Federal Reserve Bulletin, 1986-02

VOLUME 72 • NUMBER 2 • FEBRUARY 1986 FEDERAL RESERVE h.>. 'V 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 87 THE USE OF CASH AND TRANSACTION circumstances surrounding the problem at ACCOUNTS BY AMERICAN FAMILIES Bank of New York on November 21, discusses several steps that can provide assur- This article describes the Survey of Currenance that similar episodes do not recur, and cy and Transaction Account Usage and says that, in the long term, opportunities presents preliminary findings on the distrimust be found to alter market practices and bution of payment methods by selected incentives in ways that can strengthen relidemographic groups and of total payments ability and reduce risk while preserving the by the means of payment used; it also liquidity and efficiency of the market, bediscusses survey evidence bearing on cash fore the Subcommittee on Domestic Moneuse, its rate of circulation, and demographic tary Policy of the House Committee on determinants of cash holdings. Banking, Finance and Urban Affairs, December 12, 1985. 109 TREASURY AND FEDERAL RESERVE FOREIGN EXCHANGE OPERATIONS.- 125 William Taylor, Director of the Board's INTERIM REPORT Division of Banking Supervision and Regulation, discusses the possible impact of For the period from August through Octofaulty and fraudulent real estate appraisals ber 1985, the dollar continued the decline on federally insured depository institutions that had begun in early 1985, against a and says that the federal banking agencies background of spreading perceptions that have developed guidelines that will aid in U.S. economic activity was slowing while formalizing and promoting uniformity in the activity abroad was picking up. procedures for classifying problem real estate loans, including Federal Reserve plans 113 INDUSTRIAL PRODUCTION to intensify its scrutiny of loan portfolios, Industrial production rose an estimated 0.4 before the Subcommittee on Commerce, percent in November 1985. Consumer and Monetary Affairs of the House Committee on Government Opera- 115 STATEMENTS TO CONGRESS tions, December 12, 1985. Paul A. Volcker, Chairman, Board of Gov- 128 RECORD OF POLICY ACTIONS OF THE ernors, discusses the operational problems FEDERAL OPEN MARKET COMMITTEE experienced by the Bank of New York on November 21, 1985, resulting from a failure At its meeting on November 4-5, 1985, the of computer system software, and the re- Committee adopted a directive that called sponse of the Federal Reserve Bank of New for maintaining about the current degree of York and says that the effects of the prob- reserve restraint. Given the sensitivity of lem were well contained in terms of market economic and financial conditions and experformance and risk, before the Subcom- change market developments, it was undermittee on Domestic Monetary Policy of the stood that policy would be implemented House Committee on Banking, Finance and with some added degree of day-to-day flexi- Urban Affairs, December 12, 1985. bility. The members expected such an approach to policy implementation to be con- 117 E. Gerald Corrigan, President, Federal Re- sistent with growth of both M2 and M3 at an serve Bank of New York, testifies on the annual rate of about 6 percent for the period Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

from September to December. Over the Proposed changes to the official staff comsame period, Ml was also expected to ex- mentary on Regulations E (Electronic Fund pand at an annual rate of around 6 percent, Transfers) and Z (Truth in Lending). but in light of its very rapid growth in the Changes in Board staff. third quarter, slower growth in this aggregate would be acceptable. Somewhat great- Admission of five state banks to memberer reserve restraint might, and somewhat ship in the Federal Reserve System. lesser restraint would, be acceptable depending on the behavior of the monetary 137 LEGAL DEVELOPMENTS aggregates over the intermeeting period and Various bank holding company, bank sertaking account of appraisals of the strength vice corporation, and bank merger orders; of the business expansion, the performance and pending cases. of the dollar on foreign exchange markets, progress against inflation, and conditions in AI FINANCIAL AND BUSINESS STATISTICS domestic and international credit markets. The members agreed that the intermeeting A3 Domestic Financial Statistics range for the federal funds rate, which A44 Domestic Nonfinancial Statistics provides a mechanism for initiating consul- A53 International Statistics tation of the Committee when its boundaries are persistently exceeded, should be A69 GUIDE TO TABULAR PRESENTATION, left unchanged at 6 to 10 percent. STATISTICAL RELEASES, AND SPECIAL TABLES 134 ANNOUNCEMENTS A70 BOARD OF GOVERNORS AND STAFF Amendment to Regulation D involving changes in reserve requirements. A72 FEDERAL OPEN MARKET COMMITTEE Proposed amendments to Regulations D AND STAFF; ADVISORY COUNCILS and Q to preserve the current treatment of MMDAs and to maintain penalties, in cer- A74 FEDERAL RESERVE BOARD tain circumstances, for early withdrawal of PUBLICATIONS time deposits. All INDEX TO STATISTICAL TABLES Proposed interpretation of Regulation G with regard to debt securities issued by a A19 FEDERAL RESERVE BANKS, BRANCHES, shell corporation that is used as an acquisi- AND OFFICES tion vehicle. A80 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families This article was prepared by Robert B. Avery, quires knowledge of how account holders use Gregory E. Elliehausen, Arthur B. Kennickell, accounts and of how their behavior might be and Paul A. Spindt of the Board's Division of affected by further regulatory changes. Research and Statistics, with the assistance of The Board of Governors of the Federal Re- Garland DeMarco and Julia Springer. serve System commissioned the Survey of Currency and Transaction Account Usage to under- The payments mechanism plays a central role in stand better how cash and other means of supporting economic activity in the United payment are acquired and used. The survey, States. The means of payment in the U.S. mone- which was conducted between May and August tary system are principally cash—currency and 1984, focused on the household sector of the coin—and several categories of checkable depos- U.S. economy. It collected information on the its at financial institutions. Although very good payment practices of families, on the rate of quantitative data are available on these means of expenditure out of deposit accounts with transpayment, major gaps exist in the knowledge of action features, on the use of credit cards, and on how these quantities are acquired and used in the the acquisition and patterns of use of cash. economy. Also, the role of credit cards in con- In this article we first describe the survey sumer expenditures and their relationship to oth- design and initial preparation of the raw data. er means of payment is not well understood. Next we present findings on the distribution of Recent changes in technology and regulation expenditures of selected demographic groups by have afforded households significant opportuni- method of payment and on the distribution of ties to change the methods they use to pay for total payments by the means of payment used. expenditures. For example, money market de- Then we discuss survey evidence bearing on the posit accounts with market interest rates and use of cash, its rate of circulation, and the limited check-writing features did not exist until demographic determinants of cash holdings. Fi- December 1982. The use of electronic payments nally, we summarize our findings. methods and automated teller machines also has grown very rapidly in the past five years. Understanding these changes is important for several THE SURVEY reasons. First, the linkages between monetary aggregates and the overall level of economic The questionnaire for the Survey of Currency activity are key factors in determining the weight and Transaction Account Usage contains two that should be placed on these aggregates in the principal lines of inquiry. The first documents conduct of policy. These linkages are likely to be activity for the preceding month in the main sensitive to the methods households use for checking account of families and in their other making payments. Second, despite a decade of checking, money market, and savings accounts. financial deregulation, some restrictions still re- The questions request information on (1) the main on accounts at depository institutions. De- number and dollar amount of deposits, (2) the termining the effects of these restrictions re- number of withdrawals, (3) the number and dollar amount of cash deposits and withdrawals, (4) NOTE. The data from the Survey of Currency and Transac- the dollar amount of transfers between accounts, tion Account Usage are available on request from the Nationand (5) the dollar amount of investments and al Technical Information Service, 5285 Port Royal Rd., Springfield, Virginia 22161. large expenditures from accounts. Respondents Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • February 1986 were encouraged to consult records. Answers to about other types of transactions—such as credit these questions are used to determine the month- card use and electronic fund transfer services. ly cash use of families and their rates of expendi- Between May and August 1984 a total of 1,946 ture out of accounts with transaction features. telephone interviews were obtained from a ran- The second line of inquiry focuses on the cash domly selected sample of 2,500 families residing inventories of individual respondents. For the in the United States. The respondent was either last time they obtained cash and for their typical the head of the family or a financially knowledgecash acquisition patterns, respondents were able spouse. Appendix A gives a brief descripasked (1) the dollar amount of cash obtained, (2) tion of the survey sample design. The selection the balance on hand just before the acquisition, and interviewing of the respondents and the and (3) the time between cash acquisitions. Re- coding and preliminary editing of the data were spondents were also asked about the rate at performed by the Survey Research Center at the which they spent cash since the last time it was University of Michigan. The results tabulated acquired. The survey, which elicited information here, which are based on an edited and imputed on several standard demographic characteristics version of the data using sampling weights deof the families, also asked several questions scribed in appendix B, are primarily one-way 1. Distribution of total expenditures of families with selected characteristics, by method of payment, 1984 Cash' Credit card Check2 PPrrooppoorr-ttiioonn ooff Mean Mean Mean Mean Mean Mean FFaammiillyy cchhaarraacctteerriissttiicc aallll ffaamm-- monthly share of Families monthly share of Families monthly share of iilliieess ((ppeerr-- expendi- total ex- using this expendi- total ex- using this expendi- total excceenntt)) ture (dol- pendi- method ture (dol- pendi- method ture (dol- pendi- (percent) (percent) lars) tures lars) tures lars) tures Income (dollars) Less than 10,000 24 210 53 17 20 3 62 423 44 10,000-19,999 23 408 40 45 78 6 80 885 54 20,000-29,999 19 541 32 59 154 6 92 1,582 61 30,000-49,999 21 663 29 72 210 8 93 2,418 63 50,000 or more 13 847 18 88 618 10 96 5,355 72 Age of head (years) Less than 35 30 486 40 53 159 6 80 1,383 54 35-44 18 569 31 62 218 7 89 2,454 63 45-54 16 649 37 59 216 7 83 2,368 56 55-64 18 465 38 51 211 8 80 1,823 54 65 or more 17 313 34 33 85 4 84 1,284 62 Race or national origin of head Caucasian3 82 512 32 56 198 7 88 2,002 61 Nonwhite or Hispanic 18 414 55 34 73 4 60 875 41 Education of head Less than 12 years 21 397 53 22 51 3 63 777 44 High school diploma 33 473 40 44 83 4 81 1,386 56 Some college 19 453 30 59 159 6 91 1,920 64 College degree 27 621 24 79 391 10 94 2,986 65 Location Urban 53 457 40 49 145 6 79 1,558 55 Suburban 23 646 30 71 332 10 89 2,4% 60 Rural 24 432 36 40 92 4 84 1,663 60 Marital and work status of head Unmarried In labor force 15 219 44 24 44 4 70 778 53 Not in labor force 23 386 38 50 155 7 79 1,384 54 Married Neither spouse in labor force 10 354 42 38 93 6 77 1,228 52 One spouse in labor force 22 640 37 59 199 6 84 2,202 57 Both spouses in labor force 29 662 29 66 269 7 93 2,545 64 All families 100 494 36 52 175 6 83 1,798 57 1. Cash includes money orders and is used by 100 percent of each 3. Here and in succeeding tables, Hispanics are counted separately family group. from other Caucasians. 2. Checks include personal checks, bank checks, automatic payments, and electronic payments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 89 classifications; they should be viewed as prelimi- mation was collected to estimate the distribution nary to a more formal, multivariate analysis (see of family expenditures during the month precednote 2 in appendix B). ing the survey among three payment methods: (1) cash and money orders, (2) credit cards, and (3) checks. Checks cover all noncurrency with- USE OF TRANSACTION ACCOUNTS drawals from depository institutions and include BY FAMILIES personal checks, bank checks, automatic payments, and electronic payments. The survey provides a rich source from which to Total monthly expenditures for each houseaddress the general payments behavior of each hold using each payment method were calculated family surveyed. In particular, sufficient infor- in the following manner. For each account re- 2. Monthly use of credit cards and main checking accounts of families with selected characteristics, 19841 Credit cards Main checking account Mean Families Families share of Family characteristic owning Owners Mean Mean owning Owners Mean Mean Mean total exusing this size of using this number size of this number of this turnover pendimethod ( m pe e r t c h e o n d t ) charges2 (d c o h l a la rg rs e ) 2 method ( m pe e r t c h e o n d t ) rate3 che o c f k s2 (d c o h ll e a c r k s )2 tures (percent) (percent) (percent)2 Income (dollars) Less than 10,000 32 53 4 36 67 91 3.1 10 116 48 10,000-19,999 67 67 5 49 85 94 6.3 13 120 64 20,000-29,999 79 75 6 63 94 97 4.6 16 138 59 30,000-49,999 87 82 7 52 % 96 4.7 18 166 58 50,000 or more 98 90 13 69 99 95 6.6 24 247 58 Age of head (years) Less than 35 68 78 7 52 83 94 6.0 17 129 61 35-44 78 79 8 50 90 98 7.8 20 147 62 45-54 75 79 8 68 86 96 5.0 18 156 56 55-64 70 72 7 56 83 94 3.8 15 160 60 65 or more 54 62 6 59 92 90 1.8 11 188 69 Race or national origin of respondent Caucasian 73 76 8 57 91 95 5.2 17 150 61 Nonwhite or Hispanic... 49 69 4 47 65 89 3.8 12 174 65 Education of head Less than 12 years 43 52 4 52 69 92 3.6 10 154 65 High school diploma 62 70 5 51 86 93 5.2 15 156 62 Some college 77 77 7 49 92 97 4.3 17 131 62 College degree 91 87 10 64 97 95 6.0 20 163 59 Location Urban 65 75 7 51 83 94 5.2 15 162 62 Suburban 85 83 9 62 93 95 5.4 18 145 57 • Rural 62 64 5 58 88 95 4.2 16 140 64 Marital and work status of head Unmarried In labor force 40 59 4 45 77 89 1.7 10 148 72 Not in labor force 65 78 7 55 83 93 4.6 15 123 63 Married Neither spouse in labor force 62 60 6 54 81 95 2.9 12 170 62 One spouse in labor force 77 77 8 59 89 95 6.5 18 140 58 Both spouses in labor force 83 80 8 57 ; 94 94 6.3 19 178 59 All families 69 75 7 56 86 94 5.0 16 153 61 1. Some of the numbers in this table and in table 3 are based on data $46,000. The median value, particularly for check size, would from only a small number of families. In these cases the averages are probably be more indicative of typical behavior but could not be especially sensitive to extraordinary expenditures. For example, in computed because of the way the data were constructed. table 3 the extremely large value of the average size of checks for the 2. For those using the payment method. savings account of families with income between $30,000 and $50,000 3. Here and in succeeding tables, the ratio of account expenditures can be traced to one family, which purchased an automobile for to the average account balance for all account owners. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • February 1986 3. Monthly use of other checking accounts, money market accounts, and savings accounts by families with selected characteristics, 1984' Other checking accounts Family characteristic Families Average Average size Average share owning this Owners using Turnover of total ( m pe e r t c h e o n d t ) this method rate2 nu ch m e b c e k r s 3 o f ( o d f o c ll h a e rs c ) k 3 ex ( p p e e n rc d e i n tu t) r 3 e s Income (dollars) Less than 10,000 5 46 1.3 184 46 10,000-19,999 11 40 1.1 167 26 20,000-29,999 21 66 1.5 216 28 30,000-49,999 25 60 2.0 297 33 50,000 or more 45 67 2.7 436 26 Age of head (years) Less than 35 17 57 2.1 288 30 35-44 22 63 2.6 300 28 45-54 26 72 2.5 360 25 55-64 19 51 .9 276 40 65 or more 10 50 .7 299 30 Race or national origin of head Caucasian 21 61 1.8 311 29 Nonwhite or Hispanic 7 43 3.5 276 37 Education of head Less than 12 years 6 42 .6 200 33 High school diploma 15 56 2.0 380 36 Some college 20 69 2.1 281 35 College degree 32 61 2.0 300 23 Location Urban 16 60 1.7 279 32 Suburban 24 66 3.1 311 27 Rural 18 52 1.1 379 29 Marital and work status of head Unmarried In labor force 42 .2 144 26 Not in labor force 15 52 2.0 477 33 Married Neither spouse in labor force . 12 38 .7 200 28 One spouse in labor force 23 63 1.6 277 28 Both spouses in labor force... 27 67 2.6 297 30 All families 19 60 2.3 310 30 Family characteristic Money market accounts Income (dollars) Less than 10,000 14 12 177 48 10,000-19,999 24 9 1,311 47 20,000-29,999 28 29 755 27 30,000-49,999 35 18 3,076 46 50,000 or more 59 27 2,303 46 Age of head (years) Less than 35 18 20 1,387 46 35-44 29 19 1,746 44 45-54 33 22 2,307 41 55-64 41 20 2,424 39 65 or more 32 20 1,045 39 Race or national origin of head Caucasian 32 21 1,872 42 Nonwhite or hispanic 14 12 1,219 29 Education of head Less than 12 years 15 13 2,383 27 High school diploma 22 17 1,507 53 Some college 29 19 1,361 40 College degree 48 24 2,052 39 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 91 3. Continued Money market accounts—continued Family characteristic Families Average Average size Average share owning this Owners using Turnover of total ( m pe e r t c h e o n d t ) this method rate2 nu ch m e b c e k r s 3 o f ( o d f o c ll h a e rs c ) k 3 ex ( p p e e n rc d e i n tu t) r 3 e s Location Urban 25 20 1,273 40 Suburban 41 21 2,486 41 Rural 25 18 1,992 47 Marital and work status of head Unmarried In labor force 25 19 1,408 33 Not in labor force 26 18 714 44 Married Neither spouse in labor force . 30 17 2,564 53 One spouse in labor force 32 22 2,062 34 Both spouses in labor force... 31 21 2,255 46 All families 29 20 1,837 41 Family characteristic Savings accounts Income (dollars) Less than 10,000 34 218 34 10,000-19,999 49 270 20 20,000-29,999 62 365 19 30,000-49,999 70 1,9% 27 50,000 or more 68 715 17 Age of head (years) Less than 35 59 476 24 35-44 64 645 21 45-54 58 1,702 19 55-64 44 233 24 65 or more 44 383 23 Race or national origin of head Caucasian 58 877 22 Nonwhite or Hispanic 40 285 22 Education of head Less than 12 years 32 337 31 High school diploma 54 380 21 Some college 60 2,495 25 College degree 68 554 18 Location Urban 53 327 17 Suburban 61 1,918 30 Rural 51 405 22 Marital and work status of head Unmarried In labor force 33 13 .0 3 265 30 Not in labor force 54 14 .1 2 421 22 Married Neither spouse in labor force . 41 4 .0 2 176 12 One spouse in labor force 59 10 .5 4 2,228 28 Both spouses in labor force... 68 14 .1 2 445 18 All families 54 12 .3 2 779 22 1. See table 2, note 1. 2. For those owning the payment method. 3. For those using the payment method. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • February 1986 ported at a financial institution, the current bal- each use cash as the primary means of payment. ance plus cash withdrawals was subtracted from Although the use of all three methods rises in the balance reported for the previous month plus absolute terms with income, education, and the deposits (including interest) to yield total check number of earners in the family, clearly housewithdrawals. Reported interaccount transfers, holds substitute credit cards and checks for cash investments, and purchases of houses were sub- as income rises. Note that the mean monthly tracted from this total. These figures were expenditure and the mean percent of total expensummed over all deposit accounts to yield a ditures in table 1 exhibit very different patterns measure of check withdrawals that conforms across payment methods. This result is explained with the national income accounts definition of by the fact that a significant number of families current expenditure. Note that this definition is do not use credit cards and checks, thus skewing broader than that of current consumption in that the percentages and distributions toward zero. it also includes purchases of nonfinal goods such The typical household uses all three methods of as used cars and lottery tickets. payment, but 14 percent use cash exclusively, Cash expenditures were computed in a similar and about 36 percent of these families use money manner by summing cash withdrawals (including orders for 41 percent of their expenditures (not checks for cash) for all accounts and netting out shown in the table). cash deposited to accounts and cash used for Further insight into payments behavior can be investments or purchases of houses. Cash ob- obtained by examining disaggregated data on tained from other sources and used for expendi- account use. Several different measures of activitures was sometimes estimated from information ty computed for credit cards and for the family's given in the section on currency use; it was main checking account are shown in table 2; added to the total for cash withdrawals. These activity in secondary depository accounts, inprocedures technically produced an estimate of cluding other checking, money market, and saveach family's net withdrawals of cash during the ings accounts, is shown in table 3. As might be month, which would represent the expenditures expected, these data show great variation in the with cash only if the family's cash reserves use of different accounts. Virtually all families remained the same and all new cash were used with a main checking account use it, whereas the for spending. In fact, family currency reserves proportion of families using their other checking, probably change over time, and some cash is money market, and savings accounts during the used to purchase alternative payment methods, sample month was only 60, 20, and 12 percent such as money orders or travelers checks. respectively. When these other accounts are Credit card expenditures were computed by used, however, they typically are used for large summing monthly charges reported on all cards expenditures that constitute a significant proporheld by any family member. Because most credit tion of the family's expenditures. The infrequent card bills are ultimately paid by check, the use of such accounts is consistent with the low measurement of credit card expenditures is likely turnover rate shown for each of them. Other to represent double counting. checking accounts, for example, have a turnover rate less than one-half that of the main checking account. General Payment Patterns A comparison of account use across demographic groups also reveals several differences. The data indicate that all families make some Low-income, less-educated, and nonwhite or cash payments. In terms of dollars, however, Hispanic families are significantly less likely than checks are the main means of payment for the other families to have secondary accounts or to sample as a whole and for all but three demo- use them when they have them. When families in graphic subgroups: families with incomes of less such groups do use secondary accounts, howevthan $10,000, those in which the head has an er, they appear to use them for roughly the same education of less than 12 years, and nonwhite or proportion of their total expenditures as other Hispanic families (table 1). These three groups households. Activity in both main and secondary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 93 checking accounts bears a relationship to income account, and their use of automated teller mathat is worth noting. Both the number of checks chines. and the average size of checks increase at rough- As mentioned, exclusive reliance on cash as a ly the same rate in response to income. Use of method of payment is found primarily among money market and savings accounts shows a lower-income families, but both checking acmuch more erratic relationship to income. Fam- counts and credit cards are widely distributed ilies headed by older individuals or by persons among such families: two-fifths of the lowestoutside the labor force appear to use their sec- income group have checking accounts, and about ondary accounts in roughly the same fashion as one-fourth of that group have both checking other families, but they have much lower turn- accounts and credit cards (table 4). over rates. This finding suggests that these fam- For low-income families with checking acilies tend to carry higher account balances per counts, the proportion of total expenditures dollar of expenditure than other families. Some- made with cash does not differ significantly from what surprisingly, the number of workers in that for middle-income families (table 5). Almarried families appears to bear little relation- though the volume of check and credit-card ship to account activity. The only exception is expenditures among low-income families is relareduced use of other checking accounts for fam- tively low, the distribution of their expenditures ilies in which neither spouse works. among the different methods of payment is simi- Credit card use shows patterns similar to those lar to that of middle-income families. Only in the for depository institution accounts. Low-in- highest-income group does the proportion of excome, less-educated, older, rural, and nonwhite penditures made with cash decline significantly. or Hispanic families are less likely to have credit Table 5 also shows that the proportion of cards or to use them when they do. As in the case expenditures from accounts other than the main of checking account use, the number and average checking account increases with income. In condollar size of credit card transactions rise rough- trast, although the percentage of families using ly in tandem with income. However, despite the credit cards rises with income, the share of total fact that credit cards are widely used by virtually expenditures made with credit cards is nearly every group, they account for a relatively small constant across income groups. proportion of total expenditures. The survey obtained information on the payment of interest and the fees charged on the main checking accounts of families (table 6). The pro- Account Characteristics and portion of families whose main checking account Payment Patterns 4. Distribution of families with selected The results just presented may in part reflect characteristics, by method of payment, 1984 differences in transaction costs or in use of Percent alternative methods of payment for various de- Cash, mographic groups. For example, if payment of Cash check, checking account fees based on the number of Family characteristic Cash and and Total check credit checks written is inversely related to income, card then the greater reliance on cash by lower- Income (dollars) income groups may be explained by their attempt Less than 10,000 .... 33 41 26 100 10,000-19,999 15 21 63 100 to minimize the cost of making payments. Or the 20,000-29,999 6 18 76 100 high proportion of cash expenditures in lower- 30,000-49,999 4 10 86 100 50,000 or more 1 2 97 100 income groups may simply be caused by the Age of head (years) smaller proportion of these groups that own Less than 35 17 19 65 100 35-44 10 15 75 100 checking accounts. To account for such possibil- 45-54 14 14 72 100 ities, we examined the payment practices of 55-64 17 18 66 100 65 or more 8 38 53 100 families having different combinations of pay- All families 14 21 66 100 ment methods, the terms on their main checking Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • February 1986 5. Distribution of total expenditures of families with selected characteristics, by available selected methods of payment, 1984 Percent Checking and other accounts, no Checking and other accounts and credit card credit card FFaammiillyy cchhaarraacctteerriissttiicc Main Main Other Other Credit Cash checking accounts1 Cash checking accounts1 card2 account account Income (dollars) Less than 10,000 24 71 5 23 64 6 7 10,000-19,999 31 66 3 24 60 9 7 20,000-29,999 32 61 7 21 55 16 8 30,000-49,999 16 67 17 20 51 22 7 50,000 or more 12 88 0 12 55 24 9 Age of head (years) Less than 35 33 61 6 20 56 15 9 35-44 26 69 5 16 58 19 7 45-54 23 73 4 18 50 25 7 55-64 20 60 20 17 52 21 10 65 or more 20 56 20 17 58 18 | 7 All families 24 69 7 17 55 20 8 1. Other accounts include other checking accounts, money market 2. Average for families making credit card charges in the month deposit accounts, money market mutual fund accounts, and savings preceding the survey. accounts. pays interest rises from 30 percent in the lowest- The distribution of total expenditures of famincome group to 44 percent in the highest-income ilies with main checking accounts that pay intergroup. The proportion of families that do not pay est is similar to that for families with regular main fees on their main checking account, however, checking accounts (not shown in the tables). does not appear to be related to income except Families that normally pay checking account among those families earning $50,000 or more, fees based on the number of checks written pay for whom the proportion is markedly higher. only a slightly higher share of expenditures with Families headed by individuals aged 65 years or cash than families that normally do not pay fees. more are more likely than other families to have This result, however, can be attributed primarily main checking accounts that pay interest and are to relatively greater cash expenditures in one less likely than other families to pay fees on income group ($10,000-$ 19,999). those accounts. About 42 percent of all families have cards for Distribution of checking account holders with selected characteristics, by type of fee on main checking account, and proportion of such families whose main checking account pays interest, 1984 Percent Usually pays a fee Does not Account Family characteristic usually pay Fee depends Fee depends Fee depends Fee depends pays a fee on account on number on balance on other interest and number balance of checks factors of checks Income dollars Less than 10,000 61 14 8 30 10,000-19,999 58 9 9 38 20,000-29,999 53 12 10 39 30,000-49,999 57 11 10 39 50,000 or more 72 3 7 44 Age of head (years) Less than 35 44 18 11 39 35-44 47 16 14 34 45-54 54 18 6 40 55-64 76 7 5 38 65 or more 86 5 1 40 AO checking account holders . 59 14 38 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 95 7. Proportion of families with selected characteristics that own an ATM card and their frequency of cash withdrawals with the card, 1984 Families Monthly number of Families Monthly number of owning cash withdrawals owning cash withdrawals Family characteristic an ATM with ATM card1 Family characteristic an ATM with ATM card1 card card (percent) Mean Median (percent) Mean Median Marital status of Work status of head respondent Working 47 Married 42 Not working 22 Single male 43 Single female 32 Work status of spouses One spouse working 40 Income (dollars) Both spouses working 49 Less than 10,000 19 10,000-19,999 31 How head is paid2 20,000-29,999 40 Check 43 30,000-49,999 52 Cash 36 50,000 or more 65 Automatic transfer 70 Other 40 Age of head (years) Less than 35 48 How family is paid3 35-44 47 Check4 42 45-54 44 Cash3 28 55-64 34 Automatic transfer6 68 65 or more 21 Other 36 Education of head Method of deposit of Less than 12 years 15 social security High school diploma 33 check7 Some college 50 College degree 58 Check directly deposited . 30 Check not directly deposited 17 Race or national origin of head Caucasian 43 Family holdings of credit Nonwhite or Hispanic 28 cards No credit cards 26 Location One or more credit cards . 47 Urban 39 Suburban 56 All families 42 Rural 28 1. For owners of ATM cards. 5. At least one member of couple paid in cash. 2. For employed family heads. 6. At least one member of couple paid by automatic transfer and 3. For couples with at least one employed member. neither member paid in cash. 4. Neither member of couple paid in cash or by automatic transfer. 7. For families receiving social security income. automated teller machines (ATMs) (table 7). Families that use ATMs appear to make a some- Ownership of ATM cards is positively related to what greater proportion of their expenditures income and higher levels of education and in- with cash, especially families that use ATMs one versely related to age. Single females, nonwhites to three times a month. Particularly noteworthy or Hispanics, and retired heads of families are is the greater use of cash by families with insignificantly less likely than other groups to have comes of $50,000 or more that use ATMs one to ATM cards. Suburban families and families three times a month: these families make 17 whose paychecks or social security checks are percent of their expenditures with cash, whereas deposited automatically are more likely to have families that do not use ATMs or that use ATMs ATM cards, possibly an indication of greater more frequently make only 11 percent of their financial sophistication. expenditures with cash. Nearly half of families with checking accounts have ATM cards, but as shown in table 8, only CASH ACQUISITION AND USE about 30 percent of these families use them. Use of automated teller machines is also positively Cash, which includes currency and coin, is usurelated to income and negatively related to age. ally ill-suited for transactions that involve very Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • February 1986 large sums of money or for which payment at a cash is costly (interest income is forgone, and remote location is required. In other cases, how- there are security risks), individuals have an ever, cash is usually a highly suitable means of incentive to hold a relatively small average suppayment. To use cash, one must maintain an ply that is replenished frequently. On the other inventory of it that one replenishes as payments hand, because cash acquisition is costly ("shoeare made. Because maintaining a large supply of leather" costs are incurred, and fees may be 8. Distribution and use of payment methods of checking account holders with selected characteristics, by use of ATMs, 1984 Percent Has card but does not use ATMs DDDoooeeesss nnnooottt PPrrooppoorr-- Share of total expenditures FFFaaammmiiilllyyy ccchhhaaarrraaacccttteeerrriiissstttiiiccc hhhaaavvveee ttiioonn ooff cccaaarrrddd cchheecckkiinngg Main Other Credit aaccccoouunntt Cash checking hhoollddeerrss account accounts cards Income (dollars) Less than 10,000 72 13 22 64 9 5 m 10,000-19,999 62 14 19 67 4 10 20,000-29,999 57 15 20 56 16 8 30,000-49,999 46 21 17 48 29 6 50,000 or more 34 26 11 53 28 8 Age of head (years) Less than 35 44 13 16 56 21 7 35-44 50 14 16 53 22 9 45-54 50 24 16 50 26 8 55-64 63 21 12 46 35 7 65 or more 76 18 13 67 13 7 All checking account holders 55 18 15 54 23 8 Uses ATMs fewer than four times per month Propor- Share of total expenditures Family characteristic tion of checking Main Other Credit account Cash checking holders account accounts cards Income (dollars) Less than 10,000 33 62 10,000-19,999 34 56 20,000-29,999 22 50 30,000-49,999 20 61 50,000 or more 17 56 Age of head (years) Less than 35 28 57 6 35-44 18 63 10 45-54 18 49 27 55-64 18 58 14 65 or more 27 41 16 All checking account holders 21 56 14 Family characteristic Uses ATMs four or more times per month Income (dollars) Less than 10,000 33 45 10 10,000-19,999 10 25 64 3 20,000-29,999 15 27 48 14 30,000-49,999 20 21 57 14 50,000 or more 23 11 56 22 Age of head (years) Less than 35 27 28 57 6 35-44 20 16 56 19 45-54 10 13 58 20 55-64 7 19 68 4 65 or more 1 65 14 13 All checking account holders 15 18 55 17 10 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 97 charged) individuals also have an incentive to hand before this acquisition, the amount they hold a larger average supply that is replenished acquired, the amount they spent during the first less frequently. hour and during the first day after the acquisi- The survey provides a great deal of informa- tion, the amount they had remaining at interview tion on patterns of cash acquisition and use. This time, and the next date on which they expected part of the survey is different from the others in to obtain cash. The interview date was also that the unit of observation is the individual recorded. Respondents were also asked how respondent rather than the family. This restric- much of the cash they obtained on the last tion is motivated by the fact that respondents can occasion had since been deposited into an acgive information about the transaction accounts count or used to purchase a financial asset, given of other family members that is likely to be more to a family member, or used to purchase a money accurate than information about the cash ac- order or traveler's checks. This information is counts. For example, for transaction accounts useful for distinguishing how much cash is used with written records, data on each account, for financial purposes (that is, redistribution, whether joint or separate, can be gathered from investment, or conversion to another form of the individual respondent who consults these payment) from how much is used to pay for records. But for the cash account, written rec- goods and services. Respondents were also ords generally are lacking, and the respondent asked to identify the source of their cash on the cannot be expected to have accurate information last occasion they obtained it. on the cash transactions of other household members. Thus, the unit of observation for these data was the respondent rather than the family, Patterns of Cash Acquisition and therefore we used sampling weights based on characteristics of the respondent, whereas, for Individuals obtain cash to replenish their supthe family data, we used sampling weights based plies in a variety of ways (table 9). For about 5 on characteristics of the respondent's family. percent of the population, the receipt of income When thus weighted, the respondents represent in cash is the principal mode of cash acquisition. all noninstitutionalized U.S. residents aged 18 Another small proportion, about 3 percent, typiyears or more—more than 176 million persons at cally obtain their cash from a family member. the time of the sampling. Thirty-seven percent of individuals ordinarily The survey collected two kinds of information acquire cash by cashing a check drawn on someabout patterns of cash acquisition and use. The one else's account, such as a paycheck. But the first kind is the description by respondents of their own "typical" behavior in managing cash 9. Distribution of individuals and of aggregate cash obtained, by principal source and method of balances: how frequently they obtain cash, how acquiring cash, 1984 much cash they usually have on hand before they Percent obtain more cash, and how much cash they typically get when they obtain it. Also, individ- Aggregate Source and method Individuals cash uals were asked to identify their usual source of obtained cash. From another The second kind of information the survey Income received in cash1 5 6 From family member 3 4 collected about cash acquisition and use focuses Cash check drawn on another 37 44 on the most recent occasion on which the indi- From own account vidual had obtained cash (not counting change Cash own check at financial institution 32 29 returned for a purchase made using cash). This ATM 11 9 Cash own check at store 8 6 information is more easily recalled than informa- Withdrawal from savings or tion about typical behavior and allows for the credit union account 3 2 collection of considerably more details about the Total 100 100 use of cash: the date on which respondents last 1. Here and in succeeding tables, includes all sources and methods obtained cash, the amount of cash they had on not otherwise classified. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • February 1986 10. Distribution of respondents with selected characteristics, by principal method of acquiring cash, 1984 Percent Method Withdrawal Respondent characteristic Cash own from Income From Cash check Cash own check at savings or received in family drawn on ATM check at financial credit cash member another institution store union account Marital status Married Male 6 2 39 31 12 6 3 Female 3 5 37 34 8 10 3 Single 7 1 34 34 12 8 4 Family income Less than 10,000 9 4 40 32 4 7 3 10,000-19,999 6 1 43 32 8 7 2 20,000-29,999 3 6 37 34 10 7 2 30,000-49,999 5 3 36 30 15 9 3 50,000 or more 1 3 24 38 18 11 4 Age (years) Less than 35 5 3 41 24 17 9 2 35-44 3 4 38 28 13 9 3 45-54 3 7 40 27 9 8 6 55-64 6 1 34 40 6 10 2 65 or more 8 1 38 56 1 4 4 Education Less than 12 years 9 3 44 36 1 4 3 High school diploma 4 3 46 30 7 8 2 Some college 5 3 29 36 14 8 4 College degree 5 4 26 32 20 10 4 Sex Male 6 2 38 31 12 6 3 Female 4 4 36 34 9 9 3 Race or national origin Caucasian 5 3 35 34 11 8 3 Nonwhite or Hispanic 7 7 45 24 8 7 3 Location of residence Urban 6 4 37 30 11 7 4 Suburban 4 2 34 33 15 9 2 Rural 5 2 40 37 5 8 2 majority, 55 percent, usually obtain cash by currency obtained by individuals is acquired by debiting one of their own accounts: by cashing a methods that result in a gross drain of vault cash. check drawn on their own account at a store or When weighted to represent the U.S. adult popufinancial institution, by using an ATM, or by lation, gross outflow at the time of the survey withdrawing funds from a savings or credit union amounts to about $65 billion per month. Since share account. depository institutions held approximately $20 A small proportion of the total amount of cash billion in vault cash at the time, this total implies obtained by all individuals simply involves a that their aggregate vault cash turned over at the transfer of cash from one person's inventory to rate of about 3lA times per month in support of another's, such as cash obtained from a family the cash inventory practices of U.S. adults. member or labor sold for cash. The bulk, howev- The principal methods of obtaining cash vary er, is obtained by converting some part of a over demographic groups (table 10). As income financial account balance into cash. When the rises, individuals are more likely to obtain cash conversion takes place at a depository institu- from an ATM or by cashing their own check and tion, the cash so acquired represents a gross cash are less likely to obtain cash by cashing a check drain from the vault cash of that institution. As they receive from someone else. Older persons, shown in table 9, the survey data suggest that at whether working or retired, acquire cash less least 85 percent of the aggregate amount of frequently through ATMs and more frequently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 99 10. Continued Method Withdrawal Respondent characteristic Income From Cash check Cash own Cash own from check at savings or received in family drawn on ATM check at financial credit cash member another store institution union account Labor force participation Respondent Working 39 28 Not working 34 41 Spouses One spouse working ... 40 29 10 Both spouses working.. 39 29 13 How respondent is paid1 Check 4 46 27 11 Cash 36 18 22 8 Automatic transfer 4 13 31 29 Other 5 33 34 13 How family is paid2 Check3 46 29 9 Cash4 30 21 9 Automatic transfer5 18 32 24 Other 37 35 10 Method of depositing social security check6 Directly deposited 17 55 Not directly deposited 48 37 Family ownership of credit cards None 33 40 One or more cards 39 28 Family ownership of ATM cards None 45 35 0 One or more cards 25 31 26 Proximity to ATMs1 Not near 16 33 24 Near 26 31 26 1. For employed respondents. 5. At least one member of couple paid by automatic transfer and 2. For couples with at least one employed member. neither member paid in cash. 3. Neither member of couple paid in cash or by automatic transfer. 6. For families receiving such income. 4. At least one member of couple paid in cash. 7. For families owning ATM cards. by cashing a check drawn on their own account time declines from a mean of about 18 days for at a financial institution. An individual's typical persons with annual incomes of less than $10,000 source of cash is more likely to be an ATM or a to a mean of less than 8 days for persons with store the more education the person has; less- incomes of $50,000 or more. Persons with more educated individuals are more likely to obtain education tend to acquire cash more frequently cash by cashing a check they receive from some- than those with less education, and younger one else. Finally, the cash acquisitions for indi- persons more frequently than older persons. viduals whose income is automatically deposited Individuals who typically obtain cash from into an account are more concentrated in ATMs ATMs have the shortest interval, averaging only and in cashing checks drawn on their own ac- about 7 days between cash replenishments, counts at financial institutions. For other individ- whereas individuals who typically obtain cash by uals, cash is more likely to be obtained by withdrawing funds from a savings account have cashing checks received. the longest, an average of about 17 days. The time between acquisitions of cash also The amount of cash individuals typically acvaries systematically among groups of individ- quire to replenish depleted supplies averages uals (table 11). For example, as income rises, the $135. Because a few individuals obtain very large Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Federal Reserve Bulletin • February 1986 11. Typical and most recent behavior of respondents with selected characteristics in obtaining cash, 1984 Percent Typical behavior Most recent behavior Dollars on hand Dollars on hand Respondent Days between Dollars Days between Dollars characteristic acquisitions acquired acquisitions acquired acquisition acquisition Mean Median Mean Median Mean Median Mean Median Mean Median Mean Median Marital status Married Male 14 7 43 20 156 100 13 8 38 20 172 100 Female 11 7 24 10 117 67 11 8 28 10 129 65 Single 15 10 34 10 124 75 14 9 29 10 127 70 Family income Less than 10,000 19 15 28 10 135 80 17 14 24 10 123 60 10,000-19,999 15 7 32 15 149 100 14 8 28 10 135 70 20,000-29,999 11 7 30 15 123 63 12 8 35 15 139 75 30,000-49,999 10 7 40 20 131 75 11 8 39 20 150 80 50,000 or more 9 7 37 20 129 100 9 7 36 20 187 100 Age (years) Less than 35 10 7 26 10 121 50 9 7 26 10 116 6600 35-44 10 7 37 12 137 75 11 7 43 15 162 80 45-54 11 7 35 20 136 100 11 7 36 20 165 100 55-64 17 7 38 20 147 100 16 10 32 15 157 75 65 or more 22 30 37 20 143 100 20 16 26 20 149 100 Education Less than 12 years 19 15 37 17 185 100 17 14 46 13 176 130 High school diploma 14 7 32 15 138 85 14 8 28 10 130 69 Some college 10 7 32 15 115 70 10 7 30 15 125 72 College degree 10 7 34 15 113 75 10 7 30 15 157 70 Sex Male 13 7 44 20 156 100 13 8 39 20 170 100 Female 13 7 25 10 114 63 12 8 26 10 123 60 Race Caucasian 12 7 34 15 128 75 12 8 30 15 139 75 Other 18 14 31 18 163 100 15 10 41 10 173 100 Location of residence Urban 14 7 34 17 139 100 13 8 33 15 131 90 Suburban 11 7 32 20 121 75 10 7 34 15 173 75 Rural 13 7 33 13 135 75 14 9 29 10 145 63 Labor force participation Respondent Working 11 7 33 15 129 75 11 7 35 15 143 70 Not working 17 15 34 15 143 100 16 12 27 12 149 100 Spouses One spouse working.. 13 7 34 20 145 100 13 8 40 20 154 100 Both spouses working.. 9 7 32 15 124 65 10 7 32 13 145 60 amounts of cash, however, the average exceeds who acquire cash primarily through ATMs or by the median amount, which is $80. Some groups cashing checks at stores obtain relatively smaller of individuals tend to obtain larger amounts of quantities—median amounts of $50 and $35 recash than do others. The median amount ac- spectively—and, as noted above, obtain cash quired by males, for example, whether married most frequently. or single, is $100 per transaction, and the median for females is $60. Individuals with higher in- Cash Velocity comes acquire larger amounts of cash than do individuals with lower incomes, but the quantity The turnover rate, or velocity, of cash is a ratio of cash obtained increases less than proportion- defined as total spending out of cash during some ately with income. Up to middle age, the amount interval of time, divided by average cash holdof cash obtained on each occasion increases with ings during the same interval. Velocity measures age; beyond middle age, it does not. Individuals the payments efficiency of cash in the sense that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 101 11. Continued Typical behavior Most recent behavior Dollars on hand Dollars on hand Respondent Days between Dollars Days between Dollars before before characteristic acquisitions acquired acquisitions acquired acquisition acquisition Mean Median Mean Median Mean Median Mean Median Mean Median Mean Median How respondent is paid1 Check 11 7 34 17 140 80 11 7 36 15 143 80 Cash 8 7 40 20 152 80 9 7 48 25 118 60 Automatic transfer 9 7 28 10 75 50 9 7 28 10 183 50 Other 11 7 34 13 111 57 9 7 33 10 99 50 How family is paid2 Check3 12 7 33 17 144 100 12 8 36 15 148 90 Cash4 9 7 46 20 158 75 10 7 50 20 141 90 Automatic transfer5 9 7 25 13 89 60 9 7 26 10 176 60 Other 10 7 36 15 111 65 10 7 37 15 103 60 Method of depositing social security check6 Directly deposited 18 15 40 20 125 100 18 14 25 15 143 100 Not directly deposited.. 26 30 30 16 167 100 22 16 23 10 170 100 Typical means of obtaining cash Income received in cash 13 7 36 20 166 100 12 9 47 25 143 100 From family member... 10 7 27 10 112 75 10 7 31 10 100 50 Cash check drawn on another 15 10 42 20 185 112 15 9 38 15 173 100 Cash own check at financial institution 14 7 33 20 117 90 13 9 32 19 154 80 ATM 7 7 16 8 60 50 7 6 19 10 104 50 Cash own check at store 9 7 20 7 71 35 9 7 14 5 66 30 Withdrawal from savings or credit union account 15 14 28 15 108 80 15 13 32 15 103 80 Family ownership of credit cards None 16 14 32 15 137 100 15 11 26 11 141 85 One or more cards 11 7 34 17 132 75 11 7 36 15 147 75 Family ownership of depository accounts None 10 15 22 10 232 200 17 14 23 5 182 158 One or more accounts.. 12 7 34 17 127 75 12 8 33 15 142 75 Family ownership of ATM cards None 16 10 38 20 156 100 15 10 36 15 160 100 One or more cards 9 7 27 13 103 50 10 7 26 10 123 60 Proximity to ATMs7 Not near 10 7 18 13 84 60 12 9 18 10 159 50 Near 9 7 27 13 104 50 9 7 27 10 121 60 All respondents 13 7 33 15 134 80 13 8 32 13 75 75 1. For employed respondents. 5. At least one member of couple paid by automatic transfer and 2. For couples with at least one employed member. neither member paid in cash. 3. Neither member of couple paid in cash or by automatic transfer. 6. For families receiving such income. 4. At least one member of couple paid in cash. 7. For families owning ATM cards. a higher turnover rate implies that each dollar of The survey was limited to U.S. family memcash outstanding supports a larger volume of bers aged 18 years or more, and thus it provides spending. A central objective of obtaining sam- no direct information on the cash management of ple data on the cash inventory practices of U.S. business enterprises (whether legitimate or "unresidents was to develop population estimates of derground"), persons outside the United States, average cash balances and turnover rates. or persons aged less than 18 years. Neverthe- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • February 1986 12. Typical behavior of respondents with selected characteristics in holding and spending cash, 1984 Mean Proportion Mean Cash monthly Mean Cash balance of average expenditures Respondent characteristic re ( s p p e o r n ce d n e t n ) t s ex ( p d e c o n a ll s d a h i r t s u ) r e ( b d a o l l a l n a c rs e ) tur m no o v n e th r ly ra te (pe r r a c t e io n t)1 (pe r r a c t e io n t)2 Marital status Married Male 38 489 121 4.1 44 46 Female 38 399 82 4.9 36 31 Single 24 344 96 3.6 20 23 Family income Less than 10,000 20 297 97 3.1 14 20 10,000-19,999 22 421 105 4.0 22 23 20,000-29,999 20 412 92 4.5 19 18 30,000-49,999 23 464 105 4.4 26 24 50,000 or more 15 528 101 5.2 19 15 Age (years) Less than 35 32 446 86 5.2 34 2288 35-44 20 463 104 4.5 22 21 45-54 17 468 103 4.6 19 17 55-64 16 424 110 3.9 16 17 65 or more 15 255 114 2.2 9 16 Education Less than 12 years 17 415 129 3.2 17 22 High school diploma 36 422 101 4.2 37 37 Some college 20 429 89 4.8 20 17 College degree 27 414 90 4.6 27 24 Sex Male 46 422 122 4.0 53 56 Female 54 366 82 4.5 47 44 Race or national origin Caucasian 83 424 98 4.3 84 81 Nonwhite or Hispanic 17 398 112 3.6 16 19 Location of residence Urban 51 426 104 4.1 52 53 Suburban 24 444 91 4.9 25 22 Rural 25 384 100 3.8 23 25 Labor force participation Respondent Working 66 463 97 4.8 7733 6644 Not working 34 337 106 3.2 27 36 Spouses One spouse working 27 466 105 4.4 30 29 Both spouses working 37 471 93 5.1 41 34 less, the survey results are significant because vey responses, however, by using the framework previously it was impossible to estimate directly of inventory theory as a guide. For examfrom existing data the volumes of cash holdings ple, suppose an individual reports that he or she and spending or to assess the accuracy of indi- obtains cash three times per month, typically has rect estimates. The survey thus goes a long way $20 on hand just before acquiring cash to replentoward filling an important gap in quantitative ish the inventory, and usually obtains $80. Over knowledge about the role of cash in the U.S. a representative interval between cash acquisipayments mechanism. tions, then, this individual spends $80 (the begin- Individuals cannot be expected to recall accu- ning inventory balance of $100 less the ending rately their total volume of spending with cash inventory balance of $20) and, assuming a uniover a month or a year or to know the average form rate of spending over the interval, mainamount of cash they held to support this spend- tains an average inventory balance of $60 ($20 ing; therefore, the survey did not attempt to plus one-half of $80). Because there are three solicit this information directly. Estimates of such intervals per month, total monthly cash these quantities can be calculated from the sur- expenditure is $240 ($80 x 3), and the average Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 103 12. Continued Mean Proportion Mean Cash monthly Mean Cash balance of average expenditures Respondent characteristic cash monthly ratio re ( s p p e o r n ce d n e t n ) t s expenditure ( b d a o l l a l n ar c s e ) turnover rate (pe r r a c t e io n t)1 (percent)2 (dollars) How respondent is paid3 Check 47 473 103 4.6 53 48 Cash 3 683 119 5.7 5 4 Automatic transfer 9 356 65 5.5 8 6 Other 6 425 89 4.8 6 6 How family is paid4 Check3 44 474 104 4.6 49 45 Cash6 4 572 122 4.7 6 5 Automatic transfer7 11 411 70 5.9 11 8 Other 5 463 91 5.1 6 5 Method of depositing social security check8 Directly deposited 12 268 104 2.6 8 12 Not directly deposited 12 290 116 2.5 9 14 Typical means of obtaining cash Income received in cash 5 510 115 4.4 6 6 From family member 3 464 84 5.5 4 3 Cash check drawn on another 37 498 133 3.8 44 49 Cash own check at financial institution 33 369 93 4.0 28 30 ATM 11 361 46 7.8 9 5 Cash own check at store 8 324 55 5.9 6 4 Withdrawal from savings or credit union account 3 293 85 3.5 2 3 Family ownership of credit cards None 40 345 102 3.4 40 41 One or more cards 60 470 99 4.7 60 59 Family ownership of depository accounts None 8 462 131 3.5 8 10 One or more accounts 93 417 98 4.3 92 90 Family ownership of ATM cards None 60 426 116 3.7 61 69 One or more cards 40 411 78 5.3 39 31 Proximity to ATMs9 Not near 2 345 60 5.8 2 1 Near 38 415 79 5.3 38 30 All respondents 100 420 100 4.2 100 100 1. Total cash expenditures of subgroup as a share of total cash 5. Neither member of couple paid in cash or by automatic transfer. expenditures of all respondents. 6. At least one member of couple paid in cash. 2. Sum of average cash balances of subgroup members as a share of 7. At least one member of couple paid by automatic transfer. sum of average cash balances of all respondents. 8. For families receiving such income. 3. For employed respondents. 9. For families owning ATM cards. 4. For couples with at least one employed member. amount of cash held over the month is $60; these 12 reports data derived from questions on typical figures imply a cash turnover rate of 4 times per cash spending patterns; table 13 is based on the month for this individual. last time the respondents obtained cash. The average cash holdings and monthly cash The estimated average cash holdings per indiexpenditures of individuals have been used to vidual amounted to about $100. Given the size of calculate aggregate turnover rates rather than the sampled population at the time of the survey, simple averages of individual turnover rates; the these estimates imply that, in the aggregate, aggregate rates are calculated for any class of adult, noninstitutionalized U.S. residents held individuals by dividing the group's total volume about $18 billion in cash, which they used for of monthly cash expenditure by the group's total transactions. Given the sampling variation and a average holdings of cash (tables 12 and 13). Table statistical confidence interval of 95 percent, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • February 1986 13. Most recent behavior of respondents with selected characteristics in holding and spending cash, 1984 Gross Net Mean Mean Mean Mean Propor- cash ex- cash ex- Cash gross net Mean gross net tion of pendi- pendi- balance Respondent characteristic sp e r o n e n t - s d - c m a p t o s e u h n n r t d e h e 1 i l x - y - c m a p t o s e u h n n r t d e h e 1 i l x - y - a b v a c e l a a r s n a h g c e e m t o r o u a v n r t t e e n h r 1 - ly m t o r o u a n v r t t e n e h r 1 - l y c t ( r e u p a n r t e e i t r o ) s - 2 c t ( r e u p a n r t e e i t r o ) s - 3 c ( r e p a n t e i t r o ) - 4 Marital status Married I Male 38 556 469 124 4.5 3.8 44 42 45 Female 38 457 3% 93 4.9 4.3 37 36 34 Single 24 387 378 92 4.2 4.1 19 22 21 Family income Less than 10,000 20 298 85 3.5 3.4 13 14 16 10,000-19,999 22 484 % 5.1 4.5 22 22 20 20,000-29,999 20 450 104 4.3 3.9 19 19 20 30,000-49,999 23 500 114 4.4 4.0 24 25 25 50,000 or more 15 702 130 5.4 4.3 22 " 20 19 Age (years) Less than 35 32 84 5.9 5.0 33 32 26 35-44 20 124 4.3 3.9 22 23 24 45-54 17 119 4.7 4.2 20 20 19 55-64 16 111 4.2 3.6 15 15 16 65 or more 15 101 2.8 2.8 9 10 15 Education Less than 12 years 17 135 3.5 3.5 17 19 22 High school diploma 36 94 4.4 4.1 32 33 33 Some college 20 93 5.6 4.6 22 20 18 College degree 27 108 4.9 4.0 30 28 28 Sex Male 46 4.4 3.8 53 52 55 Female 54 4.8 4.3 47 48 45 Race Caucasian 83 4.8 4.2 84 82 80 Other 17 3.6 3.5 16 18 20 Location of residence Urban 51 441 ] 99 4.5 4.3 47 51 48 Suburban 24 568 479 120 4.7 4.0 29 27 28 Rural 25 459 101 4.5 3.6 24 22 24 368 " K Labor force participation •mmm Respondent Working 66 519 454 106 4.9 4.3 72 71 67 Not working 34 393 359 101 3.9 3.5 28 29 33 Spouses One spouse working... 27 547 1 49<7 '* 117 4.7 4.3 31 32 30 Both spouses working . 36 534 H 104 5.1 4.1 41 37 37 these holdings represented only 11 to 12 percent of businesses generally consist of cash received of the stock of currency and coin in circulation from sales and inventories of cash held for makoutside banks, which was $153.9 billion (not ing change and minor purchases. Because there seasonally adjusted) in the second quarter of are strong economic and safety incentives to 1984. Unless respondents have severely under- minimize cash holdings, legitimate businesses stated their cash holdings, more than 85 percent are not likely to hold much more cash than all of the U.S. currency stock outside depository adults. Therefore, the survey results suggest that institutions was held—apart from some that may a large proportion of the U.S. currency stock is be lost and unaccounted for—by other agents held either in hoards, "underground," or offsuch as business enterprises, persons in other shore and thus for purposes not directly related countries, and persons aged less than 18 years. It to measured domestic economic activity. does not seem likely that children could have According to the survey results, the cash holdheld cash inventories much greater than the total ings of individuals were turned over at an aggreholdings of adults. In addition, the cash holdings gate rate of about 4.2 times per month in support Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 105 13. Continued Gross Net Mean Mean Mean Mean Propor- cash ex- cash ex- Cash gross net Mean gross net tion of pendi- pendi- balance monthly monthly average monthly monthly Respondent characteristic re- cash ex- cash ex- cash turn- turn- tures tures ratio spond- ratio ratio (perents p t e u n r d e1 i- p t e u n r d e1 i - balance o ra v t e e r 1 o ra v t e e r 1 c ( e p n e t r ) - 2 c ( e p n e t r ) - 3 cent)4 How respondent is paid5 Check 47 553 475 107 5.0 4.5 53 53 48 Cash 3 542 520 108 5.0 4.8 4 4 3 Automatic transfer 9 535 373 119 4.5 3.1 10 8 10 Other 6 380 376 82 4.6 4.6 5 6 5 How family is paid6 Check7 44 547 474 110 5.0 4.3 5500 4499 4466 Cash8 4 543 490 120 4.5 4.1 5 5 5 Automatic transfer9 11 576 407 114 5.0 3.6 13 10 12 Other 5 395 394 88 4.5 4.5 4 5 4 Method of depositing social security check10 Directly deposited 12 315 313 % 3.3 3.2 8 9 11 Not directly deposited 12 323 291 107 3.0 2.7 8 9 13 Typical means of obtaining cash Income received in cash 5 496 447777 111188 44..22 44..00 5 6 6 From family member 3 418 389 82 5.1 4.8 3 3 3 Cash check drawn on another 37 569 481 125 4.5 3.8 44 42 44 Cash own check at financial institution 33 438 381 109 4.0 3.5 30 30 34 ATM 11 507 453 71 7.1 6.4 11 11 7 Cash own check at store 8 308 266 47 6.6 5.7 5 5 4 Withdrawal from savings or credit union account 3 307 297 83 3.7 3.6 2 2 3 Family ownership of credit cards None 40 390 361 9977 44..00 33..77 3333 3355 3377 One or more cards 60 534 462 110 4.9 4.2 67 65 63 Family ownership of depository accounts None 7 466 446611 111144 44..11 44..00 7 88 88 One or more accounts 93 477 418 104 4.6 4.0 93 92 92 Family ownership of ATM cards None 60 466 418 111166 44..00 33..66 5599 5599 6666 One or more cards 40 490 427 88 5.6 4.9 41 41 34 Proximity to ATMs11 Not near 2 567 557 98 5.8 5.7 3 3 2 Near 38 486 420 87 5.6 4.8 39 38 32 All respondents 100 476 453 104 4.6 4.3 100 100 100 1. Gross cash expenditures are all cash expenditures, including 5. For employed respondents. financial transactions and cash given to other family members. Net 6. For couples with at least one employed member. cash expenditures exclude these two categories. Gross and net cash 7. Neither member of couple paid in cash or by automatic transfer. turnover rates are defined as gross and net cash expenditures respec- 8. At least one member of couple paid in cash. tively, divided by average cash balances. 9. At least one member of couple paid by automatic transfer and 2. Total gross cash expenditures of subgroup as a share of total neither member paid in cash. gross cash expenditures of all respondents. 10. For families receiving such income. 3. Calculation in note 2 using net cash expenditures. 11. For families owning ATM cards. 4. Sum of average cash balances of subgroup members as a share of sum of average cash balances of all respondents. of about $420 in gross cash expenditure. Gross resented a small fraction of the U.S. currency expenditure here is taken to include all cash stock, these balances were used very actively in expenditures, financial investments, and trans- support of trade. fers to other family members. These estimates The aggregate turnover rates reported in tables imply that the stock of cash held by the sampled 11 and 12 can be broken down into weighted population supported a flow of expenditure that, averages of turnover rates for groups of individat an annual rate, amounted to about $920 billion. uals with similar demographic or other distin- Thus, although individuals' holdings of cash rep- guishing characteristics; the individual weights Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 Federal Reserve Bulletin • February 1986 are the product of the fractions of aggregate cash acquisition confirm the positive link between holdings accounted for by the group members turnover rates and income found in the data and their respective population weights de- describing typical behavior; but they contradict scribed in appendix B. This type of analysis is the finding there about cash inventories, which the starting point for assessing probable secular they suggest do increase, though less than prochanges in the aggregate cash turnover rate given portionately, with income. In both sets of data, projected demographic shifts. As revealed in the cash expenditures rise with income, but less than tables, the cash turnover rate varies substantially proportionately. across classes of individuals using different methods for acquiring cash. The general pattern SUMMARY OF FINDINGS is that the cash turnover rate tends to be highest for those groups of individuals who acquire cash This article has presented some preliminary rethrough methods with comparatively low mar- sults from the 1984 Survey of Currency and ginal convenience costs—ATMs, check cashing Transaction Account Usage. An important findat stores, and from a family member. These ing is that different means of payment have individuals also tend to acquire cash with the different uses that vary over socioeconomic highest frequency and to hold relatively small classes. While all families use cash for expendiaverage cash inventories. The high turnover rate tures, 14 percent use only cash. Checking acof cash obtained through ATMs, coupled with counts are by far the principal means of paythe low average supply of cash maintained by ment, covering an average of 57 percent of total individuals who acquire it principally from family expenditures. As income rises, the use ATMs, suggests that the widening use of ATMs and dollar volume per transaction of secondary may damp the growth of the aggregate currency transaction accounts rises, though that increase demand of individuals and increase the aggregate is less than proportional. Although credit cards velocity of cash. are widely used, credit card expenditures on The survey also shows strong life-cycle effects average are a relatively small fraction of total in the cash turnover rate, which is highest for family expenditures. One surprising implication younger individuals and declines with age. Older of the findings on cash inventories is that less individuals acquire cash less frequently, main- than 15 percent of the stock of currency in the tain higher average inventories of cash, and have United States (adjusted for vault cash and known a lower dollar volume of spending out of cash losses) is held for transaction purposes by the than do younger persons. Taken as a percentage sampled population of individuals. of income, however, cash expenditures are high- The availability of ATMs has increased rapidly est for individuals aged less than 35 years, de- across the country. At the time of the survey, 43 cline to a low of about 23 percent for middle-age percent of families had ATM cards, but only 30 individuals, and thereafter increase with age. percent of families actually used an ATM card in Based on respondents' reports of their typical the month preceding the survey. Use of ATMs is behavior, average cash inventories do not vary higher for younger and for higher-income famsignificantly across income classes, but cash ilies. On average, individuals who use ATMs as expenditures rise strongly with income. The re- their principal source of cash maintain average sult is that cash turnover rates rise with income. cash holdings that are significantly smaller, and Respondents' reports of their most recent cash they replenish them more often. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Use of Cash and Transaction Accounts by American Families 107 APPENDIX A: SURVEY DESIGN case with all sample surveys, the data are subject to errors of sampling, reporting, and nonre- The 1984 Survey of Currency and Transaction sponse. Appendix B discusses the influence of Account Usage employed multistage probability these factors in the results of the survey. sampling to select 2,500 residential telephone Certain facts about this survey sample should numbers. At the first stage, the universe of these be noted. First, the sample is restricted to famtelephone numbers was stratified geographically. ilies with telephones. For this reason, it is likely Final sample telephone numbers with the first- that single individuals and poorer individuals and stage selection of prefix numbers were randomly families are sampled less frequently. Second, drawn from 44 states and the District of Colum- there are two types of sample elements for each bia. observation, the individual respondent and the The sample represents the four major U.S. respondent's family. For each telephone numregions—Northeast, North Central, South, and ber, only one person was chosen as a respon- West—in proportion to their populations. At dent. For this reason, single individuals are more each telephone number, the individual selected likely to have been chosen than married individas respondent was either the head of the family uals with similar characteristics. To the extent or, in the case of a married couple, a financially that the behavior of groups excluded from the knowledgeable spouse.1 Respondents were en- sample is represented by similar groups within couraged to consult other family members and the sample, population characteristics may be financial records in an effort to obtain complete estimated with appropriate individual and family and accurate responses. Nevertheless, as is the sampling weights as described in appendix B. Interviewing for the survey was conducted by 1. In the survey, the family is defined as an individual the Survey Research Center of the University of living alone or as any number of persons related by blood or Michigan primarily in the second quarter of 1984, marriage who are living together. The head of the family is defined as the individual living alone, the male of a married a period chosen because it is the least likely to couple, or the adult in a family with more than one person and exhibit strong seasonal effects. A total of 1,946 only one adult. When there is no married couple and more interviews were obtained by the end of the than one adult, the head is the person designated by the family. Adults are persons aged 18 years or more. survey, in August 1984. APPENDIX B: ERRORS OF SAMPLING, B.l Approximate sampling errors of survey results, REPORTING, AND NONRESPONSE by size of sample1 Percentage points The results of any survey and the estimates of population characteristics derived from it are SSuurrvveeyy rreessuullttss Size of sample ((ppeerrcceenntt)) subject to errors based on the degree to which 3,000 2,000 500 300 100 the sample varies from the population, errors 50 2.5 2.8 3.6 6.2 10.5 arising during the interview, and errors derived 30 or 70 2.3 2.5 3.3 5.7 9.6 20 or 80 2.0 2.2 2.9 4.9 8.4 from incomplete responses. 10 or 90 1.5 1.7 2.2 3.7 6.3 5 or 95 1.1 1.2 1.6 2.7 4.6 1. Two standard errors. Errors of Sampling dence level of 95 percent. Therefore, for most Sampling error is a measure of the possible responses, the chances are 95 in 100 that the random deviation of the survey findings resulting estimated value lies within a range equal to the from the selection of a particular sample. Table reported percentages plus or minus the sampling B.l contains the approximate sampling errors error. For most of the tables in this article, the associated with various sample sizes and report- appropriate sample size is between 1,000 and ed percentages from a survey, assuming a confi- 2,000 respondents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • February 1986 Errors of Reporting Sixty-one cases were discarded from the sample because most of the dollar values were miss- All survey results are subject to reporting errors, ing or because values of key variables were which may occur accidentally, purposely, or highly implausible. For the remaining 1,885 obfrom a lack of information. They may arise servations, all missing values were imputed. because respondents misunderstand questions, Briefly, we imputed the missing values by iterafalsify responses, or simply lack interest in the tively estimating the distribution of variables that survey. They may also occur when interviewers were missing; after this estimation, which was misinterpret responses or query respondents in conditioned on the set of variables observed for a an inconsistent manner. These sources of error given case, we calculated the most probable can be minimized by careful training of inter- estimates of the missing values. We made final viewers, gaining the confidence and cooperation imputations using the estimated value plus a of respondents, and identifying inconsistencies random term that preserves unexplained variaduring the coding and processing of responses. tion within the sample.2 Errors of Nonresponse Sampling Weights Nonresponse errors may arise because a family One means of making formal correction for nonselected for participation in the survey could not response bias is to use sampling weights in the be interviewed, perhaps because the family re- calculation of population statistics.3 In the case fused to participate, could not be contacted after of the Survey of Currency and Transaction Accallbacks, or was unable to respond for medical count Usage, two population universes of U.S. reasons or because the interviewer and the re- residents are of interest: noninstitutionalized spondent did not share a common language. families and noninstitutionalized individuals Errors of nonresponse may be reduced by impos- aged 18 years or more. For purposes of computing strict requirements for response rates on the ing appropriate sampling weights, the survey organization conducting the interviewing. A re- sample was post-stratified by marital status, sex, sponse rate of 78 percent was achieved for the age, race, and income for individual respondents 1984 Survey of Currency and Transactions Ac- and for their families. Corresponding population count Usage. Errors of this type, like reporting frequencies were estimated using the 1983 Surerrors, are not precisely measurable. vey of Consumer Finances.4 For each cell, indi- As is the case in virtually every household vidual sampling weights and family sampling survey, the Survey of Currency and Transac- weights are given by the ratio of the respective tions Account Usage also contained observa- universe and sample cell frequencies. All calcutions with missing values for some of the varia- lations reported in this article were made using bles. Of the 1,946 observations in the original set the individual or the family sampling weights. of data, 1,122 were incomplete. The average number of missing values, however, was quite small—about 3 out of 230 variables per observa- 2. Details of this procedure are given in Robert B. Avery, tion. Most key variables were present in all but a Gregory E. Elliehausen, Arthur B. Kennickell, and Paul A. small proportion of observations. For example, Spindt, "A Microanalytic View of the Payments Mechanism: Some Preliminary Results from the Survey of Currency and data on the amount of currency usually obtained Transaction Account Usage" (paper presented at the annual was missing in only 4 to 5 percent of the inter- meeting of the Financial Management Association, October views. The dollar amount of family income was 9-11, 1985). 3. D.G. Horwitz and D.J. Thompson, "A Generalization the most frequently missing variable; it was of Sampling Without Replacement from a Finite Universe," missing in about 10 percent of the observations, Journal of the American Statistical Association, vol. 48 though a significant proportion of these respon- (December 1952), pp. 396-404. dents furnished information on their range of 4. Robert B. Avery and Gregory E. Elliehausen, 1983 Survey of Consumer Finances (Board of Governors of the income. Federal Reserve System, forthcoming). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

