the comments received, including those submitted by depositary bank prevails in litigation involving the First Commonwealth Bank and The Bank Josephine, requirements of this paragraph, it may recover its both of Prestonsburg, Kentucky ("Protestants"), in court costs and reasonable attorneys' fees. A Re- light of the factors set forth in section 3(c) of the Act serve Bank shall not be liable for mistake, neglect, (12 U.S.C. § 1842(c)). negligence, misconduct, insolvency or default of Applicant, the sixth largest banking organization in any other bank or other person, including the paying Kentucky, controls one bank, Pikeville National Bank bank in connection with providing notice under this ("Pikeville Bank"), with total deposits of $257.6 milparagraph. lion, representing 1.3 percent of the total deposits in (8) Notwithstanding the provisions of section 210.6 commercial banks in the state.1 Upon acquisition of of this subpart, a Reserve Bank that undertakes to Bank, with deposits of $65.5 million, Applicant's share provide the notice required in this paragraph on a of deposits in commercial banks in Kentucky would paying bank's behalf shall indemnify the paying increase by only 0.3 percentage points to 1.6 percent. bank for any claim brought against it by the deposi- Accordingly, consummation of this proposal would tary bank that results from the Reserve Bank's not have an appreciable effect upon the concentration failure to exercise ordinary care or failure to act in of commercial banking resources in Kentucky. good faith in providing the notice. The paying bank Applicant operates 10 banking offices, all of which shall indemnify a Reserve Bank that undertakes to are located in Pike County, Kentucky. Bank operates provide the notice required in this paragraph on the one office in Martin, which is in Floyd County, Kenpaying bank's behalf for any claim brought against tucky. Martin is connected by 23 miles of four-lane the Reserve Bank by the depositary bank that highway to Pikeville, where Applicant is located. results from the paying bank's failure to exercise Applicant claims that Pike County and Floyd County ordinary care or failure to act in good faith in are separate banking markets, and thus, that consumconnection with the provision of the notice. mation of this proposal will not eliminate existing (9) This paragraph does not apply to an item drawn competition between Applicant and Bank. Protestants on the account of the U.S. Treasury or to an item claim, however, that the relevant geographic market indorsed by, or for credit to, the U.S. Treasury. should be defined as Floyd County and Pike County, Kentucky. Protestants base their contention that the 1. All banking data are as of March 31, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 241 relevant market consists of both counties on several Sandy. Pike and Floyd Counties have populations of factors, including the existence of a four-lane highway 81,123 and 48,764, respectively. The nearest major that runs through and connects Pikeville and Prestons- commercial centers are Lexington, which is approxiburg, the major towns in Pike County and Floyd mately 140 miles west of Pikeville and the Huntington- County, respectively,2 and shopping facilities that Ashland metropolitan area, which is approximately 95 attract Floyd County residents to Pike County.3 miles northeast of Pikeville. The main industry in both The Board has previously indicated that the relevant counties is coal mining. banking market must reflect the commercial and bank- Pikeville, the largest city in this area of the state and ing realities and should consist of the localized area the county seat of Pike County, is connected to where the banks involved offer their services and Prestonsburg, the largest city in Floyd County and the where local customers can practicably turn for alterna- county seat, by a 26-mile section of Route 23, which is tives.4 As the Supreme Court has stated, the proper a four-lane divided federal highway. Martin, where question "is not where the parties to the merger do Bank is currently located, is eight road miles from business or even where they compete, but where, Prestonsburg and 23 miles from Pikeville via a high within the area of competitive overlap, the effect of the quality four-lane connecting highway to Route 23. merger on competition will be direct and immediate."5 Although Pikeville and Prestonsburg are the largest This area "must be charted by careful selection of the towns in Pike and Floyd Counties with populations of market area in which the seller operates and to which 4,756 and 4,011, respectively, the region between the the purchaser can practicably turn for supplies."6 two towns, which includes Martin, where Bank is Applying these principles to the facts of this case, located, has a population that far exceeds that of either and after carefully considering the submissions by town.7 The field investigation of the area indicates that Applicant, Protestants, and the facts of record, includ- virtually all the usable land bordering Route 23 is ing a field investigation of the Floyd and Pike County either occupied by a residence or business or is under area conducted by the staffs of the Board and the development. Federal Reserve Bank of Cleveland, the Board con- The area between and including the two towns is cludes that the relevant banking market within which also where a substantial portion of the two counties' to evaluate the competitive effects of this proposal is commercial activities are centered. A continuous Pike and Floyd Counties, Kentucky. This conclusion quarter mile shopping area in Pike County that conis based on the ready accessibility for a substantial tains a number of national and regional retailers, such portion of the counties' population to banking services as K-Mart and Kroger's, operates within 3.5 miles of offered by banks in both counties, the proximity of the the Pike/Floyd County border. The field survey indibanks involved, and the demography and economic cated that a substantial number of the customers of the integration of the region. shopping area are from Floyd County. A proposed Pike and Floyd Counties are located in a mountain- new shopping mall near the county line in Pike County ous region of southeast Kentucky known as Big with the sole outlets of national retailers in that region, such as Sears and J.C. Penney, is likely to attract even more people from Floyd County to Pike County. All of the banks in Pike County propose to have branches in 2. Protestants also express concern over Bank's plans to change from a state chartered bank to a federally chartered bank and to move the new mall. Bank from Martin to Prestonsburg, where Protestants are located. The existing banking activity of Floyd and Pike The Comptroller of the Currency has granted preliminary approval of County banks also reflects the distribution of populathe charter. The Board expresses no views regarding Bank's new charter or its proposed move. Inasmuch as Bank would move within tion and economic activity described above. Three Floyd County, the move would not affect the analysis of the proposal banks operate in Pike County and all of these banks under Protestant's proposed market definition. have branches in the area near the county border along 3. Protestants also requested a hearing on the application. There is no statutory requirement in the Act that the Board conduct such a Route 23. Interviews with Pike County bankers indihearing. Moreover, the Board has examined the written submissions by Protestants and Applicant and is unable to conclude that a hearing would significantly supplement the record or resolve issues that are already discussed in the written submissions. Thus, the Board concludes that the record in this case is sufficiently complete to render a 7. For example, 1980 census surveys indicate that 9,068 persons decision and, on this basis, denies the request for a hearing. live beyond the Pikeville town limits in the Pikeville census division, 4. Dacotah Bank Holding Company, 70 FEDERAL RESERVE BULLE- which spans from Pikeville to the border with Floyd County, and TIN 347 (1984); Wyoming Bancorporation, 68 FEDERAL RESERVE through which Route 23 runs. Approximately 44 percent (22,107) of BULLETIN 313 (1982), affd sub nom., Wyoming Bancorporation v. Floyd County residents live in census divisions bordering on Route 23 Board of Governors, 729 F.2d 687 (10th Cir. 1984); Independent Bank between the county border and Prestonsburg or bordering on Pike Corporation, 67 FEDERAL RESERVE BULLETIN 436 (1981). County to the south of Route 23. Two of these divisions, Mare Creek 5. United States v. Philadelphia National Bank, 374 U.S. 321, 357 and Mud Creek, which border Pike County near Route 23, registered (1963); United States v. Phillipsburg National Bank, 399 U.S. 350, population growth in excess of 50 percent in the 1970-80 period. For 364-65 (1970). persons living in and between Pikeville and Prestonsburg, banks in 6. 374 U.S. at 359. either county ofiFer a reasonable alternative for banking services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

242 Federal Reserve Bulletin • April 1985 cate that the location of existing and planned branches practical alternative for a variety of services, including near the county line was intended to help solicit banking services. These facts contradict Applicant's banking business from the other county. Two of the thesis that the two counties are located in separate three banks located in Floyd County have branches banking markets, each of which is sufficiently isolated within 4 miles of the county border along Route 23. In from competitive forces in the other such that resiaddition, one of the Floyd County banks and two of dents of one would not turn to the other nearby the Pike County banks operate branches near the community for banking services. In fact, the evidence southern border of the counties. Moreover, some of indicates that a significant number of Floyd County the Pike County banks target businesses in Floyd residents use Pike County banks as an alternative County for commercial loans. source of banking services. Based on these and all of The Board also has considered the extent to which the other facts of record, the Board concludes that the Pike County banks are providing banking services Floyd and Pike Counties are part of the same relevant to Floyd County residents. Pike County banks gener- geographic market. ate deposits and loans from Floyd County which are Within the relevant banking market, Applicant is the equivalent to 10 percent of the deposits and 12 percent largest of six banking organizations, with total deposof the loans held by Floyd County banks. Applicant its of about $257.6 million, which represents 32.1 itself obtains approximately 4.5 percent of its deposits percent of the total deposits in commercial banks in and 8.0 percent of its loans from Floyd County resi- the market. Bank is the sixth largest banking organizadents.8 Floyd County banks derive 2 percent of their tion in the market, controlling 8.2 percent of the total deposits and 1 to 2 percent of their loans from Pike deposits in commercial banks in the market. As a County. Although these statistics indicate that Floyd result of the proposed acquisition of Bank, Applicant County banks do not obtain as large an amount of their would remain the largest commercial banking organibusiness from Pike County as Pike County banks do zation in the market, and its share of market deposits from Floyd County, these statistics are consistent with would increase from 32.1 percent to 40.3 percent. The the substantial economic activity in Pike County that share of deposits held by the four largest commercial attracts Floyd County residents to Pike County, and banking organizations in the market would increase demonstrate that there is existing competition between from 80.6 percent to 88.8 percent, and the Herfindahlthe banks in the two counties. This evidence also Hirschman Index ("HHI") would increase by 526 indicates that the banks in each county have not points to 2573. Thus, the relevant banking market is regarded the other counties as being so far removed and would remain highly concentrated upon consumfrom their major service areas as to warrant a refusal mation of this proposal, and would be subject to to extend credit to borrowers there.9 challenge under the United States Department of Although neither county's main newspaper has a Justice Merger Guidelines.10 wide circulation in the other county, all of the Pikeville In its evaluation in previous cases of the competitive banks advertise on the Prestonsburg radio station, effects of a proposal, the Board has indicated that which is the only radio station that can reach all of thrift institutions have become, or at least have the Pike County during the day. In addition, one of the potential to become, major competitors of commercial three Floyd County banks advertises in the Pike banks.11 In this case, two thrift institutions compete in County newspaper and local radio station. the relevant banking market. These institutions are the In the Board's judgment, the proximity of Pike and smallest of all the financial institutions in the market Floyd Counties, the ready accessibility to residents of and control deposits of $28.8 million, which represents either county of banking facilities and other services in only 3.4 percent of the total deposits in commercial either county, and the substantial distance to other banks and thrift institutions in the market.12 comparable commercial centers, indicate that both counties offer to residents of the other an available and 10. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), the Department is likely to challenge a merger where the increase in the HHI exceeds 100 points 8. Although a telephone call from most of Floyd County to Pikeville and the HHI substantially exceeds 1800. is considered a long-distance call, Applicant installed a phone number 11. NCNB Bancorporation, 70 FEDERAL RESERVE BULLETIN 225 for Floyd County residents so they could call Pikeville Bank without (1984); General Bancshares Corporation, 69 FEDERAL RESERVE BULincurring a long distance charge. LETIN 802 (1983); First Tennessee National Corporation, 69 FEDERAL 9. Applicant itself has previously indicated that Pikeville Bank's RESERVE BULLETIN 298 (1983). "local community" for purposes of the Community Reinvestment Act 12. There is no evidence in the record that would support the includes Floyd County. Both Prestonsburg banks include a portion of inclusion of 100 percent of the deposits of thrift institutions in the Pike County in their local community under the statute, and the other calculation of market concentration. Even if 100 percent of the Pikeville banks likewise include a portion of Floyd County in their deposits were included, however, Bank's market share would be 31.0 community. Delineation of a bank's "local community" for this percent and would increase to 38.9 percent after consummation of the purpose involves many of the same considerations involved in delin- proposal. The HHI would be 1915 and would increase by 490 points to eating a geographic market. 2405 as a result of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 243 The Board is concerned about the proposed acquisi- Based on the foregoing and other considerations tion of Bank by the largest competitor in the market reflected in the record, it is the Board's judgment that because of the limits on entry imposed by state bank- the proposed acquisition is not in the public interest ing law. Kentucky law prohibits an existing bank and that the application should be, and hereby is, holding company or an individual who owns one bank denied. from chartering a de novo bank and any bank acquired By order of the Board of Governors, effective by such a company or individual must have been in February 4, 1985. existence for five years.13 In addition, Kentucky law prohibits a bank from branching into a city where a Voting for this action: Chairman Volcker and Governors bank is headquartered, such as Prestonsburg.14 Thus, Martin, Wallich, Partee, Rice, Gramley, and Seger. elimination of the competition between Applicant and Bank would result in an adverse effect on competition JAMES MCAFEE that is unlikely to be mitigated by the prospect of [SEAL] Associate Secretary of the Board de novo entry into the market. Based upon the foregoing and all the facts of record, the Board concludes that the effect of consummation Sun Banks, Inc. of this proposal may be substantially to lessen compe- Orlando, Florida tition in the relevant banking market, and that the inclusion of both of the thrift institutions as competi- Order Approving Acquisition of Shares of a Bank tors in the market does not significantly mitigate the anticompetitive effects of the proposal.15 Sun Banks, Inc., Orlando, Florida, a bank holding The financial and managerial resources of Appli- company within the meaning of the Bank Holding cant, its subsidiary and Bank are satisfactory and Company Act (12 U.S.C. §§ 1841 et seq.) ("Act"), consistent with approval. The record of this applica- has applied for the Board's approval under section tion indicates that Applicant would increase Bank's 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire lending limit and expand the types of services offered up to 15 percent of the voting shares of Peoples Bank by Bank, such as financial planning services, IRAs, of Lakeland, Lakeland, Florida ("Bank"). Applicant discount brokerage services, and variable rate mort- currently owns 4.6 percent of the voting shares of gages. Although the affiliation would expand Bank's Bank. services, in the Board's view, these considerations do Notice of the application, affording an opportunity not outweigh the substantially adverse competitive for interested persons to submit comments, has been effects of this proposal because Applicant is already given in accordance with section 3(b) of the Act providing the services in the market. (12 U.S.C. § 1842(b)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. 13. Ky. Rev. Stat. § 287.900(2) (Supp. 1984). 14. Ky. Rev. Stat. § 287.180 (Supp. 1984). § 1842(c)). 15. Applicant also argues that this proposal should be approved The Board has previously indicated that the acquisibecause the Chairman and President of Applicant and their families tion of less than a controlling interest in a bank is not a own 100 percent of Bank's shares. In a previous case involving the formation of a bank holding company over Bank, the Federal Reserve normal acquisition for a bank holding company.1 How- Bank of Cleveland defined Floyd County and Pike County as two ever, the requirement in section 3(a)(3) of the Act that separate banking markets. The Reserve Bank did not undertake an inthe Board's prior approval be obtained before a bank depth study of the market because it determined that Applicant's Chairman and President did not control Applicant within the meaning holding company acquires more than 5 percent of the of the Act. voting shares of a bank suggests that Congress con- Although these officers of Applicant control 100 percent of Bank, together they control less than 5 percent of Applicant. The determina- templated the acquisition by bank holding companies tion that these officers of Applicant do not control Applicant is of between 5 percent and 25 percent of the voting consistent with the definition of control in the Act and the Board's shares of banks. Accordingly, the Board has previousprecedents in this area, which require that an individual or group of individuals control at least 25 percent of each bank's voting shares in ly approved the acquisition by a bank holding compaorder to find that the banks are subject to common control. See, Mid- ny of less than a controlling interest in a bank.2 Nebraska Bancshares, Inc., 64 FEDERAL RESERVE BULLETIN 588 (1978), ajfd, 627 F.2d 266 (D.C. Cir. 1980); Semo Bancshares, Inc., 66 FEDERAL RESERVE BULLETIN 509 (1980); Mahaska Investment Company, 63 FEDERAL RESERVE BULLETIN 579 (1977). In addition, in 1. Midlantic Banks, Inc., 70 FEDERAL RESERVE BULLETIN 776 approving the bank holding company formation, the Reserve Bank (1984); State Street Boston Corporation, 67 FEDERAL RESERVE BULrelied on the officers' statements that they planned only to act in an LETIN 862 (1981). advisory position at Bank. Consummation of this proposal, however, 2. Id. See also Comerica Incorporated, 69 FEDERAL RESERVE would place the shares of Bank under Applicant's control in perpetu- BULLETIN 911 (1983); Lincoln National Company, 63 FEDERAL ity, and thus clearly involves the type of relationship Congress sought RESERVE BULLETIN 405 (1977); and First Piedmont Corporation, 59 to regulate through the Bank Holding Company Act. FEDERAL RESERVE BULLETIN 456 (1973). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

244 Federal Reserve Bulletin • April 1985 Section 3(c) of the Act requires the Board in every (4) provide any advice regarding the management or case under section 3 of the Act to analyze the competi- policies of Bank; or tive, financial, managerial, future prospects, and con- (5) conduct a proxy contest in opposition to Bank's venience and needs considerations. In accordance board of directors. with that section, the Board has considered all of these The Board's inquiry does not end, however, with its factors in its analysis of this application. finding that Sun will not control Bank. The Board Applicant is the second largest commercial banking views such acquisitions with concern and continues to organization in Florida. Its 30 subsidiary banks hold believe that noncontrolling interests in directly comtotal domestic deposits of $7.3 billion, representing peting banks may raise serious questions under the 12.5 percent of all deposits in commercial banks in the Act. The Board has previously noted that one compastate. Bank is the twentieth largest commercial bank- ny need not acquire control of another in order to ing organization in Florida, with 0.5 percent of all substantially lessen competition between them.6 It is deposits in commercial banks in the state.3 Applicant possible, for example, that the acquisition of a suband Bank compete in the West Polk County banking stantial ownership interest in a competitor or potential market.4 Bank is the largest of ten commercial banking competitor of the acquiring firm may alter the market organizations in the market and controls $290.7 million behavior of both firms in such a way as to weaken or in deposits, representing 41.1 percent of total deposits eliminate independence of action between the organiin commercial banks in the market. Applicant controls zations and increase the likelihood of cooperative the fifth largest bank in the market, with $68.9 million operations. in deposits, representing 10.2 percent of total deposits Whether a substantial lessening of competition in commercial banks in the market. would result from a minority investment in a compet- If this proposal involved the acquisition of control of ing bank must be answered in light of the specific facts Bank by Applicant, it appears likely, based on the of each case. In this case, it is the Board's judgment, facts as presented at this time, that consummation of based upon careful analysis of the record, that no the proposal would substantially lessen competition in substantial lessening of competition is likely to result the West Polk County banking market.5 In that event, from the acquisition. The record shows that Bank is the Board would be required to deny the proposal. under the firm and active control of a family, that there Based on the facts of record and Applicant's com- will be no officer or director interlocks between Applimitments, however, the Board has concluded that cant and Bank, and that Applicant intends the acquisi- Applicant would not acquire control or the ability to tion to be strictly a passive investment. Moreover, exercise a controlling influence over Bank upon con- Bank is an institution of substantial asset size and is summation of this proposal. The record shows that the leading institution in the market, controlling four Applicant has applied to acquire no more than 15 times the market deposits of Applicant's subsidiary percent of the shares of Bank and that approximately bank. The Board also views as significant the fact that 54 percent of Bank's voting shares are owned by a six other major bank holding companies compete in family which has controlled Bank for at least 32 years the market. and whose members currently serve as chairman and The financial and managerial resources and future vice chairman of Bank. In addition, Applicant has prospects of Applicant and its subsidiaries and Bank committed that it will not, without prior consent from are satisfactory and consistent with approval of this the Board: application, as are considerations related to the conve- (1) exercise or attempt to exercise a controlling nience and needs of the community to be served. influence over Bank's management or policies; Based on the foregoing and all of the facts of record, (2) take any action causing Bank to become a and particularly in light of Applicant's commitments, subsidiary of Applicant; the Board has determined that this application should (3) seek or accept representation in the management be and hereby is approved.7 The acquisition of shares or on the board of directors of Bank; shall not be consummated before the thirtieth calendar 3. State banking data are as of December 31, 1983. 6. North Platte Corporation, 66 FEDERAL RESERVE BULLETIN 782 4. The West Polk County banking market consists of Lakeland, (1980). Mulberry, and Fort Meade, Florida. West Polk County data are as of 7. This approval does not authorize Applicant to hold more than 15 June 30, 1983. percent of the shares of Bank or to acquire control of Bank. Applicant 5. Acquisition of Bank by Applicant would increase the Herfin- would be required to file an application under section 3 of the Act to dahl-Hirschman Index ("HHI") from 2295 to 3132, an increase of 837 acquire additional shares of Bank, or if circumstances change such points. If 50 percent of the deposits in thrift institutions in the market that Sun would have control over Bank. In reviewing such an are included, the HHI would rise from 1541 to 2015, an increase of 474 application, the Board would examine the competitive effects of the points. If 100 percent of thrift deposits are included, the HHI would proposed action as well as the other factors set forth in section 3(c) of rise from 1453 to 1758, an increase of 305 points. Under either the Act in light of the circumstances existing at the time. The Board's assumption, the proposal would be likely to be challenged under the approval of this application should not be interpreted to mean that the Department of Justice Merger Guidelines. Board necessarily would approve any such future application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 245 day following the effective date of this Order, or later commercial banks in the state. Upon consummation of than three months after the effective date of this this proposal, Applicant would control total deposits Order, unless that period is extended for good cause of $65.1 million, representing approximately 0.3 perby the Board, or by the Federal Reserve Bank of cent of the total deposits in commercial banks in the Atlanta pursuant to delegated authority. state.3 In the Board's view, consummation of this By order of the Board of Governors, effective proposal would have no significant effect on the con- February 1, 1985. centration of banking resources in Iowa. Bank operates in the Wright County and Hancock Voting for this action: Chairman Volcker and Governors banking markets.4 In the Wright County banking mar- Martin, Wallich, Partee, Rice, Gramley, and Seger. ket, Bank is the smallest of eight banking organizations, controlling 3.7 percent of the total deposits in JAMES MCAFEE commercial banks in the market. In the Hancock [SEAL] Associate Secretary of the Board banking market, Bank is the sixth largest of seven banking organizations, controlling 6.1 percent of the total deposits in commercial banks in the market. United Iowa Bancshares, Inc. Applicant does not operate in either of these banking Mason City, Iowa markets. Accordingly, consummation of this proposal would have no significant adverse effect upon existing Order Approving Acquisition of Bank competition. The financial and managerial resources and future United Iowa Bancshares, Inc., Mason City, Iowa, a prospects of Applicant and Newton Bank are satisfacbank holding company within the meaning of the Bank tory. As a result of this proposal, Bank's financial and Holding Company Act ("Act") (12 U.S.C. § 1841 managerial resources will be improved, particularly in et seq.), has applied for the Board's approval pursuant light of Applicant's commitments to inject additional to section 3(a)(3) of the Act (12 U.S.C. § 1842 (a)(3)), capital into Bank. Accordingly, banking factors lend to acquire at least 80 percent of the voting common weight for approval. Although Applicant has proposed shares and to retain 99.6 percent of the cumula- no new services for Bank, there is no evidence in the tive convertible preferred stock (the "preferred record to indicate that the banking needs of the stock") of North Iowa State Bank, Belmond, Iowa community are not being met. Accordingly, consider- ("Bank").1 ations relating to the convenience and needs of the Notice of the application, affording opportunity for community to be served are consistent with approval interested persons to submit comments, has been of the application. given in accordance with section 3(b) of the Act. The Accordingly, the Board has determined that contime for filing comments has expired, and the Board summation of the transaction would be consistent with has considered the application and all comments re- the public interest and that the application should be ceived in light of the factors set forth in section 3(c) of approved. On the basis of the record and for the the Act (12 U.S.C. § 1842(c)). reasons summarized above, the application is hereby Applicant controls one bank, First Newton National approved. The acquisition of Bank's common stock Bank, Newton, Iowa ("Newton Bank"), with total shall not be consummated before the thirtieth calendar deposits of $45.2 million, representing 0.2 percent of day following the effective date of this Order, or later the total deposits in commercial banks in Iowa.2 Bank than three months after the effective date of this is one of the smaller commercial banking organizations Order, unless such period is extended for good cause in Iowa, with total deposits of $19.9 million, represent- by the Board or by the Federal Reserve Bank of ing less than 0.1 percent of the total deposits in Chicago, acting pursuant to delegated authority. 1. The preferred stock represents approximately 46 percent of Bank's total equity and is convertible into approximately 64 percent of 3. The Board notes that Applicant and Bank are now commonly Bank's voting common shares three years from the date of its controlled through certain of their principals. Bank's Chairman of the issuance. Under these circumstances, the Board believes that the Board, Mr. Robert H. Isensee, together with his son-in-law, Mr. Gary purchase of these securities required the Board's prior approval under Kahn, controls approximately 63 percent of Bank's voting shares. section 3 of the Act. After carefully reviewing the record in this case, These two individuals and Mr. Isensee's sister together control however, the Board believes that Applicant's purchase of the pre- approximately 53 percent of Applicant. ferred stock was not a deliberate attempt to circumvent the purposes 4. The Wright County banking market is approximated by Wright or requirements of the Act and does not preclude Board approval of County, Iowa. The Hancock banking market is approximated by all of this application. Hancock County, Iowa, and Forest Township in Winnebago County, 2. Banking data are as of December 31, 1983. Iowa. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

246 Federal Reserve Bulletin • April 1985 By order of the Board of Governors, effective (49 Federal Register 47,933). The time for filing com- February 15, 1985. ments has expired, and the Board has considered the applications and all comments received in light of the Voting for this action: Chairman Volcker and Governors factors set forth in section 3(c) of the Act (12 U.S.C. Martin, Wallich, Partee, Rice, and Gramley. Absent and not § 1842(c)) and the considerations specified in section voting: Governor Seger. 4(c)(8) of the Act. JAMES MCAFEE The Board has indicated on previous occasions that [SEAL] Associate Secretary to the Board a bank holding company should be a source of financial and managerial strength to its subsidiaries, and that the Board will closely examine the condition of an Security Banks of Montana applicant in each case with these considerations in Billings, Montana mind.2 The Board also has indicated and continues to believe that capital adequacy is an especially impor- Order Denying Acquisition of Banks and Bank tant factor in the analysis of bank holding company Holding Companies proposals, particularly in transactions where a significant acquisition is proposed, and that it will consider Security Banks of Montana, Billings, Montana, a the implications of a significant level of intangible bank holding company within the meaning of the assets arising from a proposed expansion.3 In the Bank Holding Company Act ("Act"), has applied for International Lending Supervisory Act of 1983, Conthe Board's approval under section 3 of the Act gress recognized the importance of capital adequacy to (12 U.S.C. § 1842) to acquire Montana Bancsystem the banking system and authorized the federal banking Inc., Billings, Montana ("MBI"), and thereby indi- agencies to establish minimum levels of capital for rectly acquire its 13 subsidiary banks.1 In connection banking institutions and to take other measures to with this application, Applicant also has applied to ensure that banks achieve and maintain adequate acquire 6.2 percent of Bank of Montana System, Great capital.4 The Board has repeatedly expressed its views Falls, Montana. regarding the need for bank holding companies to have sufficient primary capital, particularly tangible pri- Applicant also has applied for the Board's approval mary capital, and has stated that significant decreases under section 4(c)(8) of the Act (12 U.S.C. § in an institution's capital position would be grounds 1843(c)(8)) and section 225.23(a)(2) of the Board's for denial of a proposal.5 Regulation Y (12 C.F.R. § 225.23(a)(2)), to acquire MBI's data processing interests that are conducted Applicant is a well managed company and its banks directly from the holding company. This activity has are in satisfactory condition. Applicant's primary and been determined by the Board to be closely related to total capital are above those levels set by the Board's banking and permissible for bank holding companies. current6 and proposed Capital Adequacy Guidelines.7 (12 C.F.R. § 225.23(b)(7)). Applicant also has applied, The Board is seriously concerned, however, with the under section 4(c)(8) of the Act (12 U.S.C. § effect of the proposal on Applicant's resources, partic- 1843(c)(8)) to engage indirectly through MBI in the ularly the substantial reduction of Applicant's capital activities of a general insurance agency in towns with and Applicant's increased reliance on debt. populations not exceeding 5,000. The proposed transaction represents a substantial Notice of the applications, affording opportunity for acquisition for Applicant that would double its size in interested persons to submit comments, has been terms of total assets. Applicant proposes to acquire all given in accordance with sections 3 and 4 of the Act of the outstanding shares of MBI for approximately 1. The banks to be acquired are as follows: Montana Bank of 2. Emerson First National Company, 67 FEDERAL RESERVE BUL- Billings, Billings; Montana Bank of Circle, N.A., Circle; Montana LETIN 344 (1981). 12 C.F.R.§ 225.4(a)(1). Bank of Livingston, Livingston; First National Montana Bank of 3. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743 Missoula, Missoula; Montana Bank of South Missoula, Missoula; (1984). Banks of Mid America, Inc., 70 FEDERAL RESERVE BULLETIN, Montana Bank of Forsyth, Forsyth; Baker Bancorporation, Inc., 460 (1984). Manufacturers Hanover Corporation, 70 FEDERAL RE- Baker (Montana Bank of Baker, N.A., Baker); Bozeman Bancorpora- SERVE BULLETIN 452, 453 (1984). tion, Inc., Bozeman (Montana Bank of Bozeman, N.A. Bozeman); 4. 12 U.S.C. § 3907(a) (West Supp. 1984). Butte Bancorporation, Inc., Butte (Montana Bank of Butte, N.A., 5. Eagle Bancorporation, 70 FEDERAL RESERVE BULLETIN 728 Butte); Mineral County Bancorporation, Inc., Superior (Montana (1984); National City Corporation,70 FEDERAL RESERVE BULLETIN at Bank of Mineral County, Superior); Red Lodge Bancorporation, Inc., 746. Red Lodge (Montana Bank of Red Lodge, N.A., Red Lodge); 6. Capital Adequacy Guidelines (12 C.F.R. § Part 225 Appendix Roundup Bancorporation, Inc., Roundup (Montana Bank of Round- A). up, N.A., Roundup); and Sidney Holding Company, Sidney (Montana 7. Proposed Minimum Capital Guidelines for Bank Holding Com- Bank of Sidney, N.A., Sidney); all located in Montana. panies, 49 Federal Register 30,317 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 247 $36.4 million, which represents a substantial premium Act and could not be viewed as a source of strength to for MBI shares. The acquisition would be funded by a its subsidiary banks after consummation of the proposcomplex transaction involving the issuance of new al. On the basis of the above considerations, the Board equity worth $13 million, mandatory convertible secu- concludes that consummation of the proposal would rities worth $10 million, the sale of $10.5 million in so adversely affect Applicant's financial condition as assets, dividends from Applicant's subsidiary banks of to lend significant weight toward denial of the applicaapproximately $1.4 million, and $1.3 million of debt. tion. As a result of this proposal, Applicant's tangible With respect to the convenience and needs of the primary capital would decline in excess of 220 basis communities to be served, Applicant states that conpoints, to a level below that specified in the Board's summation of this proposal would expand Applicant's proposed Capital Adequacy Guidelines. The Board commercial lending capability and would give MBI views this decrease in tangible primary capital alone as access to an expanded ATM network. In the Board's a significant factor that reflects adversely on this view, these convenience and needs considerations are proposal. not sufficient to outweigh the adverse financial effects In addition to the decline in Applicant's tangible of this proposal. In light of the Board's adverse primary capital, Applicant's debt servicing ability also findings regarding Applicant's financial resources, the would be strained, relying in part on purchases by Board finds it unnecessary to decide if consummation Applicant's ESOP of Applicant's common stock, on of the proposal would result in a substantial eliminamanagerial fees and on the substantial retention of tion of competition in any relevant market. earnings by Applicant. Currently, Applicant's debt-to- Based on the foregoing and other considerations equity ratio is consistent with that of its peer group. reflected in the record, it is the Board's judgment that Although Applicant will not incur a large amount of the proposed acquisition is not in the public interest new borrowing as such to finance this transaction, and that the applications should be and hereby are Applicant would be assuming a significant amount of denied. debt held by MBI. In considering the level of Appli- By order of the Board of Governors, effective cant's debt, the Board notes that a significant amount February 22, 1985. of mandatory convertible securities would be issued to MBI shareholders. Under adverse circumstances, Ap- Voting for this action: Chairman Volcker and Governors plicant has a strong disincentive to convert these Martin, Wallich, Partee, Rice, and Gramley. Governor Wallich abstained from the insurance portion of this action. securities to common stock because such conversion Absent and not voting: Governor Seger. could significantly diminish the ability of existing management to control Applicant. Moreover, the new shareholders could influence the payment of dividends JAMES MCAFEE on their converted securities; thus conversion might [SEAL] Associate Secretary of the Board not reduce the demands on Applicant's cash flow. If the mandatory convertible securities were deemed to be debt for the purpose of analysis, Applicant's debt- Orders Issued Under Section 4 of Bank Holding to-equity ratio would increase from 39 percent to 69 Company Act percent, a level significantly above that which is normally acceptable for bank holding companies. Citicorp Applicant argues that its cash flow projections indi- New York, New York cate that it can service the debt. The Board believes that Applicant's projections are overly optimistic be- Statement by Board of Governors of the Federal cause, although the projections are lower than the Reserve System Regarding the Application of combined companies' historical performance, they are Citicorp to engage in certain life insurance activities based on a return on assets that is significantly higher under section 4(c)(13) of the Bank Holding Company than the performance of the combined companies over Act the past two years. Also, Applicant places a heavy reliance on ESOP stock purchases and management By letter dated November 19, 1984, the Board apfees. In the Board's judgment, the cumulative effect of proved the application of Citicorp under section these and the other considerations with respect to the 4(c)(13) of the Bank Holding Company Act (12 U.S.C. financial resources of Applicant indicate that Appli- § 1843(c)(13)) and section 211.5(d) of the Board's cant would not be as capable of maintaining an ade- Regulation K to continue to hold shares of Assurantiequate level of capital as required by sound banking maatschappij Financia N.V., Antwerp, Belgium ("Fipractice and the International Lending Supervisory nance") after Finance (1) expands its credit-related Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

248 Federal Reserve Bulletin • April 1985 insurance underwriting activities to include underwrit- generally viewed as a financially-related activity.1 The ing certain credit-related insurance in Belgium and insurance is directly linked to an extension of credit, Luxembourg without regard to whether such insur- the purpose of the insurance is to assure repayment of ance is related to extensions of credit by the Citicorp the credit, and the beneficiary is the lender. organization; (2) underwrites savings completion in- Savings completion insurance has similar charactersurance in Belgium and Luxembourg; and (3) contin- istics in that it is offered in connection with a savings ues to underwrite in Belgium home loan life insurance plan and would permit the customer to obtain a and endowment life insurance related to the mortgage predetermined line of credit upon completion of the lending activities of Finance and its affiliates. In this plan. The insurance aspect of the proposal would statement, the Board sets forth its reasons for approv- require Finance to pay an amount equal to the differing this application. ence between the maturity value of the deposit plan In reviewing proposals by U.S. banking organiza- and the balance in the account at the time of the tions to engage in activities overseas, the Board has depositor's death or incapacity. Therefore, it appears recognized that in other banking and financial sys- that savings completion insurance may also be considtems, local institutions are often permitted to engage in ered a financially-related activity. activities that would not be permissible for United Citicorp provides evidence in its application that, States banking organizations under applicable United except for savings completion insurance, a substantial States laws and regulations. In the Edge Act and the number of Belgian banking institutions engage in the Bank Holding Company Act, the Board has been proposed insurance underwriting activities either digranted authority to permit activities abroad that are rectly or through affiliated companies. For example, generally not authorized in the United States for bank five Belgian savings banks, including the two largest, holding companies. In the exercise of that authority, underwrite general life insurance and property and the Board has adhered to the policy that the foreign casualty insurance themselves or are affiliated with activities that it authorizes should be of a banking or insurance companies that do. One of these savings financial, as opposed to commercial, nature, or that banks offers a savings product similar to that proposed such activities should be usual in connection with for Finance. Further, Belgium's second largest combanking or other financial operations abroad. The mercial bank, indirectly, through a savings bank sub- Board may also consider whether conduct of the sidiary, holds 99.9 percent of the shares of an insuractivity will enable the U.S. banking organization to ance company that is licensed to underwrite general compete effectively with foreign organizations. In ad- life insurance and property and casualty insurance. dition, the Board takes into account whether the Citicorp has also stated that Luxembourg has had an performance of the activity by a United States banking economic union with Belgium since the late 1940s, organization overseas is consistent with the prudent and, as a result, Finance may extend its insurance conduct and management of the company's banking activities to Luxembourg. and nonbanking operations, and the effect of the Citicorp has also applied to continue to underwrite, activity on the capital and managerial resources of the indirectly through Finance, home loan life insurance U.S. banking organization. and endowment life insurance, which Finance has The list of permissible activities in Regulation K offered since before its acquisition by Citicorp in 1970. includes the underwriting of credit life insurance and Home loan life insurance guarantees to the mortgagee credit accident and health insurance that is related to payment of the principal amount of the loan outstandextensions of credit by the investor or its affiliates ing at the time of the borrower's death, which amount (12 C.F.R. § 211.5(d)(5)). The activities of underwrit- declines as the loan is repaid. Endowment life insuring home loan life insurance, endowment life insur- ance, also underwritten in connection with mortgage ance, savings completion insurance, and credit insur- loans, guarantees payment of a fixed sum on the ance with respect to credit by unaffiliated lenders are policyholder's survival to a maturity date or on the permissible only with the Board's specific consent. policyholder's death if it is prior to that date.2 The Citicorp seeks to expand the credit-related insurance underwriting activities of Finance in Belgium and Luxembourg to include the underwriting of credit life 1. Citibank Overseas Investment Corporation, 67 FEDERAL RE- SERVE BULLETIN 366 (1981). insurance, credit accident and health insurance, and 2. These activities were not specifically approved by the Board for savings completion insurance, without regard to Finance at the time of its acquisition by Citicorp. The Board had whether such insurance is related to extensions of approved certain credit-related insurance underwriting activities at that time for Finance. The management of Finance appears to have credit by, or savings plans offered by the Citicorp assumed that the proposed insurance products fell within the scope of organization. With respect to credit-related insurance, credit life insurance products permissible for Finance. Upon discovthe Board has previously stated that in the United ery of the discrepancy, Citicorp brought the matter to the Board's attention and filed an application for the Board's consent to retain the States, the underwriting of credit-related insurance is activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 249 Board has determined that these underwriting activi- Comptroller of the Currency. Applicant proposes that ties are financially-related because they are offered in Banks accept time and savings deposits and money connection with mortgage loans. market deposit accounts and make consumer and In assessing the risk to Citicorp in engaging in the commercial loans. Banks will not accept demand proposed activities, the Board noted that U.S. banking deposits as that term is defined in section organizations, including Citicorp, have extensive 225.2(a)(1)(A) of the Board's Regulation Y (12 C.F.R. experience in managing the risks associated with un- § 225.2(a)(1)(A)). Applicant also proposes that Banks derwriting credit-related insurance. The Board also act as agent for the sale of credit life and credit relied on the facts that Finance is a relatively small accident and health insurance. The proposed activities company that appears to be adequately capitalized, have been previously determined by the Board to be that Citicorp has indicated, and the record reflects, closely related to banking. 12 C.F.R. § 225.25(b)(1) that Finance will require no additional capital invest- and (8); Irving Bank Corporation, 71 FEDERAL REment over the next three years and that its projected SERVE BULLETIN 173 (1985); U.S. Trust Corporation, growth is moderate. In addition, any further invest- 70 FEDERAL RESERVE BULLETIN 371 (1984). ments in Finance will require the consent of the Board. Notice of these applications, affording opportunity Based on these and other considerations reflected in for interested persons to submit comments, has been the record, the Board concluded that the conduct of duly published (49 Federal Register 28,767 (1984)). the proposed insurance activities in the circumstances The time for filing comments has expired and the of this case would not be inconsistent with the supervi- Board has considered the applications and all comsory and other purposes of the Bank Holding Compa- ments received, including those of the Superintendent ny Act. Accordingly, the application was approved of Banks for the State of Ohio, in light of the factors subject to the conditions described above. set forth in section 4(c)(8) of the Act. Board of Governors of the Federal Reserve System, Applicant, with total consolidated assets of $87.5 December 4, 1984. billion,1 is the third largest bank holding company in the United States. Applicant operates three commer- Voting for this action: Chairman Volcker and Governors cial banks and also engages in various nonbanking Martin, Wallich, Partee, Rice, Gramley, and Seger. activities through a number of subsidiaries. Applicant asserts that because Banks will not accept WILLIAM W. WILES demand deposits as that term is defined in the Board's [SEAL] Secretary of the Board Regulation Y, they will not be "banks" as defined in the BHC Act,2 and, accordingly, that Board approval of the applications is not barred by the interstate The Chase Manhattan Corporation banking limitations of the Douglas Amendment to the New York, New York BHC Act (12 U.S.C. § 1842(d)). In its Irving decision, the Board was constrained to Order Conditionally Approving the Acquisition of conclude that a national bank that would engage in Institutions Engaged in Deposit Taking and consumer and commercial lending, but would not Commercial Lending accept demand deposits as defined in Regulation Y, would not be a "bank" as that term is defined in the The Chase Manhattan Corporation, New York, New BHC Act and thus may be acquired by a bank holding York, a bank holding company within the meaning of company located in another state.3 The Board, howevthe Bank Holding Company Act ("Act" or "BHC er, imposed certain conditions, as it had in U.S. Trust, Act") (12 U.S.C. § 1841 et seq.), has applied for approval under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(1) of the Board's Regulation Y (12 C.F.R. § 225.23(a)(1)) to acquire The 1. As of September 30, 1984. Chase Manhattan National Bank of Arizona, Phoenix, 2. The BHC Act defines the term "bank" to include any institution, Arizona; The Chase Manhattan National Bank of chartered under the laws of the United States or any state, that California, Newport Beach, California; The Chase accepts deposits that the depositor has a legal right to withdraw on demand and engages in the business of making commercial loans. Manhattan National Bank of Illinois, Chicago, Illinois; 12 U.S.C. § 1841(c). An institution that is chartered as a bank, but The Chase Manhattan National Bank of Minnesota, that does not perform one of the two essential functions required for Bloomington, Minnesota; and the Chase Manhattan "bank" status under the BHC Act, has been referred to as a "nonbank bank." National Bank of Ohio, Cleveland, Ohio (collectively 3. Similarly, in U.S. Trust, 70 FEDERAL RESERVE BULLETIN at 372, referred to as "Banks"). the Board stated that the technical definition of "bank" in the Act forced it to conclude that a bank holding company could acquire, on Each of the institutions is a national bank, for which an interstate basis, a national bank that would accept demand deposits preliminary charter approval has been granted by the but not make commercial loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

250 Federal Reserve Bulletin • April 1985 to ensure that Banks are not used by Applicant as a tor interlocks between nonbank banks and their affilivehicle for evasion of the provisions of the Act regard- ates. ing interstate banking: The applications indicate that Banks will not be 1. Applicant will not operate the commercial lending located immediately proximate to an office of any of activities of the nonbank bank in tandem with any these affiliates. The above conditions would prohibit other subsidiary or other financial institution.4 Banks from operating in tandem by referring custom- 2. Applicant will not link in any way the demand ers to other affiliates. deposit and commercial lending services that define Pending the Board's decision, Applicant has indicata bank under the Act. ed that, as suggested in the Board's request for public 3. The nonbank bank will not engage in any transac- comment, a majority of the members of each Bank's tions with affiliates, other than the payment of board of directors will consist of individuals who are dividends to Applicant or the infusion of capital by not officers, directors, or employees of any affiliate Applicant into the nonbank bank, without the and that no officer of any Bank will simultaneously Board's approval. serve as an officer, director, or employee of any These conditions preclude the type of linked or affiliate that accepts demand deposits. integrated operation that would otherwise render these entities "banks" for purposes of the Act. Applicant Protestant has stated that it will comply with each of these conditions. On the basis of Applicant's adherence to The Superintendent of Banks for the State of Ohio has these conditions and for the reasons set forth in Irving, commented in opposition to proposed nonbank banks the Board concludes that Banks will not be "banks" in Ohio. The Superintendent states that the statute within the BHC Act's definition.5 laws of Ohio specifically prohibit foreign banks from Applicant and a number of other bank holding conducting banking activities in Ohio, except for lendcompanies have made requests pursuant to the third ing money and licensed trust activities, and that the condition noted above for Board approval to engage in operation of nonbank banks by out-of-state bank holdcertain transactions with affiliates, including the provi- ing companies violates the intent of Ohio law and the sion of certain internal administrative support services Douglas Amendment. The Superintendent also argues to their nonbank bank subsidiaries, and to establish that the balance of public interest factors that the certain officer and director interlocks with such sub- Board is required to weigh in considering applications sidiaries. The Board on January 11, 1985, requested under section 4(c)(8) of the Act is unfavorable because public comment on whether it should grant these it will result in a tendency toward undue concentration requests. (50 Federal Register 2057 (1985)). Applicant of resources and unfair competition. will not provide such services to Banks unless those The Board considered the identical arguments by services are authorized following the public comment the Ohio Superintendent in Irving. For the reasons period. Applicant has also indicated that it will comply stated in that Order, the Board is unable to conclude with the Board's decision regarding officer and direc- that the Superintendent's arguments provide a basis for denial of Applicant's proposal to acquire a nonbank bank in Ohio. The Board has examined the statute laws of Arizona, California, Illinois, and Minnesota in addition to the laws of Ohio, and has concluded that the statute 4. In U.S. Trust, the nonbank bank proposed to avoid "bank" laws of these states currently contain no provision status under the Act by not making commercial loans. Accordingly, prohibiting the acquisition of nonbank banks by outthe first condition in the U.S. Trust decision referenced the demand of-state bank holding companies. deposit taking activities of the nonbank bank proposed in that case. However, the Applicants in Irving and in this case have sought to avoid "bank" status under the Act by not accepting demand deposits. Need for Congressional Action Accordingly, in Irving the Board modified the first U.S. Trust condition to reflect the different nature of the proposed nonbank banks' activities. The Board has previously indicated its reluctance to 5. Applicant operates consumer finance subsidiaries in Arizona, approve nonbank bank acquisitions in view of the California, and Minnesota. Chase's proposed Arizona, California, and Minnesota nonbank banks will occupy offices currently leased by potential presented by such acquisitions to alter signif- Applicant's consumer finance subsidiaries. Upon approval of these icantly the nation's banking structure without Conapplications, these subsidiaries will cease active operations. Applicant gressional action on the underlying policy issues.6 For also operates commercial finance subsidiaries in the same cities as its proposed Illinois and Ohio nonbank banks. Furthermore, Applicant operates Edge Act subsidiaries of its lead bank, Chase Manhattan Bank, N.A., in California and Illinois and these subsidiaries are 6. See, e.g., U.S. Trust, supra; Suburban Bancorporation, 71 authorized to accept certain demand deposits. FEDERAL RESERVE BULLETIN 51 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 251 the reasons stated in the Board's previous orders, the the Board's approval would be required for additional Board continues to believe that Congressional action acquisitions by Applicant of nonbank banks or for the to close the nonbank bank loophole is imperative. The establishment of offices by any of Banks outside of the fact that the Board is required by the technical aspects states where they are now located. of the bank definition in the Act to approve these and By order of the Board of Governors, effective similar applications should not be construed as en- February 4, 1985. couragement to Applicant to consummate these proposals or to others to pursue similar acquisitions. In Voting for this action: Chairman Volcker and Governors this regard, the Board notes that on October 4, 1984, Martin, Partee, Gramley, Seger, and, except for the application to acquire The Chase Manhattan National Bank of Ohio, the Chairman of the two Congressional banking com- Governor Wallich. Voting against this action: Governor Rice mittees announced that they intended to address the and, with respect to The Chase Manhattan National Bank of nonbank bank issue in this session of Congress, and Ohio, Governor Wallich. Governor Wallich abstains from the that any legislation that was enacted would provide insurance portion of this action.8 that nonbank banks acquired after July 1, 1983, would be required to be divested. Accordingly, in the event JAMES MCAFEE legislation implementing this position is enacted, Ap- [SEAL] Associate Secretary of the Board plicant would be required to divest Banks and could suffer financial loss as a result. The Board finds no evidence that consummation of J. P. Morgan & Co. Incorporated the proposed acquisitions, subject to the limitations New York, New York and conditions described above, would result in undue concentration of resources, unfair competition, con- Order Approving Application to Execute and Clear flicts of interest, unsound banking practices, or other Futures Contracts on Stock Index Futures adverse effects. Based upon the foregoing and all the facts of record, J. P. Morgan & Co. Incorporated, New York, New the Board has determined that the balance of public York, a bank holding company within the meaning of interest factors it is required to consider under section the Bank Holding Company Act, 12 U.S.C. § 1841 4(c)(8) is favorable. Accordingly, the applications are et seq. ("BHC Act"), has applied pursuant to section hereby approved. If these proposals are consummat- 4(c)(8) of the BHC Act and section 225.21(a) of the ed, they shall be subject to the conditions set forth in Board's Regulation Y, 12 C.F.R. § 225.21(a), to enthis Order with respect to avoiding operation of an gage de novo through its wholly owned subsidiary, integrated institution and the conditions set forth in the Morgan Futures Corporation, New York, New York Board's Regulation Y, including those in sections ("Morgan Futures"), in executing and clearing, on 225.4(d) and 225.23(b). major commodity exchanges, futures contracts on In addition, Banks may not engage directly or stock indexes and options on such futures contracts. indirectly in any activity other than those explicitly Morgan Futures proposes to execute and clear: approved by the Board in this Order. Any expansion (1) The Standard & Poor's 100 Stock Price Index of Banks' activities beyond those approved in this futures contract; Order would require the Board's prior approval as (2) The Standard & Poor's 500 Stock Price Index provided in section 4 of the Act and the Board's futures contract ("S&P 500"); and Regulation Y.7 (3) options on the S&P 500, all of which are traded The Board's approval is also subject to the Board's on the Index and Option Division of the Chicago authority to require modification or termination of the Mercantile Exchange; activities of the holding company or any of its subsid- (4) The Major Market Index futures contract, curiaries as the Board finds necessary to assure compli- rently traded on the Chicago Board of Trade; and ance with the provisions and purposes of the Act and the Board's regulations and orders issued thereunder, or to prevent evasion thereof. In accordance with the provisions of section 225.23(b)(l)(iii) of Regulation Y, 8. Governor Rice dissents for the reasons stated in his dissents to the Board's previous Orders approving applications to acquire socalled nonbank banks. See, e.g., Irving Bank Corporation, 71 FEDER- AL RESERVE BULLETIN 173 (1985); Bankers Trust New York Corporation, 71 FEDERAL RESERVE BULLETIN 51 (1985). Governor Wallich dissents from the Board's action with respect to 7. In this regard, the Board notes that because Banks are not The Chase Manhattan National Bank of Ohio for the reasons exconsidered banks under the BHC Act, the provisions of section pressed in his partial dissent, with respect to Irving Trust Ohio, N.A., 225.22(d)(1) of Regulation Y would not be applicable to exempt the to the Board's approval of several nonbank bank applications in Irving acquisition or activities of Banks. Bank Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

252 Federal Reserve Bulletin • April 1985 (5) The FT-SE 100 Equity Index futures contract, The proposed FCM activities are functionally and currently traded on the London International Fi- operationally similar to the FCM activities previously nance Futures Exchange. Applicant proposes to approved by the Board. Like municipal bond index offer the services to financial institutions, pension futures, the futures contracts that are the subject of and endowment funds, mutual funds, insurance this proposal are settled in cash and are designed to companies, and other sophisticated customers in the allow customers to hedge the market risk associated United States and abroad through its offices in New with holding financial assets, in this instance, corpo- York, Chicago, London, and Singapore. rate equity securities.4 The execution and clearance of Notice of the application, affording interested per- stock index futures and options traded on major comsons an opportunity to submit comments on the rela- modity exchanges also appears to be functionally and tion of the proposed activity to banking and on the operationally similar to securities brokerage, permitbalance of the public interest factors regarding the ted for banks under 12 U.S.C. § 24 and authorized for application, has been duly published, 49 Federal Reg- bank holding companies under section 225.25(b)(15) of ister 50,308 (1984). The time for filing comments has Regulation Y, 12 C.F.R. § 225.25(b)(15).5 expired and the Board has considered the application Another factor that lends weight toward approval of and all comments received1 in light of the public the application is the fact that national banks have interest factors set forth in section 4(c)(8) of the BHC been permitted to execute and clear stock index fu- Act. tures, and options thereon, for the account of custom- Applicant, with consolidated assets of $62.2 billion,2 ers through their FCM operations subsidiaries.6 In is the fifth largest banking organization in New York, addition, trust departments of banks have begun to controlling 8.4 percent of the total deposits in commer- utilize stock index futures contracts and options on cial banks in the state. Applicant operates two subsid- such contracts to hedge the market risk facing diversiiary banks and engages, directly and through certain of fied stock portfolios. its subsidiaries, in a broad range of permissible non- Applicant's prior experience in the financial futures banking activities throughout the United States. Mor- and options markets also indicates that Morgan Fugan Futures is a futures commission merchant tures would have the expertise to provide the pro- ("FCM") registered with the Commodity Futures posed services. Thus, for all of the foregoing reasons, Trading Commission ("CFTC") that engages in fu- the Board concludes that, in the manner proposed, and tures and options activities permissible for bank hold- subject to the conditions set forth in section ing companies under section 225.25(b)(18) of the 225.25(b)(18) of Regulation Y, Applicant's proposal to Board's Regulation Y, 12 C.F.R. § 225.25(b)(18). The execute and clear futures contracts and options on capitalization of Morgan Futures is considered ade- futures contracts based on stock indexes is closely quate to permit it to engage in the proposed nonbank- related to banking. ing activities. In order to approve this application, the Board is The FCM activities previously authorized by the also required to determine that the performance of the Board in Regulation Y are the execution and clearance proposed activities by Applicant "can reasonably be of certain financial futures and options on futures for expected to produce benefits to the public . . . that bullion, foreign exchange, U.S. government securities outweigh possible adverse effects. . . ." (12 U.S.C. and money market instruments. The Board permitted these activities on the basis that banks may hold and deal in the underlying cash items. In addition, the Board, by order, recently approved the application of Bankers Trust New York Corporation to execute and 4. The equities represented by the indexes are chosen on the basis of criteria that favor a combination of securities that will accurately clear a futures contract based on a municipal bond reflect fluctuations in the stock market. Applicant has stated that the index.3 offering of futures contracts and options on futures contracts based on indexes of securities would provide FCM customers a useful tool for hedging the market risk associated with a stock portfolio. 5. The Board's action in permitting bank holding companies to provide securities brokerage services was confirmed by the United States Supreme Court. Securities Industry Ass'n. v. Board of Gover- 1. Among the comments in favor of the proposal were those nors, 104 S.Ct. 3003 (June 28, 1984). submitted by Bank of Boston, Boston, Massachusetts, Chapman and 6. The staff of the Office of the Comptroller of the Currency has Cutler, Chicago, Illinois, and BankAmerica Corporation, San Francis- expressed its opinion that national banks may execute customer co, California. The First National Bank, Worland, Wyoming, and transactions in futures contracts and options on futures contracts with First National Bank and Trust Company, Ardmore, Oklahoma, sub- respect to stock indexes. Letter from Michael Patriarca, Office of the mitted comments in opposition to the proposal. Comptroller of the Currency, to W. Robert Felker, First Chicago 2. As of September 30, 1984. Futures, Inc. (January 26, 1984); Letter from Michael A. Mancusi, 3. Bankers Trust New York Corporation, 71 FEDERAL RESERVE Office of the Comptroller of the Currency, to William G. Foster, Jr., BULLETIN 111 (1985). Sovran Futures Corporation (July 30, 1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 253 § 1843(c)(8)). Consummation of Applicant's proposal Maryland National Corporation would provide added services in that Morgan Futures Baltimore, Maryland may offer customers with large stock portfolios a tool to hedge their exposure. In addition, the Board expects that the de novo entry of Applicant into the Order Conditionally Approving the Acquisition of an market for these services would increase the level of Institution Offering Demand Deposits and Consumer competition among providers of these services. Ac- Loans cordingly, the Board concludes that the performance of the proposed activities by Applicant can reasonably be expected to produce benefits to the public. Maryland National Corporation, Baltimore, Mary- The Board also has considered the potential for land, a bank holding company within the meaning of adverse effects that may be associated with this pro- the Bank Holding Company Act (12 U.S.C. § 1841 posal. It does not appear that the proposed FCM et seq.) ("BHC Act"), has applied for approval under activities would entail risks or conflicts of interests section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and different than those considered and addressed by the section 225.23(a)(1) of the Board's Regulation Y Board in its approvals of other FCM activities.7 In (12 C.F.R. § 225.23(a)(1)) to acquire Maryland Naaddition, the Board has taken into account and has tional Bank/D.C., Washington, D.C. ("Bank"), a relied on the regulatory framework established pursude novo bank that will accept deposits, including ant to law by the CFTC for the trading of futures, as demand deposits and NOW accounts, and make conwell as the conditions set forth in section 225.25(b)(18) sumer loans. Bank will not engage in the business of of Regulation Y with respect to executing and clearing making commercial loans as that term is defined in the futures contracts. Board's Regulation Y. 12 C.F.R. § 225.2(a)(1)(B). The Based upon a consideration of all the relevant facts, proposed activities have been previously determined the Board concludes that the balance of the public by the Board to be closely related to banking. interest factors that the Board is required to consider (12 C.F.R. § 225.25(b)(1); U.S. Trust Corporation, 70 under section 4(c)(8) is favorable. FEDERAL RESERVE BULLETIN 371 (1984)). In addition, this determination is subject to all of the Applicant has also applied for approval under secconditions set forth in Regulation Y, including sections tion 4(c)(8) of the Act and section 225.23 of Regulation 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and Y to engage through Bank in the following nonbanking 225.23(b)(3)), and to the Board's authority to require activities: the sale of travelers checks issued by unresuch modification or termination of the activities of a lated organizations, U.S. savings bonds, certified and bank holding company or any of its subsidiaries as the cashiers checks, and money orders with a face value of Board finds necessary to assure compliance with the not more than $1,000; personal credit cards; and the provisions and purposes of the Act and the Board's provision of investment advisory and trust services. regulations and orders issued thereunder, or to pre- These activities have been previously determined to vent evasion thereof. be closely related to banking and a proper incident The transaction shall be consummated not later than thereto. (12 C.F.R. § 225.25). Applicant also proposes three months after the effective date of this Order, to engage through Bank in consumer financial planning unless such period is extended for good cause by the and counseling, an activity that the Board has found to Board or by the Federal Reserve Bank of New York be closely related to banking, Citicorp (Citicorp Perpursuant to delegated authority. son-to-Person Financial Centers), 65 FEDERAL RE- By order of the Board of Governors, effective SERVE BULLETIN 265 (1979), and an activity the Board February 4, 1985. has proposed to add to its list of permissible nonbanking activities under section 225.25 of Regulation Y. Voting for this action: Chairman Volcker and Governors (49 Federal Register 9215 (1984)). Martin, Wallich, Partee, Rice, Gramley, and Seger. Notice of the application, affording opportunity for interested persons to comment, has been duly pub- JAMES MCAFEE lished (49 Federal Register 25,041 (1984) and 50 Feder- [SEAL] Associate Secretary of the Board al Register 1942 (1985)). The time for filing comments has expired and the Board has considered the application and all comments received in light of the factors set forth in section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). Applicant is the largest commercial banking organi- 7. E.g., J.P. Morgan & Co. Incorporated, 68 FEDERAL RESERVE BULLETIN 514 (1982). zation in Maryland, with total consolidated assets of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

254 Federal Reserve Bulletin • April 1985 $6.6 billion.' Applicant operates one subsidiary bank Applicant into the bank, without the Board's apwith total deposits of approximately $3.2 billion, rep- proval. resenting approximately 18.5 percent of deposits in These conditions preclude the type of linked or commercial banks in Maryland.2 Applicant is the 9th integrated operation that could otherwise render Bank largest of 76 commercial banking organizations in the a bank for purposes of the Act. Applicant has stated in Washington, D.C. banking market,3 where it operates its application that it will comply with each of these 60 offices with deposits of approximately $586.8 mil- conditions. lion, representing approximately 3.4 percent of depos- Applicant operates numerous offices of its full serits in commercial banks in the market. vice bank, as well as a loan production office, in the Bank is the second nonbank bank with deposit- same Washington, D.C. banking market where it protaking powers to receive a national charter to operate poses to operate Bank. The Board has previously in Washington, D.C.4 Applicant asserts that because determined that the conditions established in U.S. Bank will not make commercial loans as that term is Trust are sufficient to avoid concerns about integrated defined in the Board's Regulation Y, it will not be a operations arising from the geographic location of "bank" as defined in the BHC Act5 and, accordingly, nonbank banks except in those situations where proxthat Board approval of the application is not barred by imity of location inevitably would result in referrals of the interstate banking limitations of the Douglas customers or other integrated operations. Suburban Amendment to the BHC Act. Bancorporation, 71 FEDERAL RESERVE BULLETIN 61, In its U.S. Trust Order, the Board stated it was 63 (1984). Such a situation does not exist in this case. constrained by the technical definition of "bank" in Applicant has stated that it does not intend to the BHC Act to conclude that a bank holding company integrate the activities of its full service bank or its could acquire, on an interstate basis, a national bank loan production office with the activities of Bank. that would accept demand deposits but not make Applicant has also stated that Bank will not receive commercial loans. However, as in the U.S. Trust case, services from Applicant or its affiliates and that Bank the Board believes it appropriate to take action by will not refer its customers to affiliates of Applicant for conditioning its approval of these proposals to ensure services which are not offered by Bank. The Board is that Banks are not used by Applicant as a vehicle for of the opinion that these commitments, in addition to evasion of the provisions of the Act regarding inter- the U.S. Trust conditions, are sufficient to address the state banking. Accordingly, the Board has determined concerns regarding the operation of Bank in close to make its approval subject to the following condi- proximity to offices of its lead bank. tions: Applicant and a number of other bank holding 1. Applicant will not operate the demand deposit companies have made requests pursuant to the third taking activities of the bank in tandem with any condition noted above for Board approval to engage in other subsidiary or other financial institution; certain transactions with affiliates, including the provi- 2. Applicant will not link in any way the demand sion of certain internal administrative support services deposit and commercial lending services that define to their nonbank bank subsidiaries, and to establish a bank under the Act; and certain officer and director interlocks with such sub- 3. The nonbank bank will not engage in any transac- sidiaries. The Board on January 11, 1985, requested tions with affiliates, other than the payment of public comment on whether it should grant these dividends to Applicant or the infusion of capital by requests. 50 Federal Register 2057 (1985). Applicant will not provide such services to Bank unless those services are authorized following the public comment period. Applicant has also indicated that it will comply with 1. Financial data are as of September 30, 1984, unless otherwise indicated. the Board's decision regarding officer and director 2. Deposit data are as of December 31, 1983. interlocks between nonbank banks and their affiliates. 3. The Washington, D.C. banking market is approximated by the Pending the Board's decision, Applicant has indicated Washington Ranally Metro Area (RMA), which includes the District of Columbia and adjoining portions of Maryland and Virginia. that, as suggested in the Board's request for public 4. See Suburban Bancorporation, 71 FEDERAL RESERVE BULLETIN comment, a majority of the members of each Bank's 61 (1985). 5. The BHC Act defines the term "bank" to include any institution board of directors will consist of individuals who are chartered under the laws of the United States or any state that accepts not officers, directors or employees of any affiliate and deposits that the depositor has a legal right to withdraw on demand that no officer of any Bank will simultaneously serve and that engages in the business of making commercial loans. 12 U.S.C. § 1841(c). An institution that is chartered as a bank, but as an officer, director or employee of any affiliate that that does not provide one of the two essential functions required for engages in commercial lending. "bank" status under the BHC Act's bank definition, has been referred Applicant has also applied for approval under secto as a "nonbank bank." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 255 tion 4(c)(8) of the Act to engage de novo through Bank Need for Congressional Action in the sale of travelers checks issued by unaffiliated organizations, U.S. savings bonds, certified and cash- The Board has previously indicated its reluctance to iers checks, and money orders with a face value of not approve nonbank bank acquisitions in view of the more than $1,000; personal credit cards; and the potential presented by such acquisitions to alter signifprovision of investment advisory and trust services. icantly the nation's banking structure without Con- Each of the proposed activities is a permissible non- gressional action on the underlying policy issues.7 For banking activity under section 225.25 of the Board's the reasons stated in the Board's previous orders, the Regulation Y. Board continues to believe that Congressional action Bank will offer these services to its customers to close the nonbank bank loophole is imperative. The directly and not through its affiliates which engage in fact that the Board is required by the technical aspects these activities.6 In view of these facts, and the fact of the bank definition in the Act to approve this and that Applicant has agreed to comply with the U.S. similar applications should not be construed as en- Trust conditions, Bank's demand deposit taking activi- couragement to the applicants to consummate these ties will not be operated in tandem with its affiliates. proposals or to others to pursue similar acquisitions. Applicant also proposes to engage through Bank in In this regard, the Board notes that on October 4, consumer financial planning and counseling. The 1984, the Chairmen of the two Congressional banking Board has previously determined this activity to be committees announced that they intended to address closely related to banking (Citicorp Person-to-Person this nonbank bank issue in this session of Congress, Financial Centers), 65 FEDERAL RESERVE BULLETIN and that any legislation that was enacted would pro- 265 (1979)), and has proposed to add the activity to its vide that nonbank banks acquired after July 1, 1983, list of permissible nonbanking activities under section would be required to be divested. Accordingly, in the 225.25 of Regulation Y. (49 Federal Register 9215 event legislation implementing this position is enacted, (1984)). The Board's decision in Citicorp was condi- Applicant would be required to divest Bank and could tioned on Citicorp's agreement to maintain a strict suffer financial loss as a result. separation between its educational and promotional Based upon the foregoing and all the facts of record, materials and activities and to advise each customer the Board has determined that the balance of public that he is not required to purchase any services from interest factors it is required to consider under section Citicorp affiliates. In addition, Citicorp committed that 4(c)(8) of the BHC Act is favorable and consistent with any confidential information obtained by it or any of approval of this application. Accordingly, Applicant's its subsidiaries in connection with its courses would be proposal to establish Bank and to engage de novo obtained only with the customer's consent and would through Bank in certain nonbanking activities is herenot be made available to any other Citicorp affiliate or by approved. any third party for any purpose. The Board believes If this proposal is consummated, it shall be subject that these conditions are appropriate to ensure that to the conditions set forth in this Order with respect to the advice rendered will be impartial and to avoid avoiding the operation of an integrated institution and misuse of confidential customer information. Subject the conditions set forth in the Board's Regulation Y, to these conditions, the Board has determined that including those in sections 225.4(d) and 225.23(b). In Bank may engage in consumer financial planning and addition, Bank may not engage directly or indirectly in counseling. any activity other than those explicitly approved by The Board finds no evidence that consummation of the Board in this Order. Any expansion of Bank's this proposal to establish Bank and to engage in the activities beyond those approved in this Order would proposed nonbanking activities would result in any require the Board's prior approval as provided in conflicts of interest, unfair competition, unsafe and section 4 of the Act and the Board's Regulation Y.8 unsound banking practices, or other adverse effects. The approval is also subject to the Board's authority to Due to the de novo nature of the proposal, there will require modification or termination of the activities of not be any decrease in competition and consummation the holding company or any of its subsidiaries as the of the proposal may reasonably be expected to result Board finds necessary to assure compliance with the in increased competition. 7. See, e.g., U.S. Trust, supra; Suburban Bancorporation, 71 6. With respect to Bank's proposed credit card operations, Appli- FEDERAL RESERVE BULLETIN 51 (1985). cant has committed that Bank will not operate in tandem with its 8. In this regard, the Board notes that because Bank is not existing credit card affiliate, but will itself evaluate the creditwor- considered a bank under the BHC Act, the provisions of section thiness of each customer applying for a credit card and will contract 225.22(d)(1) of Regulation Y would not be applicable to exempt the independently for the servicing of its customers' accounts. acquisitions or activities of Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

