Federal Reserve Bulletin, 1986-01

VOLUME 72 • NUMBER 1 • JANUARY 1986 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost • Griffith L. Garwood • James L. Kichline • Edwin M. Truman Naomi P. Salus, Coordinator The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents L RECENT DEVELOPMENTS IN THE weeks. Most members expected such an BANKERS ACCEPTANCE MARKET approach to policy implementation to be consistent with growth of both M2 and M3 This article analyzes the rapid expansion of at annual rates of around 6 to 7 percent for the bankers acceptance market throughout the period from September to December. the 1970s and into the early 1980s and its Over the same period, growth in Ml was subsequent contraction of nearly 20 percent expected to slow markedly—also to an ansince June 1984. nual rate of 6 to 7 percent—and even slower growth would be acceptable in the context 13 INDUSTRIAL PRODUCTION of satisfactory economic performance, given the very rapid expansion experienced in Total industrial production for October previous months. The members agreed that 1985 was unchanged from that for Sepsomewhat greater or lesser reserve restraint tember. would be acceptable over the intermeeting period, depending on the behavior of the 15 STATEMENTS TO CONGRESS monetary aggregates and taking account of appraisals of the strength of the business Stephen H. Axilrod, Staff Director for Monexpansion, the performance of the dollar in etary and Financial Policy, Board of Goverforeign exchange markets, progress against nors of the Federal Reserve System, disinflation, and conditions in domestic and cusses the exchange markets for the dollar international credit markets. It was also in the aftermath of the G-5 meeting on understood that policy might be implement- September 22 and also the relationship ed with somewhat more flexibility than usuamong exchange market conditions and doal over the relatively short intermeeting mestic economic and credit developments, period, given the uncertainties associated before the Subcommittee on Domestic with particularly sensitive conditions in the Monetary Policy of the House Committee foreign exchange and other markets. The on Banking, Finance and Urban Affairs, members agreed that the intermeeting range November 7, 1985. for the federal funds rate, which provides a mechanism for initiating consultation of the 18 Mr. Axilrod clarifies the technical aspects Committee when its boundaries are persisof possible discount window lending to the tently exceeded, should be left unchanged Farm Credit System as well as to agriculturat 6 to 10 percent. al banks, before the Subcommittee on Economic Stabilization of the House Committee on Banking, Finance and Urban Affairs, 26 ANNOUNCEMENTS November 21, 1985. Final revisions to Regulation B. Issuance of staff guidelines for compliance 20 RECORD OF POLICY ACTIONS OF THE with the Credit Practices Rule. FEDERAL OPEN MARKET COMMITTEE Policy statement on payment of cash divi- At its meeting on October 1, 1985, the dends. Committee adopted a directive that called for maintaining the degree of reserve pres- Policy statement on repurchase agreement sure that had been sought in previous transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Quarterly report on financial results of A69 GUIDE TO TABULAR PRESENTATION, priced services. STATISTICAL RELEASES, AND SPECIAL TABLES New fee schedules for priced services. Changes to the operating schedule for Fed- A74 BOARD OF GOVERNORS AND STAFF wire. A76 FEDERAL OPEN MARKET COMMITTEE Proposal to amend Regulation J; proposal AND STAFF; ADVISORY COUNCILS to define perpetual debt securities as primary capital. A78 FEDERAL RESERVE BOARD Admission of four state banks to member- PUBLICATIONS ship in the Federal Reserve System. A81 INDEX TO STATISTICAL TABLES 31 LEGAL DEVELOPMENTS A83 FEDERAL RESERVE BANKS, BRANCHES, Revisions to Regulation B; various bank AND OFFICES holding company, bank service corporation, and bank merger orders; and pending A84 MAP OF FEDERAL RESERVE SYSTEM cases. 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

Recent Developments in the Bankers Acceptance Market Frederick H. Jensen and Patrick M. Parkinson total dollar acceptances declined about $11 bilof the Board's Division of Research and Statis- lion, or 15 percent. tics prepared this article. Chinhui Juhn provided Many analysts have pointed to the stagnation research assistance. of international trade and sharp declines in commodity prices as the primary reasons for the The market for dollar-denominated bankers ac- shrinkage of the market for bankers acceptances. ceptances grew rapidly throughout the 1970s and Although these factors undoubtedly have played into the early 1980s. The expanding dollar value a role, the substitution of alternative sources of of U.S. and world trade, and sharp increases in credit appears to have been more important. The the price of oil and other commodities whose shrinkage of the bankers acceptance market is shipment frequently is financed with accep- symptomatic of the declining role of U.S. banks tances, stimulated the growth of the market as direct providers of short-term credit to foreign through this period. In addition, the surge in banks and multinational nonfinancial corporamarket interest rates during the late 1970s greatly tions. More and more, such borrowers have increased the value of the exemption of certain obtained funding directly from domestic and types of acceptances from reserve requirements. foreign nonbank investors in the U.S. commer- As a result, the proportions of U.S. and world cial paper market and in the Eurodollar markets. trade that were financed with dollar acceptances In addition, sharp declines in market interest rose substantially. By the early 1980s, however, rates since mid-1982 have reduced the cost of many major accepting banks were unable to reserve requirements, thereby allowing bank accommodate further increases in demand for loans to be priced more competitively with acacceptance credit because they had reached stat- ceptance credit. utory limits on the amount of acceptances they could create. As a result, regional banks and U.S. agencies and branches of foreign banks THE INSTRUMENT AND ITS MARKET were able to expand their presence in this market, but not enough to keep the growth of the A bankers acceptance is a time draft drawn on a market from slowing or fees charged by accept- bank, usually to finance the shipment or tempoing banks from rising significantly. rary storage of goods. By "accepting" the draft, This restriction on supply spawned proposals the bank makes an unconditional promise to pay for remedial legislation, and in October 1982, the the holder of the draft a stated amount at a Congress passed the Bank Export Services Act, specified date. Thus the bank effectively substiwhich effectively doubled the statutory limits on tutes its own credit for that of a borrower and in acceptances. As anticipated, immediately fol- the process creates a negotiable instrument that lowing passage of this legislation the volume of may be freely traded. acceptance financing swelled and fees declined substantially, as the major accepting banks attempted to regain their market share. In early Creating an Acceptance 1983, however, the acceptance market began to contract in a trend that continued, on balance, In a typical transaction, a buyer of goods will through September 1985. Over this latter period, seek credit to finance the purchase until the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1986 goods can be resold. If the seller knows the ance is not held in portfolio, the bank records its buyer and does not need cash, the seller may be obligation as an "acceptance liability outstandwilling to extend open trade credit. But this is ing" and the corresponding asset, a claim on the infrequently the case with the financing of inter- borrower, as a "customer's liability on acceptnational trade, so the buyer often turns to its ance outstanding." bank, which is better acquainted with the buyer's Other types of transactions also are common. business and is a specialist in evaluating and The acceptance may not involve a letter of diversifying credit risk. The buyer could borrow credit: such "clean" acceptances are typically the funds directly from the bank, although for authorized by prior arrangement between the reasons outlined below, acceptance financing is buyer's bank and the seller's bank. Moreover, frequently less costly. the draft may be drawn on the seller's bank or When a bank agrees to provide acceptance some other bank, particularly if the buyer's bank credit to a buyer, it often notifies the seller is small and its acceptances are not traded wide- (perhaps through the seller's bank) that a letter of ly. In this case, the buyer's bank may arrange for credit has been issued authorizing the seller to another bank—perhaps a larger correspondent— draw a time draft on the bank for the amount of to accept the draft and agree to indemnify the the transaction. The letter of credit also specifies accepting bank against any losses that it might any conditions that must be met before the draft suffer in the event of a default. Alternatively, the will be accepted. These terms may require that smaller bank could accept the draft but arrange documents be attached to the draft that verify for a better-known bank to endorse it. By so shipment of the goods and that provide the bank doing, the buyer's bank retains the credit risk but assurance that the underlying transaction meets can offer the buyer access to acceptance financcertain regulatory requirements. When the draft ing at a lower cost than if it issued an acceptance is presented to the bank with the proper docu- on its own. ments, it is stamped "accepted" on its face, In other cases, the buyer may wish to pay the information about the nature of the underlying seller immediately upon shipment. Under these transaction is inscribed, and the draft is endorsed circumstances, the bank can extend short-term by an appropriate bank officer. credit to the buyer to finance the purchase, then By accepting the draft, the bank has acquired accept and discount a time draft drawn on it by an unconditional obligation to pay at maturity a the buyer and apply the proceeds to pay off the specified amount, either to the seller or, more short-term credit used to finance the purchase. frequently, to the holder of the instrument. The The buyer retains an obligation to repay the bank drawer of the draft, in this case the seller, at or before the maturity of the acceptance. remains secondarily liable to the holder in the Some acceptances do not arise from the shipevent of default by the bank. The bank's custom- ment or storage of goods. For example, a firm er—here, the buyer—has an obligation to pay the may draw a draft on its bank for acceptance in bank the same amount at or just before the order to borrow funds for working capital purmaturity date. The seller may choose to hold the poses. Such acceptances are termed "finance draft until maturity, but typically chooses to bills." receive immediate payment by selling the accept- In all cases, the accepting bank charges a fee, ance at a discount, usually to the accepting bank or "commission," for accepting the draft that itself. If the accepting bank purchases (dis- varies depending on the maturity of the draft as counts) the acceptance, it may elect to hold it in well as the creditworthiness of the borrower. its own portfolio. In this event, it is recorded as a Commissions are quoted in terms of basis points, loan to the borrower, the buyer of the goods in calculated on an annual basis. The bank also may this example, and must be funded like any other receive a fee if a letter of credit is involved and loan. More commonly, however, the bank will may hope to realize a difference in the price, elect to replenish its funds by selling (rediscount- comparable to a bid-asked spread, if it purchases ing) the acceptance into the secondary market, the acceptance for subsequent resale. Of course, either directly or through a dealer. If the accept- if it holds the acceptance in its loan portfolio to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Bankers Acceptance Market 3 maturity, the bank also earns a return equal to advantage of the exemption from reserve rethe original discount. The costs of the financing quirements. Concerned that such issuance entypically are borne by the borrower, in the abled banks to avoid reserve requirements on example above, the buyer. Even when, through CDs or other sources of funds, in mid-1973 the negotiation, the seller agrees to bear some of the Federal Reserve imposed reserve requirements costs, these likely will be reflected in the sales on ineligible acceptances, and their issuance price of the goods. declined precipitously. Today, few ineligible acceptances trade in the secondary market. Types of Acceptances There are three main types of eligible acceptances. The first, acceptances that finance the Virtually all acceptances traded in the United domestic shipment and storage of goods, histori- States are denominated in dollars, and only a cally has accounted for only a small amount of very small amount of dollar-denominated accep- total acceptances in the marketplace. The poputances are traded elsewhere. Thus the U.S. mar- larity of open trade credit in the United States, ket for acceptances has been almost synonymous where buyers and sellers are more likely to be with the market for dollar-denominated accep- accustomed to doing business with each other, is tances. The U.S. market is principally one for probably an important reason. The higher cost of "eligible" acceptances—that is, those that are of documentation relative to other types of accepthe type that are eligible for sale at a discount at tances may be another factor: domestic-storage Federal Reserve Banks. As a matter of practice, acceptances must be secured with a warehouse the Federal Reserve has discontinued discount- receipt, and until 1982, title documents had to be ing assets and instead provides funds to deposi- attached to acceptances used to finance domestic tories through collateralized advances. Conse- shipments. The second type of acceptance fiquently, the only practical significance of the nances U.S. imports and exports of goods. Beeligibility criteria is that eligible acceptances are fore the 1960s, this was by far the dominant not subject to reserve requirements: under Fed- category, but now it accounts for less than half of eral Reserve regulations, acceptances that are of total acceptance financing. The third, and now the type specified in section 13(7) of the Federal the largest, category is "third country" accep- Reserve Act not only are eligible for discount, as tances, which arise from the shipment of goods specified in section 13(6), but also are exempt between foreign countries. from reserve requirements. According to these Third-country acceptances became increasingregulations, eligible acceptances must grow out ly popular in the 1970s as foreign borrowers of the import or export of goods, the temporary found the U.S. acceptance market a highly atstorage of readily marketable staples, or the tractive source of short-term financing. The madomestic shipment of goods. In addition, eligible jority of third-country acceptances are of the acceptances must have an original maturity—or type known as "refinance bills." These bills "tenor"—of six months or less. typically originate with drafts drawn on a foreign The reserve status of ineligible acceptances is bank by one or more of its customers. Because an important factor that affects their issuance. the foreign bank may not be well known to U.S. For example, until 1973, all acceptance liabil- investors and its own acceptances would require ities, ineligible as well as eligible, were exempt a larger discount, it often will hold the accepfrom reserve requirements. During periods of tances drawn on it in its loan portfolio and tight credit, when below-market Regulation Q refinance these acceptances by drawing a draft ceilings on rates payable on certificates of depos- on a U.S. bank for acceptance. The U.S. bank its (CDs) restricted their issuance, banks created accepts the draft and advances funds to the a substantial volume of finance bills in order to foreign bank to finance the extension of credit by provide funds to their corporate customers. the foreign bank to its own customers. Because Even after the removal of interest rate ceilings on the foreign bank is the borrower in this transaclarge CDs in mid-1970, banks continued to issue tion, the market for refinance bills is an interbank sizable amounts of finance bills in order to take market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 1986 The Market for Acceptances 1. Yields on bankers acceptances and certificates of deposit The amount of dollar-denominated acceptances Percent outstanding depends on a variety of factors. An obvious one is the dollar value of transactions suitable for financing with eligible acceptances. Currently, more than 20 percent of U.S. imports and exports and more than 10 percent of thirdcountry shipments are funded in the U.S. acceptance market. Equally important are the cost and i i i i i i i i i i i i i i i availability of alternative sources of credit in the 1970 1975 1980 1985 United States and elsewhere. Data are quarterly averages of rates on three-month instruments; investment yield basis. From the point of view of the bank, acceptance financing is the functional equivalent of funding a loan with a deposit liability, such as a are institutions: money market mutual funds, CD. In either case, the bank has an unconditional trust departments, state and local governments, obligation to pay the holder of the instrument at insurance companies and other corporations, maturity as well as a claim on the borrower. pension funds, foreign central banks, and com- Because acceptances are not subject to an as- mercial banks. Smaller-denomination accepsessment for deposit insurance and eligible ac- tances may be placed directly with individuals by ceptances are exempt from reserve require- the accepting bank. ments, acceptance liabilities are a less costly The market for acceptances also offers advansource of funds than deposits. Moreover, be- tages to many borrowers. With the bank as its cause the acceptance commission is a front-end intermediary, a borrower with eligible transacfee and is not refundable, or is refundable only tions gains access to the nation's money marwith a penalty, the customer may be less likely to kets. And, because the cost to the bank of prepay an acceptance borrowing than certain financing eligible acceptances is lower than that other types of bank credit, particularly revolving of a direct loan funded with a deposit subject to loans with pricing tied to the prime rate. And reserve requirements, the bank may be able to because the maturities of the acceptance liability offer the financing at a lower "all in" rate (one and the corresponding asset are automatically including the discount plus fees and commismatched, acceptances carry none of the risk sions) than that on a direct loan. inherent in funding loans with deposits with Like the market for CDs, the acceptance mardifferent maturities or repricing schedules. ket is an over-the-counter market. The market is For an investor, a bankers acceptance is a highly liquid and is supported by around 30 close substitute for other bank liabilities such as dealers and a dozen brokers. Dealers quote bid CDs. Consequently, bankers acceptances trade and asked prices for round lots of $5 million. If at rates very close to those on CDs (see chart 1); the transaction to be financed is larger, several in recent years, yields on bankers acceptances drafts of $5 million each will be drawn. For have consistently been within 10 basis points of smaller transactions, a number of drafts of simithose on CDs. Although bankers acceptances are lar maturities drawn on the same bank will be not federally insured, many investors view them packaged to trade as a round lot. Typical maturias one of the most secure money market instru- ties are one, three, and six months, with the ments because their historical default rate is very average reportedly around three months. low. Also, some investors may feel that the likelihood of repayment is increased by the secondary obligation of the drawer to pay the holder GROWTH OF THE MARKET at maturity if the accepting bank does not (though as a rule, investors do not know the During the 1970s, the U.S. acceptance market identity of the drawer). The principal investors expanded rapidly. From 1973 to 1979, total eligi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Bankers Acceptance Market 5 ble acceptances increased more than fivefold, 3. Total world trade, U.S. and third country, and from $7 billion to $43 billion, while, by compari- proportions financed by U.S. dollar acceptances son, total loans at U.S. banking offices roughly Billions of dollars doubled. Several factors seem to have been at Trade 1 work. The oil price hikes of 1973-74 and 1978-80 boosted the dollar value of oil imports and world 2,000 trade and had a particularly pronounced impact mmm on the demand for financing of third-country acceptances (see chart 2). 1,500 However, the importance of the growth of trade as an influence on the growth of the acceptance market is often overstated. The proportions of U.S. and third-country trade financed in the U.S. acceptance market are relatively small and are far from constant (see chart 3). Inasmuch as acceptances are free from reserve requirements U.S. imports and exports and the opportunity cost of those requirements • • • • • • • • • • •I varies proportionately with interest rates, the Share, in percent cost advantage of acceptances over other forms Share financed by U.S. dollar acceptances2 of bank credit widens as interest rates rise. Hence the general uptrend in interest rates during the 1970s contributed importantly to the rapid expansion in acceptance financing. The increasing use of refinance bills also facilitated the financing of a greater share of thirdcountry trade in the U.S. acceptance market. The largest borrowers in this market reportedly Third-country trade were Japanese, Korean, and Latin American 2. Total U.S. dollar acceptances, by type of acceptance Billions of dollars 1. Data are annualized quarterly flows. 2. Shares financed assume an average acceptance maturity of 90 days. SOURCES. International Financial Statistics and Monthly Survey of Eligible Bankers Acceptances, selected issues. banks. Third-country acceptances grew especially rapidly during the 1970s, increasing from 45 Third country percent of the total market to 53 percent over the Domestic shipments decade. Development of Supply Constraints In addition to setting eligibility criteria, section U.S. exports 13(7) of the Federal Reserve Act limits the amount of eligible acceptances that an individual bank can create. Before 1982, these limits applied only to member banks and were set at 50 SOURCE. Monthly Survey of Eligible Bankers Acceptances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 1986 percent of the bank's paid-up capital and surplus, ities of these groups expanded apace. By 1980, or 100 percent with permission of the Federal however, almost all of the top-tier banks and Reserve Board. Although most banks had long many of the larger regional banks were at or near since been granted the higher limit, the rapid the statutory limits on their creation of eligible growth of acceptances brought many accepting acceptances. banks near their ceilings. Because bank capital was growing relatively Throughout the 1970s, the market for accep- slowly, these ceilings effectively constrained the tances was dominated by the largest U.S. banks. supply of eligible acceptance financing available For one thing, these banks have had the most at the larger banks. Acceptance commissions extensive international operations among U.S. reportedly increased to around 100 to 150 basis institutions and naturally tend to attract a large points at the larger banks, and growth in the share of international trade financing. In addi- volume of their acceptances slowed markedly. tion, these banks generally can market their The rise in commissions at the largest banks acceptances at lower yields than smaller banks enabled the smaller regional banks and U.S. can. The discount at which an individual bank's agencies and branches of foreign banks to price acceptance will trade depends on the size and their acceptances more competitively. Morerecognition of the bank by investors as well as on over, the U.S. agencies and branches were not its overall creditworthiness. Dealers quote a subject to capital limits, and most of the smaller range of acceptance rates and normally trade the regional banks were well below their ceilings. liabilities of the top-tier banks, generally the This combination enabled the smaller domestic largest nine or ten U.S. money center banks, "on issuers and the U.S. agencies and branches to the run"—that is, interchangeably—quoting increase significantly their share of the total rates for them at the lower end of the range. acceptance market, principally at the expense of Quotes on the second tier, comprising twenty or the largest banks; by the end of 1981, the share of so of the largest regional banks and some of the the market held by the top-tier banks had delargest foreign banks, tend to be toward the top clined to less than 35 percent (see chart 4). of the range. Rates offered on acceptances of To some extent, the top-tier banks were able smaller U.S. banks and on most foreign banks to channel their acceptance activity to their Edge tend to be above—in some cases well above— act corporation subsidiaries. These subsidiaries, this range. which are restricted by charter to a banking During the 1970s, the top-tier domestic banks business that is international in character, are held around 45 percent of the total dollar accept- subject to less stringent restrictions on their ance market and the second tier of domestic volume of acceptance liabilities. Edge corporabanks had another 17 to 18 percent. With the tions may create eligible acceptances up to 200 rapid growth of this market, acceptance liabil- percent of paid-up capital and surplus, and even 4. Percentage of total acceptance liabilities outstanding issued by various institutions Percent U.S. agencies and branches of foreign banks sil 75 Second tier of, L IS mm • i! 50 • First tier of domestic banks 25 L L. i. Mil 1979 1981 1983 1985 First-tier domestic banks are the nine largest U.S.-chartered banks. SOURCE. Quarterly Reports of Condition (Call Reports). December Second-tier domestic banks are the next twenty largest U.S.-char- data are used for 1978-84 and June data for 1985. tered banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Bankers Acceptance Market 7 in excess of this limit so long as the acceptances The Federal Reserve Board, to which the are secured by another bank. In effect, an Edge Congress delegated the authority to define the corporation can issue acceptances without limit terms used in section 207, subsequently clarified by acquiring an indemnification agreement from the application of the limits to U.S. agencies and a bank that protects it against loss in the event of branches of foreign banks and to participations in borrower default. By contrast, the regulations in three ways. First, with regard to foreign bank effect at the time did not allow member banks to capital, the Board decided that for purposes of use such "risk participations" to issue eligible calculating limits on eligible acceptances, the acceptances in excess of their limit. foreign parent should be defined as the bank By channeling some of their acceptance activi- entity that owns the agency or branch most ty through their Edge subsidiaries, the largest directly, capital should be measured in accordmember banks were able to retain a portion of ance with accounting standards in the parent their market share: the market share of top-tier bank's home country, and conversion to the banks plus their Edge subsidiaries declined 9 dollar equivalent should be made at least quarpercentage points from 1978 to 1981, while the terly. share of the top-tier banks shrank 12 percentage Second, with regard to participations in which points. The retention of market share was not a noncovered bank (for example, a nonmember without cost, however, because the participating bank or an Edge act corporation) is a party, the banks receive a share of the acceptance commis- Board concluded that the Congress had intended sion in exchange for the indemnification agree- to place a limit on the total amount of eligible ment. acceptances that may be created by all covered banks. Accordingly, the Board ruled that an Legislative Relief eligible acceptance issued by a covered bank and sold through a participation agreement to a non- As many of the largest member banks ap- covered bank will still be applied to the covered proached the limits on eligible acceptances, they bank's limit, and the same treatment will apply to began to seek legislative relief. These efforts an eligible acceptance issued by a noncovered reached fruition with the passage by the Con- bank and purchased by a covered bank through a gress of the Bank Export Services Act (BESA), participation agreement. effective October 8, 1982. Section 207 of the act Finally, the Board established two minimum raised the limits on the aggregate amount of requirements that a participation must satisfy for eligible acceptances that may be issued by an purposes of the BESA limits: (1) the selling and individual member bank to 150 percent of capital the purchasing banks must enter into a written (200 percent with Board permission). The act agreement under which the latter acquires the included three other important provisions. First, former's claim against the borrower in the it applied these same limits to U.S. agencies and amount of the participation that is enforceable if branches of any foreign bank whose parent bank the borrower fails to perform under the accepthas more than $1 billion in worldwide consolidat- ance; and (2) the agreement must provide that ed bank assets or is controlled by a foreign the selling bank obtains a claim against the company that has such assets. Second, it clari- purchasing bank in the amount of the participafied the treatment of participations in accep- tion that is enforceable if the borrower fails to tances by providing that in cases in which a perform. The Board did not require the purchasmember bank or a branch or agency covered by ing bank to be obligated to pay the holder of the the BESA limits sells a participation to another acceptance at the time it is presented for paycovered bank, the portion sold will be applied to ment, although such a provision would be acthe purchaser's limit, not the seller's. Third, it ceptable. Thus the Board defined a participation eased the eligibility requirements for accep- to include both "traditional" participations, untances financing domestic shipments of goods by der which both the obligation to pay the holder eliminating the need to attach documents con- and the claim on the borrower are transferred veying or securing title at the time of origination. from the seller to the purchaser, and "risk" Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 1986 participations, in which the selling bank retains changes in the market for short-term credit for the obligation to pay the holder but is indemni- major nonfinancial corporations and foreign fied by the participant bank against a share of the banks. Changes in investors' perceptions of risk default risk of the borrower. This definition also have allowed such borrowers to meet an increasrepealed a requirement that the names or inter- ing share of their short-term financing requireests of the purchasing banks appear on the ments in the U.S. commercial paper market and acceptance, which the Board had set forth in an the Eurodollar markets. To a degree, banks have interpretation issued in 1979. responded to stiffer competition from these markets by pricing business loans and acceptances Developments since the BESA more competitively. However, some large domestic banks appear increasingly reluctant to Immediately following passage of the BESA, accept the narrow commissions now available in growth in bankers acceptances accelerated: total the acceptance market, in part because of presacceptances increased $3 billion in the fourth sures to improve capital-asset ratios. Over the quarter of 1982, an annual rate of growth of about past year, the willingness of domestic banks to 17 percent. Acceptance commissions also report- extend acceptance credit appears to have deedly dropped considerably, especially for prime pended importantly on whether the asset can be customers. removed from the balance sheet of the parent In the first quarter of 1983, however, the holding company, and thus from the computation acceptance market began to contract. Over the of its capital-asset ratio, through sale of a risk first two quarters of that year, acceptances out- participation. standing declined about $7 billion, or 18 percent at an annual rate. The market rebounded in the second half of 1983 and surged in the summer of The Dollar Value of Eligible Transactions 1984, achieving a new peak of $82 billion in June 1984. Since that time the market has contracted After rising at an annual rate of about 20 percent steadily, falling nearly 20 percent from the peak, in the 1970s, the dollar value of global internato $66 billion in September 1985. The sharpest tional trade actually declined in 1981-82 and, on declines have been registered in third-country balance, was about unchanged in the first four and U.S. export acceptances; only domestic- years of this decade (see the top panel of chart 3). shipment acceptances have increased. Informal This turnaround resulted largely from declines in reports by bankers indicate that commissions the dollar prices of internationally traded goods have narrowed a bit further, to around 50 basis owing to both the rising foreign exchange value points on average. of the dollar and the slowing of world inflation. Dollar-denominated commodity prices fell more than 20 percent between 1980 and 1984, and the FORCES UNDERLYING THE CONTRACTION physical volume of world trade also decelerated significantly—both depressed by the global re- In part, the contraction of the bankers accept- cession early in the decade and the emergence of ance market since early 1983 has resulted from a financing difficulties in many developing counreversal of the trends that had spurred the mar- tries. ket's rapid growth in earlier years: the dollar As noted earlier, the correlation between the value of eligible global international trade has dollar value of international trade and the been virtually flat, on balance, since the begin- amount of acceptance financing of such trade is ning of the decade; and market interest rates far from perfect. The acceptance market outhave declined sharply from the historic peaks paced international trade throughout the 1970s reached early in the decade, thereby reducing the and early 1980s, and the recent contraction of the value of the exemption of eligible acceptances market occurred despite some recovery in interfrom reserve requirements. But the shrinkage of national trade (see chart 3). Nonetheless, disagthe acceptance market also reflects fundamental gregated data on acceptances suggest that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Bankers Acceptance Market 9 value of eligible transactions does affect the Eurodollar CDs outstanding at London offices amount of acceptances. For example, with the of commercial banks dollar value of U.S. imports increasing rapidly in Billions of dollars the past two years, acceptances financing U.S. Type of bank imports have declined much less than accep- Date Total Japatances financing third-country trade or U.S. ex- U.S. nese Other ports. 1978 December. 27.9 15.5 4.8 7.6 1979 Alternative Sources of Credit December. 43.3 26.0 7.7 9.6 1980 December 49.0 26.9 8.9 13.2 To a large extent, the U.S. bankers acceptance market is an interbank market. As noted earlier, 1981 December 77.7 44.7 12.1 20.9 many foreign banks, especially Japanese and other Asian banks, have relied heavily on U.S. Member 92.3 50.2 18.9 23.2 banks to refinance their own acceptances. In- 1983 deed, at the end of March 1985 such refinancings March 90.4 45.0 22.3 23.1 93.5 45.9 24.3 23.3 accounted for roughly 60 percent of the outstand- September ! 1!! " !! " " 95.0 45.7 25.9 23.4 December 100.2 46.1 29.3 24.8 ing acceptances created by U.S. banks, accord- ' " > - -V, J ing to the Senior Loan Officer Opinion Survey on 1984 100.0 44.1 30.6 25.3 Bank Lending Practices. Discussions with U.S. June. 97.6 38.1 32.8 26.7 bankers suggest that this share has declined ;;;;;;;;;;;; 9 95 8 . . 8 9 3 34 5 . . 2 2 3 33 3 . . 7 6 3 2 0 7 . . 1 9 during the past two years, as the volume of refinance bills has fallen especially rapidly. In 95.7 35.6 30.5 29.6 :::::::::::: 88.0 32.2 27.6 28.2 part, this decline has occurred because Japanese 92.9 33.8 29.4 29.7 banks have issued a larger amount of their own acceptance liabilities through their U.S. agencies SOURCE. Bank of England. and branches. By itself, this development would rowed significantly in the secondary markets for not have resulted in a decline in the total size of acceptances and Eurodollar CDs. In each marthe market; however, at the same time, Japanese ket, liabilities of 12 large Japanese banks now banks and other foreign banks apparently also trade on a "no name" (interchangeable) basis at have funded an increasing share of their custom- rates as little as 5 basis points above the liabilities ers' eligible transactions by issuing Eurodollar of U.S. money center banks, whereas several CDs and borrowing in the Eurodollar interbank years ago these banks reportedly paid a premium markets. of as much as 50 or 60 basis points. Between December 1982 and June 1985, ac- Only relatively few large foreign banks from ceptance liabilities outstanding at U.S. agencies the major industrialized countries have been able and branches of Japanese banks increased $8'/2 to issue any significant volume of their own billion, thereby nearly doubling their market liabilities in the bankers acceptance market or in share, from 14 percent to 27 percent. Over the the Eurodollar CD market. For most foreign same period, Eurodollar CDs outstanding at banks, borrowing in the Eurodollar interbank London branches of Japanese and other foreign markets is the primary alternative to refinancing banks rose about $13V2 billion, raising their mar- in the acceptance market. Such substitution has ket share from 46 percent to 63 percent (see the been encouraged by a marked narrowing of the table). Apparently, investors in these markets, spread between the London interbank offered primarily nonbanks, have come to view more rate (LIBOR) and the rate on acceptance liabilfavorably the risks associated with holding dol- ities (see chart 5), which can be traced in part to lar-denominated claims on Japanese banks. Rate declining costs of reserve requirements. (Efforts spreads between liabilities of large Japanese by large U.S. banks to minimize their cost of banks and of large American banks have nar- funds tend to place a floor under LIBOR equal to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 1986 5. Spread between LIBOR and the yield on Brady in the January 1985 issue of the BULLEprime bankers acceptances TIN.) Whereas acceptance credit once was virtu- Basis points ally the only source of financing at rates below the prime rate, competition from the commercial paper market and from foreign banks has induced U.S. banks to offer other below-prime pricing options to an increasing number of nonfinancial corporations. For example, revolving credit facilities now typically offer a choice among pricing off the prime rate, LIBOR, or 1981 ' 1983 ' ' 1985 rates on domestic CDs (usually adjusted explicitly for the cost of reserve requirements). As such Data are quarterly averages of rates on three-month instruments; investment yield basis. arrangements have spread, and declining interest rates have reduced the cost of reserve requirethe domestic CD rate, adjusted for the cost of ments, the cost of business loans has declined reserve requirements. See, for example, the significantly relative to rates on acceptance listudy by Lawrence L. Kreicher in the summer abilities. Although a paucity of data on accept- 1982 issue of the Federal Reserve Bank of New ance commissions precludes precise compari- York's Quarterly Review.) For foreign banks sons of the cost of acceptance credit and the cost that can obtain funds at LIBOR, this spread of business loans, discussions with bankers sugplaces a ceiling on the commission the bank is gest that rates on bank loans priced off LIBOR or willing to pay for refinancing its acceptances. If other money market rates now are not signifithe commission quoted is larger, those foreign cantly higher than the all-in rates quoted for banks will borrow in the Eurodollar market rath- acceptance credit. er than draw a refinance bill. Since U.S. banks Several other factors have tended to reduce reportedly have been reluctant to accept com- the attractiveness of acceptance credit. First, missions of 25 basis points or less, the most bankers acceptance pricing is seldom available to creditworthy foreign banks have greatly reduced nonfinancial corporations under loan committheir use of refinance bills. ments. If the corporation pays a fee on the The demand for acceptance credit by nonfi- unused portion of the loan commitment, it incurs nancial corporations also has diminished in re- an opportunity cost when it uses acceptance cent years, for much the same reasons that credit rather than drawing on a loan commitdemand by foreign banks has fallen off. One ment. The exclusion of a bankers acceptance factor has been the increased availability of pricing option from most loan commitments funding from nonbank investors in the U.S. probably is a legacy of the period when the commercial paper market: from March 1983 statutory limits on eligible acceptances were a through September 1985, outstanding nonfinan- binding constraint on many member banks. With cial commercial paper increased from $46 billion the new limits now generally well in excess of to $75 billion. Prime commercial paper generally outstanding acceptances, banks may offer an trades at rates near those on acceptance liabil- acceptance pricing option in loan commitments ities of prime banks, and for firms with access to more frequently. Second, the eligibility requirethis market, the overall cost, including place- ments for domestic- and foreign-storage accepment fees charged by dealers and fees for backup tances continue to impose additional documentalines of credit, usually is below the all-in cost of tion costs. Documentation costs can significantly acceptance credit. reduce the attractiveness of acceptances, as evi- Another factor that has depressed the demand denced by the growth of domestic-shipment acfor acceptance credit by nonfinancial corpora- ceptances since BESA removed the requirement tions has been the diminishing role of the prime that documents conveying title be attached at the rate as a benchmark for the pricing of business time of acceptance. While other eligible acceploans (see, for example, the study by Thomas F. tances outstanding have declined 15 percent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Bankers Acceptance Market 11 since the passage of BESA, domestic-shipment Decisions to sell risk participations have not acceptances have increased nearly 500 percent, been based solely on the implications for capitalalbeit from a very low base. asset ratios. Banks have sold participations to limit their credit exposure to particular custom- Willingness to Extend Acceptance Credit ers or countries and to direct business to banks with which they have correspondent relation- The decline in acceptance commissions over the ships. Discussions with bankers and comparipast several years suggests that the contraction sons of Call Reports with other public financial of the market has resulted primarily from a statements suggest, however, that capital considreduction in the demand for acceptance credit erations have been paramount. Banks that have rather than in the supply of acceptance credit. been active sellers of risk participations general- Nevertheless, a decrease in the willingness of ly have deducted participations from other financertain large U.S. banks to supply acceptance cial statements, whereas banks that have sold credit may have contributed to the contraction in only small amounts often have not claimed a both the overall size of the market and the reduction. In turn, the willingness to extend market share of U.S. banks. Since the early acceptance credit has clearly been related to the 1980s, both federal banking regulators and inves- sale of risk participations. A number of banks tors have pressured large U.S. banks to boost have sold risk participations quite actively: at the their capital-asset ratios. Some banks are be- end of September 1985, 14 U.S. banks had sold lieved to have responded to this pressure in part risk participations in 20 percent or more of their by reducing their acceptance credits and other outstanding eligible acceptances. In the previous low-yielding, low-risk assets. 11 months, these 14 banks expanded their share The influence of concern about capital adequa- of the acceptance market about 3 percentage cy on the willingness to extend acceptance credit points, while the market share of other U.S. has been evident in data on sales of risk partici- banks declined 9 percentage points (see chart 6). pations in acceptances. The sale of a risk partici- Both federal regulators and accounting induspation has had implications for capital-asset ra- try groups recently have addressed the divergent tios because in some cases it has allowed the practices in accounting for risk participations in seller to reduce its reported assets by the amount acceptances. In November 1985, the Federal of the participation. Federal banking regulators Reserve announced that beginning in March have not allowed banks to follow this accounting 1986, it will collect data on sales of risk participapractice on their quarterly reports of condition tions in acceptances on the Y-9 and use these (Call Reports), which are used by the federal data to adjust upward the reported assets of regulatory agencies to assess the capital adequacy of commercial banks. Until recently, however, the absence of generally accepted accounting principles has allowed some banks to deduct risk 6. Market shares of U.S.-chartered commercial banks in the bankers acceptance market participations from the balance sheet in other public financial statements. In particular, some Percent banks have deducted risk participations from the 50 balance sheets reported quarterly as part of the Bank Holding Company Financial Supplement 40 Inactive sellers of risk (Form FR Y-9), which the Federal Reserve uses participations to compute capital ratios for use in administering 30 capital-adequacy guidelines for bank holding Active sellers Of risk participations companies. Public accounting firms, which i 20 strongly influence the accounting practices of 1984 1985 banks on public financial statements, have ex- Monthly data; active sellers are those that as of September 1985 had pressed divergent views on the appropriate treat- sold participations in 20 percent or more of their outstanding accepment of risk participations. tances. SOURCE. Monthly Survey of Eligible Bankers Acceptances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 1986 banks that deduct risk participations from the many ways resemble the U.S. commercial paper balance sheet. At the same time, the Emerging market. Although to date only a relatively small Issues Task Force of the Financial Accounting amount of notes appears to have been distributed Standards Board considered appropriate prac- in these markets, many borrowers, including tices for such transactions. A clear majority of many borrowers based in the United States, have the task force members concluded that the sale arranged such facilities, and both commercial of a risk participation in an acceptance does not and investment banks appear to be devoting allow the selling bank to remove the amount sold substantial resources to enlarging their distribufrom its balance sheet. On the basis of the task tion capacity. Meanwhile, deregulation abroad force's discussion, the Securities and Exchange likely will foster greater use of foreign currencies Commission announced that it believes that ma- to finance world trade. For example, the dereguterial amounts of acceptances should not be lation of the Japanese financial markets may removed from an accepting bank's balance sheet facilitate the financing of a larger share of Asian after the sale of risk participations. In light of trade and other world trade in yen. A noteworthy these actions, such sales no longer will signifi- development was the inauguration this past June cantly affect capital-asset ratios. 1 of a market in bankers acceptances denominated in yen. On the supply side of the market, the picture is OUTLOOK less clear. The recent decisions by the federal regulators regarding the reporting of risk partici- The market for dollar-denominated acceptances pations in acceptances may cause those banks appears unlikely to resume rapid growth in the that have been active sellers of participations to near future and may well continue to contract. become more reluctant to extend acceptance Even if the dollar value of world trade continues credit. On the other hand, the Federal Reserve is to expand, the demand for acceptance financing carefully considering proposals for quantifying a will probably remain weak. Attractive substi- risk-adjusted capital measure to supplement the tutes for dollar-denominated acceptance financ- present approach to the measurement of capital ing continue to proliferate as a result of financial adequacy. One objective of this effort is to innovation and deregulation. Within the past two temper the present incentives for U.S. banks to years, for example, markets for short-term dol- reduce their low-yielding, low-risk assets, such lar-denominated notes have evolved in Lon- as acceptance credits. Meanwhile, Japanese don—Euronotes, issued under note-issuance fa- banks likely will remain an important source of cilities, and Euro-commercial paper—that in dollar-denominated acceptance credit. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

13 Industrial Production Released for publication November 15 In market groups, output of consumer goods increased 0.2 percent in October. Auto assem- Total industrial production was unchanged in blies declined about 6 percent to an annual rate October. Output of durable consumer goods de- of 7.6 million units, largely because of strike clined, but there were production gains among activity; production of lightweight trucks also nondurable consumer goods, and overall output was affected. However, production of home of equipment changed little. At 124.9 percent of goods, including appliances, increased in Octothe 1977 average, the index for October was 1.8 ber as did that of nondurable consumer goods. percent higher than that of a year earlier. Production of business equipment grew 0.3 per- Ratio scale, 1977 = 100 _ 114400 TOTAL INDEX Products 112200 1 T /' —^ / 110000 Materials 1 1 1 1 1 1 80 1 l I 1 1 I 140 MANUFACTURING MATERIALS Durable _ Nondurable 120 Nondurable / __ ~ V- ' / — 100 Energy Durable \y l I i I i i 80 I i i i 1 1 160 CONSUMER GOODS 140 INTERMEDIATE PRODUCTS Business supplies 120 100 'V \ ^ sj Durable V/ Construction supplies I I I L 240 FINAL PRODUCTS 200 Defense and space 160 _ Business equipment 140 120 100 Consumer goods J I ! L 1979 1981 1983 1985 1979 1981 1983 1985 All series are seasonally adjusted. Latest figures: October. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 1986 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, GGGrrrooouuuppp 1985 1985 OOOcccttt... 111999888444 tttooo OOOcccttt... Sept. Oct. June July Aug. Sept. Oct. 111999888555 Major market groups Total industrial production 124.9 124.9 .2 -.2 .8 -.1 .0 1.8 Products, total 132.9 133.1 .2 .0 1.0 .0 .1 3.2 Final products 133.4 133.4 .0 .1 1.1 .1 .0 2.7 Consumer goods 121.5 121.8 .3 -.2 1.0 .1 .2 2.8 Durable 113.2 112.5 .2 -.6 2.5 -.8 -.6 1.0 Nondurable 124.6 125.2 .3 -.1 .6 .5 .5 3.5 Business equipment 142.9 143.2 -.8 .4 1.2 -.1 .3 3.0 Defense and space 177.5 176.9 1.3 .3 .9 1.1 -.3 8.2 Intermediate products 131.4 131.8 .8 -.5 .8 -.3 .3 4.4 Construction supplies 121.0 121.4 .9 .2 1.8 -.4 .3 6.0 Materials 113.9 113.7 .1 -.5 .4 -.3 -.2 -.4 Major industry groups Manufacturing 127.9 127.9 .1 .2 1.0 -.2 .0 1.9 Durable 128.7 128.5 -.3 .2 1.1 -.4 -.2 1.2 Nondurable 126.8 127.0 .6 .1 .7 .2 .1 3.0 Mining 108.1 106.7 .7 -1.7 -.1 -.4 -1.4 -.5 Utilities 112.2 112.0 -.3 -2.4 -.5 1.8 -.2 2.3 NOTE. Indexes are seasonally adjusted. cent, with gains in most categories; output de- materials was unchanged as a drop in production clined in transit equipment, however, because of of parts for consumer durables was offset by the strike-related reductions in the production of gains in other components. business vehicles. In October, production of In industry groups, manufacturing output was defense and space equipment was off 0.3 per- unchanged in October, with a small decline in cent, associated with another labor dispute, but durables and a slight rise in nondurables. Producoutput in this sector remained more than 8 per- tion at mines was reduced sharply due to cutcent higher than that of a year earlier. Materials backs in coal output and in oil and gas extraction. output edged down in October, largely reflecting Output of utilities also was off in October. a decline in energy materials. Output of durable Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

15 Statements to Congress Statement by Stephen H. Axilrod, Staff Director course, natural as the economy reached higher for Monetary and Financial Policy, Board of levels of resource utilization, but the extent of Governors of the Federal Reserve System, be- our slowing also seemed related to imbalances in fore the Subcommittee on Domestic Monetary the economy that were traceable in part to the Policy of the House Committee on Banking, very high level of the dollar on exchange mar- Finance and Urban Affairs, November 7, 1985. kets. The rate of increase in domestic output— I am pleased to appear before you this morning which generates the income we need in the end to discuss the exchange markets for the dollar in to sustain spending—has been only 2Va percent the aftermath of the G-5 meeting on September over the past 15 months. Meanwhile, domestic 22 and also the relationship among exchange demand in real terms has continued to rise at a market conditions and domestic economic and rate of more than VA percent a year, and final credit developments. At the September meeting, demands for consumption, for government outfinance ministers and central bank governors of lays, and for investment and housing have been the G-5 countries emphasized the interrelation- running even higher relative to output, growing ships among our economies, the importance of about AVi percent per year over the period. mutually consistent policies in achieving sus- The difference between growth in U.S. final tained growth and dealing with economic imbal- demand and growth in U.S. output, apart from ances, and the role played by exchange rates. slowing of inventory accumulation, is a reflec- They indicated that, in their judgment, the then- tion of our rising trade and current account current constellation of exchange rates did not deficits. In effect, while we have created more fully reflect the underlying movement toward than 9 million jobs in three years within the convergence in our economies—in terms of both United States, we have also turned to importing satisfactory real growth and progress in reducing (net) well over 3 percent of our gross national inflation. Intentions were reaffirmed to imple- product. The very favorable terms on which ment policies that would lead to better balance goods can be obtained from abroad, given the within and among our individual countries. Fi- exchange rate, have been an important contribunally, a willingness to intervene more actively in tory factor along with relatively slow domestic exchange markets when "to do so would be growth of other leading countries. helpful" was implied, and indeed since then a The rise in imports has brought with it some sizable amount of coordinated intervention has benefits along with its costs. One clear gain is the been undertaken. associated reduction in inflationary pressures in Before addressing some of the specific issues the United States. It is not just that the price of that this hearing is attempting to explore, let me imported goods has declined as the value of the provide some perspective on the economic con- dollar has risen. There are also important indiditions in the United States that were back- rect effects. Bottlenecks in some sectors have ground to, and that may benefit from, the recent been avoided. Firms using imported goods in exchange market initiative. their production processes have seen their costs Our economy has been performing quite rise less rapidly, or decline, and have passed strongly, overall, since the 1982 recession in these cost savings on to consumers. Some other terms of economic growth, new jobs created, and firms, who may not use imported goods but who reduced inflationary pressures. However, our must compete with imported goods, have been economic growth slowed appreciably after the induced to invest, to innovate, and to modernize middle of last year. Some slowing was, of their production to preserve their markets, with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 1986 potential lasting benefit to the U.S. economy in the economy. But one cannot prudently expect terms of efficiency and enchanced productivity. foreign funds to provide a permanent basis for Also, the rise in U.S. imports has created balancing demand and supply in domestic credit export opportunities in other countries and thus markets. has played a role in fostering growth abroad. Over the past year there has been some abate- This growth includes not only industrial coun- ment of interest rate pressures here. Along with tries, but also, of course, some of the heavily the continued availability of foreign saving, that indebted countries of Latin America and else- abatement also reflected market response to our where. In the latter group, growth of exports has continued good wage and price performance and facilitated the lengthy and painful adjustment some diminution of private credit demands this process that they have undertaken. year as growth in economic activity has slowed. However, with U.S. trade and current account In addition, monetary growth—measured by deficits each approaching $130 billion, strains are Ml—has been relatively large. In essence, the showing. Under the pressure of rising imports, Federal Reserve accommodated the increased manufacturing activity as a whole has been stag- demand for money as interest rates dropped nant for a year, and some industries are losing because, among other factors, the economic exjobs. This development has contributed directly pansion was tending to slow—with that slowing to the slowing of growth in output in this coun- partly because of the drag of high exchange rates try, and seems to be encouraging plans to put on certain key sectors of the economy. At the more future investment abroad. Mining activity same time, the exceptional strength of the dollar in the United States is also at a low ebb, and suggested that the inflationary potential for the many individual farmers, with exports diminish- time being would be limited. ing and prices low, face very difficult financial Sustained, healthy economic growth here recircumstances. And, as you are well aware, the quires more balanced participation of all our strongest tide of protectionist pressures since the economic sectors. Appreciation of some impor- 1930s is running. tant foreign currencies relative to the dollar will The U.S. trade and current account deficits contribute to that. It will help our export indushave now reached levels that cannot be sustained tries, including agriculture, and provide greater indefinitely, threatening to undercut our stability opportunities for industries sensitive to import and implying less stimulus to others. We have competition. now become a net debtor internationally, and The exchange value of the dollar has dropped that position will continue to deepen so long as about 8 percent on a trade-weighted basis since our current account is in deficit, requiring net the G-5 meeting and is now about 22 percent inflows of capital from abroad to finance it. below its peak in February. Some progress has Confidence in the U.S. economy remains gener- thus been made toward easing undue competitive ally strong, so that we can expect a willingness to pressures on U.S. industry. While there are place sizable funds here for a time, but obviously always lags and uncertainties in economic prowe cannot afford to rely excessively and indefi- cesses, the drop so far seems unlikely in itself to nitely on foreign saving to help sustain our generate strong inflationary pressures, in part domestic spending. because it probably represents to some extent an The net inflow of foreign capital, which is unwinding of speculative pressures around the inextricably tied to the trade deficit, has been exchange market peak that had not yet been crucial to filling the gap between our limited reflected in prices of traded goods but also domestic saving and the demands on that saving because it is occurring at a time when some from expanding federal budget deficits and pri- excess capacity exists, economic growth is relavate investment outlays for plant, equipment, tively slow, and inflationary expectations here and housing. Without a rising net inflow of are relatively subdued. foreign funds in recent years, domestic interest I might also add at this point that exchange rates, which have in any event been historically market intervention does not necessarily have high, would have been still higher and added expansive or restrictive effects on availability of pressure exerted on interest-sensitive sectors of domestic credit. When the Federal Reserve ac- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 17 quires foreign currencies, that act will create prices, would seriously jeopardize the progress bank reserves. However, those effects will be that we have made in reducing inflation and raise offset by sales (or fewer purchases) of govern- new questions about interest rates. ment securities for the System Open Market If weakness in the dollar reflects a greatly Account, depending upon the supply of reserves, reduced willingness on the part of the rest of the or degree of reserve pressures, the Federal Open world to accumulate net claims on the United Market Committee deems appropriate. In reach- States—while we were at the same time still ing that judgment, the Committee may take ac- dependent on such funds—interest rates here count of exchange market conditions, but the would come under additional upward pressure. judgment is not driven by the presence or the The upward pressure would be generated out of absence of intervention. market forces as a diminishing supply of credit at Whether purchases of foreign currencies have old interest rates has to be balanced against any direct effect on the amount of income that continued demands. A rise in interest rates will was transferred to the Treasury from the Federal bring balance both by increasing the supply and Reserve depends on relative interest rates here by diminishing the demand. and abroad and on the behavior of exchange In many ways such an outcome would be rates. Interest rates are now generally lower in counterproductive. Many domestic and foreign key foreign countries than here, tending to re- borrowers are heavily burdened with debt, and duce Federal Reserve earnings at the margin as cannot afford greater real costs. In addition, if foreign currencies are acquired. However, even rising interest rates led to greater discouragethat small reduction would be offset, and earn- ment of private investment outlays here, they ings sustained, should the value of the foreign would be undermining the principal source of our currencies acquired increase through an appreci- long-term economic growth and further eroding ation in their market value. Whatever the net our ability to regain international competitiveeffect, it would be very small absolutely and ness. relative to Treasury receipts. The adjustment problems that I have described While some decline in the dollar's external would be greatly alleviated by meaningful and value from the extraordinarily high level of the assured progress in reducing our high federal past year may have been necessary or desirable, budget deficits. The budget deficit not only I should point out that lasting benefits depend looms large relative to our own domestic propenupon other policies and conditions. Too large or sity to save but it also represents a significant too abrupt a decline could in today's circum- drain on world saving. As the deficit is reduced it stances have adverse consequences. Our deficits would directly alleviate pressures on credit maron trade and current account cannot be expected kets, would diminish our dependence on foreign to drop off quickly. For one thing, it simply takes saving, and would free up domestic resources time to make the large adjustments in use of our that could be shifted in a more orderly fashion to manpower and plant capacity required of a sig- export and import-sensitive industries. nificant real improvement in our trade balance. That is the reason that the G-5 ministers and Should the dollar drop too sharply, the conse- governors, and much of the subsequent discusquent increased foreign demand for our exports sion, have rightly emphasized the need for more and increased domestic demand for goods that fundamental macroeconomic policy adjustments compete with imports probably could not be here and abroad. The Federal Reserve takes as readily matched by a prompt, balancing readjust- one point of departure the fact that maintenance ment of domestic resource use. Depending in of underlying confidence in the dollar is depenpart on how fully utilized are our plant and dent on the perception that U.S. monetary policy manpower resources, considerable upward wage will remain responsible, in the sense that it will and price pressures could result from efforts to aim to accommodate sustained growth of real achieve these real adjustments quickly, given economic activity with continued progress tonormal rigidities and response lags in the econo- ward price stability. Intervention and exchange my. Such a development, together with the di- rate changes are no substitute for sound underlyrect effect of a sharp depreciation on import ing policies. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 1986 Statement by Stephen H. Axilrod, Staff Director the Federal Intermediate Credit Banks (FICB)— for Monetary and Financial Policy, Board of under Section 13a of the Federal Reserve Act, Governors of the Federal Reserve System, be- which addresses the discount of agricultural pafore the Subcommittee on Economic Stabiliza- per. Specifically, subsection 2 permits Federal tion of the Committee on Banking, Finance and Reserve Banks, among other things, to discount Urban Affairs, U.S. House of Representatives, notes payable to an FICB provided the notes November 21, 1985. have remaining maturities of nine months or less and are secured by agricultural loans also with I appreciate the opportunity to appear before this nine months or less to run. The statutory provicommittee to clarify the technical aspects of sion does not suggest that there need be any possible discount window lending by the Federal special findings to justify such lending, or that Reserve to the Farm Credit System, as well as to the lending decision would be substantially difagricultural banks. In doing so, I would point ferent from that for a depository institution. This out, first, that no request for credit from the provision of the act, which was passed in 1923, Farm Credit System has been received. The has not been used since the early part of the Farm Credit System has considerable strengths. 1930s. The amount of capital that it can bring to bear on I believe that, as a technical matter, funds its problems is quite large, and it holds a substan- loaned to FICBs could be passed along to other tial amount of liquid assets. While the Farm units within the Farm Credit System. However, Credit obligations in the market are currently the FICBs are only a small component of the trading at a considerably wider spread above System and not all of their collateral would meet Treasury debt than was true only a few months the technical requirements of section 13a of the earlier, that spread has stabilized and even nar- Federal Reserve Act. Additional authority to rowed a bit in recent weeks. The Farm Credit lend to the Farm Credit System must rest on the System has continued to be successful in tapping other provisions of the Federal Reserve Act that credit markets for needed funds. in certain emergency circumstances permit loans In general, the Federal Reserve discount win- to any individual, partnership, or corporation. dow is intended to be a short-term liquidity Under one of the provisions (section 13.13) facility for use by borrowers—normally limited such loans can be made with U.S. government or to depository institutions—when other sources with "federal agency" securities as collateral. of liquidity are not reasonably available. Borrow- The Farm Credit System holds only a relatively ers are expected to show that they have made small amount of U.S. government securities or every effort to obtain needed funding from other securities of other federal agencies to pledge as sources, consistent with the Federal Reserve's collateral—which in any event are a portion of role as the "lender of last resort." Within this their overall liquidity that is likely to be drawn on context, credit is occasionally made available to in case of need. depository institutions for more extended peri- Under another provision of the act (section ods for certain purposes, such as for troubled 13.3) the Federal Reserve could also make funds institutions facing sustained liquidity pressures. available on the basis of any collateral provided But the Federal Reserve discount window was the lending is "secured to the satisfaction of the not intended to be a facility for long-term financ- Federal Reserve bank." But such loans can be ing or to be a substitute for risk-bearing capital. made only in "unusual and exigent circum- All lending by Federal Reserve Banks at the stances" and require an affirmative vote by five discount window must, by statute, be on a se- members of the Board. cured basis. Clearly, a finding by the Board of Governors While Federal Reserve lending authority is that such "unusual and exigent circumstances" normally confined to depository institutions, exist would require an important policy judgthere are exceptions. In the case of the Farm ment, including evaluation of the consequences Credit System, the Federal Reserve has long of lending, or not, on the economy generally, been authorized explicitly in the Federal Reserve prospects for reform of the Farm Credit System Act to lend to one component of that System— and for repayment, as well as other factors. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 19 emergency provisions have been used very rare- today. But that open market authority is dely, and in the case of section 13.3 not at all, since signed to facilitate the conduct of monetary the mid-1930s. policy, not to deal with the liquidity needs of Apart from that basic policy decision, enough individual institutions, troubled or not. It is not a collateral appears to be within the Farm Credit substitute for, nor was it intended to substitute System as a whole to back a substantial amount for, the loans that would directly provide funds of Federal Reserve lending. By statute, an that may be needed by individual borrowers amount of Farm Credit System assets equivalent under liquidity pressures, in this case the Farm to note and bond obligations outstanding must be Credit System. maintained unencumbered. However, the assets With regard to agriculturally oriented commerof the System exceed its obligations by several cial banks, they have access to the usual disbillion dollars. More importantly, in terms of the count window facilities at the Federal Reserve potential capacity for lending by the Federal that are open to any depository institution hold- Reserve, this pool would grow if, and as, Farm ing transaction accounts or nonpersonal time Credit System bonds were redeemed. Of course, deposits. Besides ordinary very short-term adthe total amount of lending by the Federal Re- justment credit, the Federal Reserve has a seaserve that could be supported by the available sonal credit program for smaller depository insticollateral would depend on the appropriate valu- tutions that are without ready access to national ation of that collateral at the time of the loan. In money markets. This facility is intended, in addition, in acting as lender of last resort, partic- particular, to assist agricultural banks, whose ularly under emergency provisions, the Federal seasonal liquidity pressures are likely to be espe- Reserve Board or the lending Reserve Bank cially strong. Last spring, the Board modified its would have the opportunity to place such restric- regular seasonal program to make more funds tions on the use of its funds as it considers available and, for the past crop season, estabreasonable and appropriate to safeguard those lished a special temporary program for agriculfunds and to facilitate the return of the borrowing tural banks that might have experienced strong institution to financial health. loan demand in the spring and summer. But, in Apart from lending through the discount win- the event, with loan demand relatively light, and dow, the Federal Reserve has the authority to the liquidity of most farm banks ample, use of the acquire Farm Credit System securities, as well as regular and special seasonal lending facilities was other agency securities, in the open market. The relatively modest. Agricultural banks, like other authority is provided under different sections of depository institutions, also have access to other the Federal Reserve Act dealing with open mar- extended credit should that be needed to help ket operations. The Federal Reserve has, in the them work out of difficult situations entailing past, occasionally purchased Farm Credit obliga- sustained liquidity pressures. • tions in the market, and holds such securities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON OCTOBER 1, 1985 ing continued to be brisk in service-producing industries and at finance and trade establish- 1. Domestic Policy Directive ments. Moreover, employment in manufacturing rose for the first time since January, but the gains The information reviewed at this meeting sug- might have been overstated because of seasonal gested that economic activity expanded in the adjustment difficulties associated with a shift in third quarter at an annual rate of about 3 percent, timing of the model changeover period in the compared with a rate of about 1 percent in the automotive industry. The civilian unemployment first half of the year. While the increase in total rate, which had held steady at 7.3 percent since spending by domestic sectors was a little weaker February, fell to 7.0 percent in August. than in the first half, growth in domestic output Private housing starts picked up in August but, was higher because the trade balance in the third at an annual rate of l3/4 million units, were the quarter apparently did not deteriorate further. same as the average recorded in the second Broad measures of prices and wages appeared to quarter. Other indicators suggested an improved be rising at rates close to or somewhat below tone in the housing sector. Sales of new homes those recorded earlier in the year. continued to trend up through July, and sales of The index of industrial production increased existing homes registered a sizable advance in 0.3 percent in August. Production gains were August. Moreover, newly issued permits for particularly strong for consumer durable goods— residential building remained at relatively high mainly because of a spurt in assemblies of light levels, and consumer attitudes toward buying trucks—and for defense and space equipment. homes apparently continued to be quite positive. Estimates for the preceding three months were Incoming information suggested a leveling of revised down, however, and the level of output business capital expenditures. Spending for nonin August was about Vi percent above the aver- residential structures has slowed in recent age for the second quarter. Industrial capacity months. Shipments of nondefense capital goods utilization edged up to 80'/2 percent, little rebounded in August, about offsetting the previchanged since spring and about Wi percentage ous month's decline. New orders also rose somepoints below its level a year earlier. what after a sharp drop in July, but that reflected The nominal value of retail sales increased a substantial rise in the volatile aircraft category; nearly 2 percent in August, mainly reflecting a excluding such orders August showed an appresurge in auto sales after the introduction of ciable decline. financing incentive programs in mid-August. The U.S. merchandise trade deficit in July and Sales of new domestic automobiles rose to an August averaged somewhat less than that recordannual rate of 9Vz million units for the month and ed in the second quarter of the year, as a drop in accelerated further to a rate of 12 million units imports was partly offset by a slight decline in during the first 20 days of September. Outlays for exports. The drop in imports was widespread consumer goods other than autos also posted across all major commodity categories, with esgains in August, but have shown little change on pecially large declines in oil, industrial supplies, balance since early spring. capital goods, and consumer goods. Total nonfarm payroll employment expanded Recent data on prices and wages suggested by about 300,000 in August, well above the that inflation has been holding steady at rates average gain in the preceding four months. Hir- somewhat lower than those earlier in the year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

