Federal Reserve Bulletin, 1985-08

VOLUME 71 • NUMBER 8 • AUGUST 1985 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost • Griffith L. Garwood • James L. Kichline • Edwin M. Truman Naomi P. Salus, Coordinator i 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 601 ECONOMICS IN POLICY AND PRACTICE: a strong currency system should be its OPPORTUNITY OUT OF ADVERSITY protection against counterfeiting, before the Subcommittee on Consumer Affairs and In an address, Paul A. Volcker, Chairman, Coinage of the House Committee on Bank- Board of Governors, says that the lessons ing, Finance and Urban Affairs, June 18, of economic history suggest that our suc- 1985. cess or failure in meeting problems is dependent on the degree we respect some 614 J. Charles Partee, Member, Board of Govbroad, guiding principles—a sense of price ernors, discusses the current difficulties stability, recognition that our destiny must that are being experienced by banks in our be found in the context of an open world agricultural communities, before the Subeconomy, and stability and continuity of committee on Agriculture and Transportaour financial markets. tion of the Joint Economic Committee, June 19, 1985. 607 FOREIGN EXCHANGE OPERATIONS: 618 Emmett J. Rice, Member, Board of Gover- INTERIM REPORT nors, focuses on aggregate trends in the During the period from February to the end small business sector, and says that public of April, the exchange value of the dollar policies oriented toward sustained growth, fell on balance against most major currenwith no sacrifice of price stability, will cies about 2 percent from levels at the end create an environment in which small busiof January. nesses can flourish, before the Subcommittee on Oversight and the Economy of the 609 STAFF STUDIES House Committee on Small Business, June "Service Charges as a Source of Bank 25, 1985. Income and Their Impact on Consumers" 621 Chairman Volcker presents the views of the provides important insights into changes in Federal Reserve on regulation of the market service charges and their effect on bank for Treasury and federally sponsored agenincome and consumers during the 1979-83 cy securities, before the Subcommittee on period. Telecommunications, Consumer Protection and Finance of the House Committee on 611 INDUSTRIAL PRODUCTION Energy and Commerce, June 26, 1985. Output declined an estimated 0.1 percent in May. 624 Chairman Volcker discusses issues involved in the budgetary treatment and procedures of the Federal Reserve System, 613 STATEMENTS TO CONGRESS before the Subcommittee on Economic Goals and Intergovernmental Policy of the Theodore E. Allison, Staff Director for Fed- Joint Economic Committee, June 27, 1985. eral Reserve Bank Activities, Board of Governors of the Federal Reserve System, discusses the views of the Board on the 629 ANNOUNCEMENTS proposed "Currency Design Act," and says that one of the primary concerns of those Request for nominations to the Consumer who share the responsibility of maintaining Advisory Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement on activities of Bankers Trust A69 GUIDE TO TABULAR PRESENTATION, Company. STATISTICAL RELEASES, AND SPECIAL TABLES Financial results of priced service operations. A80 BOARD OF GOVERNORS AND STAFF Amendment to Regulation G. A82 FEDERAL OPEN MARKET COMMITTEE Amendments to Regulation T. AND STAFF, ADVISORY COUNCILS Proposed action. A84 FEDERAL RESERVE BOARD Admission of five state banks to member- PUBLICATIONS ship in the Federal Reserve System. A87 INDEX TO STATISTICAL TABLES 631 LEGAL DEVELOPMENTS Various bank holding company, bank ser- A89 FEDERAL RESERVE BANKS, BRANCHES, vice corporation, and bank merger orders; AND OFFICES and pending cases. A90 MAP OF FEDERAL RESERVE SYSTEM AI FINANCIAL AND BUSINESS STATISTICS A3 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A53 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Economics in Policy and Practice: Opportunity out of Adversity This article was adapted from an address given early 1930s, the financial system was newly by Paul A. Volcker, Chairman, Board of Gover- protected by federal insurance and other pronors of the Federal Reserve System, before grams. the Harvard University Alumni Association, More broadly, there was a sense that govern- Cambridge, Massachusetts, June 6, 1985. ment, far from being part of the problem, could provide solutions. From this very platform, Gen- When I was trying to decide on an appropriate eral Marshall had articulated a way by which subject for this address, I came across an article America could place its enormous resources in the Wall Street Journal about economics at behind concerted European recovery. At Har- Harvard. It said that economics had become the vard, as at other leading universities, many of the most popular area of concentration—first, be- best and the brightest looked to the government cause it appealed to corporate recruiters and for a worthwhile and challenging career. second because it was easy. The challenge be- I suppose those attitudes culminated in the fore me today seemed clear. mid-1960s. We could look back on a period of Have things really changed that much from the unrivaled prosperity and growth, not just in the time I spent at Harvard? To check my memory, I United States, but elsewhere. Unemployment went to the library to see what had happened the was low throughout the industrialized world. week I received my degree here in 1951. The lead Inflation still seemed a relatively minor problem, story in the New York Times was about the even if there were some flutterings of concern Secretary of the Treasury warning Western Eu- when it rose all the way to 3 percent as the ropean countries that their currencies were out Vietnam War heated up. We talked confidently of line—they were way too high! of prospects for the economic "take-off" of the But I didn't have to read very far to sense a developing world and of a New Frontier and a more profound difference in attitudes. Sure, Great Society at home. there were enormous problems: the Korean War I well remember President Kennedy's celewas deeply troubling; Europe had only begun brated commencement address at Yale, which rebuilding after World War II; and new countries caught the intellectual spirit of the times. He were just emerging in Africa and Asia, with argued forcefully that old economic ideologies uncertain prospects. But through it all, there was and slogans were dead or dying. We needed a sense that the United States was in control of dispassionate, informed debate about evident its own destiny and that this country was the problems—unemployment, inflation, budget defcatalyst for action worldwide. When we sent out icits, currency values, and the rest. The probsignals, others listened. lems were complex, and the experts might differ. Here at Harvard, the new Keynesian faith that But that technical debate about practical probwe had the tools for defeating the business cycle, lems should not be encrusted with stereotypes or mainly by manipulating the federal budget, was mythology, such as inevitable links between budbeing actively propagated. If that might involve a get deficits and inflation or the certain dangers of little inflation to ensure growth—well, so be it. any increases in government spending. After all, we had never had a serious peacetime In effect, my Harvard classroom of 1950 had inflation; the Great Depression was fresh in become the forum for national policy. It all everyone's mind; and the prime interest rate was seemed sensible enough. all of 2Vi percent. After the catastrophe of the But I also remember, as a Treasury official in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

602 Federal Reserve Bulletin • August 1985 the 1960s, feeling vaguely uneasy. The "techni- boggled the imagination of President Kennedy cal debate" to which President Kennedy referred when, more than 20 years ago, he defended the in fact spanned a substantial range of opinion, idea that in some circumstances a deficit was rooted in quite different visions of the risks and appropriate. The pressures of government fiopportunities before us. More important, I won- nance on our capital markets are tolerable only dered whether, in all the technical debate, we because we have been able to draw freely upon hadn't lost sight of the critical importance of massive amounts of capital from foreign counsome fixed principles to help guide the conduct tries—a significant drain on their savings. Even of economic policy. so, our interest rates remain historically high, Certainly, within a decade or so, there was a and the capital inflow is necessarily matched by sense that we had lost our way. No sooner had an enormous flow of imports, squeezing our we begun to take economic growth for granted manufacturers, miners, and farmers. than unemployment began trending higher. We continue to build more new offices than we Moreover, by the end of the 1970s, productivity can occupy; we've become expert in trading all practically stopped growing at all. We got used to kinds of companies and financial assets; we build inflation, but it didn't seem to stimulate the hotels, attend conventions, and travel at home economy; instead it accelerated and persisted to and abroad to an unprecedented extent—but all the point that we counted on it in our business the while productivity still lags. We spend our and private decisions. We freed ourselves from days issuing debt and retiring equity—both in the "discipline" of fixed exchange rates only to record volume—and then we spend our evenings find that large shifts in international currency raising each other's eyebrows with gossip about values could themselves bring uncertainties and signs of stress in the financial system. problems in economic management. Sharp We rail at government's inefficiency and its changes in domestic interest rates and financial intrusion in our markets—while we call upon the markets reflected the same pervasive uncertainty same government to protect our interests, our and suggested that something in our policies had industry, and our financial institutions. And the gone wrong. best of our young gravitate toward Wall Street Obviously, there has been good news as well instead of Washington, our state houses, or our of late. The pattern of accelerating inflation in courthouses. Or, perhaps more accurately, a the industrial world has now been broken, and great many of our young do end up in Washingfears of renewed acceleration have at least di- ton—to run a lobby or represent a client. minished. In this country, we have enjoyed a Those internal contradictions are evidence strong expansion since 1982. Our growth has enough of tension and trouble. And to a substanhelped encourage expansion abroad. Many de- tial degree they are mirrored in imbalances in the veloping countries, in circumstances far more rest of the world. Unemployment has reached 20 difficult than ours, are coping courageously with million in Europe, with no clear prospect of embedded inflation and massive debt, and some significant reduction. New democracies in Latin of them should now be able to look forward to America have found themselves on the edge of renewed growth. hyperinflation, compounding their difficulties in More broadly, our political stability is still the raising living standards. In Africa and elsewhere, envy of the world. There is a renewed spirit of a sustained process of growth has never really hope and innovation. So let me assert that out of started. difficulty we now have an opportunity—probably I am convinced that the problems are amenathe best opportunity in a generation—to help ble to practical solutions. Indeed, on an intelleclead the world into a new period of sustained tual level, the broad outline of a consensus seems growth and stability. We again have something clear enough. Tighten up the budget fast. That upon which to build. But we have to seize that should reduce our dependence on capital inflows opportunity. Time is short and the obstacles are and help create the conditions for lower interest evident. rates. For the first time in decades, we have a We all know about the massive deficit in our program for a more rational tax system. Europe federal budget—a deficit that would surely have and Japan can encourage more "home-grown" Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Economics in Policy and Practice 603 growth. We can all support the efforts of the pated as a way of life. Then the process accelerdeveloping world to make the needed adjust- ates, the distortions become greater, and producments. All of that should help produce a better tivity declines. Nor does the solution of some alignment of exchange rates. economists—indexation of taxes, wages, and in- At that level, economics does look easy. terest rates—help fundamentally. In the end, The part that is hard is converting that vague indexation cures nothing; indeed, it seems to intellectual consensus into effective action. And speed up the process. that's not a technical problem. It's a problem of We in the United States have had only one the governing process. It's the challenge of rec- prolonged period of accelerating peacetime inflaonciling our individual interests and forming tion, in the 1970s. By the standards of some them into a single, coherent common interest. countries, that inflation did not reach extreme It's recognizing that we need strong and consis- levels. But it didn't mean a stronger economy— tent signals from government—in effect, clear quite the reverse. The public properly was and enforced rules of the road—if the market- aroused to the point of supporting a strong antiplace is to work its magic of stability and growth. inflation program. The lessons of economic history suggest to me Now, the more extreme concerns about accelthat our success or failure in approaching the erating inflation are quiescent. But the scars practical problems will depend on the degree to remain in a trail of uneconomic investments, which we respect some broad guiding principles. financial strains, and lingering doubts about the Their precise application in particular circum- prospects for prices. stances will always be debated. But they are Some are tempted to seek an answer to our important precisely because they provide some current economic problem by another drink from fixed points of reference for the technical debate. the same inflationary bottle—just a little sip, of course. But then who could trust that commitment to restraint, and what good would that sip PRICE STABILITY really do us? The issue is critical, and not for the United After all our experience, here and abroad, confi- States alone. The dollar, like it or not, serves as dence in price stability surely must rank as one of the principal trading currency for the world and those principles. I don't mean we can or should as an important store of value. No effective expect to achieve every year some arbitrary substitute is available. How can we build a stable statistical measure of zero: today sensitive com- international system on an unstable currency? modity prices are falling, industrial producer And how, with an unstable currency, could we prices are virtually unchanged, and consumer lead politically as well as economically? prices are still rising at 4 percent a year or more. Nor is the question purely economic. A gov- My point is simply that in conducting our affairs, ernment is created to provide—and is legitimated we should be able to assume that, over relevant by providing—certain collective functions: the planning horizons, the general level of prices national defense, internal security, the assurance won't change significantly in one direction or of due process, and the protection of individual another. freedom. Government provides the common unit That may sound radical to a generation of account and means of payment, and with that, brought up to expect inflation. And I know it was it seems to me, goes the obligation for maintainfashionable here and elsewhere, a generation ing its stability. ago, for economists to argue that a "little" The obligation of a government to issue the inflation wasn't necessarily a bad thing. Busi- currency and maintain its stability is obviously nessmen and homebuyers would be pleasantly crucial for a central bank. I don't mean that we surprised to find their products or assets worth a can or must direct every decision on monetary little more, and the economy would be stimulat- policy solely toward achieving price stability as ed—or so the argument went. rapidly as feasible, oblivious to all other econom- But that was a theory born in depression. It ic circumstances of the day, or that we can rely doesn't turn out that way once inflation is antici- on theorizing about a fixed relation between the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

604 Federal Reserve Bulletin • August 1985 money supply and prices to govern every policy tion that the topic can be dropped if the semester decision. I do mean that each of those decisions isn't long enough. But there really are no sepawill involve a need to weigh its potential effects rate compartments of "domestic" and "internaon inflation, with the clear objective of returning tional" economics: as Gertrude Stein might have to, and maintaining, stability over time. said, economics is economics is economics. There was, for instance, in my mind no incon- The arguments for a liberal trading order have sistency between a continuing priority concern always been persuasive, even when sailing ships about inflation and our recent decision to, in the took months to cross the oceans and foreign jargon, "ease money" by lowering the discount travel was rare. Today, with instantaneous comrate. That decision took place under particular munications, with jet planes filling the skies, with circumstances: a strong dollar, ample capacity, business and financial institutions operating and slow growth—all of which tend to reduce across international boundaries as a matter of inflationary pressures. The sensitivity of some to course, we would forget the international impliany action that can be interpreted as inflationary cations of our policies at our peril. is an understandable, if mistaken, heritage of the The issue is, again, more than economic. If we absence of effective, consistent government poli- have a vision of a flourishing western economic cies to deal with inflation over years. One reward world, providing the opportunity and growth that of a record of greater stability, and of a credible are the counterparts of our political ideals, then commitment to maintain that stability, will in fact we had better recognize our mutual dependence be greater operational flexibility for the mone- from the start and seek our prosperity in the , tary authorities. context of that of others. Once before at a time of Sophisticated economists spent a long time difficulty, when we were still emerging as a world teaching us that a balanced budget is not always power, we tried in effect to opt out by raising appropriate and that deficits aren't always infla- high tariff walls. The results in the 1930s should tionary—that it all depends on circumstances. be warning enough. We learned well—too well. Yet, the pressures for protectionism are again I need not repeat all the analysis that points strong and growing. That's understandable toward the urgency of reducing the budget deficit against the background of the massive trade today. Suffice it to say that the deficit is a major imbalance. We rightly complain about the trade factor accounting for the lopsided nature of the restrictions of others. But, in one area after present expansion: pouring out purchasing pow- another, we ourselves have compromised the er on the one hand, while straining world capital liberal trading ideal. markets and the financial system on the other. There are more constructive ways to approach And, at the same time, the deficit helps keep the problem. Most of all, we have to face the fact inflationary expectations alive, and the accumu- that our trade deficit and exchange rate problems lating interest compounds burdens into the fu- in substantial measure grow out of contradictions ture. Those are not circumstances with which in our own economic policies. Some of our monetary policy can deal by itself. It's time for trading partners—certainly Japan—need to face action. up to problems that, in important ways, are the mirror image of our own—undue reliance on trade surpluses. OPEN WORLD ECONOMY Instead of shrinking into a trading shell, with all the risks of retaliation and divisiveness, we A second area in which a sense of lasting com- can again take the offensive by leading the world mitment seems to me essential involves clear into a new round of multilateral trade negotiarecognition that our destiny must be found in the tions, seeking a global bargain to deal with context of an open world economy. It's still an existing restrictions. That, of course, is precisely oddity of American textbooks on elementary the approach the administration is wisely trying economics that international economics is rele- to take. gated to the back of the book, with the implica- As a nation, we have been ever more niggardly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Economics in Policy and Practice 605 in our support for the international financial and banks and businesses were both highly liquid institutions—the World Bank, the Inter-Ameri- and amply capitalized. can Development Bank, and others—that far- But today we have a new generation. During sighted American leadership brought into being. our formative years the strength of the financial Those institutions are challenged as never be- system, and of the institutions within it, began to fore, and they need our active support and be taken for granted. We came to count on commitment. inflation. More leverage, less liquidity, and riski- We can hardly blind ourselves to the fact that er assets could be rationalized—particularly if it exchange rates, through the floating period, have could be assumed that the "Government" would become more volatile rather than less, increas- protect the depositor. In that environment, some ingly distorting trade and financial transactions. of the old canons of prudent lending and fiducia- No doubt the erratic—to put it mildly—move- ry behavior seemed less relevant. And for those ments in exchange rates reflect in substantial who had never experienced a crisis of confipart those policy imbalances and uncertainties to dence, it was hard to remember that, whatever which I have already referred. If the volatility the urgent competitive pressure to grow and to persists in a context of better international equi- produce this year's profit, confidence is the most librium, we will have to reexamine with a fresh precious asset of any financial institution. mind whether ways can be found, in a coopera- Now, in a time of stress, we have been remindtive international setting, to encourage greater ed once again of the relevance of some of those stability. old standards. The federal safeguards, to be sure, hold strong. But by themselves they do not ensure confidence in every institution, or protect STABILITY AND CONTINUITY the stockholder of a bank or a savings and loan OF FINANCIAL MARKETS association, or guarantee against dishonesty. The third area I will touch upon briefly is less And there is renewed recognition that federal concrete than price stability and international protections have a price—that a government that interdependence, but it may be more important. visibly bears much of the ultimate risk will insist We have an enormous talent for adapting new on its responsibility to exercise strong superviinformation and communications technology to sion and regulation. business practices and financial markets. These There has to be a better way than counting on days we have a market for taking a financial bureaucrats to do so much of the job. position one way or another almost instanta- I wonder whether, over there in the Business neously on practically anything, all justified by School and in its sister institutions at other sophisticated arguments about facilitating pre- universities, they take enough time to teach the ferred investment strategies or hedging risks. But lessons of financial crises, including how many it all raises the question of whether in the process business reputations have been irretrievably tarwe have lost sight of some of the qualities basic nished when competitive pressures or simple to the stability and continuity of any market. greed have led owners or managers to undercut Financial crisis was a recurrent feature of the acceptable standards. If schools are not teaching American economic landscape in the nineteenth these lessons, recent experience seems to be and early twentieth centuries. That is why we offering rich material for a new case book—one have developed an armory of instruments—the that illustrates how, in the last analysis, the Federal Reserve, the Federal Deposit Insurance effective operation of a market system rests on Corporation, and the Federal Savings and Loan the mutual trust that can be nurtured only by a Insurance Corporation—to help assure that inev- strong sense of business integrity and fiduciary itable isolated failures or strains do not infect the responsibility. I wonder, too, whether our acentire system. countants and lawyers, in serving their clients' interests, are always as sensitive as they should In the aftermath of the last great crisis, in the be to their professional responsibilities, designed 1930s, that kind of federal support was hardly to protect the public at large. needed. The natural bent was to be conservative, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

606 Federal Reserve Bulletin • August 1985 IN CONCLUSION ... toward bettering the lot, not just of ourselves and our families, but of our communities—local, na- Maybe all of this sounds like a central banker tional, and global. They will do that only if our reverting to type—preaching to others about acquisitive instincts are confined within certain their responsibilities. But I won't apologize. accepted principles of law and policy. In eco- Since the days of President Wilson—I am nomic terms, amid the diversity of our individual referring to his days as president of Princeton, of efforts we should be able to count on an overall course—my own alma mater has had as its framework of stability and continuity. That motto: "In the nation's service." I know that framework has to extend to our relations with may sound trite these days, but it still says other free nations. It demands personal responsisomething to me about what education should be bility and integrity rooted in a larger national all about. purpose. I also sense that one aspect is less strong I've talked about economics, but it's not the today: a willingness to make a lasting commit- technical economics of the classroom. My conment to a career in government itself. That cern is with economics in practice, as a part of strikes me as unfortunate—unfortunate from the the larger human experience, with all its vagastandpoint of effective government, which must ries; and with economics as a responsibility of rely on a core of dedicated civil servants and government, with all its implications for deciexperienced legislators capable of understanding sionmaking through a political process. the great issues of our time. I think that it's In that sense, I suspect there is as much— unfortunate, too, from the standpoint of those perhaps more—to learn in reading history or the missing what can be a satisfying and exciting classics, or in learning about other cultures, as in career. the study of economics itself. I sense some of the reasons why government We will succeed not because our business service has become less attractive, and we ought leaders or all the members of Congress took to deal with them. In the end, it's a matter of Economics 10: they can call on a lot of Ph.D.s for respect—for the role of government and for the technical advice. Rather, they will need a those who work in it. In the end, in our country, larger vision, which encompasses a sense of the responsibility of government is to foster a human frailty as well as human potential. We will climate of opportunity—an environment in need to realize we can't be in business just for which enterprise, and ingenuity, and personal ourselves. We need to recognize that our individinitiative will flourish. We can't afford to lose ual and national interests are inextricably tied up those traditional American values of "know with others. how" and "can do." My point is that those Out of economic adversity, we have new opqualities, in the end, are supposed to work portunities. Let's make the most of them. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

607 Treasury and Federal Reserve Foreign Exchange Operations: Interim Report This interim report, covering the period Febru- gates were thought likely to limit the scope for ary through April 1985, is the twenty-fifth of a any further easing of monetary policy. series providing information on Treasury and Moreover, economic recovery in Europe con- System foreign exchange operations to supple- tinued to be comparatively sluggish despite the ment the regular series of semiannual reports strong contribution to world economic growth that are usually issued each March and Septem- provided by the U.S. expansion. Against this ber. It was prepared by Sam Y. Cross, Manager background, market sentiment toward the dollar of Foreign Operations of the System Open Mar- became extremely bullish. There was strong deket Account and Executive Vice President in mand for dollars for both commercial and investcharge of the Foreign Group of the Federal ment purposes as well as by market profession- Reserve Bank of New York, and Richard F. als, even as the dollar set record highs against Alford, Senior Economist. several European currencies. Markets became one-sided and unsettled as the dollar's rise The dollar rose strongly during February to gained momentum, particularly after it passed record highs for the floating-rate period against levels at which some central banks had intermajor European currencies, then fell unevenly vened in the past. Through February 26, the until mid-April. At the end of April the dollar was dollar rose nearly 10 percent against major Eurotrading somewhat above its lows for the three- pean currencies—to about DM3.48 and $1.03 month period, but on balance was down from against the German mark and British pound levels at the end of January about 2 percent respectively—while rising 3 percent against the against most major currencies. Exchange mar- yen. kets were highly unsettled on a number of occasions during the period. Monetary authorities 1. Federal Reserve reciprocal currency arrangements intervened heavily during February and early Millions of dollars March following the G-5 meeting in January at which the participating countries reaffirmed their Institution Amount of facility, Amount of facility, April 30, 1985 April 30, 1984 commitment to promote convergence of economic policies, to remove structural rigidities, Austrian National Bank .. 250 250 National Bank of Belgium . 1,000 1,000 and to undertake coordinated intervention as Bank of Canada 2,000 2,000 National Bank of Denmark 250 250 necessary. Bank of England 3,000 3,000 Bank of France 2,000 2,000 The dollar began to move up strongly as the German Federal Bank 6,000 6,000 period under review opened. The dollar's resil- Bank of Italy 3,000 3,000 Bank of Japan 5,000 5,000 ience in the face of declining U.S. interest rates Bank of Mexico 700 700 during the last quarter of 1984 had increased Netherlands Bank 500 500 confidence in the currency. But the main factor Bank of Norway 250 250 Bank of Sweden 300 300 spurring the reacceleration of the dollar's rise Swiss National Bank 4,000 4,000 Bank for Internationalwas the market perception that the U.S. econo- Settlements: my was likely to pick up again and maintain Swiss francs/dollars 600 600 Other authorized strong growth with low inflation after the slowing European currencies/ dollars 1,250 1,250 late in 1984. The expected economic growth and the recent acceleration of the monetary aggre- Total 30,100 30,100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

608 Federal Reserve Bulletin • August 1985 On three occasions during the first three weeks 2. Net profits or losses (-) on U.S. Treasury and of February the U.S. authorities intervened, Federal Reserve current foreign exchange operations1 selling a total of $208.6 million against marks, $97.6 million against yen, and $16.8 million Millions of dollars against sterling to counter disorderly market U.S. Treasury conditions in operations coordinated with foreign Federal Exchange Period Reserve Stabilization monetary authorities. But the exchange markets Fund became more unsettled amid uncertainty over February 1 through the high dollar exchange rates and the speed of April 30, 1985 0 0 the dollar's rise over the preceding weeks. The Valuation profits and losses on outstanding assets and dollar started to ease back from its highs. Then, liabilities as of April 30, 19852 -1,294.5 -841.2 coordinated intervention operations, considerably larger than those of the preceding months, 1. Data are on a value-date basis. were undertaken by several monetary authori- 2. Cumulative bookkeeping, or valuation, profits or losses represent the increase or decrease in the dollar value of outstanding ties. As for their part in these operations, the currency assets and liabilities, using end-of-period exchange rates as U.S. authorities intervened on two occasions at compared with rates of acquisition. These valuation losses reflect the dollar's appreciation since the foreign currencies were acquired. the end of February and once in early March, selling a total of $257.2 million against marks. At the end of these operations the dollar was well vestment flows out of dollar-denominated assets below its highs of February 26. as the dollar declined. The dollar moved higher during the following The dollar found support at the lower levels week before declining again as newly released reached in mid-April as professionals covered U.S. economic statistics indicated that growth in short positions and strong investment and comthe first quarter might be lower than previously mercial demand emerged. The dollar closed expected. The pace of the dollar's decline accel- April down slightly on balance from the opening erated during March and early April as exchange of the period. In March and April, however, markets became concerned about the implica- daily exchange rate movements were sharp and tions for monetary policy and, more generally, bid-offer spreads were wider than normal as about the troubles of the Ohio thrift industry and market perceptions about trends in the economy the slowing of U.S. economic growth. As the and likely official responses were in a constant market adjusted to these uncertainties, the dol- state of flux. Under these circumstances, the lar's decline at times was rapid, moving through dollar-mark exchange rate, for example, fluctulevels at which resistance had been expected by ated 2 percent each day on average during the some market participants. two months. By the middle of April, the dollar had fallen 15 In the period February through April, the percent from its highs of February to a low of Federal Reserve and the Exchange Stabilization DM2.95 against the mark. Its drop in terms of the Fund (ESF) realized no profits or losses from Japanese yen and the Canadian dollar was much exchange transactions. The Federal Reserve and smaller—about 6V2 percent and 4 percent respec- the ESF invest foreign currency balances actively—just as the dollar's earlier rise relative to quired in the market as a result of their foreign those two currencies had been more moderate. exchange operations in a variety of instruments The dollar fell most dramatically, by more than that yield market-related rates of return and that 20 percent, against sterling. Following a sharp have a high degree of quality and liquidity. rise in British interest rates during late January, Under the authority provided by the Monetary market participants had come to anticipate that Control Act of 1980, the Federal Reserve had the British authorities would maintain their anti- invested $927.0 million of its foreign currency inflationary stance, with the result that sterling holdings in securities issued by foreign governinterest rates would remain substantially above ments as of April 30. In addition, the Treasury those elsewhere. In these circumstances, sterling held the equivalent of $1,621.7 million in such benefited more than other currencies from in- securities as of the end of April. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

609 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 SERVICE CHARGES AS A SOURCE OF BANK INCOME AND THEIR IMPACT ON CONSUMERS Glenn B. Canner and Robert D. Kurtz—Staff, Board of Governors Prepared as a staff study in the fall of 1984 This study investigates recent changes in service banks to be compared. Highlights from the surcharges at depository institutions to assess their veys of price schedules are as follows: effect on bank income and consumers. The study was requested by the Consumer Advisory Coun- • Although there is a broad range of charges for cil of the Federal Reserve Board at the Council's each service within and among categories of July 1984 meeting. Because of limitations associ- bank size, the charges for many services tend to ated with the CAC request, no new surveys were be clustered around the average. undertaken for the study. As a consequence, • Increases from 1980 to 1983 in minimum certain issues regarding the effects of changes in balances needed to avoid service charges on fees on consumers could not be adequately ad- checking or savings accounts are similar to the dressed. Nevertheless the study provides impor- increase in the Consumer Price Index for that tant insights into developments of the 1979-83 period. Increases in service charges imposed period, which included the authorization of inter- when balances fall below the specified minimum est-bearing checking accounts, the start of dereg- were two to four times larger than the increase in ulation of interest rates on depository accounts, the CPI. and the beginning of fees on certain Federal • Although the number of banks imposing ser- Reserve services that previously had been pro- vice charges continues to increase, some banks vided to commercial banks without charge. still do not impose fees for many services. A Information on changes in service charges and majority of banks waive some fees and minimum their influence on bank income is derived from balance requirements for senior citizens and mitwo sources: (1) intertemporal surveys of price nors. schedules at commercial banks and (2) the Func- • The data show no consistent relationship tional Cost Analysis, developed by the Federal between the level of service charges and the size Reserve Banks to allow costs at commercial of the bank imposing the charges. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610 Federal Reserve Bulletin • August 1985 The Functional Cost Analysis revealed the • In both 1977 and 1983, about 80 percent of following main points about bank income and families had checking accounts. expense: • Evidence suggests that the proportion of • Between 1979 and 1983, both bank income lower-income families and younger families withfrom service charges and bank expenses per out checking accounts was larger in 1983 than it personal checking account increased significant- was in 1977. The cause of this apparent increase ly. Higher interest expense accounted for most is uncertain. Of consumers with a checking acof the growth in bank expenses. count, 57 percent, including the vast majority of • The return to banks on personal checking families headed by an elderly person (regardless accounts in 1983 was either essentially un- of income), report they normally do not pay changed or somewhat lower than in 1979, de- service charges on their main checking account. pending upon bank size. • Regardless of income, only a small fraction of consumers rank service charges ahead of conve- Information on service charges from the per- nience, availability of many services, and safety spective of the consumer comes mainly from when asked to list such reasons in order of surveys, which contained the following high- importance to them in their selection of a prilights: mary financial institution. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

611 Industrial Production Released for publication June 14X tinued to rise, while consumer goods remained unchanged and production was cut back in busi- Industrial production edged down an estimated ness equipment and in materials. At 165.3 per- 0.1 percent in May, following a decline of 0.2 cent of the 1967 average, output is 1.5 percent percent in April. In May, output of construction revision that was released on July 18. See "A Revision of the supplies and defense and space equipment con- Index of Industrial Production" and accompanying tables that contain revised indexes (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 (July 1985), 1. This statistical report, which was released on June 14, pp. 487-501. The revised indexes for January through June was the last press release on the index before the major 1985 will be shown in the September BULLETIN. 1967 = 100 1967 = 100 - Products output /-" \7 """"v. Materials output — i i , i I I All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: May. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

612 Federal Reserve Bulletin • August 1985 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Grouping 1985 1985 MMMaaayyy 111999888444 tttooo MMMaaayyy Apr. May Jan. Feb. Mar. Apr. May 111999888555 Major market groupings Total industrial production 165.5 165.3 .2 .2 .3 -.2 -.1 1.5 Products, total 168.5 168.5 -.1 -.1 .4 .0 .0 3.2 Final products 167.1 166.9 .0 -.2 .4 .1 -.1 3.6 Consumer goods 162.4 162.4 -.1 .0 .3 -.1 .0 .4 Durable 161.9 161.6 -.3 1.2 1.3 -1.6 -.2 .1 Nondurable 162.6 162.7 .1 -.5 -.1 .4 .1 .6 Business equipment.. 187.8 187.1 -.2 -.4 -.2 -.1 -.4 6.0 Defense and space... 149.5 149.9 .8 -.3 1.7 1.2 .3 12.6 Intermediate products.. 173.9 174.5 -.3 .2 .5 -.1 .3 1.7 Construction supplies 158.7 159.1 -.4 -.1 .6 .6 .3 -.3 Materials 160.9 160.4 .4 .7 .1 -.6 -.3 -1.0 Major industry groupings Manufacturing. 167.0 166.9 .0 .0 .4 -.2 -.1 1.6 Durable 158.2 158.0 .0 .3 .6 -.4 -.1 3.1 Nondurable . 179.8 179.7 .0 -.3 .2 .2 -.1 -.1 Mining 123.7 122.9 1.0 -.1 1.4 -2.8 -.6 -1.7 Utilities 188.1 189.6 -.1 2.5 -.5 .4 4.0 NOTE. Indexes are seasonally adjusted. higher than in May 1984 but remains fractionally space equipment, and output of construction below last summer. supplies rose for the third month. In market groupings, production of consumer Materials output declined 0.3 percent in May goods was unchanged in May, reflecting a small following a reduction of 0.6 percent in April. decline in the output of goods for the home and Nondurable materials were down in May, and little change in auto production and nondurable durable materials also declined, reflecting cutgoods. Automobiles were assembled at an annual backs in metals and equipment parts. rate of 8.0 million units, down slightly from the In industry groupings, manufacturing output rate in April. Output of business equipment was was off 0.1 percent with similar declines in both reduced 0.4 percent in May—the fifth consecu- durable and nondurable manufacturing. Mining tive decline—with continued weakness evident production was reduced 0.6 percent further, in commercial equipment, which includes com- mainly reflecting continued weakness in oil and puters and office equipment. Increases contin- gas well drilling. Utility output gained an estimatued, however, in production of defense and ed 0.8 percent in May. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

613 Statements to Congress Statement by Theodore E. Allison, Staff Director Let me emphasize that the integrity of our for Federal Reserve Bank Activities, Board of currency is not in serious jeopardy at this time, Governors of the Federal Reserve System, be- but that we see ominous signs for the period not fore the Subcommittee on Consumer Affairs and too far ahead. Our most serious concern is that, Coinage of the Committee on Banking, Finance without action soon to improve the deterrent and Urban Affairs, U.S. House of Representa- effectiveness of the currency, counterfeiting will tives, June 18, 1985. become so easy and so widespread as to affect the very viability of the currency system. We are I appreciate the opportunity to participate on keenly aware that this viability is largely a funcbehalf of the Federal Reserve Board in these tion of confidence. If this confidence is shaken, hearings on the proposed "Currency Design the role of currency as a medium of exchange Act." We believe that, in considering design could be undermined with serious financial and changes, one of the primary concerns of all of us economic dislocations. The record of the use of who share the responsibility of maintaining a currency in the United States in the century strong currency system should be its protection before the passage of the National Banking Act is against counterfeiting. We appreciate and wel- ample testimony to the seriousness of this probcome your subcommittee's interest in this issue. lem. However, the selection of optimum design fea- We are aware that the confidence with which tures for counterfeit deterrence must, by the we are concerned is fragile, perhaps more fragile nature of the problem, be dominated by timing and its loss more contagious now with our almost and technical considerations that are more ap- instantaneous access to the news. We are perpropriately delegated to a government agency suaded, therefore, that we must be willing to take rather than imposed on the Congress. timely and significant measures to avoid even The position of the Board on counterfeit deter- coming close to a risk of such gravity. rence remains essentially unchanged since the All sources that we have consulted advise us subcommittee's hearings last July. This position that it will become increasingly easy to copy our is the following: currency unless the design is changed. There will 1. Major and rapid technological improve- be more copying equipment on the market and, ments in reprographics—in equipment for color importantly, it will be more sophisticated yet printing, in color copiers, and in printers for require less skill by the operator. Marketing color computer output—pose a serious threat to projections from the reprographics industry unpotential counterfeiting and, in turn, a threat to equivocally point to an escalating increase in the confidence in the currency system. availability of devices that can produce high 2. The solutions are neither simple nor costless quality counterfeits. and must include a combination of currency Since your last hearing we have received two design improvements that will make the paper updates of the research in 1982-83 of Battelle more distinctive and the printing more secure Columbus Labs into the counterfeiting threat. while providing a feature (or features) incapable The most recent update is dated May 1, 1985. of easy replication by ordinary reprographic Rather than being based solely on marketing equipment. projections, this research also examines the technology of imaging and focuses on the question of 3. The implementation period will be long— how long it would take the technology to mature about four years from the time of decision on the to counterfeiting quality. Both Battelle Columfinal design to the time of replacement of the bus Labs and the marketing projections arrive at outstanding currency stock. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

614 Federal Reserve Bulletin • August 1985 the same conclusion. Although they agree more cy that we process for commercial banks. We on "how many" than on "when," the message plan to maintain 100 percent effectiveness in this from both is clear: the situation will be serious by area through a combination of mechanical and the end of this decade. visual methods. However, this process does not The role that the Federal Reserve has played protect the individual user of currency from the in counterfeit deterrence can be traced to its part fraud of counterfeiting nor the nation from the in forming a committee with three other central cost of economic disruption and reduced confibanks about six years ago to develop ways to dence resulting from large-scale or widespread head off a threat that was already foreseeable at counterfeiting activity. This protection can be that time. The Bureau of Engraving and Printing done only through improvements in the design of also serves on this committee. Most of the deter- the note itself. rent programs with which we have been involved Such a change will require the commitment of derive from the work of this committee. all of us, not only to solving the technical prob- I might note that we are close to implementing lems involved, but to making sure that the public even more sophisticated and secure systems for understands the reason for the change and is use by our Federal Reserve Banks to assist us in shown how to make use of the protection such a screening out counterfeit notes from the curren- change offers. • Statement by J. Charles Partee, Member, Board machinery and equipment. Moreover, in view of of Governors of the Federal Reserve System, the apparently favorable outlook for agriculture before the Subcommittee on Agriculture and and, for most of the decade, of interest rates that Transportation of the Joint Economic Commit- were low relative to the expected rise in income tee, June 19, 1985. and asset prices, many thought it advantageous to finance a relatively large share of these invest- I appreciate the opportunity to appear before this ments with borrowed money. Consequently, committee to discuss the current difficulties that farm indebtedness surged—rising, after alloware being experienced by banks in our agricultur- ance for inflation, about 60 percent from 1971 to al communities. As members of this committee 1979. are well aware, these problems have been inten- As it turned out, however, the agricultural sifying lately, as more farmers have been finding boom of the 1970s gave way to a bust in the it difficult, if not impossible, to meet fully the 1980s. Both here and abroad, the high farm contractual terms of their loan obligations. prices of the 1970s attracted additional resources The origin of these problems can be traced to into agriculture. Moreover, further breakthe 1970s. Our farm sector experienced a major throughs in genetics and in farm technology economic boom during that decade, and many enhanced the productivity of such resources. farmers expected the good times to continue in Thus, farm production has been increasing at a the 1980s. There was, in particular, a general considerable pace over this decade. At the same perception that there were limits on the potential time, the growth in demand for American agriworld production of agricultural products and cultural products has weakened. Farm exports, that these limits would continue to encourage a in particular, have been reduced by sluggish rapid growth in farm exports, thus fostering economic conditions abroad and by the high increasing returns to land and to other farm exchange value of the U.S. dollar as well as by inputs. Many also believed that the more rapid the expanded ability of other nations to meet inflation of the decade would persist so that long- consumption needs from their own internal proterm indebtedness could be paid off with less duction. These market developments have kept valuable future dollars. Acting on these expecta- farm prices persistently depressed. As a result, tions, farmers and other investors acquired addi- farm income has been low for five years in a row, tional farmland, bidding up its price in the pro- and land values have been declining since 1981. cess. Farmers also invested heavily in new Farm debt, though no longer increasing, is still Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 615 high; and interest rates on farm loans, while performing and nonperforming loans constituted down from earlier levels, remain well above about 10 percent of all farm production loans. those prevailing in the last decade when much of In addition, net charge-offs of farm loans at all the debt was incurred. Thus, many farmers are commercial banks are estimated to have been faced with the problem of servicing a large about $900 million in 1984, or a bit more than 2 volume of debt, at relatively high interest rates, percent of outstanding farm loans. Of this total, with a substantially reduced level of farm earn- $240 million was reported by banks in California, ings. High interest rates and reduced income representing about 6 percent of their outstanding flows also have added to the downward pressure farm loans. While California banks led the nation on land values, thus further limiting the farmers' in charge-offs, these losses presented less of a ability to pay down debt by selling these assets. problem for these banks than for banks in many The earnings of all farmers have been adverse- other states. This situation occurred because ly affected by lower product prices, but not all most of the losses were booked by major banks farmers are experiencing the same degree of with large branching systems in which agriculturfinancial stress. Farmers that are relatively debt al loans constituted a relatively small proportion free have suffered declines in asset values but are of their total asset portfolios. In contrast, many not in danger of falling into insolvency. In con- banks operating in agricultural areas of states trast, producers who entered the 1980s with only that limit branching—states found mainly in the a relatively small equity cushion have been expe- midwest—have had more trouble accommodatriencing increasing financial difficulties. Esti- ing to their loan losses because of the high mates indicate that perhaps a third of the full- concentration of these loans in their asset portfotime producers on commercial-sized family lios. farms have debt burdens that are large enough to Last year's high charge-offs and an increase in cause moderate to severe financial stress, and the provision of loan-loss reserves had a marked this group owes about two-thirds of all farm debt. depressing effect on the profitability of many The greater proportion of this debt is owed to the agricultural banks (banks at which the ratio of Farm Credit System, the Farmers Home Admin- farm loans to total loans exceeds the average of istration, and individuals. Nonetheless, about such ratios at all banks, currently about 17 one-quarter of total farm credit is provided by percent). On average, returns on equity fell to 9 commercial banks, and a sizable proportion of percent, down from returns that averaged bethe farm loan portfolios of many banks have tween 14 and 16 percent in every year from 1973 become troubled to a greater or to a lesser through 1982. There was great variation in the degree. earnings that were recorded among agricultural Commercial banks experienced only minimal banks, however, mainly reflecting a sharp differproblems in their farm loan portfolios during the ence in loan-loss experience. Thus, 12 percent of 1970s. Such problems began to pick up in 1981 these banks reported negative earnings last year, and have been increasing steadily since then. and another 9 percent recorded only minimal One indication of the deterioration in the quality positive earnings. At the same time, more than of agricultural loans at banks that has occured half of these banks earned more than 10 percent since then is provided by data on delinquencies on equity, and nearly a fifth, more than 15 and charge-offs. While not all banks are required percent. to report such data for their farm loans, from In the aggregate, earnings of agricultural banks available information our staff estimates that at were high enough to permit a further buildup in the end of March this year, nonaccrual farm the average capital ratio of these banks, and the production loans at all banks in the nation totaled capital ratios of most agricultural banks remain about $1.7 billion, and other nonperforming high relative to those at nonfarm banks. But loans—those past due 90 days or more but still more farm banks seem certain to come under accruing interest, plus renegotiated troubled financial strain if farm loan losses continue to loans—totaled about $0.9 billion. In addition, intensify. Moreover, as I have noted, a small but about $1.3 billion of farm production loans were troubling number of farm banks experiencing past due 30 to 89 days. Altogether these poor- relatively high loan losses have already suffered Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Federal Reserve Bulletin • August 1985 an erosion of their capital base, thus increasing that was permitted individual customers—and in their vulnerability to failure should such losses the process helped to dampen tendencies for continue. these customers to become overextended. In Such extremely adverse results have been addition, many farm banks followed policies that occurring in small but increasing numbers. Last permitted them to maintain reasonably diversiyear, 32 agricultural banks failed—mostly in the fied asset portfolios. second half of the year—compared with only 7 Banks that failed to adhere to high standards of banks in 1983. Many of these banks came from a quality and asset diversity have been consideragroup that had reported delinquent loans at the bly more vulnerable to the effects of deterioratbeginning of the year in excess of the capital of ing circumstances of agricultural borrowers. One the bank. Unfortunately, the number of agricul- can point to situations in which a bank that is tural banks in this condition, while still a relative- failing or that is in extremely troubled condition ly small proportion of the 5,000 agricultural is located in close proximity to one or more other banks, rose further during 1984. At 102 agricul- banks that remain in good condition. In addition, tural banks, nonperforming loans at the begin- I understand that the Federal Deposit Insurance ning of this year exceeded total capital, up from Corporation (FDIC), in a study that it conducted 44 banks a year earlier. Moreover, at 240 agricul- of the banks that failed in 1984, found evidence tural banks, the combined sum of past due and of various kinds of abusive practices, including nonperforming loans exceeded total capital, up improper insider transactions, instances of possifrom 133 banks a year earlier. Agricultural bank ble fraud, and other forms of irregular managefailures are likely to rise commensurately; indeed ment activities. 30 farm bank failures already have occurred, The management policies and practices of accounting for two-thirds of the banks that have banks, of course, tend to vary along a continufailed so far this year. um. Thus, the longer conditions in the agricultur- To sum up the current situation, while the al sector remain depressed, the greater will be incomes of the great bulk of our farmers have the number of banks experiencing problems of been reduced since the beginning of this decade, greater severity. As I have noted, that process is those farmers that got heavily into debt in the already quite observable in the trends of recent 1970s are primarily the ones who are experienc- years. Since no dramatic change appears likely in ing serious financial strains, with the severity of the current balance between supply and demand these strains increasing with the degree of their in agricultural markets, such trends seem almost leveraging. While such farmers constitute only certain to continue for some time to come. Put about one-third of all farmers, they account for more directly and graphically, it seems quite about two-thirds of all agricultural debt. As many possible that many more agricultural banks and of these borrowers have found it increasingly their farmer customers will experience severe difficult to service their loans, banks and other financial dislocations over the next several agricultural lenders have been encountering in- years. I should hasten to add that at present it creasing problems. To date, information suggests still appears that the great majority of farmers that the great majority of farm banks remain in and of farm banks have sufficient financial good condition despite these problems, but a strength to weather these conditions, although significant and growing number is experiencing not without growing strains and problems. an increasing degree of strain. The debt adjustment program, first announced That so many of our farm banks remain in by the administration last September and then relatively strong condition after five years of modified in March, will offer agricultural banks depressed conditions in the agricultural sector and their farmer customers some assistance in stands, I believe, as a tribute to their manage- moving through the difficult transition period ment. What this rather clearly suggests is that that appears to lie ahead. As committee members these banks generally followed prudent stan- know, under this program the government will dards in extending credit to their farm customers guarantee most of the remainder of a troubled during the boom times of the 1970s, standards farm loan after the lender reduces the principal that tended to hold down the degree of leveraging amount, or an equivalent in interest charges, 10 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 617 percent or more as needed to reduce the borrow- federal banking agencies, earlier this year reiterer's debt service burden to a level that he ap- ated its policy of instructing bank examiners to pears able to handle. Through May, the Farmers refrain from taking supervisory actions that Home Administration had guaranteed 259 loans would discourage banks from exercising apprototaling $36.7 million. I understand, moreover, priate forbearance when working with farmers or that the Farmers Home Administration, under its other small businesses with delinquent loans. It regular loan guarantee program, this year already is not the intent of this policy to encourage or to has guaranteed more than 5,000 loans totaling permit loan decisions that are inconsistent with a nearly $700 million, and that the total outstand- bank's long-term safety and soundness. The poliing volume of guaranteed loans is approaching $5 cy recognizes, however, that if there is good billion. reason to believe that a borrower's difficulties The Federal Reserve also revised and extend- are temporary in nature, it is prudent banking ed its seasonal lending program in March this policy to extend due dates on his loans and in year with the objective of making sure that some cases to grant additional credit to carry him agricultural banks will have sufficient liquidity to over a period of distress. Reserve Banks have provide the needed production loans to their designated senior review examiners with experfarmer customers. The regular seasonal pro- tise in supervising farm banks to oversee the gram, in place since 1973, provides discount administration of this policy. window credit to depository institutions with While the credit-related programs and praclimited access to national money markets that tices that I have just reviewed have assisted experience recurring seasonal swings in net farmers to obtain credit accommodation, I wish needs for funds because of the way their deposit to emphasize that they do not offer a solution to flows fluctuate relative to their loan demands. the problems facing the farm sector. Indeed, no This existing program was liberalized to increase credit program can do that because, fundamenthe portion of the seasonal funding needs that the tally, the farmer's problems are not traceable to Federal Reserve stands ready to supply to small an inability to obtain credit. and midsized institutions. In addition, a tempo- Reference to experience during the current rary simplified seasonal program has been estab- year will help illustrate this point. There was lished as an alternative source of seasonal credit. considerable concern early this year that a fairly Aimed particularly at smaller banks substantially large number of farmers would not be able to involved in agricultural lending, this program obtain credit to finance their production activioffers institutions with total loan growth above a ties. But as matters turned out, most farmers base amount of 2 percent the opportunity to fund were able to obtain production loans adequate to half of any further loan expansion through dis- meet their needs either from lending institutions count window loans, up to a maximum amount of that had financed them in the past or, if cut off by 5 percent of the institution's total deposits. these lenders, from alternative sources. More- In announcing the broadening of its seasonal over, some who were unable to obtain credit to credit program, the Federal Reserve noted that fully satisfy their needs, adopted various costthere were few, if any, signs to indicate that reducing measures to plant their crops—such as agricultural banks generally would experience using less fertilizer. And in cases in which land any unusual shortfall of liquidity. The action was was given up by farmers unable to continue, it taken, nevertheless, to have in place a means to was generally taken up and planted by new offset any unforeseen liquidity strains that might operators. Thus plantings have not been signifiarise in local areas or for individual banks, thus cantly impaired by a lack of credit availability, threatening the necessary flow of credit to farm- and another exceptionally large harvest is in ers. Total borrowing in our seasonal program is prospect. That, of course, is not an unmixed currently running at about $150 million. This blessing, because, with large harvests also apparfigure is below that of last year at this time, the ently in train in other major agricultural-producdifference reflecting mainly easier bank funding ing countries and with no indication that effective conditions in the money market. demands for such products will expand dramatically, it appears very likely that agricultural The Federal Reserve, as well as the other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin • August 1985 prices will remain depressed. Indeed, in re- sources to a bank with a better management sponse to these prospective supply and demand record. Second, it would provide an infusion of conditions, farm prices have been edging down real, permanent capital into the bank and thus in recent weeks from already depressed levels. into agricultural lending in general. Finally, The implications of these developments for in- mergers with banks outside the community of comes of farmers are obvious—they, too, will agricultural banks would promote greater diverremain depressed. sification of portfolio risk. In this way, the bank- Thus, as I have reviewed earlier, there is a ing system would come to be better protected good chance that the number of farmers who are against unforeseen developments that, from time experiencing serious strains will continue to to time, adversely affect the financial health of grow, which, in turn, means that an increasing different sectors of the economy. number of farm banks, particularly those that There is no doubt that the agricultural sector have the greatest concentration of farm loans in has been going through some very hard times their portfolios, will be encountering growing because of unanticipated weakness in farm proddifficulties—because of the inability of their uct markets that will no longer support the builtfarmer customers to service debts. These condi- in structure of high indebtedness. Many banks tions will further undermine the capital positions that have concentrated their lending in the farm of more banks, adding to the number that will be area are thus encountering difficulty because of in danger of failing. the inability of farmers to service their debts, and In my view the best way to deal with these it may be that more will be driven to the point of very serious problems for banks—and indirectly bankruptcy. But, as I see it, the best way to deal provide the best help to farmers—will be to with an erosion of capital is to obtain replaceencourage and to facilitate the merger of weak ment funds from present or prospective bank banks with stronger banking institutions, particu- owners. And when the bank's problems appear larly those that are not now so heavily involved too severe and too fundamental to handle in this in agricultural lending. That action would offer manner, the best solution is to seek mergers with several important advantages. First, it would other institutions that promise a larger, more transfer control of the institution's lending re- stable, lending and deposit base. • Statement by Emmett J. Rice, Member, Board of age change in employment in industries dominat- Governors of the Federal Reserve System, be- ed by smaller firms was twice that of industries fore the Subcommittee on General Oversight and dominated by larger firms. The vital role played the Economy of the Committee on Small Busi- by small businesses highlights the importance of ness, U.S. House of Representatives, June 25, ensuring a stable economic and financial envi- 1985. ronment in which these businesses can operate and expand. I appreciate the opportunity to participate in this The environment for business activity has imhearing on small business and monetary policy. proved appreciably in the past two years. The It is appropriate that we examine these issues rapid and variable inflation of the late 1970s and because small businesses are such an important the two recessions early in this decade—includpart of our economic system. They account for ing the quite steep downturn in 1982—imposed the vast majority of the firms in this country, and hardships on all businesses. Small businesses, they operate in every area of the economy. Much which tend to have fewer reserves for weathering of the growth in employment and output in this adverse periods and frequently must rely on country reflects the success of new and small, external credit sources, no doubt were hit particbut growing, enterprises. Estimates from the ularly hard. But the environment today is much Small Business Administration, for example, improved. Nineteen eighty-three and 1984 suggest that between 1982 and 1984 the percent- saw an unusually strong expansion in real Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 619 activity; this growth was accompanied by a sub- resulted. An index of business failures has risen stantial moderation in inflationary pressures. In- in recent months, and bankruptcy filings, typicaldeed, the inflation rate has remained at or below ly a quite volatile series, have remained at a 4 percent over the past two years, and indicators fairly high level. The data in these areas are very show little evidence of price acceleration this difficult to interpret, however. Changes in the year. bankruptcy laws in 1979—which make filing for A vital element in the continuing growth of bankruptcy an easier process—have made comsmaller businesses is adequate access to credit at parisons across different time periods difficult. affordable rates. In this respect, the prospects for While the actual number and size of firms that small business financing have changed notice- are failing is difficult to ascertain, we are aware ably for the better. Short-term interest rates are of, and concerned about, the trend shown by the at their lowest levels in five years, and the prime available statistics. In part, the data may reflect rate recently was lowered to W2 percent. These the cumulative effect on small businesses of the favorable economic and financial developments stresses incurred in earlier years that perhaps are reflected in the attitudes of the owners of were exacerbated by the recent slowing in ecosmall businesses: surveys reveal that these own- nomic activity. Another element may be related ers are quite optimistic about future economic to the life cycle of new businesses. There has conditions, and this optimism is reflected in their been a sizable increase in the number of new plans for capital spending and employment in incorporations since 1982. Historically, about coming months. half of firm failures have occurred among enter- Nonetheless, not all the problems of busi- prises that were five years old or less. Firms that nesses have gone away. In particular, some opened in 1982 or 1983 only now may be feeling sectors of the economy have not shared in the financial pressures as the resources of their ownrecovery, and small businesses operating in ers are exhausted. The recent slowing in ecothese areas have experienced some difficulties. nomic activity and the unwinding of pent-up The problems in agriculture are of concern, and demands likely also have exposed new firms to they have created stresses for nonagricultural increasing competitive pressures. businesses in rural areas as well. Export indus- These problems can be addressed by continutries and those industries subject to import com- ing to direct public policy toward a sustainable petition have had difficulty competing with for- rate of growth in an environment of price stabileign goods as a result of the prolonged rise in the ity. Such policies will have a salubrious effect on foreign exchange value of the dollar. This latter business of all sizes. In such an environment, factor perhaps has had less influence on small financial uncertainties will be reduced for both businesses because a smaller proportion of them borrowers and lenders, and credit needs can be operate in the manufacturing sector, which has more efficiently met. Past studies have suggested been markedly affected. Indeed, small busi- that small businesses have relatively limited acnesses that import goods from abroad have bene- cess to equity capital and thus are heavily reliant fited from the prevailing pattern of exchange on debt financing, particularly commercial bank rates and international trade. Nevertheless, the loans, to meet their funding needs. Because of deterioration in our trade position has had a the structure of their balance sheets, interest on pervasive effect on all businesses through its debt likely absorbs a relatively greater portion of broader macroeconomic implications. This dete- cash flow than at larger firms. Both the cost and rioration has acted as a strong restraint on do- the availability of credit, therefore, are crucial mestic production, damping growth in our econ- issues for small business. omy. This weaker demand and lower growth Despite some problems, financing opportunithan would otherwise have occurred have in turn ties of small businesses appear more positive contributed to financial stresses among some than at any time in the last few years. First, as I individual firms, whose earnings and cash flow noted earlier, market interest rates have declined have come under pressure. substantially. In particular, the prime rate has As problems have persisted and accumulated declined about 350 basis points from its peak in in some sectors, failures and bankruptcies have 1984, and relative to 1982, the reductions are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin • August 1985 even more substantial. These changes in interest indicates a market receptive to new offerings, rates have translated into substantial cost reduc- which may ease the access to equity capital for tions for small businesses. smaller firms. Second, small businesses are less likely to be In my discussion this morning, I have focused cut off from credit owing to disintermediation. In upon aggregate trends in the small business secearlier periods, lending at banks, particularly at tor. However, small businesses are a diverse small banks, was constrained when they had group, and individual firms face a wide variety of difficulty attracting funds as a result of limita- needs about which it is difficult to generalize. tions on the interest rates that were payable on Aggregate statistics thus may obscure some of deposits. Small businesses often encountered the problems of which policymakers should be trouble obtaining credit at any price under these aware. To deal with this concern, the Federal circumstances. Deregulation of the rates that Reserve recently established Advisory Councils financial institutions can pay on most deposits to the Federal Reserve Banks composed primarilessens the likelihood of disintermediation during ly of representatives from small business and periods of high rates and should help assure agriculture. Since the councils are based at the adequate access to credit for small businesses. District Banks, a wide variety of geographic There will, of course, be periods when interest areas will be represented. These councils have rates are high and credit is tight, but it does not been structured so that each one can best reflect seem likely that small businesses will be rationed the characteristics of the District. Each council out of the credit market in the future. Indeed, will meet regularly with the President of its credit flows to small businesses have been strong District Bank, and at least once a year, represenrecently. Growth in business loans at small tatives of the councils will meet with the Board banks, which make a very large share of their of Governors. We are hopeful that these councils loans to small businesses, has equaled or exceed- will become effective channels of communication ed that at large banks in the past two and one-half between the small business community and the years. Federal Reserve System. Third, legislation and regulations also have In conclusion, there have been improvements been employed to increase the access of small in the environment in which small businesses businesses to credit. The Community Reinvest- operate during the past few years. Their cost of ment Act encourages banks to meet the credit credit has declined and their access to credit has needs of their community, which encompasses expanded. Legislation such as the Community their small business community. An institution's Reinvestment Act and groups such as the Reperformance under the act is assessed during serve Bank Advisory Councils will help us conperiodic bank examinations, and it is one of tinue to monitor the needs of the small business several factors that are considered by regulatory community. Problems still remain, of course, but agencies when applications for mergers, acquisi- we must not forget that the most serious problem tions, or holding company formations are evalu- that small businesses have faced in this decade ated. Through this process, the Federal Reserve has been inflation and the resulting high interest System encourages banks to be flexible in meet- rates. During periods of inflation, financing costs ing the needs of small business. of small businesses increase rapidly, and profit Finally, sources of capital also have improved margins are squeezed. Public policies that are as small businesses have increased their pres- oriented toward sustained growth but that do not ence in equity markets. Since 1983, almost 1,500 sacrifice price stability are also policies that stock registrations have been recorded by firms create an environment in which small businesses making their first, or initial, public offering. can flourish. • Although this figure also includes larger firms, it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 621 Statement by Paul A. Volcker, Chairman, Board As you know, the Federal Reserve already of Governors of the Federal Reserve System, exercises a degree of surveillance over the govbefore the Subcommittee on Telecommunica- ernment securities markets as an integral part of tions, Consumer Protection, and Finance of the our responsibilities for conducting open market Committee on Energy and Commerce, U.S. operations, for monetary policy, and for acting House of Representatives, June 26, 1985. as fiscal agent in the sale and transfer of Treasury and certain sponsored-agency debt. That surveil- I appreciate this opportunity to present the views lance activity has centered particularly on the soof the Federal Reserve on the regulation of the called primary dealers—those dealers with market for Treasury and federally sponsored whom we have (or are contemplating) a business agency securities. My remarks will be relatively relationship. It is aimed, in the first instance, at brief because your subcommittee is already well informing ourselves of the financial condition of informed about the developments that have our counterparties in transactions. That surveilprompted consideration of the need for formal lance also encourages the maintenance of liquid regulation of these markets. By way of back- markets for our open market operations and the ground, however, I should emphasize two Treasury's sales of securities. points. Rather close surveillance of those with whom First, the problems that have arisen recently we deal—the 36 so-called primary dealers—is a have not affected substantially the core of the natural outgrowth of our business relationship. It government securities market—that is, the deal- has appeared to work effectively, and is not ers accounting for the bulk of trading activities, dependent on legislation. In all the considerengaging more or less continuously in market- ations of the need for legislation, the Federal making, and participating regularly in the distri- Reserve, the Treasury, and the Securities and bution of new Treasury securities. Consequent- Exchange Commission (SEC), have assumed ly, the market has continued to function with a that this surveillance of the primary dealers by high degree of efficiency and liquidity. the Federal Reserve will be maintained in essen- Second, the failure of some dealers operating tially the current mode. at the periphery of the market, both in recent While the primary dealers account for the bulk months and in earlier incidents, did have severe of dealer participation in the government and adverse repercussions for some customers. The "agency" markets, the activities of others have insolvency of a number of thrift institutions was apparently been expanding. In response, the precipitated, while other institutions involved in Federal Reserve began to gather data, on a financing or servicing the fringe dealers were voluntary basis, from the dealers with whom we placed in some jeopardy. In our highly interrelat- do not trade. We have taken other steps, such as ed and interdependent financial markets, these suggesting guidelines for capital adequacy and developments carried at least the seeds of more educating investors and lenders in appropriate widespread systemic problems. techniques, to protect the integrity of the market- In reviewing these circumstances, we have place. concluded that the legislative authority providing However, developments also suggest the infor registration, appropriate recordkeeping, and herent limitations of such a voluntary approach. inspection of those representing to deal in gov- The Federal Reserve has no authority over the ernment and federally sponsored agency securi- "fringe" dealers, cannot examine them, and ties is desirable, and certain minimal regulatory does not have a business relationship with them. authority should be provided with respect to Under those conditions, a dealer wishing to certain trading practices. We also believe, how- avoid official scrutiny or surveillance can do so. ever, that the legislation should be framed in Consequently, our present approach, for other such a manner as to avoid unnecessarily detailed than primary dealers, cannot be counted on to and costly regulation and supervision—that the minimize fraudulent behavior or excessive riskmandate given to the regulatory body (or bodies) taking at the expense of third parties. Indeed, a should provide only limited powers directly re- purely voluntary surveillance program runs the lated to the integrity of trading practices. risk of seeming to offer more assurance to cus- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin • August 1985 tomers of these dealers than, in fact, it can not be allowed to find refuge in trading governdeliver—a position in which we do not wish to ment securities—the very securities that invesfind ourselves. tors turn to for assurance of relative safety and The SEC has reviewed with you the steps liquidity. taken by other regulatory and advisory bodies Second, registration implies the need for cerand investors to help further assure the integrity tain minimum guidelines for recordkeeping and of the marketplace. These steps are constructive, auditing so that continued adherence to the stanand if maintained, will certainly help greatly to dards established for registered dealers can be guard against a repetition of recent problems. We monitored. To assure the accuracy of these resupport those efforts. ports and conformance to standards, legislation At the same time, we recognize that, contrary should include the authority to inspect registered to our own earlier expectations, this kind of dealers on a regular basis and when problems are market and regulatory response after previous suspected. problems materialized did not prove fully ade- Finally, there should be some mechanism for quate. Nor can new legislative authorities or writing and enforcing rules to foster the financial regulatory approaches provide assurance against soundness of government securities dealers and all fraud, excessive risk, or new weaknesses in to encourage, in a limited area, market practices trading practices. Nonetheless, we now believe consistent with the safety and the efficiency of that the balance of consideration does point to a the market. Obvious cases in point are guidelines more formal process of registration, inspection, with respect to capital and such practices as the and regulation for all government securities deal- collateralization of repurchase agreements ers, provided such official intrusion is limited (RPs). Legislation might permit regulation of only to areas at the core of our concerns. certain other practices—such as appropriate The potential costs of highly detailed and margins or when-issued trading—if needed, but expansive regulations are real. We want to pre- authority should be confined to areas that inserve the extraordinary liquidity and resiliency volve a direct threat to the integrity of the of the largest financial market in the world. marketplace. Those characteristics help make Treasury securi- Inevitably, even such limited regulation as we ties a unique investment vehicle for both domes- would contemplate would entail some costs. tic and foreign holders, and an efficient market is There would be expenses arising directly out of essential both to the Treasury in selling its secu- the process of writing, enforcing, and complying rities and to the Federal Reserve in conducting with the regulations. These expenses would be monetary policy. We want to preserve free entry borne by dealers and their customers in a manner and to avoid imposing heavy operating costs. that is not easily identified. But these administra- Registration and rulemaking need not deal with tive costs would appear to be quite modest, the complexities of other markets involving relative to the size of the market. Provided the many different issuers and less standard financ- basic efficiency and liquidity of the market is not ing instruments. impaired, interest costs should not be affected. It In our view, any structure of regulation for the is concern over the latter possibility that mili- Treasury market should embody—and be con- tates against the degree of regulation that is fined to—three principal elements. characteristic of other securities markets. Within First, it should provide for registration of the limited framework proposed, regulation dealers and for authority to bar or limit the could reinforce the performance of, and confiparticipation of those who, through violations of dence in, the market. securities laws or otherwise, have clearly dem- Failure to regulate may itself have costs. Savonstrated that they should not be allowed to ers and taxpayers in Ohio and Maryland can occupy a position of trust in the government testify that difficulties in the government securisecurities markets. While a registration require- ties market can have costly repercussions bement can raise difficult issues, including the yond the parties directly involved in the securinecessity to define a dealer, it is important that ties transactions themselves. More generally, those who have been disciplined in other markets loss of confidence as a result of failures in sectors Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 623 of the market could affect other soundly operat- and agency securities markets, we believe that ed, capitalized, and financed dealers, and poten- its responsibilities should be limited to those tially affect trading conditions generally. unique markets. Moreover, the Federal Reserve With respect to the specific structure of rule- has a body of expertise and substantive concerns making and oversight, we believe that the ap- that, in our view, suggests more than a consultaproach of H.R. 2032 would point to overly de- tive role in overseeing an SRO. The interests of tailed regulation. We have sympathy for the the Treasury and the SEC would also need to be concept of using a self-regulatory organization taken into account. (SRO) to write rules and of employing existing Last week, Chairman Shad described to you a regulatory bodies or SROs to enforce them. proposed regulatory structure emerging from dis- However, we do not believe that the Municipal cussions among the Federal Reserve, the Trea- Securities Rulemaking Board (MSRB) provides sury, and the SEC. That approach provides an an appropriate base for such an entity. Its tradi- acceptable alternative framework to an SRO. tions and methods of approach are inappropriate The elements that we consider essential for legisto the government securities market, and the lation are included: registration; inspection; and grant of authority provided by H.R. 2032 is provision for limited regulation of financial stanoverly broad. We also question whether the dards and key market practices. Properly imple- SEC, acting alone, is the most suitable agency to mented, the principal benefits of regulation could exercise ultimate oversight authority over the be captured at low cost. market for Treasury and sponsored-agency secu- Some legislative proposals would empower the rities. Federal Reserve to inspect and to enforce regula- There are large differences between the tax- tions for primary dealers. We will, in any event, exempt and the taxable government markets. need to continue our surveillance of all primary The former deals with a multitude of issuers of dealers through the Federal Reserve Bank of varying credit quality; underwriting is usually New York, and I do not believe we need any new done by syndicates of dealers with securities or special legislative base for that effort. We will frequently awarded on a negotiated rather than a continue to insist that primary dealers play an competitive bid basis, and a much higher propor- active role in Treasury financing operations and tion of final sales are made to relatively small will continue to collect data from them that we individual investors. Those circumstances may need on a regular and frequent basis. And we well warrant a comprehensive set of regulations would anticipate that they will continue to meet governing many aspects of dealer behavior, as high financial standards, even beyond those rethe MSRB has issued. But those regulations, by quired of other dealers. and large, do not provide an appropriate starting In conclusion the Federal Reserve supports point for regulating the government securities legislation providing for registration, inspection, market, and would, in fact, impose unnecessary and limited regulation of dealers in government and excessive burdens. For example, in the and sponsored-agency securities. However, we context of the limited number of issuers and share the concerns expressed by others that issues and the sophistication of customers in the H.R. 2032, as drafted, does not provide an Treasury and agency markets, detailed rules in appropriate framework for such regulation. such areas of MSRB concern as customer suit- We do find the joint Treasury-SEC-Federal ability, competitive practices, and dealer educa- Reserve plan acceptable for these purposes. We tion, do not appear necessary. On the other do not exclude the possibility that other regulahand, the MSRB has no experience in regulating tory structures—including an SRO rulemaking RPs—a first priority of rulemaking in the Trea- body—could work as well, or even better. sury market—since this form of financing is not We would, of course, be glad to work further so commonly used in the municipal market. with the subcommittee in developing these con- If an SRO were to be established as the cepts into appropriate legislation. • appropriate rulemaking body for the government Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin • August 1985 Statement by Paul A. Volcker, Chairman, Board respects, our accounts and budget process are of Governors of the Federal Reserve System, already an "open book," as they should be. before the Subcommittee on Economic Goals Following my earlier discussions with you, I and Intergovernmental Policy of the Joint Eco- have reviewed this matter in detail. I would nomic Committee, June 27, 1985. readily agree that the "open book" is hard to read—sometimes confusing and enormously I appreciate the opportunity to appear before this complex. I believe there are changes that we can committee to discuss issues involved in the bud- implement to make our budgets more convegetary treatment and procedures of the Federal niently accessible and more generally useful. For Reserve System. Attached to my statement are instance, with that objective in mind, this year's several appendixes that discuss these questions Annual Report of the Board of Governors of the more completely.1 Federal Reserve System to the Congress in- The appropriate budgetary treatment of the cludes a chapter reviewing Federal Reserve Federal Reserve has been considered a number spending over the past 10 years and our budgets of times. Each time the Congress has examined for 1985.2 We intend to present similar informathe issue, it has concluded that the Federal tion in each Annual Report in the future. Reserve's functional independence is inextrica- The burden of my comments this morning is bly intertwined with its budgetary independence. that the legitimate objectives of disclosure and of I believe that the ability of the Federal Reserve, public accountability can be best achieved by as provided by the Congress, to conduct its retaining independent budgetary reporting for monetary policy with relative freedom from day- the Federal Reserve, with our net earnings, as at to-day political pressure has served the nation present, reflected in the regular budget docuwell over the years. Maintaining the indepen- ment. Integrating Federal Reserve expenditures dence that is necessary to accomplish that objec- into the federal budget, contrary to our entire tive should remain in the forefront of any consid- history and earlier congressional decisions, eration to change our budgetary treatment. would, I fear, be interpreted as a clear step I realize that you are sensitive to those con- toward Executive influence and control over the cerns. I understand that it is not your intent to central bank. I am convinced that, in the end, the propose that the Federal Reserve be subjected to effect would be to make our operations less the regular budget control processes of the ad- intelligible and "transparent" rather than more. ministration or to congressional appropriations. At the same time I believe we can better achieve Your concern, as I understand it, is to assure that your objectives by working with the Congress to adequate information is available to permit and improve procedures for reporting and oversight. encourage appropriate congressional review and public understanding of Federal Reserve spending. THE FEDERAL RESERVE AS A In approaching that problem, we share the SELF-FUNDING CENTRAL BANK common ground that the Federal Reserve is accountable to the Congress, and through the The Congress established a central bank for the Congress, ultimately to the American public, for United States much later in the nation's history its spending. The fact is that we do make avail- than has been the case in most other industrialable substantial and detailed information on our ized countries. To a considerable extent this spending and on our operations. Budgets for reflected long and strongly felt concerns about both the Board of Governors and the Reserve the concentration of economic power. At the Banks are discussed and approved in open meet- same time, the Congress clearly wished to insuings of the Board. I would submit that, in those late the Federal Reserve from partisan politics. These concerns led to the creation of a regional 1. The attachments to this statement are available on 2. "Expenses, Employment, and Productivity," Board of request from Publications Services, Board of Governors of Governors of the Federal Reserve System, 71st Annual the Federal Reserve System, Washington, D.C. 20551. Report, 1984 (1985), pp. 201-10. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 625 system, with operational responsibilities diffused central bank included in the budget for the cenamong 12 Reserve Banks, each with its own tral government. That approach by other major board of directors and with the entire system industrialized countries reflects widely held consupervised by the Board of Governors in Wash- cerns about assuring operational autonomy for ington. In that connection, the Congress plainly central banks. understood that the ability to make considered I recognize and appreciate that the stated aim monetary judgments, independent of day-to-day of H.R. 1659 is not to disturb the present method pressures of the political arena, required freedom of funding or expense control by the Federal from outside fiscal control. These concerns were Reserve, much less to change the status of the also evident in the important revisions of the System within government. My concern, none- Federal Reserve Act in 1935, which cast the theless, is that the proposed inclusion of Federal System in essentially the form it has today. Reserve expenditures within the Executive's The desirability of independent funding of the budget document could be the first step down a Federal Reserve and freedom from potential slippery slope, encouraging those who clearly domination by the executive branch has been would wish to impair our functional indepenreaffirmed each time questions have been raised. dence by bringing the System more fully into the And it has not been a partisan or a parochial budgetary and appropriations process or otherposition. For instance, in 1975 six former Secre- wise. taries of the Treasury, in a letter to Senator Proxmire, stressed how important they felt it was that the Federal Reserve retain its status as a FEDERAL RESERVE SYSTEM BUDGET nonappropriated agency in these words: The objective specifically sought by H.R. 1659 We all feel that the Congressional reasoning of 60 can, in my judgment, be reached more effectively years ago which purposely insulated the Federal Re- and more cheaply by other approaches that are serve from immediate political pressures is even more consistent with present procedures and budgetvalid today. It is probably more difficult today than 60 ary treatment. To help place this issue in conyears ago for the Congress to take a long view that may well appear to conflict with immediate problems. text, I would like to summarize the existing And yet, this is precisely what the Federal Reserve budget process and results. must do each day and why we feel that its independence must be preserved. We all agree from a combined total of many years of The Process experience in government that the independence of the Federal Reserve would inexorably be eroded by the appropriations process exposing our country to great The Federal Reserve has an intensive budget potential danger.3 planning and control process for both the Reserve Banks and for the Board of Governors. I should also point out that the budgetary That process reflects throughout strong concern status of the Federal Reserve is hardly unique: it with both economy and efficiency. is indeed the norm for central banks around the Initial general guidelines for System spending world. For instance, whatever other arrangeare approved by the Board of Governors on the ments surround their functional independence, basis of analyses and projections of expected all the central banks of the G-10 countries fiwork loads, trends in prices and wages, and nance their expenditures out of their own inproductivity gains in each area of Federal Recome. Typically, they return all or major parts of serve responsibility. Within each of the Reserve their income in excess of expenses to the nation- Banks, directors drawn from the private sector al treasury, as is the case in the United States, participate in the budgetary process, bringing to but in no instance is a budget statement for the bear a great deal of business experience. They must approve the budgets of their banks. 3. Federal Reserve Reform and Audit. Hearings before the I would emphasize too that more than 40 Senate Committee on Banking, Housing and Urban Affairs, percent of Reserve Bank budgets represent exon S. 2285 and S. 2509, 94 Cong. 1 Sess. (Government Printing Office, 1976), p. 140. penditures for "priced services." As a matter of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Federal Reserve Bulletin • August 1985 law and principle, these services must meet a fectively in terms of price and quality with other market test in that all expenses, including over- actual and potential suppliers of such services. In head and the imputed cost of capital and taxes, 1984 the Federal Reserve met this test and recovare covered by charges. ered the full cost of priced services. As a last step, budgets for both the Reserve As fiscal agent for the U.S. government, the Banks and for the operations of the Federal Federal Reserve is responsible for issuing and Reserve Board are presented to the Board of redeeming a variety of Treasury and other gov- Governors for its review and approval at meet- ernment debt instruments ranging from savings ings that are open to the public. bonds and food stamps to large-denomination Treasury bills, notes, and bonds. We are reim- The Results bursed in whole or in part for these services by other agencies, bringing our receipts for services In the end, the effectiveness of the process must to more than $600 million this year, about half be measured by results. In the 10-year period the total expected Federal Reserve expenditures from 1974 to 1984 Federal Reserve spending has budgeted for 1985. increased at an average annual rate of about 0.7 While this may not be the time or place to percent in constant dollars. In the same period, review the spending record in great detail, I have total System employment has fallen about 13 attached relevant material and would, of course, percent, from roughly 28,000 to 24,000. Over the be glad to respond to any questions you may same decade, the principal measures of opera- have. But I do want to affirm that I believe that tional work load have increased 50 to almost 400 further analysis will confirm a disciplined budpercent. The long-term decline in Federal Re- getary process and a consistent pattern of econoserve employment in the face of persistent in- my and efficiency in our actual spending. Indeed creases in output reflects, in large measure, I am not aware that our record in these respects persistent efforts to improve productivity in the has been challenged in any material before the operating functions of the Federal Reserve committee. Banks. For 1985 the Federal Reserve Banks and the Board of Governors have budgeted total operat- IN FORMA TION NOW P UBLICL Y A VAIL ABLE ing expenditures of approximately $1.2 billion.4 ON FEDERAL RESERVE SPENDING Of this amount, some $900 million reflects operational services to financial institutions, the pub- The Federal Reserve now makes available delic, the Treasury, and government agencies, tailed information on its spending. Much of this most of which is recovered by charges or reim- data is drawn directly from the Federal Rebursements. Overall, this amount will represent serve's accounting and management information an increase of about 5 percent, in nominal terms, system (Planning and Control System, or over the 1984 spending level. "PACS") used for internal control. That system As I have indicated, under the provisions of contains data on spending by every Reserve the Monetary Control Act, the System must Bank and branch office by service and subserrecover the full cost of most services, including vice line and by object of expenditure (that is, an adjustment for imputed taxes and the cost of salaries, materials and supplies, equipment, travcapital, that it makes available to depository el, and others). All in all, the PACS reports institutions. In this area—clearing checks, pro- provide data on 96 services and subservices by viding wire transfers, and other payment ser- 71 detailed objects of expenditure, and on meavices—the Federal Reserve has to compete ef- sures of productivity and service quality. These data are publicly available on a quarterly basis with a six-week time lag, and I know of no other 4. This amount does not include another $175 million, which will be paid to the Bureau of Engraving and Printing for governmental body that provides publicly so Federal Reserve notes to be distributed to the public. This much detail about its spending and productivity sum is not usually included in analyses of Federal Reserve so promptly. spending because it represents simply the cost of providing currency. PACS information by its nature is retrospec- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 627 tive. However, the Federal Reserve also makes depreciates major assets rather than expensing available late in each year information in the them in the year that they are acquired.5 Indeed, form of tables and analyses of anticipated expen- we could not sensibly price our services on any ditures for the forthcoming year. These tables other basis, given that the production of these and analyses are released to the public before the services is highly capital intensive and that our open Board meetings at which spending levels prices, by law, must be set in a manner that is for the Board and the Reserve Banks are set. consistent with methods used by private-sector Whether we have provided all available infor- providers. Specifically, expensing computers mation in as readily convenient a form as possi- and other equipment in the year acquired— ble is another question. I believe improvements rather than following GAAP—would result in can be made. We are working to that end. widely fluctuating prices for Federal Reserve services, rendering the pricing approach stipulated by the Monetary Control Act practically im- DIFFICULTIES WITH THE APPROACH possible. More generally, from the standpoint of OF H.R. 1659 budgetary management of both the Board of Governors and the various Federal Reserve Our Federal Reserve budgeting generally follows Banks—and the comprehensibility of those budbusiness accounting principles, including depre- gets to the public—GAAP accounting seems ciation of capital assets. The budgets are on a more sensible. calendar-year basis, and we do not regularly The problems implicit in federal budgetary make multiyear expenditure forecasts. treatment could be overcome only by maintain- H.R. 1659 would require changes in that ap- ing dual accounting systems, which would inproach. All budget information would be provid- volve some sizable developmental and mainteed in the same format and with the same account- nance costs if done with precision. And two ing conventions as used for "on budget" parallel accounting systems are more likely to agencies. The data would then be included in the contribute to confusion than to clarity. federal budget documents although without pro- H.R. 1659 also would require the Federal visions for executive branch review or for con- Reserve to forecast our revenues. The great bulk gressional appropriations. of the Federal Reserve's earnings are a by- Technical issues, as well as fundamental philo- product of the implementation of monetary polisophical concerns, would need to be resolved cy. Earnings on our portfolio of securities acbefore such an approach could be adopted. And, count for more than 95 percent of Federal I do not believe that the results would effectively Reserve receipts and reflect mostly the amount achieve the limited aims sought—that is, im- of currency outstanding, congressional and Fedproved understanding and review of our expendi- eral Reserve decisions as to the level of reserve tures by the Congress or by the public. requirements, and decisions on open market The technical concerns are threefold: first, operations and on the level of interest rates. problems arising from differences in the account- Meaningful forecasts of those variables are siming procedures used by the Federal Reserve and ply not feasible and would be liable to gross those employed by budgeted agencies; second, misinterpretation if considered indicative of futhe cost that would be associated with the neces- ture monetary policy. I would also point out that sity of maintaining a dual accounting system; and third, the difficulties of meaningfully forecasting 5. The GAAP approach used by the Federal Reserve is Federal Reserve earnings several years ahead. particularly recommended by the accounting profession for With respect to accounting conventions, the organizations that must cost and price products. See U.S. Federal Reserve is a "business-like" organiza- General Accounting Office, An Examination of Concerns Expressed about the Federal Reserve's Pricing of Check tion that basically keeps its books as would a Clearing Activities, Report to the Chairman, Senate Commitprivate concern—that is, using generally accept- tee on Banking, Housing, and Urban Affairs, by the Comped accounting principles (GAAP). The primary troller General of the United States, January 14, 1985. GAO/ GGD-85-9; and Arthur Andersen & Co., Federal Reserve difference in approach from federal budget con- System: Report on Priced Services Activities (Arthur Andercepts is that the Federal Reserve capitalizes and sen, forthcoming, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin • August 1985 forecasts of costs and receipts in the priced that direction and would welcome further sugservices area would also be subject to market gestions that you may have. uncertainties and necessarily would be some- 2. We retain our present accounting format, what speculative. using GAAP concepts rather than shifting to the federal budget accounting conventions. My strong belief is that Federal Reserve spending is POLICY CONCERNS likely to receive more, and better informed, congressional and public scrutiny as part of a My greatest concerns about the approach pro- separate report consistent with GAAP accountposed in H.R. 1659 transcend these technical ing. considerations. The net fiscal impact of Federal Reserve oper- We plainly have the obligation to report to the ations is already fully and accurately reported in Congress fully on our policies and operations. the budget. Forcing the full array of supporting My sense is that the arrangements .for such material into the dark recesses and precise forreporting have, in most respects, worked rela- mat of a budget presentation developed for quite tively well over the years. As you know, as a different purposes—a presentation that already matter of law, I testify four times each year runs to thousands of pages—could hardly be a before the Congress on the general conduct of service to public understanding. It would, I susmonetary policy. Altogether, other Governors, pect, become just another hard-to-understand Federal Reserve officials, and myself appeared "special analysis," alongside a number of others formally before the Congress on 34 occasions that are virtually incomprehensible to those who last year, and 34 times so far in 1985, testifying are untutored in the intricacies of budget acon a variety of subjects. counting for government or for government- The question raised is whether, in this testimo- sponsored enterprises. ny, in other reports, or otherwise, there is 3. Finally, the appropriate oversight commitenough focus on our "housekeeping" responsi- tees in the House and in the Senate might wish to bilities—running an economical, cost-effective resume a practice, followed for some years in the operation. Appropriate congressional oversight Senate, of annual hearings directed specifically of Federal Reserve spending can, and should, toward the Federal Reserve budget and internal contribute to that process. I believe this over- management. I believe that we, as an organizasight can be done in a manner that does not raise tion, benefited from that procedure in the past questions about the independence of our budget- and would be glad to cooperate in the future. ary processes and that contributes to public In closing, I appreciate the careful way in understanding. which you have undertaken a reexamination of To those ends, I would suggest the following: these questions. Our goals are congruent: to achieve effective cost containment and appropri- 1. Within the Federal Reserve, we take steps ate accountability. I believe those aims can be to assure that the mass of information now accomplished in ways that are fully consistent available in several documents about our spend- with our traditional role in government and withing and budgetary process be presented at times out raising unintended questions about whether and in a manner more accessible to public and the conduct of monetary policy will continue to congressional oversight. We are taking steps in be free from partisan and passing political pressures. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