256 Federal Reserve Bulletin • April 1985 provisions and purposes of the BHC Act and the lished. 49 Federal Register 16,838 (1984). The time for Board's regulations and orders issued thereunder, or filing comments has expired and the Board has considto prevent evasion thereof. In accordance with the ered the applications and all comments received in provisions of section 225.23(b)(l)(iii) of Regulation Y, light of the factors set forth in section 4(c)(8) of the the Board's approval would be required for additional Act. acquisitions by Applicant of nonbank banks or for the Applicant, with total assets of $28.3 billion as of establishment of offices of Bank to be located outside September 30, 1984, is the 13th largest bank holding the jurisdiction where it is now located. company in the country. Applicant operates five sub- By order of the Board of Governors, effective sidiary banks and also engages in various nonbanking February 4, 1985. activities through a number of subsidiaries. Applicant asserts that because Banks will not make Voting for this action: Chairman Volcker and Governors commercial loans as that term is defined in the Board's Martin, Wallich, Partee, Gramley, and Seger. Voting against Regulation Y, they will not be "banks" as defined in this action: Governor Rice, for the reasons in his dissenting the BHC Act1 and, accordingly, that Board approval statements to the Board's previous Orders approving applications to acquire so-called nonbank banks. See, e.g., Irving of the applications is not barred by the interstate Bank Corporation, 71 FEDERAL RESERVE BULLETIN 173; banking limitations of the Douglas Amendment to the Bankers Trust New York Corporation, 71 FEDERAL RESERVE BHC Act. BULLETIN 51 (1985). In its U.S. Trust Order, the Board stated it was constrained by the technical definition of "bank" in JAMES MCAFEE the Act to conclude that a bank holding company [SEAL] Associate Secretary of the Board could acquire, on an interstate basis, a national bank that would accept demand deposits but not make commercial loans. As in the U.S. Trust case, however, Mellon National Corporation the Board believes it appropriate to take action by Pittsburgh, Pennsylvania conditioning its approval of these proposals to ensure that Banks are not used by Applicant as a vehicle for Order Approving the Acquisition of Institutions evasion of the provisions of the Act regarding inter- Offering Checking Accounts and Consumer Lending state banking. Accordingly, the Board has determined to make its approval subject to the following condi- Mellon National Corporation, Pittsburgh, Pennsylva- tions: nia, a bank holding company within the meaning of the 1. Applicant will not operate the demand-deposit Bank Holding Company Act (12 U.S.C.§ 1841 et seq.) taking activities of the nonbank bank in tandem with ("Act" or "BHC Act") has applied for approval under any other subsidiary or other financial institution; section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and 2. Applicant will not link in any way the demand section 225.23(a)(1) of the Board's Regulation Y deposit and commercial lending services that define (12 C.F.R. § 225.23(a)(1)) to acquire: Mellon Bank a bank under the Act; and (CA), N.A., Pomona, California; Mellon Bank (DC), 3. The nonbank bank will not engage in any transac- N.A., the District of Columbia; Mellon Bank (IL), tions with affiliates, other than the payment of N.A., Oakbrook, Illinois; and Mellon Bank (OH), dividends to Applicant or the infusion of capital by N.A., Cleveland, Ohio (collectively, "Banks"). Applicant into the nonbank bank, without the Each of the institutions is a national bank, for which Board's approval. preliminary charter approval has been granted by the These conditions preclude the type of linked or Comptroller of the Currency. Banks will engage in integrated operation that could otherwise render these deposit taking (including demand deposits and NOW entities "banks" for purposes of the Act. Applicant accounts), consumer and mortgage lending, and trust and investment advisory services. Banks will not engage in the business of making commercial loans as that term is defined in the Board's Regulation Y. 12 C.F.R. § 225.2(a)(1)(B). The proposed activities have been determined by the Board to be closely 1. The BHC Act defines the term "bank" to include any institution related to banking. 12 C.F.R. § 225.25(b)(1), (3) and chartered under the laws of the United States or any state that accepts deposits that the depositor has a legal right to withdraw on demand (4); U.S. Trust Corporation, 70 FEDERAL RESERVE and that engages in the business of making commercial loans. BULLETIN 371 (1984). 12 U.S.C. § 1841(c). An institution that is chartered as a bank but that does not perform one of the two essential functions required for Notice of the applications, affording opportunity for "bank" status under the BHC Act, has been referred to as a interested persons to comment, has been duly pub- "nonbank bank." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 257 has stated in its applications that it will comply with Holding Company Act ("Illinois BHC Act") and the each of these conditions.2 Illinois Banking Act. However, Illinois Bank will not Applicant and a number of other bank holding be a "bank" for purposes of the Illinois BHC Act and companies have made requests pursuant to the third hence its restrictions on out-of-state ownership of a condition noted above for Board approval to engage in bank do not apply. Protestant's allegations regarding certain transactions with affiliates, including the provi- tandem operation in violation of the Illinois Banking sion of certain internal administrative support services Act are not supported by the record in light of this to their nonbank bank subsidiaries, and to establish Order's approval subject to the U.S. Trust condicertain officer and director interlocks with such sub- tions.4 sidiaries. The Board on January 11, 1985, requested The Superintendent of Banks for the State of Ohio public comment on whether it should grant these has commented in opposition to proposed nonbank requests. 50 Federal Register 2057 (1985). Applicant banks in Ohio. The Superintendent states that the will not provide such services to its Banks unless those statute laws of Ohio specifically prohibit foreign banks services are authorized following the public comment from conducting banking activities in Ohio, except for period. lending money and licensed trust activities, and that Applicant also has indicated that it will comply with the operation of nonbank banks by out-of-state bank the Board's decision regarding officer and director holding companies violates the intent of Ohio law and interlocks between nonbank banks and their affiliates. the Douglas Amendment. The Superintendent also Pending the Board's decision, Applicant has indicated argues that the balance of public interest factors the that, as suggested in the Board's request for public Board is required to consider in applications under comment, a majority of the members of each Bank's section 4(c)(8) of the Act is unfavorable because it will board of directors will consist of individuals who are result in a tendency toward undue concentration of not officers, directors or employees of any affiliate and resources and unfair competition. that no officer of any Bank will simultaneously serve The Board considered identical arguments by the as an officer, director or employee of any affiliate that Ohio Superintendent of Banks in its recent Orders engages in commercial lending. approving the acquisition of nonbank banks in Ohio by Irving Bank Corporation and The Chase Manhattan Protestants Corporation.5 For the reasons stated in those Orders, the Board similarly is unable to conclude that the First Oakbrook Bancshares ("Protestant"), Oak Superintendent's arguments provide a basis for denial Brook, Illinois, has protested Applicant's Illinois non- of Applicant's proposal to acquire a nonbank bank in bank bank (the "Illinois Bank") application. Protes- Ohio. tant alleges that the commercial lending activities of The Board also has examined the statute laws of certain subsidiaries of Applicant and the proposed California and the District of Columbia in addition to consumer banking, deposit-taking, and trust activities the codes of Illinois and Ohio, and has concluded that of the Illinois nonbank bank "would effectively trans- the statute laws of these states contain no provision form the group into one bank for purposes of the Bank prohibiting the acquisition of nonbank banks by out- Holding Company Act."3 In view of Applicant's com- of-state bank holding companies. mitments to abide by the U.S. Trust conditions and not to operate Illinois Bank in tandem with any affiliate, or link its demand deposit-taking activity to any commer- 4. Protestant claims that approval of this proposal also may result cial lending affiliate, the Board is constrained, as it was in decreased competition for data processing services in the Chicago in U.S. Trust, to conclude that the proposed activities area. Protestant's claim of decreased competition is not supported in the record. of the Illinois Bank will not render it a "bank" as that Applicant has an existing data processing subsidiary which serves term is defined in the BHC Act. independent banks in the Chicago area and which Protestant claims Protestant also alleges that the proposed operation will not continue to provide those banks with competitive services because of its affiliation with Illinois Bank. Applicant has responded of Illinois Bank will be in violation of the Illinois Bank that its data processing subsidiary will remain in the Chicago area and continue to provide competitive and innovative services to these local banks. The Board finds no support for Protestant's position upon its 2. Applicant has previously received Board approval to operate review of the record, and also notes that there are numerous providers numerous nonbanking subsidiaries throughout the United States. of data processing services in the Chicago area with which Applicant's Applicant has indicated that it will not locate any of its nonbank banks subsidiary must remain competitive in order to retain its existing in, or immediately proximate to, any office of an affiliate of the parent customers. holding company. 5. Irving Bank Corporation, 71 FEDERAL RESERVE BULLETIN 173 3. Protestant believes that because Oakbrook has sufficient deposi- (1985); The Chase Manhattan Corporation, 71 FEDERAL RESERVE tory institutions and because it is a popular location for regional and BULLETIN 249 (Board Order dated February 4, 1985). See also national businesses, Applicant intends to use Illinois Bank to provide Citizens Fidelity Corporation, 69 FEDERAL RESERVE BULLETIN 556 services to its commercial loan customers in the area. (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

258 Federal Reserve Bulletin • April 1985 Need for Congressional Action activities of the holding company or any of its subsidiaries as the Board finds necessary to assure compli- The Board has previously indicated its reluctance to ance with the provisions and purposes of the Act and approve nonbank bank acquisitions in view of the the Board's regulations and orders issued thereunder, potential presented by such acquisitions to alter signif- or to prevent evasion thereof. In accordance with the icantly the nation's banking structure without Con- provisions of section 225.23(b)( 1 )(iii) of Regulation Y, gressional action on the underlying policy issues.6 For the Board's approval would be required for additional the reasons stated in the Board's previous orders, the acquisitions by Applicant of nonbank banks or for the Board continues to believe that Congressional action establishment of offices by any of Banks outside of the to close the nonbank bank loophole is imperative. The states where they are now located. fact that the Board is required by the technical aspects By order of the Board of Governors, effective of the bank definition in the Act to approve these and February 13, 1985. similar applications should not be construed as encouragement to Applicant to consummate these pro- Voting for this action: Chairman Volcker and Governors posals or to others to pursue similar acquisitions. In Martin, Partee, Gramley, and Seger. Voting against this action: Governor Rice. Governor Rice dissents for the reathis regard, the Board notes that on October 4, 1984, sons stated in Irving Bank Corporation, 71 FEDERAL REthe Chairmen of the two Congressional banking com- SERVE BULLETIN 173 (1985). Absent and not voting: Govermittees announced that they intended to address the nor Wallich. nonbank bank issue in this session of Congress, and that any legislation that was enacted would provide JAMES MCAFEE that nonbank banks acquired after July 1, 1983, would [SEAL] Associate Secretary of the Board be required to be divested. Accordingly, in the event legislation currently pending before the Congress is enacted, Applicant would be required to divest Banks Orders Issued Under Sections 3 and 4 of the and could suffer financial loss as a result. Bank Holding Company Act The Board finds no evidence that consummation of the proposed acquisitions, subject to the limitations NBD Bancorp, Inc. and conditions described above, would result in undue Detroit, Michigan concentration of resources, unfair competition, conflicts of interests, unsound banking practices, or other Order Approving the Acquisition of a Bank Holding adverse effects. Company and a Company Engaged in Mortgage Based upon the foregoing and all the facts of record, Banking Activities the Board has determined that the balance of public interest factors it is required to consider under section NBD Bancorp, Inc., Detroit, Michigan, a bank holding 4(c)(8) is favorable. Accordingly, the applications are company within the meaning of the Bank Holding hereby approved. If these proposals are consummat- Company Act ("Act"), has applied for the Board's ed, they shall be subject to the conditions set forth in approval under section 3 of the Act (12 U.S.C. § 1842) this Order with respect to avoiding operation of an to acquire the successor by merger to United Michigan integrated institution and the conditions set forth in the Corporation, Flint, Michigan ("United"), and thereby Board's Regulation Y, including those in sections indirectly to acquire Genesee Merchants Bank & Trust 225.4(d) and 225.23(b). Co., Flint, Michigan; The Peoples State Bank of Caro, In addition, Banks may not engage directly or Caro, Michigan; and Community State Bank, Fowlerindirectly in any activity other than those explicitly ville, Michigan. approved by the Board in this Order. Any expansion Applicant also has applied for the Board's approval of Banks' activities beyond those approved in this under section 4(c)(8) of the Act (12 U.S.C. Order would require the Board's prior approval as § 1843(c)(8)) and section 225.23(a)(2) of the Board's provided in section 4 of the Act and the Board's Regulation Y (12 C.F.R. § 225.23(a)(2)), to acquire Regulation Y.7 United Michigan Mortgage Company, Flint, Michigan, The Board's approval also is subject to the Board's a company engaged in mortgage banking and servicauthority to require modification or termination of the ing activities. This activity has been determined by the Board to be closely related to banking and per- 6. See e.g., U.S. Trust, supra; Suburban Bancorporation, 71 missible for bank holding companies. (12 C.F.R. FEDERAL RESERVE BULLETIN 51 (1985). 7. In this regard, the Board notes that because Banks are not §§ 225.25(b)(1)). considered banks under the BHC Act, the provisions of section Notice of the applications, affording opportunity for 225.22(d)(1) of Regulation Y would not be applicable to exempt the acquisitions or activities of Banks. interested persons to submit comments, has been Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 259 given in accordance with sections 3 and 4 of the Act the Tuscola market, 12 other commercial banking (49 FEDERAL REGISTER 46,808 (November 28, 1984)). organizations would remain as competitors after con- The time for filing comments has expired, and the summation of the proposal. Accordingly, the effects of Board has considered the applications and all com- this proposal on competition in the Tuscola banking ments received in light of the factors set forth in market are not regarded as substantially adverse. section 3(c) (12 U.S.C. § 1842(c)) and the consider- Applicant is the largest commercial banking organiations specified in section 4(c)(8) of the Act. zation in the Detroit banking market, with deposits of Applicant is the largest commercial banking organi- $7.2 billion, representing approximately 27.7 percent zation in Michigan, with 19 subsidiary banks that of the total deposits in commercial banks in the control aggregate deposits of $8.3 billion, representing market.4 United is the 29th largest commercial bank- 16.9 percent of the total deposits in commercial banks ing organization in the market, with total deposits of in the state.1 United is the tenth largest commercial $41 million, representing approximately 0.2 percent of banking organization in the state, with three banking the total deposits in commercial banks in the market. subsidiaries that control aggregate deposits of $849.4 Upon consummation of the proposal, Applicant would million, representing 1.7 percent of the total deposits control approximately 27.9 percent of the total deposin commercial banks in the state. Upon consummation its in commercial banks in the market. The four largest of the proposed acquisition, Applicant's share of total commercial banks in the Detroit banking market condeposits in commercial banks in the state would in- trol 76.3 percent of the total deposits in commercial banks in the market, which would increase to 76.5 crease to approximately 18.6 percent, and Michigan percent upon consummation of the proposal. The would remain moderately concentrated in terms of market's HHI is 1658 and would increase by 11 points banking resources, with the four largest banking orgato 1669 upon consummation of the proposal.5 While nizations controlling 47.4 percent of the total deposits consummation of this proposal would eliminate some in commercial banks in the state. Accordingly, conexisting competition between Applicant and United in summation of this proposal would not result in a the Detroit banking market, 40 commercial banking significant increase in the concentration of banking alternatives would remain in the market. In light of the resources in Michigan. above, particularly the small increase in Applicant's Applicant's subsidiary banks compete directly with market share as a result of the proposal, the Board United's subsidiary banks in the Tuscola, Detroit, concludes that the effects of the proposal on competi- Lansing, and Sanilac banking markets. tion in the Detroit market are not substantially ad- In the Tuscola banking market, Applicant is the verse. tenth largest commercial banking organization, with total deposits of $15.3 million, representing 4.9 percent Applicant is the eighth largest commercial banking of the total deposits in commercial banks therein.2 organization in the Lansing banking market, with United is the second largest commercial banking orga- deposits of $54.4 million, representing 2.7 percent of nization, with $35.7 million in deposits, representing the total deposits in commercial banks there.6 United 11.5 percent of the total deposits in commercial banks is the sixteenth largest commercial banking organizathere. After consummation of the proposal, Applicant tion, with deposits of $16.5 million, representing 0.8 would control approximately 16.4 percent of the total percent of the total deposits in commercial banks in deposits in commercial banks and Applicant would the market. Upon consummation of the transaction, assume United's rank as the second largest commer- Applicant would become the seventh largest commercial banking organization in the market. cial banking organization in the market and its share of The Tuscola banking market is considered to be commercial bank deposits would increase to 3.5 permoderately concentrated, with the four largest commercial banks controlling 51.5 percent of the deposits HHI is between 1000 and 1800 is considered moderately concentrated. in commercial banks in the market.3 Although con- In such markets, the Department is likely to challenge a merger that summation of this proposal would eliminate some produces an increase in the HHI of more than 100 points unless other facts of record indicate that the merger is not likely to substantially existing competition between Applicant and United in lessen competition. 4. The Detroit banking market is approximated by Oakland, Macomb, and Wayne Counties, plus 33 cities and townships from the 1. Unless otherwise indicated, statewide data are as of December Counties of St. Clair, Lapeer, Livingston, Washtenaw, and Monroe 31, 1983, and market data are as of June 30, 1983. Counties. 2. The Tuscola banking market is approximated by all of Tuscola 5. Under the revised Department of Justice Merger Guidelines, in County except for the southern townships of Arbela and Millington, markets where the HHI is between 1000 and 1800 points, the plus Sebewaing township in Huron County, all in Michigan. Department is unlikely to challenge a merger that increases the HHI 3. The Herfindahl-Hirschman Index ("HHI") of the market is 1034 by less than 100 points. and would increase by 113 points to 1147 upon consummation of the 6. The Lansing banking market is defined as Eaton, Ingham and proposal. Under the revised Department of Justice Merger Guidelines Clinton Counties, the southeastern corner of Ionia County, and the (49 Federal Register 26,823 (1984)), a market in which the post-merger northwestern corner of Livingston County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

260 Federal Reserve Bulletin • April 1985 cent. The four-firm concentration ratio of 71.6 percent In evaluating the effects of a proposal on probable would remain unchanged and 16 commercial banking future competition, the Board considers market conalternatives would remain in the market after consum- centration, the number of probable future entrants into mation of this proposal.7 Accordingly, the Board has the market, the size of the bank to be acquired, and the concluded that the effects of the proposal on competi- attractiveness of the market for entry on a de novo or tion in the Lansing market would not be substantially foothold basis absent approval of the acquisition. adverse. After consideration of these factors in the context of Applicant is the largest of eight commercial banking the specific facts of this case, the Board concludes that organizations in the Sanilac banking market, with total consummation of this proposal would not have any deposits of $87.5 million, representing 38.5 percent of significant adverse effects on probable future competithe total deposits in commercial banks in the market.8 tion in any relevant market. In the 16 markets in which United is the smallest commercial banking organiza- Applicant but not United competes, the proposal tion in the market, with deposits of $2.1 million, would not require intensive competitive analysis under representing 0.9 percent of total deposits in commer- the Board's proposed guidelines. Either these markets cial banks in the market. The market is concentrated, are not highly concentrated or attractive for entry, or with a four-firm concentration ratio of 85 percent and United is not a market leader, as determined by the an HHI of 2287. The combination of Applicant and Board's Guidelines. United would increase Applicant's share of commer- United operates in one market, the Flint banking cial bank deposits in the market to 39.4 percent. market, in which Applicant does not operate.11 United To minimize the competitive effects of the proposal is the second largest of 14 commercial banking organiin the Sanilac market, Applicant proposes to divest zations and controls 29.1 percent of the total deposits United's sole banking office in the market to a banking in commercial banks in the market. The three largest organization that currently does not operate there. The commercial banking organizations control 77.8 perdivestiture will be effected prior to or concurrent with cent of the total deposits in commercial banks in the consummation of this proposal.9 Thus, upon consum- market, a level viewed as highly concentrated under mation of the transaction, including the proposed the Board's Guidelines. There are four Michigan bankdivestiture, Applicant's share of commercial bank ing organizations with assets over $1 billion that do not deposits and the number of competitors in the market operate in the market. The average rate of growth of would remain unchanged. Accordingly, consumma- deposits in the market for the past two years has been tion of the proposal would not have any significant less than the state and national averages. adverse effect on competition in the Sanilac market. In its analysis of this proposal, the Board has The Board has considered the effects of this propos- examined the extent of competition offered by thrift al on probable future competition in the 17 markets in institutions in the Flint market and in Michigan as a which Applicant and United do not compete directly whole. The Board has previously indicated that thrift and has also examined the proposal in light of the institutions have become, or at least have the potential Board's proposed guidelines for assessing the compet- to become, major competitors of banks.12 There are itive effects of market extension mergers or acquisi- five thrift institutions that operate in the Flint market, tions.10 controlling approximately $400 million in deposits. Two of the thrift institutions in the market are 7. The HHI in the market is 1830 and would increase by only 4 branches of thrift institutions with over $1 billion in points as a result of the proposal. Under the revised Department of deposits, and all of these institutions offer NOW Justice Merger Guidelines, a market where the post-merger HHI is accounts and are active in consumer lending. While over 1800 is considered concentrated. The Department is unlikely to challenge a merger where the increase in the HHI is less than 50 the commercial loan portfolios of these institutions are points. not substantial at the present time, the record indicates 8. The Sanilac market is approximated by Sanilac County, Michigan, except Minden Township. 9. The Board's policy with regard to competitive divestitures requires that divestitures intended to cure the anticompetitive effects resulting from a merger or acquisition occur on or before the date of consummation of the merger to avoid the existence of anticompetitive eifects. See Barnett Banks of Florida, Inc., 68 FEDERAL RESERVE BULLETIN 190 (1982); InterFirst Corporation, 68 FEDERAL RESERVE 11. The Flint banking market is approximated by Genesee County BULLETIN 243 (1982). and Lapeer County except for Almont, Dryden, Metamora, and 10. "Policy Statement of the Board of Governors of the Federal Hadley Townships, plus Maple Grove, Chesaning, Taymouth, Brady Reserve System for Assessing Competitive Factors Under the Bank and Birch Run Townships in Saginaw County, and Arbela and Merger Act and the Bank Holding Company Act," 47 Federal Millington Townships in Tuscola County. Register 9017 (1982). While the proposed policy statement has not 12. First Railroad and Banking Company of Georgia, 70 FEDERAL been adopted by the Board, the Board is using the policy guidelines as RESERVE BULLETIN 436 (1984); General Bancshares Corporation, 69 part of its analysis of the effect of a proposal on probable future FEDERAL RESERVE BULLETIN 802 (1983); First Tennessee National competition. Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 261 that the larger thrift institutions in the market actively NBD Mortgage also originates and services residenseek commercial loans. tial, commercial, industrial and construction mortgage Based upon this and other evidence of record, the loans. NBD Mortgage operates 17 offices in six states Board believes that substantial weight should be given and originated $118.3 million in mortgages in 1983. Its to these institutions as competitors or potential com- servicing portfolio totaled $1.3 billion as of June 30, petitors of commercial banks in the market.13 Accord- 1984. ingly, in view of the actual and potential competition The mortgage servicing market has been determined provided by thrift institutions, the Board concludes to be national in scope, and there are numerous that consummation of the proposed acquisition would competitors in this market.15 Upon acquisition of not have such adverse effects on probable future United, NBD Mortgage would increase its nationwide competition in any relevant market as to warrant rank from the 89th to the 73rd largest mortgage compadenial of the application. ny, based on volume of permanent mortgages serviced The financial and managerial resources of Appli- as of June 30, 1984. The combination of NBD Mortcant, United and their subsidiaries are regarded as gage and United Mortgage in the nationwide mortgage generally satisfactory. Although Applicant will incur servicing market will not have any adverse competisome debt as a result of this transaction, this transac- tive effects. tion will be financed primarily by the issuance of The market for 1-4 family mortgage originations has securities and the sale of assets. Upon consummation been determined to be local in scope.16 Company of this transaction, Applicant's primary and total capi- engages in this activity primarily in the Flint MSA. tal ratios will meet both the Board's current and Company's share of mortgage originations in that proposed Capital Adequacy Guidelines.14 According- market is approximately 7 percent, whereas Applily, considerations relating to banking factors are con- cant's share is approximately 0.4 percent. Thus, the sistent with approval of the proposal. Consummation increase in Applicant's share of the Genesee mortgage of this transaction will provide United's customers origination market as a result of the proposed transacwith access to a nationwide automated teller machine tion should have no significant competitive effects. system and new investment services, including bank- The market for multi-family and nonresidential ers acceptances and municipal bonds. Accordingly, property mortgage originations is national. However, considerations relating to the convenience and needs NBD Mortgage did not originate any such loans in of the communities to be served also are consistent 1983. United Mortgage originated $3.7 million of such with approval of the application. loans in 1983, which is less than 0.1 percent of the Applicant also has applied, pursuant to section $80.7 billion of such mortgages that were originated 4(c)(8) of the Act, to acquire United Michigan Mort- nationwide in 1983. Consummation of the proposed gage Company, Flint, Michigan ("Company"), a transaction would not have any significant adverse wholly owned subsidiary of United that engages in effects on competition in the multi-family and nonresimortgage banking and servicing activities. Applicant dential property market. currently engages in mortgage banking activities Accordingly, it does not appear that Applicant's through its subsidiary, NBD Mortgage Company, De- acquisition of Company would have any significant troit, Michigan ("NBD Mortgage"). Company origi- adverse effect upon existing or potential competition. nates and services residential, commercial, industrial, Furthermore, there is no evidence in the record to and construction mortgage loans through an office in indicate that approval of this proposal would result in Flint. It also originates mortgages from offices in undue concentration of resources, decreased or unfair Genesee County, Michigan. Company's 1983 mort- competition, conflicts of interests, unsound banking gage originations totaled $15.2 million and its mortgage practices, or other adverse effects on the public interservicing portfolio totaled $244.9 million as of June 30, est. Accordingly, the Board has determined that the 1984. balance of the public interest factors it must consider under section 4(c)(8) of the Act is favorable and consistent with approval of the application to acquire 13. If 50 percent of the deposits held by thrift institutions in this Company. market were included for determining the level of concentration in the market, the market shares of the three largest depository institutions would be 72 percent, a level not considered highly concentrated under the Board's Guidelines. Moreover, if thrift institutions with assets over $1 billion were considered as potential competitors, there would be numerous potential entrants into the Flint market under the 15. See, e.g., Banc Ohio Corp., 69 FEDERAL RESERVE BULLETIN Board's Guidelines. 34, 35 (1983). 14. Capital Adequacy Guidelines, 12 C.F.R. Part 225, Appendix A; 16. See, e.g., First National City Corp., 60 FEDERAL RESERVE Capital Adequacy Guidelines for Bank Holding Companies, 49 Feder- BULLETIN 50, 51 (1974), and Florida National Banks, 68 FEDERAL al Register 30,322 (July 30, 1984). RESERVE BULLETIN 49, 51 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

262 Federal Reserve Bulletin • April 1985 Based on the foregoing and the facts of record, the Applicant also has applied for the Board's approval Board has determined that the applications under under section 4(c)(8) of the Act (12 U.S.C. sections 3 and 4 of the Act should be, and hereby are, § 1843(c)(8)) and section 225.21(a) of the Board's approved. The acquisition and merger of United shall Regulation Y (12 C.F.R. § 225.21(a)), to acquire indinot be consummated before the thirtieth calendar day rectly the following nonbank subsidiaries of the Indefollowing the effective date of this Order or later than pendence Group: Independence Trust Company, three months after the effective date of this Order, Waukesha, Wisconsin, which provides trust and relatunless such period is extended for good cause by the ed services; and Independence Mortgage Company, Board or by the Federal Reserve Bank of Chicago Inc., New Berlin, Wisconsin, which originates, serpursuant to delegated authority. The determination as vices, and procures commitments for residential mortto Applicant's nonbanking activities is subject to the gage loans. These activities have been determined conditions set forth in sections 225.4(d) and by the Board to be closely related to banking and 225.23(b)(3) of Regulation Y (12 C.F.R. § 225.4(d) and permissible for bank holding companies (12 C.F.R. 225.23(b)(3)) and to the Board's authority to require §§ 225.23(b)(1), (3)). such modification or termination of the activities of a Applicant also has applied to form an intermediate holding company or any of its subsidiaries as the holding company, Marisub, Inc., into which the Inde- Board finds necessary to assure compliance with the pendence Group will be merged, and to which Appliprovisions and purposes of the Act and the Board's cant's existing bank subsidiaries will be transferred. regulations and orders issued thereunder, or to pre- Notice of the applications, affording opportunity for vent evasion thereof. interested persons to submit comments, has been By order of the Board of Governors, effective given in accordance with sections 3 and 4 of the Act February 25, 1985. (49 Federal Register 45,259 (Nov. 9, 1984)). The time for filing comments has expired, and the Board has Voting for this action: Vice Chairman Martin and Gover- considered the applications and all comments received nors Wallich, Partee, Rice, Gramley, and Seger. Absent and in light of the factors set forth in section 3(c) of the Act not voting: Chairman Volcker. and the considerations specified in section 4(c)(8) of the Act. JAMES MCAFEE Applicant is the third largest banking organization in [SEAL] Associate Secretary of the Board Wisconsin with total deposits of approximately $2.0 billion, representing 7.3 percent of statewide commercial bank deposits.2 The Independence Group ranks as The Marine Corporation the seventh largest banking organization in Wisconsin Milwaukee, Wisconsin with $487 million total deposits, representing 1.8 percent of statewide commercial bank deposits. Upon consummation of the proposed acquisition, Applicant Order Approving the Acquisition of a Bank Holding Company and of Companies Engaged in Trust will become the second largest banking organization in Services and Mortgage Banking the state, and will control $2.5 billion total deposits or 9.1 percent of statewide commercial bank deposits. The Marine Corporation, Milwaukee, Wisconsin, a Although the Board is concerned about the effect of bank holding company within the meaning of the Bank the consolidation of the third and seventh largest commercial banking organizations in Wisconsin on the Holding Company Act ("Act"), has applied for the concentration of banking resources within the state, Board's approval under section 3 of the Act certain circumstances mitigate that concern. Follow- (12 U.S.C. § 1842) to acquire Independence Bank ing consummation of the proposal, the share of com- Group ("Independence Group"), Waukesha, Wisconmercial bank deposits held by the four largest commersin, and thereby acquire indirectly its eight subsidiary banks.1 cial banking organizations in Wisconsin would increase by only 1.8 percent to 34.1 percent, and Wisconsin would remain one of the least concentrated states in the nation in terms of commercial bank 1. The banks to be acquired are as follows: deposits.3 Independence Bank Brookfield, Brookfield; Independence Bank Elkhorn, Elkhorn; Independence Bank Kenosha, Kenosha; Independence Bank New Berlin, New Berlin; Independence Bank Oconomowoc, Oconomowoc; 2. Unless otherwise indicated, deposit data are as of December 31, Independence Bank Waukesha, Waukesha; 1983. Independence Bank of Wauwatosa, Wauwatosa; and 3. Based on data of June 30, 1984, only nine states have lower Independence Bank Madison, Monona, all located in Wisconsin. commercial bank concentration ratios than Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 263 Applicant's subsidiary banks compete directly with est commercial banking organization in the market, the Independence Group's subsidiary banks in the with a market share of approximately 8.5 percent. Milwaukee, Madison, and Walworth banking mar- Twelve commercial banks would continue to operate kets.4 in the market after consummation of the proposal and In the Milwaukee banking market, Applicant is the the HHI would increase by 21 points to 1169. market's second largest commercial banking organiza- The Walworth banking market is unconcentrated,6 tion, with 13.7 percent of total deposits in commercial with an HHI of 823 and the four largest commercial banks in the market. The Independence Group is the banking organizations in the market controlling 41.6 market's sixth largest commercial banking organiza- percent of total deposits in commercial banks therein. tion, and controls 3.7 percent of total deposits in Applicant controls the eleventh largest commercial commercial banks in the market. After consummation banking organization with 5.9 percent of the deposits of the proposal, Applicant would control 17.4 percent in commercial banks in the market. The Independence of the market's total deposits in commercial banks, Group controls 10.3 percent of commercial bank deand its rank would remain unchanged. posits in the market and ranks third among commercial The Milwaukee banking market is considered to be banking organizations therein. After consummation, moderately concentrated.5 The Herfindahl-Hirsch- Applicant would be the largest commercial banking man Index ("HHI") in the market is 1373 and would organization in the market and would control 16.2 increase by 101 points to 1474 upon consummation of percent of the market's commercial bank deposits. the proposal. Although consummation of the proposal Thirteen commercial banks would remain in the marwould eliminate some existing competition between ket after consummation of the proposal, and the HHI Applicant and the Independence Group in the Milwau- would increase by 122 points to 945. kee market, 51 other commercial banking organiza- On the basis of the above facts and other facts of tions would continue to operate in the market, and the record, the Board concludes that consummation of the four-firm concentration ratio would rise by only 3.7 proposal would not have a substantial adverse effect percent to 67.6 percent. on existing competition in the Milwaukee, Madison, or In the Madison banking market, Applicant controls Walworth banking markets. the fifth largest commercial banking organization, with The Board has considered the effects of this propos- 7.0 percent of the deposits in commercial banks in the al on probable future competition in the eight markets market. The Independence Group controls approxi- in which Applicant and the Independence Bank Group mately 1.5 percent of market deposits. The market is do not compete directly, in light of its proposed moderately concentrated, with an HHI of 1148. After guidelines for assessing the competitive effects of consummation, Applicant would remain the fifth larg- market extension mergers and acquisitions.7 In evaluating the effects of a proposed merger or consolidation upon probable future competition, the Board considers market concentration, the number of probable future entrants into the market, the size and market position of the bank to be acquired and the attractiveness of the market for entry on a de novo or foothold 4. The Milwaukee banking market is approximated by the Milwau- basis. kee Ranally Metro Area (RMA) which consists of Milwaukee, Waukesha and Ozaukee Counties in Wisconsin, as well as portions of Of the eight relevant markets, five are not consid- Jefferson, Racine, Walworth and Washington Counties, also in Wis- ered highly concentrated and thus do not require consin. intensive analysis under the Board's proposed guide- The Madison banking market is approximated by all of Dane County, Wisconsin, except for the towns of York, Medina, Deerfield, Christiana, and Albion. The Walworth banking market is approximated by Walworth County, Wisconsin, except the town of East Troy and including the town of Burlington in Racine County, Wisconsin. 5. Under the revised Department of Justice Merger Guidelines (49 Federal Register 26,823 (1984)), a market in which the post-merger HHI is between 1000 and 1800 is considered moderately concentrated. 6. Under the revised Department of Justice Merger Guidelines, a In such markets, the Department is unlikely to challenge a merger that market in which the post-merger HHI is under 1000 is considered produces an increase in the HHI of less than 100 points. The unconcentrated. In such markets, the Department will not challenge a Department is likely to challenge a merger that produces an increase merger except in extraordinary circumstances. of over 100 points unless other facts of record indicate that the merger 7. "Policy Statement of the Board of Governors of the Federal is not likely substantially to lessen competition. Other factors include Reserve System for Assessing Competitive Factors Under the Bank the post merger HHI, the increase in the HHI, changing market Merger Act and the Bank Holding Company Act" (47 Federal conditions, the financial condition of the firm to be acquired, ease of Register 9017 (1982)). While the proposed policy statement has not entry, nature of the product, substitute products, similarities in firms been adopted by the Board, the Board is using the policy guidelines as that are subject to the transaction, and increased efficiencies that may part of its analysis of the effect of a proposal on probable future result from the transaction. competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

264 Federal Reserve Bulletin • April 1985 lines.8 Two remaining markets are not considered prospects of Applicant, the Independence Bank attractive for de novo or foothold expansion and as Group, and the combined organization, and concluded well have more than six probable future entrants to the that such factors are consistent with approval of the market.9 proposal. Considerations relating to the convenience West Bend, the remaining market, on a commercial and needs of the communities to be served also are bank only basis meets all four of the criteria for consistent with approval of the application. intensive analysis under the Board's proposed guide- Applicant also has applied, pursuant to section lines.10 The West Bend market is considered highly 4(c)(8) of the Act, to acquire Independence Trust concentrated, with an HHI of 2147.11 Applicant is the Company ("Independence Trust"), Waukesha, Wisthird largest commercial banking organization in the consin, a wholly owned subsidiary of the Indepenmarket, controlling 19.9 percent of deposits in com- dence Group that engages in trust and related services. mercial banks in the market. Independence Trust operates one office in Milwaukee. The Board has considered the presence of five thrift Applicant presently engages in trust activities stateinstitutions in the market that hold deposits of $135 wide through its subsidiary, Marine Trust Company, million, which is approximately 30.2 percent of the N.A. ("Marine Trust"), which operates eleven oftotal deposits in the market.12 The Board previously fices. has concluded that thrift institutions have become, or The Board has determined that the relevant product at least have the potential to become, major competi- market for trust services should be viewed on a tors of commercial banks.13 Two of these thrifts have disaggregated basis.15 For many of the trust services located their home offices within the West Bend offered by Marine Trust and Independence Trust, the market, and provide consumer loans, NOW accounts geographic market is regional or national, and the and commercial real estate loans. Moreover, one such number of competitors in the provision of such serthrift is actively engaged in additional commercial vices is quite large. The market shares held by Marine lending. Based upon the number, size, and market Trust and Independence Trust are correspondingly shares of these institutions in the West Bend market, small. For those trust services that are part of a local the Board has concluded that thrift institutions exert a geographic market, primarily testamentary trust and significant influence as competitors or potential com- estate settlement services, there is existing competipetitors in the West Bend banking market.14 After tion between Marine Trust and Independence Trust consideration of these factors in the context of the only in Milwaukee. There are numerous providers of specific facts of this case, the Board concludes that these services in Milwaukee, and neither Marine Trust consummation of this proposal would not have any nor Independence Trust holds a significant share of the significant adverse effects on probable future competimarket for these services. The proposed transaction, tion in any relevant market. therefore, would not have a significant adverse effect In evaluating this application, the Board has consid- on competition in the provision of trust services. ered the financial and managerial resources and future Applicant also has applied to acquire Independence Mortgage Company, Inc. ("Independence Mortgage"), New Berlin, Wisconsin, an Independence Group subsidiary which originates, services and processes commitments for residential mortgage loans. Applicant also offers mortgage origination and servicing activities through The Marine Mortgage Company, 8. These five banking markets are: Beloit-Janesville, Green Bay, Racine, Beaver Dam, and Appleton, all in Wisconsin. Inc., Milwaukee, Wisconsin. Applicant and Indepen- 9. They are the Kenosha and Langdale, Wisconsin, banking mar- dence Mortgage compete in several common local kets. markets for mortgage originations and in the regional/ 10. The West Bend banking market is approximated by Washington County, Wisconsin except the towns of Polk, Jackson, Germantown, national market for mortgage servicing. In view of the and Richfield. 11. With a three-firm concentration ratio of 75.2 percent, the market just surpasses the 75.0 percent threshold for a highly concentrated market under the Board's proposed guidelines. 12. Thrift data are as of September 30, 1983. Thrifts rank as the market's 3rd, 6th, 8th, 10th, and 12th largest depository institutions. 13. The Chase Manhattan Corporation, 70 FEDERAL RESERVE BULLETIN 529 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL RESERVE BULLETIN 802 (1983); First Tennessee National Corpora- the market would decrease from 75.2 percent to 58.2 percent. The tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). market's HHI would fall from 2147 to 1404, and Applicant's market 14. If 50 percent of the deposits held by thrift institutions in the share would decline from 19.9 percent to 13.8 percent. West Bend banking market were included in market concentration, 15. Bancorp Hawaii, Inc., 71 FEDERAL RESERVE BULLETIN 168 the shares of total deposits held by the three largest organizations in (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 265 small absolute and relative sizes of the mortgage FEDERAL RESERVE ACT ORDER ISSUED BY THE servicing and mortgage origination activities of Appli- BOARD OF GOVERNORS cant and Independence Group in the relevant markets, however, the proposal would not eliminate any signifi- Orders Issued under Section 25 of Federal cant competition in any relevant market.16 Reserve Act Accordingly, it does not appear that Applicant's acquisition of these nonbanking subsidiaries would Citibank International have any significant adverse effects upon competition Miami, Florida in any market. Furthermore, there is no evidence in the record to indicate that approval of these proposals Order Approving Additional Activities Under Section would result in undue concentration of resources, 25(a) of the Federal Reserve Act unsound banking practices, or other adverse effects on the public interest. Accordingly, the Board has deter- Citibank International, Miami, Florida ("Edge"), a mined that the balance of the public interest factors it corporation organized under section 25(a) of the Fedmust consider under section 4(c)(8) of the Act is eral Reserve Act (the "Edge Act," 12 U.S.C. § 611 favorable and consistent with approval of the applica- et seq.), has requested the Board's consent, under tions to acquire the Independence Group's nonbank- section 211.4(e)(5) of the Board's Regulation K, to act ing subsidiaries. as an insurance agent or broker in the United States Based on the foregoing and the facts of record, the with respect to insurance on international commercial Board has determined that the applications under risks and to invest in one or more domestic subsidiarsections 3 and 4 of the Act should be and hereby are ies to be engaged exclusively in the proposed activity. approved. The acquisition of the Independence Group Edge, with total consolidated assets of approximateshall not be consummated before the thirtieth calendar ly $1.9 billion, is a wholly owned subsidiary of Citiday following the effective date of this Order or later bank, N.A., New York, New York. Citibank is a than three months after the effective date of this subsidiary of Citicorp, New York, New York, the Order, unless such period is extended for good cause largest commercial banking organization in the United by the Board or by the Federal Reserve Bank of States, with consolidated assets of $150.6 billion as of Chicago pursuant to delegated authority. The determi- December 31, 1984. nations as to Applicant's nonbanking activities are Edge corporations are organized for the purpose of subject to the conditions set forth in sections 225.4(d) engaging in international or foreign banking or other and 225.23(b)(3) of Regulation Y (12 C.F.R. § 225.4(d) international or foreign financial operations. Subject to and 225.23(b)(3)) and to the Board's authority to Board approval, an Edge corporation may engage require such modification or termination of the activi- directly in any activity found by the Board to be usual ties of a holding company or any of its subsidiaries as in connection with the transaction of foreign banking the Board finds necessary to assure compliance with or financial operations and not inconsistent with the the provisions and purposes of the Act and the Board's banking powers specifically granted to Edge corporaregulations and orders issued evasion thereof. tions. 12 U.S.C. § 615(a). An Edge corporation may By order of the Board of Governors, effective also engage indirectly in the United States in any February 11, 1985. activity incidental to the international or foreign business of the Edge, as determined by the Board. Voting for this action: Chairman Volcker and Governors 12 U.S.C. § 615(c). All activities of an Edge corpora- Martin, Partee, Rice, Gramley, and Seger. Absent and not tion in the United States, whether direct or indirect, voting: Governor Wallich. must be incidental to its international or foreign business. 12 U.S.C. § 616. JAMES MCAFEE The proposed activities have been found by the [SEAL] Associate Secretary of the Board Board to be usual in connection with the transaction of foreign banking or financial operations outside the United States. 12 C.F.R. § 211.5(d)(9). The activities that the Board has determined to be incidental to an Edge corporation's international or foreign business, and therefore permissible in the United States, are listed in section 211.4(e) of the Board's Regulation K 16. As of September 30, 1984, Marine Mortgage's servicing portfolio stood at $25.9 million and that of Independence Mortgage at $34.0 (12 C.F.R. § 211.4(e)). The insurance agency activities million. In no relevant local market would Applicant and Indepen- proposed by Edge are not included on the list. An dence Mortgage combined control more than 10 percent of all mort- Edge corporation may, however, apply to the Board gage originations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

266 Federal Reserve Bulletin • April 1985 for a determination that other activities in the United would similarly appear to be incidental to the interna- States are incidental to its international or foreign tional or foreign business of the Edge corporation. business. Edge has requested such a determination Moreover, insurance services relating to U.S. exports with respect to the proposed insurance agency activi- and the transportation of goods for export are considties. ered international in other contexts; export trading Edge seeks the Board's authority to act directly or company subsidiaries of bank holding companies, indirectly as an insurance agent or broker in the which must engage exclusively in activities related to United States with respect to "international commer- international trade, are specifically authorized to offer cial risks." The type of insurance that would be the proposed insurance services. In addition, engaging brokered would consist of insurance covering the in the proposed activities would be in furtherance of transportation of cargo from any point of origin in the Edge's international business; thus, approval would be United States to a point of destination outside the consistent with the purpose of the Edge Act to im- United States; and insurance on other commercial prove the competitive position of Edge corporations in risks resident or located abroad, or activities per- order to enhance U.S. trade. Therefore, the Board has formed outside the United States, regardless of wheth- found that the proposed activities, subject to certain modifications discussed below, have a sufficiently er the insurance is placed with underwriters located identifiable international connection as to be considinside or outside the United States. Edge includes as ered incidental to Edge's foreign or international busi- "other commercial risks" any risks underwritten by ness. insurance carriers on behalf of businesses (but not individuals), and would include "key man" life insur- In order to ensure that each transaction with respect ance, and group life or health insurance arranged by to the insurance brokerage activities of Edge is incibusinesses as part of their employee benefit programs. dental to its international or foreign business, the The proposed activities do not include selling insur- Board has determined that Edge may act as insurance ance on personal risks and Edge does not propose to agent or broker within the following limitations: underwrite insurance. 1. where the insurance products are forms of proper- In determining whether an activity is incidental to an ty and casualty insurance, their sale should be Edge corporation's international business, one of the limited to instances where the property protected is factors that the Board considers is whether the activity located abroad or is being imported or exported; has a direct or clearly identifiable connection to inter- 2. where the insurance protects vehicles used in the national transactions. In the context of other activi- transportation process, the insurance sold should be ties, the Board has found that a sufficient international limited to vehicles primarily based abroad; connection is established where the activity relates to 3. where the insurance products protect a business, transactions performed or to property located abroad.1 their sale should be limited to instances where the Similarly, with respect to brokering insurance where business or property protected is located abroad; the risk on which insurance is to be sold is located and outside or substantially outside the United States, the 4. where the insurance products relate to particular activity appears to be incidental to international or employees, their sale should be limited to protecting foreign business. employees who reside and are employed abroad. With respect to insurance on risks located inside the United States, the Board notes that the only such In considering Edge's application, the Board also insurance to be brokered is insurance with respect to took into account the relatively low risk involved in goods that will be exported. Edge corporations are the activity of brokering insurance, and noted that the permitted to finance the costs of production for goods Citicorp organization has expertise in acting as an to be exported and the domestic shipment and tempo- insurance agent or broker with respect to international rary storage of such goods. The ability to act as agent risks through its existing insurance brokerage operafor the sale of insurance on goods to be exported tions overseas. Moreover, the financial condition and managerial resources of the Citicorp organization and Edge are consistent with approval of Edge's request. Based on the foregoing and other considerations of record, and subject to the limitations listed above, the Board has determined that Edge's proposed activities would be incidental to its international or foreign 1. For example, Regulation K permits the financing of activities business and are otherwise consistent with the purperformed substantially abroad and the provision of economic advice poses of the Federal Reserve Act. Accordingly, the to U.S. residents with respect to foreign assets. (12 C.F.R. application is approved. §§ 211.4(e)(4)(iv) and (xiv)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 267 By order of the Board of Governors, effective tems, local institutions are often permitted to engage in February 7, 1985. activities that would not be permissible for United States banking organizations under applicable United Voting for this action: Chairman Volcker, Governors Wal- States laws and regulations. In the Edge Act and the lich, Partee, Rice, Gramley, and Seger. Abstaining from this Bank Holding Company Act, the Board has been action: Governor Martin. granted authority to permit activities abroad that are generally not authorized in the United States for bank JAMES MCAFEE holding companies. In the exercise of that authority, [SEAL] Associate Secretary of the Board the Board has adhered to the policy that the foreign activities that it authorizes should be of a banking or Citibank Overseas Investment Corporation financial, as opposed to commercial, nature, or that Wilmington, Delaware such activities should be usual in connection with banking or other financial operations abroad. The Order Denying Additional Activity Under Section Board may also consider whether conduct of the 25(a) of the Federal Reserve Act activity will enable the U. S. banking organization to compete effectively with foreign organizations. In ad- Citibank Overseas Investment Corporation dition, the Board takes into account whether the ("COIC"), Wilmington, Delaware, has applied for the performance of the activity by a United States banking Board's consent under section 25(a) of the Federal organization overseas is consistent with the prudent Reserve Act (12 U.S.C. § 615(c)) and section 211.5(d) conduct and management of the company's banking of the Board's Regulation K (12 C.F.R. § 211.5(d)) to and nonbanking operations, and the effect of the engage through its subsidiary Citigeneral Insurance activity on the capital and managerial resources of the Australia Limited ("Citigeneral") in underwriting cer- U.S. banking organization. In this regard, it is genertain property and casualty insurance in Australia. ally preferable for U. S. banking organizations to COIC is a corporation organized under section 25(a) strengthen capital resources to support more traditionof the Federal Reserve Act (an "Edge Corporation") al banking activities before venturing on a large scale and is a wholly owned subsidiary of Citibank, N.A., into new high-risk activities, particularly where the New York, New York. Citibank is a subsidiary of activities are less directly related to the organization's Citicorp, New York, New York, the largest commer- primary business. cial banking organization in the United States with In considering the application, the Board took into consolidated assets of $144.7 billion as of September account the fact that there are affiliations in Australia 30, 1984. between banking and financial institutions and proper- COIC's indirect subsidiary, Citicorp Australia Hold- ty and casualty insurance underwriters. The Board ings Limited ("Holdings"), which is primarily a con- noted COIC's assertions in support of its request for sumer finance company, has two Australian insurance approval of this application that the activity is financial subsidiaries, Citigeneral (formerly Ajax Insurance and usual in connection with the transaction of bank- Company) and Citilife Insurance Australia Limited ing or financial operations in Australia. In this regard, (formerly Surrey Insurance Company). Pursuant to COIC provided information that indicates that three of Board approval, Citilife and Citigeneral underwrite the four largest commercial banks and eleven of the credit-related insurance in Australia.1 Citigeneral also seventeen largest finance companies in Australia have is authorized to underwrite a limited amount of motor affiliates that underwrite general property and casualty vehicle comprehensive insurance of the type that insurance. Moreover, because COIC competes in Aus- Citigeneral could write at the time of its acquisition by tralia through the vehicle of a finance company, COIC COIC. COIC now seeks authority to engage through asserts that Holdings and its subsidiaries operate at a Citigeneral in general property and casualty insurance competitive disadvantage because they do not have underwriting. the flexibility to offer as wide a range of financial In reviewing proposals by U. S. banking organiza- services as do their competitors. tions to engage in activities overseas, the Board has In acting on an application for a new activity, the recognized that in other banking and financial sys- Board has given weight to the fact that other financial institutions abroad engage in the activity where evidence is provided that performance of the activity would enhance the competitive position of the U.S. banking organization. These factors are not determina- 1. Citibank Overseas Investment Corporation!Surrey Insurance Company, 67 FEDERAL RESERVE BULLETIN 366 (1981). The owner- tive, however, in approving a new activity. The Board ship structure of, and prior regulatory approvals with respect to, these also takes into consideration the risks inherent in the companies are described in that Order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

268 Federal Reserve Bulletin • April 1985 activity, especially whether those risks are of a type approval of the application by COIC would not be and nature not normally associated with banking or consistent with the purposes of the Federal Reserve finance, any adverse effects that may result from Act or the Bank Holding Company Act and would not performance of the activity such as the potential for be in the public interest. Therefore, the application is conflicts of interest, and the effects of the proposal on denied. the capital and managerial resources of the U. S. By order of the Board of Governors, effective banking organization. December 4, 1984. In this proposal, the risks inherent in underwriting property and casualty insurance are not of the type Voting for this action: Chairman Volcker and Governors traditionally associated with banking. Recent experi- Martin, Wallich, Partee, Rice, and Seger. Voting against this action: Governor Gramley. ence of both U. S. and foreign casualty insurance underwriters demonstrates that these risks, and consequent losses and potential losses necessitating addi- WILLIAM W. WILES [SEAL] Secretary of the Board tional capital infusions, can be substantial. Property and casualty insurance covers a wide spectrum of services, which are often grouped under three head- Concurring Statement of Chairman Volcker ings — fire, marine, and accident insurance, including automobile liability and damage, health and accident, I consider the decision in this case to be close, and my workmen's compensation, malpractice, and other concurrence is dependent upon certain specific eleforms of professional liability. In all these cases, the ments in the proposal. The Board has denied a rather insurance covers the risk of loss associated with broad proposal to engage initially in underwriting uncertain events. The probability of those events property and casualty risks in Australia, including occurring, and the extent of consequent losses, cannot household and homeowners' insurance covering fire be as readily determined in an actuarial sense as in the and any other type of damage; motor vehicle insurcase of life insurance. ance, including insurance on light commercial vehi- Although Citigeneral has performed satisfactorily in cles; insurance on small watercraft, and travel insurmanaging the limited casualty insurance business it ance. Applicant stated that it anticipated expanding currently conducts, its operations are small and the lines offered at a later date. Board has restricted the scope of its activities. COIC I do not believe that denial of all applications for now proposes to expand the range of its underwriting property and casualty insurance would necessarily be activities significantly, although COIC states that its required where the lines of insurance to be written are business plans would initially focus on underwriting restricted, the individual risks covered are small, and only several personal, as opposed to commercial, lines the size of the investment would not expose the of insurance. However, the authority that COIC seeks organization to significant risk, provided a reasonable with respect to property and casualty insurance is case is made that competing banking institutions are unrestricted as to the type of personal risk Citigeneral directly or indirectly engaged in offering the same could insure and the proposed lines of insurance will services in a significant way. While I believe the latter necessarily increase the risk to which the company is point is reasonably satisfied in this case, I concur in exposed. Moreover, the application contemplates of- the Board's opinion because the proposal as strucfering other lines in the future. Engaging in a general- tured involves so broad a potential range of personal ized property and casualty underwriting business, property and casualty insurance lines now or in the even initially on a modest scale, would nonetheless future. constitute entry into an inherently risky business. December 4, 1984 COIC has also asserted that in order to remain fully competitive with local Australian organizations, it Dissenting Statement of Governor Gramley must be able to sell all lines of insurance to customers. The Board notes, however, that, under Regulation K, The Board's decision in this case is based principally COIC may act as a general insurance broker and on the risks associated with underwriting general therefore may sell property and casualty insurance property and casualty insurance. From the facts precoverage written by other companies as part of the sented, I find the risk exposure for the Citicorp services it offers to customers. Therefore, COIC's organization to be quite manageable. Citigeneral's financial services business in Australia would not proposed property and casualty insurance underwritappear to be significantly disadvantaged by not under- ing operations would be modest in size, Citigeneral writing property and casualty insurance. would underwrite personal lines only and would have Based on the foregoing and other considerations substantial reinsurance coverage for its individual reflected in the record, the Board has determined that risks. Moreover, Citigeneral would not undertake to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 269 reinsure others. In my judgment, the application the Board has adhered to the policy that the foreign should be approved conditioned on limiting the size activities that it authorizes should be of a banking or and scope of the activities as described above. For this financial, as opposed to commercial, nature, or that reason, I dissent from the Board's action in this case. such activities should be usual in connection with banking or other financial operations abroad. The December 4, 1984 Board may also consider whether conduct of the activity will enable the U.S. banking organization to Statement by Board of Governors of the compete effectively with foreign organizations. In ad- Federal Reserve System dition, the Board takes into account whether the performance of the activity by a United States banking Regarding Applications by Citibank Overseas organization overseas is consistent with the prudent Investment Corporation to engage in additional conduct and management of the company's banking activity under section 25(a) of the Federal Reserve and nonbanking operations, and the effect of the Act activity on the capital and managerial resources of the U.S. banking organization. By letter dated November 19, 1984, the Board ap- The list of permissible activities in Regulation K proved the application of Citibank Overseas Invest- includes the underwriting of credit life insurance and ment Corporation ("COIC"), Wilmington, Delaware, credit accident and health insurance that is related to for the Board's consent under section 25(a) of the extensions of credit by the investor or its affiliates Federal Reserve Act (12 U.S.C. § 615(c)) and section (12 C.F.R. § 211.5(d)(5)). The general activity of 211.5(d) of the Board's Regulation K to retain the underwriting life insurance is not listed as a permissishares of two subsidiaries:1 KKB Lebensversicherung ble activity. The Board has previously approved an AG, Dusseldorf, Federal Republic of Germany application to underwrite general life insurance in the ("KKB Leben") after KKB Leben engages in the United Kingdom, based on an evaluation of the finanactivity of underwriting life insurance in the Federal cial characteristics of the activity and the affiliations in Republic of Germany; and Citilife Insurance Australia that country between financial institutions and insur- Limited ("Citilife") after Citilife engages in the activi- ance underwriting companies.2 ty of underwriting life insurance in Australia. In this In approving these applications, the Board considstatement, the Board sets forth its reasons for approv- ered a number of factors. With respect to the request ing these applications. to underwrite life insurance through KKB Leben, COIC is a corporation organized under section 25(a) COIC asserted that underwriting life insurance is of the Federal Reserve Act (an "Edge Corporation") financial in nature and usual in connection with bankand is wholly owned by Citibank, N.A., New York, ing in Germany in that life insurance is frequently used New York. Citibank is a wholly owned subsidiary of as a savings vehicle in Germany because of its favor- Citicorp, New York, New York, which is the largest able tax advantages, and that the relations between commercial banking organization in the United States German commercial banks and German life insurance with consolidated assets of $144.7 billion as of Septem- underwriters have traditionally been marked by mutuber 30, 1984. al shareholdings and director interlocks. COIC has In reviewing proposals by U.S. banking organiza- provided information indicating that approximately 26 tions to engage in activities overseas, the Board has of the 100 largest German deposit-taking institutions recognized that, in other banking and financial sys- are affiliated with an insurance group engaged in life tems, local institutions are often permitted to engage in insurance underwriting. Moreover, COIC has deactivities that would not be permissible for United scribed long-standing relationships between major life States banking organizations under applicable United underwriters and savings and loan associations, and States laws and regulations. In the Edge Act and the stated that six of the seven largest German life insur- Bank Holding Company Act, the Board has been ance underwriters are closely affiliated with building granted authority to permit activities abroad that are and loan associations and savings banks. generally not authorized in the United States for bank In connection with the request to underwrite life holding companies. In the exercise of that authority, insurance through Citilife, COIC maintained that underwriting life insurance in Australia is a financial activity or usual in connection with banking or other 1. As discussed below, Citicorp has agreed to transfer KKB Leben and Citilife from COIC to Citicorp within three years, and two years, 2. Citibank Overseas Investment Corporation/Citibank Assurance respectively. Company Limited, 70 FEDERAL RESERVE BULLETIN 168 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

270 Federal Reserve Bulletin • April 1985 financial operations in Australia. The Board noted The Board also relied on Citicorp's commitment to that, although legislation currently bars Australian transfer the ownership of KKB Leben and Citilife commercial banks from engaging in life insurance from COIC, a Citibank subsidiary, to Citicorp itself underwriting, Australian life insurance underwriters within three and two years, respectively, after those are engaged in financial services other than commer- companies begin engaging in the proposed insurance cial banking, such as those conducted through owner- activities. The Board believes that holding company ship of merchant banks, money market companies, ownership, rather than indirect bank ownership, is savings and loan associations, building societies and appropriate where the subsidiary is engaging extenconsumer finance companies. For example, the facts sively in activities that are not traditional banking of record indicate that half of the 18 largest Australian activities. In addition, holding company ownership finance companies are affiliated with general insurance would have the effect of automatically applying the underwriters, and two of these are also affiliated with quantitative limits and collateral requirements of secmajor Australian commercial banking organizations. tion 23A of the Federal Reserve Act (12 U.S.C. Moreover, due to restrictions of Australian law, COIC § 371c) to covered transactions between Citicorp's operates in Australia primarily through a consumer subsidiary banks and KKB Leben and Citilife. Prior to finance company and thus directly competes with the transfer, Citibank has committed to treat these companies affiliated with insurance underwriters. companies as subsidiaries of the holding company for purposes of section 23A. In acting on the application the Board considered the fact that competitors of the Citicorp organization After consideration of the foregoing and other facts are able to provide the proposed services and that of record, including the financial characteristics of the approval of the activity would permit Citicorp to activity, the affiliations in the respective countries compete more effectively in the financial services between insurance underwriters and financial instituindustry generally in these countries without incurring tions, the risks associated with underwriting life insursubstantial additional risk. In assessing the risks to the ance, the relatively small size of the companies and the Citicorp organization of underwriting life insurance in moderate level of projected growth, the Board con- Germany and Australia, the Board took into account cluded that the activity of underwriting life insurance that the risks insured against in underwriting life in Germany and Australia by subsidiaries of Citicorp insurance are actuarially predictable, unlike the risks would be consistent with the purposes of section 25(a) involved in other types of insurance, and that the of the Federal Reserve Act, section 4(c)(13) of the scope of the risk associated with investment of reve- Bank Holding Company Act and the Board's Regulanues can be limited with prudent underwriting prac- tion K. Accordingly, the applications were approved tices. The Board also noted that both KKB Leben and subject to the conditions described above. Citilife are relatively small companies that appear to Board of Governors of the Federal Reserve System, be adequately capitalized. The projected growth of December 4, 1984. KKB Leben and Citilife is moderate and COIC anticipates no additional capital will be required for these Voting for this action: Chairman Volcker and Governors companies over the next three years. Any further Martin, Wallich, Partee, Rice, Gramley, and Seger. investments in these companies will require the consent of the Board and KKB Leben and Citilife will be WILLIAM W. WILES subject to supervision by regulatory authorities in [SEAL] Secretary of the Board Germany and Australia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 271 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During February 1985 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) CBC Bancorp, Ltd., Heritage Bank of Oakwood, February 12, 1985 Chicago, Illinois Westmont, Illinois By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date The Bank of New York, Great Neck Branch of Hamburg New York February 1, 1985 New York City, New York Savings Bank, Brooklyn, New York Bank of Virginia Company, Bank of Virginia, National Asso- Richmond February 7, 1985 Richmond, Virginia ciation, Richmond, Virginia Bankmanagers Corp., Park Bank East, Chicago February 6, 1985 Milwaukee, Wisconsin Milwaukee, Wisconsin Brazos Valley Bancshares, Inc., Western National Bank, Dallas February 12, 1985 Bryan, Texas Bryan, Texas Brookside Bancshares, Inc., Brookside State Bank, Kansas City February 22, 1985 Tulsa, Oklahoma Tulsa, Oklahoma Capital Bancorporation, Inc., Capital Bank & Trust Company St. Louis February 21, 1985 Clayton, Missouri of Clayton, Clayton, Missouri Citizens Development Compa- First Security Bank of Laurel, Minneapolis February 14, 1985 ny, Laurel, Montana Billings, Montana Columbia Bancorp, Inc., Columbia Bank (In Organization), San Francisco February 15, 1985 Avondale, Arizona Avondale, Arizona Commercial Bancshares of Roa- The Commercial Bank of Atlanta January 30, 1985 noke, Inc., Roanoke, Roanoke, Alabama Roanoke, Alabama Commercial Bank Investment Commercial Bancorporation of Kansas City February 13, 1985 Company, Colorado, Denver, Colorado Denver, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

