Federal Reserve Bulletin, 1986-05

VOLUME 72 • NUMBER 5 • MAY 1986 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield • S. David Frost • Griffith L. Garwood • James L. Kichline • Edwin M. Truman Naomi P. Salus, Coordinator The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section 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 287 U.S. INTERNATIONAL TRANSACTIONS fairs of the House Committee on Govern- IN 1985 ment Operations, March 4, 1986. The U.S. current account deficit reached a 312 Preston Martin, Vice Chairman, Board of record level in 1985, attributable largely to Governors, reviews the problems being exthe continuing deterioration in the interna- perienced by banks in agricultural commutional price competitiveness of U.S. indus- nities and discusses some of the main points try that has marked the past five years. of a study made by Board staff of farm credit conditions and their effect on farm banks, before the Senate Committee on 298 TREASURY AND FEDERAL RESERVE Banking, Housing, and Urban Affairs, FOREIGN EXCHANGE OPERATIONS March 11, 1986. The dollar declined substantially against 315 Frank E. Morris, President, Federal Remost currencies during the three months serve Bank of Boston, comments on the ended January 1986, falling 9 percent Bank's view of the outlook for the national against both the German mark and the economy and for New England and says Japanese yen. that 1986 is expected to be a strong year, before the Subcommittee on Domestic 303 STAFF STUDIES Monetary Policy of the House Committee on Banking, Finance and Urban Affairs, "Statistical Cost Accounting Models in March 19, 1986. Banking: A Reexamination and an Application" reexamines the statistical cost ac- 316 Robert H. Boykin, President, Federal Recounting model, evaluates previous studies serve Bank of Dallas, discusses the sharp that have used the model, and applies the rise in the unemployment rate in Texas in correctly specified model to a sample of February and says that economic condicommercial banks. tions are not worsening as rapidly as an increase of 2 percentage points in unem- 305 INDUSTRIAL PRODUCTION ployment would indicate although the Texas economy is weakening because of the Industrial production declined an estimated decline in oil prices, before the Subcommit- 0.6 percent in February. tee on Domestic Monetary Policy of the House Committee on Banking, Finance and 307 STATEMENTS TO CONGRESS Urban Affairs, March 19, 1986. Frederick R. Dahl, Associate Director, Di- 318 Robert T. Parry, President, Federal Revision of Banking Supervision and Regula- serve Bank of San Francisco, speaks on the tion, Board of Governors, discusses the employment picture in California and says role of the Federal Reserve in implementing that the sharp jump in the unemployment the Bank Export Services Act and says that rate in California in February belies the the Board wishes to optimize the use of underlying strength of the state's economy, export trading companies in promoting the before the Subcommittee on Domestic export of goods and services from the Unit- Monetary Policy of the House Committee ed States, before the Subcommittee on on Banking, Finance and Urban Affairs, Commerce, Consumer, and Monetary Af- March 19, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 ANNOUNCEMENTS A69 GUIDE TO TABULAR PRESENTATION, STATISTICAL RELEASES, AND SPECIAL Resignation of Vice Chairman Preston Mar- TABLES tin as a member of the Board of Governors. Change in the discount rate. A80 BOARD OF GOVERNORS AND STAFF Amendments to Regulations D and Q. A82 FEDERAL OPEN MARKET COMMITTEE Changes in Board staff. AND STAFF; ADVISORY COUNCILS 325 LEGAL DEVELOPMENTS A84 FEDERAL RESERVE BOARD PUBLICATIONS Various bank holding company, bank service corporation, and bank merger orders; A87 INDEX TO STATISTICAL TABLES and pending cases. A89 FEDERAL RESERVE BANKS, BRANCHES, AI FINANCIAL AND BUSINESS STATISTICS AND OFFICES A3 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A90 MAP OF FEDERAL RESERVE SYSTEM A53 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1985 Robert A. Johnson of the Board's Division of acute difficulties in servicing their external debt. International Finance prepared this article. Of these factors, the cumulative increase in the real value of the dollar over the past five years The U.S. current account deficit reached a re- appears to have been the proximate cause of the cord level in 1985 that is attributable largely to continued deterioration of the U.S. current acthe deterioration in the international price com- count balance in 1985. petitiveness of U.S. industry that has marked the Some other factors that have influenced the first half of this decade. That deterioration in current account in the past do not appear to have turn has resulted from forces that contributed to been so important in 1985. In particular, during the sustained large increase of the foreign ex- 1983 and 1984, when the U.S. current account change value of the dollar, which peaked in the deficit expanded most rapidly, the rate of growth first quarter of 1985. The appreciation of the of real gross national product in the United dollar since the late 1970s was associated with States was substantially higher than that in other anti-inflationary monetary policies throughout industrial countries. In 1985, despite the converthe industrial world; relatively faster growth of gence of the rates of growth of economic activity demand in the United States because it has here and abroad (chart 1), the U.S. current pursued a more stimulative fiscal policy than account deficit again increased, though at a lesshave other countries; and substantial differences er rate. in the attractiveness between financial instru- That the U.S. current account deficit expandments denominated in dollars and securities de- ed further in 1985 appears to reflect primarily the nominated in other currencies. continuing effects of the high dollar on the price Several factors have recently combined to lay competitiveness of U.S. industry in international a foundation for improvement in the U.S. current markets. The price-adjusted weighted-average account balance in the latter part of 1986: con- exchange value of the dollar rose nearly 80 vergence in real rates of economic growth here percent against major foreign currencies from the and abroad; a reduction of the exchange value of the dollar over the past year; efforts to rectify 1. Growth of real GNP imbalances in the global distribution of fiscal stimulus, particularly through a reduction of the U.S. federal budget deficit; and a marked reduction in world oil prices. INFLUENCES ON U.S. INTERNATIONAL TRANSACTIONS In recent years the U.S. current account has responded to movements in exchange rates, Seasonally adjusted quarterly data. 1. The GNP of foreign industrial countries is the weighted-average growth of economic activity that has been rela- GNP for the Group of Ten countries besides the United States and tively more rapid in the United States than in Switzerland. Weights are proportional to each country's share in world exports plus imports during 1972-76. The same countries and many of its trading partners, changes in the weights are used throughout this article in weighted-average indexes dollar price of oil, and a sharp reduction in of consumer prices and interest rates in foreign industrial countries and in indexes of the exchange value of the dollar against the imports by developing countries experiencing currencies of foreign industrial economies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 Federal Reserve Bulletin • May 1986 2. Foreign exchange value of the U.S. dollar and a positive differential between U.S. long-term real long-term interest rate differential real interest rates and a weighted average of March 1973 = 100 Percent comparable foreign interest rates (chart 2). This differential was associated, in the first instance, with monetary restraint exercised by the Federal Reserve and subsequently with an expansionary U.S. fiscal policy. The decline of the dollar in 1985 and a narrowing in the long-term real interest rate differential accompanied a slowing of U.S. economic activity and the expected easing of domestic credit demands in the face of continued large federal budget deficits. On the measure shown in the chart, the long-term real interest 1. The exchange value of the U.S. dollar is the index of its weightedrate differential declined from more than 275 average exchange value against currencies of the other Group of Ten countries plus Switzerland, using 1972-76 total trade weights. basis points in February 1985 to about 75 basis 2. Interest rates are those on long-term government or public points at year-end. The relationship between the authority bonds adjusted for the expected rate of inflation estimated by a 36-month centered moving average of actual inflation (staff exchange rate and real interest rate differentials estimates have been made when needed). The differential is calculated has not always been dominant, however. From by subtracting from the U.S. rate the trade-weigh ted average rate for the other Group of Ten countries plus Switzerland. the latter half of 1982 to the end of 1984, the dollar continued to appreciate as the real interest beginning of 1980 through February 1985, when differential narrowed. the dollar peaked. Since, over the same period, The belief of investors that the United States consumer prices on average have risen only was a safe haven for the accumulation of wealth slightly more abroad than in the United States, may have accounted for some of the appreciation the prices of U.S. goods relative to foreign goods of the dollar in the first half of the 1980s. Measurhave risen in line with the rise in the exchange ing variations in the market's assessments of the rate. relative safety of investing in the United States is Beginning in March 1985, the dollar has depre- difficult; but such variations appear to have ciated, with several interruptions, through the contributed to the dollar's strength at times. For early part of 1986. Between February and the example, residents of developing countries that end of 1985, the nominal and the price-adjusted have experienced deteriorating macroeconomic values of the dollar both fell nearly 20 percent. conditions may have feared that conditions for The eventual effect on the U.S. current account domestic investment would deteriorate further or of this improvement in the international price that restrictions might be imposed on their ability competitiveness of U.S. producers is likely to be to relocate capital. At the same time this version delayed, according to the widely held belief that of the "safe haven" hypothesis is not a complete changes in prices affect international trade only explanation of the dollar's appreciation. One after some time. In the short run, foreign produc- must also explain why investors chose to invest ers may choose to narrow their profit margins, in dollar instruments rather than in instruments denominated in the currencies of other industrial which have been ample in recent years, in order nations, whose investment climate did not show to maintain their competitive position in the U.S. a marked deterioration. market. Thus even with the drop in dollar prices owing to the depreciation, U.S. producers may not at first be able to improve their share of either domestic or international markets. THE INFLUENCE OF The prolonged real appreciation of the dollar MACROECONOMIC POLICY and its recent depreciation are difficult to explain fully, but several factors clearly have been at Those factors that directly influence U.S. interwork. First of all, the rise in the dollar that began national transactions, such as prices, interest in 1980 coincided roughly with the emergence of rates, output growth, and the exchange rate, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1985 289 3. Fiscal stimulus activity converged as the fiscal impulse, defined Change in the ratio from year to year as the change in the ratio of the structural budget deficit to GNP, diminished in the United States while the fiscal contraction in West Germany decelerated and Japanese deficit reduction proceeded steadily. A sustained period of lower inflation rates in the industrial countries and the recent weakness in commodity prices have alleviated concern over the credibility of disinflationary policies, and policymakers throughout the industrial world have increasingly focused on the structural The fiscal stimulus is defined as the change from year to year in the imbalances in the world economy. The anratio of the structural budget deficit to GNP. SOURCE. Organisation for Economic Co-operation and Develop- nouncement by the Group of Five finance minisment, Economic Outlook, vol. 38 (December 1985). ters and central bank governors in late September 1985 made clear their high priority on themselves reflect economic policies in the Unit- adjustment of the exchange value of the dollar as ed States and abroad. In the early 1980s, mone- a means of fostering external balance. They also tary policy in the industrial countries generally emphasized the need to reduce fiscal stimulus in sought to reduce inflation, while fiscal policy was the United States as a step toward this goal. In expansionary in the United States and contrac- December, legislation was enacted to eliminate tionary in most foreign industrial countries (chart the federal budget deficit in stages by 1991. Since 3). This constellation of policies produced a then, long-term dollar interest rates have fallen period of high real interest rates, a lessening in further and so has the exchange value of the worldwide inflation (chart 4), and an apprecia- dollar. tion of the dollar. In addition, the divergence in fiscal policies between the United States and other large industrial countries contributed to the THE CURRENT ACCOUNT: differentials in real GNP growth—particularly in MERCHANDISE TRADE 1983 and 1984, when the tax cuts of the Economic Recovery Tax Act of 1981 began to take hold The U.S. merchandise trade deficit reached and the buildup of U.S. defense expenditure nearly $125 billion in 1985, following deficits of gathered momentum. $114 billion in 1984 and $67 billion in 1983 (table From the last quarter of 1984 through the end 1). The value of shipments of nonagricultural of 1985, real interest rate differentials narrowed; exports increased slightly, largely because prices moreover, the real growth rates of economic rose; volume was roughly unchanged. The volume of exports of civilian aircraft and shipments of automotive products to Canada increased 4. U.S. and foreign inflation rates somewhat in 1985. Excluding those exports, the Percent change in prices from year earlier volume of nonagricultural exports fell, particularly because of declines in industrial supplies, business machinery, and consumer goods. Much of those declines reflected the lagged effect of the high exchange value of the dollar on the price competitiveness of U.S. goods. The value of nonagricultural exports is expected to increase beginning in 1986 as a decline in the foreign-currency price of U.S. exports (re- 1975 1980 1985 flecting the depreciation of the dollar since the Seasonally adjusted quarterly data, based on consumer price indexfirst quarter of 1985) induces foreign purchasers es. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 Federal Reserve Bulletin • May 1986 1. U.S. merchandise trade Billions of dollars, seasonally adjusted annual rate SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. to increase their purchases of tradable goods supplies was especially influenced by an actual produced in the United States. decline in steel, which was in part a response to The value of U.S. agricultural exports declined negotiated restrictions on foreign exports of steel nearly 25 percent in 1985 as prices fell 10 percent to the U.S. market. Virtually all of the 6 percent and volume dropped 15 percent. Ample foreign rise in the volume of total non-oil imports resultsupplies, a relatively high level of U.S. govern- ed from increases in automotive imports from ment price supports for some crops, and the Japan and Western Europe and from increases in strength of the dollar combined to hamper U.S. other consumer goods. farmers in marketing their goods abroad (charts 5 The unit value of non-oil imports declined and 6). slightly between 1984 and 1985 (chart 7). Toward Non-oil imports rose to more than $287 billion the end of 1985, prices of imported manufactured in 1985. This increase was significantly smaller goods turned up after declining for more than a than the one between 1983 and 1984 and reflected year. They are expected to maintain this trend, a slowing in the growth of demand in the United reflecting the depreciation of the dollar during States associated with the decline in the growth the past 12 months; and the growth of non-oil of real GNP from more than 6 percent in 1984 to imports is expected to continue to slow as U.S. a little over 2 percent in 1985. The volumes of purchasers reduce their demand for foreign comimports of industrial supplies, capital goods, and modities in reaction to their rising prices. foods were roughly unchanged from the previous year. The leveling off of imported capital goods was largely a consequence of a decline in the rate of growth of producers' durable equipment pur- 6. Volume of U.S. exports chases; the deceleration of imports of industrial 5. U.S. export prices Ratio scale, 1980= 100 1981 1983 1985 Seasonally adjusted quarterly data. Seasonally adjusted quarterly data; index of unit values. SOURCES. U.S. Department of Commerce, Bureau of Economic SOURCE. U.S. Department of Commerce, Bureau of the Census. Analysis and Bureau of the Census. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1985 291 7. U.S. non-oil imports residents to switch from domestic to foreign goods. In addition to the direct competitive effects of exchange rates, several potential factors may have been responsible for the deeper import penetration in 1983 and 1984. First, some evidence suggests that imports are unusually responsive to increases in demand, such as were occurring at the time as part of the recovery from the 1982 recession. Second, the inability of U.S. import-competing industries to respond promptly to changes in demand may have limited the domestic production of importable goods. Third, the relatively slack pace of economic activity 1981 1983 1985 abroad may have improved the abilit> of foreign- Seasonally adjusted quarterly data. ers to meet the increment in U.S. demand. SOURCES. U.S. Department of Commerce, Bureau of Economic Analysis and Bureau of the Census. 2. Import penetration Import Penetration The recent trends in the growth of non-oil imports into the United States are more fully illuminated by examination of the sectoral pattern of import-penetration ratios over the last five years (table 2). The ratio of capital goods imports to total U.S. expenditures for producers' durable equipment (the import-penetration ratio for that sector) increased markedly over the period, especially in the latter half of 1983 and in the first part of 1984. A similar pattern is evident in the ratio of consumer goods imports to total personal consumption expenditures: it increased 3 percentage points from the first quarter of 1983 to the fourth quarter of 1984. Changes in both of these measures of the significance of imports can be viewed in relation to the proximate determinants of imports— namely, the rate of real growth in domestic demand and the real exchange rate (table 2, 1. These data are indexes of the foreign exchange value of the dollar (1980 = 100). The indexes are priced-adjusted: the weightedcolumns 1 and 2). The deepening of import average index of the nominal exchange value of the dollar against the penetration in 1983 and 1984 coincides with an currencies of the G-10 foreign industrial countries are multiplied by relative consumer prices. The relative consumer prices are constructacceleration of the rate of growth of real economed by dividing the U.S. consumer price index by a weighted-average ic activity from the recession of 1982. An import index of foreign consumer prices. 2. The capital goods import-penetration ratio is constructed by ratio need not rise with economic activity bedividing merchandise imports of capital goods, excluding autos and cause imports could increase as well as total trucks, by producers' durable equipment expenditures. The importpenetration ratio for consumer goods is constructed by dividing expenditures, leaving the ratio unchanged. Howimports of consumer goods, excluding food and autos, by personal ever, the sustained real appreciation of the dollar consumption expenditures less food and motor vehicle expenditures. over this period was a strong inducement to U.S. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 Federal Reserve Bulletin • May 1986 Finally, in the medium term, the expansion of 8. Oil imports U.S. capacity may have been impeded by high Ratio scale, 1980=100 real interest rates, by concern that the strength of the dollar would reinforce the switch to foreign products, and by fears of U.S. producers that the expected increase in the competitiveness of foreign firms would be permanent. The establishment of distribution facilities in the U.S. market and the cultivation of customer relationships in this country by foreign firms that have entered or broadened their presence in the United States in recent years ensure stiff competition for U.S. Seasonally adjusted quarterly data. producers even after the recent fall in the dollar SOURCES. U.S. Department of Commerce, Bureau of Economic Analysis and Bureau of the Census. begins to have its beneficial effects. poned their purchases for inventory because Oil Imports they anticipated a fall in prices. The direct effect of the recent decline in oil Oil imports totaled $50 billion in 1985, down $7.5 prices on the U.S. current account is likely to be billion from 1984. The average price of imported significant. It will, however, be partially offset by oil fell during 1985 and has fallen further since a higher volume of imports for several reasons. December, when Saudi Arabia refused to contin- First, higher consumption may result from a shift ue to guarantee oil prices by limiting its output to oil in response to its falling price. Second, because doing so left it with inadequate reve- domestic production may decrease in response nues. The value of oil imports was also lower in to lower prices. Finally, lower oil prices may 1985, largely because import volume declined, reduce production costs and stimulate economic primarily in the first quarter (chart 8). This drop activity, and with it an increase in demand that appeared to be the effect of a temporary rise in cannot be fully met by domestic suppliers. At the price after a reduction in supply to world markets same time, inflation should ease as prices of by the Soviet Union coupled with an increase in petroleum products for both personal and indusdemand in Western Europe due to a particularly trial use fall. The decline in the price of oil thus severe winter. In response, firms may have post- may offset some, if not all, of the rise in consum- 9. U.S. nonagricultural exports, by area1 Ratio scale, 1979 = 100 1. Data for 1980-82 are annual. Data for 1983-85 are quarterly at 3. Hong Kong, Korea, Singapore, and Taiwan. seasonally adjusted annual rates. SOURCE. U.S. Department of Commerce, Bureau of Economic 2. Total U.S. nonagricultural exports to all countries. Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1985 293 10. U.S. non-oil imports, by area1 Ratio scale, 1979= 100 1. Data for 1980-82 are annual. Data for 1983-85 are quarterly at 3. Hong Kong, Korea, Singapore, and Taiwan. seasonally adjusted annual rates. SOURCE. U.S. Department of Commerce, Bureau of Economic 2. Total U.S. non-oil imports from all countries. Analysis. er and producer prices that is expected from the activity to its trading partners via strong import depreciation of the dollar. demand. Most notable were the increases in imports from Japan and the developing countries in the Far East. The expansion of imports from Regional Analysis Latin America was clearly beneficial to countries in that region that were struggling to service their In the first half of the decade, the regional external debt. pattern of U.S. nonagricultural exports displayed In 1985, the growth of U.S. imports slackened a variety of changes. Shipments to Canada, as economic activity in the United States slowed. Japan, and developing countries in the Far East Imports from Japan rose $5.3 billion during the increased as domestic demand in each of those year, less than a third of the advance in 1984. regions expanded. Shipments to Western Europe Similarly, imports from Western Europe inchanged little in value, reflecting the slackening creased $5.1 billion in 1985, compared with $16.5 in economic activity in that region (chart 9). billion the previous year. Imports from develop- Exports to Latin America rebounded in 1983 and ing countries in the Far East leveled in 1985, at 1984 after a steep decline in 1982, when several $37.5 billion, after increasing $8.9 billion the year countries in the region experienced debt-servic- before. As the lagged effects of the decline in the ing difficulties. In 1985, shipments to Canada, dollar reinforce these trends, foreign countries, Western Europe, and Latin America increased which have relied on exports to the United States slightly while those to developing countries in to stimulate economic activity, will need to ex- Asia declined a little. U.S. exports of nonagricul- pand domestic demand to sustain their growth tural products to Japan rose a bit, but that rates. advance was offset by a decline in agricultural exports. Nonagricultural exports to Mexico in- THE U.S. INTERNATIONAL INVESTMENT creased nearly $2 billion during the year. POSITION AND THE Over the past five years, the United States has NONTRADE CURRENT ACCOUNT expanded its non-oil imports from all of the areas considered here, especially so during 1983 and The U.S. current account deficits of the last 1984, when real GNP growth in the United States three years have brought about a net transfer of increased sharply (chart 10). During that period, financial wealth abroad, thereby rapidly eroding the United States exported growth in economic the recorded U.S. position as a net creditor Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 Federal Reserve Bulletin • May 1986 (table 3). According to official statistics, the 4. U.S. nontrade current account transactions1 United States has become a net debtor for the Billions of dollars, seasonally adjusted annual rate first time since World War I. The deterioration in the overall U.S. net investment position has been concentrated in portfolio investments. This development corresponds to the increase in the Service transactions, net.. importance of securities transactions in the fi- Net investment income . nancing of the U.S. capital account surplus, a -. "Net direct investment income theme explored later. Other, net Net military The net recorded U.S. international invest- Other services, net ment position may be a serious misestimate— Unilateral transfers one way or the other—of the true magnitude of Private transfers U.S. government grants and U.S. net indebtedness. Difficulties in measuring pensions international trade and financial flows require the 1. Components may not add to totals because of rounding. inclusion of a statistical discrepancy, which com- SOURCE. U.S. Department of Commerce, Bureau of Economic pensates for incomplete or incorrect reporting of Analysis. current account transactions, capital account transactions, or both, and serves to balance the Other inaccuracies may introduce an overaccount. If the cumulative unrecorded transac- statement of U.S. net indebtedness. For intions result entirely from unreported capital stance, U.S. gold holdings are valued at the flows, then U.S. net indebtedness is significantly official price of $42 per ounce rather than at greater than is specifically reported in the ac- market prices, which are currently near $350 per count and the United States became a net debtor ounce. Similarly, foreign direct investment in the earlier (see table 3). United States is relatively more recent than U.S. direct investment abroad, and the United States 3. International investment position of the United States1 is a sizable net creditor in direct investment. Therefore, the practice of recording direct in- Billions of dollars vestment at book value rather than market value Item 1982 1983 1984 1985' may act to overstate the extent of U.S. net Total, net international indebtedness. 147.0 106.2 28.2 -60.0 j The significant changes in the U.S. net invest- Net direct investment 97.1 89.9 73.8 0 75.0 ment position in recent years have also influ- Other recorded portfolio, net 26.1 -11.2 -73.9 -165.0 Gold, SDRs, and IMF 23.7 - % 27.5 28.3 30.0 enced the balance of nontrade current account Cumulative unrecorded |l|gj transactions2 jw^l -109.0 -120.5 -145.2 -175.0 transactions, shown in table 4. The value of Recorded position plus "other net investment income" fell $7.8 billion cumulative unrecorded transactions 38.0 | -14.3 -117.0 -235.0 from 1984 to 1985, largely because of a fall in net interest receipts on portfolio investments. The 1. Components may not add to totals because of rounding. Positive increase in net direct investment receipts of figures denote U.S. investment abroad; negative figures indicate foreign investment in the United States. All data except those for 1985 $13.4 billion in 1985 includes significant unrealinclude estimates for gains or losses on assets denominated in foreign ized capital gains resulting from the revaluation currency due to their revaluation at current exchange rates, as well as of some foreign components of firms' balance estimates for price changes in stocks, bonds, and other assets. Other adjustments to the value of assets relate to changes in coverage, sheets at lower dollar exchange rates. statistical discrepancies, and the like. 2. This item is the statistical discrepancy from the U.S. internation- Income from nonmilitary service transactions al transactions account, which is cumulated beginning in 1959 with a other than investment income has fallen steadily, base of zero. A positive discrepancy in the international transactions account appears here with a negative sign, on the assumption'that it from net receipts of $7.3 billion in 1982 to a net represents a net accumulation of claims by foreigners. payment of $1 billion in 1985. This shift results in 3. This item is equivalent to the cumulative U.S. current account part from the decline in net receipts from tourism position plus valuation adjustments (note 1). SOURCES. 1981-84, net recorded position—Survey of Current Busi- as the high value of the dollar made it less costly ness, vol. 64 (June 1985), p. 27; 1981-84, other data—U.S. Departfor U.S. citizens to travel abroad and more ment of Commerce, Bureau of Economic Analysis. All data for 1985 are estimates by Federal Reserve staff. Estimates do not include expensive for foreigners to travel in the United valuation adjustments (note 1). States. e Estimate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1985 295 The Capital Account 5. Summary of U.S. international capital transactions1 The counterpart to the large U.S. current ac- Billions of dollars; + = net inflow count deficit in 1985 was a net capital inflow of nearly $85 billion and a statistical discrepancy of more than $32 billion. Net private capital inflows totaled an estimated $93.3 billion in 1985, up from $82 billion the year before. There was a small net outflow—$8.4 billion—of official capital (table 5). Net private foreign purchases of securities reached record levels in 1985, and bank-intermediated capital flows have been less important than they were in previous years, for several reasons. First, the longstanding advantage to banks of lower funding cost has eroded, in part because of investors' concern about the riskiness of bank assets. Second, widespread financial deregulation and innovation have broadened di- 1. Components may not add to totals because of rounding. 2. Transactions with finance affiliates of U.S. companies in the rect access to funding sources for many borrow- Netherlands Antilles have been excluded from direct investment ers. Finally, in 1985, corporations decided to outflows and added to net foreign purchases of U.S. securities because they are largely the result of Eurobond sales or redemptions. lengthen the maturity structure of their liabilities SOURCE. U.S. Department of Commerce, Bureau of Economic in response to a fall in long-term interest rates. Analysis. Net bank-reported capital inflows expanded to more than $34 billion during 1985. One contribut- ties. Over 20 percent of the nearly $38 billion of ing factor was a contraction in bankers accep- the Eurobonds issued by U.S. corporations in tances done with foreign customers as many 1985 were denominated in foreign currencies or large U.S. banks sought to cut back on assets were dual-currency instruments. This sharp inwith low profit margins after coming under pres- crease from the previous year may have reflected sure to improve their captial positions. efforts to exploit the mixed expectations about The $44 billion of captial inflows through for- the future value of the dollar in order to diminish eign net purchases of U.S. corporate bonds may the cost of financing. The more likely explanareflect a general increase in the issuance of bonds tion lies in the reduced costs of hedging currency by U.S. corporations in both the domestic mar- risk associated with the maturing of the swap ket and the Euromarket in response to a fall in market and the concomitant attempts by issuers long-term interest rates. As U.S. corporations of different nationalities to circumvent regularestructured their borrowing in 1985 to lengthen tions that inhibit international capital mobility. the average maturity of their liabilities, the vol- The shift to financial channels other than ume of Euromarket issues expanded markedly, banks to carry the large net capital inflow continthough the percentage of total publicly offered ued to be evident in government securities marsecurities sold abroad was the same (24 percent) kets in 1985 as foreign net purchases of U.S. in 1984 and 1985. The lessened reliance on short- Treasury securities accounted for over $20 bilterm liabilities resulting from restructuring of lion for the second straight year. This inflow was corporate maturities is also consistent with the dominated by Japanese net purchases, which reduction in the importance of bank-intermediat- accounted for more than $17.5 billion of the total, ed capital inflows, which tend to have shorter or 83 percent compared with less than 20 percent maturities. in 1984. Recent innovations in financial instruments Net official capital outflows were $8.4 billion have offered both borrowers and investors great for 1985, marking a decline that in large part flexibility and have enhanced the attractiveness reflected the third consecutive annual shrinkage of arranging financing via the issuance of securi- in the reserves of OPEC countries in the United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 Federal Reserve Bulletin • May 1986 States. In addition, the concerted intervention The short- and medium-term prognosis for the sales of dollars by foreign governments, after the U.S. external account depends primarily upon meeting of officials from the Group of Five the timing of the effects of the dollar's depreciacountries, involved a drawdown of the reserve tion on the merchandise trade balance. In the holdings of many industrial countries in the short run, the fall in the dollar over the past year fourth quarter of 1985, although for the year as a may tend to exacerbate the U.S. trade deficit whole, the reserves of the G-10 countries held in because of the so-called "J curve" effect. This the United States did not change. In addition, effect is felt because neither supply nor demand U.S. holdings of foreign currencies increased in responds fully to price changes in the very short 1985 as a result of official U.S. intervention late run. Specifically, the devaluation increases the in the year. price of imports in the home currency (in this case, dollars) before responses of the quantities EXCHANGE RATES, OIL PRICES, supplied and demanded can occur. Over time, AND THE FUTURE OF THE the adjustments to quantity stimulated by the U.S. CURRENT ACCOUNT change in relative prices tend to dominate the deterioration in the relative prices and the trade The record U.S. current account deficit in 1985 balance improves. How much it does and in what reflects the sustained deterioration in the interna- time frame are difficult to estimate precisely tional price competitiveness of U.S. producers, because these matters will also depend fundawhich itself reflects more than four years of mentally upon the strength of demand both in the almost continuous appreciation of the dollar. The United States and abroad. dollar's climb has been associated with an un- The response of the producers of tradable even distribution of fiscal stimulus among the goods, both here and abroad, to the recent leading industrial countries, the emergence of change in dollar exchange rates will tend to raise sizable differentials in real interest rates, and an the price of imports to U.S. consumers and expansion in U.S. imports associated with vigor- decrease the quantity of imports; but the extent ous growth. of each adjustment and its effect on profit mar- As the U.S. current account deficit continued gins and market shares may represent more than to widen despite the convergence of growth rates a simple reversal of the developments over the in the industrial world, pressure developed to last few years as the dollar rose. Furthermore, protect some import-competing industries in the producers of U.S. importable goods do not ap- United States from the challenge of foreign com- pear to have adopted a common pattern of price petition. Because protectionist policies, once in and quantity adjustments. place, have proven difficult to remove and be- Another factor that may influence the nearcause, if sustained, they promote inefficient use term outlook for the U.S. current account is the of domestic resources by interfering with the free recent sharp decline in oil prices. In the short exchange of goods and services, it is generally run, the effects of the fall in price should domiconsidered preferable to address directly the nate and produce an improvement in the U.S. underlying causes of deteriorating international trade balance. In the medium to long term, the competitiveness. quantity of oil imported may increase for several The benefits of resisting protectionist mea- reasons: consumers will tend to shift to oil from sures may become evident as improvements in other forms of energy that have become relativethe competitiveness of U.S. industry resulting ly more expensive and may consume more enerfrom the depreciation of the dollar alleviate the gy in total. Domestic production of oil will deneed to shelter U.S. producers from the pres- cline. Also, the increases in profitability and sures of the international market. Nevertheless, wealth expected from reductions in oil prices pressures for protection may not cease as the should stimulate economic growth. aggregate U.S. external position improves, for Sustained longer-run improvement in the U.S. some industries in the United States are experi- external balance will depend upon U.S. firms encing secular contraction owing to changes in being sufficiently competitive to invest in prolong-run patterns of comparative advantage. ductive capacity at home with confidence and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1985 297 upon the strength of demand for U.S. goods alleviate some of the difficulties developing abroad. The success of efforts to reduce the large countries face in servicing their debt. However, U.S. federal government deficit is of foremost a decline in their exports as U.S. economic importance to this readjustment. At the same growth attenuates would exacerbate their diffitime, the reduction of real dollar interest rates culties. As a result, other industrial economies, that would accompany a reduction in U.S. gov- particularly those with a substantial current acernment demands for credit would facilitate in- count surplus, must assume some of the responvestment to upgrade productive facilities and sibility for maintaining global aggregate demand further improve the competitiveness of U.S. sufficient to minimize the costs of transition to a industries. sustainable international configuration of exter- A reduction in dollar interest rates would also nal positions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

298 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period No- 1. Federal Reserve reciprocal currency arrangements vember 1985 through January 1986, provides Millions of dollars information on Treasury and System foreign Amount of facility, Institution exchange operations. It was prepared by Sam Y. January 31, 1986 Cross, Manager of Foreign Operations of the Austrian National Bank 250 System Open Market Account and Executive National Bank of Belgium 1,000 Bank of Canada 2,000 Vice President in charge of the Foreign Group of National Bank of Denmark 250 Bank of England 3,000 the Federal Reserve Bank of New York.' Bank of France 2,000 German Federal Bank 6,000 Bank of Italy 3,000 The dollar declined substantially against most Bank of Japan 5,000 currencies during the three months ended Janu- Bank of Mexico 700 ary 1986, falling 9 percent against both the Ger- Netherlands Bank 500 Bank of Norway 250 man mark and the Japanese yen. Bank of Sweden 300 Swiss National Bank 44,,000000 The dollar moved lower with little exchange Bank for International Settlements: Swiss francs-dollars 600 market intervention by central banks of the five Other authorized European largest industrial countries. While there was less currencies-dollars 1,250 central bank selling of dollars than during the six Total 3300,,110000 weeks after the G-5 meeting on September 22, market participants remembered the G-5 commitment to adopt additional specific measures to governments to further the exchange rate moveachieve a more balanced economic expansion. ments. They were therefore sensitive to the possibility At the end of January, the dollar was about 20 that policy actions might be taken to support a percent below the levels at which it had been declining dollar. trading against the Japanese yen and the German Sentiment toward the dollar became decidedly mark during the week before the September G-5 more cautious during the three months. At times announcement. It was down about 30 percent during the period, market participants thought from its peaks of early 1985 against those currenthat the dollar would stabilize. But by the end of cies. Given the normal and expected lags to trade the period they generally believed the authorities flows, the favorable effects of these large either would favor or at least not strongly resist changes in exchange rates on the trade position further declines in the dollar. In this context, of the United States had not yet shown up in they came to view developments that occurred in reported trade figures. a negative light for the dollar. Also, figures showing that the trade imbalances of the United States, Germany, and Japan were continuing to THE OVERALL DEPRECIATION OF THE widen were seen as maintaining pressure on DOLLAR DURING THE PERIOD During November and December, the exchange markets tended to react to evidence that the U.S. 1. The charts for the report are available on request from economy was not growing as rapidly as had Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. previously been forecast. Business statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

299 published at the time showed that the modest tion gains. Under these circumstances, many acceleration of U.S. growth that occurred in the market participants believed that the rise of third quarter was not being sustained in the final Japanese interest rates would have to be quickly quarter of 1985. In Germany, by contrast, output reversed lest the internal Japanese economy be appeared to be expanding more rapidly than weakened any more. They thought this reversal before, while official and private forecasts for was most likely to occur in the context of joint 1986 were repeatedly revised upward. action to lower interest rates in the United States At the same time, U.S. trade and current and other countries. account deficits continued to mount. Release of When several days passed without any evimonthly trade statistics drew attention to the dence of an easing in the Federal Reserve's drag the external sector was exerting on domes- monetary policy, market participants began to tic output. These figures served to remind mar- question whether the monetary authorities ket participants of the magnitude of the adjust- wished to see the dollar fall further. As a result, ment needed to restore more balance to the U.S. bidding for dollars reappeared and the dollar rose expansion and to redress protectionist pressures markedly against the yen and European currenat home. Meanwhile, the current account sur- cies. The Trading Desk of the Federal Reserve pluses of Germany and Japan were approaching Bank of New York conducted its only intervenrecord levels in 1985. tion operation of the period on November 7, The fact that the initiative for the September selling $77.2 million against Japanese yen and G-5 agreement had come from the United States $25 million against German marks. The puralso had a continuing influence on exchange chases were split equally between the U.S. Treamarkets throughout the three-month period. The sury and the Federal Reserve. G-5 agreement was interpreted by market partici- For the balance of November, the dollar fell pants as reducing the likelihood that the Federal rather steadily, especially against the German Reserve would tighten reserve conditions. Many mark. The improving outlook for Germany's market participants expected the U.S. authori- growth and its near-record trade surplus conties to act to lower U.S. interest rates, either in trasted with the lackluster pace of business activconcert with other G-5 countries or alone, to ity and the growing trade deficit of the United reduce the incentive to invest in dollar-denomi- States. The mark gained support from press and nated assets and thereby encourage an apprecia- market attention to comments by officials that tion of nondollar currencies. gave the impression the U.S. administration re- This expectation was particularly strong as the mained dissatisfied with the extent of the mark's period opened early in November. The Bank of rise. Japan had just allowed Japanese money market During the first half of December, the dollar's interest rates to rise sharply. In response, the depreciation stalled as market participants again yen rose strongly against both the dollar and questioned the willingness of the monetary au- European currencies in the first days of Novem- thorities in other countries to accept a further ber. Market participants were impressed with rise of their currencies. As November reserve what they saw as evidence of the willingness of figures were published, they indicated that the the Japanese authorities to boost the yen. But G-5 countries were again increasing their foreign they questioned whether the rise in Japanese exchange holdings. The dollar steadied first interest rates was consistent with the overall against the yen—then trading near ¥200, some objective of achieving a more balanced global YLVI percent above the levels prevailing before expansion. Domestic demand in Japan had been the G-5 agreement. Market participants noted subdued. Some small- and medium-sized export- that Japanese interest rates were easing back ers were already expressing concern about the again and interpreted a Japanese official's comadverse effects of the yen's appreciation on the ments supporting a managed float of major curprofitability of their sales abroad. Any slowdown rencies as indicating a desire for the yen to in export sales was seen as having a potentially stabilize. The dollar then steadied against the significant and negative effect on future produc- German mark. With the mark then at DM2.50, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

300 Federal Reserve Bulletin • May 1986 some 14 percent above mid-September levels, sharp widening in the forward market discounts market participants were sensitive to any indica- of the currencies of Italy, France, and Belgium tion of the German authorities' views about the relative to the German mark. In the spot market, scope for further appreciation of their currency. selling of these currencies typically built up Accordingly, when rumors circulated that the before weekends when the opportunity for a German central bank had purchased dollars in currency realignment was viewed as the greatest, the exchange market, professionals temporarily and then eased when no realignment occurred. became wary of selling dollars. In response to these pressures within the But the dollar shortly resumed its decline in EMS, the authorities in both Belgium and Italy December. The report of an upward revision of acted to stem speculative capital outflows by gross national product for the final quarter of raising money market interest rates. The central 1985 failed to alter perceptions that economic banks whose currencies were under pressure growth in the United States had slowed toward intervened regularly, and at times substantially, the end of the year. The passage of legislation to sell dollars and marks out of official reserves. aimed at reducing the U.S. fiscal deficit over Belgium, along with several other countries, coming years was seen as at least beginning to stepped up its borrowings in the Eurocurrency address a fundamental problem facing the United markets to replenish international reserves. Then States. Yet, in the near term, the prospect of in mid-January, the Italian authorities acted to declining fiscal deficits contributed to an easing protect the lira against speculation by raising of long-term U.S. interest rates, narrowing dif- interest rates more, imposing a ceiling on the ferentials in favor of the dollar. Thus, the dollar growth of bank credit, and tightening or reintromoved below DM2.50 after midmonth as the ducing exchange controls affecting commercial mark again led the rise of currencies against the leads and lags. dollar. Meanwhile, during January, the bearish senti- As the mark rose against the dollar during ment toward the U.S. economy began to lift November and December, it also moved up following a series of U.S. economic statistics— against its partner currencies in the European starting with an unexpectedly strong gain in Monetary System (EMS). Although inflation has December employment—that caused analysts to slowed in all EMS countries, the rise of prices in revise upward their estimates of growth for the Germany had remained consistently smaller than coming year. In response, U.S. interest rates in the others. The cumulative effects of the moved up briefly, causing interest differentials in inflation differentials since the last major realign- favor of the dollar to widen again. But, unlike ment of EMS parities in 1983 were seen as having previous occasions during this economic expanimplications for the competitiveness of industry sion when evidence of a stronger-than-expected in individual member countries. Thus, as EMS U.S. economy and rising interest rates boosted currencies as a group strengthened, questions the dollar, the exchange market reaction was arose about the sustainability of the system's muted. Before a January 18 meeting of G-5 parity rates. monetary officials in London, anticipations per- The renewed rise of the mark against the dollar sisted that some joint action to lower the dollar by interest rate changes or other means would be starting late in December intensified pressures taken. When no policy statements were issued within the EMS. Market participants were sensifrom that meeting, these expectations subsided. tive to the possibility that many EMS countries would seek early adjustments to their curren- At the same time, an unexpectedly sharp drop cies—similar to that already made for the lira in in oil prices had become the dominant factor in July 1985—to avoid a protracted period of specu- the exchange markets. Oil prices had started to lation over EMS currency relationships. Regu- plunge after members of the Organization of larly scheduled meetings of European Communi- Petroleum Exporting Countries, faced with a ty officials were viewed by some as providing a growing abundance of oil supplies, chose to forum for negotiating a realignment of joint float defend their market share rather than to support parity rates. These pressures were mirrored in a oil prices by curtailing production. With the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 301 supply of oil outstripping demand, spot oil prices might be acceptable, the yen broke through dropped, closing January nearly 40 percent be- ¥200 and led other foreign currencies sharply low the levels recorded three months earlier. higher against the dollar. It continued to The decline in world oil prices greatly en- strengthen even after the Bank of Japan anhanced the likelihood that the world's economic nounced a cut in its discount rate of half a expansion would continue without reaccelerating percentage point, to 4V2 percent, on January 29 inflation soon. To be sure, the United States was to be effective the following day. expected to benefit from the slowing of inflation Meanwhile, protectionist pressures in the and a reduction in imports. But market partici- United States, which had subsided somewhat pants saw the possibility that relatively greater after the September G-5 meeting, resurfaced. An benefits would accrue to major competitors and unexpected jump in the December U.S. trade trading partners of the United States because deficit to a record level contrasted with Japan's they are more dependent on imported sources of record trade surplus for the same month. Market energy. Moreover, the sharp fall in oil prices participants noted that some U.S. government raised questions about the exposure of U.S. officials were still talking about the need for a banks to borrowers in the energy sector and in stronger yen. Press reports in advance of the the developing countries that are major oil pro- President's annual State of the Union address, ducers. Thus, each successive report of lower oil saying that the administration would propose to prices tended to cause the dollar to weaken discuss with other countries the role and relarelative to the yen and some continental Europe- tionship of currencies, contributed to the sense an currencies. These pressures were not limited that the United States would welcome a further to the dollar: the pound sterling and the Canadian depreciation of the dollar. dollar also were vulnerable to developments in In response, the dollar was falling at the end of the oil market. January. It dropped to a seven-year low of The prospect of declining commodity prices, ¥191.35 and to a three-year low of DM2.3645 together with reduced fiscal deficits, fostered and closed near those lows on the last day of renewed rallies in the U.S. stock and bond January. markets in January. As a consequence, longterm U.S. interest rates fell late in the month. Thus, long-term interest rate differentials be- THE APPRECIATION OF THE DOLLAR came progressively less favorable to the dollar, AGAINST A FEW CURRENCIES contributing to uncertainties about whether capital inflows would continue to support the dollar The only major currencies against which the as they had in recent years. dollar rose during the period under review were Against this background, market participants the pound sterling and the Canadian dollar. Early scrutinized statements by U.S. and foreign offi- in November, the pound was still benefiting from cials for any indication of changes in their views its role as a principal investment alternative to or intentions about dollar exchange rates. At the the dollar. As the dollar declined, investors movtime the yen was holding around the key level of ing out of dollar assets showed a preference for ¥200. Market participants noted that Japanese placing funds in the liquid sterling markets. But interest rates were being allowed to ease back after touching a two-year high of $ 1.50 V4 against toward levels prevailing before the runup of late the dollar at the beginning of December, sterling October and early November, and talk spread of came under intense selling pressure as the mara cut in the Bank of Japan's discount rate. They ket weighed the implications of falling oil prices. wondered therefore if the Japanese authorities The drop was expected to lower British oil would resist a renewed rise in their currency. But export revenues, thereby exacerbating a negasome private forecasters were suggesting that the tive trend in the country's balance of payments. fall in oil prices might permit more scope for a An associated decline in oil royalty payments to higher yen. When a Japanese official was quoted the government was expected to undermine late in January as agreeing that a further rise progress in reducing Britain's fiscal deficit. As a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

302 Federal Reserve Bulletin • May 1986 result, the government's strategy of using tax 2. Net profits or losses (-) on U.S. Treasury and cuts in the coming year to support economic Federal Reserve current foreign exchange growth came into question. In these circumoperations1 stances, the pound declined despite continuing Millions of dollars favorable interest differentials. It reached record U.S. Treasury lows against the German mark and gave up its Period Federal Exchange Reserve Stabilization earlier gains against the dollar to close the period Fund at $1.4115, down 2lA percent on balance. Nov. 1, 1985-Jan. 31, 1986... 0 0 The fall of sterling contributed to the decline of Valuation profits and losses on outstanding assets and the Irish pound within the EMS alignment to- liabilities as of Jan. 31, 19862 152.2 296.7 ward the end of the period under review. Speculation against the Irish currency mounted as 1. Data are on a value-date basis. traders anticipated it would be devalued in any 2. Valuation gains represent the increase in the dollar value of outstanding currency assets valued at end-of-period exchange rates, EMS realignment, given the fall of the British compared with the rates prevailing at the time the foreign currencies pound and Ireland's close economic ties with the were acquired. United Kingdom. As a result, the Irish currency Canada intervened forcefully late in the period fell to join the Belgian franc at the bottom of the and for a time afterward, replenishing foreign EMS band by the end of January while money currency reserves by drawing nearly $1.5 billion market interest rates firmed in Ireland. from its two standby credit facilities with com- The Canadian dollar also weakened substan- mercial banks. During the last four weeks of tially during the period, falling to record lows January the central bank also acted to tighten against the U.S. dollar. After the September G-5 money market conditions. Interest rates in Canameeting the Canadian dollar, alone among the da rose markedly and, with comparable rates in currencies of the major trading partners of the the United States either steady or declining, the United States, had not appreciated against the interest differentials favoring the Canadian dollar U.S. dollar. The policy issues surrounding the widened to 3 percentage points, the highest level problems of some small Canadian banks last fall in more than three years. On balance, the Canawere seen as unsettling by market participants. dian dollar declined 4Va percent against the dollar News of a current account deficit in the third during the three-month period under review. quarter, the first deficit recorded in Canada since 1983, added to market participants' disquiet. In addition, the fall in oil prices, while having little CHANGES IN ESF BALANCES net effect on Canada's external position, was expected to result in sharply lower government In the period from November through January, revenues and to create dislocations in some the Federal Reserve and the Exchange Stabilizasectors and in some regions of the economy. tion Fund (ESF) realized no profits or losses Market observers also expressed disappointment from foreign exchange transactions. As of Januin the degree to which the government had been ary 31, cumulative bookkeeping or valuation able to cut Canada's fiscal deficit. Under these gains on outstanding foreign currency balances circumstances, the currency came on offer in the were $152 million for the Federal Reserve and face of speculative selling and recurring rumors $297 million for the Treasury's Exchange Stabilithat foreign investors were liquidating invest- zation Fund. This is the first reported valuation ments in Canadian securities. gain for the Federal Reserve since October 31, In response to these pressures, the Bank of 1980. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

303 Staff Studies The staffs of the Board of Governors of the indicate concurrence by the Board of Governors, Federal Reserve System and of the Federal by the Federal Reserve Banks, or by the mem- Reserve Banks undertake studies that cover a bers of their staffs. wide range of economic and financial subjects. Single copies of the full text of each of the From time to time the results of studies that are studies or papers summarized in the BULLETIN of general interest to the professions and to are available without charge. The list of Federal others are summarized in the FEDERAL RESERVE Reserve Board publications at the back of each BULLETIN. BULLETIN includes a separate section entitled The analyses and conclusions set forth are "Staff Studies" that lists the studies that are those of the authors and do not necessarily currently available. STUDY SUMMARY STATISTICAL COST ACCOUNTING MODELS IN BANKING. A REEXAMINATION AND AN APPLICATION John T. Rose—Baylor University John D. Wolken—Staff, Board of Governors Prepared as a staff paper in the spring of 1984 Statistical cost accounting models have been Despite the widespread application of statistiwidely applied to the study of bank earnings and cal cost accounting models to banking, most costs. These models derive from early work in studies using this approach have failed to incortransportation and were first applied to banking porate correctly the balance sheet identity bein the mid-1960s. Statistical cost accounting tween assets and liabilities. The models estimatmodels use least squares regression to relate a ed with this error are misspecified, their firm's revenue and costs to the composition of its coefficient estimates biased, and the interpretabalance sheet. Under certain behavioral assump- tion given to these estimates incorrect. This tions, these models can provide estimates of the study reexamines the statistical cost accounting implicit rates of return on individual portfolio model, discusses the implications of the balance items. In banking, such models have been used sheet identity, and discusses the importance of in a variety of contexts, including estimating testing for heteroskedasticity. As others have absolute rates of return on various assets and noted, the balance sheet identity must be incorliabilities when interest rate ceilings distort mar- porated into the statistical cost accounting model ket-revealed price information or when banks in order to eliminate perfect collinearity. As a have traditionally paid for such items with ser- result, however, the interpretation of the estivices in kind; examining differences in rates of mated coefficients differs from that given to the return on various loan and deposit types; study- parameters of the theoretical model. To identify ing the time path of earnings; and exploring the estimates of the parameters of the underlying differences in profitability among various groups model, which represent absolute rates of return of banks and other financial institutions. on each asset and liability, additional restrictions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

304 Federal Reserve Bulletin • May 1986 must be imposed. However, the only satisfactory states. Interestingly, in this sample neither the identifying restriction is not testable within the usual adjustment for heteroskedasticity nor the model. Consequently, such a restriction should usual identifying restriction is appropriate. Had be imposed only if it can be justified by theoreti- the usual restriction been imposed in this incal or empirical evidence. stance, the resulting mis specification would have These points are illustrated through an applica- biased the estimated rates of return by as much tion of the statistical cost accounting model to a as 500 basis points. • sample of 146 commercial banks drawn from 11 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

305 Industrial Production Released for publication March 14 February was 1.6 percent higher than that of a year earlier. Industrial production declined an estimated 0.6 In market groups, output of total consumer percent in February following a downward re- goods was unchanged in February as durable vised increase of 0.1 percent in January. Output consumer goods rose 0.7 percent and nonduraof durable consumer goods and business supplies ble s edged down 0.2 percent. In February, auto posted gains in February, but declines were assemblies increased to a seasonally adjusted widespread in other major groups. At 125.7 per- annual rate of 8.7 million units from a rate of 8.4 cent of the 1977 average, the total index in million units in January. Output of home goods Ratio scale, 1977 = 100 MATERIALS Durable r-v Nondurable — \y Energy i INTERMEDIATE PRODUCTS Business supplies Construction supplies 240 OIL AND GAS DRILLING FINAL PRODUCTS 200 240 Defense and space 200 160 Business equipment J 140 160 120 140 120 Consumer goods 100 100 80 1980 1982 1984 1986 1980 1982 1984 1986 All series are seasonally adjusted. Latest figures: February. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

306 Federal Reserve Bulletin • May 1986 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Group 1986 1985 1986 FFFeeebbb... 111999888555 tttooo FFFeeebbb... Jan. Feb. Oct. Nov. Dec. Jan. Feb. 111999888666 Major market groups Total industrial production 126.5 125.7 -.6 .8 .8 .1 -.6 1.6 Products, total 134.6 133.9 -1.0 1.3 .5 .4 -.5 3.2 Final products 134.6 133.6 -1.1 1.4 .4 .2 -.7 2.5 Consumer goods 124.3 124.4 -.8 1.6 1.1 .2 .0 4.4 Durable 116.7 117.6 -1.4 3.7 1.2 -.1 .7 4.2 Nondurable 127.2 126.9 -.6 .9 1.0 .4 -.2 4.5 Business equipment.. 142.4 141.3 -1.8 1.5 -.4 .9 -.8 .9 Defense and space... 179.5 177.6 .6 1.2 .0 -.7 -1.1 6.2 Intermediate products.. 134.8 134.8 -.7 .9 .0 5.6 Construction supplies 123.3 122.5 -1.1 .7 -.2 2.2 -.6 5.9 Materials 115.4 114.5 .0 .1 1.2 -.3 -.8 -.8 Major industry groups Manufacturing 129.7 128.8 1.0 .6 .4 -.6 2.4 Durable 129.8 128.8 1.1 .4 .1 -.8 1.2 Nondurable 129.4 128.9 .7 .8 .8 -.4 4.1 Mining 107.5 104.3 -1.5 .6 .0 -3.0 -4.7 Utilities 112.8 114.4 -.2 2.1 -1.6 1.4 -1.2 NOTE. Indexes are seasonally adjusted. declined further after having risen sharply in edged down the previous month. Output of mate- November and December. rials was reduced 0.8 percent in February and Production of business equipment fell 0.8 per- has changed little over the past two years. cent in February, retracing most of the January In industry groups, manufacturing output deincrease. All major components of business clined 0.6 percent in February as durable manuequipment registered declines in February. De- facturing fell 0.8 percent and nondurables defense and space equipment fell again but was still clined 0.4 percent. Mining output was down 3.0 more than 6 percent above the level of a year percent in February, primarily reflecting drastiearlier. The production of construction supplies cally curtailed oil and gas well drilling activity. fell 0.6 percent in February following a rise of 2.2 Production by utilities increased 1.4 percent percent in January, while business supplies following a decline of 1.6 percent in January. gained 0.4 percent in February after having Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

307 Statements to Congress Statement by Frederick R. Dahl, Associate Di- rial adverse effect on the safety and soundness of rector, Division of Banking Supervision and Reg- affiliated banks. ulation, Board of Governors of the Federal Re- Having established these safeguards, the Conserve System, before the Subcommittee on gress permitted these ETCs to engage in a broad Commerce, Consumer, and Monetary Affairs of range of activities and services that assist in the Committee on Government Operations, U.S. conducting international trade. These activities House of Representatives, March 4, 1986. and services include international market research, consulting, insurance, transportation, I appreciate the opportunity to appear before this product research and design, product modificasubcommittee on behalf of the Board of Gover- tion, taking title to goods, and many others. nors to discuss the role of the Federal Reserve in In October 1984, the Board submitted a report implementing the Bank Export Services Act. to the Congress that described the Board's im- The Board has asked me to emphasize that it plementation of the BESA to that date. It is my fully supports both the efforts to assure that the intention today to provide the subcommittee United States has a strong and expanding export with an update of that report, including a descripsector encompassing a broad range of industries tion of the extent and nature of current operaand firms, as well as the specific role that bank- tions of ETCs in which banking organizations ing organizations, through export trading compa- have invested, and an assessment of their pernies, can play in this effort. Increasing exports is formance. The subcommittee has also asked us a critical element of a healthy economy. Recog- to discuss the report prepared by the General nizing this principle, the Board has administered Accounting Office (GAO) on ETCs. the Bank Export Services Act as the Congress The draft report prepared by the GAO, on intended, to optimize the usefulness of export which the Board commented, was a neutral trading companies in promoting the export of presentation of issues raised by bank-affiliated goods and services from the United States. ETCs, and it also discussed the nature and As you are aware, the Bank Export Services purpose of the Board's regulation of investments Act (BESA), which is Title II of the Export by banking organizations in ETCs. Since the Trading Company Act of 1982, authorizes bank Board reviewed the report, the GAO has added holding companies to acquire equity interests in one page of policy recommendations, which I export trading companies (ETCs), subject to will address later in this testimony. review by the Federal Reserve Board. The The Board's approach has been to establish BESA was designed to permit banking organiza- regulations that further the chief purpose of the tions to participate in promoting the export of act—promotion of exports from the United U.S. goods and services in a manner consistent States—while maintaining the safety and soundwith maintaining bank safety and soundness and ness of the investing banking organizations. I also consistent with avoiding the risks, conflicts, believe that the Board's regulations have met and other adverse effects that the Congress has these objectives while keeping its procedures for sought to prevent through limitations on the such investments to a minimum. combination of banking and commerce. To this end, the BESA requires the Board to review INVESTMENTS BY each proposal for potential adverse effects, such BANKING ORGANIZATIONS as unsafe or unsound banking practices, undue concentration of resources, decreased or unfair At the time of the Board's Report to the Concompetition, conflicts of interest, and for a mate- gress submitted in October 1984, two years after Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