21 The producer price index for finished goods fell sures would be considered in the context of 0.3 percent in August, as prices for consumer appraisals of the strength of the business expanfoods and energy-related items declined and sion, developments in foreign exchange markets, overall prices of other consumer goods were progress against inflation, and conditions in dounchanged. The consumer price index rose 0.2 mestic and international credit markets. The percent in August for the fourth consecutive intermeeting range for the federal funds rate was month, less than the average monthly change in retained at 6 to 10 percent. the January-to-April period. During the first Ml growth surged in August to an annual rate eight months of this year, producer and consum- just over 20 percent, reflecting exceptional er prices and the index of average hourly earn- strength in interest-bearing checkable deposits ings have risen at rates somewhat below those and relatively rapid expansion in other comporecorded in 1984. nents. Data for the first half of September sug- Following the Committee's meeting in August, gested slower but still substantial expansion in the trade-weighted value of the dollar against Ml. Thus, for the period from June to Septemmajor foreign currencies appreciated more than 5 ber, Ml was expanding at a rate well above the percent through mid-September. The dollar sub- Committee's expectations, and was at a level sequently declined sharply, especially after the substantially higher than the path consistent with announcement on September 22 by the finance the Committee's range for the second half of the ministers and central bank governors of the G-5 year. Reflecting the surge in Ml, M2 accelerated countries that recent shifts in fundamental eco- in August to an annual rate of about 11 VA percent nomic conditions had not been reflected fully in and M3 also strengthened to a rate of about 8V2 exchange markets. It was noted in the announce- percent; growth in these broader aggregates was ment by the G-5 countries that in view of the running slightly above the rates anticipated for present and prospective changes in fundamen- the June-to-September period. Relative to their tals, some further orderly appreciation of the long-run ranges for the year, M2 was close to the main nondollar currencies against the dollar was top of its range while M3 was near the middle of desirable. By the time of this meeting the value its range. Growth in total domestic nonfinancial of the dollar had declined about 3V4 percent on debt remained relatively rapid in August, and balance since the August meeting to a level thus far in 1985 was running somewhat above the nearly 20 percent below its peak in late Febru- upper end of its growth range for the year. ary. In the light of growth in the monetary aggre- At its meeting on August 20, 1985, the Com- gates—especially Ml—continuing to exceed exmittee had adopted a directive that called for pectations, and with indications of a somewhat maintaining the slightly firmer degree of reserve stronger tone in the economy as the intermeeting restraint that had been sought in previous weeks. period progressed, open market operations dur- That action was expected to be consistent with ing the period were directed toward maintaining growth of M2 and M3 at annual rates of around or slightly increasing the degree of reserve re- 8V2 and 6V2 percent respectively for the period straint that had been sought shortly before the from June to September. Growth of Ml was meeting on August 20. As a result, the level of expected to slow from its recent pace, but given adjustment plus seasonal borrowing rose somethe rapid expansion since June, Ml was antici- what on balance in the intermeeting interval, pated to grow at an annual rate of about 8 to 9 averaging about $515 million in the latest reserve percent over the three-month period, considera- maintenance period ending September 25. Borbly above earlier expectations. The members rowing had been running substantially higher in agreed that somewhat greater restraint on re- recent days, however, because of technical marserve positions would be acceptable if growth in ket conditions associated with a hurricane on the the monetary aggregates were substantially fast- East Coast and the end-of-quarter statement er than expected, while somewhat lesser re- date. straint would be acceptable in the event of sub- The small increase in reserve pressures, meastantially slower monetary growth. In either sured by the average level of borrowings, was case, adjustments in the degree of reserve pres- not reflected in a significant change in money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Federal Reserve Bulletin • January 1986 market interest rates, and the federal funds rate lems and financial strains in some sectors of the generally moved in a narrow range of VA to 8 economy, stemming to a substantial extent from percent throughout the intermeeting period, av- the massive imbalances in the federal budget and eraging close to 8 percent in the week prior to in foreign trade, represented ongoing threats to this meeting. For Treasury securities, most the sustainability of the expansion. short-term yields were unchanged to down Considerable attention was focused on the slightly, influenced by a large pay down of Trea- performance of the dollar in foreign exchange sury bills because of debt ceiling problems, while markets and the implications of possible changes long-term yields were up about 5 to 10 basis in exchange rates for the balance of trade and the points. Most other market interest rates also domestic economy. The members also reviewed showed small, mixed changes over the period. developments relating to the foreign debt prob- But yields on some federal agency securities lems of less developed countries. In the course of advanced relatively sharply in the wake of re- discussion members recognized, as in previous ports about financial difficulties of the Farm meetings, that the extraordinary strength of the Credit System. dollar earlier had contributed to the size of the The staff projections presented at this meeting trade deficit, but they also emphasized the imwere little changed from those prepared at the portance of maintaining underlying confidence in time of the August meeting. Growth in real GNP the dollar, given the dependence of the United was projected to pick up somewhat in the second States for the time being on large capital inflows. half of the year from the sluggish pace in the first It was noted that the possibility, while perhaps half and to continue at a modest pace throughout remote, of a precipitate continuing decline in the 1986. The average unemployment rate was ex- value of the dollar would present a threat to the pected to change little over the period, and the financial system and the economy because of its rate of increase in prices was projected to remain potential implications for higher interest rates close to that experienced in the past few years. and inflationary pressures, particularly in the In the Committee's discussion of the economic absence of stronger budgetary restraint than had situation, the members generally took the view yet been achieved. Protectionist legislation that the latest information was consistent with would aggravate the potential difficulties. Consesome improvement in the rate of economic quently, it would be important that shifts in the growth. They differed to some extent in their value of the dollar be orderly. assessments of the prospects for the economy, Several members referred to the generally however. Several thought that moderate growth favorable trends in wages and prices over the in line with the staff projection, or perhaps a bit course of recent months. Some concern was faster, was a reasonable expectation for the expressed, however, that inflationary expectaquarters ahead. Growth could pick up as domes- tions for the longer term might be increasing in tic demands were maintained, given the large the context of the large increase in Ml and total buildup in liquidity over recent months, the big debt, disappointment over the limited progress federal deficit, and the possibility that the inter- made thus far in reducing federal budget deficits, national trade position of the United States and against the background of recent and possiwould stop worsening. On the other hand, a few ble further declines in the foreign exchange value members stressed the downside risks in various of the dollar. Some members also suggested that sectors of the economy, such as potential re- a view may be becoming more widespread— straint on consumer spending because of the encouraged perhaps by the continued rapid exlarge buildup in debt, the weak performance in pansion in Ml—that an effective monetary policy manufacturing attributable in part to competitive directed at maintaining and reinforcing progress pressures from abroad, and the continued signs toward price stability might be inhibited by sensiof deterioration in the agricultural sector. They tive conditions in some business and financial expressed the view that continued sluggish ex- sectors of the domestic economy and in internapansion was the more likely course for the econ- tional financial markets, particularly as long as omy. As had been the case at previous meetings, the federal budget deficit remained so large. the members emphasized that a variety of prob- At its meeting in July the Committee had Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 23 reviewed the basic policy objectives that it had as a whole could be reached without an inapproestablished in February for growth of the mone- priately abrupt increase in reserve pressures and tary and credit aggregates in 1985 and had set in interest rates. Growth in M2 and M3 was tentative objectives for expansion in 1986. For expected to remain roughly consistent with the the period from the fourth quarter of 1984 to the target ranges for 1985, and much slower growth fourth quarter of 1985, the Committee had reaf- in Ml—consistent with the upper end of its firmed the ranges for the broader aggregates set target—would in the view of many members be in February of 6 to 9 percent for M2 and 6 to 9Vi acceptable and desirable, depending upon develpercent for M3. The associated range for total opments in the economy and financial markets. domestic nonfinancial debt was also reaffirmed As they had at the previous meeting, the at 9 to 12 percent for 1985. With respect to Ml, members agreed that in prevailing circumthe base was moved forward to the second stances, including a relatively strong dollar, the quarter of 1985 and a range of 3 to 8 percent at an surge in Ml did not appear in itself to have annual growth rate was established for the period inflationary implications for the time being. to the fourth quarter of the year. For 1986 the Nonetheless, while relatively rapid growth in Ml Committee had agreed on tentative monetary might be tolerated for a time, concern was exgrowth objectives that included reductions of 1 pressed that the longer such growth persisted, percentage point in the upper end of the Ml the greater would be its potential for translation range and Vi percentage point in the upper end of into inflationary demand pressures. A number of the M3 range. The provisional range for total members also emphasized that the recent domestic nonfinancial debt was reduced by 1 strength in Ml could not be explained fully by percentage point for 1986. At this meeting, there such factors as institutional changes and finanwas some further discussion of the 1985 range for cial innovations or by shifts of funds to NOW Ml and its role, but no change was made at this accounts in response to earlier declines in market time. interest rates. In the Committee's discussion of policy imple- The members placed considerable emphasis mentation for the weeks immediately ahead, the on the need to judge the behavior of Ml in the continuing strength of Ml was assessed against context of the performance of the economy and the background of relatively modest expansion in the relatively moderate growth in the broader economic activity and the absence of indications aggregates. Currently sensitive conditions in dothat inflation was increasing. According to an mestic and international financial markets and analysis prepared for this meeting, Ml growth debt problems in some sectors of the economy could be expected to moderate substantially over such as agriculture were themselves a restraining the months ahead, even as the economy contin- force on the economy and argued against a policy ued to expand, following its exceptionally rapid course that might entail appreciably higher interrate of growth since late spring and the resulting est rates in the short run. On the other hand, large buildup in liquidity. The most recent data significant easing under immediately prevailing on Ml lent some weight to the outlook for market circumstances would incur too much risk considerable slowing in this aggregate. More- of prolonging undue growth in money and debt, over, given the volatility of the Ml data and the possibly triggering an abrupt and exaggerated difficulties of making seasonal adjustments, a decline in the foreign exchange value of the decline in Ml for a time could not be ruled out. In dollar with disturbing implications for inflation general, however, growth in Ml could be expect- and financial markets over time. ed to be sustained over the fourth quarter as a While individual members expressed some whole in part by the prospect that inflows of shadings of opinion regarding policy implementasavings funds into NOW accounts were likely to tion over the weeks ahead, it was generally continue, at least at a moderate rate, unless agreed that the balance of considerations bearing market interest rates rose quite substantially on the Committee's decision argued for little or from current levels. In the circumstances, it no change from the recently prevailing degree of appeared increasingly doubtful that the targeted pressure on reserve positions. At the conclusion rate of Ml growth for the second half of the year of the Committee's discussion, a directive that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 1986 called for maintaining the degree of reserve pres- Following the Committee's meeting on August 20, sure sought in recent weeks was favored by most the trade-weighted value of the dollar against major foreign currencies appreciated through mid-Septemmembers. They expected such an approach to ber. The dollar subsequently declined sharply, espepolicy implementation to be consistent with cially after the announcement on September 22 by the growth of both M2 and M3 at annual rates of Finance Ministers and Central Bank Governors of the around 6 to 7 percent for the period from Sep- G-5 countries that exchange rates have not fully retember to December. Over the same period, flected economic fundamentals. Ml growth surged in August, reflecting exceptional growth in Ml was expected to slow markedly— strength in interest-bearing checkable deposits and also to an annual rate of 6 to 7 percent—and even relatively rapid expansion in other components; data slower growth would be acceptable in the con- for the first half of September suggest slower but still text of satisfactory economic performance, given substantial expansion. Reflecting the surge in Ml, M2 the very rapid expansion experienced in recent accelerated in August, and M3 also strengthened somewhat. Expansion in total domestic nonfinancial months. The members agreed that somewhat debt has remained relatively rapid. Most market intergreater or lesser reserve restraint would be acest rates have changed little on balance since the ceptable over the intermeeting period, depending August meeting of the Committee. on the behavior of the monetary aggregates and The Federal Open Market Committee seeks to fostaking account of appraisals of the strength of the ter monetary and financial conditions that will help to business expansion, the performance of the dol- reduce inflation further, promote growth in output on a sustainable basis, and contribute to an improved patlar in foreign exchange markets, progress against tern of international transactions* In furtherance of inflation, and conditions in domestic and internathese objectives the Committee at the July meeting tional credit markets. It was also understood that reaffirmed ranges for the year of 6 to 9 percent for M2 policy might be implemented with somewhat and 6 to 9Vi percent for M3. The associated range for more flexibility than usual over the relatively total domestic nonfinancial debt was reaffirmed at 9 to 12 percent. With respect to Ml, the base was moved short intermeeting period, given the uncertainforward to the second quarter of 1985 and a range was ties associated with particularly sensitive condiestablished at an annual growth rate of 3 to 8 percent. tions in the foreign exchange and other markets. The range takes account of expectations of a return of The members agreed that the intermeeting range velocity growth toward more usual patterns, following for the federal funds rate, which provides a the sharp decline in velocity during the first half of the year, while also recognizing a higher degree of uncermechanism for initiating consultation of the tainty regarding that behavior. The appropriateness of Committee when its boundaries are persistently the new range will continue to be reexamined in the exceeded, should be left unchanged at 6 to 10 light of evidence with respect to economic and finanpercent. cial developments including developments in foreign exchange markets. More generally, the Committee At the conclusion of the meeting, the following agreed that growth in the aggregates may be in the domestic policy directive was issued to the Fedupper parts of their ranges, depending on continuing eral Reserve Bank of New York: developments with respect to velocity and provided The information reviewed at this meeting suggests that inflationary pressures remain subdued. that economic activity expanded in the third quarter at For 1986 the Committee agreed on tentative ranges a moderately faster rate than in the first half of the of monetary growth, measured from the fourth quarter year. In August, industrial production increased some- of 1985 to the fourth quarter of 1986, of 4 to 7 percent what. Total retail sales rose considerably, boosted by for Ml, 6 to 9 percent for M2, and 6 to 9 percent for a surge in auto sales. Housing starts, while increasing M3. The associated range for growth in total domestic in August, were still no higher than their average level nonfinancial debt was provisionally set at 8 to 11 in the second quarter. Incoming information generally percent for 1986. With respect to Ml particularly, the suggested a leveling of business capital spending. The Committee recognized that uncertainties surrounding merchandise trade deficit in July and August averaged recent behavior of velocity would require careful somewhat less than in the second quarter as a drop in reappraisal of the target range at the beginning of 1986. imports was partly offset by a slight decline in exports. Moreover, in establishing ranges for next year, the Total nonfarm payroll employment rose somewhat Committee also recognized that account would need to more in August than in most other recent months. The be taken of experience with institutional and depositor civilian unemployment rate fell from 7.3 percent in behavior in response to the completion of deposit rate July—its level since February—to 7.0 percent in Au- deregulation early in the year. gust. Broad measures of prices and wages appear to be In the implementation of policy for the immediate rising at rates close to or somewhat below those future, the Committee seeks to maintain the degree of recorded earlier in the year. pressure on reserve positions sought in recent weeks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 25 This action is expected to be consistent with growth in 2. Authorization for M2 and M3 over the period from September to Decem- Foreign Currency Operations ber at annual rates of about 6 to 7 percent. A marked slowing of Ml growth over the period to an annual rate At this meeting the Committee also considered of around 6 to 7 percent is also anticipated; slower growth over the next three months would be accept- the need for adjustment in the limit on holdings able in the context of satisfactory economic perform- of foreign currencies in the System Open Market ance, given recent very rapid growth in Ml. Somewhat Account. At present, Paragraph ID of the Comgreater or lesser reserve restraint would be acceptable mittee's authorization for foreign currency operdepending on behavior of the aggregates, taking acations authorized the Federal Reserve Bank of count of appraisals of the strength of the business expansion, developments in foreign exchange mar- New York, for the System Open Market Ackets, progress against inflation, and conditions in count, to maintain an overall open position in all domestic and international credit markets. The Chair- foreign currencies not exceeding $8.0 billion. man may call for Committee consultation if it appears System holdings of foreign currencies currently to the Manager for Domestic Operations that reserve totaled about $5!/2 billion, based on historical conditions during the period before the next meeting are likely to be associated with a federal funds rate costs. In light of the potential for foreign expersistently outside a range of 6 to 10 percent. change operations by the United States and other countries following the recent G-5 announce- Votes for this action: Messrs. Volcker, Corrigan, ment, the Committee agreed to raise the limit in Balles, Forrestal, Keehn, Martin, Partee, Rice, Ms. paragraph ID of the authorization to $10.0 bil- Seger, and Mr. Wallich. Vote against this action: Mr. Black. lion, effective immediately. Mr. Black dissented because he believed some Votes for this action: Messrs. Volcker, Corrigan, increase in the degree of reserve pressure was Balles, Black, Forrestal, Keehn, Martin, Partee, needed at this time to ensure adequate slowing of Rice, Ms. Seger, and Mr. Wallich. Votes against Ml growth in the period ahead. this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Announcements FINAL REVISIONS TO REGULATION B goes into effect on January 1, 1986, have been issued by the Federal Reserve Board. The Federal Reserve Board has issued final Last April, the Board adopted its Credit Pracrevisions to its Regulation B (Equal Credit Op- tices Rule—subpart B of Regulation AA (Unfair portunity) that will assist creditor compliance or Deceptive Acts or Practices)—following adopand increase protection for credit applicants. The tion of a similar rule by the Federal Trade final revisions will become effective December Commission (FTC) for creditors other than 16, 1985, but creditors may continue to comply banks. with the Board's current regulation until October In general, the new rule prohibits banks from 1, 1986. The Board is also publishing an official using the following remedies to enforce consumstaff commentary to interpret the revised Regula- er credit obligations: confessions of judgment; tion B. waivers of exemption; wage assignments; and The Board's action is part of its Regulatory nonpossessory, nonpurchase money security in- Improvement Project. Under this project, the terests in household goods. The rule also bans a Board is reviewing and revising all of its regula- practice known as "pyramiding late charges," tions to update them, simplify their language, prohibits a bank from misrepresenting a cosignand eliminate unneeded provisions. The revi- er's liability, and requires that a cosigner receive sions to Regulation B include the following: a notice explaining the cosigner's obligations. • Procedures for dealing with incomplete appli- The staff guidelines are in the form of quescations and a broader selection of sample forms tions and answers and focus on material of for informing applicants of the reasons for credit general application that will be updated annually; denial. the first update is expected in early 1986 to • Changes in the data notation requirements permit response to additional questions that may applicable to dwelling-related mortgage loan ap- arise after the rule goes into effect. plications. The Board's rule applies to all banks and their • Changes in the definition of "applicant" to subsidiaries. Institutions that are members of the give guarantors legal standing in the courts when Federal Home Loan Bank System and nonbank there is an alleged violation of the regulation's subsidiaries of bank holding companies are covsignature provisions. ered by the rules of the Federal Home Loan The major portions of the existing regulatory Bank Board and FTC respectively. provisions remain virtually unchanged. The complete text of the revised regulation may be obtained from the Federal Reserve Banks or on POLICY STATEMENT ON PAYMENT request to the Board's Publication Services and OF CASH DIVIDENDS also appears in the "Legal Developments" section of this BULLETIN. The Federal Reserve Board issued on November 14, 1985, a policy statement on the payment of cash dividends by state member banks and STAFF GUIDELINES FOR COMPLIANCE WITH bank holding companies that are experiencing THE CREDIT PRACTICES RULE financial difficulties. The policy statement, which is part of a pro- Staff guidelines that are designed to help banks gram to strengthen supervision of banking operacomply with the Credit Practices Rule, which tions, addresses the following practices of super- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

27 visory concern by institutions that are and inspection of state member banks and bank experiencing earnings weaknesses, that have holding companies and said it is considering other serious problems, or that have inadequate other actions, including tightened prudential capital: (1) the payment of dividends not covered standards, improved coordination and cooperby earnings; (2) the payment of dividends from ation with other federal and state banking departborrowed funds; and (3) the payment of divi- ments, and strengthened examination staffs and dends from unusual or nonrecurring gains, such improved examiner training programs. as the sale of property or other assets. Earlier this month, the Board approved revi- It is the Federal Reserve's view that an organi- sions to the reporting requirements for bank zation experiencing earnings weaknesses or oth- holding companies and implementation of a new er financial pressures should not maintain a level report on nonbanking subsidiaries. Most of these of cash dividends that exceeds its net income, changes will take effect on March 31, 1986, and that is inconsistent with the organization's capi- are designed to obtain new data to more fully tal position, or that can only be funded in ways assess operations and risks, to enhance off-premthat may weaken the organization's financial ise surveillance programs, to obtain data on a health. In some instances, it may be appropriate more frequent basis, and to conform the account to eliminate cash dividends altogether. categories and definitions, when appropriate, to The policy statement reads in part: those of the call report. A fundamental principle underlying the Federal Re- In general, the revisions provide for the subserve's supervision and regulation of bank holding mission of basic financial statements prepared in companies is that bank holding companies should accordance with generally accepted accounting serve as a source of managerial and financial strength principles, and for the collection of a limited to their subsidiary banks. The Board believes, thereamount of additional data, which is to be used in fore, that a bank holding company should not maintain a level of cash dividends to its shareholders that places the calculation of holding companies' capital undue pressure on the capital of bank subsidiaries or ratios for the purpose of monitoring compliance that can be funded only through additional borrowings with the Board's guidelines on capital adequacy or other arrangements that may undermine the bank ratios. holding company's ability to serve as a source of Copies of the new reporting forms for bank strength. Thus, for example, if a major subsidiary bank is unable to pay dividends to its parent company—as a holding companies (Y-6 and Y-9) may be obconsequence of statutory limitations, intervention by tained from the District Federal Reserve Banks. the primary supervisor, or noncompliance with regulatory capital requirements—the bank holding company POLICY STATEMENT ON REPURCHASE should give serious consideration to reducing or eliminating its dividends in order to conserve its capital AGREEMENT TRANSACTIONS base and provide capital assistance to the subsidiary bank. The Federal Reserve Board announced on November 1, 1985, the adoption of a supervisory The Federal Reserve recognizes that many policy on repurchase agreement transactions. organizations have decided on their own to re- The adoption of this policy had been recomduce their dividends within the past several mended by the Federal Financial Institutions years, and others have done so in response to Examination Council. supervisory encouragement. The policy statement is intended to provide Thus, this policy is meant to reinforce pruden- financial institutions with minimum safety-andtial considerations and to encourage manage- soundness guidelines for managing credit risk ment to continually review dividend policies in exposure. It also provides guidance related to the light of an organization's financial condition, possession or control of securities involved in compliance with supervisory guidelines on capi- repurchase agreement transactions. In addition, tal adequacy, and future growth plans and pros- the policy points out the need for full collateralipects. zation, maintenance of agreed upon collateral On October 7, the Board announced policies to margins, and frequent mark-to-market proceincrease the frequency of on-site examination dures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 1986 Depository institutions doing business with is estimated at $618.2 million, resulting in a 102.7 unregulated government securities dealers are percent recovery rate. urged to verify that these dealers are complying At the same time, the Board approved the 1986 with the Federal Reserve Bank of New York's PSAF for Reserve Bank priced services of $68.1 minimum capital guidelines. million, an increase of 11.3 percent over the 1985 Depository institutions should contact their level. The PSAF is an allowance for the taxes District Federal Reserve Banks with questions that would have been paid and the return on concerning the procedures for obtaining control capital that would have been provided had the of U.S. Treasury securities and certain agency Federal Reserve's priced services been furnished obligations through the Federal Reserve's book- by a private business firm. These actions are entry system. effective January 1, 1986. QUARTERLY REPORT ON PRICED SERVICES CHANGES TO THE OPERATING SCHEDULE FOR FEDWIRE The Federal Reserve Board reported on November 20, 1985, financial results of Federal Reserve The Federal Reserve Board has announced sevpriced service operations for the quarter ending eral revisions to the operating schedule for Fed- September 30, 1985. wire, effective January 1, 1986. The Board issues a report on priced services The Board approved a change in the deadline annually and a priced service balance sheet and for interdistrict, third-party wire transfers from income statement quarterly. The financial state- 4:30 p.m. to 5:00 p.m. eastern time. This change ments are designed to reflect standard account- will provide additional processing time for west ing practices, taking into account the nature of coast institutions. Also, the Board set a new the Federal Reserve's activities and its unique opening time of no later than 9:00 a.m. eastern position in this field. time. Currently, opening hours range from 8:00 a.m. to 11:00 a.m., with the majority of Reserve Banks beginning operations by 9:00 a.m. FEE SCHEDULES FOR PRICED SERVICES PROPOSEQ ACTIONS The Federal Reserve Board announced on November 1, 1985, the 1986 fee schedules for ser- The Federal Reserve Board has issued for comvices provided by the Reserve Banks. For the ment proposals, including an amendment to Regmost part, the new fees are the same as those for ulation J (Collection of Checks and Other Items 1985. and Wire Transfer of Funds), to reduce float The fee schedules apply to check collection, generated because of local holiday schedules. automated clearinghouse transactions, wire Comment is requested by January 2, 1986. transfer of funds and net settlement, definitive The Federal Reserve Board has also published securities safekeeping and noncash collection, for comment a proposal that would define perand book-entry securities services for non-Trea- petual debt securities issued by state member sury securities. Fee schedules for the check banks and bank holding companies as primary collection service will be distributed by the Re- capital. Comment is requested by January 17, serve Banks; fee schedules for the remaining 1986. services are available from the Reserve Banks or from Publications Services, Board of Governors of the Federal Reserve System, Washington, SYSTEM MEMBERSHIP: D.C. 20551. ADMISSION OF STATE BANKS In 1986, total costs for priced services, including the private sector adjustment factor (PSAF), The following banks were admitted to memberate projected to be $602.3 million. Total revenue ship in the Federal Reserve System during the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 29 period from November 1 through December 1, Montana 1985. Billings Yellowstone Bank Florida Ohio Tampa Commerce Bank of Tampa Port Clinton Society Bank Maryland of Northwest Ohio Baltimore Chase Bank of Maryland Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

31 Legal Developments REVISION OF REGULATION B Section 202.4—General rule prohibiting discrimination. The Board of Governors is revising 12 C.F.R. Part Section 202.5—Rules concerning taking of applica- 202, its regulation implementing the Equal Credit tions. Opportunity Act, pursuant to its policy of periodically Section 202.6—Rules concerning evaluation of applireviewing all of its regulations. The regulation has cations. been simplified to ease the burdens imposed on credi- Section 202.7—Rules concerning extensions of credit. tors, consistent with the Board's responsibility for Section 202.8—Special purpose credit programs. implementing the Equal Credit Opportunity Act. The Section 202.9—Notifications. Board made changes in the data notation requirements Section 202.10—Furnishing of credit information. applicable to dwelling-related mortgage loan applica- Section 202.11—Relation to state law. tions, and in the definition of "applicant" to give Section 202.12—Record retention. guarantors legal standing in the courts when there is an Section 202.13—Information for monitoring purposes. alleged violation of the signature provisions of the act Section 202.14—Enforcement, penalties and liabilor regulation. In light of renewed concern about the ities. availability of business credit to women and members Appendix A—Federal Enforcement Agencies of minority groups, the Board considered (but deferred Appendix B—Model Application Forms a decision on) revising the rules applicable to business Appendix C—Sample Notification Forms credit transactions; the Board will monitor develop- Appendix D—Issuance Of Staff Interpretations ments in this area, and if it appears that regulatory Supplement I—Official Staff Interpretations changes are needed, the Board will take appropriate action. The Board also considered but did not revise Authority: 15 U.S.C. 1691 et seq. the regulation to cover consumer leasing under the ECO A. The Board has updated some provisions of the regulation and revised others to facilitate creditor REGULATION B (EQUAL CREDIT OPPORTUNITY) compliance. The revisions include streamlined procedures for dealing with incomplete applications and a Section 202.1—Authority, Scope and Purpose broader selection of sample forms for informing applicants of the action taken on applications. The major (a) Authority and scope. This regulation is issued by portions of the existing regulatory provisions remain the Board of Governors of the Federal Reserve Sysvirtually unchanged. tem pursuant to title VII (Equal Credit Opportunity Effective December 16, 1985, with the option for Act) of the Consumer Credit Protection Act, as creditors of continuing to comply with the current amended (15 U.S.C. 1601 et seq.). Except as otherregulation until October 1, 1986, the Board hereby wise provided herein, the regulation applies to all revises 12 C.F.R. Part 202 as follows: persons who are creditors, as defined in section 202.2(1). Information collection requirements con- 1. The authority citation for Part 202 continues to read tained in this regulation have been approved by the as follows: Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned Authority: Sec. 703, ECOA; 15 U.S.C. 1691b. OMB No. 7100-0201. (b) Purpose. The purpose of this regulation is to Part 202—Equal Credit Opportunity promote the availability of credit to all creditworthy applicants without regard to race, color, religion, Section 202.1—Authority, scope and purpose. national origin, sex, marital status, or age (provided Section 202.2—Definitions. the applicant has the capacity to contract); to the fact Section 202.3—Limited exceptions for certain classes that all or part of the applicant's income derives from a of transactions. public assistance program; or to the fact that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Federal Reserve Bulletin • January 1986 applicant has in good faith exercised any right under (3) An action that falls within the definition of both the Consumer Credit Protection Act. The regulation paragraphs (c)(1) and (c)(2) of this section is govprohibits creditor practices that discriminate on the erned by paragraph (c)(2). basis of any of these factors. The regulation also (d) Age refers only to the age of natural persons and requires creditors to notify applicants of action taken means the number of fully elapsed years from the date on their applications; to report credit history in the of an applicant's birth. names of both spouses on an account; to retain records (e) Applicant means any person who requests or who of credit applications; and to collect information about has received an extension of credit from a creditor, the applicant's race and other personal characteristics and includes any person who is or may become in applications for certain dwelling-related loans. contractually liable regarding an extension of credit. For purposes of section 202.7(d), the term includes guarantors, sureties, endorsers and similar parties. Section 202.2—Definitions (f) Application means an oral or written request for an extension of credit that is made in accordance with For the purposes of this regulation, unless the context procedures established by a creditor for the type of indicates otherwise, the following definitions apply. credit requested. The term does not include the use of (a) Account means an extension of credit. When an account or line of credit to obtain an amount of employed in relation to an account, the word use credit that is within a previously established credit refers only to open-end credit. limit. A completed application means an application in (b) Act means the Equal Credit Opportunity Act (title connection with which a creditor has received all the VII of the Consumer Credit Protection Act). information that the creditor regularly obtains and (c) Adverse action. considers in evaluating applications for the amount (1) The term means: and type of credit requested (including, but not limited (i) A refusal to grant credit in substantially the to, credit reports, any additional information requestamount or on substantially the terms requested in ed from the applicant, and any approvals or reports by an application unless the creditor makes a coun- governmental agencies or other persons that are necteroffer (to grant credit in a different amount or on essary to guarantee, insure, or provide security for the other terms) and the applicant uses or expressly credit or collateral). The creditor shall exercise reaaccepts the credit offered; sonable diligence in obtaining such information. (ii) A termination of an account or an unfavorable (g) Board means the Board of Governors of the change in the terms of an account that does not Federal Reserve System. affect all or a substantial portion of a class of the (h) Consumer credit means credit extended to a natucreditor's accounts; or ral person primarily for personal, family, or household (iii) A refusal to increase the amount of credit purposes. available to an applicant who has made an appli- (i) Contractually liable means expressly obligated to cation for an increase. repay all debts arising on an account by reason of an (2) The term does not include: agreement to that effect. (i) A change in the terms of an account expressly (j) Credit means the right granted by a creditor to an agreed to by an applicant; applicant to defer payment of a debt, incur debt and (ii) Any action or forbearance relating to an ac- defer its payment, or purchase property or services count taken in connection with inactivity, default, and defer payment therefor. or delinquency as to that account; (k) Credit card means any card, plate, coupon book, or (iii) A refusal or failure to authorize an account other single credit device that may be used from time transaction at a point of sale or loan, except when to time to obtain money, property, or services on the refusal is a termination or an unfavorable credit. change in the terms of an account that does not (1) Creditor means a person who, in the ordinary affect all or a substantial portion of a class of the course of business, regularly participates in the decicreditor's accounts, or when the refusal is a denial sion of whether or not to extend credit. The term of an application for an increase in the amount of includes a creditor's assignee, transferee, or subrogee credit available under the account; who so participates. For purposes of sections 202.4 (iv) A refusal to extend credit because applicable and 202.5(a), the term also includes a person who, in law prohibits the creditor from extending the the ordinary course of business, regularly refers applicredit requested; or cants or prospective applicants to creditors, or selects (v) A refusal to extend credit because the creditor or offers to select creditors to whom requests for credit does not offer the type of credit or credit plan may be made. A person is not a creditor regarding any requested. violation of the act or this regulation committed by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 33 another creditor unless the person knew or had rea- when sufficient credit experience becomes availsonable notice of the act, policy, or practice that able. constituted the violation before becoming involved in A system that fails this validity test is no longer an the credit transaction. The term does not include a empirically derived, demonstrably and statistically person whose only participation in a credit transaction sound, credit scoring system for that creditor. involves honoring a credit card, (q) Extend credit and extension of credit mean the (m) Credit transaction means every aspect of an granting of credit in any form (including, but not applicant's dealings with a creditor regarding an appli- limited to, credit granted in addition to any existing cation for credit or an existing extension of credit credit or credit limit; credit granted pursuant to an (including, but not limited to, information require- open-end credit plan; the refinancing or other renewal ments; investigation procedures; standards of credit- of credit, including the issuance of a new credit card in worthiness; terms of credit; furnishing of credit infor- place of an expiring credit card or in substitution for an mation; revocation, alteration, or termination of existing credit card; the consolidation of two or more credit; and collection procedures), obligations; or the continuance of existing credit with- (n) Discriminate against an applicant means to treat out any special effort to collect at or after maturity). an applicant less favorably than other applicants, (r) Good faith means honesty in fact in the conduct (o) Elderly means age 62 or older, or transaction. (p) Empirically derived and other credit scoring sys- (s) Inadvertent error means a mechanical, electrontems. ic, or clerical error that a creditor demonstrates was (1) A credit scoring system is a system that evalu- not intentional and occurred notwithstanding the ates an applicant's creditworthiness mechanically, maintenance of procedures reasonably adapted to based on key attributes of the applicant and aspects avoid such errors. of the transaction, and that determines, alone or in (t) Judgmental system of evaluating applicants conjunction with an evaluation of additional infor- means any system for evaluating the creditworthiness mation about the applicant, whether an applicant is of an applicant other than an empirically derived, deemed creditworthy. To qualify as an empirically demonstrably and statistically sound, credit scoring derived, demonstrably and statistically sound, cred- system. it scoring system, the system must be: (u) Marital status means the state of being unmar- (i) Based on data that are derived from an empiri- ried, married, or separated, as defined by applicable cal comparison of sample groups or the popula- state law. The term "unmarried" includes persons tion of creditworthy and noncreditworthy appli- who are single, divorced, or widowed. cants who applied for credit within a reasonable (v) Negative factor or value, in relation to the age of preceding period of time ; elderly applicants, means utilizing a factor, value, or (ii) Developed for the purpose of evaluating the weight that is less favorable regarding elderly applicreditworthiness of applicants with respect to the cants than the creditor's experience warrants or is less legitimate business interests of the creditor utiliz- favorable than the factor, value, or weight assigned to ing the system (including, but not limited to, the class of applicants that are not classified as elderly minimizing bad debt losses and operating ex- and are most favored by a creditor on the basis of age. penses in accordance with the creditor's business (w) Open-end credit means credit extended under a judgment); plan under which a creditor may permit an applicant to (iii) Developed and validated using accepted sta- make purchases or obtain loans from time to time tistical principles and methodology; and directly from the creditor or indirectly by use of a (iv) Periodically revalidated by the use of appro- credit card, check, or other device. priate statistical principles and methodology and (x) Person means a natural person, corporation, adjusted as necessary to maintain predictive abili- government or governmental subdivision or agency, ty. trust, estate, partnership, cooperative, or association. (2) A creditor may use an empirically derived, (y) Pertinent element of creditworthiness, in relation demonstrably and statistically sound, credit scoring to a judgmental system of evaluating applicants, system obtained from another person or may obtain means any information about applicants that a creditor credit experience from which to develop such a obtains and considers and that has a demonstrable system. Any such system must satisfy the criteria relationship to a determination of creditworthiness. set forth in paragraph (p)(l)(i) through (iv) of this (z) Prohibited basis means race, color, religion, section; if the creditor is unable during the develop- national origin, sex, marital status, or age (provided ment process to validate the system based on its that the applicant has the capacity to enter into a own credit experience in accordance with paragraph binding contract); the fact that all or part of the (p)(l) of this section, the system must be validated applicant's income derives from any public assistance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 1986 program; or the fact that the applicant has in good faith (vii) Section 202.10 relating to furnishing of credit exercised any right under the Consumer Credit Protec- information; and tion Act or any state law upon which an exemption has (viii) Section 202.12(b) relating to record retenbeen granted by the Board. tion. (aa) State means any State, the District of Colum- (c) Incidental credit. bia, the Commonwealth of Puerto Rico, or any terri- (1) Definition. Incidental credit refers to extensions tory or possession of the United States. of consumer credit other than credit of the types described in paragraphs (a) and (b) of this section: Section 202.3—Limited Exceptions for Certain (i) That are not made pursuant to the terms of a Classes of Transactions credit card account; (ii) That are not subject to a finance charge (as (a) Public utilities credit. defined in Regulation Z, 12 C.F.R 226.4); and (1) Definition. Public utilities credit refers to exten- (iii) That are not payable by agreement in more sions of credit that involve public utility services than four installments. provided through pipe, wire, or other connected (2) Exceptions. The following provisions of this facilities, or radio or similar transmission (including regulation do not apply to incidental credit: extensions of such facilities), if the charges for (i) Section 202.5(c) concerning information about service, delayed payment, and any discount for a spouse or former spouse; prompt payment are filed with or regulated by a (ii) Section 202.5(d)(1) concerning information government unit. about marital status; (2) Exceptions. The following provisions of this (iii) Section 202.5(d)(2) concerning information regulation do not apply to public utilities credit: about income derived from alimony, child sup- (i) Section 202.5(d)(1) concerning information port, or separate maintenance payments; about marital status; (iv) Section 202.5(d)(3) concerning information (ii) Section 202.10 relating to furnishing of credit about the sex of an applicant, but only to the information; and extent necessary for medical records or similar (iii) Section 202.12(b) relating to record retention. purposes; (b) Securities credit. (v) Section 202.7(d) relating to the signature of a (1) Definition. Securities credit refers to extensions spouse or other person; of credit subject to regulation under section 7 of the (vi) Section 202.9 relating to notifications; Securities Exchange Act of 1934 or extensions of (vii) Section 202.10 relating to furnishing of credit credit by a broker or dealer subject to regulation as a information; and broker or dealer under the Securities Exchange Act (viii) Section 202.12(b) relating to record retenof 1934. tion. (2) Exceptions. The following provisions of this (d) Business credit. regulation do not apply to securities credit: (1) Definition. Business credit refers to extensions (i) Section 202.5(c) concerning information about of credit primarily for business or commercial (ina spouse or former spouse; cluding agricultural) purposes, but excluding exten- (ii) Section 202.5(d)(1) concerning information sions of credit of the types described in paragraphs about marital status; (a) and (b) of this section. (iii) Section 202.5(d)(3) concerning information (2) Exceptions. The following provisions of this about the sex of an applicant; regulation do not apply to business credit: (iv) Section 202.7(b) relating to designation of (i) Section 202.5(d)(1) concerning information name, but only to the extent necessary to prevent about marital status; and violation of rules regarding an account in which a (ii) Section 202.10 relating to furnishing of credit broker or dealer has an interest, or rules necessi- information. tating the aggregation of accounts of spouses for (3) Modified requirements. The following provisions the purpose of determining controlling interests, of this regulation apply to business credit as specibeneficial interests, beneficial ownership, or pur- fied below: chase limitations and restrictions; (i) Section 202.9(a), (b), and (c) relating to notifi- (v) Section 202.7(c) relating to action concerning cations: the creditor shall notify the applicant, open-end accounts, but only to the extent the orally or in writing, of action taken or of incomaction taken is on the basis of a change of name or pleteness. When credit is denied or when other marital status; adverse action is taken, the creditor is required to (vi) Section 202.7(d) relating to the signature of a provide a written statement of the reasons and the spouse or other person; ECO A notice specified in section 202.9(b) if the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 35 applicant makes a written request for the reasons (c) Information about a spouse or former spouse. within 30 days of that notification; and (1) Except as permitted in this paragraph, a creditor (ii) Section 202.12(b) relating to record retention: may not request any information concerning the the creditor shall retain records as provided in spouse or former spouse of an applicant. section 202.12(b) if the applicant, within 90 days (2) Permissible inquiries. A creditor may request after being notified of action taken or of incom- any information concerning an applicant's spouse pleteness, requests in writing that records be (or former spouse under paragraph (c)(2)(v)) that retained, may be requested about the applicant if: (e) Government credit. (i) The spouse will be permitted to use the ac- (1) Definition. Government credit refers to exten- count; sions of credit made to governments or governmen- (ii) The spouse will be contractually liable on the tal subdivisions, agencies, or instrumentalities. account; (2) Applicability of regulation. Except for section (iii) The applicant is relying on the spouse's 202.4, the general rule prohibiting discrimination on income as a basis for repayment of the credit a prohibited basis, the requirements of this regula- requested; tion do not apply to government credit. (iv) The applicant resides in a community property state or property on which the applicant is Section 202.4—General Rule Prohibiting relying as a basis for repayment of the credit Discrimination requested is located in such a state; or (v) The applicant is relying on alimony, child A creditor shall not discriminate against an applicant support, or separate maintenance payments from on a prohibited basis regarding any aspect of a credit a spouse or former spouse as a basis for repaytransaction. ment of the credit requested. (3) Other accounts of the applicant. A creditor may Section 202.5—Rules Concerning Taking of request an applicant to list any account upon which Applications the applicant is liable and to provide the name and address in which the account is carried. A creditor (a) Discouraging applications. A creditor shall not may also ask the names in which an applicant has make any oral or written statement, in advertising or previously received credit. otherwise, to applicants or prospective applicants that (d) Other limitations on information requests. would discourage on a prohibited basis a reasonable (1) Marital status. If an applicant applies for individperson from making or pursuing an application. ual unsecured credit, a creditor shall not inquire (b) General rules concerning requests for information. about the applicant's marital status unless the appli- (1) Except as provided in paragraphs (c) and (d) of cant resides in a community property state or is this section, a creditor may request any information relying on property located in such a state as a basis in connection with an application.1 for repayment of the credit requested. If an applica- (2) Required collection of information. Notwith- tion is for other than individual unsecured credit, a standing paragraphs (c) and (d) of this section, a creditor may inquire about the applicant's marital creditor shall request information for monitoring status, but shall use only the terms "married," purposes as required by section 202.13 for credit "unmarried," and "separated." A creditor may secured by the applicant's dwelling. In addition, a explain that the category "unmarried" includes creditor may obtain information required by a regu- single, divorced, and widowed persons. lation, order, or agreement issued by, or entered (2) Disclosure about income from alimony, child into with, a court or an enforcement agency (includ- support, or separate maintenance. A creditor shall ing the Attorney General of the United States or a not inquire whether income stated in an application similar state official) to monitor or enforce compli- is derived from alimony, child support, or separate ance with the act, this regulation, or other federal or maintenance payments unless the creditor discloses state statute or regulation. to the applicant that such income need not be revealed if the applicant does not want the creditor (3) Special purpose credit. A creditor may obtain to consider it in determining the applicant's creditinformation that is otherwise restricted to determine worthiness. eligibility for a special purpose credit program, as provided in section 202.8(c) and (d). (3) Sex. A creditor shall not inquire about the sex of an applicant. An applicant may be requested to designate a title on an application form (such as Ms., 1. This paragraph does not limit or abrogate any federal or state law Miss, Mr., or Mrs.) if the form discloses that the regarding privacy, privileged information, credit reporting limitations, designation of a title is optional. An application form or similar restrictions on obtainable information. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 1986 shall otherwise use only terms that are neutral as to worthiness, a creditor may consider an applisex. cant's age or whether an applicant's income de- (4) Childbearing, childrearing. A creditor shall not rives from any public assistance program only for inquire about birth control practices, intentions con- the purpose of determining a pertinent element of cerning the bearing or rearing of children, or capa- creditworthiness. bility to bear children. A creditor may inquire about (iv) In any system of evaluating creditworthiness, the number and ages of an applicant's dependents or a creditor may consider the age of an elderly about dependent-related financial obligations or ex- applicant when such age is used to favor the penditures, provided such information is requested elderly applicant in extending credit. without regard to sex, marital status, or any other (3) Childbearing, childrearing. In evaluating creditprohibited basis. worthiness, a creditor shall not use assumptions or (5) Race, color, religion, national origin. A creditor aggregate statistics relating to the likelihood that any shall not inquire about the race, color, religion, or group of persons will bear or rear children or will, national origin of an applicant or any other person in for that reason, receive diminished or interrupted connection with a credit transaction. A creditor may income in the future. inquire about an applicant's permanent residence (4) Telephone listing. A creditor shall not take into and immigration status. account whether there is a telephone listing in the (e) Written applications. A creditor shall take written name of an applicant for consumer credit, but may applications for the types of credit covered by section take into account whether there is a telephone in the 202.13(a), but need not take written applications for applicant's residence. other types of credit. (5) Income. A creditor shall not discount or exclude from consideration the income of an applicant or the Section 202.6—Rules Concerning Evaluation of spouse of an applicant because of a prohibited basis Applications or because the income is derived from part-time employment or is an annuity, pension, or other (a) General rule concerning use of information. Ex- retirement benefit; a creditor may consider the cept as otherwise provided in the act and this regula- amount and probable continuance of any income in tion, a creditor may consider any information ob- evaluating an applicant's creditworthiness. When an tained, so long as the information is not used to applicant relies on alimony, child support, or sepadiscriminate against an applicant on a prohibited ba- rate maintenance payments in applying for credit, sis.2 the creditor shall consider such payments as income (b) Specific rules concerning use of information. to the extent that they are likely to be consistently (1) Except as provided in the act and this regulation, made. a creditor shall not take a prohibited basis into (6) Credit history. To the extent that a creditor account in any system of evaluating the creditwor- considers credit history in evaluating the creditworthiness of applicants. thiness of similarly qualified applicants for a similar (2) Age, receipt of public assistance. .type and amount of credit, in evaluating an appli- (i) Except as permitted in this paragraph, a credi- cant's creditworthiness a creditor shall consider: tor shall not take into account an applicant's age (i) The credit history, when available, of accounts (provided that the applicant has the capacity to designated as accounts that the applicant and the enter into a binding contract) or whether an applicant's spouse are permitted to use or for applicant's income derives from any public assist- which both are contractually liable; ance program. (ii) On the applicant's request, any information (ii) In an empirically derived, demonstrably and the applicant may present that tends to indicate statistically sound, credit scoring system, a credi- that the credit history being considered by the tor may use an applicant's age as a predictive creditor does not accurately reflect the applicant's variable, provided that the age of an elderly creditworthiness; and applicant is not assigned a negative factor or (iii) On the applicant's request, the credit history, value. when available, of any account reported in the (iii) In a judgmental system of evaluating credit- name of the applicant's spouse or former spouse that the applicant can demonstrate accurately reflects the applicant's creditworthiness. 2. The legislative history of the act indicates that the Congress intended an "effects test" concept, as outlined in the employment (7) Immigration status. A creditor may consider field by the Supreme Court in the cases of Griggs v. Duke Power Co., whether an applicant is a permanent resident of the 401 U.S. 424 (1971), and Albemarle Paper Co. v. Moody, 422 U.S. 405 United States, the applicant's immigration status, (1975), to be applicable to a creditor's determination of creditworthiness. and any additional information that may be neces- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 37 sary to ascertain the creditor's rights and remedies under the law of the state in which the property is regarding repayment, located, to enable the creditor to reach the property (c) State property laws. A creditor's consideration or being relied upon in the event of the death or default application of state property laws directly or indirectly of the applicant. affecting creditworthiness does not constitute unlawful (3) Unsecured credit — community property states. discrimination for the purposes of the act or this If a married applicant requests unsecured credit and regulation. resides in a community property state, or if the property upon which the applicant is relying is Section 202.7—Rules Concerning Extensions of located in such a state, a creditor may require the Credit signature of the spouse on any instrument necessary, or reasonably believed by the creditor to be (a) Individual accounts. A creditor shall not refuse to necessary, under applicable state law to make the grant an individual account to a creditworthy applicant community property available to satisfy the debt in on the basis of sex, marital status, or any other the event of default if: prohibited basis. (i) Applicable state law denies the applicant power (b) Designation of name. A creditor shall not refuse to to manage or control sufficient community propallow an applicant to open or maintain an account in a erty to qualify for the amount of credit requested birth-given first name and a surname that is the under the creditor's standards of creditworapplicant's birth-given surname, the spouse's sur- thiness; and name, or a combined surname. (ii) The applicant does not have sufficient separate (c) Action concerning existing open-end accounts. property to qualify for the amount of credit re- (1) Limitations. In the absence of evidence of the quested without regard to community property. applicant's inability or unwillingness to repay, a (4) Secured credit. If an applicant requests secured creditor shall not take any of the following actions credit, a creditor may require the signature of the regarding an applicant who is contractually liable on applicant's spouse or other person on any instruan existing open-end account on the basis of the ment necessary, or reasonably believed by the credapplicant's reaching a certain age or retiring or on itor to be necessary, under applicable state law to the basis of a change in the applicant's name or make the property being offered as security availmarital status: able to satisfy the debt in the event of default, for (i) Require a reapplication, except as provided in example, an instrument to create a valid lien, pass paragraph (c)(2) of this section; clear title, waive inchoate rights or assign earnings. (ii) Change the terms of the account; or (5) Additional parties. If, under a creditor's stan- (iii) Terminate the account. dards of creditworthiness, the personal liability of (2) Requiring reapplication. A creditor may require an additional party is necessary to support the a reapplication for an open-end account on the basis extension of the credit requested, a creditor may of a change in the marital status of an applicant who request a cosigner, guarantor, or the like. The is contractually liable if the credit granted was based applicant's spouse may serve as an additional party, in whole or in part on income of the applicant's but the creditor shall not require that the spouse be spouse and if information available to the creditor the additional party. indicates that the applicant's income may not sup- (6) Rights of additional parties. A creditor shall not port the amount of credit currently available. impose requirements upon an additional party that (d) Signature of spouse or other person. the creditor is prohibited from imposing upon an (1) Rule for qualified applicant. Except as provided applicant under this section. in this paragraph, a creditor shall not require the (e) Insurance. A creditor shall not refuse to extend signature of an applicant's spouse or other person, credit and shall not terminate an account because other than a joint applicant, on any credit instrument credit life, health, accident, disability, or other creditif the applicant qualifies under the creditor's stan- related insurance is not available on the basis of the dards of creditworthiness for the amount and terms applicant's age. of the credit requested. (2) Unsecured credit. If an applicant requests unsecured credit and relies in part upon property that the Section 202.8—Special Purpose Credit applicant owns jointly with another person to satisfy Programs the creditor's standards of creditworthiness, the creditor may require the signature of the other (a) Standards for programs. Subject to the provisions person only on the instrument(s) necessary, or rea- of paragraph (b) of this section, the act and this sonably believed by the creditor to be necessary, regulation permit a creditor to extend special purpose Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 1986 credit to applicants who meet eligibility requirements determining an applicant's eligibility for the program, under the following types of credit programs: information regarding the applicant's marital status; (1) Any credit assistance program expressly autho- alimony, child support, and separate maintenance rized by federal or state law for the benefit of an income; and the spouse's financial resources. In addieconomically disadvantaged class of persons; tion, a creditor may obtain the signature of an appli- (2) Any credit assistance program offered by a not- cant's spouse or other person on an application or for-profit organization, as defined under section credit instrument relating to a special purpose program 501(c) of the Internal Revenue Code of 1954, as if the signature is required by federal or state law. amended, for the benefit of its members or for the benefit of an economically disadvantaged class of Section 202.9—Notifications persons; or (3) Any special purpose credit program offered by a (a) Notification of action taken, ECOA notice, and for-profit organization or in which such an organiza- statement of specific reasons. tion participates to meet special social needs, if: (1) When notification is required. A creditor shall (i) The program is established and administered notify an applicant of action taken within: pursuant to a written plan that identifies the class (i) 30 days after receiving a completed application of persons that the program is designed to benefit concerning the creditor's approval of, counterofand sets forth the procedures and standards for fer to, or adverse action on the application; extending credit pursuant to the program; and (ii) 30 days after taking adverse action on an (ii) The program is established and administered incomplete application, unless notice is provided to extend credit to a class of persons who, under in accordance with paragraph (c) of this section; the organization's customary standards of credit- (iii) 30 days after taking adverse action on an worthiness, probably would not receive such existing account; or credit or would receive it on less favorable terms (iv) 90 days after notifying the applicant of a than are ordinarily available to other applicants counteroffer if the applicant does not expressly applying to the organization for a similar type and accept or use the credit offered. amount of credit. (2) Content of notification when adverse action is (b) Rules in other sections. taken. A notification given to an applicant when (1) General applicability. All of the provisions of adverse action is taken shall be in writing and shall this regulation apply to each of the special purpose contain: a statement of the action taken; the name credit programs described in paragraph (a) of this and address of the creditor; a statement of the section unless modified by this section. provisions of section 701(a) of the act; the name and (2) Common characteristics. A program described address of the federal agency that administers comin paragraph (a)(2) or (a)(3) of this section qualifies pliance with respect to the creditor; and either: as a special purpose credit program only if it was (i) A statement of specific reasons for the action established and is administered so as not to discrimi- taken; or nate against an applicant on any prohibited basis; (ii) A disclosure of the applicant's right to a however, all program participants may be required statement of specific reasons within 30 days, if the to share one or more common characteristics (for statement is requested within 60 days of the example, race, national origin, or sex) so long as the creditor's notification. The disclosure shall inprogram was not established and is not administered clude the name, address, and telephone number of with the purpose of evading the requirements of the the person or office from which the statement of act or this regulation. reasons can be obtained. If the creditor chooses to (c) Special rule concerning requests and use of infor- provide the reasons orally, the creditor shall also mation. If participants in a special purpose credit disclose the applicant's right to have them conprogram described in paragraph (a) of this section are firmed in writing within 30 days of receiving a required to possess one or more common characteris- written request for confirmation from the applitics (for example, race, national origin, or sex) and if cant. the program otherwise satisfies the requirements of (b) Form of ECOA notice and statement of specific paragraph (a), a creditor may request and consider reasons. information regarding the common characteristic(s) in (1) ECOA notice. To satisfy the disclosure requiredetermining the applicant's eligibility for the program. ments of paragraph (a)(2) of this section regarding (d) Special rule in the case of financial need. If section 701(a) of the act, the creditor shall provide a financial need is one of the criteria under a special notice that is substantially similar to the following: purpose program described in paragraph (a) of this The federal Equal Credit Opportunity Act prohibits section, the creditor may request and consider, in creditors from discriminating against credit applicants Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 39 on the basis of race, color, religion, national origin, if the creditor approves the application and the applisex, marital status, age (provided the applicant has the cant has not inquired within 30 days after applying, the capacity to enter into a binding contract); because all creditor may treat the application as withdrawn and or part of the applicant's income derives from any need not comply with paragraph (a)(1) of this section. public assistance program; or because the applicant (f) Multiple applicants. When an application involves has in good faith exercised any right under the Con- more than one applicant, notification need only be sumer Credit Protection Act. The federal agency that given to one of them, but must be given to the primary administers compliance with this law concerning this applicant where one is readily apparent. creditor is (name and address as specified by the (g) Applications submitted through a third party. appropriate agency listed in Appendix A of this regula- When an application is made on behalf of an applicant tion). to more than one creditor and the applicant expressly (2) Statement of specific reasons. The statement of accepts or uses credit offered by one of the creditors, reasons for adverse action required by paragraph notification of action taken by any of the other credi- (a)(2)(i) of this section must be specific and indicate tors is not required. If no credit is offered or if the the principal reason(s) for the adverse action. State- applicant does not expressly accept or use any credit ments that the adverse action was based on the offered, each creditor taking adverse action must creditor's internal standards or policies or that the comply with this section, directly or through a third applicant failed to achieve the qualifying score on party. A notice given by a third party shall disclose the the creditor's credit scoring system are insufficient. identity of each creditor on whose behalf the notice is (c) Incomplete applications. given. (1) Notice alternatives. Within 30 days after receiving an application that is incomplete regarding matters that an applicant can complete, the creditor Section 202.10—Furnishing of Credit shall notify the applicant either: Information (i) Of action taken, in accordance with paragraph (a) of this section; or (a) Designation of accounts. A creditor that furnishes (ii) Of the incompleteness, in accordance with credit information shall designate: paragraph (c)(2) of this section. (1) Any new account to reflect the participation of (2) Notice of incompleteness. If additional informa- both spouses if the applicant's spouse is permitted tion is needed from an applicant, the creditor shall to use or is contractually liable on the account (other send a written notice to the applicant specifying the than as a guarantor, surety, endorser, or similar information needed, designating a reasonable period party); and of time for the applicant to provide the information, (2) Any existing account to reflect such participaand informing the applicant that failure to provide tion, within 90 days after receiving a written request the information requested will result in no further to do so from one of the spouses. consideration being given to the application. The (b) Routine reports to consumer reporting agency. If a creditor shall have no further obligation under this creditor furnishes credit information to a consumer section if the applicant fails to respond within the reporting agency concerning an account designated to designated time period. If the applicant supplies the reflect the participation of both spouses, the creditor requested information within the designated time shall furnish the information in a manner that will period, the creditor shall take action on the applica- enable the agency to provide access to the information tion and notify the applicant in accordance with in the name of each spouse. paragraph (a) of this section. (c) Reporting in response to inquiry. If a creditor (3) Oral request for information. At its option, a furnishes credit information in response to an inquiry creditor may inform the applicant orally of the need concerning an account designated to reflect the particifor additional information; but if the application pation of both spouses, the creditor shall furnish the remains incomplete the creditor shall send a notice information in the name of the spouse about whom the in accordance with paragraph (c)(1) of this section. information is requested. (d) Oral notifications by small-volume creditors. The requirements of this section (including statements of specific reasons) are satisfied by oral notifications in the case of any creditor that did not receive more than Section 202.11—Relation to State Law 150 applications during the preceding calendar year. (e) Withdrawal of approved application. When an (a) Inconsistent state laws. Except as otherwise proapplicant submits an application and the parties con- vided in this section, this regulation alters, affects, or template that the applicant will inquire about its status, preempts only those state laws that are inconsistent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Federal Reserve Bulletin • January 1986 with the act and this regulation and then only to the (2) Liability and enforcement. extent of the inconsistency. A state law is not inconsis- (i) No exemption will extend to the civil liability tent if it is more protective of an applicant. provisions of section 706 or the administrative (b) Preempted provisions of state law. enforcement provisions of section 704 of the act. (1) A state law is deemed to be inconsistent with the (ii) After an exemption has been granted, the requirements of the act and this regulation and less requirements of the applicable state law (except protective of an applicant within the meaning of for additional requirements not imposed by federsection 705(f) of the act to the extent that the law: al law) will constitute the requirements of the act (i) Requires or permits a practice or act prohibited and this regulation. by the act or this regulation; (ii) Prohibits the individual extension of consumer Section 202.12—Record Retention credit to both parties to a marriage if each spouse individually and voluntarily applies for such cred- (a) Retention of prohibited information. A creditor it; may retain in its files information that is prohibited by (iii) Prohibits inquiries or collection of data re- the act or this regulation in evaluating applications, quired to comply with the act or this regulation; without violating the act or this regulation, if the (iv) Prohibits asking or considering age in an information was obtained: empirically derived, demonstrably and statistical- (1) From any source prior to March 23, 1977; ly sound, credit scoring system to determine a (2) From consumer reporting agencies, an applicant, pertinent element of creditworthiness, or to favor or others without the specific request of the credian elderly applicant; or tor; or (v) Prohibits inquiries necessary to establish or (3) As required to monitor compliance with the act administer a special purpose credit program as and this regulation or other federal or state statutes defined by section 202.8. or regulations. (2) A creditor, state, or other interested party may (b) Preservation of records. request the Board to determine whether a state law (1) Applications. For 25 months after the date that a is inconsistent with the requirements of the act and creditor notifies an applicant of action taken on an this regulation. application or of incompleteness, the creditor shall (c) Laws on finance charges, loan ceilings. If married retain in original form or a copy thereof: applicants voluntarily apply for and obtain individual (i) Any application that it receives, any informaaccounts with the same creditor, the accounts shall not tion required to be obtained concerning characterbe aggregated or otherwise combined for purposes of istics of the applicant to monitor compliance with determining permissible finance charges or loan ceil- the act and this regulation or other similar law, ings under any federal or state law. Permissible loan and any other written or recorded information ceiling laws shall be construed to permit each spouse used in evaluating the application and not reto become individually liable up to the amount of the turned to the applicant at the applicant's request; loan ceilings, less the amount for which the applicant (ii) A copy of the following documents if furnished is jointly liable. to the applicant in written form (or, if furnished (d) State and federal laws not affected. This section orally, any notation or memorandum made by the does not alter or annul any provision of state property creditor): laws, laws relating to the disposition of decedents' (A) The notification of action taken; and estates, or federal or state banking regulations directed (B) The statement of specific reasons for adonly toward insuring the solvency of financial institu- verse action; and tions. (iii) Any written statement submitted by the appli- (e) Exemption for state-regulated transactions. cant alleging a violation of the act or this regula- (1) Applications. A state may apply to the Board for tion. an exemption from the requirements of the act and (2) Existing accounts. For 25 months after the date this regulation for any class of credit transactions that a creditor notifies an applicant of adverse action within the state. The Board will grant such an regarding an existing account, the creditor shall exemption if the Board determines that: retain as to that account, in original form or a copy (i) The class of credit transactions is subject to thereof: state law requirements substantially similar to the (i) Any written or recorded information concernact and this regulation or that applicants are ing the adverse action; and afforded greater protection under state law; and (ii) Any written statement submitted by the appli- (ii) There is adequate provision for state enforce- cant alleging a violation of the act or this regulament. tion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 41 (3) Other applications. For 25 months after the date applicant(s) on the basis of visual observation or that a creditor receives an application for which the surname. creditor is not required to comply with the notifica- (c) Disclosure to applicant(s). The creditor shall intion requirements of section 202.9, the creditor shall form the applicant(s) that the information regarding retain all written or recorded information in its race or national origin, sex, marital status, and age is possession concerning the applicant, including any being requested by the federal government for the notation of action taken. purpose of monitoring compliance with federal stat- (4) Enforcement proceedings and investigations. A utes that prohibit creditors from discriminating against creditor shall retain the information specified in this applicants on those bases. The creditor shall also section beyond 25 months if it has actual notice that inform the applicant(s) that if the applicant(s) chooses it is under investigation or is subject to an enforce- not to provide the information, the creditor is required ment proceeding for an alleged violation of the act or to note the race or national origin and sex on the basis this regulation by the Attorney General of the Unit- of visual observation or surname. ed States or by an enforcement agency charged with (d) Substitute monitoring program. A monitoring promonitoring that creditor's compliance with the act gram required by an agency charged with administraand this regulation, or if it has been served with tive enforcement under section 704 of the act may be notice of an action filed pursuant to section 706 of substituted for the requirements contained in parathe act and section 202.14 of this regulation. The graphs (a), (b), and (c). creditor shall retain the information until final disposition of the matter, unless an earlier time is allowed Section 202.14—Enforcement, Penalties and by order of the agency or court. Liabilities (a) Administrative enforcement. Section 202.13—Information for Monitoring (1) As set forth more fully in section 704 of the act, Purposes administrative enforcement of the act and this regulation regarding certain creditors is assigned to the (a) Information to be requested. A creditor that re- Comptroller of the Currency, Board of Governors of ceives an application for credit primarily for the pur- the Federal Reserve System, Board of Directors of chase or refinancing of a dwelling occupied or to be the Federal Deposit Insurance Corporation, Federal occupied by the applicant as a principal residence, Home Loan Bank Board (acting directly or through where the extension of credit will be secured by the the Federal Savings and Loan Insurance Corporadwelling, shall request as part of the application the tion), National Credit Union Administration, Interfollowing information regarding the applicant(s): state Commerce Commission, Secretary of Agricul- (1) Race or national origin, using the categories ture, Farm Credit Administration, Securities and American Indian or Alaskan Native; Asian or Pacif- Exchange Commission, Small Business Administraic Islander; Black; White; Hispanic; Other (Speci- tion, and Secretary of Transportation. fy); (2) Except to the extent that administrative enforce- (2) Sex; ment is specifically assigned to other authorities, (3) Marital status, using the categories married, compliance with the requirements imposed under unmarried, and separated; and the act and this regulation is enforced by the Federal (4) Age. Trade Commission. "Dwelling" means a residential structure that con- (b) Penalties and liabilities. tains one to four units, whether or not that structure is (1) Sections 706(a) and (b) and 702(g) of the act attached to real property. The term includes, but is not provide that any creditor that fails to comply with a limited to, an individual condominium or cooperative requirement imposed by the act or this regulation is unit, and a mobile or other manufactured home. subject to civil liability for actual and punitive (b) Obtaining of information. Questions regarding damages in individual or class actions. Pursuant tc race or national origin, sex, marital status, and age sections 704(b), (c), and (d) and 702(g) of the act, may be listed, at the creditor's option, on the applica- violations of the act or regulation also constitute tion form or on a separate form that refers to the violations of other federal laws. Liability for puniapplication. The applicant(s) shall be asked but not tive damages is restricted to nongovernmental entirequired to supply the requested information. If the ties and is limited to $10,000 in individual actions applicant(s) chooses not to provide the information or and the lesser of $500,000 or 1 percent of the any part of it, that fact shall be noted on the form. The creditor's net worth in class actions. Section 706(c) creditor shall then also note on the form, to the extent provides for equitable and declaratory relief and possible, the race or national origin and sex of the section 706(d) authorizes the awarding of costs and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 1986 reasonable attorney's fees to an aggrieved applicant of the Bank Holding Company Act of 1956, as amendin a successful action. ed ("Act"), has applied for the Board's approval (2) As provided in section 706(f), a civil action under under section 3 of the Act (12 U.S.C. §1842) indirectly the act or this regulation may be brought in the to acquire all of the voting shares of Maine National appropriate United States district court without Corporation, Portland, Maine ("Maine National"), regard to the amount in controversy or in any other and thereby to acquire its subsidiary bank, Maine court of competent jurisdiction within two years National Bank, Portland, Maine.1 after the date of the occurrence of the violation, or Notice of the applications, affording an opportunity within one year after the commencement of an for interested persons to submit comments, has been administrative enforcement proceeding or of a civil given in accordance with section 3(b) of the Act. The action brought by the Attorney General of the time for filing comments has expired, and the Board United States within two years after the alleged has considered the applications and all comments violation. received in light of the factors set forth in section 3(c) (3) Sections 706(g) and (h) provide that, if an agency of the Act (12 U.S.C. § 1842(c)). responsible for administrative enforcement is unable Applicant, with nine banking subsidiaries located in to obtain compliance with the act or this regulation, Massachusetts and Connecticut, is the second largest it may refer the matter to the Attorney General of banking organization in New England with consolidatthe United States. On referral, or whenever the ed assets of $14.2 billion and total domestic deposits of Attorney General has reason to believe that one or $9.1 billion.2 Applicant is the second largest commermore creditors are engaged in a pattern or practice cial banking organization in Massachusetts, controlin violation of the act or this regulation, the Attor- ling 13.6 percent of the total deposits in commercial ney General may bring a civil action. banks in Massachusetts, and the largest commercial (c) Failure of compliance. A creditor's failure to banking organization in Connecticut, controlling 26.5 comply with sections 202.6(b)(6), 202.9, 202.10, 202.12 percent of the total deposits in commercial banks in or 202.13 is not a violation if it results from an Connecticut. Upon acquisition of Maine National, inadvertent error. On discovering an error under sec- with consolidated assets of $664.4 million and total tions 202.9 and 202.10, the creditor shall correct it as deposits of $567.0 million, Applicant would control the soon as possible. If a creditor inadvertently obtains the fourth largest commercial banking organization in monitoring information regarding the race or national Maine and 14.0 percent of the total deposits in comorigin and sex of the applicant in a dwelling-related mercial banks in the state. In addition, Applicant transaction not covered by section 202.13, the creditor would remain the second largest commercial banking may act on and retain the application without violating organization in New England. the regulation. Section 3(d) of the Act (12 U.S.C. § 1842(d)), the Douglas Amendment, prohibits the Board from ap- NOTE: Appendices A, B, C, and D and Supplement I proving an application by a bank holding company to were part of the original document but are not reprint- acquire control of any bank located outside of the bank ed here. holding company's home state,3 unless such acquisition is "specifically authorized by the statute laws of ORDERS ISSUED UNDER BANK HOLDING the state in which such bank is located, by language to COMPANY ACT, BANK MERGER ACT, BANK that effect and not merely by implication." The statute SERVICE CORPORATION ACT, AND FEDERAL laws of Maine permit an out-of-state bank holding RESERVE ACT company to acquire a bank in Maine without prior Bank of New England Corporation Boston, Massachusetts 1. Applicant would effectuate its acquisition of Maine National by merging Maine National into a wholly owned subsidiary of Applicant, BNE Holding Company, Boston, Massachusetts ("BNE"). Accord- BNE Holding Company ingly, BNE Holding Company has concurrently applied for the Boston, Massachusetts Board's approval under section 3(a)(1) of the Act to become a bank holding company upon consummation of this proposal. The Board's approval of Applicant's acquisition of Maine National will also Order Approving Formation of a Bank Holding constitute approval of BNE Holding Company's application to be- Company and Acquisition of a Bank Holding come a bank holding company. 