272 Federal Reserve Bulletin • April 1985 Section 3—Continued ,. . x-j i / \ Reserve Effective AApplicant Bank(s) BanR date Commonwealth Trust Bancorp, The Farmers Bank, Cleveland February 4, 1985 Inc., Butler, Kentucky Covington, Kentucky Community Holding Company, The First National Bank of Cleveland February 14, 1985 Inez, Kentucky Louisa, Louisa, Kentucky County Bancorporation, Inc., Cape County Bank of Cape St. Louis January 31, 1985 Jackson, Missouri Girardeau, Cape Girardeau, Missouri Delaware National Bankshares Delaware National Bank, Philadelphia February 25, 1985 Corp., Georgetown, Delaware Georgetown, Delaware Elm Marine Banc-Shares, Inc., The Saint Charles National Bank, Chicago February 14, 1985 Elmhurst, Illinois St. Charles, Illinois Emmetsburg Bank Shares, Inc., Iowa Trust & Savings Bank, Chicago January 31, 1985 Des Moines, Iowa Emmetsburg, Iowa Farmers National Bancorp, Atlantic National Bank, Richmond February 8, 1985 Annapolis, Maryland Ocean City, Maryland Fidelity Bancorp, Inc., Fidelity Bank (In Organization), San Francisco February 20, 1985 Scottsdale, Arizona Scottsdale, Arizona FINB Holding Corp., First Illinois National Bank, Chicago February 20, 1985 Bettendorf, Iowa Savanna, Illinois First Clay Corp., First Bank and Trust Company of Chicago February 6, 1985 Brazil, Indiana Clay County, Indiana, Brazil, Indiana First Colebrook Bancorp, Inc., The First Colebrook Bank, Boston February 4, 1985 Colebrook, New Hampshire Colebrook, New Hampshire First Franklin Bancshares, Inc., Riceville Bank, Atlanta February 13, 1985 Athens, Tennessee Riceville, Tennessee First National Corporation, First National Bank of Chicago February 14, 1985 Bloomington, Indiana Bloomington, Bloomington, Indiana First Railroad & Banking Com- National City Bankcorp, Atlanta January 30, 1985 pany of Georgia, Rome, Georgia Augusta, Georgia First State Bancorporation, The Martin Bank, St. Louis February 21, 1985 Inc., Martin, Tennessee Tiptonville, Tennessee First State Holding Corp., First State Bank of Lamar Coun- Atlanta January 30, 1985 Sulligent, Alabama ty, Sulligent, Alabama First Tule Bancorp, Inc., The First National Bank of Tulia, Dallas February 8, 1985 Tulia, Texas Tulia, Texas First United Corporation, First United National Bank & Richmond February 12, 1985 Oakland, Maryland Trust, Oakland, Maryland FirstBank Holding Company of First National Bank, Palm Desert San Francisco February 6, 1985 California, (In Organization), Lake wood, Colorado Palm Desert, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 273 Section 3—Continued . .. „ ,, . Reserve Effective Applicant Bank(s) ^ BanR Gebsco, Inc., Mondovi State Bank, Minneapolis February 25, 1985 Cochrane, Wisconsin Mondovi, Wisconsin Georgetown National Bank Georgetown National Bank, Dallas February 8, 1985 Holding Company, Georgetown, Texas Georgetown, Texas I.S.B. Bancorporation, Inc., Iowa Savings Bank, Chicago February 7, 1985 Hampton, Iowa Woodbine, Iowa InvestArk Bankshares, Inc., North Central Financial Corpora- St. Louis February 8, 1985 Stuttgart, Arkansas tion, Melbourne, Arkansas The Bank of North Arkansas, Melbourne, Arkansas JBC Bancshares, Inc., Jasper Banking Company, Atlanta February 19, 1985 Jasper, Georgia Jasper, Georgia Johnco Bancshares, Inc., John O. Melby & Co., Minneapolis February 5, 1985 Whitehall, Wisconsin Whitehall, Wisconsin Landmark Banking Corporation Landmark Bank of Seminole Atlanta February 6, 1985 of Florida, County, Ft. Lauderdale, Tennessee Casselberry, Florida Lake Park Bancshares, Inc., State Bank of Lake Park, Minneapolis February 19, 1985 Lake Park, Minnesota Lake Park, Minnesota Lincoln Bancshares, Inc., Lincoln County National Bank, Cleveland February 8, 1985 Stanford, Kentucky Stanford, Kentucky Mainline Bankshares of Port- The Peoples Bank, St. Louis February 5, 1985 land, Inc., Portland, Arkansas Portland, Arkansas Marble Falls National Banc- Marble Falls National Bank, Dallas February 1, 1985 shares, Inc., Marble Falls, Texas Marble Falls, Texas Metro Bancorporation, Hudson State Bank, Chicago February 22, 1985 Waterloo, Iowa Hudson, Iowa Midwestern Services, Inc., First Westside Bank of Omaha, Kansas City February 20, 1985 Omaha, Nebraska Omaha, Nebraska Mount Vernon Bankshares, The First National Bank of Dallas February 25, 1985 Inc., Mount Vernon, Mount Vernon, Texas Mount Vernon, Texas National City Bancshares, Inc., The National City Bank of St. Louis February 8, 1985 Evansville, Indiana Evansville, Evansville, Indiana Nationwide Bankshares, Inc., Charter West National Bank, Kansas City February 25, 1985 West Point, Nebraska West Point, Nebraska NBP Financial Services, Inc., National Bank of Petersburg, Chicago February 14, 1985 Petersburg, Illinois Petersburg, Illinois O.C.B. Bancorp, Orange County Bank, St. Louis February 19, 1985 Paoli, Indiana Paoli, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

274 Federal Reserve Bulletin • April 1985 Section 3—Continued * i • . , , x Reserve Effective Applicant Bnank(s) BanR date Ohio Bancorp, The Miners and Mechanics Sav- Cleveland January 30, 1985 Youngstown, Ohio ings and Trust Company, Steubenville, Ohio Oran Bancshares, Inc., Oran State Bank, St. Louis January 31, 1985 Oran, Missouri Oran, Missouri Park Financial of St. Paul, Inc. Citizens State Bank of Montgom- Minneapolis February 4, 1985 St. Paul, Minnesota ery, Montgomery, Minnesota Parker Bankshares, Incorporat- First National Bank of Parker, Kansas City January 30, 1985 ed, Parker, Colorado Parker, Colorado Pennsylvania National Financial Pennsylvania National Bank and Philadelphia February 25, 1985 Corp., Trust Company, Harrisburg, Pennsylvania Pottsville, Pennsylvania Peoples Mid-Illinois Corpora- The First National Bank of Chicago February 21, 1985 tion, Normal, Bloomington, Illinois Normal, Illinois Plaza Bancshares, Inc., River Plaza National Bank, Dallas February 22, 1985 Fort Worth, Texas Fort Worth, Texas Raleigh Bankshares, Inc., National Bank of Summers, Richmond January 30, 1985 Beckley, West Virginia Hinton, West Virginia Rockies Bancshares, Inc., National Bank of the Rockies in Kansas City February 22, 1985 Boulder, Colorado Denver, Denver, Colorado Schmid Bros. Investment Co., Financial Bancshares, Inc., St. Louis February 21, 1985 Inc., Sunset Hills, Missouri Clayton, Missouri Bank of St. Mary, St. Marys, Missouri Southshares, Inc., South Texas National Bank of Dallas February 8, 1985 Laredo, Texas Laredo, Laredo, Texas SouthTrust Corporation, The First National Bancorpora- Atlanta February 15, 1985 Birmingham, Alabama tion of the South, Opp, Alabama Southwest Bankers, Inc., San Antonio Bancshares, Inc., Dallas January 31, 1985 San Antonio, Texas San Antonio, Texas Superior Bancshares, Inc., Superior National Bank, Kansas City February 1, 1985 Kansas City, Missouri Kansas City, Missouri Thatcher Banking Corporation, The First National Bank of Sa- Kansas City February 15, 1985 Denver, Colorado lida, Salida, Colorado Third Illinois Bancorp, Inc., Johnston City State Bank, St. Louis February 22, 1985 Manchester, Missouri Johnston City, Illinois Toledo Trustcorp, Inc., Trustcorp Company, Cleveland January 28, 1985 Toledo, Ohio Columbus, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 275 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date United Bank of Colorado, Inc. United Bank of University Hills, Kansas City February 4, 1985 Denver, Colorado N.A., Denver, Colorado Valley Bancorporation, BANC WIS CORPORATION, Chicago February 15, 1985 Appleton, Wisconsin Janesville, Wisconsin Valley Bancshares, Inc., First National Bank of Marlow, Kansas City January 28, 1985 Pauls Valley, Oklahoma Mariow, Oklahoma Vidor Bancshares, Inc., Allied Vidor Bank, Dallas February 15, 1985 Beaumont, Texas Vidor, Texas Section 4 Nonbanking Reserve Effective Applicant company Bank date Atlantic Bancorporation, Florida Title & Mortgage Compa- Atlanta February 15, 1985 Jacksonville, Florida ny, Jacksonville, Florida First Alabama Bancshares, Inc. Real Estate Financing, Inc., Atlanta January 31, 1985 Montgomery, Alabama Montgomery, Alabama First Bank System, Inc., Valley View, Inc., Minneapolis February 21, 1985 Minneapolis, Minnesota Bloomington, Minnesota First State Bancorp of Eskridge Agency, Inc., Chicago February 6, 1985 Monticello, Hammond, Illinois Monticello, Illinois The Hongkong and Shanghai HSBC Holdings B.V., New York February 8, 1985 Banking Corporation, B.C.C. Amsterdam, The Netherlands, Kellett N.V., Curacoa, Marine Midland Banks, Inc., Netherlands Antilles Buffalo, New York, Marine Midland National Corporation, Buffalo, New York Unibanc-Trust Company, Chicago, Illinois How-Win Development Co. Cresco Insurance Agency, Inc., Chicago February 11, 1985 Cresco, Iowa Cresco, Iowa Worland Holding Company, indirectly engage in sale of credit Kansas City February 4, 1985 Worland, Wyoming related insurance Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Valley Bancorporation, BANCWIS Leasing Company, Chicago February 8, 1985 Appleton, Wisconsin Inc., Jeanesville, Wisconsin Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

276 Federal Reserve Bulletin • April 1985 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Nor star Bank of Upstate NY, Oneida National Bank, New York February 25, 1985 Albany, New York Utica, New York 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. Florida Department of Banking v. Board of Gover- State of Ohio, v. Board of Governors, No. 84-1270 nors, No. 84-3831 (11th Cir., filed Nov. 30, 1984). (10th Cir., filed Jan. 30, 1984). Florida Department of Banking v. Board of Gover- Ohio Deposit Guarantee Fund v. Board of Governors, nors, No. 84-3832 (11th Cir., filed Nov. 30, 1984). No. 84-1257 (10th Cir., filed Jan. 28, 1984). Citicorp v. Board of Governors, No. 84-754 (U.S., Colorado Industrial Bankers Association v. Board of filed Oct. 12, 1984). Governors, No. 84-1122 (10th Cir., filed Jan. 27, David Bolger Revocable Trust v. Board of Governors, 1984). No. 84-4141 (2nd Cir., filed Aug. 31, 1984). Financial Institutions Assurance Corp. v. Board of Citicorp v. Board of Governors, No. 84-4121 (2d Cir., Governors, No. 84-1101 (4th Cir., filed Jan. 27, filed Aug. 27, 1984). 1984). Seattle Bancorporation v. Board of Governors, No. First Bancorporation v. Board of Governors, No. 84- 84-7535 (9th Cir., filed Aug. 15, 1984). 1011 (10th Cir., filed Jan. 5, 1984). Bank of New York Co., Inc. v. Board of Governors, Dimension Financial Corporation v. Board of Gover- No. 84-4091, (2d Cir., filed June 14, 1984). nors, No. 83-2696 (10th Cir., filed Dec. 30, 1983). Citicorp v. Board of Governors, No. 84-4081 (2d Cir., Oklahoma Bankers Association v. Federal Reserve filed May 22, 1984). Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983). Lamb v. Pioneer First Federal Savings and Loan The Committee for Monetary Reform v. Board of Association, No. C84-702 (D. Wash., filed May 8, Governors, No. 84-5067 (D.C. Cir., filed June 16, 1984). 1983). Melcher v. Federal Open Market Committee, No. 84- First Bank & Trust Company v. Board of Governors, 1335 (D.D.C., filed, Apr. 30, 1984). No. 81-38 (E.D. Ky., filed Feb. 24, 1981). Florida Bankers Association v. Board of Governors, 9 to 5 Organization for Women Office Workers v. No. 84-3269 and No. 84-3270 (11th Cir., filed Apr. Board of Governors, No. 83-1171 (1st Cir., filed 20, 1984). Dec. 30, 1980). Northeast Bancorp, Inc. v. Board of Governors, No. Securities Industry Association v. Board of Gover- 84-363 (U.S., filed Mar. 27, 1984). nors, No. 80-2614 (D.C. Cir., filed Oct. 24. 1980), Huston v. Board of Governors, No. 84-1361 (8th Cir., and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). filed Mar. 20, 1984); and No. 84-1084 (8th Cir. filed A. G. Becker, Inc. v. Board of Governors, No. 80- Jan. 17, 1984). 2614 (D.C. Cir., filed Oct. 14, 1980), and No. 80- 2730 (D.C. Cir., filed Oct. 14, 1980). 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 A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT A22 Gross demand deposits—individuals, partnerships, and corporations A3 Reserves, money stock, liquid assets, and debt measures A4 Reserves of depository institutions, Reserve FINANCIAL MARKETS Bank credit A5 Reserves and borrowings—Depository A23 Commercial paper and bankers dollar institutions acceptances outstanding A5 Federal funds and repurchase agreements— A23 Prime rate charged by banks on short-term Large member banks business loans A24 Interest rates—money and capital markets A25 Stock market—Selected statistics POLICY INSTRUMENTS A26 Selected financial institutions—Selected assets and liabilities A6 Federal Reserve Bank interest rates A7 Reserve requirements of depository institutions A8 Maximum interest rates payable on time and FEDERAL FINANCE savings deposits at federally insured institutions A9 Federal Reserve open market transactions A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation FEDERAL RESERVE BANKS A30 Gross public debt of U.S. Treasury—Types and ownership A10 Condition and Federal Reserve note statements A31 U.S. government securities dealers— All Maturity distribution of loan and security Transactions holdings A32 U.S. government securities dealers—Positions and financing A33 Federal and federally sponsored credit MONETARY AND CREDIT AGGREGATES agencies—Debt outstanding A12 Aggregate reserves of depository institutions and monetary base A13 Money stock, liquid assets, and debt measures A15 Bank debits and deposit turnover A16 Loans and securities—All commercial banks COMMERCIAL BANKING INSTITUTIONS A17 Major nondeposit funds A18 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 • April 1985 SECURITIES MARKETS AND A54 U.S. reserve assets CORPORATE FINANCE A54 Foreign official assets held at Federal Reserve Banks A34 New security issues—State and local A55 Foreign branches of U.S. banks—Balance sheet governments and corporations data A35 Open-end investment companies—Net sales and A57 Selected U.S. liabilities to foreign official asset position institutions A35 Corporate profits and their distribution A36 Nonfinancial corporations—Assets and liabilities REPORTED BY BANKS IN THE UNITED STATES A36 Total nonfarm business expenditures on new plant and equipment A57 Liabilities to and claims on foreigners A37 Domestic finance companies—Assets and A58 Liabilities to foreigners liabilities and business credit A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on foreigners REAL ESTATE A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined A38 Mortgage markets domestic offices and foreign branches A39 Mortgage debt outstanding REPORTED BY NONBANKING BUSINESS CONSUMER INSTALLMENT CREDIT ENTERPRISES IN THE UNITED STATES A40 Total outstanding and net change A63 Liabilities to unaffiliated foreigners A41 Terms A64 Claims on unaffiliated foreigners FLOW OF FUNDS SECURITIES HOLDINGS AND TRANSACTIONS A42 Funds raised in U.S. credit markets A65 Foreign transactions in securities A43 Direct and indirect sources of funds to credit A66 Marketable U.S. Treasury bonds and notes— markets Foreign holdings and transactions Domestic Nonfinancial Statistics INTEREST AND EXCHANGE RATES SELECTED MEASURES A67 Discount rates of foreign central banks A67 Foreign short-term interest rates A44 Nonfinancial business activity—Selected A68 Foreign exchange rates measures A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A69 Guide to Tabular Presentation, A47 Industrial production—Indexes and gross value Statistical Releases, and Special A49 Housing and construction Tables A50 Consumer and producer prices A51 Gross national product and income A52 Personal income and saving SPECIAL TABLES A70 Assets and liabilities of U.S. branches and International Statistics agencies of foreign banks, June 30 and September 30, 1984 S UMMAR Y STA TISTICS A53 U.S. international transactions—Summary A54 U.S. foreign trade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit 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 1984' 1984r 1985 QI Q2 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Reserves of depository institutions2 1 Total 7.7 8.6 6.8 -.7 -7.6 -12.1 11.3 18.8 31.1 2 Required 5.3 10.3 6.6 -1.5 -5.8 -12.1 9.1 14.0 35.2 3 Nonborrowed 9.0 -10.8 -44.6 30.7 21.0 32.6 66.3 72.6 94.4 4 Monetary base3 9.5 7.0 7.2 3.9 2.9 -.4 7.6 8.0 8.0 Concepts of money, liquid assets, and debt4 5 Ml 6.2 6.5 4.5 3.4 5.7 -6.7 12.0 10.4 9.0 6 M2 7.2 7.1 6.8 9.0 8.1 5.5 14.0 13.2 14.1 7 M3 9.2 10.5 9.5 11.0 9.3 10.0 14.2 14.3 12.7 8 L 11.2 12.5 12.3 n.a. 10.2 n.a. n.a. n.a. n.a. 9 Debt 13.1 13.1 12.5 12.6 10.3 11.9 14.6 14.1 n.a. Nontransaction components 10 InM25 7.5 7.2 7.6 10.8 8.8 9.3 14.6 14.0 15.6 11 In M3 only6 18.2 24.9 20.3 18.9 14.1 27.5 14.8 19.0 7.3 Time and savings deposits Commercial banks 12 Savings7 -11.6 -6.7 -5.6 -10.4 -8.5 -11.4 -10.6 -11.6 -9.8 13 Small-denomination time8 9.5 13.1 13.4 6.9 9.2 4.4 4.4 7.8 -8.4 14 Large-denomination time9-10 7.4 21.8 19.3 12.3 14.1 24.2 2.3 3.2 -10.0 Thrift institutions 15 Savings7 -5.7 -.7 -6.7 -7.1 -7.1 -6.4 -6.4 -7.2 7.2 16 Small-denomination time 13.0 13.4 17.0 14.8 16.1 15.9 10.8 11.4 -1.7 17 Large-denomination time9 52.3 48.1 38.1 31.3 4.4 38.2 42.9 39.0 20.5 Debt components4 18 Federal 16.6 13.1 14.7 15.6 11.1 12.9 20.0 17.7 n.a. 19 Nonfederal 12.1 13.1 11.8 11.7 10.0 11.6 13.0 13.0 n.a. 20 Total loans and securities at commercial banks" 11.9 11.0 9.1 9.1 9.8 6.5 12.8 9.5 6.7 1. Unless otherwise noted, rates of change are calculated from average funds. Also excludes all balances held by U.S. commercial banks, money market amounts outstanding in preceding month or quarter. funds (general purpose and broker/dealer), foreign governments and commercial 2. Figures incorporate adjustments for discontinuities associated with the banks, and the U.S. government. Also subtracted is a consolidation adjustment implementation of the Monetary Control Act and other regulatory changes to that represents the estimated amount of demand deposits and vault cash held by reserve requirements. To adjust for discontinuities due to changes in reserve thrift institutions to service their time and savings deposits. requirements on reservable nondeposit liabilities, the sum of such required M3: M2 plus large-denomination time deposits and term RP liabilities (in reserves is subtracted from the actual series. Similarly, in adjusting for discontin- amounts of $100,000 or more) issued by commercial banks and thrift institutions, uities in the monetary base, required clearing balances and adjustments to term Eurodollars held by U.S. residents at foreign branches of U.S. banks compensate for float also are subtracted from the actual series. worldwide and at all banking offices in the United Kingdom and Canada, and 3. The monetary base not adjusted for discontinuities consists of total balances in both taxable and tax-exempt, institution-only money market mutual reserves plus required clearing balances and adjustments to compensate for float funds. Excludes amounts held by depository institutions, the U.S. government, at Federal Reserve Banks plus the currency component of the money stock less money market funds, and foreign banks and official institutions. Also subtracted is the amount of vault cash holdings of thrift institutions that is included in the a consolidation adjustment that represents the estimated amount of overnight RPs currency component of the money stock plus, for institutions not having required and Eurodollars held by institution-only money market mutual funds. reserve balances, the excess of current vault cash over the amount applied to L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term satisfy current reserve requirements. After the introduction of contemporaneous Treasury securities, commercial paper and bankers acceptances, net of money reserve requirements (CRR), currency and vault cash figures are measured over market mutual fund holdings of these assets. the weekly computation period ending Monday. Debt: Debt of domestic nonfinancial sectors consists of outstanding credit Before CRR, all components of the monetary base other than excess reserves market debt of the U.S. government, state and local governments, and private are seasonally adjusted as a whole, rather than by component, and excess nonfinancial sectors. Private debt consists of corporate bonds, mortgages, conreserves are added on a not seasonally adjusted basis. After CRR, the seasonally sumer credit (including bank loans), other bank loans, commercial paper, bankers adjusted series consists of seasonally adjusted total reserves, which include acceptances, and other debt instruments. The source of data on domestic excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt currency component of the money stock plus the remaining items seasonally data are on an end-of-month basis. Growth rates for debt reflect adjustments for adjusted as a whole. discontinuities over time in the levels of debt presented in other tables. 4. Composition of the money stock measures and debt is as follows: 5. Sum of overnight RPs and Eurodollars, money market fund balances Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults (general purpose and broker/dealer), MMDAs, and savings and small time of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits deposits less the estimated amount of demand deposits and vault cash held by at all commercial banks other than those due to domestic banks, the U.S. thrift institutions to service their time and savings deposit liabilities. government, and foreign banks and official institutions less cash items in the 6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents, process of collection and Federal Reserve float; and (4) other checkable deposits money market fund balances (institution-only), less a consolidation adjustment (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer that represents the estimated amount of overnight RPs and Eurodollars held by service (ATS) accounts at depository institutions, credit union share draft institution-only money market mutual funds. accounts, and demand deposits at thrift institutions. The currency and demand 7. Excludes MMDAs. deposit components exclude the estimated amount of vault cash and demand 8. Small-denomination time deposits—including retail RPs—are those issued deposits respectively held by thrift institutions to service their OCD liabilities. in amounts of less than $100,000. All IRA and Keogh accounts at commercial M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) banks and thrifts are subtracted from small time deposits. issued by all commercial banks and overnight Eurodollars issued to U.S. residents 9. Large-denomination time deposits are those issued in amounts of $100,000 by foreign branches of U.S. banks worldwide, MMDAs, savings and small- or more, excluding those booked at international banking facilities. denomination time deposits (time deposits—including retail RPs—in amounts of 10. Large-denomination time deposits at commercial banks less those held by less than $100,000), and balances in both taxable and tax-exempt general purpose money market mutual funds, depository institutions, and foreign banks and and broker/dealer money market mutual funds. Excludes individual retirement official institutions. accounts (IRA) and Keogh balances at depository institutions and money market 11. Changes calculated from figures shown in table 1.23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week ending FFFaaaccctttooorrrsss 1984 1985 1984 1985 Nov. Dec. Jan. Dec. 19 Dec. 26 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 180,040 183,925 182,763 182,683 184,004 189,291 186,493 183,752 179,274 179,901 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 154,357 159,474 159,619 158,519 160,835 162,978 163,043 161,411 156,368 157,296 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 153,519 159,010 158,152 158,519 160,835 159,641 161,033 158,645 156,368 156,858 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 838 464 1,467 0 0 3,337 2,010 2,766 0 438 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,479 8,462 8,526 8,389 8,389 8,869 8,537 8,640 8,389 8,440 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,425 8,389 8,389 8,389 8,389 8,389 8,389 8,389 8,389 8,389 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 54 73 137 0 0 480 148 251 0 51 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 4,660 3,040 1,567 3,161 1,844 3,537 2,062 1,200 784 1,167 1111100000 FFFFFllllloooooaaaaattttt 829 1,499 1,203 1,331 1,227 2,050 1,203 664 1,606 877 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 11,715 11,450 11,848 11,284 11,709 11,857 11,647 11,836 12,127 12,122 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,096 11,096 11,095 11,096 11,096 11,096 11,096 11,095 11,095 11,095 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt 4.618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 16,324r 16,388 16,453 16,389 16,403 16,418 16,434 16,448 16,462 16,474 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 178,708'' 181,720 180,036 181,412 182,813 183,904 182,785 180,592 178,689 177,310 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 490 511 526 512 513 513 518 524 528 534 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,177 3,406 3,875 3,468 3,669 4,033 3,490 3,463 3,300 4,946 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 246 247 219 251 214 255 218 211 223 212 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,676 1,961 1,484 1,778 1,878 1,901 1,884 2,074 1,612 1.619 2222200000 OOOOOttttthhhhheeeeerrrrr 450 479 441 455 563 429 420 387 574 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd 520 cccccaaaaapppppiiiiitttttaaaaalllll 6,370 6,200 6,402 6,330 6,284 6,161 6,319 6,222 6,166 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll 6,298 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 21,648 21,634 20,816 20,351 23,995 23,137 22,500 20,027 20,734 21,020 End-of-month figures Wednesday figures 1984 1985 1984 1985 Nov. Dec. Jan. Dec. 19 Dec. 26 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 182,391 186,384 177,890 184,171 184,771 195,169 182,282 185,645 178,913 179,161 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 157,770 160,850 154,555 159,237 161,529 165,965 160,714 163,153 156,030 155,418 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 157,770 159,223 154,555 159,237 161,529 158,616 160,187 158,733 156,030 155,418 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 1,627 0 0 0 7,349 527 4,420 0 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,389 8,777 8,389 8,389 8,389 9,099 8,485 8,644 8,389 8,389 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,389 8,389 8,389 8,389 8,389 8,389 8,389 8,389 8,389 8,389 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 388 0 0 0 710 96 255 0 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 5,073 3,577 2,139 3,514 2,423 6,347 1,437 1,125 764 1,910 3333322222 FFFFFllllloooooaaaaattttt -16 833 502 1,067 436 1,775 -91 584 1,661 1,120 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 11,175 12,347 12,305 11,964 11,994 11,983 11,737 12,139 12,069 12,324 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,096 11,096 11,095 11,096 11,096 11,096 11,096 11,095 11,095 11,095 3333355555 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt ............... 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 16,36(y 16,418'' 16,476 16,401 16,415' 16,432 16,446 16,460 16,474 16,476 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 179,511'' 183,796r 177,569 182,020 183,768 184,119 181,904 179,800 178,161 177,291 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 500 513 535 513 511 513 525 527 534 535 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 2,216 5,316 5,349 3,646 3,587 3,057 4,195 3,331 4,399 2,963 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 392 253 244 272 182 247 249 198 224 238 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,254 1,126 1,164 1,135 1,126 1,126 1,146 1,143 1,158 1,157 4444422222 OOOOOttttthhhhheeeeerrrrr 447 867 560 416 566 745 393 421 366 650 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,347 5,952 5,964 6,155 6,133 6,219 6,134 6,208 5,972 5,956 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 23,798 20,693 18,694 22,129 21,027 31,289 19,896 26,190 20,286 22,560 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

Money Stock and Bank Credit A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages8 RReesseerrvvee ccllaassssiiffiiccaattiioonn 1982 1983 1984 1984 1985 Dec. Dec. Dec/ July Aug. Sept. Oct. Nov. Dec.' Jan. 1 Reserve balances with Reserve Banks1 24,939-- 21,138' 21,738 19,891' 19,27c 20,143' 20,099' 20,843' 21,738 21,579 2 Total vault cash2 20,392 20,755 22,316 21,134 21,688 21,232 21,875 21,827 22,316 23,044 3 Vault cash used to satisfy reserve requirements3 . 17,049 17,908 18,958 17,579 17,995 17,900 18,413 18,958 18,958 19,547 4 Surplus vault cash4 3,343 2,847 3,358 3,555 3,694 3,333 3,462 3,358 3,358 3,497 5 Total reserves5 41,853 38,894 40,696 37,471' 37,264' 38,043' 38,512' 39,235' 40,696 41,126 6 Required reserves 41,353 38,333 39,843 36,858' 36,575' 37,415' 37,892' 38,542' 39,843 40,377 7 Excess reserve balances at Reserve Banks6 500 561 853 613' 689' 628' 620' 693' 853 749 8 Total borrowings at Reserve Banks 697 774 3,186 5,924 8,017 7,242 6,017 4,617 3,186 1,395 9 Seasonal borrowings at Reserve Banks 33 96 113 308 346 319 299 212 113 62 10 Extended credit at Reserve Banks7 187 2 2,604 5,008 7,043 6,459 5,057 3,837 2,604 1,050 Biweekly averages of daily figures for weeks ending 1984 1985 Sept. 26 Oct. 10 Oct. 24 Nov. 7 Nov. 21 Dec. 5 Dec. 19 Jan. 2 Jan. 16 Jan. 30 11 Reserve balances with Reserve Banks1 20,038 20,406 19,617 20,566 20,734 21,184 21,584 22,171 12 Total vault cash2 20,043' 20,421' 19,629' 20,577' 20,748' 21,196' 21,596' 22,129' 22,819 20,379 13 Vault cash used to satisfy reserve requirements3 . 18,232 18,221 18,784 17,949 18,661 18,320 18,547 19,701 22,089 23,828 14 Surplus vault cash4 3,290 3,350 3,545 3,456 3,456 3,385 3,120 19,703' 19,002 19,995 15 Total reserves5 38,275' 38,642' 38,412' 38,526' 39,409' 39,516' 40,143' 41,832' 41,820 40,374 16 Required reserves 37,744 37,723 37,984 37,949 38,800 38,602 39,617 40,625' 41,187 39,590 17 Excess reserve balances at Reserve Banks6 531' 9^ 428' 577' 61C 914' 526' 1,207' 634 785 18 Total borrowings at Reserve Banks 7,110 6,165 6,234 5,373 4,476 4,251 3,231 2,691 1,631 976 19 Seasonal borrowings at Reserve Banks 328 315 305 265 204 184 115 81 58 63 20 Extended credit at Reserve Banks7 6,369 5,147 5,431 4,184 3,888 3,488 2,774 2,038 1,371 593 1. Excludes required clearing balances and adjustments to compensate for computation period by institutions having required reserve balances at Federal float. Reserve Banks plus the amount of vault cash equal to required reserves during the 2. Dates refer to the maintenance periods in which the vault cash can be used to maintenance period at institutions having no required reserve balances. satisfy reserve requirements. Under contemporaneous reserve requirements, 6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy maintenance periods end 30 days after the lagged computation periods in which reserve requirements less required reserves. the balances are held. 7. Extended credit consists of borrowing at the discount window under the 3. Equal to all vault cash held during the lagged computation period by terms and conditions established for the extended credit program to help institutions having required reserve balances at Federal Reserve Banks plus the depository institutions deal with sustained liquidity pressures. Because there is amount of vault cash equal to required reserves during the maintenance period at not the same need to repay such borrowing promptly as there is with traditional institutions having no required reserve balances. short-term adjustment credit, the money market impact of extended credit is 4. Total vault cash at institutions having no required reserve balances less the similar to that of nonborrowed reserves. amount of vault cash equal to their required reserves during the maintenance 8. Before February 1984, data are prorated monthly averages of weekly period. averages; beginning February 1984, data are prorated monthly averages of 5. Total reserves not adjusted for discontinuities consist of reserve balances biweekly averages. with Federal Reserve Banks, which exclude required clearing balances and NOTE. These data also appear in the Board's H.3 (502) release. For address, see adjustments to compensate for float, plus vault cash used to satisfy reserve inside front cover. requirements. Such vault cash consists of all vault cash held during the lagged 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks1 Averages of daily figures, in millions of dollars 1984 and 1985 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee Dec. 24 Dec. 31 Jan. 7 Jan. 14' Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 One day and continuing contract 1 Commercial banks in United States 59,435 60,203 67,554 63,965 6600,,557711 56,740 6600,,112299 6611,,335599 6611,,552299 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 28,916 27,176 27,539 28,694 27,149 27,503 29,148 30,114 29,116 3 Nonbank securities dealers 5,536 5,717 5,796 6,264 7,290 8,643 8,335 7,484 8,404 4 All other 22,712 24,580 26,963 26,337 26,087 28,150 28,217 28,931 30,655 All other maturities 5 Commercial banks in United States 11,312 11,462 8,513 8,298 8,652 7,475 7,644 8,178 8,472 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 8,458 8,440 8,140 8,254 8,072 7,315 7,010 7,200 6,981 7 Nonbank securities dealers 6,338 6,190 5,847 7,475 7,503 7,038 6,936 7,534 7,507 8 All other 13,919 11,864 8,528 8,599 9,588 7,776 8,241 8,605 8,998 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 28,805' 29,370 29,603 29,034 28,438 28,298 29,664 25,960 28,748 10 Nonbank securities dealers 6,978 6,423 6,390 6,763 5,952 6,535 6,871 6,087 6,137 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

A48 Domestic Nonfinancial Statistics • April 1985 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit1 SShhoorrtt--tteerrmm aaddjjuussttmmeenntt ccrreeddiitt FFFeeedddeeerrraaalll RRReeessseeerrrvvveee aanndd sseeaassoonnaall ccrreeddiitt First 60 days Next 90 days BBBaaannnkkk of borrowing of borrowing After 150 days EEffffeeccttiivvee ddaattee ffoorr ccuurrrreenntt rraatteess Rate on Effective Previous Rate on Previous Rate on Previous Rate on Previous 2/26/85 date rate 2/26/85 rate 2/26/85 rate 2/26/85 rate Boston 8 12/24/84 8W m 9 9 W 10 10W 12/24/84 New York 12/24/84 12/24/84 Philadelphia 12/24/84 12/24/84 Cleveland 12/24/84 12/24/84 Richmond 12/24/84 12/24/84 Atlanta 12/24/84 12/24/84 Chicago 12/24/84 12/24/84 St. Louis 12/24/84 12/24/84 Minneapolis 12/24/84 12/24/84 Kansas City 12/24/84 12/24/84 D Sa a n ll a F s rancisco... 1 1 2 2 / / 2 2 4 4 / / 8 8 4 4 m m 9 9W 10 10W 1 1 2 2 / / 2 2 4 4 / / 8 8 4 4 Range of rates in recent years2 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 7W IV2 1978— July 3 7-7'/4 7V4 1981— May 5 13-14 14 1974— Apr. 25 7W-8 8 10 7V4 7V4 8 14 14 3 0 Aug. 21 73/4 73/4 Nov. 2 13-14 13 Dec. 9 73/4-8 73/4 Sept. 22 8 6 13 13 16 73/4 7% Oct. 16 8-8 W 8W Dec. 4 12 12 20 8W 8W 1975— Jan. 2 1 6 4 0 7 7 V '/4 m 4 - -7 7 3 3 / / 4 4 I 7 73 < V / / 4 4 * Nov. 1 3 8W 9W -9W 9 9 W W 11998822—— A JJuu u llyy g . 2 2 2 0 3 1 11 1 1 - V 1 l i l — V W i 1 2 1 1 1 1 1 1 V W i Feb. 5 63/4-7V4 63/4 1979—July 20 10 10 3 11 11 7 63/4 63/4 Aug. 17 10-10W 10W 16 10W IOW Mar. 10 6V4-6V4 6V4 20 10W 10W 27 lO-lOVi 10 14 6V4 6V4 Sept. 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 9 W 9W 10 12 12 Nov. 22 9-9W 9 1976— Jan. 19 5W-6 5W 26 9 9 Nov. 2 2 2 3 5V 5 i W -5W 5 S W V * 1980—Feb. 1 1 5 9 12 1 - 3 1 3 1 1 3 3 Dec. 1 1 4 5 8 8 W W - - 9 9 9 8 W 26 51/4 5l/4 May 29 12-13 13 17 8W 8W 30 12 12 1977— Aug. 30 5V4-53/4 51/4 June 13 11-12 11 1984— Apr. 9 8W-9 9 3 1 5V4-5j/4 53/4 16 11 11 13 9 9 Sept. 2 53/4 53/4 July 28 10-11 10 Nov. 21 8W-9 8W Oct. 26 6 6 29 10 10 26 8W 8W Sept. 26 11 11 Dec. 24 8 8 1978— Jan. 9 6-6W 6W Nov. 17 12 12 20 6W 6W Dec. 5 12-13 13 May 11 6W-7 7 13 13 12 7 7 In effect Feb. 26, 1985 8 8 1. Applicable to advances when exceptional circumstances or practices involve Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979,1980, only a particular depository institution and to advances when an institution is 1981, and 1982. under sustained liquidity pressures. As an alternative, for loans outstanding for In 1980 and 1981, the Federal Reserve applied a surcharge to short-term more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes adjustment credit borrowings by institutions with deposits of $500 million or more into account rates on market sources of funds, but in no case will the rate charged that had borrowed in successive weeks or in more than 4 weeks in a calendar be less than the basic rate plus one percentage point. Where credit provided to a quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, particular depository institution is anticipated to be outstanding for an unusually 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was prolonged period and in relatively large amounts, the time period in which each adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and rate under this structure is applied may be shortened. See section 201.3(b)(2) of to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Regulation A. Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for 2. Rates for short-term adjustment credit. For description and earlier data see applying the surcharge was changed from a calendar quarter to a moving 13-week the following publications of the Board of Governors: Banking and Monetary 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 TTyyppee ooff ddeeppoossiitt,, aanndd Monetary Control Act TTyyppee ooff ddeeppoossiitt,, aanndd Monetary Control Act6 ddeeppoossiitt iinntteerrvvaall ddeeppoossiitt iinntteerrvvaall55 Percent Effective date Percent Effective date Net demand2 Net transaction accounts1 & 7 12/30/76 $0-$29.8 million 3 1/1/85 12/30/76 Over $29.8 million 1122 11//11//8855 $10 million-$100 million 11 % 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 16Vi 12/30/76 By original maturity Less than ll/i years 3 10/6/83 Time and savings2,3 1 ¥2 years or more 0 10/6/83 Savings 3 3/16/67 Eurocurrency liabilities TTiimmee44 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 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 Vi 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report reduced to the extent that foreign loans and balances declined. for 1976, table 13. Under provisions of the Monetary Control Act, depository 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97institutions include commercial banks, mutual savings banks, savings and loan 320) provides that $2 million of reservable liabilities (transaction accounts, associations, credit unions, agencies and branches offoreign banks, and Edge Act nonpersonal time deposits, and Eurocurrency liabilities) of each depository corporations. institution be subject to a zero percent reserve requirement. The Board is to adjust 2. Requirement schedules are graduated, and each deposit interval applies to the amount of reservable liabilities subject to this zero percent reserve requirethat part of the deposits of each bank. Demand deposits subject to reserve ment each year for the next succeeding calendar year by 80 percent of the requirements were gross demand deposits minus cash items in process of percentage increase in the total reservable liabilities of all depository institutions, collection and demand balances due from domestic banks. measured on an annual basis as of June 30. No corresponding adjustment is to be The Federal Reserve Act as amended through 1978 specified different ranges of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the requirements for reserve city banks and for other banks. Reserve cities were exemption was established at $2.1 million. Effective with the reserve maintenance designated under a criterion adopted effective Nov. 9, 1972, by which a bank period beginning Jan. 1, 1985, the amount of the exemption is $2.4 million. In having net demand deposits of more than $400 million was considered to have the determining the reserve requirements of a depository institution, the exemption character of business of a reserve city bank. The presence of the head office of shall apply in the following order: (1) nonpersonal money market deposit accounts such a bank constituted designation of that place as a reserve city. Cities in which (MMDAs) authorized under 12 CFR section 1204.122; (2) net NOW accounts there were Federal Reserve Banks or branches were also reserve cities. Any (NOW accounts less allowable deductions); (3) net other transaction accounts; banks having net demand deposits of $400 million or less were considered to have and (4) nonpersonal time deposits or Eurocurrency liabilities starting with those the character of business of banks outside of reserve cities and were permitted to with the highest reserve ratio. With respect to NOW accounts and other maintain reserves at ratios set for banks not in reserve cities. transaction accounts, the exemption applies only to such accounts that would be Effective Aug. 24,1978, the Regulation M reserve requirements on net balances subject to a 3 percent reserve requirement. due from domestic banks to their foreign branches and on deposits that foreign 6. For nonmember banks and thrift institutions that were not members of the branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3, respectively. The Regulation D reserve requirement of borrowings from unrelated 1987. For banks that were members on or after July 1, 1979, but withdrew on or banks abroad was also reduced to zero from 4 percent. before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends Effective with the reserve computation period beginning Nov. 16, 1978, on Oct. 24, 1985. For existing member banks the phase-in period of about three domestic deposits of Edge corporations were subject to the same reserve years was completed on Feb. 2, 1984. All new institutions will have a two-year requirements as deposits of member banks. phase-in beginning with the date that they open for business, except for those 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as institutions that have total reservable liabilities of $50 million or more. Christmas and vacation club accounts were subject to the same requirements as 7. Transaction accounts include all deposits on which the account holder is savings deposits. permitted to make withdrawals by negotiable or transferable instruments, pay- The average reserve requirement on savings and other time deposits before ment orders of withdrawal, and telephone and preauthorized transfers (in excess implementation of the Monetary Control Act had to be at least 3 percent, the of three per month) for the purpose of making payments to third persons or others. minimum specified by law. However, MMDAs and similar accounts offered by institutions not subject to the 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent rules of the Depository Institutions Deregulation Committee (DIDC) that permit was imposed on large time deposits of $100,000 or more, obligations of affiliates, no more than six preauthorized, automatic, or other transfers per month of which and ineligible acceptances. This supplementary requirement was eliminated with no more than three can be checks—are not transaction accounts (such accounts the maintenance period beginning July 24, 1980. are savings deposits subject to time deposit reserve requirements.) Effective with the reserve maintenance period beginning Oct. 25, 1979, a 8. The Monetary Control Act of 1980 requires that the amount of transaction marginal reserve requirement of 8 percent was added to managed liabilities in accounts against which the 3 percent reserve requirement applies be modified excess of a base amount. This marginal requirement was increased to 10 percent annually by 80 percent of the percentage increase in transaction accounts held by beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and all depository institutions determined as of June 30 each year. Effective Dec. 31, was eliminated beginning July 24, 1980. Managed liabilities are defined as large 1981, the amount was increased accordingly from $25 million to $26 million; time deposits, Eurodollar borrowings, repurchase agreements against U.S. effective Dec. 30, 1982, to $26.3 million; effective Dec. 29, 1983, to $28.9 million; government and federal agency securities, federal funds borrowings from non- and effective Jan. 1, 1985, to $29.8 million. member institutions, and certain other obligations. In general, the base for the 9. In general, nonpersonal time deposits are time deposits, including savings marginal reserve requirement was originally the greater of (a) $100 million or (b) deposits, that are not transaction accounts and in which a beneficial interest is the average amount of the managed liabilities held by a member bank, Edge held by a depositor that is not a natural person. Also included are certain corporation, or family of U.S. branches and agencies of a foreign bank for the two transferable time deposits held by natural persons, and certain obligations issued reserve computation periods ending Sept. 26, 1979. For the computation period to depository institution offices located outside the United States. For details, see beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease section 204.2 of Regulation D. in an institution's U.S. office gross loans to foreigners and gross balances due from foreign offices of other institutions between the base period (Sept. 13-26, NOTE. Required reserves must be held in the form of deposits with Federal 1979) and the week ending Mar. 12, 1980, whichever was greater. For the Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a computation period beginning May 29, 1980, the base was increased by lxh Federal Reserve Bank indirectly on a pass-through basis with certain approved percent above the base used to calculate the marginal reserve in the statement institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 Percent per annum Savings and loan associations and Commercial banks mutual savings banks (thrift institutions)1 In effect Feb. 28, 1985 In effect Feb. 28, 1985 Type of deposit Percent Effective date Effective date 2 1 N Sa e v g i o n t g ia s b le order of withdrawal accounts 5 S 1/ V 2 * 12/ 1 3 / 1 1 / / 8 8 0 4 5 5 l V /2 * 12 7 /3 /1 1 / / 7 8 9 0 3 Negotiable order of withdrawal accounts of $1,000 or more2 1/5/83 1/5/83 4 Money market deposit account2 (3) 12/14/82 (3) 12/14/82 5 T 7- im 31 e d a a c y c s o u o n f t s l es b s y th m an a tu $ r 1 i , t 0 y 0 04 5Yi 1/1/84 5 Vi 9/1/82 6 7-31 days of $1,000 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 the minimum denomination and average maintenance balance requirements was by commercial banks and thrift institutions on various categories of deposits were lowered to $1,000. No minimum maturity period is required for this account, but removed. For information regarding previous interest rate ceilings on all catego- depository institutions must reserve the right to require seven days notice before ries of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the withdrawals. When the average balance is less than $1,000, the account is subject Federal Home Loan Bank Board Journal, and the Annual Report of the Federal to the maximum ceiling rate of interest for NOW accounts; compliance with the Deposit Insurance Corporation before November 1983. average balance requirement may be determined over a period of one month. 2. Effective Dec. 1, 1983, IRA/Keogh (HR10) Plan accounts are not subject to Depository institutions may not guarantee a rate of interest for this account for a minimum deposit requirements. Effective Jan. 1, 1985, the minimum denomina- period longer than one month or condition the payment of a rate on a requirement tion requirement was lowered from $2,500 to $1,000. that the funds remain on deposit for longer than one month. 3. Effective Dec. 14, 1982, depository institutions are authorized to offer a new 4. Effective Jan. 1, 1985, the minimum denomination requirement was lowered account with a required initial balance of $2,500 and an average maintenance from $2,500 to $1,000. Deposits of less than $1,000 issued to governmental units balance of $2,500 not subject to interest rate restrictions. Effective Jan. 1, 1985, continue to be subject to an interest rate ceiling of 8 percent. 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 1984 TTyyppee ooff ttrraannssaaccttiioonn 11998811 11998822 11998833 June July Aug. Sept. Oct. Nov. Dec. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 13,899 17,067 18,888 801 0 187 3,249 550077 4,463 33,,441100 2 Gross sales 6,746 8,369 3,420 0 897 1,491 71 1,300 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 1,816 3,000 2,400 801 600 800 0 2,200 0 0 Others within 1 year 5 Gross purchases 317 312 484 0 0 0 600 0 146 118822 6 Gross sales 23 0 0 0 0 0 0 0 0 0 7 Maturity shift 13,794 17,295 18,887 1,069 428 3,811 872 896 1,348 771 8 Exchange -12,869 -14,164 -16,553 0 -2,606 -2,274 0 -1,497 -3,363 -966 9 Redemptions 0 0 87 0 0 0 0 0 0 0 I to 5 years 10 Gross purchases 1,702 1,797 1,896 0 0 0 0 00 883300 00 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -10,299 -14,524 -15,533 -1,069 -345 -3,811 -872 -896 594 -771 13 Exchange 10,117 11,804 11,641 0 2,606 1,443 0 1,497 1,763 966 5 to 10 years 14 Gross purchases 393 388 890 00 00 0 00 00 333355 00 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shift -3,495 -2,172 -2,450 0 -83 52 0 0 -1,893 0 17 Exchange 1,500 2,128 2,950 0 0 500 0 0 850 0 Over 10 years 18 Gross purchases 379 307 383 00 00 0 00 00 116644 00 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 -601 -904 0 0 -52 0 0 -49 0 21 Exchange 1,253 234 1,962 0 0 332 0 0 750 0 All maturities 22 Gross purchases 16,690 19,870 22,540 801 0 0 3,849 507 5,938 3,591 23 Gross sales 6,769 8,369 3,420 0 897 187 71 1,300 0 0 24 Redemptions 1,816 3,000 2,487 0 600 800 0 2,200 0 0 Matched transactions 25 Gross sales 589,312 543,804 578,591 61,017 81,799 79,087 52,893 89,689 51,904 63,674 26 Gross purchases 589,647 543,173 576,908 61,331 81,143 78,842 55,776 85,884 55,516 61,537 Repurchase agreements 27 Gross purchases 79,920 130,774 105,971 23,298 14,830 4,992 26,040 0 12,063 33,,888888 28 Gross sales 78,733 130,286 108,291 26,460 14,830 166 30,867 0 12,063 2,261 29 Net change in U.S. government securities 9,626 8,358 12,631 -2,047 -2,154 2,478 1,835 -6,798 9,549 3,080 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 494 0 0 0 0 0 0 0 0 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 108 189 292 15 1 5 1 14 90 0 Repurchase agreements 33 Gross purchases 13,320 18,957 8,833 1,819 958 381 3,743 0 698 550066 34 Gross sales 13,576 18,638 9,213 2,117 958 12 4,112 0 698 119 35 Net change in federal agency obligations 130 130 -672 -313 -1 364 -370 -14 -90 388 BANKERS ACCEPTANCES 36 Repurchase agreements, net -582 1,285 -1,062 -426 0 0 0 0 0 0 37 Total net change in System Open Market Account 9,175 9,773 10,897 -2,786 -2,155 2,842 11,,446655 --66,,881111 99,,445599 33,,446688 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

A48 Domestic Nonfinancial Statistics • April 1985 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1985 1984 1985 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Nov. Dec. Jan. Consolidated condition statement ASSETS 1 Gold certificate account 11,096 11,096 11,095 11,095 11,095 11,096 11,096 11,095 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 Coin 430 434 457 476 495 451 436 497 Loans 4 To depository institutions 6,347 1,437 1,125 764 1,910 5,073 3,577 2,139 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 00 00 00 00 00 00 00 Federal agency obligations 7 Bought outright 8,389 8,389 8,389 88,,338899 8,389 88,,338899 88,,338899 88,,338899 8 Held under repurchase agreements 710 96 255 0 0 0 388 0 U.S. government securities Bought outright 9 Bills 70,428 71,999 70,545 67,942 67,330 69,764 7711,,003355 66,467 10 Notes 65,237 65,237 65,237 65,137 65,137 65,055 65,237 65,137 11 Bonds 22,951 22,951 22,951 22,951 22,951 22,951 22,951 22,951 12 Total bought outright1 158,616 160,187 158,733 156,030 155,418 157,770 159,223 154,555 13 Held under repurchase agreements 7,349 527 4,420 0 0 0 1,627 0 14 Total U.S. government securities 165,965 160,714 163,153 156,030 155,418 157,770 160,850 154,555 15 Total loans and securities 181,411 170,636 172,922 165,183 165,717 171,232 173,204 165,083 16 Cash items in process of collection 8,209 6,367 8,547 8,859 7,205 6,237 5,498 6,161 17 Bank premises 569 570 570 563 570 565 568 570 Other assets 18 Denominated in foreign currencies2 3,599 3,601 3,604 3,613 3,642 3,648 33,,559977 3,631 19 All other3 7,815 7,566 7,965 7,893 8,112 6,962 8,167 8,104 20 Total assets 217,747 204,888 209,778 202,300 201,454 204,809 207,184 199,759 LIABILITIES 21 Federal Reserve notes 168,630 166,417 164,324 162,697 161,845 164,102 168,327 162,125 Deposits 22 To depository institutions 32,415 21,042 27,333 21,444 23,717 25,052 2211,,881188 19,858 23 U.S. Treasury—General account 3,057 4,195 3,331 4,399 2,963 2,216 5,316 5,349 24 Foreign—Official accounts 247 249 198 224 238 392 253 244 25 Other 745 393 421 366 650 447 865 560 26 Total deposits 36,464 25,879 31,283 26,433 27,568 28,107 28,252 26,011 27 Deferred availability cash items 6,434 6,458 7,963 7,198 6,085 6,253 4,653 5,659 28 Other liabilities and accrued dividends4 2,874 2,564 2,625 2,366 2,359 2,682 2,700 2,355 29 Total liabilities 214,402 201,318 206,195 198,694 197,857 201,144 203,932 196,150 CAPITAL ACCOUNTS 30 Capital paid in 1,627 1,629 1,630 1,635 1,635 1,620 1,626 1,639 31 Surplus 1,626 1,626 1,626 1,626 1,626 1,465 1,626 1,626 32 Other capital accounts 92 315 327 345 336 580 0 344 33 Total liabilities and capital accounts 217,747 204,888 209,778 202,300 201,454 204,809 207,184 199,759 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 120,283 115,985 118,182 116,635 116,856 117,949 122,134 116,649 Federal Reserve note statement 35 Federal Reserve notes outstanding 193,687 193,632 193,845 193,812 193,598 193,727 193,867 193,440 36 LESS: Held by bank 25,057 27,215 29,521 31,115 31,753 29,625 25,540 31,315 37 Federal Reserve notes, net 168,630 166,417 164,324 162,697 161,845 164,102 168,327 162,125 38 G Co o l l l d a t c e e r r a t l i f h ic e a ld te a a g c a c i o n u st n t notes net: 11,096 11,0% 11,095 11,095 11,095 11,096 11,096 11,095 39 Special drawing rights certificate account 4,618 0 4,6180 4,618 0 4,6180 4,6180 4,618 0 4,6180 4,618 0 40 Other eligible assets 41 U.S. government and agency securities ., 152,916 150,703 148,611 146,984 146,132 148,388 152,613 146,412 42 Total collateral 168,630 166,417 164,324 162,697 161,845 164,102 168,327 162,125 1. Includes securities loaned—fully guaranteed by U.S. government securities 4. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes (if any) securities sold and market exchange rates of foreign-exchange commitments. scheduled to be bought back under matched sale-purchase transactions. 2. Assets shown in this line are revalued monthly at market exchange rates. NOTE: Some of these data also appear in the Board's H.4.1 (503) release. For 3. Includes special investment account at Chicago of Treasury bills maturing address, see inside front cover. within 90 days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1985 1984 1985 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Nov. 30 Dec. 31 Jan. 31 1 Loans—Total 6,347 1,437 1,125 764 1,910 5,073 3,577 2,139 2 Within 15 days 6,317 1,399 1,100 752 1,905 5,004 3,547 2,125 3 16 days to 90 days 30 38 25 12 5 69 30 14 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 0 0 0 0 6 Within 15 days 0 0 0 0 0 0 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 165,965 160,714 163,153 156,030 155,418 157,770 160,850 154,555 10 Within 15 days1 10,565 5,763 8,434 3,994 3,479 4,892 4,254 3,249 11 16 days to 90 days 36,200 35,586 35,476 35,296 34,846 34,871 37,396 32,498 12 91 days to 1 year 47,795 47,960 47,838 45,435 45,788 46,797 47,795 47,474 13 Over 1 year to 5 years 37,072 37,072 37,072 37,072 37,072 36,877 37,072 37,101 14 Over 5 years to 10 years 14,100 14,100 14,100 14,000 14,000 14,100 14,100 14,000 15 Over 10 years 20,233 20,233 20,233 20,233 20,233 20,233 20,233 20,233 16 Federal agency obligations—Total 9,099 8,485 8,644 8,389 8,389 8,389 8,777 8,389 17 Within 15 days' 760 171 288 89 97 226 575 97 18 16 days to 90 days 643 618 630 625 681 473 521 755 19 91 days to 1 year 1,701 1,701 1,681 1,702 1,718 1,727 1,665 1,644 20 Over 1 year to 5 years 4,329 4,329 4,367 4,328 4,248 4,334 4,350 4,248 21 Over 5 years to 10 years 1,267 1,267 1,279 1,246 1,246 1,230 1,267 1,246 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