308 Federal Reserve Bulletin • May 1986 passage of the Export Trading Company Act, the have been operating. For example, one ETC System had acted on 29 notifications to establish encountered substantial difficulties because a export trading companies. As of February 28, major customer broke the terms of its trade 1986, the Federal Reserve System had acted on agreement; another ETC had its capital wiped 40 notifications to make initial investments in out because of its inability to deliver on a major export trading companies. As can be seen, most contract; and a third was closed sifter having of the activity in investments by banking organi- encountered significant losses because of the zations in ETCs occurred between mid-1983 and holding company's inability to control the tradearly 1985. In the past year, there has been a ing activities of its ETC. Besides these cases, at noticeable decline in such investments. Current- least four bank holding companies have disconly one notification is pending in the Federal tinued the operations of their ETCs, either tem- Reserve System. porarily or permanently because the operating In addition, the System has acted on eight losses were found to be unacceptable. notices to make additional investments in ETCs More fundamentally, the fact that ETC peror to expand the scope of their activities. The formance has not met expectations is attributable Board has not objected to any notification to to the generally bad export climate that has establish ETCs or to expand the scope of their existed for several years as illustrated by the activities. U.S. trade deficit, which increased from $25 These numbers, however, do not accurately billion in 1980 to an estimated $125 billion in reflect involvement of current bank holding com- 1985. As is generally well known, the weakness panies in ETC activity. Eleven of those ETCs on of U.S. exports reflects a number of macroecowhich the Board acted are not currently opera- nomic developments that took place in the early tional. Accordingly, as of February 28, 1986, to mid-1980s and that have continued until fairly there were 29 operating ETCs owned by bank recently: (1) the very substantial rise of the dollar holding companies. (Tables attached as an ap- against foreign currencies; (2) the relatively slugpendix to this testimony show the status of each gish growth of real activity in foreign industrial ETC notification acted upon by the Federal countries; and (3) the drop of imports by coun- Reserve System.1) tries experiencing debt-burden difficulties, espe- The performance of operating ETCs has been cially Mexico and other Latin American countracked in a number of ways, including the tries. annual reports by, and regular inspections of, The appreciation of the dollar until early 1985 bank holding companies, and frequent, informal has had a particularly severe effect on the intercontacts that the Reserve Banks have with bank national price competitiveness of U.S. products. holding companies in their Districts. Drawing on A large part of the dollar's appreciation has been these sources of information, it is clear that the reversed over the past several months, but we operations of these ETCs have not lived up to cannot expect any immediate improvement in expectations. In a number of instances ETCs U.S. export performance. In fact, increased have scaled back their operations significantly trade volumes as a result of the lower dollar are since they opened. All but a few of the active not expected to materialize until well into 1986. companies have had operating losses. Notwithstanding the unfavorable environment Many of the difficulties that ETCs have experi- for U.S. exports, the normal difficulties of startenced have been those normally associated with ing new businesses, and bank inexperience with the start-up of new lines of business. These start- ETCs, a reasonable start has been made in up difficulties have, of course, not been limited meeting the purpose of the Congress to promote to those ETCs owned by banking organizations. U.S. exports. With improved prospects for U.S. Besides those difficulties, some of the problems export performance and more experience, it is that we have seen are peculiar to the activities of reasonable to expect the outlook for bank-affilitrading companies, regardless of how long they ated ETCs to get better. The factors just mentioned have been the 1. The attachments to this statement are available on major force delaying development of ETCs affilirequest from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. ated with banking organizations. The Board's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 309 administration of the BESA has not been a of U.S. banking organizations to improve the barrier to accomplishing the goals of the act. All export performance of U.S. manufacturing and of the notifications have been acted on within the servicing firms. In accordance with this purpose, 60-day time period set forth in the statute, and no the Board's regulations establish that a banking notification by a bank to invest in an ETC has organization may invest in an ETC that derives been disapproved. Moreover, to expedite review more than one-half of its revenues over a twoof notifications the Board has decentralized the year period from U.S. exports or from facilitatprocess and given the Reserve Banks authority ing U.S. exports. to act on most ETC notifications. Fifteen of the This revenues test was designed to ensure that 24 notifications to establish ETCs filed after the chief efforts of an ETC are directed to adoption of the delegation procedures were pro- exporting U.S. goods and services, as the Concessed by the Reserve Banks with no Board gress intended, rather than to trading outside the review. In addition, when the Board has re- United States. This position is fully supported by viewed notifications, it has not placed specific the legislative history of the BESA. The Conferlimitations or restrictions as a condition of per- ence Report states the following: mitting an investment, although it has taken note of, and commented on, the scope of some of the [W]hile it is understood that ETCs will periodically proposals. have to engage in importing, barter, third party trade, and related activities, the managers intend that such activity be conducted only to further the purposes of the Act. GENERAL ACCOUNTING OFFICE REPORT You have asked the Board to comment on vari- According to the GAO report, some bankous aspects of the report prepared by the GAO affiliated ETCs have advocated excluding from on implementation of the Export Trading Com- the revenues test those revenues generated from pany Act of 1982. I will discuss four issues trade outside the United States. They claim that described in the GAO report on the Board's counting those revenues as nonexport revenues implementation of Title II of the act, which I restricts the ability of ETCs to compete with have previously referred to as the BESA. Those foreign-owned trading companies. The GAO has issues, which were discussed at length in the also recently revised its draft report to recom- Board's 1984 report to the Congress on imple- mend that the Board modify its regulation to mentation of the BESA, are the following: (1) the exclude from the calculation of export revenues revenues test for ETCs; (2) leveraging of ETCs; any revenues that come from trade outside the (3) exemption of transactions by banks with United States. affiliated ETCs from the requirements of section The reason that the Board has not taken this 23A; and (4) the export of services by ETCs and approach is that it would permit an ETC to their affiliated companies. engage almost exclusively in trade outside the United States with little or no benefit to U.S. 1. Calculation of Export Revenues. At the export performance and yet would subject the outset I must emphasize that the chief purpose of affiliated U.S. banking organization to all the the BESA was the promotion of U.S. exports. risks of the trading activity. Such a result is not The BESA was not designed to promote interna- consistent with the intent of the Congress in tional trade outside the United States or imports enacting the BESA—which, as I have stated, into this country. The BESA defines an ETC as a permits banking organizations to invest only in company that is "exclusively engaged in activi- ETCs "organized and operated principally for ties related to international trade" and that is the purpose of exporting goods and services "organized and operated principally for pur- produced in the United States." poses of exporting [or facilitating the export of] 2. Leveraging. In reviewing notices by bankgoods and services produced in the United ing organizations to invest in ETCs, the Board States. ..." This definition reflects the goal of considers the assets-to-equity ratio of each prothe Congress of using the facilities and expertise posed ETC on a case-by-case basis. In this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin • May 1986 review, the Board takes into account the riski- adopt a leveraging ratio for its ETC that was ness of the proposed activities of the ETC. The higher than the 10:1 ratio that it had proposed to Board examines carefully the capital structure the Reserve Bank earlier. After having evaluated and proposed leveraging ratios of bank-affiliated the nature and riskiness of the activities pro- ETCs to carry out its duty to preserve the safe posed for the ETC, the Board approved a leverand sound operation of bank holding companies aging ratio of 17:1. The Board has not condiand their affiliated banks. tioned approval of any ETC notice on a specific In the International Lending Supervision Act, leveraging ratio. the Congress required the bank regulatory agen- 3. Exemption of Transactions by Banks with cies to "cause banking institutions to achieve Affiliated ETCs from the Requirements of Secand maintain adequate capital by establishing tion 23A. The BESA provides that transactions minimum levels of capital for such banking insti- between a bank and its affiliated ETC are covtutions." In response, bank regulators have ered by section 23A of the Federal Reserve Act. moved decisively to improve the capital position Section 23A generally limits the amount of credit of banking organizations. In this process, capital that banks may extend to a nonbank affiliate and is assessed on a consolidated basis and the subjects such credit extensions to certain collatcapital adequacy of subsidiary organizations eral requirements. The purpose of Section 23A is must be taken into account. This approach is to protect the safety and soundness of the bank necessary because the capitalization of affiliated on a general basis by identifying and restricting organizations can have an important effect on those classes of affiliate transactions that could their related banks. result in losses to a bank because the affiliate Capital adequacy is a critical determinant of relationship may have colored the bank's objecthe financial strength of an ETC and of its ability tivity in evaluating the creditworthiness of the to withstand unexpected adverse developments. borrower. This capital cushion is necessary to prevent an Experience over the years has demonstrated ETC's difficulties from affecting the financial that limitations on self-dealing between a bank resources of the parent holding company or the and its affiliates are essential to prevent abuses, safety and soundness of affiliated banks. to maintain bank safety and soundness, and to In general, the Board is still in the process of prevent excessive risk to the federal safety net. assessing the capital needs of ETCs. This pro- Accordingly, the Board as a matter of policy has cess of assessment must remain flexible, and generally not granted exemptions from section therefore the Board has not established capital, 23A. With respect to ETCs, however, the Board or leveraging, requirements. To the extent that has nevertheless included in its regulations a ETCs engage in activities posing greater risk, we waiver from the strict collateralization standards feel it is not unreasonable to expect ETCs to of section 23A for those transactions in which the maintain higher capital ratios than banks. As a ETC takes title to goods against a firm order and general matter, capital levels should be commen- the lending bank maintains a security interest in surate with the risk of the company's activities. those goods. The Board has determined that a To streamline ETC notifications, the Board waiver from section 23A in these circumstances has delegated the authority to review a banking would permit ETCs to obtain financing for transorganization's notice of intent to invest in an actions in goods without creating undue risk to ETC to the appropriate Federal Reserve Bank. the affiliated bank. In addition, the Board has If, however, the proposed leveraging ratio of the stated that it would consider granting ETCs ETC exceeds 10:1, then Board review is re- additional waivers from the collateral requirequired. In either case the proposed leveraging ments of section 23A based on specific requests. ratio and other facts pertaining to the proposal The experience to date, though limited, reinare evaluated on a case-by-case basis. forces the desirability of maintaining the protec- In this regard, the Board recently received a tions afforded by section 23A. In at least one request from a bank holding company that had instance that we are aware of, a bank lent to its established its ETC under the delegated proce- affiliated ETC in violation of section 23A. The dures. The bank holding company sought to loan went bad because of misjudgments on the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 311 trading side, and significantly affected the condi- vices. On the contrary, the BESA and the tion of the bank. Therefore, we question the Board's regulations permit bank-affiliated ETCs wisdom of a total exemption from section 23A to offer a broad range of trade-related services for transactions with an ETC, as some bank- both in the United States and abroad. For examaffiliated ETCs are reported by the GAO to have ple, the BESA and the regulations permit ETCs suggested. Especially in the area of extensions of to provide consulting, market research, marketcredit, it is important to strike the balance be- ing, insurance, product research and design, tween encouraging the growth of ETCs and legal assistance, transportation including freight preventing imprudent banking practices. forwarding, warehousing, foreign exchange, fi- 4. Exporting Services. The BESA requires that nancing and taking title to goods, when provided a bank-affiliated ETC engage "exclusively" in to facilitate the trade in goods and services activities related to international trade and "prin- produced by others. According to the notificacipally" in exporting or facilitating exports from tions to the Federal Reserve, a number of ETCs the United States. The Congress permitted an are providing many of the trade services listed in exception to the traditional separation between the statute. Moreover, the Board has recognized banking and commerce for investments by bank- that this list of services is not exhaustive. As an ing organizations in ETCs because it viewed example, upon demonstrating that the activities banks as "the best intermediary between the were related to international trade, one ETC has potential U.S. exporter and the foreign buyer acquired a company in England that engages in because they already have offices (branches) at customs bonding services and in certain types of both ends of the chain, and are already communi- inventory control services related to cross-borcating with business people on both ends." To der trade. further this purpose, the Board's regulations A bank-affiliated ETC may provide these and provide that an ETC in which a banking organi- other trade services to any of its affiliates (other zation may invest must derive more than one- than a subsidiary), including its parent bank half its revenues from exporting or facilitating holding company and its bank and nonbank the export of goods and services produced in the affiliates, and to its customers to facilitate the United States by persons other than the ETC or export from the United States of the services of its subsidiary. the affiliate or the customer. Revenues derived Under the BESA and the Board's regulations, from such services would be considered export a banking organization may invest in a company revenues under the Board's regulations. A bankthat offers any of a variety of services that in one affiliated ETC could also form a joint venture way or another facilitate trade. A banking organi- with a manufacturing or a service company to zation, however, may not invest in any company export the goods or services of the joint venture of its choice simply because that company has partner. Revenues derived from these activities foreign customers. Such an interpretation would are also considered export-related and count have the effect of substantially increasing the toward meeting the revenues test in the Board's scope of activities in which a bank holding com- regulations. pany could engage both in the United States and abroad. It not only would deviate from the purpose of the BESA but would disrupt the SUMMARY framework that the Congress has established in the Bank Holding Company Act for investments In sum, we believe that the Board's regulations by bank holding companies in other nonbanking appropriately implement the BESA by furthering companies. It would permit banking organiza- the purpose of the statute to promote the export tions to invest in an ETC engaged in an otherwise of U.S. goods and services while maintaining the prohibited nonbanking activity simply on the safety and soundness of the banking organizagrounds that the company had foreign custom- tions that invest in ETCs. The Board has sought ers. to maintain flexibility in its approach to such The Board's regulations do not limit the ability investments because of the difficult export enviof bank-affiliated ETCs to provide trade ser- ronment and because there is still little experi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin • May 1986 ence with the industry generally. The Board of increased experience regulating investments expects to continue to review its policies in light in ETCs and in response to individual requests. Statement by Preston Martin, Vice Chairman, addition, their efforts to restructure debt, or to Board of Governors of the Federal Reserve Sys- reduce it by selling some of their assets, have tem, before the Senate Committee on Banking, been hampered greatly by the decline in farm Housing, and Urban Affairs, March 11, 1986. asset values. The great proportion of farm debt is owed to I am pleased to appear before this committee the Farm Credit System, the Farmers Home today to review the problems being experienced Administration, and individuals. But about oneby banks in our agricultural communities and to quarter of the total is provided by commercial discuss various proposals that have been ad- banks, and the banks that have concentrations of vanced to ease the strains resulting from these such loans have been experiencing increasing problems. Chairman Volcker recently sent you a strains in recent years. For example, loans delinletter that presented the Federal Reserve quent 30 days or more at agricultural banks Board's views on these matters, and in conjunc- amounted to 7V4 percent of total loans at the end tion with that letter a rather extensive study by of last year, up from 6V4 percent a year earlier. our staff of farm credit conditions and their This increase took place even as these banks impact on farm banks was forwarded to the staff charged off more than 2 percent of their total of your committee. Accordingly, I intend to loans over 1985. These loan losses and the need structure my remarks this morning to highlight to add to loan-loss reserves because of the inthe main points made in those documents. creasing volume of poorly performing and non- The problems currently afflicting the agricul- performing loans have substantially reduced the tural sector of our economy are more serious earnings of many farm banks. Indeed, in all too than any encountered since the Great Depression many cases earnings have turned negative and of the 1930s. Farm incomes and farm asset capital has been eroded, sometimes substantially values have declined sharply over the current so. The result has been that an increasing numdecade as crop prices—responding to a major ber of farm banks have failed (68 last year) and increase in world supplies of farm products rela- the number of seriously troubled banks has risen tive to demand—have dropped substantially substantially. from boom-time levels of the late 1970s. All of It is important to keep the present situation in our farmers have been adversely affected by proper perspective, however. More than 95 perthese developments, but not to the same degree. cent of the total loans at all agricultural banks are Farmers that are relatively debt free generally performing, and one-half of these banks reported continue to have strong financial positions al- earnings equal to at least 10 percent of their though significantly less so than a few years ago. equity. Also, agricultural banks generally have a In contrast, farmers who entered the 1980s sub- substantial capital cushion to absorb loan losses. stantially in debt have experienced an erosion in The capital-asset ratio for all agricultural banks their financial health that generally is the more averaged 93A percent in September last year, serious the greater the degree of their leveraging. higher than it was at the start of the decade and Our staff estimates suggest that perhaps a third well above the IV2 percent ratio for the entire of the full-time producers on commercial-sized banking system. family farms are experiencing moderate to se- There are a number of recent developments vere financial stress. This group owes about one- that should work to assist the farm economy, half of the farm debt of all such operators. The including the recent dramatic fall in energy prices problems of these farmers, of course, have been and the substantial declines in interest rates and compounded by the relatively high interest rates in the exchange value of the dollar that have that have prevailed over the current decade. In occurred over the past year or so. The recently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 313 enacted farm bill also offers an additional source In considering voluntarily arranged loan reof support for farm incomes. At the same time, structurings, the treatment of such restructurings however, prospective supply conditions for farm by Generally Accepted Accounting Principles products both at home and internationally, sug- (GAAP) deserves special emphasis. In particugest that a substantial rebound in crop prices, lar, Financial Accounting Standards No. 15 specand thus in farm incomes, is not likely to take ifies that in cases in which the total of cash place over the foreseeable future. Certainly it receipts that can reasonably be expected to be would appear unwise to base public policy on the received under the terms of a restructured loan assumption that such a rebound will take place. are at least equal to the original principal value of Accordingly, while farmers that are now finan- the loan, a lender need not change the value of cially healthy should be able to avoid serious the loan shown on its books. problems, and many borderline farm operators Given the seriousness of the existing problems may be able to work out of their current difficul- in the agricultural sector, the Federal Reserve ties, many other farmers with relatively heavy believes that regulatory policies that are foldebt loads face a continuation of serious difficul- lowed by examiners in classifying loans should ties. That continuation means, of course, that a give full consideration to GAAP accounting prosizable number of farm banks will also continue cedures. to experience severe strains. Besides debt restructurings that are undertak- It is altogether understandable, that the Con- en voluntarily by both lender and borrower withgress is seeking to identify approaches by which out governmental assistance, there are, of appropriate assistance can be provided to trou- course, a number of proposals for restructuring bled farm banks to aid them and their farmer the terms of farm debt that would involve the customers to get through this period. As I indi- government in a decidedly more active way. cated at the beginning of my remarks, the Board, Some have proposed that a moratorium be imat the request of the Congress, has reviewed a posed on loan foreclosures (by either the federal number of proposals that are under consideration or state governments). This moratorium amounts by the Congress to accomplish this goal. In my to a kind of forced restructuring of debt because remaining time I will summarize the Board's over the moratorium period farmers would retain assessment of these proposals and review certain title to and use of their land while being relieved supervisory policies that the Board intends to of the drain that interest and principal payments employ to provide assistance to basically sound, place on cash flow. Such a restructuring would well-managed farm banks. clearly assist farm borrowers, at least in the short run. But such help would come at the expense of DEBT RESTRUCTURING farm lenders and could prove particularly detrimental to the financial health of already weak- One approach that can be taken to deal with the ened farm lenders. The imposition of such present debt problems of farm banks and their arrangements, moreover, would cast a long shadfarmer customers is to restructure that debt. ow over future credit extensions. Traditionally, when borrowers have been unable Other proposals for government-assisted debt to meet their debt service obligations but ap- restructuring arrangements would induce volunpeared to have a reasonably good prospect of tary participation by both borrowers and lenders eventually repaying a loan, lenders have been through the provision of government subsidies or willing to practice forbearance by changing the guarantees. Such governmental arrangements— terms of loan agreements to make them more as for example those offered by the Farmers compatible with the altered economic circum- Home Administration—have the quality of genstances of the borrower. Also, in some cases, erally assisting both farmers and farm banks. At lenders have extended additional credit to trou- the same time, such assistance does not come bled borrowers when it appeared that that credit free; its provision would add to government might significantly improve their prospects of costs either immediately or in the future and thus present yet another obstacle to achieving a much ultimately returning to economic health and rerequired reduction of the federal deficit. paying all their indebtedness. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin • May 1986 NET WORTH CERTIFICATES AND LOAN-LOSS tions whose real capital has been wiped out or WRITE-OFF DEFERRALS greatly depleted by loan losses and whose earnings prospects are poor. In these cases the Board Other proposals under consideration by the Con- believes it would be far better to seek a permagress—the stretch-out of loan-loss write-offs and nent solution to the bank's problem by having it the issuance of net worth certificates—would not obtain new capital or, if its problems are too result in an immediate expenditure of public severe, by merging it with a stronger institution. funds, although both likely would add to the There are, of course, less extreme situations in Federal Deposit Insurance Corporation's which a bank has suffered setbacks but retains a (FDIC's) costs over the longer run. Both these sizable amount of capital—although consideradevices would boost regulatory capital without bly less than normally maintained or perhaps injecting real capital, the basic objective being to even less than required to meet minimum regulabuy time to enable a bank to restore its real tory standards—and has reasonably good proscapital. This end would be accomplished with the pects for recovery over time. In these situations, net worth certificate approach through an ex- however, a more straightforward way of buying change of promissory notes between the troubled time for institutions would be simply for supervibank and the FDIC (or possibly its primary sors to permit them to operate for some interval regulator) and with the loan-loss deferral ap- with capital at levels below supervisory stanproach by permitting a write-off of loan losses dards. The Federal Reserve already follows this over an extended period of time. capital forbearance approach in applying its capi- One important difference between the two tal guidelines. We recognize that an important approaches, as they have generally been pro- function of capital is to absorb unexpected posed, is that loan-loss stretch-outs would be losses, and that a bank that has recently utilized available to all banks meeting specified qualifica- its capital for this purpose may not be in a tions while net worth certificates could be issued position to replenish its capital resources immeto selected institutions on a more discretionary diately, although its long-run prospects may be basis. While in theory a loan-loss deferral pro- quite favorable. gram could be structured to provide more target- One problem that does arise when a bank's ed assistance, in practice this might be difficult. capital is temporarily depleted is that its single In its letter to this committee, the Board borrower loan limit is reduced commensurately expressed strong reservations about the use of because this limit is based on a percentage of either net worth certificates or loan-loss stretch- capital (15 percent in the case of national banks). outs. In particular, the Board noted that they Thus, although a loan may have been within the raise the question of whether regulatory account- single borrower limit at inception, a reduction in ing practices should differ significantly from capital that results from loan losses will lower the Generally Accepted Accounting Principles. bank's loan limit, thereby precluding the restruc- Since under these proposals regulatory account- turing of loans that are above the reduced single ing statements would show levels of capital that borrower limit. This reduction would occur even substantially exceeded those levels reported on though the absolute amount of the loan would financial statements prepared under GAAP, this not be increased. It is our view that if this would tend to cause public confusion and impair problem could be dealt with and if the agencies the usefulness and credibility of regulatory finan- would agree to utilize the provisions of existing cial statements. generally accepted accounting standards as set In addition, the Board noted that such tech- out in Financial Accounting Standards Board niques do not address a bank's fundamental (FASB) No. 15, it would not be necessary nor financial situation. While these techniques buy would there be any advantage to issuing net time for a bank to improve its condition, they do worth certificates or endorsing the deferral of not in themselves provide a direct means for loan losses. achieving that end. Consequently, in the Board's In your letter to Chairman Volcker you also view, these approaches are likely to be largely asked for comment on the March 6 testimony of ineffective for most seriously troubled institu- Charles Sethness, Assistant Secretary of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 315 Treasury, and that of the American Bankers services in farm communities. An easing of state Association (ABA) and the Independent Bankers restrictions on branchings could also help main- Association of America (IB A A). First, regarding tain banking services in small towns in cases the testimony of Mr. Sethness, I believe it is when a separately organized and capitalized clear from my remarks that his views on the bank might not be viable. various proposals for assisting farm banks re- There are also important things that can and viewed here today parallel those of the Board. should be done by the banking regulators in these On the other hand, the ABA and the IBAA have difficult times. endorsed the stretching out of loan losses over a 1. Reaffirm the policy of not discouraging number of years. The Board, as I reviewed banks from exercising forbearance on farm loans earlier, has reservations regarding this approach, that are being restructured when there is a reafor the reasons I stated. sonable prospect that this action will work to the To sum up, it is clear that a substantial number mutual benefit of the bank as well as to the of farm families and farm banks are experiencing borrower. difficulty of greater or lesser degree at the pres- 2. Consistent with this general policy on forent time. In light of this situation, the Board bearance the agencies should be forthcoming in believes that the Congress and the banking agen- applying the principles of FASB No. 15. That is, cies should take actions that will provide assis- the agencies should not require that a loss be tance to the agricultural sector while, at the same recognized on a farm loan unless the anticipated time, not undercutting effective and appropriate cash receipts of the restructured debt are insuffisupervision of and accounting for the activities of cient to cover the principal amount of the loan. farm banks. In particular, the Congress and the 3. Also, in keeping with the spirit of that state legislators could make a much-needed con- approach the agencies should modify regulatory tribution by helping to maintain the provision of reporting requirements so that loans appropriatebanking services to small communities. The ly restructured no longer need be classified as Garn-St Germain Act of 1982 presently prohibits nonperforming loans. acquisitions of troubled banks across state lines 4. The single borrower limit should be changed before they have failed and acquisitions of failed or interpreted to prevent restructured loans from banks with assets of less than $500 million. The being held in violation of the limit based solely on banking agencies believe that these two con- the temporary decline in the bank's capital. straints should be eased by allowing failing bank 5. The agencies should offer a clear statement acquisitions across state lines and by reducing of their intention to employ a simple policy of the size criterion so as to maintain the banking capital forbearance. • Statement by Frank E. Morris, President, Feder- 2. The dramatic decline in long-term interest al Reserve Bank of Boston, before the Subcom- rates and the accompanying rise in stock prices mittee on Domestic Monetary Policy of the Com- will strengthen both the housing industry and mittee on Banking, Finance and Urban Affairs, business plant and equipment spending. U.S. House of Representatives, March 19,1986. 3. Consumer spending will be supported through the wealth effect of higher stock and I will comment briefly on our view of the national bond prices and by the drop in the price of scene and on the outlook for the New England imported oil, which is equivalent to an increase economy. of $20 billion in disposable income. We expect 1986 to be a strong year for the 4. The decline in the dollar will gradually American economy. There are four reasons for stimulate our manufacturing industries. A few our optimism: New England companies have already reported 1. The inventory adjustment, which was a drag higher export orders from European buyers. on our 1985 performance, should be behind us. When the employment and unemployment sta- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin • May 1986 tistics show conflicting signals, as they did in ployment figures for Massachusetts. Employ- January and February, I place the greatest ment in high tech industry has declined almost 4 weight on the payroll employment series. Statis- percent during the past year, with the greatest tically, it is much easier to measure employment weakness in the computer industry, but this than unemployment. Of the two employment weakness was more than offset by strength in series, the payroll survey is more reliable than nonmanufacturing employment, particularly in the household survey. construction and financial services. The January payroll survey showed an unusu- There are three reasons why the outlook for ally large rise in employment—421,000. Some of the New England economy in 1986-87 is very this rise undoubtedly reflected errors in seasonal strong. adjustment caused by unusually mild weather. The February increase was much smaller— 1. The decline in interest rates and the rise in 226,000—which reflected more normal weather stock prices will stimulate plant and equipment conditions plus flooding in some parts of the investment, which, in turn, will revive our comcountry. The January and February figures prob- puter and other high tech industries. ably ought to be averaged to get a reliable 2. The decline in the dollar will have a dispropicture. The average gain in payroll employment portionate impact on New England, since we in these two months was 324,000—30 percent export more of our manufacturing production higher than the average monthly gain in 1985. than most other parts of the country. This is not a signal of weakness. 3. The decline in the price of oil will be more The outlook for the New England economy stimulative for New England than for the rest of continues to be strong despite a slowdown in our the country, since we are more dependent on oil high tech industries. In 1985, unemployment in and we will be spared the adverse consequences Massachusetts and New Hampshire averaged of the decline. Because these sources of future only 3.9 percent. All of the other New England strength will have an impact on an area with states had employment rates below 5 percent already low unemployment rates, I expect there except Maine, which averaged 5.4 percent. The to be a serious labor shortage in New England a resilience of our economy is shown in the em- year from now. • Statement by Robert H. Boykin, President, Fed- been more volatile than the national unemployeral Reserve Bank of Dallas, before the Subcom- ment rate. Its movement is often independent of mittee on Domestic Monetary Policy of the Com- economic conditions in the state. mittee on Banking, Finance and Urban Affairs, 2. The extremely large increase in Hispanic U.S. House of Representatives, March 19, 1986. unemployment in Texas raises questions as to whether a change in the way Hispanics are The Texas unemployment rate jumped 2 percent- counted may have contributed unduly to the age points—from 6.4 percent to 8.4 percent— recorded increase in their unemployment. between January and February. It seems likely 3. Other information suggests that labor marthat this increase reflects the volatility of the ket conditions have not deteriorated as much as unemployment rate series more than a funda- the rise in the unemployment rate would indimental deterioration in the Texas economy. cate. Without discounting the less than robust nature 4. Declines in energy have been blamed for of the state's economy, at least compared with much of the rise in the unemployment rate. In the the recent past, it seems likely that the Texas past, changes in energy industry employment unemployment rate should fall back toward 7 have not matched up well with changes in the percent rather than stay where it is. There are state unemployment rate. four reasons behind this conclusion. It would seem that some of the February rise 1. The Texas unemployment rate has always in the national unemployment rate is also the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 317 result of temporary or random factors that do not increased about 67,000. Thus, Hispanics reflect underlying weakness in the nation's econ- accounted for 45 percent of the total rise in omy. However, I will concentrate here on what I unemployment. In contrast, Hispanics represent believe the sharp rise in the unemployment rate somewhat less than 15 percent of the population in Texas in February 1986 indicates. in Texas. This disproportionate increase in unemployment among Hispanics calls into question the reported unemployment rate. If a significant THE VOLATILITY OF change has occurred in labor market conditions STATE UNEMPLOYMENT RATES in Texas, it is most likely a consequence of the decline in oil prices. Hispanics are heavily con- Texas is one of the ten large states whose unem- centrated in construction and agriculture, not in ployment rate is calculated from the Current the energy-dependent part of our state's econo- Population Survey (CPS) conducted by the U.S. my. Our construction industry is slowing down, Bureau of the Census (BLS). From a sample of but we have no evidence that it dropped precipi- 60,000 households nationally, the CPS estimates tously enough in February to produce the ineach month the number of people employed, crease in Hispanic unemployment reported in the unemployed, and in the labor force. Because the statistics. Also, at this time we are unaware of estimates are based on a sample, rather than on a any major deterioration in agricultural employcomprehensive census of the population, they ment. will vary because of random (and unavoidable) Some of the increase in Hispanic unemployfactors. The larger the sample, the less serious ment may be attributable to revisions in estiwill be the random variation in the series. Be- mates of the Texas population. The CPS data are cause estimates of the unemployment rate in adjusted so that the estimates conform to known Texas are based on a subset of the national CPS, population characteristics. For example, if a and thus on a smaller sample, the estimates for certain racial group comprises 10 percent of the Texas (or any of the other CPS states) will be CPS sample but makes up 12 percent of the more variable than the national estimate. Chart 1 actual population, then the survey results for that illustrates this point.1 group will be weighted more heavily. The Census In the past 20 years, the unemployment rate in Bureau recently revised its estimates of the His- Texas has increased or decreased 1 percentage panic population in Texas to account for illegal point or more 14 times. The February increase is immigration. This revision increased the estithe tenth such change since the beginning of mate of the number of Hispanics in Texas about 1980. All but two of the previous increases were 3 percent. It is possible, although both the Cenpreceded or followed by offsetting changes of 1 sus and the BLS discount its importance, that percentage point or more within two months. A this increase in the weight accorded to Hispanics recent example occurred in October and Novem- affected the Texas unemployment rate. ber 1985, when the unemployment rate increased from 7.1 percent to 8.1 percent, then fell to 6.9 percent. OTHER LABOR MARKET INFORMATION Although other labor market indicators point to THE HISPANIC POPULATION AND some worsening of economic and labor market POSSIBLE STATISTICAL PROBLEMS conditions in Texas, these data are not consistent with a rise of 2 percentage points in the unem- In February the number of unemployed persons ployment rate. Month-to-month growth of total in Texas increased about 150,000, while the nonagricultural employment has been slower in number of Hispanics who were unemployed 1985 and early 1986 than in the previous two years. The energy sector has been declining, but total nonagricultural employment growth, as 1. The attachments to this statement are available on measured by the BLS establishment survey, is request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. still positive. Nevertheless, the recent employ- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318 Federal Reserve Bulletin • May 1986 ment growth has not kept pace with labor force loosely related to the unemployment rate in the growth. Quarterly average unemployment rates state. Some of those who lose or leave their jobs for Texas have risen from 6.7 to 7.3 percent in the energy sector find employment in other between the first and fourth quarters of 1985. industries; thus, they may not be unemployed For information on more recent developments, long enough to show up in the unemployment we have to rely on personal contacts in the Texas statistics. Others leave the state in search of business community. An informal sampling of work. manufacturers and retailers that we contacted in Finally, those who watch economic conditions early March suggests that employment has in the state have noted with particular interest changed little since January. Although people in the estimates of the employment effect in Texas or dependent on the energy sector reported fall- associated with declines in the price of oil. Some ing business activity, other respondents reported analysts put this effect as high as 25,000 jobs lost that sales to customers outside the state of Texas for each dollar that oil prices decline. There is have risen. Such comments reflect the impor- evidence that the effect is not as large as that. In tance of national conditions for Texas. This kind any case, these estimates should not be interpretof anecdotal evidence should be interpreted with ed as the immediate effect of oil price drops. caution. Over time, however, our contacts have These numbers reflect the long-run effect on the provided information that broadly matches other Texas economy, after it has had at least a year to state economic indicators, but this anecdotal adjust to these shocks. Such estimates provide information does not always correspond with no evidence that recent oil price declines have as short-term changes in the unemployment rate. yet had as severe a negative impact on the state's For some time these surveys have suggested economy as may seem to be the case from the sluggishness in the Texas economy, even during February unemployment rate in Texas. months when the unemployment rate was falling. THE ROLE OF THE ENERGY INDUSTRY SUMMARY Although overall employment is growing, the The Texas economy is certainly weakening, in same cannot be said for such energy industries as large part because of the decline in oil prices, so oil and gas extraction, oil field machinery, and that the unemployment rate in March is unlikely petroleum refining. Despite declining employ- to fully recover from the February increase. ment in the energy sector for more than a year, Nevertheless, economic conditions are not worsneither its rate of decline nor its share of total ening as rapidly as an increase of 2 percentage employment is large enough to induce such a points would indicate. There are ample explanalarge rise in the unemployment rate. In the past, tions, including random variation, to account for changes in energy employment have been only at least part of the increase. • Statement by Robert T. Parry, President, Feder- expert on the intricacies of employment and al Reserve Bank of San Francisco, before the unemployment data. For detailed analyses of Subcommittee on Domestic Monetary Policy of monthly variations in these series I rely on the the Committee on Banking, Finance and Urban U.S. Bureau of Labor Statistics, which is the Affairs, U.S. House of Representatives, March agency that compiles these data. 19, 1986. Much of what I have to say implies that we should not rely on month-to-month variations in state employment and unemployment data. I will I am pleased to speak on the California employ- speak broadly of a few national trends before I ment picture before this subcommittee. I wish to turn to the California experience and a comparistate at the outset, however, that I am not an son of California with the nation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 319 THE NATIONAL LABOR MARKET CALIFORNIA'S UNEMPLO YMENT RATE The national civilian unemployment rate de- California's unemployment rate has been highly clined from 6.9 percent in December to 6.7 variable over the past three months. On a seapercent in January before increasing sharply in sonally adjusted basis, it was 6.7 percent in February to 7.3 percent. According to testimony December, then 5.8 percent in January, and by Commissioner Norwood of the Bureau of finally 7.2 percent in February. Many economic Labor Statistics (statement on March 7 before analysts were surprised when California's unemthe Joint Economic Committee), two-thirds of ployment rate dropped so sharply in January. the increase in February, or 0.4 percentage Although January's unemployment rate reprepoint, was due to increases in California, Texas, sented the lowest level it had reached in 16 years, and Illinois, many analysts cautioned against taking the one- National civilian employment, as measured in month drop too seriously. That caution now the household survey, declined 394,000 in Febru- appears well placed: the reversal in February ary, after having posted a similar gain in January. reminds us again that we should be wary of According to the household survey, slightly relying too heavily on monthly movements in more than half (203,000) of the February decline state unemployment rates. in employment was in agriculture and slightly If we examine monthly changes in the Califorless than half (190,000) was in nonagricultural nia unemployment rate over the past 10 years employment. Unlike the household survey, how- (since January 1976) and compare them with ever, the establishment survey, which does not monthly changes in the national unemployment include agriculture, showed a national increase rate over the same period, we find that the of 226,000 in nonagricultural employment. average monthly change in the California rate is The erratic changes in national labor market slightly more than twice as large as the average statistics in January and February make it diffi- monthly change in the national rate. (The mean cult to assess the current state of the national absolute change in the California rate is 0.34 labor market on the basis of data for a single percentage point, compared with 0.16 percentage month. It probably is more informative to look at point for the national rate.) movements over the past four months by averag- There are several reasons why monthly ing the January and February data and compar- changes in California's unemployment rate may ing the results with the average for November not give an accurate picture of changes in Caliand December 1985. In doing this, both the fornia's labor market or economy. Because of household data, adjusted for the revised popula- the small sample size for California compared tion estimates, and the establishment data show with that for the nation (4,200 compared with that employment gains were fairly substantial for 57,000 nationally) the state's monthly unemploythe average of January and February as com- ment rate is subject to larger sampling errors pared with the average for November and De- than is the national unemployment rate. Morecember. National employment between these over, the statistical process necessary to seasontwo periods increased by 320,000 jobs, as mea- ally adjust the raw data can introduce further sured by the household survey, and by 677,000 noise into the seasonally adjusted data. Because jobs, as measured by the establishment survey. of the potential importance of statistical variation By comparison, during 1985 the average two- in the monthly state figures, most experts on month change in employment was 326,000 in the unemployment rely on changes in unemployment household survey and 499,000 in the establish- rates over periods longer than a month (usually ment survey. I am led to the conclusion from this at least three months) in which statistical errors comparison that moderate improvement in na- are more likely to cancel. tional employment continued in early 1986. I do Besides sampling and seasonal noise in the not conclude that the sharp drop in household monthly data, there can be survey errors. I employment in the single month of February is a understand that there appears to have been a signal of a decline in aggregate economic activi- "coding error" in January's data that may have ty. contributed somewhat to January's low national Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Federal Reserve Bulletin • May 1986 and state unemployment rates. According to vey of agricultural employment conducted by the Commissioner Norwood in a statement before California Economic Development Department the Joint Economic Committee on March 7, this indicates that California agricultural employfactor may have understated January's national ment, which accounts for about 3 percent of state unemployment rate by 0.1 percentage point and employment, increased at a seasonally adjusted thus may have overstated the rise in reported rate of 12.7 percent. These figures, together with unemployment between January and February the fact that the rise in February's California by the same amount. I do not know to what unemployment rate is associated with a rise in extent the coding error affected the rise in Febru- the recorded labor force rather than with a ary's unemployment rate for California. I would decline in employment, make it difficult to exhave to rely on the Bureau of Labor Statistics for plain the February rise in California's unemploysuch an estimate. ment rate on the basis of weather-related factors. Although California's seasonally adjusted un- Another potential explanation is that the reemployment rate rose from 5.8 percent to 7.2 cent plunge in oil prices may have caused oilpercent between January and February, Califor- related employment to fall. Employment in what nia's recorded employment actually grew at a is termed the "fuel mining" industry did decline seasonally adjusted annualized rate of 2.1 per- at a seasonally adjusted annual rate of about 3 cent on the basis of the household survey while percent in February, and employment in the nonagricultural employment rose 2.6 percent on manufacture of petroleum and coal products fell the basis of the establishment survey. This differ- at a seasonally adjusted annual rate of about 4 ence in rates suggests that the February jump in percent. However, these two sectors taken to- California's unemployment rate was caused by gether account for only six-tenths of 1 percent of an increase in California's recorded labor force all of California's jobs. Thus, the oil price drop is rather than an underlying weakness in California also not a convincing explanation of the sudden employment. Indeed, data for California's sea- change in California's unemployment rate. sonally adjusted labor force indicate that it increased 221,000 between January and February, which is equivalent to a seasonally adjusted CALIFORNIA PERSPECTIVE annual rate of 22.5 percent. A monthly increase of this magnitude is not indicative of the underly- California generally has posted stronger employing trend. The average (mean absolute) monthly ment growth than has the nation over extended change during the past five years was only 53,000 periods. The most recent economic expansion and average annual labor force growth in Califor- has been no exception. Over the three-year perinia during the past five years was 2.3 percent. od from the trough of the recession in December Clearly, California's labor force registered an 1982 to December 1985, California employment unusually large increase in February. increased 10.9 percent (3.5 percent annually) One factor mentioned in Commissioner Nor- while national employment increased 9.2 percent wood's March 7 statement as an explanation of (3.0 percent annually). During the same period the increase in California's unemployment rate in the unemployment rates in California and the February is the flooding that occurred after se- nation declined from their peaks of 11.1 percent vere storms during mid-February. However, we and 10.7 percent respectively to 6.7 percent and can find little support for this contention. If 6.9 percent respectively. weather had been a significant factor, then we These numbers indicate that California's labor would have expected state employment to de- market has made impressive strides over the past cline, which it did not. Moreover, agriculture and three years. In assessing where California is construction should have performed significantly headed in 1986, it is helpful to gain some perspecworse than other sectors in the state. Construc- tive from economic forecasts of the California tion employment, which accounts for about 4 economy. Virtually all forecasts of the California percent of state employment, did decline at a economy are relatively optimistic. In a survey of seasonally adjusted annual rate of 2.9 percent four forecasts of the state economy for 1986, between January and February. However, a sur- estimates of growth in real personal income from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 321 the fourth quarter of 1985 to the fourth quarter of the California economy—and, just as important- 1986 ranged from a low of 2.1 percent to a high of ly, of the national economy. As I am sure you are 4.4 percent, with an average value of 2.5 percent. aware, California represents a large part of the State civilian employment (fourth quarter to U.S. economy. California accounts for 11 perfourth quarter) is forecast to rise between 2.2 cent of the nation's jobs, and Californians earn percent and 3.7 percent, with an average value of 12 percent of personal income received in this 2.8 percent, which is an improvement over the country. It is estimated that the total volume of 1.8 percent growth recorded in 1985. The range goods and services produced by the California of forecasts for the California unemployment rate economy exceeds that of all but seven of the in the fourth quarter of 1986 is 6.5 percent to 7.2 largest countries in the world. Against this backpercent, with an average of 6.9 percent. Thus, ground, evidence that California—and other imthese forecasts indicate expectations of a fairly portant regions of the country—are experiencing strong state economy in 1986. Telephone calls economic difficulty would be legitimate cause for last week to state economic forecasters revealed concern about the economic prospects for the that not one of these persons interpreted the United States as a whole. February unemployment rate as a signal that the As I have described to you, however, pros- California economy is in trouble—a rare instance pects for California are good. To an important of unanimity among economists. Just as I have extent, this is because the California economy cautioned you about taking this single number will be responding to the same positive fundatoo seriously, these economists cautioned mentals that will be shaping the national outlook. against interpreting the one-month change as a In particular, I refer to the sizable declines in sign of worse things to come. interest rates that we have experienced since mid-1984, the appreciable decline in the dollar that began last year, and prospects for continued low inflation in the face of declining oil prices. CONCLUSIONS All of these factors point toward a higher rate of To sum up, it is my view, and that of the Bank's economic growth in this year than in last year, research staff, that the sharp jump in the Califor- and some moderate declines in the unemploynia unemployment number in February is giving ment rate. Nothing in the California picture to a misleading signal of the underlying strength of date would lead me to alter that conclusion. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Announcements PRESTON MARTIN: RESIGNATION AS A the Reserve Banks. His contributions will be missed, MEMBER OF THE BOARD OF GOVERNORS but we are glad he will be available for counsel in the future. At a press conference on March 21, Vice Chair- Vice Chairman Martin received the following man Preston Martin announced his resignation as reply to his letter of resignation: a member of the Board of Governors, effective April 30, 1986. Mr. Martin sent the following The White House letter of resignation to President Reagan: Washington April 11, 1986 Washington, D.C. March 21, 1986 Dear Pres: President Ronald Wilson Reagan It is with regret that I accept your resignation as The White House Vice Chairman and as a Member of the Board of Governors of the Federal Reserve System, effective Dear Mr. President: April 30, 1986. Your four years of service at our Nation's central It has been my honor and privilege to have served bank have been years of great economic progress for on the Board of the nation's central bank for some America. I believe that this is no coincidence. When forty-eight months. For the last hundred days I have our Administration came into office in 1981, it was agonized over whether to serve four more years as with a recognition of the importance of stable, moder- Vice Chairman of the Federal Reserve System. ate monetary growth to the sustained health of our In this long process I have benefitted from the economy. As you know, however, deciding what advice and counsel of my wife, my colleagues here, constitutes wise policy in this area is not the same members of your Administration and many in the thing as achieving it. The challenges facing the nationfinancial communities. The support and encourageal and international economic community today are ment I received therefrom was substantial and I am complex, and many of them are unforeseeable. Coping deeply grateful. with such rapidly changing conditions requires a rare However in the end any decision is a very personal blend of experience, skill, and good judgment on the one based upon the individual's goals and objectives. part of all those charged with the public trust. On that basis, and with real regret, I have come to During your term as Vice Chairman of the Federal tender my resignation from this Board, to take place at Reserve, you have consistently displayed these qualithe end of April, 1986. ties and won the abiding respect of your colleagues both on the Board and throughout the banking system. Respectfully yours, To that I would add only that you have earned the esteem and appreciation of the American people for Preston Martin your contributions to our national resurgence. After the announcement by Mr. Martin, Chair- You can take great pride in this latest addition to your distinguished record of public service. Nancy man Volcker issued the following statement: joins me in wishing you and your family every future happiness and success. March 21, 1986 Mr. Martin has brought a wide experience and background in public and private life to the nation and Sincerely, to the Federal Reserve. He is a man of strong and (signed) Ron independent views as befits the Board. He has played a leadership role in many aspects of the System's The Honorable Preston Martin, Vice Chairman work, bringing to bear his special insights into finan- Board of Governors of the cial institutions, the financial system and markets, and Federal Reserve System carrying particular responsibility for relationships with Washington, D.C. 20551 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

323 CHANGE IN THE DISCOUNT RATE the authority to require early withdrawal penalties under Regulation Q and the explicit mandate The Federal Reserve Board announced on to offer MMDAs. March 7, 1986, a reduction in the discount rate The final amendments to Regulations D and Q from 71/2 percent to 7 percent, effective immedi- adapt to the expiration of DIDC authority by ately. continuing to exempt deposits with the existing The discount rate action was taken in the withdrawal and transaction features of savings context of similar action by other important and MMDAs from reserve requirements on industrial countries and sizable declines in most transaction accounts and from the prohibition of market interest rates in recent weeks. More interest on demand deposits. That is, savings broadly, growth in the various monetary aggre- deposits and MMDAs will continue to qualify for gates has been more limited this year, prospects the zero or 3 percent (nonpersonal) time deposit for sustaining improved price performance and reserve requirement if the following conditions continuing restraint on costs have been further hold: for savings deposits, no more than three enhanced by the recent sharp declines in oil preauthorized, automatic, or telephone transfers prices, and the economic expansion appears to are allowed each month; for MMDAs, no more be proceeding within the nation's growth poten- than six transfers per month are authorized, of tial. which three can be by check, draft, or debit card. In making the change, the Board voted on Holders of both accounts still will be able to requests submitted by the Federal Reserve make unlimited withdrawals or interaccount Banks of Boston, New York, Philadelphia, Rich- transfers by mail, messenger, or in person at the mond, Atlanta, Chicago, St. Louis, Minneapolis, depository institution or at an automated teller Kansas City, Dallas, and San Francisco. (The machine. Board subsequently approved a similar action by The amendments also remove the limitation of the Federal Reserve Bank of Cleveland, effective $150,000 on business savings accounts, bringing March 10, 1986.) their treatment into line with MMDAs. If either The discount rate is the interest rate that is savings deposits or MMDAs held by businesses charged depository institutions when they bor- are authorized to exceed the transfer limitations row from their District Federal Reserve Banks. described above, they may be considered demand deposits on which interest could not be paid because businesses are not eligible to have AMENDMENTS TO negotiable order of withdrawal or automatic REGULATIONS D AND Q transfer accounts. Certain early withdrawal penalties are retained The Federal Reserve Board issued final amend- in the revised Regulation D to help maintain ments on March 19, 1986, to its Regulation D distinctions between transaction accounts and (Reserve Requirements of Depository Institu- time deposits, and between nonpersonal time tions) and Q (Interest on Deposits) that preserve deposits of different maturities for reserve rethe current treatment of money market deposit quirement purposes. Early withdrawal penalties accounts (MMDAs) and revise minimum penal- of at least seven days' interest are required on ties for early withdrawal of certain deposits. any withdrawal permitted within the first six In 1980 Congress passed the Depository Insti- days after a time deposit is made. This requiretutions Deregulation and Monetary Control Act, ment applies to both personal and nonpersonal which called for the orderly phaseout and ulti- time deposits. For nonpersonal time deposits mate elimination of interest rate ceilings on all with original maturities or notice periods of 18 deposit accounts, except for demand deposits, months or more that allow withdrawal within the under the direction of the Depository Institutions first 18 months of the deposit, a one month's Deregulation Committee (DIDC). Under present interest penalty is required. law, the DIDC terminates and all interest rate The new early withdrawal rules are effective ceiling authority expires March 31, 1986, as does April 1, 1986, for most institutions. Credit unions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin • May 1986 and other depository institutions not now subject retired, effective April 3, 1986. to early withdrawal penalties prescribed by regu- Robert M. Fisher, Assistant Director and lation will have until January 1, 1987, to begin Chief, Mortgage and Consumer Finance Section, imposing such penalties on time deposits Division of Research and Statistics, retired, opened, renewed, or added to on or after that effective March 21, 1986. date. Helmut F. Wendel, Deputy Associate Director, Division of Research and Statistics, retired, effective March 7, 1986. CHANGES IN BOARD STAFF The Board has also announced the appoint- The Board of Governors has announced the ment of Joe M. Cleaver to the official staff as following changes in its official staff. Assistant Director in the Division of Banking Walter Althausen, Assistant Director in the Supervision and Regulation, effective April 7, Division of Federal Reserve Bank Operations, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

