Federal Reserve Bulletin, 1985-05

VOLUME 71 • NUMBER 5 • MAY 1985 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE • s • • 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 277 U.S. INTERNATIONAL TRANSACTIONS 306 Emanuel Melichar, Senior Economist in the IN 1984 Division of Research and Statistics, looks at agricultural banking experience in 1984 and The key feature of the U.S. external acsays that the farm sector is in the sixth year counts in 1984 was the unprecedented size of a period of lower and relatively stagnant of the current account deficit and the acincome, with poor prospects for near-term companying capital account surplus. improvement, before the Senate Committee on Agriculture, Nutrition, and Forestry, 287 TREASURY AND FEDERAL RESERVE March 20, 1985. [The published statement is FOREIGN EXCHANGE OPERATIONS a revised version issued March 22, 1985.] During the six months ended in January 1985, the dollar rose to its highest levels of 308 Henry C. Wallich, Member, Board of Govthe floating-rate period against the German ernors, examines the important issues remark and to record levels against the British lating to U.S. trade and current account pound and most other European currencies. deficits, before the Subcommittee on International Economic Policy and Trade of the 300 STAFF STUDIES House Committee on Foreign Affairs, March 22, 1985. "Scale Economies in Compliance Costs for Consumer Protection Regulations: The 312 Chairman Volcker reviews recommenda- Truth in Lending and Equal Credit Opportions to reform the federal regulatory structunity Laws" investigates economies of ture for financial institutions contained in scale in compliance costs for Regulations Z the Task Group on Regulation of Financial (Truth in Lending) and B (Equal Credit Services, chaired by Vice President Bush, Opportunity) at commercial banks based on before the Subcommittee on Commerce, data from a 1981 survey of financial institu- Consumer and Monetary Affairs of the tions conducted by the Federal Reserve House Committee on Government Opera- Board. tions, March 27, 1985. 302 INDUSTRIAL PRODUCTION 322 ANNOUNCEMENTS Output declined an estimated 0.5 percent in Modification of seasonal credit program. February. Suspension of processing of applications to 304 STATEMENTS TO CONGRESS acquire nonbank banks. Paul A. Volcker, Chairman, Board of Gov- Elimination of fractional availability crediternors, discusses the economic situation ing option. and its relationship to budgetary choices in Amendment to Regulations G and U. the context of a huge deficit, before the House Committee on the Budget, March 6, Changes in official staff commentaries on 1985. Regulations E and Z. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Proposed revisions to Regulation B; pro- dollar in foreign exchange markets. It was posed amendments to Regulations G and J. agreed that the intermeeting range for the federal funds rate, which provides a mecha- Changes in Board staff. nism for initiating consultation of the Com- Publication of final staff study in series on mittee when its boundaries are persistently intervention in exchange markets. exceeded, should be left unchanged at 6 to 10 percent. Admission of three state banks to membership in the Federal Reserve System. 335 LEGAL DEVELOPMENTS 326 RECORD OF POLICY ACTIONS OF THE Amendments to Regulations B, E, M, and FEDERAL OPEN MARKET COMMITTEE Z, and amendments to Regulations G, T, and U; various bank holding company, At its meeting on February 12-13, 1985, the bank service corporation, and bank merger Committee agreed to establish ranges for orders; and pending cases. monetary growth of 4 to 7 percent for Ml, 6 to 9 percent for M2, and 6 to 9V2 percent for 357 DIRECTORS OF THE FEDERAL RESERVE M3 for the period from the fourth quarter of BANKS AND BRANCHES 1984 to the fourth quarter of 1985. The associated range for total domestic nonfi- List of directors by Federal Reserve Disnancial debt was set at 9 to 12 percent for trict. the year 1985. The Committee agreed that growth in the monetary aggregates in the AI FINANCIAL AND BUSINESS STATISTICS upper part of their ranges for 1985 may be A3 Domestic Financial Statistics appropriate, depending on developments A44 Domestic Nonfinancial Statistics with respect to velocity and provided that A53 International Statistics inflationary pressures remain subdued. At the conclusion of the Committee's A69 GUIDE TO TABULAR PRESENTATION, discussion of policy implementation for the STATISTICAL RELEASES, AND SPECIAL weeks immediately ahead, all of the mem- TABLES bers indicated their acceptance of a directive that called for maintaining the degree of A70 BOARD OF GOVERNORS AND STAFF reserve pressure that had prevailed in recent weeks. The members agreed that mod- All FEDERAL OPEN MARKET COMMITTEE est increases in reserve restraint would be AND STAFF; ADVISORY COUNCILS sought if growth in Ml appeared to be exceeding an annual rate of about 8 percent A74 FEDERAL RESERVE BOARD and M2 and M3 a rate of around 10 to 11 PUBLICATIONS percent during the period from December to March, particularly if such monetary ex- All INDEX TO STATISTICAL TABLES pansion was associated with satisfactory growth in business activity and diminishing A19 FEDERAL RESERVE BANKS, BRANCHES, pressures in exchange markets. The mem- AND OFFICES bers also agreed that lesser restraint on reserve positions would be acceptable in the event of substantially slower growth in A80 MAP OF FEDERAL RESERVE SYSTEM the monetary aggregates, especially against the background of sluggish growth in economic activity and continued strength of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1984 This article was prepared by Catherine L. Mann 1. Foreign exchange value of the U.S. dollar of the Division of International Finance. and real long-term interest rate differential March 1973=100 Percent The key feature of the U.S. external accounts in 1984 was the unprecedented size of the current 150 {~ . 16 account deficit and the accompanying capital Weighted average dollar1 account surplus. These mirror imbalances occurred against a background of strong U.S. Interest rate differential12 growth, large federal budget deficits, an antiinflationary monetary policy, associated high real interest rates, and a rising exchange value of the dollar. The complex of macroeconomic factors contributed to pressures in product markets 1. Exchange value of the U.S. dollar is the index of its weighted for protection to ease the burden of adjustment average exchange value against currencies of the other Group of Ten to international competition and, in capital mar- countries plus Switzerland, using 1972-76 total trade weights. 2. Interest rates are those on long-term government or public kets, encouraged continued deregulation and inauthority bonds adjusted for the expected rate of inflation estimated novation that facilitated financing of the federal by a 36-month centered moving average of actual inflation (staff estimates have been made when needed). The differential is calculated budget and external deficits. by subtracting from the U.S. rate the trade-weighted average rate for the other G-10 countries plus Switzerland. the United States. In addition, expectations of CONTRIBUTING TO LARGE IMBALANCES: the continued strength of the dollar and a view of INTEREST RATES AND EXCHANGE RATES the United States as a safe haven contributed to the dollar's appreciation even as market funda- The trade-weighted average exchange value of mentals suggested a decline in its value in the the dollar in terms of major foreign currencies future. advanced 12 percent between December 1983 The U.S. net private saving rate was at a and December 1984, bringing the appreciation historical high in 1984, but it was insufficient to since the fourth quarter of 1980 to 68 percent. finance both net investment and continued large Relatively attractive real interest rates on dol- federal budget deficits (chart 3). The inflow of lar-denominated assets and strong current and foreign savings lessened the crowding out of prospective growth in U.S. economic activity investment in interest-sensitive sectors such as fostered an unprecedented demand for dollar residential construction. By the same token, the assets with a resulting appreciation in the dollar. demand for U.S. assets raised the exchange The general correlation between differentials in value of the dollar; competitive pressures on long-term real interest rates and the strength of U.S. producers of tradable goods intensified, and the dollar is evident from chart 1. Yet even when they were increasingly crowded out of U.S. and differentials in real interest rates and rates of foreign markets. growth in economic activity between the United States and other industrial countries narrowed in mid-1984, the dollar continued to climb (charts 1 DEREGULATION AND FINANCIAL and 2). In part, strong U.S. investment, com- INNOVATION: THE CAPITAL ACCOUNT bined with the continuation of lackluster investment activity in Europe, suggested a more ad- The demand for U.S. and dollar assets was vantageous environment for long-run growth in higher in 1984 than in 1983, and nonbank inter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

278 Federal Reserve Bulletin • May 1985 2. Growth of real GNP 3. Demands on and sources of net savings Change from year earlier, percent Percent of gross national product foreign savings I Net domestic Net private investment savings 1981 1982 1983 1984 1. Average of the six major foreign industrial countries weighted using the annual average trade of these countries from 1972 to 1976. SOURCE. Data for the United States are from the U.S. Department of Commerce. 1982 1984 mediation outweighed bank-reported intermediation of net inflows last year, in contrast to 1983. Federal budget deficit is reported on a national income accounts basis. The recorded net capital inflow of $71 billion was Net private investment is the sum of business fixed investment, more than double the net inflow in 1983. Net residential construction outlays, and the change in business inventories, less depreciation, minus a statistical discrepancy. inflows reported by banks fell somewhat from Net domestic savings includes personal savings, undistributed 1983 levels, but net foreign purchases of U.S. corporate profits, and state and local government surpluses. Net foreign savings equals payments to foreigners for imports of securities more than doubled on the strength of goods and services, transfer payments, and interest paid by governsizable net foreign purchases of U.S. Treasury ments to foreigners minus receipts from foreigners for exports of goods and services. securities. Figures exclude depreciation, which amounted to $403 billion in Macroeconomic factors generated the net cap- 1984; including depreciation would raise both domestic investment and domestic saving. Data for 1984 are preliminary. ital inflow; changes in the taxation and regulation SOURCE. Calculations based on data from the national income and of international capital flows and innovations in product accounts. credit extension and exposure management facilitated the rush of foreign saving to the United clarification of the capital accounts is impossible States and in part determined the channels because some agents are anonymous and some through which it entered. The U.S. government transactions are not reported under current arremoved the withholding tax on certain interest rangements. payments to foreigners, thereby permitting U.S. corporations to issue Eurobonds directly from the United States; furthermore, the U.S. Trea- Bank and Nonbank Intermediation sury began to compete in the Eurobond market via foreign-targeted registered obligations. Inno- Associated with the new intermediation techvations by private financial intermediaries re- niques was an apparent shift away from standard duced the costs and exchange risk of gaining bank intermediation of U.S. capital inflows toaccess to foreign capital and also encouraged the ward intermediation by private nonbanking entiexploitation of arbitrage opportunities that re- ties and direct participation by the government sulted from the differing pace of deregulation (table 1). Net inflows reported by banks deamong countries. creased somewhat in 1984, to $20 billion, while Some of these intermediation techniques and net private foreign purchases of U.S. securities innovations also affect the interpretation of capi- (government and corporate) grew about 75 pertal account data. The proper attribution of flows cent, to $39 billion. Taken by themselves, howto certain agents (for example, banks versus ever, these magnitudes can be misleading. nonbanks) is becoming clouded, and the interest In the early 1980s, U.S. banks were net prorate and currency characteristics of debt service viders of funds abroad. In 1983, however, banks arising from overseas sales of U.S. bonds are no became intermediaries for net inflows of funds longer easily identified. Unfortunately, precise and in fact accounted for two-thirds of those Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1984 279 1. Summary of U.S. international capital ties in the Eurobond market in 1984. Under the transactions1 current guidelines of U.S. regulators, such secu- Billions of dollars, + = net inflow rities can be counted as bank capital, although up to only a limited percentage of primary capital. Item 1982 1983 1984 Some of the intermediation techniques further Private capital, net -16 33 77 leverage existing capital by increasing fee in- Bank-reported -45 24 20 come and by creating off-balance-sheet, instead Securities, net 14 14 34 U.S. net purchase of on-balance-sheet, extensions of credit or exof foreign securities -8 -8 -5 Foreign net purchase of U.S. posures. As securities, the mandatory convertcorporate securities2 15 13 17 ible notes are recorded in the capital account Foreign net purchase of U.S. Treasury obligations 7 9 22 data as inflows outside banking channels. Like- Other nonbank, net 4 -7 11 Direct investment, net2 11 2 11 wise, off-balance-sheet credit extensions do not appear as bank-reported transactions in the capi- Official capital, net -8 -1 -6 tal account. Thus the capital account data for Total reported capital flows, net -23 33 71 1984 probably underestimates the role of banks Statistical discrepancy 33 9 30 in intermediating net capital inflows. Further bolstering the importance of securities Current account balance -9 -42 -102 transactions in the 1984 capital account was $22 1. Components may not add to totals because of rounding. billion of net foreign purchases of U.S. govern- 2. Through the third quarter of 1984, inflows from finance affiliates ment securities (table 1), which accounted for of U.S. companies in the Netherlands Antilles have been excluded from direct investment outflows and added to net foreign purchases of nearly one-third of total net private capital in- U.S. securities because they are largely the result of Eurobond sales. flows. Net sales to the private sector of $190 SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. billion of domestic Treasury securities helped finance the federal budget deficit in 1984, and inflows. In 1984, the dollar volume of recorded about 14 percent was purchased by foreigners. In bank inflows did not increase significantly, so addition, the U.S. Treasury issued $2 billion of that only about one-quarter of the net private foreign-targeted registered obligations (FTROs) capital inflow was attributed to banks. directly into the Eurobond market. The FTRO Factors contributing to the decline in the share was a novel effort by the U.S. Treasury to tap of bank intermediation included the temporary foreign savings and obtain a better price than that chilling of the Euro-interbank market brought on on its domestic registered debt. However, after by the Continental Illinois Bank crisis, strong initially selling at prices above domestic Treadomestic credit demands, continuing concern sury securities, the FTROs now trade in the over bank exposure to developing countries, and secondary market at about the same yield as pressures on banks from both investors and comparable domestic issues. regulators to increase bank capital, especially in The $17 billion in net private foreign purchases relation to assets. The Continental Illinois Bank of securities issued by U.S. corporations (both problem led to a reduction in bank liabilities to banks and nonbanks) was fueled by $23 billion of foreigners; credit demands and the concern over newly issued U.S. corporate Eurobonds, combank exposure contributed to a reduction in pared with $7 billion issued in 1983. Many U.S. claims on foreigners; and pressure to improve corporations find it attractive to issue Eurobonds bank capital fostered a desire to restrain both because the overseas market apparently will pay domestic and foreign lending. relatively more for the generally high-quality The perceived need to augment capital also credits and the intermediate-term, bearer form contributed to an unprecedented bank presence supplied by U.S. firms. The characteristics of in the Eurobond market and encouraged banks to these bonds determine, in part, the nature of develop new forms of intermediation that pro- U.S. net capital inflows and of the debt-service duce income while conserving capital. U.S. payment recorded in the nontrade current acbanks or bank holding companies issued about $3 count. About 20 percent of the dollar volume of billion in so-called mandatory convertible securi- new U.S. corporate Eurobonds issued in 1984 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 Federal Reserve Bulletin • May 1985 was in floating-rate notes, so called because the Another motive might be to exploit the prefereninterest rate on the bond changes with its under- tial terms of access that a borrower has with lying reference rate (for example, the London respect to a pool of funds without accepting interbank offered rate or Treasury bill rates); in exposure to an interest rate or currency that is 1981 the floating-rate share was 8 percent. About not appropriate to the borrower's balance sheet. 14 percent of the total 1984 volume was denomi- Preferential access might exist because of the nated in foreign currency, up from 12 percent in novelty of the debt issue, sociocultural similar- 1981. The nondollar denomination may imply ities between investors and borrowers, or regulafinancing of the current account deficit with tions. The swap provides the means for the some foreign currency, and a payment stream borrower to take advantage of the preferential with a floating interest rate or in a foreign curren- terms and still obtain a payment contract with cy would affect the future volatility of the service the desired attributes. Presumably, the other account. party to the swap obtains an interest-payment stream matching its own desired attributes and can also claim part of the benefits associated Swaps with the preferential access. The swap therefore provides opportunities that may make available Debt-service payments recorded in the external for international intermediation funds that were accounts are based on publicized terms of Euro- previously too costly. bond issues, but because of the now-widespread One additional consequence of the new interuse of swap transactions, it is no longer proper to mediation techniques is diversification away infer from such sources the characteristics of from the dollar as a denominating currency for actual debt-service payments. A swap transac- Eurobonds. The pool of nondollar bonds is growtion contractually transforms the interest rate or ing, as suggested by chart 4, which shows the the currency of the payment stream associated sizable portion of new bond issues denominated with a bond, or both. Although the swap does not in foreign currencies. Combined with cross-curchange the magnitude of the capital flow record- rency swaps, this development suggests an ined in the external accounts, it can alter the crease in the liquidity of foreign currency investapparent interest rate and currency exposure ments. If investors have financial options with associated with that capital flow. For example, greater currency diversity but equal liquidity and when a U.S. corporate bond with a floating rate risk management opportunities, their desired and denominated in dollars is sold to a foreigner, portfolio shares of assets denominated in dollars the issuer undertakes an obligation to make may fall, and pressure on the dollar may abate. payments in dollars at a floating rate of interest. The swap, arranged for a fee by a financial intermediary, transforms the original payment 4. New issues of Eurobonds, by currency stream into, say, a fixed-rate yen obligation. The Percent of total dollar volume U.S. service account will continue to record a floating-rate dollar payment even though the OOtthheerr U.S. corporation's actual payment over the life BBrriittiisshh sstteerrlliinngg Mi wm of the bond is at a fixed rate and in yen. The SSwwiissss ffrraanncc difference between the recorded payment and the actual payment will likely appear in the U.S. dollar — — statistical discrepancy. The motivation for entering into swap arrangements varies. One motive might be to manage balance-sheet exposures such as the variability of a corporation's asset returns and liability i i i payments or the foreign currency risk associated 1981 1982 1983 1984 with the nature or the country of business. SOURCE. Salomon Brothers Inc. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1984 281 Response by Foreign Governments 5. U.S. external balances Seasonally adjusted annual rate, billions of dollars The counterpart of the recorded U.S. net capital inflow was a substantial net capital outflow from Europe and Japan. Some foreign governments were concerned that, because of their magnitude, the net capital outflows could prove inflationary by weakening their currencies and could inhibit investment by raising domestic interest rates. After the United States eliminated the withholding tax, West Germany and France also 1978 1980 1982 1984 eliminated their withholding taxes on foreign purchases of some domestic bonds so as to SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. reduce capital flows motivated solely by the tax differentials. Japan, too, recently removed its withholding tax on foreign purchases of Euroyen more than $80 billion greater than in 1980 (table bonds issued by Japanese corporations. In addi- 2; chart 5). The value of U.S. exports rebounded tion, some central banks acted to keep interest by 10 percent in 1984 after two years of decline, rates higher than they otherwise would have while the value of U.S. imports surged 25 perbeen in order to reduce the differential in real cent. interest rates favoring instruments denominated The volume of nonagricultural exports posted in dollars. a healthy 11 percent rate of growth, largely in However, the net result of efforts by foreign industrial supplies and materials and in capital governments to stem capital flows and currency goods, as economic recovery in Western Europe depreciation through deregulation and changes in and Latin America began to take hold. The market interest rates has been unclear. Without response of export volume to foreign growth was question, the dollar continued to climb on the only partially offset by the strong dollar. Even strength of investor demand for dollar assets. so, volume remained well below the level of 1980 Apparently, the changes abroad did not signifi- (chart 6). In addition, export prices rose little cantly affect the market's expectations about the (chart 7) for two reasons: the dollar's apprecia- U.S. economy, U.S. monetary policy, or the tion restrained the rise in the cost of intermediate dollar's value. inputs into the production process, and U.S. firms squeezed profit margins in an effort to PROTECTIONIST PUSH: THE MERCHANDISE offset the effects of the appreciation on their TRADE BALANCE prices as expressed in foreign currencies. Continuing U.S. expansion and the strength of Coincident with the 1984 increase in net capital the dollar generated an increase in non-oil import inflow and the demand for dollar assets was the slide of the merchandise trade balance to an 6. Volume of U.S. merchandise trade unprecedented deficit. In response, the United States took some protectionist measures, and pressure for stronger action persists. An analysis of merchandise exports and imports by geographical area, however, suggests that protection, by weakening the links between trade and growth, can be detrimental to the United States itself as well as to its trading partners, particularly the developing countries. In 1984, the merchandise trade deficit was SOURCE. U.S. Department of Commerce, Bureau of Economic $107 billion, $46 billion greater than in 1983 and Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

282 Federal Reserve Bulletin • May 1985 2. U.S. merchandise trade Billions of dollars, seasonally adjusted annual rate Exports Imports TTrraaddee PPeerriioodd Agri- Nonagri- bbaallaannccee Total Total Oil Non-oil cultural cultural 1981 237.1 44.0 193.1 265.1 77.8 187.3 -28.0 1982 211.2 37.2 174.0 247.7 61.3 186.4 -36.5 1983 200.3 36.6 163.6 261.3 53.8 207.5 -61.1 1984 220.3 38.4 181.9 327.8 57.3 270.5 -107.4 1984:1 215.7 41.4 174.3 318.9 55.4 263.5 -103.3 2 218.2 37.2 180.9 321.4 59.6 261.8 -103.2 3 222.5 36.3 186.2 354.2 57.8 296.4 -131.8 4 225.0 38.7 186.3 316.6 56.4 260.2 -91.5 SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. volume of 27 percent in 1984 (chart 6). An course); the strong growth of economic activity examination of the large flows of imports by in the previous six months; and inventory hoardsector (table 3) shows that the share of capital ing, perhaps in expectation of protectionist presgoods and industrial supplies in non-oil imports sures. The increase in the unit value index for was stable during 1984 and supported the domes- non-oil imports was moderated by the dollar's tic investment boom. The impressive surge of climb (chart 7), although the rise of about 3 non-oil imports around midyear (shown in table percent suggests that importers may have chosen 2) developed from a combination of events: the to improve profit margins instead of passing steep appreciation of the dollar during the previ- through to U.S. prices the full extent of the ous six months (which may have generated an depreciation of their currency. expectation that it would soon reverse its 7. Prices in U.S. international trade Regional Analysis _ Index of unit values, 1980:1 = 100 A disaggregation by region of U.S. exports other than agricultural products and U.S. non-oil imports indicates the importance of linkages between trade and growth both in the United States and in other countries, particularly developing countries. Chart 8 displays an analysis of non-oil imports by geographical area that shows how the U.S. expansion was transmitted internationally. 1980 ' 1981 ' 1982 ' 1983 ' 1984 The regions responsible for the most significant SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. growth in U.S. non-oil imports in 1984, with 3. Shares of selected sectors in U.S. non-oil imports Percent of total, seasonally adjusted annual rate 1984 SSeeccttoorr 11998800 11998822 First Second Third Fourth quarter quarter quarter quarter Industrial supplies and materials (non-oil) 30.4 25.9 24.6 24.6 23.5 23.9 Capital goods 18.3 20.8 21.8 21.5 23.5 22.1 Total 48.7 46.7 46.4 46.1 47.0 46.0 Consumer goods 20.7 21.7 22.9 22.0 22.2 22.3 All other non-oil imports 30.6 31.6 30.7 31.9 30.8 31.7 SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1984 283 8. U.S. non-oil imports, by area 1 Ratio scale, 1979=100 1. Data for 1980-82 are annual. Data for 1983-84 are quarterly at 3. Hong Kong, Korea, Singapore, and Taiwan. seasonally adjusted annual rate. SOURCE. U.S. Department of Commerce, Bureau of Economic 2. Total U.S. non-oil imports from all countries. Analysis. rates greater than the overall average of 30 sumed growth, stimulated in part by increased percent, were Japan, four newly industrializing exports to the United States. The exports providcountries in the Far East, and Western Europe. ed the foreign exchange earnings needed for However, the United States also imported 25 purchases of U.S. products. Growth in U.S. percent more from Latin America in 1984 than in nonagricultural exports to the industrial coun- 1983. The data suggest that the United States tries was less robust (except in the case of contributed to export-led growth in developed Canada). and newly industrializing countries and that trade expansion aided the growth and debt- Protection servicing ability of Latin American countries. As for U.S. nonagricultural exports, the larg- The large U.S. merchandise trade deficit stirred est increases during the last year were to devel- demands for sectoral protection, and perceptions oping countries (chart 9). Shipments to Latin of "unfair" foreign competition and "distorted" America rose more than 30 percent as eco- exchange rates encouraged calls for action nomic activity in several major countries re- against imports in general. Certain industries 9. U.S. nonagricultural exports, by area 1 Ratio scale = 100 "200 INDUSTRIALIZED COUNTRIES wmmmmfmmmmmmmmmmmmmmmmmmK^mmmmmmmmm 1980 1982 1984 1980 1982 1984 1. Data for 1980-82 are annual. Data for 1983-84 are quarterly at 3. Hong Kong, Korea, Singapore, and Taiwan. seasonally adjusted annual rate. SOURCE. U.S. Department of Commerce, Bureau of Economic 2. Total U.S. nonagricultural exports to all countries. Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 Federal Reserve Bulletin • May 1985 sought to stem the erosion of domestic and to a competitor with lower costs, sales of the international market shares and to relieve the other goods suffer, in part because they too are strains of adjustment made more acute by the similar to the import and in part because they strong dollar. While the U.S. government contin- become more expensive by virtue of having to ued to advocate relatively free trade, it negotiat- bear a greater share of the fixed production ed bilateral voluntary-restraint agreements on costs. steel; obtained in early 1984 a fourth year of such agreements on exports of Japanese autos; and ROLE OF THE EXCHANGE RATE: OIL AND reinforced bilateral textile and apparel agree- AGRICULTURE ments by using value-added tests to determine country of origin. The trend toward protection- In the U.S. external accounts, the effects of the ism in general, and toward bilateral and product- appreciation of the dollar on oil partially offset specific agreements in particular, is symptomatic those on agricultural products because the Unitof the drift of the world trading system away ed States is a net importer of the one and a net from the free trade principles embodied in the exporter of the other. High commodity prices in General Agreement on Tariffs and Trade. the 1970s and early 1980s encouraged significant The developing countries are increasingly im- expansion of agricultural production both in the portant U.S. trade partners. Some U.S. indus- United States and abroad. Although dollar prices tries enjoying renewed protection are ones in of agricultural exports fell in 1984, international which the developing countries have relatively demand for U.S. agricultural exports was severelower costs of production; in some countries, ly depressed by the strong dollar: when meaofficially encouraged strategies to promote ex- sured in foreign currency, prices of U.S. agriculports have recently borne fruit only to find major tural products actually rose over the last several international markets closed or closing. The cur- years. Domestic price support policies also rent proliferation of bilateral agreements demon- played a part in making U.S. agriculture uncomstrates their virulence; because the agreements petitive. Agricultural export volume stagnated, freeze world import shares, the United States is growing less than 1 percent; and the value of unable to benefit from shifts in productive effi- these exports plummeted in midyear, recovering ciencies among its trading partners. only at year-end for a gain of 4 percent in 1984. Arguments for protection often stress the need The significant increases in the price of oil to ease the transition of declining industries or to over the last decade encouraged exploration and allow time for reinvestment in industries whose reclamation, thereby expanding the world supply problems are more ones of structure than of of oil and reducing the proportion of the world inherent uncompetitiveness. Such arguments are supply produced by members of the Organizainvalid from an economic standpoint because tion of Petroleum Exporting Countries. At the market forces would yield a more efficient out- same time, consumers responded by conserving come. However, such arguments do gain force as oil and substituting other energy sources. A the costs of the adjustment process, including rising dollar made payments denominated in dolunemployment compensation, are passed on to lars more expensive for foreign countries and led the public through taxes. to a further reduction in world demand for oil. A case for protection can be made on purely The result was a drop in oil prices. Therefore, economic grounds, however. For some firms in a even though the volume of U.S. oil imports rose few industries, the loss in sales to an imported more than 8 percent in 1984 in response to the product could induce sales losses on other goods economic expansion, the value of oil imports produced by the firm, and the resulting ineffi- increased only about 6 percent. ciencies in the use of productive resources could exceed the gains realized by the consumers of U.S. INTERNATIONAL CREDITOR POSITION the cheaper imports. Broadly speaking, these AND THE NONTRADE CURRENT ACCOUNT inefficiencies may occur in firms that produce several kinds of similar goods with the same Large current account deficits in 1983 and 1984 equipment. As sales of one type of good are lost significantly eroded the U.S. position as a net Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1984 285 4. International investment position of the United States' Billions of dollars Net recorded international investment position RReeccoorrddeedd CCuummuullaattiivvee ppoossiittiioonn pplluuss YYeeaarr--eenndd uunnrreeccoorrddeedd ccuummuullaattiivvee Total, net Net direct Other recorded Gold, SDRs, and ttrraannssaaccttiioonnss22 uunnrreeccoorrddeedd investment portfolio, net IMF ttrraannssaaccttiioonnss33 1981 143.1 122.2 .6 20.3 -78.1 65.0 1982 149.5 99.6 26.2 23.7 -111.1 38.5 1983 106.0 92.6 -14.1 27.5 -120.4 -14.4 1984e 35 80 -75 30 -150 -115 1. Positive figures denote U.S. investment abroad; negative figures account appears here with a negative sign, on the assumption that it indicate foreign investment in the United States. All data except those represents a net accumulation of claims by foreigners. for 1984 include estimates for gains or losses on assets denominated in 3. This item is equivalent to the cumulative U.S. current account foreign currency due to their revaluation at current exchange rates, as position plus valuation adjustments (note 1). well as estimates for price changes in stocks, bonds, or other assets. SOURCES. 1981-83, net recorded position—Survey of Current Busi- Other adjustments to the value of assets relate to changes in coverage, ness, vol. 64 (August 1984), p. 40; 1981-83, other data—U.S. Departstatistical discrepancies, and the like. ment of Commerce, Bureau of Economic Analysis. All data for 1984 2. This item is the statistical discrepancy from the U.S. internation- are estimates by Federal Reserve staff. Estimates do not include al transactions account, which is cumulated beginning in 1959 with a valuation adjustments (note 1), which would likely reduce the estimate base of zero. A positive discrepancy in the international transactions of the net total (the first column) still further. creditor (table 4). The bulk of the reduction in the The eroding U.S. net investment position was overall U.S. net investment position occurred in one of the reasons for the sharp decline in net portfolio investments, a development that re- service receipts since 1981 (table 5). In addition, flects the importance of securities transactions in U.S. direct investors abroad suffered large unre- U.S. net capital inflows discussed earlier. alized capital losses as their assets denominated The true size of the U.S. net investment posi- in foreign currencies were revalued at rising tion continued to be clouded by the serious dollar exchange rates. Net receipts from service measurement problems represented by the cu- transactions other than investment income also mulated statistical discrepancy (table 4, column declined substantially, largely because payments 5), which increased by $30 billion in 1984. The rose for such services as transportation and discrepancy arises from incomplete or inaccurate travel. reporting of trade and capital flows; for 1984 the increase probably represented in large part unreported capital inflows. If the statistical discrep- OUTLOOK: IMPLICATIONS ancy recorded in 1984 was entirely in portfolio FOR ECONOMIC POLICY investments, the United States now may be very nearly a net debtor. The year 1984 saw the constellation of historically high federal budget deficits, strong U.S. 5. Other U.S. nontrade current account transactions1 growth and investment, and foreign enthusiasm Billions of dollars, seasonally adjusted annual rate for U.S. assets. By increasing U.S. absorption of Account 1981 1982 1983 1984 world savings, these macroeconomic factors produced high real interest rates and a high ex- Total, nontrade current account 34.3 27.3 19.5 5.8 change value of the dollar. The combined de- Service transactions, net 41.1 35.3 28.1 17.0 Net investment income 34.1 27.8 23.5 18.1 mand and price effects led to an enormous Net direct investment income 25.5 18.1 14.0 12.4 merchandise trade deficit and produced the relat- Other, net 8.6 9.7 9.5 5.8 ed capital inflow. Net military -1.1 .2 .5 -1.6 Other services, net 8.2 7.3 4.1 .5 The high dollar priced many U.S. tradable Unilateral transfers -6.8 -8.1 -8.6 -11.2 Private transfers -.9 -1.2 -1.0 -1.4 goods out of international markets and encour- U.S. government grants and aged a flood of imports into the domestic goods pensions -5.9 --66..99 --77..66 --99..88 market. Both developments generated pressures 1. Components may not add to totals because of rounding. for sectoral protection and for greater shielding SOURCE. U.S. Department of Commerce, Bureau of Economic of the U.S. market against all imports. It is to be Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

286 Federal Reserve Bulletin • May 1985 hoped that protection will be limited or avoided international debt situation. Financial innovation altogether, because it causes worldwide misallo- has increased the access of higher-quality borcation of resources. In addition, protection can rowers to the pool of world savings, possibly to only delay, not prevent, needed industrial adjust- the detriment of developing countries with debt ment. Moreover, if it succeeds in reducing the problems. U.S. protection could reduce the extrade deficit, protection will yield a smaller net port earnings of the developing countries, therecapital inflow, relatively higher domestic interest by altering their investment choices, reducing rates, and perhaps a reduced rate of domestic their income growth, and restricting their future investment and growth in economic activity. ability to service debt. High interest rates and an In the longer run, the microeconomic forces appreciating dollar do more immediate damage resulting from financial innovation and deregula- by increasing the local currency costs of serviction may either augment or attenuate the ing debt. strengthening of the dollar. Financial innovation Current account deficits and capital account can increase competition for dollar assets by surpluses go hand in hand, as do the hardships encouraging wider participation in financial mar- and the benefits of each. Simultaneous shrinkage kets; the result would be increased upward pres- in the one and enlargement of the other are sure on the dollar's exchange value. But financial inherently contradictory: the two accounts must innovation can also increase the availability and move in tandem. Moreover, one country's surliquidity of foreign currency assets, which could plus in its capital account is the collective capital cause investors to shift away from the dollar in account deficit of the rest of the world. Thus, the currency composition of their portfolios and until the deficit in the U.S. current account is reduce upward pressure on the dollar's value. In eliminated, residents of other countries will be any event, financial innovation and deregulation net lenders to the United States, notwithstanding of domestic and international capital markets foreign official efforts to curb financial outflows. facilitated the strong net inflow of foreign savings The forces and conflicts discussed here—the in 1984. By helping finance the federal budget high dollar and relatively high interest rates, the deficit and the external deficit, the capital inflow current account deficit and capital account surlowered the cost and expanded the availability of plus in the United States and matching imbalfunds for U.S. investment, with particular bene- ances elsewhere, the attendant pressures for fits for interest-sensitive and nontraded goods protection on the one hand and encouragement industries. of innovation and deregulation in financial mar- Finally, the combined forces of financial inno- kets on the other—all will continue until the vation and protection, together with the macro- federal budget deficit is controlled and the ecoeconomic environment of 1984, have implica- nomic recovery in the rest of the world catches tions for the successful resolution of the up to that of the United States. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

287 Treasury and Federal Reserve Foreign Exchange Operations This 46th joint report reflects the Treasury- strong performance had been associated with Federal Reserve policy of making available addi- exceptionally vigorous U.S. economic growth, in tional information on foreign exchange opera- contrast to slower recoveries elsewhere. Relations from time to time. The Federal Reserve tively high U.S. interest rates had also been Bank of New York acts as agent for both the viewed as supporting the dollar. But indications Treasury and the Federal Open Market Commit- emerged in August that the U.S. expansion was tee of the Federal Reserve System in the conduct slowing in the third quarter, while economic of foreign exchange operations. activity abroad was picking up. Private economic This report was prepared by Sam Y. Cross, forecasters tended to scale back their projections Manager of Foreign Operations for the System of U.S. output gains for late 1984; some even Open Market Account and Executive Vice Presi- speculated that the United States might experident in charge of the Foreign Group of the ence a growth recession in the coming quarters. Federal Reserve Bank of New York. Richard F. At the same time, long-term U.S. interest rates Alford and R. Spence Hilton were primarily were progressively declining. By early autumn, responsible for the drafting of the report and evidence accumulated that the narrowly defined were assisted by Elisabeth Klebanoff. It covers monetary aggregate was no longer expanding and the period August 1984 through January 1985. short-term interest rates began to fall back. By Previous reports have been published in the late January, interest rates on long-term U.S. March and September (October 1982) BULLE- government bonds had eased V/2 percentage TINS of each year beginning with September 1962. 1. Federal Reserve reciprocal currency arrangements During the six months ended in January, the Millions of dollars dollar rose to its highest levels of the floating-rate Amount of period against the German mark and to record facility, Institution levels against the British pound and most other January 31, 1985 European currencies. The dollar's advance largely occurred in two steps—first around mid- Austrian National Bank 250 National Bank of Belgium 1,000 September and again from early November to Bank of Canada 2,000 National Bank of Denmark 250 mid-January. In all, the dollar rose some 8 per- Bank of England 3,000 Bank of France 2,000 cent against the currencies of continental Europe German Federal Bank 6,000 and 15 percent against the pound sterling. It Bank of Italy 3,000 advanced a substantially smaller 3V2 percent Bank of Japan 5,000 Bank of Mexico 700 against the Japanese yen and about 1 percent in Netherlands Bank 500 terms of the Canadian dollar. In trade-weighted Bank of Norway 250 Bank of Sweden 300 terms the dollar rose some 8 percent over the six- Swiss National Bank 4,000 month period. Bank for International Settlements: The dollar continued to rise despite a shift in Swiss francs/dollars 600 the prospects for the U.S. economy and for U.S. Other authorized European currency/dollars 1,250 interest rates, which began to occur in the sum- Total 30,100 mer. For the past couple of years, the dollar's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 Federal Reserve Bulletin • May 1985 2. Net profits or losses (-) nomic growth was considerably greater in the on U.S. Treasury and Federal Reserve United States than in most other industrialized current foreign exchange operations1 countries, many of which were still facing near- Millions of dollars record levels of unemployment. The United States and its currency continued to be well U.S. Treasury Period Federal Exchange regarded on grounds of relative political stability. Reserve Stabilization Fund The flexibility of its labor and product markets compared favorably with those of other coun- 1984:1 0 0 1984:2 -17.7 -21.4 tries, some of which had been experiencing un- 1984:3 0 0 1984:4 0 0 usually protracted labor disputes. The weakness January 1985 0 0 of precious metals and other commodity prices Valuation profits and tended to underline the attractiveness of financial losses on outstanding assets assets in general and of dollar assets in particuand liabilities as of January 31, 19852 -1,380.7 -900.6 lar. Investors, still reacting to the credit problems of recent years, attempted to be more 1. Data are on a value-date basis. selective. They tended to place a greater premi- 2. Valuation gains and losses represent the increase or decrease in the dollar value of outstanding currency assets and liabilities, using um on security in making investment decisions, end-of-period exchange rates as compared with rates of acquisition. and the dollar provided an outlet for many of The valuation losses reflect the dollar's appreciation since foreign currencies were acquired. these investments. Portfolio managers as well remained attracted to dollar markets. These marpoints. Short-term interest rates had dropped kets seemed to provide the flexibility needed to even more, the decline accompanied by two cuts adjust investment strategies quickly in the face of of Vi percentage point in the Federal Reserve's shifting interest rate expectations, and the liquiddiscount rate to 8 percent. For the period as a ity to cover the currency exposure if the dollar whole, the rate for three-month Eurodollar de- should drop. posits had declined more than 3 percentage Thus, capital inflows continued to be attracted points, and interest differentials vis-a-vis the to the United States at a pace greater than German mark, for example, though still favor- needed to finance a large current account deficit able to the dollar, had been cut just about in half. at prevailing exchange rates. During the third Under these circumstances, expectations de- quarter, heavy inflows came through the banking veloped that the dollar would weaken during the sector, as banks in the United States pulled back latter part of 1984, but these expectations failed funds previously placed in the Eurodollar marto materialize. Each time the dollar started to ket. As inflationary expectations in the United move lower, it quickly recovered. The dollar was States continued to moderate, as long-term interbuoyed by an easing of inflationary fears in the est rates fell, and as expectations of a decline in United States that implied U.S. real interest the dollar faded, a larger portion of the inflows rates were still attractive, even at lower nominal subsequently took the form of portfolio investlevels. Forecasts that price pressures would re- ments in dollar-denominated securities. In Noappear, made when the U.S. expansion was vember and December, the U.S bond market in stronger early in 1984, had not been borne out. particular attracted attention at least partly be- Inflation continued moderate, and confidence cause of relatively attractive yields and prosgrew that the U.S. economy might experience pects for capital appreciation. reasonable price stability for some time. This As these developments unfolded during the six confidence gained support from continued de- months, market participants focused on the ecoclines in world commodity prices, most particu- nomic consequences and the possible policy imlarly crude petroleum. plications of the dollar's continued advance. For The strength of the dollar reflected as well a the United States, while a strong currency continuing preference on the part of both resi- helped to moderate price pressures at a time of dents and nonresidents to invest in dollar-de- vigorous economic growth, it imposed major nominated assets. Since the last recession, eco- strains on the U.S. competitive position. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 289 current account deficit was building up close to intervening several months before, as well as $100 billion, largely as the result of sharp in- intense selling pressure against the British creases in imports of consumer and investment pound. In a few European countries, domestic goods. For other countries, market participants interest rates were tending to firm in response to noted the competitive boost being given to their concerns that the dollar's continued rise would exports, the leading source of stimulus to other- eventually be reflected in increased domestic wise relatively modest economic recoveries. But inflation. they believed the authorities would prefer a With the approach of a scheduled meeting of broader-based recovery and, therefore, would G-5 finance ministers and central bank goverseek to keep interest rates as low as possible, nors, market professionals anticipated that this particularly since inflationary expectations were might be an occasion for monetary authorities to subdued. plan a large and concerted exchange market Thus, market participants concluded that the operation. The officials discussed a range of authorities would be reluctant to use monetary international economic and financial issues. In policy to resist the dollar's rise. For a time early their announcement of January 17, they reafin the period, dealers were skeptical that even firmed their commitments to promote a converintervention would be used. But market sensitiv- gence of economic performance and stressed the ity to intervention increased, after the Bundes- importance of removing structural rigidities in bank sold dollars aggressively in the exchange their economies. They also reaffirmed the May market late in September, in the first of several, 1983 Williamsburg agreement to undertake coorhighly visible operations. The U.S. authorities, dinated intervention as necessary. having intervened on one occasion earlier that After the G-5 meeting, visible foreign exmonth, again entered the market on four days change market operations were in fact undertakfollowing the Bundesbank's late-September op- en by several countries. Most central banks in eration. Central banks of some other countries Europe and the Bank of Japan operated on also intervened to sell dollars during late Septem- occasion to sell dollars during the rest of Januber and early October. Later in the period, when ary. The U.S. authorities, in coordination with the dollar resumed its advance, market profes- the others, also intervened on two occasions late sionals again expected the authorities would try in January to sell dollars against marks. to moderate the move with intervention. Expec- These operations reinforced market perceptations of central bank resistance, along with the tions that the central banks were more willing to intervention operations that actually took place, intervene than before. At the end of the month, for a time kept the dollar's rise in check. however, market participants were still uncertain By the turn of the year, the outlook for the of the extent to which the authorities were pre- U.S. economy was progressively improving. pared to intervene and of the circumstances in Published data revealed quicker growth in the which the central banks would judge intervention fourth quarter for the United States than had to be appropriate or helpful. Dealers remained been anticipated. Also, an accelerating expan- impressed by the steady stream of commercial sion of monetary aggregates late in the year was and investment-related orders for dollars coming seen as narrowing the scope for any further into the market. Under these circumstances the easing of U.S. monetary policy. Economic per- dollar steadied but did not fall back appreciably formance in several European countries, though from mid-January levels. also improving, was still viewed by market pro- In summary, during the six months under fessionals as not so vigorous as to require greater review, the U.S. authorities intervened in the monetary restraint. As sentiment toward the exchange markets on seven occasions, selling dollar became even more bullish early in Janu- dollars and buying marks in each instance. They ary, the dollar's rise against all currencies gained bought $50 million equivalent of marks on one increasing momentum. The market noted the day early in September, $229 million on four dollar's approach to levels against the German occasions between September 24 and October mark at which the Bundesbank had been seen 17, and $94 million on two days late in January. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 Federal Reserve Bulletin • May 1985 The total, $373 million equivalent of marks, was then approved by the Fund's Executive Board. shared equally between the U.S. Treasury and The drawing was repaid in the amounts of $270 the Federal Reserve. million on January 3, 1985, and $230 million on In other operations, the Treasury Department January 15, 1985, after the Argentine governannounced on October 12 that it had joined with ment's drawings from the IMF under the CFF the Bank of Japan and the Bank of Korea in and its standby arrangement respectively. arrangements to provide short-term financing to The Federal Reserve and the ESF invest forthe Central Bank of the Philippines, totaling $80 eign currency balances acquired in the market as million in support of the Philippine economic a result of their foreign exchange operations in a adjustment program, which had been agreed variety of instruments that yield market-related upon with the management of the International rates of return and that have a high degree of Monetary Fund (IMF). The Treasury, through quality and liquidity. Under the authority providthe Exchange Stabilization Fund (ESF), agreed ed by the Monetary Control Act of 1980, the to provide $45 million; the Bank of Japan, $30 Federal Reserve had invested $870.1 million of million; and the Bank of Korea, $5 million. The its foreign currency holdings in securities issued full amount of the facility was drawn on Novem- by foreign governments as of January 31. In ber 7. The drawing occurred after the Managing addition, the Treasury held the equivalent of Director of the IMF confirmed that the IMF had $1,573.8 million in such securities as of the end of received assurances of the availability of ade- January. quate financing in support of the Philippine economic adjustment program and that he had formally submitted the Philippine request for a GERMAN MARK standby arrangement to the Fund's Executive Board. The drawings were repaid on December During the period under review, the mark fell 8.5 28, after the Philippines drew on its standby percent against the strongly rising dollar and arrangement with the Fund. eased relative to all other major currencies ex- On December 3, the U.S. Treasury agreed to cept sterling, ending the period near the bottom provide a $500 million swap facility to the Cen- of the European Monetary System (EMS). The tral Bank of the Argentine Republic as bridging mark's decline against the dollar was interrupted credit in support of the Argentine economic only temporarily—between late September and adjustment program, which had been agreed early November. upon with the IMF. The full $500 million was At the start of the period, international invesdrawn on December 28. On that day the IMF tors' attention was deflected to dollar-denomi- Managing Director indicated that the IMF had nated securities. A rally in the U.S. bond market assurances of adequate financing from commer- had just gotten under way. A much talked-about cial banks in support of the Argentine govern- elimination of the U.S. withholding tax on interment's economic program. Argentina's requests est payments to nonresidents was finally apto draw on a standby arrangement and on the proaching. And talk spread that the U.S. Trea- Compensatory Financing Facility (CFF) were sury would soon issue securities targeted 3. Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury Millions of dollars; drawings or repayments (-) Outstanding January Drawings on the U.S. Treasury 1984:3 1984:4 January 31, 1985 1985 Central Bank of the Philippines { -45 } Central Bank of the Argentine Republic 0 500 { Ig0 } o NOTE. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 291 especially for foreign investors. Meanwhile, the lion equivalent of marks on one occasion early in mark continued to suffer from comparison be- September. After the Bundesbank's action of tween the recoveries in Germany and in the September 21, they purchased a total of $135 United States. Under these circumstances, the million equivalent of marks during three days mark was trading at DM2.9170, near the eleven- from late September to early October to counter and-one-half-year lows against the dollar early in disorderly markets. These purchases were August. Its margin over other currencies within shared equally between the Federal Reserve and the EMS had also been significantly reduced. the Treasury. After trading steadily in seasonally thin mar- Immediately after the central bank intervenkets for several weeks, the mark again began to tions, the mark traded generally between decline as the dollar rose early in September. As DM3.00 and DM3.10. In early October, the mark the mark's fall progressed, market participants received a further lift when the cabinet anquestioned whether the German authorities nounced repeal of Germany's 25 percent withwould act to stop the decline. The economic holding tax on German securities held by nonresjustification for doing so was unclear. Additional idents, retroactively to August 1, sparking stimulus to Germany's export sector—already renewed foreign interest in German bonds. But the driving force to economic recovery—was soon thereafter, the mark began to drift lower seen in the market as a welcome boost to the against the dollar and to a lesser extent against economy and a spur to employment. Meanwhile, most other currencies. In mid-October, when the depreciation was not generating any evident mark was approaching the lows of September pickup in inflationary pressures, partly because and trading at DM3.1575, the Bundesbank again of the weakness of world commodity prices. intervened. The U.S. authorities also bought $95 Moreover, market participants were unsure what million equivalent of marks on one occasion to policy tool the authorities might use if they chose counter a renewed outbreak of disorderly market to act against the mark's decline. The Bundes- conditions. bank had emphasized before, when the mark was The mark then rallied. Market participants had also declining against the dollar, that it did not become impressed that the Bundesbank and othintend to tighten monetary policy. As for official ers were resisting the generalized rise of the intervention, remarks of Bundesbank officials dollar. Furthermore, the economic environment pointed to its limited effectiveness in resisting appeared to have shifted in Germany's favor fundamental market trends. since midsummer. Statistics were released indi- In fact, the Bundesbank had been intervening cating that the economy had revived strongly regularly at the Frankfurt fixings and on occasion during the summer. Exports continued to be the at other times in the open market. These opera- principal boost to output and earnings. But for tions, at least during August, just about offset the first time the export boom appeared to be interest earnings and other inflows into reserves spilling over to other sectors, as reflected in of Germany, so that the foreign exchange re- increased domestic new orders for capital goods. serves showed little net change from the $38 U.S. interest rates of all maturities were declinbillion level at the end of July. When the dollar's ing, so that the market no longer perceived the rise accelerated, pulling the mark rate down to Bundesbank as having to resist a gradual decline DM3.1765, the Bundesbank intervened more ag- in German rates to obtain a narrowing of adverse gressively. Its actions, followed by other Euro- interest differentials to strengthen the mark. Unpean central banks, helped the mark to bounce der these circumstances, market professionals back up immediately. For several days thereaf- began to build up long positions in marks in the ter, market participants were extremely wary of expectation that a major adjustment in the dolpossible further dollar sales by the Bundesbank, lar-mark relationship was about to occur. The and rumors of other large operations circulated bidding for marks pushed the spot rate up 9 widely. For the month of September, Germany's percent to DM2.90 in the first week in November. foreign exchange reserves fell $2.7 billion. But after November 7, the mark changed di- The U.S. authorities had purchased $50 mil- rection and declined as the dollar strengthened Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 Federal Reserve Bulletin • May 1985 for the balance of the period under review. At the Lombard rate Vi percentage point, to 6 perfirst the selling of marks appeared to be dominat- cent, effective February 1. ed by corporations and others that had post- In any case, by the time the mark hit its midponed dollar purchases required before the year- January low, market attention was focused more end in hopes of taking advantage of the expected on the rise of the dollar than on the decline of the rise in the mark. Before long the selling of marks mark. Other currencies, too, were weakening broadened as expectations of a generalized de- sharply, most especially the pound. As a result, cline in dollar rates diminished. Speculators in when market participants became aware that a the futures markets and dealers in commercial G-5 meeting of finance ministers and central banks liquidated much of their long mark posi- bank governors was to take place in Washington tions by year-end. Moreover, international in- on January 17, they began to expect a concerted vestors, no longer as concerned that a decline in intervention operation. Between the middle of the dollar would erode their total return on January and the close of the period, there were dollar-denominated securities, came back to joint intervention operations in which the U.S. U.S. securities markets in size. With investors monetary authorities purchased $94 million attracted by the remaining interest differentials equivalent of marks. These operations, like those favoring the dollar and the prospect of profits as earlier in the period, were shared equally be- U.S. interest rates continued to decline, the tween the Federal Reserve and the Treasury and dollar quickly came to overshadow the mark in were conducted to resist a renewed rise in the the exchange markets. By January 11, the mark dollar. had been pulled down to a record low for the At the end of January the mark was above its floating-rate period of DM3.2020. lows, trading at DM3.1670 against the dollar. But The Bundesbank had continued to operate in it was 9 percent below its high reached in early the exchange markets to sell dollars. These oper- November, and 8V2 percent below levels at the ations contributed to a $950 million decline in end of July. Germany's reserves declined a fur- Germany's foreign exchange reserves during the ther $821 million in January to close the period at three months from October to December. But $34 billion. German authorities were also attempting to mod- Within the EMS, the mark's attraction as an ify their money market management to ensure investment vehicle for private-sector investors that German banks not have permanent recourse weakened in relation to other EMS currencies, to large amounts of Lombard loans at the central as well as to the dollar. Economic performance bank, and they were concerned that larger dollar and macroeconomic policies among EMS counsales might complicate this endeavor. Accord- tries were showing growing convergence. Other ingly, by January central bank money was in- European countries were adopting more marketcreasingly being provided through security- oriented policies. Against this background, the based repurchase agreements, sometimes at persistence of wide, unfavorable interest differinterest rates slightly below the Bundesbank's entials at a time when inflation differentials were Lombard rate. Foreign exchange market opera- narrowing and prospects for a new currency tors at times misread the central bank's actions realignment were appearing remote led virtually as signaling a desire for short-term interest rates all the EMS currencies to strengthen relative to to ease. In fact, the Bundesbank had announced the mark. The authorities of other EMS counthat its monetary growth targets for 1985 would tries took advantage of this development to buy be lower than for the previous year, at 3 to 5 substantial amounts of marks in the market to percent. Bundesbank officials pointed to the im- add to reserves. pact of the mark's continued decline on import prices, thereby suggesting there was little scope for easing monetary policy. Yet the market's STERLING misinterpretation of the Bundesbank's intentions for money market rates was not fully dispelled At the beginning of the period under review, a until the Bundesbank announced it would raise five-month decline of sterling against the dollar Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 293 was ending, with the currency trading around recent growth and had kept Britain's current $1.30 and between 78 and 79 according to the account in surplus, was no longer seen as a Bank of England's trade-weighted index. After reliable source of strength. With predictions that mid-October, however, the pound became in- North Sea oil production would peak in the next creasingly vulnerable to selling pressure, and by couple of years, the stimulative effect of the oil December it was falling across the board. The sector on the economy was expected to wane. In downward pressure continued in January. For the meantime the contribution of net oil exports the period as a whole the pound fell 15 percent to Britain's balance of payments was expected to against the dollar and 9 percent in terms of the be undercut if an apparent weakness in oil mar- Bank of England's trade-weighted index. kets led to any significant drop in petroleum In August and September, sterling traded prices. steadily against other European currencies, even Britain's domestic economy and external posithough all were declining agaipst the dollar. The tion were thus perceived to be in precarious British authorities' resolve to adhere to their balance. Market participants paid close attention medium-term financial plan calling for cuts in to any development thought capable of forcing growth of monetary and public-sector borrowing the government to have to choose between suphad recently been reaffirmed. The Bank of porting further growth and employment or deal- England ratified a substantial increase in short- ing with pressures on prices, costs, and the term British interest rates that restored an inter- exchange rate. Thus, prospects of a possible est rate advantage for the pound relative to the spreading of the coal miners' strike and of a dollar. Although the pound declined RVi percent reduction in oil prices set the stage for an abrupt, against the dollar to $1.22 as the dollar advanced but limited, drop in the exchange rate around generally, it did not move below 76.6 on the mid-October. Within a week, the pound slid trade-weighted index. The overall steadiness of below $1.20 against the dollar and to 74.0 against sterling and an apparent moderation in the the trade-weighted index. growth of British monetary aggregates permitted Then, for about two months, the pound steadstaged reductions in short-term sterling interest ied. The coal miners' strike failed to widen, and rates during August totaling 1 Vi percentage downward pressure on oil prices was being conpoints. With these cuts the interest differentials tained as long as OPEC discussions on ways to favoring sterling were more than eliminated. deal with weak oil prices continued. The pound Notwithstanding the pound's steadier tone in traded within a range of 74 to 76 according to the the exchange markets, a number of factors un- trade-weighted index. Against the dollar it dermined market confidence that the British au- moved in line with other European currencies, thorities would hold to their anti-inflation poli- rising during late October and early November cies. Britain's economy, in its third year of before falling back below $1.21 early in Decemexpansion, was showing signs of losing momen- ber. With the pound again trading more steadily, tum while unemployment was still rising. No British short-term interest rates continued to progress was being made in bringing inflation ease largely in line with the decline in Eurodollar down below 5 percent or in slowing the rise of rates. By mid-December, the British clearing unit labor costs, by then increasing more rapidly banks had cut their base lending rates from the than in other industrial countries. Meanwhile midsummer highs a total of 2Vi percentage points Britain's current account position was deterio- to 9!/2 or 93/4 percent. rating, despite a pickup in demand in major From December on, sterling began to fall export markets, because of a sharp jump in sharply against all currencies, setting successive imports. A lengthy strike by coal miners was new lows in terms of both the dollar and the having an adverse effect on production, as well trade-weighted index. Selling of sterling was as the balance of payments since imported oil stimulated by the expectation that OPEC would was being substituted for domestically produced have difficulty reaching an effective agreement coal. Moreover, the oil sector, which had been on price differentials. In addition, the market's accounting for more than half the economy's underlying concern intensified that the authori- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 Federal Reserve Bulletin • May 1985 ties were shifting their priorities for economic ly above its low at $1.1275 and 71.5 in terms of policy toward spurring output. Growth of public- the Bank of England's trade-weighted index. sector borrowing was turning out well in excess British foreign exchange reserves were little of the government's target, only partly because changed on balance between the end of July and of strike-related expenditures. Credit extended the end of December. Then for January, they to the private sector also showed signs of accel- dropped $233 million to $6.73 billion as of the end erating. The monetary aggregates remained near of the period. the top of their official target ranges. Admittedly, On December 18, the Chancellor of the Exchethe monetary aggregates were distorted in De- quer, in reply to questions in Parliament, stated cember by a stock issue. But market partici- that the Bank of England would no longer repants, interpreting the evidence at hand, con- quest foreign monetary authorities to restrict cluded that the Bank of England would be sterling balances to working levels, thereby endreluctant to see a reversal of the interest rate ing formally an agreement the government felt declines of the past several months even to stem was no longer appropriate to the current internaa fall in the exchange rate. Market participants tional monetary setting. The announcement did also came to doubt that authorities were pre- not cause any visible impact on exchange rates at pared to use intervention to resist a renewed the time. decline in sterling. Official declarations and actions suggested the authorities were willing to let the pound fall if dictated by market forces. JAPANESE YEN Under these circumstances the pound dropped steadily, falling most precipitously in mid-Janu- Over the six-month period under review, the ary when the OPEC negotiations appeared to be Japanese yen eased against the dollar but appreunder particular strain. The pound touched a low ciated against the European currencies. A reagainst the dollar of $1.1015 in Far Eastern cord-breaking pace of long-term capital outflows trading on January 14 and of 70.6 against the continued to be a source of downward pressure trade-weighted index at the opening in London on the currency against the dollar. Outflows of that same day. As the exchange rate fell, the Japanese resident capital were attracted in part authorities did not resist a rise in money market by relatively high interest rates abroad. They interest rates. The Bank of England at one point also reflected the continuing diversification of seized the initiative to push interest rates up financial assets by Japanese investors and infurther, to the levels of midsummer. In the end, creased yen lending to foreign borrowers. Meansterling interbank rates rose even more—for a while, some nonresidents that had been among total increase of 4!/2 percentage points to 14 the largest investors in Japanese securities severpercent. At that point interest rate differentials al years ago continued to liquidate their holdings were again strongly in favor of the pound, reach- at maturity, largely to meet payment needs. The ing a level of 3!/2 percentage points for three- net long-term capital outflows swamped Japan's month deposits relative to the dollar. large and growing current account surplus, Late in January, the high level of sterling which was reaching $35 billion for the year. At interest rates made selling the pound short ex- times, however, favorable shifts in commercial pensive. In addition, OPEC had demonstrated an leads and lags gave a boost to the yen against all ability to work out a limited agreement on pricing currencies. Vis-a-vis the European currencies, differentials, and spot oil prices firmed. Thus, the Japan's large current account surplus and robust immediate pressures against the currency abat- domestic economy were important sources of ed. Sterling also benefited from market talk of strength. stepped-up central bank intervention following At first, the yen got some respite from the full the mid-January G-5 meeting in Washington. brunt of the capital outflows that had helped to Although the pound remained subject to sporadic push the spot rate down to ¥246.45 by the start pressure through the end of the month, it traded of the six-month period. The outflows subsided without clear direction. The pound closed slight- in August as foreign investment in Japanese Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 295 equities resumed during a late-summer rebound about immediate financing requirements and the in the Tokyo stock market. Also, Japanese inves- future costs of funds. Credit demand softened tors slowed their net purchases of foreign securi- and corporate borrowing increasingly took place ties ahead of the end of the financial half-year in at shorter maturities. September. Thus, the yen advanced to ¥242 Against this background, there was discussion early in August and traded steadily against the in the fall that a reduction of the Bank of Japan's dollar at that level for several weeks. official interest rates could entail large potential During September and October, the yen also benefits and low risks for the Japanese economy, received a lift from a favorable swing in commer- given Japan's restrictive fiscal policy, low inflacial transactions. The yen started to ease against tion, and the more restrained outlook for ecothe dollar, which had become well-bid across the nomic growth. Officials of the Bank of Japan board. But market participants expected this were concerned, however, that any further drop weakness to be short lived, anticipating that the in Japan's relatively low short-term rates would dollar would soon decline in response to declin- put further pressure on the yen exchange rate at ing U.S. interest rates. Thus, as the yen fell a time when the size of Japan's current account through the lows of late July and early August surplus was threatening to provoke protectionist and toward the ¥250 level, Japanese exporters reactions in major export markets. It therefore stepped up their selling of dollars to take advan- kept its discount rate at the 5 percent level tage of the current dollar rate. Meanwhile, im- established a year earlier with the result that porters postponed their currency purchases. At short-term interest rates remained steady. the same time, Japan's imports of oil slowed so As a result of these interest rate developments, that the net export balance was unusually favor- the interest differentials adverse to the yen narable. rowed somewhat for long-term rates and de- With these trade transactions favoring the yen clined even more for short-term rates. But marand capital outflows temporarily subdued, the ket operators began to waver in their yen's decline against the dollar was more gradual expectations that the yen would strengthen furthan the decline of the European currencies ther in response to this narrowing of interest during September and early October. The yen differentials because the dollar generally had did touch a two-year low of ¥250.45 on October eased relatively little from its highs of October. 17, but it gained 7 percent against the German Thus, the allure of the remaining interest difmark to trade near a record high vis-a-vis that ferentials favoring the United States and of proscurrency. Moreover, the yen recouped its losses pects of significant further capital appreciation against the dollar during late October when the on dollar-denominated bonds began once again dollar eased back. By early November the yen to weigh on the Japanese yen. Toward the end of was again trading near the ¥240 level against the the year Japanese investment in foreign securidollar and reached a high for the six-month ties mounted. The December U.S. government period of ¥239.40 on November 7. issue targeted at foreign investors, as well as the Meanwhile, the changing economic environ- offering of British Telecom shares, were well ment abroad had several implications for Japan. received in the Tokyo market. Thus, net capital The slowdown of the U.S. economic expansion outflows therefore jumped up in November and in the third quarter of 1984 seemed to show up December to $5 billion and a record $8 billion almost immediately in a sharp deceleration of respectively. In the year as a whole, net long- Japan's export growth. As a result, Japan's ex- term capital outflows from Japan rose to $50 ternal position actually had a negative impact on billion. At the same time, exchange market par- GNP in the same quarter. In addition, the decline ticipants noted that foreign private borrowers in U.S. interest rates, widely expected to be rushed to take advantage of the opening of the further encouraged by cuts in the Federal Re- Euroyen market to them, effective December 1, serve's discount rate, contributed to a substan- to place yen issues. To the extent these issues tial easing of long-term interest rates in Japan. were purchased by Japanese residents, the trans- Japanese enterprises shifted their expectations actions contributed to Japan's capital outflows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 Federal Reserve Bulletin • May 1985 Commercial leads and lags also began to shift compensation and interest payments on governagainst the Japanese yen. When expectations of ment debt. Monetary policy was generally unaca decline in the dollar faded, importers who had commodating. Interest rates were allowed to postponed their currency purchases came to fear ease only in response to declines in other counthat exchange rates would become even more tries or to improvements in inflation and fiscal unfavorable if they waited any longer. Mean- deficit control at home. while, exporters had already converted some of Under these circumstances, the exchange rate their foreign currency proceeds ahead of sched- relationship within the EMS remained free from ule. strain during the entire period under review. As a result, the yen progressively weakened Early on, most of the EMS currencies were against the dollar, falling more than 6V2 percent clustered within 1 percent of their bilateral parity from its early November high to ¥255.40 by the rates. The only exception was the Italian lira, end of January. At this level it was down 3'/2 which started near the upper limit of the wider, 6 percent on balance during the six months, al- percent limit established for that currency. The though against the major European currencies, it German mark and the Dutch guilder alternated as rose nearly 5 percent. the topmost currency within the narrow band Throughout the six-month period the Bank of against the Belgian franc at the bottom. During Japan intervened in the foreign exchange market the period, the German mark and Dutch guilder in comparatively small amounts. Following the fell progressively, albeit unevenly, to the lower meeting of the G-5 in mid-January, the prospect part of the band. The two currencies fell below of an increase in coordinated intervention made the Danish krone, and the Irish pound by early market participants wary of speculating too September, dropped below the French franc late heavily against the yen. However, the concern in November, and approached the bottom of the was not sufficient to stem the yen's slide. In narrow band to trade below the Belgian franc by total, intervention sales of dollars offset only a early January. fraction of Japan's interest earnings on its foreign The strength of other currencies vis-a-vis the exchange reserves, which rose $1.6 billion over mark presented many EMS countries with opthe six-month period to close at $22.5 billion. portunities and policy choices. One option, chosen by the Belgian, French, and Italian authorities, was to take advantage of the lack of EUROPEAN MONETARY SYSTEM pressure to build their foreign currency reserves. Before the period, the Belgian National Bank During the period under review, there was a had been able to begin reducing its liabilities to growing convergence of economic performance the European Monetary Cooperation Fund among EMS countries. Recovery had spread to (EMCF), using the proceeds of the government's all. The countries showing the greatest improve- external borrowings. During the six months unment in 1984 were those that had still been in der review, the Belgian central bank was able to recession during 1983. Inflation was continuing continue this program, not only with proceeds of to decelerate, with the countries showing the further borrowings, but also with foreign currengreater declines being those with the higher cies acquired in the market. By the end of the inflation rates a year earlier. In general, current period, Belgium had fully restored its European account positions were either stable or continu- Currency Unit (ECU) position in the EMCF and ing to improve. increased foreign currency reserves more than In all cases, the economic expansion proved $500 million over the six months. Before the insufficient to reduce historically high levels of period, the French and Italian authorities had unemployment. Yet fiscal and monetary policies already restored their foreign currency reserves were generally restrained. Fiscal policies were to the levels prevailing before the last EMS realignment. They continued, however, to buy aimed at reducing the size of the government substantial amounts of marks along with some deficit relative to GNP, with actual results varyother currencies. ing depending on the burden of unemployment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 297 Another option, chosen in a small way by the through the banking sector also flowed to the French and Italian authorities, was to ease some centers with higher rates. Judging these inflows of the exchange controls imposed during earlier to be potentially reversible, the central banks periods of pressure against their currencies. On chose to resist a substantial appreciation of their December 1, the French authorities announced a currencies within the EMS through intervention. partial lifting of controls on the transfer of funds Against the dollar, the EMS currencies fluctuabroad by individuals and corporations and per- ated generally in line with the German mark, mitted Economic Community institutions to float weakening during most of the period under re- ECU-denominated bonds in the French market. view, with the only major reversal during Octo- On December 1, the Italian authorities an- ber and November. By the end of January many nounced reductions in the non-interest-bearing of these currencies were tradng at record lows deposit required against residents' investment against the dollar, and all were some 8 percent abroad and eased restrictions on foreign ex- below levels at the end of July. change accounts as well as on the means of Although several of the EMS central banks at payment to be used by Italians traveling abroad. times intervened in dollars to limit the decline of A third option was to take advantage of the their currencies against the dollar, total dollar relative strength of the currency to lower interest sales by central banks other than the Bundesrates. In France and Belgium the authorities bank were moderate for the period as a whole. In cautiously permitted an easing of interest rates any case, by the end of January, the EMS central once the foreign currency reserve position was banks had purchased considerably more EMS restored and after inflation had shown clear signs and other currencies in the exchange market than of moderation. The French authorities also took they had sold dollars. advantage of moderating domestic credit demands to replace the strict guidelines on banks' credit, known as the encadrement du credit, with Swiss FRANCS a more flexible credit control system. But in general the authorities perceived the As the period under review began, Swiss interest scope for lowering interest rates to be limited. rates were under some upward pressure. Faster or more substantial cuts in interest rates Throughout 1984, the monetary authorities in were judged to be inappropriate in view of the Switzerland aimed at controlling inflation by remaining inflation differentials vis-a-vis Germa- monetary restraint, adhering to a targeted rate of ny, the continuing need to finance a large budget growth of about 3 percent for the central bank deficit, or the financing requirements of a current money stock. They held to this goal even though account deficit. In both Italy and Ireland, inter- economic recovery slowed during the second est rates were actually increased. The Bank of half of the year. The economic recovery, though Italy temporarily raised its discount rate 1 per- moderate by historical standards, was sufficient centage point to 16.5 percent in September to to generate a modest pickup in credit demands curb growth in bank credit that was exceeding its and some increase in interest rates. In addition, target range. When credit growth moderated, domestic financial markets were somewhat unhowever, the Bank of Italy cut its discount rate settled by the decline of the Swiss franc from its back to 15.5 percent in recognition of the con- peak in March that amounted to nearly 19 pertinuing progress in reducing inflation to less than cent vis-a-vis the dollar and about 2 percent visdouble-digit rates. a-vis the German mark by the end of July. These Thus, interest differentials among EMS coun- declines had brought the spot rate down to tries remained relatively wide and did not narrow SF2.4745 and DM.8493 by the opening of the as rapidly as, for example, the inflation differen- period. tials. Residents in countries with still relatively During August the Swiss franc steadied. Alhigh interest rates increased their borrowings in though short- and long-term interest rates in international markets, partly to finance domestic Switzerland remained the lowest of any of the operations, while short-term capital movements industrialized countries, the tightening of money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