A48 Domestic Nonfinancial Statistics • April 1985 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1984' 1985 IItteemm DD 1199 ee 88 cc 11 // DD 1199 ee 88 cc 22 // DD 1199 ee 88 cc 33 .. DD 1199 ee 88 cc 44 // June July Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS11 11 TToottaall rreesseerrvveess22 32.10 34.28 36.14 38.71 38.29 38.24 38.39 38.14 37.76 38.11 38.71 39.72 22 NNoonnbboorrrroowweedd rreesseerrvveess 31.46 33.65 35.36 35.52 34.99 32.32 30.37 30.90 31.74 33.50 35.52 38.32 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt33 31.61 33.83 35.37 38.13 36.86 37.32 37.41 37.36 36.80 37.33 38.13 39.37 44 RReeqquuiirreedd rreesseerrvveess 31.78 33.78 35.58 37.86 37.52 37.63 37.70 37.52 37.14 37.42 37.86 38.97 55 MMoonneettaarryy bbaassee44 158.10 170.14 185.49 198.74 193.98 194.62 195.78 196.25 196.18 197.43 198.74 200.07 Not seasonally adjusted 6 Total reserves2 32.82 35.01 36.86 40.13 37.80 37.85 37.70 37.88 37.95 38.69 40.13 40.71 7 Nonborrowed reserves 32.18 34.37 36.09 36.94 34.50 31.93 29.68 30.64 31.94 34.07 36.94 39.31 8 Nonborrowed reserves plus extended credit3 32.33 34.56 36.09 39.55 36.37 36.94 36.72 37.10 36.99 37.91 39.55 40.36 9 Required reserves 32.50 34.51 36.30 39.28 37.03 37.24 37.01 37.25 37.33 37.99 39.28 39.% 10 Monetary base4 160.94 173.17 188.76 202.02 194.25 195.90 196.11 196.07 196.13 198.22 202.02 200.93 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.92 41.85 38.89 40.70 37.53 37.47 37.26 38.04 38.51 39.23 40.70 41.13 12 Nonborrowed reserves 41.29 41.22 38.12 37.51 34.23 31.55 29.25 30.80 32.50 34.62 37.51 39.73 13 Nonborrowed reserves plus extended credit3 41.44 41.41 38.12 40.09 36.23 36.39 36.29 37.29 37.37 38.54 40.09 40.88 14 Required reserves 41.61 41.35 38.33 39.84 36.75 36.86 36.57 37.41 37.89 38.54 39.84 40.38 15 Monetary base4 170.47 180.52 192.36 202.59 193.97 195.52 195.68 196.23 196.69 198.77 202.59 201.35 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 NOTE. Latest monthly and biweekly figures are available from the Board's short-term adjustment credit, the money market impact of extended credit is H.3(502) statistical release. Historical data and estimates of the impact on similar to that of nonborrowed reserves. required reserves of changes in reserve requirements are available from the 4. The monetary base not adjusted for discontinuities consists of total reserves Banking Section, Division of Research and Statistics, Board of Governors of the plus required clearing balances and adjustments to compensate for float at Federal Federal Reserve System, Washington, D.C. 20551. Reserve Banks and the currency component of the money stock less the amount Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Billions of dollars, averages of daily figures 1984r 1985 1981 1982 1983 1984 DDeecc.. DDeecc.. DDeecc.. DDeecc// OOcctt.. NNoovv.. DDeecc.. JJaann.. Seasonally adjusted 1 Ml 441.9 480.5 525.4 558.7 548.4 553.9 558.7 563.1 7 M2 1,796.6 1,965.3 2,196.3 2,371.7 2,318.7 2,345.9 2,371.7 2,400.1 M3 2,236.7 2,460.3 2,710.4 2,996.1 2,925.5 2,960.1 2,9%. 1 3,027.9 4 L 2,598.4 2,868.7 3,178.7 n.a. n.a. n.a. n.a. n.a. 5 Debt2 4,323.8 4,710.1 5,224.6 n.a. n.a. 5,871.6 n.a. n.a. Ml components 6 Currency2 124.0 134.1 148.0 158.7 157.1 157.9 158.7 159.4 7 Travelers checks3 4.3 4.3 4.9 5.2 5.0 5.1 5.2 5.3 8 Demand deposits4 236.2 239.7 243.7 248.6 244.5 246.8 248.6 249.1 9 Other checkable deposits5 77.4 102.4 128.9 146.2 141.9 144.1 146.2 149.3 Nontransactions components 10 In M26 1,354.6 1,484.8 1,670.9 1,812.9 1,770.3 1,791.9 1,812.9 1,837.0 11 In M3 only7 440.2 495.0 514.1 624.5 606.8 614.3 624.5 627.9 Savings deposits9 12 Commercial Banks 159.7 164.9 134.6 122.6 124.9 123.8 122.6 121.7 13 Thrift institutions 186.1 197.2 178.2 165.6 167.5 166.6 165.6 166.7 Small denomination time deposits9 14 Commerical Banks 349.6 382.2 353.1 387.0 383.1 384.5 387.0 384.5 15 Thrift institutions 477.7 474.7 440.0 498.1 489.0 493.4 498.1 497.4 Money market mutual funds 16 General purpose and broker/dealer 150.6 185.2 138.2 168.1 155.7 162.2 168.1 172.8 17 Institution-only 36.2 48.4 43.2 62.7 52.2 58.3 62.7 65.0 Large denomination time deposits10 18 Commercial Banks" 247.3 261.8 225.1 264.4 263.2 263.7 264.4 262.1 19 Thrift institutions 54.3 66.1 100.4 152.4 142.5 147.6 152.4 155.0 Debt components 20 Federal debt 830.1 991.4 1,173.1 n.a. 1,323.1 1,345.6 n.a. n.a. 21 Non-federal debt 3,493.7 3,718.7 4,051.6 n.a. 4,475.8 4,526.1 n.a. n.a. Not seasonally adjusted n Ml 452.3 491.9 537.9' 570.7 548.3 556.1 570.7 568.7 M2 1,798.7 1,967.4 2,198.1 2,376.7 2,316.1 2,344.0 2,376.7 2,405.4 24 M3 2,242.7 2,466.6 2,716.5 2,9%. 1 2,925.5 2,960.1 2,9%. 1 3,027.9 25 L 2,605.6 2,876.5 3,189.4 n.a. n.a. n.a. n.a. n.a. 26 Debt2 4,323.8 4,710.1 5,218.5 n.a. 5,791.8 5,861.8 n.a. n.a. Ml components 27 Currency2 126.1 136.4 150.5 160.9 156.7 158.7 160.9 158.4 28 Travelers checks3 4.1 4.1 4.6 4.9 5.0 4.8 4.9 4.8 29 Demand deposits4 243.6 247.3 251.6 257.4 245.8 248.9 257.4 254.9 30 Other checkable deposits5 78.5 104.1 131.3 147.5 140.8 143.6 147.5 150.5 Nontransactions components <1 M26 1,346.3 1,475.5 1,660.2 1,805.9 1,767.7 1,788.0 1,805.9 1,836.7 32 M3 only7 444.1 499.2 518.4 626.7 605.0 616.6 626.7 626.3 Money market deposit accounts 33 Commercial banks n.a. 26.3 230.0 267.1 248.2 257.1 267.1 280.5 34 Thrift institutions n.a. 16.6 145.9 148.0 144.0 145.5 148.0 153.3 Savings deposits8 Commercial Banks 157.5 162.1 132.0 121.4 124.3 122.7 121.4 121.2 36 Thrift institutions 184.7 195.5 176.5 164.5 167.2 165.8 164.5 165.5 Small denomination time deposits9 37 Commercial Banks 347.7 380.1 351.0 387.6 386.2 387.1 387.6 386.1 38 Thrift institutions 475.6 472.4 437.6 498.8 492.6 496.8 498.8 502.2 Money market mutual funds 39 General purpose and broker/dealer 150.6 185.2 138.2 168.1 155.7 162.2 168.1 172.8 40 Institution-only 36.2 48.4 43.2 62.7 52.2 58.3 62.7 65.0 Large denomination time deposits10 41 Commercial Banks" 252.1 266.2 228.5 265.9 264.1 263.6 265.8 262.9 42 Thrift institutions 54.3 66.2 100.7 151.6 143.6 148.1 151.6 154.5 Debt components 43 Federal debt 830.1 991.4 1,170.2 n.a. 1,323.0 1,343.0 n.a. n.a. 44 Non-federal debt 3,943.7 3,718.7 4,048.3 n.a. 4,468.8 4,518.8 n.a. n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 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, con- NOTE: Latest monthly and weekly figures are available from the Board's H.6 sumer credit (including bank loans), other bank loans, commercial paper, bankers (508) release. Historical data are available from the Banking Section, Division of acceptances, and other debt instruments. The source of data on domestic Research and Statistics, Board of Governors of the Federal Reserve System, nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt Washington, D.C. 20551. data are on an end-of-month basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 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 July Aug. Sept. Oct. Nov. Dec. DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 80,858.7 90,914.4 109,642.3 128,299.3 128,141.9 124,117.4 142,907.3 134,016.3 137,512.0 2 Major New York City banks 34,108.1 37,932.9 47,769.4 55,340.6 57,096.5 55,591.4 67,488.7 60,992.8 62,341.0 3 Other banks 46,966.5 52,981.5 61,873.1 72,958.7 71,045.4 68,526.0 75,418.5 73,023.5 75,171.0 4 ATS-NOW accounts3 761.0 1,036.2 1,405.5 1,658.9 1,851.9 1,640.6 1,698.6 1,678.5 1,677.5 5 Savings deposits4 679.6 720.3 741.4 682.4 694.5 566.8 597.2 579.1 486.0 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 285.8 324.2 379.7 433.0 436.7 424.5 486.8 448.2 453.4 7 Major New York City banks 1,116.7 1,287.6 1,528.0 1,774.3 1,834.6 1,822.5 2,199.6 1,917.5 1,903.0 8 Other banks 185.9 211.1 240.9 275.2 270.9 261.7 286.9 273.3 277.8 9 ATS-NOW accounts3 14.4 14.5 15.6 16.6 18.3 16.2 16.9 16.5 16.3 10 Savings deposits4 4.1 4.5 5.4 5.5 5.6 4.6 4.9 4.7 4.0 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 81,197.9 91,031.8 109,517.6 124,604.3 133,844.2 120,120.8 141,249.5 131,791.6 140,166.0 12 Major New York City banks 34,032.0 38,001.0 47,707.4 54,060.5 59,743.8 54,329.0 64,790.2 61,148.7 64,498.9 13 Other banks 47,165.9 53,030.9 64,310.2 70,543.8 74,100.3 65,791.8 76,459.2 70,643.0 75,667.1 14 ATS-NOW accounts3 737.6 1,027.1 1,397.0 1,598.5 1,629.4 1,523.7 1,665.7 1,524.8 1,625.4 15 MMDA5 567.4 891.7 888.2 821.6 901.1 819.7 899.7 16 Savings deposits4 672.9 720.0 742.0 686.3 680.3 543.1 616.2 538.7 470.6 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 286.4 325.0 379.9 418.1 465.7 408.9 479.9 438.8 447.1 18 Major New York City banks 1,114.2 1,295.7 1,510.0 1,738.1 2,008.0 1,786.4 2,120.7 1,944.6 1,910.8 19 Other banks 186.2 211.5 240.5 264.3 287.6 249.8 289.9 262.7 270.5 20 ATS-NOW accounts3 14.0 14.4 15.5 16.0 16.4 15.2 16.6 14.9 15.4 21 MMDA5 2.8 3.7 3.7 3.4 3.7 3.2 3.4 22 Savings deposits4 4.1 4.5 5.4 5.4 5.5 4.5 5.1 4.4 3.9 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 These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • April 1985 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars ; averages of Wednesday figures 1984 1985 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.' Jan. Seasonally adjusted 1 Total loans and securities2 1,584.1 1,599.6 1,612.9 1,629.8 1,636.6 1,652.6 1,662.1 1,674.9 1,682.8' 1,700.7' 1,714.1 1,723.7 2 U.S. government securities 260.7 261.0 257.6 257.3 253.7 256.4 257.1 258.0 257.0 259.4 260.2 259.9 J Other securities 142.2 142.3 142.1 140.5 139.7 139.5 140.8 141.9 141.5 141.6 140.3 142.9 4 Total loans and leases2 1,181.2 1,196.3 1,213.2 1,232.0 1,243.2 1,256.7 1,264.2 1,275.0 1,284.3' 1,299.7' 1,313.5 1,320.9 5 Commercial and industrial 421.7 432.2 438.5 448.0 452.2 455.0 458.1 460.0 463.0' 467^ 468.3 469.0 6 Bankers acceptances held3.. 5.4 5.6 5.2 5.8 5.8 6.5 6.1 5.7 5.9 6.2 5.4 5.1 7 Other commercial and industrial 416.4 426.6 433.2 442.2 446.3 448.5 451.9 454.3 457.1' 461.7' 462.9 463.8 8 U.S. addressees4 404.2 414.3 420.8 430.2 434.7 436.8 440.3 443.2 446.5' 451.4' 453.3 454.2 9 Non-U.S. addressees4 12.2 12.3 12.4 12.0 11.7 11.6 11.6 11.1 10.6 10.3 9.6 9.7 10 Real estate 338.5 342.9 347.2 350.7 354.7 358.3 361.2 364.8 367.7 371.3 374.9 377.6 11 Individual 218.1 221.1 224.9 229.0 233.0 236.3 238.5 241.3 243.5 246.8 251.1 254.8 12 Security 33.7 29.5 29.6 30.1 28.5 28.0 26.1 28.8 30.3 30.2 3311..44 3311..99 13 Nonbank financial institutions 30.6 30.2' 30.6 31.4 31.4 31.4 30.9 31.3 31.1' 31.2 31.5 31.1 14 Agricultural 39.7 40.0 40.1 40.3 40.4' 40.6 40.5 40.7 40.6' 40.5' 4400..33 40.2 15 State and political subdivisions 34.6 35.5 36.7 37.4 38.7 40.1 40.9 41.5 41.0 41.8 43.7 46.5 16 Foreign banks 13.4 12.8 12.7 12.3 12.3 12.2 12.0 11.5 11.4 11.7 11.4 11.3 17 Foreign official institutions ... 9.0 9.1 8.9 8.9 8.9 9.3 9.4 9.0 8.6 8.1 7.7 7.6 18 Lease financing receivables... 13.8 13.8 14.0 14.1 14.3 14.5 14.8 15.0 15.1 15.2 15.5 15.6 19 All other loans 28.1 29.1 30.1 29.8r 28.9 31.1'" 31.9 31.3 32.1' 35.1' 37.6 35.3 Not seasonally adjusted 20 Total loans and securities2 1,582.5 1,596.5 1,613.7 1,626.6 1,637.6 1,646.7 1,656.1 1,673.3 1,684.0' 1,701.5' 1,725.1 1,731.7 21 U.S. government securities 261.6 263.1 263.0 259.4 257.2 256.2 255.5 255.8 254.1 255.3 256.9 259.8 l 2 i 2 T O o th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,1 1 7 4 8 2 . . 5 4 1,1 1 9 4 0 2 . . 9 5 1,2 1 0 4 9 1 . . 0 8 1,2 1 2 4 6 1 . . 1 1 1,2 1 4 3 1 9 . . 0 4 1,2 1 5 3 2 8 . . 4 2 1,2 1 6 4 0 0 . . 2 4 1,2 1 7 4 6 1 . . 3 3 1,2 1 8 4 9 0. . 9 0 ' 1,3 14 0 1 4 . . 7 6 ' 1,3 1 2 4 6 2 . . 3 0 1,3 1 2 4 8 3 . . 1 7 2 2 4 5 Co B m a m nk e e rc rs ia l a c a c n e d p t i a n n d c u e s s t ri h a e l ld3.. 421 5 . . 3 3 43 5 1. . 8 5 43 5 8 . . 3 7 44 5 6 . . 7 8 45 66 0. .. 9 00 45 66 4 .. . 44 3 45 55 6. .. 1 99 45 55 9 .. . 66 9 46 5 3 . . 8 8 ' 46 66 8 .. . 11 2 ' 471 55 . .. 3 88 47 55 0 .. . 22 8 26 Other commercial and 22 2 77 8 N U o . i S n n . d - U u ad s . t S d r . i r a e a l s d s d ee re s4 s sees4 4 40 1 1 4 6 1 . . . 3 0 7 4 41 2 1 4 6 1 . . . 4 3 8 4 4 3 2 1 3 1 1 . . . 4 7 7 4 4 4 2 1 1 9 1 . . . 0 5 6 4 43 4 1 3 4 1 . . . 5 8 3 4 43 4 1 6 7 1 . . . 2 9 7 4 4 5 3 1 0 8 1 . . . 1 5 6 4 44 5 1 3 4 1 . . . 0 3 3 4 4 5 4 1 8 7 1. . . 1 0 0 ' ' 4 45 1 6 1 1 2 . . ^ 0 1 ' 4 4 6 5 1 5 4 0 . . . 5 9 6 4 45 6 9 5 5 . . . 8 8 6 29 Real estate 338.1 341.9 346.0 349.8 354.1 357.7 361.4 365.9 368.9 372.3 375.5 378.2 30 Individual 217.8 219.3 222.9 227.2 231.3 234.7 238.3 242.4 245.3 248.5 254.2 257.3 31 Security 32.7 29.0 29.5 28.9 28.5 26.6 25.4 27.7 30.1 31.7 35.2 32.9 32 Nonbank financial 30.4' 30.2r 30.7 31.2 31.4 31.4' 31.0 31.4 31.1 31.1 3311..66 3311..22 institutions 33 Agricultural 38.9 39.0 39.4 40.2 40.9 41.3' 41.4 41.5 41.2' 40^ 40.0 39.6 34 State and political 34.6 35.5 36.7 37.4 38.7 40.1 40.9 41.5 4411..00 41.8 4433..77 4466..55 subdivisions 35 Foreign banks 13.4 12.6 12.3 12.0 11.8 12.0 11.7 11.7 11.8 1122..00 12.0 11.6 36 Foreign official institutions ... 9.0 9.1 8.9 8.9 8.9 9.3 9.4 9.0 8.6 88..11 7.7 7.6 37 Lease financing receivables... 13.9 14.0 14.0 14.1 14.3 14.4 14.7 14.9 15.0 15.1 15.4 15.8 38 All other loans 28.3' 28.5r 29.7 29.7 30.3 30.5 30.C 30.7 32.3' 35.2' 39.6 36.5 1. Data are prorated averages of Wednesday estimates for domestically char- 2. Excludes loans to commercial banks in the United States. tered insured banks, based on weekly sample reports and quarterly universe 3. Includes nonfinancial commercial paper held. reports. For foreign-related institutions, data are averages of month-end estimates 4. United States includes the 50 states and the District of Columbia. based on weekly reports from large U.S. agencies and branches and quarterly NOTE. These data also appear in the Board's G.7 (407) release. For address, see reports from all U.S. agencies and branches, New York investment companies inside front cover. majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1984R source Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total nondeposit funds 1 Seasonally adjusted2 88.0 93.9 98.9 102.1 109.1 99.4 100.3 103.5 106.5 107.9 112.0 108.5 2 Not seasonally adjusted 90.4 96.9 101.3 105.0 113.8 101.8 99.9 105.7 107.0 109.6 117.5 111.1 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 132.2 135.5 135.8 135.7 137.4 133.2 134.5 139.3 141.6 141.4 145.0 140.5 4 Not seasonally adjusted 134.6 138.5 138.1 138.7 142.1 135.7 134.0 141.5 142.1 143.1 150.5 143.1 5 Net balances due to foreign-related institutions, not seasonally adjusted -44.1 -41.5 -36.8 -33.5 -28.2 -33.8 -34.1 -35.7 -35.0 -33.4 -33.0 -31.9 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -38.7 -37.6 -34.8 -33.1 -29.8 -32.8 -33.0 -34.9 -35.1 -34.1 -32.6 -31.3 7 Gross due from balances 73.3 72.2 73.8 73.6 73.5 73.8 71.2 72.8 71.5 69.8 68.3 69.0 8 Gross due to balances 34.5 34.5 38.9 40.4 43.6 40.9 38.1 37.7 36.3 35.6 35.6 37.6 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 -5.3 -3.8 -1.8 -0.3 1.6 -0.8 -1.0 -0.7 0.1 0.7 -0.3 -0.5 10 Gross due from balances 54.0 51.3 50.2 49.6 49.7 50.7 51.9 51.6 51.7 50.8 50.7 52.0 11 Gross due to balances 48.6 47.3 48.3 49.2 51.2 49.7 50.8 50.8 51.8 51.5 50.4 51.4 Security RP borrowings 12 Seasonally adjusted® 78.9 80.2 80.1 80.9 79.6 76.1 77.5 79.9 81.4 82.0 84.0 81.1 13 Not seasonally adjusted 78.9 80.7 79.9 81.3 81.9 76.0 74.6 79.6 79.4 81.2 87.0 81.1 U.S. Treasury demand balances7 14 Seasonally adjusted 16.0 18.7 16.1 15.6 13.4 14.1 12.8 13.1 16.0 8.0 17.3 16.1 15 Not seasonally adjusted 19.6 22.3 17.5 16.5 12.8 12.4 11.9 10.3 17.5 11.0 10.4 12.5 Time deposits, $100,000 or more8 16 Seasonally adjusted 287.3 286.3 289.3 292.2 302.2 309.9 314.8 314.2 315.4 321.4 323.0 325.8 17 Not seasonally adjusted 288.4 286.5 290.1 290.1 300.2 309.0 313.7 315.6 316.8 322.2 322.9 327.3 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. York investment companies majority owned by foreign banks, and Edge Act 4. Averages of daily figures for member and nonmember banks. corporations owned by domestically chartered and foreign banks. 5. Averages of daily data. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 6. Based on daily average data reported by 122 large banks. nonbanks and not seasonally adjusted net Eurodollars. Includes averages of 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at Wednesday data for domestically chartered banks and averages of current and commercial banks. Averages of daily data. previous month-end data for foreign-related institutions. 8. Averages of Wednesday figures. 3. Other borrowings are borrowings on any instrument, such as a promissory NOTE. These data also appear in the Board's G. 10 (411) release. For address see note or due bill, given for the purpose of borrowing money for the banking inside front cover. business. This includes borrowings from Federal Reserve Banks and from foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 DomesticN onfinancial Statistics • April 1985 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1983 1984 1985 AAccccoouunntt Dec. Apr. May June July Aug. Sept. Oct. Nov. Dec/ Jan. ALL COMMERCIAL BANKING INSTITUTIONS1 1 Loans and securities 1.680.62 1,734.1 1,756.9 1,764.1 1,765.3 1,784.5 1,798.9 1,822.7 1,821.8'' 1,862.4' 1,843.9 2 Investment securities n.a. 385.5 382.0 381.2 378.2 376.2 377.3 375.2 374.9 377.9 381.1 3 U.S. government securities n.a. 251.0 247.7 248.2 246.5 243.5 243.5 241.2 240.4 242.6 244.8 4 Other n.a. 134.5 134.4 133.0 131.7 132.7 133.8 134.0 134.4 135.3 136.4 5 Trading account assets n.a. 19.9 18.8 14.6 15.7 20.0 20.9 22.5 21.9 22.8 24.2 6 Total loans 1.249.32 1,328.7 1,356.1 1,368.3 1,371.4 1,388.4 1,400.6 1,424.9 1,425.0* 1,461.6' 1,438.5 7 Interbank loans 111.42 116.7 124.7 122.8 118.6 127.1 123.3 126.1 122.5' 126.9' 116.5 8 Loans excluding interbank 1,137.92 1,212.0 1,231.4 1,245.5 1,252.8 1,261.2 1,277.3 1,298.8 1,302.5' 1,334.7' 1,322.0 9 Commercial and industrial 419.4 439.7 447.3 452.9 454.4 455.2 459.9 467.7 469.3 475.7 469.2 10 Real estate 327.2 346.8 350.3 354.6 356.8 361.8 366.7 369.8 372.8' 376.2' 378.9 11 Individual 217.4 224.1 228.4 232.8 235.2 240.0 243.4 247.1 249.8' 255.8' 257.5 12 All other 173.92 201.3 205.4 205.2 206.5 204.2 207.3 214.2 210.6 227.1 216.4 13 Total cash assets 219.6 190.5 202.5 185.6 179.1 177.3 176.0 188.0 188.9 202.2 187.4 14 Reserves with Federal Reserve Banks 23.5 22.2 18.6 19.1 19.4 17.4 .8 18.1 20.4 20.5 21.1 15 Cash in vault 23.4 21.2 22.3 21.8 21.6 22.2 21.6 21.4 23.9 23.3 21.9 16 Cash items in process of collection ... 73.2 65.9 76.4 63.7 60.2 60.7 63.2 70.2 66.5 76.2 67.0 17 Demand balances at U.S. depository institutions 30.0 34.8 30.8 29.3 29.5 31.2 32.0 31.0 34.5 31.0 18 Other cash assets J 995 51.2 50.4 50.1 48.6 47.5 59.3 46.3 47.1 47.8 46.4 19 Other assets 193.6 204.0 200.1 205.9 205.4 204.7 215.3 215.7 204.4' 211.2' 217.1 20 Total assets/total liabilities and capital ... 2,093.8 2,128.6 2,159.5 2,155.5 2,149.7 2,166.5 2,190.2 2,226.3 2,215.3 2,275.8 2,248.3 21 Deposits : 1,508.9 1,501.5 1,541.3 1,532.9 1,535.5 1,539.0 1,549.9 1,578.9 1,578.2 1,630.7 1,604.9 22 Transaction deposits 374.62 447.3 462.6 445.9 441.4 440.0 442.3 462.7 453.0 490.7 457.2 23 Savings deposits 457.22 369.6 371.6 369.5 368.5 365.1 364.9 371.1 378.2 386.3 400.0 24 Time deposits 677.1 684.5 707.2 717.4 725.6 734.0 742.7 745.0 747.0 753.8 747.8 25 Borrowings 273.22 305.9 292.8 292.8 292.0 301.5 307.1 314.3 298.0 302.0 306.2 26 Other liabilities 164.42 181.6 187.8 187.9 182.0 183.8 187.0 189.2 194.3 196.4 188.7 27 Residual (assets less liabilities) 147.32 139.6 137.6 141.9 140.2 142.1 146.2 144.0 144.8 146.6 148.4 MEMO 28 U.S. government securities (including trading account) 225544..II22 263.0 260.1 256.5 255.6 255.1 255.5 256.3 255.2 256.9 261.8 29 Other securities (including trading account) 117777..2222 142.4 140.7 139.3 138.3 141.0 142.7 141.5 141.6 143.8 143.5 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 1.591.32 1,642.8 1,663.2 1,671.0 1,676.7 1,688.4 1,708.0 1,728.5 1,726.6 1,765.7 1,759.2 31 Investment securities n.a. 378.7 375.3 374.5 371.2 369.1 370.0 367.9 368.0 370.9 374.0 32 U.S. government securities n.a. 245.8 242.5 243.1 241.4 238.5 238.5 236.1 235.9 237.9 240.0 33 Other n.a. 132.9 132.8 131.4 129.8 130.7 131.5 131.8 132.2 133.0 134.1 34 Trading account assets n.a. 19.9 18.8 14.6 15.7 20.0 20.9 22.5 21.9 22.8 24.2 35 Total loans 1,167.42 1,244.3 1,269.2 1,281.8 1,289.8 1,299.4 1,317.0 1,338.0 1,336.7 1,372.0 1,361.0 36 Interbank loans 87.02 90.0 96.2 94.7 95.2 97.6 100.0 103.3 96.4 103.1 100.7 37 Loans excluding interbank 1,080.42 1,154.3 1,172.9 1,187.1 1,194.6 1,201.8 1,217.1 1,234.7 1,240.3 1,268.9 1,260.3 38 Commercial and industrial 381.32 400.0 407.4 412.9 414.0 414.5 418.8 423.0 425.5 430.0 426.7 39 Real estate 327.2 342.2 346.1 350.5 353.1 358.0 362.4 365.5 368.5 371.9 374.6 40 Individual 217.4 224.0 228.3 232.6 235.1 239.8 243.2 246.9 249.6 255.6 257.3 41 All other 154.62 188.1 191.1 191.1 192.4 189.6 192.6 199.3 196.7 211.3 201.7 42 Total cash assets 207.0 177.9 190.7 173.2 166.7 165.9 164.0 176.6 176.9 190.1 175.6 43 Reserves with Federal Reserve Banks 19.9 21.5 17.4 18.4 18.0 16.7 .1 17.1 19.7 19.2 20.2 44 Cash in vault 23.4 21.2 22.3 21.8 21.6 22.2 21.6 21.4 23.9 23.3 21.8 45 Cash items in process of collection ... 73.0 65.8 76.3 63.5 60.1 60.5 63.0 69.9 66.3 75.9 66.7 46 Demand balances at U.S. depository institutions 28.6 33.5 29.4 27.9 28.2 29.7 30.7 29.5 32.9 29.5 47 Other cash assets 40.9 41.3 40.1 39.2 38.3 49.6 37.5 37.5 38.9 37.3 48 Other assets 150.4 143.6 139.0 141.5 138.9 140.6 145.6 147.9 139.8 142.0 137.5 49 Total assets/total liabilities and capital... 1,948.7 1,964.3 1,992.9 1,985.7 1,982.3 1,995.0 2,017.6 2,053.1 2,043.4 2,097.9 2,072.3 50 Deposits 1,468.1 1,464.9 1,501.7 1,492.5 1,495.4 1,500.3 1,510.9 1,539.1 1,538.0 1,587.3 1,562.0 51 Transaction deposits 368.52 441.1 456.2 439.6 434.8 433.7 435.9 456.2 446.8 484.1 450.8 52 Savings deposits 456.62 368.7 370.7 368.6 367.5 364.2 363.9 370.1 377.2 385.2 398.9 53 Time deposits 643.0 655.1 674.9 684.3 693.1 702.4 711.1 712.8 714.0 718.0 712.3 54 Borrowings 214.I2 241.9 232.5 229.6 228.0 236.0 243.5 251.3 241.1 243.1 246.4 55 Other liabilities 122.32 102.8 123.9 124.4 121.5 119.3 119.7 120.5 122.3 123.7 118.3 56 Residual (assets less liabilities) 144.I2 136.8 134.8 139.1 137.4 139.3 143.4 142.1 142.0 143.8 145.6 1. Commercial banking institutions include insured domestically chartered NOTE. Figures are partly estimated. They include all bank-premises subsidiarcommercial banks, branches and agencies of foreign banks, Edge Act and ies and other significant majority-owned domestic subsidiaries. Loan and securi- Agreement corporations, and New York State foreign investment corporations. ties data for domestically chartered commercial banks are estimates for the last 2. Data are not comparable with those of later dates. See the Announcements Wednesday of the month based on a sample of weekly reporting banks and section of the March 1985 BULLETIN for a description of the differences. quarter-end condition report data. Data for other banking institutions are esti- 3. Insured domestically chartered commercial banks include all member banks mates made for the last Wednesday of the month based on a weekly reporting and insured nonmember banks. sample of foreign-related institutions and quarter-end condition reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A19 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 1985 Adjust- Account bank, Dec. 19 Dec. 26 Jan. 2' Jan. 9' Jan. W Jan. 23 Jan. 30 Feb. 6 Feb. 13 1984 1 Cash and balances due from depository institutions .... 96,451 98,110 120,445 88,534 101,305 90,762 90,883 88,289 93,093 1,346 2 Total loans, leases and securities, net 815,385 815,847 832,380 822,052 826,988 815,060 818,167 821,124 824,443 7,714 3 U.S. Treasury and government agency 78,858 78,523 79,682 82,723 82,197 82,841 83,910 86,222 85,709 1,143 4 Trading account 14,561 14,328 13,844 15,887 15,085 15,845 17,019 17,807 17,610 2 5 Investment account, by maturity 64,298 64,196 65,838 66,835 67,112 66,996 66,890 68,414 68,099 1,141 6 One year or less 19,325' 20,171' 21,324 20,946 20,887 20,481 20,360 20,197 20,196 413 7 Over one through five years 31,651 30,706 30,998 32,330 32,677 33,107 33,179 34,836 34,514 612 8 Over five years 13,322' 13,318' 13,516 13,560 13,548 13,408 13,351 13,381 13,388 116 9 Other securities 47,046 48,294 50,117 49,338 48,972 48,901 49,012 48,502 48,085 771 10 Trading account 4,323 5,065 5,241 3,983 3,767 3,653 3,965 3,845 3,551 6 11 Investment account 42,723 43,228 44,876 45,355 45,205 45,248 45,046 44,657 44,534 765 12 States and political subdivisions, by maturity 38,328 38,815 40,314 40,860 40,677 40,695 40,523 40,090 39,979 683 13 One year or less 4,413 4,710 5,059 5,464 5,364 5,403 5,193 5,299 5,341 159 14 Over one year 33,915 34,106 35,255 35,396 35,313 35,292 35,331 34,792 34,638 524 15 Other bonds, corporate stocks, and securities 4,395 4,413 4,562 4,494 4,528 4,553 4,523 4,567 4,554 82 16 Other trading account assets 2,655 3,448 3,024 3,201 2,726 3,438 3,201 3,495 3,435 17 Federal funds sold1 54,512 51,368 57,269 53,214 58,727 49,235 52,086 48,457 51,390 774 18 To commercial banks 37,912 34,627 41,093 36,073 42,583 34,301 36,680 32,508 36,890 770 19 To nonbank brokers and dealers in securities 11,674 11,809 11,057 12,004 11,255 11,237 11,654 11,592 10,389 5 20 To others 4,925 4,932 5,119 5,137 4,889 3,697 3,752 4,356 4,111 21 Other loans and leases, gross2 648,178 650,017 658,194 649,833 650,701 647,016 646,416 651,036 652,368 5,267 22 Other loans, gross2 635,674 637,443 645,335 637,012 637,882 634,178 633,602 638,179 639,507 5,248 23 Commercial and industrial2 250,697' 251,423' 253,450 250,663 251,174 249,571 249,752 251,929 252,130 1,493 24 Bankers acceptances and commercial paper 3,815 3,832 4,156 3,386 3,074 3,039 3,2% 3,781 3,946 29 25 All other 246,882' 247.59C 249,294 247,278 248,099 246,532 246,456 248,148 248,183 1,464 26 U.S. addressees 240,634' 241,404' 243,118 241,475 242,402 240,840 240,821 242,492 242,572 1,368 27 Non-U.S. addressees 6,248 6,186 6,176 5,803 5,698 5,691 5,634 5,656 5,612 96 28 Real estate loans2 159,354 159,288 160,014 160,733 161,261 161,488 161,941 162,216 163,461 1,546 29 To individuals for personal expenditures 110,903 111,894' 114,625 114,750 114,788 114,687 114,875 114,585 114,692 1,454 30 To depository and financial institutions 41,352 41,657' 41,750 40,345 40,558 40,376 39,665 41,641 41,695 137 31 Commercial banks in the United States 10,129 10,382' 9,964 9,660 9,893 10,005 9,926 11,339 11,256 65 32 Banks in foreign countries 6,165 6,088' 6,291 5,822 6,008 6,403 5,923 6,276 6,426 56 33 Nonbank depository and other financial institutions. 25,058 25,187 25,495 24,864 24,657 23,967 23,815 24,026 24,014 16 34 For purchasing and carrying securities 19,178 17,092 18,052 16,410 15,599 13,864 13,174 13,600 13,191 6 35 To finance agricultural production 7,217' 7,217' 7,295 7,095 6,968 6,927 6,929 6,896 6,915 32 36 To states and political subdivisions 27,552 28,208 29,345 29,390 29,520 29,418 29,508 29,328 28,970 147 37 To foreign governments and official institutions 4,214 4,374' 4,102 3,987 3,812 3,726 3,796 3,745 3,848 23 38 All other 15,208 16,290 16,701 13,638 14,201 14,122 13,962 14,238 14,604 410 39 Lease financing receivables 12,504 12,574 12,859 12,821 12,819 12,837 12,814 12,857 12,860 18 40 LESS: Unearned income 5,110 5,129 5,283 5,314 5,306 5,311 5,312 5,265 5,262 186 41 Loan and lease reserve2 10,754 10,672 10,624 10,942 11,029 11,060 11,146 11,323 11,282 56 42 Other loans and leases, net2 632,314 634,215 642,287 633,577 634,366 630,644 629,958 634,448 635,823 5,026 43 All other assets 134,858' 132,891' 140,862 135,009 134,482 132,021 129,885 130,973 132,014 957 44 Total assets 1,046,694' 1,046,848' 1,093,687 1,045,595 1,062,775 1,037,843 1,038,935 1,040,386 1,049,550 10,017 45 Demand deposits 193,914 201,145 226,341 185,447 198,503 186,168 184,595 184,644 188,610 2,357 46 Individuals, partnerships, and corporations 145,097 157,535 174,623 145,838 151,513 140,751 139,346 139,193 145,274 1,913 47 States and political subdivisions 5,458 5,142 6,327 4,850 5,379 5,903 5,138 5,783 4,682 108 48 U.S. government 3,686 1,176 1,211 1,603 3,760 3,034 2,766 2,208 1,616 51 49 Depository institutions in United States 22,636 21,544 26,425 19,252 22,242 20,998 20,969 21,870 21,230 119 50 Banks in foreign countries 6,496 5,918 7,005 5,717 5,823 6,495 6,187 5,958 6,182 90 51 Foreign governments and official institutions 744 666 864 789 809 830 1,040 1,152 920 15 52 Certified and officers' checks 9,797 9,164 9,886 7,397 8,976 8,158 9,149 8,479 8,706 61 53 Transaction balances other than demand deposits 34,309 34,317 37,272 37,144 36,788 35,133 34,715 36,599 35,890 1,045 54 Nontransaction balances 452,302' 453,533' 461,119 460,970 460,068 459,740 459,663 459,815 460,063 4,921 55 Individuals, partnerships and corporations 417,708 418,623 427,207 427,036 426,346 425,886 425,194 425,352 424,850 4,772 56 States and political subdivisions 21,751 21,983 21,228 21,610 21,521 21,660 22,078 22,218 22,798 96 57 U.S. government 407 418 421 439 464 454 450 447 447 2 58 Depository institutions in the United States 8,876 8,938 8,795 8,682 8,573 8,648 8,878 8,881 8,962 51 59 Foreign governments, official institutions and banks .. 3,56c 3,571' 3,468 3,204 3,163 3,090 3,063 2,917 3,006 60 Liabilities for borrowed money 198,408 192,413 202,981 196,182 199,936 193,457 195,821 193,891 197,088 632 61 Borrowings from Federal Reserve Banks 3,300 2,130 5,577 1,265 846 510 1,555 862 1,369 62 Treasury tax-and-loan notes 11,280 10,212 8,162 8,155 10,284 14,859 15,650 7,462 8,273 63 All other liabilities for borrowed money3 183,828 180,071 189,242 186,762 188,806 178,088 178,616 185,567 187,446 632 64 Other liabilities and subordinated note and debentures 97,320 95,13C 93,559 93,575 95,144 91,092 91,765 92,483 94,734 345 65 Total liabilities 976,254' 976,537' 1,021,272 973,318 990,440 965,590 966,559 967,433 976,385 9,300 66 Residual (total assets minus total liabilities)4 70,441 70,311 72,414 72,277 72,336 72,253 72,376 72,954 73,165 717 MEMO 67 Total loans and leases (gross) and investments adjusted5 783,208 786,64C 797,230 792,575 790,847 787,125 788,019 793,865 792,841 7,121 68 Total loans and leases (gross) adjusted2-5 654,649 656,375' 664,406 657,314 656,952 651,944 651,896 655,646 655,612 5,207 69 Time deposits in amounts of $100,000 or more 160,668 161,114 160,516 159,792 157,914 157,488 156,736 156,109 156,179 582 70 Loans sold outright to affiliates—total6 2,883 2,946 3,033 2,983 2,933 2,898 2,785 2,717 2,811 -10 71 Commercial and industrial 2,04C 2,078' 2,064 1,991 1,959 1,940 1,900 1,861 1,872 72 Other 842' 868' 968 992 975 958 884 856 939 -10 73 Nontransaction savings deposits (including MMDAs)... 163,142 164,134 169,984 170,782 171,843 172,500 173,504 174,543 174,822 2,415 1. Includes securities purchased under agreements to resell. 5. Exclusive of loans and federal funds transactions with domestic commercial 2. Levels of major loan items were affected by the Sept. 26, 1984 transaction banks. between Continental Illinois National Bank and the Federal Deposit Insurance 6. Loans sold are those sold outright to a bank's own foreign branches, Corporation. For details see the H.4.2 statistical release dated Oct. 5, 1984. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 3. Includes federal funds purchased and securities sold under agreements to not a bank), and nonconsolidated nonbank subsidiaries of the holding company. repurchase; for information on these liabilities at banks with assets of $1 billion or NOTE. These data also appear in the Board's H.4.2 (504) release. For address, more on Dec. 31, 1977, see table 1.13. see inside front cover. 4. This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1984 1985 Adjust- Account bank. Dec. 19 Dec. 26 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 1984 1 Cash and balances due from depository institutions 24,290 26,682 36,249 20,964 26,273' 23,922 24,158 22,559 26,691 -3 2 Total loans, leases and securities, net1 176,606 175,482 174,932 169,674 173,806' 168,599 168,672 170,128 171,933 -844 Securities 3 U.S. Treasury and government agency2 4 Trading account2 5 Investment account, by maturity 9,604 9,679 9,296 9,913 9,769 9,717 9,649 11,209 10,499 6 One year or less 1,985 2,533 2,590 2,345 1,963 1,638 1,619 1,556 1,658 7 Over one through five years 5,550 5,085 4,667 5,482 5,708 6,092 6,083 7,745 6,944 8 Over five years 2,068 2,061 2,039 2,086 2,097 1,986 1,947 1,907 1,897 9 Other securities2 10 Trading account2 11 Investment account 9,179 9,327 9,790 9,860 9,863 9,900 9,830 9,720 9,655 -44 12 States and political subdivisions, by maturity 8,344 8,467 8,946 9,033 9,030 9,067 8,985 8,861 8,800 -44 13 One year or less 1,150 1,239 1,305 1,348 1,302 1,288 1,116 1,251 1,253 -44 14 Over one year 7,195 7,228 7,642 7,685 7,728 7,779 7,869 7,609 7,547 15 Other bonds, corporate stocks and securities 834 860 844 828 833 833 844 859 855 16 Other trading account assets2 Loans and leases 17 Federal funds sold3 20,166 19,329 20,554 18,367 21,986 18,199 19,570 17,860 20,212 18 To commercial banks 11,067 9,794 11,916 8,988 12,842 10,141 11,798 9,407 12,478 19 To nonbank brokers and dealers in securities 6,198 6,622 5,748 6,494 6,153 6,004 5,505 5,830 5,350 20 To others 2,901 2,912 2,890 2,885 2,991 2,055 2,268 2,623 2,383 21 Other loans and leases, gross 142,423 141,863 139,907 136,314 136,967' 135,570 134,422 136,168 136,390 -800 22 Other loans, gross 140,228 139,655 137,691 134,226 134,88c 133,483 132,389 134,112 134,326 -800 23 Commercial and industrial 63,735 63,638 62,650 62,361 62,821' 61,797 61,594 61,945 62,136 -692 24 Bankers acceptances and commercial paper 429 454 660 638 661 649 681 991 1,121 25 All other 63,306 63,183 61,990 61,724 62,160' 61,149 60,913 60,953 61,015 -692 26 U.S. addressees 62,293 62,180 61,242 60,994 61,500' 60,485 60,258 60,322 60,368 -692 27 Non-U.S. addressees 1,013 1,003 747 729 660 664 655 632 646 28 Real estate loans 24,239 24,346 24,451 24,465 24,55(K 24,443 24,583 24,732 24,831 66 29 To individuals for personal expenditures 16,087 16,234 16,226 16,134 16,079 16,058 15,985 16,042 16,026 -95 30 To depository and financial institutions 12,216 12,866 12,313 11,221 11,344' 12,051 11,240 12,478 12,338 31 Commercial banks in the United States 1,653 2,468 2,189 1,794 1,978' 2,474 2,111 2,788 2,533 32 Banks in foreign countries 2,291 2,161 2,258 1,973 2,108' 2,489 2,062 2,295 2,313 33 Nonbank depository and other financial institutions 8,271 8,237 7,866 7,454 7,258 7,088 7,067 7,395 7,493 34 For purchasing and carrying securities 10,376 8,035 8,312 7,286 6,958' 6,095 6,284 6,372 6,446 -1 35 To finance agricultural production 385 403 358 359 390 380 380 387 386 -20 36 To states and political subdivisions 8,101 8,166 8,193 8,161 8,223 8,093 8,052 7,926 7,516 -11 37 To foreign governments and official institutions ... 748 884 873 792 823' 791 819 799 915 38 All other 4,342 5,083 4,315 3,446 3,692' 3,773 3,452 3,431 3,731 -47 39 Lease financing receivables 2,195 2,207 2,216 2,088 2,087 2,088 2,034 2,056 2,064 40 LESS: Unearned income 1,478 1,484 1,461 1,482 1,491 1,488 1,491 1,474 1,474 41 Loan and lease reserve 3,289 3,231 3,154 3,298 3,287 3,300 3,309 3,354 3,348 42 Other loans and leases, net 137,656 137,147 135,292 131,533 132,188' 130,783 129,622 131,339 131,567 -800 43 All other assets4 69,324 69,653 73,798 69,802 68,562' 69,119 67,331 68,207 68,768 -297 44 Total assets 270,221 271,817 284,979 260,440 268,641' 261,640 260,162 260,894 267,392 -1,144 Deposits 45 Demand deposits 50,966 53,846 63,772 45,830 50,482' 49,049 48,919 46,256 50,880 -118 46 Individuals, partnerships, and corporations 33,498 37,652 45,175 33,522 34,828' 33,579 32,553 31,292 35,006 -103 47 States and political subdivisions 770 864 979 811 1,032 832 838 1,014 815 -18 48 U.S. government 683 140 127 204 731 318 684 389 378 1 49 Depository institutions in the United States 5,213 5,551 7,434 3,725 4,941' 4,841 4,690 4,330 5,100 50 Banks in foreign countries 5,262 4,644 5,390 4,365 4,413' 5,056 4,672 4,380 4,640 51 Foreign governments and official institutions 558 493 654 545 574' 617 804 953 724 52 Certified and officers' checks 4,981 4,503 4,012 2,658 3,962 3,805 4,676 3,898 4,216 2 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) . 3,711 3,718 3,975 3,981 3,967 3,752 3,748 3,872 3,854 45 54 Nontransaction balances 83,852 84,088 85,692 85,363 85,241' 84,970 84,769 84,415 84,014 46 55 Individuals, partnerships and corporations 74,926 75,024 77,344 77,247 77,268' 77,022 76,774 76,502 75,961 334 56 States and political subdivisions 4,326 4,374 3,893 3,836 3,792 3,800 3,820 3,802 3,905 -288 57 U.S. government 46 51 53 52 59 63 77 84 83 58 Depository institutions in the United States 2,523 2,619 2,465 2,480 2,391 2,407 2,446 2,459 2,409 59 Foreign governments, official institutions and banks .. 2,030 2,019 1,937 1,747 1,731 1,677 1,653 1,567 1,656 60 Liabilities for borrowed money 65,959 66,260 68,319 61,640 63,616' 61,289 59,882 63,904 64,319 -422 61 Borrowings from Federal Reserve Banks 2,225 1,700 500 62 Treasury tax-and-loan notes 2,961 2,650 2,013 2,216 2,658 3,538 3,711 1,686 2,298 63 All other liabilities for borrowed money5 60,773 63,610 64,606 59,423 60,957' 57,750 56,172 62,218 61,521 -422 64 Other liabilities and subordinated note and debentures. 42,798 40,980 39,937 40,563 42,121 39,460 39,677 38,983 40,847 -583 65 Total liabilities 247,286 248,892 261,695 237,377 245,427' 238,520 236,996 237,431 243,914 -1,032 66 Residual (total assets minus total liabilities)6 22,935 22,925 23,284 23,063 23,214 23,120 23,165 23,463 23,478 -112 MEMO 67 Total loans and leases (gross) and investments adjusted17 168,653 167,935 165,443 163,672 163,765' 160,771 159,563 162,761 161,744 -844 68 Total loans and leases (gross) adjusted7 149,870 148,929 146,357 143,898 144,133' 141,154 140,084 141,832 141,590 -800 69 Time deposits in amounts of $100,000 or more 34,580 34,733 35,399 35,008 34,672 34,301 33,760 33,293 33,139 -60 1. Excludes trading account securities. 6. Not a measure of equity capital for use in capital adequacy analysis or for 2. Not available due to confidentiality. other analytic uses. 3. Includes securities purchased under agreements to resell. 7. Exclusive of loans and federal funds transactions with domestic commercial 4. Includes trading account securities. banks. 5. Includes federal funds purchased and securities sold under agreements to NOTE. These data also appear in the Board's H.4.2 (504) release. For address, repurchase. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 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 1985 AAccccoouunntt Dec. 19 Dec. 26 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 1 Cash and due from depository institutions. 6,884 6,611' 7,064 6,536 6,652 6,455 6,949 6,460 7,422 2 Total loans and securities 44,095 45,047 47,123 43,910 43,407 44,018 44,208 43,752 45,040 3 U.S. Treasury and govt, agency securities 4,053 3,940 3,962 4,082 4,093 3,966 4,070 4,195 4,022 4 Other securities 1,272 1,282 1,277 1,282 1,356 1,350 1,367 1,390 1,390 5 Federal funds sold1 3,378 4,128 5,642 3,260 3,326 3,844 4,487 3,353 5,070 6 To commercial banks in the United States 2,978 3,716 5,256 2,865 3,018 3,530 4,074 2,958 4,629 7 To others 400 412 387 395 308 314 413 395 442 8 Other loans, gross 35,391 35,698 36,241 35,286 34,631 34,858 34,284 34,814 34,558 9 Commercial and industrial 20,174 20,276 20,926 19,920 19,790 20,202 20,033 20,197 20,248 10 Bankers acceptances and commercial paper 1,445 1,317 1,350 1,205 1,314 1,442 1,458 1,766 11,,773333 11 All other 18,729 18,959 19,577 18,714 18,476 18,760 18,575 18,431 18,515 12 U.S. addressees 17,434 17,685 18,354 17,520 17,281 17,608 17,461 17,309 17,369 13 Non-U.S. addressees 1,295 1,274 1,223 1,194 1,195 1,152 1,114 1,122 1,146 14 To financial institutions 11,087 11,221 10,871 11,220 10,779 10,837 10,427 10,524 10,484 15 Commercial banks in the United States . 8,239 8,382 8,118 8,614 8,460 8,634 8,2% 8,106 8,233 16 Banks in foreign countries 1,580 1,600 1,508 1,403 1,422 1,327 1,310 1,328 1,432 17 Nonbank financial institutions 1,268 1,239 1,245 1,203 897 876 822 1,090 819 18 To foreign govts, and official institutions.. 711 686 691 690 694 667 688 670 666 19 For purchasing and carrying securities .. 1,416 1,457 1,681 1,382 1,193 968 914 1,118 1,001 20 All other 2,004 2,058 2,071 2,074 2,175 2,184 2,222 2,305 2,158 21 Other assets (claims on nonrelated parties).. 19,169 19,598' 19,302 19,440 18,888 18,837 18,787 18,850 19,020 22 Net due from related institutions 10,487 10,631 9,350 11,535 11,473' 10,562 10,292 11,016 10,646 23 Total assets 80,634 81,888' 82,840 81,421 80,420' 79,873 80,236 80,078 82,128 24 Deposits or credit balances due to other than directly related institutions.... 24,366 24,590 24,802 24,369 24,045' 23,924 24,050 23,972 24,315 25 Credit balances 141 183 201 132 137 136 118 129 193 26 Demand deposits 1,712 1,632 1,873 1,582 1,651' 1,492 1,580 1,643 1,892 27 Individuals, partnerships, and corporations 892 876' 937 838 837' 749 799 895 821 28 Other 820 756 937 743 815 743 780 748 1,072 29 Time and savings deposits 22,513 22,775' 22,728 22,654 22,257 22,2% 22,352 22,200 22,229 30 Individuals, partnerships, and corporations 18,663 18,834' 18,537 18,552 18,128 18,142 18,208 18,161 1188,,110055 31 Other 3,851 3,941 4,190 4,102 4,129 4,154 4,144 4,039 4,124 32 Borrowings from other than directly related institutions 28,964 27,485' 29,003 29,176 29,672 28,270 27,750 29,146 3300,,449999 33 Federal funds purchased2 10,689 9,378 11,627 11,663 12,113 11,538 11,405 12,361 12,675 34 From commercial banks in the United States 8,598 7,304 9,828 9,614 9,927 8,828 8,926 9,549 9,940 35 From others 2,091 2,074 1,798 2,050 2,187 2,709 2,479 2,812 2,735 36 Other liabilities for borrowed money.... 18,274 18,K^ 17,376 17,513 17,559 16,732 16,345 16,786 17,824 37 To commercial banks in the United States 16,445 16,317' 15,748 16,011 16,002 15,190 14,955 15,452 16,407 38 To others 1,830 1,789 1,628 1,502 1,556 1,543 1,390 1,334 1,417 39 Other liabilities to nonrelated parties 20,457 20,815' 20,775 20,782 20,242 20,343 20,335 20,311 20,329 40 Net due to related institutions 6,848 8,998' 8,259 7,094 6,459 7,336 8,101 6,649 6,984 41 Total liabilities 80,634 81,888' 82,840 81,421 80,42c 79,873 80,236 80,078 82,128 MEMO 42 Total loans (gross) and securities adjusted3 32,877 32,949 33,749 32,431 31,929 31,854 31,838 32,688 3322,,117799 43 Total loans (gross) adjusted3 27,552 27,728 28,510 27,068 26,479 26,537 26,401 27,102 26,767 • Levels of many asset and liability items were revised beginning Oct. 31, 3. Exclusive of loans to and federal funds sold to commercial banks in the 1984. For details, see the H.4.2 (504) statistical release dated Nov. 23, 1984. United States. 1. Includes securities purchased under agreements to resell. NOTE. These data also appear in the Board's H.4.2 (504) release. For address, 2. Includes securities sold under agreements to repurchase. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 1983 1984 1199779922 11998800 11998811 11998822 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar. June Sept. 1 All holders—Individuals, partnerships, and corporations 302.3 315.5 288.9 291.8 281.9 280.3 293.5 279.3 285.8 284.3 2 Financial business 27.1 29.8 28.0 35.4 34.6 32.1 32.8 31.7 31.7 31.9 3 Nonfinancial business 157.7 162.8 154.8 150.5 146.9 150.2 161.1 150.3 154.9 154.7 4 Consumer 99.2 102.4 86.6 85.9 80.3 77.9 78.5 78.1 78.3 77.2 5 Foreign 3.1 3.3 2.9 3.0 3.0 2.9 3.3 3.3 3.4 3.3 6 Other 15.1 17.2 16.7 17.0 17.2 17.1 17.8 15.9 17.4 17.3 Weekly reporting banks 1983 1984 1199779933 11998800 11998811 11998822 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June Sept. Dec.4 Mar. June Sept. 7 All holders—Individuals, partnerships, and corporations 139.3 147.4 137.5 144.2 139.6 136.3 146.2 139.2 145.3 145.6 8 Financial business 20.1 21.8 21.0 26.7 26.1 23.6 24.2 23.5 23.6 23.7 9 Nonfinancial business 74.1 78.3 75.2 74.3 72.8 72.9 79.8 76.4 79.7 79.4 10 Consumer 34.3 35.6 30.4 31.9 28.5 28.1 29.7 28.4 29.9 30.0 11 Foreign 3.0 3.1 2.8 2.9 2.8 2.8 3.1 3.2 3.2 3.2 12 Other 7.8 8.6 8.0 8.4 9.3 8.9 9.3 7.7 8.9 9.3 1. Figures include cash items in process of collection. Estimates of gross exceeding $750 million as of Dec. 31, 1977. Beginning in March 1979, demand deposits are based on reports supplied by a sample of commercial banks. Types of deposit ownership estimates for these large banks are constructed quarterly on the depositors in each category are described in the June 1971 BULLETIN, p. 466. basis of 97 sample banks and are not comparable with earlier data. The following 2. Beginning with the March 1979 survey, the demand deposit ownership estimates in billions of dollars for December 1978 have been constructed for the survey sample was reduced to 232 banks from 349 banks, and the estimation new large-bank panel; financial business, 18.2; nonfinancial business, 67.2; procedure was modified slightly. To aid in comparing estimates based on the old consumer, 32.8; foreign, 2.5; other, 6.8. and new reporting sample, the following estimates in billions of dollars for 4. In January 1984 the weekly reporting panel was revised; it now includes 168 December 1978 have been constructed using the new smaller sample; financial banks. Beginning with March 1984, estimates are constructed on the basis of 92 business, 27.0; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and sample banks and are not comparable with earlier data. Estimates in billions of other, 15.1. dollars for December 1983 based on the newly weekly reporting panel are; 3. After the end of 1978 the large weekly reporting bank panel was changed to financial business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; 170 large commercial banks, each of which had total assets in domestic offices other, 9.5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 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 9988 cc.. 22 22 DD 1199 ee 88 cc 33 .. July Aug. Sept. Oct. Nov. Dec. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 112,803 124,374 165,829 166,670 188,057 221,431 222,448 226,474 227,960 235,811 238,461 FFiinnaanncciiaall ccoommppaanniieess44 DDeeaalleerr--ppllaacceedd ppaappeerr55 22 TToottaall 17,359 19,599 30,333 34,634 44,943 51,157 52,695 54,283 53,388 55,333 57,136 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 2,784 3,561 6,045 2,516 2,441 1,799 2,010 1,959 2,060 1,996 2,035 DDiirreeccttllyy ppllaacceedd ppaappeerr66 44 TToottaall 64,757 67,854 81,660 84,130 96,548 109,076 108,109 107,206 104,655 109,284 109,992 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 17,598 22,382 26,914 32,034 35,566 45,090 43,665 41,066 38,112 40,185 42,105 66 NNoonnffiinnaanncciiaall ccoommppaanniieess77 30,687 36,921 53,836 47,906 46,566 61,198 61,644 64,985 69,917 71,194 71,333 Bankers dollar acceptances (not seasonally adjusted)8 7 Total 45,321 54,744 69,226 79,543 78,309 80,957 79,779 77,928 75,740 75,179 75,470 Holder 8 Accepting banks 9,865 10,564 10,857 10,910 9,355 10,708 10,743 11,065 10,534 10,397 10,256 9 Own bills 8,327 8,963 9,743 9,471 8,125 8,854 8,823 8,729 8,960 9,113' 9,065 10 Bills bought 1,538 1,601 1,115 1,439 1,230 1,853 1,920 2,336 1,574 1,284' 1,191 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 1,442 949 729 611 632 686 658 615 671 13 Others 33,370 41,614 56,731 66,204 68,225 69,639 68,404 66,177 64,548' 64,781 64,167 Basis 14 Imports into United States 10,270 11,776 14,765 17,683 15,649 17,947 17,647 17,196 16,256 16,433 16,975 15 Exports from United States 9,640 12,712 15,400 16,328 16,880 15,485 15,871 15,985 16,312 15,849 15,859 16 All other 25,411 30,257 39,060 45,531 45,781 47,525 46,260 44,746 43,172' 42,897 42,635 1. A change in reporting instructions results in offsetting shifts in the dealer- financing; factoring, finance leasing, and other business lending; insurance placed and directly placed financial company paper in October 1979. underwriting; and other investment activities. 2. Effective Dec. 1,1982, there was a break in the commercial paper series. The 5. Includes all financial company paper sold by dealers in the open market. key changes in the content of the data involved additions to the reporting panel, 6. As reported by financial companies that place their paper directly with the exclusion of broker or dealer placed borrowings under any master note investors. agreements from the reported data, and the reclassification of a large portion of 7. Includes public utilities and firms engaged primarily in such activities as bank-related paper from dealer-placed to directly placed. communications, construction, manufacturing, mining, wholesale and retail trade, 3. Correction of a previous misclassification of paper by a reporter has created transportation, and services. a break in the series beginning December 1983. The correction adds some paper to 8. Beginning October 1984, the number of respondents in the bankers acceptnonfinancial and to dealer-placed financial paper. ance survey will be reduced from 340 to 160 institutions—those with $50 million or 4. Institutions engaged primarily in activities such as, but not limited to, more in total acceptances. The new reporting group accounts for over 95 percent commercial, savings, and mortgage banking; sales, personal, and mortgage of total acceptances activity. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective Date Month Average Month rate 11.00 1984-—Sept.27.. 12.75 1983—Jan 11.16 1984—Mar 1101..0500 Oct. 2 1 9 7 . . . . 1 12 2 . . 0 5 0 0 Feb 1 1 0 0 . . 9 5 8 0 A M p a r y Nov. 9.. 11.75 10.50 June 11.50 28.. 11.25 10.50 July 12.00 Dec. 20.. 10.75 June 10.50 Aug 12.50 July 10.50 Sept 13.00 1985--Jan. 15 10.50 Aug 10.89 Oct Sept 11.00 Nov Oct 11.00 Dec Nov 11.00 Dec 11.00 1985—Jan Feb 1984—Jan 11.00 Feb 11.00 NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 DomesticN onfinancial Statistics • April 1985 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 1985 1985, week ending IInnssttrruummeenntt 11998822 11998833 11998844 Oct. Nov. Dec. Jan. Jan. 4 Jan. 11 Jan. 18 Jan. 25 Feb. 1 MONEY MARKET RATES 1 Federal funds12 12.26 9.09 10.23 9.99 9.43 8.38 8.35 8.75 8.27 8.23 8.19 8.45 2 Discount window borrowing1 >2'3 11.02 8.50 8.80 9.00 8.83 8.37 8.00 8.00 8.00 8.00 8.00 8.00 Commercial paper4'5 3 1-month 11.83 8.87 10.05 10.05 9.01 8.39 7.99 8.17 7.94 7.95 7.88 8.14 4 3-month 11.89 8.88 10.10 10.12 9.03 8.44 8.03 8.20 8.01 8.00 7.91 8.14 5 6-month 11.89 8.89 10.16 10.16 9.06 8.55 8.15 8.31 8.14 8.16 8.05 8.22 Finance paper, directly placed4'5 6 1-month 11.64 8.80 9.97 9.92 8.92 8.25 7.95 8.13 7.91 7.87 7.85 8.12 7 3-month 11.23 8.70 9.73 9.87 8.83 8.12 7.81 7.82 7.83 7.82 7.75 7.86 8 6-month 11.20 8.69 9.65 9.87 8.82 8.09 7.82 7.76 7.83 7.83 7.80 7.86 Bankers acceptances5'6 9 3-month 11.89 8.90 10.14 10.13 9.00 8.45 8.01 8.19 7.99 7.96 7.90 8.11 10 6-month 11.83 8.91 10.19 10.14 9.02 8.54 8.11 8.29 8.05 8.14 8.03 8.18 Certificates of deposit, secondary market7 11 1-month 12.04 8.% 10.17 10.18 9.09 8.47 8.05 8.21 8.05 8.01 7.97 8.15 12 3-month 12.27 9.07 10.37 10.38 9.18 8.60 8.14 8.30 8.13 8.11 8.07 8.23 13 6-month 12.57 9.27 10.68 10.63 9.39 8.85 8.45 8.61 8.43 8.47 8.34 8.49 14 Eurodollar deposits, 3-month8 13.12 9.56 10.73 10.77 9.50 8.90 8.37 8.61 8.33 8.35 8.25 8.49 U.S. Treasury bills' Secondary market9 15 3-month 10.61 8.61 9.52 9.74 8.61 8.06 7.76 7.83 7.75 7.73 7.65 7.92 16 6-month 11.07 8.73 9.76 9.87 8.81 8.28 8.00 8.17 7.98 7.98 7.91 8.09 17 1-year 11.07 8.80 9.92 9.93 9.01 8.60 8.33 8.48 8.34 8.33 8.22 8.35 Auction average10 18 3-month 10.686 8.63 9.58 9.97 8.79 8.16 7.76 7.86 7.78 7.74 7.68 7.76 19 6-month 11.084 8.75 9.80 10.05 8.99 8.36 8.03 8.19 8.02 8.05 7.93 7.97 2200 1111..009999 88..8866 99..9911 1100..3322 99..1100 88..3388 88..3399 88..3399 CAPITAL MARKET RATES U.S. Treasury notes and bonds" Constant maturities12 21 1-year 12.27 9.57 10.89 10.90 9.82 9.33 9.02 9.19 9.04 9.05 8.90 9.03 22 2-vear 12.80 10.21 11.65 11.60 10.65 10.18 9.93 10.05 10.01 9.99 9.79 9.86 73 2-Vi-year13 10.20 10.30 10 05 24 3-year 12.92 10.45 11.89 11.85 10.90 10.56 10.43 10.58 10.51 10.49 10.25 10.34 25 5-year 13.01 10.80 12.24 12.06 11.33 11.07 10.93 11.16 11.07 11.01 10.70 10.76 26 7-year 13.06 11.02 12.40 12.16 11.49 11.45 11.27 11.59 11.39 11.35 11.02 11.04 27 10-year 13.00 11.10 12.44 12.16 11.57 11.50 11.38 11.64 11.50 11.49 11.16 11.15 28 20-year 12.92 11.34 12.48 12.04 11.66 11.64 11.58 11.80 11.70 11.73 11.37 11.31 29 30-year 12.76 11.18 12.39 11.98 11.56 11.52 11.45 11.64 11.54 11.59 11.28 11.21 Composite14 30 Over 10 years (long-term) 12.23 10.84 11.99 11.66 11.25 11.21 11.15 11.34 11.24 11.28 10.97 10.92 State and local notes and bonds Moody's series15 31 Aaa 10.88 8.80 9.61 9.72 9.78 9.54 9.08 9.45 9.20 9.10 8.85 8.80 32 Baa 12.48 10.17 10.38 10.51 10.47 10.45 10.16 10.50 10.30 10.20 9.90 9.90 33 Bond Buyer series16 11.66 9.51 10.10 10.25 10.17 9.95 9.51 9.87 9.60 9.51 9.21 9.37 Corporate bonds Seasoned issues17 34 All industries 14.94 12.78 13.49 13.33 12.88 12.74 12.64 12.76 12.72 12.74 12.55 12.47 35 Aaa 13.79 12.04 12.71 12.63 12.29 12.13 12.08 12.21 12.16 12.20 11.97 11.85 36 Aa 14.41 12.42 13.31 13.11 12.66 12.50 12.43 12.51 12.47 12.51 12.37 12.29 37 A 15.43 13.10 13.74 13.61 13.09 12.92 12.80 12.90 12.91 12.90 12.70 12.59 38 Baa 16.11 13.55 14.19 13.94 13.48 13.40 13.26 13.39 13.33 13.32 13.15 13.13 39 A-rated, recently-offered utility bonds18 15.49 12.73 13.81 13.52 12.98 12.88 12.78 12.96 12.92 12.82 12.51 12.59 MEMO: Dividend/price ratio19 40 Preferred stocks 12.53 11.02 11.59 11.62 11.36 11.21 11.13 11.42 11.11 11.10 11.03 10.99 41 Common stocks 5.81 4.40 4.64 4.62 4.61 4.68 4.51 4.67 4.67 4.52 4.37 4.31 1. Weekly and monthly figures are averages of all calendar days, where the 11. Yields are based on closing bid prices quoted by at least five dealers. rate for a weekend or holiday is taken to be the rate prevailing on the preceding 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields business day. The daily rate is the average of the rates on a given day weighted by are read from a yield curve at fixed maturities. Based on only recently issued, the volume of transactions at these rates. actively traded securities. 2. Weekly figures are averages for statement week ending Wednesday. 13. Each biweekly figure is the average of five business days ending on the 3. Rate for the Federal Reserve Bank of New York. Monday following the date indicated. Until Mar. 31, 1983, the biweekly rate 4. Unweighted average of offering rates quoted by at least five dealers (in the determined the maximum interest rate payable in the following two-week period case of commercial paper), or finance companies (in the case of finance paper). on 2-'/2-year small saver certificates. (See table 1.16.) Before November 1979, maturities for data shown are 30-59 days, 90-119 days, 14. Averages (to maturity or call) for all outstanding bonds neither due nor and 120-179 days for commercial paper; and 30-59 days, 90—119 days, and 150— callable in less than 10 years, including several very low yielding "flower" bonds. 179 days for finance paper. 15. General obligations based on Thursday figures; Moody's Investors Service. 5. Yields are quoted on a bank-discount basis, rather than an investment yield 16. General obligations only, with 20 years to maturity, issued by 20 state and basis (which would give a higher figure). local governmental units of mixed quality. Based on figures for Thursday. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Daily figures from Moody's Investors Service. Based on yields to maturity (which may be, but need not be, the average of the rates quoted by the dealers). on selected long-term bonds. 7. Unweighted average of offered rates quoted by at least five dealers early in 18. Compilation of the Federal Reserve. This series is an estimate of the yield the day. on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 8. Calendar week average. For indication purposes only. call protection. Weekly data are based on Friday quotations. 9. Unweighted average of closing bid rates quoted by at least five dealers. 19. Standard and Poor's corporate series. Preferred stock ratio based on a 10. Rates are recorded in the week in which bills are issued. Beginning with the sample often issues: four public utilities, four industrials, one financial, and one Treasury bill auction held on Apr. 18, 1983, bidders were required to state the transportation. Common stock ratios on the 500 stocks in the price index. percentage yield (on a bank discount basis) that they would accept to two decimal NOTE. These data also appear in the Board's H. 15 (519) and G.13 (415) releases. places. Thus, average issuing rates in bill auctions will be reported using two For address, see inside front cover. rather than three decimal places. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.36 STOCK MARKET Selected Statistics 1984 1985 IInnddiiccaattoorr 11998822 11998833 11998844 May June July Aug. Sept. Oct. Nov. Dec. Jan. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 68.93 92.63 92.46 90.07 88.28 87.08 94.49 95.68 95.09 95.85 94.85 99.11 2 Industrial 78.18 107.45 108.01 105.94 104.04 102.29 111.20 112.18 110.44 110.91 109.05 113.99 3 Transportation 60.41 89.36 85.63 81.62 79.29 76.72 86.86 86.88 86.82 87.37 88.00 94.88 4 Utility 39.75 47.00 46.44 44.22 43.65 44.17 46.69 47.47 49.02 49.93 50.58 51.95 5 Finance 71.99 95.34 89.28 85.06 80.75 79.03 87.92 91.59 92.94 95.28 95.29 110.34 6 Standard & Poor's Corporation (1941-43 = 10)1 ... 119.71 160.41 160.50 156.55 153.12 151.08 164.42 166.11 164.82 166.27 164.48 171.61 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 141.31 216.48 207.96 206.39 201.24 192.82 207.90 214.50 210.39 209.47 202.28 211.82 Volume of trading (thousands of shares) 8 New York Stock Exchange 64,617 85,418 91,084 88,170 85,920 79,156 109,892 93,108 91,676 83,692 89,032 112211,,554455 9 American Stock Exchange 5,283 8,215 6,107 5,935 5,071 5,141 7,477 5,967 5,587 6,008 7,254 9,130 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 13,325 23,000 22,470 22,360 23,450 22,980 22,810 22,800 22,330 22,350 11 Margin stock 12,980 22,720 t t t t t t t t 12 Convertible bonds 344 2791 13 Subscription issues Free credit balances at brokers4 14 Margin-account 5,735 6,620 7,015 6,685 6,430 6,430 6,855 6,690 6,580 6,699 15 Cash-account 8,390 8,430 10,215 8,115 8,305 8,125 8,185 8,315 8,650 8,420 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 21.0 41.0 46.0 53.0 50.0 52.0 40.0 42.0 44.0 47.0 46.0 35.0 18 40-49 24.0 22.0 18.0 18.0 19.0 17.0 22.0 22.0 21.0 19.0 18.0 19.0 7 1 0 9 6 5 0 0 - -5 6 9 9 2 1 4 4 . . 0 0 1 9 6 . . 0 0 1 9 6 . . 0 0 1 7 2 . . 0 0 1 8 2 . . 0 0 1 8 2 . . 0 0 1 9 6 . . 0 0 1 9 5 . . 0 0 1 9 4 . . 0 0 1 9 3 . . 0 0 1 9 6 . . 0 0 2101..00 71 70-79 9.0 6.0 5.0 5.0 6.0 5.0 6.0 6.0 6.0 6.0 5.0 7.0 22 80 or more 8.0 6.0 6.0 5.0 5.0 6.0 7.0 6.0 6.0 6.0 6.0 8.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 35,598 58,329 75,840 70,110 69,410 70,588 71,840 72,350 71,914 73,904 75,840 79,600 Distribution by equity status (percent) 24 Net credit status 62.0 63.0 59.0 60.0 56.0 57.0 58.0 58.0 59.0 59.0 59.0 59.0 Debt status, equity of 2 2 5 6 6 L 0 e s p s e r th c a e n n t 6 o 0 r p m er o c r e e n t 2 9 9 . . 0 0 2 9 8 . . 0 0 2191..00 2 1 7 3 . . 0 0 3 1 0 4 . . 0 0 3 1 0 3 . . 0 0 3111..00 3111..00 3101..00 2 1 9 2 . . 0 0 2191..00 3 1 0 0 . . 0 0 Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks 70 80 65 55 65 50 28 Convertible bonds 50 60 50 50 50 50 29 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance 5. Each customer's equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of 2. 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 toted 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