629 Announcements NOMINATIONS OF MEMBERS FOR mercial paper that Bankers Trust places with CONSUMER ADVISORY COUNCIL investors on behalf of issuers unrelated to the bank is a security for purposes of the Glass- The Federal Reserve has announced that it is Steagall Act, which generally prohibits banks seeking nominations of qualified individuals for from underwriting or dealing in securities. 11 appointments to its Consumer Advisory The Court, however, expressed no opinion as Council, to replace members whose terms expire to whether the bank's method of placing the on December 31, 1985. commercial paper constituted "selling," "under- The Consumer Advisory Council was estab- writing," or "distributing" within the meaning of lished by the Congress in 1976 at the suggestion the act. This issue was subsequently remanded of the Board, to advise the Board on the exercise to the Board for resolution. of its duties under the Consumer Credit Protec- In the statement detailing its decision, the tion Act and on other consumer-related matters. Board said the following: The council meets three times a year. Nominations should include the name, ad- After reviewing all of the relevant facts of record, the dress, and telephone number of the nominee. Board concludes that Bankers Trust's placement of Also, information about past and present posi- commercial paper as described in this Statement does not constitute the "selling," "underwriting," or "distions held, special knowledge, and interests or tributing," of commercial paper securities for purexperience related to consumer credit or other poses of the Act. consumer financial services should be included. Nominations should be submitted in writing to Dolores S. Smith, Assistant Director, Division of FINANCIAL RESULTS REPORTED Consumer and Community Affairs, Board of FOR PRICED SERVICE OPERATIONS Governors of the Federal Reserve System, Washington, D.C. 20551. The Federal Reserve Board on June 5, 1985, reported financial results of Federal Reserve priced service operations for the quarter ended STATEMENT ON ACTIVITIES March 31, 1985. OF BANKERS TRUST COMPANY The Board issues a report on priced services annually and a priced service balance sheet and The Federal Reserve Board has issued a state- income statement quarterly. The financial statement on the commercial paper activities of Bank- ments are designed to reflect standard accounters Trust Company of New York. The Board ing practices, taking into account the nature of decided that these activities, as described in the the Federal Reserve's activities and its unique statement, do not constitute selling, underwrit- position in this field. ing, or distributing securities within the meaning of the Glass-Steagall Act. The Board's findings were contained in a state- AMENDMENT TO REGULATION G ment that was filed on June 4, 1985, with the U.S. District Court for the District of Columbia. The Federal Reserve Board has amended its In a June 1984 decision, Securities Industry Regulation G (Securities Credit by Persons Other Association v. Board of Governors (Bankers than Banks, Brokers, or Dealers) to permit per- Trust), the Supreme Court ruled that the com- sons other than banks, brokers, or dealers to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin • August 1985 extend credit to trusts for employee stock option PROPOSED ACTION plans (ESOPs). The amendment will permit savings and loan associations, insurance companies, The Federal Reserve Board has requested public and finance companies to extend credit on mar- comment by July 22, 1985, on applications by gin stocks on the same basis as banks. The Bankers Trust New York Corporation and J.P. change became effective July 22, 1985. Morgan & Co. Incorporated to engage in commercial paper advisory and placement activities consisting of acting as agent for issuers in con- AMENDMENTS TO REGULATION T nection with the placement of such notes with institutional investors. The Board has amended its Regulation T (Credit by Brokers and Dealers) to permit broker-dealers to extend and to arrange credit for employee stock ownership plans (ESOPs). The change SYSTEM MEMBERSHIP: became effective July 22, 1985. ADMISSION OF STATE BANKS The Board also adopted an amendment to Regulation T that changes the initial margin The following banks were admitted to memberrequirements for the writing of options on equity ship in the Federal Reserve System during the securities. The amendment will permit a uni- period June 1 through June 30, 1985. form, premium-based system of margin requirements for all types of option contracts. This Florida system will incorporate the maintenance margin Boynton Beach Carney Bank required by the national securities exchanges or Boynton Beach Prime Bank associations under rules approved by the Securi- Ohio ties and Exchange Commission. This action is Mentor Chase Bank of Ohio intended to reduce computer programming re- Pennsylvania quirements for the brokerage industry because it Camp Hill Commerce Bank will use one basic program for all types of Harrisburg options. Texas This amendment becomes effective September Euless Landmark Bank 30, 1985. Mid Cities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