109 Treasury and Federal Reserve Foreign Exchange Operations: Interim Report This interim report, covering the period August As the period opened, the dollar continued the through October 1985, is the twenty-sixth of a irregular decline that had occurred during the series providing information on Treasury and previous five months, but the pace of decline was System foreign exchange operations to supple- slowing. Economic statistics were still suggestment the regular series of semiannual reports ing that growth of U.S. production and employthat are usually issued each March and Septem- ment remained sluggish during the summer ber. It was prepared by Sam Y. Cross, Manager months. But market participants doubted that of Foreign Operations of the System Open Mar- U.S. interest rates would extend the decline that ket Account and Executive Vice President in had begun earlier in the spring since they viewed charge of the Foreign Group of the Federal the Federal Reserve as likely to be increasingly Reserve Bank of New York. cautious in the face of continued rapid monetary growth. Starting in late August, the dollar actual- After rising for a time in August and early ly began to rise as it appeared that the outlook for September, dollar exchange rates dropped sharp- U.S. economic growth might be more favorable ly after an announcement on September 22 by than had been predicted earlier. Trade and emthe Ministers of Finance and Central Bank Gov- ployment data that were better than anticipated ernors of the five major industrial nations.1 The prompted market participants to change their monetary authorities agreed to pursue addition- expectations for the U.S. economy and for interal, specific policies to sustain and accelerate est rates. Under these circumstances, commermore balanced expansion with low inflation, and cial customers as well as professionals acted to to cooperate more closely in furthering an order- cover short positions and to reduce hedges ly appreciation of nondollar currencies. For the against dollar assets established when the dollar August-October period as a whole, the dollar extended the decline that had begun in early 1985, against a background of spreading percep- 1. Federal Reserve reciprocal currency arrangements tions that U.S. economic growth was slowing Millions of dollars while activity abroad was picking up. By the end Amount of facility, of October, the dollar had fallen nearly 11 per- Institution October 31, 1985 cent in terms of the Japanese yen compared with Austrian National Bank 250 its level at the end of July, by about 6 percent National Bank of Belgium 1,000 relative to continental currencies, and by 2 per- Bank of Canada 2,000 National Bank of Denmark 250 cent against the pound sterling. On a trade- Bank of England : — 3,000 Bank of France 2,000 weighted average basis, the dollar closed about German Federal Bank 6,000 Bank of Italy 3,000 5V2 percent lower than its levels at the end of Bank of Japan 5,000 July, and 22 percent below its highs of late Bank of Mexico 700 February 1985. Netherlands Bank 500 Bank of Norway 250 Bank of Sweden 300 Swiss National Bank 4,000 Bank for International 1. The text of the statement made on September 22, 1985, Settlements: by the Ministers of Finance and Central Bank Governors of Swiss francs-dollars 600 France, the Federal Republic of Germany, Japan, the United Other authorized Kingdom, and the United States is available on request from European currencies-dollars 1,250 Publications Services, Board of Governors of the Federal Total 3300,,110000 Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • February 1986 had been falling. Moreover, evidence of a re- even welcoming the strong dollar. In addition, newed flow of private foreign capital into the the agreement was interpreted as eliminating the U.S. securities markets during September, after likelihood that the Federal Reserve would tighta temporary slackening in August, helped to en reserve conditions in response to rapid U.S. dispel concern that the dollar's decline since the monetary growth. spring would cause a major shift of investor In these circumstances, the dollar dropped preferences toward nondollar currencies. The sharply on the day following the G-5 announcedollar reached its highest levels of the three- ment even before any official intervention ocmonth period under review during the second curred. With Tokyo closed for a holiday, the first week of September, as traders anticipated that central bank operations were in Europe; the upcoming "flash" estimates of gross national dollar had already fallen against major foreign product would reveal strong growth in the third currencies by the time the Bundesbank stepped quarter. in to sell dollars at the afternoon fixing in Frank- By mid-September, however, market partici- furt for the first time in more than six months. pants began to question whether the expected Later the same day, the U.S. authorities conpickup in economic activity would be strong ducted their first operation during the period enough to sustain dollar exchange rates at the under review, selling dollars against Japanese levels they had reached, which were 4 to 9 yen and German marks in a visible manner to percent higher than those of early August. As resist a rise of the dollar from the lower levels. these questions led some professionals to take During the next few days, there was some profits, the dollar fell, dropping further when the skepticism in the market that the lower dollar "flash" GNP estimate turned out to be lower levels would be maintained, and a number of than most market forecasts. commercial customers responded to the appar- The dollar's fall then gained momentum after ently attractive rates by buying dollars. This September 22, when the G-5 Finance Ministers phenomenon was most dramatic in Tokyo and Central Bank Governors made their an- where, when the market opened on Tuesday, nouncement following a meeting in New York. September 24, after a three-day weekend, de- The statement drew attention to changes already mand for dollars by corporations and investors occurring in fundamental economic conditions spurred the largest turnover on record for spot around the world, in particular the shift to more dollar-yen trading. The Bank of Japan then remoderate growth in the United States, stronger sponded with massive dollar sales. Even though growth in other countries, and the convergence these sales were partly offset by sizable normal of inflation rates at a lower level. Recognizing interest earnings, Japan's published foreign exthat these changes had not yet been fully reflect- change reserves dropped nearly $1 billion in the ed in exchange rates, the officials affirmed the month of September. Following these and other strong prospects for progress in reducing interna- operations in subsequent days by the Japanese tional economic imbalances and the intentions of and other G-5 central banks, market participants the G-5 governments to implement policies to came to believe that the authorities were firmly sustain and accelerate these improvements. committed to the joint effort, and upward pres- Each of the countries issued a specific statement sures on the dollar abated. The U.S. authorities of policy intentions to intensify individual and sold a total of $199 million against German marks cooperative efforts to achieve sustained noninfla- and $262 million against the Japanese yen during tionary expansion. the last week of September and the first week of October, operating repeatedly and visibly at The G-5 announcement had an immediate and times when the dollar showed a tendency to rise strong effect on dollar exchange rates. In part, from the lower levels it had reached. the exchange market reaction reflected the fact that the announcement was unexpected. More In the two weeks beginning October 7, the importantly, market participants noted that the dollar came under heavier upward pressure, reinitiative had come from the United States and flecting strong commercial and investor demand. viewed it as a change in the U.S. government's While impressed with the central bank intervenpreviously perceived attitude of accepting or tion, market participants still anticipated addi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 111 tional economic policy initiatives. The demand the upward pressure on the dollar relative to the for dollars was spurred when the annual World European currencies abated in response both to Bank-IMF meetings in Seoul, Korea, passed the intervention operations and to a fading of without any policy announcements. Also, some optimism about the U.S. economic outlook. The statements, attributed to monetary officials at the upward pressure on the dollar vis-a-vis the Japa- Seoul meetings, were viewed as expressing satis- nese yen, however, was slower to subside—even faction with the extent of the dollar's decline and though the government of Japan had announced suggesting that it would not fall much further. on October 15 a program to increase the rate of Also contributing to upward pressure on the growth of domestic demand. Accordingly, the dollar were growing perceptions that U.S. eco- Desk's dollar sales in this two-week period, nomic activity was picking up and that new while more modest in size, were concentrated in estimates of third-quarter growth of GNP would yen. In all during these two weeks, the U.S. show a substantial upward revision. authorities sold $482.9 million against Japanese The demand for dollars, especially against the yen and $87 million against the German mark. German mark, intensified around mid-October Late in October the Bank of Japan allowed when commercial participants who had held off Japanese money market interest rates to drift meeting their dollar needs after the G-5 an- higher. It was then that the dollar began to nouncement reentered the market. But the dol- decline particularly sharply against the yen. lar's rise was largely held in check by coordinat- Many market observers viewed the Japanese ed intervention by the United States and other actions on interest rates as possibly representing monetary authorities. On October 16, as the the first of a series of steps to be taken by the G-5 dollar staged its strongest rebound since the G-5 countries to lower interest differentials favorable announcement, the Trading Desk of the Federal to the dollar. Despite denials by U.S., German, Reserve Bank of New York sold $797 million and Japanese officials that any agreement existed against German marks and $67 million against for such coordinated interest rate policy moves, Japanese yen, and on the next day it sold addi- the idea persisted, and the dollar declined across tional amounts as the dollar eased back when the the board to close near its lowest levels of the upward revision of the U.S. GNP statistics failed three-month period under review. It ended Octoto live up to expectations. During the two weeks ber about 13 percent below the level at which it after the September 22 communique, the United had traded in the week before the G-5 meeting in States sold a total of $1,550.2 million against terms of the Japanese yen, IOV2 percent down in German marks and $617.6 million against Japa- terms of the German mark, and 8 percent down nese yen. These operations, some of which were vis-a-vis sterling. Total intervention sales of dolconducted in Far Eastern markets as well as in lars by the U.S. authorities, which were split New York, were closely coordinated with those equally between the U.S. Treasury and the Fedof the Bank of Japan and European G-5 central eral Reserve, came to $3,198.7 million during the banks in their own centers. three months. After September 22, the central During the last two weeks of October, much of banks of France, Germany, Japan, and the Unit- 2. Drawings and repayments by the Argentine central bank under special swap arrangements with the U.S. Treasury Millions of dollars, drawings or repayments (-) Outstanding Outstanding Amounts of September 1984:4 1985:1 1985:2 1985:3 October 31, U.S. drawings on Treasury facilities 30, 1984 1985 500 million * 500 -230 * * * -270 150 million * * * 75 -71.4 * 68 -71.4 Data are on a value-date basis. *No facility. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 Federal Reserve Bulletin • February 1986 3. Net profits or losses (-) on U.S. Treasury and Argentina from 12 foreign central banks, repre- Federal Reserve current foreign exchange senting their part of the cooperative bridging operations facility established in June. Millions of dollars In the period from August through October, U.S. Treasury the Federal Reserve and the Exchange Stabiliza- Period Federal Exchange tion Fund (ESF) realized no profits or losses Reserve Stabilization Fund from exchange transactions. As of October 31, cumulative bookkeeping or valuation losses on August 1, 1985-October 31, 1985 000 000 outstanding foreign currency balances were $451 Valuation profits and million for the Federal Reserve and $203 million losses on outstanding assets and liabilities for the Treasury's ESF. These valuation losses as of October 31, represent the decrease in the dollar value of 1984 ---444555111...000 ---222000222...777 outstanding currency assets valued at end-of- Data are on a value-date basis. period exchange rates, compared with the rates prevailing at the time the foreign currencies were acquired. ed Kingdom sold about $5 billion. The central The Federal Reserve and the ESF invest forbanks of other G-10 countries sold more than eign currency balances acquired in the market as $2 billion. a result of their foreign operations in a variety of In other operations, Argentina repaid its draw- instruments that yield market-related rates of ing on its swap agreement with the U.S. Trea- return and that have a high degree of quality and sury established on June 19, 1985. The drawing liquidity. Under the authority provided by the was repaid as scheduled in two installments of Monetary Control Act of 1980, the Federal Re- $71.4 million each on August 15 and September serve has invested $1,796.6 million equivalent of 30. The payments coincided with Argentina's its foreign currency holdings in securities issued drawings from the International Monetary Fund by foreign governments as of October 31. In under its new economic stabilization program. addition, the Treasury held the equivalent of Also completed at the same time were the repay- $2,672.1 million in such securities as of the end of ments of $460 million of outstanding credits to October. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

113 Industrial Production Released for publication December 13 125.1 percent of the 1977 average, the index in November was 1.4 percent higher than that of a Industrial production increased an estimated 0.4 year earlier. percent in November following a downward revi- In market groups, output of consumer goods sion of 0.4 percent in October. In November, increased 0.4 percent in November, reflecting a most market groups posted gains following de- rise of 1.4 percent in durable goods and a gain of clines in October. Over the last three months, 0.1 percent in nondurable goods. In November, total industrial production has changed little. At autos were assembled at an annual rate of 7.7 Ratio scale, 1977= 100 All series are seasonally adjusted. Latest figures: November. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • February 1986 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Group 1985 1985 NNNooovvv... 111999888444 tttooo NNNooovvv... Oct. Nov. July Aug. Sept. Oct. Nov. 111999888555 Major market groups Total industrial production 124.6 125.1 -.2 .9 -.1 -.4 .4 1.4 Products, total 132.5 133.1 .0 1.1 .1 -.4 .4 2.5 Final products 132.6 133.2 .1 1.1 .0 -.5 .5 1.9 Consumer goods 121.1 121.7 -.2 1.1 .2 -.5 .4 1.8 Durable 111.6 113.1 -.6 2.5 -1.0 -1.2 1.4 -.2 Nondurable 124.6 124.8 -.1 .7 .6 -.2 .1 2.5 Business equipment.. 141.1 141.9 .4 1.2 -.6 -.7 .5 1.5 Defense and space... 178.7 181.5 .3 .9 1.1 .7 1.6 11.1 Intermediate products.. 132.5 132.6 -.5 1.0 .4 .0 .1 4.2 Construction supplies 121.1 120.8 .2 1.8 .0 -.4 -.2 4.4 Materials 113.6 114.2 -.5 .7 -.4 -.4 .5 -.4 Major industry groups Manufacturing. 127.5 128.1 .2 1.0 -.3 -.3 .5 1.7 Durable 127.9 128.9 .2 1.2 -.7 -.5 .8 1.1 Nondurable 127.0 127.1 .1 .8 .3 .0 .1 2.7 Mining 106.0 105.6 -1.7 -.4 -.5 -1.6 -.4 -3.0 Utilities 113.4 114.0 -2.4 -.3 2.6 .1 .5 1.7 NOTE. Indexes are seasonally adjusted. million units, only slightly higher than the strike- percent in October. Materials output rose 0.5 affected rate of 7.6 million units in October. percent in November following a decline in Octo- However, lightweight truck production rebound- ber; production of durable goods materials ined sharply in November. Output of home goods, creased 0.7 percent, while nondurable materials which includes appliances, rose an estimated 0.7 edged up 0.2 percent. percent following a gain of 1.0 percent in Octo- In industry groups, manufacturing output inber. creased 0.5 percent in November. Durable man- Production of business equipment rose 0.5 ufacturing rose 0.8 percent, with output of iron percent in November, with gains in most catego- and steel rising again, while nondurable manuries; October data, however, were revised down- facturing changed little. Mining production deward. Output of defense equipment increased 1.6 clined 0.4 percent further in November; the percent following an upward revision of 0.7 output of utilities rose 0.5 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

115 Statements to Congress Statement by Paul A. Volcker, Chairman, Board human failure—are an integral part of the payof Governors of the Federal Reserve System, ments mechanism. The scale and the speed of before the Subcommittee on Domestic Monetary transactions permit no other approach. It is Policy of the Committee on Banking, Finance therefore appropriate to ask what type of backup and Urban Affairs, U.S. House of Representa- systems—both hardware and software—and tives, December 12, 1985. controls should be required of participants in the payments system, especially those participants I appreciate the opportunity to discuss with you with potentially large exposures measured relaquestions relating to the operational problems tive to assets, capital, and any other measures. experienced by the Bank of New York on No- That question is one that must, in the first vember 21 and the response of the Federal instance, be faced by each participant. Those Reserve Bank of New York. My remarks will be participants, however, also face intense competirelatively brief. Mr. Corrigan, President of the tive pressures to minimize costs and cash bal- New York Federal Reserve Bank, who was on ances. As participants in and regulators of the the scene and who is here with you today, is in a payments system, the Federal Reserve has the position to review in full detail the specific facts responsibility to see to it that there is a counterand the Federal Reserve's response to the events vailing pressure to provide protection against as they unfolded. unacceptable risks for the system as a whole. The settlement problem, which resulted in the In approaching that question, the Federal Reloan of $22.6 billion to the Bank of New York, serve has tried to identify and assess the risks was caused by a failure of the computer system facing participants in the payments and settlesoftware. The effects in this instance were of ment mechanisms, and to determine how these unprecedented magnitude, measured by the risks interact and what can be done to limit them amount of the overnight loan. But the effects in in a cost-effective way. terms of market performance and risk were well For some years, the Federal Reserve has been contained. actively encouraging participants to adopt mea- It is also true that more limited computer sures and policies to limit risk in payments and interruptions, either at private participants or at settlement systems, and we are reinforcing our one of the Reserve Banks, are not unusual. The own computer facilities, including backup sysimpact is typically small, reflected only in tempo- tems. After long discussions with other interestrary delays of minutes or hours in operations or ed parties, the Federal Reserve Board earlier this in final settlement for a day's work. This time, year, in May, issued a policy statement addressthe interruption was much more prolonged, ex- ing certain problems in this area. That statement tending overnight. Consequently, potentially se- called upon participants in private funds transfer rious implications for the payments system and systems—including the so-called Clearing House for the securities markets were highlighted al- Interbank Payments System (CHIPS), which though they were avoided in this instance. handles some one hundred thousand individual Since Mr. Corrigan will be reviewing in some international payments transactions, valued at detail the particular circumstances surrounding several hundred billion dollars, per day—to betthe Bank of New York (BONY) borrowing, I will ter evaluate and control risks inherent in largesimply turn to some of the policy issues. scale automated transfers. We also announced at Like it or not, computers and their software that time measures to control and reduce sosystems—with the possibility of mechanical or called "daylight overdrafts" on our own books— Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • February 1986 overdrafts that occur when, in the course of a tions between the Federal Reserve and BONY day, a bank exhausts its reserve balance with a was to offset fully the "subsidy" arising from the Federal Reserve Bank. fact that the discount rate was below the federal In the last analysis, no mechanical system can funds rate prevailing that day. be entirely "fail-safe" and also be commercially Those particular results were, however, fortuviable. The costs would simply be too high, and itous. At the same time, BONY did incur subthe money and the Treasury securities markets stantial expenses because it had to finance overcould not operate at the present level of efficien- night some $25 billion of securities, upon which it cy. Nor can key clearing operations be easily received no interest. Notwithstanding that circlosed down in the middle of a day without cumstance, a special penalty rate, designed to having a potentially severe impact on markets encourage better backup systems, when excepand third parties, sowing confusion at the least, tionally large borrowing is caused by the instituand at the worst a chain reaction of losses. In tion's own computer problems may well be apthese circumstances, the importance of institu- propriate. Over time we will also be reviewing, tions having access to the discount window is as already contemplated, our policies toward evident; in this instance, we could extend credit tolerable levels of daylight overdrafts. with the knowledge that we were dealing with a Your letter, Mr. Chairman, also asks whether known and a reputable depository institution, the Federal Reserve itself should play a large role supervised by federal authorities. directly in clearing securities—as a priced ser- The discount window advance to the BONY vice—to reduce the overall risks to the System. was, by any measure, enormous, but the collat- That, frankly, is an area that we would be eral in our hands—U.S. government securities extremely reluctant to enter, but we will be glad that had been delivered to us for the account of to provide further analysis of the advantages and BONY—was sound, and the Federal Reserve disadvantages. Bank of New York also had further security from I believe it would be wrong to overdramatize BONY. The market could, and did, proceed with this incident. There was a serious operational its business, with minimal disruption. In con- problem that illustrated some potential vulneratrast, had the Federal Reserve Bank of New bilities in the clearing mechanism. But it is also York refused to make payments on behalf of true that the problem could be dealt with effec- BONY as it received government securities for tively within our present arrangements—in that its account, other market participants would sense the system did, in this instance, prove have found themselves short of cash, other "fail-safe." The overnight loan, huge as it was, banks and their customers presumably would was fully secured, with an ample margin of have been forced into overdraft and requests for protection. discount window assistance, and financial pres- But the incident is also indicative of the relesures would have appeared elsewhere. vance of our continuing efforts—and that of the A question about the interest rate charged banks—to control risk in the payments system BONY for the use of the discount window in this and of effective supervision of the participants. circumstance is entirely appropriate. I have been That work may seem mundane and tedious—that assured, and Mr. Corrigan will explain more is, until something goes wrong. Then, it is also fully, that the net result of all financial transac- seen as essential. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 117 Statement of E. Gerald Corrigan, President, forms, ranging from the conventional telephone Federal Reserve Bank of New York, before the to direct interconnection by high-speed comput- Subcommittee on Domestic Monetary Policy of er processors. While the network has thousands the Committee on Banking, Finance and Urban of participants, the vast majority are not "criti- Affairs, U.S. House of Representatives, Decem- cal" participants since operational or other probber 12, 1985. lems at most institutions do not have the potential for major consequences to others and can I welcome this opportunity to appear before this usually be worked around with relative ease. subcommittee to testify about the circumstances However, there are several dozen very large surrounding the malfunction in the government participants, certainly including the Reserve securities clearance mechanism that occurred on Banks and most of our large commercial banks, November 21-22, 1985. Before turning to the that constitute the "critical mass" of the system. specifics of that episode, let me make a few A major interruption in processing by any one of introductory remarks about (1) the workings of these entities does have the potential for more the book-entry system for Treasury securities, generalized problems elsewhere in the system. and (2) the structure and operation of the elec- Unfortunately, but inevitably, such disruptronic network that permits the system to work tions do occur. For example, through December with the speed and efficiency to which we are all 5 this year, there have been 70 days on which the so accustomed. closing of the securities wire has been extended The most important operational characteristic two hours or more. In rough orders of magniof the book-entry system is its "payment against tude, about half these extensions were due to delivery" feature. That is, when bank A sells a hardware problems and half, to software probsecurity from its own account or from a customer lems; although in many instances both hardware account, the security is electronically delivered and software problems appear to have their roots to bank B, and the reserve account of bank B is in very large processing volumes on particular simultaneously and automatically debited to ef- days. Viewed from a different vantage point, fect payment for the security. This feature of about half the extensions were due to problems simultaneous and automatic payment in "final" in a Reserve Bank and half were due to problems funds is central to the efficiency and liquidity of in the very large commercial banks. However, of the market. However, it is because of this feature the 70 episodes, only 4 episodes required the of the system that it is common for large banks, wire to remain open after 10 p.m., and before especially large clearing banks, to have "daylight November 21, none of the episodes produced a overdrafts" in their reserve accounts. And, it is situation in which the day's work was not combecause of this feature that the Federal Reserve pleted. has recently issued for public comment several proposals aimed at controlling daylight overdrafts growing out of such securities processing. THE EVENTS OF NOVEMBER 21-22 These proposals, together with a more detailed discussion of the workings of the book-entry Against that background, the Federal Reserve system, are summarized in appendix A.1 Bank of New York received a routine phone call The electronic network over which transfers of from Bank of New York at about 8:00 a.m., securities and funds take place is a complex web November 21, indicating that Bank of New York involving the Federal Reserve Banks (and their was still in the process of completing its accountbranches), thousands of depository institutions ing and related work growing out of Wednesthroughout the country, and thousands of cus- day's record volume of work and that it would tomers of depository institutions. The electronic not be in a position to begin the processing of linkages between these entities take several Thursday's securities until late morning. In this time frame there was no indication of a major problem at Bank of New York. However, be- 1. The attachments to this statement are available on tween 8:15 a.m. and 10:15 a.m. all the other request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. major market participants began their normal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • February 1986 work flows that entailed deliveries of securities hopeful that the problem would be solved, but to Bank of New York—securities that, in the the fact of the damaged data files did concern me normal course, Bank of New York would rede- greatly. In this time frame, Bank of New York liver for payment to others. Because Bank of was indicating that it expected to be operational New York was not in a position to process and in the period from 6:00 p.m. to 7:00 p.m., which, redeliver these securities, the overdraft in its while late, would still provide ample time to get account began building the moment other banks the day's processing completed while permitting commenced operations Thursday morning. a comfortable margin of time for all parties to get At about 11:30 a.m., we first learned of a their end-of-day accounting and related work software problem at Bank of New York. At that completed for the next day's opening of busitime, the overdraft in Bank of New York's ness. securities account had reached almost $12 bil- Between 4:00 p.m. and 8:30 p.m., numerous lion. While the overdraft position was large for conversations occurred between officials of the that time of day, it was not cause for undue Federal Reserve Bank of New York and Bank of concern in a context in which there was still no New York and, at about 8:00 p.m., the special indication of a sustained outage at Bank of New loan agreements were executed. At about 8:30 York. At about 2:15 p.m., a senior official at p.m., we were advised that Bank of New York's Bank of New York called the Federal Reserve data base problem had been solved and at 8:31 Bank of New York with the first firm indication p.m. we received the first securities transfer that the problem might be much more serious message of the day from Bank of New York. At than had been previously thought. At that time, that time, Bank of New York's overdraft was the overdraft in Bank of New York's securities almost $30 billion. By 10:00 p.m. we had seen account was in excess of $20 billion. only a trickle of securities transfers from Bank of Between 2:15 p.m. and 4:00 p.m., it became New York. And, it was at this time that other increasingly clear that the problem at Bank of problems and constraints began to crowd in on New York was of potentially major dimensions, the situation. These problems included concerns although prospects for recovering still seemed about fatigue, technical constraints associated reasonable. However, it was also in this time with keeping systems operational around the frame that it became very clear that Bank of New country after midnight, and the need to close York's data base of account information and down the systems in time to permit all parties to individual transaction data had been damaged. do the end-of-day processing to produce account As events were to prove, it was the damage to statements that would permit an orderly opening such records that severely complicated the re- of business on Friday. It is important to note covery process at Bank of New York and, as a here that while problems somewhere in the syspractical matter, rendered unworkable several tem are not uncommon, we have never been schemes that might have permitted the problem confronted with a situation that required the to be at least partially mitigated as the day system to be kept open past midnight. proceeded. Nevertheless, the Federal Reserve Bank of When, at about 4:00 p.m., I personally learned New York decided to extend the processing of the apparent damage to data files at Bank of hours as long as possible, based on ajudgment as New York, I immediately requested senior man- to how close we could shave it, while keeping in agement at the Federal Reserve Bank of New mind the time needed to do end-of-day process- York to establish contact with top management ing. Thus, confronted with increasing evidence at Bank of New York to get their appraisal of the of potential problems at other institutions around situation. I also requested my associates at the the country, at about 12:30 a.m. the Federal Federal Reserve Bank of New York to begin Reserve Bank of New York broadcast a message drafting special loan agreements that could be nationwide that the securities wire would close at used if Bank of New York could not solve its 1:30 a.m. and that the funds wire would close at problem, thus necessitating a large loan at the 2:15 a.m. Bank of New York was notified of the discount window. Having been through a num- decision in advance and was told to use the ber of broadly similar situations, I remained remaining time to process whatever it could and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 119 also to go into the market and raise money to providing a sizable margin of excess collateral. reduce further its overdraft. However, given the Since the loan was adequately secured, the Fedhour and because the operating system at Bank eral Reserve Bank of New York was never of New York was, at best, limping along and subject to risk of loss; and since the capital of because it did not have such large credit lines Bank of New York was not impaired, its solvenestablished, Bank of New York's debit position cy was not in question. in its securities account was reduced only to The loan was made at the basic discount rate $24.2 billion when the securities wire was closed of 7.5 percent, which was 54 basis points below at 1:30 a.m. After the close of the cash wire at the prevailing federal funds rate that day. Thus, 2:15 a.m., Bank of New York requested and was looking at the discount window advance itself, granted a discount window advance of $22.6 Bank of New York's interest expenses were less billion. than a "market" rate would have produced. As it turned out, Bank of New York's estimate However, when one takes account of all the of its overall position at 2:15 a.m. was incorrect financial transactions between the Federal Reand, as a result, its reserve account was over- serve Bank of New York and Bank of New York drawn by an additional $1 billion. Thus, the total growing out of this episode, interest savings is credit extended to Bank of New York by the more than offset. Specifically, because of the Federal Reserve Bank of New York was $23.6 penalties assessed on Bank of New York incibillion. dent to the overdraft of $1 billion in its reserve Given the special loan agreements that had account and because Bank of New York's probbeen executed early Thursday evening, the deci- lems prevented the delivery of certain securities sion to grant the discount window advance was to the Federal Reserve Bank of New York, an easy one since the only alternative at that time which Bank of New York ended up financing but would have been an inadequately secured over- on which we, in effect, received the interest draft of $23 billion. In that most fundamental income, the net financial result of all transactions sense, the important issues raised by this episode between Bank of New York and the Federal are not so much the fact of the discount window Reserve Bank of New York was in favor of the advance but rather its terms and, even more Federal Reserve Bank of New York. But, this importantly, the underlying circumstances that result was by chance and leaves open the quespermitted the buildup of the overdraft in the tion of whether there should not be special terms reserve account in the first instance. associated with discount window lending of the nature encountered in this case. The absolute size of the discount window advance is, of course, enormous by any stan- As far as Bank of New York is concerned, the dard. The loan is almost double the size of Bank overall episode entailed direct out-of-pocket of New York and exceeds its capital by a factor costs of about $5 million, which is about 7 of about 23. It is far and away the largest percent of its earnings over the first three quarovernight loan ever made through the discount ters of this year and, more importantly, is a window. This particular advance, however, sizable percentage of the gross revenues that it should not be contrasted with large discount generates via its clearing activities. The cost to window advances to other institutions, such as Bank of New York reflects the fact that it was the extended credit that was provided to the required to finance almost $25 billion in securi- Continental Illinois Bank, since the circum- ties overnight in a context in which the interest stances in these cases are fundamentally differ- income on those securities accrued to those who ent. were due to receive the securities. Indeed, those Under the terms of the special loan agree- individuals and institutions who bought the secuments, the loan was secured by all of Bank of rities in question received a windfall since they New York's domestic assets and by all of the received interest for the day but did not incur any customer securities that they were empowered to cost of financing. pledge for such purposes. We estimate that the Against this background, the subcommittee book value of the assets and securities available has raised a number of questions concerning the to secure the loan was about $36 billion, thereby appropriateness of such a discount window ad- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • February 1986 vance being made at the basic discount rate and this temporary stoppage illustrated all too vividly even larger questions as to whether, in the cir- the potential for more generalized disorder that cumstances, the overall cost of the episode to can result from such a partial shutdown of the Bank of New York reflects the seriousness of the market. situation taken as a whole. With regard to the Fortunately, shortly thereafter Bank of New first of those questions, I believe the episode York regained full operational capabilities and, does point to the need for a reconsideration of with only a few further glitches, we were able to the terms of discount window advances in situa- complete the day's business and close the securitions like this. ties wire at 8:00 p.m. and the funds wire at 8:45 The second question is, however, more diffi- p.m. Bank of New York had repaid its discount cult to deal with, for in the end it raises very window advance in full and had closed the day difficult value judgments. Looked at narrowly, with a comfortable positive balance in its reserve one can argue that the cost to Bank of New York account. as referred to earlier is sizable, keeping in mind As noted earlier, the most basic issues raised that there are indirect, as well as direct costs. On by this episode are not the discount window loan the other hand, it is also true that in the circum- made at 2:15 a.m., Friday. Rather the real issues stances that prevailed on that day, Bank of New are (1) whether there was some alternate course York could not have funded itself any other way of action available during the day on Thursday than at the Federal Reserve nor could it have that would have prevented the overdraft from repositioned or liquidated the securities in ques- developing in the first place, and (2) if not, what tion. In the final analysis, therefore, the ultimate can be done to mitigate against the reoccurrence backup implicit in access to the Federal Reserve of a similar situation in the future. The remaining discount window supports the effective opera- sections of my testimony deal with the second tion of the clearing system, and the question is question, but allow me to say a few words about whether those operating and paying for the sys- the first at this time. tem in fact bear its true costs, including the cost I have rigorously reconsidered, in retrospect, of adequate computer backup facilities. In this the question of whether on Thursday, November regard, I would hope that this experience— 21 we could have, or should have, done anything including its direct and indirect costs to Bank of fundamentally different. My conclusion is that in New York—would powerfully drive home the the particular circumstances that we faced there point that the oft-repeated concerns about pay- was no reasonable alternative course of action ments risk are not simply a matter of abstraction available. That is, given the following: (1) experibut can be very real indeed and demand the ence with generally similar problems in the past; attention of all who operate and manage the (2) Bank of New York's assurance that the system, including the top management of finan- problem would be fixed; (3) the fact that Bank of cial institutions. New York's overdraft was in excess of $15 Of course, the saga of Bank of New York did billion by 12:30 p.m.; (4) the fact that the data not end with the extension of the discount win- files at Bank of New York were damaged; (5) the dow advance at 2:15 a.m., Friday. Indeed, as the fact that the solvency of the bank was not in normal business day opened later on Friday, question; (6) the fact that the opportunity to Bank of New York still was not operational. As a secure the loan was there; and (7) the enormous result, by 11:00 a.m. it had accumulated a further uncertainties, if not disruption, that could result overdraft in its reserve account of $2 billion. from a partial or a complete shutdown of the Faced with this situation, at about 11:30 a.m. we market, I believe that our actions were prudent, temporarily stopped accepting securities trans- disciplined, and appropriate. In saying this, I fers for the account of Bank of New York in an should also confess that in some respects we attempt to stabilize the situation somewhat and were a bit lucky. The day in question was not an to see whether it was practical to prevent further end-of-reserve-period settlement date; it was not increases in the overdraft without causing exces- a day on which there were other problems— sive disruption in the market more generally. As technical or otherwise—in the markets; and undescribed in the next section, experience with like the preceding day, it was not a day in which Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 121 the market was effecting settlement for billions of ondary market transfers over the book-entry dollars in trading in mortgage-backed securities system. These efficiencies contribute importantthat had taken place over the previous month. ly to the liquidity of the market, to the attractiveness to investors of Treasury securities, to the Treasury's ability to carry out debt management IMPORTANCE OF operations, and to the Federal Reserve Bank of THE PAYMENTS MECHANISM New York's ability to carry out Federal Reserve System open market operations. I think it is important to step back from the Perhaps never has the need for an efficient particular situation related to the Bank of New market been more apparent than over the past York's recent clearance problem and to address month when, as a result of repeated delays in some of the broader questions related to the congressional passage of a permanent debt ceiloperations of the payments mechanism. At the ing extension, the Treasury has had to do the outset, let me stress again the importance that we following: (1) announce plans on two occasions attach to maintaining an efficient and a safe to auction for same day delivery and settlement payments system. In a manner of speaking, it new issues of Treasury bills, one of $22 billion represents the financial equivalent of our inter- and another of $15 billion, all of which had to be state highway system, hooking together deposi- sold, delivered, and settled within a period of tory institutions of all sizes throughout the coun- hours, and (2) compact into a period of 11 try, and through them financial and nonfinancial business days in November the auction and firms throughout the world. However, because settlement of more than $100 billion in bills, of the value, the volume, and the speed of traffic notes, and bonds. on the electronic version of the financial inter- It is difficult to imagine how debt management state highway system, the potential for disrup- operations of this size would have been possible tive chain reaction accidents is something that without the benefit of a highly efficient clearing we must take seriously. and settlement system. Moreover, while these Yet, there is a tendency to take for granted examples are somewhat unusual, just citing figthat the payments system will always do the job ures on the normal value and volume of governin a safe and an efficient manner. In fact, only ment securities that clear daily through this syswhen there are highly visible disruptions to the tem—averaging about $200 billion and 27,000 system does the public even take some notice. items—underscores the need for high-speed, effi- And then the public does so typically only for a cient, and reliable clearings. All participants in passing few days. So one of the reasons why we the market—including the dealers, investors, the welcome these hearings, is the opportunity that Federal Reserve, and the Treasury itself—have they provide to reinforce the importance that we come to depend on this system. This dependence attach to keeping our payments system efficient, is not limited just to the efficiency and the reliable, and trusted. availability of the system. Rather, this depen- Much of the focus today is on a particularly dence extends in an ultimately crucial way to its vital element of that overall system; namely, the safety and integrity as well. clearance and the settlement mechanisms for If I ever had any doubts about this system— U.S. government securities. As this subcommit- and I do not think I have—they were laid to rest tee well knows, the market for U.S. government on the second day of the Bank of New York's securities is the largest, the most efficient, and clearance problem. As I noted earlier, on that the most liquid securities market in the world. It day we concluded that it was necessary to estabis true that, in the first instance, the depth and lish a temporary stoppage on securities transfers the resiliency of that market derive from the fact being sent over the system to the Bank of New that the full faith and credit of the United States York. The purpose of this stoppage was to stands behind each U.S. Treasury security. But attempt to stabilize the situation somewhat and, that market also draws considerable strength frankly, to see also whether it was practical to from the speed, the efficiency, and the low prevent further increases in the Bank of New transaction costs that are associated with sec- York's overdraft on our books without causing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • February 1986 excessive market disruption. Operationally, this changes in market practices and clearing techstoppage meant that holders of government secu- niques, it is unrealistic to think of "disconnectrities who had contracts to deliver those securi- ing" a major participant except in circumstances ties against payment to the Bank of New York that, in the end, might require closing the market for one of its customers were temporarily unable as a whole. to make delivery under those contracts. And All this experience naturally raises questions those firms that tried to send securities to the as to our current perspective on the broader Bank of New York—including those firms whose issues related to payments system risk expocomputer systems were preprogrammed to make sures. On that score, I think it is fair to say that such deliveries once the securities were avail- the Federal Reserve has consistently been out able—would have had the transfers rejected. front in calling attention to these issues and to This temporary stoppage was only in effect for the need for initiatives to better control these risk about one and a half hours, and it did not become exposures. Indeed, in the early going, ours was generally known in the market until about one something of a lonely voice on these issues. hour after it was put in place. Yet, even in this More recently, the importance of these issues short period of time, the result was a backup in has been recognized by a broad cross-section of the willingness and the ability of some other bankers, supervisory authorities, and others with market participants to transfer securities among an interest in the strength of our financial systhemselves. This situation was especially true for tem. But, even in the framework of this more other large clearing banks who were suddenly constructive environment, the subject still has an faced with the task of shutting off a segment of aura of abstraction. We hope that the reality of a the flow of preprogrammed outgoing work in loan of $22.6 billion will instill at least some highly automated systems. They also found "religion" into the remaining agnostics on paythemselves in a position of potentially accumu- ments system risk. lating large overdrafts on our books since they Against that background, allow me to suggest could continue to receive transfers but were several broad elements of concern that, in my blocked from sending to a key, large-value end judgment, should remain central to our thinking point. Perhaps most importantly, there was also as we seek to further enhance the reliability of some evidence that investors were beginning to the payments system. These points of emphasis seek to break trades and financing transactions are not new, but, if anything, our recent experiwith dealers who were serviced by the Bank of ences only serve to strongly reinforce their value New York. For those investors selling securities as a framework for addressing payments system to such dealers or seeking financing from them, risk issues: there was the sudden prospect that they could no longer count on making delivery against auto- 1. Operating the nation's payments system is matic payment, as well as the uncertainty as to an intrinsic function of banks and the central whether they would be held financially responsi- bank that is inexorably and irreversibly tied to ble for a failure to make good delivery. the other functions of both. As an extension of Fortunately for all concerned, the Bank of this point, I am not at all sure that we can New York was able to restore normal operations continue indefinitely to process an ever-increaswithin a short time after the stoppage was put in ing volume of payments against an ever-decreasplace. So we did not have to confront a general ing level of cash balances in the system. stoppage in market activity or clearings that day. 2. Operating the payments system is not limit- Yet all this action did was raise the specter of ed to pushing paper or to computer blips—as potentially larger and more disruptive problems important as these processes are—but fundashould for any reason market participants sud- mentally entails continuous extensions of credit denly have to confront doubts about their ability and hundreds of credit decisions a day. The to clear government securities over this system "back office" must be incorporated into the in a safe, assured, low-risk manner. So what I "front office." conclude from this experience is that, at least as 3. All participants in the major payments systhings now exist and without potentially major tem have public responsiblities, including the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 123 responsibility to take the larger, longer look at can be viewed in each case as supported by the the manner in which their decisions, their sys- underlying U.S. government securities, but it tems, and their behavior add to or detract from still constitutes credit. Most other large dollar not just the speed and efficiency of the system payment transactions do not have the built-in but also its strength and integrity. protections provided by the book-entry system 4. And, since no system can ever be complete- as it pertains to payment against delivery of U.S. ly fail-safe, in either a credit or operational government securities. Thus, if credit decisions sense, all major participants have a collective are central to these transactions, they can only interest in pursuing initiatives to lower the aggre- be even more important in the case of other large gate risk in the system and to provide the means dollar payment transactions. to continue operations despite a problem at any If, as I maintain, provision of large dollar major link. payments and clearing services fundamentally entails managing credit exposures, then an im- Let me expand briefly on each of these points portant aspect of controlling payments risk is and what they imply. improved programs to address these credit expo- For some time now, I have emphasized what I sures. For our part, we have been active on at regard as the "special" functions that are per- least the following five fronts in this regard: formed by banks in our financial system and our economy generally—functions that justify the 1. We have forced a broad-based dialogue on existence of the public safety net of federal the general subject of payment risk, and we are deposit insurance and central bank discount win- now at the center of efforts to implement a dow support and that warrant the regulation and program to control large dollar payments risk. the supervision of banks and companies that own 2. We are working closely with other bank and operate them. Operation of the payments supervisory agencies to promote strong internal system is one of those special core functions. bank policies and controls over settlement risk. From my perspective, this principle is firmly 3. We are further stepping up our own bank established in our traditions, if not laws, but is examination efforts in the reviews of payment increasingly challenged by developments in the risk and clearing operations. In this regard, the marketplace and, if I may be frank, by lack of Board's recently announced initiative to expand developments in the Congress. The linkage be- the frequency and the scope of examinations of tween direct access to operations of the pay- large banks will enable us to do some in-depth ments system, access to the banking safety net, target examinations of clearing operations withand acceptance of the regime of banking regula- out foregoing a regular full scope safety and tions and supervision is central to efforts to soundness review of the overall bank. ensure the public interest in the strength and the 4. We are strengthening our internal systems integrity of the payments system. and back-up capabilities on FedWire to monitor Just as I believe that you cannot separate developments and to control them as the need operations of the payments system from the arises. functions of banks and the central bank, I also 5. We are expanding still further our analytical feel that you cannot separate processing of large and empirical efforts to better understand the dollar payments and clearings from the credit workings of financial markets and institutions so extension process. The present operations of the that we can be better equipped to head off book-entry clearing system amply demonstrate problems as well as to respond to problems if and this point. As I have noted earlier, perhaps the when they arise. single most important operational characteristic of that system is the ability to make delivery of As a general matter, bankers and their customsecurities against simultaneous receipt of final ers have also become much more attentive to the payment. This same feature often results in the need to monitor and control credit exposure to clearing bank in effect extending daylight credit payments risk. This heightened awareness to risk to its customers and in Reserve Banks extending is a constructive development, but in a highly such credit to the clearers. To be sure, that credit competitive environment, awareness does not Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • February 1986 easily translate into concrete actions to limit risk months, been considering the costs and the beneacross the board. And, at the other extreme, fits of establishing a fully equipped back-up there is always the danger that reactions can go center within convenient reach of our main oftoo far and lead to greater defensiveness or steps fice. While such a facility would be very expenat self-protection that can harm the functioning sive, it seems to me that we must be prepared to of the system as a whole. So even on this front give serious consideration to such an arrangewe have to find the right balance between con- ment—despite its costs. trolling credit exposures and not shutting off the Finally, while I have no doubt that more can, flow of credit needed to keep the system func- and will, be done by individual institutions to tioning. strengthen their operations and to improve credit While much of our public emphasis and that of controls, it is unrealistic to expect that we will the industry has been on the issues of credit risk, ever achieve a fail-safe payments system in eiwe have not been ignoring the need to strengthen ther an operational or a credit sense. To use the the operational systems that are used for large episode of Bank of New York as a case in point, dollar clearings and settlement. The case for it is not at all clear that even the most elaborate effective back-up systems is clear, but a vision as and expensive back-up system would have mateto what constitutes "effective" is somewhat elu- rially altered its capacity to respond to the particsive. At one time, the term "effective" implied ular problem once the apparent limitation in the that every major participant had redundant com- software was in place since the same software puter processors and communication lines, to- would have been in place at a back-up facility. gether with the ability to shift quickly from its To me this underscores the collective interest main system to its back-up processor if a prob- that all participants in the payments and clearing lem occurred. Then, when it became apparent systems have in exploring ways to limit the that smooth, uninterrupted electrical power impact of operational disruptions or credit probcould not be taken for granted, various forms of lems on the system. As far as the operational side sources of back-up power became more the rule is concerned, a common goal could be to have in than the exception. Still later, as the volume and place effective operating techniques to bypass the value of transactions grew exponentially, any one link in the system and thus to permit the finely tuned elements of contingency planning continued functioning of at least the largest payand exceptions management began to take hold ments despite an extended operational outage at in a context in which it was increasingly recog- any one participant. In terms of the credit side, nized that the implications of major and extended this procedure has to translate into a collective outages somewhere in the system—including at a willingness to explore changes in clearing tech- Federal Reserve Bank—could be highly disrup- niques and changes in market practices that tive. would help reduce aggregate credit risk in the As impressive as these developments were, clearing system without impairing the smooth experience shows that more effort is needed. We functioning of the markets that those systems must, for example, improve our ability to diag- serve. Neither of these goals will be easily nose and respond to problems whether of the achieved. On the operational side, further costly software variety or of some form of hardware or investments in back-up arrangements will be other physical disruption to a data communica- required. On the credit side, achieving the goals tions center that could knock out both a main means rethinking market practices that have system and a back-up system, which are typical- evolved over many years and that should not be ly located in the same location. Within the Feder- changed without careful consideration of possial Reserve, we are developing remote site back- ble unintended side effects. up arrangements at Culpeper, Virginia, to support our Fed Wire system. But, in my person- SUMMARY AND CONCLUSIONS al view, even this arrangement may not be adequate to assure sufficiently quick recovery from In the course of the preceding elements of this any major outage at the New York Reserve testimony, I have referred to a number of steps Bank. For this reason we have, for many that seem, to me, to warrant particular attention Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 125 as we seek to provide a higher level of assurance institution, and (4) efforts to press ahead with that episodes of the nature experienced on No- stronger back-up facilities on the part of the vember 21-22 are not repeated. In the very near Federal Reserve and other major participants term, the priorities seem to lie in four areas: (1) even though such facilities may be quite costly. considerations relating to the terms under which In a somewhat larger time frame, we must also discount window credit is extended in similar look with care for opportunities to alter market situations, (2) the development of better tech- practices and incentives in ways that can niques to secure securities-related daylight over- strengthen reliability and reduce risk while at the drafts, (3) efforts to explore possible opportuni- same time preserving the liquidity and the effities whereby dealers and others may be able to ciency of the market. That change will not be bypass operational blockages even at a major easy, but it must be done. • Statement by William Taylor, Director, Division banks were 26 percent and 37 percent respectiveof Banking Supervision and Regulation, Board ly, while the percentage for savings and loan of Governors of the Federal Reserve System, associations exceeded 90 percent. Moreover, the before the Subcommittee on Commerce, Con- real estate loans of state member banks have sumer, and Monetary Affairs of the Committee generally expanded at a slower pace over the on Government Operations, U.S. House of Rep- current decade than have such loans at other resentatives, December 12, 1985. depository institutions. Indeed, the growth of real estate loans at state member banks was I appreciate the opportunity to appear before this slower than the expansion of other components committee today to discuss the impact that faulty of their loan portfolios, so that the ratio of real and fraudulent real estate appraisals may be estate loans to total loans has edged down slighthaving on federally insured depository institu- iy. tions. In your letter you requested that the But while real estate loans would thus appear Federal Reserve respond to a number of ques- to pose less of a potential problem in the case of tions on the policies and the procedures that it state member banks, we nonetheless agree that follows in reviewing property appraisals for real there is a good reason at this time for the Federal estate loans and on our experience regarding the Reserve as well as the Congress to be concerned extent to which such appraisals have been found with conditions in the real estate market, with to be inaccurate, either because of faulty proce- the policies and practices that have been, and are dures or fraud. The Federal Reserve's answers being, followed by financial institutions in makto these questions—which in the case of certain ing real estate loans and with the procedures that questions incorporate, as you requested, the the federal agencies are following in supervising responses of the Federal Reserve Banks of At- such activities. lanta, Dallas, San Francisco, and Chicago—are As this committee is well aware, important presented as an attachment to my statement.1 areas of the nation's real estate market are Let me begin by noting that real estate loans currently experiencing serious difficulties and constitute a smaller proportion of the loan port- are creating problems of varying degrees of sefolios of state member banks than is the case for verity for our financial institutions. The most other groups of depository institutions. As of dramatic situation can be found in the market for June this year, real estate loans accounted for farmland, where, given the generally depressed approximately 16 percent of the total loans of condition of our farm sector, prices in many state member banks; in comparison, the percent- areas have dropped very sharply over the past ages for national banks and state nonmember couple of years. As a result, landowners have generally experienced a substantial decline in their wealth, and, unfortunately, in all too many cases have been unable to service their mortgage 1. The attachments to this statement are available on indebtedness. Thus, financial institutions, too, request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. have incurred large losses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • February 1986 Serious strains have also developed in the late 1960s and throughout the 1970s affected, and commercial real estate markets, particularly for to some degree continues to affect, the thinking office buildings, in many cities of our country. of participants in this market. Over that period Construction of office space has been outpacing the general experience was that, if not seriously demand for several years now, and office vacan- flawed in design or construction, real estate cy rates have been rising. These developments projects would eventually prove to be profitable. have been most apparent in a number of the Thus, the view developed—and still continues to sunbelt cities that experienced boom conditions be expressed today—that while a newly conin the late 1970s and early 1980s, but also can be structed building might remain considerably unincreasingly found in a number of other cities. deroccupied for a time, eventually inflation along Moreover, incoming data continue to suggest with growth of the local economy would assure that the situation in many cities may be getting its sale at a price that provided a profit for the worse as construction of new office space contin- developer as well as the full repayment of loans ues to outpace the rate of its absorption. Thus that financed the project. But while widely held, vacancy rates have continued to rise, in many this view has clearly been proved wrong as cases to levels unprecedented in the post World inflation has been brought under control and as War II period, and developers have been unable growth of local economies has slowed. Here to get their buildings leased up sufficiently either again, however, the failure of appraisals to hold to promote their sale or to meet the servicing up appears traceable not primarily to fraud or to requirements on construction loans. As a conse- faulty procedures but to the sharp shift in market quence, lenders in all too many cases have either conditions that was unexpected by appraisers as become unexpected owners of buildings with well as a great many other market participants. much empty office space or have found it neces- Having offered that general judgment, howevsary to renegotiate loans to lengthen their maturi- er, let me go on to say that it is now necessary for ty and to provide additional funds to support the developers, lending institutions, investors, and leasing efforts of the developer. appraisers to recognize that economic conditions Relevant to today's hearing, the important have clearly changed, and to incorporate that question that needs to be answered with regard fact into the assumptions on which property to these conditions is the extent to which they values are based. It is my understanding that can be attributed to faulty or fraudulent property such a process is beginning to be clearly evident appraisals. I have little doubt that there have in the appraisals that are being made for new been cases in both the market for farmland and construction projects. That process, I must say, for commercial properties in which loans have appears to have taken a really long while, but been made based on fraudulent or faulty apprais- experience suggests that expectations—which als. Human nature being what it is, that situation are generally based heavily on extrapolation of would seem to be unavoidable. But I do not past trends—are slow to change. Besides influbelieve that the problems are primarily or even encing appraisals for new property, however, it largely traceable to such appraisals. Farmland is equally important that the shift in current appraisals that now appear to be much too high, economic conditions and the outlook for future for example, were made when there were boom conditions be properly taken into account in conditions in the market, and it was a common reviewing appraisals that were formulated at view that land prices would continue moving up earlier times on older properties under more as they had moved over a long preceding period. optimistic conditions. More specifically, it is One cannot expect those appraising property to necessary for lending institutions observing that be better at forecasting a sharp change in eco- a building has failed to lease up or is leasing up nomic conditions than others in the marketplace. only after substantial concessions not to continue to rely on an appraisal based on the assump- Much the same kind of economic dynamics tions that more favorable conditions would preaccounts for the fact that property appraisals in vail. That is to say, while an appraiser and a the commercial real estate market also now banking institution should not be expected to appear unrealistically high in many cases. The "call" a marked turn in economic conditions, it long period of inflation that was recorded in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 127 is most reasonable to expect that, once it is clear field testing these guidelines with the intention of that such a turn has occurred, it be quickly eventually adopting them. recognized. Besides this initiative, the Federal Reserve is There is, of course, as I have indicated, a gap undertaking a program to enhance its general between when circumstances first change and supervisory activities, and this program will have when that change begins to significantly offset important implications for identifying and corthe expectations of market participants. There is recting problems in the real estate loan portfolios good reason to expect, then, that as time goes of the banking organizations that we supervise. I by, institutions will become increasingly inclined will not take the time to recount that entire to revise overstated appraisals to make them program here today, but I would like to report more consistent with conditions. that one of its important elements will be to To speed that process, however, and thus generally increase the frequency by which exachieve a clear picture of the true state of real aminations of state member banks and inspecestate loan portfolios, the federal banking agen- tions of bank holding companies are conducted. cies have developed guidelines that will work to We hope, and expect, to enlist the participation formalize and help promote uniformity in proce- of state banking departments in carrying out this dures followed in classifying problem real estate new frequency, but in all cases it is our intention loans. An important element of these guidelines to ensure that all state member banks and all but is that the appraisals of property underlying real the smallest bank holding companies are examestate loans will be carefully questioned, and ined at least once each year. Moreover, in conwhen it appears that the property is overap- ducting these examinations and inspections we praised, the bank will be required either to adjust intend to intensify our scrutiny of loan portfolios, down the appraisal immediately or to have the including real estate loans. property reappraised by an independent apprais- As I have reviewed, there are serious prober. Obviously when this process results in a lems in certain areas of the real estate market reduction in the estimated value of the property today that are posing problems of greater or supporting a loan, it may be necessary for the lesser severity for depository institutions. I examiner to classify the loan, to require the bank would conclude by saying that the Federal Reto add to its loan-loss reserve, and in some cases serve is taking steps that we deem appropriate to require the recognition of loss, when appropri- and necessary to address these problems. • ate. The Federal Reserve is now in the process of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON NOVEMBER 4-5, 1985 at 40.7 hours, and factory overtime rose slightly. The civilian unemployment rate was unchanged 1. Domestic Policy Directive at 7.1 percent. The index of industrial production edged down The information reviewed at this meeting indicat- in September and increased at an annual rate of ed that growth in real GNP, which had picked up only 1.1 percent during the third quarter. Nearly in the third quarter from the relatively slow pace two-thirds of that rise was attributable to producin the first half, appeared to be continuing at a tion of motor vehicles. Output of defense and relatively modest rate. Broad measures of prices space equipment and of construction supplies and wages appeared to be rising at rates close to remained strong while production of durable or somewhat below those recorded earlier in the goods materials and energy materials declined year. over the period. The capacity utilization rate for Total retail sales increased considerably fur- total industry fell 0.3 percentage point in Septemther in September, after a strong rise in August. ber, reversing the August increase. At 80.2 per- But the gains in both months were attributable cent, the rate was about IV2 percentage points primarily to a surge in auto sales occasioned by below its year-earlier level and its average for the financing incentive programs during the period. 1967-84 period. As expected, the surge proved temporary, and Total private housing starts fell in September sales of domestic automobiles dropped to an and in the third quarter as a whole, with declines annual rate of 6lA million units in October from registered in both the multifamily and single- 1VA million in the preceding month. Outlays for family sectors. But sales of new homes were discretionary purchases other than autos were higher during the quarter and sales of existing generally lackluster in recent months; spending homes were up more than 10 percent on average. at general merchandise and apparel stores and at Moreover, newly issued permits for residential furniture and appliance outlets, for example, construction rose for the fourth consecutive changed little on balance in the third quarter. But quarter and a recent survey of consumer sentiwith overall spending boosted by the transitory ment showed that favorable attitudes toward spurt in auto sales, the personal saving rate homebuying reached their highest level on recdropped to less than 3 percent in the third ord. quarter—an extraordinarily low rate historically. Incoming information generally suggested a Total nonfarm payroll employment rose about leveling of business capital spending. Shipments 415,000 in October, substantially above the aver- of nondefense capital goods fell in September age monthly increase of 225,000 posted over and were essentially flat for the third quarter as a preceding months of the year. To some extent, whole. However, business spending for motor however, the October gain balanced out a weak- vehicles advanced sharply in the quarter and, on er-than-usual advance in September; the average balance, has accounted for virtually all of the rise increase over the two months was 275,000. Ser- in business equipment expenditures this year. vice industries and finance and trade establish- New orders for nondefense capital goods, exments continued to record job gains during the cluding the volatile components of aircraft and two-month period, while manufacturing employ- parts, rose about PA percent in the quarter but ment edged down further. In October, the length on balance have shown little change thus far in of the factory workweek remained relatively high 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