A48 Domestic Nonfinancial Statistics • April 1985 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1984 AAccccoouunntt 11998811 11998822 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Savings and loan associations 664,167 707,646 781,821 797,849 808,264 825,557 840,682 850,780 860,088 877,642 881,627 887,6% 902,449 2 Mortgages 518,547 483,614 499,337 503,509 510,670 519,628 528,172 535,814 540,644 550,129 552,516 556,229 555,277 3 Cash and investment securities1 63,123 85,438 104,800 109,477 106,863 110,033 109,752 108,456 108,820 112,350 112,023 114,879 125,358 4 Other 82,497 138,594 177,684 184,863 190,731 195,8% 202,758 206,510 210,624 215,163 217,088 216,588 221,814 5 Liabilities and net worth 664,167 707,646 781,821 797,849 808,264 825,557 840,682 850,780 860,088 877,642 881,627 887,6% 902,449 6 Savings capital 525,061 567,961 644,977 656,650 660,663 670,666 681,947 687,817 691,704 704,558 708,846 714,780 724,301 7 Borrowed money 88,782 97,850 87,269 94,113 98,275 103,119 108,417 110,238 114,747 121,329 119,305 117,775 126,169 8 FHLBB 62,794 63,861 50,465 50,663 51,951 53,485 56,558 57,115 60,178 63,627 63,412 63,383 64,207 9 Other 25,988 33,989 36,804 43,450 46,324 49,634 51,859 53,123 54,569 57,702 55,893 54,392 61,962 10 Loans in process2 6,385 9,934 21,974 22,969 23,938 24,761 25,726 26,122 26,773 27,141 26,754 26,683 26,959 11 Other 15,544 15,602 18,146 15,548 17,524 19,832 17,586 19,970 20,599 18,050 19,894 21,302 17,215 12 Net worth3 28,395 26,233 31,429 31,538 31,802 31,940 32,732 32,755 33,038 33,705 33,582 33,839 34,764 13 MEMO: Mortgage loan commitments outstanding4 15,225 18,054 36,198 39,867 41,732 45,274 44,878 43,878 41,182 40,089 38,530 37,856 3344,,884411 Mutual savings banks5 14 Assets 175,728 174,197 195,168 197,178 198,000 200,087 198,864 199,128 200,722 201,445 203,274 204,455 Loans 15 Mortgage 99,997 94,091 97,895 98,472 99,017 99,881 99,433 100,091 101,211 101,621 102,704 102,953 16 Other 14,753 16,957 21,694 21,971 22,531 22,907 23,198 23,213 24,068 24,535 24,486 24,930 Securities 17 U.S. government6 9,810 9,743 15,667 15,772 15,913 16,404 15,448 15,457 15,019 14,965 15,295 14,925 18 State and local government 2,288 2,470 2,054 2,067 2,033 2,024 2,037 2,037 2,055 2,052 2,080 2,077 19 Corporate and other7 37,791 36,161 43,439 43,547 43,122 43,200 42,479 42,682 42,632 42,605 43,003 43,366 20 Cash 5,442 6,919 4,580 5,040 5,008 5,031 5,452 4,8% 4,981 4,795 4,605 4,805 21 Other assets 5,649 7,855 9,839 10,309 10,376 10,640 10,817 10,752 10,756 10,872 11,101 11,399 22 Liabilities 175,728 174,197 195,168 197,178 198,000 200,087 198,864 199,128 200,722 201,445 203,274 204,455 n a. 23 Deposits 155,110 155,1% 174,370 176,044 175,875 176,253 174,972 174,823 176,085 177,345 178,624 180,142 24 Regular8 153,003 152,777 171,957 173,385 173,010 173,310 171,858 171,740 172,990 174,2% 175,727 177,1% 25 Ordinary savings 49,425 46,862 37,642 37,866 37,329 37,147 36,322 35,511 34,787 34,564 34,221 34,008 26 Time 103,578 %,369 %,005 97,339 %,920 97,236 97,168 98,410 101,270 102,934 104,151 104,913 27 Other 2,108 2,419 2,413 2,659 2,865 2,943 3,114 3,083 3,095 3,049 2,897 2,946 28 Other liabilities 10,632 8,336 10,019 10,390 11,211 12,861 12,999 13,269 13,604 12,979 13,853 13,367 29 General reserve accounts 9,986 9,235 10,492 10,373 10,466 10,554 10,404 10,495 10,498 10,488 10,459 10,508 30 MEMO: Mortgage loan commitments outstanding9 1,293 1,285 n.a. n.a. n.a. n.a. 0 0 n.a. n.a. n.a. n.a. Life insurance companies 31 Assets . 525,803 588,163 660,901 665,836 671,259 673,518 679,449 684,573 694,082 699,9% 705,827 Securities Government 25,209 36,499 51,762 52,504 52,828 53,422 53,970 54,688 56,263 57,552 59,825 United States10. 8,167 16,529 30,130 31,056 31,358 31,706 32,066 32,654 33,886 35,586 37,594 State and local . 7,151 8,664 9,426 9,259 9,192 9,239 9,213 9,236 9,357 9,221 9,344 Foreign11 9,891 11,306 12,206 12,189 12,278 12,477 12,691 12,798 13,020 12,745 12,887 Business 255,769 287,126 328,235 331,631 334,634 334,151 338,508 341,802 348,614 350,512 352,059 n.a. n .a. Bonds 208,099 231,406 265,798 268,446 271,2% 273,212 276,902 281,113 283,673 285,543 287,607 Stocks 47,670 55,720 62,437 63,185 63,338 60,939 61,606 60,689 64,941 64,%9 64,452 39 Mortgages 137,747 141,989 151,020 151,445 152,373 152,968 153,845 154,299 155,438 155,802 156,064 40 Real estate 18,278 20,264 22,591 23,034 23,237 23,517 23,792 24,019 24,117 24,685 24,947 41 Policy loans 48,706 52,961 54,170 54,254 54,365 54,399 54,430 54,441 54,517 54,551 54,574 42 Other assets 40,094 48,571 53,123 52,%8 53,822 55,061 54,904 55,324 55,133 56,894 58,358 Credit unions12 43 Total assets/liabilities and capital. 60,611 69,585 83,726 85,789 86,594 88,350 90,276 90,145 90,503 91,651 91,619 44 Federal 39,181 45,493 55,753 57,569 58,127 59,636 61,316 61,163 61,500 62,107 61,935 45 State 21,430 24,092 27,973 28,220 28,467 28,714 28,960 28,982 29,003 29,544 29,684 46 Loans outstanding 42,333 43,232 51,435 52,269 53,247 54,437 55,915 57,286 58,802 59,874 60,483 n a. 47 Federal 27,096 27,948 33,878 34,510 35,286 36,274 37,547 38,490 39,578 40,310 40,727 48 State 15,237 15,284 17,557 17,759 17,961 18,163 18,368 18,796 19,224 19,564 19,756 49 Savings 54,152 62,990 76,556 78,487 79,413 80,702 82,578 82,402 82,135 83,172 83,129 50 Federal (shares) 35,250 41,352 51,218 52,905 53,587 54,632 56,261 56,278 56,205 56,734 56,655 51 State (shares and deposits). 18,902 21,638 25,338 25,582 25,826 26,070 26,317 26,124 25,930 26,438 26,474 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.37 Continued 1984 AAccccoouunntt 11998811 11998822 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. FSLIC-insured federal savings banks 52 Assets 6,859 72,143 75,555 77,374 78,952 81,310 83,989 87,209 82,174 87,743 94,536 98,559 53 Mortgages 3,353 43,371 44,708 45,900 46,791 48,084 49,996 52,039 48,841 51,554 55,861 57,429 54 Cash and investment securities1 11,662 12,552 12,762 12,814 13,071 13,184 13,331 12,867 13,615 14,826 16,001 55 Other 17,110 18,295 18,712 19,347 20,155 20,809 21,839 20,466 22,574 23,849 25,129 56 Liabilities and net worth 6,859 72,143 75,555 77,374 78,952 81,310 83,989 87,209 82,174 87,743 94,536 98,559 57 Savings and capital 5,877 59,107 61,433 62,495 63,026 64,364 66,227 68,443 65,079 70,080 76,167 79,572 58 Borrowed money 8,088 9,213 9,707 10,475 11,489 12,060 12,863 11,828 11,935 11,937 12,798 59 FHLBB 4,884 5,232 5,491 5,900 6,538 6,897 7,654 6,600 6,867 7,041 7,515 60 Other 3,204 3,981 4,216 4,575 4,951 5,163 5,209 5,228 5,068 4,8% 5,283 61 Other 1,545 1,360 1,548 1,747 1,646 1,807 1,912 1,610 1,8% 2,259 1,903 62 Net worth3 3,403 3,549 3,624 3,704 3,811 3,895 3,991 3,657 3,832 4,173 4,286 MEMO 63 Loans in process2 1,531 1,669 1,716 1,787 1,839 1,901 1,895 1,505 1,457 1,689 1,738 64 Mortgage loan commitments outstanding4 2,704 3,253 3,714 3,763 3,583 3,988 3,860 2,970 2,925 3,298 3,234 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 perons. 3. Includes net undistributed income accrued by most associations. NOTE. Savings and loan associations: Estimates by the FHLBB for all 4. Excludes figures for loans in process. associations in the United States. Data are based on monthly reports of federally 5. The National Council reports data on member mutual savings banks and on insured associations and annual reports of other associations. Even when revised, savings banks that have converted to stock institutions, and to federal savings data for current and preceding year are subject to further revision. banks. Mutual savings banks: Estimates of National Council of Savings Institutions for 6. Beginning April 1979, includes obligations of U.S. government agencies. all savings banks in the United States. Before that date, this item was included in "Corporate and other." Life insurance companies: Estimates of the American Council of Life Insurance 7. Includes securities of foreign governments and international organizations for all life insurance companies in the United States. Annual figures are annualand, before April 1979, nonguaranteed issues of U.S. government agencies. statement asset values, with bonds carried on an amortized basis and stocks at 8. Excludes checking, club, and school accounts. year-end market value. Adjustments for interest due and accrued and for 9. Commitments outstanding (including loans in process) of banks in New differences between market and book values are not made on each item separately York State as reported to the Savings Banks Association of the State of New but are included, in total, in "other assets." York. Credit unions: Estimates by the National Credit Union Administration for a 10. Direct and guaranteed obligations. Excludes federal agency issues not group of federal and federally insured state credit unions serving natural persons. guaranteed, which are shown in the table under "Business" securities. Figures are preliminary and revised annually to incorporate recent data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 1983 1984 1984 1985 11998822 11998833 11998844 HI H2 HI Nov. Dec. Jan. U.S. budget 1 Receipts1 617,766 600,562 666,457 306,331 306,584 341,808 51,494 62,404 70,454 2 Outlays1 728,375 795,917 841,800 396,477 406,849 420,700 79,956 77,583 76,838 3 Surplus, or deficit (-) -110,609 -195,355 -175,343 -90,146 -100,265 -78,892 -28,462 -15,179 -6,384 4 Trust funds 5,456 23,056 30,565 22,680 7,745 18,080 -265 8,426 -188 5 Federal funds2 3 -116,065 -218,410 -205,908 -112,822 -108,005 -96,971 -28,197 -23,606 -6,198 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays -14,142 -10,404 -7,277 -5,418 -3,199 -2,813 -48 142 -840 7 Other3 4 -3,190 -1,953 -2,719 -528 -1,206 -838 -392 475 -789 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -127,940 -207,711 -185,339 -96,094 -104,670 -84,884 -28,902 -14,563 -8,013 Source of financing 9 Borrowing from the public 134,993 212,425 170,817 102,538 84,020 80,592 19,353 24,055 12,675 10 Cash and monetary assets (decrease, or increase (-))4 -11,911 -9,889 5,636 -9,664 -16,294 -3,127 14,780 -10,490 -7,969 11 Other5 4,858 5,176 8,885 3,222 4,358 7,418 -5,231 998 3,307 MEMO 12 Treasury operating balance (level, end of period) 29,164 37,057 37,057 27,997' 11,817' 13,567' 5,566 17,649 26,502 13 Federal Reserve Banks 10,975 16,557 16,557 19,442 3,661' 4,397' 2,216 5,316 5,349 14 Tax and loan accounts 18,189 20,500 20,500 8,764' 8,157' 9,170' 3,350 12,333 21,153 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 U.S. Government, Fiscal 4. Includes U.S. Treasury operating cash accounts; SDRs; gold tranche Year 1985. drawing rights; loans to International Monetary Fund; and other cash and monetary assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1982 1983 1984 1984 1985 111999888333 111999888444 H2 HI H2 HI Nov. Dec. Jan. RECEIPTS 1 All sources 600,563 666,457 286,337 306,331 305,122 341,808 51,494 62,404 70,454 2 Individual income taxes, net 288,938 295,955 145,676 144,551 147,663 144,691 24,792 27,054 37,852 3 Withheld 266,010 279,345 131,567 135,531 133,768 140,657 24,573 25,979 24,778 4 Presidential Election Campaign Fund ... 36 35 5 30 6 29 0 0 0 5 Nonwithheld 83,586 81,346 20,041 63,014 20,703 61,463 1,036 2,003 12,642 6 Refunds 60,692 64,771 5,938 54,024 6,815 57,458 816 929 -433 Corporation income taxes 7 Gross receipts 61,780 74,179 25,660 33,522 31,064 40,328 1,888 1122,,335511 44,,337733 8 Refunds 24,758 17,286 11,467 13,809 8,921 10,045 766 820 1,594 9 Social insurance taxes and contributions, net 209,001 241,902 94,277 110,520 100,832 131,372 19,525 18,127 23,394 10 Payroll employment taxes and contributions1 179,010 203,476 85,064 90,912 88,388 106,436 1166,,775522 1177,,332288 2211,,666611 11 Self-employment taxes and contributions2 6,756 8,709 177 6,427 398 7,667 0 00 660022 12 Unemployment insurance 18,799 25,138 6,856 10,984 8,714 14,942 2,346 397 1,328 13 Other net receipts3 4,436 4,580 2,180 2,197 2,290 2,329 427 403 406 14 Excise taxes 35,300 37,361 16,555 16,904 19,586 18,304 3,151 2,907 3,267 15 Customs deposits 8,655 11,370 4,299 4,010 5,079 5,576 989 922 1,085 16 Estate and gift taxes 6,053 6,010 3,444 2,883 3,050 3,102 495 469 605 17 Miscellaneous receipts4 15,594 16,965 7,890 7,751 7,811 8,481 1,421 1,395 1,471 OUTLAYS 18 All types 795,917 841,800 390,847 396,477 406,849 420,700 79,956 77,583 76,838 19 National defense 210,461 227,405 100,419 105,072 108,967 114,639 22,017 20,156 19,367 20 International affairs 8,927 13,313 4,406 4,705 6,117 5,426 1,423 1,297 1,254 21 General science, space, and technology ... 7,777 8,271 3,903 3,486 4,216 3,981 667 692 654 22 Energy 4,035 2,464 2,058 2,073 1,533 1,080 327 278 369 23 Natural resources and environment 12,676 12,677 6,941 5,892 6,933 5,463 955 1,253 1,082 24 Agriculture 22,173 12,215 13,259 10,154 5,278 7,129 2,144 2,881 3,372 25 Commerce and housing credit 4,721 5,198 2,244 2,164 2,648 2,572 -271 1,043 -737 26 Transportation .' 21,231 24,705 10,686 9,918 13,323 10,616 2,282 2,055 2,053 27 Community and regional development 7,302 7,803 4,187 3,124 4,327 3,154 873 627 589 28 Education, training, employment, social services 25,726 26,616 12,186 12,801 13,246 13,445 2,655 22,,008899 22,,554477 29 Health 28,6551 30,435 39,072 41,206 42,150 15,748 2,515 2,677 2,822 30 Social security and medicare 223,311> 235,764 133,779 143,001 19,631 20,640 20,930 31 Income security 106,21 lj 96,714 135,579 65,212 10,880 10,704 11,600 32 Veterans benefits and services 24,845 25,640 13,240 11,334 13,621 12,849 3,350 2,393 928 33 Administration of justice 5,014 5,616 2,373 2,522 2,628 2,807 633 491 585 34 General government 4,991 4,836 2,323 2,434 2,479 2,462 143 569 244 35 General-purpose fiscal assistance 6,287 6,577 3,153 3,124 3,290 2,943 119 21 1,250 36 Net interest® 89,774 111,007 44,948 42,358 47,674 53,729 12,120 10,085 10,440 37 Undistributed offsetting receipts7 -21,424 -15,454 -8,332 -8,887 -7,262 -7,333 -2,508 -2,368 -2,513 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

A48 Domestic Nonfinancial Statistics • April 1985 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1982 1983 1984 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 1,147.0 1,201.9 1,249.3 1,324.3 1,381.9 1,415.3 1,468.3 1,517.2 1,576.7 2 Public debt securities 1,142.0 1,197.1 1,244.5 1,319.6 1,377.2 1,410.7 1,463.7 1,512.7 1,572.3 3 Held by public 925.6 987.7 1,043.3 1,090.3 1,138.2 1,174.4 1,223.9 1,255.1 l,309.2r 4 Held by agencies 216.4 209.4 201.2 229.3 239.0 236.3 239.8 257.6 264.1 5 Agency securities 5.0 4.8 4.8 4.7 4.7 4.6 4.6 4.5 4.5 6 Held by public 3.7 3.7 3.7 3.6 3.6 3.5 3.5 3.4 3.4 7 Held by agencies 1.2 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.1 8 Debt subject to statutory limit 1,142.9 1,197.9 1,245.3 1,320.4 1,378.0 1,411.4 1,464.5 1,513.4 1,573.0 9 Public debt securities 1,141.4 1,196.5 1,243.9 1,319.0 1,376.6 1,410.1 1,463.1 1,512.1 1,571.7 10 Other debt1 1.5 1.4 1.4 1.4 1.3 1.3 1.3 1.3 1.3 11 MEMO: Statutory debt limit 1,143.1 1,290.2 1,290.2 1,389.0 1,389.0 1,490.0 1,490.0 1,520.0 1,573.0 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 1984 TTyyppee aanndd hhoollddeerr 11998800 11998811 11998822 11998833 Q1 Q2 Q3 Q4 1 Total gross public debt 930.2 1,028.7 1,197.1 1,410.7 1,463.7 1,512.7 1,572.3 1,663.0 By type 7 Interest-bearing debt 928.9 1,027.3 1,195.5 1,400.9 1,452.1 1,501.1 1,559.6 1,660.6 3 Marketable 623.2 720.3 881.5 1,050.9 1,097.7 1,126.6 1,176.6 1,247.4 4 Bills 216.1 245.0 311.8 343.8 350.2 343.3 356.8 374.4 S Notes 321.6 375.3 465.0 573.4 604.9 632.1 661.7 705.1 6 Bonds 85.4 99.9 104.6 133.7 142.6 151.2 158.1 167.9 7 Nonmarketable1 305.7 307.0 314.0 350.0 354.4 374.5 383.0 413.2 8 State and local government series 23.8 23.0 25.7 36.7 38.1 39.9 41.4 44.4 1 9 0 Fo G re o ig v n e rn is m su e e n s t 2 2 1 4 7 . . 0 6 1 1 9 4 . . 0 9 1 1 4 3 . . 7 0 1 1 0 0 . . 4 4 9 9 . . 9 9 8 8 . . 8 8 8 8 . . 8 8 9y..1i 11 Public 6.4 4.1 1.7 .0 .0 .0 .0 .0 12 Savings bonds and notes 72.5 68.1 68.0 70.7 71.6 72.3 73.1 73.3 13 Government account series3 185.1 196.7 205.4 231.9 234.6 253.2 259.5 286.2 14 Non-interest-bearing debt 1.3 1.4 1.6 9.8 11.6 11.6 12.7 2.3 By holder* 15 U.S. government agencies and trust funds 192.5 203.3 209.4 236.3 239.8 257.6 263.1 16 Federal Reserve Banks 121.3 131.0 139.3 151.9 150.8 152.9 155.0 17 Private investors 616.4 694.5 848.4 1,022.6 1,073.0 1,102.2 1,154.1 18 Commercial banks 112.1 111.4 131.4 188.8 189.8 182.3 183.0 19 Money market funds 3.5 21.5 42.6 22.8 19.4 14.9 13.6 20 Insurance companies 24.0 29.0 39.1 56.7 57.1 61.6 58.6 71 Other companies 19.3 17.9 24.5 39.7 42.6 45.3 47.7 22 State and local governments 87.9 104.3 127.8 155.1 162.9 165.0 n.a. n a. Individuals 23 Savings bonds 72.5 68.1 68.3 71.5 72.2 72.9 73.7 74 Other securities 44.6 42.7 48.2 61.9 64.0 69.3 73.8 75 Foreign and international5 129.7 136.6 149.5 166.3 166.3 171.5 175.5 26 Other miscellaneous investors6 122.8 163.0 217.0 259.8 298.7 319.4 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

Federal Finance A31 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1984 1985 1984 and 1985, week ending Wednesday IItteemm 11998811 11998822 11998833 Nov/ Dec/ Jan. Dec. 26 Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Immediate delivery1 1 U.S. government securities 24,728 32,271 42,135 71,071 58,110 71,694 48,350 53,048 74,751 60,348 73,978 77,390 By maturity ? Bills 14,768 18,398 22,393 31,179 28,202 32,200 23,316 25,174 32,081 29,295 36,698 30,622 3 Other within 1 year 621 810 708 2,454 2,027 1,755 1,365 1,863 2,184 1,704 1,619 1,495 4 1-5 years 4,360 6,272 8,758 18,644 14,964 17,670 15,127 12,899 18,119 11,907 17,571 22,697 5 5-10 years 2,451 3,557 5,279 10,625 7,914 12,047 5,436 7,008 13,400 10,536 11,354 13,291 6 Over 10 years 2,528 3,234 4,997 8,169 5,003 8,022 3,107 6,104 8,968 6,906 6,736 9,286 By type of customer 7 U.S. government securities dealers 1,640 1,769 2,257 3,680 3,981 4,288 3,404 4,853 4,572 3,729 4,482 33,,990022 8 U.S. government securities brokers 11,750 15,659 21,045 33,376 24,767 32,617 1188,,998877 19,005 34,447 28,381 32,603 35,300 9 All others2 11,337 15,344 18,832 34,014 29,362 34,789 25,960 29,191 35,732 28,238 36,893 38,189 10 Federal agency securities 3,306 4,142 5,576 10,168 8,499 9,843 6,504 5,535 9,069 11,761 10,328 9,495 11 Certificates of deposit 4,477 5,001 4,333 5,203 4,380 5,428 3,405 3,349 7,998 5,324 4,870 4,092 12 Bankers acceptances 1,807 2,502 2,642 4,015 3,376 3,756 2,189 2,557 5,355 3,283 3,762 3,009 13 Commercial paper 66,,112288 7,595 8,036 11,079 10,882 10,776 9,283 10,436 11,373 10,630 10,414 10,132 Futures transactions3 14 Treasury bills 3,523 5,031 6,655 6,650 4,686 5,510 2,144 3,106 4,748 5,703 4,789 6,470 15 Treasury coupons 1,330 1,490 2,501 5,475 4,605 5,147 1,982 3,681 4,816 5,220 4,356 6,159 16 Federal agency securities 234 259 265 242 131 155 86 78 148 91 167 136 Forward transactions4 17 U.S. government securities 365 835 1,493 1,803 1,423 1,047 1,519 1,037 862 693 1,035 1,288 18 Federal agency securities 1,370 982 1,646 3,587 3,355 3,538 3,382 2,100 3,411 4,556 4,082 2,560 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing Averages of daily figures, in millions of dollars 1984 1985 1985 week ending Wednesday IItteemm 11998822 11998833 11998844 Nov. Dec/ Jan. Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Positions Net immediate1 1 U.S. government securities 9,328 6,263 5,543 14,513 18,358 14,109 20,258 18,925 11,906 11,759 13,244 2 Bills 4,837 4,282 5,504 9,772' 13,871 11,629 13,896 12,927 9,597 11,245 12,526 3 Other within 1 year -199 -177 63 -487 -416 -111 -253 -192 -391 -6 100 4 1-5 years 2,932 1,709 2,160 7,234' 7,452 5,685 9,751 6,505 5,635 4,726 5,468 5 5-10 years -341 -78 -1,119 -1,717 -2,122 -4,024 -2,645 -2,129 -4,515 -4,794 -4,930 6 Over 10 years 2,001 528 -1,174 -431 -565 820 -627 -1,676 -1,473 495 -15 7 Federal agency securities 3,712 7,172 15,294 16,106' 18,471 19,429 19,166 19,139 18,290 18,886 20,934 8 Certificates of deposit 5,531 5,839 7,368 8,511 9,155 10,254 10,858 11,503 10,117 9,367 9,701 9 Bankers acceptances 2,832 3,332 3,874 4,474 4,329 4,839 4,974 5,431 4,621 4,485 4,824 10 Commercial paper 3,317 3,159 3,787 4,965 5,694 4,880 5,591 4,689 4,495 4,512 5,435 Futures positions 11 Treasury bills -2,508 -4,125 -4,524 -8,104' -10,668 -13,133 -11,822 -12,856 -14,568 -13,901 -12,052 12 Treasury coupons -2,361 -1,032 1,796 1,408 808 1,332 1,197 -525 977 1,561 2,209 13 Federal agency securities -224 170 232 -21 -10 -55 -172 -150 -149 -62 108 Forward positions 14 U.S. government securities -788 -1,935 -1,643 -1,382 -2,188 -845 -2,075 -1,145 -1,098 -181 -803 15 Federal agency securities -1,190 -3,561 -9,204 -9,208 -8,294 -6,990 -7,527 -7,624 -7,469 -6,286 -6,326 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 26,754 29,099 44,078 49,834 52,222 57,000 54,817 55,943 59,869 56,906 55,697 17 Term agreements 48,247 52,493 68,357 78,049 75,532 72,387 63,715 77,251 75,256 71,552 69,193 Repurchase agreements4 18 Overnight and continuing 49,695 57,946 75,717 82,964 89,419 93,727 91,548 95,464 94,117 92,835 93,269 19 Term agreements 43,410 44,410 57,047 74,249 67,185 63,188 53,698 69,530 63,509 60,790 62,840 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 maturi- NOTE. Data for positions are averages of daily figures, in terms of par value, ty, which are securities that were sold after having been obtained under reverse based on the number of trading days in the period. Positions are shown net and are repurchase agreements that mature on the same day as the securities. Before on a commitment basis. Data for financing are based on Wednesday figures, in 1981, data for immediate positions include forward positions. terms of actual money borrowed or lent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1984 AAggeennccyy 11998811 11998822 11998833 June July Aug. Sept. Oct. Nov. 1 Federal and federally sponsored agencies 221,946 237,085 239,716 255,376 258,957 263,642 267,399 259,330 260,015? 2 Federal agencies 31,806 33,055 33,940 34,473 34,560 34,497 34,754 35,012 35,078 3 Defense Department1 484 354 243 181 172 162 153 149 146 4 Export-Import Bank2 3 13,339 14,218 14,853 15,604 15,611 15,606 15,733 15,721 15,721 5 Federal Housing Administration4 413 288 194 155 154 146 140 139 138 6 Government National Mortgage Association participation certificates5 2,715 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 7 Postal Service6 1,538 1,471 1,404 1,337 1,337 1,337 1,337 1,337 1,337 8 Tennessee Valley Authority 13,115 14,365 14,970 14,980 15,070 15,030 15,160 15,450 15,520 9 United States Railway Association6 202 194 111 51 51 51 51 51 51 10 Federally sponsored agencies7 190,140 204,030 205,776 220,903 224,397 229,145 232,645 224,318 224,937? 11 Federal Home Loan Banks 54,131 55,967 48,930 54,799 57,965 62,116 65,616 66,126 66,230 12 Federal Home Loan Mortgage Corporation 5,480 4,524 6,793 8,988 7,822 9,068 8,950 n.a. n.a. 13 Federal National Mortgage Association8 58,749 70,052 74,594 79,871 80,706 79,921 80,123 80,357 81,119 14 Farm Credit Banks 71,359 71,896 72,409 73,061 73,297 73,352 73,131 72,859 72,267 15 Student Loan Marketing Association 421 1,591 3,050 4,184 4,607 4,688 4,824 5,143 5,321 MEMO 16 Federal Financing Bank debt 110,698 126,424 135,791 141,734 143,322 144,063 144,836 144,978 145,174 Lending to federal and federally sponsored 17 Export-Import Bank3 12,741 14,177 14,789 15,556 15,563 15,563 15,690 15,690 15,690 18 Postal Service6 1,288 1,221 1,154 1,087 1,087 1,087 1,087 1,087 1,087 19 Student Loan Marketing Association 5,400 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 20 Tennessee Valley Authority 11,390 12,640 13,245 13,255 13,345 13,305 13,435 13,725 13,795 21 United States Railway Association6 202 194 111 51 51 51 51 51 51 Other Lending10 22 Farmers Home Administration 48,821 53,261 55,266 57,701 58,856 59,196 59,511 59,021 58,801 23 Rural Electrification Administration 13,516 17,157 19,766 20,611 20,671 20,742 20,587 20,694 20,889 24 Other 12,740 22,774 26,460 28,473 28,749 29,119 29,475 29,710 29,861 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1984 Type of issue or issuer, or use 11998811 11998822 11998833 Apr. May June July Aug. Sept. Oct/ Nov. 1 AU issues, new and refunding1 47,732 79,138 86,421 5,617 7,075 6,657 7,323 9,803 7,248 12,231 12,480 Type of issue 2 General obligation 12,394 21,094 21,566 2,291 2,373 1,885 1,940 1,864 1,627 3,707 2,620 3 U.S. government loans2 34 225 96 3 3 3 3 5 9 7 7 4 Revenue 35,338 58,044 64,855 3,326 4,702 4,772 5,383 7,939 5,621 8,524 9,860 5 U.S. government loans2 55 461 253 8 13 15 18 21 23 28 36 Type of issuer 6 State 5,288 8,438 7,140 886 497 447 457 691 589 1,109 805 7 Special district and statutory authority 27,499 45,060 51,297 2,866 3,767 3,9% 5,002 6,913 4,772 6,945 6,662 8 Municipalities, counties, townships, school districts 14,945 25,640 27,984 1,865 2,811 2,214 1,864 2,199 1,887 4,177 5,013 9 Issues for new capital, total 46,530 74,804 72,441 4,485 5,972 6,067 6,433 8,830 7,134 10,932 11,409 Use of proceeds 10 Education 4,547 6,482 8,099 475 905 764 493 601 397 735 966 11 Transportation 3,447 6,256 4,387 517 403 658 100 402 576 1,015 2,001 12 Utilities and conservation 10,037 14,259 13,588 681 1,428 1,172 382 992 2,023 2,911 469 13 Social welfare 12,729 26,635 26,910 1,203 1,385 2,120 3,719 4,294 2,802 3,449 3,392 14 Industrial aid 7,651 8,349 7,821 358 374 354 859 907 561 1,247 3,511 15 Other purposes 8,119 12,822 11,637 1,251 1,477 999 880 1,634 775 1,575 1,070 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 Corporations Millions of dollars 1984 Type of i o s r s u u e s e o r issuer, 11998822 11998833 11998844 May June July Aug. Sept. Oct. Nov. Dec. 1 All issues1-2 84,638 98,948' 95,967 4,073' 7,401' 7,642' 10,917' 7,738' N^STE 11,931' 6,940 2 Bonds 54,076 47,369' 73,337 2,264' 5,180' 6,310' 8,863' 6,205' 10,403' 9,524' 5,918 Type of offering 3 Public 44,278 47,369' 73,337 2,264' 5,180' 6,31(K 8,863' 6,205' 10,403' 9,524' 5,918 4 Private placement 9,798 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 12,822 7,842 14,418 383 1,440 950 2,484 1,594 2,989 1,447' 1,741 6 Commercial and miscellaneous 5,442 5,186 8,745 221 536 875 776 576 988 1,198' 555 7 Transportation 1,491 1,039 1,272 0 225 40 183 200 161 19' 110 8 Public utility 12,327 7,241 6,754 100 475 650 765 758 1,150 555 575 9 Communication 2,390 3,159 2,407 0 0 31 0 0 240 1,557 169 10 Real estate and financial 19,604 22,900' 39,741 1,560' 2,504' 3,763' 4,654' 3,076' 4,875' 4,749' 2,768 11 Stocks3 30,562 51,579 22,628 1,809 2,221 1,332 2,054 1,533 1,947 2,407 1,022 Type 12 Preferred 5,113 7,213 4,118 579 244 209 334 155 555 655 91 13 Common 25,449 44,366 18,510 1,230 1,977 1,123 1,720 1,378 1,392 1,752 931 Industry group 14 Manufacturing 5,649 14,135 4,054 442 584 204 258 212 712 227 137 15 Commercial and miscellaneous 7,770 13,112 6,277 718 316 382 558 378 489 1,025 112 16 Transportation 709 2,729 589 84 1 28 0 87 16 66 71 17 Public utility 7,517 5,001 1,624 116 282 136 44 92 146 150 66 18 Communication 2,227 1,822 419 16 11 0 123 9 69 3 26 19 Real estate and financial 6,690 14,780 9,665 433 1,027 582 1,071 755 515 936 610 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, SOURCE. Securities and Exchange Commission and the Board of Governors of employee stock plans, investment companies other than closed-end, intracorpo- the Federal Reserve System. rate transactions, and sales to foreigners. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Market and Corporate Finance A35 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1984 IItteemm 11998833''"" 11998844 May June July Aug. Sept. Oct. Nov.' Dec. INVESTMENT COMPANIES1 1 Sales of own shares2 84,345 107,497 8,657 8,343' 7,488' 8,956' 8,156' 9,517' 9,458 10,009 2 Redemptions of own shares3 57,100 76,160 5,993 6,156 5,777 6,497 6,185 6,766 6,343 8,947 3 Net sales 27,245 31,337 2,664 2,187' 1,711' 2,459' 1,971' 2,751' 3,115 1,062 4 Assets4 113,599 137,126 111,071 115,034 115,481 128,209 129,657 131,539 132,709 137,126 5 Cash position5 8,343 12,086 10,847 11,907 11,620 12,698 13,221 11,417 11,518 12,086 6 Other 105,256 125,040 100,224 103,127 103,861 115,511 116,436 120,122 121,191 125,040 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. 1983 1984 AAccccoouunntt 11998822 11998833 11998844 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Corporate profits with inventory valuation and capital consumption adjustment 159.1 225.2 287.1 179.1 216.7 245.0 260.0 277.4 291.1 282.8 297.3 2 Profits before tax 165.5 203.2 237.5 161.7 198.2 227.4 225.5 243.3 246.0 224.8 235.8 3 Profits tax liability 60.7 75.8 90.0 59.1 74.8 84.7 84.5 92.7 95.8 83.1 88.3 4 Profits after tax 104.8 127.4 147.5 102.6 123.4 142.6 141.1 150.6 150.2 141.7 147.5 5 Dividends 69.2 72.9 80.5 71.1 71.7 73.3 75.4 77.7 79.9 81.3 83.0 6 Undistributed profits 35.6 54.5 66.9 31.4 51.7 69.3 65.6 72.9 70.2 60.3 64.4 7 Inventory valuation -9.5 -11.2 -5.9 -4.3 -12.1 -19.3 -9.2 -13.5 -7.3 -.2 -2.8 8 Capital consumption adjustment 3.1 33.2 55.6 21.7 30.6 36.9 43.6 47.6 52.3 58.3 64.3 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities Billions of dollars, except for ratio 1983 1984 AAccccoouunntt 11997788 11997799 11998800 11998811 11998822 Q3 Q4 Ql Q2' Q3 1 Current assets 1,043.7 1,214.8 1,327.0 1,418.4 1,432.7 1,522.8 1,557.3 1,600.6 1,630.6 1,667.3 2 Cash 105.5 118.0 126.9 135.5 147.0 150.5 165.8 159.3 155.0 150.6 3 U.S. government securities 17.2 16.7 18.7 17.6 22.8 27.0 30.6 35.1 36.7 32.3 4 Notes and accounts receivable 388.0 459.0 506.8 532.0 519.2 565.0 577.8 596.9 612.4 628.0 5 Inventories 431.8 505.1 542.8 583.7 578.6 597.3 599.3 623.1 633.3 662.5 6 Other 101.1 116.0 131.8 149.5 165.2 183.0 183.7 186.3 193.2 194.0 7 Current liabilities 669.5 807.3 889.3 970.0 976.8 1,026.6 1,043.0 1,079.0 1,111.9 1,143.0 8 Notes and accounts payable 383.0 460.8 513.6 546.3 543.0 559.4 577.9 584.1 604.6 624.7 9 Other 286.5 346.5 375.7 423.7 433.8 467.2 465.2 495.0 507.3 518.4 10 Net working capital 374.3 407.5 437.8 448.4 455.9 496.3 514.3 521.6 518.6 524.3 11 MEMO: Current ratio1 1.559 1.505 1.492 1.462 1.467 1.483 1.493 1.483 1.466 1.459 1. Ratio of total current assets to total current liabilities. Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. NOTE. For a description of this series, see "Working Capital of Nonfinancial 20551. Corporations" in the July 1978 BULLETIN, pp. 533-37. SOURCE. Federal Trade Commission and Bureau of the Census. 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 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 11998844 Ql Q2 Q3 Q4 Ql Q2 Q3 Q41 1 Total nonfarm business 282.71 269.22 307.59 261.71 261.16 270.05 283.96 293.15 302.70 313.11 321.40 Manufacturing 2 Durable goods industries 56.44 51.78 63.02 50.74 48.48 53.06 54.85 58.94 60.20 65.44 67.49 3 Nondurable goods industries 63.23 59.75 67.99 59.12 60.31 58.06 61.50 63.84 67.46 69.06 71.60 Nonmanufacturing 4 Mining 15.45 11.83 12.90 12.03 10.91 11.93 1122..4433 13.95 12.13 12.61 12.92 Transportation 5 Railroad 4.38 3.92 5.32 3.35 3.64 4.07 4.63 4.41 5.64 5.80 5.41 6 Air 3.93 3.77 3.02 4.09 4.10 3.57 3.32 2.77 2.98 3.16 3.18 7 Other 3.64 3.50 4.57 3.60 3.14 3.36 3.91 4.28 4.33 4.69 4.98 Public utilities 8 Electric 33.40 34.99 34.72 33.97 34.86 35.84 35.31 35.74 35.30 34.64 33.19 9 Gas and other 8.55 7.00 9.45 7.64 6.62 6.38 7.37 7.87 9.30 10.11 10.51 10 Commercial and other2 93.68 92.67 106.61 87.17 89.10 93.79 100.62 101.35 105.35 107.61 112.12 ATrade 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

Securities Markets and Corporate Finance A37 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1983 1984 AAccccoouunntt 11997788 11997799 11998800 11998811 11998822 Q3 Q4 Ql Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 52.6 65.7 73.6 85.5 89.5 92.3 92.8 96.9 99.6 103.4 2 Business 63.3 70.3 72.3 80.6 81.0 86.8 95.2 101.1 104.2 103.2 3 Total 116.0 136.0 145.9 166.1 170.4 179.0 188.0 198.0 203.8 206.6 4 LESS: Reserves for unearned income and losses.... 15.6 20.0 23.3 28.9 30.5 30.1 30.6 31.9 33.4 34.7 5 Accounts receivable, net 100.4 116.0 122.6 137.2 139.8 148.9 157.4 166.1 170.4 171.9 6 Cash and bank deposits 3.5 1 7 Securities 1.3 } 24.91 27.5 34.2 39.7 45.0 45.3 47.1 48.1 49.1 8 All other 17.3 J 9 Total assets 122.4 140.9 150.1 171.4 179.5 193.9 202.7 213.2 218.5 220.9 LIABILITIES 10 Bank loans 6.5 8.5 13.2 15.4 18.6 17.0 19.1 14.7 15.3 16.0 11 Commercial paper 34.5 43.3 43.4 51.2 45.8 49.7 53.6 58.4 62.0 60.1 Debt 12 Short-term, n.e.c 8.1 8.2 7.5 9.6 8.7 8.7 11.3 12.2 15.0 15.1 13 Long-term, n.e.c 43.6 46.7 52.4 54.8 63.5 66.2 65.4 68.7 67.6 71.2 14 Other 12.6 14.2 14.3 17.8 18.7 24.4 27.1 29.8 29.0 29.2 15 Capital, surplus, and undivided profits 17.2 19.9 19.4 22.8 24.2 27.9 26.2 29.4 29.6 29.2 16 Total liabilities and capital 122.4 140.9 150.1 171.4 179.5 193.9 202.7 213.2 218.5 220.9 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. These data also appear in the Board's G.20 (422) release. For address, see NOTE. Components may not add to totals due to rounding. inside front cover. 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 DDDeeeccc... 333111,,, 111999888444''' Oct. Nov. Dec. Oct. Nov. Dec. Oct. Nov. Dec. 1 Total 135,227 3,004 1,860 2,969 26,797 24,946 27,088 23,793 23,086 24,119 Retail financing of installment sales 2 Automotive (commercial vehicles) 11,334 62 39 -20 790 771 720 728 732 740 3 Business, industrial, and farm equipment 20,771 25 215 477 1,048 11,,333377 11,,449911 11,,002233 11,,112222 11,,001144 Wholesale financing 4 Automotive 18,509 1,152 349 1,295 10,308 8,616 9,898 9,156 8,267 8,603 5 Equipment 4,593 -37 43 -82 560 617 573 597 574 655 6 All other 6,624 23 142 212 1,639 1,702 1,690 11,,661166 11,,556600 11,,447788 Leasing V Automotive 12,353 373 271 377 885 757 917 512 486 540 8 Equipment 35,883 531 554 453 1,164 1,328 1,528 633 774 1,075 9 Loans on commercial accounts receivable and factored commercial accounts receivable 14,690 344 133 226 9,112 8,753 9,285 8,768 8,620 9,059 10 All other business credit 10,470 531 114 31 1,291 1,065 986 760 951 955 A Finance company data have been revised from June 1975 through November 1. Not seasonally adjusted. 1984. Revised data may be obtained from the Finance Company Unit, Capital NOTE. These data also appear in the Board's G.20 (422) release. For address, Markets Section, Division of Research and Statistics, Board of Governors of the see inside front cover. Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1984 1985 IItteemm July Aug. Sept. Oct. Nov. Dec. Jan Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 94.6 92.8 %.8 98.3 94.3 97.4 98.4 99.5 102.6' 94 .8 2 Amount of loan (thousands of dollars) 69.8 69.5 73.7 74.6 71.8 72.5 74.0 75.2 76.9' 72.3 3 Loan/price ratio (percent) 76.6 77.1 78.7 78.4 78.1 77.3 78.2 77.9 77.9 78.3 4 Maturity (years) 27.6 26.7 27.8 28.2 28.0 27.6 27.6 27.5 28.0 27.8 5 Fees and charges (percent of loan amount)2 2.95 2.40 2.64 3.07 2.82 2.63 2.58 2.54 2.65' 2.66 6 Contract rate (percent per annum) 14.47 12.20 11.87 11.91 11.89 12.03 12.27 12.27 12.05 11.76 Yield (percent per annum) 7 FHLBB series5 15.12 12.66 12.37 12.50 12.43 12.53 12.77 12.75 12.55' 12.26 8 HUD series4 15.79 13.43 13.80 14.53 14.24 13.98 13.59 13.20 13.05 12.88 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 15.30 13.11 13.81 14.58 14.21 13.99 13.43 12.90 12.99 13.01 10 GNMA securities5 14.68 12.25 13.13 13.88 13.56 13.36 13.09 12.71 12.54 12.26 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 66,031 74,847 83,339 83,858 84,193 84,851 85,539 86,416 87,940 12 FH A/V A-insured 39,718 37,393 35,148 35,049 34,938 34,844 34,791 34,752 34,711 13 Conventional 26,312 37,454 48,191 48,809 49,255 50,006 50,749 51,664 53,229 Mortgage transactions (during period) 14 Purchases 15,116 17,554 16,721 1,226 820 1,145 1,087 1,297 1,962 n.a. 15 2 3,528 978 0 0 0 0 0 0 Mortgage commitments1 16 22,105 18,607 21,007 1,976 1,227 1,142 1,638 2,150 2,758 17 Outstanding (end of period) 7,606 5,461 6,384 6,281 6,332 6,235 6,656 5,916 6,384 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 5,131 5,9% n.a. 9,154 99,,333311 99,,444477 99,,772266 99,,990000 19 FHA/VA 1,027 974 n.a. 906 901 896 891 886 20 Conventional 4,102 5,022 n.a. 8,248 8,431 8,551 8,835 9,014 Mortgage transactions (during period) 71 Purchases 23,673 23,089 n.a. 1,288 11,,882211 11,,226622 2,864 22,,224411 n a. n.a. 22 24,170 19,686 n.a. 1,573 1,570 1,137 2,573 1,961 Mortgage commitments9 23 Contracted (during period) 28,179 32,852 n.a. 3,929 3,130 3,440 2,663 4,158 24 Outstanding (end of period) 7,549 16,964 n.a. 22,311 23,639 22,013 25,676 27,550 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 A39 1.54 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1983 1984 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998822 11998833 11998844 Q4 Q1 Q2 Q3 Q4 1 All holders l,658,450r 1,827,563' 2,030,930 l,827,56y 1,874,489' 1,934,437' 1,987,182' 2,030,930 2 1- to 4-family 1,110,315' 1,219,145' 1,349,951 1,219,145' 1,250,678' 1,287,537' 1,320,500' 1,349,951 3 Multifamily 140,063' 150,149' 163,977 150,149' 153,655' 158,349' 161,960' 163,977 4 Commercial 301,362' 348,958' 406,139 348,958' 360,540' 377,974' 393,60C 406,139 5 106,710' 109,311' 110,863 109,311' 109,616' 110,577' 111,122' 110,863 Major financial institutions 1,024,680' 1,110,165' 1,247,106 1,110,165' 1,138,931' 1,183,480' 1,221,779' 1,247,106 7 Commercial banks1 301,272' 328,323' 374,186 328,323' 340,797' 353,946' 365,386' 374,186 8 1- to 4-family 173,804' 181,300' 197,944 181,300' 185,53C 190,706' 194,933' 197,944 9 Multifamily 16,480' 18,288' 21,142 18,288' 20,005' 20,670' 21,412' 21,142 10 Commercial 102,553' 119,411' 144,623 119,411' 125,550' 132,447' 138,774' 144,623 11 Farm 8,435' 9,324' 10,477 9,324' 9,712' 10,123' 10,267' 10,477 12 Mutual savings banks 97,805 136,054 160,761 136,054 143,180 147,517 150,462' 160,761 N 1- to 4-family 66,777 96,569 114,364 96,569 101,868 105,063 106,944' 114,364 14 Multifamily 15,305 17,785 20,190 17,785 18,441 18,752 19,138' 20,190 15 Commercial 15,694 21,671 26,176 21,671 22,841 23,672 24,349' 26,176 16 Farm 29 29 31 29 30 30 31 31 17 Savings and loan associations 483,614 494,789' 554,868 494,789' 503,509' 528,172' 550,129' 554,868 18 1- to 4-family 393,323 390,883' 431,132 390,883' 397,017' 414,087' 429,101' 431,132 19 Multifamily 38,979 42,552' 48,274 42,552' 43,553' 45,951' 47,861' 48,274 20 Commercial 51,312 61,354' 75,462 61,354' 62,939' 68,134' 73,167' 75,462 21 Life insurance companies 141,989 150,999' 157,291 150,999' 151,445' 153,845 155,802 157,291 ?? 1- to 4-family 16,751 15,3^ 14,218 15,3^ 14,917' 14,437 14,204 14,218 23 Multifamily 18,856 19,107' 18,881 19,107' 19,083' 19,028 18,828 18,881 74 Commercial 93,547 103,831' 111,692 103,831' 104,890' 107,7% 110,149 111,692 25 Farm 12,835 12,742' 12,500 12,742' 12,555' 12,584 12,621 12,500 26 Federal and related agencies 138,138 147,370 157,826 147,370 150,784 152,669 153,407 157,826 27 Government National Mortgage Association 4,227 3,395 2,500 3,395 2,900 2,715 2,389 2,500 28 1- to 4-family 676 630 597 630 618 605 594 597 29 Multifamily 3,551 2,765 1,903 2,765 2,282 2,110 1,795 1,903 30 Farmers Home Administration 1,786 2,141 1,800 2,141 2,094 1,344 738 1,800 31 1- to 4-family 783 1,159 449 1,159 1,005 281 206 449 32 Multifamily 218 173 124 173 303 463 126 124 33 Commercial 377 409 652 409 319 81 113 652 34 Farm 408 400 575 400 467 519 293 575 35 Federal Housing and Veterans Administration 5,228 4,894 n.a. 4,894 4,832 4,753 4,801 4,782 36 1- to 4-family 1,980 1,893 n.a. 1,893 1,956 1,894 1,967 2,007 37 Multifamily 3,248 3,001 n.a. 3,001 2,876 2,859 2,834 2,775 38 Federal National Mortgage Association 71,814 78,256 87,940 78,256 80,975 83,243 84,850 87,940 39 1- to 4-family 66,500 73,045 82,175 73,045 75,770 77,633 79,175 82,175 40 Multifamily 5,314 5,211 5,765 5,211 5,205 5,610 5,675 5,765 41 Federal Land Banks 50,350 51,052 50,679 51,052 51,004 51,136 51,182 50,679 4? 1- to 4-family 3,068 3,000 2,948 3,000 2,982 2,958 2,954 2,948 43 Farm 47,282 48,052 47,731 48,052 48,022 48,178 48,228 47,731 44 Federal Home Loan Mortgage Corporation 4,733 7,632 10,125 7,632 8,979 9,478 9,447 10,125 45 1- to 4-family 4,686 7,559 9,425 7,559 8,847 8,931 8,841 9,425 46 Multifamily 47 73 700 73 132 547 606 700 47 Mortgage pools or trusts2 216,654 285,073 331,019 285,073 296,481 305,051 317,548 331,019 48 Government National Mortgage Association 118,940 159,850 179,873 159,850 166,261 170,893 175,770 179,873 49 1- to 4-family 115,831 155,801 175,089 155,801 161,943 166,415 171,095 175,089 50 Multifamily 3,109 4,049 4,784 4,049 4,318 4,478 4,675 4,784 51 Federal Home Loan Mortgage Corporation 42,964 57,895 70,417 57,895 59,376 61,267 63,964 70,417 52 1- to 4-family 42,560 57,273 69,817 57,273 58,776 60,636 63,352 69,817 53 Multifamily 404 622 600 622 600 631 612 600 54 Federal National Mortgage Association3 14,450 25,121 36,215 25,121 28,354 29,256 32,888 36,215 55 1- to 4-family 14,450 25,121 35,965 25,121 28,354 29,256 32,730 35,965 56 Multifamily n.a. n.a. 250 n.a. n.a. n.a. 158 250 57 Farmers Home Administration 40,300 42,207 44,514 42,207 42,490 43,635 44,926 44,514 58 1- to 4-family 20,005 20,404 21,578 20,404 20,573 21,331 21,595 21,578 59 Multifamily 4,344 5,090 5,835 5,090 5,081 5,081 5,618 5,835 60 Commercial 7,011 7,351 7,403 7,351 7,456 7,764 7,844 7,403 61 Farm 8,940 9,362 9,698 9,362 9,380 9,459 9,869 9,698 67 Individual and others4 278,978' 284,955' 294,979 284,955' 288,293' 293,237' 294,448' 294,979 63 1- to 4-family5 189,121' 189,189' 192,243 189,189' 190,522' 193,304' 192,809' 192,243 64 Multifamily 30,208' 31,433' 32,754 31,433' 31,776' 32,169' 32,622' 32,754 65 Commercial 30,868' 34,931' 40,131 34,931' 36,545' 38,080' 39,204' 40,131 66 Farm 28,781' 29,402' 29,851 29,402' 29,450' 29,684' 29,813' 29,851 1. Includes loans held by nondeposit trust companies but not bank trust 5. Includes estimate of residential mortgage credit provided by individuals. departments. NOTE. Based on data from various institutional and governmental sources, with 2. Outstanding principal balances of mortgages backing securities insured or some quarters estimated in part by the Federal Reserve in conjunction with the guaranteed by the agency indicated. Federal Home Loan Bank Board and the Department of Commerce. Separation of 3. Outstanding balances on FNMA's issues of securities backed by pools of nonfarm mortgage debt by type of property, if not reported directly, and conventional mortgages held in trust. Implemented by FNMA in October 1981. interpolations and extrapolations when required, are estimated mainly by the 4. Other holders include mortgage companies, real estate investment trusts, Federal Reserve. Multifamily debt refers to loans on structures of five or more state and local credit agencies, state and local retirement funds, noninsured units. pension funds, credit unions, and U.S. agencies for which amounts are small or for which separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change A Millions of dollars 1984 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998811 11998822 11998833 May June July Aug. Sept. Oct. Nov. Dec. Amounts outstanding (end of period) 1 Total 335,691 355,849 396,082 418,080 427,565 435,367 443,537 450,131 455,318 463,516 477,014 By major holder 2 Commercial banks 147,622 152,490 171,978 186,668 191,519 195,265 199,654 202,452 204,582 206,635 212,391 3 Finance companies .... 89,818 98,693 102,862 102,967 104,460 106,219 106,881 108,437 109,289 111,196 112,548 4 Credit unions 45,953 47,253 53,471 58,517 59,893 61,151 62,679 63,808 64,716 66,528 67,858 5 Retailers2 31,348 32,735 35,911 33,730 34,206 34,022 34,294 34,426 34,802 36,000 39,873 6 Savings and loans 12,410 15,823 21,615 24,915 25,837 26,767 27,918 28,868 29,756 30,857 31,905 7 Gasoline companies ... 4,403 4,063 4,131 4,020 4,289 4,472 4,452 4,328 4,205 4,132 4,108 8 Mutual savings banks .. 4,137 4,792 6,114 7,263 7,361 7,471 7,659 7,812 7,968 8,168 8,331 By major type of credit 9 Automobile 125,331 131,086 142,449 152,225 155,937 159,649 162,038 164,361 166,028 168,095 169,951 10 Commercial banks... 58,081 59,555 67,557 75,787 78,018 80,103 81,786 82,706 83,620 84,326 85,501 11 Indirect paper 34,375 34,755 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Direct loans 23,706 23,472 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Credit unions 21,975 22,596 25,574 27,988 28,646 29,248 29,979 30,519 30,953 31,820 32,456 14 Finance companies .. 45,275 48,935 49,318 48,450 49,273 50,298 50,273 51,136 51,455 51,949 51,994 15 Revolving 64,500 69,998 80,823 82,436 84,598 85,588 87,788 89,742 91,017 93,468 101,067 16 Commercial banks... 32,880 36,666 44,184 47,936 49,374 50,358 52,313 54,258 55,276 56,641 60,549 17 Retailers 27,217 29,269 32,508 30,480 30,935 30,758 31,023 31,156 31,536 32,695 36,410 18 Gasoline companies . 4,403 4,063 4,131 4,020 4,289 4,472 4,452 4,328 4,205 4,132 4,108 19 Mobile home 17,958 22,254 23,680 24,104 24,427 24,751 25,178 25,482 25,484 25,686 25,892 20 Commercial banks... 10,187 9,605 9,842 9,573 9,621 9,681 9,711 9,761 9,627 9,613 9,610 21 Finance companies .. 4,494 9,003 9,365 9,434 9,528 9,612 9,786 9,857 9,890 9,892 9,901 22 Savings and loans ... 2,788 3,143 3,906 4,478 4,644 4,811 5,018 5,189 5,282 5,477 5,663 23 Credit unions 489 503 567 619 634 647 663 675 685 704 718 24 Other 127,903 132,511 149,130 159,315 162,603 165,379 168,533 170,546 172,789 176,267 180,104 25 Commercial banks... 46,474 46,664 50,395 53,372 54,506 55,123 55,844 55,727 56,059 56,055 56,731 26 Finance companies .. 40,049 40,755 44,179 45,083 45,659 46,309 46,822 47,444 47,944 49,355 50,653 27 Credit unions 23,490 24,154 27,330 29,910 30,613 31,256 32,037 32,614 33,078 34,004 34,684 28 Retailers 4,131 3,466 3,403 3,250 3,271 3,264 3,271 3,270 3,266 3,305 3,463 29 Savings and loans ... 9,622 12,680 17,709 20,437 21,193 21,956 22,900 23,679 24,474 25,380 26,242 30 Mutual savings banks 4,137 4,792 6,114 7,263 7,361 7,471 7,659 7,812 7,968 8,168 8,331 Net change (during period)3 31 Total 18,217 17,886 40,233 10,233 7,825 7,106 5,998 4,283 6,275 7,950 6,948 By major holder 32 Commercial banks 607 4,442 19,488 6,065 3,835 3,192 2,631 1,384 2,756 2,483 3,028 33 Finance companies .... 13,062 4,504 4,169 1,304 1,353 1,402 1,111 1,204 1,191 1,718 796 34 Credit unions 1,913 1,298 6,218 1,453 962 1,566 844 686 1,216 1,990 1,130 35 Retailers2 1,103 651 3,176 476 471 -101 206 132 103 336 635 36 Savings and loans 1,682 2,290 5,792 979 1,069 847 1,124 769 823 1,143 1,121 37 Gasoline companies ... -65 -340 68 46 89 -40 -51 -135 90 102 -11 38 Mutual savings banks .. -85 251 1,322 -90 46 240 133 243 96 178 249 By major type of credit 39 Automobile 8,495 4,898 11,363 3,689 2,897 3,422 1,777 1,317 2,357 2,724 2,066 40 Commercial banks... -3,455 -9 8,002 2,807 1,907 1,852 1,150 434 1,057 1,019 1,275 41 Indirect paper -858 225 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 42 Direct loans -2,597 -234 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 43 Credit unions 914 622 2,978 695 461 750 405 327 581 955 537 44 Finance companies .. 11,033 3,505 329 187 529 820 222 556 719 750 254 45 Revolving 4,467 4,365 10,825 2,817 1,569 640 1,314 1,324 1,496 1,714 1,571 46 Commercial banks... 3,115 3,808 7,518 2,298 1,047 764 1,159 1,323 1,279 1,289 1,001 47 Retailers 1,417 897 3,239 473 433 -84 206 136 127 323 581 48 Gasoline companies . -65 -340 68 46 89 -40 -51 -135 90 102 -11 49 Mobile home 1,049 609 1,426 302 454 462 573 318 -216 -29 -29 50 Commercial banks... -186 -508 237 -50 10 31 4 4 -91 -1 29 51 Finance companies .. 749 471 430 156 258 185 346 150 -210 -232 -252 52 Savings and loans ... 466 633 763 183 174 230 214 157 72 184 181 53 Credit unions 20 14 64 13 12 16 9 7 13 20 13 54 Other 4,206 3,224 16,619 3,425 2,905 2,582 2,334 1,324 2,638 3,541 3,340 55 Commercial banks... 1,133 372 3,731 1,010 871 545 318 -377 511 176 723 56 Finance companies .. 1,280 528 3,424 961 566 397 543 498 682 1,200 794 57 Credit unions 975 662 3,176 745 489 800 430 352 622 1,015 580 58 Retailers -314 -246 -63 3 38 -17 0 -4 -24 13 54 59 Savings and loans ... 1,217 1,657 5,029 796 895 617 910 612 751 959 940 60 Mutual savings banks -85 251 1,322 -90 46 240 133 243 96 178 249 • These data have been revised from July 1979 through February 1984. 3. 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, NOTE. Total consumer noninstallment credit outstanding—credit scheduled to and scheduled to be repaid (or with the option of repayment) in two or more be repaid in a lump sum, including single-payment loans, charge accounts, and installments. service credit—amounted to, not seasonally adjusted, $80.7 billion at the end of 2. Includes auto dealers and excludes 30-day charge credit held by travel and 1981, $85.9 billion at the end of 1982, and $96.9 billion at the end of 1983. entertainment companies. These data also appear in the Board's G.19 (421) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Installment Credit A41 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT Percent unless noted otherwise June July Aug. Sept. Oct. Nov Dec. INTEREST RATES Commercial banks1 1 48-month new car2 2 24-month personal 16.83 13.92 14.08 13.91 3 120-month mobile home2 18.65 16.68 16.75 16.63 4 Credit card 18.05 15.91 15.72 15.60 Auto finance companies 18.51 18.73 18.81 18.82 5 New car 6 Used car 16.15 12.58 15.24 14.33 14.68 15.01 15.16 15.18 15.24 15.24 20.75 18.74 18.34 17.64 17.77 17.99 18.10 18.19 18.30 18.34 OTHER TERMS3 Maturity (months) 7 New car 8 Used car 46.0 45.9 50.2 48.2 48.6 49.2 49.5 49.7 50.0 50.2 Loan-to-value ratio 34.0 37.9 39.8 39.8 39.8 39.8 39.9 39.9 39.0 39.8 9 New car 10 Used car 85.3 86.0 Amount financed (dollars) 90.3 92.0 93 92 11 New car 12 Used car 8,178 8,787 9,707 9,311 9,377 9,409 9,402 9,449 9,577 9,707 4,746 5,033 5,975 5,774 5,763 5,753 5,792 5,826 5,900 5,975 1. Data for midmonth of quarter only. NOTE. These data also appear in the Board's G.19 (421) release. For address, 2. Before 1983 the maturity for new car loans was 36 months, and for mobile see inside front cover, home loans was 84 months. 3. At auto finance companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1982 1983 1984 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 386.0 344.6 380.4 404.1 526.4 715.3 358.1 450.1 448.9 563.8 697.9 732.6 By sector and instrument 2 U.S. government 37.4 79.2 87.4 161.3 186.6 198.8 104.1 218.4 222.0 151.1 177.4 220.2 3 Treasury securities 38.8 79.8 87.8 162.1 186.7 199.0 105.5 218.8 222.1 151.2 177.6 220.3 4 Agency issues and mortgages -1.4 -.6 -.5 -.9 -.1 -.2 -1.4 -.4 -.1 -.1 -.2 -.1 5 Private domestic nonfinancial sectors 348.6 265.4 293.1 242.8 339.8 516.5 254.0 231.7 266.9 412.7 520.5 512.4 6 Debt capital instruments 211.2 192.0 159.1 158.9 239.3 288.4 140.7 177.2 214.4 264.2 280.4 296.4 7 Tax-exempt obligations 30.3 30.3 22.7 53.8 56.3 54.6 43.9 63.7 62.8 49.7 37.9 71.3 8 Corporate bonds 17.3 26.7 21.8 18.7 15.7 32.2 12.0 25.3 23.0 8.4 24.1 40.3 9 Mortgages 163.6 135.1 114.6 86.5 167.3 201.5 84.8 88.2 128.6 206.0 218.3 184.8 10 Home mortgages 120.0 96.7 76.0 52.5 108.7 128.9 53.6 51.3 83.8 133.6 140.9 116.9 11 Multifamily residential 7.8 8.8 4.3 5.5 8.4 13.8 5.1 5.8 2.8 13.9 17.1 10.4 12 Commercial 23.9 20.2 24.6 23.6 47.3 57.3 19.7 27.5 40.3 54.3 58.5 56.1 13 Farm 11.8 9.3 9.7 5.0 2.9 1.6 6.5 3.5 1.6 4.1 1.8 1.3 14 Other debt instruments 137.5 73.4 134.0 83.9 100.5 228.1 113.2 54.6 52.5 148.5 240.2 216.1 15 Consumer credit 45.4 6.3 26.7 21.0 51.3 100.6 20.6 21.4 35.9 66.6 103.0 98.2 16 Bank loans n.e.c 51.2 36.7 54.7 55.5 27.3 71.5 69.0 42.0 13.3 41.2 83.2 59.7 17 Open market paper 11.1 5.7 19.2 -4.1 -1.2 23.8 10.0 -18.2 -10.6 8.3 31.5 16.0 18 Other 29.7 24.8 33.4 11.5 23.1 32.3 13.6 9.4 13.9 32.3 22.4 42.1 19 By borrowing sector 348.6 265.4 293.1 242.8 339.8 516.5 254.0 231.7 266.9 412.7 520.5 512.4 20 State and local governments 17.6 17.2 6.2 31.3 36.7 33.0 24.1 38.5 41.9 31.6 18.9 47.0 21 Households 179.3 122.1 127.5 94.5 175.4 241.6 94.7 94.3 134.8 216.0 236.6 246.6 22 Farm 21.4 14.4 16.3 7.6 4.3 2.2 9.6 5.6 .8 7.9 .6 3.8 23 Nonfarm noncorporate 34.4 33.7 40.2 39.5 63.9 76.3 36.6 42.3 50.1 77.6 86.1 66.5 24 Corporate 96.0 78.1 102.9 70.0 59.5 163.5 89.0 51.0 39.3 79.6 178.3 148.6 25 Foreign net borrowing in United States 20.2 27.2 27.2 15.7 18.9 1.7 10.2 21.2 15.3 22.5 19.2 -15.7 26 Bonds 3.9 .8 5.4 6.7 3.8 2.7 2.4 11.0 4.6 2.9 1.1 4.4 27 Bank loans n.e.c 2.3 11.5 3.7 -6.2 4.9 -6.2 -7.6 -4.7 11.3 -1.5 -6.0 -6.3 28 Open market paper 11.2 10.1 13.9 10.7 6.0 .4 12.5 9.0 -4.6 16.5 18.9 -18.1 29 U.S. government loans 2.9 4.7 4.2 4.5 4.3 4.8 3.0 6.0 3.9 4.6 5.3 4.4 30 Total domestic plus foreign 406.2 371.8 407.6 419.8 545.3 717.0 368.3 471.4 504.2 586.3 717.1 717.0 Financial sectors 31 Total net borrowing by financial sectors 82.4 62.9 84.1 69.0 90.7 126.5 84.2 53.8 74.0 107.3 121.0 131.9 By instrument 32 U.S. government related 47.9 44.8 47.4 64.9 67.8 74.2 60.0 69.7 66.2 69.4 69.1 79.2 33 Sponsored credit agency securities 24.3 24.4 30.5 14.9 1.4 30.0 22.4 7.5 -4.1 6.9 30.8 29.2 34 Mortgage pool securities 23.1 19.2 15.0 49.5 66.4 44.2 36.8 62.2 70.3 62.5 38.3 50.0 3*1 .6 1.2 1.9 .4 .8 36 Private financial sectors 34.5 18.1 36.7 4.1 22.9 52.3 24.2 -16.0 7.8 38.0 51.9 52.7 37 Corporate bonds 7.8 7.1 -.8 2.5 17.1 14.5 -2.5 7.6 15.2 18.9 14.9 14.1 38 Mortgages * -.1 -.5 .1 * * .1 .1 * * * * 39 Bank loans n.e.c -.5 -.9 .9 1.9 -.2 .9 3.2 .6 -2.5 2.2 .1 1.7 40 Open market paper 18.0 4.8 20.9 -1.2 13.0 21.2 12.3 -14.7 7.2 18.8 21.2 21.1 41 Loans from Federal Home Loan Banks 9.2 7.1 16.2 .8 -7.0 15.7 11.1 -9.5 -12.1 -2.0 15.7 15.7 By sector 42 Sponsored credit agencies 24.8 25.6 32.4 15.3 1.4 30.0 23.2 7.5 -4.1 6.9 30.8 29.2 43 Mortgage pools 23.1 19.2 15.0 49.5 66.4 44.2 36.8 62.2 70.3 62.5 38.3 50.0 44 Private financial sectors 34.5 18.1 36.7 4.1 22.9 52.3 24.2 -16.0 7.8 38.0 51.9 52.7 45 Commercial banks 1.6 .5 .4 1.2 .5 2.7 .7 1.7 .8 .2 4.8 .6 46 Bank affiliates 6.5 6.9 8.3 1.9 8.6 10.8 9.7 -5.8 6.1 11.1 20.0 1.5 47 Savings and loan associations 12.6 7.4 15.5 2.5 -2.7 20.1 14.3 -9.3 -10.0 4.5 18.2 21.9 48 Finance companies 16.5 5.8 12.8 -.9 17.0 19.5 * -1.9 11.4 22.7 9.6 29.4 49 REITs -1.3 -2.2 .2 .1 .2 .1 .1 .1 .2 .2 .1 .1 All sectors 50 Total net borrowing 488.7 434.7 491.8 488.8 635.9 843.5 452.5 525.1 578.2 693.6 838.1 848.9 51 U.S. government securities 84.8 122.9 133.0 225.9 254.4 273.1 163.5 288.3 288.4 220.5 246.7 299.5 52 State and local obligations 30.3 30.3 22.7 53.8 56.3 54.6 43.9 63.7 62.8 49.7 37.9 71.3 53 Corporate and foreign bonds 29.0 34.6 26.4 27.8 36.5 49.4 11.8 43.8 42.8 30.3 40.1 58.8 54 Mortgages 163.5 134.9 113.9 86.5 167.2 201.5 84.8 88.2 128.5 206.0 218.2 184.7 55 Consumer credit 45.4 6.3 26.7 21.0 51.3 100.6 20.6 21.4 35.9 66.6 103.0 98.2 56 Bank loans n.e.c 52.9 47.3 59.3 51.2 32.0 66.2 64.6 37.9 22.1 41.9 77.3 55.1 57 Open market paper 40.3 20.6 54.0 5.4 17.8 45.3 34.8 -23.9 -8.0 43.6 71.5 19.0 58 Other loans 42.4 37.8 55.8 17.2 20.3 52.8 28.5 5.9 5.7 35.0 43.4 62.2 External corporate equity funds raised in United States 59 Total new share issues -3.8 22.2 -4.1 35.3 67.8 -29.8 23.3 47.2 83.5 52.0 -43.3 -16.4 60 Mutual funds .1 5.2 6.3 18.4 32.8 38.1 12.5 24.3 36.8 28.9 39.0 37.2 61 All other -3.9 17.1 -10.4 16.9 34.9 -67.9 10.9 22.9 46.8 23.1 -82.3 -53.6 62 Nonfinancial corporations -7.8 12.9 -11.5 11.4 28.3 -72.1 7.0 15.8 38.2 18.4 -84.5 -59.6 63 Financial corporations 3.2 2.1 .8 4.0 2.7 3.0 3.9 4.1 2.8 2.5 2.9 3.2 64 Foreign shares purchased in United States .8 2.1 .3 1.5 4.0 1.1 -.1 3.0 5.7 2.2 -.7 2.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 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. 1982 1983 1984 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997799 11998800 11998811 11998822 11998833 11998844 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 386.0 344.6 380.4 404.1 526.4 715.3 358.1 450.1 488.9 563.8 697.9 732.6 By public agencies and foreign 2 Total net advances 75.2 97.0 97.7 109.1 117.1 142.6 110000..88 111177..33 111199..77 111144..66 112233..77 116611..55 3 U.S. government securities -6.3 15.7 17.2 18.0 27.6 35.8 9.7 26.2 40.5 14.6 33.4 38.2 4 Residential mortgages 35.8 31.7 23.5 61.0 76.1 56.5 47.6 74.4 80.1 72.0 52.0 61.1 5 FHLB advances to savings and loans 9.2 7.1 16.2 .8 -7.0 15.7 11.1 -9.5 -12.1 -2.0 15.7 15.7 6 Other loans and securities 36.5 42.4 40.9 29.3 20.5 34.6 32.4 26.2 11.1 29.9 22.6 46.6 Total advanced, by sector 7 U.S. government 19.0 23.7 24.1 16.0 9.7 16.7 14.8 17.1 9.1 10.3 6.1 27.2 8 Sponsored credit agencies 53.0 45.6 48.2 65.3 69.5 71.8 61.8 68.7 68.2 70.7 73.0 70.6 9 Monetary authorities 7.7 4.5 9.2 9.8 10.9 8.4 3.8 15.7 15.6 6.2 17.1 -.3 10 Foreign -4.6 23.2 16.3 18.1 27.1 45.7 20.4 15.8 26.8 27.4 27.5 64.0 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 47.9 44.8 47.4 64.9 67.8 74.2 60.0 6699..77 6666..22 6699..44 6699..11 7799..22 12 Foreign 20.2 27.2 27.2 15.7 18.9 1.7 10.2 21.2 15.3 22.5 19.2 -15.7 Private domestic funds advanced 13 Total net advances 379.0 319.6 357.3 375.6 495.9 648.6 327.5 423.8 450.8 541.1 666622..55 663344..77 14 U.S. government securities 91.1 107.2 115.8 207.9 226.9 237.3 153.7 262.0 247.8 205.9 213.2 261.3 15 State and local obligations 30.3 30.3 22.7 53.8 56.3 54.6 43.9 63.7 62.8 49.7 37.9 71.3 16 Corporate and foreign bonds 18.5 19.3 18.8 14.8 14.6 17.4 -.1 29.6 22.9 6.3 18.0 16.9 17 Residential mortgages 91.9 73.7 56.7 -3.2 40.9 86.1 11.0 -17.4 6.4 75.5 105.9 66.2 18 Other mortgages and loans 156.3 96.2 159.5 103.2 150.2 268.9 130.2 76.3 98.7 201.7 303.2 234.7 19 LESS: Federal Home Loan Bank advances 9.2 7.1 16.2 .8 -7.0 15.7 11.1 -9.5 -12.1 -2.0 15.7 15.7 Private financial intermediation 20 Credit market funds advanced by private financial institutions 313.9 281.5 323.4 285.6 376.7 541.9 274.4 296.7 323.2 430.1 522.2 561.6 21 Commercial banking 123.1 100.6 102.3 107.2 136.1 176.1 99.9 114.5 121.6 150.6 192.8 159.4 22 Savings institutions 56.5 54.5 27.8 31.3 136.8 147.7 25.2 37.4 128.9 144.6 157.0 138.4 23 Insurance and pension funds 85.9 94.3 97.4 108.8 98.8 113.2 111.4 106.3 89.5 108.1 95.6 130.8 24 Other finance 48.5 32.1 96.0 38.3 5.0 104.9 37.9 38.6 -16.8 26.8 76.7 133.1 25 Sources of funds 313.9 281.5 323.4 285.6 376.7 541.9 274.4 296.7 323.2 430.1 522.2 561.6 26 Private domestic deposits and RPs 137.4 169.6 211.9 174.7 203.5 283.9 147.6 201.9 192.7 214.2 277.0 290.7 27 Credit market borrowing 34.5 18.1 36.7 4.1 22.9 52.3 24.2 -16.0 7.8 38.0 51.9 52.7 28 Other sources 142.0 93.9 74.8 106.7 150.4 205.8 102.6 110.8 122.8 177.9 193.2 218.3 29 Foreign funds 27.6 -21.7 -8.7 -26.7 22.1 20.8 -28.3 -25.1 -14.2 58.5 15.7 25.9 30 Treasury balances .4 -2.6 -1.1 6.1 -5.3 3.8 -2.0 14.1 10.1 -20.8 .9 6.8 31 Insurance and pension reserves 72.8 83.9 90.4 104.6 99.2 108.2 111.4 97.8 90.0 108.4 107.6 108.9 32 Other, net 41.2 34.2 -5.9 22.8 34.4 72.9 21.5 24.1 36.8 31.9 69.0 76.8 Private domestic nonfinancial investors 33 Direct lending in credit markets 99.6 56.1 70.6 94.2 142.1 159.0 77.3 111.0 135.3 148.9 192.3 125.7 34 U.S. government securities 52.5 24.6 29.3 37.4 88.7 114.0 35.3 39.5 95.9 81.4 139.4 88.6 35 State and local obligations 9.9 7.0 10.5 34.4 42.5 31.8 30.1 38.7 52.7 32.3 21.5 42.1 36 Corporate and foreign bonds -1.4 -5.7 -8.1 -5.2 2.0 -6.2 -17.7 7.3 -1.7 5.7 7.8 -20.1 37 Open market paper 8.6 -3.1 2.7 -.1 3.9 1.0 3.5 -3.7 -8.1 15.9 3.0 -1.0 38 Other 30.0 33.3 36.3 27.8 5.0 18.4 26.2 29.3 -3.4 13.5 20.7 16.2 39 Deposits and currency 146.8 181.1 221.9 181.9 222.6 294.6 152.1 211.7 214.5 230.7 290.2 299.0 40 Currency 8.0 10.3 9.5 9.7 14.3 14.2 6.7 12.7 14.8 13.8 17.7 10.7 41 Checkable deposits 18.3 5.2 18.0 15.7 21.7 16.4 1.9 29.5 48.0 -4.7 36.6 -3.9 42 Small time and savings accounts 59.3 82.9 47.0 138.2 219.1 148.0 83.2 193.1 278.6 159.7 124.9 171.2 43 Money market fund shares 34.4 29.2 107.5 24.7 -44.1 47.2 39.4 10.0 -84.0 -4.2 30.2 64.2 44 Large time deposits 18.8 45.8 36.9 -7.7 -7.5 69.8 21.9 -37.3 -61.0 45.9 80.0 59.7 45 Security RPs 6.6 6.5 2.5 3.8 14.3 2.4 1.1 6.6 11.0 17.5 5.3 -.5 46 Deposits in foreign countries 1.5 1.1 .5 -2.5 4.8 -3.4 -2.2 -2.9 7.0 2.7 -4.5 -2.3 47 Total of credit market instruments, deposits and currency 246.5 237.2 292.5 276.1 364.7 453.6 229.4 322.7 349.8 379.6 482.5 424.8 48 Public holdings as percent of total 18.5 26.1 24.0 26.0 21.5 19.9 27.4 24.9 23.7 19.5 17.2 22.5 49 Private financial intermediation (in percent) 82.8 88.1 90.5 76.0 76.0 83.5 83.8 70.0 71.7 79.5 78.8 88.5 50 Total foreign funds 23.0 1.5 7.6 -8.6 49.2 66.5 -7.9 -9.3 12.6 85.9 43.1 89.9 MEMO: Corporate equities not included above 51 Total net issues -3.8 22.2 -4.1 35.3 67.8 -29.8 23.3 47.2 83.5 52.0 -43.3 --1166..44 52 Mutual fund shares .1 5.2 6.3 18.4 32.8 38.1 12.5 24.3 36.8 28.9 39.0 37.2 53 Other equities -3.9 17.1 -10.4 16.9 34.9 -67.9 10.9 22.9 46.8 23.1 -82.3 -53.6 54 Acquisitions by financial institutions 12.9 24.9 20.1 39.2 57.5 19.4 11.0 67.3 75.9 39.2 7.6 31.3 55 Other net purchases -16.7 -2.7 -24.2 -3.9 10.2 -49.2 12.3 -20.1 7.6 12.8 -50.8 -47.6 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. NOTE. Full statements for sectors and transaction types in flows and in amounts 29. Foreign deposits at commercial banks, bank borrowings from foreign outstanding may be obtained from Flow of Funds Section, Division of Research branches, and liabilities of foreign banking agencies to foreign affiliates. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits at commercial banks. D.C. 20551. 31. Excludes net investment of these reserves in corporate equities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1984 1985 MMeeaassuurree 11998822 11998833 11998844 May June July Aug. Sept. Oct. Nov.' Dec.' Jan. 1 Industrial production 138.6 147.6 163.4 162.8 164.4 165.9 166.0 165.0 164.4' 165.0 165.9 166.6 Market groupings 2 Products, total 141.8 149.2 164.8 163.3 165.3 167.4 167.2 166.4 166.9' 167.8 169.2 170.1 3 Final, total 141.5 147.1 162.8 161.1 163.1 165.2 165.1 164.6 165.2' 166.4 167.7 168.8 4 Consumer goods 142.6 151.7 161.8 161.7 163.0 163.8 162.5 161.6 161.6' 162.9 163.6 164.7 5 Equipment 139.8 140.8 164.1 160.3 163.3 167.0 168.7 168.9 170.1' 171.2 173.4 174.3 6 Intermediate 143.3 156.6 172.5 171.6 173.5 175.8 175.1 173.0 173.4' 173.2 174.6 175.0 7 Materials 133.7 145.2 161.2 162.0 162.9 163.5 164.0 162.8 160.4' 160.5 160.7 161.3 Industry groupings 8 Manufacturing 137.6 148.2 164.9 164.2 165.7 167.3 167.6 166.6 166.2' 166.7 168.0 168.4 Capacity utilization (percent)1 9 Manufacturing 71.1 75.2 n.a. 81.7 82.2 82.9 82.8 82.2 81.7' 81.7 82.1 82.1 10 Industrial materials industries 70.1 75.2 n.a. 82.7 82.9 83.1 83.3 82.4 81.C 80.9 80.8 80.9 11 Construction contracts (1977 = 100)2 111.0 138.0 150.0 165.0 148.0 152.0 151.0 144.0 146.0 158.0 148.0 n.a. 12 Nonagricultural employment, total3 136.1 137.0 143.1 142.5 143.1 143.4 143.6 144.1 144.6 145.1 145.4 145.9 13 Goods-producing, total 102.2 100.4 106.8 106.6 107.1 107.5 107.7 107.3 107.6 107.8 108.4 108.7 14 Manufacturing, total 96.6 95.1 100.7 100.6 100.9 101.3 101.4 100.9 101.2 101.4 101.9 102.0 15 Manufacturing, production-worker ... 89. 1' 87.9' 94.0 94.1 94.3 94.6 94.8 94.0 94.3 94.4 94.9 95.0 16 Service-producing 154.7 157.1 163.0 162.2 162.8 163.1 163.4 164.2 164.9 165.6 165.7 166.3 17 Personal income, total 410.3 435.6 478.2 472.8 477.2 480.6 483.5 487.0 489.1' 492.3 494.2 496.8 18 Wages and salary disbursements 367.4 388.6 422.5 419.2 422.6 424.4 425.5 428.4 428.8 432.6 436.5 438.0 19 Manufacturing 285.5 294.7 323.6 321.9 323.1 324.4 326.2 325.7 326.7 330.0 333.3 334.2 20 Disposable personal income4 398.0 427.1 470.5 465.3 469.1 472.5 475.5 479.1 481.1' 483.7 484.9 487.6 21 Retail sales5 326.0 373.0 411.5 413.6 417.7 410.5 407.3 413.6 415.5 421.8 419.8 422.9 Prices6 22 Consumer 289.1 298.4 311.1 309.7 310.7 311.7 313.0 314.5 315.3 315.3 315.5 316.1 23 Producer finished goods 280.7 285.2 291.2 291.1 290.9 292.3 291.3 289.8 291.6 292.3 292.4 292.7 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1984 1985 CCaatteeggoorryy 11998822 11998833 11998844 June July Aug. Sept. Oct. Nov. Dec. Jan. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 174,450 176,414 178,602 178,501 178,669 178,821 179,005 179,181 179,353 179,524 179,600 2 Labor force (including Armed Forces)1 112,383 113,749 115,763 115,836 116,097 115,867 116,006 116,241 116,292 116,682 117,091 3 Civilian labor force 110,204 111,550 113,544 113,619 113,868 113,629 113,764 114,016 114,074 114,464 114,875 4 Nonagricultural industries2 96,125 97,450 101,685 102,023 102,044 101,884 102,075 102,480 102,598 102,888 103,071 5 Agriculture 3,401 3,383 3,321 3,368 3,333 3,264 3,319 3,169 3,334 3,385 3,320 Unemployment 6 Number 10,678 10,717 8,539 8,228 8,491 8,481 8,370 8,367 8,142 8,191 8,484 7 Rate (percent of civilian labor force) ... 9.7 9.6 7.5 7.2 7.5 7.5 7.4 7.3 7.1 7.2 7.4 8 Not in labor force 62,067 62,665 62,839 62,665 62,572 62,954 62,999 62,940 63,061 62,842 62,509 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 89,566 90,138 94,166 94,135 94,350 94,523 94,807 95,157' 95,494' 95,661' 96,009 10 Manufacturing 18,781 18,497 19,589 19,629 19,696 19,725 19,616 19,686 19,718' 19,810' 19,833 11 Mining 1,128 957 999 1,002 1,007 1,017 1,020 1,012 1,009 1,003' 992 12 Contract construction 3,905' 3,940 4,315 4,343 4,356 4,356 4,374 4,382 4,396' 4,452' 4,522 13 Transportation and public utilities 5,082 4,958 5,169 5,163 5,175 5,202 5,213 5,225 5,226' 5,238 5,248 14 Trade 20,457 20,804 21,790 21,747 21,811 21,839 21,930 22,080 22,267' 22,280' 22,442 15 Finance 5,341 5,467 5,665 5,676 5,676 5,679 5,684 5,705 5,725' 5,748 5,761 16 Service 19,036 19,665 20,666 20,681 20,701 20,748 20,861 20,964 21,030' 21,085' 21,151 17 Government 15,837 15,851 15,973 15,894 15,928 15,957 16,109 16,103' 16,123' 16,045' 16,060 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