2. Banking data are as of June 30, 1985. Company 3. A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the Bank of New England Corporation, Boston, Massacompany became a bank holding company, whichever is later. Applichusetts, a bank holding company within the meaning cant's home state is Massachusetts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 43 consideration of the nature of the banking laws of the control of record keeping and filing CTRs; established acquiring company's state.4 Applicant, an out-of-state a computer program to monitor daily cash movement bank holding company within the meaning of the throughout Applicant's organization; designated a cur- Maine statute, is eligible to acquire a bank holding rency transaction specialist to monitor all aspects of company in Maine. Based on the foregoing, the Board CFTRA reporting; designated a specially trained teller has determined that the proposed acquisition is ex- at each branch to handle large currency transactions; pressly authorized by the statute laws of Maine and is instituted intensive internal training for bank personnot barred by the Douglas Amendment.5 nel regarding compliance with the CFTRA, including The Board has considered the effects of the proposal the requirement that multiple transactions from the upon competition in the relevant banking markets in same customer be aggregated and reported; improved which Applicant and Maine National compete. Since internal audit functions and strengthened record keep- Applicant's banking subsidiaries do not operate in ing; and imposed a policy that all employees and their Maine, and Maine National's banking subsidiary does immediate families are prohibited from accepting gifts not operate in Massachusetts or Connecticut, the from any bank customer. The Board has also consultproposed transaction would not eliminate any signifi- ed with appropriate enforcement agencies with respect cant existing competition in any relevant market. to this matter, and has considered Applicant's past The Board has also examined the effect of the record of compliance with the law. proposal on probable future competition in the rele- For the foregoing reasons and based upon a review vant geographic markets and has examined the pro- of all of the facts of record, the Board concludes that posal in light of the Board's probable future competi- the managerial resources of Applicant and Maine tion guidelines. After consideration of these factors in National are consistent with approval. The Board also light of the specific facts of this case, the Board has finds that the financial resources and future prospects concluded that consummation of this proposal would of Applicant and Maine National are consistent with not have any significant adverse effects on probable approval of the applications. Considerations relating future competition in any relevant market. In this to convenience and needs of the communities to be regard, the Board notes that there are numerous other served also are consistent with approval. potential entrants into each of the markets served by Based on the foregoing and other facts of record, the Applicant and Maine National. Board has determined that the applications should be In its evaluation of Applicant's managerial re- and hereby are approved. The transaction shall not be sources, the Board has considered certain violations consummated before the thirtieth calendar day followby Applicant of the Currency and Foreign Transac- ing the effective date of this Order or later than three tions Reporting Act ("CFTRA") and the regulations months after the effective date of this Order, unless thereunder,6 and the indictment of one of Applicant's such period is extended by the Board or by the Federal subsidiary banks in connection with such violations. Reserve Bank of Boston, acting pursuant to delegated In this regard, the Board notes that Applicant brought authority. these matters to the attention of the appropriate super- By order of the Board of Governors, effective visory authorities after the violations were discovered November 18, 1985. through an internal audit and has cooperated fully with law enforcement agencies. Applicant and its subsidiar- Voting for this action: Chairman Volcker and Governors ies have also undertaken a comprehensive remedial Martin, Partee, Rice, and Seger. Absent and not voting: program to correct these violations and to prevent Governor Wallich. violations from occurring in the future. Applicant has advised the Board that it has filed corrective currency JAMES MCAFEE transaction reports ("CTRs"); appointed a senior offi- [SEAL] Associate Secretary of the Board cer responsible for ensuring compliance with CFTRA reporting requirements, including reporting for transactions aggregating over $10,000 on a daily basis; Brownsville Bancshares Corporation established a Currency Control Unit to centralize the Brownsville, Tennessee 4. Me. Rev. Stat. Ann. tit. 9-B, § 1013 sub. 2 (As amended, Order Approving Merger with a Bank Holding February 7, 1984). Company and Acquisition of a Bank 5. The Maine interstate banking statute requires the approval of the Maine Superintendent of Banking before an out-of-state bank holding company may acquire a Maine bank. On September 18, 1985, the Brownsville Bancshares Corporation, Brownsville, Maine Superintendent of Banking approved Applicant's acquisition of Tennessee, a bank holding company within the mean- Maine National. 6. 31 U.S.C. § 5311, et seq.; 31 C.F.R. § 103. ing of the Bank Holding Company Act ("Act"), has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 1986 applied under section 3(a)(5) of the Act, 12 U.S.C. Brighton Bank is the fourth largest of five commer- § 1842(a)(5), to merge with Farmers Union Banc- cial banking organizations in the Covington banking shares, Inc. ("Farmers"), Ripley, Tennessee, a bank market with total deposits of $9.8 million, which holding company by virtue of its control of Farmers represents 7.5 percent of the total deposits in commer- Union Bank ("Farmers Bank"), Ripley, Tennessee. cial banks in the market. Union Bank is the third Applicant also has applied under section 3(a)(3) of the largest commercial banking organization in the Cov- Act, 12 U.S.C. § 1842(a)(3), to acquire at least 80 ington banking market, and controls 21.7 percent of percent of Union Savings Bank ("Union Bank"), the deposits in commercial banks in the market. Upon Covington, Tennessee. consummation of these proposals, the banks con- Notice of the applications, affording interested per- trolled by Applicant's principal would become the sons an opportunity to submit comments, has been second largest banking organization in the Covington given in accordance with section 3(b) of the Act. The banking market with total deposits of $38.3 million, time for filing comments has expired and the Board which represents 29.2 percent of the total deposits in has considered the applications and all comments commercial banks in the market. The Covington bankreceived in light of the factors set forth in section 3(c) ing market is highly concentrated. The percentage of of the Act, 12 U.S.C. § 1842(c). deposits held by the three largest commercial banking Applicant controls one subsidiary bank, Browns- organizations in the market would increase from 90.0 ville Bank, Brownsville, Tennessee. Brownsville to 97.5 upon consummation of these proposals. The Bank, Farmers Bank and Union Bank are the 82nd, Herfindahl-Hirschman Index ("HHI") is 2968 and 125th and 161st largest, respectively, of 394 commer- would increase by 324 points to 3292.5 cial banks in Tennessee,1 and control total deposits of One savings and loan association operates in the $64.5, $41.4, and $28.5 million, respectively. The Covington banking market and controls deposits of deposits controlled by each of these institutions repre- $29.6 million. This thrift institution offers time and sent less than one percent of the total deposits in savings accounts and NOW accounts and makes concommercial banks in the state. Upon consummation of sumer loans. It does not, however, employ a commerthe proposals, Applicant would become the 21st larg- cial lending officer, and has not made any short-term est commercial banking organization in Tennessee. It business loans or many commercial real estate loans. would control total deposits of $134.4 million, and If 50 percent of the deposits controlled by this thrift would continue to hold less than one percent of the institution were considered, the market HHI would be deposits in commercial banks in Tennessee. Accord- 2499 and would increase by 263 points to 2762 upon ingly, consummation of these proposals would not consummation of these proposals. The percentage of have any significant adverse effects on the concentra- deposits held by the three largest firms in the market tion of banking resources in Tennessee. would increase from 80.9 to 87.6. Brownsville Bank, Farmers Bank and Union Bank Applicant's principal and the members of his family do not compete in the same banking markets. Browns- have entered into an agreement to sell their interests in ville Bank operates in the Haywood County banking Brighton. Applicant has committed that the present market;2 Farmers Bank operates in the Lauderdale proposals will not be consummated until a change in County banking market;3 and Union Bank operates in control involving Brighton has been completed. Based the Covington banking market.4 Although approval of upon the facts of record, including this commitment, these proposals would not eliminate any existing com- the Board concludes that consummation of these propetition in the Haywood County or Lauderdale Coun- posals would have no significant adverse effects upon ty banking market, one of Applicant's principals also existing competition in the Covington market or any owns 66.1 percent of Brighton Bancshares Corpora- other relevant market. tion ("Brighton"), Brighton, Tennessee, a bank hold- The Board has considered the effects of these proing company with a subsidiary bank, Brighton Bank, posals on probable future competition in the Covingthat operates in the Covington banking market and ton, Haywood County and Lauderdale County bankcompetes directly with Union Bank. ing markets in light of its proposed guidelines for assessing the competitive effects of market extension 1. Unless otherwise indicated, all deposit and market data are as of December 30, 1984. 2. The Haywood County banking market consists of Haywood 5. Under the revised Department of Justice Merger Guidelines, County, Tennessee. 49 Federal Register 26,823 (1984), a market in which the post-merger 3. The Lauderdale County banking market consists of Lauderdale HHI is above 1800 is considered highly concentrated. Where the County, Tennessee. merger increases the HHI by more than 100 points and the post- 4. The Covington banking market is approximated by that portion merger HHI substantially exceeds 1800, only in extraordinary cases of Tipton County, Tennessee, not included in the Memphis banking will mitigating factors establish that the merger is not likely substanmarket. tially to lessen competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 45 mergers and acquisitions.6 In evaluating the effects of Applicant will incur additional debt as a result of a proposed merger upon probable future competition, these proposals. It appears from the facts of record the Board considers market concentration, the number that Applicant is capable of improving its capital of probable future entrants into the market, the size of ratios, servicing its debt and serving as a source of the bank to be acquired and the attractiveness of the strength to its subsidiaries. market for entry on a de novo or foothold basis absent Based upon all of the facts of record, the Board has approval of the acquisition. determined that banking factors are consistent with The Board has considered these factors in the approval of these applications. Considerations relating context of the specific facts of this case. Based on the to the convenience and needs of the communities to be size of each of these markets and the number of served also are consistent with approval. potential entrants into each of the markets, the pro- Based upon the foregoing and other facts of record, posed transactions do not require extensive analysis the Board has determined that these proposals are in under the Board's proposed guidelines. The Board the public interest and that the applications should be concludes that consummation of these proposals approved. Accordingly, the applications are approved would not have any significant adverse effects on for the reasons summarized above. The transactions probable future competition in any relevant market. shall not be consummated before the thirtieth calendar The Board also has analyzed the financial and day following the effective date of this Order, or later managerial resources and future prospects of Appli- than three months after the effective date of this cant, Farmers, their respective subsidiary banks, and Order, unless such period is extended for good cause Union Bank. The Board has indicated and continues to by the Board or by the Federal Reserve Bank of St. believe that capital adequacy is an especially impor- Louis, pursuant to delegated authority. tant factor in the analysis of bank holding company By order of the Board of Governors, effective proposals, particularly in transactions where a signifi- November 12, 1985. cant acquisition is involved.7 Upon consummation of these proposals, Applicant's consolidated total and Voting for this action: Chairman Volcker and Governors tangible primary capital ratios would be below the Martin, Partee, and Rice. Absent and not voting: Governors minimum levels under the Board's capital adequacy Wallich and Seger. guidelines.8 In its assessment of Applicant's capital adequacy, JAMES MCAFEE the Board has considered several factors that indicate [SEAL] Associate Secretary of the Board an acceptable capital position for Applicant, including both the fact that Brownsville Bank owns certain marketable common stock and carries that stock on its Croesus Partners I, Inc. books at substantially below current market value and Chicago, Illinois the fact that two of the banks in the proposed transactions are carried below book value. Consideration of Order Denying Formation of a Bank Holding these factors indicates that the capital position of the Company organization is stronger than that suggested by the ratios. In addition, the Board has approved applica- Croesus Partners I, Inc., Chicago, Illinois, has applied tions where, as here, the Board is able to determine for the Board's approval pursuant to section 3(a)(1) of through projected earnings that an applicant would the Bank Holding Company Act (12 U.S.C. achieve an acceptable tangible primary capital ratio § 1842(a)(1)) ("Act") to become a bank holding comwithin a short period of time.9 pany by acquiring all of the voting shares of LaGrange Bank and Trust Company, LaGrange, Illinois ("La- Grange Bank"), and 98 percent of the voting shares of 6. "Policy Statement of the Board of Governors of the Federal First Burlington Bank of Willowbrook, Willowbrook, Reserve System for Assessing Competitive Factors Under the Bank Illinois ("Burlington Bank") (collectively, "Banks"). Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (1982). While the proposed policy statement has not Notice of the application, affording interested perbeen approved by the Board, the Board is using the policy guidelines sons an opportunity to submit comments, has been as part of its analysis of the effect of a proposal on probable future given in accordance with section 3(b) of the Act. The competition. 7. See, Citizens Financial Corporation, 71 FEDERAL RESERVE time for filing comments has expired, and the Board BULLETIN 584 (1985). has considered the application and all comments re- 8. Under the Board's Capital Adequacy Guidelines, the minimum ceived in light of the factors set forth in section 3(c) of ratio of primary capital to total assets is 5.5 percent and the minimum ratio of total capital to total assets is 6 percent. Capital Adequacy the Act. Guidelines, 50 Federal Register 16,057 (1985). Applicant, a non-operating corporation with no sub- 9. Security Richland Bancorporation, 70 FEDERAL RESERVE BULsidiaries, was organized under the laws of Delaware LETIN 655 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 1986 for the purpose of becoming a bank holding company First Burlington to 5.6 percent, and its total capital to by acquiring LaGrange Bank and Burlington Bank, total assets ratio would be 6.5 percent, levels considwhich hold aggregate deposits of $172.3 million and ered marginal under the Board's Capital Adequacy $30.6 million, respectively.1 Upon acquisition of Guidelines.5 Applicant's capital ratio on a tangible Banks, Applicant would control the 54th largest com- basis would be 5.4 percent, which is below the minimercial banking organization in Illinois and approxi- mum level specified in the Capital Adequacy Guidemately 0.2 percent of the total deposits in commercial lines for primary capital. The Board views the highly banks in the state. Consummation of this proposal leveraged and marginally capitalized position of Appliwould not have a significant effect on the concentra- cant, particularly in light of the sharp decline in capital tion of banking resources in Illinois. position of the consolidated organization, as signifi- Both LaGrange Bank and Burlington Bank compete cant factors that reflect adversely on this proposal. in the Chicago banking market.2 LaGrange Bank is the The Board's concern about Applicant's marginal 54th largest and Burlington Bank is the 280th largest of capital structure and high debt level, and the resulting 389 commercial banking organizations in the market. diminution in its ability to serve as a source of strength Upon consummation of this proposal, Applicant to its subsidiary banks, is exacerbated by considerwould control 0.3 percent of the total deposits in ations relating to the nature and makeup of Applicant's commercial banks in the relevant market. Consumma- capital structure. In order to finance its formation, tion of this transaction would not result in any adverse Applicant proposes to sell $6.0 million of its voting effects upon competition or increase the concentration common stock and $5.8 million of its nonvoting preof banking resources in any relevant market. ferred stock.6 The preferred stock would represent 49 The Board has indicated on previous occasions that percent of Applicant's total equity. As noted, Applia bank holding company should serve as a source of cant would also incur debt of $7.8 million. financial strength to its subsidiary banks, and that the The Board is of the view that a banking organiza- Board would closely examine the condition of an tion's primary capital should be comprised predomiapplicant in each case with this consideration in mind. nantly of common equity, rather than preferred stock The Board has repeatedly expressed its view that it is or other forms of capital, and the minimum levels of essential for bank holding companies to have sufficient capital specified in the Board's Capital Adequacy primary capital to carry out their responsibilities and Guidelines are predicated on the assumption that the has stated that significant decreases in an institution's predominant portion of an institution's primary capital capital position would be grounds for denial of a will be made up of common equity. proposal.3 In the International Lending Supervision The equity of banking organizations historically has Act of 1983, Congress recognized the importance of been predominantly in the form of common equity. capital adequacy to the banking system and authorized While the Board recognizes that preferred stock prothe federal banking agencies to establish minimum vides banking organizations with the flexibility of an levels of capital for banking institutions and to take additional capital instrument to attain minimum and other measures to ensure that banking organizations adequate levels of primary capital, the Board believes achieve and maintain adequate capital.4 that the amount of preferred stock as a percentage of In order to effect the proposal, Applicant proposes total primary capital must be kept within reasonable to incur a substantial amount of debt, resulting in a limits. The Board has recently requested public comdebt to equity ratio level significantly above that which ment on a proposal to limit the amount of mandatory is normally acceptable for bank holding company convertible instruments, perpetual preferred stock, formations of this size. LaGrange Bank and Burlington and perpetual debt that could qualify as primary Bank are each now well capitalized, as is their current capital for bank holding companies and state member parent bank holding company, First Burlington Corpo- banks to 25 percent of total primary capital. 50 Federal ration, with primary capital ratios of at least 6.4 Register 47,754 (1985). percent. Upon consummation of this proposal, howev- In the Board's view, reliance on preferred stock to er, the stated primary capital ratio of the resulting meet the minimum primary capital guidelines to the organization would decline substantially from that of extent presented in this proposal diminishes a banking 5. Capital Adequacy Guidelines, 50 Federal Register 16,057(1985), 1. Unless otherwise indicated, banking data are as of December 31, 71 FEDERAL RESERVE BULLETIN 445 (1985). 1984. 6. Applicant's preferred stock would be purchased by three bank 2. The Chicago banking market is approximated by Cook, Lake and holding companies, American National Corporation ("ANC"), Harris DuPage Counties, all in Illinois. Bancorp, and Unibancorp, all of which are headquartered in Chicago, 3. Security Banks of Montana, 71 FEDERAL RESERVE BULLETIN Illinois. ANC, Harris, and Unibancorp would own nonvoting, non- 246 (1985). convertible preferred stock equal, respectively, to 17.9 percent, 17.9 4. 12 U.S.C. § 3907(a) (West Supp. 1984). percent, and 13.2 percent of Applicant's total equity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 organization's financial flexibility and its ability to Dissenting Statement of Governor Seger serve as a source of financial strength to deal with unanticipated financial problems. Undue reliance on I agree that it is essential for a bank holding company preferred stock in the makeup of an institution's to have sufficient primary capital to serve as a source capital base also impairs its ability to retain earnings to of financial strength to its subsidiary banks. However, provide for future growth. In this case in particular, I do not share the majority's concern about the extent Applicant's high level of preferred stock and high debt to which this Applicant relies on preferred stock to would limit, if not eliminate, Applicant's ability to meet its capital requirements. These are changing issue new capital as may be needed to provide for an times in the banking industry, and it is my view that unanticipated deterioration in its capital base or future the Board should permit bank holding companies a growth. greater degree of flexibility in issuing capital instru- While common shareholders benefit from the capital ments, including preferred stock, to meet their capital appreciation of a company, as well as from dividends, adequacy requirements. preferred shareholders derive benefits solely from a It is clear that the preferred stock in this case meets company's dividend stream. Because of this and con- the definition of primary capital as well as equity siderations relating to its reputation and financial capital. Moreover, in this case, I believe that the integrity, it is more difficult for a banking organization preferred stock serves essentially the same functions to pass preferred stock dividends than common stock as the common stock. In the event of default both the dividends. The Board notes that if cash dividends on preferred and common equity represent ownership the preferred stock are passed, Applicant must issue interests and function as a cushion to absorb losses additional preferred stock in lieu of the cash dividend. and protect the liability holders. Further, in the event This, in effect, further diminishes Applicant's financial that cash dividends are not paid preferred stock diviflexibility by increasing the demands on its future dends would be paid instead of cumulating cash diviincome stream. dends. Accordingly, I do not share the majority's In sum, it is the Board's judgment that Applicant's concern with respect to the relationship between the excessive reliance on preferred stock to meet mini- amount of preferred and common stock. Therefore, in mum capital requirements, coupled with its marginal my view, Applicant's proposed capital structure is capital position and high leverage, indicate that Appli- sound, and since its primary capital clearly meets the cant would not be capable of maintaining an adequate minimum level specified in the Board's Capital Adelevel of capital as required by sound banking practice quacy Guidelines, I would approve the application. and the International Lending Supervision Act and would not have sufficient financial flexibility to serve November 27, 1985 as a source of financial strength to its subsidiary banks in the future. Accordingly, based on the record in this case, the Board concludes that considerations relating to Applicant's financial resources and future prospects Fifth Third Bancorp warrant denial of this application. Since Applicant Cincinnati, Ohio proposes no changes in Banks' services, convenience and needs factors lend no weight toward approval of American Bancorp, Inc. the application. Newport, Kentucky On the basis of all the facts of record, it is the Board's judgment that approval of the application Order Approving Merger of Bank Holding would not be in the public interest and that the Companies application should be denied. Accordingly, the application is denied for the reasons summarized above. Fifth Third Bancorp, Cincinnati, Ohio, a bank holding By order of the Board of Governors, effective company within the meaning of the Bank Holding November 27, 1985. Company Act (12 U.S.C. § 1841 et seq.) ("Act"), has applied for the Board's approval under section 3(a)(5) Voting for this action: Chairman Volcker and Governors of the Act (12 U.S.C. § 1842(a)(5)) to acquire Ameri- Partee and Rice. Voting against this action: Governor Seger. can Bancorp, Inc. ("American"), Newport, Ken- Abstaining from this action: Governor Martin. Absent and tucky, through a merger of American with and into not voting: Governor Wallich. Applicant. As a result of this acquisition, Applicant would acquire indirectly American's subsidiary bank, JAMES MCAFEE American National Bank ("Bank"), also of Newport, [SEAL] Associate Secretary of the Board Kentucky. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 1986 Notice of the application, affording an opportunity than those established under Ohio law.4 Until October for interested persons to submit comments and views, 1988, interstate acquisitions are authorized only from a has been given in accordance with section 3(b) of the limited number of states, including Kentucky. The Act. The time for filing comments and views has Ohio Superintendent of Banks and the Kentucky Comexpired, and the Board has considered the application missioner of Financial Institutions, in a joint "Deterand all comments received in light of the factors set mination of Reciprocity," have concluded that the forth in section 3(c) of the Act. interstate banking statutes of Ohio and Kentucky are Applicant is the eighth largest commercial banking reciprocal and authorize banking acquisitions between organization in Ohio. Its eight subsidiary banks con- the two states. trol deposits of approximately $1.7 billion, represent- Upon independent review, the Board concludes that ing 3.1 percent of the total deposits in commercial the two statutes are reciprocal and that Kentucky has banks in Ohio.1 Applicant also controls directly two by statute expressly authorized an Ohio bank holding nonbank subsidiaries engaged in personal property company, such as Applicant, to acquire a Kentucky leasing and the underwriting of credit life and credit bank or bank holding company, such as American. accident and health insurance directly related to exten- Accordingly, the Board concludes that approval of sions of credit by the bank holding company system. Applicant's proposal to acquire indirectly a bank in American is the forty-eighth largest commercial bank- Kentucky is not barred by the Douglas Amendment. ing organization in Kentucky. Its sole subsidiary, Fifth Third Bank, Applicant's principal bank subsid- Bank, controls deposits of approximately $87.4 mil- iary, and Bank compete directly in the Cincinnati, lion, representing less than 1 percent of the total Ohio banking market.5 Fifth Third Bank is the third deposits in commercial banks in Kentucky. largest banking organization in the Cincinnati market, Section 3(d) of the Act (12 U.S.C. § 1842(d)), the controlling 17.1 percent of total deposits in commer- Douglas Amendment, prohibits the Board from ap- cial banks in the market. Bank, with deposits of $87.4 proving an application by a bank holding company to million, is the fourteenth largest banking organization acquire control of any bank located outside of the in the Cincinnati market, controlling 1.3 percent of the holding company's home state,2 unless such acquisi- deposits in commercial banks in the market. Upon tion is "specifically authorized by the statute laws of acquisition of Bank, Applicant would remain the third the State in which such bank is located, by language to largest banking organization in the Cincinnati market, that effect and not merely by implication." and would control 18.4 percent of the deposits in Effective July 13, 1984, the statute laws of the commercial banks in the market. The Cincinnati bank- Commonwealth of Kentucky authorized any bank ing market is moderately concentrated with a Herfinholding company having its principal place of business dahl-Hirschman Index ("HHI") of 1272, which would in a state which is contiguous to Kentucky to acquire increase by only 43 points to 1315 upon consummation control of a Kentucky bank or bank holding company, of the transaction.6 if the state where that bank holding company is located Although the proposed acquisition would eliminate authorizes the acquisition of a bank or bank holding some existing competition between Applicant and company in that state by a Kentucky bank holding Bank, the Board notes that the Cincinnati market company under conditions "substantially no more would not become highly concentrated as a result of restrictive" than those imposed by the Kentucky this transaction. Moreover, over 40 other commercial statute.3 banking organizations would remain in the market as Effective October 17, 1985, the statute laws of Ohio alternative providers of banking services. In view of authorized a bank or bank holding company with its these facts, the Board has determined that consummaprincipal place of business in another state to charter tion of the proposed transaction is not likely to have a or otherwise acquire an Ohio bank or bank holding company, only if the Ohio Superintendent of Banks determines that the laws of such other state permit an Ohio bank or bank holding company to acquire a bank 4. Ohio Sub. H. Bill No. 102 (July 18, 1985) to be codified at Ohio or bank holding company in that state "on terms that Rev. Code Ann. §§ 1101.05, 1101.051 (Page 19 ). 5. The Cincinnati banking market is approximated by all of Hamilare, on the whole, substantially no more restrictive" ton (Cincinnati) and Clermont Counties, and portions of Warren and Butler Counties, in Ohio; Boone, Campbell, Kenton, Grant and Pendleton Counties in Kentucky; and Dearborn County, Indiana. Market data are as of June 30, 1984. 6. Under the revised Department of Justice Merger Guidelines (49 1. Statewide deposit data are as of March 31, 1985. Federal Register 26,823 (1984)), a market in which the post-merger 2. A bank holding company's home state is that state in which the HHI is between 1000 and 1800 is considered moderately concentrated, operations of the bank holding company's banking subsidiaries were and the Department is likely to challenge a merger that increases the principally conducted on July 1, 1966, or on the date on which the HHI by more than 100 points, unless other facts of record indicated company became a bank holding company, whichever is later. that the merger is not likely substantially to lessen competition. 3. Ky. Rev. Stat. Ann. § 287.900 (Bobbs-Merrill Supp. 1984). The Department has not indicated any objection to this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 significant adverse effect on existing competition in of the Bank Holding Company Act (12 U.S.C. § 1841 the Cincinnati banking market. et seq.) ("Act"), has applied for the Board's approval The Board has also examined the effect of the under section 3(a)(5) of the Act (12 U.S.C. proposal on probable future competition in the rele- § 1842(a)(5)) to merge with BANKNORTH GROUP, vant geographic markets and has examined the pro- INC., St. Albans, Vermont ("BANKNORTH"), and posal in light of the Board's probable future competi- thereby indirectly to acquire BANKNORTH's subsidtion guidelines.7 After consideration of these factors in iary bank, Franklin-Lamoille Bank, St. Albans, Verlight of the specific facts of this case, the Board has mont ("Bank"). concluded that consummation of this proposal would Notice of the application, affording opportunity for not have any significant adverse effects on probable interested persons to submit comments, has been future competition in any relevant market. In this given in accordance with section 3(b) of the Act. The regard, the Board notes that there are numerous other time for filing comments has expired, and the Board potential out-of-state entrants into the Ohio markets has considered the application and all comments reserved by Applicant. ceived in light of the factors set forth in section 3(c) of The financial and managerial resources and future the Act. prospects of Applicant, American, and their subsidiar- Applicant is the fifth largest banking organization in ies are considered satisfactory. Considerations relat- Vermont with one subsidiary bank that controls total ing to the convenience and needs of the communities deposits of $379.6 million, representing 10.1 percent of to be served are also consistent with approval. the total deposits in commercial banks in the state.1 Based on the foregoing and other facts of record, the BANKNORTH is the eighth largest banking organiza- Board has determined that consummation of the pro- tion in Vermont, with one banking subsidiary that posed acquisition would be in the public interest and controls total deposits of $159.7 million, representing that the application should be approved. Accordingly, 4.2 percent of the total deposits in commercial banks the application is approved for the reasons summa- in the state. Upon consummation of the proposed rized above. The transaction shall not be consummat- acquisition, Applicant's share of the total deposits in ed before the thirtieth calendar day following the commercial banks in the state would increase to 14.3 effective date of this Order or later than three months percent, and Applicant would become the second after the effective date of this Order, unless such largest of 22 commercial banking organizations in period is extended for good cause by the Board or by Vermont. the Federal Reserve Bank of Cleveland, acting pursu- The Board has carefully considered the effects of ant to delegated authority. this proposal on statewide banking structure and upon By order of the Board of Governors, effective competition in the relevant markets. The proposal November 25, 1985. involves a combination of sizeable commercial banking organizations that are among the leading banking Voting for this action: Vice Chairman Martin and Gover- organizations in the state. However, Vermont is nors Partee, Rice, and Seger. Absent and not voting: Chair- viewed as only moderately concentrated in terms of man Volcker and Governor Wallich. banking resources, with the four largest banking organizations controlling 52.3 percent of total statewide JAMES MCAFEE deposits in commercial banks. Upon consummation, [SEAL] Associate Secretary of the Board the state would remain moderately concentrated, with a four-firm concentration ratio of 56.1 percent. In First Vermont Financial Corporation addition, a number of other large bank holding compa- Brattleboro, Vermont nies, which are active competitors throughout the state, would remain upon consummation of this pro- Order Approving Merger of Bank Holding posal. On the basis of these considerations, the Board Companies concludes that the proposed merger would have no substantial adverse effects on the concentration of banking resources in Vermont. First Vermont Financial Corporation, Brattleboro, Vermont, a bank holding company within the meaning Applicant and BANKNORTH do not operate subsidiary banks in the same banking markets. Therefore, consummation of the proposal would not eliminate 7. See the "Proposed Policy Statement of the Board of Governors existing competition in any relevant geographic marof the Federal Reserve System for Assessing Competitive Factors ket. Under the Bank Merger Act and the Bank Holding Company Act." 47 Federal Register 9017 (March 3, 1982). Although the proposed Policy Statement has not been approved by the Board, the Board has applied the criteria therein in its analysis of the effects of a proposal on probable future competition. 1. Banking data are as of June 30, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 1986 The Board has considered the effect of the proposed First Wisconsin Corporation merger on probable future competition and has exam- Milwaukee, Wisconsin ined the proposal in light of its proposed guidelines for assessing the competitive effects of market extension F.W.S.F. Corporation mergers and acquisitions.2 The Board concludes that Milwaukee, Wisconsin consummation of this proposal would not have any significant adverse effect on probable future competi- Order Approving Formation of a Bank Holding tion in any relevant market. BANKNORTH currently Company and Acquisition of Banks operates in the Burlington, St. Albans, and Stowe- Morristown banking markets.3 There are numerous First Wisconsin Corporation ('Applicant"), Milwaupotential entrants into the St. Albans and Stowe- kee, Wisconsin, a bank holding company within the Morristown banking markets, and BANKNORTH is meaning of the Bank Holding Company Act ("Act"), not considered a market leader in the Burlington has applied for the Board's approval under section banking market. 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire The financial and managerial resources and future Security Financial Services, Inc. ("Company"), Sheprospects of Applicant, BANKNORTH, and their boygan, Wisconsin, and thereby indirectly acquire its subsidiaries are considered satisfactory and consistent six subsidiary banks: Security First National Bank of with approval. Considerations relating to the conve- Sheboygan, Sheboygan, Wisconsin; South West State nience and needs of the communities to be served also Bank, Sheboygan, Wisconsin; Farmers-Merchants are consistent with approval. Accordingly, it is the National Bank of Princeton, Princeton, Wisconsin; Board's judgment that the proposed transaction would Eldorado State Bank, Eldorado, Wisconsin; Security be in the public interest and that the application should Bank, Menasha, Wisconsin; and Manitowoc County be approved. Bank, Manitowoc, Wisconsin. This transaction would Based on the foregoing and other facts of record, the be effected by merging Company with and into application is approved. The transaction shall not be F.W.S.F. Corporation, Milwaukee, Wisconsin, a consummated before the thirtieth calendar day follow- wholly owned subsidiary of Applicant.1 ing the effective date of this Order, or later than three Notice of the applications, affording interested permonths after the effective date of this Order, unless sons an opportunity to submit comments, has been such period is extended for good cause by the Board or given in accordance with section 3(b) of the Act. The by the Federal Reserve Bank of Boston, acting pursu- time for filing comments has expired, and the Board ant to delegated authority. has considered the applications and all comments By order of the Board of Governors, effective received in light of the factors set forth in section 3(c) November 29, 1985. of the Act. Applicant is the largest banking organization in Voting for this action: Vice Chairman Martin and Gover- Wisconsin, with 19 bank subsidiaries, controlling denors Partee, Rice, and Seger. Absent and not voting: Chair- posits of $4.16 billion, representing 14.2 percent of the man Volcker and Governor Wallich. total deposits in commercial banks in the state.2 Company is the ninth largest commercial banking organiza- JAMES MCAFEE tion in the state, with six bank subsidiaries controlling [SEAL] Associate Secretary of the Board deposits of $402.7 million, representing 1.4 percent of the total deposits in commercial banks in the state. Upon consummation of this proposal, Applicant would control deposits of $4.56 billion, representing 15.6 percent of the total deposits in commercial banks 2. "Policy Statement of the Board of Governors of the Federal in the state. Consummation of these transactions Reserve System for Assessing Competitive Factors Under the Bank would not have a significant adverse effect on the Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (March 3, 1982). While the proposed policy statement concentration of banking resources in the state. has not been approved by the Board, the Board is using the policy guidelines as part of its analysis of the effect of a proposal on probable future competition. 3. The Burlington banking market is approximated by the Burlington Ranally Metro Area, and the towns of Belvidere, Bolton, Buel's Gore, Cambridge, Fletcher, Grand Isle, Huntington, Isle La Motte, Monkton, Starksboro, Underhill, Waterville and Westford, all in Vermont. The St. Albans banking market is approximated by Franklin County, Vermont, except the towns of Averys Gore, Berkshire, 1. F.W.S.F. has applied for the Board's approval pursuant to Fletcher, Montgomery and Richford. The Stowe-Morristown banking section 3(a)(1) of the Act (12 U.S.C. § 1842(a)(1)) to become a bank market is approximated by Lamoille County. Vermont, except the holding company by merging with Company. towns of Belvidere, Cambridge and Waterville. 2. All banking data are as of December 31, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 Applicant and Company compete in two banking Company is the second largest commercial banking markets, Fond du Lac and Manitowoc-Two Rivers.3 organization in the market with one bank subsidiary Applicant is the second largest commercial banking controlling deposits of $95.8 million, representing 18.3 organization in the Fond du Lac banking market, with percent of the total deposits in commercial banks in two banking subsidiaries operating in the market, the market. Consummation of this proposal would controlling deposits of $144 million, representing 25.8 result in Applicant becoming the largest banking orgapercent of the deposits in commercial banking organi- nization in the market with 28.7 percent of the total zations in the market. Company is the eleventh largest deposits in commercial banks in the market. The HHI commercial banking organization in the market, with would increase by 381 points to 2065 as a result of this one bank subsidiary, controlling $10 million in depos- acquisition, making this transaction one that would be its, representing 1.8 percent of the total deposits in subject to challenge under the Department of Justice commercial banks in the market. Upon consummation Merger Guidelines.5 of the proposed transactions, Applicant would remain Although consummation of the proposal would elimthe second largest banking organization in the Fond du inate existing competition between Applicant and Lac market and would control 27.6 percent of the Company in the Manitowoc-Two Rivers banking mardeposits in commercial banks in the market. ket, nine other commercial banking organizations The share of deposits held by the four largest would remain as competitors after consummation of banking organizations in the Fond du Lac banking the proposal. In addition, the Board has concluded market is 72.8 percent, and the market's Herfindahl- that the effect of this proposal on existing competition Hirschman Index ("HHI") is 1894. Upon consumma- in the Manitowoc-Two Rivers market is mitigated by tion of these transactions, the four-firm concentration the extent of competition offered by thrift institutions ratio would increase to 74.6 percent and the HHI in the market.6 Three thrift institutions control deposwould increase 93 points to 1987.4 While the proposed its of $133.2 million representing 20.3 percent of acquisition would eliminate existing competition in the deposits in the market.7 These institutions compete Fond du Lac market, several factors mitigate the with the commercial banks in the market for transaccompetitive effects of the proposal. The Board notes tion accounts, consumer loans and commercial loans. that eleven banking organizations would remain in the In view of these facts, the Board considers the presmarket upon consummation of the proposal, including ence of thrift institutions a significant factor in assessfour of the larger commercial banking organizations in ing the competitive effects of this proposal.8 Accordthe state. The Board has also considered Company's ingly, in view of the competition provided by thrift small absolute and relative size as a mitigating factor. institutions and the number of competitors remaining Based on these and other facts of record, the Board in the market, the Board concludes that consummation concludes that consummation of this proposal is not of the proposed acquisition is not likely to have a likely to have a significant adverse effect on existing significant adverse effect on competition in the Manicompetition in the Fond du Lac banking market. towoc-Two Rivers banking market. Accordingly, competitive considerations are consistent with approval. In the Manitowoc-Two Rivers banking market, Applicant is currently the fifth largest commercial bank- The financial and managerial resources of Appliing organization with one bank subsidiary controlling cant, Company and their respective subsidiary banks deposits of $54.3 million, representing 10.4 percent of are generally satisfactory and consistent with approvthe total deposits in commercial banks in the market. al. Considerations relating to the convenience and needs of the community to be served are also consistent with approval. 3. The Fond du Lac banking market is approximated by Fond du Lac County, Wisconsin, except for Ashford, Auburn, and Calumet townships. The Manitowoc-Two Rivers banking market is approximated by Manitowoc County, Wisconsin, except for Eaton and 5. id. Schleswig townships. 6. The Board has previously determined that thrift institutions have 4. Under the revised Department of Justice Merger Guidelines (49 become, or at least have the potential to become, major competitors of Federal Register 26,823 (June 29, 1984)), any market in which the banks. NCNB Corporation, 70 FEDERAL RESERVE BULLETIN 225 post-merger HHI is above 1800 is considered highly concentrated. In (1984); Sun Banks, Inc., 69 FEDERAL RESERVE BULLETIN 934 (1983); such markets, the Department is likely to challenge any merger that Merchants Bancorp, Inc., 69 FEDERAL RESERVE BULLETIN 865 produces an increase in the HHI of more than 50 points unless other (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE factors indicate that the merger will not substantially lessen competi- BULLETIN 298 (1983). tion. The Department has informed the Board that a bank merger or 7. As of December 31, 1984. acquisition generally will not be challenged (in the absence of other 8. If 50 percent of the deposits held by thrift institutions were factors indicating anticompetitive effect) unless the post-merger HHI included in the calculation of market concentration, Applicant would is at least 1800 and the merger increases the HHI by at least 200 control 9.2 percent of the total deposits in the market and Company points. would control 16.2 percent. Consummation of the proposal would The Department has not advised the Board of any objection to this increase the HHI by 298 points, to 1659, and the four-firm concentratransaction. tion ratio would be 75.3 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 1986 Based on the foregoing and other facts of record, the Applicant, the largest commercial banking organiza- Board has determined that the proposed acquisition is tion in Kansas, controls eight subsidiary banks with in the public interest and that the applications should total domestic deposits of $1.5 billion, representing 7.9 be approved. Accordingly, the applications are ap- percent of total deposits in commercial banks in the proved for the reasons summarized above. The trans- state.2 Bank, the third largest commercial bank in actions shall not be consummated before the thirtieth Kansas, controls $319.7 million in domestic deposits, calendar day following the effective date of this Order, representing 1.6 percent of total deposits in commeror later than three months after the effective date of cial banks in the state. Upon consummation of this this Order, unless such period is extended for good transaction, Applicant's share of total deposits in cause by the Board or by the Federal Reserve Bank of commercial banks in Kansas would increase to $1.9 Chicago, pursuant to delegated authority. billion, representing 9.5 percent of total deposits in By order of the Board of Governors, effective commercial banks in Kansas. November 20, 1985. The Board has carefully considered the effects of the proposal on statewide banking structure and upon Voting for this action: Chairman Volcker and Governors competition in the relevant markets. The proposal Martin, Partee, Rice, and Seger. Absent and not voting: involves a combination of sizeable commercial bank- Governor Wallich. ing organizations that are among the leading banking organizations in the state. However, Kansas is viewed JAMES MCAFEE as unconcentrated in terms of banking resources, with [SEAL] Associate Secretary of the Board the four largest commercial banking organizations in the state controlling 13.8 percent of total statewide deposits in commercial banks. Upon consummation, Fourth Financial Corporation the four-firm concentration ratio would increase to Wichita, Kansas 15.3 percent and the state would remain unconcentrated. Accordingly, consummation of the proposed trans- IV Topeka Acquisition, Inc. action would not have a significant effect on the Wichita, Kansas concentration of banking resources in Kansas. Applicant and Bank do not operate subsidiary banks Order Approving Acquisition of a Bank in the same markets. Therefore, consummation of the proposal would not eliminate existing competition in Fourth Financial Corporation, Wichita, Kansas ("Ap- any geographic market. plicant"), a bank holding company within the meaning The Board has considered the effects of this proposof the Bank Holding Company Act of 1956, as amend- al on probable future competition and has examined ed (12 U.S.C. § 1841, et seq.) ("Act"), has applied for the proposal in light of its proposed guidelines for the Board's approval under section 3(a)(3) of the Act assessing the competitive effects of market extension (12 U.S.C. § 1842(a)(5)) to acquire indirectly all of the mergers and acquisitions3 in the markets in which voting shares of the First National Bank of Topeka, Applicant or Bank competes.4 None of these markets Topeka, Kansas ("Bank"). This transaction would be is considered highly concentrated and there is no effected by merging Bank's parent holding company, evidence in the record that these markets are not First Topeka Bancshares, Inc., with and into Appli- competitive.5 Thus, the Board concludes that consumcant's wholly owned subsidiary, IV Topeka Acquisi- mation of this proposal would not have any significant tion, Inc.1 adverse effects on probable future competition in any Notice of the applications, affording an opportunity relevant market. for interested persons to submit comments, has been given in accordance with section 3 of the Act. The time for filing comments has expired, and the Board has 2. Banking data are as of December 31, 1984. considered the applications and all comments received 3. "Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Bank in light of the factors set forth in section 3(c) of the Act Merger Act and the Bank Holding Company Act," 47 Federal (12 U.S.C. § 1842 (c)). Register 9017 (1982). While the proposed policy statement has not been approved by the Board, the Board is using the policy guidelines as part of its analysis of the effect of a proposal on probable future competition. 4. These banking markets are the Kansas City, Wichita and Topeka 1. IV Topeka Acquisition, Inc. has applied under section 3(a)(1) of banking markets. the Act (12 U.S.C. § 1842(a)(1)) for approval to become a bank 5. The three largest commercial banking organizations in the Kanholding company by merging with First Topeka Bancshares, Inc. and sas City market control 33.6 percent of the deposits in commercial thereby indirectly to acquire Bank. IV Topeka Acquisition, Inc. is of banks in the market, while the three largest in the Wichita market no significance except as a means to facilitate the acquisition of voting control 60.4 percent, and the three largest in the Topeka market shares of Bank by Applicant. control 63.6 percent of the deposits in commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 The financial and managerial resources of Applicant $601 million, representing 2.2 percent of total deposits and Bank are regarded as satisfactory and consistent in commercial banks in the state. Upon consummation with approval of the proposal. Considerations relating of this proposal, Applicant would become the third to the convenience and needs of the communities to be largest banking organization in Louisiana, controlling served are also consistent with approval of the pro- approximately $2.2 billion in deposits, or 7.9 percent posal. of deposits in commercial banks in the state. The Based on the foregoing and other facts of record, the Board notes that the banking structure in Louisiana is Board has determined that the applications under among the least concentrated of any state, with the sections 3(a)(1) and 3(a)(3) should be, and hereby are, three largest banking organizations controlling 20 perapproved for the reasons set forth above. The transac- cent of deposits in commercial banks in the state.2 The tion shall not be consummated before the thirtieth Board has carefully considered the effects of the calendar day following the effective date of this Order, proposal on the structure of banking in Louisiana and or later than three months after the effective date of has concluded that consummation of this transaction this Order, unless such period is extended for good would not have a significant adverse effect on the cause by the Board or the Federal Reserve Bank of concentration of banking resources in the state. Kansas City, acting pursuant to delegated authority. Since Applicant's and FNFC's subsidiary banks do By order of the Board of Governors, effective not compete directly in any market, consummation of November 13, 1985. the proposal would not eliminate any existing competition. The Board has also examined the effect of the Voting for this action: Chairman Volcker and Governors proposed merger on probable future competition in the Partee, Rice and Seger. Absent and not voting: Governors relevant geographic markets in light of the Board's Martin and Wallich. proposed market extension guidelines.3 Applicant's JAMES MCAFEE subsidiary banks operate in the New Orleans and [SEAL] Associate Secretary of the Board Alexandria banking markets and FNFC's subsidiary bank operates in the Baton Rouge banking market.4 Hibernia Corporation The New Orleans and Baton Rouge banking markets New Orleans, Louisiana are not considered highly concentrated under the Board's guidelines. Although the Alexandria market is Order Approving Merger of Bank Holding concentrated, with a three-firm concentration ratio of Companies 74.4 percent, there are a substantial number of potential entrants with assets in excess of $500 million. Hibernia Corporation, New Orleans, Louisiana, a Thus, none of the markets is subject to intensive bank holding company within the meaning of the Bank analysis under the Board's guidelines. On the basis of Holding Company Act (12 U.S.C. § 1841 et seq.) these and other facts of record, the Board has conclud- ("Act"), has applied for the Board's approval under ed that consummation of this proposal would not have section 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to any significant adverse effects on probable future competition in any relevant market. merge with Fidelity National Financial Corporation, Baton Rouge, Louisiana ("FNFC"), and thus indirect- The financial and managerial resources and future ly to acquire Fidelity National Bank of Baton Rouge prospects of Applicant, FNFC, and their subsidiary ("Bank"). banks are considered satisfactory and consistent with Notice of the application, affording interested per- approval. Considerations relating to the convenience sons an opportunity to submit comments, has been and needs of the community to be served are also given in accordance with section 3(b) of the Act. The consistent with approval. time for filing comments has expired, and the Board Based on the foregoing and other facts of record, the has considered the application and all comments re- Board has determined that the application should be, ceived in light of the factors set forth in section 3(c) of and hereby is, approved. This transaction shall not be the Act (12 U.S.C. § 1842(c)). Applicant is the fourth largest commercial banking 2. As of June 1, 1985. organization in Louisiana, controlling three bank sub- 3. See "Proposed Policy Statement of the Board of Governors of sidiaries holding deposits of approximately $1.6 bil- the Federal Reserve System for Assessing Competitive Factors under the Bank Merger Act and the Bank Holding Company Act." 47 lion, representing 5.7 percent of total deposits in Federal Register 9017 (1982). Although the proposed guidelines have commercial banks in the state.1 FNFC is the sixth not been adopted by the Board, the Board is using the guidelines in its largest commercial banking organization in Louisiana, analysis of the effects of a proposal on probable future competition. 4. The New Orleans banking market consists of the parishes of controlling one bank subsidiary holding deposits of Orleans, Jefferson, St. Bernard and St. Tammany, and the Alexandria banking market consists of the parishes of Rapides and Grant. The Baton Rouge banking market consists of the parishes of Ascension, 1. Banking data are as of June 30, 1984. East Baton Rouge, Livingston, and West Baton Rouge. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 1986 consummated before the thirtieth calendar day follow- with total deposits of $314.5 million, but it would ing the effective date of this Order, or later than three continue to hold less than 2 percent of deposits in months after the effective date of this Order, unless commercial banks in the state. Consummation of the such period is extended for good cause by the Board or proposed transaction would not have a significant by the Federal Reserve Bank of Atlanta, acting pursu- effect on the concentration of banking resources in ant to delegated authority. Kansas. By order of the Board of Governors, effective Merchants's subsidiary bank, Merchants National November 5, 1985. Bank of Topeka ("Merchants Bank"), and Lawrence Bank do not compete in the same banking markets. Voting for this action: Chairman Volcker and Governors Merchants Bank is the 2nd largest of 16 organizations Martin, Partee, Rice and Seger. Absent and not voting: in the Topeka, Kansas banking market,2 with deposits Governor Wallich. of $218 million, representing 21.3 percent of total deposits in the commercial banks in the Topeka bank- JAMES MCAFEE ing market. Lawrence Bank is the largest of four [SEAL] Associate Secretary of the Board organizations in the Lawrence, Kansas banking market,3 with deposits of $96 million, representing 35.9 Merchants Bancorporation percent of total deposits in the commercial banks in Topeka, Kansas the Lawrence banking market. The principals of Merchants do not control any other commercial banks in Order Approving the Merger of Bank Holding the Lawrence banking market. The Board concludes Companies that the proposed transaction would have no adverse effect on existing or potential competition in any Merchants Bancorporation, Topeka, Kansas ("Mer- relevant market. chants"), a bank holding company within the meaning The financial and managerial resources and future of the Bank Holding Company Act (12 U.S.C. § 1841 prospects of Merchants, Crown, and their subsidiary et seq.) ("Act"), has applied for the Board's approval banks are consistent with approval. The transaction, a under section 3(a)(5) of the Act (12 U.S.C. reorganization of related companies rather than an § 1842(a)(5)) to merge with Crown Bancshares, Inc., expansion by Merchants, will have an immediate Kansas City, Missouri ("Crown"). As a result of the beneficial impact on the capital position of Merchants. transaction, Merchants would acquire 84.9 percent of Considerations relating to the convenience and needs the voting shares of Crown's subsidiary bank, The of the communities to be served also are consistent First National Bank of Lawrence, Lawrence, Kansas with approval. ("Lawrence Bank"). Together, principals of Crown Based upon the foregoing and other facts of record, and Crown itself hold a total of approximately 31 the Board has determined that the application should percent of the voting shares of Merchants, and this be and hereby is approved for the reasons summarized transaction, to a significant degree, represents a con- above. The transaction shall not be consummated solidation and reorganization of related companies. before the thirtieth calendar day following the effective Notice of the application, affording an opportunity date of this Order, or later than three months after the for interested persons to submit comments, has been effective date of this Order, unless such period is given in accordance with section 3(b) of the Act. The extended for good cause by the Board or by the time for filing comments has expired, and the Board Federal Reserve Bank of Kansas City, acting pursuant has considered the application and all comments re- to delegated authority. ceived in light of the factors set forth in section 3(c) of By order of the Board of Governors, effective the Act, 12 U.S.C. § 1842(c). November 26, 1985. Merchants, the 6th largest banking organization in Kansas, controls one subsidiary bank with total depos- Voting for this action: Vice Chairman Martin and Goverits of $218 million, representing 1.1 percent of total nors Partee, Rice, and Seger. Absent and not voting: Chairdeposits in commercial banks in the state.1 Crown, the man Volcker and Governor Wallich. 25th largest banking organization in Kansas, controls one subsidiary bank with total deposits of $96.5 mil- JAMES MCAFEE lion, representing 0.5 percent of total deposits in [SEAL] Associate Secretary of the Board commercial banks in the state. Upon consummation of this proposal, Merchants would become the fourth largest commercial banking organization in Kansas, 2. The Topeka, Kansas, banking market consists of the Topeka, Kansas, Ranally Metro Area ("RMA"). 3. The Lawrence, Kansas, banking market consists of the Law- 1. All bank deposits are as of December 31, 1984. rence, Kansas, RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 Merchants National Corporation have a significant adverse effect on concentration of Indianapolis, Indiana banking resources in Indiana. Merchants, Farmers and Hancock operate in the Order Approving Acquisition of Bank and Bank Indianapolis banking market.2 Merchants, the third Holding Companies largest of 39 banking organizations in the Indianapolis market, controls deposits of approximately $1.6 bil- Merchants National Corporation, Indianapolis, Indi- lion, representing 17.7 percent of total deposits in ana ("Merchants"), a bank holding company within commercial banks therein. Farmers is the eleventh the meaning of the Bank Holding Company Act largest banking organization in the market, controlling (12 U.S.C. § 1841, et seq.) ("Act"), has applied for deposits of $101.2 million, representing 1.3 percent of the Board's approval under section 3(a)(5) of the Act total deposits in commercial banks in the market. (12 U.S.C. § 1842(a)(5)), to merge with Farmers Na- Hancock is the sixteenth largest banking organization tional Corporation, Shelbyville, Indiana ("Farmers"), in the market, controlling deposits of $64.7 million, and thereby indirectly to acquire 100 percent of the representing 0.8 percent of the total deposits in comvoting shares of the Farmers National Bank of Shelby- mercial banks in the market. Upon consummation of ville, as well as to merge with Hancock Bancshares the Farmers and Hancock applications, Merchants Corporation, Greenfield, Indiana ("Hancock"), and would still rank as the third largest banking organizathereby indirectly to acquire 100 percent of the voting tion in the market, and it would control 19.6 percent of shares of Hancock Bank & Trust, Greenfield, Indiana. total deposits in commercial banks in the market. The Merchants has also applied for the Board's approval share of deposits held by the four largest commercial under section 3(a)(3) of the Act (12 U.S.C. banking organizations in the Indianapolis market is § 1842(a)(3)) to acquire all of the voting shares of the 73.6 percent and would increase to 75.7 percent upon Central National Bank of Greencastle, Greencastle, consummation of this proposal. The market's Herfin- Indiana ("Central"). dahl-Hirschman Index ("HHI") is 1783 and the proposed acquisitions would increase the HHI by 72 Notice of the applications, affording an opportunity points to 1855.3 Although approval of the Hancock and for interested persons to submit comments, has been Farmers applications would eliminate some existing given in accordance with section 3(b) of the Act competition between Merchants and Farmers and (12 U.S.C. § 1841(b)). The time for filing comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. 2. The Indianapolis banking market consists of Boone, Hamilton, § 1842(c)). Hancock, Hendricks, Johnson, Marion, Morgan, and Shelby Counties in Indiana. Merchants, the third largest banking organization in 3. Certain of Merchant's principals are affiliated with three one- Indiana, controls one subsidiary bank with total de- bank holding companies which operate in the Indianapolis market (Alliance Bancorp, U.S. Bancorp and Farmers State Corporation). posits of approximately $1.6 billion, representing 4.4 This ownership structure may limit the competition between these percent of total deposits in commercial banks in Indi- banking organizations and Merchants. If these institutions are viewed ana.1 Farmers, the 68th largest banking organization in as affiliated with Merchants, the percentage of the total deposits in commercial banks in the market controlled by Merchants and its Indiana, has one subsidiary bank with deposits of affiliates after the acquisition of Farmers and Hancock would be $106.8 million, representing 0.3 percent of total depos- approximately 22.1 percent, and the four firm concentration ratio would be 78.2 percent. The acquisition of Farmers and Hancock its in commercial banks in Indiana. Hancock, the would result in an increase in the HHI of 82 points to 2118 prior to any 129th largest banking organization in Indiana, has one consideration of thrift institutions. If 50 percent of the deposits held by subsidiary bank with total deposits of $64.7 million, thrift institutions were included in the calculation of market concentration, Merchant's post acquisition share would be 19.3 and the HHI representing 0.2 percent of total deposits in commerwould increase by 61 points to 1544. cial banks in the state. Central, the 119th largest Under the revised Department of Justice Merger Guidelines (49 banking organization in Indiana, has total deposits of Federal Register 26,823 (1984)), any market in which the post-merger HHI is above 1800 is considered highly concentrated. In such mar- $69.4 million, representing 0.2 percent of total deposits kets, the Department is likely to challenge any merger that produces in commercial banks in the state. an increase in the HHI of more than 50 points unless other factors indicate that the merger will not substantially lessen competition. Upon consummation of these proposals, Merchants Other factors include the post-merger HHI, the increase in the HHI, would control total deposits of approximately $1.8 changing market conditions, the financial condition of the firm to be billion, representing 5.1 percent of total deposits in acquired, ease of entry, nature of the product, substitute products, similarities in the firms that are subject to the transaction and commercial banks in Indiana, and Merchants would increased efficiencies that may result from the transaction. The remain the third largest banking organization in Indi- Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other ana. Consummation of these transactions would not factors indicating an anticompetitive effect) unless the merger increases the HHI by at least 200 points and the post-merger HHI is at least 1800. The Department has not advised the Board of any objection to this 1. Deposit data are as of December 31, 1984. transaction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 1986 Hancock in the Indianapolis banking market, more companies commencing January 1, 1986.8 That same than 30 other commercial banking organizations would law restricts Merchant's entry into the Greencastle remain as competitors after consummation of the market by branching or by de novo acquisition of a proposal. In addition, the Board has concluded that bank. On the basis of these and other facts of record, the effect of this proposal on existing competition is the Board has concluded that the proposed acquisition mitigated by the extent of competition offered by thrift of Central would not have any significant adverse institutions in the market.4 Nineteen thrift institutions effects on probable future competition in any relevant in the market hold 23 percent of the total deposits in market. depository institutions in the market. These thrift In evaluating these applications, the Board has institutions generally compete with commercial bank- considered the financial and managerial resources and ing organizations to the extent that they offer NOW future prospects of Merchants and the banking organiaccounts, make consumer loans and engage in com- zations to be acquired. The Board notes that the mercial lending. The Board considers the presence of earnings and capital position of Merchants and its lead thrift institutions as a factor in assessing the competi- bank have improved in recent years. In addition, tive effects of the proposed transaction, and has deter- Merchants has recently raised a substantial amount of mined that consummation of the proposed transaction additional capital and, in conjunction with these transis not likely to have a significant adverse effect on actions, Merchants has provided additional capital for existing competition in the Indianapolis market.5 its lead bank. In light of these facts and the fact that Central operates in the Greencastle banking mar- these transactions do not involve any additional debt, ket,6 where Merchants does not currently compete. the Board concludes that the financial and managerial Central is the largest of four banking organizations in factors are consistent with approval. the Greencastle market with total deposits of $69.4, Merchants proposes to offer new or expanded serrepresenting 36.1 percent of the deposits in commer- vices to the customers of Farmers and Central which cial banks in the market. Approval of the Central would include an executive credit line, a national debit application would not eliminate any existing competi- card program, access to a national ATM network, tion between Merchants and Central. discount brokerage services, adjustable rate residen- The Board has considered the effects of this pro- tial mortgages and lower interest rates on variable rate posed acquisition on probable future competition in consumer loans. Considerations relating to the convethe Greencastle market in light of the proposed market nience and needs of the community to be served lend extension guidelines.7 The market is highly concen- weight toward approval of the Farmers and Central trated, with the three largest commercial banking applications and are consistent with the Hancock organizations controlling 82.7 percent of deposits in application. commercial banks in the market. Based on the size of Based on the foregoing and other facts of record, the the market and the number of potential entrants, the Board has determined that the applications should be proposed transaction does not merit close scrutiny and hereby are approved. These transactions shall not under the Board's proposed guidelines. In addition, be consummated before the thirtieth calendar day recently enacted changes in the Indiana banking stat- following the effective date of this Order, or later than utes will permit entry by out-of-state bank holding three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Chicago pursuant to delegated authority. By order of the Board of Governors, effective 4. The Board has previously determined that thrift institutions have November 8, 1985. 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). Voting for this action: Chairman Volcker and Governors 5. If 50 percent of the deposits held by thrift institutions were Martin, Partee, and Rice. Absent and not voting: Governors included in the calculation of market concentration, Merchant's post- Wallich and Seger. acquisition share would be 17.6 percent. Upon consummation of the proposed acquisition, the four-firm concentration ratio would increase from 65.8 to 67.5 percent and the HHI would increase by 52 points to JAMES MCAFEE 1467. [SEAL] Associate Secretary of the Board 6. The Greencastle market consists of Putman County, Indiana. 