129 Over the first three quarters of 1985, most text of satisfactory economic performance, given aggregate measures of inflation have evidenced the very rapid expansion in Ml in other recent some slowing from the rates posted in 1984, months. The members agreed that somewhat mainly reflecting downward pressures on prices greater or lesser reserve restraint would be acof food and energy items. In September, the ceptable over the intermeeting period, depending producer price index for finished goods fell 0.6 on the behavior of the monetary aggregates and percent, leaving the index about unchanged on taking account of appraisals of the strength of the balance since the beginning of the year. The business expansion, the performance of the dolconsumer price index rose 0.2 percent in Sep- lar in foreign exchange markets, progress against tember for the fifth consecutive month, down inflation, and conditions in domestic and internasomewhat from the average monthly increase tional credit markets. It was understood that earlier this year and during 1984. On the wage policy might be implemented with somewhat side, the index of average hourly earnings rose at more flexibility than usual over the relatively an annual rate of only 1 percent in the third short intermeeting period, given the uncertainquarter and 2Vi percent over the first nine ties associated with particularly sensitive condimonths of the year, compared with an increase of tions in the foreign exchange and other markets. about 3 percent in 1984. However, the employ- The intermeeting range for the federal funds rate ment cost index, which takes account of non- was retained at 6 to 10 percent. wage benefits and salaries of white-collar work- Ml appeared to have changed little on balance ers as well as hourly wage earners, has risen at in October and may have declined slightly after an annual rate of about 43A percent thus far this several months of rapid expansion; but it reyear, a little above last year's rate. mained well above the range set by the Commit- The trade-weighted value of the dollar against tee in July of 3 to 8 percent at an annual rate for major foreign currencies had declined about 1 Vi the period from the second quarter to the fourth percent further on balance since the Committee's quarter of the year. M2 and M3 apparently grew meeting on October 1, bringing its net deprecia- sluggishly during the month, reflecting a moderation during the period after the G-5 announce- tion in their nontransactions components as well ment on September 22 to nearly 8 percent. as the weakness in Ml. As a result, by October Intervention sales of dollars by U.S. and foreign M2 apparently had moved to a level a bit below authorities were relatively large. With respect to the upper end of its annual range, while M3 was individual currencies, the dollar's depreciation still near the middle of its long-run range. Expanhad been considerably greater against the Japa- sion in total domestic nonfinancial debt had nese yen than against major European curren- remained relatively rapid and continued to be cies. Preliminary data on U.S. merchandise trade somewhat above the upper end of its monitoring for the third quarter, which need to be interpret- range for the year. ed with an extra amount of caution in light of Growth of total reserves slowed in October to uncertainties in the statistical reports, suggested an annual rate of about AVi percent, in associathat imports rose somewhat more than had been tion with the marked deceleration in transactions estimated earlier and that the trade deficit may accounts. Nonborrowed reserves rose somewhat have widened slightly in the quarter. more rapidly than total reserves, however, as At its meeting on October 1, 1985, the Com- borrowing from the discount window fell from a mittee had adopted a directive that called for temporarily inflated level at the end of Septemmaintaining the degree of pressure on reserve ber that was related to disruptions from the positions sought in the weeks before the meeting. hurricane on the East Coast and to end-of- That action was expected to be consistent with quarter statement date pressures. Over the full growth of both M2 and M3 at annual rates of reserve maintenance period ending October 23, around 6 to 7 percent for the period from Sep- the level of adjustment plus seasonal borrowing tember to December. Over the same period, averaged $470 million. growth in Ml was expected to slow markedly— The weekly federal funds rate generally moved also to an annual rate of 6 to 7 percent—and even in a range of about 77/s to SVs percent and slower growth would be acceptable in the con- averaged 8 percent for the five weeks preceding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 Federal Reserve Bulletin • February 1986 this meeting. Interest rates on short-term Trea- abnormally low third-quarter level. Views on the sury securities were up about 10 to 20 basis outlook for housing differed to some extent, with points over the period since the October 1 meet- some members emphasizing the reduced levels ing of the Committee, while rates on private of mortgage rates and current activity in resale short-term market instruments were little markets while others stressed the negative implichanged to down somewhat. Most long-term cations of generally tighter lending standards. rates fell about 25 to 35 basis points. The average Growth in business fixed investment had already rate on new commitments for fixed-rate conven- slowed markedly and the possibility of further tional home mortgage loans declined about 15 weakening was suggested by a number of current basis points to around 12 percent. indicators, including recent surveys of business The staff projections presented at this meeting spending plans and reports of deteriorating busisuggested that growth in real GNP would contin- ness sentiment in some parts of the country. ue at a relatively modest pace for the remainder With a ready availability of financing, commerof this year and throughout 1986. The staff con- cial construction remained strong in many areas tinued to expect the average unemployment rate and might continue to hold up for a time. Howevto change little over the projection horizon, and er, at least some types of construction such as the rate of increase in prices to remain close to office buildings appeared to be vulnerable to that experienced in the past few years. excess capacity and to possible changes in tax During the Committee's discussion of the eco- laws relating to real estate investments. Though nomic situation and outlook, members comment- agricultural conditions varied in different parts of ed that, on the whole, the latest information the country, members commented that there suggested a more sluggish economic perform- were few, if any, signs of general improvement, ance than had been indicated earlier. Nonethe- and growth of income in agriculture and associatless, several members felt that further economic ed industries was considered likely to be weak expansion broadly in line with the staff forecast over the next few quarters. remained a reasonable expectation for the year The outlook for foreign trade was viewed as ahead. In general, the members did not antici- especially difficult to discern. A reduced value of pate that any major sector of the economy would the dollar could be expected to foster improveprovide a strong fillip to the expansion, but they ment in the trade balance over time, with favorthought further growth was likely to be sustained able repercussions on domestic economic activiby at least modest gains in several key sectors of ty and lessened incentives to close domestic the economy. At the same time, a number of production facilities or to relocate them abroad. members gave considerable emphasis to possible The extent of progress in lowering the trade harbingers of a very sluggish economy. One deficit over the year ahead was highly uncertain, member referred to the risk that the expansion however, and would depend not only on the itself might falter if persisting problems and performance of the dollar but importantly also on financial strains in some sectors of the economy appropriate economic policies, including satiswere not contained. The members recognized factory progress in reducing federal budgetary that under current circumstances their forecasts deficits. Over time, stronger economic growth in were subject to a great deal of uncertainty, and other industrialized countries and more open particular reference was made to the outlook for markets abroad would also be needed. legislation to reduce the federal budget deficit While it was believed that the drop in the and to the behavior of the dollar in foreign dollar since the G-5 meeting would tend to exert exchange markets. a positive effect on the economy by relieving In the course of the Committee's discussion, a pressures on export and on import-sensitive innumber of members observed that consumer dustries, it was also pointed out that an unduly spending was likely to continue to expand but large and rapid depreciation could have the pothat its growth would be constrained by prospec- tential for unsettling economic consequences untively limited increases in real disposable in- der present circumstances. One member comcome, relatively high consumer debt burdens, mented that rising prices were already being and a possible rise in the saving rate from its reported for a few imported materials, apparent- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 131 ly as a consequence of earlier reductions in the ity during the fourth quarter, a steady degree of value of the dollar. The members were also reserve pressure was likely to be associated with concerned that, at a time when the deficit in the some pickup in growth of all the monetary aggre- U.S. current account continued to require large gates over the remainder of the quarter from the net inflows of funds from abroad, any consider- reduced October pace. For the three-month periable reduction in the willingness of investors to od as a whole, their rates of expansion would accumulate dollar assets could exert upward probably be close to, possibly a bit below, those pressure on domestic interest rates as well, with anticipated at the time of the October meeting. damaging implications for interest-sensitive sec- If these expectations for the fourth quarter tors of the domestic economy and for several were realized, they would represent less monedeveloping countries burdened by international tary growth than had occurred in the third quardebt problems. Time was required to make, in an ter—substantially less in the case of Ml. Even orderly way, the adjustments in domestic spend- so, growth in Ml would remain well above the ing and production that would be needed if the rebased range for the second half of 1985. The balance of trade were to move toward a more Committee had established that range at the July sustainable level. Those adjustments would be meeting on the presumption that the relationship greatly facilitated by a substantial reduction over between Ml and broad measures of economic time in the federal budget deficit and could be activity would move toward a more normal patdisruptive without it. tern following the sizable and unusual decline in At its meeting in July the Committee had Ml velocity in the first and second quarters. But reviewed the basic policy objectives that it had Ml velocity dropped even more in the third established in February for growth of the mone- quarter. While the expansion of Ml was expecttary and credit aggregates in 1985 and had set ed to slow considerably in the fourth quarter to a tentative objectives for expansion in 1986. For rate much closer to that of nominal GNP, even a the period from the fourth quarter of 1984 to the substantial tightening of reserve conditions and a fourth quarter of 1985, the Committee had reaf- sharp rise in interest rates might not bring this firmed the ranges for the broader aggregates set aggregate within the Committee's range for the in February of 6 to 9 percent for M2 and 6 to 9Vi second half as a whole. As they had at previous percent for M3. The associated range for total meetings, the members agreed that the behavior domestic nonfinancial debt was also reaffirmed of Ml needed to be judged in the context of the at 9 to 12 percent for 1985. With respect to Ml, performance of the economy and the fact that the the base was moved forward to the second broader aggregates were growing at rates within quarter of 1985 and a range of 3 to 8 percent at an their ranges. Under prevailing circumstances, annual growth rate was established for the period and unless the dollar declined sharply further, to the fourth quarter of the year. For 1986 the the strength of Ml thus far did not appear to Committee had agreed on tentative monetary suggest strong inflationary consequences. Thus, growth objectives that included reductions of 1 aggressive efforts to reduce its growth beyond percentage point in the upper end of the Ml the slower pace that was already expected were range and Vi percentage point in the upper end of deemed to be unwarranted, especially in light of the M3 range. The provisional range for total the financial strains and other problems in some domestic nonfinancial debt was reduced by 1 sectors of the economy and the attendant risks to percentage point for 1986. the expansion itself. Accordingly, the members concluded that growth of Ml above its target The Committee turned to a discussion of polirange would be acceptable for the second half of cy implementation for the forthcoming interthe year. Growth of M2 and M3 within their longmeeting period, and most of the members indirun ranges continued to be appropriate. cated that they were in favor of maintaining reserve conditions essentially unchanged, at In the Committee's discussion of possible inleast initially following today's meeting. The termeeting adjustments in the degree of reserve members took account, among other things, of restraint, members could foresee conditions that an analysis, which suggested that, given the would call for either some easing or some tightprospect of modest expansion in economic activ- ening. Most of the members felt that policy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 Federal Reserve Bulletin • February 1986 implementation should be particularly alert to rose considerably further, but the gain was boosted by opportunities for some easing in light of the a temporary surge in auto sales that was reversed in relatively sluggish growth in domestic economic October. Total nonfarm payroll employment increased considerably in October, following a much slower activity and the favorable price performance, advance in September, and the civilian unemployment subject to the constraint imposed by a desire to rate was unchanged at 7.1 percent. In recent months minimize the risk of inducing unacceptably faster industrial production has increased only slightly on growth in money and credit. It was also empha- balance. Housing starts fell in September, but sales of sized that account needed to be taken of the new and existing homes remained at a relatively high level on average. Incoming information generally sugbehavior of the dollar on foreign exchange margests a leveling of business capital spending. Merchankets in any policy adjustments. One member dise trade data for the third quarter indicate that the urged giving considerable weight to the behavior deficit widened slightly, as imports continued to inof Ml in relation to expectations, with no pre- crease. Broad measures of prices and wages appear to sumptions regarding the direction of any inter- be rising at rates close to or somewhat below those recorded earlier in the year. meeting adjustment in the degree of reserve Ml appears to have shown little net change in restraint. October following several months of rapid expansion. At the conclusion of the Committee's discus- Largely reflecting the weakness in Ml, growth in M2 sion, most of the members indicated their accept- and M3 apparently was quite moderate in October. Expansion in total domestic nonfinancial debt has ance of a directive that called for maintaining remained relatively rapid. Most short-term market about the current degree of reserve restraint. interest rates have changed little on balance since the Given the sensitivity of economic and financial October 1 meeting of the Committee, while long-term conditions and exchange market developments, rates have declined somewhat. The trade-weighted it was understood that policy would be imple- value of the dollar against major foreign currencies has dropped slightly further on balance since October 1, mented with some added degree of day-to-day following a substantial decline after the September 22 flexibility. The members expected such an apmeeting of the Finance Ministers and Central Bank proach to policy implementation to be consistent Governors of the G-5 countries. with growth of both M2 and M3 at an annual rate The Federal Open Market Committee seeks to fosof about 6 percent for the period from September ter monetary and financial conditions that will help to to December. Over the same period, Ml was also reduce inflation further, promote growth in output on a sustainable basis, and contribute to an improved patexpected to expand at an annual rate of around 6 tern of international transactions. In furtherance of percent, but in light of its very rapid growth in these objectives the Committee at the July meeting the third quarter, slower growth in this aggregate reaffirmed ranges for the year of 6 to 9 percent for M2 would be acceptable. Somewhat greater reserve and 6 to W2 percent for M3. The associated range for restraint might, and somewhat lesser restraint total domestic nonfinancial debt was reaffirmed at 9 to 12 percent. With respect to Ml, the base was moved would, be acceptable depending on the behavior forward to the second quarter of 1985 and a range was of the monetary aggregates over the intermeeting established at an annual growth rate of 3 to 8 percent. period and taking account of appraisals of the The range takes account of expectations of a return of strength of the business expansion, the perform- velocity growth toward more usual patterns, following ance of the dollar on foreign exchange markets, the sharp decline in velocity during the first half of the year, while also recognizing a higher degree of uncerprogress against inflation, and conditions in dotainty regarding that behavior. The appropriateness of mestic and international credit markets. The the new range will continue to be reexamined in the members agreed that the intermeeting range for light of evidence with respect to economic and finanthe federal funds rate, which provides a mecha- cial developments including developments in foreign nism for initiating consultation of the Committee exchange markets. More generally, the Committee agreed that growth in the aggregates may be in the when its boundaries are persistently exceeded, upper parts of their ranges, depending on continuing should be left unchanged at 6 to 10 percent. developments with respect to velocity and provided At the conclusion of the meeting, the following that inflationary pressures remain subdued. domestic policy directive was issued to the Fed- For 1986 the Committee agreed on tentative ranges eral Reserve Bank of New York: of monetary growth, measured from the fourth quarter of 1985 to the fourth quarter of 1986, of 4 to 7 percent The information reviewed at this meeting suggests for Ml, 6 to 9 percent for M2, and 6 to 9 percent for that economic activity is continuing to expand at a M3. The associated range for growth in total domestic relatively modest pace. In September, total retail sales nonfinancial debt was provisionally set at 8 to 11 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 133 percent for 1986. With respect to Ml particularly, the of economic expansion closer to the faster Committee recognized that uncertainties surrounding growth expected by Committee members early recent behavior of velocity would require careful this year. reappraisal of the target range at the beginning of 1986. Moreover, in establishing ranges for next year, the Committee also recognized that account would need to be taken of experience with institutional and deposi- 2. Authorization for tory behavior in response to the completion of deposit Domestic Open Market Operations rate deregulation early in the year. In the implementation of policy for the immediate future, the Committee seeks generally to maintain On December 9, 1985, the Committee approved a about the existing degree of pressure on reserve posi- temporary increase of $1 billion, to $7 billion, in tions. This action is expected to be consistent with the limit between Committee meetings on growth in M2 and M3 over the period from September changes in System Account holdings of U.S. to December at annual rates of about 6 percent. Ml government and federal agency securities specigrowth over the period at an annual rate of around 6 percent is also anticipated; slower growth for that fied in paragraph 1(a) of the authorization for aggregate would be acceptable in the context of satis- domestic open market operations. The increase factory economic performance, given the very rapid was effective immediately for the intermeeting growth in Ml over the summer. Somewhat greater period ending with the close of business on reserve restraint might, and somewhat lesser reserve December 17, 1985. restraint would, be acceptable depending on behavior of the aggregates, taking account of appraisals of the strength of the business expansion, developments in Votes for this action: Messrs. Volcker, Balles, foreign exchange markets, progress against inflation, Black, Forrestal, Keehn, Martin, Partee, Rice, Ms. and conditions in domestic and international credit Seger, and Mr. Timlen. Votes against this action: markets. The Chairman may call for Committee con- None. Absent and not voting: Messrs. Corrigan and sultation if it appears to the Manager for Domestic Wallich. (Mr. Timlen voted as alternate for Mr. Operations that reserve conditions during the period Corrigan.) before the next meeting are likely to be associated with a federal funds rate persistently outside a range of 6 to This action was taken on the recommendation 10 percent. of the Manager for Domestic Operations. On December 9, the Manager had advised that out- Votes for this action: Messrs. Volcker, Corrigan, right purchases of securities thus far in the Balles, Black, Forrestal, Keehn, Partee, Martin, and Rice. Vote against this action: Ms. Seger. intermeeting interval had reduced the leeway Absent and not voting: Mr. Wallich. under the usual $6 billion limit to slightly over $1.2 billion. Additional purchases of securities in Ms. Seger dissented because she believed that excess of that leeway were likely to be necessary some reduction in the degree of reserve restraint over the remainder of the intermeeting period, was needed to help relieve financial strains in the largely to offset reserve drains associated with economy, and to promote a more acceptable rate seasonal increases in currency in circulation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 Announcements AMENDMENT TO REGULATION D The Federal Reserve Board has also issued an amendment to Regulation D concerning reserve The Federal Reserve Board has announced an requirements on money market deposit accounts increase in the amount of net transaction ac- held by Hawaiian nonmember depository institucounts to which the 3 percent reserve require- tions, effective January 2, 1986. ment will apply in 1986 from $29.8 million to $31.7 million. The Board also increased the amount of reservable liabilities in depository PROPOSED ACTIONS institutions that are subject to a zero percentage reserve requirement from $2.4 million to $2.6 The Federal Reserve Board on December 26, million. These adjustments take effect beginning 1985, issued for comment proposed amendments December 31, 1985. to Regulations D and Q (Interest on Deposits) to The Monetary Control Act requires the Board preserve money market deposit accounts to amend its Regulation D (Reserve Require- (MMDAs) and to maintain penalties for early ments of Depository Institutions) annually to withdrawal of time deposits, in certain circumincrease the amount of transaction accounts sub- stances, for monetary policy purposes. ject to a 3 percent reserve requirement. The The Federal Reserve Board has also issued for annual adjustment must be 80 percent of the public comment an interpretation of Regulation annual percentage increase in transaction ac- G (Securities Credit by Persons Other Than counts held by all depository institutions. The Banks, Brokers, or Dealers) applying margin growth in total net transaction accounts of all requirements to a limited class of transactions depository institutions from June 30, 1984, to used to secure credit for the purpose of acquiring June 30, 1985, was 8.1 percent. The statutory margin stock. The proposed interpretation of rule thus requires an increase of $1.9 million over Regulation G affects a specific class of borrowing last year's amount, to $31.7 million. involving debt securities issued by a shell corpo- The Board is required by the Garn-St Germain ration that is used as an acquisition vehicle for Depository Institutions Act of 1982 to amend purchasing the stock of the target company. Regulation D to adjust the amount exempt from Although a comment period is not required, the reserve requirements for the upcoming year by Board allowed a short period of public comment, 80 percent of the annual percentage increase in ending on December 23, 1985, to provide full total reservable liabilities. Growth in total re- assurance of no unintended effects. servable liabilities was 9.1 percent from June 30, The Federal Reserve Board has also issued for 1984, to June 30, 1985, requiring an increase in public comment proposed changes to the official the reserve requirement exemption to $2.6 mil- staff commentary on Regulation E (Electronic lion. Fund Transfers) and Regulation Z (Truth in The Board will also change the basis of the Lending). These proposed revisions address cutoff level for reporting (currently $25 million in questions that have arisen about the regulations. total deposits), which is used to separate weekly Comment is requested by February 7, 1986. reporters from quarterly reporters. The new basis will be indexed to 80 percent of the annual percentage increase in total deposits and other CHANGES IN BOARD STAFF reservable liabilities. The annual adjustment of this basis will be computed as of June 30 of each The Board of Governors has announced a reoryear. ganization in the Division of Banking Supervi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

135 sion and Regulation, including the following ap- Reserve Bank Operations and in the Division of pointments. Information Services. Temporary assignment of Welford S. Farmer, Appointment of John H. Parrish as Assistant Senior Vice President of the Federal Reserve Director in the Division of Federal Reserve Bank Bank of Richmond, to the position of Deputy Operations. Director for approximately one year; promotion Appointment of Richard C. Stevens as Assistof Stephen C. Schemering to Deputy Associate ant Director for the Banking Statistics Branch in Director for Supervision; promotion of Richard the Division of Information Services. Spillenkothen to Deputy Associate Director for Mr. Parrish came to the Board in January Training and Policy Development; appointment 1972. He received his undergraduate degree from of James I. Garner as Assistant Director for Miami University of Ohio. Supervision and Surveillance; and appointment Mr. Stevens joined the Board's staff in April of James D. Goetzinger as Assistant Director for 1973. He has a B.A. in Business Administration Supervisory Information Services. from Lemoyne College. Mr. Farmer has been employed with the Federal Reserve Bank of Richmond since 1950. He SYSTEM MEMBERSHIP: has a B.S. in Business Administration and a J.D. ADMISSION OF STATE BANKS from the University of Richmond and is also a graduate of the Stonier Graduate School of The following banks were admitted to member- Banking. ship in the Federal Reserve System during the Mr. Garner joined the staff of the Division of period December 1 through December 31, 1985: Banking Supervision and Regulation in March Florida 1970. He has a B.S. in Business Administration Coral Gables Imperial Bank from the University of Maryland. Tampa City Bank of Tampa Mr. Goetzinger has a B.S. in Business Admin- Georgia istration from St. Benedict's College and an M.S. Gainesville Georgia First Bank in Economics from Kansas State University. Smyrna Smyrna Bank and Trust The Board has also approved the following Texas officer appointments in the Division of Federal Fort Worth Fort Worth State Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

137 Legal Developments AMENDMENTS TO REGULATION D Category Reserve Requirement The Board of Governors is amending its Regulation D, Net transaction accounts $0 to $31.7 million 3 percent of amount Reserve Requirements of Depository Institutions, to: over $31.7 million $951,000 plus 12% of (1) increase the amount of transaction accounts sub- amount over $31.7 million Nonpersonal time deposits ject to a reserve requirement ratio of 3 percent, as By original maturity required by section 19(b)(2)(C) of the Federal Reserve (or notice period): Less than I Vi years 3% Act (12 U.S.C. § 461(b)(2)(C)), from $29.8 million to 1 Vi years or more 0% Eurocurrency liabilities 3% $31.7 million; and (2) increase the amount of reservable liabilities of each depository institution that is subject to a reserve requirement of zero percent, as required by section 19(b)(ll)(B) of the Federal Re- (2) Exemption from reserve requirements. Each serve Act (12 U.S.C. § 461(b)(ll)(B)), from $2.4 mil- depository institution, Edge or Agreement Corporalion to $2.6 million. The Board is also changing the tion, and U.S. branch or agency of a foreign bank is basis of the reporting cutoff level (currently $25 million subject to a zero percent reserve requirement on an in "total deposits"), which is used to separate weekly amount of its transaction accounts subject to the low reporters from quarterly reporters, from "total depos- reserve tranche in paragraph (a)(1), nonpersonal its" to "total deposits and other reservable liabil- time deposits, or Eurocurrency liabilities or any ities." combination thereof not in excess of $2.6 million Effective December 31, 1985, the Board amends determined in accordance with section 204.3(a)(3) of 12 C.F.R. Part 204 as follows: this Part. AMENDMENT TO REGULATION D Part 204—Reserve Requirements of Depository Institutions The Board of Governors is amending its Regulation D, Reserve Requirements of Depository Institutions, to 1. The authority citation for 12 C.F.R. Part 204 contin- relieve the restriction on reserve requirements on ues to read as follows: money market deposit accounts held by Hawaiian nonmember depository institutions. The Board will require the phase-in of reserves on MMDAs in these Authority: 12 U.S.C. § 461 et seq. institutions on the same schedule generally applied to their other deposits. Effective December 31, 1985, the Board amends 2. Part 204 is amended by revising paragraph (a) of 12 C.F.R. Part 204 as follows: section 204.9 to read as follows: Part 204—Reserve Requirements of Depository Institutions 1. The authority citation for 12 C.F.R. Part 204 contin- Section 204.9—Reserve Requirement Ratios ues to read as follows: (a)(1) Reserve percentages. The following reserve ra- Authority: 12 U.S.C. § 461 et seq. tios are prescribed for all depository institutions, Edge and Agreement Corporations, and United 2. Part 204 is amended by revising paragraph (f) of States branches and agencies of foreign banks: section 204.4 by removing the last sentence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

138 Federal Reserve Bulletin • February 1986 * * * * * fected on or before consummation of the proposed transaction; or AMENDMENT TO RULES REGARDING * * * ** DELEGATION OF AUTHORITY ORDERS ISSUED UNDER BANK HOLDING The Board of Governors is amending 12 C.F.R. Part COMPANY ACT, BANK MERGER ACT, BANK 265, its Rules Regarding Delegtion of Authority, to SERVICE CORPORATION ACT, AND FEDERAL delegate to the Federal Reserve Banks authority to act RESERVE ACT on certain applications requiring prior approval of the Federal Reserve Board and to furnish certain competi- Orders Issued Under Section 3 of the Bank tive factor reports. It is expected that this delegation of Holding Company Act authority would aid in the expeditious processing of certain applications requiring the Board's prior ap- Bank of New England Corporation proval and furnishing of certain competitive factor Boston, Massachusetts reports. Effective December 16, 1985, the Board amends OCB Corporation 12 C.F.R. Part 265 as follows: Boston, Massachusetts Part 265.2—Rules Regarding Delegation of Order Approving Acquisition of a Bank Authority Bank of New England Corporation, Boston, Massa- 1. The authority citation for 12 C.F.R. Part 265 contin- chusetts, a bank holding company within the meaning ues to read as follows: of the Bank Holding Company Act ("Act" or "BHC Act"), has applied for the Board's approval under Authority: Sec. 11, 38 Stat. 261; 12 U.S.C. 248. section 3 of the Act to acquire, through its wholly owned subsidiary, OCB Corporation, the successor to 2. Part 265 is amended by revising section 265.2 as Old Colony Bank, Providence, Rhode Island follows: ("Bank").1 Bank is a federally chartered savings bank, the accounts of which are insured by the FSLIC, Section 265.2—Specific Functions Delegated to that, in connection with this proposal, will convert to a Board Employees and to Federal Reserve national bank the accounts of which will be insured by Banks the FDIC.2 Upon consummation of this proposal, Bank's name will be changed to Bank of New England/ Old Colony, N.A. ^ *** Notice of the applications, affording an opportunity (22) *** for interested persons to submit comments, has been (v) With respect to bank holding company forma- given in accordance with section 3 of the Act, 50 tions, bank acquisitions or mergers, the proposed Federal Register 48,642 (1985). The time for filing transaction involves two or more banking organi- comments has expired, and the Board has considered zations: the applications and all comments received3 in light of (A) That rank among a State's five largest the factors set forth in section 3(c) of the BHC Act, banking organizations, or among the 50 largest 12 U.S.C. § 1842(c). banking organizations in the United States (as Bank, under its current charter and with FSLIC measured by total domestic deposits within the insurance, is not considered a "bank" under section relevant area); or (B) That, upon consummation of the proposal, would control over 30 percent of total deposits in banking offices in the relevant geographic 1. OCB Corporation has also applied under section 3(a)(1) of the BHC Act to become a bank holding company. OCB is of no signifimarket, or would result in an increase of at least cance except as a means to facilitate Applicant's acquisition of Bank. 200 points in the Herfindahl-Hirschman Index 2. Bank is also a bank holding company by virtue of its ownership ("HHI") in a highly concentrated market (a of Newport National Bank, Newport, Rhode Island. Subsequent to this proposal, Newport Bank will be merged into Bank. market with a post-merger HHI of at least 3. A letter protesting this application on Community Reinvestment 1800); or Act grounds was received from the South Providence Revitalization Committee. After a series of meetings between Applicant and the (C) Where divestitures designed to address any Committee, an agreement was reached and the protest was withsubstantial anticompetitive effects are not ef- drawn. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 139 2(c) of the Act.4 However, in connection with this Applicant and Bank compete directly in the Proviproposal, Bank would convert to a national bank. The dence, Rhode Island, banking market.10 Applicant's application has therefore been considered in light of banking subsidiary in that market controls deposits of the requirements of section 3 of the BHC Act pertain- $7 million, which represent approximately 0.1 percent ing to the acquisition of banks.5 of the total deposits in commercial banks in the Applicant, the second largest banking organization market.11 Bank holds deposits of $581.1 million, which in New England, controls nine subsidiary banks in represent approximately 6.5 percent of the total depos- Massachusetts and Connecticut with total domestic its in commercial banking organizations in the market. deposits of $9.1 billion. Applicant is the second largest Upon consummation of this proposal, Applicant commercial banking organization in Massachusetts, would become the fifth largest of 17 banking organizacontrolling approximately 13.6 percent of the total tions in the market and control approximately 6.6 deposits in depository institutions in Massachusetts.6 percent of the total deposits in commercial banks Applicant is also the largest commercial banking orga- therein. In view of the small amount of existing nization in Connecticut, controlling 26.5 percent of the competition that would be eliminated as a result of this total deposits in commercial banks in Connecticut. proposal, consummation of this transaction would not Bank, the fifth largest depository institution in Rhode have a significant effect on existing competition in this market. Island, controls total domestic deposits of $724 million, representing approximately 7.1 percent of the The Board has also examined the effect of the total deposits in commercial banking organizations in proposed acquisition upon probable future competi- Rhode Island.7 tion in the 31 banking markets12 in which either Section 3(d) of the BHC Act (12 U.S.C. § 1842(d)), Applicant or Bank, but not both, now compete. In the Douglas Amendment, prohibits the Board from view of the fact that there are numerous potential approving an application by a bank holding company entrants from the New England region into each of to acquire control of any bank located outside of the these markets, the Board has concluded that consumbank's home state,8 unless such acquisition is "specif- mation of this proposal would not have any significant ically authorized by the statute laws of the state in adverse effects on probable future competition in any which such bank is located, by language to that effect relevant market. Competitive considerations are and not merely by implication." The statute laws of therefore consistent with approval of this application. Rhode Island permit a bank holding company in a The financial and managerial resources of Applicant defined New England region, including Massachu- and its subsidiaries are satisfactory and their prospects setts, to acquire a bank located in Rhode Island, and appear favorable. As a result of this proposal, which the Board has previously determined that an acquisi- includes a substantial capital injection into the resulttion such as the proposed transaction is specifically ing bank, the financial and managerial resources and authorized by the statute laws of Rhode Island and is prospects of Bank will be strengthened. Thus, considnot barred by the Douglas Amendment.9 erations relating to banking factors lend weight toward approval of the application. Convenience and needs considerations are also consistent with approval of the transaction. Based on the foregoing and other facts of record, the. Board has determined that the applications under section 3 of the Act should be, and hereby are, approved and that, in accordance with section 11(b) of 4. Section 2(c) of the BHC Act was amended by the Garn-St Germain Depository Institutions Act of 1982 expressly to exclude the BHC Act, the acquisition of Bank shall not be institutions, the accounts of which are insured by the FSLIC or consummated before the fifth calendar day following institutions chartered by the Federal Home Loan Bank Board. 5. Bank has received the approval of the Federal Home Loan Bank Board to convert from mutual to stock form, and the Comptroller of the Currency is currently processing Bank's application to convert to a national bank with FDIC insurance. 6. Banking data are as of June 30, 1985. 7. The deposits of Rhode Island thrift institutions that own commercial banks are included as deposits of commercial banking organi- 10. The Providence, Rhode Island, banking market is approximated zations. by the Pawtucket-Woonsocket-Attleboro, Rhode Island-Mass 8. A bank holding company's home state is that state in which the (PMSA); the Providence, Rhode Island, PMSA; the towns of Charlesoperations of the bank holding company's banking subsidiaries were town and West Greenwich, both in Rhode Island; and Norton, principally conducted on July 1, 1966, or the date on which the Massachusetts. company became a bank holding company, whichever is later. Appli- 11. Market data are as of June 30, 1984. cant's home state is Massachusetts. 12. Including the markets served by Maine National Corporation, 9. Bank of Boston Corporation, 70 FEDERAL RESERVE I. J XETI Portland, Maine, which Applicant received the Board's approval to 737 (1984). acquire on November 18, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

140 Federal Reserve Bulletin • February 1986 the effective date of this Order, or later than three Bank is a proposed new bank that would operate in months after the effective date of this Order, unless the New York Metropolitan banking market2 and is such period is extended for good cause by the Board or being established primarily to serve New York City by the Federal Reserve Bank of Boston, acting pursu- residents with ties to the Dominican Republic. Appliant to delegated authority. cant proposes to acquire at least 48 percent of the By order of the Board of Governors, effective voting shares of Bank. The remaining shares of Bank December 19, 1985. will be offered to other organizers of Bank and to investors in the local community. Applicant proposes Voting for this action: Chairman Volcker and Governors to acquire any shares not subscribed to by other Martin, Rice, and Seger. Absent and not voting: Governors investors. Wallich and Partee. Applicant and its subsidiary banks do not currently operate any banking subsidiaries or branches in the JAMES MCAFEE United States. Bank will be established de novo. [SEAL] Associate Secretary of the Board Consequently, consummation of the proposal would not have adverse effects on existing or potential competition or on the concentration of resources in any Grupo Financiero Popular, S.A. relevant market. The Board concludes, therefore, that Santo Domingo, Dominican Republic competitive considerations are consistent with approval of this application. Order Approving the Acquisition of a Bank The financial and managerial resources of Applicant and its bank subsidiaries appear generally satisfactory Grupo Financiero Popular, S.A., Santo Domingo, and the future prospects of Applicant and Bank appear Dominican Republic, has applied for Board approval favorable. Based on the facts of record, including under section 3(a)(1) of the Bank Holding Company commitments made by Applicant, the Board has deter- Act (the "Act") (12 U.S.C. § 1842 (a)(1)) to become a mined that considerations relating to banking factors bank holding company by acquiring the voting shares are consistent with approval of the application. Conof The Dominican Bank, New York, New York summation of the proposal would also increase bank- ("Bank"), a proposed new bank. ing services in the communities in which Bank will Notice of the application, affording an opportunity operate, in particular the Dominican community in for interested persons to submit comments, has been New York City. Considerations regarding the convegiven in accordance with section 3(b) of the Act. The nience and needs of the communities to be served time for filing comments has expired and the Board therefore favor approval of this application. Accordhas considered the application and all comments re- ingly, the Board has determined that consummation of ceived in light of the factors set forth in section 3(c) of the transaction would be in the public interest. the Act. Based on the foregoing and all the facts of record Applicant, with total assets of approximately $276 and commitments made by Applicant, the Board has million, is the largest bank holding company in the determined that the application should be, and hereby Dominican Republic.1 Applicant owns Banco Popular is, approved. The transaction shall not be consummat- Dominicano, C. por. A., Santo Domingo, which is the ed before the thirtieth day following the effective date largest commercial bank in the Dominican Republic, of this Order, or later than three months after the with total assets of approximately $206 million. Based effective date of this Order, and Bank shall be opened on all of the facts of record, the Board has determined for business not later than six months after the effecthat Applicant does not meet the requirements of tive date of this Order. The latter two periods may be section 211.23(b) of Regulation K for the exemptions extended for good cause by the Board or the Federal to the nonbanking prohibitions of the Act provided to Reserve Bank of New York under delegated authority. qualifying foreign banking organizations. 12 C.F.R. § 211.23(b), (c) and (f). Applicant must, therefore, conform its nonbanking activities to section 4 of the Act. 2. The New York Metropolitan banking market consists of the southern portion of Fairfield County, Connecticut; New York City, all of Nassau, Putnam, Rockland and Westchester Counties, and western Suffolk County in New York; and eastern Hudson County and the 1. All banking data are as of December 31, 1984. northern two-thirds of Bergen County in New Jersey. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 141 By order of the Board of Governors, effective concentration of banking resources in any relevant December 2, 1985. area. Accordingly, the Board concludes that competitive considerations under the Act are consistent with Voting for this action: Vice Chairman Martin and Gover- approval. nors Partee, Rice, and Seger. Absent and not voting: Chair- The financial and managerial resources and future man Volcker and Governor Wallich. prospects of Applicant and Bank are consistent with approval. Applicant proposes to acquire Bank (assets JAMES MCAFEE of $24 million) through an exchange of shares. Appli- [SEAL] Associate Secretary of the Board cant intends to make a capital injection of $300,000 into Bank and will finance this injection through the issuance of debentures to its principals. Based upon Slayton Bancshares, Inc. the facts of record, including commitments made by Slayton, Minnesota Applicant in connection with this application, it appears that the debt will not strain Bank's resources. Order Approving Formation of a Bank Holding Considerations relating to the convenience and needs Company of the community to be served also are consistent with approval of the application. Slayton Bancshares, Inc., Slayton, Minnesota, has Based on the foregoing and other facts of record, the applied for the Board's approval under section 3(a)(1) Board has determined that consummation of the transof the Bank Holding Company Act ("Act") action would be in the public interest and that the (12 U.S.C. § 1842(a)(1)) to become a bank holding application should be approved. On the basis of the company by acquiring 80.6 percent of the voting record, the application is approved for the reasons shares of Peoples State Bank of Slayton, Slayton, summarized above. The transaction shall not be con- Minnesota ("Bank"). summated before the thirtieth calendar day following Notice of the application, affording opportunity for the effective date of this Order, or later than three interested persons to submit comments, has been months following the effective date of this Order, given in accordance with section 3(b) of the Act. The unless such period is extended for good cause by the time for filing comments has expired and the Board Board or by the Federal Reserve Bank of Minneapolis, has considered the application and all comments re- acting pursuant 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)). December 9, 1985. Applicant is a nonoperating corporation with no subsidiaries formed for the purpose of acquiring Bank. Voting for this action: Chairman Volcker and Governors Bank is the 219th largest commercial bank in Minneso- Martin, Partee, Rice, and Seger. Absent and not voting: Governor Wallich. ta, with total deposits of $22.3 million, which represents less than 0.1 percent of total deposits in commercial banks in the state.1 Principals of Applicant are also JAMES MCAFEE principals of Bank. Consummation of the transaction [SEAL] Associate Secretary of the Board would not result in an increase in the concentration of banking resources in Minnesota. Bank operates in the Marshall banking market,2 Orders Issued Under Section 4 of the Bank where it is the fourth largest of 15 commercial banks, Holding Company Act controlling 5.5 percent of total deposits in commercial banks. Principals of Applicant are not affiliated with Compagnie Financiere de Suez any other depository organization in this market. Paris, France Consummation of this proposal would not result in any adverse effects upon competition or increase in the Banque Indosuez Paris, France Order Denying Application to Act as a Specialist in Options on Foreign Exchange 1. Banking data are as of March 31, 1985. Compagnie Financiere de Suez and its wholly owned 2. The Marshall banking market is approximated by all of Lincoln subsidiary, Banque Indosuez, both of Paris, France County, Lyon County, and portions of Murray County, Redwood County, and Yellow Medicine County, all in Minnesota. (hereinafter jointly referred to as "Applicant"), have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

142 Federal Reserve Bulletin • February 1986 applied for the Board's approval, under section 4(c)(8) thereto." In considering whether a proposed new of the Bank Holding Company Act ("Act") activity would be a proper incident to banking, the (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the Board is required to determine that the performance of Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to the proposed activities by Applicant, "can reasonably engage through a subsidiary of Banque Indosuez, be expected to produce benefits to the public, such as Indosuez Options Inc., Philadelphia, Pennsylvania greater convenience, increased competition, or gains ("Company"), in acting as the specialist in options on in efficiency, that outweigh possible adverse effects, French francs traded on the Philadelphia Stock Ex- such as undue concentration of resources, decreased change ("the Exchange"). Company would be the sole or unfair competition, conflicts of interests, or unspecialist in French franc options designated by the sound banking practices." (12 U.S.C. § 1843(c)(8)). Exchange. As specialist, Company would act as dealer The Board has not previously approved a proposal and market maker in such options to assist in the by a bank holding company to act as a specialist on a maintenance of a fair and orderly market on the regulated securities exchange.3 Applicant maintains Exchange. Applicant would be a limited member of that the proposed specialist activity is comparable to the Exchange, but would not be permitted to trade traditional bank foreign exchange activities,4 including other options or securities on the Exchange. those approved for bank holding companies under Notice of the application, affording interested per- section 4(c)(8) of the Act.5 sons an opportunity to submit comments1 and views However, the Board has previously denied an applion the relation of the proposed activity to banking and cation by a bank holding company to buy and sell on the balance of public interest factors regarding the foreign currency futures for its own account through application, has been duly published (50 Federal Reg- pit arbitrage on the basis that the activity could lead to ister 16,752 (1985)). The time for filing comments and unsound banking practices.6 Pit arbitrage involves the views has expired, and the Board has considered the actions of floor traders on commodities exchanges in application and all comments received in light of the buying and selling futures for their own account in an public interest factors set forth in section 4(c)(8) of the effort to profit from temporary price differentials be- Act. tween futures contracts. Moreover, in approving ap- Under the International Banking Act of 1978, Ban- plications by bank holding companies to execute and que Indosuez and its parent Compagnie Financiere de clear options and futures relating to foreign currency Suez, are subject to the nonbanking provisions of the and to provide foreign currency advisory and transac- Bank Holding Company Act of 1956, as amended, with tional services, the Board has generally required the respect to their activities in the United States because nonbanking subsidiary to agree not to take positions of Banque's operation of branches and an agency in for its own account. the United States (12 U.S.C. § 3106(a)). Compagnie, One role of the specialist under the rules of the SEC with consolidated assets of approximately $27.4 bil- pertaining to the regulated securities markets is to lion,2 is wholly owned by the French government as a provide liquidity for members of the exchange. As result of nationalization in 1982 and has holdings in over 230 financial and industrial companies in France 3. Applicant notes that the Comptroller of the Currency has permitand abroad. Banque Indosuez, with consolidated asted a national bank (Bank of America) to act as the specialist in sets of approximately $25.8 billion, is the seventh Deutsche mark options on the Philadelphia Stock Exchange through a largest bank in France, and an international banking joint venture with a securities firm. Letter from the Deputy Comptroller for Multinational Banking to H. Helmut Loring, Bank of America, organization that operates in 65 countries. Banque N.T. & S.A. (January 11, 1984). Indosuez operates branches in New York, Chicago 4. Banks historically have been significant participants in the spot and Los Angeles, and an agency in Atlanta. In addi- and forward foreign exchange markets. Banks write and purchase options contracts in the over-the-counter, or interbank, foreign curtion, the bank has established an Edge corporation in rency options market, and may rely on the spot and forward markets Houston. as well as on standardized commodity and securities exchange-traded options and futures, for hedging purposes. In order to approve an application submitted pursu- 5. The Board has previously approved applications of bank holding ant to section 4(c)(8) of the Act, the Board is required companies to execute and clear options and futures relating to foreign to determine that the proposed activity is "so closely exchange for customers and to provide foreign exchange advisory and transactional services. Sections 225.25(b)(17) and 225.25(b)(18) of related to banking ... as to be a proper incident Regulation Y. See, e.g., J.P. Morgan & Co. Incorporated, 68 FEDERAL RESERVE BULLETIN 514 (1982) (execution and clearance of foreign currency futures as a futures commission merchant (FCM)); Hongkong and Shanghai Banking Corporation, 69 FEDERAL RESERVE BULLETIN 221, 223 (1983) (foreign exchange advisory and transaction- 1. Public comments in favor of the proposal were received from al services); and Fidelcor Inc., 70 FEDERAL RESERVE BULLETIN 368 Bank of America, San Francisco, California, Meridian Bancorp, Inc., (1984). Reading, Pennsylvania, and the Philadelphia Stock Exchange. 6. Citicorp/Citicorp Futures Corporation, 68 FEDERAL RESERVE 2. Banking data are as of December 31, 1984. BULLETIN 776, 779 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 143 such, the specialist is required to "engage in a course possible adverse effects associated with the proposal. of dealings for his own account to assist in the mainte- Moreover, it does not appear that denial of the applicanance, insofar as reasonably practicable, of a fair and tion would cause the specialist position, which is a orderly market on the Exchange" and is subject to privileged position on the Exchange for which there is suspension for failure to fulfill that obligation to the competition, to go unfilled. Consequently, the Board Exchange under Rule 203(b) of the Philadelphia Stock finds that the potential public benefits associated with Exchange Guide. this proposal do not outweigh the possible adverse In the Board's view, the undertaking by a banking effects associated with the proposed activity. organization of the obligation of the specialist to Based upon the foregoing and other considerations engage in a course of dealings for its own account to reflected in the record, the Board has determined that maintain the market for the Exchange would involve the balance of public interest factors the Board is the banking organization in an activity that carries required to consider under section 4(c)(8) is not favorpotential financial risks of a similar nature to those able. Accordingly, the application is denied. presented by pit arbitrage. The specialist is obligated By order of the Board of Governors, effective to bid and offer for all traders who approach it on the December 9, 1985. Exchange and therefore the activity has the potential to involve a banking organization in position-taking for Voting for this action: Governors Martin, Partee, and Rice. longer periods of time than pit arbitrage and in trading Voting against this action: Chairman Volcker. Absent and not voting: Governors Wallich and Seger. for its own account at times when dealers may choose not to because of adverse market conditions. The Board has considered the qualifications and JAMES MCAFEE resources of Applicant and the regulatory environment [SEAL] Associate Secretary of the Board in which the activity would be conducted, but notes that these considerations would not prevent possible adverse effects that are associated with the activity CoreStates Financial Corp. itself, which is a key concern to the Board in this case. Philadelphia, Pennsylvania The Board notes that the specialist activity requires skill and experience in trading on the floor of a stock Order Approving the Acquisition of Nonbank exchange, which are not possessed by banks general- Company ly. The Board is unable to conclude that Applicant has demonstrated it now possesses the necessary floor- CoreStates Financial Corp., Philadelphia, Pennsylvatrading skill and experience as a result of hiring or nia, a bank holding company within the meaning of the allowing certain of its employees to train for short Bank Holding Company Act (12 U.S.C. § 1841 periods of time with floor traders. et seq.), has applied for the Board's approval under The Board has also considered the potential for section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) to conflicts of interest to arise in connection with this acquire through its indirect subsidiary, Congress Fiproposal. In the Board's view, the fact that Applicant nancial Corporation ("Congress"), 100 percent of the is a significant participant in the foreign exchange voting shares of James Talcott, Inc., New York, New markets, particularly regarding the French franc, and York ("Talcott"). Talcott is a factoring and commerwould under this proposal also be the specialist in cial finance company that provides financial services French franc options on the Exchange, with access to primarily to the textile, apparel and related industries. information regarding the extent, volume and details These activities have been determined by the Board to of ongoing trading in such options on the Exchange, be closely related to banking and permissible for bank presents the potential and incentive for conflicts of holding companies (12 C.F.R. § 225.25(b)(1)). interest to arise. Notice of the application, affording interested per- In order to approve an application under section sons an opportunity to submit comments and views, 4(c)(8) the Board must find that the performance of an has been duly published (50 Federal Register 45,666 activity can reasonably be expected to produce public (1985)). The time for filing comments has expired, and benefits that outweigh possible adverse effects. Appli- the Board has considered the application and all cant states that approval of its application would comments received in light of the factors specified in contribute to the further development of the market section 4(c)(8) of the Act. for standardized French franc options and result in Applicant, with consolidated assets of approximatebenefits to the public such as increased market effi- ly $9.4 billion,1 is the third largest bank holding ciency and liquidity. In the Board's view, however, this potential public benefit does not outweigh the 1. All banking data are as of December 31, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

144 Federal Reserve Bulletin • February 1986 company in the state of Pennsylvania. Applicant oper- that consummation of this proposal would result in ates three bank subsidiaries, including Philadelphia adverse effects such as unsound banking practices, National Bank, Philadelphia, Pennsylvania ("PNB"), unfair competition, conflicts of interests or an undue which controls $4.4 billion in deposits and Hamilton concentration of resources. Bank, Lancaster, Pennsylvania, which controls $2.0 Based upon the foregoing and all the facts of record, billion in deposits. the Board has determined that the balance of public Congress engages in factoring and commercial fi- interest factors it is required to consider under section nance activities from its headquarters in New York 4(c)(8) is favorable. Accordingly, the application is and offices in Atlanta, Georgia; Baltimore, Maryland; hereby approved. This determination is subject to all Buffalo, New York; Chicago, Illinois; Minneapolis, of the conditions set forth in the Board's Regulation Y, Minnesota; Miami, Florida; Los Angeles and San including those in section 225.4(d) and 225.23(b), and Francisco, California; and San Juan, Puerto Rico. to the Board's authority to require modification or Talcott has offices in Los Angeles, California, Atlanta, termination of the activities of the holding company or Georgia and New York, New York. any of its subsidiaries as the Board finds necessary to Talcott, with total assets of $271 million, is the assure compliance with the provisions and purposes of eleventh largest factoring company in the United the Act and the Board's regulations and orders issued States, controlling 3.7 percent of the market for factor- thereunder, or to prevent evasion thereof. ing services.2 Applicant is the fifteenth largest factor in This transaction shall not be consummated later the nation, controlling 2.6 percent of the national than three months after the effective date of this factoring market. Upon consummation of the propos- Order, unless such period is extended for good cause al, Applicant would become the fifth largest factor in by the Board, or by the Federal Reserve Bank of the nation, controlling 6.3 percent of the national Philadelphia, pursuant to delegated authority. factoring market. While consummation of this propos- By order of the Board of Governors, effective al would eliminate existing competition between Ap- December 13, 1985. plicant and Company, the Board notes that the market for factoring is unconcentrated, with a Herfindahl- Voting for this action: Chairman Volcker and Governors Hirschman Index ("HHI") of 817 and a four-firm Martin, Partee, and Rice. Absent and not voting: Governors Wallich and Seger. concentration ratio of 43.9 percent. Upon consummation of the proposal, the HHI would increase by 19 points. Moreover, there are numerous existing and JAMES MCAFEE potential competitors in the factoring business. [SEAL] Associate Secretary of the Board Applicant, through its subsidiaries, Congress and PNB, also engages in commercial finance activities, in Manufacturers Hanover Corporation competition with Talcott. The Board has previously New York, New York determined that the market for commercial finance services is regional or national in scope.3 Talcott's Order Approving Application to Execute and Clear loans, which totalled less than $100 million as of Certain Futures Contracts and to Provide Certain September 30, 1985, are made in a national market and Advisory Services are serviced out of Talcott's offices in New York and Atlanta. Talcott has a relatively insignificant presence Manufacturers Hanover Corporation, New York, in the commercial lending market and the market is New York, a bank holding company within the meanunconcentrated with numerous existing and potential ing of the Bank Holding Company Act, 12 U.S.C. competitors. In view of all the facts of record, the § 1841 et seq. ("BHC Act"), has applied pursuant to Board concludes that consummation of this proposal section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and would not have a significant adverse effect on competi- section 225.23(a)(3) of the Board's Regulation Y tion in the factoring or commercial finance market. (12 C.F.R. § 225.23(a)(3)) to engage de novo through Financial and managerial considerations are gener- its wholly owned subsidiary, Manufacturers Hanover ally satisfactory and consistent with approval of this Futures, Inc., New York, New York ("MH Fuproposal. Moreover, there is no evidence in the record tures"), in the execution and clearance, on major commodity exchanges, of futures contracts on stock indexes, options on such futures contracts, and futures 2. The Board has previously determined that the factoring market is contracts on a municipal bond index. a nationwide market. Barclays Bank Limited, 66 FEDERAL RESERVE BULLETIN 980 (1980); Lloyds & Scottish-Talcott, 66 FEDERAL RE- MH Futures proposes to execute and clear: SERVE BULLETIN 518 (1980). (1) the Standard & Poor's 100 Stock Price Index 3. First Interstate Bancorp, 70 FEDERAL RESERVE BULLETIN 886 futures contract, the Standard & Poor's 500 Stock (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 145 Price Index futures contract ("S&P 500"), and on futures contracts based on stock indexes, and of options on the S&P 500, all of which are currently futures contracts on a municipal bond index, and the traded on the Index and Option Division of the provision of advisory services with respect to futures Chicago Mercantile Exchange; contracts on a municipal bond index, are closely (2) the New York Stock Exchange ("NYSE") Com- related to banking. J.P. Morgan & Co. Incorporated, posite Index futures contract and options on the 71 FEDERAL RESERVE BULLETIN 251 (1985); Bankers NYSE Composite Index futures, both of which are Trust New York Corporation, 71 FEDERAL RESERVE currently traded on the New York Futures Ex- BULLETIN 111 (1985). The proposed activities of MH change, a subsidiary of the New York Stock Ex- Futures are essentially identical to those activities change; previously approved by the Board. Thus, the Board (3) the Value Line Average Stock Index futures concludes that Applicant's proposal to execute and contract, currently traded on the Board of Trade of clear futures contracts on stock indexes, options Kansas City; and thereon, and futures contracts on a municipal bond (4) the Major Market Index futures contract and the index, and to provide advisory services with respect to Bond Buyer Municipal Bond Index futures contract, futures contracts on a municipal bond index, is closely both of which are currently traded on the Chicago related to banking. Board of Trade. In order to approve this application, the Board is also required to determine that the performance of the In addition, Applicant has applied to provide, proposed activities by Applicant "can reasonably be through MH Futures, advisory services with respect expected to produce benefits to the public . . . that to the Bond Buyer Municipal Bond Index futures outweigh possible adverse effects, such as undue contract, both on a separate-fee basis and as an concentration of resources, decreased or unfair comintegrated package of futures commission merchant petition, conflicts of interests, or unsound banking and advisory services. Such advisory services would practices." (12 U.S.C. § 1843(c)(8)). include general research and advice on futures market Consummation of Applicant's proposal would proconditions and trading strategies. Applicant proposes vide added convenience to those clients of Applicant to offer these services to financial institutions, major and its subsidiaries that trade in the cash, forward and corporations, and other sophisticated customers in the futures markets for these instruments. The Board United States and abroad through its offices in New expects that the de novo entry of Applicant into the York and Chicago. market for these services would increase the level of Notice of the application, affording interested per- competition among providers of these services already sons an opportunity to submit comments on the rela- in operation. Accordingly, the Board concludes that tion of the proposed activities to banking and on the the performance of the proposed activities by Applibalance of public interest factors, has been duly pub- cant can reasonably be expected to provide benefits to lished (50 Federal Register 42,777 (1985)). The time for the public. filing comments has expired, and the Board has con- The Board also has considered the potential for sidered the application and all comments received in adverse effects that may be associated with this prolight of the public interest factors set forth in section posal. There is no evidence in the record that consum- 4(c)(8) of the BHC Act. mation of the proposed FCM activities would result in Applicant, with consolidated assets of $75.3 billion,1 any adverse effects, such as undue concentration of is the third largest banking organization in New York. resources, decreased or unfair competition, conflicts Applicant operates three subsidiary banks and en- of interests, or unsound banking practices. The Board gages, directly and through certain of its subsidiaries, notes that additional safeguards are provided by CFTC in a broad range of permissible nonbanking activities regulation of the trading of futures, as well as by the throughout the United States. MH Futures is a futures conditions set forth in section 225.25(b)(18) of Regulacommission merchant ("FCM"), registered with the tion Y with respect to executing and clearing futures Commodity Futures Trading Commission ("CFTC"), contracts. that engages in futures activities permissible for bank Based upon a consideration of all the relevant facts, holding companies under section 225.25(b)(18) of the the Board concludes that the balance of the public Board's Regulation Y. interest factors that it is required to consider under The Board has previously determined that the exe- section 4(c)(8) is favorable. cution and clearance of futures contracts and options This determination is also subject to all of the conditions set forth in Regulation Y, including sections 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 1. As of September 30, 1985. 225.23(b)(3)), and to the Board's authority to require Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

146 Federal Reserve Bulletin • February 1986 such modification or termination of the activities of a Notice of the application, affording interested perbank holding company or any of its subsidiaries as the sons an opportunity to submit comments, has been Board finds necessary to assure compliance with the duly published, 50 Federal Register 45,872 (1985). The provisions and purposes of the BHC Act and the time for filing comments has expired, and the Board Board's regulations and orders issued thereunder, or has considered the application and all comments reto prevent evasion thereof. ceived, including those of the Securities Industry The transaction shall be made not later than three Association ("SIA") in opposition to the proposal,2 in months after the effective date of this Order, unless light of the public interest factors set forth in section such period is extended for good cause by the Board or 4(c)(8) of the Act. by the Federal Reserve Bank of New York, pursuant Applicant, with total assets of $8.9 billion,3 is the to delegated authority. largest banking organization in Virginia. Applicant has By order of the Board of Governors, effective one subsidiary bank, Sovran Bank, N.A. ("Sovran December 2, 1985. Bank"), Richmond, Virginia, and engages through certain subsidiaries in other nonbanking activities per- Voting for this action: Vice Chairman Martin and Gover- missible for bank holding companies.4 nors Partee, Rice, and Seger. Absent and not voting: Chair- The Board has previously determined that acting as man Volcker and Governor Wallich. a broker with respect to options on securities issued or guaranteed by the U.S. government and its agents and JAMES MCAFEE options on U.S. and foreign money market instru- [SEAL] Associate Secretary of the Board ments is closely related to banking. Security Pacific Corporation, 70 FEDERAL RESERVE BULLETIN 238 (1984). The Board also has previously determined that Sovran Financial Corporation the purchase and sale of gold and silver bullion and Norfolk, Virginia gold coins solely for the account of customers is an activity that is closely related to banking. First Inter- Order Approving an Application to Provide state Bancorp, 71 FEDERAL RESERVE BULLETIN 467 Securities Brokerage Services, to Broker Options on (1985).5 Government Obligations and Money Market The Board by regulation has authorized bank hold- Instruments, and to Broker Gold and Silver Bullion ing companies to engage in securities brokerage activiand Gold Coins ties that "are restricted to buying and selling securities solely as agent for the account of customers and do not Sovran Financial Corporation, Norfolk, Virginia, a include securities underwriting or dealing or investbank holding company within the meaning of the Bank ment advice." 12 C.F.R. § 225.25(b)(15). In Securities Holding Company Act of 1956 ("Act" or "BHC Industry Association v. Board of Governors, U.S. Act"), 12 U.S.C. § 1841 et seq., has applied pursuant , 104 S. Ct. 3003 (1984), the United States Supreme to section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), Court upheld the Board's decision that such activity and section 225.23(a) of the Board's Regulation Y, by a bank holding company does not violate the Glass- 12 C.F.R. § 225.23(a), to expand the activities of its Steagall Act and is so closely related to banking as to wholly owned subsidiary, Sovran Investment Corpo- be a proper incident thereto under section 4(c)(8) of ration ("SIC"), Richmond, Virginia, to include: the BHC Act. (1) securities brokerage services, The principal issue raised by this application is (2) buying and selling, as agent on behalf of non- whether Applicant may, through the same subsidiary, affiliated persons, options on securities issued or guaranteed by the U.S. Government and its agencies, and options on U.S. and foreign money market 2. In addition to the comment opposing the proposal from the SIA, instruments, and the Board received comments supporting the proposal from the Dealer (3) purchasing and selling gold and silver bullion and Bank Association, the California Bankers Association, and Union gold coins solely for the account of customers.1 Bank, Los Angeles, California. 3. As of September 30, 1985. 4. Applicant has previously been authorized to engage through Sovran Capital Management Corporation ("SCM"), Richmond, Virginia, in the provision of investment or financial advice on a fee basis. 1. SIC has previously received authorization under the BHC Act to Sovran has committed that SCM will not utilize the securities broker- (1) underwrite and deal in government obligations and money market age services to be provided by SIC. instruments, pursuant to section 225.25(b)(16) of Regulation Y, (2) 5. SIC will not engage in the sale of platinum and palladium or deal provide investment advice relating solely to government obligations in gold and silver for its own account. The present application does and money market instruments, pursuant to section 225.25(b)(4) of not include the activity of buying and selling options on gold and silver Regulation Y, and (3) provide certain fiduciary services, including bullion. Moreover, SIC does not propose to extend credit or offer securities safekeeping, custodial services, and acting as a paying agent investment advice to customers in connection with the proposed and as a dividend disbursement agent. precious metals services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 147 provide securities brokerage services, underwrite and or underwrites pursuant to section 225.25(b)(16) of deal in government obligations and money market Regulation Y.7 instruments, and provide investment advice related In addition, the separate SIC personnel engaged in solely to such bank-eligible securities. Applicant con- underwriting, dealing and advisory activities with retends that the proviso in section 225.25(b)(15) of spect to bank-eligible securities and obligations will be Regulation Y against securities underwriting, dealing trained not to provide particularized or specific investor investment advisory or research services in connec- ment advice, but only generalized and publicly availtion with securities brokerage activities was not in- able information concerning such bank-eligible securitended to preclude a bank holding company from ties. separately engaging in otherwise permissible under- The SIA contends that the combination of securities writing, dealing, and investment advisory activities in brokerage activities and investment advice violates the same subsidiary. Applicant contends that the ap- section 20 of the Glass-Steagall Act and is not closely propriate regulatory focus should be the functional related to banking or a proper incident thereto. The manner in which, and not the legal entity through SIA asserts that banks have not, and indeed may not, which, such securities brokerage services are pro- simultaneously provide both securities brokerage vided. services and investment advice to their customers, and Accordingly, Applicant has stated that SIC will not that the proposed activities are not functionally or provide investment advice or research in connection operationally similar to the investment, management, with any securities it brokers pursuant to section fiduciary or agency services traditionally provided by 225.25(b)(15) of Regulation Y, and will not underwrite, banks. deal in, or provide investment advice on securities The Board believes that the SIA's contentions under other than those authorized under section the BHC Act and the Glass-Steagall Act do not 225.25(b)(16) of Regulation Y. Applicant also has put warrant denial of the application. The SIA's conteninto place a number of mechanisms that it contends tions are premised on the assumption that investment provide adequate assurance that it will maintain a firm advice will be provided in connection with SIC's functional and operational separation between the securities brokerage activities, which is not the case. proposed securities brokerage activities and the previ- Because Applicant will not provide advice or research ously approved investment advisory and bank-eligible in connection with securities it brokers pursuant to underwriting and dealing activities. section 225.25(b)(15) and will maintain a functional Applicant has stated that it will carry over to SIC and operational separation between SIC's securities existing operational arrangements in Sovran Bank to brokerage services and its authorized underwriting, maintain the functional and operational separation that dealing, and investment advisory activities, the Board already exists between Sovran Bank's securities bro- believes the proposal is permissible under section kerage activities and its underwriting, dealing, and 225.25(b)(15) of Regulation Y and does not violate the advisory activities. Specifically, the proposed securi- Glass-Steagall Act.8 The Board's approval of this application is expressly conditioned on the fact that ties brokerage services will be performed by personnel SIC will not provide any advice or research services in who will be instructed specifically not to provide, and will not provide, any investment advice.6 All securities connection with its securities brokerage services under section 225.25(b)(15) and will maintain a functional brokerage orders will be taken by telephone in tape separation between such activities and its other activirecorded transactions, and Applicant will monitor and ties as described in this application. In the Board's provide regulatory access to the recordings to ensure view, the critical consideration under section that no investment advice is provided by securities 225.25(b)(15) of Regulation Y is whether the securities brokerage personnel. Securities brokerage personnel brokerage activity is conducted separate and apart will be compensated by fixed salary rather than by from investment advisory, dealing or underwriting commission to remove financial incentives for the activities, not whether the activities are conducted promotion or "selling" of securities. The securities through separate subsidiaries. brokerage personnel will have distinct training, equipment, and operational support facilities tailored specifically to the securities brokerage function, and will not 7. The personnel providing securities brokerage services will be have access to equipment providing information about located in a physically distinct and identifiable portion of SIC's premises. bank-eligible securities of the types that SIC deals in 8. The Board recently approved an application to provide securities brokerage services and consumer financial counseling through the same legal entity. United City Corporation, 71 FEDERAL RESERVE 6. Sovran Bank's securities brokerage customers can purchase for BULLETIN 662 (1985). The Board found that several commitments a separate fee certain types of advisory services from the unaffiliated offered by the applicant would be sufficient to establish the degree of registered broker-dealer that acts as the clearing agent for all of functional separation between securities brokerage services and con- Sovran Bank's securities brokerage trades. Sovran Bank does not, sumer financial counseling services that is required under the proviso however, receive any portion of this fee. of section 225.25(b)(15) that prohibits investment advice. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

148 Federal Reserve Bulletin • February 1986 The Board has considered the SIA's assertions that is, approved. This determination is subject to all the consummation of the proposal could result in conflicts conditions set forth in Regulation Y, including those in of interest and unsound banking practices, but be- sections 225.4(d) and 225.23(b), 12 C.F.R. §§ 225.4(d) lieves these objections are not warranted because they and 225.23(b), and to the Board's authority to require presuppose an integration of securities brokerage with such modification or termination of the activities of a investment advisory and research services—an inte- bank holding company or any of its subsidiaries as the gration that, for the reasons discussed above, is not Board finds necessary to assure compliance with the involved in Applicant's proposal. As in BankAmerica provisions and purposes of the Act and the Board's Corporation (Schwab),9 SIC will not have a "sales- regulations and orders issued thereunder, or to preman's stake" or other promotional interest in any vent evasion thereof. securities it brokers because it will not purchase or sell The transaction shall be consummated not later than any such securities for its own account, and will not three months after the effective date of this Order, provide any investment advice or research in connec- unless such period is extended for good cause by the tion with its securities brokerage services authorized Board or by the Federal Reserve Bank of Richmond, under section 225.25(b)(15) of Regulation Y. acting pursuant to delegated authority. The Board has also considered SIA's contention By order of the Board of Governors, effective that the voluntary or regulated restraints proposed by December 20, 1985. Applicant are inadequate to address the problems raised by the application under the BHC Act or the Voting for this action: Chairman Volcker and Governors Glass-Steagall Act. The Board, however, believes it Martin, Rice, and Seger. Absent and not voting: Governors Wallich and Partee. appropriate to rely on the fact that Applicant will not offer investment advice or research in connection with JAMES MCAFEE its securities brokerage activities and will maintain a [SEAL] Associate Secretary of the Board functional and operational separation between the securities brokerage activities of SIC and its underwriting, dealing, and investment advisory activities Wells Fargo & Company relating to bank-eligible securities.10 Moreover, Appli- San Francisco, California cant has established mechanisms and procedures to ensure that no advice or research services will be Order Approving the Issuance and Sale of Variably provided in connection with securities it brokers pur- Denominated Payment Instruments suant to section 225.25(b)(15) of Regulation Y, which the Board believes are appropriate. Wells Fargo & Company ("Applicant" or "Wells The Board's approval of the present application is Fargo"), San Francisco, California, a bank holding based solely on its finding that the proposal is consis- company within the meaning of the Bank Holding tent with the requirements of section 225.25(b)(15) of Company Act ("Act"), has applied for the Board's Regulation Y. It does not constitute in any way a approval under section (4)(c)(8) of the Act (12 U.S.C. determination that the combination of securities bro- § 1843(c)(8)) and section 225.23(a)(3) of the Board's kerage and investment advisory or underwriting activi- Regulation Y (12 C.F.R. § 225.23(a)(3)), to engage de ties is permissible under section 20 of the Glass- novo in the issuance and sale of payment instruments, Steagall Act or is so closely related to banking as to be as follows: a proper incident thereto under section 4(c)(8) of the (1) domestic money orders up to a maximum face BHC Act. The Board has this issue under consider- value of $10,000; ation in connection with a proposal by National West- (2) international money orders in denominations not minster Bank PLC, London, England. to exceed $10,000; and Based upon the foregoing and other facts of record, (3) official checks with no maximum limitation on the Board concludes that the balance of the public the face amount, but subject to certain conditions. interest factors it must consider under section 4(c)(8) These instruments would be sold throughout Caliof the Act is favorable. Accordingly, the Board has fornia exclusively through branches of its subsiddetermined that the application should be, and hereby iary, Wells Fargo Bank, N.A. ("Wells Fargo Bank").1 9. 69 FEDERAL RESERVE BULLETIN 105 (1983). 10. E.g., Independent Insurance Agents of America, Inc. v. Board of Governors, 736 F.2d 468, 474-476 (8th Cir. 1984); Independent 1. In this regard, Applicant relies on section 4(c)(1)(C) of the Act Insurance Agents of America, Inc. v. Board of Governors, 646 F.2d for authority to furnish data processing, marketing, and servicing 868, 869-870 (4th Cir. 1981). assistance in connection with its payment instrument activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 149 Notice of the application, affording interested per- for managing the extensive sales and servicing operasons an opportunity to submit comments, has been tion necessary for handling a low unit-price, highpublished (50 Federal Register 47,274 (1985)). The volume product. Such capabilities frequently are assotime for filing comments has expired, and the Board ciated with banking organizations of significant size, has considered the application and all comments re- such as Wells Fargo. Wells Fargo's entry into this ceived in light of the public interest factors set forth in market would result in increased competition in an section 4(c)(8) of the Act. industry that currently is highly concentrated. Accord- Wells Fargo controls total consolidated assets of ingly, the Board views Wells Fargo's proposal as $29.2 billion and is the third largest bank holding procompetitive and in the public interest. company in the state of California based on total Applicant proposes to issue and sell domestic and domestic deposits in Wells Fargo Bank.2 Wells Fargo international money orders with a maximum face also engages in a number of nonbanking activities. value of $10,000, and official checks with no limitation Regulation Y includes on the list of permissible on the maximum face amount. In its BankAmerica nonbanking activities the issuance and sale of money Order, the Board noted its concern that the issuance of orders and other similar consumer-type payment in- such instruments with a face value of over $1,000 struments with a face value not exceeding $1,000.3 The could result in an adverse effect on the reserve base Board previously has approved by Order applications because such instruments are not subject to transacto engage in the issuance of payment instruments with tion account reserve requirements. Because reserve a maximum face value of $10,000.4 In its Orders, the requirements serve as an essential tool of monetary Board found that an increase in the denomination of policy, the Board was concerned that the BankAmerisuch instruments would not affect the fundamental ca proposal might result in adverse effects on monenature of the payment instruments, and the Board tary policy. concluded that the issuance and sale of the proposed In order to assess the effects of that proposal on the instruments in increased denominations is closely re- reserve base, the Board determined that it should lated to banking. closely monitor its effects on the Board's conduct of In order to approve this application, the Board must monetary policy. To that end, the Board approved the also find that the performance of the proposed activity BankAmerica proposal to issue such instruments with by Wells Fargo "can reasonably be expected to pro- a face value up to $10,000, but required BankAmerica duce benefits to the public, such as greater conve- to file with the Board weekly reports of daily data on nience, increased competition, or gains in efficiency, this activity. If it appeared that the activity caused a that outweigh possible adverse effects, such as undue significant reduction in the reserve base or other concentration of resources, decreased or unfair com- adverse effect on the conduct of monetary policy, the petition, conflicts or interests, or unsound banking Board stated that it might impose reserve requirepractices." ments on such transactions, pursuant to section 19 of Consumer-type payment instruments, such as tradi- the Federal Reserve Act (12 U.S.C. § 461(a)) and the tional money orders, are marketed nationally on the Board's Regulation D (12 C.F.R Part 204). wholesale level by a few large organizations and To address the monetary policy concerns expressed locally on the retail level by a wide variety of financial in the Board's BankAmerica Order, Wells Fargo has and nonfinancial institutions.5 On the national scale, committed that it shall deposit into a demand deposit the market is highly concentrated, being dominated by account at its subsidiary, Wells Fargo Bank, all the a few large organizations. Entry into this business on a proceeds of any official check having a face value in national scale involves overcoming significant barriers excess of $10,000, and the proceeds of each item will because a potential entrant must possess the capability remain in the demand account until the respective payment instrument is paid. Weekly reports will be made of daily data showing separately the aggregate 2. Asset data are as of June 30, 1985, and deposit data are as of value of all outstanding instruments (including money March 31, 1985. 3. 12 C.F.R. § 225.25(b)(12). orders as well as official checks) with face values of up 4. BankAmerica Corporation, 70 FEDERAL RESERVE BULLETIN 364 to $10,000, as well as the aggregate value of all official (1984); see also The Chase Manhattan Corporation, 71 FEDERAL checks with face values exceeding $10,000. RESERVE BULLETIN 905 (1985); and Citicorp, 71 FEDERAL RESERVE BULLETIN 58 (1985). Applicant contends that implementation of the fore- 5. Money orders are primarily used to transmit money by consum- going commitments and procedures will maintain reers who do not or cannot maintain checking accounts. Traditionally, money orders have a maximum face value printed on the instrument, serves at the same level as would be the case if the which is generally at or lower than the limit set by Regulation Y. Board were to approve an application to increase the Official checks can be used as a substitute for a variety of payment denomination of official checks available for sale by instruments, such as cashier's checks, and could be used by businesses as part of their cash management strategy. Wells Fargo from $1,000 to $10,000 (as previously Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