298 Federal Reserve Bulletin • May 1985 market conditions in Switzerland combined with money for 1985, was perceived as reluctant to other factors to begin to reverse the decline in add further upward pressure on domestic interest the Swiss franc. Interest rates in Switzerland rates by intervening in the exchange markets. were rising at a time when rates elsewhere were The franc declined more rapidly than the mark as either steady or declining. Interest differentials, the dollar strengthed across the board during late while still adverse vis-a-vis both the dollar and December and January. The franc closed the the German mark, narrowed. In addition, non- period at SF2.6830, down 8V2 percent relative to residents had significantly reduced their issuance the dollar for the six months. of Swiss-franc-denominated bonds. Also, there As the franc began again to decline in late had been a particularly sharp drop in bond place- 1984, market commentators started to attribute ments—and therefore in the ensuing conversion the move at least in part to a long-term loss of the of bond proceeds into dollars—by Japanese firms franc's international appeal. They suggested the whose ability to offer attractive terms on bonds franc might be suffering from an erosion of its with stock warrants became compromised by a "safe haven" status in the face of worldwide poor performance of Japan's stock market during reductions in inflation and the perception of an the second quarter. Nor did Swiss franc bonds increasingly fragile political environment in Euoffer as much prospect for capital appreciation to rope. Some also suggested that the transactions attract investors as did bonds denominated in demand for the currency had diminished to the currencies of countries where interest rates were extent that the franc had lost attractiveness as a declining. trading vehicle. As for foreign exchange dealing, The Swiss franc therefore recovered irregular- the dollar-mark relationship was volatile enough ly against the dollar to reach its high of the six- to provide sufficient profit opportunities in marmonth period of SF2.3650 on August 16. The kets larger in size and permitting bigger transacfranc recovered against the German mark for tions. As a medium for investment, the franc was somewhat longer, moving to a level below being overshadowed by other currencies, most DM0.82 after mid-September. especially the dollar. During late September and October, when The Swiss National Bank did not intervene in European currencies were generally fluctuating the exchanges during the August-January periwidely vis-a-vis the dollar, the Swiss franc od. Swiss reserves fluctuated as the central bank moved with the German mark, but not as widely. used currency swaps to adjust domestic liquid- The Swiss franc was not the focus of selling ity, closing virtually unchanged from levels at the pressures before September 21. Thereafter, it did end of July. not benefit as much from intervention. The Swiss authorities made it clear that they did not intend to intervene aggressively in the exchange mar- CANADIAN DOLLAR kets out of concern that they might then have to deviate substantially from their domestic mone- Just before the period opened, the Canadian tary policy objectives. When the dollar fell back dollar had shaken off the severe selling pressures in late October, the Swiss franc was again trading of the earlier part of the year. In midsummer, close to its highs for the period against both the Canadian interest rates had moved up, restoring dollar and the mark. a positive differential in favor of the Canadian Thereafter, however, the franc began to lose dollar. With money market rates well above ground relative to both currencies. This weak- corresponding U.S. rates at the start of August, ness in the franc followed statistical releases the cost of short Canadian dollar positions had confirming that inflation continued to be higher become expensive. Thus professional selling of and growth lower than in Germany. Also, the the currency subsided and commercial leads and franc did not benefit, as the mark did, from lags came into better balance. Also a public continuing expectations of central bank interven- debate faded over whether economic policy tion. The National Bank, having kept its restric- should give priority to reducing unemployment tive 3 percent target for growth of central bank or dealing with inflation. The Canadian dollar Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 299 rose from the historic low of Can.$1.3368 Under these circumstances, the Canadian au- ($0,748) against the U.S. dollar reached in mid- thorities moved cautiously to take advantage of July to Can.$1.3094 ($0,764) by early August. the decline of U.S. interest rates to avoid an During the period under review, a number of outbreak of revived pressure against the currenfactors supported the Canadian currency, which, cy. Canadian interest rates at first did not decline along with the U.S. dollar, rose relative to the as quickly as U.S. rates, and by mid-October the other major currencies. Canada's current ac- interest differentials vis-a-vis the U.S. dollar count was in surplus, buoyed by a strong export were even wider than in early August. Thereafperformance. Canada's economy revived in the ter, Canadian interest rates did ease more in line third quarter, catching up for slower growth with U.S. interest rates, maintaining the wider earlier in the year. Meanwhile, inflation contin- differentials for the balance of the six-month ued to moderate, falling to below 4 percent at an period. annual rate. In addition, a change in government Against this background, the Canadian dollar at the September national elections encouraged fluctuated without clear direction against the market participants because of the new govern- U.S. dollar, declining less than other currencies. ing party's advocacy of policies to encourage On balance it declined 1 LA percent to foreign investment in Canada, to reduce govern- Can.$1.3258 ($0,754) by the end of January. The ment intervention in the economy, and to cut Canadian dollar thereby continued to appreciate government expenditures. These ideas were re- against other currencies during the period under affirmed in November when the government review, benefiting at least in part from high gave a statement to Parliament of its intended yields on Canadian assets and the currency's legislative program. relative firmness against the U.S. dollar to at- Yet market confidence in the Canadian dollar tract sizable capital inflows from abroad. was not fully restored. The public debate preced- Foreign exchange intervention by the Canadiing the election had left uncertain the priority any an authorities was aimed at smoothing out sharp government would place between lower interest movements in the currency. Total foreign currates to stimulate the economy and higher rates rency reserves fell $1.2 billion, mostly in August to fight inflation. By midwinter there was also and November, to stand at $1.5 billion at the end some doubt that the new government would be of the period. The declines primarily reflected able to implement its program of fiscal restraint. repayments of outstanding foreign exchange Moreover, large corporate transactions occa- drawings made earlier in the year on the governsionally weighed on the market for Canadian ment's credit lines with Canadian and foreign dollars. banks. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

300 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 SCALE ECONOMIES IN COMPLIANCE COSTS FOR CONSUMER PROTECTION REGULATIONS.- THE TRUTH IN LENDING AND EQUAL CREDIT OPPORTUNITY LAWS Gregory E. Elliehausen and Robert D. Kurtz—Staff, Board of Governors Prepared as a staff study in the fall of 1984 This study investigates scale economies in com- regulations do not appear to be a factor that pliance costs for Regulations Z (Truth in Lend- would lead to much greater concentration in ing) and B (Equal Credit Opportunity) at com- consumer lending at banks. mercial banks. The data are from a 1981 survey Other findings are that labor and administraof financial institutions conducted by the Federal tion account for 50 to 70 percent of total compli- Reserve Board to determine compliance costs ance costs at all levels of output and that compliassociated with consumer protection laws that ance costs increase about proportionately with are implemented by Board regulations. wage rates, suggesting that compliance activities The major finding of the study is that there are for Regulations Z and B are labor intensive. economies of scale in compliance costs for Regu- Administration accounts for a smaller share of lations Z and B at commercial banks at levels of compliance costs than labor does at moderate output up to 375,000 consumer credit accounts, and higher output levels. This result suggests beyond which there are small diseconomies of that scale economies may arise from more effiscale. At the lowest output levels, in terms of the cient use of high-cost administrative personnel at volume of consumer credit accounts, large unex- banks with larger consumer credit portfolios ploited scale economies exist, which suggest that (although other factors may offset the scale econ- Regulations Z and B impose a competitive disad- omies at high levels of output). Finally, the vantage on banks with small consumer credit analysis indicates that larger average sizes of portfolios. Scale economies decrease rapidly, accounts are associated with higher compliance however, as output increases, and they are ex- costs. Because closed-end (mortgage and conhausted at a moderate level of output. Thus, the sumer installment) accounts are generally larger costs of complying with consumer protection than open-end (credit card) accounts, the aver- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

301 age size of the account reflects the composition the consumer protection regulations may provide of banks' consumer credit portfolios. Thus, com- an incentive for banks to shift from closed-end to pliance costs may be larger for closed-end ac- open-end lending. • counts than for open-end accounts. As a result, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

302 Industrial Production Released for publication March 15 related, was widespread among products and materials. Industrial production declined an estimated 0.5 In market groupings, output of consumer percent in February, and gains during the pre- goods declined 0.6 percent in February as autoceding three months were revised downward. At motive products fell 1.8 percent. Automobiles 164.7 percent of the 1967 average, the index in were assembled at an annual rate of 8.2 million February was 2.9 percent above its level a year units following a January rate of 8.6 million. ago, although not much higher than its mid-1984 Production of home goods edged down following level. The February decline, in part weather- larger declines in preceding months, and nondu- 1979 1981 1983 1985 1979 1981 1983 1985 All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: February. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

303 1967 = 100 Percentage change from preceding month PPeerrcceennttaaggee cchhaannggee,, Grouping 1985 1984 1985 FFeebb.. 11998844 ttoo FFeebb Jan. Feb. Oct. Nov. Dec. Jan. Feb. 1985 Major market groupings Total industrial production 165.5 164.7 -.4 .2 .1 .3 -.5 2.9 Products, total 168.5 167.9 .3 .5 .4 .1 -.4 4.7 Final products 167.2 166.7 .4 .6 .5 .1 -.3 5.5 Consumer goods 162.9 161.9 .0 .6 -.1 .2 -.6 1.6 Durable 161.2 159.9 -.6 1.8 — .1 1 . 11 -.8 -1.6 Nondurable 163.5 162.7 .2 .2 .0 .3 -.5 2.8 Business equipment.. 189.5 188.8 .5 .6 .8 -.2 -.4 9.8 Defense and space... 145.9 147.0 1I . I1 .oO 11 .68 .OQ .8 13.5 Intermediate products.. 173.4 172.2 .2 -.2 .0 .2 -.7 1.9 Construction supplies 156.7 155.3 .3 -1.1 ,i -.2 -.9 -.8 Materials 160.9 159.9 -1.5 .0 -.3 .6 -.6 .3 Major industry groupings Manufacturing 167.0 166.3 -.2 .2 .2 .1 -.4 3.0 Durable .... 158.2 157.5 .0 .3 .3 .1 -.4 4.7 Nondurable. 179.7 179.2 -.5 .1 .1 .0 -.3 1.1 Mining 125.3 122.4 -4.0 1.0 -.3 .7 -2.3 -1.4 Utilities 185.5 185.6 -.2 2.3 -1.1 1.5 .1 5.2 NOTE. Indexes are seasonally adjusted. rable consumer goods declined 0.5 percent. Out- durables such as equipment parts and in nonduput of total equipment was little changed in rables such as textiles and chemicals. January and February as cutbacks in business In industry groupings, declines were wideequipment were offset by continued growth in spread in manufacturing, with an overall drop of the output of defense and space equipment. 0.4 percent in February; however, steel produc- Weakness continued in February in the produc- tion rose for the second month. Mining output tion of construction supplies. Output of materials declined more than 2 percent in February, and decreased 0.6 percent, with declines both in utilities were little changed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

304 Statements to Congress Statement by Paul A. Volcker, Chairman, Board business investment, especially for innovative, of Governors of the Federal Reserve System, high-technology capital equipment. Productivity before the Committee on the Budget, U.S. also has grown relatively strongly. Taken togeth- House of Representatives, March 6, 1985. er, those factors should bode well for our future growth potential. I am pleased to appear once again before this I am particularly encouraged by the fact that committee to discuss the economic situation and this remarkable expansion of activity has been its relationship to the budgetary choices before achieved without any significant increase in the you. I know the task that confronts you in inflation rate from the sharply reduced levels of reconciling budgetary priorities in the context of 1982 and 1983. To be sure, a number of factors a huge deficit is extremely difficult. I can shed that may not be lasting have helped to hold down little light on the choices you must make among price increases. The continuing appreciation of national security, social, and other programmatic the dollar and competition from imports have objectives. But from my vantage point, it does placed considerable downward pressure on seem clear that an adequate reduction in the prices in some manufacturing and mining indusoverall deficit must be a critical ingredient in any tries. Declines in prices of some important comsatisfactory budget plan. modities, including petroleum and a number of Last month the Federal Reserve submitted its raw materials, also have played a key role. But Semiannual report on monetary policy to the perhaps more fundamentally, increases in nomi- Congress, and my testimony to the Banking nal wages are reflecting and supporting the lower Committees at that time provided an extensive rate of inflation, and there are encouraging signs review of recent monetary developments and the that expectations of future inflation have been Federal Reserve's expectations for the perform- damped. ance of the economy in 1985. [See FEDERAL At this point, the most common forecasts RESERVE BULLETIN, vol. 71 (April 1985), pp. suggest that growth will remain strong enough in 187-99]. I have submitted copies of that earlier 1985 to produce some further declines in unemtestimony to this committee, and I shall limit my ployment, with little if any pickup in inflation. prepared remarks this morning to some summary That, in fact, is the "central tendency" of the comments on the economic setting. forecasts of members of the Federal Open Mar- As you know, we have made substantial pro- ket Committee. But we must not be lulled by gress over the past two years toward our longer- these seemingly favorable near-term prospects. run aims for the economy. Despite widespread Despite the strength indicated by the aggregate doubts about our economic prospects at the statistics and favorable near-term expectations beginning of the recovery, the expansion that for the economy as a whole, there are some large developed has been the strongest since the and unsustainable imbalances in our economy. Korean War period. Real gross national product Unless dealt with effectively, those imbalances rose almost 6 percent over the four quarters of will, in time, undercut all that has been achieved. 1984, bringing the cumulative gain in domestic The strains in agriculture, in the heavy capital output since the recession trough in late 1982 to equipment area, and in the metals industry are about 12'/2 percent. The rise in production has most visible. To some extent, the difficulties in been associated with large increases in employ- these sectors arise out of severe structural probment and a sizable decline in the unemployment lems that must be dealt with directly. But there rate. As part of that general improvement, there can be little doubt that these specific problems has been a sharp rebound in profits and a surge in have been exacerbated by pressures related to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

305 the massive deficits in the federal budget and in tions about monetary policy. In the most general our external accounts. terms, the objective of the Federal Reserve is to It is not a coincidence that the unprecedented- provide sufficient money and credit to support ly large deficits in our trade and current accounts sustainable growth in real output and employhave developed alongside the internal budget ment, while moving toward greater price stabildeficit. In the end, a government deficit must be ity. Appreciable progress was made in these financed, either internally or externally, out of directions in 1984. We will want to provide savings. We do not have now, nor are we likely enough money this year to sustain orderly to have in the future, the capacity to save enough growth in demand and output, and my earlier domestically to finance both federal deficits at or testimony reviews our plans in that respect. approaching the current size and the rising levels However, money creation cannot resolve an of investment needed to support growth and underlying imbalance between domestic saving productivity. Thus far in the expansion period, and investment. Real savings release real rewe have been able to bridge the gap by drawing sources for investment and for use of the governon a growing net inflow of foreign saving to ment, and growth in savings tends to work supplement our own. against inflation. But beyond fostering sustain- Net domestic saving—by individuals, by busi- able growth, money creation cannot release renesses, and by state and local governments— sources to meet investment and federal needs. has, in fact, increased quite rapidly over the past Rather it adds to the demands upon those refew years, amounting to about 9 percent of the sources. Indeed, should excessive monetary GNP in 1984, near the higher end of the range growth ignite inflationary fears, the effort to that has prevailed over the postwar period. Nev- encourage savings and reduce capital market ertheless, about a quarter of our net needs for pressures would be undercut. As prospects for investment and for deficit financing last year still stability are undermined, the international capihad to be met from foreign sources. So far, that tal flows on which, for the time being, we are capital has been readily available and has played dependent would be discouraged. And the implia key role in containing pressures on domestic cations for interest rates—probably sooner rathinterest rates. Even so, interest rates, as you er than later—would be adverse. The risks of know, have remained high both historically and more inflation and less growth over time would relative to current levels of inflation. Without the be increased, not reduced. net flow of savings from the rest of the world, A number of policies—with monetary and fispressures on our financial markets would have cal policies leading the list—must be blended been still greater and interest rates would have together to encourage sustained and balanced been still higher. growth. In practice, achieving an optimum blend Thanks to the capital inflow, the kinds of is seldom easy, and the precise measures to be obvious "crowding out" of housing and invest- taken can be debated. But what does seem clear ment so widely anticipated a year or two earlier now is that any satisfactory approach is depenlargely have been avoided. But other key sec- dent upon substantial cuts in our massive budgettors—particularly those that are heavily depen- ary deficit. And, within the range of practicality, dent on export markets or that must compete the larger and sooner the cuts, the better. To with imports—are being "crowded." Looking have a real impact this year on markets and on abroad, growth in many industrialized countries the economy the actions must be large enough remains relatively sluggish and the depreciation and credible enough to have an impact on expecof foreign currencies vis-a-vis the dollar seems to tations and confidence, even if the measures be one factor inhibiting the pursuit of more taken will be phased in over time. expansionary policies by our major trading part- I am sensitive to the practical and political ners, feeding back on our own export prospects. difficulties of the decisions that must be made. I At the same time, the stability of our capital realize that there is no natural constituency for markets has become hostage to a continuing net specific budgetary cuts or revenue measures. inflow of international funds. But I also know that we are, at present, on a In this context, let me make a few observa- course that cannot be sustained indefinitely. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

306 Federal Reserve Bulletin • May 1985 The practical question is whether we act now and dislocation to be a catalyst for action. But to build on the progress of the past and reinforce then it would be too late, and the longer conprospects for future growth and stability or structive action is delayed, the greater the risks whether, as so often in the past, we wait for crisis and the larger the task. • Statement by Emanuel Melichar, Senior Econo- nearly double that for all loans at agricultural mist, Division of Research and Statistics, Board banks; and that rate, in turn, was about double of Governors of the Federal Reserve System, the rate of charge-offs of all loans at other small before the Committee on Agriculture, Nutrition, banks. and Forestry, U.S. Senate, March 20, 1985.1 Net charge-offs of farm production loans totaled about $900 million in 1984, of which about After experiencing a major boom during the past $240 million was reported by banks in California. decade, the farm sector is in the sixth year of a period of lower and relatively stagnant income, with poor prospects for near-term improvement. DELINQUENT FARM LOANS AT BANKS Reduced income flows and the consequent decline in land prices, plus sharply higher interest Banks have been reporting amounts of delinrates, have in this period produced severe finan- quent farm loans since December 1982; however, cial stress for those farmers who had borrowed the data are incomplete because only relatively heavily to expand their enterprises during the large banks (assets of $100 million or more) concluding years of the boom. The progressive report nonaccrual and renegotiated farm loans. erosion of the equity of these farmers, who owe These large banks account for only 31 percent of most of the total farm debt, has been increasing farm production loans at banks nationally, and the incidence of problem farm loans at banks and for much smaller percentages in highly rural other farm lenders. states. Data are available on farm loans that are past due but still accruing interest, which must be CHARGE-OFFS OF FARM LOANS AT BANKS reported by most banks engaged in farm lending. At year-end, these past-due loans represented Net charge-offs of farm production loans, an item 3.8 percent of farm loans outstanding, a level that added to bank reports last year, in 1984 were has not changed much since 1982. During this equal to 2.2 percent of such farm loans outstand- period, however, the proportion of farm loans ing at year-end. Relative farm-loan charge-offs past due fell in some states, such as California, were highest by far in California; charge-offs in but rose somewhat in most midwestern states. the other 49 states averaged 1.8 percent of loans. At large banks required to report all categories As shown in table 1, other states with relatively of delinquent farm loans, the total (past due, high farm-loan charge-offs were in the western nonaccrual, and renegotiated "troubled" debt) Corn Belt, the Great Plains, and the Southeast. has remained near 10 percent of outstanding As data discussed later will indicate, the rela- loans over the past two years. Farm lending at tive rate of farm-loan charge-offs at all banks was these banks, however, is disproportionately concentrated in California, where large banks make most farm loans. At year-end, the total delinquent farm production loans at large California 1. All data for 1984 are preliminary estimates based on reports available on March 8, 1985, when more than 99 banks averaged 13 percent of loans outstanding, percent of banks had reported, but regular editing was not compared with 9 percent at large banks in other complete. Special editing of some items was performed in states. The nonaccrual component averaged 8 compiling this report. The attachments to this statement are available on request percent of loans outstanding in California, comfrom the Economic Activity Section, Division of Research pared with just under 5 percent in other states. and Statistics, Board of Governors of the Federal Reserve But these relatively high numbers of delinquen- System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 307 cies on farm loans did not pose a serious threat to nonaccrual loans rose most rapidly during the the large California banks because farm loans past two years, especially at the banks most represented only about 4 percent of total loans at heavily concentrated in farm lending. At banks these banks (the same proportion as at all banks with a farm-loan ratio of more than 50 percent, nationally). for example, nonaccrual loans rose from an Though small banks have not been required to average of about 0.5 percent of total loans in report nonaccrual farm loans, they do report December 1982 to about 2.5 percent of total their total nonaccrual loans. From these data, it loans two years later. appears that about 3 percent of the farm produc- Total loan charge-offs, for which there are data tion loans at small banks may be in the nonac- over a longer period, have risen substantially at crual category. When this figure is averaged with agricultural banks since 1980. At 1.2 percent of the 5.8 percent of loans in nonaccrual status at year-end loans, net charge-ofFs at agricultural the larger banks that account for 31 percent of banks were double the relative level at other farm loans outstanding, about 3.8 percent of all small banks—the opposite of the situation that farm production loans are estimated to be in the had prevailed for many years before 1983. At the nonaccrual category. more heavily agricultural banks, average net Thus, about 5 percent, or $2 billion, of all farm charge-offs were still higher—between 1.5 and production loans were nonperforming at year- 2.0 percent of loans outstanding. end. Another 2.6 percent, or about $1 billion, Net income at agricultural banks was sharply was reported as past due 30 to 89 days. Thus reduced by their loan losses. However, these about $3 billion of farm production loans at banks banks had been relatively profitable, and in 1984 were delinquent. their return to equity still averaged 9 percent. But in each year since 1980, an increased proportion of agricultural banks experienced loan losses EXPERIENCE OF AGRICULTURAL BANKS larger than could be covered by annual net earnings. In 1984, 16 percent of agricultural Although farm loans constitute only 4 percent of banks made loan-loss provisions that exceeded all loans outstanding at banks, many small banks 2.5 percent of year-end loans outstanding. Mosthave a much higher farm-loan ratio. The "un- ly because of such adverse loan experience, 12 weighted" average of the farm-loan ratios at all percent of agricultural banks reported negative banks is now about 17 percent, and about 5,000 net income for 1984, compared with an average "agricultural" banks now have a ratio that ex- of only 1 percent during the 1970s. On the other ceeds that average. The financial experience of hand, 32 percent of agricultural banks needed these banks has recently been dominated by the loan-loss provisions equal to less than 0.4 perrise in farm-loan delinquencies. cent of outstanding loans in 1984, and 59 percent Two years ago, loan delinquencies were still needed provisions of less than 1.0 percent. Such lower at agricultural banks than at other small relatively low losses enabled nearly a fifth of all banks (banks with assets of less than $500 million agricultural banks to report earning more than 15 and a farm-loan ratio that is below average). At percent on equity in 1984, and more than half the latter banks, relative delinquencies were earned more than 10 percent. peaking as the business recession was ending, Because most agricultural banks maintained while delinquencies at agricultural banks were positive earnings while their growth was slowed rising from a lower level. By the end of 1983, by the weak farm economy, the ratio of capital to delinquent loans at agricultural banks reached assets at these banks rose slightly further in 1984, the same relative level as the recession peak at to an average of 9.5 percent. The capital ratio at other small banks. A year later, at the end of agricultural banks now averages a full percentage 1984, delinquent loans at agricultural banks had point above that at other small banks. Furtherrisen further, to 6.2 percent of total loans, well more, average capital ratios are highest at the above the average of 4.7 percent at other small most heavily agricultural banks, at which they banks. also rose in spite of increased farm-loan losses. Of the four categories of delinquent loans, The favorable capital position of most agricul- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

308 Federal Reserve Bulletin • May 1985 tural banks provides a valuable, but limited, other small banks troubled by problem loans cushion for coping with adverse loan experience. over the past two years can be contrasted. In If relatively large loan losses occur in a short December 1982, more of the small nonagriculturperiod of time and thus cannot be covered from al banks than of the agricultural banks had relacurrent earnings, capital can be depleted rapidly. tively high proportions of delinquent loans. Over At agricultural banks, loans average about 50 the next two years, the situation among nonagripercent of assets and capital about 10 percent of cultural banks changed little while that at the assets; therefore, loan losses equal to about 20 agricultural banks deteriorated until, by Decempercent of outstanding loans would, on average, ber 1984, it appeared somewhat worse than at the deplete all capital. other banks. During the past two years, banks that have A more vulnerable subgroup of the banks failed have come predominately from the group discussed above consists of the banks at which that had earlier reported levels of delinquent nonperforming loans alone exceed total capital. loans that exceeded total capital. The number of Farm loans figure more prominently at these such banks rose about one-third during 1984, banks, averaging 15 percent of total loans. And, to more than 600 banks at year-end, or 4 percent whereas the number of small nonagricultural of all banks. There were significant increases in banks in this predicament changed little over the the number of such banks in several highly last two years, the number of agricultural banks agricultural states: yet, in most of these states— with delinquent loans equal to (approximately) or Iowa, Kansas, Minnesota, Missouri, Nebraska, greater than capital more than tripled over two North Dakota, and Wisconsin—the proportion of years—but is still smaller than the number of banks in this condition at the end of 1984 was still nonagricultural banks in the same position. only roughly equal to the national average of 4 In 1983, only 7 of the 44 insured commercial percent. Furthermore, farm loans at such banks banks that failed, or 16 percent, were agricultural nationally averaged only 7 percent of total loans banks. Last year, 32 of the 78 failures, or 41 at the banks. In several states with a relatively percent, were agricultural banks. Still, farm high number of these potentially vulnerable loans constituted only 10 percent of total loans at banks—California, Colorado, Florida, Louisi- the banks that failed in 1984, and totaled only ana, Oklahoma, Tennessee, and Texas—their $199 million at these banks at the beginning of low average farm-loan ratio indicates that farm that year. Growth last year in the number of loan difficulties play, on average, a minor role in agricultural banks with a relatively high level of loan problems at these banks. nonperforming loans may portend a further in- The relative proportions of agricultural and crease in failures of agricultural banks. • Statement by Henry C. Wallich, Member, Board CAUSES OF THE EXTERNAL DEFICITS of Governors of the Federal Reserve System, before the Subcommittee on International Eco- It is customary to analyze changes in the external nomic Policy and Trade of the Committee on deficits by focusing on proximate causes, such as Foreign Affairs, U.S. House of Representatives, the growth of economic activity at home and March 22, 1985. abroad and changes in exchange rates. The cyclical behavior of the U.S. and foreign economies I welcome this opportunity to discuss the impor- has been an important factor contributing to both tant issues relating to U.S. trade and current the timing and the widening of the U.S. external account deficits. I will begin with some thoughts deficits. The U.S. recession held down the on the basic factors at work, to provide a frame- growth of imports from the fourth quarter of 1980 work within which to consider the desirability of until the fourth quarter of 1982 and, thus, devarious possible actions in terms of their contri- layed the rise in our external deficits in spite of butions to noninflationary economic growth as an appreciating dollar. Since 1982, we have enwell as to reductions in our external deficits. joyed a strong recovery, with output—measured Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 309 by real gross national product (GNP)—rising addition, one can point perhaps more broadly to about HVz percent from the fourth quarter of the vigor and dynamism of the U.S. economy 1982 to the fourth quarter of 1984. Aggregate and its high profitability. But one cannot find demand—measured by all U.S. purchases of much direct evidence in the statistics that intergoods and services, both domestic and foreign— national flows, such as purchases of U.S. equihas increased even faster, about 15 percent dur- ties or direct foreign investment, have been of a ing this period, with some of this demand spilling nature that might be specially responsive to such over abroad. A significant part of the deteriora- incentives. Finally, one can point to the political tion in our external accounts has therefore result- and social, as well as economic, stability of the ed from the strong growth in the U.S. economy. United States, which has made this country a In contrast, the growth of demand for U.S. relatively secure haven in which savers may exports had been quite weak. In major foreign want to keep their wealth. industrial countries, real GNP increased only History provides some support to this notion about 5 percent from the end of 1982 to the end of that capital movements can be a dominant influ- 1984, after virtually no growth on average over ence in the determination of the dollar exchange the preceding two years. The slight support that rate. Evidence covering the periods 1919-39 and this growth provided for U.S. exports was offset the postwar period indicates that an expansion in to a large extent by the external financing prob- the United States relative to the rest of the lems of some developing countries, especially world, while weakening the current account, our neighbors in Latin America. As a result, the strengthened the capital account sufficiently to value of U.S. exports in 1984 was little changed improve the overall balance of payments by from 1980. The Board staff estimates that about increasing desires to move funds into the United one-third of the increase in the U.S. current States under the old regime of fixed exchange account deficit from the end of 1980 to the end of rates and by causing the dollar to appreciate 1984, after abstracting from a decline in imports under the present regime of flexible rates. of oil, can be attributed to the cyclical expansion While the strong dollar and our large external of the U.S. economy relative to that of our deficits reflect, in part, our improved macroecotrading partners. nomic performance and the greater return on A somewhat larger portion can be related to financial investment in this country, in a more the very substantial appreciation of the dollar. fundamental sense they are related to the budget On a weighted-average basis against the curren- deficit. When the U.S. government runs a deficies of other major industrial countries, the dol- cit, other sectors must, on balance, finance it. lar has appreciated more than 70 percent since Private domestic residents and state and local the fourth quarter of 1980, when our current governments through their savings have providaccount was showing a small surplus. Some of ed part of the financing, not just of their own the appreciation has reflected and contributed to investment, but of the government's deficit as our relatively good inflation performance, but well. The net inflow of savings from abroad— even in real terms—adjusted for changes in con- which is the counterpart of the current account sumer price levels in the United States and deficit—has (directly or indirectly) provided the abroad—the weighted average value of the dollar remainder of the financing. This capital inflow is now nearly 60 percent higher than it was at the has enabled us to have lower interest rates than end of 1980, and roughly 45 percent higher than we would have had otherwise, given our budget its average for the entire floating-rate period. deficit. I think it is fair to say that no one fully understands the factors that have led to the enormous appreciation of the dollar; certainly no CONSEQUENCES OF THE DEFICITS AND THE one anticipated it. Nevertheless, it seems clear STRONG DOLLAR that several forces have been at work at one time or another. A rise in U.S. interest rates relative The goal of macroeconomic policy is to provide to those abroad can explain a good part of the an environment for sustainable noninflationary dollar's rise, particularly in its early phases. In economic growth. The strong dollar and the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin • May 1985 external deficits have contributed to that envi- strong dollar, while losses of jobs from these ronment. The external deficits reflect the growth sources would have been less, so probably would and relative dynamism of the American economy have been the creation of new jobs. that have attracted a flow of funds from abroad. From these perspectives, the effects of the The growing net capital inflow—now supple- strong dollar and the external deficits are gratifymenting net domestic savings of individuals, ing. However, strains and distortions are evibusinesses, and state and local governments by dent, for instance, in pressures on our farmers, nearly a third—has been a critically important miners, and producers of capital equipment. All factor in enabling us to finance both rising invest- sectors, clearly, have not shared equally in our ment and the enormous federal deficit at lower expansion. rates of interest than otherwise would have pre- You have asked for my best assessment of the vailed. Of course, it is our rising private invest- cumulative effects of such deficits upon the U.S. ment that would be crowded out by higher inter- and global economies, and what consequences est rates in the absence of the net foreign capital can be expected if annual trade deficits of the inflow. The strength of the dollar and the ready current magnitude should continue to be inavailability of goods from abroad have also been curred. I do not believe that the budgetary and potent factors restraining price increases in the trade deficits of the magnitude we are running United States. are sustainable forever, even in a framework of At the same time, the strength of the U.S. growth and prosperity. They imply a dependence economy, acting through our trade and current on foreign borrowing by the United States that, account balances, has provided a major and left unchecked, will sooner or later undermine needed stimulus to the rest of the world. The the confidence in our economy essential to a support we have provided to the exports, partic- strong currency and prospects for lower interest ularly of developing countries, has been a critical rates. element in the difficult process of economic If the external deficits continue, the United adjustment that they have embarked on. Exports States will become an international debtor counto the United States have helped to sustain the try on a rapidly rising scale. Our longstanding economies of our industrial trading partners, as position as an international creditor has been a well, thereby contributing to a healthier world major support to our balance of payments so far. economy. Thanks to the very productive character of some Some have argued that the strong dollar has of our foreign assets, the United States had a cost the U.S. economy something like 2 million surplus of investment income averaging more jobs since 1980. But it is difficult to conclude that than $30 billion annually during 1979-81. This overall U.S. employment and output have been surplus has meant that we have been able to unduly restrained during the past two years by tolerate a sizable trade deficit without incurring a the large trade deficit and, more fundamentally, deficit in the current account, which combines by the appreciation of the dollar. Employment services and trade. This advantage is rapidly has increased by 7 million people since the end of being eroded; indeed, our net investment income 1982. It would be misleading to suggest that last fell below $20 billion in 1984. If these developyear's trade deficit of $107 billion could have ments are not reversed, the United States may been simply transformed into an additional $107 soon find itself in a position where it would have billion of domestic output. Any attempt to de- to earn a surplus in the trade balance to cover a mand that much more output from the domestic deficit on investment income. The longer the economy—equivalent to about 3 percent of situation continues, the more the value of the GNP—would likely have produced higher inter- dollar would have to fall in the long run to est rates, run into capacity constraints, and en- generate such a trade surplus. countered structural rigidities in the labor mar- As a final consequence, the exchange rate ket. The result would not have been 3 percent pressures and trade imbalances we have been more output but a significantly less favorable experiencing are generating economic and politi- U.S. price performance. In the absence of the cal pressures toward protection. It is essential policies that have led to the capital inflow and the that these pressures be resisted. This brings me Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 311 to the specific questions you have asked me to being reversed. A situation might result, resemaddress this morning. bling that after the tariffs and other restrictions adopted around the world in the 1930s greatly reduced world trade. EVALUATION OF PROPOSALS Turning to specific proposals, I would like to focus on plans for a temporary import surcharge. You have asked me to evaluate various policy Those proposals are sometimes coupled with approaches that the committee is considering. other measures to reduce our budget deficit. One general approach—suggested by the ques- Such proposals are offered as a relatively paintions on foreign investment and import mea- less means of raising government revenue while sures—is increased protection against imports. simultaneously addressing the trade deficit. This would be a gross mistake for many reasons. One attraction of an import surcharge is that it First, if protectionist measures actually had the seems to tax foreign exporters as well as domeseffect of appreciably reducing some imports, tic residents. But it is also clear that any benefits, they would presumably be reflected, other things either for our current account balance or for the equal, in still further upward pressures on the budget, would be temporary. Lasting effects dollar. This would intensify the problems experi- cannot come from a temporary surcharge. But a enced by exporters, farmers, and other groups surcharge might make other budget measures that are not protected. Second, quotes, new more difficult to enact. In any event, the surtariffs, or import surcharges all act directly to charge would act directly to raise prices, reduce raise prices, and the problem would not be real income, lower employment, and perhaps temporary if the effect would be to refuel infla- raise the value of the dollar. tionary expectations—-just at a time when so If this tax is so attractive to the United States, much progress has been made in changing that it would certainly be attractive to others as well. psychology. Third, protectionism would be par- Most countries have budget deficits larger than ticularly troublesome from the point of view of they would like and, with high unemployment, the developing countries. We have encouraged would not be averse to reducing imports. If the developing countries to adopt sound adjustment surcharge approach is, in effect, legitimized by policies that will enable them to service their the United States, other countries might follow debts, to enhance over time their productive our example. That would eliminate any net benecapacity, and to grow. Success is dependent fits and also have destructive implications for upon their ability to increase exports, and as world trade. their exports grow they will also import from the At a more fundamental level, it does not seem United States and other industrialized countries. consistent to prepare actions to reduce our trade But that success will be denied if the United deficit and at the same time welcome the associ- States and other industrial countries protect their ated capital inflows from abroad. Unless we own markets from fair competition by develop- reduce our budget deficit, success in improving ing countries. our trade balance, and thus reducing the capital In some respects, the situation of the develop- inflow, will intensify pressures on our domestic ing country debtors today resembles that of financial markets, jeopardizing such interest-sen- Germany after World War I. Heavy demands sitive sectors of the economy as housing and were being made upon Germany for payment of investment. war reparations. At the same time, the countries In essence, a lasting solution to the problem of receiving these reparations protected themselves our external imbalance rests on simultaneously against the imports from Germany, which were restoring internal financial equilibrium. There is the necessary means by which Germany might simply little choice but to take prompt action to have paid. Default and financial restrictions were reduce our budget deficit over time. Approaches the result. that obscure that basic need will, in the end, not Finally, protectionist measures would almost succeed. certainly provoke retaliation. The worldwide This applies also to capital controls—such as trend toward free trade would be in danger of payments restrictions, taxes, or surcharges on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin • May 1985 incoming foreign investment dollars. If these of monetary and fiscal policies in the United controls were effective, they would only shift the States and abroad during the past four or five impact of the nation's budget problems by push- years, it is hard to believe that the Bretton ing up interest rates and most likely the value of Woods system of pegged exchange rates could the dollar. However, such controls are not likely have survived. Greater stability of exchange to be effective, given the integration of domestic rates, which is greatly to be desired, must be financial markets with the Euromarket and inter- founded, in the first place, on greater convernational financial markets generally. Participants gence of economic performance in all countries, in financial markets are sophisticated enough to and on policies capable of sustaining that converfind ways around any controls, as they have gence. done in the past. Imposing capital controls in Finally, you raised the question of whether the these circumstances would only serve to raise dollar is overvalued. It is sometimes argued that costs and undermine the efficiency of our finan- whatever exchange rate prevails in the market at cial markets and could jeopardize the role of the any moment balances demand and supply and U.S. dollar as a reserve currency. The experi- therefore cannot be over- or undervalued. In my ence of the United States with the interest equal- view, however, it is more meaningful to interpret ization tax and with the so-called "Voluntary this question as referring to the effect of the Credit Restraint Program" confirms this judg- exchange rate on key economic magnitudes, ment. such as the trade balance or the current account, You raised the possibility of a surcharge on oil over the medium term. It seems evident that the imports. Imposing a surcharge on oil imports is recent value of the dollar has been clearly inconsimilar to increasing taxes on oil consumption. sistent with even very approximate balance in This tax should be judged on its merit as an either the trade or the current account. In this energy policy measure. A smaller tax on oil sense, therefore, the dollar's current value is not consumption could yield the same reductions in sustainable over time. the budget and trade deficits. Given this interpretation of our situation, the You have asked, as well, whether the floating right policy prescription for dealing with the exchange rate system itself may have contribut- trade deficit must be to deal with the circumed to our problems. Swings in exchange rates stance that is at the root of the high dollar. This over the past decade, to be sure, have been brings me back to the need to reduce the strucextremely wide. They have far exceeded move- tural deficit in our federal budget. Such action, of ments needed to establish or restore equilibrium course, would not cure all the diverse problems in international trade and payments. Many of encountered in the various sectors of our econothese swings must be related mainly to changes my or the world economy. But a substantial in the relative outlooks for interest rates, infla- adjustment of the budget toward balance is a tion, and real growth in different countries. A necessary first step. It would, other things equal, good part of the changes in relative economic lead to declines in real interest rates, a depreciaoutlooks, in turn, can be related to changes in tion of the dollar in exchange markets, and (with monetary and fiscal policies. Given the stances some lag) a reduction in the external deficits. • Statement by Paul A. Volcker, Chairman, Board tions to reform the federal regulatory structure of Governors of the Federal Reserve System, for financial institutions contained in the Report before the Subcommittee on Commerce, Con- of the Task Group on Regulation of Financial sumer, and Monetary Affairs, of the Committee Services, chaired by Vice President Bush. on Government Operations, U.S. House of Rep- I want to state clearly at the outset that we at resentatives, March 27, 1985. the Federal Reserve Board support the Task Group recommendations when viewed as a com- I appreciate the opportunity to appear before this prehensive and interrelated package. subcommittee to review with you recommenda- Obviously, other approaches could have been Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 313 taken, and a number were considered. The re- under existing law or differing views of how the port, as you explicitly recognized, Mr. Chair- financial system should evolve. In some inman, in your letter to me requesting this testimo- stances, a clear locus of responsibility for newly ny, involves "trade-offs" among competing emerging institutions or practices is not clear. objectives and valid concerns of regulatory poli- At the same time, I must emphasize as strongcy. Some of those concerns, perhaps inevitably, ly as I can that the present sense of disarray does were weighed differently by different members of not arise primarily as a result of jurisdictional the Task Group. Reaching an agreed approach questions. Rather, in my judgment, it grows was a difficult process, and necessarily involved mainly out of the difficulties for any agency in a degree of complexity in the specific proposals. interpreting and carrying out policies set out in But I am satisfied that the net result would be existing substantive law. That body of law was both greater simplification and, in some areas, developed in a quite different setting many years greater coherence in the regulatory and supervi- ago, and markets and institutions have meansory processes. Other approaches reviewed by while been transformed by economic and technothe Task Group could not achieve as much. logical change. Within the general framework of the present The financial system is adapting, as it must. proposal, congressional debate and consider- But those adaptations have often not been guided ation may point to the need for modification. But by clear expressions of public policy enunciated certain basic elements of the proposed approach, by the Congress in the light of changing circumin my judgment, should not be undermined. stances. As things now stand, the pressures for You have requested that I be explicit about change are reflected in, and potentially distorted those areas that are of critical importance to the by, exploitation of perceived loopholes, reinter- Federal Reserve or otherwise, in which even pretation of existing laws by regulators and the seemingly small changes would alter the desired courts, and actions taken by states with little or balance and be "fatal" to our continuing en- no consideration of the implications for the finandorsement. I will address those points as well as cial system generally. These questions about note some areas where we perceive possible banking law and congressional intent need urproblems in implementation that need to be gently to be resolved by fresh expressions of explored more fully in the legislative process. substantive law. They will not be resolved by changing regulatory structure, procedures, or bureaucratic jurisdiction. Instead, it is those substantive questions that breed the appearance of THE REGULATORY ENVIRONMENT regulatory conflict and inconsistency. Consequently, I would again urge the Congress to Reform of the federal regulatory structure for proceed as expeditiously as possible to deal with banking institutions is, as you are aware, not a needed changes in substantive law, and to connew issue. Through the years there have been sider administrative structure in that light, rather many proposals for change, yet the current struc- than the reverse. ture has been in place essentially unchanged for a The problem becomes steadily more acute long time. That history suggests that the present with the passage of time. Banks and bank holding system has responded fairly effectively to con- companies, and thrifts and their service corporatinuing and diverse needs. But I share the widen- tions and holding companies, are expanding ining perception that the time has come for change. terstate and into new product lines—including The overlapping responsibilities among the bank- investment banking, real estate development, ing, thrift, and other agencies at a time of rapid and insurance activities—whenever and wherevtechnological and institutional change in the fi- er they can find room through new interpretanancial world has been reflected in increased tions of federal law or new state law. Nonbank uncertainties both among those regulated and the entities—securities firms, insurance companies, regulators. There have been inconsistencies in and commercial and retail organizations—are regulatory rulings or approaches by different making inroads, where they can, into the banks' agencies, flowing from differing responsibilities traditional franchise in deposit taking and pay- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin • May 1985 ments system. In the process, long-established pects for growth and stability in the economy as policies set by the Congress are breaking down— a whole must be premised on a strong and stable the separation of banking and commerce and of financial system. commercial banking and investment banking, as In recognition of that fact, the federal governwell as statutory limitations on interstate branch- ment has long provided a strong "safety net" for ing. Confusion abounds. Equity is lost. depository institutions, reflected primarily in the My point is not that all change in these direc- assistance available at times of need from the tions is necessarily bad. On the contrary, in some Federal Reserve, the Federal Home Loan Bank areas the process of change should be facilitated Board (FHLBB), the Federal Deposit Insurance rather than forced into unnatural channels, with Corporation (FDIC), and the Federal Savings full consideration of the implications for safety and Loan Insurance Corporation (FSLIC). And and soundness, competition, conflicts of inter- that "safety net" is logically paralleled by a est, and other fundamental continuing consider- system of supervision and regulation designed to ations of public policy. keep risks manageable. It would make little sense to move ahead on At the same time, the regulatory and supervithe question of regulatory structure without first sory apparatus is designed to achieve other conresolving these underlying substantive issues. tinuing objectives. These objectives include pro- The entire complex of issues—summed up in tection from conflicts of interest, fraud, and "nonbank banks," "nonthrift thrifts," the rela- other abuses, encouragement of competition and tionship between state and federal banking pow- avoidance of excessive concentrations of finaners, expanded powers for bank holding compa- cial power, and promotion of certain social obnies, and interstate banking—should be jectives, such as consumer protection and, tradiconsidered and decided as quickly as possible. I tionally, access to mortgage credit. know that many of these issues still are contro- These objectives have spawned a variety of versial within the affected industries. But I also federal agencies and approaches, and the responknow that no administrative structure can be sibilities are shared between the federal and the expected to work well without a fresh sense of state governments. Legislation at the federal and direction from the Congress as to these basic the state levels can set out in relatively broad issues. terms the boundaries between acceptable and unacceptable behavior, and the responsibilities of different agencies. But substantial elements of discretion by those administering the laws are THE GOALS OF FINANCIAL REGULATION inherent in the process. Regulations issued by those agencies elabo- Government regulation of the financial system, rate the general principles enunciated by law in in general, and of depository institutions, in more detailed form, and, in effect, amplify and particular—both commercial banks and thrifts— clarify the public policies set out by the Conhas been intended to serve a variety of objec- gress. Supervision and examination is a process tives. The most prominent among these is com- by which government agencies seek to assure, on monly referred to as "safety and soundness." a case-by-case basis, appropriate compliance That goal is directly related to protecting individ- with relevant laws and regulation, involving the ual depositors but also has profound implications application of professional expertise, judgment, for the operation of the financial system and the and discretion. One technique of supervision and economy as a whole. regulation may be to encourage or require finan- Commercial banks, in particular, are custodi- cial disclosures, seeking by that method to proans of the largest share of the money supply, tect the public and to encourage natural market liquid assets, and the payments system. The disciplines on financial institutions and other participants in financial markets. stability of one part of the banking system rests increasingly on the soundness of the whole as the As with any complex set of objectives, specific interrelationships among institutions become situations often arise in which the goals of finaneven more complex. In the last analysis, pros- cial regulation are in conflict, and there is a need Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 315 to choose or balance between the attainment of have come to closely resemble banks in their one and the others in greater or lesser degree. powers and functions. Moreover, the weights society places on these Third, the question of the appropriate degree goals may change over time. Finally, the specific of coordination with related areas of public politechniques used to attain these goals may need to cy can arise in several guises. For instance, any be modified over time because of changes in Secretary of the Treasury, in the light of his financial conditions or practices. broad responsibilities as the chief financial offi- All of this is the backdrop to any consideration cer of an administration, will have a continuing of reform of the administrative apparatus. None interest in the functioning of financial markets of it suggests that any simple formula provides an and institutions, in the soundness of the insurall-encompassing answer. What we need is a ance funds, and in the general direction of regulaworkable balance, adequately reflecting the pub- tory policy. That interest can be and is expressed lic priorities involved. through the administration's role in the legislative process. In the present system, it also has a tangible reflection in the location of the Comptroller of the Currency within the Treasury, in SOME GENERAL CONSIDERATIONS IN the Secretary's participation in the Depository MODIFYING THE REGULATORY STRUCTURE Institutions Deregulation Committee, and in more informal consultative arrangements. In approaching the particular issues of adminis- Fourth, even more immediate are the concerns trative structure, several potentially conflicting of a central bank. By law and custom, here and in considerations need to be taken into account. other industrialized countries, the central bank is First, the regulatory and supervisory structure and must be concerned about the stability and should encourage a high degree of continuity, functioning of the financial system as a whole consistency, independence, and professionalism. and the banking system in particular. Indeed, That points toward an "arms-length" relation- this was the primary concern in establishing the ship to the regulated industries and to a high Federal Reserve, and the Federal Reserve has degree of insulation from narrow political pres- always had a substantial presence in both the sures, particularly in the quasijudicial "case- regulation and the supervision of banking instituwork" of examinations and supervision. But it is tions. In fact, the Congress has substantially also true that regulation and supervision must be increased the Federal Reserve's regulatory and alert and responsive to the legitimate needs of supervisory responsibilities over the years. the affected industries—we need a strong and Beyond the specifics of legislation, I also becompetitive banking and financial system—and lieve it apparent that the Congress and the public to the basic policies enunciated by our elected at large have looked to the Federal Reserve to representatives in the Congress. take a lead role in anticipating and in dealing with Second, the regulatory and supervisory proc- financial problems that impact the financial sysess should be as simple and cohesive as possi- tem as a whole. In the light of our responsibilities ble—an objective emphasized by the Bush Task for monetary policy and as lender of last resort, it Group in the light of the sheer mass of regulation is hard for me to see how it could be otherwise. and the layers of overlapping and sometimes The obvious and essential corollary is that the conflicting authority that have developed over Federal Reserve must have enough involvement time. But simplicity pursued singlemindedly im- in the ongoing regulatory and supervisory effort plies a degree of consolidation that may conflict to provide it with the knowledge, the expertise, with a desirable element of checks and balances and the tools necessary to discharge those reand experimentation. One issue in this respect is sponsibilities. the appropriate role for the state regulatory au- We believe that the Task Group proposals thorities within the context of the "dual banking adequately recognize those fundamental consystem." Another issue is the extent to which cerns. Conceptually, those concerns could be conditions still justify separate regulatory and met by other arrangements, some of them potensupervisory treatment for thrift institutions that tially more desirable from our perspective. At Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin • May 1985 the same time, a basically different approach provision of needed liquidity—to counter threats would raise concerns from other perspectives. to systemic stability and confidence implicit in So long as the provisions bearing on our ability to the problems of the Continental Illinois Bank, of discharge our responsibilities remain as outlined the agricultural sector, and of the state-charin the Task Group proposals, we are satisfied tered, privately insured savings and loans in the that the Federal Reserve will be able to meet its state of Ohio. More broadly, management of the responsibilities effectively. international debt problem has had clear systemic implications. Each of these problems had different causes and different implications for the financial markets and the economy. Each prob- THE FEDERAL RESERVE AND FINANCIAL lem required a response from the central bank. REGULATION1 And, unless contained, each could have had implications for monetary policy. In light of the critical importance of the point, it While the need for a close familiarity with the may be worth amplifying the interconnection of operations of banking institutions and for aderesponsibilities for monetary policy and financial quate authority is dramatically important during regulation and supervision. Both, at their roots, times of financial distress, the need is ongoing. are concerned with a stable, smoothly function- We have a natural interest in encouraging a ing financial system. More specifically, the bank- strong banking structure and a payments system ing system and other depository institutions pro- on a continuing basis to minimize the possibility vide the critical mechanism for transmitting of crises and to maintain the effectiveness of monetary policy impulses to the economy, and monetary policy. While that general goal can be those impulses work more broadly through finan- and is shared by others, I doubt that, without a cial markets. Ideally, that system will have the strong ongoing Federal Reserve voice in strength, the resiliency, and the competitiveness the evolution of the system, these concerns to adapt to changes in economic conditions and will be appropriately balanced with other objecmonetary policy while maintaining the continuity tives. in services and the confidence of the public. If Policies such as those affecting capital and there are weak spots or fragilities in the system, liquidity standards, the "toughness" of examinathey could well bear upon monetary policy deci- tions, loan-loss provisioning, and information sions. The Federal Reserve must be in a position disclosure can have great significance for the to sense emerging vulnerabilities. effectiveness of monetary policy as well as for Conversely, the Federal Reserve has inherent the stability of the entire financial system. Conpowers to deal with dislocations in the banking flicts will inevitably arise in these areas as they system, through the discount window and other- are approached from different perspectives. wise. Effective exercise of those powers implies Those conflicts need to be resolved, and I beongoing knowledge of the condition of the finan- lieve the perspective of the central bank is one cial system, and requires expertise, manpower, essential part of a satisfactory resolution. and experience to deal with points of trouble. In sum, to be effective in carrying out its The actions taken—for instance, through the interrelated responsibilities for monetary policy discount window—in turn, may have market and and the stability of the banking and financial monetary effects, which need to be taken into system, the Federal Reserve needs to maintain a account in the conduct of monetary policy. strong position as a "hands-on" regulator and a The points are not theoretical. Within the past supervisor, not just as an adviser or a bystander. year the Federal Reserve has necessarily had to Specifically, we must have a sufficient level of consider appropriate responses—including the supervisory and regulatory authority so that we can accomplish the following: (1) retain a wellinformed, able, and motivated staff in these areas, able to understand markets and institu- 1. The attachments to this statement are available on tions; (2) act forcefully to deal with emerging request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. problems; and (3) play an active role in shaping Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 317 public policy toward banking and financial regu- presence is maintained in all parts of the country. lation. THE TASK GROUP RECOMMENDATIONS CURRENT ROLE OF THE FEDERAL RESERVE The Task Group recommendations for regulation of banking institutions would, as I will describe The Congress has long recognized the need for in a moment, change some of the supervisory the Federal Reserve to maintain an active role in and regulatory responsibilities of the Federal bank supervision and regulation. These criteria Reserve, decreasing them in some areas while are broadly satisfied by present arrangements. strengthening them in others. Taken as a whole, Our specific jurisdictions are as the primary the recommendations, at least at a conceptual federal regulator of state member banks, bank level, would continue to satisfy our needs as a holding companies, and certain activities of for- central bank, and on balance should lead to an eign banks operating in the United States and of effective and somewhat simpler supervisory U.S. banks operating abroad. While the Comp- structure as a whole. troller is the primary regulator and the supervisor The recommendations would centralize in the of national banks, the Board has residual super- Federal Reserve, for the first time, all federal visory jurisdiction by virtue of the banks' mem- supervision and regulation of federally insured, bership in the Federal Reserve System. state-chartered banks. At present, the Board's With the growing numbers and activities of direct responsibilities for state-chartered banks holding companies, regulatory authority in this is limited to the minority that choose to be area has assumed increased importance. Central- members of the Federal Reserve System. In ization of the authority has helped assure a assuming responsibility for other state-chartered substantial core of consistency in regulation of banks, we would also have primary responsibilbanking institutions and their affiliates through- ity for establishing and monitoring a program out the country, especially with respect to the under which qualifying states could be certified involvement of banks in nonbanking activities to assume much of the federal supervision of and in activities involving interstate locations. state banking organizations. Many bank holding companies already engage in The Board would continue to regulate and nonbanking activities nationwide, and as more supervise the largest bank holding companies— and more states join regional interstate banking so-called "international class bank holding comcompacts or otherwise engage in interstate de- panies"—regardless of the charter class of their posit taking, the regulation of bank holding com- lead bank. Authority over holding companies in panies will take on even greater significance. which the lead bank is state chartered would also The Congress has also entrusted the Board continue. Our residual authority over national with broad rulemaking authority in a variety of banks, by virtue of their membership in the other areas affecting both state and national Federal Reserve System, would remain unbanks. Some of these areas, such as reserve changed. The Board also would retain its current requirements, are an integral part of monetary jurisdiction over foreign bank holding companies policy. Other areas include margin requirements, operating in the United States as well as over enforcement of some Glass-Steagall Act provi- U.S. banks operating foreign branches. sions, limits on loans to insiders, limits on loans At the same time, the Office of the Comptroller to affiliates, Truth in Lending, and certain other of the Currency would assume the title of "Fedconsumer statutes. Some of the responsibilities eral Banking Agency" (FBA) and, as an execuperipheral to our "core" functions as a central tive branch agency, would remain attached to the bank could reasonably be lodged elsewhere. Treasury Department.2 The agency would re- In general, present arrangements permit us to maintain a capability with respect to relevant 2. The term "executive branch agency," in Task Group facets of the banking business essential to the terminology, implies that the agency director would report to the Secretary of the Treasury on broad policy issues and on performance of our central banking responsibiloverall budget and staffing to maintain conformity with ities. Through the regional Reserve Banks, that administration programs in these areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318 Federal Reserve Bulletin • May 1985 main the primary supervisor of national banks. agencies involved and by working toward less Apart from international class organizations, the overlap with the states. The structure of the agency would also supervise and regulate bank Federal Reserve, which through 12 District Fedholding companies in which a national bank is eral Reserve Banks has strong regional roots and the lead bank. It would become the initiating contact with local banking institutions, should agency in deciding upon nonbanking activities enhance prospects for fruitful cooperation with appropriate for all bank holding companies. state authorities. The recommendations reflect several concerns of the Task Group. The concept of more than one Bank Holding Company Regulation federal bank regulator is retained, despite the complications, partly to maintain checks and One of the most significant changes in the strucbalances as a safeguard against undue concentra- ture of bank regulation recommended by the tion of regulatory power. Insofar as possible, report is the division of supervisory and regulaconsistent with other objectives, the Task Group tory authority over bank holding companies, as wished to provide a single supervisor for a bank opposed to the present centralization in the Fedand its holding company, sacrificing assured eral Reserve Board. uniformity among all bank holding companies to achieve that objective. Also, incentives would be Division of BHC Regulation. The report's goal provided for a greater role for state supervisory of reducing the number of regulators overseeing authorities. particular banking organizations is straightfor- As indicated earlier, the essential needs of the ward. The advantages are strongest in the case of central bank are respected. In retaining the basic those bank holding companies with only one institutional structure for the regulation of na- subsidiary bank, and with a parent company that tional banks, the Secretary of the Treasury is is essentially a shell with no significant nonbankafforded a direct avenue for continuing input and ing operations of its own. That is true of the vast influence on regulatory policies and direct access number of bank holding companies—more than to expertise. 5,000 out of the total of about 6,100. The role of the FDIC under the report's rec- The merits are more ambiguous in the case of ommendations would be limited essentially to multibank holding companies (of which there are administering the federal deposit insurance sys- more than 600) with a combination of state and tem. The composition of the FDIC board would national bank subsidiaries that would be regulatconsist of three presidential appointees, with the ed by the Comptroller, by the Federal Reserve, Director of the FBA and the Chairman of the and by one or more state supervisors. In these Federal Reserve serving as nonvoting members. cases, the goal of a single regulator of bank and The extent to which the insurer of banks needs holding company cannot be achieved, although to remain involved in the active continuing su- the bulk of the banking assets would ordinarily pervision of banks was a matter of considerable be under the same supervision as the parent discussion and was resolved by providing the holding company. FDIC with expanded powers to monitor all trou- At a practical level, friction could arise as the bled insured banks that pose a direct threat to the asset size of banks within a holding company FDIC insurance fund, as well as a sample of varies over time, calling for a different federal nontroubled banks, in cooperation with the pri- supervisor of the holding company. Indeed, mary supervisor. However, the FDIC's current some bank holding companies may find it advanday-to-day supervision, examination, and regula- tageous to shift the charters or the assets of their tion of state nonmember banks would be trans- subsidiary banks to switch from one regulator to ferred to the Federal Reserve Board or state another. The recommendations thus introduce agencies that have been certified by the Board to into holding company supervision at least the assume such responsibilities. theoretical possibility of "forum shopping" or "competition in laxity" not present in the exist- The recommendations regarding state banks ing bank holding company regulatory structure. provide a substantial opportunity for simplification, both by reducing the number of federal These jurisdictional questions could become Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 319 more difficult given the trend toward interstate proposes that the Federal Reserve Board retain a banking and the regional banking compacts being right to veto any activity determined to be perenacted by many states. As an increasing num- missible for bank holding companies by the Diber of bank holding companies have subsidiary rector of the Federal Banking Agency if, by a state banks in a number of states, delegation of two-thirds vote, the Board determines that the authority over the holding company could be- activity would "undermine the stability of the come complicated and contentious. banking system or have a serious adverse effect on safe and sound financial practices." Clearly, International Class Bank Holding Companies. exercise of that veto would require, and is in- The report recommends that the Federal Reserve tended to require, a strong sense of conviction on Board retain its jurisdiction over the so-called the part of the Board, and would likely be international class bank holding companies— exercised only rarely. Differences of opinion those holding companies owning or controlling between the Federal Banking Agency and the U.S. banks with foreign branches or material Board about the suitability of specific nonbank foreign banking subsidiaries, or companies with activities should normally be resolved by infortotal assets in excess of one-half of 1 percent of mal consultation. Clearly, the specificity of subaggregate bank holding company assets (approxi- stantive legislation delineating the appropriate mately $12.5 billion at present). (As more bank- range of activities for bank holding companies ing institutions establish international operations would be important. In any event, the Congress or cross the threshold of relative size, they would will have to decide the degree to which it is be added to the international class grouping). appropriate to provide latitude for these deci- This recommendation, while retaining a situa- sions by an executive branch agency headed by tion in which the holding company supervisor an individual. may be different from the lead bank supervisor, recognizes that the supervision and the regula- State Certification Program tion of large banking institutions inherently carry important implications for the stability of the The report recommends that the operational exdomestic and international financial system as a amination and supervisory responsibilities for whole. Those implications are directly related to state-chartered banks be transferred to the exthe broader responsibilities of the Federal Re- tent practicable to state agencies as those agenserve, and treatment should be uniform. cies are "certified" as having the capability to assume such responsibilties. The Federal Re- Nonbank Activities. The recommendations in serve Board would be charged with administerthe report contemplate that the Federal Banking ing such certification procedures and with moni- Agency (rather than the Federal Reserve, as at toring their performance. However, the basic present) take the initiative in determining the criteria for certification would be determined by scope of nonbanking activities for all bank hold- a majority of the Federal Reserve Board, the ing companies. The main ground for that propos- Federal Banking Agency, and the FDIC. While al appears to be a sense that these decisions cumbersome, that procedure would help assure affecting the structure of the banking system that the interests of each federal agency are might better be made by an executive branch taken into account. We believe that the concept agency more assuredly responsive to administra- that state regulators could potentially play a tion policy and philosophy. These decisions once larger role in the detailed supervision and examimade are not practically reversible and can pro- nation of state institutions, when the resources foundly affect the structure of financial markets. are adequate to perform that function, is valid. Our concern is that the decisions do not undercut For many banking institutions, particularly of the stability of the banking system and its safety smaller size, duplicative examinations would be and soundness, given the inherent interdepen- avoided. Moreover, the states would have strondence and interconnection among parts of a ger incentives to provide needed professional holding company organization. resources. In recognition of those concerns, the report State banks would, in any event, continue to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Federal Reserve Bulletin • May 1985 be subject to the substantive provisions of feder- Antitrust, Securities, and Margin al law, when applicable, and state regulatory Responsibilities agencies would be required, as a prerequisite for certification, to demonstrate their ability and The Task Group recommends that the competiwillingness to ensure compliance by state banks tive effects of mergers and acquisitions be rewith federal law. viewed exclusively by the Justice Department States that desire that their regulatory agencies under normal antitrust standards, rather than, in also be certified to supervise bank holding com- the first instance, by the banking agencies as at panies when a state bank is the lead bank would present.3 Similarly, the Securities and Exchange be required to adopt a law no less restrictive than Commission (SEC) would assume the current the Federal Bank Holding Company Act. The responsibilities of the banking agencies to admin- Federal Reserve, as the federal regulator of those ister and enforce the disclosure and other rebanks and bank holding companies, would main- quirements of the Securities Exchange Act of tain sufficient oversight to ensure that state bank- 1934 for bank securities—matters that already ing departments were fulfilling all their commit- conform to SEC policy direction. While present ments. procedures do not appear to have posed serious We envisage that the certification process problems for the industry or the agencies, these would proceed with some flexibility, probably steps toward "functional regulation" could reinvolving different levels of certification (and sult in some limited but useful simplification. Federal Reserve participation in examinations), The report also makes certain recommendadepending on the size and activities of the bank- tions with respect to margin requirements on ing organization. In many states, for instance, stocks and options. The Board's regulations are the most rapid progress toward full reliance on now consistent with some of the technical recstate examinations would likely be with smaller ommendations. and medium-sized institutions. However, states More importantly, the Board recently sent to with demonstrably strong banking departments the Congress a comprehensive study of federal would be expected in time to assume a primary regulation of margin requirements. We have prorole in all but the international class institutions. posed that the Congress establish a general regu- Effective administration would depend heavily latory framework for setting margins on securion close working relationships between the re- ties, on options, and on futures based on gional Reserve Banks and the state authorities. securities, possibly through a self-regulatory The Federal Reserve Board will strongly encour- body with federal oversight. We would recomage close cooperation, and is prepared to work mend that the appropriate congressional commitwith states in training programs for examiners tees consider that study, and we would be glad to and in developing common supervisory ap- work with the SEC and with the Congress to proaches. prepare implementing legislation. Deposit Insurance Reform Simplified BHC Regulation The Task Group recommendations include sev- The report calls for streamlined reporting re- eral proposals to reform the federal deposit inquirements and for elimination of restrictions on surance system. These recommendations include the opening or relocation of bank holding compa- the adoption of common minimum capital stanny nonbanking offices. The report also would dards for insurance purposes and common acsubstitute a notice procedure for the current counting rules by the FDIC and the FHLBB by a application procedures for bank holding compa- fixed date (such as within seven years). They ny acquisitions and activities. These recommen- also call for authority for risk-sharing for unindations would, in part, simply codify some changes that the Federal Reserve Board has 3. Financial and managerial criteria would continue to be developed and administered by the banking agencies, and already implemented and would faciliate further competitive criteria could be overridden in the case of failing simplification. banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 321 sured depositors and risk-related insurance pre- regulatory process, and the legitimate needs of miums. different agencies charged with policy responsi- Equity alone would suggest that banks and bility, inevitably posed complications for any thrifts should have common capital and account- reform plan. ing standards, especially as thrifts become more In our judgment at the Federal Reserve, the like banks in the types of activities they can and report outlines a reasonable and a practical apdo participate in. Recently the FHLBB adopted proach toward reconciling these conflicting obnew capital requirements designed to tighten and jectives, building on experience and the strengthen the net worth positions of thrift insti- strengths of the current structure. Specifically, tutions in recognition of greater risk-taking by the particular needs that we perceive as crucial them. This would narrow somewhat the gap to the effective conduct of monetary policy and between capital required for banks and thrifts, our responsibilities for helping to ensure the but that gap is very large and should, as suggest- stability of the financial system are respected. ed by the report, be closed over time. While other approaches are clearly conceptually The proposals for authorizing risk-sharing and possible consistent with our needs, we commend risk-related insurance premiums have been made the report to you as the base for a practical in legislation previously proposed by the FDIC. legislative program. The broader issues involved in deposit insurance As I emphasized at the start, however, the reform have recently been reviewed by the sense of confusion in banking and financial regu- Working Group of the Cabinet Council on Eco- lation stems largely from basic economic and nomic Affairs. The Federal Reserve was not a technological change that has outmoded much of direct part of that effort, and the Board has not the substantive law that the various agencies taken a position on their recommendations. must interpret and administer. No reshuffling of The Board does believe, however, that a varie- regulatory authorities will be satisfactory withty of issues that have arisen with respect to out resolving those substantive matters. deposit insurance do deserve active study and I believe that there is a wide area of conceptual that some change would be appropriate. We also consensus and agreement on several fronts—on believe that the prospect of change should be what a "bank" is and should be; on the desirabilapproached with great care and deliberation giv- ity of retaining a broad separation of banking and en the sensitivity in terms of the confidence of commerce; on the need to redefine a "thrift"; depositors and the stability of the banking sys- and on simplification of procedures under the tem. We would urge that these issues be ap- Bank Holding Company Act. While more conproached on their merits, separate and apart tentious, the time has come to reach a new from administrative reform of the regulatory consensus on such matters as the appropriate framework. range of discretion by states in authorizing new activities for banks or bank holding companies that may conflict with safety and soundness or CONCLUSION other basic aspects of federal policy, on the appropriate range of additional nonbanking ac- The Bush Task Group Report is the most com- tivities for bank holding companies, and on a prehensive review of the federal regulatory rational approach to interstate banking. These structure pertaining to financial markets and issues have been before the Congress for some institutions that has been made for many years. time. They urgently need to be settled. Its main thrust and purpose is to achieve simplifi- The Federal Reserve Board clearly has a great cation by reducing overlapping jurisdiction and and continuing interest in all these issues. We avoiding unnecessary regulation. As the discus- stand ready to work with your subcommittee as sion proceeded, it also became evident that cer- you proceed with your examination and deliberatain fundamental and lasting objectives of the tions. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Announcements MODIFICATION OF million in deposits and from 7 to 6 percent of the SEASONAL CREDIT PROGRAM second $100 million in deposits, while remaining at 10 percent of deposits of more than $200 The Federal Reserve Board has announced a million. This change will allow a borrowing institwo-part modification in its seasonal credit pro- tution, especially a smaller one, to obtain a gram. The changes are designed to provide fur- greater portion of its seasonal needs for funds ther assurance that small- and medium-sized from the Federal Reserve. agricultural banks can meet temporary liquidity Also, discount officers will be taking a more requirements that might arise in accommodating flexible approach to the administration of the the needs of their farm borrowers over the forth- seasonal credit program, particularly in judging coming planting and production cycle. whether there are special factors under current While the great bulk of farm banks appear to circumstances in the farm economy that would have adequate liquidity, the modifications are modify evaluation of seasonal swings based on designed to ensure that liquidity strains do not historical data. Reserve Banks will be making hamper the necessary flow of credit in various special efforts to acquaint depository institutions local areas. The modified program to meet sea- with both the regular and temporary seasonal sonal liquidity needs complements loan guaran- credit facilities. tee actions taken by the administration to help assure a necessary flow of credit to agriculture. The seasonal credit program, which has been Temporary Simplified Program in place for many years, provides access to discount window borrowing for institutions that The temporary simplified program will be availdemonstrate recurring financing needs related to able as an alternative through September to seasonal fluctuations in their deposit flows and smaller banks actively engaged in agricultural loan demands. The program has been modified lending and with no or limited access to the by (1) certain changes that liberalize amounts national money market. Such banks generally available under the regular program and (2) addi- would have less than $200 million in deposits and tion of a temporary simplified program, which would have a ratio of loans to farmers or of farm may be used as an alternative. real estate to total loans greater than 17 percent (the average for the banking system of the ratio at each bank of farm loans to total loans). Banks Modification of Regular Program with loan-to-deposit ratios of 60 percent or more would be eligible. The regular seasonal program requires an institu- For banks that qualify for the program, credit tion to fund a portion of the seasonal swing in its at the discount window would be available to net need for funds (computed from past and fund half their total loan growth in excess of 2 projected patterns of deposit and loan variations) percent from a base level, either the average for from its own resources before it can borrow from February or for the two weeks just before subthe Federal Reserve. The Board has reduced the mission of an application. Credit under this proamount that a bank must fund from its own gram may not exceed 5 percent of a bank's liquidity. deposits. It is expected that credit will be used The formula for computing this deductible has primarily to fund loans for agricultural or agriculbeen changed from 4 to 2 percent of the first $100 tural-related purposes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