7. "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 as part of its analysis of the effect of a proposal on probable future 8. Indiana Public Law 265-1985, West Indiana Legislative Service, competition. Pamphlet 7, p.l. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 NCNB Corporation holding company's home state,4 unless such acquisi- Charlotte, North Carolina tion is "specifically authorized by the statute laws of the state in which such bank is located, by language to Order Approving Acquisition of a Bank that effect and not merely by implication." The statute laws of South Carolina authorize the acquisition of a NCNB Corporation, Charlotte, North Carolina, a bank in that state by a bank holding company that has bank holding company within the meaning of the Bank its principal place of business in a state within a Holding Company Act (12 U.S.C. §§ 1841 et seq.) defined "Southern Region," including North Caroli- ("Act or BHC Act"), has applied for the Board's na, and that has more than 80 percent of the total approval under section 3(a)(3) of the Act (12 U.S.C deposits held by its bank subsidiaries at bank subsid- § 1842 (a) (3)) to acquire the successor by merger to iaries located within the Southern Region.5 Such ac- Bankers Trust of South Carolina, Columbia, South quisitions are permitted if the laws of the state in Carolina ("Bank").1 which the acquiring institution has its principal place Notice of the application, affording an opportunity of business would permit the acquisition of the acfor interested persons to submit comments, has been quiror bank holding company by a South Carolina given in accordance with section 3(b) of the Act. The bank or bank holding company on a reciprocal basis.6 time for filing comments has expired, and the Board Applicant is a Southern Region bank holding company has considered the application and all comments re- under the South Carolina act,7 and its principal place ceived in light of the factors set forth in section 3(c) of of business is in North Carolina. North Carolina has the Act, including the comments of the National enacted a similar reciprocal statute,8 which permits Association of Life Underwriters and the National the acquisition of a North Carolina bank or bank Association of Professional Insurance Agents. holding company by a bank holding company located in South Carolina. Applicant is the second largest commercial banking organization in North Carolina. Its North Carolina Based on its review of the relevant South Carolina bank subsidiary controls total domestic deposits of and North Carolina statutes, the Board has determined approximately $6 billion, representing 20.7 percent of that the North Carolina statute satisfied the conditions the total deposits in commercial banks in that state.2 of the South Carolina regional interstate banking stat- Applicant is also the fifth largest commercial banking ute and that South Carolina has by statute expressly organization in Florida, where its subsidiary bank authorized a North Carolina bank holding company, holds total domestic deposits of $3.9 billion, or 6.1 such as Applicant, to acquire a South Carolina bank, percent of the total deposits in commercial banks in such as Bank. Accordingly, the Board concludes that Florida.3 Bank, the third largest commercial banking approval of Applicant's proposal to acquire a bank in organization in South Carolina, holds total domestic South Carolina is not barred by the Douglas Amenddeposits of approximately $1.4 billion, representing ment. 13.7 percent of the total deposits in commercial banks The Board has carefully considered the effects of the in South Carolina. proposal upon competition in the relevant banking Section 3 (d) of the Act (12 U.S.C. § 1842 (d)), the markets. The proposal involves the combination of Douglas Amendment, prohibits the Board from ap- two sizeable commercial banking organizations that proving an application by a bank holding company to are among the larger banking organizations in their acquire control of any bank located outside of the respective states. However, because Bank and the banking subsidiaries of Applicant operate in different states, consummation of the proposal would not eliminate significant existing competition in any relevant market. 1. Applicant has organized an interim bank, NCNB State Bank, Columbia, South Carolina, to facilitate the acquisition of Bankers Trust. As part of the proposed transaction, NCNB State Bank would be merged into Bankers Trust, which would be the surviving institution and would change its name to NCNB Bankers Trust of South Carolina. Applicant has also applied for the Board's approval to acquire 4. A bank holding company's home state is that state in which the Southern National Bankshares, Inc., Atlanta, Georgia, and Pan operations of the bank holding company's banking subsidiaries were American Banks Inc., Miami, Florida. The Board is approving these principally conducted on July 1, 1966, or the date on which the applications in separate actions. company became a bank holding company, whichever is later. Appli- 2. Banking data are as of December 31, 1984, unless otherwise cant's home state is North Carolina. noted. 5. S.C. Code Ann. § 34-24-30 (Law. Co-op. Supp. 1984). 3. Upon its acquisition of Pan American Banks Inc. and Southern 6. S.C. Code Ann. § 34-24-50(b). National Bankshares, Inc., Applicant would become the fourth largest 7. All of the deposits of Applicant's bank subsidiaries arc held by banking organization in Florida and the forty-third largest banking banks located in states within the Southern Region. organization in Georgia. 8. N.C. Gen. Stat. §§ 53-209 et seq. (Supp. 1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 1986 The Board has also examined the effect of Appli- tion found in section 4(c)(8)(D) for activities engaged cant's acquisition of Bank on probable future competi- in by a bank holding company or its subsidiaries on tion in the relevant geographic markets in light of the May 1, 1982, apply to the insurance activities of Bank. Board's proposed guidelines for assessing the compet- Finally, NCNB has committed that, upon its acquisiitive effects of market-extension mergers or acquisi- tion of Bank, it will not expand Greenwood's insurtions.9 In view of the existence of numerous other ance agency activities outside South Carolina without potential entrants from states within the southeastern the Board's prior approval. interstate banking region into each of the markets With respect to Protestants' claim that the nonbankserved by Bank or Applicant, the Board has concluded ing prohibitions of the BHC Act apply, the Board that consummation of the proposed transaction would notes that section 225.22(d)(ii) of Regulation Y permits not have any significant adverse effects on probable state bank subsidiaries of bank holding companies to future competition in any relevant market. acquire all of the securities of a company that engages Since the mid-1930's, Bank has operated an insur- solely in activities in which the parent bank may ance agency, licensed under state law, as a department engage at the same locations and subject to the same of the bank. The insurance agency is currently en- limitations as if the bank were engaging in the activity gaged in selling various types of property and casualty directly (12 C.F.R. § 225.22 (d)(ii)). This provision, as insurance.10 The National Association of Life Under- currently written, implicitly recognizes that activities writers and the National Association of Professional conducted directly by banks that are subsidiaries of Insurance Agents ("the Associations" or "Protes- bank holding companies would be consistent with the tants") have protested the acquisition by Applicant of regulation. As discussed above, Bank is permitted the insurance agency activities of Bank. under South Carolina law to engage in the subject The Associations argue that the prohibition against insurance activities at its current locations in South the conduct of insurance activities that is contained in Carolina. Title VI of the Garn-St Germain Depository Institu- The Board notes that the questions of the scope of tions Act of 1982, as incorporated in section 4(c)(8) of the Act's nonbanking prohibitions with respect to the the BHC Act, applies not only to bank holding compa- subsidiaries of holding company state banks or to the nies and their nonbank subsidiaries but also to the banks themselves and whether the exemption in Reguactivities conducted directly by the bank subsidiaries lation Y should be eliminated have been raised in a of bank holding companies. The Associations also number of contexts. The Board has these questions assert that Applicant's acquisition of Bank's insurance under consideration in connection with its rulemaking agency would constitute an evasion of the nonbanking proceedings under Regulation Y12 and its request for prohibitions in the BHC Act. The Associations believe comment regarding the real estate activities of holding that this case presents similar issues to those present- company banks.13 The Board has also asked for comed in Citicorp's application to acquire a South Dakota ment regarding the scope of the exemptions to Title VI bank, which was denied by the Board.11 of the Garn-St Germain Act. In these contexts, the In response to the comment, NCNB asserts that the Protestants have submitted extensive comments to the nonbanking prohibitions of the BHC Act do not apply Board on these issues, and the Board believes that it is to the activities conducted directly by a state bank appropriate to reserve judgment on the issue in this subsidiary of a bank holding company. NCNB further case and decide the matter in the context of a full argues that even if the prohibitions apply, the excep- rulemaking proceeding in which all interested parties may participate. In this regard, NCNB has committed that it will conform Bank's insurance activities to the 9. "Proposed Policy Statement of the Board of Governors of the results of the Board's rulemaking. Federal Reserve System for Assessing Competitive Factors Under the The financial and managerial resources and future Bank Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (1982). Although the proposed policy statement has not prospects of Applicant, its subsidiaries, and Bank are been adopted by the Board, the Board has applied the criteria set forth consistent with approval of the application. Considerin the proposed policy statement in its analysis of the effects of ations relating to the convenience and needs of the proposals on probable future competition. 10. South Carolina banking law contains no specific authority for a communities to be served also are consistent with bank to engage in insurance agency activities. The state, however, has approval. acquiesced in Bank activities for more than 50 years, and the South Based on the foregoing and other facts of record, the Carolina Commissioner of Banking has stated that such insurance agency activities are permissible for state banks. Board has determined that this application should be, 11. Citicorp, 71 FEDERAL RESERVE BULLETIN 789 (1985). In that application however, the Board concluded that the acquisition of the bank was in reality an acquisition for the purposes of permitting Citicorp to engage in insurance activities prohibited for bank holding companies under section 4 of the BHC Act and that the bank was 12. 49 Federal Register 794 (1984). simply a device to accomplish this objective. 13. 50 Federal Register 4519 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 and hereby is, approved. The transaction shall not be given in accordance with section 3(b) of the Act. The consummated before the thirtieth calendar day follow- time for filing comments has expired, and the Board ing the effective date of this Order, or later than three has considered the application and all comments remonths after the effective date of this Order, unless ceived in light of the factors set forth in section 3(c) of such period is extended for good cause by the Board or the Act. by the Federal Reserve Bank of Richmond, acting Applicant, with two bank subsidiaries, has consolipursuant to delegated authority. dated deposits of approximately $9.9 billion. It is the By order of the Board of Governors, effective second largest banking organization in North Carolina, November 27, 1985. where its subsidiary bank holds domestic deposits of $6.0 billion, representing 20.7 percent of the total Voting for this action: Vice Chairman Martin and Gover- deposits in commercial banks in the state.4 The Board nors Partee, Rice, and Seger. Absent and not voting: Chair- has previously determined that the statute laws of man Volcker and Governor Wallich. Florida expressly authorize Applicant to acquire banks in Florida, and that such acquisitions by Applicant are consistent with state law and with the inter- JAMES MCAFEE [SEAL] Associate Secretary of the Board state banking prohibition contained in section 3(d) of the Act, the Douglas Amendment.5 Moreover, this acquisition would be permitted pursuant to Florida's NCNB Corporation Regional Reciprocal Banking Act of 1984.6 Charlotte, North Carolina Applicant is the fifth largest commercial banking organization in Florida, where its subsidiary bank, Order Approving Acquisition of a Bank Holding NCNB National Bank of Florida, holds total deposits Company of $3.9 billion, representing 6.1 percent of the total deposits in commercial banks in Florida. Pan Ameri- NCNB Corporation, Charlotte, North Carolina, a can, the ninth largest commercial banking organization bank holding company within the meaning of the Bank in Florida, controls aggregate domestic deposits of Holding Company Act (12 U.S.C. §§ 1841 et seq.) approximately $1.4 billion, representing 2.1 percent of ("Act"), has applied for the Board's approval under the total deposits in commercial banks in the state. section 3 of the Act (12 U.S.C. § 1842) to acquire the Upon acquisition of Pan American, Applicant would successor by merger to Pan American Banks Inc., control 8.2 percent of the total deposits in commercial Miami, Florida ("Pan American").1 As a result of the banks in Florida and would become the fourth largest acquisition, Applicant would acquire indirectly the commercial banking organization in the state. The following banks, all in Florida: Pan American Bank, Board has carefully considered the effect of this pro- N.A., Miami; Pan American Bank of Miami, N.A., posal on the concentration of banking resources within Miami; Pan American Bank of Dade County, N.A., the state and has concluded that the proposed acquisi- Hialeah; Pan American Bank of Miami Shores, N.A., tion would not have a significant adverse effect on the Miami Shores; Pan American Bank of Jacksonville, concentration of banking resources in Florida. Jacksonville;2 Pan American Bank of Orlando, N.A., Applicant's Florida bank subsidiary competes di- Orlando; and Pan American Bank of Tampa, N.A., rectly with Pan American's subsidiary banks in all six Tampa.3 Applicant would also acquire Pan American's banking markets in which Pan American competes.7 unconsolidated 14.4 percent interest in Eastern Na- Pan American will sell its only bank in the Sarasota tional Bank, Hialeah, Florida. banking market, Pan American Bank of Sarasota, to Notice of the application, affording an opportunity SunTrust Banks, Inc., prior to consummation of this for interested persons to submit comments, has been transaction. As a result of this divestiture, consummation of the proposed acquisition would not eliminate any existing competition in the Sarasota market. In none of the other five markets in which both 1. Applicant has also applied for the Board's approval to acquire Applicant and Pan American compete would consum- Southern National Bankshares, Inc., Atlanta, Georgia, and Bankers Trust of South Carolina, Columbia, South Carolina. The Board is approving these applications in separate actions. 2. Pan American Bank of Jacksonville, which is currently a state- 4. Statewide deposit data are as of December 31, 1984. chartered bank, will convert to a national bank before consummation 5. NCNB Corporation, 70 FEDERAL RESERVE BULLETIN 225 of the proposed acquisition. (1984); NCNB Corporation, 68 FEDERAL RESERVE BULLETIN 54 3. Pan American has contracted to sell an eighth bank, Pan (1982). American Bank of Sarasota, to SunTrust Banks, Inc. The sale of Pan 6. Fla. Stat. § 658.295(3)(b) (Supp. 1985). American Bank of Sarasota will be completed prior to consummation 7. The Sarasota, Miami-Ft. Lauderdale, Tampa, East Palm Beach, of the present transaction. Jacksonville, and Orlando markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Federal Reserve Bulletin • January 1986 mation of the proposed acquisition cause an increase The Board also has considered the influence of thrift in market concentration, as measured by the Herfin- institutions in evaluating the competitive effects of this dahl-Hirschman Index ("HHI"), that would be sub- proposal.13 Seventeen thrift institutions control apject to challenge under the Department of Justice proximately 40 percent of the total deposits in the Merger Guidelines.8 The Miami-Ft. Lauderdale bank- Tampa market. Four of the ten largest depository ing market would remain unconcentrated following institutions in the market are thrift institutions, includconsummation of the transaction. In the Jacksonville ing the market's largest depository institution. The market, Pan American's absolute and relative size is thrift institutions in the market offer NOW accounts de minimis. Furthermore, in both the East Palm Beach and other transaction accounts and 14 of them offer and Orlando banking markets, the increase in concen- commercial checking accounts and make commercial tration caused by the proposed acquisition would be loans. In light of the extent to which thrift institutions minimal.9 compete with commercial banks in the Tampa market, In the Tampa banking market,10 Applicant is the the Board considers the presence of thrift institutions second largest of 20 commercial banking organiza- as a factor in assessing the competitive effects of the tions, with a subsidiary holding deposits of $642.9 proposed acquisition in the market.14 million, representing 17.3 percent of the total deposits Based on all of the facts of record, including the in commercial banks.11 Pan American is the eighth small increases in concentration in the relevant marlargest commercial banking organization in the market kets and the number and size of the remaining bank with a subsidiary holding $100.2 million in deposits, competitors in each of the markets, the Board conrepresenting 2.7 percent of the total deposits in com- cludes that consummation of the proposed transaction mercial banks in the market. Upon acquisition of Pan would not have a significant adverse effect on existing American, Applicant would remain the second largest competition in the markets in which the subsidiary commercial banking organization in the market, and banks of Applicant and Pan American compete. would control approximately 20 percent of the total Applicant's subsidiary banks operate in 24 additiondeposits in commercial banks in the market. al banking markets in Florida as well as in 49 North Although consummation of the proposed transac- Carolina banking markets. The Board has examined tion would eliminate some existing competition in the the effect of Applicant's acquisition of Pan American Tampa banking market, the Board believes that sever- on probable future competition in these markets in al factors mitigate the anticompetitive effects of the light of the Board's proposed guidelines for assessing acquisition. The Tampa market is considered moder- the competitive effects of market-extension mergers or ately concentrated, with the four largest commercial acquisitions.15 In view of the existence of numerous banking organizations in the market controlling 66.8 other potential entrants from states within the southpercent of the deposits in commercial banks, and an eastern interstate banking region into each of the HHI of 1362. Upon consummation of the proposed markets served by Applicant, the Board has concluded acquisition, the four-firm concentration ratio would that consummation of the proposed transaction would rise to 69.5 percent, the HHI would increase 93 points not have any significant adverse effects on probable to 1455, and the market would remain moderately future competition in any relevant market. concentrated.12 In addition, 19 commercial banking organizations would remain in the market after Applicant's acquisition of Pan American. moderately concentrated. In such markets, the Department is unlikely to challenge any merger that produces an increase in the HHI of fewer than 100 points. The Department has not advised the Board of any objection to this 8. 49 Federal Register 26,823 (1984). transaction. 9. In the East Palm Beach banking market, which is considered 13. The Board has previously determined that thrift institutions moderately concentrated under the Department of Justice's Guide- have become, or at least have the potential to become, major lines, the proposed acquisition would increase the HHI by 28 points, competitors of commercial banks. NCNB Corporation, 70 FEDERAL to 1095. In the Orlando banking market, which is considered highly RESERVE BULLETIN 225 (1984); Sun Banks, Inc., 69 FEDERAL REconcentrated, the acquisition would increase the HHI by 12 points, to SERVE BULLETIN 934 (1983). 2374. In the Jacksonville banking market, which is also considered 14. If 50 percent of the deposits held by thrift institutions in the highly concentrated, the acquisition would increase the HHI by 2 Tampa market were included in the calculation of market concentrapoints, to 1870. The Department has informed the Board that a bank tion, Applicant's post-acquisition market share would be 15.8 percent. merger or acquisition generally will not be challenged (in the absence Upon consummation of the transaction, the HHI would increase by 58 of other factors indicating an anticompetitive effect) unless the post- points, to 1040. merger HHI is at least 1800 and the merger increases the HHI by at 15. "Proposed Policy Statement of the Board of Governors of the least 200 points. Federal Reserve System for Assessing Competitive Factors Under the 10. The Tampa banking market is approximated by Hillsborough Bank Merger Act and the Bank Holding Company Act," 47 Federal County, plus the town of Land O'Lakes in Pasco County. Register 9017 (1982). Although the proposed policy statement has not 11. Market deposit data are as of June 30, 1984. been adopted by the Board, the Board has applied the criteria set forth 12. Under the Department of Justice Merger Guidelines, a market in the proposed policy statement in its analysis of the effects of in which the post-merger HHI is between 1000 and 1800 is considered proposals on probable future competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 The financial and managerial resources and future approximately $6 billion, representing 20.7 percent of prospects of Applicant, Pan American, and their re- the total deposits in commercial banks in that state.2 spective subsidiaries are consistent with approval of Applicant is also the fifth largest commercial banking the application. Considerations relating to the conve- organization in Florida, where its subsidiary bank nience and needs of the communities to be served also holds total domestic deposits of $3.9 billion, or 6.1 are consistent with approval. percent of the total deposits in commercial banks in Based on the foregoing and other facts of record, the Florida.3 Southern is the forty-third largest commer- Board has determined that this application should be, cial banking organization in Georgia. Its one subsidand hereby is, approved. The transaction shall not be iary bank holds domestic deposits of $69.9 million, consummated before the thirtieth calendar day follow- representing approximately 0.2 percent of the total ing the effective date of this Order, or later than three deposits in commercial banks in Georgia. months after the effective date of this Order, unless Section 3(d) of the Act (12 U.S.C. § 1842(d)), the such period is extended for good cause by the Board or Douglas Amendment, prohibits the Board from apby the Federal Reserve Bank of Richmond, acting proving an application by a bank holding company to pursuant to delegated authority. acquire control of any bank located outside of the By order of the Board of Governors, effective holding company's home state,4 unless such acquisi- November 27, 1985. tion is "specifically authorized by the statute laws of the State in which such bank is located, by language to Voting for this action: Vice Chairman Martin and Gover- that effect and not merely by implication." The statute nors Partee, Rice, and Seger. Absent and not voting: Chair- laws of Georgia authorize the acquisition of a bank in man Volcker and Governor Wallich. Georgia by a bank holding company that controls a bank located in other states in a defined southeastern region, including North Carolina, if the laws of the JAMES MCAFEE acquiring institution's home state would permit on a [SEAL] Associate Secretary of the Board reciprocal basis the acquisition of the acquiror banking organization by a Georgia banking organization.5 NCNB Corporation The Board has previously determined that the North Charlotte, North Carolina Carolina statute6 satisfies the conditions of the Georgia regional interstate banking statute and that Georgia Order Approving Acquisition of a Bank Holding has by statute expressly authorized a North Carolina Company bank holding company, such as Applicant, to acquire a Georgia bank or bank holding company, such as NCNB Corporation, Charlotte, North Carolina, a Company.7 Accordingly, the Board concludes that bank holding company within the meaning of the Bank approval of Applicant's proposal to acquire a bank in Holding Company Act (12 U.S.C. §§ 1841 Georgia is not barred by the Douglas Amendment. et seq.) ("Act"), has applied for the Board's approval The Board has carefully considered the effects of the under section 3 of the Act (12 U.S.C. § 1842) to proposal upon competition in the relevant banking acquire the successor by merger to Southern National markets. Because the banking subsidiaries of Appli- Bankshares, Inc. ("Southern"), Atlanta, Georgia, and cant and Southern operate in different states, consumthereby to acquire Southern's subsidiary bank, South- mation of the proposal would not eliminate significant ern National Bank, Atlanta, Georgia.1 existing competition in any relevant market. Notice of the application, affording an opportunity The Board has also examined the effect of the for interested persons to submit comments, has been proposal on probable future competition in the relegiven in accordance with section 3(b) of the Act. The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 3(c) of 2. Banking data are as of December 31, 1984. the Act. 3. Upon acquisition of Pan American Banks Inc. and Bankers Trust of South Carolina, Applicant would become the fourth largest banking Applicant is the second largest commercial banking organization in Florida and the third largest banking organization in organization in North Carolina. Its North Carolina South Carolina. 4. A bank holding company's home state is that state in which the bank subsidiary controls total domestic deposits of operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. Applicant's home state is North Carolina. 1. Applicant has also applied for the Board's approval to acquire 5. Ga. Code Ann. §§ 7-1-620 et seq. (Supp. 1985). Pan American Banks Inc., Miami, Florida, and Bankers Trust of 6. N.C. Gen. Stat. §§ 53-209 et seq. (Supp. 1984). South Carolina, Columbia, South Carolina. The Board is approving 7. First Wachovia Corporation, 71 FEDERAL RESERVE BULLETIN these applications in separate actions. 68 (Board Order dated November 4, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Federal Reserve Bulletin • January 1986 vant geographic markets in light of the Board's pro- given in accordance with section 3(b) of the Act. The posed guidelines for assessing the competitive effects time for filing comments has expired and the Board of market-extension mergers or acquisitions.8 In view has considered the application and all comments reof the existence of numerous other potential entrants ceived in light of the factors set forth in section 3(c) of from states within the southeastern interstate banking the Act (12 U.S.C. § 1842(c)). region into each of the markets served by Southern, Applicant is a nonoperating corporation with no the Board has concluded that consummation of the subsidiaries formed for the purpose of acquiring Bank. proposed transaction would not have any significant Bank is the 81st largest commercial bank in Wyoming, adverse effects on probable future competition in any with total deposits of $12.3 million, which represents relevant market. approximately 0.3 percent of total deposits in commer- The financial and managerial resources and future cial banks in the state.1 prospects of Applicant, Southern, and their subsidiar- Bank operates in the Platte County banking maries are considered satisfactory. Considerations relat- ket,2 where it is the third largest of five commercial ing to the convenience and needs of the communities banks, controlling 16.4 percent of total deposits in to be served also are consistent with approval. commercial banks. Principals of Applicant are not Based on the foregoing and other facts of record, the affiliated with any other depository organization in this Board has determined that this application should be, market. Consummation of this proposal would not and hereby is, approved. The transaction shall not be result in any adverse effects upon competition or consummated before the thirtieth calendar day follow- increase the concentration of banking resources in any ing the effective date of this Order, or later than three relevant area. Accordingly, the Board concludes that months after the effective date of this Order, unless competitive considerations under the Act are consissuch period is extended for good cause by the Board or tent with approval. by the Federal Reserve Bank of Richmond, acting The Board has indicated on previous occasions that pursuant to delegated authority. a bank holding company should serve as a source of By order of the Board of Governors, effective financial and managerial strength to its subsidiary November 27, 1985. bank and that the Board would closely examine the condition of an applicant in each case with this consid- Voting for this action: Vice Chairman Martin and Gover- eration in mind.3 In connection with this proposal, nors Partee, Rice, and Seger. Absent and not voting: Chair- Applicant would incur debt. Using projections based man Volcker and Governor Wallich. upon Bank's performance in recent years and other facts of record, the Board concludes that Applicant JAMES MCAFEE may not have sufficient financial flexibility to be able [SEAL] Associate Secretary of the Board to reduce its indebtedness in a satisfactory manner while maintaining adequate capital levels at Bank.4 Accordingly, based on these and other facts of record, Wheatland Bankshares, Inc. the Board concludes that considerations relating to Wheatland, Wyoming Applicant's financial and managerial resources and future prospects are adverse and weigh against ap- Order Denying Formation of a Bank Holding proval of this proposal. Company Applicant has proposed no new services for Bank upon consummation of this proposal. Considerations Wheatland Bankshares, Inc., Wheatland, Wyoming, relating to the convenience and needs of the communihas applied for the Board's approval under section ty to be served are consistent with, but lend no weight 3(a)(1) of the Bank Holding Company Act ("Act") toward, approval of this proposal. (12 U.S.C. § 1842(a)(1)) to become a bank holding company by acquiring all of the voting shares of American Bank of Wheatland, Wheatland, Wyoming ("Bank"). 1. Banking data are as of December 31, 1984. 2. The Platte County banking market is approximated by Platte Notice of the application, affording an opportunity County, Wyoming. for interested persons to submit comments, has been 3. See Northwest Wisconsin Banco, Inc., 71 FEDERAL RESERVE BULLETIN 105 (1985); Central Minnesota Bancshares, Inc., 70 FED- ERAL RESERVE BULLETIN 877 (1984). See also Singer & Associates, 8. "Proposed Policy Statement of the Board of Governors of the Inc., 70 FEDERAL RESERVE BULLETIN 883 (1984). Federal Reserve System for Assessing Competitive Factors Under the 4. The Board has previously stated that in small one-bank holding Bank Merger Act and the Bank Holding Company Act," 47 Federal company formations, it expects, among other things, that the bank Register 9017 (March 3, 1982). Although the proposed policy state- holding company's debt-to-equity ratio will be reduced to no more ment has not been approved by the Board, the Board has applied the than 30 percent within 12 years. "Policy Statement for Formation of criteria set forth in the proposed policy statement in its analysis of the Small One-Bank Holding Companies," 12 C.F.R. Part 225, Appendix eflFects of proposals on probable future competition. B. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 On the basis of all of the facts of record, the Board Applicant, with total consolidated assets equivalent concludes that the banking considerations involved in to $17.8 billion as of December 31, 1984, is the largest this proposal are adverse and are not outweighed by commercial bank in Austria. Applicant currently operany relevant competitive or convenience and needs ates a branch office in New York, New York, with considerations. Accordingly, it is the Board's judg- total deposits of $75.1 million and total assets of $248.9 ment that approval of the application would not be in million as of September 30, 1984. In addition, Applithe public interest and that the application should be, cant owns 2.5 percent of the shares of European and hereby is, denied for the reasons summarized American Bancorp, a domestic bank holding company above. also located in New York. Applicant does not own a By order of the Board of Governors, effective bank subsidiary in the United States. November 14, 1985. Company, an investment advisor registered with the Securities and Exchange Commission and with the Voting for this action: Chairman Volcker and Governors State of California Department of Corporations under Partee, Rice, and Seger. Absent and not voting: Governors applicable securities laws, provides portfolio invest- Martin and Wallich. ment advice to individuals, corporations, governments, and other institutions throughout the United JAMES MCAFEE States on both a discretionary and a non-discretionary [SEAL] Associate Secretary of the Board basis (but not including the exercise of any voting rights with respect to such shares). Company, with $1.1 billion in investment assets under its management Orders Issued Under Section 4 of the Bank as of June 30, 1985, possesses only a small share of the Holding Company Act highly competitive and nationwide market for investment advisory services. Creditanstalt-B ank verein In every case involving an acquisition by a bank Vienna, Austria holding company under section 4 of the Act, the Board considers the effect of the acquisition on the financial Order Approving Acquisition of Company Engaged condition and resources of the applicant. In evaluating in Investment Advisory Activities this application, the Board noted that the primary capital ratio of Applicant as publicly reported is well Creditanstalt-Bankverein, Vienna, Austria, a foreign below the Board's capital guidelines for U.S. multinabanking organization, has ^applied for the Board's tional bank holding companies. However, after reapproval, pursuant to section 4(c)(8) of the Bank viewing all the facts of record relating to the overall Holding Company Act ("Act") (12 U.S.C. financial condition of Applicant and its U.S. opera- § 1843(c)(8)), section 8 of the International Banking tions, including certain accounting adjustments to re- Act (12 U.S.C. § 3106), and section 225.23 of the flect U.S. banking practice, the Board has determined Board's Regulation Y (12 C.F.R. § 225.23), to acquire that the financial factors relating to this application are through its wholly owned subsidiary, Creditanstalt consistent with approval. In reaching this conclusion, American Corporation, 80 percent of the voting shares the Board also took into account the fact that the of McKenzie-Walker Investment Management, Inc. proposal involves the acquisition of a nonbank compa- ("Company"), Larkspur, California, and thereby en- ny and represents a relatively small investment by gage in investment advisory activities throughout the Applicant in what is essentially a service organization. United States. The provision of portfolio investment Before approving an application under section 4 of advice as proposed by Applicant is a permissible the Act to engage in an activity that the Board has nonbanking activity under section 4(c)(8) of the Act determined is closely related to banking, the Board and section 225.25(b)(4) of the Board's Regulation Y, must consider whether Applicant's performance of the 12 C.F.R. § 225.25(b)(4). Applicant is subject to the proposed activities can "reasonably be expected to requirements of section 4(c)(8) of the Act by virtue of produce benefits to the public, such as greater convethe fact that Applicant operates a branch in New York, nience, increased competition, or gains in efficiency, New York. 12 U.S.C. § 3106. that outweigh possible adverse effects, such as undue Notice of the application, affording interested per- concentration of resources, decreased or unfair comsons an opportunity to submit comments, has been petition, conflicts of interests, or unsound banking duly published. 50 Federal Register 33,413 (1985). The practices." 12 U.S.C. § 1843(c)(8). time for filing comments has expired, and the Board In that regard, Applicant has interests in certain has considered the application and all comments re- foreign companies that also provide investment advisceived in light of the public interest factors set forth in ory services. These entities, however, do not engage section 4(c)(8) of the Act. in investment advisory activities for U.S. customers or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Federal Reserve Bulletin • January 1986 with respect to American securities, nor do they Security Pacific Corporation derive any of their investment advisory business from Los Angeles, California the U.S. market. Company, in contrast, derives only a small amount of its business from the European mar- Order Approving Application to Engage in Data ket, where Applicant's other investment advisory in- Processing and Data Transmission Activities terests operate. Moreover, as indicated earlier, Company controls only a small share of the U.S. market for Security Pacific Corporation, Los Angeles, California, such investment advisory services. Accordingly, the a bank holding company within the meaning of the Board concludes that consummation of this proposal Bank Holding Company Act, 12 U.S.C. § 1841 et seq. would not have a significant adverse effect on existing ("BHC Act"), has applied pursuant to section 4(c)(8) or potential competition in any relevant market. of the BHC Act and section 225.23(a)(1) of the Board's Based on the facts of record, including commit- Regulation Y (12 C.F.R. § 225.23(a)(1)), to acquire 25 ments made by Applicant regarding the conduct of the percent of the voting shares of XCEL Business Sysproposed activities, there is no evidence in the record tems, Inc. ("Company"), Mill Valley, California, a that consummation of this proposal would result in de novo joint venture. The remaining 75 percent of the adverse effects, such as unsound banking practices, shares of Company will be owned by General Automaunfair competition, conflicts of interest, or an undue tion, Inc. ("GAI") (37.5 percent), Bankline, Inc. concentration of resources. ("BI") (18.75 percent) and Mr. Alan Horton-Bentley Applicant expects upon consummation of the pro- (18.75 percent). Company proposes to engage in the posal to broaden the services that Company provides activity of providing data processing and transmission to include advice on foreign securities. In turn, Appli- services, facilities (including data processing and data cant's customers would obtain increased access to transmission hardware, software, documentation or information on U.S. securities markets. Consumma- operating personnel), and data bases. These activities tion of the proposal would increase the number of have been determined by the Board to be closely firms in the U.S. capable of offering advice on interna- related to banking and permissible for bank holding tional investments. The public benefits associated with companies (12 C.F.R. § 225.25(b)(7)). the proposal, therefore, are also consistent with ap- Notice of the application, affording interested perproval. sons an opportunity to submit comments, has been Based upon the foregoing and the facts of record, duly published, 50 Federal Register 31,658 (1985). The the Board concludes that the balance of public interest time for filing comments has expired, and the Board factors it must consider under section 4(c)(8) of the has considered the application and all comments re- Act is favorable. Accordingly, the application should ceived in light of the public interest factors set forth in be and hereby is approved. This determination is section 4(c)(8) of the BHC Act. subject to all of the conditions set forth in the Board's Applicant is the ninth largest banking organization Regulation Y, including those in sections 225.4(d) and in the United States, controlling consolidated assets of 225.23(b), and the Board's authority to require such $45.2 billion. Applicant's primary bank subsidiary, modification or termination of the activities of a bank Security Pacific National Bank, Los Angeles, Califorholding company or any of its subsidiaries as the nia, is the second largest bank in the state of Califor- Board finds necessary to assure compliance with the nia, with total domestic deposits of $23.7 billion, provisions and purposes of the Act and the Board's representing 12.4 percent of the total deposits in regulations and orders issued thereunder, or to pre- commercial banks in the state of California.1 Applicant vent evasion thereof. also is engaged through nonbank subsidiaries in vari- The proposed activities shall be commenced not ous nonbanking activities, including consumer and later than three months after the effective date of this commercial finance, leasing, trust services, mortgage Order, unless such period is extended by the Board or banking and industrial banking. by the Federal Reserve Bank of New York, acting Company intends to market an integrated data propursuant to delegated authority. cessing system, which includes a financial software By order of the Board of Governors, effective package and related hardware, to financial institutions November 7, 1985. throughout the United States. This proposal has been structured as a joint venture to take advantage of the Voting for this action: Chairman Volcker and Governors complementary resources and experience of GAI, BI Martin, Partee, and Rice. Absent and not voting: Governors and Applicant. GAI is a supplier of computer products Wallich and Seger. (hardware); BI developed the software that will be part JAMES MCAFEE [SEAL] Associate Secretary of the Board 1. All banking data are as of March 31, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 65 of Company's system and will be responsible for consummation of this proposal would result in adverse training, support and maintenance of the software effects such as unsound banking practices, unfair used by Company. Applicant has a thorough knowl- competition, conflicts of interests or an undue concenedge of the operations and data processing needs of tration of resources. financial institutions which is important to the success Based upon the foregoing and all the facts of record, of Company's marketing efforts. the Board has determined that the balance of public Company anticipates that its primary market will interest factors it is required to consider under section consist of financial and banking institutions with assets 4(c)(8) is favorable. Accordingly, the application is of less than $100 million. Such banking institutions hereby approved. This determination is subject to all frequently use outside service bureaus to meet their of the conditions set forth in the Board's Regulation Y, data processing needs. Company's product will allow including those in section 225.4(d) and 225.23(b), and these institutions to meet their data processing needs to the Board's authority to require modification or with in-house systems. Thus, the joint venture would termination of the activities of the holding company or provide an additional source of competition in this any of its subsidiaries as the Board finds necessary to field and permit the banks to choose between in-house assure compliance with the provisions and purposes of and external data processing facilities. the BHC Act and the Board's regulations and orders Because this proposal involves the use of a joint issued thereunder, or to prevent evasion thereof. venture between a bank holding company and a non- This transaction shall not be consummated later banking company, the Board has analyzed the propos- than three months after the effective date of this al with respect to its effects on existing and potential Order, unless such period is extended for good cause competition between Applicant and its co-venturers in by the Board, or by the Federal Reserve Bank of San the market for data processing and data transmission Francisco, pursuant to delegated authority. services.2 BI is a wholly owned subsidiary of Hale By order of the Board of Governors, effective Systems, Inc. ("Hale"), which offers an integrated November 25, 1985. data processing system for financial institutions which is similar to Company's and uses various hardware Voting for this action: Vice Chairman Martin and Govercomponents including hardware manufactured by nors Partee, Rice, and Seger. Absent and not voting: Chair- GAI. The Board notes, however, that Hale's share of man Volcker and Governor Wallich. the market is de minimis. Applicant also markets a similar system to financial institutions in 14 western JAMES MCAFEE states through a subsidiary of Security Pacific State [SEAL] Associate Secretary of the Board Bank. Applicant's system, however, costs nearly twice as much as Company's, is marketed to banking institutions with assets in excess of $100 million and is Orders Issued Under Sections 3 and 4 of the not expected to be competitive with Company's prod- Bank Holding Company Act uct. In the market in which the joint venture will compete, Applicant and the co-venturers combined Bank of Virginia Company currently control less than one percent of the market. Richmond, Virginia The Board also notes that the data processing market is unconcentrated with few barriers to entry. Accord- Order Approving Acquisition of a Bank Holding ingly, the Board concludes that consummation of this Company proposal would not have a significant adverse effect on either existing or potential competition in any relevant Bank of Virginia Company, Richmond, Virginia, a market. bank holding company within the meaning of the Bank Financial and managerial considerations are consis- Holding Company Act (12 U.S.C. §§ 1841 et seq.) tent with approval of this proposal. Applicant's invest- ("Act"), has applied for the Board's approval under ment is not significant in relation to Applicant's assets. section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to Moreover, there is no evidence in the record that acquire Union Trust Bancorp, Baltimore, Maryland ("UTB"). As a result of the acquisition, Applicant would acquire indirectly UTB's wholly owned subsidiary bank, Union Trust Company of Maryland, Balti- 2. The Board has previously indicated its concerns regarding the potential for undue concentration of resources that could result from more, Maryland. the combination in a joint venture of banking and nonbanking institu- Applicant has also applied for the Board's approval tions. The Board is also concerned that joint ventures not lead to a matrix of relationships that could undermine the legally-mandated under section 4(c)(8) of the Act (12 U.S.C. separation of banking and commerce. See e.g., Amsterdam-Rotter- § 1843(c)(8)) and section 225.23(f) of the Board's Regdam Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984); Deutulation Y (12 C.F.R. § 225.23(f)) to acquire UTB's sche Bank AG, 67 FEDERAL RESERVE BULLETIN 449 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 1986 nonbanking subsidiary, Landmark Financial Services, bank located in other states in a defined southeastern Inc., Silver Spring, Maryland ("Landmark"), a com- region, including Virginia.4 Such acquisitions are perpany that engages in making installment loans to mitted if the laws of the acquiring institution's home individuals for personal, family or household pur- state permit the acquisition of a bank in that state by a poses; purchasing sales contracts executed in connec- Maryland bank holding company on a reciprocal bation with the sale of personal, family or household sis.5 Virginia has enacted a similar reciprocal statute,6 goods or services; making loans secured in whole or in which permits the acquisition of a Virginia bank by a part by mortgages or other liens on real estate; and bank holding company located in Maryland. acting as agent and underwriter for the sale of credit Based on its review of the relevant Maryland and life and credit accident and health insurance directly Virginia statutes, the Board has determined that the related to extensions of credit. These activities have Virginia statute satisfies the conditions of the Marybeen determined by the Board to be closely related to land regional interstate banking statute and that Marybanking and permissible for bank holding companies, land has by statute expressly authorized a Virginia 12 C.F.R. § 225.25(b)(1), (8), (9). bank holding company, such as Applicant, to acquire a Notice of the applications, affording an opportunity Maryland bank or bank holding company, such as for interested persons to submit comments, has been UTB. The Maryland Banking Commissioner agrees given in accordance with sections 3 and 4 of the Act that the Virginia statute satisfies the reciprocity re- (50 Federal Register 34,753 (1985)). The time for filing quirements of the Maryland interstate banking provicomments has expired, and the Board has considered sions. Accordingly, the Board concludes that approval the applications and all comments received in light of of Applicant's proposal to acquire banks in Maryland the factors set forth in section 3(c) of the Act and the is authorized under Maryland law and is not barred by considerations specified in section 4(c)(8) of the Act.1 the Douglas Amendment. Applicant is the fourth largest commercial banking Since Applicant's subsidiary bank does not operate organization in Virginia. Its one subsidiary bank con- in Maryland, and UTB's subsidiary bank does not trols total domestic deposits of approximately $2.9 operate in Virginia, consummation of the proposed billion, representing 9.5 percent of the total deposits in acquisition would have no effect on existing competicommercial banks in Virginia.2 UTB, the sixth largest tion in any Maryland or Virginia market. However, commercial banking organization in Maryland, has Applicant and UTB compete directly in the Washingone subsidiary bank that controls aggregate domestic ton, D.C. banking market.7 Applicant is the 12th deposits of approximately $1.4 billion, representing largest of 71 commercial banking organizations in this 6.7 percent of the total deposits in commercial banks market, controlling 2.2 percent of total market deposin Maryland. its in commercial banks. UTB is the 20th largest Section 3(d) of the Act (12 U.S.C. § 1842(d)), the commercial banking organization in the market, con- Douglas Amendment, prohibits the Board from ap- trolling 0.8 percent of the total deposits in commercial proving an application by a bank holding company to banks. Upon consummation of the proposal, Appliacquire control of any bank located outside of the cant would become the 11th largest commercial bankholding company's home state,3 unless such acquisi- ing organization in the market, controlling 3.1 percent tion is "specifically authorized by the statute laws of of total deposits in commercial banks in the market. the state in which such bank is located, by language to While consummation of the proposal would elimithat effect and not merely by implication." The statute nate some existing competition in the Washington, laws of Maryland authorize the acquisition of a bank in D.C. banking market, the Board believes that this Maryland by a bank holding company that controls a competitive effect is not significant. The Board notes that the market is unconcentrated, and that upon consummation, the Herfindahl-Hirschman Index ("HHI") would increase by only four points to 686 after consummation of the acquisition.8 1. The Board received comments from the National Association of Life Underwriters and National Association of Professional Insurance Agents concerning the activities of Landmark, which Applicant would acquire indirectly. The Board has determined that Landmark's activi- 4. Md. Ann. Code art. 5, § 1001 et seq. (Supp. 1985). ties conform to the requirements of the Act and Regulation Y, 5. Md. Ann. Code art. 5, § 1003(a)(2) (Supp. 1985). 12 C.F.R. § 225.25, and that Landmark's proposed activities, as 6. Va. Code § 6.1-398 et seq. (Supp. 1985). described by Applicant, would continue to conform to the Act and 7. The Washington, D.C. banking market is defined by the Wash- Regulation Y following consummation of this transaction. ington, D.C. Ranally Metropolitan area. 2. Banking data are as of June 30, 1984. 8. Under the U.S. Department of Justice "Merger Guidelines," as 3. A bank holding company's home state is that state in which the revised in 1984, a market in which a post-merger HHI is below 1000 is operations of the bank holding company's banking subsidiaries were unconcentrated. The Department of Justice has stated that it will not principally conducted on July 1, 1966, or the date on which the challenge any merger producing an HHI below 1000, except in company became a bank holding company, whichever is later. extraordinary circumstances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 The Board has also examined the effect of Appli- acquisition of UTB's nonbanking subsidiary would not cant's acquisition of UTB on probable future competi- significantly affect existing or probable future competition in the relevant geographic markets in light of the tion in any relevant market. Furthermore, there is no Board's proposed guidelines for assessing the compet- evidence in the record to indicate that approval of this itive effects of market-extension mergers or acquisi- proposal would result in undue concentration of retions.9 In view of the existence of numerous other sources, unfair competition, conflicts of interests, potential entrants into each of the markets served by unsound banking practices, or other adverse effects on UTB or Applicant, the Board has concluded that the public interest. Accordingly, the Board has deterconsummation of the proposed transaction would not mined that the balance of the public interest factors it have any significant adverse effects on probable future must consider under section 4(c)(8) of the Act is competition in any relevant market. favorable and consistent with approval of the applica- The financial and managerial resources and future tion to acquire UTB's nonbanking subsidiary. prospects of Applicant, UTB, and their respective Based on the foregoing and other facts of record, the subsidiaries are consistent with approval of the appli- Board has determined that the applications under cation. Considerations relating 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 UTB's subsidiary banks tent with approval. shall not be consummated before the thirtieth calendar Applicant has also applied, pursuant to section day following the effective date of this Order, and 4(c)(8) of the Act, to acquire Landmark, a nonbanking neither the banking acquisition nor the nonbanking company that engages in the mortgage lending, con- acquisition shall occur later than three months after sumer lending, and credit related insurance activities the effective date of this Order, unless such period is described above. Applicant currently engages in these extended for good cause by the Board or by the activities through its lead bank, Bank of Virginia, and Federal Reserve Bank of Richmond, acting pursuant its subsidiaries, Bank of Virginia Mortgage Corpora- to delegated authority. The determination with respect tion and Bank of Virginia Second Mortgage Corpora- to Applicant's acquisition of Landmark is subject to all tion. of the conditions set forth in Regulation Y, including In the markets for mortgage originations, consumer sections 225.4(d) and 225.23(b) (12 C.F.R. §§ 225.4(d) installment loans, and credit insurance, this proposal and 225.23(b)), and to the Board's authority to require would eliminate existing competition between UTB such modifications or termination of activities of a and Bank of Virginia in the Washington, D.C., Rich- bank holding company or any of its subsidiaries as the mond, and Tidewater, Virginia, markets.10 However, Board finds necessary to assure compliance with, and in each case, the market for this product is unconcen- prevent evasions of, the provisions and purposes of trated, with numerous bank and nonbank competitors, the Act and the Board's regulations and orders issued and few barriers to entry. Moreover, the overlapping thereunder. market share for mortgage originations, consumer By order of the Board of Governors, effective installment loans, and credit insurance is not substan- November 27, 1985. tial in any relevant market. Accordingly, the proposed acquisition would not have a significant adverse effect Voting for this action: Vice Chairman Martin and Goveron competition for mortgage lending, consumer lend- nors Partee, Rice, and Seger. Absent and not voting: Chairing, or the underwriting and sale of credit insurance in man Volcker and Governor Wallich. any relevant market. After consideration of the above facts and other JAMES MCAFEE facts of record, the Board concludes that Applicant's [SEAL] Associate Secretary of the Board Colson, Inc. 9. "Proposed Policy Statement of the Board of Governors of the Federal Reserve System for Assessing Competitive Factors Under the Wilmington, Delaware Bank Merger Act and the Bank Holding Company Act," 47 Federal Register 9017 (1982). While the proposed policy statement has not Order Approving the Formation of a Bank Holding been adopted by the Board, the Board has applied the criteria set forth in the proposed policy statement in its analysis of the effects of Company and Acquisition of a Mortgage Company proposals on probable future competition. 10. The Washington, D.C. market is approximated by the Washington, D.C. Ranally Metropolitan Area. The Richmond market is Colson, Inc., Wilmington, Delaware, has applied for defined as the Richmond Ranally Metropolitan Area. The Tidewater, the Board's approval under section 3(a)(1) of the Bank Virginia, market is defined as the Newport News Ranally Metropoli- Holding Company Act ("Act") (12 U.S.C. § 1842 tan Area, the Norfolk-Portsmouth Ranally Metropolitan Area, and Currituck County, North Carolina. (a)(1)) to become a bank holding company by acquiring Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Bulletin • January 1986 72.5 percent of the outstanding voting shares of Wash- The Board has also considered Applicant's proposal ington Bancorporation, Washington, D.C. ("Compa- to indirectly acquire Mortgage Company and engage in ny"), and thereby to acquire indirectly The National mortgage banking activities. There is no evidence in Bank of Washington, Washington, D.C. ("Bank"). the record to indicate that approval of the transaction Applicant also has applied under section 4(c)(8) of the would result in undue concentration of resources, Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the decreased or unfair competition, conflicts of interest, Board's Regulation Y (12 C.F.R. § 225.23)) to acquire unsound banking practices, or other adverse effects on Washington Mortgage Group, Inc., Vienna, Virginia the public interest. Accordingly, the Board has deter- ("Mortgage Company"), a nonbanking subsidiary of mined that the balance of public interest factors it must Company engaged in mortgage banking activities. consider under section 4(c)(8) is consistent with ap- Such activities are permissible pursuant to section proval of the transaction. 225.25(b)(1) of the Regulation Y. Based on the foregoing and other facts of record, the Notice of the applications, affording opportunity for Board has determined that the applications under interested persons to submit comments, has been sections 3 and 4 of the Act should be, and hereby are, given in accordance with sections 3 and 4 of the Act approved. The acquisitions shall not be consummated (50 Federal Register 36,484 (1985)). The time for filing before the thirtieth calendar day following the effective comments has expired, and the Board has considered date of this Order, or later than three months after the the applications and all comments received in light of effective date of this Order, unless the latter period is the factors set forth in section 3(c) of the Act and the extended for good cause by the Board or the Federal considerations specified in section 4(c)(8) of the Act. Reserve Bank of Richmond, acting pursuant to dele- Applicant is a nonoperating corporation formed for gated authority. The determination with respect to the sole purpose of acquiring Company.1 Bank is Applicant's proposal to acquire Mortgage Company is Company's only banking subsidiary. Bank is the third subject to the conditions set forth in Regulation Y, largest commercial bank in Washington, D.C., con- including sections 225.4(d) and 225.23(b) (12 C.F.R. trolling total deposits of $953 million, representing 10.4 §§ 225.4(d) and 225.23(b)), and to the Board's authorpercent of the total deposits in commercial banks in ity to require such modification or termination of Washington, D.C.2 Bank operates in the Washington activities of a holding company and any of its subsidbanking market,3 where it is the seventh largest of 71 iaries as the Board finds necessary to assure compliance with the Act and the Board's regulations and commercial banks, controlling 4.4 percent of total deposits in commercial banks in the market.4 Consum- orders issued thereunder, or to prevent evasion thereof. mation of the transaction would not result in the concentration of banking resources or in any signifi- By order of the Board of Governors, effective cant adverse competitive effects in any relevant geo- November 29, 1985. graphic area. The financial and managerial resources and future Voting for this action: Vice Chairman Martin and Goverprospects of Applicant, Company, and Bank are con- nors Partee, Rice, and Seger. Absent and not voting: Chairman Volcker and Governor Wallich. sidered generally satisfactory and consistent with approval of the transaction. Applicant has proposed no new services for Bank upon consummation of the JAMES MCAFEE transaction. However, there is no evidence in the [SEAL] Associate Secretary of the Board record that the banking needs of the community to be served are not being met. Accordingly, considerations relating to the convenience and needs of the communi- First Wachovia Corporation ty to be served are consistent with approval of the Winston-Salem, North Carolina transaction. Order Approving Formation of a Bank Holding Company and Acquisition of Nonbanking Companies 1. In a related action, the Board today approved the application by First Wachovia Corporation, Winston-Salem, North Washington National Holdings N.V., Curacao, Netherlands Antilles, Carolina, has applied for the Board's approval under a nonoperating company formed by two foreign investors to hold shares of Applicant, to become a bank holding company by acquiring section 3(a)(1) of the Bank Holding Company Act 37.5 percent of the voting shares of Applicant. (12 U.S.C. § 1842(a)(1)) ("Act") to become a bank 2. Banking data for Washington, D.C., are as of December 31, 1984. holding company by acquiring all of the voting shares 3. The Washington banking market is defined as the Washington of Wachovia Corporation, Winston-Salem, North Car- Ranally Metro Area. olina ("Wachovia"), and First Atlanta Corporation, 4. Banking data for the Washington banking market are as of June 30, 1984. Atlanta, Georgia ("First Atlanta"), both of which are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 bank holding companies. As a result of the acquisition, Wachovia's and First Atlanta's credit-related property Applicant would acquire indirectly Wachovia's sub- and casualty insurance activities are permissible under sidiary bank, Wachovia Bank and Trust Company, section 4(c)(8)(D) of the Act (12 U.S.C. § 1843(c)(8)(D)). N.A., Winston-Salem, North Carolina, and First At- Notice of these applications, affording opportunity lanta's three subsidiary banks: The First National for interested persons to submit comments, has been Bank of Atlanta, Atlanta, Georgia; The First National given in accordance with sections 3 and 4 of the Act Bank of Dalton, Dalton, Georgia; and First Bank of (50 Federal Register 33,107 (1985)). The time for filing Savannah, Savannah, Georgia. comments has expired, and the Board has considered Applicant has also applied for the Board's approval the applications and all comments received in light of under section 4(c)(8) of the Act (12 U.S.C. the factors set forth in section 3(c) of the Act and the § 1843(c)(8)) and section 225.23 of the Board's Regula- considerations specified in section 4(c)(8) of the Act. tion Y (12 C.F.R. § 225.23), to acquire the following Wachovia is the largest commercial banking organinonbanking subsidiaries of Wachovia and First Atlan- zation in North Carolina. Its one subsidiary bank holds ta: total domestic deposits of $6.0 billion, representing 1. Wachovia Mortgage Company, Winston-Salem, 20.9 percent of the total deposits in commercial banks North Carolina ("WMC"), which engages generally in North Carolina.2 First Atlanta is the second largest in mortgage banking activities, and in the sale, as commercial banking organization in Georgia. Its three agent, of credit-related life, hospital, disability, and subsidiary banks hold total domestic deposits of $4.5 accident and health insurance, and in the sale, as billion, representing 15.2 percent of the total deposits agent, of property and casualty insurance directly in commercial banks in Georgia. related to extensions of credit; Section 3(d) of the Act (12 U.S.C. § 1842(d)), the 2. Wachovia Services, Inc., Winston-Salem, North Douglas Amendment, prohibits the Board from ap- Carolina, which engages in data processing activi- proving an application by a bank holding company to ties, acquiring and servicing student loans, and acquire control of any bank located outside of the acting as investment or financial adviser to state and holding company's home state,3 unless such acquisilocal governments and other entities in connection tion is "specifically authorized by the statute laws of with the acquisition and servicing of student loans; the State in which such bank is located, by language to 3. Financial Life Insurance Company of Georgia, that effect and not merely by implication." The statute Atlanta, Georgia, which engages in the underwrit- laws of Georgia authorize the acquisition of a bank in ing, as reinsurer, of life, accident and health insur- Georgia by a bank holding company that controls a ance directly related to extensions of credit by First bank located in other states in a defined southeastern Atlanta and its subsidiaries; region, including North Carolina.4 Such acquisitions 4. First Atlanta Leasing Company, Atlanta, Geor- are permitted if the laws of the acquiring institution's gia, which was organized to hold leases acquired home state would permit on a reciprocal basis the from other First Atlanta subsidiaries and is currently acquisition of the acquiror banking organization by a in the process of liquidation; Georgia banking organization.5 North Carolina has 5. First Atlanta Mortgage Corporation, Atlanta, enacted a similar reciprocal statute,6 which permits Georgia ("FAMC"), which engages generally in the acquisition of a North Carolina bank by a bank mortgage banking activities, in arranging equity holding company located in Georgia. financing, and in the sale, as agent, of property and Based on its review of the relevant Georgia and casualty insurance directly related to extensions of North Carolina statutes, the Board has determined credit; and, that the North Carolina statute satisfies the conditions 6. Tharpe & Brooks of Florida, Atlanta, Georgia, of the Georgia regional interstate banking statute and which was formed for the purpose of making loans that Georgia has by statute expressly authorized a secured by real estate and servicing loans in Florida, North Carolina bank holding company, such as Appliis currently in the process of liquidation and has no cant, to acquire a Georgia bank or bank holding assets on its balance sheet. company, such as First Atlanta.7 Accordingly, the The activities of these subsidiaries are permissible pursuant to sections 225.25(b)(1), (3), (4), (5), (7), (8), 2. Banking data are as of December 31, 1984. (9), and (14) of the Board's Regulation Y, and the 3. A bank holding company's home state is that state in which the Board's Order determining that servicing of student operations of the bank holding company's banking subsidiaries were loans is closely related to banking.1 In addition, both principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. Applicant's home state is North Carolina. 4. Ga. Code Ann. §§ 7-1-620 et seq. (Supp. 1985). 1. The Wachovia Corporation, 71 FEDERAL RESERVE BULLETIN 5. Ga. Code Ann. § 7-l-621(c). Digitized 7fo25r F(1R98A5)S. ER 6. N.C. Gen. Stat. §§ 53-209 et seq. (Supp. 1984). http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Bulletin • January 1986 Board concludes that approval of Applicant's proposal originations,9 this proposal would eliminate existing to acquire banks in Georgia is not barred by the competition between WMC and FAMC in the Atlanta, Douglas Amendment. Georgia, market.10 However, the market for this prod- The Board has carefully considered the effects of the uct is unconcentrated, with numerous bank and nonproposal upon competition in the relevant banking bank competitors and few barriers to entry. Moreover, markets. The proposal involves the combination of WMC's and FAMC's market shares of residential two sizeable commercial banking organizations that mortgage originations are not substantial in the Atlanta are among the larger banking organizations in their market. respective states. However, because the banking sub- The markets for mortgage servicing, construction sidiaries of Wachovia and First Atlanta operate in lending, and the origination of non-residential and separate banking markets, consummation of the pro- multi-family residential mortgage loans are national in posal would not eliminate significant existing competi- scope.11 WMC's and FAMC's market shares in each tion in any relevant market. of these product markets are de minimis, and the The Board has also examined the effect of the markets are unconcentrated, with a large number of proposal on probable future competition in the rele- bank and nonbank participants. Accordingly, the comvant geographic markets and has examined the pro- bination of WMC and FAMC would have no signifiposal in light of the Board's probable future competi- cant effect on competition in these product markets. tion guidelines.8 After consideration of these factors in After consideration of the above facts and other light of the specific facts of this case, the Board has facts of record, the Board concludes that Applicant's concluded that consummation of this proposal would acquisition of WMC and FAMC would not significantnot have any significant adverse effects on probable ly affect competition in any relevant area. Applicant's future competition in any relevant market. In this acquisition of Wachovia's and First Atlanta's other regard, the Board notes that there are numerous other nonbanking subsidiaries would not have any material potential entrants from states within the southeastern effect on competition in their respective product marinterstate banking region into each of the markets kets. Furthermore, there is no evidence in the record served by Wachovia or First Atlanta. to indicate that approval of this proposal would result The financial and managerial resources and future in undue concentration of resources, unfair competiprospects of Applicant, Wachovia, First Atlanta, and tion, conflicts of interests, unsound banking practices, their subsidiaries are considered satisfactory. Consid- or other adverse effects on the public interest. Accorderations relating to the convenience and needs of the ingly, the Board has determined that the balance of the communities to be served are also consistent with public interest factors it must consider under section approval. 4(c)(8) of the Act is favorable and consistent with Applicant has also applied, pursuant to section approval of the application to acquire Wachovia's and 4(c)(8) of the Act, to acquire WMC and FAMC, First Atlanta's nonbanking subsidiaries.12 nonbanking companies that engage in mortgage bank- Based on the foregoing and other facts of record, the ing activities, including originating and servicing residential real estate loans and in making other mortgage loans and construction loans. Wachovia currently engages in mortgage banking activities from offices in 9. This product market has been determined to be local in scope. North Carolina, South Carolina, Georgia, Florida, and See, e.g., NBD Bancorp, Inc., 71 FEDERAL RESERVE BULLETIN 258, 261 (1985). Virginia. WMC has two offices in Atlanta, Georgia, 10. The Atlanta, Georgia, market is defined as the Ranally Metrowhere all of FAMC's offices are located. politan Area for that city. 11. See, NBD Bancorp, Inc., 71 FEDERAL RESERVE BULLETIN 258, In the market for one- to four-family mortgage 261 (1985). 12. Applicant has applied to engage in the sale of credit-related property and casualty insurance through its acquisition of WMC and FAMC. WMC currently engages in these activities through offices in North Carolina, Georgia, South Carolina, Florida, and Virginia. FAMC engages in these activities from offices in Atlanta, Georgia. Under Title VI of the Garn-St Germain Depository Institutions Act of 7. The Georgia interstate banking statute requires the approval of 1982 (now codified as section 4(c)(8)(D) of the BHC Act), WMC and the Georgia Banking Commissioner before a bank holding company in FAMC each may continue to engage in their respective credit-related the southeastern region may acquire a Georgia bank. On October 28, property and casualty insurance agency activities in those states in 1985, the Georgia Banking Commissioner approved Applicant's acqui- which they are now located because Wachovia and First Atlanta each sition of First Atlanta. obtained the Board's approval for such activities under the Act before 8. See, "Proposed Policy Statement of the Board of Governors of May 1, 1982. Applicant does not seek approval for Wachovia or First the Federal Reserve System for Assessing Competitive Factors Under Atlanta or their present subsidiaries to expand in any manner or merge the Bank Merger Act and the Bank Holding Company Act," 47 the existing previously-approved insurance activities of Wachovia or Federal Register 9017 (March 3, 1982). Although the proposed policy First Atlanta. The Board concludes that, under section 4(c)(8)(D) of statement has not been approved by the Board, the Board has applied the Act (12 U.S.C. § 1843(c)(8)(D)), WMC and FAMC may continue the criteria set forth in the proposed policy statement in its analysis of to engage in their existing credit-related property and casualty insur- Digitized for FRA th S e E ef R fe cts of proposals on probable future competition. ance activities after consummation of this proposal. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 Board has determined that the applications under tion and selling and disposing of such stock, provided sections 3 and 4 of the Act should be and hereby are that (unless otherwise authorized by the Board) no approved. The transaction shall not be consummated such investment shall exceed 5 percent of the voting before the thirtieth calendar day following the effective securities of any corporation; and operating a foreign date of this Order, or later than three months after the branch at Grand Cayman, Cayman Islands, and engageffective date of this Order, unless such period is ing at that office in transactions of the type that it can extended for good cause by the Board or by the engage in at its home office. In addition, IBJ has Federal Reserve Bank of Richmond, acting pursuant applied to acquire indirectly shares of J. Henry to delegated authority. The determination with respect Schroder International Bank, Miami, Florida, a corpoto Applicant's acquisition of Wachovia's and First ration chartered pursuant to section 25(a) of the Feder- Atlanta's nonbanking subsidiaries is subject to all the al Reserve Act (the "Edge Act") (12 U.S.C. §611 conditions set forth in Regulation Y, including sections et seq.) and owned by Bank. 225.4(d) and 225.23(b) (12 C.F.R. §§ 225.4(d) and Notice of the applications, affording interested per- 225.23(b)), and to the Board's authority to require sons opportunity to submit comments, has been given such modifications or termination of activities of a in accordance with sections 3 and 4 of the Act. The bank holding company or any of its subsidiaries as the time for filing comments has expired, and the Board Board finds necessary to assure compliance with the has considered the applications and all comments provisions and purposes of the Act and the Board's received in light of the factors set forth in section 3(c) regulations and order issued thereunder, or to prevent of the Act, the considerations specified in section evasion thereof. 