150 Federal Reserve Bulletin • February 1986 approved by order for other bank holding companies), Orders Issued Under Sections 3 and 4 of the but at the same time will permit Wells Fargo to Bank Holding Company Act increase the efficiency and reduce the overall cost of its payment instrument activities. Having reviewed the Hudson Financial Associates proposal, the Board has determined that the commit- Wayne, New Jersey ments and procedures outlined therein sufficiently mitigate the Board's concerns regarding potential ad- Order Approving Application to Become a Bank verse effects on the reserve base, as to allow Applicant Holding Company and Engage in Certain to commence the activity as proposed. The Board's Nonbanking Activities approval for Applicant to engage in this activity, of course, is subject to the continued evaluation of its Hudson Financial Associates, Wayne, New Jersey, potential adverse effects on monetary policy. If the has applied under section 3(a)(1) of the Bank Holding Board discerns such effects in the future, the Board Company Act ("BHC Act"), 12 U.S.C. § 1842(a)(1), would require appropriate modification of the activity to become a bank holding company by acquiring up to and/or imposition of additional reserve requirements. 24.9 percent of the voting shares of HUBCO, Inc. The record shows that the sale of these larger- ("HUBCO"), Union City, New Jersey, a bank holding denominated money orders by Wells Fargo would company by virtue of its control of Hudson United increase competition in this field and enhance the Bank ("Bank"), Union City, New Jersey.1 Applicant convenience of purchasers. The Board finds that these also has applied under section 4(c)(8) of the BHC Act, instruments, which will be issued by a large financial 12 U.S.C. § 1843(c)(8), to acquire indirectly HUB organization and will enjoy ready acceptability, will Financial Services, Inc. ("HUB Financial"), Union provide benefits to the public. Moreover, there is no City, New Jersey. HUB Financial provides data proevidence in the record that consummation of this cessing services and leases personal property. The proposal would result in adverse effects, such as Board has previously determined that these activities unsound banking practices, unfair competition, con- are closely related to banking and permissible for bank flicts of interests, or undue concentration of resources. holding companies. 12 C.F.R. §§ 225.25(b)(5) and (7). Based upon the foregoing and other considerations Notice of the applications, affording interested perreflected in the record, the Board has determined that sons an opportunity to submit comments, has been the balance of the public interest factors it is required given in accordance with sections 3 and 4 of the BHC to consider under section 4(c)(8) is favorable. This Act, 50 Federal Register 33,107 (1985). The time for determination is subject to all of the conditions set filing comments has expired, and the Board has conforth in Regulation Y, including sections 225.4(d) and sidered the applications and all comments received, 225.23(b), and to the Board's authority to require such including those submitted by HUBCO in opposition to modification or termination of the activities of a hold- the applications, in light of the factors set forth in ing company or any of its subsidiaries as the Board section 3(c) and the considerations specified in section finds necessary to assure compliance with the provi- 4 of the BHC Act. sions and purposes of the Act and the Board's regulations and orders issued thereunder, or to prevent Agreement Between Applicant and Mr. Sheldon evasion thereof. Goldstein The activity shall be commenced no later than three months after the effective date of this Order, unless Applicant and Mr. Sheldon Goldstein have entered such period is extended for good cause by the Board or into an agreement whereby Mr. Goldstein would purby the Federal Reserve Bank of San Francisco, acting chase one-half of the HUBCO shares presently owned pursuant to delegated authority. by Applicant,2 and thereafter Applicant and By order of the Board of Governors, effective Mr. Goldstein would each purchase one-half of the December 16, 1985. HUBCO shares offered to Mr. Seidman, as agent for Hudson and Mr. Goldstein. HUBCO contends that Voting for this action: Chairman Volcker and Governors this agreement between Applicant and Mr. Goldstein Martin, Partee, Rice, and Seger. Absent and not voting: creates a company under the BHC Act and that the Governor Wallich. 1. Applicant is a limited partnership with 38 limited partners. The general partners of Applicant are Mr. Lawrence Seidman and Mr. Laurence Rappaport. JAMES MCAFEE 2. As of August 21, 1985, Applicant owned approximately 11.3 [SEAL] Associate Secretary of the Board percent of the voting shares of HUBCO. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 151 application to become a bank holding company filed Hudson each agreed to commit funds to purchase solely by Hudson is improperly filed and incomplete.3 HUBCO stock, pay any litigation costs relating to the Section 2(b) of the BHC Act defines a company as ownership of HUBCO stock, and defray the cost of "any corporation, partnership, business trust, associa- any proxy relating to HUBCO stock. Finally, absent tion, or similar organization. . ." 12 U.S.C. § 1841(b). specified events of default by either of the parties, HUBCO contends that Hudson and Mr. Goldstein Hudson and Mr. Goldstein cannot transfer or sell their have created a formalized structure to acquire and shares of HUBCO to third parties during the five-year manage HUBCO and Bank that would meet the defini- term of the agreement. tion of a "partnership" or "association" for purposes Based upon all of the facts of record, the Board has of section 2(b) of the BHC Act. The term "associa- determined that the agreement between Hudson and tion," which was added to the definition of "compa- Mr. Goldstein creates the type of structured entity that ny" in 1970, is not defined in the BHC Act. The Board constitutes an association within the meaning of sechas interpreted the term "association" to mean a tion 2(b) of the BHC Act as long as the agreement structured and somewhat formal entity controlling a remains in force.6 bank rather than a group of persons associated solely The Board's determination that the agreement bethrough common ownership of a bank.4 In this regard, tween Mr. Goldstein and Applicant creates an associathe Board, in determining whether a structured rela- tion under the BHC Act does not mean, however, that tionship is present, has considered the existence of a the application must be denied. Hudson filed a comformal agreement binding the parties together as a plete application to become a bank holding company, group, including agreements relating to the sale, trans- and provided complete notice of all aspects of this ferability, or voting of any of the shares of the bank, or transaction bearing on the statutory factors under relating to the operation or control of the bank. section 3(c) of the BHC Act, including details of the Several factors indicate that the agreement between agreement between Mr. Goldstein and Hudson. Mr. Goldstein and Hudson may create an association Mr. Goldstein has filed with the Board a notice under under the BHC Act. First, Hudson and Mr. Goldstein the Change in Bank Control Act, in which he has have entered into a formal agreement governing the provided detailed information concerning his financial acquisition, retention and voting of the shares of resources and background. Accordingly, the Board HUBCO by each party. Second, the parties are re- believes that the company has complied with the quired to purchase shares of HUBCO simultaneously application requirements of section 3(a) of the BHC and in equal amounts. Third, the parties are obligated Act to seek Board approval before becoming a bank to vote their shares of HUBCO in concert with each holding company. other with respect to any nominees to the board of HUBCO or any other matters presented to the share- Alleged Securities Law Violations holders of HUBCO. Fourth, the parties to the agreement will share certain benefits, responsibilities and HUBCO contends that the violation of various Federal liability. For example, Mr. Goldstein has agreed to pay securities laws by Applicant and its general partners is one-half of reasonable legal fees incurred and actually an adverse managerial factor that the Board must paid after May 1, 1985, in connection with litigation consider. HUBCO contends that Hudson and its geninvolving HUBCO or Bank and Hudson or its general eral partners have violated section 13(d) of the Securipartners.5 In addition, Hudson and Mr. Goldstein ties Exchange Act of 1934 ("'34 Act") by filing a agreed to divide equally any payment made by or Schedule 13D with the Securities and Exchange Comreimbursement received by Hudson for expenses in- mission ("SEC") that was intentionally false and curred in connection with the prosecution, defense or misleading in several respects and also violated the '34 settlement of the litigation involving Hudson and Act in connection with a tender offer for up to 300,000 HUBCO, and any monetary judgment awarded Hud- shares of HUBCO stock. son or its general partners. Fifth, Mr. Goldstein and In accordance with its established policy, the Board has considered HUBCO's allegations in the context of 3. Mr. Goldstein has filed a notice under the Change in Bank Control Act to acquire up to 24.9 percent of HUBCO. 6. The Board has issued a published interpretation that cer- 4. E.g., letter, dated September 13, 1977, to Mr. John P. Roemer tain voting trusts and buy-sell agreements will not be deemed from Theodore Allison, ajfd, Central Bank v. Board of Governors, to be companies under the BHC Act. The agreement between Mr. No. 77-1937, slip op. (D.C. Cir. 1979). See also American Security Goldstein and Hudson is not a voting trust since no provision is made and Trust Company, 60 FEDERAL RESERVE BULLETIN 875 (1974). for the appointment of trustees or the issuance of voting trust 5. HUBCO's management did file suit against Hudson, Seidman certificates. The agreement between Mr. Goldstein and the Applicant and Rappaport in the United States District Court for the District of does not meet the description of the typical buy-sell agreement and New Jersey, alleging violations of various federal and state securities also has several elements not present in the normal buy-sell agreement laws and banking laws. contemplated by the Board's interpretation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

152 Federal Reserve Bulletin • February 1986 its evaluation of the financial and managerial factors in that Hudson and its general partners violated these this case.7 The Board's review of the record does not commitments on several occasions.10 indicate that the alleged securities law violations by The Board has carefully considered the allegations Hudson and its general partners, even if established, that Hudson and its general partners violated the reflect any fraudulent intent by Hudson or otherwise commitments made in connection with the Notice. reflect so adversely on Hudson's managerial resources Based upon all of the facts of record, the Board has as to warrant denial of the applications. determined that neither Hudson nor its general part- In this regard, the Board notes that, with respect to ners violated any of the commitments. As noted, the alleged violations of section 13(d) of the '34 Act, Hudson has filed an application with the Board to the United States District Court for the District of become a bank holding company through the acquisi- New Jersey has considered these issues and, on tion of control of HUBCO. The commitments were November 1, 1985, dismissed the action brought by designed to ensure that Hudson would not acquire HUBCO against Hudson and its general partners.8 control of HUBCO without the Board's approval. With respect to the alleged violations in connection They were not intended to prohibit Hudson from with the tender offer, the management of HUBCO has taking the steps incidental to a proposed acquisition of presented its allegations to the SEC, which is the control to be effected with the Board's approval as agency empowered to investigate alleged violations of required by the BHC Act. Moreover, the record does the securities laws.9 not indicate that Hudson's principals have advanced any specific plans or proposals with respect to the Adherence to Commitments operation or policies of HUBCO or Bank. Mr. Seidman's comments on the litigation with which HUBCO also contends that Hudson and its general he is directly involved provide no basis for a finding of partners failed to observe commitments made in con- a violation of the commitments. nection with a notice previously filed under the Change in Bank Control Act, 12 U.S.C. § 1817, by Relationship of Hudson and Certain of Its Applicant and its general partners to acquire up to 14.4 Limited Partners percent of HUBCO. In applications under section 3 of the BHC Act the Board considers as a relevant issue HUBCO contends that Hudson cannot become a bank reflecting on an applicant's management, the appli- holding company because one of its limited partners, L cant's record of fulfilling commitments to, and any Enterprises, Wayne, New Jersey, is a real estate conditions imposed by, the Board in connection with development partnership. The general partners of Apprior applications. 12 C.F.R. § 225.13(b)(2). plicant also are general partners of L Enterprises. The Board indicated on May 20, 1985, that it did not Hudson has committed, however, that L Enterprises intend to disapprove the Notice filed by Hudson and its general partners. The Board relied upon commitments by Hudson and its general partners that they would not, among other things, exercise or attempt to exercise a controlling influence over the management or policies of HUBCO or Bank. HUBCO contends 10. HUBCO's specific allegations of violations of the commitments are as follows. On May 21, 1985, Mr. Seidman met with some shareholders of HUBCO to discuss the impact of litigation and proxy solicitation costs on the earnings of HUBCO and Bank. HUBCO 7. See, e.g., Suburban Bancorp, Inc., 71 FEDERAL RESERVE BUL- contends that the purpose of this meeting was to solicit support for LETIN 581 (1985). Hudson's program to influence HUBCO and Bank. On May 28, 1985, 8. HUBCO, Inc., et al v. Laurence J. Rappaport, No. 84-4413, Hudson, Mr. Seidman and Mr. Rappaport amended their Schedule slip, op. (D.N.J. November 1, 1985). 13D to report that they would seek to modify the commitments, that 9. With respect to the tender offer for up to 300,000 shares of they intended to seek influence or control over HUBCO and its HUBCO's stock at $18.50 per share, HUBCO alleged, in a letter to the policies and operations, and that they were negotiating with a third Director of the SEC's Division of Enforcement dated August 30,1985, party for support of their acquisition efforts. On June 18, 1985, an that Hudson and Mr. Goldstein had violated the SEC's rules and article appeared in the Newark Star Ledger that reported that Mr. regulations and the tender offer provisions of the '34 Act by its failure Seidman wanted Bank to change its operational methods and to stop to: (1) disseminate adequately information concerning the tender wasting funds through litigation against him. On the same day, offer, and that this failure may have been intended to manipulate the Hudson entered into the agreement with Mr. Goldstein. HUBCO market in HUBCO's stock; (2) disclose material financial information contends that these facts are evidence of an attempt by Hudson, Mr. about Hudson and Mr. Goldstein; (3) describe adequately the regula- Rappaport and Mr. Seidman to publicly intimidate the management of tory requirements; and (4) disclose adequately the conditions under HUBCO and thereby exercise influence, or control, over the managewhich the bidders could abandon the offer. ment and policies of HUBCO and Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 153 will divest itself of any interest in Hudson prior to the son will not be highly leveraged as a result of this acquisition of control of HUBCO.11 transaction and both Hudson and Goldstein have The Board has considered the competitive effects of adequate resources to support this transaction. Conthis application under section 3 of the BHC Act. siderations relating to the convenience and needs of Hudson and the Hudson/Goldstein "association" are the communities to be served also are consistent with non-operating companies that would control one of the approval. smaller banking organizations in New Jersey upon consummation of the proposal. Bank is the 22nd Future Prospects largest commercial bank in New Jersey. It controls deposits of $322.9 million,12 which represents less than HUBCO contends that the Board should deny the one percent of the deposits in commercial banks in application by Hudson because the acquisition of New Jersey. HUBCO's shares would only perpetuate dissension in Bank operates in the Plainfield banking market and Bank's management without permitting Hudson to in the Metropolitan New York banking market. Bank gain actual control of HUBCO or Bank. HUBCO is the 10th largest of 14 banks in the Plainfield banking relies on the Board's decision in NBC Co., 60 FEDERmarket,13 and controls 1.4 percent of the deposits in AL RESERVE BULLETIN 782 (1974), in support of its the market. Bank is the 34th largest of 103 banks in the position. There, the Board denied an application by Metropolitan New York banking market, and controls NBC Co. to acquire between 20 and 25 percent of the less than one percent of the deposits in the market. shares of a bank where the application would cause Neither Hudson nor Mr. Goldstein has any interest in continuing management division because it was opany other depository institution. Moreover, neither posed by a controlling shareholder who held 50 per- Goldstein, Rappaport or Seidman serve in any official cent of the target bank. The NBC Co. precedent does capacity in any depository institution. Accordingly, not apply where the applicant is seeking to acquire the Board has determined that consummation of the control and would become the largest shareholder of proposal would have no adverse effect on competition the target bank or bank holding company.14 in the Plainfield banking market, the Metropolitan Hudson is presently the largest single shareholder of New York banking market, or in any other relevant HUBCO voting stock, and upon consummation of the market. proposal, Hudson and Goldstein together will be the The Board has considered the financial and manage- largest single shareholder of HUBCO. Hudson has rial resources and future prospects of Hudson, the applied up to 24.9 percent of HUBCO, and together Hudson/Goldstein "association," HUBCO and Bank. with Mr. Goldstein, would control up to 49.8 percent Based upon a careful consideration of the facts of of HUBCO upon consummation of this proposal. As record, the Board has determined that financial and of December 1984, the management of HUBCO as a managerial factors are consistent with approval. Hud- group owned only 14.78 percent of HUBCO. HUBCO's position would preclude the Board from approving any proposal to acquire less than an absolute majority of the shares of a bank or bank holding company if the management of the bank or bank holding company opposes the acquisition. The BHC 11. Two other limited partners of Hudson are companies within the Act, however, recognizes that control of a bank or meaning of section 2(b) of the BHC Act and involved in real estate bank holding company is possible without ownership development and investment activities. These real estate companies of an absolute majority of voting shares. After careful could not acquire direct or indirect control of Hudson, HUBCO or Bank under the BHC Act. Neither of these companies controls more consideration of HUBCO's argument, the Board canthan a 5 percent interest in Hudson, and neither Hudson nor its not conclude that consummation of the proposal general partners have any ownership interest in these companies. In would impair the future prospects of HUBCO or addition, Applicant has made several commitments designed to prevent these real estate development companies from becoming bank Bank. holding companies with respect to Hudson, HUBCO or Bank. 12. Unless otherwise indicated, all deposit data are as of June 30, 1984. 13. The Plainfield banking market includes Middlesex County, New Jersey, which includes Middlesex, Piscataway, South Plainfield, and Dunnellen; Somerset County, New Jersey, excluding Bernards, Bernardsville, Franklin, Millstone, Montgomery and Rocky Hill; and Union County, New Jersey, including Plainfield. The Metropolitan New York banking market is defined to include New York City, Nassau, Putnam, Rockland, Westchester, and western Suffolk Counties in New York State; the northeastern two-thirds of Bergen County and eastern Hudson County in New Jersey; and southwestern Fair- 14. City Holding Company, 71 FEDERAL RESERVE BULLETIN 575 field County in Connecticut. (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

154 Federal Reserve Bulletin • February 1986 Request for Hearing ies as the Board finds necessary to assure compliance with the provisions and purposes of the BHC Act and HUBCO also has requested that the Board conduct a the Board's regulations and orders issued thereunder, formal hearing concerning the application by Hudson or to prevent evasion thereof. and the notice by Mr. Goldstein in order to develop a By order of the Board of Governors, effective full factual record. The Board is not required under December 10, 1985. section 3(b) of the BHC Act, 12 U.S.C. § 1842(b), to hold a hearing since neither the primary supervisor of Voting for this action: Chairman Volcker and Governors HUBCO nor Bank requested the Board to conduct a Martin, Partee, Rice, and Seger. Absent and not voting: Governor Wallich. hearing. The Board has reviewed the record of these applications, and has determined that HUBCO's arguments relate to the interpretation or significance to be JAMES MCAFEE accorded undisputed facts of record. Moreover, all [SEALI Associate Secretary of the Board parties have had an ample opportunity to present their arguments in writing and respond to all the submissions by each other. Accordingly, the Board has Louisiana Bancshares, Inc. determined that a hearing would serve no useful Baton Rouge, Louisiana purpose and HUBCO's request for a formal hearing is hereby denied. Order Approving the Merger of Bank Holding Applicant also has applied under section 4(c)(8) of Companies and the Acquisition of a Nonbank the BHC Act to acquire indirectly HUB Financial. Subsidiary HUB Financial provides data processing services and leases personal property. The Board has previously Louisiana Bancshares, Inc., Baton Rouge, Louisiana, found that these activities are closely related to bank- a bank holding company within the meaning of the ing and permissible for bank holding companies. Bank Holding Company Act (12 U.S.C. § 1841 12 C.F.R. §§ 225.25(b)(5) and (b)(7). et seq.) ("Act"), has applied for the Board's approval There is no evidence in the record to indicate that under section 3(a)(5) of the Act (12 U.S.C. consummation of the proposal would result in any § 1842(a)(5)) to merge with The Terrebonne Corporaadverse effects, such as undue concentration of re- tion, Houma, Louisiana ("Company"), and indirectly sources, decreased or unfair competition, conflicts of to acquire Terrebonne Bank and Trust Company, interests or unsound banking practices. Neither Hud- Houma, Louisiana ("Bank"). son nor Mr. Goldstein is involved in leasing personal Applicant has also applied for the Board's approval property or providing data processing services. Ac- under section 4(c)(8) of the Act (12 U.S.C. cordingly, the Board has determined that the balance § 1843(c)(8)) and section 225.23 of the Board's Regulaof public interest factors it must consider under sec- tion Y (12 C.F.R. § 225.23) to acquire Terre Agency, tion 4(c)(8) of the BHC Act is favorable and consistent Inc., Houma, Louisiana, a subsidiary of Company that with approval of the proposal. engages in the activity of acting as agent in the sale of Based upon the foregoing and other facts of record, credit life, credit accident, and credit health insurance the Board has determined that the applications under directly related to extensions of credit by Bank.1 sections 3 and 4 of the BHC Act should be and hereby Notice of the applications, affording opportunity for are approved. The acquisition of HUBCO's subsidiary interested persons to submit comments, has been bank shall not be consummated before the thirtieth given in accordance with sections 3 and 4 of the Act calendar day following the effective date of this Order. (50 Federal Register 41,023 (1985)). The time for filing Neither the banking acquisition nor the nonbanking comments and views has expired, and the Board has acquisition shall occur later than three months after considered the applications and all comments received the effective date of this Order, unless that period is in light of the factors set forth in section 3(c) of the Act extended for good cause by the Board or by the (12 U.S.C. § 1842(c)) and the considerations specified Federal Reserve Bank of New York, acting pursuant in section 4(c)(8) of the Act. to delegated authority. The determination with respect to the acquisition of HUB Financial is subject to all of the conditions set forth in Regulation Y, including sections 225.4(d) and 225.23(b)(3), 12 C.F.R. §§ 225.4(d) and 225.23(b)(3), and the Board's authority to require such modification or termination of the 1. Company has another subsidiary, Terrealty, which will be diactivities of a holding company or any of its subsidiarvested upon consummation of this transaction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 155 Applicant is the largest commercial banking organi- Company in the market, numerous other commercial zation in Louisiana, controlling deposits of $3.5 bil- banking organizations would remain as competitors lion, representing 11.9 percent of the total deposits in after consummation of the proposal. In addition, the commercial banking organizations in the state.2 Com- effect of this proposal on existing competition is furpany is the 24th largest commercial banking organiza- ther mitigated by the extent of competition offered by tion in the state, controlling deposits of $286.5 million, thrift institutions in the market.6 Six thrift institutions representing approximately 1.0 percent of total depos- hold 25.6 percent of the total deposits in the market. its in commercial banking organizations in the state. These institutions compete with the commercial banks Upon consummation of this proposal, Applicant in the market for transaction accounts, consumer would control deposits of $3.8 billion, representing loans and commercial loans. In view of these facts, the 12.9 percent of total deposits in commercial banking Board considers the presence of thrift institutions a organizations in the state. Consummation of this pro- significant factor in assessing the competitive effects posal would have no significant effect on the concen- of this proposal.7 Accordingly, in view of the competitration of banking resources in Louisiana. tion provided by thrift institutions and the number and Applicant and Company compete in the Houma- size of competitors remaining in the market, the Board Thibodaux banking market.3 Applicant is the fourth concludes that consummation of the proposed acquisilargest of twelve commercial banking organizations in tion is not likely to have a significant adverse effect on the Houma-Thibodaux market, controlling 13 percent competition in the Houma-Thibodaux banking market. of total deposits in commercial banks therein. Bank is The financial and managerial resources of Applithe largest commercial bank in the market, controlling cant, Terrebonne and their respective subsidiary 21 percent of total deposits in commercial banks banks are generally satisfactory and consistent with therein.4 Upon consummation of this proposal, Appli- approval. Applicant will incur no debt as a result of cant would become the largest commercial banking this transaction. Accordingly, the Board concludes organization in the market, controlling 34 percent of that banking factors are consistent with approval of the total deposits in commercial banks in the market. this proposal. Considerations relating to the conve- The Houma-Thibodaux banking market is not highly nience and needs of the community to be served are concentrated and would not become highly concen- also consistent with approval. trated upon consummation of this proposal. The share Applicant has also applied, pursuant to section of deposits held by the four largest commercial banks 4(c)(8) of the Act, to acquire Terre Agency, Inc. is 66.9 percent and the market's Herfindahl-Hirsch- ("Agency"). Agency presently acts as agent in the man Index ("HHI") is 1155. Consummation of this sale of life, accident and health insurance to assure transaction would increase the market's HHI by 548 repayment of extensions of credit by Bank. Applicant points to 1703, and the four-firm concentration ratio and Agency do not compete in the sale of life, accident would increase to 75 percent. The increase in the HHI or health insurance in any market. Accordingly, the would make this transaction one that would be subject proposed acquisition would not have any effect on to challenge under the Department of Justice Merger competition for insurance services in any relevant Guidelines.5 market. Furthermore, there is no evidence in the Although consummation of the proposal would elim- record to indicate that approval of this proposal would inate existing competition between Applicant and result in undue concentration of resources, unfair competition, conflicts of interests, unsound banking practices, or other adverse effects on the public inter- 2. Banking data are as of December 31, 1984, unless otherwise indicated. 3. The Houma-Thibodaux banking market is approximated by the Houma-Thibodaux Metropolitan Statistical Area, which consists of Lafourche and Terrebonne Parishes in Louisiana. 4. All market data are as of June 30, 1984. 6. The Board has previously determined that thrift institutions have 5. 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 between 1000 and 1800 is considered moderately (1984); Sun Banks, Inc., 69 FEDERAL RESERVE BULLETIN 934 (1983); concentrated, and the Department is likely to challenge a merger that Merchants Bancorp, Inc., 69 FEDERAL RESERVE BULLETIN 865 increases the HHI by more than 100 points, unless other facts of (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE record indicate that the merger is not likely substantially to lessen BULLETIN 298 (1983). competition. The Department has informed the Board that a bank 7. If 50 percent of the deposits held by thrift institutions were merger or acquisition generally will not be challenged (in the absence included in the calculation of market concentration, upon consummaof other factors indicating anticompetitive effects) unless the post- tion of the proposal, Applicant would control 30.3 percent of the total merger HHI is at least 1800 and the merger increases the HHI by at deposits in the market. Consummation of the proposal would increase least 200 points. the HHI by 431 points, from 1089 to 1520. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

156 Federal Reserve Bulletin • February 1986 est. Accordingly, the Board has determined that the diary in negotiations; and providing ancillary services balance of the public interest factors it must consider to buyers and sellers. under section 4(c)(8) of the Act is favorable and COIC, with consolidated assets of approximately consistent with approval of the application to acquire $13.0 billion as of year-end 1984, is a corporation Agency. organized under section 25(a) of the Federal Reserve Based on the foregoing and other facts of record, the Act (an "Edge Corporation") and is a wholly owned Board has determined that the applications under subsidiary of Citibank, N.A., New York, New York. sections 3 and 4 of the Act should be, and hereby are, Citibank is a subsidiary of Citicorp, New York, New approved. The merger shall not be consummated York, the largest commercial banking organization in before the thirtieth calendar day following the effective the United States, with consolidated assets of $169 date of this Order, and neither the merger nor the billion as of September 30, 1985. acquisition of Agency shall occur later than three In reviewing proposals by U.S. banking organizamonths after the effective date of this Order, unless tions to engage in activities overseas, the Board has such period is extended for good cause by the Board or recognized that in other banking and financial sysby the Federal Reserve Bank of Atlanta pursuant to tems, local institutions are often permitted to engage in delegated authority. The determination as to Appli- activities that would not be permissible for United cant's nonbanking activity is subject to the conditions States banking organizations under applicable United set forth in Regulation Y, including those in sections States laws and regulations. In the Edge Act and the 225.4(d) and 225.23(b), and to the Board's authority to Bank Holding Company Act, the Board has been require such modification or termination of the activi- granted authority to permit activities abroad that are ties of a holding company or any of its subsidiaries as generally not authorized in the United States for bank the Board finds necessary to assure compliance with holding companies. the provisions and purposes of the Act and the Board's In the exercise of that authority, the Board has regulations and orders issued thereunder, or to pre- adhered to the policy that the foreign activities that it vent evasion thereof. authorizes should be of a banking or financial, as By order of the Board of Governors, effective opposed to commercial, nature, or that such activities December 17, 1985. should be usual in connection with banking or other financial operations abroad. The Board may also con- Voting for this action: Chairman Volcker and Governors sider whether conduct of the activity will enable the Martin, Partee, Rice, and Seger. Absent and not voting: U.S. banking organization to compete effectively with Governor Wallich. foreign organizations. In addition, the Board takes into account whether the performance of the activity by a JAMES MCAFEE United States banking organization overseas is con- [SEAL] Associate Secretary of the Board sistent with the prudent conduct and management of the company's banking and nonbanking operations, and the effect of the activity on the capital and Orders Issued Under the Federal Reserve Act managerial resources of the U.S. banking organization. The activity of acting as a real estate broker is not Citibank Overseas Investment Corporation contained in the list of activities that the Board has Wilmington, Delaware found to be usual in connection with the transaction of banking or financial operations abroad. 12 C.F.R. Order Approving Additional Activity under Section § 211.5(d). 25(a) of the Federal Reserve Act In support of its application, COIC has asserted that a number of major banking organizations in Hong Citibank Overseas Investment Corporation Kong offer real estate brokerage services either direct- ("COIC"), Wilmington, Delaware, has applied for the ly or through subsidiaries and has provided materials Board's consent under section 25(a) of the Federal relating to advertising of such services by several of Reserve Act (12 U.S.C. § 615(c)) and section 211.5(d) these banks. COIC also asserts that the activity can be of the Board's Regulation K (12 C.F.R. § 211.5(d)) to considered a natural extension of the Citicorp organiengage indirectly through a de novo company, Hong zation's real estate lending activities and would enable Kong Real Estate Agency Ltd ("Agency"), Hong Citicorp to provide a more complete range of services Kong, in real estate brokerage. The proposed activi- to its customers in Hong Kong. ties of Agency would include identifying and locating The banking organizations that provide real estate properties for buyers; locating and introducing poten- brokerage services in Hong Kong appear to be among tial buyers to owners of properties; acting as interme- the largest in the market, holding a substantial percent- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 157 age of the deposits in commercial banks and other there will be no requirement that a customer of Agendeposit-takers in Hong Kong. It is these organizations, cy must accept services from Citicorp affiliates and as well as local offices and affiliates of other foreign that Citicorp's other customers will not be required to banks, with which Citicorp competes in Hong Kong. take services from Agency. In addition, Agency will Although the activities proposed are not inherently have no involvement in the credit application and banking in nature, it appears that the ability to offer approval process for properties that it handles. Theresuch services would complement other activities per- fore, it does not appear that the proposal presents any mitted to the Citicorp organization. By providing such undue risks or other adverse effects. services to customers, Citicorp would be better able to In reliance on all of the factors specified above, and compete with other local organizations in the provi- other considerations reflected in the record, the Board sion of banking and financial services in Hong Kong. has concluded that the proposed activity in the circum- Based on all of the facts reflected in the record, the stances of this case may be considered usual in con- Board concludes that acting as a real estate broker can nection with the transaction of banking or other finanbe considered usual in connection with the transaction cial operations in Hong Kong, and that its of banking and financial operations in Hong Kong. performance by COIC would not be inconsistent with In assessing the risks associated with this activity, the supervisory purposes of the Federal Reserve Act. the Board notes that the activity will require a minimal Accordingly, the application is approved. amount of capital and other financial resources. The By order of the Board of Governors, effective activities are fee-based and non-leveraged and will not December 9, 1985. subject Agency to any special liability. Agency will not purchase any real estate for its own account nor will it Voting for this action: Chairman Volcker and Governors take title to real property on an interim basis for any Martin, Partee, Rice, and Seger. Absent and not voting: customer. COIC expects to develop a customer base Governor Wallich. from customer referrals from other parts of the Citi- JAMES MCAFEE corp organization. It has committed, however, that [SEAL] Associate Secretary of the Board ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date American National Financial The American National Bank, Atlanta December 11, 1985 Corporation, Panama City, Florida Panama City, Florida Associated Banc-Corp, Memorial Drive Bank, Chicago December 3, 1985 Green Bay, Wisconsin Sheboygan, Wisconsin Benton Capital Corporation, East River Bancshares, Inc., Dallas December 10, 1985 Benton, Louisiana Benton, Louisiana Big Lake Financial Corporation, Big Lake National Bank, Atlanta November 26, 1985 Okeechobee, Florida Okeechobee, Florida Cahaba Bancorp, Cahaba Bank & Trust, Atlanta November 26, 1985 Trussville, Alabama Trussville, Alabama Capital City Bank Group, Inc., Farmers and Merchants Bank of Atlanta December 16, 1985 Tallahassee, Florida Trenton, Trenton, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

158 Federal Reserve Bulletin • February 1986 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Cattleman's Bancshares, Inc., The First National Bank of Dallas November 29, 1985 Gordon, Texas Gordon, Gordon, Texas Citizens Community FS Bancshares, Inc., Chicago December 4, 1985 Bank shares, Inc., Stetsonville, Wisconsin Wittenberg, Wisconsin Cloverdale Bank Corporation, The First National Bank of Chicago December 2, 1985 Cloverdale, Indiana Cloverdale, Cloverdale, Indiana CNB Financial Corporation, United Kansas Bancshares, Inc., Kansas City November 27, 1985 Kansas City, Kansas Atchison, Kansas Cochranton Bancorp, Inc., The First National Bank of Cleveland December 3, 1985 Cochranton, Pennsylvania Cochranton, Cochranton, Pennsylvania Cullman Bancshares, Inc., Peoples Bank of Cullman County, Atlanta November 26, 1985 Cullman, Alabama Cullman, Alabama Dermott Bancshares, Inc., First Delta Financial Corporation, St. Louis December 12, 1985 Dermott, Arkansas Dermott, Arkansas Duncanville Bancshares, Inc., First State Bank of Texas, Dallas December 13, 1985 Duncanville, Texas Duncanville, Texas Eudora Bancshares, Inc., Kaw Valley State Bank, Kansas City November 29, 1985 Eudora, Kansas Eudora, Kansas Fannin Bancorp, Inc., Fannin Bank, Dallas November 27, 1985 Windom, Texas Windom, Texas Farmers & Merchants Walter- Farmers & Merchants Bank, Richmond December 5, 1985 boro Bancshares Corporation, Walterboro, South Carolina Walterboro, South Carolina First American Bancshares, First American Bank and Trust of Dallas November 29, 1985 Inc., Friendswood, Bay town, Texas Friendswood, Texas First American Bancshares, Bank of Mulberry, St. Louis December 4, 1985 Inc., Mulberry, Arkansas North Little Rock, Arkansas 1st Bancorp Vienna, First State Bank of Vienna, St. Louis December 10, 1985 Vienna, Illinois Vienna, Illinois First Burke Banking Company, The First National Bank of Atlanta December 9, 1985 Waynesboro, Georgia Waynesboro, Waynesboro, Georgia First Busey Corporation, Farmers State Bank of Hey worth, Chicago December 23, 1985 Urbana, Illinois Hey worth, Illinois First Colonial Bankshares All American Bank of Chicago, Chicago November 29, 1985 Corporation, Chicago, Illinois Chicago, Illinois Northwest Commerce Bank, Rosemont, Illinois First Commercial Financial First Commercial Bank of Atlanta December 5, 1985 Corporation, Manatee County, Bradenton, Florida Bradenton, Florida First Financial Corporation, The Citizens State Bank, Chicago December 11, 1985 Terre Haute, Indiana Newport, Indiana First Interstate Hawaii, Inc., First Interstate Bank of Hawaii, San Francisco November 27, 1985 Honolulu, Hawaii Honolulu, Hawaii Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 159 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date First Midwest Financial First State Bank & Trust Chicago November 26, 1985 Corporation, Company of Hanover Park, Hanover Park, Illinois Hanover Park, Illinois First of America Bank Michigan National Bank-Grand Chicago December 18, 1985 Corporation, Traverse, Kalamazoo, Michigan Traverse City, Michigan Michigan National Bank-North, Petoskey, Michigan First Western Bancorp, Inc., Beaver Trust Company, Cleveland December 5, 1985 New Castle, Pennsylvania Beaver, Pennsylvania Foresight Financial Group, Inc., German-American State Bank, Chicago November 29, 1985 Freeport, Illinois German Valley, Illinois State Bank of Davis, Davis, Illinois Gassaway Bancshares, Inc., Bank of Gassaway, Richmond December 12, 1985 Gassaway, West Virginia Gassaway, West Virginia Gibsland Bancshares, Inc., Gibsland Bank & Trust Dallas December 12, 1985 Gibsland, Louisiana Company, Gibsland, Louisiana Independent Bank Corp., Rockland Trust Company, Boston December 4, 1985 Rockland, Massachusetts Rockland, Massachusetts Middleborough Trust Company, Middleboro, Massachusetts Lynxx Banking Corporation, Farmers and Merchants Bank, St. Louis December 13, 1985 Little Rock, Arkansas Rogers, Arkansas First National Bank, Bentonville, Arkansas Macon Capital Corporation, Alabama Exchange Bank, Atlanta December 9, 1985 Prattville, Alabama Tuskegee, Alabama Mapleton Bancshares, Inc., First National Bank of Mapleton, Minneapolis December 4, 1985 Mapleton, Minnesota Mapleton, Minnesota Metropolitan Bancshares, Inc., Metropolitan National Bank, St. Louis December 5, 1985 Springfield, Missouri Springfield, Missouri Ocean Bankshares, Inc., Ocean Bank of Miami, Atlanta December 9, 1985 Miami, Florida Miami, Florida Olde Windsor Bancorp, Inc., New England Bank and Trust Boston December 16, 1985 Windsor, Connecticut Company, Enfield, Connecticut Patterson Bankshares, Inc., The Patterson Bank, Atlanta December 10, 1985 Patterson, Georgia Patterson, Georgia The Peoples Bancshares The Peoples Bank and Trust Cleveland December 10, 1985 Corporation, Company, Van Wert, Ohio Van Wert, Ohio Peoples National of LaFollette The Peoples National Bank of Atlanta December 17, 1985 Financial Corporation, LaFollette, LaFollette, Tennessee LaFollette, Tennessee Rosendale Bancshares, Inc., Rosendale State Bank, Chicago December 11, 1985 Rosendale, Wisconsin Rosendale, Wisconsin St. Stephen Bancorporation, St. Stephen State Bank, Minneapolis December 4, 1985 Minneapolis, Minnesota St. Stephen, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

160 Federal Reserve Bulletin • February 1986 Section 3—Continued . r» i / \ Reserve Effective Applicant Bank(s) ^ date Security Bank Shares, Inc., Bank of New Auburn, Minneapolis December 16, 1985 Port Wing, Wisconsin New Auburn, Wisconsin 7L Corporation, First Florida Banks, Inc., Atlanta November 29, 1985 Tampa, Florida Tampa, Florida South Alabama Bancorporation, The First National Bank, Atlanta December 6, 1985 Inc., Brewton, Alabama Brewton, Alabama Southern National Corporation, Horry County National Bank, Richmond December 6, 1985 Lumberton, North Carolina Loris, South Carolina SSB, Inc., The State Savings Bank of Minneapolis December 13, 1985 Manistique, Michigan Manistique, Manistique, Michigan Summcorp, Decatur Financial, Inc., Chicago November 27, 1985 Fort Wayne, Indiana Decatur, Indiana Sun Belt Bancshares National Bank of Conroe, Dallas December 13, 1985 Corporation, Conroe, Texas Conroe, Texas Texas American Bancshares, BancTEXAS Tyler, N.A., Dallas December 16, 1985 Inc., Tyler, Texas Fort Worth, Texas Union National Corporation, First Financial Group, Inc., Cleveland December 11, 1985 Mount Lebanon, Washington, Pennsylvania Pennsylvania USA FIRSTRUST, INC., First National Bank of Oglesby, Chicago December 6, 1985 Oglesby, Illinois Oglesby, Illinois Wayne Bancorp, Inc., The Wayne County National Cleveland December 6, 1985 Wooster, Ohio Bank of Wooster, Wooster, Ohio Wesbanco, Inc., Wellsburg National Bank, Cleveland November 29, 1985 Wheeling, West Virginia Wellsburg, West Virginia Wichita Falls Bancshares, Inc., First National Bank, Dallas December 13, 1985 Wichita Falls, Texas Wichita Falls, Texas Section 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Bank of Virginia Company, Internet, Inc., Richmond December 13, 1985 Richmond, Virginia Reston, Virginia The Sanwa Bank, Limited, to acquire certain assets from two San Francisco November 26, 1985 Higashi-ku, Osaka, Japan subsidiaries of Commercial Credit Company, Baltimore, Maryland Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 161 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Beaver Trust Company , Beaver Trust Company Interim Cleveland December 18, 1985 Beaver, Pennsylvania Bank, Beaver, Pennsylvania First Railroad & Banking Georgia State Bank, Atlanta November 27, 1985 Company of Georgia, Martinez, Georgia Augusta, Georgia First Railroad & Banking Gwinnett Bank & Trust Atlanta November 27, 1985 Company of Georgia, Company, Augusta, Georgia Norcross, Georgia First Railroad & Banking Washington Loan and Banking Atlanta November 27, 1985 Company of Georgia, Company, Augusta, Georgia Washington, Georgia Boca Bank, Boca Interim Bank, Atlanta December 16, 1985 Boca Raton, Florida Boca Raton, Florida ONB Merger Bank I, First-Citizens Bank and Trust Chicago November 29, 1985 Greencastle, Indiana Company, Greencastle, Indiana 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 Wight, et al. v. Internal Revenue Service, et al., No. Ownership Plan v. Board of Governors, No. 85- CIV S-85-0012 MLS (E.D. Cal., filed July 12,1985). 2615 (7th Cir., filed Sept. 23, 1985). Cook v. Spillman, et al, No. CIV S-85-0953 EJG First National Bancshares II v. Board of Governors, (E.D. Cal. filed July 10, 1985). No. 85-3702 (6th Cir., filed Sept. 4, 1985). Calhoun, et al. v. Board of Governors, No. 85-1750 Independent Community Bankers Associaton of South (D.D.C., filed May 30, 1985). Dakota v. Board of Governors, No. 84-1496 (D.C. Florida Bankers Association v. Board of Governors, Cir., filed Aug. 7, 1985). No. 84-3883 and No. 84-3884 (11th Cir., filed Feb. Florida Bankers Association, et al. v. Board of Gover- 15, 1985). nors, No. 85-193 (U.S., filed Aug. 5, 1985). Florida Department of Banking v. Board of Gover- Populist Party of Iowa v. Federal Reserve Board, No. nors, No. 84-3831 (11th Cir., filed Feb. 15, 1985), 85-626-B (S.D. Iowa, filed Aug. 2, 1985). and No. 84-3832 (11th Cir., filed Feb. 15, 1985). John R. Urwyler, et al. v. Internal Revenue Service, et Dimension Financial Corporation v. Board of Goveral., No. CV-F-85-402 REC (E.D. Cal., filed July 18, nors, No. 84-1274 (U.S., filed Feb. 6, 1985). 1985). Lewis v. Volcker, et al., No. C-1-85-0099 (S.D. Ohio, Broad Street National Bank of Trenton v. Board of filed Jan. 14, 1985). Governors, No. 85-3387 (3d Cir., filed July 17, Brown v. United States Congress, et al., No. 84-2887- 1985). 6(IG) (S.D. Cal., filed Dec. 7, 1984). Legal Developments continued on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

162 Federal Reserve Bulletin • February 1986 Seattle Bancorporation, et al. v. Board of Governors, First Bancorporation v. Board of Governors, No. 84- No 84-7535 (9th Cir., filed Aug. 15, 1984). 1011 (10th Cir., filed Jan. 5, 1984). Melcher v. Federal Open Market Committee, No. 84- Oklahoma Bankers Association v. Federal Reserve 1335 (D.D.C., filed Apr. 30, 1984). Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983). State of Ohio v. Board of Governors, No. 84-1270 The Committee For Monetary Reform, et al. v. Board (10th Cir., filed Jan. 30, 1984). of Governors, No. 84-5067 (D.D.C., filed June 16, Colorado Industrial Bankers Association v. Board of 1983). Governors, No. 84-1122 (10th Cir., filed Jan. 27, Securities Industry Association v. Board of Gover- 1984). nors, 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