325 Legal Developments AMENDMENTS TO REGULATION D Section 204.2—Definitions The Board of Governors is amending is Regulation D, (b)(1) "Demand deposit" means a deposit that is Reserve Requirements of Depository Institutions, and payable on demand, or a deposit issued with an is adopting a final rule amending its Regulation Q, original maturity or required notice period of less Interest on Deposits, because of the expiration on than seven days, or a deposit representing funds for March 31, 1986, of the Depository Institutions Deregu- which the depository institution does not reserve the lation Committee ("DIDC") and with it the authority right to require at least seven days' written notice of to set regulatory interest rate ceilings on deposits other an intended withdrawal. Demand deposits may be in than demand deposits. Also, the DIDC's rules autho- the form of: rizing money market deposit accounts ("MMDAs") (i) checking accounts; expire on that date along with the provisions in Regu- (ii) certified, cashier's and officer's checks (inlation Q prescribing early withdrawal penalties. The cluding checks issued by the depository institustatutory prohibition against the payment of interest tion in payment of dividends); on demand deposits remains in effect. (iii) traveler's checks and money orders that are Generally, the amendments to Regulation D are primary obligations of the issuing institution; intended to preserve the current scheme of reserve (iv) checks or drafts drawn by, or on behalf of, a requirements for transaction accounts, savings depos- non-United States office of a depository instituits (including MMDAs), and time deposits. The tion on an account maintained at any of the amendments to Regulation D include revised minimum institution's United States offices; early withdrawal penalties designed to distinguish be- (v) letters of credit sold for cash or its equivalent; tween certain types of deposits for reserve require- (vi) withheld taxes, withheld insurance and other ment purposes. The amendments also include minor withheld funds; changes to the definitions in Regulation D and clarifi- (vii) time deposits that have matured or time cation of existing requirements for classifying ac- deposits upon which the contractually required counts. notice of withdrawal was given and the notice At this time, the Board is also adopting other period has expired and which have not been technical amendments to Regulations D and Q. The renewed (either by action of the depositor or Board will be amending the advertising rule in its automatically under the terms of the deposit Regulation Q at a later date. agreement); and Effective April 1, 1986, the Board amends 12 (viii) an obligation to pay, on demand or within six C.F.R. Part 204 as follows: days, a check (or other instrument, device, or arrangement for the transfer of funds) drawn on the depository institution, where the account of Part 204—Reserve Requirements of Depository the institution's customer already has been deb- Institutions ited. (2) The term "demand deposit" also means deposits or accounts on which the depository institution has 1. The authority citation for 12 C.F.R. Part 204 contin- reserved the right to require at least seven days' ues to read as follows: written notice prior to withdrawal or transfer of any funds in the account and from which the depositor is authorized to make withdrawals or transfers in excess of the withdrawal or transfer limitations Authority. 12 U.S.C. § 461 et seq. specified in section 204.2(d)(2) for such an account and the account is not a NOW account, or an ATS account or other account that meets the criteria 2. Part 204 is amended by revising sections 204.2, specified in either section 204.2(b)(3)(ii) or (iii) be- 204.3, and 204.4 as follows: low. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin • May 1986 (3) "Demand deposit" does not include: early withdrawals are permitted must impose ad- (i) any account that is a time deposit or a savings ditional early withdrawal penalties of at least deposit under this Part; seven days' simple interest on amounts with- (ii) any deposit or account on which the deposi- drawn within six days after each partial withdrawtory institution has reserved the right to require at al. If such additional early withdrawal penalties least seven days' written notice prior to withdraw- are not imposed, the account ceases to be a time al or transfer of any funds in the account and deposit. The account may become a savings deeither: posit if it meets the requirements for a saving (A) is subject to check, draft, negotiable order deposit; otherwise it becomes a transaction acof withdrawal, share draft or similar item, such count.2 "Time deposit" includes funds: as an account authorized by 12 U.S.C. 1832(a) (A) payable on a specified date not less than ("NOW Account") and an MMDA as de- seven days after the date of deposit; scribed in section 204.2(d)(2)(ii), provided that (B) payable at the expiration of a specified time the depositor is eligible to hold a NOW account; not less than seven days after the date of or deposit; (B) from which the depositor is authorized to (C) payable only upon written notice that is make transfers by preauthorized transfer or actually required to be given by the depositor telephonic (including data transmission) agree- not less than seven days prior to withdrawal; ment, order or instruction to another account or (D) held in "club" accounts (such as "Christto a third party, provided that the depositor is mas club" accounts and "vacation club" aceligible to hold a NOW account; counts that are not maintained as "savings (iii) any deposit or account on which the deposi- deposits") that are deposited under written tory institution has reserved the right to require at contracts providing that no withdrawal shall be least seven days' written notice prior to withdraw- made until a certain number of periodic deposal or transfer of any funds in the account and from its have been made during a period of not less which withdrawals may be made automatically than three months even though some of the through payment to the depository institution deposits may be made within six days from the itself or through transfer of credit to a demand end of the period; or deposit or other account in order to cover checks or drafts drawn upon the institution or to maintain lack of a regulatory requirement for such a penalty, as in the case of a specified balance in, or to make periodic trans- Federally-chartered credit unions, may continue to be classified as time deposits; however, the penalty should be included in time fers to such other account, such as accounts deposits opened, renewed or to which additional deposits are made on authorized by 12 U.S.C. 371a (automatic transfer or after January 1, 1987. account or ATS account), provided that the de- A time deposit, or a portion thereof, may be paid before maturity without imposing the early withdrawal penalties specified by this Part: positor is eligible to hold an ATS account; (a) Where the time, deposit is maintained in an Individual Retirement (iv) any obligation that is a time deposit under Account established in accordance with 26 U.S.C. 408 and is paid within seven days after establishment of the Individual Retirement section 204.2(c)(l)(iv); Account pursuant to 26 C.F.R. 1.408-6(d)(4), or where it is main- (v) checks or drafts drawn by the depository tained in a Keogh (H.R. 10) plan; provided that the depositor institution on the Federal Reserve or on another forfeits an amount at least equal to the simple interest earned on the amount withdrawn; depository institution; or (b) Where the depository institution pays all or a portion of a time (vi) IBF time deposits meeting the requirements deposit representing funds contributed to an Individual Retirement of section 204.8(a)(2). Account or a Keogh (H.R. 10) plan established pursuant to 26 U.S.C. 408 or 26 U.S.C. 401 when the individual for whose (c)(1) "Time deposit" means: benefit the account is maintained attains age 59-'/2 or is disabled (as (i) a deposit that the depositor does not have a defined in 26 U.S.C. 72(m)(7)) or thereafter; (c) Where the depository institution pays that portion of a time right and is not permitted to make withdrawals deposit on which federal deposit insurance has been lost as the from within six days after the date of deposit result of the merger of two or more federally insured banks in which unless the deposit is subject to an early withdraw- the depositor previously maintained separate time deposits, for a period of one year from the date of the merger; al penalty of at least seven days' simple interest (d) Upon the death of any owner of the time deposit funds; on amounts withdrawn within the first six days (e) When the owner of the time deposit is determined to be legally after deposit.1 A time deposit from which partial incompetent by a court or other administrative body of competent jurisdiction; or (f) Where a time deposit is withdrawn within ten days after a specified maturity date even though the deposit contract provided for automatic renewal at the maturity date. 1. Accounts existing on March 31, 1986, may satisfy the early 2. A nonpersonal time deposit with a stated maturity of one and withdrawal penalties specified by this Part by meeting the Depository one-half years or more may be treated as having an original maturity Institutions Deregulation Committee's early withdrawal penalties in of one and one-half years or more for reserve requirement purposes existence on March 31, 1986. Accounts that otherwise meet the only if it is subject to the minimum penalty described in section requirements for time deposits but that lack such penalties due to a 204.2(f)(3). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 327 (E) share certificates and certificates of indebt- four weeks, for the purpose of transferring funds edness issued by credit unions, and certificate to another account of the depositor at the same accounts and notice accounts issued by savings institution (including a "transaction account") or and loan associations; for making payment to a third party by means of a (ii) a "savings deposit;" preauthorized or automatic transfer, or telephonic (iii) an "IBF time deposit" meeting the require- (including data transmission) agreement, order or ments of section 204.8(a)(2); and instruction, provided that no such withdrawals (iv) borrowings, regardless of maturity, represent- may be by check, draft or similar order (including ed by a promissory note, an acknowledgment of debit card) drawn by the depositor to third peradvance, or similar obligation described in section sons. A "preauthorized transfer" includes any 204.2(a)(l)(vii) that is issued to, or any bankers' arrangement by the depository institution to pay a acceptance (other than the type described in third party from the account of a depositor upon 12 U.S.C. 372) of the depository institution held written or oral instruction (including an order by: received through an automated clearing house (A) any office located outside the United States (ACH)) or any arrangement by a depository instiof another depository institution or Edge or tution to pay a third party from the account of the agreement corporation organized under the depositor at a predetermined time or on a fixed laws of the United States; schedule. Such an account is not a "transaction (B) any office located outside the United States account" by virtue of an arrangement that permits of a foreign bank; transfers for the purpose of repaying loans and (C) a foreign national government, or an agency associated expenses at the same depository instior instrumentality thereof,3 engaged principally tution (as originator or servicer) or that permits in activities which are ordinarily performed in transfers of funds from the account to another the United States by governmental entities; account of the same depositor at the same institu- (D) an international entity of which the United tion or permits withdrawals (payments directly to States is a member; or the depositor) from the account when such trans- (E) any other foreign, international, or suprana- fers or withdrawals are made by mail, messenger, tional entity specifically designated by the automated teller machine or in person or when Board.4 such withdrawals are made by telephone (via (2) A time deposit may be represented by a transfer- check mailed to the depositor) regardless of the able or nontransferable, or a negotiable or nonnego- number of such transfers or withdrawals.5 tiable, certificate, instrument, passbook, or state- (ii) A deposit or account, such as an account ment, or by book entry or otherwise. commonly known as a "money market deposit (d)(1) "Savings deposit" means a deposit or account account" ("MMDA"), that otherwise meets the with respect to which the depositor is not required requirements of section 204.2(d)(1) and from by the deposit contract but may at any time be which, under the terms of the deposit contract or required by the depository institution to give written by practice of the depository institution, the denotice of an intended withdrawal not less than seven positor is permitted or authorized to make no days before withdrawal is made, and that is not more than six transfers per calendar month or payable on a specified date or at the expiration of a statement cycle (or similar period) of at least four specified time after the date of deposit. The term "savings deposit" includes a regular share account at a credit union and a regular account at a savings and loan association. 5. In order to ensure that no more than the permitted number of withdrawals or transfers are made, for an account to come within the (2) The term "savings deposit" also means: definitions in section 204.2(d)(2), a depository institution must either: (i) A deposit or account that otherwise meets the (a) prevent withdrawals or transfers of funds in this account that are requirements of section 204.2(d)(1) and from in excess of the limits established by sections 204.2(d)(2)(i) or (ii), or (b) adopt procedures to monitor those transfers on an ex post basis which, under the terms of the account agreement, and contact customers who exceed the limits established by secor by practice of the depository institution, the tions 204.2(d)(2)(i) or 204.2(d)(2)(ii) on more than an occasional basis. depositor is permitted or authorized to make no more than three withdrawals per calendar month, For customers who continue to violate those limits after being or statement cycle (or similar period) of at least contacted by the depository institution, the depository institution must either close the account and place the funds in another account that the depositor is eligible to maintain or take away the account's transfer and draft capacities. 3. Other than states, provinces, municipalities, or other regional or An account that authorizes withdrawals or transfers in excess of the local governmental units or agencies or instrumentalities thereof. permitted number is a transaction account regardless of whether the 4. The designated entities are specified in 12 C.F.R. 217.126. authorized number of transactions are actually made. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin • May 1986 weeks to another account (including a transaction drawal, share draft, or other similar item, except account) of the depositor at the same institution or accounts described in section 204.2(d)(2)(ii) to a third party by means of a preauthorized or (MMDAs), but including accounts authorized by automatic transfer (see section 204.2(d)(2)(i)), or 12 U.S.C. 1832(a) ("NOW accounts"). telephonic (including data transmission) agree- (3) Deposits or accounts on which the depository ment, order or instruction and no more than three institution has reserved the right to require at least of the six such transfers may be made by check, seven days' written notice prior to withdrawal or draft, debit card or similar order made by the transfer of any funds in the account and from which depositor and payable to third parties. Such an withdrawals may be made automatically through account is not a "transaction account" by virtue payment to the depository institution itself or of an arrangement that permits transfers for the through transfer of credit to a demand deposit or purpose of repaying loans and associated ex- other account in order to cover checks or drafts penses at the same depository institution (as origi- drawn upon the institution or to maintain a specified nator or servicer) or that permits transfers of balance in, or to make periodic transfers to such funds from this account to another account of the accounts, except accounts described in section same depositor at the same institution or permits 204.2(d)(2), but including accounts authorized by withdrawals (payments directly to the depositor) 12 U.S.C. 371a (automatic transfer accounts or ATS from the account when such transfers or with- accounts). drawals are made by mail, messenger, automated (4) Deposits or accounts on which the depository teller machine or in person or when such with- institution has reserved the right to require at least drawals are made by telephone (via check mailed seven days' written notice prior to withdrawal or to the depositor) regardless of the number of such transfer of any funds in the account and under the transfers or withdrawals.6 terms of which, or by practice of the depository (3) A deposit may continue to be classified as a institution, the depositor is permitted or authorized savings deposit even if the depository institution to make more than three withdrawals per month or exercises its right to require notice of withdrawal. statement cycle (or similar period) of at least four (4) "Savings deposit" does not include funds depos- weeks for purposes of transferring funds to another ited to the credit of the depository institution's own account of the depositor at the same institution trust department where the funds involved are uti- (including a "transaction account") or for making lized to cover checks or drafts. Such funds are payment to a third party by means of preauthorized "transaction accounts." transfer, or telephonic (including data transmission) (e) "Transaction account" means a deposit or account agreement, order or instruction, except accounts from which the depositor or account holder is permit- described in section 204.2(d)(2). An account that ted to make transfers or withdrawals by negotiable or authorizes more than three such withdrawals in a transferable instrument, payment order of withdrawal, calendar month, or statement cycle (or similar peritelephone transfer, or other similar device for the od) of at least four weeks, is a "transaction acpurpose of making payments or transfers to third count" whether or not more than three such transpersons or others or from which the depositor may fers are made during such period. A "preauthorized make third party payments at an automated teller transfer" includes any arrangement by the deposimachine ("ATM") or a remote service unit, or other tory institution to pay a third party from the account electronic device, including by debit card, but the term of a depositor upon written or oral instruction does not include savings deposits or accounts de- (including an order received through an automated scribed in section 204.2(d)(2) even though such ac- clearing house (ACH)), or any arrangement by a counts permit third party transfers. "Transaction ac- depository institution to pay a third party from the count" includes: account of the depositor at a predetermined time or (1) Demand deposits; on a fixed schedule. Such an account is not a (2) Deposits or accounts on which the depository "transaction account" by virtue of an arrangement institution has reserved the right to require at least that permits transfers for the purpose of repaying seven days' written notice prior to withdrawal or loans and associated expenses at the same depositransfer of any funds in the account and that are tory institution (as originator or servicer) or that subject to check, draft, negotiable order of with- permits transfers of funds from this account to another account of the same depositor at the same institution or permits withdrawals (payments direct- 6. See footnote 5. For accounts described in section 204.2(d)(2)(ii), ly to the depositor) from the account when such the institution at its option may use on a consistent basis either the transfers or withdrawals are made by mail, messendate on the check, draft or similar item or the date the item is paid in ger, automated teller machine or in person or when applying the limits on such items. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 329 such withdrawals are made by telephone (via check (3) Any nonpersonal time deposit with a stated mailed to the depositor) regardless of the number of maturity or notice period of one and one-half years such transfers or withdrawals. or more that permits any early withdrawal must be (5) Deposits or accounts maintained in connection subject to a minimum early withdrawal penalty with an arrangement that permits the depositor to equal to at least thirty days' simple interest on the obtain credit directly or indirectly through the draw- amount withdrawn for any withdrawal that occurs ing of a negotiable or nonnegotiable check, draft, more than six days but within one and one-half years order or instruction or other similar device (includ- after the date of deposit. Any such account not ing telephone or electronic order or instruction) on subject to this minimum early withdrawal penalty the issuing institution that can be used for the will be regarded as a nonpersonal time deposit with purpose of making payments or transfers to third an original maturity or notice period of from seven persons or others, or to a deposit account of the days to less than one and one-half years from the depositor. date of the deposit.9 (6) All deposits other than time and savings deposits. (f)(1) "Nonpersonal time deposit" means: Section 204.2 is amended as follows: (i) A time deposit, including an MMDA or any (a) By redesignating the first footnote 1 in paragraph other savings deposit, representing funds in which (h)(l)(ii)(A) as footnote 10. any beneficial interest is held by a depositor (b) By redesignating the second footnote 1 in parawhich is not a natural person; graph (h)(2)(ii) as footnote 11 and revising the footnote (ii) A time deposit, including an MMDA or any to read, "See footnote 10." other savings deposit, that represents funds de- (c) By redesignating footnote 2 in paragraph (t) footposited to the credit of a depositor that is not a note 12. natural person, other than a deposit to the credit of a trustee or other fiduciary if the entire benefi- Section 204.3 is amended by revising paragraphs cial interest in the deposit is held by one or more (a)(3)(i) and (h) to read: natural persons; Section 204.3 [amended] (v) A time deposit represented by a promissory (3) * * * note, an acknowledgment of advance, or similar (i) In determining the reserve requirements of a obligation described in section 204.2(a)(l)(vii) that depository institution, the exemption provided for is issued to, or any bankers' acceptance (other in section 204.9(a) shall apply in the following than the type described in 12 U.S.C. 372) of the order of priorities: depository institution held by: (A) first, to net transaction accounts that are (A) any office located outside the United States first authorized by federal law in any state after of another depository institution or Edge or April 1, 1980; agreement corporation organized under the (B) second, to other net transaction accounts; laws of the United States, and (B) any office located outside the United States (C) third, to nonpersonal time deposits (includof a foreign bank, ing MMDAs and other savings deposits) and (C) a foreign national government, or an agency Eurocurrency liabilities starting with those with or instrumentality thereof,7 engaged principally the highest reserve ratio under section 204.9(a) in activities which are ordinarily performed in and then to succeeding lower reserve ratios. the United States by governmental entities, (D) an international entity of which the United States is a member, or (h) Carryover of Excesses or Deficiencies. Any excess (E) any other foreign, international, or suprana- or deficiency in a required reserve balance for any tional entity specifically designated by the maintenance period that does not exceed the greater of Board.8 two percent of the institution's required reserves (in- 9. See footnote 1 for treatment of accounts existing on March 31, 1986 and for exceptions to the imposition of the early withdrawal 7. Other than states, provinces, municipalities, or other regional or penalties imposed by this Part. The penalty required by this section local governmental units or agencies or instrumentalities thereof. 204.2(f)(3) and that required by section 204.2(c)(1) need not be 8. The designated entities are specified in 12 C.F.R. 217.126. aggregated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin • May 1986 eluding required clearing balances and net of the AMENDMENTS TO REGULATION Q required clearing balance penalty free band where applicable) or $25,000, shall be carried forward to the The Board of Governors is amending its Regulation Q, next maintenance period. Any carryover not offset Interest on Deposits, due to the expiration on March during the next period may not be carried forward to 31, 1986, of the statutory authority to set interest rate subsequent periods. ceilings on time and savings deposits and to prescribe rules regarding early withdrawals from time deposits. All regulations of the Board issued under this authority and all regulations of the Depository Institutions Dere- Section 204.4 is amended as follows: gulaton Committee ("DIDC") also expire on that date. (a) By revising the last sentence of paragraph (a) by These amendments rely on the definitions of "dedeleting the language after "1980" and replacing it posit" and "demand deposit" in the Board's Regulawith a period. tion D—Reserve Requirements of Depository Institu- (b) By removing paragraphs (b) and (c). tions (12 C.F.R. Part 204) for the purposes of (c) By redesignating paragraph (d) as paragraph (b) and Regulation Q. The amendments eliminate the sections deleting the phrase "or (c), as applicable,". of Regulation Q that govern withdrawals from time (d) By redesignating paragraph (e) as paragraph (c) and deposits and savings deposits, set early withdrawal in new paragraph (c)(2)(ii) replacing "eight" with penalties, and establish account characteristics and "seventeen". interest rate ceilings. Rules regarding early withdrawal (e) By redesignating paragraph (f) as paragraph (d) and penalties for reserve requirement purposes (rather by removing from new paragraph (d)(2) the language than for enforcement of interest rate limitations) and ", including deposits or accounts issued pursuant to definitions of the various categories of "deposit" now 12 C.F.R. 1204.122,". appear in Regulation D. (f) By redesignating paragraph (g) as paragraph (e) and This final rule does not address advertising of deposchanging the references in subparagraphs (1) and (2) its by member banks (Section 217.6 of Regulation Q) from "(a) through (f)" to "(a) through (d)" and the which will be adopted at a later date. reference in subparagraph (2)(iii) from "(g)" to "(e)". Effective April 1, 1986, the Board amends 12 C.F.R. Part 217 as follows: Section 204.8 is amended as follows: (a) By revising paragraph (a)(2)(i)(B)(5) to read: a Part 217—Interest on Deposits foreign national government, or an agency or instrumentality thereof,13 engaged principally in activities 1. The authority citation for 12 C.F.R. Part 217 is which are ordinarily performed in the United States by revised to read: governmental entities; an international entity of which the United States is a member; or any other foreign Authority. 12 U.S.C. 248, 371, 461, 1828, and 3105. international or supranational entity specifically designated by the Board;14 or 2. Part 217 is revised by rescinding sections 217.3, (b) By revising paragraph (a)(3)(v) to read: a foreign 217.4, 217.5, and 217.7. national government, or an agency or instrumentality thereof,15 engaged principally in activities which are 3. Sections 217.0 through 217.2 are renumbered as ordinarily performed in the United States by govern- sections 217.1 through 217.3 and are revised to read: mental entities; an international entity of which the United States is a member; or any other foreign Section 217.1—Authority, Purpose and Scope international or supranational entity specifically designated by the Board;16 or (a) Authority. This regulation is issued under the (c) By revising paragraph (e) by removing the phrase authority of section 19 of the Federal Reserve Act "and to interest payment limitations that may be (12 U.S.C. 371, 371a, 371b, 461), section 7 of the applicable under Regulation Q (12 C.F.R. Part 217) on International Banking Act of 1978 (12 U.S.C. 3105), its IBF time deposits,". and section 11 of the Federal Reserve Act (12 U.S.C. 248), unless otherwise noted. (b) Purpose. This regulation prohibits the payment of interest on demand deposits by member banks and 13. Other than states, provinces, municipalities, or other regional other depository institutions within the scope of this or local governmental units or agencies or instrumentalities thereof. regulation and sets forth requirements concerning the 14. The designated entities are specified in 12 C.F.R. 217.126. advertisement of interest on deposits by member 15. See footnote 13. 16. See footnote 14. banks and these other institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 331 (c) Scope. Section 217.3—Interest on demand deposits. (1) This regulation applies to state chartered banks that are members of the Federal Reserve under No member bank of the Federal Reserve System shall, section 9 of the Federal Reserve Act (12 U.S.C. 321, directly or indirectly, by any device whatsoever, pay et seq.) and to all national banks. The regulation also any interest on any demand deposit.1 applies to any Federal branch or agency of a foreign bank and to a State uninsured branch or agency of a 4. A new section 217.4 is added as follows: foreign bank in the same manner and to the same extent as if the branch or agency were a member Section 217.4—Miscellaneous bank, except as may be otherwise provided by the Board, if: (a) Early withdrawal penalty. At the time a depositor (i) its parent foreign bank has total worldwide enters into a time deposit contract with a member consolidated bank assets in excess of $1 billion; bank, the bank shall provide a written statement of the (ii) its parent foreign bank is controlled by a effect of any early withdrawal penalty which shall foreign company which owns or controls foreign (1) state clearly that the customer has contracted to banks that in the aggregate have total worldwide keep the funds on deposit for the stated maturity, consolidated bank assets in excess of $1 billion; or and (iii) its parent foreign bank is controlled by a (2) describe fully and clearly how such penalty group of foreign companies that own or control provisions apply to time deposits in such bank, in foreign banks that in the aggregate have total the event the bank, notwithstanding the contract worldwide consolidated bank assets in excess of provisions, permits payment before maturity. Such $1 billion. statement shall be expressly called to the attention (2) For deposits held by a member bank or a foreign of the customer. bank, this regulation does not apply to "any deposit (b) Payment of interest. On each automatically renewthat is payable only at an office located outside of able certificate, passbook, or other document reprethe United States" (i.e., the States of the United senting a time deposit, the bank shall have printed or States and the District of Columbia) as defined in stamped a conspicuous statement indicating that the section 204.2(t) of the Board's Regulation D—Re- contract will be renewed automatically upon maturity serve Requirements of Depository Institutions and indicating the terms of such renewal. (12 C.F.R. Part 204). Section 217.2—Definitions ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT, BANK MERGER ACT, BANK For purposes of this part, the following definitions SERVICE CORPORATION ACT, AND FEDERAL apply unless otherwise specified: RESERVE ACT (a) "Demand deposit" means any deposit that is considered to be a "demand deposit" under section Orders Issued Under Section 3 of the Bank 204.2(b) of the Board's Regulation D—Reserve Re- Holding Company Act quirements of Depository Institutions (12 C.F.R. Part 204). NKB, Inc. (b) "Deposit" means any liability of a member bank North Miami Beach, Florida that is considered to be a "deposit" under section 204.2(a) of the Board's Regulation D—Reserve Re- Order Approving Formation of Bank Holding quirements of Depository Institutions (12 C.F.R. Part Company 204). (c) "Foreign bank" means any bank that is considered NKB, Inc., North Miami Beach, Florida, has applied to be a "foreign bank" under section 204.2(o) of the for the Board's approval pursuant to section 3(a)(1) of Board's Regulation D—Reserve Requirements of Depository Institutions (12 C.F.R. Part 204). (d) "Interest" means any payment to or for the 1. A member bank may continue to pay interest on a time deposit account of any depositor as compensation for the use for not more than ten calendar days; (1) where the member bank has of funds constituting a deposit. A member bank's provided in the time deposit contract that, if the deposit or any portion thereof is withdrawn not more than ten calendar days after a maturity absorption of expenses incident to providing a normal date (one business day for "IBF time deposits" as defined in section banking function or its forbearance from charging a fee 204.8(a)(2) of Regulation D), interest will continue to be paid for such in connection with such a service is not considered a period; or (2) for a period between a maturity date and the date of renewal of the deposit, provided that such certificate is renewed payment of interest. within ten calendar days after maturity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin • May 1986 the Bank Holding Company Act (12 U.S.C. In its assessment of Bank's capital adequacy, the § 1842(a)(1)) ("Act") to become a bank holding com- Board has considered the fact that at the time of pany by acquiring all of the voting shares of Skylake consummation of this proposal, Bank would meet the Bancshares, Inc., North Miami Beach, Florida ("Sky- minimum capital requirements in the Board's guidelake"), thereby indirectly acquiring The Skylake State lines without undue reliance on intangible assets. Bank, North Miami Beach, Florida ("Bank"). Bank's capital currently contains a high percentage of Notice of the application, affording interested per- intangible assets, represented by mortgage servicing sons an opportunity to submit comments, has been contracts. Applicant has committed to reduce signifigiven in accordance with section 3(b) of the Act. The cantly the percentage of the capital of Bank representtime for filing comments has expired, and the Board ed by intangible assets at the time of consummation of has considered the application and all comments re- this proposal. Based on these facts and other facts of ceived in light of the factors set forth in section 3(c) of record, the Board concludes that the financial and the Act (12 U.S.C. § 1842(c)). managerial resources and future prospects of Appli- Applicant is a corporation formed under the laws of cant and Bank are consistent with approval of the the state of Florida for the purpose of acquiring proposal. Considerations relating to the convenience Skylake and Bank. Skylake will be liquidated after and needs of the communities to be served also are consummation of this proposal. Bank is the 102d consistent with approval of the proposal. largest commercial banking organization in the state of Based on the foregoing and other facts of record, Florida, controlling deposits of $123 million, repre- including the commitment made by Applicant, the senting 0.2 percent of total deposits in commercial Board has determined that this application should be banking organizations in the state.1 and hereby is approved. The transaction shall not be Bank operates in the Miami/Fort Lauderdale bank- consummated before the thirtieth calendar day following market2 where it is the 26th largest of 76 commer- ing the effective date of this Order, or later than three cial banks.3 Neither Applicant nor its principal is months after the effective date of this Order, unless associated with any other banking organization in this such period is extended for good cause by the Board or market. Consummation of the proposed acquisition by the Federal Reserve Bank of Atlanta, acting pursuwould not result in any adverse effect upon competi- ant to delegated authority. tion or increase the concentration of banking re- By order of the Board of Governors, effective sources in any relevant area. March 12, 1986. With respect to the effect of this proposal on the financial and managerial resources of Applicant, Sky- Voting for this action: Chairman Volcker and Governors lake and Bank, the Board has stated and continues to Martin, Wallich, Rice, Seger, Angell, and Johnson. believe that capital adequacy is an especially important factor in the analysis of bank holding company JAMES MCAFEE proposals, and that it will consider the implications of [SEAL] Associate Secretary of the Board a significant level of intangible assets in evaluating an application. In its Capital Adequacy Guidelines,4 the Board has stated that, in reviewing acquisition proposals, the Board will take into consideration both the Overseas Finance Holdings Proprietary Limited stated primary capital ratio and the primary capital Melbourne, Australia ratio after deducting intangible assets. In acting on applications under these guidelines, the Board also Ormside Proprietary Limited will take into account the nature and amount of Melbourne, Australia intangible assets and will, as appropriate, adjust capital ratios to include intangible assets on a case-by-case Aylworth Proprietary Limited basis. Melbourne, Australia Costa Mesa Limited London, England Costa Mesa Holdings N.V. 1. All banking data are as of June 30, 1985. Curacao, Netherlands Antilles 2. The Miami/Fort Lauderdale banking market consists of Broward and Dade Counties in Florida. 3. Market structure data are as of June 30, 1984. Citizens Financial Holdings B.V. 4. Capital Adequacy Guidelines, 71 FEDERAL RESERVE BULLETIN Amsterdam, Netherlands 445 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 333 Citizens Holdings managerial resources of Applicants and Bank are Brea, California consistent with approval. Considerations related to the convenience and needs of the community to be served Order Approving Formation of Bank Holding also are consistent with approval. Companies Based upon the foregoing and other facts of record, including various commitments made by Applicants, Overseas Finance Holdings Proprietary Limited, Mel- the Board has determined that consummation of the bourne, Australia; Ormside Proprietary Limited, Mel- transaction would be in the public interest and that the bourne, Australia; Aylworth Proprietary Limited, applications should be, and hereby are, approved. The Melbourne, Australia; Costa Mesa Limited, London, transaction shall not be consummated before the thirti- England; Costa Mesa Holdings N.V., Curacao, Neth- eth calendar day following the effective date of this erlands Antilles; Citizens Financial Holdings B.V., Order, or later than three months after the effective Amsterdam, Netherlands; and Citizens Holdings, date of this Order, unless extended for good cause by Brea, California, have each applied for the Board's the Board or the Federal Reserve Bank of San Francisapproval under section 3(a)(1) of the Bank Holding co, pursuant to delegated authority. Company Act ("Act"), 12 U.S.C. § 1842(a)(1), to By order of the Board of Governors, effective become bank holding companies by directly or indi- March 12, 1986. rectly acquiring control of at least 80 percent of the voting shares of Citizens Bank of Costa Mesa Voting for this action: Chairman Volcker and Governors ("Bank"), Costa Mesa, California. Martin, Wallich, and Rice. Absent and not voting: Governors Seger, Angell, and Johnson. Notice of the applications, affording opportunity for interested persons to submit comments, has been JAMES MCAFEE given in accordance with section 3(b) of the Act. The [SEAL] Associate Secretary of the Board time for filing comments has expired and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) Texstar Financial Corporation, Inc. of the Act, 12 U.S.C. § 1842(c). Azle, Texas Applicants are nonoperating corporations that have been formed for the purpose of acquiring Bank. Bank Order Denying Formation of a Bank Holding is the 126th largest of 437 commercial banking organi- Company zations in California. It controls total deposits of $78.7 million,1 which represent less than one percent of the Texstar Financial Corporation, Inc., Azle, Texas, has total deposits in commercial banking organizations in applied for the Board's approval under section 3(a)(1) California. Accordingly, consummation of the propos- of the Bank Holding Company Act ("Act") al would not increase the concentration of banking (12 U.S.C. § 1842(a)(1)) to become a bank holding resources in California. company by acquiring 99.9 percent of the outstanding Bank operates in the Los Angeles, California bank- voting shares of First National Bank of Azle, Azle, ing market.2 It is the 68th largest of 219 commercial Texas ("Bank"). banks in the market, and controls less than one Notice of the application, affording an opportunity percent of the deposits in commercial banks in the for interested persons to submit comments, has been market. Principals of Applicants are not affiliated with given in accordance with section 3(b) of the Act. The any other depository institution in this market. Ac- time for filing comments has expired and the Board cordingly, the Board has determined that the proposal has considered the application and all comments rewould not have a significant adverse effect on competi- ceived in light of the factors set forth in section 3(c) of tion in the Los Angeles banking market or in any other the Act (12 U.S.C. § 1842(c)). relevant market. Applicant is a nonoperating corporation with no Based upon the facts of record, including commit- subsidiaries formed for the purpose of acquiring Bank. ments by Applicants regarding the capital level of Bank is the 931st largest commercial bank in Texas, Bank, the Board concludes that the financial and holding total deposits of $14.1 million, representing less than 0.1 percent of total deposits in commercial banks in the state.1 1. Unless otherwise indicated, all deposit and market data are as of June 30, 1985. 2. The Los Angeles banking market is approximated by the Los 1. Deposit data are as of December 31, 1984. Banking structure Angeles, California RMA. data are as of June 30, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin • May 1986 Bank operates in the Fort Worth market,2 where it is the Board concludes that considerations relating to the 45th largest commercial banking organization, Applicant's financial and managerial resources and controlling 0.2 percent of total deposits in commercial future prospects are adverse and weigh against apbanks. Principals of Applicant are not affiliated with proval of the proposal. any other depository organization in the market. Con- Applicant has proposed no new services for Bank summation of this proposal would not result in any upon consummation of this proposal. Considerations adverse effects upon competition or increase the con- relating to the convenience and needs of the communicentration of banking resources in any relevant area. ty to be served are consistent with, but lend no weight Accordingly, the Board concludes that competitive toward, approval of this proposal. considerations under the Act are consistent with ap- On the basis of all of the facts of record, the Board proval. concludes that the banking considerations involved in The Board has indicated on previous occasions that this proposal are adverse and are not outweighed by a bank holding company should serve as a source of any relevant competitive or convenience and needs managerial and financial strength to its subsidiary considerations. Accordingly, it is the Board's judgbank and that the Board would closely examine the ment that approval of the application would not be in condition of an applicant in each case with this consid- the public interest and that the application should be, eration in mind.3 In this regard, the Board has cau- and hereby is, denied for the reasons summarized tioned against the assumption of substantial amounts above. of debt by a bank holding company because the Board By order of the Board of Governors, effective was concerned that the bank holding company would March 12, 1986. no longer have the financial flexibility to meet unexpected problems of its subsidiary bank or would be Voting for this action: Chairman Volcker and Governors forced to place substantial demands on its subsidiary Martin, Wallich, Rice, Seger, Angell, and Johnson. bank to meet its debt servicing requirements. There are other risks associated with leveraging, such as a JAMES MCAFEE significant reduction in the parent company's ability to [SEAL] Associate Secretary of the Board use the debt and capital markets to aid its subsidiary bank, should the need arise.4 In connection with this proposal, Applicant would Valley Bancorporation incur substantial debt and would be dependent on the Appleton, Wisconsin earnings of Bank to service this debt. Bank has experienced declining earnings in recent years. Using Order Approving Acquisition of Bank Holding projections based upon Bank's past performance and Companies and Banks other facts of record, the Board concludes that Applicant may not have sufficient financial flexibility to be Valley Bancorporation, Appleton, Wisconsin, a bank able to reduce its indebtedness in a satisfactory man- holding company within the meaning of the Bank ner while maintaining adequate capital levels at Bank.5 Holding Company Act (12 U.S.C. § 1841 et seq.) Accordingly, based on these and other facts of record, ("Act") has applied for the Board's approval under section 3 of the Act (12 U.S.C. § 1842), to acquire Peshtigo State Bank, Peshtigo, Wisconsin; First National Bank & Trust Company of Beaver Dam, Beaver 2. The Fort Worth banking market is defined as Tarrant County, excluding the towns of Grapevine and Arlington; the town of Cleburne Dam, Wisconsin ("Beaver Dam Bank"); First Nationin Johnson County; the eastern half of Parker County, including the al Bank of Minocqua & Woodruff, Woodruff, Wiscontowns of Weatherford and Springtown; the towns of Boyd and Rhome sin ("Woodruff Bank"); The Commercial Bank, Chilin Wise County; and the town of Roanoke in Denton County, all in Texas. ton, Wisconsin; and Spring Green Bankshares, Inc., 3. See Northwest Wisconsin Banco, Inc., 71 FEDERAL RESERVE and thereby indirectly acquire Bank of Spring Green, BULLETIN 105 (1985); Midwest Bancshares, Inc., 71 FEDERAL REboth of Spring Green, Wisconsin. SERVE BULLETIN 103 (1985); Central Minnesota Bancshares, Inc., 70 FEDERAL RESERVE BULLETIN 877 (1984). Notice of the applications, affording an opportunity 4. See Spur Bancshares Inc., 69 FEDERAL RESERVE BULLETIN 806 for interested persons to submit comments, has been (1983); Holcomb Bancshares, Inc., 69 FEDERAL RESERVE BULLETIN 804 (1983). given in accordance with section 3(b) of the Act 5. The Board has previously stated that in small one-bank holding (50 Federal Register 51,950 (1985)). The time for filing company formations, it expects, among other things, that the bank comments has expired, and the Board has considered holding company's debt-to-equity ratio will be reduced to no more than 30 percent within 12 years while maintaining adequate capital the applications and all comments received in light of levels at its subsidiary bank. "Policy Statement for Formation of the factors set forth in section 3(c) of the Act Small One-Bank Holding Companies," 12 C.F.R. Part 225, Appen- (12 U.S.C. § 1842(c)). dix B. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 335 Applicant is a multibank holding company that would remain in the market upon consummation. On currently controls 28 subsidiary banks. Applicant is the basis of these and other facts of record, the Board the fourth largest banking organization in Wisconsin concludes that the effects of consummation of the and controls total deposits of $1.5 billion, representing proposal on existing competition in the Beaver Dam approximately 5.1 percent of the total deposits in banking market would not be significantly adverse. commercial banks in the state.1 The banks to be In the Rhinelander banking market, Applicant is the acquired control total deposits of $166.3 million, repre- fifth largest commercial banking organization, with senting less than one percent of the total deposits in deposits of $49.4 million, representing approximately commercial banks in the state. Upon consummation of 12.2 percent of the total deposits in commercial banks the proposed transaction, Applicant would remain the in the market.4 Woodruff Bank is the twelfth largest fourth largest banking organization in Wisconsin, con- commercial banking organization with deposits of $9.4 trolling 33 commercial banks with total deposits of million, representing approximately 2.3 percent of the $1.7 billion, representing 5.7 percent of the total total deposits in commercial banks in the market. deposits in commercial banks in the state. The pro- Upon consummation of the proposal, Applicant would posed transaction would have no significant effect on become the largest commercial banking organization the concentration of banking resources in Wisconsin. in the market and control approximately 14.5 percent Applicant's subsidiary banks compete directly with of the total deposits in commercial banks in the the banks to be acquired in three banking markets: the market. The Rhinelander market has a four-firm con- Beaver Dam, Rhinelander, and Sauk County banking centration ratio of 52.0 percent and is considered markets. moderately concentrated. The HHI for the market is In the Beaver Dam banking market,2 Applicant is 1023 and would increase by 56 points to 1079 upon the eighth largest commercial banking organization consummation of the proposal. Numerous other comwith total deposits of $16.3 million, representing 5.2 mercial banking organizations would remain in the percent of the deposits in commercial banks in the market after consummation of the proposal. Accordmarket. Beaver Dam Bank is the second largest com- ingly, the effects of the proposal on competition in the mercial banking organization with $58.0 million in Rhinelander market are not regarded as substantially deposits, representing 18.4 percent of the total depos- adverse. its in commercial banks in the market. The Beaver In the Sauk County banking market,5 Applicant is Dam banking market is considered to be moderately the second largest commercial banking organization concentrated with the four largest commercial banks with deposits of $55.4 million, representing 15.1 percontrolling 65.9 percent of the deposits in commercial cent of total deposits in commercial banks in the banks in the market. The Herfindahl-Hirschman In- market. The Bank of Spring Green operates a branch dex ("HHI") for the market is 1324 and would in- in this market and is the ninth largest commercial crease by 191 points to 1515 upon consummation of banking organization in the market with deposits of the proposal.3 $11.4 million, representing 3.1 percent of the total Although the proposed acquisition would eliminate deposits in commercial banks in the market. The Sauk some existing competition between Applicant and County banking market is moderately concentrated, Beaver Dam Bank in the Beaver Dam banking market, with a four-firm concentration ratio of 60.8 percent. the market would not become highly concentrated as a The HHI for the market is 1332 and would increase by result of this transaction and numerous competitors 94 points to 1426 as a result of consummation of this transaction. Numerous commercial banking alternatives would remain in the market after consummation of this proposal. Accordingly, the Board has conclud- 1. Deposit data are as of December 31, 1984. ed that the effects of the proposal on competition in the 2. The Beaver Dam banking market is approximated by the north- Sauk County market would not be substantially adwestern portion of Dodge County (Oak Grove, Beaver Dam, Calamus, Burnett, Chester, Trenton, Fox Lake and Westford townships) plus verse. Randolph, Courtland, Fountain Prairie and Columbus townships in The Board has also examined the effect of the Columbia County, Wisconsin. 3. Under the revised Department of Justice Merger Guidelines proposed acquisitions upon probable future competi- (49 Federal Register 26,823 (June 29, 1984)), any market in which the post-merger HHI is between 1000 and 1800 is considered moderately concentrated, and the Department is likely to challenge a merger that increases the HHI by more than 100 points, unless other facts of record indicate that the merger is not likely substantially to lessen 4. The Rhinelander banking market is approximated by Vilas and competition. The Department has informed the Board that a bank Oneida Counties; Forest County excluding Alvin and Popple River merger or acquisition generally will not be challenged (in the absence townships and the northern half of Lincoln County, Wisconsin. of other factors indicating anticompetitive effects) unless the post- 5. The Sauk County banking market is approximated by Sauk merger HHI is at least 1800 and the merger increases the HHI by at County, Wisconsin, excluding Spring Green township, and includes least 200 points. the Westford and Willow townships in Richland County, Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin • May 1986 tion in the three geographic markets in which Peshtigo tion Y (12 C.F.R. § 225.23) to acquire control of RMJ State Bank, The Commercial Bank, and Bank of Securities Corp., New York, New York ("Compa- Spring Green but not Applicant operate and has evalu- ny"), by acquiring at least 50.1 percent of the voting ated the proposal in light of the Board's proposed shares of RMJ Holdings, Inc., New York, New York guidelines for assessing the competitive effects of ("Venture"), a de novo joint venture between Applimarket extension mergers and acquisitions. None of cant and RMJ Acquisition Company, New York, New these markets is highly concentrated under the York ("Newco"). Newco, a general partnership Board's Guidelines, and the Board has concluded that formed by five of Company's existing managers, consummation of this proposal would not have any would own the remainder of Venture's voting shares. significant adverse effects on probable future competi- Venture would acquire Company from SPC Securities tion in any relevant market. Accordingly, competitive Services Corp., New York, New York, a subsidiary of considerations are consistent with approval of this Security Pacific Corporation, Los Angeles, California. application. Through Venture and Company, Applicant seeks to The financial and managerial resources of Appli- act as a broker to primary dealers in securities of the cant, its subsidiary banks, and the banks to be ac- U.S. Government and its agencies. The Board has quired are consistent with approval. Considerations determined that this activity is closely related to relating to the convenience and needs of the communi- banking and permissible for bank holding companies. ties to be served are also consistent with approval. 12 C.F.R. § 225.25(b)(15)-(16); Manufacturers Han- Based on the foregoing and other facts of record, the over Corporation, 70 FEDERAL RESERVE BULLETIN Board has determined that consummation of the pro- 661 (1984). posed transactions would be in the public interest and Notice of the application, affording interested perthat the applications should be approved. sons an opportunity to submit comments, has been On the basis of the record, the applications are duly published. 50 Federal Register 51,603 (1985). The approved for the reasons summarized above. The time for filing comments has expired, and the Board acquisitions shall not be consummated before the has considered the application and all comments rethirtieth calendar day following the effective date of ceived in light of the public interest factors set forth in this Order, or later than three months after the effec- section 4(c)(8) of the Act. tive date of this Order, unless such period is extended Applicant is the twenty-eighth largest banking orgafor good cause by the Board or by the Federal Reserve nization in the United States, with consolidated assets Bank of Chicago pursuant to delegated authority. of $16.6 billion.1 Applicant has two subsidiary banks, By order of the Board of Governors, effective The Bank of New York, New York, New York March 31, 1986. ("Bank"), and The Bank of New York (Delaware), Wilmington, Delaware. Bank is the eighth largest bank Voting for this action: Chairman Volcker and Governors in the State of New York, with total domestic deposits Martin, Wallich, Rice, Seger, Angell, and Johnson. of $7.9 billion, representing 3.8 percent of all deposits in commercial banks in the state. Through nonbank JAMES MCAFEE subsidiaries, Applicant also engages in a variety of [SEAL] Associate Secretary of the Board nonbanking activities. Company, with assets of $270.3 million, brokers U.S. government and agency securities for primary Orders Issued Under Section 4 of the Bank dealers. Company acts solely as agent for the account Holding Company Act of its customers; it does not underwrite or deal in securities, nor does it provide investment advice or The Bank of New York Company, Inc. research.2 New York, New York The proposed acquisition has been structured as a joint venture in order to give Company's current Order Approving Application to Broker Government managers an equity stake as an incentive to remain with Company. As Newco's sole activity would be to Securities Through a Joint Venture hold shares of Venture, which would engage only in permissible nonbanking activities, the joint venture The Bank of New York Company, Inc., New York, New York, a bank holding company within the meaning of the Bank Holding Company Act ("Act") (12 U.S.C. § 1841 etseq.), has applied for the Board's 1. All data are as of September 30, 1985. approval under section 4(c)(8) of the Act (12 U.S.C. 2. Company's activities were approved in Security Pacific Corpo- § 1843(c)(8)) and section 225.23 of the Board's Regula- ration, 71 FEDERAL RESERVE BULLETIN 133 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 337 would not raise concerns regarding the separation of The proposed acquisition shall not be consummated banking and commerce. Moreover, Venture's activi- later than three months after the effective date of this ties would be specialized, and narrow in scope.3 Order unless that period is extended for good cause by The market for brokering U.S. Government and the Federal Reserve Bank of New York, pursuant to agency securities on behalf of primary dealers is delegated authority, or by the Board. nationwide and concentrated. Company is one of eight By order of the Board of Governors, effective firms currently providing such services. Because Ap- March 10, 1986. plicant does not currently provide such services, however, the proposed acquisition would not eliminate any Voting for this action: Chairman Volcker and Governors existing competition. Martin, Wallich, and Rice. Absent and not voting: Governors Seger, Angell, and Johnson. An issue of potential competition may arise from Bank's role as a major clearing agent for government JAMES MCAFEE securities transactions, a role that might conceivably [SEAL] Associate Secretary of the Board facilitate de novo entry into the market. Several factors, however, mitigate concerns regarding possible elimination of potential competition. There is no evi- BankVermont Corporation dence of record that Applicant would enter the market Burlington, Vermont de novo. Applicant maintains that it would not do so, citing the need for experienced personnel and special- Order Approving an Application to Provide ized equipment. Numerous other large financial insti- Employee Benefits Consulting Services tutions have the resources to enter the market, and some have expressed an interest in doing so. More- BankVermont Corporation, Burlington, Vermont, a over, although the market is concentrated, a strong bank holding company within the meaning of the Bank trend toward price competition has developed, with Holding Company Act ("Act"), 12 U.S.C. § 1841 brokerage commissions decreasing substantially in re- et seq., has applied for the Board's approval under cent years. Accordingly, the Board concludes that the section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), and proposed acquisition would have no significant ad- section 225.23 of the Board's Regulation Y, 12 C.F.R. verse effect on potential competition. § 225.23, to retain 100 percent of the voting shares of Financial and managerial considerations are consis- Future Planning Associates, Inc., and Madison Group, tent with approval of the application. There is no Inc., both of Burlington, Vermont (together, known as evidence of record indicating that the proposed acqui- "Companies"). sition would result in conflicts of interest, undue Notice of the application, affording interested perconcentration of resources, unsound banking prac- sons an opportunity to submit comments on the protices, or other adverse effects. posal, has been duly published (51 Federal Register Based on the foregoing and other facts of record, the 3842 (1986)). The time for filing comments has expired, Board concludes that the balance of the public interest and the Board has considered the application and all factors it is required to consider under section 4(c)(8) comments received in light of the public interest favors approval of the application. Accordingly, the factors set forth in section 4(c)(8) of the Act. application is hereby approved. This approval is sub- BankVermont, a bank holding company by virtue of ject to all of the conditions set forth in Regulation Y, its ownership of Bank of Vermont, Burlington, Verincluding those in sections 225.4(d) and 225.23(b) mont, has total deposits of $502.9 million.1 BankVer- (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to the mont proposes to retain Companies, which are em- Board's authority to require such modification or ployee benefits consulting firms that provide a full range termination of the activities of a bank holding compa- of services with regard to employee benefits plans. ny or any of its subsidiaries as the Board finds The type of plans that Companies provide assistance necessary to assure compliance with, and to prevent with are defined benefit, defined contribution, deevasions of, the provisions and purposes of the Act ferred compensation, and 401-K plans. Company's and the Board's regulations and orders issued thereun- activities can be divided into four basic types of der. activities: 1. Plan Design—designing employee benefit plans, including determining actuarial funding levels and 3. This proposal does not raise concerns of the kind expressed by cost estimates; the Board in cases such as Deutsche Bank AG, 67 FEDERAL RESERVE BULLETIN 449 (1981), in which the joint venture involved a relatively broad range of activities, and was between a bank holding company and a company extensively engaged in impermissible nonbanking activities. 1. Data are as of December 31, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin • May 1986 2. Plan Implementation—providing assistance in flicts of interests, or unsound banking practices." implementing plans, including assistance in the With respect to the proposed employee benefits conpreparation of plan documents and the implementa- sulting activities of BankVermont, it appears from the tion of employee benefit administration systems; record that authorizing the activity would enhance 3. Administrative Services—providing administra- competition and provide greater convenience and intive services with respect to plans, including record- creased efficiencies, without resulting in any adverse keeping services, calculating and certifying employ- consequences. ee benefits, preparing periodic, actuarial and other As a matter of increased convenience, clients will reports and government filings pursuant to ERISA; have the option to obtain a complete package of 4. Employee Communications—developing employ- employee benefits consulting services from a single ee communication programs with respect to plans company, including those investment and fund manfor the benefit of the client. agement services that can be provided by other subsidiaries of BankVermont. Such a system of vertical Applicant has also applied to act as a trustee with integration is likely to make Companies a more effiregard to employee benefit plans. This activity is cient competitor. Findings of greater convenience and permissible for bank holding companies pursuant to increased competition may also be based on the insection 225.25(b)(3) of Regulation Y, 12 U.S.C. crease in the number of companies that can conduct all § 1843(b)(3). aspects of employee benefits consulting. The Board has previously approved an application There is no evidence in the record to indicate that by a bank holding company to provide employee BankVermont's engaging in the proposed activity benefits consulting services.2 In its Order, the Board would lead to any undue concentration of resources, determined that banks had traditionally performed decreased or unfair competition, unsound banking many of the services encompassed by this activity and practices, or other adverse effects. Clients currently that the provision of employee benefits consulting have the option to use any component of BankVerservices is operationally or functionally related to the mont's employee benefits consulting services individtrust services that are provided by banks. The Board ually as well as the entire package of services, and noted that employee benefits consulting involves the BankVermont has committed to continue to avoid preparation and conveyance to a client of financial tying any employee benefits consulting service to data determined by the Board to be permissible in the purchase of the entire employee benefits package or to context of investment advisory, data processing and any other service offered by BankVermont or its courier services activities. Although the activity en- subsidiaries. compasses the need to provide actuarial analysis, Based upon the foregoing and all the facts of record, which is generally not performed by trust companies the Board has determined that the balance of public or banks, the actuarial services are limited in scope to interest factors it is required to consider under section ensure adequate funding of defined benefits plans, are 4(c)(8) is favorable. Accordingly, the application is an integral part of providing employee benefits serhereby approved. This determination is subject to the vices and are not provided as an independent service. conditions set forth in sections 225.4(d) and Thus, the Board concluded that the activity of provid- 225.23(b)(3) of the Board's Regulation Y, 12 C.F.R. ing employee benefits consulting services is closely §§ 225.4(d) and 225.23(b)(3). The approval is also related to banking.3 subject to the Board's authority to require modifica- In order to approve this application, the Board must tion or termination of the activities of the holding also find that the performance of the proposed activity company or any of its subsidiaries as the Board finds "can reasonably be expected to produce benefits to necessary to assure compliance with the provisions the public, such as greater convenience, increased and purposes of the Act and the Board's regulations competition, or gains in efficiency, that outweigh and orders issued thereunder, or to prevent evasion possible adverse effects, such as undue concentration thereof. of resources, decreased or unfair competition, con- By order of the Board of Governors, effective March 6, 1986. Voting for this action: Chairman Volcker and Governors 2. Norstar Bancorp Inc., 71 FEDERAL RESERVE BULLETIN 656 Wallich, Rice, Angell, and Johnson. Absent and not voting: (1985). Governors Martin and Seger. 3. Although the Norstar application proposed only to provide services with regard to defined benefits plans, the Board believes that the same conclusions that are applicable to defined benefit plans are relevant to the other types of plans that BankVermont plans to JAMES MCAFEE provide. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 339 Citicorp proposed insurance would never exceed the outstand- New York, New York ing balance of the mortgage loan and the insurance would terminate upon repayment of the loan. Order Approving Application to Engage in The Board has not yet added this insurance activity Underwriting and Reinsuring Home Mortgage to the list of permissible nonbanking activities in the Redemption Insurance Board's Regulation Y, 12 C.F.R. 225.25(b).2 Consequently, in order to approve Citicorp's application Citicorp, New York, New York, a bank holding com- under section 4(c)(8) of the BHC Act, the Board must pany within the meaning of the Bank Holding Compa- determine that the proposed insurance activity is "so ny Act (12 U.S.C. §§ 1841 et seq.) ("BHC Act" or closely related to banking as to be a proper incident "Act"), has applied for the Board's approval under thereto. . . ." 12 U.S.C. § 1843(c)(8). section 4(c)(8) of the BHC Act (12 U.S.C. The Board previously considered somewhat similar § 1843(c)(8)) to engage through its subsidiary, Family applications by BankAmerica Corporation3 and Sea- Guardian Life Insurance Company, St. Louis, Mis- first Corporation4 to underwrite home mortgage resouri ("Family Guardian"), in the underwriting and demption insurance. At that time, the Board expressed reinsuring of home mortgage redemption insurance, concern that such insurance possessed the characteristhat is, insurance that assures repayment of loans tics of life insurance rather than traditional credit life secured by first mortgages on residential real estate insurance, in that mortgage redemption insurance "is made by Citicorp or its subsidiaries in the event of the not group insurance, age is a factor in the premium death or disability of the mortgagor. charged, it is of higher value and longer duration and is Notice of the application, affording an opportunity not offered to the borrower at the time of the loan for interested persons to submit comments, has been transaction." BankAmerica Corporation, 66 FEDERAL duly published (50 Federal Register 42,598 (1985)). RESERVE BULLETIN, at 661 n. 1. The time for filing comments has expired, and the Subsequent to these decisions declining to permit Board has considered the application and all com- bank holding companies to underwrite home mortgage ments received with respect to home mortgage re- redemption insurance, Congress amended section demption insurance in light of the public interest 4(c)(8) of the BHC Act through passage of the Garn-St factors set forth in section 4(c)(8) of the Act. Germain Depository Institutions Act of 1982. The Citicorp, with total consolidated assets of $173.6 Garn-St Germain Act provides that the sale or underbillion, is the largest banking organization in the writing of insurance is not closely related to banking, nation.1 It presently operates eight banking subsidiar- with seven specific exemptions. One of those exempies. Its lead bank, Citibank, N.A., New York, New tions provides that a bank holding company may York, accounts for approximately 79 percent of its provide insurance as a principal, agent, or broker consolidated assets and is a full-service commercial "where the insurance is limited to assuring repayment bank. Citicorp's other banking subsidiaries are located of the outstanding balance due on a specific extension in South Dakota, Maryland, Nevada, Delaware, of credit by a bank holding company or its subsidiary Maine, Utah, and Buffalo, New York. Citicorp also in the event of the death, disability or involuntary engages, directly and through subsidiaries, in a variety unemployment of the debtor ...." 12U.S.C. § 1843(c)(8)(A). Citicorp's proposal to underwrite of nonbanking activities. Family Guardian, one such home mortgage redemption insurance falls within this nonbanking subsidiary, is admitted as an insurer in 39 exemption. Citicorp will only underwrite insurance states to underwrite credit life insurance. It had $1.8 that is limited to assuring repayment of the outstanding billion of credit life insurance in force as of Decembalance due on loans secured by first mortgages in the ber 31, 1984. event of the death or disability of the mortgagor. Thus, Citicorp proposes to engage on a nationwide basis in such insurance activity is not barred for bank holding the underwriting and reinsuring of home mortgage redemption insurance in connection with extensions of credit made or purchased by Citicorp and its affiliates, where such extensions of credit are secured by first mortgages on residential real estate. The proposed 2. The Board has proposed a general revision of that portion of its Regulation Y governing permissible insurance agency and underwritinsurance would assure repayment of an outstanding ing activities, 12 C.F.R. 225.25(b)(8) and (b)(9). The proposed regularesidential mortgage loan in the event of the death or tion would permit bank holding companies to engage in the underwriting and reinsurance of home mortgage redemption insurance. disability of the mortgagor. The face amount of the 49 Federal Register 9215, 9217 (March 12, 1984). The Board considered the comments filed in that rulemaking in acting upon the subject application. 3. 66 FEDERAL RESERVE BULLETIN 660 (1980). 1. Banking data are as of December 31, 1985. 4. 68 FEDERAL RESERVE BULLETIN 318 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin • May 1986 companies under the general prohibition of the Garn- Based upon the above considerations, the Board St Germain Act. concludes that Citicorp's proposal to underwrite home It has been argued that exemption A of the Garn-St mortgage redemption insurance is permissible under Germain Act is intended to permit bank holding com- the Garn-St Germain Act. panies to engage in only those "credit life" insurance With regard to whether this insurance activity is activities permitted by the Board prior to passage of closely related to banking, the Board notes that home the Garn-St Germain Act, that is, only in the under- mortgage redemption insurance supports the lending writing and sale of "traditional credit life insurance" function by providing for repayment of residential offered primarily in connection with consumer loans. mortgage loans at a time when the death or disability The literal language of the exemption, however, per- of the borrower may delay or disrupt the scheduled mits the underwriting of any insurance that is written repayment of such loans. Home mortgage redemption on the life of a borrower, that is limited to the insurance in connection with residential mortgage outstanding balance of a loan, and that does not loans, therefore, fulfills the same function as does exceed the term of the loan. The Garn-St Germain Act credit life and credit accident and health insurance thus plainly describes the relevant characteristics of with respect to other types of loans. The Board permissible credit-related insurance activities, and recognized that such insurance functions as credit home mortgage redemption insurance possesses those insurance in supporting a bank's lending function characteristics. The language of the Garn-St Germain when it permitted the sale of such insurance by bank Act does not limit the type of permissible insurance to holding companies.9 In addition, the Board has permit- "traditional credit life," nor does it limit the type of ted bank holding companies to underwrite insurance extension of credit on which such insurance may be that guarantees repayment of a loan in the event of the sold to exclude loans secured by first mortgages. borrower's death or disability on the basis that such Absent clearly expressed legislative intent to the con- insurance supports the lending transaction sufficiently trary or an inconsistency with the underlying purpose that it may be considered to be closely related to of the Garn-St Germain Act, the fact that an insurance banking and permissible under section 4(c)(8) of the activity is within the literal language of that Act's Act. See, e.g., Alabama Financial Group, 60 FEDERexemptions must be conclusive of the activity's law- AL RESERVE BULLETIN 596 (1974). The courts have fulness under that statute.5 upheld the Board's determination that various types of There is nothing in the legislative history that sug- insurance that support a bank's lending function are gests that Congress did not intend to permit the closely related to banking.10 underwriting of home mortgage redemption insurance In reaching its decision on whether the underwriting under the literal language of exemption A or, more of home mortgage redemption insurance, like the specifically, to suggest that Congress intended the underwriting of credit life insurance, is closely related Garn-St Germain Act to codify the Board's Bank- to banking, the Board has taken into account evidence America and Seafirst decisions declining to permit the that market developments have narrowed substantialunderwriting of home mortgage redemption insurance ly the differences between credit life insurance and by bank holding companies. While the legislative home mortgage redemption insurance relied upon by history of the Garn-St Germain Act speaks of permit- the Board in its BankAmerica and Seafirst decisions. ting the underwriting of credit life insurance previous- Citicorp and commenters on the Board's proposed ly permitted by the Board, it does not indicate that regulation dealing with home mortgage redemption only such insurance underwriting is permitted.6 In this insurance presented evidence that many state laws regard, the Board notes that it permitted the sale of now permit the sale of credit life insurance for longer home mortgage redemption insurance prior to the terms and in face amounts limited only by the amount passage of the Garn-St Germain Act7 and it permitted of the loan. In addition, credit life insurance on second several bank holding companies to underwrite such mortgage loans, now permissible for bank holding insurance prior to 1970.8 companies, is, in many cases, the equivalent, in term and face amount, of home mortgage redemption insurance on first mortgage loans. The Board has also noted 5. See, e.g., Russello v. United States, 464 U.S. 16, 21 (1983), that key factors which were cited by the Board in its citing Consumer Product Safety Commission v. GTE Sylvania Inc., 447 U.S. 102, 108 (1980). 6. See Sen. Rep. No. 97-536, 97th Cong., 2d Sess. 38 (1982). 7. Mellon National Corporation, 61 FEDERAL RESERVE BULLETIN 45 (1975). 9. Mellon National Corporation, 61 FEDERAL RESERVE BULLETIN 8. Denver U.S. Bancorporation, Inc. 54 FEDERAL RESERVE BUL- 45 (1975). LETIN 234 (1968); First Virginia Corporation, 53 FEDERAL RESERVE 10. Alabama Association of Insurance Agents v. Board of Gover- BULLETIN 373 (1967); First Oklahoma Bancorporation, Inc., 51 nors, 533 F. 2d 234 (5th Cir. 1976), modified on rehearing, 558 F. 2d FEDERAL RESERVE BULLETIN 676 (1965). 729 (1977), cert, denied, 435 U.S. 904 (1978). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 341 rejection of the BankAmerica and Seafirst applica- There is no evidence in the record, and specifically tions—absence of group insurance, individual policy no comments in opposition to this application, to premiums based on the age of the insured, and the lack indicate that Citicorp's engaging in the proposed activof a direct relationship to an extension of credit ity would result in undue concentration of resources, because the policy was not offered at the time the loan decreased or unfair competition, unsound banking was made—are not present in the Citicorp application. practices, or other adverse effects. The Board has, by In contrast, in almost every instance, Citicorp pro- regulation, applied to bank holding companies section poses to underwrite home mortgage redemption insur- 106 of the BHC Act (12 U.S.C. § 1972), which prohibance as group insurance (without strict age-based its the tying of services by banks, "in order to provide premiums) and to offer such insurance at the time the specific statutory assurance that the use of the ecoloan is made. nomic power of a bank will not lead to a lessening of Based upon the above considerations, the Board competition or other unfair competitive practices."12 concludes that Citicorp's proposal to underwrite home Section 225.4(d) of the Board's Regulation Y mortgage redemption insurance is closely related to (12 C.F.R. 225.4(d)) specifically prohibits a "bank banking. holding company and any nonbanking subsidiary" Before approving a bank holding company's appli- from extending credit or providing any service or from cation to engage in an activity that the Board deter- fixing or varying the consideration for such services "subject to any condition or requirement that, if mines is closely related to banking, the Board must imposed by a bank, would constitute an unlawful tie-in also find that consummation of the proposal can arrangement under section 106 of the Bank Holding reasonably be expected to produce benefits to the Company Act. . . ." public that outweigh possible adverse effects (12 U.S.C. § 1843(c)(8)). With respect to Citicorp's Where insurance, such as home mortgage redempproposal to underwrite home mortgage redemption tion insurance, is closely related to the lending transinsurance, it appears that the balance of public bene- action, it is important that Citicorp provide safeguards fits considerations is favorable. to prevent the tying of such insurance to an extension Citicorp's de novo entry into the underwriting of of credit or to any other service offered by Citicorp or home mortgage redemption insurance will result in an its subsidiaries. In this regard, Citicorp has specifically additional significant competitor in the home mortgage agreed not to tie the provision of this service to any redemption insurance underwriting market. Citicorp's other product or service of Citicorp and has in addition entry into the business is also likely to result in the agreed to inform borrowers in writing that such insuravailability of a greater variety of product features ance is not required and that, if desired, it may be related to home mortgage redemption insurance. For purchased from other sources.13 Moreover, the borexample, Citicorp has proposed to include "second rower will be notified in writing of the right to rescind home coverage," by which the prior mortgage of a the insurance contract at any time after the loan previously insured individual would be covered by commitment is made and prior to closing. Finally, the free insurance until the former residence is sold, premiums for such insurance will be paid monthly, provided the individual purchases similar insurance on thus permitting the borrower to rescind the insurance contract at any time and eliminating premium financthe new residence. Citicorp would also offer "portabiling by Citicorp as an incentive to sell the insurance. ity," which would allow a customer to obtain the same The Board has made these commitments a condition of insurance at the same rate on a new home as on the its approval of this application. existing home while paying a new higher premium rate only on the difference between the balances on the Based upon the facts and circumstances related to existing and new mortgages. the type of insurance to be underwritten here, includ- Citicorp has proposed rates for home mortgage redemption insurance policies that are generally lower than rates charged by many companies competing in types of life insurance would serve as substitutes for home mortgage the underwriting of such insurance. Thus, Applicant's redemption insurance, such insurance does not appear to present the proposal is likely to result in some additional rate concerns that prompted the Board to require bank holding companies competition. The availability of these lower rates and to offer credit life insurance at rates below the established state ceilings for such insurance (or to offer an increase in policy benefits) other features described above in home mortgage (12 C.F.R. § 225.25(b)(9) n. 7). Citicorp has committed, however, to redemption insurance policies is likely to result in net maintain a rate schedule that is actuarially consistent with the credit public benefits.11 life ceiling rate as modified by the Board's rate reduction requirement in each State. 12. S. Rep. 91-1084, 91st Cong. 2nd Sess. (1970), reprinted in 1970 U.S. Code Cong. & Ad. News 5519, 5535. 11. Because states have not generally promulgated prima facie 13. These requirements are contained, in part, in the Board's ceilings for home mortgage redemption insurance, and since other Regulation Z (12 C.F.R. 226.4(d)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin • May 1986 ing the fact that it is actuarially based, it is group First Pacific Investments Limited insurance and it is limited to the outstanding loan Monrovia, Liberia balance, the Board concludes that the proposed activity presents risks to the bank holding company that are Hibernia Bancshares Corporation manageable. Bank holding companies, such as Citi- San Francisco, California corp, have acquired experience through the underwriting of credit life insurance in operating an actuarially Order Approving Acquisition of a Federal Savings sound insurance program. The record demonstrates Bank that market developments have narrowed the differences between credit life insurance and home mort- First Pacific Investments Limited, Monrovia, Liberia, gage redemption insurance, and the experience gained and its indirect subsidiary, Hibernia Bancshares Corin underwriting credit life insurance now appears more poration ("Hibernia"),1 San Francisco, California, relevant to home mortgage redemption insurance un- bank holding companies within the meaning of the derwriting. In this regard, the Board notes that it has Bank Holding Company Act (the "BHC Act"), have permitted the underwriting not only of home mortgage applied for the Board's approval under section 4(c)(8) redemption insurance but also of general life insurance of the BHC Act (12 U.S.C. § 1843(c)(8)), and section by the subsidiaries of United States bank holding 225.23(a)(3) of the Board's Regulation Y (12 C.F.R. companies operating in other countries.14 § 225.23(a)(3)), to acquire all of the voting shares of Based upon a consideration of all the relevant facts, United Savings Bank, F.S.B. ("United FSB"), San the Board has determined that the balance of the Francisco, California, a newly established federal savpublic interest factors that it is required to consider ings bank organized for the purpose of acquiring under section 4(c)(8) is favorable. Accordingly, the substantially all of the assets and assuming the liabilapplication is hereby approved. ities of United Bank, S.S.B. ("United"), San Francis- This determination is also subject to all of the co, California. conditions set forth in Regulation Y, including sections United is a state-chartered thrift institution, the 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and deposits of which are insured by the Federal Savings 225.23(b)(3)), and to the Board's authority to require and Loan Insurance Corporation ("FSLIC"). The such modification or termination of the activities of a Federal Home Loan Bank Board ("Bank Board") has bank holding company or any of its subsidiaries as the advised the Board that the Bank Board has appointed Board finds necessary to assure compliance with the the FSLIC as receiver for United pursuant to provisions and purposes of the Act and the Board's 12 U.S.C. § 1729(c)(1)(B), such appointment to take regulations and orders issued thereunder, or to pre- effect upon the concurrence of the California Commisvent evasion thereof. Specifically, this approval is sioner of Savings and Loans on March 28, 1986. The subject to such conditions as the Board may subse- Bank Board has authorized the FSLIC to transfer the quently impose in acting on its proposed general assets and liabilities of United to United FSB pursuant revision of Regulation Y dealing with insurance activi- to 12 U.S.C. § 1729(a) and (b). In addition, the Bank ties.15 Board advised the Board that the Bank Board had The transaction shall be made not later than three selected Hibernia as the winning bidder for United months after the effective date of this Order, unless under the emergency provisions of section 123 of the such period is extended for good cause by the Board or Garn-St Germain Act, codified at 12 U.S.C. by the Federal Reserve Bank of New York pursuant to § 1730a(m). The Bank Board urged the Board to act delegated authority. immediately on Hibernia's application in view of the By order of the Board of Governors, effective financial condition of United. March 20, 1986. Hibernia, with deposits of $1 billion as of December 31, 1985, is the forty-eighth largest banking organiza- Voting for this action: Chairman Volcker and Governors tion in California, representing less than one percent of Rice, Angell, and Johnson. Abstaining from this action: Governor Wallich. Absent and not voting: Governors Martin and Seger. JAMES MCAFEE 1. Hibernia is the immediate parent holding company of The [SEAL] Associate Secretary of the Board Hibernia Bank, San Francisco, California, a state-chartered commercial bank. First Pacific Investments Limited, Monrovia, Liberia, owns Hibernia through a chain of intermediary companies, each of which is in turn wholly owned by its parent. These companies are First Pacific 14. Citibank Overseas Investment Corporation, 70 FEDERAL RE- Holdings Limited, Hong Kong, B.C.C., FPC Holdings, N.V., Cura- SERVE BULLETIN 168 (1984) and 71 FEDERAL RESERVE BULLETIN 247 cao, Netherlands Antilles, First Pacific (Netherlands), B.V., Amsterand 269 (1985). dam, The Netherlands, and First Pacific Corporation, Wilmington, 15. See n. 2. Delaware. Each of these entities joins in this application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 343 aggregate bank deposits in the state. United is a state- allow and has expressly authorized bank holding comchartered, stock savings bank, with $489.2 million in panies to acquire failing federally insured thrift institudeposits as of December 31, 1985. As a federal savings tions in the Garn-St Germain Act. bank, United FSB is not a "bank" as that term is The Board has reexamined, in the context of this defined in the BHC Act. 12 U.S.C. § 1841(c). application, the general adverse factors cited in the Section 4(c)(8) of the BHC Act (12 U.S.C. Board's 1977 D.H. Baldwin decision, including regula- § 1843(c)(8)) authorizes a bank holding company to tory conflict, erosion of institutional rivalry, and the engage in nonbanking activities and acquire shares of a potential for undermining interstate banking prohibinonbanking company that engages in activities that are tions. The Board has also considered the adverse determined by the Board to be "so closely related to factors that might be associated with this particular banking or managing or controlling banks as to be a application, including the potential for decreased or proper incident thereto." The Act provides that the unfair competition, concentration of resources, con- Board may make such determinations by order or by flicts of interests, financial risks, diversion of funds, regulation. The Board has determined previously that and participation in impermissible activities. the operation of a thrift institution is closely related to Based upon the Board's review of the record, the banking, and reaffirms that determination in this Or- Board has determined that there are substantial beneder.2 fits to the public in this case that are sufficient to With respect to the "proper incident" requirement, outweigh the generalized adverse effects found by the section 4(c)(8) of the BHC Act requires the Board to Board in the D.H. Baldwin case. The Board considers consider whether the performance of the activity by an Applicant's acquisition of United to be a substantial affiliate of a holding company "can reasonably be and compelling public benefit in that Applicant will expected to produce benefits to the public, such as provide United with significant new capital funds greater convenience, increased competition, or gains sufficient to enable United to achieve and maintain a in efficiency that outweigh possible adverse effects, tangible primary capital to assets ratio at or above 5 such as undue concentration of resources, decreased percent and to permit United to continue its operations or unfair competition, conflicts of interests, or un- and remain a viable competitor in the markets served sound banking practices." by United. The record establishes that Applicant has In 1977, the Board considered the general question the financial and managerial resources and commitwhether savings and loan association ("S&L") activi- ment to serving the convenience and needs of the ties are a proper incident to banking. At that time, the public to achieve this result. In this regard, Applicant, Board determined that, as a general matter, S&L with a demonstrated commitment to serving the Asian activities are not a proper incident to banking because community in California, is well equipped to maintain the potential adverse effects of generally allowing United's services to these same communities. affiliations of banks and S&Ls were then sufficiently The Board has stated and continues to believe that strong to outweigh any public benefits that might capital adequacy is an especially important factor in result in individual cases. (D.H. Baldwin & Co., 63 the analysis of bank holding company expansion pro- FEDERAL RESERVE BULLETIN 280 (1977)). posals. In evaluating such a proposal, the Board will Because of the considerations elaborated in D.H. consider, among other factors, the effect of the acqui- Baldwin, the Board has not been prepared to permit sition on the tangible primary capital of the applicant bank holding companies to acquire thrift institutions and the acquired institution. Applicant's primary capion a general basis. However, the Board has consis- tal on a tangible basis is above levels specified in the tently regarded the BHC Act as authorizing the Board Board's Capital Adequacy Guidelines. While the proto permit such an acquisition, and the Board has posal will reduce Applicant's tangible primary capital, approved several such proposals involving failing its capital position would continue to be in excess of thrift institutions on the basis that any adverse effects minimum requirements under the Guidelines, and Apof bank/thrift affiliations would be overcome by the plicant has indicated that it will improve its capital public benefits of preserving the failing thrift institu- position to take into account the expansion effected tions.3 Moreover, Congress has recognized the need to through this acquisition. In evaluating this proposal, the Board has also placed considerable emphasis on the substantial pro- 2. See, e.g., D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 (1977); Interstate Financial Corp., 68 FEDERAL RESERVE BULLE- tection afforded to Hibernia by the Assistance Agree- TIN 316 (1982); Citicorp, 68 FEDERAL RESERVE BULLETIN 656 (1982); ment with the FSLIC in connection with losses that Old Stone Corporation, 69 FEDERAL RESERVE BULLETIN 812 (1983). may arise from United's existing assets and liabilities. 3. See, e.g., F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 (1985); The Chase Manhattan Corporation, 71 FEDERAL RESERVE In addition, the Board has relied on certain commit- BULLETIN 462 (1985); Interstate Financial Corp., supra; Citicorp, 68 ments by Applicants regarding the capitalization of FEDERAL RESERVE BULLETIN 656 (1982); and, Citicorp, 70 FEDERAL United. RESERVE BULLETIN 149 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin • May 1986 In view of the size of the market shares involved and b. Neither Applicant nor any of its subsidiaries the condition of United, consummation of this propos- will solicit deposits or loans for United nor shall al would not substantially lessen competition in the United solicit deposits or loans for any other relevant market. Indeed, the proposed acquisition subsidiary of Applicant. would have a substantial beneficial effect on competi- 5. Applicant will, after an appropriate transition tion by ensuring the continued operation of United as period, alter United's name such that the public will an effective competitor. Applicant and United both not be confused regarding United's status as a operate in the San Francisco Ranally Metro Area nonbank thrift institution.5 ("San Francisco RMA").4 Applicant is the sixteenth 6. United will not convert its charter to that of a largest depository institution among banks and thrift national or state commercial bank without the institutions in the San Francisco RMA, with 1.2 per- Board's prior approval. cent of deposits in the market. United ranks thirty- 7. To the extent necessary to insure independent sixth among the 168 depository institutions in the operation of United and prevent the improper divermarket, with total deposits of $397.3 million, repre- sion of funds, there shall be no transactions between senting approximately 0.5 percent of market deposits United and Applicant or any of its subsidiaries in banks and thrift institutions. without the prior approval of the Federal Reserve The affiliation of Applicant and United is not likely Bank of San Francisco. This limitation encompasses to result in unfair competition. To guard against possi- the transfer, purchase, sale or loan of any assets or ble adverse effects of affiliation in this case between a liabilities, but does not include infusions of capital banking organization and a savings and loan associa- from Applicant, the payment of dividends by United tion, including the potential for unfair competition and to Applicant, or the sale of residential real estate diversion of funds, the Board has determined to condi- loans from United to any subsidiary of Applicant. tion its approval as follows: 1. Applicant will operate United as a federal savings By virtue of this proposal, Applicant also will acbank having as its primary purpose the provision of quire United's service corporation subsidiaries. Both residential housing credit. United will limit its activi- United and its service corporations engage in imperties to those currently permitted to thrift institutions missible real estate development activities. In any under the Home Owners' Loan Act, but shall not application by a bank holding company to acquire a engage in any activity prohibited to bank holding nonbanking organization, the nonbanking organization companies and their subsidiaries under section ordinarily would be required to divest any impermissi- 4(c)(8) of the Bank Holding Company Act. As ble assets, or to cease to engage in any impermissible discussed below, these limitations will apply to activities, prior to consummation of the acquisition. In United's wholly owned service corporations. view of the emergency nature of this acquisition and 2. United will not establish or operate a remote the compelling public benefits provided thereby, the service unit at any location outside California. Board has determined to grant Applicant's request to 3. United will not establish or operate branches at retain United's existing direct and indirect interests in locations not permissible for national or state banks certain real estate development activities for a fivelocated in California. year period. This will allow for an orderly divestiture 4. United will be operated as a separate, indepen- of these assets without further loss to United, and also dent, profit-oriented corporate entity and shall not will coincide with the terms of the assistance agreebe operated in tandem with any other subsidiary of ment between Applicant and the FSLIC. Applicant. Applicant and United will limit their The Board concludes that consummation of the operations to effect this condition, and will observe proposal, subject to the conditions set out above, may the following conditions: reasonably be expected not to result in conflicts of a. No banking or other subsidiary of Applicant interests, unsound banking practices, decreased or will link its deposit-taking activities to accounts at unfair competition, undue concentration of resources, United in a sweeping arrangement or similar ar- or other adverse effects. rangement. Based upon the foregoing and other facts and circumstances reflected in the record, the Board has determined that the acquisition of United by Applicant 4. All financial and market data are as of June 30, 1985. United also would result in substantial and compelling public beneoperates offices located in the Los Angeles, Sacramento, and Stockton, California RMAs, in which Applicant does not operate. In each instance, United controls less than one percent of the total deposits in banks and thrift institutions in those markets. The Board has determined that there would be no substantial adverse effects on potential 5. The Federal Reserve Bank of San Francisco is hereby delegated competition in each of those markets as a result of this acquisition. authority to approve any name change for United. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 345 fits that are sufficient to outweigh any adverse effects Hongkong and Shanghai Banking Corporation that may reasonably be expected to result from this Hong Kong proposal, including any potential adverse effects of the affiliation of a commercial banking organization with a Kellett, N.V. thrift institution. Accordingly, the application is ap- Curacao, Netherlands Antilles proved subject to the conditions described in this Order, and the record of the application. HSBC Holdings, B.V. In its letter, the Bank Board has urged the Board to Amsterdam, The Netherlands act immediately on this application in order to restore public confidence in United, maintain confidence in Marine Midland Banks, Inc. the savings and loan industry generally, and stabilize Buffalo, New York the daily increasing potential cost to the FSLIC. The Bank Board has based its request for immediate action Order Approving Application to Engage in Certain on the current financial condition of United and the Securities Activities prior history of customer withdrawals from United, as well as the substantial public benefits of the proposal The Hongkong and Shanghai Banking Corporation, including the significant and stabilizing capital injec- Hong Kong ("HSBC"); Kellett, N.V., Curacao, tion proposed by Applicant. Netherlands Antilles; HSBC Holdings B.V., Amster- After considering all the facts and circumstances in dam, The Netherlands; and Marine Midland Banks, this case, the Board has concluded that an emergency Inc., Buffalo, New York ("MMBI") (collectively, situation exists at United that requires the Board to act "Applicant"), have applied, pursuant to section immediately on this application, and the Bank Board 4(c)(8) of the Bank Holding Company Act ("Act") has concurred in this finding. Accordingly, the Board (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the has, under the authority provided in section 118 of the Board's Regulation Y (12 C.F.R. § 225.23(a)), for per- Garn-St Germain Act, dispensed with the notice and mission to acquire either directly or indirectly through hearing requirements of section 4(c)(8) with respect to a newly formed, wholly owned subsidiary, from its this application.6 subsidiary, Marine Midland Bank, N.A., Buffalo, New The Board's decision in this case is subject to the York ("Bank"), all of the shares of CM&M Group, conditions set forth in Regulation Y, including sections Inc., New York, New York ("Group"), and thereafter 225.4(d) and 225.23(b), and to the Board's authority to to engage through subsidiaries of Group, in the followrequire such modification or termination of the activi- ing activities: ties of a holding company or any of its subsidiaries as (1) through Carroll McEntee and McGinley, Inc., the Board finds necessary to assure compliance with, New York, New York ("CM&M"): acting as a or to prevent evasion of, the provisions and purposes primary dealer in U.S. government and federal of the Act and the Board's regulations and orders agency securities. CM&M also acts as a dealer in issued thereunder. This transaction shall not be con- money market instruments, bankers' acceptances, summated later than three months after the effective and negotiable certificates of deposit. The activities date of this Order, unless that period is extended for will be conducted from offices in New York; good cause by the Board or by the Federal Reserve (2) through Intermarket Securities Corporation, Bank of San Francisco, pursuant to authority hereby New York, New York: acting as a dealer in eligible delegated. fixed income securities, certificates of deposit, By order of the Board of Governors, effective bankers' acceptances and gold and silver bullion; March 28, 1986. (3) through CM&M Futures, New York, New York: acting as a futures commission merchant in govern- Voting for this action: Chairman Volcker and Governors ment securities, certificates of deposit and other Martin, Wallich, Rice, Angell, and Johnson. Absent and not eligible money market instruments and foreign curvoting: Governor Seger. rency options. This activity will be conducted from offices in New York, New York, and Chicago, JAMES MCAFEE Illinois; [SEAL] Associate Secretary of the Board (4) through Investors Arbitrage Corporation, New York, New York: acting solely as an investment advisor, pursuant to section 225.25(b)(4) of the Board's Regulation Y. This activity would be con- 6. The Board has waived with the notice and hearing requirements ducted from offices in New York, New York, and of section 4(c)(8) in similar circumstances. F.N.B. Corporation, 71 Tucson, Arizona; FEDERAL RESERVE BULLETIN 340 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin • May 1986 (5) through American Interest Arbitrage Corpora- activity is permissible for bank holding companies.4 tion, New York, New York: acting solely as an Accordingly, the Board concludes that Applicant's investment advisor and money manager for Group; proposal is closely related to banking.5 (6) through Reavcom Services, Inc., New York, In order to approve this application, the Board is New York: engaging in equipment leasing for also required to determine that the performance of the Group. proposed activities by Applicant "can reasonably be expected to produce benefits to the public . . . that Notice of the application, affording interested per- outweigh possible adverse effects, such as undue sons an opportunity to submit comments on the pro- concentration of resources, decreased or unfair composal, has been duly published (51 Federal Register petition, conflicts of interests, or unsound banking 4240 (1986)). The time for filing comments has expired practices." (12 U.S.C § 1843(c)(8)). and the Board has considered the application and all This proposal is basically a corporate reorganizacomments received in light of the public interest tion, and thus consummation of this proposal should factors set forth in section 4(c)(8) of the Act. result in operational and managerial efficiencies. The HSBC, a bank organized under the laws of Hong Board expects that the de novo entry by Applicant into Kong, is the 16th largest banking organization in the the market for the brokering of foreign currency opworld with total assets of approximately $61.6 billion. tions will increase the level of competition among the HSBC engages in a broad range of financial and providers of this service already in operation. Accordcommercial services directly and indirectly through its ingly, the Board concludes that Applicant's performoffices worldwide. Through Kellett and Holdings, ance of the proposed activities can reasonably be HSBC owns 51 percent of the shares of MMBI, which expected to provide benefits to the public. is the 17th largest commercial banking organization in The Board also has considered the potential for the United States and the 7th largest in New York with adverse effects that may be associated with this prototal assets of approximately $2.2 billion.1 MMBI, posal. There is no evidence in the record that consumthrough its subsidiary bank, offers a full range of mation of the proposal would result in any adverse banking and trust services from nearly 300 offices in effects, such as undue concentration of resources, the State of New York. decreased or unfair competition, conflicts of interests, This application represents a corporate reorganiza- or unsound banking practices. tion whereby Bank, which currently owns Group, will Based upon a consideration of all the relevant facts, transfer the shares of Group to MMBI. Applicant the Board concludes that the balance of the public proposes to underwrite and deal in obligations of the interest factors that it is required to consider under United States and certain money market instruments section 4(c)(8) is favorable. Accordingly, the applicaand to act as a futures commission merchant with tion is hereby approved. regard to the execution and clearance on major com- This determination is also subject to all of the modity exchanges of futures contracts and options on conditions set forth in Regulation Y, including sections futures contracts for bullion, foreign exchange, gov- 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and ernment securities, and money market instruments. 225.23(b)(3)), and to the Board's authority to require Applicant proposes to engage in these activities to the such modification or termination of the activities of a extent these activities are permissible for bank holding bank holding company or any of its subsidiaries as the companies pursuant to the Board's Regulation Y.2 Board finds necessary to assure compliance with the Applicant also proposes to buy and sell gold and silver provisions and purposes of the Act and the Board's bullion for its own account. The Board has previously regulations and orders issued thereunder, or to predetermined that the purchase and sale of gold and vent evasion thereof. silver bullion by a bank holding company for its own The transaction shall be made not later than three account is closely related to banking.3 Applicant also months after the effective date of this Order, unless proposes to engage de novo in the brokering of foreign such period is extended for good cause by the Board or currency options. The Board has determined that this by the Federal Reserve Bank of New York, pursuant to delegated authority. 1. Banking data are as of June 30, 1985. 2. 12 C.F.R. §§ 225.25(b)(16) and (18). Applicant has committed to 4. Fidelcor, Inc., 70 FEDERAL RESERVE BULLETIN 368 (1984). conduct its operations pursuant to the Board's policy statement 5. Reavcom Services, Inc., owns and leases equipment such as concerning bank holding companies engaging in futures and options buildings and computers to Group. American Interest Arbitrage contracts on U.S. Government and agency securities and money Corporation buys and sells fixed income securities for Group. This market instruments, 12 C.F.R. § 225.142 (1985). subsidiary is currently inactive. Applicant may hold the shares of 3. Standard and Chartered Banking Group Limited, 38 Federal these subsidiaries pursuant to section 4(c)(1)(C) of the Act, 12 U.S.C. Register 27,552 (October 4, 1973). § 1843(c)(1)(C). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 347 By order of the Board of Governors, effective $2.4 billion.2 The Board's approval did not include March 5, 1986. approval of this application. Upon consummation of the merger, Applicant will become the largest com- Voting for this action: Chairman Volcker and Governors mercial banking organization in the Washington, D.C. Wallich, Rice, Angell, and Johnson. Absent and not voting: banking market,3 controlling 15.0 percent of the total Governors Martin and Seger. deposits in commercial banks in the market. Company currently engages in the installation of and JAMES MCAFEE provision of support services to ATMs in Giant Food [SEAL] Associate Secretary of the Board stores located in the Baltimore, Maryland, Washington, D.C., and Northern Virginia areas. Company's activities, engaged in through its ownership of 50 Sovran Financial Corporation percent of the shares of GFS, include the ownership, Norfolk, Virginia construction, and management of an EFT switch that transmits transactions performed on the ATMs to Order Approving Application to Engage in Data ATM networks and financial institutions. Customers Processing Activities of depository institutions that participate in networks utilizing the ATMs operated by GFS may use the Sovran Financial Corporation, Norfolk, Virginia, a ATMs for cash withdrawals and balance inquiries, but bank holding company within the meaning of the Bank may not make deposits. The remaining 50 percent Holding Company Act, 12 U.S.C. § 1841 et seq. interest in GFS is owned by GAMS, a wholly owned ("BHC Act"), has applied pursuant to section 4(c)(8) subsidiary of Giant. GFS was originally structured as a joint venture to take advantage of the complementary of the BHC Act and section 225.23 of the Board's resources and experience of Company and GAMS. Regulation Y (12 C.F.R. § 225.23), to acquire all of the Company's role in GFS is based on its expertise in voting shares of Suburban Service Corporation, Beinstallation, management, and provision of support thesda, Maryland ("Company"), a wholly owned subservices to ATMs, including the management of an sidiary of Suburban Bancorporation, Bethesda, Mary- EFT switch. Company also plans to provide ATMs to land ("Suburban"), and thereby to engage in the GFS.4 GAMS provides the locations for installation of installation of and provision of support services to the ATMs and employee services at the locations automated teller machines ("ATMs"), and the manwhere the ATMs are installed. The Maryland Bank agement of an electronic funds transfer ("EFT") Commissioner and Virginia Commissioner of Finanswitch through GFS Financial Services Joint Venture cial Institutions have not objected to the participation ("GFS"), ajoint venture with Giant Automatic Money of Applicant, Suburban, or Giant in GFS.5 Systems ("GAMS"), a wholly owned subsidiary of Giant Foods, Inc., Landover, Maryland ("Giant"). Because this proposal involves Applicant's acquisi- These activities have been determined by the Board to tion of a joint venture between a bank holding compabe closely related to banking and permissible for bank ny and a nonbanking company, the Board has anaholding companies (12 C.F.R. § 225.25(b)(7)). lyzed the proposal with respect to its effects on Notice of the application, affording interested per- existing and potential competition between Applicant sons an opportunity to submit comments, has been and its co-venturer, as well as among other current and duly published, 51 Federal Register 8019 (1986). The potential competitors, in the market for ATM nettime for filing comments has expired, and the Board works.6 Although Applicant operates its own shared has considered the application and all comments received in light of the public interest factors set forth in section 4(c)(8) of the BHC Act. 2. 72 FEDERAL RESERVE BULLETIN 276 (Order of February 27, Applicant is the largest commercial banking organi- 1986). 3. The Washington, D.C. banking market is approximated by the zation in Virginia, controlling total domestic deposits Washington, D.C., Ranally Metropolitan area. of approximately $6.8 billion, representing 20.5 per- 4. Although ownership of the ATMs provided by Company to GFS will be vested in GFS, Company will be entitled to all sales and cent of the total deposits of commercial banks in liquidation proceeds and tax benefits with respect to such ownership. Virginia.1 On February 27, 1986, the Board approved 5. Applicant has stated that the operations of GFS will be conduct- Applicant's merger with Suburban, the fourth largest ed at all times in compliance with all federal and state branching laws, to the extent applicable. commercial banking organization in Maryland, con- 6. The Board has previously indicated its concerns regarding the trolling aggregate domestic deposits of approximately potential for undue concentration of resources that could result from the combination in ajoint venture of banking and nonbanking institutions. The Board is also concerned that joint ventures not lead to a matrix of relationships that could undermine the legally-mandated separation of banking and commerce. See, e.g., Amsterdam-Rotterdam Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984); Deut- 1. Banking data are as of September 30, 1985. sche Bank AG, (>7 FEDERAL RESERVE BULLETIN 449 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin • May 1986 ATM network, Applicant does not engage in providing to membership in the ATM network established by the proposed installation and servicing activities.7 In GFS. Currently, 158 depository institutions participate addition, the joint venture agreement between Compa- in the ATM network established by GFS. After review ny and GAMS permits the parties to engage in activi- of the application and other facts of record, the Board ties in competition with those of the joint venture, or concludes that consummation of this proposal would to join other switching networks. In light of these and not result in adverse effects such as unsound banking other facts of record, the Board concludes that con- practices, unfair competition, conflicts of interest or summation of this proposal would not have a signifi- an undue concentration of resources. cant adverse effect on existing competition in the Approval of this application can reasonably be exprovision of ATM services in any relevant market. pected to produce substantial benefits to the public. The Board also has considered the effects of con- Consummation of the proposal will continue to give summation of this proposal on probable future compe- customers of financial institutions participating in the tition in the provision of EFT switching services. In network in Washington, D.C., and the Baltimore, this connection, the Board notes that numerous poten- Maryland and northern Virginia areas access to a large tial entrants into the EFT switch market exist. More- number of ATM terminals in convenient locations. over, it is less likely that Giant would enter this market Based upon the foregoing and all the facts of record, independently than as a joint venturer with a potential the Board has determined that the balance of public entrant that has expertise in the banking and ATM interest factors it is required to consider under section areas. In addition, the Board notes that the market for 4(c)(8) is favorable. Accordingly, the application is the data processing and related services necessary for hereby approved. This determination is subject to all the operation of a shared ATM network is unconcen- of the conditions set forth in the Board's Regulation Y, trated, with many competitors and few barriers to including those in section 225.4(d) and 225.23(b), and entry. Numerous national ATM networks currently to the Board's authority to require modification or operate in the Washington, D.C. Metropolitan area, termination of the activities of the holding company or and additional networks could potentially enter the any of its subsidiaries as the Board finds necessary to area. Accordingly, the Board concludes that consum- assure compliance with the provisions and purposes of mation of this proposal would not have a significant the BHC Act and the Board's regulations and orders adverse affect on probable future competition. issued thereunder, or to prevent evasion thereof. The Board has reviewed this proposal to ensure that This transaction shall not be consummated later no unfair competitive practices or other substantially than three months after the effective date of this adverse effects would result from consummation of the Order, unless such period is extended for good cause proposal. In this regard, the Board notes that deposi- by the Board, or by the Federal Reserve Bank of tory institutions would have nondiscriminatory access Richmond, pursuant to delegated authority. By order of the Board of Governors, effective March 28, 1986. Voting for this action: Chairman Volcker and Governors Martin, Wallich, Rice, Angell, and Johnson. Absent and not 7. Suburban's banking subsidiary, Suburban Bank, Bethesda, Maryland, previously held a limited partnership interest in the Net- voting: Governor Seger. work Exchange/EBS 1983-1 Partnership, which operated ATMs in Safeway stores throughout the Washington, D.C. metropolitan area. JAMES MCAFEE As of March 14, 1986, the assets of the Network Exchange/EBS 1983- 1 Partnership have been sold, and the partnership has been liquidated. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 349 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By Board of Governors Recent applications have been approved by the Board of Governors as listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action Applicant Bank(s) (effective date) CSB Investors, Iowa-Grant Bankshares, March 3, 1986 Cobb, Wisconsin Cobb, Wisconsin Edgewood Bancshares, Inc. Horizon Bancshares, Inc., March 31, 1986 Countryside, Illinois Lombard, Illinois State Bank of Lombard, Lombard, Illinois Lone Wolf Bancshares, Inc., First State Bank, March 24, 1986 Lone Wolf, Oklahoma Lone Wolf, Oklahoma United Pinellas Corporation, Pinellas Bancshares Corporation, March 24, 1986 St. Petersburg, Florida St. Petersburg, Florida 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 Southwest Western Bancshares of El Paso, Dallas February 27, 1986 Bancshares, Inc., Inc., El Paso, Texas El Paso, Texas ASB Bankcorp, Inc., Adrian State Bank, Chicago March 19, 1986 Adrian, Michigan Adrian, Michigan Baker Financial Corporation, Planters and Stockmen Bank, St. Louis March 14, 1986 Pocahontas, Arkansas Pocahontas, Arkansas Banc One Corporation, Purdue National Corporation, Cleveland February 28, 1986 Columbus, Ohio Lafayette, Indiana Bancorp of Rantoul, Bank of Rantoul, Chicago February 28, 1986 Mahomet, Illinois Rantoul, Illinois BJS, Inc., Westmont Corporation, Chicago March 5, 1986 West Union, Iowa West Union, Iowa CB&T Bancshares, Inc., Bank of Coweta, Atlanta March 14, 1986 Columbus, Georgia Newnan, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin • May 1986 Section 3—Continued - . . . Reserve Effective Applicant Bank(s) Bank date The Chase Manhattan Chase Bank of Florida, N.A., New York February 18, 1986 Corporation, St. Petersburg, Florida New York, New York Chase Manhattan National Holding Corporation, Newark, Delaware Central Financial Corporation, The Randolph National Bank, Boston February 26, 1986 Randolph, Vermont Randolph, Vermont Chrisman Bancorp, Inc., The First National Bank of Chicago March 21, 1986 Springfield, Illinois Chrisman, Chrisman, Illinois CSB Financial Corporation, Commercial Bank, Chicago February 25, 1986 Greenville, Michigan Greenville, Michigan Dassel Investment Company, Hutchinson Bancorp, Inc., Minneapolis February 28, 1986 Minneapolis, Minnesota Minneapolis, Minnesota F&M Bancorporation, Inc., The Farmers State Bank of Chicago March 6, 1986 Kaukauna, Wisconsin Potter, Potter, Wisconsin Farmers Capital Bank Citizens Bank of Elizabethtown, St. Louis February 26, 1986 Corporation, Inc., Frankfort, Kentucky Elizabethtown, Kentucky Financial Services Bancorp, Third National Bank and Trust Philadelphia February 26, 1986 Inc., Company of Scranton, Scranton, Pennsylvania Scranton, Pennsylvania First Chico Bancshares, Inc., Strawn Bancshares, Inc., Dallas February 26, 1986 Chico, Texas Strawn, Texas Strawn Security Bank, Strawn, Texas First Kentucky National Central Bank and Trust St. Louis March 14, 1986 Corporation, Company, Louisville, Kentucky Owensboro, Kentucky First National Bancorporation First National Bank of Ennis, Dallas February 27, 1986 of Ennis, Inc., Ennis, Texas Ennis, Texas First National Cincinnati New Bancshares, Inc., Cleveland February 28, 1986 Corporation, Newport, Kentucky Cincinnati, Ohio First Sierra Bancshares, Inc., Walz-Stuart Agency, Inc., Dallas February 26, 1986 Truth or Consequences, New Truth or Consequences, New Mexico Mexico First Sierra National Bank, Truth or Consequences, New Mexico First Union Corporation, Citizens DeKalb Bank, Richmond February 14, 1986 Charlotte, North Carolina Clarkston, Georgia First United Bancorp, Franklin Bank and Trust Chicago March 11, 1986 Franklin, Indiana Company, Franklin, Indiana First United Financial Services, Acorn Bankshares, Inc., Chicago February 19, 1986 Inc., Bloomingdale, Illinois Arlington Heights, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 351 Section 3—Continued _ . . . Reserve Effective Applicant Bank(s) Bank date First White Oak Bancshares, White Oak Bancshares, Inc., Dallas February 21, 1986 Inc., White Oak, Texas White Oak, Texas White Oak State Bank, White Oak, Texas Fleetwood Bank Corporation, The First National Bank in Philadelphia March 12, 1986 Fleetwood, Pennsylvania Fleetwood, Fleetwood, Pennsylvania General Bancshares, Inc., Peoples National Bank, Dallas March 21, 1986 Caldwell, Texas Caldwell, Texas Hutchinson Bancorp, Inc., Fidelity State Bank of Fairfax, Minneapolis February 28, 1986 Minneapolis, Minnesota Fairfax, Minnesota Fidelity State Bank of New Prague, New Prague, Minnesota Fidelity State Bank of Hector, Hector, Minnesota Dassel State Bank, Dassel, Minnesota J.R. Montgomery Ban- The City National Bank and Kansas City March 19, 1986 corporation, Trust Company of Lawton, Lawton, Oklahoma Lawton, Oklahoma Kaufman Bancshares, Inc., BancTEXAS Kaufman, N.A., Dallas February 26, 1986 Kaufman, Texas Kaufman, Texas Lincoln County Bancorp, Inc., Warren County Bancshares, Inc., St. Louis March 21, 1986 Troy, Missouri Warrenton, Missouri Mercedes Bancorp, Inc., Mercedes National Bank, Dallas March 21, 1986 Mercedes, Texas Mercedes, Texas Mid-Texas Bancshares, Inc., Citizens State Bank, Dallas February 27, 1986 Fort Worth, Texas Gorman, Texas Moxham Bank Corporation, The Moxham National Bank of Philadelphia March 6, 1986 Johnstown, Pennsylvania Johnstown, Johnstown, Pennsylvania National Bancorp of Arizona, National Bank of Tucson, San Francisco February 28, 1986 Inc., Tucson, Arizona Tucson, Arizona National City Financial Group, National City Bank, Atlanta March 17, 1986 Inc., Coral Springs, Florida Coral Springs, Florida North Shore Bancorp, Inc., Bank of the North Shore, Chicago March 11, 1986 Northbrook, Illinois Northbrook, Illinois Overton Financial Corporation, First State Bank, Dallas March 6, 1986 Overton, Texas Overton, Texas Oxford Bank Corporation, State Bank of Oxford, Chicago March 4, 1986 Oxford, Indiana Oxford, Indiana Perry County Bancshares, Inc., The Perry County Bank, St. Louis March 21, 1986 Perryville, Arkansas Perry ville, Arkansas Promenade Bancshares, Inc., Piano National Bank, Dallas March 3, 1986 Richardson, Texas Piano, Texas PSB Bancorp, Peoples State Bank of Chicago March 20, 1986 Francesville, Indiana Francesville, Francesville, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin • May 1986 Section 3—Continued „ , x Reserve Effective Applicant Bank (/s) ^ BanR Quitman Bancorporation, Inc., The First National Bank of Dallas February 28, 1986 Quitman, Texas Quitman, Quitman, Texas R&C Bancorp, Inc., Rockwell Bank, N.A., Kansas City March 4, 1986 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Russell State Bancshares, Inc., Security State Bank, Kansas City March 19, 1986 Russell, Kansas Great Bend, Kansas Ruston Bancshares, Inc., Morehouse Bancshares, Inc., Dallas March 14, 1986 Ruston, Louisiana Bastrop, Louisiana Shawnee Financial Services The Everett Bank, Philadelphia March 24, 1986 Corporation, Everett, Pennsylvania Everett, Pennsylvania Shelby County Bancorp, Inc., Shelby County State Bank, Chicago March 4, 1986 Shelbyville, Illinois Shelby ville, Illinois SouthTrust Corporation, Citizens Bank of Hartselle, Atlanta March 17, 1986 Birmingham, Alabama Hartselle, Alabama Stratford Bancshares, Inc., The First State Bank of Stratford, Dallas February 21, 1986 Stratford, Texas Stratford, Texas Stratford Bancshares, Inc., Stratford State Bank, Chicago March 18, 1986 Stratford, Wisconsin Stratford, Wisconsin Success Financial Group/Indi- Industrial National Bank of East Chicago March 17, 1986 ana, Inc., Chicago, Wilmington, Delaware East Chicago, Indiana United Virginia Bankshares Bethesda Bancorporation, Richmond February 25, 1986 Incorporated, Bethesda, Maryland Richmond, Virginia Unity Bancorp, Inc., The New Waterford Bank, Cleveland March 19, 1986 New Waterford, Ohio New Waterford, Ohio Warren County Bancshares, Commerce Warren County Bank, St. Louis March 21, 1986 Inc., Warrenton, Missouri Warrenton, Missouri Zapata Bancshares, Inc., Mercedes Bancorp, Inc., Dallas March 21, 1986 Zapata, Texas Mercedes, Texas Mercedes National Bank, Mercedes, Texas Section 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Area Bancshares Corporation, North American Financial Ser- St. Louis February 6, 1986 Hopkinsville, Kentucky vices Company of Kentucky, Louisville, Kentucky L.H.F. Information Processing, Inc., Louisville, Kentucky Goodhue County Financial Red Wing Loan and Investment Minneapolis March 21, 1986 Corporation, Company, Red Wing, Minnesota Red Wing, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 353 Section 4—Continued Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date First Bank System, Inc., Niskern Agency, Inc., Minneapolis February 28, 1986 Minneapolis, Minnesota St. Cloud, Minnesota First of America Bank Securities Counsel, Inc., Chicago February 27, 1986 Corporation, Jackson, Michigan Kalamazoo, Michigan First United Bancorp, Franklin Financial Corporation, Chicago March 11, 1986 Franklin, Indiana Indianapolis, Indiana Franklin Mortgage Corporation, Indianapolis, Indiana Mid-America Bancorp, North American Financial Ser- St. Louis February 6, 1986 Louisville, Kentucky vices Company of Kentucky, Louisville, Kentucky L.H.F. Information Processing, Inc., Louisville, Kentucky Norstar Bancorp Inc., Intercounty Mortgagee Corp., New York February 21, 1986 Albany, New York Hempstead, New York Security Pacific Corporation, XCEL Business Systems, Inc., San Francisco March 19, 1986 Los Angeles, California Mill Valley, California United Bancshares, Inc., Associated Investors Life Dallas March 17, 1986 Rosenberg, Texas Insurance Company, Houston, Texas ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date The Surburban Bank, Virginia Capital Bank, Richmond February 24, 1986 Richmond, Virginia Richmond, Virginia 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. St. James Bancorp v. Board of Governors, No. Myers, et al. v. Federal Reserve Board, No. 85-1427 86-1224 (8th Cir., filed Feb. 19, 1986). (D. Idaho, filed Nov. 18, 1985). CBC, Inc. v. Board of Governors, No. 86-1001 (10th Souser, et al. v. Volcker, et al., No. 85-C-2370, et al. Cir., filed Jan. 2, 1986). (D. Colo., filed Nov. 1, 1985). Howe v. United States, et al., No. 85-4504-C (D. Podolak v. Volcker, No. C85-0456, et al. (D. Wyo., Mass., filed Dec. 6, 1985). filed Oct. 28, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • May 1986 Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa, Urwyler, et al. v. Internal Revenue Service, et al., No. filed Oct. 22, 1985). CV-F-85-402 REC (E.D. Cal., filed July 18, 1985). Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D. Johnson v. Federal Reserve System, et al., No. S85- Minn., filed Oct. 21, 1985). 0958(R) and S85-1269(N) (S.D. Miss., filed July 16, Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D. 1985). Neb., filed Oct. 16, 1985). Wight, et al. v. Internal Revenue Service, et al., No. Jensen v. Wilkinson, et al., No. 85-4436-S, et al. (D. CIV S-85-0012 MLS (E.D. Cal., filed July 12,1985). Kan., filed Oct. 10, 1985). Cook v. Spillman, et al., No. CIV S-85-0953 EJG Alfson v. Wilkinson, et al., No. Al-85-267 (D. N.D., (E.D. Cal., filed July 10, 1985). filed Oct. 8, 1985). Florida Bankers Association v. Board of Governors, First National Bank of Blue Island Employee Stock No. 84-3883 and No. 84-3884 (11th Cir., filed Feb. Ownership Plan v. Board of Governors, No. 15, 1985). 85-2615 (7th Cir., filed Sept. 23, 1985). Florida Department of Banking v. Board of Gover- First National Bancshares II v. Board of Governors, nors, No. 84-3831 (11th Cir., filed Feb. 15, 1985), No. 85-3702 (6th Cir., filed Sept. 4, 1985). and No. 84-3832 (11th Cir., filed Feb. 15, 1985). McHuin v. Volcker, et al., No. 85-2170 WARB (W.D. Lewis v. Volcker, et al., No. C-l-85-0099 (S.D. Ohio, Okl., filed Aug. 29, 1985). filed Jan. 14, 1985). Independent Community Bankers Associaton of South Brown v. United States Congress, etal., No. 84-2887- Dakota v. Board of Governors, No. 84-1496 (D.C. 6 (IG) (S.D. Cal., filed Dec. 7, 1984). Cir., filed Aug. 7, 1985). Melcher v. Federal Open Market Committee, No. Florida Bankers Association, et al. v. Board of Gover- 84-1335 (D.D.C., filed Apr. 30, 1984). nors, No. 85-193 (U.S., filed Aug. 5, 1985). Securities Industry Association v. Board of Governors, No. 80-2614 (D.C. Cir., filed Oct. 24., 1980), and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 gencies—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 • May 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 A3 9 Mortgage debt outstanding A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on foreigners CONSUMER INSTALLMENT CREDIT A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined A40 Total outstanding and net change domestic offices and foreign branches A41 Terms REPORTED BY NONBANKING BUSINESS FLOW OF FUNDS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A63 Liabilities to unaffiliated foreigners A43 Direct and indirect sources of funds to credit A64 Claims on unaffiliated foreigners markets SECURITIES HOLDINGS AND TRANSACTIONS Domestic Nonfinancial Statistics A65 Foreign transactions in securities A66 Marketable U.S. Treasury bonds and notes— SELECTED MEASURES Foreign transactions A44 Nonfinancial business activity—Selected measures INTEREST AND EXCHANGE RATES A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A67 Discount rates of foreign central banks A47 Industrial production—Indexes and gross value A67 Foreign short-term interest rates A49 Housing and construction A68 Foreign exchange rates A50 Consumer and producer prices A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables International Statistics SPECIAL TABLES SUMMARY STATISTICS A70 Terms of lending at commercial banks, A53 U.S. international transactions—Summary February 1986 A54 U.S. foreign trade A74 Assets and liabilities of foreign banks, A54 U.S. reserve assets September 30, 1985 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 1985 1985 1986 Ql Q2 Q3 Q4' Oct.' Nov.' Dec.' Jan. Feb. Reserves of depository institutions2 1 Total 17.4 12.2 16.4 12.1 4.0 20.0 21.9 4.8' 11.5 2 Required 16.9 12.3 17.1 11.1 1.6 15.4 18.8 3.4' 12.6 3 Nonborrowed 57.3 14.1 18.2 9.9 7.0 4.9 34.6 19.9' 8.7 4 Monetary base3 8.8 7.5 9.7 8.1 5.9 10.2 8.4 8.9 7.5 Concepts of money, liquid assets, and debt4 Ml 10.1 10.5 14.5 10.6 5.1 11.5 12.6 1.1 7.3 6 M2 11.7 6.3 9.5 6.0 4.2 5.8 7.0 1.4' 3.6 7 M3 10.1 5.5r 7.8' 6.4 5.1 5.6 7.1 8.2' 6.1 8 L 9.7 6.0 8.0 9.4 6.5 12.1 11.2 n.a. n.a. 9 Debt 13.7r 12.1' 12.9' 14.4 12.4 15.9 21.8 18.2 n.a. Nontransaction components 10 In M25 12.1 5.0 8.(K 4.5 3.9 3.9 5.3 1.4' 2.4 11 In M3 only6 4.2 2.6' .8' 7.7 8.5 5.2 7.0 35.7' 16.2 Time and savings deposits Commercial banks 12 Savings7 -5.8 -1.0 7.6 3.2 3.9 3.9 -3.8 2.9 2.9 n Small-denomination time8 .2 2.1 -3.3 -1.6 -2.2 .6 6.0 7.5 4.7 14 Large-denomination time9-10 2.7 6.9 -2.2 12.8 8.4 10.5 10.4 45.6 6.2 Thrift institutions 15 Savings7 1.4 3.8 12.9 7.5 10.9 7.4 .7 1.3 4.0 16 Small-denomination time 3.1 1.0 -2.8 -2.9 -4.6 .0 6.1 8.2' 8.4 17 Large-denomination time9 17.2 5.5 -1.0 5.2 6.2 2.3 8.5 6.9' 11.4 Debt components4 18 Federal 15.3' 12.6' 14.6 15.1 8.9 24.1 29.1 17.0 n.a. 19 Nonfederal 13.2'" 12.C 12.3' 14.2 13.4 13.4 19.6 18.5 n.a. 20 Total loans and securities at commercial banks11 10.3 9.7 9.6 8.8 2.0 16.4 16.6 15.3 4.1 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 based on monthly averages. Growth rates for debt reflect adjustments for adjusted as a whole. discontinuities over time in the levels of debt presented in other tables. 4. Composition of the money stock measures and debt is as follows: 5. Sum of overnight RPs and Eurodollars, money market fund balances Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults (general purpose and broker/dealer), MMDAs, and savings and small time of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits deposits less the estimated amount of demand deposits and vault cash held by at all commercial banks other than those due to domestic banks, the U.S. thrift institutions to service their time and savings deposit liabilities. government, and foreign banks and official institutions less cash items in the 6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents, process of collection and Federal Reserve float; and (4) other checkable deposits money market fund balances (institution-only), less a consolidation adjustment (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer that represents the estimated amount of overnight RPs and Eurodollars held by service (ATS) accounts at depository institutions, credit union share draft institution-only money market mutual funds. accounts, and demand deposits at thrift institutions. The currency and demand 7. Excludes MMDAs. deposit components exclude the estimated amount of vault cash and demand 8. Small-denomination time deposits—including retail RPs—are those issued deposits respectively held by thrift institutions to service their OCD liabilities. in amounts of less than $100,000. All IRA and Keogh accounts at commercial M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) banks and thrifts are subtracted from small time deposits. issued by all commercial banks and overnight Eurodollars issued to U.S. residents 9. Large-denomination time deposits are those issued in amounts of $100,000 by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts or more, excluding those booked at international banking facilities. (MMDAs), savings and small-denomination time deposits (time deposits—includ- 10. Large-denomination time deposits at commercial banks less those held by ing retail RPs—in amounts of less than $100,000), and balances in both taxable and money market mutual funds, depository institutions, and foreign banks and tax-exempt general purpose and broker/dealer money market mutual funds. official institutions. Excludes individual retirement accounts (IRA) and Keogh balances at depository 11. Changes calculated from figures shown in table 1.23. institutions and money market funds. Also excludes all balances held by U.S. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • May 1986 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week ending FFFaaaccctttooorrrsss 1985 1986 1986 Dec. Jan. Feb. Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 203,644 206,784 199,811 205,090 209,038 208,358 204,048 198,077 200,179 198,841 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 178,242 181,208 174,309 180,533 183,223 181,944 177,656 172,271 174,534 173,935 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 177,120 179,076 174,088 179,955 178,833 178,904 176,333 172,271 174,534 173,935 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 1,122 2,132 221 578 4,390 3,040 1,323 0 0 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,661 8,754 8,248 8,378 9,134 9,102 8,494 8,213 8,195 8,193 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,227 8,227 8,204 8,227 8,227 8,227 8,227 8,213 8,195 8,193 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 434 527 44 151 907 875 267 0 0 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 1,107 834 872 615 964 841 727 596 1,161 1,038 1111100000 FFFFFllllloooooaaaaattttt 1,176 758 1,056 506 320 979 1,432 1,131 1,046 1,159 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 14,458 15,230 15,326 15,058 15,397 15,492 15,739 15,866 15,243 14,516 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.................... 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,037 17,079 17,131 17,073 17,083 17,093 17,106 17,120 17,134 17,148 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 195,367 193,330 191,241 194,013 192,377 190,854 190,607 191,275 191,712 191,195 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 557 555 575 554 555 555 566 578 576 580 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,499 10,569 7,282 5,032 13,856 17,487 12,475 6,854 6,167 6,922 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 262 260 221 227 243 230 246 199 207 232 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 2,024 1,985 1,951 2,153 2,032 1,842 1,599 1,860 1,886 2,158 2222200000 OOOOOttttthhhhheeeeerrrrr 488 486 445 433 544 443 472 411 474 425 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,410 6,287 6,326 6,341 6,357 6,389 6,535 6,391 6,117 6,243 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 27,882 26,199 24,709 29,218 25,966 23,461 24,463 23,437 25,982 24,042 End-of-month figures Wednesday figures 1985 1986 1986 Dec. Jan. Feb. Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 210,598 205,146 200,473 206,093 212,436 206,883 201,309 201,509 202,179 200,013 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 181,327 178,992 176,536 181,192 185,100 180,703 173,091 175,087 175,011 175,870 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 177,798 175,905 176,536 181,192 179,142 178,139 173,091 175,087 175,011 175,870 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 3,529 3087 0 0 5,958 2,564 0 0 0 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 9,921 8,850 8,187 8,227 9,366 8,995 8,227 8,195 8,195 8,187 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,227 8,227 8,187 8,227 8,227 8,227 8,227 8,195 8,195 8,187 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 1,694 623 0 0 1,139 768 0 0 0 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 3,060 827 661 644 755 769 591 639 606 682 3333322222 FFFFFllllloooooaaaaattttt 988 663 -212 800 1,547 787 3,601 1,617 3,721 618 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 15,302 15,814 15,301 15,230 15,667 15,629 15,799 15,971 14,646 14,656 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 ............... 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 4,718 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,052 17,104 17,160 17,082 17,092 17,104 17,118 17,132 17,146 17,160 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 197,465 190,430 191,038 193,210 191,992 190,532 190,928 191,595 191,964 191,099 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 550 565 604 555 553 565 566 575 580 583 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 9,351 16,228 5,026 5,669 19,087 17,077 7,191 5,596 7,278 4,679 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 480 256 277 191 215 228 195 204 223 254 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,490 1,505 1,525 1,515 1,525 1,525 1,505 1,505 1,512 1,512 4444422222 OOOOOttttthhhhheeeeerrrrr 1,041 477 436 575 412 366 431 431 541 425 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 5,940 6,622 6,735 6,142 6,162 6,142 6,322 5,997 5,931 6,142 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 27,141 21,975 27,799 31,126 25,390 23,360 27,097 28,546 27,104 28,287 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 1983 1984 1985 1985 1986 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. 1 Reserve balances with Reserve Banks1 21,138 21,738 27,620 23,503 23,415 24,972 25,431 26,385 27,620 26,373 ? Total vault cash2 20,755 22,316 22,956 22,530 22,839 22,465 22,724 22,457 22,956 24,245 3 Vault cash used to satisfy reserve requirements3 . 17,908 18,958 20,522 19,300 19,548 19,475 20,038 19,997 20,522 21,687 4 Surplus vault cash4 2,847 3,358 2,434 3,230 3,291 2,990 2,686 2,460 2,434 2,559 5 Total reserves5 38,894 40,696 48,142 42,803 42,963 44,447 44,469 46,382 48,142 48,060 6 Required reserves 38,333 39,843 47,085 41,948 42,135 43,782 44,716 45,454 47,085 46,949 7 Excess reserve balances at Reserve Banks6 561 853 1,058 855 827 666 753 928 1,058 1,111 8 Total borrowings at Reserve Banks 774 3,186 1,318 1,107 1,073 1,289 1,187 1,741 1,318 770 9 Seasonal borrowings at Reserve Banks 96 113 56 167 221 203 172 107 56 36 10 Extended credit at Reserve Banks7 2 2,604 499 507 570 656 629 530 499 497 Biweekly averages of daily figures for weeks ending 1985 and 1986 Nov. 6 Nov. 20 Dec. 4 Dec. 18 Jan. 1 Jan. 15 Jan. 29 Feb. 12 Feb. 26 Mar. 12 11 Reserve balances with Reserve Banks1 25,643 26,242 27,029 27,503 27,928 28,282 24,710 23,924 24,989 27,110 1? Total vault cash2 22,151 22,528 22,543 22,464 23,612 23,591 24,684 26,078 24,348 22,577 13 Vault cash used to satisfy reserve requirements3 . 19,667 20,117 20,028 20,199 21,022 21,288 21,961 22,891 21,424 20,003 14 Surplus vault cash4 2,484 2,412 2,515 2,265 2,590 2,304 2,723 3,187 2,924 2,574 15 Total reserves5 45,310 46,359 47,057 47,702 48,950 49,570 46,671 46,815 46,413 47,113 16 Required reserves 44,508 45,466 46,005 46,875 47,644 48,294 45,753 45,629 45,406 46,146 17 Excess reserve balances at Reserve Banks6 802 893 1,052 828 1,307 1,276 918 1,187 1,008 967 18 Total borrowings at Reserve Banks 1,075 1,178 2,928 841 1,338 614 903 662 1,100 704 19 Seasonal borrowings at Reserve Banks 151 104 84 53 51 28 42 44 66 65 20 Extended credit at Reserve Banks7 598 522 503 524 472 471 529 480 506 475 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 1986 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17' Feb. 24 Mar. 3 Mar. 10 Mar. 17 One day and continuing contract 1 Commercial banks in United States 66,084 60,226 62,959r 68,513 64,533 65,474 67,344 74,710 70,119 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 31,603 31,327 30,857 32,246r 32,073 33,709 35,606 40,200 41,839 3 Nonbank securities dealers 8,784 9,777 9,581 8,802 9,956 11,690 10,825 9,486 9,918 4 All other 25,300 27,414 26,440 26,632 27,319 28,583 29,808 28,258 28,364 All other maturities 5 Commercial banks in United States 11,796 10,497 10,632 10,720 11,537 11,228 11,141 11,206 10,666 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 8,811 7,568 6,998 5,956r 6,296 6,336 7,420 7,535 7,635 7 Nonbank securities dealers 10,880 10,295 10,961 11,415 10,748 10,052 10,308 11,054 11,581 8 All other 9,130 9,411 10,002 10,387 11,185 10,874 10,844 10,676 10,093 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 30,072 29,125 31,054 28,443 28,433 29,360 29,047 32,275 30,337 10 Nonbank securities dealers 9,965 10,100 10,726 9,996 8,954 10,155 11,502 12,983 12,015 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 • May 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 3/26/86 date rate 3/26/86 rate 3/26/86 rate 3/26/86 rate Boston 7 3/07/86 IVi 7 IVi m 9 9Vi 3/07/86 New York 3/07/86 3/07/86 Philadelphia 3/07/86 3/07/86 Cleveland 3/10/86 3/10/86 Richmond 3/07/86 3/07/86 Atlanta 3/07/86 3/07/86 Chicago 3/07/86 3/07/86 St. Louis 3/07/86 3/07/86 Minneapolis 3/07/86 3/07/86 Kansas City .... 3/07/86 3/07/86 Dallas 3/07/86 3/07/86 San Francisco... 7 3/07/86 7Vi 7 m V/2 9 9l/i 3/07/86 Range of rates in recent years3 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 m 7l/2 1978—July 10 71/4 71/4 1981— Nov. 2 13-14 13 1974— Apr. 25 7Vi-8 8 Aug. 21 73/4 73/4 6 13 13 Dec. 3 1 9 0 6 73 7 8 V / 4 4 - 8 7 8 7 3 3 / / 4 4 O N Se c o p t v . t . . 2 1 2 1 2 6 0 S 8 '/ 8 m - 2 8 -9 ' / { : / 2 9 V 8 8 W V / i 2 1982— J D u e ly c. 2 2 4 0 3 11 l V l 1 ' i 2 / — 2 1 2 l l 1 l l 2 > l/ 2 /2 1975— Jan. 6 7'/4—73/4 73/4 3 9 Vi 9Vi Aug. 2 11-11'A 11 10 71/4-73/4 7'/4 3 11 11 24 71/4 71/4 1979—July 20 10 10 16 10'/> 10'/2 Feb. 5 7 63 6 /4 3 - /4 7 !/4 6 6 3 3 / / 4 4 Aug. 1 2 7 0 IO 1 - 0 I ! O /> '/ J l 1 O 0 '/il /2 2 3 7 0 10- 1 1 0 0 '/> 1 1 0 0 Mar. 10 6'/4-63/4 65/4 Sept. 19 lO'/i-ll 11 Oct. 12 9l/i—10 9V2 14 6V4 6'/4 21 11 11 13 9V2 91/2 May 16 6-6'/» 6 Oct. 8 11-12 12 Nov. 22 9-91/2 9 23 6 6 10 12 12 26 9 9 Dec. 14 8V2-9 9 1976— Jan. 19 51/2-6 5l/2 1980—Feb. 15 12-13 13 15 81/2-9 m 23 5Yl 51/2 19 13 13 17 8'/> 8 Vi Nov. 22 51/4-5^ 5V4 May 29 12-13 13 26 51/4 5'/4 30 12 12 1984— Apr. 9 8V2-9 9 June 13 11-12 11 13 9 9 1977— Aug. 30 5V4-53/4 51/4 16 11 11 Nov. 21 8'A-9 8 Vi 31 5'/4-53/4 53/4 July 28 10-11 10 26 8 Vi SVi Sept. 2 53/4 53/4 29 10 10 Dec. 24 8 8 Oct. 26 6 6 Sept. 26 11 11 Nov. 17 12 12 1985— May 20 7'/i-8 71/2 1978— Jan. 9 6-6 Vi 6V2 Dec. 5 12-13 13 24 71/z IVi 20 6V5 6V2 8 13 13 1986— Mar. 7 7-V/i 1 May 11 6'/2-7 1 5 13-14 14 10 1 1 12 7 1 July 3 7-7 'A 71/4 1981— May 8 14 14 In effect Mar. 26, 1986 1 1 1. A temporary simplified seasonal program was established on Mar. 8, 1985, 3. Rates for short-term adjustment credit. For description and earlier data see and the interest rate was a fixed rate V2 percent above the rate on adjustment the following publications of the Board of Governors: Banking and Monetary credit. The program was re-established on Feb. 18, 1986; the rate may be either Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980, the same as that for adjustment credit or a fixed rate Vi percent higher. 1981, and 1982. 2. Applicable to advances when exceptional circumstances or practices involve In 1980 and 1981, the Federal Reserve applied a surcharge to short-term only a particular depository institution and to advances when an institution is adjustment credit borrowings by institutions with deposits of $500 million or more under sustained liquidity pressures. As an alternative, for loans outstanding for that had borrowed in successive weeks or in more than 4 weeks in a calendar more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, into account rates on market sources of funds, but in no case will the rate charged 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was be less than the basic rate plus one percentage point. Where credit provided to a adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and particular depository institution is anticipated to be outstanding for an unusually to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective prolonged period and in relatively large amounts, the time period in which each Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for rate under this structure is applied may be shortened. See section 201.3(b)(2) of applying the surcharge was changed from a calendar quarter to a moving 13-week Regulation A. period. The surcharge was eliminated on Nov. 17, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyypp dd ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo tt ss ee ii rr tt vv ,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo oo ff ss ii dd tt ee ii pp nn oo ttee ss rr ii vv tt,, aa ll aa 55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts1* 7 12/30/76 $0—$31.7 million 3 12/31/85 9 Vi 12/30/76 1122 1122//3311//8855 $10 million-$100 million ll3/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million Wi 12/30/76 By original maturity Less than IV2 years 3 10/6/83 Time and savings2,3 IIVV22 yyeeaarrss oorr mmoorree 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 2Vl 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 2Vi 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 of foreign 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 $2.6 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 • May 1986 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 Percent per annum Savings and loan associations and Commercial banks mutual savings banks (thrift institutions)1 In effect Mar. 31, 1986 In effect Mar. 31, 1986 TTTyyypppeee ooofff dddeeepppooosssiiittt Percent Effective date Percent Effective date 1 Savings 5V2 1/1/84 5Vi 7/1/79 2 3 N M e o g n o e t y ia b m le a rk o e rd t e d r e o p f o s w it i t a h c d c r o aw un a t l accounts 0 ( ) 3 ) 12/ 1 1 / 4 1 / / 8 8 2 6 0 (2 ) ) m1u/1m/86 Time accounts 4 7-31 days <4) 1/1/86 (4) 9/1/86 1100//11//8833 1100//11//8833 1. Effective Oct. 1, 1983, restrictions on the maximum rates of interest payable balance of $2,500 not subject to interest rate restrictions. Effective Jan. 1, 1985, by commercial banks and thrift institutions on various categories of deposits were the minimum denomination and average balance maintenance requirements was removed. For information regarding previous interest rate ceilings on all catego- lowered to $1,000. Effective Jan. 1,1986, the minimum denomination and average ries of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the balance maintenance requirements were removed. No minimum maturity period Federal Home Loan Bank Board Journal, and the Annual Report of the Federal is required for this account, but depository institutions must reserve the right to Deposit Insurance Corporation. require seven days, notice before withdrawals. Depository institutions may not 2. Before Jan. 1, 1986, NOW accounts with minimum denomination require- guarantee a rate of interest for this account for a period longer than one month or ments of less than $1,000 were subject to an interest rate ceiling of 5'A percent. condition the payment of a rate on a requirement that the funds remain on deposit NOW accounts with minimum required denominations of $1,000 or more and for longer than one month. IRA/Keough (HR10) Plan accounts were not subject to interest rate ceilings. 4. Before Jan. 1, 1986, deposits of less than $1,000 were subject to an interest Effective Jan. 1, 1986, the minimum denomination requirement was removed. rate ceiling of 5'/i percent. Deposits of less than $1,000 issued to governmental 3. Effective Dec. 14, 1982, depository institutions are authorized to offer a new units were subject to an interest rate ceiling of 8 percent. Effective Jan. 1, 1986, account with a required initial balance of $2,500 and an average maintenance the minimum denomination requirement was removed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1985 1986 TTyyppee ooff ttrraannssaaccttiioonn 11998833 11998844 11998855 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 18,888 20,036 22,214 0 3,056 1,171 0 11,,118800 44,,551155 228866 7 Gross sales 3,420 8,557 4,118 0 0 0 265 0 0 225 Exchange 0 0 0 0 0 350 0 -350 0 0 4 Redemptions 2,400 7,700 3,500 200 0 0 0 0 0 0 Others within 1 year 5 Gross purchases 484 1,126 1,349 0 0 0 0 00 114433 00 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift 18,887 16,354 19,763 1,238 4,895 1,028 529 2,363 943 725 8 Exchange -16,553 -20,840 -17,717 -1,778 -3,275 -1,806 -942 -615 -1,529 -596 9 Redemptions 87 0 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,896 1,638 2,185 0 6 0 00 00 886688 00 11 Gross sales 0 0 0 0 0 0 0 0 00 0 17. Maturity shift -15,533 -13,709 -17,459 -1,153 -3,760 -1,028 -520 -1,731 -943 -703 13 Exchange 11,641 16,039 14,204 1,778 1,825 1,806 942 650 1,529 596 5 to 10 years 14 Gross purchases 890 536 458 0 6 0 00 00 334455 00 15 Gross sales 0 300 100 0 0 0 0 0 0 0 16 Maturity shift -2,450 -2,371 -1,857 -85 -1,136 0 -10 -600 0 -22 17 Exchange 2,950 2,750 2,184 0 800 0 0 184 0 0 Over 10 years 18 Gross purchases 383 441 293 0 0 0 00 00 119977 00 19 Gross sales 0 0 0 0 0 0 0 0 0 0 70 Maturity shift -904 -275 -447 0 0 0 0 -32 0 0 21 Exchange 1,962 2,052 1,679 0 650 0 0 131 0 0 All maturities 7? Gross purchases 22,540 23,776 26,499 0 3,068 1,171 0 11,,118800 6,068 228866 73 Gross sales 3,420 8,857 4,218 0 0 0 265 0 0 225 24 Redemptions 2,487 7,700 3,500 200 0 0 0 0 0 0 Matched transactions 75 Gross sales 578,591 808,986 866,175 60,980 64,263 73,925 100,929 8855,,448866 76,399 6633,,110099 26 Gross purchases 576,908 810,432 865,968 59,165 64,209 72,347 100,197 84,769 78,962 61,156 Repurchase agreements 7,7 Gross purchases 105,971 127,933 134,253 10,486 1,928 14,029 0 33,,668844 2233,,333388 2244,,225577 28 Gross sales 108,291 127,690 132,351 10,486 1,928 14,029 0 3,684 19,809 24,699 29 Net change in U.S. government securities 12,631 8,908 20,477 -2,015 3,014 -408 -997 463 12,159 -2,335 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 00 00 00 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 292 256 162 46 30 0 0 0 0 0 Repurchase agreements 33 Gross purchases 8,833 11,509 22,183 2,439 354 3,522 00 11,,445544 77,,664400 55,,338844 34 Gross sales 9,213 11,328 20,877 2,439 354 3,522 0 1,454 5,947 6,454 35 Net change in federal agency obligations -672 -76 1,144 -46 -30 0 0 0 1,693 -1,070 BANKERS ACCEPTANCES 36 Repurchase agreements, net -1,062 -418 0 0 0 0 0 0 0 0 37 Total net change in System Open Market Account 10,897 8,414 21,621 -2,061 2,984 -408 -997 463 13,853 -3,405 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 DomesticN onfinancial Statistics • May 1986 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1986 1985 1986 Jan. 29 Feb. 5 Feb. 12 Feb. 18 Feb. 26 Dec. Jan. Feb. 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 4,718 4,718 4,718 3 Coin 560 573 584 582 586 487 562 589 Loans 4 To depository institutions 769 591 639 606 682 3,060 827 661 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 00 00 00 00 00 00 00 Federal agency obligations 7 Bought outright 8,227 8,227 8,195 88,,119955 88,,118877 88,,222277 88,,222277 88,,118877 8 Held under repurchase agreements 768 0 0 0 0 1,694 623 0 U.S. government securities Bought outright 9 Bills 85,766 80,718 82,714 82,638 83,497 85,425 83,532 84,163 10 Notes 67,647 67,647 67,647 67,397 67,397 67,647 67,647 67,397 11 Bonds 24,726 24,726 24,726 24,976 24,976 24,726 24,726 24,976 12 Total bought outright1 178,139 173,091 175,087 175,011 175,870 177,798 175,905 176,536 13 Held under repurchase agreements 2,564 0 0 0 0 3,529 3,087 0 14 Total U.S. government securities 180,703 173,091 175,087 175,011 175,870 181,327 178,992 176,536 15 Total loans and securities 190,467 181,909 183,921 183,812 184,739 194,308 188,669 185,384 16 Items in process of collection 6,591 10,836 7,806 13,140 6,588 10,147 6,519 6,295 17 Bank premises 610 611 613 612 611 607 612 616 Other assets 18 Denominated in foreign currencies2 7,054 7,336 7,341 7,345 7,349 7,016 7,336 7,829 19 All other3 7,965 7,852 8,017 6,689 6,696 7,679 7,866 6,856 20 Total assets 229,055 224,925 224,090 227,988 222,377 236,052 227,372 223,377 LIABILITIES 21 Federal Reserve notes 174,553 174,949 175,622 175,980 175,108 181,450 174,453 175,072 Deposits 22 To depository institutions 24,885 28,602 30,051 28,616 2299,,779999 28,631 2233,,448800 2299,,332244 23 U.S. Treasury—General account 17,077 7,191 5,5% 7,278 4,679 9,351 16,228 5,026 24 Foreign—Official accounts 228 195 204 223 254 480 256 277 25 Other 366 431 431 541 425 1,041 477 436 26 Total deposits 42,556 36,419 36,282 36,658 35,157 39,503 40,441 35,063 27 Deferred credit items 5,804 7,235 6,189 9,419 5,970 9,159 5,856 6,507 28 Other liabilities and accrued dividends4 2,231 2,160 2,101 2,044 2,234 2,378 2,372 2,273 29 Total liabilities 225,144 220,763 220,194 224,101 218,469 232,490 223,122 218,915 CAPITAL ACCOUNTS 30 Capital paid in 1,789 1,789 1,789 1,793 1,799 1,781 1,789 1,800 1,781 1,781 1,781 1,781 1,781 1,781 1,781 1,781 32 Other capital accounts 341 592 326 313 328 0 680 881 33 Total liabilities and capital accounts 229,055 224,925 224,090 227,988 222,377 236,052 227,372 223,377 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 127,422 128,408 128,231 113322,,005566 113300,,110033 112255,,662244 112299,,115522 113311,,559999 Federal Reserve note statement 35 Federal Reserve notes outstanding 208,363 208,365 209,034 209,352 210,200 208,427 208, ,135 210,237 36 LESS: Held by bank 33,810 33,416 33,412 33,372 35,092 26,977 33,, 682 35,165 37 Federal Reserve notes, net 174,553 174,949 175,622 175,980 175,108 181,450 174,, 453 175,072 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 0 4,71 0 8 4,718 0 4,718 0 4,718 0 4,718 0 4,, 71 0 8 4,718 0 40 Other eligible assets 41 U.S. government and agency securities .. 158, 158,745 159,141 159,814 160,172 159,300 165,642 ,645 159,264 42 Total collateral. 174, 174,553 174,949 175,622 175,980 175,108 181,450 ,453 175,072 1. Includes securities loaned—fully guaranteed by U.S. government securities 4. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes (if any) securities sold and market exchange rates of foreign-exchange commitments. scheduled to be bought back under matched sale-purchase transactions. NOTE: Some of these data also appear in the Board's H.4.1 (503) release. For 2. Assets shown in this line are revalued monthly at market exchange rates. address, see inside front cover. 3. Includes special investment account at Chicago of Treasury bills maturing within 90 days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1986 1985 1986 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Dec. 31 Jan. 31 Feb. 28 1 Loans—Total 769 591 639 606 682 3,060 827 661 2 Within 15 days 763 583 634 600 668 3,033 820 647 3 16 days to 90 days 6 8 5 6 14 27 7 14 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 0 0 0 0 6 Within 15 days 0 0 0 0 0 0 0 0 7 16 days to 90 days 0 0 0 0 0 0 0 0 8 91 days to 1 year 0 0 0 0 0 0 0 0 9 U.S. government securities—Total 180,703 173,091 175,087 175,011 175,870 181,327 178,992 176,536 10 Within 15 days1 8,786 9,058 9,568 8,780 8,272 9,307 5,197 4,893 11 16 days to 90 days 44,084 38,672 39,525 42,542 42,348 43,462 46,616 45,663 12 91 days to 1 year 55,639 53,296 53,929 54,269 55,830 56,364 55,114 56,543 13 Over 1 year to 5 years 35,672 35,543 35,543 32,298 32,298 35,650 35,543 32,315 14 Over 5 years to 10 years 14,763 14,763 14,763 15,113 15,113 14,785 14,763 15,113 15 Over 10 years 21,759 21,759 21,759 22,009 22,009 21,759 21,759 22,009 16 Federal agency obligations—Total 8,995 8,227 8,195 8,195 8,187 9,921 8,850 8,187 17 Within 15 days1 885 32 58 199 331 1,836 740 331 18 16 days to 90 days 867 976 968 827 704 962 976 704 19 91 days to 1 year 1,763 1,739 1,749 1,749 1,744 1,471 1,654 1,744 20 Over 1 year to 5 years 3,868 3,868 3,808 3,808 3,821 4,056 4,250 3,821 21 Over 5 years to 10 years 1,203 1,203 1,203 1,203 1,178 1,187 821 1,178 22 Over 10 years 409 409 409 409 409 409 409 409 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • May 1986 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1985 1986 11998822 11998833 11998844 11998855 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. July Aug. Sept. Oct. Nov. Dec. Jan/ Feb. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS'' 11 TToottaall rreesseerrvveess22 34.28 36.14 39.08 45.19 42.61 43.19 43.51 43.65 44.38 45.19 45.36 45.80 22 NNoonnbboorrrroowweedd rreesseerrvveess 33.65 35.36 35.90 43.87 41.50 42.12 42.22 42.46 42.64 43.87 44.59 44.92 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt33 33.83 35.37 38.50 44.37 42.01 42.69 42.87 43.09 43.17 44.37 45.09 45.41 44 RReeqquuiirreedd rreesseerrvveess 33.78 35.58 38.23 44.13 41.75 42.37 42.84 42.90 43.45 44.13 44.25 44.72 55 MMoonneettaarryy bbaassee44 170.04 185.39 198.80 216.44 208.73 210.85 212.08 213.12 214.93 216.44 218.04 219.40 Not seasonally adjusted 6 Total reserves2 35.01 36.86 40.13 46.40 42.41 42.60 43.22 43.75 44.62 46.40 46.63 45.16 7 Nonborrowed reserves 34.37 36.09 36.94 45.09 41.30 41.52 41.93 42.56 42.88 45.09 45.86 44.28 8 Nonborrowed reserves plus extended credit3 34.56 36.09 39.55 45.59 41.81 42.09 42.59 43.19 43.41 45.59 46.36 44.77 9 Required reserves 34.51 36.30 39.28 45.35 41.55 41.77 42.56 42.99 43.70 45.35 45.52 44.08 10 Monetary base4 173.07 188.66 201.94 219.75 210.19 211.16 211.65 212.75 215.42 219.75 218.16 216.18 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.85 38.89 40.70 48.14 42.80 42.96 44.45 45.47 46.38 48.14 48.06 46.64 12 Nonborrowed reserves 41.22 38.12 37.51 46.82 41.70 41.89 43.16 44.28 44.64 46.82 47.29 45.75 13 Nonborrowed reserves plus extended credit3 41.41 38.12 40.09 47.41 42.23 42.50 43.83 44.90 45.07 47.41 47.79 46.20 14 Required reserves 41.35 38.33 39.84 47.08 41.95 42.14 43.78 44.72 45.45 47.08 46.95 45.55 15 Monetary base4 180.42 192.26 202.51 221.49 210.58 211.53 212.88 214.47 217.18 221.49 219.59 217.66 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 1986 1982 1983 1984 1985 Dec. Dec. Dec. Dec.' Nov.' Dec.' Jan.' Feb. Seasonally adjusted' 1 Ml 479.9 527.1 558.5 626.5 620.0 626.5 627.1 630.9 2 M2 1,952.6 2,186.0 2,373.8' 2,565.5 2,550.7 2,565.5 2,568.4 2,576.2 3 M3 2,443.5 2,697.3 2,986.5' 3,200.2 3,181.6 3,200.2 3,222.1 3,238.6 4 L 2,850.1 3,163.5 3,532.3' 3,835.5 3,800.0 3,835.5 n.a. n.a. 5 Debt 4,661.1' 5,191.9' 5,951.8' 6,802.7 6,681.5 6,802.7 6,905.7 n.a. Ml components 6 Currency2 134.3 148.3 158.5 170.6 169.8 170.6 171.9 172.9 7 Travelers checks3 4.3 4.9 5.2 5.9 5.9 5.9 5.9 6.0 8 Demand deposits4 237.9 242.7 248.4 271.5 267.8 271.5 268.9 269.2 9 Other checkable deposits5 103.4 131.3 146.3 178.5 176.6 178.5 180.4 183.0 Nontransactions components 10 In M26 1,472.7 1,658.9 1,815.4' 1,939.0 1,930.6 1,939.0 1,941.3 1,945.2 11 In M3 only7 490.9 511.3 612.7' 634.7 631.0 634.7 653.6 662.4 Savings deposits9 12 Commercial Banks 163.7 133.4 122.3 124.4 124.8 124.4 124.7 125.0 13 Thrift institutions 194.2 173.2 167.3 179.1 179.0 179.1 179.3 179.9 Small denomination time deposits9 14 Commerical Banks 380.4 351.1 387.2 384.1 382.2 384.1 386.5 388.0 15 Thrift institutions 472.4 434.1 500.3 496.2 493.7 496.2 499.6 503.1 Money market mutual funds 16 General purpose and broker/dealer 185.2 138.2 167.5 176.5 176.8 176.5 177.7 180.9 17 Institution-only 51.1 43.2 62.7 64.6 64.5 64.6 66.8 67.2 Large denomination time deposits10 18 Commercial Banks11 262.1 228.7 263.7 279.1 276.7 279.1 289.7 291.2 19 Thrift institutions 65.8 101.1 150.2 157.3 156.2 157.3 158.2 159.7 Debt components 20 Federal debt 979.2 1,173.0 1,367.3' 1,586.0 1,548.5 1,586.0 1,608.5 n.a. 21 Non-federal debt 3,681.8' 4,019.0' 4,584.6' 5,216.7 5,132.9 5,216.7 5,297.2 n.a. Not seasonally adjusted' 22 Ml 490.9 538.8 570.5 639.8 621.6 639.8 633.4 619.1 73 M2 1,958.6 2,192.8 2,380.8 2,573.6 2,549.0 2,573.6 2,577.2 2,569.5 7,4 M3 2,453.3 2,707.9 2,997.9' 3,212.9 3,185.1 3,212.9 3,229.7 3,230.5 25 L 2,856.4 3,170.1 3,537.5' 3,840.2 3,802.3 3,840.2 n.a. n.a. 26 Debt 4,655.7' 5,186.5' 5,946.2' 6,795.4 6,665.7 6,795.4 6,898.5 n.a. Ml components 27 Currency2 136.5 150.5 160.9 173.1 170.7 173.1 170.5 170.6 28 Travelers checks3 4.1 4.6 4.9 5.5 5.6 5.5 5.5 5.6 29 Demand deposits4 246.2 251.3 257.3 281.3 269.0 281.3 275.1 262.0 30 Other checkable deposits5 104.1 132.4 147.5 180.0 176.3 180.0 182.3 180.9 Nontransactions components 31 M2« 1,467.7 1,654.0 1,810.3 1,933.8 1,927.4 1,933.8 1,943.8 1,950.3 32 M3 only7 494.7 515.1 en.O' 639.3 636.1 639.3 652.6 661.1 Money market deposit accounts 33 Commercial banks 26.3 230.5 267.2 332.5 329.3 332.5 336.8 337.1 34 Thrift institutions 16.9 148.7 149.7 179.6 180.3 179.6 179.1 179.5 Savings deposits8 35 Commercial Banks 162.1 132.2 121.4 123.5 124.3 123.5 123.9 123.6 36 Thrift institutions 193.1 172.3 166.5 178.3 179.0 178.3 178.8 179.1 Small denomination time deposits9 37 Commercial Banks 380.1 351.1 387.6 384.8 384.2 384.8 386.5 386.9 38 Thrift institutions 471.7 434.2 501.2 497.7 496.4 497.7 502.8 504.9 Money market mutual funds 39 General purpose and broker/dealer 185.2 138.2 167.5 176.5 176.8 176.5 177.7 180.9 40 Institution-only 51.1 43.2 62.7 64.6 64.5 64.6 66.8 67.2 Large denomination time deposits10 41 Commercial Banks11 265.2 230.8 265.5 280.9 278.2 280.9 288.5 290.1 42 Thrift institutions 65.8 101.4 150.6 157.8 157.0 157.8 159.0 160.6 Debt components 43 Federal debt 976.4 1,170.2 1,364.7 1,583.7 1,544.2 1,583.7 1,606.7 n.a. 44 Non-federal debt 3,679.3' 4,016.3' 4,581.5' 5,211.6 5,121.5 5,211.6 5,291.8 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • May 1986 NOTES TO TABLE 1.21 1. Composition of the money stock measures and debt is as follows: 2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults commercial banks. Excludes the estimated amount of vault cash held by thrift of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits institutions to service their OCD liabilities. at all commercial banks other than those due to domestic banks, the U.S. 3. Outstanding amount of U.S. dollar-denominated travelers checks of nongovernment, and foreign banks and official institutions less cash items in the bank issuers. Travelers checks issued by depository institutions are included in process of collection and Federal Reserve float; and (4) other checkable deposits demand deposits. (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer 4. Demand deposits at commercial banks and foreign-related institutions other service (ATS) accounts at depository institutions, credit union share draft than those due to domestic banks, the U.S. government, and foreign banks and accounts, and demand deposits at thrift institutions. The currency and demand official institutions less cash items in the process of collection and Federal deposit components exclude the estimated amount of vault cash and demand Reserve float. Excludes the estimated amount of demand deposits held at deposits respectively held by thrift institutions to service their OCD liabilities. commercial banks by thrift institutions to service their OCD liabilities. M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) 5. Consists of NOW and ATS balances at all depository institutions, credit issued by all commercial banks and overnight Eurodollars issued to U.S. residents union share draft balances, and demand deposits at thrift institutions. Other by foreign branches of U.S. banks worldwide, MMDAs, savings and small- checkable deposits seasonally adjusted equals the difference between the seasondenomination time deposits (time deposits—including retail RPs—in amounts of ally adjusted sum of demand deposits plus OCD and seasonally adjusted demand less than $100,000), and balances in both taxable and tax-exempt general purpose deposits. Included are all ceiling free "Super NOWs," authorized by the and broker/dealer money market mutual funds. Excludes individual retirement Depository Institutions Deregulation committee to be offered beginning Jan. 5, accounts (IRA) and Keogh balances at depository institutions and money market 1983. funds. Also excludes all balances held by U.S. commercial banks, money market 6. Sum of overnight RPs and overnight Eurodollars, money market fund funds (general purpose and broker/dealer), foreign governments and commercial balances (general purpose and broker/dealer), MMDAs, and savings and small banks, and the U.S. government. Also subtracted is a consolidation adjustment time deposits, less the consolidation adjustment that represents the estimated that represents the estimated amount of demand deposits and vault cash held by amount of demand deposits and vault cash held by thrift institutions to service thrift institutions to service their time and savings deposits. their time and savings deposits liabilities. M3: M2 plus large-denomination time deposits and term RP liabilities (in 7. Sum of large time deposits, term RPs and term Eurodollars of U.S. amounts of $100,000 or more) issued by commercial banks and thrift institutions, residents, money market fund balances (institution-only), less a consolidation term Eurodollars held by U.S. residents at foreign branches of U.S. banks adjustment that represents the estimated amount of overnight RPs and Eurodolworldwide and at all banking offices in the United Kingdom and Canada, and lars held by institution-only money market funds. balances in both taxable and tax-exempt, institution-only money market mutual 8. Savings deposits exclude MMDAs. funds. Excludes amounts held by depository institutions, the U.S. government, 9. Small-denomination time deposits—including retail RPs— are those issued money market funds, and foreign banks and official institutions. Also subtracted is in amounts of less than $100,000. All individual retirement accounts (IRA) and a consolidation adjustment that represents the estimated amount of overnight RPs Keogh accounts at commercial banks and thrifts are subtracted from small time and Eurodollars held by institution-only money market mutual funds. deposits. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 10. Large-denomination time deposits are those issued in amounts of $100,000 Treasury securities, commercial paper and bankers acceptances, net of money or more, excluding those booked at international banking facilities. market mutual fund holdings of these assets. 11. Large-denomination time deposits at commercial banks less those held by Debt: Debt of domestic nonfinancial sectors consists of outstanding credit money market mutual funds, depository institutions, and foreign banks and market debt of the U.S. government, state and local governments, and private official institutions. nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- NOTE: Latest monthly and weekly figures are available from the Board's H.6 sumer credit (including bank loans), other bank loans, commercial paper, bankers (508) release. Historical data are available from the Banking Section, Division of acceptances, and other debt instruments. The source of data on domestic Research and Statistics, Board of Governors of the Federal Reserve System, nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt Washington, D.C. 20551. data are based on monthly averages. 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 1986 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11998833llrr 1199884411'' 11998855"" Aug. Sept. Oct/ Nov. Dec. Jan. Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 109,642.3 128,440.8 154,556.0 147,455.5 159,593.3 162,205.4 163,038.1 189,203.0 169,894.2 2 Major New York City banks 47,769.4 57,392.7 70,445.1 65,645.6 72,765.4 76,706.3 77,069.6 89,415.1 79,324.3 3 Other banks 61,873.1 71,048.1 84,110.9 81,809.9 86,827.9 85,499.2 85,968.5 99,787.9 90,569.9 4 ATS-NOW accounts3 1,405.5 1,588.7 1,920.8 2,008.8 2,465.3 2,212.7 2,227.8 2,452.5 2,027.5 5 Savings deposits4 741.4 633.1 539.0 550.7 509.1 562.0 533.4 418.6 362.4 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 379.7 434.4 496.5 469.6 510.9' 513.2 508.1 581.9 531.8 7 Major New York City banks 1,528.0 1,843.0 2,168.9 1,965.4 2,326.3' 2,422.2 2,368.5 2,567.0 2,306.3 8 Other banks 240.9 268.6 301.8 291.5 308.9' 300.6 298.1 343.7 317.7 9 ATS-NOW accounts3 15.6 15.8 16.7 17.1 20.6 18.4 18.2 19.8 16.1 10 Savings deposits4 5.4 5.0 4.5 4.6 4.2 4.6 4.3 3.4 2.9 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 109,517.6 128,059.1 154,108.4 152,985.1 148,788.8 167,639.3 157,070.9 192,060.0 180,495.6 12 Major New York City banks 47,707.4 57,282.4 70,400.9 68,401.8 68,967.9 78,010.5 73,982.4 92,551.5 84,880.9 13 Other banks 64,310.2 70,776.9 83,707.8 84,583.3 79,820.9 89,628.8 83,088.6 99,508.5 95,614.7 14 ATS-NOW accounts3 1,397.0 1,579.5 1,903.4 1,770.5 2,289.9 2,157.7 2,007.8 2,354.4' 2,406.1 15 MMDA5 567.4 848.8 1,179.0 1,201.2 1,192.2 1,293.0 1,221.5 1,493.2 1,543.8 16 Savings deposits4 742.0 632.9 538.7 538.4 490.1 579.9 496.3 405.3 392.4 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 379.9 433.5 497.4 499.3 475.(K 532.1 489.3 574.9 554.2 18 Major New York City banks 1,510.0 1,838.6 2,191.1 2,189.4 2,216.6 2,507.4 2,332.4 2,594.1 2,393.7 19 Other banks 240.5 267.9 301.6 307.4 282.9' 315.7 287.2 333.4 329.4 20 ATS-NOW accounts3 15.5 15.7 16.6 15.3 19.4 18.1 16.4 18.8 18.9 21 MMDA5 2.8 3.5 3.8 3.8 3.7 4.0 3.7 4.5 4.6 22 Savings deposits4 5.4 5.0 4.5 4.5 4.1 4.8 4.0 3.3 3.2 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSAs that were available through June states and political subdivisions. 1977. Historical data for ATS-NOW and savings deposits are available back to 3. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- July 1977. Back data are available on request from the Banking Section, Division counts authorized for automatic transfer to demand deposits (ATS). ATS data of Research and Statistics, Board of Governors of the Federal Reserve System, availability starts with December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts, MMDA and special club accounts, such These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • May 1986 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1985 1986 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.' Feb. Seasonally adjusted 1 Total loans and securities2 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 1,895.5 1,919.6 1,926.4 2 U.S. government securities 267.1 261.4 266.3 267.1 271.6 271.4 273.1 270.0 275.0 270.7 264.6 270.8 3 Other securities 138.9 140.2 142.2 144.5 145.4 148.2 151.3 154.8 160.7 174.5 189.6 184.9 4 Total loans and leases2 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 1,450.3 1,465.4 1,470.7 5 Commercial and industrial 481.2 481.9 484.3 484.3 484.1 485.7 487.2 487.0 490.6 493.9 494.2 495.3 6 Bankers acceptances held3.. 6.4 5.4 4.9 4.7 5.1 5.0 4.7 4.7 4.9 5.2 5.3 4.8 7 Other commercial and industrial 474.9 476.5 479.3 479.6 479.0 480.7 482.5 482.3 485.7 488.6 489.0 490.5 8 U.S. addressees4 464.2 465.8 469.2 470.1 469.6 471.1 473.3 473.7 477.3 479.8 479.1 480.8 9 Non-U.S. addressees4 10.7 10.7 10.1 9.5 9.4 9.6 9.2 8.6 8.4 8.8 9.9 9.7 10 Real estate 386.7 390.8 394.8 398.7 403.7 407.1 409.9 414.5 419.2 423.2 426.1 431.1 11 Individual 262.9 266.5 269.9 272.7 276.3 278.5 280.3 281.3 283.8 286.5 289.4 292.5 12 Security 32.8 35.1 37.5 40.0 40.3 36.7 38.2 37.9 37.8' 38.7' 43.1 41.8 13 Nonbank financial institutions 30.5' 31.0»- 31.4' 31.1' 31.4' 32.1' 32.3' 32.0' 32.8' 34.1' 33.7 32.2 14 Agricultural 39.5 39.4 39.4 39.4 39.6 39.6 40.1 40.3 40.5 40.8 40.9 41.0 15 State and political subdivisions 47.0 47.2 47.5 47.5 47^ 48.8 48.8 49.3 50.0 52.4 58.3 58.1 16 Foreign banks 11.2 10.9 10.7' 10.4' 10.5' 10.2 10.0' 9.7' 9.6 9.6' 9.6 9.8 17 Foreign official institutions ... 6.9' 6.9' 6.9' 6.7' 6.6' 6.4' 6.6' 6.8' 6.9' 7.<X 7.0 7.0 18 Lease financing receivables... 16.1 16.4 16.7 17.0 17.3 17.5 17.6 17.7 17.9 18.2 18.7 18.9 19 All other loans 40.8' 40^ 40.9' 43.3' 44.4' 46.5' 46.0' 43.2' 44.9' 46.2' 44.5 42.9 Not seasonally adjusted 20 Total loans and securities2 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 1,908.5 1,929.0 1,924.4 21 U.S. government securities 269.2 266.9 268.4 270.8 271.4 269.8 270.7 266.9 270.6 267.2 264.5 271.8 22 Other securities 139.1 139.9 142.8 144.2 144.0 147.7 150.7 154.2 160.8 176.5 190.8 185.2 23 Total loans and leases2 1,349.4 1,362.3 1,373.4 1,388.6 1,397.2 1,404.6 1,418.4 1,424.9 1,439.4 1,464.8 1,473.7 1,467.4 24 Commercial and industrial.... 480.8 482.1 482.8 482.8 483.2 483.5 487.2 488.0 491.0 497.3 496.4 494.9 25 Bankers acceptances held3.. 6.3 5.5 4.9 4.8 5.0 4.9 44..66 44..66 44..88 55..55 55..44 44..77 26 Other commercial and industrial 474.5 476.6 477.9 477.9 478.2 478.6 482.6 483.4 486.2 491.8 491.0 490.1 27 U.S. addressees4 464.3 466.7 468.3 468.6 468.7 469.0 473.1 474.3 477.1 481.8 481.0 481.0 28 Non-U.S. addressees4.... 10.2 9.9 9.6 9.3 9.5 9.6 9.4 9.1 9.1 10.0 10.0 9.1 29 Real estate 385.6 389.5 393.8 398.1 403.1 407.3 411.2 415.9 420.3 423.8 426.8 430.6 30 Individual 260.7 264.3 267.7 270.7 274.5 278.3 281.5 283.4 285.8 290.0 292.2 292.2 31 Security 32.2 35.0 36.0 39.9 38.3 35.8 36.7 37.7 3399..77 4433..33 4444..55 4400..66 32 Nonbank financial institutions 30.5' 31.1' 31.2' 31.1' 31.5' 32.3' 32.4' 32.(K 32.7' 34.2' 33.7 31.9 3333 Agricultural 38.6 38.8 39.3 39.9 40.4 40.5 40.9 40.9 4400..66 4400..44 4400..33 4400..11 34 State and political subdivisions 47.0 47.2 47.5 47.5 47.9' 48.8 48.8 49.3 50.0 52.4 58.3 58.1 3355 Foreign banks 11.0 10.6' 10.4' 10.1' 10.3 10.0' 10.1 lO.O' 9.9' 10.1 9.8 9.8 36 Foreign official institutions ... 6.9' 6.9' 6.9' 6.7' 6.6' 6.4' 6.6' 6.8' 6.9' 7.0' 7.0 7.0 37 Lease financing receivables... 16.3 16.4 16.7 16.9 17.2 17.4 17.5 17.6 17.7 18.1 18.9 19.2 38 All other loans 39.9' 40.4' 41.1' 44.9' 44.2' 44.4' 45.5' 43.4' 44.7' 48.C 45.8 43.0 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 1985 1986 SSoouurrccee Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.' Jan.' Feb. Total nondeposit funds 1 Seasonally adjusted2 108.1' 100.8' 107.9' 109.6' 105.2' 108.8' 110.9' 114.4' 117.4' 122.6 125.4 126.1 2 Not seasonally adjusted 112.6 104.1 112.3 110.9' 104.2' 110.5' 111.8' 115.5' 120.9' 124.6 127.8 131.1 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 138.4' 134.3'' 137.9' 143.7' 143.6' 140.1' 140.9' 141.1' 146.C 150.2 147.1 148.3 4 Not seasonally adjusted 142.9 137.6 142.3 145.0 142.7' 141.7' 141.7' 142.2' 149.5' 152.3 149.5 153.3 5 Net balances due to foreign-related institutions, not seasonally adjusted -30.3 -33.5 -30.0 -34.2 -38.5 -31.2 -30.0 -26.7 -28.6 -27.7 -21.7 -22.2 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -29.5 -32.4 -29.5 -32.5 -38.3 -32.8 -30.7 -28.7 -30.3 -31.6 -28.0 -25.8 7 Gross due from balances 71.4 74.8 74.5 76.4 79.2 75.8 74.7 74.2 74.1 76.1 74.5 69.5 8 Gross due to balances 41.9 42.4 44.9 44.0 40.8 43.0 44.0 45.4 43.8 44.5 46.4 43.7 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 -.8 -1.1 -.4 -1.7 -.1 1.6 .7 2.0 1.7 4.0 6.3 3.5 10 Gross due from balances 53.4 51.9 52.5 53.9 55.1 55.3 56.1 55.3 55.9 56.7 57.8 60.3 11 Gross due to balances 52.7 50.8 52.1 52.2 55.0 56.9 56.8 57.3 57.6 60.7 64.1 63.9 Security RP borrowings 12 Seasonally adjusted® 83.2 80.8 81.4 83.5' 83.7' 83.3' 85.3' 84.7' 84.8' 88.0 86.1 87.7 13 Not seasonally adjusted 85.2 81.7 83.4' 82.3 80.4' 82.6' 83.7' 83.4' 85.9' 87.7 86.1 90.3 U.S. Treasury demand balances7 14 Seasonally adjusted 12.7 15.0 20.3 16.9 20.5 16.1 14.9 4.7 13.5 17.5 19.0 21.1 15 Not seasonally adjusted 12.8 15.4 20.9 14.9 23.1 13.4 16.8 5.4 7.9 14.6 24.0 24.2 Time deposits, $100,000 or more8 16 Seasonally adjusted 330.1 333.6 330.4 328.9 324.2 327.2 330.8' 333.9' 335.9' 337.6 349.4 351.7 17 Not seasonally adjusted 330.7 330.5 329.6 327.2 323.2 327.7 332.7 336.3' 337.5' 339.4 348.3 350.5 1. Commercial banks are those in the 50 states and the District of Columbia 3. Other borrowings are borrowings on any instrument, such as a promissory with national or state charters plus agencies and branches of foreign banks, New note or due bill, given for the purpose of borrowing money for the banking York investment companies majority owned by foreign banks, and Edge Act business. This includes borrowings from Federal Reserve Banks and from foreign corporations owned by domestically chartered and foreign banks. banks, term federal funds, overdrawn due from bank balances, loan RPs, and Data for lines 1-4 and 12-17 have been revised in light of benchmarking and participations in pooled loans. revised seasonal adjustment. 4. Averages of daily figures for member and nonmember banks. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 5. Averages of daily data. nonbanks and not seasonally adjusted net Eurodollars. Includes averages of 6. Based on daily average data reported by 122 large banks. Wednesday data for domestically chartered banks and averages of current and 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at previous month-end data for foreign-related institutions. commercial banks. Averages of daily data. 8. Averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • May 1986 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1985 1986 AAccccoouunntt Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. ALL COMMERCIAL BANKING INSTITUTIONS1 1 Loans and securities 1,899.2 1,908.6 1,927.3 1,948.5 1,952.1 1,969.9 1,979.1 2,027.7 2,059.3 2,057.9 2,071.7 2 Investment securities 383.9 390.3 392.1 392.3 393.7 397.0 396.3 404.6 413.6 427.2 427.3 3 U.S. government securities 250.4 254.4 255.3 256.1 254.2 254.4 249.3 251.8 249.9 249.0 252.1 4 Other 133.5 135.9 136.8 136.2 139.6 142.6 147.0 152.8 163.6 178.3 175.1 5 Trading account assets 23.5 23.5 23.1 22.3 24.2 26.4 25.0 32.0 31.1 30.1 33.9 6 Total loans 1,491.8 1,494.9 1,512.1 1,534.0 1,534.1 1,546.5 1,557.8 1,591.2 1,614.6 1,600.6 1,610.4 7 Interbank loans 130.9 124.0 123.1 133.0 128.6 129.1 131.7 147.0 149.6 136.5 139.2 8 Loans excluding interbank 1,360.9 1,370.8 1,388.9 1,401.0 1,405.5 1,417.5 11,,442266..11 1,444.1 1,465.0 1,464.1 1,471.2 9 Commercial and industrial 482.1 483.4 484.3 485.9 484.6 489.2 448888..88 493.1 495.9 496.9 502.1 10 Real estate 390.7 395.8 400.0 405.6 409.3 412.8 418.3 421.8 425.0 428.6 431.6 11 Individual 265.2 268.5 272.1 276.1 280.0 282.1 285.1 286.8 291.1 292.7 292.3 12 All other 222.9 223.0 232.6 233.4 231.5 233.4 233.9 242.5 253.0 245.8 245.1 13 Total cash assets 187.6 202.3 190.4 198.0 188.4 188.2 190.1 207.7 211.6 188.1 194.6 14 Reserves with Federal Reserve Banks 22.9 20.7 21.6 21.0 24.5 24.9 19.6 20.5 27.6 22.0 26.3 15 Cash in vault 21.3 23.3 22.2 22.0 22.7 22.1 22.6 21.4 22.2 23.0 22.6 16 Cash items in process of collection ... 64.2 76.5 68.4 70.5 62.5 61.4 67.9 81.9 79.3 63.9 66.7 17 Demand balances at U.S. depository institutions 30.2 35.2 31.3 33.5 30.6 30.8 31.6 35.8 36.1 31.4 31.9 18 Other cash assets 49.0 46.6 46.8 51.0 48.2 49.1 48.4 48.1 46.5 47.8 47.1 19 Other assets 188.6 183.4 189.4 194.5 180.8 185.8 178.1 185.0 189.4 178.0 177.1 20 Total assets/total liabilities and capital... 2,275.4 2,294.2 2,307.1 2,341.1 2,321.3 2,344.0 2,347.3 2,420.5 2,460.3 2,424.0 2,443.3 21 Deposits 1,638.5 1,661.5 1,659.8 1,685.0 1,676.9 1,683.0 1,705.6 1,743.9 1,763.6 1,729.5 1,736.9 22 Transaction deposits 465.6 480.3 474.0 492.3 475.4 474.9 491.4 521.9 536.4 488.2 491.4 23 Savings deposits 410.1 418.7 425.6 434.3 436.4 438.3 443.8 448.4 450.0 451.9 455.1 24 Time deposits 762.9 762.5 760.1 758.4 765.0 769.8 770.4 773.6 777.1 789.4 790.5 25 Borrowings 310.3 305.4 315.8 321.6 308.9 323.2 309.0 350.8 361.5 359.7 370.2 26 Other liabilities 175.6 176.0 179.7 181.1 182.0 183.6 177.9 170.6 178.5 177.9 178.7 27 Residual (assets less liabilities) 150.9 151.3 151.8 153.4 153.4 154.1 154.8 155.1 156.7 156.9 157.6 MEMO 28 U.S. government securities (including trading account) 266.7 269.3 271.0 270.0 268.3 271.5 265.1 271.7 265.7 266.9 275.4 29 Other securities (including trading account) 140.7 144.4 144.3 144.6 149.7 151.9 156.2 164.9 178.9 190.4 185.8 DOMESTICALLY CHARTERED COMMERCIAL BANKS2 30 Loans and securities 1,799.6 1,812.7 1,829.2 1,847.9 1,850.8 1,863.6 1,872.3 1,917.7 1,944.2 1,943.6 1,953.8 31 Investment securities 377.1 383.8 385.1 385.1 386.5 389.1 388.1 396.6 405.9 417.3 416.9 32 U.S. government securities 246.4 250.7 251.4 252.4 250.4 250.5 245.0 248.0 246.0 244.9 247.6 33 Other 130.7 133.1 133.8 132.7 136.0 138.6 143.1 148.7 159.9 172.4 169.3 34 Trading account assets 23.5 23.5 23.1 22.3 24.2 26.4 25.0 32.0 31.1 30.1 33.9 35 Total loans 1,399.0 1,405.5 1,420.9 1,440.5 1,440.1 1,448.1 1,459.2 1,489.1 1,507.2 1,496.3 1,503.0 36 Interbank loans 103.3 100.6 100.6 110.0 104.7 103.8 106.8 121.1 121.2 113.0 112.6 37 Loans excluding interbank 1,295.7 1,304.9 1,320.3 1,330.5 1,335.5 1,344.2 1,352.4 1,368.0 1,386.0 1,383.3 1,390.3 38 Commercial and industrial 436.5 436.6 436.0 437.6 435.7 437.9 437.4 440.0 442.0 439.7 443.4 39 Real estate 385.4 390.4 394.4 399.9 403.7 407.0 412.7 416.3 419.4 423.1 426.1 40 Individual 265.0 268.3 271.8 275.9 279.8 281.8 284.8 286.5 290.9 292.5 292.0 41 All other 208.7 209.6 218.1 217.2 216.3 217.5 217.5 225.2 233.7 228.0 228.8 42 Total cash assets 176.0 191.2 179.2 185.3 176.4 176.1 178.0 195.8 199.3 173.2 181.2 43 Reserves with Federal Reserve Banks 22.3 19.6 20.9 20.4 23.8 24.4 18.6 19.5 26.1 21.2 25.8 44 Cash in vault 21.3 23.2 22.2 22.0 22.6 22.0 22.6 21.4 22.2 23.0 22.6 45 Cash items in process of collection ... 63.9 76.2 68.2 70.3 62.2 61.1 67.7 81.6 79.0 63.5 66.3 46 Demand balances at U.S. depository institutions 28.8 33.8 29.8 32.2 29.0 29.4 30.2 34.0 34.4 29.6 30.3 47 Other cash assets 39.6 38.3 38.1 40.4 38.8 39.2 38.9 39.2 37.7 35.9 36.2 48 Other assets 137.5 131.5 137.7 144.9 132.6 133.3 132.0 137.1 141.2 130.0 126.3 49 Total assets/total liabilities and capital ... 2,113.1 2,135.4 2,146.2 2,178.1 2,159.8 2,173.0 2,182.3 2,250.6 2,284.8 2,246.8 2,261.3 50 Deposits 1,593.8 1,618.4 1,617.2 1,642.3 1,631.9 1,636.6 1,659.5 1,697.5 1,716.7 1,681.2 1,690.0 51 Transaction deposits 459.3 473.8 467.7 486.0 468.9 468.3 484.9 515.2 529.3 481.3 484.4 52 Savings deposits 408.9 417.5 424.3 432.9 435.1 436.9 442.4 446.9 448.5 450.4 453.5 53 Time deposits 725.6 727.1 725.2 723.3 727.9 731.4 732.2 735.4 738.9 749.5 752.1 54 Borrowings 248.5 246.1 253.8 258.4 249.6 259.0 248.0 280.5 290.0 292.2 299.2 55 Other liabilities 122.6 122.4 126.1 126.8 127.4 125.9 122.7 120.2 124.0 119.1 117.2 56 Residual (assets less liabilities) 148.3 148.6 149.1 150.7 150.8 151.5 152.2 152.5 154.0 154.3 154.9 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 1985 Dec. 31r Jan. 8r Jan. 15' Jan. 22' Jan. 29r Feb. 5' Feb. 12 Feb. 19 Feb. 26 1 Cash and balances due from depository institutions 121,656 94,548 108,045 105,136 87,240 96,227 92,878 107,548 2 Total loans, leases and securities, net 926,784 922,826 929,073 915,757 913,194 918,752 916,090 927,072 3 U.S. Treasury and government agency 82,336 83,847 83,903 86,005 87,106 89,218 90,329 93,194 4 Trading account 13,476 14,440 15,315 17,284 17,954 20,774 21,054 22,033 5 Investment account, by maturity 68,860 69,407 68,588 68,722 69,152 68,443 69,275 71,160 6 One year or less 17,938 18,393 18,384 18,387 18,380 18,347 18,325 18,463 7 Over one through five years 33,221 33,922 32,932 32,909 32,946 32,707 33,448 35,138 8 Over five years 17,700 17,091 17,272 17,425 17,825 17,389 17,502 17,560 9 Other securities 79,245 77,780 76,759 75,760 75,130 73,941 73,016 72,450 10 Trading account 11,989 9,661 8,837 8,154 7,860 7,339 6,616 6,460 11 Investment account 67,256 68,119 67,922 67,606 67,270 66,602 66,400 65,991 12 States and political subdivisions, by maturity 61,518 62,348 62,140 61,872 61,528 61,078 60,812 60,416 1 1 3 4 O O n v e e r y o e n a e r o y r e a l r e ss 5 1 0 1 , , 4 0 8 3 4 4 5 1 1 1 , , 1 1 6 8 0 8 5 1 0 1 , , 9 2 0 3 8 1 5 1 0 1 , , 7 1 5 2 1 1 5 1 0 1 , , 0 4 9 3 8 0 4 1 9 1 , , 4 6 4 3 0 8 4 1 9 1 , , 1 7 0 0 9 3 4 1 8 1 , , 8 5 2 8 7 9 15 Other bonds, corporate stocks, and securities 5.738 5,772 5,782 5,734 5,742 5,524 5,588 5,574 16 Other trading account assets 4,762 5,388 4,531 4,199 4,283 4,150 3,657 4,303 17 Federal funds sold1 61,064 61,039 67,645 59,704 60,963 62,788 62,085 63,570 18 To commercial banks 39,666 35,911 40,842 36,103 36,636 37,727 38,195 38,110 19 To nonbank brokers and dealers in securities 14,815 16,345 17,360 15,398 16,150 16,168 14,778 16,137 20 To others 6,582 8,782 9,444 8,203 8,177 8,893 9,112 9,322 21 Other loans and leases, gross2 717,991 713,521 714,955 708,887 704,456 707.653 706,012 712,636 22 Other loans, gross2 702,606 698,036 699,363 693,248 688,776 692,051 690,249 696,860 23 Commercial and industrial2 260,190 258,608 257,664 256,566 254.754 255,950 256,471 256,669 24 Bankers acceptances and commercial paper 2,011 1,891 2,139 2,118 1,999 2,106 2,026 2,224 25 All other 258,179 256,717 255,524 254,448 252.755 253,845 254,445 254,445 26 U.S. addressees 253,286 251,892 250,646 249,643 248,053 249,062 249,725 249,733 27 Non-U.S. addressees 4,892 4,825 4,879 4,805 4,702 4,782 4,720 4,712 28 Real estate loans2 179,419 180,675 180,835 180,813 182,004 182,060 182,729 183,240 29 To individuals for personal expenditures 133,568 133,424 133,013 132,978 133,202 133,023 132,832 133,118 30 To depository and financial institutions 44,809 42,132 42,421 41,839 41,046 41,991 41,611 42,742 31 Commercial banks in the United States 12,475 11,233 11,767 12,022 11,731 12,589 12,399 12,676 32 Banks in foreign countries 5.739 5,414 5,351 5,458 5,2% 5,484 4,951 5,972 33 Nonbank depository and other financial institutions . 26,595 25,485 25,303 24,359 24,019 23,918 24,261 24,095 34 For purchasing and carrying securities 19,684 20,966 23,211 18,231 16,545 17,497 15,980 19,021 35 To finance agricultural production 6,746 6,663 6,548 6,484 6,463 6,463 6,358 6,312 36 To states and political subdivisions 36,201 36,691 36,816 37,114 37,015 36,790 36,748 36,819 37 To foreign governments and official institutions 3,217 3,281 3,179 3,069 3,000 3,032 3,376 3,476 38 All other 18,772 15,595 15,676 16,156 14,747 15,243 14,144 15,462 39 Lease financing receivables 15,385 15,484 15,592 15,639 15,680 15,602 15,763 15,777 40 LESS: Unearned income 5,055 5,093 5,081 5,097 5,077 5,027 5,018 5,056 41 Loan and lease reserve2 13,559 13,656 13.639 13,701 13,667 13,972 13,990 14,026 42 Other loans and leases, net2 699,376 694,772 696,235 690,089 685,712 688.654 687,003 693,555 43 All other assets 139,216 129,157 131,523 125,253 122,962 123,862 121,921 123,047 44 Total assets 1,187,656 1,146,532 1,168,641 1,146,146 1,123,396 1,138,840 1,130,890 1,157,667 45 Demand deposits 254,202 209,130 222,547 211,637 193,226 205,785 194,237 215,950 46 Individuals, partnerships, and corporations 192,603 161,574 166,913 158,389 146,856 153,294 149,333 162,027 47 States and political subdivisions 6,348 5,350 5,997 5,454 4,807 5,730 4,564 5,473 48 U.S. government 1,582 2,706 4,556 3,020 2,682 4,979 2,709 2,034 49 Depository institutions in United States 30,719 23,176 26,393 26,637 22,442 23,844 22,070 28,028 5 5 0 1 B Fo a r n e k i s g n i n g f o o v r e e r ig n n m c e o n u ts n t a r n ie d s official i .• n s • t • i .• tu • t • i . o ns 7 1 , , 3 0 8 9 5 0 5,6 9 2 6 0 0 6 1 , , 1 0 6 2 6 6 6,9 9 0 5 6 6 5 1, ,3 20 2 0 2 5,3 8 9 8 8 8 5,3 7 0 6 2 3 7,0 8 1 4 4 3 52 Certified and officers' checks 14,474 9,745 11,496 10,274 9,914 11,652 9,495 10,530 53 Transaction balances other than demand deposits 43,120 44,286 43.640 42,054 40.981 43,217 42,233 42,498 54 Nontransaction balances 490,352 493,688 493,247 492,226 492,090 494,204 493,976 494,865 55 Individuals, partnerships and corporations 453,201 456,336 455,628 454,687 454,026 455,018 454,493 455,791 56 States and political subdivisions 24,845 25,182 25,342 25,510 25.982 26,064 26,462 26,330 57 U.S. government 522 512 510 517 529 538 548 549 58 Depository institutions in the United States 9,444 9,457 9,664 9,533 9,619 10,683 10,613 10,414 59 Foreign governments, official institutions and banks.. 2,339 2,200 2,103 1,978 1,934 1,900 1,860 1,782 60 Liabilities for borrowed money 230,252 234,118 242,402 233,828 232,349 232,740 237,819 240,916 61 Borrowings from Federal Reserve Banks 2,395 195 198 253 200 150 145 140 62 Treasury tax-and-loan notes 16,906 7,954 15,858 17,031 17,000 12,331 14,529 14,577 63 All other liabilities for borrowed money3 210,951 225,969 226,346 216,544 215,150 220,259 223,145 226,199 64 Other liabilities and subordinated note and debentures 90,992 85,595 86,873 86,714 85,027 82,781 82,345 83,336 65 Total liabilities 1,108,918 1,066,818 1,088,710 1,066,460 1,043,673 1,058,727 1,050,611 1,077,566 66 Residual (total assets minus total liabilities)4 78,738 79,714 79,931 79,686 79,723 80,113 80,279 80,101 MEMO 67 Total loans and leases (gross) and investments adjusted5 893,257 894,431 895,184 886,430 883,571 887,435 884,505 895,367 68 Total loans and leases (gross) adjusted2-5 726,914 727,416 729,992 720,465 717,052 720,126 717,503 725,420 69 Time deposits in amounts of $100,000 or more 164,602 164,770 164,018 163,932 164,645 165,554 165,729 164,655 7 7 0 1 Lo C a o ns m m so e ld rc o ia u l tr a i n g d h t in to d u a s f t f r i i l a ia l tes—total6 1 1 , , 8 1 3 1 1 5 1 1 , , 8 1 8 5 9 9 1 1, ,8 10 4 2 7 1 1 , , 8 1 4 0 5 0 1 1 , , 8 0 4 7 8 3 1,6 9 6 1 0 1 1 1 , , 7 0 6 1 2 9 1 1 , , 7 0 8 3 3 8 72 Other 716 730 745 744 774 749 742 745 73 Nontransaction savings deposits (including MMDAs)... 195,574 195,933 196,151 195,292 194,210 195,283 195,009 196,513 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis or 2. Levels of major loan items were affected by the Sept. 26, 1984, transaction for other analytic uses. between Continental Illinois National Bank and the Federal Deposit Insurance 5. Exclusive of loans and federal funds transactions with domestic commercial Corporation. For details see the H.4.2 statistical release dated Oct. 5, 1984. banks. 3. Includes federal funds purchased and securities sold under agreements to 6. Loans sold are those sold outright to a bank's own foreign branches, repurchase; for information on these liabilities at banks with assets of $1 billion or nonconsolidated nonbank affiliates of the bank, the bank's holding company (if more on Dec. 31, 1977, see table 1.13. not a bank), and nonconsolidated nonbank subsidiaries of the holding company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 DomesticN onfinancial Statistics • May 1986 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures except as noted 1985 1986 AAccccoouunntt Dec. 311 Jan. 8 Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 1 Cash and balances due from depository institutions 32,545r 32,106 24,355 21,534 26,060 24,645 28,565 22,952 2 Total loans, leases and securities, net2 197,591 199,144 203,258 196,922 195,026 192,313' 192,299 198,235 195,127 Securities 3 4 5 Investment account, by maturity 11,441 11,092 10,653 10,816 10,897 10,200' 10,574 11,074 11,311 6 One year or less 1,409 1,438 1,439 1,458 1,524 1,470' 1,360 1,338 1,365 7 Over one through five years 5,878 5,953 5,568 5,632 5,375 4,751' 5,152 5,814 5,908 8 Over five years 4,154 3,701 3,645 3,726 3,998 3,979' 44,,006622 3,922 44,,003399 4 in n Investment account 15,468 15,725 15,819 15,792 15,756 15,496 15,413 15,341 15,618 12 States and political subdivisions, by maturity 13,716 13,954 14,026 14,027 13,967 13,927 13,840 13,779 13,693 13 One year or less 1,922 1,758 1,778 1,740 1,826 1,825 1,874 1,876 1,875 14 Over one year 11,794 12,196 12,248 12,287 12,141 12,102 11,966 11,904 11,818 15 Other bonds, corporate stocks and securities 1,752 1,770 1,793 1,766 11,,778899 11,,556688 11,,557733 11,,556611 11,,992266 1166 Loans and leases 17 Federal funds sold4 24,724 28,344 31,513 29,520 30,335 27,639 28,936 29,341 27,791 18 To commercial banks 13,781 12,555 15,248 14,507 15,339 12,427 13,711 13,716 12,344 19 To nonbank brokers and dealers in securities 6,656 8,980 9,590 8,696 8,807 8,448 8,078 9,146 8,060 20 To others 4,286 6,808 6,676 6,317 6,189 6,763 7,146 6,480 7,386 21 Other loans and leases, gross 151,336 149,401 150,684 146,215 143,456 144,447r 142,904 148,023 146,005 22 Other loans, gross 148,514 146,515 147,742 143,253 140,466 141,446' 139,852 144,967 142,643 23 Commercial and industrial 59,218 59,649 59,251 58,900 57,739 57,624 57,815 57,982 58,365 24 Bankers acceptances and commercial paper 529 415 590 455 479 550 486 584 536 25 All other 58,688 59,233 58,660 58,445 57,260 57,074 57,329 57,398 57,829 26 U.S. addressees 57,993 58,580 57,998 57,822 56,649 56,463 56,720 56,812 57,262 27 Non-U.S. addressees 696 653 663 624 611 611 609 586 567 28 Real estate loans 29,363 29,490 29,549 29,477 30,166 30,119' 30,256 30,393 30,268 29 To individuals for personal expenditures 18,553 17,938 17,824 17,794 17,740 17,709 17,708 17,842 17,861 30 To depository and financial institutions 15,117 12,751 12,685 12,737 12,341 12,977 12,356 13,867 13,216 31 Commercial banks in the United States 4,555 3,099 3,196 3,484 3,433 4,028 3,965 4,400 4,529 32 Banks in foreign countries 2,759 2,312 2,156 2,308 2,249 2,441 1,868 2,865 2,076 33 Nonbank depository and other financial institutions 7,803 7,339 7,333 6,945 6,658 6,508 6,523 6,601 6,611 34 For purchasing and carrying securities 9,716 11,938 13,535 9,423 8,069 8,637 7,307 9,912 8,214 35 To finance agricultural production 317 296 286 289 305 315 309 307 320 36 To states and political subdivisions 9,731 9,482 9,593 9,650 9,562 9,360 9,357 9,431 9,402 37 To foreign governments and official institutions 894 916 824 719 619 667 1017 1,086 912 38 All other 5,605 4,054 4,194 4,264 3,924 4,039' 3,727 4,146 4,085 39 Lease financing receivables 2,822 2,886 2,942 2,962 2,991 3,000 3,052 3,056 3,362 40 LESS: Unearned income 1,435 1,453 1,449 1,464 1,460 1,440 1,438 1,440 1,449 41 Loan and lease reserve 3,944 3,965 3,962 3,958 3,959 4,028 4,090 4,103 4,149 42 Other loans and leases, net 145,958 143,983 145,273 140,793 138,038 138,979' 137,376 142,479 140,407 43 All other assets5 75,232 69,141 69,299 67,847 65,885 70,244 69,008 72,282 70,656 44 Total assets 305,368' 290,414 304,663 289,124 282,446 288,617' 285,951 299,081 288,736 Deposits 45 Demand deposits 71,457' 52,941 62,570 54,493 50,504 54,244' 48,166 57,683 50,247 46 Individuals, partnerships, and corporations 48,414' 37,344 41,038 35,778 33,684 35,442' 32,977 38,950 34,661 47 States and political subdivisions 973' 683 1,407 796 673 1,112 538 680 639 48 U.S. government 181 424 878 316 630 1,073 503 250 622 49 Depository institutions in the United States 7,572 5,175 7,649 6,428 5,578 5,368 4,769 6,265 5,539 50 Banks in foreign countries 6,004 4,338 4,895 5,546 4,032 4,165 3,999 5,642 4,255 51 Foreign governments and official institutions 873 775 846 788 1,026 715 594 673 822 52 Certified and officers' checks 7,440 4,201 5,856 4,839 4,881 66,,337700 44,,778844 55,,222233 33,,770088 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 4,616 4,790 4,753 4,562 4,443 4,666' 4,565 4,524 4,483 54 Nontransaction balances 92,914 92,287 92,441 91,793 91,455 92,006' 91,684 92,987 92,519 55 Individuals, partnerships and corporations 83,956 83,392 83,540 82,959 82,571 83,053' 82,582 83,949 83,126 56 States and political subdivisions 5,619 5,735 5,688 5,726 5,741 5,739 5,886 5,925 6,053 57 U.S. government 39 37 40 46 51 35 38 52 46 58 Depository institutions in the United States 2,151 2,106 2,190 2,149 2,148 2,226 2,222 2,156 2,390 59 Foreign governments, official institutions and banks 1,149 1,017 982 914 944 952 956 904 904 60 Liabilities for borrowed money 72,917 81,739 84,517 76,927 76,352 7799,,225533'' 8833,,118866 8855,,997722 8833,,554488 61 2,020 62 Treasury tax-and-loan notes 3,984 1,834 4,770 4,986 4,964 3,281 4,337 4,237 4,729 63 All other liabilities for borrowed money6 66,914 79,905 79,747 71,941 71,388 75,972' 78,849 81,735 78,819 64 Other liabilities and subordinated note and debentures 38,176 33,197 34,774 35,754 34,194 32,729' 32,623 32,354 32,450 65 Total liabilities 280,080' 264,954 279,055 263,530 256,948 262,898' 260,224 273,520 263,247 66 Residual (total assets minus total liabilities)7 25,287 25,460 25,609 25,594 25,498 25,719 25,727 25,562 25,488 MEMO 67 Total loans and leases (gross) and investments adjusted2'8 184,634 188,908 190,225 184,352 181,672 181,326' 180,150 185,663 183,852 68 Total loans and leases (gross) adjusted8 157,724 162,091 163,753 157,744 155,019 155,631' 154,164 159,248 156,922 69 Time deposits in amounts of $100,000 or more 37,346 37,334 36,956 36,735 36,664 36,886 37,038 37,105 36,975 1. These data are as of Tuesday the last day of the year. 7. Not a measure of equity capital for use in capital adequacy analysis or for 2. Excludes trading account securities. other analytic uses. 3. Not available due to confidentiality. 8. Exclusive of loans and federal funds transactions with domestic commercial 4. Includes securities purchased under agreements to resell. banks. 5. Includes trading account securities. NOTE. These data also appear in the Board's H.4.2 (504) release. For address, 6. Includes federal funds purchased and securities sold under agreements to see inside front cover. repurchase. 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 1986 AAccccoouunntt11 Jan. 1 Jan. 8 Jan. 15 Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 1 Cash and due from depository institutions . 9,996 9,297 8,874 9,297 9,794 8,704 9,309 8,920 8,732 2 Total loans and securities 69,973 63,494 65,744 63,117 63,634 63,437 63,586 65,051 65,727 3 U.S. Treasury and govt, agency securities 3,700 3,663 4,267 3,887 3,506 3,960 3,730 3,931 3,932 4 Other securities 3,891 3,815 3,788 3,946 4,450 4,436 4,281 4,287 4,387 5 Federal funds sold2 4,938 4,517 5,519 4,323 4,778 3,630 4,314 5,282 6,509 6 To commercial banks in the United States 4,368 3,906 4,738 3,661 3,862 2,685 3,221 4,120 5,603 7 To others 569 611 781 662 917 945 1,093 1,162 906 8 Other loans, gross 57,443 51,498 52,170 50,961 50,900 51,411 51,261 51,552 50,899 9 Commercial and industrial 33,083 30,244 30,742 30,311 30,002 30,497 30,735 31,002 30,712 10 Bankers acceptances and commercial paper 2,511 2,111 2,093 2,153 2,088 2,196 22,,110099 22,,115500 22,,007755 11 All other 30,572 28,133 28,649 28,157 27,914 28,300 28,625 28,852 28,637 12 U.S. addressees 28,715 26,349 26,786 26,298 26,054 26,461 26,775 26,889 26,698 13 Non-U.S. addressees 1,857 1,783 1,864 1,860 1,860 1,840 1,850 1,963 1,940 14 To financial institutions 15,118 13,963 14,210 13,892 14,078 13,864 13,645 13,810 14,027 15 Commercial banks in the United States . 11,654 10,824 10,776 10,796 11,070 10,762 10,759 10,972 11,157 16 Banks in foreign countries 1,039 998 1,163 1,068 1,056 1,124 1,020 1,031 1,133 17 Nonbank financial institutions 2,425 2,142 2,270 2,028 1,952 1,979 1,866 1,807 1,736 18 To foreign govts, and official institutions.. 703 692 710 704 702 650 641 657 613 19 For purchasing and carrying securities .. 5,041 3,133 3,058 2,566 2,619 2,790 2,676 2,422 1,926 20 All other 3,499 3,466 3,450 3,488 3,500 3,609 3,563 3,660 3,620 21 Other assets (claims on nonrelated parties).. 21,088 20,708 21,097 21,006 21,920 22,258 22,516 22,961 23,024 22 Net due from related institutions 12,044 11,889 11,932 11,177 10,723 12,996 11,714 11,875 11,192 23 Total assets 113,101 105,388 107,648 104,598 106,070 107,395 107,125 108,808 108,676 24 Deposits or credit balances due to other than directly related institutions.... 32,846 32,529 32,263 32,555 32,872 32,516 32,137 3311,,990044 3311,,339966 25 Transaction accounts and credit balances3 2,781 2,544 2,490 2,710 2,586 2,585 2,631 2,826 2,427 26 Individuals, partnerships, and corporations 1,776 1,410 1,362 1,349 1,367 1,467 11,,449966 11,,554444 11,,442200 27 Other 1,004 1,133 1,128 1,361 1,219 1,118 1,135 1,282 1,007 28 Nontransaction accounts4 30,065 29,986 29,773 29,845 30,286 29,931 29,506 29,078 28,969 29 Individuals, partnerships, and corporations 23,004 23,184 23,317 23,362 23,840 23,732 2222,,990088 23,088 2222,,991122 30 Other 7,061 6,801 6,456 6,483 6,446 6,198 6,598 5,990 6,058 31 Borrowings from other than directly related institutions 44,576 38,369 40,965 38,146 38,594 41,357 39,660 4422,,002244 40,155 32 Federal funds purchased5 19,819 15,845 18,537 15,871 17,187 20,612 18,588 20,959 18,043 33 From commercial banks in the United States 15,400 11,347 13,581 11,213 12,495 14,768 13,850 15,914 12,605 34 From others 4,419 4,497 4,956 4,658 4,692 5,844 4,738 5,045 5,439 35 Other liabilities for borrowed money.... 24,757 22,524 22,428 22,274 21,407 20,745 21,071 21,065 22,112 36 To commercial banks in the United States 22,307 20,592 20,644 20,282 19,356 18,737 18,877 18,917 19,848 37 To others 2,450 1,932 1,784 1,992 2,051 2,008 2,194 2,148 2,264 38 Other liabilities to nonrelated parties 23,661 22,857 23,530 22,899 23,576 24,292 24,367 24,611 25,053 39 Net due to related institutions 12,017 11,633 10,889 10,998 11,028 9,231 10,961 10,269 12,071 40 Total liabilities 113,101 105,388 107,648 104,598 106,070 107,395 107,125 108,808 108,676 MEMO 41 Total loans (gross) and securities adjusted6 53,950 48,764 50,230 48,660 48,702 49,990 49,607 49,959 48,966 42 Total loans (gross) adjusted6 46,359 41,286 42,175 40,827 40,747 41,594 41,595 41,742 40,648 • Levels of many asset and liability items were revised beginning Oct. 31, in transaction accounts. Before Jan. 1, 1986, they were included in savings 1984. For details, see the H.4.2 (504) statistical release dated Nov. 23, 1984. (nontransaction) accounts. 