4(c)(8) of the Act, and the purposes of the Edge Act. By order of the Board of Governors, effective IBJ, with total assets equivalent to approximately November 4, 1985. $85.7 billion, is the largest of three long-term credit banks in Japan and the fifteenth largest banking orga- Voting for this action: Chairman Volcker and Governors nization in the world.1 IBJ operates 23 branches in Martin, Partee, Rice, and Seger. Absent and not voting: Japan and operates five branches, twenty-three repre- Governor Wallich. sentative offices, eight subsidiaries and one agency internationally. In the United States, IBJ operates a JAMES MCAFEE branch in New York with total assets of approximately [SEAL] Associate Secretary of the Board $4.5 billion and an agency in Los Angeles with total assets of approximately $2.1 billion. In addition, IBJ owns all of the outstanding voting shares of Industrial The Industrial Bank of Japan, Ltd. Bank of Japan Trust Company, New York, New York, Tokyo,Japan with total assets of approximately $2.6 billion. Applicant has selected New York as its home state under Order Approving the Acquisition of a Bank Holding the Board's Regulation K (12 C.F.R. § 211.22(b)). Company Bank, with total assets of approximately $1.9 billion, is the 24th largest commercial bank in New York The Industrial Bank of Japan, Ltd. ("IBJ"), Tokyo, State. Currently, over 95 percent of the outstanding Japan, a registered bank holding company, has applied voting shares of Bank are owned by Schroders pic, for Board approval under section 3 of the Bank London, England, a registered bank holding company. Holding Company Act (the "Act") (12 U.S.C. § 1842) IBJ proposes to acquire immediately 51 percent of the to acquire up to 75.1 percent of the voting shares of J. voting shares of Bank from Schroders pic, and to Henry Schroder Bank & Trust Company, New York, acquire approximately an additional 24 percent of New York ("Bank"). IBJ has also applied under Bank within 18 months of the initial purchase of section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) to shares. acquire up to 75.1 percent of the voting shares of J. Section 3(c) of the Act requires in every case that Henry Schroder Banking Corporation ("JHSBC"), the Board consider the financial resources of the New York, New York, an investment company char- applicant organization and the bank or bank holding tered under Article XII of the New York Banking Law company to be acquired. As the Board has previously ("New York Investment Company"), and through stated, review of the financial resources of foreign JHSBC to engage in the following activities: commer- banking organizations raises a number of complex cial lending; issuing letters of credit; purchasing and discounting acceptances; buying and selling foreign exchange; receiving and maintaining credit balances in connection with international trade; purchasing, acquiring, investing in and holding stock of any corpora- 1. All banking data as of March 31, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • January 1986 issues that the Board believes require careful consider- control a relatively small share of the market for ation and that the Board continues to have under commercial banking services in Metropolitan New review.2 In this regard, the Board has initiated consul- York. Upon consummation of the proposed acquisitations with appropriate foreign bank supervisors and tion, Applicant would control approximately 1.18 pernotes that work is currently in progress among foreign cent of the deposits held by commercial banks in the and domestic bank supervisory officials to develop Metropolitan New York banking market. Accordingly, more fully the concept of functional equivalency of the Board has determined that consummation of this capital ratios for banks of different countries. Pending proposal would not have significant adverse effects on the outcome of these consultations and deliberations, existing or potential competition in New York or in the Board has determined to consider the issues raised any relevant banking market. The Board has also by applications by foreign banks to acquire domestic determined that considerations regarding the convebanks on a case-by-case basis. nience and needs of the communities to be served are In this case, the Board notes that the primary capital consistent with approval of this application. ratio of Applicant as publicly reported is below the In acting on IBJ's application to acquire JHSBC, the minimum capital guidelines established by the Board Board must first determine that these activities are for U.S. bank holding companies. While the Board closely related to banking or managing or controlling regards this as a negative factor, the Board notes that banks. The Board has previously determined by order Applicant is in compliance with the capital and other that ownership and operation of a New York Investfinancial requirements of the appropriate supervisory ment Company is closely related to banking.4 In authorities in Japan and that Applicant's resources and making that determination, the Board considered the prospects are viewed as satisfactory by those authori- unique statutory powers of New York Investment ties. Applicant also has historically experienced rela- Companies and the fact that the lending and banking tively low loan losses and a strong liquidity position. activities involved were generally offered by commer- In addition, Applicant has a substantial and relatively cial banks. In this case, the activities proposed by stable funding base of government and corporate de- Applicant are substantially similar to those authorized posits and medium- and long-term debentures that, as by order in previous Board decisions. In light of this a long-term credit bank, Applicant is permitted to and other facts of record, the Board believes that the issue under Japanese law. The Board has also consid- proposed activities of JHSBC are closely related to ered other information regarding the financial condibanking for purposes of section 4 of the Act. tion of Applicant, including its substantial portfolio of In acting on applications under section 4 of the Act, securities of publicly held Japanese companies carried the Board is required to determine whether the peron Applicant's books at cost, which is substantially formance of proposed activities by an applicant "can below their current market value. Finally, the Board reasonably be expected to produce benefits to the notes that Applicant's current U.S. operations are public, such as greater convenience, increased compesatisfactory. tition, or gains in efficiency that outweigh possible The Board expects that Applicant will maintain adverse effects, such as undue concentration of re- Bank as among the more strongly capitalized banking sources, decreased or unfair competition, conflicts of organizations of comparable size in the United States. interests, or unsound banking practices." (12 U.S.C. Based on these and all of the other facts of record, the § 1843(c)(8)). Board concludes that the financial and managerial Applicant's proposed acquisition would maintain an factors are consistent with approval of this applica- existing source of banking services in New York and tion. add an additional source of strength to JHSBC. There Applicant's subsidiary bank in New York and Bank is no evidence in the record that indicates that Appliare both wholesale banks that operate in the Metropol- cant's proposal would result in any undue concentraitan New York banking market.3 Both institutions tion of resources, decreased or unfair competition, conflicts of interest or unsound banking practices. Accordingly, the Board has determined that the benefits to the public, subject to the conditions de- 2. Bank of Montreal, 70 FEDERAL RESERVE BULLETIN 664 (1984); Mitsubishi Bank, Ltd., 70 FEDERAL RESERVE BULLETIN 518 (1984). See also Policy Statement on Supervision and Regulation of Foreign- Based Bank Holding Companies, 1 Federal Reserve Regulatory Service f 4-835 (1979). 3. The Metropolitan New York banking market consists of the southern portion of Fairfield County in Connecticut; New York City, all of Nassau, Putnam, Rockland and Westchester Counties, and 4. Skandinaviska Enskilda Banken, 69 FEDERAL RESERVE BULLEwestern Suffolk County in New York; and eastern Hudson County TIN 42 (1983); European American Bancorp, 63 FEDERAL RESERVE and the northern two-thirds of Bergen County in New Jersey. BULLETIN 595 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 73 scribed above and commitments made by Applicant, ing acquisitions by foreign banking organizations would outweigh any potentially adverse effects. whose publicly reported capital is well below the The financial and managerial resources of Applicant Board's capital guidelines for U.S. banking organizaare also consistent with its acquisition of J. Henry tions and the unfair competitive advantage that foreign Schroder International Bank. This acquisition would banking organizations with low capital may thus have result in the continuation of the international services over comparably sized domestic banking organizacurrently provided, and is consistent with the pur- tions. A regulatory standard that would permit acquisiposes of the Edge Act. Accordingly, the Board finds tions by a foreign banking organization with low that the indirect acquisition of J. Henry Schroder capital, even after appropriate adjustments are made, International Bank by Applicant would be in the public would allow such foreign banking organizations a clear interest. advantage in many aspects of their competition with Based on all of the facts of record, the Board has domestic banking organizations, including pricing of determined that the applications under sections 3 and 4 services and bidding for domestic bank acquisitions. of the Act and under the Edge Act should be, and We believe that, consistent with the principles of hereby are, approved. The acquisition of shares of competitive equality and national treatment, foreign Bank shall not be made before the thirtieth calendar banking organizations that have applied to acquire a day following the date of this Order, and none of the domestic bank should be judged against financial and proposed acquisitions shall be consummated later than managerial standards, including capital adequacy three months after the date of this Order, unless such guidelines, that are similar to those applicable to time is extended for good cause by the Board or by the domestic banking organizations. In this regard, we are Federal Reserve Bank of New York, pursuant to following carefully the progress of discussions currentdelegated authority. The determination with respect to ly underway among foreign and domestic bank super- Applicant's acquisition of shares of the nonbanking visory officials to develop more fully the concept of companies discussed herein is subject to all of the the functional equivalency of capital ratios for banks conditions set forth in Regulation Y, including sections of different countries. 225.4(d) and 225.23(b) (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to the Board's authority to require November 29, 1985 such modifications or termination of activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and prevent evasions of, the provisions and purposes of Dissenting Statement by Governor Seger the Act and the Board's regulations and orders issued thereunder. I dissent from the Board's action in this case. I share By order of the Board of Governors, effective the concerns expressed by Vice Chairman Martin and November 29, 1985. Governor Rice that foreign banking organizations whose publicly reported capital is well below the Voting for this action: Vice Chairman Martin and Gover- Board's capital guidelines for U.S. banking organizanors Partee and Rice. Voting against this action: Governor tions have an unfair competitive advantage in the Seger. Absent and not voting: Chairman Volcker and Gover- United States over domestic banking organizations nor Wallich. and should, I therefore believe, be judged against the same financial and managerial standards, including the JAMES MCAFEE Board's capital adequacy guidelines, as are applied to [SEAL] Associate Secretary of the Board domestic banking organizations. In addition, I am concerned that, while this applica- Additional Views of Vice Chairman Martin and tion would permit a large Japanese banking organiza- Governor Rice tion to acquire a bank in the U.S., U.S. banking organizations are not permitted to make comparable We join in the opinion and Order issued by the Board acquisitions in Japan. While some progress is being finding that, under the specific facts and circum- made in opening Japanese markets to U.S. banking stances of this case, the financial condition of Appli- organizations, U.S. banking organizations and other cant, after making appropriate adjustments for differ- financial institutions, in my opinion, are still far from ences between foreign and domestic regulatory and being afforded the full opportunity to compete in banking practices and requirements, is consistent with Japan. approval. We would, however, like to note our continuing concern, expressed in previous cases, regard- November 29, 1985 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • January 1986 United Virginia Bankshares Incorporated deposits of $700 million, representing 7.7 percent of Richmond, Virginia the total deposits in commercial banks in the District. Section 3(d) of the Act (12 U.S.C. § 1842(d)), the Order Approving Acquisition of a Bank Holding Douglas Amendment, prohibits the Board from ap- Company proving an application by a bank holding company to acquire control of any bank located outside of the United Virginia Bankshares Incorporated, Richmond, holding company's home state,3 unless such acquisi- Virginia, a bank holding company within the meaning tion is "specifically authorized by the statute laws of of the Bank Holding Company Act (12 U.S.C. §§ 1841 the State in which such bank is located, by language to et seq.) ("Act"), has applied for the Board's approval that effect and not merely by implication." under section 3(a)(3) of the Act (12 U.S.C. The statute laws of the District of Columbia autho- § 1842(a)(3)) to accpire the successor by merger to rize the acquisition of a bank or bank holding company NS&T Bankshares! Incorporated, Washington, D.C. in the District by a bank holding company located in ("NS&T"), and iti. subsidiary bank, NS&T Bank, another state in a defined southeastern region, includ- N.A., Washington, D<C. ("Bank"). ing Virginia, if that state has enacted reciprocal inter- Applicant has also/applied for the Board's approval state banking legislation that includes the District of under section 4(c)(8) of the Act (12 U.S.C. Columbia.4 Virginia has enacted a similar regional § 1843(c)(8)) and section 225.23 of the Board's Regula- reciprocal statute, which permits the acquisition of a tion Y (12 C.F.R. § 225.23) to acquire NS&T's non- Virginia bank by a bank holding company located in banking subsidiary, Franklin Mortgage Corporation, the District of Columbia.5 Fairfax, Virginia ("Franklin Mortgage"),' a company The Council of the District of Columbia, in emergenthat engages in originating and servicing residential cy legislation enacted November 22, 1985, set forth its real estate loans, and to acquire NS&T's 4.7 percent findings that the proposed acquisition satisfies all of interest in Internet, Inc., Reston, Virginia ("Inter- the conditions imposed by the District of Columbia net"), a company that engages in data processing and statute and recommended that the Board approve the related activities. The latter acquisition would increase application.6 After review of the relevant Virginia and Applicant's interest in Internet to 9.5 percent of its District of Columbia statutes, the Board has detervoting shares. These activities have been determined mined that the Virginia statute and the proposed by the Board to be closely related to banking and acquisition satisfy the conditions of the District's permissible for bank holding companies under sections regional interstate banking statute and that the District 225.25(b)(1) and (7) of Regulation Y (12 C.F.R. of Columbia statute expressly authorizes a Virginia §§ 225.25(b)(1) and (7)). bank holding company, such as Applicant, to acquire a Notice of the applications, affording an opportunity District of Columbia bank holding company, such as for interested persons to submit comments, has been NS&T. Accordingly, the Board concludes that apgiven in accordance with sections 3 and 4 of the Act proval of Applicant's proposal to acquire a bank in the District of Columbia is not barred by the Douglas (50 Federal Register 43,005 (1985)). The time for filing Amendment. comments has expired, and the Board has considered the applications and all comments received, including Applicant's subsidiary bank competes with NS&T's the comments of the Council of the District of Colum- subsidiary bank in the only market in which the latter bia, in light of the factors set forth in section 3(c) of the operates, the Washington, D.C., banking market.7 Act and the considerations specified in section 4(c) of Applicant is the tenth largest of 71 commercial banking the Act. organizations in the Washington market, in which its Applicant is the second largest commercial banking organization in Virginia. Its one subsidiary bank controls total domestic deposits of $4.7 billion, represent- 3. A bank holding company's home state is that state in which the ing 14.6 percent of the total deposits in commercial operations of the bank holding company's banking subsidiaries were banks in Virginia.2 NS&T is the fifth largest commer- principally conducted on July 1, 1966, or the date on which the cial banking organization in the District of Columbia, company became a bank holding company, whichever is later. Applicant's home state is Virginia. with one subsidiary bank controlling total domestic 4. District of Columbia Regional Interstate Banking Act of 1985, 1985 D.C. Law 6-63 (to be codified at D.C. Code Ann. §§ 26-801 et seq.). The states in the region defined by the Act include Alabama, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, and West Virginia in addition to Virginia. 5. Va. Code §§ 6.1-398 et seq. (Supp. 1985). 1. NS&T intends to divest Franklin Mortgage prior to its acquisi- 6. D.C. Act 6-103, § 11 (1985). tion by Applicant. Applicant proposes to acquire Franklin Mortgage 7. The Washington, D.C., banking market is defined as the Washto provide for the possibility that the divestiture may not take place ington, D.C., Ranally Metropolitan Area, which comprises the Disbefore Applicant acquires control of NS&T. trict of Columbia and the surrounding suburban areas of Virginia and Digitized for FRASE 2. R S tate and District deposit data are as of June 30, 1985. Maryland. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 subsidiary bank controls total domestic deposits of that the proposed acquisition would be of public $807.8 million, representing 4 percent of the total benefit to the District.11 In addition, on the basis of deposits in commercial banks in the market.8 NS&T is these commitments, the D.C. Reinvestment Alliance, the eleventh largest commercial banking organization a coalition of nonprofit community groups in the in the market, with one subsidiary bank controlling District of Columbia, has withdrawn its objection to domestic deposits of $619 million, representing 3.1 the proposed transaction under the Community Reinpercent of the total deposits in commercial banks in vestment Act (12 U.S.C. §§ 2901 et seq.). After rethe market. Upon acquisition of NS&T, Applicant view of these and all of the other facts in this case, would become the sixth largest commercial banking including the commitments made by Applicant and organization in the Washington market and would recent reports of examination regarding the record of control 7.1 percent of the total deposits in commercial Applicant and Bank under the Community Reinvestbanks in the market. ment Act, the Board concludes that considerations The Washington banking market is, and would con- relating to the convenience and needs of the communitinue after consummation of the proposed acquisition ties to be served favor approval of the applications. to be, an unconcentrated market.9 Moreover, a large The Board has also considered the applications number of commercial banking organizations would under section 4(c)(8) of the Act to acquire Franklin remain in the Washington market after the proposed Mortgage, a nonbanking company that engages in acquisition. On the basis of these and all other facts of originating and servicing residential real estate loans, record, the Board concludes that consummation of the and to acquire or retain 9.5 percent of the shares of acquisition would not have a significant adverse effect Internet, a company that provides electronic network on existing competition in the Washington market. and switching services in connection with its operation Applicant's subsidiary bank operates in numerous of two electronic funds transfer systems.12 These additional markets in Virginia, in which NS&T's sub- activities have been determined by the Board to be sidiary bank does not compete. The Board has exam- closely related to banking under sections 225.25(b)(1) ined the effect of Applicant's acquisition of NS&T on and (7) of Regulation Y (12 C.F.R. §§ 225.25(b)(1) and probable future competition in these markets in light of (7)). the Board's proposed guidelines for assessing the Consummation of the proposed acquisition would competitive effects of market-extension mergers or eliminate a small amount of existing competition beacquisitions.10 In view of the existence of numerous tween Franklin Mortgage and Applicant's mortgage other potential entrants into each of Applicant's Vir- banking subsidiary, United Virginia Mortgage Compaginia banking markets, the Board has concluded that ny ("UVMC") in the origination of first and second consummation of the proposed transaction would not mortgages in the Washington, D.C., market.13 This have any significant adverse effects on probable future product market, however, is unconcentrated, with competition in any relevant market. The financial and many bank and nonbank competitors, and the market managerial resources and future prospects of Applishares of Franklin Mortgage and UVMC in the Washcant, NS&T, and their respective subsidiaries are also ington market are de minimis. Accordingly, the proconsistent with approval of the applications. posed acquisition would not have a significant adverse In connection with the applications, Applicant has effect on competition for residential mortgage originamade a number of commitments and proposals de- tions in the Washington market. signed to, among other things, increase the provision Franklin Mortgage and UVMC also compete in the of lending and other financial services in low- and mortgage servicing market, which has been determoderate-income neighborhoods in the District of mined to be national in scope.14 The market shares of Columbia. On the basis of certain of these commit- Franklin Mortgage and UVMC in this product market ments, the Council of the District of Columbia found are de minimis and the market is unconcentrated. Accordingly, Applicant's acquisition of Franklin Mortgage would have no significant effect on competi- 8. Market deposit data are as of June 30, 1984. tion in this product market. The acquisition by Appli- 9. Consummation of the proposed transaction would increase the cant of additional shares of Internet would not result in market's Herfindahl-Hirschman Index by 25 points, from 682 to 707. The market is considered unconcentrated under the Department of the elimination of any competition. Justice Merger Guidelines, 49 Federal Register 26,823 (1984), and the transaction is not within the parameters in which the Department of Justice is likely to challenge the transaction. 11. D.C. Act 6-103, § 11 (1985). 10. "Proposed Policy Statement of the Board of Governors of the 12. Applicant currently controls 4.7 percent of Internet's shares, Federal Reserve System for Assessing Competitive Factors Under the and upon acquisition of NS&T would acquire an additional 4.7 Bank Merger Act and the Bank Holding Company Act," 47 Federal percent. Register 9017 (1982). Although the proposed policy statement has not 13. The product market for residential mortgage originations has been adopted by the Board, the Board has applied the criteria set forth been determined to be local in scope. See, e.g., NBD Bancorp, Inc., in the policy statement in its analysis of the effects of proposals on 71 FEDERAL RESERVE BULLETIN 258, 261 (1985). Digitizedp rfoobra bFlRe AfuStuEreR competition. 14. Id. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • January 1986 After consideration of the above facts and other Act ("Act") (12 U.S.C. § 1842(a)(1)) to become a facts of record, the Board concludes that Applicant's bank holding company by acquiring 37.5 percent of the acquisition of NS&T's nonbanking interests would not outstanding voting shares of Colson, Inc., Wilmingsignificantly affect competition in any relevant market. ton, Delaware ("Colson"),1 and thereby to acquire Furthermore, there is no evidence in the record to indirectly Washington Bancorporation, Washington, indicate that approval of this proposal would result in D.C. ("Company"), a bank holding company within undue concentration of resources, unfair competition, the meaning of the Act due to its control of The conflicts of interests, unsound banking practices, or National Bank of Washington, Washington, D.C. other adverse effects on the public interest. Accord- ("Bank"). Applicant also has applied under section ingly, the Board has determined that the balance of the 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section public interest factors it must consider under section 225.23 of the Board's Regulation Y (12 C.F.R. 4(c)(8) of the Act is favorable and consistent with § 225.23)) to acquire Washington Mortgage Group, approval of the applications to acquire Franklin Mort- Inc., Vienna, Virginia ("Mortgage Company"), a nongage and to retain and acquire shares of Internet. banking subsidiary of Company engaged in mortgage Based on the foregoing and other facts of record, the banking activities. Such activities are permissible pur- Board has determined that the applications under suant to section 225.25(b)(1) of the Regulation Y. sections 3 and 4 of the Act should be, and hereby are, Notice of the applications, affording opportunity for approved. The acquisition of NS&T's subsidiary bank interested persons to submit comments, has been shall not be consummated before the thirtieth calendar given in accordance with sections 3 and 4 of the Act day following the effective date of the Order, and (50 Federal Register 36,484 (September 6, 1985)). The neither the banking acquisition nor the nonbanking time for filing comments has expired, and the Board acquisitions shall occur later than three months after has considered the applications and all comments the effective date of the Order, unless such period is received in light of the factors set forth in section 3(c) extended for good cause by the Board or by the of the Act and the considerations specified in section Federal Reserve Bank of Richmond, acting pursuant 4(c)(8) of the Act. to delegated authority. The determination with respect Applicant and Colson are both nonoperating compato Applicant's acquisition of Franklin Mortgage and nies formed for the sole purpose of acquiring shares of shares of Internet is subject to all of the conditions set Company. Bank is Company's only banking subsidforth in Regulation Y, including sections 225.4(d) and iary. Bank is the third largest commercial bank in 225.23(b) (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to Washington, D.C., controlling total deposits of $953 the Board's authority to require such modifications or million, representing 10.4 percent of the total deposits termination of activities of a bank holding company or in commercial banks in Washington, D.C.2 Bank operany of its subsidiaries as the Board finds necessary to ates in the Washington banking market,3 where it is assure compliance with, and prevent evasions of, the the seventh largest of 71 commercial banks, controlprovisions and purposes of the Act and the Board's ling 4.4 percent of total deposits in commercial banks regulations and orders issued thereunder. in the market.4 Consummation of the transaction By order of the Board of Governors, effective would not result in the concentration of banking November 27, 1985. resources or in any significant adverse competitive effects in any relevant geographic area. Voting for this action: Vice Chairman Martin and Gover- The financial and managerial resources and future nors Partee, Rice, and Seger. Absent and not voting: Chair- prospects of Applicant, Colson, Company, and Bank man Volcker and Governor Wallich. are considered generally satisfactory and consistent with approval of the transaction. Applicant has pro- JAMES MCAFEE posed no new services for Bank upon consummation [SEAL] Associate Secretary of the Board of the transaction. However, there is no evidence in the record that the banking needs of the community to be served are not being met. Accordingly, consider- Washington National Holdings N.V. ations relating to the convenience and needs of the Curacao, Netherlands Antilles 1. In a related action, the Board today approved the application by Order Approving the Formation of a Bank Holding Colson to become a bank holding company by acquiring 72.5 percent Company and Acquisition of a Mortgage Company of Company. 2. Banking data for Washington, D.C., are as of December 31, 1984. Washington National Holdings N.V., Curacao, Neth- 3. The Washington banking market is defined as the Washington erlands Antilles, has applied for the Board's approval Ranally Metro Area. 4. Banking data for the Washington banking market are as of under section 3(a)(1) of the Bank Holding Company June 30, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 77 community to be served are consistent with approval Trust Company ("Continental Bank"), also of Salt of the transaction. Lake City, both subsidiaries of Moore Financial The Board has also considered Applicant's proposal Group Incorporated ("MFGI"), Boise, Idaho, a bank to indirectly acquire Mortgage Company and engage in holding company within the meaning of the Bank mortgage banking activities. There is no evidence in Holding Company Act, have applied for the Board's the record to indicate that approval of the transaction approval under the Bank Merger Act (12 U.S.C. would result in undue concentration of resources, § 1828(c)) to merge under the charter and title of decreased or unfair competition, conflicts of interest, Continental Bank. Moore Financial/Utah concurrently unsound banking practices, or other adverse effects on has applied for membership in the Federal Reserve the public interest. Accordingly, the Board has deter- System pending consummation of the proposed mergmined that the balance of public interest factors it must er. consider under section 4(c)(8) is consistent with ap- Notice of the application, affording interested perproval of the transaction. sons an opportunity to submit comments and views, Based on the foregoing and other facts of record, the has been given in accordance with the Bank Merger Board has determined that the applications under Act and the Board's Rules of Procedure (12 C.F.R. sections 3 and 4 of the Act should be, and hereby are, § 262.3(b)). approved. The acquisitions shall not be consummated MFGI has banking subsidiaries in Idaho and Oregon before the thirtieth calendar day following the effective with consolidated assets of $2.9 billion and total dodate of this Order, or later than three months after the mestic deposits of $2.5 billion.1 Since its recent acquieffective date of this Order, unless the latter period is sition of Continental Bank, MFGI also controls the extended for good cause by the Board or the Federal seventh largest banking organization in Utah with Reserve Bank of Richmond, acting pursuant to dele- $201.8 million in deposits, representing 2.7 percent of gated authority. The determination with respect to the total deposits in commercial banks in the state.2 Applicant's proposal to acquire Mortgage Company is See Moore Financial Group Incorporated, 71 FEDERsubject to the conditions set forth in Regulation Y, AL RESERVE BULLETIN 899 (1985). including sections 225.4(d) and 225.23(b) (12 C.F.R. Moore Financial/Utah, with total assets of approxi- §§ 225.4(d) and 225.23(b)), and to the Board's author- mately $91 million as of September 30, 1985, is a Utahity to require such modification or termination of chartered industrial loan company with oflices in Salt activities of a holding company and any of its subsid- Lake City, Ogden, and Provo, all in Utah. Moore iaries as the Board finds necessary to assure compli- Financial/Utah provides commercial and consumer ance with the Act and the Board's regulations and loans, leases real and personal property through its orders issued thereunder, or to prevent evasion there- subsidiary, Moore Financial Leasing Company, exof. tends credit by credit cards, acts as agent for the sale By order of the Board of Governors, effective of credit life insurance related to extensions of credit, November 29, 1985. offers thrift and passbook accounts, and issues thrift certificates. Moore Financial/Utah also is authorized Voting for this action: Vice Chairman Martin and Gover- under state law to offer negotiable order of withdrawal nors Partee, Rice, and Seger. Absent and not voting: Chair- (NOW) accounts, although it has not offered this man Volcker and Governor Wallich. service to date. Moore Financial/Utah could reasonably be considered a competitor with commercial banks and other financial institutions in Utah by virtue JAMES MCAFEE [SEAL] Associate Secretary of the Board of its powers to offer virtually all the services a commercial bank offers, or close substitutes thereto. Continental Bank and Moore Financial/Utah both Orders Issued Under the Bank Merger Act operate in the Salt Lake City banking market.3 Continental Bank is the seventh largest of 29 commercial Moore Financial of Utah banking organizations in the market, controlling $190 Salt Lake City, Utah million in deposits, which represents 4.8 percent of the total deposits in commercial banks in the market. The Continental Bank and Trust Company Salt Lake City, Utah Order Approving Merger of Banks 1. Idaho and Oregon statewide banking data are as of March 31, 1985. Moore Financial of Utah ("Moore Financial/Utah"), 2. Utah banking data are as of March 31, 1985. 3. The Salt Lake City banking market is approximated by the Salt Salt Lake City, Utah, and The Continental Bank and Lake City Ranally Metro Area. Market data are as of June 30, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Bulletin • January 1986 Moore Financial/Utah controls deposits of approxi- approval. Based upon the foregoing and other considmately $41.2 million in the market. MFGI, the parent erations reflected in the record, the Board's judgment of both Applicants, is represented in the market by is that consummation of the transaction would be two additional subsidiaries, Moore Financial Services consistent with the public interest. ("MFS") and Moore Trust Company ("MTC"), Moore Financial/Utah also has applied for approval which provide commercial loan and trust services, under section 9 of the Federal Reserve Act (12 U.S.C. respectively. The market shares of MFS and MTC are § 321 et seq.), and section 208.4 of Regulation H de minimis. In view of these facts, and the fact that (12 C.F.R. § 208.4), for membership in the Federal this proposal represents essentially a reorganization of Reserve System pending consummation of the conexisting ownership interests, the Board concludes that templated merger. Moore Financial/Utah appears to consummation of the proposed acquisition would not meet all the criteria for admission to membership, result in any adverse effects upon competition or including capital requirements and considerations reincrease the concentration of resources in any relevant lated to management character and quality. Accordarea. ingly, the membership application is approved. The financial and managerial resources of Appli- On the basis of the record and for the reasons cants and their parent MFGI are regarded as generally discussed above, the applications are hereby apsatisfactory, particularly in light of commitments made proved. The transaction shall not be consummated by Applicants, and their prospects appear favorable. before the thirtieth day following the effective date of As a result, considerations relating to banking factors this Order, or later than three months after the effecare consistent with approval. As a result of the pro- tive date of this Order, unless such period is extended posed transaction, customers of Moore Financial/Utah for good cause by the Board or by the Federal Reserve would benefit from the addition of new services, Bank of San Francisco, pursuant to delegated authorincluding the offering of demand deposit accounts to ity. business customers and NOW accounts to individuals, By order of the Board of Governors, effective as well as federal deposit insurance for its customers' November 27, 1985. deposits. Because Moore Financial/Utah operates in two locations (Ogden and Provo, Utah) where Conti- Voting for the action: Vice Chairman Martin and Governental Bank does not currently maintain offices, this nors Partee, Rice, and Seger. Absent and not voting: Chairproposal will provide a strengthened competitor with man Volcker and Governor Wallich. expanded banking services in those locations. Thus, considerations relating to the convenience and needs JAMES MCAFEE of the communities to be served are consistent with [SEAL] Associate Secretary of the Board ORDERS APPROVED UNDER THE BANK HOLDING COMPANY ACT By the Board of Governors Recent applications have been approved by the Board of Governors as 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) Commercial Bancshares, Inc., First Bank of Colonia, November 27, 1985 Jersey City, New Jersey Colonia, New Jersey First Center Bancshares, Inc., H & R Bancshares, Inc., November 29, 1985 Mount Hope, West Virginia Danville, West Virginia Shawmut Corporation, Shawmut Quincy Bank and Trust November 18, 1985 Boston, Massachusetts Company, Digitized for FRASER Boston, Massachusetts http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 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 AApppplliiccaanntt BBaannkk((ss)) Bank date Alice Bancshares, Inc., The First State Bank, Dallas November 22, 1985 Alice, Texas Premont, Texas Anchor Bancorp, Inc., Exchange State Bank, Minneapolis October 25, 1985 Wayzata, Minnesota St. Paul, Minnesota Anderson Bancshares, Inc., Anderson State Bank, Kansas City November 8, 1985 Neosho, Missouri Anderson, Missouri Apple wood Bankcorp, Inc., Jefferson Bank South, Kansas City October 30, 1985 Wheat Ridge, Colorado Lakewood, Colorado Attica Financial Corporation, First National Bank of Attica, Kansas City November 1, 1985 Wichita, Kansas Attica, Kansas B.P.C. Corporation, Cumberland County Bank, Atlanta November 8, 1985 Cookeville, Tennessee Crossville, Tennessee Brush Country Holding Freer Bancshares, Inc., Dallas November 1, 1985 Company, Inc., Freer, Texas Freer, Texas Brush Country Bank, Freer, Texas C & L Investment Company, Hand County State Bank, Minneapolis November 22, 1985 Inc., Miller, South Dakota Miller, South Dakota Canton Bancshares, Inc., Community State Bank of Kansas City October 17, 1985 Canton, Oklahoma Canton, Canton, Oklahoma Central Wisconsin Bankshares, Onalaska Holding Company, Inc., Chicago November 22, 1985 Inc., Onalaska, Wisconsin Wausau, Wisconsin CWB Holdings—Onalaska, Inc., Wausau, Wisconsin Citizens Bankshares, Inc., Citizens State Bank, Chicago November 22, 1985 Shawano, Wisconsin Shawano, Wisconsin Commerce Financial First State Bank and Trust Kansas City October 24, 1985 Corporation, Company, Topeka, Kansas Topeka, Kansas Community Bankshares, Inc., Concord Savings Bank, Boston November 14, 1985 Concord, New Hampshire Concord, New Hampshire Dallas Bancshares, Inc., AmericanBanc Corporation, Dallas October 28, 1985 Dallas, Texas Piano, Texas Delta Bancshares, Inc., First National Bank in Kaufman, Dallas November 6, 1985 Kaufman, Texas Kaufman, Texas Downstate Bancshares, Inc., The First National Bank of St. Louis November 6, 1985 Murphysboro, Illinois Grand Tower, Grand Tower, Illinois Dover Bancshares, Inc., Bank of Dover, St. Louis November 8, 1985 Dover, Arkansas Dover, Arkansas Early Financial Bancshares, Texas Bank, Dallas October 18, 1985 Inc., Early, Texas Weatherford, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • January 1986 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Financial Bancshares, Inc., Bank of Nebraska in Omaha, Kansas City November 22, 1985 La Vista, Nebraska Omaha, Nebraska Financial Management Banc- The First National Bank of Richmond October 24, 1985 shares of West Virginia, Inc., Terra Alta, Morgantown, West Virginia Terra Alta, West Virginia First Bankers Corporation of The Mall Bank, Atlanta October 18, 1985 Florida, West Palm Beach, Florida Pompano Beach, Florida First Banking Company of Metter Financial Services, Inc., Atlanta November 15, 1985 Southeast Georgia, Metter, Georgia Statesboro, Georgia First Busey Corporation, The First National Bank of Chicago November 15, 1985 Urbana, Illinois Thomasboro, Thomasboro, Illinois First Channahon Bancorp, Inc., First Bank of Channahon, Chicago October 25, 1985 Channahon, Illinois Channahon, Illinois First Commonwealth Financial The First National Bank of Cleveland November 14, 1985 Corporation, Leechburg, Indiana, Pennsylvania Leechburg, Pennsylvania First Fidelity Bancorp, Inc., Bridgeport Bank, Richmond November 12, 1985 Fairmont, West Virginia Bridgeport, West Virginia First Financial Bancorporation, First National Bank, Chicago November 22, 1985 Iowa City, Iowa Iowa City, Iowa First Lubbock Bancshares, Inc., First National Bank at Lubbock, Dallas October 24, 1985 Lubbock, Texas Lubbock, Texas First Mid-Illinois Bancshares, Cumberland County National Chicago November 8, 1985 Inc., Bank in Neoga, Mattoon, Illinois Neoga, Illinois First National Financial First National Bank in Kansas City November 1, 1985 Corporation, Albuquerque, Albuquerque, New Mexico Albuquerque, New Mexico First NH Banks, Inc., North Country Bank, Boston November 22, 1985 Manchester, New Hampshire Berlin, New Hampshire First of America Bank Alpena Savings Bank, Chicago November 15, 1985 Corporation, Alpena, Michigan Kalamazoo, Michigan First Security Bankshares, Inc., Bank of Hartwell, Atlanta October 30, 1985 Lavonia, Georgia Hartwell, Georgia First Security Corporation of Danville Bancorp, Inc., Cleveland October 28, 1985 Kentucky, Danville, Kentucky Lexington, Kentucky FIRST STATE BANCORP OF Prarie State Bank, Chicago November 15, 1985 MONTICELLO, Bloomington, Illinois Monticello, Illinois First Union Corporation, Central Florida Bank Richmond October 24, 1985 Charlotte, North Carolina Corporation, Dade City, Florida First Virginia Banks, Inc., The Bank of Middlesex, Richmond October 30, 1985 Falls Church, Virginia Urbanna, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 81 Section 3—Continued ,. t. w x Reserve Effective A AppllCant Bank(s) Bank date First Virginia Banks, Inc., The First National Bank of Richmond October 30, 1985 Falls Church, Virginia Farmville, Farmville, Virginia First Wisconsin Corporation, Cedarburg State Bank, Chicago November 22, 1985 Milwaukee, Wisconsin Cedarburg, Wisconsin First Wisconsin Corporation, Island City Bancorp, Inc., Chicago November 22, 1985 Milwaukee, Wisconsin Minocqua, Wisconsin Security State Bank of Minocqua, Minocqua, Wisconsin First Wyoming Bancorporation, First Wyoming Bank—Saratoga, Kansas City October 17, 1985 Cheyenne, Wyoming Saratoga, Wyoming FMB of S.C. Bancshares, Farmers & Merchants Bank of Richmond November 19, 1985 Incorporated, South Carolina, Holly Hill, South Carolina Holly Hill, South Carolina Frankewing Bancshares, Inc., The Bank of Frankewing, Atlanta October 9, 1985 Frankewing, Tennessee Frankewing, Tennessee FRANKLIN BANCORP, INC., SOUTH CENTRAL BANCORP, Chicago November 15, 1985 Edinburg, Indiana Edinburg, Indiana Freedom Bancorporation, Inc., Security State Holding Company, Minneapolis November 22, 1985 Lindstrom, Minnesota Lindstrom, Minnesota Geneva Bancshares, Inc., The State Bank of Geneva, Chicago November 22, 1985 Geneva, Illinois Geneva, Illinois Granger Bancshares, Inc., The Granger National Bank, Dallas November 22, 1985 Granger, Texas Granger, Texas Gulf & Southern Corporation, The National Bank of Lee Atlanta October 9, 1985 Fort Myers, Florida County, Fort Myers, Florida Harrisburg Bancshares, Inc., Harrisburg Bank, Dallas November 1, 1985 Houston, Texas Houston, Texas Hull State Bancshares, Inc., Bank of the Trinity, N.A., Dallas November 22, 1985 Hull, Texas Liberty, Texas Independence Bancshares, Inc., New Waverly State Bank, Dallas November 25, 1985 Houston, Texas New Waverly, Texas Irwin Union Corporation, Midwest National Bank, Chicago October 23, 1985 Columbus, Indiana Indianapolis, Indiana IUC Holding, Inc., Columbus, Indiana Jennings Union Bankcorp, Union Bank and Trust Company, Chicago November 6, 1985 North Vernon, Indiana North Vernon, Indiana Kaw Valley Bancorp, Inc., The Kaw Valley State Bank & Kansas City November 15, 1985 Topeka, Kansas Trust Company, Topeka, Kansas KNISELY FINANCIAL The Knisely National Bank of Chicago November 1, 1985 CORP., Butler, Butler, Indiana Butler, Indiana Leland National Bancorp, Inc., Leland National Bank, Chicago November 6, 1985 Leland, Illinois Leland, Illinois Lexington State Bank & Trust Lexington Bancshares, Inc., Kansas City November 14, 1985 Company Employee Stock Lexington, Nebraska Ownership Plan, Lexington, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Bulletin • January 1986 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Trust Department of Lexington State Bank & Trust Company, Lexington, Nebraska Lincoln Financial Corporation, CS BANCORP, Chicago November 21, 1985 Fort Wayne, Indiana Huntington, Indiana LJT, Inc., First Holdrege Banc Shares, Inc., Kansas City October 24, 1985 Holdrege, Nebraska Holdrege, Nebraska M & M Financial Corporation, Valley Bank and Trust Company, Richmond October 25, 1985 Oak Hill, West Virginia Bluefield, West Virginia Marshall & Ilsley Corporation, M&I Interim Corporation, Chicago November 1, 1985 Milwaukee, Wisconsin Lancaster, Wisconsin Lancaster Bancshares, Inc., Lancaster, Wisconsin Mifflinburg Bancorp, Inc., Mifflinburg Bank and Trust Philadelphia November 6, 1985 Mifflinburg, Pennsylvania Company, Mifflinburg, Pennsylvania Mission-Valley Bancorp, The Bank of San Ramon, N.A., San Francisco October 30, 1985 Pleasanton, California San Ramon, California Naperville Financial Corpora- Heritage Bank of Bolingbrook, Chicago November 1, 1985 tion, Bolingbrook, Illinois Naperville, Illinois National Bank of Western N.B.W.P., Inc., Cleveland November 8, 1985 Pennsylvania Employee Berlin, Pennsylvania Stock Ownership Trust, Berlin, Pennsylvania N.B.W.P., Inc., Western Pennsylvania Bank, Cleveland November 8, 1985 Berlin, Pennsylvania N.A., Inc. Berlin, Pennsylvania Nerstrand Bancshares, Inc., Farmers State Bank of Nerstrand, Minneapolis November 15, 1985 Nerstrand, Minnesota Nerstrand, Minnesota New Danville Bancorp, Inc., Citizens National Bank of Cleveland October 28, 1985 Lexington, Kentucky Danville, Danville, Kentucky New Superior Financial Superior Financial Corporation, Minneapolis November 15, 1985 Corporation, Sault Ste. Marie, Michigan Sault Ste. Marie, Michigan Nicholas, Inc., State Bank and Trust Company, Minneapolis October 24, 1985 Dillon, Montana Dillon, Montana North Shore Financial North Shore Bank of Commerce, Minneapolis November 6, 1985 Corporation, Duluth, Minnesota Duluth, Minnesota Old National Bancorp, Greencastle Bancorp, Inc., St. Louis Evansville, Indiana Greencastle, Indiana November 21, 1985 First Citizens Bank and Trust Company, Greencastle, Indiana PAB Bancshares, Inc., Farmers & Merchants Atlanta Valdosta, Georgia Bancshares, Inc., November 1, 1985 Adel, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 83 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Peconic Bancshares, Inc., Peconic Bank, New York November 8, 1985 Riverhead, New York Riverhead, New York Regency Bancorporation, Pueblo Boulevard Bank, Kansas City November 21, 1985 Pueblo, Colorado Pueblo, Colorado Ridgedale Financial Services, Ridgedale State Bank, Minneapolis November 22, 1985 Inc., Minnetonka, Minnesota Minnetonka, Minnesota Rio Grande Financial National Bank of Brownsville, Dallas October 28, 1985 Corporation, Brownsville, Texas Brownsville, Texas Riverside Banking Company, Riverside National Bank of Atlanta October 31, 1985 Fort Pierce, Florida Florida, Fort Pierce, Florida Security Bancorp, Inc., Herrin Security Bank, St. Louis November 8, 1985 Herrin, Illinois Herrin, Illinois Silver Lake Bancorporation, First State Bank of Lake Wilson, Minneapolis November 8, 1985 Inc., Lake Wilson, Minnesota Silver Lake, Minnesota South County Bancshares, Inc., South County Bank, St. Louis November 15, 1985 Ashland, Missouri Ashland, Missouri Southeast Arkansas Bank Bank of Lake Village, St. Louis November 4, 1985 Corporation, Lake Village, Arkansas Lake Village, Arkansas Southside Bancshares Corp., Bank of Ste. Genevieve, St. Louis October 30, 1985 St. Louis, Missouri Ste. Genevieve, Missouri SouthTrust Corporation, Peoples Bank and Trust Company Atlanta November 15, 1985 Birmingham, Alabama of Sylacauga, Sylacauga, Alabama The Summit Bancorporation, Bay State Bank, New York October 25, 1985 Summit, New Jersey Ship Bottom, New Jersey Summit Holding Corporation, Gulf National Bank, Richmond October 31, 1985 Beckley, West Virginia Sophia, West Virginia Sunbelt Bancshares, Inc., The Citizens Bank of Tifton, Atlanta October 9, 1985 Tifton, Georgia Tifton, Georgia Texas American Bancshares, American State Bank, Dallas November 1, 1985 Inc., Fort Worth, Texas Fort Worth, Texas Turner Bancshares, Inc., Belgrade State Bank, St. Louis October 29, 1985 Belgrade, Missouri Belgrade, Missouri United Citizens Financial United Citizens Bank and Trust St. Louis November 5, 1985 Corporation, Co., New Castle, Kentucky New Castle, Kentucky Washington-Wilkes Farmers and Merchants Bank, Atlanta October 30, 1985 Corporation, Washington, Georgia Washington, Georgia Williamson County Bancorp, Planters Financial Corporation, Atlanta November 22, 1985 Inc., Hopkinsville, Tennessee Franklin, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Federal Reserve Bulletin • January 1986 Section 4 Bank(s)/Nonbanking Reserve Effective Applicant company Bank date Bank of Boston Corporation, American Financial Systems Boston November 15, 1985 Boston, Massachusetts Corporation, Tampa, Florida Bank of Boston Corporation, Hospital Trust Financial of Boston November 1, 1985 Boston, Massachusetts Connecticut, Inc., Hartford, Connecticut acting as an advisor to open-end investment companies Chisholm Trail Financial Derby Financial Corporation, Kansas City November 5, 1985 Corporation, Wichita, Kansas Wichita, Kansas Forest Lake Finance Company, Coy Insurance Agency, Minneapolis November 19, 1985 Forest Lake, Minnesota Forest Lake, Minnesota Gulfbanks, Inc., Central National Gulfbank of Dallas October 31, 1985 Corpus Christi, Texas Corpus Christi, Corpus Christi, Texas First National Bank of Corpus Christi, Corpus Christi, Texas Southern National Bank of Corpus Christi, Corpus Christi, Texas Western National Bank of Corpus Christi, Corpus Christi, Texas Maryland National Corporation, Firstmark Arvada Industrial Richmond November 18, 1985 Baltimore, Maryland Bank, Arvada, Colorado Firstmark Cherry Creek Industrial Bank, Denver, Colorado Sloan State Corporation, making or acquiring loans and Chicago November 15, 1985 Sloan, Iowa other extensions of credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 85 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Banco de Ponce, The East New York Savings New York November 1, 1985 Ponce, Puerto Rico Bank, New York, New York Bayshore Bank of Florida, Tower Bank, N.A., Atlanta October 4, 1985 Miami, Florida Hialeah Gardens, Florida Citizens Interim Bank, Citizens First Bank of Ocala, Atlanta November 13, 1985 Ocala, Florida Ocala, Florida Green Valley Bank, Inc., Valley Bank and Trust Company, Richmond October 25, 1985 Bluefield, West Virginia Bluefield, West Virginia M. B. Bank, The Minerva Banking Company, Cleveland October 25, 1985 Minerva, Ohio Minerva, Ohio 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. First National Bank of Blue Island Employee Stock Florida Department of Banking v. Board of Gover- Ownership Plan v. Board of Governors, No. 85- nors, No. 84-3831 (11th Cir., filed Feb. 15, 2615 (7th Cir., filed Sept. 23, 1985). 1985),and No. 84-3832 (11th Cir., filed Feb. 15, First National Bancshares II v. Board of Governors, 1985). No. 85-3702 (6th Cir., filed Sept. 4, 1985). Dimension Financial Corporation v. Board of Gover- Independent Community Bankers Associaton of South nors, No. 84-1274 (U.S., filed Feb. 6, 1985). Dakota v. Board of Governors, No. 84-1496 (D.C. Lewis v. Volcker, et al., No. C-1-85-0099 (S.D. Ohio, Cir., filed Aug. 7, 1985). filed Jan. 14, 1985). Florida Bankers Association, et al. v. Board of Gover- Brown v. United States Congress, et al., No. 84-2887nors, No. 85-193 (U.S., filed Aug. 5, 1985). 6(IG) (S.D. Cal., filed Dec. 7, 1984). Populist Party of Iowa v. Federal Reserve Board, No. Seattle Bancorporation, et al. v. Board of Governors, 85-626-B (S.D. Iowa, filed Aug. 2, 1985). No 84-7535 (9th Cir., filed Aug. 15, 1984). John R. Urwyler, et al. v. Internal Revenue Service, et Melcher v. Federal Open Market Committee, No. 84al., No. CV-F-85-402 REC (E.D. Cal., filed July 18, 1335 (D.D.C., filed Apr. 30, 1984). 1985). State of Ohio v. Board of Governors, No. 84-1270 Broad Street National Bank of Trenton v. Board of (10th Cir., filed Jan. 30, 1984). Governors, No. 85-3387 (3d Cir., filed July 17, Colorado Industrial Bankers Association v. Board of 1985). Governors, No. 84-1122 (10th Cir., filed Jan. 27, Wight, et al. v. Internal Revenue Service, et al., No. 1984). CIV S-85-0012 MLS (E.D. Cal., filed July 12,1985). First Bancorporation v. Board of Governors, No. 84- Cook v. Spillman, et al., No. CIV S-85-0953 EJG 1011 (10th Cir., filed Jan. 5, 1984). (E.D. Cal. filed July 10, 1985). Oklahoma Bankers Association v. Federal Reserve Calhoun, et al. v. Board of Governors, No. 85-1750 Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983). (D.D.C., filed May 30, 1985). The Committee For Monetary Reform, et al. v. Board Florida Bankers Association v. Board of Governors, of Governors, No. 84-5067 (D.D.C., filed June 16, No. 84-3883 and No. 84-3884 (11th Cir., filed Feb. 1983). 15, 1985). Securities Industry Association v. Board of Governors, No. 80-2614 (D.C. Cir., filed Oct. 24. 1980), and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT A22 Gross demand deposits—individuals, partnerships, and corporations A3 Reserves, money stock, liquid assets, and debt measures A4 Reserves of depository institutions, Reserve FINANCIAL MARKETS Bank credit A5 Reserves and borrowings—Depository A23 Commercial paper and bankers dollar institutions acceptances outstanding A5 Federal funds and repurchase agreements— A23 Prime rate charged by banks on short-term Large member banks business loans A24 Interest rates—money and capital markets A25 Stock market—Selected statistics POLICY INSTRUMENTS A26 Selected financial institutions—Selected assets and liabilities A6 Federal Reserve Bank interest rates A7 Reserve requirements of depository institutions A8 Maximum interest rates payable on time and FEDERAL FINANCE savings deposits at federally insured institutions A9 Federal Reserve open market transactions A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation FEDERAL RESERVE BANKS A30 Gross public debt of U.S. Treasury—Types and ownership A10 Condition and Federal Reserve note statements A31 U.S. government securities dealers— All Maturity distribution of loan and security Transactions holdings A32 U.S. government securities dealers—Positions and financing A3 3 Federal and federally sponsored credit MONETARY AND CREDIT AGGREGATES 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 All 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

A2 Federal Reserve Bulletin • January 1986 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 Assets and liabilities of foreign banks, A53 U.S. international transactions—Summary June 30,1985 A54 U.S. foreign trade A54 U.S. reserve assets 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 Q4 Q1 Q2 Q3 June July' Aug. Sept.' Oct. Reserves of depository institutions2 1 Total 3.8 17.4 12.2 16.4 24.8 12.2 16.5 8.7 4.0 2 Required 3.0 16.9 12.3 17.1 22.3 13.9 17.7 13.5 1.4 3 Nonborrowed 36.3 57.3 14.1 18.2 29.5 15.4 18.0 2.8 7.0 4 Monetary base3 4.7 8.2 7.5 10.3 13.5 6.8 13.4 7.0 6.1 Concepts of money, liquid assets, and debt4 5 Ml 3.2 10.6 10.2 15.1' 19.8 9.3 20.5 11.7 -1.2 6 M2 9.1 12.1 5.3 10.2 13.7 8.6 11.3 7.0 2.2 7 M3 11.0 10.7 5.2 7.9' 10.5 4.4 9.2 10.1 3.8 8 L 9.6 10.0 5.8 8.5 9.5 5.6 12.2 9.9 n.a. 9 Debt 14.0 13.6 11.7 ll^ 11.8 12.2 11.7 10.5 n.a. Nontransaction components 10 InM25 10.9 12.5 3.8 8.7 11.8 8.4 8.4 5.5 3.3 11 In M3 only6 18.7 5.5 4.8 -1.3' -2.1 -12.0 1.0 22.3 10.0 Time and savings deposits Commercial banks 12 Savings7 -10.4 -8.7 -1.7 11.3 14.9 12.8 9.7 3.9 4.8 13 Small-denomination time8 6.9 -1.8 6.5 -4.4 2.2 -7.1 -13.3 -4.1 -3.1 14 Large-denomination time9'10 12.2 2.6 8.3 -3.2 -19.4 -8.5 8.1 22.9 18.5 Thrift institutions 15 Savings7 -6.6 2.2 3.1 14.7 9.2' 18.3 22.9 6.8 14.9 16 Small-denomination time 15.2 1.7 3.9 —4.6r 3.3' -7.9 -13.9 -6.6 -4.9 17 Large-denomination time9 29.8 21.0 2.6 -2.8 2.3 -16.9 -3.9 15.6 3.1 Debt components4 18 Federal 16.1 15.3 12.6 14.2 13.8 15.9 13.7 7.8 n.a. 19 Nonfederal 13.3 13.0 11.4 11.3' 11.1 11.1 11.2 11.3 n.a. 20 Total loans and securities at commercial banks11 9.2 10.1 9.7 9.6 9.5 10.9 6.5 8.2 2.0 1. Unless otherwise noted, rates of change are calculated from average commercial banks, money market funds (general purpose and broker/dealer), amounts outstanding in preceding month or quarter. foreign governments and commercial banks, and the U.S. government. Also 2. Figures incorporate adjustments for discontinuities associated with the subtracted is a consolidation adjustment that represents the estimated amount of implementation of the Monetary Control Act and other regulatory changes to demand deposits and vault cash held by thrift institutions to service their time and reserve requirements. To adjust for discontinuities due to changes in reserve 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 Federi 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 noniinancial 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 noniinancial 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, Money Market Deposit Accounts or more, excluding those booked at international banking facilities. (MMDAs), savings and small-denomination time deposits (time deposits—includ- 10. Large-denomination time deposits at commercial banks less those held by ing retail RPs—in amounts of less than $100,000), and balances in both taxable and money market mutual funds, depository institutions, and foreign banks and tax-exempt general purpose and broker/dealer money market mutual funds. official institutions. Excludes individual retirement accounts (IRA) and Keogh balances at depository 11. Changes calculated from figures shown in table 1.23. institutions and money market funds. Also excludes all balances held by U.S. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic NonfinancialS tatistics • January 1986 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week ending FFFaaaccctttooorrrsss 1985 1985 Aug. Sept. Oct. Sept. 18 Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 190,759 194,350 193,817 192,973 196,331 193,635 193,344 193,731 195,568 193,075 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 168,440 171,246 170,018 170,589 173,146 169,819 169,759 170,667 171,140 168,755 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 165,378 170,503 170,018 170,589 171,243 169,819 169,759 170,667 171,140 168,755 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 62 743 0 0 1,903 0 0 0 0 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,249 8,428 8,227 8,227 8,598 8,227 8,227 8,227 8,227 8,227 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,238 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 11 201 0 0 371 0 0 0 0 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 1,109 1,283 1,140 1,079 1,262 1,440 1,349 935 1,301 1,025 1111100000 FFFFFllllloooooaaaaattttt 488 779 669 396 468 1,310 855 500 869 566 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 12,473 12,614 13,763 12,683 12,856 12,839 13,154 13,402 14,031 14,502 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt.................... 4,618 4,618 4,692 4,618 4,618 4,618 4,632 4,718 4,718 4,718 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 16,843 16,899 16,960 16,898 16,912 16,926 16,940 16,958 16,968 16,982 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 187,859' 188,371 189,070 188,677 187,527 187,478 188,758 189,804 189,420 188,540 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 552 546 543 546 546 545 541 541 544 544 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 2,925 4,275 3,006 3,354 6,601 3,672 2,909 2,945 3,650 2,664 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 204 235 214 215 221 306 227 203 193 203 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,661 1,607 1,738 1,610 1,670 1,614 1,589 1,832 1,809 1,671 2222200000 OOOOOttttthhhhheeeeerrrrr 485 466 446 586 446 447 412 545 441 375 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,238 6,274 6,270 6,269 6,239 6,272 6,417 6,226 6,233 6,170 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 23,386 25,183 25,272 24,322 25,700 25,935 25,152 24,400 26,056 25,697 End-of-month figures Wednesday figures 1985 1985 Aug. Sept. Oct. Sept. 18 Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 192,693 194,148 192,884 192,816 198,919 193,605 197,822 194,398 198,249 186,296 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 170,109 169,702 168,705 169,976 174,646 169,831 171,801 170,238 172,215 161,902 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 170,109 169,702 168,705 169,976 170,800 169,831 171,801 170,238 172,215 161,902 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 0 3,846 0 0 0 0 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,227 8,227 8,227 8,227 8,852 8,227 8,227 8,227 8,227 8,227 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 0 625 0 0 0 0 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 2,068 2,520 886 1,190 2,121 1,067 3,926 887 2,355 1,092 3333322222 FFFFFllllloooooaaaaattttt -152 69 335 720 225 1,329 360 1,500 1,018 355 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 12,441 13,630 14,731 12,703 13,075 13,151 13,508 13,546 14,434 14,720 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 3333355555 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt ............... 4,618 4,618 4,718 4,618 4,618 4,618 4,718 4,718 4,718 4,718 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 16,868r 16,924 16,994 16,910 16,924 16,938 16,952 16,966 16,980 16,994 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 188,548 187,336 189,513 188,241 187,302 188,163 189,359 190,156 189,034 188,909 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 548 546 547 546 544 544 541 544 544 547 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,656 4,174 1,528 4,070 8,009 3,001 4,932 2,773 2,590 1,186 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 223 535 268 234 230 214 214 144 180 221 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,435 1,444 1,469 1,441 1,445 1,444 1,444 1,463 1,461 1,468 4444422222 OOOOOttttthhhhheeeeerrrrr 389 497 372 684 401 459 482 674 372 377 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,240 6,530 6,339 6,078 6,073 6,162 6,159 6,107 6,063 5,964 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 24,230 25,718 25,650 24,140 27,546 26,264 27,450 25,311 30,793 20,426 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 1985 Dec. Dec. Dec. Mar. Apr. May June July Aug. Sept. 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss11111 24,939 21,138 21,738 22,065 23,217 22,385 23,367 23,503 23,415' 24,972 22222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh22222 20,392 20,755 22,316 21,863 21,567 21,898 22,180 22,530 22,839 22,465 33333 VVVVVaaaaauuuuulllllttttt cccccaaaaassssshhhhh uuuuussssseeeeeddddd tttttooooo sssssaaaaatttttiiiiisssssfffffyyyyy rrrrreeeeessssseeeeerrrrrvvvvveeeee rrrrreeeeeqqqqquuuuuiiiiirrrrreeeeemmmmmeeeeennnnntttttsssss33333..... 17,049 17,908 18,958 18,429 18,435 18,666 18,985 19,300 19,548 19,475 44444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 3,343 2,847 3,358 3,434 3,132 3,231 3,196 3,230 3,291 2,990 55555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss55555 41,853 38,894 40,696 40,494 41,652 41,051 42,352 42,803 42,963 44,447 66666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 41,353 38,333 39,843 39,728 40,914 40,247 41,447 41,948 42,135 43,782 77777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss66666 500 561 853 766 738 804 905 855 827 666 8 9 8 9 8 9 8 9 8 9 TTTTTooooo SSSSS tttttaaaaa eeeee lllll aaaaa sssss bbbbb ooooo ooooo nnnnn rrrrr aaaaa rrrrrooooo lllll wwwww bbbbbooooo iiiiinnnnn rrrrr ggggg rrrrrooooo sssss wwwww aaaaa iiiii ttttt nnnnn RRRRR gggggsssss eeeee sssss aaaaa eeeee ttttt rrrrr vvvvv RRRRR eeeee eeeee sssss BBBBB eeeee aaaaa rrrrr nnnnn vvvvveeeee kkkkk sssss BBBBBaaaaannnnnkkkkksssss 69 3 7 3 7 % 74 3,1 1 8 1 6 3 1,59 8 3 8 1,3 1 2 3 3 5 1,3 1 3 6 4 5 1,2 1 0 5 5 1 1,1 1 0 6 7 7 1, 2 0 2 7 1 3 1, 2 2 0 8 3 9 1111100000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 187 2 2,604 1,059 868 534 665 507 570' 656 Biweekly averages of daily figures for weeks ending 1985 July 17 July 31 Aug. 14 Aug. 28 Sept. 11 Sept. 25 Oct. 9 Oct. 23 Nov. 6 Nov. 20? 1111111111 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss11111 24,256 22,840 23,468 23,102' 43,509 44,800 25,553 25,232 25,645 26,320 1111122222 TTTTToooootttttaaaaalllll vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh22222 22,019 22,935 22,829 23,052 21,887 22,705 23,067 22,831 22,151 22,528 1111133333 VVVVVaaaaauuuuulllllttttt cccccaaaaassssshhhhh uuuuussssseeeeeddddd tttttooooo sssssaaaaatttttiiiiisssssfffffyyyyy rrrrreeeeessssseeeeerrrrrvvvvveeeee rrrrreeeeeqqqqquuuuuiiiiirrrrreeeeemmmmmeeeeennnnntttttsssss33333..... 19,043 19,505 19,550 19,689' 18,880 19,766 19,971 20,294 19,663 20,138 1111144444 SSSSSuuuuurrrrrpppppllllluuuuusssss vvvvvaaaaauuuuulllllttttt cccccaaaaassssshhhhh44444 2,977 3,431 3,280 3,363' 3,008 2,939 3,097 2,538 2,488 2,391 1111155555 TTTTToooootttttaaaaalllll rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss55555 43,298 42,344 43,018 42,791' 43,509 44,800 45,523 45,525 45,307 46,458 1111166666 RRRRReeeeeqqqqquuuuuiiiiirrrrreeeeeddddd rrrrreeeeessssseeeeerrrrrvvvvveeeeesssss 42,608 41,392 42,280 41,841' 42,838 44,133 44,876 44,733 44,485 45,477 1111177777 EEEEExxxxxccccceeeeessssssssss rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss66666 690 953 738 950' 672 667 647 793 823 980 1111188888 TTTTToooootttttaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1,284 917 990 1,088 1,392 1,171 1,395 1,118 1,075 1,178 1111199999 SSSSSeeeeeaaaaasssssooooonnnnnaaaaalllll bbbbbooooorrrrrrrrrrooooowwwwwiiiiinnnnngggggsssss aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 152 185 224 225 196 212 195 169 151 104 2222200000 EEEEExxxxxttttteeeeennnnndddddeeeeeddddd cccccrrrrreeeeedddddiiiiittttt aaaaattttt RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss77777 483 506 509 610 669 656 627 649 598 522 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 Sept. 16 Sept. 23 Sept. 30 Oct. 7 Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 One day and continuing contract 1 Commercial banks in United States 65,553 60,513' 62,778' 65,744' 65,966' 61,501 58,757 67,972 70,071 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 27,636 25,896 24,687 26,195 2288,,223388'' 28,620 28,543 28,640 32,252 3 Nonbank securities dealers 9,735 9,877 10,673 10,985' 9,926' 9,753 9,967 10,392 9,768 4 All other 25,186' 25,469 26,760 25,290 25,641' 26,098 26,104 26,535 25,562 All other maturities 5 Commercial banks in United States 9,751 9,507 9,596 8,998' 9,582' 8,822 8,490 8,974 9,609 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 7,735 7,792 7,494 7,290 7,629' 7,114 7,073 7,086 8,104 7 Nonbank securities dealers 10,172 9,931 9,770 9,214' 9,833' 9,468 9,565 9,602 9,477 8 All other 7,900 7,535 7,542 7,223 7,348' 7,314 7,506 7,514 7,765 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 30,163 29,79c 32,734 30,977 30,925 29,495 27,025 32,516 32,175 10 Nonbank securities dealers 8,286 7,863 7,662 9,011 9,316 9,080 7,992 8,783 8,383 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic NonfinancialS tatistics • January 1986 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 11/25/85 date rate 11/25/85 rate 11/25/85 rate 11/25/85 rate Boston 71/! 5/20/85 IV2 SV2 9 9V2 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 Dallas 5/20/85 5/20/85 San Francisco... IV2 5/21/85 IVi 8'/i 9 9>/i 10 5/21/85 Range of rates in recent years3 Range (or F.R. Range(or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. I 1 n 9 7 e 4 f — fec A t D pr e . c . 2 3 5 1 , 1973 7 V l/2 /2 - 8 7 8 i /> July 1 3 0 7 7 -7 1/ 4 !/4 7 7 1 1 / / 4 4 1981— N M o a v y . 2 8 13 1 - 4 1 4 1 1 3 4 30 8 8 Aug. 21 73/4 73/4 6 13 13 Dec. 9 73/4-8 73/4 Sept. 22 8 8 Dec. 4 12 12 16 73/4 73/4 Oct. 16 8-8'/2 m 1975— Jan. 1 6 0 7 71 '/4 /4 -7 -7 3/ 3 4 / 4 7 7 3 '/ / 4 4 Nov. 2 3 0 1 il/ 8 2 9 '/ - l 2 / 9 2 l /2 8 9 9 V V V 2 2 i 1982— J A u u ly g . 2 2 2 3 0 i 1 m 1 ll - V 1 -1 1 i 2 '/! 1 1 1 1 1 1 V V 2 i Feb. 2 5 4 63/ 7 4 1 - / 7 4 1/ 4 7 6 1 3 / / 4 4 July 20 10 10 1 3 6 lO 1 V 1 i 1 ld 1 l/2 7 63/4 63/4 Aug. 17 lo-iovi 10'/2 27 10-10'/2 10 Mar. 10 61/4-63/4 6V4 20 10V2 10V2 30 10 10 14 6'/4 6'/4 Sept. 19 I0V^-11 11 Oct. 12 9lA-lO 9>/2 May 16 6-6'A 6 21 11 11 13 9V2 9V2 23 6 6 Oct. 8 11-12 12 Nov. 22 9-91/2 9 10 12 12 26 9 9 1976— Jan. 19 5 V2-6 51/2 Dec. 14 8Vi-9 9 Nov. 2 2 2 3 5' S /4 V - i 5'/2 5 5 1 V /4 i Feb. 1 1 9 5 12 1 - 3 1 3 1 1 3 3 1 1 7 5 8 8 '/ V 2- i 9 m 8'/ 2 26 51/4 5'/4 May 29 12-13 13 30 12 12 1984— Apr. 9 8V2-9 9 1977— Aug. 30 51/4-53/4 51/4 June 13 11-12 11 13 9 9 Sept. 31 2 51/4 53 -5 /4 3/ 4 5 53 3 / / 4 4 Julv 2 1 8 6 10 1 - 1 1 1 1 1 1 0 Nov. 2 2 1 6 SV 8' 2 /> — 9 & %Vli / 2 Oct. 26 6 6 29 10 10 Dec. 24 8 8 Sept. 26 11 11 1978— Jan. 9 6-6'/: 6'/2 Nov. 17 12 12 1985— May 20 7>/i-8 IVi 20 6'/2 6>/2 Dec. 5 12-13 13 24 IVi IV2 May 11 6'/2-7 1 13 13 12 7 7 5 13-14 14 In effect Nov. 25, 1985 7Vi m 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 &V2 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 A7 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyypp dd ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo tt ss ee ii rr tt vv ,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo ooff ss ii dd tt ee ii pp nn oo ttee ss rr ii vv tt,, aa ll aa 55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Alet demand2 Net transaction accounts7 8 7 12/30/76 $0-$29.8 million 3 1/1/85 9Vi 12/30/76 Over $29.8 million 1122 11//11//8855 $10 million-$100 million ll3/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 161/4 12/30/76 By original maturity Less than 1 Vi years 3 10/6/83 Time and savings2-* 1 Vi years or more 0 10/6/83 Savings 3 3/16/67 Eurocurrency liabilities TTiimmee44 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2V4 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 ^ 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 7Vi 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 NonfinancialS tatistics • January 1986 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 Percent per annum Commercial banks mut S u a al v i s n a g v s i n a g n s d b l a o n 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 Nov. 30, 1985 In effect Nov. 30, 1985 Type of deposit Percent Effective date Percent Effective date 2 1 N Sa e v g i o n t g ia s b le order of withdrawal accounts 5 5V V i i 12/ 1 3 / 1 1 / /8 8 4 0 5 5 V V * i 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 $1,00©4 5 Vi 1/1/84 SVi 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. i. 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 1985 TTyyppee ooff ttrraannssaaccttiioonn 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 17,067 18,888 20,036 916 6,026 274 22,,009999 0 33,,005566 11,,552211 2 Gross sales 8,369 3,420 8,557 554 0 417 0 0 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,000 2,400 7,700 500 0 800 0 200 0 0 Others within 1 year 5 Gross purchases 312 484 1,126 961 245 0 0 0 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 350 7 Maturity shift 17,295 18,887 16,354 1,299 1,129 2,443 1,312 1,238 4,895 1,028 8 Exchange -14,164 -16,553 -20,840 0 -1,463 -2,945 0 -1,778 -3,275 -1,457 9 Redemptions 0 87 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,797 1,896 1,638 465 846 0 0 0 6 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -14,524 -15,533 -13,709 -1,299 -1,114 -2,101 -1,312 -1,153 -3,760 -1,028 13 Exchange 11,804 11,641 16,039 0 1,463 1,940 0 1,778 1,825 1,457 5 to 10 years 14 Gross purchases 388 890 536 0 110088 0 0 00 6 00 15 Gross sales 0 0 300 0 0 0 0 0 0 0 16 Maturity shift -2,172 -2,450 -2,371 0 -16 42 0 -85 -1,136 0 17 Exchange 2,128 2,950 2,750 0 0 600 0 0 800 0 Over 10 years 18 Gross purchases 307 383 441 0 0 0 0 0 00 00 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -601 -904 -275 0 0 -384 0 0 0 0 21 Exchange 234 1,962 2,052 0 0 405 0 0 650 0 All maturities 22 Gross purchases 19,870 22,540 23,476 2,343 7,321 274 2,099 0 3,068 1,521 23 Gross sales 8,369 3,420 7,553 554 0 417 0 0 0 350 24 Redemptions 3,000 2,487 7,700 500 0 800 0 200 0 0 Matched transactions 543,804 578,591 808,986 54,718 65,845 78,870 81,016 60,980 64,263 7733,,992255 26 Gross purchases 543,173 576,908 810,432 57,288 64,001 77,597 83,782 59,165 64,209 72,347 Repurchase agreements 27 Gross purchases 130,774 105,971 139,441 4,922 11,540 21,716 22,,880011 1100,,448866 11,,992288 1144,,002299 28 Gross sales 130,286 108,291 139,019 7,429 4,088 29,168 2,801 10,486 1,928 14,029 29 Net change in U.S. government securities 8,358 12,631 8,908 1,351 12,931 -9,668 4,865 -2,015 3,014 -408 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 00 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 189 292 256 * 8 60 46 30 1 Repurchase agreements 33 Gross purchases 18,957 8,833 1,205 445 998833 1,336 112200 22,,443399 335544 33,,552222 34 Gross sales 18,638 9,213 817 825 452 1,867 120 2,439 354 3,522 35 Net change in federal agency obligations 130 -672 132 -380 531 -540 -60 -46 -30 -1 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 6,116 971 13,462 -10,208 44,,880055 -2,061 22,,998844 --440088 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 • January 1986 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1985 1985 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 Aug. Sept. Oct. Consolidated condition statement ASSETS 1 Gold certificate account 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 2 Special drawing rights certificate account 4,618 4,718 4,718 4,718 4,718 4,618 4,618 4,718 3 Coin 516 523 524 526 529 484 518 524 Loans 4 To depository institutions 1,067 3,926 887 2,355 1,092 2,068 2,520 886 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 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8 Held under repurchase agreements .... 0 0 0 0 0 0 0 0 U.S. government securities Bought outright 9 Bills 79,360 81,330 79,767 81,744 71,431 79,288 79,231 78,234 0 Notes 66,072 66,072 66,072 66,072 66,072 66,422 66,072 66,072 11 Bonds 24,399 24,399 24,399 24,399 24,399 24,399 24,399 24,399 2 Total bought outright1 169,831 171,801 170,238 172,215 161,902 170,109 169,702 168,705 Held under repurchase agreements .... 0 0 0 0 0 0 0 0 14 Total U.S. government securities 169,831 171,801 170,238 172,215 161,902 170,109 169,702 168,705 15 Total loans and securities . 179,125 183,954 179,352 182,797 171,221 180,404 180,449 177,818 16 Cash items in process of collection... 8,390 6,205 12,084 6,991 6,117 5,445 4,297 5,843 17 Bank premises 594 595 595 596 594 590 594 595 Other assets 18 Denominated in foreign currencies2. 5,646 5,157 5,512 6,218 6,392 4,591 4,963 6,530 19 AH other3 6,911 7,756 7,439 7,620 7,734 7,260 8,073 7,606 20 Total assets. 216,890 219,998 221,314 220,556 208,395 214,482 214,602 214,724 LIABILITIES 21 Federal Reserve notes 172,285 173,472 174,258 173,124 172,991 172,712 171,476 173,590 Deposits 22 To depository institutions 27,708 28,894 26,774 32,254 21,894 25,665 27,162 27,119 23 U.S. Treasury—General account. 3,001 4,932 2,773 2,590 1,186 3,656 4,174 1,528 24 Foreign—Official accounts 214 214 144 180 221 223 535 268 25 Other 459 482 674 372 377 389 497 372 26 Total deposits. 31,382 34,522 30,365 35,396 23,678 29,933 32,368 29,287 27 Deferred availability cash items 7,061 5,845 10,584 5,973 5,762 5,597 4,228 5,508 28 Other liabilities and accrued dividends4 . 2,145 2,337 2,281 2,234 2,131 2,232 2,272 2,335 29 Total liabilities . 212,873 216,176 217,488 216,727 204,562 210,474 210,344 210,720 CAPITAL ACCOUNTS 30 Capital paid in 1,755 1,757 1,758 1,759 1,762 1,748 1,753 1,762 31 Surplus 1,626 1,626 1,626 1,626 1,626 1,626 1,626 1,626 32 Other capital accounts 636 439 442 444 445 634 879 616 33 Total liabilities and capital accounts 216,890 219,998 221,314 220,556 208,395 214,482 214,602 214,724 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 125,921 125,778 125,104 122,909 123,327 124,404 126,128 123,099 Federal Reserve note statement 35 Federal Reserve notes outstanding 205,711 206,229 206,391 206,568 206,879 204,511 205,459 206,884 36 LESS: Held by bank 33,426 32,757 32,133 33,444 33,888 31,799 33,983 33,294 37 Federal Reserve notes, net 172,285 173,472 174,258 173,124 172,991 172,712 171,476 173,590 Collateral held against notes net: 38 Gold certificate account 11,090 11,090 11,090 11,090 11,090 11,090 11,090 11,090 39 Special drawing rights certificate account 4,618 4,718 4,718 4,718 4,718 4,618 4,618 4,718 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities .. 156,577 157,664 158,450 157,316 157,183 157,004 155,768 157,782 42 Total collateral 172,285 173,472 174,258 173,124 172,991 172,712 171,476 173,590 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. NOTE: Some of these data also appear in the Board's H.4.1 (503) release. For 2. Assets shown in this line are revalued monthly at market exchange rates. address, see inside front cover. 3. Includes special investment account at Chicago of Treasury bills maturing within 90 days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 Aug. 30 Sept. 30 Oct. 31 1 Loans—Total 1,067 3,926 887 2,355 1,092 2,153 2,520 886 2 Within 15 days 98 8 1 6 3,83 9 3 3 8 6 2 7 0 2,31 3 7 8 1,04 4 6 6 2,07 7 4 9 2,45 6 2 8 82 5 9 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 Within 15 days 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 9 0 1 U. W S 16 . i t g d h o a in v y s e 1 r t n 5 o m d 9 e a 0 n y t d s 1 a s y e s c urities—Total 1 3 5 6 6 8 3 9 , , , , 9 5 8 1 7 3 4 2 5 1 5 7 1 3 5 7 5 9 5 1 , , , , 9 2 8 3 8 0 4 8 7 1 3 7 1 3 5 7 6 5 7 0 , , , , 5 3 1 2 7 7 0 3 7 5 2 8 1 3 5 7 8 7 5 2 , , , , 3 2 3 2 4 9 9 1 0 4 7 5 1 5 3 6 5 3 0 1 , , , , 8 9 8 9 4 8 0 9 8 0 2 0 1 5 3 7 6 6 5 0 , , , , 2 8 4 1 0 9 3 0 9 8 8 9 1 3 5 6 5 3 8 9 , , , , 8 8 7 7 2 9 9 0 3 9 6 2 1 3 5 6 7 8 1 8 , , , , 0 9 1 7 4 3 3 0 3 3 3 5 1 1 3 4 O O v v e e r r 5 1 y ye e a a r r s t o to 5 1 y 0 e y ar e s a rs 3 2 1 4 1 4 , , , 8 4 8 5 6 6 5 3 6 3 2 1 4 1 4 , , , 8 4 8 5 6 6 5 3 6 2 3 1 1 4 4 , , , 4 8 8 6 6 5 5 3 6 3 2 1 4 1 4 , , , 8 4 8 6 6 5 5 3 6 3 2 1 1 4 4 , , , 4 8 8 6 6 5 3 5 6 3 2 1 5 1 4 , , , 2 4 8 3 6 6 5 3 6 3 2 1 4 1 4 , , , 8 4 8 5 6 6 5 3 6 3 2 1 5 1 4 , , , 2 4 8 7 6 5 7 3 6 1 1 1 6 8 7 Fe W d 16 e i r t d a h a l i y n a s g 1 e t 5 o n c d 9 y a 0 y o d s b ' a l y ig s ations—Total 8 1 , , 2 9 5 2 0 2 1 7 9 9 5 8 1 , , 2 7 5 1 2 6 8 0 7 6 1 5 8 1 , , 2 8 5 1 2 6 6 0 7 6 6 6 8 1 , , 2 8 5 2 0 9 7 7 3 9 9 8 1 , , 2 7 6 2 5 6 8 7 7 8 4 8 1 , , 2 8 4 2 2 1 7 1 7 3 5 3 8 1 , , 2 7 5 1 2 6 2 6 7 2 9 2 8 1 , , 2 7 6 2 5 6 8 7 7 8 4 2 2 2 0 1 2 O O O v v v e e e r r r 5 1 1 0 y y e e y a a e r r a s r t s o t o 5 1 y 0 e y ar e s a rs 4 1 , , 1 2 3 6 0 9 8 7 9 4 1 , , 1 2 3 6 0 9 8 8 9 4 1 , , 0 2 3 7 1 9 8 2 9 4 1 , , 1 1 3 6 7 9 9 8 9 4 1 , , 1 1 3 4 7 9 1 8 9 4 1 , , 0 2 3 7 5 9 0 7 9 4 1 , , 1 2 3 0 6 9 9 6 9 4 1 , , 1 1 3 4 7 9 1 8 9 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 • January 1986 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1985 11998811 11998822 11998833 11998844 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS11 11 TToottaall rreesseerrvveess22 32.10 34.28 36.14 39.08 40.47 40.71 41.32 42.18 42.61 43.19 43.51 43.65 22 NNoonnbboorrrroowweedd rreesseerrvveess 31.46 33.65 35.36 35.90 38.88 39.39 39.99 40.97 41.50 42.12 42.22 42.46 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt33 31.61 33.83 35.37 38.50 39.94 40.26 40.52 41.64 42.01 42.69 42.87 43.09 44 RReeqquuiirreedd rreesseerrvveess 31.78 33.78 35.58 38.23 39.71 39.97 40.52 41.27 41.75 42.37 42.84 42.89 55 MMoonneettaarryy bbaassee44 158.10 170.14 185.49 199.03 202.95 203.56 205.35 207.66 208.83 211.15 212.39 213.48 Not seasonally adjusted 6 Total reserves2 32.82 35.01 36.86 40.13 40.07 41.25 40.64 41.96 42.41 42.60 43.22 43.75 7 Nonborrowed reserves 32.18 34.37 36.09 36.94 38.47 39.93 39.31 40.75 41.30 41.52 41.93 42.56 8 Nonborrowed reserves plus extended credit3 32.33 34.56 36.09 39.55 39.53 40.80 39.84 41.42 41.81 42.09 42.59 43.19 9 Required reserves 32.50 34.51 36.30 39.28 39.30 40.52 39.84 41.05 41.55 41.77 42.56' 42.99 10 Monetary base4 160.94 173.17 188.76 202.02 200.86 203.42 204.54 207.99 210.26 211.23 211.82 212.99 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.92 41.85 38.89 40.70 40.49 41.65 41.05 42.35 42.80 42.96 44.45 45.47 12 Nonborrowed reserves 41.29 41.22 38.12 37.51 38.90 40.33 39.72 41.15 41.70 41.89 43.16 44.28 13 Nonborrowed reserves plus extended credit3 41.44 41.41 38.12 40.09 40.03 40.77 40.45 41.88 42.23 42.50 43.83 44.89 14 Required reserves 41.61 41.35 38.33 39.84 39.73 40.91 40.25 41.45 41.95 42.14 43.78 44.71 15 Monetary base4 170.47 180.52 192.36 202.59 201.29 203.81 204.94 208.39 210.65 211.60 213.05 214.71 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 IItteemm11 D 19 e 8 c 1 . D 19 e 8 c 2 . D 19 e 8 c 3 . D 19 e 8 c 4 . July Aug/ Sept/ Oct. Seasonally adjusted 1 Ml 441.8 480.8 528.0 558.5 595.8 606.0 611.9 611.3 ? M2 1,794.4 1,954.9 2,188.8 2,371.7 2,490.6' 2,514.0 2,528.7 2,533.4 M3 2,235.8 2,446.8 2,701.8 2,995.0 3,114.4' 3,138.2 3,164.5 3,174.5 4 L 2,596.4' 2,854.7 3,168.8 3,539.4 3,686.2' 3,723.6 3,754.4 n.a. 5 4,255.8 4,649.8 5,177.2 5,927.1 6,351.3' 6,413.5 6,469.6 n.a. Ml components 6 Currency2 124.0 134.3 148.4 158.7 165.4 167.1 167.9 116699..00 7 Travelers checks3 4.4 4.3 4.9 5.2 5.9 5.9 5.9 5.9 a Demand deposits4 235.2 238.6 243.5 248.6 260.9 264.1 266.8 264.0 9 Other checkable deposits5 78.2 103.5 131.3 146.0 163.6 168.9 171.3 172.4 Nontransactions components 10 In M26 1,352.6 1,474.0 1,660.8 1,813.3 11,,889944..88 11,,990088..00 11,,991166..88 11,,992222..11 n In M3 only7 441.4 492.0 512.9 623.3 623.7 624.2 635.8 641.1 Savings deposits9 12. Commercial Banks 158.6 163.5 133.4 122.6 112233..22 112244..22 112244..66 112255..11 13 Thrift institutions 185.8 194.4 173.6 166.0 172.8 176.1 177.1 179.3 Small denomination time deposits9 14 Commerical Banks 347.8 379.8 350.7 387.0 338888..44 338844..11 338822..88 338811..88 15 Thrift institutions 475.8 471.7 433.8 498.6 500.1' 494.3 491.6 489.6 Money market mutual funds 16 General purpose and broker/dealer 150.6 185.2 138.2 167.5 175.8 176.7 117766..66 117766..77 17 Institution-only 38.0 51.1 43.2 62.7 65.0 63.6 62.3 63.3 Large denomination time deposits10 18 Commercial Banks11 247.5 262.0 228.9 264.4 226655..88'' 226677..66 227722..77 227766..99 19 Thrift institutions 54.6 66.2 101.9 151.8 154.2 153.7 155.7 156.1 Debt components 20 Federal debt 825.9 979.2 1,173.0 1,367.3 11,,447788..99 11,,449955..88 11,,550055..55 n.a. 21 Non-federal debt 3,429.9 3,670.6 4,004.3 4,559.8 4,872.4' 4,917.8 4,964.1 n.a. Not seasonally adjusted 7V 3M M 2 l 1, 4 7 5 9 2 8 . . 2 7 1, 4 9 9 5 1 9 . . 8 6 2,1 5 9 3 4 9. . 7 0 2,3 5 7 7 6 0. . 4 7 2, 5 4 9 % 9 . . 6 1 2,5 6 0 01 7 . . 6 3 2,5 6 1 0 7 8 . . 4 6 2,5 61 3 1 0 . . 