AL Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT A22 Gross demand deposits—individuals, partnerships, and corporations A3 Reserves, money stock, liquid assets, and debt measures A4 Reserves of depository institutions, Reserve FINANCIAL MARKETS Bank credit A5 Reserves and borrowings—Depository A23 Commercial paper and bankers dollar institutions acceptances outstanding A5 Federal funds and repurchase agreements— A23 Prime rate charged by banks on short-term Large member banks business loans A24 Interest rates—money and capital markets A25 Stock market—Selected statistics POLICY INSTRUMENTS A26 Selected financial institutions—Selected assets and liabilities A6 Federal Reserve Bank interest rates A7 Reserve requirements of depository institutions A8 Maximum interest rates payable on time and FEDERAL FINANCE savings deposits at federally insured institutions A9 Federal Reserve open market transactions A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation FEDERAL RESERVE BANKS A30 Gross public debt of U.S. Treasury—Types and ownership A10 Condition and Federal Reserve note statements A31 U.S. government securities dealers— All Maturity distribution of loan and security Transactions holdings A32 U.S. government securities dealers—Positions and financing A33 Federal and federally sponsored credit MONETARY AND CREDIT AGGREGATES agencies—Debt outstanding A12 Aggregate reserves of depository institutions and monetary base SECURITIES MARKETS AND A13 Money stock, liquid assets, and debt measures CORPORATE FINANCE A15 Bank debits and deposit turnover A16 Loans and securities—All commercial banks A34 New security issues—State and local governments and corporations A35 Open-end investment companies—Net sales and COMMERCIAL BANKING INSTITUTIONS asset position A17 Major nondeposit funds A18 Assets and liabilities, last-Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • February 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 SUMMARY STATISTICS A53 U.S. international transactions—Summary 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 Ql Q2 Q3 July Aug. Sept. Oct. Nov. Reserves of depository institutions2 1 Total 3.8 17.4 12.2 16.4 12.2 16.5 8.7 4.0 19.7 2 Required 3.0 16.9 12.3 17.1 13.9 17.7 13.5 1.6' 15.2 3 Nonborrowed 36.3 57.3 14.1 18.2 15.4 18.0 2.8 7.0 4.7 4 Monetary base3 4.7 8.2 7.5 10.2' 6.8 13.3' 7.0 6.1 10.1 Concepts of money, liquid assets, and debt4 5 Ml 3.2 10.6 10.2 15.C 9.3 20.3' ll.P -!.&• 13.2 6 M2 9.1 12.1 5.3 10.2 8.6 11.3 7.1' 2.1' 6.6 7 M3 11.0 10.7 5.3' 8.3' 4.9' 9.7' 10.1 3.9' 5.1 8 L 9.6 10.0 6.(K 9.0' 6.2' 12.4' lO.O' n.a. n.a. 9 Debt 14.0 13.6 11.8r 12.3' 12.&- 12.0' 11.(V n.a. n.a. Nontransaction components 10 InM25 10.9 12.5 3.8 8.7 8.4 8.4 5.6' 3.3 4.6 11 In M3 only6 18.7 5.5 5.1' .8' -9.5' 3.4' 22.3 10.9' -1.1 Time and savings deposits Commercial banks 12 Savings7 -10.4 -8.7 -1.7 11.3 12.8 9.7 3.9 4.8 1.9 13 Small-denomination time8 6.9 -1.8 6.5 -4.4 -7.1 -13.3 -4.1 -3.1 -.3 14 Large-denomination time9,10 12.2 2.6 8.3 -3.2 -9.0' 8.6' 23.8' 18.9' 12.1 Thrift institutions 15 Savings7 -6.6 2.2 3.1 14.7 18.3 22.9 6.8 14.9 7.4 16 Small-denomination time 15.2 1.7 3.9 -4.6 -7.9 -13.9 -6.6 -4.1' .0 17 Large-denomination time9 29.8 21.0 2.6 -2.8 -16.9 -3.9 15.6 3.1 11.5 Debt components4 18 Federal 16.1 15.2' 12.3 14.6' 14.2' 7.7' 8.7 n.a. 19 Nonfederal 13.3 13.1' 11.6 ll^ 11.4' 11.4' 12.1' 12.5 n.a. 20 Total loans and securities at commercial banks" 9.2 10.1 9.7 9.6 10.9 6.5 8.2 2.0 16.4 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 Federal Reserve Banks plus the currency component of the money stock less money market funds, and foreign banks and official institutions. Also subtracted is the amount of vault cash holdings of thrift institutions that is included in the a consolidation adjustment that represents the estimated amount of overnight RPs currency component of the money stock plus, for institutions not having required and Eurodollars held by institution-only money market mutual funds. reserve balances, the excess of current vault cash over the amount applied to L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term satisfy current reserve requirements. After the introduction of contemporaneous Treasury securities, commercial paper and bankers acceptances, net of money reserve requirements (CRR), currency and vault cash figures are measured over market mutual fund holdings of these assets. the weekly computation period ending Monday. Debt: Debt of domestic nonfinancial sectors consists of outstanding credit Before CRR, all components of the monetary base other than excess reserves market debt of the U.S. government, state and local governments, and private are seasonally adjusted as a whole, rather than by component, and excess nonfinancial sectors. Private debt consists of corporate bonds, mortgages, conreserves are added on a not seasonally adjusted basis. After CRR, the seasonally sumer credit (including bank loans), other bank loans, commercial paper, bankers adjusted series consists of seasonally adjusted total reserves, which include acceptances, and other debt instruments. The source of data on domestic excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt currency component of the money stock plus the remaining items seasonally data are on an end-of-month basis. Growth rates for debt reflect adjustments for adjusted as a whole. discontinuities over time in the levels of debt presented in other tables. 4. Composition of the money stock measures and debt is as follows: 5. Sum of overnight RPs and Eurodollars, money market fund balances Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults (general purpose and broker/dealer), MMDAs, and savings and small time of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits deposits less the estimated amount of demand deposits and vault cash held by at all commercial banks other than those due to domestic banks, the U.S. thrift institutions to service their time and savings deposit liabilities. government, and foreign banks and official institutions less cash items in the 6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents, process of collection and Federal Reserve float; and (4) other checkable deposits money market fund balances (institution-only), less a consolidation adjustment (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer that represents the estimated amount of overnight RPs and Eurodollars held by service (ATS) accounts at depository institutions, credit union share draft institution-only money market mutual funds. accounts, and demand deposits at thrift institutions. The currency and demand 7. Excludes MMDAs. deposit components exclude the estimated amount of vault cash and demand 8. Small-denomination time deposits—including retail RPs—are those issued deposits respectively held by thrift institutions to service their OCD liabilities. in amounts of less than $100,000. All IRA and Keogh accounts at commercial M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) banks and thrifts are subtracted from small time deposits. issued by all commercial banks and overnight Eurodollars issued to U.S. residents 9. Large-denomination time deposits are those issued in amounts of $100,000 by foreign branches of U.S. banks worldwide, 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 bying 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. officii 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 Nonfinancial Statistics • February 1986 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of Weekly averages of daily figures for week ending daily figures FFFaaaccctttooorrrsss 1985 1985 Sept. Oct. Nov. Oct. 16 Oct. 23 Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 194,350 193,817 196,936 193,731 195,568 193,075 195,109 * 198,178 196,468 198,854 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 171,246 170,018 171,234 170,667 171,140 168,755 170,611 172,407 171,242 171,384 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 170,503 170,018 170,943 170,667 171,140 168,755 170,611 172,180 170,222 171,384 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 743 0 291 0 0 0 0 227 1,020 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,428 8,227 8,362 8,227 8,227 8,227 8,227 8,476 8,556 8,227 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 8,227 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 201 0 135 0 0 0 0 249 329 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 1,283 1,140 1,920 935 1,301 1,025 1,125 791 1,565 4,282 1111100000 FFFFFllllloooooaaaaattttt 779 669 1,203 500 869 566 369 1,471 1,494 1,287' 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 12,614 13,763 14,217 13,402 14,031 14,502 14,777 15,033 13,610 13,674 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 4,692 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 16,892' 16,943' 16,994 16,938 16,950 16,962 16,973 16,985 16,997 17,009 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 188,364' 189,053' 191,396 189,784 189,401 188,520 189,786 191,389 191,553 191,743 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 546 543 553 541 544 544 547 554 554 554 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 4,275 3,006 2,925 2,945 3,650 2,664 3,107 3,064 3,008 2,587 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 235 214 242 203 193 203 236 229 231 246 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,607 1,738 1,795 1,832 1,809 1,671 1,683 1,714 1,718 1,729 2222200000 OOOOOttttthhhhheeeeerrrrr 466 446 574 545 441 375 624 473 667 518 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,274 6,270 6,339 6,226 6,233 6,170 6,366 6,343 6,267 6,390 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 25,183 25,272 25,914 24,400 26,056 25,697 25,539 27,207 25,274 27,903 End-of-month figures Wednesday figures 1985 1985 Sept. Oct. Nov. Oct. 16 Oct. 23 Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 194,148 192,884 194,729 194,398 198,249 186,296 199,092 201,217 191,810 192,701 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 169,702 168,705 169,168 170,238 172,215 161,902 172,377 172,282 163,594 167,889 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 169,702 168,705 169,168 170,238 172,215 161,902 172,377 172,282 163,594 167,889 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 0 0 0 0 0 0 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,227 8,227 8,227 8,227 8,227 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 0 0 0 0 0 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 2,520 886 1,602 887 2,355 1,092 2,446 758 4,682 924 3333322222 FFFFFllllloooooaaaaattttt 69 335 909 1,500 1,018 355 940 4,653 1,527 1,848 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 13,630 14,731 14,823 13,546 14,434 14,720 15,102 15,297 13,780 13,813 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 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 16,912' 16,971' 17,019 16,948' 16,960' 16,971' 16,983 16,995 17,007 17,019 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 187,325' 189,490' 193,463 190,138' 189,015' 188,886' 190,645 192,022 191,441 193,131 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 546 547 556 544 544 547 555 544 554 554 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 4,174 1,528 2,294 2,773 2,590 1,186 3,955 3,310 2,652 2,331 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 535 268 340 144 180 221 210 229 236 250 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,444 1,469 1,483 1,463 1,461 1,468 1,469 1,481 1,481 1,484 4444422222 OOOOOttttthhhhheeeeerrrrr 497 372 598 674 372 377 529 479 534 440 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,530 6,339 6,475 6,107 6,063 5,964 6,193 6,0% 6,018 6,004 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 25,718 25,650 22,347 25,311 30,793 20,426 28,327 29,849 21,708 21,332 1. Includes securities loaned—fully guaranteed by U.S government securities 2. Excludes required clearing balances and adjustments to compensate for pledged with Federal Reserve Banks—and excludes (if any) securities sold and float. scheduled to be bought back under matched sale-purchase transactions. NOTE. For amounts of currency and coin held as reserves, see table 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages8 RReesseerrvvee ccllaassssiiffiiccaattiioonn 1982 1983 1984 1985 Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. 1 Reserve balances with Reserve Banks1 24,939 21,138 21,738 23,217 22,385 23,367 23,503 23,415 24,972 25,431 2 Total vault cash2 20,392 20,755 22,316 21,567 21,898 22,180 22,530 22,839 22,465 22,724 3 Vault cash used to satisfy reserve requirements3 . 17,049 17,908 18,958 18,435 18,666 18,985 19,300 19,548 19,475 20,038 4 Surplus vault cash4 3,343 2,847 3,358 3,132 3,231 3,196 3,230 3,291 2,990 2,686 5 Total reserves5 41,853 38,894 40,696 41,652 41,051 42,352 42,803 42,963 44,447 44,469 6 Required reserves 41,353 38,333 39,843 40,914 40,247 41,447 41,948 42,135 43,782 44,716 7 Excess reserve balances at Reserve Banks6 500 561 853 738 804 905 855 827 666 753 8 Total borrowings at Reserve Banks 697 774 3,186 1,323 1,334 1,205 1,107 1,073 1,289 1,187 9 Seasonal borrowings at Reserve Banks 33 96 113 135 165 151 167 221 203 172 10 Extended credit at Reserve Banks7 187 2 2,604 868 534 665 507 570 656 629 Biweekly averages of daily figures for weeks ending 1985 Aug. 14 Aug. 28 Sept. 11 Sept. 25 Oct. 9 Oct. 23 Nov. 6r Nov. 20 Dec.4 Dec. 18? 11 Reserve balances with Reserve Banks1 23,468 23,102'' 43,509 44,800 25,553 25,232 25,643 26,242 27,002 27,564 12 Total vault cash2 22,829 23,052 21,887 22,705 23,067 22,831 22,151 22,528 22,543 22,464 13 Vault cash used to satisfy reserve requirements3 . 19,550 19,689'' 18,880 19,766 19,971 20,294 19,667 20,117 20,032 20,160 14 Surplus vault cash4 3,280 3,363' 3,008 2,939 3,097 2,538 2,484 2,412 2,511 2,304 15 Total reserves5 43,018 42,791' 43,509 44,800 45,523 45,525 45,310 46,359 47,034 47,724 16 Required reserves 42,280 41,841' 42,838 44,133 44,876 44,733 44,508 45,466 45,987 46,927 17 Excess reserve balances at Reserve Banks6 738 95C 672 667 647 793 802 893 1,048 797 18 Total borrowings at Reserve Banks 990 1,088 1,392 1,171 1,395 1,118 1,075 1,178 2,928 841 19 Seasonal borrowings at Reserve Banks 224 225 196 212 195 169 151 104 84 53 20 Extended credit at Reserve Banks7 509 610 669 656 627 649 598 522 503 524 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 Banks' Averages of daily figures, in millions of dollars 1985 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee Oct. 14 Oct. 21 Oct. 28 Nov. 4r Nov. IK Nov. 18 Nov. 25 Dec. 2 Dec. 9 One day and continuing contract 1 Commercial banks in United States 65,966 61,501 58,757 67,993 70,092 69,997 66,797 70,752 7744,,996611 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 28,238 28,620 28,543 28,652 32,264 30,383 33,679 31,771 34,070 3 Nonbank securities dealers 9,926 9,753 9,967 10,392 9,768 10,095 9,867 9,965 10,306 4 All other 25,641 26,098 26,104 26,550 25,581 27,453 30,288 27,657 29,700 All other maturities 5 Commercial banks in United States 9,582 8,822 8,490 8,953 9,588 9,333 9,778 9,869 99,,009955 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 7,629 7,114 7,073 7,075 8,093 7,476 6,911 8,053 7,325 7 Nonbank securities dealers 9,833 9,468 9,565 9,602 9,477 8,733 8,093 8,759 7,786 8 All other 7,348 7,314 7,506 7,498 7,750 8,446 8,175 12,628 7,994 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 30,925 29,495 27,025 32,516 32,175 34,330 32,778 35,834 32,729 10 Nonbank securities dealers 9,316 9,080 7,992 8,782 8,383 8,979 8,234 8,829 9,955 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • February 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 12/26/85 date rate 12/26/85 rate 12/26/85 rate 12/26/85 rate Boston M 5/20/85 8 M 8 S'A 9 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... IVI 5/21/85 8 7V2 8 SV2 9 9 VI 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. Ba o n f k Effective date A le l v l e F l) . — R. B o a f n k Effective date A le l v l e F l) . — R. Ba of n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 V/2 7'A 1978- July 3 7-71/4 71/4 1981— May 8 14 14 1974— Apr. 25 71/2-8 8 10 71/4 7>/4 Nov. 2 13-14 13 3 0 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 8>/2 20 8W 81/2 11998822—— JJuullyy 20 im-12 \\Vi 1975— Jan. 6 71/4-73/4 73/4 Nov. 1 8 >/2-9</2 91/2 23 uvi ll'/2 10 71/4-73/4 71/4 3 9>/2 9>/2 AAuugg.. 2 11-llVi 11 24 71/4 71/4 3 11 11 Feb. 5 63/4-7'/4 63/4 July 20 10 10 16 10'/2 10^ 7 63/4 63/4 Aug. 17 lO-lO1/^ 10'/2 27 10-10'/! 10 Mar. 10 6'/4-63/4 61/4 20 lO'/i 10'/> 30 10 10 14 61/4 61/4 Sept. 19 10>/2-ll 11 Oct. 12 9>/2-10 9Vi May 16 6-61/4 6 21 11 11 13 9VI 91h 23 6 6 Oct. 8 11-12 12 Nov. 22 9-9V2 9 10 12 12 26 9 9 1976— Jan. 19 51/2-6 5 '/> Dec. 14 81/2-9 9 23 51/5 Feb. 15 12-13 13 15 8V2-9 m Nov. 22 514-51/! 5>/4 19 13 13 17 8V2 m 26 51/4 5!/4 May 29 12-13 13 30 12 12 11998844—— AApprr.. 9 81/2-9 9 1977— Aug. 30 5'/4-53/4 51/4 June 13 11-12 11 13 9 9 3 1 51/4-53/4 53/4 16 11 11 Nov. 21 81/2-9 81/2 Sept. 2 53/4 53/4 July 28 10-11 10 26 m m Oct. 26 6 6 29 10 10 Dec. 24 8 8 Sept. 26 1978— Jan. 9 6-6'/2 6>/2 Nov. 17 12 12 11998855—— MMaayy 20 7!/>-8 71/! 20 6'A 61/2 Dec. 5 12-13 13 24 71/2 m May 11 61/2-7 7 8 13 13 12 7 7 5 13-14 14 In effect Dec. 26, 1985 71/2 71/2 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 8Vi 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 INSTITUTIONS' 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 a ll a 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,, aall aa 55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts7,8 7 12/30/76 $0—$31.7 million 3 12/31/85 9l/2 12/30/76 Over $31.7 million 1122 1122//3311//8855 $10 million-$100 million IP/4 12/30/76 $100 milliotv-$400 million 12% 12/30/76 Nonpersonal time deposits9 Over $400 million 16'/4 12/30/76 By original maturity Less than Vh years 3 10/6/83 Time and savings2,3 1 Vi years or more 0 10/6/83 SSaavviinnggss 3 3/16/67 Eurocurrency liabilities Time4 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years m 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 2l/l 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97- Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report 320) provides that $2 million of reservable liabilities (transaction accounts, for 1976, table 13. Under provisions of the Monetary Control Act, depository nonpersonal time deposits, and Eurocurrency liabilities) of each depository institutions include commercial banks, mutual savings banks, savings and loan institution be subject to a zero percent reserve requirement. The Board is to adjust associations, credit unions, agencies and branches offoreign banks, and Edge Act the amount of reservable liabilities subject to this zero percent reserve requirecorporations. ment each year for the next succeeding calendar year by 80 percent of the 2. Requirement schedules are graduated, and each deposit interval applies to percentage increase in the total reservable liabilities of all depository institutions, that part of the deposits of each bank. Demand deposits subject to reserve measured on an annual basis as of June 30. No corresponding adjustment is to be requirements were gross demand deposits minus cash items in process of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the collection and demand balances due from domestic banks. exemption was established at $2.1 million. Effective with the reserve maintenance The Federal Reserve Act as amended through 1978 specified different ranges of period beginning Jan. 1, 1985, the amount of the exemption is $2.4 million. requirements for reserve city banks and for other banks. Reserve cities were Effective with the reserve computation period beginning Dec. 31, 1985, the designated under a criterion adopted effective Nov. 9, 1972, by which a bank amount of the exemption is $2.7 million. In determining the reserve requirements having net demand deposits of more than $400 million was considered to have the of a depository institution, the exemption shall apply in the following order: (1) character of business of a reserve city bank. The presence of the head office of nonpersonal money market deposit accounts (MMDAs) authorized under 12 CFR such a bank constituted designation of that place as a reserve city. Cities in which section 1204.122; (2) net NOW accounts (NOW accounts less allowable deducthere were Federal Reserve Banks or branches were also reserve cities. Any tions); (3) net other transaction accounts; and (4) nonpersonal time deposits or banks having net demand deposits of $400 million or less were considered to have Eurocurrency liabilities starting with those with the highest reserve ratio. With the character of business of banks outside of reserve cities and were permitted to respect to NOW accounts and other transaction accounts, the exemption applies maintain reserves at ratios set for banks not in reserve cities. only to such accounts that would be subject to a 3 percent reserve requirement. Effective Aug. 24, 1978, the Regulation M reserve requirements on net balances 6. For nonmember banks and thrift institutions that were not members of the due from domestic banks to their foreign branches and on deposits that foreign Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3, branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent 1987. For banks that were members on or after July 1, 1979, but withdrew on or respectively. The Regulation D reserve requirement of borrowings from unrelated before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends banks abroad was also reduced to zero from 4 percent. on Oct. 24, 1985. For existing member banks the phase-in period of about three Effective with the reserve computation period beginning Nov. 16, 1978, years was completed on Feb. 2, 1984. All new institutions will have a two-year domestic deposits of Edge corporations were subject to the same reserve phase-in beginning with the date that they open for business, except for those requirements as deposits of member banks. institutions that have total reservable liabilities of $50 million or more. 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as 7. Transaction accounts include all deposits on which the account holder is Christmas and vacation club accounts were subject to the same requirements as permitted to make withdrawals by negotiable or transferable instruments, paysavings deposits. ment orders of withdrawal, and telephone and preauthorized transfers (in excess The average reserve requirement on savings and other time deposits before of three per month) for the purpose of making payments to third persons or others. implementation of the Monetary Control Act had to be at least 3 percent, the However, MMDAs and similar accounts offered by institutions not subject to the minimum specified by law. rules of the Depository Institutions Deregulation Committee (DIDC) that permit 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent no more than six preauthorized, automatic, or other transfers per month of which was imposed on large time deposits of $100,000 or more, obligations of affiliates, no more than three can be checks—are not transaction accounts (such accounts and ineligible acceptances. This supplementary requirement was eliminated with are savings deposits subject to time deposit reserve requirements.) the maintenance period beginning July 24, 1980. 8. The Monetary Control Act of 1980 requires that the amount of transaction Effective with the reserve maintenance period beginning Oct. 25, 1979, a accounts against which the 3 percent reserve requirement applies be modified marginal reserve requirement of 8 percent was added to managed liabilities in annually by 80 percent of the percentage increase in transaction accounts held by excess of a base amount. This marginal requirement was increased to 10 percent all depository institutions determined as of June 30 each year. Effective Dec. 31, beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and 1981, the amount was increased accordingly from $25 million to $26 million; was eliminated beginning July 24, 1980. Managed liabilities are defined as large effective Dec. 30, 1982, to $26.3 million; effective Dec. 29, 1983, to $28.9 million; time deposits, Eurodollar borrowings, repurchase agreements against U.S. effective Jan. 1, 1985, to $29.8 million; and effective Dec. 31, 1985, to $31.7 government and federal agency securities, federal funds borrowings from non- million. member institutions, and certain other obligations. In general, the base for the 9. In general, nonpersonal time deposits are time deposits, including savings marginal reserve requirement was originally the greater of (a) $100 million or (b) deposits, that are not transaction accounts and in which a beneficial interest is the average amount of the managed liabilities held by a member bank, Edge held by a depositor that is not a natural person. Also included are certain corporation, or family of U.S. branches and agencies of a foreign bank for the two transferable time deposits held by natural persons, and certain obligations issued reserve computation periods ending Sept. 26, 1979. For the computation period to depository institution offices located outside the United States. For details, see beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease section 204.2 of Regulation D. in an institution's U.S. office gross loans to foreigners and gross balances due from foreign offices of other institutions between the base period (Sept. 13-26, NOTE. Required reserves must be held in the form of deposits with Federal 1979) and the week ending Mar. 12, 1980, whichever was greater. For the Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a computation period beginning May 29, 1980, the base was increased by iVi Federal Reserve Bank indirectly on a pass-through basis with certain approved percent above the base used to calculate the marginal reserve in the statement institutions. week of May 14-21, 1980. In addition, beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and balances declined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • February 1986 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions' Percent per annum Savings and loan associations and Commercial banks mutual savings banks (thrift institutions)1 In effect Dec. 31, 1985 In effect Dec. 31, 1985 Type of deposit Percent Effective date Percent Effective date 1 Savings 5<A 1/1/84 5VI 7/1/79 2 Negotiable order of withdrawal accounts 5'/4 12/31/80 51/4 12/31/80 3 Negotiable order of withdrawal accounts of $1,000 or more2 1/5/83 1/5/83 4 Money market deposit account2 (3) 12/14/82 (3) 12/14/82 Time accounts 5 7-31 days of less than Sl.OOO4 5Vi 1/1/84 5 V2 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 balance maintenance requirements was by commercial banks and thrift institutions on various categories of deposits were lowered to $1,000. No minimum maturity period is required for this account, but removed. For information regarding previous interest rate ceilings on all catego- depository institutions must reserve the right to require seven days, notice before ries of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the withdrawals. When the average balance is less than $1,000, the account is subject Federal Home Loan Bank Board Journal, and the Annual Report of the Federal to the maximum ceiling rate of interest for NOW accounts; compliance with the Deposit Insurance Corporation. average balance requirement may be determined over a period of one month. 2. Effective Dec. 1, 1983, IRA/Keogh (HR10) Plan accounts are not subject to Depository institutions may not guarantee a rate of interest for this account for a minimum deposit requirements. Effective Jan. 1, 1985, the minimum denomina- period longer than one month or condition the payment of a rate on a requirement tion requirement was lowered from $2,500 to $1,000. that the funds remain on deposit for longer than one month. 3. Effective Dec. 14,1982, depository institutions are authorized to offer a new 4. Effective Jan. 1, 1985, the minimum denomination requirement was lowered account with a required initial balance of $2,500 and an average maintenance from $2,500 to $1,000. Deposits of less than $1,000 issued to governmental units balance of $2,500 not subject to interest rate restrictions. Effective Jan. 1, 1985, continue to be subject to an interest rate ceiling of 8 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1985 TTyyppee ooff ttrraannssaaccttiioonn 11998822 11998833 11998844 Apr. May June July Aug. Sept. Oct. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 17,067 18,888 20,036 6,026 274 2,099 0 33,,005566 11,,117711'''' 00 2 Gross sales 8,369 3,420 8,557 0 417 0 0 0 0 265 3 Exchange 0 0 0 0 0 0 0 0 35C 0 4 Redemptions 3,000 2,400 7,700 0 800 0 200 0 0 0 Others within 1 year 5 Gross purchases 312 484 1,126 245 0 0 0 00 0 00 6 Gross sales 0 0 0 0 0 0 0 0 (K 0 7 Maturity shift 17,295 18,887 16,354 1,129 2,443 1,312 1,238 4,895 1,028 529 8 Exchange -14,164 -16,553 -20,840 -1,463 -2,945 0 -1,778 -3,275 -1,806^ -1,942 9 Redemptions 0 87 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,797 1,8% 1,638 846 0 00 0 6 00 00 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -14,524 -15,533 -13,709 -1,114 -2,101 -1,312 -1,153 -3,760 -1,028 -520 13 Exchange 11,804 11,641 16,039 1,463 1,940 0 1,778 1,825 1,457 942 5 to 10 years 14 Gross purchases 388 890 536 108 0 00 00 6 00 00 15 Gross sales 0 0 300 0 0 0 0 0 0 0 16 Maturity shift -2,172 -2,450 -2,371 -16 42 0 -85 -1,136 0 -10 17 Exchange 2,128 2,950 2,750 0 600 0 0 800 0 0 Over 10 years 18 Gross purchases 307 383 441 0 0 0 0 00 0 00 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -601 -904 -275 0 -384 0 0 0 0 0 21 Exchange 234 1,962 2,052 0 405 0 0 650 0 0 All maturities 22 Gross purchases 19,870 22,540 23,476 7,321 274 2,099 0 33,,006688 1,17K 00 23 Gross sales 8,369 3,420 7,553 0 417 0 0 0 C 265 24 Redemptions 3,000 2,487 7,700 0 800 0 200 0 0 0 Matched transactions 25 Gross sales 543,804 578,591 808,986 65,845 78,870 81,016 60,980 64,263 73,925 100,929 26 Gross purchases 543,173 576,908 810,432 64,001 77,597 83,782 59,165 64,209 72,347 100,197 Repurchase agreements 27 Gross purchases 130,774 105,971 139,441 11,540 21,716 22,,880011 1100,,448866 11,,992288 1144,,002299 00 28 Gross sales 130,286 108,291 139,019 4,088 29,168 2,801 10,486 1,928 14,029 0 29 Net change in U.S. government securities 8,358 12,631 8,908 12,931 -9,668 4,865 -2,015 3,014 -408 -997 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 00 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 189 292 256 n.a. 8 60 46 30 0^ 0 Repurchase agreements 33 Gross purchases 18,957 8,833 1,205 983 11,,333366 112200 22,,443399 335544 33,,552222 00 34 Gross sales 18,638 9,213 817 452 1,867 120 2,439 354 3,522 0 35 Net change in federal agency obligations 130 -672 132 531 -540 -60 -46 -30 <y 0 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 13,462 -10,208 4,805 -2,061 2,984 -408 -997 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 • February 1986 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1985 Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 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 4,718 4,718 4,718 4,718 4,718 4,618 4,718 4,718 3 Coin 529 548 569 528 508 518 524 504 Loans 4 To depository institutions 1,092 2,446 758 4,682 924 2,520 886 1,602 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 71,431 81,556 81,461 73,388 77,383 79,231 78,234 78,347 10 Notes 66,072 66,422 66,422 65,807 66,107 66,072 66,072 66,292 11 Bonds 24,399 24,399 24,399 24,399 24,399 24,399 24,399 24,529 12 Total bought outright1 161.902 172,377 172,282 163,594 167,889 169,702 168,705 169,168 13 Held under repurchase agreements 0 0 0 0 0 0 0 0 14 Total U.S. government securities 161,902 172,377 172,282 163,594 167,889 169,702 168,705 169,168 15 Total loans and securities 171,221 183,050 181,267 176,503 177,040 180,449 177,818 178,997 16 Cash items in process of collection 6,117 7,390 14,027 8,124 8,702 4,297 5,843 5,915 17 Bank premises 594 593 597 599 600 594 595 600 Other assets 18 Denominated in foreign currencies2 6,392 6,573 6,627 6,637 6,644 4,963 6,530 6,834 19 All other3 7,734 7,936 8,073 6,544 6,569 8,073 7,606 7,389 20 Total assets 208,395 221,898 226,968 214,743 215,871 214,602 214,724 216,047 LIABILITIES 21 Federal Reserve notes 172,991 174,765 176,150 175,517 177,176 171,476 173,590 177,504 Deposits 22 To depository institutions 21,894 29,796 31,330 23,189 22,816 27,162 27,119 23,830 23 U.S. Treasury—General account 1,186 3,955 3,310 2,652 2,331 4,174 1,528 2,294 24 Foreign—Official accounts 221 210 229 236 250 535 268 340 25 Other 377 529 479 534 440 497 372 598 26 Total deposits 23,678 34,490 35,348 26,611 25,837 32,368 29,287 27,062 27 Deferred availability cash items 5,762 6,450 9,374 6,597 6,854 4,228 5,508 5,006 28 Other liabilities and accrued dividends4 2,131 2,247 2,240 2,168 2,141 2,272 2,335 2,306 29 Total liabilities 204,562 217,952 223,112 210,893 212,008 210,344 210,720 211,878 CAPITAL ACCOUNTS 30 Capital paid in 1,762 1,766 1,768 1,772 1,773 1,753 1,762 1,773 31 Surplus 1,626 1,626 1,626 1,626 1,626 1,626 1,626 1,626 32 Other capital accounts 445 554 462 452 464 879 616 770 33 Total liabilities and capital accounts 208,395 221,898 226,968 214,743 215,871 214,602 214,724 216,047 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 123,327 126,296 123,982 124,617 126,551 126,128 123,099 127,566 Federal Reserve note statement 35 Federal Reserve notes outstanding 206,879 207,182 207,864 208,523 208,797 205,459 206,884 208,830 36 LESS: Held by bank 33,888 32,417 31,714 33,006 31,621 33,983 33,294 31,326 37 Federal Reserve notes, net 172,991 174,765 176,150 175,517 177,176 171,476 173,590 177,504 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 4,718 4,718 4,718 4,718 4,718 4,618 4,718 4,718 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities .. 157,183 158,957 160,342 159,709 161,368 155,768 157,782 161,696 42 Total collateral 172,991 174,765 176,150 175,517 177,176 171,476 173,590 177,504 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 Type and maturity groupings 1985 Oct. 30 Nov. 13 Nov. 27 Sept. 30 1 Loans—Total 1,092 2,446 758 4,682 2,520 886 2 Within 15 days 1,046 2,379 717 4,648 2,452 829 3 16 days to 90 days 46 67 41 34 40 68 57 4 91 days to 1 year 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 0 0 0 6 Within 15 days 0 0 0 0 0 0 0 7 16 days to 90 days 0 0 0 0 0 0 0 8 91 days to 1 year 0 0 0 0 0 0 0 9 U.S. government securities—Total 161,902 172,377 172,282 163,594 167,889 169,702 168,705 10 Within 15 days' 5,848 6,828 3,693 6,206 8,332 5,823 1,133 11 16 days to 90 days 30,880 38,047 41,107 31,615 35,441 38,796 37,043 12 91 days to 1 year 53,990 55,556 55,536 55,631 53,674 53,899 58,933 13 Over 1 year to 5 years 34,865 35,627 35,627 34,455 34,755 34,855 35,277 14 Over 5 years to 10 years 14,856 14,856 14,856 14,256 14,256 14,866 14,856 15 Over 10 years 21,463 21,463 21,463 21,431 21,431 21,463 21,463 16 Federal agency obligations—Total. 8,227 8,227 8,227 8,227 8,227 8,227 8,227 17 Within 15 days' 84 0 66 175 273 162 84 18 16 days to 90 days 668 753 719 610 504 529 668 19 91 days to 1 year 1,757 1,756 1,848 1,848 1,820 1,762 1,757 20 Over 1 year to 5 years 4,141 4,141 4,016 4,016 4,070 4,109 4,141 21 Over 5 years to 10 years 1,178 1,178 1,179 1,179 1,161 1,266 1,178 22 Over 10 years 399 399 399 399 399 399 399 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • February 1986 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1985 1981 1982 1983 1984 IItteemm Dec. Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. Nov. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS'' 1 Total reserves2 32.10 34.28 36.14 39.08 40.71 41.32 42.18 42.61 43.19 43.51 43.65 44.37 2 Nonborrowed reserves 31.46 33.65 35.36 35.90 39.39 39.99 40.97 41.50 42.12 42.22 42.46 42.63 3 Nonborrowed reserves plus extended credit3 31.61 33.83 35.37 38.50 40.26 40.52 41.64 42.01 42.69 42.87 43.09 43.16 4 Required reserves 31.78 33.78 35.58 38.23 39.97 40.52 41.27 41.75 42.37 42.84 42.90' 43.44 5 Monetary base4 158.10 170.14 185.49 199.03 203.56 205.35 207.66 208.83 211.15 212.38' 213.46' 215.25 Not seasonally adjusted 6 Total reserves2 32.82 35.01 36.86 40.13 41.25 40.64 41.96 42.41 42.60 43.22 43.75 44.62 7 Nonborrowed reserves 32.18 34.37 36.09 36.94 39.93 39.31 40.75 41.30 41.52 41.93 42.56 42.88 8 Nonborrowed reserves plus extended credit3 32.33 34.56 36.09 39.55 40.80 39.84 41.42 41.81 42.09 42.59 43.19 43.41 9 Required reserves 32.50 34.51 36.30 39.28 40.52 39.84 41.05 41.55 41.77 42.56 42.99 43.69 10 Monetary base4 160.94 173.17 188.76 202.02 203.42 204.54 207.99 210.26 211.23 211.81' 212.97' 215.64 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.92 41.85 38.89 40.70 41.65 41.05 42.35 42.80 42.96 44.45 45.47 46.37 12 Nonborrowed reserves 41.29 41.22 38.12 37.51 40.33 39.72 41.15 41.70 41.89 43.16 44.28 44.63 13 Nonborrowed reserves plus extended credit3 41.44 41.41 38.12 40.09 40.77 40.45 41.88 42.23 42.50 43.83 44.90' 45.06 14 Required reserves 41.61 41.35 38.33 39.84 40.91 40.25 41.45 41.95 42.14 43.78 44.72' 45.45 15 Monetary base4 170.47 180.52 192.36 202.59 203.81 204.94 208.39 210.65 211.60 213.04' 214.69' 217.39 1. Figures incorporate adjustments for discontinuities associated with the of vault cash holdings of thrift institutions that is included in the currency implementation of the Monetary Control Act and other regulatory changes to component of the money stock plus, for institutions not having required reserve reserve requirements. To adjust for discontinuities due to changes in reserve balances, the excess of current vault cash over the amount applied to satisfy requirements on reservable nondeposit liabilities, the sum of such required current reserve requirements. After the introduction of contemporaneous reserve reserves is subtracted from the actual series. Similarly, in adjusting for discontin- requirements (CRR), currency and vault cash figures are measured over the uities in the monetary base, required clearing balances and adjustments to weekly computation period ending Monday. compensate for float also are subtracted from the actual series. Before CRR, all components of the monetary base other than excess reserves 2. Total reserves not adjusted for discontinuities consist of reserve balances are seasonally adjusted as a whole, rather than by component, and excess with Federal Reserve Banks, which exclude required clearing balances and reserves are added on a not seasonally adjusted basis. After CRR, the seasonally adjustments to compensate for float, plus vault cash used to satisfy reserve adjusted series consists of seasonally adjusted total reserves, which include requirements. Such vault cash consists of all vault cash held during the lagged excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted computation period by institutions having required reserve balances at Federal currency component of the money stock and the remaining items seasonally Reserve Banks plus the amount of vault cash equal to required reserves during the adjusted as a whole. maintenance period at institutions having no required reserve balances. 5. Reflects actual reserve requirements, including those on nondeposit liabil- 3. Extended credit consists of borrowing at the discount window under the ities, with no adjustments to eliminate the effects of discontinuities associated terms and conditions established for the extended credit program to help with implementation of the Monetary Control Act or other regulatory changes to depository institutions deal with sustained liquidity pressures. Because there is reserve requirements. not the same need to repay such borrowing promptly as there is with traditional NOTE. Latest monthly and biweekly figures are available from the Board's short-term adjustment credit, the money market impact of extended credit is H.3(502) statistical release. Historical data and estimates of the impact on similar to that of nonborrowed reserves. required reserves of changes in reserve requirements are available from the 4. The monetary base not adjusted for discontinuities consists of total reserves Banking Section, Division of Research and Statistics, Board of Governors of the plus required clearing balances and adjustments to compensate for float at Federal Federal Reserve System, Washington, D.C. 20551. Reserve Banks and the currency component of the money stock less the amount Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Billions of dollars, averages of daily figures 1985 1981 1982 1983 1984 DDeecc.. DDeecc.. DDeecc.. DDeecc.. AAuugg..'' SSeepptt..'' OOcctt..'' NNoovv.. Seasonally adjusted 1 Ml 441.8 480.8 528.0 558.5 605.9 611.9 611.1 617.8 2 M2 1,794.4 1,954.9 2,188.8 2,371.7 2,514.1 2,528.9 2,533.4 2,547.4 3 M3 2,235.8 2,446.8 2,701.8 2,995.0 3.142.5 3,169.0 3,179.3 3,192.7 4 L 2,596.4 2,854.7 3,168.8 3,541.3' 3,730.1 3,761.2 n.a. n.a. 5 Debt 4,255.8 4,649.8 5,177.2 5,927.1 6,420.2 6,479.3 6,541.9 n.a. Ml components 6 Currency2 124.0 134.3 148.4 158.7 167.1 167.9 168.8 169.9 7 Travelers checks3 4.4 4.3 4.9 5.2 5.9 5.9 5.9 5.9 8 Demand deposits4 235.2 238.6 243.5 248.6 264.1 266.8 264.0 266.3 9 Other checkable deposits5 78.2 103.5 131.3 146.0 168.9 171.3 172.4 175.7 Nontransactions components 10 In M26 1,352.6 1,474.0 1,660.8 1,813.3 1,908.1 1,917.0 1,922.3 1,929.6 11 In M3 only7 441.4 492.0 512.9 623.3 628.4 640.1 645.9 645.3 Savings deposits9 12 Commercial Banks 158.6 163.5 133.4 122.6 124.2 124.6 125.1 125.3 13 Thrift institutions 185.8 194.4 173.6 166.0 176.1 177.1 179.3 180.4 Small denomination time deposits9 14 Commerical Banks 347.8 379.8 350.7 387.0 384.1 382.8 381.8 381.7 15 Thrift institutions 475.8 471.7 433.8 498.6 494.3 491.6 489.9 489.9 Money market mutual funds 16 General purpose and broker/dealer 150.6 185.2 138.2 167.5 176.8 176.7 176.9 176.4 17 Institution-only 38.0 51.1 43.2 62.7 63.6 62.3 63.3 64.5 Large denomination time deposits10 18 Commercial Banks11 247.5 262.0 228.9 264.4 267.6 272.9 277.2 280.0 19 Thrift institutions 54.6 66.2 101.9 151.8 153.7 155.7 156.1 157.6 Debt components 20 Federal debt 825.9 979.2 1,173.0 1,367.4' 1,496.1 1,505.6 1,516.6 n.a. 21 Non-federal debt 3,429.9 3,670.6 4,004.3 4,559.7' 4,924.1 4,973.7 5,025.3 n.a. Not seasonally adjusted 22 Ml 452.2 491.8 539.7 570.4 601.5 608.6 611.0 620.0 23 M2 1,798.7 1,959.6 2,194.0 2,376.7 2,507.4 2,517.6 2,530.1 2,545.3 24 M3 2,243.4 2,454.4 2,709.2 3,002.2' 3,137.4 3,157.2 3,173.8 3,193.3 25 L 2,604.7 2,859.5 3,172.7 3,542.9' 3,722.2 3,749.2 n.a. n.a. 26 Debt 4,251.1 4,644.2 5,171.6 5,921.2' 6,400.8 6,463.9 6,528.5 n.a. Ml components 27 Currency2 126.2 136.5 150.5 160.9 167.7 167.6 168.5 170.7 28 Travelers checks3 4.1 4.0 4.6 4.9 6.5 6.2 5.9 5.6 29 Demand deposits4 243.4 247.2 252.2 257.4 260.9 265.5 265.4 268.4 30 Other checkable deposits5 78.5 104.1 132.4 147.2 166.4 169.3 171.2 175.3 Nontransactions components 31 M2* 1,346.5 1,467.8 1,654.2 1,806.3 1,905.8 1,909.0 1,919.1 1,925.3 32 M3 only7 444.7 494.8 515.2 625.4 630.0 639.7 643.7 648.0 Money market deposit accounts 33 Commercial banks n.a. 26.3 230.5 267.1 317.7 321.2 324.3 329.2 34 Thrift institutions .0 16.9 148.7 147.9 174.3 175.5 176.8 177.3 Savings deposits8 35 Commercial Banks 157.5 162.1 132.2 121.4 124.0 123.7 124.5 124.3 36 Thrift institutions 184.7 193.2 172.5 164.9 175.5 176.0 179.0 179.6 Small denomination time deposits9 37 Commercial Banks 347.7 380.1 351.1 387.6 385.4 385.2 384.9 384.3 38 Thrift institutions 475.5 471.7 434.2 499.4 494.0 492.3 493.6 493.4 Money market mutual funds 39 General purpose and broker/dealer 150.6 185.2 138.2 167.5 176.8 176.7 176.9 176.4 40 Institution-only 38.0 51.1 43.2 62.7 63.6 62.3 63.3 64.5 Large denomination time deposits10 41 Commercial Banks11 251.7 265.2 230.8 265.9 269.4 274.5 278.2 279.9 42 Thrift institutions 54.4 65.9 101.4 151.1 155.1 156.3 157.4 158.2 Debt components 43 Federal debt 823.0 976.4 1,170.2 1,364.7 1,495.8 1,506.9 1,515.5 n.a. 44 Non-federal debt 3,428.2 3,667.7 4,001.4 4,556.4' 4,905.0 4,957.0 5,013.0 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 DomesticN onfinancial Statistics • February 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), arid 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 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr May June July Aug. Sept. Oct. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 90,914.4 109,642.3 128,440.8 149,252.8 146,714.9 157,128.3 147,455.5 159,593.3 162,205.4 2 Major New York City banks 37,932.9 47,769.4 57,392.7 66,394.3 66,615.5 69,952.8 65,645.6 72,765.4 76,706.3 3 Other banks 52,981.5 61,873.1 71,048.1 82,858.4 80,099.4 87,175.5 81,809.9 86,827.9 85,499.2 4 ATS-NOW accounts3 1,036.2 1,405.5 1,588.7 1,771.1 1,614.3 1,870.1 2,008.8 2,465.3 2,212.7 5 Savings deposits4 720.3 741.4 633.1 636.4 544.4 584.3 550.7 509.1 562.0 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 324.2 379.7 434.4 484.6 471.4 506.4 469.6 510.9 513.2 7 Major New York City banks 1,287.6 1,528.0 1,843.0 2,079.6 2,104.9 2,131.4 1,965.4 2,326.3 2,422.2 8 Other banks 211.1 240.9 268.6 300.2 286.5 314.2 291.5 308.9 300.6 9 ATS-NOW accounts3 14.5 15.6 15.8 16.1 14.4 16.4 17.1 20.6 18.4 10 Savings deposits4 4.5 5.4 5.0 5.4 4.6 4.9 4.6 4.2 4.6 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 91,031.8 109,517.6 128,059.1 151,342.3 148,651.5 157,898.2 152,985.1 148,788.8 167,639.3 12 Major New York City banks 38,001.0 47,707.4 57,282.4 67,249.3 67,999.4 70,496.1 68,401.8 68,967.9 78,010.5 13 Other banks 53,030.9 64,310.2 70,776.9 84,093.0 80,652.1 87,402.1 84,583.3 79,820.9 89,628.8 14 ATS-NOW accounts3 11,,002277..11 1,397.0 11,,557799..55 1,775.5 1,744.0 1,807.5 1,770.5 2,289.9 2,157.7 15 MMDA5 567.4 884488..88 1,146.7 1,077.9 1,183.3 1.201.2 1,192.2 1,293.0 16 Savings deposits4 720.0 742.0 632.9 621.1 549.7 586.0 538.4 490.1 579.9 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 325.0 379.9 433.5 505.5 480.6 509.5 499.3 475.0 532.1 18 Major New York City banks 1,295.7 1,510.0 1,838.6 2,205.8 2,125.9 2,185.9 2,189.4 2,216.6 2,507.4 19 Other banks 211.5 240.5 267.9 312.7 290.8 314.8 307.4 282.9 315.7 20 ATS-NOW accounts3 14.4 15.5 15.7 16.2 15.5 15.9 15.3 19.4 18.1 71 MMDA5 2.8 3.5 3.9 3.5 3.5 3.8 3.7r 4.0 22 Savings deposits4 4.5 5.4 5.0 5.2 4.6 4.8 4.5 4.1 4.8 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 • February 1986 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1984 1985 Dec/ Jan/ Feb/ Mar/ Apr/ May' June' July' Aug.' Sept/ Oct. Nov. Seasonally adjusted 1 Total loans and securities2 1,716.8 1,726.3 1,744.8 1,761.6 1,768.8 1,788.5 1,802.7 1,819.0 1,828.8 1,841.3 1,844.4 1,869.6 2 U.S. government securities 260.3 260.3 266.0 267.1 261.4 266.3 267.1 271.6 271.4 273.1 270.0 275.0 i Other securities 140.0 142.6 141.1 138.9 140.2 142.2 144.5 145.4 148.2 151.3 154.8 160.7 4 Total loans and leases2 1,316.5 1,323.4 1,337.7 1,355.6 1,367.1 1,380.0 1,391.0 1,402.1 1,409.2 1,416.9 1,419.7 1,433.9 5 Commercial and industrial 469.0 469.2 474.1 481.2 481.9 484.3 484.3 484.1 485.7 487.2 487.0 490.6 6 Bankers acceptances held3.. 5.4 5.1 6.2 6.4 5.4 4.9 4.7 5.1 5.0 4.7 4.7 4.9 7 Other commercial and industrial 463.6 464.1 468.0 474.9 476.5 479.3 479.6 479.0 480.7 482.5 482.3 485.7 8 U.S. addressees4 453.6 454.0 457.4 464.2 465.8 469.2 470.1 469.6 471.1 473.3 473.7 477.3 9 Non-U.S. addressees4 10.0 10.2 10.6 10.7 10.7 10.1 9.5 9.4 9.6 9.2 8.6 8.4 10 Real estate 376.2 378.6 382.8 386.7 390.8 394.8 398.7 403.7 407.1 409.9 414.5 419.2 11 Individual 251.5 255.3 258.5 262.9 266.5 269.9 272.7 276.3 278.5 280.3 281.3 283.8 12 Security 31.4 31.9 31.6 32.8 35.1 37.5 40.0 40.3 36.7 38.1 37.9 37.5 13 Nonbank financial institutions 31.6 31.4 30.9 30.6 31.1 31.5 31.2 31.6 32.3 32.5 32.4 33.2 14 Agricultural 40.3 39.9 39.6 39.5 39.4 39.4 39.4 39.6 39.6 40.1 40.3 40.5 15 State and political subdivisions 44.3 47.0 46.7 47.0 47.2 47.5 47.5 47.8 48.8 48.8 49.3 50.0 16 Foreign banks 11.5 11.5 11.5 11.2 10.9 10.6 10.3 10.4 10.2 9.9 9.6 9.6 17 Foreign official institutions ... 7.4 7.0 7.1 7.0 7.0 7.0 6.8 6.7 6.5 6.7 6.9 7.0 18 Lease financing receivables... 15.5 15.6 15.8 16.1 16.4 16.7 17.0 17.3 17.5 17.6 17.7 17.9 19 All other loans 37.5 36.0 39.0 40.6 40.8 40.8 43.1 44.2 46.4 45.8 42.8 44.8 Not seasonally adjusted 20 Total loans and securities2 1,727.8 1,734.3 1,742.9 1,757.7 1,769.0 1,784.6 1,803.6 1,812.5 1,822.1 1,839.8 1,846.1 1,870.8 21 U.S. government securities 257.0 260.2 266.9 269.2 266.9 268.4 270.8 271.4 269.8 270.7 266.9 270.6 2 li 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 1,3 1 2 4 9 1 . . 2 6 1,3 1 3 4 0 3 . . 6 4 1,3 1 3 4 4 1 . . 6 3 1,3 1 4 3 9 9 . . 4 1 1,3 1 6 3 2 9 . . 3 9 1,3 1 7 4 3 2 . . 4 8 1,3 1 8 4 8 4 . . 6 2 1,3 1 9 4 7 4 . . 2 0 1,4 1 0 4 4 7 . . 6 7 1,4 1 1 5 8 0 . . 4 7 1,4 1 2 5 4 4 . . 9 2 1,4 1 3 6 9 0 . . 4 8 24 Commercial and industrial.... 472.1 471.1 473.7 480.8 482.1 482.8 482.8 483.2 483.5 487.2 488.0 491.0 25 Bankers acceptances held3.. 5.8 5.2 6.1 6.3 5.5 4.9 4.8 55..00 44..99 44..66 44..66 44..88 2b Other commercial and industrial 466.3 465.9 467.6 474.5 476.6 477.9 477.9 478.2 478.6 482.6 483.4 486.2 2277 U.S. addressees4 455.3 455.6 457.5 464.3 466.7 468.3 468.6 468.7 469.0 473.1 474.3 477.1 2288 Non-U.S. addressees4.... 11.0 10.3 10.1 10.2 9.9 9.6 9.3 9.5 9.6 9.4 9.1 9.1 2299 Real estate 376.8 379.3 382.4 385.6 389.5 393.8 398.1 403.1 407.3 411.2 415.9 420.3 30 Individual 254.6 257.8 258.2 260.7 264.3 267.7 270.7 274.5 278.3 281.5 283.4 285.8 31 Security 35.2 33.0 30.8 32.2 35.0 36.0 39.9 38.3 3355..88 3366..77 3377..77 3399..55 32 Nonbank financial institutions 31.7 31.5 30.7 30.6 31.3 31.3 31.2 31.7 32.4 32.6 32.4 33.1 3333 Agricultural 40.0 39.3 38.8 38.6 38.8 39.3 39.9 40.4 4400..55 4400..99 4400..99 4400..66 34 State and political subdivisions 44.3 47.0 46.7 47.0 47.2 47.5 47.5 47.8 48.8 48.8 49.3 50.0 3355 Foreign banks 12.2 11.7 11.5 11.0 10.5 10.3 10.0 10.3 9.9 10.1 9.9 9.8 36 Foreign official institutions ... 7.4 7.0 7.1 7.0 7.0 7.0 6.8 6.7 6.5 6.7 6.9 7.0 3/ Lease financing receivables... 15.5 15.8 16.0 16.3 16.4 16.7 16.9 17.2 17.4 17.5 17.6 17.7 38 All other loans 39.5 37.2 38.8 39.8 40.2 41.0 44.7 44.1 44.2 45.3 43.0 44.6 1. Data are prorated averages of Wednesday estimates for domestically char- 2. Excludes loans to commercial banks in the United States. tered insured banks, based on weekly sample reports and quarterly universe 3. Includes nonfinancial commercial paper held. reports. For foreign-related institutions, data are averages of month-end estimates 4. United States includes the 50 states and the District of Columbia. based on weekly reports from large U.S. agencies and branches and quarterly NOTE. These data also appear in the Board's G.7 (407) release. For address, see reports from all U.S. agencies and branches, New York investment companies inside front cover. majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1984 1985 SSoouurrccee Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Total nondeposit funds 1 Seasonally adjusted2 108.5 102.5 113.9 116.9 105.2 112.0 112.6 108.5' 112.9 116.1 118.8 120.7 2 Not seasonally adjusted 111.1 104.8 117.4 119.4 108.4 117.2 114.9 107.4 114.8 116.2' 120.4 126.7 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 140.5 138.8 146.8 147.2 138.8 142.0 146.7 146.9 144.1 146.3 145.4 149.0 4 Not seasonally adjusted 143.1 141.1 150.2 149.7 141.9 147.2 149.0 145.8 146.0 146.4 147.0 155.0 5 Net balances due to foreign-related institutions, not seasonally adjusted -32.0 -36.3 -32.8 -30.3 -33.5 -30.0 -34.1 -38.4 -31.2 -30.2 -26.6 -28.3 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -31.4 -34.8 -31.6 -29.5 -32.4 -29.6' -32.5 -38.3 -32.8 -30.7 -28.7 -30.3 7 Gross due from balances 69.0 71.4 70.5 71.4 74.8' 74.5' 76.4' 79.1' 75.8' 74^ 74.1' 74.0 8 Gross due to balances 37.6 36.6 38.9 41.9 42.4' 44^ 44.(K 40.8' 43.(K 44.C 45.4' 43.8 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 -.6 -1.5 -1.2 -.8 -1.1 -.5 -1.7' -.1' 1.6 .5 22..11 22..00 10 Gross due from balances 52.0 53.1 54.1 53.4 51.8 52.4 53.8 54.9 55.3 56.1 55.5 56.0 11 Gross due to balances 51.4 51.6 52.8 52.7 50.7 52.0 52.1 54.9 56.8' 56.6 57.6 58.0 Security RP borrowings 12 Seasonally adjusted® 81.1 82.3 90.1 92.0 85.4 85.5 86.5 87.1 87.4 90.8 88.4 87.9 13 Not seasonally adjusted 81.1 82.2 91.1 92.0 86.0 88.3 86.3 83.4 86.8 88.4 87.5 91.3 U.S. Treasury demand balances7 14 Seasonally adjusted 16.1 14.7 13.0 11.8 14.6 22.6 17.4 24.9 16.7 15.3 3.8 13.2 15 Not seasonally adjusted 12.5 18.5 15.8 12.8 15.4 20.9 14.9 23.1 13.4 16.8 5.4 7.7 Time deposits, $100,000 or more8 16 Seasonally adjusted 325.8 324.8 325.4 329.9 332.6 331.2 326.8 323.2 325.1 330.3 334.4 336.6 17 Not seasonally adjusted 327.3 325.6 324.9 330.3 330.1 329.1 326.4 322.4' 326.9 331.9 335.4 336.5 1. Commercial banks are those in the 50 states and the District of Columbia banks, term federal funds, overdrawn due from bank balances, loan RPs, and with national or state charters plus agencies and branches of foreign banks, New participations in pooled loans. York investment companies majority owned by foreign banks, and Edge Act 4. Averages of daily figures for member and nonmember banks. corporations owned by domestically chartered and foreign banks. 5. Averages of daily data. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 6. Based on daily average data reported by 122 large banks. nonbanks and not seasonally adjusted net Eurodollars. Includes averages of 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at Wednesday data for domestically chartered banks and averages of current and commercial banks. Averages of daily data. previous month-end data for foreign-related institutions. 8. Averages of Wednesday figures. 3. Other borrowings are borrowings on any instrument, such as a promissory NOTE. These data also appear in the Board's G. 10 (411) release. For address see note or due bill, given for the purpose of borrowing money for the banking inside front cover. business. This includes borrowings from Federal Reserve Banks and from foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • February 1986 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1985 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. ALL COMMERCIAL BANKING INSTITUTIONS1 1 Loans and securities 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 2,029.8 2 Investment securities 381.2 382.2 383.7 383.9 390.3 392.1 392.3 393.7 397.0 396.3 404.4 3 U.S. government securities 245.1 248.1 251.1 250.4 254.4 255.3 256.1 254.2 254.4 249.3 251.6 4 Other 136.1 134.1 132.5 133.5 135.9 136.8 136.2 139.6 142.6 147.0 152.7 5 Trading account assets 24.2 27.6 23.7 23.5 23.5 23.1 22.3 24.2 26.4 25.0 32.0 6 Total loans 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 1,593.5 7 Interbank loans 125.4 128.8 126.0 130.9 124.0 123.1 133.0 128.6 129.1 131.7 149.4 8 Loans excluding interbank 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 1,444.1 9 Commercial and industrial 470.2 477.0 483.2 482.1 483.4 484.3 485.9 484.6 489.2 488.8 492.8 10 Real estate 380.9 383.3 386.9 390.7 395.8 400.0 405.6 409.3 412.8 418.3 421.8 11 Individual 258.2 259.0 261.4 265.2 268.5 272.1 276.1 280.0 282.1 285.1 286.7 12 All other 216.1 218.0 218.5 222.9 223.0 232.6 233.4 231.5 233.4 233.9 242.9 13 Total cash assets 188.0 189.4 183.6 187.6 202.3 190.4 198.0 188.4 188.2 190.1 207.7 14 Reserves with Federal Reserve Banks 20.9 19.6 19.8 22.9 20.7 21.6 21.0 24.5 24.9 19.6 20.1 15 Cash in vault 21.9 21.8 21.3 21.3 23.3 22.2 22.0 22.7 22.1 22.6 21.4 16 Cash items in process of collection ... 66.9 68.8 63.9 64.2 76.5 68.4 70.5 62.5 61.4 67.9 81.7 17 Demand balances at U.S. depository institutions 30.9 32.3 31.7 30.2 35.2 31.3 33.5 30.6 30.8 31.6 35.5 18 Other cash assets 47.4 46.8 46.9 49.0 46.6 46.8 51.0 48.2 49.1 48.4 49.0 19 Other assets 191.8 195.4 188.5 188.6 183.4 189.4 194.5 180.8 185.8 178.1 181.8 20 Total assets/total liabilities and capital ... 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 2,419.3 21 Deposits 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.C 1,705.6 1,743.4 22 Transaction deposits 457.1 459.5 457.9 465.6 480.3 474.0 492.3 475.4 474.9 491.4 521.6 23 Savings deposits 400.4 407.2 410.4 410.1 418.7 425.6 434.3 436.4' 438.3 443.8 448.4 24 Time deposits 748.4 752.7 759.2 762.9 762.5 760.1 758.4 765.0 769.8 770.4 773.4 25 Borrowings 307.0 309.4 301.3 310.3 305.4 315.8 321.6 308.9 323.2 309.0 345.9 26 Other liabilities 173.8 182.2 177.0 175.6 176.0 179.7 181.1 182.0 183.6 177.9 174.9 27 Residual (assets less liabilities) 149.1 149.6 149.7 150.9 151.3 151.8 153.4 153.4 154.1 154.8 155.2 MEMO 28 U.S. government securities (including trading account) 262.1 269.6 268.6 266.7 269.3 271.0 270.0 268.3 271.5 265.1 271.5 29 Other securities (including trading account) 143.3 140.2 138.8 140.7 144.4 144.3 144.6 149.7 151.9 156.2 164.8 DOMESTICALLY CHARTERED COMMERCIAL BANKS2 30 Loans and securities 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 1,917.6 31 Investment securities 373.9 374.9 376.9 377.1 383.8 385.1 385.1 386.5 389.1 388.1 396.6 32 U.S. government securities 240.3 243.4 246.9 246.4 250.7 251.4 252.4 250.4 250.5 245.0 248.0 33 Other 133.5 131.5 130.1 130.7 133.1 133.8 132.7 136.0 138.6 143.1 148.7 34 Trading account assets 24.2 27.6 23.7 23.5 23.5 23.1 22.3 24.2 26.4 25.0 32.0 35 Total loans 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 1,489.0 36 Interbank loans 100.7 101.1 100.1 103.3 100.6 100.6 110.0 104.7 103.8 106.8 121.0 37 Loans excluding interbank 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 1,368.0 38 Commercial and industrial 426.1 431.9 436.0 436.5 436.6 436.0 437.6 435.7 437.9 437.4 440.0 39 Real estate 375.8 378.0 381.8 385.4 390.4 394.4 399.9 403.7 407.0 412.7 416.3 40 Individual 258.0 258.7 261.2 265.0 268.3 271.8 275.9 279.8 281.8 284.8 286.5 41 All other 203.2 204.8 205.0 208.7 209.6 218.1 217.2 216.3 217.5 217.5 225.2 42 Total cash assets 175.9 178.0 172.7 176.0 191.2 179.2 185.3 176.4 176.1 178.0 195.6 43 Reserves with Federal Reserve Banks 20.2 18.7 19.2 22.3 19.6 20.9 20.4 23.8 24.4 18.6 19.5 44 Cash in vault 21.9 21.8 21.3 21.3 23.2 22.2 22.0 22.6 22.0 22.6 21.4 45 Cash items in process of collection ... 66.7 68.5 63.7 63.9 76.2 68.2 70.3 62.2 61.1 67.7 81.5 46 Demand balances at U.S. depository institutions 29.5 31.0 30.4 28.8 33.8 29.8 32.2 29.0 29.4 30.2 33.8 47 Other cash assets 37.6 38.0 38.1 39.6 38.3 38.1 40.4 38.8 39.2 38.9 39.3 48 Other assets 137.7 139.0 137.2 137.5 131.5 137.7 144.9 132.6 133.3 132.0 137.1 49 Total assets/total liabilities and capital ... 2,075.4 2,094.2 2,0*4.7 2,113.1 2,135.4 2,146.2 2,178.1 2,159.8 2,173.0 2,182.3 2,250.3 50 Deposits 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 1,697.4 51 Transaction deposits 450.8 453.1 451.7 459.3 473.8 467.7 486.0 468.9 468.3 484.9 515.1 52 Savings deposits 399.3 406.1 409.2 408.9 417.5 424.3 432.9' 435.1 436.9' 442.4 446.9 53 Time deposits 713.2 716.2 721.6 725.6 727.1 725.2 723.3 727.9 731.4 732.2 735.5 54 Borrowings 247.1 247.6 240.6 248.5 246.1 253.8 258.4 249.6 259.0 248.0 280.2 55 Other liabilities 118.5 124.3 124.8 122.6 122.4 126.1 126.8 127.4 125.9 122.7 120.1 56 Residual (assets less liabilities) 146.5 146.9 147.0 148.3 148.6 149.1 150.7 150.8' 151.5 152.2' 152.5 1. Commercial banking institutions include insured domestically chartered NOTE. Figures are partly estimated. They include all bank-premises subsidiarcommercial banks, branches and agencies of foreign banks, Edge Act and ies and other significant majority-owned domestic subsidiaries. Loan and securi- Agreement corporations, and New York State foreign investment corporations. ties data for domestically chartered commercial banks are estimates for the last 2. Insured domestically chartered commercial banks include all member banks Wednesday of the month based on a sample of weekly reporting banks and and insured nonmember banks. quarter-end condition report data. Data for other banking institutions are estimates made for the last Wednesday of the month based on a weekly reporting sample of foreign-related institutions and quarter-end condition reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A19 1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on December 31, 1982, Assets and Liabilities Millions of dollars, Wednesday figures Oct. 2 Oct. 9 Oct. 16 Oct. 30 Nov. 6 Nov. 13 Nov. 20 1 Cash and balances due from depository institutions 100,834' 89,082' 108,742 93,038' 89,335' 95,981 109,379 92,150 2 Total loans, leases and securities, net 869,525'' 872,118' 864,442 858,864 863,196 881,249 873,648 891,824 1 1 1 1 1 1 1 4 6 9 3 5 7 8 0 3 4 5 1 2 6 U O O . t t T I T S h I h n n r . e r e v a O O a v O O r S r T d e d e t v n v t s i s t r i a s O O h n e r e e e n t e t t a m e g r c r m n v a g e d y r u s e s e o e f i a e e u a r r i b n n n a c n v a i y c r g o t t e n o r c t e y e c i n e d o n a o a o a a t y s d e a u r h c u r c c p e n s n c r n c c o y , a o l d o t o t o o e r r e l u c u s s i u u a g l t o g s n n n e i r o h r c t t t s v p , a s f a e l o b i s r r v y s n s a e u e m t m e b t y s e d a e s n i t a t v t u o r i r s c s a i i k g t o y s e n , n s c a , y n b d y s m ec a u tu ri r t i i t e y s 6 8 5 3 4 4 3 1 1 1 9 6 4 3 5 6 8 2 5 5 3 5 4 9 , , , , , , , , , , , , , , 4 6 6 8 1 0 2 8 9 2 4 1 5 3 3 8 9 0 3 3 5 1 2 1 2 8 1 8 4 8 2 2 8 7 7 2 2 1 6 6 8 1 ' ' 6 5 4 4 3 8 3 1 1 1 4 7 2 6 6 6 2 8 5 5 3 8 8 4 , , , , , , , , , , , , , , 5 8 7 2 7 2 4 1 8 1 1 5 5 0 6 0 2 4 6 3 1 7 9 9 3 9 8 4 9 0 8 1 8 4 8 9 7 4 1 7 6 8 6 8 5 4 4 3 3 1 1 1 7 4 6 5 2 8 3 5 6 5 3 7 8 4 , , , , , , , , , , , , , , 7 0 7 6 9 3 2 0 3 2 3 5 4 0 1 2 4 6 1 7 1 5 2 2 8 6 3 0 1 7 6 9 8 5 6 1 5 6 0 0 4 2 6 8 5 3 4 4 3 1 1 1 7 4 6 3 4 4 6 3 8 5 3 7 8 4 , , , , , , , , , , , , , , 1 7 7 4 1 7 6 0 2 4 6 9 0 2 1 4 2 5 5 7 4 6 6 1 7 0 9 4 5 4 3 6 9 4 4 3 0 6 9 2 2 8 6 5 8 3 4 4 3 1 1 1 7 4 6 2 4 7 4 3 9 5 4 5 8 4 , , , , , , , , , , , , , , 0 9 8 8 2 1 5 7 9 3 2 3 2 2 3 8 8 6 0 1 1 5 1 6 8 0 3 9 0 2 1 3 5 2 6 1 7 9 6 6 5 6 6 5 4 8 3 4 3 1 1 1 6 4 8 5 8 4 7 9 5 5 3 9 9 4 , , , , . , , , , , , , , , 7 7 2 4 6 4 2 4 0 4 9 9 9 3 2 2 3 5 9 9 6 8 5 7 0 % % % 5 8 9 5 1 0 8 6 9 6 9 6 5 8 3 4 4 3 1 1 1 9 5 6 7 4 4 5 4 7 9 5 8 9 4 , , , , , , , , , , , , , , 1 2 8 5 9 3 3 6 7 3 7 7 6 1 2 4 4 7 9 2 7 3 9 3 3 6 2 2 2 5 5 8 9 4 5 5 8 6 3 0 2 5 9 2 6 5 2 4 3 5 3 1 9 0 1 5 6 5 0 5 5 8 4 0 4 3 , , , , , , , , , , , , , , 0 0 4 3 6 6 4 5 2 5 6 6 4 8 6 7 0 3 9 0 3 8 4 2 8 3 4 4 3 0 9 9 3 7 6 7 1 4 3 0 0 6 17 Federal funds sold1 57,161 62,353 55,948 53,941 55,082 62,913 57,185 64,826 18 To commercial banks 36,930 41,275 35,868 35,139 35,674 42,615 36,389 42,558 19 To nonbank brokers and dealers in securities 13,433 14,485 14,177 13,102 13,126 13,271 13,712 13,064 20 To others 6,798 6,592 5,903 5,700 6,282 7,027 7,084 9,205 21 Other loans and leases, gross2 688,472' 685,380' 685,198 681,751 685,017 688,600 687,601 695,024 2 2 2 2 2 2 2 3 4 5 6 7 Ot C he o A B r m a l l U l N m o n a o k . o e S n t e r n h . s c r - , e s i U a a r g d l a . r S d c a o c . r n s e e d s a s p 2 d s t i d e a n e r n d e s c u s e s s s t e r e i a a s n l2 d commercial paper 6 2 2 2 7 5 4 5 2 4 4 4 6 1 , , , , , , 4 9 1 3 8 8 3 4 9 1 8 8 9 3 9 9 1 0 ' ' ' ' ' ' 6 2 2 2 7 5 4 5 4 2 5 1 2 0 , , , , , , 2 7 9 0 9 6 3 4 2 3 0 5 1 8 9 7 7 9 ' ' ' ' 6 2 2 2 7 5 4 4 4 0 2 2 4 9 , , , , , , 8 4 8 0 6 5 5 2 9 2 9 9 3 5 4 9 9 8 ' ' ' ' 6 2 2 2 6 5 4 5 7 2 4 2 5 0 , , , , , , 3 2 8 4 3 2 9 3 7 6 5 2 4 8 6 6 2 8 ' ' ' ' 6 2 2 2 7 5 4 5 0 2 4 2 5 0 , , , , , , 5 2 5 6 8 3 7 2 2 1 4 2 4 2 9 6 5 3 6 2 2 2 7 5 4 5 4 2 4 4 7 2 , , , , , , 1 9 5 5 8 4 3 8 4 7 7 1 8 8 5 1 2 7 6 2 2 2 7 5 5 4 2 3 3 4 1 6 , , , , , , 3 1 5 8 1 3 4 5 2 8 7 0 5 6 6 1 2 9 6 2 2 2 5 8 4 5 2 4 0 4 7 2 , , , , , , 2 5 2 8 1 0 7 1 4 8 5 % 6 7 1 6 0 28 Real estate loans2 174,966' 175,353' 175,956' 176,203' 176,658 176,968 177,622 177,809 29 To individuals for personal expenditures 127,376' 127,503' 127,616' 127,928' 128,513 128,602 128,780 129,174 30 To depository and financial institutions 41,597' 40,927' 41,412' 39,604' 39,740 40,702 40,945 41,105 31 Commercial banks in the United States 10,569 11,188' 10,842 10,528 10,494 10,008 10,571 10,744 32 Banks in foreign countries 6,097' 5,197' 5,863' 5,031' 4,974 5,606 5,230 4,968 33 Nonbank depository and other financial institutions . 24,931' 24,543' 24,707' 24,045' 24,272 25,088 25,143 25,393 34 For purchasing and carrying securities 17,566 18,64V 17,492' 15,369 17,052 16,814 15,822 21,418 4 4 4 3 3 3 3 4 3 3 1 2 5 7 8 9 0 6 A L O LE e l t l h a S o e s S A T T T e r t : h o o o l l L U l f e o i r o f s f n o a n o i t a a n t n e a a r n h n s a a s e t c e e n s r i a a i r g s n e c n n n n e t e g a s d d d n g a r l d l o g i e e e n v r c a a p i c e e s s c o o r e i e u l n v m s i l r t m a t , e i e u b c n e s r l a a e e n e l l r t s t 2 s v s p u e r a 2 b o n d d d i u v o c is f ti f i o i o c n n i a s l institutions 6 1 3 7 1 1 1 3 7 3 5 1 0 4 3 6 0 , , , , , , , , 3 0 1 1 0 2 3 7 , 8 8 9 2 0 8 6 2 2 2 3 7 ^ 9 8 9 7 4 ' ' ' ' ' 6 1 3 6 1 1 2 1 7 1 3 5 6 4 4 7 3 , , , , , , , , , 1 0 1 2 7 3 0 2 2 3 9 1 6 0 4 6 0 1 ( 2 2 7 4 0 8 K c P 6 1 6 3 1 2 1 1 7 6 1 3 5 4 8 3 4 , , , , , , , , , 0 9 1 4 1 3 5 1 7 8 3 3 0 4 4 3 2 2 5 4 8 3 0 5 6 5 9 ' ' 6 1 6 3 2 1 1 1 7 3 5 3 1 5 4 4 3 , , , , , , , , , 0 1 2 2 4 2 3 1 2 4 3 7 8 5 3 2 7 6 8 2 5 7 7 9 5 7 4 ' ' ' 6 1 3 6 2 1 1 1 7 1 3 5 6 4 4 4 3 , , , , , , , , , 0 2 1 3 7 4 3 5 1 0 3 3 2 2 0 1 1 5 2 1 7 8 6 1 5 9 3 6 1 7 3 1 2 1 1 6 0 1 3 5 4 7 4 3 , , , , , , , , , 9 0 1 3 5 4 8 2 4 2 1 8 5 6 5 7 3 0 2 2 0 1 2 3 8 8 8 6 1 6 3 2 1 1 1 6 8 3 5 1 5 4 3 4 , , , , , , , , , 8 0 9 4 8 4 4 5 6 6 2 9 7 7 5 4 2 8 2 2 8 9 0 0 5 4 0 6 1 7 3 1 2 1 1 6 3 5 6 1 4 6 5 3 , , , , , , , , , 8 3 0 4 5 5 9 0 4 1 0 9 5 7 0 1 3 7 7 7 0 5 5 7 3 5 8 44 Total assets L.IOI.N* 1,087,905' 1,101,724 1,077,174' 1,076,846 1,105,108 1,108,848 1,110,886 45 Demand deposits 209,726' 189,321' 214,748 189,003' 195,740 198,717 208,576 201,285 5 5 5 5 5 6 6 4 4 4 5 5 5 5 5 6 6 6 4 1 2 5 6 9 0 1 7 8 9 0 3 4 7 8 2 3 4 6 T L N r i o a I D F T C B B U D a S O F A U I S n n n b n o o t t r e o a l e e t . . d t a d i a l e s h S S r r r n r l r p p t i t i a e e a t i r a e o . . k e v e o v o i t c i o i s r n f i s s t s g i g s i s g g u t e i w h d d s i i i n n e l s o o a r a t e i t a o u i u d i y n o o n a v v n r n c n a a g f g r b r d d e e t o g a l l f y o y o l t i i s r s r b i o r s a n o l v v , n n a , p p i x a r d n i i b t e b e m m f o e o n p n p l - i r r r o i a e i l l a o s a s a l n o n e b e g i i s r n i n t t t t r f r n n m m n m a r t i i i i c f t t d i o t t c a c t t l n n i e e u u - a e e a c n c a w s e e F s l t t n n n l l o e d o i i r r e e c f t t r o o u o s s a s s s d s d o s e s h n h n n n t u u , ' r e s h u s s i i t a b b m c r p p r o e b b n n d d a h i i i s r s f o o o o d n e n l i i f e , v v r s n r t i t a c R d c e t h r o i U i a e n k h s s i s o i a f y n e a d n s i i e n f w n o d s o l i a i c e n n c t U i e t d e i c n r e s s o d a v d e n o d s r l e m t i r p m i i t S p n n o t e a B u o o t d o s r n a t n r a a t t d i t i a e t n e S o e t i t u y k s n o t d i a a o 3 t s s n e n i t n o s p d e a s n s o n s s d d i e ts b b e a n n t k ur s e .. s 4 4 2 1 1 4 2 3 2 7 0 8 5 1 9 6 6 9 9 5 5 1 2 7 6 8 8 1 8 0 9 , , , , , , , , , , , , , , , , 0 9 0 1 9 7 3 8 4 7 4 4 4 5 7 3 6 2 3 1 3 8 4 7 2 1 9 1 1 2 6 5 2 7 2 8 8 2 6 7 1 9 1 2 3 4 4 3 7 0 9 9 4 9 6 7 9 ' ' ' ' ' ' ' 4 4 2 2 1 4 4 1 2 2 8 7 1 4 4 5 8 9 1 0 2 3 3 2 7 5 0 9 6 1 , , , , , , , , , , , , , , , , 6 8 6 8 1 2 1 7 3 3 3 2 3 1 1 8 4 1 1 8 9 5 5 6 9 9 5 8 8 9 3 9 2 9 8 2 4 9 6 6 8 1 8 2 7 1 1 3 1 4 9 4 3 1 2 8 8 ^ ' ' ' ' ' ' ' ' 4 4 2 2 1 4 4 2 0 2 8 7 0 6 5 9 9 0 0 5 5 2 4 7 9 2 7 4 1 , , , , , , , , , , , , , , , 3 0 4 2 0 1 7 3 3 6 7 4 6 0 8 5 1 2 3 4 7 5 6 7 1 1 8 8 6 8 7 1 8 5 6 3 0 0 2 3 7 1 7 4 3 9 7 2 9 6 6 5 5 8 4 9 9 ' ' ' ' ' ' 4 4 2 2 1 4 2 0 0 7 2 3 9 4 5 2 9 9 0 5 5 2 0 7 1 9 2 1 4 1 1 , , , , , , , , , , , , , , , , , 0 0 2 4 1 8 0 3 2 1 9 2 2 4 9 4 5 2 3 2 6 0 8 8 4 8 6 7 1 4 7 2 9 7 1 5 4 1 8 4 7 5 5 1 6 1 5 4 4 0 3 2 4 5 1 9 4 ' ' ' ' 4 4 1 1 1 2 4 2 3 8 7 4 9 1 9 4 2 9 5 5 0 8 9 2 2 8 8 8 0 8 , , , , , , , , , , , , , , , 8 5 1 2 5 1 0 4 4 9 5 7 4 9 2 0 2 2 6 5 1 5 6 5 4 9 3 3 2 6 3 7 5 2 1 8 6 5 4 1 3 3 2 3 3 3 6 3 4 7 8 0 5 5 4 8 5 ' ' ' ' ' ' ' ' 4 4 2 2 1 4 2 4 1 2 7 2 8 4 1 5 2 1 1 3 5 9 2 9 4 8 4 4 2 9 1 1 1 , , , , . , , , , , . . , . , . , , 1 1 6 1 7 0 3 5 7 7 3 3 6 5 6 4 0 9 5 3 8 5 3 1 8 5 5 8 4 8 3 9 9 5 5 7 2 % 2 9 4 5 4 2 7 8 4 0 5 9 2 9 6 8 9 8 4 2 2 4 1 4 1 4 1 2 2 8 7 5 4 9 0 9 3 1 6 6 4 7 5 3 8 2 8 1 1 , , , , , , , , , , , , , , , , , 7 6 1 5 3 6 1 2 8 6 5 5 6 2 6 5 0 4 2 3 0 3 4 7 0 1 9 3 9 6 3 7 1 5 6 4 9 5 9 2 6 7 6 4 8 7 7 3 7 6 0 9 8 0 1 2 0 4 4 2 2 1 4 4 8 2 2 7 2 2 5 1 5 4 3 0 6 3 9 0 5 9 4 3 5 2 1 0 , , , , , , , , , , , , , , , , 2 1 0 7 5 1 6 5 6 5 0 8 6 5 0 6 7 8 5 5 2 6 5 1 5 9 3 7 4 7 7 7 1 2 7 3 5 0 4 4 6 4 2 8 8 6 8 2 2 9 5 8 0 4 4 2 2 65 Total liabilities 1,023,941' 1,010,246' 1,024,296' 999,833' 999,736 1,027,310 1,030,834 1,033,195 66 Residual (total assets minus total liabilities)4 77,233' 77,658 77,427 77,341 77,110 77,798 78,014 77,692 67 T M o E t M al O l oans and leases (gross) and investments adjusted5 840,23(K 837,836' 835,992 831,509 835,317 847,146 845,309 857,091 68 Total loans and leases (gross) adjusted2'5 698,134' 695,269' 694,435 690,025 693,931 698,890 697,826 706,549 69 Time deposits in amounts of $100,000 or more 158,245 158,811' 157,168' 157,467 158,262' 157,315 157,022 157,350 70 Loans sold outright to affiliates—total6 2,185 2,072 2,077 2,045 1,946 1,968 2,014 1,977 71 Commercial and industrial 1,298 1,249 1,261 1,248 1,170 1,230 1,264 1,213 72 Other 887 823 816 797 777 738 750 764 73 Nontransaction savings deposits (including MMDAs)... 188,828 189,368' 189,219' 189,050 189,431' 190,380 190,803 191,471 1. Includes securities purchased under agreements to resell. 5. Exclusive of loans and federal funds transactions with domestic commercial 2. Levels of major loan items were afFected by the Sept. 26, 1984, transaction banks. between Continental Illinois National Bank and the Federal Deposit Insurance 6. Loans sold are those sold outright to a bank's own foreign branches, Corporation. For details see the H.4.2 statistical release dated Oct. 5, 1984. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 3. Includes federal funds purchased and securities sold under agreements to not a bank), and nonconsolidated nonbank subsidiaries of the holding company. repurchase; for information on these liabilities at banks with assets of $1 billion or NOTE. These data also appear in the Board's H.4.2 (504) release. For address, more on Dec. 31, 1977, see table 1.13. see inside front cover. 4. This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • February 1986 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1985 AAccccoouunntt Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 1 Cash and balances due from depository institutions 24,556 22,981 23,944 23,387 23,052 25,534 24,998 22,401 22,043 2 Total loans, leases and securities, net1 183,833 184,844 181,186 180,057 181,200 186,342 183,784 193,723 191,685 Securities 3 4 5 Investment account, by maturity 10,121 8,773 8,725 8,719 8,753 10,225 10,993 11,319 11,644 6 One year or less 1,854 1,341 1,340 1,342 1,339 2,301 2,276 2,556 2,557 7 Over one through five years 6,612 5,794 5,737 5,662 5,634 6,110 6,870 6,874 7,228 8 Over five years 1,655 11,,663399 1,647 1,716 1,780 11,,881133 1,848 11,,888899 11,,885588 4 10 11 Investment account 10,792 10,807 10,835 10,956 11,095 11,381 11,602 11,839 12,245 12 States and political subdivisions, by maturity 9,616 9,635 9,655 9,716 9,853 9,933 10,118 10,338 10,736 13 One year or less 1,717 1,731 1,729 1,690 1,698 1,690 1,749 1,778 1,778 14 Over one year 7,899 7,904 7,926 8,026 8,155 8,243 8,369 8,560 8,957 15 Other bonds, corporate stocks and securities 1,176 1,172 1,180 1,240 1,242 1,447 1,484 11,,550000 1,510 1166 Loans and leases 17 Federal funds sold3 22,822 26,625 23,775 24,759 23,502 26,430 23,617 28,387 25,772 18 To commercial banks 11,010 14,119 11,806 13,358 12,138 14,252 11,222 13,699 13,074 19 To nonbank brokers and dealers in securities 6,899 7,730 7,826 7,169 6,710 7,120 7,242 7,148 7,260 20 To others 4,913 4,776 4,144 4,232 4,654 5,057 5,153 7,540 5,438 21 Other loans and leases, gross 145,372 143,922 143,168 140,989 143,218 143,738 143,028 147,623 147,466 22 Other loans, gross 142,632 141,166 140,404 138,218 140,437 140,938 140,242 144,831 144,668 23 Commercial and industrial 60,602 59,702 59,947 59,525 59,665 60,384 59,700 59,405 59,236 24 Bankers acceptances and commercial paper 676 546 639 605 685 811 644 620 630 25 All other 59,926 59,156 59,308 58,920 58,979 59,573 59,056 58,786 58,606 26 U.S. addressees 59,244 58,470 58,629 58,231 58,284 58,878 58,361 58,085 57,880 27 Non-U.S. addressees 682 686 680 689 695 695 695 701 726 28 Real estate loans 27,980 27,994 28,237 28,325 28,368 28,691 28,699 28,699 28,833 29 To individuals for personal expenditures 17,778 17,732 17,762 17,804 17,878 17,940 17,934 18,041 18,081 30 To depository and financial institutions 12,794 12,278 12,544 11,746 11,445 12,334 12,404 12,410 12,741 31 Commercial banks in the United States 2,686 2,858 2,714 2,475 2,338 2,393 2,753 2,754 3,106 32 Banks in foreign countries 2,872 2,232 2,607 2,141 2,031 2,568 2,246 2,132 2,088 33 Nonbank depository and other financial institutions 7,236 7,188 7,223 7,131 7,076 7,374 7,404 7,523 7,547 34 For purchasing and carrying securities 9,362 10,510 8,918 7,860 9,729 8,342 8,260 12,868 11,687 35 To finance agricultural production 349 345 341 359 353 342 324 325 328 36 To states and political subdivisions 8,168 8,157 8,141 8,165 8,168 8,358 8,236 8,210 8,390 37 To foreign governments and official institutions 986 874 1,042 912 876 965 1,064 930 882 38 All other 4,612 3,572 3,471 3,520 3,955 3,581 3,621 3,942 4,490 39 Lease financing receivables 2,741 2,756 2,764 2,771 2,781 2,800 2,786 2,792 2,798 40 LESS: Unearned income 1,412 1,411 1,437 1,439 1,444 1,436 1,425 1,427 1,429 41 Loan and lease reserve 3,862 3,873 3,880 3,928 3,924 3,995 4,032 4,018 4,013 42 Other loans and leases, net 140,098 138,638 137,850 135,622 137,849 138,307 137,571 142,178 142,024 43 All other assets4 69,951 68,775 67,924 66,220 66,192 71,049 71,371 72,443 73,707 44 Total assets 278,340 276,600 273,054 269,664 270,444 282,926 280,154 288,567 287,436 Deposits 45 Demand deposits 52,957 45,600 51,4% 46,935 49,620 49,437 50,064 50,326 51,642 46 Individuals, partnerships, and corporations 34,898 30,445 34,101 30,695 32,50c 31,136 32,868 31,838 34,342 47 States and political subdivisions 1,256 874 960 813 706 820 831 1,051 761 48 U.S. government 159 154 229 500 487' 378 285 712 550 49 Depository institutions in the United States 6,575 5,324 7,188 5,456 5,272 5,300 6,355 6,032 6,811 50 Banks in foreign countries 5,412 3,904 4,349 4,110 4,256 4,287 4,296 4,382 4,243 51 Foreign governments and official institutions 628 716 701 743 579 890 881 669 1,042 52 Certified and officers' checks 4,029 4,182 3,968 4,618 5,820 66,,662266 4,547 55,,664411 33,,889922 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 4,281 4,308 4,265 4,201 4,151 4,343 4,312 4,274 4,380 54 Nontransaction balances 86,417 86,711 86,458 86,591 87,094 87,036 86,797 87,996 87,995 55 Individuals, partnerships and corporations 78,168 78,310 78,131 78,088 78,677 78,705 78,408 79,727 79,884 56 States and political subdivisions 4,979 4,965 4,962 5,072 5,094 4,926 4,961 4,972 5,064 57 U.S. government 35 34 33 37 36 37 37 43 41 58 Depository institutions in the United States 2,060 2,226 2,172 2,186 2,124 2,124 2,109 1,981 1,985 59 Foreign governments, official institutions and banks 1,174 1,175 1,160 1,208 1,163 1,243 1,282 1,272 1,020 60 Liabilities for borrowed money 74,400 80,952 71,854 68,827 70,482 83,836 79,429 87,242 84,541 61 2,275 600 1,375 3,143 62 Treasury tax-and-loan notes 1,699 6' 1 178 1 650 980 120 2,314 63 All other liabilities for borrowed money5 72,702 78,672' 71,852 68,050 70,481 81,811 78,449 83,979 82,227 64 Other liabilities and subordinated note and debentures 35,816 34,350 34,341 38,506 34,681 33,523 34,704 33,931 34,271 65 Total liabilities 253,871 251,921 248,414 245,061 246,028 258,175 255,306 263,768 262,829 66 Residual (total assets minus total liabilities)6 24,469 24,678 24,640 24,604 24,416 24,750 24,848 24,798 24,607 MEMO 67 Total loans and leases (gross) and investments adjusted1'7 175,411 173,151 171,984 169,591 172,092 175,128 175,267 182,714 180,948 68 Total loans and leases (gross) adjusted7 154,498 153,570 152,424 149,915 152,244 153,522 152,671 159,556 157,058 69 Time deposits in amounts of $100,000 or more 32,945 33,682' 33,456' 33,648 33,764 33,479 33,114 33,758 33,458 1. Excludes trading account securities. 6. Not a measure of equity capital for use in capital adequacy analysis or for 2. Not available due to confidentiality. other analytic uses. 3. Includes securities purchased under agreements to resell. 7. Exclusive of loans and federal funds transactions with domestic commercial 4. Includes trading account securities. banks. 5. Includes federal funds purchased and securities sold under agreements to NOTE. These data also appear in the Board's H.4.2 (504) release. For address, repurchase. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS WITH ASSETS OF $750 MILLION OR MORE ON JUNE 30, 1980 Assets and Liabilities • Millions of dollars, Wednesday figures 1985 AAccccoouunntt Oct. 2 Oct. 9 Oct. 16 Oct. 23 Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 1 Cash and due from depository institutions . 6,517 7,132 7,981 8,428 6,967 6,697 6,720 6,965 6,868 2 Total loans and securities 50,836 49,192 49,174 47,874 49,900 50,542 49,258 52,453 51,648 3 U.S. Treasury and govt, agency securities 3,562 3,634 3,712 3,651 3,704 3,943 3,608 3,149 3,304 4 Other securities 2,379 2,440 2,437 2,308 2,330 2,364 2,384 2,444 2,484 5 Federal funds sold1 4,334 4,284 4,047 3,564 4,556 3,665 3,504 5,576 4,556 6 To commercial banks in the United States 3,887 3,834 3,611 2,994 3,935 3,021 2,911 4,918 3,886 7 To others 447 450 436 569 620 644 593 657 669 8 Other loans, gross 40,561 38,834 38,977 38,351 39,309 40,570 39,762 41,284 41,305 9 Commercial and industrial 23,756 22,476 22,879 22,812 23,727 23,970 23,923 24,344 24,586 10 Bankers acceptances and commercial paper 1,696 1,650 1,720 1,606 1,693 1,753 1,804 1,918 1,898 11 All other 22,060 20,826 21,159 21,205 22,034 22,216 22,118 22,425 22,688 12 U.S. addressees 20,788 19,578 19,952 19,955 20,780 20,973 20,905 21,219 21,434 13 Non-U.S. addressees 1,272 1,248 1,206 1,250 1,254 1,244 1,214 1,206 1,254 14 To financial institutions 12,024 11,934 11,761 11,356 11,302 12,186 11,799 12,190 11,974 15 Commercial banks in the United States . 9,057 9,318 9,220 8,831 8,822 9,660 9,363 9,489 9,515 16 Banks in foreign countries 1,407 1,096 1,128 1,119 1,076 1,070 991 1,086 981 17 Nonbank financial institutions 1,560 1,520 1,412 1,405 1,404 1,457 1,445 1,615 1,478 18 To foreign govts, and official institutions .. 544 549 552 558 574 607 598 612 601 19 For purchasing and carrying securities .. 1,682 1,371 1,332 1,258 1,331 1,506 1,134 1,861 1,840 20 All other 2,554 2,503 2,454 2,368 2,374 2,301 2,308 2,278 2,303 21 Other assets (claims on nonrelated parties).. 18,935 18,574 19,014 19,208 18,754 18,430 18,501 18,471 18,577 22 Net due from related institutions 8,792 11,008 9,152 8,267 8,289 9,037 9,487 8,511 10,326 23 Total assets 85,079 85,907 85,320 83,778 83,910 84,706 83,967 86,401 87,419 24 Deposits or credit balances due to other than directly related institutions.... 26,604 26,700 26,716 26,661 26,351 26,363 26,353 25,848 2266,,447755 25 Credit balances 262 235 228 149 179 161 181 190 196 26 Demand deposits 2,146 1,973 2,417 2,382 1,924 1,757 1,971 1,774 2,058 27 Individuals, partnerships, and corporations 1,080 1,036 1,578 1,543 1,128 1,041 1,021 1,006 11,,110099 28 Other 1,067 937 839 839 796 716 950 768 949 29 Time and savings deposits 24,196 24,492 24,071 24,130 24,249 24,445 24,200 23,884 24,221 30 Individuals, partnerships, and corporations 19,265 19,452 19,023 19,149 19,207 19,032 1188,,773355 1188,,552222 1188,,994455 31 Other 4,930 5,040 5,048 4,981 5,042 5,413 5,465 5,362 5,276 32 Borrowings from other than directly related institutions 31,610 32,562 30,964 29,087 29,432 32,858 32,138 32,096 3344,,557799 33 Federal funds purchased2 13,878 15,041 14,425 12,586 12,336 16,011 14,796 14,953 14,352 34 From commercial banks in the United States 10,771 11,789 10,962 9,141 9,054 12,673 11,077 12,192 1111,,445588 35 From others 3,107 3,252 3,463 3,445 3,282 3,338 3,719 2,761 2,894 36 Other liabilities for borrowed money.... 17,732 17,522 16,538 16,501 17,096 16,847 17,342 17,143 20,227 37 To commercial banks in the United States 16,575 16,454 15,377 15,402 16,014 15,821 16,283 16,127 1188,,996699 38 To others 1,156 1,067 1,162 1,099 1,081 1,026 1,060 1,016 1,258 39 Other liabilities to nonrelated parties 21,026 20,757 20,624 20,690 20,749 20,656 20,585 20,625 20,602 40 Net due to related institutions 5,839 5,887 7,017 7,340 7,378 4,828 4,891 7,832 5,763 41 Total liabilities 85,079 85,907 85,320 83,778 83,910 84,706 83,967 86,401 87,419 MEMO 42 Total loans (gross) and securities adjusted3 37,891 36,039 36,342 36,048 37,143 37,861 36,985 38,046 3388,,224466 43 Total loans (gross) adjusted3 31,950 29,965 30,193 30,089 31,108 31,554 30,993 32,452 32,459 • 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 • February 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.. June Sept. Dec. Mar.3 June Sept. 1 All holders—Individuals, partnerships, and corporations 315.5 288.9 291.8 293.5 286.3 288.8 302.7 286.5 298.6 298.9 2 Financial business 29.8 28.0 35.4 32.8 30.8 30.4 31.7 28.1 28.9 28.8 3 Nonfinancial business 162.8 154.8 150.5 161.1 156.7 158.9 166.3 158.2 164.7 167.7 4 Consumer 102.4 86.6 85.9 78.5 78.7 79.9 81.5 77.9 81.8 80.5 5 Foreign 3.3 2.9 3.0 3.3 3.5 3.3 3.6 3.5 3.7 3.5 6 Other 17.2 16.7 17.0 17.8 16.7 16.3 19.7 18.8 19.5 18.5 Weekly reporting banks 1984 1985 11998800 11998811 11998822 11998833 DDeecc.. DDeecc.. DDeecc.. DDeecc..22 June Sept. Dec. Mar.3 June Sept. 7 All holders—Individuals, partnerships, and corporations 147.4 137.5 144.2 146.2 145.3 145.3 157.1 147.8 151.4' 153.7 8 Financial business 21.8 21.0 26.7 24.2 23.6 23.7 25.3 22.6 22.9 23.3 9 Nonfinancial business 78.3 75.2 74.3 79.8 79.7 79.2 87.1 82.8 84.0 85.9 10 Consumer 35.6 30.4 31.9 29.7 29.9 29.8 30.5 29.1 29.9 30.6 11 Foreign 3.1 2.8 2.9 3.1 3.2 3.2 3.4 3.3 3.5 3.3 12 Other 8.6 8.0 8.4 9.3 8.9 9.3 10.9 10.0 11.0 10.6 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 instrument D 19 e 8 c 0 . D 19 e 8 c 1 . D 1 e 9 c 8 . 2 1 D 19 e 8 c 3 . D 1 e 98 c. 4 2 May June July Aug. Sept. Oct. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 124,374 165,829 166,436 188,312 239,117 258,943 254,627 262,769 273,327 276,559' 280,930 Financial companies3 Dealer-placed paper4 2 Total 19,599 30,333 34,605 44,622 56,917 61,282 61,602 67,419 67,816 69,904 68,378 3 Bank-related (not seasonally adjusted) 3,561 6,045 2,516 2,441 2,035 2,295 2,051 2,083 2,136 2,333 2,077 Directly placed paper5 4 Total 67,854 81,660 84,393 96,918 110,474 119,975 118,432 118,722 128,216 113311,,880011'' 131,064 5 Bank-related (not seasonally adjusted) 22,382 26,914 32,034 35,566 42,105 43,126 43,454 41,228 42,926 43,224 42,570 6 Nonfinancial companies6 36,921 53,836 47,437 46,772 71,726 77,686 74,593 76,628 77,295 74,854 81,488 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 54,744 69,226 79,543 78,309 75,470 69,689 68,375 68,497 68,822 68,728 67,592 Holder 8 Accepting banks 10,564 10,857 10,910 9,355 10,255 9,265 9,470 9,299 9,208 10,679 9,866 9 Own bills 8,963 9,743 9,471 8,125 9,065 7,578 7,869 8,012 8,010 9,166 8,189 10 Bills bought 1,601 1,115 1,439 1,230 1,191 1,687 1,601 1,287 1,198 1,513 1,677 Federal Reserve Banks 11 Own account 776 195 1,480 418 0 0 0 0 0 0 0 12 Foreign correspondents 1,791 1,442 949 729 671 575 511 652 789 793 850 13 Others 41,614 56,731 66,204 68,225 67,595 59,849 58,394 58,546 58,825 57,256 56,876 Basis 14 Imports into United States 11,776 14,765 17,683 15,649 16,975 16,670 16,286 16,444 17,207 16,677 16,145 15 Exports from United States 12,712 15,400 16,328 16,880 15,859 14,214 13,340 12,969 12,850 12,810 12,635 16 All other 30,257 39,060 45,531 45,781 42,635 38,804 38,748 39,084 37,149 37,708 n.a. 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 Effective Date Average Month rate 11.00 1984—Oct. 17 12.50 1983—Jan 11.16 1984—June. 10.50 29 12.00 Feb 10.98 July . 11.00 Nov. 9 11.75 Mar 10.50 Aug. 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 O A S N e c u o p t g v t 1 1 1 1 1 1 1 0 . . . . 0 0 8 0 0 0 0 9 1985— F M A Ja e p a n b r r . . . . . . . Dec 11.00 May. June. 1984—Jan.. 11.00 July. Feb. 11.00 Aug. Mar. 11.21 Sept. Apr. 11.93 Oct.. Nov. NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • February 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 Aug. Sept. Oct. Nov. Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 MONEY MARKET RATES 1 Federal funds1'2 12.26 9.09 10.22 7.90 7.92 7.99 8.05 7.89 8.30 7.95 8.13 7.71 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 7.73 7.83 7.81 7.84 7.77 7.87 7.88 7.79 7.82 4 3-month 11.89 8.88 10.10 7.72 7.83 7.80 7.77 7.74 7.78 7.79 7.74 7.77 5 6-month 11.89 8.89 10.16 7.74 7.86 7.79 7.69 7.73 7.71 7.69 7.67 7.69 Finance paper, directly placed4'5 6 1-month 11.64 8.80 9.97 7.70 7.84 7.79 7.81 7.75 7.88 7.85 7.78 7.73 7 3-month 11.23 8.70 9.73 7.56 7.64 7.60 7.58 7.62 7.60 7.58 7.58 7.58 8 6-month 11.20 8.69 9.65 7.55 7.60 7.59 7.57 7.60 7.59 7.57 7.54 7.56 Bankers acceptances5-6 9 3-month 11.89 8.90 10.14 7.68 7.81 7.76 7.70 7.69 7.68 7.70 7.70 7.71 10 6-month 11.83 8.91 10.19 7.68 7.84 7.75 7.59 7.65 7.60 7.62 7.57 7.57 Certificates of deposit, secondary market7 11 1-month 12.04 8.96 10.17 7.77 7.88 7.85 7.82 7.79 7.80 7.85 7.80 7.86 12 3-month 12.27 9.07 10.37 7.81 7.93 7.88 7.81 7.82 7.79 7.82 7.80 7.86 13 6-month 12.57 9.27 10.68 7.97 8.09 7.97 7.82 7.85 7.79 7.83 7.81 7.88 14 Eurodollar deposits, 3-month8 13.12 9.56 10.73 8.02 8.14 8.08 8.02 8.09 8.00 7.99 8.03 8.03 U.S. Treasury bills' Secondary market9 15 3-month 10.61 8.61 9.52 7.13 7.10 7.16 7.24 7.20 7.25 7.29 7.23 7.18 16 6-month 11.07 8.73 9.76 7.32 7.27 7.33 7.30 7.32 7.32 7.32 7.29 7.27 17 1-year 11.07 8.80 9.92 7.48 7.50 7.45 7.33 7.41 7.36 7.34 7.30 7.32 Auction average10 18 3-month 10.69'' 8.63' 9.58' 7.18 7.08 7.17 7.20 7.24 7.21 7.21 7.24 7.15 19 6-month 11.08'' 8.75' 9.80' 7.35 7.26 7.32 7.26 7.37 7.30 7.23 7.26 7.26 20 1-year 11.10 8.86' 9.91 7.60 7.36 7.42 7.33 n.a. n.a. n.a. n.a. 7.33 CAPITAL MARKET RATES U.S. Treasury notes and bonds" Constant maturities12 21 1-year 12.27 9.57 10.89 8.05 8.07 8.01 7.88 7.97 7.91 7.88 7.85 7.87 22 2-year 12.80 10.21 11.65 8.94 8.98 8.86 8.58 8.76 8.66 8.60 8.52 8.51 •>3 8.95 8.80 24 3-year 12.92 10.45 11.89 9.31 9.37 9.25 8.88 9.13 9.00 8.94 8.78 8.74 25 5-year 13.01 10.80 12.24 9.81 9.81 9.69 9.28 9.55 9.38 9.30 9.21 9.16 26 7-year 13.06 11.02 12.40 10.20 10.24 10.11 9.62 9.91 9.74 9.63 9.53 9.52 27 10-year 13.00 11.10 12.44 10.33 10.37 10.24 9.78 10.07 9.92 9.82 9.68 9.65 28 20-year 12.92 11.34 12.48 10.73 10.80 10.67 10.24 10.52 10.35 10.27 10.14 10.14 29 30-year 12.76 11.18 12.39 10.56 10.61 10.50 10.06 10.34 10.18 10.10 9.98 9.93 Composite14 30 Over 10 years (long-term) 12.23 10.84 11.99 10.59 10.67 10.56 10.08 10.37 10.21 10.10 9.98 9.96 State and local notes and bonds Moody's series15 31 Aaa 10.86 8.80 9.61 8.49 8.70 8.58 8.13 8.30 8.30 8.20 8.00 8.00 32 Baa 12.46 10.17 10.38 9.50 9.63 9.54 9.20 9.35 9.35 9.25 9.10 9.10 33 Bond Buyer series16 11.66 9.51 10.10 9.08 9.27 9.08 8.54 8.76 8.68 8.60 8.37 8.51 Corporate bonds Seasoned issues17 34 All industries 14.94 12.78 13.49 11.76 11.75 11.69 11.29 11.56 11.41 11.31 11.20 11.16 35 Aaa 13.79 12.04 12.71 11.05 11.07 11.02 10.55 10.87 10.67 10.56 10.47 10.43 36 Aa 14.41 12.42 13.31 11.47 11.46 11.45 11.07 11.34 11.19 11.10 10.97 10.95 37 A 15.43 13.10 13.74 12.00 11.99 11.94 11.54 11.78 11.65 11.55 11.46 11.42 38 Baa 16.11 13.55 14.19 12.50 12.48 12.36 11.99 12.24 12.12 12.02 11.91 11.85 39 A-rated, recently-offered utility bonds18 15.49 12.73 13.81 11.77 11.87 11.82 11.38 11.52 11.42 11.42 11.30 11.25 MEMO: Dividend/price ratio19 40 Preferred stocks 12.53 11.02 11.59 10.15 10.26 10.35 10.12 10.32 10.01 10.09 10.13 9.84 41 Common stocks 5.81 4.40 4.64 4.23 4.32 4.28 4.06 4.20 4.14 4.08 4.03 3.98 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 of ten issues: four public utilities, four industrials, one financial, and one Treasury bill auction held on Apr. 18, 1983, bidders were required to state the transportation. Common stock ratios on the 500 stocks in the price index. percentage yield (on a bank discount basis) that they would accept to two decimal NOTE. These data also appear in the Board's H.15 (519) and G. 13 (415) releases. places. Thus, average issuing rates in bill auctions will be reported using two For address, see inside front cover. rather than three decimal places. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.36 STOCK MARKET Selected Statistics 1985 IInnddiiccaattoorr 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept. Oct. Nov. Prices and tradingiaverages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 68.93 92.63 92.46 103.92 104.66 107.00 109.52 111.64 109.09 106.62 107.57 113.93 2 Industrial 78.18 107.45 108.01 119.64 119.93 121.88 124.11 126.94 124.92 122.35 123.65 130.53 3 Transportation 60.41 89.36 85.63 98.30 96.47 99.66 105.79 111.67 109.92 104.96 103.72 108.61 4 Utility 39.75 47.00 46.44 53.91 55.51 57.32 59.61 59.68 56.99 55.93 55.84 59.07 5 Finance 71.99 95.34 89.28 107.59 109.39 115.31 118.44 119.85 114.68 110.21 112.36 122.83 6 Standard & Poor's Corporation (1941-43 = 10)' ... 119.71 160.41 160.50 179.42 180.62 184.90 188.89 192.54 188.31 184.06 186.18 197.45 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 282.62 216.48 207.96 225.62 229.46 228.75 227.48 235.21 232.65 226.27 225.00 236.53 Volume of trading (thousands of shares) 8 New York Stock Exchange 64,868 85,418 91,084 102,591 94,387 106,827 105,849 111,952 87,468 97,910 110,569 122,263 9 American Stock Exchange 5,283 8,215 6,107 8,677 7,801 7,171 7,128 7,284 7,275 7,057 7,648 9,183 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 13,325 23,000 22,470 23,230 23,900 24,300 25,260 25,220 25,780 25,330 26,350 26,400 Free credit balances at brokers4 11 Margin-account 5,735 6,620 7,015 6,780 6,910 6,865 7,300 7,000 6,455 6,225 6,125' 6,490 12 Cash-account 8,390 8,430 10,215 10,160 9,230 9,230 10,115 9,700 9,440 10,080 9,630 10,340 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 percent)5 14 Under 40 21.0 41.0 46.0 38.0 39.0 36.0 34.0 34.0 35.0 40.0 37.0 35.0 15 40-49 24.0 22.0 18.0 20.0 19.0 19.0 20.0 20.0 21.0 22.0 22.0 20.0 16 50-59 24.0 16.0 16.0 18.0 18.0 19.0 19.0 19.0 18.0 16.0 17.0 19.0 17 60-69 14.0 9.0 9.0 10.0 10.0 11.0 11.0 11.0 11.0 9.0 10.0 11.0 18 70-79 9.0 6.0 5.0 7.0 7.0 7.0 8.0 8.0 8.0 6.0 7.0 7.0 19 80 or more 8.0 6.0 6.0 7.0 7.0 8.0 8.0 8.0 7.0 7.0 7.0 8.0 Special miscellaneous-account balances at brokers (end of period) 20 Total balances (millions of dollars)6 35,598 58,329 75,840 83,729 82,990 87,120 86,910 89,240 90,930 91,400 92,250 95,240 Distribution by equity status (percent) 21 Net credit status 62.0 63.0 59.0 60.0 60.0 60.0 59.0 59.0 59.0 59.0 58.0 57.0 Debt status, equity of 22 60 percent or more 29.0 28.0 29.0 30.0 30.0 30.0 31.0 32.0 30.0 31.0 31.0 32.0 23 Less than 60 percent 9.0 9.0 11.0 10.0 10.0 10.0 10.0 9.0 11.0 10.0 11.0 11.0 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 DomesticN onfinancial Statistics • February 1986 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1984 1985 AAccccoouunntt 11998822 11998833 Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. FSLIC insured institutions 1 Assets 692,663 819,168 978,514 974,881 982,182 992,289 995,430 1,003,225 1,012,312 1,022,425' 1,034,830' 1,041,286' 1,049,017 2 Mortgages 477,009 521,308 599,021 602,180 603,308 608,267 613,334 617,574 623,275 627,935r 632,621' 637,356' 644,076 3 Mortgage-backed securities 62,793 90,902 108,219 106,836 107,779 108,755 108,174 106,433 102,892 104,664' 108,229' 111,1%' 111,178 4 Cash and investment securities' . 82,300 109,923 135,640 129,481 131,625 132,438 125,528 129,918 132,109 133,868r 135,349' 130,682' 131,176 5 Other 91,516 91,211 93,100 94,625 96,903 98,034 100,595 101,566' 101,922' 102,652' 102,763 6 Liabilities and net worth. 692,663 819,168 978,514 974,881 982,182 992,289 995,430 1,003,225 1,012,312 1,022,425' 1,034,83c 1,041,286' 1,049,017 7 Savings capital... 554,584 671,059 784,724 791,475 792,566 801,293 801,293 809,083 817,551 822,144' 826,703' 831,004' 833,367 8 Borrowed money 97,459 98,511 137,123 125,605 129,321 132,665 132,230 129,082 130,269 133,683' 139,154' 143,699' 146,874 9 FHLBB 63,818 57,253 71,719 70,509 71,470 71,674 72,785 74,159 75,897 77,749 80,129 81,472' 82,554 10 Other 33,641 41,258 65,404 55,096 57,851 60,991 59,445 54,923 54,372 55,934' 59,025' 62,227' 64,320 11 Other 15,233 16,619 18,746 19,961 21,816 19,290 22,468 24,215 22,055 23,428' 25,333' 22,432' 24,308 12 Net worth2. 25,386 32,980 37,921 37,840 38,488 39,041 39,476 40,845 42,436 43,171 43,641' 44,151' 44,469 13 MEMO: Mortgage loan commitments outstanding3 65,836 64,154 65,323 67,615 68,671 69,683 69,585 68,712' 65,793' 65,865' 64,863 Mutual savings banks4 14 Assets 174,197 193,535 203,898 204,859 206,175 210,568 210,469 212,509 212,163 213,824 215,298 215,560 Loans 15 Mortgage 94,091 97,356 102,895 103,393 103,654 104,340 105,102 105,869 105,891 106,441 107,322 108,842 16 Other 16,957 19,129 24,954 25,747 26,456 27,798 28,000 28,530 29,211 30,339 30,195 29,672 Securities 17 U.S. government 9,743 15,360 14,643 14,628 14,917 15,098 14,504 14,895 14,074 13,960 13,868 13,686 18 Mortgage-backed securities 14,055 18,205 19,215 19,459 19,167 19,694 19,750 19,527 19,160 19,779 20,101 20,368 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 2,105 20 Corporate and other7 22,106 25,375 23,747 23,892 23,8% 24,194 24,139 24,344 24,047 23,738 23,735 23,534 21 Cash 6,919 6,263 4,954 4,140 4,423 4,864 4,679 5,004 4,935 4,544 4,821 4,916 22 Other assets 7,855 9,670 11,413 11,533 11,593 12,488 12,288 12,246 12,770 12,937 13,151 12,345 23 Liabilities 174,197 193,535 203,898 204,859 206,175 210,568 210,469 212,509 212,163 213,824 215,298 215,560 n a. 24 Deposits 155,1% 172,665 180,616 181,062 181,849 185,197 184,478 185,802 186,091 186,824 187,207 187,722 25 Regular8 152,777 170,135 177,418 177,954 178,791 181,742 180,804 182,113 182,218 182,881 183,222 183,560 26 Ordinary savings 46,862 38,554 33,739 33,413 33,413 33,715 33,211 33,457 33,526 33,495 33,398 33,252 27 Time %,369 95,129 104,732 104,098 103,536 105,204 104,527 104,843 104,756 104,737 104,448 104,668 28 Other 2,419 2,530 3,198 3,108 3,058 3,455 3,689 3,674 3,873 3,943 3,985 4,162 29 Other liabilities 8,336 10,154 12,504 12,931 13,387 14,393 14,959 15,546 14,348 15,137 15,971 15,546 30 General reserve accounts ... 9,235 10,368 10,510 10,619 10,670 10,720 10,803 10,913 11,238 11,453 11,704 11,882 Life insurance companies8 31 Assets. 588,163 654,948 722,979 731,113 735,332 742,154 748,865 757,523 765,891 772,452 778,293 783,828 Securities Government 36,499 50,752 63,899 63,979 65,867 65,603 66,402 67,880 68,636 68,983 69,975 71,049 United States6. 1166,,552299 2288,,663366 42,204' 41,982 43,916 43,502 44,200 45,593 46,260 46,514 47,343 48,181 State and local. 8,713 8,913 9,000 8,902 8,923 8,998 9,044 8,980 9,201 9,293 Foreigr7 11,306 12,130 12,982 13,084 12,951 13,199 13,279 13,289 13,332 13,489 13,431 13,575 Business 287,126 322,854 359,333 368,306 371,009 374,757 379,247 384,342 388,448 393,386 397,202 355,505 n.a. Bonds 231,406 257,986 295,998 302,260 303,452 307,078 311,123 314,021 317,029 321,752 325,647 285,164 Stocks 55,720 64,868 63,335 66,046 67,557 67,679 68,124 70,321 71,419 71,634 71,555 70,341 39 Mortgages 141,989 150,999 156,699 156,850 157,253 158,162 159,393 160,470 161,485 162,690 163,027 163,929 40 Real estate 20,264 22,234 25,767 25,983 26,186 26,527 26,828 27,215 27,831 28,240 28,450 28,476 41 Policy loans 52,961 54,063 54,505 54,414 54,489 54,438 54,439 54,384 54,320 54,300 54,238 54,225 42 Other assets 48,571 54,046 63,776 61,571 60,528 62,667 62,556 63,232 65,171 64,853 65,401 66,629 Credit unions9 43 Total assets/liabilities and capital 69,585 81, %1 93,036 94,646 96,183 98,646 101,268 104,992 106,783 107,991 111,150 113,016 114,783 44 Federal 45,493 54,482 63,205 64,505 65,989 67,799 68,903 71,342 72,021 72,932 74,869 75,567 76,415 45 State 24,092 27,479 29,831 30,141 30,194 30,847 32,365 33,650 34,762 35,059 36,281 37,449 38,368 46 Loans outstanding 43,232 50,083 62,561 62,662 62,393 62,936 64,341 65,298 66,817 67,662 69,171 70,765 71,811 47 Federal 27,948 32,930 42,337 42,220 42,283 42,804 43,414 44,042 44,707 44,%3 46,036 46,702 47,065 48 State 15,284 17,153 20,224 20,442 20,110 20,132 20,927 21,256 22,110 22,699 23,135 24,063 24,746 49 Savings 62,990 74,739 84,348 86,047 86,048 88,560 91,275 95,278 %,702 98,026 99,834 101,318 103,677 50 Federal (shares) 41,352 49,889 57,539 58,820 59,914 61,758 62,867 66,680 66,243 67,070 68,087 68,592 70,063 51 State (shares and deposits)... 21,638 24,850 26,809 27,227 26,134 26,802 28,408 28,598 30,459 30,956 31,747 32,726 33,614 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 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 • February 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 11998833 11998844 11998855 HI H2 HI Sept. Oct. Nov. U.S. budget 1 Receipts1 600,562 666,457 733,996 306,331 306,584 341,808 73,808 57,881 51,163 2 Outlays1 795,917 841,800 936,809 396,477 406,849 420,700 73,191 85,074 84,763 3 Surplus, or deficit (-) -195,355 -175,343 -202,813 -90,146 -100,265 -78,892 617 -27,193 -33,601 4 Trust funds 23,056 30,565 53,540 22,680 7,745 18,080 13,164 3,371 -1,420 5 Federal funds2'3 -218,410 -205,908 -256,353 -112,822 -108,005 -96,971 -12,547 -30,564 -32,181 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays -10,404 -7,277 -7,339 -5,418 -3,199 -2,813 -31 86 -322 7 Other3'4 -1,953 -2,719 -1,779 -528 -1,206 -838 -1,350 20 537 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -207,711 -185,339 -211,931 -96,094 -104,670 -84,884 -764 -27,087 -33,386 Source of financing 9 Borrowing from the public 212,425 170,817 197,269 102,538 84,020 80,592 5,975 11,390 45,863 10 Cash and monetary assets (decrease, or increase (-))4 -9,889 5,636 10,673 -9,664 -16,294 -3,127 -6,248 13,964 -8,671 11 Other5 5,176 8,885 3,989 3,222 4,358 7,418 -1,037 1,733 3,806 MEMO 12 Treasury operating balance (level, end of period) 37,057 22,345 17,060 27,997 11,817 13,567 17,060 1,823 10,051 13 Federal Reserve Banks 16,557 3,791 4,174 19,442 3,661 4,397 4,174 1,528 2,294 14 Tax and loan accounts 20,500 18,553 12,886 8,764 8,157 9,170 12,886 294 7,757 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 1986. 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 1984 1985 HI H2 HI H2 Sept. Oct.' RECEIPTS 1 All sources 666,457 733,996 306,331 305,122 341,808 341,392 73,808 57,881 2 Individual income taxes, net 295,960 330,918 144,551 147,663 144,691 157,229 34,643 29,730 3 Withheld 279,350 298,941 135,531 133,768 140,657 145,210 22,569 29,360 4 5 6 P N R r e o e f n s u i w d n i e d t n s h t h ia e l l d E lection Campaign Fund . 8 64 1 , , 7 3 7 4 3 0 6 5 9 6 7 5 , , 6 7 8 4 3 5 3 5 6 5 3 4 , , 0 0 1 2 3 4 4 0 20 6 , , 7 81 0 5 3 6 6 5 1 7 , , 4 4 6 5 2 3 8 9 1 7 9 , , 3 4 8 0 7 3 5 13 1 , , 6 53 1 9 3 1 1 1 , , 5 1 4 7 7 7 0 Corporation income taxes 7 Gross receipts 74,179 77,413 33,522 31,064 40,328 35,190 12,224 3,383 8 Refunds 17,286 16,082 13,809 8,921 10,045 6,847 1,275 2,202 9 Social insurance taxes and contributions. net 241,902 268,805 110,520 100,832 131,372 118,690 21,977 20,431 10 Payroll employment taxes and contributions1 212,180 238,288 97,339 88,786 114,102 105,624 21,325 18,708 11 Self-employment taxes and contributions2 8,709 10,468 6,427 398 7,667 1,086 1,247 144 12 Unemployment insurance 25,138 25,758 10,984 8,714 14,942 10,706 275 1,340 13 Other net receipts3 4,580 4,759 2,197 2,290 2,329 2,360 376 382 14 Excise taxes 37,361 35,865 16,904 19,586 18,304 18,961 3,331 2,958 15 Customs deposits 11,370 12,079 4,010 5,079 5,576 6,329 936 1,106 16 Estate and gift taxes 6,010 6,422 2,883 3,050 3,102 3,029 497 574 17 Miscellaneous receipts4 16,965 18,576 7,751 7,811 8,481 8,812 1,473 1,902 OUTLAYS 18 All types 841,800 936,809 396,477 406,849 420,700 446,943 73,191 85,074 19 National defense 227,411 251,468 105,072 108,967 114,639 118,286 21,498 21,942 2 2 2 2 2 0 2 3 4 1 A N E G In n g a e t e t n e r u i r r e c g n r r u a y a a l l l t t i u r o s e r c n 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 c e, 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 2 3 2 , , , , , 5 3 5 0 2 3 9 1 6 0 8 1 0 3 3 2 1 1 2 8 3 3 5 , , , , , 7 7 9 2 4 8 0 0 9 2 0 0 6 8 6 1 4 2 5 3 0 , , , , , 8 7 0 4 1 9 0 7 8 5 2 5 3 6 4 6 4 6 5 1 , , , , , 1 9 2 2 5 1 3 7 1 3 7 3 8 6 3 5 5 7 3 1 , , , , , 4 4 1 9 0 8 6 2 2 8 1 3 6 9 0 8 4 7 8 1 , , , , , 5 3 4 5 4 2 7 7 5 2 4 0 3 0 3 1 1 1 , , , 9 0 9 7 1 8 7 9 4 2 3 8 5 8 2 2 3 1 1 , , , , 3 0 3 0 3 8 4 6 2 8 7 8 3 9 4 25 Commerce and housing credit 5,213 1,817 2,164 2,648 2,572 2,663 401 954 26 Transportation 24,587 25,874 9,918 13,323 10,616 13,673 2,524 2,602 27 Community and regional development .. 7,307 7,748 3,124 4,327 3,154 4,836 521 28 Education, training, employment, social services 28,352 13,246 2,136 2,581 29 Health 30,432 33,560 41,206 27,271 15,551 15,692 2,672 3,125 30 Social security and medicare 235,764 254,446 n.a. n.a. 119,420 119,613 21,170 21,843 31 Income security 112,556 128,993 143,001 92,643 50,450 57,411 8,574 9,340 32 Veterans benefits and services 25,614 26,376 11,334 13,621 12,849 13,317 942 2,132 33 Administration of justice 5,660 6,188 2,522 2,628 2,807 2,992 469 538 34 General government 5,117 5,483 2,434 2,479 2,462 2,552 788 265 35 General-purpose fiscal assistance 6,770 6,140 3,124 3,290 2,943 3,458 291 1,667 36 Net interest6 111,058 129,148 42,358 47,674 54,748 61,293 9,773 11,440 37 Undistributed offsetting receipts7 -31,957 -32,893 -8,887 -7,262 -8,036 -12,914 -4,495 -2,465 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 Nonfinancial Statistics • February 1986 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1983 1984 1985 IItteemm Sep. 30 Dec. 31 Mar. 31 June 30 Sep. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 1,381.9 1,415.3 1,468.3 1,517.2 1,576.7 1,667.4 1,715.1 1,779.0 1,827.5 2 Public debt securities 1,377.2 1,410.7 1,463.7 1,512.7 1,572.3 1,663.0 1,710.7 1,774.6 1,823.1 3 Held by public 1,138.2 1,174.4 1,223.9 1,255.1 1,309.2 1,373.4 1,415.2 1,460.5 1,506.6 4 Held by agencies 239.0 236.3 239.8 257.6 263.1 289.6 295.5 314.2 316.5 5 Agency securities 4.7 4.6 4.6 4.5 4.5 4.5 4.4 4.4 4.4 6 Held by public 3.6 3.5 3.5 3.4 3.4 3.4 3.3 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 1,378.0 1,411.4 1,464.5 1,513.4 1,573.0 1,663.7 1,711.4 1,775.3 n.a. 9 Public debt securities 1,376.6 1,410.1 1,463.1 1,512.1 1,571.7 1,662.4 1,710.1 1,774.0 1,822.5 10 Other debt1 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 n.a. 11 MEMO: Statutory debt limit 1,389.0 1,490.0 1,490.0 1,520.0 1,573.0 1,823.8 1,823.8 1,823.8 1,823.8 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 Q4 Q1 Q2 Q3 1 Total gross public debt 930.2 1,028.7 1,197.1 1,410.7 1,663.0 1,710.7 1,774.6 1,823.1 By type 2 Interest-bearing debt 928.9 1,027.3 1,195.5 1,400.9 1,660.6 1,695.2 1,759.8 1,821.0 3 Marketable 623.2 720.3 881.5 1.050.9 1,247.4 1,271.7 1,310.7 1,360.2 4 Bills 216.1 245.0 311.8 343.8 374.4 379.5 381.9 384.2 5 Notes 321.6 375.3 465.0 573.4 705.1 713.8 740.9 976.0 6 Bonds 85.4 99.9 104.6 133.7 167.9 178.4 187.9 776.5 7 Nonmarketable1 305.7 307.0 314.0 350.0 413.2 423.6 449.1 199.5 8 State and local government series 23.8 23.0 25.7 36.7 44.4 47.7 53.9 6.6 9 Foreign issues2 24.0 19.0 14.7 10.4 9.1 9.1 8.3 77.3 10 Government 17.6 14.9 13.0 10.4 9.1 9.1 8.3 6.6 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 73.3 74.4 75.7 313.9 13 Government account series3 185.1 196.7 205.4 231.9 286.2 292.2 311.0 460.8 14 Non-interest-bearing debt 1.3 1.4 1.6 9.8 2.3 15.5 14.8 62.8 By holder4 15 U.S. government agencies and trust funds 192.5 203.3 209.4 236.3 289.6 295.5 314.2 16 Federal Reserve Banks 121.3 131.0 139.3 151.9 160.9 161.0 169.1 17 Private investors 616.4 694.5 848.4 1,022.6 1,212.5 1,254.1 1,292.0 18 Commercial banks 112.1 111.4 131.4 188.8 183.4 195.0 196.3 19 3.5 21.5 42.6 22.8 25.9 26.7 24.8 20 Insurance companies 24.0 29.0 39.1 56.7 82.3 84.0 n.a. 21 Other companies 19.3 17.9 24.5 39.7 50.1 50.9 52.3 22 State and loca' 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 74.5 75.4 76.7 74 Other securities 44.6 42.7 48.2 61.9 69.3 79.9 81.9 25 Foreign and international5 129.7 136.6 149.5 166.3 192.9 186.3 200.7 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 offoreign and international accounts. Excludes nontion Administration; depository bonds, retirement plan bonds, and individual interest-bearing notes issued to the International Monetary Fund. retirement bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable dollar-denominated and foreign currency-denominated se- mutual savings banks, corporate pension trust funds, dealers and brokers, certain ries held by foreigners. U.S. government deposit accounts, and U.S. government-sponsored agencies. 3. Held almost entirely by U.S. government agencies and trust funds. SOURCES. Data by type of security, U.S. Treasury Department, Monthly 4. Data for Federal Reserve Banks and U.S. government agencies and trust Statement of the Public Debt of the United States; data by holder. Treasury funds are actual holdings; data for other groups are Treasury estimates. Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1985 1985 week ending Wednesday IItteemm 11998822 11998833 11998844 Sept/ Oct/ Nov. Oct. 23 Oct. 3<y Nov. 6 Nov. 13 Nov. 20 Nov. 27 Immediate delivery1 1 U.S. government securities 32,261 42,135 52,778 62,925 71,702 92,039 65.96C 95,745 86,377 86,894 104,413 95,675 By maturity 2 Bills 18,393 22,393 26,035 27,629 31,795 36,013 29,097r 39,066 28,635 33,295 46,764 35,478 3 Other within 1 year 810 708 1,305 1,683 1,943 1,954 1,421 1,605 2,166 1,919 1,953 2,062 4 1-5 years 6,271 8,758 11,733 15,295 15,328 21,328 14,484r 25,918 18,620 18,213 26,942 23,351 5 5-10 years 3,555 5,279 7,606 10,465 13,613 18,497 11,881 17,263 23,001 19,465 15,258 18,201 6 Over 10 years 3,232 4,997 6,099 7,853 9,024 14,247 9,078 11,894 13,955 14,003 13,496 16,583 By type of customer 7 U.S. government securities dealers 1,770 2,257 2,919 2,946 3,246 3,125 2,754 4,330 3,809 2,771 3,127 3,472 8 U.S. government securities brokers 15,794 21,045 25,580 30,770 33,815 43,676 30,889 46,101 40,768 43,137 49,617 44,163 9 All others2 14,697 18,833 24,278 29,209 34,641 45,237 32,318' 45,314 41,800 40,986 51,670 48,039 10 Federal agency securities 4,140 5,576 7,846 11,666 13,337 15,282 12,836' 13,535 12,073 15,275 20,451 15,168 11 Certificates of deposit 5,001 4,333 4,947 3,386 3,245 3,102 2,690 3,791 3,009 2,990 3,849 2,844 12 Bankers acceptances 2,502 2,642 3,243 3,007 2,789 2,629 2,280 3,341 2,448 2,936 3,107 2,397 13 Commercial paper 7,595 8,036 10,018 13,466 14,381 14,703 14,232 13,880 15,221 14,841 15,815 15,018 Futures transactions3 14 Treasury bills 5,055 6,655 6,947 5,836 4,608 4,990 4,585' 5,788 4,260 4,136 6,545 4,745 15 Treasury coupons 1,487 2,501 4,503 6,585 6,037 7,442 5,901r 7,950 7,292 7,894 7,840 7,422 16 Federal agency securities 261 265 262 234 564 467 540 694 853 850 169 146 Forward transactions4 17 U.S. government securities 835 1,493 1,364 1,034 721 1,736 1,152 648 819 699 2,635 2,481 18 Federal agency securities 978 1,646 2,843 3,810 4,770 5,651 4,419'' 4,736 4,814 7,331 7,092 4,323 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 securities, purchases or sales of securities under repurchase market in which securities are purchased (sold) for delivery after 5 business days agreement, reverse repurchase (resale), or similar contracts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • February 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 Sept. Oct. Nov. Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 Positions Net immediate1 1 U.S. government securities 14,769 14,224 5,538 2,294' 3,891' 17,153 7,012 14,882 16,138 17.825 19,163 2 Bills 8,226 10,800 5,500 6,416'' 12,146 17,445 14,072 14,995 15,456 18,624 19,922 3 Other within 1 year 1,088 921 63 1,059 1,056 1,112 1,096 588 913 1,442 1,368 4 1-5 years 3,293 1,912 2,159 5,733 6,164 9,242 7,256 10,634 11,382 7,405 8,650 5 5-10 years -318 -78 -1,119 -6,381 -9,192' -8,209 -9,736 -7,782 -8,749 -7,699 -8,533 6 Over 10 years 2,026 528 -1,174 -4,734' -6,483 -2,646 -5,875 -3,765 -3,072 -2,154 -2,449 7 Federal agency securities 4,169 7,313 15,294 23,787 25,313' 26,485 25,001 26,047 25,548 26,016 27,889 8 Certificates of deposit 5,532 5,838 7,369 8,288 8,850 9,982 9,249 9,475 9,842 9,710 10,499 9 Bankers acceptances 2,832 3,332 3,874 4,179' 4,949' 5,492 4,839' 5,297 5,839 5,388 5,389 10 Commercial paper 3,317 3,159 3,788 5,624 5,699 7,449 5,406 7,776 7,295 7,548 7,044 Futures positions 11 Treasury bills -2,507 -4,125 -4,525 -6,222' -13,573 -15,857 -18,031 -16,407 -17,445 -15,829 -14,373 12 Treasury coupons -2,303 -1,033 1,794 5,122 5,789' 2,621 4,546' 3,261 2,971 1,614 2,873 13 Federal agency securities -224 171 233 -1,209 -2,677 -1,333 -3,193 -3,335 -1,221 -591 -622 Forward positions 14 U.S. government securities -788 -1.936 -1,643 -1,464 -1,574 -862 -1,438 -1,524 -896 -1,330 72 15 Federal agency securities -1,432 -3,561 -9,205 -10,433 -9,325' -11,103 -8,635 -9,831 -11,720 -11,335 -11,155 Financing2 Reverse repurchase agreements3 16 Overnight and continuing 26,754 29,099 44,078 72,392 77,247 n.a. 75,713 79,794 80,765 74,295 69,065 17 Term agreements 48,247 52,493 68,357 80,007 219,416 n.a. 669944,,882222 96,171 97,968 94,006 100,601 Repurchase agreements4 18 Overnight and continuing 49,695 57,946 75,717 107,884 93,334 n.a. 113,650 124,225 121,264 124,373 93,413 19 Term agreements 43,410 44,410 57,047 67,645 74,425 n.a. 83,299 80,589 85,475 79,170 108,969 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 May June July Aug. Sept. Oct. 1 Federal and federally sponsored agencies 237,787 240,068 271,220 279,449 284,871 286,159 289,277 288,857' 292,618 2 Federal agencies 33,055 33,940 35,145 34,915 35,646 35,354 35,338 36,103' 36,011 3 Defense Department' 354 243 142 102 97 93 89 82 79 4 Export-Import Bank2'3 14,218 14,853 15,882 15,706 15,746 15,746 15,744 15,419' 15,418 5 Federal Housing Administration4 288 194 133 122 119 118 116 117 116 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 7 Postal Service6 1,471 1,404 1,337 970 970 970 970 1,940 1,940 8 Tennessee Valley Authority 14,365 14,970 15,435 15,776 16,475 16,188 16,200' 16,306' 16,219 9 United States Railway Association6 194 111 51 74 74 74 74 74 74 10 Federally sponsored agencies7 204,732 206,128 236,075 244,534 249,225 250,805 253,939 252,754' 256,607 11 Federal Home Loan Banks 55,967 48,930 65,085 67,765 69,898 70,244 71,949 72,384 73,260 12 Federal Home Loan Mortgage Corporation 4,524 6,793 10,270 12,167 12,723 13,197 13,393 12,720' 13,239 13 Federal National Mortgage Association8 70,052 74,594 83,720 88,170 89,518 90,208 91,318 91,693 92,578 14 Farm Credit Banks 73,004' 72,816' 71,193' 69,321 70,039 70,069 70,092 68,287' 69,274 15 Student Loan Marketing Association 2,293 3,402 5,745 7,111 7,047 7,087 7,187 7,670 8,256 MEMO 16 Federal Financing Bank debt 126,424 135,791 145,217 149,597 149,957 152,962 152,941 153,513 153,565 Lending to federal and federally sponsored 17 Export-Import Bank3 14,177 14,789 15,852 15,690 15,729 15,729 15,729 15,409 15,409 18 Postal Service6 1,221 1,154 1,087 720 720 720 720 1,690 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 14,154 14,750 14,463 14,455 14,381 14,474 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 61,461 62,606 63,546 6633,,777799 6644,,116699 6633,,996699 23 Rural Electrification Administration 17,157 19,766 20,693 21,003 21,183 21,364 21,463 21,676 21,792 24 Other 22,774 26,460 29,853 31,495 31,909 32,066 31,721 31,114 31,157 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 Nonfinancial Statistics • February 1986 1.45 NEW SECURITY ISSUES State and Local Governments 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. 