323 Exceptions under the program may be made at resolved in a manner allowing the Comptroller to the discretion of a Reserve Bank for banks grant final charters for nonbank banks, the Board particularly affected by agricultural credit condi- would act on these applications promptly upon tions and that lack ready access to national their refiling. money markets. The Board also returned a similar application As a matter of policy, borrowing under this from Citicorp to acquire a North Carolina indusprogram would be repaid as the seasonal credit trial bank, pending resolution of Citicorp's apneeds abate. In no case should such borrowing, peal of the North Carolina Banking Commissionincluding renewals, be outstanding beyond Feb- er's decision denying Citicorp's application ruary 1986. under state law. Interest on credit advanced under the special seasonal borrowing program will be set at a rate that will remain fixed during the time that the ELIMINATION OF FRACTIONAL credit is outstanding. The rate was initially set at AVAILABILITY CREDITING OPTION 8Vi percent, a rate between the basic discount rate and the rate on extended credit that is The Federal Reserve Board has approved a outstanding for more than 60 days. The rate for proposal to eliminate the fractional availability new loans may be changed as the basic discount crediting option offered to depository institutions rate and extended credit rates are changed. for the recovery of Federal Reserve interterri- Banks may borrow under either the regular or tory check float. The Board's action will become the temporary seasonal program. They may shift effective September 1, 1986. between programs, but may not borrow under The Board took this action because experience both at the same time. with the fractional availability crediting option The Board also stressed that the discount has indicated that the option would not provide window would be available on a regular adjust- for the full recovery of float from those institument or extended credit basis when unusual tions generating it. demands developed in local areas as a result of The Board also approved a continuation of the the agricultural credit situation. current moratorium on permitting additional depository institutions to select this crediting option. Reserve Banks will continue to provide the SUSPENSION OF PROCESSING fractions, on request, to depository institutions. OF APPLICATIONS TO ACQUIRE NONBANK BANKS AMENDMENTS TO REGULATIONS G AND U The Federal Reserve Board announced on March 15, 1985, that it is suspending further The Board has adopted a technical amendment, processing of pending applications from bank effective April 19, 1985, to Regulations G (Secuholding companies to acquire nonbank banks. rities Credit by Persons Other than Banks, Bro- The Board acted as a result of the recent kers, or Dealers) and U (Credit by Banks for the decision by a U.S. District Court preliminarily Purpose of Purchasing or Carrying Margin enjoining the Comptroller of the Currency from Stocks) to exclude face-amount certificates from issuing final charters for nonbank banks. The the definition of "margin stock." A face-amount Court's action, unless reversed or limited, elimi- certificate is a security, which promises to pay an nates the ability of bank holding companies to investor a fixed sum of money at a fixed future open nationally chartered nonbank banks. date in return for a designated payment, and is In light of the fact that the applications can no issued by an investment company that is regislonger be consummated, the Board has decided tered under the Investment Company Act of to suspend action on the applications during the 1940. As permitted by the Investment Company time that the Court's injunction is in effect. If the Act, face-amount certificates have built-in credit issues raised by the District Court opinion are features. Also, the Board's final action allows Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin • May 1985 broker-dealers to sell these instruments without information services. These steps were designed being considered in violation of the credit-ar- to establish the management team and organizaranging provision of Regulation T. tional structure for accomplishing the goals and reflect a new direction that places greater emphasis on the Board's computing and information CHANGES IN OFFICIAL COMMENTARIES services and accelerates the transition toward ON REGULATIONS E AND Z end-user computing. The Board's actions include the restructuring The Federal Reserve Board has published, in of the current Division of Data Processing into final form, changes in the official staff commen- two new divisions of distinctly separable functaries on Regulations E (Electronic Fund Trans- tions—the Division of Computing Services and fers) and Z (Truth in Lending). the Division of Information Services—and the The major changes to the official staff com- selection of officers to manage these divisions. mentary on Regulation E pertain to unauthorized The two new divisions will be organized and transfers, specifically forced initiation, and to managed as follows: unsolicited issuance of personal identification Bruce M. Beardsley, formerly Deputy Direcnumbers (PINs). Some technical changes to the tor of the Division of Data Processing, became commentary were also made. Director of the Division of Computing Services. The revisions to the official staff commentary Other officers in the Division are the following: to Regulation Z address such matters as the • Thomas C. Judd, Assistant Director, with assumption provision, surcharges, discounted responsibility for overseeing the Contingency variable-rate disclosures, and implementation of Processing Center in Culpeper, Virginia, where the statutory change to the right of rescission in he had been Manager. open-end credit. • Elizabeth B. Riggs, Assistant Director, with responsibility for the Computer Operations PROPOSED ACTIONS Branch. • Robert J. Zemel, Assistant Director, with The Federal Reserve Board has issued for public responsibility for the Computing Systems comment revisions to Regulation B (Equal Credit Branch. Opportunity) that would simplify the regulation William R. Jones became the Director of the and update some of its provisions. Comment is Division of Information Services. Mr. Jones had requested by June 14, 1985. been the Assistant Director for the Program The Federal Reserve Board has also issued for Improvement Project. Other officers in the Divipublic comment a proposed amendment to Regu- sion are the following: lation G (Securities Credit by Persons Other than • Stephen R. Malphrus, Assistant Director, Banks, Brokers, or Dealers) that would give was formerly Assistant Staff Director for Office savings and loan associations and other lenders Automation and Technology in the Office of Staff the same authority as banks to extend credit to Director for Management, and this function will employee stock ownership plans. Comment is transfer to the User Services and Applications requested by April 19. Branch in the Division of Information Services. The Board has issued for comment proposed • Richard J. Manasseri, Assistant Director, amendments to update Regulation J (Collection with responsibility for the Banking Systems Staof Checks and Other Items and Wire Transfers of tistics Branch. Funds). Comment is requested by May 21. • William C. Schneider, Jr., Assistant Director, with responsibility for the Data Services Branch. CHANGES IN BOARD STAFF Charles L. Hampton, formerly Director of the Division of Data Processing, assumes the posi- The Board on March 11 took several steps to tion of Senior Technical Adviser in the Office of restructure the management of its computing and Staff Director for Management. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 325 PUBLICATION OF STAFF STUDY SYSTEM MEMBERSHIP: ADMISSION OF STATE BANKS Small Empirical Models of Exchange Market Intervention: Applications to Canada, Germany, The following banks were admitted to memberand Japan, Staff Study 135, has been published. ship in the Federal Reserve System during the This study, written by Deborah J. Danker, Rich- period March 1 through April 1, 1985: ard A. Haas, Dale W. Henderson, Steven A. Symansky, and Ralph W. Tryon, is the last in a Arizona series of ten studies on intervention written by Avondale Columbia Bank members of the staffs of the U.S. Department of Ohio the Treasury and of the Federal Reserve System. Columbus Trustcorp Company They are published as Staff Studies 126-135; Texas single copies may be obtained free of charge Waco Waco State Bank from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON FEBRUARY 12-13, 1985 week edged down but remained above the average level in the fourth quarter. Despite the con- 1. Domestic Policy Directive tinued rise in employment, the civilian unemployment rate increased slightly to 7.4 per- The information reviewed at this meeting sug- cent, as the civilian labor force grew substangested that the rate of economic expansion tially. strengthened in late 1984. For the fourth quarter Retail sales rose 0.7 percent in January, conas a whole, growth in real gross national product tinuing at about the same pace as the average for picked up to an annual rate of about 4 percent, November and December. Much of the January according to the preliminary estimate of the rise was attributable to sales at automotive out- Commerce Department, from about IV2 percent lets. Sales of new domestic automobiles were at in the third quarter, and there was evidence of an annual rate of 8V2 million units, about 1 million continued moderate expansion in early 1985. The units higher than the average in the fourth quarpickup in growth from the third to the fourth ter of 1984. Stores selling primarily discretionary quarter was attributable in large part to stronger items such as general merchandise, apparel, furdomestic final demand and a reduction in the niture, and appliances registered a marked decurrent account deficit with foreign countries cline in sales in January, after substantial inafter a sharp further widening of that deficit in creases in the final months of 1984. the third quarter. Broad measures of prices and The decline in housing activity that had charwages generally continued to rise in 1984 at rates acterized the second half of 1984 appeared to be close to those recorded in 1983. ending as the year drew to a close. Total private Industrial production increased 1.0 percent in housing starts, though down about 6 percent in the November-December period, offsetting the the fourth quarter as a whole to an annual rate declines in the preceding two months, and pre- below 1.6 million units, edged up in the Novemliminary indications suggested a further gain in ber-December period, and sales of existing January. The December rise was broadly based, homes rose somewhat over the final two months in contrast to the increase in November, which of the year. was concentrated in the automotive category. Business fixed investment spending continued The index of industrial capacity utilization to grow in the fourth quarter, although at a less moved up to 81.9 percent in December, but rapid pace than in the first three quarters of 1984. remained almost 1 percentage point below its Shipments of nondefense capital goods increased recent high in mid-1984. moderately in the fourth quarter, and spending Nonfarm payroll employment, adjusted for on nonresidential construction advanced substrike activity, rose more than 300,000 further in stantially. In contrast, new orders for plant and January. The largest gain occurred at retail trade equipment fell in December and over the fourth establishments, but employment growth was also quarter as a whole. strong in services and in construction, where Some imbalances in business inventories had unseasonably mild weather boosted hiring in developed during 1984, but businesses appeared both December and early January. In manufac- to have made substantial progress toward attainturing, employment rose moderately after a large ing desired inventory levels, and in some sectors gain in December, and the length of the work- inventories relative to sales were quite lean. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

327 Investment in business inventories slowed mark- be acceptable, particularly if the faster growth edly in late fall, largely in response to the earlier occurred in the context of sluggish expansion in weakness in orders and sales. In November, economic activity and continued strength of the stocks at all manufacturing and trade establish- dollar in foreign exchange markets. The Commitments were little changed in real terms, after tee also indicated that greater restraint on reaverage monthly increases in the range of $20 serve positions might be acceptable if growth in billion to $25 billion at an annual rate during prior the monetary aggregates were substantially more months in 1984. rapid than expected and if there were indications In December, the producer price index for that economic activity and inflationary pressures finished goods and the consumer price index were strengthening significantly. The intermeetedged up 0.1 percent and 0.2 percent respective- ing range for the federal funds rate was set at 6 to ly. During 1984 the rise in producer prices was 10 percent. 1.8 percent, compared with 0.6 percent in 1983, After growing little on balance since early while the increase of 4 percent in consumer summer, Ml expanded at estimated annual rates prices was about the same as that in the previous of about IOV2 and 9 percent respectively in Deyear. The advance in the average hourly earnings cember and January.1 M2 and M3 also expanded index was 3.0 percent last year, compared with rapidly over the two months, rising on average at 3.9 percent in 1983. annual rates estimated to be around 14 and 13V2 The foreign exchange value of the dollar rose percent respectively, considerably above the about 5!/2 percent to a new high over the inter- short-run objectives for the November-to-March meeting period. After the announcement on Jan- period established at the December meeting. uary 17 by the G-5 Ministers of Finance and Relative to the Committee's longer-run objec- Central Bank Governors regarding coordinated tives for the period from the fourth quarter of intervention in exchange markets, and subse- 1983 to the fourth quarter of 1984, Ml grew at a quent exchange market operations, the dollar rate of about 5V4 percent, somewhat below the tended to stabilize. The rise resumed in early midpoint of its 4 to 8 percent range, and M2 February, apparently in association with a per- increased at a rate of about 73/4 percent, a bit ception that the outlook for economic activity in above the midpoint of its 6 to 9 percent range. the United States was improving without signs of M3 and domestic nonfinancial sector debt exa strengthening in inflationary pressures. The panded at rates of about IOV2 and 13V2 percent U.S. merchandise trade deficit declined sharply respectively, above the Committee's ranges of 6 in December and for the fourth quarter as a to 9 percent and 8 to 11 percent for the year. The whole, primarily because imports dropped sub- rapid growth in total debt reflected very large stantially from the high rate in the third quarter. government borrowing and strong private credit Nevertheless, the trade deficit for 1984 totaled growth that was boosted in part by the unusual nearly $108 billion, compared with $61 billion in size of merger-related credit activity. 1983. Over the December-January period, the aver- At its meeting on December 17-18, 1984, the age level of borrowing by depository institutions Committee had adopted a directive that called at the discount window declined on balance, for some further reduction in the degree of despite a bulge around the year-end statement restraint on reserve positions. The members ex- date, and both nonborrowed and total reserves pected that such an approach to policy imple- expanded at very rapid rates. In the first part of mentation would be consistent with growth of the recent intermeeting interval, open market Ml, M2, and M3 at annual rates of around 7, 9, operations were directed toward achieving some and 9 percent respectively during the four-month further reduction in pressures on reserve posiperiod from November to March. Given the tions. Adjustment plus seasonal borrowing at the estimated shortfall in growth of Ml for the fourth quarter relative to the Committee's expectations at the beginning of the period, the members 1. These growth rates and all subsequent data on the monetary aggregates reflect annual benchmark and seasonal agreed that somewhat more rapid growth would factor revisions as published on February 14, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin • May 1985 discount window, after bulging around year-end, rate remained in the range of recent months, but declined to the $250 million to $300 million range some saw the odds as tilted in the direction of over much of January. By the latter part of some modest further progress toward price sta- January, against the background of continued bility. rapid growth in the monetary and credit aggre- At this meeting the members of the Committee gates and the relatively good performance of the and the Federal Reserve Bank presidents not economy, the easing process came to an end; currently serving as members presented specific reserves were provided more cautiously through forecasts of economic activity, the rate of unemopen market operations, and borrowing rose ployment, and average prices. For the period somewhat, partly because of unexpectedly large from the fourth quarter of 1984 to the fourth demands for excess reserves. Reflecting varia- quarter of 1985, the forecasts for growth of real tions in actual pressures on bank reserve posi- GNP centered on a range of 3V2 to 4 percent, with tions, but in part in anticipation of an easing in an overall range of VA to 4]A percent. Forecasts pressures, the federal funds rate declined in the of the rate of inflation, as indexed by the GNP early part of the period from around S3A percent deflator, also centered on a range of 3Vi to 4 to the 8 to SlA percent area; subsequently it rose percent, and the central tendency of the foreto around 8V2 percent or somewhat higher. Other casts for growth in nominal GNP was a range of short-term market interest rates generally rose IV2 to 8 percent. Forecasts of the rate of unemsomewhat on balance over the intermeeting in- ployment in the fourth quarter of 1985 varied terval, while most long-term rates were roughly from 6V2 to IV4 percent, but most of the members unchanged or a little lower. anticipated unemployment rates ranging from 63A The staff projections presented at this meeting to 7 percent. These forecasts were based on the suggested that real GNP would grow at a moder- Committee's objectives for growth in money and ate pace in 1985. Business fixed investment was credit established at this meeting. The members likely to expand further during the year, and also assumed that significant progress would be anticipated gains in real disposable income were made toward reducing future deficits in the fedexpected to support continued sizable advances eral budget, thereby helping over the nearer term in consumption expenditures. The unemploy- to moderate inflationary expectations and presment rate was expected to edge down over the sures on interest rates, and they assumed that the period, and the rate of increase in prices was foreign exchange value of the dollar would flucprojected to remain close to, or slightly below, tuate within the range experienced in recent that experienced in 1984. months. In the Committee's discussion of the economic While a number of members commented dursituation and outlook, the members agreed that ing the discussion that actual growth in line with continuing expansion in business activity was a the forecasts would represent a favorable devellikely prospect for 1985, though at a more moder- opment for the third year of an economic expanate rate than in the first two years of the current sion, several observed that growth might well be cyclical upswing. As they had at previous meet- faster, especially in the short run. This possibiliings, however, members referred to persisting ty was raised by current indications of appreciaproblems and financial strains in various sectors ble strength in both consumer and business of the economy that constituted threats to the spending and an expansive fiscal policy. It was sustainability of the overall expansion, especially also pointed out that a large decline in the foreign if substantial progress was not made toward exchange value of the dollar, should it occur, reducing the massive deficit in the federal bud- would tend to stimulate domestic business activiget. Moreover, the high level of the dollar and ty while also adding to inflationary pressures. large trade deficit were increasingly being re- Several members noted their concern that strong flected in pressures on some sectors of the growth in spending by the private sectors in the economy. Most of the members expected about context of a stimulative fiscal policy could lead the same rate of inflation in 1985 as that experi- to some inflationary pressures, particularly as enced in 1984, assuming that the dollar exchange the margin of unutilized productive resources Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 329 diminished, with adverse consequences for inter- Members who were relatively sanguine about est rates and interest-sensitive sectors of the the outlook for inflation cited the favorable trend economy and ultimately for the sustainability of in wages, the strong competition from abroad in the expansion itself. many industries, the growth of productive capac- While the overall expansion in economic activ- ity, and the widespread efforts of businesses to ity was currently displaying some momentum, improve productivity. The possibility of further the members also referred to the decidedly un- declines in oil prices was also cited. The removal even participation in the expansion of different of quotas on imports of automobiles from Japan sectors of the economy or parts of the country, would also help to restrain the rise in average including adverse conditions in agriculture and in prices, although the extent of that effect was certain sectors of industry. Circumstances and uncertain. Members who were less optimistic problems varied from one industry or region to about the outlook for inflation noted that unit another, but particular concern was expressed labor costs could be expected to be under upabout the damaging impact that a rising dollar ward pressure because productivity gains would internationally was having on a number of manu- tend to diminish as the nation continued to move facturing and extractive industries and on agri- toward fuller utilization of its productive reculture, with attendant financial difficulties for sources during the third year of the current those sectors of the economy and related strains expansion. One member also raised the prospect on the financial institutions that serviced them. of at least some pressures from rising commodity Reference was also made to the overbuilding of prices in 1985. multifamily housing and office structures in some At this meeting the Committee reviewed the parts of the country and to the problem loans 1985 growth ranges for the monetary and credit associated with such overbuilding. Some con- aggregates that it had tentatively set in July 1984 cern was expressed about the rapid accumulation within the framework of the Full Employment of debt by many households and businesses that and Balanced Growth Act of 1978 (the Humrendered these borrowers more vulnerable to phrey-Hawkins Act). Those tentative ranges inadverse economic developments. It was general- cluded growth—measured from the fourth quarly expected that such problems would not signifi- ter of 1984 to the fourth quarter of 1985—of 4 to 7 cantly retard overall economic expansion in the percent for Ml, 6 to 8V2 percent for M2, and 6 to near term, but several members indicated that 9 percent for M3. The associated range for total they were more troubled by the economic pros- domestic nonfinancial debt had been provisionpects for the longer run. The members agreed ally set at 8 to 11 percent for 1985. that the odds of prolonging the expansion would The Committee's discussion focused on be greatly enhanced by a substantial reduction in whether the tentative ranges for 1985 remained federal budgetary deficits and the emergence of a appropriate in light of developments since midmore sustainable pattern of international transac- 1984 and foreseeable economic and financial tions. circumstances. There were a number of propos- With regard to the outlook for inflation, most als for small changes in the ranges. With respect of the members anticipated that continuing eco- to Ml, a majority of the members wanted to nomic expansion in line with their forecasts retain the tentative range of 4 to 7 percent, but would probably be associated with little change the remaining members expressed a preference in the rate of inflation during 1985. Some mem- for raising the upper limit to IV2 or 8 percent. In bers were more optimistic and viewed the pros- the majority view, the tentative range provided pects for some decline in inflation as relatively adequate room to accommodate a desirable and favorable. Although the members had assumed sustainable rate of economic expansion and rein presenting their forecasts that the dollar would tention of that range would also serve to underremain within its recent range of fluctuation in score the Committee's commitment to an antiforeign exchange markets, they recognized that inflationary policy. The members who preferred the future performance of the dollar was in fact a higher limit for the Ml range gave considerable highly uncertain. emphasis to the uncertainties that surrounded Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin • May 1985 both the economic outlook and the relationship revert to its earlier pattern that was more in line between money growth and GNP. They did not with the growth in nominal GNP. necessarily disagree that the tentative range Most of the members also supported an inmight in fact prove to be consistent with a crease of V2 percentage point in the upper limit of satisfactory economic performance, but they be- the tentative range for M3 and an increase of 1 lieved that some additional leeway was desirable percentage point in the provisional monitoring for use if needed. range for total domestic nonfinancial debt. In the course of their discussion, the members Growth within both ranges in 1985 would reprereferred to evidence that the income velocity of sent a considerable slowing from the actual pace Ml—nominal GNP divided by the Ml stock— in 1984. Some members questioned the need for seemed to be returning to a more normal or any increase in those ranges, both because of the predictable pattern. Some analysis suggested anticipated moderation in the expansion of GNP that the trend growth of Ml velocity might be and because the higher ranges could convey a somewhat lower than that experienced over wrong impression of the Committee's anti-inflamuch of the postwar period, reflecting in part the tionary policy. Nonetheless, total debt was exderegulation of deposits and other financial pected to continue to grow at a faster rate than changes in recent years and the related prospect nominal GNP, reflecting further rapid expansion of a slower rate of financial innovation in the in the federal debt, larger than normal growth in future. A number of members emphasized that merger and other corporate restructuring activisuch a development would imply the need for Ml ties, and the continuing need to finance increases growth in the upper part of the Committee's in spending by domestic sectors that exceeded tentative range. It was also noted that the lagged the rise in nominal GNP, as reflected in the effects of the interest rate declines during the expected further widening of the nation's large latter part of 1984 were likely to depress velocity deficit in its external trade balance. growth in the first part of 1985. Other members In the course of the Committee's discussion, raised the prospect that the growth in Ml veloci- consideration was given to a proposal for using ty might not decline as much as expected from the midpoint of the previous year's fourth-quarthe rate experienced in 1984 and in that event ter target range, rather than the actual fourthgrowth of Ml near the upper limit of the tentative quarter outcome, as the base for the following range, or above it, would have inflationary impli- year's target range. This issue had been discations. The members agreed that the trend rate cussed in some detail at the previous meeting of of increase in Ml velocity, as well as the velocity the Committee. No support was expressed in of the other monetary aggregates, remained sub- favor of such an approach, although the memject to a considerable range of uncertainty, given bers recognized that in some circumstances such the still limited experience with a relatively de- an alternative might be appropriate. In setting its regulated financial environment. Under these objectives for a current year, the Committee conditions, the Committee members indicated already took into account the prior year's monethe need to continue to judge the behavior of the tary developments and their implications for the monetary aggregates in light of the flow of infor- evolving relationship between money and GNP. mation on business activity, inflationary pres- It was generally felt that employing the midpoint sures, and conditions in domestic credit and of the previous year's target range as the base for foreign exchange markets. the current year's target would have the disad- With regard to M2, most of the members vantage of introducing a degree of rigidity in the indicated that they could accept an increase of V2 decisionmaking process; it would impose a base percentage point in the upper limit of the tenta- that was decided upon many months before tive range, although some expressed an initial under possibly quite different circumstances. In preference for no change in the range. The small the current situation, such problems were particupward adjustment reflected the technical judg- ularly evident for M3 and total credit whose ment, based upon an assessment of recent devel- levels at the end of 1984 were well above their opments, that growth in M2 for the year could long-run ranges; use of a previously targeted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 331 fourth-quarter base would therefore imply either of 1984 to the fourth quarter of 1985. The associated a wrenching slowdown in actual growth for 1985 range for total domestic nonfinancial debt was set at 9 or adoption of very high target ranges for growth to 12 percent for the year 1985. The Committee agreed that growth in the monetary aggregates in the upper in 1985. part of their ranges for 1985 may be appropriate, The members also noted that the levels of the depending on developments with respect to velocity monetary aggregates at the start of the year were and provided that inflationary pressures remain suball above the target ranges under consideration, dued. as those ranges were conventionally illustrated, because monetary growth had been relatively Votes for this action: Messrs. Volcker, Corrigan, Boykin, Gramley, Mrs. Horn, Messrs. Partee, rapid in late 1984 and early 1985. No member Rice, Ms. Seger, and Mr. Balles. Votes against this expressed concern about this development, since action: Messrs. Boehne, Martin, and Wallich. (Mr. it was contemplated that monetary growth would Balles voted as an alternate). slow as the year progressed and expansion for the year as a whole would be consistent with the Messrs. Boehne and Martin dissented because target ranges. With reference to the Humphrey- they preferred a somewhat higher upper bound- Hawkins testimony, the pictorial representation ary for the Ml range in order to provide enough of the targets as "cones" would be supplement- leeway, if needed, to accommodate a satisfaced by other lines to indicate that the Committee tory rate of economic expansion. In their view, was not concerned about variations in money the additional leeway was desirable because of growth outside the relatively narrow portion of the uncertainties surrounding the outlook for the cones early in the year. velocity, and it took account of the favorable At the conclusion of the Committee's discus- outlook for inflation and the continuing financial sion, a majority of the members indicated that strains in some sectors of the economy. Mr. they favored or found acceptable a policy that Boehne also noted that Ml growth in 1984 was in included retention of the tentative range for Ml, the lower part of the Committee's range. increases of Vi percentage point in the upper Mr. Wallich dissented because he wanted to limits of the tentative ranges for M2 and M3, and retain the ranges for the broad monetary aggrean increase of 1 percentage point in the provi- gates that were tentatively adopted in July 1984. sional monitoring range for total domestic nonfi- In his view those ranges provided adequate room nancial debt. The members indicated that it for fostering a sustainable rate of economic exmight be appropriate for growth in the aggregates pansion. They were more consistent with the to be in the upper part of their ranges for the Committee's long-run objective of bringing down year, depending on developments with respect to inflation, and raising them might be misinterpretvelocity and provided that inflationary pressures ed by the market as a weakening of policy in that remained subdued. In keeping with the Commit- regard. tee's usual procedures under the Humphrey- In the Committee's discussion of policy imple- Hawkins Act, the ranges would be reviewed at mentation for the weeks immediately ahead, all midyear against the background of economic and of the members indicated their support of an financial developments. approach directed toward maintaining the re- The following paragraph relating to the longer- serve conditions characteristic of recent weeks. run ranges was approved: Such an approach was thought likely to be associated with reduced growth in the monetary aggregates over the balance of the first quarter, The Federal Open Market Committee seeks to fosalthough growth for the quarter as a whole would ter monetary and financial conditions that will help to reduce inflation further, promote growth in output on a probably exceed the Committee's longer-run sustainable basis, and contribute to an improved pat- ranges for the year. That approach was reintern of international transactions. In furtherance of forced by the current strength of the dollar in the these objectives the Committee agreed at this meeting exchange markets and the sense that the outlook to establish ranges for monetary growth of 4 to 7 for the economy and prices did not appear to percent for Ml, 6 to 9 percent for M2, and 6 to W2 signal a need for a change. percent for M3 for the period from the fourth quarter Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin • May 1985 With regard to Ml, the members referred to an the possibility of some easing in reserve condianalysis, which suggested that expansion in this tions, but in the view of at least some of the aggregate should moderate as the lagged effects members, any potential need for easing seemed of earlier declines in market interest rates on the less likely, given the recent strength of the monedemand for money balances dissipated. With tary aggregates and the performance of the econrespect to the outlook for the broader aggregates, omy. the members viewed appreciably slower growth At the conclusion of the Committee's discusas a reasonable expectation, partly because of sion, all of the members indicated their acceptthe prospect that inflows of funds to money ance of a directive that called for maintaining the market deposit accounts and to money market degree of reserve pressure that had prevailed in mutual funds would moderate as the interest paid recent weeks. The members agreed that modest on such accounts was brought into better align- increases in reserve restraint would be sought if ment with short-term market rates. Indeed, evi- growth in Ml appeared to be exceeding an annudence of such a development was already appar- al rate of about 8 percent and M2 and M3 a rate ent with respect to money market mutual funds. of around 10 to 11 percent during the period from Additionally, the expansion in M3 might be held December to March, particularly if such monedown by continued moderation in the issuance of tary expansion was associated with satisfactory large-denomination certificates of deposit by growth in business activity and diminishing prescommercial banks. sures in exchange markets. The members also Despite the prospects for more moderate agreed that lesser restraint on reserve positions growth in the monetary aggregates, some mem- would be acceptable in the event of substantially bers were concerned that such growth might not slower growth in the monetary aggregates, espeslow sufficiently over the period ahead and that cially against the background of sluggish growth some firming of reserve conditions might be in economic activity and continued strength of needed to foster a desirable rate of monetary the dollar in foreign exchange markets. It was expansion. They found the current approach to agreed that the intermeeting range for the federal policy implementation appropriate for the pre- funds rate, which provides a mechanism for sent, but they did not want to rule out the initiating consultation of the Committee when its possible need for some modest firming over the boundaries are persistently exceeded, should be weeks ahead. Several members indicated that left unchanged at 6 to 10 percent. the degree of any firming should remain fairly The following directive, embodying the Comlimited even if money growth was above expec- mittee's longer-run ranges and its short-run opertations for a time because they were concerned ating instructions, was issued to the Federal about the adverse impact that a substantial rise in Reserve Bank of New York: market interest rates over the near term could have on the exchange market situation and on The information reviewed at this meeting suggests interest- or trade-sensitive sectors of the econo- that real GNP expanded at a moderate pace in the fourth quarter, reflecting some strengthening in late my and ultimately on the economic expansion 1984 after several months of considerably reduced itself. Members concluded that evaluation of the growth, and there was evidence of continued moderate desirability for firming should take account of the expansion in early 1985. Total retail sales rose in strength of the dollar in exchange markets as well January at about the same pace as the average for as the business outlook and inflationary pres- November and December, while the decline in housing starts appears to have ended. Industrial production sures and that any firming of reserve conditions and nonfarm payroll employment increased appreciaover the weeks ahead should be undertaken in a bly in the November-December period and nonfarm limited and gradual manner. Accordingly, relapayroll employment rose substantially further in Janutively rapid monetary growth would not automat- ary. The civilian unemployment rate rose slightly in ically call for more reserve restraint if it occurred January to 7.4 percent. Information on business in the context of emerging weakness in business spending suggests less rapid expansion in outlays for fixed investment, following exceptional growth earliconditions and a strong dollar in the foreign er; businesses also appear to have made substantial exchange markets. The members also agreed on progress in adjusting their inventories. During 1984 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 333 broad measures of prices generally increased at rates remaining uncertainties in the business outlook, and close to those recorded in 1983, and the index of the strength of the dollar in the exchange markets, the average hourly earnings rose somewhat more slowly. Committee seeks to maintain reserve conditions char- The foreign exchange value of the dollar against a acteristic of recent weeks. Should growth in Ml aptrade-weighted average of major foreign currencies pear to be exceeding an annual rate of around 8 has continued to appreciate strongly since mid-De- percent and M2 and M3 a rate of around 10 to 11 cember. After the announcement on January 17 by the percent during the period from December to March, G-5 Ministers of Finance and Central Bank Governors modest increases in reserve pressures would be regarding coordinated intervention in exchange mar- sought, particularly if business activity is rising at a kets, and subsequent operations, the dollar's rise satisfactory rate and exchange market pressures dimoderated somewhat. The merchandise trade deficit minish. Lesser restraint on reserve positions would be declined sharply in December and for the fourth acceptable in the event of substantially slower growth quarter as a whole, primarily because of a large drop in in the monetary aggregates, particularly in the context imports from the high rate in the third quarter. Never- of sluggish growth in economic activity and continued theless, the deficit for the full year 1984 was substan- strength of the dollar in foreign exchange markets. The tially higher than in 1983. Chairman may call for Committee consultation if it After growing little on balance since early summer, appears to the Manager for Domestic Operations that Ml expanded at a rapid pace in late 1984 and early pursuit of the monetary objectives and related reserve 1985. The broader aggregates also expanded rapidly in paths during the period before the next meeting is recent months. For the period from the fourth quarter likely to be associated with a federal funds rate persisof 1983 to the fourth quarter of 1984, Ml grew at a rate tently outside a range of 6 to 10 percent. of about 5'A percent, somewhat below the midpoint of the Committee's range for the year, and M2 increased Votes for short-run operational paragraph: Messrs. at a rate of about 73A percent, a bit above the midpoint Volcker, Corrigan, Boehne, Boykin, Gramley, of its longer-run range. Both M3 and total domestic Mrs. Horn, Messrs. Martin, Partee, Rice, Ms. nonfinancial debt expanded at rates above the Com- Seger, Messrs. Wallich and Balles. Votes against mittee's ranges for the year, reflecting very large this action: None. (Mr. Balles voted as an altergovernment borrowing and strong private credit nate). growth, boosted in part by the unusual size of mergerrelated credit activity. Short-term interest rates have 2. Authorization for Domestic Open risen somewhat on balance since the December meeting of the Committee, but long-term rates are about Market Operations unchanged to a little lower. On December 21, the Federal Reserve approved a reduction in the discount At this meeting the Committee voted to increase rate from 8V2 to 8 percent. from $4 billion to $6 billion the limit on changes The Federal Open Market Committee seeks to fos- between Committee meetings in System account ter monetary and financial conditions that will help to holdings of U.S. government and federal agency reduce inflation further, promote growth in output on a securities specified in paragraph 1(a) of the ausustainable basis, and contribute to an improved pattern of international transactions. In furtherance of thorization for domestic open market operations, these objectives the Committee agreed at this meeting effective for the intermeeting period ending with to establish ranges for monetary growth of 4 to 7 the close of business on March 26, 1985. percent for Ml, 6 to 9 percent for M2, and 6 to 9'/2 percent for M3 for the period from the fourth quarter Votes for this action: Messrs. Volcker, Corrigan, of 1984 to the fourth quarter of 1985. The associated Boehne, Boykin, Gramley, Mrs. Horn, Messrs. range for total domestic nonfinancial debt was set at 9 Martin, Partee, Rice, Ms. Seger, Messrs. Wallich to 12 percent for the year 1985. The Committee agreed and Balles. Votes against this action: None. (Mr. that growth in the monetary aggregates in the upper Balles voted as an alternate). part of their ranges for 1985 may be appropriate, depending on developments with respect to velocity This action was taken on the recommendation and provided that inflationary pressures remain subof the Manager for Domestic Operations. The dued. Manager had advised that substantial net pur- The Committee understood that policy implementation would require continuing appraisal of the relation- chases of securities were likely to be necessary ships not only among the various measures of money over the upcoming intermeeting interval in order and credit but also between those aggregates and to offset the estimated absorption of reserves nominal GNP, including evaluation of conditions in stemming from technical factors including domestic credit and foreign exchange markets. changes in currency in circulation, vault cash, In the implementation of policy for the immediate future, taking account of the progress against inflation, and required reserves. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