1 1 74 M3 2,243.4 2,454.4 2,709.2 3,002.1 3,11^ 3,133.1 3,152.7 3,169.0 75 L 2,604.7 2,859.5 3,172.7 3,540.9 3,688.3' 3,715.7 3,737.9 n.a. 26 4,251.1 4,644.2 5,171.6 5,921.0' 6,328.1' 6,391.4 6,451.4 n.a. Ml components 77 Currency2 126.2 136.5 150.5 160.9 166.8 116677..77 116677..66 116688..66 28 Travelers checks3 4.1 4.0 4.6 4.9 6.6 6.5 6.2 5.9 79 Demand deposits4 243.4 247.2 252.2 257.4 262.2 260.9 265.5 265.4 30 Other checkable deposits5 78.5 104.1 132.4 147.2 163.5 166.4 169.3 171.3 Nontransactions components 31 M2« 1,346.5 1,467.8 1,654.2 1,806.3 1,897.5' 1,905.7 1,908.8 11,,991188..99 32 M3 only7 444.7 494.8 515.2 625.4 619.9 625.8 635.4 639.0 33M o C n o e m y m m e a r r c k ia e l t b d a e n p k o s s it accounts n.a. 26.3 223300..55 226677..11 331133..00 331177..77 332211..22 332244..44 34 Thrift institutions .0 16.9 148.7 147.9 171.1' 174.3 175.5 176.8 35S a C vi o n m gs m d e e rc p i o a s l i B ts a 8 nks 157.5 162.1 113322..22 121.4 112244..33'' 112244..00 112233..77 112244..66 36 Thrift institutions 184.7 193.2 172.5 164.9 175.1 175.5 176.1 179.1 Small denomination time deposits9 37 Commercial Banks A 347.7 380.1 351.1 387.6 338866..44 338855..44 338855..22 338844..99 38 Thrift institutions 475.5 471.7 434.2 499.4 497.5' 494.0 492.3 493.3 Money market mutual funds 39 General purpose and broker/dealer 150.6 185.2 113388..22 167.5 117755..88 117766..77 117766..66 117766..77 40 Institution-only 38.0 51.1 43.2 62.7 65.0 63.6 62.3 63.3 Large denomination time deposits10 41 251.7 265.2 230.8 226655..99 226644..99 226699..44 227744..44 227777..99 42 Thrift institutions 54.4 65.9 101.4 151.1 154.3 155.1 156.3 157.4 Debt components 43 Federal debt 823.0 976.4 11,,117700..22 1,364.7 11,,447755..88 11,,449955..88 11,,550066..99 n.a. 44 Non-federal debt 3,428.2 3,667.7 4,001.4 4,556.2 4,852.3' 4,895.6 4,944.6 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • January 1986 NOTES TO TABLE 1.21 1. Composition of the money stock measures and debt is as follows: 2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults commercial banks. Excludes the estimated amount of vault cash held by thrift of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits institutions to service their OCD liabilities. at all commercial banks other than those due to domestic banks, the U.S. 3. Outstanding amount of U.S. dollar-denominated travelers checks of nongovernment, and foreign banks and official institutions less cash items in the bank issuers. Travelers checks issued by depository institutions are included in process of collection and Federal Reserve float; and (4) other checkable deposits demand deposits. (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer 4. Demand deposits at commercial banks and foreign-related institutions other service (ATS) accounts at depository institutions, credit union share draft than those due to domestic banks, the U.S. government, and foreign banks and accounts, and demand deposits at thrift institutions. The currency and demand official institutions less cash items in the process of collection and Federal deposit components exclude the estimated amount of vault cash and demand Reserve float. Excludes the estimated amount of demand deposits held at deposits respectively held by thrift institutions to service their OCD liabilities. commercial banks by thrift institutions to service their OCD liabilities. M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) 5. Consists of NOW and ATS balances at all depository institutions, credit issued by all commercial banks and overnight Eurodollars issued to U.S. residents union share draft balances, and demand deposits at thrift institutions. Other by foreign branches of U.S. banks worldwide, MMDAs, savings and small- checkable deposits seasonally adjusted equals the difference between the seasondenomination time deposits (time deposits—including retail RPs—in amounts of ally adjusted sum of demand deposits plus OCD and seasonally adjusted demand less than $100,000), and balances in both taxable and tax-exempt general purpose deposits. Included are all ceiling free "Super NOWs," authorized by the and broker/dealer money market mutual funds. Excludes individual retirement Depository Institutions Deregulation committee to be offered beginning Jan. 5, accounts (IRA) and Keogh balances at depository institutions and money market 1983. funds. Also excludes all balances held by U.S. commercial banks, money market 6. Sum of overnight RPs and overnight Eurodollars, money market fund funds (general purpose and broker/dealer), foreign governments and commercial balances (general purpose and broker/dealer), MMDAs, and savings and small banks, and the U.S. government. Also subtracted is a consolidation adjustment time deposits, less the consolidation adjustment that represents the estimated that represents the estimated amount of demand deposits and vault cash held by amount of demand deposits and vault cash held by thrift institutions to service thrift institutions to service their time and savings deposits. their time and savings deposits liabilities. M3: M2 plus large-denomination time deposits and term RP liabilities (in 7. Sum of large time deposits, term RPs and term Eurodollars of U.S. amounts of $100,000 or more) issued by commercial banks and thrift institutions, residents, money market fund balances (institution-only), less a consolidation term Eurodollars held by U.S. residents at foreign branches of U.S. banks adjustment that represents the estimated amount of overnight RPs and Eurodolworldwide and at all banking offices in the United Kingdom and Canada, and lars held by institution-only money market funds. balances in both taxable and tax-exempt, institution-only money market mutual 8. Savings deposits exclude MMDAs. funds. Excludes amounts held by depository institutions, the U.S. government, 9. Small-denomination time deposits—including retail RPs— are those issued money market funds, and foreign banks and official institutions. Also subtracted is in amounts of less than $100,000. All individual retirement accounts (IRA) and a consolidation adjustment that represents the estimated amount of overnight RPs Keogh accounts at commercial banks and thrifts are subtracted from small time and Eurodollars held by institution-only money market mutual funds. deposits. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 10. Large-denomination time deposits are those issued in amounts of $100,000 Treasury securities, commercial paper and bankers acceptances, net of money or more, excluding those booked at international banking facilities. market mutual fund holdings of these assets. 11. Large-denomination time deposits at commercial banks less those held by Debt: Debt of domestic nonfinancial sectors consists of outstanding credit money market mutual funds, depository institutions, and foreign banks and market debt of the U.S. government, state and local governments, and private official institutions. nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- NOTE: Latest monthly and weekly figures are available from the Board's H.6 sumer credit (including bank loans), other bank loans, commercial paper, bankers (508) release. Historical data are available from the Banking Section, Division of acceptances, and other debt instruments. The source of data on domestic Research and Statistics, Board of Governors of the Federal Reserve System, nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt Washington, D.C. 20551. data are on an end-of-month basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 1.22 BANK DEBITS AND DEPOSIT TURNOVER Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates. 1985 Apr. May June July Aug. Sept. DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 90,914.4 109,642.3 128,440.8 156,513.2 149,252.8 146,714.9 157,128.3 147,455.5 159,593.3 2 Major New York City banks 37,932.9 47,769.4 57,392.7 70,621.4 66,394.3 66,615.5 69,952.8 65,645.6 72,765.4 3 Other banks 52,981.5 61,873.1 71,048.1 85,891.8 82,858.4 80,099.4 87,175.5 81,809.9 86,827.9 4 ATS-NOW accounts3 1,036.2 1,405.5 1,588.7 1,689.3 1,771.1 1,614.3 1,870.1 2,008.8 2,465.3 5 Savings deposits4 720.3 741.4 633.1 589.0 636.4 544.4 584.3 550.7 509.1 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 324.2 379.7 434.4 515.4 484.6 471.4 506.4 469.6 510.9 7 Major New York City banks 1,287.6 1,528.0 1,843.0 2,183.9 2,079.6 2,104.9 2,131.4 1,965.4 2,326.3 8 Other banks 211.1 240.9 268.6 316.5 300.2 286.5 314.2 291.5 308.9 9 ATS-NOW accounts3 14.5 15.6 15.8 15.4 16.1 14.4 16.4 17.1 20.6 10 Savings deposits4 4.5 5.4 5.0 5.0 5.4 4.6 4.9 4.6 4.2 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 91,031.8 109,517.6 128,059.1 151,536.1 151,342.3 148,651.5 157,898.2 152,985.1 148,788.8 12 Major New York City banks 38,001.0 47,707.4 57,282.4 67,422.3 67,249.3 67,999.4 70,496.1 68,401.8 68,967.9 13 Other banks 53,030.9 64,310.2 70,776.9 84,113.8 84,093.0 80,652.1 87,402.1 84,583.3 79,820.9 14 ATS-NOW accounts3 11,,002277..11 1,397.0 1,579.5 1,946.1 1,775.5 1,744.0 1,807.5 1,770.5 2,289.9 15 MMDA5 567.4 848.8 1,221.4 1,146.7 1,077.9 1,183.3 1,201.2 1,192.2 16 Savings deposits4 720.0 742.0 632.9 644.4 621.1 549.7 586.0 538.4 490.1 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 325.0 379.9 433.5 498.1 505.5 480.6 509.5 499.3 475.0 18 Major New York City banks 1,295.7 1,510.0 1,838.6 2,138.6 2,205.8 2,125.9 2,185.9 2,189.4 2,216.6 19 Other banks 211.5 240.5 267.9 308.4 312.7 290.8 314.8 307.4 282.9 20 ATS-NOW accounts3 14.4 15.5 15.7 17.2 16.2 15.5 15.9 15.3 19.4 21 MMDA5 2.8 3.5 4.2 3.9 3.5 3.5 3.8 3.8 22 Savings deposits4 4.5 5.4 5.0 5.4 5.2 4.6 4.8 4.5 4.1 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSAs that were available through June states and political subdivisions. 1977. Historical data for ATS-NOW and savings deposits are available back to 3. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- July 1977. Back data are available on request from the Banking Section, Division counts authorized for automatic transfer to demand deposits (ATS). ATS data of Research and Statistics, Board of Governors of the Federal Reserve System, availability starts with December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts, MMDA and special club accounts, such 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 Nonfinancial Statistics • January 1986 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1984 1985 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted 1 Total loans and securities2 1,682.8 1,701.0 1,714.8 1,724.0 1,742.3 1,758.9 1,765.8 1,785.3 1,799.1 1,814.3 1,824.8 1,838.0 2 U.S. government securities 257.0 259.4 260.2 260.1 265.8 266.9 261.1 265.9 266.6 271.0 270.9 272.5 3 Other securities 141.5 141.1 139.9 142.4 140.8 138.7 140.1 142.1 144.5 145.5 148.2 151.1 4 Total loans and leases2 1,284.3 1,300.6 1,314.7 1,321.5 1,335.6 1,353.3 1,364.6 1,377.3 1,388.0 1,397.8 1,405.7 1,414.4 5 Commercial and industrial 463.0 467.1 468.1 468.4 473.6 480.8 481.3 483.7 483.9 484.4 485.7 487.4 6 Bankers acceptances held3.. 5.6 6.0 5.2 5.0 6.1 6.4 5.4 4.9 4.7 5.1 5.0 4.7 7 Other commercial and industrial 457.3 461.1 462.9 463.4 467.4 474.4 475.9 478.7 479.2 479.3 480.7 482.8 8 U.S. addressees4 446.7 450.7 453.3 453.7 457.0 463.7 465.2 468.7 469.7 469.9 471.2 473.7 9 Non-U.S. addressees4.... 10.6 10.3 9.6 9.7 10.4 10.7 10.7 10.0 9.5 9.4 9.5 9.1 10 Real estate 367.7 371.8 375.6 377.9 382.1 385.8 389.9 393.8 397.4 401.4 405.3 408.3 11 Individual 243.5 246.7 251.0 254.6 257.7 261.9 265.5 268.7 271.5 274.9 277.4 279.3 12 Security 30.3 30.2 31.4 31.9 31.6 32.8 35.1 37.5 40.0 40.3 36.7 38.1 13 Nonbank financial institutions 31.1 31.2 31.3 31.2 30.9 30.6 31.2 31.5 31.2 31.6 32.3 32.5 14 Agricultural 40.6 40.4 40.3 39.9 39.6 39.5 39.4 39.4 39.4 39.6 3399..66 40.1 15 State and political subdivisions 41.4 42.3 44.2 47.0 46.7 46.9 47.1 47.5 47.4 47.8 48.7 48.7 16 Foreign banks 11.7 11.9 11.5 11.4 11.4 11.1 10.8 10.5 10.3 10.4 10.1 9.9 17 Foreign official institutions ... 8.5 8.4 8.3 7.9 7.9 7.7 7.8 7.8 7.6 7.2 6.5 6.8 18 Lease financing receivables... 15.1 15.3 15.5 15.6 15.8 16.1 16.4 16.7 16.9 17.3 17.5 17.6 19 All other loans 31.5 35.3 37.2 35.7 38.4 39.9 40.1 40.1 42.3 43.1 45.8 45.8 Not seasonally adjusted 20 Total loans and securities2 1,684.0 1,701.9 1,725.8 1,732.0 1,740.4 1,755.0 1,766.0 1,781.4 1,800.0 1,807.9 1,818.1 1,836.4 21 U.S. government securities 254.1 255.2 256.9 260.1 266.8 269.0 266.6 268.0 270.3 270.8 269.3 270.2 2 2 3 2 T O o th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,2 1 8 4 9 0 . . 0 9 1,3 1 0 4 5 1 . . 5 2 1,3 1 2 4 7 1 . . 4 5 1,3 1 2 4 8 3 . . 7 3 1,3 1 3 4 2 1 . . 6 0 1,3 1 4 3 7 8 . . 1 9 1,3 1 5 3 9 9 . . 7 8 1,3 1 7 4 0 2 . . 7 7 1,3 1 8 4 5 4 . . 5 1 1,3 1 9 4 2 4 . . 9 1 1,4 1 0 4 1 7 . . 1 7 1,4 1 1 5 5 0 . . 8 4 2 2 4 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 ce u s s t h ri e a l l d . 3 . . . . . 46 5 3 . . 5 8 46 5 7 . . 9 3 47 5 1. . 2 7 470 5. . 1 3 473 6 . . 1 0 48 66 0 .. . 33 3 48 55 1 .. . 55 5 48 44 2 .. . 99 2 48 44 2 .. . 88 4 48 55 3 .. . 00 5 48 44 3 .. . 99 6 48 44 7. .. 4 66 26 Other commercial and 22 2 77 8 U No . i S n n . d - U u ad s . t S d r . i r a e l a s s d e d e r s e 4 ssees4.... 4 4 5 4 1 8 7 1 . . . 3 3 1 4 4 6 5 1 1 0 1 . . . 4 5 0 4 4 6 5 1 5 5 0 . . . 5 0 5 4 4 6 5 5 9 5 . . . 2 4 8 4 4 6 5 7 9 7 . . . 1 2 9 4 4 7 6 1 4 3 0 . . . 0 9 1 4 4 7 6 9 6 6 . . . 9 0 1 4 4 7 6 9 7 7 . . . 3 6 8 4 4 7 6 9 7 8 . . . 3 6 3 4 4 7 6 9 8 9 . . . 5 4 0 4 4 7 6 9 8 9 . . . 7 5 2 4 4 8 7 9 2 3 . . . 4 4 8 29 Real estate 368.9 372.8 376.2 378.6 381.7 384.7 388.6 392.8 396.9 400.8 405.5 409.5 30 Individual 245.3 248.4 254.0 257.0 257.4 259.7 263.2 266.5 269.6 273.2 277.2 280.4 31 Security 30.2 31.7 35.2 33.0 30.8 32.2 35.0 3366..00 39.9 3388..33 3355..88 3366..77 32 Nonbank financial institutions 31.0 31.0 31.5 31.2 30.7 30.6 31.3 31.3 31.2 31.7 32.4 32.6 3333 Agricultural 41.2 40.5 40.0 39.3 38.8 38.6 38.8 3399..33 39.9 4400..44 4400..55 4400..99 34 State and political subdivisions 41.4 42.3 44.2 47.0 46.7 46.9 47.1 47.5 47.4 47.8 48.7 48.7 3355 Foreign banks 12.0 12.2 12.2 11.7 11.4 10.9 10.4 10.3 9.9 10.2 9.9 10.0 36 Foreign official institutions ... 8.5 8.4 8.3 7.9 7.9 7.7 7.8 7.8 7.6 7.2 6.5 6.8 37 Lease financing receivables... 15.0 15.1 15.5 15.8 16.0 16.3 16.4 16.7 16.9 17.2 17.4 17.5 38 All other loans 31.7 35.5 39.2 37.0 38.2 39.1 39.6 40.3 43.8 42.9 43.7 45.3 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 All 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1984 1985 SSoouurrccee Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Total nondeposit funds 1 Seasonally adjusted2 112.0 108.5 102.5 113.9 116.9 105.2 112.0 112.6' 108.6' 112.9' 116.1 118.8 2 Not seasonally adjusted 117.5 111.1 104.8 117.4 119.4 108.4' 117.2 114.9' 107.4' 114.8' 116.3' 120.4 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 145.0 140.5 138.8 146.8 147.2 138.8 142.0 146.7 146.9 144.1 146.3 145.4 4 Not seasonally adjusted 150.5 143.1 141.1 150.2 149.7 141.9 147.2 149.0 145.8 146.0 146.4 147.0 5 Net balances due to foreign-related institutions, not seasonally adjusted -33.1 -32.0 -36.3 -32.8 -30.3 -33.5' -30.0 -34.lr -38.4' -31.2' -30.2 -26.6 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -32.7 -31.4 -34.8 -31.6 -29.5 -32.4 -29.5r -32.5 -38.3' -32.8' -30.7 --2288..77 7 Gross due from balances 68.3 69.0 71.4 70.5 71.4 74.9 74.6 76.5' 79.3 76.0 74.8 74.2 8 Gross due to balances 35.6 37.6 36.6 38.9 41.9 42.5 45.0 44.1 41.(V 43.2' 44.1 45.5 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 -.4 -.6 -1.5 -1.2 -.8 -1.1 -.5 -1.6 0.0 1.6 ..55 22..11 10 Gross due from balances 50.7 52.0 53.1 54.1 53.4 51.8 52.4 53.8 54.9 55.3 56.1 55.5 11 Gross due to balances 50.4 51.4 51.6 52.8 52.7 50.7 52.0 52.1 54.9 56.9 56.6 57.6 Security RP borrowings 12 Seasonally adjusted® 84.0 81.1 82.3 90.1 92.0 85.4 85.5 86.5 87.1 87.4 9900..88 8888..44 13 Not seasonally adjusted 87.0 81.1 82.2 91.1 92.0 86.0 88.3 86.3 83.4 86.8 88.4 87.5 U.S. Treasury demand balances7 14 Seasonally adjusted 17.3 16.1 14.7 13.0 11.8 14.6 22.6 17.4 24.9 1166..77 1155..33 33..88 15 Not seasonally adjusted 10.4 12.5 18.5 15.8 12.8 15.4 20.9 14.9 23.1 13.4 16.8 5.4 Time deposits, $100,000 or more8 16 Seasonally adjusted 323.0 325.8 324.8 325.4 329.9 332.6 331.2 326.8 323.2 325.1' 330.3' 333344..44 17 Not seasonally adjusted 322.9 327.3 325.6 324.9 330.3 330.1 329.1 326.4 322.3 326.9' 331.9' 335.4 1. Commercial banks are those in the 50 states and the District of Columbia banks, term federal funds, overdrawn due from bank balances, loan RPs, and with national or state charters plus agencies and branches of foreign banks, New participations in pooled loans. 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 DomesticN onfinancialS tatistics • January 1986 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS1 Last-Wednesday-of-Month Series Billions of dollars 1984 1985 AAccccoouunntt Dec/ Jan/ Feb/ Mar/ Apr/ May' June' July' Aug/ Sept. Oct. ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 1,865.9 1,856.1 1,875.9 1,883.4 1,899.2 1,908.6 1,927.3 1,948.5 1,952.1 1,969.9 1,979.1 2 Investment securities 377.6 381.2 382.2 383.7 383.9 390.3 392.1 392.3 393.7 397.0 396.3 3 U.S. government securities 242.7 245.1 248.1 251.1 250.4 254.4 255.3 256.1 254.2 254.4 249.3 4 Other 135.0 136.1 134.1 132.5 133.5 135.9 136.8 136.2 139.6 142.6 147.0 5 Trading account assets 22.9 24.2 27.6 23.7 23.5 23.5 23.1 22.3 24.2 26.4 25.0 6 Total loans 1,465.4 1,450.8 1,466.0 1,476.0 1,491.8 1,494.9 1,512.1 1,534.0 1,534.1 1,546.5 1,557.8 7 Interbank loans 127.0 125.4 128.8 126.0 130.9 124.0 123.1 133.0 128.6 129.1 131.7 8 Loans excluding interbank 1,338.4 1,325.4 1,337.3 1,350.0 1,360.9 1,370.8 1,388.9 1,401.0 1,405.5 1,417.5 1,426.1 9 Commercial and industrial 477.2 470.2 477.0 483.2 482.1 483.4 484.3 485.9 484.6 489.2 488.8 10 Real estate 378.3 380.9 383.3 386.9 390.7 395.8 400.0 405.6 409.3 412.8 418.3 11 Individual 256.1 258.2 259.0 261.4 265.2 268.5 272.1 276.1 280.0 282.1 285.1 12 All other 226.9 216.1 218.0 218.5 222.9 223.0 232.6 233.4 231.5 233.4 233.9 13 Total cash assets 202.0 188.0 189.4 183.6 187.6 202.3 190.4 198.0 188.4 188.2 190.1 14 Reserves with Federal Reserve Banks 20.5 20.9 19.6 19.8 22.9 20.7 21.6 21.0 24.5 24.9 19.6 15 Cash in vault 23.3 21.9 21.8 21.3 21.3 23.3 22.2 22.0 22.7 22.1 22.6 16 Cash items in process of collection ... 75.9 66.9 68.8 63.9 64.2 76.5 68.4 70.5 62.5 61.4 67.9 17 Demand balances at U.S. depository institutions 34.6 30.9 32.3 31.7 30.2 35.2 31.3 33.5 30.6 30.8 31.6 18 Other cash assets 47.8 47.4 46.8 46.9 49.0 46.6 46.8 51.0 48.2 49.1 48.4 19 Other assets 196.8 191.8 195.4 188.5 188.6 183.4 189.4 194.5 180.8 185.8 178.1 20 Total assets/total liabilities and capital ... 2,264.8 2,235.9 2,260.7 2,255.5 2,275.4 2,294.2 2,307.1 2,341.1 2,321.3 2,344.0 2,347.3 21 Deposits 1,632.6 1,605.9 1,619.5 1,627.5 1,638.5 1,661.5 1,659.8 1,685.0 1,676.9 1,683.1 1,705.6 22 Transaction deposits 491.3 457.1 459.5 457.9 465.6 480.3 474.0 492.3 475.4 474.9 491.4 23 Savings deposits 386.6 400.4 407.2 410.4 410.1 418.7 425.6 434.3 436.5 438.3 443.8 24 Time deposits 754.6 748.4 752.7 759.2 762.9 762.5 760.1 758.4 765.0 769.8 770.4 25 Borrowings 304.6 307.0 309.4 301.3 310.3 305.4 315.8 321.6 308.9 323.2 309.0 26 Other liabilities 181.1 173.8 182.2 177.0 175.6 176.0 179.7 181.1 182.0 183.6 177.9 27 Residual (assets less liabilities) 146.5 149.1 149.6 149.7 150.9 151.3 151.8 153.4 153.4 154.1 154.8 MEMO 28 U.S. government securities (including trading account) 257.0 262.1 269.6 268.6 266.7 269.3 271.0 270.0 268.3 271.5 265.1 29 Other securities (including trading account) 143.5 143.3 140.2 138.8 140.7 144.4 144.3 144.6 149.7 151.9 156.2 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 1,767.4 1,761.8 1,777.1 1,784.8 1,799.6 1,812.7 1,829.2 1,847.9 1,850.8 1,863.6 1,872.3 31 Investment securities 370.6 373.9 374.9 376.9 377.1 383.8 385.1 385.1 386.5 389.1 388.1 32 U.S. government securities 238.0 240.3 243.4 246.9 246.4 250.7 251.4 252.4 250.4 250.5 245.0 ii Other 132.6 133.5 131.5 130.1 130.7 133.1 133.8 132.7 136.0 138.6 143.1 34 Trading account assets 22.9 24.2 27.6 23.7 23.5 23.5 23.1 22.3 24.2 26.4 25.0 35 Total loans 1,373.9 1,363.8 1,374.6 1,384.1 1,399.0 1,405.5 1,420.9 1,440.5 1,440.1 1,448.1 1,459.2 36 Interbank loans 103.0 100.7 101.1 100.1 103.3 100.6 100.6 110.0 104.7 103.8 106.8 37 Loans excluding interbank 1,270.9 1,263.1 1,273.5 1,284.0 1,295.7 1,304.9 1,320.3 1,330.5 1,335.5 1,344.2 1,352.4 38 Commercial and industrial 430.5 426.1 431.9 436.0 436.5 436.6 436.0 437.6 435.7 437.9 437.4 39 Real estate 372.7 375.8 378.0 381.8 385.4 390.4 394.4 399.9 403.7 407.0 412.7 40 Individual 255.9 258.0 258.7 261.2 265.0 268.3 271.8 275.9 279.8 281.8 284.8 41 All other 211.7 203.2 204.8 205.0 208.7 209.6 218.1 217.2 216.3 217.5 217.5 42 Total cash assets 190.4 175.9 178.0 172.7 176.0 191.2 179.2 185.3 176.4 176.1 178.0 43 Reserves with Federal Reserve Banks 19.2 20.2 18.7 19.2 22.3 19.6 20.9 20.4 23.8 24.4 18.6 44 Cash in vault 23.3 21.9 21.8 21.3 21.3 23.2 22.2 22.0 22.6 22.0 22.6 45 Cash items in process of collection ... 75.7 66.7 68.5 63.7 63.9 76.2 68.2 70.3 62.2 61.1 67.7 46 Demand balances at U.S. depository institutions 33.0 29.5 31.0 30.4 28.8 33.8 29.8 32.2 29.0 29.4 30.2 47 Other cash assets 39.4 37.6 38.0 38.1 39.6 38.3 38.1 40.4 38.8 39.2 38.9 48 Other assets 142.1 137.7 139.0 137.2 137.5 131.5 137.7 144.9 132.6 133.3 132.0 49 Total assets/total liabilities and capital... 2,099.9 2,075.4 2,094.2 2,094.7 2,113.1 2,135.4 2,146.2 2,178.1 2,159.8 2,173.0 2,182.3 50 Deposits 1,589.2 1,563.3 1,575.4 1,582.4 1,593.8 1,618.4 1,617.2 1,642.3 1,631.9 1,636.6 1,659.5 51 Transaction deposits 484.7 450.8 453.1 451.7 459.3 473.8 467.7 486.0 468.9 468.3 484.9 52 Savings deposits 385.6 399.3 406.1 409.2 408.9 417.5 424.3 433.0 435.1 437.0 442.4 53 Time deposits 718.9 713.2 716.2 721.6 725.6 727.1 725.2 723.3 727.9 731.4 732.2 54 Borrowings 243.5 247.1 247.6 240.6 248.5 246.1 253.8 258.4 249.6 259.0 248.0 55 Other liabilities 123.6 118.5 124.3 124.8 122.6 122.4 126.1 126.8 127.4 125.9 122.7 56 Residual (assets less liabilities) 143.7 146.5 146.9 147.0 148.3 148.6 149.1 150.7 150.7 151.5 152.1 1. Data have been revised back to January 1984. Revised end-of-month data NOTE. Figures are partly estimated. They include all bank-premises subsidiarfrom January 1984 through November 1984 are available on request from the ies and other significant majority-owned domestic subsidiaries. Loan and securi- Banking Section, Division of Research and Statistics, Board of Governors of the ties data for domestically chartered commercial banks are estimates for the last Federal Reserve System, Washington, D.C. 20551. Wednesday of the month based on a sample of weekly reporting banks and 2. Commercial banking institutions include insured domestically chartered quarter-end condition report data. Data for other banking institutions are esticommercial banks, branches and agencies of foreign banks, Edge Act and mates made for the last Wednesday of the month based on a weekly reporting Agreement corporations, and New York State foreign investment corporations. sample of foreign-related institutions and quarter-end condition reports. 3. Insured domestically chartered commercial banks include all member banks and insured nonmember banks. 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 1985 Account Sept. 4 Sept. 11 Sept. 18 Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 1 Cash and balances due from depository institutions 107,473' 92,576' 90,842' 87.69C 100,802' 88,943 108,742 93,194 2 Total loans, leases and securities, net 866,648' 863,786' 861,262' 862,03y 869,551' 871,982 864,442 858,864 3 U.S. Treasury and government agency 88,602' 86,850 86,243 87,309 84,692' 86,268 85,027 84,159 1 1 1 1 1 1 1 4 6 7 8 9 5 0 1 2 3 4 5 6 O O t t I T T I h h n n e r r e v v a a O O S O O r r e d d e t v n t v t s a s s O i i O h r e e e e n n t t t a e m e r n r c m v g g d r y s e u e o e i f e e a a r r b i n a n n n y i v a c c g o t n t e o t r e e c c i d n n e a o o a a a o t d s y e r h u u c c c r p e s c c r n n c o o y , a l o o o t t o r e l e r c u i u u s u s a l t o g s n n i e r n c r h t t s t p a s , a l o f b i s r v s y s a e u e t b e m t y s d e a s i t a v t u o r i s r s c i i k t o y s n , s a , n b d y s m ec a u tu ri r t i i t e y s 7 4 4 2 3 5 3 1 1 1 1 5 4 6 6 0 5 5 2 5 3 7 , . , , . , , , , , , , , 1 4 4 2 7 1 8 5 8 1 4 9 4 8 6 6 4 4 6 8 7 7 8 1 1 W 3 3 2 1 0 3 5 7 0 5 5 2 ' ' ' 7 4 4 2 3 5 3 1 1 1 0 5 5 7 0 6 5 3 2 5 6 3 , , , , , , , , , , , , , 7 5 2 3 3 9 6 1 7 3 3 8 4 7 4 4 1 8 8 5 9 0 7 3 9 2 5 7 9 9 5 8 8 0 3 9 0 C 6 ' ' 4 4 7 2 3 5 3 1 1 2 5 6 7 0 0 5 5 3 2 5 6 3 , , , , , , , , , , , , , 0 1 1 3 1 9 4 3 8 4 0 2 8 8 1 9 0 7 8 0 7 9 3 5 7 5 2 7 2 5 0 6 6 4 0 9 8 6 7 ' ' ' 4 4 7 3 5 3 1 1 1 2 5 6 7 6 0 5 3 3 5 7 9 3 , , , , , , , , , , , , , 3 6 4 4 2 6 9 0 4 8 1 1 9 5 7 8 7 4 7 3 1 2 7 8 5 3 2 4 4 8 0 3 1 2 1 3 5 9 3 ' ' ' 6 5 4 4 3 3 1 1 1 6 3 5 9 8 2 5 3 5 6 9 5 4 , , , , , , , , , , , , , 6 4 3 9 4 0 8 5 2 1 8 2 1 8 2 8 8 2 5 1 3 3 2 0 1 3 8 1 4 6 2 7 1 2 4 7 6 2 8 ' ' ' ' ' ' ' 4 4 6 3 5 3 1 1 1 2 8 4 6 5 7 2 5 3 6 8 8 4 , , , , , , , , , , , , , 8 5 1 7 1 2 8 5 7 1 4 5 0 9 6 9 3 3 1 9 2 0 7 4 8 4 7 9 4 1 4 8 7 8 0 9 1 6 8 6 5 4 4 3 3 1 1 1 4 6 7 3 2 8 5 5 6 3 8 7 4 , , , , , , , , , , , , , 6 7 3 7 0 9 3 2 2 5 4 3 0 2 1 1 4 2 6 7 3 8 5 6 1 0 5 8 1 6 6 9 5 4 0 1 0 6 2 4 6 4 3 5 3 1 1 1 6 3 7 4 5 3 8 4 6 3 8 7 4 , , , , , , , , , , , , , 7 4 7 9 2 1 6 7 6 4 0 0 2 4 0 1 5 6 1 7 7 6 2 9 4 4 4 2 6 6 3 5 9 4 0 3 2 4 8 2 2 2 2 2 2 2 2 1 1 1 7 0 1 2 3 4 5 6 7 8 9 O Fe t T O T T h d o o o e e t C r h r o c a n e o l l o t A B r o o m h m n a f l a l e l N U m u n o b n m r s n o a s a o k . e S e n d t n n e r a h r . s k c s r - n c e , s i U a d s r i a b g a o d l a . r l r l S l d c o e o d a . r c b k a 1 n s e e a a s d s e s p n 2 e d r s s t s k i d e a n , s e r n a d e g s n c u s r d e s o s s t e s d r s e i a e 2 s a n a l d 2 l e r c s o m in m s e e r c c u i r a i l t i p es a per 6 6 2 2 2 5 3 8 6 5 4 5 1 7 4 7 6 3 2 8 2 6 1 2 , , , , , , , , , , , 5 9 6 2 3 3 2 8 7 4 9 3 3 2 9 2 9 7 6 6 1 5 5 7 6 0 7 9 0 9 1 3 4 ' ' ' ' 6 6 2 2 2 5 3 7 6 5 5 4 1 7 4 2 2 9 9 5 9 0 5 2 , , , , , , , , , , , 9 5 8 4 3 4 4 5 3 6 6 2 1 8 5 7 2 6 6 3 3 4 9 1 5 2 7 0 6 4 2 4 c ' ' ' 6 6 2 2 2 5 3 8 6 5 5 4 1 7 4 4 5 3 3 8 2 1 6 2 , , , , , , , , , , , 1 8 7 4 3 5 0 2 5 0 7 9 9 5 3 5 0 5 8 1 1 6 2 7 9 4 5 4 8 9 6 9 6 ' ' ' ' 6 6 2 2 2 5 3 5 8 6 5 4 1 7 4 2 5 4 0 1 7 2 5 2 , , , , , , , , , , , 9 0 8 5 7 4 3 5 6 3 0 0 7 4 8 3 2 7 0 5 6 9 8 0 6 4 8 3 9 4 7 5 6 ' ' ' ' 6 6 2 2 2 5 5 3 7 5 4 8 1 7 6 4 1 6 2 5 6 4 8 3 , , , , , , , , , , , 1 3 9 9 7 0 4 4 1 9 4 6 9 5 4 0 9 3 3 7 3 9 1 8 1 3 7 6 8 3 C C 8 ' ' ' ' ' ' 6 6 2 2 2 8 7 6 4 5 4 5 1 6 4 5 0 1 2 2 2 5 0 4 , , , , , , , , , , , 5 9 2 2 9 9 3 7 7 2 4 4 9 4 7 5 0 5 6 0 4 8 4 2 2 5 5 3 3 5 7 8 5 6 6 2 2 2 5 5 7 8 3 4 4 1 4 5 5 2 0 5 5 2 9 4 4 , , , , , , , , , , , 9 0 9 9 8 1 8 4 6 7 1 1 6 5 4 0 9 6 2 3 2 7 4 2 3 8 3 8 8 5 7 3 7 6 6 2 2 2 5 3 6 5 8 5 4 1 3 5 4 5 7 2 1 2 0 5 3 , , , , , , , , , , , 9 3 5 8 7 1 7 2 2 3 1 4 9 0 9 5 0 3 3 6 7 0 1 4 4 1 1 0 9 8 6 6 2 28 Real estate loans2 172,533 173,162' 173,5^ 174,128' 174,931' 175,305 175,934 176,180 29 To individuals for personal expenditures 126,006' 126,333' 126,74C 127,281' 127,383' 127,512 127,610 127,921 30 To depository and financial institutions 41,637' 40,119' 40,731' 40,446' 41,586' 40,916 41,401 39,592 31 Commercial banks in the United States 10,901' 10,098 10,560 10,778 10,569 11,187 10,842 10,528 32 Banks in foreign countries 5,863 5,006 5,421 5,309 6,099' 5,199 5,865 5,033 33 Nonbank depository and other financial institutions 24,873' 25,015' 24,751' 24,359' 24,918' 24,530 24,694 24,032 34 For purchasing and carrying securities 17,171 17,719 17,962 16,466 17,566 18,639 17,491 15,369 35 To finance agricultural production 7,166 7,164 7,115 7,094 7,131 7,132 7,087 7,050 3 3 3 4 4 4 4 3 6 7 8 0 1 2 3 9 A L O L E e l t l h a S o e s S T A T e r t : h o o l L l U l e f o i f r s o o n n a o t a a n t e a a r n h n s a t e s e e c s r i a s r a i g n e n n n n t e g a s d d d n g d r l l o i e e e n v a p a c c e s s e o o r e e i l n m v i s t r m , a i e e c b n e s a l e n e l e r t t s 2 s v s u e a 2 b n d d i v o is ff i i o c n i s a l institutions 6 1 3 6 1 1 1 3 0 3 5 4 6 4 0 3 , , , , , , , , 9 3 1 0 2 3 5 1 7 2 5 0 5 9 2 6 5 9 3 9 8 8 2 c ' ' 6 1 3 6 1 1 1 2 3 0 5 1 3 4 3 9 , , , , , , , , 3 7 1 9 2 2 1 6 3 0 5 6 1 3 8 0 5 5 8 6 2 8 7 9 ' ' ' 6 1 3 6 1 1 2 1 0 4 3 5 4 4 8 3 , , , , , , , , 6 7 1 2 7 2 9 2 3 3 5 6 2 2 4 5 9 0 4 9 8 5 3 3 ' ' ' 6 1 3 6 1 1 2 1 3 0 5 3 4 4 6 3 , , , , , , , , 3 8 1 2 8 3 4 1 7 4 6 7 5 3 4 6 1 6 6 2 5 6 4 4 ' ' ' 6 1 3 7 1 1 3 1 3 1 5 0 6 4 0 3 , , , , , , , . 3 0 1 7 8 3 0 2 8 8 0 2 2 1 9 9 3 2 3 5 2 6 7 C ' ' ' ' 6 1 3 6 1 1 1 2 1 3 7 5 4 4 3 6 , , , , , , , , 2 0 0 1 0 3 0 7 6 9 6 1 8 4 6 0 7 2 3 2 4 0 8 4 6 1 3 6 1 1 2 1 1 3 6 5 4 4 8 3 , , , , , , , , 1 4 9 1 3 7 5 1 3 0 3 4 3 3 4 2 4 3 8 5 0 6 0 5 6 1 3 6 1 1 2 1 3 1 5 3 4 4 5 3 , , , , , , , , 2 2 1 4 2 3 0 1 8 2 3 3 6 5 5 7 7 5 5 9 5 7 4 7 44 Total assets 1,104,642' 1,085,971' 1,080,831' 1,076,166' 1,101,178' 1,087,630 1,101,724 1,077,112 45 Demand deposits 212,753' 192,333' 193,274 186,682 209,719' 189,278 214,748 188,941 46 Individuals, partnerships, and corporations 160,475' 148,353' 146,632' 142,323' 158,694' 146,255 162,371 144,153 47 States and political subdivisions 5,658 4,864 5,190 5,094 6,016 4,686 5,342 5,028 48 U.S. government 1,552 2,521 3,979 1,839 1,414 1,334 1,787 2,441 5 5 4 5 5 5 6 5 5 5 5 6 5 6 6 6 2 3 9 1 4 5 4 0 6 7 8 3 9 0 1 2 T N L r i o C a D F a O D A B I U F T S B n n n b o o t e r a l e t e o . t d a l i s e h r r S r r n p p r l a t i t e e a a i e o r . k o e v i o c t i i o r n s f t s s i g s i s g g t i u h e w s d i i i n e l n o s a i r a e o t t i u d n i y o a o v r n n c n g a g f b r r d e t a l f g o o y l y o t i i s r b o n i s a l r o v , a v n p i d a r x n i i t e b b e m e o f n l n p i - r i a r e i r o l o a s s a l b n g e i o n s n i t r f t n t r a n n m t m i m i r i f c t i d t a t l c t o i n e e u u a e c c - n a e s w s F e t l n t n e l o d n i o i r e c r e t o u o o t f s s a s s d d s e s o n n n t h u n ' , s u e h r s s t a i b c m r r b e p o n n d b h a i i r i s o f d n e o n o l i o e f r v s t t n i c r a d R h e o U c t i r e n k h s s i i f a o e y d s n n a i e f n w o s i l a i c e t n c U i t e d e i n r e s o d a d e v n d s l r m e i t p m i t i S n n o e t a B t u o o d s r n a t a t a t n d t i e i n t S e o e t i u s k y t d n o a a s t 3 s e n n i t o d p s e a n s o n s d s d i e ts b b e a n n tu k r s e . s . 4 4 2 1 7 3 4 2 2 9 0 9 4 8 1 6 2 9 9 4 7 4 2 7 7 , , , , , , , , , , , . , 4 1 4 6 1 7 4 2 7 7 3 4 8 1 2 3 4 0 4 7 6 4 2 5 8 6 6 7 7 4 9 6 7 9 8 5 0 2 6 8 0 5 1 2 1 0 C 5 ' 4 4 2 1 4 3 7 2 2 9 0 9 0 5 8 9 2 8 4 5 8 1 3 2 1 8 , , , , , , , , , , . , , , 2 2 3 2 4 1 4 8 4 3 1 2 9 9 7 8 7 9 8 7 7 6 0 8 9 5 9 5 2 6 6 4 2 1 0 2 6 6 8 6 5 8 3 C 5 4 5 4 ' ' ' ' ' ' 4 4 2 1 3 7 9 2 3 2 0 8 1 8 5 5 8 9 2 2 3 9 4 3 6 5 , , , , . . , , , , , , , 2 2 4 4 4 3 5 7 8 7 4 1 9 1 8 3 6 2 5 2 2 0 5 9 1 3 8 7 0 9 3 6 5 8 9 9 8 0 5 0 1 4 1 5 7 3 2 2 ' ' ' ' 4 4 2 1 7 3 2 9 2 3 0 8 1 9 8 6 2 9 3 4 5 8 5 2 6 6 1 1 , , , , , , , , , , , , , , , 3 6 5 3 6 3 9 3 0 0 4 8 0 2 8 3 2 1 4 6 6 3 3 6 0 7 7 8 4 7 8 5 3 6 9 9 5 0 1 9 7 1 6 3 2 2 6 6 ' ' ' ' ' 4 4 2 1 8 7 4 2 3 2 0 9 1 9 8 6 2 7 5 9 5 8 1 6 9 0 , , , , , , , , , , , , , 0 7 9 9 3 4 1 7 4 8 0 2 5 4 7 3 1 3 4 8 2 2 8 6 7 8 9 1 8 2 6 2 9 3 7 2 3 1 1 7 2 4 1 6 C 0 C 3 ' ' ' ' ' 4 4 2 2 4 4 1 7 2 2 8 1 1 5 9 2 0 0 9 2 5 7 8 3 3 , , , , , , , , , , , , , 7 2 1 3 1 1 3 0 7 8 6 4 2 1 8 1 2 2 5 9 7 8 9 2 3 8 8 9 6 2 9 9 8 8 3 3 8 1 4 9 4 7 2 9 2 6 1 7 4 4 2 2 4 2 7 0 2 4 8 0 9 2 0 5 5 9 7 3 7 0 9 4 , , , , , , , , , , , , 3 1 0 4 5 0 3 6 9 4 5 0 6 8 2 3 6 8 1 3 9 5 9 7 9 9 8 2 1 8 6 3 2 9 4 9 8 7 2 6 3 0 9 4 6 5 5 8 4 4 2 2 9 4 0 7 2 0 2 3 1 9 2 0 0 7 5 9 2 1 9 5 1 1 , , , , , , , , , , , , , , 4 0 0 2 3 3 1 1 8 2 9 2 4 5 2 9 6 1 7 0 8 6 1 8 2 7 9 4 7 5 4 1 4 4 4 7 5 1 4 6 3 4 2 4 0 1 9 5 65 Total liabilities 1,028,181' 1,009,232' 1,004,36c 999,754' 1,023.94C 1,009,971 1,024,297 999,771 66 Residual (total assets minus total liabilities)4 76,461' 76.74C 76.47C 76,412' 77,238' 77,658 77,427 77,341 7 6 7 7 6 6 7 0 7 1 2 8 9 3 T L T T M N o o i o o E m C O t t a n M a a n o e t t l l h O s r m d l a l e o o s m r n e o a a p s e n n l a o d r s s c s c t i o i a a i t a u s n n o l d d t n i r a n i l l n s g e e d a a h a a v m t s s i i e e n n t o o s s d g u u s ( n a ( g s g f t d t s f r r r e i o o i l o p s s a i f a s s l o ) ) t s $ e i a a 1 s t n s d — 0 d j 0 ( u t , i o 0 i s n n 0 t t c a e v 0 l l d u e 6 2 o s d '5 r t i m n m g e o n M r t e s M ad D ju A s s te ) d .. 5 . 8 6 1 1 3 9 5 8 7 2 1 5 7 1 , , , , , , 7 2 9 1 0 8 3 3 3 0 9 6 9 1 2 0 3 7 4 6 6 ' ' 8 6 1 1 3 8 5 8 2 9 1 1 6 7 , , , , , , 7 9 2 5 6 2 6 0 6 6 9 7 7 3 2 4 2 9 2 7 6 ' ' ' ' 8 6 1 1 3 9 8 5 3 2 1 1 7 6 , , , , , , 9 0 6 4 8 2 4 9 9 9 0 8 4 0 2 4 4 0 6 4 7 ' ' ' ' 8 6 1 1 3 8 8 5 2 4 9 1 7 8 , , , , , , 1 2 9 3 8 0 1 0 0 6 6 4 1 7 6 9 2 5 7 6 7 ' ' ' 8 6 1 1 4 9 8 5 0 2 8 8 8 1 , , , , , , 2 1 2 2 8 8 1 5 4 8 9 8 2 5 1 5 5 8 7 8 2 ' ' ' 8 6 1 1 3 9 8 5 2 7 5 9 1 8 , , , , , , 0 7 0 1 8 2 7 7 2 0 3 2 4 7 2 5 0 3 3 9 1 8 6 1 1 3 9 8 5 2 5 9 4 1 7 , , , , , , 2 0 9 8 4 2 1 4 7 1 9 6 3 3 9 7 6 2 1 5 2 1 8 6 1 8 3 9 5 9 2 1 1 0 7 , , , , , , 0 7 2 0 5 0 4 5 9 4 4 0 2 6 0 7 8 5 9 5 7 1. Includes securities purchased under agreements to resell. 5. Exclusive of loans and federal funds transactions with domestic commercial 2. Levels of major loan items were affected by the Sept. 26, 1984, transaction banks. between Continental Illinois National Bank and the Federal Deposit Insurance 6. Loans sold are those sold outright to a bank's own foreign branches, Corporation. For details see the H.4.2 statistical release dated Oct. 5, 1984. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 3. Includes federal funds purchased and securities sold under agreements to not a bank), and nonconsolidated nonbank subsidiaries of the holding company. repurchase; for information on these liabilities at banks with assets of $1 billion or NOTE. These data also appear in the Board's H.4.2 (504) release. For address, more on Dec. 31, 1977, see table 1.13. see inside front cover. 4. This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic NonfinancialS tatistics • January 1986 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1985 AAccccoouunntt Sept. 4 Sept. 11 Sept. 18 Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 1 Cash and balances due from depository institutions 24,629 20,974 20,999 21,406 24,556 22,981 23,944 23,387 23,052 2 Total loans, leases and securities, net1 184,176 180,786 181,493 180,879 183,833 184,844 181,186 180,057 181,200 Securities 3 4 5 Investment account, by maturity 9,791 9,359 9,424 10,109 10,121 8,773 8,725 8,719 8,753 6 One year or less 1,669 1,670 1,896 1,828 1,854 1,341 1,340 1,342 1,339 7 Over one through five years 6,330 6,038 5,896 6,639 6,612 5,794 5,737 5,662 5,634 8 Over five years 1,792 1,650 1,632 1,643 1,655 1,639 1,647 1,716 1,780 in ii Investment account 10,544 10,550 10,510 10,518 10,792 10,807 10,835 10,956 11,095 12 States and political subdivisions, by maturity 9,273 9,319 9,329 9,430 9,616 9,635 9,655 9,716 9,853 13 One year or less 1,429 1,434 1,447 1,548 1,717 1,731 1,729 1,690 1,698 14 Over one year 7,844 7,884 7,882 7,882 7,899 7,904 7,926 8,026 8,155 15 Other bonds, corporate stocks and securities 1,271 1,230 1,181 1,088 1,176 1,172 1,180 1,240 1,242 1166 Loans and leases 17 Federal funds sold3 25,070 24,6% 22,571 22,851 22,822 26,625 23,775 24,759 23,502 18 To commercial banks 11,979 11,815 10,138 11,418 11,010 14,119 11,806 13,358 12,138 19 To nonbank brokers and dealers in securities 7,788 7,221 7,002 6,180 6,899 7,730 7,826 7,169 6,710 20 To others 5,303 5,660 5,431 5,252 4,913 4,776 4,144 4,232 4,654 21 Other loans and leases, gross 144,049 141,513 144,342 142,726 145,372 143,922 143,168 140,989 143,218 22 Other loans, gross 141,314 138,811 141,612 139,987 142,632 141,166 140,404 138,218 140,437 23 Commercial and industrial 60,751 60,336 60,836 60,450 60,602 59,702 59,947 59,525 59,665 24 Bankers acceptances and commercial paper 750 759 670 704 676 546 639 605 685 25 All other 60,000 59,576 60,166 59,745 59,926 59,156 59,308 58,920 58,979 26 U.S. addressees 5599,,331133 58,886 59,464 59,058 59,244 58,470 58,629 58,231 58,284 27 Non-U.S. addressees 668888 691 702 687 682 686 680 689 695 28 Real estate loans 27,688 27,848 28,060 28,121 27,980 27,994 28,237 28,325 28,368 29 To individuals for personal expenditures 17,527 17,578 17,654 17,725 17,778 17,732 17,762 17,804 17,878 30 To depository and financial institutions 12,709 11,560 12,244 12,014 12,794 12,278 12,544 11,746 11,445 31 Commercial banks in the United States 2,484 2,184 2,467 2,684 2,686 2,858 2,714 2,475 2,338 32 Banks in foreign countries 2,695 1,916 2,302 2,106 2,872 2,232 2,607 2,141 2,031 33 Nonbank depository and other financial institutions 7,529 7,461 7,475 7,224 7,236 7,188 7,223 7,131 7,076 34 For purchasing and carrying securities 8,581 8,803 9,538 8,654 9,362 10,510 8,918 7,860 9,729 35 To finance agricultural production 315 309 303 303 349 345 341 359 353 36 To states and political subdivisions 8,274 8,128 8,147 8,119 8,168 8,157 8,141 8,165 8,168 37 To foreign governments and official institutions 865 872 786 918 986 874 1,042 912 876 38 All other 4,604 3,377 4,043 3,684 4,612 3,572 3,471 3,520 3,955 39 Lease financing receivables 2,735 2,702 2,730 2,738 2,741 2,756 2,764 2,771 2,781 40 LESS: Unearned income 1,428 1,430 1,430 1,438 1,412 1,411 1,437 1,439 1,444 41 Loan and lease reserve 3,850 3,902 3,925 3,886 3,862 3,873 3,880 3,928 3,924 42 Other loans and leases, net 138,771 136,181 138,987 137,401 140,098 138,638 137,850 135,622 137,849 43 All other assets4 70,716 69,136 68,260 67,302 69,951 68,775 67,924 66,220 66,192 44 Total assets 279,521 270,896 270,751 269,588 278,340 276,600 273,054 269,664 270,444 Deposits 45 Demand deposits 53,329 45,029 46,869 46,601 52,957 45,600 51,496 46,935 49,620 46 Individuals, partnerships, and corporations 35,561 30,517 31,150 31,261 34,898 30,445 34,101 30,695 32,504 47 States and political subdivisions 782 764 761 785 1,256 874 960 813 706 48 U.S. government 193 537 713 277 159 154 229 500 482 49 Depository institutions in the United States 6,202 4,603 5,564 5,360 6,575 5,324 7,188 5,456 5,272 50 Banks in foreign countries 5,395 3,992 4,265 4,029 5,412 3,904 4,349 4,110 4,256 51 Foreign governments and official institutions 687 1,014 569 847 628 716 701 743 579 52 Certified and officers' checks 4,510 3,601 3,846 4,042 4,029 4,182 3,968 4,618 5,820 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 4,259 4,257 4,174 3,985 4,281 4,308 4,265 4,201 4,151 54 Nontransaction balances 85,632 85.405 85,423 85,684 86,417 86,711 86,458 86,591 87,094 55 Individuals, partnerships and corporations 77,874 77,608 77,447 77,792 78,168 78,310 78,131 78,088 78,677 56 States and political subdivisions 4,568 4,555 4,756 4,654 4,979 4,965 4,962 5,072 5,094 57 U.S. government 39 39 38 36 35 34 33 37 36 58 Depository institutions in the United States 2,164 2,163 2,058 2,070 2,060 2,226 2,172 2,186 2,124 59 Foreign governments, official institutions and banks 987 1,040 1,124 1,131 1,174 1,175 1,160 1,208 1,163 60 Liabilities for borrowed money 67,734 67,281 68,610 67,937 74,400 80,952 71,854 68,827 70,482 61 375 350 2,275 600 62 Treasury tax-and-loan notes 1,366 793 3,752 4,014 1,699 3 1 178 1 63 All other liabilities for borrowed money5 66,368 66,113 64,859 63,573 72,702 78,674 71,852 68,050 70,481 64 Other liabilities and subordinated note and debentures 44,210 44,454 41,335 41,202 35,816 34,350 34,341 38,506 34,681 65 Total liabilities 255,164 246,426 246,411 245,410 253,871 251,921 248,414 245,061 246,028 66 Residual (total assets minus total liabilities)6 24,358 24,470 24,340 24,178 24,469 24,678 24,640 24,604 24,416 MEMO 67 Total loans and leases (gross) and investments adjusted1-7 174,990 172,119 174,243 172,102 175,411 173,151 171,984 169,591 172,092 68 Total loans and leases (gross) adjusted7 154,655 152,211 154,309 151,474 154,498 153,570 152,424 149,915 152,244 69 Time deposits in amounts of $100,000 or more 32,615 32,625 32,404 32,582 32,945 33,678 33,420 33,648 33,764 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 Account ept. 4 Sept. 11 Sept. 18 Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 1 Cash and due from depository institutions. 6,617 6,768 6,710 6,925' 6,517' 7,132 7,981 8,428 6,967 2 Total loans and securities 47,607 48,935 47,934 49,769' 50,836 49,192 49,174 47,874 49,900 3 U.S. Treasury and govt, agency securities 3,242 3,484 3,435 3,391 3,562 3,634 3,712 3,651 3,704 4 Other securities 2,161' 2,194' 2,253' 2,352' 2,379' 2,440 2,437 2,308 2,330 5 Federal funds sold1 4,046 3,954 3,238 4,548 4,334 4,284 4,047 3,564 4,556 6 To commercial banks in the United States 3,695 3,407 2,812 4,126 3,887 3,834 3,611 2,994 3,935 7 Toothers 351 547 426 422 447 450 436 569 620 8 Other loans, gross 38,158' 39,302' 39,007' 39,478' 40,561' 38,834 38,977 38,351 39,309 9 Commercial and industrial 22,840' 23,191' 23,279' 23,384' 23,756' 22,476 22,879 22,812 23,727 10 Bankers acceptances and commercial paper 1,770 1,744 1,730 1,650 1,696 1,650 1,720 1,606 1,693 11 All other 21,070' 21,447' 21,548' 21,734' 22,060' 20,826 21,159 21,205 22,034 12 U.S. addressees 19,647' 20,065' 20,193' 20,433' 20,788' 19,578 19,952 19,955 20,780 13 Non-U.S. addressees 1,423 1,382 1,356 1,300 1,272 1,248 1,206 1,250 1,254 14 To financial institutions 10,655 11,127 10,966 11,295 12,024 11,934 11,761 11,356 11,302 15 Commercial banks in the United States. 8,151 8,589 8,486 8,777 9,057 9,318 9,220 8,831 8,822 16 Banks in foreign countries 1,074 1,079 1,046 998 1,407 1,096 1,128 1,119 1,076 17 Nonbank financial institutions 1,430 1,459 1,434 1,520 1,560 1,520 1,412 1,405 1,404 18 To foreign govts, and official institutions.. 514 604 532 574 544 549 552 558 574 19 For purchasing and carrying securities .. 1,657' 1,893' 1,682' 1,712' 1,682' 1,371 1,332 1,258 1,331 20 All other 2,492 2,488 2,548 2,514 2,554 2,503 2,454 2,368 2,374 21 Other assets (claims on nonrelated parties).. 18,689 18,888 19,853 19,997 18,935 18,574 19,014 19,208 18,754 22 Net due from related institutions 8,777 8,641 8,730 9,365 8,792 11,008 9,152 8,267 8,289 23 Total assets 81,691 83,231 83,227 86,056 85,079 85,907 85,320 83,778 83,910 24 Deposits or credit balances due to other than directly related institutions 25,003 25,606 25,972 26,189 26,604 26,700 26,716 26,661 26,351 25 Credit balances 143 158 163 151 262 235 228 149 179 26 Demand deposits 1,745 1,908 1,881 1,912 2,146 1,973 2,417 2,382 1,924 27 IndividuaJs, partnerships, and corporations 948 962 992 957 1,080 1,036 1,578 1,543 1,128 28 Other 797 946 889 955 1,067 937 839 839 796 29 Time and savings deposits 23,115 23,539 23,928 24,126 24,196 24,492 24,071 24,130 24,249 30 Individuals, partnerships, and corporations 18,587 18,925 19,003 19,276 19,265 19,452 19,023 19,149 19,207 31 Other 4,528 4,614 4,924 4,850 4,930 5,040 5,048 4,981 5,042 32 Borrowings from other than directly related institutions 30,488 30,236 29,380 30,689 31,610 32,562 30,964 29,087 29,432 33 Federal funds purchased2 13,799 13,320 12,484 13,119 13,878 15,041 14,425 12,586 12,336 34 From commercial banks in the United States 10,859 10,500 9,475 10,058 10,771 11,789 10,962 9,141 9,054 35 From others 2,940 2,820 3,010 3,060 3,107 3,252 3,463 3,445 3,282 36 Other liabilities for borrowed money 16,689 16,916 16,8% 17,571 17,732 17,522 16,538 16,501 17,096 37 To commercial banks in the United States 15,516 15,699 15,843 16,455 16,575 16,454 15,377 15,402 16,014 38 To others 1,173 1,217 1,053 1,116 1,156 1,067 1,162 1,099 1,081 39 Other liabilities to nonrelated parties 20,827 21,214 21,385 21,567 21,026 20,757 20,624 20,690 20,749 40 Net due to related institutions 5,373 6,175 6,489 7,610 5,839 5,887 7,017 7,340 7,378 41 Total liabilities 81,691 83,231 83,227 86,056 85,079 85,907 85,320 83,778 83,910 MEMO 42 Total loans (gross) and securities adjusted3 35,761 36,938 36,636 36,866' 37,891' 36,039 36,342 36,048 37,143 43 Total loans (gross) adjusted3 30,359' 31,261' 30,948' 31,124' 31,950' 29,965 30,193 30,089 31,108 • 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 • January 1986 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1984 1985 11998800 11998811 11998822 11998833 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar.3 June 1 All holders—Individuals, partnerships, and corporations 315.5 288.9 291.8 293.5 279.3 286.3 288.8 302.7 286.5' 298.6 2 Financial business 29.8 28.0 35.4 32.8 31.7 30.8 30.4 31.7 28.1 28.9 3 Nonfinancial business 162.8 154.8 150.5 161.1 150.3 156.7 158.9 166.3 158.2' 164.7 4 Consumer 102.4 86.6 85.9 78.5 78.1 78.7 79.9 81.5 11V 81.8 5 Foreign 3.3 2.9 3.0 3.3 3.3 3.5 3.3 3.6 3.5 3.7 6 Other 17.2 16.7 17.0 17.8 15.9 16.7 16.3 19.7 18.8' 19.5 Weekly reporting banks 1984 1985 11998800 11998811 11998822 11998833 DDeecc.. DDeecc.. DDeecc.. DDeecc..22 Mar. June Sept. Dec. Mar.3 June 7 AU holders—Individuals, partnerships, and corporations 147.4 137.5 144.2 146.2 139.2 145.3 145.3 157.1 147.8 151.3 8 Financial business 21.8 21.0 26.7 24.2 23.5 23.6 23.7 25.3 22.6 22.9 9 Nonfinancial business 78.3 75.2 74.3 79.8 76.4 79.7 79.2 87.1 82.8 84.0 10 Consumer 35.6 30.4 31.9 29.7 28.4 29.9 29.8 30.5 29.1 29.9 11 Foreign 3.1 2.8 2.9 3.1 3.2 3.2 3.2 3.4 3.3 3.5 12 Other 8.6 8.0 8.4 9.3 7.7 8.9 9.3 10.9 10.0 11.0 1. Figures include cash items in process of collection. Estimates of gross 3. Beginning March 1985, financial business deposits and, by implication, total deposits are based on reports supplied by a sample of commercial banks. Types of gross demand deposits have been redefined to exclude demand deposits due to depositors in each category are described in the June 1971 BULLETIN, p. 466. thrift institutions. Historical data have not been revised. The estimated volume of 2. In January 1984 the weekly reporting panel was revised; it now includes 168 such deposits for December 1984 is $5.0 billion at all insured commercial banks banks. Beginning with March 1984, estimates are constructed on the basis of 92 and $3.0 billion at weekly reporting banks. sample banks and are not comparable with earlier data. Estimates in billions of dollars for December 1983 based on the newly weekly reporting panel are: financial business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other, 9.5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1985 IInnssttrruummeenntt DD 1199 ee 88 cc 00 .. DD 1199 ee 88 cc 11 .. DD 11 ee 99 cc 88 .. 22 11 DD 1199 ee 88 cc 33 .. DD 11 ee 9988 cc.. 44 22 Apr. May June July Aug. Sept. Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 124,374 165,829 166,436 188,312 239,117 255,236 258,943 254,627 262,769 273,327 271,760 FFiinnaanncciiaall ccoommppaanniieess33 DDeeaalleerr--ppllaacceedd ppaappeerr** 22 TToottaall 19,599 30,333 34,605 44,622 56,917 63,405 61,282 61,602 67,419 67,816 69,904 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 3,561 6,045 2,516 2,441 2,035 2,180 2,295 2,051 2,083 2,136 2,333 DDiirreeccttllyy ppllaacceedd ppaappeerr55 44 TToottaall 67,854 81,660 84,393 96,918 110,474 117,841 119,975 118,432 118,722 128,216 127,002 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 22,382 26,914 32,034 35,566 42,105 42,405 43,126 43,454 41,228 42,926 43,224 66 NNoonnffiinnaanncciiaall ccoommppaanniieess66 36,921 53,836 47,437 46,772 71,726 73,990 77,686 74,593 76,628 77,295 74,854 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 54,744 69,226 79,543 78,309 75,470 72,825 69,689 68,375 68,497 68,822r 68,728 Holder 8 Accepting banks 10,564 10,857 10,910 9,355 10,255 9,666 9,265 9,470 9,299 9,208' 10,679 9 Own bills 8,963 9,743 9,471 8,125 9,065 8,263 7,578 7,869 8,012 8,010' 9,166 10 Bills bought 1,601 1,115 1,439 1,230 1,191 1,403 1,687 1,601 1,287 1,198 1,513 Federal Reserve Banks 11 Own account 776 195 1,480 418 0 0 0 0 0 0 0 12 Foreign correspondents 1,791 1,442 949 729 671 728 575 511 652 789 793 13 Others 41,614 56,731 66,204 68,225 67,595 62,431 59,849 58,394 58,546 58,825' 57,256 Basis 14 Imports into United States 11,776 14,765 17,683 15,649 16,975 16,417 16,670 16,286 16,444 17,207' 16,677 15 Exports from United States 12,712 15,400 16,328 16,880 15,859 14,875 14,214 13,340 12,969 12,85(y 12,810 16 All other 30,257 39,060 45,531 45,781 42,635 41,533 38,804 38,748 39,084 37,149 37,708 1. Effective Dec. 1, 1982, there was a break in the commercial paper series. The financing; factoring, finance leasing, and other business lending; insurance key changes in the content of the data involved additions to the reporting panel, underwriting; and other investment activities. the exclusion of broker or dealer placed borrowings under any master note 4. Includes all financial company paper sold by dealers in the open market. agreements from the reported data, and the reclassification of a large portion of 5. As reported by financial companies that place their paper directly with bank-related paper from dealer-placed to directly placed. investors. 2. Correction of a previous misclassification of paper by a reporter has created 6. Includes public utilities and firms engaged primarily in such activities as a break in the series beginning December 1983. The correction adds some paper to communications, construction, manufacturing, mining, wholesale and retail trade, nonfinancial and to dealer-placed financial paper. transportation, and services. 3. Institutions engaged primarily in activities such as, but not limited to, 7. Beginning October 1984, the number of respondents in the bankers acceptcommercial, savings, and mortgage banking; sales, personal, and mortgage ance survey will be reduced from 340 to 160 institutions—those with $50 million or more in total acceptances. The new reporting group accounts for over 95 percent 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—June 1 1 0 1 . .0 50 0 Nov. 2 9 9 1 1 2 1 . . 0 7 0 5 F M e a b r 1 1 0 0 . . 9 5 8 0 J A u u ly g . 28 11.25 Apr 10.50 Sept, 11.50 Dec. 20 10.75 10.50 Oct. 12.00 June 10.50 Nov. 12.50 1985—Jan. 15 10.50 July 10.50 Dec. 1 1 2 3 . . 7 0 5 0 J M u a n y e 2 1 0 8 1 9 0 . . 5 0 0 0 A O Se u c p t g t 1 1 1 0 1 1 . . . 0 0 89 0 0 1985— F Ja e n b . . N De o c v 1 1 1 1 . . 0 0 0 0 M A M p a a r y r . . , , 1984— F Ja e n b 1 1 1 1 . . 0 0 0 0 J J A u u u n l g y e . . . Mar 11.21 Sept. Apr 11.93 Oct.. 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 DomesticN onfinancial Statistics • January 1986 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 July Aug. Sept. Oct. Sept. 27 Oct. 4 Oct. 11 Oct. 18 Oct. 25 MONEY MARKET RATES 1 Federal funds1-2 12.26 9.09 10.22 7.88 7.90 7.92 7.99 7.96 8.12 7.84 8.03 8.14 2 Discount window borrowing1'2'3 11.02 8.50 8.80 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 Commercial paper4'5 3 1-month 11.83 8.87 10.05 7.58 7.73 7.83 7.81 7.72 7.76 7.80 7.86 7.86 4 3-month 11.89 8.88 10.10 7.56 7.72 7.83 7.80 7.71 7.74 7.81 7.85 7.84 5 6-month 11.89 8.89 10.16 7.57 7.74 7.86 7.79 7.72 7.73 7.81 7.84 7.82 Finance paper, directly placed4-5 6 1-month 11.64 8.80 9.97 7.53 7.70 7.84 7.79 7.72 7.78 7.79 7.80 7.87 7 3-month 11.23 8.70 9.73 7.40 7.56 7.64 7.60 7.55 7.57 7.59 7.61 7.60 8 6-month 11.20 8.69 9.65 7.34 7.55 7.60 7.59 7.55 7.56 7.58 7.60 7.59 Bankers acceptances5'6 9 3-month 11.89 8.90 10.14 7.53 7.68 7.81 7.76 7.66 7.71 7.80 7.79 7.78 10 6-month 11.83 8.91 10.19 7.54 7.68 7.84 7.75 7.64 7.69 7.81 7.78 7.77 Certificates of deposit, secondary market7 11 1-month 12.04 8.96 10.17 7.58 7.77 7.88 7.85 7.78 7.82 7.84 7.88 7.90 12 3-month 12.27 9.07 10.37 7.64 7.81 7.93 7.88 7.82 7.85 7.89 7.92 7.93 13 6-month 12.57 9.27 10.68 7.79 7.97 8.09 7.97 7.88 7.95 8.00 8.02 8.02 14 Eurodollar deposits, 3-month8 13.12 9.56 10.73 7.89 8.02 8.14 8.08 8.09 8.01 8.10 8.13 8.08 U.S. Treasury bills5 Secondary market9 15 3-month 10.61 8.61 9.52 7.08 7.13 7.10 7.16 6.88 7.01 7.17 7.20 7.22 16 6-month 11.07 8.73 9.76 7.19 7.32 7.27 7.33 7.00 7.20 7.36 7.33 7.38 17 1-year 11.07 8.80 9.92 7.31 7.48 7.50 7.45 7.34 7.41 7.49 7.44 7.47 Auction average10 18 3-month 10.66 8.64 9.56 7.05 7.18 7.08 7.17 6.81 7.07 7.14 7.20 7.18 19 6-month 10.80 8.76 9.79 7.16 7.35 7.26 7.32 7.05 7.24 7.32 7.36 7.32 20 1-year 11.10 8.85 9.91 7.09 7.60 7.36 7.42 n.a. 7.33 n.a. n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 12.27 9.57 10.89 7.86 8.05 8.07 8.01 7.88 7.96 8.06 8.01 8.03 22 2-year 12.80 10.21 11.65 8.77 8.94 8.98 8.86 8.78 8.85 8.96 8.87 8.85 73 9.20 9 20 9 05 24 3-year 12.92 10.45 11.89 9.18 9.31 9.37 9.25 9.17 9.25 9.35 9.25 9.21 25 5-year 13.01 10.80 12.24 9.70 9.81 9.81 9.69 9.66 9.71 9.82 9.70 9.63 26 7-year 13.06 11.02 12.40 10.15 10.20 10.24 10.11 10.13 10.16 10.26 10.11 10.02 27 10-year 13.00 11.10 12.44 10.31 10.33 10.37 10.24 10.30 10.32 10.37 10.23 10.16 28 20-year 12.92 11.34 12.48 10.68 10.73 10.80 10.67 10.76 10.75 10.80 10.66 10.58 29 30-year 12.76 11.18 12.39 10.50 10.56 10.61 10.50 10.58 10.58 10.63 10.50 10.42 Composite14 30 Over 10 years (long-term) 12.23 10.84 11.99 10.51 10.59 10.67 10.56 10.63 10.62 10.70 10.56 10.51 State and local notes and bonds Moody's series15 31 Aaa 10.86 8.80 9.61 8.34 8.49 8.70 8.58 8.80 8.80 8.75 8.60 8.45 32 Baa 12.46 10.17 10.38 9.18 9.50 9.63 9.54 9.65 9.65 9.60 9.60 9.50 33 Bond Buyer series16 11.66 9.51 10.10 8.81 9.08 9.27 9.08 9.38 9.33 9.25 9.12 8.95 Corporate bonds Seasoned issues17 34 All industries 14.94 12.78 13.49 11.69 11.76 11.75 11.69 11.74 11.76 11.76 11.71 11.63 35 Aaa 13.79 12.04 12.71 10.97 11.05 11.07 11.02 11.05 11.07 11.12 11.03 10.94 36 Aa 14.41 12.42 13.31 11.42 11.47 11.46 11.45 11.47 11.50 11.51 11.48 11.41 37 A 15.43 13.10 13.74 11.92 12.00 11.99 11.94 11.98 11.99 12.03 11.% 11.85 38 Baa 16.11 13.55 14.19 12.43 12.50 12.48 12.36 12.47 12.46 12.39 12.38 12.31 39 A-rated, recently-offered utility bonds18 15.49 12.73 13.81 11.60 11.77 11.87 11.82 11.80 11.92 11.96 11.81 11.73 MEMO: Dividend/price ratio19 40 Preferred stocks 12.53 11.02 11.59 9.92 10.15 10.26 10.35 10.27 10.33 10.38 10.35 10.37 41 Common stocks 5.81 4.40 4.64 4.14 4.23 4.32 4.28 4.41 4.33 4.37 4.26 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 one very low yielding "flower" bond. 179 days for finance paper. 15. General obligations based on Thursday figures; Moody's Investors Service. 5. Yields are quoted on a bank-discount basis, rather than an investment yield 16. General obligations only, with 20 years to maturity, issued by 20 state and basis (which would give a higher figure). local governmental units of mixed quality. Based on figures for Thursday. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Daily figures from Moody's Investors Service. Based on yields to maturity (which may be, but need not be, the average of the rates quoted by the dealers). on selected long-term bonds. 7. Unweighted average of offered rates quoted by at least five dealers early in 18. Compilation of the Federal Reserve. This series is an estimate of the yield the day. on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 8. Calendar week average. For indication purposes only. call protection. Weekly data are based on Friday quotations. 9. Unweighted average of closing bid rates quoted by at least five dealers. 19. Standard and Poor's corporate series. Preferred stock ratio based on a 10. Rates are recorded in the week in which bills are issued. Beginning with the sample often issues: four public utilities, four industrials, one financial, and one Treasury bill auction held on Apr. 18, 1983, bidders were required to state the transportation. Common stock ratios on the 500 stocks in the price index. percentage yield (on a bank discount basis) that they would accept to two decimal NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases. places. Thus, average issuing rates in bill auctions will be reported using two For address, see inside front cover. rather than three decimal places. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.36 STOCK MARKET Selected Statistics 1985 IInnddiiccaattoorr 11998822 11998833 11998844 Feb. Mar. Apr. May June July Aug. Sept. Oct. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 68.93 92.63 92.46 104.73 103.92 104.66 107.00 109.52 111.64 109.09 106.62 107.57 2 Industrial 78.18 107.45 108.01 120.71 119.64 119.93 121.88 124.11 126.94 124.92 122.35 123.65 3 Transportation 60.41 89.36 85.63 101.76 98.30 96.47 99.66 105.79 111.67 109.92 104.96 103.72 4 Utility 39.75 47.00 46.44 53.44 53.91 55.51 57.32 59.61 59.68 56.99 55.93 55.84 5 Finance 71.99 95.34 89.28 109.58 107.59 109.39 115.31 118.44 119.85 114.68 110.21 112.36 6 Standard & Poor's Corporation (1941-43 = 10)1 ... 119.71 160.41 160.50 180.88 179.42 180.62 184.90 188.89 192.54 188.31 184.06 186.18 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 282.62 216.48 207.96 228.40 225.62 229.46 228.75 227.48 235.21 232.65 226.27 225.00 Volume of trading (thousands of shares) 8 New York Stock Exchange 64,868' 85,418 91,084 115,489 102,591 94,387 106,827 105,849 111,952 87,468 97,910 110,569 9 American Stock Exchange 5,283 8,215 6,107 10,010 8,677 7,801 7,171 7,128 7,284 7,275 7,057 7,648 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 13,325 23,000 22,470 22,970 23,230 23,900 24,300 25,260 25,220 25,780 25,330 26,350 Free credit balances at brokers4 11 Margin-account 5,735 6,620 7,015 6,680 6,780 6,910 6,865 7,300 7,000 6,455 6,225' 6,120' 12 Cash-account 8,390 8,430 10,215 9,840 10,160 9,230 9,230 10,115 9,700 9,440 10,080 9,630 Margin-account debt at brokers (percentage distribution, end of period) 13 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 percentp 14 Under 40 21.0 41.0 46.0 36.0 38.0 39.0 36.0 34.0 34.0 35.0 40.0 37.0 15 40-49 24.0 22.0 18.0 20.0 20.0 19.0 19.0 20.0 20.0 21.0 22.0 22.0 1 1 7 6 6 5 0 0 - -5 6 9 9 2 1 4 4 . . 0 0 1 9 6 . . 0 0 1 9 6 . . 0 0 1 18 1 . . 0 0 1 1 8 0 . . 0 0 1 1 0 8 . . 0 0 1 19 1 . . 0 0 1 19 1 . . 0 0 1 19 1 . . 0 0 1 18 1 . . 0 0 1 9 6 . . 0 0 1 1 0 7 . . 0 0 18 70-79 9.0 6.0 5.0 8.0 7.0 7.0 7.0 8.0 8.0 8.0 6.0 7.0 19 80 or more 8.0 6.0 6.0 8.0 7.0 7.0 8.0 8.0 8.0 7.0 7.0 7.0 Special miscellaneous-account balances at brokers (end of period) 20 Total balances (millions of dollars)6 35,598 58,329 75,840 81,830 83,729 82,990 87,120 86,910 89,240 90,930 91,400 92,250 Distribution by equity status (percent) 21 Net credit status 62.0 63.0 59.0 59.0 60.0 60.0 60.0 59.0 59.0 59.0 59.0 58.0 Debt status, equity of 2 2 2 3 6 L 0 e s p s e r th c a e n n t 6 o 0 r p m er o c r e e n t 2 9 9 . . 0 0 2 9 8 . . 0 0 2 1 9 1 . . 0 0 3 1 1 0 . . 0 0 3 1 0 0 . . 0 0 3 1 0 0 . . 0 0 3 1 0 0 . . 0 0 3 1 1 0 . . 0 0 3 9 2 . . 0 0 3 1 0 1 . . 0 0 3 1 1 0 . . 0 0 3 1 1 1 . . 0 0 Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 24 Margin stocks 70 80 65 55 65 50 25 Convertible bonds 50 60 50 50 50 50 26 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance 5. Each customer's equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of 2. Beginning July 5, 1983, the American Stock Exchange rebased its index other collateral in the customer's margin account or deposits of cash (usually sales effectively cutting previous readings in half. proceeds) occur. 3. Beginning July 1983, under the revised Regulation T, margin credit at 7. Regulations G, T, and U of the Federal Reserve Board of Governors, broker-dealers includes credit extended against stocks, convertible bonds, stocks prescribed in accordance with the Securities Exchange Act of 1934, limit the acquired through exercise of subscription rights, corporate bonds, and govern- amount of credit to purchase and carry margin stocks that may be extended on ment securities. Separate reporting of data for margin stocks, convertible bonds, securities as collateral by prescribing a maximum loan value, which is a specified and subscription issues was discontinued in April 1984, and margin credit at percentage of the market value of the collateral at the time the credit is extended. broker-dealers became the total that is distributed by equity class and shown on Margin requirements are the difference between the market value (100 percent) lines 17-22. and the maximum loan value. The term "margin stocks" is defined in the 4. Free credit balances are in accounts with no unfulfilled commitments to the corresponding regulation. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • January 1986 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1984 1985 AAccccoouunntt 11998822 11998833 Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. FSLIC insured institutions 1 Assets 692,663 819,168 960,177 978,514 974,881 982,182 992,289 995,430 1,003,225 1,012,387 1,022,476' 1,034,786' 1,042,162 ?. Mortgages 477,009 521,308 598,425 599,021 602,180 603,308 608,268 613,334 617,574 623,275 627,43(K 632,356' 636,914 Mortgage-backed securities 62,798 90,902 107,320 108,219 106,836 107,779 108,755 108,174 106,433 102,892 105,265' 108,605' 111,979 4 Cash and investment securities1. 82,300 109,923 124,304 135,640 129,481 131,625 132,438 127,225 129,918 132,109 134,039' 135,169' 131,867 5 Other n.a. n.a. 87,799 91,516 91,211 93,100 94,625 96,903 98,034 100,595 101,605' 101,633' 103,177 6 Liabilities and net worth 692,663 819,168 960,177 978,514 974,881 982,182 992,289 995,430 1,003,225 1,012,312 1,022,476' 1,034,786' 1,042,162 7 8 S B a o v r i r n o g w s e c d a p m it o a n l ey 5 9 5 7 4 , , 4 5 5 8 9 4 6 9 7 8 1 , , 5 0 1 5 1 9 7 1 7 2 2 8 , , 1 0 2 6 4 0 7 1 8 3 4 7 , , 7 1 2 2 4 3 7 1 9 2 1 5 , , 4 6 7 0 5 5 7 1 9 2 2 9 , , 5 3 5 2 6 1 8 1 0 3 1 2 , , 2 6 9 6 3 5 8 1 0 3 1 2 , , 2 2 5 3 6 0 8 1 0 2 9 9 , , 0 0 8 8 3 2 8 1 1 3 7 0 , , 5 2 5 6 1 9 8 1 2 3 2 3 , , 1 6 5 7 0 4 ' ' 8 1 2 3 6 9 , , 6 1 4 7 3 c ' 8 1 3 4 1 3 , , 7 52 2 7 8 9 FHLBB 63,818 57,253 70,419 71,719 71,509 71,470 71,674 72,785 74,159 75,987 77,749' 80,129' 81,457 10 Other 33,641 41,258 57,641 65,404 55,096 57,851 60,991 59,445 54,923 54,372 55,925' 59,041' 62,070 11 Other 15,233 16,619 23,081 18,746 19,961 21,816 19,290 22,468 24,215 22,055 23,48C 25,327' 22,753 12 Net worth2 25,386 32,980 36,912 37,921 37,840 38,488 39,041 39,476 40,845 42,436 43,171' 43,645' 44,153 n MEMO: Mortgage loan commitments outstanding3 .. 27,806 56,785 68,516 65,836 64,154 65,323 67,615 68,671 69,683 69,585 68,341 6677,,005577 65,738 Mutual savings banks4 14 Assets 174,197 193,535 204,499 203,898 204,859 206,175 210,568 210,469 212,509 212,207 213,824 215,298 Loans 15 Mortgage 94,091 97,356 102,953 102,895 103,393 103,654 104,340 105,102 105,869 105,911 106,441 107,322 16 Other 1166,,995577 19,129 24,884 24,954 25,747 26,456 27,798 28,000 28,530 29,199 30,339 30,195 Securities 17 U.S. government 9,743 15,360 15,034 14,643 14,628 14,917 15,098 14,504 14,895 14,082 13,960 13,868 18 Mortgage-backed securities.... 14,055 18,205 18,991 19,215 19,459 19,167 19,694 19,750 19,527 19,157 19,779 20,101 19 State and local government.... 2,470 2,177 2,077 2,067 2,069 2,092 2,097 2,094 2,093 2,086 2,105 20 Corporate and other7 22,106' 24,370' 23,747' 23,892' 23,896' 24,194' 24,139' 24,344 24,047 23,738 23,735 71 Cash 6,919 6,263 4,954 4,140 4,423 4,864 4,679 5,004 4,935 4,942 4,544 4,821 22 Other assets 7,855 9,670 11,413 11,533 11,593 12,488 12,288 12,246 12,770 12,776 12,937 13,151 23 Liabilities 174,197 193,535 203,898 204,859 206,175 210,568 210,469 212,509 212,163 212,207 213,824 215,298 n. i. 74 Deposits 155,196 172,665 180,616 181,062 181,849 185,197 184,478 185,802 186,091 186,118 186,824 187,207 25 Regular8 152,777 170,135 177,418 177,954 178,791 181,742 180,804 182,113 182,218 182,243 182,881 183,222 26 Ordinary savings 46,862 38,554 33,739 33,413 33,413 33,715 33,211 33,457 33,526 33,530 33,495 33,398 77 Time 102,934 104,151 104,732 104,098 103,536 105,204 104,527 104,843 104,756 104,448 104,737 104,448 78 Other 2,419 2,530 3,198 3,108 3,058 3,455 3,689 3,674 3,873 3,875 3,943 3,985 79 Other liabilities 8,336 10,154 12,504 12,931 13,387 14,393 14,959 15,546 14,348 14,241 15,137 15,971 30 General reserve accounts 9,235 10,368 10,510 10,619 10,670 10,720 10,803 10,913 11,238 11,239 11,453 11,704 Life insurance companies8 31 Assets 588,163 654,948 720,807 722,979 731,113 735,332 742,154 748,865 757,523 765,891 772,452 778,293 Securities 3? Government 36,499 50,752 64,683 62,899 63,979 65,867 65,603 66,402 67,880 68,636 68,983 69,975 33 United States6 16,529 28,636 41,970 41,204' 41,982 43,916 43,502 44,200 45,593 46,260 46,514 47,343 34 State and local 8,664 9,986 9,757 8,713 8,913 9,000 8,902 8,923 8,998 9,044 8,980 9,201 35 11,306 12,130 13,005 12,982 13,084 12,951 13,199 13,279 13,289 13,332 13,489 13,431 36 287,126 322,854 354,815 359,333 368,316 371,009 374,757 379,247 384,342 388,448 393,386 397,202 n.a. 37 231,406 257,986 291,021 295,998 302,270 303,452 307,078 311,123 314,021 317,029 321,752 325,647 38 55,720 64,868 64,171 63,335 66,046 67,557 67,679 68,124 70,321 71,419 71,634 71,555 39 Mortgages 141,989 150,999 157,283 156,699 156,850 157,253 158,162 159,393 160,470 161,485 162,690 163,027 40 Real estate 20,264 22,234 25,985 25,767 25,983 26,186 26,527 26,828 27,215 27,831 28,240 28,450 41 Policy loans 52,961 54,063 54,610 54,505 54,414 54,489 54,438 54,439 54,384 54,320 54,300 54,238 42 Other assets 48,571 54,046 63,344 63,776 61,571 60,528 62,667 62,556 63,232 65,171 64,853 65,401 Credit unions9 43 Total assets/liabilities and capital. 69,585 81,961 92,951 93,036 94,646 96,183 98,646 101,268 104,992 106,948 107,991 111,150 113,016 44 45,493 54,482 62,690 63,205 64,505 65,989 67,799 68,903 71,342 72,021 72,932 74,869 75,567 45 State 24,092 27,479 29,831 29,831 30,141 30,194 30,847 32,365 33,650 34,762 35,059 36,281 37,449 46 Loans outstanding 43,232 50,083 62,170 62,561 62,662 62,393 62,936 64,341 65,298 66,817 67,662 69,171 70,765 47 27,948 32,930 41,762 42,337 42,220 42,283 42,804 43,414 44,042 40,378 44,963 46,036 46,702 48 State 15,284 17,153 20,408 20,224 20,442 20,110 20,132 20,927 21,256 22,110 22,699 23,135 24,063 49 62,990 74,739 84,000 84,348 86,047 86,048 88,560 91,275 95,278 96,702 98,026 99,834 101,318 50 Federal (shares) 41,352 49,889 57,302 57,539 58,820 59,914 61,758 62,867 66,680 66,243 67,070 68,087 68,592 51 State (shares and deposits).... 21,638 24,850 26,698 26,809 27,227 26,134 26,802 28,408 28,598 30,459 30,956 31,747 32,726 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A27 NOTES TO TABLE 1.37 1. Holdings of stock of the Federal Home Loan Banks are in "other assets." NOTE. FSLIC-insured institutions: Estimates by the FHLBB for all associa- 2. Includes net undistributed income accrued by most associations. tions in the United States. Data are based on monthly reports of federally insured 3. As of July 1985, data include loans in process. associations. Even when revised, data for current and preceding year are subject 4. The National Council reports data on member mutual savings banks and on to further revision. savings banks that have converted to stock institutions, and to federal savings Savings banks: Estimates of National Council of Savings Institutions for all banks. savings banks in the United States. 5. Excludes checking, club, and school accounts. Life insurance companies: Estimates of the American Council of Life Insurance 6. Direct and guaranteed obligations. Excludes federal agency issues not for all life insurance companies in the United States. Annual figures are annualguaranteed, which are shown in the table under "Business" securities. statement asset values, with bonds carried on an amortized basis and stocks at 7. Issues of foreign governments and their subdivisions and bonds of the year-end market value. Adjustments for interest due and accrued and for International Bank for Reconstruction and Development. differences between market and book values are not made on each item separately 8. Data for December 1984 through April 1985 have been revised. but are included, in total, in "other assets." 9. As of June 1982, data include federally chartered or federally insured, state- Credit unions: Estimates by the National Credit Union Administration for a chartered credit unions serving natural persons. Before that date, data were group of federal and federally insured state credit unions serving natural persons. estimates of all credit unions. 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 • January 1986 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 1983 1984 1985 11998822 11998833 11998844 HI H2 HI Aug. Sept. Oct. U.S. budget 1 Receipts' 617,766 600,562 666,457 306,331 306,584 341,808 55,776 73,808 57,881 2 Outlays' 728,375 795,917 841,800 396,477 406,849 420,700 83,621 73,191 85,074 3 Surplus, or deficit (-) -110,609 -195,355 -175,343 -90,146 -100,265 -78,892 -27,845 617 -27,193 4 Trust funds 5,456 23,056 30,565 22,680 7,745 18,080 287 13,164 3,371 5 Federal funds2-3 -116,065 -218,410 -205,908 -112,822 -108,005 -96,971 -28,132 -12,547 -30,564 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays -14,142 -10,404 -7,277 -5,418 -3,199 -2,813 26 -31 86 7 Other3-4 -3,190 -1,953 -2,719 -528 -1,206 -838 221 -1,350 20 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 -27,597 -764 -27,087 Source of financing 9 Borrowing from the public 134,993 212,425 170,817 102,538 84,020 80,592 16,157 5,975 11,390 10 Cash and monetary assets (decrease, or increase (-))4 -11,911 -9,889 5,636 -9,664 -16,294 -3,127 12,013 -6,248 13,964 11 Other5 4,858 5,176 8,885 3,222 4,358 7,418 -573 -1,037 1,733 MEMO 12 Treasury operating balance (level, end of period) 29,164 37,057 22,345 27,997 11,817 13,567 11,841 17,060 1,823 13 Federal Reserve Banks 10,975 16,557 3,791 19,442 3,661 4,397 3,656 4,174 1,528 14 Tax and loan accounts 18,189 20,500 18,553 8,764 8,157 9,170 8,185 12,886 294 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 Fiscal Fiscal Source or type year year 1983 1984 1985 1984' 1985 HI H2 H2 Aug. Sept. RECEIPTS 1 AH sources 666,457 733,996 306,331 305,122 341,808 341,392 55,776 73,808 2 Individual income taxes, net 295,960 330,918 144,551 147,663 144,691 157,229 25,770 34,643 4 5 6 3 P N W R r e o e i f t n s h u i w d h n i e e d t l n h s d t h ia e l l d E lection Campaign Fund . 2 8 6 7 4 1 9 , , , 7 3 3 7 4 5 3 0 6 0 5 2 9 6 9 7 5 8 , , , 6 7 9 8 4 4 3 5 3 1 5 1 6 5 3 3 4 5 , , , 0 0 5 1 2 3 3 4 4 1 0 1 2 3 6 0 3 , , , 8 7 7 1 0 6 5 3 6 8 1 6 5 4 1 7 0 , , , 4 4 6 6 5 5 2 3 8 7 9 1 1 4 7 9 5 , , , 3 4 2 8 0 1 7 3 0 5 2 2 4 1 , , , 2 9 4 8 1 3 5 4 1 2 2 1 2 1 3 , , , 5 5 6 6 3 1 9 9 3 1 7 Co G rp r o o r s a s t i r o e n c e i i n p c ts o me taxes 74,179 77,413 33,522 31,064 40,328 35,190 2,397 12,224 8 Refunds 17,286 16,082 13,809 8,921 10,045 6,847 1,319 1,275 9 Social insurance taxes and contributions net 241,902 268,805 110,520 100,832 131,372 118,690 22,943 21,977 10 Payroll employment taxes and contributions' 212,180 238,288 97,339' 88,786' 114,102' 105,624 18,617 21,325 11 Self- c e o m n p tr l i o b y u m ti e o n n t s 2 t axes and 8,709 10,468 6,427 398 7,667 1,086 0 1,247 12 Unemployment insurance 25,138 25,758 10,984 8,714 14,942 10,706 3,928 275 13 Other net receipts3 4,580 4,759 2,197 2,290 2,329 2,360 398 376 14 Excise taxes 37,361 35,865 16,904 19,586 18,304 18,961 2,544 3,331 15 Customs deposits 11,370 12,079 4,010 5,079 5,576 6,329 1,151 936 16 Estate and gift taxes 6,010 6,422 2,883 3,050 3,102 3,029 560 497 17 Miscellaneous receipts4 16,965 18,576 7,751 7,811 8,481 8,812 1,730 1,473 OUTLAYS 18 All types 841,800 936,809 396,477 406,849 420,700 446,943 83,621 73,191 19 National defense 227,411 251,468 105,072 108,967 114,639 118,286 23,209 21,498 2 2 2 2 2 0 2 1 3 4 A N E I G n n g a e t e e n t r u i r r e c g n r r u a y a a l l t l t i u r o s e r n c e s i a o e l u n a r c c f e f e , a s i s r p a s n a d ce e , n a v n i d r o t n e m ch e n n o t logy . 1 1 1 2 8 3 2 2 , , , , , 5 3 0 2 5 3 6 1 9 0 8 3 0 1 3 2 1 1 3 2 8 5 3 , , , , , 9 7 4 7 2 0 8 2 0 9 6 0 6 0 8 1 4 2 5 3 0 , , , , , 7 8 0 4 1 0 9 7 8 5 5 2 3 6 4 6 4 6 5 1 , , , , , 1 9 2 2 5 1 3 1 7 3 7 3 6 8 3 5 5 7 3 1 , , , , , 4 4 1 9 0 2 6 2 8 8 6 3 9 1 0 8 4 7 8 1 , , , , , 5 5 3 4 4 5 2 7 7 2 0 4 0 3 3 1 1 1 , , , 5 6 5 7 3 4 4 1 5 9 2 7 0 4 6 1 1 1 , , , 9 0 7 9 1 9 8 4 7 2 5 8 3 2 8 25 Commerce and housing credit 5,213 1,817 2,164 2,648 2,572 2,663 -295 401 26 Transportation 24,587 25,874 9,918 13,323 10,616 13,673 2,617 2,524 27 Community and regional development .. 7,307 7,748 3,124 4,327 3,154 4,836 730 521 28 Education, training, employment, social services 26,579 28,352 12,801 13,246 13,445 13,737 2,745 2,136 29 Health 30,432 33,560 41,206 27,271 15,551 15,692 2,917 2,672 30 Social security and medicare 235,764 254,446 n.a. n.a. 119,420 119,613 21,306 21,170 31 Income security 112,556 128,993 143,001 92,643 50,450 57,411 10,201 8,574 32 Veterans benefits and services 25,614 26,376 11,334 13,621 12,849 13,317 3,409 942 33 Administration of justice 5,660 6,188 2,522 2,628 2,807 2,992 519 469 34 General government 5,117 5,483 2,434 2,479 2,462 2,552 479 788 35 General-purpose fiscal assistance 6,770 6,140 3,124 3,290 2,943 3,458 92 291 36 Net interest® 111,058 129,148 42,358 47,674 54,748 61,293 12,324 9,773 37 Undistributed offsetting receipts7 -31,957 -32,893 -8,887 -7,262 -8,036 -12,914 -2,481 -4,495 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 • January 1986 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1983 1984 1985 IItteemm June 30 Sep. 30 Dec. 31 Mar. 31 June 30 Sep. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 1,324.3 1,381.9 1,415.3 1,468.3 1,517.2 1,576.7 1,667.4 1,715.1 1,779.0 2 Public debt securities 1,319.6 1,377.2 1,410.7 1,463.7 1,512.7 1,572.3 1,663.0 1,710.7 1,774.6 3 Held by public 1,090.3 1,138.2 1,174.4 1,223.9 1,255.1 1,309.2 1,373.4 1,415.2 1,460.5 4 Held by agencies 229.3 239.0 236.3 239.8 257.6 263.1 289.6 295.5 314.2 5 Agency securities 4.7 4.7 4.6 4.6 4.5 4.5 4.5 4.4 4.4 6 Held by public 3.6 3.6 3.5 3.5 3.4 3.4 3.4 3.3 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 1,320.4 1,378.0 1,411.4 1,464.5 1,513.4 1,573.0 1,663.7 1,711.4 1,775.3 9 Public debt securities 1,319.0 1,376.6 1,410.1 1,463.1 1,512.1 1,571.7 1,662.4 1,710.1 1,774.0 10 Other debt1 1.4 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 11 MEMO: Statutory debt limit 1,389.0 1,389.0 1,490.0 1,490.0 1,520.0 1,573.0 1,823.8 1,823.8 1,823.8 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 Q3 Q4 Q1 Q2 1 Total gross public debt 930.2 1,028.7 1,197.1 1,410.7 1,572.3 1,663.0 1,710.7 1,774.6 By type 2 Interest-bearing debt 928.9 1,027.3 1,195.5 1,400.9 1,559.6 1,660.6 1,695.2 1,759.8 3 Marketable 623.2 720.3 881.5 1,050.9 1,176.6 1,247.4 1,271.7 1,310.7 4 Bills 216.1 245.0 311.8 343.8 356.8 374.4 379.5 381.9 5 Notes 321.6 375.3 465.0 573.4 661.7 705.1 713.8 740.9 6 Bonds 85.4 99.9 104.6 133.7 158.1 167.9 178.4 187.9 7 Nonmarketable1 305.7 307.0 314.0 350.0 383.0 413.2 423.6 449.1 8 State and local government series 23.8 23.0 25.7 36.7 41.4 44.4 47.7 53.9 9 Foreign issues2 24.0 19.0 14.7 10.4 8.8 9.1 9.1 8.3 10 Government 17.6 14.9 13.0 10.4 8.8 9.1 9.1 8.3 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 73.1 73.3 74.4 75.7 13 Government account series3 185.1 196.7 205.4 231.9 259.5 286.2 292.2 311.0 14 Non-interest-bearing debt 1.3 1.4 1.6 9.8 12.7 2.3 15.5 14.8 By holder4 15 U.S. government agencies and trust funds 192.5 203.3 209.4 236.3 263.1 289.6 295.5 16 Federal Reserve Banks 121.3 131.0 139.3 151.9 155.0 160.9 161.0 17 Private investors 616.4 694.5 848.4 1,022.6 1,154.1 1,212.5 1,254.1 18 Commercial banks 112.1 111.4 131.4 188.8 183.0 183.4 195.0 19 Money market funds 3.5 21.5 42.6 22.8 13.6 25.9 26.7 20 Insurance companies 24.0 29.0 39.1 56.7 73.2 82.3 84.0 21 Other companies 19.3 17.9 24.5 39.7 47.7 50.1 50.9 22 State and local governments 87.9 104.3 127.8 155.1 n.a. n.a. n.a. n a. Individuals 23 Savings bonds 72.5 68.1 68.3 71.5 73.7 74.5 75.4 74 Other securities 44.6 42.7 48.2 61.9 68.7 69.3 79.9 25 Foreign and international5 129.7 136.6 149.5 166.3 175.5 192.9 186.3 26 Other miscellaneous investors6 122.8 163.0 217.0 259.8 n.a. n.a. n.a. 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Consists of investments of foreign and international accounts. Excludes nontion Administration; depository bonds, retirement plan bonds, and individual interest-bearing notes issued to the International Monetary Fund. retirement bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable dollar-denominated and foreign currency-denominated se- mutual savings banks, corporate pension trust funds, dealers and brokers, certain ries held by foreigners. U.S. government deposit accounts, and U.S. government-sponsored agencies. 3. Held almost entirely by U.S. government agencies and trust funds. SOURCES. Data by type of security, U.S. Treasury Department, Monthly 4. Data for Federal Reserve Banks and U.S. government agencies and trust Statement of the Public Debt of the United States; data by holder. Treasury funds are actual holdings; data for other groups are Treasury estimates. Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 Aug. Sept. Oct. Sept. 25 Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 Immediate delivery1 1 U.S. government securities 32,261 42,135 52,778 70,849' 62,932' 71,778 73,645' 65,733 59,749 49,830 65,933' 95,706 By maturity 2 Bills 18,393 22,393 26,035 29,992' 27,640' 31,808 29,495' 31,223 27,328 26,191 29,090' 39,051 3 Other within 1 year 810 708 1,305 1,636 1,683 1,953 1,820 2,924 2,188 1,481 1,421 1,605 4 1-5 years 6,271 8,758 11,733 17,397 15,298' 15,345 21,174' 12,742 10,662 8,512 14,463' 25,908 5 5-10 years 3,555 5,279 7,606 11,266 10,464 13,666 12,537 10,971 11,563 8,003 11,881 17,249 6 Over 10 years 3,232 4,997 6,099 10,558 7,847 9,007 8,620 7,873 8,007 5,642 9,078 11,894 By type of customer 7 U.S. government securities dealers 1,770 2,257 2,919 2,922 2,946 3,248 2,548 3,417 2,134 2,797 2,754 44,,333322 8 U.S. government securities brokers 15,794 21,045 25,580 34,565 30,766' 33,827 37,082' 30,699 28,898 23,216 30,889' 46,101 9 All others2 14,697 18,833 24,278 33,362' 29,22(V 34,703 34,015' 31,616 28,717 23,817 32,291' 45,273 10 Federal agency securities 4,140 5,576 7,846 10,964 11,667 13,319 11,083 9,822 12,632 14,527 12,852 13,520 11 Certificates of deposit 5,001 4,333 4,947 3,245 3,379 3,234 4,021 2,975 3,353 2,790 2,690 3,791 12 Bankers acceptances 2,502 2,642 3,243 2,999 3,007' 2,799 3,762 2,676 3,163 2,167 2,280 3,341 13 Commercial paper 7,595 8,036 10,018 13,027 13,466 14,381 14,009 1133,,997777 13,204 14,331 1144,,223322 1133,,888800 Futures transactions3 14 Treasury bills 5,055 6,655 6,947 3,942 5,836 4,612 6,654 4,254 4,561 3,714 4,603 5,788 15 Treasury coupons 1,487 2,501 4,503 5,618 6,585 6,040 8,072' 5,991 5,543 3,939 5,882' 7,950 16 Federal agency securities 261 265 262 346 234 564 208 305 867 486 540 694 Forward transactions4 17 U.S. government securities 835 1,493 1,364 1,271 1,034 718 1,607 439 555 511 1,152 635 18 Federal agency securities 978 1,646 2,843 3,580 3,810 4,743 3,121 2,756 4,639 6,044 4,410 4,733 1. Data for immediate transactions does not 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 secunties, 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 • January 1986 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing Averages of daily figures, in millions of dollars 1985 1985 week ending Wednesday IItteemm 11998822 11998833 11998844 Aug. Sept. Oct. Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 Positions Net immediate1 1 U.S. government securities 14,769 14,224 5,538 1,433 2,285' 3,874 3,176 -303 1,273 4,552 7,012 2 Bills 8,226 10,800 5,500 5,327 6,41<K 12,146 9,329 8,420 11,186 14,479 14,072 3 Other within 1 year 1,088 921 63 1,376 1,059 1,056 1,156 757 1,023 1,390 1,096 4 1-5 years 3,293 1,912 2,159 4,442 5,733 6,164 6,754 6,674 5,451 3,938 7,256 5 5-10 years -318 -78 -1,119 -6,199 -6,381 -9,209 -8,253 -9,305 -9,342 -9,192 -9,736 6 Over 10 years 2,026 528 -1,174 -3,670 -4,737 -6,483 -6,021 -7,052 -7,242 -6,265 -5,875 7 Federal agency securities 4,169 7,313 15,294 23,108 23,787 25,323 23,352 25,017 26,255 25,502 25,001 8 Certificates of deposit 5,532 5,838 7,369 8,207 8,288 8,850 8,853 8,864 8,643 8,635 9,249 9 Bankers acceptances 2,832 3,332 3,874 4,213 4,180 4,944 5,474 5,029 4,578 4,919 4,816 10 Commercial paper 3,317 3,159 3,788 4,905 5,624 5,699 6,713 6,134 5,408 4,963 5,406 Futures positions 11 Treasury bills -2,507 -4,125 -4,525 -6,699 -6,224 -13,573 -9,579 -9,412 -11,520 -16,240 -18,031 12 Treasury coupons -2,303 -1,033 1,794 5,170 5,122 5,792 6,508 6,696 6,633 5,558 4,558 13 Federal agency securities -224 171 233 -530 -1,209 -2,677 -1,203 -2,805 -2,600 -2,713 -3,193 Forward positions 14 U.S. government securities -788 -1,936 -1,643 -700 -1,464 -1,574 -1,840 -1,315 -2,037 -1,508 -1,438 15 Federal agency securities -1,432 -3,561 -9,205 -10,793 -10,433 -9,335 -9,065 -10,081 -10,239 -8,577 -8,635 Financing2 Reverse repurchase agreements 16 Overnight and continuing 26,754 29,099 44,078 69,377 72,392 77,247 74,755 80,414 76,417 76,930 75,713 17 Term agreements 48,247 52,493 68,357 78,394 80,007 219,416 81,571 86,109 86,872 89,648 694,822 Repurchase agreements4 18 Overnight and continuing.... 49,695 57,946 75,717 103,403 107,884 93,334 108,763 113,292 11,824 122,220 113,650 19 Term agreements 43,410 44,410 57,047 67,346 67,645 74,425 69,521 72,157 68,719 74,254 83,299 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. Before 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. Data for on a commitment basis. Data for financing are based on Wednesday figures, in immediate positions does not 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 1985 AAggeennccyy 11998822 11998833 11998844 Apr. May June July Aug. Sept. 1 Federal and federally sponsored agencies 237,787' 240,068' 271,22C 275,961' 279,449' 284,871' 286,159' 289,277' 288,513 2 Federal agencies 33,055 33,940 35,145 35,182 34,915 35,646' 35,354' 35,338 35,902 3 Defense Department1 354 243 142 107 102 97 93 89 82 4 Export-Import Bank2 3 14,218 14,853 15,882 15,707 15,706 15,746' 15,746' 15,744 15,418 5 Federal Housing Administration4 288 194 133 123 122 119 118 116 117 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 22,,116655 7 Postal Service6 1,471 1,404 1,337 1,337 97 (V 970 970 970 1,940 8 Tennessee Valley Authority 14,365 14,970 15,435 15,776 15,776 16,475 16,188 16,180 16,106 9 United States Railway Association6 194 111 51 74 74 74 74 74 74 10 Federally sponsored agencies7 204,732' 206,128' 236,075' 240,779' 244,534' 249,225 250,805' 253,939 252,611 11 Federal Home Loan Banks 55,967 48,930 65,085 65,257 67,765 69,898 70,244 71,949 72,384 12 Federal Home Loan Mortgage Corporation 4,524 6,793 10,270 12,004 12,167 12,723 13,197 13,393 12,721 13 Federal National Mortgage Association8 70,052 74,594 83,720 86,913 88,170 89,518 90,208 91,318 91,693 14 Farm Credit Banks 71,896 72,409 71,255 69,882 69,321 70,039 70,069 70,092 68,143 15 Student Loan Marketing Association 2,293' 3,402' 5,745' 6,723 7,111 7,047 7,087 7,187' 7,670 MEMO 16 Federal Financing Bank debt 126,424 135,791 145,217 148,718 149,597 149,957' 152,962' 152,941 153,513 Lending to federal and federally sponsored 17 Export-Import Bank3 14,177 14,789 15,852 15,690 15,690 15,729 15,729 15,729 15,409 18 Postal Service6 1,221 1,154 1,087 1,087 720 720 720 720 1,690 19 Student Loan Marketing Association 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 20 Tennessee Valley Authority 12,640 13,245 13,710 14,051 14,154 14,750 14,463 14,455 14,381 21 United States Railway Association6 194 111 51 74 74 74 74 74 74 Other Lending10 22 Farmers Home Administration 53,261 55,266 58,971 60,641 61,461 62,606 6633,,554466 6633,,777799 6644,,116699 23 Rural Electrification Administration 17,157 19,766 20,693 20,894 21,003 21,183 21,364 21,463 21,676 24 Other 22,774 26,460 29,853 31,281 31,495 31,909 32,066 31,721 31,114 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. Some data are estimated. 2. Includes participation certificates reclassified as debt beginning Oct. 1,1976. 