1. Effective Jan. 1, 1986, The reporting panel includes 65 U.S. branches and 2. Includes securities purchased under agreements to resell. agencies of foreign banks instead of the 50 banks previously reporting. Data 3. Includes credit balances, demand deposits, and other checkable deposits. shown for weeks before Jan. 1, 1986 are estimated to represent the new 65-bank 4. Includes savings deposits, money market deposit accounts, and time panel. Minor definitional changes were made in a few items effective with Jan. 1 deposits. data due to a change in treatment of credit balances and other checkable deposits. 5. Includes securities sold under agreements to repurchase. Credit balances formerly were reported as a separate item and are now included in 6. Exclusive of loans to and federal funds sold to commercial banks in the the transaction account breakdowns. Other checkable deposits are now included United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • May 1986 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1 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.. Sept. Dec. Mar.3 June Sept. Dec. 1 All holders—Individuals, partnerships, and corporations 315.5 288.9 291.8 293.5 288.8 302.7 286.6 298.6 299.6 321.6 2 Financial business 29.8 28.0 35.4 32.8 30.4 31.7 28.1 28.9 28.9 32.9 3 Nonfinancial business 162.8 154.8 150.5 161.1 158.9 166.3 158.3 164.7 168.1 178.4 4 Consumer 102.4 86.6 85.9 78.5 79.9 81.5 77.9 81.8 80.7 84.8 5 Foreign 3.3 2.9 3.0 3.3 3.3 3.6 3.5 3.7 3.5 3.5 6 Other 17.2 16.7 17.0 17.8 16.3 19.7 18.8 19.5 18.5 22.1 Weekly reporting banks 1984 1985 11998800 11998811 11998822 11998833 DDeecc.. DDeecc.. DDeecc.. DDeecc..22 Sept. Dec. Mar.3 June Sept. Dec. 7 All holders—Individuals, partnerships, and corporations 147.4 137.5 144.2 146.2 145.3 157.1 147.8 151.4 153.7 168.8 8 Financial business 21.8 21.0 26.7 24.2 23.7 25.3 22.6 22.9 23.3 26.6 9 Nonfinancial business 78.3 75.2 74.3 79.8 79.2 87.1 82.8 84.0 85.9 94.4 10 Consumer 35.6 30.4 31.9 29.7 29.8 30.5 29.1 29.9 30.6 32.4 11 Foreign 3.1 2.8 2.9 3.1 3.2 3.4 3.3 3.5 3.3 3.1 12 Other 8.6 8.0 8.4 9.3 9.3 10.9 10.0 11.0 10.6 12.3 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 1986 T 1981 1982 1983 1984 1985 Dec. Dec. Dec.1 Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 165,829 166,436 187,658' 237,586' 300,899 274,721' 277,482' 282,155' 287,981' 300,899' 302,160 Financial companies3 Dealer-placed paper4 2 Total 30,333 34,605 44,455' 56,485' 78,443 68,926' 71,080' 70,395' 72,145' 78,443' 79,052 3 Bank-related (not seasonally adjusted) 6,045 2,516 2,441 2,035 1,602 2,136 2,333 2,077 1,969 1,602 1,414 Directly placed paper5 4 Total 81,660 84,393 97,042' 110,543' 135,504 128,8^ 132,068' 131,504' 131,667' 135,504' 134,584 5 Bank-related (not seasonally adjusted) 26,914 32,034 35,566 42,105 44,778 42,926 43,224 42,570 41,490 44,778 35,660 6 Nonfinancial companies6 53,836 47,437 46,161' 70,558' 86,952 76,976' 74,334' 80,256' 84,169' 86,952' 88,528 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 69,226 79,543 78,309 75,470 68,180 69,505 70,845 69,272 67,890 68,180 68,205 Holder 8 Accepting banks 10,857 10,910 9,355 10,255 11,233 8,563 10,014 9,719 11,027 11,233 11,084 9 Own bills 9,743 9,471 8,125 9,065 9,507 7,365 8,501 8,041 8,903 9,507 9,346 10 Bills bought 1,115 1,439 1,230 1,191 1,726 1,198 1,513 1,679 2,123 1,726 1,738 Federal Reserve Banks 11 Own account 195 1,480 418 0 0 0 0 0 0 0 0 12 Foreign correspondents 1,442 949 729 671 937 789 793 850 874 937 898 13 Others 56,731 66,204 68,225 67,595 60,398 60,941' 60,83c 59,552' 56,863' 56,946' 57,120 Basis 14 Imports into United States 14,765 17,683 15,649 16,975 15,225 17,350 17,146 16,503 15,845 15,225 14,820 15 Exports from United States 15,400 16,328 16,880 15,859 13,189 12,861 13,242 13,116 13,030 13,189 12,951 16 All other 39,060 45,531 45,781 42,635 36,688 38,281 38,776 38,362 37,516 36,688 37,277 1. Effective Dec. 1,1982, there was a break in the commercial paper series. The 4. Includes all financial company paper sold by dealers in the open market. key changes in the content of the data involved additions to the reporting panel, 5. As reported by financial companies that place their paper directly with the exclusion of broker or dealer placed borrowings under any master note investors. agreements from the reported data, and the reclassification of a large portion of 6. Includes public utilities and firms engaged primarily in such activities as bank-related paper from dealer-placed to directly placed. communications, construction, manufacturing, mining, wholesale and retail trade, 2. Correction of a previous misclassification of paper by a reporter has created transportation, and services. a break in the series beginning December 1983. The correction adds some paper to 7. Beginning October 1984, the number of respondents in the bankers acceptnonfinancial and to dealer-placed financial paper. ance survey were reduced from 340 to 160 institutions—those with $50 million or 3. Institutions engaged primarily in activities such as, but not limited to, more in total acceptances. The new reporting group accounts for over 95 percent commercial, savings, and mortgage banking; sales, personal, and mortgage of total acceptances activity. financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Rate Effective Date Rate Average Month Average rate rate 11.50 1984-—Nov 9 11.75 1984—Jan 11.00 1985—Feb 10.50 12.00 28. . 11.25 Feb 11.00 10.50 12.50 Dec. ?() 10.75 11.21 Apr 10.50 13.00 Apr 11.93 10.31 12.75 1985-—Jan. 15 10.50 12.39 June 9.78 12.50 May 70 . 10.00 June 12.60 July 9.50 12.00 June 18 9.50 July 13.00 Aug 9.50 Aug 13.00 Sept 9.50 Sept 12.97 Oct 9.50 Oct 12.58 Nov 9.50 11.77 Dec 9.50 Dec 11.06 1986—Jan 9.50 1985—Jan 10.61 Feb 9.50 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 • May 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 1986 1986, week ending IInnssttrruummeenntt 11998833 11998844 11998855 Nov. Dec. Jan. Feb. Jan. 31 Feb. 7 Feb. 14 Feb. 21 Feb. 28 MONEY MARKET RATES 1 Federal funds12 9.09 10.22 8.10 8.05 8.27' 8.14 7.86 7.83 7.97 7.85 7.84 7.82 2 Discount window borrowing12'3 8.50 8.80 7.69 7.50 7.50 7.50 7.50 7.50 7.50 7.50 77..5500 77..5500 Commercial paper4'5 3 1-month 8.87 10.05 7.94 7.84 7.87 7.78 7.70 7.72 7.70 7.73 7.69 7.66 4 3-month 8.88 10.10 7.95 7.77 7.75 7.71 7.63 7.66 7.63 7.67 7.63 7.59 5 6-month 8.89 10.16 8.01 7.69 7.62 7.62 7.54 7.59 7.55 7.60 7.52 77..4488 Finance paper, directly placed4'5 6 1-month 8.80 9.97 7.91 7.81 7.81 7.75 7.68 7.67 7.68 7.74 7.70 7.61 7 3-month 8.70 9.73 7.77 7.58 7.57 7.52 7.47 7.51 7.45 7.52 7.48 7.44 8 6-month 8.69 9.65 7.75 7.57 7.51 7.47 7.40 7.46 7.40 7.42 7.40 7.37 Bankers acceptances5,6 9 3-month 8.90 10.14 7.92 7.70 7.65 7.62 7.54 7.58 7.56 7.59 7.50 7.50 10 6-month 8.91 10.19 7.96 7.59 7.52 7.55 7.41 7.50 7.48 7.49 7.35 77..3311 Certificates of deposit, secondary market7 11 1-month 8.96 10.17 7.97 7.82 7.87 7.83 7.69 7.76 7.72 7.74 7.67 7.63 12 3-month 9.07 10.37 8.05 7.81 7.80 7.82 7.69 7.76 7.73 7.74 7.67 7.62 13 6-month 9.27 10.68 8.25 7.82 7.80 7.83 7.70 7.76 7.74 7.77 7.68 7.62 14 Eurodollar deposits, 3-month8 9.56 10.73 8.28 8.02 7.99 8.02 7.89 8.00 7.93 7.95 7.90 7.86 U.S. Treasury bills5 Secondary market9 15 3-month 8.61 9.52 7.48 7.24 7.10 7.07 7.06 6.98 7.06 7.11 7.05 7.04 16 6-month 8.73 9.76 7.65 7.30 7.14 7.17 7.11 7.07 7.11 7.18 7.11 7.04 17 1-year 8.80 9.92 7.81 7.33 7.16 7.21 7.11 7.11 7.12 7.17 7.11 7.02 Auction average10 18 3-month 8.63 9.58 7.48' 7.20 7.07 7.04 7.03 6.92 6.99 7.18 6.97 6.96 19 6-month 8.75' 9.80 7.66 7.26 7.09 7.13 7.08 7.03 7.06 7.23 7.03 7.00 20 1-year 8.86 9.91 7.80 7.33 7.06 7.31 7.19 n.a. n.a. 7.19 n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds" Constant maturities12 21 1-year 9.57 10.89 8.43 7.88 7.67 7.73 7.61 7.62 7.63 7.69 7.62 7.52 22 2-year 10.21 11.65 9.27 8.58 8.15 8.14 7.97 8.03 8.01 8.05 8.00 7.81 73 11.82 9.54 88..8833 8.30 8.35 24 3-year 10.45 11.89 9.64 88..8888 8.40 8.41 8.10 8.29 8.21 8.17 8.10 7.91 25 5-year 10.80 12.24 10.13 9.28 8.73 8.68 8.34 8.56 8.52 8.44 8.32 8.06 26 7-year 11.02 12.40 10.51 9.62 9.11 9.03 8.58 8.90 8.85 8.73 8.52 8.20 27 10-year 11.10 12.44 10.62 9.78 9.26 9.19 8.70 9.09 9.02 8.87 8.62 8.29 28 20-year 11.34 12.48 10.97 10.24 9.75 9.59 9.08 9.48 9.43 9.30 9.01 8.56 29 30-year 11.18 12.39 10.79 10.06 9.54 9.40 8.93 9.34 9.27 9.11 8.86 8.47 Composite14 30 Over 10 years (long-term) 10.84 11.99 10.75 10.08 9.60 9.51 9.07 9.45 9.39 9.29 9.02 8.57 State and local notes and bonds Moody's series15 31 Aaa 8.80 9.61 8.60 8.13 7.98 7.74 7.26 7.60 7.50 7.35 7.30 6.90 32 Baa 10.17 10.38 9.58 9.20 9.05 8.79 8.30 8.65 8.60 8.50 8.30 7.80 33 Bond Buyer series" 9.51 10.10 9.10 8.54 8.43 8.08 7.44 7.86 7.73 7.62 7.44 6.98 Corporate bonds Seasoned issues17 34 All industries 12.78 13.49 12.05 11.29 10.89 10.75 10.40 10.71 10.60 10.54 10.35 10.08 35 Aaa 12.04 12.71 11.37 10.55 10.16 10.05 9.67 10.00 9.90 9.84 9.64 9.29 36 Aa 12.42 13.31 11.82 11.07 10.63 10.46 10.13 10.43 10.35 10.29 10.07 9.81 37 A 13.10 13.74 12.28 11.54 11.19 11.04 10.67 10.% 10.87 10.80 10.60 10.40 38 Baa 13.55 14.19 12.72 11.99 11.58 11.44 11.11 11.43 11.29 11.25 11.10 10.82 39 A-rated, recently-offered utility bonds18 12.73 13.81 12.06 11.38 10.91 10.74 10.20 10.67 10.58 10.27 10.01 9.48 MEMO: Dividend/price ratio19 40 Preferred stocks 11.02 11.59 10.49 10.12 10.05 9.85 9.62 9.81 9.75 9.51 9.54 9.66 41 Common stocks 4.40 4.64 4.25 4.06 3.88 3.90 3.72 3.84 3.80 3.75 3.69 3.62 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 A25 1.36 STOCK MARKET Selected Statistics 1985 1986 IInnddiiccaattoorr 11998833 11998844 11998855 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 92.63 92.46 108.09 109.52 111.64 109.09 106.62 107.57 113.93 119.33 120.16 126.43 2 Industrial 107.45 108.01 123.79 124.11 126.94 124.92 122.35 123.65 130.53 136.77 137.13 144.03 3 Transportation 89.36 85.63 104.11 105.79 111.67 109.92 104.96 103.72 108.61 113.52 115.72 124.18 4 Utility 47.00 46.44 56.75 59.61 59.68 56.99 55.93 55.84 59.07 61.69 62.46 65.18 5 Finance 95.34 89.28 114.21 118.47 119.85 114.68 110.21 112.36 122.83 128.86 132.36 142.13 6 Standard & Poor's Corporation (1941-43 = 10)' ... 160.41 160.50 186.84 188.89 192.54 188.31 184.06 186.18 197.45 207.26 208.19 219.37 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 216.48 207.96 229.10 227.48 235.21 232.65 226.27 225.00 236.53 243.28 245.27 246.09 Volume of trading (thousands of shares) 8 New York Stock Exchange 85,418 91,084 109,191 105,849 111,952 87,468 97,910 110,569 122,263 133,446 130,872 152,590 9 American Stock Exchange 8,215 6,107 8,355 7,128 7,284 7,275 7,057 7,648 9,183 11,890 11,105 14,057 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 23,000 22,470 28,390 25,260 25,220 25,780 25,330 26,350 26,400 28,390 26,810 27,450 Free credit balances at brokers4 11 Margin-account5 n.a. 1,755' 2,715' 2,215' 1,95C 1,810' 1,745' 1,715' 2,080' 2,715' 2,645' 2,550 12 Cash-account 8,430 10,215 12,840 10,115 9,700 9,440 10,080 9,630 10,340 12,840 11,695 12,360 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)6 14 Under 40 22.0 18.0 34.0 34.0 34.0 35.0 40.0 37.0 35.0 34.0 32.0 28.0 15 40-49 22.0 18.0 20.0 20.0 20.0 21.0 22.0 22.0 20.0 20.0 20.0 19.0 1 1 7 6 6 50 0 - - 5 6 9 9 1 9 6 . . 0 0 1 9 6 . . 0 0 1 19 1 . . 0 0 1 19 1 . . 0 0 1 19 1 . . 0 0 1 18 1 . . 0 0 1 9 6 . . 0 0 1 1 7 0 . . 0 0 1 1 9 1 . . 0 0 1 1 9 1 . . 0 0 2 1 0 1 . . 0 0 2 1 1 3 . . 0 0 18 70-79 6.0 5.0 8.0 8.0 8.0 8.0 6.0 7.0 7.0 8.0 8.0 9.0 19 80 or more 6.0 6.0 8.0 8.0 8.0 7.0 7.0 7.0 8.0 8.0 9.0 10.0 Special miscellaneous-account balances at brokers (end of period) 20 Total balances (millions of dollars)7 58,329 75,840 99,310 86,910 89,240 90,930 91,400 92,250 95,240 99,310 99,290 104,228 Distribution by equity status (percent) 21 Net credit status 63.0 59.0 58.0 59.0 59.0 59.0 59.0 58.0 57.0 58.0 59.0 60.0 Debt status, equity of 22 60 percent or more 28.0 29.0 31.0 31.0 32.0 30.0 31.0 31.0 32.0 31.0 33.0 32.0 23 Less than 60 percent 9.0 11.0 11.0 10.0 9.0 11.0 10.0 11.0 11.0 11.0 8.0 8.0 Margin requirements (percent of market value and effective date)8 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. New series beginning June 1984. companies. With this change the index includes 400 industrial stocks (formerly 6. Each customer's equity in his collateral (market value of collateral less net 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 debit balance) is expressed as a percentage of current collateral values. financial. 7. Balances that may be used by customers as the margin deposit required for 2. Beginning July 5, 1983, the American Stock Exchange rebased its index additional purchases. Balances may arise as transfers based on loan values of effectively cutting previous readings in half. other collateral in the customer's margin account or deposits of cash (usually sales 3. Beginning July 1983, under the revised Regulation T, margin credit at proceeds) occur. broker-dealers includes credit extended against stocks, convertible bonds, stocks 8. Regulations G, T, and U of the Federal Reserve Board of Governors, acquired through exercise of subscription rights, corporate bonds, and govern- prescribed in accordance with the Securities Exchange Act of 1934, limit the ment securities. Separate reporting of data for margin stocks, convertible bonds, amount of credit to purchase and carry margin stocks that may be extended on and subscription issues was discontinued in April 1984, and margin credit at securities as collateral by prescribing a maximum loan value, which is a specified broker-dealers became the total that is distributed by equity class and shown on percentage of the market value of the collateral at the time the credit is extended. lines 17-22. Margin requirements are the difference between the market value (100 percent) 4. Free credit balances are in accounts with no unfulfilled commitments to the and the maximum loan value. The term "margin stocks" is defined in the brokers and are subject to withdrawal by customers on demand. corresponding regulation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • May 1986 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1985 1986 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. FSLIC insured institutions 1 Assets 819,168 978,514 992,289 995,430 1,003,225 1,012,312 1,022,410' 1,034,977 1,041,954 1,048,954 1,061,398 1,069,087 1,070,026 2 Mortgages 521,308 599,021 608,267 613,334 617,574 623,275 672,292' 632,840 638,304 644,824 647,823 652,247 653,419 3 Mortgage-backed securities.... 90,902 108,219 108,755 108,174 106,433 102,892 105,873' 108,686' 112,940 110,753 110,461 108,520 111,426 4 Cash and investment securities1 . 110099,,992233 135,640 132,438 125,528 129,918 132,109 132,987' 135,132 130,810 130,619 139,317 141,592 139,912 5 Other 91,516 94,625 96,903 98,034 100,595 101,338' 101,566 101,633 102,961 102,986 103,870 102,713 6 Liabilities and net worth 819,168 978,514 992,289 995,430 1,003,225 1,012,312 1,022,410' 1,034,977 1,041,954 1,048,954 1,061,398 1,069,087 1,070,026 7 Savings capital 671,059 784,724 801,293 801,293 809,083 817,551 822,106 826,841 831,268 833,189 837,488 843,804 847,673 8 Borrowed money 98,511 137,123 132,665 132,230 129,082 130,269 134,019' 139,507' 144,859 147,044 152,760 156,4% 150,937 9 FHLBB 57,253 71,719 71,674 72,785 74,159 75,897 77,756 80,129 81,485' 82,569 82,718 84,356 82,765 10 Other 41,258 65,404 60,991 59,445 54,923 54,372 56,263' 59,378' 63,374 64,475 70,042 72,140 68,172 11 Other 16,619 18,746 19,290 22,468 24,215 22,055 23,254' 25,198' 21,865 24,280 26,065 21,951 24,195 12 Net worth2 32,980 37,921 39,041 39,476 40,845 42,436 43,033 43,431' 43,963 44,441' 45,085 46,835 47,222 13 MEMO: Mortgage loan commitments outstanding3 . 56,785 65,836 67,615 68,671 69,683 69,585 68,712 65,902 65,711 64,943 64,952 62,%3 61,562 Savings banks4 14 Assets 193,535 203,898 210,568 210,469 212,509 212,163 213,824 215,298 215,560 215,893 216,793 216,050 Loans 15 Mortgage 97,356 102,895 104,340 105,102 105,869 105,891 106,441 107,322 108,842 109,171 109,494 110,509 16 Other 19,129 24,954 27,798 28,000 28,530 29,211 30,339 30,195 29,672 29,967 31,217 30,755 Securities 17 U.S. government 15,360 14,643 15,098 14,504 14,895 14,074 13,960 13,868 13,686 13,734 13,434 13,120 18 Mortgage-backed securities... 18,205 19,215 19,694 19,750 19,527 19,160 19,779 20,101 20,368 20,012 19,828 19,367 19 State and local government... 2,177 2,077 2,092 2,097 2,094 2,093 2,086 2,105 2,107 2,163 2,148 2,318 20 Corporate and other7 25,375 23,747 24,194 24,139 24,344 24,047 23,738 23,735 23,534 23,039 22,816 21,162 n.a. 21 Cash 6,263 4,954 4,864 4,679 5,004 4,935 4,544 4,821 4,916 4,893 4,771 6,248 22 Other assets 9,670 11,413 12,488 12,288 12,246 12,770 12,937 13,151 12,345 12,914 13,085 12,571 23 Liabilities 193,535 203,898 210,568 210,469 212,509 212,163 213,824 215,298 215,560 215,893 216,793 216,050 24 Deposits 172,665 180,616 185,197 184,478 185,802 186,091 186,824 187,207 187,722 187,239 187,552 185,948 25 Regular8 170,135 177,418 181,742 180,804 182,113 182,218 182,881 183,222 183,560 183,2% 183,716 181,931 26 Ordinary savings 38,554 33,739 33,715 33,211 33,457 33,526 33,495 33,398 33,252 33,303 33,638 33,031 27 Time 95,129 104,732 105,204 104,527 104,843 104,756 104,737 104,448 104,668 104,024 104,116 103,315 28 Other 2,530 3,198 3,455 3,689 3,674 3,873 3,943 3,985 4,162 3,943 3,836 4,017 29 Other liabilities 10,154 12,504 14,393 14,959 15,546 14,348 15,137 15,971 15,546 15,996 16,309 16,783 30 General reserve accounts 10,368 10,510 10,720 10,803 10,913 11,238 11,453 11,704 11,882 12,299 12,567 12,752 Life insurance companies8 31 Assets 654,948 722,979 742,154 748,865 757,523 765,891 772,452 778,293 783,828 791,483 802,024 Securities 32 Government 50,752 63,899 65,603 66,402 67,880 68,636 68,983 69,975 71,049 72,334 73,451 33 United States6 28,636 42,204 43,502 44,200 45,593 46,260 46,514 47,343 48,181 49,300 50,321 34 State and local 9,986 8,713 8,902 8,923 8,998 9,044 8,980 9,201 9,293 9,475 9,615 35 Foreign7 12,130 12,982 13,199 13,279 13,289 13,332 13,489 13,431 13,575 13,559 13,515 36 Business 322,854 359,333 374,757 379,247 384,342 388,448 393,386 397,202 355,505 403,832 410,141 n.a. n.a. 37 Bonds 257,986 295,998 307,078 311,123 314,021 317,029 321,752 325,647 285,164 331,675 335,129 38 Stocks 64,868 63,335 67,679 68,124 70,321 71,419 71,634 71,555 70,341 72,157 75,012 39 Mortgages 150,999 156,699 158,162 159,393 160,470 161,485 162,690 163,027 163,929 165,687 167,306 40 Real estate 22,234 25,767 26,527 26,828 27,215 27,831 28,240 28,450 28,476 28,637 28,844 41 Policy loans 54,063 54,505 54,438 54,439 54,384 54,320 54,300 54,238 54,225 54,142 54,121 42 Other assets 54,046 63,776 62,667 62,556 63,232 65,171 64,853 65,401 66,629 57,313 68,161 Credit unions9 43 Total assets/liabilities and capital . 81,961 93,036 98,646 101,268 104,992 106,783 107,991 111,150 113,016 114,783 117,029 118,010 118,933 44 Federal 54,482 63,205 67,799 68,903 71,342 72,021 72,932 74,869 75,567 76,415 77,829 77,861 78,619 45 State 27,479 29,831 30,847 32,365 33,650 34,762 35,059 36,281 37,449 38,368 39,200 40,149 40,314 46 Loans outstanding 50,083 62,561 62,936 64,341 65,298 66,817 67,662 69,171 70,765 71,811 72,404 73,513 73,513 47 Federal 32,930 42,337 42,804 43,414 44,042 44,707 44,963 46,036 46,702 47,065 47,538 47,933 48,055 48 State 17,153 20,224 20,132 20,927 21,256 22,11C 22,699 23,135 24,063 24,746 24,866 25,580 25,458 49 Savings 74,739 84,348 88,560 91,275 95,278 96,702 98,026 99,834 101,318 103,677 105,384 105,963 107,238 50 Federal (shares) 49,889 57,539 61,758 62,867 66,680 66,243 67,070 68,087 68,592 70,063 71,117 70,926 72,166 51 State (shares and deposits) . 24,850 26,809 26,802 28,408 28,598 30,459 30,956 31,747 32,726 33,614 34,267 35,037 35,072 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 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 • May 1986 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1984 1985 1985 1986 111999888333 111999888444 111999888555 H2 HI H2 Dec. Jan. Feb. U.S. budget 1 Receipts 600,562 666,457 733,9% 341,393 380,619 364,791 68,193 76,710 53,370 2 Outlays 795,917 841,800 936,809 446,949 463,735 488,740 84,079 82,849 78,290 3 Surplus, or deficit (-) -195,355 -175,343 -202,813 -105,557 -83,115 -123,950 -15,886 -6,140 -24,920 4 Trust funds 23,056 30,565 53,540 31,473 22,592 30,278 15,268 1,710 433 5 Federal funds1 -218,410 -205,908 -256,353 -137,032 -105,707 -154,229 -31,155 -7,849 -25,354 Off-budget entities {surplus, or deficit (-))2 6 Federal Financing Bank outlays -10,404 -7,277 -7,339 -1,913 -6,274 -529 1,020 -188 282 7 Other3 -1,953 -2,719 -1,779 -77 -1,567 -545 210 -163 58 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -207,711 -185,339 -211,931 -109,474 -90,553 --112255,,002222 --1144,,665566 --66,,449922 --2244,,558800 Source of financing 9 Borrowing from the public 212,425 170,817 197,269 118,209 87,054 136,567 3333,,226611 12,660 1166,,001100 10 Cash and monetary assets (decrease, or increase (-))4 -9,889 5,636 10,673 -16,683 -6,479 -10,428 -21,020 -9,503 12,969 11 Other5 5,176 8,885 3,989 7,948 9,978 1,117 2,415 3,334 -4,400 MEMO 12 Treasury operating balance (level, end of period) 37,057 22,345 17,060 17,649 24,013 30,935 30,935 40,215 26,326 13 Federal Reserve Banks 16,557 3,791 4,174 5,316 3,288 9,351 9,351 16,228 5,026 14 Tax and loan accounts 20,500 18,553 12,886 12,333 20,725 21,584 21,584 23,987 21,300 1. Half-year figures are calculated as a residual (total surplus/deficit less trust 5. Includes accrued interest payable to the public; allocations of special fund surplus/deficit). drawing rights; deposit funds; miscellaneous liability (including checks outstand- 2. The recently enacted Gramm-Rudman legislation folds the unified and ing) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S. previously off-budget outlays into a total outlays and total deficit framework. currency valuation adjustment; net gain/loss for IMF valuation adjustment; and However, the latest "Monthly Treasury Statement" continues to distinguish profit on the sale of gold. between the old unified and off-budget spending categories. 3. Other off-budget includes Postal Service Fund; Rural electrification and SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. telephone revolving fund; Rural Telephone Bank; Synthetic fuels corporation Government," "Daily Treasury Statement," and the Budget of the U.S. Governfund; U.S. Railway Association; and petroleum acquisition and transportation ment, Fiscal Year 1987. and strategic petroleum reserve effective November 1981. 4. Includes U.S. Treasury operating cash accounts; SDRs; reserve position on the U.S. quota in the IMF; loans to International Monetary Fund; and other cash and monetary assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1984 1985 1985 1986 111999888444 111999888555 HI H2 HI H2 Dec. Jan. Feb. RECEIPTS 1 All sources 666,457 733,996 341,808 341,392 380,618 364,790 68,193 76,710 53,370 2 Individual income taxes, net 295,960 330,918 144,691 157,229 166,852 169,987 30,193 40,150 25,370 3 Withheld 279,350 298,941 140,657 145,210 149,288 155,725 28,568 26,146 27,295 4 Presidential Election Campaign Fund ... 35 35 29 5 29 6 0 0 2 5 Nonwithheld 81,346 97,685 61,463 19,403 76,155 22,295 2,448 14,484 1,253 6 Refunds 64,770 65,743 57,458 7,387 58,684 8,038 822 480 3,181 Corporation income taxes 7 Gross receipts 74,179 77,413 40,328 35,190 42,193 36,528 13,108 3,588 1,941 8 Refunds 17,286 16,082 10,045 6,847 8,370 7,751 821 763 1,321 9 Social insurance taxes and contributions, net 241,902 268,805 131,372 118,690 144,528 128,017 19,662 26,983 22,046 10 Employment taxes and contributions1 212,180 238,288 114,102 105,624 125,969 116,276 19,012 25,363 1199,,220077 11 Self-employment taxes and contributions2 8,709 10,468 7,667 1,086 9,482 985 0 737 664411 12 Unemployment insurance 25,138 25,758 14,942 10,706 16,213 9,281 221 1,211 2,467 13 Other net receipts3 4,580 4,759 2,329 2,360 2,350 2,458 429 408 372 14 Excise taxes 37,361 35,865 18,304 18,961 17,259 18,470 3,017 3,167 2,265 15 Customs deposits 11,370 12,079 5,576 6,329 5,807 6,354 1,008 1,097 948 16 Estate and gift taxes 6,010 6,422 3,102 3,029 3,204 3,323 514 587 487 17 Miscellaneous receipts4 16,965 18,576 8,481 8,812 9,144 9,861 1,511 1,901 1,635 OUTLAYS 18 All types 851,781 946,323 420,700 446,943 463,842 488,739 84,079 82,849 78,290 19 National defense 227,413 252,748 114,639 118,286 124,186 134,675 23,915 20,945 21,268 20 International affairs 15,876 16,176 5,426 8,550 6,675 8,367 1,121 550 -208 21 General science, space, and technology ... 8,317 8,627 3,981 4,473 4,230 4,727 853 689 840 22 Energy 7,086 5,685 1,080 1,423 680 3,305 384 248 179 23 Natural resources and environment 12,593 13,357 5,463 7,370 5,892 7,553 1,306 1,216 838 24 Agriculture 13,613 25,565 7,129 8,524 11,705 15,412 4,407 3,270 2,103 25 Commerce and housing credit 6,917 4,229 2,572 2,663 -260 644 -33 280 -725 26 Transportation 23,669 25,838 10,616 13,673 11,440 15,360 2,387 2,025 1,723 27 Community and regional development 7,673 7,680 3,154 4,836 3,408 3,901 615 603 519 28 Education, training, employment, social services 27,579 29,342 13,445 13,737 14,149 14,481 2,058 2,666 2,727 29 Health 30,417 33,542 15,551 15,692 16,945 17,237 2,799 3,174 2,885 30 Social security and medicare 235,764 254,446 119,420 119,613 128,351 129,037 21,502 22,399 21,641 31 Income security 112,668 128,200 58,684 61,558 65,246 59,457r 10,022 10,778 10,683 32 Veterans benefits and services 25,614 26,352 12,849 13,317 11,956 14,527 2,418 2,077 2,327 33 Administration of justice 5,660 6,277 2,807 2,992 3,016 3,212 587 646 567 34 General government 5,053 5,228 2,462 2,552 2,857 3,634 1,287 313 375 35 General-purpose fiscal assistance 6,768 6,353 2,943 3,458 2,659 3,391 45 1,163 172 36 Net interest' 111,058 129,436 54,748 61,293 65,143 67,448 11,287 12,364 12,958 37 Undistributed offsetting receipts6 -31,957 -32,759 -16,270 -17,061 -14,436 -17,953 -2,881 -2,557 -2,583 1. Old-age, disability, and hospital insurance, and railroad retirement accounts. 5. Net interest function includes interest received by trust funds. 2. Old-age, disability, and hospital insurance. 6. Consists of rents and royalties on the outer continental shelf and U.S. 3. Federal employee retirement contributions and civil service retirement and government contributions for employee retirement. disability fund. 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. receipts. Government," and the Budget of the U.S. Government. Fiscal Year 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • May 1986 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1983 1984 1985 IItteemm Dec. 3! Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 1,415.3 1,468.3 1,517.2 1,576.7 1,667.4 1,715.1 1,779.0 1,827.5 1,950.3 2 Public debt securities 1,410.7 1,463.7 1,512.7 1,572.3 1,663.0 1,710.7 1,774.6 1,823.1 1,945.9 3 Held by public 1,174.4 1,223.9 1,255.1 1,309.2 1,373.4 1,415.2 1,460.5 1,506.6 1,597.1 4 Held by agencies 236.3 239.8 257.6 263.1 289.6 295.5 314.2 316.5 348.9 5 Agency securities 4.6 4.6 4.5 4.5 4.5 4.4 4.4 4.4 4.4 6 Held by public 3.5 3.5 3.4 3.4 3.4 3.3 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 1,411.4 1,464.5 1,513.4 1,573.0 1,663.7 1,711.4 1,775.3 1,823.8 1,932.4 9 Public debt securities 1,410.1 1,463.1 1,512.1 1,571.7 1,662.4 1,710.1 1,774.0 1,822.5 1,931.1 10 Other debt1 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 11 MEMO: Statutory debt limit 1,490.0 1,490.0 1,520.0 1,573.0 1,823.8 1,823.8 1,823.8 1,823.8 2,078.7 1. Includes guaranteed debt of government agencies, specified participation NOTE. Data from Treasury Bulletin and Daily Treasury Statement (U.S. certificates, notes to international lending organizations, and District of Columbia Treasury Department), stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1985 TTyyppee aanndd hhoollddeerr 11998811 11998822 11998833 11998844 Q1 Q2 Q3 Q4 1 Total gross public debt 1,028.7 1,197.1 1,410.7 1,663.0 1,710.7 1,774.6 1,823.1 1,945.9 By type 2 Interest-bearing debt 1,027.3 1,195.5 1,400.9 1,660.6 1,695.2 1,759.8 1,821.0 1,943.4 3 Marketable 720.3 881.5 1,050.9 1,247.4 1,271.7 1,310.7 1,360.2 1,437.7 4 Bills 245.0 311.8 343.8 374.4 379.5 381.9 384.2 399.9 5 Notes 375.3 465.0 573.4 705.1 713.8 740.9 776.4 812.5 6 Bonds 99.9 104.6 133.7 167.9 178.4 187.9 199.5 211.1 7 Nonmarketable1 307.0 314.0 350.0 413.2 423.6 449.1 460.8 505.7 8 State and local government series 23.0 25.7 36.7 44.4 47.7 53.9 62.8 87.5 9 Foreign issues2 19.0 14.7 10.4 9.1 9.1 8.3 6.6 7.5 10 Government 14.9 13.0 10.4 9.1 9.1 8.3 6.6 7.5 11 Public 4.1 1.7 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 68.1 68.0 70.7 73.1 74.1 75.4 77.0 78.1 13 Government account series3 196.7 205.4 231.9 286.2 292.2 311.0 313.9 332.2 14 Non-interest-bearing debt 1.4 1.6 9.8 2.3 15.5 14.8 2.1 2.5 By holder4 15 U.S. government agencies and trust funds 203.3 209.4 236.3 289.6 295.5 314.2 316.5 348.9 16 Federal Reserve Banks 131.0 139.3 151.9 160.9 161.0 169.1 169.7 181.3 17 Private investors 694.5 848.4 1,022.6 1,212.5 1,254.1 1,292.0 1,338.2 1,431.3 18 Commercial banks 111.4 131.4 188.8 183.4 195.0 196.3 196.9 192.2 19 Money market funds 21.5 42.6 22.8 25.9 26.7 24.8 22.7 25.1 20 Insurance companies 29.0 39.1 56.7 76.4 80.4 85.0 88.6 93.2 21 Other companies 17.9 24.5 39.7 50.1 50.8 50.7 54.9 62.0 22 State and local governments 104.3 127.8 155.1 179.4 189.7 198.9 212.8 n.a. Individuals 23 Savings bonds 68.1 68.3 71.5 74.5 75.4 76.7 78.2 79.8 74 Other securities 42.7 48.2 61.9 69.3 69.7 72.0 73.2 74.9 25 Foreign and international5 136.6 149.5 166.3 192.9 186.4 200.7 209.8 214.6 26 Other miscellaneous investors6 163.0 217.0 259.8 360.6 380.0 386.9 401.2 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 1986 1986 week ending Wednesday IItteemm 11998833 11998844 11998855 Dec/ Jan/ Feb. Jan. 22 Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Immediate delivery2 1 U.S. government securities 42,135 52,778 75,329 80,858 89,113 102,381 91,584 90,033r 94,844 92,516 102,692 103,373 By maturity 2 Bills 22,393 26,035 32,898 31,630 36,022 34,736 42,554 38,246' 33,025 34,897 35,553 34,271 3 Other within 1 year 708 1,305 1,811 2,224 2,082 1,847 1,455 1,434 2,159 1,390 1,843 1,647 4 1-5 years 8,758 11,733 18,360 20,027 20,571 25,649 19,225 22,525' 29,064 20,649 25,666 27,081 5-10 years 5,279 7,606 12,703 14,786 17,335 20,870 15,662 15,461 16,619 16,231 19,786 20,905 6 Over 10 years 4,997 6,099 9,556 12,191 13,103 19,279 12,687 12,367 13,977 19,349 19,845 19,469 By type of customer 7 U.S. government securities dealers 2,257 2,919 3,336 2,845 3,123 2,902 2,511 2,758 4,198 3,020 2,746 2,602 8 U.S. government securities brokers 21,045 25,580 36,222 38,008 46,032 51,381 49,735 45,994' 48,968 47,483 48,991 51,334 9 All others3 18,833 24,278 35,770 40,005 39,959 48,098 39,337 41,281' 41,678 42,012 50,956 49,438 10 Federal agency securities 5,576 7,846 11,640 15,317 13,653 15,232 11,893 11,616' 11,532 11,300 20,615 15,812 11 Certificates of deposit 4,333 4,947 4,015 3,795 4,506 3,735 4,262 4,223 3,380 3,008 3,715 4,251 12 Bankers acceptances 2,642 3,243 3,242 2,862 3,206 3,330 3,406 3,121 3,465 2,636 3,823 3,250 13 Commercial paper 8,036 10,018 12,717 16,579 17,792 16,317 1177,,339966 16,670 16,594 14,455 18,198 15,941 Futures transactions4 14 Treasury bills 6,655 6,947 5,560 4,884 4,484 5,410 6,014 5,203 5,160 5,506 3,790 6,540 15 Treasury coupons 2,501 4,503 6,069 6,774 8,135 9,137 9,151 6,615 8,184 8,537 8,247 9,588 16 Federal agency securities 265 262 240 229 41 2 13 10 1 5 2 1 Forward transactions5 17 U.S. government securities 1,493 1,364 1,282 1,319 1,303 2,592 1,128 1,373 2,985 4,304 1,639 1,374 18 Federal agency securities 1,646 2,843 3,857 6,176 6,122 6,652 5,687 4,508 5,670 6,226 8,029 6,178 1. Transactions are market purchases and sales of securities as reported to the securities, nondealer departments of commercial banks, foreign banking agencies, Federal Reserve Bank of New York by the U.S. government securities dealers on and the Federal Reserve System. its published list of primary dealers. 4. Futures contracts are standardized agreements arranged on an organized Averages for transactions are based on the number of trading days in the period. exchange in which parties commit to purchase or sell securities for delivery at a The figures exclude allotments of, and exchanges for, new U.S. government future date. securities, redemptions of called or matured securities, purchases or sales of 5. Forward transactions are agreements arranged in the over-the-counter securities under repurchase agreement, reverse repurchase (resale), or similar market in which securities are purchased (sold) for delivery after 5 business days contracts. from the date of the transaction for government securities (Treasury bills, notes, 2. Data for immediate transactions do not include forward transactions. and bonds) or after 30 days for mortgage-backed agency issues. 3. Includes, among others, all other dealers and brokers in commodities and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • May 1986 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1985 1986 1986 week ending Wednesday Dec. Jan. Feb. Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Positions Net immediate2 1 U.S. government securities 14,082 5,429 7,391 10,374 8,657 11,709 11,823 14,200 7,738 9,371 12,636 2 Bills 10,800 5,500 10,075 14,060 14,023 16,080 16,457 18,220 15,535 15,271 15,273 3 Other within 1 year 921 63 1,050 1,520 1,640 2,804 1,898 2,315 2,452 2,816 3,250 4 1-5 years 1,912 2,159 5,154 8,850 9,779 8,794 11,574 11,527 9,518 6,115 8,247 5 5-10 years -78 -1,119 -6,202 -10,999 -12,337 -11,176 -12,552 -13,649 -14,445 -9,903 -9,257 6 Over 10 years 528 -1,174 -2,686 -3,057 -4,448 -4,793 -5,554 -4,213 -5,322 -4,928 -4,878 7 Federal agency securities 7,313 15,294 22,860 33,144 34,498 33,053 32,388 32,052 32,794 32,774 33,278 8 Certificates of deposit 5,838 7,369 9,192 10,630 10,862 9,434 9,652 9,697 8,945 8,917 9,858 9 Bankers acceptances 3,332 3,874 4,586 5,475 4,668 5,591 4,983 5,488 5,034 5,694 5,935 10 Commercial paper 3,159 3,788 5,570 7,957 5,919 6,836 5,819 6,193 6,215 6,647 7,277 Futures positions 11 Treasury bills -4,125 -4,525 -7,322 -12,469 -14,656 -18,498 -14,949 -15,508 -16,942 -17,230 -20,266 12 Treasury coupons -1,033 1,794 4,465 3,269 3,965 5,004 4,612 3,928 5,114 5,195 5,404 13 Federal agency securities 171 233 -722 -1,050 -612 -313 -280 -301 -316 -317 -313 Forward positions 14 U.S. government securities -1,936 -1,643 -910 -388 -1,978 -939 -1,663 -1,349 -1,208 -1,097 -261 15 Federal agency securities -3,561 -9,205 -9,420 -14,289 -12,154 -10,037 -9,726 -9,914 -10,644 -9,959 -9,471 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 29,099 44,078 68,035 79,435 87,103 86,481 84,763 83,782 83,770 88,241 85,138 17 Term agreements 52,493 68,357 80,509 99,204 100,238 101,330 104,458 102,254 101,146 98,958 102,277 Repurchase agreements5 18 Overnight and continuing 57,946 75,717 101,410 120,458 131,069 131,711 130,298 134,131 125,776 134,100 131,372 19 Term agreements 44,410 57,047 77,748 90,233 84,681 86,748 88,960 85,565 87,625 83,239 88,378 1. Data for dealer positions and sources of financing are obtained from reports ties involved are not available for trading purposes. Immediate positions include submitted to the Federal Reserve Bank of New York by the U.S. government reverses to maturity, which are securities that were sold after having been securities dealers on its published list of primary dealers. obtained under reverse repurchase agreements that mature on the same day as the Data for positions are averages of daily figures, in terms of par value, based on securities. Data for immediate positions do not include forward positions. the number of trading days in the period. Positions are net amounts and are shown 3. Figures cover financing involving U.S. government and federal agency on a commitment basis. Data for financing are in terms of actual amounts securities, negotiable CDs, bankers acceptances, and commercial paper. borrowed or lent and are based on Wednesday figures. 4. Includes all reverse repurchase agreements, including those that have been 2. Immediate positions are net amounts (in terms of par values) of securities arranged to make delivery on short sales and those for which the securities owned by nonbank dealer firms and dealer departments of commercial banks on a obtained have been used as collateral on borrowings, that is, matched agreements. commitment, that is, trade-date basis, including any such securities that have 5. Includes both repurchase agreements undertaken to finance positions and been sold under agreements to repurchase (RPs). The maturities of some "matched book" repurchase agreements. repurchase agreements are sufficiently long, however, to suggest that the securi- 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 1986 AAggeennccyy 11998822 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. 1 Federal and federally sponsored agencies 237,787 240,068 271,220 289,277 288,657 292,584 293,930 293,905 n.a. 2 Federal agencies 33,055 33,940 35,145 35,338 35,903 35,990 36,121 36,390 36,400 3 Defense Department1 354 243 142 89 82 79 75 71 66 4 Export-Import Bank2'3 14,218 14,853 15,882 15,744 15,419 15,417 15,417 15,678 15,677 5 Federal Housing Administration4 288 194 133 116 117 116 115 115 113 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 1,940 1,940 1,940 1,940 1,940 8 Tennessee Valley Authority 14,365 14,970 15,435 16,180 16,106 16,199 16,335 16,347 16,365 9 United States Railway Association6 194 111 51 74 74 74 74 74 74 10 Federally sponsored agencies7 204,732 206,128 236,075 253,939 252,754 256,594 257,809 257,515 n.a. 11 Federal Home Loan Banks 55,967 48,930 65,085 71,949 72,384 73,260 73,840 74,447 73,201 17 Federal Home Loan Mortgage Corporation 4,524 6,793 10,270 13,393 12,720 13,239 11,016 11,926 n.a. 13 Federal National Mortgage Association8 70,052 74,594 83,720 91,318 91,693 92,578 94,576 93,896 92,658 14 Farm Credit Banks 73,004 72,816 71,193 70,092 68,287 69,274 69,933 68,851 66,600 15 Student Loan Marketing Association 2,293 3,402 5,745 7,187 7,670 8,243 8,444 8,395 8,643 MEMO 16 Federal Financing Bank debt9 126,424 135,791 145,217 152,941 153,513 153,565 154,226 153,373 153,709 Lending to federal and federally sponsored 17 Export-Import Bank3 14,177 14,789 15,852 15,729 15,409 15,409 15,409 15,670 15,670 18 Postal Service6 1,221 1,154 1,087 720 1,690 1,690 1,690 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 14,455 14,381 14,474 14,610 14,622 14,690 21 United States Railway Association6 194 111 51 74 74 74 74 74 74 Other Lending10 n Farmers Home Administration 53,261 55,266 58,971 63,779 64,169 63,969 64,189 64,234 64,354 73 Rural Electrification Administration 17,157 19,766 20,693 21,463 21,676 21,792 21,826 20,654 20,678 24 Other 22,774 26,460 29,853 31,721 31,114 31,157 31,428 31,429 31,553 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 • May 1986 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1985 1986 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11998833 11998844 11998855 oorr uussee June July Aug. Sept. Oct. Nov. Dec/ Jan. 1 All issues, new and refunding1 86,421 106,641 214,189 11,801 12,268 15,239 13,345 20,780 32,144 57,430 1,755 Type of issue 2 General obligation 21,566 26,485 52,622 2,739 5,257 3,160 3,953 5,852 6,695 8,754 705 3 U.S. government loans2 96 16 14 0 0 0 0 0 0 0 0 4 Revenue 64,855 80,156 161,567 9,062 7,011 12,079 9,392 14,928 25,449 48,676 1,050 5 U.S. government loans2 253 17 27 1 6 2 0 6 7 0 0 Type of issuer 6 State 7,140 9,129 13,004 350 786 800 1,501 1,337 1,648 2,146 296 7 Special district and statutory authority 51,297 63,550 66,822 7,625 6,893 9,484 7,580 12,374 21,563 39,147 762 8 Municipalities, counties, townships, school districts 27,984 33,962 134,363 3,826 4,589 4,955 4,264 6,371 21,563 16,137 697 9 Issues for new capital, total 72,441 94,050 156,050 7,966 7,660 10,709 9,878r 13,984' 21,362 46,788 1,540 Use of proceeds 10 Education 8,099 7,553 16,658 962 797 1,194 1,317 1,518 1,954 3,901 365 11 Transportation 4,387 7,552 12,070 276 651 252 471 1,264 3,734 3,480 199 12 Utilities and conservation 13,588 17,844 26,852 1,844 720 1,987 1,358 2,924 3,266 7,070 278 13 Social welfare 26,910 29,928 63,181 2,956 3,155 4,283 3,989 4,305 8,672 22,589 263 14 Industrial aid 7,821 15,415 12,892 560 553 1,524 735 1,507 2,029 3,583 0 15 Other purposes 11,637 15,758 24,398 1,368 1,784 1,469 2,009 2,466 1,707 6,165 435 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 1986 Type of i o s r s u u e s e o r issuer, 11998833 11998844 11998855'' June July Aug. Sept. Oct. Nov. Dec. Jan. p 1 All issues1 120,149' 132,531r 155,554 19,497' 12,042' 14,861' 11,304' 11,595' 13,568' 19,429 17,034 2 Bonds2 68,570' 109,903' 120,039 15,757' 8,835' 11,465' 8,833' 9,271' 10,913' 14,440 13,900 Type of offering 3 Public 47,444' 73,579' 120,039 15,757' 8,835' 11,465' 8,833' 9,271' 10,913' 14,440' 13,900 4 Private placement 21,126 36,326 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 16,851 24,607 34,776 8,044 2,688 2,352 2,079 1,953 4,072 2,704 4,694 6 Commercial and miscellaneous 7,540 13,726 9,723 865 1,642 921 186 898 933 735 624 7 Transportation 3,833 4,694 3,032 512 76 459 177 348 125 187 633 8 Public utility 9,125 10,679 8,870 585 434 857 1,042 863 1,114 1,090 820 9 Communication 3,642 2,997 6,183 125 110 1,295 367 690 100 2,318 0 10 Real estate and financial 27,577r 53,199' 57,457 5,626' 3,885' 5,581' 4,982' 4,519' 4,569' 7,407 7,129 11 Stocks3 51,579 22,628 35,515 3,740 3,207 3,396 2,471 2,324 2,655 4,989 3,134 Type 12 Preferred 7,213 4,118 6,505 726 631 754 653 406 782 908 570 13 Common 44,366 18,510 29,010 3,014 2,576 2,642 1,818 1,918 1,873 4,081 2,564 Industry group 14 Manufacturing 14,135 4,054 5,700 558 605 235 820 279 746 1,045 825 15 Commercial and miscellaneous 13,112 6,277 9,149 1,453 568 1,293 507 403 596 1,220 648 16 Transportation 2,729 589 1,544 236 0 127 107 113 21 200 78 17 Public utility 5,001 1,624 1,966 91 87 73 47 408 12 201 251 18 Communication 1,822 419 978 151 99 18 7 41 5 146 231 19 Real estate and financial 14,780 9,665 16,178 1,251 1,848 1,650 983 1,080 1,275 2,177 1,101 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 1986 IItteemm 11998844 11998855'' June July Aug. Sept. Oct. Nov. Dec.' Jan. INVESTMENT COMPANIES' 1 Sales of own shares2 107,480 222,680 18,191 20,284 18,049 16,936 22,099 20,585 23,560 32,590 2 Redemptions of own shares3 77,032 132,435 9,836 11,502 10,837 9,963 10,653 11,138 18,337 15,867 3 Net sales 30,448 90,245 8,355 8,782 7,212 6,973 11,446 9,447 5,223 16,723 4 Assets4 137,126 251,695 186,284 195,707 201,608 203,210 218,720 237,410 251,536 265,235 5 Cash position5 12,181 20,607 15,565 16,943 17,959 18,700 21,987 21,894 20,590 23,332 6 Other 124,945 231,088 170,719 178,764 183,649 184,510 196,733 215,516 230,946 241,903 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. 1984 1985 AAccccoouunntt 11998833 11998844 11998855 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Corporate profits with inventory valuation and capital consumption adjustment 213.8 273.3 297.0 268.0 277.8 271.2 276.2 281.7 288.1 309.1 309.1 2 Profits before tax 205.0 237.6 226.8 247.4 247.4 227.7 228.0 220.0 218.7 228.6 239.8 3 Profits tax liability 75.2 93.6 85.9 99.1 100.6 87.4 87.4 83.4 82.3 87.4 90.4 4 Profits after tax 129.8 144.0 140.9 148.3 146.7 140.3 140.6 136.6 136.4 141.1 149.5 5 Dividends 70.8 78.1 83.5 75.3 77.5 78.9 80.7 82.0 83.1 83.9 85.0 6 Undistributed profits 59.0 65.9 57.4 73.1 69.2 61.3 60.0 54.6 53.3 57.3 64.5 7 Inventory valuation -9.9 -5.4 -.6 -13.0 -5.6 -1.3 -1.6 .7 2.2 4.7 -10.1 8 Capital consumption adjustment 18.8 41.0 70.9 33.5 36.0 44.8 49.8 61.1 67.2 75.9 79.4 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 • May 1986 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities Billions of dollars, except for ratio 1984 1985 AAccccoouunntt 11997799 11998800 11998811 11998822 11998833 Q3 Q4 Q1 Q2 Q3 1 Current assets 1,214.8 1,328.3 1,419.6 1,437.1 1,575.9 1,685.9 1,703.0 1,715.9 1,725.2 1,750.5 2 Cash 118.0 127.0 135.6 147.8 171.8 161.3 173.6 167.9 170.6 178.6 3 U.S. government securities 16.7 18.7 17.7 23.0 31.0 33.0 36.2 34.7 34.1 31.1 4 Notes and accounts receivable 459.0 507.5 532.5 517.4 583.0 639.1 633.1 647.4 648.5 653.2 5 Inventories 505.1 543.0 584.0 579.0 603.4 659.3 656.9 664.7 663.7 670.1 6 Other 116.0 132.1 149.7 169.8 186.7 193.2 203.2 201.1 208.3 217.4 7 Current liabilities 807.3 890.6 971.3 986.0 1,059.6 1,155.0 1,163.6 1,171.5 1,176.0 1,203.8 8 Notes and accounts payable 460.8 514.4 547.1 550.7 595.7 642.2 647.8 635.3 647.3 664.2 9 Other 346.5 376.2 424.1 435.3 463.9 512.9 515.8 536.2 528.7 539.5 10 Net working capital 407.5 437.8 448.3 451.1 516.3 530.8 539.5 544.4 549.3 546.7 11 MEMO: Current ratio1 1.505 1.492 1.462 1.458 1.487 1.460 1.464 1.465 1.467 1.454 1. Ratio of total current assets to total current liabilities. Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. NOTE. For a description of this series, see "Working Capital of Nonfinancial 20551. Corporations" in the July 1978 BULLETIN, pp. 533-37. SOURCE. Federal Trade Commission and Bureau of the Census. All data in this table reflect the most current benchmarks. Complete data are available upon request from the Flow of Funds Section, Division of Research and 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1984 1985 1986 IInndduussttrryy 11998833 11998844 11998855 Q2 Q3 Q4 Q1 Q2 Q3 Q4L 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 73.96 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 S 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.% 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.% 164.30 ATrade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade; finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A37 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1984 1985 AAccccoouunntt 11998811 11998822 11998833 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ASSETS Accounts receivable, gross 1 Consumer 72.4 78.1 87.4 90.5 95.6 96.7 99.1 106.0 116.4 120.8 2 Business 100.3 101.4 113.4 124.4 124.5 135.2 142.1 144.6 141.4 152.8 3 Real estate 17.9 20.2 22.5 23.0 25.2 26.3 27.2 28.4 29.0 30.4 4 Total 190.5 199.7 223.4 238.0 245.3 258.3 268.5 279.0 286.5 304.0 Less: 5 Reserves for unearned income 30.0 31.9 33.0 33.9 36.0 36.5 36.6 38.6 41.0 40.9 6 Reserves for losses 3.2 3.5 4.0 4.4 4.3 4.4 4.9 4.8 4.9 5.0 7 Accounts receivable, net 157.3 164.3 186.4 199.6 205.0 217.3 227.0 235.6 240.6 258.1 8 All other 27.1 30.7 34.0 35.8 36.4 35.4 35.9 39.5 46.3 46.8 9 Total assets 184.4 195.0 220.4 235.4 241.3 252.7 262.9 275.2 286.9 304.9 LIABILITIES 10 Bank loans 16.1 18.3 18.7 18.3 19.7 21.3 19.8 18.5 18.2 21.0 11 Commercial paper 57.2 51.1 59.7 68.5 66.8 72.5 79.1 82.6 93.6 96.9 Debt 12 Other short-term 11.3 12.7 13.9 15.5 16.1 16.2 16.8 16.6 16.6 17.2 13 Long-term 56.0 64.4 68.1 69.7 73.8 77.2 78.3 85.7 86.4 93.0 14 All other liabilities 18.5 21.2 30.1 32.1 32.6 33.1 35.4 36.9 36.6 39.6 15 Capital, surplus, and undivided profits 25.3 27.4 29.8 31.4 32.3 32.3 33.5 34.8 35.7 37.1 16 Total liabilities and capital 184.4 195.0 220.4 235.4 241.3 252.7 262.9 275.2 286.9 304.9 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 1986 1985 1986 1985 1986 JJJaaannn... 333111,,, 111999888666''' Nov. Dec. Jan. Nov. Dec. Jan. Nov. Dec. Jan. 1 Total 153,965 2,181 2,129 2,704 29,341 29,677 28,862 27,160 27,548 26,158 Retail financing of installment sales 2 Automotive (commercial vehicles) 14,556 199 -76 242 1,081 821 1,128 882 896 886 3 Business, industrial, and farm equipment 20,432 -185 527 -5 1,202 1,365 686 1,387 838 691 Wholesale financing 4 Automotive 23,035 1,358 2,277 285 10,747 11,813 10,681 9,389 9,536 10,396 5 Equipment 4,317 63 -265 153 591 536 689 528 801 536 6 All other 7,298 267 156 305 1,861 1,799 1,779 1,594 1,643 1,474 Leasing 7 Automotive 15,520 -832 -109 272 700 719 949 1,532 828 677 8 Equipment 40,388 574 -15 700 1,754 1,696 1,932 1,180 1,711 1,232 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,285 526 -348 668 10,182 9,502 9,560 9,656 9,850 8,892 10 All other business credit 12,134 211 -18 84 1,223 1,427 1,458 1,012 1,445 1,374 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 DomesticN onfinancial Statistics • May 1986 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1985 1986 item Aug. Sept. Oct. Nov. Dec. Jan. Feb. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 92.8 96.8 104.1 104.4 104.6 104.1 107.5 111.5 108.4' 112.7 2 Amount of loan (thousands of dollars) 69.5 73.7 77.4 74.4 76.7 77.1 78.5 80.3 77.6' 82.8 3 Loan/price ratio (percent) 77.1 78.7 77.1 74.6 76.0 76.0 75.5 75.0 74.4' 75.3 4 Maturity (years) 26.7 27.8 26.9 24.5 26.7 26.7 26.4 26.7 25.4' 27.0 5 Fees and charges (percent of loan amount)2 2.40 2.64 2.53 2.46 2.62 2.49 2.57 2.59 2.55' 2.70 6 Contract rate (percent per annum) 12.20 11.87 11.12 10.78 10.69 10.64 10.55 10.47 10.4(K 10.21 Yield (percent per annum) 7 FHLBB series5 12.66 12.37 11.58 11.24 11.17 11.09 11.01 10.94 10.89' 10.69 8 HUD series4 13.43 13.80 12.28 12.06 12.02 11.86 11.56 11.03 10.82 10.49 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.11 13.81 12.24 11.99 12.04 11.87 11.28 10.70 10.78 10.59 10 GNMA securities6 12.25 13.13 11.61 11.24 11.29 11.16 10.81 10.39 10.25 9.79 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 74,847 83,339 94,574 96,324 96,769 97,228 97,807 98,282 98,671 98,820 12 FHA/VA-insured 37,393 35,148 34,244 34,177 34,084 33,885 33,828 33,684 33,583 33,466 13 Conventional 37,454 48,191 60,331 62,147 62,685 63,343 63,979 64,598 65,088 65,354 Mortgage transactions (during period) 14 Purchases 17,554 16,721 21,510 1,921 1,739 1,767 1,624 1,663 1,188 1,159 15 Sales 3,528 978 1,301 230 101 200 100 319 0 n.a. Mortgage commitments7 16 Contracted (during period) 18,607 21,007 20,155 1,797 1,638 1,733 1,199 1,858 1,315 2,578 17 Outstanding (end of period) 5,461 6,384 3,402 4,245 3,974 3,840 3,330 3,402 3,211 4,642 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of periodJ8 18 Total 5,996 9,283 12,399 13,521 13,088 13,025 13,194 14,022 n.a. n.a. 19 FHA/VA 974 910 841 835 829 823 816 825 n.a. n.a. 20 Conventional 5,022 8,373 11,558 12,686 12,259 12,202 12,378 13,197 n.a. n.a. Mortgage transactions (during period) 21 Purchases 23,089 21,886 44,012 3,602 4,219 3,215 3,680 6,0% n.a. n.a. 22 Sales 19,686 18,506 38,905 2,682 4,501 3,076 3,449 5,202 n.a. n.a. Mortgage commitments9 23 Contracted (during period) 32,852 32,603 48,989 3,958 2,919 3,995 4,854 5,651 n.a. n.a. 24 Outstanding (end of period) 16,964 13,318 16,613 n.a. n.a. n.a. n.a. 16,613 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 11998833 11998844 11998855 Q4 Ql Q2 Q3 Q4 1 All holders 1,811,540 2,022,769 2,250,370 2,022,769 2,069,664 2,127,381 2,187,756 2,250,370 2 1- to 4-family 1,189,811 1,319,413 1,469,075 1,319,413 1,347,567 1,385,620 1,426,569 1,469,075 3 Multifamily 158,718 178,795 203,556 178,795 184,591 189,818 195,368 203,556 4 Commercial 350,389 412,924 471,037 412,924 425,941 441,212 457,064 471,037 5 Farm 112,622 111,637 106,702 111,637 111,565 110,731 108,755 106,702 6 Selected financial institutions 1,130,781 1,267,488 1,386,865 1,267,488 1,289,271 1,321,054 1,353,888 1,386,865 7 Commercial banks1 330,521 374,780 423,003 374,780 383,598 396,141 410,653 423,003 8 1- to 4-family 182,514 196,540 214,340 196,540 198,849 203,654 209,724 214,340 9 Multifamily 18,410 20,216 22,906 20,216 20,609 21,544 22,239 22,906 10 Commercial 120,210 147,845 174,336 147,845 153,827 160,315 167,603 174,336 11 Farm 9,387 10,179 11,421 10,179 10,313 10,628 11,087 11,421 12 Savings banks 131,940 154,441 177,774 154,441 161,032 165,705 174,427 177,774 13 1- to 4-family 93,649 107,302 122,323 107,302 111,592 114,375 119,952 122,323 14 Multifamily 17,247 19,817 23,360 19,817 20,668 21,357 22,604 23,360 15 Commercial 21,016 27,291 32,009 27,291 28,741 29,942 31,757 32,009 16 Farm 28 31 82 31 31 31 114 82 17 Savings and loan associations 494,789 555,277 587,799 555,277 559,263 569,291 575,864 587,799 18 1- to 4-family 387,924 421,489 432,564 421,489 421,024 425,021 426,432 432,564 19 Multifamily 44,333 55,750 67,006 55,750 57,660 60,231 62,499 67,006 20 Commercial 62,403 77,605 87,617 77,605 80,070 83,447 86,255 87,617 21 Farm 129 433 612 433 509 592 678 612 22 Life insurance companies 150,999 156,699 167,887 156,699 158,162 161,485 163,929 167,887 23 1- to 4-family 15,319 14,120 13,499 14,120 13,840 13,562 13,382 13,499 24 Multifamily 19,107 18,938 19,453 18,938 18,964 18,983 18,972 19,453 25 Commercial 103,831 111,175 122,925 111,175 113,187 116,812 119,543 122,925 26 Farm 12,742 12,466 12,010 12,466 12,171 12,128 12,032 12,010 27 Finance companies2 22,532 26,291 30,402 26,291 27,216 28,432 29,015 30,402 28 Federal and related agencies 148,328 158,993 166,183 158,993 163,531 165,912 166,248 166,183 29 Government National Mortgage Association 3,395 2,301 1,473 2,301 1,964 1,825 1,640 1,473 30 1- to 4-family 630 585 539 585 576 564 552 539 31 Multifamily 2,765 1,716 934 1,716 1,388 1,261 1,088 934 32 Farmers Home Administration 2,141 1,276 733 1,276 1,062 790 577 733 33 1- to 4-family 1,159 213 183 213 156 223 185 183 34 Multifamily 173 119 113 119 82 136 139 113 35 Commercial 409 497 159 497 421 163 72 159 36 Farm 400 447 278 447 403 268 181 278 37 Federal Housing and Veterans 4,894 4,816 4,903 4,816 4,878 4,888 4,918 4,903 Administration 1,893 2,048 2,246 2,048 2,181 2,199 2,251 2,246 38 1- to 4-family 3,001 2,768 2,657 2,768 2,697 2,689 2,667 2,657 39 Multifamily 78,256 87,940 98,282 87,940 91,975 94,777 96,769 98,282 40 Federal National Mortgage Association .... 73,045 82,175 91,966 82,175 86,129 88,788 90,590 91,966 41 1- to 4-family 5,211 5,765 6,316 5,765 5,846 5,989 6,179 6,316 42 Multifamily 52,010 52,261 47,548 52,261 52,104 51,056 49,255 47,548 43 Federal Land Banks 3,081 3,074 2,798 3,074 3,064 3,006 2,895 2,798 44 1- to 4-family 48,929 49,187 44,750 49,187 49,040 48,050 46,360 44,750 45 Farm 7,632 10,399 13,244 10,399 11,548 12,576 13,089 13,244 46 Federal Home Loan Mortgage Corporation. 7,559 9,654 11,208 9,654 10,642 11,288 11,457 11,208 47 1- to 4-family 73 745 2,036 745 906 1,288 1,632 2,036 48 Multifamily 285,073 332,057 413,913 332,057 347,793 365,748 388,948 413,913 49 Mortgage pools or trusts3 159,850 179,981 212,145 179,981 185,954 192,925 201,026 212,145 50 Government National Mortgage Association 155,950 175,589 207,198 175,589 181,419 188,228 196,198 207,198 51 1- to 4-family 3,900 4,392 4,947 4,392 4,535 4,697 4,828 4,947 52 Multifamily 57,895 70,822 99,088 70,822 76,759 83,327 91,915 99,088 53 Federal Home Loan Mortgage Corporation. 57,273 70,253 98,182 70,253 75,781 82,369 90,997 98,182 54 1- to 4-family 622 569 906 569 978 958 918 906 55 Multifamily 25,121 36,215 54,987 36,215 39,370 42,755 48,769 54,987 56 Federal National Mortgage Association 25,121 35,965 54,036 35,965 38,772 41,985 47,857 54,036 57 1- to 4-family n.a. 250 951 250 598 770 912 951 58 Multifamily 42,207 45,039 47,693 45,039 45,710 46,741 47,238 47,693 59 Farmers Home Administration 20,404 21,813 22,186 21,813 21,928 21,962 22,090 22,186 60 1- to 4-family 5,090 5,841 6,675 5,841 6,041 6,377 6,415 6,675 61 Multifamily 7,351 7,559 8,189 7,559 7,681 8,014 8,192 8,189 62 Commercial 9,362 9,826 10,643 9,826 10,060 10,388 10,541 10,643 63 Farm 247,358 264,231 283,409 264,231 269,069 274,667 278,672 283,409 64 Individual and others4 141,758 152,302 165,405 152,302 154,398 159,964 162,992 165,405 65 1- to 4-family 38,786 41,909 45,296 41,909 43,619 43,538 44,276 45,296 66 Multifamily 35,169 40,952 45,802 40,952 42,014 42,519 43,642 45,802 67 Commercial 31,645 29,068 26,906 29,068 29,038 28,646 27,762 26,906 68 Farm 1. Includes loans held by nondeposit trust companies but not bank trust 4. Other holders include mortgage companies, real estate investment trusts, departments. state and local credit agencies, state and local retirement funds, noninsured 2. Assumed to be entirely 1- to 4-family loans. pension funds, credit unions, and other U.S. agencies. 3. Outstanding principal balances of mortgage pools backing securities insured NOTE. Based on data from various institutional and governmental sources, with or guaranteed by the agency indicated. some quarters estimated in part by the Federal Reserve. Multifamily debt refers to loans on structures of five or more units. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 DomesticN onfinancial Statistics • May 1986 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1985 1986 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998844 11998855 May June July Aug. Sept. Oct. Nov. Dec/ Jan. Amounts outstanding (end of period) 1 Total 460,500 550,392 488,666 495,813 503,834 512,393 524,698 531,896 537,215 550,392 550,699 By major holder 2 Commercial banks 212,391 252,024 226,973 229,676 232,913 236,390 241,030 243,573 245,987 252,024 252,340 3 Finance companies .... 96,747 120,842 104,130 105,971 107,985 110,378 116,422 118,846 119,632 120,842 122,878 4 Credit unions 67,858 78,870 72,381 73,468 74,614 75,689 76,447 77,474 78,035 78,870 78,542 5 Retailers2 40,913 42,846 37,472 37,548 37,399 37,481 37,421 37,784 38,905 42,846 40,972 6 Savings and loans 29,945 41,589 34,754 35,901 37,301 38,496 39,421 40,281 40,728 41,589 41,673 7 Gasoline companies ... 4,315 4,304 3,918 4,075 4,316 4,467 4,346 4,241 4,145 4,304 4,364 8 Mutual savings banks.. 8,331 9,917 9,038 9,174 9,306 9,492 9,611 9,697 9,783 9,917 9,930 By major type of credit 9 Automobile 172,589 210.390 187,795 191,315 194,678 197,768 205,102 208,265 209,102 210,390 212,183 10 Commercial banks... 85,501 99,292 92,403 94,099 95,763 96,576 98,042 98,604 98,826 99,292 99,283 11 Credit unions 32,456 37,721 34,620 35,139 35,687 36,201 36,563 37,054 37,322 37,721 37,564 12 Finance companies .. 54,632 73,377 60,772 62,077 63,228 64,991 70,497 72,607 72,954 73,377 75,336 13 Revolving 101,555 123,432 103,492 104,333 105,539 107,584 109,941 111,919 114,927 123,432 121,804 14 Commercial banks... 60,549 80,934 66,311 66,956 68,093 69,949 72,514 74,255 76,310 80,934 81,083 15 Retailers 36,691 38,194 33,263 33,302 33,130 33,168 33,081 33,423 34,472 38,194 36,357 16 Gasoline companies . 4,315 4,304 3,918 4,075 4,316 4,467 4,346 4,241 4,145 4,304 4,364 17 Mobile home 24,556 26,442 24,925 25,205 25,545 25,826 26,043 26,200 26,243 26,442 26,217 18 Commercial banks... 9,610 9,588 9,445 9,480 9,493 9,550 9,600 9,598 9,598 9,588 9,434 19 Finance companies .. 9,243 9,200 9,016 9,061 9,146 9,163 9,170 9,177 9,141 9,200 9,118 20 Savings and loans ... 4,985 6,820 5,699 5,887 6,117 6,313 6,465 6,606 6,679 6,820 6,834 21 Credit unions 718 834 765 777 789 800 808 819 825 834 831 22 Other 161,800 190,128 172,454 174,960 178,072 181,215 183,612 185,512 186,943 190,128 190,495 23 Commercial banks... 56,731 62,210 58,814 59,141 59,564 60,315 60,874 61,116 61,253 62,210 62,540 24 Finance companies .. 32,872 38,265 34,342 34,833 35,611 36,224 36,755 37,062 37,537 38,265 38,204 25 Credit unions 34,684 40,315 36,996 37,552 38,138 38,688 39,076 39,601 39,888 40,315 40,147 26 Retailers 4,222 4,652 4,209 4,246 4,269 4,313 4,340 4,361 4,433 4,652 4,615 27 Savings and loans ... 24,960 34,769 29,055 30,014 31,184 32,183 32,956 33,675 34,049 34,769 34,839 28 Mutual savings banks 8,331 9,917 9,038 9,174 9,306 9,492 9,611 9,697 9,783 9,917 9,930 Net change (during period) 29 Total 76,799 89,892 9,042 5,227 6,247 5,726 11,531 8,417 4,792 5,618 6,876 By major holder 30 Commercial banks 40,413 39,633 4,108 1,690 1,824 1,764 3,748 2,863 3,144 2,244 3,141 31 Finance companies 9,318 24,095 2,373 1,218 1,629 2,371 6,407 3,140 550 897 2,325 32 Credit unions 14,387 11,012 673 797 1,149 479 374 1,471 466 845 482 33 Retailers2 3,443 1,933 341 -31 112 -99 -27 97 245 362 399 34 Savings and loans 6,837 11,644 1,327 1,417 1,338 969 924 620 335 921 562 35 Gasoline companies . . . 184 -11 59 -51 21 103 -43 62 30 170 -45 36 Mutual savings banks . . 2,217 1,586 161 187 174 139 148 164 22 179 12 By major type of credit 37 Automobile 29,475 37,801 3,792 2,686 2,365 2,206 7,204 3,794 1,116 1,295 3,092 38 Commercial banks... 17,944 13,791 1,589 1,488 1,025 136 1,048 494 304 212 1,017 39 Credit unions 6,882 5,265 325 380 550 226 180 705 229 397 263 40 Finance companies .. 4,649 18,745 1,878 818 790 1,844 5,976 2,595 583 686 1,812 41 Revolving 19,578 21,877 2,429 -73 856 936 1,974 2,042 2,615 1,668 1,764 42 Commercial banks... 16,365 20,385 2,095 42 733 968 2,071 1,908 2,386 1,220 1,425 43 Retailers 3,029 1,503 275 -64 102 -135 -54 72 199 278 384 44 Gasoline companies . 184 -11 59 -51 21 103 -43 62 30 170 -45 45 Mobile home 694 1,886 186 196 324 199 168 181 1 341 -35 46 Commercial banks... -232 -22 -21 -31 -22 3 61 13 9 92 -82 47 Finance companies .. -304 -43 -19 1 74 -13 -19 32 -12 59 -27 48 Savings and loans ... 1,079 1,835 219 217 261 204 121 122 0 180 69 49 Credit unions 151 116 7 9 11 5 5 14 4 10 5 50 Other 27,052 28,328 2,635 2,418 2,702 2,385 2,185 2,400 1,060 2,314 2,055 51 Commercial banks... 6,336 5,479 445 191 88 657 568 448 445 720 781 52 Finance companies .. 4,973 5,393 514 399 765 540 450 513 -21 152 540 53 Credit unions 7,354 5,631 341 408 588 248 189 752 233 438 214 54 Retailers 414 430 66 33 10 36 27 25 46 84 15 55 Savings and loans ... 5,758 9,809 1,108 1,200 1,077 765 803 498 335 741 493 56 Mutual savings banks 2,217 1,586 161 187 174 139 148 164 22 179 12 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 1986 IItteemm 11998833 11998844 11998855 July Aug. Sept. Oct. Nov. Dec. Jan. INTEREST RATES Commercial banks1 1 48-month new car2 13.92 13.71 n.a. n.a. 12.72 n.a. n.a. 12.39 n.a. n.a. 2 24-month personal 16.50 16.47 n.a. n.a. 15.84 n.a. n.a. 15.61 n.a. n.a. 3 120-month mobile home2 16.08 15.58 n.a. n.a. 14.72 n.a. n.a. 14.66 n.a. n.a. 4 Credit card 18.78 18.77 n.a. n.a. 18.62 n.a. n.a. 18.57 n.a. n.a. Auto finance companies 5 New car 12.58 14.62 n.a. 12.46 10.87 8.84 9.97 11.71 12.52 9.99 6 Used car 18.74 17.85 n.a. 17.49 17.57 17.31 17.21 17.28 17.22 16.60 OTHER TERMS3 Maturity (months) 7 New car 45.9 48.3 n.a. 51.7 51.1 51.2 51.5 52.0 52.1 51.2 8 Used car 37.9 39.7 n.a. 41.5 41.6 41.4 41.4 41.5 41.4 42.8 Loan-to-value ratio 9 New car 86 88 n.a. 91 91 92 93 92 92 92 10 Used car 92 92 n.a. 95 95 95 95 95 95 95 Amount financed (dollars) 11 New car 8,787 9,333 n.a. 10,355 10,422 10,449 10,498 10,205 9,925 10,064 12 Used car 5,033 5,691 n.a. 6,146 6,139 6,097 6,091 6,167 6,255 6,165 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 Nonfinancial Statistics • May 1986 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1983' 1984r 1985 11998800'' 11998811'' HI H2 HI H2 HI' H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 341.8 372.7 395.3 542.9 765.9 883.8 506.0 579.7 713.4 818.4 735.8 11,,003322..00 By sector and instrument 2 U.S. government 79.2 87.4 161.3 186.6 198.8 223.6 221.9 151.2 172.2 225.4 184.0 263.2 3 Treasury securities 79.8 87.8 162.1 186.7 199.0 223.7 222.0 151.4 172.4 225.5 184.1 263.3 4 Agency issues and mortgages -.6 -.5 -.9 -.1 -.2 -.1 -.1 -.1 -.2 -.1 -.1 -.1 5 Private domestic nonfinancial sectors 262.6 285.3 234.1 356.3 567.1 660.2 284.1 428.5 541.2 593.1 551.8 768.7 6 Debt capital instruments 188.1 154.5 152.6 253.7 325.3 474.3 227.3 280.1 287.7 362.8 367.4 581.2 7 Tax-exempt obligations 30.3 23.4 48.6 57.3 65.8 173.4 57.3 57.4 38.9 92.6 88.4 258.4 8 Corporate bonds 26.7 21.8 18.7 16.0 47.1 67.9 21.4 10.6 31.9 62.3 68.0 67.8 9 Mortgages 131.2 109.3 85.4 180.3 212.4 233.0 148.6 212.1 216.9 207.9 211.1 255.0 10 Home mortgages 94.2 72.2 50.5 116.9 130.7 152.8 98.7 135.2 135.6 125.7 133.8 171.7 11 Multifamily residential 7.6 4.8 5.4 11.9 20.7 25.7 6.1 17.6 23.6 17.7 22.5 28.9 12 Commercial 19.2 22.2 25.2 48.9 62.0 59.0 42.2 55.7 58.5 65.6 57.0 61.1 13 Farm 10.2 10.0 4.2 2.6 -1.0 -4.5 1.6 3.6 -.8 -1.2 -2.3 -6.7 14 Other debt instruments 74.5 130.8 81.4 102.6 241.9 185.9 56.8 148.4 253.5 230.2 184.3 187.5 15 Consumer credit 4.7 22.6 17.7 56.7 94.8 103.6 38.0 75.4 98.0 91.6 113.0 94.2 16 Bank loans n.e.c 37.0 54.7 54.2 26.8 79.5 30.7 13.7 39.8 89.9 69.0 24.0 37.4 17 Open market paper 5.7 19.2 -4.7 -1.6 24.2 12.9 -10.0 6.9 33.5 15.0 13.3 12.4 18 Other 27.1 34.4 14.2 20.7 43.3 38.8 15.1 26.3 32.1 54.6 34.0 43.5 19 By borrowing sector 262.6 285.3 234.1 356.3 567.1 660.2 284.1 428.5 541.2 593.1 551.8 768.7 20 State and local governments 17.2 6.8 25.9 37.6 45.0 128.5 36.0 39.2 21.4 68.6 71.5 185.6 21 Households 118.9 119.7 87.9 187.4 239.2 297.7 152.3 222.6 236.0 242.3 261.8 333.5 22 Farm 15.2 16.6 6.8 4.1 -.1 -6.8 .8 7.4 -.7 .5 -7.6 -6.1 23 Nonfarm noncorporate 31.2 38.6 41.3 70.8 90.8 84.0 56.1 85.5 96.9 84.7 80.8 87.1 24 Corporate 80.1 103.6 72.1 56.4 192.3 156.9 39.0 73.8 187.7 196.9 145.2 168.6 25 Foreign net borrowing in United States 27.2 27.2 15.7 18.9 2.8 -.4 15.4 22.4 23.0 -17.4 -2.4 1.5 26 Bonds .8 5.4 6.7 3.8 4.1 4.9 4.6 2.9 1.1 7.0 5.2 4.7 27 Bank loans n.e.c 11.5 3.7 -6.2 4.9 -7.8 -6.9 11.4 -1.6 -4.5 -11.1 -5.6 -8.1 28 Open market paper 10.1 13.9 10.7 6.0 2.5 -1.0 -4.6 16.5 20.9 -16.0 -4.6 2.5 29 U.S. government loans 4.7 4.2 4.5 4.3 4.0 2.5 3.9 4.6 5.5 2.6 2.6 2.4 30 Total domestic plus foreign 369.0 399.9 411.0 561.7 768.7 883.4 521.3 602.1 736.4 801.0 733.4 1,033.5 Financial sectors 31 Total net borrowing by financial sectors S7.6 89.0 80.2 89.2 138.2 187.5 69.1 109.3 126.5 149.9 167.0 208.1 By instrument 32 U.S. government related 44.8 47.4 64.9 67.8 74.9 99.4 66.2 69.4 69.6 80.1 92.7 106.1 33 Sponsored credit agency securities 24.4 30.5 14.9 1.4 30.4 20.6 -4.1 6.9 29.9 30.9 26.0 15.1 34 Mortgage pool securities 19.2 15.0 49.5 66.4 44.4 78.8 70.3 62.5 39.7 49.2 66.7 91.0 3S 1.2 1.9 .4 36 Private financial sectors 12.8 41.6 15.3 21.4 63.3 88.1 2.9 40.0 56.9 69.7 74.3 101.9 37 Corporate bonds 1.8 3.5 13.7 12.6 25.9 28.6 10.3 14.9 20.7 31.1 33.2 24.0 38 Mortgages * * .1 * .4 -.2 * * .4 .4 -.1 -.2 39 Bank loans n.e.c -.9 .9 1.9 -.2 1.0 4.2 -3.3 3.0 -.5 2.4 1.1 7.2 40 Open market paper 4.8 20.9 -1.1 16.0 20.4 41.3 7.9 24.1 20.4 20.4 28.4 54.3 41 Loans from Federal Home Loan Banks 7.1 16.2 .8 -7.0 15.7 14.2 -12.1 -2.0 15.9 15.5 11.7 16.7 By sector 42 Sponsored credit agencies 25.6 32.4 15.3 1.4 30.4 20.6 -4.1 6.9 29.9 30.9 26.0 15.1 43 Mortgage pools 19.2 15.0 49.5 66.4 44.4 78.8 70.3 62.5 39.7 49.2 66.7 91.0 44 Private financial sectors 12.8 41.6 15.3 21.4 63.3 88.1 2.9 40.0 56.9 69.7 74.3 101.9 45 Commercial banks .5 .4 1.2 .5 4.4 3.8 .8 .2 4.8 3.9 5.2 2.4 46 Bank affiliates 6.9 8.3 5.9 12.6 16.9 9.2 10.1 15.1 26.0 7.8 9.2 9.2 47 Savings and loan associations 7.4 15.5 2.5 -2.1 22.7 21.7 -9.3 5.2 19.7 25.6 11.1 32.3 48 Finance companies -1.1 18.2 6.3 11.3 19.3 54.4 2.1 20.5 6.3 32.4 49.8 59.1 49 REITs -.5 -.2 * -.2 .8 -.1 -.1 -.3 .8 .8 .* -.2 All sectors 50 Total net borrowing 426.6 488.9 491.2 651.0 906.9 1070.9 590.4 711.5 863.0 950.9 900.3 1,241.6 51 U.S. government securities 122.9 133.0 225.9 254.4 273.8 323.1 288.2 220.7 241.9 305.6 276.8 369.4 52 State and local obligations 30.3 23.4 48.6 57.3 65.8 173.4 57.3 57.4 38.9 92.6 88.4 258.4 53 Corporate and foreign bonds 29.3 30.7 39.0 32.4 77.1 101.4 36.3 28.4 53.8 100.5 106.3 96.5 54 Mortgages 131.1 109.2 85.4 180.3 212.7 232.8 148.6 212.0 217.2 208.2 210.8 254.7 55 Consumer credit 4.7 22.6 17.7 56.7 94.8 103.6 38.0 75.4 98.0 91.6 113.0 94.2 56 Bank loans n.e.c 47.7 59.2 49.9 31.5 72.7 28.0 21.8 41.2 84.9 60.4 19.5 36.4 57 Open market paper 20.6 54.0 4.9 20.4 47.1 53.2 -6.7 47.5 74.8 19.3 37.2 69.3 58 Other loans 40.1 56.7 19.9 17.9 63.0 55.5 6.9 29.0 53.4 72.7 48.4 62.6 External corporate equity funds raised in United States 59 Total new share issues 21.2 -3.3 33.6 66.3 -33.6 28.2 81.9 50.7 -41.2 -25.9 25.1 31.2 60 Mutual funds 4.5 6.0 16.8 31.5 37.1 99.6 35.3 27.7 39.0 35.3 92.0 107.1 61 All other 16.8 -9.3 16.8 34.8 -70.7 -71.4 46.6 23.0 -80.2 -61.2 -66.9 -75.9 62 Nonfinancial corporations 12.9 -11.5 11.4 28.3 -77.0 -81.6 38.2 18.4 -84.5 -69.4 -75.7 -87.5 63 Financial corporations 1.8 1.9 4.0 2.5 5.2 4.6 2.6 2.4 5.0 5.3 4.6 4.7 64 Foreign shares purchased in United States 2.1 .3 1.5 4.0 1.1 5.6 5.7 2.2 -.7 2.9 4.2 6.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates. 1983' 1984r 1985 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 1199880011-- 11998811rr 11998822rr 11998833rr 11998844rr 11998855 HI H2 HI H2 HI' H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 341.8 372.7 395.3 542.9 765.9 883.8 506.0 579.7 713.4 818.4 735.8 1,032.0 By public agencies and foreign 7 Total net advances 97.1 97.7 114.1 117.4 144.6 220.9 112200..55 114.4 112244..22 116655..11 119955..99 224455..88 3 U.S. government securities 15.8 17.1 22.7 27.6 36.0 46.8 41.0 14.1 30.5 41.4 47.0 46.5 4 Residential mortgages 31.7 23.5 61.0 76.1 56.5 92.6 80.2 72.1 52.8 60.1 86.0 99.3 5 FHLB advances to savings and loans 7.1 16.2 .8 -7.0 15.7 14.2 -12.1 -2.0 15.9 15.5 11.7 16.7 6 Other loans and securities 42.5 40.9 29.5 20.8 36.6 67.3 11.4 30.2 25.0 48.1 51.2 83.3 Total advanced, by sector 7 U.S. government 23.7 24.0 15.9 9.7 17.1 22.5 9.1 10.3 7.8 26.4 19.7 25.3 8 Sponsored credit agencies 45.6 48.2 65.5 69.8 73.3 103.9 68.6 71.0 73.6 73.0 97.7 110.1 9 Monetary authorities 4.5 9.2 9.8 10.9 8.4 21.6 15.7 6.1 12.1 4.7 26.6 16.6 10 Foreign 23.3 16.2 22.8 27.1 45.9 72.8 27.2 27.0 30.7 61.0 51.9 93.8 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 44.8 47.4 64.9 67.8 74.9 99.4 6666..22 6699..44 6699..66 8800..11 9922..77 110066..11 12 Foreign 27.2 27.2 15.7 18.9 2.8 -.4 15.4 22.4 23.0 -17.4 -2.4 1.5 Private domestic funds advanced 13 Total net advances 316.7 349.6 361.8 512.1 699.0 762.0 467.1 557.1 681.8 716.1 630.2 893.8 14 U.S. government securities 107.1 115.9 203.1 226.9 237.8 276.4 247.2 206.6 211.4 264.2 229.8 322.9 15 State and local obligations 30.3 23.4 48.6 57.3 65.8 173.4 57.3 57.4 38.9 92.6 88.4 258.4 16 Corporate and foreign bonds 19.3 18.8 14.8 14.9 34.8 31.4 21.4 8.5 25.3 44.3 41.9 21.0 17 Residential mortgages 70.0 53.5 -5.3 52.6 94.8 85.8 24.6 80.6 106.3 83.3 70.3 101.3 18 Other mortgages and loans 97.1 154.2 101.4 153.0 281.5 209.2 104.6 202.0 315.8 247.1 211.5 206.9 19 LESS: Federal Home Loan Bank advances 7.1 16.2 .8 -7.0 15.7 14.2 -12.1 -2.0 15.9 15.5 11.7 16.7 Private financial intermediation 70 Credit market funds advanced by private financial institutions 283.8 321.7 288.4 384.6 555.6 531.5 332.0 437.2 552.5 558.7 456.8 606.4 71 Commercial banking 100.6 102.3 107.2 136.1 181.7 170.8 121.0 151.3 195.2 168.1 147.2 194.4 7? Savings institutions 54.5 27.8 30.1 139.8 146.3 104.5 131.3 148.3 167.9 124.7 61.7 147.4 73 Insurance and pension funds 94.5 97.6 107.4 94.2 119.0 118.1 83.0 105.3 112.0 126.0 101.6 134.5 24 Other finance 34.2 94.0 43.7 14.5 108.6 138.1 -3.3 32.3 77.4 139.9 146.3 130.0 ?5 Sources of funds 283.8 321.7 288.4 384.6 555.2 531.5 332.0 437.2 552.5 558.7 456.8 606.4 76 Private domestic deposits and RPs 169.6 211.9 196.2 209.3 298.8 201.5 203.8 214.8 292.2 305.5 185.2 217.5 27 Credit market borrowing 12.8 41.6 15.3 21.4 63.3 88.1 2.9 40.0 56.9 69.7 74.3 101.9 78 Other sources 101.3 68.2 77.0 153.9 193.5 241.9 125.3 182.4 203.4 183.5 197.3 287.0 79 Foreign funds -21.7 -8.7 -26.7 22.1 19.0 17.3 -14.2 58.5 27.2 10.9 10.7 24.0 30 Treasury balances -2.6 -1.1 6.1 -5.3 4.0 9.8 9.9 -20.6 1.2 6.8 20.3 -.7 31 Insurance and pension reserves 83.7 90.7 103.2 95.1 110.3 110.2 83.5 106.8 119.5 101.2 100.6 119.7 32 Other, net 41.8 -12.7 -5.6 41.9 60.1 104.5 46.1 37.7 55.5 64.6 65.6 144.0 Private domestic nonfinancial investors 33 Direct lending in credit markets 45.8 69.5 88.7 148.9 206.7 318.6 137.9 159.9 186.3 227.1 247.7 389.4 34 U.S. government securities 24.6 29.3 32.1 88.3 125.8 155.3 96.9 79.7 126.3 125.3 121.6 188.9 35 State and local obligations 7.0 11.1 29.2 43.5 43.2 99.4 47.2 39.9 25.3 61.2 47.2 151.6 36 Corporate and foreign bonds -11.0 -3.9 8.1 -5.5 15.3 6.9 -10.8 -.3 7.5 23.0 39.7 -25.8 37 Open market paper -3.1 2.7 -.6 6.5 -1.4 30.9 -6.6 19.7 3.2 -6.1 8.3 53.5 38 Other 28.4 30.3 19.9 16.1 23.8 26.0 11.3 20.8 24.0 23.7 30.9 21.1 39 Deposits and currency 181.1 221.9 203.3 228.4 303.4 211.8 225.6 231.3 303.6 303.2 199.5 223.7 40 Currency 10.3 9.5 9.7 14.3 8.6 12.4 14.8 13.8 15.9 1.3 18.4 6.5 41 Checkable deposits 5.4 18.1 17.6 26.7 24.1 45.2 53.0 -.4 30.4 17.7 17.9 72.2 4? Small time and savings accounts 82.9 47.0 138.1 218.3 149.8 134.3 278.9 157.7 130.7 169.0 161.4 107.2 43 Money market fund shares 29.2 107.5 24.7 -44.1 47.2 -2.2 -84.0 -4.2 30.2 64.2 4.2 -8.6 44 Large time deposits 45.6 36.8 11.9 -5.9 83.6 14.1 -55.1 43.4 97.6 69.6 * 28.1 45 Security RPs 6.5 2.5 3.8 14.3 -5.8 10.1 11.0 17.5 3.3 -15.0 1.7 18.5 46 Deposits in foreign countries 1.1 .5 -2.5 4.8 -4.0 -2.2 7.0 2.7 -4.5 -3.6 -4.1 -.3 47 Total of credit market instruments, deposits and currency 226.9 291.4 292.0 377.3 510.1 530.3 363.5 391.2 489.9 530.3 447.2 613.0 48 Public holdings as percent of total 26.3 24.4 27.8 20.9 18.8 25.0 23.1 19.0 16.9 20.6 26.7 23.8 49 Private financial intermediation (in percent) 89.6 92.0 79.7 75.1 79.5 69.8 71.1 78.5 81.0 78.0 72.5 67.8 50 Total foreign funds 1.6 7.6 -3.9 49.2 64.9 90.2 13.0 85.5 57.9 71.9 62.6 117.7 MEMO: Corporate equities not included above 51 Total net issues 21.2 -3.3 33.6 66.3 -33.6 28.2 81.9 50.7 -41.2 -25.9 25.1 31.2 5? Mutual fund shares 4.5 6.0 16.8 31.5 37.1 99.6 35.3 27.7 39.0 35.3 92.0 107.1 53 Other equities 16.8 -9.3 16.8 34.8 -70.7 -71.4 46.6 23.0 -80.2 -61.2 -66.9 -75.9 54 Acquisitions by financial institutions 24.9 20.9 36.9 56.7 10.3 47.4 76.4 36.9 2.1 18.5 60.7 34.1 55 Other net purchases -3.6 -24.3 -3.3 9.6 -43.9 -19.2 5.5 13.7 -43.4 -44.5 -35.6 -2.9 NOTES BY LINE NUMBER. 32. Mainly retained earnings and net miscellaneous liabilities. 1. Line 1 of table 1.57. 33. Line 13 less line 20 plus line 27. 2. Sum of lines 3-6 or 7-10. 34-38. Lines 14-18 less amounts acquired by private finance. Line 38 includes 6. Includes farm and commercial mortgages. mortgages. 11. Credit market funds raised by federally sponsored credit agencies, and net 40. Mainly an offset to line 9. issues of federally related mortgage pool securities. 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. Also 48. Line 2/line 1. sum of lines 28 and 47 less lines 40 and 46. 49. Line 20/line 13. 18. Includes farm and commercial mortgages. 50. Sum of lines 10 and 29. 26. Line 39 less lines 40 and 46. 51. 53. Includes issues by financial institutions. 27. Excludes equity issues and investment company shares. Includes line 19. NOTE. Full statements for sectors and transaction types in flows and in amounts 29. Foreign deposits at commercial banks, bank borrowings from foreign outstanding may be obtained from Flow of Funds Section, Division of Research branches, and liabilities of foreign banking agencies to foreign affiliates. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits at commercial banks. D.C. 20551. 31. Excludes net investment of these reserves in corporate equities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • May 1986 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures' 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1985 1986 MMeeaassuurree 11998833 11998844 11998855 June July Aug. Sept. Oct. Nov. Dec. Jan.' Feb. 1 Industrial production 109.2 121.8 124.5 124.3 124.1 125.2 125.1 124.4 125.4 126.3 126.5 125.7 Market groupings 2 Products, total 113.9 127.1 131.7 131.6 131.6 133.0 133.1 131.8 133.5 134.1' 134.6 133.9 3 Final, total 114.7 127.8 132.0 131.6 131.8 133.3 133.3 131.9 133.7 134.2' 134.6 133.6 4 Consumer goods 109.3 118.2 120.7 120.4 120.1 121.5 121.8 120.8 122.7' 124.0' 124.3 124.4 5 Equipment 121.7 140.5 147.1 146.6 147.3 149.0 148.6 146.6 148.3 147.8' 148.1 145.9 6 Intermediate 111.2 124.9 130.6 131.4 130.7 132.0 132.3 131.5 132.7 133.7' 134.8 134.8 7 Materials 102.8 114.6 114.7 114.3 113.8 114.5 114.2 114.2 114.3 115.7' 115.4 114.5 Industry groupings 8 Manufacturing 110.2 123.9 127.1 126.7 126.9 128.2 127.7 127.2 128.4' 129.2' 129.7 128.8 Capacity utilization (percent)2 9 Manufacturing 74.0 80.8 80.3 80.1 80.1 80.7 80.1 79.6 80.2' 80.4' 80.5 79.9 10 Industrial materials industries 75.3 82.3 80.2 80.1 79.5 79.9 79.5 79.3 79.2 so.o' 79.6 79.0 11 Construction contracts (1977 = 100)3 138.0 150.0 161.0 154.0 164.0 164.0 167.0 168.0 162.0 162.0 146.0 162.0 12 Nonagricultural employment, total4 137.1 143.6 148.5 148.1 148.5 148.9 149.3 149.8 150.1 150.6 151.2 151.6 13 Goods-producing, total 100.1 106.1 107.5 107.3 107.2 107.3 107.1 107.5 107.6 107.9 108.6 108.3 14 Manufacturing, total 94.8 99.8 99.9 99.7 99.5 99.6 99.1 99.4 99.7 99.9 100.1 99.9 15 Manufacturing, production-worker ... 87.6 93.0 92.4 92.0 91.8 91.9 91.5 91.8 92.0 92.5 92.5 92.3 16 Service-producing 157.3 164.1 170.9 170.5 171.1 171.7 172.4 173.0 173.5 174.0 174.6 175.3 17 Personal income, total 440.1 482.8 511.0 509.0 510.5 511.3 513.6 516.7 519.3 525.3 525.5 528.5 18 Wages and salary disbursements 390.7 427.8 457.1 456.6 456.9 459.2 461.9 464.3 467.1 471.3 473.0 475.4 19 Manufacturing 295.9 326.8 340.7 339.4 339.2 340.7 341.3 344.9 344.8 348.3 347.9 346.3 20 Disposable personal income5 175.8 193.6 203.1 202.1 202.7 202.8 203.5 204.9' 205.9' 208.2' 209.0 210.4 21 Retail sales (1977 = 100)6 162.0 179.0 190.6 188.8 189.9 194.2 198.4 190.6 191.6 194.0' 194.8 195.0 Prices7 22 Consumer 298.4 311.1 322.2 322.3 322.8 323.5 324.5 325.5 326.6 327.4 328.4 327.5 23 Producer finished goods 285.2 291.1 293.7 294.0 294.8 293.5 290.(K 294.7' 296.7 297.2 296.2 292.3 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 7. Data without seasonal adjustment, as published in Monthly Labor Review. (July 1985), pp. 487-501. The revised indexes for January through June 1985 were Seasonally adjusted data for changes in the price indexes may be obtained from shown in the September BULLETIN. the Bureau of Labor Statistics, U.S. Department of Labor. 2. Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, Department of Com- NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6, merce, and other sources. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 3. Index of dollar value of total construction contracts, including residential, of Current Business. nonresidential and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the last two months are preliminary and Company, F. W. Dodge Division. estimated, respectively. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1985 1986 CCaatteeggoorryy 11998833 11998844 11998855 July Aug. Sept. Oct. Nov. Dec.' Jan.' Feb. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 176,414 178,602 180,440 180,492 180,657 180,831 181,011 181,186 181,349 181,898 182,055 2 Labor force (including Armed Forces)1 113,749 115,763 117,695 117,501 117,595 118,049 118,355 118,376 118,466 119,014 119,322 3 Civilian labor force 111111,,555500 113,544 115,461 115,272 115,343 111155,,779900 116,114 116,130 116,229 116,786 117,088 Employment 4 Nonagricultural industries2 97,450 101,685 103,971 103,751 104,115 104,502 104,755 104,899 105,055 105,655 105,465 5 Agriculture 3,383 3,321 3,179 3,120 3,095 3,017 3,058 3,070 3,151 3,299 3,096 Unemployment 6 Number 10,717 8,539 8,312 8,401 8,133 8,271 8,301 8,161 8,023 7,831 8,527 7 Rate (percent of civilian labor force) ... 9.6 7.5 7.2 7.3 7.1 7.1 7.1 7.0 6.9 6.7 7.3 8 Not in labor force 62,665 62,839 62,745 62,991 63,062 62,782 62,656 62,810 62,883 62,884 62,733 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,196 94,461 97,698r 97,707 97,977 98,217 98,559 98,801 99,086 99,507 99,733 10 Manufacturing 18,434 19,412 19,426' 19,351 19,362 19,279 19,338 19,381 19,433 19,460 19,431 11 Mining 952 974 969 969 965 962 960 954 952 948 934 12 Contract construction 3,948 4,345 4,661 4,660 4,688 4,721 4,753 4,754 4,770 4,909 4,884 13 Transportation and public utilities 4,954 5,171 5,30c 5,302 5,282 5,317 5,327 5,342 5,350 5,360 5,350 14 Trade 20,881 22,134 23,195' 23,226 23,305 23,344 23,440 23,473 23,550 23,714 23,857 15 Finance 5,468 5,682 5,924 5,932 5,959 5,987 6,011 6,048 6,068 6,100 6,128 16 Service4 19,694 20,761 21,929' 21,926 22,073 22,155 22,244 22,365 22,450 22,535 22,654 17 Government 15,869 15,984 16,295' 16,341 16,343 16,452 16,486 16,484 16,513 16,481 16,495 1. Persons 16 years of age and over. Monthly figures, which are based on exclude proprietors, self-employed persons, domestic servants, unpaid family sample data, relate to the calendar week that contains the 12th day; annual data workers, and members of the Armed Forces. Data are adjusted to the March 1984 are averages of monthly figures. By definition, seasonality does not exist in benchmark and only seasonally adjusted data are available at this time. Based on population figures. Based on data from Employment and Earnings (U.S. Depart- data from Employment and Earnings (U.S. Department of Labor). ment of Labor). 4. In addition to the revisions noted here, data for January through June 1985 2. Includes self-employed, unpaid family, and domestic service workers. have been revised as follows: Jan., 21,382; Feb., 21,480; Mar., 21,644; Apr., 3. Data include all full- and part-time employees who worked during, or 21,723; May, 21,813; and June, 21,856. These data were reported incorrectly in received pay for, the pay period that includes the 12th day of the month, and the BULLETIN for November 1985 through March 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • May 1986 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1985 1985 1985 denes Ql Q2 Q3 Q4' Ql Q2 Q3 Q4 Ql Q2 Q3 Q4' Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 123.8 124.2 124.8 125.4 152.8 154.0 155.1 156.2 81.0 80.7 80.5 80.3 2 Mining 110.1 110.0 108.5 107.6 133.4 133.6 133.9 134.1 82.6 82.3 81.0 80.2 3 Utilities 114.2 113.6 111.4 113.1 133.7 134.5 135.4 136.3 85.5 84.4 82.3 83.0 4 Manufacturing 126.0 126.6 127.6 128.3 156.5 157.7 158.9 160.2 80.5 80.3 80.3 80.1 5 Primary processing ... 107.5 108.1 109.5 110.3 131.6 132.0 132.4 132.8 81.6 81.9 82.7 83.1 6 Advanced processing . 137.1 137.9 138.6 139.1 171.4 173.2 174.9 176.7 80.0 79.6 79.2 78.7 7 Materials 115.4 114.5 114.2 114.7 141.6 142.5 143.4 144.3 81.5 80.4 79.6 79.5 8 Durable goods 123.6 121.4 120.7 121.3 155.9 157.4 158.9 160.5 79.3 77.1 76.0 75.6 9 Metal materials .... 80.6 80.2 79.4 82.3 117.3 117.3 117.3 117.3 68.7 68.4 67.7 70.2 10 Nondurable goods.... 110.9 111.2 113.7 113.7 137.3 137.8 138.2 138.7 80.7 80.7 82.2 82.0 11 Textile, paper, and chemical.. 111.6 111.0 114.1 113.9 136.7 137.0 137.4 137.8 81.7 81.0 83.0 82.6 12 Paper 126.3 121.8 123.8 124.3 136.1 136.2 136.3 136.5 92.8 89.4r 90.8 91.1 13 Chemical 113.2 112.6 114.6 114.1 141.5 142.0 142.6 143.1 80.0 79.3 80.4 79.7 14 Energy materials 105.0 105.2 103.2 104.2 120.0 120.3 120.6 120.9 87.5 87.5 85.5 86.1 Previous cycle1 Latest cycle2 1985 1985 1986 High Low High Low Feb. June July Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 80.9 80.5 80.2 80.7 80.5 79.8 80.3 80.7 80.6 80.0 16 Mining 92.8 87.8 95.2 76.9 82.1 82.7 81.2 80.9 81.0 80.9 79.7 80.1 80.1 77.7 17 Utilities 95.6 82.9 88.5 78.0 86.7 84.1 81.9 81.5 83.4 82.7 82.3 83.9 82.4 83.5 18 Manufacturing 87.7 69.9 86.5 68.0 80.4 80.1 80.1 80.7 80.1 79.6 80.2 80.4 80.5 79.9 19 Primary processing ... 91.9 68.3 89.1 65.1 81.5 82.0 82.3 82.9 82.8 83.1 83.0 83.2 84.0 83.2 20 Advanced processing . 86.0 71.1 85.1 69.5 79.8 79.3 79.1 79.6 79.0 78.0 79.0 79.2 79.0 78.5 21 Materials 92.0 70.5 89.1 68.4 81.5 80.1 79.5 79.9 79.5 79.3 79.2 80.0 79.6 79.0 22 Durable goods 91.8 64.4 89.8 60.9 79.1 76.5 75.8 76.6 75.4 75.2 75.8 75.7 75.8 74.8 23 Metal materials 99.2 67.1 93.6 45.7 68.2 69.0 66.4 69.4 67.3 69.4 70.8 70.4 70.1 68.6 24 Nondurable goods .... 91.1 66.7 88.1 70.6 81.1 81.0 81.7 82.1 82.9 81.9 81.5 82.6 82.3 81.9 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 82.0 81.4 82.7 82.8 83.7 82.4 82.1 83.3 83.0 82.6 26 Paper 98.4 70.6 97.3 79.9 92.6 90.5 91.7 90.1 90.7 88.8 90.1 94.4 94.2 n.a. 27 Chemical 92.5 64.4 87.9 63.3 80.2 79.2 80.1 79.8 81.2 80.5 78.8 79.9 79.6 n.a. 28 Energy materials 94.6 86.9 94.0 82.2 87.4 87.3 85.8 85.1 85.6 86.2 84.7 87.4 85.9 85.8 1. Monthly high 1973; monthly low 1975. NOTE. These data also appear in the Board's G.3 (402) release. For address, see 2. Monthly highs 1978 through 1980; monthly lows 1982. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value A Monthly data are seasonally adjusted 1977 11998855 1986 pro- 1985 Grouping por- avg. tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan .P Feb.'' Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 124.5 123.7 124.0 124.1 124.1 124.3 124.1 125.2 125.1 124.4 125.4 126.3 126.5 125.7 2 Products 57.72 131.7 129.8 130.3 130.8 131.4 131.6 131.6 133.0 133.1 131.8 133.5 134.1 134.6 133.9 4 3 Fin C a o l n p s r u o m d e u r c t g s oods 4 25 4 . . 5 7 2 7 1 12 3 0 2 . . 7 0 1 1 3 1 0 9 . . 4 1 1 11 3 9 0 . . 8 8 1 1 1 3 9 1 . . 5 3 1 1 3 2 1 0 . . 7 0 1 1 2 3 0 1 . . 4 6 1 12 3 0 1 . . 1 8 1 12 3 1 3 . . 5 3 1 1 2 3 1 3 . . 8 3 1 1 2 3 0 1 . . 8 9 1 1 2 33 2 . . 7 7 r 1 1 2 3 4 4 . . 0 2 1 1 2 3 4 4 . . 3 6 1 1 2 3 4 3 . . 4 6 5 Equipment 19.25 147.1 145.3 145.4 146.9 147.1 146.6 147.3 149.0 148.6 146.6 148.3 147.8 148.1 145.9 6 Intermediate products 12.94 130.6 127.7 128.6 129.3 130.3 131.4 130.7 132.0 132.3 131.5 132.7 133.7 134.8 134.8 7 Materials 42.28 114.7 115.4 115.5 115.0 114.2 114.3 113.8 114.5 114.2 114.2 114.3 115.7 115.4 114.5 Consumer goods 8 Durable consumer goods 6.89 112.9 112.8 113.5 111.5 111.8 112.0 111.3 114.0 112.9 111.4 115.5 116.9 116.7 117.6 9 Automotive products 2.98 115.1 115.4 115.1 113.1 113.6 113.4 115.0 120.0 117.8 112.9 116.8 116.6 118.1 120.6 10 Autos and trucks 1.79 112.0 111.7 110.5 109.0 109.6 109.4 113.7 120.2 116.6 108.7 113.7 112.0 116.2 119.9 11 Autos, consumer 1.16 98.9 100.7 101.3 100.5 98.1 97.0 101.1 101.3 98.8 92.3 94.9 99.9 103.6 108.0 12 Trucks, consumer .63 136.3 132.0 127.5 124.7 130.9 132.3 137.2 155.4 149.7 139.1 148.6 134.5 139.5 13 Auto parts and allied goods 1.19 119.7 121.1 122.0 119.4 119.6 119.4 116.8 119.6 119.5 119.3 121.4 123.5 120.9 121.5 14 Home goods 3.91 111.3 110.9 112.2 110.2 110.4 110.9 108.4 109.5 109.3 110.2 114.5'' 117.1 115.8 115.3 15 Appliances, A/C and TV 1.24 129.5 127.1 131.8 126.9 129.3 131.5 121.6 124.5 123.7 126.3 139.4 145.4 138.7 138.2 16 Appliances and TV 1.19 130.3 127.2 131.8 127.1 128.7 131.7 123.2 125.5 125.6 128.6 141.9 148.4 141.3 17 Carpeting and furniture .96 119.4 117.9 117.7 118.1 116.9 119.6 122.2 119.5 120.2 120.1 122.9 119.7 121.1 18 Miscellaneous home goods 1.71 93.6 95.1 95.0 93.7 93.1 91.2 91.2 93.0 92.7 92.9 91.9' 95.2 96.2 19 Nondurable consumer goods 18.63 123.6 121.4 122.1 122.5 123.1 123.5 123.4 124.2 125.1 124.3 125.4' 126.7 127.2 126.9 20 Consumer staples 15.29 129.4 126.9 127.9 128.5 129.0 129.6 129.3 130.3 131.0 130.1 131.0 132.5 132.8 132.8 21 Consumer foods and tobacco 7.80 129.7 127.8 128.0 129.4 128.9 130.5 130.1 130.8 131.5 129.5 130.7' 132.3 131.8 22 Nonfood staples 7.49 129.1 126.0 127.7 127.6 129.1 128.7 128.5 129.7 130.5 130.6 131.2' 132.6 133.8 133.4 23 Consumer chemical products .. 2.75 147.5 143.2 145.1 145.1 147.3 145.4 145.4 149.1 151.4 149.4 152.4' 152.9 155.2 24 Consumer paper products 1.88 143.7 138.1 141.7 142.0 143.7 144.6 144.9 143.9 144.7 145.5 145.7 147.4 145.9 25 Consumer energy 2.86 101.9 101.5 101.9 101.5 102.1 102.2 101.5 101.8 101.0 102.9 101.4' 103.5 105.3 26 Consumer fuel 1.44 88.5 84.9 87.0 90.0 90.2 88.8 89.2 91.1 85.8 90.2 90.1 92.3 97.1 27 Residential utilities 1.42 118.4 117.1 113.2 114.4 115.9 114.0 112.7 116.5 115.8 112.9' 114.9 Equipment 28 Business and defense equipment 18.01 147.8 145.6 146.1 147.7 147.9 147.4 147.9 149.7 149.4 147.5 149.7 149.2 149.9 148.7 29 Business equipment 14.34 141.3 140.0 140.2 142.0 141.9 140.7 141.3 143.0 142.2 139.6 141.7 141.2 142.4 141.3 30 Construction, mining, and farm .. 2.08 67.7 68.3 67.1 68.4 67.4 67.7 68.6 67.2 67.0 65.9 68.2 68.3 67.0 31 Manufacturing 3.27 112.8 112.3 112.0 112.4 113.1 111.9 113.5 115.1 114.8 111.7 112.8 112.5 113.6 112.9 32 Power 1.27 83.6 81.8 79.6 81.8 82.8 84.1 85.6 84.5 85.1 85.5 84.7 87.1 86.0 85.1 33 Commercial 5.22 219.3 217.0 218.9 221.8 222.8 219.6 219.5 222.8 219.4 213.9 217.7 217.9 217.7 216.0 34 Transit 2.49 106.1 104.9 104.5 106.0 102.9 103.4 103.3 106.0 108.3 109.7 111.2 106.7 114.2 112.8 35 Defense and space equipment 3.67 173.6 167.3 169.0 170.1 171.2 173.4 173.9 175.5 177.5 178.7 180.7 180.7 179.5 177.6 Intermediate products 36 Construction supplies 5.95 119.0 115.7 116.9 117.4 118.1 119.2 119.4 121.5 121.3 120.0 120.9' 120.7 123.3 122.5 37 Business supplies 6.99 140.5 137.9 138.6 139.4 140.7 141.7 140.3 140.9 141.7 141.2 142.7' 144.9 144.7 38 General business supplies 5.67 144.4 141.1 141.9 143.4 144.4 146.1 144.4 145.1 145.4 144.8 146.7' 149.5 149.4 39 Commercial energy products 1.31 123.7 124.1 124.5 122.4 124.6 122.7 122.7 122.5 125.7 125.7 125.3 124.8 124.2 Materials 40 Durable goods materials 20.50 121.8 123.3 123.3 122.8 120.7 120.8 120.2 121.8 120.2 120.4 121.7' 121.9 122.3 120.8 41 Durable consumer parts 4.92 100.7 102.2 102.1 101.8 100.1 98.7 98.3 100.0 99.0 100.2 101.6' 101.5 104.0 102.8 42 Equipment parts 5.94 159.0 164.2 163.3 161.1 157.8 157.3 157.0 158.7 156.5 154.0 155.0 155.1 154.0 153.2 43 Durable materials n.e.c 9.64 109.7 109.0 109.6 110.0 108.2 109.6 108.6 110.2 108.7 109.9 111.4' 111.8 112.2 110.1 44 Basic metal materials 4.64 84.8 84.1 85.1 86.6 82.0 85.0 82.5 85.1 82.8 85.8 87.6' 88.2 85.6 45 Nondurable goods materials 10.09 112.2 111.4 110.3 110.4 111.3 111.8 112.8 113.5 114.7 113.4 113.C 114.6 114.4 113.8 46 Textile, paper, and chemical materials 7.53 112.4 112.1 111.3 110.5 110.9 111.7 113.5 113.8 115.1 113.5 113.2' 115.0 114.6 114.1 47 Textile materials 1.52 97.7 93.5 93.0 94.1 95.0 97.3 100.2 104.4 104.1 101.2 104.4' 102.2 101.3 48 Pulp and paper materials 1.55 123.7 126.0 125.4 121.3 120.9 123.3 125.0 122.8 123.7 121.1 m.O' 128.9 128.7 49 Chemical materials 4.46 113.6 113.5 112.7 112.3 112.9 112.6 114.0 113.8 115.9 115.0 112.8' 114.5 114.2 50 Miscellaneous nondurable materials 2.57 111.3 109.4 107.2 110.1 112.5 112.0 110.8 112.7 113.5 113.3 112.5' 113.6 114.0 51 Energy materials 11.69 104.3 104.9 106.2 105.3 105.3 105.1 103.5 102.7 103.4 104.2 102.5' 105.8 104.0 104.0 52 Primary energy 7.57 107.8 107.6 110.2 107.9 107.8 109.0 107.4 106.4 106.8 108.2 106.7' 109.3 107.4 53 Converted fuel materials 4.12 97.9 100.0 99.0 100.6 100.6 98.1 96.2 95.9 97.0 96.8 94.7' 99.5 97.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • May 1986 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1985 1986 Grouping SIC pro- 1985 code por- avg. tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov/ Jan.? Feb.' Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 110.6 111.9 111.8 111.1 111.3 111.6 109.4 109.1 110.3 109.9 108.9 110.2 2 Mining 9.83 109.0 109.5 110.5 109.6 109.8 110.6 108.7 108.3 108.4 108.4 106.9 107.5 3 Utilities 5.96 113.2 115.8 113.9 113.6 113.7 113.4 110.7 110.3 113.2 112.4 112.2 114.6 4 Manufacturing 84.21 127.1 125.8 126.3 126.6 126.6 126.7 126.9 128.2 127.7 127.2 128.4 129.2 5 Nondurable 35.11 125.6 123.8 123.9 124.3 124.7 125.5 125.6 126.6 126.9 126.4 127.3 128.3 6 Durable 49.10 128.2 127.2 128.0 128.2 127.9 127.6 127.9 129.4 128.3 127.7 129.2 129.8 Mining 1 Metal 10 .50 75.1 74.5 83.6 81.2 78.3 77.5 60.9 73.1 71.4 74.2 78.3 73.4 8 Coal 11.12 1.60 127.5 121.5 131.9 128.5 128.7 134.0 128.0 127.7 126.3 130.1 125.5 128.0 9 Oil and gas extraction 13 7.07 106.3 108.2 106.8 106.5 106.9 106.9 106.9 105.5 106.0 104.8 103.5 104.7 10 Stone and earth minerals 14 .66 118.8 119.8 118.7 118.5 118.7 117.9 116.6 117.7 119.3 120.4 119.0 114.0 Nondurable manufactures 11 Foods 7.96 131.0 129.4 128.5 130.8 131.4 131.8 132.2 132.6 132.5 130.7 131.4 132.1 12 Tobacco products .62 103.8 103.4 98.4 95.7 98.9 96.0 97.7 97.8 105.3 104.5 105.4 13 Textile mill products 2.29 102.5 98.5 99.4 99.0 100.0 103.3 104.1 106.3 106.7 104.9 108.0 106.2 14 Apparel products 2.79 101.8 103.1 101.3 100.2 100.3 99.2 100.6 100.4 101.8 102.6 103.9 106.5 15 Paper and products 3.15 127.4 126.4 126.9 125.1 124.1 127.1 129.0 127.5 128.6 127.3 128.2 131.3 16 Printing and publishing 4.54 155.3 150.3 152.6 154.2 155.4 156.7 154.3 156.3 156.2 157.0 159.0 161.7 17 Chemicals and products 8.05 127.1 125.8 126.5 125.8 126.7 126.4 126.4 128.2 129.0 127.9 128.0 128.3 18 Petroleum products 2.40 86.7 84.0 84.7 87.3 87.4 87.1 88.3 88.2 85.9 87.7 87.3 88.7 19 Rubber and plastic products 2.80 147.0 145.7 144.1 144.9 144.3 145.5 145.6 148.0 148.6 148.7 150.5 150.0 20 Leather and products .53 70.9 69.2 69.4 69.9 71.0 71.5 72.2 72.7 72.3 71.4 72.1 69.9 Durable manufactures 21 Lumber and products 24 2.30 109.1 109.5 110.9 112.2 113.5 113.0 114.8 115.9 116.5 115.6 116.5 22 Furniture and fixtures 25 1.27 142.0 139.0 139.2 141.0 142.0 141.9 145.3 144.3 143.2 141.9 144.1 142.1 23 Clay, glass, stone products 32 2.72 114.8 110.5 111.4 114.5 116.3 116.1 115.1 116.2 116.2 115.6 115.2 117.5 24 Primary metals 33 5.33 80.6 80.2 81.8 81.4 76.4 78.3 79.0 82.0 80.3 83.1 83.6 81.4 25 Iron and steel 331.2 3.49 70.7 68.5 73.2 71.9 65.4 67.6 68.7 71.6 69.7 74.4 75.3 71.9 26 Fabricated metal products 34 6.46 107.8 107.6 108.6 109.1 108.3 107.4 107.3 107.8 107.5 108.4 107.9 108.8 27 Nonelectrical machinery 35 9.54 146.6 144.9 146.5 148.9 149.1 145.6 147.5 149.2 146.5 143.0 145.6 145.9 28 Electrical machinery 36 7.15 169.3 173.2 173.1 168.9 169.3 169.5 165.7 166.1 165.1 165.1 168.9 171.9 29 Transportation equipment 37 9.13 123.2 120.5 120.8 120.7 120.9 121.8 123.7 126.8 126.2 124.5 126.5 126.8 30 Motor vehicles and parts 371 5.25 112.8 112.5 111.3 110.9 110.5 110.5 112.8 116.8 115.3 111.7 114.5 115.4 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 137.5 131.4 133.7 134.1 134.9 137.1 138.5 140.4 141.1 141.9 142.9 142.4 32 Instruments 38 2.66 139.9 138.7 139.0 138.5 139.9 140.7 141.1 141.8 139.4 139.8 140.7 140.6 33 Miscellaneous manufactures 39 1.46 96.4 96.4 96.0 98.3 98.3 96.8 95.9 97.2 96.4 95.9 94.5 96.3 Utilities 34 Electric Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 35 Products, total . 517.5 773.4 764.2 769.5 773.3 774.4 773.5 769.0 778.7 777.9 772.2 782.8 783.3 36 Final 405.7 614.8 608.7 613.3 616.2 616.2 614.0 610.1 618.6 617.8 613.0 622.4 621.3 37 Consumer goods . 272.7 364.8 360.9 364.6 364.7 365.1 364.0 361.7 366.2 365.6 363.8 370.5 373.2 38 Equipment 133.0 250.1 242.7 244.8 248.0 250.8 251.0 250.3 252.4 252.2 249.3 251.9 248.1 39 Intermediate 111.9 158.6 153.6 153.9 155.6 158.3 159.7 160.4 160.1 160.1 159.2 160.4 162.0 • 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 1986 IItteemm 11998833 11998844 11998855'' Apr. May June July Aug. Sept. Oct. Nov.' Dec.' Jan. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,605 1,682 1,726 1,704 1,778 1,712 1,694 1,784 1,808 1,688 1,661 1,873 1,907 7 1-family 902 922 953 948 933 961 967 990 949 965 918 978 1,094 3 2-or-more-family 703 759 773 756 845 751 727 794 859 723 743 895 813 4 Started 1,703 1,749 1,742 1,851' 1,684' 1,693' 1,673' 1,737' 1,653' 1,784' 1,654 1,882 2,056 1-family 1,067 1,084 1,072 1,129 1,041 1,036 1,068 1,071 1,006 1,118 1,006 1,098 1,357 6 2-or-more-family 635 665 669 722 643 657 605 666 647 666 648 784 699 7 Under construction, end of period1 1,003 1,051 1,063 1,086' 1,082' 1,073' 1,071' 1,079' 1,065' 1,089' 1,087 1,089 1,101 8 1-family 524 556 539 581' 579' 574' 577' 582' 568' 578' 570 562 575 9 2-or-more-family 479 494 524 506' 504' 499R 494' 499' 496' 512' 517 529 526 10 Completed 1,390 1,652 1,702 1,659' 1,635' 1,758' 1,722' 1,720' 1,778' 1,541' 1,721' 1,757 1,782 11 1-family 924 1,025 1,072 1,070' 1,028' 1,078' 1,042' 1,032' 1,100' 1,072' 1,095 1,139 1,070 12 2-or-more-family 466 627 630 589' 607 68C 68C 688' 678' 469' 626 618 712 13 Mobile homes shipped 296 296 284 288 287 272 285 286 283 291 287 285 280 Merchant builder activity in 1-family units 14 Number sold 622 639 686 648' 684' 710 745' 708 681 637' 719 721 753 15 Number for sale, end of period1 304 358 356 355' 355' 354 351 348 350 353' 354 354 358 Price (thousands of dollars)2 Median 16 Units sold 75.5 80.0 84.3 85.6 80.1 86.3 82.1 83.3 84.6 85.4' 86.7 89.2 88.9 17 Units sold 89.9 97.5 101.0 104.7 98.1 99.6 99.4 99.2 102.6 102.7' 103.7 107.0 103.0 EXISTING UNITS (1-family) 18 Number sold 2,719 2,868 3,217 3,020' 3,040 3,070' 3,170' 3,430' 3,480' 3,530' 3,450 3,520 3,300 Price of units sold (thousands of dollars)2 19 Median 69.8 72.3 75.4 74.8' 75.2' 76.5' 76.7' 77.2' 75.9' 75.2' 74.9 75.5 77.1 20 Average 82.5 85.9 90.6 89.8' 90.3' 91.9' 92.7' 93.2' 91.4' 91.2' 90.3 91.8 93.0 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 268,730 312,989 342,824 341,861 339,943 343,837 344,206 343,246 346,084 346,053 345,064 353,959 357,335 77 Private 218,016 257,802 280,467 281,988 276,420 278,939 279,521 279,371 282,505 283,302 282,544 289,478 290,619 73 Residential 121,309 145,058 148,239 146,539 142,254 147,158 148,699 146,858 148,915 151,078 149,720 150,609 152,811 74 Nonresidential, total 96,707 112,744 132,228 135,449 134,166 131,781 130,822 132,513 133,590 132,224 132,824 138,869 137,808 Buildings 7< Industrial 12,863 13,746 15,767 17,283 16,443 15,170 15,384 15,118 15,567 15,674 16,145 17,532 15,847 76 Commercial 35,787 48,102 60,050 61,219 60,064 58,290 57,956 59,910 61,227 60,769 61,014 64,930 65,651 77 Other 11,660 12,298 12,406 12,663 12,929 12,786 12,578 12,957 12,769 12,236 12,456 12,070 12,260 28 Public utilities and other 36,397 38,598 44,005 44,284 44,730 45,535 44,904 44,528 44,027 43,545 43,209 44,337 44,050 79 Public 50,715 55,186 62,357 59,873 63,523 64,897 64,686 63,875 63,580 62,752 62,520 64,481 66,716 30 Military 2,544 2,839 3,163 3,166 3,349 3,426 3,364 2,966 3,008 3,369 2,979 3,312 3,545 31 Highway 14,143 16,295 19,951 19,920 22,314 21,093 19,589 20,224 19,585 19,207 19,770 20,640 20,782 37. Conservation and development 4,822 4,656 4,959 4,393 5,051 5,410 5,075 4,824 5,254 4,899 5,203 5,003 5,422 33 Other 29,206 31,396 34,284 32,394 32,809 34,968 36,658 35,861 35,733 35,277 34,568 35,526 36,967 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing 3. Value of new construction data in recent periods may not be strictly Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of comparable with data in prior periods because of changes by the Bureau of the existing units, which are published by the National Association of Realtors. All Census in its estimating techniques. For a description of these changes see back and current figures are available from originating agency. Permit authoriza- Construction Reports (C-30-76-5), issued by the Bureau in July 1976. tions are those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • May 1986 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted C m h o a n n t g h e s f e ro a m rli e 1 r 2 Change ( a f t r o a m nn u 3 a m l o ra n t t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm FFFeeebbb... 1985 1985 1986 111999888666 11998855 11998866 (((111999666777 FFeebb.. FFeebb.. === 111000000)))111 Mar. June Sept. Dec. Oct. Nov. Dec. Jan. Feb. CONSUMER PRICES2 1 All items 3.5 3.2 4.0 3.3 2.4 5.3 .4 .6 .4 .3 -.4 327.5 2 Food 2.4 1.9 1.8 .6 2.1 5.9 .1 .7 .6 .2 -.7 315.3 3 Energy items -2.1 -.6 .6 6.9 -3.2 3.3 -.2 .6 .4 .1 -3.8 408.9 4 All items less food and energy 4.7 4.1 5.2 3.5 3.4 5.4 .5 .5 .3 .4 .2 322.3 5 Commodities 3.9 1.4 5.1 -.9 1.1 3.6 .5 .2 .2 .3 -.1 261.6 6 Services 5.3 5.8 5.4 6.2 4.8 6.5 .6 .7 .4 .5 .4 389.4 PRODUCER PRICES 7 Finished goods .7 -.1 -.1 2.2 -2.4' 9.2' .8' .5 -.7 -1.6 292.3 8 Consumer foods .3 -1.2 -3.3 -5.7 -2.9 15.0 1.7' 1.1' .7 -.4 -1.6 272.3 9 Consumer energy -8.6 -8.0 -21.3 24.7 -11.3 22.2 .1 2.8 2.2 -4.2 -9.4 636.8 10 Other consumer goods 2.6 2.2 5.3 1.9 .C 4.5' .7' .3 .2 .0 -.1 255.9 11 Capital equipment 2.4 1.7 5.1 1.5 5.3' l.C .2 .1 -.1 .1 304.2 12 Intermediate materials3 .7 -1.5 -1.9 .6 -1.3 2.7 .0' .3' .3 -.5 -1.4 319.7 13 Excluding energy 1.4 -.4 -.4 .8 -.7 -.3 -.1 .0 .0 .0 -.2 304.2 Crude materials 14 Foods -4.0 -9.2 -21.5 -16.7 -20.6' 47.0' 6.1' 4.3 -.5 -2.6 -3.6 226.9 15 Energy -4.1 -10.0 -13.1 4.4 -5.9 -2.0 .0 .(K -.5 .1 -8.2 679.0 16 Other -5.8 -4.2 -5.5 -7.8 -4.4 1.0 .3' .3' -.4 -.3 -3.0 244.6 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 11998833 11998844 11998855rr Q4 Ql Q2 Q3 Q4' GROSS NATIONAL PRODUCT 1 3,401.6 3,774.7 3,988.5 3,852.5 3,917.5 3,960.6 4,016.9 4,059.3 By source 2 Personal consumption expenditures 2,229.3 2,423.0 2,582.3 2,480.1 2,525.0 2,563.3 2,606.1 22,,663344..88 3 Durable goods 289.6 331.1 361.5 341.5 351.5 356.5 376.0 362.0 4 Nondurable goods 817.0 872.4 912.2 883.1 895.7 910.2 914.5 928.3 5 Services 1,122.7 1,219.6 1,308.6 1,255.4 1,277.8 1,296.6 1,315.6 1,344.6 Gross private domestic investment 501.9 674.0 669.3 676.2 657.6 672.8 666.1 680.7 7 Fixed investment 508.3 607.0 661.8 637.2 639.1 657.3 665.9 685.0 8 Nonresidential 356.3 427.9 476.2 458.1 459.6 474.2 478.5 492.5 9 Structures 126.1 147.6 170.2 157.2 166.1 169.7 170.4 174.5 10 Producers' durable equipment 230.2 280.2 306.0 300.9 293.5 304.5 308.1 318.0 11 Residential structures 152.0 179.1 185.6 179.1 179.4 183.1 187.4 192.5 12 Change in business inventories -6.4 67.1 7.5 39.0 18.5 15.5 .2 -4.3 13 Nonfarm .8 58.0 11.8 36.4 14.2 10.8 3.1 19.0 14 Net exports of goods and services -5.3 -59.2 -78.5 -72.2 -42.3 -70.3 -87.8 -113.4 IS Exports 354.1 384.6 369.9 389.5 379.6 369.2 363.2 367.8 16 Imports 359.4 443.8 448.4 461.7 421.9 439.5 451.0 481.2 17 Government purchases of goods and services 675.7 736.8 815.4 768.4 777.2 794.8 832.5 857.2 18 Federal 284.8 312.9 355.4 332.9 334.4 337.8 364.8 384.7 19 State and local 390.9 423.9 460.0 435.5 442.8 457.1 467.7 472.5 By major type of product 7.0 Final sales, total 3,408.0 3,707.6 3,981.1 33,,881133..55 3,899.0 33,,994455..00 4,016.7 44,,006633..66 ?1 Goods 1,394.7 1,585.9 1,644.2 1,604.1 1,628.3 1,636.1 1,650.7 1,661.8 77 Durable 572.3 679.5 712.4 701.9 706.2 705.9 714.8 710.0 ?3 Nondurable 822.4 906.3 931.8 902.2 922.1 930.2 935.9 932.2 74 Services 1,678.0 1,806.6 1,928.8 1,855.6 1,887.6 1,908.2 1,939.9 1,986.4 25 Structures 328.9 382.2 419.5 392.9 401.5 416.3 426.2 430.6 26 Change in business inventories -6.4 67.1 7.5 39.0 18.5 15.5 .2 -4.3 27 Durable goods -.8 37.0 7.8 29.3 16.9 1.8 -6.4 13.4 28 Nondurable goods -5.5 30.1 1.2 9.7 1.6 13.7 6.6 -17.7 29 MEMO: Total GNP in 1982 dollars 3,275.2 3,492.0 3,570.0 3,515.6 3,547.8 3,557.4 3,584.1 3,590.8 NATIONAL INCOME 30 2,718.3 3,039.3 3,212.8 3,104.4 3,155.3 3,192.2 3,228.0 3,275.9 31 Compensation of employees 2,025.9 2,221.3 2,372.5 2,278.5 2,320.4 2,356.9 2,385.2 2,427.5 32 Wages and salaries 1,675.4 1,835.2 1,960.3 1,884.4 1,917.7 1,947.6 1,970.1 2,005.8 33 Government and government enterprises 324.2 346.1 370.8 354.7 362.6 367.4 372.6 379.7 34 Other 1,351.6 1,488.9 1,589.7 1,529.8 1,555.1 1,580.2 1,597.5 1,626.1 35 Supplement to wages and salaries 350.5 386.2 412.2 394.0 402.7 409.4 415.1 421.7 36 Employer contributions for social insurance 171.0 192.8 205.8 196.8 201.8 204.6 206.7 210.2 37 Other labor income 179.5 193.4 206.4 197.2 200.9 204.8 208.4 211.5 38 Proprietors' income1 192.3 233.7 242.2 232.9 239.4 240.9 237.5 250.9 39 Business and professional1 178.0 201.6 221.0 206.3 212.9 218.1 225.3 227.6 40 Farm1 14.3 32.1 21.2 26.6 26.5 22.8 12.2 23.3 41 Rental income of persons2 12.8 10.8 13.8 9.7 11.0 13.8 14.5 15.9 47 Corporate profits' 213.8 273.3 297.0 276.2 281.7 288.1 309.1 309.1 43 Profits before tax3 205.0 237.6 226.8 228.0 220.0 218.7 228.6 239.8 44 Inventory valuation adjustment -10.0 -5.4 -.6 -1.6 .7 2.2 4.7 -10.1 45 Capital consumption adjustment 18.8 41.0 70.9 49.8 61.1 67.2 75.9 79.4 46 Net interest 273.6 300.2 287.4 307.0 302.9 292.4 281.8 272.6 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • May 1986 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1984 1983 1984 1985' Q4 Q1 Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 2,836.4 3,111.9 3,293.5 3,186.2 3,240.9 3,280.1 3,298.5 2 Wage and salary disbursements 1,675.8 1,834.9 1,960.5 1,883.9 1,917.6 1.948.6 1.970.1 3 Commodity-producing industries 523.0 577.9 607.3 591.2 600.1 604.7 607.6 4 Manufacturing 397.4 438.9 457.6 449.0 453.5 454.9 457.2 5 Distributive industries 404.2 441.6 468.8 453.0 459.8 467.4 471.2 6 Service industries 424.4 469.4 513.6 485.5 495.2 508.1 518.7 7 Government and government enterprises 324.2 346.1 370.8 354.1 362.5 368.4 372.6 8 Other labor income 179.5 193.4 206.4 197.2 200.9 204.8 208.4 9 Proprietors' income1 192.3 233.7 242.2 232.9 239.4 240.9 237.5 10 Business and professional1 178.0 201.6 221.0 206.3 212.9 218.1 225.3 1 1 1 2 Re F n a ta r l m i 1 n come of persons2 1 12 4 . . 8 3 3 1 2 0 . . 1 8 2 1 1 3 . . 2 8 2 9 6 . . 7 6 2 1 6 1 . . 5 0 2 1 2 3 . . 8 8 1 1 2 4 . . 