335 Legal Developments AMENDMENTS TO REGULATIONS B, E, M, AND Z Effective March 4, 1985, the Board amends 12 C.F.R. Part 213 (Regulation M) as follows: The Board of Governors is making technical amendments to its Regulation B (Equal Credit Opportunity), Regulation E (Electronic Fund Transfers), Regula- Part 213—Consumer Leasing tion M (Consumer Leasing), and Regulation Z (Truth in Lending) to indicate that The Department of Trans- 1. In Appendix D, remove the words "Creditors portation has assumed the enforcement responsibil- Subject to Civil Aeronautics Board" and the address ities for the regulation previously carried out by the of that agency, and insert, in their place, the words Civil Aeronautics Board. "Air Carriers" and the following address: Effective March 4, 1985, the Board amends Assistant General Counsel for Aviation 12 C.F.R. Part 202 (Regulation B) as follows: Enforcement and Proceedings Department of Transportation 400 Seventh Street, S.W. Part 202—Equal Credit Opportunity Washington, D.C. 20590 1. In section 202.1(b)(1), remove the words "Civil Effective March 4, 1985, the Board amends Aeronautics Board" and insert, in their place, the 12 C.F.R. Part 226 (Regulation Z) as follows: words "Secretary of Transportation." 2. In Appendix A, remove the words "Creditors Subject to Civil Aeronautics Board" and the address Part 226—Truth in Lending of that agency, and insert, in their place, the words "Air Carriers" and the following address: 1. In Appendix I, remove the words "Creditors Sub- Assistant General Counsel for Aviation ject to Civil Aeronautics Board" and the address of Enforcement and Proceedings that agency, and insert, in their place, the words "Air Department of Transportation Carriers" and the following address: 400 Seventh Street, S.W. Assistant General Counsel for Aviation Washington, D.C. 20590 Enforcement and Proceedings Department of Transportation Effective March 4, 1985, the Board amends 400 Seventh Street, S.W. 12 C.F.R. Part 205 (Regulation E) as follows: Washington, D.C. 20590 Part 205—Electronic Fund Transfers AMENDMENTS TO REGULATIONS G, T, AND U 1. In section 205.13(a)(1), remove the words "Civil Aeronautics Board" and insert, in their place, the The Board of Governors is amending the definition words "Secretary of Transportation." of "margin stock" in Regulations G and U so as to 2. In Appendix B, remove the words "Creditors make it clear that the definition does not include Subject to Civil Aeronautics Board" and the address face-amount certificates as defined in 15 U.S.C. of that agency, and insert, in their place, the words 80a-2(a)(15) and, the "arranging" provision of Regula- "Air Carriers" and the following address: tion T to reflect that a broker-dealer selling these Assistant General Counsel for Aviation instruments would not be considered to be violating Enforcement and Proceedings that provision. Although the changes are being made Department of Transportation effective April 19, 1985, comments will be received 400 Seventh Street, S.W. until that date and appropriate modifications, if any, Washington, D.C. 20590 will be made in response to comments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin • May 1985 Effective April 19, 1985, the Board amends customer which does not violate parts 207 and 221 of 12 C.F.R. Part 207 as follows: this chapter and results solely from; Part 207—Securities Credit by Persons Other (a) investment banking services, provided by the cred- Than Banks, Brokers, or Dealers itor to the customer, including, but not limited to, underwritings, private placements, and advice and other services in connection with exchange offers, mergers, or acquisitions, except for underwri tings that involve the public distribution of an equity security Section 207.2—Definitions with installment or other deferred payment provisions; or (b) the sales of nonmargin securities (including securi- (i) "Margin stock means: ties with installment or other deferred payment provi- (1) any equity security registered or having unlisted sions) if the sale is exempted from the registration trading privileges on a national securities exchange; requirements of the Securities Act of 1933 under (2) any OTC margin stock; section 4(2) or section 4(6) of the act; or (3) any OTC security designated as qualified for trading in the National Market System under a (c) a subsequent loan or advance on a face-amount designation plan approved by the Securities and certificate as permitted under 15 U.S.C. 80a-28(d). Exchange Commission (NMS Security); (4) any debt security convertible into a margin stock Effective April 19, 1985, the Board amends or carrying a warrant or right to subscribe to or 12 C.F.R. Part 221, Regulation U, as follows: purchase a margin stock; (5) any warrant or right to subscribe to or purchase a Part 221—Credit by Banks for the Purpose of margin stock; or Purchasing or Carrying Margin Stock (6) any security issued by an investment company registered under section 8 of the Investment Compa- Section 221.2—Definitions ny Act of 1940 (15 U.S.C. 78c(a)(12)); or (i) a company licensed under the Small Business Investment Company Act of 1958, as amended (h) "Margin stock means: (12 U.S.C. 661); or (1) any equity security registered or having unlisted (ii) A company which has at least 95 per cent of its trading privileges on a national securities exchange; assets continuously invested in exempted securi- (2) any OTC margin stock; ties (as defined in 15 U.S.C. 78c(a)(12)); or (3) any OTC security designated as qualified for (iii) a company which issues face-amount certifi- trading in the National Market System under a cates as defined in 15 U.S.C. 80a-2(a)(15), but designation plan approved by the Securities and only with respect of such securities. Exchange Commission (NMS Security); (4) any debt security convertible into a margin stock Effective April 19, 1985, the Board amends or carrying a warrant or right to subscribe to or 12 C.F.R. Part 220, Regulation T, as follows: purchase a margin stock; (5) any warrant or right to subscribe to or purchase a Part 220—Credit by Brokers and Dealers margin stock; or (6) any security issued by an investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 78c(a)(12)); other than (i) a company licensed under the Small Business Section 220.13—Arranging for Loans by Others Investment Company Act of 1958, as amended (12 U.S.C. 661); or A creditor may not arrange for the extension or (ii) A company which has at least 95 per cent of its maintenance of credit to or for any customer by any assets continuously invested in exempted securiperson upon terms and conditions other than those ties (as defined in 15 U.S.C. 78c(a)(12)); or upon which the creditior may itself extend or maintain (iii) a company which issues face-amount certificredit under the provisions of this part, except that this cates as defined in 15 U.S.C. 80a-2(a)(15), but limitation shall not apply to credit arranged for a only with respect of such securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 337 ORDERS ISSUED UNDER BANK HOLDING Bank and Trust Company, Americus, Georgia ("Sum- COMPANY ACT, BANK MERGER ACT, AND ter Bank"), controls 21.1 percent of total deposits in SERVICE CORPORATION ACT commercial banks in the market.3 Bank controls 5.6 percent of commercial bank deposits in the market and Orders Issued Under Section 3 of Bank Holding ranks last among commercial banking organizations Company Act therein. After consummation of the proposal, Applicant would control 26.7 percent of the market's total CB&T Bancshares, Inc. deposits in commercial banks, and its rank would Columbus, Georgia remain unchanged. The Herfindahl-Hirschman Index ("HHI") in the banking market would increase by 237 Order Approving Acquisition of a Bank Holding points to 3444, and the market would be considered Company highly concentrated.4 Although consummation of the proposal would re- CB&T Bancshares, Inc., Columbus, Georgia, a bank sult in the elimination of existing competition, several holding company within the meaning of the Bank factors mitigate the competitive effects of the propos- Holding Company Act ("Act"), has applied for the al. The Board has considered Bank's small absolute Board's approval under section 3(a)(3) of the Act and relative size. With total deposits of only $6.9 (12 U.S.C. § 1842(a)(3)) to acquire F&M Bancshares, million, Bank controls less than one-tenth of one Inc. ("Bancshares"), Leslie, Georgia, and thereby percent of statewide deposits in commercial banks, indirectly acquire Bancshares' only subsidiary, Farm- and only 5.6 percent of the market's commercial bank ers & Merchants Bank ("Bank"), Leslie, Georgia. deposits. Moreover, the next largest commercial bank Notice of the application, affording opportunity for competitor in the market (Sumter Bank) controls a interested persons to submit comments, has been deposit base nearly four times as large as Bank.5 In given in accordance with section 3 of the Act. 49 addition, Bank is located in a small community on the Federal Register 46,199 (1984). The time for filing periphery of the market, which is a rural market. comments has expired, and the Board has considered The Board also has considered the presence of thrift the application and all comments received in light of institutions in the market as a factor in assessing the the factors set forth in section 3(c) of the Act. competitive effects of this proposal.6 Two thrift insti- Applicant is the seventh largest banking organiza- tutions compete in the Sumter County banking market tion in Georgia with total deposits of approximately with combined deposits of $53.7 million, representing $717 million, representing 2.8 percent of statewide approximately 30.5 percent of the total market deposcommercial bank deposits.1 Bancshares is a small banking organization, controlling 0.03 percent of statewide commercial bank deposits. Upon consummation of the proposed acquisition, Applicant will remain the 3. Unless otherwise indicated, market data are as of June 30, 1983. seventh largest banking organization in the state, and 4. Under the revised Department of Justice Merger Guidelines (49 Federal Register 26,823), a market in which the post-merger HHI is will control $724.5 million total deposits or 2.8 percent above 1800 is considered highly concentrated. In such markets, the of statewide commercial bank deposits. Accordingly, Department is likely to challenge a merger that produces an increase in the HHI of more than 50 points unless other factors indicate that the the Board concludes that consummation of this acquimerger will not substantially lessen competition. Other factors include sition would not have any significantly adverse effects the post-merger HHI, the increase in the HHI, changing market on the concentration of commercial banking resources conditions, the financial condition of the firm to be acquired, ease of entry, nature of the product, substitute products, similarities in firms in Georgia. that are subject to the transaction, and increased efficiencies that may Applicant is the third largest of four commercial result from the transaction. As noted below, several of these factors banking organizations in the Sumter County banking are present in this instance. If the increase in the HHI exceeds 100 points and the HHI market,2 where its subsidiary bank, Sumter County substantially exceeds 1800, the Department has indicated that only in extraordinary cases will other factors establish that the merger is not likely substantially to lessen competition. The Department has voiced no objection to the instant proposal. 5. The market's three remaining commercial bank competitors hold deposits of $25.8 million, $39.2 million, and $50.1 million, respective- 1. State banking data are as of December 31, 1983. ly. These institutions control over 94 percent of total deposits in 2. The Sumter County banking market is approximated by Sumter commercial banks in the market. County, Georgia. Applicant contends that a more appropriate defini- 6. The Board previously has concluded that thrift institutions have tion of the market would be an area encompassed within a 20-mile become, or at least have the potential to become, major competitors of radius of a point equidistant between Americus and Leslie, Georgia— commercial banks. The Chase Manhattan Corporation, 70 FEDERAL an area significantly larger than Sumter County. Upon a review of the RESERVE BULLETIN 529 (1984); NCNB Bancorporation, 70 FEDERAL information provided by Applicant, the Board continues to believe RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 that the area approximated by Sumter County remains the relevant FEDERAL RESERVE BULLETIN 802 (1983); First Tennessee National market for Bank's and Sumter Bank's services. Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin • May 1985 its.7 These thrifts are authorized to provide consumer By order of the Board of Governors, effective loans, NOW accounts and commercial real estate March 4, 1985. loans, and to engage in certain additional commercial lending. Based upon the number, size, and market Voting for this action: Chairman Volcker and Governors shares of these institutions in the Sumter County Martin, Wallich, Partee, Rice, Gramley, and Seger. market, the Board has concluded that thrift institutions exert a significant competitive influence in the JAMES MCAFEE Sumter County banking market.8 [SEAL] Associate Secretary of the Board After consideration of these factors in the context of the specific facts of this case, the Board concludes that consummation of this proposal would not have any Columbian Corporation significantly adverse effects on existing competition in Topeka, Kansas the Sumter County banking market. Thus, competitive effects are consistent with approval of the application. Order Approving Formation of a Bank Holding The financial and managerial resources and future Company prospects of Applicant, Bancshares, and the combined organization are consistent with approval of the pro- Columbian Corporation, Topeka, Kansas, has applied posal. Bank's affiliation with Applicant will allow it to for the Board's approval pursuant to section 3(a)(1) of take advantage of Applicant's technical expertise in the Bank Holding Company Act (the "Act") such areas as marketing, product development, invest- (12 U.S.C. § 1841(a)(1)) to become a bank holding ment advisory counseling services, mortgage lending, company by acquiring all of the voting shares of commercial and consumer credit, data processing, Topeka Bank Shares, Topeka, Kansas ("Topeka"), a automated banking, accounting and auditing. As a bank holding company within the meaning of the Act, branch of Sumter Bank, Bank will immediately be and thereby indirectly acquire Topeka Bank and provided with all of the services currently available to Trust, Topeka, Kansas ("Bank"). Sumter Bank.9 Thus, considerations relating to the Notice of the application, affording opportunity for convenience and needs of the communities to be interested persons to submit comments, has been served also are consistent with approval of the applica- given in accordance with section 3(b) of the Act. The tion. time for filing comments has expired and the Board Based upon the foregoing and all the facts of record, has considered the application and all comments rethe Board has determined that consummation of the ceived in light of the factors set forth in section 3(c) of transaction would be consistent with the public inter- the Act (12 U.S.C. § 1842(c)). est and that the application should be, and hereby is, Applicant currently is an insurance holding compaapproved. The transaction shall not be consummated ny controlled by members of the Sam McCaffree before the thirtieth calendar day following the effective family ("McCaffree family"), which engages in the date of this Order, or later than three months after the sale and underwriting of title insurance, the sale of effective date of this Order, unless such period is home warranty insurance, and mortgage servicing extended for good cause by the Board or by the activities through ten subsidiaries. The activities of all Federal Reserve Bank of Atlanta, pursuant to delegat- ten subsidiaries are impermissible for bank holding ed authority. companies under section 4 of the Act (12 U.S.C. § 1843). Applicant has committed to divest all ten subsidiaries prior to consummation of this proposal. Upon consummation of this proposal, Applicant would become the 173rd largest commercial banking organization in Kansas, controlling one bank with total deposits of $29.5 million, representing less than 0.2 7. Thrift data are as of June 30, 1983. Thrifts rank as the market's percent of total deposits in commercial banks in Kansecond and fifth largest depository institutions. Bank remains the smallest depository institution even after thrifts are included in the sas.1 Applicant is affiliated with Columbian Financial market. Corporation, Topeka, Kansas ("Columbian Finan- 8. If 50 percent of the deposits held by thrift institutions in the cial"), a bank holding company within the meaning of Sumter County banking market were included in the calculation of market concentration, Applicant would hold 17.3 percent of market the Act, through common control by the McCaffree deposits, Bank would hold 4.6 percent of total deposits, and their family. Columbian Financial is the 553rd largest comcombined market share would be 21.9 percent. The HHI would rise by mercial banking organization in Kansas, controlling 159 points to 2405. 9. Upon consummation of the proposal, Applicant intends to merge Bank into its existing bank subsidiary in the market and operate it under the name, and as a branch, of Sumter Bank. 1. Banking data are as of December 31, 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 339 one bank with total deposits of $5 million, representing the record contains no evidence that the banking needs less than 0.1 percent of total deposits in commercial of the community to be served are not being met. banks in Kansas. Applicant and Columbian Financial Accordingly, factors relating to the convenience and together would be the 136th largest commercial bank- needs of the community to be served are consistent ing organization in Kansas, controlling total deposits with approval. of $34.5 million, representing 0.2 percent of total Based on the foregoing and other facts of record, the deposits in commercial banks in the state. Consumma- Board has concluded that approval of the application tion of this proposal would have no significant effect is consistent with the public interest and that the on the concentration of banking resources in Kansas. application should be, and hereby is, approved. The Both Topeka and Columbian Financial compete in transaction shall not be consummated before the thirtithe Topeka banking market.2 Topeka is the seventh eth calendar day following the effective date of this largest of 16 commercial banking organizations in the Order, or later than three months after the effective banking market, controlling 3.2 percent of total depos- date of this Order, unless such period is extended for its in commercial banks in the market. Columbian good cause by the Board or by the Federal Reserve Financial is the smallest commercial banking organiza- Bank of Kansas City, acting pursuant to delegated tion in the market, controlling 0.5 percent of total authority. deposits in commercial banks in the market. Upon By order of the Board of Governors, effective consummation of the transaction, Applicant and Co- March 13, 1985. lumbian Financial together would be the seventh largest commercial banking organization in the market, Voting for this action: Chairman Volcker and Governors controlling 3.7 percent of the total deposits in commer- Martin, Partee, Rice, Gramley, and Seger. Absent and not cial banks in the market. voting: Governor Wallich. The Topeka banking market is considered to be moderately concentrated, with a four-firm concentra- JAMES MCAFEE [SEAL] Associate Secretary of the Board tion ratio of 70 percent and a Herfindahl-Hirschman Index ("HHI") of 1656.3 Upon consummation of this proposal, the four-firm concentration ratio would remain unchanged and the HHI would increase by 3 First American Bancshares, Inc. points to 1659. Accordingly, the Board concludes that New Orleans, Louisiana consummation of this proposal would have no significant adverse effect on existing competition. First National Bankshares, Inc. Where principals of an applicant are engaged in Houma, Louisiana operating a chain of banking organizations, the Board, in addition to analyzing the bank holding company Order Approving the Formation of a Bank Holding proposal before it, also considers and analyzes the Company and the Acquisition of a Bank Holding financial and managerial resources and future pros- Company pects of the entire banking organization under the Board's Capital Adequacy Guidelines.4 Based upon First American Bancshares, Inc., New Orleans, Louisuch an analysis in this case, the financial and manage- siana ("First American"), has applied for the Board's rial resources and future prospects of Applicant, Tope- approval under section 3(a)(1) of the Bank Holding ka, Columbian Financial, and their subsidiary banks Company Act, 12 U.S.C. § 1842(a)(1), to become a are generally satisfactory, especially in light of certain bank holding company by acquiring 95.1 percent of the commitments made by Applicant in connection with voting shares of the American Bank and Trust Compathis application. Applicant has proposed no new ser- ny, New Orleans, Louisiana ("Bank"). First National vices for Applicant or its subsidiary bank. However, Bankshares, Inc., Houma, Louisiana ("First National"), a bank holding company within the meaning of the Bank Holding Company Act ("Act") (12 U.S.C. § 1841 et seq.), has applied for the Board's approval under section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) 2. The Topeka banking market is defined as the Topeka Ranally Metro Area. to acquire 50 percent of First American. 3. Under the Department of Justice's revised Merger Guidelines (49 Notice of the applications, affording opportunity for Federal Register 26,823 (1984)), a market with a post-merger HHI between 1000 and 1800 is considered moderately concentrated. In interested persons to submit comments, has been such markets, the Department is unlikely to challenge a merger that given in accordance with section 3(b) of the Act. The produces an increase in the HHI of less than 100 points, as in this time for filing comments has expired and the Board case. 4. Capital Adequacy Guidelines, 12 C.F.R. § 225, Appendix A. has considered the applications and all comments Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin • May 1985 received in light of the factors set forth in section 3(c) that these applications would be in the public interest of the Act (12 U.S.C. § 1842(c)). and that the applications should be approved. These First National is the 27th largest commercial bank- transactions shall not be consummated before the ing organization in Louisiana, controlling one bank thirtieth calendar day following the effective date of with total deposits of $222.3 million, representing less this Order, or later than three months after the effecthan 1 percent of the total deposits in commercial tive date of this Order, unless such period is extended banks in the state.1 First American is a nonoperating for good cause by the Board or the Federal Reserve Louisiana corporation organized for the purpose of Bank of Atlanta, acting pursuant to delegated authorbecoming a bank holding company by acquiring Bank. ity. Bank is the 19th largest commercial bank in Louisiana, By order of the Board of Governors, effective with total deposits of $334.4 million, representing 1.2 March 13, 1985. percent of total deposits in commercial banks in the state. Upon consummation of this proposal, First Voting for this action: Vice Chairman Martin and Gover- National would control total deposits of $556.7 mil- nors Partee, Rice, Gramley, and Seger. Absent and not lion, representing approximately 2 percent of total voting: Chairman Volcker and Governor Wallich. deposits in commercial banks in the state, and it would become the ninth largest commercial banking organi- JAMES MCAFEE [SEAL] Associate Secretary of the Board zation in the state. Consummation of these proposals would have no significant effect on the concentration of banking resources in Louisiana. Bank is the 6th largest commercial banking organi- F.N.B. Corporation zation in the New Orleans banking market and con- Hermitage, Pennsylvania trols approximately 4.7 percent of the deposits in commercial banks therein.2 First National is the sec- Order Approving Acquisition of a Stock Savings and ond largest commercial banking organization in the Loan Association Houma banking market and controls one bank with deposits of $207.5 million, representing 31.1 percent of F.N.B. Corporation, Hermitage, Pennsylvania, a bank the market's deposits.3 Neither First National, First holding company within the meaning of the Bank American, nor any of their principals are associated Holding Company Act (the "BHC Act"), has applied with any other banking organization in the relevant for the Board's approval under section 4(c)(8) of the banking markets. Accordingly, no existing competi- BHC Act (12 U.S.C. § 1843(c)(8)), and section tion would be eliminated as a result of this proposal. 225.25(b)(1) of the Board's Regulation Y (12 C.F.R. The Board has also concluded that consummation of § 225.25(b)(1)), to acquire all of the shares of Metrothis proposal would not result in any significant ad- politan Savings Bank of Youngstown, Youngstown, verse effects on probable future competition in any Ohio ("Metropolitan"), a state-chartered savings and market. loan association insured by the Ohio Deposit Guaranty The financial and managerial resources of First Fund. Upon consummation of the proposed acquisi- National, its subsidiary, First American, and Bank are tion, Applicant will engage through Metropolitan in considered consistent with approval of this proposal. the activity of operating a savings and loan associa- First American and First National plan on expanding tion. Although the Board has not added the operation Bank's international activities and on making Bank a of a thrift institution to the list of activities specified in more active competitor in the market. Accordingly, section 225.25(b) of Regulation Y as generally permisconsiderations relating to the convenience and needs sible for bank holding companies, the Board has of the community to be served are consistent with determined in several individual cases that the operaapproval. tion of a thrift institution is closely related to banking.1 Based on the foregoing and other facts of record, As a result of amendments to the BHC Act conincluding the commitments submitted by the appli- tained in the Garn-St Germain Depository Institutions cants and their principals, the Board has determined 1. American Fletcher Corp., 60 FEDERAL RESERVE BULLETIN 868 (1974); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 (1977); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN 316 (1982); Citicorp, 68 FEDERAL RESERVE BULLETIN 656 (1982); Old 1. Banking data are as of December 31, 1983. Stone Corporation-, 69 FEDERAL RESERVE BULLETIN 812 (1983). A 2. The New Orleans banking market is approximated by the New recent Board staff study of thrift institutions supports the view that Orleans MSA. operating a thrift institution is closely related to banking. Bank 3. The Houma banking market is defined as Terrebone Parish, Holding Company Acquisitions of Thrift Institutions. September Louisiana. 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 341 Act of 1982, section 4(c)(8) of the BHC Act provides Metropolitan, a stock savings and loan association, that the Board may dispense with the notice and controls $192.5 million in assets and operates in the hearing requirements of section 4(c)(8) with regard to Youngstown, Ohio banking market. the acquisition of a thrift institution if the Board finds In view of the fact that Applicant's bank subsidiaries that an emergency exists that requires immediate and Metropolitan operate in separate banking markets action and the primary federal regulator of the institu- and there is no significant amount of direct competition concurs in this finding. (12 U.S.C. § 1843(c)(8); tion between them, consummation of the proposed 12 C.F.R. § 225.23(i)). Metropolitan is a thrift institu- acquisition would not have a significant effect on tion as that term is defined in section 2(i) of the BHC existing competition in any relevant market. In view of Act. On the basis of information provided by the Ohio the relatively small size of Metropolitan, and the Superintendent of Building and Loan Associations and number of potential entrants into its markets, the other facts of record, the Board finds that an emergen- Board finds that this acquisition would not have any cy exists that requires immediate action on this appli- significant adverse effect on potential competition. cation. Since Metropolitan does not have a federal Similarly, the overlapping share of the consumer firegulator, the Board has determined that no further nance market controlled by Applicant and Metropoliaction is necessary to authorize the Board to dispense tan is insignificant in comparison with the total market with notice and opportunity for hearing. volume. Moreover, there are a large number of com- As noted above, this application has been filed petitors in the consumer finance market and eliminaunder section 4(c)(8) of the BHC Act as a nonbanking tion of Applicant or Metropolitan as a competitor activity. The BHC Act defines a "bank" as an institu- would not have any significant adverse effects. Intion that accepts deposits that the depositor has a legal deed, the proposed acquisition would have a substanright to withdraw on demand and that is engaged in the tial beneficial impact on competition by ensuring the business of making commercial loans. (12 U.S.C. continued operation of Metropolitan as a viable insti- § 1841(c)). tution. Metropolitan is, and will continue to be after the Section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) proposed acquisition, a "thrift institution" as that authorizes a bank holding company to acquire a nonterm is defined in section 2(i) of the BHC Act. bank company where the activities of the nonbank (12 U.S.C. § 1841(i». Prior to obtaining FSLIC insur- company are determined by the Board to be "so ance, Metropolitan will not make commercial loans, closely related to banking or managing or controlling and subsequent to obtaining such insurance, will exer- banks as to be a proper incident thereto." The Act cise only those powers permitted to federally char- provides that the Board may make such determinatered savings and loan associations. Thus, the acquisi- tions by order or by regulation. As earlier stated, the tion of Metropolitan qualifies as a nonbanking Board has determined previously that the operation of acquisition, and after Metropolitan has obtained a thrift institution is closely related to banking, and FSLIC insurance, it may be retained by Applicant as a reaffirms that determination in this Order. nonbanking institution under the provisions of the With respect to the "proper incident" requirement, Garn-St Germain Act, which provide that any institu- section 4(c)(8) of the Act requires the Board to considtion that is insured by FSLIC is exempt from the er whether the performance of the activity by an definition of bank in the BHC Act. In this regard, affiliate of a holding company "can reasonably be Metropolitan must obtain the approval of the FSLIC expected to produce benefits to the public, such as to obtain FSLIC deposit insurance, and Applicant greater convenience, increased competition, or gains must register with the Federal Home Loan Bank in efficiency that outweigh possible adverse effects, Board under, and comply with, the provisions of the such as undue concentration of resources, decreased Savings and Loan Holding Company Act. Thus, the or unfair competition, conflicts of interests, or un- Board concludes that this application may properly be sound banking practices." considered under section 4 of the Act as a nonbanking In 1977, the Board considered the general question application. whether savings and loan association ("S&L") activi- Applicant controls two bank subsidiaries, both of ties are a proper incident to banking. At that time, the which are located in Pennsylvania, and has $447.9 Board determined that, as a general matter, S&L million in total assets.2 Applicant also operates a activities are not a proper incident to banking because consumer finance subsidiary, which has four offices the potential adverse effects of generally allowing located in the Youngstown, Ohio banking market. affiliations of banks and S&Ls were then sufficiently strong to outweigh any public benefits that might result in individual cases. (D.H. Baldwin & Co. 63 2. All banking data are as of December 31, 1984. FEDERAL RESERVE BULLETIN 280 (1977)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin • May 1985 Because of the considerations elaborated in D.H. Metropolitan to its customers and protecting the inter- Baldwin & Co., the Board has not been prepared to ests of Metropolitan's depositors. permit bank holding companies to acquire thrift insti- The affiliation of Applicant and Metropolitan is not tutions on a general basis. However, the Board has likely to result in unfair competition. To guard against consistently regarded the BHC Act as authorizing the possible adverse effects of affiliation in this case Board to permit such an acquisition, and the Board has between a banking organization and a savings and loan approved several such proposals involving failing association, including the potential for unfair competithrift institutions on the basis that any adverse effects tion and diversion of funds, the Board has relied on the of bank/thrift affiliations would be overcome by the following commitments offered by Applicant: public benefits of preserving the failing thrift institu- 1. Applicant will operate Metropolitan as a savings tion.3 In addition, Congress has recognized the need to and loan association having as its primary purpose allow bank holding companies to acquire failing feder- the provision of residential housing credit. Metroally insured thrift institutions in the Garn-St Germain politan will limit its activities to those currently Act. permitted to federal savings and loan associations The Board has reexamined, in the context of this under the Home Owners' Loan Act, but shall not application, the general adverse factors cited in the engage in any activity prohibited to bank holding Board's 1977 D.H. Baldwin decision, including regula- companies and their subsidiaries under section tory conflict, erosion of institutional rivalry, and the 4(c)(8) of the Bank Holding Company Act. These potential for undermining interstate banking prohibi- limitations will apply to Metropolitan's wholly tions. The Board has also considered the adverse owned service corporation, which shall have two factors that might be associated with this particular years from the date of this Order to complete the application,4 including the potential for unfair compe- divestiture of its impermissible real estate developtition, conflicts of interests, financial risks, diversion ment projects. of funds, and participation in impermissible activities. 2. Metropolitan will not establish or operate a re- In view of the unique circumstances that led to the mote service unit at any location outside Ohio. closing of Metropolitan and other privately insured 3. Metropolitan will not establish or operate institutions by the Governor of Ohio, the emergency branches at locations not permissible for national or legislation recently enacted by the Ohio legislature to state banks located in Ohio.6 remedy the problems faced by these institutions and 4. Metropolitan will be operated as a separate, their depositors,5 the need for a prompt solution in this independent, profit-oriented corporate entity and case, and the other considerations detailed below, the shall not be operated in tandem with any other Board has determined that- there are substantial bene- subsidiary of Applicant. Applicant and Metropolitan fits to the public associated with preserving Metropoli- will limit their operations to effect this condition, tan as a thrift competitor sufficient to outweigh the and will observe the following conditions: generalized adverse effects found by the Board in the a. No banking or other subsidiary of Applicant D.H. Baldwin case. will link its deposit-taking activities to accounts at The Board considers Applicant's acquisition of Met- Metropolitan in a sweeping arrangement or simiropolitan to be a substantial and compelling public lar arrangement. benefit in that Applicant will provide Metropolitan b. Neither Applicant nor any of its subsidiaries with sufficient new capital funds to enable Metropoli- will solicit deposits or loans for Metropolitan, nor tan to continue its operations and to remain a viable shall Metropolitan solicit deposits or loans for any competitor. The record establishes that Applicant has other subsidiary of Applicant. the financial and managerial resources and commit- 5. Applicant will not change Metropolitan's name in ment to serving the convenience and needs of the any manner that might confuse the public regarding public to achieve this result. The acquisition will Metropolitan's status as a nonbank thrift institution. preserve a competitor in the markets served by Metro- 6. Metropolitan will not convert its charter to that of politan, thus ensuring the continuation of services by a national or state commercial bank without the Board's prior approval. 3. Interstate Financial Corp., supra; Citicorp, supra; Old Stone Corporation, supra. 4. As stated above, the Board has examined the competitive effects associated with this particular application and has concluded that 6. The Federal Reserve Bank of Cleveland is hereby delegated there are no significant adverse effects associated with the proposed authority to act on applications by Applicant to open additional offices acquisition. of Metropolitan under section 225.25(b)(1) of Regulation Y. 5. Ohio Am. Sub. S.B. No. 119 § 8 (March 19, 1985). (12 C.F.R. § 225.25(b)(1)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 343 7. To the extent necessary to insure independent Founders Bancorporation, Inc. operation of Metropolitan and prevent the improper Oklahoma City, Oklahoma diversion of funds, there shall be no transactions between Metropolitan and Applicant or any of its Order Approving Merger of Bank Holding subsidiaries without the prior approval of the Feder- Companies al Reserve Bank of Cleveland. This limitation encompasses the transfer, purchase, sale or loan of Founders Bancorporation, Inc., Oklahoma City, Oklaany assets or liabilities, but does not include infu- homa, a bank holding company within the meaning of sions of capital from Applicant, the payment of the Bank Holding Company Act ("Act") (12 U.S.C. dividends by Metropolitan to Applicant, or the sale § 1841 et seq.), has applied for the Board's approval of residential real estate loans from Metropolitan to pursuant to section 3(a)(5) of the Act (12 U.S.C. any subsidiary of Applicant. § 1842(a)(5)) to merge with Commerce Bancshares, 8. F.N.B. Corporation will cooperate with Metro- Inc., Oklahoma City, Oklahoma ("Commerce"), also politan in applying for and obtaining FSLIC insur- a bank holding company, and thereby indirectly acance. quire Commerce Bank, The Village, Oklahoma ("Commerce Bank"). At the time of the merger of The Board concludes that consummation of the Applicant and Commerce, Applicant's subsidiary proposal, subject to the commitments set out above, bank, Founders Bank & Trust Company, Oklahoma may reasonably be expected not to result in conflicts City, Oklahoma ("Founders Bank"), and Commerce of interests, unsound banking practices, undue con- Bank will merge and continue under Founders Bank's centration of resources, or other adverse effects. name and charter.1 Based upon the foregoing and other facts and cir- Notice of the application, affording opportunity for cumstances reflected in the record, the Board has interested persons to submit comments, has been determined that the acquisition of Metropolitan by given in accordance with section 3(b) of the Act. The Applicant would result in substantial and compelling time for filing comments has expired and the Board public benefits that are sufficient to outweigh any has considered the application and all comments readverse effects that may reasonably be expected to ceived in light of the factors set forth in section 3(c) of result from this proposal, including any potential ad- the Act (12 U.S.C. § 1842(c)). verse effects of the affiliation of a commercial banking Applicant and Commerce are both controlled by the organization with a thrift institution. Accordingly, the Charles A. Vose family ("Vose family"). The Vose application is approved subject to the commitments family was instrumental in chartering Commerce Bank described in this Order, and the record of this applica- in 1962 and acquired control of Founders Bank in tion. 1970. Accordingly, this proposal represents a reorgani- The Board's decision is further subject to the condi- zation of existing ownership interests. The family also tions set forth in Regulation Y, including sections controls four other commercial banking organizations, 225.4(d) and 225.23(b), and to the Board's authority to all in Oklahoma. require such modification or termination of the activi- Applicant is the 18th largest commercial banking ties of a holding company or any of its subsidiaries as organization in Oklahoma, controlling one bank with the Board finds necessary to assure compliance with, total deposits of $157.3 million, representing 0.6 peror to prevent evasion of, the provisions and purposes cent of total deposits in commercial banks in Oklahoof the Act and the Board's regulations and orders ma.2 Commerce is the 43rd largest banking organizaissued thereunder. The transaction shall be made not tion in Oklahoma, controlling one bank with total later than three months after the effectve date of this deposits of $96.4 million, representing 0.4 percent of Order, unless that period is extended for good cause total deposits in commercial banks in Oklahoma. by the Board or by the Federal Reserve Bank of Upon consummation of this proposal, Applicant Cleveland pursuant to authority hereby delegated. would become the eighth largest commercial banking By order of the Board of Governors, effective organization in the state, controlling total deposits of March 22, 1985. $253.7 million, representing 1.0 percent of total deposits in commercial banks in the state. Applicant, togeth- Voting for this action: Chairman Volcker, Governors Martin, Partee, Rice, and Gramley. Absent and not voting: Governors Wallich and Seger. 1. On January 10, 1985, the FDIC approved the application pursuant to the Bank Merger Act (12 U.S.C. § 1828), of Founders Bank to merge with Commerce Bank. WILLIAM W. WILES 2. Banking data are as of December 31, 1983, unless otherwise [SEAL] Secretary of the Board indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin • May 1985 er with its four affiliated commercial banking organiza- million, representing 25.2 percent of total deposits in tions, would be the third largest commercial banking commercial banks in the market. organization in Oklahoma, controlling 8.2 percent of The Oklahoma City banking market was considered total deposits in commercial banks in the state. Bank- to be moderately concentrated in 1970, with a fouring resources in Oklahoma are not highly concentrat- firm concentration ratio of 63.7 percent and a Herfined, with the four largest commercial banking organiza- dahl-Hirschman Index ("HHI") of 1390.6 Upon actions in the state controlling only 28.5 percent of total quisition of Founders Bank by the Vose family, the deposits in commercial banks in the state. According- four-firm concentration ratio increased by 0.8 percent ly, consummation of this proposal would not result in to 64.5 percent and the HHI increased by 39 points to any significant increase in the concentration of bank- 1429. Accordingly, the Board concludes that the acing resources in Oklahoma. quisition of Founders Bank in 1970 had no significant Both Applicant and Commerce compete in the Okla- adverse effect on existing competition. homa City banking market.3 Applicant is the ninth Where principals of an applicant are engaged in largest commercial banking organization in the bank- operating a chain of banking organizations, the Board, ing market, controlling 1.8 percent of total deposits in in addition to analyzing the bank holding company commercial banks in the market. Commerce is the proposal before it, also considers and analyzes the 18th largest commercial banking organization in the financial and managerial resources and future prosbanking market, controlling 1.1 percent of total depos- pects of the entire banking organization under the its in commercial banks in the market. Upon consum- Board's Capital Adequacy Guidelines.7 Based upon mation, Applicant would be the sixth largest commer- such an analysis in this case, the financial and managecial banking organization in the market, controlling 2.9 rial resources and future prospects of Applicant, Compercent of total deposits in commercial banks in the merce, their subsidiary banks and their affiliated bankmarket. Applicant is also affiliated with two other ing organizations are consistent with approval, commercial banking organizations located in the Okla- especially in light of certain commitments made by homa City banking market. Applicant and the two Applicant in connection with this application. Appliaffiliated banking organizations located in the banking cant has proposed no new services for Applicant or its market would become the largest commercial banking subsidiary bank. However, the record contains no organization in the market, controlling total deposits evidence that the banking needs of the community to of $2.1 billion, representing 24.8 percent of total be served are not being met. Accordingly, factors deposits in commercial banks in the market. relating to the convenience and needs of the communi- In analyzing the competitive effects of a proposal ty to be served are consistent with approval. such as this one, involving banking organizations Based on the foregoing and other facts of record, the located in the same market and under common con- Board has concluded that approval of the application trol, the Board considers the competitive effects of the is consistent with the public interest and that the transaction whereby common control of the institu- application should be, and hereby is, approved. The tions was established.4 In 1970, prior to its acquisition transaction shall not be consummated before the thirtiof Founders Bank, the Vose family controlled three eth calendar day following the effective date of this commercial banks, including Commerce Bank. To- Order, or later than three months after the effective gether, these institutions constituted the second larg- date of this Order, unless such period is extended for est commercial banking organization in the market, good cause by the Board or by the Federal Reserve controlling total deposits of $427.3 million, represent- Bank of Kansas City, acting pursuant to delegated ing 24.4 percent of total deposits in commercial banks authority. in the market.5 Founders Bank was the 20th largest By order of the Board of Governors, effective commercial banking organization in the market, con- March 1, 1985. trolling total deposits of $13.8 million, representing 0.8 percent of total deposits in commercial banks in the Voting for this action: Chairman Volcker and Governors market. Upon acquisition of Founders, the combined Martin, Wallich, Partee, Rice, and Seger. Absent and not voting: Governor Gramley. banking organization controlled by the Vose family became the largest commercial banking organization JAMES MCAFEE in the market, controlling total deposits of $441.1 [SEAL] Associate Secretary of the Board 6. Under the Department of Justice's revised Merger Guidelines (49 Federal Register 26,823 (1984)), a market with a post-merger HHI 3. The Oklahoma City banking market is defined as the Oklahoma between 1000 and 1800 is considered moderately concentrated. In City Ranally Metro Area. such markets, the Department is unlikely to challenge a merger that 4. See Mid-Nebraska Bancshares, Inc. v. Board of Governors, 627 produces an increase in the HHI of less than 100 points, as in this F.2d 26 (D.C. Cir., 1980). case. 5. Banking data for 1970 are as of December 31, 1970. 7. Capital Adequacy Guidelines, 12 C.F.R. § 225, Appendix A. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 345 Green Mountain Financial Services Corporation would be consistent with the public interest and that Wilmington, Delaware the application should be and hereby is approved. The transaction shall not be consummated before the thirti- Order Approving Formation of a Bank Holding eth calendar day following the effective date of this Company Order, or later than three months after the effective date of this Order, unless such period is extended for Green Mountain Financial Services Corporation, Wil- good cause by the Board or the Federal Reserve Bank mington, Delaware, has applied for the Board's ap- of Boston, acting pursuant to delegated authority. proval under section 3(a)(1) of the Bank Holding By order of the Board of Governors, effective Company Act ("Act") (12 U.S.C. § 1842(a)(1)) to March 25, 1985. become a bank holding company by acquiring up to 38 percent of the voting shares of Green Mountain Bank, Voting for this action: Chairman Volcker and Governors Winhall Township, Vermont ("Bank"). Martin, Partee, Rice, and Gramley. Absent and not voting: Notice of the application, affording opportunity for Governors Wallich and Seger. interested persons to submit comments, has been given in accordance with section 3(b) of the Act. The JAMES MCAFEE time for filing comments has expired and the Board [SEAL] Associate Secretary of 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. § 1842(c)). The Long-Term Credit Bank of Japan, Limited Applicant is a nonoperating corporation with no Tokyo,Japan subsidiaries, formed for the purpose of acquiring Bank. Bank is the 23rd largest commercial banking Order Approving Formation of Bank Holding organization in Vermont, with total deposits of $13.6 Company million, representing approximately 4 percent of total deposits in commercial banks in the state.1 Principals The Long-Term Credit Bank of Japan, Limited, Toof Applicant are also principals of Bank. Accordingly, kyo, Japan has applied for the Board's approval under this proposal represents a restructuring of ownership section 3(a)(1) of the Bank Holding Company Act interests in Bank. (12 U.S.C. § 1842(a)(1)) ("BHC Act") to become a Bank operates in the Bennington banking market,2 bank holding company by expanding the activities of where it is the smallest of six commercial banks in the its wholly owned, limited-purpose trust company, market, controlling 4.8 percent of total deposits in LTCB Trust Company, New York, New York ("Comcommercial banks therein. Principals of Applicant are pany"), to include making commercial loans and taknot affiliated with any other depository organization in ing demand deposits, thereby operating Company as a this market. Consummation of this proposal would not "bank" as defined under section 2(c) of the BHC Act result in any adverse effects upon competition or (12 U.S.C. § 1841(c)). increase the concentration of banking resources in any Notice of the application, affording opportunity for relevant area. Accordingly, the Board concludes that interested persons to submit comments, has been competitive considerations are consistent with ap- given in accordance with section 3(b) of the Act. The proval. time for filing comments has expired, and the Board The financial and managerial resources of Applicant has considered the application and all comments reand Bank are consistent with approval of this applica- ceived in light of the factors set forth in section 3(c) of tion. Although Applicant has proposed no new ser- the Act (12 U.S.C. § 1842(c)). vices for Bank upon acquisition, there is no evidence Applicant, a publicly owned company with total that the banking needs of the community to be served assets equivalent to approximately $70 billion,1 ranks are not being met. Accordingly, considerations relat- as the second largest of three long-term credit banks ing to the convenience and needs of the communities and the tenth largest private bank in Japan.2 Applicant to be served are consistent with approval. Based on the foregoing and other facts of record, the Board has determined that approval of the application 1. Banking data are as of September 30, 1984. 2. Applicant's principal activity is the extension to Japanese industries of long-term credit in the form of secured loans, discounts and guarantees, obtained primarily from the issuance of yen-denominated debentures. Long-term credit banks may accept deposits from finan- 1. Banking data are as of December 31, 1984. cial institutions and their own clients but not from the general public, 2. The Bennington banking market is defined as Bennington Coun- and are also permitted under Japanese law to underwrite and sell ty and the town of Danby in Rutland County, Vermont, and Stanford central and local government bonds and government-guaranteed and Readsboro townships in Massachusetts. bonds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin • May 1985 is the 23rd largest bank worldwide. Applicant operates cant to maintain Bank among the more strongly capi- 17 branches in Japan, and operates foreign branches in talized banking organizations of comparable size in the London and Singapore. In the United States, Appli- United States. In view of these and other facts of cant operates a branch in New York, its home state, record, the Board finds that considerations relating to and an agency in Los Angeles, which have total assets banking factors are consistent with approval of the of $4.1 billion and $1.0 billion, respectively.3 Appli- application. cant has merchant bank subsidiaries in Hong Kong The Board has also determined that considerations and Switzerland and a finance subsidiary in the Neth- relating to the convenience and needs of the communierlands Antilles. ty to be served are consistent with approval. Based Applicant proposes to convert Company, with as- upon the foregoing and other facts of record, the sets of $18.3 million, to an FDIC-insured commercial Board has determined that consummation of the transbank ("Bank").4 Bank will serve the Metropolitan action would be consistent with the public interest and New York banking market5 by extending credit ser- that, subject to certain conditions, the application vices to the corporate market, and by lending primari- should be and hereby is approved. The transaction ly to U.S. public utilities, subsidiaries of Japanese shall not be made before the thirtieth calendar day companies, and U.S.-Japanese joint ventures. In addi- following the effective date of this Order, or later than tion, Bank will continue to offer corporate trust ser- three months after the effective date of this Order, vices. In view of the de novo status of Bank, and based unless such period is extended for good cause by the upon the facts of record, the Board concludes that the Board or by the Federal Reserve Bank of New York proposed transaction will have no adverse effect on pursuant to delegated authority. competition. Accordingly, competitive considerations By order of the Board of Governors, effective are consistent with approval of this application. March 25, 1985. Section 3(c) of the Act requires in every case that the Board consider the financial resources of the Voting for this action: Chairman Volcker and Governors applicant and the bank to be acquired. In this case, the Martin, Wallich, Partee, Rice, Gramley, and Seger. Board noted that the primary capital ratio of Applicant is below the minimum capital guidelines established by JAMES MCAFEE the Board for U.S. multinational bank holding compa- [SEAL] Associate Secretary of the Board nies. On previous occasions, however, the Board has determined that certain factors could mitigate its concerns regarding a foreign banking organization's failure to comply with the minimum capital guidelines. Orders Issued Under Section 4 of Bank Holding The Board notes that Applicant will establish Bank Company Act de novo, which initially will be small in relation to Applicant, and will be strongly capitalized.6 First Security Corporation Based on these and other facts of record, the Board Salt Lake City, Utah concludes that Applicant's financial and managerial factors are consistent with approval of the application. Order Approving Application to Engage De Novo in As Bank's size increases, the Board will expect Appli- General Insurance Agency Activities First Security Corporation, Salt Lake City, Utah, a bank holding company within the meaning of the Bank 3. Applicant selected New York as its home state pursuant to Holding Company Act of 1956, as amended (12 U.S.C. Section 5 of the IBA (12 U.S.C. § 3103). Unless otherwise indicated, § 1841 et seq.) (the "BHC Act"), has applied under all banking data are as of December 31, 1984. 4. On January 3, 1985, the New York State Banking Department section 4(c)(8) of the Act (12 U.S.C. § 1843 (c)(8)) and approved Applicant's proposal. An application with the FDIC to section 225.23(a)(1) of the Board's Regulation Y obtain insurance for Bank is pending. 5. The Metropolitan New York banking market is defined to (12 C.F.R. 225.23(a)(1)) for approval to engage include New York City, Nassau, Westchester, Rockland, Putnam and de novo, through its subsidiary, First Security Insurwestern Suffolk Counties in New York; portions of Bergen and ance, Inc., in general insurance agency activities in the Hudson Counties in New Jersey; and a portion of Fairfield County in Connecticut. state of Utah. 6. See, e.g., The Commercial Bank of Korea, Ltd., 70 FEDERAL Notice of the application, affording interested per- RESERVE BULLETIN 36 (1984) (where the Board approved the establishment of a bank holding company despite a primary capital ratio sons an opportunity to submit comments, was duly below the minimum required of U.S. multinational bank holding published (50 Federal Register 3977 (1985)). The time companies because the bank was to be established de novo, was for filing comments has expired and the Board has strongly capitalized, and was small in relation to Commercial Bank of Korea's total assets). considered this application and all comments received Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 347 in light of the public interest factors set forth in section through this insurance agency subsidiary on a continu- 4(c)(8) of the BHC Act. ous basis since receiving Board approval in 1969. Applicant, with consolidated assets of $5.1 billion,1 Applicant, therefore, is one of 16 active companies controls four subsidiary banks and is the largest com- with grandfather rights under exemption G. mercial banking organization in Utah. Applicant pro- Applicant now seeks approval to expand its insurposes to expand the activities of its insurance agency ance agency activities through the operation in Utah of subsidiary, First Security Insurance, Inc., to include a general insurance agency engaged in the sale of all the sale of all types of personal and commercial types of personal and commercial insurance to the insurance, including, but not limited to, property and general public as well as to Applicant's customers. casualty insurance and life insurance. Applicant will Applicant did not sell insurance other than creditalso expand by offering these services to the general related insurance pursuant to Board approval prior to public as well as to customers of Applicant's lending 1971. Nevertheless, the Board has determined in its subsidiaries. Order involving First Wisconsin Corporation, 71 FED- Title VI of the Garn-St Germain Depository Institu- ERAL RESERVE BULLETIN 171 (1985), that bank holdtions Act of 1982 ("the Garn Act") amended section ing companies that qualify under exemption G are 4(c)(8) of the BHC Act to provide that insurance authorized to engage in general insurance agency agency, brokerage, and underwriting activities are not activities and thus to sell various types of insurance "closely related to banking" and thus are not permis- they were not selling with Board approval prior to sible activities for bank holding companies, unless the 1971.4 activities are included within one of seven specific The Board found this conclusion is supported by the exemptions (A through G) contained in section 4(c)(8). language of exemption G and by a reading of exemp- Applicant claims it is authorized to operate a general tion G in the context of the other exemptions, particuinsurance agency engaged in the sale of all types of larly exemption D. The Board also relied upon the personal and commercial insurance under exemption limited scope of exemption G, which affects only 16 G, which authorizes insurance agency activities for bank holding companies. Finally, the Board based its those bank holding companies engaged in insurance conclusion to allow all qualifying companies to engage agency activities with Board approval prior to 1971. in general insurance agency activities on a reading of Unless Applicant's proposal qualifies under this ex- exemption G in the context of the Board's pre-1971 emption, the operation of a general insurance agency orders by which exemption G eligibility is defined. For as proposed by Applicant is not a permissible activity these reasons, as set forth more completely in its under section 4(c)(8) of the BHC Act.2 decision in its Order in First Wisconsin Corporation, Applicant was engaged in the operation of a general supra, the Board concludes that Applicant may engage insurance agency from 1931 through 1959 when it spun in general insurance agency activities under exemption this general insurance agency off to a separate corpo- G. ration controlled by Applicant's shareholders. Appli- There is no evidence in the record indicating that cant has also been engaged in the sale of credit-related consummation of Applicant's proposal would result in insurance through a subsidiary bank since 1959. In any undue concentration of resources, adverse effects 1969, Applicant received approval from the Board, on competition, conflicts of interests, unsound bankunder the provisions of the Bank Holding Company ing practices, or any other adverse effects. Applicant Act of 1956, as amended, to acquire an insurance will provide an additional source for insurance that is agency subsidiary, First Security Insurance, Inc., particularly convenient for its customers and an addiwhich engaged in the sale of credit life and disability tional source for special types of insurance that may insurance, credit accident insurance, decreasing term not otherwise be generally available. It will engage in mortgage insurance, and property damage insurance the sale of new types of insurance de novo, and it has to customers of Applicant.3 Applicant has been en- indicated that it will act affirmatively to ensure compligaged in the sale of such credit-related insurance ance with all laws and regulations prohibiting tie-ins. Applicant will explicitly inform its subsidiary bank 1. All banking data are as of December 31, 1984, unless otherwise indicated. 3. 55 FEDERAL RESERVE BULLETIN 667 (1969). 2. Applicant does not qualify under the other relevant exemptions, 4. The Board has previously interpreted exemption G to permit including exemption C, which allows general insurance agency activi- bank holding companies qualifying under exemption G to engage in ties by bank holding companies in towns with a population not the sale of insurance "without restriction on location" and thus exceeding 5,000, and exemption F, which permits general insurance without regard to where such companies may have engaged in the sale agency activities (except the sale of life insurance) by small bank of insurance prior to 1971. Norwest Corporation, 70 FEDERAL REholding companies with consolidated assets of less than $50 million. SERVE BULLETIN 235 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin • May 1985 customers that they need not purchase insurance from insurance agency in a community with a population of Applicant in order to obtain credit or other bank less than 5,000 persons. This activity has been deterservices. Accordingly, the Board has determined that mined by the Board to be closely related to banking the balance of the public interest factors the Board is under section 225.25(b)(8)(ii) of Regulation Y required to consider under section 4(c)(8) of the BHC (12 C.F.R. § 225.25(b)(8)(ii)). Act is favorable. Notice of these applications, affording an opportuni- Based upon the foregoing and other facts of record, ty for interested persons to submit comments and the application is hereby approved. This determination views, has been given in accordance with sections 3 is subject to the conditions set forth in section and 4 of the Act (50 Federal Register 1274 (1985)). The 225.23(b) of Regulation Y (12 C.F.R. § 225.23(b)) and time for filing comments and views has expired and the to the Board's authority to require such modification Board has considered the applications and all comor termination of the activities of a bank holding ments received in light of the factors set forth in company or any of its subsidiaries as the Board finds section 3(c) (12 U.S.C. § 1842(c)) and the considernecessary to assure compliance with the provisions ations specified in section 4(c)(8) of the Act. and purposes of the BHC Act and the Board's regula- Applicant, a non-operating corporation with no subtions and orders issued thereunder, or to prevent sidiaries, was organized for the purposes of acquiring evasion thereof. Bank and of operating as a general insurance agency. The proposal shall be consummated not later than Upon acquisition of Bank (total deposits of $10.5 three months after the effective date of this Order, million), Applicant would control the 291st largest of unless such period is extended for good cause by the 474 banking organizations in Nebraska, and would Board or by the Federal Reserve Bank of San Francis- hold less than 0.1 percent of total deposits in commerco, pursuant to delegated authority. cial banks in the state.1 Consummation of the transac- By order of the Board of Governors, effective tion would not have any significant adverse effects March 11, 1985. upon the concentration of banking resources in the state. Voting for this action: Chairman Volcker and Governors Bank is the fourth largest of seven banks in the Martin, Partee, Rice, Gramley, and Seger. Absent and not Furnas County banking market, controlling 11.9 pervoting: Governor Wallich. cent of deposits in commercial banks in the market.2 Neither Applicant nor any of its principals is a princi- JAMES MCAFEE pal of any other banking organization in the market. [SEAL] Associate Secretary of the Board Thus, consummation of the proposal would not appear to have any adverse effects upon competition or increase the concentration of banking resources in any Orders Issued Under Sections 3 and 4 of Bank relevant area. Holding Company Act The financial and managerial resources of Applicant and Bank are considered generally satisfactory and the Oxford Agency, Inc. prospects for each appear favorable. Although Appli- Oxford, Nebraska cant proposes to incur debt in connection with its proposal, it appears that Applicant will be able to Order Approving Applications to Form a Bank service its debt while maintaining required capital Holding Company and Engage in General Insurance within the Board's guidelines.3 Although consumma- Agency Activities tion of the proposal would effect no changes in the services offered by Bank, considerations relating to Oxford Agency, Inc., Oxford, Nebraska ("Applicant"), has applied for the Board's approval under section 3(a)(1) of the Bank Holding Company Act 1. All deposit data are as of December 31, 1983, unless otherwise (12 U.S.C. § 1842(a)(1)) to become a bank holding noted. company by acquiring all of the voting stock of Securi- 2. The Furnas County banking market is approximated by Furnas County, Nebraska. ty State Bank, Oxford, Nebraska ("Bank"). 3. The Board has analyzed the financial factors of this proposal Applicant has also applied for the Board's appro- under the Board's "Policy Statement for Assessing Financial Factors val under section 4(c)(8) of the Act (12 U.S.C. in the Formation of Small One-Bank Holding Companies," 66 FEDER- AL RESERVE BULLETIN 320 (1980), as amended by the Board's § 1843(c)(8)) and section 225.23(a)(2) of the Board's "Capital Adequacy Guidelines," 68 FEDERAL RESERVE BULLETIN 33 Regulation Y (12 C.F.R. § 225.23 (a)(2)) to acquire the (1982). The guidelines in the policy statement were developed in order assets of Oxford Insurance Agency ("Agency") and to facilitate the transfer of ownership of small, community banks, thereby promoting service to the convenience and needs of the thereby to engage directly in the activities of a general community. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 349 the convenience and needs of the community to be effects on the public interest. Accordingly, the Board served are consistent with approval. Accordingly, the has determined that the balance of public interest Board has determined that consummation of the trans- factors it must consider under section 4(c)(8) of the action would be in the public interest and that the Act is favorable and consistent with approval of this application to acquire Bank should be approved. application. Applicant has also applied, pursuant to section Based on the foregoing and other facts of record, the 4(c)(8) of the Act, to engage in the activities of a Board has determined that the applications under general insurance agency in a community with a sections 3(a)(1) and 4(c)(8) of the Act should be and population not exceeding 5,000. Applicant proposes to hereby are approved. The transaction shall not be acquire all of the operating assets of Agency, a general made before the thirtieth calendar day following the insurance agency which conducts its business in the effective date of this Order or later than three months building occupied by Bank in Oxford, Nebraska, a after the effective date of this Order, unless such town of approximately 1,100 persons. Following con- period is extended for good cause by the Board or by summation of this acquisition, Applicant would engage the Federal Reserve Bank of Kansas City, acting directly in general insurance agency activities. This pursuant to delegated authority. proposal would assure the residents of the Oxford area By order of the Board of Governors, effective of the continued availability of a convenient source of March 22, 1985. insurance agency services, a factor which the Board regards as being in the public interest. There is no Voting for this action: Chairman Volcker and Governors evidence in the record to indicate that approval of this Martin, Partee, Rice, and Gramley. Absent and not voting: proposal would result in undue concentration of re- Governors Wallich and Seger. sources, decreased or unfair competition, conflicts of JAMES MCAFEE interest, unsound banking practices or other adverse [SEAL] Associate Secretary of the Board Legal Developments continued on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin • May 1985 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During March 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) FirstBank Holding Company of FirstBank of Breckenridge, N.A. March 7, 1985 Colorado, Summit County, Colorado Lake wood, Colorado FirstBank Holding Company, Lake wood, Colorado Liberty United Banccorp, Inc., CF Bancorp, Inc., February 27, 1985 Louisville, Kentucky Louisville, Kentucky Citizens State Bank, Owensboro, Kentucky Society Corporation, Scioto Bank, March 22, 1985 Cleveland, Ohio Columbus, Ohio TexAm Bancshares, Inc., Bridge City State Bank, March 1, 1985 Bridge City, Texas Bridge City, Texas Peoples State Bank, Shepherd, Texas United Bankshares, Inc., The First National Bank of Ripley, March 26, 1985 Parkersburg, West Virginia Ripley, West Virginia 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 American Bankshares, Inc., The Security Bank, Richmond February 22, 1985 War, West Virginia Fairmont, West Virginia ANB Corporation, American National Bank and Chicago February 15, 1985 Muncie, Indiana Trust Company of Muncie, Muncie, Indiana Andover Banc Shares, Inc., National Bank of Andover, Kansas City March 1, 1985 Wichita, Kansas Andover, Kansas Bank of New Hampshire Cor- Strafford National Bank, Boston March 22, 1985 poration, Dover, New Hampshire Manchester, New Hampshire Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 351 Section 3—Continued . .. n i / \ Reserve Effective Applicant Bank(s) ^ BanR The Bank of New Mexico The Bank of Northern New Kansas City March 19, 1985 Holding Company, Mexico, Albuquerque, New Mexico Las Vegas, New Mexico Banterra Corp., Egypt Bancorp, Inc., St. Louis March 15, 1985 Eldorado, Illinois Marion, Illinois Barnett Banks of Florida, Inc., Cawthon State Bank, Atlanta March 14, 1985 Jacksonville, Florida Defuniak Springs, Florida Bement Bancshares, Inc., The American Bank, Chicago March 1, 1985 Bement, Illinois Cerro Gordo, Illinois First National Bank of Ivesdale, Ivesdale, Illinois Carlisle Bancshares, Inc., Grand Prairie Bancshares, Inc., St. Louis March 1, 1985 Little Rock, Arkansas Carlisle, Arkansas Citizens Bank and Trust, Carlisle, Arkansas Citibancshares, Inc., Citibanc Holding Co., Inc., Kansas City March 5, 1985 Muskogee, Oklahoma Muskogee, Oklahoma City Bank, Muskogee, Oklahoma Citizens Bancshares, Inc., Citizens First State Bank of Chicago March 22, 1985 Walnut, Illinois Walnut, Walnut, Illinois Comprehensive Investment The Farmers State Bank, Chicago February 27, 1985 Company, Bayard, Iowa Coon Rapids, Iowa Cromwell Financial Corp., The Cromwell State Bank, Chicago March 6, 1985 Cromwell, Indiana Cromwell, Indiana Dahlonega Bancorp, Inc., The Bank of Ellijay, Atlanta March 8, 1985 Dahlonega, Georgia Ellijay, Georgia Egypt Bancorp, Inc., Bank of Egypt, St. Louis March 15, 1985 Marion, Illinois Marion, Illinois Evangeline Bancshares, Inc. The Evangeline Bank and Trust Atlanta March 15, 1985 Ville Platte, Louisiana Company, Ville Platte, Louisiana F & M Bancorporation, Inc. WCB Corporation, Chicago March 18, 1985 Kaukauna, Wisconsin Omro, Wisconsin Winnebago County Bank, Omro, Wisconsin Farmers Banc, Inc., Farmers Loan and Trust Chicago February 27, 1985 Tipton, Indiana Company, Tipton, Indiana FBC Bancshares, Inc., The Farmers Banking Company, Cleveland March 7, 1985 Lake view, Ohio N.A., Lake view, Ohio The First BancCrossville, Inc., The First National Bank of Atlanta March 1, 1985 Crossville, Tennessee Crossville, Crossville, Tennessee First Bankers Corporation of The First Bankers of Seminole Atlanta March 20, 1985 Florida, County, N.A., Pompano Beach, Florida Longwood, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin • May 1985 Section 3—Continued T, W Reserve Effective Applicant Bank(s) ^ BanR First Berne Financial Cor- First Bank of Berne, Chicago March 5, 1985 poration, Berne, Indiana Berne, Indiana First City Bancshares, Inc., First City Bank, Atlanta March 8, 1985 New Orleans, Louisiana New Orleans, Louisiana First Community Financial Cor- The First National Bank of Philadelphia March 8, 1985 poration, Mifflintown, Mifflintown, Pennsylvania Mifflintown, Pennsylvania First National Bancshares, Inc., First National Bank of Atlanta March 15, 1985 Jacksonville, Florida Jacksonville, Jacksonville, Florida First State Capital Corporation, First State Bank of Lineville, Atlanta February 27, 1985 Lineville, Alabama Lineville, Alabama First Union Bancorp, First Union National Bank of Kansas City March 1, 1985 Denver, Colorado Colorado, Denver, Colorado FM Bancorp, Inc., Farmers-Merchants National Chicago March 11, 1985 Paxton, Illinois Bank of Paxton, Paxton, Illinois FNB Bancshares, Inc., The First National Bank of Lake Dallas March 1, 1985 Lake Providence, Louisiana Providence, Lake Providence, Louisiana Founders Bank Corporation, Founders Bank of Arizona, San Francisco March 5, 1985 Scottsdale, Arizona Scottsdale, Arizona Fulda Bancorporation, Inc., Fulda State Bank, Minneapolis February 19, 1985 Fulda, Minnesota Fulda, Minnesota GHW Associates, First Inter-County Bank of New New York March 25, 1985 Hackensack, New Jersey York, New York, New York Greater Texas Bancshares, Inc. National Bank of Oak Hill, Dallas March 1, 1985 Georgetown, Texas Austin, Texas Hill City, Inc., The Farmers and Merchants Kansas City March 11, 1985 Hill City, Kansas Bank of Hill City, Hill City, Kansas Home National Corporation, The Home National Bank of Chicago March 13, 1985 Thorntown, Indiana Thorntown, Thorntown, Indiana Horizon Bankshares, Inc., The National Bank of Texas at Dallas March 6, 1985 Fort Worth, Texas Fort Worth, Fort Worth, Texas Iowa National Bankshares Midway Bank & Trust, Chicago March 8, 1985 Corp., Cedar Falls, Iowa Waterloo, Iowa Kisco Financial Corporation, Kislak National Bank, Atlanta March 4, 1985 Miami, Florida North Miami, Florida Lafayette Bancorporation, The Lafayette Bank and Trust Chicago March 21, 1985 Lafayette, Indiana Company, Lafayette, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 353 Section 3—Continued . .. „ . , . Reserve Effective Applicant Bank(s) ^ Bank Logan County BancShares, Logan Bank & Trust Company, Richmond March 22, 1985 Inc., Logan, West Virginia Logan, West Virginia Bank of Chapmanville, Chapmanville, West Virginia Louisiana Bancshares, Inc., The State National Corp., Atlanta March 11, 1985 Baton Rouge, Louisiana New Iberia, Louisiana McHugh Investment Company, Corn Growers State Bank, Kansas City March 21, 1985 Murdock, Nebraska Murdock, Nebraska Macon-Atlanta Bancorp., Inc., Macon-Atlanta State Bank, St. Louis March 5, 1985 Macon, Missouri Macon, Missouri The Marine Corporation, The Citizens National Bank of Chicago March 7, 1985 Milwaukee, Wisconsin Stevens Point, Stevens Point, Wisconsin Marion County Bancshares, First National Bank of Hamilton, Atlanta March 5, 1985 Inc., Hamilton, Alabama Hamilton, Alabama Martinsburg Bancorp, Inc., Martinsburg Bank, St. Louis March 13, 1985 Martinsburg, Missouri Martinsburg, Missouri Mercantile Bancorporation, Bank of Poplar Bluff Bancshares, St. Louis March 13, 1985 Inc., Poplar Bluff, Missouri St. Louis, Missouri Bank of Marble Hill, Marble Hill, Missouri Merchants Bancorp, Inc., The Bank of Boulder Hill, Chicago March 15, 1985 Aurora, Illinois Montgomery, Alabama Metamora Bancorp, Inc., The Metamora State Bank, Cleveland March 21, 1985 Metamora, Ohio Metamora, Ohio Mustang Financial Corporation, Johnson County Bank, N.A., Dallas March 1, 1985 Rio Vista, Texas Cleburne, Texas Olde Windsor Bancorp, Inc., Windsor Bank and Trust Boston March 11, 1985 Windsor, Connecticut Company, Windsor, Connecticut Omnibancorp, Omnibank Kiowa County, N.A., Kansas City February 22, 1985 Denver, Colorado Eads, Colorado Palmer Bancorp, Inc., Palmer-American National Bank Chicago March 19, 1985 Danville, Illinois of Danville, Danville, Illinois Penn Bancshares, Inc., The Pennsville National Bank, Philadelphia February 28, 1985 Pennsville, New Jersey Pennsville, New Jersey Peoples Financial Corporation, The Peoples Bank of Biloxi, Atlanta March 13, 1985 Biloxi, Mississippi Biloxi, Mississippi Princeton Bancshares, Inc., Princeton State Bank, Minneapolis March 1, 1985 Princeton, Minnesota Princeton, Minnesota Provident Bancorp, Inc., Provident Bank-Denton, Dallas March 1, 1985 Dallas, Texas Denton, Texas Seconn Holding Company, The Bank of Southeastern Boston March 11, 1985 Waterford, Connecticut Connecticut, Waterford, Connecticut Security Acadia Bancshares, Rayne State Bank and Trust Atlanta March 5, 1985 Inc., Company, Rayne, Louisiana Rayne, Louisiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • May 1985 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Security Bancorp, Inc., Imlay City State Bank, Chicago February 26, 1985 Southgate, Michigan Imlay City, Michigan Security Bancorp, Inc., Security Bank East, N.A., Dallas March 18, 1985 San Antonio, Texas San Antonio, Texas Skiatook Bancshares, Inc. Exchange Bancshares, Inc., Kansas City March 15, 1985 Skiatook, Oklahoma Skiatook, Oklahoma The Exchange Bank, Skiatook, Oklahoma Southwest Financial Cor- Hickory Creek Bank of New Chicago March 13, 1985 poration, Lenox, Evergreen Park, Illinois New Lenox, Illinois Stebbins Bancshares, Inc., Stebbins National Bank of Cleveland February 27, 1985 Creston, Ohio Creston, Creston, Ohio Stone Oak Bankshares, Inc., Stone Oak National Bank, Dallas March 1, 1985 San Antonio, Texas San Antonio, Texas Texas First Financial Cor- Dallas International Bank, Dallas February 26, 1985 poration, Dallas, Texas Dallas, Texas Texico Bancshares Corporation, Texico State Bank, St. Louis March 15, 1985 Texico, Illinois Texico, Illinois United City Corporation, First National Bank, Dallas March 4, 1985 Piano, Texas DeSota, Texas Victoria Bankshares, Inc., First Schulenburg Financial Cor- Dallas March 22, 1985 Victoria, Texas poration, Schulenburg, Texas First National Bank of Schulenburg, Schulenburg, Texas Victoria Bankshares, Inc., Nolte Bancshares, Inc., Dallas March 18, 1985 Victoria, Texas Seguin, Texas The Nolte National Bank of Seguin, Seguin, Texas Woodson Bancshares, Inc., First State Bank, Dallas March 21, 1985 Woodson, Texas Woodson, Texas Section 4 Nonbanking Reserve Effective Applicant company Bank date Atlantic Bancorporation, Interchange Group, Inc., Atlanta March 4, 1985 Jacksonville, Florida, et al. Orlando, Florida Comprehensive Investment Siedhoff Insurance Agency, Chicago March 20, 1985 Company, Bayard, Iowa Coon Rapids, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 355 Section 4—Continued Nonbanking Reserve Effective Applicant company Bank date The Hongkong and Shanghai First Leasing Corporation, New York March 12, 1985 Banking Corporation, San Leandro, California Hong Kong, B.C.C. Kellett N.V., Curacao, Netherlands Antilles HSBC Holdings B.V., Amsterdam, The Netherlands Marine Midland Banks, Inc., Buffalo, New York Marine Midland National Corporation, Buffalo, New York Montgomery County Financial Sale of credit related insurance Kansas City March 21, 1985 Corporation, Independence, Kansas NCNB Corporation, Florida Interchange Group, Inc., Richmond March 1, 1985 Charlotte, North Carolina Orlando, Florida NS&T Bankshares, Incor- Franklin Mortgage Corporation, Richmond March 22, 1985 porated, Fairfax, Virginia Washington, D.C. Phillips Insurance Agency, Inc., Ronald P. Raleigh Insurance Minneapolis March 15, 1985 Newport, Minnesota Agency, Tripoli, Wisconsin PT Invesment Corporation, Firestone Financial Corp., Boston March 19, 1985 Pawtucket, Rhode Island Newton Centre, Massachusetts SouthTrust Corporation, Finance South, Inc., Atlanta March 4, 1985 Birmingham, Alabama Florala, Alabama Sovran Financial Corpoation, Sovran Life Insurance Company, Richmond March 20, 1985 Norfolk, Virginia Norfolk, Virginia Security Atlantic Life Insurance Company, Norfolk, Virginia Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Flint Hills Financial Services The Americus State Bank, Kansas City March 14, 1985 Corporation, Americus, Kansas Leawood, Kansas sale of general insurance Colt Investments, Inc., Flint Hills Financial Services, Kansas City March 14, 1985 Leawood, Kansas Leawood, Kansas sale of general insurance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin • May 1985 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. Dimension Financial Corporation v. Board of Gover- Northeast Bancorp, Inc. v. Board of Governors, No. nors, No. 84-1274 (U.S., filed Feb. 6, 1985). 84-363 (U.S., filed Mar. 27, 1984). Citicorp v. Board of Governors, No. 85-4009 (2d Cir., De Young v. Owens, et al, No. SC 9782-20-6 (D., N. filed Jan. 15, 1985). Dist., Iowa, filed Mar. 8, 1984). Citicorp v. Board of Governors, No. 84-4173 (2d Cir., Huston v. Board of Governors, No. 84-1361 (8th Cir., filed Dec. 31, 1984). filed Mar. 20, 1984); and No. 84-1084 (8th Cir., filed Florida Bankers Association v. Board of Governors, Jan. 17, 1984). Nos. 84-3883, 84-3884 (2d Cir., filed Dec. 21, 1984). State of Ohio v. Board of Governors, No. 84-1270 Florida Department of Banking v. Board of Gover- (10th Cir., filed Jan. 30, 1984). nors, No. 84-3831 (11th Cir., filed Nov. 30, 1984). Ohio Deposit Guarantee Fund v. Board of Governors, Florida Department of Banking v. Board of Gover- No. 84-1257 (10th Cir., filed Jan. 28, 1984). nors, No. 84-3832 (11th Cir., filed Nov. 30, 1984). Colorado Industrial Bankers Association v. Board of Citicorp v. Board of Governors, No. 84-754 (U.S., Governors, No. 84-1122 (10th Cir., filed Jan. 27, filed Oct. 12, 1984). 1984). David Bolger Revocable Trust v. Board of Governors, Financial Institutions Assurance Corp. v. Board of No. 84-4141 (2d Cir., filed Aug. 31, 1984). Governors, No. 84-1101 (4th Cir., filed Jan. 27, Citicorp v. Board of Governors, No. 84-4121 (2d Cir., 1984). filed Aug. 27, 1984). First Bancorporation v. Board of Governors, No. 84- Seattle Bancorporation v. Board of Governors, No. 1011 (10th Cir., filed Jan. 5, 1984). 84-7535 (9th Cir., filed Aug. 15, 1984). Oklahoma Bankers Association v. Federal Reserve Bank of New York Co., Inc. v. Board of Governors, Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983). No. 84-4091 (2d Cir., filed June 14, 1984). The Committee for Monetary Reform v. Board of Citicorp v. Board of Governors, No. 84-4081 (2d Cir., Governors, No. 84-5067 (D.C. Cir., filed June 16, filed May 22, 1984). 1983). Lamb v. Pioneer First Federal Savings and Loan Securities Industry Association v. Board of Gover- Association, No. C84-702 (D. Wash., filed May 8, nors, No. 80-2614 (D.C. Cir., filed Oct. 24, 1980), 1984). and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). Melcher v. Federal Open Market Committee, No. 84- A. G. Becker, Inc. v. Board of Governors, No. 80- 1335 (D.D.C., filed Apr. 30, 1984). 2614 (D.C. Cir., filed Oct. 14, 1980), and No. 80- Florida Bankers Association v. Board of Governors, 2730 (D.C. Cir., filed Oct. 14, 1980). No. 84-3269 and No. 84-3270 (11th Cir., filed Apr. 20, 1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