631 Legal Developments AMENDMENTS TO REGULATIONS G AND T tion rules that have been approved by the Securities and Exchange Commission ("SEC"). The Board of Governors has amended its Regulation Effective September 30, 1985, the Board amends G, Securities Credit By Persons Other Than Banks, 12 C.F.R. Part 220 as set forth below: Brokers, or Dealers to permit non-bank, non-broker lenders to extend credit to trust for employee stock Part 220—Credit by Brokers and Dealers option plans (ESOPs) qualified under section 401 of the Internal Revenue Code without regard to the credit 1. The authority citation for 12 C.F.R. Part 220 is limitations normally applicable under Regulation G. revised to read as follows: Effective July 22, 1985, the Board amends 12 C.F.R. Part 207 in the following manner: Authority: Sections 3, 7, 8, 17, and 23, of The Securities Exchange Act of 1934, as amended (15 U.S.C. Part 207—Securities Credit by Persons Other 78c, 78g, 78h, 78q, and 78w). Than Banks, Brokers or Dealers 2. Section 220.5(c)(2) is revised to read as set forth 1. The authority citation for 12 C.F.R. 207 continues to below: read as follows: Section 220.5—Margin Account Exceptions and Authority: Sections 3, 7, 8, 17, and 23 of The Securities Special Provisions Exchange Act of 1934, as amended (15 U.S.C. 78c, 78g, 78q, and 78w). 2. Section 207.5 is amended by revising the heading (2) Margin for options on equity securities. The and adding a new paragraph (c) as follows: required margin for each transaction involving any short put or short call on an equity security shall be Section 207.5—Employee Stock Option, the amount set forth in § 220.18 (the Supplement). Purchase and Ownership Plans 3. Section 220.18 is revised to read as follows: (c) Credit to ESOPs Section 220.18—Supplement: Margin A lender may extend and maintain purpose credit Requirements without regard to the provisions of this part, except for §§ 207.3(a) and 207.3(o), if such credit is extended to The required margin for each security position held in an employee stock ownership plan (ESOP) qualified a margin account shall be as follows: under section 401 of the Internal Revenue Code as (a) Margin equity security, except for an exempted amended (26 U.S.C. 401). security or a long position in an option: 50 per cent of the current market value of the security. (b) Exempted security, registered nonconvertible debt security or OTC margin bond: The margin required by AMENDMENTS TO REGULATION T the creditor in good faith. (c) Short sale of nonexempted security: 150 per cent of The Board of Governors is amending its Regulation the current market value of the security, or 100 per T—Credit by Brokers and Dealers, in order to contin- cent of the current market value if a security exue the Board's present policy of requiring an initial changeable or convertible within 90 calendar days margin for the writing of options that is identical to the without restriction other than the payment of money maintenance margin required by exchange or associa- into the security sold short is held in the account. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin • August 1985 (d) Short sale of an exempted security: 100 per cent of ORDERS ISSUED UNDER BANK HOLDING the current market value of the security plus the COMPANY ACT, BANK MERGER ACT, BANK margin required by the creditor in good faith. SERVICE CORPORATION ACT, AND FEDERAL (e) Nonmargin, nonexempted security for a long posi- RESERVE ACT tion in any option: 100 per cent of the current market value. Orders Issued Under Section 3 of Bank Holding (f) Short put or short call on a security, certificate of Company Act deposit, securities index or foreign currency: (1) In the case of puts and calls issued by a regis- Banco del Pacifico tered clearing corporation and listed or traded on a Guayaquil, Ecuador registered national securities exchange or a registered securities association, the amount, or other Banco del Pacifico (Panama), S.A. position (except in the case of an option on an equity Panama, Panama security), specified by the rules of the registered national securities exchange or the registered securi- Order Approving the Formation of Bank Holding ties association authorized to trade the option, pro- Companies vided that all such rules have been approved or amended by the SEC; or Banco del Pacifico, Guayaquil, Ecuador ("Banco Pa- (2) In the case of all other puts and calls, the cifico"), and Banco del Pacifico (Panama), S.A., Paamount, or other position (except in the case of an nama, Panama ("Banco (Panama)"), have applied for option on an equity security), specified by the the Board's approval under section 3(a)(1) of the Bank maintenance rules of the creditor's self-regulatory Holding Company Act (12 U.S.C. § 1842(a)(1)) to beorganization. come bank holding companies by acquiring the voting shares of Pacific National Bank, Miami, Florida ("Bank"), a proposed new bank. Notice of the applications, affording opportunity for AMENDMENTS TO REGULATION T interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. The Board of Governors is amending Regulation T to The time for filing comments has expired and the permit broker-dealers to extend and to arrange credit Board has considered the applications and all comfor employee stock ownership plans qualified under ments received in light of the factors set forth in section 401 of the Internal Revenue Code. section 3(c) of the Act (12 U.S.C. § 1842(c)). Effective July 22, 1985, the Board amends 12 C.F.R. Banco Pacifico, with total assets of $821 million, is Part 220 as set forth below: the largest privately owned commercial banking orga- 1. The authority citation for 12 C.F.R. Part 220 is nization in Ecuador and provides a broad range of revised to read as follows: commercial banking services in Ecuador.1 Banco Pacifico owns all of the voting shares of Banco (Panama), Authority: Sections 3, 7, 8, 17, and 23, of The Securi- which has total assets of $166 million. Bank is a ties Exchange Act of 1934, as amended (15 U.S.C. de novo bank that will operate in the Miami, Florida 78c, 78g, 78h, 78q, and 78w). banking market.2 In view of the de novo status of Bank, and based upon the facts of record, the Board 2. Section 220.9 is amended by revising the heading concludes that consummation of the proposed transacand by adding a new paragraph (a)(4) as set forth tions would have no adverse effects on existing or below: potential competition and would not increase the concentration of resources in any relevant area. Therefore, competitive considerations are consistent with Section 220.9—Nonsecurities Credit and approval of the applications. Employee Stock Ownership Account The financial and managerial resources of Applicants and Bank are considered generally satisfactory (4) Extend and maintain credit to employee stock ownership plans without regard to the other sections of this part. 1. Unless otherwise noted, all banking data are as of December 31, 1984. 2. The greater Miami banking market is approximated by all of * * * ** Dade and Broward Counties, Florida. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 633 and their future prospects appear to be favorable. Sub. H.B. No. 492 (May 21, 1985) ("the Ohio Act"). Thus, considerations relating to banking factors are Upon consummation of the acquisition, Bank will consistent with approval. Considerations relating to operate approximately 22 commercial bank branches the convenience and needs of the community to be in the greater Cincinnati, Columbus, and Cleveland, served are also consistent with approval. Accordingly, Ohio areas.1 the Board has determined that consummation of the The establishment of Bank and its acquisition by transactions would be in the public interest and that Applicant is a significant component of the solution to the applications should be approved. the financial crisis involving savings and loan associa- On the basis of the record, the applications are tions in Ohio that has now extended for over two approved for the reasons summarized above. The months. As the Board previously has noted,2 a number transactions shall not be made before the thirtieth of Ohio savings and loan associations that are memcalendar day following the effective date of this Order, bers of the ODGF experienced substantial deposit or later than three months after the effective date of withdrawals after the announcement of the closing of this Order, unless such period is extended for good Home State Savings Bank, Cincinnati, Ohio. On cause by the Board or by the Federal Reserve Bank of March 15, 1985, the Governor of Ohio declared an Atlanta, pursuant to delegated authority. emergency bank holiday closing all Ohio savings and By order of the Board of Governors, effective loan associations insured by the ODGF, which action June 3, 1985. immobilized the funds of over 500,000 depositors in institutions with assets in excess of $5.5 billion. The Voting for this action: Chairman Volcker and Governors Ohio legislature passed emergency legislation on Martin, Partee, Gramley, and Seger. Absent and not voting: March 19, 1985, providing that the closed Ohio savings Governors Wallich and Rice. and loan associations, including all of the savings banks and savings and loan associations that are the subject of this application, could reopen only for the JAMES MCAFEE purpose of permitting limited withdrawals and other [SEAL] Associate Secretary of the Board depositor transactions, unless they obtained FSLIC or FDIC deposit insurance, or the Ohio Superintendent The Chase Manhattan Corporation of Savings and Loan Associations determined that New York, New York they could qualify for federal deposit insurance, or otherwise finds that the interests of depositors will not be jeopardized by the reopening.3 Order Approving Acquisition of Bank On April 19, 1985, the Board approved, with the The Chase Manhattan Corporation, New York, New concurrence and at the urging of the Ohio Superinten- York, a bank holding company within the meaning of dent of Savings and Loan Associations, Applicant's the Bank Holding Company Act (the "BHC Act" or acquisitions of Chase Savings and Federated, which "Act"), has applied for the Board's approval under have continued to operate as state chartered thrift section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) and institutions. The Board acted on those applications under section 225.14 of the Board's Regulation Y pursuant to the emergency thrift acquisition provisions (12 C.F.R. § 225.14) to acquire all of the voting securi- of section 8 of the Act. ties of Chase Bank of Ohio ("Bank"), Mentor, Ohio, a On May 21, 1985, the Ohio legislature passed the newly chartered state bank. Bank will be the successor emergency legislation upon which the subject applicaby merger to Chase Savings Bank of Ohio ("Chase Savings"), Mentor, Ohio; Chase Savings Bank (Federated) of Ohio ("Federated"), Cincinnati, Ohio; and the following state chartered savings and loan associations formerly privately insured by the Ohio Deposit 1. Applicant anticipates that its acquisition of Bank will proceed in Guaranty Fund ("ODGF"): The American Savings the following sequence: Applicant will first purchase American. and Loan Company ("American") and The Tri-State Applicant will contribute cash to American to enable it to purchase the shares of Tri-State, Investor, and First State. Applicant will then Savings & Loan Association ("Tri-State"), both locatcontribute to American the shares of Federated and Chase Savings, ed in Cincinnati, Ohio; and Investor Savings Bank which it previously acquired with Board approval under section 4 of ("Investor") and First State Savings and Loan Associ- the Act. The Chase Manhattan Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985). The five S&Ls will then be merged into ation ("First State"), both located in Columbus, Ohio. American, which in turn will be converted simultaneously into a Applicant proposes to acquire Bank, a commercial commercial bank with its head office located in Mentor, Ohio. bank to be chartered by the State of Ohio, pursuant to 2. See e.g., F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 (1985) Chase Manhattan Corporation, supra. recently enacted emergency legislation, Ohio Am. 3. Ohio Am. Sub. S.B. No. 119 § 8 (March 19, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin • August 1985 tion is predicated in part to allow consummation of the withdrawn. Without capital assistance from Applicant, transaction proposed in the application. Specifically, Mentor and Federated also would not have had an the Ohio Act authorizes the Superintendent of Banks adequate capital position after the write-off of their to approve the organization and acquisition by a bank required contributions to ODGF. holding company located outside of Ohio of a bank in In view of these and the other facts of record, the Ohio that results from the conversion of, or the Board believes that an emergency exists that requires assumption of all or a significant portion of the deposit expeditious action under section 3(b) of the Act and liabilities of, one or more savings and loan associations section 225.14(b)(2) of the Board's Regulation Y under certain specified conditions. The Ohio Act pro- (12 C.F.R. § 225.14(b)(2)). Accordingly, the Board has vides that such an acquisition of a bank by a non-Ohio determined that it is appropriate in these cases to bank holding company is authorized by the laws of the shorten the period for interested persons to submit State of Ohio for purposes of the Douglas Amendment comments regarding these applications. In this regard, to the BHC Act and limits such acquisitions to two the Board promptly published notice of the application out-of-state bank holding companies. in the Federal Register (50 Federal Register 21,507 By letters dated May 20 and 22, 1985, the Ohio (1985)) and in newspapers of general circulation in Superintendent of Savings and Loan Associations and Cincinnati, Columbus, and Cleveland, providing for a the Ohio Superintendent of Banks requested that the period of public comment on the application. The time Board approve the application and that the Board act for filing comments has expired, and the Board has expeditiously in this matter under the emergency considered the application and all comments received procedures of the Act. The Ohio supervisory officials in light of the factors set forth in section 3(c) of the advised the Board that an emergency situation exists Act, 12 U.S.C. § 1842(c).4 in the State of Ohio with respect to savings and loan Applicant, with total assets of $86.9 billion, controls associations insured by ODGF, which has impaired three bank subsidiaries, including The Chase Manhatthe credit of citizens of Ohio. They have further stated tan Bank, N.A., New York, New York, and is the that a number of the institutions to be acquired by second largest commercial banking organization in Bank, and the group in the aggregate, have no foresee- New York State.5 Applicant operates in Ohio a comable ability to open or remain open without the assis- mercial finance subsidiary, Chase Commercial Corpotance or continuing assistance of Applicant. ration, and an economic forecasting and data process- The record shows that American, Tri-State, Inves- ing subsidiary, Chase Econometrics/Inter Active Data tor and First State experienced severe financial diffi- Corporation. As noted, Chase controls two thrift insticulties during the period following the closing of Home tutions in Ohio which are to be merged into Bank: State Savings Bank. All continue to experience net Chase Savings, which controls $107.4 million in assets deposit outflows. The write-off of the required contri- and operates in the Cleveland, Ohio banking market butions to ODGF of these institutions would reduce and Federated, which operates in the Cincinnati banktheir net worth below the levels required by all federal ing market and controls $53.2 million in assets. and state regulatory authorities and would not be Federated (assets of $53.2 million), American (assufficient to allow the institutions to operate indepen- sets of $54 million) and Tri-State (assets of $45 million) dently on a full-service basis. Indeed, several of these all compete in the Cincinnati, Ohio banking market. institutions would have a negative net worth. Three of Investor (assets of $90 million) and First State (assets the institutions, Tri-State, Investor, and American, of $94 million) compete directly in the Columbus were permitted to reopen on a full service basis only banking market. In view of the relatively small market after Applicant had executed written agreements for shares of these institutions, and the fact that Chase's their acquisition. First State opened on a full service remaining bank subsidiaries operate in separate bankbasis on April 25, 1985, and experienced severe depos- ing markets, the Board concludes that consummation it outflows. of the proposed acquisition would not have a signifi- In similar fashion, at the time Federated was ac- cant adverse effect on existing competition in any quired by Applicant, Federated had not been autho- relevant market. In view of the relatively small sizes of rized by the Ohio Superintendent of Savings and Loan the institutions involved and the number of potential Associations to reopen except for the purpose of permitting limited withdrawals by its depositors. The 4. In this regard, one commenter has requested the Board "to Superintendent permitted Mentor (now Chase Sav- condition the approval to acquire shares of an Ohio commercial bank ings) to reopen on a full service basis only after by Chase upon the passage by the Ohio legislature or Congress of interstate banking legislation." The Ohio legislature, however, has determining that Mentor should qualify for FSLIC specifically authorized this transaction under the terms and conditions insurance as a result of a $4.0 million deposit provided it deemed appropriate, and is separately considering interstate bankby Applicant to Mentor; Mentor would not have been ing legislation. Accordingly, the Board has determined not to impose such a condition. permitted to remain open if Applicant's deposit were 5. All financial data are as of December 31, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 635 entrants into the relevant markets, the Board finds that and quality. Accordingly, Bank's membership applicathese acquisitions would not have any significant tion is approved.8 adverse effect on potential competition in any relevant In connection with Bank's membership application, market. Applicant's audits of the institutions to be acquired The financial and managerial resources and future have revealed assets which may not be eligible for prospects of Applicant and Bank are satisfactory and ownership by a state member bank. Applicant has consistent with approval of this application. While the requested a two-year period to divest any noncon- Board would normally consider as an adverse factor forming assets. In view of the emergency nature of any significant dilution of capital or increase in lever- these acquisitions and the public benefits associated age by a bank holding company in connection with a with this proposal, the Board believes that a two-year proposed acquisition, the Board notes that the pro- divestiture period is reasonable and appropriate in this posed acquisitions have a de minimis impact on the instance. Accordingly, Applicant's request is granted. capital and leverage positions of Applicant. On the basis of the record, the application is ap- Consummation of Applicant's proposal will provide proved for the reasons summarized above. The transadequate capitalization and continuing financial sup- action shall not be consummated before the fifth port to the successor to the six thrift institutions calendar day following the effective date of this Order, involved in the application. At consummation, Appli- or later than three months after the effective date of cant will inject $30 million in new capital into Bank. this Order, unless such period is extended for good Bank thereafter will have an initial level of primary cause by the Board, or by the Federal Reserve Bank of capital in excess of the minimum standards set forth in New York pursuant to delegated authority. the Board's Capital Adequacy Guidelines. This will By order of the Board of Governors, effective ensure that the service provided by the six thrift June 3, 1985. institutions to the convenience and needs of their relevant communities will resume or continue. Ac- Voting for this action: Chairman Volcker and Governors cordingly, the Board concludes that convenience and Martin, Partee, Gramley, and Seger. Absent and not voting: Governors Wallich and Rice. need factors lend substantial weight to approval of this application and that approval of the proposed transaction would be in the public interest. JAMES MCAFEE Section 3(d) of the Act prohibits a bank holding [SEAL] Associate Secretary of the Board company from acquiring a bank outside of the bank holding company's home state unless the statute laws of the state where the target bank is located specifical- First Atlanta Corporation ly authorize such an acquisition.6 The recently en- Atlanta, Georgia acted section 1155.45(1) of Title XI of the Ohio Revised Code provides specific statutory authorization Order Approving the Merger of Bank Holding for Chase's proposed acquisition of Bank. According- Companies ly, the instant proposal would not violate the Douglas Amendment to the BHC Act.7 First Atlanta Corporation, Atlanta, Georgia, a bank Applicant has also applied for approval under sec- holding company within the meaning of the Bank tion 9 of the Federal Reserve Act, 12 U.S.C. § 321 Holding Company Act ("Act"), has applied for the et seq., and section 208.4 of Regulation H, 12 C.F.R. Board's approval under section 3(a)(5) of the Act § 208.4, for Bank to become a member of the Federal (12 U.S.C. § 1842(a)(5)) to merge with First Gwinnett Reserve System upon consummation of these acquisi- Bancshares, Inc., Lawrenceville, Georgia ("First tions. Bank appears to meet all the criteria for admis- Gwinnett"), and thereby acquire its subsidiary bank, sion of membership, including capital requirements First National Bank of Gwinnett County. and considerations related to management character Notice of the application, affording opportunity for interested persons to submit comments, has been 6. 12 U.S.C. § 1842(d). The home state of the acquiring holding given in accordance with section 3(b) of the Act. The company is defined for Douglas Amendment purposes as the state in time for filing comments has expired, and the Board which the operations of the bank holding company's banking subsidhas considered the application and all comments reiaries were principally conducted on the later of July 1, 1966, or the date on which the company became a bank holding company. Id. 7. In this regard, the Board has considered that the Ohio statute involved in this case is similar in effect to statutes in other states that 8. In view of the facts of record and at the request of the Ohio contain limited authorizations for acquisitions of depository institu- Superintendent of Banks, the Board has determined that an emergentions in those states by out-of-state bank holding companies in cy exists requiring expeditious action on the membership application. emergency situations. The Board also notes that the statute does not Accordingly, the Board hereby waives the notice and other procedural discriminate against out-of-state bank holding companies on the basis requirements for membership under the provisions of 12 C.F.R. of location. § 262.3(1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Federal Reserve Bulletin • August 1985 ceived in light of the factors set forth in section 3(c) of proposal.4 In this case, the small increase in concenthe Act (12 U.S.C. § 1842(c)). tration in the Atlanta metropolitan banking market is Applicant is the third largest banking organization in alleviated by the presence of 16 thrift institutions in the Georgia with three subsidiary banks that control ag- market, controlling $5.1 billion in deposits, which gregate deposits of approximately $4.0 billion, repre- represents 33 percent of the total deposits in commersenting 14.4 percent of the total deposits in commer- cial banks and thrift institutions in the market. The cial banks in the state.1 First Gwinnett is the 27th thrift institutions offer a full range of consumer serlargest banking organization in Georgia, with one vices and transaction accounts and some are engaged banking subsidiary that controls deposits of $121.8 in commercial lending. Consequently, the Board has million, representing 0.4 percent of the total deposits determined that consummation of this proposal would in commercial banks in the state. Upon consummation not have a significantly adverse effect on existing of the proposed acquisition, Applicant's share of the competition in the Atlanta metropolitan banking martotal deposits in commercial banks in the state would ket.5 increase to 14.8 percent, and Applicant would become The financial and managerial resources of Applithe second largest commercial banking organization in cant, First Gwinnett, and their subsidiaries are satisthe state. The Board has considered the effect of the factory and their prospects appear favorable. Thus, proposal on the structure of banking in Georgia and banking factors are consistent with approval of the has concluded that consummation of this transaction application. Upon consummation of this proposal, would not significantly increase the concentration of First Gwinnett's customers would have access to banking resources in the state. Applicant's larger system of automated teller ma- Applicant and First Gwinnett compete directly in chines. Consequently, considerations relating to the only one market, the Atlanta metropolitan banking convenience and needs of the community to be served market.2 Applicant is the largest of 24 commercial lend weight toward approval of the application. Acbanking organizations in the market, controlling 25.2 cordingly, the Board has determined that consummapercent of the total deposits in commercial banks in tion of the transaction would be consistent with the the market. First Gwinnett is the eighth largest com- public interest and that the application should be mercial banking organization in the relevant banking approved. market, controlling slightly less than 1.0 percent of the On the basis of the record, this application is aptotal deposits in commercial banks therein. Upon proved for the reasons summarized above. The transconsummation of this proposal, Applicant would re- action shall not be consummated before the thirtieth main the largest commercial banking organization in calendar day following the effective date of this Order, the market, controlling approximately 26.2 percent of or later than three months after the effective date of the total deposits in commercial banks in the market. this Order, unless such period is extended for good While consummation of the proposal would elimi- cause by the Board or by the Federal Reserve Bank of nate some existing competition in the Atlanta metro- Atlanta, acting pursuant to delegated authority. politan banking market, the Board believes that cer- By order of the Board of Governors, effective tain factors substantially mitigate the anticompetitive June 27, 1985. effects of the proposal. Upon consummation, Applicant's share of the total deposits in commercial banks Voting for this action: Vice Chairman Martin and Governors Wallich, Partee, Rice, Gramley, and Seger. Absent and in the market would increase by only 1.0 percentage not voting: Chairman Volcker. point to 26.2 percent, and the Herfindahl-Hirschman Index ("HHI") would increase by only 49 points to JAMES MCAFEE 1839.3 Twenty-three commercial banking alternatives [SEAL] Associate Secretary of the Board would remain in the market after consummation of the transaction. The Board also has considered the influence of thrift 4. The Board has previously determined that thrift institutions have become, or at least have the potential to become, major competitors of institutions in evaluating the competitive effects of this commercial banks. E.g., Midlantic Banks, Inc., 71 FEDERAL RESERVE BULLETIN 458 (1985); NCNB Corporation (Ellis), 70 FEDERAL RE- SERVE BULLETIN 225 (1984); Comerica (Pontiac State Bank), 69 1. Unless otherwise indicated, all banking data are as of June 30, FEDERAL RESERVE BULLETIN 911 (1983); First Tennessee National 1984. Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). 2. The Atlanta metropolitan banking market is approximated by 5. If 50 percent of the deposits of the thrift institutions were taken Clayton, Cobb, DeKalb, Douglas, Fulton, Gwinnett, Henry, and into account in computing market shares, Applicant's market share Rockdale Counties, in Georgia. would be 20.2 percent, First Gwinnett's market share would be 0.5 3. Under the United States Justice Department Merger Guidelines, percent, and the HHI would be 1215. Upon consummation of this a market in which the post-merger HHI is above 1800 is considered proposal, Applicant's market share would increase to approximately highly concentrated. In such markets, the Department is not likely to 20.7 percent, and the HHI would increase by only 20 points to 1235, a challenge a merger that produces an increase in the HHI of less than level considered only moderately concentrated under the U.S. De- 50 points, as in this case. partment of Justice Merger Guidelines. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 637 First Commercial Bankshares, Inc. 68th largest commercial bank in Virginia, holding 0.13 Arlington, Virginia percent of deposits in commercial banks in the state. Bank is the 40th largest of 71 commercial banking Order Denying Formation of a Bank Holding organizations in the Washington, D.C. banking market Company and holds 0.21 percent of total deposits in commercial banks in the market.2 Applicant's principals are not First Commercial Bankshares, Arlington, Virginia, affiliated with any other banking organization in the has applied for the Board's approval under section relevant market, and consummation of the proposed 3(a)(1) of the Bank Holding Company Act ("BHC transaction would not result in any adverse effects Act") (12 U.S.C. § 1842(a)(1)) to become a bank hold- upon competition or increase in the concentration of ing company through acquisition of the shares of First banking resources in any relevant area. Accordingly, Commercial Bank, Arlington, Virginia ("Bank"). the Board concludes that competitive considerations Notice of the application, affording opportunity for are consistent with approval. interested persons to submit comments, has been The BHC Act requires the Board in each case to given in accordance with section 3(b) of the Act. The consider the financial and managerial resources of the time for filing comments has expired, and the Board bank and company involved in the proposed transachas considered the application and all comments re- tion. In this regard, the Board has indicated on previceived in light of the factors set forth in section 3(c) of ous occasions that a holding company should serve as the Act (12 U.S.C. § 1842(c)). a source of financial and managerial strength to its On the basis of the record, the application is denied subsidiary bank and that the Board would closely for the reasons set forth in the Board's Statement, examine the condition of an applicant in each case which will be released at a later date. with this consideration in mind. Having examined the By order of the Board of Governors, effective financial and managerial factors in light of the record May 28, 1985. of this application, the Board concludes that the record presents adverse considerations that warrant Voting for this action: Vice Chairman Martin and Gover- denial of the proposal. nors Wallich, Partee, Gramley, and Seger. Absent and not The operations of Bank are currently under the voting: Chairman Volcker and Governor Rice. direction of Applicant's principals and have been during the past five years. In recent years Bank's JAMES MCAFEE capital has declined significantly while Applicant's [SEAL] Associate Secretary of the Board principals have compensated themselves with Bank's funds in amounts considered to be excessive for a bank of this size and with these characteristics. It is the Board's policy that bank earnings should be pre- Statement by Board of Governors of the Federal served for the bank except for prudent dividend pay- Reserve System Regarding the Application of First ments, and that remunerations should be based on the Commercial Bankshares, Inc. to Become a Bank cost or market value of services rendered. Holding Company As Applicant has indicated, Bank lends primarily to business borrowers, which has resulted in relatively By Order dated May 28, 1985, the Board denied the large concentrations of credits with commensurate application of First Commercial Bankshares, Arling- risk exposure. This indicates the need for higher levels ton, Virginia, under section 3(a)(1) of the Bank Hold- of capital. Partly because of the high compensation ing Company Act ("BHC Act") (12 U.S.C. levels to Applicant's principals, however, Bank lacks § 1862(a)(1)) to become a bank holding company by sufficient earnings to maintain the higher level of acquiring the shares of First Commercial Bank, Ar- capital that the Board would deem adequate. lington, Virginia ("Bank"). Applicant has stated that it plans to borrow funds to In this Statement, the Board sets forth its reasons provide additional capital for Bank. Given the past for denying this application. record of compensation paid to Bank's principals, a Applicant, a nonoperating Virginia corporation with portion of these funds could be used to support no subsidiaries, was organized for the purpose of excessive levels of compensation in the future. Morebecoming a bank holding company by acquiring Bank, over, Bank's past growth and earnings do not provide which holds deposits of $41 million.1 Upon consum- assurance that Applicant will be able to service the mation of this proposal, Applicant would control the debt it intends in connection with this transaction 2. The Washington, D.C. banking market is approximated by the 1. Deposit data are as of March 1, 1985. Washington, D.C. R.M.A. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin • August 1985 without adversely affecting its capital position. Ac- Applicant, the 5th largest banking organization in cordingly, in the Board's view, any improvement in New Jersey, controls 4 banks with total deposits of Bank's capital would be temporary given Bank's pre- approximately $1.7 billion, representing approximatesent expenses. Therefore, the Board concludes at this ly 4.5 percent of the total deposits in commercial time that considerations relating to financial and mana- banks in the state.2 Bank is the 27th largest commergerial resources would not be consistent with approval cial banking organization in the state, with total deposof this application. its of $180 million, representing approximately 0.5 Applicant has proposed no new services for Bank percent of the total deposits in commercial banks in upon consummation of this proposal. Considerations the state. Upon acquisition of Bank, Applicant's share relating to the convenience and needs of the communi- of deposits in commercial banks in the state would ty to be served thus are consistent with but lend no increase to 5.0 percent. Accordingly, consummation weight toward approval of this application. of this proposal would not result in a significant On the basis of the facts of record of this applica- increase in the concentration of banking resources in tion, the Board concludes that the banking consider- New Jersey. ations involved in this proposal are adverse and are Bank operates in the Trenton market, where Applinot outweighed by any relevant competitive or conve- cant does not operate.3 Because Applicant and Bank nience and needs considerations. Accordingly, it is the do not operate in the same market, consummation of Board's judgment that approval of the application this proposal would not have a significant adverse would not be in the public interest, and the application effect upon existing competition in any relevant marshould be and hereby is denied for the reasons summa- ket.4 rized above. The Board has also examined the effect of the proposed acquisition upon probable future competi- June 6, 1985 tion in the relevant geographic markets in light of the Board's proposed Market Extension Guidelines.5 Af- JAMES MCAFEE ter consideration of these factors in light of the specific [SEAL] Associate Secretary of the Board facts of this case, the Board has concluded that consummation of this proposal would not have any significant adverse effects on probable future competi- First Jersey National Corporation tion in any relevant market. In the Trenton market, the Jersey City, New Jersey four largest commercial banking organizations control 47.6 percent of the deposits in commercial banks in the Order Approving Acquisition of Shares of a Bank market, and thus the market is not considered highly concentrated under the Board's guidelines. First Jersey National Corporation, Jersey City, New The financial and managerial resources and future Jersey, a bank holding company within the meaning of prospects of Applicant and Bank are considered satisthe Bank Holding Company Act ("Act") (12 U.S.C. § 1841 et seq.), has applied for the Board's approval communities where it currently operates. Because Applicant's record under section 3(a)(3) of the Act (12 U.S.C. of meeting the needs of the communities it serves is satisfactory, and § 1842(a)(3)) to acquire 8.8 percent of the voting shares the protests do not provide any evidence that Applicant will not of The Broad Street National Bank of Trenton, Tren- continue to meet the needs of the communities, the Board concludes that these allegations do not warrant denial of this application. ton, New Jersey ("Bank"). 2. Deposit data are as of June 30, 1983. Notice of the application, affording an opportunity 3. The Trenton banking market is approximated by all of Mercer for interested persons to submit comments, has been County, and portions of Burlington County, Hunterdon County, Middlesex County, Monmouth County, and Somerset County, all in given in accordance with section 3(b) of the Act. The New Jersey; and portions of Bucks County in Pennsylvania. time for filing comments has expired, and the Board 4. One of Applicant's subsidiaries has applied to purchase the has considered the application and all comments re- assets and assume the liabilities of a branch of a bank that operates in the Trenton market. Bank controls 6.1 percent of the deposits in ceived, including those of Bank, in light of the factors commercial banks in the market and the deposits of the branch set forth in section 3(c) of the Act (12 U.S.C. represent 0.1 percent of the market's deposits. If it is assumed that § 1842(c)).1 Applicant will acquire Bank in the future, Applicant's resulting market share would be 6.2 percent. The acquisition would not result in a substantial lessening of competition in the Trenton market. 5. "Policy Statement of the Board of Governors of the Federal 1. The Board received approximately 200 comments from busi- Reserve System for Assessing Competitive Factors Under the Bank nesses and individuals in the community alleging that Applicant's Merger Act and the Bank Holding Company Act," 47 Federal acquisition of shares of Bank would result in a decline in service for Register 9017 (1982). While the proposed policy statement has not Bank's customers and that Bank would be less receptive to the been adopted by the Board, the Board is using the policy Guidelines as convenience and needs of the community. The Board has reviewed part of its analysis of the effect of a proposal on probable future Applicant's operations and its record in serving the needs of the competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 639 factory. Accordingly, the Board concludes that bank- by the Board or by the Federal Reserve Bank of New ing factors are consistent with approval of the applica- York, pursuant to delegated authority. tion.6 By order of the Board of Governors, effective In reaching this conclusion, the Board has consid- June 17, 1985. ered comments concerning this application from Bank, which has protested the application on the grounds Voting for this action: Chairman Volcker and Governors that managerial factors are substantially adverse be- Wallich, Partee, Rice, Gramley, and Seger. Absent and not cause of Applicant's alleged violation of the control voting: Governor Martin. provisions of the Board's Regulation Y in its attempt JAMES MCAFEE to acquire Bank. Bank argues that the option agree- [SEAL] Associate Secretary of the Board ment for the 8.8 percent of Bank's shares triggers the rebuttable presumption of control set forth in the Board's Regulation Y7 because the option was pur- First National Vermont Corporation chased on January 31, 1985, and expires on December Springfield, Vermont 31, 1985. The Board concludes that Applicant filed for the Board's approval on a timely basis and that the Order Approving the Acquisition of a Bank duration of the option is not unreasonable.8 Bank also argues that the price paid for this option is likely to First National Vermont Corporation, Springfield, Verdiffer substantially from the price paid for additional mont, a bank holding company within the meaning of shares of Bank if Bank is eventually merged into a the Bank Holding Company Act of 1956, as amended subsidiary of Applicant. The Board, however, may not ("Act"), has applied for the Board's approval under deny an application solely upon the inequality of the section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to offers made to minority shareholders.9 Bank has raised acquire the voting shares of The Caledonia National a number of other issues, which the Board finds do not Bank of Danville, Danville, Vermont ("Bank"). reflect adversely on the management of Applicant.10 Notice of the application, affording an opportunity On the basis of all the facts of record, the Board for interested persons to submit comments, has been does not believe that Bank's comments present suffi- given in accordance with section 3(b) of the Act. The cient evidence of any adverse effects to warrant denial time for filing comments has expired, and the Board of this application. Considerations relating to the con- has considered the application and all comments revenience and needs of the community to be served ceived in light of the factors set forth in section 3(c) of also are consistent with approval. the Act (12 U.S.C. § 1842(c)). Based on the foregoing and other facts of record, the Applicant is the eighth largest commercial banking Board has determined that the proposed acquisition is organization in Vermont with total deposits of approxin the public interest and that the application should be imately $108.2 million, representing 3.3 percent of the approved. Accordingly, the application is approved total deposits in commercial banks in the state.1 Bank, for the reasons summarized above. The transaction with total assets of $44.0 million, is the sixteenth shall not be consummated before the thirtieth calendar largest commercial banking organization in Vermont, day following the effective date of this Order, or later and holds total deposits of $40.7 million, representing than three months after the effective date of this 1.25 percent of the total deposits in commercial banks Order, unless such period is extended for good cause in the state. Upon consummation of the proposed acquisition, assuming no divestiture by Applicant, Applicant would remain the eighth largest banking organization in Vermont, and would hold $148.9 mil- 6. The Board has previously indicated that the acquisition of less than a 25 percent interest in the voting shares of a bank is not a normal lion in deposits, representing 4.6 percent of the total acquisition for a bank holding company. Midlantic Banks, Inc., 70 deposits in commercial banks in the state. According- FEDERAL RESERVE BULLETIN 776 (1984). Although this acquisition is ly, the Board concludes that consummation of this less than an absolute controlling interest in Bank, Applicant has informed the Board of its plans to acquire a controlling interest in acquisition would not have any significantly adverse Bank in the near future. effects on the concentration of commercial banking 7. 12 C.F.R. § 225.31(d)(l)(ii)(c). resources in Vermont. 8. See, Suburban Bancorp, Inc., 71 FEDERAL RESERVE BULLETIN 581. Applicant is presently the smallest of five commer- 9. Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 cial banking organizations in the St. Johnsbury bank- (10th Cir. 1973). 10. Bank alleges that the seller of the option has violated federal securities laws by her purchase of the shares that are subject to the option. Applicant was not involved in the transactions leading to seller's purchase of the shares, and thus the seller's actions do not 1. Unless otherwise indicated, banking data are as of December 31, reflect on Applicant's managerial resources. 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin • August 1985 ing market.2 Applicant's subsidiary bank, the First would be completed before or contemporaneously National Bank of Vermont, Springfield, Vermont, with Applicant's consummation of the proposed acquimaintains branch facilities in St. Johnsbury, which sition of Bank.7 Applicant's divestiture commitment control 8.3 percent of the total deposits in commercial and the contract of sale included with the application banks in the market.3 Bank is the third largest com- do not, however, cover any portion of Applicant's mercial banking organization in the market and con- loan portfolio and Applicant proposes to retain the trols 23.9 percent of the total deposits in commercial loans allocable to its St. Johnsbury branch (approxibanks in the market. After consummation of the mately $8.4 million) after consummation of the acquiproposal, absent any divestiture, Applicant would sition. become the largest commercial banking organization The Board normally will not consider a divestiture in the market, and would control 32.1 percent of the involving the sale of market deposits and branch market's total deposits in commercial banks. The facilities "complete" for purposes of analyzing the Herfindahl-Hirschman Index ("HHI") in the market effects of a proposed acquisition on competition unless would increase by 395 points to 2714, and the market the divestiture also provides for the prior or contempowould be considered highly concentrated.4 In view of raneous sale of all or substantially all of the commerthese and other facts of record,5 the Board concludes cial loans and other assets that are properly allocable that, in the absence of the divestiture proposed by to the office or facility being divested.8 The Board Applicant and discussed below, consummation of the expects that future bank holding company applicants proposed acquisition would have significantly adverse will arrange their proposals accordingly. However, the effects on existing competition in the St. Johnsbury Board recognizes that special circumstances in this banking market. case justify an exception to this policy. In particular, In connection with this proposal, Applicant has the Board notes that as a result of the executed committed to divest its St. Johnsbury branch office contract of sale included with this application, a facilities and its deposit accounts associated with strong, aggressive competitor would enter the St. those facilities to a third financial institution not pres- Johnsbury banking market simultaneously with conently represented in the market.6 The divestiture summation of the proposed transaction. In addition, Applicant in this case has documented its persistent and good faith efforts to divest the loans in question.9 The Board notes that a provision of the contract of sale prohibits Applicant for six months from soliciting 2. The St. Johnsbury banking market is approximated by all of customers of the divested branch to shift their deposit Caledonia County, Vermont, less the towns of Groton, Hardwick, accounts or other banking business to the Applicant; Ryegate, Stannard, and Walden, together with the Essex County towns of Concord, East Haven, Granby, and Victory. that borrowers having loans at the branch may, under 3. Market data are as of June 30, 1984. 4. Under the revised Department of Justice Merger Guidelines (49 Federal Register 26,823 (June 29, 1984)), any market in which the post-merger HHI is above 1800 is considered highly concentrated. In such markets, the Department is likely to challenge any merger that produces an increase in the HHI of more than 50 points unless other and deposit accounts allocable to Applicant's St. Johnsbury branch factors indicate that the merger will not substantially lessen competi- offices. Merchants, with deposits of $262 million, or 8.8 percent of the tion. If, as here, the increase in the HHI exceeds 100 points and the statewide total, was, as of June 30, 1984, the fifth largest commercial HHI substantially exceeds 1800, the Department has indicated that banking organization in Vermont, and is reportedly one of the more only in extraordinary cases will other factors establish that the merger aggressive in its marketing efforts. is not likely substantially to lessen competition. However, the Depart- 7. In this respect, Applicant's proposed divestiture conforms to the ment has submitted no formal objection to the instant proposal. requirement announced in Barnett Banks of Florida, Inc., 68 FEDER- 5. In this connection, the Board has considered as a mitigating AL RESERVE BULLETIN 190 (1982); see also InterFirst Corporation, 68 factor in this case the presence in the market of a single thrift FEDERAL RESERVE BULLETIN 243, 244 (1982). insititution. CB & T Banc shares, Inc., 71 FEDERAL RESERVE BULLE- 8. There have been instances where portions of an applicant's TIN 337-338; First Bancorp of New Hampshire, Inc., 68 FEDERAL allocable loan portfolio, such as residential real estate mortgages and RESERVE BULLETIN 769, 770 (1982). The thrift, which is the largest credit card receivables, have not been sold. However, in this case, the depository institution in the market, engages to some extent in applicant proposes to retain all of the loans originated at the divested commercial lending and accepts commercial checking accounts. If 50 branch office. Normally, this arrangement would not be regarded a percent of the deposits held by this thrift were included in the "complete" divestiture under the Board's policy announced in Barcalculation of market concentration, Applicant's existing share of nett Banks of Florida, Inc., supra. market deposits would be 6.3 percent; Bank's share of market 9. Applicant has submitted correspondence from seven Vermont deposits would be 18.3 percent; and their combined share of market banking institutions expressing their lack of interest in purchasing deposits as a result of this proposal would be 24.6 percent. The Applicant's St. Johnsbury branch. In addition, Applicant has indicatmarket's HHI would increase 230 points as a result of the acquisition ed that the loans, totalling approximately $8.4 million, include approxto 2137, and the market would accordingly be considered highly imately $800,000 in loans that are involved in litigation or foreclosure, concentrated. and $3.7 million in real estate loans at rates of interest that are 6. Pursuant to the Agreement and Plan of Acquisition and Assump- substantially below market rates. Substantially all of the remainder of tion dated February 11, 1985, included in the application, The the loans can be characterized as short term. According to Applicant, Merchants Bank, Burlington, Vermont ("Merchants"), will acquire the purchaser of Applicant's St. Johnsbury branch was simply not all of Applicant's land, office facilities, furniture, fixtures, equipment, interested in purchasing the loans originated at that facility. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 641 the contract of sale, continue to make loan payments Louisiana Bancshares, Inc. at the branch following its divestiture by Applicant; Baton Rouge, Louisiana and that the branch manager and other branch personnel will be transferred from the employ of Applicant to Order Approving Merger of Bank Holding the employ of the acquiring bank contemporaneously Companies with the divestiture. The Board also notes that the offices of Bank to be acquired by Applicant pursuant Louisiana Bancshares, Inc., Baton Rouge, Louisiana, to this proposal are in a separate town seven miles a bank holding company within the meaning of the away from the branch to be divested. In light of these Bank Holding Company Act of 1956, as amended facts, and the additional fact that no compensating (12 U.S.C. § 1841, et seq.) ("Act"), has applied for (deposit) balance requirements are associated with the the Board's approval under section 3(a)(5) of the Act loans to be retained by Applicant, the Board concludes (12 U.S.C. § 1842(a)(5)) to acquire Guaranty Bancthat the branch divestiture proposed in this case will shares, Inc., Lafayette, Louisiana ("Guaranty") and be effective and complete, notwithstanding Appli- indirectly to acquire Guaranty Bank, Lafayette, Louicant's retention of loans allocable to the divested siana. facility. Notice of this application, affording an opportunity The Board accordingly concludes that the applica- for interested persons to submit comments, has been tion should be approved on the condition that Appli- given in accordance with section 3 of the Act. The time cant divest its St. Johnsbury branch facilities as pro- for filing comments has expired, and the Board has vided in the contract of sale included in the application considered the application and all comments received, prior to or contemporaneously with Applicant's con- in light of the factors set forth in section 3(c) of the Act summation of its acquisition of Bank. Based upon this (12 U.S.C. § 1842 (c)). condition, the Board's judgment is that consummation Applicant, the largest commercial banking organizaof the acquisition and divestiture plan described in the tion in Louisiana, controls total domestic deposits of application would not have any significantly adverse $2.4 billion, representing 8.6 percent of the total effects upon existing or potential competition, or on deposits in commercial banks in the state.1 Guaranty, the concentration of banking resources in any relevant the seventh largest commercial banking organization market. in Louisiana, controls $654.9 million in domestic de- The financial and managerial resources of Applicant posits, representing 2.4 percent of the total deposits in and Bank are considered satisfactory and their pros- commercial banks in the state. Upon consummation of pects appear favorable. The Board has also deter- this transaction, Applicant's share of the total deposits mined that considerations relating to the convenience in commercial banks in Louisiana would increase to and needs of the community to be served are consis- 11.0 percent. tent with approval of the application. Accordingly, it is The Board has carefully considered the effects of the the Board's judgment that the proposed transaction proposal on statewide banking structure and upon would be in the public interest and that the application competition in the relevant markets. The proposal should be approved. involves a combination of sizeable commercial bank- Based on the foregoing and other facts of record, the ing organizations that are among the leading banking Board has determined that the application under sec- organizations in the state. However, Louisiana is one tion 3(a)(3) should be and hereby is approved for the of the least concentrated states in terms of banking reasons set forth above. The transaction shall not be resources,2 with the four largest commercial banking consummated before the thirtieth calendar day follow- organizations in the state controlling 29.4 percent of ing the effective date of this Order or later than three the total deposits in commercial banks in the state. months after the effective date of this Order, unless Upon consummation, the four-firm concentration ratio such period is extended by the Board or by the Federal Reserve Bank of Boston, acting pursuant to delegated authority. By order of the Board of Governors, effective June 3, 1985. Voting for this action: Chairman Volcker and Governors 1. Banking data are as of June 30, 1984 and market data are as of Martin, Partee, Gramley, and Seger. Absent and not voting: June 30, 1983, unless otherwise noted. 2. Louisiana, formerly a unit-banking state, recently passed legisla- Governors Wallich and Rice. tion that permits multibank holding companies in the state. 1984 Louisiana Acts No. 50. The new law permits a bank holding company JAMES MCAFEE to acquire a bank outside of the holding company's parish if the bank [SEAL] Associate Secretary of the Board has been in existence for at least five years. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin • August 1985 would increase to 31.7 percent and the state would MCorp remain unconcentrated.3 Dallas, Texas Guaranty and Applicant do not operate subsidiary banks in the same markets. Therefore, consummation MCorp Financial, Inc. of the proposal would not eliminate existing competi- Wilmington, Delaware tion in any relevant geographic market. The Board has considered the effects of this propos- Order Approving Acquisition of a Bank al on probable future competition and also examined the proposal in light of its proposed guidelines for MCorp, Dallas, Texas, and its wholly owned subsidassessing the competitive effects of market extension iary, MCorp Financial, Inc., Wilmington, Delaware, mergers and acquisitions4 in the markets in which both bank holding companies within the meaning of Applicant or Guaranty, but not both, compete.5 In the Bank Holding Company Act ("Act"), have applied view of the number of probable future entrants into for the Board's approval under section 3(a)(3) of the each of these markets, the Board concludes that Act (12 U.S.C. § 1842(a)(3)) to acquire 100 percent of consummation of this proposal would not have any the voting shares of MBank USA, Wilmington, Delasignificant adverse effects on probable future competi- ware ("Bank"), a proposed new bank. tion in any relevant market. Notice of the application, affording interested per- The financial and managerial resources of Applicant sons an opportunity to submit comments, has been and Guaranty are regarded as satisfactory and consis- given in accordance with section 3(b) of the Act. The tent with approval of the proposal. Considerations time for filing comments has expired, and the Board relating to the convenience and needs of the communi- has considered the application and all comments rety to be served are also consistent with approval of the ceived in light of the factors set forth in section 3(c) of proposal. the Act (12 U.S.C. § 1842(c)). Based on the foregoing and other facts of record, the Applicant, with total consolidated assets of $20.7 Board has determined that the application under sec- billion, is the 22nd largest commercial banking organition 3(a)(5) should be, and hereby is, approved for the zation in the nation. It presently operates 67 banking reasons set forth above. The transaction shall not be subsidiaries in Texas and is the largest commercial consummated before the thirtieth calendar day follow- banking organization in the state with total domestic ing the effective date of this Order, or later than three deposits of $16.6 billion.1 Applicant also engages months after the effective date of this Order, unless through subsidiaries in a variety of nonbanking activisuch period is extended for good cause by the Board or ties. the Federal Reserve Bank of Atlanta, acting pursuant Bank is a newly chartered state bank formed to to delegated authority. engage primarily in consumer lending through its cred- By order of the Board of Governors, effective it card program. Upon consummation of this proposal, June 27, 1985. Applicant would transfer its existing credit card operations, now conducted through offices in Texas, to Voting for this action: Vice Chairman Martin and Gover- Bank. Section 3(d) of the Bank Holding Company Act nors Wallich, Partee, Rice, Gramley, and Seger. Absent and (12 U.S.C. § 1842(d)) prohibits the Board from apnot voting: Chairman Volcker. proving any application by a bank holding company to acquire any bank located outside the state in which the JAMES MCAFEE operations of the bank holding company's banking [SEAL] Associate Secretary of the Board subsidiaries are principally conducted unless the acquisition is "specifically authorized by the statute laws of the state in which such bank is located, by language to that effect and not merely by implication." On 3. Statewide concentration data take into account the pending merger between First Commerce Corporation and First Lafayette February 19, 1981, and on August 13, 1984, the State Bancorp, Inc., approved by the Board on May 20, 1985. First of Delaware amended its banking laws to permit an Commerce Corporation, 71 FEDERAL RESERVE BULLETIN 586 (1985). out-of-state bank holding company to acquire not 4. "Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Bank more than two de novo banks that will be "operated in Merger Act and the Bank Holding Company Act," 47 Federal a manner and at a location that is not likely to attract Register 9017 (1982). While the proposed policy statement has not customers from the general public in [Delaware] to the been approved by the Board, the Board is using the policy guidelines as part of its analysis of the effect of a proposal on probable future competition. 5. These banking markets are the Lafayette, Baton Rouge, Monroe, and Shreveport markets. In addition, Applicant has received approval to acquire the 3rd largest bank in Iberia Parish and has an application pending to acquire the 2nd largest bank in La Foruche Parish. 1. Banking data are as of December 31, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 643 substantial detriment of existing banking institutions that will provide Applicant with increased income located in this state."2 opportunities and will have minimal effect on Appli- The proposed acquisition under the Delaware law is cant's primary and total capital ratios. In the context subject to approval by the State Bank Commissioner of this application, the Board concludes that financial who, in acting on the application, must consider the and managerial considerations are consistent with financial and managerial resources of the out-of-state approval of the application. bank holding company or its subsidiary, the financial Upon consummation of this proposal, Applicant history and future prospects of such company, wheth- plans to offer Bank's customers new products and er the acquisition may result in undue concentration of services not currently available to them. Such services resources or substantial lessening of competition in include a premium service credit card, travel insur- Delaware, and the convenience and needs of the ance, and credit card registration. Accordingly, the public in Delaware. On March 7, 1985, the State Board concludes that factors relating to the conve- Banking Commissioner of Delaware preliminarily ap- nience and needs of the community to be served are proved Applicant's formation and acquisition of Bank. consistent with approval of the application. Based on the foregoing, the Board has determined, as While this application is being approved, the Board required by section 3(d) of the Act, that the proposed has previously expressed its concern about the prolifacquisition conforms to Delaware law and is specifi- eration of statutes of this type which permit the entry cally authorized by the statute laws of Delaware. of out-of-state bank holding companies in order to shift Under the limitations imposed by Delaware law on jobs and revenues from other states, while limiting the Bank's operations, it is not likely that Bank will be a in-state activities of out-of-state owned banks so as to significant competitor in the Delaware-New Jersey- avoid competition with in-state banking organiza- Maryland PMSA banking market.3 The Board notes tions.4 These statutes do not appear to be based on that Bank will engage primarily in consumer lending appropriate public policy considerations for assuring a through its credit card operations. Bank will continue stable and sound banking system locally and nationto provide consumer credit card services in Texas and wide, and the end result of their adoption by other intends in the near future to offer such credit card states can only be a serious impairment of banking services in Oklahoma, Arkansas, Louisiana, and New standards and no net gains in jobs or revenues because Mexico. The Board notes that this proposal represents of the proliferation. a reorganization of Applicant's existing credit card Based on the foregoing and other facts of record, the operations. However, Bank will provide additional Board has determined that approval of the application consumer credit card services on a de novo basis. would be consistent with the public interest and that Accordingly, the Board concludes that the proposal the application should be and hereby is approved. The will not have adverse effects on competition in any transaction shall not be consummated before the thirtirelevant area, and that the overall competitive effects eth calendar day following the effective date of this of the proposal are consistent with approval of the Order, or later than three months after the effective application. date of this Order, and Bank shall be opened for In evaluating this application, the Board has consid- business not later than six months after the effective ered the financial and managerial resources of Appli- date of this Order. The latter two periods may be cant and the effect of this proposal on these resources. extended for good cause by the Board or by the In its assessment of Applicant's capital adequacy, the Federal Reserve Bank of Dallas, acting pursuant to Board notes that Applicant's existing primary and delegated authority. total capital ratios are above the minimum levels By order of the Board of Governors, effective specified for bank holding companies under the June 25, 1985. Board's guidelines without undue reliance on goodwill. Also, the Board has viewed the proposed acquisi- Voting for this action: Vice Chairman Martin and Govertion in the context of a relocation of existing activities nors Wallich, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governors Partee and Seger. JAMES MCAFEE [SEAL] Associate Secretary of the Board 2. Del. Code Ann. tit. 5, § 803 (Supp. 1984). The law provides, however, that each such bank may be operated to attract and retain customers with whom that bank, the out-of-state holding company, or the holding company's banking and nonbanking subsidiaries have or have had business relations. 3. The Delaware-New Jersey-Maryland PMSA banking market is approximated by Cecil County, Maryland, Salem County, New Jersey, and New Castle County, Delaware. 4. See, Citicorp, 71 FEDERAL RESERVE BULLETIN 101 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin • August 1985 Midwest Bancshares, Inc. The Board has considered the effects of this propos- Poplar Bluff, Missouri al upon potential competition in the respective markets where Chaffee Bank and Bank of Piedmont pres- Order Approving Acquisition of a Bank and Merger ently operate but Applicant does not. The Board has with a Bank Holding Company also considered the effects of this proposal in light of its proposed guidelines for assessing the competitive Midwest Bancshares, Inc. ("Midwest"), Poplar Bluff, effects of market extension mergers and acquisitions.3 Missouri, a bank holding company within the meaning With respect to the Wayne County market, Applicant of the Bank Holding Company Act of 1956, as amend- is not considered a probable future entrant and that ed ("Act"), 12 U.S.C. § 1841 et seq., has applied for market is not considered attractive for entry. With the Board's approval under section 3(a)(3) of the Act, respect to the Cape Girardeau market, that market is 12 U.S.C. § 1842(a)(3), to acquire all of the voting not highly concentrated. Accordingly, neither of these shares of Bank of Piedmont, Piedmont, Missouri. In a markets would require extensive analysis under the related application, Midwest has applied under section Board's proposed guidelines, and the Board concludes 3(a)(5) of the Act, 12 U.S.C. § 1842(a)(5), to merge that consummation of this proposal would not have any significant adverse effects on probable future with Chaffee Bancorporation ("Chaffee"), Chaffee, competition in any relevant market. Missouri, a bank holding company by virtue of its control of Bank of Chaffee ("Chaffee Bank"), Chaffee, Where principals of an applicant are engaged in Missouri. operating a chain of banking organizations, in addition Notice of the applications, affording an opportunity to analyzing the proposal before it, the Board also for interested persons to submit comments, has been considers the entire chain and analyzes the financial given in accordance with section 3(b) of the Act. The resources and future prospects of the chain in light of time for filing comments has expired, and the Board the Board's Capital Adequacy Guidelines.4 Based on has considered the applications and all comments the facts of record, the Board concludes that the received in light of the factors set forth in section 3(c) financial and managerial resources and future prosof the Act, 12 U.S.C. § 1842(c). pects of Applicant, Dexter Bank, Bank of Piedmont, Applicant has one subsidiary bank, First State Bank Chaffee, Chaffee Bank, and the other banks in the of Dexter ("Dexter Bank"), Dexter, Missouri. Dexter chain are consistent with approval of these applica- Bank, Bank of Piedmont, and Chaffee Bank are among tions, particularly in light of a capital commitment the smaller banks in Missouri, and control total depos- made in connection with these applications. Although its of $22.5, $21.0, and $13.7 million, respectively.1 the Board previously denied an application by Appli- The deposits controlled by each of these institutions cant to acquire Bank of Piedmont,5 the present proposal is strengthened by the proposed merger of represent less than 0.1 percent of the deposits in Applicant and Chaffee. Considerations relating to the commercial banks in the state. Upon consummation of convenience and needs of the communities to be this proposal, Applicant would remain one of the served also are consistent with approval. smaller commercial banking organizations in Missouri, and would control approximately 0.2 percent of the Based on the foregoing and other facts of record, the deposits in the state. Accordingly, the Board con- Board has determined that the applications should be cludes that consummation of this proposal would have and hereby are approved. The transaction shall not be no significant effect upon the concentration of banking consummated before the thirtieth calendar day followresources in Missouri. ing the effective date of this Order, or later than three Dexter Bank, Bank of Piedmont, and Chaffee Bank months after the effective date of this Order, unless do not compete in the same banking market.2 Accord- such period is extended for good cause by the Board or ingly, the Board concludes that consummation of this proposal would not have a significant adverse effect upon existing competition in any relevant market. 3. "Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Bank Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (1982). While the proposed policy statement has not been approved by the Board, the Board is using the policy guidelines 1. Banking data are as of September 30, 1984. as part of its analysis of the effect of a proposal on probable future 2. Dexter Bank, Bank of Piedmont, and Chaffee Bank operate in competition. the Dexter, Wayne County, and Cape Girardeau markets, respective- 4. E.g., Fourth National Corporation, 70 FEDERAL RESERVE BULly. The Dexter market is approximated by the portion of Stoddard LETIN 730 (1984); Unicorp Bancshares, Inc., 69 FEDERAL RESERVE County, Missouri, that lies north of highways D and H. The Wayne BULLETIN 808 (1983); and First Carmen Bancshares, Inc., 69 FEDER- County market is approximated by Wayne County, Missouri. The AL RESERVE BULLETIN 801 (1983). Cape Girardeau market is approximated by Cape Girardeau County, 5. Midwest Bancshares, Inc., 71 FEDERAL RESERVE BULLETIN 103 and the northern portion of Scott County, both in Missouri. (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 645 by the Federal Reserve Bank of St. Louis pursuant to largest commercial banking organization in the state, delegated authority. controlling 0.8 percent of the total deposits in commer- By order of the Board of Governors, effective cial banking organizations in the state. Lake View June 18, 1985. controls deposits of $516 million and Northbrook controls deposits of $133.5 million. Upon consumma- Voting for this action: Chairman Volcker and Governors tion of this proposal, Applicant would become the Wallich, Partee, Rice, Gramley, and Seger. Absent and not sixth largest commercial banking organization in the voting: Governor Martin. state, controlling deposits of $1.4 billion, representing 1.5 percent of total deposits in commercial banking JAMES MCAFEE organizations in the state. Consummation of the trans- [SEAL] Associate Secretary of the Board action would not have any significant adverse effects upon the concentration of banking resources in the state. Northwestco, Inc. Applicant is the seventh largest banking organiza- Northbrook, Illinois tion in the Chicago banking market,2 controlling 1.2 percent of the total deposits in commercial banks in Order Approving Acquisition of Bank Holding the market. Lake View and Northbrook control re- Companies spectively 0.8 and 0.2 percent of total deposits in commercial banks in the market. Upon consummation Northwestco, Inc., Northbrook, Illinois, a bank hold- of this proposal, Applicant would become the fifth ing company within the meaning of the Bank Holding largest banking organization in the banking market, Company Act ("the BHC Act") (12 U.S.C. § 1841 controlling 2.2 percent of total deposits in commercial et seq.), has applied for the Board's approval under banks in the market. section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to In analyzing the competitive effects of an applicaacquire all of the voting shares and 100 percent of the tion to reorganize ownership of banking organizations nonvoting Class A preferred shares of Lake View under common control, the Board considers the com- Bancorp, Inc. ("Lake View"), Northbrook, Illinois, petitive effects of the transaction whereby common and 100 percent of the voting shares and 100 percent of ownership was established. Applicant's principal connonvoting Class A and Class B preferred shares of trols another bank located in the Chicago banking Northbrook Bancorp, Inc. ("Northbrook"), North- market, Pioneer Bank and Trust, Chicago, Illinois. In brook, Illinois. Applicant would thereby acquire con- its Order approving the application of Lake View to trol of Lake View Trust and Savings Bank, Chicago, become a bank holding company, the Board consid- Illinois, and Northbrook Trust & Savings Bank, ered the competitive effect of the affiliation of these Northbrook, Illinois. banks and concluded that given the size of the banking Notice of this application, affording an opportunity organizations and the structure of the Chicago banking for interested persons to submit comments and views, market, the combination of these banking organizahas been given in accordance with section 3 of the tions would have no significant adverse effects upon BHC Act. The time for filing comments and views has competition within that market.3 Accordingly, the expired and the Board has considered the application Board concludes that competitive considerations are and all comments received in light of the factors set consistent with approval of this proposal. forth in section 3(c) of the BHC Act (12 U.S.C. The financial and managerial resources and future § 1842(c)). prospects of Applicant, its banking subsidiary, the Applicant is a one-bank holding company by virtue bank holding companies to be acquired and their of its control of Northwest National Bank of Chicago, affiliates are considered consistent with approval. Chicago, Illinois. Applicant's principals control Lake While Applicant proposes to incur debt in connection View and Northbrook and this proposal represents the with its proposal, it appears that Applicant will be able reorganization of control of these three banking orga- to service its debt while maintaining the capital level nizations into a single multibank holding company. required under the Board's guidelines. Considerations Applicant, with deposits of $782 million,1 is the eighth relating to the convenience and needs of the communities to be served are also consistent with approval. 1. All banking data are as of June 30, 1984, and the deposits of Applicant include the deposits held by Pioneer Bank and Trust 2. The Chicago banking market consists of Cook, Lake, and Company, Chicago, Illinois, which is also owned by Applicant's DuPage Counties, all in Illinois. principals. 3. 63 FEDERAL RESERVE BULLETIN 1017 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin • August 1985 Based on the foregoing and other facts of record, the senting 1.1 percent of the total deposits in commercial Board has determined that the application under sec- banks in the state. Upon merging with Mid-South, tion 3(a)(3) should be and hereby is, approved. The Applicant would control deposits of $3.51 billion, transaction shall not be consummated before the thirti- representing 13.5 percent of the total deposits in eth calendar day following the effective date of this commercial banks in the state, and would remain the Order, or later than three months after the effective second largest commercial banking organization in the date of this Order, unless such period is extended for state. The merger would have no significant effect on good cause by the Board, or by the Federal Reserve the concentration of banking resources in Tennessee. Bank of Chicago, acting pursuant to delegated author- Applicant and Mid-South compete directly in the ity. Nashville banking market.2 Applicant is the largest of By order of the Board of Governors, effective 18 commercial banking organizations in the market, June 20, 1985. with deposits of $1.29 billion, representing 26.2 percent of the total deposits in commercial banks in the Voting for this action: Governors Partee, Rice, Gramley, market. Mid-South is the sixth largest commercial and Seger. Absent and not voting: Chairman Volcker and banking organization in the market, with deposits of Governors Martin and Wallich. $187 million, representing 3.8 percent of the total deposits in commercial banks in the market. Upon JAMES MCAFEE merging with Mid-South, Applicant would control 30.0 [SEAL] Associate Secretary of the Board percent of the total deposits in commercial banks in the market. The Nashville banking market is concentrated, with Third National Corporation the three largest commercial banking organizations Nashville, Tennessee controlling 72.3 percent of the total deposits in commercial banks in the market, and with a Herfindahl- Order Approving Merger of Bank Holding Hirschman Index ("HHI") of 1858. The proposed Companies merger would increase the HHI by 199 points to 2057 and would thus be subject to challenge under the Third National Corporation, Nashville, Tennessee, a Department of Justice Merger Guidelines.3 bank holding company within the meaning of the Bank Although the proposed merger would eliminate ex- Holding Company Act ("Act") (12 U.S.C. § 1841 isting competition between Applicant and Mid-South et seq.), has applied for the Board's approval under in the Nashville banking market, the Board notes that section 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to 17 competitors, including five of the state's six largest merge with Mid-South Bancorp, Inc., Murfreesboro, commercial banking organizations, would remain in Tennessee ("Mid-South"), also a bank holding com- the market. In addition, the Board has concluded that pany. As a result of the merger, Mid-South's subsid- the effect of the merger on existing competition is iary bank, Mid-South Bank and Trust Company, Mur- mitigated by the extent of competition offered by thrift freesboro, Tennessee ("Bank"), would become a institutions in the Nashville market.4 Ten thrift institudirect subsidiary of Applicant. Notice of the application, affording interested persons an opportunity to submit comments, has been 2. The Nashville banking market consists of Davidson, Rutherford, given in accordance with section 3(b) of the Act Williamson, and Wilson Counties, and the southern halves of Robertson and Sumner Counties, all in Tennessee. (12 U.S.C. § 1842(b)). The time for filing comments 3. Under the revised Department of Justice Merger Guidelines (49 has expired, and the Board has considered the applica- Federal Register 26,823 (1984)), a market in which the post-merger HHI is above 1800 is considered highly concentrated, and the Departtion and all comments received in light of the factors ment is likely to challenge a merger that increases the HHI by 50 set forth in section 3(c) of the Act (12 U.S.C. points or more unless other facts of record indicate that the merger is § 1842(c)). not likely substantially to lessen competition. Other factors include the post-merger HHI, the increase in the HHI, changing market Applicant is the second largest commercial banking conditions, the financial condition of the firm to be acquired, ease of organization in Tennessee and controls deposits of entry, nature of the product, substitute products, similarities in firms $3.21 billion, representing 12.4 percent of the total that are subject to the transaction, and increased efficiencies that may result from the transaction. deposits in commercial banks in the state.1 Mid-South The Department has not advised the Board of any objection to is the tenth largest commercial banking organization in Applicant's proposed merger with Mid-South. the state and controls deposits of $297 million, repre- 4. The Board has previously determined that thrift institutions have become, or at least have the potential to become, major competitors of banks. NCNB Corporation, 70 FEDERAL RESERVE BULLETIN 225 (1984); Sun Banks, Inc., 69 FEDERAL RESERVE BULLETIN 934 (1983); Merchants Bancorp, Inc., 69 FEDERAL RESERVE BULLETIN 865 1. Statewide banking data are as of June 30, 1984. Data for local (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE banking markets are as of June 30, 1983. BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 647 tions with 53 offices in the market hold total deposits and hereby is approved. The merger shall not be of $1.39 billion, representing 22.1 percent of the total consummated before the thirtieth calendar day followdeposits in the market. Most of those institutions offer ing the effective date of this Order, or later than three NOW accounts and make consumer loans and com- months after the effective date of this Order, unless mercial real estate loans; half engage in additional that period is extended for good cause by the Federal commercial lending. In view of those facts, the Board Reserve Bank of Atlanta, pursuant to delegated auconsiders the presence of thrift institutions as a signifi- thority, or by the Board. cant factor in assessing the competitive effects of the By order of the Board of Governors, effective proposed merger, and has determined that the merger June 19, 1985. is not likely to have a significant adverse effect on existing competition in the Nashville banking market.5 Voting for this action: Governors Partee, Rice, Gramley, Mid-South operates in the Franklin County, Smith and Seger. Absent and not voting: Chairman Volcker and Governors Martin and Wallich. County, and Warren County banking markets, where Applicant does not currently compete.6 The Board has examined the effect of the proposed merger upon JAMES MCAFEE probable future competition in those markets in light [SEAL] Associate Secretary of the Board of the Board's proposed market extension guidelines.7 None of the markets is in a metropolitan statistical area, and under the Board's guidelines, none would be United Banks of Colorado, Inc. considered attractive for entry.8 The Board has ac- Denver, Colorado cordingly concluded that the proposed merger would have no significant adverse effect on probable future Order Approving Acquisition of a Bank competition in any of those markets. The financial and managerial resources and future United Banks of Colorado, Inc., Denver, Colorado, a prospects of Applicant and Mid-South are considered bank holding company within the meaning of the Bank satisfactory and consistent with approval of the appli- Holding Company Act ("Act") (12 U.S.C. § 1841 cation. et seq.), has applied for the Board's approval under Applicant plans to have Bank offer new services, section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to including commercial leasing, international banking, acquire all of the voting shares of The Colorado trust, financial counseling, and cash management ser- Springs National Bank, Colorado Springs, Colorado vices, and FHA, VA, and secondary-market mortgage ("Bank"). lending. Bank's customers would also gain access to a Notice of the application, affording an opportunity much larger ATM network. In addition, the merger for interested persons to submit comments, has been would allow Bank to meet the credit needs of larger given in accordance with section 3(b) of the Act. The commercial customers. Thus, considerations related time for filing comments has expired, and the Board to the convenience and needs of the communities to be has considered the application and all comments reserved lend weight toward approval of the application. ceived in light of the factors set forth in section 3(c) of Based on the foregoing and other facts of record, the the Act (12 U.S.C. § 1842(c)).1 Board has determined that the application should be Applicant, the largest banking organization in Colorado, controls 31 banks with total deposits of approximately $3.1 billion, representing approximately 17.3 5. If 50 percent of the deposits held by thrift institutions were percent of the total deposits in commercial banks in included in the calculation of market concentration, the pre-merger HHI would decrease to 1467. The proposed merger would increase the the state.2 Bank is the 8th largest commercial banking HHI by 153 points to 1620. Applicant's post-merger market share would be 23.4 percent. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating an anticompetitive effect) unless the merger 1. The Board received a protest from the Association of Communiincreases the HHI by at least 200 points and the post-merger HHI is at ty Organizations for Reform Now ("ACORN") a community group least 1800. that challenged Applicant's record of meeting the credit needs of its 6. Those banking markets respectively consist of Franklin County, community under the Community Reinvestment Act. ACORN with- Smith County, and Warren County, all in Tennessee. drew its protest after a meeting with Applicant, which resulted in an 7. "Policy Statement of the Board of Governors of the Federal agreement with Applicant for additional meetings with ACORN and Reserve System for Assessing Competitive Factors Under the Bank check cashing privileges for Government checks for persons who do Merger Act and the Bank Holding Company Act," 47 Federal not have accounts with Applicant's subsidiary banks. Register 9017 (1982). While the proposed policy statement has not 2. All banking data are as of December 31, 1983, and reflect the been adopted by the Board, the Board is using the policy Guidelines as Board's approval on November 26, 1984, for Applicant to acquire part of its analysis of the efFect of a merger on probable future IntraWest Bank of Colorado Springs, N.A. (71 FEDERAL RESERVE competition. BULLETIN 131 (1985)). Although this transaction has not been con- 8. In none of the three markets do the total deposits in commercial summated, the analysis of this proposal assumes that IntraWest Bank banks exceed $250 million. is a subsidiary of Applicant. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin • August 1985 organization in the state with total deposits of $185.2 engaged in the business of making commercial loans million, representing approximately 1.0 percent of the and are providing an alternative for such services in total deposits in commercial banks in the state. Upon the Colorado Springs market. Based upon the above acquisition of Bank, Applicant's share of the total considerations, the Board concludes that consummadeposits in commercial banks in the state would in- tion of the proposal is not likely to substantially lessen crease to 18.3 percent. Accordingly, consummation of competition in the Colorado Springs banking market.6 this proposal would not result in a significant increase The financial and managerial resources of Appliin the concentration of banking resources in Colorado. cant, its subsidiary banks, and Bank are consistent Applicant and Bank both operate in the Colorado with approval. Considerations relating to the conve- Springs banking market.3 Applicant, the fourth largest nience and needs of the communities to be served are commercial banking organization in the market, oper- also consistent with approval. Based on the foregoing ates four banking subsidiaries in the market that and other facts of record, the Board has determined control $125.2 million in deposits, representing 9.9 that consummation of the proposed transaction would percent of total deposits in commercial banks in the be in the public interest and that the application should market. Bank, with deposits of $185.2 million, is the be approved. third largest commercial banking organization in the On the basis of the record, the application is apmarket and controls 14.7 percent of total deposits in proved for the reasons summarized above. The acquicommercial banks in the market. Upon consummation sition shall not be consummated before the thirtieth of this transaction, Applicant would become the larg- calendar day following the effective date of this Order, est commercial banking organization in the market and or later than three months after the effective date of would control 24.6 percent of the total deposits in this Order, unless such period is extended for good commercial banks in the market. cause by the Board or by the Federal Reserve Bank of The Colorado Springs banking market is considered Kansas City pursuant to delegated authority. to be moderately concentrated, with the four largest By order of the Board of Governors, effective commercial banking organizations controlling 64.2 June 28, 1985. percent of the total deposits in commercial banks in the market. The Herfindahl-Hirschman Index Voting for this action: Vice Chairman Martin and Gover- ("HHI") is 1265 and would increase by 291 points to nors Wallich, Partee, Rice, Gramley, and Seger. Absent and 1576 upon consummation of this proposal.4 not voting: Chairman Volcker. Although consummation of the proposal would eliminate some existing competition between Applicant JAMES MCAFEE and Bank in the Colorado Springs banking market, [SEAL] Associate Secretary of the Board numerous other commercial banking organizations would remain as competitors after consummation of the proposal. In addition, the presence of ten thrift Orders Issued Under Section 4 of Bank Holding institutions that control approximately 39.4 percent of Company Act the market's total deposits mitigates the anticompetitive effects of the transaction.5 Thrift institutions al- Barnett Banks of Florida, Inc. ready exert a considerable competitive influence in the Jacksonville, Florida market as providers of NOW accounts and consumer loans. In addition, most of the thrift institutions are Order Approving Application to Engage in Credit Card Authorization Services and Lost/Stolen Credit 3. The Colorado Springs banking market is approximated by the Card Reporting Services Colorado Springs RMA. 4. Under the revised Department of Justice Merger Guidelines (49 Federal Register 26,823 (1984)), where a market has a post-merger Barnett Banks of Florida, Inc., Jacksonville, Florida, HHI of between 1000 and 1800 the Department is likely to challenge a a bank holding company within the meaning of the transaction that produces an increase in the HHI of more than 100 Bank Holding Company Act ("Act"), 12 U.S.C. points, unless other facts of record indicate that the merger is not likely to substantially lessen competition. The Department of Justice § 1841 et seq., has applied for the Board's approval, has informed the Board that a bank merger or acquisition generally pursuant to section 4(c)(8) of the Act (12 U.S.C. will not be challenged (in the absence of other factors indicating an anticompetitive effect) unless the post-merger HHI is at least 1800 and the increase in the HHI caused by the merger is at least 200. 5. The Board has previously indicated that thrift institutions have 6. If 50 percent of deposits held by thrift institutions in the become, or have the potential to become, major competitors of Colorado Springs banking market were included in the calculation of commercial banks. National City Corporation, 70 FEDERAL RESERVE market concentration, the share of total deposits held by the four BULLETIN 743 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE largest organizations in the market would be 48.5 percent. Applicant BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL would control 7.5 percent of the market's deposits and Bank would RESERVE BULLETIN 802 (1983); First Tennessee National Corpora- control 11.1 percent of the market's deposits. The HHI would tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). increase by 166 points to 976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 649 § 1843(c)(8)) and section 225.23 of the Board's Regula- Board has previously found these guidelines useful in tion Y (12 C.F.R. § 225.23), to engage de novo through determining whether there is a reasonable basis for its existing nonbank subsidiary, Verifications Inc., determining that a proposed nonbanking activity is Jacksonville, Florida ("Verifications"), in credit card closely related to banking. Using these criteria, the authorization services and lost/stolen credit card re- Board believes that banks generally have, in fact, porting services. The credit card authorization activity provided the services proposed by Applicant and are would consist of providing, for a fee, a service to particularly well suited to provide the proposed serissuers of credit cards that would enable merchants to vices. On this basis, the Board concludes that the determine the validity and credit limits of credit cards proposed services are closely related to banking. tendered to them. In addition, Applicant would pro- The facts of record indicate that banks that offer vide, for a fee, a reporting service to credit card credit cards, including affiliates of Applicant, typically holders that would enable them to report the loss or offer a telephone hotline for reporting lost or stolen theft of any of their credit cards via a single toll-free cards. A number of banks currently indirectly offer the telephone call to Verifications, Inc. These activities service of reporting lost cards issued by other instituhave not been specified by the Board in section 225.25 tions by arranging with independent companies to of Regulation Y as permissible for bank holding com- provide the service under a trade name associated with panies. the bank. With respect to credit card authorization Notice of the application, affording interested per- services, banks have a financial interest in the security sons an opportunity to submit comments, has been of the credit cards they issue, and already have duly published, 50 Federal Register 19,471 (1985). The systems to determine the validity of transactions aftime for filing comments has expired, and the Board fecting their cards and the availability of credit. Morehas considered the application and all comments re- over, Applicant currently maintains an extensive elecceived in light of the public interest factors set forth in tronic communications and data processing network to section 4(c)(8) of the Act. operate its 24-hour check verification service, and is Applicant is the largest banking organization in therefore particularly well-suited to add credit card Florida, with total consolidated assets of $12.5 bil- authorization to its existing activities and to handle the lion.1 Applicant engages in certain nonbank activities, reporting of lost or stolen credit cards on a volume including trust activities, data processing, consumer basis. and sales financing, check verification services, dis- Before approving a bank holding company's applicount brokerage, mortgage banking, and reinsurance cation to engage in an activity that the Board deterservices. mines is closely related to banking, the Board must In order to approve an application under section also find that consummation of the proposal can 4(c)(8) of the Act, the Board must determine that the reasonably be expected to produce benefits to the proposed activity is "so closely related to banking or public that outweigh possible adverse effects. The managing or controlling banks as to a proper incident proposed credit card reporting service would provide thereto ..." 12 U.S.C. § 1843(c)(8). In determining an additional source of competition in this field and whether an activity is closely related to banking under allow an individual who loses more than one card to section 4(c)(8), the Board has relied on guidelines report all lost cards at once to one source rather than established by the federal courts to determine whether having to make separate calls to each card issuer, a particular activity meets the "closely related to thereby providing greater convenience and efficiency banking" test.2 Under these guidelines, an activity to the customer and reducing confusion and delay. In may be found to be closely related to banking if it is addition, by engaging in credit card authorization demonstrated that (1) banks generally have, in fact, services, Applicant would not only provide greater provided the proposed service; or (2) that banks customer convenience but also an additional source of generally provide services that are operationally or competition in a field in which a limited number of functionally so similar to the proposed services as to independent organizations are active. equip them particularly well to provide the proposed Financial and managerial considerations are consisservice; or (3) that banks generally provide services tent with approval of this proposal. Moreover, there is that are so integrally related to the proposed service as no evidence in the record that consummation of this to require their provision in a specialized form. The proposal would result in adverse effects such as unsound banking practices, unfair competition, conflicts of interests or an undue concentration of resources. Based upon the foregoing and all the facts of record, 1. All banking data are as of December 31, 1984. 2. See National Courier Association v. Board of Governors, 516 the Board has determined that the balance of public F.2d 1229 (D.C. Cir. 1975) Accord, Securities Industry Ass'n. v. interest factors it is required to consider under section Board of Governors of the Federal Reserve System, U.S. , 104, S. Ct. 3003, 3008 (1984). 4(c)(8) is favorable. Accordingly, the application is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin • August 1985 hereby approved. This determination is subject to all interest factors set forth in section 4(c)(8) of the BHC of the conditions set forth in the Board's Regulation Y, Act.1 including those in sections 225.4(d) and 225.23(b). The Applicant, with total consolidated assets of $87.5 approval is also subject to the Board's authority to billion,2 is the third largest bank holding company in require modification or termination of the activities of the United States. Applicant operates three commerthe holding company or any of its subsidiaries as the cial banks and also engages in various nonbanking Board finds necessary to assure compliance with the activities through a number of subsidiaries. CMFC is a provisions and purposes of the Act and the Board's Futures Commission Merchant ("FCM") registered regulations and orders issued thereunder, or to pre- with the Commodity Futures Trading Commission vent evasion thereof. ("CFTC") that engages in futures trading activities This transaction shall not be consummated later permissible for bank holding companies under section than three months after the effective date of this 225.25(b)(18) of the Board's Regulation Y, 12 C.F.R. Order, unless such period is extended for good cause § 225.25(b)(18). by the Board, or by the Federal Reserve Bank of The Board has previously approved the execution Atlanta, pursuant to delegated authority. and clearance of futures contracts on a municipal bond By order of the Board of Governors, effective index. Bankers Trust New York Corporation, 71 FED- June 5, 1985. ERAL RESERVE BULLETIN 111 (1985) ("Bankers Trust"). The factors upon which the Board based its Voting for this action: Vice Chairman Martin and Gover- approval decision in Bankers Trust are present in this nors Partee, Gramley, and Seger. Absent and not voting: application. The proposed futures contract is a finan- Chairman Volcker and Governors Wallich and Rice. cial future that is based on an index of general obligation bonds and revenue bonds selected by The Bond JAMES MCAFEE Buyer. Applicant's subsidiary, The Chase Manhattan [SEAL] Associate Secretary of the Board Bank, has long been a major participant, both for its own account and for the accounts of its customers, in the municipal securities market as an underwriter of Chase Manhattan Corporation and dealer in general obligation bonds and other bank- New York, New York eligible municipal securities.3 The Board has determined that Applicant's proposal Order Approving Application to Execute and Clear to execute and clear such futures contracts is substan- Futures Contracts on a Municipal Bond Index and to tially similar to the proposal approved by the Board in Provide Futures Advisory Services Bankers Trust, and Applicant's prior experience in the municipal securities markets indicates that CMFC The Chase Manhattan Corporation, New York, New would have the expertise to provide the proposed York, a bank holding company within the meaning of services. Accordingly, the Board concludes that, in the Bank Holding Company Act, 12U.S.C. §1841 the manner proposed, and subject to the conditions set et seq. ("BHC Act"), has applied pursuant to section forth in section 225.25(b)(18) of Regulation Y, Appli- 4(c)(8) of the BHC Act and section 225.21(a) of the cant's proposal to execute and clear futures contracts Board's Regulation Y, 12 C.F.R. § 225.21(a), to en- on a municipal bond index is closely related to bankgage, through its subsidiary, Chase Manhattan Futures ing. Corporation ("CMFC"), in the execution and clear- With respect to the proposed advisory services, ance of futures contracts on a municipal bond index on such services also were authorized in Bankers Trust major commodities exchanges for non-affiliated per- and several other cases.4 Applicant proposes to prosons and corporate affiliates, and the provision of advisory services to non-affiliated persons with respect to futures contracts and options on futures 1. The Board received a comment regarding certain alleged administrative practices by Applicant's banking subsidiary. These alleged contracts that CMFC is permitted to execute and practices are of such marginal relevance to the proposed transaction, clear. however, that the Board is unable to accord them any weight in its Notice of the application, affording interested per- analysis of Applicant's proposal. 2. As of September 30, 1984. sons an opportunity to submit comments on the rela- 3. Banks are prohibited by the Glass-Steagall Act from dealing in tion of the proposed activity to banking and on the revenue bonds, although they may hold certain municipal revenue balance of the public interest factors regarding the bonds, 12 U.S.C. § 24(7). However, as in Bankers Trust, Applicant would not be dealing in or underwriting revenue bonds, but would be application, has been duly published, 50 Federal Reg- executing and clearing a futures contract on an index that includes ister 15,979 (1985). The time for filing comments has such bonds. expired and the Board has considered the application 4. J.P. Morgan & Co., Incorporated, 70 FEDERAL RESERVE BUL- LETIN 780 (1984); Manufacturers Hanover Corporation, 70 FEDERAL and all comments received in light of the public RESERVE BULLETIN 369 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 651 vide investment advice and advisory services either on provisions and purposes of the Act and the Board's a separate fee basis or as an integrated package of regulations and orders issued thereunder, or to preservices to FCM customers. The services would in- vent evasion thereof. clude written or oral presentations on the futures The transaction shall be made not later than three markets, a demonstration of the uses of financial months after the effective date of this Order, unless futures for hedging, and assistance in structuring hedg- such period is extended for good cause by the Board or ing strategies. Applicant will deal solely with major by the Federal Reserve Bank of New York pursuant to corporations and other financial institutions in its delegated authority. provision of the proposed advisory services, and will By order of the Board of Governors, effective not act as a principal with respect to any of the June 3, 1985. instruments involved. In order to approve this application, the Board is Voting for this action: Chairman Volcker and Governors also required to determine that the performance of the Martin, Partee, Gramley, and Seger. Absent and not voting: Governors Wallich and Rice. proposed activities by Applicant "can reasonably be expected to produce benefits to the public . . . that JAMES MCAFEE outweigh possible adverse effects . . . ." (12 U.S.C. [SEAL] Associate Secretary of the Board § 1843(c)(8)). Consummation of Applicant's proposal would provide added services to those clients of Applicant and its subsidiaries that trade in the cash, Independent Bankers Financial Corporation forward and futures markets for these instruments. As Dallas, Texas a result, the Board expects that the de novo entry of Applicant into the market for these services would Order Approving Application to Act as a Municipal increase the number of participants in the municipal Securities Brokers' Broker bond index futures market, and would increase the level of competition among providers of these ser- Independent Bankers Financial Corporation, Dallas, vices. Accordingly, the Board concludes that the Texas, a bank holding company by virtue of its control performance of the proposed activities by Applicant of Texas Independent Bank, Dallas, Texas, has apcan reasonably be expected to produce benefits to the plied for the Board's approval, pursuant to section public. 4(c)(8) of the Bank Holding Company Act of 1956 The Board has also considered the potential for ("Act") (12 U.S.C. § 1843(c)(8)) and section 225.21(a) adverse effects that may be associated with this pro- of the Board's Regulation Y (12 C.F.R. § 225.21(a)), posal. There is no evidence in the record that consum- to acquire, through its securities brokerage subsidiary, mation of the proposed transactions would result in Independent Brokerage of America, a 49 percent interany adverse effects such as decreased competition, est in a joint venture partnership, G.I.B., New York, undue concentration of resources, unfair competition, New York ("Company"). conflicts of interest, or unsound banking practices. The other 51 percent of Company's shares would be Based upon a consideration of all the relevant facts, owned by GGB Holding, Inc., New York, New York, the Board concludes that the balance of the public a wholly owned subsidiary of Mills & Allen Internainterest factors that the Board is required to consider tional PLC, London, England ("Mills & Allen"), a under section 4(c)(8) is favorable. However, the Board publicly-held multinational company that engages in notes that trading of the futures contract involved in the wholesale brokerage of securities, money market this application has not been approved by the CFTC. instruments and insurance and in the advertising busi- Accordingly, approval of Applicant's proposal is con- ness in the United Kingdom and other countries, ditioned upon CFTC approval of a contract substan- including the United States.1 GGB Holding, Inc. was tially similar to that described in the application to the formed for the purpose of holding Mills & Allen's Board. In addition, the Board reserves authority to interest in Company and would engage in no activities reconsider its actions in approving the proposal as a other than those conducted through the joint venture. record of FCM experience with respect to trading of Applicant, with total deposits of $97.4 million,2 is a this contract develops. one-bank holding company formed over a bankers' This determination is also subject to all of the bank. The shareholders of Applicant are 325 banks in conditions set forth in Regulation Y, including sections Texas. 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), and to the Board's authority to require 1. Mills & Allen does not presently engage in securities underwritsuch modification or termination of the activities of a ing or dealing in the United States. Its securities activities in the United States consist of brokerage of U.S. government securities and bank holding company or any of its subsidiaries as the money market instruments. Board finds necessary to assure compliance with the 2. Banking data are as of September 30, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin • August 1985 Company proposes to engage in the activity of lished under National Courier, because banks currentacting as a municipal securities brokers' broker, as ly engage in the activity and the activity is functionally defined by Rule 15c3—1 implementing section 15(c)(3) equivalent to the securities brokerage services banks of the Securities Exchange Act of 1934.3 Company provide to their customers. would offer such services through offices located in Applicant's proposal involves the purchase and sale New York, Atlanta and Dallas and provide its services of municipal securities as agent only and would not (largely by telephone) to securities brokers and deal- include dealing or otherwise taking a position in such ers, including dealer banks, located throughout the securities. Thus, the activity falls within the third United States. The New York office would be located party securities activities permitted for member banks in the same building as other Mills & Allen affiliates, under section 16 of the Glass-Steagall Act (12 U.S.C. but there would be separate offices and separate § 24) which permits banks to purchase and sell securientrances. Notice of the application, affording inter- ties "without recourse, solely upon the order, and for ested persons an opportunity to submit comments, has the account of, customers." The record shows that been duly published (50 Federal Register 3029 (1985)). national banks have been permitted to engage in the The time for filing comments has expired, and the activity of acting as municipal securities brokers' Board has considered the application and all com- brokers. ments received in light of the public interest factors set In addition, the Board finds that the proposed forth in section 4(c)(8) of the Act. activity, acting as an intermediary between principals Under the proposal, Company would provide mu- in order to allow them to buy and sell municipal nicipal securities brokerage services to other regis- securities in the secondary market in an anonymous tered securities brokers and dealers, including dealer manner, is functionally similar to the retail securities banks, consisting of acting as an undisclosed agent in brokerage activities performed by banks for their the purchase and sale of municipal securities, includ- customers as permitted under section 16 of the Glassing revenue bonds, for the account of its customers. Steagall Act. Accordingly, the Board concludes that The proposed activity of acting as a brokers' broker the proposed activity of acting as a municipal securiof municipal securities has not been approved previ- ties brokers' broker is closely related to banking ously by the Board. Section 4(c)(8) of the Act permits within the meaning of section 4(c)(8) of the Bank a bank holding company to engage, directly or through Holding Company Act. a subsidiary, in activities that the Board has deter- In addition to determining whether an activity is mined to be "so closely related to banking . . . as to be closely related to banking, the Board must consider a proper incident thereto." Under the guidelines es- whether Applicant's performance of the proposed tablished in National Courier Association v. Board of activities can "reasonably be expected to produce Governors, a particular activity may be found to meet benefits to the public, such as greater convenience, the "closely related to banking" test if it is demon- increased competition, or gains in efficiency, that strated that banks generally have in fact provided the outweigh possible adverse effects, such as undue proposed activity; banks generally provide services concentration of resources, decreased or unfair comthat are operationally or functionally so similar to the petition, conflicts of interests, or unsound banking proposed activity so as to equip them particularly well practices." 12 U.S.C. § 1843(c)(8). The consideration to provide the proposed activity; or that banks gener- of possible adverse effects also requires an evaluation ally provide services that are so integrally related to of the financial and managerial aspects associated with the proposed activity as to require their provision in a the proposal. 