2 5 13 Dividends 68.0 74.6 78.9 76.9 77.9 78.7 79.1 14 Personal interest income 385.7 442.2 456.3 461.3 462.8 460.5 450.6 15 Transfer payments 442.2 454.7 484.5 459.2 477.6 481.0 488.1 16 Old-age survivors, disability, and health insurance benefits 221.7 235.7 249.2 250.7 256.5 253.4 241.8 17 LESS: Personal contributions for social insurance 119.8 132.4 146.3 148.3 149.7 149.1 134.9 18 EQUALS: Personal income 2,836.4 3,111.9 3,240.9 3,280.1 3.298.5 3,293.5 3,186.2 19 LESS: Personal tax and nontax payments 411.1 441.8 492.7 462.4 501.7 462.4 498.2 20 EQUALS: Disposable personal income 2,425.4 2,670.2 2,800.8 2,723.8 2,739.2 2.817.7 2.800.2 21 LESS: Personal outlays 2,292.2 2,497.7 2,671.8 2,559.4 2,608.4 2,650.6 2.697.6 22 EQUALS: Personal saving 133.2 172.5 129.0 164.5 130.9 167.2 102.6 MEMO Per capita (1982 dollars) 23 Gross national product 13,962.0 14,750.9 14,961.3 14,797.2 14,902.6 14,915.5 14,988.3 24 Personal consumption expenditures 9,147.8 9,461.8 9,682.2 9,520.8 9,613.3 9,658.1 9,742.1 2 2 5 6 Sa D vi i n s g p o r s a a t b e le (p p er e c r e so n n t) a l income 9,942 5 . . 5 C 10,412 6 . . ( 5 K 10,48 4 3 . . 6 0 10,44 6 1 . . 0 0 ' 10,41 4 l . .( 8 K 10,59 5 5 . . 9 0 ' 10,44 3 7 . . 7 0 ' GROSS SAVING 27 Gross saving 469.8 584.5 554.9 573.5 578.3 571.7 537.3 28 Gross private saving 600.6 693.0 695.0 700.3 677.7 723.6 681.8 29 Personal saving 133.2 172.5 129.0 164.5 130.9 167.2 102.6 30 Undistributed corporate profits1 67.9 101.6 127.6 108.2 116.3 122.6 137.8 31 Corporate inventory valuation adjustment -10.0 -5.4 -.6 -1.6 .7 2.2 4.7 Capital consumption allowances 32 Corporate 245.0 256.6 269.2 261.8 264.3 266.8 270.9 33 Noncorporate 154.6 162.3 169.2 165.9 166.3 167.0 170.5 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -130.8 -108.5 -140.1 -126.8 -99.4 -151.9 -144.5 36 Federal -179.4 -172.9 -199.3 -192.7 -162.6 -209.1 -201.3 37 State and local 48.6 64.4 59.2 65.8 63.2 57.3 56.9 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 39 Gross investment 469.2 583.0 554.0 565.8 580.8 539.9 40 Gross private domestic 501.9 674.0 669.3 676.2 657.6 672.8 666.1 41 Net foreign -32.7 -91.0 -115.3 -110.4 -76.8 -105.8 -126.2 42 Statistical discrepancy -1.5 -.9 2.5 -4.7 2.5 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1984 1985 IItteemm ccrreeddiittss oorr ddeebbiittss 11998833 11998844 11998855PP Q4 Qlr Q2' Q3' Q4P 1 Balance on current account -45,994 -107,358 -117,664 --3311,,880055 --2244,,118833 --2277,,662266 --2299,,330000 -36,559 --2288,,998822 --2233,,449911 --2277,,998800 --3333,,110011 -33,093 3 Merchandise trade balance2 -67,216 -114,107 -124,289 --3300,,888855 --2233,,336655 --2288,,448877 --3322,,995555 -39,482 4 Merchandise exports 201,712 219,916 213,990 5566,,224422 5555,,119988 5533,,553300 5522,,227766 52,986 5 Merchandise imports -268,928 -334,023 -338,279 --8877,,112277 --7788,,556633 --8822,,001177 --8855,,223311 -92,468 6 Military transactions, net -163 -1,765 -2,046 --557755 --221122 --558866 --442299 -818 7 Investment income, net3 25,401 19,109 24,683 44,,000033 22,,553300 55,,337788 88,,665511 8,124 8 Other service transactions, net 4,837 819 -1,229 --225533 3366 --550033 --557711 -194 9 Remittances, pensions, and other transfers -2,566 -2,891 -3,538 -782 -934 -843 -866 -896 10 U.S. government grants (excluding military) -6,287 -8,522 -11,246 -3,313 -2,238 -2,585 -3,130 -3,293 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,006 -5,516 -2,628 -734 -850 -853 -392 -532 12 Change in U.S. official reserve assets (increase, -) -1,196 -3,130 -3,858 -1,109 -233 -356 -121 -3,147 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -66 -979 -897 -194 -264 -180 -264 -189 15 Reserve position in International Monetary Fund -4,434 -995 908 -143 281 72 388 168 16 Foreign currencies 3,304 -1,156 -3,869 -772 -250 -248 -245 -3,126 17 Change in U.S. private assets abroad (increase, -)3 -48,842 -11,800 -31,698 -13,003 621 -1,342 -12,235 -18,742 18 Bank-reported claims -29,928 -8,504 -5,926 -4,933 135 4,095 -1,521 -8,635 19 Nonbank-reported claims -6,513 6,266 n.a. 970 1,201 1,863 -1,873 n.a. 20 U.S. purchase of foreign securities, net -7,007 -5,059 -7,871 -3,663 -2,494 -2,214 -1,708 -1,456 21 U.S. direct investments abroad, net3 -5,394 -4,503 -19,092 -5,377 1,779 -5,086 -7,133 -8,651 22 Change in foreign official assets in the United States (increase, +) 5,795 3,424 -1,908 7,119 -11,204 8,465 2,435 -1,604 23 U.S. Treasury securities 6,972 4,690 -610 5,814 -7,219 8,722 -90 -2,023 24 Other U.S. government obligations -476 167 -329 -67 -307 136 24 -182 25 Other U.S. government liabilities4 552 453 148 -197 -462 575 -95 130 26 Other U.S. liabilities reported by U.S. banks 545 663 372 2,052 -3,099 -134 2,974 631 27 Other foreign official assets5 -1,798 -2,549 -1,489 -483 -117 -834 -378 -160 28 Change in foreign private assets in the United States (increase, + )3 78,527 93,895 125,017 26,191 24,915 17,849 32,113 50,140 29 U.S. bank-reported liabilities 49,341 31,674 40,610 4,481 13,345 195 6,527 20,543 30 U.S. nonbank-reported liabilities -118 4,284 n.a. -1,863 -2,655 -1,324 509 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 8,721 22,440 20,910 9,501 2,633 5,106 7,452 5,719 32 Foreign purchases of other U.S. securities, net 8,636 12,983 50,712 9,380 9,510 7,135 11,674 22,393 33 Foreign direct investments in the United States, net3 11,947 22,514 16,255 4,692 2,082 6,737 5,951 1,485 34 Allocation of SDRs 0 0 0 00 0 0 00 00 35 Discrepancy 16,717 30,486 32,739 1133,,334411 10,934 3,863 77,,550000 1100,,444444 44,,330055 -425 -597 --33,,665500 44,,667744 37 Statistical discrepancy in recorded data before seasonal adjustment 16,717 30,486 32,739 99,,003366 11,359 4,460 1111,,115500 55,,777700 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -1,196 -3,130 -3,858 -1,109 -233 -356 -121 -3,147 39 Foreign official assets in the United States (increase, +) 5,243 2,971 -2,056 7,316 -10,742 7,890 2,530 -1,734 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) -8,283 -4,143 -6,750 812 -2,021 -1,808 -1,961 -960 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 194 190 58 61 10 12 15 22 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 • May 1986 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are not seasonally adjusted. 1985' 1986 IItteemm 11998833 11998844 11998855 July Aug. Sept. Oct. Nov. Dec. Jan. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 200,486 217,865 213,146 16,727 16,584 17,034 17,618 17,721 16,994 17,006 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 258,048 325,726 345,276 27,000 26,247 31,349 28,429 30,010 30,728 32,005 3 Trade balance -57,562 107,861 -132,129 -10,273 -9,663 -14,315 -10,811 -12,290 -13,734 -14,999 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 1986 TTyyppee 11998822 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Total 33,958 33,747 34,934 37,154 38,295 41,657 42,852 43,191 43,673 45,505 2 Gold stock, including Exchange Stabilization Fund1 11,148 11,121 11,096 11,090 11,090 11,090 11,090 11,090 11,090 11,090 3 Special drawing rights2-3 5,250 5,025 5,641 6,692 6,847 6,926 7,253 7,293 7,441 7,960 4 Reserve position in International Monetary Fund2 7,348 11,312 11,541 11,478 11,686 11,843 11,955 11,952 11,824 12,172 5 Foreign currencies4 10,212 6,289 6,656 7,894 8,672 11,798 12,554 12,856 13,318 14,283 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 1986 AAsssseettss 11998822 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Deposits 328 190 253 223 535 267 340 480 256 276 Assets held in custody 2 U.S. Treasury securities1 112,544 117,670 118,267 123,321 120,978 118,000 117,814 121,004 121,995 124,905 3 Earmarked gold2 14,716 14,414 14,265 14,251 14,245 14,242 14,240 14,245 14,193 14,172 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. NOTE. Excludes deposits and U.S. Treasury securities held for international Treasury securities payable in dollars and in foreign currencies. and regional organizations. Earmarked gold is gold held for foreign and interna- 2. Earmarked gold is valued at $42.22 per fine troy ounce. tional accounts and is not included in the gold stock of the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A55 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1 Millions of dollars, end of period 1985 1986 AAsssseett aaccccoouunntt 11998822 11998833 11998844 July' Aug/ Sept/ Oct/ Nov/ Dec. Jan.? All foreign countries 1 Total, all currencies 469,712 477,090 453,656 463,981 457,525 456,700 454,492 455,935 458,104 446,799 ? Claims on United States 91,805 115,542 113,393' 119,332 122,861 119,526 121,806 115,587 119,826 116,771 Parent bank 61,666 82,026 78,109' 83,995 86,735 85,463 87,255 82,327 87,201 84,229 4 Other banks in United States2 1 _ 13,664 14,737 14,051 13,258 12,808 12,096 13,070 11,928 5 Nonbanks2 21,620 20,600 22,075 20,805 21,743 21,164 19,555 20,614 6 Claims on foreigners 358,493 342,689 320,162' 323,032 313,288 314,997 310,480 317,498 315,763 308,211 7 Other branches of parent bank 91,168 96,004 95,184' 91,205 89,678 87,673 86,912 89,580 91,399 88,393 8 Banks 133,752 117,668 100,397 105,020 99,162 102,334 98,578 102,907 103,014 100,460 9 Public borrowers 24,131 24,517 23,343 23,209 22,958 23,389 23,478 23,613 23,395 23,422 10 Nonbank foreigners 109,442 107,785 101,238 103,598 101,490 101,601 101,512 101,398 97,955 95,936 11 Other assets 19,414 18,859 20,101 21,617 21,376 22,177 22,206 22,850 22,515 21,817 12 Total payable in U.S. dollars 361,982 371,508 350,636 346,112 341,872 335,326 331,610 329,622 336,339 321,707 n Claims on United States 90,085 113,436 111,426' 116,361 120,113 116,630 118,630 112,419 116,758 113,711 14 Parent bank 61,010 80,909 77,229' 82,845 85,806 84,252 86,101 81,162 85,971 83,084 1 1 6 5 O N t o h n e b r a b n a k n s k 2 s in United States2 1 3z,3Z/ 2 1 0 3 , , 6 5 9 0 7 0 1 1 9 4 , , 4 1 0 1 3 3 2 1 0 3 , , 8 4 6 4 3 4 1 1 2 9 , , 6 6 9 8 7 1 2 1 0 2 , , 2 2 7 5 1 8 1 1 1 9 , ,7 4 9 6 4 3 1 1 2 8 , , 4 3 6 2 7 0 1 1 1 9 , , 2 3 6 6 5 2 17 Claims on foreigners 259,871 247,406 228,600' 219,843 212,051 208,868 203,009 207,258 209,947 198,832 18 Other branches of parent bank 73,537 78,431 78,746' 74,504 72,475 69,241 68,576 70,548 72,689 68,748 19 Banks 106,447 93,332 76,940 75,282 70,916 71,013 67,344 69,646 71,738 65,790 70 Public borrowers 18,413 17,890 17,626 17,118 17,132 17,386 17,432 17,277 17,192 16,964 21 Nonbank foreigners 61,474 60,977 55,288 52,939 51,528 51,228 49,657 49,787 48,328 47,330 22 Other assets 12,026 10,666 10,610 9,908 9,708 9,828 9,971 9,945 9,634 9,164 United Kingdom 23 Total, all currencies 161,067 158,732 144,385 151,456 151,118 150,276 149,607 152,456 148,599 150,835 ?4 Claims on United States 27,354 34,433 27,731 31,102 35,256 32,620 33,816 33,774 33,150 36,308 ?5 Parent bank 23,017 29,111 21,918 24,330 28,156 25,829 26,956 26,718 26,970 29,837 76 Other banks in United States2 1 1,429 1,525 1,474 1,334 1,269 1,289 1,106 1,173 77 Nonbanks2 4,384 5,247 5,626 5,457 5,591 5,767 5,074 5,298 78 Claims on foreigners 127,734 119,280 111,828' 114,860 110,513 112,529 110,325 112,865 110,224 109,301 79 Other branches of parent bank 37,000 36,565 37,953' 33,572 32,654 32,418 32,110 30,600 31,576 30,934 30 Banks 50,767 43,352 37,443 40,546 37,796 40,504 37,858 40,482 39,250 39,257 31 Public borrowers 6,240 5,898 5,334 5,056 5,054 5,112 5,482 5,735 5,644 5,949 32 Nonbank foreigners 33,727 33,465 31,098 35,686 35,009 34,495 34,875 36,048 33,754 33,161 33 Other assets 5,979 5,019 4,882 5,494 5,349 5,127 5,466 5,817 5,225 5,226 34 Total payable in U.S. dollars 123,740 126,012 112,809 110,452 110,973 108,731 108,024 108,699 108,626 108,566 35 Claims on United States 26,761 33,756 26,868' 30,049 34,207 31,505 32,569 32,553 32,085 35,292 36 Parent bank 22,756 28,756 21,495' 23,957 27,853 25,358 26,495 26,210 26,568 29,470 37 Other banks in United States2 1,363 1,415 1,355 1,247 1,194 1,205 1,005 1,089 38 Nonbanks2 f 4,005 4,010 4,677 4,999 4,900 4,880 5,138 4,512 4,733 39 Claims on foreigners 92,228 88,917 82,945' 77,479 73,807 74,301 72,323 72,842 73,482 70,356 40 Other branches of parent bank 31,648 31,838 33,607' 28,656 27,031 26,596 26,719 24,989 26,011 25,083 41 Banks 36,717 32,188 26,805 26,349 24,382 25,458 23,888 25,667 26,139 24,013 47 Public borrowers 4,329 4,194 4,030 3,538 3,599 3,633 3,966 3,982 3,999 4,252 43 Nonbank foreigners 19,534 20,697 18,503 18,936 18,795 18,614 17,750 18,204 17,333 17,008 44 Other assets 4,751 3,339 2,996 2,924 2,959 2,925 3,132 3,304 3,059 2,918 Bahamas and Caymans 45 Total, all currencies 145,156 152,083 146,811 140,786 138,510 135,519 135,262 133,645 142,055 130,413 46 Claims on United States 59,403 75,309 77,296 75,242 74,421 72,744 73,572 69,923 74,984 68,576 47 Parent bank 34,653 48,720 49,449 48,657 47,815 47,299 47,918 45,811 50,553 44,405 48 Other banks in United States2 11,544 12,379 11,718 11,138 10,812 10,082 11,217 10,041 49 Nonbanks2 16,303 14,206 14,888 14,307 14,842 14,030 13,214 14,130 50 Claims on foreigners 81,450 72,868 65,598 62,204 60,954 59,466 58,467 60,503 63,894 58,510 51 Other branches of parent bank 18,720 20,626 17,661 15,669 16,479 15,428 15,856 17,050 19,042 16,468 5? Banks 42,699 36,842 30,246 29,182 27,544 27,087 25,861 26,768 28,182 25,476 53 Public borrowers 6,413 6,093 6,089 6,590 6,527 6,598 6,417 6,440 6,458 6,320 54 Nonbank foreigners 13,618 12,592 11,602 10,763 10,404 10,353 10,333 10,245 10,212 10,246 55 Other assets 4,303 3,906 3,917 3,340 3,135 3,309 3,223 3,219 3,177 3,327 56 Total payable in U.S. dollars 139,605 145,641 141,562 135,474 133,521 130,135 129,787 127,997 136,794 124,981 1. Beginning with June 1984 data, reported claims held by foreign branches 2. Data for assets vis-a-vis other banks in the United States and vis-a-vis have been reduced by an increase in the reporting threshold for "shell" branches nonbanks are combined for dates before June 1984. from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • May 1986 3.14 Continued 1985 1986 1V03 July Aug. Sept. Oct. Nov. Dec. Jan." All foreign countries 57 Total, all currencies 469,712 477,090 453,656 463,981' 457,525' 456,700' 454,492' 455,935' 458,104 446,799 58 Negotiable CDs3 n.a. n.a. 37,725 37,679 37,880 39,676 38,044 36,607 34,607 34,597 59 To United States 179,015 188,070 147,583 146,374 144,390 143,556' 140,142' 143,169' 155,276 142,290 60 Parent bank 75,621 81,261 78,739 80,650 77,472 78,631' 75,479' 81,171' 83,649 76,799 61 Other banks in United States 33,405 29,453 18,409 17,025 16,085 17,017' 15,602' 15,460' 16,894 14,724 62 Nonbanks 69,989 77,356 50,435 48,699 50,833 47,908' 49,061' 46,538' 54,733 50,767 63 To foreigners 270,853 269,685 247,907 256,751 252,6% 250,345' 252,253' 252,205' 246,003 248,589 64 Other branches of parent bank 90,191 90,615 93,909 92,979 90,477 87,854 88,539 88,438' 89,529 86,351 65 Banks 96,860 92,889 78,203 82,762 80,931 82,421' 82,470 81,871 76,878 83,995 66 Official institutions 19,614 18,896 20,281 20,935 21,234 21,020 21,322 21,658 19,523 19,921 67 Nonbank foreigners 64,188 68,845 55,514 60,075 60,054 59,050' 59,922' 60,238' 60,073 58,322 68 Other liabilities 19,844 19,335 20,441 23,177' 22,559' 23,123' 24,053' 23,954 22,218 21,323 69 Total payable in U.S. dollars 379,270 388,291 367,145 361,407 357,183 350,394' 346,883' 345,810' 353,416 337,032 70 Negotiable CDs3 n.a. n.a. 35,227 33,712 34,025 35,695 33,995 32,838 31,063 31,182 71 To United States 175,528 184,305 143,571 141,128 138,768 136,917' 134,266' 137,036' 149,899 136,898 72 Parent bank 73,295 79,035 76,254 77,537 74,164 74,778' 71,996' 77,892' 80,623 73,897 73 Other banks in United States 33,040 28,936 17,935 16,439 15,464 16,092' 15,128' 14,896' 16,264 14,011 74 Nonbanks 69,193 76,334 49,382 47,152 49,140 46,047' 47,142' 44,248' 53,012 48,990 75 To foreigners 192,510 194,139 178,260 177,130 174,624 167,785' 168,378' 165,393' 163,358 159,913 76 Other branches of parent bank 72,921 73,522 77,770 76,381 73,764 69,606 70,007 69,261 70,943 67,174 77 Banks 57,463 57,022 45,123 43,676 42,850 41,180 41,559 39,682' 37,323 38,358 78 Official institutions 15,055 13,855 15,773 15,935 16,238 16,224 16,010 15,905 14,354 14,796 79 Nonbank foreigners 47,071 51,260 39,594 41,138 41,772 40,775' 40,802' 40,545' 40,738 39,585 80 Other liabilities 11,232 9,847 10,087 9,437 9,766 9,997 10,244 10,543 9,0% 9,039 United Kingdom 81 Total, all currencies 161,067 158,732 144,385 151,456 151,118 150,276 149,607 152,456 148,599 150,835 82 Negotiable CDs3 n.a. n.a. 34,413 34,090 34,151 35,819 33,913 32,708 31,260 30,788 83 To United States 53,954 55,799 25,250 24,167 25,158 25,547 24,958 27,933 29,425 29,990 84 Parent bank 13,091 14,021 14,651 13,434 14,336 14,592 13,893 18,167 19,330 19,845 85 Other banks in United States 12,205 11,328 3,125 2,853 2,839 3,526 2,602 2,453 2,974 2,264 86 Nonbanks 28,658 30,450 7,474 7,880 7,983 7,429 8,463 7,313 7,121 7,881 87 To foreigners 99,567 95,847 77,424 83,480 82,317 79,671 80,646 81,446 78,522 80,635 88 Other branches of parent bank 18,361 19,038 21,631 23,647 22,348 20,233 20,175 21,932 23,389 21,858 89 Banks 44,020 41,624 30,436 32,389 31,518 32,041 33,102 32,200 28,581 32,326 90 Official institutions 11,504 10,151 10,154 10,180 10,823 10,824 10,812 10,519 9,676 10,093 91 Nonbank foreigners 25,682 25,034 15,203 17,264 17,628 16,573 16,557 16,795 16,876 16,358 92 Other liabilities 7,546 7,086 7,298 9,719 9,492 9,239 10,090 10,369 9,392 9,422 93 Total payable in U.S. dollars 130,261 131,167 117,497 114,124 115,065 112,816 111,263 112,681 112,697 112,073 94 Negotiable CDs3 n.a. n.a. 33,070 31,739 31,906 33,380 31,574 30,570 29,337 28,845 95 To United States 53,029 54,691 24,105 22,254 23,119 23,329 22,854 25,581 27,759 28,239 96 Parent bank 12,814 13,839 14,339 12,777 13,773 13,995 13,350 17,651 18,956 19,461 97 Other banks in United States 12,026 11,044 2,980 2,687 2,628 3,309 2,479 2,295 2,826 2,090 98 Nonbanks 28,189 29,808 6,786 6,790 6,718 6,025 7,025 5,635 5,977 6,688 99 To foreigners 73,477 73,279 56,923 56,783 56,208 52,245 52,469 52,091 51,977 50,673 100 Other branches of parent bank 14,300 15,403 18,294 19,640 18,241 15,999 15,480 16,687 18,493 16,614 101 Banks 28,810 29,320 18,356 17,249 16,975 15,787 17,053 15,840 14,344 14,872 102 Official institutions 9,668 8,279 8,871 8,430 9,005 9,055 8,877 8,357 7,661 8,242 103 Nonbank foreigners 20,699 20,277 11,402 11,464 11,987 11,404 11,059 11,207 11,479 10,945 104 Other liabilities 3,755 3,197 3,399 3,348 3,832 3,862 4,366 4,439 3,624 4,316 Bahamas and Caymans 105 Total, all currencies 145,156 152,083 146,811 140,786 138,510 135,5^ 135,262' 133,645' 142,055 130,413 106 Negotiable CDs3 n.a. n.a. 615 320 356 686 745 747 610 1,076 107 To United States 104,425 111,299 102,955 98,667 95,775 94,375' 92,978' 92,508' 103,548 91,943 108 Parent bank 47,081 50,980 47,162 47,141 43,372 44,647' 43,083' 43,509' 44,546 38,850 109 Other banks in United States 18,466 16,057 13,938 12,972 12,151 12,092' l l^ 11,874' 12,778 11,185 110 Nonbanks 38,878 44,262 41,855 38,554 40,252 37,636' 37,949' 37,125' 46,224 41,908 111 To foreigners 38,274 38,445 40,320 39,063 39,658 37,668' 38,787' 37,307' 35,053 35,271 112 Other branches of parent bank 15,7% 14,936 16,782 16,640 17,632 16,023 17,201 15,593 14,075 14,755 113 Banks 10,166 11,876 12,405 12,314 11,443 11,420 11,12c 10,954 10,669 11,107 114 Official institutions 1,967 1,919 2,054 1,939 1,687 1,763 1,872' 2,278 1,776 1,505 115 Nonbank foreigners 10,345 11,274 9,079 8,170 8,8% 8,462' 8,594' 8,482' 8,533 7,904 116 Other liabilities 2,457 2,339 2,921 2,736 2,721 2,790 2,752 3,083 2,844 2,123 117 Total payable in U.S. dollars 141,908 148,278 143,582 136,823 134,623 131,226' 130,992' 129,575' 138,322 126,536 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' 1986 IItteemm 11998833 11998844rr July Aug. Sept. Oct. Nov. Dec. Jan.P 1 Total1 177,950 180,552 180,753 181,131 180,328 178,331 179,931 178,612 180,655 By type 2 Liabilities reported by banks in the United States2 25,534 26,089 22,068 23,340 25,889 27,014 29,276 26,520 28,172 3 U.S. Treasury bills and certificates3 54,341 59,976 60,727 60,921 56,493 54,398 54,331 53,252 53,294 U.S. Treasury bonds and notes 4 Marketable 68,514 69,019 75,013 75,117 76,181 74,972 74,695 77,407 77,752 5 Nonmarketable4 7,250 5,800 4,500 3,550 3,550 3,550 3,550 3,550 3,550 6 U.S. securities other than U.S. Treasury securities5 22,311 19,668 18,445 18,382 18,215 18,397 18,079 17,883 17,887 By area I Western Europe1 67,645 69,776 73,299 75,234 74,514 74,257 76,832 74,290 74,214 8 Canada 2,438 1,528 2,010 1,664 1,561 1,586 1,507 1,314 1,119 9 Latin America and Caribbean 6,248 8,561 8,868 9,531 10,539 10,100 10,871 11,121 11,532 10 Asia 92,572 93,954 90,877 89,606 88,326 87,288 85,836 86,865 89,050 II Africa 958 1,264 1,259 1,110 1,397 1,410 1,629 1,824 1,904 12 Other countries6 8,089 5,469 4,440 4,166 3,991 3,690 3,256 3,198 2,836 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 1985 IItteemm 11998822 11998833 11998844 Mar. June Sept. Dec.^ 1 Banks' own liabilities 4,844 5,219 8,586 7,992 10,238 12,168 15,168 2 Banks' own claims 7,707 7,231 11,984 12,565 14,179 15,125 16,088 3 Deposits 4,251 2,731 4,998 5,941 7,362 8,498 8,329 4 Other claims 3,456 4,501 6,986 6,625 6,817 6,627 7,759 5 Claims of banks' domestic customers1 676 1,059 569 440 243 328 832 1. Assets owned by customers of the repotting bank located in the United NOTE. Data on claims exclude foreign currencies held by U.S. monetary States that represent claims on foreigners held by reporting banks for the accounts authorities, of their domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • May 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 1986 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998822 11998833 11998844 July' Aug. Sept. Oct. Nov. Dec. Jan.P 1 All foreigners 307,056 369,607 407,306' 417,127 420,118' 420,801 418,485 421,398' 434,243 431,567 2 Banks' own liabilities 227,089 279,087 306,898' 319,606 321,300' 323,382 322,801 324,106' 339,946 335,998 3 Demand deposits 15,889 17,470 19,571 17,626 17,735 20,926 18,450 20,959' 21,108 21,499 4 Time deposits1 68,797 90,632 110,413' 115,984 119,024' 115,221 114,438 114,302' 116,681 114,384 5 Other2 23,184 25,874 26,268' 25,972 25,711' 29,754 28,932 29,856' 29,311 30,681 6 Own foreign offices3 119,219 145,111 150,646' 160,025 158,830' 157,481 160,981 158,989' 172,846 169,434 7 Banks' custody liabilities4 79,967 90,520 100,408' 97,521 98,818 97,419 95,684 97,292' 94,298 95,568 8 U.S. Treasury bills and certificates5 55,628 68,669 76,368 75,440 75,699' 73,398 72,163 73,189' 68,785 69,801 9 Other negotiable and readily transferable instruments6 20,636 17,467 18,747 16,165 16,707' 17,160 16,755 16,979 17,964 17,714 10 Other 3,702 4,385 5,293' 5,916 6,412 6,861 6,766 7,124' 7,549 8,054 11 Nonmonetary international and regional organizations7 4,922 5,957 4,454' 5,019 7,353 7,467 6,766 77,,880033 5,566 7,437 12 Banks' own liabilities 1,909 4,632 2,014' 3,243 5,569 3,275 1,842 1,535 2,366 2,664 13 Demand deposits 106 297 254 134 252 243 143 252 85 96 14 Time deposits1 1,664 3,584 1,267' 2,556 4,366 2,261 1,299 1,051 2,067 2,369 15 Other2 139 750 493' 553 951 771 399 233 214 200 16 Banks' custody liabilities4 3,013 1,325 2,440 1,777 1,784 4,192 4,924 6,268 3,200 4,773 17 U.S. Treasury bills and certificates 1,621 463 916 767 742 2,759 3,636 5,069 1,736 3,216 18 Other negotiable and readily transferable instruments6 1,392 862 1,524 1,010 1,042 1,433 1,287 1,195 1,464 1,556 19 Other 0 0 0 0 1 0 1 5 0 1 20 Official institutions8 71,647 79,876 86,065 82,795 84,261' 82,382 81,412 83,608' 79,771 81,466 21 Banks' own liabilities 16,640 19,427 19,039 17,223 17,836' 20,262 21,178 23,323' 20,734 22,745 22 Demand deposits 1,899 1,837 1,823 1,546 1,538 2,151 1,707 2,018 2,077 1,712 23 Time deposits1 5,528 7,318 9,374 9,121 9,340' 8,954 10,277 10,523' 10,924 10,688 24 Other2 9,212 10,272 7,842 6,556 6,959' 9,157 9,195 10,783 7,733 10,346 25 Banks' custody liabilities4 55,008 60,448 67,026 65,572 66,425 62,120 60,234 60,284 59,037 58,721 26 U.S. Treasury bills and certificates5 46,658 54,341 59,976 60,727 60,921 56,493 54,398 54,331 53,252 53,294 27 Other negotiable and readily transferable instruments6 8,321 6,082 6,966 4,725 5,291 5,492 5,767 5,848 5,711 5,310 28 Other 28 25 84 120 213 135 69 105 75 117 29 Banks9 185,881 226,887 248,893' 257,748 256,475' 257,733 257,323 255,059' 274,675 266,976 30 Banks' own liabilities 169,449 205,347 225,368' 236,123 234,231' 235,106 235,372 233,226' 251,974 244,503 31 Unaffiliated foreign banks 50,230 60,236 74,722' 76,098 75,401' 77,625 74,391 74,237' 79,127 75,069 32 Demand deposits 8,675 8,759 10,556 8,647 8,594 10,468 9,045 10,043 10,271 11,562 33 Time deposits1 28,386 37,439 47,095' 49,783 49,873' 48,779 47,833 46,797' 48,959 44,733 34 Other2 13,169 14,038 17,071' 17,668 16,935' 18,377 17,514 17,397' 19,897 18,774 35 Own foreign offices3 119,219 145,111 150,646' 160,025 158,830' 157,481 160,981 158,989' 172,846 169,434 36 Banks' custody liabilities4 16,432 21,540 23,525 21,625 22,244 22,627 21,951 21,832' 22,701 22,472 37 U.S. Treasury bills and certificates 5,809 10,178 11,448 9,934 9,966 9,952 9,897 9,429' 9,554 8,992 38 Other negotiable and readily transferable instruments6 7,857 7,485 7,236 6,390 6,569 6,462 5,906 5,853 6,153 5,990 39 Other 2,766 3,877 4,841 5,301 5,710 6,213 6,148 6,551' 6,994 7,491 40 Other foreigners 44,606 56,887 67,894' 71,565 72,029' 73,219 72,984 74,928' 74,231 75,688 41 Banks' own liabilities 39,092 49,680 60,477' 63,018 63,664' 64,740 64,409 66,021' 64,871 66,086 42 Demand deposits 5,209 6,577 6,938 7,299 7,351 8,064 7,555 8,646 8,674 8,130 43 Time deposits 33,219 42,290 52,678' 54,524 55,446' 55,227 55,029 55,932' 54,730 56,594 44 Other2 664 813 861' 1,195 867 1,449 1,825 1,444 1,467 1,361 45 Banks' custody liabilities4 5,514 7,207 7,417' 8,547 8,365 8,479 8,575 8,907 9,359 9,602 46 U.S. Treasury bills and certificates 1,540 3,686 4,029 4,012 4,071' 4,193 4,232 4,360 4,243 4,300 47 Other negotiable and readily transferable instruments6 33,,006655 3,038 3,021 4,040 3,805' 3,774 3,795 4,084 4,636 4,858 48 Other 990088 483 367' 495 489 513 548 463 480 444 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 14,307 10,346 10,476 8,567 8,903 9,228 9,088 9,152 9,845 9,612 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 1986 AArreeaa aanndd ccoouunnttrryy 11998822 11998833 11998844 July Aug. Sept. Oct. Nov. Dec. Jan.? 1 Total 307,056 369,607 407,306' 417,127' 420,118' 420,801 418,485 421,398' 434,243 431,567 2 Foreign countries 302,134 363,649 402,852' 412,107' 412,765' 413,334 411,719 413,595' 428,677 424,130 3 Europe 117,756 138,072 153,145' 156,121' 160,095' 157,265 158,893 163,483' 163,041 162,614 4 Austria 519 585 615 567 711 767 613 655 693 691 5 Belgium-Luxembourg 2,517 2,709 4,114 5,743 5,416 5,725 5,262 5,556 5,214 5,138 6 Denmark 509 466 438 684 617 778 558 624 513 532 7 Finland 748 531 418 349 377 350 594 497 491 360 8 8,171 9,441 12,701 15,237 15,626 15,741 15,984' 15,863' 15,540 15,640 9 Germany 5,351 3,599 3,358 4,389 5,359 5,224 4,366 7,265' 4,835 5,622 10 537 520 699 588 531 593 536 574 664 566 11 Italy 5,626 8,462 10,762 9,624 9,537 9,088 9,717 9,069 9,542 7,761 1? Netherlands 3,362 4,290 4,731' 4,689 4,588 4,568 4,295 4,359' 4,076 4,048 13 Norway 1,567 1,673 1,548 1,183 1,156 1,043 1,132 1,008 848 721 14 Portugal 388 373 597 658 672 641 647 619 652 2,483 15 Spain 1,405 1,603 2,082 2,113 2,034 2,140 2,094 2,122 2,113 1,908 16 Sweden 1,390 1,799 1,676 2,559 2,008 1,668 1,760 1,482' 1,344 1,544 17 Switzerland 29,066 32,246 31,740 29,767' 29,475 29,290 28,495 28,992' 28,742 26,119 18 Turkey 296 467 584 598 404 516 417 288 429 507 19 United Kingdom 48,172 60,683 68,671 70,198' 73,530' 70,540 73,913 74,645' 76,491 80,517 20 Yugoslavia 499 562 602 626 622 647 626 675 673 599 21 Other Western Europe1 7,006 7,403 7,192 6,072' 6,884 7,432 7,403 8,619' 9,554 7,444 77 U.S.S.R 50 65 79 72 45 37 51 36 105 43 23 Other Eastern Europe2 576 596 537 406 503 477 429 533' 523 371 24 Canada 12,232 16,026 16,059' 16,284 16,739 17,358 16,288 16,428' 17,426 17,935 75 Latin America and Caribbean 114,163 140,088 153,381' 159,742' 157,638' 157,480 157,227 155,209' 167,721 160,852 76 Argentina 3,578 4,038 4,394 5,191' 5,187 5,634 5,872 5,899 6,029 5,790 77 44,744 55,818 56,897 55,858 55,497' 53,694 54,518 53,398 57,621 53,525 78 Bermuda 1,572 2,266 2,370 2,380 2,741 2,124 2,238 2,415' 2,765 2,684 79 Brazil 2,014 3,168 5,275 5,602 5,918 5,894 5,861 5,614 5,369 6,234 30 British West Indies 26,381 34,545 36,773 41,827' 38,359' 38,931 37,163 35,863 42,645 39,875 31 Chile 1,626 1,842 2,001 1,910 1,966 1,907 1,940 2,867 2,042 2,019 37 Colombia 2,594 11,,668899 2,514 2,421 2,543 2,599 2,562 2,920 3,102 3,342 33 Cuba 9 88 10 10 9 13 64 7 11 16 34 Ecuador 455 1,047 1,092 1,046 1,043 1,251 1,029 1,255 1,238 1,221 35 Guatemala 670 788 896 972 995 1,005 957 1,087 1,071 1,146 36 Jamaica 126 109 183 194 152 144 122 150 122 244 37 8,377 10,392 12,303' 13,123 13,381 13,809 13,610 13,948 14,045 13,706 38 Netherlands Antilles 3,597 3,879 4,220' 4,025 4,364 4,973 4,666 4,617 4,875 4,696 39 Panama 4,805 5,924 6,951 7,462 7,43C 7,168 8,251 6,506 7,490 7,416 40 Peru 1,147 1,166 1,266 1,113 1,143' 1,159 1,093 1,124 1,166 1,124 41 Uruguay 759 1,244 1,394 1,460 1,557 1,576 1,498 1,534 1,549 1,730 47 Venezuela 8,417 8,632 10,545 10,853 10,940 11,121 11,404 11,345 11,919 11,469 43 Other Latin America and Caribbean 3,291 3,535 4,297 4,297 4,414' 4,479 4,381 4,661 4,661 4,615 44 48,716 58,570 71,187' 71,701' 70,473' 73,292 71,643 71,047' 72,255 74,874 China 45 203 249 1,153 921' 1,117' 1,937' 1,809 1,380 1,594 1,003 46 2,761 4,051 4,99C 5,867' 6,065' 6,280' 6,455 7,427' 7,799 9,217 47 Hong Kong 4,465 6,657 6,581' 7,831 8,001' 7,924 7,964 8,170' 8,061 8,090 48 433 464 507 555 484 644 473 562 711 606 49 Indonesia 857 997 1,033 1,463 1,337 1,363 1,570 1,381 1,466 1,525 50 Israel 606 1,722 1,268 1,011 885 1,189 2,118 1,595 1,611 1,458 51 16,078 18,079 21,640' 22,913 22,537 23,597 22,059 21,689 23,060 25,042 57 Korea 1,692 1,648 1,730' 1,493 1,580 1,657 1,751 1,685 1,668 1,504 53 Philippines 770 1,234 1,383 1,335 1,694 1,607 1,325 1,189 1,132 930 54 Thailand 629 747 1,257 984 1,073 1,029 1,014 1,066 1,358 1,199 55 Middle-East oil-exporting countries3 13,433 12,976 16,804 15,410 14,817' 15,352 15,252 14,941 14,523 15,175 56 Other Asia 6,789 9,748 12,841 11,918' 10,885' 10,713 9,852 9,961 9,270 9,124 57 3,124 2,827 3,396 3,384 3,501 3,635 3,723 3,989 4,887 4,650 58 Egypt 432 671 647 881 737 923 885 780 1,363 1,080 59 Morocco 81 84 118 98 162 157 140 145 163 98 60 South Africa 292 449 328 181 420 370 404 462 388 573 61 23 87 153 87 103 115 136 140 163 73 67 Oil-exporting countries4 1,280 620 1,189 1,099 1,092 1,049 1,076 1,407 1,494 1,644 63 Other Africa 1,016 917 961 1,037 986 1,021 1,082 1,056 1,317 1,182 64 6,143 8,067 5,684 4,876 4,319 4,303 3,945 3,440 3,347 3,205 65 5,904 7,857 5,300 4,364 3,850 3,762 3,451 2,906 2,779 2,707 66 All other 239 210 384 511 469 541 494 534 568 498 67 Nonmonetary international and regional organizations 4,922 5,957 4,454' 5,019 7,353 7,467 66,,776666 7,803 5,566 7,437 68 International 4,049 5,273 3,747' 3,967 6,458 6,542 5,770 6,952 4,551 6,059 69 Latin American regional 517 419 587 782 739 796 646 580 894 909 70 Other regional5 357 265 120 270 156 129 350 271 121 470 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 • May 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 1986 AArreeaa aanndd ccoouunnttrryy 11998822 11998833 11998844 July Aug. Sept. Oct. Nov. Dec. Jan.'' 1 Total 355,705 391,312 399,422' 390,608' 387,607' 392,778 380,556 384,041' 407,902 391,030 2 Foreign countries 355,636 391,148 398,623' 390,333' 387,168' 392,395 379,787 383,429' 406,871 389,738 3 Europe 85,584 91,927 98,274' 100,481' 100,711' 105,734 101,668 106,440' 109,054 105,259 4 Austria 229 401 433 742' 703 763 673 614 598 485 5 Belgium-Luxembourg 5,138 5,639 4,794 5,818' 5,501 6,147 5,882 6,801' 5,739 5,814 6 Denmark 554 1,275 648 498 492 615 636 558 706 863 V Finland 990 1,044 898 875 738 905 789 909 823 827 8 France 7,251 8,766 9,157' 10,19CK 10,287' 11,029 10,190 9,785' 9,314 9,630 9 Germany 1,876 1,284 1,306' 1,138' 948 999 1,036 1,355' 1,630 1,731 10 Greece 452 476 817 947 959 1,016 966 854 991 933 11 Italy 7,560 9,018 9,119 7,628' 6,532' 7,436 7,597 7,765' 8,833 7,473 12 Netherlands 1,425 1,267 1,356' 1,146' 1,200 1,297 1,110 1,389 1,373 1,297 13 Norway 572 690 675 710 683 858 788 755 697 680 14 Portugal 950 1,114 1,243 1,151 1,181 1,211 1,141 1,123' 1,058 1,021 15 Spain 3,744 3,573 2,884 2,387 2,156 2,438 2,310 2,199 1,908 1,780 16 Sweden 3,038 3,358 2,230' 2,713' 2,496 2,474 2,643 2,546 2,208 2,171 17 Switzerland 1,639 1,863 2,123 2,669 2,629' 3,091 2,604 3,162 3,161 3,341 18 Turkey 560 812 1,130 1,238' 1,234 1,303 1,355 1,269 1,200 1,523 19 United Kingdom 45,781 47,364 55,445' 56,532' 58,952' 60,105 57,579 61,180' 64,619 61,758 20 Yugoslavia 1,430 1,718 1,886 1,972 1,954 1,899 1,867 1,879 1,961 1,901 21 Other Western Europe1 368 477 596 679 629 699 1,206 1,082' 998 717 22 U.S.S.R 263 192 142 250 239 199 165 128 130 169 23 Other Eastern Europe2 1,762 1,598 1,389' 1,195' 1,198 1,252 1,131 1,086 1,107 1,145 24 Canada 13,678 16,341 16,109' 16,706' 17,005 16,940 15,941 16,209' 17,579 18,052 25 Latin America and Caribbean 187,969 205,491 207,862' 200,819' 196,966' 196,388 190,759 191,663' 202,194 188,818 2b Argentina 10,974 11,749 11,050' 11,456 11,293 11,855 11,236 11,486 11,467 11,460 27 Bahamas 56,649 59,633 58,009' 55,622' 53,559' 53,414 51,236 49,015' 57,736 49,747 28 Bermuda 603 566 592 405 502 480 1,017 498' 484 587 29 Brazil 23,271 24,667 26,315 26,580' 26,441 26,017 25,397 25,376' 25,301 25,228 30 British West Indies 29,101 35,527 38,205' 37,457' 35,861' 35,096 34,258 37,063' 38,440 34,141 31 Chile 5,513 6,072 6,839 6,663 6,476 6,524 6,145 6,198 6,598 6,531 32 Colombia 3,211 3,745 3,499 3,210 3,205 3,195 3,210 3,222 3,259 3,181 33 Cuba 3 0 0 0 0 0 4 0 0 0 34 Ecuador 2,062 2,307 2,420 2,450 2,430 2,486 2,411 2,419 2,390 2,437 35 Guatemala3 124 129 158 153 149 168 168 197 194 174 36 Jamaica3 181 215 252 234 228 228 222 222 224 228 37 Mexico 29,552 34,802 34,885' 32,129 32,375 32,349 31,720 32,424 32,239 31,772 38 Netherlands Antilles 839 1,154 1,350 1,110 1,135 1,170 1,387 1,071 1,340 1,024 39 Panama 10,210 7,848 7,707 6,985 6,923 7,108 6,526 6,519 6,640 6,532 40 Peru 2,357 2,536 2,384 2,237 2,221 2,206 2,016 1,990 1,947 1,859 41 Uruguay 686 977 1,088 1,007 1,018 1,035 947 954 958 966 42 Venezuela 10,643 11,287 11,017 10,992 11,028 11,052 10,838 10,876 10,877 10,937 43 Other Latin America and Caribbean 1,991 2,277 2,091 2,129 2,122 2,005 2,022 2,135 2,099 2,015 44 60,952 67,837 66,316' 6633,,335511'' 6633,,777788'' 6644,,554477 6622,,884477 6600,,555511 6699,,226677 6688,,995555 China 45 Mainland 214 292 710 635 560 1,148 997 748 639 750 46 Taiwan 2,288 1,908 1,849 1,540 1,527 1,525 1,329 1,258 1,535 1,300 4/ Hong Kong 6,787 8,489 7,293' 7,473 7,999 7,718 6,917 6,472' 6,796 6,920 48 India 222 330 425 385 460 461 388 439 450 332 49 Indonesia 348 805 724 631 623 718 653 608 698 692 50 Israel 2,029 1,832 2,088 2,053 1,955 1,875 1,901 1,958 1,982 1,779 51 Japan 28,379 30,354 29,066 26,453' 27,785 27,002 28,558 2266,,774411'' 34,336 35,336 52 Korea 9,387 9,943 9,285 9,712' 9,337 9,223 9,096 88,,990088 9,224 8,855 53 Philippines 2,625 2,107 2,555' 2,454 2,487 2,445 2,239 2,285 2,224 2,207 54 Thailand 643 1,219 1,125 733' 745' 781 756 788 840 793 55 Middle East oil-exporting countries4 3,087 4,954 5,044 5,315 4,116 4,845 4,576 4,239' 4,298 3,975 56 Other Asia 4,943 5,603 6,152' 5,967 6,185' 6,805 5,436 6,106 6,245 6,016 57 Africa 5,346 6,654 6,615 5,920' 5,718 5,700 5,463 5,421' 5,400 5,416 58 Egypt 322 747 728 549' 585 634 668 685 721 677 59 Morocco 353 440 583 596 598 592 610 584 575 591 60 South Africa 2,012 2,634 2,795 2,421' 2,214 2,062 1,968 1,848 1,935 1,965 61 Zaire 57 33 18 24 25 22 21 21 20 18 62 Oil-exporting countries5 801 1,073 842 743 722 859 674 677' 630 583 63 Other 1,802 1,727 1,649 1,587 1,574 1,531 1,521 1,606' 1,520 1,583 64 Other countries 2,107 2,898 3,447 3,057 2,991 3,087 3,111 3,144' 3,378 3,236 65 Australia 1,713 2,256 2,769 2,320 2,227 2,304 2,293 2,341 2,400 2,415 66 All other 394 642 678 737 764 783 818 803 978 821 67 Nonmonetary international and regional organizations6 68 164 80C 275 438 382 768 612 1,030 1,292 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 1986 TTyyppee ooff ccllaaiimm 11998822 11998833 11998844'' July' Aug/ Sept. Oct. Nov.' Dec. Jan.P 1 Total 333333399999996666666,,,,,,,000000011111115555555 444444422222226666666,,,,,,,222222211111115555555 444444433333332222222,,,,,,,333333333333338888888 444444422222226666666,,,,,,,222222244444446666666 444444433333336666666,,,,,,,666666622222224444444 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 333333355555555555555,,,,,,,777777700000005555555 333333399999991111111,,,,,,,333333311111112222222 333333399999999999999,,,,,,,444444422222222222222 390,608 387,607 333333399999992222222,,,,,,,777777777777778888888 380,556 384,041 444444400000007777777,,,,,,,999999900000002222222 391,030 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 44444445555555,,,,,,,444444422222222222222 55555557777777,,,,,,,555555566666669999999 66666662222222,,,,,,,222222233333337777777 61,196 60,961 66666662222222,,,,,,,111111199999996666666 60,132 59,920 66666660000000,,,,,,,333333322222225555555 60,337 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 111111122222227777777,,,,,,,222222299999993333333 111111144444446666666,,,,,,,333333399999993333333 111111155555556666666,,,,,,,222222211111116666666 158,238 155,375 111111155555559999999,,,,,,,555555522222220000000 156,011 158,752 111111177777776666666,,,,,,,333333366666663333333 163,144 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222221111111,,,,,,,333333377777777777777 111111122222223333333,,,,,,,888888833333337777777 111111122222224444444,,,,,,,111111199999992222222 117,675 118,005 111111111111118888888,,,,,,,000000044444448888888 113,117 114,714 111111122222221111111,,,,,,,111111155555555555555 117,541 66 DDeeppoossiittss 44444444444444,,,,,,,222222222222223333333 44444447777777,,,,,,,111111122222226666666 44444448888888,,,,,,,444444488888886666666 49,582 50,216 44444449999999,,,,,,,444444400000006666666 46,707 47,136 55555552222222,,,,,,,999999933333339999999 50,323 77 OOtthheerr 77777777777777,,,,,,,111111155555553333333 77777776666666,,,,,,,777777711111111111111 77777775555555,,,,,,,777777700000006666666 68,093 67,789 66666668888888,,,,,,,666666644444442222222 66,410 67,578 66666668888888,,,,,,,222222211111116666666 67,218 88 AAllll ootthheerr ffoorreeiiggnneerrss 66666661111111,,,,,,,666666611111114444444 66666663333333,,,,,,,555555511111114444444 55555556666666,,,,,,,777777777777777777777 53,499 53,266 55555553333333,,,,,,,000000011111113333333 51,296 50,654 55555550000000,,,,,,,000000055555558888888 50,007 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 44444440000000,,,,,,,333333311111110000000 33333334444444,,,,,,,999999900000003333333 33333332222222,,,,,,,999999911111116666666 33333333333333,,,,,,,444444466666668888888 22222228888888,,,,,,,777777722222223333333 2222222,,,,,,,444444499999991111111 2222222,,,,,,,999999966666669999999 3333333,,,,,,,333333388888880000000 3333333,,,,,,,333333311111114444444 3333333,,,,,,,222222222222227777777 11 Negotiable and readily transferable 33333330000000,,,,,,,777777766666663333333 22222226666666,,,,,,,000000066666664444444 22222223333333,,,,,,,888888800000005555555 22222224444444,,,,,,,888888822222227777777 11111119999999,,,,,,,222222288888884444444 12 Outstanding collections and other 7777777,,,,,,,000000055555556666666 5555555,,,,,,,888888877777770000000 5555555,,,,,,,777777733333332222222 5555555,,,,,,,333333322222227777777 6666666,,,,,,,222222211111111111111 13 MEMO: Customer liability on 33333338888888,,,,,,,111111155555553333333 33333337777777,,,,,,,777777711111115555555 33333337777777,,,,,,,111111100000003333333 33333330000000,,,,,,,555555511111117777777 22222228888888,,,,,,,222222233333332222222 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 42,499 46,337 40,714 37,971 38,754 38,190' 37,563' 37,797 45,365 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 1985 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998822 11998833 11998844 Mar.' June' Sept. Dec.? 1 Total 228,150 243,715 243,952 240,325 231,724 231,768 225,185 By borrower 2 Maturity of 1 year or less1 173,917 176,158 167,858 165,951 158,622 161,675 158,309 3 Foreign public borrowers 21,256 24,039 23,912 23,688 23,784 26,466 26,422 4 All other foreigners 152,661 152,120 143,947 142,263 134,838 135,210 131,887 5 Maturity of over 1 year1 54,233 67,557 76,094 74,374 73,102 70,093 66,875 6 Foreign public borrowers 23,137 32,521 38,695 38,169 37,535 36,257 34,451 7 All other foreigners 31,095 35,036 37,399 36,206 35,567 33,836 32,424 By area Maturity of 1 year or less1 8 Europe 50,500 56,117 58,498 60,660 55,620 57,867 55,236 9 Canada 7,642 6,211 6,028 7,576 6,155 6,060 6,170 10 Latin America and Caribbean 73,291 73,660 62,791 60,342 63,510 62,963 62,742 11 37,578 34,403 33,504 30,903 27,569 29,049 27,625 12 Africa 3,680 4,199 4,442 4,109 4,003 3,954 3,755 13 All other2 1,226 1,569 2,593 2,360 1,764 1,782 2,783 Maturity of over 1 year1 14 Europe 11,636 13,576 9,605 8,545 8,739 8,078 7,611 15 Canada 1,931 1,857 1,882 2,181 2,116 1,932 1,804 16 Latin America and Caribbean 35,247 43,888 56,144 55,411 53,507 52,049 50,446 17 3,185 4,850 5,323 5,221 5,123 5,212 4,564 18 Africa 1,494 2,286 2,033 1,963 1,996 1,665 1,527 19 All other2 740 1,101 1,107 1,053 1,622 1,157 923 1. Remaining time to maturity. 2. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • May 1986 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks' Billions of dollars, end of period 1984 1985 AArreeaa oorr ccoouunnttrryy 11998811 11998822 11998833 Mar. June7 Sept. Dec. Mar. June Sept. Dec.P 1 Total 415.2 438.7 437.3 435.1 432.4 411.9 409.2 411.3r 402.5' 403.9 403.5 2 G-10 countries and Switzerland 175.5 179.7 168.0 166.0 157.9 148.2 148.0 152.8 146.9' 153.1' 155.7 3 Belgium-Luxembourg 13.3 13.1 12.4 11.0 10.9 9.8 8.8 9.4 9.0 9.6' 9.2 4 France 15.3 17.1 16.3 15.9 14.2 14.3 14.1 14.6 13.6 14.9 12.6 5 Germany 12.9 12.7 11.3 11.7 10.9 10.0 9.0 8.9 9.6 9.9' 11.0 6 Italy 9.6 10.3 11.4 11.2 11.5 9.7 10.1 10.0 8.5 8.4 9.7 7 Netherlands 4.0 3.6 3.5 3.4 3.0 3.4 3.9 3.8' 3.7 3.4 3.9 8 Sweden 3.7 5.0 5.1 5.2 4.3 3.5 3.2 3.1 2.8 3.1 2.7 9 Switzerland 5.5 5.0 4.3 4.3 4.2 3.9 3.9 4.2 4.0 4.1 4.4 10 United Kingdom 70.1 72.1 65.4 65.1 60.6 57.5 60.0 65.1 65.7' 68.(K 66.9 11 Canada 10.9 10.4 8.3 8.6 8.9 8.1 7.9 9.0 8.0 7.5 8.0 12 Japan 30.2 30.2 29.9 29.7 29.3 27.9 27.2 24.8 22.(Y 24.3 27.3 13 Other developed countries 28.4 33.7 36.1 35.7 37.2 36.4 33.9 33.0 32.5 32.3 30.5 14 Austria 1.9 1.9 1.9 2.0 1.9 1.8 1.6 1.6 1.6 1.7 1.5 15 Denmark 2.3 2.4 3.4 3.4 3.1 2.9 2.2 2.1 1.9 2.1 2.4 16 Finland 1.7 2.2 2.4 2.1 2.3 1.9 1.9 1.8 1.8 1.8 1.6 17 Greece 2.8 3.0 2.8 3.0 3.3 3.2 2.9 2.9 2.9 2.8 2.6 18 Norway 3.1 3.3 3.3 3.2 3.2 3.2 3.0 2.9 2.9 3.4 2.9 19 Portugal 1.1 1.5 1.5 1.4 1.7 1.6 1.4 1.4 1.3 1.4 1.3 20 6.6 7.5 7.1 7.1 7.3 6.9 6.5 6.4 5.9 6.2 5.8 21 Turkey 1.4 1.4 1.7 1.9 2.0 2.0 1.9 1.9 2.0 2.1 1.9 22 Other Western Europe 2.1 2.3 1.8 1.8 1.9 1.7 1.7 1.7 1.8 1.7 2.0 23 South Africa 2.8 3.7 4.7 4.8 4.7 5.0 4.5 4.2 3.9 3.3 3.2 24 Australia 2.5 4.4 5.5 5.2 5.8 6.3 6.2 6.2 6.4 5.8 5.2 25 OPEC countries2 24.8 27.4 28.9 28.6 27.0 25.2 25.8 25.4 23.8 24.1 21.8 26 Ecuador 2.2 2.2 2.2 2.1 2.1 2.1 2.2 2.2 2.3 2.3 2.2 27 Venezuela 9.9 10.5 9.9 9.7 9.5 9.2 9.3 9.3 9.3 9.2 8.9 28 Indonesia 2.6 3.2 3.8 4.0 4.3 4.0 3.9 3.8 3.6 3.6 3.4 29 Middle East countries 7.5 8.7 10.0 9.8 8.4 7.4 8.2 7.8 6.6 6.7 5.7 30 African countries 2.5 2.8 3.0 3.0 2.7 2.5 2.3 2.3 2.2 2.3 1.6 31 Non-OPEC developing countries 96.3 107.1 111.6 112.2 113.5 112.7 112.9 111.8 111.0 111.2' 106.8 Latin America 32 Argentina 9.4 8.9 9.5 9.5 9.2 9.1 8.7 8.6 8.6 9.3 8.9 33 Brazil 19.1 22.9 23.1 25.1 25.4 26.3 26.3 26.4 26.6 26.1 25.6 34 Chile 5.8 6.3 6.4 6.5 6.7 7.1 7.0 7.0 6.9 6.9 6.9 35 Colombia 2.6 3.1 3.2 3.1 3.0 2.9 2.9 2.8 2.7 2.6 2.7 36 Mexico : 21.6 24.5 26.1 25.6 26.2 26.2 26.0 25.7 25.6 25.2 25.3 37 Peru 2.0 2.6 2.4 2.3 2.3 2.2 2.2 2.2 2.1 2.0 1.8 38 Other Latin America 4.1 4.0 4.2 4.4 4.1 3.9 3.9 3.7 3.6 3.5 3.4 Asia China 39 Mainland .2 .2 .3 .3 .6 .5 .7 .7 .3 1.1 .5 40 Taiwan 5.1 5.3 5.3 4.9 5.4 5.3 5.3 5.4 5.5 5.2 4.5 41 .3 .6 1.0 1.0 1.0 1.1 1.0 1.0 1.0 1.2 1.4 42 2.1 2.3 1.9 1.6 1.9 1.7 1.8 1.7 2.3 1.5 1.6 43 Korea (South) 9.4 10.9 11.3 11.1 11.3 10.5 10.9 10.6 10.3 10.7' 9.7 44 Malaysia 1.7 2.1 2.9 2.8 2.9 3.1 3.0 2.9 3.0 2.9 2.5 45 Philippines 6.0 6.3 6.2 6.7 6.3 5.9 6.0 6.1 6.0 6.1 5.8 46 Thailand 1.5 1.6 2.2 2.1 1.9 1.8 1.8 1.7 1.6 1.6' 1.4 47 Other Asia 1.0 1.1 1.0 .9 1.1 1.0 1.2 1.1 1.0 1.1 1.1 Africa 48 Egypt 1.1 1.2 1.5 1.4 1.4 1.2 1.2 1.1 1.0 1.0 1.0 49 Morocco .7 .7 .8 .8 .8 .8 .8 .8 .8 .9 .9 50 .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa3 2.3 2.4 2.3 2.2 1.9 1.9 2.1 2.2 2.0 2.0 1.9 52 Eastern Europe 7.8 6.2 5.3 4.9 4.9 4.5 4.4 4.3 4.3 4.6 4.1 53 U.S.S.R .6 .3 .2 .2 .2 .2 .1 .2 .3 .2 .1 54 Yugoslavia 2.5 2.2 2.4 2.3 2.3 2.3 2.3 2.2 2.2 2.5 2.2 55 Other 4.7 3.7 2.8 2.5 2.4 2.1 2.0 1.9 1.8 1.9 1.8 56 Offshore banking centers 63.7 66.8 70.5 71.4 74.6 67.4 67.0 66.9' 66.8 61.4' 67.4 57 Bahamas 19.0 19.0 21.8 24.6 27.5 23.8 21.5 21.9' 22.(V 16.9' 21.6 58 Bermuda .7 .9 .9 .7 .7 1.0 .9 .7 .9 .8 .7 59 Cayman Islands and other British West Indies 12.4 12.9 12.2 12.0 12.2 11.1 11.7 12.4 12.4 12.5 13.4 60 Netherlands Antilles 3.2 3.3 4.2 3.3 3.3 3.1 3.4 3.3 3.2 2.3 2.3 61 Panama4 7.7 7.6 6.0 6.3 6.6 5.7 6.8 5.7 5.5 6.2 6.2 62 Lebanon .2 .1 .1 .1 .1 .1 .1 .1 .1 .0 .1 63 Hong Kong 11.8 13.9 15.0 14.4 13.9 13.1 12.8 12.9 13.1 13.2 13.3 64 Singapore 8.7 9.2 10.3 10.0 10.3 9.5 9.8 10.0 9.7 9.4 9.8 65 Others5 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 18.8 17.9 17.0 16.3 17.4 17.4 17.3 17.1 17.3' 17.6' 17.1 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 Sept. Dec. Mar. June Sept. 1 Total 28,618 27,512 25,346 31,438 29,357' 26,243' 24,591' 25,083 2 Payable in dollars 24,909 24,280 22,233 28,538 26,389' 23,466' 21,945' 22,425 3 Payable in foreign currencies 3,709 3,232 3,113 2,900 2,968 2,777' 2,646' 2,658 By type 4 Financial liabilities 12,157 11,066 10,572 16,488 14,509' 11,722' 11,489' 11,814 5 Payable in dollars 9,499 8,858 8,700 14,602 12,553' 9,873' 9,533' 9,863 6 Payable in foreign currencies 2,658 2,208 1,872 1,886 1,955 1,849' 1,956' 1,951 7 Commercial liabilities 16,461 16,446 14,774 14,950 14,849 14,521 13,103 13,269 8 Trade payables 10,818 9,438 7,765 7,015 7,005 7,052 5,854 5,576 9 Advance receipts and other liabilities.. 5,643 7,008 7,009 7,936 7,843 7,469 7,249 7,693 10 Payable in dollars 15,409 15,423 13,533 13,936 13,836 13,593 12,413 12,562 11 Payable in foreign currencies 1,052 1,023 1,241 1,014 1,013 928 690 707 By area or country Financial liabilities 12 Europe 6,825 6,501 5,742 6,697 6,728' 6,138' 5,934' 6,572 13 Belgium-Luxembourg 471 505 302 428 471 298 351 367 14 France 709 783 843 910 995 896 865 849 15 Germany 491 467 502 521 489 506 474 493 16 Netherlands 748 711 621 605 590 6^ 604' 617 17 Switzerland 715 792 486 514 569 541 566 593 18 United Kingdom 3,565 3,102 2,839 3,470 3,297' 3,039' 2,825' 3,373 19 Canada 963 746 764 825 863 840 850 854 20 Latin America and Caribbean 3,356 2,751 2,596 7,253 5,086 3,147 3,106 2,624 21 Bahamas 1,279 904 751 3,052 1,926 1,341 1,107 1,135 22 Bermuda 7 14 13 11 13 25 10 4 23 Brazil 22 28 32 33 35 29 27 23 24 British West Indies 1,241 1,027 1,041 3,271 2,103 1,521 1,734 1,249 25 Mexico 102 121 213 260 367 25 32 28 26 Venezuela 98 114 124 130 137 3 3 3 27 Asia 976 1,039 1,424 1,662 1,777 1,555 1,555 1,728 28 Japan 792 715 991 1,174 1,209 1,033 965 1,098 29 Middle East oil-exporting countries2. 75 169 170 151 155 124 147 82 30 Africa 14 17 19 16 14 12 14 14 0 0 0 1 0 0 0 0 31 Oil-exporting countries3 24 12 27 35 41 31 30 22 32 All other4 Commercial liabilities 3,770 3,831 3,245 4,052 4,001 3,519 3,485 3,894 33 Europe 71 52 62 34 48 37 53 56 34 Belgium-Luxembourg 573 598 437 430 438 401 425 432 35 France 545 468 427 561 622 590 431 601 36 Germany 220 346 268 238 245 272 284 386 37 Netherlands 424 367 241 405 257 233 353 293 38 Switzerland 880 1,027 732 1,224 1,095 752 740 869 39 United Kingdom 40 Canada 897 1,495 1,841 1,906 1,975 1,727 1,494 1,384 41 Latin America and Caribbean 1,044 1,570 1,473 1,780 1,871 1,717 1,244 1,237 42 Bahamas 2 16 1 1 7 11 12 2 43 Bermuda 67 117 67 110 114 112 77 105 44 Brazil 67 60 44 68 124 101 90 120 45 British West Indies 2 32 6 8 32 21 1 15 46 Mexico 340 436 585 641 586 654 492 415 47 Venezuela 276 642 432 628 636 395 309 283 48 Asia 9,384 8,144 6,741 5,547 5,285 5,721 5,259 5,197 49 Japan 1,094 1,226 1,247 1,429 1,256 1,241 1,232 1,429 50 Middle East oil-exporting countries2-5. 7,008 5,503 4,178 2,364 2,372 2,786 2,3% 2,099 51 Africa 703 753 553 597 588 765 633 570 52 Oil-exporting countries3 344 277 167 251 233 294 265 235 53 All other4 664 651 921 1,068 1,128 1,070 988 988 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 • May 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 Sept. Dec. Mar. June Sept. 1 Total 36,185 28,725 34,911 30,939 29,839r 28,672' 26,968' 28,748 2 Payable in dollars 32,582 26,085 31,815 28,148 27,242' 26,100' 24,339' 25,882 3 Payable in foreign currencies 3,603 2,640 3,096 2,792 2,597 2,571 2,629 2,866 By type 4 Financial claims 21,142 17,684 23,780 20,435 19,192' 18,375' 16,512' 18,805 5 Deposits 15,081 13,058 18,496 15,626 14,559' 14,368' 12,657' 15,074 6 Payable in dollars 14,456 12,628 17,993 15,187 14,140' 13,871' 12,101' 14,370 7 Payable in foreign currencies 625 430 503 439 420 497 556 704 8 Other financial claims 6,061 4,626 5,284 4,808 4,633 4,007' 3,856' 3,731 9 Payable in dollars 3,599 2,979 3,328 3,116 3,190 2,442' 2,375' 2,194 10 Payable in foreign currencies 2,462 1,647 1,956 1,693 1,442 1,565 1,480 1,538 11 Commercial claims 15,043 11,041 11,131 10,505 10,646 10,297 10,456 9,943 12 Trade receivables 14,007 9,994 9,721 9,012 9,177 8,784 9,089 8,406 13 Advance payments and other claims 1,036 1,047 1,410 1,493 1,470 1,513 1,367 1,537 14 Payable in dollars 14,527 10,478 10,494 9,845 9,912 9,787 9,863 9,319 15 Payable in foreign currencies 516 563 637 659 735 510 592 624 By area or country Financial claims 16 Europe 4,596 4,873 6,488 5,783 5,754' 5,774' 5,445' 6,350 17 Belgium-Luxembourg 43 15 37 15 15 29 15 12 18 France 285 134 150 151 126 92 51' 130 19 Germany 224 178 163 192 224 196 175' 156 20 Netherlands 50 97 71 62 66 81' 46' 118 21 Switzerland 117 107 38 64 66 46 16 32 22 United Kingdom 3,546 4,064 5,817 5,068 4,856' 5,042' 4,867' 5,657 23 Canada 6,755 4,377 5,989 4,492 3,979' 3,934' 3,747 3,979 24 Latin America and Caribbean 8,812 7,546 10,234 8,987 8,170' 7,612' 6,475' 7,382 25 Bahamas 3,650 3,279 4,771 3,435 3,282 3,018' 2,153 2,241 26 Bermuda 18 32 102 5 6 4 6' 4 27 Brazil 30 62 53 84 100 98 96 92 28 British West Indies 3,971 3,255 4,206 4,580 4,021' 3,924' 3,657' 4,487 29 Mexico 313 274 293 232 215 201 206 201 30 Venezuela 148 139 134 128 125 101 100 72 31 Asia 758 698 764 900 961 856 639 965 32 Japan 366 153 297 371 353 509 281 725 33 Middle East oil-exporting countries2 37 15 4 7 13 6 6 5 34 Africa 173 158 147 160 210 101 111 103 35 Oil-exporting countries3 46 48 55 37 85 32 25 31 36 All other4 48 31 159 113 117' 97 95 26 Commercial claims 37 Europe 5,405 3,826 3.670 3,618 3,801 3,360 3,689 3,294 38 Belgium-Luxembourg 234 151 135 128 165 149 212 158 39 France 776 474 459 411 440 375 408 385 40 Germany 561 357 349 368 374 358 375 340 41 Netherlands 299 350 334 298 335 340 301 286 42 Switzerland 431 360 317 289 271 253 376 208 43 United Kingdom 985 811 809 949 1,063 885 950 785 44 Canada 967 633 829 1,026 1,021 1,248 1,065 1,101 45 Latin America and Caribbean 3,479 2,526 2,695 2,027 2,052 1,973 2,124 2,063 46 Bahamas 12 21 8 14 8 9 11 18 47 Bermuda 223 261 190 88 115 164 65 63 48 Brazil 668 258 493 219 214 210 193 212 49 British West Indies 12 12 7 10 7 6 29 7 50 Mexico 1,022 775 884 595 583 493 616 566 51 Venezuela 424 351 272 245 206 192 224 246 52 3,959 3,050 3,063 2,901 3,073 2,985 2,721 22,,772266 53 Japan 1,245 1,047 1,114 1,089 1,191 1,154 968 888844 54 Middle East oil-exporting countries2 905 751 737 703 668 666 593 544 55 Africa 772 588 588 595 470 510 522 494 56 Oil-exporting countries3 152 140 139 135 134 141 139 131 57 All other4 461 417 286 338 229 221 336 265 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 1986 1985 1986 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998844'' 11998855 Jan. July' Aug. Sept. Oct. Nov. Dec. Jan.P U.S. corporate securities STOCKS 1 59,834 81,538 8,713 7,207 6,371' 4,802 7,232 8,409 10,914 8,713 2 Foreign sales 62,814 76,617 6,990 6,559 5,721 4,690 6,560 7,137 8,776 6,990 3 Net purchases, or sales (-) -2,980 4,921 1,723 648 650' 112 673 1,273 2,137 1,723 4 Foreign countries -3,109 4,837 1,736 548 649' 163 644 1,362 1,972 1,736 S -3,077 2,068 1,172 327 369' 170 554 948 1,339 1,172 6 -405 -437 -63 2 -41 -120 -82 -85 -105 -63 7 -50 730 134 126 76 29 235 270 283 134 8 -357 -122 109 42 18 25 33 47 125 109 9 -1,542 -75 287 23 -23' -87 125 107 280 287 in United Kingdom -677 1,674 614 107 295 293 210 579 700 614 ii 1,691 355 115 67 68 34 -31 -70 93 115 i? Latin America and Caribbean 495 1,671 -76 115 109 -35 78 243 281 -76 13 Middle East1 -1,992 238 208 53 35 54 8 -174 227 208 14 -378 313 264 -23 58 -26 -16 384 -25 264 15 -22 24 25 25 9 0 -4 -1 12 25 16 Other countries 175 168 26 -16 1 -34 55 32 44 26 17 Nonmonetary international and regional organizations 129 84 -12 100 1 --5511 2288 --8899 116655 --1122 BONDS2 18 39,296 87,109 6,029 8,495 5,547 7,482 7,401 12,466' 9,688 6,029 19 Foreign sales 26,199 43,055 2,938 4,256 3,741 3,632 2,786 4,284 4,555 2,938 20 Net purchases, or sales (—) 13,096 44,054 3,090 4,239 1,806 3,850 4,614 8,182' 5,133 3,090 21 Foreign countries 12,799 44,149 3,193 3,588 2,118 4,176 4,768 7,824' 5,491 3,193 ? 7 7 3 11,6 2 9 0 7 7 40,0 2 0 1 2 0 2,80 2 4 7 3,2 - 0 2 9 1,8 1 3 6 4 9 3,94 4 9 2 3,662 8 6, - 8 1 3 5 5 ' 5,12 0 6 2,80 2 4 7 74 Germany 1,724 2,001 -2 177 103 159 308 897 408 -2 75 100 222 85 -2 25 -4 0 158 13 85 76 643 3,987 235 492 243 154 249 804 1,013 235 77 United Kingdom 8,429 32,717 2,435 2,395 1,368 3,519 3,036 4,903' 3,646 2,435 78 -62 189 2 -14 -24 -31 42 110 19 2 79 Latin America and Caribbean 376 484 18 42 -81 -64 81 124 55 18 3 30 1 O M t i h d e d r l e A E si a a s t1 -1 1 ,0 ,8 3 1 0 7 -2 6 , , 6 0 4 6 3 8 -1 5 7 4 4 1 -2 6 6 1 5 0 - 4 8 6 0 5 -1 5 8 0 7 8 96 1 6 1 -2 9 1 7 5 5 -4 7 3 0 5 3 -1 5 7 4 4 1 37 Africa 1 11 1 3 1 0 1 0 4 1 33 Other countries 0 38 2 2 3 1 6 -5 19 2 34 Nonmonetary international and regional organizations 297 -95 -103 651 -312 --332266 --115544 335588 --335588 --110033 Foreign securities 35 -1,101 -3,909 125 -548 -213 -221 -72 -309 -409 125 36 14,816 21,009 2,508 1,589 1,689 1,564 2,172 2,171 2,726 2,508 37 Foreign sales 15,917 24,919 2,383 2,138 1,902 1,785 2,244 2,480 3,135 2,383 38 Bonds, net purchases, or sales (-) -3,930 -4,127 -80 -567 305 -420 -689 162 -120 -80 39 56,017 81,048 9,790 7,203 6,959 6,840 8,538 8,902 8,355 9,790 40 Foreign sales 59,948 85,175 9,870 7,769 6,654 7,260 9,227 8,740 8,475 9,870 41 Net purchases, or sales (-), of stocks and bonds .... -5,031 -8,037 44 -1,115 92 -641 -761 -147 -529 44 42 Foreign countries -4,642 -9,100 -36 -1,344 302 -876 -748 -370 -864 -36 43 -8,655 -9,941 -379 -1,179 -258 -764 -577 -1,062 -410 -379 44 542 -1,784 -226 -765 36 2 -27 14 -394 -226 45 Latin America and Caribbean 2,460 1,858 220 152 178 191 48 32 92 220 46 1,356 650 396 416 387 -322 -193 812 -350 396 47 -108 75 7 18 9 -2 -5 37 42 7 48 Other countries -238 42 -55 13 -51 19 6 -204 156 -55 49 Nonmonetary international and regional organizations -389 1,063 80 229 -210 223355 --1133 222233 333355 8800 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, ties sold abroad by U.S. corporations organized to finance direct investments Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). abroad. 2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • May 1986 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1986 1985 1986 Country or area 11998844rr 11998855 Jan. July' Aug. Sept. Oct. Nov. Dec. Jan." Transactions, net purchases or sales (-) during period1 1 Estimated total2 21,501 29,767 4,803 -3,345 6,533 -653 2,510r 6,462 -1,345 2 Foreign countries2 16,496 29,284 5,412 1,027 3,988 -122 2,286' 3,068 881 3 Europe2 11,014 3,962 957 953 958 -701 -941 180 73 4 Belgium-Luxembourg 287 476 20 92 49 10 29 -44 33 5 Germany2 2,929 1,917 723 937 294 17 -101 302 132 6 Netherlands 449 269 148 386 127 -126 155 -82 26 7 Sweden 40 976 119 -89 -33 -41 -42 -41 -200 8 Switzerland2 656 760 -20 72 25 116 -151 -116 68 9 United Kingdom 5,188 -2,143 -777 -82 283 -735 -530 50 -84 10 Other Western Europe 1,466 1,706 744 -363 214 58 -301 111 100 11 Eastern Europe 0 0 0 0 0 0 0 0 0 12 Canada 1,586 -190 12 -144 106 138 -394 -71 -461 13 Latin America and Caribbean 1,418 4,312 215 524 562 125 735 90 122 14 Venezuela 14 238 4 33 2 91 72 -41 -53 15 Other Latin America and Caribbean 536 2,343 46 95 556 110 367 265 101 16 Netherlands Antilles 869 1,731 165 397 4 -76 296 -133 74 17 Asia 2,431 20,776 4,309 -416 2,225 244 2,935 2,835 -580 18 Japan 6,289 18,859 3,752 875 1,884 1,630 3,039 902 -861 19 Africa -67 112 10 -1 0 9 1 9 -8 20 All other 114 311 -91 111 137 63 -51 25 -27 21 Nonmonetary international and regional organizations 5,009 482 -610 -4,372 2,545 -530 223 3,393 -464 22 International 4,612 -394 -229 -4,400 1,883 -430 -15 3,001 -184 23 Latin American regional 0 18 0 0 -1 0 8 7 14 MEMO 24 Foreign countries2 16,496 29,284 -881 5,412 1,027 3,988 -122 2,286' 3,068 -881 25 Official institutions 505 8,389 345 1,797 104 1,064 -1,209 -276' 2,714 345 26 Other foreign2 15,992 20,896 -1,226 3,616 923 2,924 1,087 2,562 355 -1,226 Oil-exporting countries 27 Middle East3 -6,270 -1,640 226 1 -1,132 -838 -818 -457' 740 226 28 Africa4 -101 7 1 0 0 0 4 0 2 1 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 Feb. 28, 1986 Rate on Feb. 28, 1986 Rate on Feb. 28, 1986 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.0 Aug. 1985 France1 8.50 Feb. 1986 Norway 8.0 June 1983 Belgium . 9.75 Dec. 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.. 11.80 Feb. 1986 Japan 4.5 Jan. 1986 Venezuela 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 tnan 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 1986 CCoouunnttrryy,, oorr ttyyppee 11998833 11998844 11998855 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Eurodollars 9.57 10.75 8.27 8.02 8.14 8.08 8.02 7.99 8.02 7.89 2 United Kingdom 10.06 9.91 12.16 11.42 11.49 11.49 11.50 11.66 12.78 12.60 3 Canada 9.48 11.29 9.64 9.16 9.10 8.73 8.85 9.25 10.23 11.81 4 Germany 5.73 5.96 5.40 4.75 4.64 4.77 4.82 4.80 4.65 4.47 5 Switzerland 4.11 4.35 4.92 4.64 4.59 4.53 4.07 4.13 4.08 3.85 6 Netherlands 5.58 6.08 6.29 5.80 5.72 5.89 5.90 5.79 5.71 5.74 7 France 12.44 11.66 9.91 9.79 9.57 9.29 8.95 8.92 8.95 8.81 8 Italy 18.95 17.08 14.86 14.36 13.95 14.16 14.29 14.71 14.88 15.91 9 Belgium 10.51 11.41 9.60 9.50 9.33 8.97 8.66 9.14 9.75 9.75 10 Japan 6.49 6.32 6.47 6.30 6.31 6.47 7.29 7.36 6.54 6.04 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • May 1986 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1985 1986 Country/currency 11998833 11998844 11998855 Sept. Oct. Nov. Dec. Jan. Feb. 1 Australia/dollar1 90.14 87.937 70.026 68.96 70.25 67.74 68.11 70.00 69.93 2 Austria/schilling 17.968 20.005 20.676 19.949 18.569 18.236 17.658 17.151 16.389 3 Belgium/franc 51.121 57.749 59.336 57.395 53.618 52.474 51.251 49.843 47.748 4 Brazil/cruzeiro 573.27 1841.50 6205.10 7453.33 8203.57 8913.95 9915.71 11345.26 13020.00 5 Canada/dollar 1.2325 1.2953 1.3658 1.3703 1.3667 1.3765 1.3954 1.4070 1.4043 6 China, P.R./yuan 1.9809 2.3308 2.9434 2.9722 3.0782 3.2086 3.2095 3.2095 3.2152 7 Denmark/krone 9.1483 10.354 10.598 10.2906 9.5880 9.3918 9.1221 8.9468 8.6048 8 Finland/markka 5.5636 6.0007 6.1971 6.0140 5.6836 5.5709 5.4824 5.4131 5.2465 9 France/franc 7.6203 8.7355 8.9799 8.6599 8.0641 7.9095 7.6849 7.4821 7.1575 10 Germany/deutsche mark 2.5539 2.8454 2.9419 2.8381 2.6446 2.5954 2.5122 2.4384 2.3317 11 Greece/drachma 87.895 112.73 138.40 136.74 145.74 153.037 150.186 148.69 143.48 12 Hong Kong/dollar 7.2569 7.8188 7.7911 7.8043 7.7908 7.8042 7.8064 7.8081 7.8042 13 India/rupee 10.1040 11.348 12.332 12.126 12.033 12.1010 12.1524 12.243 12.370 14 Ireland/pound1 124.81 108.64 106.62 109.55 117.00 119.19 122.48 124.75 129.79 15 Italy/lira 1519.30 1756.10 1908.90 1903.42 1785.43 1753.72 1713.50 1663.14 1588.21 16 Japan/yen 237.55 237.45 238.47 236.53 214.68 204.07 202.79 199.89 184.85 17 Malay sia/ringgit 2.3204 2.3448 2.4806 2.4841 2.4529 2.4341 2.4291 2.4489 2.4704 18 Netherlands/guilder 2.8543 3.2083 3.3184 3.1921 2.9819 2.9230 2.8293 2.7489 2.6343 19 New Zealand/dollar1 — 66.790 57.837 49.752 53.285 56.931 57.230 52.633 51.657 53.177 20 Norway/krone 7.3012 8.1596 8.5933 8.3337 7.9099 7.8076 7.6524 7.5541 7.2789 21 Portugal/escudo 111.610 147.70 172.07 172.5 164.59 162.963 160.798 157.99 152.63 22 Singapore/dollar 2.1136 2.1325 2.2008 2.2268 2.1387 2.1084 2.1213 2.1289 2.1401 23 South Africa/rand1 89.85 69.534 45.57 39.49 38.38 37.57 37.05 42.40 47.94 24 South Korea/won 776.04 807.91 861.89 847.46 894.49 893.35 893.13 892.75 888.57 25 Spain/peseta 143.500 160.78 169.98 168.91 161.712 159.658 156.052 152.91 147 26 Sri Lanka/rupee 23.510 25.428 27.187 27.430 27.421 27.449 27.420 26.3 27 Sweden/krona 7.6717 8.2706 8.6031 8.3907 7.9557 7.8127 7.6817 7.5 28 Switzerland/franc 2.1006 2.3500 2.4551 2.3749 2.1692 2.1306 2.1042 2.0 29 Taiwan/dollar n.a. 39.633 39.889 40.465 40.195 39.981 39.906 39.4 30 Thailand/baht 22.991 23.582 27.193 27.050 26.569 26.315 26.715 26.676 26.492 31 United Kingdom/pound1 151.59 133.66 129.74 136.42 142.15 143.% 144.47 142.44 142.97 MEMO 32 United States/dollar2... 125.34 138.19 143.01 139.14 130.71 128.08 125.80 123.65 118.77 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, 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 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1985 May 1986 A74 Terms of lending at commercial banks, May 1985 August 1985 A70 Terms of lending at commercial banks, August 1985 November 1985 A70 Terms of lending at commercial banks, November 1985 March 1986 A70 Terms of lending at commercial banks, February 1986 May 1986 A70 Special tables begin on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • May 1986 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 3-7, 19861 A. Commercial and Industrial Loans Weighted Loan rate (percent) Amount Average average Loans Particiof loans size mmaattuurriittyy22 made under pation Characteristics ( o t f h o d u o s l a la n r d s s ) ( o t f h o d u o s l a la n r d s s ) W av e e ig ra h g te e d SSttaannddaarrdd q I u n a t r e t r i - le co ( m pe m rc it e m nt e ) n t (p l e o r a c n e s n t) Days effective3 range5 ALL BANKS 1 Overnight6 12,626,703 5,498 * 8.69 .12 8.38-8.87 82.8 4.0 2 One month and under 9,375,718 745 17 9.11 .22 8.62-9.32 75.0 13.3 3 Fixed rate 6,526,166 785 19 9.07 .25 8.72-9.20 70.8 12.5 4 Floating rate 2,849,552 668 13 9.21 .25 8.52-9.75 84.6 15.1 5 Over one month and under a year 8,026,569 94 146 10.05 .25 8.91-10.92 68.1 6.5 6 Fixed rate 3,197,257 66 108 9.97 .47 8.88-10.18 57.7 4.6 7 Floating rate 4,829,311 133 171 10.11 .27 8.97-11.02 75.0 7.8 8 Demand7 5,019,661 159 * 9.93 .21 8.70-11.02 79.6 3.1 9 Fixed rate 1,016,089 218 * 8.87 .18 8.35-8.91 80.2 1.6 10 Floating rate 4,003,572 149 * 10.20 .21 9.11-11.02 79.5 3.5 11 Total short term 35,048,651 266 45 9.29 .16 8.49-9.84 76.9 6.9 12 Fixed rate (thousands of dollars) . 22,954,515 359 22 8.98 .24 8.45-9.12 75.5 5.9 13 1-24 357,648 7 107 13.12 .30 12.03-14.11 27.7 .1 14 25-49 117,342 31 113 12.49 .50 11.22-13.38 33.2 .2 15 50-99 197,284 70 102 11.94 .39 10.38-14.75 42.2 1.2 16 100-499 394,462 209 63 10.93 .37 9.89-12.01 47.5 3.0 17 500-999 270,252 658 51 9.75 .20 8.87-10.20 71.1 8.2 18 1000 and over 21,617,527 7,438 19 8.82 .09 8.44-9.05 77.4 6.1 19 Floating rate (thousands of dollars). 12,094,136 179 107 9.87 .13 8.73-10.92 79.4 8.9 20 1-24 364,180 10 155 11.73 .16 11.02-12.19 57.8 4.2 21 25-49 : 313,369 33 152 11.42 .12 10.76-12.13 66.2 1.8 22 50-99 539,753 65 158 11.24 .14 10.47-12.01 68.0 6.8 23 100-499 1,765,209 192 151 10.82 .06 9.93-11.46 72.6 4.8 24 500-999 1,039,135 656 147 10.58 .09 9.92-11.02 61.6 5.9 25 1000 and over 8,072,490 4,381 90 9.34 .15 8.54-9.92 85.4 10.8 Months 26 Total long term 4,016,401 177 54 10.26 .18 8.98-11.19 79.3 11.2 27 Fixed rate (thousands of dollars) 997,402 84 59 10.44 .56 8.94-11.63 65.1 7.0 28 1-99 131,611 12 62 13.02 .68 11.86-13.80 11.9 .6 29 100-499 135,189 150 87 12.13 .36 11.46-13.31 20.9 3.5 30 500-999 61,789 738 95 10.07 .58 9.00-10.93 92.3 6.6 31 1000 and over 668,813 4,485 49 9.62 .78 8.77-10.50 82.0 9.0 32 Floating rate (thousands of dollars) 3,018,999 277 53 10.21 .26 9.09-11.07 84.0 12.6 33 1-99 225,757 27 46 11.77 .14 11.02-12.19 32.5 1.3 34 100-499 341,380 206 49 10.85 .10 9.92-11.57 63.1 8.4 35 500-999 197,719 639 45 10.55 .32 9.84-11.07 80.9 13.5 36 1000 and over 2,254,143 4,594 55 9.92 .32 8.96-10.88 92.6 14.3 Loan rate (percent) DDaayyss PPrriimmee rraattee99 Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 12,100,076 9,648 8.61 8.26 9.50 83.5 4.2 38 One month and under 8,193,292 4,691 17 8.86 8.50 9.50 78.9 14.0 39 Over one month and under a year 3,945,355 854 135 8.93 8.62 9.58 77.7 5.7 40 Demand7 2,039,851 1,293 * 8.65 8.34 9.51 83.4 1.0 41 Total short term 26,278,574 2,857 28 8.74 8.40 9.51 81.2 7.2 42 Fixed rate 20,776,339 3,333 18 8.74 8.39 9.51 78.0 6.3 43 Floating rate 5,502,235 1,856 78 8.75 8.42 9.53 93.0 10.6 Months 44 Total long term 1,618,867 643 51 9.01 8.72 9.61 94.1 12.0 45 Fixed rate 468,730 264 39 9.00 8.84 9.65 86.9 2.9 46 Floating rate .. 1,150,136 1,556 56 9.02 8.67 9.59 97.1 15.7 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A71 4.23 Continued A. Continued Weighted Loan rate (percent) Average Loans PPaarrttiiccii-of loans size mmaattuurriittyy22 made under pation CChhaarraacctteerriissttiiccss ( o t f h o d u o s l a la n r d s s ) ( o t f h o d u o s l a la n r d s s ) W av e e ig ra h g te e d SSttaannddaarrdd quartile co ( m pe m rc it e m nt e ) n t (p l e o r a c n e s n t) Days effective3 range5 48 LARGE BANKS 1 Overnight6 11,145,149 10,276 * 8.66 .01 8.37-8.87 83.7 4.2 ?. One month and under 7,783,357 3,261 17 8.98 .03 8.60-9.20 79.2 13.9 Fixed rate 5,470,115 4,320 19 8.98 .04 8.72-9.19 75.3 13.0 4 Floating rate 2,313,242 2,064 12 8.99 .02 8.44-9.20 88.4 16.1 5 Over one month and under a year ... 3,958,608 427 135 9.57 .09 8.85-10.00 79.2 3.6 6 Fixed rate 1,884,140 1,217 103 9.41 .08 8.88-9.38 71.6 5.0 7 Floating rate 2,074,468 269 165 9.71 .13 8.62-10.52 86.0 2.4 8 Demand7 2,345,063 294 * 9.82 .18 8.73-10.65 81.4 2.2 9 Fixed rate 540,310 616 * 9.02 .16 8.37-9.11 81.4 .4 10 Floating rate 1,804,753 254 * 10.06 .17 9.03-11.02 81.4 2.8 11 Total short term 25,232,177 1,218 30 9.01 .00 8.45-9.21 81.4 6.9 17 Fixed rate (thousands of dollars) .... 18,690,194 3,960 17 8.84 .00 8.44-9.05 79.7 6.1 N 1-24 12,219 10 84 12.07 .05 10.75-13.24 51.6 .3 14 25-49 11,688 34 108 11.30 .26 10.47-12.23 64.1 .5 15 50-99 20,666 64 81 11.32 .11 10.47-12.13 57.6 1.5 16 100-499 104,020 219 61 10.52 .06 9.72-11.34 84.2 6.1 17 500-999 138,398 648 56 9.57 .05 8.87-10.00 71.7 4.4 18 1000 and over 18,403,203 8,669 17 8.82 .00 8.44-9.05 79.8 6.2 19 Floating rate (thousands of dollars).... 6,541,983 409 78 9.49 .00 8.54-10.08 86.2 9.2 70 1 24 65,958 11 183 11.55 .02 10.92-12.13 79.3 2.0 71 25-49 84,961 34 192 11.22 .01 10.75-11.85 79.3 3.3 77 50-99 166,957 66 198 11.05 .04 10.47-11.57 79.1 2.9 73 100-499 639,764 198 163 10.71 .02 9.92-11.07 77.1 3.7 74 500-999 435,572 665 105 10.49 .02 9.92-11.02 76.8 3.1 25 1000 and over 5,148,771 5,242 65 9.14 .02 8.43-9.81 88.6 10.7 Months 26 Total long term 2,698,815 954 54 9.82 .01 8.88-10.61 91.4 12.2 77 Fixed rate (thousands of dollars) 663,795 848 52 9.59 .33 8.77-10.39 85.0 10.0 78 1-99 11,733 25 65 11.85 .47 10.38-13.24 50.5 7.2 79 100-499 23,103 205 56 10.91 .10 10.18-11.46 70.9 11.7 30 500-999 49,572 754 106 9.90 .50 9.00-10.47 95.0 6.3 31 1000 and over 579,387 4,521 47 9.47 .34 8.77-10.37 85.5 10.4 32 Floating rate (thousands of dollars).... 2,035,020 994 54 9.89 .10 8.96-10.65 93.5 13.0 33 1-99 29,129 32 39 11.41 .04 10.92-12.10 66.8 4.2 34 100-499 134,782 221 44 10.79 .00 10.06-11.46 80.8 10.9 35 500-999 117,470 626 44 10.41 .23 9.84-11.02 84.2 16.5 36 1000 and over 1,753,639 5,245 56 9.76 .11 8.86-10.52 95.5 13.0 Loan rate (percent) DDaayyss PPrriimmee rraattee99 Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 10,863,606 10,774 * 8.62 8.27 9.50 84.7 4.3 38 One month and under 7,159,416 6,406 16 8.86 8.51 9.50 81.6 14.5 39 Over one month and under a year ... 2,607,293 4,137 125 8.93 8.62 9.50 82.2 4.1 40 Demand7 1,019,067 3,639 8.67 8.35 9.50 84.4 .3 41 Total short term 21,649,382 7,130 22 8.74 8.39 9.50 83.4 7.5 47 Fixed rate 17,735,312 7,741 15 8.74 8.39 9.50 80.7 6.3 43 Floating rate 3,914,071 5,252 59 8.72 8.38 9.50 95.4 12.6 Months 44 Total long term 1,397,333 5,507 52 8.93 8.64 9.50 98.8 8.9 45 Fixed rate 402,823 3,417 39 8.85 8.71 9.50 96.7 3.3 46 Floating rate 994,510 7,321 57 8.97 8.62 9.50 99.6 11.2 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • May 1986 4.23 TERMS OF LENDING AT COMMERCIAL BANKS SURVEY of Loans Made, February 3-7, 19861—Continued A. Commercial and Industrial Loans—Continued Weighted Loan rate (percent) Amount Average average Loans Particiof loans size mmaattuurriittyy22 made under pation Characteristics ( o t f h o d u o s l a la n r d s s ) ( o t f h o d u o s l a la n r d s s ) W av e e ig ra h g te e d SSttaannddaarrdd q I u n a t r e t r i - le co ( m pe m rc it e m nt e ) n t (p l e o r a c n e s n t) Days effective3 range5 „ OTHER BANKS 1 Overnight6 1,481,554 1,222 8.86 .12 8.39-8.87 75.5 2.6 2 One month and under 1,592,361 156 20 9.75 .22 8.65-10.52 54.4 10.1 3 Fixed rate 1,056,051 150 21 9.53 .25 8.60-9.51 47.4 9.6 4 Floating rate 536,310 171 18 10.17 .25 8.67-11.06 68.2 10.9 5 Over one month and under a year 4,067,961 54 157 10.52 .24 9.31-11.07 57.3 9.3 6 Fixed rate 1,313,117 28 116 10.77 .47 8.87-12.28 37.7 4.1 7 Floating rate 2,754,844 % 176 10.41 .24 9.57-11.02 66.6 11.8 8 Demand7 2,674,599 114 * 10.02 ,10 8.70-11.02 78.0 3.9 9 Fixed rate 475,779 126 * 8.69 .08 8.33-8.62 78.9 2.9 10 Floating rate 2,198,820 111 * 10.31 .11 9.32-11.02 77.8 4.1 11 Total short term 9,816,474 89 94 10.01 .16 8.68-10.98 65.2 7.0 12 Fixed rate (thousands of dollars) . 4,264,321 72 46 9.59 .24 8.52-9.96 57.2 4.8 13 1-24 345,429 7 108 13.16 .30 12.07-14.20 26.8 .1 14 25-49 105,654 31 113 12.62 .43 11.38-13.38 29.8 .2 15 50-99 176,618 71 104 12.01 .37 10.38-14.75 40.4 1.1 16 100-499 290,442 206 63 11.08 .37 9.92-12.73 34.3 1.9 17 500-999 131,854 669 47 9.94 .20 8.93-10.52 70.6 12.1 18 1000 and over 3,214,325 4,102 32 8.83 .09 8.41-9.01 63.8 5.6 19 Floating rate (thousands of dollars). 5.552,153 108 148 10.33 .13 9.38-11.02 71.4 8.6 20 1-24 298,222 10 149 11.77 .16 11.02-12.19 53.1 4.7 21 25-49 228,409 33 138 11.49 .12 10.92-12.13 61.3 1.3 22 50-99 372,796 64 141 11.33 .14 10.47-12.13 63.0 8.5 23 100-499 1,125,445 189 144 10.89 .06 9.94-11.57 70.1 5.5 24 500-999 603,563 650 168 10.64 .09 9.96-10.92 50.6 8.0 25 1000 and over 2,923,719 3,399 145 9.69 .15 8.68-10.52 79.8 10.9 Months 26 Total long term 1,317,586 66 55 11.18 .18 9.92-12.19 54.5 9.0 27 Fixed rate (thousands of dollars) 333,607 30 72 12.12 .45 11.57-13.31 25.4 .9 28 1-99 119,878 12 62 13.14 .50 11.86-13.88 8.1 .0 29 100-499 112,086 142 93 12.38 .35 12.52-13.31 10.6 1.8 30 500-999 12,216 680 48 10.77 .29 9.84-11.46 81.4 7.7 31 1000 and over 89,427 4,267 62 10.62 .70 9.12-11.63 59.6 .0 32 Floating rate (thousands of dollars) 983,979 111 50 10.86 .23 9.92-11.57 64.4 11.8 33 1-99 196,629 26 47 11.83 .14 11.02-12.19 27.4 .9 34 100-499 206,598 198 52 10.90 .10 9.92-11.57 51.7 6.8 35 500-999 80,249 659 47 10.74 .22 9.92-11.19 76.2 9.0 36 1000 and over 500,503 3,202 50 10.49 .30 9.84-11.19 82.2 18.6 Loan rate (percent) DDaayyss PPrriimmee rraattee99 Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 1,236,469 5,029 8.59 8.24 9.50 72.2 3.1 38 One month and under 1,033,876 1,644 19 8.84 8.49 9.52 59.8 10.7 39 Over one month and under a year 1,338,062 335 156 8.93 8.64 9.73 68.9 8.6 40 Demand7 1,020,784 787 * 8.63 8.33 9.53 82.3 1.7 41 Total short term 4,629,191 751 64 8.75 8.43 9.58 70.7 6.1 42 Fixed rate 3,041,027 771 34 8.71 8.39 9.56 62.3 6.3 43 Floating rate 1,588,164 716 142 8.83 8.51 9.60 87.0 5.7 Months 44 Total long term 221,534 98 47 9.52 9.20 10.28 64.8 31.5 45 Fixed rate .... 65,907 40 43 9.90 9.67 10.54 27.1 .3 46 Floating rate .. 155,627 258 48 9.36 9.01 10.17 80.7 44.7 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A73 4.23 Continued B. Construction and Land Development Loans Loan rate (percent) Amount Average Weighted LLooaannss PPaarrttiiccii-- Characteristics of loans size average mmaaddee uunnddeerr ppaattiioonn ( o t f h o d u o s l a la n r d s s ) ( o t f h o d u o s l a la n r d s s ) ( m m a o t n u t r h it s y )2 W e a f v f e e e i c g r t a h i g t v e e e d 3 St e a r n ro da r4 r d q r I u a n a n t r g e t r e i - l 5 e ccoo (( mm ppee mm rrcc iitt ee mm nntt ee )) nn tt ((pp ll ee oo rr aa cc nn ee ss nn tt)) Total 1 Total 1,614,380 11.31 .32 9.99-12.10 63.7 9.4 2 Fixed rate (thousands of dollars) .. 742,776 128 11.85 .56 10.47-12.68 47.1 11.3 6 4 5 3 7 5 2 5 1 1 0 5 0 0 - 0 2 - - 0 4 9 4 - a 9 9 4 n 9 d 9 over 3 3 4 0 5 3 1 5 1 1 1 2 , , , , , 3 9 6 3 4 7 8 4 0 7 5 1 3 6 0 4,6 1 5 3 6 6 4 7 5 3 0 1 1 1 1 1 2 4 3 3 0 . . . . . 6 9 2 1 4 0 7 8 1 8 1 . . . . . 5 2 4 4 3 2 4 6 9 9 1 1 1 1 9 2 2 2 2 . . . . . 9 0 4 1 6 2 0 0 0 8 - - - - - 1 1 1 2 1 0 2 4 1 3 . . . . . 5 6 2 6 8 4 8 0 6 0 4 2 9 2 2 5 9 1 6 . . . . . 0 9 0 6 6 25. . . . . 1 0 2 2 0 8 Floating rate (thousands of dollars) 871,604 147 10.85 .13 9.92-11.57 77.8 7.7 9 1-24 24,210 9 11.60 .11 11.02-12.13 84.8 2.3 10 25-49 50,270 36 11.40 .13 11.30-11.48 91.4 1.6 11 50-99 48,451 69 11.21 .26 10.47-11.63 68.2 2.8 12 100-499 170,428 175 11.47 .18 11.02-12.19 80.7 7.1 13 500 and over 578,245 2,343 10.56 .24 9.92-11.35 76.2 9.1 By type of construction 14 Single family 441,728 65 12.58 1.02 11.57-12.68 42.3 1.1 15 Multifamily 110,201 60 11.89 .32 11.07-12.13 76.9 1.6 16 Nonresidential ,062,450 335 10.72 .17 9.92-11.46 71.2 13.6 Total 1 Total 655,314 904 10.30 .01 9.92-10.54 94.5 14.7 2 Fixed rate (thousands of dollars) .. 269,875 1,840 10.16 .08 9.92-10.54 95.3 25.7 4 5 6 3 7 2 5 5 1 1 0 5 0 0 -2 0 - - 0 9 4 4 - a 9 9 4 n 9 d 9 over 265,9 8 1 5 6 1 * * • 8,01 1 8 * * * 0 1 1 2 0 . . 2 1 7 4 * * * . . 2 0 3 8 * * * 1 9 2 . . 9 1 2 3 - - 1 1 0 2 . . 5 1 4 3 * * * 8 9 5 5 . . 9 7 * * * 25. . 9 0 * * * 8 Floating rate (thousands of dollars) 385,441 667 10.40 .02 9.92-11.02 93.9 6.9 9 1-24 1,683 13 11.40 .22 11.02-11.58 95.9 6.2 10 25-49 2,227 37 11.40 .14 11.02-11.63 85.5 .0 11 50-99 4,914 69 11.37 .12 10.92-11.63 93.4 6.7 12 100-499 50,110 241 11.21 .15 11.02-11.57 91.2 7.9 13 500 and over 326,508 2,960 10.25 .08 9.92-10.75 94.4 6.9 By type of construction 14 Single family 49,554 164 11.38 .08 11.02-11.57 84.1 2.4 15 Multifamily 10,339 137 11.12 .08 11.02-11.30 99.5 9.4 16 Nonresidential 595,422 1,720 10.20 .01 9.92-10.54 95.3 15.8 Total 1 Total 959,066 87 12.00 .36 11.07-12.19 42.6 5.7 2 Fixed rate (thousands of dollars) .. 472,903 83 12.82 .65 12.00-13.24 19.7 3.0 4 5 6 3 7 2 5 5 1 1 5 0 0 0 -2 0 - - 0 4 9 4 - a 9 9 4 n 9 d 9 over 29 4 5 1 9 0 5 1 , , , , 7 7 0 6 6 8 0 1 4 5 7 9 * 1 6 3 6 3 7 5 0 * 1 1 1 1 4 2 3 3 . . . . 6 9 1 2 1 9 7 8 * 1 . . . . 5 4 2 5 3 2 4 0 * 1 1 1 1 2 2 2 2 . . . . 0 4 1 6 0 0 0 8 - - - - 1 1 2 1 2 4 1 3 . . . . 6 2 6 8 8 0 6 0 * 2 4 2 8 6 2 1 . . . . 4 1 3 6 * . . . . 0 0 0 2 * 8 Floating rate (thousands of dollars) 486,163 91 11.21 .15 10.92-11.57 65.0 8.3 9 1-24 22,527 9 11.61 .10 11.02-12.13 84.0 2.0 10 25-49 48,043 36 11.40 .13 11.30-11.46 91.6 1.6 11 50-99 43,538 69 11.19 .29 10.47-11.63 65.3 2.4 12 100-499 120,318 157 11.58 .19 11.07-12.19 76.4 6.8 13 500 and over 251,737 1,844 10.97 .31 10.52-11.57 52.7 11.9 By type of construction 14 Single family 392,174 61 12.73 1.09 11.67-12.68 37.0 1.0 15 Multifamily 99,862 57 11.97 .36 11.07-12.17 74.5 .8 16 Nonresidential 467,029 166 11.40 .20 11.02-12.00 40.5 10.8 For notes see end of table. "Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • May 1986 4.23 TERMS OF LENDING AT COMMERCIAL BANKS SURVEY of Loans Made, February 3-7, 1986Continued C. Loans to Farmers" Size class of loans (thousands) Characteristics All sizes $1-9 $10-24 $25-49 $50-99 $100-249 an $ d 2 5 o 0 v er ALL BANKS 1 Amount of loans (thousands of dollars). 967,037 113,641 110,274 119,374 97,320 188,313 338,116 2 Number of loans 45,504 31,030 7,568 3,584 1,566 1,274 481 3 Weighted average maturity (months)2 .. 8.9 7.5 7.6 12.6 18.0 11.1 4.6 4 Weighted average interest rate (percent)3. 12.03 12.94 12.80 12.62 12.68 11.96 11.11 5 Standard error4 .58 .19 .15 .15 .41 .32 .86 6 Interquartile range5 11.30-13.19 12.00-13.53 12.05-13.54 12.00-13.22 11.86-13.50 11.81-12.00 9.34-13.19 By purpose of loan Feeder livestock 11.93 12.97 12.58 12.05 11.96 12.08 11.50 Other livestock 12.64 12.86 12.93 11.65 * 11.98 * Other current operating expenses. 11.84 12.93 12.77 12.70 13.21 12.00 9.19 Farm machinery and equipment.. 12.66 12.86 12.81 12.71 * * * Other 11.89 13.12 13.08 12.70 12.02 11.85 * Percentage of amount of loans 12 With floating rates 42.3 25.7 37.3 48.7 55.6 54.2 36.7 13 Made under commitment 39.1 21.2 25.7 35.5 35.4 28.8 57.5 By purpose of loan 14 Feeder livestock 16.3 12.4 14.3 9.2 24.3 11.4 21.1 15 Other livestock 14.7 9.4 8.8 2.5 * 3.7 * 16 Other current operating expenses. 46.0 62.5 59.4 45.6 54.5 52.4 30.3 17 Farm machinery and equipment.. 5.2 6.9 2.5 29.5 * * * 18 O~ th' er 17.8 8.9 14.9 13.1 11.1 32.5 I LARGE BANKS11 1 Amount of loans (thousands of dollars). 298,347 6,209 11,491 11,490 19,006 41,959 208,191 2 Number of loans 3,448 1,646 743 340 288 283 148 3 Weighted average maturity (months)2 .. 3.6 6.8 6.7 8.1 4.8 3.9 3.0 4 Weighted average interest rate (percent)3. 10.30 11.64 11.55 11.30 11.26 10.98 9.92 5 Standard error4 .56 .07 .08 .12 .09 .11 .61 6 Interquartile range5 9.34-11.46 11.00-12.13 10.92-12.12 10.47-12.01 10.52-11.86 10.20-11.73 8.73-11.02 By purpose of loan Feeder livestock 10.84 11.56 11.17 10.95 10.99 11.30 10.69 Other livestock 11.40 11.66 11.47 11.50 * * * Other current operating expenses. 9.69 11.65 11.64 11.34 11.30 10.76 9.09 Farm machinery and equipment.. 11.94 11.77 * * * * * Other 10.28 11.64 11.65 11.47 11.46 10.98 Percentage of amount of loans 12 With floating rates 57.3 81.0 88.0 81.1 93.2 91.3 43.4 13 Made under commitment 82.2 82.2 77.0 80.8 85.1 86.3 81.4 By purpose of loan Feeder livestock 25.1 16.8 18.2 32.1 27.7 27.2 24.7 Other livestock 12.5 4.8 4.8 11.5 * # * Other current operating expenses. 46.7 58.2 60.6 31.1 35.2 48.2 47.1 Farm machinery and equipment.. 1.1 2.4 * * * * * Other 14.7 17.8 14.0 21.2 27.4 16.3 OTHER BANKS11 1 Amount of loans (thousands of dollars). 668,690 107,431 98,783 107,884 78,313 146,354 * 2 Number of loans 42,056 29,385 6,825 3,244 1,278 991 * 3 Weighted average maturity (months)2 .. 10.9 7.6 7.7 12.9 20.4 12.5 * 4 Weighted average interest rate (percent)3. 12.80 13.01 12.95 12.76 13.02 12.24 * 5 Standard error4 .13 .17 .12 .09 .40 .29 * 6 Interquartile range5 12.00-13.31 12.13-13.55 12.34-13.59 12.19-13.29 12.10-13.59 11.83-12.17 By purpose of loan Feeder livestock 12.91 13.08 12.80 12.61 12.24 * * Other livestock 13.08 12.89 13.02 * * # * Other current operating expenses. 12.83 13.00 12.90 12.80 13.49 * * Farm machinery and equipment.. 12.71 12.88 * 12.72 * * * Other 12.45 13.30 13.23 12.93 * * Percentage of amount of loans 12 With floating rates 35.6 22.5 31.4 45.2 46.4 43.6 13 Made under commitment 19.9 17.7 19.8 30.7 23.4 12.4 By purpose of loan Feeder livestock 12.3 12.1 13.8 6.8 23.4 * * Other livestock 15.7 9.6 9.3 * * * * Other current operating expenses. 45.8 62.7 59.3 47.2 59.2 * * Farm machinery and equipment.. 7.1 7.1 * 32.3 * * * Other 19.1 8.4 15.0 12.3 * For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A75 NOTES TO TABLE 4.23 1. The survey of terms of bank lending to business collects data on gross loan 4. The chances are about two out of three that the average rate shown would extensions made during the first full business week in the mid-month of each differ by less than this amount from the average rate that would be found by a quarter by a sample of 340 commercial banks of all sizes. The sample data are complete survey of lending at all banks. blown up to estimate the lending terms at all insured commercial banks during that 5. The interquartile range shows the interest rate range that encompasses the week. The estimated terms of bank lending are not intended for use in collecting middle 50 percent of the total dollar amount of loans made. the terms of loans extended over the entire quarter or residing in the portfolios of 6. Overnight loans are loans that mature on the following business day. those banks. Construction and land development loans include both unsecured 7. Demand loans have no stated date of maturity. loans and loans secured by real estate. Thus, some of the construction and land 8. The approximate annual interest rate on each loan—without regard to development loans would be reported on the statement of condition as real estate compounding—is calculated from survey data on the stated rate and other terms loans and the remainder as business loans. The survey of terms of bank lending to of the loan; then in computing the average of these approximate nominal rates, farmers covers about 250 banks selected to represent all sizes of banks. Mortgage each loan is weighted by its dollar amount. loans, purchased loans, foreign loans, and loans of less than $1,000 are excluded 9. The prime rate reported by each bank is weighted by the volume of loans from the survey. extended and then averaged. As of September 30, 1985, average domestic assets of 48 large banks were $15.0 10. This survey provides data on gross loan extensions made during one week billion and assets of the smallest of these banks were $2.9 billion. For all insured of each quarter. The proportion of these loan extensions that is made at rates banks total domestic assets averaged $156 million. below prime may vary substantially from the proportion of such loans outstanding 2. The weighted average maturity is calculated only for loans with a stated date in bank loan portfolios. of maturity (that is, loans payable on demand are excluded). In computing the 11. Among banks reporting loans to farmers, most "large banks" had over $500 average, each loan is weighted by its dollar amount. million in total assets, and most "other banks" had total assets below $500 3. The approximate compounded annual interest rate on each loan is calculated million. from survey data on the stated rate and other terms of the loan; then, in computing the average of these approximate effective rates, each loan is weighted by its dollar amount. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • May 1986 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19851 Millions of dollars All states2 New York Other states2 CCaallii-ffoorrnniiaa,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 branches Branches Agencies 1 Total assets5 297,691 238,653 59,039 213,327 5,390 48,176 15,426 6,274 9,099 2 Cash and due from depository institutions 69,675 63,320 6,355 58,895 111 6,292 3,477 332 567 3 Currency and coin (U.S. and foreign) 30 28 2 22 0 2 3 2 1 4 Balances with Federal Reserve Banks 1,431 1,387 43 1,269 18 23 65 42 14 5 Balances with other central banks 99 95 4 93 4 0 1 0 0 6 Demand balances with commercial banks in United States 1,651 1,498 153 1,413 33 95 45 18 47 7 All other balances with depository institutions in United States and with banks in foreign countries 66,129 59,981 6,148 55,783 55 6,169 3,352 269 501 8 Time and savings balances with commercial banks in United States 36,277 32,470 3,756 30,095 26 3,888 1,777 1% 245 9 Balances with other depository institutions in United States 100 53 47 53 1 2 0 0 43 10 Balances with banks in foreign countries 29,802 27,457 2,345 25,635 28 2,280 1,575 72 213 11 Foreign branches of U.S. banks 1,812 1,745 67 1,629 0 70 107 0 6 12 Other banks in foreign countries 27,990 25,713 2,278 24,005 28 2,210 1,468 72 207 13 Cash items in process of collection 335 330 5 314 1 4 11 3 3 14 Total securities, loans, and leasef inancingr eceivables .... 165,129 128,088 37,040 110,931 4,076 28,886 11,158 3,518 6,559 15 Total securities, book value 15,357 13,344 2,013 12,548 139 1,963 536 38 134 16 U.S. Treasury 4,298 4,207 91 3,914 64 65 242 14 0 17 Obligations of other U.S. government agencies and corporations 686 673 13 657 0 17 00 12 00 18 Obligations of states and political subdivisions in United States 71 62 10 49 0 0 11 1 9 19 Other bonds, notes, debentures, and corporate stock .. 10,302 8,402 1,900 7,928 75 1,880 282 11 125 20 Federal funds sold and securities purchased under agreements to resell 10,355 8,918 1,437 8,652 921 453 188 41 100 By holder 21 Commercial banks in United States 8,395 7,658 736 7,401 302 398 180 41 72 22 Others 1,961 1,259 701 1,251 619 54 8 0 28 By type 23 One-day maturity or continuing contract 9,963 8,527 1,436 8,264 921 451 186 41 100 24 Securities purchased under agreements to resell.... 426 419 7 412 7 0 0 7 0 25 Other 9,538 8,109 1,429 7,852 914 451 186 35 100 26 Other securities purchased under agreements to resell 392 390 2 388 0 2 2 0 0 27 Total loans, gross 149,920 114,855 35,065 98,483 3,940 26,962 10,627 3,482 6,426 28 LESS: Unearned income on loans 149 111 38 100 3 38 4 2 1 29 EQUALS: Loans, net 149,771 114,745 35,027 98,383 3,937 26,923 10,623 3,480 6,425 Total loans, gross, by category 30 Real estate loans 5,508 3,561 1,947 2,631 7 1,090 345 285 1,151 31 Loans to financial institutions 54,458 41,680 12,778 37,689 925 11,507 3,012 484 841 32 Commercial banks in United States 27,106 19,917 7,188 17,939 276 7,148 1,350 273 120 33 U.S. branches and agencies of other foreign banks .. 22,155 15,303 6,852 13,460 243 6,853 1,283 224 93 34 Other commercial banks 4,951 4,614 337 4,479 33 295 67 49 27 35 Banks in foreign countries 24,108 18,790 5,319 17,597 602 4,090 915 210 694 36 Foreign branches of U.S. banks 909 625 284 589 16 274 24 5 0 37 Other 23,199 18,164 5,035 17,008 586 3,816 891 205 694 38 Other financial institutions 3,244 2,973 271 2,153 47 269 747 1 27 39 Loans for purchasing or carrying securities 2,470 2,390 80 2,323 0 144 0 2 0 40 Commercial and industrial loans 70,164 53,652 16,512 43,100 1,973 12,315 6,800 2,450 3,526 41 U.S. addressees (domicile) 47,176 35,556 11,620 26,380 205 9,696 6,238 1,812 2,845 42 Non-U.S. addressees (domicile) 22,987 18,095 4,892 16,720 1,768 2,618 562 638 681 43 Loans to individuals for household, family, and other personal expenditures 317 268 49 223 2 46 15 22 10 44 All other loans 17,002 13,305 3,697 12,516 1,033 1,860 455 239 899 45 Loans to foreign governments and official institutions 15,733 12,197 3,536 11,543 1,018 1,759 423 162 828 46 Other 1,269 1,108 162 973 15 100 33 77 71 47 Lease financing receivables 0 0 0 0 0 0 0 0 0 48 All other assets 52,532 38,327 14,205 34,849 281 12,545 603 2,382 1,873 49 Customers' liability on acceptances outstanding.... 20,168 15,156 5,012 14,647 41 5,036 87 288 69 50 U.S. addressees (domicile) 12,475 8,428 4,047 8,113 22 4,145 83 97 15 51 Non-U.S. addressees (domicile) 7,693 6,728 965 6,534 20 891 3 191 54 52 Net due from related banking institutions6 24,812 17,024 7,788 14,747 100 6,378 44 1,978 1,565 53 Other 7,552 6,146 1,406 5,455 140 1,131 472 116 238 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 4.30 Continued Millions of dollars All states2 New York Other states2 IItteemm Total Branches3 Agencies Branches3 Agencies ff tt oo CC oo rr aa tt nn aa ll ii ii ll -- aa 44 ,, bb II rr ll aa llii nn nn cc oo hh iiss ee ,, ss Branches Agencies 54 Total liabilities5 297,691 238,653 59,039 213,327 5,390 48,176 15,426 6,274 9,099 55 Total deposits and credit balances 164,319 140,854 23,465 129,973 1,718 19,951 5,501 3,494 3,683 56 Individuals, partnerships, and corporations 47,432 43,041 4,391 37,236 221 1,636 1,994 2,944 3,399 57 U.S. addressees (domicile) 26,741 26,649 92 21,631 11 448 1,792 2,812 46 58 Non-U.S. addressees (domicile) 20,691 16,392 4,299 15,605 210 1,189 202 131 3,353 59 U.S. government, states, and political subdivisions in United States 111 111 0 66 0 6 11 27 0 60 All other 116,777 97,702 19,075 92,671 1,496 18,308 3,4% 523 283 61 Foreign governments and official institutions .... 7,456 7,048 407 6,842 240 257 26 23 68 62 Commercial banks in United States 47,944 36,622 11,323 34,356 646 11,159 1,511 230 43 63 U.S. branches and agencies of other foreign banks 39,496 29,827 9,670 27,819 304 9,796 1,366 187 25 64 Other commercial banks in United States 8,448 6,795 1,653 6,537 342 1,363 145 43 18 65 Banks in foreign countries 60,890 53,591 7,299 51,057 601 6,869 1,948 266 148 66 Foreign branches of U.S. banks 7,229 5,718 1,511 5,222 262 1,339 341 54 11 67 Other banks in foreign countries 53,661 47,873 5,788 45,835 339 5,530 1,608 212 137 68 Certified and officers' checks, travelers checks, and letters of credit sold for cash 487 442 45 415 10 23 10 4 24 69 Demand deposits 4,168 3,931 236 3,584 10 89 195 94 196 70 Individuals, partnerships, and corporations 2,532 2,382 149 2,094 0 60 179 66 133 71 U.S. addressees (domicile) 1,670 1,669 1 1,405 0 28 176 61 1 72 Non-U.S. addressees (domicile) 862 713 149 690 0 31 3 5 132 73 U.S. government, states, and political subdivisions in United States 5 5 0 4 0 0 1 0 0 74 All other 1,631 1,544 87 1,485 10 29 16 28 63 75 Foreign governments and official institutions .... 371 368 3 344 0 1 2 21 2 76 Commercial banks in United States 129 128 1 124 0 1 1 2 1 77 U.S. branches and agencies of other foreign banks 15 15 0 15 0 0 0 0 0 78 Other commercial banks in United States 113 113 0 109 0 1 1 2 0 79 Banks in foreign countries 644 607 37 602 0 3 3 0 36 80 Certified and officers' checks, travelers checks, and letters of credit sold for cash 487 442 45 415 10 23 10 4 24 81 Time deposits 158,279 135,545 22,734 125,252 1,464 19,739 5,211 3,310 3,304 82 Individuals, partnerships, and corporations 43,320 39,498 3,822 34,220 47 1,455 1,720 2,788 3,089 83 U.S. addressees (domicile) 24,337 24,335 2 19,783 1 354 1,525 2,673 1 84 Non-U.S. addressees (domicile) 18,984 15,163 3,820 14,438 46 1,101 195 116 3,089 85 U.S. government, states, and political subdivisions in United States 103 103 0 60 0 5 1111 27 0 86 All other 114,856 95,944 18,912 90,971 1,417 18,278 3,480 495 215 87 Foreign governments and official institutions .... 7,011 6,645 366 6,463 208 255 25 1 61 88 Commercial banks in United States 47,776 36,466 11,310 34,205 634 11,158 1,510 228 43 89 U.S. branches and agencies of other foreign banks 39,480 29,811 9,669 27,803 303 9,796 1,366 187 25 90 Other commercial banks in United States 8,297 6,656 1,641 6,401 331 1,361 144 41 18 91 Banks in foreign countries 60,069 52,832 7,236 50,304 575 6,866 1,946 266 112 92 Savings deposits 1,222 1062 160 823 0 84 95 89 130 93 Individuals, partnerships, and corporations 1,214 1054 160 815 0 84 95 89 130 94 U.S. addressees (domicile) 587 587 0 387 0 31 91 79 0 95 Non-U.S. addressees (domicile) 627 467 160 429 0 53 5 10 130 96 U.S. government, states, and political subdivisions in United States 0 0 0 0 0 0 0 0 0 97 All other 8 8 0 8 0 0 0 0 0 98 Credit balances 651 316 335 314 244 39 0 1 53 99 Individuals, partnerships, and corporations 366 107 259 106 174 38 0 1 48 100 U.S. addressees (domicile) 147 58 89 57 10 35 0 1 45 101 Non-U.S. addressees (domicile) 219 49 170 49 164 3 0 0 3 102 U.S. government, states, and political subdivisions in United States 2 2 0 2 0 0 0 0 0 103 All other 282 206 76 206 69 1 0 0 6 104 Foreign governments and official institutions .... 65 28 38 28 32 1 0 0 5 105 Commercial banks in United States 39 28 12 27 12 0 0 0 0 106 U.S. branches and agencies of other foreign banks 1 1 0 1 0 0 0 0 0 107 Other commercial banks in United States 38 27 12 27 11 0 0 0 0 108 Banks in foreign countries 177 151 26 151 26 0 0 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • May 1986 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1985Continued Millions of dollars All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies 109 Federal funds purchased and securities sold under agreements to repurchase 28,055 21,839 6,215 20,570 696 5,531 841 295 121 By holder 110 Commercial banks in United States 23,402 17,969 5,432 16,926 193 5,275 626 295 87 111 Others 4,653 3,870 783 3,644 503 256 215 0 34 By type 112 One-day maturity or continuing contract 26,944 20,730 6,214 19,603 696 5,529 700 295 121 113 Securities sold under agreements to repurchase .. 2,258 2,179 79 2,156 69 19 14 0 0 114 Other 24,686 18,551 6,135 17,447 627 5,510 686 295 121 115 Other securities sold under agreements to repurchase 1,111 1,110 1 967 0 3 141 0 0 116 Other liabilities for borrowed money 40,349 26,145 14,204 23,492 1,791 11,619 1,834 378 1,236 117 Owed to banks 38,570 24,579 13,991 22,168 1,751 11,446 1,602 368 1,236 118 U.S. addressees (domicile) 37,334 23,689 13,645 21,328 1,689 1111,,443388 1,583 339 957 119 Non-U.S. addressees (domicile) 1,236 890 347 839 62 88 18 29 280 120 Owed to others 1,780 1,567 213 1,325 39 174 232 10 0 121 U.S. addressees (domicile) 1,590 1,417 173 1,175 10 164 232 10 0 122 Non-U.S. addressees (domicile) 190 150 40 150 30 10 0 0 0 123 All other liabilities 64,968 49,814 15,154 39,292 1,185 11,074 7,250 2,108 4,059 124 Acceptances executed and outstanding 22,057 16,720 5,337 16,177 18 5,383 89 319 71 125 Net due to related banking institutions6 37,194 28,282 8,912 18,723 995 5,027 6,887 1,689 3,874 126 Other 5,717 4,811 906 4,392 172 664 274 100 115 MEMO 127 Time deposits of $100,000 or more 125,051 104,400 20,651 94,414 97 1199,,220055 55,,115500 33,,117788 33,,000088 128 Certificates of deposit (CDs) in denominations of $100,000 or more 35,994 33,855 2,139 28,571 0 1,421 1,779 2,704 1,518 129 Other 89,057 70,545 18,512 65,842 97 1177,,778844 33,,337711 473 11,,448899 130 Savings deposits authorized for automatic transfer and NOW accounts 113 72 40 53 0 13 6 9 31 131 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 0 0 0 0 0 0 0 0 0 132 Time certificates of deposit in denominations of $100,000 or more with remaining maturity of more than 12 months 12,544 12,519 26 10,787 0 196 629 910 22 133 Acceptances refinanced with a U.S.-chartered bank .. 3,068 2,005 1,063 1,718 108 1,038 6 198 0 134 Statutory or regulatory asset pledge requirement 50,499 49,151 1,348 48,465 1,265 147 569 18 35 135 Statutory or regulatory asset maintenance requirement 22,485 22,209 276 6,403 0 114 13,042 2,652 274 136 Commercial letters of credit 10,183 7,417 2,765 6,679 114 2,583 225 284 298 137 Standby letters of credit, total 46,464 39,106 7,359 33,391 101 6,917 3,959 818 1,278 138 U.S. addressees (domicile) 41,620 35,118 6,502 29,653 13 6,268 3,795 782 1,109 139 Non-U.S. addressees (domicile) 4,844 3,988 857 3,739 88 649 164 36 169 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit) 8,095 7,500 595 6,588 0 634 653 118 102 141 Holdings of commercial paper included in total gross loans 629 335 294 267 1 292 45 0 25 142 Holdings of acceptances included in total commercial and industrial loans 3,916 3,096 820 2,971 43 785 101 14 3 143 Immediately available funds with a maturity greater than one day (included in other liabilities for borrowed money) 28,788 19,981 8,808 17,622 1,289 7,617 1,709 278 274 144 Gross due from related banking institutions6 106,005 88,376 17,629 81,573 882 14,821 2,763 3,108 2,860 145 U.S. addressees (domicile) 26,584 19,678 6,905 15,892 83 5,860 891 2,570 1,286 146 Branches and agencies in the United States 25,655 18,930 6,725 15,198 67 5,683 854 2,568 1,285 147 In the same state as reporter 2,938 2,147 791 2,072 2 792 0 26 47 148 In other states 22,717 16,782 5,934 13,125 65 4,891 854 2,542 11,,223399 149 U.S. banking subsidiaries7 929 749 180 695 17 177 37 2 11 150 Non-U.S. addressees (domicile) 79,421 68,698 10,724 65,680 798 8,961 1,872 538 1,573 151 Head office and non-U.S. branches and agencies. 77,153 66,856 10,297 63,887 794 8,716 1,826 538 1,392 152 Non-U.S. banking companies and offices 2,268 1,841 427 1,794 4 245 45 0 181 153 Gross due to related banking institutions6 118,387 99,634 18,753 85,549 1,776 13,469 9,605 2,819 5,168 154 U.S. addressees (domicile) 25,695 18,271 7,424 10,191 60 4,087 5,088 2,233 4,036 155 Branches and agencies in the United States 25,026 17,721 7,305 9,772 60 4,032 4,967 2,222 3,973 156 In the same state as reporter 3,078 2,230 848 2,082 28 802 0 100 65 157 In other states 21,948 15,491 6,457 7,690 33 3,230 4,967 2,122 3,907 158 U.S. banking subsidiaries7 668 550 118 418 0 55 121 11 64 159 Non-U.S. addressees (domicile) 92,692 81,363 11,329 75,358 1,716 9,383 4,518 586 1,132 160 Head office and non-U.S. branches and agencies. 89,807 78,637 11,170 72,957 1,649 9,260 4,253 579 1,108 161 Non-U.S. banking companies and offices 2,885 2,726 159 2,401 66 122 265 7 24 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A79 4.30 Continued Millions of dollars All states2 New York Other states2 CCaallii-- IItteemm ffoorrnniiaa,, IIlllliinnooiiss,, Total Branches3 Agencies Branches3 Agencies ttoottaall44 bbrraanncchheess Branches Agencies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets 293,635 234,085 59,550 208,917 5,526 48,788 15,024 6,470 8,909 163 Cash and due from depository institutions 67,952 61,731 6,221 57,366 106 6,167 3,471 305 537 164 Federal funds sold and securities purchased under agreements to resell 8,124 6,960 1,164 6,677 809 279 167 83 109 165 Total loans 146,184 111,952 34,231 95,903 3,824 26,479 10,301 3,501 6,177 166 Loans to banks in foreign countries 24,268 19,000 5,268 17,680 538 4,107 989 266 688 167 Total deposits and credit balances 159,199 136,475 22,725 125,731 1,644 19,333 5,409 3,490 3,593 168 Time CDs in denominations of $100,000 or more 36,285 34,209 2,076 28,592 0 1,405 2,091 2,729 1,469 169 Federal funds purchased and securities sold under agreements to repurchase 26,040 20,290 5,750 18,768 556 5,303 961 343 109 170 Other liabilities for borrowed money 39,591 25,487 14,104 23,146 1,749 11,613 1,588 331 1,164 171 Number of reports filed8 462 295 167 190 23 120 46 30 53 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, footnote 6). On the former monthly branch and agency report, available through "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign the G.ll statistical release, gross balances were included in total assets and total Banks." This form was first used for reporting data as of June 30, 1980. From liabilities. Therefore, total asset and total liability figures in this table are not November 1972 through May 1980, U.S. branches and agencies of foreign banks comparable to those in the G.ll tables. had filed a monthly FR 886a report. Aggregate data from that report were 6. "Related banking institutions" includes the foreign head office and other available through the Federal Reserve statistical release G.ll, last issued on U.S. and foreign branches and agencies of the bank, the bank's parent holding July 10, 1980. Data in this table and in the G. 11 tables are not strictly comparable company, and majority-owned banking subsidiaries of the bank and of its parent because of differences in reporting panels and in definitions of balance sheet holding company (including subsidiaries owned both directly and indirectly). items. Gross amounts due from and due to related banking institutions are shown as 2. Includes the District of Columbia. memo items. 3. Includes all offices that have the power to accept deposits from U.S. 7. "U.S. banking subsidiaries" refers to U.S. banking subsidiaries majorityresidents, including any such offices that are considered agencies under state law. owned by the foreign bank and by related foreign banks and includes U.S. offices 4. Agencies account for almost all of the assets and liabilities reported in of U.S.-chartered commercial banks, of Edge Act and Agreement corporations, California. and of New York State (Article XII) investment companies. 5. Total assets and total liabilities include net balances, if any, due from or due 8. In some cases two or more offices of a foreign bank within the same to related banking institutions in the United States and in foreign countries (see metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH PRESTON MARTIN, Vice Chairman EMMETT J. RICE 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 BOB S. MOORE, Special Assistant to the Board STANLEY J. SIGEL, Assistant to the Board NAOMI P. SALUS, Special Assistant to the Board NORMAND R.V. BERNARD, Special Assistant to the Board LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS MICHAEL BRADFIELD, General Counsel JAMES L. KICHLINE, Director J. VIRGIL MATTINGLY, JR., Deputy General Counsel EDWARD C. ETTIN, Deputy Director RICHARD M. ASHTON, Associate General Counsel MICHAEL J. PRELL, Deputy Director OLIVER IRELAND, Associate General Counsel JOSEPH S. ZEISEL, Deputy Director RICKI R. TIGERT, Assistant General Counsel JARED J. ENZLER, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel DAVID E. LINDSEY, Associate Director ELEANOR J. STOCKWELL, Associate Director THOMAS D. SIMPSON, Deputy Associate Director OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Deputy Associate Director MARTHA BETHEA, Assistant Director WILLIAM W. WILES, Secretary SUSAN J. LEPPER, Assistant Director BARBARA R. LOWREY, Associate Secretary RICHARD D. PORTER, Assistant Director JAMES MCAFEE, Associate Secretary PETER A. TINSLEY, Assistant Director LEVON H. GARABEDIAN, Assistant Director (Administration) DIVISION OF CONSUMER AND COMMUNITY AFFAIRS DIVISION OF INTERNATIONAL FINANCE GRIFFITH L. GARWOOD, Director JERAULD C. KLUCKMAN, Associate Director EDWIN M. TRUMAN, Director GLENN E. LONEY, Assistant Director LARRY J. PROMISEL, Senior Associate Director DOLORES S. SMITH, Assistant Director CHARLES J. SIEGMAN, Senior Associate Director DAVID H. HOWARD, Deputy Associate Director ROBERT F. GEMMILL, Staff Adviser DIVISION OF BANKING PETER HOOPER III, Assistant Director KAREN H. JOHNSON, Assistant Director SUPERVISION AND REGULATION RALPH W. SMITH, JR., Assistant Director WILLIAM TAYLOR, Director WELFORD S. FARMER, Deputy Director' FREDERICK R. DAHL, Associate Director DON E. KLINE, Associate Director FREDERICK M. STRUBLE, Associate Director WILLIAM A. RYBACK, Deputy Associate Director STEPHEN C. SCHEMERING, Deputy Associate Director RICHARD SPILLENKOTHEN, Deputy Associate Director HERBERT A. BIERN, Assistant Director JOE M. CLEAVER, Assistant Director ANTHONY CORNYN, Assistant Director JAMES I. GARNER, Assistant Director JAMES D. GOETZINGER, Assistant Director MICHAEL G. MARTINSON, Assistant Director ROBERT S. PLOTKIN, Assistant Director SIDNEY M. SUSSAN, Assistant Director LAURA M. HOMER, Securities Credit Officer Digitized for FR1A. SOEn Rlo an from the Federal Reserve Bank of Richmond. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 and Official Staff MARTHA R. SEGER MANUEL H. JOHNSON WAYNE D. ANGELL 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 CHARLES W. BENNETT, Assistant Director CHARLES W. WOOD, Assistant Director ANNE M. DEBEER, Assistant Director JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant Director OFFICE OF THE CONTROLLER WILLIAM E. PASCOE III, Assistant Director JOHN H. PARRISH, Assistant Director GEORGE E. LIVINGSTON, Controller FLORENCE M. YOUNG, Adviser BRENT L. BOWEN, Assistant Controller 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 WILLIAM C. SCHNEIDER, JR., Assistant Director RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • May 1986 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL MANUEL H. JOHNSON FRANK E. MORRIS ROGER GUFFEY PRESTON MARTIN EMMETT J. RICE KAREN N. HORN THOMAS C. MELZER MARTHA R. SEGER HENRY C. WALLICH STEPHEN H. AXILROD, Staff Director and Secretary JOHN M. DAVIS, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary RICHARD G. DAVIS, Associate Economist NANCY M. STEELE, Deputy Assistant Secretary THOMAS E. DAVIS, Associate Economist MICHAEL BRADFIELD, General Counsel DONALD L. KOHN, Associate Economist JAMES H. OLTMAN, Deputy General Counsel DAVID E. LINDSEY, Associate Economist JAMES L. KICHLINE, Economist ALICIA H. MUNNELL, Associate Economist EDWIN M. TRUMAN, Economist (International) MICHAEL J. PRELL, Associate Economist ANATOL B. BALBACH, Associate Economist CHARLES J. SIEGMAN, 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, President WILLIAM H. BO WEN, EIGHTH DISTRICT, Vice President 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