357 Directors of Federal Reserve Banks and Branches The following list presents directors of Federal Re- For election of Class A and Class B directors, the serve Banks and Branches as of March 31, 1985, and Board of Governors classifies the member banks of shows the class of directorship, the principal business each Federal Reserve District into three groups of affiliation, and the date the term expires for each similar capitalization. Each group then elects one director. Each Reserve Bank has nine members on its Class A and one Class B director. The Board of board of directors: three Class A and three Class B Governors designates one Class C director as chairdirectors elected by the stockholding member banks, man of the board of directors and Federal Reserve and three Class C directors appointed by the Board of Agent of each District Bank, and another as deputy Governors of the Federal Reserve System. Directors chairman. are chosen without discrimination as to race, creed, Federal Reserve Branches have either five or seven color, sex, or national origin. directors, a majority of whom are appointed by the Class A directors represent the stockholding mem- board of directors of the parent Reserve Bank; the ber banks in each Federal Reserve District. Class B others are appointed by the Board of Governors. One and Class C directors represent the public and are of the directors appointed by the Board is designated chosen with due, but not exclusive, consideration to annually as chairman of the board of that Branch in a the interests of agriculture, commerce, industry, ser- manner the Federal Reserve Bank prescribes. vices, labor, and consumers; they may not be officers, In the following list, note 1 denotes a chairman of directors, or employees of any bank. In addition, Class the board; note 2, a deputy chairman; and note 3, a C directors may not be stockholders of any bank. director whose service began in 1985. DISTRICT 1—BOSTON Term expires Dec. 31 Class A William W. Treat President, Bank Meridian, N.A., Hampton, New Hampshire 1985 William S. Edgerly Chairman and President, State Street Bank and Trust Company, 1986 Boston, Massachusetts Homer B. Ellis, Jr.3 President, Factory Point National Bank, Manchester Center, 1987 Vermont Class B Matina S. Horner President, Radcliffe College, Cambridge, Massachusetts 1985 Richard M. Oster3 President and Chief Executive Officer, Cookson America, Inc. 1986 Providence, Rhode Island George N. Hatsopoulos Chairman of the Board and President, Thermo Electron 1987 Corporation, Waltham, Massachusetts Class C Thomas I. Atkins2 Attorney, Brooklyn, New York 1985 Michael J. Harrington Harrington Company, Peabody, Massachusetts 1986 Joseph A. Baute1 Chairman and Chief Executive Officer, Markem Corporation, 1987 Keene, New Hampshire Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin • May 1985 DISTRICT 2—NEW YORK Term expires Dec. 31 Class A Alfred Brittain III Chairman of the Board, Bankers Trust Company, New York, 1985 New York T. Joseph Semrod Chairman of the Board, United Jersey Bank, Hackensack, New 1986 Jersey Robert W. Moyer3 President and Chief Executive Officer, Wilber National Bank, 1987 Oneonta, New York Class B William S. Cook President and Chief Executive Officer, Union Pacific Corporation, 1985 New York, New York John R. Opel Chairman of the Board, International Business Machines 1986 Corporation, Armonk, New York John F. Welch, Jr.3 Chairman of the Board, General Electric Company, Fairfield, 1987 Connecticut Class C John Brademas1 President, New York University, New York, New York 1985 Clifton R. Wharton, Jr.2 Chancellor, State University of New York System, Albany, 1986 New York Virginia A. Dwyer3 Senior Vice President-Finance, American Telephone and 1987 Telegraph Company, New York, New York —BUFFALO BRANCH Appointed by Federal Reserve Bank William Balderston III President and Chief Executive Officer, Chase Lincoln First Bank, 1985 N.A., Rochester, New York Donald I. Wickham President, Tri-Way Farms, Inc., Stanley, New York 1985 Herbert Fort President, The Bath National Bank, Bath, New York 1986 Ross B. Kenzie3 Chairman of the Board, Goldome FSB, Buffalo, New York 1987 Appointed by Board of Governors M. Jane Dickman1 Partner, Touche Ross & Co., Buffalo, New York 1985 Laval S. Wilson Superintendent, Rochester City School District, Rochester, 1986 New York Joseph Yantomasi3 Western New York Area Director, United Auto Workers, Buffalo, 1987 New York DISTRICT 3—PHILADELPHIA Class A JoAnne Brinzey Chief Executive Officer and Cashier, The First National Bank at 1985 Gallitzin, Gallitzin, Pennsylvania John H. Walther Chairman of the Board, New Jersey National Bank, Pennington, 1986 New Jersey Ronald H. Smith3 President and Chief Executive Officer, CCNB Bank, N.A., New 1987 Cumberland, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 359 DISTRICT 3—Continued Term expires Dec. 31 Class B Eberhard Faber IV Chairman of the Board and Chief Executive Officer, Eberhard 1985 Faber, Inc., Wilkes-Barre, Pennsylvania Carl E. Singley Dean and Professor of Law, Temple University Law School, 1986 Philadelphia, Pennsylvania Charles F. Seymour3 Chairman and Chief Executive Officer, Jackson-Cross Company, 1987 Philadelphia, Pennsylvania Class C Nevius M. Curtis2 Chairman and Chief Executive Officer, Delmarva Power & Light 1985 Company, Wilmington, Delaware Robert M. Landis1 Partner, Dechert, Price and Rhoads, Philadelphia, Pennsylvania 1986 George E. Bartol III Chairman of the Board, Hunt Manufacturing Company, 1987 Philadelphia, Pennsylvania DISTRICT 4—CLEVELAND Class A William A. Stroud President, First-Knox National Bank, Mount Vernon, Ohio 1985 J. David Barnes Chairman and Chief Executive Officer, Mellon Bank, Pittsburgh, 1986 Pennsylvania Raymond D. Campbell President and Chief Executive Officer, Independent State Bank of 1987 Ohio, Columbus, Ohio Class B John W. Kessler President, John W. Kessler Company, Columbus, Ohio 1985 John R. Hall Chairman of the Board and Chief Executive Officer, Ashland Oil, 1986 Inc., Ashland, Kentucky Richard D. Hannan Chairman of the Board and President, Mercury Instruments, Inc., 1987 Cincinnati, Ohio Class C Lewis R. Smoot, Sr. President and Chief Executive Officer, The Sherman R. Smoot 1985 Company, Columbus, Ohio W. H. Knoell1 President and Chief Executive Officer, Cyclops Corporation, 1986 Pittsburgh, Pennsylvania E. Mandell de Windt2 Chairman of the Board, Eaton Corporation, Cleveland, Ohio 1987 —CINCINNATI BRANCH Appointed by Federal Reserve Bank Clement L. Buenger President and Chief Executive Officer, The Fifth Third Bank, 1985 Cincinnati, Ohio Vernon J. Cole Executive Vice President and Chief Executive Officer, Harlan 1986 National Bank, Harlan, Kentucky Sherrill Cleland President, Marietta College, Marietta, Ohio 1987 Jerry L. Kirby3 Chairman of the Board, President, and Chief Executive Officer, 1987 Citizens Federal Savings and Loan Association, Dayton, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin • May 1985 DISTRICT 4—Continued Term expires —CINCINNATI BRANCH—Continued Dec' 1 Appointed by Board of Governors Vacancy 1985 Robert E. Boni1 President and Chief Executive Officer, Armco Inc., Middletown, 1986 Ohio Don Ross Owner, Dunreath Farm, Lexington, Kentucky 1987 —PITTSBURGH BRANCH Appointed by Federal Reserve Bank A. Dean Heasley President and Chief Executive Officer, Century National Bank & 1985 Trust Co., Rochester, Pennsylvania G. R. Rendle President and Chief Executive Officer, Gallatin National Bank, 1986 Uniontown, Pennsylvania Charles L. Fuellgraf, Jr.3 Chief Executive Officer, Fuellgraf Electric Company, Butler, 1987 Pennsylvania James S. Pasman, Jr. Vice Chairman, Aluminum Company of America, Pittsburgh, 1987 Pennsylvania Appointed by Board of Governors Robert S. Kaplan Professor of Industrial Administration, Graduate School of 1985 Industrial Administration, Carnegie-Mellon University, Pittsburgh, Pennsylvania Milton G. Hulme, Jr.1 President and Chief Executive Officer, Mine Safety Appliances 1986 Company, Pittsburgh, Pennsylvania Milton A. Washington President and Chief Executive Officer, Allegheny Housing 1987 Rehabilitation Corporation, Pittsburgh, Pennsylvania DISTRICT 5—RICHMOND Class A Willard H. Derrick President and Chief Executive Officer, Sandy Spring National 1985 Bank and Savings Institution, Sandy Spring, Maryland Robert S. Chiles, Sr. President and Chief Executive Officer, Greensboro National Bank, 1986 Greensboro, North Carolina Robert F. Baronner3 President and Chief Executive Officer, One Valley Bancorp of 1987 West Virginia, Inc. and Kanawha Valley Bank, N.A., Charleston, West Virginia Class B George Dean Johnson, Jr. Partner, Johnson, Smith, Hibbard, Cleveland, Wildman and 1985 Dennis, Spartanburg, South Carolina Thomas B. Cookerly President, Broadcast Division, Allbritton Communications, 1986 Washington, D.C. Floyd D. Gottwald, Jr.3 Chairman and Chief Executive Officer, Ethyl Corporation, 1987 Richmond, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 361 DISTRICT 5—Continued Term expires ^ Dec. 31 Class C Robert A. Georgine2 President, Building and Construction Trades Department, 1985 AFL-CIO, Washington, D.C. Leroy T. Canoles, Jr.1 President, Kaufman and Canoles, Norfolk, Virginia 1986 Vacancy 1987 —BALTIMORE BRANCH Appointed by Federal Reserve Bank Howard I. Scaggs Chairman of the Board, American National Building and Loan 1985 Association, Baltimore, Maryland Hugh D. Shires Senior Vice President (Retired), The First National Bank of 1985 Maryland, Baltimore, Maryland Charles W. Hoff III President and Chief Executive Officer, Farmers and Mechanics 1986 National Bank, Frederick, Maryland Raymond V. Haysbert, Sr.3 President and Chief Executive Officer, Parks Sausage Company, 1987 Baltimore, Maryland Appointed by Board of Governors Edward H. Covell President, The Covell Company, Easton, Maryland 1985 Robert L. Tate1 Chairman, Tate Industries, Baltimore, Maryland 1986 Vacancy 1987 —CHARLOTTE BRANCH Appointed by Federal Reserve Bank J. Donald Collier President and Chief Executive Officer, First National Bank, 1985 Orangeburg, South Carolina James G. Lindley3 Chairman and Chief Executive Officer, South Carolina National 1985 Bank, Columbia, South Carolina John A. Hardin Chairman of the Board and President, First Federal Savings and 1986 Loan Association, Rock Hill, South Carolina James M. Culberson, Jr.3 President and Chairman, The First National Bank of Randolph 1987 County, Asheboro, North Carolina Appointed by Board of Governors G. Alex Bernhardt President, Bernhardt Industries, Inc., Lenoir, North Carolina 1985 Wallace J. Jorgenson1 President, Jefferson-Pilot Broadcasting Company, Charlotte, North 1986 Carolina Robert L. Albright3 President, Johnson C. Smith University, Charlotte, North Carolina 1987 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin • May 1985 DISTRICT 6—ATLANTA Term expires Dec. 31 Class A Dan B. Andrews President, First National Bank, Dickson, Tennessee 1985 Mary W. Walker President, The National Bank of Walton County, Monroe, Georgia 1986 E. B. Robinson, Jr.3 Chairman and Chief Executive Officer, Deposit Guaranty National 1987 Bank, Jackson, Mississippi Class B Bernard F. Sliger President, Florida State University, Tallahassee, Florida 1985 Harold B. Blach, Jr. President, Blach's Inc., Birmingham, Alabama 1986 Horatio C. Thompson President, Horatio Thompson Investments, Inc., Baton Rouge, 1987 Louisiana Class C John H. Weitnauer, Jr.1 Chairman and Chief Executive Officer, Richway, Atlanta, Georgia 1985 Bradley Currey, Jr.2 President, Rock-Tenn Company, Norcross, Georgia 1986 Jane C. Cousins President and Chief Executive Officer, Merrill Lynch Realty/ 1987 Cousins, Miami, Florida —BIRMINGHAM BRANCH Appointed by Federal Reserve Bank G. Mack Dove President, AAA Cooper Transportation Company, Dothan, Alabama 1985 Grady Gillam Chairman, AmSouth Bank, Gadsden, Alabama 1985 Charles L. Peery Chairman, The First National Bank of Florence, Florence, 1986 Alabama Willard L. Hurley3 Chairman and Chief Executive Officer, First Alabama Bancshares, 1987 Inc., Birmingham, Alabama Appointed by Board of Governors Martha A. Mclnnis1 Executive Vice President, EnviroSouth, Inc., Montgomery, 1985 Alabama Vacancy 1986 A. G. Trammell3 President, Alabama Labor Council, AFL-CIO, Birmingham, 1987 Alabama —JACKSONVILLE BRANCH Appointed by Federal Reserve Bank George C. Boone, Jr. President and Chief Executive Officer, Security First Federal 1985 Savings and Loan Association, Daytona Beach, Florida E. F. Keen, Jr. Vice Chairman, NCNB Bancorporation, Bradenton, Florida 1985 John D. Uible Chairman and Chief Executive Officer, Florida National Banks of 1986 Florida, Inc., Jacksonville, Florida Joel R. Wells, Jr.3 President and Chief Executive Officer, Sun Banks, Inc., Orlando, 1987 Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 363 DISTRICT 6—Continued Term expires Dec 31 —JACKSONVILLE BRANCH—Continued Appointed by Board of Governors E. William Nash, Jr.1 President, South Central Operations, The Prudential Insurance 1985 Company of America, Jacksonville, Florida JoAnn Doke Smith Co-Owner, Smith Brothers, Micanopy, Florida 1986 Andrew A. Robinson3 Dean, College of Education and Human Services, University of 1987 North Florida, Jacksonville, Florida —MIAMI BRANCH Appointed by Federal Reserve Bank D. S. Hudson, Jr. Chairman, First National Bank and Trust Company of Stuart, 1985 Stuart, Florida Robert L. Kester Vice Chairman, Barnett Bank of South Florida, N.A., Pompano 1986 Beach, Florida James P. Hermes3 President and Chief Executive Officer, Bank of the Islands, 1987 Sanibel, Florida Robert D. Rapaport Principal, The Rapaport Companies, Palm Beach, Florida 1987 Appointed by Board of Governors Sue McCourt Cobb Attorney, Greenberg, Traurig, Askew, Hoffman, Lipofif, Rosen, 1985 and Quentel, P.A., Miami, Florida Eugene E. Cohen1 Chief Financial Officer and Treasurer, Howard Hughes Medical 1986 Institute, Coconut Grove, Florida Robert D. Apelgren3 Vice President, Sugar Cane Growers Cooperative of Florida, Inc., 1987 Pahokee, Florida —NASHVILLE BRANCH Appointed by Federal Reserve Bank Samuel H. Howard Vice President and Treasurer, Hospital Corporation of America, 1985 Nashville, Tennessee Owen G. Shell, Jr. President and Chief Executive Officer, First American National 1985 Bank of Nashville, Nashville, Tennessee Robert W. Jones Chairman and President, First National Bank, McMinnville, 1986 Tennessee Will A. Hildreth3 President and Chief Executive Officer, First National Bank of 1987 Loudon County, Lenoir City, Tennessee Appointed by Board of Governors Condon S. Bush1 President, Bush Brothers & Company, Dandridge, Tennessee 1985 Patsy R. Williams Partner, Rhyne Lumber Company, Newport, Tennessee 1986 C. Warren Neel Dean, College of Business Administration, The University of 1987 Tennessee, Knoxville, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 Federal Reserve Bulletin • May 1985 DISTRICT 6—Continued Term expires Dec. 31 —NEW ORLEANS BRANCH Appointed by Federal Reserve Bank Philip K. Livingston Vice Chairman, President and Chief Executive Officer, Citizens 1985 National Bank, Hammond, Louisiana Tom Burkett Scott, Jr. President and Chief Executive Officer, Unifirst Bank for Savings, 1985 F.A., Jackson, Mississippi Carl E. Jones, Jr. President, Chairman and Chief Executive Officer, Merchants 1986 National Bank of Mobile, Mobile, Alabama James G. Boyer3 Chairman, President and Chief Executive Officer, Gulf National 1987 Bank at Lake Charles, Lake Charles, Louisiana Appointed by Board of Governors Sharon A. Perlis President, Sharon A. Perlis Law Corporation, Metairie, Louisiana 1985 Leslie B. Lampton1 President, Ergon, Inc., Jackson, Mississippi 1986 Roosevelt Steptoe Professor of Economics, Southern University, Baton Rouge 1987 Campus, Baton Rouge, Louisiana DISTRICT 7—CHICAGO Class A Patrick E. McNarny President, First National Bank of Logansport, Logansport, Indiana 1985 Ollie Jay Tomson President, The Citizens National Bank of Charles City, Charles 1986 City, Iowa Barry F. Sullivan3 Chairman of the Board, First National Bank of Chicago, Chicago, 1987 Illinois Class B Mary Garst Manager, Cattle Division, Garst Company, Coon Rapids, Iowa 1985 Leon T. Kendall Chairman and Chief Executive Officer, Mortgage Guaranty 1986 Insurance Corporation, Milwaukee, Wisconsin Edward D. Powers3 President and Chief Executive Officer, Mueller Company, Decatur, 1987 Illinois Class C Stanton R. Cook1 President, Tribune Company, Chicago, Illinois 1985 Robert J. Day2 President and Chief Operating Officer, USG Corporation, Chicago, 1986 Illinois Marcus Alexis3 Chairman, Department of Economics, Northwestern University, 1987 Evanston, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 365 DISTRICT 7—Continued Term expires Dec. 31 —DETROIT BRANCH Appointed by Federal Reserve Bank Charles T. Fisher III Chairman and President, National Bank of Detroit, Detroit, 1985 Michigan Ronald D. Story President, The Ionia County National Bank of Ionia, Ionia, 1986 Michigan Richard Gillett3 Chairman, Old Kent Financial Corporation and Old Kent Bank and 1987 Trust Company, Grand Rapids, Michigan Thomas R. Ricketts Chairman and President, Standard Federal Savings and Loan 1987 Association, Troy, Michigan Appointed by Board of Governors Russell G. Mawby1 President and Trustee, W. K. Kellogg Foundation, Battle Creek, 1985 Michigan Karl D. Gregory Professor, Management and Economic Consultant, School of 1986 Economics and Management, Oakland University, Rochester, Michigan Robert E. Brewer Executive Vice President-Finance, K Mart Corporation, Troy, 1987 Michigan DISTRICT 8—ST. LOUIS Class A Donald L. Hunt President, First National Bank of Marissa, Marissa, Illinois 1985 Clarence C. Barksdale Chairman of the Board, Centerre Bank, N.A., St. Louis, Missouri 1986 H. L. Hembree IIP Chairman of the Board and Chief Executive Officer, Arkansas Best 1987 Corporation, Fort Smith, Arkansas Class B Robert J. Sweeney President and Chief Executive Officer, Murphy Oil Corporation, 1985 El Dorado, Arkansas Frank A. Jones, Jr. President, Dietz Forge Company, Memphis, Tennessee 1986 Jesse M. Shaver, Jr. President, JMS Corporation, Louisville, Kentucky 1987 Class C Robert L. Virgil, Jr. Dean, School of Business, Washington University, St. Louis, 1985 Missouri Mary P. Holt2 President, Clothes Horse, Little Rock, Arkansas 1986 W. L. Hadley Griffin1 Chairman of the Executive Committee, Brown Group, Inc., 1987 St. Louis, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin • May 1985 DISTRICT 8—Continued Term expires Dec. 31 —LITTLE ROCK BRANCH Appointed by Federal Reserve Bank D. Eugene Fortson Chairman and Chief Executive Officer, Worthen Bank and Trust 1985 Company, N.A., Little Rock, Arkansas William H. Kennedy, Jr. Chairman of the Executive Committee, National Bank of 1986 Commerce of Pine Bluff, Pine Bluff, Arkansas Wilbur P. Gulley, Jr. Chairman of the Board and Chief Executive Officer, Savers 1987 Federal Savings and Loan Association, Little Rock, Arkansas W. Wayne Hartsfield3 President and Chief Executive Officer, First National Bank, 1987 Searcy, Arkansas Appointed by Board of Governors Shirley J. Pine Professor, Department of Communicative Disorders, University of 1985 Arkansas at Little Rock, Little Rock, Arkansas Richard V. Warner Group Vice President, Wood Products Group, Potlatch 1986 Corporation, Warren, Arkansas Sheffield Nelson1 Partner, House, Wallace, Nelson and Jewell, P.A., 1987 Little Rock, Arkansas —LOUISVILLE BRANCH Appointed by Federal Reserve Bank Allan S. Hanks President, The Anderson National Bank of Lawrenceburg, 1985 Lawrenceburg, Kentucky Frank B. Hower, Jr. Chairman and Chief Executive Officer, Liberty National Bank and 1986 Trust Company of Louisville, Louisville, Kentucky John E. Darnell, Jr. Chairman of the Board, The Owensboro National Bank, 1987 Owensboro, Kentucky R. I. Kerr, Jr. Chairman of the Board, President, and Chief Executive Officer, 1987 Great Financial Federal, Louisville, Kentucky Appointed by Board of Governors Henry F. Frigon1 President and Chief Operating Officer, BATUS, Inc., Louisville, 1985 Kentucky William C. Ballard, Jr. Executive Vice President, Finance and Administration, Humana, 1986 Inc., Louisville, Kentucky Raymond M. Burse3 President, Kentucky State University, Frankfort, Kentucky 1987 —MEMPHIS BRANCH Appointed by Federal Reserve Bank William H. Brandon, Jr. President, First National Bank of Phillips County, Helena, 1985 Arkansas Wayne W. Pyeatt President, Memphis Fire Insurance Company, Memphis, 1986 Tennessee Edgar H. Bailey Chairman and Chief Executive Officer, Leader Federal Savings and 1987 Loan Association, Memphis, Tennessee John P. Dulin3 President, First Tennessee Bank, Memphis, Tennessee 1987 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 367 DISTRICT 8—Continued Term expires —MEMPHIS BRANCH—Continued Dec' 31 Appointed by Board of Governors Patricia W. Shaw President and Chief Executive Officer, Universal Life Insurance 1985 Company, Memphis, Tennessee Donald B. Weis1 President, Tamak Transportation Corporation, West Memphis, 1986 Arkansas G. Rives Neblett Attorney, Neblett, Bobo, Chapman, and Heaton, Shelby, 1987 Mississippi DISTRICT 9—MINNEAPOLIS Class A Curtis W. Kuehn President, The First National Bank in Sioux Falls, Sioux Falls, 1985 South Dakota Burton P. Allen, Jr. President, First National Bank, Milaca, Minnesota 1986 Thomas M. Strong3 President and Chief Executive Officer, Citizens State Bank, 1987 Ontonagon, Michigan Class B Richard L. Falconer District Manager, Northwestern Bell, Bismarck, North Dakota 1985 Harold F. Zigmund Chairman, Blandin Paper Company, Grand Rapids, Minnesota 1986 William L. Mathers President, Mathers Land Company, Inc., Miles City, Montana 1987 Class C Sister Generose Gervais Administrator, St. Mary's Hospital, Rochester, Minnesota 1985 John B. Davis, Jr.2 Interim Executive Director, Children's Theatre Company and 1986 School, Minneapolis, Minnesota William G. Phillips' Chairman, International Multifoods, Minneapolis, Minnesota 1987 —HELENA BRANCH Appointed by Federal Reserve Bank Roger H. Ulrich President, First State Bank, Malta, Montana 1985 Dale W. Anderson3 President and Chief Executive Officer, Norwest Bank Great Falls, 1986 N.A., Great Falls, Montana Seabrook Pates President and Chief Executive Officer, Midland Implement 1986 Company, Inc., Billings, Montana Appointed by Board of Governors Gene J. Etchart1 Past President, Hinsdale Livestock Company, Glasgow, Montana 1985 Marcia S. Anderson3 President, Bridger Canyon Stallion Station, Inc., Bozeman, 1986 Montana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin • May 1985 DISTRICT 10—KANSAS CITY TERM expires Class A Dec• 31 Howard K. Loomis President, The Peoples Bank, Pratt, Kansas 1985 Wayne D. Angell Chairman of the Board, The First State Bank of Pleasanton, 1986 Pleasanton, Kansas Donald D. Hoffman Chairman of the Board, Central Bank of Denver, Denver, Colorado 1987 Class B Ralph F. Cox Chief Operating Officer-Resources, and Director, Atlantic 1985 Richfield Company, Denver, Colorado Richard D. Harrison Chairman and Chief Executive Officer, Fleming Companies, Inc. 1986 Oklahoma City, Oklahoma Duane C. Acker President, Kansas State University, Manhattan, Kansas 1987 Class C Irvine O. Hockaday, Jr.1 Executive Vice President and Member of the Office of the 1985 Chairman, Hallmark Cards, Inc., Kansas City, Missouri Vacancy 1986 Robert G. Lueder2 Chairman of the Board, Lueder Construction Company, Omaha, 1987 Nebraska —DENVER BRANCH Appointed by Federal Reserve Bank George S. Jenks President and Chief Executive Officer, Sunwest Financial Services, 1985 Inc., Albuquerque, New Mexico Kenneth C. Naramore Chairman of the Board and Chief Executive Officer, Stockmen's 1986 Bank and Trust Company, Gillette, Wyoming Roger L. Reisher Co-Chairman, FirstBank Holding Company of Colorado, 1986 Lake wood, Colorado Junius F. Baxter3 President and Chairman, Midland-Western Federal Savings, 1987 Denver, Colorado Appointed by Board of Governors Anthony W. Williams President, Williams, Turner & Holmes, P.C., Grand Junction, 1985 Colorado James C. Wilson3 President and Chief Executive Officer, Rocky Mountain Energy, 1986 Broomfield, Colorado James E. Nielson1 President and Chief Executive Officer, JN Incorporated, Cody, 1987 Wyoming —OKLAHOMA CITY BRANCH Appointed by Federal Reserve Bank William H. Crawford President and Chief Executive Officer, First National Bank and 1985 Trust Company, Frederick, Oklahoma William O. Alexander President and Chief Executive Officer, Continental Federal Savings 1986 & Loan Association, Oklahoma City, Oklahoma Marcus R. Tower Vice Chairman of the Board and Chairman of the Credit Policy 1986 Committee, Bank of Oklahoma, N.A., Tulsa, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 369 DISTRICT 10—Continued Term expires Dec 31 —OKLAHOMA CITY BRANCH—Continued Appointed by Board of Governors Patience S. Latting1 Oklahoma City, Oklahoma 1985 John F. Snodgrass President and Trustee, Samuel Roberts Noble Foundation, Inc., 1986 Ardmore, Oklahoma —OMAHA BRANCH Appointed by Federal Reserve Bank William W. Cook, Jr. President, The Beatrice National Bank and Trust Company, 1985 Beatrice, Nebraska Charles H. Thorne Chairman of the Board and Chief Executive Officer, First Federal 1985 Savings and Loan Association of Lincoln, Lincoln, Nebraska Donald J. Murphy Director, Norwest Bank Omaha, N.A., Omaha, Nebraska 1986 Appointed by Board of Governors Kenneth L. Morrison1 President, Morrison-Quirk Grain Corporation, Hastings, Nebraska 1985 Janice D. Stoney3 Vice President, Northwestern Bell Telephone Company, Omaha, 1986 Nebraska DISTRICT 11—DALLAS Class A John P. Gilliam Chairman of the Board and Chief Executive Officer, First National 1985 Bank in Valley Mills, Valley Mills, Texas Miles D. Wilson Chairman of the Board and Chief Executive Officer, The First 1986 National Bank of Bellville, Bellville, Texas Gene Edwards3 Chairman of the Board, First Amarillo Bancorporation, Inc., 1987 Amarillo, Texas Class B Robert Ted Enloe III President, Lomas & Nettleton Financial Corporation, Dallas, 1985 Texas Kent Gilbreath Associate Dean, Hankamer School of Business, Baylor University, 1986 Waco, Texas Robert L. Pfluger3 Rancher, San Angelo, Texas 1987 Class C Robert D. Rogers1 President and Chief Executive Officer, Texas Industries, Inc., 1985 Dallas, Texas Hugh G. Robinson3 Vice President for Real Estate Development, Southland 1986 Corporation, Dallas, Texas Bobby R. Inman2 Chairman of the Board, President, and Chief Executive Officer, 1987 Microelectronics and Computer Technology Corporation, Austin, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin • May 1985 DISTRICT 11—Continued Term expires Dec. 31 —EL PASO BRANCH Appointed by Federal Reserve Bank Hector Holguin3 Founder and Chairman, Holguin Corporation, El Paso, Texas 1985 David L. Stone President, The Portales National Bank, Portales, New Mexico 1986 Tony A. Martin Chairman of the Board, First City National Bank of Midland, 1987 Midland, Texas Gerald W. Thomas President Emeritus and Professor of Animal Range Science, Center 1987 for International Programs, New Mexico State University, Las Cruces, New Mexico Appointed by Board of Governors Peyton Yates President, Yates Drilling Company, Artesia, New Mexico 1985 John Sibley1 President, Delaware Mountain Enterprises, Carlsbad, New Mexico 1986 Mary Carmen Saucedo Associate Superintendent, Central Area Office, El Paso 1987 Independent School District, El Paso, Texas —HOUSTON BRANCH Appointed by Federal Reserve Bank Will E. Wilson Chairman of the Executive Committee, First City National Bank of 1985 Beaumont, Beaumont, Texas Marcella D. Perry President and Chief Executive Officer, Heights Savings 1986 Association, Houston, Texas Thomas B. McDade Vice Chairman, Texas Commerce Bancshares, Inc., Houston, 1987 Texas David E. Sheffield3 President and Chief Executive Officer, First Victoria National 1987 Bank, Victoria, Texas Appointed by Board of Governors Robert T. Sakowitz1 Chairman of the Board and President, Sakowitz, Inc., Houston, 1985 Texas Walter M. Mischer, Jr.3 President, The Mischer Corporation, Houston, Texas 1986 Andrew L. Jefferson, Jr.3 Attorney, Jefferson, Mims, and Plummer, Houston, Texas 1987 —SAN ANTONIO BRANCH Appointed by Federal Reserve Bank George Brannies Chairman of the Board and President, The Mason National Bank, 1985 Mason, Texas C. Ivan Wilson Chairman of the Board and Chief Executive Officer, First City 1986 Bank of Corpus Christi, Corpus Christi, Texas Joe D. Barbee President and Chief Executive Officer, Barbee-Neuhaus Implement 1987 Company, Weslaco, Texas Robert T. Rork3 Chairman of the Board and Chief Executive Officer, RepublicBank 1987 San Antonio, N.A., San Antonio, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 371 DISTRICT 11—Continued Term expires —SAN ANTONIO BRANCH—Continued Dec' 31 Appointed by Board of Governors Robert F. McDermott1 Chairman of the Board and President, United Services Automobile 1985 Association, San Antonio, Texas Lawrence L. Crum Professor of Banking and Finance, The University of Texas at 1986 Austin, Austin, Texas Ruben M. Garcia3 President, Modern Machine Shop, Inc., Laredo, Texas 1987 DISTRICT 12—SAN FRANCISCO Class A Spencer F. Eccles Chairman, President, and Chief Executive Officer, First Security 1985 Corporation, Salt Lake City, Utah Rayburn S. Dezember Chairman, Central Pacific Corporation, Bakersfield, California 1986 Donald J. Gehb3 President and Chief Executive Officer, Alameda First National 1987 Bank, Alameda, California Class B Togo W. Tanaka Chairman, Gramercy Enterprises, Inc., Los Angeles, California 1985 John C. Hampton Chairman and President, Willamina Lumber Company, Portland, 1986 Oregon George H. Weyerhaeuser President and Chief Executive Officer, Weyerhaeuser Company, 1987 Tacoma, Washington Class C Carolyn S. Chambers President, Chambers Cable Co., Inc., Eugene, Oregon 1985 Fred W. Andrew2 Chairman, President, and Chief Executive Officer, Superior 1986 Farming Company, Bakersfield, California Alan C. Furth1 Vice Chairman, Santa Fe Southern Pacific Corporation and 1987 President, Southern Pacific Company, San Francisco, California —Los ANGELES BRANCH Appointed by Federal Reserve Bank Bram Goldsmith Chairman and Chief Executive Officer, City National Bank, 1985 Beverly Hills, California William L. Tooley Chairman, Tooley and Company, Investment Builders, Los 1985 Angeles, California Harvey J. Mitchell President and Chief Executive Officer, Escondido National Bank, 1986 Escondido, California Robert R. Dockson Chairman and Chief Executive Officer, CalFed, Inc., Los Angeles, 1987 California Appointed by Board of Governors Thomas R. Brown, Jr. Chairman of the Board, Burr-Brown Corporation, Tucson, Arizona 1985 Lola M. McAlpin-Grant Attorney, Ingle wood, California 1986 Richard C. Seaver13 President, Hydril Company, Los Angeles, California 1987 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin • May 1985 DISTRICT 12—Continued Term expires Dec. 31 —PORTLAND BRANCH Appointed by Federal Reserve Bank Herman C. Bradley, Jr. President and Chief Executive Officer, Tri-County Banking 1985 Company, Junction City, Oregon William S. Naito Vice President, Norcrest China Company, Portland, Oregon 1986 John A. Elorriaga Chairman of the Board and Chief Executive Officer, United States 1987 National Bank of Oregon, Portland, Oregon G. Dale Weight3 Chairman and Chief Executive Officer, Benjamin Franklin Savings 1987 and Loan Association, Portland, Oregon Appointed by Board of Governors G. Johnny Parks Northwest Regional Director, International Longshoremen's & 1985 Warehousemen's Union, Portland, Oregon Paul E. Bragdon1 President, Reed College, Portland, Oregon 1986 Sandra A. Suran3 Partner, Suran and Company, Beaverton, Oregon 1987 —SALT LAKE CITY BRANCH Appointed by Federal Reserve Bank John A. Dahlstrom Chairman of the Board, Tracy-Collins Bank and Trust Company, 1985 Salt Lake City, Utah Fred C. Humphreys Chairman, President and Chief Executive Officer, The Idaho First 1985 National Bank and Moore Financial Group, Boise, Idaho Albert C. Gianoli President and Chairman of the Board, First National Bank of Ely, 1986 Ely, Nevada Lela M. Ence Executive Director, University of Utah Alumni Association, Salt 1987 Lake City, Utah Appointed by Board of Governors Vacancy 1985 Robert N. Pratt President, Moriah Enterprises, Inc., Bountiful, Utah 1986 Don M. Wheeler13 President, Wheeler Machinery Company, Salt Lake City, Utah 1987 —SEATTLE BRANCH Appointed by Federal Reserve Bank William W. Philip Chairman of the Board and President, Puget Sound National Bank, 1985 Tacoma, Washington Lonnie G. Bailey Executive Vice President, Farmers & Merchants Bank of 1986 Rockford, Spokane, Washington John N. Nordstrom Co-Chairman of the Board, Nordstrom, Inc., Seattle, Washington 1987 William S. Randall3 President and Chief Executive Officer, First Interstate Bank of 1987 Washington, N.A., Seattle, Washington Appointed by Board of Governors Byron I. Mallott President and Chief Executive Officer, Sealaska Corporation, 1985 Juneau, Alaska Carol A. Birkholz Managing Partner, Laventhol & Horwath, Seattle, Washington 1986 John W. Ellis1 President and Chief Executive Officer, Puget Sound Power & Light 1987 Company, Bellevue, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1 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 ALL 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 POLIC Y INS TR UMENTS 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 A3 3 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

100 Federal Reserve Bulletin • May 1985 SECURITIES MARKETS AND International Statistics CORPORATE FINANCE A34 New security issues—State and local SUMMARY STATISTICS governments and corporations A35 Open-end investment companies—Net sales and A53 U.S. international transactions—Summary asset position A54 U.S. foreign trade A35 Corporate profits and their distribution A54 U.S. reserve assets A36 Nonfinancial corporations—Assets and A54 Foreign official assets held at Federal Reserve liabilities Banks A36 Total nonfarm business expenditures on new A55 Foreign branches of U.S. banks—Balance sheet plant and equipment data A37 Domestic finance companies—Assets and A57 Selected U.S. liabilities to foreign official liabilities and business credit institutions REAL ESTATE REPORTED BY BANKS IN THE UNITED STATES A38 Mortgage markets A57 Liabilities to and claims on foreigners A39 Mortgage debt outstanding A58 Liabilities to foreigners A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on CONSUMER INSTALLMENT CREDIT foreigners A61 Banks' own claims on unaffiliated foreigners A40 Total outstanding and net change A62 Claims on foreign countries—Combined A41 Terms domestic offices and foreign branches FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A43 Direct and indirect sources of funds to credit A63 Liabilities to unaffiliated foreigners markets A64 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS A65 Foreign transactions in securities SELECTED MEASURES A66 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions A44 Nonfinancial business activity—Selected measures A45 Labor force, employment, and unemployment INTEREST AND EXCHANGE RATES A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A67 Discount rates of foreign central banks A49 Housing and construction A67 Foreign short-term interest rates A50 Consumer and producer prices A68 Foreign exchange rates A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 1984 1985 Q1 Q2 Q3 Q4 Oct. Nov. Dec. Jan. Feb. Reserves of depository institutions2 1 Total 7.7 8.6 6.8 -.7 -12.1 11.3 18.8 31.1 19.7 2 Required 5.3 10.3 6.6 -1.5 -12.1 9.1 14.0 35.2 15.4 3 Nonborrowed 9.0 -10.8 -44.6 30.7 32.6 66.3 72.6 94.4 23.8 4 Monetary base3 9.5 7.0 7.2 3.9 -.4 7.6 8.0 8.0 12.3 Concepts of money, liquid assets, and debt4 5 Ml 6.2 6.5 4.5 3.2' -7.0' 12.0 10.2' 9.0 14.1 6 M2 7.2 7.1 6.8 9.0 5.5 14.0 13.1' 13.6' 10.5 7 M3 9.2 10.5 9.5 11.0 9.9' 14.2 14.4' 10.1' 7.9 8 L 11.1' 12.4' 12.2' 9.3 7.0 9.9 11.9 n.a. n.a. 9 Debt 13.1 13.1 12.4' 12.5' 11.8' 14.7' 14.2' 12.8 n.a. Nontransaction components 10 In M25 7.5 7.2 7.6 10.8 9.4' 14.6 14.1' 15.1' 9.4 11 In M3 only6 18.2 24.9 20.3 18.9 27.3' 15.(K 18.8' -3.1' -2.5 Time and savings deposits Commercial banks 12 Savings7 -11.6 -6.7 -5.6 -10.4 -11.4 -10.6 -11.6 -9.8 -2.0 13 Small-denomination time8 9.5 13.1 13.4 6.9 4.4 4.4 7.8 -8.1' -8.4 14 Large-denomination time910 7.4 21.8 19.3 12.2' 24.2 1.8' 3.6' -9.5' 9.1 Thrift institutions 15 Savings7 -5.7 -.7 -6.7 -5.7' -5.7' -6.5' 7.2 8.6 16 Small-denomination time 13.0 13.4 17.0 14.8 15.9 10.8 11.4 -3.1' -6.0 17 Large-denomination time9 52.3 48.1 38.1 31.3 38.2 42.9 39.0 20.5 2.3 Debt components4 18 Federal 16.6 13.1 14.7 15.6 12.9 20.0 17.7 16.3 n.a. 19 Nonfederal 12.1 13.1 11.8 11 11.5' 13.1' 13.1' 11.7 n.a. 20 Total loans and securities at commercial banks" 11.9 11.0 9.1 9.2' 6.5 13.C 9.7' 6.4 12.6 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

A4 DomesticN onfinancial Statistics • May 1985 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of Weekly averages of daily figures for week ending daily figures FFFaaaccctttooorrrsss 1984 1985 1985 Dec. Jan. Feb. Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 183,925 182,763 180,077 183,752 179,274 179,901 180,153 179,550 179,690 180,318 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss''''' 159,474 159,619 157,221 161,411 156,368 157,296 156,272 156,656 157,641 157,589 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 159,010 158,152 155,848 158,645 156,368 156,858 155,135 155,694 154,608 157,589 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 464 1,467 1,373 2,766 0 438 1,137 962 3,033 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,462 8,526 8,565 8,640 8,389 8,440 8,515 8,692 8,628 8,372 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,389 8,389 8,378 8,389 8,389 8,389 8,389 8,382 8,372 8,372 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 73 137 187 251 0 51 126 310 256 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 3,040 1,567 1,278 1,200 784 1,167 1,642 1,095 994 1,354 1111100000 FFFFFllllloooooaaaaattttt 1,499 1,203 1,248 664 1,606 877 1,460 720 959 1,624 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 11,450 11,848 11,765 11,836 12,127 12,122 12,265 12,387 11,468 11,380 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,096 11,095 11,094 11,095 11,095 11,095 11,095 11,094 11,094 11,094 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 16,388 16,453 16,501 16,448 16,462 16,474 16,478 16,492 16,506 16,520 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 181,720 180,036 178,273 180,592 178,689 177,310 177,657 178,479 178,700 178,134 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 511 526 550 524 528 534 538 549 556 555 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,406 3,875 4,344 3,463 3,300 4,946 5,015 4,797 3,819 4,038 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 247 219 223 211 223 212 203 210 236 229 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,676 1,961 1,191 1,884 2,074 1,612 1,982 1,590 1,886 1,693 2222200000 OOOOOttttthhhhheeeeerrrrr 450 479 533 420 387 574 653 521 508 466 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,370 6,200 6,061 6,319 6,222 6,166 6,040 6,008 6,026 6,182 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 21,648 21,634 21,115 22,500 20,027 20,734 20,257 19,599 20,176 21,253 End-of-month figures Wednesday figures 1984 1985 1985 Dec. Jan. Feb. Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 186,384 177,890 181,786 185,645 178,913 179,161 180,050 182,424 182,216 178,271 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss''''' 160,850 154,555 159,632 163,153 156,030 155,418 155,562 157,651 158,072 155,501 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 159,223 154,555 157,124 158,733 156,030 155,418 155,562 157,651 154,743 155,501 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 1,627 0 2,508 4,420 0 0 0 0 3,329 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,777 8,389 8,752 8,644 8,389 8,389 8,389 8,372 8,676 8,372 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,389 8,389 8,372 8,389 8,389 8,389 8,389 8,372 8,372 8,372 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 388 0 380 255 0 0 0 0 304 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 3,577 2,139 2,329 1,125 764 1,910 1,055 1,613 1,168 1,939 3333322222 FFFFFllllloooooaaaaattttt 833 502 -56 584 1,661 1,120 2,645 2,189 2,885 588 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 12,347 12,305 11,129 12,139 12,069 12,324 12,399 12,599 11,415 11,871 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,096 11,095 11,093 11,095 11,095 11,095 11,095 11,094 11,094 11,093 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 16,418 16,476 16,532 16,460 16,474 16,476 16,490 16,504 16,518 16,532 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 183,796 177,569 178,416 179,800 178,161 177,291 178,112 178,779 178,934 178,130 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 513 535 557 527 534 535 545 556 555 557 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 5,316 5,349 3,308 3,331 4,399 2,963 5,618 3,974 3,916 3,099 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 253 244 332 198 224 238 211 268 244 223 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,126 1,164 1,226 1,143 1,158 1,157 1,164 1,164 1,213 1,213 4444422222 OOOOOttttthhhhheeeeerrrrr 867 560 461 421 366 650 597 479 473 452 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 5,952 5,964 5,863 6,208 5,972 5,956 5,840 5,860 5,926 5,963 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 20,693 18,694 23,866 26,190 20,286 22,560 20,166 23,559 23,185 20,877 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 RRReeessseeerrrvvveee ccclllaaassssssiiifffiiicccaaatttiiiooonnn 1982 1983 1984 1984 1985 Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss''''' 24,939 21,138 21,738 19,270 20,143 20,099 20,843 21,738 21,577' 20,417 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh22222 20,392 20,755 22,316 21,688 21,232 21,875 21,827 22,316 23,044 23,927 33333 VVVVVaaaaauuuuulllllttttt cccccaaaaassssshhhhh uuuuussssseeeeeddddd tttttooooo sssssaaaaatttttiiiiisssssfffffyyyyy rrrrreeeeessssseeeeerrrrrvvvvveeeee rrrrreeeeeqqqqquuuuuiiiiirrrrreeeeemmmmmeeeeennnnntttttsssss33333 ..... 17,049 17,908 18,958 17,995 17,900 18,413 18,392r 18,958 19,547 19,856 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 3,343 2,847 3,358 3,694 3,333 3,462 3,434' 3,358 3,497 4,071 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss55555 41,853 38,894 40,696 37,264 38,043 38,512 39,235 40,696 41,125' 40,273 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 41,353 38,333 39,843 36,575 37,415 37,892 38,542 39,843 40,380' 39,374 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss66666 500 561 853 689 628 620 693 853 745' 899 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 697 774 3,186 8,017 7,242 6,017 4,617 3,186 1,395 1,289 99999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 33 96 113 346 319 299 212 113 62 71 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 187 2 2,604 7,043 6,459 5,057 3,837 2,604 1,050 803 Biweekly averages of daily figures for weeks ending 1984 1985 Nov. 7 Nov. 21 Dec. 5 Dec. 19 Jan. 2 Jan. 16 Jan. 30 Feb. 13 Feb. 27? Mar. 13f 1111111111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss''''' 20,566 20,734 21,184 21,584 22,171 22,819 20,375 19,924 20,734 22,382 1111122222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh22222 20,577 20,748 21,196 21,596 22,129 22.819 20,379 24,893 23,203 21,518 1111133333 VVVVVaaaaauuuuulllllttttt cccccaaaaassssshhhhh uuuuussssseeeeeddddd tttttooooo sssssaaaaatttttiiiiisssssfffffyyyyy rrrrreeeeessssseeeeerrrrrvvvvveeeee rrrrreeeeeqqqqquuuuuiiiiirrrrreeeeemmmmmeeeeennnnntttttsssss33333 ..... 17,949 18,661 18,320 18,547 19,701 22,089 23,828 20,624 19,270 18,094 1111144444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 3,456 3,456 3,385 3,120 19,703 19,002 19,995 4,269 3,933 3,424 1111155555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss33333 38,526 39,409 39,516 40,143 41,832 41.820 40,374 40,548 40,003 40,476 1111166666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 37,949 38,800 38,602 39,617 40,625 41,187 39,590 39,537 39,198 39,726 1111177777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss66666 577 610 914 526 1,207 634 785 1,012 806 751 1111188888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 5,373 4,476 4,251 3,231 2,691 1,631 976 1,369 1,174 1,865 1111199999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 265 204 184 115 81 58 63 60 81 69 2222200000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 4,184 3,888 3,488 2,774 2,038 1,371 593 988 603 1,224 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 1985 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Mar. 4 Mar. 11 Mar. 18 One day and continuing contract 1 Commercial banks in United States 60,571 56,740 60,129 61,359 61,529 58,363 60,758 62,875 59,617 2 Other depository institutions, foreign banks and foreign oflicial institutions, and U.S. government agencies . 27,149 27,503 29,148 30,114 29,116 27,655 25,753 27,269 26,391 3 Nonbank securities dealers 7,290 8,643 8,335 7,484 8,404 9,055 8,973 8,992 9,082 4 All other 26,087 28,150 28,217 28,931 30,655 32,282 32,281 30,605 29,390 All other maturities 5 Commercial banks in United States 8,652 7,475 7,644 8,178 8,472 8,468 8,633 8,916 9,354 6 Other depository institutions, foreign banks and foreign oflicial institutions, and U.S. government agencies . 8,072 7,315 7,010 7,200 6,981 7,715 8,068 8,282 8,401 7 Nonbank securities dealers 7,503 7,038 6,936 7,534 7,507 7,772 7,600 7,540 8,366 8 All other 9,588 7,776 8,241 8,605 8,998 8,707 9,010 8,753 8,946 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 28,438 28,298 29,664 25,960 28,703' 26,434 26,737 24,922 26,777 10 Nonbank securities dealers 5,952 6,535 6,871 6,087 6,137 6,117 6,883 6,410 6,505 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic NonfinancialS tatistics • May 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 3/27/85 date rate 3/27/85 rate 3/27/85 rate 3/27/85 rate Boston 12/24/84 8'/2 8 !/2 9 9'/2 10 IO'/2 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 l la F s rancisco... 8 1 1 2 2 / / 2 2 4 4 / / 8 8 4 4 8'/2 8'/2 9 9[/i 10 10'/2 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. Ba o n f k Effective A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba of n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec 31, 1973 7>/2 71/2 1978-- July 3 7-7'/4 71/4 11998811—— MMaayy 55 13-14 14 11997744—— AApprr.. 25 71/2-8 8 10 7(/4 7!/4 88 14 14 30 8 8 Aug. 21 73/4 73/4 Nov. 2 13-14 13 1975— D Ja e n c . . 1 9 6 6 71 7 / 3 7 4 / 3 - 4 / 7 4 - 3 8 /4 7 7 7 3 3 3 / / / 4 4 4 S O N e c o p t v . t . . 2 2 1 0 2 6 1 81 8 / 8 m - 2 8 -9 '/ 1 2 / 2 8 8 9 m V 1 / 2 2 1982— J D u e ly c . 20 4 6 111 1 1 /2 3 2 - 12 1 i 1 m 3 2 10 7'/4—73/4 71/4 3 91/2 91/2 23 ll'/2 111/2 24 71/4 71/4 Aug. 2 11—11W 11 F M e a b r . . 1 5 7 0 6 6 ' 3 /4 / 6 4 — 3 - / 7 6 4 ' 3 /4 /4 6 6 6 3 3 1 / / / 4 4 4 1979--Ju AA l uu y gg .. 2 2 1 0 0 7 10 \ 1 -1 0 0 0 l1 / / 2 2 1 W 10 0W ' /2 2 1 7 3 6 10 1 - 0 1 1 1 0 1 / 1 2 / 2 1 1 1 0 0 1 ' /2 14 61/4 61/4 Sept. 19 10'/>-l 1 11 30 10 10 MMaayy 2 1 3 6 6- 6 6 1/4 6 6 Oct. 2 8 1 1 1 1 1 - 12 1 12 1 Oct. 1 1 2 3 919/2V-102 9 9 1 1 / / 2 2 10 12 12 Nov. 22 9-91/2 9 1976— Jan. 19 51/2-6 51/2 26 9 9 23 51/2 5!/2 1980-- Feb. 15 12-13 13 Dec. 14 81/2-9 9 Nov. 22 51/4-51/2 5'/4 iy 13 13 15 8V2-9 8'/2 26 5'/4 51/4 MMaayy 29 12-13 13 17 8'/2 8'/2 30 12 12 1977— Aug. 30 5i/4-53/4 51/4 June 13 11-12 11 1984— Apr. 9 8V2-9 9 Sept. 31 2 51/ 5 4 3 - / 5 4 3 /4 5 5 3 3 / / 4 4 July 2 1 8 6 10 1 - 1 1 1 1 1 1 0 Nov. 2 1 1 3 81/2 9 - 9 m 9 Oct. 26 6 6 29 10 10 26 81/2 8'/2 Sept. 26 11 11 Dec. 24 8 8 1978— Jan. 9 6-6'/2 6'/2 Nov. 17 12 12 20 6'/2 61/2 Dec. 5 12-13 13 MMaayy 11 61/2-7 7 8 13 13 12 7 7 In effect Mar. 27, 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 TTyypp dd ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo tt ss ee ii rr tt vv ,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo ooff ss iitt dd ee ii pp nn oo ttee ss rr ii vv tt,, aa ll aa 55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts7 8 7 12/30/76 $0-$29.8 million 3 1/1/85 9 Vi 12/30/76 Over $29.8 million 1122 11//11//8855 $10 million-$100 million 113/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 16'/4 12/30/76 By original maturity Less than l'/2 years 3 10/6/83 Time and savings2,3 1 Vi years or more 0 10/6/83 Savings 3 3/16/67 Eurocurrency liabilities Time4 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2Vi 1/8/76 4 years or more 1 10/30/75 Over $5 million, by maturity 30-179 days 6 12/12/74 180 days to 4 years 2'A 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 citifes 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 hy 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 IVi 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

A8 Domestic Nonfinancial Statistics • May 1985 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions' Percent per annum Commercial banks Savings and loan associations and mutual savings banks (thrift institutions)' In effect Mar. 31, 1985 In effect Mar. 31, 1985 Type of deposit Effective date Percent Effective date 1 Savings 5W 1/1/84 5 Vi 7/1/79 2 Negotiable order of withdrawal accounts 5'/4 12/31/80 5'/4 12/31/80 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 Time accounts 5 7-31 days of less than Sl.OOO4 5'/! 1/1/84 5V2 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. 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 1985 TTyyppee ooff ttrraannssaaccttiioonn 11998822 11998833 11998844 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 17,067 18,888 20,036 0 187 3,249 507 4,463 3,410 0 2 Gross sales 8,369 3,420 8,557 897 1,491 71 1,300 0 0 2,668 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,000 2,400 7,700 600 800 0 2,200 0 0 1,600 Others within 1 year 5 Gross purchases 312 484 1,126 0 0 600 0 146 182 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift 17,295 18,887 16,354 428 3,811 872 896 1,348 771 596 8 Exchange -14,164 -16,553 -20,840 -2,606 -2,274 0 -1,497 -3,363 -966 -625 9 Redemptions 0 87 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,797 1,896 1,638 0 0 0 0 830 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -14,524 -15,533 -13,709 -345 -3,811 -872 -896 594 -771 -596 13 Exchange 11,804 11,641 16,039 2,606 1,443 0 1,497 1,763 966 625 S to 10 years 14 Gross purchases 388 890 536 0 0 0 0 335 0 0 15 Gross sales 0 0 300 0 0 0 0 0 0 100 16 Maturity shift -2,172 -2,450 -2,371 -83 52 0 0 -1,893 0 0 17 Exchange 2,128 2,950 2,750 0 500 0 0 850 0 0 Over 10 years 18 Gross purchases 307 383 441 0 0 0 0 164 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -601 -904 -275 0 -52 0 0 -49 0 0 21 Exchange 234 1,962 2,052 0 332 0 0 750 0 0 All maturities 22 Gross purchases 19,870 22,540 23,476 0 0 3,849 507 5,938 3,591 0 23 Gross sales 8,369 3,420 7,553 897 187 71 1,300 0 0 2,768 24 Redemptions 3,000 2,487 7,700 600 800 0 2,200 0 0 1,600 Matched transactions 25 Gross sales 543,804 578,591 808,986 81,799 79,087 52,893 89,689 51,904 63,674 66,668 26 Gross purchases 543,173 576,908 810,432 81,143 78,842 55,776 85,884 55,516 61,537 66,367 Repurchase agreements 27 Gross purchases 130,774 105,971 139,441 14,830 4,992 26,040 0 12,063 3,888 20,225 28 Gross sales 130,286 108,291 139,019 14,830 166 30,867 0 12,063 2,261 21,852 29 Net change in U.S. government securities 8,358 12,631 8,908 -2,154 2,478 1,835 -6,798 9,549 3,080 -6,295 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 189 292 256 1 5 1 14 90 0 0 Repurchase agreements 33 Gross purchases 18,957 8,833 1,205 958 381 3,743 0 698 506 1,463 34 Gross sales 18,638 9,213 817 958 12 4,112 0 698 119 1,851 35 Net change in federal agency obligations 130 -672 132 -1 364 -370 -14 -90 388 388 BANKERS ACCEPTANCES 36 Repurchase agreements, net 1,285 -1,062 -418 0 0 0 0 0 0 0 37 Total net change in System Open Market Account 9,773 10,897 6,116 -2,155 2,842 1,465 -6,811 9,459 3,468 -6,683 NOTE: Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • May 1985 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1985 1984 1985 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Dec. Jan. Feb. Consolidated condition statement ASSETS 1 Gold certificate account 11,095 11,095 11,094 11,094 11,093 11,096 11,095 11,093 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 495 514 527 537 555 436 497 551 Loans 4 To depository institutions 1,910 1,055 1,613 1,168 1,939 3,577 2,139 2,329 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 8,389 8,389 8,372 8,372 8,372 8,389 8,389 8,372 8 Held under repurchase agreements 0 0 0 304 0 388 0 380 U.S. government securities Bought outright 9 Bills 67,330 67,474 69,563 66,655 67,413 71,035 66,467 69,036 10 Notes 65,137 65,137 65,137 64,644 64,644 65,237 65,137 64,644 11 Bonds 22,951 22,951 22,951 23,444 23,444 22,951 22,951 23,444 12 Total bought outright1 155,418 155,562 157,651 154,743 155,501 159,223 154,555 157,124 13 Held under repurchase agreements 0 0 0 3,329 0 1,627 0 2,508 14 Total U.S. government securities 155,418 155,562 157,651 158,072 155,501 160,850 154,555 159,632 15 Total loans and securities 165,717 165,006 167,636 167,916 165,812 173,204 165,083 170,713 16 Cash items in process of collection 7,205 9,373 7,893 12,398 6,814 5,498 6,161 6,241 17 Bank premises 570 570 570 570 571 568 570 571 Other assets 18 Denominated in foreign currencies2 3,642 3,704 3,746 3,750 3,790 3,597 3,631 3,498 19 All other3 8,112 8,125 8,283 7,095 7,510 8,167 8,104 7,060 20 Total assets 201,454 203,005 204,367 207,978 200,763 207,184 199,759 204,345 LIABILITIES 21 Federal Reserve notes 161,845 162,681 163,359 163,508 162,710 168,327 162,125 162,992 Deposits 22 To depository institutions 23,717 21,330 24,723 24,398 22,090 21,818 19,858 25,092 23 U.S. Treasury—General account 2,963 5,618 3,974 3,916 3,099 5,316 5,349 3,308 24 Foreign—Official accounts 238 211 268 244 223 253 244 332 25 Other 650 597 479 473 452 865 560 461 26 Total deposits 27,568 27,756 29,444 29,031 25,864 28,252 26,011 29,193 27 Deferred availability cash items 6,085 6,728 5,704 9,513 6,226 4,653 5,659 6,297 28 Other liabilities and accrued dividends4 2,359 2,283 2,236 2,284 2,321 2,700 2,355 2,463 29 Total liabilities 197,857 199,448 200,743 204,336 197,121 203,932 196,150 200,945 CAPITAL ACCOUNTS 30 Capital paid in 1,635 1,650 1,661 1,664 1,669 1,626 1,639 1,669 31 Surplus 1,626 1,626 1,626 1,626 1,626 1,626 1,626 1,626 32 Other capital accounts 336 281 337 352 347 0 344 105 33 Total liabilities and capital accounts 201,454 203,005 204,367 207,978 200,763 207,184 199,759 204,345 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 116,856 115,854 116,226 117,145 116,415 122,134 116,649 116,519 Federal Reserve note statement 35 Federal Reserve notes outstanding 193,598 193,509 193,693 194,259 194,549 193,867 193,440 194,635 36 LESS: Held by bank 31,753 30,828 30,334 30,751 31,839 25,540 31,315 31,643 37 Federal Reserve notes, net 161,845 162,681 163,359 163,508 162,710 168,327 162,125 162,992 Collateral held against notes net: 38 Gold certificate account 11,095 11,095 11,094 11,094 11,093 11,096 11,095 11,093 39 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 146,132 146,968 147,647 147,7% 146,999 152,613 146,412 147,281 42 Total collateral 161,845 162,681 163,359 163,508 162,710 168,327 162,125 162,992 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. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Dec. 31 Jan. 31 Feb. 28 1 Loans—Total 1,910 1,055 1,599 1,168 1,939 3,577 2,139 2,329 ? Within 15 days 1,905 1,035 1,589 1,164 1,936 3,547 2,125 2,320 16 days to 90 days 5 20 10 4 3 30 14 9 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 155,418 155,562 157.651 158,072 155,501 160,850 154,555 159,632 1100 Within 15 days1 3,479 8,611 11,234 10,191 4,207 4,254 3,249 5,276 1111 16 days to 90 days 34,846 29,697 29,240 32,350 33,057 37,396 32,498 33.214 1? 91 days to 1 year 45,788 45,921 45,843 43,430 46,136 47,795 47,474 49,056 n Over 1 year to 5 years 37,072 37,100 37,101 36,859 36,859 37,072 37,101 36,844 14 Over 5 years to 10 years 14,000 14,000 14,000 14,546 14,546 14,100 14,000 14,546 15 20,233 20,233 20,233 20,696 20,696 20,233 20,233 20,696 16 Federal agency obligations—Total 8,389 8,389 8,372 8,676 8,372 8,777 8,389 8,752 17 Within 15 days1 97 17 82 485 234 575 97 615 18 16 days to 90 days 681 755 682 582 514 521 755 514 19 91 days to 1 year 1,718 1,724 1,748 1,748 1,739 1,665 1,644 1,738 70 Over 1 year to 5 years 4,248 4,262 4,229 4,230 4,222 4,350 4,248 4,222 71 Over 5 years to 10 years 1,246 1,232 1,232 1,232 1,264 1,267 1,246 1,264 22 Over 10 years 399 399 399 399 399 399 399 399 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • May 1985 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1984 1985 - 1981 1982 1983 1984 Dec. Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjustec ADJUSTED FOR 1 Total reserves2 32.10 34.28 36.14 38.71 38.24 38.39 38.14 37.76 38.11 38.71 39.71' 40.37 2 Nonborrowed reserves 31.46 33.65 35.36 35.52 32.32 30.37 30.90 31.74 33.50 35.52 38.32 39.08 3 Nonborrowed reserves plus extended credit3 31.61 33.83 35.37 38.13 37.32 37.41 37.36 36.80 37.33 38.13 39.37 39.88 4 Required reserves 31.78 33.78 35.58 37.86 37.63 37.70 37.52 37.14 37.42 37.86 38.97 39.47 5 Monetary base4 158.10 170.14 185.49 198.74 194.62 195.78 196.25 196.18 197.43 198.74 200.07 202.12 Not seasonally adjusted 6 Total reserves2 32.82 35.01 36.86 40.13 37.85 37.70 37.88 37.95 38.69 40.13 40.70' 39.88 7 Nonborrowed reserves 32.18 34.37 36.09 36.94 31.93 29.68 30.64 31.94 34.07 36.94 39.31 38.59 8 Nonborrowed reserves plus extended credit3 32.33 34.56 36.09 39.55 36.94 36.72 37.10 36.99 37.91 39.55 40.36 39.39 9 Required reserves 32.50 34.51 36.30 39.28 37.24 37.01 37.25 37.33 37.99 39.28 39.96 38.98 10 Monetary base4 160.94 173.17 188.76 202.02 195.90 196.11 196.07 196.13 198.22 202.02 200.93 199.55 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.92 41.85 38.89 40.70 37.47 37.26 38.04 38.51 39.23 40.70 41.12' 40.27 12 Nonborrowed reserves 41.29 41.22 38.12 37.51 31.55 29.25 30.80 32.50 34.62 37.51 39.73 38.98 13 Nonborrowed reserves plus extended credit3 41.44 41.41 38.12 40.09 36.39 36.29 37.29 37.37 38.54 40.09 40.88 39.83 14 Required reserves 41.61 41.35 38.33 39.84 36.86 36.57 37.41 37.89 38.54 39.84 40.38 39.37 15 Monetary base4 170.47 180.52 192.36 202.59 195.52 195.68 196.23 196.69 198.77 202.59 201.35 199.95 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 1984 1985 IItteemm11 DD 19 ee 8 cc 1 .. DD 19 ee 8 cc 2 .. DD 19 ee 8 cc 3 .. DD 19 ee 8 cc 4 .. NNoovv.. DDeecc.. JJaann..'' FFeebb.. Seasonally adjusted 1 Ml 441.9 480.5 525.4 558.5' 553.8' 558.5' 562.7 569.3 2 M2 1,796.6 1,965.3 2,196.3 2,371.4' 2,345.9 2,371.7 2,398.3 2,419.3 1 M3 2,236.7 2,460.3 2,710.4 2,995.2' 2,959.8' 2,995.2' 3,020.5 3,040.3 4 L 2,598.4 2,868.7 3,178.7 3,544.0 3,509.1 3,544.0 n.a. n.a. 5 Debt2 4,323.8 4,710.1 5,224.6 5,937.6 5,868.3' 5,937.6 6,000.8 n.a. Ml components 6 Currency2 124.0 134.1 148.0 158.7 157.9 158.7 159.4 160.6 7 Travelers checks3 4.3 4.3 4.9 5.2 5.1 5.2 5.3 5.3 8 Demand deposits4 236.2 239.7 243.7 248.6 246.8 248.6 249.1 251.7 9 Other checkable deposits5 77.4 102.4 128.9 145.9' 144.1 145.9' 148.9 151.7 Nontransactions components 10 In M26 1,354.6 1,484.8 1,670.9 1,812.9 1,791.9 1,812.9 1,835.7 1,850.1 11 In M3 only7 440.2 495.0 514.1 623.8' 614.2' 623.8' 622.2 620.9 Savings deposits9 12 Commercial Banks 159.7 164.9 134.6 122.6 123.8 122.6 121.6 121.4 13 Thrift institutions 186.1 197.2 178.2 165.9' 166.8' 165.9' 166.9 168.1 Small denomination time deposits9 14 Commerical Banks 349.6 382.2 353.1 387.0 384.5 387.0 384.4 381.7 15 Thrift institutions 477.7 474.7 440.0 498.1 493.4 498.1 496.8 494.3 Money market mutual funds 16 General purpose and broker/dealer 150.6 185.2 138.2 167.7' 162.0' 167.7' 172.2 175.4 17 Institution-only 36.2 48.4 43.2 62.7 58.3 62.7 65.0 62.2 Large denomination time deposits10 18 Commercial Banks11 247.3 261.8 225.1 264.4 263.6' 264.4 262.3 264.3 19 Thrift institutions 54.3 66.1 100.4 152.4 147.6 152.4 155.0 155.3 Debt components 20 Federal debt 830.1 991.4 1,173.1 1,367.1 1,347.2' 1,367.1 1,385.6 n.a. 21 Non-federal debt 3,493.7 3,718.7 4,051.6 4,570.5 4,521.0' 4,570.5 4,615.2 n.a. Not seasonally adjusted 22 Ml 452.3 491.9 537.9' 570.4' 555.9' 570.4' 568.2 558.5 23 M2 1,798.7 1,967.4 2,198.1 2,376.3' 2,343.8' 2,376.3' 2,403.6 2,412.6 24 M3 2,242.7 2,466.6 2,716.5 3,002.3' 2,960.3' 3,002.3' 3,024.2 3,033.6 25 L 2,605.6 2,876.5 3,189.4 3,545.7 3,509.2 3,509.2 n.a. n.a. 26 Debt2 4,323.8 4,710.1 5,218.5 5,931.0 5,855.9' 5,855.9 5,992.3 n.a. Ml components 27 Currency2 126.1 136.4 150.5 160.9 158.7 160.9 158.3 158.6 28 Travelers checks3 4.1 4.1 4.6 4.9 4.8 4.9 4.9 5.0 29 Demand deposits4 243.6 247.3 251.6 257.4 248.9 257.4 254.9 244.9 30 Other checkable deposits5 78.5 104.1 131.3 147.2' 143.4' 147.2' 150.1 150.0 Nontransactions components 31 M26 1,346.3 1,475.5 1,660.2 1,805.9 1,787.9' 1,805.9 1,835.4 1,854.4 32 M3 only7 444.1 499.2 518.4 626.0' 616.5' 626.0' 620.6 620.7 Money market deposit accounts 33 Commercial banks n.a. 26.3 230.0 267.1 257.1 267.1 280.4 289.3 34 Thrift institutions n.a. 16.6 145.9 148.1' 145.5 148.1' 153.3 159.1 Savings deposits8 35 Commercial Banks 157.5 162.1 132.0 121.4 122.7 121.4 121.1 120.4 36 Thrift institutions 184.7 195.5 176.5 164.8' lee.O' 164.8' 165.7 166.5 Small denomination time deposits9 37 Commercial Banks 347.7 380.1 351.0 387.6 387.1 387.6 386.0 383.8 38 Thrift institutions 475.6 472.4 437.6 498.8 496.8 498.8 501.6 498.2 Money market mutual funds 39 General purpose and broker/dealer 150.6 185.2 138.2 167.7' 162.0' 167.7' 172.2 175.4 40 Institution-only 36.2 48.4 43.2 62.7 58.3 62.7 65.0 62.2 Large denomination time deposits10 41 Commercial Banks11 252.1 266.2 228.5 265.9 263.6 265.9' 263.1 263.8 42 Thrift institutions 54.3 66.2 100.7 151.6 148.1 151.6 154.5 155.3 Debt components 43 Federal debt 830.1 991.4 1,170.2 1,364.7 1,343.0 1,364.7 1,383.1 n.a. 44 Non-federal debt 3,943.7 3,718.7 4,048.3 4,566.3 4,512.9' 4,566.3 4,609.2 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • May 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 1985 Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 80,858.7 90,914.4 109,642.3 128,141.9 124,117.4 142,907.3 134,016.3 137,512.0 140,678.6 2 Major New York City banks 34,108.1 37,932.9 47,769.4 57,096.5 55,591.4 67,488.7 60,992.8 62,341.0 64,474.7 3 Other banks 46,966.5 52,981.5 61,873.1 71,045.4 68,526.0 75,418.5 73,023.5 75,171.0 76,203.9 4 ATS-NOW accounts3 761.0 1,036.2 1,405.5 1,851.9 1,640.6 1,698.6 1,678.5 1,677.5 1,552.0 5 Savings deposits4 679.6 720.3 741.4 694.5 566.8 597.2 579.1 486.0 501.3 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 285.8 324.2 379.7 436.7 424.5 486.8 448.2 453.4 468.6 7 Major New York City banks 1,116.7 1,287.6 1,528.0 1,834.6 1,822.5 2,199.6 1.917.5 1,903.0 2,008.6 8 Other banks 185.9 211.1 240.9 270.9 261.7 286.9 273.3 277.8 284.2 9 ATS-NOW accounts3 14.4 14.5 15.6 18.3 16.2 16.9 16.5 16.3 14.6 10 Savings deposits4 4.1 4.5 5.4 5.6 4.6 4.9 4.7 4.0 4.2 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 81,197.9 91,031.8 109,517.6 133,844.2 120,120.8 141,249.5 131,791.6 140,166.0 148,880.1 12 Major New York City banks 34,032.0 38,001.0 47,707.4 59,743.8 54,329.0 64,790.2 61,148.7 64,498.9 68,203.1 13 Other banks 47,165.9 53,030.9 64,310.2 74,100.3 65,791.8 76,459.2 70,643.0 75,667.1 80,677.0 14 ATS-NOW accounts3 737.6 1,027.1 1,397.0 1,629.4 1,523.7 1,665.7 1,524.8 1,625.4 1,838.9 15 MMDA5 567.4 888.2 821.6 901.1 819.7 899.7 1,103.9 16 Savings deposits4 672.9 720.0 742.0 680.3 543.1 616.2 538.7 470.6 544.7 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 286.4 325.0 379.9 465.7 408.9 479.9 438.8 447.1 486.0 18 Major New York City banks 1,114.2 1,295.7 1,510.0 2,008.0 1,786.4 2,120.7 1,944.6 1,910.8 2,025.9 19 Other banks 186.2 211.5 240.5 287.6 249.8 289.9 262.7 270.5 295.9 20 ATS-NOW accounts3 14.0 14.4 15.5 16.4 15.2 16.6 14.9 15.4 17.1 ">\ MMDA5 2.8 3.7 3.4 3.7 3.2 3.4 4.0 22 Savings deposits4 4.1 4.5 5.4 5.5 4.5 5.1 4.4 3.9 4.6 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 NonfinancialS tatistics • May 1985 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1984 1985 CCaatteeggoorryy Mar. Apr. May June July Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. Seasonally adjusted 1 Total loans and securities2 1,599.6 1,612.9 1,629.8 1,636.6 1,652.6 1,662.1 1,674.9 1,682.8 1,701.1 1,714.8 1,724.0 1,742.0 2 U.S. government securities 261.0 257.6 257.3 253.7 256.4 257.1 258.0 257.0 259.4 260.2 260.1 265.7 3 Other securities 142.3 142.1 140.5 139.7 139.5 140.8 141.9 141.5 141.1 139.9 142.5 141.2 4 Total loans and leases2 1,196.3 1,213.2 1,232.0 1,243.2 1,256.7 1,264.2 1,275.0 1,284.3 1,300.6 1,314.7 1,321.4 1,335.2 5 Commercial and industrial 432.2 438.5 448.0 452.2 455.0 458.1 460.0 463.0 467.1 468.1 468.5 473.8 6 Bankers acceptances held3.. 5.6 5.2 5.8 5.8 6.5 6.1 5.7 5.9 6.2 5.4 5.1 66..33 7 Other commercial and industrial 426.6 433.2 442.2 446.3 448.5 451.9 454.3 457.1 460.8 462.7 463.4 467.5 8 U.S. addressees4 414.3 420.8 430.2 434.7 436.8 440.3 443.2 446.5 450.5 453.1 453.7 457.4 9 Non-U.S. addressees4.... 12.3 12.4 12.0 11.7 11.6 11.6 11.1 10.6 10.3 9.6 9.7 10.2 10 Real estate 342.9 347.2 350.7 354.7 358.3 361.2 364.8 367.7 371.8 375.6 377.9 381.9 11 Individual 221.1 224.9 229.0 233.0 236.3 238.5 241.3 243.5 246.7 251.0 254.6 257.7 12 Security 29.6' 29.6 30.1 28.6' 28.0 26.1 28.8 30.3 30.2 31.5 31.9 3311..66 13 Nonbank financial institutions 30.2 30.5' 31.4 31.4 31.4 30.8' 31.2' 31.1 31.2 31.4 31.4 30.9 14 Agricultural 40.0 40.1 40.3 40.4 40.6 40.5 40.7 40.6 40.5 40.3 40.2 4400..22 15 State and political subdivisions 35.6' 36.fr 37.4 38.7 40.1 40.9 41.5 41.0 41.9 43.8 46.5 46.4 16 Foreign banks 12.8 12.7 12.3 12.3 12.2 12.0 11.5 11.4 11.7 11.4 11.3 11.4 17 Foreign official institutions ... 9.1 8.9 8.9 8.9 9.3 9.4 9.0 8.6 8.4 8.3 7.9 7.9 18 Lease financing receivables... 13.8 14.0 14.1 14.3 14.5 14.8 15.0 15.1 15.3 15.5 15.6 15.8 19 All other loans 29.0' 30.2' 29.8 29^ 31.1 31.9 31.3 32.C 35.9 37.7 35.5 37.6 Not seasonally adjusted 20 Total loans and securities2 1,596.5 1,613.7 1,626.6 1,637.6 1,646.7 1,656.1 1,673.3 1,684.0 1,701.9 1,725.8 1,732.0 1,740.1 21 U.S. government securities 263.1 263.0 259.4 257.2 256.2 255.5 255.8 254.1 255.3 256.9 260.0 266.6 2 2 2 3 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 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 . . 0 9 1,3 1 0 4 5 1 . . 5 2 1,3 1 2 4 7 1 . . 4 5 1,3 1 2 4 8 3 . . 6 4 1,3 1 3 4 2 1 . . 1 4 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 es s tr h i e a l l d . 3 . . . . . 431 5 . . 8 5 438 5 . . 7 3 446 5 . . 8 7 45 6 0 . . 0 9 454 6. . 4 3 456 5 . . 1 9 45 5 9. . 9 6 463 5 . . 8 8 46 66 7 .. . 11 3 471 5 . . 2 8 470 55.. . 22 4 47 66 3 .. . 11 3 26 Other commercial and 2277 U. i S n . d u ad st d ri r a e l s sees4 4 41 2 4 6 . . 4 3 4 4 3 2 3 1 . . 4 7 4 42 4 9 1 . . 5 0 4 4 4 3 4 3. . 5 8 4 43 4 6 7 . . 2 9 4 4 5 3 0 8 . . 1 5 4 4 5 4 4 3 . . 3 0 4 4 5 4 8 7 . . 0 0 4 4 6 5 1 0 . . 2 2 4 4 6 5 5 4 . . 3 8 4 4 6 5 5 5 . . 2 4 4 4 6 5 7 7 . . 2 5 28 Non-U.S. addressees4.... 11.8 11.7 11.6 11.3 11.7 11.6 11.3 11.1 11.0 10.6 9.8 9.7 29 Real estate 341.9 346.0 349.8 354.1 357.7 361.4 365.9 368.9 372.8 376.2 378.5 381.5 30 Individual 219.3 222.9 227.2 231.3 234.7 238.3 242.4 245.3 248.4 254.0 257.1 257.4 31 Security 29.0 29^ 28.9 28.5 26.6 25.4 27.7 30.2' 31.7 3355..22 3333..00 3300..88 32 Nonbank financial institutions 30.2 30.7 31.2 31.4 31.4 30.9' 31.3' 31.1 31.1 31.5 31.4 30.7 3333 Agricultural 39.0 39.4 40.2 40.9 41.3 41.4 41.5 41.2 40.6 4400..00 3399..66 3399..44 34 State and political subdivisions 35.6' 36.6' 37.4 38.7 40.1 40.9 41.5 41.0 41.9 43.8 46.5 46.4 3355 Foreign banks 12.6 12.3 12.0 11.8 12.0 11.7 11.7 11.8 12.0 12.0 11.6 11.4 36 Foreign official institutions ... 9.1 8.9 8.9 8.9 9.3 9.4 9.0 8.6 8.4 8.3 7.9 7.9 37 Lease financing receivables... 14.0 14.0 14.1 14.3 14.4 14.7 14.9 15.0 15.1 15.5 15.8 16.0 38 All other loans 28.4' 29.8' 29.8' 30.3 30.5 30.0 30.7 32.3 36.0 39.7 36.7 37.4 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 1984 1985 SSoouurrccee Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Total nondeposit funds 1 Seasonally adjusted2 98.9 102.1 109.1 99.4 100.3 103.5 106.5 107.9 112.0 108.6' 102.2 113.6 2 Not seasonally adjusted 101.3 105.0 113.8 101.8 99.9 105.7 107.0 109.6 117.5 111.1 104.6 117.1 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 135.8 135.7 137.4 133.2 134.5 139.3 141.6 141.4 145.0 140.5 138.7 146.7 4 Not seasonally adjusted 138.1 138.7 142.1 135.7 134.0 141.5 142.1 143.1 150.5 143.1 141.1 150.2 5 Net balances due to foreign-related institutions, not seasonally adjusted -36.8 -33.5 -28.2 -33.9' -34.2' -35.8' -35.1' -33.5' -33.1' -32.0' -36.5 -33.1 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -34.8 -33.1 -29.8 -32.9' -33.1' -35.(K -35.2' -34.2' -32.7' -31.4' -34.9 -31.8 7 Gross due from balances 73.8 73.6 73.5 73.8 71.2 72.8 71.5 69.8 68.3 69.0 71.4 70.6 8 Gross due to balances 38.9 40.4 43.6 40.9 38.1 37.7 36.3 35.6 35.6 37.6 36.5 38.8 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 -1.8 -0.3 1.6 -o.y -1.0 -0.7 0.1 0.7 -0.4' -O^ -1.6 -1.3 10 Gross due from balances 50.2 49.6 49.7 50.7 51.9 51.6 51.7 50.8 50.7 52.0 52.9 54.0 U Gross due to balances 48.3 49.2 51.2 49.7 50.8 50.8 51.8 51.5 50.4 51.4 51.3 52.7 Security RP borrowings 12 Seasonally adjusted" 80.1 80.9 79.6 76.1 77.5 79.9 81.4 82.0 84.0 81.1 82.3 90.1 13 Not seasonally adjusted 79.9 81.3 81.9 76.0 74.6 79.6 79.4 81.2 87.0 81.1 82.2 91.1 U.S. Treasury demand balances7 14 Seasonally adjusted 16.1 15.6 13.4 14.1 12.8 13.1 16.0 8.0 17.3 16.1 1144..77 13.0 15 Not seasonally adjusted 17.5 16.5 12.8 12.4 11.9 10.3 17.5 11.0 10.4 12.5 18.5 15.8 Time deposits, $100,000 or more8 16 Seasonally adjusted 289.3 292.2 302.2 309.9 314.8 314.2 315.4 321.4 323.0 325.8 324.8 325.2 17 Not seasonally adjusted 290.1 290.1 300.2 309.0 313.7 315.6 316.8 322.2 322.9 327.3 325.6 324.9 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