12 C.F.R. § 225.24. After review of the specialized form.4 The record indicates that the pro- application and other facts of record, including Appliposed activity meets two of the three criteria estab- cant's representations concerning its obligations to customers under securities and other laws, the Board finds that Applicant's conduct of the proposed activity would not result in adverse effects and finds that 3. Rule 15c3-l(a)(8)(ii) implementing section 15(c)(3) of the Securities and Exchange Act of 1934 defines a municipal securities brokers' financial and managerial considerations are consistent broker as a "municipal securities broker or dealer who acts exclusive- with approval. ly as an undisclosed agent in the purchase or sale of municipal securities for a registered broker or dealer or registered municipal Applicant states that the purpose of the joint venture securities dealer" who has "no retail customers" and "maintains no is to permit the parties to combine their unique skills in municipal securities in its proprietary or other accounts." Municipal order to offer a service that neither partner would be securities brokers' brokers are subject to the federal securities laws applicable to securities brokers and are governed by the rules of the able to offer successfully on an independent basis. Municipal Securities Rulemaking Board. Mills & Allen has stated that it requires a domestic 4. 516 F.2d 1229 (D.C. Cir. 1975). The National Courier guidelines partner with knowledge of the municipal securities are not the exclusive basis for finding a close relationship between a proposed activity and banking. markets and a customer base in order to expand its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 653 securities brokerage activities to include municipal venture from becoming involved in impermissible sesecurities. Applicant has stated it has developed such curities activities directly or indirectly and to prevent knowledge through the municipal securities dealing it from being unduly influenced by Mills & Allen operations of its banking subsidiary. In addition, Ap- affiliates that may engage in securities dealing in the plicant has indicated that its existing municipal securi- future. ties dealing customers desire access to brokerage The Board finds that the commitments made by services that Applicant is unable to provide without a Applicant and by Mills & Allen largely address the financial partner and a New York office. Applicant has Board's concerns in the context of the facts and stated that its association with Mills & Allen would circumstances of this application. The commitments provide the capital and a New York presence neces- are as follows: sary to enter this field. 1. Mills & Allen agrees to notify the Board and Prior decisions of the Board in joint venture cases Applicant of any expansion of its or its subsidiaries' indicate a concern that joint ventures not lead to a activities in the United States and its or its subsidiarmatrix of relationships between co-venturers that ies' securities activities generally into areas other could erode the legally mandated separation of bank- than those currently conducted by Mills & Allen or ing and commerce, lead to conflicts of interests, result its subsidiaries no later than the earlier of: in an undue concentration of resources, or compro- (i) the date upon which any public announcement mise the impartiality of the banking organization in the is made of such proposed new securities activity performance of credit evaluation or fiduciary ser- or vices.5 In its conditional approval of the joint venture (ii) the date upon which Mills & Allen or its between Amsterdam-Rotterdam Bank, N.V. and a subsidiary actually commences such new securicompany that engaged in the sponsorship, distribution ties activity. and management of mutual funds, the Board stated 2. In the event that Mills & Allen or its subsidiaries that this concern is exacerbated where the joint ven- expand their securities activities beyond those curture involves a relationship between a bank holding rently set forth in the application such that notice to company and a company that engages in securities the Board and Applicant is required pursuant to activities that are restricted under the Glass-Steagall paragraph (1) hereof, Applicant agrees that it will Act, because of the potential for the mingling of apply to the Board for approval of its retention of its permissible and impermissible securities activities.6 interest in Company. In this case, Mills & Allen has stated that it engages 3. Mills & Allen represents and commits that no domestically only in securities activities that would be officer, director or employee of Company is now or permissible for bank holding companies under the will at any time concurrently serve as an officer or Glass-Steagall Act. However, the Board is concerned employee of Mills & Allen or its subsidiaries or that in the future Mills & Allen might alter its securi- affiliates; provided, however, that the Chairman of ties activities in a way that might result in the mingling the Board of Directors of Company may serve as an of permissible activities with impermissible activities. officer, director or employee of a Mills & Allen To address these concerns, Applicant and Mills & subsidiary. Allen have made a number of commitments to the 4. Applicant and Mills & Allen agree that the offices Board. of Company will be kept separate from the offices of The commitments made by Applicant, and agreed to Applicant and other subsidiaries of Mills & Allen in by Mills & Allen, are intended to prevent the joint that, although located in the same office building as the offices of other subsidiaries of Mills & Allen, Company will have a separate entrance and telephone number. 5. Applicant agrees that it and its officers, employ- 5. See, e.g., The Maybaco Company and Equitable Bancorporaees and affiliates will not distribute prospectuses or tion, 69 FEDERAL RESERVE BULLETIN 375 (1983), and Deutsche Bank AG, 67 FEDERAL RESERVE BULLETIN 449 (1981). In the Deutsche sales literature for Mills & Allen or its subsidiaries Bank case, the Board denied one part of the joint venture application and will not make any such literature available to the on the basis that the public benefits of the proposal did not outweigh public at any of their offices. the generalized adverse effects that could result from a joint venture between a large banking organization and a large nonbanking compa- 6. Applicant agrees to instruct its officers and emny to engage in a broad range of financing activities. ployees and those of its affiliates not to express any 6. See Amsterdam-Rotterdam Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984) (investment advisory joint venture with a non- opinion concerning the advisability of purchasing U.S. company that sponsored mutual funds), and The Maybaco any securities or services from Mills & Allen or any Company and Equitable Bancorporation, 60 FEDERAL RESERVE BULof its subsidiaries other than the municipal securities LETIN 375 (1983) (mortgage banking joint venture with an investment banking firm). brokerage services offered by Company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin • August 1985 7. Applicant agrees that it will not furnish the names other in the municipal securities market or any other of its customers or those of its affiliates to Mills & product market either in the United States or abroad. Allen or its subsidiaries, except that such informa- The Board also notes that Applicant does not appear tion may be furnished to Company. to be a likely independent entrant into the market, 8. Applicant and Mills & Allen agree that neither because the cost of doing so on a de novo basis would Mills & Allen nor any of its subsidiaries will own or be prohibitive. The relatively small absolute size of lease offices in any building which is identified in the Applicant, when coupled with Applicant's limited dopublic's mind with Applicant or its affiliates. mestic presence, also demonstrates that the proposal 9. Applicant and Mills & Allen agree that neither would be unlikely to result in an undue concentration Applicant nor its affiliates will act as registrar, of resources. transfer agent or custodian for securities of Mills & In light of the foregoing, the Board finds no evidence Allen or its subsidiaries. in the record to indicate that consummation of the 10. Applicant and Mills & Allen agree that no proposal would result in adverse effects on the public officer, director or employee of Mills & Allen or its interest. Moreover, the Board is satisfied that approvsubsidiaries will concurrently serve as an officer, al of this application does not present the opportunity director or employee of Applicant or its affiliates for unsound banking practices. provided, however, that this commitment shall not The Board finds that consummation of this proposal prohibit a single individual who is an officer, direc- may be expected to result in public benefits that tor or employee of Mills & Allen or its subsidiaries outweigh possible adverse effects. In particular, the from serving as a chairman of the board or a director proposal to add Company as a provider of the services of Company. would promote competition and would allow bank 11. Applicant and Mills & Allen agree that neither holding companies to offer a convenient service to Applicant nor any of its affiliates will engage, direct- banks and financial institutions that deal in municipal ly or indirectly, in the sale or distribution of any securities. securities offered by Mills & Allen or its subsidiaries Based on the foregoing and other facts of record, the nor purchase any such securities for its own ac- Board has determined that the balance of the public count, other than municipal securities purchased interest factors it is required to consider under section through Company. 4(c)(8) of the Act is favorable. Accordingly, the appli- 12. Applicant and Mills & Allen agree that neither cation should be and hereby is approved. In approving Applicant nor any of its affiliates will purchase any this application, the Board has relied on all the comsecurities through Mills & Allen or subsidiaries of mitments offered by Applicant and the conditions in Mills & Allen in a fiduciary capacity other than this Order. This determination is subject to all of the municipal securities through Company. conditions set forth in the Board's Regulation Y, 13. Neither Applicant nor any of its affiliates will including those in sections 225.4(d) and 225.23(b), and make any investment in Mills & Allen or its subsid- to the Board's authority to require such modification iaries or nominate any directors of Mills & Allen or or termination of the activities of a bank holding its subsidiaries other than its investment in Compa- company or any of its subsidiaries as the Board finds ny and its nominees to the board of directors of necessary to assure compliance with the provisions Company. and purposes of the Act and the Board's regulations 14. Neither Applicant nor any of its affiliates will and orders issued thereunder, or to prevent evasion take into account the fact that a potential borrower thereof. competes with Company in determining whether to The proposed activity shall be commenced not later extend credit to such borrower. than three months after the effective date of this 15. Mills & Allen represents that neither it nor any Order, unless such period is extended for good cause of its subsidiaries currently engages or plans to by the Board or by the Federal Reserve Bank of engage in the underwriting or issuing of securities in Dallas, acting pursuant to delegated authority. the United States or outside of the United States By order of the Board of Governors, effective other than the self-issuance of securities of Mills & June 26, 1985. Allen or its subsidiaries. The Board finds that consummation of the proposed Voting for this action: Vice Chairman Martin and Govertransaction would not eliminate any existing or poten- nors Wallich, Partee, Rice, Gramley, and Seger. Absent and not voting: Chairman Volcker. tial competition between Mills & Allen and Applicant, but rather would add a competitor to the field of domestic providers of these services. The co-ventur- JAMES MCAFEE ers are not and have not been in competition with each [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 655 MCorp Virginia; and Clarksburg, West Virginia. Applicant Dallas, Texas plans to expand its activities in the future throughout the United States. MCorp Financial, Inc. Notice of the application, affording interested per- Wilmington, Delaware sons an opportunity to submit comments on the public interest factors, has been duly published (50 Federal Order Approving Retention of Data Processing Register 10,110 (1985)). The time for filing comments Activities has expired, and the application and all comments received have been considered in light of the public MCorp, Dallas, Texas, and its wholly owned subsid- interest factors set forth in section 4(c)(8) of the Act. iary MCorp Financial, Inc., Wilmington, Delaware, Applicant, the largest commercial banking organizaboth bank holding companies within the meaning of tion in Texas, controls 67 subsidiary banks with total the Bank Holding Company Act (12 U.S.C. § 1841 domestic deposits of $16.1 billion.3 By this applicaet seq.) ("Act"), have applied for the Board's approv- tion, Applicant seeks Board approval to retain the al under section 4(c)(8) of the Act (12 U.S.C. § 4(c)(8)) shares of MTech, originally held by Applicant under and section 225.23(a) of the Board's Regulation Y the authority of section 4(c)(5) of the Act on the basis (12 C.F.R. § 225.23(a)) to retain 99.8 percent and that MTech was a bank service corporation. Because acquire the remaining 0.2 percent of the shares of the activities of MTech currently consist of providing MTech, Dallas, Texas, a company engaged in data data processing services to nondepository institutions processing activities. Upon consummation of this pro- as well as to financial insitutions, Applicant may not posal, Applicant would own 100 percent of the shares continue to hold MTech pursuant to section 4(c)(5) of of MTech.1 MTech is currently engaged in the provi- the Act (12 U.S.C. § 1843(c)(5)) and the Board's Regusion of data processing services to approximately 700 lation Y (12 C.F.R. § 225.22(c)(4)). financial institutions. These services include the pro- Section 4(c)(8) of the Act provides that the Board cessing of financial, banking and economic data, the may approve a bank holding company's application to transmission of such data to and from such financial acquire a nonbanking company or engage in a noninsitutions, and the provision of data processing facilibanking activity only after the Board has determined ties. In addition, MTech is engaged in the provision of that performance of the proposed activity by a nonelectronic funds transfer services to financial insitubanking subsidiary of a bank holding company can tions as the operator of the "MPACT" network of reasonably be expected to provide benefits to the automated teller machines and point-of-sale terminals; public such as greater convenience, increased compe- MTech provides the necessary data processing and tition, or gains in efficiency, that outweigh possible data transmission services, facilities and data bases to adverse effects, such as undue concentration of rethe various financial institutions that participate in the sources, decreased or unfair competition, conflicts of MPACT network. MTech also provides data processinterests, or unsound banking practices. In acting on ing and data transmission services and facilities for an application under section 4(c)(8) of the Act and certain types of economic data for nonfinancial institu- Regulation Y to engage in activities previously comtions. Such activities have been determined by the menced in a situation where the required prior Board Board to be closely related to banking (12 C.F.R. approval was not obtained, the Board applies the same § 225.25(b)(7)).2 MTech operates data processing censtandards that it would apply to an application to ters in 15 Texas cities, and in Tulsa, Oklahoma; New commence such activities initially. In analyzing such York, New York; Boston, Massachusetts; Alexandria, an application, the Board considers the competitive effects of such a proposal at the time of the commencement of the activities. 1. MTech, formerly known as Affiliated Computer Systems, Inc., In this case, some of the activities were commenced was originally established by one of Applicant's subsidiary banks in by MTech on a de novo basis, while others were 1975 as an operating subsidiary. In 1978, Applicant directly acquired commenced by MTech through acquisitions of going 99.8 percent of MTech's shares, and the remaining 0.2 percent of MTech's shares were acquired by five of Applicant's subsidiary concerns. Because de novo expansion provides an banks. additional source of competition, the Board views 2. In accordance with the requirements of Regulation Y, Applicant such expansion as being procompetitive. With regard has indicated that, with respect to its data processing activities, all the data to be processed or furnished are financial, banking, or economic, to the acquisitions of going concerns, it is the Board's and all services are provided pursuant to written agreements that so view that, due to the limited scope of the operations of describe and limit the services. The facilities are designed, marketed, each of the firms acquired, the geographic distribution and operated for the processing and transmission of such data, and hardware is provided only in conjunction with software designed and marketed for the processing and transmission of such data, and any general purpose hardware does not constitute more than 30 percent of the cost of any packaged offering. 3. Deposit data are as of March 31, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin • August 1985 of their operations, and the large number of competi- section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), and tors in the data processing field, these acquisitions did section 225.23 of the Board's Regulation Y, 12 C.F.R. not have a significant effect on competition in any § 225.23, to acquire 100 percent of the voting shares of relevant area. Altman & Brown, Inc., Albany, New York ("Compa- In acting on this application, the Board has consid- ny"). ered the fact that Applicant failed to secure the Notice of the application, affording interested per- Board's approval before engaging in certain data proc- sons an opportunity to submit comments on the proessing activities for nondepository institutions through posal, has been duly published, 50 Federal Register MTech. After reviewing the relevant facts, the Board 8396 (1985). The time for filing comments has expired concludes that this failure was inadvertent, and, in and the Board has considered the application and all view of certain assurances provided by Applicant, the comments received in light of the public interest Board has determined that it should not be regarded as factors set forth in section 4(c)(8) of the Act.1 reflecting so adversely on the management of Appli- Norstar, a bank holding company by virtue of its cant as to warrant denial of the application. ownership of commercial banks in New York and Retention of MTech by Applicant may be expected Maine, has total consolidated assets of $7.2 billion.2 to result in public benefits because MTech will contin- Norstar also engages in certain nonbanking activities, ue to provide its customers with an additional source including discount brokerage, credit-related insurance of data processing services. Further, there is no evi- activities, and mortgage banking activities. dence in the record to indicate that the retention of Norstar proposes to acquire Company, an employee MTech would result in any conflicts of interests, benefits consulting firm that provides a full range of unsound banking practices, or other adverse effects. services with regard to employee benefits plans. Com- Based upon the foregoing and certain commitments pany's activities can be divided into four basic types of by Applicant that are reflected in the record, the Board activities: has determined that the balance of the public interest 1. Plan Design—designing employee benefit plans, factors it is required to consider under section 4(c)(8) including determining actuarial funding levels and of the Act is favorable. Accordingly, the application is cost estimates; hereby approved. This determination is subject to all 2. Plan Implementation—providing assistance in of the conditions set forth in Regulation Y, including implementing plans, including assistance in the those contained in sections 225.4(d) and 225.23(b), and preparation of plan documents and the implementato the Board's authority to require such modification tion of employee benefit administration systems; or termination of the activities of a holding company or 3. Administrative Services—providing administraany of its subsidiaries as the Board finds necessary to tive services with respect to plans, including recordassure compliance with the provisions and purposes of keeping services, calculating and certifying employthe Act, and the Board's regulations and orders issued ee benefits, preparing periodic actuarial and other thereunder, or to prevent evasion thereof. reports and government filings pursuant to ERISA, By order of the Board of Governors, effective and providing information to a client's legal counsel June 5, 1985. in labor relations and negotiations; 4. Employee Communications—developing em- Voting for this action: Vice Chairman Martin and Gover- ployee communication programs with respect to nors Partee, Gramley, and Seger. Absent and not voting: plans for the benefit of the client. Chairman Volcker and Governors Wallich and Rice. JAMES MCAFEE All of these activities involve the use of actuarial [SEAL] Associate Secretary of the Board skills to some degree since approximately 80 percent of Company's plans under ongoing supervision are "defined benefit plans" based upon payment of a fixed Norstar Bancorp, Inc. benefit determined by an actuarially based formula in Albany, New York the plan instrument, as distinguished from "defined contribution plans." Order Approving an Application to Provide In order to approve an application under section Employee Benefits Consulting Services 4(c)(8) of the Act, the Board must determine that the Norstar Bancorp, Inc., Albany, New York, a bank holding company within the meaning of the Bank 1. Mellon Bank, N.A., Pittsburgh, Pennsylvania, commented in Holding Company Act ("Act"), 12 U.S.C. § 1841 favor of approval of this application. et seq., has applied for the Board's approval under 2. Data are as of December 31, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 657 proposed activity is "so closely related to banking or service; that banks generally provide services that are managing or controlling banks as to be a proper operationally or functionally so similar to the proposed incident thereto . . ." 12 U.S.C. § 1843(c)(8). Norstar services as to equip them particularly well to provide submits that all of the proposed activities are included the proposed service; or that banks generally provide in the trust company or financial or investment adviso- services that are so integrally related to the proposed ry service activities permissible under Regulation Y. service as to require their provision in a specialized 12 C.F.R. § 225.25(b)(3) and (4). While certain of the form. The courts have made it clear, however, that activities of employee benefits consulting as conduct- these criteria are not exhaustive and that the Board ed by Company, particularly in the area of plan has discretion to consider other criteria which provide administration, are conducted by trust companies or a reasonable basis for a finding that a particular trust departments of banks in their capacities as trust- nonbanking activity has a close relationship to bankees or custodians of employee benefits plans and ing.5 investment managers of plan assets, and while certain Applying these criteria, the Board believes that of Company's employee benefits consulting activities banks and trust companies generally provide trust are functionally equivalent to general trust activities of services that are operationally or functionally related banks and trust companies, the record does not indi- to many of Company's activities, including activities cate that the complete range of employee benefits in each of Company's four basic areas of plan design, consulting services are generally conducted by trust plan implementation, plan administration and employcompanies or authorized by the Board as permissible ee communications. Design activity for employee as trust company activities under Regulation Y. Simibenefits plans is operationally and functionally similar larly, while the Board believes that employee benefits to the design and establishment of trusts by banks and consulting is essentially a financial planning activity trust companies. Bank trust departments routinely involving the preparation and conveyance to a client of assist trust customers to determine their objectives, financial information and while the Board has previfunding levels and costs, and they provide ongoing ously determined the preparation and conveyance of evaluations regarding whether the needs of the trust financial data to be closely related to banking and donor and beneficiary are being met. Banks also permissible under Regulation Y in the areas of investdesign a variety of savings and individual retirement ment advisory services, data processing services and account plans that share similarities with defined concourier services,3 the record does not indicate that tribution employee benefits plans. employee benefits consulting is wholly encompassed With respect to the plan implementation and adminwithin any or all such activities. Thus, the Board does istration components of employee benefits consulting, not agree with Norstar's contention that all of the banks and trust companies prepare trust documents proposed activities are currently authorized for bank and establish administrative systems for such trusts. holding companies under existing provisions of Regu- In addition to performing functionally and operationallation Y. The Board must determine whether Compaly related activities, banks and trust companies also ny's activities are closely related to banking under serve as custodians or trustees and act as investment section 4(c)(8). managers for employee benefits plans. In these capaci- Since section 4(c)(8) does not specify any additional ties, they may perform recordkeeping, reporting, and criteria or factors on which the Board should base its payment services for such plans, including the filing of finding whether an activity is closely related to bank- annual reports with the Internal Revenue Service and ing, the Board has generally relied on the minimum other regulatory agencies. guidelines established by the federal courts.4 Under While certain aspects of employee communications these guidelines, an activity may be found to be are unique to benefit plans, banks and trust companies closely related to banking if it is demonstrated that have expertise in maintaining customer accounts and banks generally have in fact provided the proposed preparing statements for individual customers. Banks also have considerable experience designing informational materials for customers that explain the custom- 3. The Board does not believe that employee benefits consulting er benefits of bank services and products. In summaactivities as conducted by Company will involve Norstar in the ry, many of the proposed employee benefits consulting detailed operational aspects of a commercial enterprise that the Board sought to avoid in declining to permit bank holding companies to activities are either already specifically engaged in by engage in management consulting activities. See section 225.25(b)(4) banks and trust companies or are functionally related n.2 of Regulation Y, 12 C.F.R. 225.25(b)(4) n.2. 4. See National Courier Association v. Board of Governors, 516 F.2d 1229 (D.C. Cir. 1975). Accord, Securities Industry Ass'n v. Board of Governors, U.S. , 104, S. Ct. 3003, 3008 5. Securities Industry Ass'n, supra; Board of Governors v. Invest- (1984), Association of Data Processing Service Organizations, Inc. v. ment Company Institute, 450 U.S. 46, 56-58 nn. 20-23 (1981); Board of Governors, 745 F.2d 677 (D.C. Cir. 1984). Association of Data Processing Organizations, supra. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin • August 1985 to activities in which banks and trust companies ciencies, without resulting in any adverse conseregularly engage. quences. The Board recognizes, however, the actuarial as- As a matter of increased convenience, clients will pect of Company's employee benefit consulting activi- have the option to obtain a complete package of ties not generally included in trust company or bank employee benefits consulting services from a single activities. While actuarial services are an important company, including those investment and fund manelement of Norstar's proposed activities, such ser- agement services that can be provided by other subsidvices are limited in scope and purpose in that they are iaries of Norstar. Such a system of vertical integration conducted primarily as a means to ensure adequate is likely to make Company a more efficient competitor. funding of defined benefits plans. Moreover, in this Findings of greater convenience and increased compecase they would be performed solely as a means of tition may also be based on the increase in the number enabling Norstar to provide a full range of benefits of companies that can conduct all aspects of employee planning activities for its clients. Company's actuarial benefits consulting. services would not be conducted as an independent There is no evidence in the record to indicate that activity but only as a necessary and integrally related Norstar's engaging in the proposed activity would lead component of employee benefits consulting.6 to any undue concentration of resources, decreased or In Association of Data Processing Organizations, unfair competition, unsound banking practices, or Inc. v. Board of Governors, 745 F.2d 277 (D.C. Cir. other adverse effects. Clients will have the option to 1984), the court of appeals held that the Board may use any component of Norstar's employee benefits permit those activities that are "a part of " the overall consulting services individually as well as the entire permissible activity where, as here, "in both market package of services, and Norstar has specifically comcontemplation and technological reality, the service is mitted to avoid tying any employee benefits consulting a unitary one." (Id. at 694). service to purchase of the entire employee benefits The Board believes that employee benefits consult- package or to any other service offered by Norstar or ing as conducted by Company is functionally and its subsidiaries. operationally related to banking and trust company Based upon the foregoing and all the facts of record, activities. Moreover, employee benefits consulting the Board has determined that the balance of public involves the preparation and conveyance to a client of interest factors it is required to consider under section financial data determined by the Board to be permissi- 4(c)(8) is favorable. Accordingly, the application is ble in the context of investment advisory, data proc- hereby approved. This determination is subject to the essing and courier service activities. Therefore, Nor- conditions set forth in sections 225.4(d) and star's proposed activities are permissible as closely 225.23(b)(3) of the Board's Regulation Y, 12 C.F.R. related to banking. §§ 225.4(d) and 225.23(b)(3). The approval is also Before approving a bank holding company's appli- subject to the Board's authority to require modificacation to engage in an activity that the Board deter- tion or termination of the activities of the holding mines is closely related to banking, the Board must company or any of its subsidiaries as the Board finds also find that consummation of the proposal can necessary to assure compliance with the provisions reasonably be expected to produce benefits to the and purposes of the Act and the Board's regulations public that outweigh possible adverse effects. With and orders issued thereunder, or to prevent evasion respect to the proposed employee benefits consulting thereof. activities of Norstar, it appears from the record that This transaction shall not be consummated later authorizing the activity would enhance competition than three months after the effective date of this and provide greater convenience and increased effi- Order, unless such period is extended for good cause by the Board, or by the Federal Reserve Bank of New York, pursuant to delegated authority. 6. As part of its acquisition, Norstar proposes to assist firms in IRS By order of the Board of Governors, effective audits of plans; to inform clients of development in the field of employee benefit programs through newsletters, other correspon- June 19, 1985. dence, and participation in seminars, public programs and other forums relating to such developments; and to engage in professional Voting for this action: Governors Partee, Gramley, and actuarial activities and other activities incidental to the actuarial profession. The activities are generally related to the type of actuarial Seger. Voting against this action: Governor Rice. Absent and activities performed for purposes of engaging in employee benefits not voting: Chairman Volcker and Governors Martin and consulting and they do not generate any significant income. Such Wallich. activities, therefore, are permissible as incidental to Norstar's approved activities. Norstar also proposes to provide expert actuarial opinions of a general nature for purposes such as divorce actions and personal injury litigation. The Board believes such activities are JAMES MCAFEE beyond the scope of incidental activities and are not permissible. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 659 Security Pacific Corporation chasing and servicing conditional sales contracts and Los Angeles, California lease agreements originated by the Toyota dealers served by Weisman and in providing inventory financ- Order Approving Acquisition of Shares in Century ing and incidental capital loans to such dealers. Com- Credit Corporation pany would engage in these activities from its office in Linthicum, Maryland, and would serve the states of Security Pacific Corporation, Los Angeles, California, Delaware, Maryland, Pennsylvania, Virginia, and a bank holding company within the meaning of the West Virginia, and the District of Columbia, the same Bank Holding Company Act ("Act"), has applied for jurisdictions in which the dealers served by Weisman the Board's approval pursuant to section 4(c)(8) of the are located. Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(1) This proposal has been structured as a joint venture of the Board's Regulation Y (12 C.F.R. to take advantage of the complementary resources and § 225.23(a)(1)), to acquire 80 percent of the voting experience of Applicant and Weisman. While Applishares of Century Credit Corporation, Linthicum, cant's subsidiary, Security Pacific Credit Corporation Maryland ("Company"), a de novo joint venture. The ("SPCC"), currently competes in Company's proremaining 20 percent of Company's voting shares posed product markets through an office located in would be acquired by Frederick Weisman Company, Greenbelt, Maryland, this office of SPCC has had Glen Burnie, Maryland ("Weisman"). limited success in penetrating these markets in Com- Company proposes to engage in motor vehicle con- pany's service area because it does not have access to sumer finance and leasing, motor vehicle inventory an established customer base. Through its relationship finance, and incidental dealer-related commercial with approximately 100 Toyota dealers, Weisman will lending. These activities have been determined by the provide a customer base for Company, as well as its Board to be closely related to banking and permissible extensive experience in and understanding of the for bank holding companies (12 C.F.R. § 225.25(b)(1) distribution of motor vehicles. and (5)). Because this proposal involves the use of a joint Notice of the application, affording interested per- venture between a bank holding company and a nonsons an opportunity to submit comments, has been banking company, the Board has analyzed the proposduly published (50 Federal Register 8675 (1985)). The al with respect to its effects on existing and potential time for filing comments has expired, and the Board competition between Applicant and Weisman in the has considered the application and all comments re- relevant commercial lending and consumer financing ceived in light of the public interest factors set forth in and leasing markets.2 Applicant currently engages, section 4(c)(8) of the Act. through SPCC, in the proposed activities in the mid- Applicant is the ninth largest banking organization Atlantic area. However, SPCC's sole office in this area in the United States, controlling consolidated assets of holds motor vehicle dealer finance receivables of $1.5 $45.2 billion.1 Applicant's primary bank subsidiary, million, and motor vehicle sale contracts and leases of Security Pacific National Bank, is the second largest $20.2 million,3 which represents approximately 0.1 bank in California with total domestic deposits of $23.7 percent of the new motor vehicle registrations in 1983 billion. Applicant is also engaged through nonbank in the area to be served by Company. Weisman does subsidiaries in various nonbanking activities, including not engage in any of the proposed activities. Consemotor vehicle consumer financing and leasing and quently, the commencement of the proposed joint dealer inventory financing. Weisman is principally venture would have no effect on existing competition engaged, through its wholly owned subsidiary, Mid- in any relevant market. Atlantic Toyota Distributors, Inc., in the distribution With respect to potential competition, the fields of of Toyota motor vehicles and products to independent motor vehicle financing and leasing and dealer financ- Toyota dealers in the states of Delaware, Maryland, ing in the mid-Atlantic area are unconcentrated, and Pennsylvania, Virginia, and West Virginia and the District of Columbia. Weisman does not engage, either directly or through a subsidiary, in any financing or 2. The Board has previously indicated its concerns regarding the leasing activities. potential for undue concentration of resources that could result from Under the proposed joint venture arrangement, Ap- the combination in a joint venture of banking and nonbanking instituplicant and Weisman would engage de novo in pur- tions. The Board is also concerned that joint ventures not lead to a matrix of relationships that could undermine the legally mandated separation of banking and commerce. See, e.g., Amsterdam-Rotterdam Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984); Deutsche Bank AG, 67 FEDERAL RESERVE BULLETIN 449 (1981); Maryland National Corporation, 65 FEDERAL RESERVE BULLETIN 271 (1979). 1. Banking data are as of March 31, 1985. 3. As of November 30, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin • August 1985 have numerous participants significantly larger than By order of the Board of Governors, effective SPCC. Furthermore, the Board does not consider June 3, 1985. Weisman to be a likely independent entrant into Company's proposed fields of activity, because Weisman Voting for this action: Chairman Volcker and Governors has neither the experience as a lending institution nor Martin, Partee, Gramley, and Seger. Absent and not voting: Governors Wallich and Rice. the capital to engage independently in financing and leasing activities. Accordingly, the Board concludes that consummation of the proposed joint venture JAMES MCAFEE would have little effect on potential competition in the [SEAL] Associate Secretary of the Board relevant markets. Furthermore, the Board is satisfied that approval of this application does not inherently present the oppor- Security Pacific Corporation tunity or potential for conflicts of interest or other Los Angeles, California anticompetitive practices. In reaching this conclusion, the Board stresses that the proposed activities are Order Approving an Application to Engage in limited in scope and that there are no other joint Consumer Finance Activities and Certain Insurance ventures between Applicant and Weisman. Addition- Activities ally, the subject of this joint venture represents a relatively minor portion of the business of each joint Security Pacific Corporation, Los Angeles, California, venturer. Consequently, the Board has no reason to a bank holding company within the meaning of the believe that Applicant or Security Pacific National Bank Holding Company Act of 1956, as amended Bank would favor Weisman, or the dealers served by ("Act"), 12 U.S.C. § 1841 et seq., has applied for the Weisman, in the provision of credit or other services. Board's approval under section 4(c)(8) of the Act, Consummation of the proposal may be expected to 12 U.S.C. § 1843(c)(8), and section 225.23(a)(1) of the result in public benefits inasmuch as the joint venture Board's Regulation Y, 12 C.F.R. § 225.23(a)(1), to would enable Applicant to provide an additional acquire through its wholly owned subsidiary, Security source of credit to the customers of the Toyota dealers Pacific Housing Services, Inc. ("SP Housing Serserved by Weisman. The financial and managerial vices"), San Diego, California, substantially all of the resources of Applicant, Weisman, and Company are manufactured housing, mobile home, and recreational considered satisfactory, and there is no evidence in the vehicle retail finance assets of General Electric Credit record to indicate that consummation of the proposal Corporation ("General Electric"), Stamford, Conwould result in undue concentration of resources, necticut, including retail accounts, servicing agreeunsound banking practices, or other adverse effects on ments, related equipment, and real property leases for the public interest. office space in Anaheim and San Jose, California, and Based on the foregoing and other facts of record, the Reno, Nevada. Thereafter, SP Housing Services will Board concludes that the balance of the public interest continue to engage in conditional sales contract fifactors it must consider under section 4(c)(8) of the nance with respect to mobile homes and manufactured Act favors approval of the application. Accordingly, housing in the states of California, Idaho, Montana, the Board has determined that the application should Nevada, Oregon and Washington, the servicing of be and hereby is approved. This determination is loans and other extensions of credit and the sale of subject to all the conditions set forth in Regulation Y, credit life insurance in these same states. In addition, including those in sections 225.4(d) and 225.23(b) Security Pacific has applied under section 4(c)(8) of (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), and to the the Act to expand the activities of its subsidiary, Board's authority to require such modification or General Fidelity Life Insurance Company ("General termination of the activities of a bank holding compa- Fidelity"), Richmond, Virginia, to engage in the states ny or any of its subsidiaries as the Board finds of Montana and Nevada in the activity of underwriting necessary to assure compliance with the provisions and reinsuring credit life insurance for extensions of and purposes of the Act and the Board's regulations credit made by Security Pacific and its affiliates. The and orders issued thereunder, or to prevent evasion Board has previously determined that the activities to thereof. be engaged in by SP Housing Services and General The transaction shall be consummated not later than Fidelity are closely related to banking and permissithree months after the effective date of this Order, ble for bank holding companies. 12 C.F.R. unless such period is extended for good cause by the §§ 225.25(b)(1), (8)(i)(A) and (9). Board or by the Federal Reserve Bank of San Francis- Applicant also proposes to engage through SP Housco, acting pursuant to delegated authority. ing Services in the activity of acting as agent or broker Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 661 for the sale of credit property insurance for extensions consummation of this proposal would eliminate some of credit made or acquired by Applicant and its existing competition. However, the respective market affiliates as limited by section 601(B) of Title VI of the shares for such financing controlled by Applicant and Garn-St Germain Depository Institutions Act of 1982 General Electric are quite small in the geographic ("Garn-St Germain Act"), 12 U.S.C. § 1843(c)(8)(B). markets where Applicant and General Electric both Section 601(B) provides an exception to the general compete,2 and General Electric has not been a vigorprohibition in the Act against insurance agency and ous competitor in this market since 1982. Accordingly, underwriting activities, and allows a bank holding the Board concludes that consummation of this procompany's finance company subsidiary to sell insur- posal would not have a significant adverse effect on ance (within certain dollar limitations) limited to assur- existing competition in any relevant market. ing payment of the outstanding balance on an exten- Financial and managerial considerations are consission of credit in the event of loss or damage to any tent with approval of this proposal. Moreover, there is property used as collateral on such extension of credit. no evidence in the record that consummation of this The Board concludes that Security Pacific, through SP proposal would result in adverse effects, such as Housing Services, may engage in the activity of acting unsound banking practices, unfair competition, conas an agent or broker for the sale of credit property flicts of interest, or an undue concentration of reinsurance to the extent that it complies with all of the sources. requirements of section 601(B) of the Garn-St Ger- With respect to the public benefits associated with main Act. Applicant's proposal to underwrite and reinsure credit Notice of the application, affording interested per- life insurance, the record indicates that, upon consumsons an opportunity to submit comments on the pro- mation of this proposal, Applicant would reduce the posal, has been duly published, 50 Federal Register premium rates for such insurance in Montana and 10,319 (1985). The time for filing comments has ex- Nevada. Thus, the Board concludes that consummapired and the Board has considered the application and tion of this aspect of the proposal would benefit all comments received in light of the public interest consumers in these states.3 As for the public benefits factors set forth in section 4(c)(8) of the Act. associated with the other aspects of this proposal, In addition to determining whether an activity is consummation would result in the preservation and closely related to banking, the Board must consider expansion of the consumer finance and credit-related whether Applicant's performance of the proposed insurance services previously provided by General activities can "reasonably be expected to produce Electric. benefits to the public, such as greater convenience, Based upon the foregoing and the facts of record, increased competition, or gains in efficiency, that the Board concludes that the balance of public interest outweigh possible adverse effects, such as undue factors it must consider under section 4(c)(8) of the concentration of resources, decreased or unfair com- Act is favorable. Accordingly, the application should petition, conflicts of interests, or unsound banking be and hereby is approved. This determination is practices." 12 U.S.C. § 1843(c)(8). This consideration subject to all of the conditions set forth in the Board's also requires an evaluation of the financial and mana- Regulation Y, including those in sections 225.4(d) and gerial aspects associated with the proposal. 12 C.F.R. 225.23(b), and the Board's authority to require such § 225.24. modification or termination of the activities of a bank Applicant is the ninth largest banking organization holding company or any of its subsidiaries as the in the United States, controlling consolidated assets of Board finds necessary to assure compliance with the $45.2 billion.1 Applicant's primary bank subsidiary, provisions and purposes of the Act and the Board's Security Pacific National Bank, Los Angeles, Califor- regulations and orders issued thereunder, or to prenia, is the second largest bank in California with total vent evasion thereof. domestic deposits of $23.7 billion. Applicant also is The proposed activities shall be commenced not engaged through nonbank subsidiaries in various non- later than three months after the effective date of this banking activities, including consumer and commer- Order, unless such period is extended by the Board or cial finance, leasing, trust services, mortgage banking by the Federal Reserve Bank of San Francisco, acting and industrial banking. pursuant to delegated authority. With respect to the market for manufactured housing, mobile home and recreational vehicle financing, 2. These markets are a region comprised of the states of California and Nevada, and a region comprised of the states of Idaho, Montana, Oregon and Washington. 1. Banking data are as of March 31, 1985. 3. See 12 C.F.R. § 225.25(b)(9) n. 7. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin • August 1985 By order of the Board of Governors, effective cial counseling, the Board indicated its concern that June 4, 1985. the offering of such services by bank holding companies could result in the misuse of confidential customer Voting for this action: Chairman Volcker and Governors information and in certain conflicts of interests be- Martin, Partee, Gramley, and Seger. Absent and not voting: tween the bank holding company's role as a source of Governors Wallich and Rice. objective financial advice and its interest in promoting JAMES MCAFEE the products of its affiliates.4 The Board's decision in [SEAL] Associate Secretary of the Board Citicorp was conditioned on Citicorp's commitments to maintain a strict separation between its educational and promotional material and activities and to advise United City Corporation each customer that he is not required to purchase any Piano, Texas services from Citicorp affiliates. In addition, Citicorp committed that any confidential information obtained Order Approving the Provision of Consumer by it or any of its subsidiaries in connection with its Financial Counseling Services courses would be obtained only with the customer's consent and would not be made available to any other United City Corporation, Piano, Texas, a bank holding Citicorp affiliate or any third party for any purpose.5 company within the meaning of the Bank Holding The Board believes that these commitments are essen- Company Act ("Act"), has applied for the Board's tial to ensure that the advice rendered will be impartial approval pursuant to section 4(c)(8) of the Act and to prevent misuse by Applicant of confidential (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(1)) of customer information, and Applicant has made similar the Board's Regulation Y (12 C.F.R. § 225.23(a)(1)), commitments with respect to this application. to engage de novo in providing consumer financial Applicant currently offers discount brokerage sercounseling services. Applicant proposes to offer such vices through the same legal entity (the holding comservices, which include advice to consumers on debt pany) as that from which it proposes to offer consumer consolidation, applying for a mortgage, insurance and financial counseling. Section 225.25(b)(15) of Regulaportfolio management, and investment planning, tion Y (12 C.F.R. § 225.25(b)(15)) expressly limits the through a division of Applicant. brokerage services permissible for a bank holding The Board has found this activity to be closely company to "buying and selling securities solely as related to banking and permissible for bank holding agent for the account of customers" and provides that companies on two occasions.1 Furthermore, the Board the permissible brokerage activities do not include has proposed to add consumer financial counseling to "investment advice or research services." Applicant its list of permissible nonbanking activities under has made the following commitments designed to section 225.25 of Regulation Y (49 Federal Register separate its discount brokerage activities from the 9215 (1984)). proposed financial counseling activities: Notice of the application, affording opportunity for (1) Applicant will make only generic recommendainterested persons to comment, has been duly pub- tions as to general investment products and will not lished (50 Federal Register 12,405 (1985)). The time for offer advice as to specific products or investments; filing comments has expired, and the Board has con- (2) the two services will be provided by completely sidered the application and all comments received in different personnel; light of the factors set forth in section 4(c)(8) of the Act (3) the brokerage services will be physically separat- (12 U.S.C. § 1843(c)(8)). ed from the financial counseling services; Applicant is the 51st largest commercial banking (4) Applicant will use separate and distinct marketorganization in Texas, with consolidated assets of ing programs for its financial counseling and broker- $202.9 million.2 Applicant's four subsidiary banks age services; and have total deposits of $174.3 million, representing (5) Applicant's consumer financial counseling cusapproximately 0.1 percent of the total deposits in tomers will not be solicited by Applicant to use commercial banks in the state.3 Applicant's brokerage services. In approving Citicorp's application to engage in the provision of financial management courses and finan- The Board has considered these commitments and has determined that they are sufficient to maintain the separation between the two activities required by 1. Citicorp (Citicorp Person-to-Person Financial Centers), 65 FED- ERAL RESERVE BULLETIN 265 (1979), and Maryland National Corpo- section 225.25(b)(15) of Regulation Y. Thus, the Board ration, 71 FEDERAL RESERVE BULLETIN 253 (1985). 2. As of December 31, 1984. All financial data reflect Applicant's 4. Citicorp, supra note 1, at 266. recent acquisition of First National Bank in DeSoto, DeSoto, Texas. 5. The Board also imposed these conditions in Maryland National 3. Deposit data are as of June 30, 1984. Corporation, 71 FEDERAL RESERVE BULLETIN 253 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 663 has decided that it will not require Applicant to offer provide the proposed services and discount brokerage the services through separate legal entities. This deter- services through completely different personnel and in mination is based on the specific facts and circum- different physical locations, to use distinct marketing stances of this case, including the size and physical programs for the two services, and not to solicit its facilities of Applicant, and circumstances in future financial counseling customers to use its brokerage cases might require that the activities be conducted services, offer a measure of separation of the discount through separate subsidiaries. brokerage activities from the financial counseling ac- The Board finds no evidence that the provision of tivities. In my opinion, however, these commitments financial counseling services by Applicant would re- do not meet the requirement in section 225.25(b)(15) of sult in any conflicts of interests, unfair competition, Regulation Y that discount brokerage activities not unsafe and unsound banking practices, or other ad- include investment advice or research services. I verse effects. Because Applicant would offer the pro- would therefore condition approval of this proposal on posed services de novo, consummation of the proposal the placement of the financial counseling activities and may reasonably be expected to result in increased the discount brokerage activity in separate legal enticompetition. ties. Based upon the foregoing and all of the facts of record, the Board has determined that the balance of June 24, 1985 public interest factors it is required to consider under section 4(c)(8) of the Act is favorable and consistent with approval of this application. Accordingly, the Orders Issued Under Sections 3 and 4 of Bank Board has determined that the application should be Holding Company Act and hereby is approved. This determination is subject to the conditions set forth in this Order as well as to all Marshall & Ilsley Corporation of the conditions set forth in Regulation Y, including Milwaukee, Wisconsin those in sections 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)). The Board's approval is Order Approving Acquisition of a Bank Holding also subject to the Board's authority to require such Company and of Companies Engaged in Leasing, modification or termination of the activities of a bank Trust Services, and Investment Advisory Services holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the Marshall & Ilsley Corporation, Milwaukee, Wisconprovisions and purposes of the Act and the Board's sin, a bank holding company within the meaning of the regulations and orders issued thereunder, or to pre- Bank Holding Company Act ("Act") (12 U.S.C. vent evasion thereof. §§ 1841 et seq.), has applied for the Board's approval The transaction shall be consummated not later than under section 3(a)(3) of the Act (12 U.S.C. three months after the effective date of this Order, § 1842(a)(3)) to acquire all of the outstanding shares of unless such period is extended for good cause by the Heritage Wisconsin Corporation, Wauwatosa, Wis- Board or by the Federal Reserve Bank of Dallas, consin ("Heritage"), also a bank holding company, acting pursuant to delegated authority. and thereby indirectly acquire Heritage's three bank By order of the Board of Governors, effective subsidiaries: Heritage Bank, Wauwatosa, Wisconsin; June 24, 1985. Heritage Bank Beloit Mall, Beloit, Wisconsin; and Heritage Bank West Bend, West Bend, Wisconsin. Voting for this action: Governors Partee, Rice, Gramley, Applicant has also applied for the Board's approval and Seger. Absent and not voting: Chairman Volcker and under section 4(c)(8) of the Act (12 U.S.C. Governors Martin and Wallich. § 1843(c)(8)) and section 225.23(a) of the Board's Regulation Y (12 C.F.R. § 221.23(a)) to acquire indi- JAMES MCAFEE rectly Heritage's three nonbank subsidiaries: Heritage [SEAL] Associate Secretary of the Board Leasing Corporation, Milwaukee, Wisconsin ("Heritage Leasing"); Heritage Trust Company, Milwaukee, Wisconsin ("Heritage Trust"); and Heritage Invest- Concurring Statement of Governor Rice ment Advisors, Inc., Milwaukee, Wisconsin ("Heritage Investment Advisors"). These subsidiaries en- I agree with the Board that Applicant should be gage in leasing, trust, and investment advisory permitted to engage in the proposed financial counsel- activities. The Board has previously determined that ing activities. these activities are closely related to banking and I believe that the Applicant's commitments not to permissible for bank holding companies. 12 C.F.R. offer advice as to the purchase of specific securities, to § 225.25(b)(3)-(5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin • August 1985 Notice of the applications, affording interested per- tion would eliminate some existing competition besons an opportunity to submit comments, has been tween Applicant and Heritage in the Milwaukee given in accordance with sections 3 and 4 of the Act, banking market, the market would not become highly 12 U.S.C. §§ 1842 & 1843. 50 Federal Register 9906 concentrated as a result of this transaction and 47 (1985). The time for filing comments has expired, and other banking organizations would continue to operate the Board has considered the applications and all in the market. On the basis of these and other facts of comments received in light of the factors set forth in record, the Board concludes that the effects of consection 3(c) of the Act (12 U.S.C. §§ 1842(c)) and the summation of the proposal on existing competition in considerations specified in section 4(c)(8) of the Act. the Milwaukee banking market would not be signifi- Applicant is the second largest commercial banking cantly adverse. organization in Wisconsin and controls deposits of In the West Bend banking market, Applicant is the $2.36 billion, representing 8.6 percent of the total largest commercial banking organization, with deposdeposits in commercial banks in the state.1 Heritage is its of $96.5 million representing 30.3 percent of the the eighth largest commercial banking organization in total deposits in commercial banks in the market. the state and controls deposits of $470 million, repre- Heritage is the fifth largest commercial banking orgasenting 1.7 percent of the total deposits in commercial nization in the market, controlling deposits of $17.5 banks in the state. Upon acquiring Heritage, Applicant million representing 5.5 percent of the market's comwould control deposits of $2.83 billion, representing mercial bank deposits. Upon acquiring Heritage, Ap- 10.3 percent of the total deposits in commercial banks plicant would control 35.8 percent of the total deposits in the state, and would remain the second largest in commercial banks in the market. banking organization in the state. Consummation of The West Bend banking market is concentrated, this proposal would have no significant effect on the with the four largest commercial banking organizaconcentration of banking resources in Wisconsin. tions controlling 87.4 percent of the market's commer- The bank subsidiaries of Applicant compete directly cial bank deposits. The HHI in the market is 2140 and with those of Heritage in the Milwaukee and West would increase by 333 points to 2473 upon consumma- Bend banking markets.2 Applicant is the second larg- tion of this proposal, making the transaction one that est commercial banking organization in the Milwaukee would be subject to challenge under the Department of banking market, controlling deposits of $1.36 billion, Justice Merger Guidelines.4 representing 16.3 percent of the total deposits in While the proposed acquisition would eliminate commercial banks in the market. Heritage is the fifth existing competition between Applicant and Heritage largest commercial banking organization in the mar- in the West Bend market, the Board notes that 11 ket, controlling deposits of $350.3 million, represent- competitors, including two of the state's largest coming 4.2 percent of the total deposits in commercial mercial banking organizations, would remain in the banks therein. Upon acquiring Heritage, Applicant market following consummation of this proposal. In would control 20.5 percent of the total deposits in addition, the Board has concluded that the effect of commercial banks in the market. this proposal on existing competition is mitigated by The share of deposits held by the four largest the extent of competition offered by thrift institutions banking organizations in the Milwaukee banking market is 67.0 percent and would increase to 71.2 percent upon consummation of this proposal. The market's Herfindahl-Hirschman Index ("HHI") is 1461 and would increase by 137 points to 1598 upon consummation of the proposal.3 Although the proposed acquisi- HHI by more than 100 points, unless other facts of record indicate that the merger is not likely substantially to lessen competition. The Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating an anticompetitive effect) unless the post-merger HHI is at least 1800 and the merger increases the HHI by at least 200 points. 1. Banking data are as of June 30, 1984, unless otherwise noted. 4. Under the Department of Justice Merger Guidelines, a market in 2. The Milwaukee banking market is coextensive with the Milwau- which the post-merger HHI is above 1800 is considered highly kee RMA, which consists of Milwaukee, Ozaukee, and Waukesha concentrated. In such markets, the Department is likely to challenge a Counties and portions of Jefferson, Racine, Washington, and Wal- merger that produces an increase in the HHI of 50 points or more worth Counties, all in Wisconsin. unless other facts of record indicate that the merger is not likely The West Bend banking market comprises the towns of Addison, substantially to lessen competition. Other factors include the post Barton, Errin, Hartford, Farmington, Kewaskum, Trenton, Wayne, merger HHI, the increase in the HHI, changing market conditions, the and West Bend in Washington County, Wisconsin. financial condition of the firm to be acquired, ease of entry, nature of 3. Under the revised Department of Justice Merger Guidelines (49 the product, substitute products, similarities in firms that are subject Federal Register 26,823 (1984)), a market in which the post-merger to the transaction and increased efficiencies that may result from the HHI is between 1000 and 1800 is considered moderately concentrated, transaction. The Department has not advised the Board of any and the Department is likely to challenge a merger that increases the objection to this transaction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 665 in the West Bend market.5 Five thrift institutions in tual funds and individuals. All of these activities are the market hold total deposits of $134.7 million, repre- conducted in Milwaukee, Wisconsin. senting 29.9 percent of the total deposits in the market. Applicant is also engaged through various nonbank- Two of these institutions have located their home ing subsidiaries in lease finance, trust, and investment offices within the West Bend market, and provide advisory services in Milwaukee, Wisconsin. Thus conconsumer loans, NOW accounts and commercial real summation of this proposal would eliminate existing estate loans. Moreover, one of the thrift institutions is competition between Applicant and Heritage in the actively engaged in additional commercial lending. In provision of such services. However, the respective view of these facts, the Board considers the presence market shares for these services held by Applicant and of thrift institutions as a significant factor in assessing Heritage are quite small in the Milwaukee market and the competitive effects of this proposal and has deter- numerous other providers of these services would mined that consummation of the proposal is not likely remain in the market upon consummation of this to have a significant adverse effect on existing compe- proposal. Accordingly, the Board concludes that contition in the West Bend banking market.6 summation of this proposal would not have a signifi- Heritage is represented in the Beloit-Janesville mar- cant adverse effect on existing competition in any ket, where Applicant does not currently compete. The relevant product or geographic market. Board has examined the effect of the proposed acquisi- There is no evidence in the record to indicate that tion upon probable future competition in that market Applicant's acquisition of Heritage's nonbanking subin light of the Board's proposed market extension sidiaries would result in decreased or unfair competiguidelines.7 With a three-firm concentration ratio of tion, undue concentration of resources, conflicts of 52.2 percent, the Beloit-Janesville market is not highly interests, unsound banking practices, or other adverse concentrated, and the Board has concluded that con- effects. Accordingly, the Board has determined that summation of this proposal would not have any signifi- the balance of the public interest factors it must cant adverse effects on probable future competition in consider under section 4(c)(8) of the Act is favorable this market. and consistent with approval of the proposed acquisi- The financial and managerial resources and future tions. prospects of Applicant and Heritage are considered Based on the foregoing and other facts of record, the satisfactory and consistent with approval of the appli- Board has determined that the applications under cation. Considerations related to the convenience and sections 3 and 4 of the Act should be and hereby are needs of the communities to be served are also consis- approved. The acquisition of Heritage shall not be tent with approval. consummated before the thirtieth calendar day follow- Applicant has also applied to acquire Heritage Leas- ing the effective date of this Order or later than three ing, Heritage Trust, and Heritage Investment Advi- months after the effective date of this Order, unless sors. Heritage Leasing provides lease finance ser- that period is extended for good cause by the Federal vices, Heritage Trust provides trust services to Reserve Bank of Chicago, pursuant to delegated aucorporations and individuals, and Heritage Investment thority, or by the Board. The determinations regarding Advisors provides portfolio investment advice to mu- Heritage's nonbanking subsidiaries are subject to the conditions set forth in the Board's Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the Board's authority to require such modification 5. The Board has previously determined that thrift institutions have or termination of the activities of a bank holding become, or at least have the potential to become, major competitors of banks. NCNB Corporation, 70 FEDERAL RESERVE BULLETIN 225 company or any of its subsidiaries as the Board finds (1984); Sun Banks, Inc., 69 FEDERAL RESERVE BULLETIN 934 (1983); necessary to assure compliance with, and prevent Merchants Bancorp, Inc., 69 FEDERAL RESERVE BULLETIN 865 (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE evasions of, the provisions and purposes of the Act BULLETIN 298 (1983). and the Board's regulations and orders issued thereun- 6. If 50 percent of the deposits held by thrift institutions were der. included in the calculation of market concentration, the pre-acquisition four-firm concentration ratio would decrease to 72.1 percent and By order of the Board of Governors, effective the HHI would decrease to 1568. Upon consummation of this propos- June 6, 1985. al, the four-firm concentration ratio would increase to 76.7 percent and the HHI would increase by 229 points to 1796. The resulting market share of Applicant would decrease to 29.5 percent. Voting for this action: Vice Chairman Martin and Gover- 7. "Policy Statement of the Board of Governors of the Federal nors Partee, Gramley, and Seger. Absent and not voting: Reserve System for Assessing Competitive Factors Under the Bank Chairman Volcker and Governors Wallich and Rice. Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (1982). While the proposed policy statement has not been adopted by the Board, the Board is using the policy Guidelines as part of its analysis of the effect of a proposal on probable future JAMES MCAFEE competition. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin • August 1985 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During April 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) Louisiana Bancshares, Inc. Gulf National Bancorp, Inc., May 29, 1985 Baton Rouge, Louisiana Lake Charles, Louisiana Gulf National Bank at Lake Charles, Lake Charles, Louisiana Sun Banks, Inc., Sun Bank/Martin County, N.A. June 20, 1985 Orlando, Florida Stuart, Florida SunTrust Banks, Inc., Atlanta, Georgia By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date The Adino Company, The Onida Bank, Minneapolis June 10, 1985 Onida, South Dakota Onida, South Dakota Bank of Dardanelle Bankshares, Bank of Dardanelle, St. Louis June 3, 1985 Inc., Dardanelle, Arkansas Dardanelle, Arkansas Bank 2000, Inc., Bank 2000, N.A., Richmond June 5, 1985 McLean, Virginia McLean, Virginia Belle Plaine BanCorporation, State Bank of Belle Plaine, Minneapolis June 17, 1985 Inc., Belle Plaine, Minnesota Belle Plaine, Minnesota Blue Water Bancshares, Inc., Peoples Bank of Port Huron, Chicago June 3, 1985 Port Huron, Michigan Port Huron, Michigan Buchanan County Bancshares, Farmers State Bank of Buchanan Kansas City May 15, 1985 Inc., County, St. Joseph, Missouri St. Joseph, Missouri Central Banc System, Inc., Southern Illinois Bank, St. Louis June 3, 1985 Granite City, Illinois Fairview Heights, Illinois Charter Holding Company, Inc. First State Bank of Tuscaloosa, Atlanta May 31, 1985 Tuscaloosa, Alabama Tuscaloosa, Alabama Charter 17 Bancorp, Inc., Northwest National Bank, Chicago June 14, 1985 Richmond, Indiana Rensselaer, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 667 Section 3—Continued _ , , . Reserve Effective Applicant Bank(s) Bank date Citizens Corporation, Citizens Bank, Atlanta June 12, 1985 Manchester, Tennessee Smithville, Tennessee City Banc Corporation, City Bank of Childersburg, Atlanta June 14, 1985 Childersburg, Alabama Childersburg, Alabama Community Bancshares, Inc., The Peoples Bank of Hustonville, Cleveland June 6, 1985 Hustonville, Kentucky Kentucky, Hustonville, Kentucky Corn Belt Bancorporation, Union National Bank, Chicago May 3, 1985 Correctionville, Iowa Massena, Iowa Countricorp, The First National Bank of White Minneapolis June 7, 1985 White Sulphur Springs, Sulphur Springs, Montana White Sulphur Springs, Montana DeWitt First Bancshares Corpo- Bank of Lockesburg, St. Louis May 31, 1985 ration, Lockesburg, Arkansas DeWitt, Arkansas DuPage Financial Corporation, Washington Bank and Trust Com- Chicago June 13, 1985 Lake Forest, Illinois pany of Naperville, Naperville, Illinois Easton Bancshares, Incor- State Bank of Easton, Minneapolis June 25, 1985 porated, Easton, Minnesota Easton, Minnesota First Bankshares of St. Martin, First National Bank of St. Atlanta June 10, 1985 Ltd., Martin, St. Martinville, Louisiana St. Martinville, Louisiana First Wisconsin Corporation, First Bank of Grantsburg, Chicago June 10, 1985 Milwaukee, Wisconsin Grantsburg, Wisconsin Fourth Financial Corporation, M-L Bancshares, Inc., Kansas City June 11, 1985 Wichita, Kansas Wichita, Kansas Pittsburg Bancshares, Inc., Pittsburg, Kansas Coffey ville Bancshares, Inc., Coflfeyville, Kansas Salina Bancshares, Inc., Salina, Kansas Olathe Bancshares, Inc., Olathe, Kansas George Mason Bankshares, The George Mason Bank, Richmond June 17, 1985 Inc., Fairfax, Virginia Fairfax, Virginia Guyan Bancshares, Inc., American National Bank, Richmond June 5, 1985 Gilbert, West Virginia Logan, West Virginia Headquarters Holding Com- First National Bank of Ava, St. Louis June 3, 1985 pany, Ava, Illinois Ava, Illinois Hibernia Corporation, Guaranty Commerce Corpor- Atlanta June 14, 1985 New Orleans, Louisiana ation, Alexandria, Louisiana Homewood Holdings, Inc., Homewood Bancorporation, Inc., Chicago June 5, 1985 Omaha, Nebraska Homewood, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin • August 1985 Section 3—Continued . „ , , . Reserve Effective Applicant Bank(s) fiank date Iowa Park Bancshares, Inc., Windthorst National Bank, Dallas June 6, 1985 Iowa Park, Texas Windthorst, Texas Key Banks Inc., Bank of Oregon, New York May 31, 1985 Albany, New York Woodburn, Oregon Key Bancorp of the Pacific Inc., Anchorage, Alaska Landmark Financial Group, Tarrant County Bancshares, Inc., Dallas May 23, 1985 Inc., Fort Worth, Texas Fort Worth, Texas Lee County Bancshares, Inc., Lee County National Bank, Dallas June 6, 1985 Giddings, Texas Giddings, Texas Maiden Trust Corporation, Maiden Trust Company, Boston June 7, 1985 Maiden, Massachusetts Maiden, Massachusetts Marshall & Ilsley Corporation, Bay View State Bank, Chicago June 12, 1985 Milwaukee, Wisconsin Milwaukee, Wisconsin Membancshares, Inc., Memorial Bank N.A., Kansas City June 17, 1985 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Neosho County Bancshares, Bank of Commerce, Kansas City May 9, 1985 Inc., Chanute, Kansas Chanute, Kansas Norwood Associates II, The Midland Bank and Trust New York June 3, 1985 Hackensack, New Jersey Company, Midland Bancorporation, Paramus, New Jersey Paramus, New Jersey Oak Hill Financial Inc., Miami Valley Bank of Southwest Cleveland May 31, 1985 Oak Hill, Ohio Ohio, Franklin, Ohio Park Forest Holdings, Inc., Park Forest Bancorporation, Inc., Chicago June 5, 1985 Omaha, Nebraska Park Forest, Illinois Pemi Bancorp, Inc., The Pemigewasset National Bank Boston June 7, 1985 Plymouth, New Hampshire of Plymouth, Plymouth, New Hampshire Peoples Bancorp of Sylacauga, Peoples Bank and Trust Company Atlanta June 3, 1985 Inc., of Sylvacauga, Sylacauga, Alabama Sylacauga, Alabama Peoples State Bancshares, Inc., Citizens State Bank, Kansas City June 13, 1985 Rossville, Kansas Osage City, Kansas Prestonwood Bancshares, Inc., The Oaks Bank & Trust Com- Dallas May 16, 1985 Dallas, Texas pany, Dallas, Texas P.S.B. Bancorporation, Inc., Peoples Savings Bank, Chicago April 27, 1985 Hampton, Iowa Odebolt, Iowa Romy Hammes, Inc., Peoples Bank Marycrest, Chicago June 10, 1985 South Bend, Indiana Kankakee, Illinois Salem Community Bancorp, Community State Bank, St. Louis June 10, 1985 Inc., Salem, Illinois Salem, Illinois Sebree Bankcorp, Sebree Deposit Bank, St. Louis May 31, 1985 Sebree, Kentucky Sebree, Kentucky Shawneetown Bancorp, Inc., Saline County State Bank, St. Louis June 14, 1985 Shawneetown, Illinois Stonefront, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 669 Section 3—Continued t> w a Reserve Effective AApplicant Bank(s) ^ BanR South Central Financial Ser- State Bank of Bricelyn, Minneapolis May 31, 1985 vices, Inc., Bricelyn, Minnesota Bricelyn, Minnesota SSB Bancshares, Inc., Story County Bank & Trust Chicago May 9, 1985 Marshalltown, Iowa Company, Story City, Iowa St. Martin Bancshares, Inc., St. Martin Bank and Trust Atlanta June 4, 1985 St. Martinville, Louisiana Company, St. Martinville, Louisiana Sutton Bancshares, Inc., Sutton State Bank, Cleveland June 6, 1985 Attica, Ohio Attica, Ohio Tarrant County Bancshares, Landmark Bank-Northwest, Dallas May 23, 1985 Inc., White Settlement, Texas Fort Worth, Texas Union National Bancorp of Bar- The Union National Bank of Bar- Cleveland June 19, 1985 bourville, Inc., bourville, Barbourville, Kentucky Barbourville, Kentucky Water Tower Bancorp, Inc., Water Tower Trust and Savings Chicago June 4, 1985 Chicago, Illinois Bank, Chicago, Illinois Section 4 Nonbanking Reserve Effective Applicant company Bank date Banc One Corporation, Banc One Credit Corporation of Cleveland May 31, 1985 Columbus, Ohio Columbus Ohio Banc One Credit Corporation, Casselberry, Florida Byron Bancshares, Inc., Ives Insurance Agency, Chicago June 4, 1985 Byron, Illinois Byron, Illinois First Railroad & Banking Com- Financial Data Services, Inc., Atlanta June 18, 1985 pany of Georgia, Atlanta, Georgia Augusta, Georgia Marshall & Ilsley Corporation, Data Processing Department, Chicago June 6, 1985 Milwaukee, Wisconsin The First National Bank of Springfield, Springfield, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT A22 Gross demand deposits—individuals, partnerships, and corporations A3 Reserves, money stock, liquid assets, and debt measures A4 Reserves of depository institutions, Reserve FINANCIAL MARKETS Bank credit A5 Reserves and borrowings—Depository A23 Commercial paper and bankers dollar institutions acceptances outstanding A5 Federal funds and repurchase agreements— A23 Prime rate charged by banks on short-term Large member banks business loans A24 Interest rates—money and capital markets A25 Stock market—Selected statistics POLIC YINSTR 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 A33 Federal and federally sponsored credit MONETAR Y AND CREDIT A GGREGA TES agencies—Debt outstanding A12 Aggregate reserves of depository institutions and monetary base SECURITIES MARKETS AND A13 Money stock, liquid assets, and debt measures CORPORATE FINANCE A15 Bank debits and deposit turnover A16 Loans and securities—All commercial banks A34 New security issues—State and local governments and corporations A35 Open-end investment companies—Net sales and COMMERCIAL BANKING INSTITUTIONS asset position A17 Major nondeposit funds A18 Assets and liabilities, last-Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • August 1985 A35 Corporate profits and their distribution A54 Foreign official assets held at Federal Reserve A36 Nonfinancial corporations—Assets and Banks liabilities A55 Foreign branches of U.S. banks—Balance sheet A36 Total nonfarm business expenditures on new data plant and equipment A57 Selected U.S. liabilities to foreign official A37 Domestic finance companies—Assets and institutions liabilities and business credit REPORTED BY BANKS IN THE UNITED STATES REAL ESTATE A57 Liabilities to and claims on foreigners A38 Mortgage markets A58 Liabilities to foreigners A39 Mortgage debt outstanding A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on foreigners CONSUMER INSTALLMENT CREDIT A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined A40 Total outstanding and net change domestic offices and foreign branches A41 Terms REPORTED BY NONBANKING BUSINESS FLOW OF FUNDS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A63 Liabilities to unaffiliated foreigners A43 Direct and indirect sources of funds to credit A64 Claims on unaffiliated foreigners markets SECURITIES HOLDINGS AND TRANSACTIONS Domestic Nonfinancial Statistics A65 Foreign transactions in securities A66 Marketable U.S. Treasury bonds and notes— SELECTED MEASURES Foreign transactions A44 Nonfinancial business activity—Selected measures INTEREST AND EXCHANGE RATES A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A67 Discount rates of foreign central banks A47 Industrial production—Indexes and gross value A67 Foreign short-term interest rates A49 Housing and construction A68 Foreign exchange rates A50 Consumer and producer prices A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables International Statistics SPECIAL TABLES SUMMARY STATISTICS A70 Terms of lending at commercial banks, A53 U.S. international transactions—Summary May 1985 A54 U.S. foreign trade A76 Assets and liabilities of foreign banks, A54 U.S. reserve assets December 31, 1984 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 1985 1985 Q2 Q3 Q4 Ql Jan. Feb. Mar. Apr. May Reserves of depository institutions2 1 Total 8.6 6.8 -.7 21.2 31.1 19.8 5.9 10.4 13.8 2 Required 10.3 6.6 -1.5 20.7 35.2 15.2 10.3 11.4 12.3 3 Nonborrowed -10.8 -44.6 30.7 62.0 94.4 23.8 -3.2 19.1' 14.0 4 Monetary base3 7.0 7.2 3.9 8.7 8.0 12.2 5.4 4.0 9.6 Concepts of money, liquid assets, and debt4 5 Ml 6.5 4.5 3.2 10.6 9.0 14.3 5.7 6.1 13.8 6 M2 7.1 6.8 9.1 12.0 13.8' 11.1' 4.1' -.5' 8.4 7 M3 10.4' 9.5 11.0 10.7 10.3' 8.1' 5.7' .7 7.9 8 L 12.1' 12.2 9.4 9.8' 8.2' 10.1' 8.8' 1.5 n.a. 9 Debt 13.C 12.6' 13.4' 13.4' 13.2' 11.2' ll.C 12.0 n.a. Nontransaction components 10 In M25 7.2 7.6 10.9 12.5 15.2 10.1' 3.5' -2.5' 6.7 11 In M3 only6 24.4' 20.5' 18.7 5.5' -3.1' -3.3' 12.4' 5.9' 6.1 Time and savings deposits Commercial banks 12 Savings7 -6.7 -5.6 -10.4 -8.7 -9.8 -2.0 -10.9 -7.0 8.0 13 Small-denomination time8 13.1 13.4 6.9 -1.8 -7.1 -8.4 2.5 15.0 7.1 14 Large-denomination time9-10 21.8 19.3 12.2 2.6 -9.5 9.6 23.1 14.7 -4.8 Thrift institutions 15 Savings7 -.7 -6.5 -6.6 2.2 6.5 7.9 2.9 -.7 5.0 16 Small-denomination time 13.4 17.1 15.2 1.7 -3.4 -3.9 .5 4.8' 9.9 17 Large-denomination time9 48.1 37.8 29.8 21.0 22.1 2.3 -5.4 .8 13.2 Debt components4 18 Federal 13.1 14.7 15.6 15.9? 16.<y 13.7' 10.6^ 13.2 n.a. 19 Nonfederal 12.9' 12.(K 12.7' \2.& 12.4' 10.4' 11.1' 11.7' n.a. 20 Total loans and securities at commercial banks" 11.0 9.1 9.1' 9.9 6.4 12.7 11.4 4.7 13.3 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 Domestic Nonfinancial Statistics • August 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 Factors Mar. Apr. May Apr. 17 Apr. 24 May 1 May 8 May 15 May 22 May 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 182,130 187,124 189,001 186,787 186,177 195,039 195,592 188,009 186,050 2 U.S. government securities1 159,896 164,467 166,708 164,225 163,900 171,950 172,581 164,869 164,355 4 3 H Bo el u d g h u t n d o e u r t ri r g e h p t u rchase agreements 159,7 1 3 5 7 9 163,6 7 9 7 0 7 16 1 5 , , 3 3 4 6 3 5 164,22 0 5 163,90 0 0 16 4 7 , , 8 0 6 8 1 9 16 4 8 , , 4 1 1 6 7 4 164,86 0 9 164,35 0 5 5 Federal agency obligations 8,386 8,454 8,461 8,372 8,372 8,806 8,714 8,364 8,363 6 Bought outright 8,372 8,372 8,365 8,372 8,372 8,372 8,371 8,364 8,363 7 Held under repurchase agreements 14 82 96 0 0 434 343 0 0 8 Acceptances 0 0 0 0 0 0 0 0 0 9 Loans 1,646 1,316 1,178 1,198 1,118 1,272 634 1,393 1,474 10 Float 540 503 587 542 608 73 696 589 591 11 Other Federal Reserve assets 11,662 12,384 12,067 12,450 12,179 12,937 12,967 12,793 11,267 12 Gold stock 11,093 11,093 11,091 11,093 11,092 11,091 11,091 11,091 11,091 13 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 14 Treasury currency outstanding 16,565 16,634' 16,696 16,631' 16,645' 16,662 16,675 16,687 16,701 ABSORBING RESERVE FUNDS 15 Currency in circulation 179,085 180,973' 183,019 181,698 180,816 180,480 181,916 182,900 183,037 16 Treasury cash holdings 549 575 600 570 580 587 597 600 602 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 3,804 6,711 6,591 3,720 6,016 16,463 12,557 6,883 3,138 18 Foreign 229 218 227 231 204 222 219 241 233 19 Service-related balances and adjustments 1,647 1,556 1,549 1,587 1,543 1,576 1,503 1,516 1,618 20 Other 628 427 603 653 371 302 542 647 784 21 Other Federal Reserve liabilities and capital 6,099 6,424 6,310 6,186 6,407 6,488 6,383 6,290 6,328 22 Reserve balances with Federal Reserve Banks2 22,367 22,587 22,508 24,484 22,596 21,293 24,259 21,328 22,722 End-of-month figures Wednesday figures 1985 Apr. May Apr. 17 Apr. 24 May 1 May 8 May 15 May 22 May 29 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 184,711 197,652 185,262 187,676 189,571 200,338 192,684 186,438 190,176 24 U.S. government securities1 160,983 173,913 164,245 164,439 166,717 176,635 169,801 164,212 164,262 2 2 6 5 H Bo el u d g h u t n d ou er t ri r g e h p t u rchase agreements... 160,98 0 3 16 7 6 , , 4 4 5 6 3 0 164,24 0 5 164,43 0 9 166,71 0 7 16 1 5 0 , , 9 7 0 2 9 6 16 2 7 , , 1 6 4 6 1 0 164,21 0 2 164,26 0 2 27 Federal agency obligations 8,372 8,903 8,363 8,372 8,372 8,953 8,585 8,363 8,363 2 2 3 8 9 0 Ac B H c o e el u p d g t a h u n t n c o d e u s e r tr i r g e h p t u rchase agreements... 8,372 0 0 8,3 5 7 3 2 0 1 8,363 0 0 8,372 0 0 8,372 0 0 8,3 5 7 8 1 0 2 8,3 2 7 1 1 0 4 8,363 0 0 8,363 0 0 31 Loans 2,582 1,525 1,765 1,270 1,480 1,288 427 1,484 4,769 32 Float 298 254 -816 98 416 368 720 743 1,336 33 Other Federal Reserve assets 12,476 13,057 11,705 13,497 12,586 13,094 13,151 11,636 11,446 34 Gold stock 11,093 11,091 11,091 11,093 11,091 11,091 11,091 11,091 11,091 35 Special drawing rights certificate account .. 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 36 Treasury currency outstanding 16,601' 16,673' 16,726 16,643' 16,657' 16,673 16,685 16,699 16,713 ABSORBING RESERVE FUNDS 37 Currency in circulation 179,21c 180,858' 184,691 181,488 180,545 181,112 182,591 183,114 183,325 38 Treasury cash holdings 554 586 602 579 586 593 598 602 601 Deposits, other than reserve balances with Federal Reserve Banks 39 Treasury 3,063 19,305 1,933 4,284 19,660 7,526 3,414 3,110 40 Foreign 253 348 205 205 180 178 267 319 213 41 Service-related balances and adjustments ... 1,359 1,302 1,337 1,326 1,326 1,302 1,303 1,326 1,327 42 Other 347 324 557 824 315 366 504 1,469 472 43 Other Federal Reserve liabilities and capital 6,600 6,652 6,242 6,071 6,229 6,358 6,186 6,123 6,119 44 Reserve balances with Federal Reserve Banks2 25,638 20,660 22,131 25,254 23,889 23,152 26,104 22,480 27,431 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. Nov. Dec. Jan. Feb. Mar. Apr/ May 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss11111 24,939 21,138 21,738 20,843 21,738 21,577 20,416 22,065 23,217 22,377 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh22222 20,392 20,755 22,316 21,827 22,316 23,044 23,927 21,863 21,567 21,898 33333 VVVVVaaaaauuuuulllllttttt cccccaaaaassssshhhhh uuuuussssseeeeeddddd tttttooooo sssssaaaaatttttiiiiisssssfffffyyyyy rrrrreeeeessssseeeeerrrrrvvvvveeeee rrrrreeeeeqqqqquuuuuiiiiirrrrreeeeemmmmmeeeeennnnntttttsssss33333 ..... 17,049 17,908 18,958 18,392 18,958 19,547 19,857 18,429 18,435 18,666 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 3,343 2,847 3,358 3,434 3,358 3,497 4,070 3,434 3,132 3,232 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss55555 41,853 38,894 40,696 39,235 40,696 41,125 40,273 40,494 41,652 41,043 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 41,353 38,333 39,843 38,542 39,843 40,380 39,370 39,728 40,914 40,245 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss66666 500 561 853 693 853 745 903 766 738 798 88888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 697 774 3,186 4,617 3,186 1,395 1,289 1,593 1,323 1,334 99999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 33 96 113 212 113 62 71 88 135 165 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 187 2 2,604 3,837 2,604 1,050 803 1,059 868 534 Biweekly averages of daily figures for weeks ending 1985 Jan. 3C Feb. 13 Feb. 27' Mar. 13 Mar. 27 Apr. 10 Apr. 24' May 8 May 22 June 5p 1111111111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss11111 20,375 19,924 20,731 22,407 21,458 23,073 23,520 22,751 22,032 22,582 1111122222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh22222 23,828 24,893 23,203 21,518 22,353 21,274 21,880 21,327 22,357 21,692 1111133333 VVVVVaaaaauuuuulllllttttt cccccaaaaassssshhhhh uuuuussssseeeeeddddd tttttooooo sssssaaaaatttttiiiiisssssfffffyyyyy rrrrreeeeessssseeeeerrrrrvvvvveeeee rrrrreeeeeqqqqquuuuuiiiiirrrrreeeeemmmmmeeeeennnnntttttsssss33333 ..... 19,994 20,624 19,272 18,093 18,828 18,126 18,764 18,182 19,068 18,472 1111144444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 3,834 4,269 3,931 3,425 3,148 3,148 3,116 3,145 3,289 3,221 1111155555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss55555 40,369 40,548 40,002 40,500 40,286 41,199 42,284 40,933 41,100 41,053 1111166666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 39,599 39,537 39,191 39,719 39,477 40,642 41,400 40,234 40,248 40,253 1111177777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss66666 771 1,012 812 782 810 557 884 699 852 801 1111188888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 976 1,369 1,174 1,865 1,289 1,775 1,158 953 1,434 1,518 1111199999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 63 60 81 81 98 121 131 169 160 171 2222200000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 593 988 603 1,224 839 1,295 766 396 369 914 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 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 June 3 June 10 One day and continuing contract 1 Commercial banks in United States 63,357 62,838 54,786 61,576 59,551 60,948 57,948 60,878 71,024 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 25,116 24,127 23,919r 25,587 27,101 28,373 29,995 28,822 32,686 3 Nonbank securities dealers 7,835 7,372 7,310 6,944 6,769 8,583 9,936 12,702 8,428 4 All other 25,254 26,606 26,982 25,363 26,485 27,378 26,803 26,897 25,487 All other maturities 5 Commercial banks in United States 9,694 9,744 10,079 10,544 10,074 9,626 9,516 9,151 88,,883377 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 8,215 7,805 8,307 8,739 8,201 8,163 7,677 7,600 7,729 7 Nonbank securities dealers 8,063 8,376 9,475 9,946 9,766 9,499 10,135 8,996 9,214 8 All other 11,250 8,543 8,885 7,765 8,098 8,719 8,758 8,701 8,724 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 29,887 30,838 27,132 29,253 26,710 29,212 27,759 30,412 33,483 10 Nonbank securities dealers 6,137 6,799 6,581 6,894 6,480 7,492 6,982 7,379 7,928 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • August 1985 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit2 SShhoorrtt--tteerrmm aaddjjuussttmmeenntt ccrreeddiitt FFFeeedddeeerrraaalll RRReeessseeerrrvvveee aanndd sseeaassoonnaall ccrreeddiitt11 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 6/26/85 date rate 6/26/85 rate 6/26/85 rate 6/26/85 rate Boston 7'/2 5/20/85 71/2 8'/i 9 9'/i 10 5/20/85 New York 5/20/85 5/20/85 Philadelphia 5/24/85 5/24/85 Cleveland 5/21/85 5/21/85 Richmond 5/20/85 5/20/85 Atlanta 5/20/85 5/20/85 Chicago 5/20/85 5/20/85 St. Louis 5/21/85 5/21/85 Minneapolis 5/20/85 5/20/85 Kansas City 5/20/85 5/20/85 D Sa a n ll a F s rancisco... 7'/> 5 5 / / 2 2 0 1 / / 8 8 5 5 m 8V2 9 m 10 5 5 / / 2 2 0 1 / / 8 8 5 5 Range of rates in recent years3 Range (or F.R. Range (or F.R. Range (or F.R. level)— Bank level)— Bank level)— Bank Effective date All F.R. of Effective date All F.R. of Effective date All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. I 1 n 9 7 e 4 f — fec A t D pr e . c . 2 3 3 5 0 1 , 1973 7 8 ' V /> /i - 8 8 8 V A 11997788—— A JJuu u ll g yy . 2 1 3 1 0 7- 7 7 7 V '/ 1 4 4 / 4 m 7 m 1/4 11998811—— N MM o aa v yy . 5 8 2 1 1 3 3 1 - - 4 1 1 4 4 1 1 1 4 4 3 Dec. 1 9 6 7V 73 4 / - 4 8 7 7 3 % /4 S O e c p t. t . 2 2 1 2 0 6 8 8 m -8 '/ i 8 m 8' /2 Dec. 6 4 1 1 3 2 1 1 3 2 1975— Jan. 1 6 0 7 7'/ ' 4 /4 — -7 7 3 3 / / 4 4 7 71 3 / / 4 4 Nov. 3 1 8'/ 9 !- '/ 9 > '/ > 9 9 1 1 / / 2 2 11998822—— JJuullyy 2 2 0 3 llV 11 i- ^ 1 2 i l m lV l 24 71/4 7'/4 Aug. 2 11-11'/! 11 M Fe a b r . . 1 5 7 0 6 6 3 '/ / 4 6 4 3 -6 / -7 4 3 1 / / 4 4 6 6 6 3 3 '/ / / 4 4 4 1979— AA Ju uu ly gg .. 2 2 1 0 0 7 10 i 1 - 0 0 1 0l/ '/ 2 ! 1 1 10 0 0 V i ' /2 2 1 7 3 6 10 1 - 1 1 0 1 0 W '/2 1 1 1 0 1 0 '/! 14 6'/4 6'/4 SSeepptt.. 19 10»/>-l1 11 30 10 10 May 16 6-61/4 6 21 11 11 Oct. 12 9Vi-10 9 Vi 23 6 6 Oct. 8 11-12 12 13 91/2 9 Vi 10 12 12 Nov. 22 9-9'/! 9 1976— Jan. 2 1 3 9 5 5 V > 2-6 / 2 5 5'/ V ! 2 1980— Feb. 15 12-13 13 Dec. 2 1 6 4 8W 9 - 9 9 9 Nov. 22 5'/4-5'/2 5'/4 19 13 13 15 8'/>-9 8V*> 26 5'/4 5'/4 May 29 12-13 13 17 8'/! 8 Vi 30 12 12 1977— Aug. 30 5'/4-53/4 51/4 June 13 11-12 11 11998844—— AApprr.. 9 8'/i-9 9 3 1 5 !/4-53/4 53/4 16 11 11 13 9 9 O Se c p t. t . 2 2 6 6 5 3/4 6 53 /4 J S u e l p y t . 2 2 2 8 9 6 10 1 1 - 0 1 1 1 1 1 1 0 0 1 D N e o c v . . 2 2 2 1 6 4 8' 8 /i 8 ' - A 9 8 8 8 ' ' / / i ! 1978— Jan. 2 9 0 6- 6 6 '/ 1 2 / 2 (6MV. 2 N De o c v . . 1 5 7 12 1 - 2 1 3 1 1 2 3 MMaayy 2 2 0 8 7' 7 /2 '/ - ! 8 V V / / 2 2 May 1 12 1 6' 7 /> -7 1 1 8 13 13 In effect June 26, 1985 7'/! IVi 1. A temporary simplified seasonal program was established on Mar. 8, 1985, Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980, and the interest rate was set at 8'/2 percent at that time. On May 20 this rate was 1981, and 1982. lowered to 8 percent. In 1980 and 1981, the Federal Reserve applied a surcharge to short-term 2. Applicable to advances when exceptional circumstances or practices involve adjustment credit borrowings by institutions with deposits of $500 million or more only a particular depository institution and to advances when an institution is that had borrowed in successive weeks or in more than 4 weeks in a calendar under sustained liquidity pressures. As an alternative, for loans outstanding for quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was into account rates on market sources of funds, but in no case will the rate charged adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and be less than the basic rate plus one percentage point. Where credit provided to a to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective particular depository institution is anticipated to be outstanding for an unusually Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for prolonged period and in relatively large amounts, the time period in which each applying the surcharge was changed from a calendar quarter to a moving 13-week rate under this structure is applied may be shortened. See section 201.3(b)(2) of period. The surcharge was eliminated on Nov. 17, 1981. Regulation A. 3. Rates for short-term adjustment credit. For description and earlier data see the following publications of the Board of Governors: Banking and Monetary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments Al 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyy dd ppee ee pp oo oo ff ss ii dd tt ee ii pp nn oo ttee ss rr ii vv tt,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo oo ss ff ii dd tt ee ii pp nn oo ttee ss rr ii vv tt,, aa ll aa 33 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts1-* 9 7 l/2 1 1 2 2 / / 3 3 0 0 / / 7 7 6 6 O $0 v - e $ r 2 9 $ . 2 8 9 . m 8 i m lli i o ll n io n 11 3 22 1 11 / // 1 11 / // 8 88 5 55 $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 1 Vi years 3 10/6/83 TTiimmee aanndd ssaavviinnggss22--33 1 xh 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 2'A 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'/i 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 of foreign banks, and Edge Act nonpersonal time deposits, and Eurocurrency liabilities) of each depository corporations. institution be subject to a zero percent reserve requirement. The Board is to adjust 2. Requirement schedules are graduated, and each deposit interval applies to the amount of reservable liabilities subject to this zero percent reserve requirethat part of the deposits of each bank. Demand deposits subject to reserve ment each year for the next succeeding calendar year by 80 percent of the requirements were gross demand deposits minus cash items in process of percentage increase in the total reservable liabilities of all depository institutions, collection and demand balances due from domestic banks. measured on an annual basis as of June 30. No corresponding adjustment is to be The Federal Reserve Act as amended through 1978 specified different ranges of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the requirements for reserve city banks and for other banks. Reserve cities were exemption was established at $2.1 million. Effective with the reserve maintenance designated under a criterion adopted effective Nov. 9, 1972, by which a bank period beginning Jan. 1, 1985, the amount of the exemption is $2.4 million. In having net demand deposits of more than $400 million was considered to have the determining the reserve requirements of a depository institution, the exemption character of business of a reserve city bank. The presence of the head office of shall apply in the following order: (1) nonpersonal money market deposit accounts such a bank constituted designation of that place as a reserve city. Cities in which (MMDAs) authorized under 12 CFR section 1204.122; (2) net NOW accounts there were Federal Reserve Banks or branches were also reserve cities. Any (NOW accounts less allowable deductions); (3) net other transaction accounts; banks having net demand deposits of $400 million or less were considered to have and (4) nonpersonal time deposits or Eurocurrency liabilities starting with those the character of business of banks outside of reserve cities and were permitted to with the highest reserve ratio. With respect to NOW accounts and other maintain reserves at ratios set for banks not in reserve cities. transaction accounts, the exemption applies only to such accounts that would be Effective Aug. 24, 1978, the Regulation M reserve requirements on net balances subject to a 3 percent reserve requirement. due from domestic banks to their foreign branches and on deposits that foreign 6. For nonmember banks and thrift institutions that were not members of the branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3, respectively. The Regulation D reserve requirement of borrowings from unrelated 1987. For banks that were members on or after July 1, 1979, but withdrew on or banks abroad was also reduced to zero from 4 percent. before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends Effective with the reserve computation period beginning Nov. 16, 1978, on Oct. 24, 1985. For existing member banks the phase-in period of about three domestic deposits of Edge corporations were subject to the same reserve years was completed on Feb. 2, 1984. All new institutions will have a two-year requirements as deposits of member banks. phase-in beginning with the date that they open for business, except for those 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as institutions that have total reservable liabilities of $50 million or more. Christmas and vacation club accounts were subject to the same requirements as 7. Transaction accounts include all deposits on which the account holder is savings deposits. permitted to make withdrawals by negotiable or transferable instruments, pay- The average reserve requirement on savings and other time deposits before ment orders of withdrawal, and telephone and preauthorized transfers (in excess implementation of the Monetary Control Act had to be at least 3 percent, the of three per month) for the purpose of making payments to third persons or others. minimum specified by law. However, MMDAs and similar accounts offered by institutions not subject to the 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent rules of the Depository Institutions Deregulation Committee (DIDC) that permit was imposed on large time deposits of $100,000 or more, obligations of affiliates, no more than six preauthorized, automatic, or other transfers per month of which and ineligible acceptances. This supplementary requirement was eliminated with no more than three can be checks—are not transaction accounts (such accounts the maintenance period beginning July 24, 1980. are savings deposits subject to time deposit reserve requirements.) Effective with the reserve maintenance period beginning Oct. 25, 1979, a 8. The Monetary Control Act of 1980 requires that the amount of transaction marginal reserve requirement of 8 percent was added to managed liabilities in accounts against which the 3 percent reserve requirement applies be modified excess of a base amount. This marginal requirement was increased to 10 percent annually by 80 percent of the percentage increase in transaction accounts held by beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and all depository institutions determined as of June 30 each year. Effective Dec. 31, was eliminated beginning July 24, 1980. Managed liabilities are defined as large 1981, the amount was increased accordingly from $25 million to $26 million; time deposits, Eurodollar borrowings, repurchase agreements against U.S. effective Dec. 30, 1982, to $26.3 million; effective Dec. 29, 1983, to $28.9 million; government and federal agency securities, federal funds borrowings from non- and effective Jan. 1, 1985, to $29.8 million. member institutions, and certain other obligations. In general, the base for the 9. In general, nonpersonal time deposits are time deposits, including savings marginal reserve requirement was originally the greater of (a) $100 million or (b) deposits, that are not transaction accounts and in which a beneficial interest is the average amount of the managed liabilities held by a member bank, Edge held by a depositor that is not a natural person. Also included are certain corporation, or family of U.S. branches and agencies of a foreign bank for the two transferable time deposits held by natural persons, and certain obligations issued reserve computation periods ending Sept. 26, 1979. For the computation period to depository institution offices located outside the United States. For details, see beginning Mar. 20,1980, the base was lowered by (a) 7 percent or (b) the decrease section 204.2 of Regulation D. in an institution's U.S. office gross loans to foreigners and gross balances due from foreign offices of other institutions between the base period (Sept. 13-26, NOTE. Required reserves must be held in the form of deposits with Federal 1979) and the week ending Mar. 12, 1980, whichever was greater. For the Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a computation period beginning May 29, 1980, the base was increased by lxh Federal Reserve Bank indirectly on a pass-through basis with certain approved percent above the base used to calculate the marginal reserve in the statement institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • August 1985 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 Percent per annum Commercial banks mut S u a a v l i s n a g v s i n a g n s d b l a o n a k n s a ( s t s h o r c if i t a t i i n o s n ti s t u a t n io d n s)1 In effect June 30, 1985 In effect June 30, 1985 Type of deposit Percent Effective date Effective date 2 1 N Sa e v g i o n t g ia s b le order of withdrawal accounts 5 51 W /4 12/ 1 3 / 1 1 / /8 8 4 0 55 V1i/ 4 12 7 /3 /1 1 / / 7 8 9 0 3 Negotiable order of withdrawal accounts of $1,000 or more2 1/5/83 1/5/83 4 Money market deposit account2 <3) 12/14/82 (3) 12/14/82 Time accounts 5 7-31 days of less than $1,0004 51/! 1/1/84 5 <A 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 17,067 18,888 20,036 3,249 507 4,463 3,410 0 2,976 916 2 Gross sales 8,369 3,420 8,557 71 1,300 0 0 2,668 214 554 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,000 2,400 7,700 0 2,200 0 0 1,600 400 500 Others within 1 year 5 Gross purchases 312 484 1,126 600 0 146 182 0 0 961 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift 17,295 18,887 16,354 872 896 1,348 771 596 1,987 1,299 8 Exchange -14,164 -16,553 -20,840 0 -1,497 -3,363 -966 -625 -2,739 0 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 883300 0 0 0 465 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -14,524 -15,533 -13,709 -872 -896 594 -771 -596 -1,902 -1,299' 13 Exchange 11,804 11,641 16,039 0 1,497 1,763 966 625 1,645 0 5 to 10 years 14 Gross purchases 388 890 536 0 0 333355 0 00 0 00 15 Gross sales 0 0 300 0 0 0 0 100 0 0 16 Maturity shift -2,172 -2,450 -2,371 0 0 -1,893 0 0 -54 0 17 Exchange 2,128 2,950 2,750 0 0 850 0 0 600 0 Over 10 years 18 Gross purchases 307 383 441 0 0 164 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -601 -904 -275 0 0 -49 0 0 -30 0 21 Exchange 234 1,962 2,052 0 0 750 0 0 493 0 All maturities 22 Gross purchases 19,870 22,540 23,476 3,849 507 5,938 3,591 0 2,976 2,343 23 Gross sales 8,369 3,420 7,553 71 1,300 0 0 2,768 214 554 24 Redemptions 3,000 2,487 7,700 0 2,200 0 0 1,600 400 500 Matched transactions 25 Gross sales 543,804 578,591 808,986 52,893 89,689 51,904 63,674 66,668 57,076 54,718 26 Gross purchases 543,173 576,908 810,432 55,776 85,884 55,516 61,537 66,367 57,283 57,288 Repurchase agreements 27 Gross purchases 130,774 105,971 139,441 26,040 0 1122,,006633 3,888 2200,,222255 1199,,558844 44,,992222 28 Gross sales 130,286 108,291 139,019 30,867 0 12,063 2,261 21,852 17,077 7,429 29 Net change in U.S. government securities 8,358 12,631 8,908 1,835 -6,798 9,549 3,080 -6,295 5,077 1,351 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 00 0 00 0 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 189 292 256 1 14 90 0 0 17 * Repurchase agreements 33 Gross purchases 18,957 88,,883333 11,,220055 33,,774433 0 669988 550066 11,,446633 22,,442288 444455 34 Gross sales 18,638 9,213 817 4,112 0 698 119 1,851 2,048 825 35 Net change in federal agency obligations 130 -672 132 -370 -14 -90 388 388 363 -380 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 1,465 -6,811 99,,445599 3,468 -6,683 5,440 971 NOTE: Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • August 1985 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1985 1985 May 1 May 8 May 15 May 22 May 29 Mar. Apr. May Consolidated condition statement ASSETS 1 Gold certificate account 11,091 11,091 11,091 11,091 11,091 11,093 11,091 11,091 2 Special drawing rights certificate account 4,618 4,618 4,618 4,618 4,618 4,618 4,618 4,618 3 591 536 525 513 491 566 597 490 Loans 4 To depository institutions 1,288 427 1,484 4,769 1,419 2,582 1,525 1,765 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 8,371 8,371 8,363 8,363 8,363 8,372 8,372 8,363 8 Held under repurchase agreements 582 214 0 0 0 0 531 0 U.S. government securities Bought outright 9 Bills 75,100 76,851 73,403 73,453 73,905 71,469 75,651 73,436 10 Notes 67,269 67,269 67,066 67,066 67,066 66,070 67,269 67,066 11 Bonds 23,540 23,540 23,743 23,743 23,743 23,444 23,540 23,743 12 Total bought outright1 165,909 167,660 164,212 164,262 164,714 160,983 166,460 164,245 13 Held under repurchase agreements 10,726 2,141 0 0 0 0 7,453 0 14 Total U.S. government securities 176,635 169,801 164,212 164,262 164,714 160,983 173,913 164,245 15 Total loans and securities 186,876 178,813 174,059 177,394 174,496 171,937 184,341 174,373 16 Cash items in process of collection 8,174 6,948 10,844 7,430 8,278 6,127 9,730 6,865 17 Bank premises 578 578 582 583 581 572 577 581 Other assets 18 Denominated in foreign currencies2 4,007 4,010 4,017 4,021 4,026 3,971 4,007 4,058 19 All other3 8,509 8,563 6,798 6,842 7,313 7,933 8,473 7,066 20 Total assets 224,444 215,157 212,534 212,492 210,894 206,817 223,434 209,142 LIABILITIES 21 Federal Reserve notes 165,622 167,039 167,541 167,726 169,219 163,728 165,367 169,056 Deposits 22 To depository institutions 24,454 27,407 23,806 28,758 22,867 26,997 21,962 23,468 23 U.S. Treasury—General account 19,660 7,526 3,414 3,110 3,853 3,063 19,305 1,933 24 Foreign—Official accounts 178 267 319 213 223 253 348 205 25 Other 366 504 1,469 472 530 347 324 557 26 Total deposits 44,658 35,704 29,008 32,553 27,473 30,660 41,939 26,163 27 Deferred availability cash items 7,806 6,228 9,862 6,094 8,116 5,829 9,476 7,681 28 Other liabilities and accrued dividends4 2,618 2,438 2,375 2,372 2,335 2,445 2,614 2,359 29 Total liabilities 220,704 211,409 208,786 208,745 207,143 202,662 219,396 205,259 CAPITAL ACCOUNTS 30 Capital paid in 1,703 1,705 1,711 1,710 1,714 1,687 1,702 1,713 31 Surplus 1,626 1,626 1,626 1,626 1,626 1,624 1,626 1,626 32 Other capital accounts 411 417 411 411 411 844 710 544 33 Total liabilities and capital accounts 224,444 215,157 212,534 212,492 210,894 206,817 223,434 209,142 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 115,532 117,511 118,116 119,187 120,328 114,890 116,712 119,753 Federal Reserve note statement 35 Federal Reserve notes outstanding 196,383 196,954 197,533 197,940 198,229 196,021 196,490 198,021 36 LESS: Held by bank 30,761 29,915 29,992 30,214 29,010 32,293 31,123 28,965 37 Federal Reserve notes, net 165,622 167,039 167,541 167,726 169,219 163,728 165,367 169,056 Collateral held against notes net: 38 Gold certificate account 11,091 11,091 11,091 11,091 11,091 11,093 11,091 11,091 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 149,913 151,330 151,832 152,017 153,510 148,017 149,658 153,347 42 Total collateral 165,622 167,039 167,541 167,726 169,219 163,728 165,367 169,056 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 1985 May 1 May 8 May 15 May 22 May 29 Mar. 29 Apr. 30 May 31 1,288 427 1,484 4,769 1,419 2,582 1,525 1,765 2 Within 15 days 1,180 361 1,410 4,690 1,363 2,558 1,438 1,700 3 16 days to 90 days 108 66 74 79 56 24 87 65 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 176,635 169,801 164,212 164,262 164,714 160,983 173,913 164,245 10 Within 15 days1 18,846 12,590 5,281 5,153 7,975 4,565 12,305 4,256 11 16 days to 90 days 34,586 34,263 35,751 37,808 35,578 37,280 38,406 38,379 12 91 days to 1 year 50,568 50,314 49,954 48,075 47,935 46,587 50,568 48,474 13 Over 1 year to 5 years 37,204 37,204 37,132 37,132 37,132 37,309 37,204 37,042 14 Over 5 years to 10 years 14,639 14,638 15,281 15,281 15,281 14,546 14,638 15,281 20,792 20,792 20,813 20,813 20,813 20,696 20,792 20,813 16 Federal agency obligations—Total 8,954 8,585 8,363 8,363 8,363 8,372 8,903 8,363 17 Within 15 days1 590 222 67 151 162 142 613 162 18 16 days to 90 days 532 669 631 548 566 461 533 566 19 91 days to 1 year 2,065 1,929 1,949 1,949 1,918 1,942 1,991 1,918 20 Over 1 year to 5 years 4,083 4,082 4,088 4,087 4,089 4,164 4,083 4,089 21 Over 5 years to 10 years 1,284 1,284 1,229 1,229 1,229 1,264 1,284 1,229 22 Over 10 years 400 399 399 399 399 399 399 399 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • August 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. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted ADJUSTED FOR 1 Total reserves2 32.10 34.28 36.14 38.71 37.76 38.11 38.71 39.71 40.37 40.57 40.92 41.39 2 Nonborrowed reserves 31.46 33.65 35.36 35.52 31.74 33.50 35.52 38.32 39.08 38.97 39.59r 40.05 3 Nonborrowed reserves plus extended credit3 31.61 33.83 35.37 38.13 36.80 37.33 38.13 39.37 39.88 40.03 40.46 40.59 4 Required reserves 31.78 33.78 35.58 37.86 37.14 37.42 37.86 38.97 39.46 39.80 40.18 40.59 5 Monetary base4 158.10 170.14 185.49 198.74 196.18 197.43 198.74 200.07 202.10 203.01 203.69 205.33 Not seasonally adjusted 6 Total reserves2 32.82 35.01 36.86 40.13 37.95 38.69 40.13 40.70 39.88 40.07 41.25' 40.63 7 Nonborrowed reserves 32.18 34.37 36.09 36.94 31.94 34.07 36.94 39.31 38.59 38.47 39.93 39.30 8 Nonborrowed reserves plus extended credit3 32.33 34.56 36.09 39.55 36.99 37.91 39.55 40.36 39.39 39.53 40.80 39.83 9 Required reserves 32.50 34.51 36.30 39.28 37.33 37.99 39.28 39.96 38.97 39.30 40.52 39.84 10 Monetary base4 160.94 173.17 188.76 202.02 196.13 198.22 202.02 200.93 199.54 200.86 203.42 204.52 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.92 41.85 38.89 40.70 38.51 39.23 40.70 41.12 40.27 40.49 41.65 41.04 12 Nonborrowed reserves 41.29 41.22 38.12 37.51 32.50 34.62 37.51 39.73 38.98 38.90 40.33 39.71 13 Nonborrowed reserves plus extended credit3 41.44 41.41 38.12 40.09 37.37 38.54 40.09 40.88 39.83 40.03 40.77 40.44 14 Required reserves 41.61 41.35 38.33 39.84 37.89 38.54 39.84 40.38 39.37 39.73 40.91 40.25 15 Monetary base4 170.47 180.52 192.36 202.59 196.69 198.77 202.59 201.35 199.94 201.29 203.81'' 204.93 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 1985 1981' 1982' 1983' 1984 Dec. Dec. Dec. Dec. Feb. Mar. Apr.' May Seasonally adjusted 1 Ml 441.8 480.8 528.0 558.5 569.4 572.1 575.0 581.6 ? M2 1,794.4 1,954.9 2,188.8 2,371.7' 2,421-C 2,429.2' 2,428.0 2,445.0 M3 2,235.8 2,446.8 2,701.8 2,995.C 3,041.0' 3,055^ 3,057.5 3,077.7 4 L 2,5%.5 2,857.4 3,176.4 3,543.8' 3,598.1' 3,624.4' 3,628.8 n.a. 5 4,309.5 4,709.7 5,224.6 5,953.2' 6,074.7' 6,130.2' 6,191.7 n.a. Ml components 6 Currency2 124.0 134.3 148.4 158.7 160.5 161.3 161.7 163.0 7 Travelers checks3 4.4 4.3 4.9 5.2 5.3 5.4 5.5 5.5 8 Demand deposits4 235.2 238.6 243.5 248.6 251.7 251.9 252.5 255.7 9 Other checkable deposits5 78.2 103.5 131.3 146.0 151.8 153.6 155.3 157.3 Nontransactions components 10 In M26 1,352.6 1,474.0 1,660.8 1,813.2' 1,851.6' 1,857.0r 1,853.1 1,863.4 11 In M3 only7 441.4 492.0 512.9 623.3' 620.0' 626.4' 629.5 632.7 Savings deposits9 12 Commercial Banks 158.6 163.5 133.4 122.6 121.4 120.3 119.6 120.4 13 Thrift institutions 185.8 194.4 173.6 166.0 168.0 168.4 168.3 169.0 Small denomination time deposits9 14 Commerical Banks 347.8 379.8 350.7 387.0 382.0 382.8 387.6 389.9 15 Thrift institutions 475.8 471.7 433.8 498.6 495.6 495.8 497.8 501.9 16 Mo G n e e n y e r m al a r p k u e r t p o m s u e t u a a n l d f u b n ro d k s e r/dealer 150.6 185.2 138.2 167.5 175.1' 177.& 176.3 172.2 17 Institution-only 38.0 51.1 43.2 62.7 62.2 59.5 59.5 63.5 Large denomination time deposits10 18 Commercial Banks11 247.5 262.0 228.9 264.4 264.4 269.5 272.8 271.7 19 Thrift institutions 54.6 66.2 101.9 151.8 154.9 154.2 154.3 156.0 20 De F b e t d c e o ra m l p d o e n b e t nts 825.9 979.3 1,172.8 \,361.