1 All issues, new and refunding' 79,138 86,421 106,641 8,510 9,873 12,095 14,097 11,801 12,268 15,239 12,917 Type of issue 2 General obligation 21,094 21,566 26,485 3,527 2,998 3,265 4,535 2,739 5,257 3,160 3,998 3 U.S. government loans2 225 96 16 0 5 0 2 0 0 0 0 4 Revenue 58,044 64,855 80,156 4,983 6,875 8,830 9,562 9,062 7,011 12,079 8,919 5 U.S. government loans2 461 253 17 0 0 2 0 1 6 2 0 Type of issuer 6 State 8,438 7,140 9,129 1,559 252 958 1,298 350 786 800 1,175 7 Special district and statutory authority 45,060 51,297 63,550 4,493 5,754 7,279 8,126 7,625 6,893 9,484 7,515 8 Municipalities, counties, townships, school districts 25,640 27,984 33,962 2,458 3,867 3,858 4,673 3,826 4,589 4,955 4,227 9 Issues for new capital, total 74,804 72,441 94,050 5,890 8,253 9,075 9,279 7,966 7,660 10,709 9,797 Use of proceeds 10 Education 6,482 8.099 7,553 950 1,018 1,121 1,169 962 797 1,194 1,260 11 Transportation 6,256 4,387 7,552 472 173 319 631 276 651 252 468 12 Utilities and conservation 14,259 13,588 17,844 1,008 1,491 2,347 1,478 1,844 720 1,987 1,401 13 Social welfare 26,635 26,910 29,928 1,848 3,155 3,105 3,454 2,956 3,155 4,283 4,034 14 Industrial aid 8,349 7,821 15,415 353 584 293 782 560 553 1,524 629 15 Other purposes 12,822 11,637 15,758 1,259 1,832 1,890 1,765 1,368 1,784 1,469 2,005 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 issue or issuer, or use 11998822 11998833 11998844 Mar. Apr. May June July Aug. Sept. Oct. p 1 All issues1 84,638 120,074 132,311 14,005 11,790 12,896 19,391 11,854 14,197 11,265' 11,460 2 Bonds2 54,076 68,495 109,683 11,641 8,850 9,738 15,651 8,647 11,241 8,794 9,181 Type of offering 3 Public 44,278 47,369 73,357 11,641 8,850 9,738 15,651 8,647 11,241 8,794 9,181 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 5,660 922 1,500 8,044 2,688 2,352 2,079 1,953 6 Commercial and miscellaneous 5,442 7,540 13,726 974 1,317 639 865 1,642 911 186 898 7 Transportation 1,491 3,833 4,694 130 334 357 512 76 459 177 348 8 Public utility 12,327 9,125 10,679 500 860 1,136 585 423 835 1,042 863 9 Communication 2,390 3,642 2,997 300 0 150 125 110 1,295 367 690 10 Real estate and financial 19,604 27,502 52,980 4,077 5,418 5,956 5,520 3,709 5,379 4,943 4,429 11 Stocks3 30,562 51,579 22,628 2,364 2,940 3,158 3,740 3,207 2,956 2,471' 2,279 Type 12 Preferred 5,113 7,213 4,118 311 312 634 726 631 603 653 406 13 Common 25,449 44,366 18,510 2,053 2,628 2,524 3,014 2,576 2,353 1,818' 1,873 Industry group 14 Manufacturing 5,649 14,135 4,054 224 283 504 558 601 225 820' 279 15 Commercial and miscellaneous 7,770 13,112 6,277 472 1,019 624 1,453 562 1,288 507' 368 16 Transportation 709 2,729 589 32 522 33 236 0 79 107 113 17 Public utility 7,517 5,001 1,624 197 157 185 91 87 73 47 408 18 Communication 2,227 1,822 419 15 5 119 151 99 18 7 41 19 Real estate and financial 6,690 14,780 9,665 1,424 954 1,693 1,251 1,798 1,273 983' 1,070 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 11998844rr Mar. Apr. May June July Aug. Sept/ Oct. INVESTMENT COMPANIES1 1 Sales of own shares2 84,345 107,480 14,582 18,049 16,408 18,191 20,284 18,049 16,936 21,924 2 Redemptions of own shares3 57,100 77,032 9,412 13,500 10,069 9,836 11,502 10,837 9,963 10,653 3 Net sales 27,245 30,448 5,170 4,549 6,339 8,355 8,782 7,212 6,973 11,271 4 Assets4 113,599 137,126 157,065 164,087 178,275 186,284 195,707 201,608 203,210 218,341 5 Cash position5 8,343 11,978 13,082 15,444 15,017 15,565 16,943 17,959 18,700 21,824 6 Other 105,256 125,148 143,983 148,643 163,258 170,719 178,764 183,649 184,510 196,517 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 11998822rr 11998833rr 11998844'' Q4' Qlr Q2r Q3' Q4' Ql' Q2' Q3r 1 Corporate profits with inventory valuation and capital consumption adjustment 150.0 213.8 273.3 247.6 268.0 277.8 271.2 276.2 281.7 288.1 309.1 2 Profits before tax 169.6 205.0 237.6 227.6 247.4 247.4 227.7 228.0 220.0 218.7 228.6 3 Profits tax liability 63.1 75.2 93.6 84.0 99.1 100.6 87.4 87.4 83.4 82.3 87.4 4 Profits after tax 106.5 129.8 144.0 143.6 148.3 146.7 140.3 140.6 136.6 136.4 141.1 5 Dividends 66.9 70.8 78.1 73.1 75.3 77.5 78.9 80.7 82.0 83.1 83.9 6 Undistributed profits 39.6 59.0 65.9 70.6 73.1 69.2 61.3 60.0 54.6 53.3 57.3 7 Inventory valuation -10.3 -9.9 -5.4 -8.9 -13.0 -5.6 -1.3 -1.6 .7 2.2 4.7 8 Capita] consumption adjustment -9.2 18.8 41.0 28.9 33.5 36.0 44.8 49.8 61.1 67.2 75.9 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • February 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. Ail 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 1986 IInndduussttrryy 11998833 11998844 11998855'' Q2 Q3 Q4 Q1 Q2 Q3' Q4' Ql< 1 Total nonfarm business 304.78 354.44 384.22 349.97 361.48 368.29 371.16 387.83 388.90 388.98 402.13 Manufacturing 2 Durable goods industries 53.08 66.24 72.53 64.03 68.26 71.43 69.87 73.% 72.85 73.46 71.95 3 Nondurable goods industries 63.12 72.58 79.89 71.93 74.18 75.53 75.78 80.36 81.19 82.22 82.79 Nonmanufacturing 4 Mining 15.19 16.86 15.84 16.38 16.82 17.00 15.66 16.51 15.94 15.24 15.30 Transportation 5 Railroad 4.88 6.79 7.33 7.34 7.31 6.44 6.02 7.48 8.13 7.68 7.02 6 Air 4.36 3.56 4.42 3.53 3.72 3.65 4.20 3.66 5.20 4.64 5.96 7 Other 4.72 6.17 6.02 6.14 6.47 6.18 6.01 6.37 5.77 5.93 5.83 Public utilities 8 Electric 37.27 37.03 35.60 37.79 36.63 35.40 36.65 36.04 35.34 34.38 35.49 9 Gas and other 7.70 10.44 12.63 10.16 11.28 11.52 11.81 12.43 12.80 13.47 13.50 10 Commercial and other2 114.45 134.75 149.96 132.67 136.80 141.13 145.16 151.02 151.69 151.96 164.30 •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 Q1 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 OOOcccttt... 333111,,, 111999888555111 Aug. Sept. Oct. Aug. Sept. Oct. Aug. Sept. Oct. 1 Total 146,057 1,430 -3,380r 5,112 28,942 26,111 31,099 27,512 29,491r 25,987 Retail financing of installment sales 2 Automotive (commercial vehicles) 14,341 389 660 586 1,212 1,488 1,441 823 828 855 3 Business, industrial, and farm equipment 20,297 -37 -329 -46 1,105 1,180 1,222 1,142 1,509 1,268 Wholesale financing 4 Automotive 18,923 759 -4,746 3,716 10,471 7,853 12,252 9,712 12,599 8,536 5 Equipment 4,450 -80 6 32 882 508 494 962 502 462 6 All other 7,139 59 118 45 1,695 1,751 11,,881155 1,636 1,633 11,,777700 Leasing 7 Automotive 15,847 461 409 417 1,117 1,119 972 656 710 555 8 Equipment 38,252 231 271 381 1,048 1,215 1,178 817 944 797 9 Loans on commercial accounts receivable and factored commercial accounts receivable 15,462 -354 (>11' -662 9,994 9,654 9,749 10,348 8,977' 10,411 10 All other business credit 11,346 2 -446 643 1,418 1,343 1,976 1,416 1,789 1,333 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 • February 1986 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1985 IItteemm 11998822 11998833 11998844 May June July Aug. Sept. Oct. Nov. 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 96.8 106.4 102.4 119.2 104.4 104.6 104. f 105.9 2 Amount of loan (thousands of dollars) 69.8 69.5 73.7 78.4 79.7 89.4 74.4 76.7 77. 1' 77.2 3 Loan/price ratio (percent) 76.6 77.1 78.7 76.1 79.9 77.5 74.6 76.0 76.(K 75.2 4 Maturity (years) 27.6 26.7 27.8 26.8 27.7 27.5 24.5 26.7 26.7' 26.3 5 Fees and charges (percent of loan amount)2 2.95 2.40 2.64 2.49 2.40 2.24 2.46 2.62 2.49' 2.52 6 Contract rate (percent per annum) 14.47 12.20 11.87 11.55 11.31 10.94 10.78 10.69 10.64' 10.57 Yield (percent per annum) 7 FHLBB series* 15.12 12.66 12.37 12.01 11.75 11.34 11.24 11.17 11.09' 11.02 8 HUD series4 15.79 13.43 13.80 12.49 12.06 12.09 12.06 12.02 11.86 11.56 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5. 15.30 13.11 13.81 12.28 11.89 12.12 11.99 12.04 11.87 11.28 10 GNMA securities6 14.68 12.25 13.13 11.93 11.54 11.48 11.24 11.29 11.16 10.81 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 66,031 74,847 83,339 93,610 94,777 95,634 96,324 96,769 97,228 97,807 12 FHA/VA-insured 39,718 37,393 35,148 34,428 34,307 34,276 34,177 34,084 33,885 33,828 13 Conventional 26,312 37,454 48,191 59,182 60,470 61,359 62,147 62,685 63,343 63,979 Mortgage transactions (during period) 14 Purchases 15,116 17,554 16,721 1,703 1,904 1,918 1,921 1,739 1,767 1,624 15 Sales 2 3,528 978 0 0 251 230 101 200 n.a. Mortgage commitments1 16 Contracted (during period) 22,105 18,607 21,007 2,074 1,593 1,583 1,797 1,638 1,733 1,199 17 Outstanding (end of period) 7,606 5,461 6,384 5,589 5,062 4,517 4,245 3,974 3,840 3,330 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 Total 5,131 5,996 9,283 11,879 12,576 12,844 13,521 13,088 13,025 n.a. 19 FHA/VA 1,027 974 910 843 838 842 835 829 823 n.a. 20 Conventional 4,102 5,022 8,373 11,036 11,738 12,002 12,686 12,259 12,202 n.a. Mortgage transactions (during period) 21 Purchases 23,673 23,089 21,886 3,591 4,106 4,626 3,602 4,219 3,215 n.a. 22 Sales 24.170 19,686 18,506 3,189 3,292 4,200 2,682 4,501 3,076 n.a. Mortgage commitments9 23 Contracted (during period) 28,179 32,852 32,603 3,701 5,172 3,259 3,958 2,919 3,995 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 Q1 Q2 Q3' 1 All holders 1,631,262' 1,811,395' 2,022,521' 1,972.773' 2,022,521' 2,068,282' 2,126,905' 2,183,935 2 1- to 4-family 1,074,670 1,192,840 1,329,606' 1,296^534' 1,329,606' 1,360,325' 1,401,952' 1,443,651 3 Multifamily 145,767 156,738 170,536' 167,892' 170,536' 175,474' 178,488' 181,452 4 Commercial 300,799 349,195 410,742' 395,683' 410,742' 420,997' 435,708' 449,821 5 Farm 110,026' 112,622' 111,637' 112,664' 111,637' 111,486' 110,757' 109,011 6 Major financial institutions 1,021,327 1,108,249 1,241,197 1,214,729' 1,241,197 1,261,901 1,292,438 1,321,195 7 Commercial banks1 301,272 330,521 374,780 363,156 374,780 383,444 395,956 408,227 8 1- to 4-family 173,804 182,514 196,540 193,090 196,540 198,912 203,510 207,775 9 Multifamily 16,480 18,410 20,216 20,083 20,216 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 94,452 131,940 154,441 146,072 154,441 161,032 165,705 173,476 13 1- to 4-family 64,488 93,649 107,302 101,810 107,302 111,592 114,375 119,023 14 Multifamily 14,780 17,247 19,817 18,947 19,817 20,668 21,357 22,368 15 Commercial 15,156 21,016 27,291 25,285 27,291 28,741 29,942 31,971 16 Farm 28 28 31 30 31 31 31 114 17 Savings and loan associations 483,614 494,789 555,277 550,129 555,277 559,263 569,292 575,563 18 1- to 4-family 393,323 390,883 431,450 429,101 431,450 433,429 441,201 446,061 19 Multifamily 38,979 42,552 48,309 47,861 48,309 48,936 49,813 50,362 20 Commercial 51,312 61,354 75,518 73,167 75,518 76,898 78,278 79,140 21 Life insurance companies 141,989 150,999 156,699 155,372' 156,699 158,162 161,485 163,929 22 1- to 4-family 16,751 15,319 14,120 14,159' 14,120 13,840 13,562 13,382 23 Multifamily 18,856 19,107 18,938 18,769' 18,938 18,964 18,983 18,972 24 Commercial 93,547 103,831 111,175 109,801' 111,175 113,187 116,812 119,543 25 Farm 12,835 12,742 12,466 12,643' 12,466 12,171 12,128 12,032 26 Federal and related agencies 138,741 148,328 158,993 154,768 158,993 163,531 165,912' 166,248 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 4,888' 4,918 36 1- to 4-family 1,980 1,893 2,048 1,982 2,048 2,181 2,199' 2,251 37 Multifamily 3,248 3,001 2,768 2,767 2,768 2,697 2,689' 2,667 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 2,895 43 Farm 47,823 48,929 49,187 49,527 49,187 49,040 48,050 46,360 44 Federal Home Loan Mortgage Corporation. 4,733 7,632 10,399 9,447 10,399 11,548 12,576 13,089 45 1- to 4-family 4,686 7,559 9,654 8,841 9,654 10,642 11,288 11,457 46 Multifamily 47 73 745 606 745 906 1,288 1,632 47 Mortgage pools or trusts2 216,654 285,073 332,057 317,548 332,057 347,793 365,748 388,948 48 Government National Mortgage Association 118,940 159,850 179,981 175,770 179,981 185,954 192,925 201,026 49 1- to 4-family 116,038 155,950 175,589 171,481 175,589 181,419 188,228 196,198 50 Multifamily 2,902 3,900 4,392 4,289 4,392 4,535 4,697 4,828 51 Federal Home Loan Mortgage Corporation. 42,964 57,895 70,822 63,964 70,822 76,759 83,327 91,915 52 1- to 4-family 42,560 57,273 70,253 63,352 70,253 75,781 82,369 90,997 53 Multifamily 404 622 569 612 569 978 958 918 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 47,238 58 1- to 4-family 20,005 20,404 21,813 21,595 21,813 21,928 21,962 22,090 59 Multifamily 4,344 5,090 5,841 5,618 5,841 6,041 6,377 6,415 60 Commercial 7,011 7,351 7,559 7,844 7,559 7,681 8,014 8,192 61 Farm 8,940 9,362 9,826 9,869 9,826 10,060 10,388 10,541 62 Individual and others4 254,540' 269,745' 290,274' 285,728' 290,274' 295,057' 302,807' 307,544 63 1- to 4-family5 155,496 164,360 178,825' 175,35C 178,825' 181,904' 188,692' 192,338 64 Multifamily 36,644 38,587 41,091' 40,586' 41,091' 41,861' 42,472' 43,009 65 Commercial 30,843 35,024 40,857' 39,731' 40,857' 41,827' 42,378' 43,371 66 Farm 31,557' 31,774' 29,501' 30,061' 29,501' 29,465' 29,265' 28,826 1. Includes loans held by nondeposit trust companies but not bank trust 5. Includes estimate of residential mortgage credit provided by individuals. departments. NOTE. Based on data from various institutional and governmental sources, with 2. Outstanding principal balances of mortgages backing securities insured or some quarters estimated in part by the Federal Reserve in conjunction with the guaranteed by the agency indicated. Federal Home Loan Bank Board and the Department of Commerce. Separation of 3. Outstanding balances on FNMA's issues of securities backed by pools of nonfarm mortgage debt by type of property, if not reported directly, and conventional mortgages held in trust. Implemented by FNMA in October 1981. interpolations and extrapolations when required, are estimated mainly by the 4. Other holders include mortgage companies, real estate investment trusts, Federal Reserve. Multifamily debt refers to loans on structures of five or more state and local credit agencies, state and local retirement funds, noninsured units. pension funds, credit unions, and U.S. agencies for which amounts are small or for which separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • February 1986 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1984 1985 Dec. Mar. Apr. May June July Aug. Sept. Oct. Amounts outstanding (end of period) 1 Total 383,701 460,500 460,500 471,567 479,935 488,666 495,813 503,834 512,393 524,698 530,153 By major holder 2 Commercial banks 171,978 212,391 212,391 219,970 223,850 226,973 229,676 232,913 236,390 241,030 242,220 3 Finance companies 87,429 96,747 96,747 99,133 101,324 104,130 105,971 107,985 110,378 116,422 118,846 4 Credit unions 53,471 67,858 67,858 70,432 71,418 72,381 73,468 74,614 75,689 76,447 76,957 5 Retailers2 37,470 40,913 40,913 37,082 37,091 37,472 37,548 37,399 37,481 37,421 37,784 6 Savings and loans 23,108 29,945 29,945 32,349 33,514 34,754 35,901 37,301 38,496 39,421 40,408 1 Gasoline companies 4,131 4,315 4,315 3,820 3,834 3,918 4,075 4,316 4,467 4,346 4,241 8 Mutual savings banks 6,114 8,331 8,331 8,781 8,904 9,038 9,174 9,306 9,492 9,611 9,697 By major type of credit 9 Automobile 143,114 172,589 172,589 179,661 183,558 187,795 191,315 194,678 197,768 205,102 208,121 10 Commercial banks 67,557 85,501 85,501 89,257 90,915 92,403 94,099 95,763 96,576 98,042 98,707 11 Credit unions 25,574 32,456 32,456 33,687 34,159 34,620 35,139 35,687 36,201 36,563 36,807 12 Finance companies 49,983 54,632 54,632 56,717 58,484 60,772 62,077 63,228 64,991 70,497 72,607 13 Revolving 81,977 101,555 101,555 100,434 101,887 103,492 104,333 105,539 107,584 109,941 111,442 14 Commercial banks 44,184 60,549 60,549 63,684 65,127 66,311 66,956 68,093 69,949 72,514 73,778 15 Retailers 33,662 36,691 36,691 32,930 32,926 33,263 33,302 33,130 33,168 33,081 33,423 16 Gasoline companies 4,131 4,315 4,315 3,820 3,834 3,918 4,075 4,316 4,467 4,346 4,241 17 Mobile home 23,862 24,556 24,556 24,456 24,675 24,925 25,205 25,545 25,826 26,043 26,187 18 Commercial banks 9,842 9,610 9,610 9,425 9,432 9,445 9,480 9,493 9,550 9,600 9,570 19 Finance companies 9,547 9,243 9,243 8,981 8,992 9,016 9,061 9,146 9,163 9,170 9,177 20 Savings and loans 3,906 4,985 4,985 5,305 5,496 5,699 5,887 6,117 6,313 6,465 6,627 21 Credit unions 567 718 718 745 755 765 777 789 800 808 813 22 Other 134,748 161,800 161,800 167,016 169,815 172,454 174,960 178,072 181,215 183,612 184,403 23 Commercial banks 50,395 56,731 56,731 57,604 58,376 58,814 59,141 59,564 60,315 60,874 60,165 24 Finance companies 27,899 32,872 32,872 33,435 33,848 34,342 34,833 35,611 36,224 36,755 37,062 25 Credit unions 27,330 34,684 34,684 36,000 36,504 36,996 37,552 38,138 38,688 39,076 39,337 26 Retailers 3,808 4,222 4,222 4,152 4,165 4,209 4,246 4,269 4,313 4,340 4,361 27 Savings and loans 19,202 24,960 24,960 27,044 28,018 29,055 30,014 31,184 32,183 32,956 33,781 28 Mutual savings banks 6,114 8,331 8,331 8,781 8,904 9,038 9,174 9,306 9,492 9,611 9,697 Net change (during period) 29 Total 48,742 76,799 6,819 8,342 8,270 9,042 5,227 6,247 5,726 11,531 6,628 By major holder 30 Commercial banks 19,488 40,413 3,028 4,847 3,853 4,108 1,690 1,824 1,764 3,748 1,462 31 Finance companies 18,572 18,636 1,196 2,048 1,885 2,373 1,218 1,629 2,371 6,407 3,140 32 Credit unions 6,218 14,387 1,336 797 1,215 673 797 1,149 479 374 956 33 Retailers2 5,075 3,443 389 91 168 341 -31 112 -99 -27 97 34 Savings and loans 7,285 6,837 576 715 1,063 1,327 1,417 1,338 969 924 747 35 Gasoline companies 68 184 117 -142 -45 59 -51 21 103 -43 62 36 Mutual savings banks 1,322 2,217 177 -14 131 161 187 174 139 148 164 By major type of credit 37 Automobile 16,856 29,475 2,687 3,391 3,488 3,792 2,686 2,365 2,206 7,204 3,653 38 Commercial banks 8,002 17,944 1,275 1,767 1,546 1,589 1,488 1,025 136 1,048 599 39 Credit unions 2,978 6,882 640 381 580 325 380 550 226 180 459 40 Finance companies 11,752 9,298 772 1,243 1,362 1,878 818 790 1,844 5,976 2,595 41 Revolving 12,353 19,578 1,445 2,631 2,126 2,429 -73 856 936 1,974 1,519 42 Commercial banks 7,518 16,365 1,001 2,698 2,003 2,095 42 733 968 2,071 1,385 43 Retailers 4,767 3,029 327 75 168 275 -64 102 -135 -54 72 44 Gasoline companies 68 184 117 -142 -45 59 -51 21 103 -43 62 45 Mobile home 1,452 694 117 -11 218 186 196 324 199 168 168 46 Commercial banks 237 -232 29 -50 19 -21 -31 -22 3 61 -15 47 Finance companies 776 -608 -13 -63 13 -19 1 74 -13 -19 32 48 Savings and loans 763 1,079 88 92 175 219 217 261 204 121 114433 49 Credit unions 64 151 13 10 11 7 9 11 12 5 88 50 Other 18,081 27,052 2,570 2,331 2,438 2,635 2,418 22,,770022 2,385 2,185 1,288 51 Commercial banks 3,731 6,336 723 432 285 445 191 8888 657 568 -507 52 Finance companies 6,044 9,946 437 868 510 514 399 765 540 450 513 53 Credit unions 3,176 7,354 683 406 624 341 408 588 248 189 489 54 Retailers 308 414 62 16 0 66 33 10 36 27 25 55 Savings and loans 6,522 5,758 488 623 888 1,108 1,200 1,077 765 803 604 56 Mutual savings banks 1,322 2,217 177 -14 131 161 187 174 139 148 164 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 billion 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 Apr. May June July Aug. Sept. Oct. INTEREST RATES Commercial banks1 1 48-month new car2 16.82 13.92 13.71 n.a. 13.16 n.a. n.a. 12.72 n.a. n.a. 2 24-month personal 18.64 16.50 16.47 n.a. 16.09 n.a. n.a. 15.84 n.a. n.a. 3 120-month mobile home2 18.05 16.08 15.58 n.a. 15.03 n.a. n.a. 14.72 n.a. n.a. 4 ' Credit card 18.51 18.78 18.77 n.a. 18.74 n.a. n.a. 18.62 n.a. n.a. Auto finance companies 5 New car 16.15 12.58 14.62 11.92 11.87 12.06 12.46 10.87 8.84 9.97 6 Used car 20.75 18.74 17.85 17.78 17.84 17.77 17.49 17.57 17.31 17.21 OTHER TERMS3 Maturity (months) 7 New car 45.9 45.9 48.3 51.5 50.9 51.3 51.7 51.1 51.2 51.5 8 Used car 37.0 37.9 39.7 41.3 41.4 41.3 41.5 41.6 41.4 41.4 Loan-to-value ratio 9 New car 85 86 88 91 91 91 91 91 92 93 10 Used car 90 92 92 93 94 94 95 95 95 95 Amount financed (dollars) 11 New car 8,178 8,787 9,333 9,305 9,775 9,965 10,355 10,422 10,449 10,498 12 Used car 4,746 5,033 5,691 6,043 6,117 6,116 6,146 6,139 6,097 6,091 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 Financial Statistics • February 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' TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11997799 11998800 11998811 11998822 11998833 11998844 H2 HI H2 HI H2 HI Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 388.7 340.0 371.6 398.3 538.9 755.6 442.1 508.8 569.0 704.0 807.3 718.0 By sector and instrument 2 U.S. government 37.4 79.2 87.4 161.3 186.6 198.8 218.4 222.0 151.1 172.7 224.9 181.1 3 Treasury securities 38.8 79.8 87.8 162.1 186.7 199.0 218.8 222.1 151.2 172.9 225.0 181.2 4 Agency issues and mortgages -1.4 -.6 -.5 -.9 -.1 -.2 -.4 -.1 -.1 -.2 -.1 -.1 5 Private domestic nonfinancial sectors 351.3 260.8 284.2 237.0 352.3 556.8 223.7 286.7 417.9 531.3 582.4 536.9 6 Debt capital instruments 213.9 186.3 153.7 153.5 249.1 322.1 167.1 225.4 272.7 281.8 362.4 349.7 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 88.5 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 61.5 9 Mortgages 166.2 129.4 108.5 86.2 175.7 214.1 87.1 146.7 204.7 218.5 209.6 199.7 10 Home mortgages 121.7 93.8 71.6 50.4 115.6 139.2 50.1 96.2 135.1 144.8 133.5 136.7 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 15.1 12 Commercial 24.4 19.2 22.2 25.2 47.6 58.8 27.3 42.3 53.0 55.6 62.0 49.7 13 Farm 11.8 9.3 9.9 5.3 3.0 2.1 3.9 1.9 4.1 2.0 2.1 -1.8 14 Other debt instruments 137.5 74.5 130.5 83.6 103.3 234.8 56.6 61.3 145.2 249.5 220.0 187.2 15 Consumer credit 45.4 4.7 22.7 20.1 59.8 96.5 21.7 44.1 75.5 102.1 90.9 116.7 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 25.4 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 16.3 18 Other 29.7 27.1 33.9 14.0 18.3 35.2 12.4 13.6 23.1 23.7 46.7 28.8 19 By borrowing sector 351.3 260.8 284.2 237.0 352.3 556.8 223.7 286.7 417.9 531.3 582.4 536.9 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 71.6 21 Households 181.0 117.9 119.2 90.4 190.4 249.5 93.5 156.0 224.8 248.2 250.7 268.0 22 Farm 21.4 14.3 16.4 7.9 4.5 2.9 5.9 1.1 7.8 2.1 3.8 -7.2 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 71.4 24 Corporate 96.0 80.4 103.4 71.9 54.6 181.7 52.9 38.0 71.1 176.6 186.8 133.0 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 -7.1 26 Bonds 3.9 .8 5.4 6.7 3.8 4.1 11.0 4.6 2.9 1.1 7.0 5.2 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 -6.0 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 2.6 30 Total domestic plus foreign 408.9 367.2 398.8 414.0 557.8 757.4 463.3 524.0 591.5 726.9 787.8 710.9 Financial sectors 31 Total net borrowing by financial sectors 82.4 57.6 89.0 76.2 85.2 130.3 57.5 66.7 103.7 119.2 141.3 165.6 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 92.7 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 66.7 35 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 30.6 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 1.8 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 28.8 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 11.7 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 66.7 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 5.2 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 9.2 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 10.9 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 48.4 49 REITs -.1 -.5 -.2 * .3 .2 -.3 -.2 .3 .1 .1 All sectors 50 Total net borrowing 491.3 424.9 487.8 490.2 643.0 887.6 520.8 590.7 695.2 846.1 929.2 876.5 51 U.S. government securities 84.8 122.9 133.0 225.9 254.4 273.8 288.3 288.4 220.5 242.4 305.1 273.9 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 88.5 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 97.2 54 Mortgages 166.1 129.3 108.4 86.2 175.6 213.9 87.1 146.6 204.7 218.3 209.4 199.6 55 Consumer credit 45.4 4.7 22.7 20.1 59.8 96.5 21.7 44.1 75.5 102.1 90.9 116.7 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 21.2 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 36.3 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 43.1 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 25.9 60 Mutual funds .1 5.2 6.3 18.4 32.8 37.7 24.3 36.8 28.9 39.6 35.7 92.0 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 -66.1 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 -75.7 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 4.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates. 1982 1983 1984 1985r Transaction category, or sector 11997799 11998800 11998811 11998822 11998833 11998844 H2 HI H2 HI H2 HI 1 Total funds advanced in credit markets to domestic nonfinancial sectors 388.7 340.0 371.6 398.3 538.9 755.6 442.1 508.8 569.0 704.0 807.3 718.0 By public agencies and foreign 2 Total net advances 75.2 97.1 97.7 114.1 117.5 142.2 127.1 120.2 114.7 123.2 161.2 193.3 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 52.1 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 86.0 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 11.7 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 43.5 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 19.4 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 97.7 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 27.3 10 Foreign -4.5 23.3 16.2 22.8 27.1 43.4 25.3 27.0 27.2 29.9 56.9 48.9 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 92.7 12 Foreign 20.2 27.2 27.2 15.7 18.9 1.7 21.2 15.3 22.5 22.9 -19.5 -7.1 Private domestic funds advanced 13 Total net advances 381.6 314.9 348.5 364.8 508.1 690.0 405.9 470.0 546.1 673.3 706.8 610.3 14 U.S. government securities 91.0 107.1 115.9 203.1 226.9 237.8 252.6 247.6 206.1 213.0 262.7 221.8 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 88.5 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 33.9 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 65.7 18 Other mortgages and loans 156.7 96.3 153.8 104.6 153.0 275.6 78.2 109.4 196.7 311.7 239.5 212.1 19 LESS: Federal Home Loan Bank advances 9.2 7.1 16.2 .8 -7.0 15.7 -9.5 -12.1 -2.0 15.9 15.5 11.7 Private financial intermediation 20 Credit market funds advanced by private financial institutions 316.4 281.3 317.2 287.6 382.7 553.2 300.7 334.6 430.7 548.1 558.3 472.9 21 Commercial banking 123.1 100.6 102.3 107.2 136.1 181.9 114.5 121.6 150.6 196.0 167.9 149.6 22 Savings institutions 56.5 54.5 27.4 31.4 140.5 143.0 37.6 132.7 148.4 161.5 124.6 62.0 23 Insurance and pension funds 85.6 94.5 97.6 107.4 94.2 123.1 103.8 83.0 105.3 111.8 134.4 117.1 24 Other finance 51.2 31.7 89.9 41.5 11.9 105.1 44.8 -2.7 26.5 78.8 131.4 144.2 25 Sources of funds 316.4 281.3 317.2 287.6 382.7 553.2 300.7 334.6 430.7 548.1 558.3 472.9 26 Private domestic deposits and RPs 137.4 169.6 211.9 174.4 205.2 287.7 201.7 194.1 216.3 277.1 298.2 173.8 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 63.7 101.8 160.0 210.1 111.2 140.0 180.0 221.3 198.9 226.3 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 10.8 30 Treasury balances .4 -2.6 -1.1 6.1 -5.3 4.0 14.1 10.1 -20.8 1.7 6.4 19.4 31 Insurance and pension reserves 72.9 83.7 90.7 103.2 95.1 111.7 95.3 83.5 106.8 118.0 105.5 117.4 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 78.8 Private domestic nonfinancial investors 33 Direct lending in credit markets 99.7 46.5 72.9 88.5 142.8 192.2 93.0 135.9 149.8 174.8 209.6 210.2 34 U.S. government securities 52.5 24.6 29.3 32.1 88.3 122.8 28.9 97.5 79.1 128.3 117.3 110.0 3 3 5 6 C St 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 n n s ds -1 9 . . 4 9 -11 7 . . 0 0 - 1 3 1 . . 9 1 2 3 9 . . 9 2 - 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 6 8 0 . . 5 1 4 1 9 1 . . 2 4 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 15.7 38 Other 30.1 29.1 33.7 24.0 13.7 28.2 25.4 11.8 15.6 26.2 30.3 23.9 39 Deposits and currency 146.8 181.1 221.9 181.6 224.4 292.2 211.5 215.9 232.8 288.5 296.0 188.0 40 Currency 8.0 10.3 9.5 9.7 14.3 8.6 12.7 14.8 13.8 15.9 1.4 18.6 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 7.4 42 Small time and savings accounts 59.3 82.9 47.0 138.1 219.5 149.2 193.1 278.9 160.1 129.9 168.6 162.7 4 4 4 4 4 5 6 3 D S L M e a e o c r p n g u o e e r s i y i t t t y i s m m R i a e n P r k d s f e e o t p r e o f i u s g i n n t d s c s o h u a n r t e r s i es 3 1 6 4 1 8 . . . . 6 4 5 8 4 2 6 5 9 1 . . . . 5 8 2 1 1 3 0 2 6 7 . . . . 5 9 5 5 - - 2 2 7 3 4 . . . . 5 7 8 7 -4 - 1 7 4 4 4 . . . . 5 1 8 3 - - 4 7 4 5 7 5 . . . . 0 8 2 7 -3 - 1 2 7 6 0 . . . 9 . 3 6 0 - - 8 6 1 4 1 7 1 . . . . 0 0 0 0 - 4 1 4 2 5 7 . . . . 2 7 9 5 - 3 8 4 3 0 8 . . . . 5 3 2 8 -1 - 6 6 3 5 2 4 . . . . 6 0 7 2 - - 1 4 4 . . . . 3 3 2 8 47 Total of credit market instruments, deposits and currency 246.5 227.6 294.7 270.1 367.2 484.5 304.5 351.8 382.6 463.3 505.6 398.3 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 27.2 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 77.5 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 59.7 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 25.9 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 92.0 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 -66.1 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 40.9 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 -15.0 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 line11and 12. Also line 20less line 27 plus line 33. Also 48. Line lAine \. 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 DomesticN onfinancial Statistics • February 1986 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures' 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1985 MMeeaassuurree 11998822 11998833 11998844 Mar. Apr. May June July Aug.' Sept.' Oct.' Nov. 1 Industrial production 103.1 109.2 121.8 124.0 124.1 124.1 124.3 124.1 125.2 125.0 124.6 125.1 Market groupings 2 Products, total 107.8 113.9 127.1 130.3 130.8 131.4 131.6 131.6 133.0 133.1 132.5 133.1 3 Final, total 109.5 114.7 127.8 130.8 131.3 131.7 131.6 131.8 133.3 133.3 132.6 133.2 4 Consumer goods 101.4 109.3 118.2 119.8 119.5 120.0 120.4 120.1 121.5 121.7 121.1 121.7 5 Equipment 120.2 121.7 140.5 145.4 146.9 147.1 146.6 147.3 149.0 148.6 147.7 148.5 6 Intermediate 101.7 111.2 124.9 128.6 129.3 130.3 131.4 130.7 132.0 132.5 132.5 132.6 7 Materials 96.7 102.8 114.6 115.5 115.0 114.2 114.3 113.8 114.5 114.1 113.6 114.2 Industry groupings 8 Manufacturing 102.2 110.2 123.9 126.3 126.6 126.6 126.7 126.9 128.2 127.9 127.5 128.1 Capacity utilization (percent)2 9 Manufacturing 70.3 74.0 80.8 80.5 80.5 80.3 80.1 80.1 80.7 80.3 79.8 80.0 10 Industrial materials industries 71.7 75.3 82.3 81.4 80.9 80.1 80.1 79.5 79.9 79.4 78.9 79.1 11 Construction contracts (1977 = 100)3 111.0 137.0 149.0 162.0 161.0 162.0 142.0 164.0 163.0 166.0 169.0 160.0 12 Nonagricultural employment, total4 136.1 137.1 143.6 147.3 147.6 148.0 148.1 148.5 148.9 149.3 149.8 150.1 13 Goods-producing, total 102.2 100.1 106.1 107.5 107.6 107.5 107.3 107.2 107.3 107.1 107.5 107.6 14 Manufacturing, total 96.6 94.8 99.8 100.4 100.1 99.9 99.7 99.5 99.6 99.1 99.5 99.6 15 Manufacturing, production-worker ... 89.1 87.9 94.0 93.0 92.6 92.3 92.0 91.8 91.9 91.5 91.8 92.1 16 Service-producing 154.7 157.3 164.1 169.1 169.5 170.3 170.5 171.1 171.7 172.4 173.0 173.4 17 Personal income, total 423.9' 450.2' 494.C 517.2' 522.C 519.2' 520.7' 522.2' 523.1 525.4 528.0 530.9 18 Wages and salary disbursements 371.5R 392.5' 429.7' 452.2' 454.4' 455.9' 458.7' 459.(K 461.2 464.0 465.4 467.9 2 2 1 1 0 9 R D e is ta p i M o l s s a a a n b le u le s f a ( c p 1 t e 9 u r 7 r s 7 i o n n g = a l 1 i 0 n 0 c ) o 6 me5 2 1 1 8 4 6 6 8 4 . . . 1 4 C ' 2 1 1 9 6 7 6 2 5 . . . 0 3 8 ' ' 3 1 1 2 7 9 7 9 3 . . . 0 3 6 ' ' 3 1 1 3 8 9 9 5 7 . . . 7 3 6 ' ' 2 3 1 0 3 9 3 8 1 . . . 5 6 5 ' ' 2 3 1 3 0 9 9 7 0 . . . 7 3 2 ' ' 2 3 1 0 3 8 2 9 8 . . .8 1 9 ' ' 2 3 1 0 3 8 2 9 9 . . .9 7 7 ' ' 2 3 1 0 4 9 2 1 4 . . . 8 2 2 2 3 1 0 4 9 3 1 8 . . . 5 8 4 2 3 1 0 4 9 4 2 0. . . 1 6 6 2 3 1 0 4 9 5 3 2 . . . 7 8 3 Prices7 22 Consumer 289.1 298.4 311.1 318.8 320.1 321.3 322.3 322.8 323.5 324.5 325.5 326.6 23 Producer finished goods 280.7 285.2 291.1 292.1 293.1 294.1 294.(K 294.8 293.5 290.2 294.8 296.7 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 1. 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 Apr. May June July Aug. Sept. Oct. Nov. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 174,450 176,414 178,602 180,024 180,171 180,322 180,492 180,657 180,831 181,011 181,186 2 Labor force (including Armed Forces)1 112,383 113,749 115,763 117,596 117,600 117,009 117,543 117,551 118,077 118,400 118,313 3 Civilian labor force 110,204 111,550 113,544 115,371 115,373 114,783 115,314 115,299 115,818 116,159 116,067 4 Nonagricultural industries2 96,125 97,450 101,685 103,517 103,648 103,232 103,737 104,080 104,568 104,841 104,920 5 Agriculture 3,401 3,383 3,321 3,428 3,312 3,138 3,126 3,092 2,976 3,026 3,008 Unemployment 6 Number 10,678 10,717 8,539 8,426 8,413 8,413 8,451 8,127 8,274 8,291 8,140 7 Rate (percent of civilian labor force) ... 9.7 9.6 7.5 7.3 7.3 7.3 7.3 7.0 7.1 7.1 7.0 8 Not in labor force 62,067 62,665 62,839 62,428 62,571 63,313 62,949 63,106 62,754 62,611 62,873 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 89,566 90,196 94,461 97,120 97,421 97,473 97,707 97,977 98,217' 98,571' 98,753 10 Manufacturing 18,781 18,434 19,412 19,467 19,426 19,398 19,351 19,362 19,279' 19,342' 19,372 11 Mining 1,128 952 974 982 982 974 969 965 962' 958 951 12 Contract construction 3,905 3,948 4,345 4,641 4,658 4,638 4,660 4,688 4,721' 4,745' 4,750 13 Transportation and public utilities 5,082 4,954 5,171 5,278 5,301 5,295 5,302 5,282 5,317' 5,326' 5,350 14 Trade 20,457 20,881 22,134 23,013 23,140 23,193 23,226 23,305 23,344' 23,438' 23,416 15 Finance 5,341 5,468 5,682 5,858 5,888 5,906 5,932 5,959 5,987' 6,008' 6,040 16 Service 19,036 19,694 20,761 5,278 5,270 5,276 5,284 5,314 5,338 5,356 5,376 17 Government 15,837 15,870 15,987 16,158 16,213 16,213 16,341 16,343 16,452' 16,509' 16,508 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 • February 1986 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1984 1985 1984 1985 1984 1985 Q4 Ql Q2 Q3' Q4 Ql Q2 Q3 Q4 Ql Q2' Q3' Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 123.1 123.8 124.2 124.8 151.7 152.8 154.0 155.1 81.2 81.0 80.7 80.5 2 Mining 108.3 110.1 110.0 108.2 133.1 133.4 133.6 133.9 81.3 82.6 82.3 80.8 3 Utilities 111.1 114.2 113.6 111.4 133.0 133.7 134.5 135.4 83.5 85.5 84.4 82.3 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 ... 107.0 107.5 108.1 109.5 131.4 131.6 132.0 132.4 81.5 81.6 81.9 82.7 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 114.5 115.4 114.5 114.1 140.7 141.6 142.5 143.4 81.4 81.5 80.4 79.6 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 76.0 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 110.9 110.9 111.2 113.6 136.8 137.3 137.8 138.2 81.0 80.7 80.7 82.2 11 Textile, paper, and chemical.. 110.7 111.6 111.0 114.1 136.2 136.7 137.0 137.4 81.3 81.7 81.0 83.0 12 Paper 126.2 126.3 121.8 123.8 135.3 136.1 136.2 136.3 93.3 92.8 89.4 90.8 13 Chemical 110.9 113.2 112.6 114.6 141.1 141.5 142.0 142.6 78.6 80.0 79.3 80.4 14 Energy materials 101.3 105.0 105.2 103.0 119.7 120.0 120.3 120.6 84.6 87.5 87.5 85.4 Previous cycle1 Latest cycle2 1984 1985 High Low High Low Nov. Mar. Apr. May June July Aug/ Sept/ Oct/ Nov. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 81.3 81.0 80.8 80.6 80.5 80.2 80.7 80.4 79.9 80.1 16 Mining 92.8 87.8 95.2 76.9 81.7 82.8 82.1 82.2 82.7 81.2 80.9 80.4 79.1 78.7 17 Utilities 95.6 82.9 88.5 78.0 84.3 85.0 84.6 84.5 84.1 81.9 81.5 83.4 83.4 83.6 18 Manufacturing 87.7 69.9 86.5 68.0 81.2 80.5 80.5 80.3 80.1 80.1 80.7 80.3 79.8 80.0 19 Primary processing ... 91.9 68.3 89.1 65.1 81.7 81.8 82.1 81.5 82.0 82.3 82.9 82.9 83.1 83.4 20 Advanced processing . 86.0 71.1 85.1 69.5 80.9 79.8 79.7 79.8 79.3 79.1 79.6 79.1 78.2 78.5 21 Materials 92.0 70.5 89.1 68.4 81.5 81.4 80.9 80.1 80.1 79.5 79.9 79.4 78.9 79.1 22 Durable goods 91.8 64.4 89.8 60.9 80.2 78.9 78.3 76.6 76.5 75.8 76.6 75.4 75.0 75.3 23 Metal materials 99.2 67.1 93.6 45.7 68.6 69.8 69.9 66.2 69.0 66.4 69.4 67.3 69.4 70.7 24 Nondurable goods .... 91.1 66.7 88.1 70.6 80.9 80.2 80.2 80.8 81.0 81.7 82.1 82.8 82.3 82.3 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 81.1 81.4 80.7 80.9 81.4 82.7 82.8 83.6 82.9 83.0 26 Paper 98.4 70.6 97.3 79.9 92.5 92.1 89.1 88.8 90.5 91.7 90.1 90.7 88.5 89.8 27 Chemical 92.5 64.4 87.9 63.3 78.8 79.5 79.2 79.5 79.2 80.1 79.8 81.2 81.1 80.7 28 Energy materials 94.6 86.9 94.0 82.2 84.8 88.4 87.6 87.5 87.3 85.8 85.1 85.2 84.5 84.7 1. Monthly high 1973; monthlv 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 1984 1985 pro- 11998844 GGrroouuppiinngg por- avg. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct.'' Nov.e Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 121.8 123.4 123.3 123.6 123.7 124.0 124.1 124.1 124.3 124.1 125.2 125.0 124.6 125.1 ? 57.72 127.1 129.9 129.8 129.6 129.8 130.3 130.8 131.4 131.6 131.6 133.0 133.1 132.5 133.1 Final products 44.77 127.8 130.7 130.6 130.4 130.4 130.8 131.3 131.7 131.6 131.8 133.3 133.3 132.6 133.2 4 25.52 118.2 119.6 119.7 118.8 119.1 119.8 119.5 120.0 120.4 120.1 121.5 121.7 121.1 121.7 5 Equipment 19.25 140.5 145.5 144.9 145.7 145.3 145.4 146.9 147.1 146.6 147.3 149.0 148.6 147.7 148.5 6 12.94 124.9 127.2 127.3 126.8 127.7 128.6 129.3 130.3 131.4 130.7 132.0 132.5 132.5 132.6 7 Materials 42.28 114.6 114.6 114.6 115.4 115.4 115.5 115.0 114.2 114.3 113.8 114.5 114.1 113.6 114.2 Consumer goods 8 Durable consumer goods 6.89 112.6 113.3 113.1 112.8 112.8 113.5 111.5 111.8 111122..00 111111..33 111144..00 111122..99 111111..66 111133..11 9 2.98 109.8 110.2 111.6 114.2 115.4 115.1 113.1 113.6 113.4 115.0 120.0 117.8 113.1 115.7 10 1.79 103.0 103.1 104.7 112.5 111.7 110.5 109.0 109.6 109.4 113.7 120.2 116.6 108.7 112.7 11 1.16 93.2 89.7 95.6 102.5 100.7 101.3 100.5 98.1 97.0 101.1 101.3 98.8 92.3 93.9 1? .63 121.2 127.8 121.5 131.1 132.0 127.5 124.7 130.9 132.3 137.2 155.4 149.7 139.1 N Auto parts and allied goods 1.19 120.1 121.1 122.1 116.8 121.1 122.0 119.4 119.6 119.4 116.8 119.6 119.5 119.8 112200..22 14 3.91 114.8 115.8 114.3 111.6 110.9 112.2 110.2 110.4 110.9 108.4 109.5 109.3 110.4 111.2 15 Appliances, A/C and TV 1.24 136.2 137.4 137.2 126.1 127.1 131.8 126.9 129.3 131.5 121.6 124.5 123.7 124.3 126.5 16 1.19 137.5 138.4 138.2 126.6 127.2 131.8 127.1 128.7 131.7 123.2 125.5 125.6 126.6 17 Carpeting and furniture .96 117.6 118.1 114.1 112.7 117.9 117.7 118.1 116.9 119.6 122.2 119.5 120.2 120.4 18 Miscellaneous home goods 1.71 97.8 99.0 97.9 100.6 95.1 95.0 93.7 93.1 91.2 91.2 93.0 92.7 94.7 19 18.63 120.2 121.8 122.1 121.1 121.4 122.1 122.5 123.1 123.5 123.4 124.2 124.9 124.6 124.8 70 15.29 125.0 127.4 127.7 126.6 126.9 127.9 128.5 129.0 129.6 129.3 130.3 130.8 130.6 130.6 ? ? 1 ? 7 7 . . 4 8 9 0 1 12 2 6 3 . . 2 9 1 1 2 2 7 7 . . 5 6 1 12 2 9 6 . . 1 5 1 12 2 7 6 . . 1 0 1 12 2 7 6 . . 8 0 1 1 2 2 7 8 . . 7 0 1 1 2 2 7 9 . . 6 4 1 1 2 2 9 8 . . 1 9 1 1 2 3 8 0 . . 7 5 1 13 2 0 8 . . 1 5 1 1 2 3 9 0 . . 7 8 1 1 3 3 0 1 . . 4 2 1 1 3 3 1 0 . . 2 0 113311..77 73 Consumer chemical products .... 2.75 137.4 143.3 142.7 142.9 143.2 145.1 145.1 147.3 145.4 145.4 149.1 151.8 151.7 74 Consumer paper products 1.88 138.4 141.5 141.8 141.2 138.1 141.7 142.0 143.7 144.6 144.9 143.9 144.7 144.4 75 Consumer energy 2.86 101.4 103.0 100.7 99.9 101.5 101.9 101.5 102.1 102.2 101.5 101.8 100.5 102.8 76 1.44 89.3 89.9 87.7 85.1 84.9 87.0 90.0 90.2 88.8 89.2 91.1 84.8 89.2 27 Residential utilities 1.42 113.7 116.3 113.9 115.0 118.4 117.1 113.2 114.4 115.9 114.0 112.7 116.5 Equipment 78 18.01 139.6 144.6 143.9 145.5 145.6 146.1 147.7 147.9 147.4 147.9 149.7 149.3 148.8 149.9 29 Business equipment 14.34 134.9 139.8 138.4 140.4 140.0 140.2 142.0 141.9 140.7 141.3 143.0 142.1 141.1 141.9 30 Construction, mining, and farm .... 2.08 66.6 68.2 68.5 68.8 68.3 67.1 68.4 67.4 67.7 68.6 67.2 67.0 66.8 31 Manufacturing 3.27 109.4 112.4 111.5 111.6 112.3 112.0 112.4 113.1 111.9 113.5 115.1 114.8 113.9 111144..33 V 1.27 79.2 83.8 84.5 82.5 81.8 79.6 81.8 82.8 84.1 85.6 84.5 85.1 85.9 86.3 33 5.22 209.2 217.1 214.5 217.4 217.0 218.9 221.8 222.8 219.6 219.5 222.8 219.3 216.3 217.2 34 Transit 2.49 98.6 102.9 100.9 106.7 104.9 104.5 106.0 102.9 103.4 103.3 106.0 108.3 109.6 111.6 35 Defense and space equipment 3.67 157.9 163.3 165.3 165.3 167.3 169.0 170.1 171.2 173.4 173.9 175.5 177.5 178.7 181.5 36 5.95 114.0 115.7 114.7 116.2 115.7 116.9 117.4 118.1 111199..22 111199..44 112211..55 112211..55 112211..11 112200..88 37 6.99 134.2 137.1 138.0 135.9 137.9 138.6 139.4 140.7 141.7 140.3 140.9 141.9 142.3 38 5.67 137.9 140.9 141.4 140.2 141.1 141.9 143.4 144.4 146.1 144.4 145.1 145.7 145.4 39 Commercial energy products 1.31 118.0 120.4 122.9 117.1 124.1 124.5 122.4 124.6 122.7 122.7 122.5 125.7 128.6 40 20.50 122.3 123.9 123.4 124.2 123.3 123.3 122.8 120.7 120.8 120.2 121.8 112200..22 112200..00 112200..88 41 4.92 98.0 99.1 99.8 102.6 102.2 102.1 101.8 100.1 98.7 98.3 100.0 99.0 97.4 100.4 4? Equipment parts 5.94 164.5 169.1 168.8 166.7 164.2 163.3 161.1 157.8 157.3 157.0 158.7 156.5 155.3 155.0 43 Durable materials n.e.c 9.64 108.6 108.7 107.4 109.1 109.0 109.6 110.0 108.2 109.6 108.6 110.2 108.7 109.8 110.2 44 Basic metal materials 4.64 86.4 85.2 84.0 83.5 84.1 85.1 86.6 82.0 85.0 82.5 85.1 82.8 85.5 45 Nondurable goods materials 10.09 111.2 110.7 110.7 110.9 111.4 110.3 110.4 111.3 111.8 112.8 113.5 114.5 114.0 114.2 4466 7.53 111.6 110.5 110.1 111.5 112.1 111.3 110.5 110.9 111111..77 111133..55 113.8 111155..00 111144..22 111144..44 47 1.52 101.5 93.7 91.2 90.3 93.5 93.0 94.1 95.0 97.3 100.2 104.4 103.4 102.5 48 1.55 126.5 125.1 127.2 127.5 126.0 125.4 121.3 120.9 123.3 125.0 122.8 123.7 120.8 49 4.46 109.9 111.1 110.6 113.3 113.5 112.7 112.3 112.9 112.6 114.0 113.8 115.9 115.9 50 Miscellaneous nondurable materials .. 2.57 109.8 111.1 112.1 109.2 109.4 107.2 110.1 112.5 112.0 110.8 112.7 113.2 113.5 51 11.69 104.0 101.5 102.4 103.9 104.9 106.2 105.3 105.3 105.1 103.5 102.7 102.8 102.1 102.5 5? Primary energy 7.57 107.5 104.1 106.0 107.0 107.6 110.2 107.9 107.8 109.0 107.4 106.4 106.0 104.5 53 Converted fuel materials 4.12 97.6 96.8 96.0 98.2 100.0 99.0 100.6 100.6 98.1 96.2 95.9 97.0 97.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • February 1986 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1984 1985 SIC pro- 1984 Grouping code por- avg. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct.'' Nov Index (1977 = 100) MAJOR INDUSTRY 15.79 110.9 110.1 109.9 111.4 111.9 111.8 111.1 111.3 111.6 109.4 109.1 109.8 108.8 108.8 9.83 110.9 108.8 108.9 110.5 109.5 110.5 109.6 109.8 110.6 108.7 108.3 107.7 106.0 105.6 3 Utilities 5.96 110.9 112.1 111.6 113.0 115.8 113.9 113.6 113.7 113.4 110.7 110.3 113.2 113.4 114.0 84.21 123.9 126.0 125.8 125.9 125.8 126.3 126.6 126.6 126.7 126.9 128.2 127.9 127.5 128.1 35.11 122.5 123.8 123.4 123.2 123.8 123.9 124.3 124.7 125.5 125.6 126.6 127.0 127.0 127.1 49.10 124.8 127.5 127.4 127.8 127.2 128.0 128.2 127.9 127.6 127.9 129.4 128.5 127.9 128.9 Mining 7 Metal 10 .50 77.0 75.5 69.3 70.5 74.5 83.6 81.2 78.3 77.5 60.9 73.1 71.4 73.1 8 Coal 11.12 1.60 127.6 113.1 116.2 118.5 121.5 131.9 128.5 128.7 134.0 128.0 127.7 126.3 118.9 123.0 13 7.07 109.1 109.8 109.8 110.7 108.2 106.8 106.5 106.9 106.9 106.9 105.5 105.1 104.2 102.6 10 Stone and earth minerals 14 .66 116.1 115.3 113.2 118.5 119.8 118.7 118.5 118.7 117.9 116.6 117.7 117.9 118.1 Nondurable manufactures 11 Foods 20 7.96 127.1 128.7 129.0 128.2 129.4 128.5 130.8 131.4 131.8 113322..22 113322..66 113322..88 113322..00 12 Tobacco products 21 .62 100.7 102.7 107.4 97.2 103.8 103.4 98.4 95.7 98.9 96.0 97.7 97.8 97.6 13 Textile mill products 22 2.29 103.7 97.1 94.7 93.6 98.5 99.4 99.0 100.0 103.3 104.1 106.3 106.7 106.0 14 Apparel products 23 2.79 102.8 101.1 102.5 102.6 103.1 101.3 100.2 100.3 99.2 100.6 100.4 101.8 102.3 15 Paper and products 26 3.15 127.3 127.7 128.8 128.3 126.4 126.9 125.1 124.1 127.1 129.0 127.5 128.6 128.0 16 Printing and publishing 27 4.54 147.9 153.5 151.2 150.4 150.3 152.6 154.2 155.4 156.7 154.3 156.3 155.9 156.3 156.5 17 Chemicals and products 28 8.05 121.7 124.3 123.4 125.7 125.8 126.5 125.8 126.7 126.4 126.4 128.2 129.5 129.5 18 Petroleum products 29 2.40 87.4 86.2 84.7 84.1 84.0 84.7 87.3 87.4 87.1 88.3 88.2 85.9 88.3 8888..66 19 Rubber and plastic products 30 2.80 143.2 146.6 146.6 145.9 145.7 144.1 144.9 144.3 145.5 145.6 148.0 148.6 148.6 20 Leather and products 31 .53 76.7 71.5 71.4 69.1 69.2 69.4 69.9 71.0 71.5 72.2 72.7 73.3 71.5 Durable manufactures 21 Lumber and products 24 2.30 109.1 109.5 109.4 109.2 109.1 109.5 111100..99 111122..22 111133..55 111133..00 111144..88 111155..99 25 1.27 136.7 139.8 138.0 136.5 139.0 139.2 141.0 142.0 141.9 145.3 144.3 144.2 114433..44 23 Clay, glass, stone products 32 2.72 112.3 113.6 111.8 112.7 110.5 111.4 114.5 116.3 116.1 115.1 116.2 116.7 115.6 24 Primary metals 33 5.33 82.4 80.9 78.4 81.7 80.2 81.8 81.4 76.4 78.3 79.0 82.0 80.3 83.2 84.7 331.2 3.49 73.5 71.1 68.9 71.0 68.5 73.2 71.9 65.4 67.6 68.7 71.6 69.7 74.6 26 Fabricated metal products 34 6.46 102.8 105.4 105.9 106.4 107.6 108.6 109.1 108.3 107.4 107.3 107.8 107.5 108.0 110088..22 27 Nonelectrical machinery 35 9.54 142.0 145.8 144.6 145.0 144.9 146.5 148.9 149.1 145.6 147.5 149.2 147.4 144.6 144.8 28 Electrical machinery 36 7.15 172.4 178.9 180.2 176.0 173.2 173.1 168.9 169.3 169.5 165.7 166.1 165.1 165.5 166.3 29 Transportation equipment 37 9.13 113.6 116.0 117.8 120.4 120.5 120.8 120.7 120.9 121.8 123.7 126.8 126.2 123.5 126.7 30 Motor vehicles and parts 371 5.25 105.6 107.5 109.5 113.0 112.5 111.3 110.9 110.5 110.5 112.8 116.8 115.3 110.0 113.9 31 Aerospace and miscellaneous 372-6.9 3.87 124.4 127.5 129.0 130.5 131.4 133.7 134.1 134.9 137.1 138.5 114400..44 114411..11 114411..88 114444..22 38 2.66 136.9 138.6 138.9 138.7 138.7 139.0 138.5 139.9 140.7 141.1 141.8 138.9 138.0 139.4 33 Miscellaneous manufactures 39 1.46 98.0 98.6 97.2 99.0 96.4 96.0 98.3 98.3 96.8 95.9 97.2 96.4 97.5 4.17 116.8 118.7 117.5 118.9 121.9 119.5 119.1 119.5 119.4 117.5 111166..77 120.6 112200..55 112211..22 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 333333555555 596.0 745.6 759.2 756.5 761.3 764.2 769.5 773.3 774.4 773.4 769.0 778.7 777.6 776.0 778.0 333333666666 472.7 593.7 605.2 601.8 606.5 608.7 613.3 616.2 616.2 613.9 610.1 618.6 617.3 615.4 617.4 333333777777 309.2 356.5 359.0 360.0 358.8 360.9 364.6 364.7 365.1 364.0 361.7 366.2 365.2 364.2 365.4 333333888888 163.5 237.6 246.7 242.3 247.6 247.8 248.7 251.4 251.1 249.9 248.4 252.4 252.1 251.3 252.0 333333999999 112233..33 151.8 154.0 154.6 154.9 155.5 156.3 157.1 158.2 159.5 158.9 160.1 160.3 160.6 160.6 • 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. 1985 IItteemm 11998833 Jan. Feb. Mar. Apr. May June July Aug.' Sept.' Oct. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,000 1,605 1,682 1,635 1,624 1,741 1,704 1,778 1,712 1,694 1,784 1,808 1,688 2 1-family 546 902 922 903 927 993 948 933 961 967 990 949 %5 3 2-or-more-family 454 703 759 732 697 748 756 845 751 727 794 859 723 4 Started 1,062 1,703 1,749 1,603' 1,662' 1,785' 1,824' 1,883' 1,834' 1,976' 1,945 2,052 2,042 1-family 663 1,067 1,084 1,060 1,135 1,168 1,155 1,039 1,031 1,062 1,059 975 1,125 6 2-or-more-family 400 635 665 789 512 721 778 642 670 601 681 641 636 7 Under construction, end of period1 720 1,003 1,051 1,071 1,066 1,063 1,088 1,089 1,075 1,073 1,084 1,063 1,090 8 1-family 400 524 556 572 580 578 583 582 575 578 583 567 579 9 2-or-more-family 320 479 494 499 485 485 505 507 500 495 502 495 512 10 Completed 1,005 1,390 1,652 1,719 1,794 1,685 1,641 1,627 1,789 1,725 1,721 1,7% 1,521 11 1-family 631 924 1,025 1,107 1,082 1,043 1,074 1,020 1,097 1,048 1,019 1,110 1,054 12 2-or-more-family 374 466 627 612 712 642 567 607 692 677 702 686 467 13 Mobile homes shipped 240 296 295 273 276 283 287 287 270 286 290 278 298 Merchant builder activity in 1-family units 14 Number sold 413 622 639 634 676 699 649 682 710 748' 708 676 623 15 Number for sale, end of period1 255 304 358 356 360 357 356 356 354 351' 348 350 355 Price (thousands of dollars)2 Median 16 Units sold 69.3 75.5 80.0 82.5 82.0 84.2 85.6 80.1 86.3 82.1' 83.3 84.7 85.5 17 Units sold 83.8 89.9 97.5 98.3 96.2 100.9 104.7 98.1 99.6 99.4' 99.2 103.2 102.4 EXISTING UNITS (1-family) 18 Number sold 1,991 2,719 2,868 3,000 2,880 3,030 3,040 3,040 3,060 3,140 3,500 3,450 3,550 Price of units sold (thousands of dollars)2 19 Median 67.7 69.8 72.3 73.8 73.5 74.2 74.5 75.0 76.2 77.4 7766..99 7755..55 7744..88 20 Average 80.4 82.5 85.9 87.7 87.2 88.6 89.7 90.1 91.5 93.5 93.0 91.1 90.8 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 236,935 268,730 312,989 341,038 334,254 333,723 341,861 339,943 343,837 344,206' 343,246 346,084 346,290 ?? Private 186,091 218,016 257,802 283,688 276,452 274,575 281,988 276,420 278,939 279,521' 279,371 282,505 282,683 73 Residential 80,609 121,309 145,058 155,260 146,042 146,195 146,539 142,254 147,158 148,699' 146,858 148,915 150,5% 24 Nonresidential, total 105,482 96,707 112,744 128,428 130,410 128,380 135,449 134,166 131,781 130,822' 132,513 133,590 132,087 Buildings 75 Industrial 17,346 12,863 13,746 15,195 15,815 14,585 17,283 16,443 15,170 15,384' 15,118 1155,,556677 15,429 26 Commercial 37,281 35,787 48,102 58,524 58,922 59,382 61,219 60,064 58,290 57,956 59,910 61,227 60,820 27 Other 10,507 11,660 12,298 11,889 12,054 11,245 12,663 12,929 12,786 12,578 12,957 12,769 12,249 28 Public utilities and other 40,348 36,397 38,598 42,820 43,619 43,168 44,284 44,730 45,535 44,904' 44,528 44,027 43,589 29 Public 50,843 50,715 55,186 57,350 57,802 59,148 59,873 63,523 64,897 64,686' 63,875 63,580 63,606 30 Military 2,205 2,544 2,839 2,969 3,036 3,078 3,166 3,349 3,426 3,364 2,966 3,008 3,354 31 Highway 13,293 14,143 16,295 17,759 18,416 19,176 19,920 22,314 21,093 19,589 20,224 19,585 19,180 32 Conservation and development 5,029 4,822 4,656 4,645 4,674 4,727 4,393 5,051 5,410 5,075 4,824 5,254 4,921 33 Other 30,316 29,206 31,396 31,977 31,676 32,167 32,394 32,809 34,968 36,658' 35,861 35,733 36,151 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 • February 1986 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted Change from 12 Change from 3 months earlier months earlier (at annual rate) Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm NNNooovvv... 1984 1985 1985 111999888555 11998844 11998855 (((111999666777 NNoovv.. NNoovv.. === 111000000)))111 Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. CONSUMER PRICES2 1 All items 4.0 3.6 3.0 4.1 3.3 2.3 .2 .2 .2 .3 .6 326.6 2 Food 4.0 2.3 3.7 2.6 -.9 1.8 .1 .0 .3 .2 .7 311.0 3 Energy items .5 .8 -.7 -.8 9.6 -4.3 -.3 -.6 -.2 -.8 .9 425.1 4 All items less food and energy 4.7 4.4 3.5 5.5 3.4 3.5 .3 .3 .2 .5 .4 320.4 5 Commodities 3.3 2.2 .9 6.6 -1.4 .8 -.2 .1 .3 .4 .2 262.7 6 Services 5.5 5.7 5.0 5.0 6.4 5.0 .5 .5 .2 .6 .6 384.8 PRODUCER PRICES 7 Finished goods 1.9 1.5 1.1 .5 1.7 -2.4 .3 -.3 -.6 .9 .8 296.7 8 Consumer foods 3.9 .0 3.3 -3.0 -8.1 -1.6 l.(K -.5' -.9 1.4 1.6 272.0 9 Consumer energy -3.8 -2.0 5.6 -21.3 27.3 -12.8 — 1.5' -1.7' -.1 -.2 3.1 732.9 10 Other consumer goods 2.3 2.8 -.2 6.5 1.4 -.2 .5' .0 -.5 .8 .1 255.1 11 Capital equipment 2.2 2.5 -1.1 6.2 1.6 -1.2 .1 .2 -.6 1.0 .1 303.8 12 Intermediate materials3 1.9 -.5 1.2 -2.5 1.1 -1.2 -.3 -.1 .1 .0 .2 324.5 13 Excluding energy 2.4 -.2 1.5 -1.0 1.2 -1.2 -.1 -.1 -.1 .0 .0 304.2 Crude materials 14 Foods .4 -6.4 10.6 -24.9 -20.4 -19.9 -1.1' -3.6r -.7 6.3 5.8 236.7 15 Energy -.4 -4.6 -7.6 -13.1 4.4 -4.7 -.3' -1.4' .4 -.3 -.1 742.9 16 Other -1.8 -4.1 -10.7 -13.3 3.1 -4.2 .8 -1.2 -.6 .5 -.2 244.9 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 11998822rr 11998833'' 11998844'' Q3' Q4' Ql' Q2' Q3' GROSS NATIONAL PRODUCT 1 Total 3,166.0 3,401.6 3,774.7 3,812.2 3,852.5 3,917.5 3,960.6 4,016.9 By source 2 Personal consumption expenditures 2,050.7 2,229.3 2,423.0 2,439.0 2,480.1 2,525.0 2,563.3 2,606.1 3 Durable goods 252.7 289.6 331.1 331.1 341.5 351.5 356.5 376.0 4 Nondurable goods 771.0 817.0 872.4 876.6 883.1 895.7 910.2 914.5 5 Services 1,027.0 1,122.7 1,219.6 1,231.3 1,255.4 1,277.8 1,296.6 1,315.6 6 Gross private domestic investment 447.3 501.9 674.0 687.9 676.2 657.6 672.8 666.1 7 Fixed investment 471.8 508.3 607.0 619.5 637.2 639.1 657.3 665.9 8 Nonresidential 366.7 356.3 427.9 435.9 458.1 459.6 474.2 478.5 9 Structures 143.3 126.1 147.6 151.3 157.2 166.1 169.7 170.4 10 Producers' durable equipment 223.4 230.2 280.2 284.5 300.9 293.5 304.5 308.1 11 Residential structures 105.1 152.0 179.1 183.7 179.1 179.4 183.1 187.4 12 Change in business inventories -24.5 -6.4 67.1 68.3 39.0 18.5 15.5 .2 13 Nonfarm -23.1 .8 58.0 62.8 36.4 14.2 10.8 3.1 14 Net exports of goods and services 26.3 -5.3 -59.2 -61.9 -72.2 -42.3 -70.3 -87.8 15 Exports 361.9 354.1 384.6 391.4 389.5 379.6 369.2 363.2 16 Imports 335.6 359.4 443.8 453.3 461.7 421.9 439.5 451.0 17 Government purchases of goods and services 641.7 675.7 736.8 747.3 768.4 777.2 794.8 832.5 18 Federal 272.7 284.8 312.9 318.5 332.9 334.4 337.8 364.8 19 State and local 369.0 390.9 423.9 428.8 435.5 442.8 457.1 467.7 By major type of product 70 Final sales, total 3,190.5 3,408.0 3,707.6 3,743.9 33,,881133..55 3,899.0 33,,994455..00 44,,001166..77 21 Goods 1,319.1 1,394.6 1,585.8 1,595.9 1,604.0 1,628.3 1,636.1 1,650.7 7.7. Durable 527.5 573.4 681.1 682.2 703.4 706.2 705.9 714.8 73 Nondurable 791.6 821.2 904.8 913.7 900.6 922.1 930.2 935.9 7.4 Services 1,547.5 1,678.0 1,806.6 1,823.8 1,855.6 1,887.6 1,908.2 1,939.9 25 Structures 299.4 328.9 382.2 392.6 392.9 401.5 416.3 426.2 26 Change in business inventories -24.5 -6.4 67.1 68.3 39.0 18.5 15.5 .2 27 Durable goods -16.8 -.8 37.0 39.4 29.3 16.9 1.8 -6.4 28 Nondurable goods -7.7 -5.5 30.1 28.9 9.7 1.6 13.7 6.6 29 MEMO: Total GNP in 1982 dollars 3,166.0 3,275.2 3,492.0 3,510.4 3,515.6 3,547.8 3,557.4 3,584.1 NATIONAL INCOME 30 Total 2,518.4 2,718.3 3,039.3 3,064.2 3,104.4 3,155.3 3,192.2 3,228.0 31 Compensation of employees 1,907.0 2,025.9 2,221.3 2,241.2 2,278.5 2,320.4 2,356.9 2,385.2 32 Wages and salaries 1,586.1 1,675.4 1,835.2 1,852.8 1,884.4 1,917.7 1,947.6 1,970.1 33 Government and government enterprises 305.9 324.2 346.1 349.2 354.7 362.6 367.4 372.6 34 Other 1,280.2 1,351.6 1,488.9 1,503.7 1,529.8 1,555.1 1,580.2 1,597.5 35 Supplement to wages and salaries 320.9 350.5 386.2 388.4 394.0 402.7 409.4 415.1 36 Employer contributions for social insurance 157.3 171.0 192.8 194.0 196.8 201.8 204.6 206.7 37 Other labor income 163.6 179.5 193.4 194.4 197.2 200.9 204.8 208.4 38 Proprietors' income1 175.5 192.3 233.7 232.3 232.9 239.4 240.9 237.5 39 Business and professional1 150.9 178.0 201.6 204.5 206.3 212.9 218.1 225.3 40 Farm1 24.6 14.3 32.1 27.8 26.6 26.5 22.8 12.2 41 Rental income of persons2 13.6 12.8 10.8 10.0 9.7 11.0 13.8 14.5 42 Corporate profits1 150.0 213.8 273.3 271.2 276.2 281.7 288.1 309.1 43 Profits before tax3 169.6 205.0 237.6 227.7 228.0 220.0 218.7 228.6 44 Inventory valuation adjustment -10.4 -10.0 -5.4 -1.3 -1.6 .7 2.2 4.7 45 Capital consumption adjustment -9.2 18.8 41.0 44.8 49.8 61.1 67.2 75.9 46 Net interest 272.3 273.6 300.2 309.5 307.0 302.9 292.4 281.8 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 • February 1986 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1985 Account 1982' 1983' 1984' Q3' Q4' QL' Q2' PERSONAL INCOME AND SAVING 1 Total personal income 2,670.8 2,836.4 3,111.9 3,144.2 3,186.2 3,240.9 3,280.1 2 Wage and salary disbursements 1,586.1 1,675.8 1,834.9 1,852.9 1,883.9 1,917.6 1.948.6 3 Commodity-producing industries 511.7 523.0 577.9 583.2 591.2 600.1 604.7 4 Manufactunng 384.0 397.4 438.9 442.6 449.0 453.5 454.9 5 Distributive industries 384.2 404.2 441.6 446.1 453.0 459.8 467.4 6 Service industries 384.4 424.4 469.4 474.4 485.5 495.2 508.1 7 Government and government enterprises 305.9 324.2 346.1 349.2 354.1 362.5 368.4 8 Other labor income 163.6 179.5 193.4 194.4 197.2 200.9 204.8 9 Proprietors' income1 175.5 192.3 233.7 232.3 232.9 239.4 240.9 10 Business and professional1 150.9 178.0 201.6 204.5 206.3 212.9 218.1 11 Farm1 24.6 14.3 32.1 27.8 26.6 26.5 22.8 12 Rental income of persons2 13.6 12.8 10.8 10.0 9.7 11.0 13.8 13 Dividends 63.9 68.0 74.6 75.3 76.9 77.9 78.7 14 Personal interest income 369.7 385.7 442.2 456.8 461.3 462.8 460.5 15 Transfer payments 410.6 442.2 454.7 456.0 459.2 477.6 481.0 16 Old-age survivors, disability, and health insurance benefits.. 204.5 221.7 235.7 236.0 249.2 250.7 241.8 17 LESS: Personal contributions for social insurance 112.3 119.8 132.4 133.4 146.3 148.3 134.9 18 EQUALS: Personal income 2,670.8 2,836.4 3,111.9 3,144.2 3,240.9 3,280.1 3,186.2 19 LESS: Personal tax and nontax payments 409.3 411.1 441.8 447.5 501.7 462.4 462.4 20 EQUALS: Disposable personal income 2.261.4 2,425.4 2,670.2 2,696.7 2,739.2 2.817.7 2,723.8 21 LESS: Personal outlays 2.107.5 2,292.2 2,497.7 2,515.2 2,608.4 2,650.6 2,559.4 22 EQUALS: Personal saving 153.9 133.2 172.5 181.5 164.5 130.9 167.2 MEMO Per capita (1982 dollars) 23 Gross national product 13,624.4 13,962.0 14,750.9 14,811.9 14,797.2 14,902.6 14,915.5 24 Personal consumption expenditures 8,824.9 9,147.9 9,461.8 9,465.9 9,520.8 9,613.3 9,658.1 25 Disposable personal income 9,732.0 9,952.0 10,427.0 10,466.0 10,457.0 10,429.0 10,617.0 26 Saving rate (percent) 6.8 5.5 6.5 6.7 6.0 4.8 5.9 GROSS SAVING 27 Gross saving. 446.4 469.8 584.5 592.8 573.5 578.3 571.7 28 Gross private saving 557.1 600.6 693.0 708.8 700.3 677.7 723.6 29 Personal saving 153.9 133.2 172.5 181.5 164.5 130.9 167.2 30 Undistributed corporate profits1 20.0 67.9 101.6 104.9 108.2 116.3 122.6 31 Corporate inventory valuation adjustment -10.4 -10.0 -5.4 -1.3 -1.6 .7 2.2 Capital consumption allowances 32 Corporate 235.0 245.0 256.6 258.5 261.8 264.3 266.8 33 Noncorporate 148.2 154.6 162.3 164.0 165.9 166.3 167.0 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -110.8 -130.8 -108.5 -116.0 -126.8 -99.4 -151.9 36 Federal -145.9 -179.4 -172.9 -178.1 -192.7 -162.6 -209.1 37 State and local 35.1 48.6 64.4 62.1 65.8 63.2 57.3 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 39 Gross investment 446.3 469.2 583.0 565.8 580.7 567.0 40 Gross private domestic 447.3 501.9 674.0 687.9 676.2 657.6 672.8 41 Net foreign -1.0 -32.7 -91.0 -94.3 -110.4 -76.8 -105.8 42 Statistical discrepancy. -.6 -1.5 -7.6 2.5 -4.7 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 1985 Item credits or debits Q3 Q4 Qir Q2 Q3P 1 Balance on current account -8,051 -45,994' -107,358 -28,969 -31,805 -24,247 -27,696 -30,451 2 Not seasonally adjusted.. -32,297 -28,982 -23,417 -27,927 -34,087 3 Merchandise trade balance2 ... -36,444 -67,2 W -114,107 -28,977 -30,885 -23,454 -28,587 -33,142 4 Merchandise exports 211,198 201,712' 219,916 55,649 56,242 55,302 53,624 52,310 5 Merchandise imports -247,642 -268,928' -334,023 -84,626 -87,127 -78,756 -82,211 -85,452 6 Military transactions, net -318 -163 -1,765 -250 -575 -212 -586 -487 7 Investment income, net3 29,493 25,401 19,109 3,256 4,003 2,537 5,387 7,549 8 Other service transactions, net. 7,353 4,837 819 -122 -253 54 -482 -403 9 Remittances, pensions, and other transfers -2,633 -2,566 -2,891 -669 -782 -934 -843 -849 10 U.S. government grants (excluding military) -5,501 -6,287 -8,522 -2,207 -3,313 -2,238 -2,585 -3,119 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -6,131 -5,006 -5,516 -1,369 -734 -850 -853 -420 12 Change in U.S. official reserve assets (increase, -) -4,965 -1,196 -3,130 -799 -1,109 -233 -356 -121 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -1,371 -66 -979 -271 -194 -264 -180 -264 15 Reserve position in International Monetary Fund -2,552 -4,434 -995 -331 -143 281 72 388 16 Foreign currencies -1,041 3,304 -1,156 -197 -772 -250 -248 -245 17 Change in U.S. private assets abroad (increase, -)3. -108,121 -48,842 -11,800 20,532 -13,003 718 -1,246 -9,458 18 Bank-reported claims -111,070 -29,928 -8,504 17,725 -4,933 135 4,095 -1,408 19 Nonbank-reported claims 6,626 -6,513 6,266 2,099 970 1,201 1,863 n.a. 20 U.S. purchase of foreign securities, net -8,102 -7,007 -5,059 -1,313 -3,663 -2,494 -2,214 -1,787 21 U.S. direct investments abroad, net3 4,425 -5,394 -4,503 2,021 -5,377 1,876 -4,990 -6,263 22 Change in foreign official assets in the United States (increase, +) 3,672 5,795 3,424 -686 7,119 -11,204 8,465 2,415 23 U.S. Treasury securities 5,779 6,972 4,690 -575 5,814 -7,219 8,722 -90 24 Other U.S. government obligations -694 -476 167 85 -67 -307 136 24 25 Other U.S. government liabilities4 684 552 453 -139 -197 -462 575 -95 26 Other U.S. liabilities reported by U.S. banks -1,747 545 663 430 2,052 -3,099 -134 2,954 27 Other foreign official assets5 -350 -1,798 -2,549 -487 -483 -117 -834 -378 28 Change in foreign private assets in the United States (increase, +)3 90,775 78,527 93,895 3,825 26,191 24,915 17,849 31,494 29 U.S. bank-reported liabilities 65,922 49,341 31,674 -5,125 4,481 13,345 195 6,452 30 U.S. nonbank-reported liabilities -2,383 -118 4,284 -2,939 -1,863 -2,655 -1,324 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 7,052 8,721 22,440 5,058 9,501 2,633 5,106 7,824 32 Foreign purchases of other U.S. securities, net 6,392 8,636 12,983 1,603 9,380 9,510 7,135 11,641 33 Foreign direct investments in the United States, net3 13,792 11,947 22,514 5,228 4,692 2,082 6,737 5,577 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 32,821 16,717' 30,486 7,466 13,341 10,901 3,837 6,541 36 Owing to seasonal adjustments -3,274 4,305 -384 -570 -3,487 37 Statistical discrepancy in recorded data before seasonal adjustment 32,821 16,717' 30,486 10,740 4,407 10,028 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -4,965 -1,196 -3,130 -799 -1,110 -233 -356 -121 39 Foreign official assets in the United States (increase, +) 2,988 5,243 2,971 -547 7,316 -10,742 7,890 2,510 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 -453 812 -2,021 -1,960 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 585 194 190 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 • February 1986 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1985 IItteemm 11998822 11998833 11998844 Apr. May June July Aug. Sept. Oct. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 212,193 200,486 19,142 17,779 17,414 17,438 17,411 17,423 17,732 17,368 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 243,952 258,048 25,933 28,295 28,685 29,425 26,630 26,083 31,764 27,594 3 Trade balance -31,759 -57,562 -6,791 -10,516 -11,271 -11,987 -9,219 -8,660 -14,032 -10,226 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 May June July Aug. Sept. Oct. Nov. 1 Total 33,958 33,747 34,934 35,782 36,088 37,071 37,154 38,295 41,657 42,852 2 Gold stock, including Exchange Stabilization Fund1 11,148 11,121 11,096 11,091 11,091 11,090 11,090 11,090 11,090 11,090 3 Special drawing rights2,3 5,250 5,025 5,641 6,163 6,1% 6,510 6,692 6,847 6,926 7,253 4 Reserve position in International Monetary Fund2 7,348 11,312 11,541 11,370 11,394 11,513 11,478 11,686 11,843 11,955 5 Foreign currencies4 10,212 6,289 6,656 7,158 7,408 7,958 7,894 8,672 11,798 12,554 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 May June July Aug. Sept. Oct. Nov. 1 Deposits 328 190 253 204 310 274 223 535 267 340 Assets held in custody 2 U.S. Treasury securities1 112,544 117,670 118,267 116,989 121,755 124,400 123,321 120,978 118,000 117,814 3 Earmarked gold2 14,716 14,414 14,265 14,265 14,262 14,251 14,251 14,245 14,242 14,240 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 Asset account Apr. May June July Aug. Sept. All foreign countries 1 Total, all currencies 469,712 477,090 453,656 461,636 459,416 458,243 464,000 457,553 456,405 2 Claims on United States 91,805 115,542 113,449 121,823 121,140 121,284 119,393 122,932 119,431 3 Parent bank 61,666 82,026 78,165 86,907 85,609 85,272 84,045 86,779 85,447 4 5 O N t o h n e b r a b n a k n s k 2 s in United States2 30,139 33.516 2 1 1 3 , ,6 6 6 2 4 0 2 1 0 4 , , 7 1 1 9 7 9 2 1 1 4 , , 4 1 3 0 0 1 2 1 1 4 , , 5 4 5 6 1 1 2 1 0 4 , , 6 7 0 3 9 9 2 1 2 4 , , 0 0 9 5 5 8 2 1 0 3 , , 8 1 5 2 5 9 6 Claims on foreigners 358,493 342,689 320,106 319,749 317,589 316,081 322,749 313,073 314,717 7 Other branches of parent bank 91,168 96,004 95,128 91,302 90,826 89,833 91,172 89,640 87,658 8 Banks 133,752 117,668 100,397 104,350 102,312 101,500 104,813 99,032 102,135 9 Public borrowers 24,131 24.517 23,343 23,195 23,128 23,051 23,124 22,863 23,277 10 Nonbank foreigners 109,442 107,785 101,238 100,902 101,323 101,697 103,640 101,538 101,647 11 Other assets 19,414 18,859 20,101 20,064 20,687 20,878 21,858 21,548 22,257 12 Total payable in U.S. dollars 361,982 371,508 350,636 352,428 350,609 350,136 346,109 341,871 335,021 13 Claims on United States 90,085 113,436 111,482 119,228 118,687 118,726 116,422 120,184 116,535 14 Parent bank 61,010 80,909 77,285 85,775 84,640 84,286 82,895 85,850 84,236 1 1 1 1 6 7 8 5 Cla N O O i t o m t h h n s e e b r r o a n b b n r a k f a n s o n 2 k r c s e h i i g e n s n e U o r f s n i p te a d re n S t t a b t a e n s2 k 2 2 7 5 3 9 9 , , , 8 5 0 7 3 7 1 7 5 2 3 7 4 8 2 7 , , , 4 4 5 3 0 2 1 6 7 2 2 7 2 1 0 8 8 3 , , , , 5 6 6 5 4 9 9 0 4 7 0 0 2 7 2 1 1 5 3 9 3 , , , , 3 0 6 8 8 5 1 4 3 7 3 0 2 7 2 2 1 5 1 0 3 , , , . 0 9 3 7 6 8 4 0 7 9 2 5 2 7 2 2 1 4 1 0 4 , , , , 4 5 4 0 7 2 9 1 8 1 3 9 2 7 1 1 1 4 9 9 4 , , , , 8 4 4 1 2 7 1 1 4 1 2 5 2 2 7 1 1 2 0 2 3 , , , , 4 8 0 4 3 8 2 5 7 3 3 1 2 6 0 1 1 9 8 9 2 , , , , 6 2 7 5 6 2 3 6 4 6 1 8 19 Banks 106,447 93,332 76,940 76,926 75.706 75,337 75,339 70,973 70,890 20 Public borrowers 18,413 17,890 17,626 17,316 17,331 17,220 17,033 17,037 17,274 21 Nonbank foreigners 61,474 60,977 55,288 54,084 53,885 54,328 52,981 51,576 51,274 22 Other assets 12,026 10,666 10,610 9,817 9,933 9,932 9,863 9,664 9,822 United Kingdom 23 Total, all currencies 161,067 158,732 144,385 148,711 148,285 149,599 151,455 151,117 150,276 149,607 24 Claims on United States 27,354 34,433 27,731 29,930 30,314 31,322 31,140 35,300 32,635 33,852 25 Parent bank 23,017 29,111 21,918 23,236 23,554 23,930 24,368 28,200 25,813 26,992 2 2 6 7 N Ot o h n e b r a b n a k n s k 2 s in United States2 4,337 5,322 4 1 , , 3 4 8 2 4 9 5 1 , , 0 6 4 4 5 9 5 1 , , 1 6 4 1 7 3 5 1 , , 7 6 0 9 1 1 5 1 , , 2 5 4 2 7 5 5 1 , , 6 4 2 7 6 4 5 1 , , 4 3 8 2 8 9 5 1 , , 5 2 9 6 1 9 28 Claims on foreigners 127,734 119,280 111,772 113,689 112,829 113,192 114,827 110,475 112,514 110,435 29 Other branches of parent bank 37,000 36,565 37,897 34,036 33,948 34,188 33,539 32,616 32,403 32,074 30 Banks 50,767 43,352 37,443 41,242 39,905 39,850 40,546 37,796 40,509 37,858 31 Public borrowers 6,240 5,898 5,334 4,967 4,932 4,973 5,056 5,054 5,112 5,628 32 Nonbank foreigners 33,727 33,465 31,098 33,444 34,044 34,181 35,686 35,009 34,495 34,875 33 Other assets 5,979 5,019 4,882 5,092 5,142 5,085 5,48? 5,342 5,127 5,320 34 Total payable in U.S. dollars 123,740 126,012 112,809 111,498 111,305 112,686 110,451 110,972 108,731 108,024 35 Claims on United States 26,761 33,756 26,924 28,998 29,389 30,368 30,087 34,251 31,520 32,605 4 4 4 4 3 3 3 3 3 2 0 1 6 7 8 9 Cl N P O P B a N O i u a o a t t o m b h r h n n n e s l e e k b i b n r r c s a o t a b n n b n b b k r a k o a a f n s r o n n f 2 k r o k r c o s e r h w i e i e g n i e s n g r e U n s o r e f n s r i s p t a ed re n S t ta b t a e n s2 k 2 9 3 3 1 4 2 4 2 6 1 9 , , , , , , , 3 7 0 2 7 6 5 2 5 2 0 3 1 4 9 6 8 5 4 7 8 2 2 8 3 3 4 8 0 5 8 1 2 , , , , , , , 1 7 6 0 9 8 1 9 5 9 0 1 3 8 4 6 7 0 7 8 8 2 8 3 2 1 4 1 4 3 6 2 8 1 , , , , , , , , 0 5 0 5 8 8 5 3 5 3 1 5 0 8 0 6 1 0 0 1 5 9 3 3 2 7 2 2 1 4 2 9 3 7 9 9 1 , , , , , , , , 9 5 5 5 8 0 1 5 0 0 2 0 4 0 7 5 3 6 0 9 7 3 2 6 2 7 2 2 1 4 3 3 9 7 9 9 1 , , , , , , , , 5 6 2 0 1 1 2 4 0 6 4 2 1 8 3 8 0 1 0 9 5 4 0 8 2 7 2 2 1 3 3 9 5 9 7 9 1 , , , , , , , , 5 6 4 1 3 3 1 6 8 2 6 6 3 9 1 0 7 5 4 4 9 6 7 4 2 7 2 2 1 3 4 3 8 7 6 1 8 , , , , , , , , 9 5 6 6 4 3 4 9 9 3 7 2 4 4 1 3 5 8 7 3 6 9 5 6 2 7 2 2 1 7 4 3 3 6 4 1 8 , , , , , , , , 8 5 9 7 9 3 7 3 9 9 9 6 9 9 8 5 7 9 9 9 3 5 2 5 2 7 2 2 1 5 4 3 5 6 4 8 1 , , , , , , , , 3 6 9 4 5 6 2 2 4 3 1 3 5 8 8 4 2 3 4 1 8 1 6 7 2 7 2 2 1 6 4 3 3 2 6 7 1 , , , , , , , , 9 5 8 8 2 6 7 1 6 3 8 8 5 8 8 9 6 1 8 0 0 7 3 4 44 Other assets 4,751 3,339 2,996 2,991 2,887 2,854 2,918 2,952 2,925 3,132 Bahamas and Caymans 45 Total, all currencies 145,156 152,083 146,811 145,096 144,033 143,549 140,785 138,510 135,214 46 Claims on United States 59,403 75,309 77,296 79,150 78,849 78,049 75,275 74,448 72,634 47 Parent bank 34,653 48,720 49,449 52,996 51,886 51,171 48,669 47,815 47,299 4 4 8 9 N Ot o h n e b r a b n a k n s k 2 s in United States2 24,750 26,589 1 1 1 6 , , 5 3 4 0 4 3 1 1 1 4 , , 6 5 4 0 7 7 1 1 1 5 , , 7 2 2 4 3 0 1 1 1 4 , , 9 8 9 7 9 9 1 1 2 4 , , 3 2 8 2 1 5 1 14 1 , , 9 7 0 2 8 5 1 14 1 , , 3 0 2 0 6 9 50 Claims on foreigners 81,450 72,868 65,598 62,164 61,604 61,959 62,209 60,964 59,277 51 Other branches of parent bank 18,720 20,626 17,661 14,716 15,271 15,645 15,669 16,479 15,428 52 Banks 42,699 36,842 30,246 29,887 28,942 28,501 29,240 27,601 26,964 53 Public borrowers 6,413 6,093 6,089 6,683 6,604 6,642 6,505 6,432 6,486 54 Nonbank foreigners 13,618 12,592 11,602 10,878 10,787 11,171 10,795 10,452 10,399 55 Other assets 4,303 3,906 3,917 3,782 3,580 3,541 3,301 3,098 3,303 56 Total payable in U.S. dollars 139,605 145,641 141,562 139,926 138,724 138,581 135,472 133,521 129,830 1. Beginning with June 1984 data, reported claims held by foreign branches 2. Data for assets vis-^-vis other banks in the United States and vis-^-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 • February 1986 3.14 Continued 1985 LLiiaabbiilliittyy aaccccoouunntt 11998822 || 11998833 11998844 Apr. May June July Aug. Sept. Oct.? All foreign countries 57 Total, all currencies 469,712 477,090 453,656 461,636 459,416 458,243 464,000 457,553 456,405 454,216 58 Negotiable CDs3 n.a. n.a. 37,725 38,940 37,188 37,952 37,683 37,885 39,676 38,044 59 To United States 179,015 188,070 147,583 145,511 145,610 147,424 146,389 144,408 143,452 139,832 60 Parent bank 75,621 81,261 78,739 76,385 78,419 79,846 80,656 77,484 78,415 75,236 61 Other banks in United States 33,405 29,453 18,409 18,834 18,782 19,430 17,032 16,087 17,006 15,582 62 Nonbanks 69,989 77,356 50,435 50,292 48,409 48,148 48,701 50,837 47,831 49,014 63 To foreigners 270,853 269,685 247,907 255,632 254,535 251,572 256,769 252,717 250,344 252,252 64 Other branches of parent bank 90,191 90,615 93,909 92,502 91,967 91,110 92,984 90,483 87,854 88,539 65 Banks 96,860 92,889 78,203 83,614 81,537 80,4% 82,777 80,940 82,426 82,473 66 Official institutions 19,614 18,896 20,281 21,854 21,827 21,703 20,937 21,234 21,015 21,319 67 Nonbank foreigners 64,188 68,845 55,514 57,662 59,204 58,263 60,071 60,060 59,049 59,921 68 Other liabilities 19,844 19,335 20,441 21,553 22,083 21,295 23,159 22,543 23,133 24,088 69 Total payable in U.S. dollars 379,270 388,291 367,145 366,525 364,590 365,812 361,403 357,182 350,122 345,254 70 Negotiable CDs3 n.a. n.a. 35,227 35,958 34,216 34,637 33,716 34,030 35,695 33,995 71 To United States 175,528 184,305 143,571 140,855 140,958 142,499 141,145 138,786 136,613 132,638 72 Parent bank 73,295 79,035 76,254 73,786 75,795 77,040 77,543 74,176 74,562 70,435 73 Other banks in United States 33,040 28,936 17,935 18,270 18,209 18,869 16,446 15,466 16,081 15,108 74 Nonbanks 69,193 76,334 49,382 48,799 46,954 46,590 47,156 49,144 45,970 47,095 75 To foreigners 192,510 194,139 178,260 179,488 179,567 179,353 177,144 174,645 167,817 168,377 76 Other branches of parent bank 72,921 73,522 77,770 76,650 76,107 75,930 76,386 73,770 69,606 70,007 77 Banks 57,463 57,022 45,123 45,167 44,413 44,694 43,691 42,859 41,216 41,562 78 Official institutions 15,055 13,855 15,773 17,178 17,407 17,278 15,935 16,238 16,221 16,007 79 Nonbank foreigners 47,071 51,260 39,594 40,493 41,640 41,451 41,132 41,778 40,774 40,801 80 Other liabilities 11,232 9,847 10,087 10,224 9,849 9,323 9,398 9,721 9,997 10,244 United Kingdom 81 Total, all currencies 161,067 158,732 144,385 148,711 148,285 149,599 151,455 151,117 150,276 149,607 82 Negotiable CDs3 n.a. n.a. 34,413 35,326 33,661 34,437 34,094 34,156 35,819 33,913 83 To United States 53,954 55,799 25,250 23,986 24,811 25,480 24,167 25,158 25,547 24,958 84 Parent bank 13,091 14,021 14,651 14,033 14,278 14,910 13,434 14,336 14,592 13,893 85 Other banks in United States 12,205 11,328 3,125 2,665 2,735 3,571 2,853 2,839 3,526 2,602 86 Nonbanks 28,658 30,450 7,474 7,288 7,798 6,999 7,880 7,983 7,429 8,463 87 To foreigners 99,567 95,847 77,424 80,913 81,033 81,004 83,480 82,317 79,671 80,646 88 Other branches of parent bank 18,361 19,038 21,631 21,887 21,784 22,565 23,647 22,348 20,233 20,175 89 Banks 44,020 41,624 30,436 32,259 31,573 30,852 32,389 31,518 32,041 33,102 90 Official institutions 11,504 10,151 10,154 11,590 11,260 11,240 10,180 10,823 10,824 10,812 91 Nonbank foreigners 25,682 25,034 15,203 15,177 16,416 16,347 17,264 17,628 16,573 16,557 92 Other liabilities 7,546 7,086 7,298 8,486 8,780 8,678 9,714 9,486 9,239 10,090 93 Total payable in U.S. dollars 130,261 131,167 117,497 116,128 115,742 117,333 114,123 115,064 112,816 109,945 94 Negotiable CDs3 n.a. n.a. 33,070 33,763 32,140 32,721 31,743 31,911 33,380 31,574 95 To United States 53,029 54,691 24,105 22,281 23,206 23,729 22,254 23,119 23,329 21,536 % Parent bank 12,814 13,839 14,339 13,569 13,869 14,472 12,777 13,773 13,995 12,032 97 Other banks in United States 12,026 11,044 2,980 2,500 2,550 3,387 2,687 2,628 3,309 2,479 98 Nonbanks 28,189 29,808 6,786 6,212 6,787 5,870 6,790 6,718 6,025 7,025 99 To foreigners 73,477 73,279 56,923 56,473 56,885 57,504 56,783 56,208 52,245 52,469 100 Other branches of parent bank 14,300 15,403 18,294 18,451 18,375 19,053 19,640 18,241 15,999 15,480 101 Banks 28,810 29,320 18,356 17,497 17,417 17,175 17,249 16,975 15,787 17,053 102 Official institutions 9,668 8,279 8,871 9,989 9,687 9,648 8,430 9,005 9,055 8,877 103 Nonbank foreigners 20,699 20,277 11,402 10,536 11,406 11,628 11,464 11,987 11,404 11,059 104 Other liabilities 3,755 3,197 3,399 3,611 3,511 3,379 3,343 3,826 3,862 4,366 Bahamas and Caymans 105 Total, all currencies 145,156 152,083 146,811 145,096 144,033 143,549 140,785 138,510 135,214 134,951 106 Negotiable CDs3 n.a. n.a. 615 634 436 344 320 356 686 745 107 To United States 104,425 111,299 102,955 100,489 99,379 99,856 98,682 95,793 94,071 92,668 108 Parent bank 47,081 50,980 47,162 43,749 45,557 45,740 47,147 43,384 44,431 42,841 109 Other banks in United States 18,466 16,057 13,938 15,112 14,545 14,748 12,979 12,153 12,081 11,940 no Nonbanks 38,878 44,262 41,855 41,628 39,277 39,368 38,566 40,256 37,559 37,887 111 To foreigners 38,274 38,445 40,320 41,102 41,437 40,621 39,081 39,679 37,667 38,786 112 Other branches of parent bank 15,7% 14,936 16,782 17,179 17,759 16,615 16,645 17,638 16,023 17,201 113 Banks 10,166 11,876 12,405 13,469 12,879 13,600 12,329 11,452 11,423 11,123 114 Official institutions 1,967 1,919 2,054 1,598 2,194 1,866 1,941 1,687 1,760 1,869 115 Nonbank foreigners 10,345 11,274 9,079 8,856 8,605 8,540 8,166 8,902 8,461 8,593 116 Other liabilities 2,457 2,339 2,921 2,871 2,781 2,728 2,702 2,682 2,790 2,752 117 Total payable in U.S. dollars 141,908 148,278 143,582 140,945 139,909 139,648 136,820 134,623 130,921 130,681 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 Apr. May June July Aug.' Sept. Oct.P 1 Total1 177,950 180,525' 170,609 173,725 177,780 180,766 181,175 180,289 178,271 By type 2 Liabilities reported by banks in the United States2 25,534 26,089 22,771 23,153 22,915 22,101 23,224 25,869 26,969 3 U.S. Treasury bills and certificates3 54,341 59,976 57,226 56,691 58,589 60,727 60,921 56,493 54,398 U.S. Treasury bonds and notes 4 Marketable 68,514 69,029 67,022 70,552 73,265 75,053 75,157 76,221 75,016 5 Nonmarketable4 7,250 5,800 4,900 4,500 4,500 4,500 3,550 3,550 3,550 6 U.S. securities other than U.S. Treasury securities5 22,311 19,631' 18,690 18,829 18,511 18,385 18,323 18,156 18,338 By area 7 Western Europe1 67,645 69,789 65,660 67,948 70,346 73,378 75,226 74,525 74,260 8 Canada 2,438 1,528 1,403 1,558 1,571 2,010 1,664 1,561 1,586 9 Latin America and Caribbean 6,248 8,554 7,528 8,072 8,467 8,846 9,524 10,532 10,079 10 Asia 92,572 93,920' 89,965 90,181 91,406 90,834 89,485 88,282 87,246 11 Africa 958 1,264 1,403 1,262 1,299 1,259 1,110 1,397 1,410 12 Other countries6 8,089 5,470 4,650 4,704 4,691 4,439 4,166 3,992 3,690 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 Dec. Mar. June Sept.P 1 Banks' own liabilities 3,523 4,844 5,219 8,578 8,012 10,150 12,048 2 Banks' own claims 4,980 7,707 7,231 11,874 12,639 14,012 14,930 3 Deposits 3,398 4,251 2,731 4,998 6,148 7,437 8,505 4 Other claims 1,582 3,456 4,501 6,876 6,491 6,575 6,425 5 Claims of banks' domestic customers1 971 676 1,059 569 440 243 328 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 • February 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 Apr. May June July Aug. Sept. Oct.P 1 All foreigners 307,056 369,607 407,133 410,976 411,297 412,861 416,420 420,182' 420,706 418,559 2 Banks' own liabilities 227,089 279,087 306,499 313,018 315,608 317,062 318,944 321,364' 323,307 322,740 3 Demand deposits 15,889 17,470 19,571 18,295 17,705 19,423 17,662 17,735 20,926 18,605 4 Time deposits' 68,797 90,632 110,286 117,872 120,792 116,331 116,069 119,071' 115,265 114,766 5 Other2 23,184 25,874 26,002 24,392 25,614 25,782 25,875 25,701' 29.739 28,670 6 Own foreign offices3 119,219 145,111 150,640 152,459 151,496 155,526 159,338 158,857' 157,377 160,699 7 Banks' custody liabilities4 79,967 90,520 100,634 97,958 95,690 95,799 97,477 98,818 97,399 95,819 8 U.S. Treasury bills and certificates5 55,628 68,669 76,368 73,078 71,597 73,061 75,396 75,797 73,398 72,163 9 Other negotiable and readily transferable instruments6 20,636 17,467 18,747 18,337 17,690 16,207 16,165 16,610' 17,140 16,746 10 Other 3,702 4,385 5,518 6,543 6,403 6,532 5,916 6,412' 6,861 6,911 11 Nonmonetary international and regional organizations7 4,922 5,957 4,083 6,166 6,694 5,709 5,019 7,353 7,467 6,766 12 Banks' own liabilities 1,909 4,632 1,644 3,137 4,389 3,928 3,243 5,569 3,275 1,842 13 Demand deposits 106 297 254 167 264 164 134 252 243 143 14 Time deposits1 1,664 3,584 1,102 2,276 3,747 3,023 2,556 4,366 2,261 1,299 15 Other2 139 750 288 694 377 740 553 951 771 399 16 Banks' custody liabilities4 3,013 1,325 2,440 3,029 2,305 1,782 1,777 1,784 4,192 4,924 17 U.S. Treasury bills and certificates 11,,662211 463 916 1,434 775 642 767 742 22,,775599 3,636 18 Other negotiable and readily transferable instruments6 1,392 862 1,524 1,593 1,531 1,140 1,010 1,042 1,433 1,287 19 Other 0 0 0 2 0 0 0 1 0 1 20 Official institutions8 71,647 79,876 86,065 79,997 79,844 81,504 82,828 84,145' 82,362 81,366 21 Banks' own liabilities 16,640 19,427 19,039 16,631 17,652 17,795 17,256 17,720' 20,262 21,142 22 Demand deposits 1,899 1,837 1,823 1,975 1,630 1,891 1,546 1,538 2,151 1,722 23 Time deposits1 5,528 7,318 9,374 9,176 8,728 9,050 9,070 9,334' 8,964 10,262 24 Other2 9,212 10,272 7,842 5,481 7,294 6,853 6,640 6,849' 9,147 9,158 25 Banks' custody liabilities4 55,008 60,448 67,026 63,366 62,192 63,710 65,572 66,425 62,100 60,225 26 U.S. Treasury bills and certificates5 4466,,665588 5544,,334411 59,976 57,226 56,691 5588,,558899 6600,,772277 60,921 56,493 54,398 27 Other negotiable and readily transferable instruments6 8,321 6,082 6,966 6,007 5,451 5,042 4,725 5,291 5,472 5,758 28 Other 28 25 84 133 50 78 120 213 135 69 29 Banks9 185,881 226,887 248,897 253,040 251,784 254,045 257,113 256,645' 257,643 257,246 30 Banks' own liabilities 169,449 205,347 225,372 230,607 229,858 232,319 235,488 234,401' 235,016 235,295 31 Unaffiliated foreign banks 50,230 60,236 74,732 78,149 78,361 76,793 76,150 75,544' 77,639 74,596 32 Demand deposits 8,675 8,759 10,556 9,266 8,714 9,847 8,647 8,594 10,468 9,045 33 Time deposits' 28,386 37,439 47,155 51,610 52,674 49,968 49,919 49,915' 48,822 48,124 34 Other2 13,169 14,038 17,021 17,273 16,973 16,977 17,584 17,035' 18,350 17,428 35 Own foreign offices3 119,219 145,111 150,640 152,459 151,496 155,526 159,338 158,857' 157,377 160,699 36 Banks' custody liabilities4 16,432 21,540 23,525 22,432 21,926 21,727 21,625 22,244 22,627 21,951 37 U.S. Treasury bills and certificates 55,,880099 10,178 11,448 10,446 10,216 9,745 9,934 9,966 9,952 9,896 38 Other negotiable and readily transferable instruments6 7,857 7,485 7,236 6,235 6,104 6,231 6,390 6,569' 6,462 5,906 39 Other 2,766 3,877 4,841 5,751 5,606 5,751 5,301 5,71c 6,213 6,148 40 Other foreigners 44,606 56,887 68,087 71,774 72,976 71,602 71,460 72,039' 73,233 73,181 41 Banks' own liabilities 39,092 49,680 60,444 62,643 63,710 63,020 62,957 63,674' 64,754 64,461 42 Demand deposits 5,209 6,577 6,938 6,888 7,098 7,520 7,335 7,351 8,064 7,696 43 Time deposits 33,219 42,290 52,655 54,810 55,643 54,290 54,524 55,456' 55,218 55,080 44 Other2 664 813 851 945 969 1,211 1,098 867 1,471 1,686 45 Banks' custody liabilities4 5,514 7,207 7,642 9,131 9,266 8,581 8,503 8,365 8,479 8,719 46 U.S. Treasury bills and certificates 1,540 3,686 4,029 3,973 3,915 4,085 3,968 4,169 4,193 4,232 47 Other negotiable and readily transferable instruments6 3,065 3,038 3,021 4,501 4,604 3,793 4,040 3,708 3,774 3,795 48 Other 908 483 593 657 746 704 495 489 513 692 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 14,307 10,346 10,476 9,145 9,081 8,679 8,567 8,903 9,208 9,078 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 Apr. May June July Aug. Sept. Oct.? 1 307,056 369,607 407,133' 410,976 411,297 412,861 416,420 420,182' 420,706 418,559 2 Foreign countries 302,134 363,649 403,049' 404,811 404,603 407,152 411,401 412,829' 413,238 411,793 3 117,756 138,072 153,212' 149,218 151,219 153,718 156,132 160,127' 157,201 158,268 4 519 585 615 537 627 563 567 711 767 613 Belgium-Luxembourg 2,517 2,709 4,114 4,795 4,619 4,889 5,743 5,416 5,710 5,249 6 509 466 438 557 494 727 684 617 778 558 7 748 531 418 476 604 325 349 377 351 594 8 8,171 9,441 12,701 13,627 14,178 13,849 15,237 15,626 15,743 15,949 9 5,351 3,599 3,358 3,539 3,727 4,003 4,389 5,359 5,224 4,366 10 537 520 699 649 585 605 588 531 603 536 11 Italy 5,626 8,462 10,762' 7,895 8,467 9,276 9,624 9,537 9,088 9,721 1? 3,362 4,290 4,799 4,558 4,685 4,386 4,689 4,588' 4,568 4,285 13 1,567 1,673 1,548 2,138 1,994 1,397 1,183 1,156 1,043 1,132 14 388 373 597 698 665 635 658 672 640 647 15 1,405 1,603 2,082 2,000 2,030 2,015 2,113 2,034 2,140 2,097 16 1,390 1,799 1,676 1,901 1,689 2,277 2,559 2,008 1,668 1,760 17 29,066 32,246 31,74V 30,059 29,706 29,547 29,835 29,475' 29,294 28,499 18 296 467 584 506 384 631 598 404 516 417 19 United Kingdom 48,172 60,683 68,671' 68,239 69,779 70,958 70,208 73,562' 70,500 73,330 70 499 562 602 648 585 729 626 622 647 626 71 Other Western Europe1 7,006 7,403 7,192' 5,790 5,877 6,261 6,004 6,884' 7,407 7,367 ?? 50 65 79 125 67 31 72 45 37 51 23 Other Eastern Europe2 576 596 537 480 458 614 406 503' 477 471 24 Canada 12,232 16,026 16,048 17,006 16,214 15,874 16,284 16,739 17,363 16,269 75 Latin America and Caribbean 114,163 140,088 153,5^ 156,823 157,092 158,310 159,011 157,634' 157,470 157,741 76 3,578 4,038 4,394' 4,664 4,912 5,081 5,322 5,187' 5,634 5,872 77 44,744 55,818 56,897 59,069 58,195 57,406 55,858 55,486' 53,665 55,149 78 1,572 2,266 2,370 3,159 3,192 2,503 2,380 2,741 2,124 2,238 79 2,014 3,168 5,275' 4,743 5,376 5,187 5,602 5,918' 5,894 5,861 30 British West Indies 26,381 34,545 36,773' 35,765 35,489 38, %5 40,%5 38,338' 38,955 37,043 31 Chile 1,626 1,842 2,001 1,909 1,922 1,870 1,910 1,966 1,907 1,940 3? 2,594 1,689 2,514 2,401 2,452 2,526 2,421 2,543 2,599 2,561 33 Cuba 9 8 10 6 7 6 10 9 13 64 34 455 1,047 1,092 1,022 987 1,004 1,046 1,043 1,251 1,029 35 670 788 896 955 979 %3 972 995 1,005 957 36 126 109 183 154 146 123 194 152 144 142 37 8,377 10,392 12,506 13,222 13,678 13,533 13,123 13,381 13,809 13,590 38 Netherlands Antilles 3,597 3,879 4,153 4,383 4,439 4,200 4,025 4,364' 4,973 4,665 39 4,805 5,924 6,951 7,584 7,570 7,427 7,462 7,447 7,163 8,250 40 Peru 1,147 1,166 1,266 1,077 1,162 1,168 1,113 1,133 1,159 1,093 41 759 1,244 1,394 1,461 1,492 1,415 1,460 1,557 1,576 1,498 47 Venezuela 8,417 8,632 10,545 10,791 10,696 10,471 10,853 10,940 11,121 11,404 43 Other Latin America and Caribbean 3,291 3,535 4,297 4,458 4,3% 4,460 4,297 4,435 4,479 4,387 44 48,716 58,570 71,192' 73,370 71,641 70,477 71,715 70,509' 73,267 71,821 China 45 203 249 1,153 912 698 886 939 11,,113355 1,973 11,,880099 46 2,761 4,051 4,975 5,242 5,381 5,545 5,849 6,047 6,244 6,455 47 Hong Kong 4,465 6,657 6,594 7,091 7,360 7,989 7,831 8,012 7,923 7,940 48 433 464 507 554 546 569 555 484 646 642 49 857 997 1,033 1,241 1,164 1,264 1,463 1,337 1,363 1,570 50 606 1,722 1,268 873 988 1,053 1,011 885 1,190 2,118 51 16,078 18,079 21,652' 22,683 22,688 21,103 22,913 22,537 23,582 22,091 57 1,692 1,648 1,724 1,595 1,598 1,705 1,493 1,580' 1,657 1,751 53 770 1,234 1,383 1,223 1,305 1,443 1,335 1,694 1,606 1,325 54 629 747 1,257 1,141 1,167 1,063 984 1,073 1,029 1,014 55 Middle-East oil-exporting countries3 13,433 12,976 16,804 16,373 16,316 15,052 15,410 14,811' 15,337 15,253 56 Other Asia 6,789 9,748 12,841' 14,441 12,430 12,805 11,932 10,91V 10,718 9,852 57 3,124 2,827 3,396 3,517 3,429 3,920 3,384 3,501 3,635 3,723 58 432 671 647 747 618 745 881 737 923 885 59 81 84 118 155 189 161 98 162 157 140 60 292 449 328 339 273 332 181 420 370 404 61 23 87 153 128 124 170 87 103 115 136 67 Oil-exporting countries4 1,280 620 1,189 1,177 1,114 1,497 1,099 1,092 1,049 1,076 63 Other Africa 1,016 917 961 969 1,112 1,015 1,037 986 1,021 1,082 64 6,143 8,067 5,684 4,877 5,009 4,854 4,876 4,319 4,302 3,971 65 5,904 7,857 5,300 4,456 4,608 4,462 4,364 3,850 3,762 3,477 66 All other 239 210 384 422 401 392 511 469 540 494 67 Nonmonetary international and regional 4,922 5,957 4,083 6,166 6,694 55,,770099 55,,001199 77,,335533 77,,446677 66,,776666 68 International 4,049 5,273 3,376 5,301 5,636 4,698 3,%7 6,458 6,542 5,770 69 Latin American regional 517 419 587 706 834 808 782 739 7% 646 70 Other regional5 357 265 120 159 224 203 270 156 129 350 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 • February 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 Apr. May June July Aug. Sept. Oct.? 1 Total 355,705 391,312 398,845 391,432 391,355 396,253 390,368 387,997' 392,624 381,277 2 Foreign countries 355,636 391,148 398,251 390,295 390,540 395,543 390,094 387,558' 392,242 380,508 3 Europe 85,584 91,927 98,151 99,630 100,205 100,953 100,377 101,028' 105,835 102,322 4 Austria 229 401 433 519 552 536 815 703' 764 673 5 Belgium-Luxembourg 5,138 5,639 4,794 5,161 5,264 5,219 5,740 5,501' 6,147 5,871 6 Denmark 554 1,275 648 601 560 474 498 492 615 638 7 Finland 990 1,044 898 804 700 896 875 738 905 796 8 France 7,251 8,766 9,142 10,278 10,462 9,969 10,001 10,282' 11,046 10,193 9 Germany 1,876 1,284 1,313 1,008 1,015 1,223 1,115 948' 999 1,036 10 Greece 452 476 817 907 921 1,002 947 959' 1,016 966 11 Italy 7,560 9,018 9,119 8,256 7,798 7,520 7,623 6,527' 7,426 7,597 12 Netherlands 1,425 1,267 1,351 1,401 1,040 1,339 1,137 1,20c 1,281 1,110 13 Norway 572 690 675 748 753 750 710 683 858 787 14 Portugal 950 1,114 1,243 1,151 1,158 1,156 1,151 1,181 1,211 1,141 15 Spain 3,744 3,573 2,884 2,890 2,587 2,700 2,387 2,156' 2,438 2,312 16 Sweden 3,038 3,358 2,220 2,338 2,177 2,067 2,698 2,496' 2,475 2,616 17 Switzerland 1,639 1,863 2,123 1,843 1,631 2,231 2,669 2,629 3,091 2,629 18 Turkey 560 812 1,130 1,147 1,162 1,208 1,313 1,234 1,303 1,355 19 United Kingdom 45,781 47,364 55,352 56,396 58,020 58,377 56,437 59,280' 60,218 58,023 20 Yugoslavia 1,430 1,718 1,886 1,892 1,940 1,958 1,972 1,954 1,899 1,866 21 Other Western Europe1 368 477 596 640 760 775 679 629 694 1,250 22 U.S.S.R 263 192 142 245 312 297 250 239 199 332 23 Other Eastern Europe2 1,762 1,598 1,382 1,404 1,393 1,255 1,358 1,198 1,252 1,131 24 Canada 13,678 16,341 16,093 18,383 17,926 17,889 16,696 17,005' 16,944 15,932 25 Latin America and Caribbean 187,969 205,491 207,649 199,130 201,180 203,974 200,765 197,106' 196,299 190,595 26 Argentina 10,974 11,749 11,043 11,163 11,346 11,416 11,456 11,293 11,850 11,230 27 Bahamas 56,649 59,633 57,949 55,554 56,781 59,477 55,610 53,707' 53,325 51,236 28 Bermuda 603 566 592 633 506 563 405 502' 546 1,017 29 Brazil 23,271 24,667 26,315 26,207 26,434 26,549 26,559 26,441' 26,022 25,389 30 British West Indies 29,101 35,527 38,120 35,571 36,107 36,372 37,436 35,853' 35,083 34,152 31 Chile 5,513 6,072 6,839 6,676 6,634 6,680 6,663 6,476 6,524 6,136 32 Colombia 3,211 3,745 3,499 3,246 3,270 3,207 3,210 3,205' 3,195 3,211 33 Cuba 3 0 0 0 0 0 0 0 0 4 34 Ecuador 2,062 2,307 2,420 2,467 2,487 2,493 2,450 2,430 2,486 2,411 35 Guatemala3 124 129 158 154 149 145 153 149 168 165 36 Jamaica3 181 215 252 223 237 227 234 228 228 222 37 Mexico 29,552 34,802 34,824 32,554 32,748 32,384 32,129 32,375' 32,349 31,704 38 Netherlands Antilles 839 1,154 1,350 1,319 1,386 1,249 1,110 1,135 1,170 1,387 39 Panama 10,210 7,848 7,707 7,039 6,751 6,856 6,985 6,923 7,055 6,530 40 Peru 2,357 2,536 2,384 2,353 2,310 2,286 2,237 2,221 2,206 2,013 41 Uruguay 686 977 1,088 1,014 1,013 1,013 1,007 1,018 1,035 947 42 Venezuela 10,643 11,287 11,017 10,804 10,947 10,996 10,992 11,028 11,052 10,818 43 Other Latin America and Caribbean 1,991 2,277 2,091 2,154 2,072 2,060 2,129 2,122 2,005 2,022 44 Asia 60,952 67,837 66,296 63,450 61,833 63,470 63,242 6633,,771100'' 6644,,337744 6633,,009911 China 45 Mainland 214 292 710 572 543 358 635 560 1,148 997 46 Taiwan 2,288 1,908 1,849 1,937 1,641 1,718 1,540 1,527' 1,525 1,329 47 Hong Kong 6,787 8,489 7,283 6,897 7,290 7,237 7,473 7,999' 7,718 6,937 48 India 222 330 425 307 270 310 385 460 461 388 49 Indonesia 348 805 724 704 701 682 631 623 718 653 50 Israel 2,029 1,832 2,088 2,004 2,038 2,598 2,053 1,955' 1,875 1,901 51 Japan 28,379 30,354 29,066 26,614 25,429 26,529 26,336 27,785' 26,952 28,136 52 Korea 9,387 9,943 9,285 9,434 9,127 9,158 9,707 9,337' 9,092 9,736 53 Philippines 2,625 2,107 2,550 2,360 2,384 2,448 2,454 2,487 2,443 2,237 54 Thailand 643 1,219 1,125 939 852 862 746 757' 804 768 55 Middle East oil-exporting countries4 3,087 4,954 5,044 5,509 5,546 5,120 5,315 4,116 4,845 4,575 56 Other Asia 4,943 5,603 6,147 6,171 6,012 6,449 5,967 6,104' 6,791 5,436 57 Africa 5,346 6,654 6,615 6,299 6,203 6,075 5,957 5,718 5,701 5,458 58 Egypt 322 747 728 629 612 626 606 585 634 668 59 Morocco 353 440 583 595 577 592 596 598 592 610 60 South Africa 2,012 2,634 2,795 2,508 2,497 2,524 2,402 2,214 2,063 1,968 61 Zaire 57 33 18 24 24 24 24 25 22 21 62 Oil-exporting countries5 801 1,073 842 893 871 740 743 722 860 674 63 Other 1,802 1,727 1,649 1,651 1,621 1,569 1,587 1,574 1,531 1,516 64 Other countries 2,107 2,898 3,447 3,403 3,194 3,183 3,057 2,991' 3,090 3,110 65 Australia 1,713 2,256 2,769 2,755 2,536 2,498 2,320 2,227' 2,303 2,293 66 All other 394 642 678 648 658 685 737 764 787 818 67 Nonmonetary international and regional organizations6 68 164 594 1138 815 710 275 438 382 768 1. Includes the Bank for International Settlements. Beginning April 1978, also 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and includes Eastern European countries not listed in line 23. United Arab Emirates (Trucial States). 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German 5. Comprises Algeria, Gabon, Libya, and Nigeria. Democratic Republic, Hungary, Poland, and Romania. 6. Excludes the Bank for International Settlements, which is included in 3. Included in "Other Latin America and Caribbean" through March 1978. "Other Western Europe." 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 Apr. May June July Aug/ Sept. Oct.P 1 Total 333333399999996666666,,,,,,,000000011111115555555 444444422222226666666,,,,,,,222222211111115555555 444444433333331111111,,,,,,,777777766666661111111 444444422222225555555,,,,,,,666666699999992222222 444444422222226666666,,,,,,,000000099999993333333 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 333333355555555555555,,,,,,,777777700000005555555 333333399999991111111,,,,,,,333333311111112222222 333333399999998888888,,,,,,,888888844444445555555 391,432 391,355 3333333%%%%%%%,,,,,,,222222255555553333333 390,368 387,997 333333399999992222222,,,,,,,666666622222224444444 381,277 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 44444445555555,,,,,,,444444422222222222222 55555557777777,,,,,,,555555566666669999999 66666661111111,,,,,,,555555599999995555555 62,114 61,673 66666661111111,,,,,,,222222244444441111111 61,239 60,961 66666662222222,,,,,,,000000000000007777777 60,101 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 111111122222227777777,,,,,,,222222299999993333333 111111144444446666666,,,,,,,333333399999993333333 111111155555556666666,,,,,,,111111177777774444444 155,070 157,026 111111166666662222222,,,,,,,888888844444440000000 158,164 155,734 111111155555559999999,,,,,,,333333355555554444444 156,103 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222221111111,,,,,,,333333377777777777777 111111122222223333333,,,,,,,888888833333337777777 111111122222223333333,,,,,,,999999966666667777777 119,696 119,435 111111111111118888888,,,,,,,444444499999993333333 117,446 118,023 111111111111118888888,,,,,,,333333344444445555555 113,194 66 DDeeppoossiittss 44444444444444,,,,,,,222222222222223333333 44444447777777,,,,,,,111111122222226666666 44444448888888,,,,,,,333333377777779999999 47,990 48,459 44444448888888,,,,,,,111111133333335555555 48,786 49,528 44444449999999,,,,,,,333333344444448888888 46,886 77 OOtthheerr 77777777777777,,,,,,,111111155555553333333 77777776666666,,,,,,,777777711111111111111 77777775555555,,,,,,,555555588888888888888 71,706 70,976 77777770000000,,,,,,,333333355555558888888 68,660 68,495 66666668888888,,,,,,,999999999999997777777 66,308 88 AAllll ootthheerr ffoorreeiiggnneerrss 66666661111111,,,,,,,666666611111114444444 66666663333333,,,,,,,555555511111114444444 55555557777777,,,,,,,111111100000009999999 54,552 53,222 55555553333333,,,,,,,666666677777779999999 53,520 53,279 55555552222222,,,,,,,999999911111118888888 51,879 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 44444440000000,,,,,,,333333311111110000000 33333334444444,,,,,,,999999900000003333333 33333332222222,,,,,,,999999911111116666666 22222229999999,,,,,,,444444433333339999999 33333333333333,,,,,,,444444466666668888888 2222222,,,,,,,444444499999991111111 2222222,,,,,,,999999966666669999999 3333333,,,,,,,333333388888880000000 2222222,,,,,,,888888877777770000000 6666666,,,,,,,666666600000005555555 11 Negotiable and readily transferable 33333330000000,,,,,,,777777766666663333333 22222226666666,,,,,,,000000066666664444444 22222223333333,,,,,,,888888800000005555555 22222221111111,,,,,,,000000066666664444444 22222221111111,,,,,,,555555533333336666666 12 Outstanding collections and other 7777777,,,,,,,000000055555556666666 5555555,,,,,,,888888877777770000000 5555555,,,,,,,777777733333332222222 5555555,,,,,,,555555500000005555555 5555555,,,,,,,333333322222227777777 13 MEMO: Customer liability on 33333338888888,,,,,,,111111155555553333333 33333337777777,,,,,,,777777711111115555555 33333337777777,,,,,,,111111100000003333333 33333331111111,,,,,,,666666699999999999999 33333330000000,,,,,,,555555511111117777777 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 42,499 46,217 40,508 39,552' 37,546' 36,236' 37,430' 38,160 38,355 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 Dec. Mar. June Sept.P 1 Total 154,590 228,150 243,715 243,409 239,521 231,713 231,832 By borrower 2 Maturity of 1 year or less1 116,394 173,917 176,158 166,381 165,185 158,641 160,664 3 Foreign public borrowers 15,142 21,256 24,039 22,758 23,615 23,899 25,473 4 All other foreigners 101,252 152,661 152,120 143,623 141,570 134,742 135,191 5 Maturity of over 1 year1 38,197 54,233 67,557 77,027 74,335 73,072 71,168 6 Foreign public borrowers 15,589 23,137 32,521 39,247 38,164 37,425 36,741 7 All other foreigners 22,608 31,095 35,036 37,780 36,171 35,647 34,428 By area Maturity of 1 year or less1 8 Europe 28,130 50,500 56,117 58,398 60,391 55,656 57,914 9 Canada 4,662 7,642 6,211 6,015 7,531 6,135 6,052 10 Latin America and Caribbean 48,717 73,291 73,660 61,653 60,162 63,545 61,935 11 31,485 37,578 34,403 33,484 30,690 27,537 29,026 12 Africa 2,457 3,680 4,199 4,442 4,109 4,003 3,954 13 All other2 943 1,226 1,569 2,388 2,301 1,764 11,,778822 Maturity of over 1 year1 14 Europe 8,100 11,636 13,576 9,605 8,545 8,628 8,065 15 Canada 1,808 1,931 1,857 1,890 2,181 2,116 1,940 16 Latin America and Caribbean 25,209 35,247 43,888 57,069 55,372 53,507 53,125 17 1,907 3,185 4,850 5,323 5,221 5,203 5,215 18 Africa 900 1,494 2,286 2,033 1,963 1,996 1,665 19 All other2 272 740 1,101 1,107 1,053 1,622 1,157 • 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 • February 1986 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1983 1984 1985 AArreeaa oorr ccoouunnttrryy 11998811 11998822 Sept. Dec. Mar. June7 Sept. Dec. Mar. June Sept.? 1 Total 415.2 438.7 431.0 437.3 435.1 432.4' 411.9' 409.2' 411.0' 402^ 403.9 2 G-10 countries and Switzerland 175.5 179.7 168.8 168.0 166.0 157.9' 148.2' 148.0' 152.8' 146.8' 153.2 3 Belgium-Luxembourg 13.3 13.1 12.6 12.4 11.0 10.9 9.8 8.8 9.4 9.0 9.5 4 France 15.3 17.1 16.2 16.3 15.9 14.2 14.3 14.1 14.6 13.6 14.9 5 Germany 12.9 12.7 11.6 11.3 11.7 10.9 10.0 9.0 8.9 9.6 9.8 6 Italy 9.6 10.3 9.9 11.4 11.2 11.5 9.7 10.1 10.0 8.5' 8.4 7 Netherlands 4.0 3.6 3.6 3.5 3.4 3.0 3.4 3.9 3.7 3.7 3.4 8 Sweden 3.7 5.0 4.9 5.1 5.2 4.3 3.5 3.2 3.1 2.8' 3.1 9 Switzerland 5.5 5.0 4.2 4.3 4.3 4.2 3.9 3.9 4.2 4.0 4.1 10 United Kingdom 70.1 72.1 67.8 65.4 65.1 eo.e' 57.5' 60.(y 65.1' 65.V 68.1 11 Canada 10.9 10.4 8.9 8.3 8.6 8.9 8.1 7.9' 9.0 8.0 7.5 12 Japan 30.2 30.2 29.0 29.9 29.7 29.3 27.9 27.2 24.8' 21.9 24.3 13 Other developed countries 28.4 33.7 34.3 36.1 35.7 37.2' 36.4' 33.9' 33.0 32.5' 32.3 14 Austria 1.9 1.9 1.9 1.9 2.0 1.9 1.8 1.6 1.6 1.6 1.7 15 Denmark 2.3 2.4 3.3 3.4 3.4 3.1 2.9 2.2 2.1 1.9 2.1 16 Finland 1.7 2.2 1.8 2.4 2.1 2.3 1.9 1.9 1.8 1.8 1.8 17 Greece 2.8 3.0 2.9 2.8 3.0 3.3 3.2 2.9 2.9 2.9 2.8 18 Norway 3.1 3.3 3.2 3.3 3.2 3.2 3.2 3.0 2.9 2.9 3.4 19 Portugal 1.1 1.5 1.4 1.5 1.4 1.7 1.6 1.4 1.4 1.3 1.4 20 Spain 6.6 7.5 7.1 7.1 7.1 7.3 6.9 6.5 6.4' 5.9 6.2 21 Turkey 1.4 1.4 1.5 1.7 1.9 2.0 2.0 1.9 1.9 2.0 2.1 22 Other Western Europe 2.1 2.3 2.1 1.8 1.8 1.9 1.7 1.7 1.7 1.8 1.7 23 South Africa 2.8 3.7 4.7 4.7 4.8 4.7 5.0 4.5 4.2 3.9 3.3 24 Australia 2.5 4.4 4.4 5.5 5.2 5.8' 6.3' 6.2' 6.2 6.4' 5.8 25 OPEC countries2 24.8 27.4 27.2 28.9 28.6 27.(V 25.2' 25.8' 25.4' 23.8' 24.1 26 Ecuador 2.2 2.2 2.1 2.2 2.1 2.1 2.1 2.2 2.2 2.3 2.3 27 Venezuela 9.9 10.5 9.8 9.9 9.7 9.5 9.2 9.3 9.3 9.3 9.2 28 Indonesia 2.6 3.2 3.4 3.8 4.0 4.3' 4.CK 3.9' 3.8' 3.6T 3.6 29 Middle East countries 7.5 8.7 9.1 10.0 9.8 8.4 7.4 8.2 7.8 6.6' 6.7 30 African countries 2.5 2.8 2.8 3.0 3.0 2.7 2.5 2.3 2.3 2.2' 2.3 31 Non-OPEC developing countries 96.3 107.1 109.8 111.6 112.2 113.5' 112.7' 112.9' 111.8' 111.0' 111.1 Latin America 32 Argentina 9.4 8.9 9.5 9.5 9.5 9.2 9.1 8.7 8.6 8.6 9.3 33 Brazil 19.1 22.9 23.1 23.1 25.1 25.4 26.3 26.3 26.4 26.6 26.1 34 Chile 5.8 6.3 6.3 6.4 6.5 6.7 7.1 7.0 7.0 6.9 6.9 35 Colombia 2.6 3.1 3.2 3.2 3.1 3.0 2.9 2.9 2.8 2.7 2.6 36 Mexico 21.6 24.5 25.9 26.1 25.6 26.2' 26.2' 26.(K 25.7 25.6 25.2 37 2.0 2.6 2.4 2.4 2.3 2.3 2.2 2.2 2.2 2.1 2.0 38 Other Latin America 4.1 4.0 4.2 4.2 4.4 4.1 3.9 3.9 3.7 3.6 3.5 Asia China 39 Mainland .2 .2 .2 .3 .3 .6 .5 .7 .7 .3 1.1 40 Taiwan 5.1 5.3 5.2 5.3 4.9 5.4' 5.3' 5.3' 5.4' 5.5 5.2 41 .3 .6 .8 1.0 1.0 1.0 1.1 1.0 1.0 1.0 1.2 42 Israel 2.1 2.3 1.7 1.9 1.6 1.9 1.7 1.8 1.7 2.3 1.5 43 Korea (South) 9.4 10.9 10.9 11.3 11.1 11.3' 10.5' 10.9' 10^ 10.3' 10.6 44 Malaysia 1.7 2.1 2.8 2.9 2.8 2.9' 3.1' 3.0' 2.9' 3.C 2.9 45 Philippines 6.0 6.3 6.2 6.2 6.7 6.3 5.9 6.0 6.1 6.C 6.1 46 Thailand 1.5 1.6 1.8 2.2 2.1 1.9 1.8 1.8 1.7 1.6' 1.7 47 Other Asia 1.0 1.1 1.0 1.0 .9 1.1 l.C 1.2' 1.1 l.C 1.1 Africa 48 Egypt 1.1 1.2 1.4 1.5 1.4 1.4 1.2 1.2 1.1 1.0 1.0 49 Morocco .7 .7 .8 .8 .8 .8 .8 .8 .8 .8 .9 50 Zaire .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 2.3 2.4 2.4 2.3 2.2 1.9 1.9 2.1 2.2 2.0 2.0 52 Eastern Europe 7.8 6.2 5.3 5.3 4.9 4.9 4.5 4.4 4.3 4.3 4.6 53 U.S.S.R .6 .3 .2 .2 .2 .2 .2 .1 .2 .3 .2 54 Yugoslavia 2.5 2.2 2.3 2.4 2.3 2.3 2.3 2.3 2.2 2.2 2.5 55 Other 4.7 3.7 2.8 2.8 2.5 2.4 2.1 2.0 1.9 1.8 1.9 56 Offshore banking centers 63.7 66.8 68.7 70.5 71.4 74.6' 67.4' 67.0' 66.& 66.8' 61.2 57 Bahamas 19.0 19.0 21.6 21.8 24.6 27.5 23.8' 21.5 21.6 21.9' 16.8 58 Bermuda .7 .9 .8 .9 .7 .7 1.0 .9 .7 .9 .8 59 Cayman Islands and other British West Indies 12.4 12.9 10.5 12.2 12.0 12.2 11.1 11.7 12.4' 12.4 12.5 60 Netherlands Antilles 3.2 3.3 4.1 4.2 3.3 3.3 3.1 3.4 3.3 3.2 . 2.3 61 Panama4 7.7 7.6 5.7 6.0 6.3 6.6 5.7 6.8 5.7 5.5 6.2 62 Lebanon .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 .0 63 Hong Kong 11.8 13.9 15.2 15.0 14.4 13.9' 13.1' 12.8' 12.9' 13.1' 13.2 64 Singapore 8.7 9.2 10.5 10.3 10.0 10.3' 9.5 9.8 10.0 9.7' 9.4 65 Others5 .1 .0 .1 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 18.8 17.9 16.9 17.0 16.3 17.4' 17.4' 17.3 17.1' 17.4' 17.8 1. The banking offices covered by these data are the U.S. offices and foreign Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. as Bahrain and Oman (not formally members of OPEC). Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. Excludes Liberia. (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 4. Includes Canal Zone beginning December 1979. adjusted to exclude the claims on foreign branches held by a U.S. office or another 5. Foreign branch claims only. foreign branch of the same banking institution. The data in this table combine 6. Includes New Zealand, Liberia, and international and regional organizaforeign branch claims in table 3.14 (the sum of lines 7 through 10) with the 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. June 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 11,,447733 1,705 1,758 1,871 1,717 1,244 42 Bahamas 2 16 11 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 countries2'5. 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 • February 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. June 1 Total 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 3,0% 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 8,8% 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 % 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 Asia 758 698 764 977 900 %1 856 620 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 1,973 1,973 2,137 46 Bahamas 12 21 8 4 14 8 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 Asia 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 %8 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 Transactions, and area or country 1983 1984 Jan- Apr. May June July Aug. Oct. U.S. corporate securities STOCKS 1 Foreign purchases 69,770 60,704 62,257 5,147 6,520 6,471 7,181 6,366 4,802 7,232 2 Foreign sales 64,360 63,628 60,823 5,104 6,423 6,069 6,522 5,721 4,690 6,560 3 Net purchases, or sales (-) 5,410 -2,924 1,434 44 97 402 659 645 112 673 4 Foreign countries 5,312 -3,039 1,423 35 140 404 559 644 163 644 5 3,979 -2,975 -305 -160 -285 72 336 364 170 554 6 -97 -405 -252 24 17 26 -3 -41 -120 -82 7 1,045 -50 177 23 39 5 126 76 29 235 8 Netherlands -109 -315 -284 16 -51 -86 42 18 25 33 9 1,325 -1,490 -454 -48 -90 49 38 -28 -87 125 10 United Kingdom 1,799 -647 298 -191 -219 49 104 295 293 210 11 Canada 1,151 1,672 332 34 7 -62 66 68 34 -31 17. Latin America and Caribbean 529 493 1,153 169 247 132 119 109 -35 78 13 Middle East1 -808 -2,006 186 -90 53 106 53 35 54 8 14 Other Asia 395 -372 -46 91 101 174 -23 58 -26 -16 15 Africa 42 -23 13 -1 -8 13 25 9 0 -4 16 Other countries 24 171 91 -6 25 -31 -16 1 -34 55 17 Nonmonetary international and regional organizations 98 115 11 88 --4444 --11 110000 1 --5511 2288 BONDS2 18 24,000 39,853 65,342 4,562 6,789 5,319 8,502 5,547' 7,482 7,401 19 Foreign sales 23,097 26,612 34,673 3,135 3,697 3,943 4,254 3,741 3,632 2,783 20 Net purchases, or sales (-) 903 13,241 30,669 1,427 3,092 1,376 4,249 l,806r 3,850 4,618 21 Foreign countries 888 12,944 30,763 1,402 3,230 1,243 3,597 2,118' 4,176 4,772 V 909 11,793 27,956 1,622 2,752 1,199 3,210 1,834' 3,949 3,665 73 -89 207 229 18 0 -35 -2 169 42 8 24 Germany 344 1,731 701 162 -17 13 182 103 152 308 75 51 93 52 -9 -11 -9 -2 25 -4 0 76 583 644 2,176 65 71 93 492 243 154 249 7,7 United Kingdom 434 8,520 24,055 1,294 2,398 1,039 2,391 1,368' 3,519 3,037 78 123 -76 74 0 44 4 -4 -24 -31 42 79 Latin America and Caribbean 100 390 302 -83 178 27 39 -81 -64 81 30 Middle East1 -1,161 -1,026 -1,993 -509 -119 -507 -265 -80 -187 11 31 Other Asia 865 1,862 4,392 381 372 518 610 465 508 966 32 Africa 0 1 7 0 I 0 3 1 0 1 33 Other countries 52 0 25 -9 2 1 3 3 1 6 34 Nonmonetary international and regional organizations 15 297 -95 25 --113388 133 665511 --331122 --332266 --115544 Foreign securities 35 Stocks, net purchases, or sales (-) -3,765 -1,219 -3,210 -145 100 -174 -550 -213 -224 -72 36 Foreign purchases 13,281 14,597 16,069 1,446 1,764 1,632 1,580 1,689 1,538 2,172 37 Foreign sales 17,046 15,816 19,278 1,591 1,665 1,806 2,130 1,902 1,762 2,244 38 Bonds, net purchases, or sales (-) -3,239 -4,131 -4,019 -674 -1,059 -261 -589 305' -496 -690 39 36,333 57,312 67,135 5,674 7,448 6,691 7,147 6,959' 8,255 8,538 40 Foreign sales 39,572 61,443 71,153 6,348 8,507 6,952 7,736 6,654 8,751 9,228 41 Net purchases, or sales (—), of stocks and bonds .... -7,004 -5,350 -7,228 -819 -959 -434 -1,139 92' -720 -762 42 Foreign countries -6,559 -4,961 -7,734 -728 -1,123 -386 -1,368 302' -955 -750 43 -5,492 -8,740 -8,331 -827 -2,024 -680 -1,185 -258' -764 -579 44 -1,328 404 -1,421 22 -96 -157 -783 36 1 -26 45 Latin America and Caribbean 1,120 2,472 1,731 136 810 73 150 178 191 48 46 -855 1,252 202 -18 201 353 418 387 -400 -193 47 141 -107 -4 -5 2 13 18 9 -2 -5 48 Other countries -144 -242 90 -36 -15 14 13 -51 19 6 49 Nonmonetary international and regional organizations -445 -389 505 -91 116644 --4499 222299 --221100 223355 --1133 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 • February 1986 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1985 1985 Country or area 11998833 11998844 Jan.- Apr. May June July Aug. Sept. Oct.? Oct. Transactions, net purchases or sales (-) during period1 1 Estimated total2 3,693 21,447 21,193 -4,294 3,069 5,757 4,786 -3,345 6,902 -643 2 Foreign countries2 3,162 16,444 24,2% 2,219 4,337 5,757 5,364 1,027 4,357 -112 3 Europe2 6,226 11,081 4,786 1,798 686 1,025 975 953 958 -691 4 Belgium-Luxembourg -431 289 492 80 101 17 21 92 49 10 5 Germany2 2,450 2,958 1,720 293 838 415 725 937 294 17 6 Netherlands 375 454 203 -7 -73 10 148 386 127 -126 7 Sweden 170 46 1,059 30 157 775 119 -89 -33 -41 8 Switzerland2 -421 635 1,030 183 -135 143 -21 72 25 116 9 United Kingdom 1,966 5,234 -1,644 174 -865 -96 -761 -82 283 -735 10 Other Western Europe 2,118 1,466 1,926 1,045 663 -239 743 -363 214 68 11 Eastern Europe 0 0 0 0 0 0 0 0 0 0 12 Canada 699 1,526 248 334 113 6 7 -144 106 138 13 Latin America and Caribbean -212 1,413 3,433 467 581 205 156 524 562 125 14 Venezuela -124 14 203 10 -9 80 0 33 2 91 15 Other Latin America and Caribbean 60 528 1,663 179 463 123 -7 95 556 110 16 Netherlands Antilles -149 871 1,566 278 126 2 163 397 4 -76 17 -3,535 2,377 15,389 -343 2,891 4,516 4,307 -416 2,594 244 18 Japan 2,315 6,062 15,289 1,731 1,060 2,666 3,752 875 2,253 1,630 19 3 -67 102 13 57 10 10 -1 0 9 20 All other -17 114 337 -51 9 -6 -91 111 137 63 21 Nonmonetary international and regional organizations 535 5,001 -3,103 2,075 -1,268 -1 -577 -4,372 2,545 -530 22 International 218 4,610 -3,370 1,792 -1,057 -105 -219 -4,400 1,883 -430 23 Latin American regional 0 0 2 -3 5 0 0 0 -1 0 MEMO 24 Foreign countries2 3,162 16,444 24,2% 2,219 4,337 5,757 5,364 1,027 4,357 -112 75 Official institutions 779 515 5,987 -625 3,530 2,713 1,788 104 1,064 -1,205 26 Other foreign2 2,382 15,930 18,308 2,844 807 3,045 3,575 923 3,293 1,093 Oil-exporting countries 77 Middle East3 -5,419 6,277 -1,907 -851 52 1,422 -1 -1,132 -838 -817 28 Africa4 -1 -101 4 0 0 0 0 0 0 4 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 Nov. 30, 1985 Rate on Nov. 30, 1985 Rate on Nov. 30, 1985 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.0 Aug. 1985 France1 8.75 Nov. 1985 Norway 8.0 June 1983 Belgium. 8.75 Nov. 1985 Germany, Fed. Rep. of 4.0 Aug. 1984 Switzerland 4.0 Mar. 1983 Brazil... 49.0 Mar. 1981 Italy 15.0 Nov. 1985 United Kingdom2. Canada.. 9.10 Nov. 1985 Japan 5.0 Oct. 1983 Venezuela 8.0 Oct. 1985 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 May June July Aug. Sept. Oct. Nov. 1 Eurodollars 12.24 9.57 10.75 8.13 7.60 7.89 8.02 8.14 8.08 8.02 2 United Kingdom 12.21 10.06 9.91 12.61 12.38 12.01 11.42 11.49 11.49 11.50 3 Canada 14.38 9.48 11.29 9.77 ,9.58 9.33 9.16 9.10 8.73 8.85 4 Germany 8.81 5.73 5.96 5.87 5.66 5.31 4.75 4.64 4.77 4.82 5 Switzerland 5.04 4.11 4.35 5.15 5.14 5.07 4.64 4.59 4.53 4.07 6 Netherlands 8.26 5.58 6.08 6.90 6.58 6.29 5.80 5.72 5.89 5.90 7 France 14.61 12.44 11.66 10.15 10.18 9.97 9.79 9.57 9.29 8.95 8 Italy 19.99 18.95 17.08 14.91 15.00 14.37 14.36 13.95 14.16 14.29 9 Belgium 14.10 10.51 11.41 9.35 8.96 8.95 9.50 9.33 8.97 8.66 10 Japan 6.84 6.49 6.32 6.26 6.30 6.29 6.30 6.31 6.47 7.29 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • February 1986 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1985 CCoouunnttrryy//ccuurrrreennccyy 11998822 11998833 11998844 June July Aug. Sept. Oct. Nov. 1 Australia/dollar1 101.65 90.14 87.937 66.51 69.95 70.70 68.96 70.25 67.74 2 Austria/schilling 17.060 17.968 20.005 21.532 20.446 19.632 19.949 18.569 18.236 3 Belgium/franc 45.780 51.121 57.749 61.719 58.626 56.543 57.395 53.618 52.474 4 Brazil/cruzeiro 179.22 573.27 1841.50 5786.00 6236.19 6714.00 7453.33 8203.57 8913.95 5 Canada/dollar 1.2344 1.2325 1.2953 1.3676 1.3526 1.3575 1.3703 1.3667 1.3765 6 China, P.R./yuan 1.8978 1.9809 2.3308 2.8693 2.8809 2.9093 2.9722 3.0782 3.2086 7 Denmark/krone 8.3443 9.1483 10.354 10.9962 10.456 10.1459 10.2906 9.5880 9.3918 8 Finland/markka 4.8086 5.5636 6.0007 6.3660 6.0798 5.9464 6.0140 5.6836 5.5709 9 France/franc 6.5793 7.6203 8.7355 9.3414 8.8513 8.5323 8.6599 8.0641 7.9095 10 Germany/deutsche mark 2.428 2.5539 2.8454 3.0636 2.9083 2.7937 2.8381 2.6446 2.5954 11 Greece/drachma 66.872 87.895 112.73 136.00 131.75 131.75 136.74 145.74 153.037 12 Hong Kong/dollar 6.0697 7.2569 7.8188 7.7698 7.7527 7.7906 7.8043 7.7908 7.8042 13 India/rupee 9.4846 10.1040 11.348 12.441 12.031 11.898 12.126 12.033 12.1010 14 Ireland/pound1 142.05 124.81 108.64 102.19 107.79 111.43 109.55 117.00 119.19 15 Italy /lira 1354.00 1519.30 1756.10 1953.92 1900.33 1873.51 1903.42 1785.43 1753.72 16 Japan/yen 249.06 237.55 237.45 248.84 241.14 237.46 236.53 214.68 204.07 17 Malaysia/ringgit 2.3395 2.3204 2.3448 2.4685 2.4696 2.4644 2.4841 2.4529 2.4341 18 Netherlands/guilder 2.6719 2.8543 3.2083 3.4535 3.2732 3.1429 3.1921 2.9819 2.9230 19 New Zealand/dollar1 75.101 66.790 57.837 45.949 49.826 53.564 53.285 56.931 57.230 20 Norway/krone 6.4567 7.3012 8.1596 8.8255 8.4338 8.2487 8.3337 7.9099 7.8076 21 Portugal/escudo 80.101 111.610 147.70 176.15 169.77 167.34 172.5 164.59 162.963 22 Singapore/dollar 2.1406 2.1136 2.1325 2.2291 2.2109 2.2191 2.2268 2.1387 2.1084 23 South Africa/rand1 92.297 89.85 69.534 50.54 51.07 43.07 39.49 38.38 37.57 24 South Korea/won 731.93 776.04 807.91 875.00 876.46 885.09 847.46 894.49 893.35 25 Spain/peseta 110.09 143.500 160.78 173.42 167.97 164.49 168.91 161.712 159.658 26 Sri Lanka/rupee 20.756 23.510 25.428 27.433 27.327 27.377 27.430 27.421 27.449 27 Sweden/krona 6.2838 7.6717 8.2706 8.8565 8.4703 8.3106 8.3907 7.9557 7.8127 28 Switzerland/franc 2.0327 2.1006 2.3500 2.5721 2.4060 2.2962 2.3749 2.1692 2.1306 29 Taiwan/dollar n.a. n.a. 39.633 39.857 40.136 40.501 40.465 40.195 39.981 30 Thailand/baht 23.014 22.991 23.582 27.433 27.053 26.889 27.050 26.569 26.315 31 United Kingdom/pound1 174.80 151.59 133.66 128.08 138.07 138.40 136.42 142.15 143.96 MEMO 32 United States/dollar2 116.57 125.34 138.19 147.71 140.94 137.55 139.14 130.71 128.08 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 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 J M . I V C I H R A G E IL L M BR A A T D TI F N IE G L L D Y , , G JR e . n , e D ra e l p u C ty o u G ns e e n l eral Counsel J M E A D I M C W H E A S A R E L D L . C K J. . I C P E H R T E L T L I I N N L, E , , D D D e e p p ir u u e t t c y y t o D D r i i r r e e c c t t o o r r 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 OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Deputy Associate Director HELMUT F. WENDEL, Deputy Associate Director WILLIAM W. WILES, Secretary MARTHA BETHEA, Assistant Director BARBARA R. LOWREY, Associate Secretary ROBERT M. FISHER, Assistant Director JAMES MCAFEE, Associate Secretary DAVID B. HUMPHREY, Assistant Director SUSAN J. LEPPER, Assistant Director RICHARD D. PORTER, Assistant Director DIVISION OF CONSUMER PETER A. TINSLEY, Assistant Director 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 DIVISION OF BANKING CHARLES J. SIEGMAN, Senior Associate Director SUPERVISION AND REGULATION DAVID H. HOWARD, Deputy Associate Director ROBERT F. GEMMILL, Staff Adviser WILLIAM TAYLOR, Director PETER HOOPER III, Assistant Director THOMAS E. CIMENO, JR., Deputy Director' KAREN H. JOHNSON, Assistant Director WELFORD S. FARMER, Deputy Director2 RALPH W. SMITH, JR., Assistant Director FREDERICK R. DAHL, Associate Director DON E. KLINE, Associate Director FREDERICK M. STRUBLE, Associate Director STEPHEN C. SCHEMERING, Deputy Associate Director RICHARD SPILLENKOTHEN, Deputy Associate Director HERBERT A. BIERN, Assistant Director ANTHONY CORNYN, Assistant Director JAMES I. GARNER, Assistant Director JAMES D. GOETZINGER, Assistant Director ROBERT S. PLOTKIN, Assistant Director SIDNEY M. SUSSAN, Assistant Director LAURA M. HOMER, Securities Credit Officer 1. On loan from the Federal Reserve Bank of Boston. Digitized for FR2A. SOEn Rlo an from the Federal Reserve Bank of Richmond. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