A18 Domestic Nonfinancial Statistics • May 1985 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1983 1984 1985 AAccccoouunntt Dec. May June July Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. ALL COMMERCIAL BANKING INSTITUTIONS' 1 Loans and securities 1,680.62 1,756.9 1,764.1 1,765.3 1,784.5 1,798.9 1,822.7 1,822.7 1,864.0 1,854.5 1,874.4 2 Investment securities 7.4 382.0 381.2 378.2 376.2 377.3 375.2 374.4 377.5 381.3 382.2 3 U.S. government securities 6.1 247.7 248.2 246.5 243.5 243.5 241.2 240.4 242.5 244.8 247.9 4 Other 1.3 134.4 133.0 131.7 132.7 133.8 134.0 133.9 134.9 136.4 134.3 5 Trading account assets .0 18.8 14.6 15.7 20.0 20.9 22.5 21.9 22.9 24.2 27.6 6 Total loans 1,249.32 1,356.1 1,368.3 1,371.4 1,388.4 1,400.6 1,424.9 1,426.4 1,463.7 1,449.1 1,464.6 7 Interbank loans 111.42 124.7 122.8 118.6 127.1 123.3 126.1 122.6 126.9 125.3 128.7 8 Loans excluding interbank 1.137.92 1,231.4 1,245.5 1,252.8 1,261.2 1,277.3 1,298.8 1,303.8 1,336.8 1,323.8 1,335.9 9 Commercial and industrial 419.4 447.3 452.9 454.4 455.2 459.9 467.7 468.7 476.8 470.6 477.3 10 Real estate 332.4r 350.3 354.6 356.8 361.8 366.7 369.8 374.4 377.7 380.5 382.5 11 Individual 217.6'' 228.4 232.8 235.2 240.0 243.4 247.1 249.6 255.5 257.6 258.1 12 All other 168.52 205.4 205.2 206.5 204.2 207.3 214.2 211.1 226.8 215.1 218.0 13 Total cash assets 219.6 202.5 185.6 179.1 177.3 176.0 188.0 188.4 201.9 187.8 189.2 14 Reserves with Federal Reserve Banks 23.5 18.6 19.1 19.4 17.4 .8 18.1 20.4 20.5 20.9 19.6 15 Cash in vault 23.4 22.3 21.8 21.6 22.2 21.6 21.4 23.9 23.3 21.9 21.8 16 Cash items in process of collection ... 73.2 76.4 63.7 60.2 60.7 63.2 70.2 66.5 75.9 66.9 68.7 17 Demand balances at U.S. depository institutions 34.8 30.8 29.3 29.5 31.2 32.0 30.9 34.5 30.9 32.3 18 Other cash assets 50.4 50.1 48.6 47.5 59.3 46.3 46.7 47.7 47.3 46.7 19 Other assets 193.6 200.1 205.9 205.4 204.7 215.3 215.7 204.2 210.9 205.8 209.1 20 Total assets/total liabilities and capital ... 2,093.8 2,159.5 2,155.5 2,149.7 2,166.5 2,190.2 2,226.3 2,215.3 2,276.7 2,248.1 2,272.7 21 Deposits 1,508.9 1,541.3 1,532.9 1,535.5 1,539.0 1,549.9 1,578.9 1,578.2 1,631.2 1,604.5 1,617.9 22 Transaction deposits 374.62 462.6 445.9 441.4 440.0 442.3 462.7 453.1 491.1 456.9 459.4 23 Savings deposits 457.22 371.6 369.5 368.5 365.1 364.9 371.1 378.1 386.3 400.0 406.8 24 Time deposits 677.1 707.2 717.4 725.6 734.0 742.7 745.0 747.0 753.8 747.5 751.8 25 Borrowings 273.22 292.8 292.8 292.0 301.5 307.1 314.3 ,298.8 304.1 306.7 309.0 26 Other liabilities 164.42 187.8 187.9 182.0 183.8 187.0 189.2 193.5 195.2 188.4 196.8 27 Residual (assets less liabilities) 147.32 137.6 141.9 140.2 142.1 146.2 144.0 144.8 146.2 148.6 149.0 MEMO 28 U.S. government securities (including trading account) 254.12 260.1 256.5 255.6 255.1 255.5 256.3 255.2 256.9 261.8 269.4 29 Other securities (including trading account) 117777..2222 140.7 139.3 138.3 141.0 142.7 141.5 141.1 143.4 143.6 140.4 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 1.591.32 1,663.2 1,671.0 1,676.7 1,688.4 1,708.0 1,728.5 1,726.7 1,765.4 1,759.5 1,774.6 31 Investment securities n.a. 375.3 374.5 371.2 369.1 370.0 367.9 367.5 370.5 374.0 374.9 32 U.S. government securities n.a. 242.5 243.1 241.4 238.5 238.5 236.1 235.8 237.9 240.0 243.1 33 Other n.a. 132.8 131.4 129.8 130.7 131.5 131.8 131.6 132.6 134.0 131.7 34 Trading account assets n.a. 18.8 14.6 15.7 20.0 20.9 22.5 21.9 22.9 24.2 27.6 35 Total loans 1,167.42 1,269.2 1,281.8 1,289.8 1,299.4 1,317.0 1,338.0 1,337.3 1,372.1 1,361.3 1,372.1 36 Interbank loans 87.02 96.2 94.7 95.2 97.6 100.0 103.3 96.1 102.8 100.6 101.0 37 Loans excluding interbank 1.080.42 1,172.9 1,187.1 1,194.6 1,201.8 1,217.1 1,234.7 1,241.2 1,269.3 1,260.7 1,271.1 38 Commercial and industrial 381.32 407.4 412.9 414.0 414.5 418.8 423.0 424.7 430.2 426.2 432.0 39 Real estate 327.2 346.1 350.5 353.1 358.0 362.4 365.5 369.1 372.1 374.9 377.1 40 Individual 217.4 228.3 232.6 235.1 239.8 243.2 246.9 249.4 255.3 257.4 257.9 41 All other I54.62 191.1 191.1 192.4 189.6 192.6 199.3 198.0 211.7 202.2 204.1 42 Total cash assets 207.0 190.7 173.2 166.7 165.9 164.0 176.6 176.8 190.3 175.7 177.8 43 Reserves with Federal Reserve Banks 19.9 17.4 18.4 18.0 16.7 .1 17.1 19.7 19.2 20.2 18.7 44 Cash in vault 23.4 22.3 21.8 21.6 22.2 21.6 21.4 23.9 23.3 21.9 21.8 45 Cash items in process of collection ... 73.0 76.3 63.5 60.1 60.5 63.0 69.9 66.3 75.7 66.7 68.5 46 Demand balances at U.S. depository institutions 1 90 8 33.5 29.4 27.9 28.2 29.7 30.7 29.4 32.9 29.5 31.0 47 Other cash assets J 41.3 40.1 39.2 38.3 49.6 37.5 37.5 39.3 37.5 37.9 48 Other assets 150.4 139.0 141.5 138.9 140.6 145.6 147.9 139.7 142.1 137.5 138.8 49 Total assets/total liabilities and capital ... 1,948.7 1,992.9 1,985.7 1,982.3 1,995.0 2,017.6 2,053.1 2,043.2 2,097.8 2,072.6 2,091.2 50 Deposits 1,468.1 1,501.7 1,492.5 1,495.4 1,500.3 1,510.9 1,539.1 1,538.0 1,587.8 1,561.8 1,573.7 51 Transaction deposits 368.52 456.2 439.6 434.8 433.7 435.9 456.2 446.8 484.5 450.6 452.9 52 Savings deposits 456.62 370.7 368.6 367.5 364.2 363.9 370.1 377.1 385.2 398.9 405.6 53 Time deposits 643.0 674.9 684.3 693.1 702.4 711.1 712.8 714.1 718.1 712.3 715.2 54 Borrowings 214.12 232.5 229.6 228.0 236.0 243.5 251.3 240.9 243.1 246.5 247.0 55 Other liabilities 122.32 123.9 124.4 121.5 119.3 119.7 120.5 122.3 123.5 118.5 124.3 56 Residual (assets less liabilities) 144.12 134.8 139.1 137.4 139.3 143.4 142.1 142.0 143.4 145.8 146.2 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 Jan. W Jan. 23' Jan. 3(y Feb. 6r Feb. 13r Feb. 20 Feb. 27 Mar. 6 Mar. 13 1 Cash and balances due from depository institutions 101,126 90,655 90,836 88,256 93,172 105,784 90,922 91,714 94,036 2 Total loans, leases and securities, net 826,749 814,822 817,895 820,785 823,236 827,540 828,529 830,362 829,862 3 U.S. Treasury and government agency 82,199 82,843 83,912 86,224 85,711 90,052 91,519 91,955 90,326 4 Trading account 15,085 15,845 17,019 17,807 17,610 20,290 21,500 22,233 20,417 5 Investment account, by maturity 67,114 66,998 66,892 68,417 68,102 69,762 70,020 69,722 69.910 6 One year or less 20,888 20,480 20,348 20,186 20,187 19,958 20,318 21,653 21,687 7 Over one through five years 32,678 33,073 33,158 34,799 34,476 37,044 36,711 35,002 35,036 8 Over five years 13,548 13,446 13,387 13,432 13,438 12,760 12,991 13,066 13,186 9 Other securities 48,974 48,901 48,997 48,501 48,084 47,953 47,400 47,341 46,868 10 Trading account 3,770 3,654 3,952 3,845 3,551 3,571 3,166 3,248 3,248 11 Investment account 45,204 45,247 45,045 44.656 44,533 44,382 44,235 44,093 43,620 12 States and political subdivisions, by maturity 40,676 40,694 40,522 40,089 39,978 39,833 39,683 39,518 39,044 13 One year or less 5,363 5,402 5,192 5,298 5,340 5,329 5,252 5,245 4,922 14 Over one year 35,313 35,291 35,330 34,791 34,638 34,503 34,431 34,273 34,121 15 Other bonds, corporate stocks, and securities 4,528 4,553 4,523 4,567 4,554 4,550 4,552 4,574 4,577 16 Other trading account assets 2,726 3,438 3,201 3,495 3,435 3,238 2,956 2,965 3,047 17 Federal funds sold1 58,733 49,260 52,092 48.462 51,402 49,624 49,087 47,357 51,504 18 To commercial banks 42,589 34,326 36,676 32.514 36,888 34,637 33,724 31,169 35,205 19 To nonbank brokers and dealers in securities 11,255 11,237 11,664 11,608 10,403 10,619 11,048 11,698 11,514 20 To others 4,889 3,697 3,752 4,341 4,111 4,368 4,315 4,490 4,785 21 Other loans and leases, gross2 650,447 646,744 646,145 650,685 651,136 653,250 654,197 657,481 654,948 22 Other loans, gross2 637,627 633,907 633,330 637,827 638,275 640,265 641,040 644,320 641,742 23 Commercial and industrial2 250,656 249,053 249,235 251,337 251,338 252,392 253,284 255,650 254,929 24 Bankers acceptances and commercial paper 3,073 3,038 3,296 3,780 3,945 3,844 3,928 4,404 4,138 25 All other 247,583 246,015 245,939 247,557 247,393 248,548 249,356 251,247 250,791 26 U.S. addressees 241,885 240,324 240,305 241,901 241,781 242,854 243,642 245,488 245,074 27 Non-U.S. addressees 5,698 5,691 5,634 5,656 5,612 5,694 5,714 5,759 5,717 28 Real estate loans2 161,246 161,512 161,963 162,234 162,850 163,037 163,485 163,859 164,340 29 To individuals for personal expenditures 114,789 114,688 114,876 114,584 114,699 114,861 115,329 115,520 115,708 30 To depository and financial institutions 40,944 40,787 40,101 42,116 42,052 41,107 40,823 40,234 39,422 31 Commercial banks in the United States 10,038 10,175 10,121 11,549 11,361 10,931 11,203 10,750 9,968 32 Banks in foreign countries 6,008 6,403 5,923 6,276 6,410 6,092 5,838 5,797 5,814 33 Nonbank depository and other financial institutions , 24,899 24,208 24,057 24,290 24,280 24,084 23,782 23,686 23,641 34 For purchasing and carrying securities 15,618 13,883 13,192 13,595 13,187 14,019 13,638 14,920 13.802 35 To finance agricultural production 6,942 6,902 6,905 6,872 6,893 6,886 6,882 6,982 6,995 36 To states and political subdivisions 29,520 29,418 29,508 29,328 29,186 29,394 29,382 29,337 29,405 37 To foreign governments and official institutions 3,812 3,726 3,796 3,745 3,851 3,720 3,967 3,649 3,616 38 All other 14,100 13,938 13,754 14,015 14,220 14,849 14,249 14,168 13,526 39 Lease financing receivables 12,819 1122,,883377 12,814 12,857 12,860 12,985 13,157 13,162 13,205 40 LESS: Unearned income 5,304 55,,330088 5,310 5,263 5,260 5,263 5,294 5,243 5,274 41 Loan and lease reserve2 11,026 11,057 11,143 11,320 11,272 11,314 11,337 11,493 11,556 42 Other loans and leases, net2 634,117 630,379 629,692 634,102 634,604 636,673 637,565 640,745 638,117 43 All other assets 134,512 131,645 129,845 131,026 132,105 129,575 131,168 130,895 128,477 44 Total assets 1,062,387 1,037,122 1,038,576 1,040,067 1,048,514 1,062,900 1,050,619 1,052,971 1,052,376 45 Demand deposits 198,444 186,198 184,629 184,622 188,258 197,228 185,246 185,067 182,062 46 Individuals, partnerships, and corporations 151,542 140,781 139,377 139,190 145,248 148,928 140,344 140,674 142,069 47 States and political subdivisions 5,376 5,902 5,136 5,778 4,684 5,515 4,901 5,171 4,424 48 U.S. government 3,760 3,034 2,768 2,212 1,617 1.897 2,713 2,286 1,156 49 Depository institutions in United States 22,242 20,998 20,973 21,849 20,951 25,266 22,190 22,104 20,434 50 Banks in foreign countries 5,823 6,495 6,187 5,961 6,131 6,366 5,740 5,391 5,143 51 Foreign governments and official institutions 809 830 1,040 1,152 922 821 744 736 666 5 5 5 5 5 3 4 2 T N r o I C a n n n e t d s r r i a t a v i c n f i t i d s i e a o u d c n a t l a i s b n o , a d n p l a o a b n r f a c t f l n i e a c e s n e r c r s o e s h t ' s h i c p e h s r e a t c h n k a d s n c d o e r m po a r n a d t io d n e s p osits 4 42 6 3 6 0 6 8 . , , , 3 1 7 8 7 2 9 9 5 3 7 1 4 4 5 2 3 8 9 5 5 , , , , 7 8 1 1 6 8 5 0 4 4 7 8 4 42 5 3 5 9 9 4 , , , , 1 5 1 6 0 9 4 9 0 6 8 0 4 4 5 2 3 9 5 8 6 , , , , 9 4 4 5 3 7 7 4 6 9 4 8 4 4 2 6 3 4 0 8 5 , , , , 1 9 7 8 6 2 0 4 2 3 5 8 4 4 6 2 3 0 5 8 5 , , , , 2 4 0 9 4 3 0 5 7 5 8 7 4 4 6 2 3 2 6 8 5 , , , , 4 4 6 4 9 3 1 7 0 5 3 6 4 4 6 2 3 2 7 8 7 , , , , 8 4 7 4 0 9 0 0 2 2 4 9 4 42 6 3 6 2 8 6 , , . , 8 3 1 6 5 5 8 7 1 0 7 0 56 States and political subdivisions 21,547 21,687 22,104 22,243 22,825 22,919 23,344 22,948 23,154 57 U.S. government 464 454 450 447 447 445 421 453 353 58 Depository institutions in the United States 8,602 8,677 8,912 8,915 8,996 8,957 9,334 9,125 9,242 59 Foreign governments, official institutions and banks.. 3,135 3,062 3.029 2,882 2,970 2,917 2,955 2,784 2,750 60 Liabilities for borrowed money 199,741 192,874 195,657 193,727 197,187 200,277 197,161 197.212 199,272 61 Borrowings from Federal Reserve Banks 846 510 1,555 862 1,369 780 1,544 1,200 5,521 62 Treasury tax-and-loan notes 10,284 14,859 15,650 7,462 8,269 9,147 10,360 3,693 2,168 63 All other liabilities for borrowed money3 188,611 177,505 178.452 185,403 187,549 190,350 185,258 192,319 191,584 64 Other liabilities and subordinated note and debentures 94,920 90,931 91.638 92,260 93,898 96,227 97,526 97,188 98,626 65 Total liabilities 990,024 964,874 966,209 967,119 975,354 989,936 977,899 979,679 978,996 66 Residual (total assets minus total liabilities)4 72,362 72,247 72.366 72,948 73,159 72,963 72,720 73,292 73,379 6 6 7 6 7 7 7 8 9 0 7 3 1 2 T T L M T N i o o o E o m O C t t a M n a a e n o t l t l O h s r m d a l e l o o n s e m r a o a p s e n n l a o d r s s c s c t i o i a a i t a o s n u n l n d d t i r a n i l n s g l e e a a d h a a v m t s s i i e n e n o to s s g d u s u n ( ( a g s g t f d s t r f r r e o i o i l p o s a s i f s o a s l ) ) t s $ e i a a s 1 ts d n — 0 d j 0 ( u t , i 0 o n s in t 0 t c e a v 0 l l d u e 6 2 d o s 5 i r t n m m g e o n M r t e s M ad D ju A s s t ) e . d .. 5 7 6 1 1 9 5 5 7 2 0 6 8 1 1 , , , , , , 4 9 5 1 8 9 9 5 5 3 3 6 7 5 2 3 3 8 5 5 9 6 7 1 1 5 8 5 7 2 1 6 7 2 1 , , , , , , 8 5 6 6 4 9 9 9 0 9 8 7 4 5 8 3 2 6 3 0 8 7 6 1 1 8 5 5 7 2 7 1 6 3 1 . , , , . , 7 5 4 9 4 8 9 8 5 4 7 7 8 0 5 0 0 6 9 4 0 6 7 1 1 5 9 5 7 2 5 3 6 4 1 , , , , , , 7 0 3 1 5 8 8 1 8 0 7 3 6 5 7 4 4 8 2 1 6 7 6 1 1 5 9 5 7 2 4 1 6 4 1 , , , , , , 8 2 5 1 8 8 9 8 1 1 2 8 7 3 8 1 9 3 5 2 9 6 7 1 1 5 9 5 7 7 2 8 5 5 1 , , , , , , 3 8 5 7 7 9 9 0 4 4 1 5 3 1 7 7 1 1 0 1 0 6 8 1 1 5 0 7 5 2 8 0 6 7 1 , , , , , , 8 3 3 2 1 9 8 2 5 8 9 3 4 8 2 7 6 4 3 2 0 6 8 1 1 6 0 7 5 2 2 6 5 7 1 , , , , , , 8 9 7 0 1 9 8 4 1 2 2 4 7 8 4 9 8 6 2 9 6 6 8 1 1 6 0 7 5 1 2 1 6 6 1 , , , , , , 8 2 4 5 6 9 9 7 4 7 2 7 2 1 1 7 9 0 3 9 8 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

A20 Domestic NonfinancialS tatistics • May 1985 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1985 AAccccoouunntt Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 March 6 March 13 1 Cash and balances due from depository institutions 26,265' 23,913' 24,15C 22,551' 26,683' 27,586 22,661 21,904 24,355 2 Total loans, leases and securities, net1 173,469' 168,262' 168,335' 169,791' 171,345' 173,601 174,709 174,882 176,690 Securities 3 4 5 Investment account, by maturity 9,769 9,717 9,649 11,209 10,499 12,756 13,243 13,207 13,335 6 One year or less 1,963 1,638 1,619 1,556 1,658 1,764 2,200 2,256 2,257 7 Over one through five years 5,708 6,092 6,083 7,745 6,944 9,683 9,631 9,447 9,447 8 Over five years 2,097 1,986 1,947 1,907 1,897 1,309 1,412 11,,550044 11,,663311 9 10 11 Investment account 9,863 9,900 9,830 9,720 9,655 9,592 9,57i 9,522 9,254 12 States and political subdivisions, by maturity 9,030 9,067 8,985 8,861 8,800 8,729 8,715 8,677 8,360 13 One year or less 1,302 1,288 1,116 1,251 1,253 1,239 1,229 1,219 995 14 Over one year 7,728 7,779 7,869 7,609 7,547 7,490 7,486 7,458 7,365 15 Other bonds, corporate stocks and securities 833 833 844 859 855 862 856 845 894 1166 Loans and leases 17 Federal funds sold3 21,986 18,199 19,570 17,860 20,214' 20,598 20,884 19,281 22,388 18 To commercial banks 12,842 10,141 11,798 9,407 12,478 12,728 12,713 10,979 13,590 19 To nonbank brokers and dealers in securities 6,153 6,004 5,505 5,830 5,353' 5,228 5,487 5,398 5,812 20 To others 2,991 2,055 2,268 2,623 2,383 2,642 2,684 2,904 2,986 21 Other loans and leases, gross 136,624' 135,227' 134,080' 135,825' 135,793' 135,496 135,885 137,768 136,653 22 Other loans, gross 134,537' 133,140' 132,046' 133,769' 133,729' 133,352 133,599 135,490 134,386 23 Commercial and industrial 62,232' 61,208' 61,005' 61,355' 61,362' 60,954 61,373 62,359 61,852 24 Bankers acceptances and commercial paper 661 649 681 991 1,121 1,008 969 1,071 902 25 All other 61,571' 60,560' 60,324' 60,364' 60,24C 59,946 60,404 61,288 60,950 26 U.S. addressees 60,911' 59,896' 59,669' 59,732' 59,594' 59,303 59,750 60,634 60,293 27 Non-U.S. addressees 660 664 655 632 646 643 654 653 656 28 Real estate loans 24,550 24,443 24,583 24,732 24,781' 24,719 24,989 25,162 25,328 29 To individuals for personal expenditures 16,079 16,058 15,985 16,042 16,026 16,057 16,053 16,084 16,125 30 To depository and financial institutions 11,604' 12,311' 11.50C 12,738' 12.45C 12,200 11,896 11,946 11,550 31 Commercial banks in the United States 1,978 2,474 2,111 2,788 2,403' 2,346 2,510 2,588 2,167 32 Banks in foreign countries 2,108 2,489 2,062 2,295 2,297' 2,137 1,894 1,896 1,956 33 Nonbank depository and other financial institutions 7,518' 7,348' 7,327' 7,655' 7,750' 7,717 7,492 7,462 7,427 34 For purchasing and carrying securities 6.958 6,095 6,284 6,372 6,446 6,473 6,388 7,537 7,014 35 To finance agricultural production 390 380 380 387 386 389 383 418 410 36 To states and political subdivisions 8,223 8,093 8,052 7,926 7,732' 7,897 7,884 7,840 7,910 37 To foreign governments and official institutions 823 791 819 799 917' 811 1,045 794 769 38 All other 3,678' 3,759' 3,438' 3,417' 3,629' 3,853 3,587 3,350 3,429 39 Lease financing receivables 2,087 2,088 2,034 2,056 2,064 2,144 2,286 2,277 2,267 40 LESS: Unearned income 1,489' 1,485' 1,488' 1,472' 1,472' 1,478 1,500 1,472 1,490 41 Loan and lease reserve 3,284' 3,296' 3,306' 3,351' 3,344' 3,363 3,374 3,424 3,450 42 Other loans and leases, net 131,851' 130,446' 129,286' 131,002' 130,976' 130,655 131,010 132,871 131,713 43 All other assets4 68,486' 68,723' 67,383' 68,259' 68,871' 70,046 70,073 70,962 67,673 44 Total assets 268,220' 260,898' 259,868' 260,600' 266,899' 271,232 267,443 267,748 268,719 Deposits 45 Demand deposits 50,482 49,050' 48,92C 46,257' 50,468' 49,593 47,565 45,784 44,703 46 Individuals, partnerships, and corporations 34,828 33,580' 32,554' 31,29c 34,964' 34,137 32,122 31,334 31,476 47 States and political subdivisions 1,032 832 838 1,014 815 834 733 785 687 48 U.S. government 731 318 684 389 378 237 637 321 166 49 Depository institutions in the United States 4,941 4,841 4,690 4,330 4,813' 5,033 5,077 4,647 4,197 50 Banks in foreign countries 4,413 5,056 4,672 4,383' 4,556' 4,764 4,235 3,976 3,829 51 Foreign governments and official institutions 574 617 804 953 726' 631 576 551 485 52 Certified and officers' checks 3,962 3,805 4,676 3,898 4,216 3,957 4,184 4,169 3,862 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 3,967 3,752 3,748 3,872 3,854 3,787 3,756 3,888 3,830 54 Nontransaction balances 85,239' 84,967' 84,767' 84,413' 84,011' 84,471 85,226 85,200 84,581 55 Individuals, partnerships and corporations 77,265' 77,020' 76,771' 76,50c 75,959' 76,312 76,761 77,145 76,478 56 States and political subdivisions 3,792 3,800 3,820 3,802 3,905 3,979 4,084 4,008 4,037 57 U.S. government 59 63 77 84 83 81 70 70 69 58 Depository institutions in the United States 2,420' 2,435' 2,480' 2,494' 2,445' 2,504 2,678 2,488 2,537 59 Foreign governments, official institutions and banks 1,702' 1,649' 1,619' 1,532' 1,620' 1,596 1,632 1,489 1,460 60 Liabilities for borrowed money 63,420' 60,705' 59,718' 63,74C 64,418' 67,959 65,645 67,925 68,606 61 500 425 2 776 62 Treasury tax-and-loan notes 2,658 3,538 3,711 1,686 2,298 2,497 2,894 875 524 63 All other liabilities for borrowed money5 60,762' 57,167' 56,007' 62,054' 61,62C 65,462 62,326 67,050 65,306 64 Other liabilities and subordinated note and debentures 41,897' 39,304' 39,549' 38,855' 40,669' 41,997 41,943 41,321 43,442 65 Total liabilities 245,006' 237,778' 236,703' 237,137' 243,421' 247,807 244,135 244,120 245,163 66 Residual (total assets minus total liabilities)6 23,214 23,120 23,165 23,463 23,478 23,425 23,308 23,628 23,556 MEMO 67 Total loans and leases (gross) and investments adjusted1'7 163,422' 160,429' 159,22C 162,418' 161,28C 163,369 164,360 166,211 165,874 68 Total loans and leases (gross) adjusted7 143,79C 140,812' 139,741' 141,49C 141,126' 141,021 141,546 143,481 143,285 69 Time deposits in amounts of $100,000 or more 34,672 34,301 33,760 33,293 33,139 33,367 33,520 33,612 33,420 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 1985 AAccccoouunntt Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 March 6 March 13 1 Cash and due from depository institutions. 6,652 6,455 6,949 6,424' 7,422 6,372 6,445' 6,583 6,484 2 Total loans and securities 43,407 44,018 44,208 43,752 45,040 45,143 46,259 45,386 44,208 3 U.S. Treasury and govt, agency securities 4,093 3,966 4,070 4,195 4,022 4,040 4,050 3,610 3,445 4 Other securities 1,356 1,350 1,367 1,390 1,390 1,380 1,404 1,553 1,471 5 Federal funds sold1 3,326 3,844 4,487 3,353 5,070 4,397 5,390 4,788 4,564 6 To commercial banks in the United States 3,018 3,530 4,074 2,958 4,629 3,993 4,987 4,382 4,118 7 Toothers 308 314 413 395 442 404 403 406 446 8 Other loans, gross 34,631 34,858 34,284 34,814 34,558 35,326 35,415 35,435 34,727 9 Commercial and industrial 19,790 20,202 20,033 20,365' 20,248 20,470 20,412 20,068 19,940 10 Bankers acceptances and commercial paper 1,36CK 1,489' 1,509' 1,766 1,733 1,900 1,759 1,794 1,843 11 All other 18,43C 18,713' 18,524' 18,60c 18,515 18,569 18,652 18,274 18,096 12 U.S. addressees 17,235' 17,561' HAW 17,477' 17,369 17,434 17,456 16,962 16,861 13 Non-U.S. addressees 1,195 1,152 1,114 1,122 1,146 1,135 1,196 1,311 1,236 14 To financial institutions 10,779 10,837 10,427 10,524 10,484 10,968 11,158 11,405 11,013 15 Commercial banks in the United States. 8,460 8,634 8,296 8,106 8,233 8,722 8,914 9,142 8,855 16 Banks in foreign countries 1,422 1,327 1,310 1,328 1,432 1,344 1,322 1,243 1,262 17 Nonbank financial institutions 897 876 822 1,090 819 902 923 1,021 896 18 To foreign govts, and official institutions .. 694 667 688 670 666 650 702 654 653 19 For purchasing and carrying securities .. 1,193 968 914 1,118 1,001 1,015 978 1,142 960 20 All other 2,175 2,184 2,222 2,137' 2,158 2,223 2,165 2,167 2,161 21 Other assets (claims on nonrelated parties).. 18,888 18,837 18,787 18,850 19,020 18,786 19,355 19,233 19,119 22 Net due from related institutions 11,473 10,562 10,292 11,016 10,646 11,112 11,130 11,004 9,871 23 Total assets 80,420 79,873 80,236 80,042' 82,128 81,413 83,189 82,206 79,681 24 Deposits or credit balances due to other than directly related institutions.... 24,045 23,924 24,036' 23,921' 24,315 24,103 24,973 25,221 25,024 25 Credit balances 137 136 118 129 193 140 232 146 130 26 Demand deposits 1,651 1,492 1,580 1,628' 1,892 1,680 1,627 1,779 1,644 27 Individuals, partnerships, and corporations 837 749 799 880' 821 916 850 888 822 28 Other 815 743 780 748 1,072 764 777 890 822 29 Time and savings deposits 22,257 22,296 22,338' 22,164' 22,229 22,283 23,115 23,297 23,249 30 Individuals, partnerships, and corporations 18,128 18,142 18,208 18,125' 18,105 18,111 18,701 18,893 18,949 31 Other 4,129 4,154 4,129' 4,039 4,124 4,172 4,414 4,404 4,300 32 Borrowings from other than directly related institutions 29,672 28,270 27,765' 29,146 30,499 29,653 28,874 28,427 27,122 33 Federal funds purchased2 12,113 11,538 11,419' 12,361 12,675 12,017 10,742 10,542 9,851 34 From commercial banks in the United States 9,927 8,828 8,926 9,549 9,940 9,365 8,3% 7,964 7,516 35 From others 2,187 2,709 2,494' 2,812 2,735 2,652 2,346 2,578 2,335 36 Other liabilities for borrowed money 17,559 16,732 16,345 16,786 17,824 17,636 18,132 17,885 17,270 37 To commercial banks in the United States 16,002 15,190 14,955 15,452 16,407 16,216 16,687 16,434 15,920 38 To others 1,556 1,543 1,390 1,334 1,417 1,420 1,445 1,451 1,351 39 Other liabilities to nonrelated parties 20,242 20,343 20,335 20,311 20,329 20,332 20,875 20,899 20,866 40 Net due to related institutions 6,459 7,336 8,101 6,663' 6,984 7,325 8,466 7,659 6,669 41 Total liabilities 80,420 79,873 80,236 80,042' 82,128 81,413 83,189 82,206 79,681 MEMO 42 Total loans (gross) and securities adjusted3 31,929 31,854 31,838 32,688 32,179 32,428 32,358 31,862 31,234 43 Total loans (gross) adjusted3 26,479 26,537 26,401 27,102 26,767 27,008 26,904 26,700 26,318 • 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

A22 Domestic NonfinancialS tatistics • May 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.. Sept. Dec. Mar. June Sept/ Dec. 1 All holders—Individuals, partnerships, and corporations 302.3 315.5 288.9 291.8 280.3 293.5 279.3 285.8 284.7 304.5 2 Financial business 27.1 29.8 28.0 35.4 32.1 32.8 31.7 31.7 31.3 33.0 3 Nonfinancial business 157.7 162.8 154.8 150.5 150.2 161.1 150.3 154.9 154.8 166.3 4 Consumer 99.2 102.4 86.6 85.9 77.9 78.5 78.1 78.3 78.4 81.7 5 Foreign 3.1 3.3 2.9 3.0 2.9 3.3 3.3 3.4 3.3 3.6 6 Other 15.1 17.2 16.7 17.0 17.1 17.8 15.9 17.4 16.8 19.9 Weekly reporting banks 1983 1984 1199779933 11998800 11998811 11998822 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Sept. Dec.4 Mar. June Sept. Dec. 7 AU holders—Individuals, partnerships, and corporations 139.3 147.4 137.5 144.2 136.3 146.2 139.2 145.3 145.3 157.1 8 Financial business 20.1 21.8 21.0 26.7 23.6 24.2 23.5 23.6 23.7 25.3 9 Nonfinancial business 74.1 78.3 75.2 74.3 72.9 79.8 76.4 79.7 79.2 87.1 10 Consumer 34.3 35.6 30.4 31.9 28.1 29.7 28.4 29.9 29.8 30.5 11 Foreign 3.0 3.1 2.8 2.9 2.8 3.1 3.2 3.2 3.2 3.4 12 Other 7.8 8.6 8.0 8.4 8.9 9.3 7.7 8.9 9.3 10.9 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 1985 IInnssttrruummeenntt 1 D 9 e 7 c 9 . 1 D 19 e 8 c 0 . D 19 e 8 c 1 . D 1 e 9 c 8 . 2 2 D 19 e 8 c 3 . Aug. Sept. Oct. Nov. Dec. Jan. Commercial paper (seasonally adjusted unless noted otherwise) I All issuers 112,803 124,374 165,829 166,436' 188,312' 221,174' 225,127' 228,194' 235,363' 239,117' 245,322 Financial companies4 Dealer-placed paper5 2 Total 17,359 19,599 30,333 34,605' 44,622' 50,900' 52,543' 54,527' 55,176' 56,917' 59,713 3 Bank-related (not seasonally adjusted) 2,784 3,561 6,045 2,516 2,441 2,010 1,959 2,060 1,996 2,035 2,137 Directly placed paper6 4 Total 64,757 67,854 81,660 84,393' 96,918' 108,63C 107,537' 105,379' 109,419' 110,474' 113,101 5 Bank-related (not seasonally adjusted) 17,598 22,382 26,914 32,034 35,566 43,665 41,066 38,112 40,185 42,105 43,046 6 Nonfinancial companies7 30,687 36,921 53,836 47,437' 46,772' 61,644 65,047' 68,288' 70,768' 71,726' 72,508 Bankers dollar acceptances (not seasonally adjusted)8 7 Total 45,321 54,744 69,226 79,543 78,309 79,779 77,928 75,740 75,179 75,470 72,532 Holder 8 Accepting banks 9,865 10,564 10,857 10,910 9,355 10,743 11,065 10,534 10,397 10,256 9,991 9 Own bills 8,327 8,963 9,743 9,471 8,125 8,823 8,729 8,960 9,113 9,065 8,818 10 Bills bought 1,538 1,601 1,115 1,439 1,230 1,920 2,336 1,574 1,284 1,191 1,173 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 1,442 949 729 632 686 658 615 671 679 13 Others 33,370 41,614 56,731 66,204 68,225 68,404 66,177 64,548 64,781 64,167 61,862 Basis 14 Imports into United States 10,270 11,776 14,765 17,683 15,649 17,647 17,196 16,256 16,433 16,975 16,757 15 Exports from United States 9,640 12,712 15,400 16,328 16,880 15,871 15,985 16,312 15,849 15,859 15,477 16 All other 25,411 30,257 39,060 45,531 45,781 46,260 44,746 43,172 42,897 42,635 40,297 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 10.50 Oct. 17.. 12.50 Feb 10.98 Apr 11.00 29.. 12.00 10.50 Nov. 9.. 11.75 Apr 10.50 11.50 28.. 11.25 May 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

A24 Domestic NonfinancialS tatistics • May 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 Nov. Dec. Jan. Feb. Feb. I Feb. 8 Feb. 15 Feb. 22 Mar. 1 MONEY MARKET RATES 1 Federal funds1-2 12.26 9.09 10.23 9.43 8.38 8.35 8.50 8.45 8.59 8.44 8.57 8.40 2 Discount window borrowing 11.02 8.50 8.80 8.83 8.37 8.00 8.00 8.00 8.00 8.00 88..0000 88..0000 Commercial paper4-5 i 1-month 11.83 8.87 10.05 9.01 8.39 7.99 8.46 8.14 8.40 8.46 8.50 8.55 4 3-month 11.89 8.88 10.10 9.03 8.44 8.03 8.54 8.14 8.41 8.51 8.59 8.75 5 6-month 11.89 8.89 10.16 9.06 8.55 8.15 8.69 8.22 8.48 8.63 8.74 99..0055 Finance paper, directly placed4-5 6 1-month 11.64 8.80 9.97 8.92 8.25 7.95 8.42 8.12 8.36 8.43 8.42 8.54 7 3-month 11.23 8.70 9.73 8.83 8.12 7.81 8.25 7.86 8.09 8.28 8.28 8.48 8 6-month 11.20 8.69 9.65 8.82 8.09 7.82 8.20 7.86 8.05 8.18 8.28 8.41 Bankers acceptances5-6 9 3-month 11.89 8.90 10.14 9.00 8.45 8.01 8.55 8.11 8.39 8.48 8.66 8.80 10 6-month 11.83 8.91 10.19 9.02 8.54 8.11 8.69 8.18 8.43 8.60 88..7799 99..1133 Certificates of deposit, secondary market7 11 1-month 12.04 8.96 10.17 9.09 8.47 8.05 8.50 8.15 8.43 8.47 8.54 8.62 12 3-month 12.27 9.07 10.37 9.18 8.60 8.14 8.69 8.23 8.56 8.64 8.77 8.91 1J 6-month 12.57 9.27 10.68 9.39 8.85 8.45 9.04 8.49 8.78 8.95 9.16 9.47 14 Eurodollar deposits, 3-month8 13.12 9.56 10.73 9.50 8.90 8.37 9.05 8.49 8.91 8.99 99..0099 99..3355 U.S. Treasury bills5 Secondary market9 15 3-month 10.61 8.61 9.52 8.61 8.06 7.76 8.27 7.92 8.17 8.21 8.31 8.47 16 6-month 11.07 8.73 9.76 8.81 8.28 8.00 8.39 8.09 8.28 8.29 8.42 8.70 17 1-year 11.07 8.80 9.92 9.01 8.60 8.33 8.56 8.35 8.47 8.47 8.58 8.84 Auction average10 18 3-month 10.686 8.63 9.58 8.79 8.16 7.76 8.22 7.76 8.16 8.20 8.15 8.36 19 6-month 11.084 8.75 9.80 8.99 8.36 8.03 8.34 7.97 8.30 8.28 8.25 8.53 ?0 1-year 1111..009999 8.86 99..9911 99..1100 88..3388 88..3399 88..4466 88..4466 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 12.27 9.57 10.89 9.82 9.33 9.02 9.29 9.03 9.18 9.19 9.30 9.61 22 2-year 12.80 10.21 11.65 10.65 10.18 9.93 10.17 9.86 10.03 10.02 10.19 10.53 n 10 05 10 25 24 3-year 12.92 10.45 11.89 10.90 10.56 10.43 10.55 10.34 10.42 10.40 10.56 10.91 25 5-year 13.01 10.80 12.24 11.33 11.07 10.93 11.13 10.76 10.99 11.00 11.17 11.47 26 7-year 13.06 11.02 12.40 11.49 11.45 11.27 11.44 11.04 11.28 11.30 11.50 11.78 27 10-year 13.00 11.10 12.44 11.57 11.50 11.38 11.51 11.15 11.37 11.37 11.57 11.83 28 20-year 12.92 11.34 12.48 11.66 11.64 11.58 11.70 11.31 11.50 11.58 11.81 12.06 29 30-year 12.76 11.18 12.39 11.56 11.52 11.45 11.47 11.21 1111..3311 1111..3322 1111..5544 1111..8800 Composite14 30 Over 10 years (long-term) 12.23 10.84 11.99 11.25 11.21 11.15 11.35 10.92 11.09 11.19 11.51 11.77 State and local notes and bonds Moody's series15 31 Aaa 10.88 8.80 9.6! 9.78 9.54 9.08 8.98 8.80 8.85 8.90 9.10 9.05 32 Baa 12.48 10.17 10.38 10.47 10.45 10.16 10.05 9.90 9.95 10.00 10.15 10.10 33 Bond Buyer series16 11.66 9.51 10.10 10.17 9.95 9.51 9.65 9.37 9.52 9.64 9.71 99..7711 Corporate bonds Seasoned issues17 34 All industries 14.94 12.78 13.49 12.88 12.74 12.64 12.66 12.47 12.54 12.57 12.71 12.93 35 Aaa 13.79 12.04 12.71 12.29 12.13 12.08 12.13 11.85 11.95 12.01 12.21 12.47 36 Aa 14.41 12.42 13.31 12.66 12.50 12.43 12.49 12.29 12.37 12.43 12.55 12.69 37 A 15.43 13.10 13.74 13.09 12.92 12.80 12.80 12.59 12.69 12.72 12.84 13.06 38 Baa 16.11 13.55 14.19 13.48 13.40 13.26 13.23 13.13 13.14 13.13 13.21 13.51 39 A-rated, recently-offered utility bonds18 15.49 12.73 13.81 12.98 12.88 12.78 12.76 12.59 12.68 12.60 12.95 13.18 MEMO: Dividend/price ratio19 40 Preferred stocks 12.53 11.02 11.59 11.36 11.21 11.13 10.88 10.99 10.97 10.83 10.77 10.94 41 Common stocks 5.81 4.40 4.64 4.61 4.68 4.51 4.30 4.31 4.31 4.25 4.30 4.32 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 of ten 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 A25 1.36 STOCK MARKET Selected Statistics 1984 1985 IInnddiiccaattoorr 11998822 11998833 11998844 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. 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 88.28 87.08 94.49 95.68 95.09 95.85 94.85 99.11 104.73 2 Industrial 78.18 107.45 108.01 104.04 102.29 111.20 112.18 110.44 110.91 109.05 113.99 120.71 3 Transportation 60.41 89.36 85.63 79.29 76.72 86.86 86.88 86.82 87.37 88.00 94.88 101.76 4 Utility 39.75 47.00 46.44 43.65 44.17 46.69 47.47 49.02 49.93 50.58 51.95 53.44 5 Finance 71.99 95.34 89.28 80.75 79.03 87.92 91.59 92.94 95.28 95.29 101.34' 109.58 6 Standard & Poor's Corporation (1941-43 = 10)' ... 119.71 160.41 160.50 153.12 151.08 164.42 166.11 164.82 166.27 164.48 171.61 180.88 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 141.31 216.48 207.96 201.24 192.82 207.90 214.50 210.39 209.47 202.28 211.82 228.40 Volume of trading (thousands of shares) 8 New York Stock Exchange 64,617 85,418 91,084 85,920 79,156 109,892 93,108 91,676 83,692 89,032 121,545 115,489 9 American Stock Exchange 5,283 8,215 6,107 5,071 5,141 7,477 5,967 5,587 6,008 7,254 9,130 10,010 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 13,325 23,000 22,470 23,450 22,980 22,810 22,t800 22,t330 22,350 22t,47 0 t t t t t 11 Margin stock 12,980 22,720 12 Convertible bonds 344 279 13 Subscription issues 1 Free credit balances at brokers4 14 Margin-account 5,735 6,620 7,015 6,430 6,430 6,855 6,690 6,580 6,699 7,015 15 Cash-account 8,390 8,430 10,215 8,305 8,125 8,185 8,315 8,650 8,420 10,215 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 50.0 52.0 40.0 42.0 44.0 47.0 46.0 35.0 36.0 18 40-49 24.0 22.0 18.0 19.0 17.0 22.0 22.0 21.0 19.0 18.0 19.0 20.0 19 50-59 24.0 16.0 16.0 12.0 12.0 16.0 15.0 14.0 13.0 16.0 20.0 18.0 20 60-69 14.0 9.0 9.0 8.0 8.0 9.0 9.0 9.0 9.0 9.0 11.0 11.0 21 70-79 9.0 6.0 5.0 6.0 5.0 6.0 6.0 6.0 6.0 5.0 7.0 8.0 22 80 or more 8.0 6.0 6.0 5.0 6.0 7.0 6.0 6.0 6.0 6.0 8.0 8.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 35,598 58,329 75,840 69,410 70,588 71,840 72,350 71,914 73,904 75,840 79,600 81,830 Distribution by equity status (percent) 24 Net credit status 62.0 63.0 59.0 56.0 57.0 58.0 58.0 59.0 59.0 59.0 59.0 59.0 Debt status, equity of 25 60 percent or more 29.0 28.0 29.0 30.0 30.0 31.0 31.0 30.0 29.0 29.0 30.0 31.0 26 Less than 60 percent 9.0 9.0 11.0 14.0 13.0 11.0 11.0 11.0 12.0 11.0 10.0 10.0 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 total that is distributed by equity class and shown on Margin requirements are the difference between the market value (100 percent) lines 17-22. and the maximum loan value. The term "margin stocks" is defined in the 4. Free credit balances are in accounts with no unfulfilled commitments to the corresponding regulation. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • May 1985 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1984 1985 AAccccoouunntt 11998822 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan Savings and loan associations 1 Assets 707,646 773,417 797,849 808,264 825,557 840,682 850,780 860,088 877,642 881,627 887,696 902,449 898,643 2 Mortgages 483,614 494,789 503,509 510,670 519,628 528,172 535,814 540,644 550,129 552,516 556,229 555,277 558,241 3 Cash and investment securities1 85,438 104,274 109,477 106,863 110,033 109,752 108,456 108,820 112,350 112,023 114,879 125,358 119,309 4 Other 138,594 174,354 184,863 190,731 195,896 202,758 206,510 210,624 215,163 217,088 216,588 221,814 221,093 5 Liabilities and net worth 707,646 773,417 797,849 808,264 825,557 840,682 850,780 860,088 877,642 881,627 887,696 902,449 898,643 6 Savings capital 567,961 634,455 656,650 660,663 670,666 681,947 687,817 691,704 704,558 708,846 714,780 724,301 730,699 7 Borrowed money 97,850 92,127 94,113 98,275 103,119 108,417 110,238 114,747 121,329 119,305 117,775 126,169 114,850 8 FHLBB 63,861 52,626 50,663 51,951 53,485 56,558 57,115 60,178 63,627 63,412 63,383 64,207 63,152 9 Other 33,989 39,501 43,450 46,324 49,634 51,859 53,123 54,569 57,702 55,893 54,392 61,962 51,698 10 Loans in process2 9,934 21,117 22,969 23,938 24,761 25,726 26,122 26,773 27,141 26,754 26,683 26,959 26,540 11 Other 15,602 15,968 15,548 17,524 19,832 17,586 19,970 20,599 18,050 19,894 21,302 17,215 18,431 12 Net worth3 26,233 30,867 31,538 31,802 31,940 32,732 32,755 33,038 33,705 33,582 33,839 34,764 34,663 13 MEMO: Mortgage loan commitments outstanding4 18,054 32,996 39,867 41,732 45,274 44,878 43,878 41,182 40,089 38,530 37,856 34,841 33,324 Mutual savings banks5 14 Assets 174,197 193,535 197,178 198,000 200,087 198,864 199,128 200,722 201,445 203,274 204,455 203,828 204,835 Loans 15 Mortgage 94,091 97,356 98,472 99,017 99,881 99,433 100,091 101,211 101,621 102,704 102,953 102,872 103,394 16 Other 16,957 19,129 21,971 22,531 22,907 23,198 23,213 24,068 24,535 24,486 24,930 24,956 25,747 Securities 17 U.S. government6 9,743 15,360 15,772 15,913 16,404 15,448 15,457 15,019 14,965 15,295 14,925 14,633 14,616 18 State and local government 2,470 2,177 2,067 2,033 2,024 2,037 2,037 2,055 2,052 2,080 2,077 2,077 2,054 19 Corporate and other7 36,161 43,580 43,547 43,122 43,200 42,479 42,682 42,632 42,605 43,003 43,366 42,936 43,349 20 Cash 6,919 6,263 5,040 5,008 5,031 5,452 4,8% 4,981 4,795 4,605 4,805 4,945 4,141 21 Other assets 7,855 9,670 10,309 10,376 10,640 10,817 10,752 10,756 10,872 11,101 11,399 11,409 11,534 22 Liabilities 174,197 193,535 197,178 198,000 200,087 198,864 199,128 200,722 201,445 203,274 204,455 203,828 204,835 23 Deposits 155,196 172,665 176,044 175,875 176,253 174,972 174,823 176,085 177,345 178,624 180,142 180,559 181,013 152,777 170,135 173,385 173,010 173,310 171,858 171,740 172,990 174,296 175,727 177,196 177,362 177,904 25 Ordinary savings 46,862 38,554 37,866 37,329 37,147 36,322 35,511 34,787 34,564 34,221 34,008 33,732 33,420 26 Time 96,369 95,129 97,339 96,920 97,236 97,168 98,410 101,270 102,934 104,151 104,913 104,689 104,067 27 Other 2,419 2,530 2,659 2,865 2,943 3,114 3,083 3,095 3,049 2,897 2,946 3,197 3,109 28 Other liabilities 8,336 10,154 10,390 11,211 12,861 12,999 13,269 13,604 12,979 13,853 13,367 12,501 12,962 29 General reserve accounts 9,235 10,368 10,373 10,466 10,554 10,404 10,495 10,498 10,488 10,459 10,508 10,500 10,613 30 MEMO: Mortgage loan commitments outstanding9 1,285 2,387 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n a. Life insurance companies 31 Assets 588,163 654,948 665,836 671,259 673,518 679,449 684,573 694,082 699,996 705,827 712,271 720,807 Securities 36,499 50,752 52,504 52,828 53,422 53,970 54,688 56,263 57,552 59,825 62,678 64,683 33 United States10 16,529 28,636 31,056 31,358 31,706 32,066 32,654 33,886 35,586 37,594 40,288 41,970 34 State and local 8,664 9,986 9,259 9,192 9,239 9,213 9,236 9,357 9,221 9,344 9,385 9,757 11,306 12,130 12,189 12,278 12,477 12,691 12,798 13,020 12,745 12,887 13,005 12,956 287,126 322,854 331,631 334,634 334,151 338,508 341,802 348,614 350,512 352,059 354,815 354,902 n .a. 37 Bonds 231,406 257,986 268,446 271,296 273,212 276,902 281,113 283,673 285,543 287,607 291,021 290,731 38 Stocks 55,720 64,868 63,185 63,338 60,939 61,606 60,689 64,941 64,969 64,452 63,794 64,171 141,989 150,999 151,445 152,373 152,968 153,845 154,299 155,438 155,802 156,064 156,691 157,283 40 Real estate 20,264 22,234 23,034 23,237 23,517 23,792 24,019 24,117 24,685 24,947 25,467 25,985 52,961 54,063 54,254 54,365 54,399 54,430 54,441 54,517 54,551 54,574 54,571 54,610 42 Other assets 48,571 54,046 52,968 53,822 55,061 54,904 55,324 55,133 56,894 58,358 58,049 63,344 Credit unions12 43 Total assets/liabilities and capital 69,585 81,961 85,789 86,594 88,350 90,276 90,145 90,503 91,651 91,619 92,521 93,036 94,646 45,493 54,482 57,569 58,127 59,636 61,316 61,163 61,500 62,107 61,935 62,690 63,205 64,505 45 State 24,092 27,479 28,220 28,467 28,714 28,960 28,982 29,003 29,544 29,684 29,831 29,831 30,141 43,232 50,083 52,269 53,247 54,437 55,915 57,286 58,802 59,874 60,483 62,170 62,561 62,662 27,948 32,930 34,510 35,286 36,274 37,547 38,490 39,578 40,310 40,727 41,762 42,337 42,220 48 State 15,284 17,153 17,759 17,961 18,163 18,368 18,796 19,224 19,564 19,756 20,408 20,224 20,442 62,990 74,739 78,487 79,413 80,702 82,578 82,402 82,135 83,172 83,129 84,000 84,348 86,047 50 Federal (shares) 41,352 49,889 52,905 53,587 54,632 56,261 56,278 56,205 56,734 56,655 57,302 57,539 58,820 51 State (shares and deposits) 21,638 24,850 25,582 25,826 26,070 26,317 26,124 25,930 26,438 26,474 26,698 26,809 27,227 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37 Continued 1984 1985 AAccccoouunntt 11998822 11998833 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. FSLIC-insured federal savings banks 52 Assets 6,859 64,969 75,555 77,374 78,952 81,310 83,989 87,209 82,174 87,743 94,536 98,559 98,747 53 Mortgages 3,353 38,698 44,708 45,900 46,791 48,084 49,996 52,039 48,841 51,554 55,861 57,429 57,667 54 Cash and investment securities' 10,436 12,552 12,762 12,814 13,071 13,184 13,331 12,867 13,615 14,826 16,001 15,378 55 Other 15,835 18,295 18,712 19,347 20,155 20,809 21,839 20,466 22,574 23,849 25,129 25,702 56 Liabilities and net worth 6,859 64,969 75,555 77,374 78,952 81,310 83,989 87,209 82,174 87,743 94,536 98,559 98,747 57 Savings and capital 5,877 53,227 61,433 62,495 63,026 64,364 66,227 68,443 65,079 70,080 76,167 79,572 80,091 58 Borrowed money 7,477 9,213 9,707 10,475 11,489 12,060 12,863 11,828 11,935 11,937 12,798 12,372 59 FHLBB 4,640 5,232 5,491 5,900 6,538 6,897 7,654 6,600 6,867 7,041 7,515 7,361 60 Other 2,837 3,981 4,216 4,575 4,951 5,163 5,209 5,228 5,068 4,896 5,283 5,011 61 Other 1,157 1,360 1,548 1,747 1,646 1,807 1,912 1,610 1,896 2,259 1,903 1,982 62 Net worth3 3,108 3,549 3,624 3,704 3,811 3,895 3,991 3,657 3,832 4,173 4,286 4,302 MEMO 63 Loans in process2 1,264 1,669 1,716 1,787 1,839 1,901 1,895 1,505 1,457 1,689 1,738 1,685 64 Mortgage loan commitments outstanding4 2,151 3,253 3,714 3,763 3,583 3,988 3,860 2,970 2,925 3,298 3,234 3,510 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

A28 Domestic NonfinancialS tatistics • May 1985 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1983 1984 1984 1985 111999888222 111999888333 111999888444 HI H2 HI Dec. Jan. Feb. U.S. budget 1 Receipts' 617,766 600,562 666,457 306,331 306,584 341,808 62,404 70,454 54,021 2 Outlays' 728,375 795,917 841,800 396,477 406,849 420,700 77,583 76,838 74,851 3 Surplus, or deficit (-) -110,609 -195,355 -175,343 -90,146 -100,265 -78,892 -15,179 -6,384 -20,830 4 Trust funds 5,456 23,056 30,565 22,680 7,745 18,080 8,426 -188 2,313 5 Federal funds2 3 -116,065 -218,410 -205,908 -112,822 -108,005 -96,971 -23,606 -6,198 -23,140 Off-budget entities (surplus, or deficit (-)) Federal Financing Bank outlays -14,142 -10,404 -7,277 -5,418 -3,199 -2,813 142 -840 0 7 Other3-4 -3,190 -1,953 -2,719 -528 -1,206 -838 475 -789 -421 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 -14,563 -8,013 -21,251 Source of financing 9 Borrowing from the public 134,993 212,425 170,817 102,538 84,020 80,592 24,055 12,675 15,994 10 Cash and monetary assets (decrease, or increase (-))4 -11,911 -9,889 5,636 -9,664 -16,294 -3,127 -10,490 -7,969 9,094 11 Other5 4,858 5,176 8,885 3,222 4,358 7,418 998 3,307 4,033 MEMO 12 Treasury operating balance (level, end of period) 29,164 37,057 37,057 27,997' 11,817' 13,567' 17,649 26,502 17,160 13 Federal Reserve Banks 10,975 16,557 16,557 19,442 3,661' 4,397' 5,316 5,349 3,308 14 Tax and loan accounts 18,189 20,500 20,500 8,764' 8,157' 9,170' 12,333 21,153 13,852 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 rear 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 Dec. Jan. Feb. RECEIPTS 1 AU sources 600,563 666,457 286,337 306,331 305,122 341,808 62,404 70,454 54,021 2 Individual income taxes, net 288,938 295,955 145,676 144,551 147,663 144,691 27,054 37,852 23,769 3 Withheld 266,010 279,345 131,567 135,531 133,768 140,657 25,979 24,778 23,127 4 Presidential Election Campaign Fund ... 36 35 5 30 6 29 0 0 1 5 Nonwithheld 83,586 81,346 20,041 63,014 20,703 61,463 2,003 12,642 1,683 6 Refunds 60,692 64,771 5,938 54,024 6,815 57,458 929 -433 1,041 Corporation income taxes 7 Gross receipts 61,780 74,179 25,660 33,522 31,064 40,328 12,351 44,,337733 22,,667733 8 Refunds 24,758 17,286 11,467 13,809 8,921 10,045 820 1,594 919 9 Social insurance taxes and contributions, net 209,001 241,902 94,277 110,520 100,832 131,372 18,127 23,394 23,080 10 Payroll employment taxes and contributions1 179,010 203,476 85,064 90,912 88,388 106,436 17,328 21,661 19,433 11 Self-employment taxes and contributions2 6,756 8,709 177 6,427 398 7,667 0 602 664 12 Unemployment insurance 18,799 25,138 6,856 10,984 8,714 14,942 397 1,328 2,615 13 Other net receipts3 4,436 4,580 2,180 2,197 2,290 2,329 403 406 362 14 Excise taxes 35,300 37,361 16,555 16,904 19,586 18,304 2,907 3,267 2,585 15 Customs deposits 8,655 11,370 4,299 4,010 5,079 5,576 922 1,085 842 16 Estate and gift taxes 6,053 6,010 3,444 2,883 3,050 3,102 469 605 504 17 Miscellaneous receipts4 15,594 16,965 7,890 7,751 7,811 8,481 1,395 1,471 1,488 OUTLAYS 18 All types 795,917 841,800 390,847 396,477 406,849 420,700 77,583 76,838 74,851 19 National defense 210,461 227,405 100,419 105,072 108,967 114,639 20,156 19,367 19,785 20 International affairs 8,927 13,313 4,406 4,705 6,117 5,426 1,297 1,254 884 21 General science, space, and technology ... 7,777 8,271 3,903 3,486 4,216 3,981 692 654 715 22 Energy 4,035 2,464 2,058 2,073 1,533 1,080 278 369 215 23 Natural resources and environment 12,676 12,677 6,941 5,892 6,933 5,463 1,253 1,082 786 24 Agriculture 22,173 12,215 13,259 10,154 5,278 7,129 2,881 3,372 2,054 25 Commerce and housing credit 4,721 5,198 2,244 2,164 2,648 2,572 1,043 -737 -805 26 Transportation 21,231 24,705 10,686 9,918 13,323 10,616 2,055 2,053 1,505 27 Community and regional development .... 7,302 7,803 4,187 3,124 4,327 3,154 627 589 438 28 Education, training, employment, social services 25,726 26,616 12,186 12,801 13,246 13,445 2,089 2,547 22,,662288 29 Health 28,655) 30,435 39,072 41,206 42,150 15,748 2,677 2,822 2,778 30 Social security and medicare 223,311> 235,764 133,779 143,001 20,640 20,930 20,583 31 Income security 106,21 lj 96,714 135,579 65,212 10,704 11,600 10,220 32 Veterans benefits and services 24,845 25,640 13,240 11,334 13,621 12,849 2,393 928 2,218 33 Administration of justice 5,014 5,616 2,373 2,522 2,628 2,807 491 585 453 34 General government 4,991 4,836 2,323 2,434 2,479 2,462 569 244 699 35 General-purpose fiscal assistance 6,287 6,577 3,153 3,124 3,290 2,943 21 1,250 116 36 Net interest" 89,774 111,007 44,948 42,358 47,674 53,729 10,085 10,440 11,820 37 Undistributed offsetting receipts7 -21,424 -15,454 -8,332 -8,887 -7,262 -7,333 -2,368 -2,513 -2,238 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

A30 Domestic NonfinancialS tatistics • May 1985 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1982 1983 1984 IItteemm Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 1,201.9 1,249.3 1,324.3 1,381.9 1,415.3 1,468.3 1,517.2 1,576.7 1,667.4 2 Public debt securities 1,197.1 1,244.5 1,319.6 1,377.2 1,410.7 1,463.7 1,512.7 1,572.3 1,663.0 3 Held by public 987.7 1,043.3 1,090.3 1,138.2 1,174.4 1,223.9 1,255.1 1,309.2 1,373.4 4 Held by agencies 209.4 201.2 229.3 239.0 236.3 239.8 257.6 264.1 289.6 5 Agency securities 4.8 4.8 4.7 4.7 4.6 4.6 4.5 4.5 4.5 6 Held by public 3.7 3.7 3.6 3.6 3.5 3.5 3.4 3.4 3.4 7 Held by agencies 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 8 Debt subject to statutory limit 1,197.9 1,245.3 1,320.4 1,378.0 1,411.4 1,464.5 1,513.4 1,573.0 1,663.7 9 Public debt securities 1,196.5 1,243.9 1,319.0 1,376.6 1,410.1 1,463.1 1,512.1 1,571.7 1,662.4 10 Other debt1 1.4 1.4 1.4 1.3 1.3 1.3 1.3 1.3 1.3 11 MEMO: Statutory debt limit 1,290.2 1,290.2 1,389.0 1,389.0 1,490.0 1,490.0 1,520.0 1,573.0 1,823.8 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 QL 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 2 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 5 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 9 Foreign issues2 24.0 19.0 14.7 10.4 9.9 8.8 8.8 9.1 10 Government 17.6 14.9 13.0 10.4 9.9 8.8 8.8 9.1 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 holder4 15 U.S. government agencies and trust funds 192.5 203.3 209.4 236.3 239.8 257.6 263.1 289.6 16 Federal Reserve Banks 121.3 131.0 139.3 151.9 150.8 152.9 155.0 160.9 17 Private investors 616.4 694.5 848.4 1,022.6 1,073.0 1,102.2 1,154.1 1,212.5 18 Commercial banks 112.1 111.4 131.4 188.8 189.8 182.3 183.0 185.5? 19 Money market funds 3.5 21.5 42.6 22.8 19.4 14.9 13.6 26.0 20 Insurance companies 24.0 29.0 39.1 56.7 57.IP 61.6P 58.6" 73.9P 21 Other companies 19.3 17.9 24.5 39.7 42.6 45.3 47.7P 50.2P 22 State and local governments 87.9 104.3 127.8 155.1 162.9P 165.0P n.a. n.a. Individuals 23 Savings bonds 72.5 68.1 68.3 71.5 72.2 72.9 73.7 74.5 24 Other securities 44.6 42.7 48.2 61.9 64.0 69.3 73.8 70.8 25 Foreign and international5 129.7 136.6 149.5 166.3 166.3 171.5 175.5 193.IP 26 Other miscellaneous investors6 122.8 163.0 217.0 259.8 298.7 319.4 n.a. n.a. 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Consists of investments offoreign 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 1985 week ending Wednesday IItteemm 11998822''"" 11998833 11998844 Dec. Jan/ Feb. Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Immediate delivery1 1 U.S. government securities 64,531 42,135 52,784 58,110 71,679 71,196 73,930' 77,407' 73,661 67,530 69,375 77,026 By maturity 7 Bills 36,790 22,393 26,038 28,202 32,185 33,261 36,657' 30,631' 34,025 31,579 35,788 33,660 3 Other within 1 year 1,620 708 1,305 2,027 1,758 1,639 1,619 1,495 1,595 1,390 1,744 1,740 4 1-5 years 12,543 8,758 11,734 14,964 17,673 17,347 17,571 22,698' 20,896 12,679 16,415 19,850 5-10 years 7,112 5,279 7,607 7,914 12,049 10,319 11,354 13,298' 9,079 9,142 8,202 14,207 6 Over 10 years 6,466 4,997 6,099 5,003 8,014 8,630 6,729' 9,286 8,067 12,740 7,226 7,568 By type of customer 7 U.S. government securities dealers 3,539 2,257 2,920 3,981 4,288 4,349 4,482 3,902 4,088 4,987 4,090 4,272 8 U.S. government securities brokers 31,453 21,045 25,581 24,767 32,617 33,790 32,603 35,300 35,552 31,895 32,198 36,129 9 All others2 30,041 18,832 24,283 29,362 34,774 33,057 36,845' 38,206' 34,020 30,649 33,088 36,624 10 Federal agency securities 8,282 5,576 7,843 8,499 9,846 9,435 10,328 9,495 8,353 9,914 11,552 8,897 11 Certificates of deposit 10,001 4,333 4,947 4,380 5,428 4,544 4,870 4,092 5,123 4,292 3,929 4,651 12 Bankers acceptances 5,004 2,642 3,244 3,376 3,756 3,206 3,762 3,009 3,332 3,245 2,860 3,348 13 Commercial paper 15,190 8,036 10,018 10,882 10,780 9,946 10,414 10,132 11,093 9,575 10,066 9,277 Futures transactions3 14 Treasury bills 10,086 6,655 6,947 4,686 5,510 7,116 4,789 6,470 7,514 8,005 5,891 7,203 15 Treasury coupons 2,977 2,501 4,503 4,605 5,147 6,067 4,356 6,159 5,199 5,995 5,353 7,204 16 Federal agency securities 520 265 262 131 155 127 167 136 125 133 218 117 Forward transactions4 17 U.S. government securities 1,670 1,493 . 1,362 1,423 1,042 1,551 1,035 1,268' 2,062 1,610 1,188 1,619 18 Federal agency securities 1,960 1,646 2,839 3,355 3,538 3,288 4,082 2,560 2,474 3,435 4,373 3,293 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