A46 Domestic Nonfinancial Statistics • April 1985 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1984 1984 1984 Ql Q2 Q3 Q4' Ql Q2 Q3 Q4 Ql Q2 Q3 Q4r Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 159.8 163.1 165.6 165.1 198.4 199.7 201.1 202.4 80.5 81.7 82.4 81.5 2 Mining 124.2 125.1 129.0 124.3 165.7 165.9 166.1 166.3 75.0 75.4 77.7 74.8 3 Utilities 179.2 183.1 181.1 182.2 213.8 215.3 216.8 218.3 83.8 85.0 83.5 83.5 4 Manufacturing 161.0 164.4 167.2 167.0 199.5 201.0 202.5 204.0 80.7 81.8 82.5 81.8 5 Primary processing ... 160.5 162.5 162.2 160.8 196.5 197.2 198.0 198.7 81.7 82.4 81.9 80.9 6 Advanced processing 161.7 165.2 169.7 169.9 201.1 203.0 204.9 206.8 80.3 81.4 82.8 82.1 7 Materials 158.8 162.1 163.4 160.5 194.7 195.9 197.2 198.4 81.6 82.7 82.9 80.9 8 Durable goods 157.6 162.0 164.6 162.5 197.1 198.3 199.5 200.8 79.9 81.7 82.5 80.9 y Metal materials .... 97.3 100.3 97.2 92.0 139.1 138.5 137.9 137.3 70.0 72.4 70.5 67.0 10 Nondurable goods.... 183.7 186.6 185.7 182.4 221.8 223.4 225.2 226.9 82.8 83.5 82.5 80.4 11 Textile, paper, and chemical.. 193.2 195.9 194.9 190.7 234.2 236.2 238.2 240.3 82.5 82.9 81.8 79.4 12 Paper 165.8 168.5 171.0 167.9 168.5 169.5 170.5 171.5 98.4 99.4 100.3 97.9 13 Chemical 236.7 240.4 238.4 235.5 302.3 305.2 308.0 310.9 78.3 78.8 77.4 75.8 14 Energy materials 131.2 132.4 133.1 128.8 155.8 156.4 157.0 157.6 84.2 84.6 84.8 81.7 Previous cycle1 Latest cycle2 1984 1984 1985 High Low High Low Jan. May June July Aug. Sept. Oct/ Nov/ Dec/ Jan. Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 69.6 80.1 81.5 82.1 82.7 82.5 81.9 81.4 81.5 81.7 81.9 16 Mining 91.8 86.0 88.5 69.6 75.4 75.4 76.6 78.3 77.3 77.4 74.3 75.0 74.9 75.2 17 Utilities 94.9 82.0 86.7 79.0 84.8 84.7 85.4 84.1 83.3 83.2 82.9 84.6 82.8 84.3 18 Manufacturing 87.9 69.0 87.5 68.8 80.1 81.7 82.2 82.8 82.8 82.0 81.7 81.7 82.1 82.1 19 Primary processing ... 93.7 68.2 91.4 66.2 80.6 82.4 82.6 82.3 82.1 81.5 81.2 80.7 80.8 80.8 20 Advanced processing . 85.5 69.4 85.9 70.0 80.0 81.2 81.9 83.0 83.1 82.4 81.8 82.0 82.6 82.7 21 Materials 92.6 69.3 88.9 66.6 80.6 82.7 82.9 83.1 83.2 82.4 81.0 80.9 80.8 80.9 22 Durable goods 91.4 63.5 88.4 59.8 78.5 81.5 82.0 82.5 82.9 82.2 81.3 80.8 80.6 80.4 23 Metal materials 97.8 68.0 95.4 46.2 67.3 72.2 72.1 70.8 70.8 69.8 67.6 66.7 66.6 65.6 24 Nondurable goods .... 94.4 67.4 91.7 70.7 81.9 83.9 83.3 83.0 82.9 81.5 80.5 80.4 80.4 80.1 25 Textile, paper, and chemical 95.1 65.4 92.3 68.6 81.5 83.3 82.6 82.5 82.4 80.5 79.7 79.3 79.4 79.0 26 Paper 99.4 72.4 97.9 86.3 99.3 99.8 99.8 101.5 99.7 99.7 98.7 97.0 98.0 n.a. 27 Chemical 95.5 64.2 91.3 64.0 76.7 79.0 78.4 77.9 78.1 76.1 75.7 75.9 75.7 n.a. 28 Energy materials 94.5 84.4 88.9 78.5 84.4 84.3 85.0 85.3 84.7 84.3 81.0 82.0 82.1 83.7 1. Monthly high 1973; monthly low 1975. NOTE. These data also appear in the Board's G.3 (402) release. For address, see 2. Monthly highs 1978 through 1980; monthly lows 1982. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted 1967 pro- 1984 Grouping por- avg. tion Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct/ Nov. Dec.? Jan Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 163.4 158.5 160.0 160.8 162.1 162.8 164.4 165.9 166.0 165.0 164.4 165.0 2 Products 60.71 164.8 159.7 160.4 161.1 162.5 163.3 165.3 167.4 167.2 166.4 166.9 167.8 3 Final products 47.82 162.8 157.5 158.0 158.6 160.2 161.1 163.1 165.2 165.1 164.6 165.2 166.4 4 Consumer goods 27.68 161.8 159.5 159.4 160.2 161.4 161.7 163.0 163.8 162.5 161.6 161.6 162.9 5 Equipment 20.14 164.1 154.9 156.1 156.4 158.5 160.3 163.3 167.0 168.7 168.9 170.1 171.2 6 Intermediate products 12.89 172.5 167.8 169.0 170.2 171.0 171.6 173.5 175.8 175.1 173.0 173.4 173.2 7 Materials 39.29 161.2 156.6 159.4 160.4 161.5 162.0 162.9 163.5 164.0 162.8 160.4 160.5 Consumer goods 8 Durable consumer goods 7.89 162.2 163.4 162.5 163.1 162.2 161.4 163.6 163.7 162.6 159.6 158.7 162.1 9 Automotive products 2.83 181.4 184.5 182.1 184.1 180.9 179.8 184.3 185.0 181.8 173.0 171.9 184.0 10 Autos and utility vehicles 2.03 158.1 163.3 162.2 164.1 158.4 155.9 158.7 161.1 159.2 145.6 145.0 161.5 11 Autos 1.90 135.3 140.7 140.4 142.4 134.5 132.9 136.2 138.7 134.3 121.1 123.6 138.9 12 Auto parts and allied goods.... .80 240.5 238.4 232.6 234.7 238.0 240.6 249.3 245.8 239.1 242.7 240.2 241.1 13 Home goods 5.06 151.5 151.5 151.5 151.3 151.7 151.1 152.0 151.8 151.9 152.0 151.4 149.8 14 Appliances, A/C, and TV 1.40 134.3 136.4 135.1 134.4 136.1 134.0 134.9 133.4 132.3 136.4 133.5 130.5 15 Appliances and TV 1.33 137.5 140.0 138.6 138.0 138.8 136.7 138.0 136.9 135.9 140.2 136.8 133.2 16 Carpeting and furniture 1.07 179.5 183.1 178.7 180.2 181.0 179.6 179.4 179.5 180.8 179.3 178.1 177.5 17 Miscellaneous home goods 2.59 149.3 146.7 149.1 148.5 148.0 148.6 150.0 150.3 150.6 149.2 150.0 148.8 18 Nondurable consumer goods 19.79 161.6 157.9 158.2 159.1 161.1 161.8 162.7 163.9 162.4 162.4 162.7 163.2 19 Clothing 4.29 20 Consumer staples 15.50 1716 166.5 166.9 168.0 170.2 171.6 173.2 '174.5 172.7 173.1 173.8 174.2 21 Consumer foods and tobacco .. 8.33 156.5 156.8 157.6 160.4 161.0 161.9 162.9 161.8 162.1 162.4 161.5 22 Nonfood staples 7.17 184.3 178.2 178.7 180.1 181.6 183.9 186.3 188.0 185.4 185.9 187.0 189.0 23 Consumer chemical products 2.63 241.0 231.6 231.9 231.3 233.4 235.9 241.5 247.1 244.3 247.3 247.5 246.7 24 Consumer paper products ... 1.92 146.0 138.8 140.3 141.8 144.0 145.6 147.9 151.5 148.7 146.7 146.9 148.5 25 Consumer energy products .. 2.62 155.5 153.4 153.3 156.8 157.1 159.8 159.0 155.3 153.3 153.0 155.6 160.8 26 Residential utilities 1.45 180.0 172.8 177.7 177.4 181.1 182.4 178.6 175.0 174.1 177.4 186.6 Equipment 27 Business 12.63 181.1 170.7 171.9 172.1 173.5 176.5 181.1 185.5 187.6 186.4 187.3 188.4 28 Industrial 6.77 140.6 133.7 134.6 134.8 135.9 138.5 140.4 143.1 143.3 143.5 145.3 145.7 29 Building and mining 1.44 187.7 185.1 182.0 175.2 173.6 182.9 185.8 190.0 191.6 190.7 194.6 197.2 30 Manufacturing 3.85 127.5 119.7 120.9 124.2 126.2 127.4 128.6 130.1 129.7 129.8 131.0 130.2 31 Power 1.47 128.8 120.0 123.8 122.7 124.1 124.1 126.7 131.0 131.2 133.0 134.5 135.8 32 Commercial transit, farm 5.86 227.8 213.3 215.1 215.3 217.0 220.5 228.1 234.5 238.9 235.9 235.8 237.7 33 Commercial 3.26 325.4 303.2 305.9 306.9 309.6 315.5 326.3 333.4 339.2 336.5 338.5 341.6 34 Transit 1.93 115.3 110.1 110.1 109.2 108.9 109.7 115.1 120.4 124.5 121.4 117.8 118.2 35 Farm .67 76.4 73.6 75.7 75.0 78.0 77.1 76.1 81.8 80.3 76.4 76.1 76.2 36 Defense and space 7.51 135.6 128.3 129.5 130.1 133.2 133.1 133.5 135.9 136.8 139.5 141.1 142.3 Intermediate products 37 Construction supplies 6.42 159.0 155.5 156.6 159.1 159.6 159.5 160.9 161.9 160.9 158.2 158.6 157.2 38 Business supplies 6.47 185.9 180.1 181.3 181.3 182.3 183.5 186.1 189.5 189.1 187.6 188.0 189.1 39 Commercial energy products 1.14 193.8 192.1 191.6 187.0 190.0 190.8 195.3 194.9 193.3 194.5 194.8 199.6 Materials 40 Durable goods materials 20.35 161.7 154.6 158.6 159.5 161.3 161.6 163.0 164.2 165.3 164.3 162.9 162.3 41 Durable consumer parts 4.58 134.6 131.6 133.1 133.0 133.2 132.6 134.7 135.1 136.6 136.2 136.3 135.5 42 Equipment parts 5.44 212.5 198.2 204.0 206.7 210.9 210.6 214.0 218.8 220.1 219.6 216.1 216.1 43 Durable materials n.e.c 10.34 147.0 141.8 146.0 146.3 147.7 148.6 148.7 148.3 149.2 147.7 146.7 145.9 44 Basic metal materials 5.57 101.1 97.7 103.0 103.0 105.7 104.5 104.1 103.4 102.0 99.8 97.8 95.7 45 Nondurable goods materials 10.47 184.5 181.2 184.1 185.9 185.7 187.4 186.7 186.5 186.7 184.0 182.1 182.3 46 Textile, paper, and chemical materials 7.62 193.6 190.5 193.9 195.3 195.0 196.8 195.8 195.9 196.3 192.4 190.7 190.5 47 Textile materials 1.85 117.2 119.9 119.9 120.6 118.9 121.9 119.6 118.8 120.1 115.6 112.0 109.8 48 Paper materials 1.62 168.1 167.0 166.8 163.5 166.7 169.2 169.5 172.8 170.0 170.3 168.9 166.3 49 Chemical materials 4.15 237.7 231.3 237.6 241.1 240.0 241.1 240.2 239.3 240.6 235.3 234.5 236.0 50 Containers, nondurable 1.70 175.5 173.5 173.0 176.0 175.7 176.6 176.7 176.6 175.3 175.8 174.3 176.5 51 Nondurable materials n.e.c 1.14 137.5 130.5 135.2 137.7 138.6 140.5 140.5 138.8 139.6 140.8 136.0 136.6 52 Energy materials 8.48 131.3 131.3 131.0 131.3 132.1 131.9 133.2 133.7 133.0 132.7 127.6 129.2 53 Primary energy 4.65 119.3 119.3 121.3 119.6 119.5 119o8 120.1 122.7 121.8 121.6 113.1 114.9 54 Converted fuel materials 3.82 146.0 145.8 142.8 145.4 147.3 146.5 149.0 147.1 146.8 146.1 145.2 146.5 Supplementary groups 55 Home goods and clothing 9.35 139.6 140.1 140.3 140.1 141.0 139.8 139.6 139.7 139.6 138.9 138.3 137.7 56 Energy, total 12.23 142.3 141.6 141.4 141.9 142.8 143.3 144.5 144.0 143.0 142.8 139.8 142.5 57 Products 3.76 167.2 165.1 164.9 166.0 167.1 169.2 170.0 167.3 165.4 165.5 167.5 172.5 58 Materials 8.48 131.3 131.3 131.0 131.3 132.1 131.9 133.2 133.7 133.0 132.7 127.6 129.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1967 1984 11998855 Grouping c SS o II d CC e p p o ro r- - 1 a 9 v 8 g 4 . tion Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct/ Nov. Dec.P Jan/ Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities 12.05 151.9 151.4 148.9 150.4 151.3 152.1 154.1 154.4 153.0 153.3 150.5 153.1 151.3 153.4 2 Mining 6.36 125.7 124.8 124.1 123.8 123.3 125.0 127.0 129.9 128.3 128.7 123.6 124.8 124.6 125.2 3 Utilities 5.69 181.2 181.0 176.5 180.0 182.7 182.3 184.3 181.8 180.6 180.9 180.6 184.7 181.2 184.9 4 Electric 3.88 205.3 206.8 200.0 204.6 207.7 206.8 209.6 205.9 204.0 204.4 203.8 209.1 203.3 208.9 5 Manufacturing 87.95 164.9 159.5 161.4 162.1 163.4 164.2 165.7 167.3 167.6 166.6 166.2 166.7 168.0 168.4 6 Nondurable 35.97 179.5 175.2 177.2 177.6 179.1 179.9 181.3 181.8 181.7 180.3 179.4 179.9 180.7 180.8 7 Durable 51.98 154.8 148.6 150.5 151.4 152.6 153.3 154.9 157.2 157.8 157.1 157.1 157.6 159.2 159.8 Mining 8 Metal 10 .51 91.5 89.4 97.4 100.0 98.5 98.0 96.8 96.4 83.4 84.5 91.2 87.7 74.1 9 Coal 11.12 .69 155.8 151.5 163.2 164.0 151.4 153.9 161.5 176.5 171.7 173.7 127.8 134.4 142.1 144.5 10 Oil and gas extraction 13 4.40 121.6 123.1 119.6 118.2 118.8 120.4 121.6 122.8 122.5 122.4 122.6 123.6 123.5 123.8 11 Stone and earth minerals 14 .75 145.3 134.8 133.0 135.8 140.4 144.0 147.9 151.9 153.5 154.6 147.8 148.0 149.5 Nondurable manufactures 12 Foods 20 8.75 159.4 160.0 161.2 163.1 164.2 165.1 164.9 164.7 164.3 164.0 163.4 13 Tobacco products 21 .67 116.4 110.9 111.8 113.3 112.8 118.3 115.1 113.8 113.1 119.5 117.4 14 Textile mill products 22 2.68 138.7 143.9 142.3 143.5 140.0 140.5 140.7 139.8 140.3 135.4 133.3 132.8 133.0 15 Apparel products 23 3.31 16 Paper and products 26 3.21 174.4 172.3 176.6 173.8 172.4 174.1 174.6 176.7 176.7 177.5 173.5 173.7 175.0 174.1 17 Printing and publishing 27 4.72 169.7 163.4 164.8 165.2 166.3 167.5 169.0 172.6 173.1 170.5 172.3 174.0 175.0 175.5 18 Chemicals and products 28 7.74 228.3 221.5 224.8 225.0 228.3 227.9 231.0 232.0 231.6 230.8 228.0 230.0 230.7 19 Petroleum products 29 1.79 124.6 118.8 127.6 127.0 126.8 127.9 127.5 124.7 124.3 122.6 122.9 124.0 122.4 120.4 20 Rubber and plastic products 30 2.24 332.3 317.2 318.5 323.8 328.0 334.1 341.0 341.4 341.5 338.4 338.6 335.1 336.1 21 Leather and products 31 .86 60.0 61.4 63.9 63.9 63.5 61.4 60.0 60.6 59.1 57.9 55.0 55.9 58.0 Durable manufactures 22 Ordnance, private and government 19.91 3.64 103.6 99.7 99.6 100.6 101.4 100.8 101.7 102.7 105.5 107.1 107.7 109.0 108.7 109.2 23 Lumber and products 24 1.64 149.1 146.0 145.6 149.3 151.2 146.3 148.5 146.0 148.8 149.2 152.6 152.2 155.5 24 Furniture and fixtures 25 1.37 190.5 183.8 185.6 184.6 186.6 190.5 191.9 192.6 195.3 194.3 194.7 193.8 192.8 25 Clay, glass, stone products 32 2.74 159.6 157.8 160.4 160.2 160.0 160.6 159.7 160.9 160.0 158.0 160.1 159.0 158.5 26 Primary metals 33 6.57 95.3 93.2 98.4 97.5 99.3 98.2 97.9 94.5 94.4 94.1 92.7 91.4 90.5 91.0 27 Iron and steel 331.2 4.21 80.0 80.7 86.0 84.4 84.0 83.5 83.5 76.5 77.7 77.5 74.6 73.9 75.0 28 Fabricated metal products 34 5.93 137.6 131.7 132.8 134.9 135.5 136.5 138.7 140.6 140.0 139.5 140.7 138.7 141.5 141.5 29 Nonelectrical machinery 35 9.15 181.7 169.5 170.9 171.9 174.9 178.8 182.0 186.9 189.1 187.9 187.7 188.7 190.8 190.7 30 Electrical machinery 36 8.05 217.4 206.2 209.9 212.0 214.6 214.5 216.0 221.5 221.5 222.8 222.3 222.1 225.2 226.1 31 Transportation equipment 37 9.27 137.6 134.9 135.2 135.8 134.5 135.0 137.2 140.6 141.0 137.6 137.2 141.3 142.8 145.3 32 Motor vehicles and parts 371 4.50 165.7 166.3 164.4 165.8 161.9 163.0 165.3 169.0 169.6 162.4 161.7 170.8 171.7 177.1 33 Aerospace and miscellaneous transportation equipment.. 372-9 4.77 111.1 105.3 107.7 107.5 108.8 108.6 110.8 113.8 113.9 114.2 114.1 113.6 115.6 115.4 34 Instruments 38 2.11 174.4 167.8 168.6 169.7 171.0 171.8 174.5 176.7 177.4 178.5 176.5 177.5 182.4 181.4 35 Miscellaneous manufactures 39 1.51 149.8 151.1 152.0 152.3 152.1 151.5 150.8 152.4 149.2 147.0 148.3 146.1 147.5 147.5 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 670.6 655.1 656.9 661.8 661.1 665.9 671.5 682.4 678.2 673.6 674.7 680.9 684.8 689.4 37 Final 390.9 517.3 505.3 505.0 509.6 509.0 514.0 518.1 525.9 522.3 519.7 521.3 527.4 529.8 533.5 38 Consumer goods . 277.5 348.6 345.3 345.3 347.7 347.8 349.5 350.9 353.2 347.4 345.4 346.7 351.5 351.9 354.5 39 Equipment 113.4 168.7 160.0 159.7 161.9 161.2 164.4 167.2 172.8 174.9 174.4 174.5 175.9 177.9 179.0 40 Intermediate 116.6 153.3 149.8 151.9 152.2 152.2 151.9 153.4 156.5 155.9 153.8 153.5 153.5 155.0 155.9 NOTE. These data also appear in the Board's G.12.3 (414) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1984 IItteemm Mar. Apr. May June July Aug. Sept. Oct.' Nov.' Dec. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 986 1,000 1,605 1,765' 1,802' 1,774' 1,819' 1,590' 1,508' 1,481' 1,436' 1,613 1,627 2 1-family 564 546 902 1,004' 983' 943' 941' 849' 835' 865' 817' 838 852 3 2-or-more-family 421 454 703 761' 8^ 831' 878' 741' 673' 616' 619' 775 775 4 Started 1,084 1,062 1,703 1,7<XK 1,949' 1,787' 1,837' 1,730' 1,59c 1,669' 1,564' 1,600 1,595 5 1-family 705 663 1,067 1,076' 1,163' 1,118' 1,077' 996' 962' 1,009' 979' 1,043 1,084 6 2-or-more-family 379 400 635 624' 786' 669' 760' 734' 628' 66C 585' 557 511 7 Under construction, end of period1 682 720 1,003 1,065 1,091 1,094 1,101 1,105 1,091 1,090 1,077 1,073 1,074 8 1-family 382 400 524 571 582 589 589 586 573 567 569 570 579 9 2-or-more-family 301 320 479 494 509 506 512 519 517 523 507 502 496 10 Completed 1,266 1,005 1,390 1,590 1,654 1,756 1,739 1,718 1,689 1,661 1,607 1,558 1,589 11 1-family 818 631 924 1,031 974 1,081 1,051 1,076 1,039 1,059 957 1,002 932 12 2-or-more-family 447 374 466 559 680 675 688 642 650 602 650 556 657 13 Mobile homes shipped 241 240 296' 290' 287 295 298' 301 302' 282' 302' 291 282 Merchant builder activity in 1-family units 14 Number sold 436 413 622 682 649 616 635 615 562 662' 652' 588 606 15 Number for sale, end of period1 278 255 304 320 328 333 339 341 344 343 347 350 357 Price (thousands of dollars)2 Median 16 Units sold 68.8 69.3 75.5 78.4 79.6 81.4 80.5 80.7 82.0 81.3' 80 .C 82.3 76.3 17 Units sold 83.1 83.8 89.9 97.7 96.2 101.9 98.8 97.1 96.9 101.3' 94.8' 99.8 99.0 EXISTING UNITS (1-family) 18 Number sold 2,418 1,991 2,719 3,020 3,090 3,060 2,960 2,770 2,700 2,670 2,650 2,820 2,850 Price of units sold (thousands of dollars)2 19 Median 66.1 67.7 69.8 72.2 72.5 73.1 73.8 74.5 73.7 72.1 72.0 72.4 72.8 20 Average 78.0 80.4 82.5 85.1 86.1 86.2 87.7 88.2 87.8 85.6 85.9 85.5 86.9 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 239,112 230,068 262,167 309,744 308,596 316,398 315,279 314,223 318,031 318,685 317,876 315,950 318,734 ?,? Private 185,761 179,090 211,369 254,958 254,057 261,182 257,789 258,245 261,165 260,871 261,181 259,821 262,776 23 Residential 86,564 74,808 111,727 141,087 136,577 138,401 136,418 137,818 138,926 137,106 135,191 132,204 130,427 24 Nonresidential, total 99,197 104,282 99,642 113,871 117,480 122,781 121,371 120,427 122,239 123,765 125,990 127,617 132,349 Buildings Industrial 17,031 17,346 12,863 14,363 13,633 15,170 14,065 13,784 14,613 14,917 14,921 15,362 15,682 76 Commercial 34,243 37,281 35,787 45,280 47,353 49,719 48,947 48,435' 49,496' 50,862 53,535 54,581 58,184 77 Other 9,543 10,507 11,660 13,190 13,271 13,821 13,327 12,744' 12,059' 12,079 12,129 12,040 12,538 28 Public utilities and other 38,380 39,148 39,332 41,038 43,223 44,071 45,032 45,464 46,071 45,907 45,405 45,634 45,945 29 Public 53,346 50,977 50,798 54,786 54,539 55,216 57,490 55,979 56,866 57,814 56,695 56,129 55,958 30 Military 1,966 2,205 2,544 2,872 2,827 2,649 2,703 2,345 2,851 3,508 2,897 2,708 2,775 31 Highway 13,599 13,428 14,225 16,205 16,781 16,949 16,824 17,136 17,322 17,209 16,888 17,797 n.a. 32 Conservation and development 5,300 5,029 4,822 4,531 4,518 4,356 4,492 4,520 4,520 4,890 4,607 5,054 n.a. 33 Other 32,481 30,315 29,207 31,178 30,413 31,262 33,471 31,978 32,173 32,207 32,303 30,570 n.a. 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 16,000jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • April 1985 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted C m h o a n n t g h e s f e ro ar m li e 1 r 2 Change ( a f t r o a m nn 3 u a m l o ra n t t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm JJJaaannn... 1984 1984 1985 111999888555 11998844 11998855 (((111999666777 JJaann.. JJaann.. === 111000000)))''' Mar/ June' Sept/ Dec/ Sept/ Oct/ Nov/ Dec/ Jan. CONSUMER PRICES2 1 All items 4.1 3.6 5.4 3.2 4.5 3.0 .4 .3 .2 .3 .2 316.1 2 Food 3.9 2.6 8.4 -.5 3.9 3.7 .1 .3 .2 .4 .2 307.3 3 Energy items .5 -.5 1.2 .3 .1 -.7 .5 -.1 .1 -.2 -.8 414.5 4 All items less food and energy 4.8 4.5 5.1 4.8 5.3 3.5 .4 .3 .2 .3 .4 307.9 5 Commodities 4.7 3.3 3.8 3.9 3.8 .9 .4 .1 .0 .2 .5 256.5 6 Services 4.9 5.3 6.0 5.2 6.2 5.0 .4 .5 .4 .4 .4 366.4 PRODUCER PRICES 7 Finished goods 2.0 1.1 6.1 -.4 .0 1.8 .0 .0 .3 .2 .0 292.7 8 Consumer foods 5.3 .7 15.2 -7.5 4.5 4.5 -.1 .1 .4 .6 -.6 274.2 9 Consumer energy -7.1 -5.4 -5.2 5.0 -19.7 5.7 -1.0 1.6 .4 -.6 -2.4 713.0 10 Other consumer goods 2.7 2.5 5.6 .8 2.5 .0 .2 -.5 .3 .2 .7 250.0 11 Capital equipment 2.2 2.2 3.9 2.2 2.3 .0 .2 -.2 .2 .0 .4 298.1 12 Intermediate materials3 1.9 1.5 4.2 2.7 -1.1 1.1 -.1 .1 .2 -.1 .0 325.4 13 Excluding energy 3.1 1.9 4.1 2.0 .9 1.3 -.1 .1 .3 .0 .0 305.1 Crude materials 14 Foods 10.2 -4.8 8.9 -19.2 -1.7 12.0 .5 -.8 3.4 .3 -2.4 251.3 15 Energy -3.2 -3.5 -1.6 4.0 1.0 -7.0 -.7 -.3 -.9 -.6 -2.2 758.4 16 Other 14.3 -3.6 .9 14.3 -15.3 -10.7 .3 -2.0 -.5 -.4 -1.4 254.1 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

Selected Measures A51 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 11998822 11998833 11998844'' Q4 Ql Q2 Q3 Q4 GROSS NATIONAL PRODUCT 1 Total 3,069.3 3,304.8 3,664.2 3,431.7 3,553.3 3,644.7 3,694.6 3,764.2 By source 2 Personal consumption expenditures 1,984.9 2,155.9 2,342.0 2,230.2 2,276.5 2,332.7 2,361.4 2,397.4 3 Durable goods 245.1 279.8 318.5 299.8 310.9 320.7 317.2 325.3 4 Nondurable goods 757.5 801.7 856.8 823.0 841.3 858.3 861.4 866.0 5 Services 982.2 1,074.4 1,166.7 1,107.5 1,124.4 1,153.7 1,182.8 1,206.1 6 Gross private domestic investment 414.9 471.6 637.0 540.0 623.8 627.0 662.8 634.3 7 Fixed investment 441.0 485.1 579.1 527.3 550.0 576.4 591.0 599.0 8 Nonresidential 349.6 352.9 425.3 383.9 398.8 420.8 435.7 445.9 9 Structures 142.1 129.7 150.5 136.6 142.2 150.0 151.4 158.3 10 Producers' durable equipment 207.5 223.2 274.8 247.3 256.7 270.7 284.2 287.7 11 Residential structures 91.4 132.2 153.8 143.4 151.2 155.6 155.3 153.1 12 Nonfarm 86.6 127.6 148.7 138.7 146.4 150.5 150.1 147.9 13 Change in business inventories -26.1 -13.5 57.9 12.7 73.8 50.6 71.8 35.3 14 Nonfarm -24.0 -3.1 49.3 14.1 60.6 47.0 63.7 25.9 15 Net exports of goods and services 19.0 -8.3 -62.5 -29.8 -51.5 -58.7 -90.6 -49.2 16 Exports 348.4 336.2 364.8 346.1 358.9 362.4 368.6 369.4 17 Imports 329.4 344.4 427.3 375.9 410.4 421.1 459.3 418.5 18 Government purchases of goods and services 650.5 685.5 747.7 691.4 704.4 743.7 761.0 781.7 19 Federal 258.9 269.7 295.6 266.3 267.6 296.4 302.0 316.3 20 State and local 391.5 415.8 452.1 425.1 436.8 447.4 458.9 465.4 By major type of product 21 Final sales, total 3,095.4 3,318.3 3,606.3 3,419.0 3,479.5 3,594.1 3,622.8 3,728.9 22 Goods 1,276.7 1,355.7 1,542.9 1,423.9 1,498.0 1,544.8 1,549.1 1,579.6 23 Durable 499.9 555.3 655.7 607.4 632.3 647.9 654.7 687.8 24 Nondurable 776.9 800.4 887.2 816.5 865.7 896.9 894.4 891.8 25 Services 1,510.8 1,639.3 1,764.6 1,681.3 1,713.7 1,742.6 1,783.3 1,819.0 26 Structures 281.7 309.8 356.6 326.5 341.6 357.2 362.1 365.6 27 Change in business inventories -26.1 -13.5 57.9 12.7 73.8 50.6 71.8 35.3 28 Durable goods -18.0 -2.1 30.4 14.5 34.9 18.2 41.7 26.8 29 Nondurable goods -8.1 -11.3 27.5 -1.7 38.9 32.4 30.1 8.5 30 MEMO: Total GNP in 1972 dollars 1,480.0 1,534.7 1,639.9 1,572.7 1,610.9 1,638.8 1,645.2 1,664.8 NATIONAL INCOME 31 Total 2,446.8 2,646.7 2,961.9 2,766.5 2,873.5 2,944.8 2,984.9 3,044.2 32 Compensation of employees 1,864.2 1,984.9 2,173.0 2,055.4 2,113.4 2,159.2 2,191.9 2,227.5 33 Wages and salaries 1,568.7 1,658.8 1,804.0 1,715.4 1,755.9 1,793.3 1,819.1 1,847.5 34 Government and government enterprises 306.6 328.2 349.8 335.0 342.9 347.5 352.0 356.9 35 Other 1,262.2 1,331.1 1,454.1 1,380.4 1,413.0 1,445.8 1,467.1 1,490.6 36 Supplement to wages and salaries 295.5 326.2 369.0 340.0 357.4 365.9 372.8 380.0 37 Employer contributions for social insurance 140.0 153.1 173.5 157.9 169.4 172.4 174.7 177.5 38 Other labor income 155.5 173.1 195.5 182.1 188.1 193.5 198.1 202.5 39 Proprietors' income1 111.1 121.7 154.2 131.9 154.9 149.8 153.7 158.3 40 Business and professional1 89.2 107.9 126.2 114.6 122.5 126.3 126.4 129.7 41 Farm1 21.8 13.8 28.0 17.3 32.5 23.4 27.3 28.6 42 Rental income of persons2 51.5 58.3 62.5 60.4 61.0 62.0 63.0 63.9 43 Corporate profits1 159.1 225.2 287.1 260.0 277.4 291.1 282.8 297.3 44 Profits before tax3 165.5 203.2 237.5 225.5 243.3 246.0 224.8 235.8 45 Inventory valuation adjustment -9.5 -11.2 -5.9 -9.2 -13.5 -7.3 -.2 -2.8 46 Capital consumption adjustment 3.1 33.2 55.6 43.6 47.6 52.3 58.3 64.3 47 Net interest 260.9 256.6 285.1 258.9 266.8 282.8 293.5 297.3 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

A48 Domestic Nonfinancial Statistics • April 1985 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1983 1984 AAccccoouunntt 11998822 11998833 1984' Q4 Q1 Q2 Q3 Q4 PERSONAL INCOME AND SAVING 1 Total personal income 2,584.6 2,744.2 3,012.8 2,836.5 2,920.5 2,984.6 3,047.3 3,098.9 2 Wage and salary disbursements 1,568.7 1,659.2 1,803.9 1,715.4 1,755.7 1,793.1 1,819.5 1,847.3 3 Commodity-producing industries 509.3 519.3 569.3 539.0 555.9 567.0 573.3 581.0 4 Manufacturing 382.9 395.2 433.9 411.9 424.6 432.2 436.4 442.5 5 Distributive industries 378.6 398.6 432.0 413.2 419.2 429.5 436.4 442.8 6 Service industries 374.3 413.1 452.8 428.2 437.9 449.3 457.3 466.8 7 Government and government enterprises 306.6 328.2 349.8 335.0 342.8 347.3 352.4 356.7 155.5 173.1 195.5 182.1 188.1 193.5 198.1 202.5 9 Proprietors' income1 111.1 121.7 154.2 131.9 154.9 149.8 153.7 158.3 10 Business and professional1 89.2 107.9 126.2 114.6 122.5 126.3 126.4 129.7 11 Farm1 21.8 13.8 28.0 17.3 32.5 23.4 27.3 28.6 12 Rental income of persons2 51.5 58.3 62.5 60.4 61.0 62.0 63.0 63.9 13 Dividends 66.5 70.3 77.7 72.8 75.0 77.2 78.5 80.2 14 Personal interest income 366.6 376.3 434.8 388.2 403.9 425.6 449.3 460.1 15 Transfer payments 376.1 405.0 416.7 408.8 411.3 415.2 418.6 421.8 16 Old-age survivors, disability, and health insurance benefits... 204.5 221.6 237.3 227.7 232.1 235.2 238.2 243.5 17 LESS: Personal contributions for social insurance 111.4 119.6 132.5 123.2 129.6 131.8 133.4 135.2 18 EQUALS: Personal income 2,584.6 2,744.2 3,012.8 2,836.5 2,920.5 2,984.6 3,047.3 3,098.9 19 LESS: Personal tax and nontax payments 404.1 404.2 435.2 407.9 418.3 430.3 440.9 451.1 20 EQUALS: Disposable personal income 2,180.5 2,340.1 2,577.7 2,428.6 2,502.2 2,554.3 2,606.4 2,647.8 21 LESS: Personal outlays 2,044.5 2,222.0 2,420.8 2,300.0 2,349.6 2,409.5 2,442.3 2,482.0 22 EQUALS: Personal saving 136.0 118.1 156.8 128.7 152.5 144.8 164.1 165.8 MEMO Per capita (1972 dollars) 23 Gross national product 6,369.7 6,543.4 6,924.9 6,681.4 66,,882299..44 6,933.2 66,,994433..22 66,,999933..22 24 Personal consumption expenditures 4,145.9 4,302.8 4,489.6 4,386.0 4,426.5 4,502.3 4,498.4 4,530.8 25 Disposable personal income 4,555.0 4,670.0 4,940.0 4,776.0 4,865.0 4,930.0 4,965.0 5,000.0 26 Saving rate (percent) 6.2 5.0 6.1 5.3 6.1 5.7 6.3 6.3 GROSS SAVING 27 Gross saving 408.8 437.2 554.3 485.7 543.9 551.0 556.4 565.8 28 Gross private saving 524.0 571.7 676.7 615.0 651.3 660.2 689.4 705.9 136.0 118.1 156.8 128.7 152.5 144.8 164.1 165.8 30 Undistributed corporate profits' 29.2 76.5 116.7 100.0 107.0 115.3 118.4 125.9 31 Corporate inventory valuation adjustment -9.5 -11.2 -5.9 -9.2 -13.5 -7.3 -.2 -2.8 Capital consumption allowances 221.8 231.2 246.3 236.4 223399..99 224444..11 224488..11 225522..99 33 Noncorporate 137.1 145.9 157.0 150.0 151.8 156.0 158.8 161.3 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and -115.3 -134.5 -122.4 --112299..33 --110077..44 -109.2 --113333..00 --114400..11 36 Federal -148.2 -178.6 -175.2 -180.5 -161.3 -163.7 -180.6 -195.3 37 State and local 32.9 44.1 52.8 51.2 53.9 54.5 47.6 55.2 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 .0 408.3 437.7 n.a. 480.9 546.1 542.0 543.4 552.8 40 Gross private domestic 414.9 471.6 637.0 540.0 623.8 627.0 662.8 634.3 -6.6 -33.9 -90.9 -59.1 -77.7 -85.0 -119.4 -81.5 42 Statistical discrepancy -.5 .5 -8.2 -4.8 2.2 -9.0 -13.0 -13.0 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

Summary Statistics A53 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 11998833 Q3 Q4 Ql Q2 Q3 p 1 Balance on current account 6,294 -9,199 -41,563 -11,846 -17,213 -19,673 -24,704 -32,900 -14,498 -15,964 -18,616 -24,381 -35,471 3 Merchandise trade balance2 -28,001 -36,469 -61,055 -17,501 -19,407 -25,855 -25,845 -33,134 4 Merchandise exports 237,085 211,198 200,257 50,437 51,829 53,935 54,563 55,497 5 Merchandise imports -265,086 -247,667 -261,312 -67,938 -71,236 -79,790 -80,408 -88,631 6 Military transactions, net -1,116 195 515 -55 -273 -370 -404 -241 7 Investment income, net3 34,053 27,802 23,508 7,172 5,119 7,748 3,459 3,678 8 Other service transactions, net 8,191 7,331 4,121 681 434 951 243 -385 9 Remittances, pensions, and other transfers -2,382 -2,635 -2,590 -665 -688 -717 -726 -711 10 U.S. government grants (excluding military) -4,451 -5,423 -6,060 -1,478 -2,398 -1,430 -1,431 -2,107 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,107 -6,143 -5,013 -1,204 -1,429 --22,,003377 -1,235 --11,,447744 12 Change in U.S. official reserve assets (increase, -) -5,175 -4,965 -1,196 529 -953 -657 -565 -799 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,823 -1,371 -66 -209 545 -226 -288 -271 15 Reserve position in International Monetary Fund -2,491 -2,552 -4,434 -88 -1,996 -200 -321 -331 16 Foreign currencies -861 -1,041 3,304 826 498 -231 44 -197 17 Change in U.S. private assets abroad (increase, -)3 -100,694 -107,790 -43,281 -8,548 -12,461 705 -17,237 18,297 18 Bank-reported claims -84,175 -111,070 -25,391 -2,871 -8,239 1,955 -20,612 18,359 19 Nonbank-reported claims -1,181 6,626 -5,333 -233 -1,671 1,659 2,120 n.a. 20 U.S. purchase of foreign securities, net -5,714 -8,102 -7,676 -1,571 -983 637 -820 -1,167 21 U.S. direct investments abroad, net3 -9,624 4,756 -4,881 -3,873 -1,568 -3,546 2,075 1,105 22 Change in foreign official assets in the United States (increase, +) 5,003 3,318 5,339 -2,703 6,555 -2,784 -345 -1,022 23 U.S. Treasury securities 5,019 5,728 6,989 -611 2,603 -288 -310 -577 24 Other U.S. government obligations 1,289 -694 -487 -363 417 -8 147 85 25 Other U.S. government liabilities4 -300 382 199 137 161 242 448 -244 76 Other U.S. liabilities reported by U.S. banks -3,670 -1,747 433 -1,403 3,498 -2,131 349 201 27 Other foreign official assets5 2,665 -351 -1,795 -463 -124 -599 -979 -487 28 Change in foreign private assets in the United States (increase, +)3 76,310 91,863 76,383 22,281 27,249 1188,,444444 40,750 77,,225566 79 U.S. bank-reported liabilities 42,128 65,922 49,059 14,792 22,325 8,775 20,789 -3,879 30 U.S. nonbank-reported liabilities 917 -2,383 -1,318 1,311 -228 4,404 4,055 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,946 7,062 8,731 995 1,673 1,358 6,477 5,153 32 Foreign purchases of other U.S. securities, net 7,171 6,396 8,612 1,861 1,134 1,516 587 1,684 33 Foreign direct investments in the United States, net3 23,148 14,865 11,299 3,322 2,345 2,391 8,842 4,298 34 Allocation of SDRs 1,093 0 0 0 0 0 0 0 35 Discrepancy 22,275 32,916 9,331 1,491 -1,748 6,002 3,336 10,642 3366 --22,,551188 22,,665577 -154 -104 --22,,338866 37 Statistical discrepancy in recorded data before seasonal adjustment 22,275 32,916 9,331 4,009 -4,405 6,156 3,440 13,028 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -5,175 -4,965 -1,196 552299 -953 --665577 --556655 --779999 39 Foreign official assets in the United States (increase, +) 5,303 2,936 5,140 -2,840 6,394 -3,026 -793 -778 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 13,581 7,291 -8,639 -2,051 -1,640 -2,447 -2,170 2,274 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 675 593 205 49 84 41 44 45 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. NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business 3. Includes reinvested earnings. (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • April 1985 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1984 IItteemm 11998811 11998822 11998833 June July Aug. Sept. Oct. Nov. Dec. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 233,677 212,193 200,486 17,633 19,442 18,036 18,177 18,387 18,373 19,230 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 261,305 243,952 258,048 25,356 31,883 26,567 29,430 26,313 27,033 26,169 3 Trade balance -27,628 -31,759 -57,562 -7,723 -12,440 -8,531 -11,253 -7,926 -8,661 -6,939 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. SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade" The Census basis data differ from merchandise trade data shown in table 3.10, (Department of Commerce, Bureau of the Census). U.S. International Transactions Summary, for reasons of coverage and timing. On 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 1985 TTyyppee 11998811 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Total 30,075 33,958 33,747 34,392 34,760 34,306 34,570 34,727 34,934 34,380 2 Gold stock, including Exchange Stabilization Fund1 11,151 11,148 11,121 11,099 11,098 11,097 11,096 11,096 11,096 11,095 3 Special drawing rights2'3 4,095 5,250 5,025 5,453 5,652 5,554 5,539 5,693 5,641 5,693 4 Reserve position in International Monetary Fund2 5,055 7,348 11,312 11,735 11,820 11,619 11,618 11,675 11,541 11,322 5 Foreign currencies4 9,774 10,212 6,289 6,105 6,190 6,036 6,317 6,263 6,656 6,270 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 1985 AAsssseettss 11998811 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Deposits 505 328 190 215 242 206 270 392 253 244 Assets held in custody 2 U.S. Treasury securities1 104,680 112,544 117,670 115,760 117,130 115,678 115,542 117,433 118,267 117,330 3 Earmarked gold2 14,804 14,716 14,414 14,270 14,258 14,256 14,260 14,265 14,265 14,261 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