72 Federal Reserve Bulletin • February 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 RICHARD G. DAVIS, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary DONALD L. KOHN, Associate Economist NANCY M. STEELE, Deputy Assistant Secretary DAVID E. LINDSEY, Associate Economist MICHAEL BRADFIELD, General Counsel MICHAEL J. PRELL, Associate Economist JAMES H. OLTMAN, Deputy General Counsel KARL A. SCHELD, Associate Economist JAMES L. KICHLINE, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist (International) SHEILA L. TSCHINKEL, Associate Economist J. ALFRED BROADDUS, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL ROBERT L. NEWELL, First District HAL C. KUEHL, Seventh District JOHN F. MCGILLICUDDY, Second District WILLIAM H. BOWEN, Eighth District GEORGE A. BUTLER, Third District DEWALT H. ANKENY, JR., Ninth District JULIEN L. MCCALL, Fourth District F. PHILLIPS GILTNER, Tenth District JOHN G. MEDLIN, JR., Fifth District NAT S. ROGERS, Eleventh District BENNETT A. BROWN, 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

A73 and Advisory Councils CONSUMER ADVISORY COUNCIL MARGARET M. MURPHY, Columbia, Maryland, Chairman LAWRENCE S. OKINAGA, Honolulu, Hawaii, Vice Chairman RACHEL G. BRATT, Medford, Massachusetts FREDERICK H. MILLER, Norman, Oklahoma JONATHAN BROWN, Washington, D.C. ROBERT F. MURPHY, Detroit, Michigan MICHAEL S. CASSIDY, New York, New York HELEN NELSON, Mill Valley, California THERESA FAITH CUMMINGS, Springfield, Illinois SANDRA PARKER, Richmond, Virginia NEIL J. FOGARTY, Jersey City, New Jersey JOSEPH L. PERKOWSKI, Centerville, Minnesota STEVEN M. GEARY, Jefferson City, Missouri BRENDA L. SCHNEIDER, Detroit, Michigan KENNETH HALL, Jackson, Mississippi JANE SHULL, Philadelphia, Pennsylvania STEVEN W. HAMM, Columbia, South Carolina TED L. SPURLOCK, New York, New York ROBERT J. HOBBS, Boston, Massachusetts MEL STILLER, Boston, Massachusetts ROBERT W. JOHNSON, West Lafayette, Indiana CHRISTOPHER J. SUMNER, Salt Lake City, Utah JOHN M. KOLESAR, Cleveland, Ohio EDWARD J. WILLIAMS, Chicago, Illinois EDWARD N. LANGE, Seattle, Washington MERVIN WINSTON, Minneapolis, Minnesota FRED S. MCCHESNEY, Atlanta, Georgia MICHAEL ZOROYA, St. Louis, Missouri THRIFT INSTITUTIONS ADVISORY COUNCIL RICHARD H. DEIHL, Los Angeles, California, President ELLIOTT G. CARR, Harwich Port, Massachusetts JOHN A. HARDIN, Rock Hill, South Carolina M. TODD COOKE, Philadelphia, Pennsylvania FRANCES LESNIESKI, East Lansing, Michigan HAROLD W. GREENWOOD, JR., Minneapolis, Minnesota MICHAEL R. WISE, Denver, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 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