A32 Domestic NonfinancialS tatistics • May 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 11998822rr 11998833'' 11998844 Dec. Jan. Feb. Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Positions Net immediate1 1 U.S. government securities 13,663 10,701 5,543 18,358 14,111' 13,585 13,244 11,859 11,337 13,921 15,724 2 Bills 7,297 8,020 5,504 13,871 11,629 12,441 12,526 12,201 10,506 12,771 13,495 3 Other within 1 year 972 394 63 -416 -111 851 100 357 713 852 1,132 4 1-5 years 3,256 1,778 2,159' 7,452 5,685 3,054 5,468 4,821 3,763 1,904 2,136 5 5-10 years -318 -78 -1,119 -2,122 -4,024 -2,898 -4,930 -4,352 -4,200 -2,547 -1,434 6 Over 10 years 2,026 528 -1,174 -565 823' 48 -15 -1,257 469 862 294 7 Federal agency securities 4,145 7,232 15,294 18,471 19,429 19,606 20,934 21,007 20,007 18,846 18,803 8 Certificates of deposit 5,532 5,839 7,369' 9,155 10,251' 9,487 9,701 10,154 9,775 9,274 8,935 9 Bankers acceptances 2,832 3,332 3,874 4,329 4,839 4,725 4,824 4,819 4,812 4,974 4,381 10 Commercial paper 3,317 3,159 3,788' 5,694 4,880 5,226 5,435 5,677 5,037 5,274 5,118 Futures positions 11 Treasury bills -2,507 -4,125 -4,525' -10,668 -13,133 -2,549 -12,052 -9,301 -4,995 -1,485 2,306 12 Treasury coupons -2,303 -1,032 1,795' 808 1,336' 3,143 2,218' 2,755 2,964 3,136 3,391 13 Federal agency securities -224 171 233' -10 -55 -9 108 216 171 -87 -255 Forward positions 14 U.S. government securities -788 -1,936 -1,643 -2,188 -845 -1,742 -803 -1,178 -1,877 -2,486 -1,486 15 Federal agency securities -1,432 -3,561 -9,204 -8,294 -6,990 -8,156 -6,326 -7,899 -8,340 -8,156 -8,001 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 26,754 29,099 44,078 52,222 57,000 59,989 55,697 59,293 58,024 62,073 59,690 17 Term agreements 48,247 52,493 68,357 75,532 72,387 71,570 69,193 71,218 73,032 70,585 71,618 Repurchase agreements4 18 Overnight and continuing 49,695 57,946 75,717 89,419 93,727 96,535 93,269 94,194 93,827 96,337 100,117 19 Term agreements 43,410 44,410 57,047 67,185 63,188 62,327 62,840 62,587 64,499 61,539 60,975 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 sifter 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 1985 AAggeennccyy 11998811 11998822 11998833 Aug. Sept. Oct. Nov. Dec. Jan. 1 Federal and federally sponsored agencies 221,946 237,085 239,716 263,642 267,399 259,330 260,015" 261,294" 260,770" 2 Federal agencies 31,806 33,055 33,940 34,497 34,754 35,012 35,078 35,145 35,235 3 Defense Department1 484 354 243 162 153 149 146 142 133 4 Export-Import Bank2'3 13,339 14,218 14,853 15,606 15,733 15,721 15,721 15,882 15,882 5 Federal Housing Administration4 413 288 194 146 140 139 138 133 132 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 15,030 15,160 15,450 15,520 15,435 15,535 9 United States Railway Association6 202 194 111 51 51 51 51 51 51 10 Federally sponsored agencies7 190,140 204,030 205,776 229,145 232,645 224,318 224,937" 226,149" 225,535" 11 Federal Home Loan Banks 54,131 55,967 48,930 62,116 65,616 66,126 66,230 65,085 64,705 12 Federal Home Loan Mortgage Corporation 5,480 4,524 6,793 9,068 8,950 n.a. n.a. n.a. n.a. 13 Federal National Mortgage Association8 58,749 70,052 74,594 79,921 80,123 80,357 81,119 83,720 84,612 14 Farm Credit Banks 71,359 71,896 72,409 73,352 73,131 72,859 72,267 71,255 70,642 15 Student Loan Marketing Association 421 1,591 3,050 4,688 4,824 5,143 5,321 5,369 5,576 MEMO 16 Federal Financing Bank debt 110,698 126,424 135,791 144,063 144,836 144,978 145,174 145,217 146,034 Lending to federal and federally sponsored 17 Export-Import Bank3 12,741 14,177 14,789 15,563 15,690 15,690 15,690 15,852 15,852 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 13,305 13,435 13,725 13,795 13,710 13,810 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 59,196 59,511 59,021 58,801 58,971 59,066 23 Rural Electrification Administration 13,516 17,157 19,766 20,742 20,587 20,694 20,889 20,693 20,653 24 Other 12,740 22,774 26,460 29,119 29,475 29,710 29,861 29,853 30,515 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

A34 Domestic NonfinancialS tatistics • May 1985 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1984r 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 issues, new and refunding1 79,138 86,421 105,000 7,323 7,680 7,537 11,726 7,967 12,506 13,225 16,448 Type of issue 3 2 Ge U ne .S ra . l g o o b v l e ig rn a m tio e n n t loans2 21,0 2 9 2 4 5 21,56 % 6 26, n 4 . 2 a 0 . 2,438 3 2,857 3 1,91 3 9 1,78 5 1 1,433 9 3,758 7 2,668 7 2, n 0 . 7 a 6 . 4 Revenue 58,044 64,855 78,580 4,885 4,823 5,618 9,945 6,534 8,748 10,557 14,372 5 U.S. government loans2 461 253 n.a. 13 15 18 21 23 28 36 n.a. Type of issuer 6 State 8,438 7,140 9,519 497 447 465 2,157 596 1,109 805 716 7 Special district and statutory authority 45,060 51,297 62,403 3,990 4,313 5,121 7,321 5,202 7,076 7,079 10,944 8 Municipalities, counties, townships, school districts 25,640 27,984 33,087 2,836 2,920 1,951 2,248 2,169 4,330 5,341 4,788 9 Issues for new capital, total 74,804 72,441 92,547 6,024 6,959 6,592 10,749 7,454 11,096 12,069 15,143 Use of proceeds 10 Education 6,482 8,099 7,499 987 877 466 627 333 748 989 634 11 Transportation 6,256 4,387 7,394 428 464 118 423 590 1,018 2,136 1,196 12 Utilities and conservation 14,259 13,588 16,612 1,685 1,195 385 1,015 2,013 2,782 504 2,933 13 Social welfare 26,635 26,910 29,425 1,227 2,239 3,728 4,823 3,018 3,495 3,590 3,211 14 Industrial aid 8,349 7,821 15,897 429 463 884 1,055 679 1,493 3,751 6,198 15 Other purposes 12,822 11,637 15,720 1,268 1,721 1,011 2,806 821 1,560 1,099 971 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 1985 Type of i o s r s u u e s e o r issuer, 11998822 11998833 11998844 June July Aug. Sept. Oct. Nov. Dec. Jan. 1 All issues1-2 84,638 98,948 95,986' 7,401 7,641' 10,917 7,758' 12,350 11,931 6,940 7,294 2 Bonds 54,076 47,369 73,357' 5,180 6,309' 8,863 6,225' 10,403 9,524 5,918 5,739 Type of offering 3 Public 44,278 47,369 73,357' 5,180 6,309' 8,863 6,225' 10,403 9,524 5,918 5,739 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 14,438' 1,440 950 2,484 1,614' 2,989 1,447 1,741 1,326 6 Commercial and miscellaneous 5,442 5,186 8,745 536 875 776 576 988 1,198 555 144 7 Transportation 1,491 1,039 1,272 225 40 183 200 161 19 110 297 8 Public utility 12,327 7,241 6,754 475 650 765 758 1,150 555 575 309 9 Communication 2,390 3,159 2,407 0 31 0 0 240 1,557 169 375 10 Real estate and financial 19,604 22,900 39,741 2,504 3,763 4,654 3,076 4,875 4,749 2,768 3,288 11 Stocks3 30,562 51,579 22,628 2,221 1,332 2,054 1,533 1,947 2,407 1,022 1,555 Type 12 Preferred 5,113 7,213 4,118 244 209 334 155 555 655 91 170 13 Common 25,449 44,366 18,510 1,977 1,123 1,720 1,378 1,392 1,752 931 1,385 Industry group 14 Manufacturing 5,649 14,135 4,054 584 204 258 212 712 227 137 172 15 Commercial and miscellaneous 7,770 13,112 6,277 316 382 558 378 489 1,025 112 234 16 Transportation 709 2,729 589 1 28 0 87 16 66 71 0 17 Public utility 7,517 5,001 1,624 282 136 44 92 146 150 66 225 18 Communication 2,227 1,822 419 11 0 123 9 69 3 26 271 19 Real estate and financial 6,690 14,780 9,665 1,027 582 1,071 755 515 936 610 653 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 1985 IItteemm 11998833 11998844'' June July Aug. Sept. Oct. Nov. Dec/ Jan. INVESTMENT COMPANIES' 1 Sales of own shares2 84,345 107,469 8,343 7,488 8,956 8,156 9,517 9,458 10,006 19,035 2 Redemptions of own shares3 57,100 76,147 6,156 5,777 6,497 6,185 6,766 6,343 8,948 9,183 3 Net sales 27,245 31,322 2,187 1,711 2,459 1,971 2,751 3,115 1,058 9,852 4 Assets4 113,599 137,126 115,034 115,481 128,209 129,657 131,539 132,709 137,126 151,547 5 Cash position5 8,343 11,978 11,907 11,620 12,698 13,221 11,417 11,518 11,978 12,656 6 Other 105,256 125,148 103,127 103,861 115,511 116,436 120,122 121,191 125,148 138,891 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'' Ql Q2 Q3 Q4 Ql Q2 Q3 Q4' 1 Corporate profits with inventory valuation and capital consumption adjustment 159.1 225.2 286.2 179.1 216.7 245.0 260.0 277.4 291.1 282.8 293.5 2 Profits before tax 165.5 203.2 236.2 161.7 198.2 227.4 225.5 243.3 246.0 224.8 230.6 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 104.8 127.4 146.2 102.6 123.4 142.6 141.1 150.6 150.2 141.7 142.3 5 Dividends 69.2 72.9 80.5 71.1 71.7 73.3 75.4 77.7 79.9 81.3 83.1 6 Undistributed profits 35.6 54.5 65.6 31.4 51.7 69.3 65.6 72.9 70.2 60.3 59.2 7 Inventory valuation -9.5 -11.2 -5.6 -4.3 -12.1 -19.3 -9.2 -13.5 -7.3 -.2 -1.6 8 Capital consumption adjustment 3.1 33.2 55.7 21.7 30.6 36.9 43.6 47.6 52.3 58.3 64.5 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • May 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 A 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 12.43 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 Q1 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 \ 24.9' 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 1985 1984 1985 1984 1985 JJJaaannn... 333111,,, 111999888555''' Nov. Dec. Jan. Nov. Dec. Jan. Nov. Dec. Jan. 1 Total 137,953 1,860 2,969 4,368 24,946 27,088 28,010 23,086 24,119 23,642 Retail financing of installment sales 2 Automotive (commercial vehicles) 11,294 39 -20 -25 771 720 720 732 740 745 3 Business, industrial, and farm equipment 20,312 215 477 -218 1,337 1,491 1,254 1,122 1,014 1,472 Wholesale financing 4 Automotive 19,001 349 1,295 1,0% 8,616 9,898 10,165 8,267 8,603 9,069 5 Equipment 4,677 43 -82 157 617 573 711 574 655 554 6 All other 6,408 142 212 147 1,702 1,690 1,824 1,560 1,478 1,677 Leasing 7 Automotive 12,989 271 377 623 757 917 1,121 486 540 498 8 Equipment 36,459 554 453 928 1,328 1,528 1,767 774 1,075 839 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,250 133 226 1,659 8,753 9,285 9,475 8,620 9,059 7,816 10 All other business credit 10,563 114 31 1 1,065 986 973 951 955 972 1. Not seasonally adjusted. NOTE. These data also appear in the Board's G.20 (422) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic NonfinancialS tatistics • May 1985 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1984 1985 IItteemm 11998822 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 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 96.8 94.3 97.4 98.4 99.5 102.6 2 Amount of loan (thousands of dollars) 69.8 69.5 73.7 71.8 72.5 74.0 75.2 76.9 3 Loan/price ratio (percent) 76.6 77.1 78.7 78.1 77.3 78.2 77.9 77.9 4 Maturity (years) 27.6 26.7 27.8 28.0 27.fr- 27.6 27.5 28.0 5 Fees and charges (percent of loan amount)2 2.95 2.40 2.64 2.82 2.63 2.58 2.54 2.65 6 Contract rate (percent per annum) 14.47 12.20 11.87 11.89 12.03 12.27 12.27 12.05 Yield (percent per annum) 1 FHLBB series' 15.12 12.66 12.37 12.43 12.53 12.77 12.75 12.55 8 HUD series4 15.79 13.43 13.80 14.24 13.98 13.59 13.20 13.05 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5. 15.30 13.11 13.81 14.21 13.99 13.43 12.90 12.99 10 GNMA securities6 14.68 12.25 13.13 13.56 13.36 13.09 12.71 12.54 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 66,031 74,847 83,339 84,193 84,851 85,539 86,416 87,940 89,353 90,369 1? FHA/VA-insured 39,718 37,393 35,148 34,938 34,844 34,791 34,752 34,711 34,602 34,553 13 Conventional 26,312 37,454 48,191 49,255 50,006 50,749 51,664 53,229 54,751 55,816 Mortgage transactions (during period) 14 Purchases 15,116 17,554 16,721 820 1,145 1,087 11,,229977 1,962 1,943 1,559 15 Sales 2 3,528 978 0 0 0 0 0 0 0 Mortgage commitments1 16 Contracted (during period) 22,105 18,607 21,007 1,227 1,142 1,638 2,150 2,758 1,230 1,895 17 Outstanding (end of period) 7,606 5,461 6,384 6,332 6,235 6,656 5,916 6,384 5,678 5,665 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 Total 5,131 5,996 n.a. 9,331 9,447 9,726 9,900 19 FHA/VA 1,027 974 n.a. 901 896 891 886 20 Conventional 4,102 5,022 n.a. 8,431 8,551 8,835 9,014 Mortgage transactions (during period) 21 Purchases 23,673 23,089 n.a. 11,,882211 11,,226622 2,864 22,,224411 n.a. n.a. n.a. 22 Sales 24,170 19,686 n.a. 1,570 1,137 2,573 1,961 Mortgage commitments9 23 Contracted (during period) 28,179 32,852 n.a. 3,130 3,440 2,663 4,158 24 Outstanding (end of period) 7,549 16,964 n.a. 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 averages of Friday figures from the borrower or the seller) to obtain a loan. Wall Street Journal. 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 Ql Q2 Q3 Q4 1 All holders 1,658,450 1,827,563 2,030,930 1,827,563 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 301,362 348,958 406,139 348,958 360,540 377,974 393,600 406,139 5 106,710 109,311 110,863 109,311 109,616 110,577 111,122 110,863 6 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 banks' 301,272 328,323 374,186 328,323 340,797 353,946 365,386 374,186 8 1- to 4-family 173,804 181,300 197,944 181,300 185,530 190,706 194,933 197,944 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 7? 1- to 4-family 16,751 15,319 14,218 15,319 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 2.4 Commercial 93,547 103,831 111,692 103,831 104,890 107,796 110,149 111,692 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 78 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 4,782 4,894 4,832 4,753 4,801 4,782 36 1- to 4-family 1,980 1,893 2,007 1,893 1,956 1,894 1,967 2,007 37 Multifamily 3,248 3,001 2,775 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 5? 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

A40 Domestic NonfinancialS tatistics • May 1985 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net ChangeA 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 % 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 % 178 249 • These data have not been revised this month due to revisions that were not 3. For 1982 and earlier, net change equals extensions, seasonally adjusted less available at time of publication. liquidations, seasonally adjusted. Beginning 1983, net change equals outstandings, 1. The Board's series cover most short- and intermediate-term credit extended seasonally adjusted less outstandings of the previous period, seasonally adjusted. to individuals through regular business channels, usually to finance the purchase NOTE. Total consumer noninstallment credit outstanding—credit scheduled to of consumer goods and services or to refinance debts incurred for such purposes, be repaid in a lump sum, including single-payment loans, charge accounts, and and scheduled to be repaid (or with the option of repayment) in two or more service credit—amounted to, not seasonally adjusted, $80.7 billion at the end of installments. 1981, $85.9 billion at the end of 1982, and $96.9 billion at the end of 1983. 2. Includes auto dealers and excludes 30-day charge credit held by travel and These data also appear in the Board's G.19 (421) release. For address, see entertainment companies. 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 1984 1985 IItteemm 11998822 11998833 11998844 July Aug. Sept. Oct. Nov. Dec. Jan. INTEREST RATES Commercial banks' 1 48-month new car2 16.82 13.92 13.71 n.a. 14.08 n.a. n.a. 13.91 n.a. n.a. 2 24-month personal 18.64 16.50 16.47 n.a. 16.75 n.a. n.a. 16.63 n.a. n.a. 3 120-month mobile home2 18.05 16.08 15.58 n.a. 15.72 n.a. n.a. 15.60 n.a. n.a. 4 Credit card 18.51 18.78 18.77 n.a. 18.81 n.a. n.a. 18.82 n.a. n.a. Auto finance companies 5 New car 16.15 12.58 14.62 14.68 15.01 15.16 15.18 15.24 15.24 15.11 6 Used car 20.75 18.74 17.85 17.77 17.99 18.10 18.19 18.30 18.34 17.88 OTHER TERMS3 Maturity (months) / New car 45.9 45.9 48.3 48.6 49.2 49.5 49.7 50.0 50.2 50.7 8 Used car 37.0 37.9 39.7 39.8 39.8 39.9 39.9 39.9 39.8 41.3 Loan-to-value ratio 9 New car 85 86 88 88 88 89 88 89 89 90 10 Used car 90 92 92 92 93 93 93 93 93 93 Amount financed (dollars) 11 New car 8,178 8,787 9,333 9,377 9,409 9,402 9,449 9,577 9,707 9,654 12 Used car 4,746 5,033 5,691 5,763 5,753 5,792 5,826 5,900 5,975 5,951 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

A42 Domestic NonfinancialS tatistics • May 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 5 Y' 11997799 11998800 11998811 11998822 iyo4 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 U 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 ••ft Loans from U.S. government .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 .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 97.7 109.1 117.1 142.6 100.8 117.3 119.7 114.6 123.7 161.5 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 69.7 66.2 69.4 69.1 79.2 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 379.0 319.6 357.3 375.6 495.9 648.6 327.5 423.8 450.8 541.1 662.5 634.7 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 -16.4 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

A44 Domestic Nonfinancial Statistics • May 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 June July Aug. Sept. Oct. Nov. Dec.' Jan.' Feb. 1 Industrial production 138.6 147.6 166.3' 164.4 165.9 166.0 165.0 164.4 164.8' 165.0 165.5 164.7 Market groupings 2 Products, total 141.8 149.2 164.7' 165.3 167.4 167.2 166.4 166.9 167.7' 168.3 168.5 167.9 3 Final, total 141.5 147.1 162.7' 163.1 165.2 165.1 164.6 165.2 166.2' 167.0 167.2 166.7 4 Consumer goods 142.6 151.7 161.7' 163.0 163.8 162.5 161.6 161.6 162.6' 162.5 162.9 161.9 5 Equipment 139.8 140.8 164.1 163.3 167.0 168.7 168.9 170.1 171.2 173.1 173.2 173.2 6 Intermediate 143.3 156.6 172.3' 173.5 175.8 175.1 173.0 173.4 173.1' 173.1 173.4 172.2 7 Materials 133.7 145.2 161.2' 162.9 163.5 164.0 162.8 160.4 160.4' 159.9 160.9 159.9 Industry groupings 8 Manufacturing 137.6 148.2 164.8' 165.7 167.3 167.6 166.6 166.2 166.6' 166.9 167.0 166.3 Capacity utilization (percent)1 9 Manufacturing 71.1 75.2 81.6 82.2 82.9 82.8 82.2 81.7 81.6' 81.5 81.4 80.8 10 Industrial materials industries 70.1 75.2 82.0 82.9 83.1 83.3 82.4 81.0 80.9 80.4 80.7 80.1 11 Construction contracts (1977 = 100)2 111.0 138.0 150.0 148.0 152.0 151.0 144.0 146.0 158.0 148.0 n.a. n.a. 12 Nonagricultural employment, total3 136.1 137.0 143.1 143.1 143.4 143.6 144.1 144.6 145.1 145.4 145.9 146.1 13 Goods-producing, total 102.2 100.4 106.8 107.1 107.5 107.7 107.3 107.6 107.8 108.4 108.7 108.1 14 Manufacturing, total 96.6 95.1 100.7 100.9 101.3 101.4 100.9 101.2 101.4 101.8 101.8 101.4 15 Manufacturing, production-worker ... 89.1 87.9 94.0 94.3 94.6 94.8 94.0 94.3 94.4 94.8 94.9 94.4 16 Service-producing 154.7 157.1 163.0 162.8 163.1 163.4 164.2 164.9 165.6 165.7 166.3 166.9 17 Personal-income, total 410.3 435.6 478.1' 477.2 480.6 483.5 487.0 488.8' 491.7' 493.9 497.0 498.6 18 Wages and salary disbursements 367.4 388.6 422.5 422.6 424.4 425.5 428.4 428.8 432.6 436.7 438.6 440.6 19 Manufacturing 285.5 294.7 323.6 323.1 324.4 326.2 325.7 326.7 330.0 333.2 334.2 333.4 20 Disposable personal income4 398.0 427.1 470.3' 469.1 472.5 475.5 479.1 480.6' 482^ 484.5 487.9 489.2 21 Retail sales5 326.0 373.0 412.0' 416.8' 411.0' 410.4' 414.1' 416.4' 421.3' 422.3 423.2 429.4 Prices6 22. Consumer 289.1 298.4 311.1 310.7 311.7 313.0 314.5 315.3 315.3 315.5 316.1 317.4 23 Producer finished goods 280.7 285.2 291.2 290.9 292.3 291.3 289.5' 291.5' 292.3 292.4 292.7 292.5 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 July Aug. Sept. Oct. Nov. Dec/ Jan/ Feb. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 174,450 176,414 178,602 178,669 178,821 179,005 179,181 179,353 179,524 179,600 179,742 2 Labor force (including Armed Forces)1 112,383 113,749 115,763 116,097 115,867 116,006 116,241 116,292 116,682 117,091 117,310 3 Civilian labor force 110,204 111,550 113,544 113,868 113,629 113,764 114,016 114,074 114,464 114,875 115,084 Employment 4 Nonagricultural industries2 96,125 97,450 101,685 102,044 101,884 102,075 102,480 102,598 102,888 103,071 103,345 5 Agriculture 3,401 3,383 3,321 3,333 3,264 3,319 3,169 3,334 3,385 3,320 3,340 Unemployment 6 Number 10,678 10,717 8,539 8,491 8,481 8,370 8,367 8,142 8,191 8,484 8,399 7 Rate (percent of civilian labor force) ... 9.7 9.6 7.5 7.5 7.5 7.4 7.3 7.1 7.2 7.4 7.3 8 Not in labor force 62,067 62,665 62,839 62,572 62,954 62,999 62,940 63,061 62,842 62,509 62,432 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 89,566 90,138 94,166 94,350 94,523 94,807 95,157 95,497' 95,681 95,993 96,112 10 Manufacturing 18,781 18,497 19,589 19,696 19,725 19,616 19,686 19,718 19,801 19,805 19,728 11 Mining 1,128 957 999 1,007 1,017 1,020 1,012 1,009 1,000 995 988 12 Contract construction 3,905' 3,940 4,315 4,356 4,356 4,374 4,382 4,3% 4,457 4,532 4,480 13 Transportation and public utilities 5,082 4,958 5,169 5,175 5,202 5,213 5,225 5,226 5,249 5,257 5,264 14 Trade 20,457 20,804 21,790 21,811 21,839 21,930 22,080 22,267 22,267 22,377 22,491 15 Finance 5,341 5,467 5,665 5,676 5,679 5,684 5,705 5,725 5,749 5,760 5,790 16 Service 19,036 19,665 20,666 20,701 20,748 20,861 20,964 21,030 21,095 21,23T 21,331 17 Government 15,837 15,851 15,973 15,928 15,957 16,109 16,103 16,126' 16,063 16,036 16,040 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 • May 1985 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1984 1984 1984 Ql Q2 Q3 Q4' Ql Q2 Q3 Q4 Ql Q2 Q3 Q4' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 159.8 163.1 165.6 164.7 198.4 199.7 201.1 202.4 80.5 81.7 82.4 81.4 2 Mining 124.2 125.1 129.0 165.7 165.9 166.1 166.3 75.0 75.4 77.7 74.7 3 Utilities 179.2 183.1 181.1 82.7 213.8 215.3 216.8 218.3 83.8 85.0 83.5 83.7 4 Manufacturing 161.0 164.4 167.2 166.7 199.5 201.0 202.5 204.0 80.7 81.8 82.5 81.6 5 Primary processing ... 160.5 162.5 162.2 159.9 196.5 197.2 198.0 198.7 81.7 82.4 81.9 80.5 6 Advanced processing . 161.7 165.2 169.7 169.7 201.1 203.0 204.9 206.8 80.3 81.4 82.8 82.0 7 Materials 158.8 162.1 163.4 160.2 194.7 195.9 197.2 198.4 81.6 82.7 82.9 80.8 8 Durable goods 157.6 162.0 164.6 162.2 197.1 198.3 199.5 200.8 79.9 81.7 82.5 80.7 9 Metal materials .... 97.3 100.3 97.2 91.2 139.1 138.5 137.9 137.3 70.0 72.4 70.5 66.4 10 Nondurable goods.... 183.7 186.6 185.7 181.6 221.8 223.4 225.2 226.9 82.8 83.5 82.5 80.1 11 Textile, paper, and chemical.. 193.2 195.9 194.9 189.9 234.2 236.2 238.2 240.3 82.5 82.9 81.8 79.1 12 Paper 165.8 168.5 171.0 168.1 168.5 169.5 170.5 171.5 98.4 99.4 100.3 98.0 13 Chemical 236.7 240.4 238.4 234.1 302.3 305.2 308.0 310.9 78.3 78.8 77.4 75.3 14 Energy materials 131.2 132.4 133.1 129.2 155.8 156.4 157.0 157.6 84.2 84.6 84.8 82.0 Previous cycle1 Latest cycle2 1984 1984 1985 High Low High Low Jan. June July Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 69.6 80.1 82.1 82.7 82.5 81.9 81.4 81.4 81.3 81.4 80.7 16 Mining 91.8 86.0 88.5 69.6 75.4 76.6 78.3 77.3 77.4 74.3 75.1 74.8 75.3 73.5 17 Utilities 94.9 82.0 86.7 79.0 84.8 85.4 84.1 83.3 83.2 82.9 84.6 83.5 84.6 84.4 18 Manufacturing 87.9 69.0 87.5 68.8 80.1 82.2 82.8 82.8 82.0 81.7 81.6 81.5 81.4 80.8 19 Primary processing ... 93.7 68.2 91.4 66.2 80.6 82.6 82.3 82.1 81.5 81.2 80.6 79.7 80.3 80.0 20 Advanced processing . 85.5 69.4 85.9 70.0 80.0 81.9 83.0 83.1 82.4 81.8 82.0 82.3 82.1 81.4 21 Materials 92.6 69.3 88.9 66.6 80.6 82.9 83.1 83.2 82.4 81.0 80.9 80.4 80.7 80.1 22 Durable goods 91.4 63.5 88.4 59.8 78.5 82.0 82.5 82.9 82.2 81.3 80.8 80.2 80.5 79.7 23 Metal materials 97.8 68.0 95.4 46.2 67.3 72.1 70.8 70.8 69.8 67.6 66.7 65.0 65.6 67.1 24 Nondurable goods .... 94.4 67.4 91.7 70.7 81.9 83.3 83.0 82.9 81.5 80.5 80.2 79.5 79.3 78.4 25 Textile, paper, and chemical 95.1 65.4 92.3 68.6 81.5 82.6 82.5 82.4 80.5 79.7 79.1 78.4 78.3 77.5 26 Paper 99.4 72.4 97.9 86.3 99.3 99.8 101.5 99.7 99.7 98.7 97.2 98.1 97.7 n.a. 27 Chemical 95.5 64.2 91.3 64.0 76.7 78.4 77.9 78.1 76.1 75.7 75.7 74.5 74.8 n.a. 28 Energy materials 94.5 84.4 88.9 78.5 84.4 85.0 85.3 84.7 84.3 81.0 82.1 82.7 83.9 84.0 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 1984 1985 pro- 11998844 GGrroouuppiinngg por- avg/ tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov/ Dec. Jan.P Feb/ Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 163.3 160.0 160.8 162.1 162.8 164.4 165.9 166.0 165.0 164.4 164.8 165.0 165.5 164.7 7 Products 60.71 164.7 160.4 161.1 162.5 163.3 165.3 167.4 167.2 166.4 166.9 167.7 168.3 168.5 167.9 Final products 47.82 162.7 158.0 158.6 160.2 161.1 163.1 165.2 165.1 164.6 165.2 166.2 167.0 167.2 166.7 4 Consumer goods 27.68 161.7 159.4 160.2 161.4 161.7 163.0 163.8 162.5 161.6 161.6 162.6 162.5 162.9 161.9 Equipment 20.14 164.1 156.1 156.4 158.5 160.3 163.3 167.0 168.7 168.9 170.1 171.2 173.1 173.2 173.2 6 Intermediate products 12.89 172.3 169.0 170.2 171.0 171.6 173.5 175.8 175.1 173.0 173.4 173.1 173.1 173.4 172.2 7 Materials 39.29 161.2 159.4 160.4 161.5 162.0 162.9 163.5 164.0 162.8 160.4 160.4 159.9 160.9 159.9 Consumer goods 8 Durable consumer goods 7.89 162.0 162.5 163.1 162.2 161.4 163.6 163.7 162.6 159.6 158.7 161.5 161.3 161.2 159.9 9 Automotive products 2.83 181.3 182.1 184.1 180.9 179.8 184.3 185.0 181.8 173.0 171.9 184.1 185.6 192.8 189.3 10 Autos and utility vehicles 2.03 158.1 162.2 164.1 158.4 155.9 158.7 161.1 159.2 145.6 145.0 161.5 164.7 174.1 169.9 II Autos 1.90 135.3 140.4 142.4 134.5 132.9 136.2 138.7 134.3 121.1 123.6 138.9 142.5 151.3 144.6 1? Auto parts and allied goods .80 240.2 232.6 234.7 238.0 240.6 249.3 245.8 239.1 242.7 240.2 241.2 238.6 240.0 238.7 N Home goods 5.06 151.1 151.5 151.3 151.7 151.1 152.0 151.8 151.9 152.0 151.4 148.9 147.7 143.6 143.5 14 Appliances, A/C, and TV 1.40 134.3 135.1 134.4 136.1 134.0 134.9 133.4 132.3 136.4 133.5 130.5 133.1 122.3 126.1 IS Appliances and TV 1.33 137.5 138.6 138.0 138.8 136.7 138.0 136.9 135.9 140.2 136.8 133.2 136.2 124.7 16 1.07 179.2 178.7 180.2 181.0 179.6 179.4 179.5 180.8 179.3 178.1 177.5 173.7 172.8 17 Miscellaneous home goods 2.59 148.7 149.1 148.5 148.0 148.6 150.0 150.3 150.6 149.2 150.0 147.0 144.8 143.0 141.6 18 Nondurable consumer goods 19.79 161.6 158.2 159.1 161.1 161.8 162.7 163.9 162.4 162.4 162.7 163.0 163.0 163.5 162.7 4 29 70 Consumer staples 15.50 171.6 166.9 168.0 170.2 171.6 173.2 174.5 172.7 173.1 173.8 173.9 173.7 174.0 173.7 8 33 160 7 156.8 157 6 160.4 161.0 161.9 162.9 161.8 162.1 162.4 161.2 162.6 ?? Nonfood staples 7.17 184.2 178.7 180.1 181.6 183.9 186.3 188.0 185.4 185.9 187.0 188.6 186.6 186.2 185.4 73 Consumer chemical products .... 2.63 240.8 231.9 231.3 233.4 235.9 241.5 247.1 244.3 247.3 247.5 245.7 247.7 245.9 "M 1.92 145.8 140.3 141.8 144.0 145.6 147.9 151.5 148.7 146.7 146.9 148.5 147.0 147.4 ?S Consumer energy products 2.62 155.6 153.3 156.8 157.1 159.8 159.0 155.3 153.3 153.0 155.6 160.7 154.4 154.6 2266 11..4455 117777..99 117722..88 117777..77 117777..44 181.1 182.4 117788..66 175.0 174.1 177.4 186.5 178.6 Equipment 77 Business 12.63 181.0 171.9 172.1 173.5 176.5 181.1 185.5 187.6 186.4 187.3 188.4 118899..99 118899..55 188.8 ?8 Industrial 6.77 140.6 134.6 134.8 135.9 138.5 140.4 143.1 143.3 143.5 145.3 145.6 147.0 144.0 141.3 79 Building and mining 1.44 187.6 182.0 175.2 173.6 182.9 185.8 190.0 191.6 190.7 194.6 197.2 199.8 192.1 184.2 30 Manufacturing 3.85 127.4 120.9 124.2 126.2 127.4 128.6 130.1 129.7 129.8 131.0 129.9 130.9 129.4 128.0 31 Power 1.47 128.8 123.8 122.7 124.1 124.1 126.7 131.0 131.2 133.0 134.5 135.8 137.3 135.1 134.1 37 Commercial transit, farm 5.86 227.7 215.1 215.3 217.0 220.5 228.1 234.5 238.9 235.9 235.8 237.9 239.4 242.0 243.6 33 3.26 325.2 305.9 306.9 309.6 315.5 326.3 333.4 339.2 336.5 338.5 342.1 344.7 349.9 351.1 34 Transit 1.93 115.4 110.1 109.2 108.9 109.7 115.1 120.4 124.5 121.4 117.8 118.2 119.6 119.6 122.6 3"! .67 76.4 75.7 75.0 78.0 77.1 76.1 81.8 80.3 76.4 76.1 76.2 72.2 69.6 36 Defense and space 7.51 135.7 129.5 130.1 133.2 133.1 133.5 135.9 136.8 139.5 141.1 142.2 144.8 145.9 147.0 Intermediate products 37 Construction supplies 6.42 158.8 156.6 159.1 159.6 159.5 160.9 161.9 160.9 158.2 158.6 156.9 115577..00 115566..77 155.3 38 6.47 185.7 181.3 181.3 182.3 183.5 186.1 189.5 189.1 187.6 188.0 189.2 189.1 190.0 3399 11..1144 119933..55 119911..66 118877..00 119900..00 119900..88 119955..33 119944..99 119933..33 119944..55 194.8 199.8 196.1 200.8 Materials 40 Durable goods materials 20.35 161.6 158.6 159.5 161.3 161.6 163.0 164.2 165.3 164.3 116622..99 162.3 161.3 116622..55 116611..22 41 Durable consumer parts 4.58 134.4 133.1 133.0 133.2 132.6 134.7 135.1 136.6 136.2 136.3 134.8 136.6 139.2 138.3 4? Equipment parts 5.44 212.5 204.0 206.7 210.9 210.6 214.0 218.8 220.1 219.6 216.1 216.4 215.5 214.2 210.7 43 Durable materials n.e.c 10.34 146.9 146.0 146.3 147.7 148.6 148.7 148.3 149.2 147.7 146.7 146.0 143.8 145.6 145.3 5.57 101.0 103.0 103.0 105.7 104.5 104.1 103.4 102.0 99.8 97.8 95.7 92.5 94.3 45 Nondurable goods materials 10.47 184.3 184.1 185.9 185.7 187.4 186.7 186.5 186.7 184.0 182.1 181.9 180.7 180.8 179.0 46 Textile, paper, and chemical 7.62 193.3 193.9 195.3 195.0 196.8 195.8 195.9 196.3 192.4 190.7 190.2 188.7 189.2 187.5 47 1.85 117.1 119.9 120.6 118.9 121.9 119.6 118.8 120.1 115.6 112.0 109.3 108.8 107.6 48 1.62 168.1 166.8 163.5 166.7 169.2 169.5 172.8 170.0 170.3 168.9 166.7 168.6 168.3 49 4.15 237.3 237.6 241.1 240.0 241.1 240.2 239.3 240.6 235.3 234.5 235.5 232.3 233.8 50 Containers, nondurable 1.70 175.5 173.0 176.0 175.7 176.6 176.7 176.6 175.3 175.8 174.3 176.5 177.2 174.5 51 1.14 137.1 135.2 137.7 138.6 140.5 140.5 138.8 139.6 140.8 136.0 134.7 132.4 133.8 57 Energy materials 8.48 131.4 131.0 131.3 132.1 131.9 133.2 133.7 133.0 132.7 127.6 129.4 130.7 132.7 133.0 53 4.65 119.5 121.3 119.6 119.5 119o8 120.1 122.7 121.8 121.6 113.1 115.3 117.9 119.3 5544 33..8822 114466..11 114422..88 114455..44 114477..33 114466..55 114499..00 114477..11 114466..88 114466..11 145.2 146.7 146.2 149.0 Supplementary groups 55 Home goods and clothing 9.35 139.4 140.3 140.1 141.0 139.8 139.6 139.7 139.6 138.9 138.3 137.2 137.0 135.3 134.1 56 Energy, total 12.23 142.4 141.4 141.9 142.8 143.3 144.5 144.0 143.0 142.8 139.8 142.7 141.8 143.7 144.0 57 33..7766 167.1 164.9 166.0 167.1 169.2 170.0 167.3 165.4 165.5 167.5 172.6 167.0 168.6 58 Materials 88..4488 131.4 131.0 131.3 132.1 131.9 133.2 133.7 133.0 132.7 127.6 129.4 130.7 132.7 133.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • May 1985 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1967 1984 1985 SIC pro- 1984 GGrroouuppiinngg code por- avg/ tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov/ Dec. Jan.? Feb/ Index (1967 = 100) MAJOR INDUSTRY 12.05 152.0 148.9 150.4 151.3 152.1 154.1 154.4 153.0 153.3 150.5 153.1 152.0 153.8 152.3 6.36 125.7 124.1 123.8 123.3 125.0 127.0 129.9 128.3 128.7 123.6 124.8 124.4 125.3 122.4 5.69 181.4 176.5 180.0 182.7 182.3 184.3 181.8 180.6 180.9 180.6 184.7 182.7 185.5 185.6 3.88 205.5 200.0 204.6 207.7 206.8 209.6 205.9 204.0 204.4 203.8 209.1 205.7 209.4 209.4 87.95 164.8 161.4 162.1 163.4 164.2 165.7 167.3 167.6 166.6 166.2 166.6 166.9 167.0 166.3 35.97 179.4 177.2 177.6 179.1 179.9 181.3 181.8 181.7 180.3 179.4 179.6 179.7 179.7 179.2 5511..9988 115544..77 150.5 151.4 152.6 153.3 154.9 157.2 157.8 157.1 157.1 157.6 158.0 158.2 157.5 Mining 8 Metal 10 .51 91.7 97.4 100.0 98.5 98.0 96.8 96.4 83.4 84.5 91.2 87.5 76.6 82.3 9 Coal 11.12 .69 155.8 163.2 164.0 151.4 153.9 161.5 176.5 171.7 173.7 127.8 134.4 142.1 144.5 146.0 10 Oil and gas extraction 13 4.40 121.7 119.6 118.2 118.8 120.4 121.6 122.8 122.5 122.4 122.6 123.8 123.5 123.9 120.5 1144 ..7755 114455..00 113333..00 113355..88 114400..44 114444..00 114477..99 115511..99 115533..55 154.6 147.8 114477..55 146.0 145.0 Nondurable manufactures 20 8.75 163.2 160.0 161.2 163.1 164.2 165.1 164.9 164.7 164.3 164.0 162.9 164.0 13 Tobacco products 21 .67 115.2 110.9 111.8 113.3 112.8 118.3 115.1 113.8 113.1 119.5 117.4 121.5 22 2.68 113388..55 114422..33 114433..55 114400..00 114400..55 114400..77 113399..88 114400..33 135.4 113333..33 113322..00 131.0 131.5 23 3 31 16 Paper and products 26 3.21 174.4 176.6 173.8 172.4 174.1 174.6 176.7 176.7 177.5 173.5 173.0 173.4 172.1 171.8 17 Printing and publishing 27 4.72 169.6 164.8 165.2 166.3 167.5 169.0 172.6 173.1 170.5 172.3 174.0 173.4 173.6 173.0 28 7.74 228.2 224.8 225.0 228.3 227.9 231.0 232.0 231.6 230.8 228.0 230.2 229.2 228.5 19 Petroleum products 29 1.79 124.4 127.6 127.0 126.8 127.9 127.5 124.7 124.3 122.6 122.9 124.0 120.3 119.0 119.5 30 22..2244 331.8 318.5 323.8 328.0 334.1 341.0 341.4 341.5 338.4 338.6 332.2 333.2 334.5 3311 ..8866 5599..99 6633..99 6633..99 6633..55 6611..44 60.0 6600..66 5599..11 57.9 55.0 55.9 56.4 53.9 Durable manufactures 22 Ordnance, private and government ... 19.91 3.64 103.5 99.6 100.6 101.4 100.8 101.7 102.7 105.5 107.1 107.7 108.6 110088..33 110077..77 110088..00 24 1.64 148.8 145.6 149.3 151.2 146.3 148.5 146.0 148.8 149.2 152.6 152.2 150.8 152.0 25 1.37 190.2 185.6 184.6 186.6 190.5 191.9 192.6 195.3 194.3 194.7 192.1 191.6 191.6 32 2.74 159.6 160.4 160.2 160.0 160.6 159.7 160.9 160.0 158.0 160.1 159.0 157.5 158.3 26 Primary metals 33 6.57 95.2 98.4 97.5 99.3 98.2 97.9 94.5 94.4 94.1 92.7 91.5 88.1 90.8 92.7 27 Iron and steel 331.2 4.21 79.8 86.0 84.4 84.0 83.5 83.5 76.5 77.7 77.5 74.6 73.9 72.1 73.0 28 Fabricated metal products 34 5.93 137.6 132.8 134.9 135.5 136.5 138.7 140.6 140.0 139.5 140.7 139.0 141.0 141.0 140.3 29 Nonelectrical machinery 35 9.15 181.6 170.9 171.9 174.9 178.8 182.0 186.9 189.1 187.9 187.7 188.9 189.3 189.0 187.0 30 Electrical machinery 36 8.05 217.5 209.9 212.0 214.6 214.5 216.0 221.5 221.5 222.8 222.3 222.5 225.4 221.5 220.0 31 Transportation equipment 37 9.27 137.6 135.2 135.8 134.5 135.0 137.2 140.6 141.0 137.6 137.2 141.3 143.2 145.9 146.1 32 Motor vehicles and parts 371 4.50 165.7 164.4 165.8 161.9 163.0 165.3 169.0 169.6 162.4 161.7 170.8 171.7 175.9 172.6 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 111.2 107.7 107.5 108.8 108.6 110.8 113.8 113.9 114.2 114.1 113.6 116.4 117.7 121.2 34 Instruments 38 2.11 174.2 168.6 169.7 171.0 171.8 174.5 176.7 177.4 178.5 176.5 177.5 180.3 179.2 177.5 35 Miscellaneous manufactures 39 1.51 148.9 152.0 152.3 152.1 151.5 150.8 152.4 149.2 147.0 148.3 143.5 137.7 138.6 135.9 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 507.4 670.1 656.9 661.8 661.1 665.9 671.5 682.4 678.2 673.6 674.7 679.1 681.0 683.8 680.7 37 Final 390.9 517.0 505.0 509.6 509.0 514.0 518.1 525.9 522.3 519.7 521.3 525.8 527.6 528.1 529.0 277.5 348.3 345.3 347.7 347.8 349.5 350.9 353.2 347.4 345.4 346.7 350.1 349.9 350.3 350.6 113.4 168.7 159.7 161.9 161.2 164.4 167.2 172.8 174.9 174.4 174.5 175.7 177.7 177.8 178.5 111166..66 115533..22 115511..99 115522..22 115522..22 151.9 153.4 156.5 115555..99 153.8 153.5 153.3 153.4 155.7 151.6 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 1985 IItteemm Apr. May June July Aug. Sept. Oct.' Nov/ Dec.' Jan. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 986 1,000 1,605 1,802 1,774 1,819 1,590 1,508 1,481 1,436 1,613 1,627 1,676 ? 1-family 564 546 902 983 943 941 849 835 865 817 838 852 924 3 2-or-more-family 421 454 703 819 831 878 741 673 616 619 775 775 752 4 Started 1,084 1,062 1,703 1,949 1,787 1,837 1,730 1,590 1,669 1,564 1,600 1,630 1,841 1-family 705 663 1,067 1,163 1,118 1,077 996 962 1,009 979 1,043 1,112 1,065 6 2-or-more-family 379 400 635 786 669 760 734 628 660 585 557 518 776 7 Under construction, end of period1 682 720 1,003 1,087' 1,090' 1,098' 1,100' 1,091 1,088' 1,081 1,077 1,073 1.077 8 1-family 382 400 524 579' 585' 587' 582' 574' 568' 571 574 579 576 9 2-or-more-family 301 320 479 508' 505' 511' 518' 517 52W 510 503 495 501 10 Completed 1,266 1,005 1,390 1,661' 1,731' 1,718' 1,699' 1,681' 1,657' 1,614 1,587 1,635 1,691 II 1-family 818 631 924 996' 1,072' 1,045' 1,062' 1,035' 1,04c 972 1,001 985 1,084 12 2-or-more-family 447 374 466 665' 659' 673' 637' 646' 617' 642 586 650 607 13 Mobile homes shipped 241 240 296 287 295 298 301 302 282 302 291 282 273 Merchant builder activity in 1-family units 14 Number sold 436 413 622 645' 617' 636' 615 557' 67C 652 596 604 620 15 Number for sale, end of period1 278 255 304 327' 332' 338' 340' 343' 343 346 349 356 359 Price (thousands of dollars)2 Median 16 Units sold 68.8 69.3 75.5 79.6 81.4 80.5 80.7 82.0 81.3 80.1 82.5 78.3 84.5 17 Units sold 83.1 83.8 89.9 96.2 101.9 98.8 97.1 96.9 101.3 95.7 101.4 96.3 98.5 EXISTING UNITS (1-family) 18 Number sold 2,418 1,991 2,719 3,030' 2,97 (K 2,920' 2,79C 2,77(K 2,73C 2,740 2,830 2,870 3,000 Price of units sold (thousands of dollars)2 19 Median 66.1 67.7 69.8 72.1' 72.7' 73.4' 74.2' 73.5' 71.9' 71.9 71.9 72.1 73.8 20 Average 78.0 80.4 82.5 85.7' 85^ 87.2' 87^ 87.6' 85.4' 86.2 85.1 85.9 87.7 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 239,112 230,068 262,167 308,596 316,398 315,279 314,223 318,031 318,685 317,876 316,439 318,447 324,925 7? Private 185,761 179,090 211,369 254,057 261,182 257,789 258,245 261,165 260,871 261,181 260,261 262,204 267,877 73 Residential 86,564 74,808 111,727 136,577 138,401 136,418 137,818 138,926 137,106 135,191 132,643 131,452 133,627 24 Nonresidential, total 99,197 104,282 99,642 117,480 122,781 121,371 120,427 122,239 123,765 125,990 127,618 130,752 134,250 Buildings 25 Industrial 17,031 17,346 12,863 13,633 15,170 14,065 13,784 14,613 14,917 14,921 15,317 15,384 15,538 76 Commercial 34,243 37,281 35,787 47,352' 49,718' 48,947 48,436' 49,496 50,861' 53,536 54,634 56,779 59,636 77 Other 9,543 10,507 11,660 13,271 13,821 13,327 12,744 12,059 12,079 12,129 12,001 12,365 12,100 28 Public utilities and other 38,380 39,148 39,332 43,224' 44,072' 45,032 45,463' 46,071 45,908' 45,404 45,666 46,224 46,976 79 Public 53,346 50,977 50,798 54,539 55,216 57,490 55,979 56,866 57,814 56,695 56,179 56,242 57,047 30 Military 1,966 2,205 2.544 2,827 2,649 2,703 2,345 2,851 3,508 2,897 2,723 2,801 3,104 31 Highway 13,599 13,428 14,225 16,781 16,949 16,824 17,136 17,322 17,209 16,772 17,489 17,720 18,233 37 Conservation and development 5,300 5,029 4,822 4,518 4,356 4,492 4,520 4,520 4,890 4,599 5,044 4,598 4,825 33 Other 32,481 30,315 29,207 30,413 31,262 33,471 31,978 32,173 32,207 32,427 30,923 31,123 30,885 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing 3. Value of new construction data in recent periods may not be strictly Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of comparable with data in prior periods because of changes by the Bureau of the existing units, which are published by the National Association of Realtors. All Census in its estimating techniques. For a description of these changes see back and current figures are available from originating agency. Permit authoriza- Construction Reports (C-30-76-5), issued by the Bureau in July 1976. tions are those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • May 1985 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (at annual rate) 1984 1984 1985 1984 1985 Feb. Feb. June Sept Oct/ Nov. Dec Jan. Feb CONSUMER PRICES2 1 All items 3.2 4.5 3.0 2 Food -.5 3.9 3.7 3 Energy items .3 .1 -.7 4 All items less food and energy 4.8 5.3 3.5 5 Commodities 3.9 3.8 .9 6 Services 5.2 6.2 5.0 PRODUCER PRICES 7 Finished goods 2.3 6.1 -.4 .0 1.8 -.1 8 Consumer foods 5.2 15.2 -7.5 4.5 4.5 -.1 9 Consumer energy -3.9 -5.2 5.0 -19.7 5.7 1.4 10 Other consumer goods 2.4 5.6 2.5 .0 -.3 11 Capital equipment 2.3 3.9 2.3 .0 -.2 12 Intermediate materials3 2.3 4.2 -1.1 1.1 13 Excluding energy 2.9 4.1 .9 1.3 Crude materials 14 Foods 4.5 19.2 -1.7 12.0 3.7' 15 Energy -1.7 4.0 .4r -6.5' -.9 16 Other 14.0 14.3 -15.3 -10.7 -.5 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 11998844rr Q4 Ql Q2 Q3 Q4' GROSS NATIONAL PRODUCT 1 3,069.3 3,304.8 3,662.8 3,431.7 3,553.3 3,644.7 3,694.6 3,758.7 By source 2 Personal consumption expenditures 1,984.9 2,155.9 2,341.8 2,230.2 22,,227766..55 22,,333322..77 22,,336611..44 22,,339966..55 3 Durable goods 245.1 279.8 318.8 299.8 310.9 320.7 317.2 326.3 4 Nondurable goods 757.5 801.7 856.9 823.0 841.3 858.3 861.4 866.5 5 Services 982.2 1,074.4 1,166.1 1,107.5 1,124.4 1,153.7 1,182.8 1,203.8 6 Gross private domestic investment 414.9 471.6 637.8 540.0 623.8 627.0 662.8 637.8 7 Fixed investment 441.0 485.1 579.6 527.3 550.0 576.4 591.0 601.1 8 Nonresidential 349.6 352.9 425.7 383.9 398.8 420.8 435.7 447.7 9 Structures 142.1 129.7 150.4 136.6 142.2 150.0 151.4 157.9 10 Producers' durable equipment 207.5 223.2 275.3 247.3 256.7 270.7 284.2 289.7 11 Residential structures 91.4 132.2 153.9 143.4 151.2 155.6 155.3 153.5 12 Nonfarm 86.6 127.6 148.8 138.7 146.4 150.5 150.1 148.3 13 Change in business inventories -26.1 -13.5 58.2 12.7 73.8 50.6 71.8 36.6 14 Nonfarm -24.0 -3.1 49.6 14.1 60.6 47.0 63.7 27.2 15 Net exports of goods and services 19.0 -8.3 -64.2 -29.8 -51.5 -58.7 -90.6 -56.0 16 Exports 348.4 336.2 364.3 346.1 358.9 362.4 368.6 367.2 17 Imports 329.4 344.4 428.5 375.9 410.4 421.1 459.3 423.2 18 Government purchases of goods and services 650.5 685.5 747.4 691.4 704.4 743.7 761.0 780.5 19 Federal 258.9 269.7 295.4 266.3 267.6 296.4 302.0 315.7 20 State and local 391.5 415.8 452.0 425.1 436.8 447.4 458.9 464.8 By major type of product ?1 Final sales, total 3,095.4 3.318.3 3,604.6 33,,441199..00 33,,447799..55 33,,559944..11 33,,662222..88 33,,772222..11 V 1,276.7 1,355.7 1,542.9 1,423.9 1,498.0 1,544.8 1,549.1 1,579.8 73 Durable 499.9 555.3 655.6 607.4 632.3 647.9 654.7 687.7 74 Nondurable 776.9 800.4 887.3 816.5 865.7 896.9 894.4 892.1 75 1,510.8 1,639.3 1,763.3 1,681.3 1,713.7 1,742.6 1,783.3 1,813.7 26 Structures 281.7 309.8 356.5 326.5 341.6 357.2 362.1 365.2 7.7 Change in business inventories -26.1 -13.5 58.2 12.7 73.8 50.6 71.8 36.6 28 Durable goods -18.0 -2.1 30.4 14.5 34.9 18.2 41.7 26.7 29 Nondurable goods -8.1 -11.3 27.8 -1.7 38.9 32.4 30.1 9.9 30 MEMO: Total GNP in 1972 dollars 1,480.0 1,534.7 1,639.3 1,572.7 1,610.9 1,638.8 1,645.2 1,662.4 NATIONAL INCOME 31 2,446.8 2,646.7 2,960.4 2,766.5 2,873.5 2,944.8 2,984.9 3,038.3 32 Compensation of employees 1,864.2 1,984.9 2,173.2 2,055.4 2,113.4 2,159.2 2,191.9 2,228.1 33 Wages and salaries 1,568.7 1,658.8 1,804.1 1,715.4 1,755.9 1,793.3 1,819.1 1,848.2 34 Government and government enterprises 306.6 328.2 349.8 335.0 342.9 347.5 352.0 357.2 35 Other 1,262.2 1,331.1 1,454.2 1,380.4 1,413.0 1,445.8 1,467.1 1,490.9 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 111.1 121.7 154.4 131.9 154.9 149.8 153.7 159.1 40 Business and professional1 89.2 107.9 126.2 114.6 122.5 126.3 126.4 129.7 41 21.8 13.8 28.2 17.3 32.5 23.4 27.3 29.4 42 Rental income of persons2 51.5 58.3 62.5 60.4 61.0 62.0 63.0 64.1 43 Corporate profits1 159.1 225.2 286.2 260.0 277.4 291.1 282.8 293.5 44 Profits before tax3 165.5 203.2 236.2 225.5 243.3 246.0 224.8 230.6 45 Inventory valuation adjustment -9.5 -11.2 -5.7 -9.2 -13.5 -7.3 -.2 -1.6 46 Capital consumption adjustment 3.1 33.2 55.7 43.6 47.6 52.3 58.3 64.5 47 Net interest 260.9 256.6 284.1 258.9 266.8 282.8 293.5 293.4 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