8. Before late 1981, the Association obtained financing through the Federal 3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. Financing Bank. 4. Consists of debentures issued in payment of Federal Housing Administration 9. The FFB, which began operations in 1974, is authorized to purchase or sell insurance claims. Once issued, these securities may be sold privately on the obligations issued, sold, or guaranteed by other federal agencies. Since FFB securities market. incurs debt solely for the purpose of lending to other agencies, its debt is not 5. Certificates of participation issued before fiscal 1969 by the Government included in the main portion of the table in order to avoid double counting. National Mortgage Association acting as trustee for the Farmers Home Adminis- 10. Includes FFB purchases of agency assets and guaranteed loans; the latter tration; Department of Health, Education, and Welfare; Department of Housing contain loans guaranteed by numerous agencies with the guarantees of any and Urban Development; Small Business Administration; and the Veterans particular agency being generally small. The Farmers Home Administration item Administration. consists exclusively of agency assets, while the Rural Electrification Administra- 6. Off-budget. tion entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic NonfinancialS tatistics • January 1986 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1985 Type of issue or issuer, 11998822 11998833 11998844 or use Jan. Feb. Mar. Apr. May June July' Aug. 1 All issues, new and refunding1 79,138 86,421 106,641 6,607 8,510 9,873 12,095 14,097 11,801 12,268 15,197 Type of issue 2 General obligation 21,094 21,566 26,485 1,887 3,527 2,998 3,265 4,535 2,739 5,257 3,160 3 U.S. government loans2 225 96 16 7 0 5 0 2 0 0 0 4 Revenue 58,044 64,855 80,156 4,720 4,983 6,875 8,830 9,562 9,062 7,011 12,037 5 U.S. government loans2 461 253 17 3 0 0 2 0 1 6 2 Type of issuer 6 State 8,438 7,140 9,129 369 1,559 252 958 1,298 350 786 800 7 Special district and statutory authority 45,060 51,297 63,550 4,045 4,493 5,754 7,279 8,126 7,625 6,893 9,442 8 Municipalities, counties, townships, school districts 25,640 27,984 33,962 2,193 2,458 3,867 3,858 4,673 3,826 4,589 4,955 9 Issues for new capital, total 74,804 72,441 94,050 5,206 5,890 8,253 9,075 9,279 7,966 7,660 10,667 Use of proceeds 10 Education 6,482 8,099 7,553 757 950 1,018 1,121 1,169 962 797 1,152 11 Transportation 6,256 4,387 7,552 347 472 173 319 631 276 651 251 12 Utilities and conservation 14,259 13,588 17,844 1,359 1,008 1,491 2,347 1,478 1,844 720 2,248 13 Social welfare 26,635 26,910 29,928 1,670 1,848 3,155 3,105 3,454 2,956 3,155 4,280 14 Industrial aid 8,349 7,821 15,415 389 353 584 293 782 560 553 1,266 15 Other purposes 12,822 11,637 15,758 684 1,259 1,832 1,890 1,765 1,368 1,784 1,470 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 1985 Type of i o s r s u u e s e o r issuer, 11998822 11998833 11998844 Feb. Mar. Apr. May June July Aug. Sept. p 1 All issues1 84,638 120,074 132,311 6,743 14,005 11,790 12,896 19,391 11,854' 14,197' 11,010 2 Bonds2 54,076 68,495 109,683 4,027 11,641 8,850 9,738 15,651 8,647' 11,241' 8,794 Type of offering 3 Public 44,278 47,369 73,357 4,027 11,641 8,850 9,738 15,651 8,647' 11,241' 8,794 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 1,476 5,660 922 1,500 8,044 2,688 2,352 2,079 6 Commercial and miscellaneous 5,442 7,540 13,726 469 974 1,317 639 865 1,642 911 186 7 Transportation 1,491 3,833 4,694 30 130 334 357 512 76 459 177 8 Public utility 12,327 9,125 10,679 80 500 860 1,136 585 423 835 1,042 9 Communication 2,390 3,642 2,997 353 300 0 150 125 110 1,295 367 10 Real estate and financial 19,604 27,502 52,980 1,619 4,077 5,418 5,956 5,520 3,709' 5,379 4,943 11 Stocks3 30,562 51,579 22,628 2,716 2,364 2,940 3,158 3,740 3,207 2,956 2,216 Type 12 Preferred 5,113 7,213 4,118 218 311 312 634 726 631 603 653 13 Common 25,449 44,366 18,510 2,498 2,053 2,628 2,524 3,014 2,576 2,353 1,563 Industry group 14 Manufacturing 5,649 14,135 4,054 229 224 283 504 558 601 225 656 15 Commercial and miscellaneous 7,770 13,112 6,277 760 472 1,019 624 1,453 562 1,288 400 16 Transportation 709 2,729 589 153 32 522 33 236 0 79 107 17 Public utility 7,517 5,001 1,624 283 197 157 185 91 87 73 47 18 Communication 2,227 1,822 419 101 15 5 119 151 99 18 7 19 Real estate and financial 6,690 14,780 9,665 1,190 1,424 954 1,693 1,251 1,798 1,273 999 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 1985 IItteemm 11998833 11998844 Feb. Mar. Apr. May June July Aug/ Sept. INVESTMENT COMPANIES1 1 Sales of own shares2 84,345 107,486 14,786 14,582 18,049 16,408 18,191 20,284 18,049 16,932 2 Redemptions of own shares3 57,100 77,031' 8,005 9,412 13,500 10,069 9,836 11,502 10,837 9,959 3 Net sales 27,245 30,455' 6,781 5,170 4,549 6,339 8,355 8,782 7,212 6,973 4 Assets4 113,599 137,126 154,707 157,065 164,087 178,275 186,284 195,707 201,608 203,165 5 Cash position5 8,343 11,978 14,567 13,082 15,444 15,017 15,565 16,943 17,959 18,709 6 Other 105,256 125,148 140,140 143,983 148,643 163,258 170,719 178,764 183,649 184,456 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 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Corporate profits with inventory valuation and capital consumption adjustment 159.1 225.2 285.7 260.0 277.4 291.1 282.8 291.6 229922..33 229988..55 332211..44 2 Profits before tax 165.5 203.2 235.7 225.5 243.3 246.0 224.8 228.7 222.3 221.0 232.8 3 Profits tax liability 60.7 75.8 89.8 84.5 92.7 95.8 83.1 87.7 85.3 83.6 88.2 4 Profits after tax 104.8 127.4 145.9 141.1 150.6 150.2 141.7 141.0 137.0 137.4 144.7 5 Dividends 69.2 72.9 80.5 75.4 77.7 79.9 81.3 83.1 84.5 85.6 86.4 6 Undistributed profits 35.6 54.5 65.3 65.6 72.9 70.2 60.3 58.0 52.5 51.8 58.3 7 Inventory valuation -9.5 -11.2 -5.6 -9.2 -13.5 -7.3 -.2 -1.6 .9 2.5 7.2 8 Capital consumption adjustment 3.1 33.2 55.7 43.6 47.6 52.3 58.3 64.5 69.1 75.0 81.4 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • January 1986 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities Billions of dollars, except for ratio 1984 1985 AAccccoouunntt 11997799 11998800 11998811 11998822 11998833 Q2 Q3 Q4 Q1 Q2 1 Current assets 1,214.8 1,327.0 1,418.4 1,432.7 1,557.3 1,630.1 1,666.1 1,682.0 1,694.7 1,704.0 2 Cash 118.0 126.9 135.5 147.0 165.8 154.7 150.0 160.9 153.5 154.6 3 U.S. government securities 16.7 18.7 17.6 22.8 30.6 36.9 33.2 36.6 35.2 35.1 4 Notes and accounts receivable 459.0 506.8 532.0 519.2 577.8 615.4 630.6 622.3 635.2 635.9 5 Inventories 505.1 542.8 583.7 578.6 599.3 629.8 656.9 655.6 664.6 663.7 6 Other 116.0 131.8 149.5 165.2 183.7 193.4 195.4 206.6 206.2 214.7 7 Current liabilities 807.3 889.3 970.0 976.8 1,043.0 1,111.9 1,142.2 1,150.7 1,159.5 1,163.9 8 Notes and accounts payable 460.8 513.6 546.3 543.0 577.8 605.1 623.9 627.4 615.6 625.9 9 Other 346.5 375.7 423.7 433.8 465.3 506.9 518.2 523.3 543.9 538.1 10 Net working capital 407.5 437.8 448.4 455.9 514.3 518.1 523.9 531.3 535.2 540.1 11 MEMO: Current ratio1 1.505 1.492 1.462 1.467 1.493 1.466 1.459 1.462 1.462 1.464 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. 1984 1985 IInndduussttrryy 11998833 11998844 1199885511 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q41 1 Total nonfarm business 304.78 354.44 383.98 337.95 349.97 361.48 368.29 371.16 387.83 389.54 387.40 Manufacturing 2 Durable goods industries 53.08 66.24 73.58 61.23 64.03 68.26 71.43 69.87 73.96 75.80 74.68 3 Nondurable goods industries 63.12 72.58 79.86 68.68 71.93 74.18 75.53 75.78 80.36 82.02 81.30 Nonmanufacturing 4 Mining 15.19 16.86 16.08 17.24 16.38 16.82 17.00 15.66 16.51 16.32 15.81 Transportation 5 Railroad 4.88 6.79 7.24 6.06 7.34 7.31 6.44 6.02 7.48 8.06 7.43 6 Air 4.36 3.56 4.28 3.35 3.53 3.72 3.65 4.20 3.66 4.86 4.39 7 Other 4.72 6.17 6.05 5.87 6.14 6.47 6.18 6.01 6.37 6.09 5.74 Public utilities 8 Electric 37.27 37.03 35.53 38.27 37.79 36.63 35.40 36.65 36.04 35.29 34.13 9 Gas and other 7.70 10.44 12.56 8.81 10.16 11.28 11.52 11.81 12.43 13.11 12.86 10 Commercial and other2 114.45 134.75 148.81 128.42 132.67 136.80 141.13 145.16 151.02 148.00 151.05 •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 1984 1985 AAccccoouunntt 11998811 11998822 11998833 Ql Q2 Q3 Q4 Ql Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 72.4 78.1 87.4 87.4 90.5 95.6 96.7 99.1 106.0 116.4 2 Business 100.3 101.4 113.4 120.5 124.4 124.5 135.2 142.1 144.6 141.4 3 Real estate 17.9 20.2 22.5 22.2 23.0 25.2 26.3 27.2 28.4 29.0 4 Total 190.5 199.7 223.4 230.1 238.0 245.3 258.3 268.5 279.0 286.5 Less: 5 Reserves for unearned income 30.0 31.9 33.0 32.8 33.9 36.0 36.5 36.6 38.6 41.0 6 Reserves for losses 3.2 3.5 4.0 4.1 4.4 4.3 4.4 4.9 4.8 4.9 7 Accounts receivable, net 157.3 164.3 186.4 193.2 199.6 205.0 217.3 227.0 235.6 240.6 8 All other 27.1 30.7 34.0 35.7 35.8 36.4 35.4 35.9 39.5 46.3 9 Total assets 184.4 195.0 220.4 228.9 235.4 241.3 252.7 262.9 275.2 286.9 LIABILITIES 10 Bank loans 16.1 18.3 18.7 16.2 18.3 19.7 21.3 19.8 18.5 18.2 11 Commercial paper 57.2 51.1 59.7 64.8 68.5 66.8 72.5 79.1 82.6 93.6 12 Other short-term 11.3 12.7 13.9 14.1 15.5 16.1 16.2 16.8 16.6 16.6 13 Long-term 56.0 64.4 68.1 70.3 69.7 73.8 77.2 78.3 85.7 86.4 14 All other liabilities 18.5 21.2 30.1 32.4 32.1 32.6 33.1 35.4 36.9 36.6 15 Capital, surplus, and undivided profits 25.3 27.4 29.8 31.1 31.4 32.3 32.3 33.5 34.8 35.7 16 Total liabilities and capital 184.4 195.0 220.4 228.9 235.4 241.3 252.7 262.9 275.2 286.9 NOTE. Components may not add to totals due to rounding. These data also appear in the Board's G.20 (422) release. For address, see 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 SSSeeepppttt... 333000,,, 111999888555111 July Aug. Sept. July Aug. Sept. July Aug. Sept. 1 Total 141,092 580 l,430r -3,105 25,791 28,942 26,111 25,211 27,512' 29,216 Retail financing of installment sales 2 Automotive (commercial vehicles) 13,733 366 389 660 1,170 1,212 1,488 804 823 828 3 Business, industrial, and farm equipment 20,198 -38 -37 -329 1,240 1,105 1,180 1,278 1,142 1,509 Wholesale financing 4 Automotive 14,806 -997 759 -4,746 8,497 10,471 7,853 9,494 9,712 12,599 5 Equipment 4,499 83 -80 6 638 882 508 555 962 502 6 All other 6,869 30 59 118 11,,557766 1,695 11,,775511 11,,660066 1,636 1,633 Leasing 7 Automotive 15,591 251 461 409 1,090 11,,111177 1,119 839 656 710 8 Equipment 37,940 584 231 271 1,223 1,048 1,215 639 817 944 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,221 207 -354' 952 9,201 9,994 9,654 8,994 10,348' 8,702 10 All other business credit 11,235 154 2' -446 1,156 1,418 1,343 1,002 1,416^ 1,789 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 Nonfinancial Statistics • January 1986 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1985 IItteemm 11998822 11998833 11998844 Apr. May June July Aug. Sept. Oct. 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 96.8 101.4 106.4 102.4 119.2 104.4 104.6»- 100.2 2 Amount of loan (thousands of dollars) 69.8 69.5 73.7 76.9 78.4 79.7 89.4 74.4 76.7' 74.5 3 Loan/price ratio (percent) 76.6 77.1 78.7 78.9 76.1 79.9 77.5 74.6 76.0' 75.8 4 Maturity (years) 27.6 26.7 27.8 27.4 26.8 27.7 27.5 24.5 26.7' 26.8 5 Fees and charges (percent of loan amount)2 2.95 2.40 2.64 2.65 2.49 2.40 2.24 2.46 2.62' 2.60 6 Contract rate (percent per annum) 14.47 12.20 11.87 11.55 11.55 11.31 10.94 10.78 10.69' 10.56 Vield (percent per annum) 7 FHLBB series5 15.12 12.66 12.37 12.05 12.01 11.75 11.34 11.24 11.17' 11.02 8 HUD series4 15.79 13.43 13.80 13.01 12.49 12.06 12.09 12.06 12.02 11.86 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5. 15.30 13.11 13.81 12.97 12.28 11.89 12.12 11.99 12.04 11.87 10 GNMA securities6 14.68 12.25 13.13 12.31 11.93 11.54 11.48 11.24 11.29 11.16 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 66,031 74,847 83,339 92,765 9933,,661100 94,777 95,634 %%,,332244 %%,,776699 9977,,222288 12 FHA/VA-insured 39,718 37,393 35,148 34,516 34,428 34,307 34,276 34,177 34,084 33,885 13 Conventional 26,312 37,454 48,191 58,250 59,182 60,470 61,359 62,147 62,685 63,343 Mortgage transactions (during period) 14 Purchases 15,116 17,554 16,721 1,515 11,,770033 1,904 1,918 11,,992211 11,,773399 1,767 15 2 3,528 978 0 0 0 251 230 101 200 Mortgage commitments7 16 Contracted (during period) 22,105 18,607 21,007 1,921 2,074 1,593 1,583 11,,779977 1,638 1,733 17 Outstanding (end of period) 7,606 5,461 6,384 5,361 5,589 5,062 4,517 4,245 3,974 3,840 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 5,131 5,9% 99,,228833 11,615 1111,,887799 1122,,557766 1122,,884444 1133,,552211 n.a. n.a. 19 FHA/VA 1,027 974 910 850 843 838 842 835 n.a. n.a. 20 Conventional 4,102 5,022 8,373 10,765 11,036 11,738 12,002 12,686 n.a. n.a. Mortgage transactions (during period) 21 Purchases 23,673 23,089 21,886 2,201 3,591 4,106 44,,662266 33,,660022 n.a. n.a. 22 24,170 19,686 18,506 1,973 3,189 3,292 4,200 2,682 n.a. n.a. Mortgage commitments9 23 Contracted (during period) 28,179 32,852 32,603 4,141 3,701 5,172 3,259 3,958 n.a. n.a. 24 Outstanding (end of period) 7,549 16,964 13,318 n.a. n.a. n.a. n.a. n.a. n.a. 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 Type of holder, and type of property 11998822 11998833 11998844 Q3 Q4 Ql Q2 Q3 1 All holders 1,631,283 1,811,445 2,024,882' 1,975,321' 2,024,882' 2,070,301' 2,126,156' 2,182,162 2 1- to 4-family 1,074,670 1,192,840 1,329,353' 1,296,522' 1,329,353' 1,359,653' 1,397,795' 1,439,029 3 Multifamily 145,767 156,738 170,459' 167,847' 170,459' 175,435' 178,333' 181,720 4 Commercial 300,799 349,195 410,669' 395,923' 410,669' 420,966' 436,310' 449,822 5 Farm 110,047 112,672 114,401' 115,031' 114,401' 114,247' 113,718' 111,590 6 Major financial institutions 1,021,327 1,108,249 1,241,197' 1,215,159' 1,241,197' 1,261,901 1,292,438' 1,320,686 7 Commercial banks1 301,272 330,521 374,780' 363,156 374,780' 383,444 395,956' 408,227 8 1- to 4-family 173,804 182,514 196,540' 193,090 196,540' 198,912 203,51C 207,775 9 Multifamily 16,480 18,410 20,216' 20,083 20,2^ 21,974 21,698' 21,963 10 Commercial 102,553 120,210 147,845' 139,742 147,845' 152,242 160,121' 167,532 11 Farm 8,435 9,387 10,179' 10,241 10,179' 10,316 10,627' 10,957 12 Mutual savings banks 94,452 131,940 154,441 146,072' 154,441 161,032 165,705' 172,602 13 1- to 4-family 64,488 93,649 107,302' 101,810' 107,302' 111,592' 114,375' 118,689 14 Multifamily 14,780 17,247 19,817' 18,947' 19,817' 20,668' 21,357' 22,384 15 Commercial 15,156 21,016 27,291' 25,285' 27,291' 28,741' 29,942' 31,497 16 Farm 28 28 31' 30 31' 31' 31 32 17 Savings and loan associations 483,614 494,789 555,277 550,129 555,277 559,263 569,292 575,172 18 1- to 4-family 393,323 390,883 431,450 429,101 431,450 433,429 441,201 445,848 19 Multifamily 38,979 42,552 48,309 47,861 48,309 48,936 49,813 50,293 20 Commercial 51,312 61,354 75,518 73,167 75,518 76,898 78,278 79,031 21 Life insurance companies 141,989 150,999 156,699 155,802 156,699 158,162 161,485 164,685 22 1- to 4-family 16,751 15,319 14,120 14,204 14,120 13,840 13,562 13,692 23 Multifamily 18,856 19,107 18,938 18,828 18,938 18,964 18,983 19,310 24 Commercial 93,547 103,831 111,175 110,149 111,175 113,187 116,812 119,643 25 Farm 12,835 12,742 12,466 12,621 12,466 12,171 12,128 12,040 26 Federal and related agencies 138,741 148,328 158,993 154,768 158,993 163,531' 165,906' 167,116 27 Government National Mortgage Association 4,227 3,395 2,301 2,389 2,301 1,964 1,825 1,640 28 1- to 4-family 676 630 585 594 585 576 564 552 29 Multifamily 3,551 2,765 1,716 1,795 1,716 1,388 1,261 1,088 30 Farmers Home Administration 1,786 2,141 1,276 738 1,276 1,062 790 577 31 1- to 4-family 783 1,159 213 206 213 156 223 185 32 Multifamily 218 173 119 126 119 82 136 139 33 Commercial 377 409 497 113 497 421 163 72 34 Farm 408 400 447 293 447 403 268 181 35 Federal Housing and Veterans Administration 5,228 4,894 4,816 4,749 4,816 4,878 4,882 4,881 36 1- to 4-family 1,980 1,893 2,048 1,982 2,048 2,181 2,205 2,254 37 Multifamily 3,248 3,001 2,768 2,767 2,768 2,697 2,677 2,627 38 Federal National Mortgage Association — 71,814 78,256 87,940 84,850 87,940 91,975 94,777 96,769 39 1- to 4-family 66,500 73,045 82,175 79,175 82,175 86,129 88,788 90,590 40 Multifamily 5,314 5,211 5,765 5,675 5,765 5,846 5,989 6,179 41 Federal Land Banks 50,953 52,010 52,261 52,595 52,261 52,104' 51,056' 49,255 42 1- to 4-family 3,130 3,081 3,074 3,068 3,074 3,064' 3,006' 2,900 43 Farm 47,823 48,929 49,187 49,527 49,187 49,040 48,05c 46,355 44 Federal Home Loan Mortgage Corporation. 4,733 7,632 10,399 9,447 10,399 11,548 12,576 13,994 45 1- to 4-family 4,686 7,559 9,654 8,841 9,654 10,642 11,288 12,374 46 Multifamily 47 73 745 606 745 906 1,288 1,620 47 Mortgage pools or trusts2 •. 216,654 285,073 332,057 317,548 332,057 347,793 365,748 388,031 48 Government National Mortgage Association 118,940 159,850 179,981 175,770 179,981 185,954 192,925 200,996 49 1- to 4-family 116,038 155,950 175,589 171,481 175,589 181,419 188,228 196,112 50 Multifamily 2,902 3,900 4,392 4,289 4,392 4,535 4,697 4,884 51 Federal Home Loan Mortgage Corporation. 42,964 57,895 70,822 63,964 70,822 76,759 83,327 91,095 52 1- to 4-family 42,560 57,273 70,253 63,352 70,253 75,781 82,369 90,137 53 Multifamily 404 622 569 612 569 978 958 958 54 Federal National Mortgage Association3 ... 14,450 25,121 36,215 32,888 36,215 39,370 42,755 48,769 55 1- to 4-family 14,450 25,121 35,965 32,730 35,965 38,772 41,985 47,857 56 Multifamily n.a. n.a. 250 158 250 598 770 912 57 Farmers Home Administration 40,300 42,207 45,039 44,926 45,039 45,710 46,741 47,171 58 1- to 4-family 20,005 20,404 21,813 21,595 21,813 21,928 21,962 22,012 59 Multifamily 4,344 5,090 5,841 5,618 5,841 6,041 6,377 6,527 60 Commercial 7,011 7,351 7,559 7,844 7,559 7,681 8,014 8,114 61 Farm 8,940 9,362 9,826 9,869 9,826 10,060 10,388 10,518 62 Individual and others4 254,561 269,795 292,635' 287,846' 292,635' 297,076' 302,064' 306,328 63 1- to 4-family5 155,496 164,360 178,572' 175,293' 178,572' 181,232' 184,529' 188,052 64 Multifamily 36,644 38,587 41,014' 40,482' 41,014' 41,822' 42,329' 42,836 65 Commercial 30,843 35,024 40,784' 39,621' 40,784' 41,796' 42.98C 43,933 66 Farm 31,578 31,824 32,265' 32,450 32,265' 32,226' 32,226' 31,507 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 DomesticN onfinancial Statistics • January 1986 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1984 1985 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998833 11998844 Dec. Jan. Feb. Mar. Apr. May June July Aug. Amounts outstanding (end of period) 1 Total 383,701 460,500 460,500 461,530 463,628 471,567 479,935 488,666 495,813 503,834 By major holder 2 Commercial banks 171,978 212,391 212,391 213,951 215,778 219,970 223,850 226,973 229,676 232,913 3 Finance companies 87,429 96,747 96,747 96,732 97,360 99,133 101,324 104,130 105,971 107,985 4 Credit unions 53,471 67,858 67,858 68,538 68,939 70,432 71,418 72,381 73,468 74,614 5 Retailers2 37,470 40,913 40,913 38,978 37,483 37,082 37,091 37,472 37,548 37,399 6 Savings and loans 23,108 29,945 29,945 30,520 31,405 32,349 33,514 34,754 35,901 37,301 7 Gasoline companies ... 4,131 4,315 4,315 4,329 4,012 3,820 3,834 3,918 4,075 4,316 8 Mutual savings banks.. 6,114 8,331 8,331 8,482 8,651 8,781 8,904 9,038 9,174 9,306 By mqjor type of credit 9 Automobile 143,114 172,589 172,589 173,769 175,491 179,661 183,558 187,795 191,315 194,678 10 Commercial banks... 67,557 85,501 85,501 86,223 87,333 89,257 90,915 92,403 94,099 95,763 11 Credit unions 25,574 32,456 32,456 32,781 32,973 33,687 34,159 34,620 35,139 35,687 12 Finance companies .. 49,983 54,632 54,632 54,765 55,185 56,717 58,484 60,772 62,077 63,228 13 Revolving 81,977 101,555 101,555 100,565 99,316 100,434 101,887 103,492 104,333 105,539 14 Commercial banks... 44,184 60,549 60,549 61,445 61,978 63,684 65,127 66,311 66,956 68,093 15 Retailers 33,662 36,691 36,691 34,791 33,326 32,930 32,926 33,263 33,302 33,130 16 Gasoline companies . 4,131 4,315 4,315 4,329 4,012 3,820 3,834 3,918 4,075 4,316 17 Mobile home 23,862 24,556 24,556 24,281 24,379 24,456 24,675 24,925 25,205 25,545 18 Commercial banks... 9,842 9,610 9,610 9,498 9,456 9,425 9,432 9,445 9,480 9,493 19 Finance companies .. 9,547 9,243 9,243 9,053 9,044 8,981 8,992 9,016 9,061 9,146 20 Savings and loans ... 3,906 4,985 4,985 5,005 5,150 5,305 5,4% 5,699 5,887 6,117 21 Credit unions 567 718 718 725 729 745 755 765 777 789 22 Other 134,748 161,800 161,800 162,915 164,442 167,016 169,815 172,454 174,960 178,072 23 Commercial banks... 50,395 56,731 56,731 56,785 57,011 57,604 58,376 58,814 59,141 59,564 24 Finance companies .. 27,899 32,872 32,872 32,914 33,131 33,435 33,848 34,342 34,833 35,611 25 Credit unions 27,330 34,684 34,684 35,032 35,237 36,000 36,504 36,9% 37,552 38,138 26 Retailers 3,808 4,222 4,222 4,187 4,157 4,152 4,165 4,209 4,246 4,269 27 Savings and loans ... 19,202 24,960 24,960 25,515 26,255 27,044 28,018 29,055 30,014 31,184 28 Mutual savings banks 6,114 8,331 8,331 8,482 8,651 8,781 8,904 9,038 9,174 9,306 Net change (during period) 29 Total 48,742 76,799 6,819 7,223 9,041 8,342 8,270 9,042 5,227 6,247 5,726' By mqjor holder 30 Commercial banks 19,488 40,413 3,028 3,799 5,071 4,847 3,853 4,108 1,690 1,824 1,764 31 Finance companies 18,572 18,636 1,196 901 1,203 2,048 1,885 2,373 1,218 1,629 2,371 32 Credit unions 6,218 14,387 1,336 1,290 1,423 797 1,215 673 797 1,149 479' 33 Retailers2 5,075 3,443 389 251 269 91 168 341 -31 112 -99 34 Savings and loans 7,285 6,837 576 922 997 715 1,063 1,327 1,417 1,338 %9 35 Gasoline companies ... 68 184 117 -91 -102 -142 -45 59 -51 21 103 36 Mutual savings banks .. 1,322 2,217 177 151 180 -14 131 161 187 174 139 By mqjor type of credit 37 Automobile 16,856 29,475 2,687 2,887 3,198 3,391 3,488 3,792 2,686 2,365 2,206' 38 Commercial banks... 8,002 17,944 1,275 1,616 1,790 1,767 1,546 1,589 1,488 1,025 136 39 Credit unions 2,978 6,882 640 598 6% 381 580 325 380 550 226' 40 Finance companies .. 11,752 9,298 772 673 712 1,243 1,362 1,878 818 790 1,844 41 Revolving 12,353 19,578 1,445 1,957 2,527 2,631 2,126 2,429 -73 856 936 42 Commercial banks... 7,518 16,365 1,001 1,809 2,429 2,698 2,003 2,095 42 733 968 43 Retailers 4,767 3,029 327 239 200 75 168 275 -64 102 -135 44 Gasoline companies . 68 184 117 -91 -102 -142 -45 59 -51 21 103 45 Mobile home 1,452 694 117 -159 282 -11 218 186 196 324 19P 46 Commercial banks... 237 -232 29 -89 41 -50 19 -21 -31 -22 3 47 Finance companies .. 776 -608 -13 -144 33 -63 13 -19 1 74 -13 48 Savings and loans ... 763 1,079 88 60 192 92 175 219 217 261 204 49 Credit unions 64 151 13 14 16 10 11 7 9 11 12 50 Other 18,081 27,052 2,570 2,538 3,034 2,331 2,438 2,635 2,418 22,,770022 2,385' 51 Commercial banks... 3,731 6,336 723 463 811 432 285 445 191 8888 657 52 Finance companies .. 6,044 9,946 437 372 458 868 510 514 399 765 540 53 Credit unions 3,176 7,354 683 678 711 406 624 341 408 588 248' 54 Retailers 308 414 62 12 69 16 0 66 33 10 36 55 Savings and loans ... 6,522 5,758 488 862 805 623 888 1,108 1,200 1,077 765 56 Mutual savings banks 1,322 2,217 177 151 180 -14 131 161 187 174 139 1. The Board's series cover most short- and intermediate-term credit extended NOTE. Total consumer noninstallment credit outstanding—credit scheduled to to individuals through regular business channels, usually to finance the purchase be repaid in a lump sum, including single-payment loans, charge accounts, and of consumer goods and services or to refinance debts incurred for such purposes, service credit—amounted to, not seasonally adjusted, $85.9 billion at the end of and scheduled to be repaid (or with the option of repayment) in two or more 1982, $96.9 billion at the end of 1983, and $116.6 biUion at the end of 1984. installments. These data also appear in the Board's G.19 (421) release. For address, see 2. Includes auto dealers and excludes 30-day charge credit held by travel and inside front cover. 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 1985 IItteemm 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept. INTEREST RATES Commercial banks1 1 48-month new car2 16.82 13.92 13.71 n.a. n.a. 13.16 n.a. n.a. 12.72 n.a. 2 24-month personal 18.64 16.50 16.47 n.a. n.a. 16.09 n.a. n.a. 15.84 n.a. 3 120-month mobile home2 18.05 16.08 15.58 n.a. n.a. 15.03 n.a. n.a. 14.72 n.a. 4 Credit card 18.51 18.78 18.77 n.a. n.a. 18.74 n.a. n.a. 18.62 n.a. Auto finance companies 5 New car 16.15 12.58 14.62 12.65 11.92 11.87 12.06 12.46 10.87 8.84 6 Used car 20.75 18.74 17.85 17.78 17.78 17.84 17.77 17.49 17.57 17.31 OTHER TERMS3 Maturity (months) 7 New car 45.9 45.9 48.3 52.2 51.5 50.9 51.3 51.7 51.1 51.2 8 Used car 37.0 37.9 39.7 41.3 41.3 41.4 41.3 41.5 41.6 41.4 Loan-to-value ratio 9 New car 85 86 88 91 91 91 91 91 91 92 10 Used car 90 92 92 93 93 94 94 95 95 95 Amount financed (dollars) 11 New car 8,178 8,787 9,333 9,232 9,305 9,775 9,965 10,355 10,422 10,449 12 Used car 4,746 5,033 5,691 5,976 6,043 6,117 6,116 6,146 6,139 6,097 1. Data for midmonth of quarter only. 3. At auto finance companies. 2. Before 1983 the maturity for new car loans was 36 months, and for mobile NOTE. These data also appear in the Board's G.19 (421) release. For address, home loans was 84 months. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic NonfinancialS tatistics • January 1986 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1982 1983 1984 1985 H2 HI H2 HI H2 HI Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 388.7 340.0 371.6 398.3 538.9 755.6 442.1 508.8 569.0 704.0 807.3 708.4 By sector and instrument 2 U.S. government 37.4 79.2 87.4 161.3 186.6 198.8 218.4 222.0 151.1 172.7 224.9 182.3 3 Treasury securities 38.8 79.8 87.8 162.1 186.7 199.0 218.8 222.1 151.2 172.9 225.0 182.4 4 Agency issues and mortgages -1.4 -.6 -.5 -.9 -.1 -.2 -.4 -.1 -.1 -.2 -.1 -.1 5 Private domestic nonfinancial sectors 351.3 260.8 284.2 237.0 352.3 556.8 223.7 286.7 417.9 531.3 582.4 526.1 6 Debt capital instruments 213.9 186.3 153.7 153.5 249.1 322.1 167.1 225.4 272.7 281.8 362.4 344.1 7 Tax-exempt obligations 30.3 30.3 23.4 48.6 57.3 65.8 54.6 57.3 57.3 38.9 92.6 80.5 8 Corporate bonds 17.3 26.7 21.8 18.7 16.0 42.3 25.3 21.4 10.6 24.4 60.2 61.4 9 Mortgages 166.2 129.4 108.5 86.2 175.7 214.1 87.1 146.7 204.7 218.5 209.6 202.2 10 Home mortgages 121.7 93.8 71.6 50.4 115.6 139.2 50.1 96.2 135.1 144.8 133.5 140.8 11 Multifamily residential 8.3 7.1 4.8 5.3 9.4 14.0 5.8 6.3 12.6 16.0 12.0 13.9 12 Commercial 24.4 19.2 22.2 25.2 47.6 58.8 27.3 42.3 53.0 55.6 62.0 49.0 13 Farm 11.8 9.3 9.9 5.3 3.0 2.1 3.9 1.9 4.1 2.0 2.1 -1.5 14 Other debt instruments 137.5 74.5 130.5 83.6 103.3 234.8 56.6 61.3 145.2 249.5 220.0 182.0 15 Consumer credit 45.4 4.7 22.7 20.1 59.8 96.5 21.7 44.1 75.5 102.1 90.9 122.3 16 Bank loans n.e.c 51.2 37.0 54.7 54.1 26.7 79.4 41.9 13.7 39.8 90.2 68.7 16.6 17 Open market paper 11.1 5.7 19.2 -4.7 -1.6 23.7 -19.3 -10.0 6.9 33.5 13.8 15.6 18 Other 29.7 27.1 33.9 14.0 18.3 35.2 12.4 13.6 23.1 23.7 46.7 27.6 19 By borrowing sector 351.3 260.8 284.2 237.0 352.3 556.8 223.7 286.7 417.9 531.3 582.4 526.1 20 State and local governments 17.6 17.2 6.8 25.9 37.6 45.0 29.3 36.1 39.2 21.4 68.6 66.6 21 Households 181.0 117.9 119.2 90.4 190.4 249.5 93.5 156.0 224.8 248.2 250.7 273.1 22 Farm 21.4 14.3 16.4 7.9 4.5 2.9 5.9 1.1 7.8 2.1 3.8 -10.5 23 Nonfarm noncorporate 35.3 31.0 38.4 40.9 65.2 77.8 42.1 55.5 75.0 83.0 72.5 69.6 24 Corporate 96.0 80.4 103.4 71.9 54.6 181.7 52.9 38.0 71.1 176.6 186.8 127.3 25 Foreign net borrowing in United States 20.2 27.2 27.2 15.7 18.9 1.7 21.2 15.3 22.5 22.9 -19.5 -14.2 26 Bonds 3.9 .8 5.4 6.7 3.8 4.1 11.0 4.6 2.9 1.1 7.0 4.8 27 Bank loans n.e.c 2.3 11.5 3.7 -6.2 4.9 -7.8 -4.7 11.3 -1.5 -4.6 -11.0 -11.7 28 Open market paper 11.2 10.1 13.9 10.7 6.0 1.4 9.0 -4.6 16.5 20.9 -18.1 -8.8 29 U.S. government loans 2.9 4.7 4.2 4.5 4.3 4.0 6.0 3.9 4.6 5.5 2.6 1.5 30 Total domestic plus foreign 408.9 367.2 398.8 414.0 557.8 757.4 463.3 524.0 591.5 726.9 787.8 694.3 Financial sectors 31 Total net borrowing by financial sectors 82.4 57.6 89.0 76.2 85.2 130.3 57.5 66.7 103.7 119.2 141.3 177.9 By instrument 32 U.S. government related 47.9 44.8 47.4 64.9 67.8 74.9 69.7 66.2 69.4 69.6 80.1 105.0 33 Sponsored credit agency securities 24.3 24.4 30.5 14.9 1.4 30.4 7.5 -4.1 6.9 29.9 31.0 26.1 34 Mortgage pool securities 23.1 19.2 15.0 49.5 66.4 44.4 62.2 70.3 62.5 39.7 49.2 78.9 .6 1.2 1.9 .4 36 Private financial sectors 34.5 12.8 41.6 11.3 17.4 55.4 -12.2 .5 34.4 49.6 61.2 72.8 37 Corporate bonds 7.8 1.8 3.5 9.7 8.6 18.5 11.2 6.4 10.7 12.2 24.7 31.9 38 Mortgages * * * .1 * -.1 .1 * * -.1 -.1 * 39 Bank loans n.e.c -.5 -.9 .9 1.9 -.2 1.0 .6 -2.5 2.2 .3 1.6 * 40 Open market paper 18.0 4.8 20.9 -1.1 16.0 20.4 -14.6 8.7 23.4 21.3 19.5 29.3 41 Loans from Federal Home Loan Banks 9.2 7.1 16.2 .8 -7.0 15.7 -9.5 -12.1 -2.0 15.9 15.5 11.6 By sector 42 Sponsored credit agencies 24.8 25.6 32.4 15.3 1.4 30.4 7.5 -4.1 6.9 29.9 31.0 26.1 43 Mortgage pools 23.1 19.2 15.0 49.5 66.4 44.4 62.2 70.3 62.5 39.7 49.2 78.9 44 Private financial sectors 34.5 12.8 41.6 11.3 17.4 55.4 -12.2 .5 34.4 49.6 61.2 72.8 45 Commercial banks 1.6 .5 .4 1.2 .5 4.4 1.7 .8 .2 4.8 3.9 8.2 46 Bank affiliates 6.5 6.9 8.3 1.9 8.6 10.9 -5.8 6.1 11.1 20.0 1.8 8.2 47 Savings and loan associations 12.6 7.4 15.5 2.5 -2.1 22.7 -9.3 -9.3 5.2 19.7 25.6 5.6 48 Finance companies 15.3 -1.1 18.2 6.3 11.3 18.1 1.9 3.9 18.8 5.6 30.6 51.6 49 REITs -.1 -.5 -.2 * .3 .2 * -.3 -.2 .3 .1 .1 All sectors 50 Total net borrowing 491.3 424.9 487.8 490.2 643.0 887.6 520.8 590.7 695.2 846.1 929.2 872.1 51 U.S. government securities 84.8 122.9 133.0 225.9 254.4 273.8 288.3 288.4 220.5 242.4 305.1 287.4 52 State and local obligations 30.3 30.3 23.4 48.6 57.3 65.8 54.6 57.3 57.3 38.9 92.6 80.5 53 Corporate and foreign bonds 29.0 29.3 30.7 35.0 28.4 64.8 47.5 32.5 24.3 37.7 92.0 98.1 54 Mortgages 166.1 129.3 108.4 86.2 175.6 213.9 87.1 146.6 204.7 218.3 209.4 202.1 55 Consumer credit 45.4 4.7 22.7 20.1 59.8 96.5 21.7 44.1 75.5 102.1 90.9 122.3 56 Bank loans n.e.c 52.9 47.7 59.2 49.9 31.4 72.6 37.8 22.5 40.4 85.9 59.3 4.9 57 Open market paper 40.3 20.6 54.0 4.9 20.4 45.4 -25.0 -5.9 46.8 75.7 15.2 36.1 58 Other loans 42.4 40.1 56.2 19.7 15.5 54.9 8.9 5.3 25.7 45.1 64.8 40.8 External corporate equity funds raised in United States 59 Total new share issues -4.3 21.9 -3.0 35.3 67.8 -33.1 47.2 83.4 52.1 -40.8 -25.5 25.4 60 Mutual funds .1 5.2 6.3 18.4 32.8 37.7 24.3 36.8 28.9 39.6 35.7 94.9 61 All other -4.3 16.8 -9.3 16.9 35.0 -70.8 22.9 46.7 23.2 -80.4 -61.2 -69.5 62 Nonfinancial corporations -7.8 12.9 -11.5 11.4 28.3 -77.0 15.8 38.2 18.4 -84.5 -69.4 -78.7 63 Financial corporations 2.7 1.8 1.9 4.0 2.7 5.1 4.1 2.7 2.6 4.8 5.3 5.4 64 Foreign shares purchased in United States .8 2.1 .3 1.5 4.0 1.1 3.0 5.7 2.2 -.7 2.9 3.8 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 1984 Transaction category, or sector 1980 1981 1983 1984 H2 H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 388.7 398.3 538.9 442.1 569.0 807.3 1.4 By public agencies and foreign 2 Total net advances 75.2 97.1 97.7 114.1 117.5 142.2 127.1 120.2 114.7 123.2 161.2 1931 .6 3 U.S. government securities -6.3 15.8 17.1 22.7 27.6 36.0 35.7 40.7 14.4 29.5 42.5 521 .8 4 Residential mortgages 35.8 31.7 23.5 61.0 76.1 56.5 74.5 80.2 72.1 52.8 60.1 86. .5 5 FHLB advances to savings and loans 9.2 7.1 16.2 .8 -7.0 15.7 -9.5 -12.1 -2.0 15.9 15.5 11. 6 6 Other loans and securities 36.5 42.5 40.9 29.5 20.8 34.1 26.5 11.5 30.2 25.1 43.2 421 .7 Total advanced, by sector 7 U.S. government 19.0 23.7 24.0 15.9 9.7 17.2 17.1 9.1 10.3 7.9 26.5 5i .2 8 Sponsored credit agencies 53.1 45.6 48.2 65.5 69.8 73.3 69.1 68.6 71.0 73.6 73.0 111. 2 9 Monetary authorities 7.7 4.5 9.2 9.8 10.9 8.4 15.7 15.6 6.2 11.9 4.9 27' .9 10 Foreign -4.5 23.3 16.2 22.8 27.1 43.4 25.3 27.0 27.2 29.9 56.9 491 .2 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools . 47.9 44.8 47.4 64.9 67.8 74.9 69.7 66.2 69.4 69.6 80.1 1051 .0 12 Foreign 20.2 27.2 27.2 15.7 18.9 1.7 21.2 15.3 22.5 22.9 -19.5 -14 L2 Private domestic funds advanced 13 Total net advances 381.6 314.9 348.5 364.8 508.1 690.0 405.9 470.0 546.1 673.3 706.8 605i .7 14 U.S. government securities 91.0 107.1 115.9 203.1 226.9 237.8 252.6 247.6 206.1 213.0 262.7 2341 .7 15 State and local obligations 30.3 30.3 23.4 48.6 57.3 65.8 54.6 57.3 57.3 38.9 92.6 801 .5 16 Corporate and foreign bonds 18.5 19.3 18.8 14.8 14.9 29.9 29.6 21.4 8.5 17.7 42.2 33L 2 17 Residential mortgages 94.2 69.1 52.9 -5.5 48.9 96.6 -18.7 22.2 75.5 107.9 85.3 68! .l 18 Other mortgages and loans 156.7 96.3 153.8 104.6 153.0 275.6 78.2 109.4 196.7 311.7 239.5 200) .9 19 LESS: Federal Home Loan Bank advances 9.2 7.1 16.2 -7.0 15.7 -9.5 -12.1 -2.0 15.9 15.5 111 .6 Private financial intermediation 20 Credit market funds advanced by private financial institutions 316.4 281.3 317.2 287.6 382.7 553.2 300.7 334.6 430.7 548.1 558.3 465i. O 2 2 1 2 S C a o v m in m g e s r i c n ia s l t it b u a t n io k n in s g 1 5 2 6 3 . . 5 1 1 5 0 4 0 . . 5 6 1 2 0 7 2 . . 4 3 1 3 0 1 7 . . 4 2 1 14 3 0 6 . . 5 1 1 14 8 3 1 . . 0 9 1 3 1 7 4 . . 6 5 1 1 2 3 1 2 . . 6 7 1 14 5 8 0 . . 4 6 1 16 9 1 6 . . 5 0 1 12 6 4 7 . . 6 9 1 7 4 8 0) 1 . . 3 0 23 Insurance and pension funds 85.6 94.5 97.6 107.4 94.2 123.1 103.8 83.0 105.3 111.8 134.4 101. 6 24 Other finance 51.2 31.7 89.9 41.5 11.9 105.1 44.8 -2.7 26.5 78.8 131.4 145i. 2 25 Sources of funds 316.4 281.3 317.2 287.6 382.7 553.2 300.7 334.6 430.7 548.1 558.3 465i. O 26 Private domestic deposits and RPs 137.4 169.6 211.9 174.4 205.2 287.7 201.7 194.1 216.3 277.1 298.2 186i. 2 27 Credit market borrowing 34.5 12.8 41.6 11.3 17.4 55.4 -12.2 .5 34.4 49.6 61.2 72! .8 28 Other sources 144.5 98.8 63.7 101.8 160.0 210.1 111.2 140.0 180.0 221.3 198.9 2061 .0 29 Foreign funds 27.6 -21.7 -8.7 -26.7 22.1 19.0 -25.1 -14.2 58.5 27.2 10.9 26i .3 30 Treasury balances .4 -2.6 -1.1 6.1 -5.3 4.0 14.1 10.1 -20.8 1.7 6.4 201 .1 31 Insurance and pension reserves 72.9 83.7 90.7 103.2 95.1 111.7 95.3 83.5 106.8 118.0 105.5 931 .3 32 Other, net 43.6 39.4 -17.2 19.3 48.1 75.4 26.9 60.6 35.6 74.6 76.2 66i .2 Private domestic nonfinancial investors 3 3 3 4 Di U re . c S t . le g n o d v i e n r g n m in e n c t r e s d e i c t u m ri a ti r e k s e ts 9 5 9 2 . . 7 5 4 2 6 4 . . 5 6 7 29 2 . . 3 9 8 3 8 2 . . 5 1 1 8 4 8 2 . . 3 8 1 1 9 2 2 2 . . 2 8 9 2 3 8 . . 0 9 1 9 3 7 5 . . 5 9 1 7 4 9 9 . . 1 8 1 12 7 8 4 . . 3 8 2 1 0 1 9 7 . . 6 3 2 1 1 2 3 3 1 i . . 5 5 3 35 6 S C t o a r t p e o a r n a d te lo an c d al f o o b re li i g g a n t i b o o ns n ds -1 9 . . 4 9 -11 7 . . 0 0 - 1 3 1 . . 9 1 29 3 . . 2 9 - 4 9 3 . . 2 5 42*.2 2 1 9 3 . . 7 8 -1 4 4 7 . . 5 2 - 3 4 9 . . 0 8 - 2 8 4 . . 4 3 60 8 . . 1 5 4 1 1 3i . . 9 l 37 Open market paper 8.6 -3.1 2.7 -.6 6.5 -1.0 -4.7 -6.0 19.1 4.4 -6.5 11. 6 38 Other 30.1 29.1 33.7 24.0 13.7 28.2 25.4 11.8 15.6 26.2 30.3 231 .4 39 Deposits and currency 146.8 181.1 221.9 181.6 224.4 292.2 211.5 215.9 232.8 288.5 296.0 2031 .8 40 Currency 8.0 10.3 9.5 9.7 14.3 8.6 12.7 14.8 13.8 15.9 1.4 181. 8 41 Checkable deposits 18.3 5.2 18.0 15.4 23.0 21.4 29.3 49.1 -3.0 25.0 17.7 17. 1 42 Small time and savings accounts 59.3 82.9 47.0 138.1 219.5 149.2 193.1 278.9 160.1 129.9 168.6 1621 .5 43 Money market fund shares 34.4 29.2 107.5 24.7 -44.1 47.2 10.0 -84.0 -4.2 30.2 64.2 4, 2 4 4 4 4 5 6 D S L e a e c r p g u o e r s i i t t y t i s m R i e n P d s f o ep re o i s g i n ts countries 1 6 8 1 . . . 8 6 5 4 6 5 1 . . . 5 8 1 3 2 6 . . . 5 9 5 - -2 7 3 . . . 5 7 8 - 1 7 4 4 . . . 5 8 3 - - 7 5 4 5 . . . 8 0 7 -3 -2 7 6 . . . 9 3 6 -6 1 1 7 1 . . 0 . 0 0 4 1 2 5 7 . . . 9 7 5 - 8 4 3 8 . . . 5 3 8 -1 - 6 3 5 2 . . . 6 0 7 - - 2 1 4 1 . . . . 7 2 3 47 Total of credit market instruments, deposits and currency 294.7 367.2 484.5 304.5 351.8 463.3 '.3 48 Public holdings as percent of total 18.4 26.4 24.5 27.6 21.1 18.8 27.4 22.9 19.4 17.0 20.5 '.9 49 Private financial intermediation (in percent) 82.9 89.3 91.0 78.8 75.3 80.2 74.1 71.2 78.9 81.4 79.0 i.8 50 Total foreign funds 23.1 1.6 7.6 -3.9 49.2 62.4 .1 12.8 85.7 57.0 67.8 i.5 MEMO: Corporate equities not included above 51 Total net issues -4.3 21.9 -3.0 35.3 67.8 -33.1 47.2 83.4 52.1 -40.8 -25.5 251 .4 52 Mutual fund shares .1 5.2 6.3 18.4 32.8 37.7 24.3 36.8 28.9 39.6 35.7 94 .9 53 Other equities -4.3 16.8 -9.3 16.9 35.0 -70.8 22.9 46.7 23.2 -80.4 -61.2 -69 1.5 54 Acquisitions by financial institutions 12.9 24.9 20.9 37.1 56.4 11.1 63.9 76.2 36.5 2.6 19.6 56I .9 55 Other net purchases -17.1 -3.0 -23.9 -1.8 11.4 -44.3 -16.7 7.2 15.6 -43.4 -45.1 -31 .5 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 2Aine 1. sum of lines 28 and 47 less lines 40 and 46. 49. Line 20/line 13. 18. Includes farm and commercial mortgages. 50. Sum of lines 10 and 29. 26. Line 39 less lines 40 and 46. 51. 53. Includes issues by financial institutions. 27. Excludes equity issues and investment company shares. Includes line 19. NOTE. Full statements for sectors and transaction types in flows and in amounts 29. Foreign deposits at commercial banks, bank borrowings from foreign outstanding may be obtained from Flow of Funds Section, Division of Research branches, and liabilities of foreign banking agencies to foreign affiliates. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits at commercial banks. D.C. 20551. 31. Excludes net investment of these reserves in corporate equities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • January 1986 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures' 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1985 MMeeaassuurree 11998822 11998833 11998844 Feb. Mar. Apr. May June July Aug/ Sept/ Oct. 1 Industrial production 103.1 109.2 121.8 123.7 124.0 124.1 124.1 124.3 124.1 125.0 124.9 124.9 Market groupings 2 Products, total 107.8 113.9 127.1 129.8 130.3 130.8 131.4 131.6 131.6 132.9 132.9 133.1 3 Final, total 109.5 114.7 127.8 130.4 130.8 131.3 131.7 131.6 131.8 133.2 133.4 133.4 4 Consumer goods 101.4 109.3 118.2 119.1 119.8 119.5 120.0 120.4 120.1 121.4 121.5 121.8 5 Equipment 120.2 121.7 140.5 145.3 145.4 146.9 147.1 146.6 147.3 149.0 149.1 148.9 6 Intermediate 101.7 111.2 124.9 127.7 128.6 129.3 130.3 131.4 130.7 131.8 131.4 131.8 7 Materials 96.7 102.8 114.6 115.4 115.5 115.0 114.2 114.3 113.8 114.2 113.9 113.7 Industry groupings 8 Manufacturing 102.2 110.2 123.9 125.8 126.3 126.6 126.6 126.7 126.9 128.1 127.9 127.9 Capacity utilization (percent)2 9 Manufacturing 70.3 74.0 80.8 80.4 80.5 80.5 80.3 80.1 80.1 80.6 80.3 80.1 10 Industrial materials industries 71.7 75.3 82.3 81.5 81.4 80.9 80.1 80.1 79.5 79.7 79.3 79.0 11 Construction contracts (1977 = 100)3 111.0 137.0 149.0 145.0 162.0 161.0 162.0 142.0 164.0 163.0 166.0 169.0 12 Nonagricultural employment, total4 136.1 137.1 143.6 146.8 147.3 147.6 148.0 148.1 148.5 148.9 149.1 149.7 13 Goods-producing, total 102.2 100.1 106.1 107.5 107.5 107.6 107.5 107.3 107.2 107.3 107.1 107.5 14 Manufacturing, total 96.6 94.8 99.8 100.6 100.4 100.1 99.9 99.7 99.5 99.6 99.1 99.4 15 Manufacturing, production-worker ... 89.1 87.9 94.0 93.3 93.0 92.6 92.3 92.0 91.8 91.9 91.4 91.8 16 Service-producing 154.7 157.3 164.1 168.3 169.1 169.5 170.3 170.5 171.1 171.7 172.2 172.9 17 Personal income, total 410.3 435.6 478.1 499.4 501.0 505.5 502.2 504.1 506.2 507.4 509.1 511.2 18 Wages and salary disbursements 367.4 388.6 422.5 440.5 443.7 445.7 446.8 449.8 450.4 452.6 455.6 457.3 19 Manufacturing 285.5 294.7 323.6 332.9 334.8 333.5 333.9 334.7 334.6 335.9 336.1 337.9 20 Disposable personal income5 398.0 427.1 470.3 484.7 481.3 496.3 504.5 492.1 494.0 494.6 495.7 497.4 21 Retail sales (1977 = 100)6 148.1 162.0 179.0 186.1 185.7 191.5 190.7 188.8 189.9 194.2 198.4 190.1 Prices7 22 Consumer 289.1 298.4 311.1 317.4 318.8 320.1 321.3 322.3 322.8 323.5 324.5 325.5 23 Producer finished goods 280.7 285.2 291.1 292.6 292.1 293.1 294.1 293.9 294.8 293.5 290.2 294.8 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 were Seasonally adjusted data for changes in the price indexes may be obtained from 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. 1985 CCaatteeggoorryy 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept. Oct. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 174,450 176,414 178,602 179,891 180,024 180,171 180,322 180,492 180,657 180,831 181,011 7 Labor force (including Armed Forces)1 112,383 113,749 115,763 117,738 117,596 117,600 117,009 117,543 117,551 118,077 118,400 3 Civilian labor force 110,204 111,550 113,544 115,514 115,371 115,373 114,783 115,314 115,299 115,818 116,159 4 Nonagricultural industries2 96,125 97,450 101,685 103,757 103,517 103,648 103,232 103,737 104,080 104,568 104,841 5 Agriculture 3,401 3,383 3,321 3,362 3,428 3,312 3,138 3,126 3,092 2,976 3,026 Unemployment 6 Number 10,678 10,717 8,539 8,396 88,,442266 88,,441133 8,413 8,451 88,,112277 88,,227744 88,,229911 7 Rate (percent of civilian labor force) ... 9.7 9.6 7.5 7.3 7.3 7.3 7.3 7.3 7.0 7.1 7.1 8 Not in labor force 62,067 62,665 62,839 62,153 62,428 62,571 63,313 62,949 63,106 62,754 62,611 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 89,566 90,196 94,461 96,910 97,120 97,421 97,473 97,707 97,977' 98,115 98,529 10 Manufacturing 18,781 18,434 19,412 19,526 19,467 19,426 19,398 19,351 19,362' 19,272' 19,332 11 Mining 1,128 952 974 977 982 982 974 969 965' 960' 958 1? Contract construction 3,905 3,948 4,345 4,553 4,641 4,658 4,638 4,660 4,688' 4,723' 4,755 13 Transportation and public utilities 5,082 4,954 5,171 5,269 5,278 5,301 5,295 5,302 5,282' 5,319' 5,315 14 20,457 20,881 22,134 22,963 23,013 23,140 23,193 23,226 23,305' 23,339' 23,448 15 Finance 5,341 5,468 5,682 5,835 5,858 5,888 5,906 5,932 5,959' 5,985' 6,002 16 Service 19,036 19,694 20,761 5,274 5,278 5,270 5,276 5,284 5,314 5,338 5,356 17 Government 15,837 15,870 15,987 16,143 16,158 16,213 16,213 16,341 16,343' 16,380' 16,433 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 • January 1986 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1984 1985 1984 1985 1984 1985 Q4 Q1 Q2 Q3r Q4 Q1 Q2 Q3 Q4 Qi Q2r Q3' Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 123.1 123.8 124.2 124.7 151.7 152.8 154.0 155.1 81.2 81.0 80.7 80.4 2 Mining 108.3 110.1 110.0 108.5 133.1 133.4 133.6 133.9 81.3 82.6 82.3 81.0 3 Utilities 111.1 114.2 113.6 111.0 133.0 133.7 134.5 135.4 83.5 85.5 84.4 82.0 4 Manufacturing 125.8 126.0 126.6 127.7 155.2 156.5 157.7 158.9 81.0 80.5 80.3 80.3 5 Primary processing ... 107.0 107.5 108.1 109.4 131.4 131.6 132.0 132.4 81.5 81.6 81.9 82.6 6 Advanced processing 137.0 137.1 137.9 138.7 169.6 171.4 173.2 174.9 80.8 80.0 79.6 79.3 7 Materials 114.5 115.4 114.5 114.0 140.7 141.6 142.5 143.4 81.4 81.5 80.4 79.5 8 Durable goods 123.7 123.6 121.4 120.7 154.4 155.9 157.4 158.9 80.1 79.3 77.1 75.9 9 Metal materials 80.4 80.6 80.2 79.4 117.8 117.3 117.3 117.3 68.2 68.7 68.4 67.7 10 Nondurable goods.... 110.9 110.9 111.2 113.0 136.8 137.3 137.8 138.2 81.0 80.7 80.7 81.7 11 Textile, paper, and chemical.. 110.7 111.6 111.0 113.4 136.2 136.7 137.0 137.4 81.3 81.7 81.0 82.5 12 Paper 126.2 126.3 121.8 123.9 135.3 136.1 136.2 136.3 93.3 92.8 89.4 90.9 13 Chemical 110.9 113.2 112.6 113.9 141.1 141.5 142.0 142.6 78.6 80.0 79.3 79.9 14 Energy materials 101.3 105.0 105.2 103.1 119.7 120.0 120.3 120.6 84.6 87.5 87.5 85.5 Previous cycle1 Latest cycle2 1984 1985 High Low High Low Oct. Feb. Mar. Apr. May Juner July' Aug/ Sept/ Oct. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 81.1 80.9 81.0 80.8 80.6 80.5 80.2 80.6 80.4 80.2 16 Mining 92.8 87.8 95.2 76.9 80.6 82.1 82.8 82.1 82.2 82.7 81.2 81.1 80.7 79.6 17 Utilities 95.6 82.9 88.5 78.0 82.4 86.7 85.0 84.6 84.5 84.1 81.9 81.4 82.7 82.4 18 Manufacturing 87.7 69.9 86.5 68.0 81.1 80.4 80.5 80.5 80.3 80.1 80.1 80.6 80.3 80.1 19 Primary processing ... 91.9 68.3 89.1 65.1 81.8 81.5 81.8 82.1 81.5 82.0 82.3 82.8 82.6 82.7 20 Advanced processing . 86.0 71.1 85.1 69.5 80.7 79.8 79.8 79.7 79.8 79.3 79.1 79.6 79.2 78.9 21 Materials 92.0 70.5 89.1 68.4 81.3 81.5 81.4 80.9 80.1 80.1 79.5 79.7 79.3 79.0 22 Durable goods 91.8 64.4 89.8 60.9 80.3 79.1 78.9 78.3 76.6 76.5 75.8 76.4 75.5 75.3 23 Metal materials 99.2 67.1 93.6 45.7 68.1 68.2 69.8 69.9 66.2 69.0 66.4 69.0 67.7 68.5 24 Nondurable goods .... 91.1 66.7 88.1 70.6 81.4 81.1 80.2 80.2 80.8 81.0 81.7 81.7 81.8 81.8 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 82.0 82.0 81.4 80.7 80.9 81.4 82.7 82.3 82.6 82.7 26 Paper 98.4 70.6 97.3 79.9 93.7 92.6 92.1 89.1 88.8 90.5 91.7 90.6 90.3 n.a. 27 Chemical 92.5 64.4 87.9 63.3 78.6 80.2 79.5 79.2 79.5 79.2 80.1 79.5 80.1 n.a. 28 Energy materials 94.6 86.9 94.0 82.2 83.5 87.4 88.4 87.6 87.5 87.3 85.8 85.2 85.4 84.6 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 11998844 1985 1984 Grouping por- avg. tion Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.P Oct.'' Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 121.8 122.7 123.4 123.3 123.6 123.7 124.0 124.1 124.1 124.3 124.1 125.0 124.9 124.9 2 Products 57.72 127.1 129.0 129.9 129.8 129.6 129.8 130.3 130.8 131.4 131.6 131.6 132.9 132.9 133.1 5 4 3 Fin C E a q o l u n p i s p r u o m m d e e u n r c t t g s o ods 4 2 1 4 5 9 . . . 7 5 2 7 2 5 1 1 1 4 1 2 0 8 7 . . . 2 5 8 1 1 1 4 1 2 5 8 9 . . . 0 5 9 1 1 1 4 3 1 5 0 9 . . . 7 5 6 1 1 1 4 3 1 4 0 9 . . . 9 6 7 1 1 1 4 3 1 5 0 8 . . . 7 4 8 1 1 1 4 1 3 5 9 0 . . . 3 1 4 1 1 1 4 1 3 5 9 0 . . . 4 8 8 1 1 1 1 4 3 9 6 1 . . . 5 9 3 1 1 1 4 3 2 7 1 0 . . . 1 7 0 1 1 1 4 2 3 6 0 1 . . . 6 4 6 1 1 1 4 2 3 7 0 1 . . . 3 1 8 1 1 1 4 2 3 9 1 3 . . . 0 4 2 1 1 1 4 3 2 9 3 1 . . . 1 4 5 1 1 1 4 2 3 8 1 3 . . . 9 8 4 6 Intermediate products 12.94 124.9 126.2 127.2 127.3 126.8 127.7 128.6 129.3 130.3 131.4 130.7 131.8 131.4 131.8 7 Materials 42.28 114.6 114.2 114.6 114.6 115.4 115.4 115.5 115.0 114.2 114.3 113.8 114.2 113.9 113.7 Consumer goods 8 Durable consumer goods 6.89 112.6 111.4 113.3 113.1 112.8 112.8 113.5 111.5 111.8 112.0 111.3 114.0 113.2 112.5 9 Automotive products 2.98 109.8 104.2 110.2 111.6 114.2 115.4 115.1 113.1 113.6 113.4 115.0 120.0 118.1 114.2 10 Autos and trucks 1.79 103.0 95.0 103.1 104.7 112.5 111.7 110.5 109.0 109.6 109.4 113.7 120.2 116.6 110.7 11 Autos, consumer 1.16 93.2 84.0 89.7 95.6 102.5 100.7 101.3 100.5 98.1 97.0 101.1 101.3 98.8 92.3 12 Trucks, consumer .63 121.2 115.4 127.8 121.5 131.1 132.0 127.5 124.7 130.9 132.3 137.2 155.4 149.7 1 1 1 5 4 3 Ho A A m p u e p t o l g i a p o n a o c r d t e s s s , a n A d / C a l a li n e d d T go V o ds 3 1 1 . . . 9 2 1 1 4 9 1 1 1 3 1 2 6 4 0 . . . 2 8 1 1 1 1 4 1 1 0 6 8 . . . 5 9 1 1 1 1 1 3 2 5 7 1 . . . 8 4 1 1 1 1 3 1 2 7 4 2 . . . 2 3 1 1 1 1 2 1 1 6 1 6 . . . 1 6 8 1 1 1 2 2 1 7 1 0 . . . 1 1 9 1 1 1 1 3 2 2 1 2 . . . 2 8 0 1 1 11 1 2 9 0 6 . . . 4 2 9 1 1 1 2 1 1 9 9 0 . . . 3 4 6 1 1 11 3 1 9 1 0 . . . 4 5 9 1 1 11 0 2 6 8 1 . . . 8 4 6 1 1 1 1 2 0 9 4 9 . . . 6 5 5 1 1 1 2 0 2 0 9 3 . . . 4 4 7 11 1 1 11 2 1 99 8 1 .. . . 55 1 1 16 Appliances and TV 1.19 137.5 142.2 138.4 138.2 126.6 127.2 131.8 127.1 128.7 131.7 123.2 125.5 125.6 17 Carpeting and furniture .96 117.6 118.1 118.1 114.1 112.7 117.9 117.7 118.1 116.9 119.6 122.2 119.5 120.0 18 Miscellaneous home goods 1.71 97.8 99.3 99.0 97.9 100.6 95.1 95.0 93.7 93.1 91.2 91.2 93.0 93.1 19 Nondurable consumer goods 18.63 120.2 121.0 121.8 122.1 121.1 121.4 122.1 122.5 123.1 123.5 123.4 124.1 124.6 125.2 20 Consumer staples 15.29 125.0 126.7 127.4 127.7 126.6 126.9 127.9 128.5 129.0 129.6 129.3 130.1 130.6 131.2 21 Consumer foods and tobacco 7.80 126.2 128.2 127.6 129.1 127.1 127.8 128.0 129.4 128.9 130.5 130.1 130.7 131.3 22 Nonfood staples 7.49 123.9 125.4 127.5 126.5 126.0 126.0 127.7 127.6 129.1 128.7 128.5 129.5 130.0 113300..66 23 Consumer chemical products .. 22..7755 137.4 141.3 143.3 142.7 142.9 143.2 145.1 145.1 147.3 145.4 145.4 148.1 148.4 24 Consumer paper products 11..8888 138.4 140.0 141.5 141.8 141.2 138.1 141.7 142.0 143.7 144.6 144.9 144.7 146.5 25 Consumer energy 2.86 101.4 100.5 103.0 100.7 99.9 101.5 101.9 101.5 102.1 102.2 101.5 101.8 101.4 26 Consumer fuel 1.44 89.3 88.8 89.9 87.7 85.1 84.9 87.0 90.0 90.2 88.8 89.2 91.1 87.1 27 Residential utilities 1.42 113.7 112.4 116.3 113.9 115.0 118.4 117.1 113.2 114.4 115.9 114.0 112.7 Equipment 28 Business and defense equipment 18.01 139.6 144.1 144.6 143.9 145.5 145.6 146.1 147.7 147.9 147.4 147.9 149.7 149.9 148.9 29 Business equipment 14.34 134.9 139.1 139.8 138.4 140.4 140.0 140.2 142.0 141.9 140.7 141.3 143.0 142.9 143.2 30 Construction, mining, and farm .. 2.08 66.6 69.5 68.2 68.5 68.8 68.3 67.1 68.4 67.4 67.7 68.6 67.2 66.1 31 Manufacturing 3.27 109.4 112.7 112.4 111.5 111.6 112.3 112.0 112.4 113.1 111.9 113.5 115.1 112.8 ''111133..00 32 Power 1.27 79.2 83.7 83.8 84.5 82.5 81.8 79.6 81.8 82.8 84.1 85.6 84.5 83.4 83.7 33 Commercial 5.22 209.2 216.4 217.1 214.5 217.4 217.0 218.9 221.8 222.8 219.6 219.5 222.8 223.4 224.0 34 Transit 2.49 98.6 98.5 102.9 100.9 106.7 104.9 104.5 106.0 102.9 103.4 103.3 105.9 108.2 107.7 35 Defense and space equipment 3.67 157.9 163.5 163.3 165.3 165.3 167.3 169.0 170.1 171.2 173.4 173.9 175.5 177.5 176.9 Intermediate products 36 Construction supplies 5.95 114.0 114.6 115.7 114.7 116.2 115.7 116.9 117.4 118.1 119.2 119.4 121.5 121.0 121.4 37 Business supplies 6.99 134.2 136.1 137.1 138.0 135.9 137.9 138.6 139.4 140.7 141.7 140.3 140.5 140.2 38 General business supplies 5.67 137.9 140.1 140.9 141.4 140.2 141.1 141.9 143.4 144.4 146.1 144.4 144.7 144.1 39 Commercial energy products 1.31 118.0 118.8 120.4 122.9 117.1 124.1 124.5 122.4 124.6 122.7 122.7 122.5 Materials 40 Durable goods materials 20.50 122.3 123.7 123.9 123.4 124.2 123.3 123.3 122.8 120.7 120.8 120.2 121.4 120.5 120.5 41 Durable consumer parts 4.92 98.0 98.9 99.1 99.8 102.6 102.2 102.1 101.8 100.1 98.7 98.3 99.4 98.2 96.4 42 Equipment parts 5.94 164.5 168.6 169.1 168.8 166.7 164.2 163.3 161.1 157.8 157.3 157.0 158.2 156.4 156.6 43 Durable materials n.e.c 9.64 108.6 108.7 108.7 107.4 109.1 109.0 109.6 110.0 108.2 109.6 108.6 110.0 109.7 110.5 44 Basic metal materials 4.64 86.4 84.8 85.2 84.0 83.5 84.1 85.1 86.6 82.0 85.0 82.5 84.6 83.4 45 Nondurable goods materials 10.09 111.2 111.2 110.7 110.7 110.9 111.4 110.3 110.4 111.3 111.8 112.8 112.9 113.2 113.4 46 Textile, paper, and chemical materials 7.53 111.6 111.5 110.5 110.1 111.5 112.1 111.3 110.5 110.9 111.7 113.5 113.1 113.6 113.9 47 Textile materials 1.52 101.5 98.5 93.7 91.2 90.3 93.5 93.0 94.1 95.0 97.3 100.2 101.8 101.3 48 Pulp and paper materials 1.55 126.5 126.2 125.1 127.2 127.5 126.0 125.4 121.3 120.9 123.3 125.0 123.5 123.1 49 Chemical materials 4.46 109.9 110.8 111.1 110.6 113.3 113.5 112.7 112.3 112.9 112.6 114.0 113.4 114.4 50 Miscellaneous nondurable materials 2.57 109.8 109.9 111.1 112.1 109.2 109.4 107.2 110.1 112.5 112.0 110.8 112.3 112.2 51 Energy materials 11.69 104.0 99.9 101.5 102.4 103.9 104.9 106.2 105.3 105.3 105.1 103.5 102.8 103.1 102.2 52 Primary energy 7.57 107.5 101.4 104.1 106.0 107.0 107.6 110.2 107.9 107.8 109.0 107.4 106.6 106.1 53 Converted fuel materials 4.12 97.6 97.1 96.8 96.0 98.2 100.0 99.0 100.6 100.6 98.1 96.2 95.8 97.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • January 1986 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 SIC pro- 1984 Grouping code por- avg. tion Oct. Nov. Dec. Jan Feb. Mar. Apr. May June July' Aug. Sept.P Oct Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 110.9 108.0 110.1 109.9 111.4 111.9 111.8 111.1 111.3 111.6 109.4 109.2 109.7 108.7 2 Mining 9.83 110.9 107.2 108.8 108.9 110.5 109.5 110.5 109.6 109.8 110.6 108.7 108.6 108.1 106.7 3 Utilities 5.96 110.9 109.4 112.1 111.6 113.0 115.8 113.9 113.6 113.7 113.4 110.7 110.2 112.2 112.0 4 Manufacturing 84.21 123.9 125.5 126.0 125.8 125.9 125.8 126.3 126.6 126.6 126.7 126.9 128.1 127.9 127.9 5 Nondurable 35.11 122.5 123.3 123.8 123.4 123.2 123.8 123.9 124.3 124.7 125.5 125.6 126.6 126.8 127.0 6 Durable 49.10 124.8 127.0 127.5 127.4 127.8 127.2 128.0 128.2 127.9 127.6 127.9 129.3 128.7 128.5 Mining 1 Metal 10 .50 77.0 75.3 75.5 69.3 70.5 74.5 83.6 81.2 78.3 77.5 60.9 73.1 71.8 8 Coal 11.12 1.60 127.6 102.0 113.1 116.2 118.5 121.5 131.9 128.5 128.7 134.0 128.0 127.7 126.3 123.2 9 Oil and gas extraction 13 7.07 109.1 110.1 109.8 109.8 110.7 108.2 106.8 106.5 106.9 106.9 106.9 105.8 105.5 104.5 10 Stone and earth minerals 14 .66 116.1 114.2 115.3 113.2 118.5 119.8 118.7 118.5 118.7 117.9 116.6 119.0 119.1 Nondurable manufactures 11 Foods 20 7.96 127.1 129.1 128.7 129.0 128.2 129.4 128.5 130.8 131.4 131.8 132.2 132.5 133.1 12 Tobacco products 21 .62 100.7 103.1 102.7 107.4 97.2 103.8 103.4 98.4 95.7 98.9 96.0 97.7 97.3 13 Textile mill products 22 2.29 103.7 100.3 97.1 94.7 93.6 98.5 99.4 99.0 100.0 103.3 104.1 106.2 104.8 14 Apparel products 23 2.79 102.8 100.5 101.1 102.5 102.6 103.1 101.3 100.2 100.3 99.2 100.6 100.4 101.9 15 Paper and products 26 3.15 127.3 127.6 127.7 128.8 128.3 126.4 126.9 125.1 124.1 127.1 129.0 128.1 129.3 16 Printing and publishing 27 4.54 147.9 149.5 153.5 151.2 150.4 150.3 152.6 154.2 155.4 156.7 154.3 156.2 155.6 155.6 17 Chemicals and products 28 8.05 121.7 123.5 124.3 123.4 125.7 125.8 126.5 125.8 126.7 126.4 126.4 128.0 128.2 18 Petroleum products 29 2.40 87.4 85.4 86.2 84.7 84.1 84.0 84.7 87.3 87.4 87.1 88.3 88.2 87.4 88.0 19 Rubber and plastic products... 30 2.80 143.2 146.0 146.6 146.6 145.9 145.7 144.1 144.9 144.3 145.5 145.6 148.0 149.1 20 Leather and products 31 .53 76.7 70.9 71.5 71.4 69.1 69.2 69.4 69.9 71.0 71.5 72.2 72.6 72.9 Durable manufactures 21 Lumber and products 24 2.30 109.1 110.2 109.5 109.4 109.2 109.1 109.5 110.9 112.2 113.5 113.0 114.8 22 Furniture and fixtures 25 1.27 136.7 139.9 139.8 138.0 136.5 139.0 139.2 141.0 142.0 141.9 145.3 144.3 144.5 23 Clay, glass, stone products.... 32 2.72 112.3 113.3 113.6 111.8 112.7 110.5 111.4 114.5 116.3 116.1 115.1 116.0 116.1 24 Primary metals 33 5.33 82.4 81.3 80.9 78.4 81.7 80.2 81.8 81.4 76.4 78.3 79.0 81.6 80.8 81.1 25 Iron and steel 331.2 3.49 73.5 71.0 71.1 68.9 71.0 68.5 73.2 71.9 65.4 67.6 68.7 71.6 70.6 26 Fabricated metal products .... 34 6.46 102.8 104.8 105.4 105.9 106.4 107.6 108.6 109.1 108.3 107.4 107.3 107.8 107.5 107.3 27 Nonelectrical machinery 35 9.54 142.0 146.6 145.8 144.6 145.0 144.9 146.5 148.9 149.1 145.6 147.5 149.2 148.7 148.9 28 Electrical machinery 36 7.15 172.4 178.4 178.9 180.2 176.0 173.2 173.1 168.9 169.3 169.5 165.7 165.7 164.5 165.8 29 Transportation equipment 37 9.13 113.6 113.4 116.0 117.8 120.4 120.5 120.8 120.7 120.9 121.8 123.7 126.8 126.3 123.8 30 Motor vehicles and parts.... 371 5.25 105.6 103.1 107.5 109.5 113.0 112.5 111.3 110.9 110.5 110.5 112.8 116.8 115.1 110.0 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 124.4 127.3 127.5 129.0 130.5 131.4 133.7 134.1 134.9 137.1 138.5 140.4 141.5 142.5 32 Instruments 38 2.66 136.9 138.6 138.6 138.9 138.7 138.7 139.0 138.5 139.9 140.7 141.1 141.8 140.5 139.9 33 Miscellaneous manufactures... 39 1.46 98.0 98.6 98.6 97.2 99.0 96.4 96.0 98.3 98.3 96.8 95.9 97.2 96.4 Utilities 34 Electric 4.17 116.8 116.8 118.7 117.5 118.9 121.9 119.5 119.1 119.5 119.4 117.5 116.7 119.5 119.1 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 333555 596.0 745.6 753.7 759.2 756.5 761.3 764.2 769.5 773.3 774.4 773.4 769.0 778.0 777.8 780.0 333666 472.7 593.7 600.4 605.2 601.8 606.5 608.7 613.3 616.2 616.2 613.9 610.1 618.1 618.8 620.1 333777 309.2 356.5 355.5 359.0 360.0 358.8 360.9 364.6 364.7 365.1 364.0 361.7 365.7 365.1 366.2 333888 163.5 237.6 245.4 246.7 242.3 247.6 247.8 248.7 251.4 251.1 249.9 248.4 252.4 253.7 253.9 333999 112233..33 115511..88 115533..22 115544..00 154.6 154.9 155.5 156.3 157.1 158.2 159.5 158.9 159.9 159.0 115599..99 • A major revision of the industrial production index and the capacity (July 1985), pp. 487-501. The revised indexes for January through June 1985 were utilization rates was released in July 1985. See "A Revision of the Index of 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 Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,000 1,605 1,682 1,599 1,635 1,624 1,741 1,704 1,778 1,712 1,694 1,784 1,804 ? 1-family 546 902 922 843 903 927 993 948 933 %1 %7 990 949 3 2-or-more-family 454 703 759 756 732 697 748 756 845 751 727 794 855 4 Started 1,062 1,703 1,749 1,630 1,849 1,647 1,889 1,933 1,681 1,701 1,663 1,740 1,589 5 1-family 663 1,067 1,084 1,112 1,060 1,135 1,168 1,155 1,039 1,031 1,062 1,059 970 6 2-or-more-family 400 635 665 518 789 512 721 778 642 670 601 681 619 7 Under construction, end of period1 720 1,003 1,051 1,073 1,071 1,066 1,063 1,088 1,089 1,075 1,073 1,086 1,066 8 1-family 400 524 556 579 572 580 578 583 582 575 578 583 568 9 2-or-more-family 320 479 494 495 499 485 485 505 507 500 495 503 498 10 Completed 1,005 1,390 1,652 1,635 1,719 1,794 1,685 1,641 1,627 1,789 1,725 1,703 1,769 11 1-family 631 924 1,025 985 1,107 1,082 1,043 1,074 1,020 1,097 1,048 1,015 1,095 12 2-or-more-family 374 466 627 650 612 712 642 567 607 692 677 688 674 13 Mobile homes shipped 240 296 295 282 273 276 283 287 287 270 286 290 278 Merchant builder activity in l-family units 14 Number sold 413 622 639 604 634 676 699 649 682 710' 739 669999 668811 15 Number for sale, end of period1 255 304 358 356 356 360 357 356 356 354 353 352 353 Price (thousands of dollars)2 Median 16 Units sold 69.3 75.5 80.0 78.3 82.5 82.0 84.2 85.6 80.1 86.3' 81.7 83.0 83.8 17 Units sold 83.8 89.9 97.5 96.3 98.3 %.2 100.9 104.7 98.1 99^ 99.1 98.6 103.6 EXISTING UNITS (1-family) 18 Number sold 1,991 2,719 2,868 2,870 3,000 2,880 3,030 3,040 3,040 3,060 3,140 3,500 3,450 Price of units sold (thousands of dollars)2 19 Median 67.7 69.8 72.3 72.1 73.8 73.5 74.2 74.5 75.0 7766..22 77.4 7766..99 7755..55 20 Average 80.4 82.5 85.9 85.9 87.7 87.2 88.6 89.7 90.1 91.5 93.5 93.0 91.1 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 236,935 268,730 312,989 310,062 341,038 334,254 333,723 341,861 339,943 343,837 344,833 343,899 350,434 ?? 186,091 218,016 257,802 254,547 283,688 276,452 274,575 281,988 276,420 278,939 280,321 279,838 286,422 73 80,609 121,309 145,058 134,2% 155,260 146,042 146,195 146,539 142,254 147,158 149,180 147,294 149,893 24 Nonresidential, total 105,482 96,707 112,744 120,251 128,428 130,410 128,380 135,449 134,166 131,781 131,141 132,544 136,529 Buildings 75 Industrial 17,346 12,863 13,746 14,440 15,195 15,815 14,585 17,283 16,443 15,170 15,428 15,203 16,072 76 Commercial 37,281 35,787 48,102 54,528 58,524 58,922 59,382 61,219 60,064 58,290 58,104 59,908 62,974 77 Other 10,507 11,660 12,298 12,150 11,889 12,054 11,245 12,663 12,929 12,786 12,657 13,000 13,313 28 Public utilities and other 40,348 36,397 38,598 39,133 42,820 43,619 43,168 44,284 44,730 45,535 44,952 44,433 44,170 79 Public 50,843 50,715 55,186 55,514 57,350 57,802 59,148 59,873 63,523 64,897 64,513 64,060 64,012 30 2,205 2,544 2,839 2,952 2,%9 3,036 3,078 3,166 3,349 3,426 3,182 3,022 2,866 31 Highway 13,293 14,143 16,295 16,888 17,759 18,416 19,176 19,920 22,314 21,093 19,726 20,319 19,910 37 Conservation and development 5,029 4,822 4,656 4,654 4,645 4,674 4,727 4,393 5,051 5,410 5,201 4,763 5,301 33 Other 30,316 29,206 31,396 31,020 31,977 31,676 32,167 32,394 32,809 34,%8 36,404 35,956 35,935 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 • January 1986 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 OOOcccttt... 1984 1985 1985 111999888555 11998844 11998855 (((111999666777 OOcctt.. OOcctt.. === 111000000)))111 Dec. Mar. June' Sept.' June July Aug. Sept. Oct. CONSUMER PRICES2 1 AU items 4.2 3.2 3.0 4.1 3.3 2.3 .2 .2 .2 .2 .3 325.5 2 Food 3.9 1.8 3.7 2.6 -.9 1.8 .1 .1 .0 .3 .2 309.8 3 Energy items .4 .1 -.7 -.8 9.6 -4.3 .2 -.3 -.6 -.2 -.8 427.1 4 All items less food and energy 4.9 4.2 3.5 5.5 3.4 3.5 .3 .3 .3 .2 .5 318.9 .1 Commodities 3.7 2.0 .9 6.6 -1.4 .8 -.2 -.2 .1 .3 .4 262.0 6 Services 5.7 5.5 5.0 5.0 6.4 5.0 .5 .5 .5 .2 .6 382.5 PRODUCER PRICES 7 Finished goods 1.4 1.1 1.1 .5 1.7 -2.4 -.2 .3 -.3 -.6 .9 294.8 8 Consumer foods 2.8 -.9 3.3 -3.0 -8.1 -1.6 .<Y 1.2' -.7 -.9 1.4 268.7 9 Consumer energy -5.7 -3.7 5.6 -21.3 27.3 -12.8 -2.8' -1.7' -1.6 -.1 -.2 716.1 10 Other consumer goods 2.2 3.0 -.2 6.5 1.4 -.2 .3' .4 .0 -.5 .8 254.9 11 Capital equipment 2.1 2.6 -1.1 6.2 1.6 -1.2 .1' .1' .2 -.6 1.0 303.7 12 Intermediate materials3 1.8 -.5 1.2 -2.5 1.1 -1.2 -.4 -.3 -.1 .1 .0 324.3 13 Excluding energy 2.6 .0 1.5 -1.0 1.2 -1.2 .2 -.1 -.1 -.1 .0 304.6 Crude materials 14 Foods -3.5 -8.3 10.6 -24.9 -20.4 -19.9 -.2' -UK -3.8 -.7 6.3 224.5 15 Energy 1.0 -5.6 -7.6 -13.1 4.4 -4.7 -.8' -.7' -.9 .4 -.3 743.4 16 Other -.6 -4.2 -10.7 -13.3 3.1 -4.2 .2' .8' -1.2 -.6 .5 247.2 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 Q3 Q4 Ql Q2 Q3r GROSS NATIONAL PRODUCT 1 3,069.3 3,304.8 3,662.8 3,694.6 3,758.7 3,810.6 3,853.1 3,915.9 By source 2 Personal consumption expenditures 1,984.9 2,155.9 2,341.8 2,361.4 2,396.5 2,446.5 2,493.0 22,,553399..00 3 Durable goods 245.1 279.8 318.8 317.2 326.3 334.8 339.2 356.8 4 Nondurable goods 757.5 801.7 856.9 861.4 866.5 877.3 891.9 896.8 5 Services 982.2 1,074.4 1,166.1 1,182.8 1,203.8 1,234.4 1,261.9 1,285.3 6 Gross private domestic investment 414.9 471.6 637.8 662.8 637.8 646.8 643.2 631.5 7 441.0 485.1 579.6 591.0 601.1 606.1 625.3 631.8 8 349.6 352.9 425.7 435.7 447.7 450.9 467.3 468.6 9 142.1 129.7 150.4 151.4 157.9 162.9 168.3 168.8 10 Producers' durable equipment 207.5 223.2 275.3 284.2 289.7 288.0 299.0 299.8 11 Residential structures 91.4 132.2 153.9 155.3 153.5 155.2 158.0 163.2 12 Nonfarm 86.6 127.6 148.8 150.1 148.3 150.0 152.4 157.4 n Change in business inventories -26.1 -13.5 58.2 71.8 36.6 40.7 17.9 -.3 14 Nonfarm -24.0 -3.1 49.6 63.7 27.2 34.1 11.4 -.9 is Net exports of goods and services 19.0 -8.3 -64.2 -90.6 -56.0 -74.5 -94.0 -104.0 16 348.4 336.2 364.3 368.6 367.2 360.7 347.7 346.8 17 Imports 329.4 344.4 428.5 459.3 423.2 435.2 441.6 450.8 18 Government purchases of goods and services 650.5 685.5 747.4 761.0 780.5 791.9 810.9 849.5 19 258.9 269.7 295.4 302.0 315.7 319.9 324.2 350.6 20 State and local 391.5 415.8 452.0 458.9 464.8 472.0 486.7 498.8 By major type of product ?1 3,095.4 3,318.3 3,604.6 33,,662222..88 33,,772222..11 33,,777700..00 33,,883355..22 33,,991166..22 ?? 1,276.7 1,355.7 1,542.9 1,549.1 1,579.8 1,583.8 1,579.6 1,595.0 499.9 555.3 655.6 654.7 687.7 677.1 669.6 670.7 74 Nondurable 776.9 800.4 887.3 894.4 892.1 906.7 910.0 921.6 75 1,510.8 1,639.3 1,763.3 1,783.3 1,813.7 1,857.2 1,888.8 1,927.6 26 Structures 281.7 309.8 356.5 362.1 365.2 369.6 384.8 396.0 77 Change in business inventories -26.1 -13.5 58.2 71.8 36.6 40.7 17.9 -.3 78 Durable goods -18.0 -2.1 30.4 41.7 26.7 29.0 3.7 -10.7 29 Nondurable goods -8.1 -11.3 27.8 30.1 9.9 11.7 14.2 10.3 30 MEMO: Total GNP in 1972 dollars 1,480.0 1,534.7 1,639.3 1,645.2 1,662.4 1,663.5 1,671.3 1,688.9 NATIONAL INCOME 31 2,446.8 2,646.7 2,959.9 2,984.9 3,036.3 3,076.5 3,106.5 3,147.2 37 Compensation of employees 1,864.2 1,984.9 2,173.2 2,191.9 2,228.1 2,272.7 2,305.9 2,335.6 33 Wages and salaries 1,568.7 1,658.8 1,804.1 1,819.1 1,848.2 1,882.8 1,909.5 1,933.6 34 Government and government enterprises 306.6 328.2 349.8 352.0 357.2 365.5 370.7 376.3 35 Other 1,262.2 1,331.1 1,454.2 1,467.1 1,490.9 1,517.3 1,538.9 1,557.2 36 Supplement to wages and salaries 295.5 326.2 369.0 372.8 380.0 389.8 396.3 402.1 37 Employer contributions for social insurance 140.0 153.1 173.5 174.7 177.5 183.6 186.1 188.3 38 Other labor income 155.5 173.1 195.5 198.1 202.5 206.3 210.2 213.7 39 Proprietors' income1 111.1 121.7 154.4 153.7 159.1 159.8 160.7 153.4 40 Business and professional1 89.2 107.9 126.2 126.4 129.7 134.0 137.3 141.9 41 Farm1 21.8 13.8 28.2 27.3 29.4 25.7 23.4 11.6 42 Rental income of persons2 51.5 58.3 62.5 63.0 64.1 64.8 66.7 68.3 43 Corporate profits1 159.1 225.2 285.7 282.8 291.6 292.3 298.5 321.4 44 Profits before tax3 165.5 203.2 235.7 224.8 228.7 222.3 221.0 232.8 45 Inventory valuation adjustment -9.5 -11.2 -5.7 -.2 -1.6 ..99 2.5 7.2 46 Capital consumption adjustment 3.1 33.2 55.7 58.3 64.5 6699..11 75.0 81.4 47 Net interest 260.9 256.6 284.1 293.5 293.4 287.0 274.7 268.5 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 • January 1986 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1985 1982 1983 1984 Q3 Q4 Q1 Q2 PERSONAL INCOME AND SAVING 1 Total personal income 2.584.6 2,744.2 3,012.1 3,047.3 3,096.2 3,143.8 3,174.7 2 Wage and salary disbursements 1.568.7 1,659.2 1.804.0 1,819.5 1,847.6 1.882.7 1.910.6 3 Commodity-producing industries 509.3 519.3 569.3 573.3 580.9 590.9 594.2 4 Manufacturing 382.9 395.2 433.9 436.4 442.4 447.9 447.9 5 Distributive industries 378.6 398.6 432.0 436.4 443.1 449.0 455.7 6 Service industries 374.3 413.1 452.9 457.3 466.9 477.4 489.0 7 Government and government enterprises 306.6 328.2 349.8 352.4 356.7 365.4 371.7 8 9 P O r t o h p e r r ie la to b r o s r ' i i n n c c o o m m e e 1 115151..51 1 1 7 2 3 1 . . 1 7 1 1 9 5 5 4 . . 5 4 1 1 9 5 8 3 . . 1 7 2 1 0 5 2 9 . . 5 1 2 1 0 5 6 9 . . 3 8 2 1 1 6 0 0 . .7 2 10 Business and professional1 89.2 107.9 126.2 126.4 129.7 134.0 137.3 11 Farm1 21.8 13.8 28.2 27.3 29.4 25.7 23.4 12 Rental income of persons2 51.5 58.3 62.5 63.0 64.1 64.8 66.7 13 Dividends 66.5 70.3 77.7 78.5 80.2 81.4 82.5 14 Personal interest income 366.6 376.3 433.7 449.3 456.1 456.0 453.0 15 Transfer payments 376.1 405.0 416.7 418.6 421.8 439.2 439.5 16 Old-age survivors, disability, and health insurance benefits.. 204.5 221.6 237.3 238.2 243.5 249.6 249.9 17 LESS: Personal contributions for social insurance 111.4 119.6 132.5 133.4 135.2 146.4 148.4 18 EQUALS: Personal income 2,584.6 2,744.2 3.012.1 3.047.3 3,096.2 3.143.8 3.174.7 19 LESS: Personal tax and nontax payments 404.1 404.2 435.3 440.9 451.7 489.0 448.2 20 EQUALS: Disposable personal income 2,180.5 2,340.1 2,576.8 2.606.4 2,644.5 2,654.8 2,726.5 21 LESS: Personal outlays 2,044.5 2,222.0 2,420.7 2,442.3 2,481.5 2,536.2 2,587.1 22 EQUALS: Personal saving 136.0 118.1 156.1 164.1 163.0 118.6 139.4 MEMO Per capita (1972 dollars) 23 Gross national product 6,369.7 6,543.4 6,926.1 6,943.2 6,998.3 6,989.0 7,007.9 24 Personal consumption expenditures 4,145.9 4,302.8 4,488.7 4,498.4 4,527.1 4,575.7 4,621.2 25 Disposable personal income 4,555.0 4,670.0 4,939.0 4,965.0 4,996.0 4,965.0 5,054.0 26 Saving rate (percent) 6.2 5.0 6.1 6.3 6.2 4.5 5.1 GROSS SAVING 27 Gross saving. 408.8 437.2 551.8 556.4 556.0 550.7 532.6 28 Gross private saving 524.0 571.7 674.8 689.4 698.2 662.1 696.3 29 Personal saving 136.0 118.1 156.1 164.1 163.0 118.6 139.4 30 Undistributed corporate profits1 29.2 76.5 115.4 118.4 120.8 122.5 12S.3 31 Corporate inventory valuation adjustment -9.5 -11.2 -5.7 -.2 -1.6 .9 2.5 Capital consumption allowances 32 Corporate 221.8 231.2 246.2 248.1 252.8 257.4 261.6 33 Noncorporate 137.1 145.9 157.0 158.8 161.5 163.7 166.1 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -115.3 -134.5 -122.9 -133.0 -142.2 -111.4 -163.8 36 Federal -148.2 -178.6 -175.8 -180.6 -197.8 -165.1 -214.1 37 State and local 32.9 44.1 52.9 47.6 55.6 53.7 50.3 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 39 Gross investment 408.3 437.7 544.4 543.4 546.1 542.6 518.9 40 Gross private domestic 414.9 471.6 637.8 662.8 637.8 646.8 643.2 41 Net foreign -6.6 -33.9 -93.4 -119.4 -91.6 -104.2 -124.3 42 Statistical discrepancy. -7.4 -13.0 -9.9 -13.7 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1984 1985 Item credits or debits Q2 Q3 Q4 Q1 Q2P 1 Balance on current account -8,051 -40,790 -101,532 -24,493 -32,500 -25,477 -30,325 -31,811 2 Not seasonally adjusted.. -24,654 -35,724 -22,759 -29,416 -32,066 3 Merchandise trade balance2 ... -36,444 -62,012 -108,281 -25,649 -32,507 -24,557 -29,532 -33,001 4 Merchandise exports 211,198 200,745 220,316 54,677 55,530 56,355 55,707 53,245 5 Merchandise imports -247,642 -262,757 -328,597 -80,326 -88,037 -80,912 -85,239 -86,246 6 Military transactions, net -318 -163 -1,765 -593 -250 -575 -212 -566 7 Investment income, net3 29,493 25,401 19,109 3,618 3,256 4,003 2,537 5,582 8 Other service transactions, net. 7,353 4,837 819 363 -123 -253 54 -474 9 Remittances, pensions, and other transfers -2,633 -2,566 -2,891 -710 -669 -782 -934 -841 10 U.S. government grants (excluding military) -5,501 -6,287 -8,522 -1,522 -2,207 -3,313 -2,238 -2,511 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -6,131 -5,006 -5,516 -1,353 -1,369 -734 -850 -849 12 Change in U.S. official reserve assets (increase, -) -4,965 0 -1,196 0 -3,130 0 -565 0 -799 0 -1,109 0 -233 0 -356 0 13 Gold 14 Special drawing rights (SDRs) -1,371 -66 -979 -288 -271 -194 -264 -180 15 Reserve position in International Monetary Fund -2,552 -4,434 -995 -321 -331 -143 281 72 16 Foreign currencies -1,041 3,304 -1,156 44 -197 -772 -250 -248 17 Change in U.S. private assets abroad (increase, -)3. -108,121 -48,842 -11,800 -17,070 20,532 -13,003 718 -1,657 18 Bank-reported claims -111,070 -29,928 -8,504 -20,186 17,725 -4,933 135 4,350 19 Nonbank-reported claims 6,626 -6,513 6,266 1,908 2,099 970 1,201 n.a. 20 U.S. purchase of foreign securities, net -8,102 -7,007 -5,059 -756 -1,313 -3,663 -2,494 -1,862 21 U.S. direct investments abroad, net3 4,425 -5,394 -4,503 1,964 2,021 -5,377 1,876 -4,145 22 Change in foreign official assets in the United States (increase, +) 3,672 5,795 3,424 -224 -686 7,119 -11,204 8,154 23 U.S. Treasury securities 5,779 6,972 4,690 -274 -575 5,814 -7,219 8,521 24 Other U.S. government obligations -694 -476 167 146 85 -67 -307 136 25 Other U.S. government liabilities4 684 552 453 555 -139 -197 -462 503 26 Other U.S. liabilities reported by U.S. banks -1,747 545 663 328 430 2,052 -3,099 -185 27 Other foreign official assets5 -350 -1,798 -2,549 -979 -487 -483 -117 -821 28 Change in foreign private assets in the United States (increase, +)3 90,775 78,527 93,895 41,816 3,825 26,191 24,915 17,636 29 U.S. bank-reported liabilities 65,922 49,341 31,674 20,970 -5,125 4,481 13,345 326 30 U.S. nonbank-reported liabilities -2,383 -118 4,284 4,566 -2,939 -1,863 -2,655 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 7,052 8,721 22,440 6,485 5,058 9,501 2,633 5,291 32 Foreign purchases of other U.S. securities, net 6,392 8,636 12,983 506 1,603 9,380 9,510 7,117 33 Foreign direct investments in the United States, net3 13,792 11,947 22,514 9,289 5,228 4,692 2,082 4,902 0 0 0 0 0 0 0 0 34 Allocation of SDRs 35 Discrepancy 32,821 11,513 24,660 1,889 10,997 7,013 16,979 8,883 36 Owing to seasonal adjustments -606 -3,170 4,200 -305 -578 37 Statistical discrepancy in recorded data before seasonal adjustment 32,821 11,513 24,660 2,495 14,167 2,813 17,284 9,461 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -4,965 -1,196 -3,131 -566 -799 -1,110 -233 -356 39 Foreign official assets in the United States (increase, +) 2,988 5,243 2,971 -779 -547 7,316 -10,742 7,651 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 -2,097 -453 812 -2,021 -1,862 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 585 194 190 44 45 61 10 15 1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and 4. Primarily associated with military sales contracts and other transactions 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 • January 1986 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1985 IItteemm 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 212,193 200,486 19,142 18,446 17,779 17,414 17,438 17,411 17,423 17,732 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 243,952 258,048 25,933 28,129 28,295 28,685 29,425 26,630 26,083 31,764 3 Trade balance -31,759 -57,562 -6,791 -9,683 -10,516 -11,271 -11,987 -9,219 -8,660 -14,032 NOTE. The data through 1981 in this table are reported by the Bureau of Census the export side, the largest adjustments are: (1) the addition of exports to Canada data of a free-alongside-ship (f.a.s.) value basis—that is, value at the port of not covered in Census statistics, and (2) the exclusion of military sales (which are export. Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in combined with other military transactions and reported separately in the "service the Census basis trade data; this adjustment has been made for all data shown in account" in table 3.10, line 6). On the import side, additions are made for gold, the table. Beginning with 1982 data, the value of imports are on a customs ship purchases, imports of electricity from Canada, and other transactions; valuation basis. military payments are excluded and shown separately as indicated above. The Census basis data differ from merchandise trade data shown in table 3.10, SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade" U.S. International Transactions Summary, for reasons of coverage and timing. On (Department of Commerce, Bureau of the Census). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1985 TTyyppee 11998822 11998833 11998844 Apr. May June July Aug. Sept. Oct. 1 Total 33,958 33,747 34,934 35,493 35,782 36,088 37,071 37,154 38,295 41,657 2 Gold stock, including Exchange Stabilization Fund1 11,148 11,121 11,096 11,091 11,091 11,091 11,090 11,090 11,090 11,090 3 Special drawing rights2 3 5,250 5,025 5,641 5,971 6,163 6,1% 6,510 6,692 6,847 6,926 4 Reserve position in International Monetary Fund2 7,348 11,312 11,541 11,382 11,370 11,394 11,513 11,478 11,686 11,843 5 Foreign currencies4 10,212 6,289 6,656 7,049 7,158 7,408 7,958 7,894 8,672 11,798 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 1985 AAsssseettss 11998822 11998833 11998844 Apr. May June July Aug. Sept. Oct. 1 Deposits 328 190 253 348 204 310 274 223 535 267 Assets held in custody 2 U.S. Treasury securities1 112,544 117,670 118,267 115,184 116,989 121,755 124,400 123,321 120,978 118,000 3 Earmarked gold2 14,716 14,414 14,265 14,264 14,265 14,262 14,251 14,251 14,245 14,242 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 1985 AAsssseett aaccccoouunntt 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept.? All foreign countries 1 Total, all currencies 469,712 477,090 453,656' 463,379' 461,636' 459,416' 458,24y 464,00C 457,553 456,405 ? Claims on United States 91,805 115,542 113,449' 119,943' 121,823' 121,14C 121,284' 119,393' 122,932 119,403 Parent bank 61,666 82,026 78,165' 86,825' 86,907' 85,609' 85,272' 84,045' 86,779 85,447 4 Other banks in United States2 13,664 13,092 14,199 14,101 14,461 14,739 14,058 13,092 5 Nonbanks2 21,620 20,026 20,717 21,430 21,551 20,609 22,095 20,864 6 Claims on foreigners 358,493 342,689 320,106' 323,008' 319,749' 317,589' 316,081' 322,749' 313,073 314,754 7 Other branches of parent bank 91,168 96,004 95,128' 93,397' 91,302' 90,82c 89,833' 91,172' 89,640 87,658 8 Banks 133,752 117,668 100,397' 105,514' 104,35C 102,312' 101,50C 104,813' 99,032 102,172 9 Public borrowers 24,131 24,517 23,343' 22,648' 23,195' 23,128' 23,051' 23,124' 22,863 23,277 10 Nonbank foreigners 109,442 107,785 101,238' 101,449' 100,902' 101,323' 101,697' 103,64C 101,538 101,647 11 Other assets 19,414 18,859 20,101' 20,428' 20,064' 20,687' 20,878' 21,858' 21,548 22,248 12 Total payable in U.S. dollars 361,982 371,508 350,636' 355,81c 352,428' 350,609' 350,13c 346,109' 341,871 335,021 n Claims on United States 90,085 113,436 111,482' 117,572' 119,228' 118,687' 118,726' 116,422' 120,184 116,512 14 Parent bank 61,010 80,909 77,285' 85,743' 85,775' 84.64C 84.28C 82,895' 85,850 84,236 IS Other banks in United States2 13,500 12,786 13,840 13,705 14,019 14,115 13,451 12,536 16 Nonbanks2 20,697 19,043 19,613 20,342 20,421 19,412 20,883 19,740 17 Claims on foreigners 259,871 247,406 228,544' 228,169' 223,383' 221,989' 221,478' 219,824' 212,023 208,696 18 Other branches of parent bank 73,537 78,431 78,69C 77,636' 75,057' 75,067' 74,593' 74,471' 72,437 69,226 19 Banks 106,447 93,332 76,940' 79,014' 76,926' 75,70c 75,337' 75,339' 70,973 70,922 70 Public borrowers 18,413 17,890 17,626' 17,155' 17.31C 17,331' 17,22C 17,033' 17,037 17,274 21 Nonbank foreigners 61,474 60,977 55,288' 54,364' 54,084' 53,885' 54,328' 52,981' 51,576 51,274 22 Other assets 12,026 10,666 10,61c 10,069' 9,817' 9,933' 9,932' 9,863' 9,664 9,813 United Kingdom 23 Total, all currencies 161,067 158,732 144,385 150,705 148,711 148,285 149,599 151,455 151,117 150,276 74 Claims on United States 27,354 34,433 27,731 29,675 29,930 30,314 31,322 31,140 35,300 32,630 ?5 Parent bank 23,017 29,111 21,918 23,250 23,236 23,554 23,930 24,368 28,200 25,813 76 Other banks in United States2 1,429 1,511 1,649 1,613 1,691 1,525 1,474 1,329 77 Nonbanks2 4,384 4,914 5,045 5,147 5,701 5,247 5,626 5,488 78 Claims on foreigners 127,734 119,280 111,772 115,886 113,689 112,829 113,192 114,827 110,475 112,519 79 Other branches of parent bank 37,000 36,565 37,897 35,857 34,036 33,948 34,188 33,539 32,616 32,403 30 Banks 50,767 43,352 37,443 41,010 41,242 39,905 39,850 40,546 37,796 40,509 31 Public borrowers 6,240 5,898 5,334 4,949 4,967 4,932 4,973 5,056 5,054 5,112 32 Nonbank foreigners 33,727 33,465 31,098 34,070 33,444 34,044 34,181 35,686 35,009 34,495 33 Other assets 5,979 5,019 4,882 5,144 5,092 5,142 5,085 5,488 5,342 5,127 34 Total payable in U.S. dollars 123,740 126,012 112,809 114,122 111,498 111,305 112,686 110,451 110,972 108,731 3S Claims on United States 26,761 33,756 26,924 28,833 28,998 29,389 30,368 30,087 34,251 31,520 36 Parent bank 22,756 28,756 21,551 22,910 22,906 23,261 23,625 23,995 27,897 25,342 3 1 7 8 Other banks in United States2 1 A m\e /u\n 4 1 , , 0 3 1 6 0 3 4 1 , , 4 4 6 6 1 2 4 1 , , 5 5 2 7 0 2 4 1 , , 6 4 4 8 0 8 5 1 , , 1 6 3 0 9 4 4 1 , , 6 4 7 1 7 5 4 1 , , 9 3 9 5 9 5 4 1 , , 9 2 3 4 1 7 39 Claims on foreigners 92,228 88,917 82,889 82,441 79,509 79,029 79,464 77,446 73,769 74,286 40 Other branches of parent bank 31,648 31,838 33,551 31,331 29,056 29,230 29,364 28,623 26,993 26,581 41 Banks 36,717 32,188 26,805 28,184 27,803 27,184 27,317 26,349 24,382 25,458 4? Public borrowers 4,329 4,194 4,030 3,534 3,503 3,500 3,587 3,538 3,599 3,633 43 Nonbank foreigners 19,534 20,697 18,503 19,392 19,147 19,115 19,196 18,936 18,795 18,614 44 Other assets 4,751 3,339 2,9% 2,848 2,991 2,887 2,854 2,918 2,952 2,925 Bahamas and Caymans 45 Total, all currencies 145,156 152,083 146,811 147,041 145,096 144,033 143,549 140,785 138,510 135,214 46 Claims on United States 59,403 75,309 77,296 78,886 79,150 78,849 78,049 75,275 74,448 72,611 47 Parent bank 34,653 48,720 49,449 53,937 52,996 51,886 51,171 48,669 47,815 47,299 48 Other banks in United States2 1 _. 