(y 1,401.0' 1,413.5' 1,429.0 n.a. 21 Non-federal debt 3,483.6 3,730.4 4,051.8 4,586.1' 4,673.7' 4,716.8' 4,762.7 n.a. Not seasonally adjusted ?? Ml 452.2 491.8 539.7 570.4 558.6 564.9 581.6 576.2 23 M2 1,798.7 1,959.6 2,194.0 2,376.7 2,414.5' 2,429.5' 2,439.9 2,441.1 24 M3 2,243.4 2,454.4 2,709.2 3,002.2' 3,034.4' 3,057.3' 3,069.4 3,075.6 75 L 2,604.7 2,862.1 3,180.1 3,545.1' 3,596.9' 3,631.8' 3,642.0 n.a. 26 4,304.7 4,703.8 5,218.8 5,947.2' 6,052.8' 6,101.4' 6,161.2 n.a. Ml components 27 Currency2 126.2 136.5 150.5 160.9 158.6 159.8 161.2 163.1 28 Travelers checks3 4.1 4.0 4.6 4.9 5.0 5.1 5.2 5.4 29 Demand deposits4 243.4 247.2 252.2 257.4 244.9 246.3 255.1 251.4 30 Other checkable deposits5 78.5 104.1 132.4 147.2 150.1 153.6 160.1 156.2 Nontransactions components 31 M2« 1,346.5 1,467.8 1,654.2 1,806.2' 1,858.3 1,864.9 32 M3 only7 444.7 494.8 515.2 625.5 619.8' 627^ 629.5 634.5 Money market deposit accounts 33 Commercial banks * 26.3 230.5 267.1 289.3 294.0 295.9 298.3 34 Thrift institutions .0 16.9 148.7 147.9 159.0 163.9 164.4 165.5 Savings deposits8 35 Commercial Banks 157.5 116622..11 132.2 112211..44 120.4 120.6 120.9 121.7 36 Thrift institutions 184.7 193.2 172.5 164.9 166.5 168.2 169.3 170.2 Small denomination time deposits9 37 Commercial Banks 347.7 380.1 351.1 387.6 384.1 383.7 383.9 385.2 38 Thrift institutions 475.5 471.7 434.2 499.4 499.5 496.2 495.6 495.4 39 M G on e e n y e r m al a r p k u e r t p o m s u e t u a a n l d f u b n ro d k s e r/dealer 150.6 185.2 138.2 167.5 175.1' W.6T 176.3 172.2 40 Institution-only 38.0 51.1 43.2 62.7 62.2 59.5 59.5 63.5 Large denomination time deposits10 41 Commercial Banks11 251.7 265.2 230.8 265.9 263.9 269.8 270.3 269.6 42 Thrift institutions 54.4 65.9 101.4 151.1 154.9 153.3 153.4 155.9 Debt components 43 Federal debt 823.0 976.4 1,170.2 1,364.7 1,397.4 1,412.0 1,427.1 n.a. 44 Non-federal debt 3,481.7 3,727.4 4,048.6 4,582.5' 4,655.4' 4,689.4' 4,734.1 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • August 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 (J.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 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 80,858.7 90,914.4 109,642.3 134,016.3 137,512.0 140,678.6 143,281.5 139,608.3 154,410.2 2 Major New York City banks 34,108.1 37,932.9 47,769.4 60,992.8 62,341.0 64,474.7 63,157.0 62,523.7 70,597.6 3 Other banks 46,966.5 52,981.5 61,873.1 73,023.5 75,171.0 76,203.9 80,124.5 77,084.6 83,812.6 4 ATS-NOW accounts3 761.0 1,036.2 1,405.5 1,678.5 1,677.5 1,552.0 1,618.6 1,567.0 1,684.7 5 Savings deposits4 679.6 720.3 741.4 579.1 486.0 501.3 499.8 539.2 589.1 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 285.8 324.2 379.7 448.2 453.4 468.6 471.4 456.3 508.5 7 Major New York City banks 1,116.7 1,287.6 1,528.0 1,917.5 1,903.0 2,008.6 1,902.2 1,967.0 2,183.2 8 Other banks 185.9 211.1 240.9 273.3 277.8 284.2 295.9 281.1 308.9 9 ATS-NOW accounts3 14.4 14.5 15.6 16.5 16.3 14.6 15.0 14.4 15.3 10 Savings deposits4 4.1 4.5 5.4 4.7 4.0 4.2 4.2 4.6 5.0 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 81,197.9 91,031.8 109,517.6 131,791.6 140,166.0 148,880.1 129,297.2 143,154.3 149,500.0 12 Major New York City banks 34,032.0 38,001.0 47,707.4 61,148.7 64,498.9 68,203.1 57,337.4 64,188.9 67,422.3 13 Other banks 47,165.9 53,030.9 64,310.2 70,643.0 75,667.1 80,677.0 71,959.8 78,965.4 82,077.7 14 ATS-NOW accounts3 737.6 1,027.1 1,397.0 1,524.8 1,625.4 1,838.9 1,524.4 1,624.7 1,940.9 15 MMDA5 567.4 819.7 899.7 1,103.9 980.9 1,032.5 1,220.5 16 Savings deposits4 672.9 720.0 742.0 538.7 470.6 544.7 455.5 552.9 644.4 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 286.4 325.0 379.9 438.8 447.1 486.0 437.2 480.9 491.4 18 Major New York City banks 1,114.2 1,295.7 1,510.0 1,944.6 1,910.8 2,025.9 1,780.6 1,990.7 2,138.6 19 Other banks 186.2 211.5 240.5 262.7 270.5 295.9 273.0 297.5 301.0 20 ATS-NOW accounts3 14.0 14.4 15.5 14.9 15.4 17.1 14.3 14.9 17.2 21 MMDA5 2.8 3.2 3.4 4.0 3.4 3.5 4.2 22 Savings deposits4 4.1 4.5 5.4 4.4 3.9 4.6 3.9 4.7 5.4 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSAs that were available through June states and political subdivisions. 1977. Historical data for ATS-NOW and savings deposits are available back to 3. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- July 1977. Back data are available on request from the Banking Section, Division counts authorized for automatic transfer to demand deposits (ATS). ATS data of Research and Statistics, Board of Governors of the Federal Reserve System, availability starts with December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts, MMDA and special club accounts, such These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • August 1985 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1984 1985 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted 1 Total loans and securities2 1,636.6 1,652.6 1,662.1 1,674.8 1,682.8 1,701.0' 1,714.8 1,724.0 1,742.3 1,758.9 1,765.8' 1,785.3 2 U.S. government securities 253.7 256.4 257.1 258.0 257.0 259.4 260.2 260.1 265.8 266.9 261.1 265.9 3 Other securities 139.7 139.5 140.8 141.9 141.5 141.1 139.9 142.4 140.8 138.7 140.1 142.1 4 Total loans and leases2 1,243.2 1,256.7 1,264.2 1,274.9 1,284.3 1,300.6 1,314.7 1,321.5 1,335.6 1,353.3 l,364.6r 1 ,377.3 6 5 Co B m a m nk e e rc rs ia a l c a c n e d p t i a n n d c u e s s t ri h a e l ld3.. 45 5 2. . 2 7 ' 45 6 5 . .0 2 ' 45 5 8. . 1 8 ' 46 5 0. . 0 4 ' 46 5 3. . 0 6 ? 46 6 7 . .1 0 ' 46 5 8 . .1 2 ' 46 5 8. . 4 C 47 6 3. . 4 1 ' 48 6 0. . 4 4 ' 48 5 0. . 9 4 ' 48 4 3 . . 9 3 7 Other commercial and industrial 446.5' 448.8' 452.3' 454^ 457.3' 461.1' 462^ 463.4' 467.2' 474.1' 475.5' 478.4 8 U.S. addressees4 434.8' 437.2' 440.6' 443.5' 446.7' 450.7' 453.3' 453.8' 457.1' 463.8' 465.3' 468.7 9 Non-U.S. addressees4 11.7 11.7' 11.6 11.1 10.6 10.3 9.6 9.7 10.2 10.3 10.3 9.6 10 Real estate 354.7 358.3 361.2 364.7 367.7 371.8 375.6 377.9 382.1 385.8 389.9 393.8 11 Individual 233.0 236.3 238.5 241.3 243.5 246.7 251.0 254.6 257.7 261.9 265.5 268.7 12 Security 28.6 28.0 26.1 28.8 30.3 30.2 31.5 31.9 31.6 32.8 35.1 37.5 13 Nonbank financial institutions 31.3' 31.4 30.8' 31.2' 31.1' 31.2 31.4 31.2' 30.9 30.7 31.2 31.5 14 Agricultural 40.5' 40.6 40.6' 40.7 40.6 40.5 40.3 40.2 40.2 40.3 40.1 39.8 15 State and political subdivisions 38.9 40.4' 41.2' 41.7' 41.2 42.1 44.0 46.9 46.6 46.8 47.1 47.4 16 Foreign banks 12.4' 12.5' 12.2' 11.7' 11.7' 11.9»- 11.5' 11.4' 11.5' 11.2' 10.8' 10.6 17 Foreign official institutions ... 8.8 9.3 9.4 8.9 8.5 8.4 8.3 7.9' 7.9 7.7 7.8 7.8 18 Lease financing receivables... 14.3 14.5 14.8 15.0 15.1 15.3 15.5 15.6 15.8 16.1 16.4 16.7 19 All other loans 28.7' 30.^ 31.4' 30^ 35.5' 37.4' 35.4 38.0 39.5' 39.8' 40.1 Not seasonally adjusted 20 Total loans and securities2 1,637.6 1,646.7 1,656.1 1,673.2 1,684.0 1,701.9 1,725.8 1,732.0 1,740.4 1,755.0 1,766.0' 1,781.4 21 U.S. government securities 257.2 256.2 255.5 255.7 254.1 255.2' 256.9 260.1 266.8 269.0 266.6 268.0 22 Other securities 139.4 138.2 140.4 141.3 140.9 141.2 141.5 143.3 141.0 138.9 139.8' 142.7 23 Total loans and leases2 1,241.0 1,252.4 1,260.2 1,276.2 1,289.0 1,305.5 1,327.4 1,328.7 1,332.6 1,347.1 1,359.7 1,370.7 2 lt 4 > Co B m a m nk e e rc rs ia a l c a c n e d p t i a n n d c u es s t h ri e a l l d . 3 . . . . . 450 5 . . 9 9 ' 45 6 4.3 .< y 45 5 6.1 .6 f 459 5 . . 9 3 ' 46 5 3. . 8 5 ' 46 5 7. . 3 9 ' 471 5 . . 2 7 ' 470 5 . . 3 1 ' 47 66 2 ..<< .9 KK 48 66 0. .. 0 33 '' 481 55 . .. 2 55 '' 48 44 1 .. . 99 9 26 Other commercial and industrial 445.0' 448.2' 450.4' 454^ 458.3' 461.4' 465.5' 465.2' 466.9' 473.7' 475.7' 477.0 22 2 77 8 N U o .S n . - U ad .S d . r e a ss d e d e r s e 4 s sees4.... 43 1 3 1. . 3 6 ' 43 1 6 1. . 7 5 ' 43 1 8 1 . . 8 6 ' 44 1 3 1. . 3 3 ' 44 1 7 1. . 1 2 ' 45 1 0 1 . . 5 0 ' 45 1 5 0 . . 0 5 ' ' 45 9 5 . . 8 4 ' 45 9 7 . . 7 2 ' 46 9 3 . . 8 9 ' 46 9 6 . . 5 2 ' 46 9 7 . . 2 8 29 Real estate 354.1 357.7 361.4 365.8 368.9 372.8 376.2 378.6 381.7 384.7 388.6 392.8 30 Individual 231.3 234.7 238.3 242.3 245.3 248.4 254.0 257.0 257.4 259.7 263.2 266.5 31 Security 28.5 26.6 25.4 27.7 30.2 31.7 35.2 33.0 3300..88 3322..22 3355..00 3366..00 32 Nonbank financial institutions 31.3' 31.4 30.9' 31.3' 31.C 31.1 31.5 31.3 30.7 30.6' 31.3 31.3 3333 Agricultural 40.9 41.4' 41.4 41.5 41.2 40.6 40.0 39.6 39.4 3399..33 3399..44 3399..77 34 State and political subdivisions 38.9 40.4' 41.2' 41.7' 41.2 42.1 44.0 46.9 46.6 46.8 47.1 47.4 3355 Foreign banks tt.O' 12.3' 11.9' n^ n.O' 12.2' 12.2' 11.7' 11.4 11.0' 10.5' 10.3 36 Foreign official institutions ... 8.8 9.3 9.4 8.9 8.5 8.4 8.3 7.9' 7.9 7.7 7.8 7.8 3 3 7 8 A Le ll a s o e th f e i r n a lo n a c n in s g receivables... 3 1 0 4 . . ( 3 y 3 1 0 4 .( .4 K 2 1 9 4 . .7 5 ' 3 1 0 4. . 9 3 ' 3 1 1 5 . . 8 0 ' 3 1 5 5. . 1 6 ' 3 1 9 5. . 5 3 ' 3 15 6 .8 . & 3 1 7 6 . . 7 0 ' 3 1 8 6 . .3 7 ' 3 1 9 6. . 4 2 ' 4 1 0 6 . . 3 7 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 BANKS' Monthly averages, billions of dollars 1984 1985 SSoouurrccee June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Total nondeposit funds 1 Seasonally adjusted2 99.4 100.3 103.5 106.5 107.9 112.0 108.5 102.3' 113.8' 111166..88'' 110055..00 111.6 2 Not seasonally adjusted 101.8 99.9 105.7 107.0 109.6 117.5 111.1 104.6 117.2' 119.2' 108.2' 116.8 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 133.2 134.5 139.3 141.6 141.4 145.0 140.5 138.7 146.7 114477..22 113388..77 114422..00 4 Not seasonally adjusted 135.7 134.0 141.5 142.1 143.1 150.5 143.1 141.1 150.2 149.6 141.9 147.2 5 Net balances due to foreign-related institutions, not seasonally adjusted -33.9 -34.2 -35.8 -35.1 -33.5 -33.1 -32.0 -36.5 -33.0' -30.4' -33.7' -30.4 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -32.9 -33.1 -35.0 -35.2 -34.2 -32.7 -31.4 -35.0 -31.7' -29.7' --3322..66 -29.8 7 Gross due from balances 73.8 71.2 72.8 71.5 69.8 68.3 69.0 71.4 70.5' 71.4' 75.0 74.5 8 Gross due to balances 40.9 38.1 37.7 36.3 35.6 35.6 37.6 36.5 38.8 41.7 42.4 44.7 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 -.9 -1.1 -.8 .1 .7 -.4 -.6 -1.5' --11..22'' --..77'' --11..11'' --..55 10 Gross due from balances 50.7 51.9 51.6 51.7 50.8 50.7 52.0 52.9 53.9' 53.3 51.7 52.4 11 Gross due to balances 49.7 50.8 50.8 51.8 51.5 50.4 51.4 51.4' 52.7 52.5 50.6' 51.8 Security RP borrowings 12 Seasonally adjusted® 76.1 77.5 79.9 81.4 82.0 84.0 81.1 82.3 90.1 92.0 8855..44 85.5 13 Not seasonally adjusted 76.0 74.6 79.6 79.4 81.2 87.0 81.1 82.2 91.1 92.0 86.0 88.3 U.S. Treasury demand balances7 14 Seasonally adjusted 14.1 12.8 13.1 16.0 8.0 17.3 16.1 14.7 13.0 11.8 1144..66 22.6 15 Not seasonally adjusted 12.4 11.9 10.3 17.5 11.0 10.4 12.5 18.5 15.8 12.8 15.4' 20.9 Time deposits, $100,000 or more8 16 Seasonally adjusted 309.9 314.8 314.2 315.4 321.4 323.0 325.8 324.8 332255..44 332299..99 333322..55'' 333311..00 17 Not seasonally adjusted 309.0 313.7 315.6 316.8 322.2 322.9 327.3 325.6 324.9 330.3 330.0' 328.9 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 • August 1985 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1984 1985 AAccccoouunntt July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May ALL COMMERCIAL BANKING INSTITUTIONS1 1 Loans and securities 1,765.3 1,784.5 1,798.3 1,822.7 1,822.7 1,864.0 1,853.8' 1,873.4' 1,880.5' 1,895.9 1,905.0 2 Investment securities 378.2 376.2 377.2 375.2 374.4 377.5 381.(K 382.0 383.3' 383.4 389.7 3 U.S. government securities 246.5 243.5 243.4 241.2 240.4 242.5 244.9' 248.0 250.9 250.0 254.0 4 Other 131.7 132.7 133.8 134.0 133.9 134.9 136.1' 134.1' 132.5' 133.4 135.7 5 Trading account assets 15.7 20.0 20.9 22.5 21.9 22.9 24.2 27.6 23.7 23.5 23.5 6 Total loans 1,371.4 1,388.4 1,400.2 1,424.9 1,426.4 1,463.7 1,448.7' 1,463.7' 1,473.5' 1,489.0 1,491.8 V Interbank loans 118.6 127.1 123.3 126.1 122.6 126.9 125.2 128.6 125.9' 130.7 123.8 8 Loans excluding interbank 1,252.8 1,261.2 1,276.9 1,298.8 1,303.8 1,336.8 1,323.4' 1,335.1' 1,347.6 1,358.3 1,368.0 9 Commercial and industrial 454.4 455.2 459.8 467.7 468.7 476.8 469.8' 476.5' 482.7 481.5 482.8 10 Real estate 356.8 361.8 366.6 369.8 374.4 377.7 380.2' 382.5' 386.0' 389.8 394.8 11 Individual 235.2 240.0 243.3 247.1 249.6 255.5 257.4 258.1 260.4 264.2 267.4 12 All other 206.5 204.2 207.3 214.2 211.1 226.8 216.1 218.0' 218.4' 222.8 223.0 13 Total cash assets 179.1 177.3 181.0 188.0 188.4 201.9 187.8 189.2 183.4' 187.3 201.4 14 Reserves with Federal Reserve Banks 19.4 17.4 18.0 18.1 20.4 20.5 20.9 19.6 19.8' 22.9 20.7 15 Cash in vault 21.6 22.2 21.6 21.4 23.9 23.3 21.9 21.8 21.3 21.3 23.3 lb Cash items in process of collection ... 60.2 60.7 63.2 70.2 66.5 75.9 66.9 68.8 6633..99 6644..11 7766..55 17 Demand balances at U.S. depository institutions 29.3 29.5 30.8 32.0 30.9 34.5 30^ 32.2 31.6 30.1 34.6 18 Other cash assets 48.6 47.5 47.4 46.3 46.7 47.7 47.3 46.7 46.8' 48.9 46.4 19 Other assets 191.3 190.6 196.8 201.6 190.1 196.8 191.7' 195.4' 188.5' 188.7 183.9 20 Total assets/total liabilities and capital ... 2,135.6 2,152.4 2,176.1 2,212.2 2,201.2 2,262.6 2,233.3' 2,257.9' 2,252.4' 2,272.0 2,290.4 21 Deposits 1,535.5 1,539.0 1,549.9 1,578.9 1,578.2 1,631.2 1,604.3' 1,617.8' 1,625.6' 1,636.4 1,659.2 22 Transaction deposits 441.4 440.0 442.3 462.7 453.1 491.1 456.8' 459.2' 457.6 465.3 479.9 23 Savings deposits 368.5 365.1 364.9 371.1 378.1 386.3 400.0 406.8 409.8 409.4 418.0 24 Time deposits 725.6 734.0 742.7 745.0 747.0 753.8 747.5 751.8 758.2' 761.7 761.2 25 Borrowings 292.0 301.5 307.1 314.3 298.8 304.1 306.5' 308.8' 300.6' 309.8 304.9 26 Other liabilities 167.9 169.7 172.9 175.1 179.4 181.1 173.7' 182.2' 176.91- 175.3 175.9 27 Residual (assets less liabilities) 140.2 142.1 146.2 144.0 144.8 146.2 148.8' 149.2' 149.2' 150.5 150.4 MEMO 28 U.S. government securities (including trading account) 255.6 255.1 255.4 256.3 255.2 256.9 261.9' 269.5 226688..44 226666..44 226688..99 29 Other securities (including trading account) 138.3 141.0 142.7 141.5 141.1 143.4 143.2' 140.2' 138.7' 140.6 144.2 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 1,676.7 1,688.4 1,707.4 1,728.5 1,726.7 1,765.4 1,759.6 1,774.6 1,781.9 1,796.4 1,809.1 31 Investment securities 371.2 369.1 369.8 367.9 367.5 370.5 373.7 374.7 376.6 376.7 383.2 32 U.S. government securities 241.4 238.5 238.4 236.1 235.8 237.9 240.2 243.2 246.6 246.0 250.3 33 Other 129.8 130.7 131.5 131.8 131.6 132.6 133.5 131.5 130.0 130.6 132.9 34 Trading account assets 15.7 20.0 20.9 22.5 21.9 22.9 24.2 27.6 23.7 23.5 23.5 35 Total loans 1,289.8 1,299.4 1,316.6 1,338.0 1,337.3 1,372.1 1,361.7 1,372.3 1,381.6 1,3%.2 1,402.5 36 Interbank loans 95.2 97.6 99.9 103.3 96.1 102.8 100.6 100.9 99.9 103.1 100.4 3/ Loans excluding interbank 1,194.6 1,201.8 1,216.7 1,234.7 1,241.2 1,269.3 1,261.2 1,271.4 1,281.6 1,293.1 1,302.1 38 Commercial and industrial 414.0 414.5 418.7 423.0 424.7 430.2 425.7 431.5 435.5 436.0 435.9 39 Real estate 353.1 358.0 362.3 365.5 369.1 372.1 375.1 377.3 380.9 384.5 389.4 40 Individual 235.1 239.8 243.1 246.9 249.4 255.3 257.2 257.9 260.2 263.9 267.1 41 All other 192.4 189.6 192.5 199.3 198.0 211.7 203.1 204.8 205.0 208.7 209.6 42 Total cash assets 166.7 165.9 169.0 176.6 176.8 190.3 175.7 177.8 172.5 175.7 190.4 43 Reserves with Federal Reserve Banks 18.0 16.7 17.4 17.1 19.7 19.2 20.2 18.7 19.2 22.3 19.6 44 Cash in vault 21.6 22.2 21.6 21.4 23.9 23.3 21.9 21.8 21.3 21.3 23.2 45 Cash items in process of collection ... 60.1 60.5 63.0 69.9 66.3 75.6 66.7 68.5 6633..77 6633..99 7766..22 46 Demand balances at U.S. depository institutions 27.9 28.2 29.4 30.7 29.4 32.9 29.5 30.9 30.3 28.7 33.2 47 Other cash assets 39.2 38.3 37.7 37.5 37.5 39.3 37.5 37.9 38.0 39.5 38.2 48 Other assets 138.9 140.6 141.2 147.9 139.7 142.1 137.6 139.0 137.2 137.6 132.1 49 Total assets/total liabilities and capital... 1,982.3 1,995.0 2,017.6 2,053.1 2,043.2 2,097.8 2,072.9 2,091.4 2,091.7 2,109.7 2,131.6 50 Deposits 1,495.4 1,500.3 1,510.9 1,539.1 1,538.0 1,587.8 1,561.8 1,573.7 1,580.5 1,591.7 1,616.0 51 Transaction deposits 434.8 433.7 435.9 456.2 446.8 484.5 450.6 452.9 451.4 458.9 473.5 52 Savings deposits 367.5 364.2 363.9 370.1 377.1 385.2 398.9 405.6 408.6 408.3 416.7 53 Time deposits 693.0 702.4 711.1 712.8 714.1 718.1 712.3 715.2 720.5 724.5 725.8 54 Borrowings 228.0 236.0 243.5 251.3 240.9 243.1 246.5 247.0 239.9 247.9 245.6 55 Other liabilities 121.5 119.3 119.7 120.5 122.3 123.5 118.4 124.2 124.7 122.3 122.3 56 Residual (assets less liabilities) 137.4 139.3 143.4 142.1 142.0 143.4 146.1 146.5 146.6 147.8 147.7 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 Apr. 10 Apr. 17 Apr. 24 May 1' May 8' May 15 May 22 May 29 June 5 1 Cash and balances due from depository institutions 92,703' 97,789 89,499 105,066 90,371 98,314 94,043 98,116 97,263 2 Total loans, leases and securities, net 832,786' 838,015' 834,784' 846,176 838,925 853,845 845,013 838,882 857,749 3 U.S. Treasury and government agency 86,111 86,882 85,471 84,150 85,607 87,900 88,037 87,417 88,146 4 Trading account 16,040 17,360 16,344 14,750 15,533 15,994 15,854 14,918 16,327 5 Investment account, by maturity 70,071 69,522 69,127 69,401 70,073 71,906 72,183 72,499 71,819 6 One year or less 21,579 21,132 20,753 20,860 20,902 20,862 20,398 20,654 20,684 7 Over one through five years 34,884 34,772 34,074 34,520 35,246 37,118 37,050 37,133 35,640 8 Over five years 13,608 13,618 14,300 14,020 13,925 13,925 14,734 14,713 15,494 9 Other securities 45,814 48,792 48,785 48,909 48,533 48,492 48,892 49,552 49,094 10 Trading account 2,534 5,131 4,862 5,112 4,263 4,393 4,475 4,984 4,304 11 Investment account 43,280 43,661 43,922 43,798 44,270 44,099 44,416 44,568 44,790 12 States and political subdivisions, by maturity 38,518 38,865 38,959 38,903 39,213 39,323 39,398 39,566 39,822 13 One year or less 4,527 4,728 4,723 4,851 4,998 5,000 4,946 5,220 5,255 14 Over one year 33,991 34,137 34,236 34,052 34,214 34,323 34,452 34,346 34,567 15 Other bonds, corporate stocks, and securities 4,762 4,796 4,963 4,894 5,057 4,776 5,018 5,002 4,968 16 Other trading account assets 2,980 2,905 2,309 3,101 3,061 3,371 2,866 3,560 4,205 17 Federal funds sold1 56,572 52,697 53,292 57,708 51,816 59,562 54,476 50,918 63,878 18 To commercial banks 40,639 35,766' 36,430 40,102 35,075 40,608 37,052 34,128 44,665 19 To nonbank brokers and dealers in securities 11,091 12,052' 10,775 12,224 10,904 12,887 11,605 11,298 12,347 20 To others 4,842 4,879 6,086 5,381 5,837 6,067 5,818 5,491 6,866 21 Other loans and leases, gross2 658,002' 663,476' 661,687' 669,154 666,828 671,472 667,718 664,387 669,519 22 Other loans, gross2 644,71(K 650,188' 648,218' 655,640 653,281 657,914 654,056 650,785 655,835 23 Commercial and industrial2 254,091' 254,572' 253,616' 254,742 255,645 254,734 254,230 253,462 253,973 24 Bankers acceptances and commercial paper 3,228' 2,838' 2,525' 2,582 2,234 2,256 2,200 2,287 2,448 25 All other 250,862' 251,734' 251,091' 252,160 253,410 252,478 252,030 251,174 251,524 26 U.S. addressees 245,228' 246,224' 245,610' 246,763 248,010 246,988 246,584 246,161 246,426 27 Non-U.S. addressees 5,634 5,510 5,481 5,397 5,400 5,490 5,446 5,014 5,098 28 Real estate loans2 165,032' 165,363' 165,822' 166,245 166,321 167,193 167,195 167,326 167,290 29 To individuals for personal expenditures 116,698' 117,581' 118,230' 118,847 118,991 119,240 119,534 119,981 120,228 30 To depository and financial institutions 39,380' 39,529' 39,705' 41,561 40,810 40,875 40,569 39,982 40,146 31 Commercial banks in the United States 9,766' 10,209' 10,866' 11,865 11,479 11,298 11,228 10,778 10,446 32 Banks in foreign countries 5,711' 5,412' 5,176' 5,356 5,571 5,528 5,489 5,165 5,384 33 Nonbank depository and other financial institutions . 23,902' 23,908' 23,663' 24,340 23,760 24,049 23,852 24,039 24,316 34 For purchasing and carrying securities 15,352 18,438 16,663 18,737 17,502 20,504 17,871 14,924 19,466 35 To finance agricultural production 7,036 7,086 7,119 7,111 7,130 7,191 7,208 7,211 7,238 36 To states and political subdivisions 29,779 29,750 29,880 29,949 29,989 30,057 30,051 30,010 29,913 37 To foreign governments and official institutions 3,923' 3,908' 3,892' 3,793 3,708 4,145 3,820 3,747 3,602 38 All other 13,418' 13,960r 13,291' 14,655 13,184 13,976 13,577 14,142 13,980 39 Lease financing receivables 13,292' 13,288' 13,468' 13,514 13,546 13,557 13,662 13,601 13,683 40 LESS: Unearned income 5,196' 5,199' 5,215' 5,175 5,165 5,179 5,190 5,194 5,147 41 Loan and lease reserve2 11,497 11,537 11,544 11,672 11,755 11,773 11,786 11,759 11,946 42 Other loans and leases, net2 641,309' 646,740' 644,927' 652,308 649,908 654,520 650,742 647,434 652,425 43 All other assets 131,692' 130,992' 129,04c 130,441 127,803 128,725 127,464 124,269 131,760 44 Total assets 1,057,181' 1,066,796' L,053,32Y 1,081,684 1,057,099 1,080,883 1,066,521 1,061,267 1,086,772 45 Demand deposits 187,809' 192,691' 182,666' 204,478 182,466 200,354 184,566 192,628 197,552 46 Individuals, partnerships, and corporations 144,092' 147,207' 138,963' 154,054 138,617 150,541 140,601 146,219 148,312 47 States and political subdivisions 5,074 5,659 5,256 6,184 4,718 5,735 4,809 5,169 5,378 48 U.S. government 2,471 1,874 3,555 1,491 2,595 3,388 2,271 1,047 4,133 49 Depository institutions in United States 20,695 23,570 20,891' 25,278 21,729 24,248 22,268 25,251 23,523 50 Banks in foreign countries 5,496 5,122 4,921 5,719 5,712 5,813 5,449 5,347 6,041 51 Foreign governments and official institutions 981 902 937 1,175 918 1,089 789 813 787 52 Certified and officers' checks 9,000 8,357 8,141' 10,578 8,179 9,539 8,379 8,780 9,378 53 Transaction balances other than demand deposits 39,160' 40,580' 37,741' 36,937 37,129 36,905 36,408 36,396 38,887 54 Nontransaction balances 465,372 464,520 464,677' 463,962 465,146 466,160 467,152 467,570 469,398 55 Individuals, partnerships and corporations 429,974' 428,763' 428,242' 427,918 428,642 429,366 429,848 430,714 433,058 56 States and political subdivisions 23,279 23,501 24,235 23,978 24,478 24,678 25,051 24,813 24,219 57 U.S. government 350 316 328' 334 338 345 357 376 340 58 Depository institutions in the United States 9,251' 9,352' 9,346' 9,215 9,230 9,321 9,510 9,360 9,382 59 Foreign governments, official institutions and banks... 2,517 2,588 2,525 2,518 2,458 2,450 2,386 2,307 2,398 60 Liabilities for borrowed money 194,180 200,800 198,541 203,528 204,436 207,705 208,895 195,705 211,071 61 Borrowings from Federal Reserve Banks 3,175 925 977 700 70 830 3,831 730 2,919 62 Treasury tax-and-loan notes 92 13,583 15,439 15,936 15,946 12,104 11,126 7,575 2,548 63 All other liabilities for borrowed money3 190,913 186,291 182,125 186,893 188,420 194,771 193,938 187,400 205,604 64 Other liabilities and subordinated note and debentures. 96,568' 94,334' 95,839' 98,620 93,604 95,472 95,200 94,613 94,851 65 Total liabilities 983,089' 992,925' 979,464' 1,007,525 982,781 1,006,596 992,222 986,913 1,011,758 66 Residual (total assets minus total liabilities)4 74,092 73,870 73,860 74,159 74,318 74,287 74,299 74,354 75,014 MEMO 67 Total loans and leases (gross) and investments adjusted3. 799,073' 808,777' 804,246' 811,056 809,291 818,891 813,709 810,928 819,731 68 Total loans and leases (gross) adjusted2'5 664,168' 670,199' 667,682' 674,895 672,090 679,128 673,914 670,398 678,286 69 Time deposits in amounts of $100,000 or more 156,014' 155,606' 156,621' 155,397 155,906 155,579 155,967 155,607 155,240 70 Loans sold outright to affiliates—total6 2,862 2,834 2,800 2,805 2,768 2,605 2,586 2,601 2,448 71 Commercial and industrial 1,967 1,933 1,902 1,922 1,875 1,786 1,758 1,721 1,591 72 Other 894 901 898 882 894 820 827 880 857 73 Nontransaction savings deposits (including MMDAs) 178,6% 177,396 176,467 176,762 177,377 178,723 179,052 179,792 181,859 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 Nonfinancial Statistics • August 1985 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1985 AAccccoouunntt Apr. 10 Apr. 17 Apr. 24 May 1 May 8 May 15 May 22 May 29 June 5 1 Cash and balances due from depository institutions 22,600 22,779 20,337 27,343 23,542 25,981 24,995 24,824 24,404 2 Total loans, leases and securities, net1 175,284 175,425 174,972 183,291 178,735 184,914 179,165 176,578 183,282 Securities 3 4 5 Investment account, by maturity 13,335 12,557 12,210 12,020 12,295 12,639 12,383 12,352 10,657 6 One year or less 2,321 1,847 1,803 1,683 1,664 1,681 1,428 1,416 1,304 7 Over one through five years 9,280 8,895 8,652 8,546 8,840 9,217 9,218 9,222 7,450 8 Over five years 1,734 1,815 1,754 11,,779900 11,,779911 11,,774411 11,,773377 11,,771133 11,,990033 9 10 11 Investment account 9,231 9,489 9,530 9,560 9,674 9,739 9,764 9,769 9,934 12 States and political subdivisions, by maturity 8,354 8,598 8,612 8,603 8,643 8,689 8,670 8,671 8,805 13 One year or less 910 1,082 1,092 1,227 1,227 1,243 1,119 1,248 1,236 14 Over one year 7,444 7,516 7,520 7,376 7,416 7,446 7,550 7,423 7,570 15 Other bonds, corporate stocks and securities 877 890 918 957 11,,003311 11,,005500 11,,009944 11,,009988 11,,112299 1166 Loans and leases 17 Federal funds sold3 21,640 19,090 20,593 24,788 21,200 24,037 21,578 21,590 25,905 18 To commercial banks 13,469 9,548 11,092 14,804 11,461 12,137 11,736 11,282 13,890 19 To nonbank brokers and dealers in securities 5,330 6,533 5,316 6,759 5,744 7,818 5,694 6,289 7,081 20 To others 2,841 3,008 4,185 3,225 3,9% 4,082 4,147 4,019 4,934 21 Other loans and leases, gross 135,944 139,156 137,506 141,783 140,473' 143,419 140,365 137,789 141,727 22 Other loans, gross 133,671 136,878 135,044 139,320 138,007' 140,950 137,781 135,275 139,209 23 Commercial and industrial 61,210 61,926 61,240 62,063 62,552 62,048 61,765 61,419 61,794 24 Bankers acceptances and commercial paper 798 700 614 665 656 712 720 755 813 25 All other 60,412 61,226 60,626 61,398 61,897 61,336 61,045 60,664 60,981 26 U.S. addressees 59,729 60,556 59,978 60,752 61,227 60,611 60,350 59,956 60,273 27 Non-U.S. addressees 683 670 648 646 670 725 695 708 708 28 Real estate loans 25,359 25,392 25,623 25,697 25,800 25,986 26,043 26,030 26,012 29 To individuals for personal expenditures 16,357 16,481 16,577 16,682 16,789 16,770 16,795 16,870 16,853 30 To depository and financial institutions 11,129 11,215 11,101 12,329 11,938r 11,607 11,704 11,506 11,502 31 Commercial banks in the United States 1,920 2,153 2,255 2,774 2,493' 2,188 2,150 2,297 2,346 32 Banks in foreign countries 2,035 1,884 1,633 1,919 2,169' 2,013 2,025 1,743 1,892 33 Nonbank depository and other financial institutions 7,174 7,179 7,213 7,636 7,276 7,406 7,528 7,466 7,264 34 For purchasing and carrying securities 7,064 9,276 7,956 9,766 8,680 11,397 7,704 6,551 10,446 35 To finance agricultural production 487 478 444 435 435 426 439 434 421 36 To states and political subdivisions 7,874 7,868 7,894 7,938 7,944' 7,973 8,009 7,911 7,869 37 To foreign governments and official institutions 900 918 925 839 8^ 1,191 891 848 769 38 All other 3,289 3,324 3,284 3,569 3,051' 3,552 3,431 3,704 3,543 39 Lease financing receivables 2,273 2,278 2,462 2,463 2,466 2,468 2,583 2,514 2,518 40 LESS: Unearned income 1,470 1,466 1,470 1,441 1,446 1,450 1,455 1,453 1,419 41 Loan and lease reserve 3,396 3,400 3,396 3,418 3,462 3,469 3,470 3,469 3,521 42 Other loans and leases, net 131,078 134,289 132,640 136,924 135,566' 138,499 135,440 132,866 136,787 43 All other assets4 66,9% 70,312 67,797 66,731 64,733' 66,882 66,732 64,185 69,640 44 Total assets 264,880 268,516 263,106 277,366 267,010' 277,777 270,892 265,587 277,326 Deposits 45 Demand deposits 46,144 46,230 45,098 54,385 44,634' 52,418 47,262 48,147 48,651 46 Individuals, partnerships, and corporations 31,702 32,036 30,916 37,065 29,691' 34,536 31,708 32,921 32,183 47 States and political subdivisions 657 704 876 926 780' 1,431 835 771 1,037 48 U.S. government 428 270 611 177 537 646 513 120 825 49 Depository institutions in the United States 4,127 5,209 4,520 5,871 4,624' 5,701 5,176 5,303 4,938 50 Banks in foreign countries 4,226 3,802 3,662 4,323 4,425' 4,577 4,268 4,110 4,674 51 Foreign governments and official institutions 811 721 756 1,003 746' 933 612 640 582 52 Certified and officers' checks 4,192 3,487 3,756 55,,002200 33,,883322 44,,559944 44,,114499 44,,228833 44,,441133 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 4,233 4,486 4,124 3,958 3,919 3,933 3,850 3,864 4,044 54 Nontransaction balances 84,642 84,820 84,963 85,608 85,688 86,125 85,950 85,700 86,158 55 Individuals, partnerships and corporations 77,038 76,963 76,977 77,568 77,508 77,997 77,717 77,711 78,378 56 States and political subdivisions 3,860 4,149 4,197 4,208 4,440 4,457 4,553 4,459 4,373 57 U.S. government 61 60 67 66 66 76 80 78 50 58 Depository institutions in the United States 2,360 2,324 2,418 2,469 2,454 2,404 2,436 2,380 2,336 59 Foreign governments, official institutions and banks 1,324 1,324 1,304 1,298 1,220 1,191 1,163 1,071 1,020 60 Liabilities for borrowed money 64,412 67,946 63,121 66,421 6688,,888899'' 7700,,334488 69,653 6622,,885522 73,830 61 950 2,615 1 980 62 Treasury tax-and-loan notes 9 3,876 4,129 4,306 4,144 2,895 2,486 1,746 645 63 All other liabilities for borrowed money5 63,453 64,069 58,992 62,115 64,744' 67,454 64,552 61,107 71,205 64 Other liabilities and subordinated note and debentures 41,864 41,535 42,331 43,468 40,341' 41,390 40,529 41,485 40,887 65 Total liabilities 241,296 245,017 239,637 253,840 243,47<K 254,216 247,244 242,048 253,570 66 Residual (total assets minus total liabilities)6 23,584 23,499 23,469 23,526 23,539 23,562 23,647 23,538 23,757 MEMO 67 Total loans and leases (gross) and investments adjusted1,7 164,761 168,590 166,491 170,573 169,689' 175,509 170,204 167,922 171,986 68 Total loans and leases (gross) adjusted7 142,195 146,544 144,752 148,993 147,720' 153,131 148,056 145,800 151,395 69 Time deposits in amounts of $100,000 or more 32,582 32,981 33,441 33,546 33,842 34,001 33,829 33,267 33,500 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 A Millions of dollars, Wednesday figures 1985 AAccccoouunntt Apr. 10 Apr. 17 Apr. 24 May 1 May 8 May 15 May 22 May 29 June 5 1 Cash and due from depository institutions. 6,751 6,466 6,621 6,686' 6,950' 6,606 6,436 6,302 6,969 2 Total loans and securities 44,820 43,667 46,339 45,826 44,862 44,426 45,989 44,614 45,283 3 U.S. Treasury and govt, agency securities 3,461 3,620 3,431 3,379 3,439 3,375 3,324 3,143 3,269 4 Other securities 1,575 1,626 1,629 1,674 1,642 1,629 1,630 1,632 1,687 5 Federal funds sold1 4,002 3,431 5,262 4,911 4,246 3,302 4,389 3,925 3,772 6 To commercial banks in the United States 3,611 3,113 4,916 4,473 3,837 3,066 4,075 3,553 3,385 7 To others 390 318 346 438 409 236 314 372 388 8 Other loans, gross 35,782 34,990 36,016 35,862 35,535 36,120 36,645 35,914 36,554 9 Commercial and industrial 21,328 20,566 20,620 20,899 20,639 20,670 21,351 21,261 21,697 10 Bankers acceptances and commercial paper 1,927 2,031 1,962 1,896 1,776 1,663 1,628 1,819 2,029 11 All other 19,400 18,535 18,657 19,003 18,863 19,006 19,723 19,442 19,669 12 U.S. addressees 18,195 17,406 17,539 17,902 17,743 17,885 18,429 18,389 18,569 13 Non-U.S. addressees 1,205 1,129 1,119 1,102 1,119 1,122 1,294 1,053 1,099 14 To financial institutions 10,604 10,587 11,334 10,916 10,832 11,175 11,209 10,714 10,604 15 Commercial banks in the United States . 8,374 8,441 8,906 8,545 8,552' 8,853 9,062 8,444 8,251 16 Banks in foreign countries 1,166 1,132 1,191 1,098 1,024' 1,070 1,023 1,112 1,137 17 Nonbank financial institutions 1,063 1,014 1,237 1,273 1,255 1,252 1,124 1,158 1,216 18 To foreign govts, and official institutions.. 685 694 686 678 680 667 670 667 707 19 For purchasing and carrying securities .. 1,084 1,039 1,243 1,323 1,275 1,264 1,089 938 1,195 20 All other 2,082 2,104 2,134 2,045 2,108 2,345 2,326 2,334 2,350 21 Other assets (claims on nonrelated parties).. 17,969 18,009 18,418 18,572 18,734' 18,774 18,723 18,911 18,408 22 Net due from related institutions 10,664 10,490 9,952 10,292 10,368' 11,106 9,998 9,294 10,503 23 Total assets 80,205 78,632 81,329 81,376' 80,914' 80,913 81,146 79,121 81,162 24 Deposits or credit balances due to other than directly related institutions 24,978 25,076 25,180 25,068' 24,127' 23,715 23,606 23,649 23,525 25 Credit balances 135 177 188 139 135 158 172 193 157 26 Demand deposits 1,528 1,632 1,629 1,817' 1,581' 1,789 1,556 1,631 1,670 27 Individuals, partnerships, and corporations 836 888 872 987' 829' 877 843 866 854 28 Other 692 743 757 830 752' 912 714 765 816 29 Time and savings deposits 23,315 23,267 23,363 23,112' 22,410' 21,768 21,878 21,825 21,699 30 Individuals, partnerships, and corporations 18,783 18,648 18,764 18,334' 17,774' 17,274 17,458 17,390 16,969 31 Other 4,532 4,619 4,599 4,778 4,636 4,493 4,420 4,435 4,370 32 Borrowings from other than directly related institutions 29,532 28,641 29,207 29,706 29,874 30,695 30,230 27,894 30,664 33 Federal funds purchased2 12,547 11,481 11,704 12,474 12,484 13,093 12,384 10,645 13,598 34 From commercial banks in the United States 10,237 9,218 9,659 9,966 10,166 11,103 10,313 8,425 11,340 35 From others 2,310 2,263 2,045 2,507 2,318 1,990 2,071 2,220 2,258 36 Other liabilities for borrowed money.... 16,985 17,159 17,502 17,232 17,390 17,603 17,846 17,249 17,066 37 To commercial banks in the United States 15,823 15,934 16,256 16,006 16,080 16,288 16,412 16,044 15,850 38 To others 1,162 1,225 1,246 1,226 1,309 1,315 1,434 1,205 1,215 39 Other liabilities to nonrelated parties 19,689 19,786 20,277 20,514 20,749 20,777 20,659 20,866 20,317 40 Net due to related institutions 6,006 5,130 6,665 6,088 6,164' 5,726 6,651 6,712 6,657 41 Total liabilities 80,205 78,632 81,329 81,376' 80,914' 80,913 81,146 79,121 81,162 MEMO 42 Total loans (gross) and securities adjusted3 32,835 32,112 32,517 32,807 32,472' 32,506 32,851 32,617 33,646 43 Total loans (gross) adjusted3 27,798 26,867 27,456 27,755 27,391' 27,502 27,897 27,842 28,690 • 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 Nonfinancial Statistics • August 1985 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations' 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 . ' D 19 e 8 c 0 . D 19 e 8 c 1 . D 1 e 98 c. 2 2 D 19 e 8 c 3 . Nov. Dec. Jan. Feb. Mar. Apr. Commercial paper (seasonally adjusted unless noted otherwise) 1 AU issuers 112,803 124,374 165,829 166,436 188,312 235,363 239,117 245,322 247,095 250,575 255,236 Financial companies4 Dealer-placed paper5 2 Total 17,359 19,599 30,333 34,605 44,622 55,176 5566,,991177 5599,,771133 6600,,118866 6600,,889955 6633,,440055 3 Bank-related (not seasonally adjusted) 2,784 3,561 6,045 2,516 2,441 1,996 2,035 2,137 2,265 2,304 2,180 Directly placed paper6 4 Total 64,757 6677,,885544 8811,,666600 8844,,339933 96,918 110099,,441199 111100,,447744 111133,,110011 111144,,882244 111188,,002299 111177,,884411 5 Bank-related (not seasonally adjusted) 17,598 22,382 26,914 32,034 35,566 40,185 42,105 43,046 42,759 43,334 42,405 6 Nonfinancial companies7 30,687 36,921 53,836 47,437 46,772 70,768 71,726 72,508 72,085 71,651 73,990 Bankers dollar acceptances (not seasonally adjusted)8 7 Total 45,321 54,744 69,226 79,543 78,309 75,179 75,470 72,273 76,109 73,726 72,825 Holder 8 Accepting banks 9,865 10,564 10,857 10,910 9,355 10,397 10,255 10,060 10,623 10,473 9,666 9 Own bills 8,327 8,963 9,743 9,471 8,125 9,113 9,065 8,839 9,726 9,166 8,263 10 Bills bought 1,538 1,601 1,115 1,439 1,230 1,284 1,191 1,220 897 11,,334400 11,,440033 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 1,442 949 729 615 671 679 761 737 728 13 Others 33,370 41,614 56,731 66,204 68,225 64,167 64,543 61,603 64,779 65,865 65,965 Basis 14 Imports into United States 10,270 11,776 14,765 17,683 15,649 16,433 16,975 16,733 17,115 16,124 16,417 15 Exports from United States 9,640 12,712 15,400 16,328 16,880 15,849 15,859 15,445 15,881 15,179 14,875 16 All other 25,411 30,257 39,060 45,531 45,781 42,897 42,635 40,095 43,113 42,423' 41,533 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 Rate Effective Date Rate Month Average Month rate 11.00 1984—Oct. 17 12.50 1983—Jan 11.16 1984—Apr. 10.50 29 12.00 Feb 10.98 May 11.00 Nov. 9 11.75 Mar 10.50 June 28 11.25 Apr 10.50 July 11.50 Dec. 20 10.75 May 10.50 Aug. 12.00 June 10.50 Sept. 12.50 1985—Jan. 15 10.50 July 10.50 Oct. 13.00 May 20 10.00 Aug 10.89 Nov. 12.75 June 18 9.50 Sept 11.00 Dec. Oct 11.00 Nov 11.00 1985—Jan. Dec 11.00 Feb. Mar. 1984—Jan.. 11.00 Apr., Feb. 11.00 May. Mar. 11.21 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 Nonfinancial Statistics • August 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. 1985 1985, week ending IInnssttrruummeenntt 11998822 11998833 11998844 Feb. Mar. Apr. May May 3 May 10 May 17 May 24 May 31 MONEY MARKET RATES 1 Federal funds1-2 12.26 9.09 10.22 8.50 8.58 8.27 7.97 8.35 8.19 8.14 7.91 7.60 2 Discount window borrowing1'2'3 11.02 8.50 8.80 8.00 8.00 8.00 7.81 8.00 8.00 8.00 7.79 7.50 Commercial paper4-5 3 1-month 11.83 8.87 10.05 8.46 8.74 8.31 7.80 8.15 8.00 7.93 7.52 7.46 4 3-month 11.89 8.88 10.10 8.54 8.90 8.37 7.83 8.19 8.04 7.95 7.54 7.48 5 6-month 11.89 8.89 10.16 8.69 9.23 8.47 7.88 8.31 8.11 7.% 7.60 7.54 Finance paper, directly placed4-5 6 1-month 11.64 8.80 9.97 8.42 8.70 8.29 7.74 8.16 7.97 7.74 7.49 7.44 7 3-month 11.23 8.70 9.73 8.25 8.67 8.26 7.71 8.02 7.94 7.75 7.49 7.42 8 6-month 11.20 8.69 9.65 8.20 8.65 8.27 7.69 7.96 7.93 7.74 7.50 7.39 Bankers acceptances5-6 9 3-month 11.89 8.90 10.14 8.55 8.88 8.33 7.77 8.14 8.02 7.84 7.51 7.43 10 6-month 11.83 8.91 10.19 8.69 9.20 8.42 7.81 8.26 8.04 7.85 7.59 7.47 Certificates of deposit, secondary market7 11 1-month 12.04 8.96 10.17 8.50 8.73 8.35 7.83 8.17 8.01 7.97 7.58 7.49 12 3-month 12.27 9.07 10.37 8.69 9.02 8.49 7.91 8.29 8.14 8.04 7.64 7.55 13 6-month 12.57 9.27 10.68 9.03 9.60 8.75 8.08 8.57 8.29 8.15 7.81 7.74 14 Eurodollar deposits, 3-month8 13.12 9.56 10.73 9.05 9.32 8.74 8.13 8.58 8.44 8.20 8.01 7.86 U.S. Treasury bills5 Secondary market9 15 3-month 10.61 8.61 9.52 8.26 8.52 7.95 7.48 7.78 7.76 7.50 7.25 7.19 16 6-month 11.07 8.73 9.76 8.39 8.90 8.23 7.65 8.03 7.92 7.68 7.41 7.32 17 1-year 11.07 8.80 9.92 8.56 9.06 8.44 7.85 8.25 8.09 7.90 7.63 7.53 Auction average10 18 3-month 10.69' 8.63' 9.58' 8.22 8.56 7.99 7.56 7.87 7.76 7.69 7.28 7.22 19 6-month 11.08' 8.75' 9.8<y 8.34 8.92 8.31 7.75 8.11 7.93 7.90 7.43 7.39 20 1-year 11.10' 8.86 9.91 8.46 9.24 8.44 7.94 n.a. n.a. 7.94 n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds" Constant maturities12 21 1-year 12.27 9.57 10.89 9.29 9.86 9.14 8.46 8.92 8.73 8.52 8.22 8.09 22 2-vear 12.80 10.21 11.65 10.17 10.71 10.09 9.39 9.85 9.68 9.44 9.13 9.01 73 2-w-year13 10.05 10.05 24 3-year 12.92 10.45 11.89 10.55 11.05 10.49 9.75 10.32 10.06 9.75 9.43 9.36 25 5-year 13.01 10.80 12.24 11.13 11.52 11.01 10.34 10.85 10.68 10.39 10.06 9.84 26 7-year 13.06 11.02 12.40 11.44 11.82 11.34 10.72 11.21 11.06 10.78 10.45 10.25 27 10-year 13.00 11.10 12.44 11.51 11.86 11.43 10.85 11.33 11.17 10.89 10.60 10.39 28 20-year 12.92 11.34 12.48 11.70 12.06 11.69 11.19 11.62 11.49 11.24 10.% 10.78 29 30-year 12.76 11.18 12.39 11.47 11.81 11.47 11.05 11.41 11.30 11.08 10.87 10.67 Composite14 30 Over 10 years (long-term) 12.23 10.84 11.99 11.35 11.78 11.42 10.96 11.35 11.23 11.00 10.76 10.58 State and local notes and bonds Moody's series15 31 Aaa 10.86 8.80 9.61 8.98 9.18 8.95 8.52 8.75 8.70 8.45 8.40 8.30 32 Baa 12.46 10.17 10.38 10.05 10.18 9.95 9.54 9.80 9.75 9.45 9.40 9.30 33 Bond Buyer series16 11.66 9.51 10.10 9.65 9.77 9.42 9.01 9.37 9.11 8.86 8.91 8.81 Corporate bonds Seasoned issues17 34 All industries 14.94 12.78 13.49 12.66 13.13 12.89 12.47 12.81 12.73 12.55 12.30 12.01 35 Aaa 13.79 12.04 12.71 12.13 12.56 12.23 11.72 12.15 12.03 11.77 11.50 11.27 36 Aa 14.41 12.42 13.31 12.49 12.91 12.69 12.30 12.63 12.59 12.41 12.11 11.82 37 A 15.43 13.10 13.74 12.80 13.36 13.14 12.70 13.03 12.93 12.79 12.57 12.24 38 Baa 16.11 13.55 14.19 13.23 13.69 13.51 13.15 13.44 13.39 13.24 13.03 12.69 39 A-rated, recently-offered utility bonds18 15.49 12.73 13.81 12.76 13.17 12.75 12.25 12.56 12.49 12.24 12.01 11.78 MEMO: Dividend/price ratio19 40 Preferred stocks 12.53 11.02 11.59 10.88 10.97 10.75 10.60 10.88 10.74 10.66 10.48 10.25 41 Common stocks 5.81 4.40 4.64 4.30 4.37 4.37 4.31 4.43 4.40 4.30 4.20 4.23 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-Vi-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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 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 95.68 95.09 95.85 94.85 99.11 104.73 103.92 104.66 107.00 2 Industrial 78.18 107.45 108.01 112.18 110.44 110.91 109.05 113.99 120.71 119.64 119.93 121.88 3 Transportation 60.41 89.36 85.63 86.88 86.82 87.37 88.00 94.88 101.76 98.30 96.47 99.66 4 Utility 39.75 47.00 46.44 47.47 49.02 49.93 50.58 51.95 53.44 53.91 55.51 57.32 5 Finance 71.99 95.34 89.28 91.59 92.94 95.28 95.29 101.34 109.58 107.59 109.39 115.31 6 Standard & Poor's Corporation (1941-43 = 10)' ... 119.71 160.41 160.50 166.11 164.82 166.27 164.48 171.61 180.88 179.42 180.62 180.94 7 American Stock Exchange2 (Aug. 31, 1973 = 100) 141.31 216.48 207.96 214.50 210.39 209.47 202.28 211.82 228.40 225.62 229.46 228.75 Volume of trading (thousands of shares) 8 New York Stock Exchange 64,617 85,418 91,084 93,108 91,676 83,692 89,032 121,545 115,489 102,591 94,387 106,827 9 American Stock Exchange 5,283 8,215 6,107 5,967 5,587 6,008 7,254 9,130 10,010 8,677 7,801 7,171 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 13,325 22,470 22,800 22,330 22,350 22,470 22,090 22,970 23,230 t t t t t 11 Margin stock 12,980 22,720 12 Convertible bonds 344 279 13 Subscription issues 1 1 Free credit balances at brokers4 14 Margin-account 5,735 6,620 7,015 6,690 6,580 6,699 7,015 6,770 6,680 6,780 15 Cash-account 8,390 8,430 10,215 8,315 8,650 8,420 10,215 9,725 9,840 10,155' 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 42.0 44.0 47.0 46.0 35.0 36.0 38.0 39.0 36.0 18 40-49 24.0 22.0 18.0 22.0 21.0 19.0 18.0 19.0 20.0 20.0 19.0 19.0 19 50-59 24.0 16.0 16.0 15.0 14.0 13.0 16.0 20.0 18.0 18.0 18.0 19.0 20 60-69 14.0 9.0 9.0 9.0 9.0 9.0 9.0 11.0 11.0 10.0 10.0 11.0 21 70-79 9.0 6.0 5.0 6.0 6.0 6.0 5.0 7.0 8.0 7.0 7.0 7.0 22 80 or more 8.0 6.0 6.0 6.0 6.0 6.0 6.0 8.0 8.0 7.0 7.0 8.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 35,598 58,329 75,840 72,350 71,914 73,904 75,840 79,600 81,830 83,729 82,990 87,120 Distribution by equity status (percent) 24 Net credit status 62.0 63.0 59.0 58.0 59.0 59.0 59.0 59.0 59.0 60.0 60.0 60.0 Debt status, equity of 25 60 percent or more 29.0 28.0 29.0 31.0 30.0 29.0 29.0 30.0 31.0 30.0 30.0 30.0 26 Less than 60 percent 9.0 9.0 11.0 11.0 11.0 12.0 11.0 10.0 10.0 10.0 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 65 50 28 Convertible bonds 50 60 50 50 50 29 Short sales 70 80 65 65 50 1. Effective July 1976, includes a new financial group, banks and insurance 5. Each customer's equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of 2. Beginning July 5, 1983, the American Stock Exchange rebased its index other collateral in the customer's margin account or deposits of cash (usually sales effectively cutting previous readings in half. proceeds) occur. 3. Beginning July 1983, under the revised Regulation T, margin credit at 7. Regulations G, T, and U of the Federal Reserve Board of Governors, broker-dealers includes credit extended against stocks, convertible bonds, stocks prescribed in accordance with the Securities Exchange Act of 1934, limit the acquired through exercise of subscription rights, corporate bonds, and govern- amount of credit to purchase and carry margin stocks that may be extended on ment securities. Separate reporting of data for margin stocks, convertible bonds, securities as collateral by prescribing a maximum loan value, which is a specified and subscription issues was discontinued in April 1984, and margin credit at percentage of the market value of the collateral at the time the credit is extended. broker-dealers became the total that is distributed by equity class and shown on Margin requirements are the difference between the market value (100 percent) lines 17-22. and the maximum loan value. The term "margin stocks" is defined in the 4. Free credit balances are in accounts with no unfulfilled commitments to the corresponding regulation. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • August 1985 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1984 1985 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Savings and loan associations 1 Assets 707,646 773,417 840,682 850,780 860,088 877,642 881,627 887,696 902,449 898,537 898,086 904,827 907,139 2 Mortgages 483,614 494,789 528,172 535,814 540,644 550,129 552,516 556,229 555,277 558,276 556,184 559,263 563,316 3 Cash and investment securities1 .... 85,438 104,274 109,752 108,456 108,820 112,350 112,023 114,879 125,358 119,673 119,724 119,713 114,768 4 Other 138,594 174,354 202,758 206,510 210,624 215,163 217,088 216,588 221,814 220,588 222,178 225,851 229,055 5 Liabilities and net worth 707,646 773,417 840,682 850,780 860,088 877,642 881,627 887,696 902,449 898,537 898,086 904,827 907,139 6 Savings capital 567,961 634,455 681,947 687,817 691,704 704,558 708,846 714,780 724,301 730,709 726,308 732,406 732,205 7 Borrowed money 97,850 92,127 108,417 110,238 114,747 121,329 119,305 117,775 126,169 114,806 116,879 119,461 118,484 8 FHLBB 63,861 52,626 56,558 57,115 60,178 63,627 63,412 63,383 64,207 63,152 63,452 63,187 63,985 9 Other 33,989 39,501 51,859 53,123 54,569 57,702 55,893 54,392 61,962 51,654 53,427 56,274 54,499 10 Loans in process2 9,934 21,117 25,726 26,122 26,773 27,141 26,754 26,683 26,959 26,546 26,636 27,004 27,334 11 Other 15,602 15,968 17,586 19,970 20,599 18,050 19,894 21,302 17,215 18,358 19,857 17,471 20,486 12 Net worth3 26,233 30,867 32,732 32,755 33,038 33,705 33,582 33,839 34,764 34,664 35,042 35,489 35,964 13 MEMO: Mortgage loan commitments outstanding? 18,054 32,996 44,878 43,878 41,182 40,089 38,530 37,856 34,841 33,305 34,217 35,889 35,766 Mutual savings banks5 14 Assets 174,197 193,535 198,864 199,128 200,722 201,445 203,274 204,499 203,898 204,859 206,175 207,808 Loans 15 Mortgage 94,091 97,356 99,433 100,091 101,211 101,621 102,704 102,953 102,895 103,393 103,654 103,667 16 Other 16,957 19,129 23,198 23,213 24,068 24,535 24,486 24,884 24,954 25,747 2266,,445566 2277,,114433 Securities 17 U.S. government6 9,743 15,360 15,448 15,457 15,019 14,965 15,295 15,034 14,643 14,628 14,917 15,079 18 State and local government 2,470 2,177 2,037 2,037 2,055 2,052 2,080 2,077 2,077 2,067 2,069 2,092 19 Corporate and other7 36,161 43,580 42,479 42,682 42,632 42,605 43,003 43,361 42,962 43,351 43,063 43,500 20 Cash 6,919 6,263 5,452 4,896 4,981 4,795 4,605 4,795 4,954 4,140 4,423 4,707 21 Other assets 7,855 9,670 10,817 10,752 10,756 10,872 11,101 11,395 11,413 11,533 11,593 11,620 22 Liabilities 174,197 193,535 198,864 199,128 200,722 201,445 203,274 204,499 203,898 204,859 206,175 207,808 N• a. 23 Deposits 155,196 172,665 174,972 174,823 176,085 177,345 178,624 180,073 180,616 181,062 181,849 183,030 24 Regular8 152,777 170,135 171,858 171,740 172,990 174,296 175,727 177,130 177,418 177,954 178,791 179,664 25 Ordinary savings 46,862 38,554 36,322 35,511 34,787 34,564 34,221 34,009 33,739 33,413 33,413 33,607 26 Time 96,369 95,129 97,168 98,410 101,270 102,934 104,151 104,849 104,732 104,098 103,536 103,688 2.7 Other 2,419 2,530 3,114 3,083 3,095 3,049 2,897 2,943 3,198 3,108 3,058 3,346 28 Other liabilities 8,336 10,154 12,999 13,269 13,604 12,979 13,853 13,453 12,504 12,931 13,387 13,862 29 General reserve accounts 9,235 10,368 10,404 10,495 10,498 10,488 10,459 10,535 10,510 10,619 10,670 10,680 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. Life insurance companies 31 Assets 588,163 654,948 679,449 684,573 694,082 699,996 705,827 712,271 720,807 730,120 734,920 741,442 Securities 32 Government 36,499 50,752 53,970 54,688 56,263 57,552 59,825 62,678 64,683 65,367 67,111 66,641 33 United States10 16,529 28,636 32,066 32,654 33,886 35,586 37,594 40,288 41,970 42,183 43,929 43,317 34 State and local 8,664 9,986 9,213 9,236 9,357 9,221 9,344 9,385 9,757 9,895 9,956 9,770 35 Foreign" 11,306 12,130 12,691 12,798 13,020 12,745 12,887 13,005 12,956 13,289 13,226 13,554 36 Business 287,126 322,854 338,508 341,802 348,614 350,512 352,059 354,815 354,902 364,617 367,411 370,582 n .a. 37 Bonds 231,406 257,986 276,902 281,113 283,673 285,543 287,607 291,021 290,731 297,666 298,381 302,072 38 Stocks 55,720 64,868 61,606 60,689 64,941 64,969 64,452 63,794 64,171 66,951 69,030 68,510 39 Mortgages 141,989 150,999 153,845 154,299 155,438 155,802 156,064 156,691 157,283 157,583 158,052 158,956 40 Real estate 20,264 22,234 23,792 24,019 24,117 24,685 24,947 25,467 25,985 26,343 26,567 26,911 41 Policy loans 52,961 54,063 54,430 54,441 54,517 54,551 54,574 54,571 54,610 54,442 54,523 54,466 42 Other assets 48,571 54,046 54,904 55,324 55,133 56,894 58,358 58,049 63,344 61,768 61,256 63,886 Credit unions12 43 Total assets/liabilities and capital .... 69,585 81,961 90,276 90,145 90,503 91,651 91,619 92,521 93,036 94,646 96,183 98,646 101,268 44 Federal 45,493 54,482 61,316 61,163 61,500 62,107 61,935 62,690 63,205 64,505 65,989 67,799 68,903 45 State 24,092 27,479 28,960 28,982 29,003 29,544 29,684 29,831 29,831 30,141 30,194 30,847 32,365 46 Loans outstanding 43,232 50,083 55,915 57,286 58,802 59,874 60,483 62,170 62,561 62,662 62,393 62,936 64,341 47 Federal 27,948 32,930 37,547 38,490 39,578 40,310 40,727 41,762 42,337 42,220 42,283 42,804 43,414 48 State 15,284 17,153 18,368 18,796 19,224 19,564 19,756 20,408 20,224 20,442 20,110 20,132 20,927 49 Savings 62,990 74,739 82,578 82,402 82,135 83,172 83,129 84,000 84,348 86,047 86,048 88,560 91,275 50 Federal (shares) 41,352 49,889 56,261 56,278 56,205 56,734 56,655 57,302 57,539 58,820 59,914 61,758 62,867 51 State (shares and deposits) 21,638 24,850 26,317 26,124 25,930 26,438 26,474 26,698 26,809 27,227 26,134 26,802 28,408 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37 Continued 1984 1985 AAccccoouunntt 11998822 11998833 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. FSLIC-insured federal savings banks 52 Assets 6,859 64,969 81,310 83,989 87,209 82,174 87,743 94,536 98,559 98,747 106,657 109,720 110,501 53 Mortgages 3,353 38,698 48,084 49,996 52,039 48,841 51,554 55,861 57,429 57,667 60,938 62,608 63,486 54 Cash and investment securities' 10,436 13,071 13,184 13,331 12,867 13,615 14,826 16,001 15,378 17,511 18,237 17,958 55 Other 15,835 20,155 20,809 21,839 20,466 22,574 23,849 25,129 25,702 28,208 28,875 29,057 56 Liabilities and net worth 6,859 64,969 81,310 83,989 87,209 82,174 87,743 94,536 98,559 98,747 106,657 109,720 110,501 57 Savings and capital 5,877 53,227 64,364 66,227 68,443 65,079 70,080 76,167 79,572 80,091 85,632 88,001 88,158 58 Borrowed money 7,477 11,489 12,060 12,863 11,828 11,935 11,937 12,798 12,372 14,079 14,860 15,185 59 FHLBB 4,640 6,538 6,897 7,654 6,600 6,867 7,041 7,515 7,361 8,023 8,491 8,837 60 Other 2,837 4,951 5,163 5,209 5,228 5,068 4,8% 5,283 5,011 6,056 6,369 6,348 61 Other 1,157 1,646 1,807 1,912 1,610 1,896 2,259 1,903 1,982 2,356 2,174 2,435 62 Net worth3 3,108 3,811 3,895 3,991 3,657 3,832 4,173 4,286 4,302 4,590 4,685 4,723 MEMO 63 Loans in process2 1,264 1,839 1,901 1,895 1,505 1,457 1,689 1,738 1,685 1,747 1,919 2,005 64 Mortgage loan commitments outstanding4 2,151 3,583 3,988 3,860 2,970 2,925 3,298 3,234 3,510 3,646 3,752 3,952 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 Nonfinancial Statistics • August 1985 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal FFiissccaall Type of account or operation year year yyeeaarr 1983 1984 1985 1982 1983 11998844 HI H2 HI Mar. Apr. May U.S. budget 1 Receipts' 617,766 600,562 666,457 306,331 306,584 341,808 49,606 94,593 39,794 2 Outlays' 728,375 795,917 841,800 3%,477 406,849 420,700 78,067 82,228 80,245 3 Surplus, or deficit (-) -110,609 -195,355 -175,343 -90,146 -100,265 -78,892 -28,461 12,365 -40,451 4 Trust funds 5,456 23,056 30,565 22,680 7,745 18,080 -1,682 5.182 6,699 5 Federal funds2 3 -116,065 -218,410 -205,908 -112,822 -108,005 -96,971 -26,780 7.183 -47,149 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays -14,142 -10,404 -7,277 -5,418 -3,199 -2,813 -l,134r -1,108 -1,192 7 Other3 4 -3,190 -1,953 -2,719 -528 -1,206 -838 91' 128 -354 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 -29,504' 11,386 -41,997 Source of financing 9 Borrowing from the public 134,993 212,425 170,817 102,538 84,020 80,592 13,159 17,036 16,333 10 Cash and monetary assets (decrease, or increase (-))4 -11,911 -9,889 5,636 -9,664 -16,294 -3,127 3,212' -27,927 -29,808 11 Other5 4,858 5,176 8,885 3,222 4,358 7,418 13,133' -495 -4,143 MEMO 12 Treasury operating balance (level, end of period) 29,164 37,057 22,345 27,997 11,817 13,567 13,868 40,022 11,138 13 Federal Reserve Banks 10,975 16,557 3,791 19,442 3,661 4,397 3,063 19,305 1,933 14 Tax and loan accounts 18,189 20,500 18,553 8,764 8,157 9,170 10,805 20,717 9,204 1. Effective Feb. 8, 1982, supplemental medical insurance premiums and 5. Includes accrued interest payable to the public; allocations of special voluntary hospital insurance premiums, previously included in other insurance drawing rights; deposit funds; miscellaneous liability (including checks outstandreceipts, have been reclassified as offsetting receipts in the health function. ing) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S. 2. Half-year figures are calculated as a residual (total surplus/deficit less trust currency valuation adjustment; net gain/loss for IMF valuation adjustment; and fund surplus/deficit). profit on the sale of gold. 3. Other off-budget includes Postal Service Fund; Rural Electrification and Telephone Revolving Fund; Rural Telephone Bank; and petroleum acquisition SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. and transportation and strategic petroleum reserve effective November 1981. Government" Treasury Bulletin, and the Budget of the U.S. Government, Fiscal 4. Includes U.S. Treasury operating cash accounts; SDRs; gold tranche Year 1985. drawing rights; loans to International Monetary Fund; and other cash and monetary assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1982 1983 1984 1985 111999888333 111999888444 H2 HI H2 HI Mar. Apr. May RECEIPTS 1 AU sources 600,563 666,457 286,337 306,331 305,122 341,808 49,606 94,593 39,794 288,938 295,955 145,676 144,551 147,663 144,691 15,254 51,602 3,611 3 Withheld 266,010 279,345 131,567 135,531 133,768 140,657 23,952 26,343 27,640 4 Presidential Election Campaign Fund ... 36 35 5 30 6 29 8 9 88 83,586 81,346 20,041 63,014 20,703 61,463 3,136 43,235 11,,994455 6 Refunds 60,692 64,771 5,938 54,024 6,815 57,458 11,842 17,986 25,982 Corporation income taxes 7 Gross receipts 61,780 74,179 25,660 33,522 31,064 40,328 1100,,330044 1111,,226655 22,,220055 8 Refunds 2244,,775588 17,286 11,467 13,809 8,921 10,045 1,888 2,409 975 9 Social insurance taxes and contributions, net 209,001 241,902 94,277 110,520 100,832 131,372 20,551 28,032 2288,,442233 10 Payroll employment taxes and contributions1 179,010 203,476 85,064 90,912 88,388 106,436 1199,,004455 1188,,882222 1199,,220044 11 Self-employment taxes and contributions2 6,756 8,709 177 6,427 339988 7,667 661100 55,,775577 559900 12 Unemployment insurance 18,799 25,138 6,856 10,984 8,714 14,942 515 3,062 8,192 13 Other net receipts3 4,436 4,580 2,180 2,197 2,290 2,329 380 391 437 35,300 37,361 16,555 16,904 19,586 18,304 2,739 2,700 3,235 15 Customs deposits 8,655 11,370 4,299 4,010 5,079 5,576 998 939 946 16 Estate and gift taxes 6,053 6,010 3,444 2,883 3,050 3,102 430 671 566 17 Miscellaneous receipts4 15,594 16,965 7,890 7,751 7,811 8,481 1,218 1,793 1,783 OUTLAYS 18 All types 795,917 841,800 390,847 396,477 406,849 420,700 78,067 82,228 80,245 19 National defense 210,461 227,405 100,419 105,072 108,967 114,639 21,782 20,239 22,198 20 International affairs 8,927 13,313 4,406 4,705 6,117 5,426 1,416 946 1,201 21 General science, space, and technology ... 7,777 8,271 3,903 3,486 4,216 3,981 740 743 722 22 Energy 4,035 2,464 2,058 2,073 1,533 1,080 207 355 408 23 Natural resources and environment 12,676 12,677 6,941 5,892 6,933 5,463 929 1,006 1,016 24 Agriculture 22,173 12,215 13,259 10,154 5,278 7,129 1,732 2,822 903 25 Commerce and housing credit 4,721 5,198 2,244 2,164 2,648 2,572 75 1,128 -187 26 Transportation 21,231 24,705 10,686 9,918 13,323 10,616 1,583 2,045 2,124 27 Community and regional development 7,302 7,803 4,187 3,124 4,327 3,154 538 683 508 28 Education, training, employment, social services 25,726 26,616 12,186 12,801 1133,,224466 1133,,444455 22,,223333 22,,334444 22,,444488 29 Health 28,655 30,435 39,072 41,206 42,150 15,748 2,685 2,909 3,016 30 Social security and medicare 223,311 235,764 133,779 143,001 21,031 21,355 21,378 31 Income security 106,211J 96,714 135,579 65,212 11,530 13,347 10,740 32 Veterans benefits and services 24,845 25,640 13,240 11,334 13,621 12,849 2,296 2,293 3,207 33 Administration of justice 5,014 5,616 2,373 2,522 2,628 2,807 471 572 492 34 General government 4,991 4,836 2,323 2,434 2,479 2,462 343 80 848 35 General-purpose fiscal assistance 6,287 6,577 3,153 3,124 3,290 2,943 75 1,258 91 36 Net interest® 89,774 111,007 44,948 42,358 47,674 53,729 10,517 10,858 11,536 37 Undistributed offsetting receipts7 -21,424 -15,454 -8,332 -8,887 -7,262 -7,333 -2,118 -2,754 -2,403 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 Financial Statistics • August 1985 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1983 1984 1985 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 1,249.3 1,324.3 1,381.9 1,415.3 1,468.3 1,517.2 1,576.7 1,667.4 1,715.1 2 Public debt securities 1,244.5 1,319.6 1,377.2 1,410.7 1,463.7 1,512.7 1,572.3 1,663.0 1,710.7 3 Held by public 1,043.3 1,090.3 1,138.2 1,174.4 1,223.9 1,255.1 1,309.2 1,373.4 1,415.2 4 Held by agencies 201.2 229.3 239.0 236.3 239.8 257.6 263.1" 289.6 295.5 5 Agency securities 4.8 4.7 4.7 4.6 4.6 4.5 4.5 4.5 4.4 6 Held by public 3.7 3.6 3.6 3.5 3.5 3.4 3.4 3.4 3.3 7 Held by agencies 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 8 Debt subject to statutory limit 1,245.3 1,320.4 1,378.0 1,411.4 1,464.5 1,513.4 1,573.0 1,663.7 1,711.4 9 Public debt securities 1,243.9 1,319.0 1,376.6 1,410.1 1,463.1 1,512.1 1,571.7 1,662.4 1,710.1 10 Other debt1 1.4 1.4 1.3 1.3 1.3 1.3 1.3 1.3 1.3 11 MEMO: Statutory debt limit 1,290.2 1,389.0 1,389.0 1,490.0 1,490.0 1,520.0 1,573.0 1,823.8 1,823.8 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 1985 TTyyppee aanndd hhoollddeerr 11998800 11998811 11998822 11998833 Q2 Q3 Q4 Ql 1 Total gross public debt 930.2 1,028.7 1,197.1 1,410.7 1,512.7 1,572.3 1,663.0 1,710.7 By type 2 Interest-bearing debt 928.9 1,027.3 1,195.5 1,400.9 1,501.1 1,559.6 1,660.6 1,695.2 3 Marketable 623.2 720.3 881.5 1,050.9 1,126.6 1,176.6 1,247.4 1,271.7 4 Bills 216.1 245.0 311.8 343.8 343.3 356.8 374.4 379.5 5 Notes 321.6 375.3 465.0 573.4 632.1 661.7 705.1 713.8 6 Bonds 85.4 99.9 104.6 133.7 151.2 158.1 167.9 178.4 7 Nonmarketable1 305.7 307.0 314.0 350.0 374.5 383.0 413.2 423.6 8 State and local government series 23.8 23.0 25.7 36.7 39.9 41.4 44.4 47.7 9 Foreign issues2 24.0 19.0 14.7 10.4 8.8 8.8 9.1 9.1 10 Government 17.6 14.9 13.0 10.4 8.8 8.8 9.1 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 72.3 73.1 73.3 74.4 13 Government account series3 185.1 196.7 205.4 231.9 253.2 259.5 286.2 292.2 14 Non-interest-bearing debt 1.3 1.4 1.6 9.8 11.6 12.7 2.3 15.5 By holder4 15 U.S. government agencies and trust funds 192.5 203.3 209.4 236.3 257.6 263.1 289.6 295.5 16 Federal Reserve Banks 121.3 131.0 139.3 151.9 152.9 155.0 160.9 161.0 17 Private investors 616.4 694.5 848.4 1,022.6 1,102.2 1,154.1 1,212.5 1,254.1 18 Commercial banks 112.1 111.4 131.4 188.8 182.3 183.0 183.4' 195.0 19 Money market funds 3.5 21.5 42.6 22.8 14.9 13.6 25.9' 26.6 20 Insurance companies 24.0 29.0 39.1 56.7 61.6 73.2' 82.3' 84.0 21 Other companies 19.3 17.9 24.5 39.7 45.3 47.7 51.1' 51.9 22 State and local governments 87.9 104.3 127.8 155.1 165.0 n.a. n.a. n.a. Individuals 2.3 Savings bonds 72.5 68.1 68.3 71.5 72.9 73.7 74.5 75.4 74 Other securities 44.6 42.7 48.2 61.9 69.3 68.7' 69.3' 69.9 25 Foreign and international5 129.7 136.6 149.5 166.3 171.5 175.5 192.8' 186.3 26 Other miscellaneous investors6 122.8 163.0 217.0 259.8 319.4 n.a. 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 1985 1985 week ending Wednesday IItteemm 11998822 11998833 11998844 Mar/ Apr/ May Apr. 24 May 1 May 8 May 15 May 22 May 29 Immediate delivery1 1 U.S. government securities 32,260 42,135 52,786 73,319 72,555 82,733 75,757 66,144 74,166 100,659 80,298 71,596 By maturity ? Bills 18,392 22,393 26,040 38,090 35,943 33,913 37,709 3300,,884499 31,972 41,396 30,498 2277,,119999 3 Other within 1 year 810 708 1,305 1,727 1,969 1,923 1,736 2,165 1,870 2,292 2,172 1,296 4 1-5 years 6,271 8,758 11,734 16,143 17,018 23,002 18,359 17,286 21,992 24,554 25,178 23,237 5-10 years 3,555 5,279 7,607 10,479 10,901 12,995 10,965 9,402 11,329 15,655 10,792 11,429 6 Over 10 years 3,232 4,997 6,100 6,882 6,725 10,901 6,988 6,443 7,003 16,764 11,659 8,435 By type of customer 7 U.S. government securities dealers 1,770 2,257 2,920 3,984 3,894 3,046 2,592 3,285 3,325 3,530 2,595 2,357 8 U.S. government securities brokers 15,794 21,045 25,584 36,408 34,712 39,783 37,141 3322,,225566 34,961 49,331 38,351 34,885 9 All others2 14,697 18,832 24,282 32,927 33,949 39,904 36,023 30,603 35,880 47,798 39,353 34,354 10 Federal agency securities 4,140 5,576 7,846 8,756 10,177 10,809 10,003 7,929 9,263 14,535 11,127 7,602 11 Certificates of deposit 5,000 4,333 4,947 3,730 4,355 4,666 5,200 3,701 5,022 4,727 4,695 4,130 12 Bankers acceptances 2,502 2,642 3,244 2,925 3,499 3,898 3,994 3,080 3,796 3,420 3,993 4,231 13 Commercial paper 7,595 8,036 10,018 10,205 12,019 11,274 12,248 12,563 11,795 10,438 10,832 11,020 Futures transactions3 14 Treasury bills 5,055 6,655 6,947 8,065 6,659 4,528 7,759r 5,276 4,709 5,315 3,770 4,050 15 Treasury coupons 1,487 2,501 4,503 5,097 5,506 5,812 6,277 5,610 5,709 6,441 5,906 4,627 16 Federal agency securities 261 265 262 112 120 147 154 60 % 148 311 121 Forward transactions4 17 U.S. government securities 835 1,493 1,364 1,329 1,016 1,685 1,673 869 2,753 1,142 1,755 1,399 18 Federal agency securities 978 1,646 2,843 2,148 2,632 3,237 2,330 1,743 3,059 4,457 3,820 2,032 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 Nonfinancial Statistics • August 1985 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing Averages of daily figures, in millions of dollars 1985 1985 week ending Wednesday IItteemm Mar. Apr. May May 1 May 8 May 15 May 22 May 29 Positions Net immediate1 1 U.S. government securities 13,663 10,701 5,538 11,249" 8,531" 5,493 6,767 7,892 10,426 2,766 -56 2 Bills 7,297 8,020 5,500 14,027" 11,538' 8,016 9,513 11,219 9,958 6,546 3,900 3 Other within 1 year 972 394 63 1,316 1,203 1,082 1,545 1,223 1,198 999 913 4 1-5 years 3,256 1,778 2,159 449 2,235' 3,797 4,227 4,351 4,969 1,311 3,802 5-10 years -318 -78 -1,119 -2,546 -4,468 -5,687 -5,892 -5,283 -5,391 -4,650 -7,165 6 Over 10 years 2,026 528 -1,174 -2,240 -2,303 -2,075 -2,969 -3,980 -669 -1,809 -1,858 7 Federal agency securities 4,145 7,232 15,294 19,337 18,049' 19,814 18,029 19,243 19,515 19,634 20,720 8 Certificates of deposit 5,532 5,839 7,369 8,007" 8,652 9,356 9,165 9,605 9,359 9,103 9,199 9 Bankers acceptances 2,832 3,332 3,874 3,563 3,949 4,469 4,264 4,343 3,979 4,392 4,946 10 Commercial paper 3,317 3,159 3,788 4,646 4,959' 5,469 6,072 6,071 5,072 5,039 5,204 Futures positions 11 Treasury bills -2,507 -4,125 -4,525 1,220" -2,877 -5,930 -240 -2,722 -6,703 -7,158 -7,887 12 Treasury coupons -2,303 -1,032 1,794 5,573 6,326' 6,589 5,860 7,422 7,541 6,410 5,284 13 Federal agency securities -224 171 233 -101 38 -99 196 150 4 -194 -421 Forward positions 14 U.S. government securities -788 -1,936 -1,643 -1,320 -814 -346 -84 -662 -1,242 -216 813 15 Federal agency securities -1,432 -3,561 -9,205 -8,252' -7,881 -7,805 -7,542 -7,543 -7,909 -7,945 -7,641 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 26,754 29,099 44,078 60,818 62,325 64,824 66,685 59,143 65,564 66,964 66,126 17 Term agreements 48,247 52,493 68,357 75,298 77,440 74,562 78,158 76,167 73,944 75,172 72,491 Repurchase agreements4 18 Overnight and continuing 49,695 57,946 75,717 96,019 94,055 97,989 96,865 94,731 101,773 98,306 97,482 19 Term agreements 43,410 44,410 57,047 62,890 65,621 67,542 68,432 68,813 68,783 66,977 65,962 1. Immediate positions are net amounts (in terms of par values) of securities 2. Figures cover financing involving U.S. government and federal agency owned by nonbank dealer firms and dealer departments of commercial banks on a securities, negotiable CDs, bankers acceptances, and commercial paper. commitment, that is, trade-date basis, including any such securities that have 3. Includes all reverse repurchase agreements, including those that have been been sold under agreements to repurchase (RPs). The maturities of some arranged to make delivery on short sales and those for which the securities repurchase agreements are sufficiently long, however, to suggest that the securi- obtained have been used as collateral on borrowings, that is, matched agreements. ties involved are not available for trading purposes. Prior to 1984, securities 4. Includes both repurchase agreements undertaken to finance positions and owned, and hence dealer positions, do not include all securities acquired under "matched book" repurchase agreements. reverse RPs. After January 1984, immediate positions include reverses to maturi- NOTE. Data for positions are averages of daily figures, in terms of par value, ty, which are securities that were sold after having been obtained under reverse based on the number of trading days in the period. Positions are shown net and are repurchase agreements that mature on the same day as the securities. Before on a commitment basis. Data for financing are based on Wednesday figures, in 1981, data for immediate positions include forward positions. terms of actual money borrowed or lent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1984 1985 AAggeennccyy 11998811 11998822 11998833 Nov. Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 221,946 237,085 239,716 270,314 271,564 270,965 271,479 275,093 275,209 2 Federal agencies 31,806 33,055 33,940 35,078 35,145 35,235 35,360 35,140 35,182 3 Defense Department1 484 354 243 146 142 133 122 116 107 4 Export-Import Bank2'3 13,339 14,218 14,853 15,721 15,882 15,882 15,881 15,709 15,707 5 Federal Housing Administration4 413 288 194 138 133 132 129 127 123 6 Government National Mortgage Association participation certificates' 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 15,520 15,435 15,535 15,675 15,635 15,776 9 United States Railway Association6 202 194 111 51 51 51 51 51 74 10 Federally sponsored agencies7 190,140 204,030 205,776 235,236 236,419 235,730 236,120' 239,953 240,027 11 Federal Home Loan Banks 54,131 55,967 48,930 66,230 65,085 64,705 64,706 65,700 65,257 12 Federal Home Loan Mortgage Corporation 5,480 4,524 6,793 10,299 10,270 10,195 11,237 11,882 12,004 13 Federal National Mortgage Association8 58,749 70,052 74,594 81,119 83,720 84,612 84,701 86,297 86,913 14 Farm Credit Banks 71,359 71,896 72,409 72,267 71,255 70,642 70,012 70,161 69,882 15 Student Loan Marketing Association 421 1,591 3,050 5,321 5,369 5,576 5,464' 5,913 5,971 MEMO 16 Federal Financing Bank debt9 110,698 126,424 135,791 145,174 145,217 146,034 146,611 147,507 148,723 Lending to federal and federally sponsored 17 Export-Import Bank3 12,741 14,177 14,789 15,690 15,852 15,852 15,852 15,690 15,690 18 Postal Service6 1,288 1,221 1,154 1,087 1,087 1,087 1,087 1,087 1,087 19 Student Loan Marketing Association 5,400 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 20 Tennessee Valley Authority 11,390 12,640 13,245 13,795 13,710 13,810 13,950 13,910 14,051 21 United States Railway Association6 202 194 111 51 51 51 51 51 74 Other Lending10 22 Farmers Home Administration 48,821 53,261 55,266 58,801 58,971 59,066 59,041 5599,,775566 6600,,664411 23 Rural Electrification Administration 13,516 17,157 19,766 20,889 20,693 20,653 20,804 20,730 20,894 24 Other 12,740 22,774 26,460 29,861 29,853 30,515 30,826 31,283 31,286 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 Financial Statistics • August 1985 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1984 1985 Type of issue or issuer, 11998822 11998833 11998844 or use Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar. I All issues, new and refunding1 79,138 86,421 106,641 11,726 7,967 12,558 13,548' 17,713 6,275 8,109 9,473 Type of issue 2 3 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 26,48 1 5 6 ' 1,781 1 1,43 4 3 3,770 1 2,611 3 2,185 2 1,80 7 4 3,46 0 3 2,816 5 4 Revenue 58,044 64,855 80,156 9,945 6,534 8,788 10,937 15,528 4,471 4,646 6,657 5 U.S. government loans2 461 253 17 1 1 3 1 0 3 0 0 Type of issuer 6 State 8,438 7,140 9,129 2,157 596 1,110 405 725 367 1,542 252 7 Special district and statutory authority 45,060 51,297 63,550 7,321 5,202 7,087 7,265 11,894 3,847 4,282 5,581 8 Municipalities, counties, townships, school districts 25,640 27,984 33,962 2,248 2,169 4,361 5,878 5,094' 2,061 2,285 3,640 9 Issues for new capital, total 74,804 72,441 94,050 10,749 7,454 11,105 12,352 16,354 4,904 5,580 8,032 Use of proceeds 10 Education 6,482 8,099 7,553 627 333 755 999 671 661 930 1,015 11 Transportation 6,256 4,387 7,552 423 590 1,018 2,151 1,339 341 472 151 12 Utilities and conservation 14,259 13,588 17,844 1,015 2,013 2,784 534 4,133 1,315 912 1,572 13 Social welfare 26,635 26,910 29,928 4,823 3,018 3,500 3,701 3,598 1,567 1,847 3,017 14 Industrial aid 8,349 7,821 15,415 1,055 679 1,522 3,866 5,572 376 185 515 15 Other purposes 12,822 11,637 15,758 2,806 821 1,526 1,101 1,041 644 1,234 1,762 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues1 84,638 120,074' 132,311' 7,758 12,350 11,931 6,940 7,294 6,743 14,005 11,449 2 Bonds2 54,076 68,495' 109,683' 6,225 10,403 9,524 5,918 5,739 4,027 11,641 8,837 Type of offering 3 Public 44,278 47,369 73,357 6,225 10,403 9,524 5,918 5,739 4,027 11,641 8,837 4 Private placement 9,798 21,126 36,326 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 12,822 16,851' 24,607' 1,614 2,989 1,447 1,741 1,326 1,476 5,660 922 6 Commercial and miscellaneous 5,442 7,540' 13,726' 576 988 1,198 555 144 469 974 1,317 7 Transportation 1,491 3,833' 4,694' 200 161 19 110 297 30 130 334 8 Public utility 12,327 9,125' 10,679' 758 1,150 555 575 309 80 500 860 9 Communication 2,390 3,642' 2,997' 0 240 1,557 169 375 353 300 0 10 Real estate and financial 19,604 27,502' 52,980' 3,076 4,875 4,749 2,768 3,288 1,619 4,077 5,405 11 Stocks3 30,562 51,579 22,628 1,533 1,947 2,407 1,022 1,555 2,716 2,364 2,612 Type 12 Preferred 5,113 7,213 4,118 155 555 655 91 170 218 311 208 13 Common 25,449 44,366 18,510 1,378 1,392 1,752 931 1,385 2,498 2,053 2,404 Industry group 14 Manufacturing 5,649 14,135 4,054 212 712 227 137 172 229 224 283 15 Commercial and miscellaneous 7,770 13,112 6,277 378 489 1,025 112 234 760 472 978 16 Transportation 709 2,729 589 87 16 66 71 0 153 32 419 17 Public utility 7,517 5,001 1,624 92 146 150 66 225 283 197 157 18 Communication 2,227 1,822 419 9 69 3 26 271 101 15 5 19 Real estate and financial 6,690 14,780 9,665 755 515 936 610 653 1,190 1,424 770 1. Figures, which represent gross proceeds of issues maturing in more than one 2. Monthly data 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'' Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. INVESTMENT COMPANIES1 1 Sales of own shares2 84,345 107,485 8,156 9,517 9,458 10,006 19,152 14,786 14,582 18,051 2 Redemptions of own shares3 57,100 77,033 6,185 6,766 6,343 8,948 9,183 8,005 9,412 13,500 3 Net sales 27,245 30,452 1,971 2,751 3,115 1,058 9,969 6,781 5,170 4,551 4 Assets4 113,599 137,126 129,657 131,539 132,709 137,126 151,534 154,707 157,065 164,520 5 Cash position5 8,343 11,978 13,221 11,417 11,518 11,978 13,114 14,567 13,082 15,863 6 Other 105,256 125,148 116,436 120,122 121,191 125,148 138,420 140,140 143,983 148,657 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 1985 AAccccoouunntt 11998822 11998833 11998844 Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql' 1 Corporate profits with inventory valuation and capital consumption adjustment 159.1 225.2 285.7 216.7 245.0 260.0 277.4 291.1 282.8 291.6 292.3 2 Profits before tax 165.5 203.2 235.7 198.2 227.4 225.5 243.3 246.0 224.8 228.7 222.3 3 Profits tax liability 60.7 75.8 89.8 74.8 84.7 84.5 92.7 95.8 83.1 87.7 85.3 4 Profits after tax 104.8 127.4 145.9 123.4 142.6 141.1 150.6 150.2 141.7 141.0 137.0 5 Dividends 69.2 72.9 80.5 71.7 73.3 75.4 77.7 79.9 81.3 83.1 84.5 6 Undistributed profits 35.6 54.5 65.3 51.7 69.3 65.6 72.9 70.2 60.3 58.0 52.5 7 Inventory valuation -9.5 -11.2 -5.6 -12.1 -19.3 -9.2 -13.5 -7.3 -.2 -1.6 .9 8 Capital consumption adjustment 3.1 33.2 55.7 30.6 36.9 43.6 47.6 52.3 58.3 64.5 69.1 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • August 1985 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities Billions of dollars, except for ratio 1983 1984 AAccccoouunntt 11997788 11997799 11998800 11998811 11998822 Q4 Ql Q2 Q3 Q4 1 Current assets 1,043.7 1,214.8 1,327.0 1,418.4 1,432.7 1,557.3 1,600.6 1,630.6 1,667.2 1,680.9 2 Cash 105.5 118.0 126.9 135.5 147.0 165.8 159.3 155.0 150.6 161.6 3 U.S. government securities 17.2 16.7 18.7 17.6 22.8 30.6 35.1 36.7 32.3 36.4 4 Notes and accounts receivable 388.0 459.0 506.8 532.0 519.2 577.8 596.9 612.4 628.1 617.7 5 Inventories 431.8 505.1 542.8 583.7 578.6 599.3 623.1 633.3 662.2 659.0 6 Other 101.1 116.0 131.8 149.5 165.2 183.7 186.3 193.2 194.0 206.3 7 Current liabilities 669.5 807.3 889.3 970.0 976.8 1,043.0 1,079.0 1,111.9 1,143.3 1,149.6 8 Notes and accounts payable 383.0 460.8 513.6 546.3 543.0 577.9 584.1 604.6 624.8 627.7 9 Other 286.5 346.5 375.7 423.7 433.8 465.2 495.0 507.3 518.5 521.9 10 Net working capital 374.3 407.5 437.8 448.4 455.9 514.3 521.6 518.6 523.9 531.4 11 MEMO: Current ratio1 1.559 1.505 1.492 1.462 1.467 1.493 1.483 1.466 1.458 1.462 1. Ratio of total current assets to total current liabilities. Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. NOTE. For a description of this series, see "Working Capital of Nonfinancial 20551. Corporations" in the July 1978 BULLETIN, pp. 533-37. SOURCE. Federal Trade Commission and Bureau of the Census. All data in this table reflect the most current benchmarks. Complete data are available upon request from the Flow of Funds Section, Division of Research and 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1983 1984 1985 IInndduussttrryy11 11998833 11998844 1199885511 Q4 Ql Q2 Q3 Q4 Ql Q21 Q31 1 Total nonfarm business 304.78 353.74 386.10 325.45 337.48 348.34 361.12 367.21 371.16 385.31 392.61 Manufacturing 2 Durable goods industries 53.08 65.95 75.24 57.56 61.26 63.12 68.31 71.13 69.87 75.72 77.83 3 Nondurable goods industries 63.12 72.43 80.74 66.19 68.71 72.21 73.72 75.07 75.78 79.83 82.96 Nonmanufacturing 4 Mining 15.19 16.88 16.06 16.27 17.61 16.01 16.96 16.93 15.66 16.47 16.19 Transportation 5 Railroad 4.88 6.77 7.35 6.04 5.76 7.46 7.47 6.40 6.02 7.44 8.30 6 Air 4.36 3.55 4.09 3.75 3.23 3.52 3.73 3.73 4.20 3.60 4.54 7 Other 4.72 6.17 6.21 5.48 5.96 6.06 6.50 6.16 6.01 6.12 6.47 Public utilities 8 Electric 37.27 37.09 35.23 37.79 38.36 37.82 36.82 35.37 36.65 35.35 33.93 9 Gas and other 7.70 10.30 12.51 8.07 8.77 10.07 11.07 11.31 11.81 12.36 12.83 10 Commercial and other2 114.45 134.39 148.68 124.30 127.83 132.07 136.55 141.10 145.17 148.42 149.56 •Trade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade; finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A37 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1983 1984 AAccccoouunntt 11997788 11997799 11998800 11998811 11998822 Q3 Q4 Ql Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 52.6 65.7 73.6 85.5 89.5 92.3 92.8 96.9 99.6 103.4 2 Business 63.3 70.3 72.3 80.6 81.0 86.8 95.2 101.1 104.2 103.2 3 Total 116.0 136.0 145.9 166.1 170.4 179.0 188.0 198.0 203.8 206.6 4 LESS: Reserves for unearned income and losses.... 15.6 20.0 23.3 28.9 30.5 30.1 30.6 31.9 33.4 34.7 5 Accounts receivable, net 100.4 116.0 122.6 137.2 139.8 148.9 157.4 166.1 170.4 171.9 6 Cash and bank deposits 3.5 7 Securities 1.3 11 2244..99'' 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 1985 1985 1985 AAAppprrr... 333000,,, 111999888555''' Feb. Mar. Apr. Feb. Mar. Apr. Feb. Mar. Apr. 1 Total 143,292 869 873 2,045 26,444 26,283 25,833 25,575 25,410 23,788 Retail financing of installment sales 2 Automotive (commercial vehicles) 11,751 43 298 119 797 1,060 889 754 762 770 3 Business, industrial, and farm equipment 20,196 -25 84 -102 1,272 1,427 1,063 1,297 1,343 1,165 Wholesale financing 4 Automotive 20,899 709 476 417 9,394 10,201 9,090 8,685 9,725 8,673 5 Equipment 4,808 -15 105 -213 485 540 479 500 435 692 6 All other 6,841 106 86 -59 1,690 1,652 1,627 1,584 1,566 11,,668866 Leasing 7 Automotive 14,174 305 271 538 966 872 1,093 661 601 555 8 Equipment 36,824 39 -252 628 916 1,222 1,313 877 1,474 685 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,718 -687 -419 835 9,650 8,262 9,183 10,337 8,681 8,348 10 All other business credit 11,081 394 224 -118 1,274 1,047 1,0% 880 823 1,214 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 Financial Statistics • August 1985 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1984 1985 IItteemm Nov. Dec. Jan. Feb. Mar. Apr. May 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 99.5 102.6 94.8 101.8 91.3 101.4' 108.4 2 Amount of loan (thousands of dollars) 69.8 69.5 73.7 75.2 76.9 71.4 76.5 69.9 76.9' 1 0.1 3 Loan/price ratio (percent) 76.6 77.1 78.7 77.9 77.9 77.9 77.6 79.8 78.9' 76.2 4 Maturity (years) 27.6 26.7 27.8 27.5 28.0 27.7 28.1 27.2 27.4' 27.1 5 Fees and charges (percent of loan amount)2 2.95 2.40 2.64 2.54 2.65 2.65 2.58 2.65 2.65' 2.51 6 Contract rate (percent per annum) 14.47 12.20 11.87 12.27 12.05 11.77 11.74 11.42 11.55' 11.59 Yield (percent per annum) 7 FHLBB series5 15.12 12.66 12.37 12.75 12.55 12.27 12.21 11.92 12.05 12.06 8 HUD series4 15.79 13.43 13.80 13.20 13.05 12.88 13.06 13.26 13.01 12.49 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 15.30 13.11 13.81 12.90 12.99 13.01 13.27 13.43 12.97 12.28 10 GNMA securities6 14.68 12.25 13.13 12.71 12.54 12.26 12.23 12.68 12.31 11.93 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 66,031 74,847 83,339 86,416 87,940 89,353 90,369 91,975 92,765 93,610 12 FHA/VA-insured 39,718 37,393 35,148 34,752 34,711 34,602 34,553 34,585 34,516 34,428 13 Conventional 26,312 37,454 48,191 51,664 53,229 54,751 55,816 57,391 58,250 59,182 Mortgage transactions (during period) 14 Purchases 15,116 17,554 16,721 1,297 1,962 1,943 1,559 2,256 1,515 1,703 15 2 3,528 978 0 0 0 0 100 0 0 Mortgage commitments1 16 Contracted (during period) 22,105 18,607 21,007 2,150 2,758 1,230 1,895 1,636 1,921 2,074 17 Outstanding (end of period) 7,606 5,461 6,384 5,916 6,384 5,678 5,665 5,019 5,361 5,589 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 5,131 5,996 9,283 9,900 10,399 10,362 11,118 11,549 11,615 19 FHA/VA 1,027 974 910 886 881 876 859 854 850 20 Conventional 4,102 5,022 8,373 9,014 9,518 9,485 10,259 10,694 10,765 Mortgage transactions (during period) 71 Purchases 23,673 23,089 21,886 2,241 4,137 2,197 3,247 3,232 2,201 n.a. 22 24,170 19,686 18,506 1,961 3,635 2,162 2,428 2,751 1,973 Mortgage commitments9 23 Contracted (during period) 28,179 32,852 32,603 4,158 4,174 4,264 3,622 3,453 4,141 24 Outstanding (end of period) 7,549 16,964 26,990 27,550 26,990 29,654 30,135 30,436 n.a. 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 1984 1985 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998822 11998833 11998844 Ql Q2 Q3 Q4 Ql 1 AU holders 1,658,450 1,829,761 2,033,701 1,873,345 1,932,749 1,984,750 2,033,701 2,076,898 ? 1- to 4-family 1,110,315 1,220,359 1,350,203 1,250,361 1,287,016 1,318,664 1,350,203 1,381,134 3 Multifamily 140,063 150,271 164,439 153,486 158,180 160,523 164,439 168,131 4 Commercial 301,362 349,757 408,194 359,880 377,060 394,494 408,194 416,370 5 106,710 109,374 110,865 109,618 110,493 111,069 110,865 111,263 6 Major financial institutions 1,024,680 1,112,363 1,247,573 1,137,787 1,181,792 1,219,436 1,247,573 1,267,245 7 Commercial banks' 301,272 330,521 374,689 339,653 352,258 363,043 374,689 383,187 8 1- to 4-family 173,804 182,514 196,112 185,213 190,185 193,138 196,112 200,024 9 Multifamily 16,480 18,410 21,395 19,836 20,501 20,040 21,395 22,033 10 Commercial 102,553 120,210 146,653 124,890 131,533 139,663 146,653 150,401 11 Farm 8,435 9,387 10,529 9,714 10,039 10,202 10,529 10,729 1? Mutual savings banks 97,805 136,054 160,324 143,180 147,517 150,462 160,324 166,612 n 1- to 4-family 66,777 96,569 114,076 101,868 105,063 106,944 114,076 118,723 14 Multifamily 15,305 17,785 20,123 18,441 18,752 19,138 20,123 20,767 i^ Commercial 15,694 21,671 26,094 22,841 23,672 24,349 26,094 27,091 16 Farm 29 29 31 30 30 31 31 31 17 Savings and loan associations 483,614 494,789 555,277 503,509 528,172 550,129 555,277 559,263 18 1- to 4-family 393,323 390,883 431,450 397,017 414,087 429,101 431,450 433,429 19 Multifamily 38,979 42,552 48,309 43,553 45,951 47,861 48,309 48,936 20 Commercial 51,312 61,354 75,518 62,939 68,134 73,167 75,518 76,898 71 Life insurance companies 141,989 150,999 157,283 151,445 153,845 155,802 157,283 158,183 V 1- to 4-family 16,751 15,319 14,180 14,917 14,437 14,204 14,180 14,153 73 Multifamily 18,856 19,107 19,017 19,083 19,028 18,828 19,017 19,114 74 Commercial 93,547 103,831 111,642 104,890 107,7% 110,149 111,642 112,641 25 Farm 12,835 12,742 12,444 12,555 12,584 12,621 12,444 12,275 76 Federal and related agencies 138,138 147,370 157,377 150,784 152,669 153,355 157,377 162,416 77 Government National Mortgage Association 4,227 3,395 2,301 2,900 2,715 2,389 2,301 1,964 78 1- to 4-family 676 630 585 618 605 594 585 576 29 Multifamily 3,551 2,765 1,716 2,282 2,110 1,795 1,716 1,388 30 Farmers Home Administration 1,786 2,141 1,276 2,094 1,344 738 1,276 1,062 31 1- to 4-family 783 1,159 213 1,005 281 206 213 156 3? Multifamily 218 173 119 303 463 126 119 82 33 Commercial 377 409 497 319 81 113 497 421 34 Farm 408 400 447 467 519 293 447 403 35 Federal Housing and Veterans Administration 5,228 4,894 4,782 4,832 4,753 4,749 4,782 4,938 36 1- to 4-family 1,980 1,893 2,007 1,956 1,894 1,982 2,007 2,113 37 Multifamily 3,248 3,001 2,775 2,876 2,859 2,767 2,775 2,825 38 Federal National Mortgage Association 71,814 78,256 87,940 80,975 83,243 84,850 87,940 91,975 39 1- to 4-family 66,500 73,045 82,175 75,770 77,633 79,175 82,175 86,129 40 Multifamily 5,314 5,211 5,765 5,205 5,610 5,675 5,765 5,846 41 Federal Land Banks 50,350 51,052 50,679 51,004 51,136 51,182 50,679 50,929 47 1- to 4-family 3,068 3,000 2,948 2,982 2,958 2,954 2,948 2,998 43 Farm 47,282 48,052 47,731 48,022 48,178 48,228 47,731 47,931 44 Federal Home Loan Mortgage Corporation 4,733 7,632 10,399 8,979 9,478 9,447 10,399 11,548 45 1- to 4-family 4,686 7,559 9,654 8,847 8,931 8,841 9,654 10,642 46 Multifamily 47 73 745 132 547 606 745 906 47 Mortgage pools or trusts2 216,654 285,073 332,057 296,481 305,051 317,548 332,057 347,793 48 Government National Mortgage Association 118,940 159,850 179,981 166,261 170,893 175,770 179,981 185,954 49 1- to 4-family 115,831 155,801 175,084 161,943 166,415 171,095 175,084 180,878 50 Multifamily 3,109 4,049 4,897 4,318 4,478 4,675 4,897 5,076 51 Federal Home Loan Mortgage Corporation 42,964 57,895 70,822 59,376 61,267 63,964 70,822 76,759 57 1- to 4-family 42,560 57,273 70,253 58,776 60,636 63,352 70,253 75,781 53 Multifamily 404 622 569 600 631 612 569 978 54 Federal National Mortgage Association3 14,450 25,121 36,215 28,354 29,256 32,888 36,215 39,370 55 1- to 4-family 14,450 25,121 35,965 28,354 29,256 32,730 35,965 38,772 56 Multifamily n.a. n.a. 250 n.a. n.a. 158 250 598 57 Farmers Home Administration 40,300 42,207 45,039' 42,490 43,635 44,926 45,039 45,710 58 1- to 4-family 20,005 20,404 21,813 20,573 21,331 21,595 21,813 21,928 59 Multifamily 4,344 5,090 5,841 5,081 5,081 5,618 5,841 6,041 60 Commercial 7,011 7,351 7,559 7,456 7,764 7,844 7,559 7,681 61 Farm 8,940 9,362 9,826 9,380 9,459 9,869 9,826 10,060 6? Individual and others4 278,978 284,955 296,694 288,293 293,237 294,411 296,694 299,444 63 1- to 4-family5 189,121 189,189 193,688 190,522 193,304 192,753 193,688 194,832 64 Multifamily 30,208 31,433 32,918 31,776 32,169 32,624 32,918 33,541 65 Commercial 30,868 34,931 40,231 36,545 38,080 39,209 40,231 41,237 66 Farm 28,781 29,402 29,857 29,450 29,684 29,825 29,857 29,834 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 Nonfinancial Statistics • August 1985 1.55 CONSUMER INSTALLMENT CREDIT' Total Outstanding, and Net Change A Millions of dollars 1984 1985 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Amounts outstanding (end of period) 1 Total 383,701 460,500 430,795 437,469 441,358 447,783 460,500 461,530 463,628 471,567 479,935 By major holder 2 Commercial banks 171,978 212,391 199,654 202,452 204,582 206,635 212,391 213,951 215,778 219,970 223,850 3 Finance companies .... 87,429 96,747 94,070 95,594 95,113 95,753 96,747 96,732 97,360 99,133 101,324 4 Credit unions 53,471 67,858 62,679 63,808 64,716 66,528 67,858 68,538 68,939 70,432 71,418 5 Retailers2 37,470 40,913 35,359 35,595 35,908 37,124 40,913 38,978 37,483 37,082 37,091 6 Savings and loans 23,108 29,945 26,922 27,880 28,781 29,358 29,945 30,520 31,405 32,349 33,514 7 Gasoline companies ... 4,131 4,315 4,452 4,328 4,290 4,217 4,315 4,329 4,012 3,820 3,834 8 Mutual savings banks .. 6,114 8,331 7,659 7,812 7,968 8,168 8,331 8,482 8,651 8,781 8,904 By major type of credit 9 Automobile 143,114 172,589 165,177 167,231 168,923 170,731 172,589 173,769 175,491 179,661 183,558 10 Commercial banks... 67,557 85,501 81,786 82,706 83,620 84,326 85,501 86,223 87,333 89,257 90,915 11 Credit unions 25,574 32,456 29,979 30,519 30,953 31,820 32,456 32,781 32,973 33,687 34,159 12 Finance companies .. 49,983 54,632 53,412 54,006 54,350 54,585 54,632 54,765 55,185 56,717 58,484 13 Revolving 81,977 101,555 88,202 90,231 91,505 93,944 101,555 100,565 99,316 100,434 101,887 14 Commercial banks... 44,184 60,549 52,313 54,258 55,276 56,641 60,549 61,445 61,978 63,684 65,127 15 Retailers 33,662 36,691 31,437 31,645 31,939 33,086 36,691 34,791 33,326 32,930 32,926 16 Gasoline companies . 4,131 4,315 4,452 4,328 4,290 4,217 4,315 4,329 4,012 3,820 3,834 17 Mobile home 23,862 24,556 24,947 25,198 24,573 24,439 24,556 24,281 24,379 24,456 24,675 18 Commercial banks... 9,842 9,610 9,711 9,761 9,627 9,613 9,610 9,498 9,456 9,425 9,432 19 Finance companies .. 9,547 9,243 9,992 10,065 9,470 9,235 9,243 9,053 9,044 8,981 8,992 20 Savings and loans ... 3,906 4,985 4,581 4,697 4,791 4,887 4,985 5,005 5,150 5,305 5,4% 21 Credit unions 567 718 663 675 685 704 718 725 729 745 755 22 Other 134,748 161,800 152,469 154,809 156,357 158,669 161,800 162,915 164,442 167,016 169,815 23 Commercial banks... 50,395 56,731 55,844 55,727 56,059 56,055 56,731 56,785 57,011 57,604 58,376 24 Finance companies .. 27,899 32,872 30,666 31,523 31,293 31,933 32,872 32,914 33,131 33,435 33,848 25 Credit unions 27,330 34,684 32,037 32,614 33,078 34,004 34,684 35,032 35,237 36,000 36,504 26 Retailers 3,808 4,222 3,922 3,950 3,969 4,038 4,222 4,187 4,157 4,152 4,165 27 Savings and loans ... 19,202 24,960 22,341 23,183 23,990 24,471 24,960 25,515 26,255 27,044 28,018 28 Mutual savings banks 6,114 8,331 7,659 7,812 7,968 8,168 8,331 8,482 8,651 8,781 8,904 Net change (during period) 29 Total 48,742 76,799 6,022 4,982 5,631 6,080 6,819 7,223 9,041 8,342 8,270 By major holder 30 Commercial banks 19,488 40,413 2,631 1,384 2,756 2,483 3,028 3,799 5,071 4,847 3,853 31 Finance companies 18,572 18,636 1,381 1,571 398 778 1,1% 901 1,203 2,048 1,885 32 Credit unions 6,218 14,387 927 871 1,224 1,731 1,336 1,290 1,423 797 1,215 33 Retailers2 5,075 3,443 197 225 128 278 389 251 269 91 168 34 Savings and loans 7,285 6,837 804 770 864 546 576 922 997 715 1,063 35 Gasoline companies ... 68 184 -63 -38 98 86 117 -91 -102 -142 -45 36 Mutual savings banks .. 1,322 2,217 145 199 163 178 177 151 180 -14 131 By major type of credit 37 Automobile 16,856 29,475 2,482 1,513 2,504 2,549 2,687 2,887 3,198 3,391 3,488 38 Commercial banks... 8,002 17,944 1,150 434 1,057 1,019 1,275 1,616 1,790 1,767 1,546 39 Credit unions 2,978 6,882 444 416 587 828 640 598 6% 381 580 40 Finance companies .. 11,752 9,298 888 663 860 702 772 673 712 1,243 1,362 41 Revolving 12,353 19,578 1,263 1,484 1,488 1,614 1,445 1,957 2,527 2,631 2,126 42 Commercial banks... 7,518 16,365 1,159 1,323 1,279 1,289 1,001 1,809 2,429 2,698 2,003 43 Retailers 4,767 3,029 167 199 111 239 327 239 200 75 168 44 Gasoline companies . 68 184 -63 -38 98 86 117 -91 -102 -142 -45 45 Mobile home 1,452 694 217 127 -392 -91 117 -159 282 -11 218 46 Commercial banks... 237 -232 4 4 -91 -1 29 -89 41 -50 19 47 Finance companies .. 776 -608 63 19 -381 -192 -13 -144 33 -63 13 48 Savings and loans ... 763 1,079 140 95 67 84 88 60 192 92 175 49 Credit unions 64 151 10 9 13 18 13 14 16 10 11 50 Other 18,081 27,052 2,060 1,858 2,031 2,008 2,570 2,538 3,034 2,331 2,438 51 Commercial banks... 3,731 6,336 318 -377 511 176 723 463 811 432 285 52 Finance companies .. 6,044 9,946 430 889 -81 268 437 372 458 868 510 53 Credit unions 3,176 7,354 473 446 624 885 683 678 711 406 624 54 Retailers 308 414 30 26 17 39 62 12 69 16 0 55 Savings and loans ... 6,522 5,758 664 675 797 462 488 862 805 623 888 56 Mutual savings banks 1,322 2,217 145 199 163 178 177 151 180 -14 131 • These data have not been revised this month due to revisions that were not NOTE. Total consumer noninstallment credit outstanding—credit scheduled to available at time of publication. be repaid in a lump sum, including single-payment loans, charge accounts, and 1. The Board's series cover most short- and intermediate-term credit extended service credit—amounted to, not seasonally adjusted, $85.9 billion at the end of to individuals through regular business channels, usually to finance the purchase 1982, $96.9 billion at the end of 1983, and $116.6 billion at the end of 1984. of consumer goods and services or to refinance debts incurred for such purposes, These data also appear in the Board's G.19 (421) release. For address, see and scheduled to be repaid (or with the option of repayment) in two or more inside front cover. installments. 2. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks' 1 48-month new car2 16.82 13.92 13.71 n.a. 13.91 n.a. n.a. 13.37 n.a. n.a. 2 24-month personal 18.64 16.50 16.47 n.a. 16.63 n.a. n.a. 16.21 n.a. n.a. 3 120-month mobile home2 18.05 16.08 15.58 n.a. 15.60 n.a. n.a. 15.42 n.a. n.a. 4 Credit card 18.51 18.78 18.77 n.a. 18.82 n.a. n.a. 18.85 n.a. n.a. Auto finance companies 5 New car 16.15 12.58 14.62 15.18 15.24 15.24 15.11 13.78 12.65 11.92 6 Used car 20.75 18.74 17.85 18.19 18.30 18.34 17.88 17.91 17.78 17.78 OTHER TERMS3 Maturity (months) 7 New car 45.9 45.9 48.3 49.7 50.0 50.2 50.7 51.4 52.2 51.5 8 Used car 37.0 37.9 39.7 39.9 39.9 39.8 41.3 41.1 41.3 41.3 Loan-to-value ratio 9 New car 85 86 88 88 89 89 90 90 91 91 10 Used car 90 92 92 93 93 93 93 93 93 93 Amount financed (dollars) 11 New car 8,178 8,787 9,333 9,449 9,577 9,707 9,654 9,196 9,232 9,305 12 Used car 4,746 5,033 5,691 5,826 5,900 5,975 5,951 5,968 5,976 6,043 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 Nonfinancial Statistics • August 1985 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1982 1983 1984r HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 386.0 344.6 380.4 404.1 526.4 734.2 358.1 450.1 448.9 563.8 688.9 779.4 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 348.6 265.4 293.1 242.8 339.8 535.4 254.0 231.7 266.9 412.7 511.5 559.2 6 Debt capital instruments 211.2 192.0 159.1 158.9 239.3 300.7 140.7 177.2 214.4 264.2 262.4 338.9 7 Tax-exempt obligations 30.3 30.3 22.7 53.8 56.3 58.9 43.9 63.7 62.8 49.7 21.7 96.1 8 Corporate bonds 17.3 26.7 21.8 18.7 15.7 37.0 12.0 25.3 23.0 8.4 28.9 45.1 9 Mortgages 163.6 135.1 114.6 86.5 167.3 204.7 84.8 88.2 128.6 206.0 211.8 197.7 10 Home mortgages 120.0 96.7 76.0 52.5 108.7 129.9 53.6 51.3 83.8 133.6 137.5 122.2 11 Multifamily residential 7.8 8.8 4.3 5.5 8.4 14.3 5.1 5.8 2.8 13.9 16.7 12.0 12 Commercial 23.9 20.2 24.6 23.6 47.3 59.0 19.7 27.5 40.3 54.3 56.0 62.0 13 Farm 11.8 9.3 9.7 5.0 2.9 1.5 6.5 3.5 1.6 4.1 1.6 1.4 14 Other debt instruments 137.5 73.4 134.0 83.9 100.5 234.7 113.2 54.6 52.5 148.5 249.1 220.3 15 Consumer credit 45.4 6.3 26.7 21.0 51.3 96.5 20.6 21.4 35.9 66.6 102.1 90.9 16 Bank loans n.e.c 51.2 36.7 54.7 55.5 27.3 77.4 69.0 42.0 13.3 41.2 91.2 63.6 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 37.1 13.6 9.4 13.9 32.3 24.3 49.8 19 By borrowing sector 348.6 265.4 293.1 242.8 339.8 535.4 254.0 231.7 266.9 412.7 511.5 559.2 20 State and local governments 17.6 17.2 6.2 31.3 36.7 36.8 24.1 38.5 41.9 31.6 3.0 70.5 21 Households 179.3 122.1 127.5 94.5 175.4 241.7 94.7 94.3 134.8 216.0 240.8 242.5 22 Farm 21.4 14.4 16.3 7.6 4.3 2.3 9.6 5.6 .8 7.9 .9 3.8 23 Nonfarm noncorporate 34.4 33.7 40.2 39.5 63.9 78.8 36.6 42.3 50.1 77.6 83.1 74.4 24 Corporate 96.0 78.1 102.9 70.0 59.5 175.8 89.0 51.0 39.3 79.6 183.7 167.9 25 Foreign net borrowing in United States 20.2 27.2 27.2 15.7 18.9 .6 10.2 21.2 15.3 22.5 19.2 -18.0 26 Bonds 3.9 .8 5.4 6.7 3.8 4.1 2.4 11.0 4.6 2.9 1.1 7.0 27 Bank loans n.e.c 2.3 11.5 3.7 -6.2 4.9 -7.8 -7.6 -4.7 11.3 -1.5 -6.0 -9.6 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 4.0 3.0 6.0 3.9 4.6 5.2 2.7 30 Total domestic plus foreign 406.2 371.8 407.6 419.8 545.3 734.8 368.3 471.4 504.2 586.3 708.1 761.4 Financial sectors 31 Total net borrowing by financial sectors 82.4 62.9 84.1 69.0 90.7 131.1 84.2 53.8 74.0 107.3 123.4 138.8 By instrument 32 U.S. government related 47.9 44.8 47.4 64.9 67.8 74.4 60.0 69.7 66.2 69.4 69.1 79.6 33 Sponsored credit agency securities 24.3 24.4 30.5 14.9 1.4 30.4 22.4 7.5 -4.1 6.9 30.8 30.1 34 Mortgage pool securities 23.1 19.2 15.0 49.5 66.4 43.9 36.8 62.2 70.3 62.5 38.3 49.5 IS .6 1.2 1.9 .4 .8 36 Private financial sectors 34.5 18.1 36.7 4.1 22.9 56.8 24.2 -16.0 7.8 38.0 54.3 59.2 37 Corporate bonds 7.8 7.1 -.8 2.5 17.1 18.8 -2.5 7.6 15.2 18.9 17.0 20.6 38 Mortgages * -.1 -.5 .1 * * .1 .1 * * * * 39 Bank loans n.e.c -.5 -.9 .9 1.9 -.2 1.0 3.2 .6 -2.5 2.2 .1 1.8 40 Open market paper 18.0 4.8 20.9 -1.2 13.0 21.3 12.3 -14.7 7.2 18.8 21.5 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 30.4 23.2 7.5 -4.1 6.9 30.8 30.1 43 Mortgage pools 23.1 19.2 15.0 49.5 66.4 43.9 36.8 62.2 70.3 62.5 38.3 49.5 44 Private financial sectors 34.5 18.1 36.7 4.1 22.9 56.8 24.2 -16.0 7.8 38.0 54.3 59.2 45 Commercial banks 1.6 .5 .4 1.2 .5 4.4 .7 1.7 .8 .2 4.8 3.9 46 Bank affiliates 6.5 6.9 8.3 1.9 8.6 10.9 9.7 -5.8 6.1 11.1 20.0 1.8 47 Savings and loan associations 12.6 7.4 15.5 2.5 -2.7 22.7 14.3 -9.3 -10.0 4.5 19.1 26.2 48 Finance companies 16.5 5.8 12.8 -.9 17.0 19.5 * -1.9 11.4 22.7 10.9 28.1 49 REITs -1.3 -2.2 .2 .1 .2 .1 .1 .1 .2 .2 .1 .1 All sectors 50 Total net borrowing 488.7 434.7 491.8 488.8 635.9 865.9 452.5 525.1 578.2 693.6 831.5 900.2 51 U.S. government securities 84.8 122.9 133.0 225.9 254.4 273.3 163.5 288.3 288.4 220.5 246.7 299.8 52 State and local obligations 30.3 30.3 22.7 53.8 56.3 58.9 43.9 63.7 62.8 49.7 21.7 96.1 53 Corporate and foreign bonds 29.0 34.6 26.4 27.8 36.5 59.9 11.8 43.8 42.8 30.3 46.9 72.8 54 Mortgages 163.5 134.9 113.9 86.5 167.2 204.6 84.8 88.2 128.5 206.0 211.7 197.6 55 Consumer credit 45.4 6.3 26.7 21.0 51.3 96.5 20.6 21.4 35.9 66.6 102.1 90.9 56 Bank loans n.e.c 52.9 47.3 59.3 51.2 32.0 70.6 64.6 37.9 22.1 41.9 85.3 55.8 57 Open market paper 40.3 20.6 54.0 5.4 17.8 45.4 34.8 -23.9 -8.0 43.6 71.8 19.0 58 Other loans 42.4 37.8 55.8 17.2 20.3 56.7 28.5 5.9 5.7 35.0 45.2 68.2 External corporate equity funds raised in United States 59 Total new share issues -3.8 22.2 -4.1 35.3 67.8 -35.4 23.3 47.2 83.5 52.0 -43.3 -27.5 60 Mutual funds .1 5.2 6.3 18.4 32.8 37.5 12.5 24.3 36.8 28.9 39.0 35.9 61 All other -3.9 17.1 -10.4 16.9 34.9 -72.9 10.9 22.9 46.8 23.1 -82.3 -63.4 62 Nonfinancial corporations -7.8 12.9 -11.5 11.4 28.3 -77.0 7.0 15.8 38.2 18.4 -84.5 -69.4 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 1984r TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997799 11998800 11998811 11998822 11998833 II998844rr HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 386.0 344.6 380.4 404.1 526.4 734.2 358.1 450.1 488.9 563.8 688.9 779.4 By public agencies and foreign ? Total net advances 75.2 97.0 97.7 109.1 117.1 114422..33 100.8 111177..33 111199..77 111144..66 112255..00 115599..55 3 U.S. government securities -6.3 15.7 17.2 18.0 27.6 36.0 9.7 26.2 40.5 14.6 33.4 38.5 4 Residential mortgages 35.8 31.7 23.5 61.0 76.1 56.0 47.6 74.4 80.1 72.0 52.0 60.0 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 23.9 45.3 Total advanced, by sector 7 U.S. government 19.0 23.7 24.1 16.0 9.7 18.8 14.8 17.1 9.1 10.3 77..44 3300..22 8 Sponsored credit agencies 53.0 45.6 48.2 65.3 69.5 72.1 61.8 68.7 68.2 70.7 73.0 71.2 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 42.9 20.4 15.8 26.8 27.4 27.5 58.4 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 7744..44 60.0 6699..77 6666..22 6699..44 6699..11 7799..66 12 Foreign 20.2 27.2 27.2 15.7 18.9 .6 10.2 21.2 15.3 22.5 19.2 -18.0 Private domestic funds advanced 13 Total net advances 379.0 319.6 357.3 375.6 495.9 666.9 327.5 423.8 450.8 554411..11 665522..22 668811..55 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 58.9 43.9 63.7 62.8 49.7 21.7 96.1 16 Corporate and foreign bonds 18.5 19.3 18.8 14.8 14.6 25.1 -.1 29.6 22.9 6.3 22.8 27.5 17 Residential mortgages 91.9 73.7 56.7 -3.2 40.9 88.1 11.0 -17.4 6.4 75.5 102.2 74.1 18 Other mortgages and loans 156.3 96.2 159.5 103.2 150.2 273.1 130.2 76.3 98.7 201.7 308.0 238.1 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 70 Credit market funds advanced by private financial institutions 313.9 281.5 323.4 285.6 376.7 544.8 274.4 296.7 323.2 430.1 553355..11 554.6 71 Commercial banking 123.1 100.6 102.3 107.2 136.1 179.9 99.9 114.5 121.6 150.6 193.0 166.8 ?? Savings institutions 56.5 54.5 27.8 31.3 136.8 145.1 25.2 37.4 128.9 144.6 163.9 126.3 73 Insurance and pension funds 85.9 94.3 97.4 108.8 98.8 113.0 111.4 106.3 89.5 108.1 96.8 129.1 24 Other finance 48.5 32.1 96.0 38.3 5.0 106.8 37.9 38.6 -16.8 26.8 81.2 132.3 75 Sources of funds 313.9 281.5 323.4 285.6 376.7 544.8 274.4 296.7 323.2 430.1 535.1 554.6 76 Private domestic deposits and RPs 137.4 169.6 211.9 174.7 203.5 288.6 147.6 201.9 192.7 214.2 283.5 293.6 27 Credit market borrowing 34.5 18.1 36.7 4.1 22.9 56.8 24.2 -16.0 7.8 38.0 54.3 59.2 78 Other sources 142.0 93.9 74.8 106.7 150.4 199.5 102.6 110.8 122.8 177.9 197.3 201.7 79 Foreign funds 27.6 -21.7 -8.7 -26.7 22.1 16.6 -28.3 -25.1 -14.2 58.5 15.7 17.5 30 Treasury balances .4 -2.6 -1.1 6.1 -5.3 4.0 -2.0 14.1 10.1 -20.8 .9 7.1 31 Insurance and pension reserves 72.8 83.9 90.4 104.6 99.2 106.2 111.4 97.8 90.0 108.4 107.6 104.8 32 Other, net 41.2 34.2 -5.9 22.8 34.4 72.7 21.5 24.1 36.8 31.9 73.1 72.3 Private domestic nonfinancial investors 33 Direct lending in credit markets 99.6 56.1 70.6 94.2 142.1 178.8 77.3 111.0 113355..33 148.9 117711..55 118866..11 34 U.S. government securities 52.5 24.6 29.3 37.4 88.7 121.7 35.3 39.5 95.9 81.4 131.3 112.2 35 State and local obligations 9.9 7.0 10.5 34.4 42.5 33.3 30.1 38.7 52.7 32.3 5.6 61.0 36 Corporate and foreign bonds -1.4 -5.7 -8.1 -5.2 2.0 3.6 -17.7 7.3 -1.7 5.7 15.3 -8.2 37 Open market paper 8.6 -3.1 2.7 -.1 3.9 -.8 3.5 -3.7 -8.1 15.9 -.3 -1.3 38 Other 30.0 33.3 36.3 27.8 5.0 21.0 26.2 29.3 -3.4 13.5 19.6 22.4 39 Deposits and currency 146.8 181.1 221.9 181.9 222.6 290.3 152.1 211.7 214.5 230.7 294.9 285.7 40 Currency 8.0 10.3 9.5 9.7 14.3 8.6 6.7 12.7 14.8 13.8 17.7 -.5 41 Checkable deposits 18.3 5.2 18.0 15.7 21.7 22.8 1.9 29.5 48.0 -4.7 36.6 8.9 47 Small time and savings accounts 59.3 82.9 47.0 138.2 219.1 149.2 83.2 193.1 278.6 159.7 123.0 175.5 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 76.2 21.9 -37.3 -61.0 45.9 92.4 59.9 45 Security RPs 6.6 6.5 2.5 3.8 14.3 -6.8 1.1 6.6 11.0 17.5 1.3 -15.0 46 Deposits in foreign countries 1.5 1.1 .5 -2.5 4.8 -6.9 -2.2 -2.9 7.0 2.7 -6.3 -7.5 47 Total of credit market instruments, deposits and currency 246.5 237.2 292.5 276.1 364.7 469.1 229.4 322.7 349.8 379.6 446666..44 471.8 48 Public holdings as percent of total 18.5 26.1 24.0 26.0 21.5 19.4 27.4 24.9 23.7 19.5 17.6 21.0 49 Private financial intermediation (in percent) 82.8 88.1 90.5 76.0 76.0 81.7 83.8 70.0 71.7 79.5 82.0 81.4 50 Total foreign funds 23.0 1.5 7.6 -8.6 49.2 59.5 -7.9 -9.3 12.6 85.9 43.1 75.9 MEMO: Corporate equities not included above 51 Total net issues -3.8 22.2 -4.1 35.3 67.8 --3355..44 2233..33 47.2 8833..55 5522..00 --4433..33 --2277..55 57 Mutual fund shares .1 5.2 6.3 18.4 32.8 37.5 12.5 24.3 36.8 28.9 39.0 35.9 53 Other equities -3.9 17.1 -10.4 16.9 34.9 -72.9 10.9 22.9 46.8 23.1 -82.3 -63.4 54 Acquisitions by financial institutions 12.9 24.9 20.1 39.2 57.5 21.9 11.0 67.3 75.9 39.2 7.6 36.2 55 Other net purchases -16.7 -2.7 -24.2 -3.9 10.2 -57.2 12.3 -20.1 7.6 12.8 -50.8 -63.6 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 Financial Statistics • August 1985 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures' 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1984 1985 MMeeaassuurree 11998822 11998833 11998844 Sept.' Oct.' Nov.' Dec. Jan.' Feb.' Mar.' Apr.' May 1 Industrial production 103. 1' 109.2' 121.8' 123.3 122.7 123.4 123.3' Market groupings 2 Products, total 107.8' 113.9<- 127.1' 128.8 129.0 129.9 129.8' 3 Final, total 109.5' 114.7' 127.8' 129.8 129.9 130.7 130.6' 4 Consumer goods 101.4' 109.3' 118.2' 118.3 118.5 119.6 119.7' n a. n a. n a. n a. n a. 5 Equipment 120.2' 121.7' 140.5' 145.0 145.0 145.5 144.9' 6 Intermediate 101.7' 111.2' 124.9' 125.6 126.2 127.2 127.3' 7 Materials 96.7' 102.8' 114.6' 115.9 114.2 114.6 U4.& Industry groupings 8 Manufacturing 102.2' 110.2' 123.9' 125.6 125.5 126.0 125.8' Capacity utilization (percent)2 9 Manufacturing 71.1 75.2 81.6 82.0 81.7 81.6 81.4 10 Industrial materials industries 70.1 75.2 82.0 82.4 81.0 80.9 80.4 11 Construction contracts (1977 = 100)3 111.0 137.0 149.0 146.0 145.0 151.0 150.0 150.0 145.0 162.0 161.0 162.0 12 Nonagricultural employment, total4 136.1 137.0 143.1 144.7 145.2 145.7 146.0 146.5 146.8 147.3 147.6 148.1 13 Goods-producing, total 102.2 100.4 106.8 106.6 106.9 107.1 107.5 107.7 107.5 107.5 107.7 107.7 14 Manufacturing, total 96.6 95.1 100.7 100.2 100.5 100.5 100.8 100.8 100.6 100.4 100.1 100.0 15 Manufacturing, production-worker ... 89.1 87.9 94.0 93.2 93.5 93.5 93.7 93.6 93.3 93.0 92.6 92.5 16 Service-producing 154.7 157.1 163.0 165.6 166.3 166.9 167.2 167.8 168.3 169.1 169.5 170.3 17 Personal income, total 410.3 435.6 478.1 487.0 488.8 491.7 493.9 496.7 499.4 501.0 506.1 503.5 18 Wages and salary disbursements 367.4 388.6 422.5 428.4 428.8 432.6 436.7 438.5 440.5 443.7 445.8 447.1 19 Manufacturing 285.5 294.7 323.6 325.7 326.7 330.0 333.2 334.4 332.9 334.8 333.3 333.9 2 2 0 1 R D e is ta p i o l s s a a b l l e e s 6 personal income5 3 3 9 2 8 6 . . 0 0 4 3 2 7 7 3 . . 1 0 4 4 7 1 0 2 . . 3 0 4 4 7 1 9 4 . . 1 1 4 4 8 1 0 6 . . 6 4 4 4 8 2 2 1 . . 9 3 4 4 8 2 4 2 . . 5 3 4 4 8 2 7 4. . 0 6 4 48 2 4 8 . . 7 3 4 4 2 8 7 1 . . 4 3 4 49 4 7 0 . . 2 8 4 5 3 0 7 5. . 3 8 Prices7 22 Consumer 289.1 298.4 311.1 314.5 315.3 315.3 315.5 316.1 317.4 318.8 320.1 321.3 23 Producer finished goods 280.7 285.2 291.2 289.5 291.5 292.3 292.(X 292.3 292.5 292.4 293.1 294.2 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 7. Data without seasonal adjustment, as published in Monthly Labor Review. (July 1985), pp. 487-501. The revised indexes for January through June 1985 will Seasonally adjusted data for changes in the price indexes may be obtained from be shown in the September BULLETIN. the Bureau of Labor Statistics, U.S. Department of Labor. 2. Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, Department of Com- NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6, merce, and other sources. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 3. Index of dollar value of total construction contracts, including residential, of Current Business. nonresidential and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the last two months are preliminary and Company, F. W. Dodge Division. estimated, respectively. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. 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 Oct/ Nov/ Dec/ Jan/ Feb/ Mar/ Apr. May HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 174,450 176,414 178,602 179,181 179,353 179,524 179,600 179,742 179,891 180,024 180,171 2 Labor force (including Armed Forces)1 112,383 113,749 115,763 116,241 116,292 116,682 117,091 117,310 117,738 117,596 117,600 3 Civilian labor force 110,204 111,550 113,544 114,016 114,074 114,464 114,875 115,084 115,514 115,371 111155,,337733 Employment 4 Nonagricultural industries2 96,125 97,450 101,685 102,480 102,598 102,888 103,071 103,345 103,757 103,517 103,648 5 Agriculture 3,401 3,383 3,321 3,169 3,334 3,385 3,320 3,340 3,362 3,428 3,312 Unemployment 6 Number 10,678 10,717 8,539 8,367 8,142 8,191 8,484 8,399 8,396 8,426 8,413 7 Rate (percent of civilian labor force) ... 9.7 9.6 7.5 7.3 7.1 7.2 7.4 7.3 7.3 7.3 7.3 8 Not in labor force 62,067 62,665 62,839 62,940 63,061 62,842 62,509 62,432 62,153 62,428 62,571 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 89,566 90,138 94,166 95,573 95,882 96,092 96,419 96,591 96,910 97,118'' 97,463 10 Manufacturing 18,781 18,497 19,589 19,536 19,553 19,603 19,604 19,561 19,526 19,469' 19,441 11 Mining 1,128 957 999 979 978 973 974 976 977 981' 977 12 Contract construction 3,905 3,940 4,315 4,403 4,424 4,469 4,534 4,525 4,553 4,648' 4,680 13 Transportation and public utilities 5,082 4,958 5,169 5,223 5,229 5,246 5,259 5,272 5,269 5,286' 5,307 14 Trade 20,457 20,804 21,790 22,495 22,641 22,691 22,776 22,857 22,963 23,013' 23,145 15 Finance 5,341 5,467 5,665 5,737 5,755 5,776 5,790 5,809 5,835 5,858 5,891 16 Service 19,036 19,665 20,666 21,087 21,184 21,252 21,382 21,480 21,644 21,723' 21,834 17 Government 15,837 15,851 15,973 16,113 16,118 16,082 16,100 16,111 16,143 16,140' 16,188 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 1984 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 • August 1985 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1984 1985 1984 1985 1984 1985 Q2 Q3 Q4 Ql' Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Total industry 163.1 165.6 164.7 165.5 199.7 201.1 202.4 204.0 81.7 82.4 81.3 81.1 2 Mining 125.1 129.0 124.3 126.1 165.9 166.1 166.3 166.5 75.4 77.7 74.7 75.7 3 Utilities 183.1 181.1 183.0 186.4 215.3 216.8 218.3 219.8 85.0 83.5 83.8 84.8 4 Manufacturing 164.4 167.2 166.5 166.8 201.0 202.5 204.0 205.7 81.8 82.5 81.6 81.1 5 Primary processing ... 162.5 162.2 159.8 160.8 197.2 198.0 198.7 199.7 82.4 81.9 80.4 80.5 6 Advanced processing 165.2 169.7 169.6 170.4 203.0 204.9 206.8 208.9 81.4 82.8 82.0 81.6 7 Materials 162.1 163.4 160.2 161.3 195.9 197.2 198.4 199.7 82.7 82.9 80.7 80.7 8 Durable goods 162.0 164.6 162.1 161.8 198.3 199.5 200.8 202.4 81.7 82.5 80.7 79.9 9 Metal materials .... 100.3 97.2 91.0 92.5 138.5 137.9 137.3 136.8 72.4 70.5 66.3 67.6 10 Nondurable goods.... 186.6 185.7 181.5 181.5 223.4 225.2 226.9 228.4 83.5 82.5 80.0 79.5 11 Textile, paper, and chemical.. 195.9 194.9 189.6 189.3 236.2 238.2 240.3 242.0 82.9 81.8 79.0 78.2 12 Paper 168.5 171.0 168.3 166.7 169.5 170.5 171.5 172.5 99.4 100.3 98.1 96.7 13 Chemical 240.4 238.4 233.5 234.7 305.2 308.0 310.9 313.5 78.8 77.4 75.1 74.9 14 Energy materials 132.4 133.1 129.4 135.2 156.4 157.0 157.6 158.4 84.6 84.8 82.1 85.4 Previous cycle1 Latest cycle2 1984 1984 1985 High Low High Low May Sept. Oct. Nov. Dec. Jan. Feb.' Mar.' Apr.' May Capacity utilization rate (percent) 15 Total industry 88.4 71.1 87.3 69.6 81.5 81.9 81.4 81.4 81.2 81.1 81.1 81.1 80.7 80.3 16 Mining 91.8 86.0 88.5 69.6 75.4 77.4 74.3 75.1 74.8 75.4 75.4 76.4 74.2 73.7 17 Utilities 94.9 82.0 86.7 79.0 84.7 83.2 82.9 84.6 83.9 83.7 85.6 85.0 85.2 85.6 18 Manufacturing 87.9 69.0 87.5 68.8 81.7 82.0 81.7 81.6 81.4 81.2 81.0 81.1 80.7 80.4 19 Primary processing ... 93.7 68.2 91.4 66.2 82.4 81.5 81.2 80.6 79.5 80.1 80.7 80.7 80.3 79.9 20 Advanced processing . 85.5 69.4 85.9 70.0 81.2 82.4 81.8 82.0 82.2 82.0 81.4 81.4 80.8 80.5 21 Materials 92.6 69.3 88.9 66.6 82.7 82.4 81.0 80.9 80.4 80.5 80.9 80.8 80.1 79.7 22 Durable goods 91.4 63.5 88.4 59.8 81.5 82.2 81.3 80.8 80.0 80.0 79.9 79.9 79.3 78.5 23 Metal materials 97.8 68.0 95.4 46.2 72.2 69.8 67.6 66.7 64.5 65.2 67.8 69.8 70.1 69.6 24 Nondurable goods .... 94.4 67.4 91.7 70.7 83.9 81.5 80.5 80.2 79.4 79.2 79.6 79.6 79.0 78.6 25 Textile, paper, and chemical 95.1 65.4 92.3 68.6 83.3 80.5 79.7 79.1 78.0 78.0 78.3 78.4 77.3 76.8 26 Paper 99.4 72.4 97.9 86.3 99.8 99.7 98.7 97.2 98.5 98.2 96.3 95.5 93.0 n.a. 27 Chemical 95.5 64.2 91.3 64.0 79.0 76.1 75.7 75.7 73.9 74.3 75.0 75.5 74.6 n.a. 28 Energy materials 94.5 84.4 88.9 78.5 84.3 84.3 81.0 82.1 83.2 84.2 86.1 85.7 84.6 85.1 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 A Monthly data are seasonally adjusted 1977 1983 1984 GGrroouuppiinngg p p o ro r- - a 11 v 9988 g 44 . tion Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 121.8 115.5 118.4 119.3 120.1 120.7 121.3 122.3 123.2 123.5 123.3 122.7 123.4 123.3 2 Products 57.72 127.1 120.0 122.8 123.7 124.5 125.4 126.2 127.5 128.6 129.0 128.8 129.0 129.9 129.8 Final products 44.77 127.8 120.8 123.4 124.2 125.0 126.1 126.8 128.2 129.2 129.7 129.8 129.9 130.7 130.6 4 Consumer goods 25.52 118.2 114.4 116.2 116.9 117.3 118.3 117.7 118.5 119.1 118.4 118.3 118.5 119.6 119.7 5 Equipment 19.25 140.5 129.2 132.8 133.9 135.3 136.4 138.8 141.0 142.5 144.5 145.0 145.0 145.5 144.9 6 Intermediate products 12.94 124.9 117.6 120.9 121.9 122.8 123.0 124.2 125.4 127.0 126.9 125.6 126.2 127.2 127.3 7 Materials 42.28 114.6 109.4 112.4 113.3 114.1 114.4 114.7 115.2 115.8 116.1 115.9 114.2 114.6 114.6 Consumer goods 8 Durable consumer goods 6.89 112.6 109.7 113.0 113.0 112.8 113.0 111.8 111.7 113.8 113.3 111.5 111.4 113.3 113.1 9 Automotive products 2.98 109.8 107.2 110.7 111.2 111.6 110.4 108.9 110.4 110.4 111.6 107.4 104.2 110.2 111.6 10 Autos and trucks 1.79 103.0 101.0 105.7 106.2 106.5 103.4 102.2 102.7 102.8 106.0 98.7 95.0 103.1 104.7 11 Autos, consumer 1.16 93.2 95.1 97.9 98.3 99.4 95.0 93.4 93.7 92.8 92.7 85.1 84.0 89.7 95.6 12 Trucks, consumer .63 121.2 111.9 120.1 120.9 119.6 119.0 118.5 119.3 121.5 130.8 124.1 115.4 127.8 121.5 13 Auto parts and allied goods 1.19 120.1 116.5 118.1 118.6 119.3 121.0 118.9 122.1 121.9 120.0 120.6 118.1 121.1 122.1 14 Home goods 3.91 114.8 111.6 114.9 114.4 113.7 115.0 114.1 112.7 116.4 114.6 114.7 116.9 115.8 114.3 15 Appliances, A/C and TV 1.24 136.2 132.7 136.3 132.9 131.9 135.9 133.2 131.0 140.9 138.7 138.0 140.5 137.4 137.2 16 Appliances and TV 1.19 137.5 134.8 137.7 134.1 133.4 136.8 134.0 131.8 143.0 140.6 140.1 142.2 138.4 138.2 17 Carpeting and furniture .96 117.6 111.9 115.5 116.8 117.8 118.5 118.6 118.0 119.3 117.5 118.8 118.1 118.1 114.1 18 Miscellaneous home goods 1.71 97.8 96.3 99.1 99.8 98.2 98.1 97.8 96.6 97.2 95.7 95.6 99.3 99.0 97.9 19 Nondurable consumer goods 18.63 120.2 116.1 117.3 118.3 118.9 120.3 119.9 120.9 120.9 120.2 120.7 121.0 121.8 122.1 20 Consumer staples 15.29 125.0 120.0 121.1 122.2 122.7 124.3 124.4 125.7 125.9 125.4 126.3 126.7 127.4 127.7 21 Consumer foods and tobacco 7.80 126.2 122.1 122.7 123.2 124.0 126.0 125.5 126.8 126.9 126.6 127.7 128.2 127.6 129.1 22 Nonfood staples 7.49 123.9 117.8 119.4 121.3 121.4 122.7 123.3 124.8 125.0 124.3 125.0 125.4 127.5 126.5 23 Consumer chemical products .... 2.75 137.4 129.6 131.0 134.2 131.1 134.7 133.7 138.1 139.0 138.3 140.4 141.3 143.3 142.7 24 Consumer paper products 1.88 138.4 130.8 130.1 131.7 133.9 136.5 139.0 140.5 143.0 141.2 140.7 140.0 141.5 141.8 25 Consumer energy 2.86 101.4 98.1 101.3 102.1 104.0 102.2 103.0 101.6 99.7 99.8 100.0 100.5 103.0 100.7 26 Consumer fuel 1.44 89.3 82.7 86.0 91.5 92.5 91.2 91.1 89.5 87.4 88.5 88.1 88.8 89.9 87.7 27 Residential utilities 1.42 113.7 113.8 116.9 113.0 115.7 113.4 115.1 113.9 112.2 111.2 112.1 112.4 116.3 113.9 Equipment 28 Business and defense equipment 18.01 139.6 127.5 131.5 133.1 134.7 136.1 137.9 113399..99 114411..44 143.5 144.1 114444..11 114444..66 114433..99 29 Business equipment 14.34 134.9 123.0 127.1 128.5 130.4 131.2 133.3 135.5 137.0 139.1 139.2 139.1 139.8 138.4 30 Construction, mining, and farm .... 2.08 66.6 58.5 60.6 63.5 64.6 66.7 66.3 66.6 68.9 68.1 67.9 69.5 68.2 68.5 31 Manufacturing 3.27 109.4 99.0 101.9 104.3 106.7 107.7 108.5 109.7 110.6 113.4 113.3 112.7 112.4 111.5 32 Power 1.27 79.2 71.6 73.0 74.5 74.9 76.3 76.7 79.8 80.3 80.3 82.4 83.7 83.8 84.5 33 Commercial 5.22 209.2 190.1 194.9 196.3 199.6 202.5 208.7 212.1 213.5 216.5 216.9 216.4 217.1 214.5 34 Transit 2.49 98.6 94.0 101.7 100.1 99.9 94.5 93.2 95.3 97.6 100.6 99.3 98.5 102.9 100.9 35 Defense and space equipment 3.67 157.9 145.5 148.8 151.3 151.9 155.6 156.0 157.2 158.5 160.7 163.4 163.5 163.3 165.3 Intermediate products 36 Construction supplies 5.95 114.0 106.7 111.2 112.4 113.9 113.7 113.1 114.3 114.3 115.3 114.7 114.6 115.7 114.7 37 Business supplies 6.99 134.2 126.9 129.3 130.0 130.5 130.9 133.7 134.9 137.8 136.9 134.9 136.1 137.1 138.0 38 General business supplies 5.67 137.9 130.0 132.3 133.5 134.1 134.0 137.7 138.4 142.0 141.3 138.7 140.1 140.9 141.4 39 Commercial energy products 1.31 118.0 113.1 116.2 114.7 114.8 117.4 116.2 119.5 119.5 117.4 118.2 118.8 120.4 122.9 Materials 40 Durable goods materials 20.50 122.3 114.2 118.1 120.1 120.6 121.6 121.7 122.4 123.5 124.4 124.0 123.7 123.9 123.4 41 Durable consumer parts 4.92 98.0 93.7 97.3 97.0 97.4 97.7 96.5 97.2 97.5 99.0 98.8 98.9 99.1 99.8 42 Equipment parts 5.94 164.5 149.2 152.6 157.5 158.6 162.9 162.9 164.8 168.6 170.1 169.9 168.6 169.1 168.8 43 Durable materials n.e.c 9.64 108.6 103.1 107.3 108.7 109.0 108.3 109.1 109.1 108.8 109.2 108.5 108.7 108.7 107.4 44 Basic metal materials 4.64 86.4 84.5 86.4 88.1 87.5 88.4 87.7 87.2 86.5 85.6 85.0 84.8 85.2 84.0 45 Nondurable goods materials 10.09 111.2 109.1 110.3 111.2 111.8 111.3 111.4 111.2 111.6 111.6 111.4 111.2 110.7 110.7 46 Textile, paper, and chemical materials 7.53 111.6 109.5 111.0 112.0 112.1 111.7 111.8 112.0 111.8 112.5 112.3 111.5 110.5 110.1 47 Textile materials 1.52 101.5 104.4 105.5 105.9 105.7 103.4 104.4 102.1 103.2 104.5 99.2 98.5 93.7 91.2 48 Pulp and paper materials 1.55 126.5 124.8 125.5 125.5 123.9 128.0 126.6 127.6 128.5 127.0 127.7 126.2 125.1 127.2 49 Chemical materials 4.46 109.9 105.9 107.9 109.5 110.3 108.9 109.2 110.0 109.1 110.1 111.5 110.8 111.1 110.6 50 Miscellaneous nondurable materials .. 2.57 109.8 108.0 108.4 108.8 110.8 110.0 110.0 108.7 110.8 109.0 108.4 109.9 111.1 112.1 51 Energy materials 11.69 104.0 101.3 104.2 103.3 104.5 104.6 105.3 106.0 106.0 105.5 105.5 99.9 101.5 102.4 52 Primary energy 7.57 107.5 103.0 107.3 106.9 107.9 107.9 108.9 110.1 110.7 109.3 110.0 101.4 104.1 106.0 53 Converted fuel materials 4.12 97.6 98.2 98.4 96.6 98.2 98.4 98.9 98.5 97.3 98.5 97.2 97.1 96.8 96.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • August 1985 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1983 1984 SIC 1984 GGrroouuppiinngg code por- avg. tion Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Index (1977 = 100) MAJOR INDUSTRY 15.79 110.9 108.0 111.6 109.4 110.4 110.4 111.7 112.7 112.9 111.9 112.1 108.0 110.1 109.9 9.83 110.9 105.4 110.9 109.4 109.6 109.8 111.7 113.5 114.8 113.0 113.6 107.2 108.8 108.9 3 Utilities 5.