A52 Domestic Nonfinancial Statistics • May 1985 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. Account 1982 1983 1984' Q4 Q1 Q2 Q3 PERSONAL INCOME AND SAVING Total personal income 2.584.6 2,744.2 3,012.1 2,836.5 2,920.5 2,984.6 3,047.3 2 Wage and salary disbursements 1.568.7 1,659.2 1.804.0 1.715.4 1,755.7 1,793.1 1,819.5 3 Commodity-producing industries 509.3 519.3 569.3 539.0 555.9 567.0 573.3 4 Manufacturing 382.9 395.2 433.9 411.9 424.6 432.2 436.4 5 Distributive industries 378.6 398.6 432.0 413.2 419.2 429.5 436.4 6 Service industries 374.3 413.1 452.9 428.2 437.9 449.3 457.3 7 Government and government enterprises 306.6 328.2 349.8 335.0 342.8 347.3 352.4 8 9 P O r t o h p e r r ie la to b r o s r ' i i n n c c o o m m e e 1 1 1 5 1 5 1 . . 5 1 1 1 7 2 3 1 . . 1 7 1 1 9 5 5 4 . . 5 4 1 13 8 1 2 . . 9 1 1 1 8 5 8 4 . . 1 9 1 1 9 4 3 9 . . 5 8 1 1 9 5 8 3 . . 1 7 10 Business and professional1 89.2 107.9 126.2 114.6 122.5 126.3 126.4 1 1 2 1 Re F n a ta r l m i 1 n come of persons2 2 5 1 1 . . 8 5 5 1 8 3 . . 3 8 2 6 8 2 . . 2 5 6 1 0 7 . . 4 3 3 6 2 1 . . 5 0 6 2 2 3 . . 0 4 2 6 7 3 . . 3 0 13 Dividends 66.5 70.3 77.7 72.8 75.0 77.2 78.5 14 Personal interest income 366.6 376.3 433.7 388.2 403.9 425.6 449.3 15 Transfer payments 376.1 405.0 416.7 408.8 411.3 415.2 418.6 16 Old-age survivors, disability, and health insurance benefits... 204.5 221.6 237.3 227.7 232.1 235.2 238.2 17 LESS: Personal contributions for social insurance 111.4 119.6 132.5 123.2 129.6 131.8 133.4 18 EQUALS: Personal income 2,584.6 2,744.2 3.012.1 2.836.5 2.920.5 2,984.6 3.047.3 19 LESS: Personal tax and nontax payments 404.1 404.2 435.3 407.9 418.3 430.3 440.9 20 EQUALS: Disposable personal income 2,180.5 2,340.1 2,576.8 2.428.6 2,502.2 2,554.3 2.606.4 21 LESS: Personal outlays 2,044.5 2,222.0 2,420.7 2,300.0 2.349.6 2,409.5 2,442.3 22 EQUALS: Personal saving 136.0 118.1 156.1 128.7 152.5 144.8 164.1 MEMO Per capita (1972 dollars) 23 Gross national product 6,369.7 6,543.4 6,926.1 6,681.4 6.829.4 6.933.2 6,943.2 24 Personal consumption expenditures 4,145.9 4,302.8 4,488.7 4,386.0 4.426.5 4.502.3 4,498.4 2 2 5 6 Sa D vi i n s g p o r s a a t b e le (p p er e c r e so n n t) a l income 4,55 6 5 . . 2 0 4,67 5 0. . 0 0 4,93 6 9 . .0 1 4,776 5 . . 0 3 4,86 6 5 . .0 1 4,930 5 . . 0 7 4,96 6 5 . . 3 0 GROSS SAVING 27 Gross saving. 408.8 437.2 552.3 485.7 543.9 551.0 556.4 28 Gross private saving 524.0 571.7 675.1 615.0 651.3 660.2 689.4 2 3 9 0 P U e n r d so is n tr a i l b u sa te v d in g c orporate profits' 1 2 3 9 6 . . 2 0 1 7 1 6 8 . . 5 1 1 1 1 5 5 6 . . 7 1 1 1 0 2 0 8. . 7 0 1 1 5 0 2 7 . . 5 0 1 1 1 4 5 4 . . 3 8 1 1 6 1 4 8 . . 1 4 31 Corporate inventory valuation adjustment. -9.5 -11.2 -5.7 -9.2 -13.5 -7.3 -.2 Capital consumption allowances 32 Corporate 221.8 231.2 246.2 236.4 239.9 244.1 248.1 33 Noncorporate 137.1 145.9 157.0 150.0 151.8 156.0 158.8 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit I -), national income and product accounts -115.3 -134.5 -122.8 -129.3 -107.4 -109.2 -133.0 36 Federal -148.2 -178.6 -175.7 -180.5 -161.3 -163.7 -180.6 37 State and local 32.9 44.1 53.0 51.2 53.9 54.5 47.6 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 39 Gross investment 408.3 437.7 544.4 480.9 546.1 542.0 543.4 40 Gross private domestic 414.9 471.6 637.8 540.0 623.8 627.0 662.8 41 Net foreign -6.6 -33.9 -93.4 -59.1 -77.7 -85.0 -119.4 42 Statistical discrepancy. -9.0 -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 11998822 11998833 11998844"" Q4 Ql' Q2' Q3 Q4P 11 Balance on current account -9,199 -41,563 -101,647 - - 1 1 7 5 , , 2 9 1 6 3 4 - -1 1 8 9 , , 6 6 1 6 6 9 - - 2 2 4 4 , , 7 3 0 8 4 0 - - 3 3 6 3 , , 1 5 9 9 0 9 - - 2 2 2 3 , , 4 6 6 7 1 9 3 Merchandise trade balance2 -36,469 -61,055 -107,435 -19,407 -25,813 -25,802 -32,941 -22,879 4 Merchandise exports 211,198 200,257 220,343 51,829 53,920 54,548 55,616 56,259 Merchandise imports -247,667 -261,312 -327,778 -71,236 -79,733 -80,350 -88,557 -79,138 6 Military transactions, net 195 515 -1,635 -273 -370 -404 -320 -542 7 Investment income, net3 27,802 23,508 18,115 5,119 7,744 3,455 2,876 4,039 8 Other service transactions, net 7,331 4,121 506 434 917 204 -352 -263 9 Remittances, pensions, and other transfers -2,635 -2,590 -2,946 -14,127 -717 -726 -693 -811 10 U.S. government grants (excluding military) -5,423 -6,060 -8,253 -2,398 -1,430 -1,431 -2,169 -3,223 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -6,143 -5,013 -5,460 -1,429 -2,037 -1,235 -1,440 --774488 12 Change in U.S. official reserve assets (increase, -) -4,965 -1,196 -3,130 -953 -657 -565 -799 -1,109 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,371 -66 -979 545 -226 -288 -271 -194 IS Reserve position in International Monetary Fund -2,552 -4,434 -995 -1,996 -200 -321 -331 -143 16 Foreign currencies -1,041 3,304 -1,156 498 -231 44 -197 -772 17 Change in U.S. private assets abroad (increase, -)3 -107,790 -43,281 -12,574 -12,461 742 -17,200 19,245 -15,362 18 Bank-reported claims -111,070 -25,391 -7,337 -8,239 1,955 -20,612 16,871 -5,551 19 Nonbank-reported claims 6,626 -5,333 5,566 -1,671 1,659 2,120 1,787 n.a. 20 U.S. purchase of foreign securities, net -8,102 -7,676 -4,761 -983 637 -820 -1,322 -3,257 21 U.S. direct investments abroad, net3 4,756 -4,881 -6,043 -1,568 -3,509 2,112 1,909 -6,554 22 Change in foreign official assets in the United States (increase, +) 3,318 5,339 2,998 6,555 -2,784 -345 -830 6,956 23 U.S. Treasury securities 5,728 6,989 4,644 2,603 -288 -310 -577 5,819 24 Other U.S. government obligations -694 -487 12 417 -8 147 85 -212 25 Other U.S. government liabilities4 382 199 333 161 242 448 -153 -205 26 Other U.S. liabilities reported by U.S. banks -1,747 433 676 3,498 -2,131 349 302 2,156 27 Other foreign official assets5 -351 -1,795 -2,667 -124 -599 -979 -487 -602 28 Change in foreign private assets in the United States (increase, +)3 91,863 76,383 89,800 27,249 18,444 40,750 3,662 26,945 29 U.S. bank-reported liabilities 65,922 49,059 27,571 22,325 8,775 20,789 -5,410 3,417 30 U.S. nonbank-reported liabilities -2,383 -1,318 5,529 -228 4,404 4,055 -2,930 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 7,062 8,731 22,487 1,673 1,358 6,477 5,121 9,531 32 Foreign purchases of other U.S. securities, net 6,396 8,612 13,036 1,134 1,516 587 1,609 9,325 33 Foreign direct investments in the United States, net3 14,865 11,299 21,177 2,345 2,391 8,842 5,272 4,672 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 32,916 9,331 30,015 -1,748 5,961 3,299 13,761 6,997 36 22,,665577 --119955 --114400 --22,,441100 22,,774488 37 Statistical discrepancy in recorded data before seasonal adjustment 32,916 9,331 30,015 -4,405 6,156 3,439 16,171 4,249 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -4,965 -1,196 -3,131 -953 -657 -566 -799 -1,110 39 Foreign official assets in the United States (increase, +) 2,936 5,140 2,665 6,394 -3,026 -793 -677 7,161 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 7,291 -8,639 -4,198 -1,640 -2,447 -2,170 -494 913 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 593 205 187 84 41 44 45 58 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 • May 1985 3.11 U. S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1984 1985 IItteemm 11998811 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 233,677 212,193 200,486 19,154 18,123 18,210 18,411 18,395 19,142 19,401 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 261,305 243,952 258,048 31,334 26,866 28,409 26,783 27,331 25,933 28,297 3 Trade balance -27,628 -31,759 -57,562 -12,180 -8,743 -10,199 -8,372 -8,936 -6,791 -8,896 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Total 30,075 33,958 33,747 34,760 34,306 34,570 34,727 34,934 34,380 34,284 2 Gold stock, including Exchange Stabilization Fund1 11,151 11,148 11,121 11,098 11,097 11,096 11,096 11,096 11,095 11,093 3 Special drawing rights2-3 4,095 5,250 5,025 5,652 5,554 5,539 5,693 5,641 5,693 5,781 4 Reserve position in International Monetary Fund2 5,055 7,348 11,312 11,820 11,619 11,618 11,675 11,541 11,322 11,109 5 Foreign currencies4 9,774 10,212 6,289 6,190 6,036 6,317 6,263 6,656 6,270 6,301 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Deposits 505 328 190 242 206 270 392 253 244 331 Assets held in custody 2 U.S. Treasury securities1 104,680 112,544 117,670 117,130 115,678 115,542 117,433 118,267 117,330 115,179 3 Earmarked gold2 14,804 14,716 14,414 14,258 14,256 14,260 14,265 14,265 14,261 14,260 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 1985 AAsssseett aaccccoouunntt 11998811 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan.'' All foreign countries 1 Total, all currencies 462,847 469,712 477,090 465,902 462,486 454,082 448,360' 452,806' 452,012 445,367 7 Claims on United States 63,743 91,805 115,542 118,484 117,078 114,160 109,131' 112,676' 113,210 115,280 Parent bank 43,267 61,666 82,026 82,885 82,437 80,035 75,575' 77,820' 77,926 79,080 4 Other banks in United States1 1 13,987 13,209r 13,125 12,591 13,553 13,915 13,932 Nonbanks1 21,612 21,432' 21,000 20,965 21,303 21,369 22,268 6 Claims on foreigners 378,954 358,493 342,689 327,298 324,474 319,375 319,097 319,462' 318,743 309,744 7 Other branches of parent bank 87,821 91,168 96,004 91,410 93,507 92,646 90,821 91,319 94,794 87,532 8 Banks 150,763 133,752 117,668 107,471 103,346 101,567' 102,254' 103,037 100,296 99,992 9 Public borrowers 28,197 24,131 24,517 23,291 22,654 22,568' 23,054' 22,914 22,860 22,520 10 Nonbank foreigners 112,173 109,442 107,785 105,126 104,967 102,594' 102,968' 102,192' 100,793 99,700 11 Other assets 20,150 19,414 18,859 20,120 20,934 20,547 20,132 20,668' 20,059 20,343 12 Total payable in U.S. dollars 350,735 361,982 371,508 357,598 352,807 346,929 340,507' 345,523' 349,349' 343,494 13 Claims on United States 62,142 90,085 113,436 116,145 114,754 111,677 106,505' 110,303' 111,243 112,907 14 Parent bank 42,721 61,010 80,909 81,664 81,291 78,847 74,205' 76,625' 77,046 78,154 15 Other banks in United States1 1 13,674 12,890' 12,769 12,338 13,355 13,745 13,733 16 Nonbanks1 20,807 20,573' 20,061 19,962 20,323' 20,452 21,020 17 Claims on foreigners 276,937 259,871 247,406 230,840 227,132 224,603 223,355 224,229' 227,336 220,186 18 Other branches of parent bank 69,398 73,537 78,431 73,653 75,969 75,509 73,472 74,606 78,356 72,507 19 Banks 122,110 106,447 93,332 82,400 77,402 76,566' 76,911' 77,083 76,840 75,865 70 Public borrowers 22,877 18,413 17,890 17,186 16,783 16,946' 17,302 17,359 17,148 17,072 21 Nonbank foreigners 62,552 61,474 60,977 57,601 56,978 55,582' 55,652' 55,181' 54,992 54,742 22 Other assets 11,656 12,026 10,666 10,613 10,921 10,649 10,647 10,991' 10,770 10,401 United Kingdom 23 Total, all currencies 157,229 161,067 158,732 155,643 154,250 147,696 147,562' 149,377' 144,377 146,120 24 Claims on United States 11,823 27,354 34,433 33,697 31,691 29,333 28,952' 29,496^ 27,667 28,717 25 Parent bank 7,885 23,017 29,111 27,863 26,054 23,772 23,283' 23,767' 21,854 22,230 26 Other banks in United States1 1 1,273 1,087 1,327 1,214 1,484 1,429 1,540 27 Nonbanks1 4,561 4,550 4,234 4,455 4,245 4,384 4,947 28 Claims on foreigners 138,888 127,734 119,280 116,740 117,255 113,299 113,524 114,270 111,828 112,340 29 Other branches of parent bank 41,367 37,000 36,565 37,728 39,313 37,499 37,638 37,401 37,953 36,423 30 Banks 56,315 50,767 43,352 40,980 39,906 39,133 38,696 39,262 37,443 39,063 31 Public borrowers 7,490 6,240 5,898 5.786 5,510 5,330 5,441 5,424 5,334 5,345 32 Nonbank foreigners 33,716 33,727 33,465 32,246 32,526 31,337 31,749 32,183 31,098 31,509 33 Other assets 6,518 5,979 5,019 5,206 5,304 5,064 5,086 5,611' 4,882 5,068 34 Total payable in U.S. dollars 115,188 123,740 126,012 120,488 118,337 114,358 113,437' 114,895' 112,801 112,790 35 Claims on United States 11,246 26,761 33,756 32,587 30,641 28,282 27,917' 28,604' 26,860 27,622 36 Parent bank 7,721 22.756 28,756 27,239 25,509 23,323 22,825' 23,372' 21,487 21,894 37 Other banks in United States' 1 1,149 950 1,195 1,113 1,437 1,363 1,496 38 Nonbanks1 4,199 4,182 3,764 3,979 3,795 4,010 4,232 39 Claims on foreigners 99,850 92,228 88,917 84,729 84,553 83,082 82,456 82,977 82,945 82,217 40 Other branches of parent bank 35,439 31,648 31,838 31,762 33,623 32,704 32,461 32,675 33,607 31,955 41 Banks 40,703 36,717 32,188 29,444 27,961 27,986 27,093 27,290 26,805 27,465 47 Public borrowers 5,595 4,329 4,194 4,288 3,983 3,879 4,063 4,094 4,030 4,021 43 Nonbank foreigners 18,113 19,534 20,697 19,235 18,986 18,513 18,839 18,918 18,503 18,776 44 Other assets 4,092 4,751 3,339 3,172 3,143 2,994 3,064 3,314 2,996 2,951 Bahamas and Caymans 45 Total, all currencies 149,108 145,156 152,083 147,912 147,319 144,578 138,798 141,448 146,641 141,947 46 Claims on United States 46,546 59,403 75,309 78,252 78,882 77,013 71,750 75,522 77,150 76,713 47 Parent bank 31,643 34,653 48,720 50,285 51,384 50,078 45,480 48,070 49,303 48,732 4 4 9 8 N Ot o h n e b r a b n a k n s k 1 s in United States1 1 A IV11 1 11 6 , , 9 0 3 3 2 5 1 1 5 1 , , 9 5 5 4 8 0 1 11 5 , , 0 8 7 6 2 3 1 1 5 0 , , 5 7 5 1 4 6 1 1 1 6 , , 2 1 8 6 3 9 1 1 1 6 , ,0 7 5 9 2 5 1 11 6 , , 5 4 7 0 2 9 50 Claims on foreigners 98,057 81,450 72,868 65,620 64,263 63,545 63,010 61,996 65,575 61,469 51 Other branches of parent bank 12,951 18,720 20,626 15,567 16,093 15,639 15,117 13,837 17,682 14,447 52 Banks 55,151 42,699 36,842 32,007 30,505 30,075 30,259 30,516 30,214 29,319 53 Public borrowers 10,010 6,413 6,093 6,000 5,883 6,119 6,040 6,060 6,077 6,241 54 Nonbank foreigners 19,945 13,618 12,592 12,046 11,782 11,712 11,594 11,583 11,602 11,462 55 Other assets 4,505 4,303 3,906 4,040 4,174 4,020 4,038 3,930 3,916 3,765 56 Total payable in U.S. dollars 143,743 139,605 145,641 141,950 141,139 138,693 132,834 136,049' 141,392 137,199 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 • May 1985 3.14 Continued 1984 1985 lyoZ iyoi July Aug. Sept. Oct. Nov. Dec. Jan.'' All foreign countries 57 Total, all currencies 462,847 469,712 477,090 465,902 462,486 454,082 448,360^ 452,806' 452,012 445,367 58 Negotiable CDs2 n.a. n.a. n.a. 41,297 41,656 39,866 38,520 37,915 37,725 38,804 59 To United States 137,767 179,015 188,070 155,231 152,635 147,003 139,402 138,354 146,804 143,923 60 Parent bank 56,344 75,621 81,261 78,067 77,160 75,026 74,756 70,339 78,110 75,780 61 Other banks in United States 19,197 33,405 29,453 22,365 19,693 20,120 18,913 18,575' 18,378 18,132 62 Nonbanks 62,226 69,989 77,356 54,799 55,782 51,857 45,733 49,440' 50,316 50,011 63 To foreigners 305,630 270,853 269,685 248,651 246,565 245,746 248,185 253,956 246,794 241,479 64 Other branches of parent bank 86,396 90,191 90,615 89,081 90,747 90,426 89,530 90,729 93,206 87,844 65 Banks 124,906 96,860 92,889 80,082 78,796 77,471 82,226 86,815 78,235 79,286 66 Official institutions 25,997 19,614 18,896 21,261 20,238 21,566 19,501 20,883 20,241 19,615 67 Nonbank foreigners 68,331 64,188 68,845 58,227 56,784 56,283 56,928 55,529 55,112 54,734 68 Other liabilities 19,450 19,844 19,335 20,723 21,630 21,467 22,253' 22,581' 20,689 21,161 69 Total payable in U.S. dollars 364,447 379,270 388,291 374,735 370,356 364,247 356,418' 361,713' 365,626 358,142 70 Negotiable CDs2 n.a. n.a. n.a. 38,990 39,610 37,629 36,102 35,608 35.227 36,295 ;i To United States 134,700 175,528 184,305 150,973 148,102 142,482 135,131 134,159 142,792 140,052 72 Parent bank 54,492 73,295 79,035 75,542 74,574 72,254 72,245 67,814 75,625 73,439 73 Other banks in United States 18,883 33,040 28,936 21,749 19,019 19,457 18,259 18,026' 17,904 17,595 74 Nonbanks 61,325 69,193 76,334 53,682 54,509 50,771 44,627 48,319' 49,263 49,018 75 To foreigners 217,602 192,510 194,139 174,414 171,880 173,610 174,090 180,824 177,580 171,545 7 I 6 I O Ba th n e k r s branches of parent bank 7 6 9 9 , , 5 2 9 9 4 9 5 7 7 2 , , 4 9 6 2 3 1 5 7 7 3 , , 0 5 2 2 2 2 4 7 4 1 , , 8 4 5 3 8 8 4 7 2 3 , , 3 5 7 0 3 1 4 7 2 3 , , 7 4 7 1 2 2 4 7 6 2 , , 2 2 1 0 8 4 5 7 0 4 , , 5 5 0 5 2 2 4 7 5 7 , , 1 2 2 2 3 2 4 7 4 2 , , 9 7 0 7 0 0 78 Official institutions 20,288 15,055 13,855 16,117 15,476 16,850 14,850 16,068 15,733 14,994 79 Nonbank foreigners 48,421 47,071 51,260 42,001 40,530 40,576 40,818 39,702 39,502 38,881 80 Other liabilities 12,145 11,232 9,847 10,358 10,764 10,526 11,095' 11,122' 10,027 10,250 United Kingdom 81 Total, all currencies 157,229 161,067 158,732 155,643 154,250 147,696 147,562' 149,377' 144,377 146,120 82 Negotiable CDs2 n.a. n.a. n.a. 37,998 38,265 36,600 34,948 34,269 34,413 35,455 83 To United States 38,022 53,954 55,799 29,682 29,667 27,280 26,558 25,338 25,250 27,757 84 Parent bank 5,444 13,091 14,021 16,730 18,127 16,130 16,598 15,116 14,651 16,714 85 Other banks in United States 7,502 12,205 11,328 4,277 3,548 3,451 3,388 3,002' 3,110 3,556 86 Nonbanks 25,076 28,658 30,450 8,675 7,992 7,699 6,572 7,220' 7,489 7,487 87 To foreigners 112,255 99,567 95,847 80,261 78,469 75,901 77,985 81,217 77,424 75,039 88 Other branches of parent bank 16,545 18,361 19,038 21,459 22,252 21,536 21,023 20,846 21,631 20,199 89 Banks 51,336 44,020 41,624 31,435 30,735 28,996 32,436 34,739 30,436 31,216 90 Official institutions 16,517 11,504 10,151 11,301 10,480 10,625 9,650 10,505 10,154 9,084 91 Nonbank foreigners 27,857 25,682 25,034 16,066 15,002 14,744 14,876 15,127 15,203 14,540 92 Other liabilities 6,952 7,546 7,086 7,702 7,849 7,915 8,071' 8,553' 7,290 7,869 93 Total payable in U.S. dollars 120,277 130,261 131,167 126,294 124,260 119,337 118,103' 119,287' 117,489 117,188 94 Negotiable CDs2 n.a. n.a. n.a. 36,757 37,219 35,398 33,703 33,168 33,070 34,084 95 To United States 37,332 53,029 54,691 28,349 28,027 25,738 25,178 24,024 24,105 26,587 96 Parent bank 5,350 12,814 13,839 16,390 17,701 15,679 16,209 14,742 14,339 16,349 97 Other banks in United States 7,249 12,026 11,044 4,018 3,244 3,131 3,144 2,792' 2,965 3,407 98 Nonbanks 24,733 28,189 29,808 7,941 7,082 6,953 5,825 6,490' 6,801 6,831 99 To foreigners 79,034 73,477 73,279 57,495 55,337 54,590 55,482 58,163 56,923 52,954 100 Other branches of parent bank 12,048 14,300 15,403 17,472 18,384 18,175 17,600 17,562 18,294 16,940 101 Banks 32,298 28,810 29,320 18,197 16,984 16,015 18,309 20,262 18,356 17,889 102 Official institutions 13,612 9,668 8,279 9,610 8,920 9,375 8,306 9,072 8,871 7,748 103 Nonbank foreigners 21,076 20,699 20,277 12,216 11,049 11,025 11,267 11,267 11,402 10,377 104 Other liabilities 3,911 3,755 3,197 3,693 3,677 3,586 3,740' 3,932' 3,391 3,563 Bahamas and Caymans 105 Total, all currencies 149,108 145,156 152,083 147,912 147,319 144,578 138,798 141,448 146,641 141,947 106 Negotiable CDs2 n.a. n.a. n.a. 965 905 788 878 898 615 734 107 To United States 85,759 104,425 111,299 106,338 103,915 100,682 95,084 95,831 102,804 98,657 108 Parent bank 39,451 47,081 50,980 45,098 42,373 42,064 42,850 40,516 47,161 44,303 109 Other banks in United States 10,474 18,466 16,057 16,498 14,742 15,459 14,143 14,155 13,922 13,318 110 Nonbanks 35,834 38,878 44,262 44,742 46,800 43,159 38,091 41,160 41,721 41,036 111 To foreigners 60,012 38,274 38,445 37,828 39,598 40,213 39,855 41,747 40,302 39,712 112 Other branches of parent bank 20,641 15,796 14,936 12,381 14,446 15,283 14,823 16,455 16,782 16,014 113 Banks 23,202 10,166 11,876 12,635 12,200 11,978 13,059 13,986 12,397 12,212 114 Official institutions 3,498 1,967 1,919 2,427 2,674 3,028 2,211 2,376 2,054 2,169 115 Nonbank foreigners 12,671 10,345 11,274 10,385 10,278 9,924 9,762 8,930 9,069 9,317 116 Other liabilities 3,337 2,457 2,339 2,781 2,901 2,895 2,981 2,972 2,920 2,844 117 Total payable in U.S. dollars 145,284 141,908 148,278 143,961 143,294 140,902 135,143 137,712 143,420 138,316 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 1985 IItteemm 11998822 11998833 July Aug. Sept. Oct. Nov/ Dec.'' Jan.'' 1 Total1 172,718 177,950 174,492 177,276 173,407 176,177 178,158 180,512 176,412 By type 2 Liabilities reported by banks in the United States2 24,989 25,534 25,869 26,381 24,038 26,893 25,789 26,194 23,019 3 U.S. Treasury bills and certificates3 46,658 54,341 51,974 54,022 54,627 55,780 59,570 59,976 56,662 U.S. Treasury bonds and notes 4 Marketable 67,733 68,514 69,075 70,441 68,471 67,647 67,003 68,910 71,436 5 Nonmarketable4 8,750 7,250 6,600 5,800 5,800 5,800 5,800 5,800 5,800 6 U.S. securities other than U.S. Treasury securities5 24,588 22,311 20,974 20,632 20,471 20,057 19,996 19,632 19,495 By area 7 Western Europe' 61,298 67,645 68,749 70,399 68,091 68,682 70,384 69,680 68,043 8 Canada 2,070 2,438 1,250 1,434 1,069 1,321 1,466 1,528 1,491 9 Latin America and Caribbean 6,057 6,248 6,993 8,170 7,053 8,109 8,894 8,643 7,406 10 Asia 96,034 92,572 90,391 90,464 90,403 91,491 90,047 93,901 92,981 11 Africa 1,350 958 970 838 897 967 1,316 1,291 1,120 12 Other countries6 5,909 8,089 6,139 5,971 5,894 5,607 6,051 5,469 5,371 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.? 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 3,6% 3,925 4 Other claims 1,582 3,456 4,501 5,010 5,344 5,3i0 6,811 5 Claims of banks' domestic customers' 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 • May 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 1985 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998811AA 11998822 11998833 July Aug. Sept. Oct. Nov/ Dec. Jan.P 1 All foreigners 243,889 307,056 369,607 398,282 396,436 398,598 388,951 398,481 405,372 401,059 2 Banks' own liabilities • 163,817 227,089 279,087 302,690 296,595 299,732 290,282 296,833 305,298 303,894 3 Demand deposits 19,631 15,889 17,470 16,355 16,229 17,198 16,490 17,448 19,538 18,561 4 Time deposits' 29,039 68,797 90,632 109,419 107,604 111,901 109,612 112,678 110,299 114,311 5 Other2 17,647 23,184 25,874 25,711 23,630 22,087 24,423 23,642 26,332 23,707 6 Own foreign offices3 97,500 119,219 145,111 151,205 149,132 148,546 139,758 143,065 149,129 147,315 7 Banks' custody liabilities4 80,072 79,967 90,520 95,593 99,842 98,866 98,669 101,648 100,074 97,165 8 U.S. Treasury bills and certificates5 55,315 55,628 68,669 71,244 74,148 73,160 73,295 76,531 75,838 73,196 9 Other negotiable and readily transferable instruments6 18,788 20,636 17,467 19,358 20,567 20,833 20,281 19,703 18,775 18,056 10 Other 5,970 3,702 4,385 4,990 5,127 4,873 5,094 5,414 5,460 5,913 11 Nonmonetary international and regional organizations7 2,721 4,922 5,957 5,344 5,748 6,279 4,801 5,831 4,083 6,929 12 Banks' own liabilities 638 1,909 4,632 2,612 1,960 3,305 2,053 2,779 1,644 3,571 13 Demand deposits 262 106 297 142 325 209 144 354 263 419 14 Time deposits' 58 1,664 3,584 2,213 1,446 2,526 1,513 2,114 1,092 2,672 15 Other2 318 139 750 257 189 570 396 311 288 480 16 Banks' custody liabilities4 2,083 3,013 1,325 2,732 3,788 2,975 2,748 3,052 2,440 3,358 17 U.S. Treasury bills and certificates 541 1,621 463 1,709 2,722 1,834 1,455 11,,444488 916 11,,992211 18 Other negotiable and readily transferable instruments6 1,542 1,392 862 1,023 1,067 1,140 1,292 1,604 1,524 11,,442299 19 Other 0 0 0 0 0 0 0 0 0 88 20 Official institutions8 79,126 71,647 79,876 77,843 80,403 78,665 82,673 85,359 86,169 79,681 21 Banks' own liabilities 17,109 16,640 19,427 18,504 18,222 16,274 19,247 18,748 19,062 16,699 22 Demand deposits 2,564 1,899 1,837 1,875 2,003 1,969 1,725 2,133 1,823 1,832 23 Time deposits' 4,230 5,528 7,318 8,028 8,060 7,877 8,695 9,457 9,387 8,161 24 Other2 10,315 9,212 10,272 8,601 8,158 6,429 8,828 7,159 7,852 6,706 25 Banks' custody liabilities4 62,018 55,008 60,448 59,338 62,181 62,391 63,426 66,611 67,108 62,982 26 U.S. Treasury bills and certificates5 52,389 46,658 54,341 51,974 54,022 54,627 55,780 59,570 59,976 5566,,666622 27 Other negotiable and readily transferable instruments6 9,581 8,321 6,082 7,356 8,149 7,746 7,626 7,010 7,038 6,257 28 Other 47 28 25 9 10 18 20 31 94 63 29 Banks9 136,008 185,881 226,887 249,537 243,552 246,077 233,654 238,349 246,823 243,808 30 Banks' own liabilities 124,312 169,449 205,347 224,222 218,081 221,185 209,529 214,783 223,975 221,663 31 Unaffiliated foreign banks 26,812 50,230 60,236 73,017 68,949 72,640 69,771 71,718 74,847 74,348 32 Demand deposits 11,614 8,675 8,759 8,174 7,884 8,453 8,389 8,528 10,522 9,575 33 Time deposits' 8,720 28,386 37,439 48,663 46,901 49,763 46,755 47,703 47,046 48,910 34 Other2 6,477 13,169 14,038 16,180 14,164 14,424 14,627 15,488 17,278 15,863 35 Own foreign offices3 97,500 119,219 145,111 151,205 149,132 148,546 139,758 143,065 149,129 147,315 36 Banks' custody liabilities4 11,696 16,432 21,540 25,315 25,471 24,892 24,124 23,566 22,848 22,145 37 U.S. Treasury bills and certificates 1,685 5,809 10,178 13,022 12,766 12,234 11,828 11,409 10,927 10,512 38 Other negotiable and readily transferable instruments6 4,400 7,857 7,485 7,867 8,172 8,421 7,802 7,360 7,156 6,422 39 Other 5,611 2,766 3,877 4,426 4,534 4,236 4,494 4,797 4,766 5,211 40 Other foreigners 26,035 44,606 56,887 65,558 66,733 67,576 67,824 68,942 68,296 70,640 41 Banks' own liabilities 21,759 39,092 49,680 57,351 58,332 58,968 59,453 60,523 60,618 61,960 42 Demand deposits 5,191 5,209 6,577 6,163 6,017 6,567 6,232 6,433 6,929 6,735 43 Time deposits 16,030 33,219 42,290 50,515 51,195 51,735 52,648 53,405 52,774 54,567 44 Other2 537 664 813 672 1,120 665 573 685 914 658 45 Banks' custody liabilities4 4,276 5,514 7,207 8,207 8,401 8,609 8,372 8,419 7,678 8,680 46 U.S. Treasury bills and certificates 699 1,540 3,686 4,540 4,639 4,465 4,232 4,103 4,020 4,101 47 Other negotiable and readily transferable instruments6 3,265 3,065 3,038 3,111 3,180 3,525 3,560 3,730 3,058 3,948 48 Other 312 908 483 556 582 619 580 586 601 631 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,747 14,307 10,346 10,904 11,415 11,048 10,714 10,437 10,476 9,277 • 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 1985 AArreeaa aanndd ccoouunnttrryy 11998811AA 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan.? 1 Total 243,889 307,056 369,607 398,282 396,436 398,598 388,951 398,481'' 405,372' 401,059 2 Foreign countries 241,168 302,134 363,649 392,938 390,688 392,319 384,151 392,650' 401,288' 394,129 3 Europe 91,275 117,756 138,072 152,759 150,785 147,244 146,413 149,577' 151,734' 148,847 4 Austria 596 519 585 668 758 693 744 627 615 734 5 Belgium-Luxembourg 4,117 2,517 2,709 4,848 4,789 4,278 4,093 3,613 4,114 4,007 6 Denmark 333 509 466 429 408 341 337 434 438 452 7 Finland 296 748 531 947 489 638 407 487 418 425 8 France 8,486 8,171 9,441 12,031 11,539 11,547 11,641 11,935' 12,701 11,907 9 Germany 7,645 5,351 3,599 3,973 3,758 3,036 3,331 3,405' 3,351' 3,582 10 Greece 463 537 520 600 566 567 609 602 699 616 11 Italy 7,267 5,626 8,462 6,960 8,356 8,266 8,976 11,056 10,757 9,657 1? Netherlands 2,823 3,362 4,290 5,615 5,116 5,239 4,421 5,077 4,799 4,663 13 Norway 1,457 1,567 1,673 1,624 2,026 1,912 1,895 1,693 1,548 1,717 14 Portugal 354 388 373 440 539 434 540 552 597 620 15 Spain 916 1,405 1,603 1,825 1,971 1,984 1,905 1,873 2.082' 2,016 16 Sweden 1,545 1.390 1,799 1,833 2,095 2,008 1,945 1,839 1,604' 2,089 17 Switzerland 18,716 29,066 32,246 33,330 32,919 32,995 32,461 31,494' 31,126' 30,926 18 Turkey 518 296 467 340 354 320 557 457 584' 495 19 United Kingdom 28,286 48,172 60,683 69,767 67,976 65,445 65,384 66,944 67,894' 68,008 20 Yugoslavia 375 499 562 525 435 514 579 565 602 545 21 Other Western Europe1 6,541 7,006 7,403 6,539 6,114 6,247 6,062 6,387' 7,183' 5,712 77 U.S.S.R 49 50 65 31 47 41 50 54 79 96 23 Other Eastern Europe2 493 576 596 435 532 738 476 481' 544' 580 24 Canada 10,250 12,232 16,026 19,221 18,170 17,536 16,767 16,549' 15,96(K 16,233 ?5 Latin America and Caribbean 85,223 114,163 140,088 149,541 150,972 152,069 145,771 149,574' 153,292' 152,614 76 Argentina 2,445 3,578 4,038 4,439 4,411 4,384 4,484 4,607' 4,424 4,522 77 Bahamas 34,856 44,744 55,818 60,075 60,077 58,321 52,912 55,102' 56,320' 56,759 28 Bermuda 765 1,572 2,266 2,505 2,763 3,177 3,043 3,222' 2,370' 2,704 29 Brazil 1,568 2,014 3,168 4,120 4,697 4,427 4,714 4,978 5.332' 4,967 30 British West Indies 17,794 26,381 34,545 33,984 33,789 35,926 34,419 34,336 36,914' 35,202 31 Chile 664 1,626 1,842 2,176 2,070 1,874 2,052 2,185 2,001 1,944 32 Colombia 2,993 2,594 1,689 1,801 1,791 1,957 2,022 2,057 2,514 2,360 33 Cuba 9 9 8 7 7 8 8 8 10 26 34 Ecuador 434 455 1,047 845 951 931 924 1,029 1,092 912 35 Guatemala .' 479 670 788 811 831 810 855 884 896 920 36 Jamaica 87 126 109 116 126 180 122 110 186 194 37 Mexico 7,235 8,377 10,392 11,733 12,268 12,869 12,466 13,422' 12,691' 13,245 38 Netherlands Antilles 3,182 3,597 3,879 4,253 4,261 4,179 4,187 4,180 4,153' 4,388 39 Panama 4,857 4,805 5,924 6,664 6,506 6,811 6,578 6,847' 6,928 6,869 40 Peru 694 1,147 1,166 1,278 1,273 1,343 1,304 1,258 1,247 1,152 41 Uruguay 367 759 1,244 1,302 1,319 1,418 1,361 1,309 1,394 1,485 4? Venezuela 4,245 8,417 8,632 9,684 10,046 9,615 10,367 10,013' 10,545' 10,667 43 Other Latin America and Caribbean 2,548 3,291 3,535 3,749 3,786 3,839 3,952 4,027 4,275' 4,300 44 49,822 48,716 58,570 61,884 61,559 66,397 66,028 67,182 71,127' 67,386 China 45 Mainland 158 203 249 644 671 876 861 844 1,153 1,078 46 Taiwan 2,082 2,761 4,051 4,891 4,799 4,970 5,041 5,355 4,976 5,098 47 Hong Kong 3,950 4,465 6,657 6,117 6,110 6,977 6,236 6,535 7,240 7,414 48 India 385 433 464 621 800 644 616 606 507' 554 49 Indonesia 640 857 997 911 1,137 939 1,339 884 1,033' 1,136 50 Israel 592 606 1,722 804 726 750 2,017 1,023 1,268 1,003 51 Japan 20,750 16,078 18,079 19,442 19,792 21,310 19,644 20,750 20,929 21,663 5? 2,013 1,692 1,648 1,393 1,641 1,572 1,552 1,609 1,691 1,561 S3 874 770 1,234 976 1,084 1,020 1,097 1,252 1,396' 1.637 54 Thailand 534 629 747 779 782 741 980 1,458 1,257 1,161 55 Middle-East oil-exporting countries3 12,992 13,433 12,976 14,792 13,200 13,754 13,890 13,436 16,781' 15,969 56 Other Asia 4,853 6,789 9,748 10,515 10,815 12,844 12,755 13,432 12,896' 9,113 57 Africa 3,180 3,124 2,827 3,145 3,052 3,018 3,329 3,492 3,511' 3,431 58 Egypt 360 432 671 858 743 629 763 739 757 798 59 Morocco 32 81 84 128 119 136 115 117 118 120 60 South Africa 420 292 449 409 350 318 459 460 328 376 61 Zaire 26 23 87 99 101 148 141 163 153' 76 62 Oil-exporting countries4 1,395 1,280 620 706 775 821 998 1,034 1,189' 1,188 63 Other Africa 946 1,016 917 946 964 966 852 978 966' 872 64 Other countries 1,419 6,143 8,067 6,389 6,150 6,055 5,844 6,277 5,665 5,618 65 Australia 1,223 5,904 7,857 6,095 5,749 5,687 5,464 5,598 5,286 5,242 66 All other 196 239 210 294 401 368 379 679 379 376 67 Nonmonetary international and regional organizations 2,721 4,922 5,957 5,344 5,748 6,279 4,801 5,831 4,083 6,929 68 International 1,661 4,049 5,273 4,740 4,973 5,411 4,086 5,055 3,376 6,165 69 Latin American regional 710 517 419 431 445 488 518 593 587 600 70 Other regional5 350 357 265 173 330 381 1% 183 120 165 • 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 • May 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 1985 AArreeaa aanndd ccoouunnttrryy 11998811AA 11998822 11998833 July Aug. Sept. Oct. Nov. Dec. Jan.? 1 Total 251,589 355,705 391,312 404,168 396,232 393,959 383,444 384,517r 398,611 386,664 2 Foreign countries 251,533 355,636 391,148 403,959 396,034 393,888 382,762 383,954' 397,936 385,740 3 Europe 49,262 85,584 91,927 102,311 100,084 98,173 95,370 97,812r 97,906 95,984 4 Austria 121 229 401 636 581 572 521 532' 446 371 5 Belgium-Luxembourg 2,849 5,138 5,639 6,108 6,156 6,286 5,363 4,988' 4,768 4,521 6 Denmark 187 554 1,275 1,189 1,088 1,057 544 520 648 589 7 Finland 546 990 1,044 928 872 882 887 1,098' 896 818 8 France 4,127 7,251 8,766 9,732 9,985 9,094 8,822 9,299' 9,081 8,617 9 Germany 940 1,876 1,284 1,142 1,257 1,220 1,097 1,261 1,294 960 10 Greece 333 452 476 979 974 1,086 929 819' 817 894 11 Italy 5,240 7,560 9,018 8,331 7,832 7,803 7,820 8,854' 9,079 8,042 12 Netherlands 682 1,425 1,267 1,811 1,440 1,470 1,190 1,229 1,351 1,481 13 Norway 384 572 690 648 649 649 676 602 675 651 14 Portugal 529 950 1,114 1,503 1,433 1,387 1,346 1,262 1,243 1,167 15 Spain 2,095 3,744 3,573 3,955 3,700 3,355 3,189 3,017' 2,882 2,849 16 Sweden 1,205 3,038 3,358 2,677 2,404 2,596 2,362 2,313 2,220 2,475 17 Switzerland 2,213 1,639 1,863 1,544 1,580 1,741 2,067 2,275' 2,206 2,308 18 Turkey 424 560 812 1,210 1,145 1,132 1,145 1,097 1,130 1,232 19 United Kingdom 23,849 45,781 47,364 55,556 54,752 53,676 53,269 54,520' 5555,,113333 54,857 20 Yugoslavia 1,225 1,430 1,718 1,817 1,857 1,888 1,868 1,866' 11,,888866 1,862 21 Other Western Europe1 211 368 477 800 732 660 660 625' 607 668 22 U.S.S.R 377 263 192 172 175 176 159 169 142 118 23 Other Eastern Europe2 1,725 1,762 1,598 1,573 1,471 1,442 1,454 1,467 1,402 1,505 24 Canada 9,193 13,678 16,341 18,350 16,326 16,604 16,634 15,778' 16,054 16,311 25 Latin America and Caribbean 138,347 187,969 205,491 208,404 203,465 203,001 198,372 199,058' 207,543 199,466 26 Argentina 7,527 10,974 11,749 11,381 11,021 11,108 11,014 10,983' 11,044 11,444 27 Bahamas 43,542 56,649 59,633 58,479 56,612 55,216 52,006 54,084 58,027 54,595 28 Bermuda 346 603 566 543 509 508 551 635' 592 617 29 Brazil 16,926 23,271 24,667 26,009 25,991 26,140 26,146 26,275' 26,284 25,886 30 British West Indies 21,981 29,101 35,527 38,782 35,390 36,002 34,866 33,722' 38,088 35,370 31 Chile 3,690 5,513 6,072 6,648 6,619 6,836 6,795 6,703 6,839 6,716 32 Colombia 2,018 3,211 3,745 3,490 3,444 3,438 3,343 3,406 3,499 3,369 33 Cuba 3 3 0 0 0 0 0 0 0 0 34 Ecuador 1,531 2,062 2,307 2,396 2,380 2,365 2,452 2,431 2,420 2,472 35 Guatemala3 124 124 129 124 130 120 141 148 158 153 36 Jamaica3 62 181 215 219 216 225 234 222 252 226 37 Mexico 22,439 29,552 34,802 35,306 35,016 35,602 35,364 35,288' 34,694 33,954 38 Netherlands Antilles 1,076 839 1,154 1,381 1,302 1,296 1,337 1,337 1,357 1,273 39 Panama 6,794 10,210 7,848 7,057 8,202 7,639 7,540 7,360' 7,702 6,865 40 Peru 1,218 2,357 2,536 2,487 2,401 2,397 2,416 2,358 2,384 2,388 41 Uruguay 157 686 977 961 930 934 962 990 1,088 1,052 42 Venezuela 7,069 10,643 11,287 10,836 11,137 10,982 11,029 10,994' 11,003 10,964 43 Other Latin America and Caribbean 1,844 1,991 2,277 2,306 2,165 2,191 2,175 2,123 2,112 2,119 44 49,851 60,952 67,837 64,812 65,979 66,006 6622,,335566 6611,,339988'' 6666,,338866 6644,,228844 China 45 Mainland 107 214 292 640 639 563 409 543' 710 507 46 Taiwan 2,461 2,288 1,908 1,510 1,573 1,651 1,588 1,679 1,853 1,745 47 Hong Kong 4,132 6,787 8,489 6,967 6,809 7,139 7,155 6,945' 7,364 6,800 48 India 123 222 330 323 295 354 302 381 427 300 49 Indonesia 352 348 805 952 906 886 821 797 733 708 50 Israel 1,567 2,029 1,832 1,827 1,869 1,802 1,890 1,938 2,088 1,938 51 Japan 26,797 28,379 30,354 27,727 29,005 30,601 26,862 26,421' 29,038 28,493 52 Korea 7,340 9,387 9,943 9,799 9,547 9,586 9,253 8,896 9,264 8,753 53 Philippines 1,819 2,625 2,107 2,650 2,756 2,578 2,510 2,487 2,583 2,499 54 Thailand 565 643 1,219 1,120 1,262 1,113 1,072 1,112 1,125 1,123 55 Middle East oil-exporting countries4 1,581 3,087 4,954 5,214 4,924 4,506 4,650 4,687' 5,075 5,005 56 Other Asia 3,009 4,943 5,603 6,081 6,3% 5,227 5,844 5,512' 6,126 6,412 57 Africa 3,503 5,346 6,654 7,048 6,969 6,830 6,862 6,719 6,613 6,497 58 Egypt 238 322 747 638 613 650 674 693 728 668 59 Morocco 284 353 440 549 556 545 582 536 583 552 60 South Africa 1,011 2,012 2,634 3,307 3,281 3,152 3,140 2,960 2,795 2,790 61 Zaire 112 57 33 43 30 18 18 19 18 33 62 Oil-exporting countries5 657 801 1,073 1,025 996 944 938 911 839 812 63 Other 1,201 1,802 1,727 1,485 1,493 1,522 1,510 1,600 1,649 1,642 64 Other countries 1,376 2,107 2,898 3,036 3,210 3,274 3,169 3,189 3,436 3,196 65 Australia 1,203 1,713 2,256 2,481 2,582 2,673 2,508 2,487 2,760 2,490 66 All other 172 394 642 554 628 601 661 702 676 706 67 Nonmonetary international and regional organizations6 56 68 164 209 198 71 681 562' 674 925 • 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 1985 TTyyppee ooff ccllaaiimm 11998811AA 11998822 11998833 July Aug. Sept. Oct. Nov/ Dec. Jan.f 1 Total 222222888888777777,,,,,,555555555555777777 333333999999666666,,,,,,000000111111555555 444444222222666666,,,,,,222222111111555555 444444222222777777,,,,,,999999888888555555 444444333333111111,,,,,,555555111111888888 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 222222555555111111,,,,,,555555888888999999 333333555555555555,,,,,,777777000000555555 333333999999111111,,,,,,333333111111222222 404,168 396,232 333333999999333333,,,,,,999999555555999999 383,444 384,517 333333999999888888,,,,,,666666111111111111 386,664 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 333333111111,,,,,,222222666666000000 444444555555,,,,,,444444222222222222 555555777777,,,,,,555555666666999999 59,797 58,477 555555999999,,,,,,666666111111777777 61,361 61,443 666666111111,,,,,,000000888888777777 61,093 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 999999666666,,,,,,666666555555333333 111111222222777777,,,,,,222222999999333333 111111444444666666,,,,,,333333999999333333 155,665 153,652 111111555555222222,,,,,,000000333333000000 143,576 144,329 111111555555666666,,,,,,444444666666222222 153,742 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 777777444444,,,,,,777777000000444444 111111222222111111,,,,,,333333777777777777 111111222222333333,,,,,,888888333333777777 127,239 123,716 111111222222222222,,,,,,444444888888222222 120,873 121,258 111111222222333333,,,,,,888888222222000000 116,896 66 DDeeppoossiittss 222222333333,,,,,,333333888888111111 444444444444,,,,,,222222222222333333 444444777777,,,,,,111111222222666666 48,340 46,990 444444777777,,,,,,333333777777999999 46,778 45,788 444444888888,,,,,,000000111111555555 45,055 77 OOtthheerr 555555111111,,,,,,333333222222222222 777777777777,,,,,,111111555555333333 777777666666,,,,,,777777111111111111 78,899 76,725 777777555555,,,,,,111111000000333333 74,094 75,469 777777555555,,,,,,888888000000555555 71,842 88 AAllll ootthheerr ffoorreeiiggnneerrss 444444888888,,,,,,999999777777222222 666666111111,,,,,,666666111111444444 666666333333,,,,,,555555111111444444 61,467 60,387 555555999999,,,,,,888888333333000000 57,634 57,487 555555777777,,,,,,222222444444222222 54,933 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 333333555555,,,,,,999999666666888888 444444000000,,,,,,333333111111000000 333333444444,,,,,,999999000000333333 333333444444,,,,,,000000222222666666 333333222222,,,,,,999999000000777777 111111,,,,,,333333777777888888 222222,,,,,,444444999999111111 222222,,,,,,999999666666999999 444444,,,,,,555555777777555555 333333,,,,,,333333888888000000 11 Negotiable and readily transferable 222222666666,,,,,,333333555555222222 333333000000,,,,,,777777666666333333 222222666666,,,,,,000000666666444444 222222333333,,,,,,333333999999666666 222222333333,,,,,,888888000000555555 12 Outstanding collections and other 888888,,,,,,222222333333888888 777777,,,,,,000000555555666666 555555,,,,,,888888777777000000 666666,,,,,,000000555555555555 555555,,,,,,777777222222333333 13 MEMO: Customer liability on acceptances 222222999999,,,,,,999999555555222222 333333888888,,,,,,111111555555333333 333333777777,,,,,,777777111111555555 333333888888,,,,,,555555888888666666 333333666666,,,,,,666666777777777777 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 40,369 42,499 45,856 43,291 44,488R 44,074F 42,635R 43,777 39,601 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 1984 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998811AA 11998822 11998833 Mar. June Sept. Dec. 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 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 • May 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 Dec. Mar. June Sept. Dec. Mar. June7 Sept. Dec.P 1 Total 352.0 415.2 438.7 443.7' 439.9 431.0' 437.3' 434.2' 429.2' 409.7 407.6 2 G-10 countries and Switzerland 162.1 175.5 179.7 182.5' 177.1' 168.8' 168.0 166.1' 157.8 148.1 147.5 3 Belgium-Luxembourg 13.0 13.3 13.1 13.8' 13.3 12.6 12.4 11.0 10.8 9.8 8.8 4 France 14.1 15.3 17.1 17.1 17.1 16.2 16.3 15.9 14.3 14.3 14.0 5 Germany 12.1 12.9 12.7 13.4' 12.6 11.6 11.3 11.7 11.0 10.0 9.0 6 Italy 8.2 9.6 10.3 10.2 10.5 9.9' 11.4 11.2 11.5 9.7 10.1 7 Netherlands 4.4 4.0 3.6 4.3 4.0 3.6 3.5 3.4' 3.0 3.4 3.9 8 Sweden 2.9 3.7 5.0 4.3 4.7 4.9 5.1 5.2 4.3 3.5 3.2 9 Switzerland 5.0 5.5 5.0 4.5' 4.8 4.2 4.3 4.3 4.2 3.9 4.0 10 United Kingdom 67.4 70.1 72.1 73.4' 70.8' 67.8 65.4' 65.1' 60.2 57.4 59.7 11 Canada 8.4 10.9 10.4 12.5 10.8 8.9' 8.3 8.6' 8.9 8.1 7.8 12 Japan 26.5 30.2 30.2 29.0' 28.5' 29.0' 29.9' 29.8' 29.5 27.9 27.1 13 Other developed countries 21.6 28.4 33.7 34.0 34.5 34.3 36.1 35.7 37.1 36.3 33.8 14 Austria 1.9 1.9 1.9 2.1 2.1 1.9 1.9 2.0 2.0 1.8 1.7 15 Denmark 2.3 2.3 2.4 3.3 3.4 3.3 3.4 3.4 3.1 2.9 2.2 16 Finland 1.4 1.7 2.2 2.1 2.1 1.8 2.4 2.1 2.3 1.9 1.9 17 Greece 2.8 2.8 3.0 2.9 2.9 2.9 2.8 3.0 3.3 3.2 2.9 18 Norway 2.6 3.1 3.3 3.3 3.4 3.2 3.3 3.2 3.2 3.2 3.0 19 Portugal .6 1.1 1.5 1.4 1.4 1.4 1.5 1.4 1.7 1.6 1.4 20 Spain 4.4 6.6 7.5 7.0' 7.2 7.1' 7.1 7.1 7.3 6.9 6.5 21 Turkey 1.5 1.4 1.4 1.5 1.4 1.5 1.7 1.9 2.0 2.0 1.9 22 Other Western Europe 1.7 2.1 2.3 2.3 2.0 2.1 1.8 1.8 1.9 1.7 1.7 23 South Africa 1.1 2.8 3.7 3.6 3.9 4.7 4.7 4.8 4.7 5.0 4.5 24 Australia 1.3 2.5 4.4 4.6 4.5' 4.4 5.5 5.2 5.7 6.2 6.1 25 OPEC countries2 22.7 24.8 27.4 28.5 28.3 27.2 28.9 28.6 26.7 25.0 25.6 26 Ecuador 2.1 2.2 2.2 2.2 2.2 2.1 2.2 2.1 2.1 2.1 2.2 27 Venezuela 9.1 9.9 10.5 10.4 10.4 9.8 9.9 9.7 9.5 9.2 9.3 28 Indonesia 1.8 2.6 3.2 3.5 3.2 3.4 3.8 4.0 4.0 3.8 3.7 29 Middle East countries 6.9 7.5 8.7 9.3 9.5 9.1 10.0 9.8 8.4 7.4 8.2 30 African countries 2.8 2.5 2.8 3.0 3.0 2.8 3.0 3.0 2.7 2.5 2.3 31 Non-OPEC developing countries 77.4 96.3 107.1 108.1 108.8 109.8 111.6' 112.1' 112.7' 111.9 112.3 Latin America 32 Argentina 7.9 9.4 8.9 9.0 9.4 9.5 9.5 9.5 9.2 9.1 8.7 33 Brazil 16.2 19.1 22.9 23.2 22.7 23.1 23.1 25.1 25.4 26.3 26.3 34 Chile 3.7 5.8 6.3 6.0 5.8 6.3 6.4 6.5 6.7 7.1 7.0 35 Colombia 2.6 2.6 3.1 2.9 3.2 3.2 3.2 3.1 3.0 2.9 2.9 36 Mexico 15.9 21.6 24.5 25.1 25.3 25.9 26.1 25.6 26.(K 26.1 25.8 37 Peru 1.8 2.0 2.6 2.4 2.6 2.4 2.4 2.3 2.3 2.2 2.2 38 Other Latin America 3.9 4.1 4.0 4.2 4.3 4.2 4.2 4.4' 4.0 3.9 3.9 Asia China 39 Mainland .2 .2 .2 .2 .2 .2 .3 .3 .6 .5 .7 40 Taiwan 4.2 5.1 5.3 5.1 5.1 5.2 5.3 4.9 5.3' 5.2 5.1 41 India .3 .3 .6 .7 .7 .8 1.0 1.0 1.0 1.1 1.0 42 Israel 1.5 2.1 2.3 2.0 2.3 1.7 1.9 1.6 1.9 1.7 1.8 43 Korea (South) 7.1 9.4 10.9 10.9 10.9 10.9 11.3' 11.1 11.2 10.3 10.7 44 Malaysia 1.1 1.7 2.1 2.5 2.6 2.8 2.9 2.8 2.7 3.0 2.8 45 Philippines 5.1 6.0 6.3 6.6 6.4 6.2 6.2 6.7 6.3 5.9 6.0 46 Thailand 1.6 1.5 1.6 1.6 1.8 1.8' 2.2' 2.1' 1.9' 1.8 1.8 47 Other Asia .6 1.0 1.1 1.4 1.2 1.0 1.0 .9 1.1 1.0 1.1 Africa 48 Egypt .8 1.1 1.2 1.1 1.3 1.4 1.5 1.4' 1.4 1.2 1.2 49 Morocco .7 .7 .7 .8 .8 .8 .8 .8 .8 .8 .8 50 Zaire .2 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 2.1 2.3 2.4 2.3 2.2 2.4 2.3 2.2 1.9 1.9 2.1 52 Eastern Europe 7.4 7.8 6.2 5.7 5.8 5.3 5.3 4.9 4.9 4.5 4.5 53 U.S.S.R .4 .6 .3 .3 .4 .2 .2 .2 .2 .2 .1 54 Yugoslavia 2.3 2.5 2.2 2.2 2.3 2.3 2.4 2.3 2.3 2.3 2.3 55 Other 4.6 4.7 3.7 3.2 3.0 2.8 2.8 2.5 2.4 2.1 2.1 56 Offshore banking centers 47.0 63.7 66.8 68 .(y 69.3' 68.7' 70.5' 70.5' 73 .(y 66.5 66.8 57 Bahamas 13.7 19.0 19.0 18.6' 20.7 21.6' 21.8' 24.6 27.3' 23.7 21.6 58 Bermuda .6 .7 .9 1.0 .8 .8 .9 .7 .7 1.0 .9 59 Cayman Islands and other British West Indies 10.6 12.4 12.9 12.6' 12.7' 10.5' 12.2' 11.2' 11.3' 10.7 11.7 60 Netherlands Antilles 2.1 3.2 3.3 3.1 2.6 4.1 4.2 3.3 3.3 3.1 3.4 61 Panama4 5.4 7.7 7.6 7.1 6.6 5.7 6.0 6.3 6.6' 5.7 6.8 62 Lebanon .2 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 8.1 11.8 13.9 15.1 14.5 15.2 15.CK 14.4 13.5 12.7 12.5 64 Singapore 5.9 8.7 9.2 10.4 11.2 10.5 10.3 lO.O' 10.2 9.5 9.8 65 Others5 .3 .1 .0 .0 .0 .1 .0 -.0 .0 .0 .0 66 Miscellaneous and unallocated6 14.0 18.8 17.9 16.9 16.2 16.9 17.0 16.3' 17.3 17.3 17.2 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 offoreign 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 claims 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 States' 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 1,300 1,044 1,570 1,508 1,445 1,778 1,705 1,758 42 Bahamas 8 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 • May 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.P 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 7 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 2,695 22,,441199 2,042 1,886 46 Bahamas 21 12 21 15 8 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 1985 1984 1985 Jan. July Aug. Sept. Oct. Nov. Dec. Jan.? U.S. corporate securities STOCKS 1 Foreign purchases 69,770 60,457 5,002 3,377 7,255 4,052 4,657 4,838' 4,482 5,002 2 Foreign sales 64,360 63,394 5,700 3,946 7,399 4,892 5,398 4,752 5,049 5,700 3 Net purchases, or sales (-) 5,410 -2,937 -698 -569 -144 -840 -741 86 -567 -698 4 Foreign countries 5,312 -3,052 -716 -578 -290 -909 -752 74 -466 -716 5 Europe 3,979 -2,992 -561 -592 -410 -690 -529 -96 -359 -561 6 France -97 -405 -20 -45 -28 -67 -37 -46 -54 -20 7 Germany 1,045 -50 -135 -38 -125 -63 -10 11 -105 -135 8 Netherlands -109 -315 -44 -34 -19 -66 -47 -15 -29 -44 9 Switzerland 1,325 -1,490 -161 -321 -358 -335 -130 -34 -249 -161 10 United Kingdom 1,799 -664 -178 -127 146 -131 -251 11 91 -178 11 Canada 1,151 1,673 46 188 129 149 150 47 134 46 12 Latin America and Caribbean 529 493 103 -58 213 9 -89 30 67 103 13 Middle East1 -808 -1,998 -52 -55 -214 -207 -270 -12 -196 -52 14 Other Asia 395 -377 -264 -76 -57 -160 -92 74 -97 -264 15 Africa 42 -23 -7 -2 -5 -6 -8 -8 -6 -7 16 Other countries 24 171 19 16 54 -3 87 39 -11 19 17 Nonmonetary international and regional organizations 98 115 17 9 147 69 11 11 -101 17 BONDS2 18 Foreign purchases 24,000 39,176 5,948 3,082 2,885 3,356 6,994 4,899 6,380 5,948 19 Foreign sales 23,097 26,030 3,1% 2,503 2,030 2,035 3,060 2,556 2,901 3,106 20 Net purchases, or sales (-) 903 13,146 2,843 579 855 1,321 3,934 2,342 3,479 2,843 21 Foreign countries 888 12,849 2,847 539 902 1,278 3,954 2,130 3,504 2,847 22 Europe 909 11,669 2,636 480 502 1,004 3,956 1,950 3,314 2,636 23 France -89 207 55 33 17 8 143 -11 24 55 24 Germany 344 1,728 70 256 181 19 606 139 182 70 25 Netherlands 51 93 9 3 16 2 22 -1 15 9 26 Switzerland 583 644 12 13 49 9 253 159 276 12 27 United Kingdom 434 8,400 2,441 -80 311 922 2,860 1,599 2,755 2,441 28 Canada 123 -71 59 -35 54 3 -3 13 14 59 29 Latin America and Caribbean 100 390 90 14 76 64 42 44 78 90 30 Middle East1 -1,161 -1,011 -123 -60 1 -19 -232 -45 -179 -123 31 Other Asia 865 1,862 140 138 265 223 192 169 276 140 32 Africa 0 1 11 0 1 1 0 -2 1 11 33 Other countries 52 9 35 1 3 3 0 2 0 35 34 Nonmonetary international and regional organizations 15 297 -4 41 -48 43 -20 213 -24 -4 Foreign securities 35 Stocks, net purchases, or sales (-) -3,765 -1,074 -764 111 -489 -340 -318 -177 -221 -764 36 Foreign purchases 13,281 14,584 1,160 899 1,284 921 1,333 1,147 1,169 1,160 37 Foreign sales 17,046 15,658 1,924 787 1,773 1,261 1,651 1,324 1,390 1,924 38 Bonds, net purchases, or sales (-) -3,239 -3,535 228 178 -287 -481 -1,187 -231 -1,108 228 39 Foreign purchases 36,333 57,401 5,438 4,427 5,770 4,122 4,527 6,601 5,200 5,438 40 Foreign sales 39,572 60,935 5,210 4,249 6,057 4,604 5,714 6,832 6,307 5,210 41 Net purchases, or sales (—), of stocks and bonds .... -7,004 -4,609 -536 289 -777 -821 -1,505 -408 -1,328 -536 42 Foreign countries -6,559 -4,220 -665 227 -613 -884 -1,470 -561 -619 -665 43 Europe -5,492 -8,546 -725 -468 -602 -962 -1,574 -707 -1,100 -725 44 Canada -1,328 413 75 174 -7 -198 -68 -23 254 75 45 Latin America and Caribbean 1,120 2,474 206 237 127 28 217 207 104 206 46 Asia -855 1,410 -337 331 -136 169 -30 88 -50 -337 47 Africa 141 -107 -4 -21 11 -14 -19 -16 3 -4 48 Other countries -144 137 120 -25 -5 92 6 -110 169 120 49 Nonmonetary international and regional organizations -445 -389 -129 62 -163 64 -36 153 -709 129 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 • May 1985 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1985 1984 1985 11998833 11998844 Country or area Jan. July Aug. Sept. Oct. Nov. Dec. Jan p Holdings (end of period)1 1 Estimated total2 88,913 110,352 94,862 101,457 97,664 100,595 102,791' 110,352 112,660 2 Foreign countries2 83,799 100,258 87,909 93,486 91,755 92,847 95,139' 100,258 104,051 3 Europe2 35,509 46,575 40,375 44,365 43,653 44,448 45,223 46,575 47,086 4 Belgium-Luxembourg 16 305 138 171 191 218 259 305 408 5 Germany2 17,290 20,249 19,627 20,663 19,915 19,876 19,913 20,249 20,128 6 Netherlands 3,129 3,583 3,109 3,122 3,116 3,574 3,567 3,583 3,501 7 Sweden 847 893 957 905 981 980 981 893 1,042 8 Switzerland2 1,118 1,753 2,021 2,089 2,188 2,015 1,728 1,753 1,722 9 United Kingdom 8,515 13,742 9,443 12,301 11,988 12,729 12,974 13,742 14,147 10 Other Western Europe 4,594 6,052 5,087 5,122 5,275 5,056 5,803 6,052 6,137 11 Eastern Europe 12 Canada 1,301 2,827 1,631 1,862 2,149 2,386 2,578 2,827 2,752 13 Latin America and Caribbean 863 2,276 133 446 611 931 1,896' 2,276 2,425 14 Venezuela 64 78 75 76 79 80 88 78 82 15 Other Latin America and Caribbean 716 1,244 590 822 914 975 1,031' 1,244 1,242 16 Netherlands Antilles 83 955 -532 -452 -382 -124 111 955 1,101 17 Asia 46,008 48,384 45,575 46,575 45,100 44,797 45,166 48,384 51,477 18 Japan 13,892 19,954 15,719 16,248 16,230 17,082 18,369 19,954 20,532 19 Africa 79 12 88 -11 15 15 10 12 14 20 All other 38 183 108 250 227 271 266 183 296 21 Nonmonetary international and regional organizations 5,114 10,094 6,953 7,971 5,909 7,748 7,652 10,094 8,609 22 International 4,404 9,016 6,241 7,340 5,191 6,843 6,655 9,016 7,341 23 Latin American regional 6 6 6 6 6 6 6 6 6 Transactions (net purchases, or sales (-) during period) 24 Total2 3,693 21,438 2,309 1,599 6,5% -3,799 2,931 2,197 7,559 2,309 25 Foreign countries2 3,162 16,459 3,793 1,172 5,576 -1,736 1,092 2,293 5,118 3,793 26 Official institutions 779 467 2,525 177 1,366 -1,968 -823 -602 1,909 2,525 27 Other foreign2 2,382 15,992 1,268 994 4,210 232 1,915 2,895 3,209 1,268 28 Nonmonetary international and regional organizations 535 4,982 -1,484 428 1,020 -2,063 1,839 -96 2,442 -1,484 MEMO: Oil-exporting countries 29 Middle East3 -5,419 -6,277 27 -312 -411 -144 -983 -1,284 -200 27 30 Africa4 -1 -101 0 0 -100 0 0 0 0 0 1. Estimated official and private holdings of marketable U.S. Treasury securi- 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to ties with an original maturity of more than 1 year. Data are based on a benchmark private foreign residents denominated in foreign currencies. survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and nonmarketable U.S. Treasury bonds and notes held by official institutions of United Arab Emirates (Trucial States). foreign countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 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 Feb. 28. 1985 Rate on Feb. 28, 1985 Rate on Feb. 28, 1985 CCoouunnttrryy CCoouunnttrryy CCoouunnttrryy Per- Month Per- Month Per- Month cent effective cent effective cent effective 444444......555555 JJJJJJuuuuuunnnnnneeeeee 111111999999888888444444 111111000000......555555000000 FFFFFFeeeeeebbbbbb...... 111111999999888888555555 888...000 JJJuuunnneee 111999777999 111111111111......000000 FFFFFFeeeeeebbbbbb...... 111111999999888888444444 GGeerrmmaannyy,, FFeedd.. RReepp.. ooff ...... 444444......555555 JJJJJJuuuuuunnnnnneeeeee 111111999999888888444444 444...000 MMMaaarrr... 111999888333 Brazil 444444999999......000000 MMMMMMaaaaaarrrrrr...... 111111999999888888111111 IIttaallyy 111111555555......555555 JJJJJJaaaaaannnnnn...... 111111999999888888555555 111111000000......999999555555 FFFFFFeeeeeebbbbbb...... 111111999999888888555555 555555......000000 OOOOOOcccccctttttt...... 111111999999888888333333 111111...000 MMMaaayyy 111999888333 777777......000000 OOOOOOcccccctttttt...... 111111999999888888333333 555555......555555 FFFFFFeeeeeebbbbbb...... 111111999999888888555555 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Eurodollars 12.24 9.57 10.75 11.81 11.67 10.77 9.50 8.90 8.37 9.05 2 United Kingdom 12.21 10.06 9.91 11.09 10.79 10.60 9.87 9.74 11.63 13.69 3 Canada 14.38 9.48 11.29 12.41 12.20 11.99 11.09 10.41 9.70 10.63 4 Germany 8.81 5.73 5.96 6.00 5.81 6.06 5.92 5.81 5.84 6.13 5 Switzerland 5.04 4.11 4.35 4.81 5.04 5.23 5.03 4.96 5.13 5.66 6 Netherlands 8.26 5.58 6.08 6.26 6.23 6.16 5.87 5.77 5.87 6.90 7 France 14.61 12.44 11.66 11.37 11.00 10.75 10.54 10.66 10.43 10.60 8 Italy 19.99 18.95 17.08 16.50 17.28 17.13 17.13 16.86 15.82 15.79 9 Belgium 14.10 10.51 11.41 11.73 11.16 11.00 10.81 10.75 10.75 10.75 10 Japan 6.84 6.49 6.32 6.35 6.33 6.31 6.32 6.33 6.27 6.29 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 • May 1985 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1984 1985 CCoouunnttrryy//ccuurrrreennccyy 11998822 11998833 11998844 Sept. Oct. Nov. Dec. Jan. Feb. 1 Australia/dollar1 101.65 90.14 87.937 83.08 83.64 85.88 84.00 81.51 73.74 2 Austria/schilling 17.060 17.968 20.005 21.293 21.557 21.075 21.802 22.267 23.190 3 Belgium/franc 45.780 51.121 57.749 61.132 62.048 60.475 62.380 63.455 66.310 4 Brazil/cruzeiro 179.22 573.27 1841.50 2226.79 2453.64 2734.16 3008.55 3346.67 3768.17 5 Canada/dollar 1.2344 1.2325 1.2953 1.3145 1.3189 1.3168 1.3201 1.3240 1.3547 6 China, P.R./yuan 1.8978 1.9809 2.3308 2.5469 2.6488 2.6785 2.7953 2.8160 2.8347 7 Denmark/krone 8.3443 9.1483 10.354 10.9753 11.090 10.824 11.126 11.330 11.807 8 Finland/markka 4.8086 5.5636 6.0007 6.2783 6.3726 6.2653 6.4563 6.6368 6.8616 9 France/franc 6.5793 7.6203 8.7355 9.3041 9.4108 9.1981 9.5083 9.7036 10.093 10 Germany/deutsche mark 2.428 2.5539 2.8454 3.0314 3.0678 2.9985 3.1044 3.1706 3.3025 11 Greece/drachma 66.872 87.895 112.73 120.40 126.06 123.63 127.26 129.38 134.73 12 Hong Kong/dollar 6.0697 7.2569 7.8188 7.8430 7.8242 7.8235 7.8287 7.8110 7.8017 13 India/rupee 9.4846 10.1040 11.348 11.858 12.027 12.078 12.293 12.612 12.922 14 Ireland/pound1 142.05 124.81 108.64 102.28 100.85 103.41 100.37 98.23 94.23 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 1870.79 1898.98 1863.05 1912.52 1948.76 2042.00 17 Japan/yen 249.06 237.55 237.45 245.46 246.75 243.63 247.96 254.18 260.48 18 Malaysia/ringgit 2.3395 2.3204 2.3448 2.3528 2.4076 2.4300 2.4164 2.4804 2.5513 19 Mexico/peso 72.990 155.01 192.31 197.71 203.33 210.79 219.56 227.56 236.06 20 Netherlands/guilder 2.6719 2.8543 3.2083 3.4188 3.4597 3.3817 3.5035 3.5819 3.7387 21 New Zealand/dollar1 75.101 66.790 57.837 48.953 48.614 49.278 48.260 47.040 45.223 22 Norway/krone 6.4567 7.3012 8.1596 8.6246 8.8721 8.7175 8.9805 9.1765 9.4695 23 Philippines/peso 8.5324 11.0940 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Portugal/escudo 80.101 111.610 147.70 158.45 163.36 163.10 167.31 172.56 183.24 25 Singapore/dollar 2.1406 2.1136 2.1325 2.1635 2.1667 2.1554 2.1732 2.2011 2.2557 26 South Africa/rand1 92.297 89.85 69.534 60.08 56.54 55.47 52.66 46.34 50.57 27 South KoreaVwon 731.93 776.04 807.91 815.82 820.03 818.89 825.73 832.16 839.16 28 Spain/peseta 110.09 143.500 160.78 170.19 172.15 168.10 171.98 175.13 182.35 29 Sri Lanka/rupee 20.756 23.510 25.428 25.605 25.906 26.075 26.213 26.392 26.605 30 Sweden/krona 6.2838 7.6717 8.2706 8.5892 8.6887 8.5957 8.8614 9.0716 9.3364 31 Switzerland/franc 2.0327 2.1006 2.3500 2.5049 2.5245 2.4700 2.5602 2.6590 2.8045 32 Taiwan/dollar n.a. n.a. 39.633 39.159 39.226 39.419 39.509 39.209 39.228 33 Thailand/baht 23.014 22.991 23.582 23.013 23.020 26.736 27.091 27.330 27.961 34 United Kingdom/pound1 174.80 151.59 133.66 125.63 121.96 123.92 118.61 112.71 109.31 35 Venezuela/bolivar 4.2981 10.6840 n.a. n.a. n.a. n.a. n.a. n.a. n.a. MEMO United States/dollar2 116.57 125.34 138.19 145.70 147.56 144.92 149.24 152.83 158.43 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

69 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 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 (Administration) GRIFFITH L. GARWOOD, Director 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 ROBERT F. GEMMILL, Staff Adviser WILLIAM TAYLOR, Director 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

71 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 CHARLES L. HAMPTON, Senior Technical Adviser Opportunity Programs, Federal Reserve System PORTIA W. THOMPSON, Equal Employment Opportunity Programs Officer DIVISION OF FEDERAL RESERVE BANK OPERATIONS DIVISION OF COMPUTING SERVICES CLYDE H. FARNSWORTH, JR., Director BRUCE M. BEARDSLEY, Director ELLIOTT C. MCENTEE, Associate Director THOMAS C. JUDD, Assistant Director DAVID L. ROBINSON, Associate Director ELIZABETH B. RIGGS, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director ROBERT J. ZEMEL, Assistant Director WALTER ALTHAUSEN, Assistant Director CHARLES W. BENNETT, Assistant Director ANNE M. DEBEER, Assistant Director DIVISION OF INFORMATION SERVICES JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant Director WILLIAM R. JONES, Director WILLIAM E. PASCOE III, Assistant Director2 STEPHEN R. MALPHRUS, Assistant Director RICHARD J. MANASSERI, Assistant Director WILLIAM C. SCHNEIDER, JR., 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

170 Federal Reserve Bulletin • May 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 J. ALFRED BROADDUS, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary RICHARD G. DAVIS, Associate Economist NANCY M. STEELE, Deputy Assistant Secretary DONALD L. KOHN, 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 KARL A. SCHELD, Associate Economist EDWIN M. TRUMAN, Economist (International) CHARLES J. SIEGMAN, Associate Economist JOSEPH R. BISIGNANO, Associate Economist SHEILA L. TSCHINKEL, 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 HAL C. KUEHL, 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

73 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

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

75 FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- STAFF STUDIES: Summaries Only Printed in the ed at least monthly. (Requests must be prepaid.) Bulletin Consumer and Community Affairs Handbook. $60.00 per Studies and papers on economic and financial subjects 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 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- THE MONETARY AUTHORITY OF THE FEDERAL RESERVE, VENTION: JANUARY-MARCH 1975, by Margaret L. May 1984. (High School Level.) Greene. August 1984. 16 pp. WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 93 pp. $2.50 each. VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT XIII AMERI- garet L. Greene. October 1984. 40 pp. CAN-GERMAN BIENNIAL CONFERENCE, March 1985. 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- CONSUMER EDUCATION PAMPHLETS TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- Short pamphlets suitable for classroom use. Multiple copies BLES: A REVIEW OF THE LITERATURE, by Victoria S. available without charge. Farrell with Dean A. DeRosa and T. Ashby McCown. Alice in Debitland January 1984. 21 pp. Consumer Handbook on Adjustable Rate Mortgages 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- Consumer Handbook to Credit Protection Laws DEUTSCHE MARK INTERVENTION, by Laurence R. The Equal Credit Opportunity Act and . . . Age Jacobson. October 1983. 8 pp. The Equal Credit Opportunity Act and . . . Credit Rights in 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- Housing TWEEN EXCHANGE RATES AND INTERVENTION: A The Equal Credit Opportunity Act and . . . Doctors, Law- REVIEW OF THE TECHNIQUES AND LITERATURE, by yers, Small Retailers, and Others Who May Provide Inci- Kenneth Rogoff. October 1983. 15 pp. dental Credit 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- The Equal Credit Opportunity Act and . . . Women VENTION, AND INTEREST RATES: AN EMPIRICAL IN- Fair Credit Billing VESTIGATION, by Bonnie E. Loopesko. November Federal Reserve Glossary 1983. 20 pp. Guide to Federal Reserve Regulations 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET How to File A Consumer Credit Complaint INTERVENTION: A REVIEW OF THE LITERATURE, by If You Borrow To Buy Stock Ralph W. Tryon. October 1983. 14 pp. If You Use A Credit Card 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Instructional Materials of the Federal Reserve System INTERVENTION: APPLICATIONS TO CANADA, GERMA- Series on the Structure of the Federal Reserve System NY, AND JAPAN, by Deborah J. Danker, Richard A. The Board of Governors of the Federal Reserve System Haas, Dale W. Henderson, Steven A. Symansky, and The Federal Open Market Committee Ralph W. Tryon. April 1985. 27 pp. Federal Reserve Bank Board of Directors 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- Federal Reserve Banks MY, by Darrell Cohen and Peter B. Clark. January Monetary Control Act of 1980 1984. 16 pp. Organization and Advisory Committees 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Truth in Leasing FINANCIAL DEREGULATION, INTERSTATE BANKING, U.S. Currency AND FINANCIAL SUPERMARKETS, by Stephen A. What Truth in Lending Means to You Rhoades. February 1984. 8 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 138. 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. 15 U.S. International Transactions in 1983. 4/84. 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. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF Union Settlements and Aggregate Wage Behavior in the THE ELECTRONIC FUND TRANSFER ACT: RECENT 1980s. 12/84. SURVEY EVIDENCE, by Frederick J. Schroeder. April 1985. 23 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

77 Index to Statistical Tables References are to pages A3-68 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 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 EMPLOYMENT, 45 Rates, 24 Eurodollars, 24 Branch banks, 21, 55 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 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

78 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 VETERANS Administration, 38, 39 Consumer and producer, 44, 50 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

79 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 Gary H. Stern 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 HHeennrryy RR.. CCzzeerrwwiinnsskkii 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. Boy kin 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 E. Ronald Liggett 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

80 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories MMNNPP ALASKA ^BIWHMIWisSilmt1-* © 7 /p •AN 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