Summary Statistics A55 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1984 AAsssseett aaccccoouunntt 11998811 11998822 11998833rr Juner July Aug.' Sept/ Oct/ Nov. Dec All foreign countries 1 Total, all currencies 462,847 469,712 477,090 477,856 465,902 462,486 454,082 448,284 452,012 452,012 ? Claims on United States 63,743 91,805 115,542 125,424 118,484 117,078 114,160 109,055 112,623 113,265 Parent bank 43,267 61,666 82,026 90,458 82,885 82,437 80,035 75,499 77,767 77,926 4 Other banks in United States' 13,980 13,987 13,216 13,125 12,591 13,553 13,968 5 Nonbanks1 20,986 21,612 21,425 21,000 20,965 21,303 21,371 6 Claims on foreigners 378,954 358,493 342,689 332,488 327,298 324,474 319,375 319,097 319,443 318,688 7 Other branches of parent bank 87,821 91,168 96,004 95,866 91,410 93,507 92,646 90,821 91,319 94,794 8 Banks 150,763 133,752 117,668 105,798 107,471 103,346 101,574 102,246 103,037 100,064 9 Public borrowers 28,197 24,131 24,517 23,292 23,291 22,654 22,554 23,030 22,914 23,037 10 Nonbank foreigners 112,173 109,442 107,785 107,532 105,126 104,967 102,601 103,000 102,173 100,793 11 Other assets 20,150 19,414 18,859 19,944 20,120 20,934 20,547 20,132 19,946 20,059 12 Total payable in U.S. dollars 350,735 361,982 371,508 368,000 357,598 352,807 346,929 340,431 345,485 349,364 n Claims on United States 62,142 90,085 113,436 123,202 116,145 114,754 111,677 106,429 110,265 111,313 14 Parent bank 42,721 61,010 80,909 89,325 81,664 81,291 78,847 74,129 76,572 77,046 If Other banks in United States1 1 13,759 13,674 12,897 12,769 12,338 13,355 13,786 16 Nonbanks1 20,118 20,807 20,566 20,061 19,962 20,338 20,481 17 Claims on foreigners 276,937 259,871 247,406 234,301 230,840 227,132 224,603 223,355 224,210 227,281 18 Other branches of parent bank 69,398 73,537 78,431 77,412 73,653 75,969 75,509 73,472 74,606 78,356 19 Banks 122,110 106,447 93,332 81,438 82,400 77,402 76,567 76,910 77,083 76,688 70 Public borrowers 22,877 18,413 17,890 17,045 17,186 16,783 16,943 17,302 17,359 17,245 21 Nonbank foreigners 62,552 61,474 60,977 58,406 57,601 56,978 55,584 55,671 55,162 54,992 22 Other assets 11,656 12,026 10,666 10,497 10,613 10,921 10,649 10,647 11,010 10,770 United Kingdom 23 Total, all currencies 157,229 161,067 158,732 159,038 155,643 154,250 147,696 147,543 148,627 144,377 74 Claims on United States 11,823 27,354 34,433 36,338 33,697 31,691 29,333 28,933 29,487 27,667 75 Parent bank 7,885 23,017 29,111 30,621 27,863 26,054 23,772 23,264 23,758 21,854 76 Other banks in United States1 1 1,252 1,273 1,087 1,327 1,214 1,484 1,429 77 Nonbanks1 4,465 4,561 4,550 4,234 4,455 4,245 4,384 78 Claims on foreigners 138,888 127,734 119,280 117,492 116,740 117,255 113,299 113,524 114,270 111,828 29 Other branches of parent bank 41,367 37,000 36,565 38.620 37,728 39,313 37,499 37,638 37,401 37,953 30 Banks 56,315 50,767 43,352 40,069 40,980 39,906 39,133 38,696 39,262 37,443 31 Public borrowers 7,490 6,240 5,898 5,876 5,786 5,510 5,330 5,441 5,424 5,334 32 Nonbank foreigners 33,716 33,727 33,465 32,927 32,246 32,526 31,337 31,749 32,183 31,098 33 Other assets 6,518 5,979 5,019 5,208 5,206 5,304 5,064 5,086 4,870 4,882 34 Total payable in U.S. dollars 115,188 123,740 126,012 123,933 120,488 118,337 114,358 113,418 114,886 112,801 35 Claims on United States 11,246 26,761 33,756 35,387 32,587 30,641 28,282 27,898 28,595 26,860 36 Parent bank 7,721 22,756 28,756 30,181 27,239 25,509 23,323 22,806 23,363 21,487 37 Other banks in United States1 1 1,144 1,149 950 1,195 1,113 1,437 1,363 38 Nonbanks1 4,062 4,199 4,182 3,764 3.979 3,795 4,010 39 Claims on foreigners 99,850 92,228 88,917 85,447 84,729 84,553 83,082 82,456 82,977 82,945 40 Other branches of parent bank 35,439 31,648 31,838 32,867 31,762 33,623 32,704 32,461 32,675 33,607 41 40,703 36,717 32,188 28,778 29,444 27,961 27,986 27,093 27,290 26,805 4? Public borrowers 5,595 4,329 4,194 4,284 4,288 3,983 3,879 4,063 4,094 4,030 43 Nonbank foreigners 18,113 19,534 20,697 19,518 19,235 18,986 18,513 18,839 18,918 18,503 44 Other assets 4,092 4,751 3,339 3,099 3,172 3,143 2,994 3,064 3,314 2,996 Bahamas and Caymans 45 Total, all currencies 149,108 145,156 152,083 154,029 147,912 147,319 144,578 138,798 141,448 146,641 46 Claims on United States 46,546 59,403 75,309 82,132 78,252 78,882 77,013 71,750 75,522 77,205 47 Parent bank 31,643 34,653 48,720 54,632 50,285 51,384 50,078 45,480 48,070 49,303 48 Other banks in United States1 11,891 11,932 11,540 11,072 10,716 11,283 11,858 49 Nonbanks1 15,609 16,035 15,958 15,863 15,554 16,169 16,044 50 Claims on foreigners 98,057 81,450 72,868 68,109 65,620 64,263 63,545 63,010 61,996 65,520 51 Other branches of parent bank 12,951 18,720 20,626 17,926 15,567 16,093 15,639 15,117 13,837 17,682 V Banks 55,151 42,699 36,842 31,746 32,007 30,505 30,075 30,259 30,516 30,159 53 Public borrowers 10,010 6,413 6,093 5,993 6,000 5,883 6,119 6,040 6,060 6,077 54 Nonbank foreigners 19,945 13,618 12,592 12,444 12,046 11,782 11,712 11,594 11,583 11,602 55 Other assets 4,505 4,303 3,906 3,788 4,040 4,174 4,020 4,038 3,930 3,916 56 Total payable in U.S. dollars 143,743 139,605 145,641 147,871 141,950 141,139 138,693 132,834 136,064 141,407 1. Data for assets vis-a-vis other banks in the United States and vis-a-vis nonbanks are combined for dates prior to June 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • April 1985 3.14 Continued 1984 June' July' Aug/ Sept/ Oct/ Nov. Dec.P All foreign countries 57 Total, all currencies 462,847 469,712 477,090 477,856 465,902 462,486 454,082 448,284 452,012 452,012 58 Negotiable CDs2 n.a. n.a. n.a. 43,421 41,297 41,656 39,866 38,520 37,915 37,725 59 To United States 137,767 179,015 188,070 162,578 155,231 152,635 147,003 139,402 138,354 146,808 60 Parent bank 56,344 75,621 81,261 81,025 78,067 77,160 75,026 74,756 70,339 78,110 61 Other banks in United States 19,197 33,405 29,453 23,174 22,365 19,693 20,120 18,913 18,613 18,386 62 Nonbanks 62,226 69,989 77,356 58,379 54,799 55,782 51,857 45,733 49,402 50,312 63 To foreigners 305,630 270,853 269,685 252,180 248,651 246,565 245,746 248,185 253,956 246,790 64 Other branches of parent bank 86,396 90,191 90,615 92,384 89,081 90,747 90,426 89,530 90,729 93,206 65 Banks 124,906 96,860 92,889 83,024 80,082 78,796 77,471 82,226 86,815 78,235 66 Official institutions 25,997 19,614 18,8% 19,523 21,261 20,238 21,566 19,501 20,883 20,241 67 Nonbank foreigners 68,331 64,188 68,845 57,249 58,227 56,784 56,283 56,928 55,529 55,108 68 Other liabilities 19,450 19,844 19,335 19,677 20,723 21,630 21,467 22,177 21,787 20,689 69 Total payable in U.S. dollars 364,447 379,270 388,291 385,338 374,735 370,356 364,247 356,342 361,660 365,594 70 Negotiable CDs2 n.a. n.a. n.a. 40,852 38,990 39,610 37,629 36,102 35,608 35,227 71 To United States 134,700 175,528 184,305 158,034 150,973 148,102 142,482 135,131 134,159 142,764 72 Parent bank 54,492 73,295 79,035 78,316 75,542 74,574 72,254 72,245 67,814 75,625 73 Other banks in United States 18,883 33,040 28,936 22,593 21,749 19,019 19,457 18,259 18,064 17,880 74 Nonbanks 61,325 69,193 76,334 57,125 53,682 54,509 50,771 44,627 48,281 49,259 75 To foreigners 217,602 192,510 194,139 176,549 174,414 171,880 173,610 174,090 180,824 177,576 76 Other branches of parent bank 69,299 72,921 73,522 74,448 71,438 73,501 73,412 72,204 74,552 77,222 77 Banks 79,594 57,463 57,022 46,986 44,858 42,373 42,772 46,218 50,502 45,123 78 Official institutions 20,288 15,055 13,855 14,124 16,117 15,476 16,850 14,850 16,068 15,733 79 Nonbank foreigners 48,421 47,071 51,260 40,991 42,001 40,530 40,576 40,818 39,702 39,498 80 Other liabilities 12,145 11,232 9,847 9,903 10,358 10,764 10,526 11,019 11,069 10,027 United Kingdom 81 Total, all currencies 157,229 161,067 158,732 159,038 155,643 154,250 147,6% 147,543 148,627 144,377 82 Negotiable CDs2 n.a. n.a. n.a. 39,840 37,998 38,265 36,600 34,948 34,269 34,413 83 To United States 38,022 53,954 55,799 31,949 29,682 29,667 27,280 26,558 25,338 25,254 84 Parent bank 5,444 13,091 14,021 18,532 16,730 18,127 16,130 16,598 15,116 14,651 85 Other banks in United States 7,502 12,205 11,328 4,701 4,277 3,548 3,451 3,388 3,040 3,118 86 Nonbanks 25,076 28,658 30,450 8,716 8,675 7,992 7,699 6,572 7,182 7,485 87 To foreigners 112,255 99,567 95,847 79,802 80,261 78,469 75,901 77,985 81,217 77,420 88 Other branches of parent bank 16,545 18,361 19,038 21,298 21,459 22,252 21,536 21,023 20,846 21,631 89 Banks 51,336 44,020 41,624 32,917 31,435 30,735 28,996 32,436 34,739 30,436 90 Official institutions 16,517 11,504 10,151 9,928 11,301 10,480 10,625 9,650 10,505 10,154 91 Nonbank foreigners 27,857 25,682 25,034 15,659 16,066 15,002 14,744 14,876 15,127 15,199 92 Other liabilities 6,952 7,546 7,086 7,447 7,702 7,849 7,915 8,052 7,803 7,290 93 Total payable in U.S. dollars 120,277 130,261 131,167 128,922 126,294 124,260 119,337 118,084 119,278 117,457 94 Negotiable CDs2 n.a. n.a. n.a. 38,463 36,757 37,219 35,398 33,703 33,168 33,070 95 To United States 37,332 53,029 54,691 30,602 28,349 28,027 25,738 25,178 24,024 24,077 % Parent bank 5,350 12,814 13,839 18,244 16,390 17,701 15,679 16,209 14,742 14,339 97 Other banks in United States 7,249 12,026 11,044 4,486 4,018 3,244 3,131 3,144 2,830 2,941 98 Nonbanks 24,733 28,189 29,808 7,872 7,941 7,082 6,953 5,825 6,452 6,797 99 To foreigners 79,034 73,477 73,279 56,274 57,495 55,337 54,590 55,482 58,163 56,919 100 Other branches of parent bank 12,048 14,300 15,403 17,362 17,472 18,384 18,175 17,600 17,562 18,294 101 Banks 32,298 28,810 29,320 19,541 18,197 16,984 16,015 18,309 20,262 18,356 102 Official institutions 13,612 9,668 8,279 7,945 9,610 8,920 9,375 8,306 9,072 8,871 103 Nonbank foreigners 21,076 20,699 20,277 11,426 12,216 11,049 11,025 11,267 11,267 11,398 104 Other liabilities 3,911 3,755 3,197 3,583 3,693 3,677 3,586 3,721 3,923 3,391 Bahamas and Caymans 105 Total, all currencies 149,108 145,156 152,083 154,029 147,912 147,319 144,578 138,798 141,448 146,641 106 Negotiable CDs2 n.a. n.a. n.a. 1,065 %5 905 788 878 898 615 107 To United States 85,759 104,425 111,299 111,047 106,338 103,915 100,682 95,084 95,831 102,804 108 Parent bank 39,451 47,081 50,980 46,050 45,098 42,373 42,064 42,850 40,516 47,161 109 Other banks in United States 10,474 18,466 16,057 16,989 16,498 14,742 15,459 14,143 14,155 13,922 110 Nonbanks 35,834 38,878 44,262 48,008 44,742 46,800 43,159 38,091 41,160 41,721 111 To foreigners 60,012 38,274 38,445 39,338 37,828 39,598 40,213 39,855 41,747 40,302 112 Other branches of parent bank 20,641 15,796 14,936 13,873 12,381 14,446 15,283 14,823 16,455 16,782 113 Banks 23,202 10,166 11,876 12,485 12,635 12,200 11,978 13,059 13,986 12,397 114 Official institutions 3,498 1,967 1,919 2,681 2,427 2,674 3,028 2,211 2,376 2,054 115 Nonbank foreigners 12,671 10,345 11,274 10,299 10,385 10,278 9,924 9,762 8,930 9,069 116 Other liabilities 3,337 2,457 2,339 2,579 2,781 2,901 2,895 2,981 2,972 2,920 117 Total payable in U.S. dollars 145,284 141,908 148,278 149,959 143,961 143,294 140,902 135,143 137,712 143,420 2. Before June 1984, liabilities on negotiable CDs were included in liabilities to the United States or liabilities to foreigners, according to the address of the initial purchaser. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A57 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1984 IItteemm 11998822 11998833 June July' Aug. Sept. Oct.' Nov. Dec.P 1 Total1 172,718 177,950' 174,084' 174,492 177,276' 173,407' 176,177 178,220 180,373 By type 2 Liabilities reported by banks in the United States2 24,989 25,534 23,737 25,869 26,381 24,038 26,893 25,779 26,000 3 U.S. Treasury bills and certificates3 46,658 54,341 53,977 51,974 54,022 54,627 55,780 59,570 59,976 U.S. Treasury bonds and notes 4 Marketable 67,733 68,514 68,898' 69,075 70,441' 68,471' 67,647 67,045 68,940 5 Nonmarketable4 8,750 7,250 6,600 6,600 5,800 5,800 5,800 5,800 5,800 6 U.S. securities other than U.S. Treasury securities5 24,588 22,311' 20,872 20,974 20,632 20,471 20,057 20,026 19,657 By area 1 Western Europe1 61,298 67,645 70,119' 68,749 70,399' 68,091' 68,682 70,825 70,005 8 Canada 2,070 2,438 994 1,250 1,434 1,069 1,321 1,466 1,528 9 Latin America and Caribbean 6,057 6,248 7,070 6,993 8,170 7,053 8,109 8,885 8,631 10 Asia 96,034 92,572 88,427 90,391 90,464 90,403' 91,491 89,677 93,505 11 Africa 1,350 958 996 970 838 897 967 1,316 1,234 12 Other countries6 5,909 8,089' 6,478 6,139 5,971 5,894 5,607 6,051 5,470 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. NOTE. Based on Treasury Department data and on data reported to the 3. Includes nonmarketable certificates of indebtedness (including those pay- Treasury Department by banks (including Federal Reserve Banks) and securities able in foreign currencies through 1974) and Treasury bills issued to official dealers in the United States. institutions of foreign countries. 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 1984 IItteemm 11998811 11998822 11998833 Mar. June Sept. Dec.P 1 Banks'own liabilities 3,523 4,844 5,219 5,817' 6,402 5,901 7,378 2 Banks' own claims 4,980 7,707 7,231 9,034 9,623 9,006 10,736 3 Deposits 3,398 4,251 2,731 4,024 4,280 3,696 3,925 4 Other claims 1,582 3,456 4,501 5,010 5,344 5,310 6,811 5 Claims of banks' domestic customers1 971 676 1,059 361 227 281 569 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

A58 International Statistics • April 1985 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1984 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998811AA 11998822 11998833 June July' Aug. Sept. Oct.' Nov. Dec.? 1 All foreigners 243,889 307,056 369,607' 402,237' 398,282 396,436' 398,598 388,951 398,530 405,109 2 Banks' own liabilities 163,817 227,089 279,087' 305,564' 302,690 296,595' 299,732 290,282 296,914 305,120 3 Demand deposits 19,631 15,889 17,470' 17,618' 16,355 16,229 17,198 16,490 17,447 19,635 4 Time deposits1 29,039 68,797 90,632' 105,241' 109,419 107,604' 111,901 109,612 112,677 110,218 5 Other2 17,647 23,184 25,874' 23,354' 25,711 23,630 22,087 24,423 23,629 26,174 6 Own foreign offices3 97,500 119,219 145,111' 159,35c 151,205 149,132' 148,546 139,758 143,161 149,092 7 Banks' custody liabilities4 80,072 79,967 90,520' 96,673' 95,593 99,842 98,866 98,669 101,616 99,990 8 U.S. Treasury bills and certificates5 55,315 55,628 68,669 72,191 71,244 74,148 73,160 73,295 76,531 75,838 9 Other negotiable and readily transferable instruments6 18,788 20,636 17,467' 19,479' 19,358 20,567 20,833 20,281 19,669 18,760 10 Other 5,970 3,702 4,385 5,003 4,990 5,127 4,873 5,094 5,417 5,391 11 Nonmonetary international and regional organizations7 2,721 4,922 5,957 5,055 5,344 5,748 6,279 4,801 5,831 4,083 12 Banks' own liabilities 638 1,909 4,632 2,920 2,612 1,960 3,305 2,053 2,779 1,644 13 Demand deposits 262 106 297 182 142 325 209 144 354 263 14 Time deposits' 58 1,664 3,584 2,209 2,213 1,446 2,526 1,513 2,114 1,092 15 Other2 318 139 750 529 257 189 570 396 311 288 16 Banks' custody liabilities4 2,083 3,013 1,325 2,135 2,732 3,788 2,975 2,748 3,052 2,440 17 U.S. Treasury bills and certificates 541 1,621 463 887 1,709 2,722 1,834 1,455 1,448 916 18 Other negotiable and readily transferable instruments6 1,542 1,392 862 1,248 1,023 1,067 1,140 1,292 1,604 1,524 19 Other 0 0 0 0 0 0 0 0 0 0 20 Official institutions8 79,126 71,647 79,876 77,714 77,843 80,403 78,665 82,673 85,349 85,975 21 Banks' own liabilities 17,109 16,640 19,427 16,616 18,504 18,222 16,274 19,247 18,738 18,952 22 Demand deposits 2,564 1,899 1,837 1,898 1,875 2,003 1,969 1,725 2,133 1,921 23 Time deposits' 4,230 5,528 7,318 7,548 8,028 8,060 7,877 8,695 9,461 9,307 24 Other2 10,315 9,212 10,272 7,169 8,601 8,158 6,429 8,828 7,145 7,724 25 Banks' custody liabilities4 62,018 55,008 60,448 61,098 59,338 62,181 62,391 63,426 66,611 67,024 26 U.S. Treasury bills and certificates5 52,389 46,658 54,341 53,977 51,974 54,022 54,627 55,780 59,570 59,976 27 Other negotiable and readily transferable instruments6 9,581 8,321 6,082 7,030 7,356 8,149 7,746 7,626 7,010 7,023 28 Other 47 28 25 91 9 10 18 20 31 25 29 Banks' 136,008 185,881 226,887' 253,566' 249,537 243,552' 246,077 233,654 238,414 246,739 30 Banks' own liabilities 124,312 169,449 205,347' 228,978' 224,222 218,081' 221,185 209,529 214,879 223,891 31 Unaffiliated foreign banks 26,812 50,230 60,236' 69,627' 73,017 68,949' 72,640 69,771 71,718 74,799 32 Demand deposits 11,614 8,675 8,759' 9,071' 8,174 7,884 8,453 8,389 8,528 10,522 33 Time deposits' 8,720 28,386 37,439' 45,591' 48,663 46,901' 49,763 46,755 47,702 47,028 34 Other2 6,477 13,169 14,038' 14,965' 16,180 14,164 14,424 14,627 15,489 17,248 35 Own foreign offices3 97,500 119,219 145,111' 159,350' 151,205 149,132' 148,546 139,758 143,161 149,092 36 Banks' custody liabilities4 11,696 16,432 21,540 24,588 25,315 25,471 24,892 24,124 23,534 22,848 37 U.S. Treasury bills and certificates 1,685 5,809 10,178 12,771 13,022 12,766 12,234 11,828 11,409 10,927 38 Other negotiable and readily transferable instruments6 4,400 7,857 7,485 7,446 7,867 8,172 8,421 7,802 7,328 7,156 39 Other 5,611 2,766 3,877 4,371 4,426 4,534 4,236 4,494 4,797 4,766 40 Other foreigners 26,035 44,606 56,887' 65,90y 65,558 66,733' 67,576 67,824 68,937 68,312 41 Banks' own liabilities 21,759 39,092 49,680' 57,050' 57,351 58,332' 58,968 59,453 60,518 60,634 42. Demand deposits 5,191 5,209 6,577 6,466 6,163 6,017 6,567 6,232 6,433 6,929 43 Time deposits 16,030 33,219 42,290' 49,893' 50,515 51,195' 51,735 52,648 53,400 52,791 44 Other2 537 664 813 691 672 1,120 665 573 685 914 45 Banks' custody liabilities4 4,276 5,514 7,207' 8,853' 8,207 8,401 8,609 8,372 8,419 7,678 46 U.S. Treasury bills and certificates 699 1,540 3,686 4,556 4,540 4,639 4,465 4,232 4,103 4,020 47 Other negotiable and readily transferable instruments6 3,265 3,065 3,038' 3,756' 3,111 3,180 3,525 3,560 3,727 3,058 48 Other 312 908 483 541 556 582 619 580 588 601 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,747 14,307 10,346' 10,946' 10,904 11,415 11,048 10,714 10,431 10,461 A Liabilities and claims of banks in the United States were increased, 4. Financial claims on residents of the United States, other than long-term beginning in December 1981, by the shift from foreign branches to international securities, held by or through reporting banks. banking facilities in the United States of liabilities to, and claims on, foreign 5. Includes nonmarketable certificates of indebtedness and Treasury bills residents. issued to official institutions of foreign countries. 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 foreign bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.17 Continued 1984 AArreeaa aanndd ccoouunnttrryy 11998811AA 11998822 11998833 June July Aug. Sept. Oct. Nov. Dec .p 1 Total 243,889 307,056 369,607' 402,237' 398,282' 396,436' 398,598 388,951' 398,530 405,109 2 Foreign countries 241,168 302,134 363,649' 397,182' 392,938' 390,688' 392,319 384,151' 392,700 401,026 3 Europe 91,275 117,756 138,072' 156,086' 152,759' 150,785' 147,244 146,413' 149,517 151,566 4 Austria 596 519 585 770 668' 758 693 744 627 615 5 Belgium-Luxembourg 4,117 2,517 2,709 5,154' 4,848' 4,789 4,278 4,093 3,613 4,114 6 Denmark 333 509 466 291 429 408 341 337 434 438 7 Finland 296 748 531 1,248 947 489 638 407' 487 418 8 France 8,486 8,171 9,441 11,670 12,031 11,539 11,547 11,641' 11,934 12,701 9 Germany 7,645 5,351 3,599 3,663 3,973' 3,758 3,036 3,331' 3,378 3,346 10 Greece 463 537 520 596 600 566 567 609 602 699 11 Italy 7,267 5,626 8,462 8,148' 6,960 8,356' 8,266 8,976 11,056 10,757 12 Netherlands 2,823 3,362 4,290 5,735 5,615 5,116 5,239 4,421' 5,077 4,799 13 Norway 1,457 1,567 1,673 2,084 1,624 2,026 1,912 1,895 1,693 1,548 14 Portugal 354 388 373 425 440 539 434 540 552 597 15 Spain 916 1,405 1,603 1,774 1,825 1,971 1,984 1,905 1,873 2,080 16 Sweden 1,545 1,390 1,799 1,486 1,833 2,095 2,008 1,945 1,839 1,599 17 Switzerland 18,716 29,066 32,246' 35,174' 33,330' 32,919' 32,995 32,461' 31,445 31,097 18 Turkey 518 296 467 315 340 354 320 557 457 585 19 United Kingdom 28,286 48,172 60,683 69,885 69,767 67,976 65,445 65,384' 66,944 67,882 20 Yugoslavia 375 499 562 556 525 435 514 579 565 602 21 Other Western Europe1 6,541 7,006 7,403 6,459 6,539' 6,114' 6,247 6,062' 6,397 7,065 22 U.S.S.R 49 50 65 41 31 47 41 50 54 79 23 Other Eastern Europe2 493 576 596 612 435' 532 738 476 488 546 24 Canada 10,250 12,232 16,026 17,572 19,221 18,170 17,536 16,767' 16,662 15,976 7.5 Latin America and Caribbean 85,223 114,163 140,088' 153,196' 149,541' 150,972' 152,069 145,771' 149,570 153,267 26 Argentina 2,445 3,578 4,038 4,535 4,439 4,411 4,384 4,484 4,606 4,424 27 Bahamas 34,856 44,744 55,818' 62,737' 60,075' 60,077' 58,321 52,912' 55,015 56,300 78 Bermuda 765 1,572 2,266' 2,559' 2,505' 2,763 3,177 3,043 3,309 2,369 79 Brazil 1,568 2,014 3,168 3,690 4,120 4,697 4,427 4,714 4,978 5,330 30 British West Indies 17,794 26,381 34,545 34,639' 33,984' 33,789 35,926 34,419' 34,336 36,901 31 Chile 664 1,626 1,842 1,970 2,176 2,070 1,874 2,052 2,185 2,001 3? Colombia 2,993 2,594 1,689 1,809 1,801 1,791 1,957 2,022 2,057 2,514 33 Cuba 9 9 8 9 7 7 8 8 8 10 34 Ecuador 434 455 1,047 908 845 951 931 924 1,029 1,092 35 Guatemala 479 670 788 825 811 831 810 855 884 896 36 Jamaica 87 126 109 157 116 126 180 122 110 186 37 Mexico 7,235 8,377 10,392 11,976 11,733' 12,268 12,869 12,466 13,426 12,692 38 Netherlands Antilles 3,182 3,597 3,879 4,459 4,253 4,261 4,179 4,187' 4,180 4,149 39 Panama 4,857 4,805 5,924 6,652 6,664 6,506 6,811 6,578 6,843 6,928 40 Peru 694 1,147 1,166 1,279 1,278 1,273 1,343 1,304 1,258 1,247 41 Uruguay 367 759 1,244 1,309 1,302 1,319 1,418 1,361 1,309 1,394 47 Venezuela 4,245 8,417 8,632 10,129 9,684 10,046 9,615 10,367 10,011 10,542 43 Other Latin America and Caribbean 2,548 3,291 3,535 3,553' 3,749' 3,786 3,839 3,952 4,027 4,292 44 49,822 48,716 58,570' 60,389' 61,884' 61,559' 66,397 66,028' 67,182 71,098 China 45 Mainland 158 203 249 469 644 671 876 861 844 1,153 46 Taiwan 2,082 2,761 4,051' 4,672' 4,891' 4,799 4,970 5,041 5,355 4,976 47 Hong Kong 3,950 4,465 6,657 6,416 6,117 6,110 6,977 6,236' 6,535 7,240 48 India 385 433 464 498 621 800 644 616 606 506 49 Indonesia 640 857 997 1,281 911 1,137 939 1,339 884 1,026 50 Israel 592 606 1,722 768 804 726 750 2,017 1,023 1,268 51 Japan 20,750 16,078 18,079 19,433 19,442 19,792 21,310 19,644' 20,750 20,929 52 Korea 2,013 1,692 1,648 1,276 1,393 1,641 1,572 1,552 1,609 1,691 53 Philippines 874 770 1,234 1,032 976 1,084 1,020 1,097 1,252 1,380 54 Thailand 534 629 747 875 779 782 741 980 1,458 1,257 55 Middle-East oil-exporting countries3 12,992 13,433 12,976' 12,414' 14,792' 13,200 13,754 13,890' 13,436 16,779 56 Other Asia 4,853 6,789 9,748' 11,256' 10,515' 10,815' 12,844 12,755' 13,432 12,893 57 Africa 3,180 3,124 2,827 3,331 3,145 3,052 3,018 3,329' 3,492 3,454 58 Egypt 360 432 671 893 858 743 629 763 739 757 59 Morocco 32 81 84 133 128 119 136 115 117 118 60 South Africa 420 292 449 420 409 350 318 459 460 328 61 Zaire, 26 23 87 136 99 101 148 141 163 152 62 Oil-exporting countries4 1,395 1,280 620 816 706 775 821 998 1,034 1,132 63 Other Africa 946 1,016 917 932 946 964 966 852' 978 967 64 Other countries 1,419 6,143 8,067 6,609 6,389 6,150 6,055 5,844 6,277 5,665 65 Australia 1,223 5,904 7,857 6,316 6,095 5,749 5,687 5,464 5,598 5,286 66 All other 196 239 210 293 294 401 368 379 679 379 67 Nonmonetary international and regional organizations 2,721 4,922 5,957 5,055 5,344 5,748 6,279 4,801 5,831 4,083 68 International 1,661 4,049 5,273 4,436 4,740 4,973 5,411 4,086 5,055 3,376 69 Latin American regional 710 517 419 438 431 445 488 518 593 587 70 Other regional5 350 357 265 180 173 330 381 196 183 120 A 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. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • April 1985 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 1984 AArreeaa aanndd ccoouunnttrryy 11998811AA 11998822 11998833 June July Aug. Sept. Oct. Nov. Dec.'' 1 Total 251,589 355,705 391,312' 407,649' 404,168' 396,232' 393,959 383,444' 384,194 398,367 2 Foreign countries 251,533 355,636 391,148' 407,535' 403,959' 396,034' 393,888 382,762' 383,709 397,690 3 Europe 49,262 85,584 91,927' 104,014' 102,311' 100,084' 98,173 95,37C 97,783 97,755 4 Austria 121 229 401 632 636' 581 572 521 537 574 5 Belgium-Luxembourg 2,849 5,138 5,639 6,724' 6,108' 6,156 6,286 5,363 4,984 4,639 6 Denmark 187 554 1,275 1,197' 1,189' 1,088' 1,057 544 520 648 I Finland 546 990 1,044 1,100 928 872 882 887 1,093 891 8 France 4,127 7,251 8,766 9,375' 9,732 9,985' 9,094 8,822 9,309 9,091 9 Germany 940 1,876 1,284' 1,155' 1,142 1,257 1,220 1,097 1,261 1,293 10 Greece 333 452 476 1,036 979 974 1,086 929' 806 817 11 Italy 5,240 7,560 9,018 8,556 8,331 7,832 7,803 7,82 C 8,850 9,074 12 Netherlands 682 1,425 1,267' 1,766' 1,811 1,440 1,470 1.19C 1,229 1,349 13 Norway 384 572 690 729 648 649 649 676 602 675 14 Portugal 529 950 1,114 1,463 1,503 1,433 1,387 1,346 1,262 1,239 15 Spain 2,095 3,744 3,573' 3,799' 3,955 3,700 3,355 3,189' 3,010 2,881 16 Sweden 1,205 3,038 3,358 3,191' 2,677 2,404 2,596 2,362 2,313 2,220 17 Switzerland 2,213 1,639 1,863' 1,909' 1,544' 1,58C 1,741 2,067 2,264 2,205 18 Turkey 424 560 812 1,160 1,210 1,145 1,132 1,145 1,097 1,130 19 United Kingdom 23,849 45,781 47,364' 56,026' 55,556' 54,752' 53,676 53,269' 54,510 5544,,998822 20 Yugoslavia 1,225 1,430 1,718 1,808 1,817 1,857 1,888 1,868 1,898 11,,888866 21 Other Western Europe1 211 368 477 571 800 732 660 66C 603 611 22 U.S.S.R 377 263 192 175 172 175 176 159 169 142 23 Other Eastern Europe2 1,725 1,762 1,598 1,643 1,573 1,471 1,442 1,454' 1,467 1,406 24 Canada 9,193 13,678 16,341 17,459' 18,350 16,326 16,604 16,634' 15,870 16,020 25 Latin America and Caribbean 138,347 187,969 205,491' 209,19& 208,404' 203,465' 203,001 198,372' 198,799 207,487 26 Argentina 7,527 10,974 11,749 11,162 11,381 11,021 11,108 11,014' 10,980 11,028 27 Bahamas 43,542 56,649 59,633' 59,438' 58,479' 56,612' 55,216 52,006 54,084 58,027 28 Bermuda 346 603 566 559 543 509 508 551 638 659 29 Brazil 16,926 23,271 24,667 26,226 26,009' 25,991 26,140 26,146' 26,108 26,333 30 British West Indies 21,981 29,101 35,527' 37,701' 38,782' 35,39C 36,002 34,866' 33,633 37,915 31 Chile 3,690 5,513 6,072 6,492' 6,648 6,619 6,836 6,795' 6,703 6,850 32 Colombia 2,018 3,211 3,745 3,559 3,490 3,444 3,438 3,343 3,406 3,503 33 Cuba 3 3 0 21 0 0 0 0 0 0 34 Ecuador 1,531 2,062 2,307 2,373 2,396 2,380 2,365 2,452 2,431 2,420 35 Guatemala3 124 124 129 125 124 130 120 141 148 158 36 Jamaica3 62 181 215 216 219 216 225 234 222 252 3/ Mexico 22,439 29,552 34,802' 35,227' 35,306^ 35,016 35,602 35,364' 35,294 34,682 38 Netherlands Antilles 1,076 839 1,154 1,312 1,381 1,302 1,296 1,337 1,337 1,359 39 Panama 6,794 10,210 7,848 8,017' 7,057' 8,202 7,639 7,54C 7,351 7,702 40 Peru 1,218 2,357 2,536 2,473 2,487 2,401 2,397 2,416' 2,358 2,384 41 Uruguay 157 686 977 950 961 930 934 962 990 1,088 42 Venezuela 7,069 10,643 11,287 11,175' 10,836' 11,137 10,982 11,029 10,993 11,017 43 Other Latin America and Caribbean 1,844 1,991 2,277' 2,171' 2,306' 2,165 2,191 2,175' 2,123 2,112 44 Asia 49,851 60,952 67,837' 67,03c 64,812' 6655,,997799'' 6666,,000066 6622,,335566'' 6611,,334488 6666,,337766 China 45 Mainland 107 214 292 554 640 639 563 409' 545 710 46 Taiwan 2,461 2,288 1,908 1,702' 1,51c 1,573 1,651 1,588 1,679 1,853 47 Hong Kong 4,132 6,787 8,489' 8,141 6,967 6,809 7,139 7,155 6,933 7,357 48 India 123 222 330 355 323 295 354 302 381 427 49 Indonesia 352 348 805 969 952 906 886 821 797 731 50 Israel 1,567 2,029 1,832 1,910 1,827 1,869 1,802 1,890 1,938 2,082 51 Japan 26,797 28,379 30,354' 29,035' 27,727 29,005' 30,601 26,862' 26,392 29,036 52 Korea 7,340 9,387 9,943' 9,641' 9,799 9,547' 9,586 9,253' 8,896 9,266 53 Philippines 1,819 2,625 2,107 2,495 2,650 2,756 2,578 2,510 2,487 2,583 54 Thailand 565 643 1,219' 1,123' 1,12C 1,262' 1,113 1,072 1,112 1,125 55 Middle East oil-exporting countries4 1,581 3,087 4,954 5,118 5,214 4,924 4,506 4,650' 4,678 5,075 56 Other Asia 3,009 4,943 5,603 5,986 6,081 6,396 5,227 5,844' 5,510 6,131 57 Africa 3,503 5,346 6,654 6,840 7,048 6,969 6,830 6,862 6,719 6,616 58 Egypt 238 322 747 734 638 613 650 674 693 728 59 Morocco 284 353 440 497 549 556 545 582 536 583 60 South Africa 1,011 2,012 2,634 3,065 3,307 3,281 3,152 3,140 2,960 2,792 61 Zaire 112 57 33 39 43 30 18 18 19 18 62 Oil-exporting countries5 657 801 1,073 1,004 1,025 996 944 938 911 839 63 Other 1,201 1,802 1,727 1,502 1,485 1,493 1,522 1,510 1,600 1,655 64 Other countries 1,376 2,107 2,898' 2,9% 3,036 3,210 3,274 3,169 3,189 3,436 65 Australia 1,203 1,713 2,256' 2,435 2,481 2,582 2,673 2,508' 2,487 2,760 66 All other 172 394 642 561 554 628 601 661 702 676 67 Nonmonetary international and regional organizations6 56 68 164 114 209 198 71 681 485 677 A Liabilities and claims of banks in the United States were increased, 3. Included in "Other Latin America and Caribbean" through March 1978. beginning in December 1981, by the shift from foreign branches to international 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and banking facilities in the United States of liabilities to, and claims on, foreign United Arab Emirates (Trucial States). residents. 5. Comprises Algeria, Gabon, Libya, and Nigeria. 1. Includes the Bank for International Settlements. Beginning April 1978, also 6. Excludes the Bank for International Settlements, which is included in includes Eastern European countries not listed in line 23. "Other Western Europe." 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German NOTE. Data for period before April 1978 include claims of banks' domestic Democratic Republic, Hungary, Poland, and Romania. customers on foreigners. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 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 1984 TTyyppee ooff ccllaaiimm 11998811AA 11998822 11998833'' June' July' Aug.' Sept. Oct.' Nov. Dec.P 1 Total 222222888888777777,,,,,,555555555555777777 333333999999666666,,,,,,000000111111555555 444444222222666666,,,,,,222222111111555555 444444444444444444,,,,,,222222999999333333 444444222222777777,,,,,,999999888888555555 444444333333111111,,,,,,222222777777444444 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 222222555555111111,,,,,,555555888888999999 333333555555555555,,,,,,777777000000555555 333333999999111111,,,,,,333333111111222222 444444000000777777,,,,,,666666444444999999 404,168 396,232 333333999999333333,,,,,,999999555555999999 383,444 384,194 333333999999888888,,,,,,333333666666777777 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 333333111111,,,,,,222222666666000000 444444555555,,,,,,444444222222222222 555555777777,,,,,,555555666666999999 555555999999,,,,,,333333888888888888 59,797 58,477 555555999999,,,,,,666666111111777777 61,361 60,842 666666111111,,,,,,222222333333666666 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 999999666666,,,,,,666666555555333333 111111222222777777,,,,,,222222999999333333 111111444444666666,,,,,,333333999999333333 111111555555888888,,,,,,222222111111999999 155,665 153,652 111111555555222222,,,,,,000000333333000000 143,576 144,394 111111555555555555,,,,,,999999000000555555 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 777777444444,,,,,,777777000000444444 111111222222111111,,,,,,333333777777777777 111111222222333333,,,,,,888888333333777777 111111222222999999,,,,,,444444111111999999 127,239 123,716 111111222222222222,,,,,,444444888888222222 120,873 121,401 111111222222333333,,,,,,888888111111555555 66 DDeeppoossiittss 222222333333,,,,,,333333888888111111 444444444444,,,,,,222222222222333333 444444777777,,,,,,111111222222666666 444444999999,,,,,,000000777777444444 48,340 46,990 444444777777,,,,,,333333777777999999 46,778 45,803 444444888888,,,,,,000000222222888888 77 OOtthheerr 555555111111,,,,,,333333222222222222 777777777777,,,,,,111111555555333333 777777666666,,,,,,777777111111111111 888888000000,,,,,,333333444444555555 78,899 76,725 777777555555,,,,,,111111000000333333 74,094 75,598 777777555555,,,,,,777777888888777777 88 AAllll ootthheerr ffoorreeiiggnneerrss 444444888888,,,,,,999999777777222222 666666111111,,,,,,666666111111444444 666666333333,,,,,,555555111111444444 666666000000,,,,,,666666222222444444 61,467 60,387 555555999999,,,,,,888888333333000000 57,634 57,558 555555777777,,,,,,444444111111111111 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 333333555555,,,,,,999999666666888888 444444000000,,,,,,333333111111000000 333333444444,,,,,,999999000000333333 333333666666,,,,,,666666444444333333 333333444444,,,,,,000000222222666666 333333222222,,,,,,999999000000777777 111111,,,,,,333333777777888888 222222,,,,,,444444999999111111 222222,,,,,,999999666666999999 333333,,,,,,444444555555888888 444444,,,,,,555555777777555555 333333,,,,,,333333888888000000 11 Negotiable and readily transferable 222222666666,,,,,,333333555555222222 333333000000,,,,,,777777666666333333 222222666666,,,,,,000000666666444444 222222555555,,,,,,888888222222333333 222222333333,,,,,,333333999999666666 222222333333,,,,,,888888000000555555 12 Outstanding collections and other 888888,,,,,,222222333333888888 777777,,,,,,000000555555666666 555555,,,,,,888888777777000000 777777,,,,,,333333666666222222 666666,,,,,,000000555555555555 555555,,,,,,777777222222333333 13 MEMO: Customer liability on acceptances 222222999999,,,,,,999999555555222222 333333888888,,,,,,111111555555333333 333333777777,,,,,,777777111111555555 444444222222,,,,,,333333999999111111 333333888888,,,,,,555555888888666666 333333666666,,,,,,666666777777777777 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 40,369 42,499 45,856 44,197 43,291 44,040 43,755' 42,231 44,506 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 11998811AA 11998822 Dec.' Mar.' June' Sept. Dec.P 1 Total 154,590 228,150 243,715 238,819 249,646 240,674 243,246 By borrower 2 Maturity of 1 year or less1 116,394 173,917 176,158 163,567 172,144 162,914 165,547 3 Foreign public borrowers 15,142 21,256 24,039 20,453 21,018 21,059 22,059 4 All other foreigners 101,252 152,661 152,120 143,114 151,126 141,854 143,489 5 Maturity of over 1 year1 38,197 54,233 67,557 75,252 77,501 77,760 77,699 6 Foreign public borrowers 15,589 23,137 32,521 36,333 37,797 38,410 39,594 7 All other foreigners 22,608 31,095 35,036 38,919 39,704 39,350 38,105 By area Maturity of 1 year or less1 8 Europe 28,130 50,500 56,117 54,393 59,666 56,769 58,382 9 Canada 4,662 7,642 6,211 6,509 6,925 5,896 5,961 10 Latin America and Caribbean 48,717 73,291 73,660 65,658 65,109 61,479 60,500 11 Asia 31,485 37,578 34,403 31,206 34,002 32,252 33,796 12 Africa 2,457 3,680 4,199 4,472 4,790 4,798 4,442 13 All other2 943 1,226 1,569 1,330 1,652 1,720 2,466 Maturity of over 1 year1 14 Europe 8,100 11,636 13,576 13,334 12,827 11,269 9,572 15 Canada 1,808 1,931 1,857 2,038 2,203 1,801 1,884 16 Latin America and Caribbean 25,209 35,247 43,888 51,233 54,271 56,577 57,821 17 1,907 3,185 4,850 5,150 5,098 5,106 5,303 18 Africa 900 1,494 2,286 2,291 1,865 1,857 2,011 19 All other2 272 740 1,101 1,206 1,237 1,150 1,107 • Liabilities and claims of banks in the United States were increased, 1. Remaining time to maturity, beginning in December 1981, by the shift from foreign branches to international 2. Includes nonmonetary international and regional organizations, banking facilities in the United States of liabilities to, and claims on, foreign residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • April 1985 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1982 1983 1984 AArreeaa oorr ccoouunnttrryy 11998800 11998811 Sept. Dec. Mar. June Sept. Dec. Mar. June7 Sept.? 1 Total 352.0 415.2 438.4 438.7 443.8 439.9 432.0 438.0 434.0 429.8' 408.6 2 G-10 countries and Switzerland 162.1 175.5 175.4 179.7 182.7 177.3 169.1 168.2 165.7 157.8 148.6 3 Belgium-Luxembourg 13.0 13.3 13.6 13.1 13.7 13.3 12.6 12.4 11.0 10.8 9.8 4 France 14.1 15.3 15.8 17.1 17.1 17.1 16.2 16.3 15.9 14.3 14.4 5 Germany 12.1 12.9 12.2 12.7 13.5 12.6 11.6 11.3 11.7 11.0 10.0 6 Italy 8.2 9.6 9.7 10.3 10.2 10.5 10.0 11.4 11.2 11.5 9.7 7 Netherlands 4.4 4.0 3.8 3.6 4.3 4.0 3.6 3.5 3.3 3.0 3.4 8 Sweden 2.9 3.7 4.7 5.0 4.3 4.7 4.9 5.1 5.2 4.3 3.5 9 Switzerland 5.0 5.5 5.1 5.0 4.6 4.8 4.2 4.3 4.3 4.2 3.9 10 United Kingdom 67.4 70.1 70.3 72.1 73.3 70.7 67.8 65.3 64.5 60.2 57.9 11 Canada 8.4 10.9 11.0 10.4 12.5 10.8 9.0 8.3 8.7 8.9 8.1 12 Japan 26.5 30.2 29.3 30.2 29.2 28.7 29.2 30.1 30.0 29.5 27.9 13 Other developed countries 21.6 28.4 32.7 33.7 34.0 34.5 34.3 36.1 35.7 37.1 36.3 14 Austria 1.9 1.9 2.0 1.9 2.1 2.1 1.9 1.9 2.0 2.0 1.8 15 Denmark 2.3 2.3 2.5 2.4 3.3 3.4 3.3 3.4 3.4 3.1 2.9 16 Finland 1.4 1.7 1.8 2.2 2.1 2.1 1.8 2.4 2.1 2.3 1.9 17 Greece 2.8 2.8 2.6 3.0 2.9 2.9 2.9 2.8 3.0 3.3 3.2 18 Norway 2.6 3.1 3.4 3.3 3.3 3.4 3.2 3.3 3.2 3.2 3.2 19 Portugal .6 1.1 1.6 1.5 1.4 1.4 1.4 1.5 1.4 1.7 1.6 20 Spain 4.4 6.6 7.7 7.5 7.1 7.2 7.2 7.1 7.1 7.3 6.9 21 Turkey 1.5 1.4 1.5 1.4 1.5 1.4 1.5 1.7 1.9 2.0 1.9 22 Other Western Europe 1.7 2.1 2.1 2.3 2.3 2.0 2.1 1.8 1.8 1.9 1.7 23 South Africa 1.1 2.8 3.6 3.7 3.6 3.9 4.7 4.7 4.8 4.7 5.0 24 Australia 1.3 2.5 4.0 4.4 4.6 4.6 4.4 5.5 5.2 5.7 6.2 25 OPEC countries2 22.7 24.8 27.3 27.4 28.5 28.3 27.2 28.9 28.6 26.7 24.9 26 Ecuador 2.1 2.2 2.3 2.2 2.2 2.2 2.1 2.2 2.1 2.1 2.1 27 Venezuela 9.1 9.9 10.4 10.5 10.4 10.4 9.8 9.9 9.7 9.5 9.0 28 Indonesia 1.8 2.6 2.9 3.2 3.5 3.2 3.4 3.8 4.0 4.0 3.8 29 Middle East countries 6.9 7.5 9.0 8.7 9.3 9.5 9.1 10.0 9.8 8.4 7.4 30 African countries 2.8 2.5 2.7 2.8 3.0 3.0 2.8 3.0 3.0 2.7 2.5 31 Non-OPEC developing countries 77.4 96.3 104.1 107.1 108.1 108.8 109.8 111.5 112.0 113.3' 111.9 Latin America 32 Argentina 7.9 9.4 9.2 8.9 9.0 9.4 9.5 9.5 9.5 9.2 9.1 33 Brazil 16.2 19.1 22.4 22.9 23.2 22.7 23.1 23.1 25.1 25.4 26.3 34 Chile 3.7 5.8 6.2 6.3 6.0 5.8 6.3 6.4 6.5 6.7 7.1 35 Colombia 2.6 2.6 2.8 3.1 2.9 3.2 3.2 3.2 3.1 3.0 2.9 36 Mexico 15.9 21.6 25.0 24.5 25.1 25.3 25.9 26.1 25.6 26.7 26.1 37 Peru 1.8 2.0 2.6 2.6 2.4 2.6 2.4 2.4 2.3 2.3 2.2 38 Other Latin America 3.9 4.1 4.3 4.0 4.2 4.3 4.2 4.2 4.3 4.0 3.9 Asia China 39 Mainland .2 .2 .2 .2 .2 .2 .2 .3 .3 .6 .5 40 Taiwan 4.2 5.1 4.9 5.3 5.1 5.1 5.2 5.3 4.9 5.3' 5.2 41 India .3 .3 .5 .6 .7 .7 .8 1.0 1.0 1.0 1.1 42 Israel 1.5 2.1 1.9 2.3 2.0 2.3 1.7 1.9 1.6 1.9 1.7 43 Korea (South) 7.1 9.4 9.4 10.9 10.9 10.9 10.9 11.4 11.1 11.2 10.1 44 Malaysia 1.1 1.7 1.8 2.1 2.5 2.6 2.8 2.9 2.8 2.7 3.0 45 Philippines 5.1 6.0 6.1 6.3 6.6 6.4 6.2 6.2 6.7 6.3 5.9 46 Thailand 1.6 1.5 1.3 1.6 1.6 1.8 1.7 2.1 1.9 1.8 1.8 47 Other Asia .6 1.0 1.3 1.1 1.4 1.2 1.0 1.0 .9 1.1 1.2 Africa 48 Egypt .8 1.1 1.3 1.2 1.1 1.3 1.4 1.5 1.5 1.4 1.2 49 Morocco .7 .7 .8 .7 .8 .8 .8 .8 .8 .8 .8 50 .2 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 2.1 2.3 2.2 2.4 2.3 2.2 2.4 2.3 2.2 1.9 1.9 52 Eastern Europe 7.4 7.8 6.3 6.2 5.7 5.8 5.3 5.3 4.9 4.9 4.6 53 U.S.S.R .4 .6 .3 .3 .3 .4 .2 .2 .2 .2 .2 54 Yugoslavia 2.3 2.5 2.2 2.2 2.2 2.3 2.3 2.4 2.3 2.3 2.3 55 Other 4.6 4.7 3.8 3.7 3.2 3.0 2.8 2.8 2.5 2.4 2.1 56 Olfshore banking centers 47.0 63.7 72.2 66.8 67.9 69.1 69.4 71.1 70.7 72.8 65.6 57 Bahamas 13.7 19.0 21.4 19.0 18.5 20.7 21.8 22.0 24.6 27.0 23.5 58 Bermuda .6 .7 .8 .9 1.0 .8 .8 .9 .7 .7 1.0 59 Cayman Islands and other British West Indies 10.6 12.4 13.6 12.9 12.5 12.6 11.0 12.7 11.4 11.6 10.2 60 Netherlands Antilles 2.1 3.2 3.3 3.3 3.1 2.6 4.1 4.2 3.3 3.3 3.3 61 Panama4 5.4 7.7 8.1 7.6 7.1 6.6 5.7 6.0 6.3 6.4 5.6 62 Lebanon .2 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 8.1 11.8 15.1 13.9 15.1 14.5 15.2 14.9 14.4 13.5 12.6 64 Singapore 5.9 8.7 9.8 9.2 10.4 11.2 10.5 10.3 9.9 10.2 9.5 65 Others' .3 .1 .0 .0 .0 .0 .1 .0 .0 .0 .0 66 Miscellaneous and unallocated6 14.0 18.8 20.4 17.9 16.9 16.2 16.9 17.0 16.4 17.3 16.8 1. The banking offices covered by these data are the U.S. offices and foreign Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. as Bahrain and Oman (not formally members of OPEC). Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. Excludes Liberia. (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 4. Includes Canal Zone beginning December 1979. adjusted to exclude the claims on foreign branches held by a U.S. office or another 5. Foreign branch claims only. foreign branch of the same banking institution. The data in this table combine 6. Includes New Zealand, Liberia, and international and regional organizaforeign branch claims in table 3.14 (the sum of lines 7 through 10) with the ciaims tions. of U.S. offices in table 3.18 (excluding those held by agencies and branches of 7. Beginning with June 1984 data, reported claims held by foreign branches foreign banks and those constituting claims on own foreign branches). have been reduced by an increase in the reporting threshold for "shell" branches 2. Besides the Organization of Petroleum Exporting Countries shown individ- from $50 million to $150 million equivalent in total assets, the threshold now ually, this group includes other members of OPEC (Algeria, Gabon, Iran, Iraq, applicable to all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A63 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1983 1984 Type, and area or country 998800 11998811 11998822 Sept. Dec. Mar. June Sept.P 1 Total 29,434 28,618 27,512 26,325 24,866 29,189 34,000 30,708 2 Payable in dollars 25,689 24,909 24,280 23,546 21,918 25,968 30,815 27,910 3 Payable in foreign currencies 3,745 3,709 3,232 2,780 2,948 3,221 3,185 2,799 By type 4 Financial liabilities 11,330 12,157 11,066 10,900 10,349 14,165 18,327 15,854 5 Payable in dollars 8,528 9,499 8,858 9,025 8,619 12,134 16,297 14.069 6 Payable in foreign currencies 2,802 2,658 2,208 1,875 1,730 2,031 2,030 1,784 7 Commercial liabilities 18,104 16,461 16,446 15,425 14,516 15,024 15,674 14,855 8 Trade payables 12,201 10,818 9,438 8,567 7,736 7,865 7,897 6,921 9 Advance receipts and other liabilities... 5,903 5,643 7,008 6,858 6,780 7,159 7,776 7,934 10 Payable in dollars 17,161 15,409 15,423 14,521 13,299 13,834 14,518 13,841 11 Payable in foreign currencies 943 1,052 1,023 904 1,218 1,190 1,155 1,014 By area or country Financial liabilities 12 Europe 6,481 6,825 6,501 6,014 5,675 7,071 7,230 6,700 13 Belgium-Luxembourg 479 471 505 379 302 428 359 419 14 France 327 709 783 785 820 933 900 904 15 Germany 582 491 467 449 498 519 561 508 16 Netherlands 681 748 711 730 581 527 583 584 17 Switzerland 354 715 792 500 486 641 563 513 18 United Kingdom 3,923 3,565 3,102 3,014 2,839 3,790 4,013 3,471 19 Canada 964 963 746 788 768 798 735 820 20 Latin America and Caribbean 3,136 3,356 2,751 2,737 2,609 4,914 8,888 6,754 21 Bahamas 964 1,279 904 784 751 1,419 3,603 2,610 22 Bermuda 1 7 14 13 13 51 13 11 23 Brazil 23 22 28 32 32 37 25 32 24 British West Indies 1,452 1,241 1,027 1,095 1,018 2,635 4,457 3,244 25 Mexico 99 102 121 185 215 245 237 246 26 Venezuela 81 98 114 117 124 121 124 128 27 Asia 723 976 1,039 1,327 1,268 1,355 1,449 1,551 28 Japan 644 792 715 896 835 947 1,000 1,070 29 Middle East oil-exporting countries2.. 38 75 169 201 170 170 180 140 30 Africa 11 14 17 19 19 19 16 16 1 0 0 0 0 0 0 0 31 Oil-exporting countries3 15 24 12 15 10 9 9 13 32 All other4 Commercial liabilities 4,402 3,770 3,831 3,633 3,245 3,567 3,409 3,967 33 Europe 90 71 52 47 62 40 45 34 34 Belgium-Luxembourg 582 573 598 523 437 488 525 430 35 France 679 545 468 472 427 417 501 552 36 Germany 219 220 346 243 268 259 265 238 37 Netherlands 499 424 367 460 241 477 246 417 38 Switzerland 1,209 880 1,027 967 732 847 794 1,133 39 United Kingdom 40 Canada 888 897 1,495 1,418 1,841 1,776 1,840 1,923 41 Latin America and Caribbean 11,,330000 1,044 1,570 1,508 1,445 1,778 1,705 1,758 42 Bahamas 88 2 16 1 1 14 17 1 43 Bermuda 75 67 117 77 67 158 124 110 44 Brazil 111 67 60 48 44 68 31 68 45 British West Indies 35 2 32 14 6 33 5 8 46 Mexico 367 340 436 512 585 682 568 641 47 Venezuela 319 276 642 539 404 531 630 628 48 Asia 10,242 9,384 8,144 7,638 6,741 6,620 6,989 5,554 49 Japan 802 1,094 1,226 1,305 1,247 1,291 1,235 1,388 50 Middle East oil-exporting countries2 5. 8,098 7,008 5,503 4,817 4,178 3,735 4,190 2,361 51 Africa 817 703 753 628 553 539 684 587 52 Oil-exporting countries3 517 344 277 231 167 243 217 251 53 All other4 456 664 651 600 692 743 1,046 1,067 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

A64 International Statistics • April 1985 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1983 1984 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998800 11998811 11998822 Sept. Dec. Mar. June Sept.? 1 Total 34,482 36,185 28,725 32,934 34,547 32,773 31,322 29,537 2 Payable in dollars 31,528 32,582 26,085 30,029 31,458 29,885 28,357 26,762 3 Payable in foreign currencies 2,955 3,603 2,640 2,905 3,089 2,888 2,965 2,775 By type 4 Financial claims 19,763 21,142 17,684 22,038 23,416 21,911 20,874 19,254 5 Deposits 14,166 15,081 13,058 16,907 18,020 16,665 15,759 14,542 6 Payable in dollars 13,381 14,456 12,628 16,463 17,523 16,236 15,250 14,110 V Payable in foreign currencies 785 625 430 445 497 428 510 432 8 Other financial claims 5,597 6,061 4,626 5,130 5,396 5,246 5,114 4,711 9 Payable in dollars 3,914 3,599 2,979 3,279 3,441 3,457 3,358 3,028 10 Payable in foreign currencies 1,683 2,462 1,647 1,851 1,955 1,788 1,756 1,683 11 Commercial claims 14,720 15,043 11,041 10,896 11,131 10,862 10,448 10,283 12 Trade receivables 13,960 14,007 9,994 9,562 9,721 9,540 9,105 8,867 13 Advance payments and other claims 759 1,036 1,047 1,334 1,410 1,321 1,343 1,416 14 Payable in dollars 14,233 14,527 10,478 10,287 10,494 10,191 9,749 9,624 15 Payable in foreign currencies 487 516 563 609 637 671 699 659 By area or country Financial claims 16 Europe 6,069 4,596 4,873 6,232 6,440 6,179 6,259 5,424 17 Belgium-Luxembourg 145 43 15 25 37 30 37 15 18 France 298 285 134 135 154 175 151 162 19 Germany 230 224 178 161 159 148 161 187 20 Netherlands 51 50 97 89 71 57 158 62 21 Switzerland 54 117 107 34 38 90 61 64 22 United Kingdom 4,987 3,546 4,064 5,577 5,768 5,470 5,438 4,703 23 Canada 5,036 6,755 4,377 5,244 6,111 5,610 5,098 4,344 24 Latin America and Caribbean 7,811 8,812 7,546 9,500 9,809 9,079 8,238 8,320 25 Bahamas 3,477 3,650 3,279 3,829 4,745 3,787 3,122 3,162 26 Bermuda 135 18 32 62 96 3 5 5 27 Brazil 96 30 62 49 53 87 83 84 28 British West Indies 2,755 3,971 3,255 4,457 3,830 4,302 4,210 4,187 29 Mexico 208 313 274 315 291 279 230 232 30 Venezuela 137 148 139 137 134 130 124 128 31 Asia 607 758 698 764 764 753 963 893 32 Japan 189 366 153 257 297 309 307 376 33 Middle East oil-exporting countries2 20 37 15 8 4 7 8 7 34 Africa 208 173 158 151 147 144 158 160 35 Oil-exporting countries3 26 46 48 45 55 42 35 37 36 All other4 32 48 31 148 145 145 158 113 Commercial claims 37 Europe 5,544 5,405 3,826 3,394 3,670 3,608 3,555 3,563 38 Belgium-Luxembourg 233 234 151 116 135 173 142 128 39 France 1,129 776 474 486 459 413 408 410 40 Germany 599 561 357 382 348 363 443 367 41 Netherlands 318 299 350 282 334 308 306 303 42 Switzerland 354 431 360 292 317 336 250 289 43 United Kingdom 929 985 811 738 809 787 812 888 44 Canada 914 967 633 792 829 1,061 933 1,024 45 Latin America and Caribbean 3,766 3,479 2,526 2,870 22,,669955 22,,441199 2,042 1,886 46 Bahamas 21 12 21 15 88 88 4 14 47 Bermuda 108 223 261 246 190 216 89 88 48 Brazil 861 668 258 611 493 357 310 219 49 British West Indies 34 12 12 12 7 7 8 10 50 Mexico 1,102 1,022 775 898 884 745 577 509 51 Venezuela 410 424 351 282 272 268 241 242 52 Asia 3,522 3,959 3,050 2,934 3,063 2,997 3,085 2,879 53 Japan 1,052 1,245 1,047 1,033 1,114 1,186 1,178 1,087 54 Middle East oil-exporting countries2 825 905 751 719 737 701 710 702 55 Africa 653 772 588 562 588 497 536 594 56 Oil-exporting countries3 153 152 140 131 139 132 128 135 57 All other4 321 461 417 344 286 280 297 338 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