A83 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 SCHNEIDER, Detroit, Michigan KENNETH HALL, Jackson, Mississippi JANE SHULL, Phildelphia, 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 MICHAEL R. WISE, Denver, Colorado, Vice President ELLIOTT G. CARR, Orleans, Massachusetts JAMIE J. JACKSON, Houston, Texas M. TODD COOKE, Philadelphia, Pennsylvania FRANCES LESNIESKI, East Lansing, Michigan JOHN C. DICUS, Topeka, Kansas DONALD F. MCCORMICK, Livingston, New Jersey HAROLD W. GREENWOOD, JR., Minneapolis, Minnesota HERSCHEL ROSENTHAL, Miami, Florida JOHN A. HARDIN, Rock Hill, South Carolina GARY L. SIRMON, Walla Walla, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, THE ECONOMETRICS OF PRICE DETERMINATION CONFER- Mail Stop 138, Board of Governors of the Federal Reserve ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 System, Washington, D.C. 20551. When a charge is indicat- pp. Cloth ed. $5.00 each; 10 or more to one address, ed, remittance should accompany request and be made $4.50 each. Paper ed. $4.00 each; 10 or more to one payable to the order of the Board of Governors of the Federal address, $3.60 each. Reserve System. Remittance from foreign residents should ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— be drawn on a U.S. bank. Stamps and coupons are not Regulation Z) Vol. I (Regular Transactions). 1969. 100 accepted. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- address, $2.00 each. TIONS. 1984. 120 pp. FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY ANNUAL REPORT. UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one ANNUAL REPORT: BUDGET REVIEW, 1985-86. 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 INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; year or $2.50 each. 10 or more to one address, $1.25 each. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. of Part I only) 1976. 682 pp. $5.00. $13.50 each. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: 1,168 pp. $15.00. REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL ANNUAL STATISTICAL DIGEST ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. 1974-78. 1980. 305 pp. $10.00 per copy. FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- 1981. 1982. 239 pp. $ 6.50 per copy. ed at least monthly. (Requests must be prepaid.) 1982. 1983. 266 pp. $ 7.50 per copy. Consumer and Community Affairs Handbook. $60.00 per 1983. 1984. 264 pp. $11.50 per copy. year. 1984. 1985. 254 pp. $12.50 per copy. Monetary Policy and Reserve Requirements Handbook. FEDERAL RESERVE CHART BOOK. Issued four times a year in $60.00 per year. February, May, August, and November. Subscription Securities Credit Transactions Handbook. $60.00 per year. includes one issue of Historical Chart Book. $7.00 per Federal Reserve Regulatory Service. 3 vols. (Contains all year or $2.00 each in the United States, its possessions, three Handbooks plus substantial additional material.) Canada, and Mexico. Elsewhere, $10.00 per year or $175.00 per year. $3.00 each. Rates for subscribers outside the United States are as HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- follows and include additional air mail costs: tion to the Federal Reserve Chart Book includes one Federal Reserve Regulatory Service, $225.00 per year. issue. $1.25 each in the United States, its possessions, Each Handbook, $75.00 per year. Canada, and Mexico; 10 or more to one address, $1.00 THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A each. Elsewhere, $1.50 each. MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- WELCOME TO THE FEDERAL RESERVE. RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in PROCESSING AN APPLICATION THROUGH THE FEDERAL REthe United States, its possessions, Canada, and Mexico; SERVE SYSTEM. August 1985. 30 pp. 10 or more of same issue to one address, $13.50 per year THE MONETARY AUTHORITY OF THE FEDERAL RESERVE, or $.35 each. Elsewhere, $20.00 per year or $.50 each. May 1984. (High School Level.) THE FEDERAL RESERVE ACT, as amended through August 31, WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. 1985. with an appendix containing provisions of certain 93 pp. $2.50 each. other statutes affecting the Federal Reserve System. 576 REMARKS BY CHAIRMAN PAUL A. VOLCKER, AT XIII AMERIpp. $7.00. CAN-GERMAN BIENNIAL CONFERENCE, March 1985. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- REMARKS BY CHAIRMAN PAUL A. VOLCKER, TO THE EMPIRE ERAL RESERVE SYSTEM. CLUB OF CANADA AND THE CANADIAN CLUB OF TO- REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- RONTO, October 28, 1985. NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Each volume, $3.00; 10 or more to one address, $2.50 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 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. Canner and Robert D. Kurtz. August 1985. 31 pp. 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 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, by Thomas F. Brady. November 1985. 25 pp. 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- VENTION: OCTOBER 1980-OcTOBER 1981, by Margaret 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) L. Greene. August 1984. 36 pp. INDEXES OF THE MONETARY AGGREGATES, by Helen T. Farr and Deborah Johnson. December 1985. 42 pp. 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- 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- 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS DEUTSCHE MARK INTERVENTION, by Laurence R. IN BANKING BEFORE AND AFTER ACQUISITION. April Jacobson. October 1983. 8 pp. 1986. 31 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 REPRINTS OF BULLETIN ARTICLES Union Settlements and Aggregate Wage Behavior in the Most of the articles reprinted do not exceed 12 pages. 1980s. 12/84. The Thrift Industry in Transition. 3/85. U.S. International Transactions in 1984. 5/85. The Commercial Paper Market since the Mid-Seventies. 6/82. A Revision of the Index of Industrial Production. 7/85. Foreign Experience with Targets for Money Growth. 10/83. Financial Innovation and Deregulation in Foreign Industrial Intervention in Foreign Exchange Markets: A Summary of Countries. 10/85. Ten Staff Studies. 11/83. Recent Developments in the Bankers Acceptance Market. A Financial Perspective on Agriculture. 1/84. 1/86. Survey of Consumer Finances, 1983. 9/84. The Use of Cash and Transaction Accounts by American Bank Lending to Developing Countries. 10/84. Families. 2/86. Survey of Consumer Finances, 1983: A Second Report. Financial Characteristics of High-Income Families. 3/86 12/84. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 Index to Statistical Tables References are to pages A3-A79 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, 74 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21, 76-79 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at 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) New issues, 34 EMPLOYMENT, 45 Rates, 24 Eurodollars, 24 Branch banks, 21, 55, 76-79 Business activity, nonfinancial, 44 Business expenditures on new plant and equipment, 36 FARM mortgage loans, 39 Business loans (See Commercial and industrial loans) Federal agency obligations, 4, 9, 10, 11, 31, 32 Federal credit agencies, 33 Federal finance CAPACITY utilization, 46 Debt subject to statutory limitation, and types and Capital accounts ownership of gross debt, 30 Banks, by classes, 18 Receipts and outlays, 28, 29 Federal Reserve Banks, 10 Treasury financing of surplus, or deficit, 28 Central banks, discount rates, 67 Treasury operating balance, 28 Certificates of deposit, 24 Federal Financing Bank, 28, 33 Commercial and industrial loans Federal funds, 5, 17, 19, 20, 21, 24, 28 Commercial banks, 16, 19, 70-72, 76 Federal Home Loan Banks, 33 Weekly reporting banks, 19-21 Federal Home Loan Mortgage Corporation, 33, 38, 39 Commercial banks Federal Housing Administration, 33, 38, 39 Assets and liabilities, 18-20 Federal Land Banks, 39 Commercial and industrial loans, 16, 18, 19, 20, 21, 70- Federal National Mortgage Association, 33, 38, 39 72, 76 Federal Reserve Banks Consumer loans held, by type, and terms, 40, 41 Condition statement, 10 Loans sold outright, 19 Discount rates (See Interest rates) Nondeposit funds, 17 U.S. government securities held, 4, 10, 11, 30 Real estate mortgages held, by holder and property, 39 Federal Reserve credit, 4, 5, 10, 11 Terms of lending, 70-75, 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, 73 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, 76-79 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