% 110.9 112.2 112.7 109.4 111.6 111.4 111.6 111.4 109.8 110.0 109.7 109.4 112.1 111.6 84.21 123.9 116.8 119.6 121.0 122.0 122.8 123.2 124.1 125.4 125.9 125.6 125.5 126.0 125.8 35.11 122.5 117.5 119.5 121.0 121.6 121.9 122.3 123.2 123.9 123.2 123.1 123.3 123.8 123.4 4499..1100 112244..88 111166..33 111199..66 112211..00 112222..22 112233..33 123.8 124.7 126.4 127.7 127.2 127.0 127.5 127.4 Mining 1 Metal 10 .50 77.0 68.2 74.2 79.6 83.7 81.3 80.0 79.0 79.6 72.2 73.6 75.3 75.5 69.3 8 Coal 11.12 1.60 127.6 113.0 124.1 128.1 130.7 128.1 130.8 137.9 141.7 136.4 144.2 102.0 113.1 116.2 9 Oil and gas extraction 13 7.07 109.1 105.8 110.3 106.9 106.0 106.8 109.2 110.2 110.9 110.2 109.2 110.1 109.8 109.8 10 Stone and earth minerals 14 .66 116.1 109.7 112.7 113.5 115.9 119.5 117.3 117.0 118.3 118.4 117.6 114.2 115.3 113.2 Nondurable manufactures 11 Foods 20 7.96 127.1 121.7 123.4 124.4 125.5 126.8 126.7 127.4 127.8 127.7 128.2 129.1 128.7 129.0 12 Tobacco products 21 .62 100.7 101.7 100.8 100.4 98.0 99.7 99.2 102.0 100.9 97.3 99.6 103.1 102.7 107.4 13 Textile mill products 22 2.29 103.7 105.5 106.8 107.6 108.7 106.9 107.0 105.0 105.7 103.5 100.9 100.3 97.1 94.7 14 Apparel products 23 2.79 102.8 101.7 104.1 104.7 104.6 106.1 104.2 102.9 102.3 101.3 100.1 100.5 101.1 102.5 15 Paper and products 26 3.15 127.3 125.3 125.9 126.1 126.0 127.3 126.5 127.2 128.2 128.2 128.9 127.6 127.7 128.8 16 Printing and publishing 27 4.54 147.9 137.8 139.7 141.6 143.5 144.1 148.2 149.4 152.3 151.5 148.8 149.5 153.5 151.2 17 Chemicals and products 28 8.05 121.7 115.2 118.2 120.1 120.3 119.9 119.5 122.1 122.9 122.0 124.2 123.5 124.3 123.4 18 Petroleum products 29 2.40 87.4 80.0 86.5 91.3 89.8 88.7 88.3 88.4 87.0 87.5 85.7 85.4 86.2 84.7 19 Rubber and plastic products 30 2.80 143.2 138.1 137.6 138.7 140.7 140.1 143.5 144.9 146.0 144.5 144.1 146.0 146.6 146.6 20 Leather and products 31 .53 76.7 82.5 79.3 82.4 81.7 82.0 78.8 77.3 77.0 74.2 73.4 70.9 71.5 71.4 Durable manufactures 21 Lumber and products 24 2.30 109.1 105.2 106.7 108.1 109.5 UO.O 108.3 109.8 107.9 109.4 110.4 110.2 109.5 109.4 22 Furniture and fixtures 25 1.27 136.7 125.5 128.1 132.2 132.5 132.9 138.3 138.6 139.4 140.0 140.9 139.9 139.8 138.0 23 Clay, glass, stone products 32 2.72 112.3 104.3 108.5 111.0 111.3 112.0 113.2 112.5 113.8 113.7 112.6 113.3 113.6 111.8 24 Primary metals 33 5.33 82.4 79.3 84.3 85.1 83.6 84.2 82.8 80.4 80.6 84.0 82.9 81.3 80.9 78.4 25 Iron and steel 331.2 3.49 73.5 71.0 77.9 78.1 75.6 76.0 74.3 71.0 69.0 74.6 73.6 71.0 71.1 68.9 26 Fabricated metal products 34 6.46 102.8 96.6 97.2 99.1 102.1 101.5 101.9 103.3 103.7 104.1 104.8 104.8 105.4 105.9 27 Nonelectrical machinery 35 9.54 142.0 128.9 131.6 133.4 136.5 138.9 141.9 143.7 146.1 147.8 146.5 146.6 145.8 144.6 28 Electrical machinery 36 7.15 172.4 159.1 163.0 164.6 165.9 169.2 169.2 171.4 175.3 176.2 176.8 178.4 178.9 180.2 29 Transportation equipment 37 9.13 113.6 107.9 112.1 112.3 112.3 112.0 111.2 112.4 114.2 116.2 114.3 113.4 116.0 117.8 30 Motor vehicles and parts 371 5.25 105.6 101.1 106.5 106.0 106.5 103.6 103.4 104.3 105.4 108.3 104.6 103.1 107.5 109.5 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 124.4 117.0 119.6 120.8 120.2 123.4 121.6 123.4 126.0 126.9 127.5 127.3 127.5 112299..00 32 Instruments 38 2.66 136.9 127.0 130.3 132.6 135.3 135.8 135.1 138.0 139.4 139.8 140.2 138.6 138.6 138.9 33 Miscellaneous manufactures 39 1.46 98.0 96.8 98.7 99.6 96.8 98.3 98.8 96.4 99.7 97.8 95.9 98.6 98.6 97.2 Utilities 44..1177 116.8 117.9 117.3 113.8 116.8 117.2 117.7 118.0 116.1 116.8 116.2 116.8 111188..77 117.5 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 35 Products, total 596.0 745.6 706.2 725.6 731.0 738.8 740.1 743.8 749.5 748.1 752.4 749.2 753.7 759.2 756.5 36 Final 472.7 593.7 563.2 577.6 582.7 589.2 590.5 592.6 596.7 593.7 598.0 596.8 600.4 605.2 601.8 37 Consumer goods. 309.2 356.5 346.9 352.6 355.5 358.7 361.0 358.0 357.7 355.0 354.1 352.5 355.5 359.0 360.0 38 Equipment 163.5 237.6 216.5 225.2 227.4 230.8 229.7 234.9 239.4 239.1 244.3 244.8 245.4 246.7 242.3 39 Intermediate 123.3 151.8 142.9 147.8 148.1 149.5 149.5 151.0 152.7 154.3 154.3 152.3 153.2 154.0 154.6 A A major revision of the industrial production index and the capacity (July 1985), pp. 487-501. The revised indexes for January through June 1985 will utilization rates was released in July 1985. See "A Revision of the Index of be shown in the September BULLETIN. Industrial Production" and accompanying tables that contain revised indexes NOTE. These data also appear in the Board's G. 12.3 (414) release. For address, (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 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 11998822 11998833 11998844 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar/ Apr. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,000 1,605 1,682 1,591 1,542 1,517 1,477 1,616 1,599 1,635 1,624 1,741 1,704 2 1-family 546 902 922 864 853 866 827 846 843 903 927 993 948 3 2-or-more-family 454 703 759 727 689 651 650 770 756 732 697 748 756 4 Started 1,062 1,703 1,749 1,730 1,590 1,669 1,564 1,600 1,630 1,849 1,647 1,889 1,927 5 1-family 663 1,067 1,084 996 962 1,009 979 1,043 1,112 1,060 1,135 1,168 1,159 6 2-or-more-family 400 635 665 734 628 660 585 557 518 789 512 721 768 7 Under construction, end of period' 720 1,003 1,051 1,100 1,091 1,088 1,081 1,077 1,073 1,071' 1,066 1,063 1,093 8 1-family 400 524 556 582 574 568 571 574 579 572 580 578 587 9 2-or-more-family 320 479 494 518 517 520 510 503 495 499' 485 484 505 10 Completed 1,005 1,390 1,652 1,699 1,681 1,657 1,614 1,587 1,635 1,719' 1,794 1,686 1,635 11 1-family 631 924 1,025 1,062 1,035 1,040 972 1,001 985 1,107' 1,082 1,042 1,074 12 2-or-more-family 374 466 627 637 646 617 642 586 650 612' 712 644 561 13 Mobile homes shipped 240 296 295 301 302 282 302 291 282 273 276 283 287 Merchant builder activity in 1-family units 14 Number sold 413 622 639 615 557 670 652 596 604 634' 659 695 612 15 Number for sale, end of period1 255 304 358 340 343 343 346 349 356 356 360 360 362 PPrriiccee ((tthhoouussaannddss ooff ddoollllaarrss))22 MMeeddiiaann 1166 UUnniittss ssoolldd 69.3 75.5 80.0 80.7 82.0 81.3 80.1 82.5 78.3 82.5' 82.8 84.3 86.2 AAvveerraaggee 1177 UUnniittss ssoolldd 83.8 89.9 97.5 97.1 96.9 101.3 95.7 101.4 96.3 98.3' 97.2 101.2 105.8 EXISTING UNITS (1-family) 18 Number sold 1,991 2,719 2,868 2,790 2,770 2,730 2,740 2,830 2,870 3,000 2,880 3,030 3,040 Price of units sold (thousands of dollars)2 19 Median 67.7 69.8 72.3 74.2 73.5 71.9 71.9 71.9 72.1 73.8 73.5 74.2 74.5 20 Average 80.4 82.5 85.9 87.9 87.6 85.4 86.2 85.1 85.9 87.7 87.2 88.6 89.7 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 230,068 262,167 309,740 314,223 318,031 318,685 312,849 308,111 307,579 316,356 322,667 322,358 325,744 V Private 179,090 211,369 253,924 258,245 261,165 260,871 256,121 251,607 251,283 258,579 264,501 263,926 267,052 73 Residential 74,808 111,727 133,519 137,818 138,926 137,106 131,143 125,906 122,727 128,449 133,158 134,700 133,950 24 Nonresidential, total 104,282 99,642 120,405 120,427 122,239 123,765 124,978 125,701 128,556 130,130 131,343 129,226 133,102 Buildings 75 Industrial 17,346 12,863 14,426 13,784 14,613 14,917 14,867 15,287 15,353 15,075 1155,,661155 14,647 15,423 76 Commercial 37,281 35,787 49,273 48,436 49,496 50,861 53,509 54,579 56,661 58,456 58,987 59,344 60,657 2277 Other 10,507 11,660 12,725 12,744 12,059 12,079 12,111 11,975 12,396 11,847 12,121 11,193 12,546 2288 Public utilities and other 39,148 39,332 43,981 45,463 46,071 45,908 44,491 43,860 44,146 44,752 44,620 44,042 44,476 79 Public 50,977 50,798 55,818 55,979 56,866 57,814 56,729 56,504 56,296 57,777 58,166 58,432 58,693 30 2,205 2,544 2,837 2,345 2,851 3,508 2,890 3,082 2,974 3,254 3,324 3,206 3,198 31 13,428 14,225 16,881 17,136 17,322 17,209 16,794 17,458 17,588 18,133 18,283 18,763 18,880 3? Conservation and development 5,029 4,822 4,586 4,520 4,520 4,890 4,591 5,073 4,555 4,592 4,647 4,684 4,305 33 Other 30,315 29,207 31,514 31,978 32,173 32,207 32,454 30,891 31,179 31,798 31,912 31,779 32,310 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 • August 1985 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted C m h o an n g th e s f e ro ar m li e 1 r 2 Change ( a f t r o a m nn u 3 a m l o ra n t t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm MMMaaayyy 1984 1985 1985 111999888555 11998844 11998855 (((111999666777 MMaayy MMaayy === 111000000)))''' June Sept. Dec. Mar. Jan/ Feb/ Mar. Apr. May CONSUMER PRICES2 1 All items 4.2 3.7 3.2 4.5 3.0 4.1 .2 .3 .5 .4 .2 321.3 ? Food 3.1 2.5 -.5 3.9 3.7 2.6 .2 .5 .0 -.2 -.1 308.9 3 Energy items 1.1 1.3 .3 .1 -.7 -.8 -.8 -1.4 1.9 1.8 .3 431.7 4 All items less food and energy 5.1 4.5 4.8 5.3 3.5 5.5 .4 .6 .4 .3 .3 312.8 5 Commodities 4.9 2.8 3.9 3.8 .9 6.6 .5 .8 .3 .0 -.2 259.6 6 Services 5.3 5.5 5.2 6.2 5.0 5.0 .4 .4 .4 .4 .7 372.9 PRODUCER PRICES 7 Finished goods 2.4 1.1 -.4 .0 1.1 1.0 .0 .0 .2 .3 .2 294.2 8 Consumer foods 3.5 -.7 -7.5 4.5 3.3 -2.4 -.5 .0 -.2 -1.0 -1.1 269.7 9 Consumer energy -.8 -1.9 5.0 -19.7 5.6 -21.0 -2.6 -2.3 -.9 5.8 3.4 747.9 10 Other consumer goods 2.7 2.4 .8 2.5 -.2 6.6 .6 .4 .6 -.2 .2 251.5 11 Capital equipment 2.6 2.0 2.2 2.3 -1.1 6.5 .8 .3 .4 .0 .0 299.8 12 Intermediate materials3 3.4 .3 2.7 -1.1 1.2 -2.5 -.1 -.5 -.1 .3 .3 326.4 13 Excluding energy 3.5 .7 2.0 .9 1.5 -1.0 .0 -.2 -.1 .0 .2 305.9 Crude materials 14 Foods 3.9 -11.0 -19.2 -1.7 10.6 -24.1 -2.3 -1.8 -2.8 -3.0 -2.4 237.0 15 Energy -.6 -3.0 4.0 .4 -7.6 -12.7 -2.0 -.3 -1.0 .1 2.0 763.1 16 Other 12.2 -9.1 14.3 -15.3 -10.7 -13.4 -1.3 -4.4 2.3 2.1 -1.5 252.4 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. 1984 1985 AAccccoouunntt 11998822 11998833 11998844 Ql Q2 Q3 Q4 Qlr GROSS NATIONAL PRODUCT 1 3,069.3 3,304.8 3,662.8 3,553.3 3,644.7 3,694.6 3,758.7 3,810.6 By source 2 Personal consumption expenditures 1,984.9 2,155.9 2,341.8 2,276.5 2,332.7 2,361.4 2,396.5 2,446.5 3 245.1 279.8 318.8 310.9 320.7 317.2 326.3 334.8 4 757.5 801.7 856.9 841.3 858.3 861.4 866.5 877.3 5 982.2 1,074.4 1,166.1 1,124.4 1,153.7 1,182.8 1,203.8 1,234.4 6 Gross private domestic investment 414.9 471.6 637.8 623.8 627.0 662.8 637.8 646.8 7 441.0 485.1 579.6 550.0 576.4 591.0 601.1 606.1 8 349.6 352.9 425.7 398.8 420.8 435.7 447.7 450.9 9 142.1 129.7 150.4 142.2 150.0 151.4 157.9 162.9 10 Producers' durable equipment 207.5 223.2 275.3 256.7 270.7 284.2 289.7 288.0 11 Residential structures 91.4 132.2 153.9 151.2 155.6 155.3 153.5 155.2 12 Nonfarm 86.6 127.6 148.8 146.4 150.5 150.1 148.3 150.0 N Change in business inventories -26.1 -13.5 58.2 73.8 50.6 71.8 36.6 40.7 14 Nonfarm -24.0 -3.1 49.6 60.6 47.0 63.7 27.2 34.1 IS Net exports of goods and services 19.0 -8.3 -64.2 -51.5 -58.7 -90.6 -56.0 -74.5 16 348.4 336.2 364.3 358.9 362.4 368.6 367.2 360.7 17 Imports 329.4 344.4 428.5 410.4 421.1 459.3 423.2 435.2 18 Government purchases of goods and services 650.5 685.5 747.4 704.4 743.7 761.0 780.5 791.9 19 258.9 269.7 295.4 267.6 296.4 302.0 315.7 319.9 20 State and local 391.5 415.8 452.0 436.8 447.4 458.9 464.8 472.0 By major type of product 71 3,095.4 3,318.3 3,604.6 33,,447799..55 33,,559944..11 33,,662222..88 33,,772222..11 33,,777700..00 7? 1,276.7 1,355.7 1,542.9 1,498.0 1,544.8 1,549.1 1,579.8 1,583.8 73 499.9 555.3 655.6 632.3 647.9 654.7 687.7 677.1 74 Nondurable 776.9 800.4 887.3 865.7 896.9 894.4 892.1 906.7 ?5 1,510.8 1,639.3 1,763.3 1,713.7 1,742.6 1,783.3 1,813.7 1,857.2 26 Structures 281.7 309.8 356.5 341.6 357.2 362.1 365.2 369.6 77 Change in business inventories -26.1 -13.5 58.2 73.8 50.6 71.8 36.6 40.7 78 Durable goods -18.0 -2.1 30.4 34.9 18.2 41.7 26.7 29.0 29 Nondurable goods -8.1 -11.3 27.8 38.9 32.4 30.1 9.9 11.7 30 MEMO: Total GNP in 1972 dollars 1,480.0 1,534.7 1,639.3 1,610.9 1,638.8 1,645.2 1,662.4 1,663.5 NATIONAL INCOME 31 2,446.8 2,646.7 2,959.9 2,873.5 2,944.8 2,984.9 3,036.3 3,076.5 V Compensation of employees 1,864.2 1,984.9 2,173.2 2,113.4 2,159.2 2,191.9 2,228.1 2,272.7 33 1,568.7 1,658.8 1,804.1 1,755.9 1,793.3 1,819.1 1,848.2 1,882.8 34 Government and government enterprises 306.6 328.2 349.8 342.9 347.5 352.0 357.2 365.5 35 Other 1,262.2 1,331.1 1,454.2 1,413.0 1,445.8 1,467.1 1,490.9 1,517.3 36 Supplement to wages and salaries 295.5 326.2 369.0 357.4 365.9 372.8 380.0 389.8 37 Employer contributions for social insurance 140.0 153.1 173.5 169.4 172.4 174.7 177.5 183.6 38 Other labor income 155.5 173.1 195.5 188.1 193.5 198.1 202.5 206.3 39 111.1 121.7 154.4 154.9 149.8 153.7 159.1 159.8 40 Business and professional1 89.2 107.9 126.2 122.5 126.3 126.4 129.7 134.0 41 Farm1 21.8 13.8 28.2 32.5 23.4 27.3 29.4 25.7 42 Rental income of persons2 51.5 58.3 62.5 61.0 62.0 63.0 64.1 64.8 43 Corporate profits1 159.1 225.2 285.7 277.4 291.1 282.8 291.6 292.3 44 Profits before tax3 165.5 203.2 235.7 243.3 246.0 224.8 228.7 222.3 45 Inventory valuation adjustment -9.5 -11.2 -5.7 -13.5 -7.3 -.2 -1.6 .9 46 Capital consumption adjustment 3.1 33.2 55.7 47.6 52.3 58.3 64.5 69.1 47 260.9 256.6 284.1 266.8 282.8 293.5 293.4 287.0 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • August 1985 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1984 1985 AAccccoouunntt 11998822 11998833 1984 Q1 Q2 Q3 Q4 Q'r PERSONAL INCOME AND SAVING 2,584.6 2,744.2 3,012.1 2,920.5 2,984.6 3,047.3 3,096.2 3,143.8 2 Wage and salary disbursements 1,568.7 1,659.2 1,804.0 1,755.7 1,793.1 1,819.5 1,847.6 1,882.7 3 Commodity-producing industries 509.3 519.3 569.3 555.9 567.0 573.3 580.9 590.9 4 Manufacturing 382.9 395.2 433.9 424.6 432.2 436.4 442.4 447.9 5 Distributive industries 378.6 398.6 432.0 419.2 429.5 436.4 443.1 449.0 6 Service industries 374.3 413.1 452.9 437.9 449.3 457.3 466.9 477.4 7 Government and government enterprises 306.6 328.2 349.8 342.8 347.3 352.4 356.7 365.4 8 Other labor income 155.5 173.1 195.5 188.1 193.5 198.1 202.5 206.3 9 Proprietors' income1 111.1 121.7 154.4 154.9 149.8 153.7 159.1 159.8 10 Business and professional1 89.2 107.9 126.2 122.5 126.3 126.4 129.7 134.0 11 Farm1 21.8 13.8 28.2 32.5 23.4 27.3 29.4 25.7 12 Rental income of persons2 51.5 58.3 62.5 61.0 62.0 63.0 64.1 64.8 13 Dividends 66.5 70.3 77.7 75.0 77.2 78.5 80.2 81.4 366.6 376.3 433.7 403.9 425.6 449.3 456.1 456.0 15 Transfer payments 376.1 405.0 416.7 411.3 415.2 418.6 421.8 439.2 16 Old-age survivors, disability, and health insurance benefits... 204.5 221.6 237.3 232.1 235.2 238.2 243.5 249.6 17 LESS: Personal contributions for social insurance 111.4 119.6 132.5 129.6 131.8 133.4 135.2 146.4 18 EQUALS: Personal income 2,584.6 2,744.2 3,012.1 2,920.5 2,984.6 3,047.3 3,096.2 3,143.8 19 LESS: Personal tax and nontax payments 404.1 404.2 435.3 418.3 430.3 440.9 451.7 489.0 2,180.5 2,340.1 2,576.8 2,502.2 2,554.3 2,606.4 2,644.5 2,654.8 21 LESS: Personal outlays 2,044.5 2,222.0 2,420.7 2,349.6 2,409.5 2,442.3 2,481.5 2,536.2 22 EQUALS: Personal saving 136.0 118.1 156.1 152.5 144.8 164.1 163.0 118.6 MEMO Per capita (1972 dollars) 23 Gross national product 6,369.7 6,543.4 6,926.1 6,829.4 66,,993333..22 66,,994433..22 66,,999988..33 66,,998899..00 24 Personal consumption expenditures 4,145.9 4,302.8 4,488.7 4,426.5 4,502.3 4,498.4 4,527.1 4,575.7 25 Disposable personal income 4,555.0 4,670.0 4,939.0 4,865.0 4,930.0 4,965.0 4,996.0 4,965.0 26 Saving rate (percent) 6.2 5.0 6.1 6.1 5.7 6.3 6.2 4.5 GROSS SAVING 408.8 437.2 551.8 543.9 551.0 556.4 556.0 550.7 28 Gross private saving 524.0 571.7 674.8 651.3 660.2 689.4 698.2 662.1 29 Personal saving 136.0 118.1 156.1 152.5 144.8 164.1 163.0 118.6 30 Undistributed corporate profits1 29.2 76.5 115.4 107.0 115.3 118.4 120.8 122.5 31 Corporate inventory valuation adjustment -9.5 -11.2 -5.7 -13.5 -7.3 -.2 -1.6 .9 Capital consumption allowances 221.8 231.2 224466..22 223399..99 224444..11 224488..11 225522..88 225577..44 137.1 145.9 157.0 151.8 156.0 158.8 161.5 163.7 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -115.3 -134.5 -122.9 -107.4 -109.2 --113333..00 --114422..22 --111111..44 -148.2 -178.6 -175.8 -161.3 -163.7 -180.6 -197.8 -165.1 37 State and local 32.9 44.1 52.9 53.9 54.5 47.6 55.6 53.7 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 .0 408.3 437.7 544.4 546.1 542.0 543.4 546.1 542.6 40 Gross private domestic 414.9 471.6 637.8 623.8 627.0 662.8 637.8 646.8 -6.6 -33.9 -93.4 -77.7 -85.0 -119.4 -91.6 -104.2 -.5 .5 -7.4 2.2 -9.0 -13.0 -9.9 -8.1 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 1984' 1985 IItteemm ccrreeddiittss oorr ddeebbiittss 11998822'' 11998833'' 11998844'' QL Q2 Q3 Q4 QIP i1 Balance on current account -8,051 -40,790 -101,532 - - 1 1 9 8 , , 0 3 6 9 4 5 - - 2 2 4 4 , , 4 6 9 5 3 4 - - 3 3 2 5 , , 5 7 0 2 0 4 - - 2 2 5 2 , , 4 7 7 5 7 9 - - 2 2 9 9 , , 9 0 9 7 7 9 3 Merchandise trade balance2 -36,444 -62,012 -108,281 -25,569 -25,649 -32,507 -24,557 -29,437 4 Merchandise exports 211,198 200,745 220,316 53,753 54,677 55,530 56,355 55,811 5 Merchandise imports -247,642 -262,757 -328,597 -79,322 -80,326 -88,037 -80,912 -85,248 6 Military transactions, net -318 -163 -1,765 -346 -593 -250 -575 -89 7 Investment income, net3 29,493 25,401 19,109 8,234 3,618 3,256 4,003 2,626 8 Other service transactions, net 7,353 4,837 819 829 363 -123 -253 78 9 Remittances, pensions, and other transfers -2,633 -2,566 -2,891 -732 -710 -669 -782 -857 10 U.S. government grants (excluding military) -5,501 -6,287 -8,522 -1,480 -1,522 -2,207 -3,313 -2,318 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -6,131 -5,006 -5,516 -2,059 -1,353 -1,369 --773344 --779955 12 Change in U.S. official reserve assets (increase, -) -4,965 -1,196 -3,130 -657 -565 -799 -1,109 -233 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,371 -66 -979 -226 -288 -271 -194 -264 15 Reserve position in International Monetary Fund -2,552 -4,434 -995 -200 -321 -331 -143 281 16 Foreign currencies -1,041 3,304 -1,156 -231 44 -197 -772 -250 17 Change in U.S. private assets abroad (increase, -)3 -108,121 -48,842 -11,800 -2,260 -17,070 20,532 -13,003 -2,165 18 Bank-reported claims -111,070 -29,928 -8,504 -1,110 -20,186 17,725 -4,933 -285 19 Nonbank-reported claims 6,626 -6,513 6,266 1,289 1,908 2,099 970 n.a. 20 U.S. purchase of foreign securities, net -8,102 -7,007 -5,059 673 -756 -1,313 -3,663 -2,461 21 U.S. direct investments abroad, net3 4,425 -5,394 -4,503 -3,112 1,964 2,021 -5,377 581 22 Change in foreign official assets in the United States (increase, +) 3,672 5,795 3,424 -2,786 -224 -686 7,119 -11,402 23 U.S. Treasury securities 5,779 6,972 4,690 -275 -274 -575 5,814 -7,227 24 Other U.S. government obligations -694 -476 167 3 146 85 -67 -307 2.5 Other U.S. government liabilities4 684 552 453 233 555 -139 -197 -532 26 Other U.S. liabilities reported by U.S. banks -1,747 545 663 -2,147 328 430 2,052 -3,219 27 Other foreign official assets5 -350 -1,798 -2,549 -600 -979 -487 -483 -117 28 Change in foreign private assets in the United States (increase, +)3 90,775 78,527 93,895 22,063 41,816 3,825 26,191 27,923 29 U.S. bank-reported liabilities 65,922 49,341 31,674 11,348 20,970 -5,125 4,481 13,011 30 U.S. nonbank-reported liabilities -2,383 -118 4,284 4,520 4,566 -2,939 -1,863 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 7,052 8,721 22,440 1,396 6,485 5,058 9,501 2,677 32 Foreign purchases of other U.S. securities, net 6,392 8,636 12,983 1,494 506 1,603 9,380 9,522 33 Foreign direct investments in the United States, net3 13,792 11,947 22,514 3,305 9,289 5,228 4,692 2,713 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 32,821 11,513 24,660 4,763 1,889 10,997 7,013 16,669 36 --442222 --660066 --33,,117700 --44,,220000 -343 37 Statistical discrepancy in recorded data before seasonal adjustment 32,821 11,513 24,660 5,185 2,495 14,167 11,213 17,012 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -4,965 -1,196 -3,131 -657 -566 -799 --11,,111100 --223333 39 Foreign official assets in the United States (increase, +) 2,988 5,243 2,971 -3,019 -779 -547 7,316 -10,870 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) 7,291 -8,283 -4,143 -2,405 -2,097 -453 812 -2,013 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 585 194 190 41 44 4455 6611 1155 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 • August 1985 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1984 1985 IItteemm 11998811 11998822 11998833 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 233,677 212,193 200,486 18,411 18,395 19,142 19,401 17,853 18,446 17,779 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 261,305 243,952 258,048 26,783 27,331 25,933 28,297 27,985 28,129 28,295 3 Trade balance -27,628 -31,759 -57,562 -8,372 -8,936 -6,791 -8,896 -10,131 -9,683 -10,516 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Total 30,075 33,958 33,747 34,727 34,934 34,380 34,272 35,493 35,493 35,782 2 Gold stock, including Exchange Stabilization Fund1 11,151 11,148 11,121 11,096 11,096 11,095 11,093 11,093 11,091 11,091 3 Special drawing rights2,3 4,095 5,250 5,025 5,693 5,641 5,693 5,781 5,973 5,971 6,163 4 Reserve position in International Monetary Fund2 5,055 7,348 11,312 11,675 11,541 11,322 11,097 11,386 11,382 11,370 5 Foreign currencies4 9,774 10,212 6,289 6,263 6,656 6,270 6,301 7,041 7,049 7,158 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Deposits 505 328 190 392 253 244 331 253 348 204 Assets held in custody 2 U.S. Treasury securities1 104,680 112,544 117,670 117,433 118,267 117,330 115,179 113,532 115,184 116,989 3 Earmarked gold2 14,804 14,716 14,414 14,265 14,265 14,261 14,260 14,264 14,264 14,265 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 Data1 Millions of dollars, end of period 1984 1985 - Oct. Nov. Dec. Jan. Feb. Mar. Apr .p All foreign countries 1 Total, all currencies 462,847 469,712 477,090 448,499 452,914 452,205 445,041 452,88y 462,098 460,440 2 Claims on United States 63,743 91,805 115,542 109,292 112,815 113,435 115,501 119,012' 118,010 121,388 3 Parent bank 43,267 61,666 82,026 75,736 77,958 78,151 79,318 84,062' 84,892 86,472 4 Other banks in United States2 1 in Ait. ii 12,357' 13,313' 13,664' 13,686' 13,737' 13,092 14,213 5 Nonbanks2 21,199' 21,544' 21,620' 22,497' 21,213' 20,026 20,703 6 Claims on foreigners 378,954 358,493 342,689 319,075 319,431 318,710 309,193 314,271 323,676 318,991 7 Other branches of parent bank 87,821 91,168 96,004 90,821 91,313 94,738 87,416 89,303 95,002 91,329 8 Banks 150,763 133,752 117,668 102,258 103,050 100,307 99,806 104,278 105,163 104,303 9 Public borrowers 28,197 24,131 24,517 23,053 22,907 22,872 22,441' 22,219' 22,492 22,844 10 Nonbank foreigners 112,173 109,442 107,785 102,943 102,161 100,793 99,53C 98,471' 101,019 100,515 11 Other assets 20,150 19,414 18,859 20,132 20,668 20,060 20,347 19,60C 20,412 20,061 12 Total payable in U.S. dollars 350,735 361,982 371,508 340,675 345,511 349,342 343,461 351,796' 354,579 351,292 13 Claims on United States 62,142 90,085 113,436 106,651 110,442 111,468 113,250 116,708' 115,645 118,798 14 Parent bank 42,721 61,010 80,909 74,366 76,763 77,271 78,392 83,052' 83,810 85,339 15 Other banks in United States2 12,107' 13,121' 13,50c 13,493' 13,464' 12,790 13,856 16 Nonbanks2 20,178' 20,558' 20,697' 21,365' 20,192' 19,045 19,603 17 Claims on foreigners 276,937 259,871 247,406 223,376 224,251 227,303 219,768 224,738 228,892 222,693 18 Other branches of parent bank 69,398 73,537 78,431 73,472 74,600 78,300 72,391 74,367 79,241 75,085 19 Banks 122,110 106,447 93,332 76,915 77,096 76,851 75,691 79,122 78,660 76,874 20 Public borrowers 22,ill 18,413 17,890 17,337 17,374 17,160 16,994' 16,754' 17,010 16,976 21 Nonbank foreigners 62,552 61,474 60,977 55,652 55,181 54,992 54,692' 54,495' 53,981 53,758 22 Other assets 11,656 12,026 10,666 10,648 10,818 10,571 10,443 10,35C 10,042 9,801 United Kingdom 23 Total, all currencies 157,229 161,067 158,732 147,562 149,377 144,385 146,130 149,534 150,705 148,711 24 Claims on United States 11,823 27,354 34,433 28,952 29,502 27,731 28,783 31,910 29,675 29,497 25 Parent bank 7,885 23,017 29,111 23,283 23,773 21,918 22,296 25,313 23,250 22,803 2 2 7 6 O N t o h n e b r a b n a k n s k 2 s in United States2 1 1 mO 5,322 4 1 , , 4 2 5 1 5 4 4 1 , , 2 4 4 8 5 4 4 1 , , 3 4 8 2 4 9 4 1 , , 9 5 4 40 7 5 1 , , 0 5 3 6 6 1 4 1 , , 9 5 1 1 4 1 5 1 , , 0 6 4 4 5 9 28 Claims on foreigners 138,888 127,734 119,280 113,524 114,264 111,772 112,284 112,937 115,889 114,122 29 Other branches of parent bank 41,367 37,000 36,565 37,638 37,395 37,897 36,367 35,381 35,857 34,469 30 Banks 56,315 50,767 43,352 38,696 39,262 37,443 39,063 40,961 40,812 41,253 31 Public borrowers 7,490 6,240 5,898 5,441 5,424 5,334 5,345 5,306 5,186 4,959 32 Nonbank foreigners 33,716 33,727 33,465 31,749 32,183 31,098 31,509 31,289 34,034 33,441 33 Other assets 6,518 5,979 5,019 5,086 5,611 4,882 5,063 4,687 5,141 5,092 34 Total payable in U.S. dollars 115,188 123,740 126,012 113,437 114,895 112,809 112,953 116,232 114,122 111,497 35 Claims on United States 11,246 26,761 33,756 27,917 28,610 26,924 27,807 30,945 28,839 28,570 36 Parent bank 7,721 22,756 28,756 22,825 23,378 21,551 21,960 24,911 22,910 22,472 37 Other banks in United States2 1 1,113 1,437 1,363 1,496 1,498 1,466 1,576 38 Nonbanks2 3,979 3,795 4,010 4,351 4,536 4,463 4,522 39 Claims on foreigners 99,850 92,228 88,917 82,456 82,971 82,889 82,161 82,268 82,437 79,938 40 Other branches of parent bank 35,439 31,648 31,838 32,461 32,669 33,551 31,899 31,099 31,331 29,489 41 Banks 40,703 36,717 32,188 27,093 27,290 26,805 27,465 28,523 27,982 27,808 42 Public borrowers 5,595 4,329 4,194 4,063 4,094 4,030 4,021 3,964 3,804 3,533 43 Nonbank foreigners 18,113 19,534 20,697 18,839 18,918 18,503 18,776 18,682 19,320 19,108 44 Other assets 4,092 4,751 3,339 3,064 3,314 2,996 2,985 3,019 2,846 2,989 Bahamas and Caymans 45 Total, all currencies 149,108 145,156 152,083 138,981 141,610 146,811 141,834 144,665 147,041 145,108 46 Claims on United States 46,546 59,403 75,309 71,911 75,655 77,296 76,856 76,446' 78,886 79,162 47 Parent bank 31,643 34,653 48,720 45,641 48,202 49,449 48,892 50,043' 53,937 53,008 48 Other banks in United States2 1 10,479' 11,043' 11,544' 11,326' 11,305' 10,761 11,659 49 Nonbanks2 15,791' 16,410' 16,303' 16,638' 15,098' 14,188 14,495 50 Claims on foreigners 98,057 81,450 72,868 63,031 62,024 65,598 61,204 64,408 64,339 62,164 51 Other branches of parent bank 12,951 18,720 20,626 15,117 13,837 17,682 14,447 16,330 15,780 14,716 52 Banks 55,151 42,699 36,842 30,263 30,529 30,225 29,165 30,832 31,386 29,887 53 Public borrowers 10,010 6,413 6,093 6,057 6,075 6,089 6,162' 6,081' 6,349 6,683 54 Nonbank foreigners 19,945 13,618 12,592 11,594 11,583 11,602 11,43C 11,165' 10,824 10,878 55 Other assets 4,505 4,303 3,906 4,039 3,931 3,917 3,774 3,811' 3,816 3,782 56 Total payable in U.S. dollars 143,743 139,605 145,641 133,002 136,211 141,562 137,090 139,543 141,543 139,938 1. Beginning with June 1984 data, reported claims held by foreign branches 2. Data for assets vis-a-vis other banks in the United States and vis-a-vis have been reduced by an increase in the reporting threshold for "shell" branches nonbanks are combined for dates before June 1984. from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • August 1985 3.14 Continued 1984 1985 Oct. Nov. Dec. Jan. Feb. Mar. Apr.? All foreign countries 57 Total, all currencies 462,847 469,712 477,090 448,499 452,914 452,205 445,041 452,883' 462,098 460,440 58 Negotiable CDs3 n.a. n.a. n.a. 38,520 37,915 37,725 38,804 41,798 40,889 38,940 59 To United States 137,767 179,015 188,070 139,567 138,498' 146,955 143,680 140,914' 145,383 145,078 60 Parent bank 56,344 75,621 81,261 74,757 70,284' 78,111 75,230 72,338' 75,400 75,353 61 Other banks in United States 19,197 33,405 29,453 18,967' 18,679' 18,409' 18,125' 17,831' 18,073 19,445 62 Nonbanks 62,226 69,989 77,356 45,843' 49,535' 50,435' 50,325' 50,745' 51,910 50,280 63 To foreigners 305,630 270,853 269,685 248,164 253,925 246,894 241,359 248,381' 253,901 254,869 64 Other branches of parent bank 86,396 90,191 90,615 89,492 90,681 93,206 87,722 89,872 94,564 91,856 65 Banks 124,906 96,860 92,889 82,235 86,822 78,203 79,291 84,013 82,611 83,647 66 Official institutions 25,997 19,614 18,896 19,501 20,883 20,281 19,484 19,356 20,831 21,730 67 Nonbank foreigners 68,331 64,188 68,845 56,936 55,539 55,204 54,862 56,140' 55,895 57,636 68 Other liabilities 19,450 19,844 19,335 22,248 22,576 20,631 21,198 20,790' 21,925 21,553 69 Total payable in U.S. dollars 364,447 379,270 388,291 356,601 361,875 365,859 357,853 366,054' 369,049 365,269 70 Negotiable CDs3 n.a. n.a. n.a. 36,102 35,608 35,227 36,295 39,544 38,197 35,958 71 To United States 134,700 175,528 184,305 135,2%' 134,303 142,943 139,811 137,154' 141,028 140,300 72 Parent bank 54,492 73,295 79,035 72,246 67,761' 75,626 72,892 70,084' 72,959 72,721 73 Other banks in United States 18,883 33,040 28,936 18,313' 18,128' 17,935' 17,587' 17,302' 17,524 18,790 74 Nonbanks 61,325 69,193 76,334 44,737' 48,414' 49,382' 49,332' 49,768' 50,545 48,789 75 To foreigners 217,602 192,510 194,139 174,107 180,841 177,638 171,479 178,745 179,593 178,787 76 Other branches of parent bank 69,299 72,921 73,522 72,204 74,552 77,222 72,648 74,926 79,027 76,024 77 Banks 79,594 57,463 57,022 46,227' 50,509 45,131 44,948 48,734 44,812 45,207 78 Official institutions 20,288 15,055 13,855 14,850 16,068 15,773 14,861 14,653 16,049 17,138 79 Nonbank foreigners 48,421 47,071 51,260 40,826 39,712 39,512 39,022 40,432 39,705 40,418 80 Other liabilities 12,145 11,232 9,847 11,0% 11,123 10,051 10,268 10,611' 10,231 10,224 United Kingdom 81 Total, all currencies 157,229 161,067 158,732 147,562 149,377 144,385 146,130 149,534 150,705 148,711 82 Negotiable CDs3 n.a. n.a. n.a. 34,948 34,269 34,413 35,455 38,281 37,350 35,326 83 To United States 38,022 53,954 55,799 26,558 25,338 25,250 27,757 23,439 23,982 23,920 84 Parent bank 5,444 13,091 14,021 16,598 15,060' 14,651 16,714 13,763 14,509 13,969 85 Other banks in United States 7,502 12,205 11,328 3,418' 3,074' 3,125' 3,569' 2,948' 2,918 2,665 86 Nonbanks 25,076 28,658 30,450 6,542' 7,204' 7,474' 7,474' 6,728' 6,555 7,286 87 To foreigners 112,255 99,567 95,847 77,985 81,217 77,424 75,039 80,418' 80,722 80,977 88 Other branches of parent bank 16,545 18,361 19,038 21,023 20,846 21,631 20,199 22,146 23,699 21,951 89 Banks 51,336 44,020 41,624 32,436 34,739 30,436 31,216 33,789 32,003 32,259 90 Official institutions 16,517 11,504 10,151 9,650 10,505 10,154 9,084 9,374 10,305 11,590 91 Nonbank foreigners 27,857 25,682 25,034 14,876 15,127 15,203 14,540 15,109' 14,715 15,177 92 Other liabilities 6,952 7,546 7,086 8,071 8,553 7,298 7,879 7,3%' 8,651 8,488 93 Total payable in U.S. dollars 120,277 130,261 131,167 118,103 119,287 117,497 117,198 120,623 117,984 116,128 94 Negotiable CDs3 n.a. n.a. n.a. 33,703 33,168 33,070 34,084 37,033 35,719 33,763 95 To United States 37,332 53,029 54,691 25,178 24,024 24,105 26,587 22,386 22,481 22,219 96 Parent bank 5,350 12,814 13,839 16,209 14,688' 14,339 16,349 13,506 14,129 13,507 97 Other banks in United States 7,249 12,026 11,044 3,174' 2,862' 2,980' 3,420' 2,804' 2,748 2,500 98 Nonbanks 24,733 28,189 29,808 5,795' 6,474' 6,786' 6,818' 6,076' 5,604 6,212 99 To foreigners 79,034 73,477 73,279 55,482 58,163 56,923 52,954 57,654 56,327 56,535 100 Other branches of parent bank 12,048 14,300 15,403 17,600 17,562 18,294 16,940 18,772 20,127 18,513 101 Banks 32,298 28,810 29,320 18,309 20,262 18,356 17,889 20,022 17,191 17,497 102 Official institutions 13,612 9,668 8,279 8,306 9,072 8,871 7,748 7,854 8,734 9,989 103 Nonbank foreigners 21,076 20,699 20,277 11,267 11,267 11,402 10,377 11,006 10,275 10,536 104 Other liabilities 3,911 3,755 3,197 3,740 3,932 3,399 3,573' 3,550 3,457 3,611 Bahamas and Caymans 105 Total, all currencies 149,108 145,156 152,083 138,981 141,610 146,811 141,834 144,665 147,041 145,108 106 Negotiable CDs3 n.a. n.a. n.a. 878 898 615 734 953 779 634 107 To United States 85,759 104,425 111,299 95,249 95,975 102,955 98,466 99,20c 103,0% 100,492 108 Parent bank 39,451 47,081 50,980 42,851 40,517 47,162' 43,783 43,358' 45,441 43,762 109 Other banks in United States 10,474 18,466 16,057 14,167 14,187 13,938 13,320 13,590' 13,959 15,112 110 Nonbanks 35,834 38,878 44,262 38,231 41,271 41,855 41,363 42,252 43,696 41,618 111 To foreigners 60,012 38,274 38,445 39,872 41,764 40,320 39,785 41,529 40,308 41,102 112 Other branches of parent bank 20,641 15,796 14,936 14,823 16,455 16,782 16,014 17,111 16,744 17,179 113 Banks 23,202 10,166 11,876 13,068 13,993 12,405 12,274 12,976 12,503 13,469 114 Official institutions 3,498 1,967 1,919 2,211 2,376 2,054 2,020 1,992 1,884 1,598 115 Nonbank foreigners 12,671 10,345 11,274 9,770 8,940 9,079 9,477 9,450 9,177 8,856 116 Other liabilities 3,337 2,457 2,339 2,982 2,973 2,921 2,849 2,983' 2,858 2,880 117 Total payable in U.S. dollars 145,284 141,908 148,278 135,326 137,874 143,590 138,200 140,973' 143,223 140,957 3. 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total1 172,718 177,950 176,258 178,468 180,640 176,828 173,334 169,780 170,593 By type 2 Liabilities reported by banks in the United States2 24,989 25,534 26,934 25,986 26,197 23,310 23,420 22,979 22,673 3 U.S. Treasury bills and certificates3 46,658 54,341 55,780 59,570 59,976 56,662 52,474 54,685 57,226 U.S. Treasury bonds and notes 4 Marketable 67,733 68,514 67,678 67,076 68,995 71,522 72,846 67,568 67,079 5 Nonmarketable4 8,750 7,250 5,800 5,800 5,800 5,800 5,300 5,300 4,900 6 U.S. securities other than U.S. Treasury securities5 24,588 22,311 20,066 20,036 19,672 19,534 19,294 19,248 18,715 By area 7 Western Europe1 61,298 67,645 68,296 70,510 69,756 68,260 67,354 63,708 65,645 8 Canada 2,070 2,438 1,321 1,466 1,528 1,491 1,136 1,715 1,403 9 Latin America and Caribbean 6,057 6,248 8,141 8,904 8,645 7,450 7,278 7,518 7,528 10 Asia 96,034 92,572 91,916 90,115 93,951 93,044 91,030 90,714 90,001 11 Africa 1,350 958 981 1,423 1,290 1,120 1,397 1,200 1,403 12 Other countries6 5,909 8,089 5,603 6,050 5,470 5,463 5,139 4,925 4,613 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 1985 IItteemm 11998811 11998822 11998833 June Sept. Dec. Mar.P 1 Banks' own liabilities 3,523 4,844 5,219 6,459 6,227 7,501 6,774 2 Banks' own claims 4,980 7,707 7,231 9,687 9,334 10,956'' 12,645 3 Deposits 3,398 4,251 2,731 4,284 3,685 4,119' 6,174 4 Other claims 1,582 3,456 4,501 5,404 5,649 6,837 6,471 5 Claims of banks' domestic customers1 971 676 1,059 227 281 569 440 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 • August 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 All foreigners 243,889 307,056 369,607 388,894 399,681 406,381 398,987 405,198' 413,063 410,463 2 Banks' own liabilities 163,817 227,089 279,087 290,184 297,857 306,758 301,398 311,627' 316,935 312,565 3 Demand deposits 19,631 15,889 17,470 16,490 18,351 19,542 17,975 19,369 18,174 18,438 4 Time deposits1 29,039 68,797 90,632 109,608 112,218 110,235 114,145 117,065' 119,265 117,570 5 Other2 17,647 23,184 25,874 24,441 23,684 26,332 23,542 24,991' 24,8% 24,233 6 Own foreign offices3 97,500 119,219 145,111 139,645 143,604 150,650 145,736 150,202' 154,600 152,324 7 Banks' custody liabilities4 80,072 79,967 90,520 98,710 101,824 100,074 97,588 93,572' 96,128 97,898 8 U.S. Treasury bills and certificates5 55,315 55,628 68,669 73,295 76,531 75,838 73,635 69,189 71,552 73,077 9 Other negotiable and readily transferable instruments6 18,788 20,636 17,467 20,281 19,703 18,775 18,141 18,068' 18,099 18,279 10 Other 5,970 3,702 4,385 5,135 5,590 5,460 5,812 6,315' 6,477 6,543 11 Nonmonetary international and regional organizations7 2,721 4,922 5,957 4,801 5,852 4,083 6,929 5,812 5,905 6,047 12 Banks' own liabilities 638 1,909 4,632 2,053 2,779 1,644 3,571 2,092 2,333 3,018 13 Demand deposits 262 106 297 144 354 263 417 341 191 167 14 Time deposits' 58 1,664 3,584 1,513 2,114 1,093 2,682 936 1,488 2,211 15 Other2 318 139 750 3% 311 288 472 815 654 640 16 Banks' custody liabilities4 2,083 3,013 1,325 2,748 3,073 2,440 3,358 3,719 3,572 3,029 17 U.S. Treasury bills and certificates 541 1,621 463 1,455 1,448 916 1,921 2,258 2,082 1,434 18 Other negotiable and readily transferable instruments6 1,542 1,392 862 1,292 1,604 1,524 1,429 1,461 1,490 1,593 19 Other 0 0 0 0 21 0 8 1 0 2 20 Official institutions8 79,126 71,647 79,876 82,714 85,556 86,173 79,972 75,894 77,663 79,899 21 Banks' own liabilities 17,109 16,640 19,427 19,247 18,790 19,065 16,970 17,249 16,765 16,593 22 Demand deposits 2,564 1,899 1,837 1,725 2,133 1,823 1,780 1,881 1,923 2,044 23 Time deposits1 4,230 5,528 7,318 8,677 9,457 9,391 8,371 8,673' 8,464 9,071 24 Other2 10,315 9,212 10,272 8,846 7,201 7,852 6,818 6,694' 6,378 5,478 25 Banks' custody liabilities4 62,018 55,008 60,448 63,467 66,766 67,108 63,002 58,645 60,898 63,306 26 U.S. Treasury bills and certificates5 52,389 46,658 54,341 55,780 59,570 59,976 56,662 52,474 54,685 57,226 27 Other negotiable and readily transferable instruments6 9,581 8,321 6,082 7,626 7,010 7,038 6,277 6,086 6,109 5,947 28 Other 47 28 25 61 186 94 63 85 105 133 29 Banks9 136,008 185,881 226,887 233,555 239,806 248,360 241,515 250,039' 257,437 252,848 30 Banks' own liabilities 124,312 169,449 205,347 209,431 214,240 225,512 218,980 227,703' 235,004 230,415 31 Unaffiliated foreign banks 26,812 50,230 60,236 69,786 72,635 74,862 73,244 77,501' 80,404 78,091 32 Demand deposits 11,614 8,675 8,759 8,389 9,430 10,526 9,030 9,656 9,151 9,343 33 Time deposits1 8,720 28,386 37,439 46,770 47,717 47,059 48,612 50,982' 54,182 51,580 34 Other2 6,477 13,169 14,038 14,627 15,488 17,278 15,602 16,862' 17,071 17,168 35 Own foreign offices3 97,500 119,219 145,111 139,645 143,604 150,650 145,736 150,202' 154,600 152,324 36 Banks' custody liabilities4 11,696 16,432 21,540 24,124 23,566 22,848 22,535 22,336' 22,433 22,432 37 U.S. Treasury bills and certificates 1,685 5,809 10,178 11,828 11,409 10,927 10,933 10,493 10,602 10,446 38 Other negotiable and readily transferable instruments6 4,400 7,857 7,485 7,802 7,360 7,156 6,487 6,254' 6,206 6,235 39 Other 5,611 2,766 3,877 4,494 4,797 4,766 5,114 5,589' 5,625 5,751 40 Other foreigners 26,035 44,606 56,887 67,824 68,467 68,215 70,571 73,454' 72,058 71,670 41 Banks' own liabilities 21,759 39,092 49,680 59,453 60,048 60,537 61,877 64,583' 62,834 62,539 42 Demand deposits 5,191 5,209 6,577 6,232 6,433 6,930 6,747 7,491 6,909 6,883 43 Time deposits 16,030 33,219 42,290 52,648 52,930 52,693 54,481 56,473' 55,132 54,708 44 Other2 537 664 813 573 685 914 650 619 793 947 45 Banks' custody liabilities4 4,276 5,514 7,207 8,372 8,419 7,678 8,693 8,871 9,224 9,131 46 U.S. Treasury bills and certificates 699 1,540 3,686 4,232 4,103 4,020 4,118 3,964 4,182 3,971 47 Other negotiable and readily transferable instruments6 3,265 3,065 3,038 3,560 3,730 3,058 3,948 4,267 4,294 4,503 48 Other 312 908 483 580 586 601 628 640 748 657 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,747 14,307 10,346 10,714 10,437 10,476 9,287 9,169' 9,412 9,145 • 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 243,889 307,056 369,607 388,894 399,681 406,831 398,987 405,198' 413,063 410,463 2 Foreign countries 241,168 302,134 363,649 384,094 393,829 402,748 392,057 399,387' 407,158 404,417 3 Europe 91,275 117,756 138,072 146,308 150,659 152,395 149,264 152,221' 151,599 149,214 4 Austria 596 519 585 744 627 615 734 625 670 537 5 Belgium-Luxembourg 4,117 2,517 2,709 4,093 3,613 4,114 4,000 4,638 4,797 4,824 6 Denmark 333 509 466 337 434 438 452 530' 452 557 7 Finland 296 748 531 407 487 418 425 735' 804 476 8 France 8,486 8,171 9,441 11,641 11,935 12,701 11,908 12,430 12,776 13,626 9 Germany 7,645 5,351 3,599 3,331 3,425 3,353 3,586 3,258 2,922 3,538 10 Greece 463 537 520 609 602 699 615 583 730 649 11 Italy 7,267 5,626 8,462 8,976 11,056 10,757 9,477 9,108' 8,412 7,895 1? Netherlands 2,823 3,362 4,290 4,421 5,077 4,799 4,663 4,622 4,934 4,448 13 Norway 1,457 1,567 1,673 1,895 1,693 1,548 1,712 1,635' 1,889 2,138 14 Portugal 354 388 373 540 552 597 570 614 715 698 is Spain 916 1,405 1,603 1,905 1,873 2,082 2,016 1,887 2,078 1,999 16 Sweden 1,545 1,390 1,799 1,945 1,839 1,676 2,133 1,486' 1,667 1,908 17 Switzerland 18,716 29,066 32,246 32,461 31,494 31,054 31,397 31,580' 30,426 30,050 18 Turkey 518 2% 467 557 457 584 495 501 527 506 19 United Kingdom 28,286 48,172 60,683 65,280 67,964 68,553 68,039 70,269' 70,244 68,339 20 Yugoslavia 375 499 562 579 565 602 545 602 671 648 21 Other Western Europe1 6,541 7,006 7,403 6,062 6,429 7,184 5,855 6,628 6,273 5,774 V U.S.S.R 49 50 65 50 54 79 66 60 94 125 23 Other Eastern Europe2 493 576 596 476 481 542 575 431 517 481 24 Canada 10,250 12,232 16,026 16,767 16,549 16,048 16,233 18,263' 17,328 17,000 75 Latin America and Caribbean 85,223 114,163 140,088 145,799 149,794 153,985 151,229 154,787' 157,545 156,622 76 Argentina 2,445 3,578 4,038 4,484 4,558 4,424 4,523 4,354' 4,528 4,676 77 Bahamas 34,856 44,744 55,818 52,838 55,470 56,955 55,398 56,928' 59,471 59,037 78 Bermuda 765 1,572 2,266 3,043 3,222 2,370 2,706 3,410' 2,907 3,133 79 Brazil 1,568 2,014 3,168 4,729 4,997 5,332 4,920 6,143 4,595 4,675 30 British West Indies 17,794 26,381 34,545 34,485 34,385 36,949 35,269 35,157 36,537 35,742 31 Chile 664 1,626 1,842 2,052 2,063 2,001 1,948 1,916 1,897 1,908 37 Colombia 2,993 2,594 1,689 2,022 2,057 2,514 2,356 2,453 2,529 2,400 33 Cuba 9 9 8 8 8 10 26 8 7 6 34 Ecuador 434 455 1,047 924 1,029 1,092 912 981 1,024 1,022 3S Guatemala 479 670 788 855 884 896 920 915 950 955 36 Jamaica 87 126 109 122 110 183 157 182 163 154 37 Mexico 7,235 8,377 10,392 12,488 13,422 12,695 13,298 13,00c 13,250 13,163 38 Netherlands Antilles 3,182 3,597 3,879 4,187 4,180 4,153 4,346 4,662 4,576 4,383 39 Panama 4,857 4,805 5,924 6,585 6,847 6,928 6,873 7,149' 7,488 7,582 40 Peru 694 1,147 1,166 1,297 1,209 1,247 1,151 1,064' 1,132 1,077 41 Uruguay 367 759 1,244 1,361 1,309 1,394 1,485 1,413 1,443 1,461 4? Venezuela 4,245 8,417 8,632 10,367 10,013 10,545 10,667 10,740' 10,648 10,790 43 Other Latin America and Caribbean 2,548 3,291 3,535 3,952 4,030 4,297 4,275 4,311 4,401 4,458 44 49,822 48,716 58,570 66,033 66,952 71,139 66,536 64,981' 72,058 73,092 China 45 Mainland 158 203 249 804 844 1,153 1,075 1,068 980 912 46 Taiwan 2,082 2,761 4,051 5,098 5,142 4,975 5,098 5,187' 5,306 5,236 47 Hong Kong 3,950 4,465 6,657 6,236 6,535 7,240 6,558 6,648 6,937 7,091 48 India 385 433 464 616 606 507 554 725 738 554 49 Indonesia 640 857 997 1,344 893 1,033 1,136 914 1,052 1,104 SO 592 606 1,722 2,017 1,023 1,268 1,003 994' 941 873 SI 20,750 16,078 18,079 19,644 20,750 20,929 21,662 22,551' 24,513 22,754 5? Korea 2,013 1,692 1,648 1,552 1,609 1,691 1,560 1,584' 1,526 1,536 S3 Philippines 874 770 1,234 1,097 1,252 1,3% 1,327 1,113' 1,102 1,207 54 Thailand 534 629 747 980 1,458 1,257 1,161 1,050' 1,383 1,141 SS Middle-East oil-exporting countries3 12,992 13,433 12,976 13,890 13,399 16,804 15,965 15,202 16,391 16,265 56 4,853 6,789 9,748 12,755 13,442 12,886 9,437 7,945 11,190 14,418 57 3,180 3,124 2,827 3,343 3,599 3,506 3,170 3,561' 3,476 3,611 58 Egypt 360 432 671 763 739 757 541 637' 715 841 59 Morocco 32 81 84 115 117 118 115 1W 167 155 60 South Africa 420 292 449 459 460 328 376 371 244 339 61 26 23 87 141 163 153 76 79 100 128 6? Oil-exporting countries4 1,395 1,280 620 1,012 1,141 1,189 1,186 1,450 1,346 1,177 63 Other Africa 946 1,016 917 852 978 %1 876 91C 903 969 64 Other countries 1,419 6,143 8,067 5,844 6,277 5,674 5,624 5,574' 5,152 4,877 6S Australia 1,223 5,904 7,857 5,464 5,598 5,290 5,248 5,017' 4,742 4,455 66 All other 196 239 210 379 679 384 377 557' 409 421 67 Nonmonetary international and regional organizations 2,721 4,922 5,957 4,801 5,852 4,083 6,929 5,812 5,905 6,047 68 International 1,661 4,049 5,273 4,086 5,055 3,376 6,165 4,935 5,132 5,182 69 Latin American regional 710 517 419 518 593 587 600 580 632 706 70 Other regional5 350 357 265 196 204 120 165 296 141 159 • 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 • August 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr.'' 1 Total 251,589 355,705 391,312 383,489 384,634 398,722 386,911 393,182r 396,936 389,567 2 Foreign countries 251,533 355,636 391,148 382,807 384,072 398,048 385,986 392,882' 3%, 696 389,487 3 Europe 49,262 85,584 91,927 95,415 97,930 97,962 96,044 97,995' 101,624 99,524 4 Austria 121 229 401 521 532 433 339 367 484 509 5 Belgium-Luxembourg 2,849 5,138 5,639 5,363 4,988 4,794 4,683 5,097 5,233 5,152 6 Denmark 187 554 1,275 544 520 648 589 589 638 601 7 Finland 546 990 1,044 887 1,098 898 817 907 826 804 8 France 4,127 7,251 8,766 8,812 9,299 9,085 8,617 9,602' 10,017 10,274 9 Germany 940 1,876 1,284 1,097 1,261 1,305 1,001 945' 1,072 1,011 10 Greece 333 452 476 929 819 817 896 840 847 907 11 Italy 5,240 7,560 9,018 7,820 8,854 9,079 8,040 8,481 8,687 8,256 12 Netherlands 682 1,425 1,267 1,190 1,229 1,351 1,480 11,,449900 1,350 1,401 13 Norway 384 572 690 676 602 675 651 880088 625 748 14 Portugal 529 950 1,114 1,346 1,262 1,243 1,212 1,286 1,184 1,151 15 Spain 2,095 3,744 3,573 3,189 3,017 2,884 2,858 3,135' 2,974 2,890 16 Sweden 1,205 3,038 3,358 2,362 2,313 2,220 2,497 2,586 2,342 2,338 17 Switzerland 2,213 1,639 1,863 2,067 2,275 2,201 2,308 2,110' 1,921 1,853 18 Turkey 424 560 812 1,121 1,097 1,130 1,232 1,155 1,172 1,147 19 United Kingdom 23,849 45,781 47,364 53,348 54,637 55,184 54,843 54,648' 58,100 56,287 20 Yugoslavia 1,225 1,430 1,718 1,868 1,866 1,886 1,862 1,783 1,793 1,892 21 Other Western Europe1 211 368 477 660 625 596 671 679' 642 640 22 U.S.S.R 377 263 192 159 169 142 118 178' 400 245 23 Other Eastern Europe2 1,725 1,762 1,598 1,454 1,467 1,391 1,329 1,308' 1,317 1,416 24 Canada 9,193 13,678 16,341 16,634 15,778 16,057 16,343 19,082' 18,761 18,155 25 Latin America and Caribbean 138,347 187,969 205,491 198,372 199,058 207,577 199,378 200,730' 202,980 198,723 26 Argentina 7,527 10,974 11,749 11,014 10,983 11,043 11,453 11,280' 11,157 11,163 27 Bahamas 43,542 56,649 59,633 52,006 54,084 58,027 54,369 54,548' 57,579 55,521 28 Bermuda 346 603 566 551 635 592 596 448' 463 632 29 Brazil 16,926 23,271 24,667 26,146 26,275 26,307 25,886 26,146 26,099 26,206 30 British West Indies 21,981 29,101 35,527 34,871 33,727 38,105 35,358 36,806 36,546 35,237 31 Chile 3,690 5,513 6,072 6,795 6,703 6,839 6,746 6,713 6,775 6,704 32 Colombia 2,018 3,211 3,745 3,343 3,406 3,499 3,369 3,406 3,316 3,246 33 Cuba 3 3 0 0 0 0 0 1 0 0 34 Ecuador 1,531 2,062 2,307 2,452 2,431 2,420 2,477 2,489 2,470 2,467 35 Guatemala3 124 124 129 141 148 158 154 157 154 154 36 Jamaica3 62 181 215 234 222 252 242 253 233 223 37 Mexico 22,439 29,552 34,802 35,364 35,288 34,697 34,021 33,655' 33,410 32,490 38 Netherlands Antilles 1,076 839 1,154 1,337 1,337 1,350 1,273 1,393 1,254 1,319 39 Panama 6,794 10,210 7,848 7,540 7,360 7,707 6,864 7,071' 7,083 7,039 40 Peru 1,218 2,357 2,536 2,416 2,358 2,384 2,414 2,337 2,345 2,351 41 Uruguay 157 686 977 962 990 1,088 1,053 1,021 1,019 1,032 42 Venezuela 7,069 10,643 11,287 11,029 10,994 11,017 10,968 10,929 10,937 10,785 43 Other Latin America and Caribbean 1,844 1,991 2,277 2,170 2,118 2,091 2,135 2,077' 2,140 2,154 44 49,851 60,952 67,837 62,356 61,398 66,380 64,387 65,351' 6633,,660066 6633,,338844 China 45 Mainland 107 214 292 409 543 710 507 741 660 572 46 Taiwan 2,461 2,288 1,908 1,588 1,679 1,849 1,745 1,827 1,944 1,976 47 Hong Kong 4,132 6,787 8,489 7,155 6,945 7,368 6,801 7,351 6,639 6,839 48 India 123 222 330 302 381 425 299 354 284 307 49 Indonesia 352 348 805 821 797 734 710 780 780 704 50 Israel 1,567 2,029 1,832 1,890 1,938 2,088 1,993 2,041 1,941 2,004 51 Japan 26,797 28,379 30,354 26,862 26,421 29,059 28,495 29,092' 28,020 26,591 52 Korea 7,340 9,387 9,943 9,253 8,896 9,285 8,799 8,813' 9,296 9,411 53 Philippines 1,819 2,625 2,107 2,510 2,487 2,550 2,499 2,560 2,435 2,360 54 Thailand 565 643 1,219 1,072 1,112 1,125 1,123 1,076 1,005 939 55 Middle East oil-exporting countries4 1,581 3,087 4,954 4,650 4,687 5,054 5,004 4,856 4,708 5,508 56 Other Asia 3,009 4,943 5,603 5,844 5,512 6,133 6,411 5,860 5,895 6,173 57 Africa 3,503 5,346 6,654 6,862 6,719 6,615 6,536 6,376' 6,221 6,299 58 Egypt 238 322 747 674 693 728 668 584 674 629 59 Morocco 284 353 440 582 536 583 552 582 584 595 60 South Africa 1,011 2,012 2,634 3,140 2,960 2,795 2,791 2,666 2,420 2,508 61 Zaire 112 57 33 18 19 18 41 29 24 24 62 Oil-exporting countries5 657 801 1,073 938 911 842 812 791 874 893 63 Other 1,201 1,802 1,727 1,510 1,600 1,649 1,672 1,724 1,645 1,651 64 Other countries 1,376 2,107 2,898 3,169 3,189 3,456 3,297 3,348 3,505 3,402 65 Australia 1,203 1,713 2,256 2,508 2,487 2,778 2,593 2,635 2,824 2,754 66 All other 172 394 642 661 702 678 704 713 681 648 67 Nonmonetary international and regional organizations6 56 68 164 681 562 674 925 300 240 80 • 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 Millionsgpf dollars, end of period 1984 1985 TTyyppee ooff ccllaaiimm 11998811AA 11998822 11998833 Oct. Nov. Dec. Jan. Feb.' Mar. Apr.P 1 Total 222222288888887777777,,,,,,,555555555555557777777 333333399999996666666,,,,,,,000000011111115555555 444444422222226666666,,,,,,,222222211111115555555 444444433333331111111,,,,,,,666666633333339999999 444444433333330000000,,,,,,,333333366666665555555 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 222222255555551111111,,,,,,,555555588888889999999 333333355555555555555,,,,,,,777777700000005555555 333333399999991111111,,,,,,,333333311111112222222 383,489 384,634 333333399999998888888,,,,,,,777777722222222222222 386,911 393,182 333333399999996666666,,,,,,,999999933333336666666 389,567 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 33333331111111,,,,,,,222222266666660000000 44444445555555,,,,,,,444444422222222222222 55555557777777,,,,,,,555555566666669999999 61,367 61,443 66666661111111,,,,,,,333333377777771111111 61,364 61,860 66666661111111,,,,,,,222222244444444444444 60,517 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 99999996666666,,,,,,,666666655555553333333 111111122222227777777,,,,,,,222222299999993333333 111111144444446666666,,,,,,,333333399999993333333 143,631 144,809 111111155555556666666,,,,,,,444444499999997777777 153,586 154,500 111111155555557777777,,,,,,,999999999999995555555 154,655 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 77777774444444,,,,,,,777777700000004444444 111111122222221111111,,,,,,,333333377777777777777 111111122222223333333,,,,,,,888888833333337777777 120,879 120,890 111111122222223333333,,,,,,,777777777777775555555 116,903 121,340 111111122222222222222,,,,,,,222222266666666666666 119,251 66 DDeeppoossiittss 22222223333333,,,,,,,333333388888881111111 44444444444444,,,,,,,222222222222223333333 44444447777777,,,,,,,111111122222226666666 46,787 45,788 44444448888888,,,,,,,111111111111112222222 45,070 47,685 44444449999999,,,,,,,666666699999998888888 47,579 77 OOtthheerr 55555551111111,,,,,,,333333322222222222222 77777777777777,,,,,,,111111155555553333333 77777776666666,,,,,,,777777711111111111111 74,092 75,102 77777775555555,,,,,,,666666666666663333333 71,832 73,655 77777772222222,,,,,,,555555566666669999999 71,672 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444448888888,,,,,,,999999977777772222222 66666661111111,,,,,,,666666611111114444444 66666663333333,,,,,,,555555511111114444444 57,612 57,492 55555557777777,,,,,,,000000088888880000000 55,058 55,481 55555555555555,,,,,,,444444433333331111111 55,145 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 33333335555555,,,,,,,999999966666668888888 44444440000000,,,,,,,333333311111110000000 33333334444444,,,,,,,999999900000003333333 33333332222222,,,,,,,999999911111116666666 33333333333333,,,,,,,444444422222228888888 1111111,,,,,,,333333377777778888888 2222222,,,,,,,444444499999991111111 2222222,,,,,,,999999966666669999999 3333333,,,,,,,333333388888880000000 3333333,,,,,,,888888877777771111111 11 Negotiable and readily transferable 22222226666666,,,,,,,333333355555552222222 33333330000000,,,,,,,777777766666663333333 22222226666666,,,,,,,000000066666664444444 22222223333333,,,,,,,888888800000005555555 22222224444444,,,,,,,333333366666669999999 12 Outstanding collections and other 8888888,,,,,,,222222233333338888888 7777777,,,,,,,000000055555556666666 5555555,,,,,,,888888877777770000000 5555555,,,,,,,777777733333332222222 5555555,,,,,,,111111188888888888888 13 MEMO: Customer liability on 22222229999999,,,,,,,999999955555552222222 33333338888888,,,,,,,111111155555553333333 33333337777777,,,,,,,777777711111115555555 33333336666666,,,,,,,555555577777775555555 33333335555555,,,,,,,222222222222222222222 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 40,369 42,499 45,856 43,147' 44,322' 40,096' 41,896' 39,916 39,550 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 1985 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998811AA 11998822 11998833 June Sept. Dec. Mar .P 1 Total 154,590 228,150 243,715 249,904 240,595 243,049 238,041 By borrower 2 Maturity of 1 year or less1 116,394 173,917 176,158 172,474 162,863 165,200 163,965 3 Foreign public borrowers 15,142 21,256 24,039 21,066 21,059 22,076 23,671 4 All other foreigners 101,252 152,661 152,120 151,407 141,804 143,124 140,295 5 Maturity of over 1 year1 38,197 54,233 67,557 77,430 77,731 77,849 74,076 6 Foreign public borrowers 15,589 23,137 32,521 37,747 38,410 39,620 37,518 7 All other foreigners 22,608 31,095 35,036 39,683 39,321 38,229 36,558 By area Maturity of 1 year or less1 8 Europe 28,130 50,500 56,117 59,924 56,773 58,170 59,709 9 Canada 4,662 7,642 6,211 6,959 5,841 5,978 7,425 10 Latin America and Caribbean 48,717 73,291 73,660 65,136 61,479 60,692 60,147 11 31,485 37,578 34,403 34,012 32,252 33,450 30,349 12 Africa 2,457 3,680 4,199 4,790 4,798 4,442 4,101 13 All other2 943 1,226 1,569 1,652 1,720 2,468 2,234 Maturity of over 1 year1 14 Europe 8,100 11,636 13,576 12,778 11,249 9,590 8,558 15 Canada 1,808 1,931 1,857 2,203 1,801 1,890 2,178 16 Latin America and Caribbean 25,209 35,247 43,888 54,249 56,568 57,834 55,007 17 1,907 3,185 4,850 5,098 5,106 5,386 5,336 18 Africa 900 1,494 2,286 1,865 1,857 2,033 1,964 19 Mother2 272 740 1,101 1,237 1,150 1,116 1,035 • 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 • August 1985 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks' Billions of dollars, end of period 1982 1983 1984 1985 AArreeaa oorr ccoouunnttrryy 11998800 11998811 Dec. June Sept. Dec. Mar. June7 Sept. Dec.' Mar.? 1 Total 352.0 415.2 438.7 439.9 431.0 437.3 435.1r 430.6' 410.1' 407.7 409.2 2 G-10 countries and Switzerland 162.1 175.5 179.7 177.1 168.8 168.0 166.C 157.7' 148.C 147.6 152.0 3 Belgium-Luxembourg 13.0 13.3 13.1 13.3 12.6 12.4 11.0 10^ 9.8 8.8 9.4 4 France 14.1 15.3 17.1 17.1 16.2 16.3 15.9 14.2' 14.3 14.1 14.5 5 Germany 12.1 12.9 12.7 12.6 11.6 11.3 11.7 10.9' 10.0 9.0 8.9 6 Italy 8.2 9.6 10.3 10.5 9.9 11.4 11.2 11.5 9.7 10.1 10.0 7 Netherlands 4.4 4.0 3.6 4.0 3.6 3.5 3.4 3.0 3.4 3.9 3.7 8 Sweden 2.9 3.7 5.0 4.7 4.9 5.1 5.2 4.3 3.5 3.2 3.1 9 Switzerland 5.0 5.5 5.0 4.8 4.2 4.3 4.3 4.2 3.9 3.9 4.2 10 United Kingdom 67.4 70.1 72.1 70.8 67.8 65.4 65.1 60.5' 57.4 59.8 64.4 11 Canada 8.4 10.9 10.4 10.8 8.9 8.3 8.6 8.9 8.1 7.8 9.0 12 Japan 26.5 30.2 30.2 28.5 29.0 29.9 29.7' 29.3' 27.9 27.2 24.8 13 Other developed countries 21.6 28.4 33.7 34.5 34.3 36.1 35.7 37.1 36.3 33.8 33.0 14 Austria 1.9 1.9 1.9 2.1 1.9 1.9 2.0 1.9' 1.8 1.6 1.6 15 Denmark 2.3 2.3 2.4 3.4 3.3 3.4 3.4 3.1 2.9 2.2 2.1 16 Finland 1.4 1.7 2.2 2.1 1.8 2.4 2.1 2.3 1.9 1.9 1.8 17 Greece 2.8 2.8 3.0 2.9 2.9 2.8 3.0 3.3 3.2 2.9 2.9 18 Norway 2.6 3.1 3.3 3.4 3.2 3.3 3.2 3.2 3.2 3.0 2.9 19 Portugal .6 1.1 1.5 1.4 1.4 1.5 1.4 1.7 1.6 1.4 1.4 20 Spain 4.4 6.6 7.5 7.2 7.1 7.1 7.1 7.3 6.9 6.5 6.4 21 Turkey 1.5 1.4 1.4 1.4 1.5 1.7 1.9 2.0 2.0 1.9 1.9 22 Other Western Europe 1.7 2.1 2.3 2.0 2.1 1.8 1.8 1.9 1.7 1.7 1.7 23 South Africa 1.1 2.8 3.7 3.9 4.7 4.7 4.8 4.7 5.0 4.5 4.2 24 Australia 1.3 2.5 4.4 4.5 4.4 5.5 5.2 5.7 6.2 6.1 6.2 25 OPEC countries2 22.7 24.8 27.4 28.3 27.2 28.9 28.6 26.7 25.0 25.6 25.3 26 Ecuador 2.1 2.2 2.2 2.2 2.1 2.2 2.1 2.1 2.1 2.2 2.2 27 Venezuela 9.1 9.9 10.5 10.4 9.8 9.9 9.7 9.5 9.2 9.3 9.2 28 Indonesia 1.8 2.6 3.2 3.2 3.4 3.8 4.0 4.0 3.8 3.7 3.6 29 Middle East countries 6.9 7.5 8.7 9.5 9.1 10.0 9.8 8.4 7.4 8.2 7.8 30 African countries 2.8 2.5 2.8 3.0 2.8 3.0 3.0 2.7 2.5 2.3 2.4 31 Non-OPEC developing countries 77.4 96.3 107.1 108.8 109.8 111.6 112.2' 112.8' 111.9 112.2 111.3 Latin America 32 Argentina 7.9 9.4 8.9 9.4 9.5 9.5 9.5 9.2 9.1 8.7 8.6 33 Brazil 16.2 19.1 22.9 22.7 23.1 23.1 25.1 25.4 26.3 26.3 26.4 34 Chile 3.7 5.8 6.3 5.8 6.3 6.4 6.5 6.7 7.1 7.0 7.0 35 Colombia 2.6 2.6 3.1 3.2 3.2 3.2 3.1 3.0 2.9 2.9 2.8 36 Mexico 15.9 21.6 24.5 25.3 25.9 26.1 25.6 26.0 26.1 25.8 25.7 37 Peru 1.8 2.0 2.6 2.6 2.4 2.4 2.3 2.3 2.2 2.2 2.2 38 Other Latin America 3.9 4.1 4.0 4.3 4.2 4.2 4.4 4.1 3.9 3.9 3.8 Asia China 39 Mainland .2 .2 .2 .2 .2 .3 .3 .6 .5 .7 .7 40 Taiwan 4.2 5.1 5.3 5.1 5.2 5.3 4.9 5.3 5.2 5.1 5.3 41 .3 .3 .6 .7 .8 1.0 1.0 1.0 1.1 1.0 1.0 42 1.5 2.1 2.3 2.3 1.7 1.9 1.6 1.9 1.7 1.8 1.7 43 Korea (South) 7.1 9.4 10.9 10.9 10.9 11.3 11.1 11.2 10.3 10.7 10.5 44 Malaysia 1.1 1.7 2.1 2.6 2.8 2.9 2.8 2.7 3.0 2.8 2.8 45 Philippines 5.1 6.0 6.3 6.4 6.2 6.2 6.7 6.3 5.9 6.0 6.1 46 Thailand 1.6 1.5 1.6 1.8 1.8 2.2 2.1 1.9 1.8 1.8 1.7 47 Other Asia .6 1.0 1.1 1.2 1.0 1.0 .9 1.1 1.0 1.1 1.1 Africa 48 Egypt .8 1.1 1.2 1.3 1.4 1.5 1.4 1.4 1.2 1.2 1.1 49 Morocco .7 .7 .7 .8 .8 .8 .8 .8 .8 .8 .8 50 .2 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 2.1 2.3 2.4 2.2 2.4 2.3 2.2 1.9 1.9 2.1 2.1 52 Eastern Europe 7.4 7.8 6.2 5.8 5.3 5.3 4.9 4.9 4.5 4.4 4.5 53 U.S.S.R .4 .6 .3 .4 .2 .2 .2 .2 .2 .1 .4 54 Yugoslavia 2.3 2.5 2.2 2.3 2.3 2.4 2.3 2.3 2.3 2.3 2.2 55 Other 4.6 4.7 3.7 3.0 2.8 2.8 2.5 2.4 2.1 2.0 1.9 56 Offshore banking centers 47.0 63.7 66.8 69.3 68.7 70.5 71.4' 74.1' 66.9' 66.8 66.3 57 Bahamas 13.7 19.0 19.0 20.7 21.6 21.8 24.6 27.5' 23.7 21.5 21.5 58 Bermuda .6 .7 .9 .8 .8 .9 .7 .7 1.0 .9 .7 59 Cayman Islands and other British West Indies 10.6 12.4 12.9 12.7 10.5 12.2 12.0' 12.2' 11.1' 11.7 12.6 60 Netherlands Antilles 2.1 3.2 3.3 2.6 4.1 4.2 3.3 3.3 3.1 3.4 3.3 61 Panama4 5.4 7.7 7.6 6.6 5.7 6.0 6.3 6.6 5.7 6.8 5.7 62 Lebanon .2 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 8.1 11.8 13.9 14.5 15.2 15.0 14.4 13.5 12.7 12.5 12.4 64 Singapore 5.9 8.7 9.2 11.2 10.5 10.3 10.0 10.2 9.5 9.8 10.0 65 Others5 .3 .1 .0 .0 .1 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 14.0 18.8 17.9 16.2 16.9 17.0 16.3 17.3 17.3 17.3 16.9 1. The banking offices covered by these data are the U.S. offices and foreign Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. as Bahrain and Oman (not formally members of OPEC). Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. Excludes Liberia. (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 4. Includes Canal Zone beginning December 1979. adjusted to exclude the claims on foreign branches held by a U.S. office or another 5. Foreign branch claims only. foreign branch of the same banking institution. The data in this table combine 6. Includes New Zealand, Liberia, and international and regional organizaforeign branch claims in table 3.14 (the sum of lines 7 through 10) with the 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 States1 Millions of dollars, end of period 1983 1984 Type, and area or country 998800 11998811 11998822 Dec. Mar. June Sept. Dec.'' 1 Total 29,434 28,618 27,512 25,197 29,481 34,013 30,738 28,788 2 Payable in dollars 25,689 24,909 24,280 22,176 26,243 30,815 27,934 25,915 3 Payable in foreign currencies 3,745 3,709 3,232 3,020 3,237 3,198 2,804 2,873 By type 4 Financial liabilities 11,330 12,157 11,066 10,423 14,177 18,339 15,879 13,932 5 Payable in dollars 8,528 9,499 8,858 8,644 12,159 16,297 14,082 12,064 6 Payable in foreign currencies 2,802 2,658 2,208 1,779 2,018 2,043 1,797 1,868 7 Commercial liabilities 18,104 16,461 16,446 14,774 15,304 15,674 14,859 14,857 8 Trade payables 12,201 10,818 9,438 7,765 7,893 7,897 6,900 6,990 9 Advance receipts and other liabilities.. 5,903 5,643 7,008 7,009 7,411 7,776 7,959 7,867 10 Payable in dollars 17,161 15,409 15,423 13,533 14,085 14,518 ' 13,852 13,851 11 Payable in foreign currencies 943 1,052 1,023 1,241 1,219 1,155 1,007 1,006 By area or country Financial liabilities 12 Europe 6,481 6,825 6,501 5,691 7,087 7,230 6,679 6,798 13 Belgium-Luxembourg 479 471 505 302 428 359 428 471 14 France 327 709 783 843 956 900 910 995 15 Germany 582 491 467 492 514 561 521 489 16 Netherlands 681 748 711 581 527 583 595 578 17 Switzerland 354 715 792 486 641 563 514 569 18 United Kingdom 3,923 3,565 3,102 2,839 3,790 4,013 3,463 3,389 19 Canada 964 963 746 764 795 735 825 863 20 Latin America and Caribbean 3,136 3,356 2,751 2,607 4,912 8,888 6,780 4,556 21 Bahamas 964 1,279 904 751 1,419 3,603 2,606 1,423 22 Bermuda 1 7 14 13 51 13 11 13 23 Brazil 23 22 28 32 37 25 33 35 24 British West Indies 1,452 1,241 1,027 1,018 2,635 4,457 3,250 2,059 25 Mexico 99 102 121 213 243 237 260 369 26 Venezuela 81 98 114 124 121 124 130 137 27 Asia 723 976 1,039 1,332 1,355 1,462 1,566 1,682 28 Japan 644 792 715 898 947 1,013 1,085 1,121 29 Middle East oil-exporting countries2. 38 75 169 170 170 180 144 147 30 Africa 11 14 17 19 19 16 16 14 31 Oil-exporting countries3 1 0 0 0 0 0 1 0 32 All other4 15 24 12 10 9 9 14 19 Commercial liabilities 4,402 3,770 3,831 3,245 3,567 3,409 3,961 3,987 33 Europe 90 71 52 62 40 45 34 48 34 Belgium-Luxembourg 582 573 598 437 488 525 430 438 35 France 679 545 468 427 417 501 558 619 36 Germany 219 220 346 268 259 265 239 245 37 Netherlands 499 424 367 241 477 246 405 257 38 Switzerland 1,209 880 1,027 732 847 794 1,133 1,082 39 United Kingdom 40 Canada 888 897 1,495 1,841 1,776 1,840 1,906 1,975 41 Latin America and Caribbean 1,300 1,044 1,570 1,473 1,807 1,705 1,758 1,871 42 Bahamas 8 2 16 1 14 17 1 7 43 Bermuda 75 67 117 67 158 124 110 114 44 Brazil 111 67 60 44 68 31 68 124 45 British West Indies 35 2 32 6 33 5 8 32 46 Mexico 367 340 436 585 682 568 641 586 47 Venezuela 319 276 642 432 560 630 628 636 48 Asia 10,242 9,384 8,144 6,741 6,620 6,989 5,569 5,307 49 Japan 802 1,094 1,226 1,247 1,291 1,235 1,429 1,256 50 Middle East oil-exporting countries2'5 8,098 7,008 5,503 4,178 3,735 4,190 2,364 2,372 51 Africa 817 703 753 553 539 684 597 588 52 Oil-exporting countries3 517 344 277 167 243 217 251 233 53 All other4 456 664 651 921 995 1,046 1,068 1,128 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 • August 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 Dec. Mar. June Sept. Dec.P 1 Total 34,482 36,185 28,725 34,932 33,645 31,740 30,183 28,673 2 Payable in dollars 31,528 32,582 26,085 31,842 30,755 28,770 27,391 26,068 3 Payable in foreign currencies 2,955 3,603 2,640 3,090 2,890 2,970 2,792 2,605 By type 4 Financial claims 19,763 21,142 17,684 23,801 22,781 21,292 19,794 18,108 5 Deposits 14,166 15,081 13,058 18,356 17,486 16,124 15,014 13,475 6 Payable in dollars 13,381 14,456 12,628 17,859 17,057 15,614 14,574 13,056 7 Payable in foreign currencies 785 625 430 497 429 510 439 420 8 Other financial claims 5,597 6,061 4,626 5,445 5,2% 5,168 4,781 4,632 9 Payable in dollars 3,914 3,599 2,979 3,489 3,506 3,407 3,088 3,182 10 Payable in foreign currencies 1,683 2,462 1,647 1,956 1,790 1,761 1,693 1,450 11 Commercial claims 14,720 15,043 11,041 11,131 10,864 10,448 10,389 10,565 12 Trade receivables 13,960 14,007 9,994 9,721 9,540 9,105 8,885 9,084 13 Advance payments and other claims 759 1,036 1,047 1,410 1,323 1,343 1,503 1,481 14 Payable in dollars 14,233 14,527 10,478 10,494 10,193 9,749 9,729 9,830 15 Payable in foreign currencies 487 516 563 637 671 699 659 735 By area or country Financial claims 16 Europe 6,069 4,5% 4,873 6,434 6,252 6,364 5,569 5,365 17 Belgium-Luxembourg 145 43 15 37 30 37 15 15 18 France 298 285 134 150 171 151 146 114 19 Germany 230 224 178 159 148 161 187 220 20 Netherlands 51 50 97 71 57 158 62 66 21 Switzerland 54 117 107 38 90 61 64 66 22 United Kingdom 4,987 3,546 4,064 5,767 5,548 5,543 4,863 4,486 23 Canada 5,036 6,755 4,377 6,166 5,665 5,180 4,419 3,964 24 Latin America and Caribbean 7,811 8,812 7,546 10,144 9,823 8,469 8,633 7,512 25 Bahamas 3,477 3,650 3,279 4,745 3,927 3,213 3,255 2,951 26 Bermuda 135 18 32 % 3 5 5 6 27 Brazil 96 30 62 53 87 83 84 100 28 British West Indies 2,755 3,971 3,255 4,163 4,903 4,348 4,423 3,703 29 Mexico 208 313 274 291 279 230 232 215 30 Venezuela 137 148 139 134 130 124 128 125 31 Asia 607 758 698 764 753 %3 900 944 32 Japan 189 366 153 297 309 307 371 353 33 Middle East oil-exporting countries2 20 37 15 4 7 8 7 37 34 Africa 208 173 158 147 144 158 160 210 35 Oil-exporting countries3 26 46 48 55 42 35 37 85 36 All other4 32 48 31 145 145 158 113 114 Commercial claims 37 Europe 5,544 5,405 3,826 3,670 3,610 3,555 3,570 3,805 38 Belgium-Luxembourg 233 234 151 135 173 142 128 138 39 France 1,129 776 474 459 413 408 411 439 40 Germany 599 561 357 348 363 443 370 374 41 Netherlands 318 299 350 334 310 306 303 340 42 Switzerland 354 431 360 317 336 250 289 271 43 United Kingdom 929 985 811 809 787 812 891 1,061 44 Canada 914 %7 633 829 1,061 933 1,026 1,020 45 Latin America and Caribbean 3,766 3,479 2,526 2,695 22,,441199 2,042 1,976 11,,997722 46 Bahamas 21 12 21 8 88 4 14 88 47 Bermuda 108 223 261 190 216 89 88 115 48 Brazil 861 668 258 493 357 310 219 214 49 British West Indies 34 12 12 7 7 8 10 7 50 Mexico 1,102 1,022 775 884 745 577 595 583 51 Venezuela 410 424 351 272 268 241 245 206 52 Asia 3,522 3,959 3,050 3,063 2,997 3,085 2,884 3,070 53 Japan 1,052 1,245 1,047 1,114 1,186 1,178 1,080 1,180 54 Middle East oil-exporting countries2 825 905 751 737 701 710 703 687 55 Africa 653 772 588 588 497 536 595 470 56 Oil-exporting countries3 153 152 140 139 132 128 135 134 57 All other4 321 461 417 286 280 297 338 228 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 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998833 11998844 Jan.- Oct. Nov. Dec. Jan. Feb. Mar. Apr.P Apr. U.S. corporate securities STOCKS 1 Foreign purchases 69,770 60,462 23,539 4,657 4,838 4,487 5,005 7,125' 6,303 5,106 2 Foreign sales 64,360 63,388 24,700 5,398 4,746 5,049 5,701 7,i8<y 6,748 5,071 3 Net purchases, or sales (-) 5,410 -2,926 -1,161 -741 92 -562 -6% -56" -445 36 4 Foreign countries 5,312 -3,041 -1,139 -752 81 -461 -713 -51' -402 28 5 Europe 3,979 -2,986 -1,517 -529 -90 -359 -558 -215' -582 -161 6 France -97 -405 -50 -37 -46 -54 -19 -41 -13 24 7 Germany 1,045 -50 -334 -10 11 -105 -134 -109 -113 23 8 Netherlands -109 -315 -266 -47 -15 -29 -44 -108' -129 16 9 Switzerland 1,325 -1,490 -462 -130 -34 -249 -159 -133 -122 -48 10 United Kingdom 1,799 -658 -434 -251 17 91 -178 129' -195 -191 11 Canada 1,151 1,673 246 150 47 134 46 168' -2 33 12 Latin America and Caribbean 529 493 510 -89 30 67 103 158' 80 169 13 Middle East1 -808 -1,998 -133 -270 -12 -1% -52 -101 116 -96 14 Other Asia 395 -372 -313 -92 74 -91 -264 -99 -41 91 15 Africa 42 -23 -24 -8 -8 -6 -7 -2 -13 -1 16 Other countries 24 171 92 87 39 -11 19 40 39 -6 17 Nonmonetary international and regional organizations 98 115 -22 11 11 -101 17 -5 -43 8 BONDS2 18 Foreign purchases 24,000 39,341 24,202 6,994 4,902 6,403 5,937 8,219' 5,484 4,562 19 Foreign sales 23,097 26,071 12,423 3,060 2,556 2,900 3,106 3,649 2,598 3,070 20 Net purchases, or sales (-) 903 13,269 11,779 3,934 2,346 3,503 2,831 4,570 2,886 1,492 21 Foreign countries 888 12,972 11,728 3,954 2,133 3,527 2,835 4,489 2,936 1,468 22 Europe 909 11,792 11,363 3,956 1,954 3,338 2,635 4,143' 2,952 1,634 23 France -89 207 47 143 -11 24 55 -17 -10 18 24 Germany 344 1,731 -25 606 139 184 67 -153 -112 174 25 Netherlands 51 93 52 22 -1 15 9 44 8 -9 26 Switzerland 583 644 875 253 159 276 12 315 483 65 27 United Kingdom 434 8,520 10,303 2,860 1,603 2,776 2,441 4,018 2,550 1,294 28 Canada 123 -71 43 -3 13 14 59 -11 -5 0 29 Latin America and Caribbean 100 390 126 42 44 78 90 50 69 -83 30 Middle East1 -1,161 -1,011 -841 -232 -45 -179 -123 -84 -127 -507 31 Other Asia 865 1,862 1,008 192 169 276 140 337 89 442 32 Africa 0 1 0 0 -2 1 0 0 0 0 33 Other countries 52 10 29 0 2 0 35 54 -41 -19 34 Nonmonetary international and regional organizations 15 297 51 -20 213 -24 -4 81 -50 25 Foreign securities 35 Stocks, net purchases, or sales (-) -3,765 -1,077 -1,988 -318 -177 -221 -781 -652 -456 -100 36 Foreign purchases 13,281 14,591 5,520 1,333 1,147 1,169 1,149 1,562 1,372 1,437 37 Foreign sales 17,046 15,668 7,508 1,651 1,324 1,390 1,930 2,215 1,827 1,536 38 Bonds, net purchases, or sales (-) -3,239 -3,931 -1,272 -1,195 -578 -1,159 168 198 -948 -689 39 Foreign purchases 36,333 57,338 21,9% 4,527 6,601 5,134 5,3% 5,294 5,652 5,654 40 Foreign sales 39,572 61,270 23,268 5,722 7,179 6,293 5,228 5,096 6,600 6,343 41 Net purchases, or sales (-), of stocks and bonds .... -7,004 -5,008 -3,260 -1,513 -755 -1,379 -613 -454 -1,404 -789 42 Foreign countries -6,559 -4,619 -3,408 -1,477 -908 -671 -742 -754 -1,214 -698 43 Europe -5,492 -8,532 -2,848 -1,582 -707 -1,086 -732 -91 -1,205 -819 44 Canada -1,328 413 -389 -68 -23 254 75 -422 -68 25 45 Latin America and Caribbean 1,120 2,472 290 217 207 104 194 -47 7 137 46 Asia -855 1,345 -563 -30 88 -115 -394 -255 99 -13 47 Africa 141 -107 -38 -19 -16 3 -4 -3 -26 -5 48 Other countries -144 -210 140 6 -457 169 120 64 -21 -22 49 Nonmonetary international and regional organizations -445 -389 148 -36 153 -709 129 300 -190 -91 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 • August 1985 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1985 1984 1985 11998833 11998844 Country or area A Ja p n r. . - Oct. Nov. Dec. Jan. Feb. Mar. Apr.? Transactions, net purchases or sales (-) during period* 1 Estimated total2 3,693 21,412 4,662 2,931 2,197 7,508 2,312 2,319 -4,401 -4,433 2 Foreign countries2 3,162 16,432 3,562 1,092 2,293 5,066 3,797 2,163 -4,756 2,358 3 Europe2 6,226 11,070 834 795 776 1,300 532 -81 -1,435 1,818 4 Belgium-Luxembourg -431 289 202 27 41 46 104 18 0 80 5 Germany2 2,450 2,958 -1,488 -39 36 336 -120 -129 -1,538 299 6 Netherlands 375 454 -268 458 -7 16 -71 11 -201 -7 7 Sweden 170 46 171 -1 1 -88 150 -10 1 30 8 Switzerland2 -421 635 819 -172 -288 26 -35 358 313 183 9 United Kingdom 1,966 5,223 558 742 244 716 419 -342 293 188 10 Other Western Europe 2,118 1,465 840 -219 748 248 86 12 -303 1,045 11 Eastern Europe 0 0 0 0 0 0 0 0 0 0 12 Canada 699 1,526 49 237 193 249 -92 -231 38 334 13 Latin America and Caribbean -212 1,413 1,267 320 965 380 149 735 -82 465 14 Venezuela -124 14 6 1 7 -10 5 -11 2 10 15 Other Latin America and Caribbean 60 528 311 61 57 213 -2 71 65 177 16 Netherlands Antilles -149 871 950 258 902 177 146 674 -149 278 17 -3,535 2,377 1,308 -302 369 3,218 3,093 1,726 -3,289 -222 18 Japan 2,315 6,062 3,031 851 1,287 1,585 578 559 177 1,717 19 3 -67 17 -1 -5 2 2 1 1 13 20 All other -17 114 87 43 -5 -83 113 14 11 -50 21 Nonmonetary international and regional organizations 535 4,982 1,098 1,839 -96 2,442 -1,485 154 355 2,074 22 International 218 4,612 960 1,651 -188 2,361 -1,675 504 338 1,792 23 Latin American regional 0 0 -1 0 0 0 0 1 0 -3 MEMO 24 Foreign countries2 3,162 16,432 3,562 1,092 2,293 5,066 3,797 2,163 -4,756 2,358 25 Official institutions 779 481 -1,916 -852 -602 1,919 2,527 1,324 -5,278 -489 26 Other foreign2 2,382 15,951 5,479 1,944 2,895 3,147 1,270 840 521 2,848 Oil-exporting countries 27 Middle East3 -5,419 -6,277 -618 -983 -1,284 -200 27 -372 554 -827 28 Africa4 -1 -101 0 0 0 0 0 0 0 0 1. Estimated official and private transactions in marketable U.S. Treasury 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and securities with an original maturity of more than 1 year. Data are based on United Arab Emirates (Trucial States). monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and 4. Comprises Algeria, Gabon, Libya, and Nigeria, notes held by official institutions of foreign countries. 2. Includes U.S. Treasury notes publicly issued to private foreign residents denominated in foreign currencies. 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 May 31, 1985 Rate on May 31, 1985 Rate on May 31, 1985 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.5 June 1984 France1 10.13 May 1985 Norway 8.0 June 1983 Belgium. 11.0 Feb. 1984 Germany, Fed. Rep. of 4.5 June 1984 Switzerland 4.0 Mar. 1983 Brazil... 49.0 Mar. 1981 Italy 15.5 Jan. 1985 United Kingdom2. Canada.. 9.57 May 1985 Japan 5.0 Oct. 1983 Venezuela 11.0 May 1983 Denmark 7.0 Oct. 1983 Netherlands 5.5 Feb. 1985 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Eurodollars 12.24 9.57 10.75 9.50 8.90 8.37 9.05 9.32 8.74 8.13 7 United Kingdom 12.21 10.06 9.91 9.87 9.74 11.63 13.69 13.52 12.70 12.61 3 Canada 14.38 9.48 11.29 11.09 10.41 9.70 10.63 11.42 10.15 9.77 4 Germany 8.81 5.73 5.96 5.92 5.81 5.84 6.13 6.36 5.99 5.87 5 Switzerland 5.04 4.11 4.35 5.03 4.96 5.13 5.66 5.77 5.35 5.15 6 Netherlands 8.26 5.58 6.08 5.87 5.77 5.87 6.90 7.14 6.82 6.90 7 France 14.61 12.44 11.66 10.54 10.66 10.43 10.60 10.71 10.49 10.15 8 Italy 19.99 18.95 17.08 17.13 16.86 15.82 15.79 15.82 15.15 14.91 9 Belgium 14.10 10.51 11.41 10.81 10.75 10.75 10.75 10.75 10.09 9.35 10 Japan 6.84 6.49 6.32 6.32 6.33 6.27 6.29 6.30 6.26 6.26 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • August 1985 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1984 1985 CCoouunnttrryy//ccuurrrreennccyy 11998822 11998833 11998844 Dec. Jan. Feb. Mar. Apr. May 1 Australia/dollar1 101.65 90.14 87.937 84.00 81.51 73.74 69.70 65.84 67.68 2 Austria/schilling 17.060 17.968 20.005 21.802 22.267 23.190 23.247 21.717 21.868 3 Belgium/franc 45.780 51.121 57.749 62.380 63.455 66.310 66.308 62.283 62.572 4 Brazil/cruzeiro 179.22 573.27 1841.50 3008.55 3346.67 3768.17 4158.19 4511.58 5239.00 5 Canada/dollar 1.2344 1.2325 1.2953 1.3201 1.3240 1.3547 1.3840 1.3658 1.3756 6 China, P.R./yuan 1.8978 1.9809 2.3308 2.7953 2.8160 2.8347 2.8533 2.8480 2.8556 7 Denmark/krone 8.3443 9.1483 10.354 11.126 11.330 11.807 11.797 11.114 11.2244 8 Finland/markka 4.8086 5.5636 6.0007 6.4563 6.6368 6.8616 6.8464 6.4652 6.4641 9 France/franc 6.5793 7.6203 8.7355 9.5083 9.7036 10.093 10.078 9.4427 9.4829 10 Germany/deutsche mark 2.428 2.5539 2.8454 3.1044 3.1706 3.3025 3.2982 3.0946 3.1093 11 Greece/drachma 66.872 87.895 112.73 127.26 129.38 134.73 140.62 134.86 137.239 12 Hong Kong/dollar 6.0697 7.2569 7.8188 7.8287 7.8110 7.8017 7.8009 7.7902 7.7766 13 India/rupee 9.4846 10.1040 11.348 12.293 12.612 12.922 12.861 12.400 12.5004 14 Ireland/pound1 142.05 124.81 108.64 100.37 98.23 94.23 94.58 101.17 100.71 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 1912.52 1948.76 2042.00 2078.50 1975.89 1984.45 17 Japan/yen 249.06 237.55 237.45 247.96 254.18 260.48 257.92 251.84 251.73 18 Malaysia/ringgit 2.3395 2.3204 2.3448 2.4164 2.4804 2.5513 2.5734 2.4922 2.4759 19 Mexico/peso 72.990 155.01 192.31 219.56 227.56 236.06 246.15 246.57 254.8182 20 Netherlands/guilder 2.6719 2.8543 3.2083 3.5035 3.5819 3.7387 3.7290 3.4981 3.5097 21 New Zealand/dollar1 75.101 66.790 57.837 48.260 47.040 45.223 45.276 45.520 45.197 22 Norway/krone 6.4567 7.3012 8.1596 8.9805 9.1765 9.4695 9.4608 8.9314 8.9442 23 Philippines/peso 8.5324 11.0940 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Portugal/escudo 80.101 111.610 147.70 167.31 172.56 183.24 183.98 174.56 177.545 25 Singapore/dollar 2.1406 2.1136 2.1325 2.1732 2.2011 2.2557 2.2582 2.2199 2.2228 26 South Africa/rand1 92.297 89.85 69.534 52.66 46.34 50.57 50.33 51.50 50.18 27 South Koreaywon 731.93 776.04 807.91 825.73 832.16 839.16 850.71 861.21 792.56 28 Spain/peseta 110.09 143.500 160.78 171.98 175.13 182.35 183.13 172.85 175.397 29 Sri Lanka/rupee 20.756 23.510 25.428 26.213 26.392 26.605 26.836 27.113 27.404 30 Sweden/krona 6.2838 7.6717 8.2706 8.8614 9.0716 9.3364 9.4135 8.9946 8.9895 31 Switzerland/franc 2.0327 2.1006 2.3500 2.5602 2.6590 2.8045 2.8033 2.5948 2.6150 32 Taiwan/dollar n.a. n.a. 39.633 39.509 39.209 39.228 39.542 39.728 39.906 33 Thailand/baht 23.014 22.991 23.582 27.091 27.330 27.961 28.097 27.466 27.554 34 United Kingdom/pound1 174.80 151.59 133.66 118.61 112.71 109.31 112.53 123.77 124.83 35 Venezuela/bolivar 4.2981 10.6840 n.a. n.a. n.a. n.a. n.a. n.a. n.a. MEMO 36 United States/dollar2 116.57 125.34 138.19 149.24 152.83 158.43 158.14 149.56 149.92 1. Value in U.S. cents. NOTE. Averages of certified noon buying rates in New York for cable transfers. 2. Index of weighted-average exchange value of U.S. dollar against currencies Data in this table also appear in the Board's G.5 (405) release. For address, see of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 inside front cover. global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see "Index of the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on p. 700 of the August 1978 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1985 A83 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Assets and liabilities of commercial banks, March 31, 1983 August 1983 A70 Assets and liabilities of commercial banks, June 30, 1983 December 1983 A68 Assets and liabilities of commercial banks, September 30, 1983 March 1984 A68 Assets and liabilities of commercial banks, December 31, 1983 June 1984 A66 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 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 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1984 August 1985 A76 Terms of lending at commercial banks, February 1985 June 1985 A70 Terms of lending at commercial banks, May 1985 August 1985 A70 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • August 1985 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 6-10, 1985' A. Commercial and Industrial Loans Weighted Loan rate (percent) AAmmoouunntt AAvveerraaggee average Loans Partici- Characteristics ( o t o f h f o d u l o o s l a a la n n r d s s s ) ( o th f o d s u o iz s l a e la n r d s s ) mmaattuurriittyy22 W av e e ig ra h g te e d SSttaannddaarrdd q I u n a t r e t r il - e c m o ( a m p d e m e r c i u t e m n n d t e ) e n r t (p p l e o a r t c a i e n o n s n t )! Days effective3 range5 ALL BANKS 1 Overnight6 17,044,661 3,695 * 8.95 .53 8.60-9.14 63.7 9.3 2 One month and under 7,421,894 412 16 9.68 .36 8.88-9.89 76.4 11.4 3 Fixed rate 5,705,205 437 16 9.57 .48 8.88-9.79 73.0 11.8 4 Floating rate 1,716,689 346 15 10.07 .25 8.98-11.06 87.7 9.8 5 Over one month and under a year 9,302,512 66 146 11.26 .44 9.52-12.62 64.2 8.3 6 Fixed rate 4,532,255 45 102 11.04 .49 9.35-12.49 52.6 8.6 7 Floating rate 4,770,257 117 188 11.48 .43 10.92-12.62 75.2 8.0 8 Demand7 4,368,947 152 * 11.09 .25 9.76-12.13 70.3 9.7 9 Fixed rate 837,252 211 * 9.60 .69 8.84-11.07 77.7 1.6 10 Floating rate 3,531,695 142 * 11.44 .10 11.02-12.19 68.6 11.7 11 Total short term 38,138,014 198 44 9.90 .34 8.74-11.02 67.0 9.5 12 Fixed rate (thousands of dollars) . 27,924,391 230 21 9.43 .38 8.60-9.52 63.9 9.0 13 1-24 660,021 7 106 14.12 .28 13.31-15.03 24.0 1.0 14 25-49 312,283 33 119 13.38 .22 12.68-14.48 13.2 .1 15 50-99 319,243 72 120 13.27 .33 12.37-14.03 10.6 .2 16 100-499 678,332 166 65 12.83 .62 11.49-14.54 26.9 2.5 17 500-999 314,672 674 48 10.39 .25 9.26-11.07 57.6 4.8 18 1000 and over 25,639,840 7,695 15 9.11 .18 8.60-9.34 67.3 9.7 19 Floating rate (thousands of dollars). 10,213,623 144 138 11.19 .30 9.62-12.14 75.5 10.9 20 1-24 347,875 9 154 13.12 .34 12.13-14.37 54.3 1.2 21 25-49 378,884 33 142 12.73 .07 12.13-13.25 60.1 2.4 22 50-99 637,308 66 174 12.70 .26 12.00-13.80 59.3 2.4 23 100-499 1,838,317 182 186 12.22 .22 11.30-12.89 64.4 7.1 24 500-999 729,940 670 148 11.54 .11 11.02-12.13 69.0 7.0 25 1000 and over 6,281,299 3,898 119 10.49 .31 9.20-11.57 83.2 14.3 Months 26 Total long term 4,775,340 134 55 11.03 .56 9.37-12.01 76.9 7.0 27 Fixed rate (thousands of dollars) 1,718,901 79 53 11.26 1.17 9.22-11.73 75.0 5.2 28 1-99 323,533 15 41 16.01 1.27 14.37-15.17 3.6 .4 29 100-499 51,108 228 48 12.83 .95 11.30-13.88 52.7 8.1 30 500-999 39,249 637 57 11.77 .70 10.92-13.24 52.3 16.4 31 1000 and over 1,305,011 7,536 56 10.00 .69 9.18-11.20 94.2 5.9 32 Floating rate (thousands of dollars) 3,056,438 220 56 10.90 .47 9.54-12.13 78.0 8.0 33 1-99 248,881 22 45 13.13 .32 12.13-14.93 36.1 2.8 34 100-499 372,075 180 51 12.19 .14 11.57-12.75 52.3 6.7 35 500-999 140,768 638 43 11.51 .34 10.92-12.28 81.0 5.9 36 1000 and over 2,294,715 5,887 58 10.42 .48 9.42-11.30 86.5 8.8 Loan rate (percent) DDaayyss PPrriimmee rraattee99 Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 16,675,173 10,463 * 8.89 8.52 10.50 63.6 9.5 38 One month and under 6,426,340 3,935 15 9.26 8.87 10.50 80.1 12.2 39 Over one month and under a year 3,897,293 448 113 9.52 9.17 10.62 75.6 9.1 40 Demand7 1,265,545 465 * 9.13 8.78 10.69 76.1 8.3 41 Total short term 28,264,351 1,929 21 9.07 8.70 10.53 69.6 10.0 42 Fixed rate 25,093,778 2,209 15 9.05 8.67 10.52 66.9 9.6 43 Floating rate 3,170,573 964 76 9.29 8.91 10.61 90.4 13.3 Months 44 Total long term 2,264,102 917 53 9.49 9.19 10.56 89.8 9.4 45 Fixed rate 937,474 434 41 9.46 9.30 10.62 90.7 6.2 46 Floating rate .. 1,326,628 4,309 61 9.50 9.11 10.51 89.2 11.6 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A71 4.23 Continued A. Continued Weighted Loan rate (percent) Amount AAvveerraaggee average LLooaannss PPaarrttiiccii-of loans size mmaattuurriittyy22 made under pation Characteristics (thousands (thousands Weighted Inter- commitment loans of dollars) of dollars) average SSttaannddaarrdd quartile (percent) (percent) Days effective3 range5 48 LARGE BANKS 1 Overnight6 14,923,108 10,900 * 8.92 .01 8.60-9.14 64.3 10.6 2 One month and under 5,793,764 2,337 15 9.43 .03 8.88-9.72 81.7 12.0 3 Fixed rate 4,503,939 3,961 15 9.36 .04 8.88-9.68 78.2 13.1 4 Floating rate 1,289,825 961 12 9.69 .02 8.92-10.14 94.1 8.4 5 Over one month and under a year 4,772,551 440 134 10.47 .15 9.35-11.35 79.6 8.2 6 Fixed rate 2,510,117 1,129 98 9.90 .03 9.30-10.89 70.4 10.9 7 Floating rate 2,262,434 262 175 11.09 .17 10.20-12.13 89.8 5.1 8 Demand7 1,665,659 302 * 10.91 .21 9.21-11.85 85.3 3.2 9 Fixed rate 438,751 522 * 9.55 .18 8.97-9.65 93.5 1.3 10 Floating rate 1,226,908 262 * 11.39 .05 11.02-12.13 82.4 3.8 11 Total short term 27,155,082 1,343 29 9.42 .02 8.65-9.69 72.0 10.0 12 Fixed rate (thousands of dollars) . 22,181,208 4,004 15 9.13 .03 8.60-9.35 68.1 10.4 13 1-24 15,450 9 107 13.19 .13 12.02-14.28 58.2 .0 14 25-49 13,741 34 106 12.63 .18 11.63-13.39 61.1 1.0 15 50-99 20,357 65 77 12.31 .01 11.63-12.82 71.8 .0 16 100-499 105,300 216 65 11.05 .08 9.51-12.19 85.8 4.1 17 500-999 145,638 655 45 10.12 .06 9.33-10.63 62.1 6.3 18 1000 and over 21,880,722 8,890 15 9.11 .04 8.60-9.35 68.0 10.4 19 Floating rate (thousands of dollars). 4,973,874 339 110 10.73 .13 9.24-11.85 89.5 8.4 20 1-24 65,351 11 169 12.71 .05 12.11-13.31 80.1 2.2 21 25-49 83,010 34 167 12.45 .03 11.85-13.24 79.4 3.1 22 50-99 141,562 66 167 12.21 .04 11.85-12.68 78.0 3.5 23 100-499 556,694 191 148 11.86 .00 11.02-12.19 78.1 3.3 24 500-999 301,706 653 141 11.49 .08 11.02-12.13 79.3 7.3 25 1000 and over 3,825,550 4,229 100 10.38 .16 9.21-11.46 92.8 9.7 Months 26 Total long term 3,375,443 1,145 55 10.33 .04 9.25-11.24 92.6 5.6 27 Fixed rate (thousands of dollars) 1,277,005 1,813 56 9.99 .21 9.18-11.20 97.1 4.7 28 1-99 8,958 21 48 13.50 .36 12.47-14.37 36.8 10.7 29 100-499 22,180 232 44 11.70 .48 11.07-12.19 77.5 15.2 30 500-999 24,494 642 42 11.10 .43 9.90-12.01 74.0 19.6 31 1000 and over 1,221,373 9,106 57 9.91 .25 9.16-11.20 98.3 4.1 32 Floating rate (thousands of dollars) 2,098,438 936 55 10.54 .16 9.47-11.30 89.9 6.2 33 1-99 44,470 35 36 12.52 .03 11.85-13.24 70.2 4.3 34 100-499 130,684 221 39 11.99 .07 11.30-12.47 81.0 7.9 35 500-999 80,192 615 47 11.46 .27 10.92-12.19 89.9 1.7 36 1000 and over 1,843,092 6,921 57 10.35 .15 9.42-11.15 91.0 6.3 Loan rate (percent) DDaayyss PPrriimmee rraattee99 Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 14,780,904 11,246 * 8.90 8.53 10.50 64.3 10.7 38 One month and under 5,445,920 5,327 14 9.30 8.90 10.50 82.2 12.7 39 Over one month and under a year 2,657,916 3,264 98 9.48 9.12 10.50 77.6 8.6 40 Demand7 507,517 1,987 * 8.99 8.64 10.50 88.6 1.1 41 Total short terra 23,392,257 6,867 16 9.06 8.68 10.50 70.5 10.7 42 Fixed rate 21,408,289 7,609 13 9.05 8.67 10.50 68.1 10.4 43 Floating rate 1,983,968 3,347 45 9.19 8.81 10.50 97.1 13.7 Months 44 Total long term 1,979,451 6,574 50 9.45 9.17 10.50 95.0 7.8 45 Fixed rate 863,487 5,672 41 9.28 9.15 10.50 97.7 5.7 46 Floating rate .. 1,115,964 7,496 57 9.58 9.18 10.50 92.9 9.4 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • August 1985 4.23 TERMS OF LENDING AT COMMERCIAL BANKS SURVEY of Loans Made, May 6-10, 1985' -Continued A. Commercial and Industrial Loans—Continued Weighted Loan rate (percent) AAmmoouunntt AAvveerraaggee average Loans Partici- Characteristics ( o t o f h f o d u l o o s l a a la n n r s d s s ) ( o t f h o d s u o iz s l e a la n r d s s ) mmaattuurriittyy22 W av e e ig ra h g te e d SSttaannddaarrdd q I u n a t r e t r il - e c m o ( a m p d e m e r c i u t e m n n d t e ) e n r t (p p l e a o r t a c i n o e s n n t ) Days effective3 range5 OTHER BANKS 1 Overnight6 2,121,553 654 * 9.14 .53 8.65-9.03 59.3 .5 2 One month and under 1,628,130 105 21 10.57 .36 8.91-11.62 57.2 9.0 3 Fixed rate 1,201,266 101 20 10.33 .48 8.86-11.07 53.4 7.2 4 Floating rate 426,864 118 22 11.24 .25 9.40-12.17 68.2 14.1 5 Over one month and under a year 4,529,961 35 158 12.10 .41 10.92-13.73 48.0 8.4 6 Fixed rate 2,022,138 21 106 12.45 .49 10.26-14.30 30.5 5.7 7 Floating rate 2,507,823 78 200 11.83 .40 10.92-13.24 62.0 10.6 8 Demand7 2,703,288 116 * 11.20 .14 10.92-12.19 61.1 13.8 9 Fixed rate 398,501 128 * 9.65 .67 8.79-11.07 60.3 1.9 10 Floating rate 2,304,787 114 * 11.47 .09 11.02-12.28 61.2 15.9 11 Total short term 10,982,932 64 91 11.08 .34 8.97-12.68 54.8 8.3 12 Fixed rate (thousands of dollars) . 5,743,183 50 45 10.59 .38 8.80-12.55 48.0 3.8 13 1-24 644,571 7 106 14.14 .25 13.38-15.22 23.2 1.0 14 25-49 298,542 33 120 13.41 .13 12.68-14.48 11.0 .1 15 50-99 298,885 72 121 13.33 .33 12.37-14.03 6.4 .2 16 100-499 573,032 159 65 13.16 .61 12.01-14.54 16.1 2.2 17 500-999 169,033 691 51 10.62 .25 9.25-11.52 53.7 3.4 18 1000 and over 3,759,118 4,316 18 9.14 .18 8.71-9.31 63.1 5.2 19 Floating rate (thousands of dollars). 5,239,749 93 174 11.62 .27 11.02-12.68 62.2 13.2 20 1-24 282,524 9 150 13.22 .33 12.13-14.37 48.4 1.0 21 25-49 295,874 33 135 12.81 .07 12.13-13.37 54.7 2.2 22 50-99 495,746 66 176 12.84 .25 12.13-13.80 53.9 2.1 23 100-499 1,281,622 178 202 12.38 .22 11.51-13.24 58.4 8.7 24 500-999 428,234 682 152 11.57 .08 11.02-12.13 61.8 6.7 25 1000 and over 2,455,749 3,473 169 10.66 .26 9.11-11.85 68.3 21.6 Months 26 Total long term 1,399,897 43 54 12.71 .56 11.07-14.17 39.0 10.2 27 Fixed rate (thousands of dollars) 441,896 21 46 14.90 1.15 12.54-14.65 11.1 6.6 28 1-99 314,575 15 41 16.09 1.22 14.37-15.50 2.7 .1 29 100-499 28,928 225 50 13.70 .82 12.13-17.23 33.7 2.7 30 500-999 14,755 629 81 12.87 .54 12.13-14.17 16.4 11.1 31 1000 and over 83,638 2,142 56 11.24 .64 10.45-12.54 34.2 31.6 32 Floating rate (thousands of dollars) 958,000 82 57 11.70 .44 11.02-12.75 51.8 11.8 33 1-99 204,410 21 47 13.26 .32 12.13-14.93 28.6 2.5 34 100-499 241,391 164 57 12.30 .13 11.57-12.75 36.8 6.1 35 500-999 60,576 670 37 11.58 .22 11.02-12.68 69.3 11.6 36 1000 and over 451,623 3,657 65 10.69 .45 9.24-12.13 68.0 19.1 Loan rate (percent) DDaayyss PPrriimmee rraattee99 Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 1,894,269 6,783 8.85 8.48 10.50 58.2 .6 38 One month and under 980,419 1,605 18 9.08 8.71 10.53 68.5 9.6 39 Over one month and under a year 1,239,378 157 144 9.62 9.27 10.86 71.4 10.1 40 Demand7 758,029 307 * 9.23 8.87 10.82 67.6 13.2 41 Total short term 4,872,094 433 48 9.15 8.79 10.65 65.1 6.8 42 Fixed rate 3,685,489 431 26 9.06 8.69 10.60 60.5 5.0 43 Floating rate 1,186,605 440 155 9.45 9.09 10.79 79.3 12.5 Months 44 Total long term 284,651 131 75 9.74 9.33 10.95 53.8 20.3 45 Fixed rate 73,987 37 48 11.56 11.01 12.05 8.3 12.1 46 Floating rate .. 210,664 1,325 84 9.10 8.75 10.56 69.7 23.2 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A73 4.23 Continued B. Construction and Land Development Loans Loan rate (percent) AAmmoouunntt AAvveerraaggee WWeeiigghhtteedd LLooaannss PPaarrttiiccii-- Characteristics ooff llooaannss ssiizzee aavveerraaggee mmaaddee uunnddeerr ppaattiioonn (( oo tthh ff oo dd uu oo ss ll aa llaa nn rr dd ss ss )) (( oo tthh ff oo dd uu oo ss ll aa llaa nn rr dd ss ss )) (( mm mm aa oo tt nn uu tt rr hh iitt ss yy ))22 W e a f v f e e e i c g ra t h i g t v e e e d 3 St e a r n r d o a r4 r d q r I u a n a n t r e g t r i e l - 5 e ccoo (( mm ppee mm rrcc iitt ee mm nntt ee )) nn tt ((pp ll ee oo rr aa cc nn ee ss nn tt)) ALL BANKS 1 Total 2,781,435 122 9 13.02 .53 11.02-14.74 69.7 6.8 2 Fixed rate (thousands of dollars) .. 1,811,577 129 8 13.51 .88 10.54-14.94 74.6 6.9 3 1-24 87,720 13 7 16.64 .98 12.76-24.75 60.6 .1 4 25-49 73,346 29 8 17.35 .96 13.31-24.74 95.0 .4 5 50-99 111,127 76 5 14.45 * 14.45-14.54 59.8 .0 6 100-499 874,869 264 12 15.08 .38 14.09-16.08 66.1 .5 7 500 and over 664,514 5,764 3 10.44 .57 10.13-10.81 87.7 18.2 8 Floating rate (thousands of dollars) 969,859 110 11 12.11 .24 11.57-12.75 60.7 6.6 9 1-24 63,156 12 8 14.16 .34 13.03-14.93 38.5 .8 10 25-49 56,003 33 10 13.56 .26 12.68-14.75 48.7 4.2 11 50-99 43,550 70 10 12.57 .12 12.13-13.24 78.8 7.7 12 100-499 221,927 221 13 12.29 .08 11.85-12.68 70.9 9.1 13 500 and over 585,222 1,763 11 11.65 .20 10.47-12.68 59.0 6.4 By type of construction 14 Single family 746,918 54 12 14.66 .65 12.91-14.94 44.6 3.9 15 Multifamily 261,908 475 9 11.85 .28 10.80-12.68 34.0 11.7 16 Nonresidential 1,772,610 209 8 12.50 .52 10.47-14.09 85.6 7.3 48 LARGE BANKS 1 Total 860,251 914 6 10.58 .29 10.13-11.85 96.9 14.4 2 Fixed rate (thousands of dollars) .. 581,452 3,389 3 10.26 .44 10.13-10.54 97.4 19.5 3 1-24 562 14 8 13.70 .08 13.24-14.65 93.4 8.8 4 25-49 * * * * * * * * 5 50-99 * * * * * * * * 6 100-499 7,377 260 8 11.78 .14 11.55-13.52 92.2 48.2 7 500 and over 572,895 6,506 2 10.24 .43 10.13-10.54 97.5 19.2 8 Floating rate (thousands of dollars) 278,800 362 13 11.24 .13 8.81-12.40 96.0 3.8 9 1-24 2,695 10 8 12.65 .12 12.13-13.24 95.4 .0 10 25-49 3,384 37 11 12.52 .10 12.13-13.24 97.0 20.5 11 50-99 6,223 70 9 12.61 .05 12.13-12.75 90.8 6.3 12 100-499 56,307 243 13 12.34 .06 12.13-12.68 96.2 5.2 13 500 and over 210,190 2,102 13 10.87 .24 8.81-12.13 96.1 3.1 By type of construction 14 Single family 78,302 316 9 12.27 .16 11.85-12.68 94.2 29.7 15 Multifamily 41,026 327 8 12.32 .25 12.13-12.57 93.5 60.8 16 Nonresidential 740,924 1,304 5 10.30 .13 8.81-10.81 97.4 10.2 OTHER BANKS 1 Total 1,921,184 88 11 14.11 .58 12.55-14.94 57.5 3.4 2 Fixed rate (thousands of dollars) .. 1,230,125 89 11 15.04 1.00 14.09-16.08 63.8 .9 3 1-24 87,158 13 7 16.66 1.07 12.76-24.75 60.4 .0 4 25-49 72,960 29 8 17.37 1.03 13.31-24.74 95.1 .3 5 50-99 110,896 76 5 14.46 .33 14.45-14.54 59.7 .0 6 100-499 867,492 264 12 15.10 .44 14.09-16.08 65.9 .0 7 500 and over * * * * * * * * 8 Floating rate (thousands of dollars) 691,059 86 11 12.47 .26 11.58-13.24 46.4 7.8 9 1-24 60,461 12 8 14.23 .36 13.10-14.93 35.9 .9 10 25-49 52,619 32 10 13.63 .28 12.68-14.75 45.6 3.2 11 50-99 37,328 70 10 12.56 .13 12.13-13.24 76.8 7.9 12 100-499 165,620 215 12 12.28 .09 11.85-12.68 62.3 10.4 13 500 and over 375,032 1,616 11 12.09 .18 11.46-12.68 38.2 8.3 By type of construction 14 Single family 668,616 49 12 14.94 .68 13.31-15.87 38.7 .9 15 Multifamily 220,882 518 9 11.76 .29 10.47-12.68 22.9 2.6 16 Nonresidential . 1,031,686 130 10 14.08 .63 12.68-16.08 77.1 5.2 For notes see end of table. *Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • August 1985 4.23 TERMS OF LENDING AT COMMERCIAL BANKS SURVEY of Loans Made, May 6-10, 1985'—Continued C. Loans to Farmers11 Size class of loans (thousands) Characteristics All sizes $1-9 $10-24 $25-49 $50-99 $100-249 $250 and over ALL BANKS 1 Amount of loans (thousands of dollars) 1,313,837 175,526 203,050 183,051 164,258 277,549 310,404 2 Number of loans 72,552 48,544 13,730 5,242 2,537 2,118 382 3 Weighted average maturity (months)2 8.5 7.4 8.3 7.9 8.7 11.5 6.6 4 Weighted average interest rate (percent)3 13.07 14.04 13.30 13.83 13.25 13.36 11.57 5 Standard error4 .28 .20 .30 .55 .27 .46 .65 6 Interquartile range5 12.13-13.97 13.42-14.76 12.38-13.98 13.31-14.33 12.50-13.95 12.23-13.% 10.89-12.55 By purpose of loan 7 Feeder livestock 12.93 13.97 13.38 13.60 12.52 13.70 11.71 8 Other livestock 12.94 14.05 13.78 13.73 13.07 13.59 11.61 9 Other current operating expenses 13.46 13.95 13.23 13.44 13.52 13.67 12.83 10 Farm machinery and equipment 14.10 14.62 13.55 * * * * 11 Other 11.96 14.24 13.21 13.44 12.69 12.92 10.63 Percentage of amount of loans 12 With floating rates 46.2 31.6 26.3 39.1 47.5 48.5 69.1 13 Made under commitment 42.0 26.6 21.0 34.4 30.2 43.2 74.1 By purpose of loan 14 Feeder livestock 18.6 11.5 14.6 22.6 13.9 19.2 24.7 15 Other livestock 11.6 6.6 5.6 11.7 18.2 11.2 15.3 16 Other current operating expenses 44.1 65.6 61.3 48.5 58.1 29.4 24.0 17 Farm machinery and equipment 7.0 10.5 7.9 * * * * 18 Other 18.2 5.4 10.2 9.2 6.8 25.1 36.0 48 LARGE BANKS11 1 Amount of loans (thousands of dollars) 345,852 7,149 13,463 12,817 17,527 34,944 259,952 2 Number of loans 3,701 1,683 909 386 266 230 227 3 Weighted average maturity (months)2 4.7 6.9 7.1 8.2 7.8 7.3 3.8 4 Weighted average interest rate (percent)3 11.55 12.96 12.57 12.58 12.31 12.11 11.28 5 Standard error4 .23 .12 .17 .16 .14 .35 .33 6 Interquartile range5 10.92-12.55 12.28-13.37 11.82-13.24 12.00-13.31 11.62-13.10 11.30-12.82 10.58-12.14 By purpose of loan 7 Feeder livestock 11.84 12.49 12.32 11.87 12.37 12.14 11.73 8 Other livestock 11.69 13.15 12.75 12.47 * 11.67 11.61 9 Other current operating expenses 12.25 12.88 12.52 12.67 12.36 12.16 12.08 10 Farm machinery and equipment 13.32 13.18 13.19 * * * * 11 Other 10.78 13.24 12.59 12.58 12.21 12.19 10.50 Percentage of amount of loans 12 With floating rates 73.6 80.6 83.1 88.3 93.3 91.7 68.4 13 Made under commitment 79.6 73.5 77.3 78.7 88.2 82.9 79.0 By purpose of loan 14 Feeder livestock 27.5 11.0 14.3 15.1 19.8 40.0 28.1 15 Other livestock 16.2 4.3 8.2 10.0 * 13.3 18.2 16 Other current operating expenses 20.1 50.5 47.5 47.7 39.5 25.0 14.6 17 Farm machinery and equipment .6 4.5 4.7 * * * * 18 Other 34.6 19.6 20.7 15.1 28.0 19.8 39.1 OTHER BANKS11 1 Amount of loans (thousands of dollars) 967,985 168,377 189,587 170,234 146,731 242,606 * 2 Number of loans 68,852 46,860 12,821 4,856 22,,227722 1,888 * 3 Weighted average maturity (months)2 9.6 7.4 8.4 7.8 88..88 11.9 * 4 Weighted average interest rate (percent)3 13.62 14.09 13.35 13.92 13.37 13.53 * 5 Standard error4 .14 .15 .24 .53 .23 .29 * 6 Interquartile range5 12.75-14.17 13.42-14.76 12.40-13.98 13.42-14.33 12.50-13.95 12.62-13.% * By purpose of loan 7 Feeder livestock 13.63 14.03 13.46 13.68 * * * 8 Other livestock 13.67 14.07 13.89 * * * * 9 Other current operating expenses 13.63 13.98 13.26 13.50 13.61 13.85 * 10 Farm machinery and equipment 14.12 14.64 13.56 * * * 11 Other 13.13 14.41 13.30 13.56 * * * Percentage of amount of loans 12 With floating rates 36.5 29.5 22.3 35.4 42.0 42.3 * 13 Made under commitment 28.5 24.6 17.0 31.1 23.3 37.4 * By purpose of loan 14 Feeder livestock 15.4 11.5 14.6 23.1 * * * 15 Other livestock 10.0 6.7 5.4 * * * * 16 Other current operating expenses 52.7 66.2 62.3 48.6 60.3 30.0 * 17 Farm machinery and equipment 9.4 10.8 8.2 * * * * 18 Other 12.4 4.8 9.5 8.7 * * * For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A75 NOTES TO TABLE 4.23 1. The survey of terms of bank lending to business collects data on gross loan 4. The chances are about two out of three that the average rate shown would extensions made during the first full business week in the mid-month of each differ by less than this amount from the average rate that would be found by a quarter by a sample of 340 commercial banks of all sizes. The sample data are complete survey of lending at all banks. blown up to estimate the lending terms at all insured commercial banks during that 5. The interquartile range shows the interest rate range that encompasses the week. The estimated terms of bank lending are not intended for use in collecting middle 50 percent of the total dollar amount of loans made. the terms of loans extended over the entire quarter or residing in the portfolios of 6. Overnight loans are loans that mature on the following business day. those banks. Construction and land development loans include both unsecured 7. Demand loans have no stated date of maturity. loans and loans secured by real estate. Thus, some of the construction and land 8. The approximate annual interest rate on each loan—without regard to development loans would be reported on the statement of condition as real estate compounding—is calculated from survey data on the stated rate and other terms loans and the remainder as business loans. The survey of terms of bank lending to of the loan; then in computing the average of these approximate nominal rates, fanners covers about 250 banks selected to represent all sizes of banks. Mortgage each loan is weighted by its dollar amount. loans, purchased loans, foreign loans, and loans of less than $1,000 are excluded 9. The prime rate reported by each bank is weighted by the volume of loans from the survey. extended and then averaged. As of September 30, 1984, average domestic assets of 48 large banks were $14.1 10. This survey provides data on gross loan extensions made during one week billion and assets of the smallest of these banks were $2.8 billion. For all insured of each quarter. The proportion of these loan extensions that is made at rates banks total domestic assets averaged $142 million. below prime may vary substantially from the proportion of such loans outstanding 2. The weighted average maturity is calculated only for loans with a stated date in bank loan portfolios. of maturity (that is, loans payable on demand are excluded). In computing the 11. Among banks reporting loans to farmers, most "large banks" had over $500 average, each loan is weighted by its dollar amount. million in total assets, and most "other banks" had total assets below $500 3. The approximate compounded annual interest rate on each loan is calculated million. from survey data on the stated rate and other terms of the loan; then, in computing the average of these approximate effective rates, each loan is weighted by its dollar amount. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • August 1985 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1984' Millions of dollars All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies 1 Total assets5 272,443 215,826 56,617 191,816 5,880 46,292 14,159 6,547 7,749 2 Cash and due from depository institutions 62,647 56,862 5,785 53,039 332 5,582 2,926 309 459 3 Currency and coin (U.S. and foreign) 30 28 2 22 1 2 3 2 1 4 Balances with Federal Reserve Banks 1,085 1,023 62 916 26 44 45 42 12 5 Balances with other central banks 37 36 2 35 1 0 1 0 1 6 Demand balances with commercial banks in United States 11,,446622 11,,224477 215 11,,115577 81 96 50 23 55 7 All other balances with depository institutions in United States and with banks in foreign countries 59,830 54,332 5,498 50,729 220 55,,443366 22,,881199 238 388 8 Time and savings balances with commercial banks in United States 30,279 26,942 33,,333377 24,873 188 33,,112255 11,,666633 151 279 9 Balances with other depository institutions in United States 92 63 29 63 0 4 0 0 26 10 Balances with banks in foreign countries 29,459 27,328 2,132 25,793 33 2,307 1,156 87 84 11 Foreign branches of U.S. banks 2,019 1,939 81 1,893 6 66 46 0 9 12 Other banks in foreign countries 27,440 25,389 2,051 23,900 27 2,241 1,111 87 75 13 Cash items in process of collection 202 196 6 181 2 5 8 3 2 14 Total securities, loans, and lease financing receivables 151,079 115,235 35,844 99,748 4,522 27,978 9,667 3,575 5,589 15 Total securities, book value 11,597 10,111 1,486 9,534 163 1,300 405 35 158 16 U.S. Treasury 4,705 4,423 283 4,175 146 60 207 17 100 17 Obligations of other U.S. government agencies and corporations 587 572 15 557 0 15 0 12 2 18 Obligations of states and political subdivisions in United States 77 68 10 54 0 1 13 1 9 19 Other bonds, notes, debentures, and corporate stock .. 6,228 5,049 1,179 4,748 17 1,225 186 5 47 20 Federal funds sold and securities purchased under agreements to resell 8,983 7,837 1,146 7,389 639 506 287 95 67 By holder 21 Commercial banks in United States 7,577 6,706 870 6,277 374 496 269 95 66 22 Others 1,407 1,131 276 1,112 265 10 19 0 1 By type 23 One-day maturity or continuing contract 8,184 7,042 1,143 6,594 639 503 287 95 66 24 Securities purchased under agreements to resell 90 60 30 60 16 0 0 0 14 25 Other 8,095 6,982 1,113 6,534 623 503 287 95 53 26 Other securities purchased under agreements to resell 799 795 4 795 0 3 0 0 1 27 Total loans, gross 139,632 105,229 34,404 90,306 4,360 26,722 9,268 3,543 5,433 28 LESS: Unearned income on loans 150 104 46 92 2 44 6 3 2 29 EQUALS: Loans, net 139,483 105,124 34,358 90,214 4,358 26,678 9,262 3,540 5,431 Total loans, gross, by category 30 Real estate loans 5,085 2,444 2,641 1,562 23 1,805 336 264 1,095 31 Loans to financial institutions 50,960 38,732 12,227 34,283 903 10,958 3,446 610 759 32 Commercial banks in United States 24,902 17,639 7,263 15,608 179 7,264 1,468 272 110 33 U.S. branches and agencies of other foreign banks .. 21,278 14,331 6,947 12,459 179 6,927 1,421 216 77 34 Other commercial banks 3,624 3,309 315 3,149 0 337 48 56 33 35 Banks in foreign countries 22,563 17,942 4,621 16,554 675 3,391 986 337 620 36 Foreign branches of U.S. banks 862 625 237 593 29 166 27 5 41 37 Other 21,701 17,317 4,385 15,961 645 3,225 959 332 579 38 Other financial institutions 3,494 3,150 343 2,121 50 303 992 1 29 39 Loans for purchasing or carrying securities 2,288 2,218 70 2,143 30 115 0 0 0 40 Commercial and industrial loans 64,505 49,273 15,232 40,585 1,683 11,951 4,973 2,463 2,850 41 U.S. addressees (domicile) 41,854 31,285 10,569 24,098 252 9,026 4,368 1,750 2,358 42 Non-U.S. addressees (domicile) 22,651 17,989 4,663 16,487 1,431 22,,992255 604 713 492 43 Loans to individuals for household, family, and other personal expenditures 276 246 30 201 3 25 8 28 10 44 All other loans 16,519 12,315 4,204 11,532 1,718 1,867 505 178 719 45 Loans to foreign governments and official institutions 15,667 11,595 4,073 10,912 1,705 1,771 473 128 679 46 Other 852 721 132 621 13 97 33 50 40 47 Lease financing receivables 0 0 0 0 0 0 0 0 0 48 All other assets 49,734 35,892 13,842 31,639 387 12,226 1,279 2,568 1,634 49 Customers' liability on acceptances outstanding 19,578 14,820 4,757 14,380 55 4,692 147 212 92 50 U.S. addressees (domicile) 12,234 8,015 4,218 7,769 7 4,277 130 36 14 51 Non-U.S. addressees (domicile) 7,344 6,805 539 6,611 48 415 17 176 77 52 Net due from related banking institutions6 23,273 15,614 7,658 12,362 150 6,395 826 2,229 1,310 53 Other 6,883 5,457 1,426 4,897 182 1,139 306 128 232 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 4.30 Continued All states2 New York Other states2 IItteemm Total Branches3 Agencies Branches3 Agencies ff tt oo CC oo rr aa tt nn aa ll ii ii ll -- aa 44 ,, bb II rr ll aa llii nn nn cc oo hh iiss ee ,, ss Branches Agencies 54 Total liabilities5 272,443 215,826 56,617 191,816 5,880 46,292 14,159 6,547 7,749 55 Total deposits and credit balances 147,641 127,254 20,387 116,804 1,717 17,379 4,825 3,704 3,212 56 Individuals, partnerships, and corporations 45,230 41,685 3,544 35,550 79 1,628 1,918 3,291 2,765 57 U.S. addressees (domicile) 25,010 24,945 65 19,724 10 369 1,696 3,180 30 58 Non-U.S. addressees (domicile) 20,220 16,741 3,480 15,826 68 1,259 222 110 2,735 59 U.S. government, states, and political subdivisions in United States 109 109 0 26 0 6 12 65 0 60 All other 102,303 85,460 16,843 81,228 1,639 15,746 2,894 348 448 61 Foreign governments and official institutions .... 7,101 6,772 328 6,571 169 198 39 7 118 62 Commercial banks in United States 41,304 31,658 9,646 29,598 755 9,251 1,374 189 137 63 U.S. branches and agencies of other foreign banks 31,060 23,177 7,883 21,496 377 7,878 1,192 74 42 64 Other commercial banks in United States 10,244 8,481 1,763 8,102 377 1,373 182 115 96 65 Banks in foreign countries 53,341 46,524 6,817 44,581 696 6,271 1,470 148 176 66 Foreign branches of U.S. banks 7,030 5,175 1,855 4,749 264 1,670 312 18 16 67 Other banks in foreign countries 46,311 41,348 4,963 39,831 432 4,601 1,158 130 160 68 Certified and officers' checks, travelers checks, and letters of credit sold for cash 557 506 51 479 19 26 12 4 17 69 Demand deposits 3,577 3,291 286 2,984 19 101 147 95 230 70 Individuals, partnerships, and corporations 1,972 1,821 151 1,563 0 66 129 80 134 71 U.S. addressees (domicile) 1,199 1,199 0 967 0 32 125 76 0 72 Non-U.S. addressees (domicile) 773 622 151 596 0 34 4 5 134 73 U.S. government, states, and political subdivisions in United States 7 7 0 6 0 0 1 0 0 74 All other 1,597 1,462 135 1,416 19 35 17 14 96 75 Foreign governments and official institutions .... 260 256 4 247 0 3 2 7 1 76 Commercial banks in United States 139 90 50 86 0 1 1 2 50 77 U.S. branches and agencies of other foreign banks 6 6 0 6 0 0 0 0 0 78 Other commercial banks in United States 133 84 50 80 0 1 1 2 50 79 Banks in foreign countries 641 611 30 605 0 5 3 0 28 80 Certified and officers' checks, travelers checks, and letters of credit sold for cash 557 506 51 479 19 26 12 4 17 81 Time deposits 142,756 122,914 19,842 112,998 1,595 17,170 4,594 3,518 2,882 82 Individuals, partnerships, and corporations 42,138 38,933 3,205 33,284 43 1,456 1,706 3,119 2,531 83 U.S. addressees (domicile) 23,157 23,157 0 18,366 0 281 1,491 3,019 0 84 Non-U.S. addressees (domicile) 18,982 15,777 3,205 14,918 43 1,175 215 100 2,531 85 U.S. government, states, and political subdivisions in United States 101 101 0 20 0 5 11 65 0 86 All other 100,516 83,879 16,637 79,694 1,552 15,708 2,877 334 351 87 Foreign governments and official institutions .... 6,800 6,502 299 6,309 145 193 37 0 117 88 Commercial banks in United States 41,143 31,560 9,584 29,503 743 9,249 1,374 187 88 89 U.S. branches and agencies of other foreign banks 31,052 23,170 7,882 21,489 377 7,877 1,192 74 42 90 Other commercial banks in United States 10,091 8,390 1,701 8,014 365 1,372 181 113 46 91 Banks in foreign countries 52,572 45,818 6,754 43,881 665 6,266 1,467 147 146 92 Savings deposits 907 813 94 587 0 78 83 91 68 93 Individuals, partnerships, and corporations 906 812 94 587 0 78 83 91 68 94 U.S. addressees (domicile) 517 517 0 321 0 30 80 85 0 95 Non-U.S. addressees (domicile) 389 295 94 265 0 48 3 5 68 96 U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 97 All other 0 0 0 0 0 0 0 0 0 98 Credit balances 402 237 165 235 103 30 0 1 33 99 Individuals, partnerships, and corporations 213 118 95 117 36 28 0 1 32 100 U.S. addressees (domicile) 137 72 65 70 10 26 0 1 30 101 Non-U.S. addressees (domicile) 76 47 30 47 26 2 0 0 2 102 U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 103 All other 190 119 71 119 67 2 0 0 1 104 Foreign governments and official institutions .... 40 15 25 15 24 1 0 0 0 105 Commercial banks in United States 22 9 13 9 12 1 0 0 0 106 U.S. branches and agencies of other foreign banks 2 2 1 2 0 1 0 0 0 107 Other commercial banks in United States 19 7 12 7 12 0 0 0 0 108 Banks in foreign countries 128 95 33 95 31 1 0 0 1 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • August 1985 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1984'—Continued All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies 109 Federal funds purchased and securities sold under agreements to repurchase 21,659 15,778 5,881 14,962 540 5,326 442 257 131 By holder 110 Commercial banks in United States 18,491 13,017 5,474 12,294 213 5,241 375 257 109 111 Others 3,168 2,760 407 2,667 327 85 66 0 22 By type 112 One-day maturity or continuing contract 20,886 15,130 5,756 14,390 418 5,314 376 257 131 113 Securities sold under agreements to repurchase .. 2,159 2,136 23 2,120 7 26 0 0 7 114 Other 18,727 12,994 5,733 12,270 410 55,,228899 376 257 125 115 Other securities sold under agreements to repurchase 772 648 125 572 122 12 66 0 0 116 Other liabilities for borrowed money 39,512 24,126 15,386 21,362 1,939 13,072 1,604 685 849 117 Owed to banks 37,081 21,853 15,228 19,335 1,881 12,972 1,359 685 849 118 U.S. addressees (domicile) 35,729 20,769 14,960 18,329 1,835 12,876 1,337 652 701 119 Non-U.S. addressees (domicile) 1,352 1,084 268 1,006 46 96 22 34 148 120 Owed to others 2,431 2,273 158 2,028 58 100 245 0 0 121 U.S. addressees (domicile) 2,163 2,085 78 1,840 13 65 245 0 0 122 Non-U.S. addressees (domicile) 268 188 80 188 45 35 0 0 0 123 All other liabilities 63,631 48,668 14,963 38,688 1,683 10,515 7,289 1,900 3,556 124 Acceptances executed and outstanding 21,970 16,972 4,997 16,489 54 4,953 172 209 92 125 Net due to related banking institutions6 36,777 27,497 9,280 18,358 1,522 4,999 6,943 1,585 3,369 126 Other 4,885 4,199 686 3,841 107 562 174 105 96 MEMO 127 Time deposits of $100,000 or more 106,128 88,378 17,750 78,750 52 16,874 44,,553322 33,,339955 22,,552255 128 Certificates of deposit (CDs) in denominations of $100,000 or more 37,160 34,770 2,391 29,154 0 1,347 1,770 3,091 1,798 129 Other 6688,,996677 53,608 1155,,335599 4499,,559966 52 1155,,552277 22,,776622 304 727 130 Savings deposits authorized for automatic transfer and NOW accounts 86 54 32 33 0 13 8 8 25 131 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 0 0 0 0 0 0 0 0 0 132 Time certificates of deposit in denominations of $100,000 or more with remaining maturity of more than 12 months 11,044 10,875 169 8,940 0 221 461 1,285 138 133 Acceptances refinanced with a U.S.-chartered bank .. 3,945 2,657 1,288 2,121 97 1,326 0 401 1 134 Statutory or regulatory asset pledge requirement 58,605 57,490 1,115 49,501 1,038 146 7,872 24 23 135 Statutory or regulatory asset maintenance requirement 12,075 11,835 240 5,875 0 514 2,560 2,889 236 136 Commercial letters of credit 8,587 6,128 2,459 5,576 135 2,239 191 218 229 137 Standby letters of credit, total 27,282 23,779 3,503 20,252 92 2,930 2,291 626 1,092 138 U.S. addressees (domicile) 23,789 20,700 3,089 17,405 12 2,707 2,125 597 943 139 Non-U.S. addressees (domicile) 3,493 3,079 414 2,846 80 222 166 29 149 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit) 4,223 3,863 360 3,464 0 382 215 64 97 141 Holdings of commercial paper included in total gross loans 720 433 286 344 2 277 82 0 14 142 Holdings of acceptances included in total commercial and industrial loans 4,344 3,092 1,251 2,979 56 11,,220099 85 7 8 143 Immediately available funds with a maturity greater than one day (included in other liabilities for borrowed money) 29,218 18,396 10,823 16,016 1,560 9,541 1,501 498 103 144 Gross due from related banking institutions6 98,902 79,505 19,396 71,441 933 17,013 3,668 3,424 2,423 145 U.S. addressees (domicile) 26,600 19,393 7,207 14,631 84 6,529 1,339 2,973 1,043 146 Branches and agencies in the United States 25,824 18,850 6,974 14,109 74 6,307 1,325 2,971 1,037 147 In the same state as reporter 2,571 1,749 822 1,729 1 791 0 2 47 148 In other states 23,253 17,101 6,152 12,380 73 5,516 1,325 2,969 990 149 U.S. banking subsidiaries7 776 543 234 522 10 222 14 2 6 150 Non-U.S. addressees (domicile) 72,302 60,112 12,189 56,810 849 10,483 2,330 451 1,379 151 Head office and non-U.S. branches and agencies. 70,534 58,694 11,841 55,411 819 10,318 2,312 451 1,224 152 Non-U.S. banking companies and offices 1,767 1,419 349 1,399 30 165 18 0 156 153 Gross due to related banking institutions6 112,406 91,388 21,018 77,437 2,304 15,616 9,786 2,781 4,482 154 U.S. addressees (domicile) 26,611 18,815 7,796 11,735 20 4,936 4,406 2,010 3,504 155 Branches and agencies in the United States 26,164 18,478 7,686 11,500 20 4,869 4,322 2,000 3,454 156 In the same state as reporter 2,517 1,672 845 1,653 1 813 0 2 49 157 In other states 23,647 16,806 6,841 9,847 19 4,056 4,322 1,998 3,405 158 U.S. banking subsidiaries7 447 337 110 235 0 67 84 10 51 159 Non-U.S. addressees (domicile) 85,795 72,573 13,222 65,701 2,284 10,681 5,380 771 977 160 Head office and non-U.S. branches and agencies. 83,110 70,184 12,926 63,352 2,134 10,549 5,370 771 934 161 Non-U.S. banking companies and offices 2,685 2,389 296 2,349 150 131 10 0 43 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A79 4.30 Continued All states2 New York Other states2 IItteemm ffoo CC rr aa nn ll ii ii aa -- ,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets 267,653 211,540 56,113 188,059 5,848 45,862 13,464 6,560 7,861 163 Cash and due from depository institutions 59,929 54,276 5,654 50,679 307 5,413 2,769 302 459 164 Federal funds sold and securities purchased under agreements to resell 8,217 7,137 1,080 6,823 668 402 192 55 77 165 Total loans 134,512 102,202 32,310 87,529 4,207 25,753 8,871 3,547 4,605 166 Loans to banks in foreign countries 22,318 17,673 4,645 16,157 675 3,566 990 344 587 167 Total deposits and credit balances 142,313 122,247 20,066 112,138 1,669 17,011 4,724 3,630 3,141 168 Time CDs in denominations of $100,000 or more 35,050 32,742 2,308 27,157 0 1,335 1,722 3,118 11,,771199 169 Federal funds purchased and securities sold under agreements to repurchase 19,976 15,207 4,769 14,297 422 4,370 510 273 104 170 Other liabilities for borrowed money 39,434 24,440 14,995 21,874 1,885 12,833 1,467 654 722 171 Number of reports filed8 462 292 170 187 26 119 45 32 53 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, footnote 6). On the former monthly branch and agency report, available through "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign the G. 11 statistical release, gross balances were included in total assets and total Banks." This form was first used for reporting data as of June 30, 1980. From liabilities. Therefore, total asset and total liability figures in this table are not November 1972 through May 1980, U.S. branches and agencies of foreign banks comparable to those in the G. 11 tables. had filed a monthly FR 886a report. Aggregate data from that report were 6. "Related banking institutions" includes the foreign head office and other available through the Federal Reserve statistical release G.ll, last issued on U.S. and foreign branches and agencies of the bank, the bank's parent holding July 10, 1980. Data in this table and in the G.ll tables are not strictly comparable company, and majority-owned banking subsidiaries of the bank and of its parent because of differences in reporting panels and in definitions of balance sheet holding company (including subsidiaries owned both directly and indirectly). items. Gross amounts due from and due to related banking institutions are shown as 2. Includes the District of Columbia. memo items. 3. includes all offices that have the power to accept deposits from U.S. 7. "U.S. banking subsidiaries" refers to U.S. banking subsidiaries majorityresidents, including any such offices that are considered agencies under state law. owned by the foreign bank and by related foreign banks and includes U.S. offices 4. Agencies account for virtually all of the assets and liabilities reported in of U.S.-chartered commercial banks, of Edge Act and Agreement corporations, California. and of New York State (Article XII) investment companies. 5. Total assets and total liabilities include net balances, if any, due from or due 8. In some cases two or more offices of a foreign bank within the same to related banking institutions in the United States and in foreign countries (see metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 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 NAOMI P. SALUS, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS MICHAEL BRADFIELD, General Counsel JAMES L. KICHLINE, Director J. VIRGIL MATTINGLY, JR., Deputy General Counsel EDWARD C. ETTIN, Deputy Director RICHARD M. ASHTON, Associate General Counsel MICHAEL J. PRELL, Deputy Director OLIVER IRELAND, Associate General Counsel JOSEPH S. ZEISEL, Deputy Director RICKI TIGERT, Assistant General Counsel JARED J. ENZLER, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel DAVID E. LINDSEY, Associate Director ELEANOR J. STOCK WELL, Associate Director THOMAS D. SIMPSON, Deputy Associate Director OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Deputy Associate Director HELMUT F. WENDEL, Deputy Associate Director WILLIAM W. WILES, Secretary MARTHA BETHEA, Assistant Director BARBARA R. LOWREY, Associate Secretary ROBERT M. FISHER, Assistant Director JAMES MCAFEE, Associate Secretary DAVID B. HUMPHREY, Assistant Director SUSAN J. LEPPER, Assistant Director RICHARD D. PORTER, Assistant Director DIVISION OF CONSUMER PETER A. TINSLEY, Assistant Director AND COMMUNITY AFFAIRS LEVON H. GARABEDIAN, Assistant Director (Administration) GRIFFITH L. GARWOOD, Director JERAULD C. KLUCKMAN, Associate Director GLENN E. LONEY, Assistant Director DIVISION OF INTERNATIONAL FINANCE DOLORES S. SMITH, Assistant Director EDWIN M. TRUMAN, Director LARRY J. PROMISEL, Senior Associate Director DIVISION OF BANKING CHARLES J. SIEGMAN, Senior Associate Director SUPERVISION AND REGULATION DALE W. HENDERSON, Associate Director ROBERT F. GEMMILL, Staff Adviser WILLIAM TAYLOR, Director PETER HOOPER III, Assistant Director THOMAS E. CIMENO, JR., Deputy Director1 DAVID H. HOWARD, Assistant Director FREDERICK R. DAHL, Associate Director RALPH W. SMITH, JR., Assistant Director DON E. KLINE, Associate 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