11,544 10,761 11,647 11,723 11,999 12,381 11,725 10,977 49 Nonbanks2 16,303 14,188 14,507 15,240 14,879 14,225 14,908 14,335 50 Claims on foreigners 81,450 72,868 65,598 64,339 62,164 61,604 61,959 62,209 60,964 59,309 51 Other branches of parent bank 18,720 20,626 17,661 15,685 14,716 15,271 15,645 15,669 16,479 15,428 5? Banks 42,699 36,842 30,246 31,481 29,887 28,942 28,501 29,240 27,601 26,996 53 Public borrowers 6,413 6,093 6,089 6,349 6,683 6,604 6,642 6,505 6,432 6,486 54 Nonbank foreigners 13,618 12,592 11,602 10,824 10,878 10,787 11,171 10,795 10,452 10,399 55 Other assets 4,303 3,906 3,917 3,816 3,782 3,580 3,541 3,301 3,098 3,294 56 Total payable in U.S. dollars 139,605 145,641 141,562 141,534 139,926 138,724 138,581 135,472 133,521 129,830 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 • January 1986 3.14 Continued 1985 Mar. Apr. May June July Aug. Sept.? All foreign countries 57 Total, all currencies 469,712 477,090 453,656' 463,379' 461,636' 459,416' 458,243' 464,00C 457,553 456,405 58 Negotiable CDs3 n.a. n.a. 37,725 40,889 38,940 37,188 37,952 37,683 37,885 39,676 59 To United States 179,015 188,070 147,583' 146,041' 145,511' 145,61C 147,424' 146,389' 144,408 143,452 60 Parent bank 75,621 81,261 78,739' 76,355' 76,385' 78,419' 79,846' 80,656' 77,484 78,415 61 Other banks in United States 33,405 29,453 18,409 17,777 18,834 18,782 19,430 17,032 16,087 17,206 62 Nonbanks 69,989 77,356 50,435 51,909 50,292 48,409 48,148 48,701 50,837 47,831 63 To foreigners 270,853 269,685 247,907' 254,846' 255,632' 254,535' 251,572' 256,769' 252,717 250,144 64 Other branches of parent bank 90,191 90,615 93,909' 94,857' 92,502' 91,967' 91,11C 92,984' 90,483 87,752 65 Banks 96,860 92,889 78,203 82,670 83,614 81,537 80,496 82,777 80,940 82,528 66 Official institutions 19,614 18,896 20,281 20,831 21,854 21,827 21,703 20,937 21,234 21,015 67 Nonbank foreigners 64,188 68,845 55,514' 56,488' 57,662' 59,204' 58,263' 60,071' 60,060 58,849 68 Other liabilities 19,844 19,335 20,441' 21,603' 21,553' 22,083' 21,295' 23,159' 22,543 23,133 69 Total payable in U.S. dollars 379,270 388,291 367,145' 370,281' 366,525' 364,59c 365,812' 361,403' 357,182 350,122 70 Negotiable CDs3 n.a. n.a. 35,227 38,199 35,958 34,216 34,637 33,716 34,030 35,695 71 To United States 175,528 184,305 143,571' 141,702' 140,855' 140,958' 142,499' 141,145' 138,786 136,813 72 Parent bank 73,295 79,035 75,254' 73,932' 73,786' 75,795' 77,04C 77,543' 74,176 74,562 73 Other banks in United States 33,040 28,936 17,935 17,228 18,270 18,209 18,869 16,446 15,466 16,281 74 Nonbanks 69,193 76,334 49,382 50,542 48,799 46,954 46,590 47,156' 49,144 45,970 75 To foreigners 192,510 194,139 178,26c 180,137' 179,488' 179,567' 179,353' 177,144' 174,645 167,617 76 Other branches of parent bank 72,921 73,522 77,770 79,182' 76,65C 76,107' 75.93C 76,386' 73,770 69,510 77 Banks 57,463 57,022 45,123 44,863 45,167 44,413 44,694 43,691 42,859 41,312 78 Official institutions 15,055 13,855 15,773 16,049 17,178 17,407 17,278 15,935 16,238 16,221 79 Nonbank foreigners 47,071 51,260 39,594 40,033' 40,493' 41,64C 41,451' 41,132' 41,778 40,574 80 Other liabilities 11,232 9,847 10,087 10,243' 10,224' 9,849' 9,323' 9,398' 9,721 9,997 United Kingdom 81 Total, all currencies 161,067 158,732 144,385 150,705 148,711 148,285 149,599 151,455 151,117 150,276 82 Negotiable CDs3 n.a. n.a. 34,413 37,350 35,326 33,661 34,437 34,094 34,156 35,819 83 To United States 53,954 55,799 25,250 23,735 23,986 24,811 25,480 24,167 25,158 25,747 84 Parent bank 13,091 14,021 14,651 14,507 14,033 14,278 14,910 13,434 14,336 14,592 85 Other banks in United States 12,205 11,328 3,125 2,673 2,665 2,735 3,571 2,853 2,839 3,726 86 Nonbanks 28,658 30,450 7,474 6,555 7,288 7,798 6,999 7,880 7,983 7,429 87 To foreigners 99,567 95,847 77,424 80,966 80,913 81,033 81,004 83,480 82,317 79,471 88 Other branches of parent bank 18,361 19,038 21,631 23,699 21,887 21,784 22,565 23,647 22,348 20,233 89 Banks 44,020 41,624 30,436 32,003 32,259 31,573 30,852 32,389 31,518 32,041 90 Official institutions 11,504 10,151 10,154 10,305 11,590 11,260 11,240 10,180 10,823 10,824 91 Nonbank foreigners 25,682 25,034 15,203 14,959 15,177 16,416 16,347 17,264 17,628 16,373 92 Other liabilities 7,546 7,086 7,298 8,654 8,486 8,780 8,678 9,714 9,486 9,239 93 Total payable in U.S. dollars 130,261 131,167 117,497 117,984 116,128 115,742 117,333 114,123 115,064 112,816 94 Negotiable CDs3 n.a. n.a. 33,070 35,721 33,763 32,140 32,721 31,743 31,911 33,380 95 To United States 53,029 54,691 24,105 22,232 22,281 23,206 23,729 22,254 23,119 23,529 % Parent bank 12,814 13,839 14,339 14,127 13,569 13,869 14,472 12,777 13,773 13,995 97 Other banks in United States 12,026 11,044 2,980 2,503 2,500 2,550 3,387 2,687 2,628 3,509 98 Nonbanks 28,189 29,808 6,786 5,602 6,212 6,787 5,870 6,790 6,718 6,025 99 To foreigners 73,477 73,279 56,923 56,574 56,473 56,885 57,504 56,783 56,208 52,045 100 Other branches of parent bank 14,300 15,403 18,294 20,127 18,451 18,375 19,053 19,640 18,241 15,999 101 Banks 28,810 29,320 18,356 17,191 17,497 17,417 17,175 17,249 16,975 15,787 102 Official institutions 9,668 8,279 8,871 8,734 9,989 9,687 9,648 8,430 9,005 9,055 103 Nonbank foreigners 20,699 20,277 11,402 10,522 10,536 11,406 11,628 11,464 11,987 11,204 104 Other liabilities 3,755 3,197 3,399 3,457 3,611 3,511 3,379 3,343 3,826 3,862 Bahamas and Caymans 105 Total, all currencies 145,156 152,083 146,811 147,041 145,096 144,033 143,549 140,785 138,510 135,214 106 Negotiable CDs3 n.a. n.a. 615 779 634 436 344 320 356 686 107 To United States 104,425 111,299 102,955 103,046 100,489 99,379 99,856 98,682 95,793 94,071 108 Parent bank 47,081 50,980 47,162 45,391 43,749 45,557 45,740 47,147 43,384 44,431 109 Other banks in United States 18,466 16,057 13,938 13,959 15,112 14,545 14,748 12,979 12,153 12,081 110 Nonbanks 38,878 44,262 41,855 43,696 41,628 39,277 39,368 38,566 40,256 37,559 111 To foreigners 38,274 38,445 40,320 40,367 41,102 41,437 40,621 39,081 39,679 37,667 112 Other branches of parent bank 15,796 14,936 16,782 16,744 17,179 17,759 16,615 16,645 17,638 16,023 113 Banks 10,166 11,876 12,405 12,562 13,469 12,879 13,600 12,329 11,452 11,423 114 Official institutions 1,967 1,919 2,054 1,884 1,598 2,194 1,866 1,941 1,687 1,760 115 Nonbank foreigners 10,345 11,274 9,079 9,177 8,856 8,605 8,540 8,166 8,902 8,461 116 Other liabilities 2,457 2,339 2,921 2,849 2,871 2,781 2,728 2,702 2,682 2,790 117 Total payable in U.S. dollars 141,908 148,278 143,582 143,215 140,945 139,909 139,648 136,820 134,623 130,921 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 1985 IItteemm 11998833 11998844 Mar/ Apr/ May' June' July' Aug. Sept.? 1 Total1 177,950 180,525' 169,891 170,609 173,725 177,780 180,766 181,105 180,246 By type 2 Liabilities reported by banks in the United States2 25,534 26,089 23,050 22,771 23,153 22,915 22,101 23,154 25,826 3 U.S. Treasury bills and certificates3 54,341 59,976 54,685 57,226 56,691 58,589 60,727 60,921 56,493 U.S. Treasury bonds and notes 4 Marketable 68,514 69,029 67,647 67,022 70,552 73,265 75,053 75,157 76,221 5 Nonmarketable4 7,250 5,800 5,300 4,900 4,500 4,500 4,500 3,550 3,550 6 U.S. securities other than U.S. Treasury securities5 22,311 19,631' 19,209 18,690 18,829 18,511 18,385 18,323 18,156 By area 1 Western Europe1 67,645 69,789 63,746 65,660 67,948 70,346 73,378 75,156 74,431 8 Canada 2,438 1,528 1,715 1,403 1,558 1,571 2,010 1,664 1,561 9 Latin America and Caribbean 6,248 8,554 7,518 7,528 8,072 8,467 8,846 9,524 10,529 10 Asia 92,572 93,920 90,749 89,965 90,181 91,406 90,834 89,485 88,287 11 Africa 958 1,264 1,200 1,403 1,262 1,299 1,259 1,110 1,447 12 Other countries6 8,089 5,470 4,963 4,650 4,704 4,691 4,439 4,166 3,991 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 Sept/ Dec.' Mar. June 1 Banks' own liabilities 3,523 4,844 5,219 6,216 8,578 8,012 10,150 2 Banks' own claims 4,980 7,707 7,231 9,279 11,874 12,639 14,012 3 Deposits 3,398 4,251 2,731 3,610 4,998 6,148 7,437 4 Other claims 1,582 3,456 4,501 5,669 6,876 6,491 6,575 5 Claims of banks' domestic customers1 971 676 1,059 281 569 440 243 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 • January 1986 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1985 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept.? 1 All foreigners 307,056 369,607 407,133' 413,430' 410,976' 411,297' 412,861' 416,420' 417,536 420,560 2 Banks' own liabilities 227,089 279,087 306,499' 317,302' 313,018' 315,608' 317,062' 318,944' 318,718 323,191 3 Demand deposits 15,889 17,470 19,571 18,114' 18,295 17,705 19,423' 17,662' 17,735 20,953 4 Time deposits1 68,797 90,632 110,286' 119,361' 117,872' 120,792' 116,331' 116,069' 119,070 115,664 5 Other2 23,184 25,874 26,002' 25,057' 24,392' 25,614 25,782' 25,875' 25,686 29,617 6 Own foreign offices3 119,219 145,111 150,64C 154,77C 152,459' 151,496' 155,526' 159,338' 156,227 156,957 7 Banks' custody liabilities4 79,967 90,520 100,634' 96,128 97,958 95,690 95,799' 97,477' 98,818 97,369 8 U.S. Treasury bills and certificates5 55,628 68,669 76,368' 71,552 73,078 71,597 73,061 75,396 7755,,779977 7733,,339988 9 Other negotiable and readily transferable instruments6 20,636 17,467 18,747' 18,099 18,337 17,690 16,207 16,165' 16,547 17,110 10 Other 3,702 4,385 5,518' 6,477 6,543 6,403 6,532' 5,916' 6,475 6,861 11 Nonmonetary international and regional organizations7 4,922 5,957 4,083 5,905 6, UUP 6,694 5,709 5,019' 7,353 7,467 12 Banks' own liabilities 1,909 4,632 1,644 2,333 3,137' 4,389 3,928 3,243' 5,569 3,275 13 Demand deposits 106 297 254 191 167 264 164 134 252 243 14 Time deposits1 1,664 3,584 1,102 1,488 2,276 3,747 3,023 2,556' 4,366 2,261 15 Other2 139 750 288 654 694' 377 740 553 951 771 16 Banks' custody liabilities4 3,013 1,325 2,440 3,572 3,029 2,305 1,782 1,777 1,784 4,192 17 U.S. Treasury bills and certificates 1,621 463 916 22,,008822 11,,443344 775 642 767 742 22,,775599 18 Other negotiable and readily transferable instruments6 1,392 862 1,524 1,490 1,593 1,531 1,140 1,010 11,,004422 1,433 19 Other 0 0 0 0 2 0 0 0 11 0 20 Official institutions8 71,647 79,876 86,065 77,734' 79,997' 79,844' 81,504' 82,828' 84,075 82,320 21 Banks' own liabilities 16,640 19,427 19,039 16,836' 16,631' 17,652' 17,795' 17,256' 17,650 20,205 22 Demand deposits 1,899 1,837 1,823 1,923 1,975 1,630 1,891 1,546 1,538 2,166 23 Time deposits1 5,528 7,318 9,374 8,518' 9,176' 8,728' 9,05(y 9,07 C 9,274 8,951 24 Other2 9,212 10,272 7,842 6,395' 5,481 7,294 6,853' 6,640' 6,839 9,089 25 Banks' custody liabilities4 55,008 60,448 67,026 60,898 63,366 62,192 63,710 65,572' 66,425 62,114 26 U.S. Treasury bills and certificates5 46,658 54,341 59,976 54,685 57,226 56,691 58,589 60,727 60,921 56,493 27 Other negotiable and readily transferable instruments6 8,321 6,082 6,966 6,109 6,007 5,451 5,042 4,725' 5,291 5,486 28 Other 28 25 84 105 133 50 78 120 213 135 29 Banks9 185,881 226,887 248,897' 257,656' 253,040' 251,784' 254,045' 257,ny 254,070 257,537 30 Banks' own liabilities 169,449 205,347 225,372' 235,223' 230,607' 229,858' 232,319' 235,488' 231,826 234,954 31 Unaffiliated foreign banks 50,230 60,236 74,732' 80,452' 78,149 78,361' 76,793' 76.15CK 75,599 77,997 32 Demand deposits 8,675 8,759 10,556 9,137' 9,266 8,714 9,847 8,647 8,594 10,478 33 Time deposits1 28,386 37,439 47,155' 54,25C 51,610 52,674' 49,968' 49,919' 49,975 49,276 34 Other2 13,169 14,038 17,021' 17,064' 17,273 16,973 16,977' 17,584' 17,030 18,244 35 Own foreign offices3 119,219 145,111 150,640' 154,770' 152,459' 151,496' 155,526' 159,338' 156,227 156,957 36 Banks' custody liabilities4 16,432 21,540 23,525' 22,433 22,432 21,926 21,727' 21,625 22,244 22,583 37 U.S. Treasury bills and certificates 5,809 10,178 11,448' 10,602 1100,,444466 10,216 99,,774455 99,,993344 99,,996666 99,,995522 38 Other negotiable and readily transferable instruments6 7,857 7,485 7,236' 6,206 6,235 6,104 6,231 6,390' 6,506 6,418 39 Other 2,766 3,877 4,841' 5,625 5,751 5,606 5,751' 5,301' 5,772 6,214 40 Other foreigners 44,606 56,887 68,087' 72,135' 71,774' 72,976' 71,602' 71,460' 72,038 73,235 41 Banks' own liabilities 39,092 49,680 60,444' 62,911' 62,643' 63,710' 63,020' 62,957' 63,673 64,756 42 Demand deposits 5,209 6,577 6,938' 6,863 6,888 7,098 7,52C 7,335' 7,351 8,066 43 Time deposits 33,219 42,290 52,655' 55,105' 54,810' 55,643' 54,29C 54,524' 55,455 55,177 44 Other2 664 813 851 943 945 969 1,211 1,098' 867 1,513 45 Banks' custody liabilities4 5,514 7,207 7,642' 9,224 9,131 9,266 8,581 8,503' 8,365 8,479 46 U.S. Treasury bills and certificates 1,540 3,686 4,029' 4,182 33,,997733 3,915 44,,008855 33,,996688 44,,116699 44,,119933 47 Other negotiable and readily transferable instruments6 3,065 3,038 3,021' 4,294 4,501 4,604 3,793 4,040 3,708 3,774 48 Other 908 483 593' 748 657 746 704 495' 489 513 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 14,307 10,346 10,476 9,412 9,145 9,081 8,679 8,567 8,903 9,177 1. Excludes negotiable time certificates of deposit, which are included in 5. Includes nonmarketable certificates of indebtedness and Treasury bills "Other negotiable and readily transferable instruments." issued to official institutions of foreign countries. 2. Includes borrowing under repurchase agreements. 6. Principally bankers acceptances, commercial paper, and negotiable time 3. U.S. banks: includes amounts due to own foreign branches and foreign certificates of deposit. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 7. Principally the International Bank for Reconstruction and Development, and regulatory agencies. Agencies, branches, and majority-owned subsidiaries of the Inter-American and Asian Development Banks. foreign banks: principally amounts due to head office or parent foreign bank, and 8. Foreign central banks and foreign central governments, and the Bank for foreign branches, agencies or wholly owned subsidiaries of head office or parent International Settlements. foreign bank. 9. Excludes central banks, which are included in "Official institutions." 4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.17 Continued 1985 AArreeaa aanndd ccoouunnttrryy 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept.'' 1 307,056 369,607 407,133' 413,430' 410,976' 411,297' 412,861 416,420' 417,536 420,560 2 Foreign countries 302,134 363,649 403,049' 407,525' 404,811' 404,603' 407,152 411,401' 410,183 413,092 3 117,756 138,072 153,212' 151,763' 149,218' 151,219 153,718 156,132' 160,215 157,019 4 519 585 615 670 537 627 563 567 711 767 5 Belgium-Luxembourg 2,517 2,709 4,114 4,797 4,795 4,619 4,889 5,743 5,416 5,710 6 509 466 438 452 557 494 727 684 617 778 7 Finland 748 531 418 804 476 604 325 349 377 351 8 8,171 9,441 12,701 12,782 13,627 14,178 13,849 15,237 15,626 15,664 9 Germany 5,351 3,599 3,358 2,923 3,539 3,727 4,003 4,389 5,359 5,218 10 Greece 537 520 699 730 649 585 605 588 531 603 11 Italy 5,626 8,462 10,762' 8,412 7,895 8,467 9,276 9,624 9,537 9,088 17 Netherlands 3,362 4,290 4,799 5,037' 4,558r 4,685 4,386 4,689 4,691 4,569 13 Norway 1,567 1,673 1,548 1,889 2,138 1,994 1,397 1,183 1,156 1,043 14 388 373 597 715 698 665 635 658 672 640 15 1,405 1,603 2,082 2,079 2,000 2,030 2,015 2,113 2,034 2,140 16 1,390 1,799 1,676 1,667 1,901 1,689 2,277 2,559 2,008 1,668 17 Switzerland 29,066 32,246 31,740' 30,421 30,059 29,706 29,547 29,835' 29,535 29,309 18 Turkey 296 467 584 527 506 384 631 598 404 516 19 United Kingdom 48,172 60,683 68,671' 70,289 68,239 69,779 70,958 70,208' 73,557 70,487 70 Yugoslavia 499 562 602 671 648 585 729 626 622 647 21 Other Western Europe1 7,006 7,403 7,192' 6,286 5,790 5,877 6,261 6,004' 6,814 7,302 77 U.S.S.R 50 65 79 94 125 67 31 72 45 37 23 Other Eastern Europe2 576 596 537 517 480 458 614 406 504 483 24 Canada 12,232 16,026 16,048 17,228 17,006 16,214 15,874 16,284 16,739 17,363 75 Latin America and Caribbean 114,163 140,088 153,516' 157,687' 156,823' 157,092' 158,310 159,011' 154,895 157,470 76 Argentina 3,578 4,038 4,394' 4,528' 4,664 4,912 5,081 5,322 5,283 5,639 77 Bahamas 44,744 55,818 56,897 59,600 59,069 58,195 57,406 55,858 55,446 53,660 78 Bermuda 1,572 2,266 2,370 2,799 3,159 3,192 2,503 2,380 2,741 2,124 79 Brazil 2,014 3,168 5,275' 4,599' 4,743 5,376 5,187 5,602' 5,910 5,873 30 British West Indies 26,381 34,545 36,773' 36,593 35,765 35,489 38,965 40,965' 35,654 38,891 31 Chile 1,626 1,842 2,001 1,897 1,909 1,922 1,870 1,910 1,966 1,992 37 Colombia 2,594 1,689 2,514 2,540 2,401 2,452 2,526 2,421 2,543 2,599 33 Cuba 9 8 10 6 6 7 6 10 9 13 34 Ecuador 455 1,047 1,092 1,024 1,022 987 1,004 1,046 1,043 1,251 35 Guatemala 670 788 896 950 955 979 963 972 995 1,005 36 126 109 183 163 154 146 123 194 152 144 37 8,377 10,392 12,506 13,293' 13,222' 13,678' 13,533 13,123' 13,381 13,809 38 Netherlands Antilles 3,597 3,879 4,153 4,582' 4,383 4,439 4,200 4,025 4,261 4,973 39 4,805 5,924 6,951 7,488 7,584 7,570 7,427 7,462 7,447 7,163 40 1,147 1,166 1,266 1,132 1,077 1,162 1,168 1,113 1,133 1,159 41 Uruguay 759 1,244 1,394 1,443 1,461 1,492 1,415 1,460 1,557 1,576 4? Venezuela 8,417 8,632 10,545 10,649 10,791 10,696 10,471 10,853 10,940 11,086 43 Other Latin America and Caribbean 3,291 3,535 4,297 4,401 4,458 4,396 4,460 4,297 4,435 4,515 44 Asia 48,716 58,570 71,192' 72,2^ 73,370' 71,641' 70,477 71,715' 70,513 73,291 China 45 Mainland 203 249 1,153 980 912 698 886 939 1,135 11,,997733 46 Taiwan 2,761 4,051 4,975 5,306 5,242 5,381 5,545 5,849 6,047 6,268 47 Hong Kong 4,465 6,657 6,594 6,937 7,091 7,360 7,989 7,831' 8,012 7,906 48 433 464 507 738 554 546 569 555 484 646 49 Indonesia 857 997 1,033 1,175' 1,241' 1,164' 1,264 1,463 1,337 1,358 50 606 1,722 1,268 941 873 988 1,053 1,011 885 1,190 51 Japan 16,078 18,079 21,652' 24,540 22,683 22,688 21,103 22,913' 22,537 23,583 57 Korea 1,692 1,648 1,724 1,526 1,595 1,598 1,705 1,493 1,584 1,657 53 Philippines 770 1,234 1,383 1,102 1,223 1,305 1,443 1,335 1,694 1,606 54 Thailand 629 747 1,257 1,384 1,141 1,167 1,063 984 1,073 1,029 55 Middle-East oil-exporting countries3 13,433 12,976 16,804 16,391 16,373 16,316 15,052 15,410 14,812 15,343 56 Other Asia 6,789 9,748 12,841' 11,200 14,441 12,430 12,805 11,932' 10,915 10,733 57 3,124 2,827 3,396 3,476 3,517 3,429 3,920 3,384 3,501 3,641 58 432 671 647 715 747 618 745 881 737 932 59 81 84 118 167 155 189 161 98 162 157 60 292 449 328 244 339 273 332 181 420 370 61 23 87 153 100 128 124 170 87 103 115 67 Oil-exporting countries4 1,280 620 1,189 1,346 1,177 1,114 1,497 1,099 1,092 1,049 63 Other Africa 1,016 917 961 903 969 1,112 1,015 1,037 986 1,018 64 Other countries 6,143 8,067 5,684 5,152 4,877 5,009 4,854 4,876 4,319 4,308 65 5,904 7,857 5,300 4,743 4,456 4,608 4,462 4,364 3,850 3,768 66 All other 239 210 384 409 422 401 392 511 469 540 67 Nonmonetary international and regional organizations 4,922 5,957 4,083 5,905 6,166' 66,,669944 55,,770099 55,,001199'' 77,,335533 77,,446677 68 International 4,049 5,273 3,376 5,132 5,301' 5,636 4,698 3,967' 6,458 6,542 69 Latin American regional 517 419 587 632 706 834 880088 782 739 796 70 Other regional5 357 265 120 141 159 224 220033 270 156 129 1. Includes the Bank for International Settlements. Beginning April 1978, also 4. Comprises Algeria, Gabon, Libya, and Nigeria. includes Eastern European countries not listed in line 23. 5. Asian, African, Middle Eastern, and European regional organizations, 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German except the Bank for International Settlements, which is included in "Other Democratic Republic, Hungary, Poland, and Romania. Western Europe." 3. 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

A60 International Statistics • January 1986 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 1985 AArreeaa aanndd ccoouunnttrryy 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept.? 1 Total 355,705 391,312 398,845' 397,317' 391,432' 391,355' 396,253 390,368' 387,407 392,629 2 Foreign countries 355,636 391,148 398,251' 397,067' 390,295' 390,540' 395,543 390,094' 386,969 392,247 3 Europe 85,584 91,927 98,151' 101,962' 99,630' 100,205' 100,953 100,377' 100,897 105,865 4 Austria 229 401 433 484 519 552 536 815 703 762 5 Belgium-Luxembourg 5,138 5,639 4,794 5,233 5,161 5,264 5,219 5,740 5,496 6,147 6 Denmark 554 1,275 648 638 601 560 474 498 492 615 7 Finland 990 1,044 898 826 804 700 896 875 738 906 8 France 7,251 8,766 9,142' 10,042 10,278' 10,462 9,969 10,001' 10,226 11,119 9 Germany 1,876 1,284 1,313 1,072 1,008 1,015 1,223 1,115' 933 999 10 Greece 452 476 817 848 907 921 1,002 947 959 1,014 11 Italy 7,560 9,018 9,119' 8,711 8,256 7,798 7,520 7,623 6,522 7,421 12 Netherlands 1,425 1,267 1,351 1,348 1,401 1,040 1,339 1,137' 1,188 1,281 13 Norway 572 690 675 621 748 753 750 710 683 856 14 Portugal 950 1,114 1,243 1,186 1,151 1,158 1,156 1,151 1,181 1,211 15 Spain 3,744 3,573 2,884 2,978 2,890 2,587 2,700 2,387 2,146 2,440 16 Sweden 3,038 3,358 2,220 2,342 2,338 2,177 2,067 2,698 2,478 2,470 17 Switzerland 1,639 1,863 2,123 1,921 1,843 1,631 2,231 2,669 2,629 3,091 18 Turkey 560 812 1,130 1,172 1,147 1,162 1,208 1,313 1,234 1,303 19 United Kingdom 45,781 47,364 55,352' 58,585' 56,396' 58,020' 58,377 56,437' 59,270 60,186 20 Yugoslavia 1,430 1,718 1,886 1,793 1,892 1,940 1,958 1,972 1,954 1,899 21 Other Western Europe1 368 477 596 642 640 760 775 679 629 692 22 U.S.S.R 263 192 142 203 245 312 297 250 239 199 23 Other Eastern Europe2 1,762 1,598 1,382 1,317 1,404 1,393 1,255 1,358' 1,198 1,256 24 Canada 13,678 16,341 16,093' 18,8^ 18,383' 17,926' 17,889 16,696 17,015 16,944 25 Latin America and Caribbean 187,969 205,491 207,649' 202,94C 199,130' 201,180' 203,974 200,765' 196,806 196,292 26 Argentina 10,974 11,749 11,043 11,162 11,163 11,346 11,416 11,456 11,293 11,850 27 Bahamas 56,649 59,633 57,949' 57,638' 55,554' 56,781' 59,477 55,610 53,435 53,091 28 Bermuda 603 566 592 464 633 506 563 405 503 564 29 Brazil 23,271 24,667 26,315 26,124 26,207 26,434 26,549 26,559' 26,431 26,010 30 British West Indies 29,101 35,527 38,120' 36,396' 35,571' 36,107' 36,372 37,436 35,857 35,259 31 Chile 5,513 6,072 6,839 6,775 6,676 6,634 6,680 6,663 6,476 6,524 32 Colombia 3,211 3,745 3,499 3,313 3,246 3,270 3,207 3,210 3,195 3,251 33 Cuba 3 0 0 0 0 0 0 0 0 0 34 Ecuador 2,062 2,307 2,420 2,470 2,467 2,487 2,493 2,450 2,430 2,486 35 Guatemala3 124 129 158 154 154 149 145 153 149 168 36 Jamaica3 181 215 252 233 223 237 227 234 228 228 37 Mexico 29,552 34,802 34,824 33,410 32,554 32,748 32,384 32,129' 32,363 32,338 38 Netherlands Antilles 839 1,154 1,350 1,259' 1,319 1,386 1,249 1,110 1,135 1,139 39 Panama 10,210 7,848 7,707 7,083 7,039 6,751 6,856 6,985 6,923 7,055 40 Peru 2,357 2,536 2,384 2,345 2,353 2,310 2,286 2,237 2,221 2,206 41 Uruguay 686 977 1,088 1,019 1,014 1,013 1,013 1,007 1,018 1,035 42 Venezuela 10,643 11,287 11,017 10,956 10,804 10,947 10,996 10,992 11,028 11,082 43 Other Latin America and Caribbean 1,991 2,277 2,091 2,139 2,154 2,072 2,060 2,129' 2,122 2,005 44 6600,,995522 6677,,883377 6666,,229966'' 6633,,661199'' 6633,,4455CC 61,833' 6633,,447700 6633,,224422'' 6633,,554444 6644,,335566 China 45 Mainland 214 292 710 650 572 543 358 635 560 1,171 46 Taiwan 2,288 1,908 1,849 1,954 1,937 1,641 1,718 1,540 1,517 1,514 47 Hong Kong 6,787 8,489 7,283 6,644' 6,897 7,290 7,237 7,473' 7,989 7,705 48 India 222 330 425 284 307 270 310 385' 460 462 49 Indonesia 348 805 724' 780 704 701 682 631 623 718 50 Israel 2,029 1,832 2,088 1,941 2,004 2,038 2,598 2,053 1,927 1,875 51 Japan 28,379 30,354 29,066' 27,996' 26,614' 25,429' 26,529 26,336 27,662 26,952 52 Korea 9,387 9,943 9,285 9,329' 9,434 9,127 9,158 9,707 9,291 9,092 53 Philippines 2,625 2,107 2,550 2,435 2,360 2,384 2,448 2,454 2,487 2,443 54 Thailand 643 1,219 1,125 1,005 939 852 862 746' 755 791 55 Middle East oil-exporting countries4 3,087 4,954 5,044 4,708 5,509 5,546 5,120 5,315 4,116 4,845 56 Other Asia 4,943 5,603 6,147' 5,895 6,171 6,012' 6,449 5,967 6,158 6,786 57 Africa 5,346 6,654 6,615 6,221 6,299 6,203 6,075 5,957' 5,718 5,701 58 Egypt 322 747 728 674 629 612 626 606 585 634 59 Morocco 353 440 583 584 595 577 592 596 598 592 60 South Africa 2,012 2,634 2,795 2,420 2,508 2,497 2,524 2,402 2,214 2,094 61 Zaire 57 33 18 24 24 24 24 24 25 22 62 Oil-exporting countries5 801 1,073 842 819 893 871 740 743 722 835 63 Other 1,802 1,727 1,649 1,700 1,651 1,621 1,569 1,587' 1,574 1,525 64 Other countries 2,107 2,898 3,447' 3,510 3,403 3,194 3,183 3,057 2,988 3,090 65 Australia 1,713 2,256 2,769' 2,824 2,755 2,536 2,498 2,320 2,225 2,303 66 All other 394 642 678 686 648 658 685 737 764 787 67 Nonmonetary international and regional organizations6 68 164 594' 25C 1138' 815 710 275 438 382 1. Includes the Bank for International Settlements. Beginning April 1978, also 5. Comprises Algeria, Gabon, Libya, and Nigeria. includes Eastern European countries not listed in line 23. 6. Excludes the Bank for International Settlements, which is included in 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German "Other Western Europe." Democratic Republic, Hungary, Poland, and Romania. NOTE. Data for period before April 1978 include claims of banks' domestic 3. Included in "Other Latin America and Caribbean" through March 1978. customers on foreigners. 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1985 TTyyppee ooff ccllaaiimm 11998822 11998833 11998844'' Mar/ Apr/ May' June July' Aug. Sept.P 1 Total 333333999999666666,,,,,,000000111111555555 444444222222666666,,,,,,222222111111555555 444444333333111111,,,,,,777777666666111111 444444333333000000,,,,,,999999666666333333 444444222222555555,,,,,,666666999999222222 339922,,662299 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 333333555555555555,,,,,,777777000000555555 333333999999111111,,,,,,333333111111222222 333333999999888888,,,,,,888888444444555555 333333999999777777,,,,,,333333111111777777 391,432 391,355 333333999999666666,,,,,,222222555555333333 390,368 387,407 339922,,662299 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 444444555555,,,,,,444444222222222222 555555777777,,,,,,555555666666999999 666666111111,,,,,,555555999999555555 666666111111,,,,,,888888111111111111 62,114 61,673 666666111111,,,,,,222222444444111111 61,239 60,907 6611,,998811 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 111111222222777777,,,,,,222222999999333333 111111444444666666,,,,,,333333999999333333 111111555555666666,,,,,,111111777777444444 111111555555777777,,,,,,777777999999888888 155,070 157,026 111111666666222222,,,,,,888888444444000000 158,164 155,533 115599,,334422 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111222222111111,,,,,,333333777777777777 111111222222333333,,,,,,888888333333777777 111111222222333333,,,,,,999999666666777777 111111222222222222,,,,,,666666000000111111 119,696 119,435 111111111111888888,,,,,,444444999999333333 117,446 117,674 111188,,334444 66 DDeeppoossiittss 444444444444,,,,,,222222222222333333 444444777777,,,,,,111111222222666666 444444888888,,,,,,333333777777999999 555555000000,,,,,,000000333333222222 47,990 48,459 444444888888,,,,,,111111333333555555 48,786 49,357 4488,,667799 77 OOtthheerr 777777777777,,,,,,111111555555333333 777777666666,,,,,,777777111111111111 777777555555,,,,,,555555888888888888 777777222222,,,,,,555555666666888888 71,706 70,976 777777000000,,,,,,333333555555888888 68,660 68,316 6699,,666655 88 AAllll ootthheerr ffoorreeiiggnneerrss 666666111111,,,,,,666666111111444444 666666333333,,,,,,555555111111444444 555555777777,,,,,,111111000000999999 555555555555,,,,,,111111000000777777 54,552 53,222 555555333333,,,,,,666666777777999999 53,520 53,294 5522,,996611 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 444444000000,,,,,,333333111111000000 333333444444,,,,,,999999000000333333 333333222222,,,,,,999999111111666666 333333333333,,,,,,666666444444666666 222222999999,,,,,,444444333333999999 222222,,,,,,444444999999111111 222222,,,,,,999999666666999999 333333,,,,,,333333888888000000 333333,,,,,,888888000000666666 222222,,,,,,888888777777000000 11 Negotiable and readily transferable 333333000000,,,,,,777777666666333333 222222666666,,,,,,000000666666444444 222222333333,,,,,,888888000000555555 222222444444,,,,,,666666444444111111 222222111111,,,,,,000000666666444444 12 Outstanding collections and other 777777,,,,,,000000555555666666 555555,,,,,,888888777777000000 555555,,,,,,777777333333222222 555555,,,,,,111111999999888888 555555,,,,,,555555000000555555 13 MEMO: Customer liability on acceptances 333333888888,,,,,,111111555555333333 333333777777,,,,,,777777111111555555 333333777777,,,,,,111111000000333333 333333555555,,,,,,444444999999666666 333333111111,,,,,,666666999999999999 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 42,499 46,217 40,508 39,703 39,407 37,484 35,943' 37,336 38,068 n.a. 1. U.S. banks: includes amounts due from own foreign branches and foreign 3. Principally negotiable time certificates of deposit and bankers acceptances. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 4. Includes demand and time deposits and negotiable and nonnegotiable regulatory agencies. Agencies, branches, and majority-owned subsidiaries of certificates of deposit denominated in U.S. dollars issued by banks abroad. For foreign banks: principally amounts due from head office or parent foreign bank, description of changes in data reported by nonbanks, see July 1979 BULLETIN, and foreign branches, agencies, or wholly owned subsidiaries of head office or p. 550. parent foreign bank. NOTE. Beginning April 1978, data for banks' own claims are given on a monthly 2. Assets owned by customers of the reporting bank located in the United basis, but the data for claims of banks' own domestic customers are available on a States that represent claims on foreigners held by reporting banks for the account quarterly basis only. of their domestic customers. 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 Sept/ Dec/ Mar/ June 1 Total 154,590 228,150 243,715 240,752 243,409 239,521 231,713 By borrower 2 Maturity of 1 year or less1 116,394 173,917 176,158 162,974 166,381 165,185 158,641 3 Foreign public borrowers 15,142 21,256 24,039 21,216 22,758 23,615 23,899 4 All other foreigners 101,252 152,661 152,120 141,758 143,623 141,570 134,742 5 Maturity of over 1 year1 38,197 54,233 67,557 77,779 77,027 74,335 73,072 6 Foreign public borrowers 15,589 23,137 32,521 38,695 39,247 38,164 37,425 7 All other foreigners 22,608 31,095 35,036 39,084 37,780 36,171 35,647 By area Maturity of 1 year or less1 8 Europe 28,130 50,500 56,117 56,824 58,398 60,391 55,656 9 Canada 4,662 7,642 6,211 5,853 6,015 7,531 6,135 10 Latin America and Caribbean 48,717 73,291 73,660 61,495 61,653 60,162 63,545 11 31,485 37,578 34,403 32,297 33,484 30,690 27,537 12 Africa 2,457 3,680 4,199 4,798 4,442 4,109 4,003 13 All other2 943 1,226 1,569 1,705 2,388 2,301 1,764 Maturity of over 1 year1 14 Europe 8,100 11,636 13,576 11,250 9,605 8,545 8,628 15 Canada 1,808 1,931 1,857 1,801 1,890 2,181 2,116 16 Latin America and Caribbean 25,209 35,247 43,888 56,627 57,069 55,372 53,507 17 1,907 3,185 4,850 5,079 5,323 5,221 5,203 18 Africa 900 1,494 2,286 1,871 2,033 1,963 1,996 19 All other2 272 740 1,101 1,150 1,107 1,053 1,622 • Liabilities and claims of banks in the United States were increased, beginning 1. Remaining time to maturity, in December 1981, by the shift from foreign branches to international banking 2. Includes nonmonetary international and regional organizations, 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 • January 1986 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 1983 1984 1985 AArreeaa oorr ccoouunnttrryy 11998811 11998822 June Sept. Dec. Mar. June7 Sept. Dec. Mar. June? 1 Totol 415.2 438.7 439.9 431.0 437.3 435.1 430.6 410.1 407.7 409.3 400.6 2 G-10 countries and Switzerland 175.5 179.7 177.1 168.8 168.0 166.0 157.7 148.0 147.6 152.4 146.7 3 Belgium-Luxembourg 13.3 13.1 13.3 12.6 12.4 11.0 10.9 9.8 8.8 9.4 9.0 4 France 15.3 17.1 17.1 16.2 16.3 15.9 14.2 14.3 14.1 14.6 13.6 5 Germany 12.9 12.7 12.6 11.6 11.3 11.7 10.9 10.0 9.0 8.9 9.6 6 Italy 9.6 10.3 10.5 9.9 11.4 11.2 11.5 9.7 10.1 10.0 8.9 7 Netherlands 4.0 3.6 4.0 3.6 3.5 3.4 3.0 3.4 3.9 3.7 3.7 8 Sweden 3.7 5.0 4.7 4.9 5.1 5.2 4.3 3.5 3.2 3.1 2.9 9 Switzerland 5.5 5.0 4.8 4.2 4.3 4.3 4.2 3.9 3.9 4.2 4.0 10 United Kingdom 70.1 72.1 70.8 67.8 65.4 65.1 60.5 57.4 59.8 64.8 65.2 11 Canada 10.9 10.4 10.8 8.9 8.3 8.6 8.9 8.1 7.8 9.0 8.0 12 Japan 30.2 30.2 28.5 29.0 29.9 29.7 29.3 27.9 27.2 24.7 21.9 13 Other developed countries 28.4 33.7 34.5 34.3 36.1 35.7 37.1 36.3 33.8 33.0 32.4 14 Austria 1.9 1.9 2.1 1.9 1.9 2.0 1.9 1.8 1.6 1.6 1.6 15 Denmark 2.3 2.4 3.4 3.3 3.4 3.4 3.1 2.9 2.2 2.1 1.9 16 Finland 1.7 2.2 2.1 1.8 2.4 2.1 2.3 1.9 1.9 1.8 1.8 17 Greece 2.8 3.0 2.9 2.9 2.8 3.0 3.3 3.2 2.9 2.9 2.9 18 Norway 3.1 3.3 3.4 3.2 3.3 3.2 3.2 3.2 3.0 2.9 2.9 19 Portugal 1.1 1.5 1.4 1.4 1.5 1.4 1.7 1.6 1.4 1.4 1.3 20 Spain 6.6 7.5 7.2 7.1 7.1 7.1 7.3 6.9 6.5 6.5 5.9 21 Turkey 1.4 1.4 1.4 1.5 1.7 1.9 2.0 2.0 1.9 1.9 2.0 22 Other Western Europe 2.1 2.3 2.0 2.1 1.8 1.8 1.9 1.7 1.7 1.7 1.8 23 South Africa 2.8 3.7 3.9 4.7 4.7 4.8 4.7 5.0 4.5 4.2 3.9 24 Australia 2.5 4.4 4.5 4.4 5.5 5.2 5.7 6.2 6.1 6.2 6.3 25 OPEC countries2 24.8 27.4 28.3 27.2 28.9 28.6 26.7 25.0 25.6 25.2 23.6 26 Ecuador 2.2 2.2 2.2 2.1 2.2 2.1 2.1 2.1 2.2 2.2 2.3 27 Venezuela 9.9 10.5 10.4 9.8 9.9 9.7 9.5 9.2 9.3 9.3 9.3 28 Indonesia 2.6 3.2 3.2 3.4 3.8 4.0 4.0 3.8 3.7 3.6 3.4 29 Middle East countries 7.5 8.7 9.5 9.1 10.0 9.8 8.4 7.4 8.2 7.8 6.5 30 African countries 2.5 2.8 3.0 2.8 3.0 3.0 2.7 2.5 2.3 2.3 2.1 31 Non-OPEC developing countries 96.3 107.1 108.8 109.8 111.6 112.2 112.8 111.9 112.2 111.3 110.4 Latin America 32 Argentina 9.4 8.9 9.4 9.5 9.5 9.5 9.2 9.1 8.7 8.6 8.6 33 Brazil 19.1 22.9 22.7 23.1 23.1 25.1 25.4 26.3 26.3 26.4 26.6 34 Chile 5.8 6.3 5.8 6.3 6.4 6.5 6.7 7.1 7.0 7.0 6.9 35 Colombia 2.6 3.1 3.2 3.2 3.2 3.1 3.0 2.9 2.9 2.8 2.7 36 Mexico 21.6 24.5 25.3 25.9 26.1 25.6 26.0 26.1 25.8 25.7 25.6 37 Peru 2.0 2.6 2.6 2.4 2.4 2.3 2.3 2.2 2.2 2.2 2.1 38 Other Latin America 4.1 4.0 4.3 4.2 4.2 4.4 4.1 3.9 3.9 3.7 3.6 Asia China 39 Mainland .2 .2 .2 .2 .3 .3 .6 .5 .7 .7 .3 40 Taiwan 5.1 5.3 5.1 5.2 5.3 4.9 5.3 5.2 5.1 5.3 5.5 41 .3 .6 .7 .8 1.0 1.0 1.0 1.1 1.0 1.0 1.0 42 2.1 2.3 2.3 1.7 1.9 1.6 1.9 1.7 1.8 1.7 2.3 43 Korea (South) 9.4 10.9 10.9 10.9 11.3 11.1 11.2 10.3 10.8 10.5 10.1 44 Malaysia 1.7 2.1 2.6 2.8 2.9 2.8 2.7 3.0 2.8 2.8 2.8 45 Philippines 6.0 6.3 6.4 6.2 6.2 6.7 6.3 5.9 6.0 6.1 5.9 46 Thailand 1.5 1.6 1.8 1.8 2.2 2.1 1.9 1.8 1.8 1.7 1.5 47 Other Asia 1.0 1.1 1.2 1.0 1.0 .9 1.1 .9 1.1 1.1 .9 Africa 48 Egypt 1.1 1.2 1.3 1.4 1.5 1.4 1.4 1.2 1.2 1.1 1.0 49 Morocco...' .7 .7 .8 .8 .8 .8 .8 .8 .8 .8 .8 50 Zaire .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 2.3 2.4 2.2 2.4 2.3 2.2 1.9 1.9 2.1 2.2 2.0 52 Eastern Europe 7.8 6.2 5.8 5.3 5.3 4.9 4.9 4.5 4.4 4.3 4.3 53 U.S.S.R .6 .3 .4 .2 .2 .2 .2 .2 .1 .2 .3 54 Yugoslavia 2.5 2.2 2.3 2.3 2.4 2.3 2.3 2.3 2.3 2.2 2.2 55 Other 4.7 3.7 3.0 2.8 2.8 2.5 2.4 2.1 2.0 1.9 1.8 56 Offshore banking centers 63.7 66.8 69.3 68.7 70.5 71.4 74.1 66.9 66.8 66.2 65.9 57 Bahamas 19.0 19.0 20.7 21.6 21.8 24.6 27.5 23.7 21.5 21.6 21.5 58 Bermuda .7 .9 .8 .8 .9 .7 .7 1.0 .9 .7 .9 59 Cayman Islands and other British West Indies 12.4 12.9 12.7 10.5 12.2 12.0 12.2 11.1 11.7 12.3 12.4 60 Netherlands Antilles 3.2 3.3 2.6 4.1 4.2 3.3 3.3 3.1 3.4 3.3 3.2 61 Panama4 7.7 7.6 6.6 5.7 6.0 6.3 6.6 5.7 6.8 5.7 5.5 62 Lebanon .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 11.8 13.9 14.5 15.2 15.0 14.4 13.5 12.7 12.5 12.4 12.6 64 Singapore 8.7 9.2 11.2 10.5 10.3 10.0 10.2 9.5 9.8 10.0 9.6 65 Others5 .1 .0 .0 .1 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 18.8 17.9 16.2 16.9 17.0 16.3 17.3 17.3 17.3 16.9 17.5 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 1984 1985 Type, and area or country 998811 11998822 11998833 June Sept. Dec. Mar. JuneP 1 Total 28,618 27,512 25,236'' 34,269 30,759 28,808' 25,594 24,456 2 Payable in dollars 24,909 24,280 22,216' 31,071 27,954 25,935' 22,915 21,898 3 Payable in foreign currencies 3,709 3,232 3,020 3,198 2,804 2,873 2,679 2,558 By type 4 Financial liabilities 12,157 11,066 10,462' 18,595 15,900 13,951' 11,073 11,353 5 Payable in dollars 9,499 8,858 8,683' 16,553 14,103 12,084' 9,322 9,485 6 Payable in foreign currencies 2,658 2,208 1,779 2,043 1,797 1,868 1,751 1,868 7 Commercial liabilities 16,461 16,446 14,774 15,674 14,859 14,857 14,521 13,103 8 Trade payables 10,818 9,438 7,765 7,897 6,900 6,990 7,052 5,854 9 Advance receipts and other liabilities.. 5,643 7,008 7,009 7,776 7,959 7,867 7,469 7,249 10 Payable in dollars 15,409 15,423 13,533 14,518 13,852 13,851 13,593 12,413 11 Payable in foreign currencies 1,052 1,023 1,241 1,155 1,007 1,006 928 690 By area or country Financial liabilities 12 Europe 6,825 6,501 5,742 7,335 6,679 6,798 6,100 5,893 13 Belgium-Luxembourg 471 505 302 359 428 471 298 348 14 France 709 783 843 900 910 995 896 865 15 Germany 491 467 502 571 521 489 506 474 16 Netherlands 748 711 621 595 595 578 602 597 17 Switzerland 715 792 486 563 514 569 541 566 18 United Kingdom 3,565 3,102 2,839 4,097 3,463 3,389 3,028 2,801 19 Canada 963 746 764 735 825 863 840 850 20 Latin America and Caribbean 3,356 2,751 2,596' 9,038 6,800 4,576' 2,652 3,106 21 Bahamas 1,279 904 751 3,642 2,606 1,423 853 1,107 22 Bermuda 7 14 13 13 11 13 25 10 23 Brazil 22 28 32 25 33 35 29 27 24 British West Indies 1,241 1,027 1,041' 4,567' 3,271 2,103' 1,521 1,734 25 Mexico 102 121 213 237 260 367 25 32 26 Venezuela 98 114 124 124 130 137 3 3 27 Asia 976 1,039 11,,333322 1,462 1,566 1,682 1,460 1,478 28 Japan 792 715 889988 1,013 1,085 1,121 945 877 29 Middle East oil-exporting countries2.. 75 169 170 180 144 147 116 147 30 Africa 14 17 19 16 16 14 12 14 0 0 0 0 1 0 0 0 31 Oil-exporting countries3 24 12 10 9 14 19 10 13 32 All other4 Commercial liabilities 3,770 3,831 3,245 3,409 3,961 3,987 3,519 3,485 33 Europe 71 52 62 45 34 48 37 53 34 Belgium-Luxembourg 573 598 437 525 430 438 401 425 35 France 545 468 427 501 558 619 590 431 36 Germany 220 346 268 265 239 245 272 284 37 Netherlands 424 367 241 246 405 257 233 353 38 Switzerland 880 1,027 732 794 1,133 1,082 752 740 39 United Kingdom 40 Canada 897 1,495 1,841 1,840 1,906 1,975 1,727 1,494 41 Latin America and Caribbean 1,044 1,570 1,473 1,705 1,758 1,871 1,717 1,244 42 Bahamas 2 16 1 17 1 7 11 12 43 Bermuda 67 117 67 124 110 114 112 77 44 Brazil 67 60 44 31 68 124 101 90 45 British West Indies 2 32 6 5 8 32 21 1 46 Mexico 340 436 585 568 641 586 654 492 47 Venezuela 276 642 432 630 628 636 395 309 48 Asia 9,384 8,144 6,741 6,989 5,569 5,307 5,721 5,259 49 Japan 1,094 1,226 1,247 1,235 1,429 1,256 1,241 1,232 50 Middle East oil-exporting countries2'3 7,008 5,503 4,178 4,190 2,364 2,372 2,786 2,396 51 Africa 703 753 553 684 597 588 765 633 52 Oil-exporting countries3 344 277 167 217 251 233 294 265 53 All other4 664 651 921 1,046 1,068 1,128 1,070 988 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 • January 1986 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1984 1985 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998811 11998822 11998833 June Sept. Dec. Mar. JuneP 1 36,185 28,725 34,790 32,099 30,626 29,570 28,415 26,554 2 Payable in dollars 32,582 26,085 31,695 29,118 27,835 26,973 25,843 23,935 3 Payable in foreign currencies 3,603 2,640 3,096 2,982 2,792 2,597 2,571 2,619 By type 4 Financial claims 21,142 17,684 23,660 21,646 20,227 18,980 18,118 16,067 5 Deposits 15,081 13,058 18,375 16,498 15,419 14,347 14,126 12,183 6 Payable in dollars 14,456 12,628 17,872 15,977 14,979 13,927 13,629 11,637 7 Payable in foreign currencies 625 430 503 522 439 420 497 546 8 Other financial claims 6,061 4,626 5,284 5,148 4,808 4,633 3,992 3,884 9 Payable in dollars 3,599 2,979 3,328 3,387 3,116 3,190 2,427 2,403 10 Payable in foreign currencies 2,462 1,647 1,956 1,761 1,693 1,442 1,565 1,480 11 Commercial claims 15,043 11,041 11,131 10,454 10,399 10,591 10,297 10,487 12 Trade receivables 14,007 9,994 9,721 9,111 8,896 9,110 8,784 9,121 13 Advance payments and other claims 1,036 1,047 1,410 1,343 1,503 1,481 1,513 1,367 14 Payable in dollars 14,527 10,478 10,494 9,754 9,740 9,856 9,787 9,895 15 Payable in foreign currencies 516 563 637 699 659 735 510 592 By area or country Financial claims 16 Europe 4,596 4,873 6,452 6,485 5,703 5,643 5,691 5,293 17 Belgium-Luxembourg 43 15 37 37 15 15 29 15 18 France 285 134 150 151 151 126 86 46 19 Germany 224 178 163 166 192 224 196 168 20 Netherlands 50 97 71 158 62 66 72 37 21 Switzerland 117 107 38 61 64 66 46 16 22 United Kingdom 3,546 4,064 5,781 5,660 4,988 4,745 4,974 4,737 23 Canada 6,755 4,377 5,974 5,302 4,492 4,006 3,945 3,790 24 Latin America and Caribbean 8,812 7,546 10,164 8,615 8,859 8,045 7,427 6,158 25 Bahamas 3,650 3,279 4,745 3,269 3,392 3,270 2,992 2,156 26 Bermuda 18 32 102 11 5 6 4 5 27 Brazil 30 62 53 83 84 100 98 96 28 British West Indies 3,971 3,255 4,163 4,415 4,495 3,905 3,745 3,341 29 Mexico 313 274 293 230 232 215 201 205 30 Venezuela 148 139 134 124 128 125 101 100 31 758 698 764 977 900 961 856 620 32 Japan 366 153 297 321 371 353 509 281 33 Middle East oil-exporting countries2 37 15 4 8 7 13 6 6 34 Africa 173 158 147 158 160 210 101 111 35 Oil-exporting countries3 46 48 55 35 37 85 32 25 36 All other4 48 31 159 109 113 114 97 95 Commercial claims 37 Europe 5,405 3,826 3,670 3,555 3,570 3,812 3,360 3,707 38 Belgium-Luxembourg 234 151 135 142 128 138 149 224 39 France 776 474 459 408 411 440 375 410 40 Germany 561 357 349 447 370 374 358 373 41 Netherlands 299 350 334 306 303 340 340 301 42 Switzerland 431 360 317 250 289 271 253 376 43 United Kingdom 985 811 809 812 891 1,063 885 952 44 Canada 967 633 829 933 1,026 1,021 1,248 1,065 45 Latin America and Caribbean 3,479 2,526 2,695 2,042 1,976 11,,997733 1,973 2,137 46 Bahamas 12 21 8 4 14 88 9 11 47 Bermuda 223 261 190 89 88 115 164 65 48 Brazil 668 258 493 310 219 214 210 193 49 British West Indies 12 12 7 8 10 7 6 6 50 Mexico 1,022 775 884 577 595 583 493 616 51 Venezuela 424 351 272 241 245 206 192 224 52 3,959 3,050 3,063 3,091 2,895 3,086 2,985 2,720 53 Japan 1,245 1,047 1,114 1,183 1,089 1,191 1,154 968 54 Middle East oil-exporting countries2 905 751 737 710 703 688 666 593 55 Africa 772 588 588 536 595 470 510 522 56 Oil-exporting countries3 152 140 139 128 135 134 141 139 57 All other4 461 417 286 297 338 229 221 337 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 1985 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998833 11998844 S J e a p n t . . - Mar. Apr/ May' June July Aug. Sept.'' U.S. corporate securities STOCKS 1 Foreign purchases 69,770 60,704' 55,035 6,342' 5,147 6,520 6,471 7,181 6,366 4,813 2 Foreign sales 64,360 63,628' 54,263 6,771' 5,104 6,423 6,069 6,522 5,721 4,690 3 Net purchases, or sales (-) 5,410 -2,924' 772 —429' 44 97 402 659 645 123 4 Foreign countries 5,312 -3,039' 790 —386' 35 140 404 559 644 174 5 3,979 -2,975 -859 -583' -160 -285 72 336 364 170 6 -97 -405 -170 -13 24 17 26 -3 -41 -120 7 Germany 1,045 -50 -58 -113 23 39 5 126 76 29 8 Netherlands -109 -315 -322 -129 16 -51 -86 42 18 20 9 Switzerland 1,325 -1,490 -580 -122 -48 -90 49 38 -28 -87 10 United Kingdom 1,799 -647 88 -195 -191 -219 49 104 295 293 11 1,151 1,672' 364 (Y 34 7 -62 66 68 35 17 Latin America and Caribbean 529 493 1,085 80 169 247 132 119 109 -25 13 Middle East1 -808 -2,006' 177 131' -90 53 106 53 35 54 14 Other Asia 395 -372 -30 -41 91 101 174 -23 58 -26 15 Africa 42 -23 17 -13 -1 -8 13 25 9 0 16 Other countries 24 171 36 39 -6 25 -31 -16 1 -34 17 Nonmonetary international and regional organizations 98 115 -17 -43 88 --4444 --11 110000 1 --5511 BONDS2 18 Foreign purchases 24,000 39,853' 57,901 5,546' 4,562 6,789 5,319 8,502 5,498 7,491 19 Foreign sales 23,097 26,612' 31,897 2,634' 3,135 3,697 3,943 4,254 3,741 3,638 20 Net purchases, or sales (-) 903 13,241' 26,004 2,912' 1,427 3,092 1,376 4,249 1,757 3,853 21 Foreign countries 888 12,944' 25,945 2,962' 1,402 3,230 1,243 3,597 2,069 4,179 7? 909 11,793 24,243 2,951 1,622 2,752 1,199 3,210 1,785 3,949 73 -89 207 221 -10 18 0 -35 -2 169 42 74 Germany 344 1,731 393 -113' 162 -17 13 182 103 152 75 Netherlands 51 93 52 8 -9 -11 -9 -2 25 -4 76 583 644 1,927 483 65 71 93 492 243 154 77 United Kingdom 434 8,520 20,970 2,550 1,294 2,398 1,039 2,391 1,320 3,520 78 123 -76' 32 -(/ 0 44 4 -4 -24 -31 79 Latin America and Caribbean 100 390 223 69 -83 178 27 39 -81 -62 30 Middle East1 -1,161 - l^ -2,005 -139' -509 -119 -507 -265 -80 -187 31 Other Asia 865 1,862 3,426 89 381 372 518 610 465 508 37, Africa 0 1 6 0 0 1 0 3 11 0 33 Other countries 52 0 19 -2' -9 2 1 3 33 1 34 Nonmonetary international and regional organizations 15 297 59 -50 25 -138 113333 665511 --331122 --332266 Foreign securities 35 Stocks, net purchases, or sales (-) -3,765 -1,219- -3,138 -462' -145 100 -174 -550 -213 -224 36 Foreign purchases 13,281 14,597' 13,896 1,395' 1,446 1,764 1,632 1,580 1,689 1,538 37 Foreign sales 17,046 15,8^ 17,034 1,857' 1,591 1,665 1,806 2,130 1,902 1,762 38 Bonds, net purchases, or sales (-) -3,239 -4,131' -3,928 -926' -674 -1,059 -261 -589' -295 -496 39 Foreign purchases 36,333 57,312 57,990 5,698' 5,674 7,448 6,691 7,147' 6,359 8,249 40 Foreign sales 39,572 61,443' 61,919 6,624' 6,348 8,507 6,952 7,736' 6,654 8,745 41 Net purchases, or sales (-), of stocks and bonds .... -7,004 -5,35<K -7,066 -I,38Y -819 -959 -434 -L.L^ -508 -720 42 Foreign countries -6,559 -4,961' -7,584 -728 -1,123 -386 -1,368' -298 -955 43 -5,492 -8,740' -8,350 -1,185' -827 -2,024 -680 -1,185' -858 -762 44 -1,328 404' -1,395 -7 (V 22 -96 -157 -783 36 11 45 Latin America and Caribbean 1,120 2,472 1,681 8' 136 810 73 150 178 118899 46 -855 1,252' 396 99 -18 201 353 418 387 -400 47 141 -107 1 -26 -5 2 13 18 9 -2 48 Other countries -144 -242' 84 -23' -36 -15 14 13 -51 19 49 Nonmonetary international and regional organizations -445 -389 518 -190 --9911 116644 --4499 222299 --221100 223355 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 • January 1986 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1985 1985 11998833 11998844 Country or area S J e a p n t . . - Mar. Apr. May' June July Aug. Sept.? Transactions, net purchases or sales (-) during period1 1 Estimated total2 3,693 21,447r 21,838 -4,387' -4,294' 3,069 5,757 4,786 -3,345 6,905 2 Foreign countries2 3,162 16,444' 24,408 -4,742' 2,219' 4,337 5,757 5,364 1,027 4,357 3 Europe2 6,226 11,081' 5,477 -1,439' 1,798' 686 1,025 975 953 958 4 Belgium-Luxembourg -431 289 483 0 80 101 17 21 92 49 5 Germany2 2,450 2,958 1,704 -1,538 293' 838 415 725 937 294 6 Netherlands 375 454 329 -201 -7 -73 10 148 386 127 7 Sweden 170 46 1,100 1 30 157 775 119 -89 -33 8 Switzerland2 -421 635 913 315' 183 -135 143 -21 72 25 9 United Kingdom 1,966 5,234' -909 287' 174' -865 -96 -761 -82 283 10 Other Western Europe 2,118 1,466 1,858 -303 1,045 663 -239 743 -363 214 11 Eastern Europe 0 0 0 0 0 0 0 0 0 0 12 Canada 699 1,526 110 38 334 113 6 7 -144 106 13 Latin America and Caribbean -212 1,413 3,308 -77' 467' 581 205 156 524 562 14 Venezuela -124 14 112 2 10 -9 80 0 33 2 15 Other Latin America and Caribbean 60 528 1,554 69' 179' 463 123 -7 95 556 16 Netherlands Antilles -149 871 1,642 -149 278 126 2 163 397 4 17 -3,535 2,377 15,145 -3,285' -343' 2,891 4,516 4,307 -416 2,594 18 Japan 2,315 6,062 13,659 179' 1,731' 1,060 2,666 3,752 875 2,253 19 Africa 3 -67 93 1 13 57 10 10 -1 0 20 All other -17 114 275 20' -51 9 -6 -91 111 137 21 Nonmonetary international and regional organizations 535 5,001' -2,571 355 2,075 -1,268 -1 -577 -4,372 2,547 22 International 218 4,610' -2,937 338 1,792 -1,057 -105 -219 -4,400 1,885 23 Latin American regional 0 0 2 0 -3 5 0 0 0 -1 MEMO 24 Foreign countries2 3,162 16,444' 24,408 -4,742' 2,219' 4,337 5,757 5,364 1,027 4,357 25 Official institutions 779 515 7,192 -5,268' -625' 3,530 2,713 1,788 104 1,064 26 Other foreign2 2,382 15,930' 17,215 526' 2,844' 807 3,045 3,575 923 3,293 Oil-exporting countries 27 Middle East3 -5,419 6,277 -1,090 554 -851' 52 1,422 -1 -1,132 -838 28 Africa4 -1 -101 1 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 Oct. 31, 1985 Rate on Oct. 31, 1985 Rate on Oct. 31, 1985 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.0 Aug. 1985 France1 9.13 Oct. 1985 Norway 8.0 June 1983 Belgium. 9.0 Oct. 1985 Germany, Fed. Rep. of 4.0 Aug. 1984 Switzerland 4.0 Mar. 1983 Brazil... 49.0 Mar. 1981 Italy 15.5 Jan. 1985 United Kingdom2. Canada.. 8.77 Oct. 1985 Japan 5.0 Oct. 1983 Venezuela Denmark 7.0 Oct. 1983 Netherlands 5.0 Aug. 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 1985 CCoouunnttrryy,, oorr ttyyppee 11998822 11998833 11998844 Apr. May June July Aug. Sept. Oct. 1 Eurodollars 12.24 9.57 10.75 8.74 8.13 7.60 7.89 8.02 8.14 8.08 2 United Kingdom 12.21 10.06 9.91 12.70 12.61 12.38 12.01 11.42 11.49 11.49 3 Canada 14.38 9.48 11.29 10.15 9.77 9.58 9.33 9.16 9.10 8.73 4 Germany 8.81 5.73 5.96 5.99 5.87 5.66 5.31 4.75 4.64 4.77 5 Switzerland 5.04 4.11 4.35 5.35 5.15 5.14 5.07 4.64 4.59 4.53 6 Netherlands 8.26 5.58 6.08 6.82 6.90 6.58 6.29 5.80 5.72 5.89 7 France 14.61 12.44 11.66 10.49 10.15 10.18 9.97 9.79 9.57 9.29 8 Italy 19.99 18.95 17.08 15.15 14.91 15.00 14.37 14.36 13.95 14.16 9 Belgium 14.10 10.51 11.41 10.09 9.35 8.96 8.95 9.50 9.33 8.97 10 Japan 6.84 6.49 6.32 6.26 6.26 6.30 6.29 6.30 6.31 6.47 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 • January 1986 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1985 CCoouunnttrryy//ccuurrrreennccyy 11998822 11998833 11998844 May June July Aug. Sept. Oct. 1 Australia/dollar1 101.65 90.14 87.937 67.68 66.51 69.95 70.70 68.96 70.25 2 Austria/schilling 17.060 17.968 20.005 21.868 21.532 20.446 19.632 19.949 18.569 3 Belgium/franc 45.780 51.121 57.749 62.572 61.719 58.626 56.543 57.395 53.618 4 Brazil/cruzeiro 179.22 573.27 1841.50 5239.00 5786.00 6236.19 6714.00 7453.33 8203.57 5 Canada/dollar 1.2344 1.2325 1.2953 1.3756 1.3676 1.3526 1.3575 1.3703 1.3667 6 China, P.R./yuan 1.8978 1.9809 2.3308 2.8556 2.8693 2.8809 2.9093 2.9722 3.0782 7 Denmark/krone 8.3443 9.1483 10.354 11.2244 10.9962 10.456 10.1459 10.2906 9.5880 8 Finland/markka 4.8086 5.5636 6.0007 6.4641 6.3660 6.0798 5.9464 6.0140 5.6836 9 France/franc 6.5793 7.6203 8.7355 9.4829 9.3414 8.8513 8.5323 8.6599 8.0641 10 Germany/deutsche mark 2.428 2.5539 2.8454 3.1093 3.0636 2.9083 2.7937 2.8381 2.6446 11 Greece/drachma 66.872 87.895 112.73 137.239 136.00 131.75 131.75 136.74 145.74 12 Hong Kong/dollar 6.0697 7.2569 7.8188 7.7766 7.7698 7.7527 7.7906 7.8043 7.7908 13 India/rupee 9.4846 10.1040 11.348 12.5004 12.441 12.031 11.898 12.126 12.033 14 Ireland/pound1 142.05 124.81 108.64 100.71 102.19 107.79 111.43 109.55 117.00 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 1984.45 1953.92 1900.33 1873.51 1903.42 1785.43 17 Japan/yen 249.06 237.55 237.45 251.73 248.84 241.14 237.46 236.53 214.68 18 MalaysiaAinggit 2.3395 2.3204 2.3448 2.4759 2.4685 2.4696 2.4644 2.4841 2.4529 19 Mexico/peso 72.990 155.01 192.31 254.8182 294.22 346.70 339.78 373.02 407.30 20 Netherlands/guilder 2.6719 2.8543 3.2083 3.5097 3.4535 3.2732 3.1429 3.1921 2.9819 21 New Zealand/dollar1 75.101 66.790 57.837 45.197 45.949 49.826 53.564 53.285 56.931 22 Norway/krone 6.4567 7.3012 8.1596 8.9442 8.8255 8.4338 8.2487 8.3337 7.9099 23 Philippines/peso 8.5324 11.0940 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Portugal/escudo 80.101 111.610 147.70 177.545 176.15 169.77 167.34 172.5 164.59 25 Singapore/dollar 2.1406 2.1136 2.1325 2.2228 2.2291 2.2109 2.2191 2.2268 2.1387 26 South Africa/rand1 92.297 89.85 69.534 50.18 50.54 51.07 43.07 39.49 38.38 27 South Korea/won 731.93 776.04 807.91 792.56 875.00 876.46 885.09 847.46 894.49 28 Spain/peseta 110.09 143.500 160.78 175.397 173.42 167.97 164.49 168.91 161.712 29 Sri Lanka/rupee 20.756 23.510 25.428 27.404 27.433 27.327 27.377 27.430 27.421 30 Sweden/krona 6.2838 7.6717 8.2706 8.9895 8.8565 8.4703 8.3106 8.3907 7.9557 31 Switzerland/franc 2.0327 2.1006 2.3500 2.6150 2.5721 2.4060 2.2962 2.3749 2.1692 32 Taiwan/dollar n.a. n.a. 39.633 39.906 39.857 40.136 40.501 40.465 40.195 33 Thailand/baht 23.014 22.991 23.582 27.554 27.433 27.053 26.889 27.050 26.569 34 United Kingdom/pound1 174.80 151.59 133.66 124.83 128.08 138.07 138.40 136.42 142.15 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 116.57 125.34 138.19 149.92 147.71 140.94 137.55 139.14 130.71 1. Value in U.S. cents. NOTE. Averages of certified noon buying rates in New York for cable transfers. 2. Index of weighted-average exchange value of U.S. dollar against currencies Data in this table also appear in the Board's G.5 (405) release. For address, see of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 inside front cover. global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see "Index of the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on p. 700 of the August 1978 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 1985 All SPECIAL TABLES Published Irregulary, 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, September 30, 1984 April 1985 A74 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1984. August 1985 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1985 November 1985 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1985 January 1986 A70 Terms of lending at commercial banks, February 1985 June 1985 A70 Terms of lending at commercial banks, May 1985 August 1985 A70 Terms of lending at commercial banks, August 1985 November 1985 A70 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • January 1986 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 1985' 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 284,847 226,934 57,913 202,854 5,464 47,712 14,260 5,948 8,609 2 Cash and due from depository institutions 65,051 58,952 6,099 55,064 117 6,024 2,943 311 593 3 Currency and coin (U.S. and foreign) 22 20 2 16 0 2 2 1 1 4 Balances with Federal Reserve Banks 1,349 1,293 56 1,168 26 32 66 41 15 5 Balances with other central banks 64 55 10 53 4 0 1 0 5 6 Demand balances with commercial banks in United States 1,114 935 178 848 24 114 44 22 62 7 All other balances with depository institutions in United States and with banks in foreign countries 62,249 56,407 5,842 52,752 61 5,867 2,821 245 504 8 Time and savings balances with commercial banks in United States 33,607 30,184 3,422 28,061 37 3,431 1,676 150 252 9 Balances with other depository institutions in United States 200 144 55 139 2 1 0 5 53 10 Balances with banks in foreign countries 28,443 26,079 2,364 24,551 22 2,435 1,145 90 200 11 Foreign branches of U.S. banks 2,171 2,109 62 2,068 5 45 40 0 13 12 Other banks in foreign countries 26,272 23,970 2,302 22,483 17 2,390 1,105 90 187 13 Cash items in process of collection 253 241 12 228 0 10 9 2 4 14 Total securities, loans, and lease financing receivables .... 159,273 123,345 35,927 107,013 4,166 28,364 10,223 3,422 6,084 15 Total securities, book value 13,314 11,522 1,792 10,820 117 1,609 488 43 237 16 U.S. Treasury 3,908 3,704 204 3,460 75 61 194 19 100 17 Obligations of other U.S. government agencies and corporations 571 558 13 542 0 17 0 12 0 18 Obligations of states and political subdivisions in United States 86 75 12 62 0 0 12 1 11 19 Other bonds, notes, debentures, and corporate stock .. 8,749 7,185 1,564 6,758 42 1,530 283 11 126 20 Federal funds sold and securities purchased under agreements to resell 8,379 6,848 1,531 6,558 928 509 221 42 122 By holder 21 Commercial banks in United States 6,578 5,610 968 5,388 508 419 153 42 68 22 Others 1,801 1,237 563 1,170 419 90 67 0 54 By type 23 One-day maturity or continuing contract 8,031 6,501 1,530 6,258 928 508 174 42 122 24 Securities purchased under agreements to resell 104 54 50 43 50 0 0 12 0 25 Other 7,927 6,447 1,480 6,215 878 508 174 30 122 26 Other securities purchased under agreements to resell 348 346 1 300 0 1 47 0 0 27 Total loans, gross 146,079 111,908 34,171 96,269 4,053 26,788 9,740 3,380 5,849 28 LESS: Unearned income on loans 120 85 35 76 4 33 4 1 2 29 EQUALS: Loans, net 145,958 111,823 34,136 96,193 4,049 26,755 9,735 3,378 5,847 Total loans, gross, by category 30 Real estate loans 5,368 3,286 2,081 2,429 11 1,296 376 195 1,060 31 Loans to financial institutions 54,432 41,593 12,838 36,757 902 11,869 3,459 571 874 32 Commercial banks in United States 27,957 20,323 7,634 17,843 312 7,760 1,555 299 189 33 U.S. branches and agencies of other foreign banks .. 23,638 16,293 7,345 13,968 309 7,481 1,480 246 155 34 Other commercial banks 4,320 4,030 290 3,875 3 279 76 53 34 35 Banks in foreign countries 23,326 18,271 5,055 16,624 569 3,945 1,263 271 653 36 Foreign branches of U.S. banks 1,522 1,279 243 1,168 109 149 96 0 0 37 Other 21,803 16,992 4,811 15,456 460 3,796 1,168 271 653 38 Other financial institutions 3,149 2,999 149 2,290 22 165 640 1 32 39 Loans for purchasing or carrying securities 2,215 2,135 80 2,063 0 151 0 2 0 40 Commercial and industrial loans 67,392 52,146 15,246 43,137 2,019 11,438 5,410 2,353 3,036 41 U.S. addressees (domicile) 43,951 33,599 10,351 25,920 200 8,839 4,881 1,740 2,372 42 Non-U.S. addressees (domicile) 23,442 18,547 4,895 17,218 1,819 2,599 529 613 664 43 Loans to individuals for household, family, and other personal expenditures 303 266 36 225 2 34 12 21 9 44 All other loans 16,369 12,481 3,889 11,659 1,119 2,000 483 237 871 45 Loans to foreign governments and official institutions 15,205 11,493 3,712 10,803 1,105 1,863 446 168 819 46 Other 1,164 988 177 856 14 138 37 69 51 47 Lease financing receivables 0 0 0 0 0 0 0 0 0 48 All other assets 52,144 37,789 14,356 34,219 253 12,814 874 2,174 1,810 49 Customers' liability on acceptances outstanding 19,755 14,715 5,040 14,149 23 5,054 227 225 78 50 U.S. addressees (domicile) 12,679 8,339 4,340 7,943 6 4,413 222 71 25 51 Non-U.S. addressees (domicile) 7,076 6,376 700 6,206 17 642 5 154 53 52 Net due from related banking institutions6 26,057 18,129 7,928 15,672 89 6,643 316 1,832 1,504 53 Other 6,332 4,945 1,388 4,398 141 1,117 331 118 228 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A71 4.30 Continued Millions of dollars 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 284,847 226,934 57,913 202,854 5,464 47,712 14,260 5,948 8,609 55 Total deposits and credit balances 154,167 132,020 22,146 121,615 1,917 18,615 5,067 3,308 3,644 56 Individuals, partnerships, and corporations 43,625 39,491 4,133 33,623 126 1,726 2,168 2,735 3,248 57 U.S. addressees (domicile) 23,514 23,417 97 18,470 10 430 1,953 2,615 37 58 Non-U.S. addressees (domicile) 20,111 16,074 4,037 15,153 116 1,296 215 120 3,211 59 U.S. government, states, and political subdivisions in United States 66 66 0 23 0 2 12 2299 00 60 All other 110,476 92,463 18,013 87,968 1,792 16,887 2,888 545 396 61 Foreign governments and official institutions .... 7,522 7,048 474 6,872 273 157 25 31 164 62 Commercial banks in United States 46,913 35,951 10,962 33,679 846 10,648 1,416 258 66 63 U.S. branches and agencies of other foreign banks 37,847 29,013 8,833 27,240 471 8,857 1,051 119966 3311 64 Other commercial banks in United States 9,066 6,938 2,128 6,439 374 1,790 365 62 35 65 Banks in foreign countries 55,711 49,170 6,542 47,161 661 6,051 1,437 249 154 66 Foreign branches of U.S. banks 7,539 6,031 1,508 5,450 265 1,389 338 81 15 67 Other banks in foreign countries 48,173 43,139 5,034 41,711 396 4,661 1,099 168 138 68 Certified and officers' checks, travelers checks, and letters of credit sold for cash 330 295 35 256 12 31 10 7 1133 69 Demand deposits 3,595 3,364 231 3,065 12 92 129 109 189 70 Individuals, partnerships, and corporations 2,195 2,055 140 1,837 0 55 113 68 123 71 U.S. addressees (domicile) 1,298 1,298 0 1,101 0 27 109 61 0 72 Non-U.S. addressees (domicile) 897 757 140 735 0 28 3 7 123 73 U.S. government, states, and political subdivisions in United States 4 4 0 3 0 00 00 00 00 74 All other 1,396 1,304 91 1,225 12 37 16 41 66 75 Foreign governments and official institutions .... 297 290 6 256 0 1 2 31 5 76 Commercial banks in United States 116 91 25 87 0 1 1 2 25 77 U.S. branches and agencies of other foreign banks 8 8 0 8 0 00 00 1 00 78 Other commercial banks in United States 107 82 25 80 0 1 1 11 25 79 Banks in foreign countries 653 629 24 625 0 4 2 00 23 80 Certified and officers' checks, travelers checks, and letters of credit sold for cash 330 295 35 256 12 31 10 7 1133 81 Time deposits 148,987 127,476 21,511 117,602 1,743 18,379 4,849 3,114 3,301 82 Individuals, partnerships, and corporations 40,054 36,366 3,688 30,948 49 1,529 1,965 2,581 2,982 83 U.S. addressees (domicile) 21,509 21,509 1 16,951 0 323 1,759 2,476 11 84 Non-U.S. addressees (domicile) 18,544 14,857 3,687 13,997 49 1,206 206 105 22,,998811 85 U.S. government, states, and political subdivisions in United States 62 62 0 2200 0 2 1111 2288 00 86 All other 108,871 91,048 17,823 86,634 1,694 16,848 2,872 504 319 87 Foreign governments and official institutions .... 7,145 6,737 408 6,595 225 155 22 0 147 88 Commercial banks in United States 46,776 35,852 10,923 33,585 833 10,646 1,415 256 41 89 U.S. branches and agencies of other foreign banks 37,837 29,005 8,832 27,232 471 88,,885577 1,051 119955 3311 90 Other commercial banks in United States 8,939 6,848 2,091 6,352 362 1,789 365 61 10 91 Banks in foreign countries 54,950 48,458 6,492 46,454 636 6,047 1,434 248 130 92 Savings deposits 1,136 998 137 768 0 90 90 86 102 93 Individuals, partnerships, and corporations 1,135 998 137 768 0 90 90 8866 102 94 U.S. addressees (domicile) 570 570 0 378 0 29 84 7788 0 95 Non-U.S. addressees (domicile) 566 428 137 390 0 61 5 8 102 96 U.S. government, states, and political subdivisions in United States 0 0 0 00 0 00 00 00 00 97 All other 0 0 0 0 0 0 0 0 0 98 Credit balances 450 182 267 180 163 54 0 0 53 99 Individuals, partnerships, and corporations 240 72 168 70 77 52 0 0 41 100 U.S. addressees (domicile) 136 41 96 40 9 51 0 0 36 101 Non-U.S. addressees (domicile) 104 31 73 31 67 1 0 0 5 102 U.S. government, states, and political subdivisions in United States 0 0 0 00 00 00 00 00 00 103 All other 209 110 99 110 86 1 0 0 12 104 Foreign governments and official institutions .... 80 20 60 20 48 1 0 0 12 105 Commercial banks in United States 21 8 13 7 13 1 0 0 0 106 U.S. branches and agencies of other foreign banks 1 0 1 0 0 00 00 00 00 107 Other commercial banks in United Stales 20 7 13 7 12 1 0 0 0 108 Banks in foreign countries 108 82 25 82 25 0 0 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • January 1986 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 1985'—Continued Millions of dollars 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 109 Federal funds purchased and securities sold under agreements to repurchase 29,897 23,340 6,556 21,872 530 6,082 994 264 115544 By holder 110 Commercial banks in United States 25,528 19,392 6,135 18,142 247 5,969 787 264 118 111 Others 4,369 3,948 421 3,730 283 113 207 0 37 By type 112 One-day maturity or continuing contract 28,610 22,055 6,555 20,708 530 6,078 876 264 154 113 Securities sold under agreements to repurchase .. 2,668 2,569 99 2,553 89 19 7 0 0 114 Other 25,942 19,486 6,456 18,155 441 6,059 869 264 154 115 Other securities sold under agreements to repurchase 1,287 1,286 1 1,164 0 4 118 0 0 116 Other liabilities for borrowed money 38,289 23,919 14,371 21,657 1,695 12,062 1,333 473 1,068 117 Owed to banks 36,031 21,887 14,143 19,778 1,684 11,845 1,189 466 1,068 118 U.S. addressees (domicile) 34,812 20,973 13,839 18,916 1,630 11,836 1,170 432 827 119 Non-U.S. addressees (domicile) 1,219 915 304 862 54 9 19 34 241 120 Owed to others 2,259 2,031 228 1,879 11 217 145 7 0 121 U.S. addressees (domicile) 2,082 1,864 218 1,712 11 207 145 7 0 122 Non-U.S. addressees (domicile) 177 167 10 167 0 10 0 0 0 123 All other liabilities 62,494 47,654 14,840 37,710 1,321 10,952 6,865 1,903 3,742 124 Acceptances executed and outstanding 22,198 16,923 5,275 16,334 10 5,301 229 244 79 125 Net due to related banking institutions6 35,590 26,881 8,708 17,878 1,169 4,988 6,431 1,569 3,554 126 Other 4,706 3,850 856 3,498 142 663 204 90 109 MEMO 127 Time deposits of $100,000 or more 113,505 94,070 19,435 84,530 107 18,166 4,787 2,993 2,923 128 Certificates of deposit (CDs) in denominations of $100,000 or more 33,906 31,819 2,087 26,576 0 1,310 2,019 2,504 1,497 129 Other 7799,,559999 62,252 17,348 57,954 107 16,856 2,768 489 1,425 130 Savings deposits authorized for automatic transfer and NOW accounts 96 58 38 40 0 14 6 8 28 131 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 11,581 11,552 29 9,828 0 194 515 1,019 2255 133 Acceptances refinanced with a U.S.-chartered bank .. 3,117 2,155 962 1,880 73 992 0 172 0 134 Statutory or regulatory asset pledge requirement 48,357 46,882 1,475 46,211 1,393 143 552 21 36 135 Statutory or regulatory asset maintenance requirement 20,649 20,390 259 5,863 0 105 11,916 2,508 256 136 Commercial letters of credit 9,844 7,007 2,837 6,381 137 2,5% 213 278 239 137 Standby letters of credit, total 39,632 33,456 6,177 28,767 112 5,387 3,235 702 1,430 138 U.S. addressees (domicile) 36,030 30,526 5,504 26,090 17 4,935 3,067 673 1,248 139 Non-U.S. addressees (domicile) 3,602 2,930 673 2,677 95 451 169 29 182 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit) 6,350 6,011 339 5,248 0 384 502 114 102 141 Holdings of commercial paper included in total gross loans 443 218 225 190 3 237 0 0 14 142 Holdings of acceptances included in total commercial and industrial loans 4,635 3,309 1,325 3,202 45 1,283 76 18 10 143 Immediately available funds with a maturity greater than one day (included in other liabilities for borrowed money) 28,528 18,666 9,862 16,816 1,366 8,593 1,147 313 293 144 Gross due from related banking institutions6 105,285 85,416 19,869 78,577 900 16,944 3,199 2,949 2,716 145 U.S. addressees (domicile) 25,642 18,286 7,356 14,236 159 6,222 1,377 2,385 1,262 146 Branches and agencies in the United States 24,933 17,828 7,105 13,815 137 5,979 1,358 2,383 1,261 147 In the same state as reporter 2,996 2,151 846 2,107 59 760 0 0 70 148 In other states 21,937 15,678 6,259 11,708 78 5,219 1,358 2,383 1,191 149 U.S. banking subsidiaries7 709 458 251 422 21 244 19 2 1 150 Non-U.S. addressees (domicile) 79,643 67,130 12,513 64,341 741 10,721 1,821 564 1,454 151 Head office and non-U.S. branches and agencies. 77,434 65,375 12,059 62,624 736 10,441 1,786 564 1,283 152 Non-U.S. banking companies and offices 2,209 1,755 454 1,717 5 280 36 0 171 153 Gross due to related banking institutions6 114,818 94,169 20,649 80,783 1,980 15,289 9,314 2,685 4,766 154 U.S. addressees (domicile) 25,969 18,844 7,125 11,544 54 4,094 4,524 2,038 3,715 155 Branches and agencies in the United States 25,338 18,401 6,937 11,223 54 3,969 4,413 2,027 3,653 156 In the same state as reporter 2,718 1,947 770 1,904 29 722 0 1 63 157 In other states 22,621 16,454 6,167 9,319 25 32,47 4,413 2,027 3,590 158 U.S. banking subsidiaries7 630 443 188 322 0 126 110 10 62 159 Non-U.S. addressees (domicile) 88,849 75,325 13,524 69,238 1,927 11,194 4,790 648 1,051 160 Head office and non-U.S. branches and agencies. 86,008 72,691 13,317 66,943 1,863 11,106 4,478 645 973 161 Non-U.S. banking companies and offices 2,841 2,634 207 2,2% 64 88 313 2 78 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 Continued Millions of dollars All states2 New York Other states2 IItteemm ffoo CC rr aa nn ll ii ii-- aa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall"" bbrraanncchheess Branches Agencies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets 283,997 225,150 58,847 200,714 5,498 48,738 14,416 6,082 8,549 163 Cash and due from depository institutions 63,664 57,627 6,037 53,600 123 6,130 2,985 310 517 164 Federal funds sold and securities purchased under agreements to resell 7,423 6,185 1,239 5,876 815 347 230 55 101 165 Total loans 140,718 106,915 33,802 91,144 3,952 26,516 9,907 3,382 5,818 166 Loans to banks in foreign countries 23,062 18,198 4,864 16,525 482 3,833 1,316 246 660 167 Total deposits and credit balances 153,455 131,457 21,998 120,908 1,738 18,651 5,206 3,401 3,552 168 Time CDs in denominations of $100,000 or more 34,585 32,485 22,,110000 27,064 0 1,321 2,057 2,637 1,506 169 Federal funds purchased and securities sold under agreements to repurchase 25,836 19,651 6,185 17,981 482 5,888 1,088 271 126 170 Other liabilities for borrowed money 38,526 23,867 14,659 21,665 1,755 12,086 1,307 459 1,254 171 Number of reports filed8 463 294 169 188 24 121 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.ll statistical release, gross balances were included in total assets and total Banks." This form was first used for reporting data as of June 30, 1980. From liabilities. Therefore, total asset and total liability figures in this table are not November 1972 through May 1980, U.S. branches and agencies of foreign banks comparable to those in the G.ll tables. had filed a monthly FR 886a report. Aggregate data from that report were 6. "Related banking institutions" includes the foreign head office and other available through the Federal Reserve statistical release G.ll, last issued on U.S. and foreign branches and agencies of the bank, the bank's parent holding July 10, 1980. Data in this table and in the G. 11 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 almost all of the assets and liabilities reported in of U.S.-chartered commercial banks, of Edge Act and Agreement corporations, California. and of New York State (Article XII) investment companies. 5. Total assets and total liabilities include net balances, if any, due from or due 8. In some cases two or more offices of a foreign bank within the same to related banking institutions in the United States and in foreign countries (see metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 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 BOB STAHLY MOORE, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board NAOMI P. SALUS, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director MICHAEL BRADFIELD, General Counsel EDWARD C. ETTIN, Deputy Director J. VIRGIL MATTINGLY, JR., Deputy General Counsel MICHAEL J. PRELL, Deputy Director RICHARD M. ASHTON, Associate General Counsel JOSEPH S. ZEISEL, Deputy Director OLIVER IRELAND, Associate General Counsel JARED J. ENZLER, Associate Director RICKI TIGERT, Assistant General Counsel DAVID E. LINDSEY, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel ELEANOR J. STOCKWELL, Associate Director THOMAS D. SIMPSON, Deputy Associate Director LAWRENCE SLIFMAN, Deputy Associate Director OFFICE OF THE SECRETARY HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director WILLIAM W. WILES, Secretary ROBERT M. FISHER, Assistant Director BARBARA R. LOWREY, Associate Secretary DAVID B. HUMPHREY, Assistant Director JAMES MCAFEE, Associate Secretary SUSAN J. LEPPER, Assistant Director RICHARD D. PORTER, Assistant Director PETER A. TINSLEY, Assistant Director DIVISION OF CONSUMER LEVON H. GARABEDIAN, Assistant Director AND COMMUNITY AFFAIRS (Administration) GRIFFITH L. GARWOOD, Director JERAULD C. KLUCKMAN, Associate Director DIVISION OF INTERNATIONAL FINANCE GLENN E. LONEY, Assistant Director DOLORES S. SMITH, Assistant Director EDWIN M. TRUMAN, Director LARRY J. PROMISEL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director DIVISION OF BANKING DAVID H. HOWARD, Deputy Associate Director SUPERVISION AND REGULATION ROBERT F. GEMMILL, Staff Adviser PETER HOOPER III, Assistant Director WILLIAM TAYLOR, Director KAREN H. JOHNSON, Assistant Director THOMAS E. CIMENO, JR., Deputy Director' RALPH W. SMITH, JR., Assistant Director FREDERICK R. DAHL, Associate 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. SUSS AN, 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

A75 and Official Staff EMMETT J. RICE MARTHA R. SEGER OFFICE OF DIVISION OF INFORMATION SERVICES STAFF DIRECTOR FOR MANAGEMENT WILLIAM R. JONES, Director S. DAVID FROST, Staff Director STEPHEN R. MALPHRUS, Assistant Director EDWARD T. MULRENIN, Assistant Staff Director RICHARD J. MANASSERI, Assistant Director CHARLES L. HAMPTON, Senior Technical Adviser WILLIAM C. SCHNEIDER, JR., Assistant Director PORTIA W. THOMPSON, Equal Employment Opportunity Programs Officer OFFICE OF STAFF DIRECTOR FOR FEDERAL RESERVE BANK ACTIVITIES DIVISION OF PERSONNEL THEODORE E. ALLISON, Staff Director DAVID L. SHANNON, Director JOSEPH W. DANIELS, SR., Adviser, Equal Employment JOHN R. WEIS, Assistant Director Opportunity Programs, Federal Reserve System CHARLES W. WOOD, Assistant Director DIVISION OF FEDERAL RESERVE OFFICE OF THE CONTROLLER BANK OPERATIONS GEORGE E. LIVINGSTON, Controller CLYDE H. FARNSWORTH, JR., Director BRENT L. BOWEN, Assistant Controller ELLIOTT C. MCENTEE, Associate Director DAVID L. ROBINSON, Associate Director C. WILLIAM SCHLEICHER, JR., Associate Director DIVISION OF SUPPORT SERVICES WALTER ALTHAUSEN, Assistant Director CHARLES W. BENNETT, Assistant Director ROBERT E. FRAZIER, Director ANNE M. DEBEER, Assistant Director WALTER W. KREIMANN, Associate Director JACK DENNIS, JR., Assistant Director GEORGE M. LOPEZ, Assistant Director EARL G. HAMILTON, Assistant Director WILLIAM E. PASCOE III, Assistant Director FLORENCE M. YOUNG, Adviser OFFICE OF COMPUTING AND INFORMATION SERVICES ALLEN E. BEUTEL, Executive Director DIVISION OF COMPUTING SERVICES BRUCE M. BEARDSLEY, Director THOMAS C. JUDD, Assistant Director ELIZABETH B. RIGGS, Assistant Director ROBERT J. ZEMEL, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • January 1986 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman E. GERALD CORRIGAN, Vice Chairman ROBERT P. BLACK PRESTON MARTIN MARTHA R. SEGER ROBERT P. FORRESTAL J. CHARLES PARTEE HENRY C. WALLICH SILAS KEEHN EMMETT J. RICE 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 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 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 LLOYD P. JOHNSON, 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

A77 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

A78 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 address, $2.00 each. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY TIONS. 1984. 120 pp. UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one ANNUAL REPORT. address, $1.50 each. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or THE BANK HOLDING COMPANY MOVEMENT TO 1978: A $2.00 each in the United States, its possessions, Canada, COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to and Mexico; 10 or more of same issue to one address, one address, $2.25 each. $18.00 per year or $1.75 each. Elsewhere, $24.00 per FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 year or $2.50 each. each; 10 or more to one address, $1.50 each. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; of Part I only) 1976. 682 pp. $5.00. 10 or more to one address, $1.25 each. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. 1,168 pp. $15.00. $13.50 each. ANNUAL STATISTICAL DIGEST SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: 1974-78. 1980. 305 pp. $10.00 per copy. REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL 1981. 1982. 239 pp. $ 6.50 per copy. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. 1982. 1983. 266 pp. $ 7.50 per copy. FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- 1983. 1984. 264 pp. $11.50 per copy. ed at least monthly. (Requests must be prepaid.) 1984. 1985. 254 pp. $12.50 per copy. Consumer and Community Affairs Handbook. $60.00 per FEDERAL RESERVE CHART BOOK. Issued four times a year in year. February, May, August, and November. Subscription Monetary Policy and Reserve Requirements Handbook. includes one issue of Historical Chart Book. $7.00 per $60.00 per year. year or $2.00 each in the United States, its possessions, Securities Credit Transactions Handbook. $60.00 per year. Canada, and Mexico. Elsewhere, $10.00 per year or Federal Reserve Regulatory Service. 3 vols. (Contains all $3.00 each. three Handbooks plus substantial additional material.) HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- $175.00 per year. tion to the Federal Reserve Chart Book includes one Rates for subscribers outside the United States are as issue. $1.25 each in the United States, its possessions, follows and include additional air mail costs: Canada, and Mexico; 10 or more to one address, $1.00 Federal Reserve Regulatory Service, $225.00 per year. each. Elsewhere, $1.50 each. Each Handbook, $75.00 per year. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. the United States, its possessions, Canada, and Mexico; WELCOME TO THE FEDERAL RESERVE. 10 or more of same issue to one address, $13.50 per year PROCESSING AN APPLICATION THROUGH THE FEDERAL REor $.35 each. Elsewhere, $20.00 per year or $.50 each. SERVE SYSTEM. August 1985. 30 pp. THE FEDERAL RESERVE ACT, as amended through August 31, THE MONETARY AUTHORITY OF THE FEDERAL RESERVE, 1985. with an appendix containing provisions of certain May 1984. (High School Level.) other statutes affecting the Federal Reserve System. 576 WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. pp. $7.00. 93 pp. $2.50 each. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT XIII AMERI- ERAL RESERVE SYSTEM. CAN-GERMAN BIENNIAL CONFERENCE, March 1985. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- REMARKS BY CHAIRMAN PAUL A. VOLCKER, TO THE EMPIRE NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Each CLUB OF CANADA AND THE CANADIAN CLUB OF TOvolume, $3.00; 10 or more to one address, $2.50 each. RONTO, October 28, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 CONSUMER EDUCATION PAMPHLETS 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- Short pamphlets suitable for classroom use. Multiple copies TWEEN EXCHANGE RATES AND INTERVENTION: A available without charge. REVIEW OF THE TECHNIQUES AND LITERATURE, by Kenneth Rogoff. October 1983. 15 pp. Alice in Debitland 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- Consumer Handbook on Adjustable Rate Mortgages VENTION, AND INTEREST RATES: AN EMPIRICAL IN- Consumer Handbook to Credit Protection Laws VESTIGATION, by Bonnie E. Loopesko. November The Equal Credit Opportunity Act and . . . Credit Rights in 1983. Out of print. Housing 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Fair Credit Billing INTERVENTION: A REVIEW OF THE LITERATURE, by Federal Reserve Glossary Ralph W. Tryon. October 1983. 14 pp. Guide to Federal Reserve Regulations 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET How to File A Consumer Credit Complaint, INTERVENTION: APPLICATIONS TO CANADA, GERMA- If You Borrow To Buy Stock NY, AND JAPAN, by Deborah J. Danker, Richard A. If You Use A Credit Card Haas, Dale W. Henderson, Steven A. Symansky, and Ralph W. Tryon. April 1985. 27 pp. Instructional Materials of the Federal Reserve System Series on the Structure of the Federal Reserve System 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- The Board of Governors of the Federal Reserve System MY, by Darrell Cohen and Peter B. Clark. January The Federal Open Market Committee 1984. 16 pp. Out of print. Federal Reserve Bank Board of Directors 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Federal Reserve Banks FINANCIAL DEREGULATION, INTERSTATE BANKING, Organization and Advisory Committees AND FINANCIAL SUPERMARKETS, by Stephen A. U.S. Currency Rhoades. February 1984. Out of print. 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 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- BANKS, 1960-83, by Stephen A. Rhoades. December 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 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- SURVEY EVIDENCE, by Frederick J. Schroeder. April 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- 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- VENTION: JANUARY-MARCH 1975, by Margaret L. ING AND EQUAL CREDIT OPPORTUNITY LAWS, by Greene. August 1984. 16 pp. Gregory E. Elliehausen and Robert D. Kurtz. May 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 1985. 10 pp. VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- 145. SERVICE CHARGES AS A SOURCE OF BANK INCOME garet L. Greene. October 1984. 40 pp. AND THEIR IMPACT ON CONSUMERS, by Glenn B. 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- Canner and Robert D. Kurtz. August 1985. 31 pp. VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF L. Greene. August 1984. 36 pp. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- by Thomas F. Brady. November 1985. 25 pp. TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) BLES: A REVIEW OF THE LITERATURE, by Victoria S. INDEXES OF THE MONETARY AGGREGATES, by Helen Farrell with Dean A. DeRosa and T. Ashby McCown. T. Farr and Deborah Johnson. December 1985. 42 pp. January 1984. Out of print. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- DEUTSCHE MARK INTERVENTION, by Laurence R. TION RESULTS, by Flint Brayton and Peter B. Clark. Jacobson. October 1983. 8 pp. December 1985. 17 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 REPRINTS OF BULLETIN ARTICLES Bank Lending to Developing Countries. 10/84. Most of the articles reprinted do not exceed 12 pages. Survey of Consumer Finances, 1983: A Second Report. 12/84. Union Settlements and Aggregate Wage Behavior in the The Commercial Paper Market since the Mid-Seventies. 6/82. 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. A Revision of the Index of Industrial Production. 7/85. A Financial Perspective on Agriculture. 1/84. Financial Innovation and Deregulation in Foreign Industrial Survey of Consumer Finances, 1983. 9/84. Countries. 10/85. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Index to Statistical Tables References are to pages A3-A73 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21, 70-73 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) BANKERS acceptances, 9, 23, 24 Dividends, corporate, 35 Bankers balances, 18-20 (See also Foreigners) Bonds (See also U.S. government securities) EMPLOYMENT, 45 New issues, 34 Eurodollars, 24 Rates 24 Branch banks, 21, 55, 70-73 FARM mortgage loans, 39 Business activity, nonfinancial, 44 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business expenditures on new plant and equipment, 36 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) Federal finance Debt subject to statutory limitation, and types and ownership of gross debt, 30 CAPACITY utilization, 46 Receipts and outlays, 28, 29 Capital accounts Treasury financing of surplus, or deficit, 28 Banks, by classes, 18 Treasury operating balance, 28 Federal Reserve Banks, 10 Federal Financing Bank, 28, 33 Central banks, discount rates, 67 Federal funds, 5, 17, 19, 20, 21, 24, 28 Certificates of deposit, 24 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 38, 39 Commercial banks, 16, 19, 70 Federal Housing Administration, 33, 38, 39 Weekly reporting banks, 19-21 Federal Land Banks, 39 Commercial banks Federal National Mortgage Association, 33, 38, 39 Assets and liabilities, 18-20 Federal Reserve Banks Commercial and industrial loans, 16, 18, 19, 20, 21, 70 Condition statement, 10 Consumer loans held, by type, and terms, 40, 41 Discount rates (See Interest rates) Loans sold outright, 19 U.S. government securities held, 4, 10, 11, 30 Nondeposit funds, 17 Federal Reserve credit, 4, 5, 10, 11 Red estate mortgages held, by holder and property, 39 Federal Reserve notes, 10 Time and savings deposits, 3 Federal Savings and Loan Insurance Corporation—insured Commercial paper, 23, 24, 37 institutions, 26 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 44, 49 Finance companies Consumer installment credit, 40, 41 Assets and liabilities, 37 Consumer prices, 44, 50 Business credit, 37 Consumption expenditures, 51, 52 Loans, 40, 41 Corporations Paper, 23, 24 Nonfinancial, assets and liabilities, 36 Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 65 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 40 (See also Thrift institutions) Flow of funds, 42, 43 Currency and coin, 18 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 21, 70-73 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 68 DEBITS to deposit accounts, 15 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits 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

A82 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 Commercial banks, 18 INCOME, personal and national, 44, 51, 52 Depository institutions, 3, 4, 5, 12 Industrial production, 44, 47 Federal Reserve Banks, 10 Installment loans, 40, 41 U.S. reserve assets, 54 Insurance companies, 26, 30, 39 Residential mortgage loans, 38 Interest rates Retail credit and retail sales, 40, 41, 44 Bonds, 24 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, 23 Savings banks, 26 Time and savings deposits, 8 Savings deposits (See Time and savings deposits) International capital transactions of United States, 53-67 Securities (See specific types) International organizations, 57, 58, 60, 63, 64 Federal and federally sponsored credit agencies, 33 Inventories, 51 Foreign transactions, 65 Investment companies, issues and assets, 35 New issues, 34 Investments (See also specific types) Prices, 25 Banks, by classes, 18, 19, 20, 21, 26 Special drawing rights, 4, 10, 53, 54 Commercial banks, 3, 16, 18-20, 39 State and local governments Federal Reserve Banks, 10, 11 Deposits, 19, 20 Financial institutions, 26, 39 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 45 Ownership of securities issued by, 19, 20, 26 Life insurance companies (See Insurance companies) Rates on securities, 24 Loans (See also specific types) Stock market, selected statistics, 25 Banks, by classes, 18-20 Stocks (See also Securities) Commercial banks, 3, 16, 18-20, 70 New issues, 34 Federal Reserve Banks, 4, 5, 6, 10, 11 Prices, 25 Financial institutions, 26, 39 Insured or guaranteed by United States, 38, 39 Student Loan Marketing Association, 33 MANUFACTURING TAX receipts, federal, 29 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 Margin requirements, 25 Trade, foreign, 54 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 4 Federal funds and repurchase agreements, 5 Treasury deposits, 4, 10, 28 Reserve requirements, 7 Treasury operating balance, 28 Mining production, 48 Mobile homes shipped, 49 UNEMPLOYMENT, 45 Monetary and credit aggregates, 3, 12 U.S. government balances Money and capital market rates, 24 Commercial bank holdings, 18, 19, 20 Money stock measures and components, 3, 13 Treasury deposits at Reserve Banks, 4, 10, 28 Mortgages (See Real estate loans) U.S. government securities Mutual funds, 35 Bank holdings, 18-20, 21, 30 Mutual savings banks, 8, 26, 39, 40 (See also Thrift Dealer transactions, positions, and financing, 32 institutions) Federal Reserve Bank holdings, 4, 10, 11, 30 Foreign and international holdings and transactions, 10, NATIONAL defense outlays, 29 30, 66 National income, 51 Open market transactions, 9 Outstanding, by type and holder, 26, 30 OPEN market transactions, 9 Rates, 24 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, 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

A83 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 George N. Hatsopoulos Robert W. Eisenmenger NEW YORK* 10045 John Brademas E. Gerald Corrigan Clifton R. Wharton, Jr. Thomas M. Timlen Buffalo 14240 Mary Ann Lambertsen 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 (t) 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 A. G. Trammell Fred R. Hen- Jacksonville 32231 JoAnn Smith James D. Hawkins Miami 33152 Sue McCourt Cobb Patrick K. Barron Nashville 37203 Patsy R. Williams Jeffrey J. Wells New Orleans 70161 Sharon A. Perlis Henry H. Bourgaux CHICAGO* 60690 Robert J. Day Silas Keehn (t) Daniel M. Doyle Detroit 48231 Robert E. Brewer 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 William C. Ballard, Jr. James E. Conrad Memphis 38101 J. Rives Neblett Paul I. Black, Jr. MINNEAPOLIS 55480 John B. Davis, Jr. Gary H. Stern Michael W. Wright Thomas E. Gainor Helena 59601 (t) 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 S. Latting William G. Evans Omaha 68102 Kenneth L. Morrison Robert D. Hamilton DALLAS 75222 Robert D. Rogers Robert H. Boykin Bobby R. Inman William H. Wallace El Paso 79999 (t) Joel L. Koonce, Jr. Houston 77252 (t) J.Z. Rowe San Antonio 78295 (t) 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 FtORnAeS dEepRu ty chairmanship and several branch chairmanships had not been determined at the time the BULLETIN went to press. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1984 MMHHii ^^SSSSMM11 ALASKA WWMM KKMMKKMMHH II MMflH © ^ rx YYP LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch * Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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