Securities Holdings and Transactions A65 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1984 1984 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998822 11998833 Jan.- June July Aug. Sept. Oct. Nov. Dec.P Dec. U.S. corporate securities STOCKS 1 Foreign purchases 41,881 69,770 60,457 4,553' 3,377' 7,255 4,052 4,657' 4,837 4,482 2 Foreign sales 37,981 64,360 63,394 4,902' 3,946' 7,399 4,892 5,398' 4,752 5,049 3 Net purchases, or sales (-) 3,901 5,410 -2,937 -349' -569' -144 -840 -741' 86 -567 4 Foreign countries 3,816 5,312 -3,052 -359' -578' -290 -909 -752' 74 -466 5 Europe 2,530 3,979 -2,992 -319' -592' -410 -690 -529' -96 -359 6 France -143 -97 -405 -3 -45 -28 -67 -37 -46 -54 7 Germany 333 1,045 -50 2 -38 -125 -63 -10 11 -105 8 Netherlands -63 -109 -315 -76 -34 -19 -66 -47 -15 -29 9 Switzerland -579 1,325 -1,490 -120 -321 -358 -335 -13C -34 -249 10 United Kingdom 3,117 1,799 -664 -181' -127' 146 -131 -251' 11 91 11 Canada 222 1,151 1,673 158 188 129 149 150 47 134 12 Latin America and Caribbean 317 529 493 38 -58 213 9 -89 30 67 13 Middle East1 366 -808' -1,998 -215 -55 -214 -207 -270 -12 -196 14 Other Asia 247 395' -377 -27 -76' -57 -160 -92 74 -97 15 Africa 2 42 -23 3 -2 -5 -6 -8 -8 -6 16 Other countries 131 24 171 2 16 54 -3 87 39 -11 17 Nonmonetary international and regional organizations 85 98 115 10 9 147 69 11 11 -101 BONDS2 18 Foreign purchases 21,639 24,000 39,154 2,004 3,082 2,885 3,356 6,994 4,899 6,359 19 Foreign sales 20,188 23,097' 26,030 1,795 2,503 2,030 2,035 3,060 2,556 2,901 20 Net purchases, or sales (-) 1,451 9OY 13,124 208 579 855 1,321 3,934 2,342 3,458 21 Foreign countries 1,479 888' 12,827 168 539 902 1,278 3,954 2,130 3,482 22 Europe 2,082 909' 11,648 272 480 502 1,004 3,956 1,950 3,292 23 France 305 -89 207 4 33 17 8 143 -11 24 24 Germany 2,110 344' 1,728 122 256 181 19 606 139 182 25 Netherlands 33 51 93 11 3 16 2 22 -1 15 26 Switzerland 157 583' 644 35 13 49 9 253 159 276 27 United Kingdom -589 434 8,378 77 -80 311 922 2,860 1,599 2,733 28 Canada 24 123 -71 32 -35 54 3 -3 13 14 29 Latin America and Caribbean 159 100 390 15 14 76 64 42' 44 78 30 Middle East1 -752 -1,161' -1,011 -287 -60 1 -19 -232 -45 -179 31 Other Asia -22 865 1,862 135 138 265 223 192 169 276 32 Africa -19 0 1 0 0 1 1 0 -2 1 33 Other countries 7 52 9 0 1 3 3 0 2 0 34 Nonmonetary international and regional organizations -28 15 297 40 41 -48 43 -20 213 -24 Foreign securities 35 Stocks, net purchases, or sales (-) -1,341 -3,765 -1,074 -35' 111' -489' -340 -318 -177 -221 36 Foreign purchases 7,163 13,281 14,584 1,126' 899' 1,284' 921 1,333 1,147 1,169 37 Foreign sales 8,504 17,046 15,658 1,161' 787' 1,773' 1,261 1,651 1,324 1,390 38 Bonds, net purchases, or sales (-) -6,642' -3,239' -3,089 241 178' -287' -481 -1,187 -231 -662 39 Foreign purchases 27,167 36,333' 57,820 5,308 4,427 5,770 4,122 4,527' 6,601 5,619 40 Foreign sales 33,809' 39,572 60,909 5,066 4,249' 6,057' 4,604 5,714' 6,832 6,281 41 Net purchases, or sales (-), of stocks and bonds -7,98 y -7,004' -4,163 207' 289' -777' -821 -1,505 -408 -882 42 Foreign countries -6,817' -6,559' -4,061 192' 227' -6IY -884 -1,470 -561 -461 43 Europe -2,584 -5,492' -8,634 -473' -468' -602' -962 -1,574 -707 -1,188 44 Canada -2,363 -1,328' 413 122 174 -7 -198 -68 -23 254 45 Latin America and Caribbean 324' 1,120 2,474 465 237 127 28 217 207 104 46 Asia -1,822 -855 1,686 80 331' -136' 169 -30 88 226 47 Africa -9 141 -107 -4 -21 11 -14 -19 -16 3 48 Other countries -364 -144' 107 -1' -25 -5' 92 6 -110 139 49 Nonmonetary international and regional organizations -1,165 -445 -102 15 62 -163 64 -36 153 -422 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, ties sold abroad by U.S. corporations organized to finance direct investments Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). abroad. 2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • April 1985 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1984 1984 11998822 11998833 Country or area D Ja e n c . . - June July Aug. Sept. Oct. Nov. Dec.? Holdings (end of period)1 1 Estimated total2 85,220 88,913^ 93,26y 94,862' 101,457' 97,664' 100,595' 102,792' 110,336 2 Foreign countries2 80,637 83,799' 86,738' 87,909' 93,486' 91,755' 92,847' 95,14C 100,242 3 Europe2 29,284 35,509 39,287' 40,375' 44,365' 43,653' 44,448' 45,223' 46,571 4 Belgium-Luxembourg 447 16 135 138 171 191 218 259 305 5 Germany2 14,841 17,290 19,735 19,627 20,663 19,915 19,876 19,913 20,249 6 Netherlands 2,754 3,129 3,003' 3,122' 3,116^ 3,574' 3,567 3,583 7 Sweden 677 847 940 957 905 981 980 981 893 8 Switzerland2 1,540 1,118 1,752 2,021 2,089 2,188 2,015 1,728 1,753 9 United Kingdom 6,549 8,515 9,200 9,443 12,301 11,988 12,729 12,974 13,742 10 Other Western Europe 2,476 4,594 4,528' 5,087' 5,122' 5,275' 5,056' 5,803 6,048 11 Eastern Europe 0 0 -1 -1 -1 -1 -1 -1 -1 12 Canada 602 1,301 1,600 1,631 1,862 2,149 2,386 2,578 2,827 13 Latin America and Caribbean 1,076 863 676' 133' 446' 611 931 1,897 2,277 14 Venezuela 188 64 75 75 76 79 80 88 78 15 Other Latin America and Caribbean 656 716 488' 590' 822 914 975 1,032 1,245 16 Netherlands Antilles 232 83 112 -532 -452 -382 -124 777 955 17 Asia 49,543 46,008' 45,011' 45,575' 46,575' 45,100 44,797 45,166 48,371 18 Japan 11,578 13,892' 15,334' 15,IW 16,248' 16.23C 17,082' 18,369 19,954 19 Africa 77 79 88 88 -11 15 15 10 12 20 All other 55 38 77 108 250 227 271 266 183 21 Nonmonetary international and regional organizations 4,583 5,114 6,525 6,953' 7,971 5,909 7,748 7,652 10,094 22 International 4,186 4,404 5,860 6,241 7,340 5,191 6,843 6,655 9,016 23 Latin American regional 6 6 6 6 6 6 6 6 6 Transactions (net purchases, or sales (-) during period) 24 Total2 14,972 3,693' 21,423 -114 1,599 6,5% -3,799 2,931 2,197 7,544 25 Foreign countries2 16,072 3,162' 16,443 972 1,172 5,576 -1,736 1,092 2,293 5,102 26 Official institutions 14,550 779 453 -896' 177 1,366 -1,968 -823 -602 1,895 27 Other foreign2 1,518 2,382' 15,990 1,868' 994 4,210 232 1,915 2,895 3,207 28 Nonmonetary international and regional organizations -1,097 535 4,981 -1,086 428 1,020 -2,063 1,839 -96 2,441 MEMO: Oil-exporting countries 29 Middle East3 7,575 -5,419 -6,277 67 -312 -411 -144 -983 -1,284 -200 30 Africa4 -552 -1 -101 0 0 -100 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Jan. 31, 1985 Rate on Jan. 31, 1985 Rate on Jan. 31, 1985 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.5 June 1984 France1 10.75 Nov. 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 16.5 Sept. 1984 United Kingdom2. Canada.. 10.09 Dec. 1984 5.0 Oct. 1983 Venezuela 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 NOTE. Rates shown are mainly those at which the central bank either discounts central bank transacts the largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1984 1985 CCoouunnttrryy,, oorr ttyyppee 11998822 11998833 11998844 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Eurodollars 12.24 9.57 10.75 12.02 11.81 11.67 10.77 9.50 8.90 8.37 2 United Kingdom 12.21 10.06 9.91 11.38 11.09 10.79 10.60 9.87 9.74 11.63 3 Canada 14.38 9.48 11.29 13.03 12.41 12.20 11.99 11.09 10.41 9.70 4 Germany 8.81 5.73 5.96 6.09 6.00 5.81 6.06 5.92 5.81 5.84 5 Switzerland 5.04 4.11 4.35 4.72 4.81 5.04 5.23 5.03 4.96 5.13 6 Netherlands 8.26 5.58 6.08 6.39 6.26 6.23 6.16 5.87 5.77 5.87 7 France 14.61 12.44 11.66 11.70 11.37 11.00 10.75 10.54 10.66 10.43 8 Italy 19.99 18.95 17.08 16.73 16.50 17.28 17.13 17.13 16.86 15.82 9 Belgium 14.10 10.51 11.41 11.90 11.73 11.16 11.00 10.81 10.75 10.75 10 Japan 6.84 6.49 6.32 6.31 6.35 6.33 6.31 6.32 6.33 6.27 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • April 1985 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1984 1985 CCoouunnttrryy//ccuurrrreennccyy 11998822 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. 1 Australia/dollar1 101.65 90.14 87.937 84.73 83.08 83.64 85.88 84.00 81.51 2 Austria/schilling 17.060 17.968 20.005 20.268 21.293 21.557 21.075 21.802 22.267 3 Belgium/franc 45.780 51.121 57.749 58.282 61.132 62.048 60.475 62.380 63.455 4 Brazil/cruzeiro 179.22 573.27 1841.50 1994.30 2226.79 2453.64 2734.16 3008.55 3346.67 5 Canada/dollar 1.2344 1.2325 1.2953 1.3035 1.3145 1.3189 1.3168 1.3201 1.3240 6 China, P.R./yuan 1.8978 1.9809 2.3308 2.3718 2.5469 2.6488 2.6785 2.7953 2.8160 7 Denmark/krone 8.3443 9.1483 10.354 10.5174 10.9753 11.090 10.824 11.126 11.330 8 Finland/markka 4.8086 5.5636 6.0007 6.0626 6.2783 6.3726 6.2653 6.4563 6.6368 9 France/franc 6.5793 7.6203 8.7355 8.8567 9.3041 9.4108 9.1981 9.5083 9.7036 10 Germany/deutsche mark 2.428 2.5539 2.8454 2.8856 3.0314 3.0678 2.9985 3.1044 3.1706 11 Greece/drachma 66.872 87.895 112.73 115.11 120.40 126.06 123.63 127.26 129.38 12 Hong Kong/dollar 6.0697 7.2569 7.8188 7.8388 7.8430 7.8242 7.8235 7.8287 7.8110 13 India/rupee 9.4846 10.1040 11.348 11.556 11.858 12.027 12.078 12.293 12.612 14 Ireland/pound1 142.05 124.81 108.64 106.84 102.28 100.85 103.41 100.37 98.23 15 Israel/shekel 24.407 55.865 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 Italy/lira 1354.00 1519.30 1756.10 1780.47 1870.79 1898.98 1863.05 1912.52 1948.76 17 Japan/yen 249.06 237.55 237.45 242.26 245.46 246.75 243.63 247.96 254.18 18 Malaysia/ringgit 2.3395 2.3204 2.3448 2.3331 2.3528 2.4076 2.4300 2.4164 2.4804 19 Mexico/peso 72.990 155.01 192.31 196.98 197.71 203.33 210.79 219.56 227.56 20 Netherlands/guilder 2.6719 2.8543 3.2083 3.2539 3.4188 3.4597 3.3817 3.5035 3.5819 21 New Zealand/dollar1 75.101 66.790 57.837 49.912 48.953 48.614 49.278 48.260 47.040 22 Norway/krone 6.4567 7.3012 8.15% 8.2991 8.6246 8.8721 8.7175 8.9805 9.1765 23 Philippines/peso 8.5324 11.0940 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Portugal/escudo 80.101 111.610 147.70 151.02 158.45 163.36 163.10 167.31 172.56 25 Singapore/dollar 2.1406 2.1136 2.1325 2.1472 2.1635 2.1667 2.1554 2.1732 2.2011 26 South Africa/rand1 92.297 89.85 69.534 63.76 60.08 56.54 55.47 52.66 46.34 27 South Korea/won 731.93 776.04 807.91 811.42 815.82 820.03 818.89 825.73 832.16 28 Spain/peseta 110.09 143.500 160.78 164.41 170.19 172.15 168.10 171.98 175.13 29 Sri Lanka/rupee 20.756 23.510 25.428 25.285 25.605 25.906 26.075 26.213 26.392 30 Sweden/krona 6.2838 7.6717 8.2706 8.3489 8.5892 8.6887 8.5957 8.8614 9.0716 31 Switzerland/franc 2.0327 2.1006 2.3500 2.4150 2.5049 2.5245 2.4700 2.5602 2.6590 32 Taiwan/dollar n.a. n.a. 39.633 39.092 39.159 39.226 39.419 39.509 39.209 33 Thailand/baht 23.014 22.991 23.582 23.018 23.013 23.020 26.736 27.091 27.330 34 United Kingdom/pound1 174.80 151.59 133.66 131.32 125.63 121.% 123.92 118.61 112.71 35 Venezuela/bolivar 4.2981 10.6840 n.a. 12.725 n.a. n.a. n.a. n.a. n.a. MEMO United States/dollar2 116.57 125.34 138.19 140.21 145.70 147.56 144.92 149.24 152.83 1. Value in U.S. cents. NOTE. Averages of certified noon buying rates in New York for cable transfers. 2. Index of weighted-average exchange value of U.S. dollar against currencies Data in this table also appear in the Board's G.5 (405) release. For address, see of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 inside front cover. global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see "Index of the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on p. 700 of the August 1978 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available P Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 1984 All 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, December 31, 1983 June 1984 All Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1984 November 1984 A4 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1984 April 1985 A70 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1984 April 1985 A74 Special tables begin on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • April 1985 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 19841 Millions of dollars All states2 New York Other states2 CCaallii-ffoorrnniiaa,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 branches Branches Agencies 1 Total assets5 251,835 196,633 55,202 175,019 5,803 45,717 11,777 6,613 2 Cash and due from depository institutions 54,479 49,704 4,775 46,601 331 4,613 2,057 492 3 Currency and coin (U.S. and foreign) 22 19 2 14 1 2 2 2 4 Balances with Federal Reserve Banks 990 924 66 829 14 45 24 54 5 Balances with other central banks 46 46 0 38 0 0 8 0 6 Demand balances with commercial banks in United States 1,409 1,237 171 1,117 53 95 80 7 All other balances with depository institutions in United States and with banks in foreign countries 51,732 47,209 4,522 44,343 259 4,465 1,939 414 8 Time and savings balances with commercial banks in United States 25,249 22,556 2,693 20,886 213 2,585 1,128 250 9 Balances with other depository institutions in United States 541 528 14 516 0 13 0 11 10 Balances with banks in foreign countries 25,941 24,125 1,816 22,940 46 1,867 811 152 11 Foreign branches of U.S. banks 2,056 2,020 36 1,953 10 36 57 0 12 Other banks in foreign countries 23,885 22,105 1,780 20,987 36 1,831 753 152 13 Cash items in process of collection 281 268 13 260 4 6 5 2 14 Total securities, loans, and lease financing receivables 143,843 109,205 34,638 94,521 4,364 27,560 9,046 3,303 15 Total securities, book value 9,790 8,888 902 8,412 103 801 319 33 16 U.S. Treasury 4,962 4,744 218 4,522 87 54 174 25 17 Obligations of other U.S. government agencies and colorations 538 518 20 512 1 16 1 18 Obligations of states and political subdivisions in United States 66 56 10 41 0 1 14 19 Other bonds, notes, debentures, and corporate stock .. 4,224 3,570 654 3,337 15 731 129 20 Federal funds sold and securities purchased under agreements to resell 6,923 5,965 958 5,722 521 374 158 By holder 21 Commercial banks in United States 6,120 5,463 656 5,220 234 359 158 22 Others 804 502 302 502 287 15 0 By type 23 One-day maturity or continuing contract 6,364 5,406 958 5,163 521 374 158 24 Securities purchased under agreements to resell 269 222 47 222 40 0 0 25 Other 6,095 5,183 912 4,940 482 374 158 26 Other securities purchased under agreements to resell 559 559 0 559 0 0 0 27 Total loans, gross 134,423 100,638 33,785 86,418 4,264 26,804 8,733 3,275 28 LESS: Unearned income on loans 369 320 49 308 4 45 6 4 29 EQUALS: Loans, net 134,053 100,317 33,736 86,110 4,261 26,759 8,727 3,270 Total loans, gross, by category 30 Real estate loans 4,883 2,147 2,736 1,377 16 1,9% 225 252 31 Loans to financial institutions 52,156 40,245 11,911 35,654 887 10,784 3,606 497 32 Commercial banks in United States 28,605 21,670 6,935 19,170 234 6,946 1,830 316 33 U.S. branches and agencies of other foreign banks .. 24,302 17,717 6,585 15,708 199 6,660 1,361 304 34 Other commercial banks 4,303 3,953 350 3,462 35 286 468 12 35 Banks in foreign countries 21,181 16,401 4,779 14,747 596 3,714 1,349 180 36 Foreign branches of U.S. banks 870 688 182 639 0 210 16 5 37 Other 20,311 15,713 4,597 14,108 5% 3,504 1,333 175 38 Other financial institutions 2,370 2,173 197 1,737 57 125 428 1 39 Loans for purchasing or carrying securities 1,080 1,079 1 1,001 1 77 0 1 40 Commercial and industrial loans 58,753 43,683 15,070 35,790 1,861 12,010 4,332 2,316 41 U.S. addressees (domicile) 35,859 25,874 9,985 19,452 259 8,878 3,726 1,624 42 Non-U.S. addressees (domicile) 22,894 17,809 5,085 16,339 1,602 3,133 606 691 43 Loans to individuals for household, family, and other personal expenditures 252 226 26 179 2 27 8 29 44 All other loans 17,298 13,258 4,040 12,417 1,498 1,909 562 180 45 Loans to foreign governments and official institutions 16,444 12,547 3,897 11,784 1,477 1,799 532 146 46 Other 854 711 143 633 20 110 29 34 47 Lease financing receivables 0 0 0 0 0 0 0 0 48 All other assets 46,590 31,759 14,831 28,174 587 13,169 516 2,745 49 Customers' liability on acceptances outstanding 15,909 12,238 3,671 11,783 131 3,468 197 228 50 U.S. addressees (domicile) 9,907 6,981 2,926 6,763 31 2,890 174 29 51 Non-U.S. addressees (domicile) 6,002 5,257 745 5,020 100 578 23 199 52 Net due from related banking institutions6 24,365 14,611 9,755 12,017 262 8,598 26 2,388 53 Other 6,315 4,910 1,405 4,374 194 1,104 293 129 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 4.30 Continued All states2 New York Other states2 IItteemm Total Branches3 Agencies Branches3 Agencies ff tt oo CC oo rr aa tt nn aa ll ii ii ll -- aa 44 ,, bb II rr ll aa llii nn nn cc oo hh iiss ee ,, ss Branches Agencies 54 Total liabilities5 251,875 196,633 55,202 175,019 5,803 45,717 11,777 6,613 6,906 55 Total deposits and credit balances 132,292 114,725 17,567 105,079 2,034 14,909 3,838 3,898 2,534 56 Individuals, partnerships, and corporations 40,698 37,863 2,835 32,574 87 1,568 1,013 3,358 2,098 57 U.S. addressees (domicile) 21,530 21,464 66 17,122 18 386 735 3,253 17 58 Non-U.S. addressees (domicile) 19,168 16,399 2,769 15,453 69 1,182 278 105 2,081 59 U.S. government, states, and political subdivisions in United States 115 115 0 25 0 4 3 83 0 60 All other 91,499 76,747 14,751 72,480 1,948 13,356 2,822 457 437 61 Foreign governments and official institutions .... 5,845 5,528 318 5,273 140 221 20 61 130 62 Commercial banks in United States 36,533 28,298 8,235 26,367 939 7,679 1,242 149 156 63 U.S. branches and agencies of other foreign banks 26,370 20,048 6,322 18,622 423 6,307 903 78 38 64 Other commercial banks in United States 10,163 8,250 1,913 7,745 516 1,372 339 72 119 65 Banks in foreign countries 48,667 42,531 6,136 40,482 839 5,424 1,546 240 135 66 Foreign branches of U.S. banks 6,803 5,373 1,430 4,962 202 1,303 215 107 15 67 Other banks in foreign countries 41,865 37,159 4,706 35,520 637 4,121 1,332 134 121 68 Certified and officers' checks, travelers checks, and letters of credit sold for cash 453 390 63 358 30 31 14 6 15 69 Demand deposits 3,392 3,175 217 2,852 30 85 135 142 148 70 Individuals, partnerships, and corporations 1,757 1,650 107 1,436 1 48 114 69 90 71 U.S. addressees (domicile) 1,070 1,070 0 875 0 21 109 64 0 72 Non-U.S. addressees (domicile) 687 570 107 560 1 26 5 5 90 73 U.S. government, states, and political subdivisions in United States 9 9 0 5 0 0 0 4 0 74 All other 1,626 1,516 110 1,411 30 37 21 69 58 75 Foreign governments and official institutions .... 437 434 3 370 0 1 2 61 2 76 Commercial banks in United States 160 139 21 136 0 1 0 1 21 77 U.S. branches and agencies of other foreign banks 16 16 0 15 0 1 0 0 0 78 Other commercial banks in United States 144 123 21 121 0 0 0 1 21 79 Banks in foreign countries 576 553 22 547 0 3 5 1 20 80 Certified and officers' checks, travelers checks, and letters of credit sold for cash 453 390 63 358 30 31 14 6 15 81 Time deposits 127,814 110,688 17,126 101,553 1,906 14,723 3,627 3,688 2,317 82 Individuals, partnerships, and corporations 38,001 35,441 2,560 30,553 38 1,422 823 3,222 1,943 83 U.S. addressees (domicile) 19,875 19,875 0 15,888 0 307 554 3,126 0 84 Non-U.S. addressees (domicile) 18,127 15,566 2,560 14,666 38 1,115 269 96 1,943 85 U.S. government, states, and political subdivisions in United States 105 105 0 21 0 4 3 79 0 86 All other 89,727 75,142 14,585 70,979 1,868 13,317 2,801 388 374 87 Foreign governments and official institutions .... 5,369 5,077 292 4,885 119 218 18 0 128 88 Commercial banks in United States 36,356 28,156 8,201 26,226 927 7,677 1,242 148 135 89 U.S. branches and agencies of other foreign banks 26,354 20,032 6,322 18,606 423 6,306 903 78 38 90 Other commercial banks in United States 10,003 8,124 1,879 7,621 504 1,371 339 70 97 91 Banks in foreign countries 48,002 41,910 6,092 39,867 822 5,421 1,541 240 111 92 Savings deposits 737 669 67 483 0 66 75 66 46 93 Individuals, partnerships, and corporations 736 669 67 483 0 66 75 66 46 94 U.S. addressees (domicile) 445 445 0 285 0 26 72 62 0 95 Non-U.S. addressees (domicile) 292 224 67 198 0 40 4 4 46 96 U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 97 All other 0 0 0 0 0 0 0 0 0 98 Credit balances 350 193 157 191 99 35 0 1 24 99 Individuals, partnerships, and corporations 204 103 100 102 49 33 0 1 20 KM) U.S. addressees (domicile) 140 75 66 73 18 32 0 1 17 101 Non-U.S. addressees (domicile) 63 29 34 29 31 1 0 0 3 102 U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 103 All other 146 89 57 89 50 2 0 0 4 104 Foreign governments and official institutions 40 17 22 17 21 1 0 0 0 105 Commercial banks in United States 17 4 13 4 12 1 0 0 0 106 U.S. branches and agencies of other foreign banks 1 1 0 1 0 0 0 0 0 107 Other commercial banks in United States 16 3 13 3 12 1 0 0 0 108 Banks in foreign countries 90 68 22 68 17 0 0 0 4 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • April 1985 4.30 Continued All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies 109 Federal funds purchased and securities sold under agreements to repurchase 20,060 14,258 5,802 13,295 518 5,260 452 330 205 By holder 110 Commercial banks in United States 16,365 10,956 5,409 10,052 258 5,144 403 330 177 111 Others 3,694 3,301 393 3,243 260 116 48 0 28 By type 112 One-day maturity or continuing contract 19,318 13,593 5,724 12,669 446 5,255 413 330 205 113 Securities sold under agreements to repurchase .. 2,202 2,172 30 2,170 12 10 1 0 10 114 Other 17,116 11,421 5,694 10,500 434 5,245 412 330 195 115 Other securities sold under agreements to repurchase 742 664 78 626 72 6 39 0 0 116 Other liabilities for borrowed money 45,530 27,294 18,236 25,464 1,949 16,202 923 558 435 117 Owed to banks 41,455 23,780 17,675 22,001 1,883 15,667 914 555 435 118 U.S. addressees (domicile) 39,942 22,399 17,543 20,691 1,856 15,618 893 521 362 119 Non-U.S. addressees (domicile) 1,513 1,381 132 1,309 27 50 21 34 73 120 Owed to others 4,075 3,514 561 3,463 66 534 8 3 0 121 U.S. addressees (domicile) 3,685 3,230 455 3,206 6 462 8 3 0 122 Non-U.S. addressees (domicile) 390 284 106 258 60 73 0 0 0 123 All other liabilities 53,953 40,357 13,597 31,180 1,302 9,346 6,565 1,828 3,732 124 Acceptances executed and outstanding 17,742 13,791 3,952 13,305 155 3,748 214 242 79 125 Net due to related banking institutions6 32,298 23,304 8,994 14,915 1,029 5,094 6,232 1,474 3,555 126 Other 3,912 3,262 650 2,961 118 504 119 113 98 MEMO 127 Time deposits of $100,000 or more 93,536 78,687 14,849 69,787 243 14,383 33,,556644 33,,555511 2,010 128 Certificates of deposit (CDs) in denominations of $100,000 or more 32,301 30,389 1,913 25,160 10 1,328 1,270 3,202 1,331 129 Other 61,235 48,299 12,936 44,626 232 13,055 2,294 349 679 130 Savings deposits authorized for automatic transfer and NOW accounts 61 33 28 13 0 12 7 8 20 131 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 0 0 0 0 0 0 0 0 0 132 Time certificates of deposit in denominations of $100,000 or more with remaining maturity of more than 12 months 8,610 8,563 47 7,238 0 206 340 815 11 133 Acceptances refinanced with a U.S.-chartered bank .. 4,404 3,092 1,312 2,711 59 1,309 34 290 1 134 Statutory or regulatory asset pledge requirement 60,591 60,034 557 51,403 444 123 8,531 23 67 135 Statutory or regulatory asset maintenance requirement 9,361 8,939 422 5,885 0 500 405 2,152 418 136 Commercial letters of credit 7,858 5,232 2,627 4,609 141 2,333 307 223 246 137 Standby letters of credit, total 17,884 15,379 2,505 13,060 97 1,905 1,266 650 907 138 U.S. addressees (domicile) 14,729 12,541 2,188 10,542 4 1,689 1,094 595 805 139 Non-U.S. addressees (domicile) 3,155 2,837 318 2,518 93 216 173 54 101 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit) 3,098 2,964 134 2,647 0 101 166 86 97 141 Holdings of commercial paper included in total gross loans 674 395 279 332 10 260 59 0 12 142 Holdings of acceptances included in total commercial and industrial loans 5,743 4,348 1,395 4,170 70 1,375 85 40 4 143 Immediately available funds with a maturity greater than one day (included in other liabilities for borrowed money) 30,291 16,768 13,523 15,307 1,564 12,086 786 413 136 144 Gross due from related banking institutions6 94,768 75,547 19,221 68,801 1,233 16,500 2,559 3,500 2,173 145 U.S. addressees (domicile) 26,456 17,624 8,832 14,089 42 8,291 147 2,969 918 146 Branches and agencies in the United States 25,898 17,263 8,635 13,741 42 8,092 140 2,969 915 147 In the same state as reporter 2,153 1,075 1,078 1,001 2 1,033 0 4 113 148 In other states 23,745 16,189 7,557 12,739 40 7,060 140 2,965 802 149 U.S. banking subsidiaries7 557 361 197 349 0 198 8 0 3 150 Non-U.S. addressees (domicile) 68,312 57,922 10,389 54,712 1,191 8,209 2,412 532 1,255 151 Head office and non-U.S. branches and agencies. 65,675 55,548 10,127 52,376 1,177 8,1% 2,373 532 1,121 152 Non-U.S. banking companies and offices 2,637 2,375 262 2,336 15 113 39 0 135 153 Gross due to related banking institutions6 102,762 84,240 18,522 71,699 2,000 13,058 8,765 2,586 4,653 154 U.S. addressees (domicile) 26,350 18,554 7,796 11,342 215 4,518 4,540 2,040 3,694 155 Branches and agencies in the United States 25,990 18,251 7,739 11,138 215 4,487 4,455 2,030 3,665 156 In the same state as reporter 2,317 1,260 1,056 1,181 22 1,033 0 4 77 157 In other states 23,674 16,991 6,683 9,957 193 3,453 4,455 2,026 3,588 158 U.S. banking subsidiaries7 360 303 57 204 0 31 85 10 30 159 Non-U.S. addressees (domicile) 76,353 65,686 10,666 60,357 1,785 8,480 4,225 546 959 160 Head office and non-U.S. branches and agencies. 74,126 63,619 10,507 58,342 1,734 8,374 4,210 546 920 161 Non-U.S. banking companies and offices 2,227 2,067 160 2,015 51 107 15 0 39 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 4.30 Continued All states2 New York Other states2 IItteemm ffoo CC rr aa nn ll ii ii-- aa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets 252,176 196,933 55,243 175,699 6,133 45,620 11,458 6,468 6,799 163 Cash and due from depository institutions 51,275 46,451 4,824 43,538 322 4,688 1,952 419 357 164 Federal funds sold and securities purchased under agreements to resell 7,468 6,518 951 6,284 576 319 155 62 72 165 Total loans 133,826 100,151 33,675 86,102 4,264 26,658 8,531 3,346 4,925 166 Loans to banks in foreign countries 20,451 15,554 4,897 14,040 602 4,037 1,076 130 566 167 Total deposits and credit balances 127,393 109,877 17,516 100,368 1,935 15,039 3,844 3,745 2,462 168 Time CDs in denominations of $100,000 or more 31,112 29,281 1,831 24,005 16 1,334 1,267 3,260 1,230 169 Federal funds purchased and securities sold under agreements to repurchase 19,486 14,431 5,055 13,402 534 4,515 556 307 172 170 Other liabilities for borrowed money 45,382 27,008 18,374 25,317 1,983 16,226 821 539 496 171 Number of reports filed8 452 279 173 178 30 116 44 32 52 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, footnote 6). On the former monthly branch and agency report, available through "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign the G.ll statistical release, gross balances were included in total assets and total Banks." This form was first used for reporting data as of June 30, 1980. From liabilities. Therefore, total asset and total liability figures in this table are not November 1972 through May 1980, U.S. branches and agencies of foreign banks comparable to those in the G. 11 tables. had filed a monthly FR 886a report. Aggregate data from that report were 6. "Related banking institutions" includes the foreign head office and other available through the Federal Reserve statistical release G.ll, last issued on U.S. and foreign branches and agencies of the bank, the bank's parent holding July 10, 1980. Data in this table and in the G.ll tables are not strictly comparable company, and majority-owned banking subsidiaries of the bank and of its parent because of differences in reporting panels and in definitions of balance sheet holding company (including subsidiaries owned both directly and indirectly). items. Gross amounts due from and due to related banking institutions are shown as 2. Includes the District of Columbia. memo items. 3. Includes all offices that have the power to accept deposits from U.S. 7. "U.S. banking subsidiaries" refers to U.S. banking subsidiaries majorityresidents, including any such offices that are considered agencies under state law. owned by the foreign bank and by related foreign banks and includes U.S. offices 4. Agencies account for virtually all of the assets and liabilities reported in of U.S.-chartered commercial banks, of Edge Act and Agreement corporations, California. and of New York State (Article XII) investment companies. 5. Total assets and total liabilities include net balances, if any, due from or due 8. In some cases two or more offices of a foreign bank within the same to related banking institutions in the United States and in foreign countries (see metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • April 1985 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, Sept. 30, 19841 Millions of dollars All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies 1 Total assets5 259,616 204,671 54,945 183,178 5,847 45,006 12,285 5,919 7,382 2 Cash and due from depository institutions 58,079 52,957 5,121 49,965 380 4,941 1,901 521 370 3 Currency and coin (U.S. and foreign) 27 24 3 18 1 2 2 1 1 4 Balances with Federal Reserve Banks 815 761 55 684 16 40 22 40 14 5 Balances with other central banks 23 22 1 21 1 0 1 0 0 6 Demand balances with commercial banks in United States 11,,229922 11,,110044 188 1,025 60 106 37 21 43 7 All other balances with depository institutions in United States and with banks in foreign countries 5555,,664499 5500,,779977 44,,885522 47,976 301 44,,777722 11,,883344 456 310 8 Time and savings balances with commercial banks in United States 28,870 25,959 2,911 24,251 231 22,,881199 11,,007777 289 202 9 Balances with other depository institutions in United States 92 72 20 70 0 4 0 0 17 10 Balances with banks in foreign countries 26,687 24,766 1,921 23,654 70 1,949 757 167 91 11 Foreign branches of U.S. banks 1,656 1,601 56 1,544 26 21 56 0 8 12 Other banks in foreign countries 25,031 23,166 1,865 22,109 43 1,928 700 167 83 13 Cash items in process of collection 273 251 22 241 2 21 5 3 1 14 Total securities, loans, and lease financing receivables 142,423 108,498 33,925 93,877 4,383 26,389 8,976 3,351 5,447 15 Total securities, book value 10,761 9,665 1,096 9,112 81 996 387 26 159 16 U.S. Treasury 4,888 4,703 186 4,442 56 56 216 18 100 17 Obligations of other U.S. government agencies and corporations 684 663 21 657 0 19 1 2 5 18 Obligations of states and political subdivisions in United States 131 121 10 107 0 1 13 1 9 19 Other bonds, notes, debentures, and corporate stock .. 5,058 4,178 880 3,907 25 921 156 5 45 20 Federal funds sold and securities purchased under agreements to resell 9,103 7,673 1,430 7,079 778 601 499 75 72 By holder 21 Commercial banks in United States 7,924 6,886 1,038 6,301 443 544 489 75 72 22 Others 1,179 787 391 777 335 56 10 0 0 By type 23 One-day maturity or continuing contract 8,955 7,527 1,428 6,933 778 599 499 75 72 24 Securities purchased under agreements to resell 213 177 36 175 22 2 0 0 14 25 Other 8,742 7,350 1,392 6,758 756 597 499 75 58 26 Other securities purchased under agreements to resell 147 146 1 146 0 1 0 0 0 27 Total loans, gross 132,039 99,156 32,883 85,073 4,305 25,445 88,,559977 3,328 5,291 28 LESS: Unearned income on loans 377 323 55 309 3 52 88 3 3 29 EQUALS: Loans, net 131,662 98,834 32,828 84,764 4,302 25,393 8,589 3,325 5,289 Total loans, gross, by category 30 Real estate loans 4,815 2,132 2,684 1,355 22 1,948 254 240 997 31 Loans to financial institutions 48,840 38,210 10,630 34,220 752 9,688 2,998 504 678 32 Commercial banks in United States 26,137 20,316 5,821 18,051 171 5,918 1,664 245 88 33 U.S. branches and agencies of other foreign banks .. 22,620 17,054 5,566 15,246 148 5,683 1,287 198 58 34 Other commercial banks 3,517 3,262 255 2,806 23 235 377 46 30 35 Banks in foreign countries 20,098 15,518 4,580 14,223 535 3,574 937 258 570 36 Foreign branches of U.S. banks 788 569 219 525 0 239 17 6 0 37 Other 19,310 14,949 4,361 13,698 535 3,335 919 252 570 38 Other financial institutions 2,605 2,376 229 1,945 47 196 397 1 19 39 Loans for purchasing or carrying securities 1,162 1,098 65 1,023 5 135 0 0 0 40 Commercial and industrial loans 60,446 45,293 15,153 36,940 1,778 11,736 4,752 2,393 2,847 41 U.S. addressees (domicile) 37,336 27,102 10,235 20,186 220 8,743 4,188 1,694 2,307 42 Non-U.S. addressees (domicile) 23,110 18,191 4,918 16,755 1,558 22,,999944 564 699 540 43 Loans to individuals for household, family, and other personal expenditures 273 241 33 194 4 28 8 28 11 44 All other loans 16,503 12,184 4,319 11,343 1,745 11,,991111 585 162 758 45 Loans to foreign governments and official institutions 15,709 11,526 4,182 10,771 1,727 1,817 555 118 721 46 Other 795 658 137 571 18 94 30 44 37 47 Lease financing receivables 0 0 0 0 0 0 0 0 0 48 All other assets 50,012 35,543 14,469 32,257 307 13,075 909 1,972 1,492 49 Customers' liability on acceptances outstanding.... 18,919 14,223 4,697 13,758 47 4,601 215 216 82 50 U.S. addressees (domicile) 11,951 7,795 4,157 7,547 8 4,168 179 37 12 51 Non-U.S. addressees (domicile) 6,968 6,428 540 6,211 39 433 36 178 70 52 Net due from related banking institutions6 23,523 15,220 8,303 12,997 69 7,322 373 1,611 1,152 53 Other 7,569 6,100 1,469 5,503 190 1,152 321 145 258 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 4.30 Continued All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies 54 Total liabilities' 259,616 204,671 54,945 183,178 5,847 45,006 12,285 5,919 7,382 55 Total deposits and credit balances 138,452 120,771 17,682 111,732 1,801 15,155 4,147 3,014 2,602 56 Individuals, partnerships, and corporations 40,123 37,150 2,972 32,435 86 1,552 1,318 2,499 2,234 57 U.S. addressees (domicile) 20,636 20,557 79 16,735 10 402 1,072 2,399 18 58 Non-U.S. addressees (domicile) 19,486 16,593 2,894 15,700 76 1,150 245 100 2,215 59 U.S. government, states, and political subdivisions in United States 86 86 0 27 0 4 20 36 0 60 All other 98,244 83,534 14,709 79,270 1,715 13,600 2,810 480 368 61 Foreign governments and official institutions .... 5,742 5,446 297 5,246 164 206 25 31 70 62 Commercial banks in United States 39,312 31,152 88,,115599 28,895 867 7,729 1,416 298 107 63 U.S. branches and agencies of other foreign banks 28,199 21,838 6,361 20,141 380 6,370 1,035 230 43 64 Other commercial banks in United States 11,112 9,315 1,798 8,754 487 1,359 381 68 64 65 Banks in foreign countries 52,776 46,572 6,204 44,796 666 5,635 1,357 146 176 66 Foreign branches of U.S. banks 6,585 5,272 1,312 4,944 157 1,212 219 40 12 67 Other banks in foreign countries 46,191 41,299 44,,889922 39,852 508 4,423 1,138 106 164 68 Certified and officers' checks, travelers checks, and letters of credit sold for cash 414 365 49 334 19 30 11 4 16 69 Demand deposits 3,212 3,005 208 2,715 22 83 129 109 154 70 Individuals, partnerships, and corporations 1,785 1,660 125 1,444 3 47 113 71 108 71 U.S. addressees (domicile) 1,112 1,112 0 917 0 23 110 61 0 72 Non-U.S. addressees (domicile) 674 548 125 527 3 24 3 10 108 73 U.S. government, states, and political subdivisions in United States 4 4 0 4 0 0 1 0 0 74 All other 1,423 1,340 82 1,268 19 36 16 38 46 75 Foreign governments and official institutions .... 288 286 2 253 0 2 2 31 1 76 Commercial banks in United States 123 119 4 115 0 1 1 2 3 77 U.S. branches and agencies of other foreign banks 26 25 0 25 0 0 0 0 0 78 Other commercial banks in United States 97 94 3 90 0 1 1 2 3 79 Banks in foreign countries 598 571 27 567 0 3 2 0 26 80 Certified and officers' checks, travelers checks, and letters of credit sold for cash 414 365 49 334 19 30 11 4 16 81 Time deposits 133,987 116,792 17,195 108,228 1,651 14,947 3,947 2,835 2,378 82 Individuals, partnerships, and corporations 37,347 34,693 2,655 30,379 36 1,384 1,134 2,357 2,057 83 U.S. addressees (domicile) 18,941 18,941 0 15,475 0 301 895 2,271 0 84 Non-U.S. addressees (domicile) 18,406 15,751 2,655 14,904 36 1,083 240 86 22,,005577 85 U.S. government, states, and political subdivisions in United States 82 82 0 23 0 4 19 36 0 86 All other 96,558 82,018 14,540 77,826 1,615 13,559 2,794 442 321 87 Foreign governments and official institutions 5,354 5,108 245 4,942 116 203 23 0 69 88 Commercial banks in United States 39,110 30,973 88,,113377 28,720 851 7,726 1,415 296 103 89 U.S. branches and agencies of other foreign banks 28,119 21,758 6,361 20,062 380 6,370 1,035 230 43 90 Other commercial banks in United States 10,991 9,215 1,776 8,658 471 1,356 380 66 60 91 Banks in foreign countries 52,093 45,936 6,157 44,165 648 5,630 1,356 146 150 92 Savings deposits 765 691 73 507 0 67 71 70 49 93 Individuals, partnerships, and corporations 764 691 73 507 0 67 71 70 49 94 U.S. addressees (domicile) 454 454 0 294 0 27 67 66 0 95 Non-U.S. addressees (domicile) 311 238 73 214 0 41 3 4 49 % U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 97 All other 0 0 0 0 0 0 0 0 0 98 Credit balances 489 283 206 281 127 58 0 1 21 99 Individuals, partnerships, and corporations 225 107 119 105 47 53 0 1 20 100 U.S. addressees (domicile) 130 51 79 50 10 51 0 1 18 101 Non-U.S. addressees (domicile) 96 56 40 56 37 2 0 0 2 102 U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 103 All other 263 176 87 176 81 5 0 0 1 104 Foreign governments and official institutions 100 52 49 52 47 1 0 0 0 105 Commercial banks in United States 78 60 18 60 16 2 0 0 1 106 U.S. branches and agencies of other foreign banks 54 54 0 54 0 0 0 0 0 107 Other commercial banks in United States 24 6 18 6 16 2 0 0 1 108 Banks in foreign countries 85 65 20 65 18 2 0 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • April 1985 4.30 Continued AAllll ssttaatteess22 New York Other states2 CCaallii-- Illinois Total Branches3 Agencies Branches3 Agencies f t o o r t n a i l a 4 , branches Branches Agencies 109 Federal funds purchased and securities sold under agreements to repurchase 22,821 16,962 5,859 16,044 561 5,309 531 227 150 By holder 110 Commercial banks in United States 18,964 13,604 5,360 12,785 238 5,150 438 227 126 111 Others 3,857 3,359 498 3,258 322 159 93 0 24 By type 112 One-day maturity or continuing contract 21,664 15,923 5,741 15,039 465 5,287 496 227 150 113 Securities sold under agreements to repurchase .. 2,093 2,062 31 2,042 12 9 20 0 10 114 Other 19,571 13,861 5,710 12,997 453 5,279 476 227 140 115 Other securities sold under agreements to repurchase 1,158 1,040 118 1,005 96 22 35 0 0 116 Other liabilities for borrowed money 40,311 23,730 16,581 21,697 1,940 14,343 1,009 635 686 117 Owed to banks 38,453 22,083 16,370 20,117 1,881 14,150 993 626 686 118 U.S. addressees (domicile) 37,118 20,908 16,210 19,018 1,845 14,125 973 592 565 119 Non-U.S. addressees (domicile) 1,335 1,175 160 1,098 37 25 20 34 121 120 Owed to others 1,857 1,647 211 1,581 59 193 16 9 0 121 U.S. addressees (domicile) 1,671 1,551 120 1,496 8 142 16 9 0 122 Non-U.S. addressees (domicile) 187 96 91 85 51 51 0 0 0 123 All other liabilities 58,032 43,209 14,823 33,704 1,545 10,199 6,597 2,043 3,943 124 Acceptances executed and outstanding 20,934 15,951 4,983 15,446 62 4,869 230 242 85 125 Net due to related banking institutions6 32,068 22,902 9,166 14,263 1,364 4,802 6,202 1,685 3,753 126 Other 5,029 4,356 674 3,995 120 528 166 116 105 MEMO 127 Time deposits of $100,000 or more 98,637 83,624 15,012 75,319 43 14,564 3,889 2,738 2,084 128 Certificates of deposit (CDs) in denominations of $100,000 or more 31,544 29,607 1,938 24,786 0 1,285 1,621 2,465 1,388 129 Other 67,092 54,018 13,075 50,533 43 13,279 2,268 273 696 130 Savings deposits authorized for automatic transfer and NOW accounts 59 33 26 14 0 12 7 8 18 131 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 0 0 0 0 0 0 0 0 0 132 Time certificates of deposit in denominations of $100,000 or more with remaining maturity of more than 12 months 10,000 9,956 44 8,173 0 213 403 1,199 12 133 Acceptances refinanced with a U.S.-chartered bank .. 3,951 2,529 1,422 2,183 105 1,381 8 275 0 134 Statutory or regulatory asset pledge requirement 59,676 58,823 853 49,682 736 135 9,034 18 71 135 Statutory or regulatory asset maintenance requirement 9,322 8,920 403 5,469 0 482 439 2,532 400 136 Commercial letters of credit 7,869 5,329 2,539 4,800 150 2,311 218 201 188 137 Standby letters of credit, total 20,546 17,616 2,930 14,934 124 2,262 1,615 625 986 138 U.S. addressees (domicile) 17,264 14,661 2,603 12,310 9 2,083 1,386 578 898 139 Non-U.S. addressees (domicile) 3,282 2,955 327 2,624 115 179 229 47 88 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit) 3,224 3,003 222 2,627 0 195 182 126 94 141 Holdings of commercial paper included in total gross loans 662 393 268 345 4 251 45 0 17 142 Holdings of acceptances included in total commercial and industrial loans 4,354 3,129 1,225 2,991 61 1,205 81 11 5 143 Immediately available funds with a maturity greater than one day (included in other liabilities for borrowed money) 29,612 17,413 12,200 15,806 1,608 10,576 869 467 286 144 Gross due from related banking institutions6 102,563 84,053 18,510 77,368 850 16,431 3,021 2,912 1,981 145 U.S. addressees (domicile) 26,183 18,253 7,930 14,977 37 7,518 544 2,351 756 146 Branches and agencies in the United States 25,584 17,835 7,748 14,587 37 7,334 523 2,348 754 147 In the same state as reporter 1,871 1,002 869 954 2 841 0 2 72 148 In other states 23,712 16,833 6,879 13,633 35 6,493 523 2,345 683 149 U.S. banking subsidiaries7 599 418 181 390 0 184 21 3 1 150 Non-U.S. addressees (domicile) 76,380 65,800 10,581 62,391 813 8,913 2,477 561 1,225 151 Head office and non-U.S. branches and agencies. 74,196 63,925 10,272 60,557 787 8,756 2,448 550 1,097 152 Non-U.S. banking companies and offices 2,184 1,875 309 1,833 26 157 29 11 129 153 Gross due to related banking institutions6 111,108 91,735 19,373 78,635 2,145 13,911 8,850 2,986 4,582 154 U.S. addressees (domicile) 32,861 25,597 7,264 18,519 69 4,276 4,192 2,202 3,603 155 Branches and agencies in the United States 32,484 25,332 7,151 18,361 69 4,225 4,105 2,185 3,540 156 In the same state as reporter 2,001 1,108 894 1,056 11 859 1 3 72 157 In other states 30,482 24,225 6,258 17,305 58 3,366 4,104 2,182 3,468 158 U.S. banking subsidiaries7 377 265 112 158 0 52 87 17 63 159 Non-U.S. addressees (domicile) 78,248 66,138 12,110 60,116 2,076 9,635 4,657 785 979 160 Head office and non-U.S. branches and agencies. 75,856 63,900 11,956 57,903 2,039 9,524 4,648 785 957 161 Non-U.S. banking companies and offices 2,391 2,238 2,213 36 110 10 0 22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 4.30 Continued All states2 New York Other states2 IItteemm Total Branches3 Agencies Branches3 Agencies ff tt oo CC oo rr aa tt nn aa ll ii ii ll -- aa 44 ,, bb II rr ll aa llii nn nn cc oo hh iiss ee ,, ss Branches Agencies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets 256,406 201,929 54,477 181,204 5,750 44,694 11,527 5,857 7,374 163 Cash and due from depository institutions 55,568 50,670 4,898 47,913 346 4,695 1,884 376 354 164 Federal funds sold and securities purchased under agreements to resell 7,701 6,655 1,046 6,318 607 392 250 63 73 165 Total loans 127,825 95,700 32,125 81,840 4,032 25,004 8,331 3,336 5,282 166 Loans to banks in foreign countries 20,363 15,714 4,649 14,364 522 3,875 804 251 546 167 Total deposits and credit balances 133,024 115,916 17,108 107,099 1,757 14,684 4,031 2,955 2,498 168 Time CDs in denominations of $100,000 or more 30,710 28,872 1,838 24,368 0 1,293 1,280 2,490 1,279 169 Federal funds purchased and securities sold under agreements to repurchase 21,252 15,953 5,299 15,004 528 4,839 474 270 138 170 Other liabilities for borrowed money 40,515 23,841 16,674 21,879 1,825 14,649 936 621 605 171 Number of reports filed8 462 291 171 185 28 120 45 32 52 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, footnote 6). On the former monthly branch and agency report, available through "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign the G.ll statistical release, gross balances were included in total assets and total Banks." This form was first used for reporting data as of June 30, 1980. From liabilities. Therefore, total asset and total liability figures in this table are not November 1972 through May 1980, U.S. branches and agencies of foreign banks comparable to those in the G.ll tables. had filed a monthly FR 886a report. Aggregate data from that report were 6. "Related banking institutions" includes the foreign head office and other available through the Federal Reserve statistical release G.ll, last issued on U.S. and foreign branches and agencies of the bank, the bank's parent holding July 10, 1980. Data in this table and in the G.ll tables are not strictly comparable company, and majority-owned banking subsidiaries of the bank and of its parent because of differences in reporting panels and in definitions of balance sheet holding company (including subsidiaries owned both directly and indirectly). items. Gross amounts due from and due to related banking institutions are shown as 2. Includes the District of Columbia. memo items. 3. Includes all offices that have the power to accept deposits from U.S. 7. "U.S. banking subsidiaries" refers to U.S. banking subsidiaries majorityresidents, including any such offices that are considered agencies under state law. owned by the foreign bank and by related foreign banks and includes U.S. offices 4. Agencies account for virtually all of the assets and liabilities reported in of U.S.-chartered commercial banks, of Edge Act and Agreement corporations, California. and of New York State (Article XII) investment companies. 5. Total assets and total liabilities include net balances, if any, due from or due 8. In some cases two or more offices of a foreign bank within the same to related banking institutions in the United States and in foreign countries (see metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 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 ANTHONY F. COLE, Special Assistant to the Board STANLEY J. SIGEL, Assistant to the Board ANNETTE FRIBOURG, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board NAOMI P. SALUS, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director MICHAEL BRADFIELD, General Counsel EDWARD C. ETTIN, Deputy Director J. VIRGIL MATTINGLY, JR., Associate General Counsel MICHAEL J. PRELL, Deputy Director RICHARD M. ASHTON, Assistant General Counsel JOSEPH S. ZEISEL, Deputy Director MARYELLEN A. BROWN, Assistant to the General Counsel JARED J. ENZLER, Associate Director DAVID E. LINDSEY, Associate Director ELEANOR J. STOCKWELL, Associate Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Deputy Associate Director LAWRENCE SLIFMAN, Deputy Associate Director WILLIAM W. WILES, Secretary HELMUT F. WENDEL, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary MARTHA BETHEA, Assistant Director JAMES MCAFEE, Associate Secretary ROBERT M. FISHER, Assistant Director DAVID B. HUMPHREY, Assistant Director SUSAN J. LEPPER, Assistant Director DIVISION OF CONSUMER RICHARD D. PORTER, Assistant Director AND COMMUNITY AFFAIRS PETER A. TINSLEY, Assistant Director LEVON H. GARABEDIAN, Assistant Director GRIFFITH L. GARWOOD, Director (Administration) JERAULD C. KLUCKMAN, Associate Director GLENN E. LONEY, Assistant Director DOLORES S. SMITH, Assistant Director DIVISION OF INTERNATIONAL FINANCE EDWIN M. TRUMAN, Director DIVISION OF BANKING LARRY J. PROMISEL, Senior Associate Director SUPERVISION AND REGULATION CHARLES J. SIEGMAN, Senior Associate Director DALE W. HENDERSON, Associate Director WILLIAM TAYLOR, Director ROBERT F. GEMMILL, Staff Adviser THOMAS E. CIMENO, JR., Deputy Director' PETER HOOPER III, Assistant Director FREDERICK R. DAHL, Associate Director DAVID H. HOWARD, Assistant Director DON E. KLINE, Associate Director RALPH W. SMITH, JR., Assistant Director FREDERICK M. STRUBLE, Associate Director HERBERT A. BIERN, Assistant Director ANTHONY CORNYN, 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 1. On loan from the Federal Reserve Bank of Boston. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 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., Adviser, Equal Employment WILLIAM R. JONES, Assistant Staff Director for Program Opportunity Programs, Federal Reserve System Improvement Project STEPHEN R. MALPHRUS, Assistant Staff Director for Office Automation and Technology DIVISION OF FEDERAL RESERVE PORTIA W. THOMPSON, Equal Employment Opportunity BANK OPERATIONS Programs Officer CLYDE H. FARNSWORTH, JR., Director ELLIOTT C. MCENTEE, Associate Director DIVISION OF DATA PROCESSING DAVID L. ROBINSON, Associate Director C. WILLIAM SCHLEICHER, JR., Associate Director CHARLES L. HAMPTON, Director WALTER ALTHAUSEN, Assistant Director BRUCE M. BEARDSLEY, Deputy Director CHARLES W. BENNETT, Assistant Director GLENN L. CUMMINS, Assistant Director ANNE M. DEBEER, Assistant Director RICHARD J. MANASSERI, Assistant Director JACK DENNIS, JR., Assistant Director ELIZABETH B. RIGGS, Assistant Director EARL G. HAMILTON, Assistant Director WILLIAM C. SCHNEIDER, JR., Assistant Director WILLIAM E. PASCOE III, Assistant Director2 ROBERT J. ZEMEL, 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 2. On loan from the Federal Reserve Bank of Richmond (Baltimore Branch). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • April 1985 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman E. GERALD CORRIGAN, Vice Chairman JOHN J. BALLES LYLE E. GRAMLEY J. CHARLES PARTEE ROBERT P. BLACK SILAS KEEHN EMMETT J. RICE ROBERT P. FORRESTAL 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 ROBERT L. NEWELL, First District BARRY F. SULLIVAN, Seventh District LEWIS T. PRESTON, Second District WILLIAM H. BOWEN, Eighth District GEORGE A. BUTLER, Third District E. PETER GILLETTE, JR., Ninth District JULIEN L. MCCALL, Fourth District N. BERNE HART, Tenth District JOHN G. MEDLIN, JR., Fifth District NAT S. ROGERS, Eleventh District PHILIP F. SEARLE, Sixth District G. ROBERT TRUEX, JR., Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

and Advisory Councils CONSUMER ADVISORY COUNCIL TIMOTHY D. MARRINAN, Minneapolis, Minnesota, Chairman THOMAS L. CLARK, JR., New York, New York, Vice Chairman RACHEL G. BRATT, Medford, Massachusetts LAWRENCE S. OKINAGA, Honolulu, Hawaii JONATHAN BROWN, Washington, D.C. JOSEPH L. PERKOWSKI, Centerville, Minnesota JEAN A. CROCKETT, Philadelphia, Pennsylvania ELVA QUIJANO, San Antonio, Texas THERESA FAITH CUMMINGS, Springfield, Illinois BRENDA L. SCHNEIDER, Detroit, Michigan STEVEN M. GEARY, Jefferson City, Missouri PAULA A. SLIMAK, Cleveland, Ohio RICHARD M. HALLIBURTON, Kansas City, Missouri GLENDA G. SLOANE, Washington, D.C. CHARLES C. HOLT, Austin, Texas HENRY J. SOMMER, Philadelphia, Pennsylvania EDWARD N. LANGE, Seattle, Washington TED L. SPURLOCK, New York, New York KENNETH V. LARKIN, Berkeley, California MEL STILLER, Boston, Massachusetts FRED S. MCCHESNEY, Atlanta, Georgia CHRISTOPHER J. SUMNER, Salt Lake City, Utah FREDERICK H. MILLER, Norman, Oklahoma WINNIE F. TAYLOR, San Francisco, California MARGARET M. MURPHY, Columbia, Maryland MICHAEL M. VAN BUSKIRK, Columbus, Ohio ROBERT F. MURPHY, Detroit, Michigan MERVIN WINSTON, Minneapolis, Minnesota HELEN NELSON, Mill Valley, California MICHAEL ZOROYA, St. Louis, Missouri THRIFT INSTITUTIONS ADVISORY COUNCIL THOMAS R. BOMAR, Miami, Florida, President RICHARD H. DEIHL, Los Angeles, California, Vice President ELLIOTT G. CARR, Harwich Port, Massachusetts JOHN A. HARDIN, Rock Hill, South Carolina M. TODD COOKE, Philadelphia, Pennsylvania FRANCES LESNIESKI, East Lansing, Michigan J. MICHAEL CORNWALL, Dallas, Texas JOHN T. MORGAN, New York, New York HAROLD W. GREENWOOD, JR., Minneapolis, Minnesota SARAH R. WALLACE, Newark, Ohio MICHAEL R. WISE, Denver, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, THE FEDERAL RESERVE ACT, as amended through April 20, Mail Stop 138, Board of Governors of the Federal Reserve 1983, with an appendix containing provisions of certain System, Washington, D.C. 20551. When a charge is indicat- other statutes affecting the Federal Reserve System. 576 ed, remittance should accompany request and be made pp. $7.00. payable to the order of the Board of Governors of the Federal REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- Reserve System. Remittance from foreign residents should ERAL RESERVE SYSTEM. be drawn on a U.S. bank. Stamps and coupons are not JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOVaccepted. ERNMENT SECURITIES MARKET; STAFF STUDIES—PART 1,1970. 86 pp. $.50 each; 10 or more to one address, $.40 each. PART 2, 1971. Out of print. PART 3, 1973. 131 pp. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- $1.00; 10 or more to one address, $.85 each. TIONS. 1984. 120 pp. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- ANNUAL REPORT. NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Each FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or volume, $3.00; 10 or more to one address, $2.50 each. $2.00 each in the United States, its possessions, Canada, THE ECONOMETRICS OF PRICE DETERMINATION CONFERand Mexico; 10 or more of same issue to one address, ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 $18.00 per year or $1.75 each. Elsewhere, $24.00 per pp. Cloth ed. $5.00 each; 10 or more to one address, year or $2.50 each. $4.50 each. Paper ed. $4.00 each; 10 or more to one BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint address, $3.60 each. of Part I only) 1976. 682 pp. $5.00. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE BANKING AND MONETARY STATISTICS. 1941-1970. 1976. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 1,168 pp. $15.00. pp. $4.00 each; 10 or more to one address, $3.60 each. ANNUAL STATISTICAL DIGEST ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— 1974-78. 1980. 305 pp. $10.00 per copy. Regulation Z) Vol. I (Regular Transactions). 1969. 100 1980. 1981. 241 pp. $10.00 per copy. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each 1981. 1982. 239 pp. $ 6.50 per copy. volume $2.25; 10 or more of same volume to one 1982. 1983. 266 pp. $ 7.50 per copy. address, $2.00 each. 1983. 1984. 264 pp. $11.50 per copy. FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY FEDERAL RESERVE CHART BOOK. Issued four times a year in UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one February, May, August, and November. Subscription address, $1.50 each. includes one issue of Historical Chart Book. $7.00 per THE BANK HOLDING COMPANY MOVEMENT TO 1978: A year or $2.00 each in the United States, its possessions, COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to Canada, and Mexico. Elsewhere, $10.00 per year or one address, $2.25 each. $3.00 each. FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- each; 10 or more to one address, $1.50 each. tion to the Federal Reserve Chart Book includes one INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; issue. $1.25 each in the United States, its possessions, 10 or more to one address, $1.25 each. Canada, and Mexico; 10 or more to one address, $1.00 PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. each. Elsewhere, $1.50 each. $13.50 each. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- NEW MONETARY CONTROL PROCEDURES: FEDERAL RE- RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in SERVE STAFF STUDY. 1981. the United States, its possessions, Canada, and Mexico; SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: 10 or more of same issue to one address, $13.50 per year REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL or $.35 each. Elsewhere, $20.00 per year or $.50 each. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- STAFF STUDIESSummaries Only Printed in the ed at least monthly. (Requests must be prepaid.) Bulletin Consumer and Community Affairs Handbook. $60.00 per Studies and papers on economic and financial subjects that year. are of general interest. Requests to obtain single copies of Monetary Policy and Reserve Requirements Handbook. the full text or to be added to the mailing list for the series $60.00 per year. may be sent to Publications Services. Securities Credit Transactions Handbook. $60.00 per year. Federal Reserve Regulatory Service. 3 vols. (Contains all three Handbooks plus substantial additional material.) Staff Studies numbers 115-125 are out of print. $175.00 per year. Rates for subscribers outside the United States are as follows and include additional air mail costs: 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- Federal Reserve Regulatory Service, $225.00 per year. DENCE ON COMPETITION AND PERFORMANCE IN Each Handbook, $75.00 per year. BANKING MARKETS, by Timothy J. Curry and John T. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A Rose. Jan. 1982. 9 pp. MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- WELCOME TO THE FEDERAL RESERVE. KET INTERVENTION, by Donald B. Adams and Dale PROCESSING BANK HOLDING COMPANY AND MERGER APPLI- W. Henderson. August 1983. 5 pp. CATIONS. 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- CREDIT CARDS IN THE U.S. ECONOMY: THEIR IMPACT ON VENTION: JANUARY-MARCH 1975, by Margaret L. COSTS, PRICES, AND RETAIL SALES, July 1983. 114 pp. Greene. August 1984. 16 pp. THE MONETARY AUTHORITY OF THE FEDERAL RESERVE, 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- May 1984. (High School Level.) VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. garet L. Greene. October 1984. 40 pp. 93 pp. $2.50 each. 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret L. Greene. August 1984. 36 pp. 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- CONSUMER EDUCATION PAMPHLETS BLES: A REVIEW OF THE LITERATURE, by Victoria S. Short pamphlets suitable for classroom use. Multiple copies Farrell with Dean A. DeRosa and T. Ashby McCown. available without charge. January 1984. 21 pp. 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- DEUTSCHE MARK INTERVENTION, by Laurence R. Alice in Debitland Jacobson. October 1983. 8 pp. Consumer Handbook to Credit Protection Laws 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- Consumer Handbook on Adjustable Rate Mortgages TWEEN EXCHANGE RATES AND INTERVENTION: A The Equal Credit Opportunity Act and . . . Age REVIEW OF THE TECHNIQUES AND LITERATURE, by The Equal Credit Opportunity Act and . . . Credit Rights in Kenneth Rogoff. October 1983. 15 pp. Housing 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- The Equal Credit Opportunity Act and . . . Doctors, Law- VENTION, AND INTEREST RATES: AN EMPIRICAL INyers, Small Retailers, and Others Who May Provide Inci- VESTIGATION, by Bonnie E. Loopesko. November dental Credit 1983. 20 pp. The Equal Credit Opportunity Act and . . . Women 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Fair Credit Billing INTERVENTION: A REVIEW OF THE LITERATURE, by Federal Reserve Glossary Ralph W. Tryon. October 1983. 14 pp. Guide to Federal Reserve Regulations *135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET How to File A Consumer Credit Complaint INTERVENTION: APPLICATIONS TO CANADA, GERMA- If You Borrow To Buy Stock NY, AND JAPAN, by Deborah J. Danker, Richard A. If You Use A Credit Card Haas, Dale W. Henderson, Steven A. Symansky, and Instructional Materials of the Federal Reserve System Ralph W. Tryon. Series on the Structure of the Federal Reserve System 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- The Board of Governors of the Federal Reserve System MY, by Darrell Cohen and Peter B. Clark. January The Federal Open Market Committee 1984. 16 pp. Federal Reserve Bank Board of Directors 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Federal Reserve Banks FINANCIAL DEREGULATION, INTERSTATE BANKING, Monetary Control Act of 1980 AND FINANCIAL SUPERMARKETS, by Stephen A. Organization and Advisory Committees Rhoades. February 1984. 8 pp. Truth in Leasing U.S. Currency The availability of this study will be announced in a forth- What Truth in Lending Means to You coming BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- REPRINTS OF BULLETIN ARTICLES LINES, AND THE LIMITS OF CONCENTRATION IN LO- Most of the articles reprinted do not exceed 12 pages. CAL BANKING MARKETS, by James Burke. June 1984. 14 pp. 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN The Commercial Paper Market since the Mid-Seventies. 6/82. THE UNITED STATES, by Thomas D. Simpson and Applying the Theory of Probable Future Competition. 9/82. Patrick M. Parkinson. August 1984. 20 pp. International Banking Facilities. 10/82. 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF Foreign Experience with Targets for Money Growth. 10/83. THE LITERATURE, by John D. Wolken. November Intervention in Foreign Exchange Markets: A Summary of 1984. 38 pp. Ten Staff Studies. 11/83. 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAY- A Financial Perspective on Agriculture. 1/84. MENT COSTS, by William Dudley. November 1984. U.S. International Transactions in 1983. 4/84. 15 pp. Survey of Consumer Finances, 1983. 9/84. 142. MERGERS AND ACQUISITIONS BY COMMERCIAL Bank Lending to Developing Countries. 10/84. BANKS, 1960-83, by Stephen A. Rhoades. December Survey of Consumer Finances, 1983: A Second Report. 1984. 30 pp. 12/84. Union Settlements and Aggregate Wage Behavior in the 1980s. 12/84. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 Index to Statistical Tables References are to pages A3 through A77 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21, 70-77 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at Reserve Banks and at foreign central banks (See Interest rates) BANKERS acceptances, 9, 23, 24 Discounts and advances by Reserve Banks (See Loans) Bankers balances, 18-20 (See also Foreigners) Dividends, corporate, 35 Bonds (See also U.S. government securities) New issues, 34 Rates 24 EMPLOYMENT, 45 Branch banks, 21, 55, 70-77 Eurodollars, 24 Business activity, nonfinancial, 44 Business expenditures on new plant and equipment, 36 FARM mortgage loans, 39 Business loans (See Commercial and industrial loans) Federal agency obligations, 4, 9, 10, 11, 31, 32 Federal credit agencies, 33 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation, and types and Banks, by classes, 18 ownership of gross debt, 30 Federal Reserve Banks, 10 Receipts and outlays, 28, 29 Central banks, discount rates, 67 Treasury financing of surplus, or deficit, 28 Certificates of deposit, 24 Treasury operating balance, 28 Commercial and industrial loans Federal Financing Bank, 28, 33 Commercial banks, 16, 19 Federal funds, 5, 17, 19, 20, 21, 24, 28 Weekly reporting banks, 19-21 Federal Home Loan Banks, 33 Commercial banks Federal Home Loan Mortgage Corporation, 33, 38, 39 Assets and liabilities, 18-20 Federal Housing Administration, 33, 38, 39 Commercial and industrial loans, 16, 19, 21 Federal Land Banks, 38 Consumer loans held, by type, and terms, 40, 41 Federal National Mortgage Association, 33, 38, 39 Loans sold outright, 19 Federal Reserve Banks Nondeposit funds, 17 Condition statement, 10 Number, by classes, 18 Discount rates (See Interest rates) Real estate mortgages held, by holder and U.S. government securities held, 4, 10, 11, 30 property, 39 Federal Reserve credit, 4, 5, 10, 11 Time and savings deposits, 3 Federal Reserve notes, 10 Commercial paper, 23, 24, 37 Federally sponsored credit agencies, 33 Condition statements (See Assets and liabilities) Finance companies Construction, 44, 49 Assets and liabilities, 37 Consumer installment credit, 40, 41 Business credit, 36 Consumer prices, 44, 50 Loans, 19, 40, 41 Consumption expenditures, 51, 52 Paper, 23, 24 Corporations Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 65 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 40 (See also Thrift institutions) Flow of funds, 42, 43 Currency and coin, 18 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 21, 70-77 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 DEBITS to deposit accounts, 15 Foreign exchange rates, 68 Debt (See specific types of debt or securities) Foreign trade, 54 Demand deposits Foreigners Adjusted, commercial banks, 15 Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18-21 Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 GOLD REAL estate loans Certificate account, 10 Banks, by classes, 16, 19, 20, 39 Stock, 4, 54 Financial institutions, 26 Government National Mortgage Association, 33, 38, 39 Terms, yields, and activity, 38 Gross national product, 51 Type of holder and property mortgaged, 39 Repurchase agreements, 5, 17, 19, 20, 21 Reserve requirements, 7 HOUSING, new and existing units, 49 Reserves Commercial banks, 18 Depository institutions, 3, 4, 5, 12 INCOME, personal and national, 44, 51, 52 Federal Reserve Banks, 10 Industrial production, 44, 47 U.S. reserve assets, 54 Installment loans, 40, 41 Residential mortgage loans, 38 Insurance companies, 26, 30, 39 Retail credit and retail sales, 40, 41, 44 Interest rates Bonds, 24 SAVING Federal Reserve Banks, 6 Flow of funds, 42, 43 Foreign central banks and foreign countries, 67 National income accounts, 51 Money and capital markets, 24 Savings and loan associations, 8, 26, 39, 40, 42 (See also Mortgages, 38 Thrift institutions) Prime rate, commercial banks, 23 Savings deposits (See Time and savings deposits) Time and savings deposits, 8 Securities (See specific types) International capital transactions of United States, 53-67 Federal and federally sponsored credit agencies, 33 International organizations, 57, 58, 60, 63, 64 Foreign transactions, 65 Inventories, 51 New issues, 34 Investment companies, issues and assets, 35 Prices, 25 Investments (See also specific types) Special drawing rights, 4, 10, 53, 54 Banks, by classes, 18, 19, 20, 21, 26 State and local governments Commercial banks, 3, 16, 18-20, 39 Deposits, 19, 20 Federal Reserve Banks, 10, 11 Holdings of U.S. government securities, 30 Financial institutions, 26, 39 New security issues, 34 Ownership of securities issued by, 19, 20, 26 LABOR force, 45 Rates on securities, 24 Life insurance companies (See Insurance companies) Stock market, 25 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 18-20 New issues, 34 Commercial banks, 3, 16, 18-20, Prices, 25 Federal Reserve Banks, 4, 5, 6, 10, 11 Financial institutions, 26, 39 Student Loan Marketing Association, 33 Insured or guaranteed by United States, 38, 39 TAX receipts, federal, 29 MANUFACTURING Thrift institutions, 3 (See also Credit unions, Mutual Capacity utilization, 46 savings banks, and Savings and loan associations) Production, 46, 48 Time and savings deposits, 3, 8, 13, 17, 18, 19, 20, 21 (See Margin requirements, 25 also Transaction and Nontransaction balances) Member banks (See also Depository institutions) Trade, foreign, 54 Federal funds and repurchase agreements, 5 Transaction balances, 13, 19, 20 Reserve requirements, 7 Treasury currency, Treasury cash, 4 Mining production, 48 Treasury deposits, 4, 10, 28 Mobile homes shipped, 49 Treasury operating balance, 28 Monetary and credit aggregates, 3, 12 UNEMPLOYMENT, 45 Money and capital market rates (See Interest rates) U.S. government balances Money stock measures and components, 3, 13 Commercial bank holdings, 18, 19, 20 Mortgages (See Real estate loans) Treasury deposits at Reserve Banks, 4, 10, 28 Mutual funds (See Investment companies) U.S. government securities Mutual savings banks, 8, 26, 39, 40 (See also Thrift Bank holdings, 17, 18-20, 21, 30 institutions) Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 4, 10, 11, 30 Foreign and international holdings and transactions, 10, NATIONAL defense outlays, 29 30, 66 National income, 51 Open market transactions, 9 Nontransaction balances, 3, 13, 19, 20, Outstanding, by type and holder, 26, 30 Rates, 24 OPEN market transactions, 9 U.S. international transactions, 53-67 Utilities, production, 48 PERSONAL income, 52 Prices Consumer and producer, 44, 50 VETERANS Administration, 38, 39 Stock market, 25 Prime rate, commercial banks, 23 WEEKLY reporting banks, 19-21 Producer prices, 44, 50 Wholesale (producer) prices, 44, 50 Production, 44, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 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 Joseph A. Baute Frank E. Morris Thomas I. Atkins Robert W. Eisenmenger NEW YORK* 10045 John Brademas E. Gerald Corrigan Clifton R. Wharton, Jr. 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 Leroy T. Canoles, Jr. Robert P. Black Robert A. Georgine Jimmie R. Monhollon Baltimore 21203 Robert L. Tate Robert D. McTeer, Jr. Charlotte 28230 Wallace J. Jorgenson 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 Mclnnis Fred R. Hen- Jacksonville 32231 E. William Nash, Jr. James D. Hawkins Miami 33152 Eugene E. Cohen Patrick K. Barron Nashville 37203 Condon S. Bush Jeffrey J. Wells New Orleans 70161 Leslie B. Lampton Henry H. Bourgaux CHICAGO* 60690 Stanton R. Cook Silas Keehn Robert J. Day Daniel M. Doyle Detroit 48231 Russell G. Mawby Roby L. Sloan ST. LOUIS 63166 W.L. Hadley Griffin Vacancy Mary P. Holt Joseph P. Garbarini Little Rock 72203 Sheffield Nelson John F. Breen Louisville 40232 Henry F. Frigon James E. Conrad Memphis 38101 Donald B. Weis Paul I. Black, Jr. MINNEAPOLIS 55480 William G. Phillips Vacancy John B. Davis, Jr. Thomas E. Gainor Helena 59601 Gene J. Etchart Robert F. McNellis KANSAS CITY 64198 Irvine O. Hockaday, Jr. Roger Guffey Robert G. Lueder Henry R. Czerwinski Denver 80217 James E. Nielson Wayne W. Martin Oklahoma City 73125 Patience Latting William G. Evans Omaha 68102 Kenneth L. Morrison Robert D. Hamilton DALLAS 75222 Robert D. Rogers Robert H. Boykin Bobby R. Inman William H. Wallace El Paso 79999 John R. Sibley Joel L. Koonce, Jr. Houston 77252 Robert T. Sakowitz J.Z. Rowe San Antonio 78295 Robert F. McDermott Thomas H. Robertson SAN FRANCISCO 94120 Alan C. Furth John J. Balles Fred W. Andrew Richard T. Griffith Los Angeles 90051 Richard C. Seaver Richard C. Dunn Portland 97208 Paul E. Bragdon Angelo S. Carella Salt Lake City 84125 Don M. Wheeler 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

A88 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories A^l 1984 ii^^HHii • h h hm ALASKA HHHHII © \ YYP LEGEND —Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch * Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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