A81 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 FLORENCE M. YOUNG, Adviser 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. BO WEN, Assistant Controller DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director WALTER W. KREIMANN, Associate Director GEORGE M. LOPEZ, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • August 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 LEWIS T. PRESTON, President PHILIP F. SEARLE, Vice President WILLIAM H. BOWEN, E. PETER GILLETTE, AND N. BERNE HART, Directors 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

A83 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 QUUANO, 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, Gainesville, Florida 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

A84 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, THE ECONOMETRICS OF PRICE DETERMINATION CONFER- Mail Stop 138, Board of Governors of the Federal Reserve ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 System, Washington, D.C. 20551. When a charge is indicat- pp. Cloth ed. $5.00 each; 10 or more to one address, ed, remittance should accompany request and be made $4.50 each. Paper ed. $4.00 each; 10 or more to one payable to the order of the Board of Governors of the Federal address, $3.60 each. Reserve System. Remittance from foreign residents should ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— be drawn on a U.S. bank. Stamps and coupons are not Regulation Z) Vol. I (Regular Transactions). 1969. 100 accepted. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- address, $2.00 each. TIONS. 1984. 120 pp. FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY ANNUAL REPORT. UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or address, $1.50 each. $2.00 each in the United States, its possessions, Canada, THE BANK HOLDING COMPANY MOVEMENT TO 1978: A and Mexico; 10 or more of same issue to one address, COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to $18.00 per year or $1.75 each. Elsewhere, $24.00 per one address, $2.25 each. year or $2.50 each. FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint each; 10 or more to one address, $1.50 each. of Part I only) 1976. 682 pp. $5.00. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; BANKING AND MONETARY STATISTICS. 1941-1970. 1976. 10 or more to one address, $1.25 each. 1,168 pp. $15.00. PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. ANNUAL STATISTICAL DIGEST $13.50 each. 1974-78. 1980. 305 pp. $10.00 per copy. NEW MONETARY CONTROL PROCEDURES: FEDERAL RE- 1980. 1981. 241 pp. $10.00 per copy. SERVE STAFF STUDY. 1981. 1981. 1982. 239 pp. $ 6.50 per copy. SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: 1982. 1983. 266 pp. $ 7.50 per copy. REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL 1983. 1984. 264 pp. $11.50 per copy. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. FEDERAL RESERVE CHART BOOK. Issued four times a year in FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- February, May, August, and November. Subscription ed at least monthly. (Requests must be prepaid.) includes one issue of Historical Chart Book. $7.00 per Consumer and Community Affairs Handbook. $60.00 per year or $2.00 each in the United States, its possessions, year. Canada, and Mexico. Elsewhere, $10.00 per year or Monetary Policy and Reserve Requirements Handbook. $3.00 each. $60.00 per year. HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- Securities Credit Transactions Handbook. $60.00 per year. tion to the Federal Reserve Chart Book includes one Federal Reserve Regulatory Service. 3 vols. (Contains all issue. $1.25 each in the United States, its possessions, three Handbooks plus substantial additional material.) Canada, and Mexico; 10 or more to one address, $1.00 $175.00 per year. each. Elsewhere, $1.50 each. Rates for subscribers outside the United States are as SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- follows and include additional air mail costs: RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in Federal Reserve Regulatory Service, $225.00 per year. the United States, its possessions, Canada, and Mexico; Each Handbook, $75.00 per year. 10 or more of same issue to one address, $13.50 per year THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A or $.35 each. Elsewhere, $20.00 per year or $.50 each. MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. THE FEDERAL RESERVE ACT, as amended through August 30, WELCOME TO THE FEDERAL RESERVE. 1984. with an appendix containing provisions of certain PROCESSING BANK HOLDING COMPANY AND MERGER APPLIother statutes affecting the Federal Reserve System. CATIONS. 576 pp. $7.00. THE MONETARY AUTHORITY OF THE FEDERAL RESERVE, REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- May 1984. (High School Level.) ERAL RESERVE SYSTEM. WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- 93 pp. $2.50 each. NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Each REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT XIII AMERIvolume, $3.00; 10 or more to one address, $2.50 each. CAN-GERMAN BIENNIAL CONFERENCE, March 1985 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 CONSUMER EDUCATION PAMPHLETS 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- Short pamphlets suitable for classroom use. Multiple copies TERNATIONAL TRADE AND OTHER ECONOMIC VARIAavailable without charge. BLES: A REVIEW OF THE LITERATURE, by Victoria S. Farrell with Dean A. DeRosa and T. Ashby McCown. January 1984. 21 pp. Alice in Debitland 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- Consumer Handbook on Adjustable Rate Mortgages DEUTSCHE MARK INTERVENTION, by Laurence R. Consumer Handbook to Credit Protection Laws Jacobson. October 1983. 8 pp. The Equal Credit Opportunity Act and . . . Age 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- The Equal Credit Opportunity Act and . . . Credit Rights in TWEEN EXCHANGE RATES AND INTERVENTION: A Housing REVIEW OF THE TECHNIQUES AND LITERATURE, by The Equal Credit Opportunity Act and . . . Doctors, Law- Kenneth Rogoff. October 1983. 15 pp. yers, Small Retailers, and Others Who May Provide Inci- 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTERdental Credit VENTION, AND INTEREST RATES: AN EMPIRICAL IN- The Equal Credit Opportunity Act and . . . Women VESTIGATION, by Bonnie E. Loopesko. November Fair Credit Billing 1983. 20 pp. Federal Reserve Glossary 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Guide to Federal Reserve Regulations INTERVENTION: A REVIEW OF THE LITERATURE, by How to File A Consumer Credit Complaint Ralph W. Tryon. October 1983. 14 pp. If You Borrow To Buy Stock 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET If You Use A Credit Card INTERVENTION: APPLICATIONS TO CANADA, GERMA- Instructional Materials of the Federal Reserve System NY, AND JAPAN, by Deborah J. Danker, Richard A. Series on the Structure of the Federal Reserve System Haas, Dale W. Henderson, Steven A. Symansky, and The Board of Governors of the Federal Reserve System Ralph W. Tryon. April 1985. 27 pp. The Federal Open Market Committee 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- Federal Reserve Bank Board of Directors MY, by Darrell Cohen and Peter B. Clark. January Federal Reserve Banks 1984. 16 pp. Monetary Control Act of 1980 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Organization and Advisory Committees FINANCIAL DEREGULATION, INTERSTATE BANKING, Truth in Leasing AND FINANCIAL SUPERMARKETS, by Stephen A. U.S. Currency Rhoades. February 1984. 8 pp. What Truth in Lending Means to You 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- LINES, AND THE LIMITS OF CONCENTRATION IN LO- CAL BANKING MARKETS, by James Burke. June 1984. 14 pp. STAFF STUDIES: Summaries Only Printed in the 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN Bulletin THE UNITED STATES, by Thomas D. Simpson and Studies and papers on economic and financial subjects that Patrick M. Parkinson. August 1984. 20 pp. are of general interest. Requests to obtain single copies of 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF the full text or to be added to the mailing list for the series THE LITERATURE, by John D. Wolken. November may be sent to Publications Services. 1984. 38 pp. 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAY- MENT COSTS, by William Dudley. November 1984. Staff Studies 115-125 are out of print. 15 pp. 142. MERGERS AND ACQUISITIONS BY COMMERCIAL BANKS, 1960-83, by Stephen A. Rhoades. December 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- DENCE ON COMPETITION AND PERFORMANCE IN 1984. 30 pp. BANKING MARKETS, by Timothy J. Curry and John T. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF Rose. Jan. 1982. 9 pp. THE ELECTRONIC FUND TRANSFER ACT: RECENT SURVEY EVIDENCE, by Frederick J. Schroeder. April 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- KET INTERVENTION, by Donald B. Adams and Dale 1985. 23 pp. W. Henderson. August 1983. 5 pp. 144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CON- SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- ING AND EQUAL CREDIT OPPORTUNITY LAWS, by VENTION: JANUARY-MARCH 1975, by Margaret L. Gregory E. Elliehausen and Robert D. Kurtz. May Greene. August 1984. 16 pp. 1985. 10 pp. 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- VENTION: SEPTEMBER 1977-DECEMBER 1979, by Margaret L. Greene. October 1984. 40 pp. 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret L. Greene. August 1984. 36 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 REPRINTS OF BULLETIN ARTICLES A Financial Perspective on Agriculture. 1/84. Most of the articles reprinted do not exceed 12 pages. Survey of Consumer Finances, 1983. 9/84. Bank Lending to Developing Countries. 10/84. Survey of Consumer Finances, 1983: A Second Report. The Commercial Paper Market since the Mid-Seventies. 6/82. 12/84. Applying the Theory of Probable Future Competition. 9/82. Union Settlements and Aggregate Wage Behavior in the International Banking Facilities. 10/82. 1980s. 12/84. Foreign Experience with Targets for Money Growth. 10/83. The Thrift Industry in Transition. 3/85. Intervention in Foreign Exchange Markets: A Summary of U.S. International Transactions in 1984. 5/85. Ten Staff Studies. 11/83. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 Index to Statistical Tables References are to pages A3-A79 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, 74 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, 76-79 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 Federal Reserve Banks and at foreign central banks and foreign countries (See Interest BANKERS acceptances, 9, 23, 24 rates) Bankers balances, 18-20 (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Bonds (See also U.S. government securities) Dividends, corporate, 35 New issues, 34 Rates, 24 EMPLOYMENT, 45 Branch banks, 21, 55, 76-79 Eurodollars, 24 Business activity, nonfinancial, 44 Business expenditures on new plant and equipment, 36 FARM mortgage loans, 39 Business loans (See Commercial and industrial loans) Federal agency obligations, 4, 9, 10, 11, 31, 32 Federal credit agencies, 33 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation, and types and Banks, by classes, 18 ownership of gross debt, 30 Federal Reserve Banks, 10 Receipts and outlays, 28, 29 Central banks, discount rates, 67 Treasury financing of surplus, or deficit, 28 Certificates of deposit, 24 Treasury operating balance, 28 Commercial and industrial loans Federal Financing Bank, 28, 33 Commercial banks, 16, 19, 70-72 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 Business loans, 70-73 Federal Land Banks, 38 Commercial and industrial loans, 16, 19, 21, 70-72 Federal National Mortgage Association, 33, 38, 39 Consumer loans held, by type, and terms, 40, 41 Federal Reserve Banks Loans sold outright, 19 Condition statement, 10 Nondeposit funds, 17 Discount rates (See Interest rates) Number, by classes, 18 U.S. government securities held, 4, 10, 11, 30 Real estate mortgages held, by holder and 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, 73 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, 76-79 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

A88 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 HOUSING, new and existing units, 49 Reserve requirements, 7 Reserves INCOME, personal and national, 44, 51, 52 Commercial banks, 18 Industrial production, 44, 47 Depository institutions, 3, 4, 5, 12 Installment loans, 40, 41 Federal Reserve Banks, 10 Insurance companies, 26, 30, 39 U.S. reserve assets, 54 Interest rates Residential mortgage loans, 38 Bonds, 24 Retail credit and retail sales, 40, 41, 44 Commercial and industrial loans, 70-72 Consumer installment credit, 41 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, 70 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 cash, Treasury currency, 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, 24 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, 35 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 Nontransaction balances, 3, 13, 19, 20 Open market transactions, 9 Outstanding, by type and holder, 26, 30 Rates, 24 OPEN market transactions, 9 U.S. international transactions, 53-67 PERSONAL income, 52 Utilities, production, 48 Prices Consumer and producer, 44, 50 VETERANS Administration, 38, 39 Stock market, 25 Prime rate, commercial banks, 23 WEEKLY reporting banks, 19-21 Producer prices, 44, 50 Wholesale (producer) prices, 44, 50 Production, 44, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A89 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. Herr 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 Thomas C. Melzer 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 John B. Davis, Jr. Gary H. Stern Michael W. Wright Thomas E. Gainor Helena 59601 Gene J. Etchart Robert F. McNellis KANSAS CITY 64198 Irvine O. Hockaday, Jr. Roger Guffey Robert G. Lueder Henry R. Czerwinski Denver 80217 James E. Nielson Wayne W. Martin Oklahoma City 73125 Patience Latting William G. Evans Omaha 68102 Kenneth L. Morrison Robert D. Hamilton DALLAS 75222 Robert D. Rogers Robert H. 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 Robert M. McGill 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

A90 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Mi illiliiliiilSIl T , ; l ^ HI ALASKA •BNlNiHSH i © "V, / / • J / YP < LEGEND —— Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

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