A75 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. 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- Alice in Debitland VENTION, AND INTEREST RATES: AN EMPIRICAL IN- Consumer Handbook on Adjustable Rate Mortgages VESTIGATION, by Bonnie E. Loopesko. November Consumer Handbook to Credit Protection Laws 1983. Out of print. The Equal Credit Opportunity Act and Business Credit 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET The Equal Credit Opportunity Act and . . . Credit Rights in INTERVENTION: A REVIEW OF THE LITERATURE, by Housing Ralph W. Tryon. October 1983. 14 pp. Fair Credit Billing 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Federal Reserve Glossary INTERVENTION: APPLICATIONS TO CANADA, GERMA- Guide to Federal Reserve Regulations NY, AND JAPAN, by Deborah J. Danker, Richard A. How to File A Consumer Credit Complaint Haas, Dale W. Henderson, Steven A. Symansky, and If You Borrow To Buy Stock Ralph W. Tryon. April 1985. 27 pp. If You Use A Credit Card 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- Instructional Materials of the Federal Reserve System MY, by Darrell Cohen and Peter B. Clark. January Series on the Structure of the Federal Reserve System 1984. 16 pp. Out of print. The Board of Governors of the Federal Reserve System 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF The Federal Open Market Committee FINANCIAL DEREGULATION, INTERSTATE BANKING, Federal Reserve Bank Board of Directors AND FINANCIAL SUPERMARKETS, by Stephen A. Federal Reserve Banks Rhoades. February 1984. Out of print. Organization and Advisory Committees 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- U.S. Currency LINES, AND THE LIMITS OF CONCENTRATION IN LO- What Truth in Lending Means to You CAL BANKING MARKETS, by James Burke. June 1984. 14 pp. 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN THE UNITED STATES, by Thomas D. Simpson and STAFF STUDIES: Summaries Only Printed in the Patrick M. Parkinson. August 1984. 20 pp. Bulletin 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF Studies and papers on economic and financial subjects that THE LITERATURE, by John D. Wolken. November are of general interest. Requests to obtain single copies of 1984. 38 pp. the full text or to be added to the mailing list for the series 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAYmay be sent to Publications Services. MENT COSTS, by William Dudley. November 1984. 15 pp. 142. MERGERS AND ACQUISITIONS BY COMMERCIAL Staff Studies 115-125 are out of print. BANKS, 1960-83, by Stephen A. Rhoades. December 1984. 30 pp. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- THE ELECTRONIC FUND TRANSFER ACT: RECENT DENCE ON COMPETITION AND PERFORMANCE IN SURVEY EVIDENCE, by Frederick J. Schroeder. April BANKING MARKETS, by Timothy J. Curry and John T. 1985. 23 pp. Rose. Jan. 1982. 9 pp. 144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CON- 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- KET INTERVENTION, by Donald B. Adams and Dale ING AND EQUAL CREDIT OPPORTUNITY LAWS, by W. Henderson. August 1983. 5 pp. Gregory E. Elliehausen and Robert D. Kurtz. May 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 1985. 10 pp. VENTION: JANUARY-MARCH 1975, by Margaret L. 145. SERVICE CHARGES AS A SOURCE OF BANK INCOME Greene. August 1984. 16 pp. AND THEIR IMPACT ON CONSUMERS, by Glenn B. 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- Canner and Robert D. Kurtz. August 1985. 31 pp. VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF garet L. Greene. October 1984. 40 pp. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- by Thomas F. Brady. November 1985. 25 pp. VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) L. Greene. August 1984. 36 pp. INDEXES OF THE MONETARY AGGREGATES, by Helen 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- T. Farr and Deborah Johnson. December 1985. 42 pp. TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF BLES: A REVIEW OF THE LITERATURE, by Victoria S. THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- Farrell with Dean A. DeRosa and T. Ashby McCown. TION RESULTS, by Flint Brayton and Peter B. Clark. January 1984. Out of print. December 1985. 17 pp. 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- DEUTSCHE MARK INTERVENTION, by Laurence R. Jacobson. October 1983. 8 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

REPRINTS OF BULLETIN ARTICLES Survey of Consumer Finances, 1983: A Second Report. Most of the articles reprinted do not exceed 12 pages. 12/84. Union Settlements and Aggregate Wage Behavior in the 1980s. 12/84. The Commercial Paper Market since the Mid-Seventies. 6/82. The Thrift Industry in Transition. 3/85. Foreign Experience with Targets for Money Growth. 10/83. U.S. International Transactions in 1984. 5/85. Intervention in Foreign Exchange Markets: A Summary of A Revision of the Index of Industrial Production. 7/85. Ten Staff Studies. 11/83. Financial Innovation and Deregulation in Foreign Industrial A Financial Perspective on Agriculture. 1/84. Countries. 10/85. Survey of Consumer Finances, 1983. 9/84. Recent Developments in the Bankers Acceptance Market. Bank Lending to Developing Countries. 10/84. 1/86. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 Index to Statistical Tables References are to pages A3-A68 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at Reserve Banks and at foreign central banks 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 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 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 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 Real 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 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

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

A79 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 James E. Haas 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 Marcus Alexis 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 G. 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 | Joel L. Koonce, Jr. Houston 77252 | J Z- Rowe San Antonio 78295 f Thomas H. Robertson SAN FRANCISCO 94120 Alan C. Furth Robert T. Parry 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 060%; 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. t Several branch chairmanships had not been determined at the time the BULLETIN went to press. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories 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