A88 GOLD REAL estate loans Certificate account, 10 Banks, by classes, 16, 19, 20, 39 Stock, 4, 54 Financial institutions, 26 Government National Mortgage Association, 33, 38, 39 Terms, yields, and activity, 38 Gross national product, 51 Type of holder and property mortgaged, 39 Repurchase agreements, 5, 17, 19, 20, 21 HOUSING, new and existing units, 49 Reserve requirements, 7 Reserves INCOME, personal and national, 44, 51, 52 Commercial banks, 18 Industrial production, 44, 47 Depository institutions, 3, 4, 5, 12 Installment loans, 40, 41 Federal Reserve Banks, 10 Insurance companies, 26, 30, 39 U.S. reserve assets, 54 Interest rates Residential mortgage loans, 38 Bonds, 24 Retail credit and retail sales, 40, 41, 44 Commercial banks, 70-75 Consumer installment credit, 41 SAVING Federal Reserve Banks, 6 Flow of funds, 42, 43 Foreign central banks and foreign countries, 67 National income accounts, 51 Money and capital markets, 24 Savings and loan associations, 8, 26, 39, 40, 42 (See also Mortgages, 38 Thrift institutions) Prime rate, 23 Savings banks, 26 Time and savings deposits, 8 Savings deposits (See Time and savings deposits) International capital transactions of United States, 53-67 Securities (See specific types) International organizations, 57, 58, 60, 63, 64 Federal and federally sponsored credit agencies, 33 Inventories, 51 Foreign transactions, 65 Investment companies, issues and assets, 35 New issues, 34 Investments (See also specific types) Prices, 25 Banks, by classes, 18, 19, 20, 21, 26 Special drawing rights, 4, 10, 53, 54 Commercial banks, 3, 16, 18-20, 39 State and local governments Federal Reserve Banks, 10, 11 Deposits, 19, 20 Financial institutions, 26, 39 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 45 Ownership of securities issued by, 19, 20, 26 Life insurance companies (See Insurance companies) Rates on securities, 24 Loans (See also specific types) Stock market, selected statistics, 25 Banks, by classes, 18-20 Stocks (See also Securities) Commercial banks, 3, 16, 18-20, 70-75, 76 New issues, 34 Federal Reserve Banks, 4, 5, 6, 10, 11 Prices, 25 Financial institutions, 26, 39 Insured or guaranteed by United States, 38, 39 Student Loan Marketing Association, 33 MANUFACTURING TAX receipts, federal, 29 Capacity utilization, 46 Thrift institutions, 3 (See also Credit unions, Mutual Production, 46, 48 savings banks, and Savings and loan associations) Margin requirements, 25 Time and savings deposits, 3, 8, 13, 17, 18, 19, 20, 21 Member banks (See also Depository institutions) Trade, foreign, 54 Federal funds and repurchase agreements, 5 Treasury cash, Treasury currency, 4 Reserve requirements, 7 Treasury deposits, 4, 10, 28 Mining production, 48 Treasury operating balance, 28 Mobile homes shipped, 49 UNEMPLOYMENT, 45 Monetary and credit aggregates, 3, 12 U.S. government balances Money and capital market rates, 24 Commercial bank holdings, 18, 19, 20 Money stock measures and components, 3, 13 Treasury deposits at Reserve Banks, 4, 10, 28 Mortgages (See Real estate loans) U.S. government securities Mutual funds, 35 Bank holdings, 18-20, 21, 30 Mutual savings banks, 8, 26, 39, 40 (See also Thrift Dealer transactions, positions, and financing, 32 institutions) Federal Reserve Bank holdings, 4, 10, 11, 30 Foreign and international holdings and transactions, 10, 30, 66 NATIONAL defense outlays, 29 Open market transactions, 9 National income, 51 Outstanding, by type and holder, 26, 30 Rates, 24 OPEN market transactions, 9 U.S. international transactions, 53-67 Utilities, production, 48 PERSONAL income, 52 Prices Consumer and producer, 44, 50 VETERANS Administration, 38, 39 Stock market, 25 Prime rate, 23 WEEKLY reporting banks, 19-21 Producer prices, 44, 50 Wholesale (producer) prices, 44, 50 Production, 44, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A89 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Joseph A. Baute Frank E. Morris 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 30303 John H. Weitnauer, Jr. Robert P. Forrestal Bradley Currey, Jr. Jack Guynn Delmar Harrison Birmingham 35283 A. G. Trammell Fred R. Hen- Jacksonville 32231 Vacancy1 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 Marcia S. Anderson 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 James L. Stull El Paso 79999 Peyton Yates Joel L. Koonce, Jr. Houston 77252 Walter M. Mischer, Jr. J.Z. Rowe San Antonio 78295 Lawrence L. Crum 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 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. 1. Vacancy due to recent resignation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A90 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1994 LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT sumer credit protections. This 44-page booklet ex- PUBLICATIONS plains how to use the credit laws to shop for credit, apply for it, keep up credit ratings, and complain about an unfair deal. The Federal Reserve Board publishes a series of Protections offered by the Electronic Fund Transfer pamphlets covering individual credit laws and topics, Act are explained in Alice in Debitland. This booklet as pictured below. The series includes such subjects as offers tips for those using the new "paperless" syshow the Equal Credit Opportunity Act protects wom- tems for transferring money. en against discrimination in their credit dealings, how Copies of consumer publications are available free to use a credit card, and how to use Truth in Lending of charge from Publications Services, Mail Stop 138, information to compare credit costs. Board of Governors of the Federal Reserve System, The Board also publishes the Consumer Handbook Washington, D.C. 20551. Multiple copies for classto Credit Protection Laws, a complete guide to con- room use are also available free of charge. If Tou Use A Credit Card What TVuth In ^^ Alice Lending Means To You Debitland uIBMMB* l«5N5 LMMO LE4NNO LE4SMG TRUTH MLE4SING Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis