Federal Reserve Bulletin, 1986-10

VOLUME 72 • NUMBER 10 • OCTOBER 1986 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Michael Bradfield • S. David Frost • Griffith L. Garwood • James L. Kichline • Edwin M. Truman 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 683 FOREIGN LENDING BY BANKS.- A Participation by the Federal Reserve and GUIDE TO INTERNATIONAL AND the Treasury in near-term contingency sup- U.S. STATISTICS port for Mexico's reserves. This article looks at the principal sources of Financial results available for priced serdata on foreign (cross-border) lending by all vice operations. banks, both by banks chartered in the Unit- Proposals to amend Regulations E and Z. ed States alone and by banks around the world taken together; the distinctions be- Changes in Board staff. tween certain series and the particular Admission of two state banks to memberneeds that led to their introduction are emphasized. ship in the Federal Reserve System. 695 INDUSTRIAL PRODUCTION 704 RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE Industrial production decreased an estimated 0.1 percent in July. At its meeting on July 8-9, 1986, the Committee reaffirmed the ranges established in 697 STATEMENT TO CONGRESS February for growth of 6 to 9 percent in both M2 and M3 for the year 1986. Because Martha R. Seger, Member, Board of Goverof the substantial uncertainties surrounding nors, discusses H.R. 1575, a bill to amend the behavior of Ml in relation to economic the Equal Credit Opportunity Act (ECOA) activity and prices and the substantial derelative to business credit transactions and cline in its velocity in the first half of the says that the Board believes that the ECOA year, the Committee decided that Ml and its implementing Regulation B provide growth in excess of the previously estaban adequate basis for protection against lished 3 to 8 percent range would be acceptcredit discrimination and that the excepable for the year. The behavior of all of the tions established are sufficiently narrow in monetary aggregates would continue to be scope, carefully written, and directly rejudged against the background of developsponsive to the distinctions between conments in the economy and financial markets sumer and business credit, before the Suband potential price pressures. Growth of committee on Consumer Affairs and Ml would also be evaluated in the light of Coinage of the House Committee on Bankthe behavior of the broader aggregates. The ing, Finance and Urban Affairs, August 12, Committee recognized that expansion in 1986. total debt might exceed its monitoring range of 8 to 11 percent for the year. 701 ANNOUNCEMENTS With respect to the tentative ranges for Appointment of Manuel H. Johnson as Vice 1987, the Committee reduced the ranges for Chairman of the Board of Governors. growth in M2 and M3 by Vi percentage point. In the case of Ml the Committee Appointment of H. Robert Heller as a memexpressed the preliminary view that retenber of the Board of Governors. tion of the 1986 range of 3 to 8 percent for Change in the discount rate. growth in this aggregate appeared appropri- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ate in the light of most historical experi- 713 LEGAL DEVELOPMENTS ence. The Committee also set a range of 8 to Various bank holding company, bank ser- 11 percent for growth in total domestic vice corporation, and bank merger orders; nonfinancial debt in 1987. It was underand pending cases. stood that all the ranges were provisional and that, notably in the case of Ml, they 742 MEMBERSHIP OF THE BOARD OF would be reviewed in early 1987 in the light GOVERNORS OF THE FEDERAL of intervening developments. RESERVE SYSTEM, 1913-86 With regard to operating instructions for the short run, the Committee adopted a List of appointive and ex officio members. directive that called for some decrease in the existing degree of reserve pressure, AI FINANCIAL AND BUSINESS STATISTICS recognizing that the relaxation could be A3 Domestic Financial Statistics accomplished in the first instance by a A44 Domestic Nonfinancial Statistics reduction in the discount rate. The mem- A53 International Statistics bers expected such an approach to policy implementation to be consistent with A69 GUIDE TO TABULAR PRESENTATION, growth in M2 and M3 at annual rates of STATISTICAL RELEASES, AND SPECIAL about 7 to 9 percent over the three-month TABLES period from June to September. Over the same period growth in Ml was expected to A70 BOARD OF GOVERNORS AND STAFF moderate from the exceptionally large increase during the second quarter. The spe- A72 FEDERAL OPEN MARKET COMMITTEE cific rate of Ml growth remained subject to AND STAFF, ADVISORY COUNCILS unusual uncertainty and the Committee agreed that this aggregate should continue A74 FEDERAL RESERVE BOARD to be judged in the light of the behavior of PUBLICATIONS the broader aggregates and other factors. The Committee indicated that it might find All INDEX TO STATISTICAL TABLES somewhat greater or somewhat lesser reserve restraint acceptable over the inter- A79 FEDERAL RESERVE BANKS, BRANCHES, meeting period depending on the growth of AND OFFICES the monetary aggregates, the strength of the business expansion, the performance of the A80 MAP OF FEDERAL RESERVE SYSTEM dollar on foreign exchange markets, progress against inflation, and conditions in domestic and international credit markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Lending by Banks: A Guide to International and U.S. Statistics This article was prepared by Rodney H. Mills of borders. In turn, some international organizathe Board's Division of International Finance. tions combine data collected by national authori- Cynthia Hart provided research assistance. ties, to show the aggregate foreign claims (assets) and liabilities of banks in a wide spectrum of Interest in the foreign lending activities of banks countries. International statistics of this type are in the United States and abroad has been height- produced and published by the Bank for Internaened in recent years by the debt-servicing diffi- tional Settlements (BIS) in Basle, Switzerland, culties of developing countries, principally in and by the International Monetary Fund (IMF) in Latin America. These troubled debtors owe gov- Washington. In addition, the BIS and the Organiernments, international lending institutions, sup- sation for Economic Co-operation and Developpliers of their imports, and in a few cases bond- ment (OECD) in Paris publish certain data jointholders, but they owe the most to commercial ly. The World Bank includes debts to banks in an banks. The same is true of developing countries annual publication, World Debt Tables, but that that have not encountered debt-servicing prob- series is not discussed in this article. lems, and of many industrial countries, although The data collected by international institutions for some of the latter, new issues of floating-rate from the national authorities must be sufficiently notes and bonds in recent years have exceeded standardized so that the individual submissions new indebtedness to commercial banks. Most can be aggregated into a meaningful total. For borrowing nations owe banks in many countries. example, the data must have common dates. The To construct statistics on the worldwide total of institutions covered can be conveniently referred foreign bank lending requires the collection of to as commercial banks and more tightly defined data from a great many banks by a large number as consisting of banks (except central banks) that of national data collectors. accept deposits of any kind, offshore banking This article looks at the principle sources of units (which may deal only with nonresidents), data on foreign lending by banks, both by banks and development banks. chartered in the United States alone and by The individual submissions show total foreign banks around the world taken together. For both assets of banks (and often the liabilities), and in groups of banks, the amount of reported claims most series they also include geographical breakat any one time differs from one statistical series downs of the amount of claims on, and liabilities to another, depending on how each is construct- to, each country with which the banks do busied. This article emphasizes the distinctions be- ness. Data collected by the BIS from 18 countween certain series and the particular needs that tries also show the currency composition of the led to their introduction. foreign claims and liabilities, while another BIS series provides other information, such as a maturity profile of claims and borrower by type. INTERNATIONAL STATISTICS These reporting efforts have required continuing close cooperation between the BIS and the IMF The national authorities, usually the central on the one hand and central banks on the other to banks, of almost all countries collect information ensure that the national submissions are as timeon the foreign activities of banks within their ly and accurate as possible. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin • October 1986 BIS Statistics liabilities of banking offices operating in a given set of countries irrespective of the nationality of The collection and dissemination of international their ownership. Each country in the BIS quarbanking data were pioneered by the Bank for terly reporting system reports for banking offices International Settlements, an institution estab- within its own borders; for example, the submislished in 1930 to facilitate the transfer of World sion of the United States covers all banks operat- War I reparations from Germany to Allied na- ing in this country whose foreign claims are over tions and to promote cooperation among central a certain threshold including U.S. branches, banks. In 1962 the BIS began to collect from agencies, and subsidiaries of foreign banks. In an central banks quarterly data on Eurodollar and age when banks in the industrial countries have other Eurocurrency operations of banks in the established branches or subsidiaries abroad in European Group of Ten countries and Switzer- great profusion—and when such institutions are land.1 In the ensuing 24 years this effort, initially heavily involved in cross-border operations—the modest by today's standards, has expanded foreign-bank components of the national submisgreatly. The number of countries whose banks sions to the quarterly series tend to be large. In are covered by the data ("reporting countries") March 1986, for example, branches and agencies has grown from a small core of European coun- of foreign banks in the United States held twotries to include all of the larger, and some of the fifths of total claims on foreign borrowers reportsmaller, industrial countries as well as all the ed in the U.S. submission. For the United Kingmajor offshore banking centers. Foreign opera- dom the analogous percentage is much higher, tions in domestic currency (that is, in the home while for the offshore banking centers it tends to currency of each reporting banking office) and in be close to 100 percent. (This discussion of the ECUs (European currency units) have been in- BIS quarterly series is confined to the claims side cluded along with those in Eurocurrencies; and of balance sheets, but the series covers foreign the data now show the claims of reporting banks liabilities in precisely the same way.) on essentially every country of the world. As can As a result of the many successive expansions be readily imagined, because of the broadening of the reporting area, the BIS quarterly series of the coverage in successive steps the series now captures a large proportion of all foreign have many breaks, an unavoidable difficulty. In lending by banks around the world, although a the late 1970s the BIS began a second, semiannu- somewhat smaller one than do the IMF statistics al international banking series, whose method- discussed later. The reporting countries include ology of coverage is quite different from that of the G-10 countries, all of which have reported the quarterly series. A third series, concentrating since 1975 at the latest; Luxembourg, another on interbank placements and showing the struc- early reporter; Austria, Denmark, and Ireland, ture of international bank activity by nationality brought into the reporting area in December of bank ownership, was initiated in the early 1977; Finland, Norway, and Spain, added in 1980s. (See the box for details on these and other December 1983; and seven offshore banking censeries.) ters: the Bahamas, Bahrain, the Cayman Islands, Hong Kong, the Netherlands Antilles, Panama, The BIS Quarterly Series. The institutional and Singapore, which as a group were brought in basis on which the BIS quarterly series rests is in December 1983 more fully than before. For territorial; the data cover the foreign assets and Panama, the BIS currently receives data only for branches of U.S. banks (which the Federal Reserve System provides). Previously, from 1975 to December 1983, the BIS received data only for 1. The G-10 countries are those that have adhered to the the branches of U.S. banks in five of those IMF's General Arrangements to Borrow. They are Belgium, centers (the Bahamas, the Cayman Islands, Pa- Canada, France, Germany, Italy, Japan, the Netherlands, nama, Hong Kong, and Singapore). Sweden, Switzerland, the United Kingdom, and the United States. Soon after the GAB was formed in 1962, Switzerland The BIS quarterly series is published with a lag became an associate member, but it did not become a full GAB member, or a member of the G-10, until 1984; and even of about V/2 months. Table 1 shows the evoluwith 11 members the latter group retains its original name. tion since 1975 of the outstanding claims of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Lending by Banks: A Guide to International and U.S. Statistics 685 1. Foreign claims of BIS reporting banks, submissions permit the BIS to publish other quarterly series types of useful data: (1) total foreign claims of Billions of dollars, at year-end banks in each reporting country, thus allowing comparisons of the growth of foreign lending 1983 1985 Country group 1975 from the various financial centers; (2) a break- Old New Old New series series' series series2 down into total claims and claims on nonbanks, which yields claims on banks as a difference; and Non-OPEC developing (3) detailed information on the currency compocountries 6633 225566 326 352 354 OPEC countries . 15 87 125 125 125 sition of foreign claims of banks in most of the Eastern Europe3. 24 58 62 71 71 reporting countries. Smaller developed countries .... 39 146 162 191 198 The data on currency composition have been G-10 countries4... 235 884 11,,004488 997 11,,001144 Offshore banking especially valuable in recent years, when the centers 58 278 325 377 382 exchange rates between the U.S. dollar and the Others and unallocated5. 9 49 50 70 73 other major currencies in which banks' foreign Total 443 1,757 2,098 2,533 2,569 claims are denominated have fluctuated widely. In the published data all claims are expressed in 1. Data reflect a series break related to the inclusion of Finland, U.S. dollars. But changes in dollar exchange Norway, Spain, Bahrain, and the Netherlands Antilles in the reporting area, and the inclusion of all banks in the Bahamas, Cayman Islands, rates alter the dollar equivalents of claims de- Hong Kong, and Singapore rather than solely the branches of U.S. nominated in other currencies. And such alterbanks in those centers. 2. Data reflect a series break related to the inclusion of foreign ations disguise the extent to which the claims securities with maturities of more than one year held by banks in the have varied in response to the amount of net new United Kingdom. 3. Includes Yugoslavia, which is elsewhere in BIS publications. lending. 4. Includes Luxembourg. Because almost all reporting countries supply 5. Includes Liberia and New Zealand, which are elsewhere in BIS publications. the BIS with information on the currency composition of their claims, since 1981 the BIS has been able to produce a series that is adjusted for the reporting banks on foreign borrowers in all coun- arithmetical effects of the exchange rate changes. tries as reported in that series. Three points are (The United States does not supply a breakdown worth noting. First, total reported claims almost of nondollar claims by individual currency, but quadrupled from 1975 to 1983, from about $440 the reported total of such claims is very small.) billion to about $1,750 billion as measured before Table 2 shows the importance of such adjustment the change in reporting area (the "old" series in in evaluating bank lending data. For example, in the table). Second, the addition of three smaller the years 1983-84, when the dollar was generally European countries and the fuller inclusion of six rising against other currencies, the claims of of the offshore banking centers noted earlier reporting banks on the non-OPEC developing raised total reported claims at the end of 1983 countries expanded $14 billion. But the rise in about $340 billion, or almost 20 percent, while the dollar reduced the dollar value of the nondolraising the reported claims on non-OPEC devel- lar claims; adjusting for that effect, the amount of oping countries 27 percent. Third, at all times the net new lending turns out to be $22 billion. reporting banks held more claims on foreign Conversely, with the dollar falling against other borrowers within their own reporting area itself currencies on balance in 1985, the increase in than on borrowers outside that area. This pattern claims on the non-OPEC developing countries of of lending reflected the large amount of redepos- $21 billion unadjusted works out to only $11 iting between reporting banks, which act as billion after adjustment. (These increases largely market makers, arbitrageurs, and intermediaries. reflected heavy new lending to China and Ko- The core of the BIS quarterly series consists of rea.) The adjusted data provided a clearer imthe claims on individual countries and the vari- pression than do the unadjusted data of the ous country groupings, aggregated from the sub- decline of net new lending to the non-OPEC missions of the different reporting countries. developing countries. (The BIS does not publish the submissions of A problem with the BIS quarterly series conindividual reporting countries.) But the national cerns banks' holdings of securities with original Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin • October 1986 maturities of more than one year issued by banks' undisbursed credit commitments, such as foreign borrowers. In the past four years, these may arise from loans signed but not yet disholdings, particularly of floating-rate notes, are bursed or from the extension of credit lines under known to have increased considerably as bor- which the borrower may draw. Still another was rowers in international markets have turned for more complete coverage of banks in offshore more to the securities market as an alternative to centers because, except for branches of U.S. bank loans. (These borrowers are heavily con- banks, their extensive lending, especially to macentrated in industrial countries.) The BIS's Re- jor borrowers among the developing countries, cent Innovations in International Banking, pub- was escaping the reporting net. lished in April 1986, shows (though with Recognition of these needs led to the introducincomplete data) that banks' holdings of long- tion of a semiannual international banking series, term securities rose from $47 billion at the end of beginning with data for December 1977. In this 1981 to $158 billion at the end of 1985. However, new series, data are collected only for claims on some BIS reporting countries, including France, countries that are outside the reporting area. Switzerland, and the United States, do not sub- Total claims on an individual country are broken mit data on such securities; the United Kingdom down into four categories of time remaining to did not do so until December 1985; and some maturity: (1) up to and including one year, (2) other countries, Italy, for example, include such over one and up to two years, (3) over two years, securities in total foreign claims but are unable to and (4) unallocated. Undisbursed credit commitallocate them geographically. (It is uncertain ments are also shown. Although the offshore whether or when these deficiencies will be recti- banking centers could not be brought into this fied.) As table 1 shows, the inclusion of long- new reporting system in their own right, the term securities in the submission for banks in the banks in the existing reporting area could supply United Kingdom beginning in December 1985 data on the claims held by their affiliates in the raised the value of the reporting banks' total offshore centers, both branches and subsidiaries. foreign claims $36 billion. The new report provided data on banks' total foreign liabilities as well as claims, with no The BIS Semiannual Series. By the latter part detail; but because the liabilities data virtually of the 1970s, analysts recognized that the BIS duplicated those in the quarterly series they were quarterly series, useful as it was, did not meet later dropped. The semiannual data are pubcertain strongly felt needs. One such need was lished with a lag of about six months. for the maturity profile of banks' claims. In The usefulness of the new semiannual report analyzing a borrower's indebtedness to banks, it was enhanced by a fundamental change in the clearly makes a difference how much of the debt method of coverage of the reporting institutions. will mature in the next year and how much in When the series was first initiated, the basis of later years. Another need was for information on coverage was nearly the same as that for the 2. Change in claims of BIS reporting banks on country roups, unadjusted and adjusted for exchange rate changes Billions of dollars; - = decrease 1981-82 1983- 84 1985 CCoouunnttrryy ggrroouupp Adjusted Unadjusted Adjusted Unadjusted Adjusted Unadjusted Non-OPEC developing countries 53.8 59.7 14.2 22.3 21.4 11.3 OPEC countries 8.6 12.4 3.5 7.8 4.7 .2 Eastern Europe1 -6.6 .1 -8.1 1.8 12.3 5.6 G-10 countries, smaller developed countries, and offshore banking centers2 295.0 352.7 112.0 193.0 321.1 219.8 Unallocated 8.1 15.5 -1.6 4.5 9.0 3.8 All countries 358.9 440.4 120.0 229.4 368.5 240.7 1. Excludes Yugoslavia, which is included here among the smaller country composition of the reporting area in these years and because developed countries. it adjusted the data for changes in exchange rates partly on the basis of 2. These areas were grouped together because the BIS changed the the definition of that area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Lending by Banks: A Guide to International and U.S. Statistics 687 quarterly series. Except for the United States, Bank claims on non-OPEC developing countries each reporting country submitted data for banks as measured by five statistical series, year-end 1985 within its borders (and for affiliates of its banks in Billions of dollars offshore centers). By contrast, the main basis for the U.S. submission was the newly instituted Country Exposure Report, which banks chartered in the United States file on a worldwide consolidated basis. This report captures the cross-border (foreign) claims not only of the U.S. offices of U.S.-chartered banks but also of the branches and majority-owned subsidiaries of these banks around the globe, while it nets out IMF1 BIS BIS FEDERAL Country quarterly semiannual RESERVE Exposure claims between offices of the same banking insti- BULLETIN Lending tution. This approach was consistent with the Survey view of bank supervisors in the G-10 countries 1. Author's estimate; IMF statistics do not measure claims on these that banks must be supervised on a worldwide countries as a group. This estimate excludes South Africa and several consolidated basis. In this hybrid system, steps European countries that the IMF classifies as "developing;" these countries are also excluded from the other series shown here. had to be taken to prevent the double-counting of affiliates of U.S. banks in other reporting coun- For several reasons, the amount of claims on tries and the omission of the U.S. branches and any particular country or country group in the agencies of banks headquartered in those coun- semiannual series will differ from that in the tries. (The latter are covered by a special statisti- quarterly series. As seen in the chart, at the end cal report, FR 2029B.) of 1985 claims on non-OPEC developing coun- But after the introduction of the BIS semian- tries were $354 billion in the quarterly series and nual series, it became increasingly evident that $317 billion in the semiannual series. The data its utility for bank supervision would be far differ partly because the semiannual series covgreater if all reporting countries reported, as the ers only those banks in the offshore centers that United States did, on a worldwide consolidated are affiliates of banks headquartered in other basis. Such a switch in method would not greatly reporting countries. Moreover, in many reportaffect the extent of the coverage, since the re- ing countries the domestically owned reporting porting banks' foreign affiliates lay almost wholly banks are not the same in the two series; this within the existing, territorially defined reporting difference is especially marked for the United area to begin with. However, central banks and States. A further difference is that claims beother bank supervisors needed to know the tween offices of the same bank are fully present claims of their own commercial banks on particu- in the quarterly series rather than netted out as lar debtors in their totality, not only at domestic they are for the semiannual series. Finally, the offices. In consequence, several reporting coun- semiannual series includes banks' holdings of tries shifted to consolidated reporting by Decem- long-term foreign securities, an asset not includber 1983, and the remainder did so by December ed in the quarterly data for some countries. In 1984. Since then several pieces of information the semiannual series the BIS shows changes in have been added to the series, including a break- claims on country groups adjusted for exchange down of the borrowers into four sectors: banks, rate changes, but not those on individual counthe public sector, the nonbank private sector, tries as the quarterly series does beginning with and unallocated. In addition to the consolidated 1984. claims of banks headquartered in the BIS reporting area, the semiannual series includes uncon- The BIS Interbank Series. A more recent BIS solidated claims held by banks in the reporting series began in 1983 as an outgrowth of a BIS area whose headquarters are outside the reportstudy of the international interbank market. In ing area—for example, U.S. offices of Mexican this series, commonly called the interbank sebanks or U.K. offices of Brazilian banks. ries, the data are broken down between inter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin • October 1986 bank claims on related offices of the same institu- to the semiannual series. One difference is that tion and those on unrelated banks, information total claims in the interbank series include claims not available in the quarterly series. Further- between offices of the same bank; a second is more, in the interbank series the data in fact that the interbank series includes claims on other encompass total as well as interbank claims, and reporting countries, thus giving a global rather provide a measure of cross-border claims ac- than only a partial measure of the foreign lending cording to the nationality of the bank. In the of the banks of a particular nationality. interbank series the reporting countries, which Table 3 shows selected data from the interbank are almost the same as those in the quarterly series for September 1985. Japan's banking sysseries before the December 1983 expansion, re- tem, with $640 billion, has the largest amount of port quarterly on the foreign claims of banks foreign claims of any country's, on an unconsoliwithin their borders broken down by the nation- dated basis. The U.S. banks are next, with $580 ality of the bank holding the claims. These are billion, while the French and U.K. banks run a the only comprehensive statistics of banking distant third and fourth. The U.S. banks had a claims on the basis of the nationality of bank larger amount and share of claims on related ownership that are publicly available, inasmuch offices (claims between offices of the same paras the individual country submissions to the ent bank) than did the Japanese banks, and semiannual series are not published. For this nearly as much in claims on nonbank borrowers, series too, data on liabilities are collected and while the claims of the Japanese banks on unrepresented the same way that claims data are. The lated banks were more than $110 billion higher. interbank series has so far been published irregularly. In addition to claims on other commercial IMF Statistics banks outside the reporting country—the focus of the series—the reported data include other In terms of the number of lending banks covered types of claims. The BIS aggregates the submis- by the data and the number of countries in which sions to produce a worldwide picture of bank those banks are located, the IMF has developed activity. In the published reports, these data are the most comprehensive set of international aggregated by nationality of bank. The results, as banking statistics. The IMF currently collects they apply to each nationality's total foreign data on both claims and liabilities from 136 of its claims, are similar, although not identical, to the 151 members and Switzerland (which is not a total foreign claims in the individual submissions member). It began to publish the data in 1984 3. Foreign claims of banks by nationality of bank ownership, BIS interbank series, September 30, 19851 Billions of dollars Country of parent bank Total foreign claims On related offices On other banks On all other borrowers Japan 640 169 285 186 United States 580 236 172 172 France 221 27 124 70 United Kingdom 183 23 86 74 Germany 165 13 88 64 Switzerland 98 15 48 35 Italy 92 4 63 25 Canada : 91 22 31 38 Netherlands 67 7 38 22 Belgium-Luxembourg 54 3 29 22 Austria 41 1 29 11 Other developed countries 48 10 18 20 Eastern Europe, Latin America, 2 Middle East and others 90 1 15 43 32 Consortium banks 41 20 19 2,477 551 1,104 822 1. Amounts are for those offices located within the BIS reporting area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Lending by Banks: A Guide to International and U.S. Statistics 689 4. Banks' foreign claims, IMF series and BIS quarterly series, December 31, 1985 Billions of dollars Total claims On banks' On nonbanks2 CCoouunnttrryy ggrroouupp33 IMF BIS IMF BIS IMF BIS Industrial countries 1,946 1,522 1,600 1,195 346 327 Eastern Europe4 51 49 41 39 10 10 Developing countries 1,071 945 676 573 395 372 Europe3 58 56 31 27 27 29 Oil-exporting countries 99 112 30 42 69 70 Major offshore banking centers 479 394 434 347 45 47 All others6 435 383 181 157 254 226 U O n th a e l r l o c c o a u te n d t ri c e l s a im an s d o i n n t n e o rn n a b t a io n n k a s l 7 organizations 173 . .5 3. . .4 2. 16 131 3 3 7 2 Statistical offset8 -32 . . . Total 3,241 2,569 2,359 1,793 882 776 1. As reported by borrowing banks in the IMF series and lending 6. Includes South Africa. banks in the BIS series. 7. One reporting country's claims on nonbanks are not allocated 2. As reported entirely (BIS) or largely (IMF) by lending banks in geographically in the specific data for claims on nonbanks, but are the BIS reporting area. The IMF series includes geographical detail allocated geographically when included in total claims. from a few countries not in the BIS reporting area and unallocated 8. Because of the procedure described in note 7, claims on banks data from other countries. for the various country groups, which are obtained by subtracting 3. Country groups follow the IMF format. BIS groups have been claims on nonbanks from total claims, add to a sum that is larger than rearranged accordingly, and the BIS data are therefore approximate. the grand total for claims on banks. 4. Excludes Hungary, Romania, and Yugoslavia. 5. Includes Cyprus, Greece, Hungary, Malta, Portugal, Romania, Turkey, and Yugoslavia. with figures going back to 1978. Collection and and by banks in many developing countries. publication of the data were a response to a need Moreover, some countries, notably Switzerland, for an explicit and systematic account of the role that report to both institutions can give the IMF of external banking flows in the external debts of data with a wider coverage of domestic banks countries and in overall international financial because that series requires less detail. But with flows. a much wider set of reporters the IMF encoun- Like the BIS quarterly series, the reporting in ters longer lags before it has complete data, and the IMF statistics is territorial, and the authori- therefore the claims on country groups are based ties in each reporting country supply data on partly on estimates by IMF staff" until the missing foreign claims and liabilities of banking offices numbers become available. Table 4 compares within their borders irrespective of their nation- IMF and BIS data for December 1985. ality. But the IMF data are less detailed than the The IMF statistics and the BIS quarterly series BIS quarterly series in that the reporters supply differ in an important aspect of their construcno breakdown by currency of their banks' for- tion: the IMF data consist of two separate sets eign positions. The IMF therefore does not pub- that are obtained from different sources and that lish changes in claims or liabilities adjusted for may not sum perfectly to a measure of banks' exchange rate changes as a regular accompani- total lending to (or deposit taking from) a particument to the unadjusted data. However, the IMF lar country or country group. The IMF collects uses BIS data to publish flows adjusted for monthly from 137 countries detailed data on the exchange rate changes in its annual publications, balance sheets of financial institutions with World Economic Report and International Capi- which it measures various monetary and credit tal Markets Developments and Prospects. aggregates. Among these data are four series that A primary benefit of the IMF data is that they the IMF publishes as its international banking measure the amount of worldwide cross-border statistics. These are cross-border interbank bank lending that is not captured by the BIS claims and cross-border bank credit to nonquarterly series. The IMF data have wider cover- banks, each by residence of the lending bank; age because they come from more reporting and cross-border interbank liabilities and crosscountries. Examples are lending by Arab banks border bank deposits of nonbanks, each by resi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin • October 1986 dence of the borrowing (deposit-taking) bank. monthly series, under U.S. Treasury jurisdic- However, most of the countries do not (and in tion, on foreign claims of banks and certain other most cases cannot) report their banks' lending to financial institutions in the United States; its (or deposit taking from) nonbanks by residence coverage is territorial. The other two series, of the nonbank customers, information that is which are quarterly and are produced by the part of the geographical detail in the BIS data Federal Reserve System in one case and as a aggregated over all reporting countries. For such joint effort by all the bank regulatory agencies in information, the IMF must to a large extent the other, refer to U.S.-chartered banks only but employ the BIS quarterly data. cover most or all of the banks' foreign affiliates in Consequently, in using IMF data to measure, addition to their domestic offices. on the claims side for example, worldwide bank lending to both banks and nonbanks in a particular country, it is necessary to add (1) the borrow- Treasury Series ing by banks in that country from banks in all other countries, as reported in standard submis- The Treasury series, initiated in 1935 and greatly sions to the IMF, and (2) the lending to nonbanks expanded since then, was developed as part of in that country as reported only by BIS-reporting the U.S. international accounts. It covers banks banks in various national submissions to the BIS. (including international banking facilities) in the Differences between the two series in timing and United States proper and in U.S. dependencies in the definition of "bank" sometimes make the (Puerto Rico, U.S. Virgin Islands, Guam, Amerisum of the two subject to error. can Samoa, Midway Island, and Wake Island). These reporters include U.S. branches, agen- OECD-BIS Joint Statistics cies, and subsidiaries of foreign banks. The Treasury collects data on foreign claims and foreign Beginning with data for December 1982, the liabilities. The reporting thresholds have been OECD and the BIS have collaborated to produce raised periodically and are now $15 million for a semiannual series on the debts of borrowing the total foreign claims or liabilities of any indicountries to banks and on certain trade-related vidual reporting institution. The data also include debts of those countries to nonbanks. This series foreign claims and liabilities of thrift institutions, combines data from the BIS quarterly series with bank holding companies, and (for selected data) data collected by the OECD on official export brokerage houses. The Federal Reserve Banks credits and on officially guaranteed or insured collect these data for the Treasury. export credits extended by banks and by suppli- In their submissions to the Treasury the reers. The combined series is more than the simple porting banks indicate their own claims and sum of two data sets: the BIS data cover all liabilities vis-a-vis foreigners and certain foreign foreign claims of banks, including those that claims of their customers that they are in a have been officially guaranteed or insured, the position to know about; on the liabilities side latter of which are also part of the OECD data; they also report the negotiable financial instruthe integration process must avoid counting ments held in custody for foreign customers. The these twice. The set of reporting countries for Treasury series constitute the U.S. submission this joint series is slightly larger than that for the to the BIS quarterly series, but do not include the BIS quarterly series because the OECD collects customer claims on the assets side or custody data from Australia, Greece, New Zealand, and liabilities other than bank-issued paper. Portugal, which are not in the BIS reporting In addition to the geographical breakdown of system. foreign claims and liabilities, the published Treasury statistics include breakdowns by type of U.S. STATISTICS claim or liability and by type of customer, including banks' own related offices abroad (foreign The United States produces three series of data affiliates of U.S. banks and head offices and on bank lending to foreign borrowers. One is a other affiliates of U.S. offices of foreign banks), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Lending by Banks: A Guide to International and U.S. Statistics 691 Basic characteristics of selected series on foreign lending by banks Internationa] sources U.S. sources' Characteristic BIS BIS FEDERAL Country quarterly2 semiannual3 IMF Treasury RESERVE Exposure BULLETIN Lending Survey Location or headquar- Industrial coun- Industrial coun- 136 member United States United States United States ters of banks cov- tries, offshore tries, offshore countries plus ered centers centers4 Switzerland Basis of coverage Location Nationality Location Location Nationality Nationality Geographical break- Yes Yes Yes Yes Yes Yes down of borrowers Claims on banks and Yes No Yes Yes No Yes nonbanks separately Currency composition Yes No No Yes5 No No Maturity profile No Yes No Yes No Yes Sectoral breakdown of No Yes No Yes No Yes borrowers Reallocation of risk No No No No No Yes Unutilized commit- No Yes No No No Yes ments Publication International Maturity International Treasury Table 3.21 Statistical Banking Distribution of Financial Bulletin', Release Developments.; International Statistics FEDERAL E.16 (126) International Bank Lending RESERVE Banking and BULLETIN, Financial tables 3.18-3.206 Market Developments Reporting frequency Quarterly Semiannual Monthly Monthly Quarterly Quarterly 1. Several countries besides the United States publish data on 2. Besides the series detailed here, the BIS publishes a quarterly foreign lending by banks. interbank series, which first appeared in International Interbank The United Kingdom has a semiannual series on cross-border Market, published in 1983, and has subsequently been included claims of banks registered in the United Kingdom. The banks file on a occasionally in the same publication as the quarterly data, worldwide consolidated basis a report that includes a maturity profile, 3. Besides the series detailed here, BIS prepares statistics with the type of borrower, reallocations of risk because of guarantees and the Organisation for Economic Co-operation and Development. They like, and unused commitments. The series is published in Bank of appear semiannually in Statistics on External Indebtedness: Bank and England, Quarterly Bulletin, table 15. Trade-Related External Claims on Individual Borrowing Countries A series on the external assets and liabilities of domestic banks in and Territories, which the two organizations publish jointly. See text Germany and (separately) of the foreign branches of domestic banks for details. appears in Deutsche Bundesbank, Monthly Bulletin, Statistical Sup- 4. Banks in offshore centers include only affiliates of banks headplement Series 3. Overall data and the breakdown by maturity are quartered elsewhere in the BIS reporting area. The series also covers monthly, and the geographical breakdown is quarterly. local offices of banks headquartered outside the BIS reporting area. The foreign assets and liabilities of banks in Switzerland on year- 5. Only a breakdown between dollars and all other currencies end dates are shown in Swiss National Bank, Das Schweizerische combined. Bankwesen in Jahre 19—, published annually. There is a detailed 6. Details shown in the two publications differ, country breakdown together with a bank-nonbank breakdown. nonrelated foreign banks, official institutions, foreign banks, showed only the geographical public borrowers, and other nonbanks. distribution of the foreign lending at the U.S. offices; it did not show the large amount at the FEDERAL RESERVE BULLETIN Series foreign offices of those banks, which in fact formed more than one-half of total foreign lend- Foreign lending by banks chartered in the United ing by U.S.-chartered banks. States grew rapidly in the 1960s and early 1970s. It was in these circumstances that the Federal But at that time its geographical distribution was Reserve instituted a new report by foreign unknown. The Treasury series, when shorn of branches of U.S. banks, to be filed quarterly the claims of U.S. branches and agencies of beginning with data for December 1975. This Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin • October 1986 report (FR 2502S) shows the geographical distri- ing supervision, it is highly desirable to know the bution of the assets and liabilities of all foreign maturity profile of the claims, the types of borbranches of U.S. banks above a certain minimum rowers, the amount of undisbursed credit comasset size of branch (at present $150 million). mitments, and (in the cases of foreign affiliates) Several years earlier the Federal Reserve had whether the borrower is cross-border or local initiated a monthly report from foreign branches and whether the claim is denominated in a forthat provided data on types of customers but eign currency or the local currency. Furthergave no geographical breakdown of the more, banking supervisors seek to measure a branches' lending and deposit-taking activity. bank's exposure to a particular country—that is, Combining the Treasury data for the U.S. claims on that country adjusted for guarantees or offices of U.S. banks with the Federal Reserve other considerations that shift the risk of nonpaydata for the foreign branches of those banks ment of principal or interest from the borrower to makes it possible to observe the country break- another party in a different country. down of a large part of the total foreign lending of The Country Exposure Report was initiated on U.S.-chartered banks on an unconsolidated ba- a permanent basis in December 1977 to provide sis; the only missing element is the lending by information of the kinds just mentioned. It is those banks' foreign subsidiaries, which is far administered by the Federal Financial Institusmaller than that of the foreign branches, though tions Examination Council, which represents the still significant. The combined lending can be Comptroller of the Currency, the Federal Deposadjusted to approximate a consolidated basis it Insurance Corporation, and the Board of Gov- (excluding the subsidiaries) by deleting the ernors of the Federal Reserve System. Initially, claims of the U.S. parent banks on their foreign the report was filed for June and December, but branches and the claims between foreign it became quarterly beginning with data for branches of the same bank using information March 1984. It is filed by all U.S.-chartered from the monthly branch reports.2 banks (including U.S. subsidiaries of foreign Publication of the combined data for U.S. banks) that have at least $30 million in consolioffices and foreign branches, for claims only, dated claims on non-U.S. residents and that have started in June 1979 with figures going back to at least one foreign branch or foreign subsidiary. December 1975, when the series began. These Its information is on a worldwide consolidated published data have been put on a consolidated basis covering domestic offices, foreign basis by eliminating claims between offices of the branches, and majority-owned foreign subsidiarsame bank. ies. No data on liabilities are collected. The Country Exposure Lending Survey The Country Exposure Lending Survey (CELS) aggregates across banking institutions and makes public much of the information col- Although the FEDERAL RESERVE BULLETIN se- lected on the Country Exposure Report.3 The ries meets an important need, it has the short- CELS includes all cross-border claims of the coming that it supplies only a single, overall reporting banks, and claims of foreign affiliates figure for claims by U.S. banks on each borrow- on local borrowers that are denominated in a ing country. For many purposes, including bank- foreign currency. But the main body of the CELS, the country-by-country breakdown of claims, does not include claims of foreign affili- 2. In combining data on foreign branches with those on ates on local borrowers in local currency, aldomestic offices, measures of foreign claims (or liabilities) are though these data are collected; on a worldwide obtained in connection with which the term "foreign" has a meaning somewhat broader than the usual one. On the claims side, for example, the claims of foreign branches include claims on residents of the country where the branch is 3. In addition, individual reporting banks file Country located, as well as on residents of other countries. The former Exposure Information Reports for large exposures to individare not foreign (cross-border) from the standpoint of the ual countries as reported on their Country Exposure Reports. branch, but they are foreign from the standpoint of the These reports are available to the public at the Freedom of headquarters of the bank because the borrowers are not U.S. Information Office of the Board of Governors of the Federal residents. Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Lending by Banks: A Guide to International and U.S. Statistics 693 basis, their total was $107 billion in March 1986, U.S.-chartered banks' foreign claims, or 27 percent of all reported claims. The data on FEDERAL RESERVE BULLETIN series and CELS, December 31, 1985 cross-border claims constitute the U.S. submission to the BIS semiannual series as concerns Billions of dollars domestically owned banks. Country Country group BULLETIN Exposure The main body of the CELS breaks down the series Lending Survey other 73 percent of total claims (that is, all cross- Non-OPEC developing border claims and claims of affiliates that are in countries 105.5 other than local currency) into three categories Argentina 8.9 Brazil 25.7 of time remaining to maturity—one year and Mexico 23.9 Korea 9.5 under, over one to five years, and over five All others 37.5 years—and by three categories of borrowers— OPEC countries 21.8 banks, public borrowers, and private nonbank Eastern Europe1 4.2 Smaller developed borrowers. The total of these claims on each countries 30.5 G-10 countries 150.5 country is also shown, together with the adjust- Offshore banking ments needed to derive the reporting banks' centers 67.2 Others and unallocated 17.2 exposure to that country. The adjustments are Total 396.9 294.5 partly for guarantees extended either in favor of borrowers in that country by guarantors in other 1. Includes Yugoslavia. countries (thereby reducing exposure to that country), or by guarantors in that country in foreign subsidiaries from the institutional coverfavor of borrowers in other countries (thereby age of the BULLETIN series may have a net effect raising exposure to that country). Another ad- in either direction. Claims in the BULLETIN sejustment is to shift claims on the foreign ries include claims on foreign subsidiaries, which branches of foreign banks from the country are netted out in the CELS, but at the same time where the branch is located to the country where the BULLETIN series does not capture the claims the parent is located. Finally, the CELS shows held by foreign subsidiaries on unaffiliated borcontingent claims (undisbursed credit commit- rowers, which are included in the CELS totals. ments), with various details. A breakdown of all the information noted above for three groups of SOME PROBLEMS OF INTERPRETATION banks—the nine largest, the next fifteen largest, and all others—reveals the concentration of lend- With respect to all the statistics of foreign bank ing by bank size. lending, a problem of interpretation of the Because of the differences in the way they are changes in claims has emerged in recent years. determined, total claims on a given country or The amount of reported claims on a particular country group shown in the main body of the country may change because of net new lending CELS will almost always differ somewhat from to that country or net repayments by it. And, as the corresponding figure in the FEDERAL RE- noted earlier, it may change because of changes SERVE BULLETIN series (see table 5 for a compar- in the exchange rates between the currencies of ison). Two factors tend to make claims in the denomination and the currency in which the BULLETIN series larger than those in the CELS. values are expressed in the statistics. But it may First, the number of reporters in the former is also change because lending banks write off larger because it includes some banks that have claims on borrowers when the prospects of reno foreign affiliate and are thereby exempted payment are poor. Write-offs of foreign loans from filing the Country Exposure Report. Sec- have become much more prevalent in the last ond, the BULLETIN series includes foreign- several years, when prospects of repayment of branch claims on local borrowers denominated in some claims on developing countries, especially local currency, a type that can loom large in total on private borrowers, have worsened. Tax moticlaims on some countries, mostly the industrial vations for write-offs are important in some ones. However, the omission of majority-owned countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin • October 1986 It is impossible to estimate the effect of write- developing countries to be repaid on schedule offs on the international banking statistics. Esti- that otherwise would have remained on the mates suggest that U.S. banks wrote off about books (unless and until written off or repaid). $2.4 billion of foreign claims in 1983-84 and The exercise of such guarantees affected more another $2.2 billion in 1985; of these totals, about than $800 million of claims on non-OPEC devel- $1.3 billion and $0.9 billion respectively was in oping countries in 1983-84. Write-offs, debtclaims on non-OPEC developing countries. U.S. equity swaps, and the exercise of official guaranbanks' foreign claims have also been reduced by tees reduce banks' reported claims but do not sales of claims to foreign banks and (in small reduce debtors' liabilities. Thus the banking data amounts) by debt-equity swaps. Furthermore, may convey an inaccurate impression of the the exercise of loan guarantees by the Export- development of the external debt of individual Import Bank and the Commodity Credit Corpo- countries.. • ration allowed some claims of U.S. banks on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

695 Industrial Production Released for publication August 15 most business equipment industries continued. At 124.1 percent of the 1977 average, the total Industrial production edged down an estimated index was at about the same level as a year 0.1 percent in July after having declined 0.3 earlier and about 2 percent lower than its peak percent in June and 0.5 percent in May. Despite level in January 1986. strike-related rebounds, mainly in communica- In market groups, output of consumer goods tion equipment, activity remained generally slug- decreased 0.3 percent in July after a similar gish. Output of consumer goods and durable decline in June. Auto assemblies fell to an annual materials was off in July, and the weakness in rate of 7.6 million units from a rate of 8.0 million Ratio scale, 1977= 100 140 - - TOTAL INDEX 120 _ Products / — ——. - _ —' / 100 / — Materials 80 I i i I l l MANUFACTURING - 140 MATERIALS Durable — Nondurable.^'-' 120 ^ Nondurable^ - - 100 Durable \y Energy [ i ll I i 80 i i i 1 1 1 160 _ CONSUMER GOODS 140 INTERMEDIATE PRODUCTS Nondurable Business supplies 120 J 100 80 Construction supplies 120 240 IRON AND STEEL FINAL PRODUCTS 100 200 Defense and space 160 80 Business equipment 140 60 120 100 Consumer goods 40 1980 1982 1984 1986 1980 1982 1984 1986 All series are seasonally adjusted. Latest figures: July. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin • October 1986 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Group 1986 1986 JJJuuulllyyy 111999888555 tttooo JJJuuulllyyy June July Mar. Apr. May June July 111999888666 Major market groups Total industrial production 124.2 124.1 -.9 .7 -.5 -.3 -.1 .1 Products, total 132.0 131.9 -.7 .9 -.4 -.6 -.1 .2 Final products 131.0 130.9 -1.0 1.0 -.6 -.7 -.1 -.7 Consumer goods 124.2 123.9 -.5 1.8 -.1 -.3 -.3 3.1 Durable 113.7 113.6 -2.9 2.8 -2.5 .4 -.1 2.1 Nondurable 128.1 127.7 .3 1.4 .7 -.5 -.3 3.5 Business equipment.. 136.8 136.9 -1.4 .9 -1.3 -1.2 .0 -3.1 Defense and space... 179.3 179.5 1.0 .1 .2 .1 .1 3.2 Intermediate products.. 135.4 135.4 .0 .8 .4 -.3 .0 3.6 Construction supplies 122.7 123.2 .0 .8 .2 -1.6 .4 3.2 Materials 113.5 113.6 -1.3 .2 -.7 .1 .0 -.2 Major industry groups Manufacturing. 128.0 128.0 -.7 .8 -.2 -.5 .0 .8 Durable 126.4 126.3 -1.0 .6 -.8 -.8 .0 -1.2 Nondurable . 130.3 130.2 -.1 1.1 .6 -.1 .0 3.7 Mining 99.6 99.2 -2.5 -1.1 -1.6 -.3 -.4 -8.7 Utilities 111.6 111.4 -.2 .2 -.9 .2 -.2 .6 NOTE. Indexes are seasonally adjusted. units in June, but the decline was largely offset In industry groups, manufacturing output in by gains in production of light trucks. Production July was unchanged after having declined in May of home goods, which rose very rapidly in the and June. During the past year total manufaclatter part of 1985, edged down in July and is off turing increased only slightly as nondurables 4lA percent so far this year. Output of nondurable gained about 4 percent, but durables were reconsumer goods fell 0.3 percent last month. The duced more than 1 percent. Production at mines output of total business equipment was un- and utilities fell 0.3 percent further in July, and changed in July after substantial declines in May the output of mines, which includes oil drilling and June. Most business equipment groups de- and extraction, was almost 9 percent lower than clined except commercial equipment, which re- it was a year earlier. bounded 1.4 percent in July owing largely to a resumption of production in telephone equip- Revised indexes ment after the strike curtailment in June. Elsewhere in the equipment sector, the defense and In September revised indexes of industrial prospace component continued to edge up, while oil duction will be issued for the period from Januand gas well drilling was reduced again—but ary 1984 through mid-1986. The revision is based much less than in other recent months and with a on data that were unavailable at the time the negligible effect on overall industrial output. Pro- original estimates were made and it also incorpoduction of construction supplies rose 0.4 percent rates updated seasonal adjustment factors develin July after a drop of 1.6 percent in June. oped from data through 1985. The Federal Re- Materials production was little changed in July serve statistical release, Industrial Production as durable goods materials decreased while non- (G.12.3) for September 16, 1986, will contain the durable goods, such as chemicals and paper, as revised indexes both in seasonally adjusted and well as energy materials both rose. not seasonally adjusted form. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

697 Statement to Congress Statement by Martha R. Seger, Member, Board repaid—and many small businesses fail each of Governors of the Federal Reserve System, year. A successful loan proposal must persuade before the Subcommittee on Consumer Affairs the lender that the applicant is well qualified for and Coinage of the Committee on Banking, the credit requested. Finance and Urban Affairs, U.S. House of Rep- Obtaining credit is particularly difficult for resentatives, August 12, 1986. first-time business borrowers, who not only must contend with managing the business and keeping I appreciate the opportunity to appear before this it afloat but also with making their way through subcommittee to discuss H.R. 1575, a bill to the credit process. There is need for strong amend the Equal Credit Opportunity Act practical advice on the application process. And (ECOA) relative to business credit transactions. sometimes women and minority applicants may Access to credit is an area in which I have a be concerned that they are receiving less favorstrong personal interest. Over the past two able treatment than other applicants, not for years, as a member of the Federal Reserve Board credit-related reasons, but because of their sex, I have had the opportunity to meet with a variety race, or marital status. Thus, there is need also to of groups throughout the United States. Many of ensure that applicants know about their rights them have been women's groups and organiza- under the Equal Credit Opportunity Act, a law tions of small business owners, and one recurring that ensures them equal treatment in the credit theme in these meetings has been access to credit market. for small businesses. In today's business climate, The proposed legislation, H.R. 1575, seeks to the availability of credit is critical, particularly to address these concerns about access to credit by increasing numbers of women business owners. amending the ECOA regarding business credit. There are about 3.2 million businesses owned by The Federal Reserve Board too is working towomen in the country today, according to a ward improving access to credit by launching a study by the Department of Commerce, and two special educational effort. The Board recently out of three new businesses are started by wom- completed the first step of this project, conen. ceived almost a year earlier, by publishing A Access to credit is essential to all small busi- Guide to Business Credit and the Equal Credit ness enterprises. They need capital to become Opportunity Act. The Guide takes what we beestablished and to grow, and must depend not lieve to be a useful approach, offering practical only on the resources of their owners but also on advice to entrepreneurs on the loan application the credit market. And, they represent an impor- process and on the preparation of an effective tant sector in our economy: data from the U.S. loan proposal. In drafting it, we had expert Small Business Administration (SBA) show that counsel from a number of sources. Industry small business establishments with fewer than groups—the National Association of Bank Wom- 100 employees have accounted for more than en, the American Bankers Association, the Conhalf our net employment growth in recent peri- sumer Bankers Association, the Independent ods. Bankers Association of America, and the Na- Yet obtaining credit can be a difficult process. tional Bankers Association—participated in its Lenders are selective in granting loans. They development, as did the Small Business Adminhave to be: they are not investors, and they have istration. We were fortunate also to have an obligation to their stockholders and deposi- the active participation of representatives from tors to be sure that the loans they make will be the National Association of Women Business Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin • October 1986 Owners (NAWBO), who brought to the project conducting a second public hearing. There is no the viewpoint of the business owner as credit comparable "sunset" provision in the current applicant. law. We believe that this Guide will go a long way 3. The legislation would permit Board exceptoward facilitating the credit application process tions only in the area of business or commercial for the business owner and for those who aspire transactions. Existing law also authorizes the to own their own businesses. Having published Board to grant exceptions for other classes of it, we are now making every effort to see that the transactions. Regulation B now provides certain Guide reaches its intended audience. The Board exceptions for extensions of securities credit, is sending copies to all members of NAWBO, as public utility credit, and incidental credit—catewell as to a variety of other organizations of gories that may essentially be consumer in nawomen business owners, minority group entre- ture, but for which exceptions have been found preneurs, and business owners generally, and to be appropriate. H.R. 1575 appears to prohibit will be making other distributions through the the Board from granting any exceptions for ex- Reserve Banks. The SB A has plans for wide tensions of credit for personal, family, or housedistribution of the pamphlet in response to calls hold purposes, and thus would require eliminafrom business owners. (They receive approxi- tion of these existing exceptions. mately 50,000 calls annually on SBA's toll-free "Answer Desk" telephone line, many of them As the Board indicated in a letter to the dealing with requests for help on access to busi- Congress last November (commenting on a comness credit.) The banking trade associations are panion bill, S. 1486), we do not favor the enactsending copies to their member institutions to let ment of these changes to the ECOA. We believe them know of its availability. In addition, we that the legislation would not significantly enhave enlisted the support of the other banking hance or improve the Board's rule writing procregulators. By involving all parties to the credit esses. While holding a public hearing before process in this educational effort, we hope to granting or continuing any exception for business achieve success in improving the availability of credit would provide an extra information-gathcredit to women and minority entrepreneurs and ering effort, we have found that written public in ensuring full compliance with the ECOA. comment, which always takes place as part of As noted earlier, the proposed legislation, the Board's rulewriting process, is both useful H.R. 1575, is directed also toward improving and more than adequate. And, the periodic reaccess to credit for women and minorities. It evaluation of regulatory provisions called for by seeks to do so by amending the ECOA with the bill is a procedure that we already follow regard to the Board's rule writing authority and under the Board's Regulatory Improvement Proimplementation of the business credit excep- ject, a program calling for the review of regulations. tions every five years or so. This Board program The three major provisions are as follows: complies with the Regulatory Flexibility Act, which requires that federal agencies make a 1. The legislation would direct the Board to periodic review of all regulations. hold public hearings in accordance with the In exercising its statutory authority to write Administrative Procedure Act (APA) as a pre- regulations, the Board has sought to ensure that condition to determining whether any exception business credit applicants enjoy the full protecin the business credit area would be granted or tions provided by the ECOA. Consequently, no continued. Under existing law, the Board may class of transactions—of whatever type or size— make such a determination within the rulemaking is exempt from the ECOA or Regulation B. requirements of the APA, but without the re- Lenders are barred from discriminating against quirement for a public hearing. business applicants in any aspect of a business 2. Any exception granted by the Board for credit transaction just as they are in a consumer business credit would terminate after five years; credit transaction. the Board could only extend the exception by Under the ECOA and Regulation B, in busi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 699 ness as in consumer credit, lenders may not take of course, obviates the need for the written into account the applicant's race, national origin, statement that consumer applicants receive tellsex, marital status, or any of several other pro- ing them that they are entitled to know the hibited bases. Lenders are subject to all the reasons for the denial. limitations concerning an evaluation of the appli- The second exception for business credit percant's creditworthiness. For example, in the case tains to record retention. Lenders are required to of a business applicant who is married, the retain business records for only 90 days, and not creditor may not, as a general rule, ask about or the 25-month period applicable in consumer take into consideration information about the transactions. However, if the business credit applicant's spouse unless that individual has applicant requests, the lender is required to some connection to the business. Similarly, all retain the records for the full 25 months. Record the restrictions of Regulation B dealing with the retention for the longer period is not automaticalsignature of a cosigner—whether it be the spouse ly required because the documentation for busior some other person—apply in the business ness credit applications can be quite volumicredit transaction. nous—much more so than in consumer credit Some limited exceptions do exist in the busi- applications. For example, the documentation ness credit area. These exceptions were adopted may include business projections, financial stateby the Board after extensive notice and com- ments (both personal and for the business), ment. They are not so broad as some people copies of income tax returns, itemizations and appear to believe and are directly related to the descriptions of collateral, certificates of incorpopractical distinctions between consumer credit ration, partnership agreements, invoices, vender and business credit. quotes, and the like. In addition, this documenta- First, there are the rules dealing with the tion is costly for the applicant to produce and is notification given when credit is denied. Under often returned, upon request, to the applicant. the regulation the consumer applicant has the The third exception for business credit has to right to notice of the creditor's granting or denial do with inquiries about martial status. In conof an application; so has the business applicant. sumer credit transactions, creditors are prohibit- The consumer applicant has the right also to ed by Regulation B from asking about marital receive a statement of the principal reason or status in applications for unsecured credit, but reasons for the denial; so has the business appli- may ask about marital status in secured transaccant. And each applicant has the right, upon tions (to ascertain whether under state law the request, to receive a written statement of those spouse might have an interest in the property). reasons. Under the Board's regulation, business credit The difference between the two transactions is applicants may be asked for this information that the consumer applicant receives a written regardless of whether the credit is secured or statement either of the reasons, or of the right to unsecured. request the reasons, whereas the business appli- However, most business credit is secured by cant does not automatically receive a written business and personal assets. As a matter of fact, notice of that right. This exception in the notifi- therefore, the lender could properly inquire cation rules reflects the close personal contact about marital status in most cases—even if the that generally marks the business credit applica- business credit exception were eliminated. tion process. Lenders are a valuable source of Again, even in cases in which the creditor is business and financial counsel to business credit permitted to ask about marital status, the crediapplicants. They commonly discuss the loan tor may not deny credit based on marital status proposal with business credit applicants in per- (or any prohibited basis), or take it into account son, and if credit is denied will have the opportu- in setting the account terms. nity to explain the reasons for the denial, in The Board recognizes and appreciates the difdetail, and to address the elements of the loan ficulty that small business applicants generally proposal that will need to be strengthened before and some women and minorities, in particular, the application can be approved. This procedure, may be experiencing in obtaining business credit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin • October 1986 But we also believe that the ECOA and Regula- credit. We will continue to publicize actively the tion B in their present form provide an adequate availability of the Guide to Business Credit and legal basis for protection against credit discrimi- the ECOA and the message it contains: that nation and that the exceptions established are business credit is not exempt from the ECOA. sufficiently narrow in scope, carefully written, Besides the distribution efforts previously menand directly responsive to the distinctions be- tioned, for example, we are also investigating the tween consumer and business credit. use of public service announcements to increase We expect that our joint effort with industry the potential for reaching the widest possible and women's and minority group organizations audience. We would like to give these efforts a will serve to better inform business credit appli- chance to succeed before considering any cants of their rights under the ECOA, besides amendments to the regulation or reopening rulegiving them practical assistance in obtaining making on the business credit exceptions. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

701 Announcements MANUEL H. JOHNSON.- APPOINTMENT member of the Board of Governors. Dr. Heller AS VICE CHAIRMAN OF THE was subsequently confirmed by the Senate on BOARD OF GOVERNORS August 16 and took the oath of office, administered by Chairman Volcker, on August 19. On May 12, 1986, President Reagan announced The text of the White House announcement of his intention to nominate Governor Manuel H. May 12 follows: Johnson to be Vice Chairman of the Board of Governors. Governor Johnson was subsequently The White House confirmed by the Senate on August 2 and took Office of the Press Secretary the oath of office, administered by Chairman Volcker, on August 22. May 12, 1986 The text of the White House announcement of May 12 follows: The President today has announced his intention to nominate H. Robert Heller of California, District 12, to be a Member of the Board of Governors of the The White House Federal Reserve System for the unexpired term of Office of the Press Secretary fourteen years from February 1, 1982. He would succeed Preston Martin. May 12, 1986 Since 1978 Dr. Heller has been Senior Vice President and Director of International Economic Research at Bank of America, San Francisco, California. Previ- The President today announced his intention to nomiously, he was Chief, Financial Studies Division, Internate Manuel H. Johnson of Virginia to be Vice Chairnational Monetary Fund, Washington, D.C., 1974-78; man of the Board of Governors of the Federal Reserve Professor of Economics, University of Hawaii, 1971- System for a term of four years. He would succeed 74; and Assistant and Associate Professor, University Preston Martin in his capacity as Vice Chairman. Mr. of California, Los Angeles, 1965-71. Johnson has served as a Member of the Board of Dr. Heller graduated from Parsons College, B.A., Governors since February 7, 1986. 1961; the University of Minnesota, M.A., 1962; and Dr. Johnson has served as Assistant Secretary for the University of California, Berkeley, Ph.D., 1965. Economic Policy at the Department of the Treasury, He is married, has two children, and resides in Mill 1982-86 and previously served as Deputy Assistant Valley, California. Dr. Heller was born January 8, Secretary for Economic Policy, 1981-82. Dr. Johnson 1940, in Cologne, Germany. was an Associate Professor of Economics at George Mason University in Fairfax, Virginia, 1980-81, and an Assistant Professor of Economics, 1977-80. He was an instructor and research associate at Florida State University in the Department of Economics, 1973-76. CHANGE IN THE Dr. Johnson graduated from Troy State University, DISCOUNT RATE B.S., 1973; Florida State University, M.S., 1974; and Ph.D., 1977. He is married, has two children and The Federal Reserve Board announced a reducresides in Fairfax, Virginia. He was born February 10, 1949, in Troy, Alabama. tion in the discount rate from 6 percent to 5V2 percent, effective on Thursday, August 21. In the light of prevailing economic and finan- H. ROBERT HELLER.- APPOINTMENT AS A cial circumstances, the action appears consistent MEMBER OF THE BOARD OF GOVERNORS with the objective of sustaining orderly growth within a framework of greater price stability. On May 12, 1986, President Reagan announced The Board acted on requests submitted by the his intention to nominate H. Robert Heller as a Boards of Directors of the Federal Reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Federal Reserve Bulletin • October 1986 Banks of Boston, New York, Cleveland, Rich- FINANCIAL RESULTS AVAILABLE mond, Atlanta, Chicago, Minneapolis, Kansas FOR PRICED SERVICE OPERATIONS City, Dallas, and San Francisco. (The Board subsequently approved similar actions by the The Federal Reserve Board has reported finan- Federal Reserve Banks of Philadelphia and St. cial results of Federal Reserve priced service Louis, effective Friday, August 22.) operations for the quarter ending June 30, 1986. The discount rate is the interest rate that is The Board issues a report on priced services charged depository institutions when they bor- annually and a priced service balance sheet and row from their District Federal Reserve Banks. income statement quarterly. The financial statements are designed to reflect standard accounting practices, taking into account the nature of the Federal Reserve's activities and its unique NEAR-TERM CONTINGENCY SUPPORT position in this field. FOR MEXICO'S RESERVES The U.S. Treasury and the Federal Reserve announced on August 27, 1986, their participa- PROPOSED ACTIONS tion in completed arrangements to provide a $1.6 billion facility for near-term contingency support The Federal Reserve Board has issued for public for Mexico's international reserves. The official comment a proposal to amend its Regulation E component of the facility is $1,100 million; the (Electronic Fund Transfers). The proposal would remaining $500 million will be provided through a eliminate the periodic statement requirement for parallel arrangement by a group of international providers of EFT services that do not hold commercial banks. Up to $850 million of the consumer accounts, such as retailers, and would official component will be available to Mexico make other changes to ensure consumer protecimmediately if needed. tions. Comment is requested by October 10. Of these amounts, the U.S. monetary authori- The Federal Reserve Board also issued for ties will provide $545 million in cooperation with public comment a proposal to amend its Regulathe Bank for International Settlements—acting tion Z (Truth in Lending) to exclude some refiwith the support of the central banks of the other nancings by a creditor, other than the original Group of Ten countries and Spain—and with the creditor, from the right of rescission. Because of central banks of Argentina, Brazil, Colombia, the large volume of refinancings, the Board expeand Uruguay, which will together provide the dited its comment period procedures. Comment balance of $555 million. The U.S. Treasury De- was requested by September 10, 1986. partment, through the Exchange Stabilization Fund, will provide $273 million and the Federal Reserve will provide $272 million through swap arrangements. CHANGES IN BOARD STAFF This facility is being made available in light of the agreement between the United Mexican The following changes were announced in the States and the managements of the International Board's Division of Consumer and Community Monetary Fund and World Bank on a growth- Affairs: Jerauld C. Kluckman, Associate Direcoriented economic program. Any drawings on tor, Division of Consumer and Community Afthe official component are to be repaid from fairs, retired effective August 31, 1986; Ellen disbursements by these two international institu- Maland has been appointed Assistant Director. tions. Any drawings on the commercial bank Ms. Maland joined the Board's staff in August portion are to be repaid from disbursements by 1976 and spent four years as an attorney before commercial banks under the more permanent becoming Chief of Regulations Section I in July financing arrangements for Mexico now being 1980. She has a J.D. from the University of formulated. Texas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 703 The Board also announced that Mr. William C. ship in the Federal Reserve System during the Schneider, Assistant Director in the Division of period August 1 through August 31, 1986: Applications Development and Statistical Services, resigned, effective September 5, 1986. Texas Austin MBank Aboretum Virginia SYSTEM MEMBERSHIP: ADMISSION OF Manassas Security Bank Corporation STATE BANKS The following banks were admitted to member- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON JULY 8-9, 1986 manufacturing was 78.6 percent in May, off 0.6 percentage point from April and more than 2 Domestic Policy Directive percentage points from January. Total retail sales were about unchanged in The information reviewed at this meeting indi- May; however, sales at the retail control group of cates that economic activity has expanded at a stores, which excludes outlets for autos, gasorelatively slow pace recently. Consumer spend- line, and building materials, rose somewhat and ing and housing activity have been strong, re- were stronger in the previous two months than flecting large gains in real income and lower originally reported. Total car sales in May were interest rates. However, business investment has at an annual rate of 11V4 million units, up from remained sluggish, and the trade balance has the 103/4 million unit pace registered in the first continued to deteriorate. At the same time, wage quarter. Sales of domestic automobiles have held and price increases have been moderate. at around a rate of 8V4 million units since the Total nonfarm payroll employment grew slow- expansion of incentive financing programs in late ly again in June, rising about 80,000 after adjust- April, up from the 73/4 million unit pace earlier in ing for strike activity. Employment continued the year. falling in manufacturing, particularly in the met- Housing activity generally has been brisk. als and machinery industries, and more jobs Starts fell a little in May but still were at a 1.9 were lost in oil and gas extraction. Hiring in million unit annual rate. Single-family starts held construction, which had surged in April, leveled steady at a level that was fractionally above the off in May and fell in June. Service industries first-quarter average, while the pace of house continued to post large gains in employment in sales, although down in May, has remained rela- June; however, hiring at retail establishments tively robust. At the same time, home prices was markedly slower than earlier in the year. have risen sharply. Multifamily starts fell sharply The civilian unemployment rate declined to 7.1 in May, owing in part to the depletion of taxpercent from 7.3 percent in May. exempt funds raised by huge issues of mortgage The index of industrial production fell 0.6 revenue bonds in late 1985 and to overbuilding in percent in May and has declined VA percent a number of major markets. since December, erasing the gains that occurred Business investment probably declined again at the end of 1985. The decrease in output in May in the second quarter, reflecting weakness in the was related in part to a further contraction in oil energy sector, the availability of unutilized caand gas drilling and to a decline in auto assem- pacity, and concerns about tax reform. Shipblies. Output elsewhere generally was lower with ments of nondefense capital goods have been notable weakness in the production of business sluggish in recent months. In the construction equipment and selected materials for durable area, drilling activity has fallen sharply further, goods. Available indicators of industrial activity and spending for office and other commercial in June are mixed; auto assemblies are expected projects also has weakened. Moreover, advance to have increased, but the output of steel de- indicators of investment spending have been creased and strike activity hampered production weak. New commitments for nonresidential in the lumber, aluminum, and communication building have fallen since late last year, and new equipment industries. Capacity utilization in orders for nondefense capital goods were flat in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

705 May after two months of declines. In addition, the same period, Ml was anticipated to grow at according to the latest surveys, businesses are an annual rate of 12 to 14 percent, although the planning little, if any, increase in nominal spend- members acknowledged that the behavior of Ml ing for 1986 as a whole. continues to be subject to unusual uncertainty. The producer and consumer price indexes The Committee agreed that if money growth did turned up in May, as the steep decline in energy not slow as anticipated, somewhat greater reprices ended. Producer prices rose 0.6 percent, serve restraint would be acceptable in the conafter declining in the previous four months. Con- text of a pickup in the economic expansion, sumer prices were up 0.2 percent; retail gasoline while also taking account of conditions in domesprices rose 2xh percent, after falling around 25 tic and international financial markets and the percent from January to April. Excluding food behavior of the dollar on foreign exchange marand energy, the CPI has risen at an annual rate of kets. On the other hand, they agreed that someabout Vh percent so far this year, somewhat less what lesser restraint might be acceptable if the than in 1985. Prices of goods have been essential- expansion weakened noticeably in conjunction ly flat, while some types of services have regis- with a marked slowing in monetary growth. The tered large increases. intermeeting range for the federal funds rate was The trade-weighted value of the dollar against reduced to 5 to 9 percent. major foreign currencies has declined almost 2Vi In the circumstances, Ml continued to expand percent on balance since the FOMC meeting on rapidly over the past two months, with growth May 20; the largest decline was registered surging to an annual rate of around 23 percent in against the yen. In the first two weeks of the May before decelerating to a rate of about 15 intermeeting period, the dollar appreciated percent in June. Consequently, growth in Ml somewhat in response to data indicating a possi- from March to June, at an annual rate of almost ble strengthening of U.S. economic activity. This 18 percent, substantially exceeded the Commitrise was subsequently reversed when additional tee's short-run expectations and so far this year information on the economic performance in the has been well above the Committee's 3 to 8 United States disappointed market expectations. percent range for 1986. Growth in M2 slowed in The differential between U.S. interest rates and a both May and June but was still somewhat above weighted average of foreign short-term interest earlier expectations for the quarter and brought rates changed little on balance over the period. this aggregate up to around the midpoint of its Preliminary data for the U.S. merchandise trade range for the year. M3 continued to increase at deficit showed a somewhat larger deficit in April rates around the middle of its long-run range in than the average for the first quarter because a May and June. decline in the value of oil imports was more than However, in the light of the clear indications offset by an increase in imports of other goods; that business activity, rather than picking up exports in April-May combined seem to have momentum, was growing at a slower pace, open been no higher than the first-quarter rate. market operations during the intermeeting period At its meeting on May 20, 1986, the Committee continued to be directed at maintaining the prehad adopted a directive that called for maintain- vailing degree of pressure on reserve positions. ing the existing degree of pressure on reserve In the three complete maintenance periods since positions. The members expected such an ap- the May meeting, adjustment plus seasonal borproach to policy to be consistent with a decelera- rowing at the discount window averaged $285 tion in money growth over the balance of the million. Excess reserves averaged around $830 quarter. However, because such growth had million in the first two maintenance periods after been rapid in April and early May, the Commit- the meeting, but then rose to $1.3 billion in the tee anticipated faster growth for the quarter as a most recent period, which included the quarterwhole, particularly for Ml, than was expected at end statement date. the time of the April meeting. M2 and M3 were Federal funds generally traded in a narrow expected to expand over the period from March range around 67/s percent over the intermeeting to June at annual rates of 8 to 10 percent. Over period, aside from some firming around the quar- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706 Federal Reserve Bulletin • October 1986 ter end. Other interest rates rose early in the prospective pickup in the rat« of economic period but then retreated amid signs of weakness growth and, in particular, the absence thus far of in the economies of the United States and some any apparent improvement in the balance of of its major trading partners, renewing expecta- trade, which many members saw as the key to tions of a discount rate cut in the near future. stronger economic expansion. The members Since the May meeting short-term market rates continued to view the outlook for inflation as had declined 10 to 40 basis points on balance. In relatively favorable, although they anticipated long-term markets, yields on Treasury securities that, in the context of a growing economy, the were down about 35 to 45 basis points, while lagged impact of the dollar's depreciation was rates on corporate and municipal bonds were likely to boost prices somewhat. about unchanged and those on fixed-rate mort- In keeping with the usual practice at meetings gages were up around Vi of a percentage point. when the Committee considers its long-run ob- The widening spread between rates on long-term jectives for monetary growth, the members of private securities and Treasury issues appeared the Committee and the Federal Reserve Bank to reflect strong foreign demand for recently presidents not currently serving as members issued long-term Treasuries, large supplies of prepared specific projections of economic private securities, and increased focus on the growth, the rate of unemployment, and changes value of the greater call protection for Treasury in the overall price level. With regard to the rate issues. of expansion in real GNP, the projections had a The staff projections presented at this meeting central tendency of 2Vz to 3 percent for 1986 as a continued to suggest that growth in real GNP, whole and 3 to 3Vz percent for 1987. Forecasts of though relatively slow in the second quarter, was growth in nominal GNP centered on ranges of 43A likely to strengthen somewhat in the second half to 53/ percent for 1986 and 6 to IVz percent for 4 of the year. However, growth over the next two 1987. The central tendency for the rate of unemquarters probably would be at a slower pace than ployment was an average of 7 percent in the had been expected earlier in part because news fourth quarter of 1986 and around 63/4 percent in on business investment and foreign trade was the fourth quarter of 1987. With respect to the disappointing. Growth was projected to continue rate of inflation, as indexed by the GNP deflator, at a moderate pace in 1987. The civilian unem- the projections centered on rates of 2V* to 23/4 ployment rate was forecast to decline somewhat percent for 1986 and 3 to 4 percent for 1987. In over the projection horizon. Inflation was ex- making these forecasts, the members took acpected to pick up a bit over the next six quarters, count of the Committee's objectives for moneas the favorable effects of declining energy prices tary growth that were established at this meeting. diminished while upward pressure on prices from The projections were based on the assumption the effects of the dollar's depreciation tended to that fluctuations over the projection period in the intensify. foreign exchange value of the dollar would not be In their discussion of the economic situation of sufficient magnitude to have a significant and outlook, Committee members generally effect on economic activity or prices during the agreed that some strengthening in the economic period. The members also assumed that the expansion was a reasonable expectation for the Congress would seek to achieve the deficit resecond half of the year and that, on the whole, ductions contemplated by the Gramm-Rudmanthe prospects were favorable for continuing Hollings legislation. In the members' views, siggrowth at a moderate pace in 1987. At the same nificant progress in reducing the federal deficit time, members emphasized the uncertainties that was essential in order to maintain financial consurrounded the economic outlook and a number ditions that were conducive to sustained ecocommented that the improvement in economic nomic expansion and an improved pattern of activity might well be more delayed or less international transactions. pronounced than they had anticipated earlier. In In their assessment of the factors pointing to this connection, some members expressed con- somewhat faster economic growth over the balcern about the lack of firm evidence to date of a ance of the year and in 1987, members referred Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 707 as they had at earlier meetings to a number of trial nations abroad. Indications of such growth favorable underlying developments including re- were mixed, with several countries having expeduced interest rates, higher stock market prices, rienced relative weakness earlier in the year. The lower energy costs, and the positive impact of absence of more robust growth abroad—and an the dollar's depreciation on the competitive posi- improvement in the U.S. trade balance—would tion of U.S. businesses. Members also made constitute a major risk to the realization of reference to the stimulative impact of a broadly stronger domestic economic expansion. accommodative monetary policy, as evidenced At this meeting the Committee reviewed its by rapid growth in money and credit and several ranges for growth of the monetary and debt decreases in the discount rate. One member aggregates in 1986 and established tentative suggested that stimulative financial conditions ranges for 1987 within the framework of the Full probably helped to account for the relative lon- Employment and Balanced Growth Act of 1978 gevity of the current business expansion in the (the Humphrey-Hawkins Act).1 At its meeting face of a variety of unfavorable factors. The on February 11-12, 1986, the Committee had latter included the negative impact that the de- adopted monetary growth ranges of 3 to 8 percline in oil prices and the uncertainties associat- cent for Ml and 6 to 9 percent for both M2 and ed with pending tax reform legislation were cur- M3 for the period from the fourth quarter of 1985 rently exerting on investment activity; some to the fourth quarter of 1986. The associated members commented that both of these factors range for growth in total domestic nonfinancial were likely to have a less inhibiting impact on the debt was set at 8 to 11 percent. With respect to economy over the course of the next several Ml the Committee had recognized that, based on quarters. On the other hand, the overbuilding of the experience of recent years, the behavior of various commercial facilities, notably of office that aggregate was subject to substantial uncerstructures, in several parts of the country and tainties in relation to economic activity and severe problems in agriculture were deemed like- prices. The Committee had indicated its intenly to have retarding influences on economic tion to evaluate Ml behavior in the light of its activity that could persist. consistency with the other monetary aggregates, Such developments were reflected in sharp developments in the economy and financial marcontrasts in the economic performance of differ- kets, and potential inflationary pressures. ent sectors and regions of the country and in In the Committee's discussion of its long-run strains on financial institutions that serviced the ranges at this meeting, all of the members supdepressed industries. Moreover, members ex- ported a proposal to retain the range of 6 to 9 pressed concern about the continuing rapid percent for growth in M2 and in M3 for the year growth in total debt and its negative implications 1986. Both aggregates had expanded at rates that for sustained business expansion. left them close to the midpoint of their ranges at The members gave particular emphasis during midyear. Growth within these ranges for the year the discussion to the key role of foreign trade as a whole was still deemed to be consistent with developments, which were seen as a major the Committee's overall policy objectives. A source of uncertainty in shaping the economic majority of the members preferred a slightly outlook. The substantial depreciation of the dol- lower range for 1987. In their view, a modest lar against the currencies of several large indus- reduction would be consistent with the Committrial countries had strengthened the international tee's long-term objective of achieving a rate of competitiveness of U.S. businesses, notably in monetary growth compatible with price stability. the industrial sector, and pointed to eventual They also believed that the lower range was improvement in the U.S. trade balance. Unfortu- likely to prove fully consistent with somewhat nately, evidence of such improvement had proved elusive to date and several members commented that significant progress in reducing 1. The midyear Monetary Policy Report prepared pursuant to this legislation was transmitted to the Congress on July 18, the nation's trade deficit was unlikely in the 1986, and was published in the FEDERAL RESERVE BULLETIN absence of faster economic growth in key indusfor September 1986, pages 603-17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

708 Federal Reserve Bulletin • October 1986 faster economic growth in 1987 and, in that ed shifts in holdings of liquid assets in response context, with some decline in velocity should to declining interest rates and subsiding inflationthat develop. Some members suggested main- ary expectations rather than excessive money taining the 6 to 9 percent range for 1987 because creation with potentially inflationary conseit would provide a little extra leeway that might quences. Tending to reinforce that judgment was prove useful in support of continuing growth in the moderate growth in overall economic activinominal GNP, given the possibility of some ty, the behavior of broad measures of inflation, further decline in the velocity of the broader and the expansion of M2 and M3 at rates well aggregates. However, the slightly lower range within their ranges for the year. As events unfavored by the majority was considered accept- folded, relatively rapid growth in Ml had been able by most members. needed to accommodate continuing economic In the discussion of appropriate ranges for Ml expansion. Given developments for the year to growth in 1986 and 1987, the members gave date, growth in excess of the 3 to 8 percent range considerable emphasis to the exceptional uncer- established in February appeared likely for 1986 tainties that continued to affect Ml velocity. as a whole, but most of the members did not Over the course of recent years, the relationship want to raise or to rebase the existing range; such of Ml to income appeared to have been signifi- an adjustment might imply greater certainty cantly altered by changes in the composition of about future performance than in fact existed. the aggregate, resulting in part from the deregula- Since they believed that the significance of tion of interest rate ceilings and the relatively changes in Ml could only be evaluated in the rapid growth of its interest-bearing components. context of the behavior of the broader aggregates In the process, the demand for Ml balances has and against the background of economic and become much more sensitive to movements in financial developments, including trends in interinterest rates. Given the evolving nature of that est rates, they agreed that after taking account of demand, it had become very difficult to assess or those factors Ml growth above the existing range predict the implications of Ml growth for the would be acceptable for the year. future course of economic activity and the rate of With regard to 1987, some members argued inflation. As a consequence, a number of mem- that the uncertainties precluded setting a meanbers questioned the usefulness of Ml as a guide ingful range for Ml so far in advance, but a for the conduct of monetary policy under present majority preferred to retain this year's range of 3 circumstances. A few proposed dropping the Ml to 8 percent. The members noted that this range range, at least pending the reestablishment of a should be considered even more tentative than more predictable relationship with overall mea- usual. Such a range assumed that the velocity of sures of economic performance. A majority, Ml would not change as much as in the recent however, preferred to retain an Ml range even period under conditions of greater economic, though they believed its operational significance price, and interest rate stability. In any event the could only be judged in the perspective of con- members agreed that developments over the current economic and financial developments, balance of this year would provide a better basis including the behavior of M2 and M3. It was forjudging the prospects for Ml behavior in 1987 noted in this discussion that even under current and that careful appraisal of the range—including circumstances Ml continued to have some infor- the weight that Ml should receive as a guide to mation value for policy and that retention of policy—would be required at the start of next some range for Ml, even if used only as a year. benchmark for measuring deviations, might well Turning to the Committee's monitoring range assist judgments about monetary policy. More- for total domestic nonfinancial debt, most of the over, the importance of Ml could again become members indicated that they were in favor of greater in the future. retaining the 8 to 11 percent range adopted in After reviewing the available evidence, the February for 1986 even though growth in excess members concluded that much of the rapid of that range now appeared likely for the year. growth of Ml in recent months probably reflect- Members expressed concern about the persis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 709 tence of rapid growth of total debt in the context Given its rapid growth in the early part of the year, the of already large debt burdens. As in the past, Committee recognized that the increase in total domestic nonfinancial debt in 1986 may exceed its monithey felt that raising the Committee's range for toring range of 8 to 11 percent, but felt an increase in debt would create an inappropriate benchmark that range would provide an inappropriate benchmark for evaluating long-term trends in debt expan- for evaluating longer-term trends in that aggregate. sion. One member proposed dropping the range for total debt and substituting a measure for total Votes for this action: Messrs. Volcker, Corrigan, Angell, Guffey, Mrs. Horn, Messrs. Johnson, liquid assets, which, at least in the past year or Melzer, Morris, Rice, Ms. Seger, and Mr. Wallich. two, had had a closer relationship to develop- Votes against this action: None. Absent and not ments in nominal GNP. Other members pre- voting: None. ferred to continue to monitor debt trends explicitly in light of their concerns about the With respect to the tentative ranges for 1987, implications of overall debt levels. For 1987, the most of the Committee members supported a members generally felt that a range of 8 to 11 reduction of Vi percentage point in the ranges for percent for total debt growth would remain ap- M2 and M3. For Ml and total debt the members propriate, though that range would need to be agreed that with the reservations noted above, reviewed early next year. the 1986 ranges should be retained for 1987; At the conclusion of the Committee's review, those ranges implied considerable reductions all of the members indicated that they favored, or from the rates of growth that now seemed likely could accept, a proposal to reaffirm the ranges for 1986. It was understood that all the ranges for monetary and debt growth that had been were provisional and that, notably in the case of established in February for the year 1986. The Ml, they would be reviewed in early 1987 in the behavior of all of the monetary aggregates would light of intervening developments. continue to be judged against the background of The following paragraph relating to the ranges developments in the economy and financial mar- for 1987 was approved for inclusion in the dokets and potential price pressures. Growth of Ml mestic policy directive: in excess of its range would be acceptable and would be evaluated in the light of the behavior of For 1987 the Committee agreed on tentative ranges the broader aggregates. The Committee recog- of monetary growth, measured from the fourth quarter nized that expansion in total debt also might of 1986 to the fourth quarter of 1987, of 5Vi to %Vi percent for M2 and M3. While a range of 3 to 8 percent exceed its range for the year. for Ml in 1987 would appear appropriate in the light of The following paragraph relating to the long- most historical experience, the Committee recognized run ranges for 1986 was approved for the domes- that the exceptional uncertainties surrounding the betic policy directive: havior of Ml velocity over the more recent period would require careful appraisal of the target range at the beginning of 1987. The associated range for growth The Committee agreed at this meeting to reaffirm in total domestic nonfinancial debt was provisionally the ranges established in February for growth of 6 to 9 set at 8 to 11 percent for 1987. percent for both M2 and M3, measured from the fourth quarter of 1985 to the fourth quarter of 1986. With Votes for this action: Messrs. Volcker, Corrigan, respect to Ml, the Committee recognized that, based Angell, Guffey, Mrs. Horn, Messrs. Johnson, on the experience of recent years, the behavior of that Melzer, Morris, Rice, and Wallich. Vote against aggregate is subject to substantial uncertainties in this action: Ms. Seger. Absent and not voting: relation to economic activity and prices, depending None. among other things on the responsiveness of Ml growth to changes in interest rates. In light of these uncertainties and of the substantial decline in velocity Ms. Seger dissented because she preferred to in the first half of the year, the Committee decided that retain—at least for now—this year's range of 6 to growth of Ml in excess of the previously established 3 9 percent for growth in both M2 and M3 in 1987. to 8 percent range for 1986 would be acceptable. In her view, the higher range might be needed to Acceptable growth of Ml over the remainder of the accommodate an acceptable rate of economic year will depend on the behavior of velocity, growth in the other monetary aggregates, developments in the expansion, especially in light of the. possibility economy and financial markets, and price pressures. that the velocity of these aggregates might re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

710 Federal Reserve Bulletin • October 1986 main weak next year. At the same time she did growth in Ml, the members took account of an not want to rule out the possibility that interim analysis that indicated that appreciably slower developments might justify reductions in the M2 growth might be expected over the months ahead and M3 ranges when the latter were reconsidered even if interest rates were to fall somewhat early next year. She also preferred not to specify further. However, the members recognized that a tentative range for Ml at this time because of the timing and extent of any slowing in Ml the substantial uncertainties currently surround- growth continued to be subject to unusual uncering the relationship between Ml growth and tainty. In the circumstances and taking account broad measures of economic activity. of their willingness to accept Ml growth in In their discussion of policy implementation excess of the 3 to 8 percent range, especially if for the weeks immediately ahead, Committee growth of the broader aggregates remained withmembers took account of the likelihood that the in their ranges, a majority of the members exdiscount rate would be reduced within a few days pressed a preference for not indicating a specific after the meeting. Against the background of rate of expected growth for Ml in the short-run sluggish expansion in economic activity and a operational paragraph of the Committee's direcsubdued rate of inflation, most of the members tive. believed that some easing was desirable and they In the Committee's discussion of possible inindicated a preference for implementing the eas- termeeting adjustments in policy implementaing, at least initially, through a lower discount tion, the members generally agreed that there rate rather than through open market operations. should be no presumptions about the likely direc- Some members commented that further easing tion of any such adjustments, given the current could have a favorable impact on interest-sensi- uncertainties about prospective economic and tive sectors of the economy, particularly in light financial developments and the behavior of the of what could be viewed as still relatively high monetary aggregates. A majority of the members real interest rates. It was also suggested that a also indicated a preference for reducing the existreduction in the discount rate might encourage ing intermeeting range for the federal funds rate over time similar actions by a number of major by 1 percentage point to 4 to 8 percent. The countries abroad, although such actions were not reduction was viewed as a technical adjustment expected over the near term, at least in the case that would provide a more symmetrical range of some of the key industrial nations. around a lower federal funds rate that could be While nearly all the members indicated their expected to emerge following the anticipated acceptance of the policy approach in question, a reduction in the discount rate. The Committee few referred to the risks of easing under present regards the federal funds range as a mechanism circumstances, particularly the risk under cur- for initiating Committee consultation when its rent conditions of sharp further depreciation of boundaries are persistently exceeded. the dollar in foreign exchange markets. Concern At the conclusion of the Committee's discusalso was expressed about the absence of clearer sion, all but one member indicated their acceptindications of a reduction in federal budgetary ance of an operational paragraph for the directive deficits. In one view, a cut in the discount rate that called for some decrease in the existing might need to be accompanied by some increase degree of reserve pressure, recognizing that that in the degree of pressure on reserve positions, relaxation could be accomplished in the first pending evaluation of further economic and fi- instance by a reduction in the discount rate. The nancial developments. members expected such an approach to policy With respect to the outlook for monetary implementation to be consistent with growth in growth, the members expected that M2 and M3 M2 and M3 at annual rates of about 7 to 9 percent might continue to expand at rates around their over the three-month period from June to Sep- 1986 ranges over coming months, even assuming tember. Over the same period growth in Ml was some pickup in the rate of business activity and expected to moderate from the exceptionally some easing in overall conditions of reserve large increase during the second quarter. The availability. In their evaluation of the outlook for specific rate of Ml growth remained subject to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 711 unusual uncertainty and the Committee agreed price stability over time, promote growth in output on that this aggregate should continue to be judged a sustainable basis, and contribute to an improved pattern of international transactions. In furtherance of in the light of the behavior of the broader aggrethese objectives the Committee agreed at this meeting gates and other factors. The Committee indicatto reaffirm the ranges established in February for ed that it might find somewhat greater or some- growth of 6 to 9 percent for both M2 and M3, meawhat lesser reserve restraint acceptable over the sured from the fourth quarter of 1985 to the fourth intermeeting period depending on the growth of quarter of 1986. With respect to Ml, the Committee recognized that, based on the experience of recent the monetary aggregates, the strength of the years, the behavior of that aggregate is subject to business expansion, the performance of the dolsubstantial uncertainties in relation to economic activilar on foreign exchange markets, progress ty and prices, depending among other things on the against inflation, and conditions in domestic and responsiveness of Ml growth to changes in interest international credit markets. rates. In light of these uncertainties and of the substantial decline in velocity in the first half of the year, the At the conclusion of the meeting, the following Committee decided that growth of Ml in excess of the domestic policy directive, embodying the Com- previously established 3 to 8 percent range for 1986 mittee's long-run ranges and its short-run operat- would be acceptable. Acceptable growth of Ml over ing instructions, was issued to the Federal Re- the remainder of the year will depend on the behavior of velocity, growth in the other monetary aggregates, serve Bank of New York: developments in the economy and financial markets, and price pressures. Given its rapid growth in the early The information reviewed at this meeting indicates a part of the year, the Committee recognized that the mixed pattern of developments but suggests on bal- increase in total domestic nonfinancial debt in 1986 ance that economic activity expanded slowly in the may exceed its monitoring range of 8 to 11 percent, but second quarter. In June total nonfarm payroll employ- felt an increase in that range would provide an inapment grew little after accounting for striking workers, propriate benchmark for evaluating longer-term trends with continued weakness in the industrial sector re- in that aggregate. flected in further declines in employment in manufac- For 1987 the Committee agreed on tentative ranges turing and mining. The civilian unemployment rate of monetary growth, measured from the fourth quarter moved down to 7.1 percent from 7.3 percent in May. of 1986 to the fourth quarter of 1987, of 5Vi to 8'A Industrial production declined in May. Total retail percent for M2 and M3. While a range of 3 to 8 percent sales were about unchanged during the month, al- for Ml in 1987 would appear appropriate in the light of though consumer spending rose considerably for the most historical experience, the Committee recognized second quarter as a whole. Housing starts fell some- that the exceptional uncertainties surrounding the bewhat in May from a relatively high level. Weakness in havior of Ml velocity over the more recent period the energy sector has contributed to a slowing of would require careful appraisal of the target range at business capital spending. Preliminary data for the the beginning of 1987. The associated range for growth U.S. merchandise trade balance in April show a some- in total domestic nonfinancial debt was provisionally what larger deficit than the rate recorded in the first set at 8 to 11 percent for 1987. quarter. Both consumer and producer prices turned up In the implementation of policy for the immediate in May but have fallen on balance since late 1985, future, the Committee seeks to decrease somewhat the largely reflecting declines in energy prices. existing degree of pressure on reserve positions, tak- Ml growth in June, though less than in May, was ing account of the possibility of a change in the still rapid; through June, Ml grew at a rate well above discount rate. This action is expected to be consistent the Committee's range for 1986. Growth of M2 slowed with growth in M2 and M3 over the period from June somewhat and expansion of M3 remained relatively to September at annual rates of about 7 to 9 percent. moderate in June, keeping these two aggregates close While growth in Ml is expected to moderate from the to the middle of their respective ranges for the year. exceptionally large increase during the second quarter, Expansion in total domestic nonfinancial debt remains that growth will continue to be judged in the light of appreciably above the monitoring range for 1986. Most the behavior of M2 and M3 and other factors. Someshort-term interest rates have declined on balance what greater or lesser reserve restraint might be acsince the May 20 meeting of the Committee. Rates on ceptable depending on the behavior of the aggregates, Treasury bonds also have moved lower while rates on the strength of the business expansion, developments private long-term obligations are about unchanged to in foreign exchange markets, progress against inflasomewhat higher. The trade-weighted value of the tion, and conditions in domestic and international dollar against major foreign currencies has declined credit markets. The Chairman may call for Committee somewhat on balance since the May meeting. consultation if it appears to the Manager for Domestic The Federal Open Market Committee seeks mone- Operations that reserve conditions during the period tary and financial conditions that will foster reasonable before the next meeting are likely to be associated with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

712 Federal Reserve Bulletin • October 1986 a federal funds rate persistently outside a range of 4 to stances could foster inflationary expectations, 8 percent. especially in light of the uncertain outlook for reductions in the federal deficit, and have ad- Votes for the short-run operational paragraph: verse repercussions on the dollar in foreign ex- Messrs. Volcker, Corrigan, Angell, Guffey, Mrs. change markets. In addition, he noted that the Horn, Messrs. Johnson, Morris, Rice, Ms. Seger, and Mr. Wallich. Vote against this action: Mr. outlook for the balance of 1986 and 1987 ap- Melzer. Absent and not voting: None. peared to be in line with the economy's long-run potential and, in any event, he believed that Mr. Melzer preferred to direct open market further accommodation would have little positive operations toward maintaining the existing de- impact on real output in the short run and would gree of pressure on reserve conditions. He was be accompanied by greater price pressures in the concerned that easing under current circum- long run. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

713 Legal Developments ORDERS ISSUED UNDER BANK HOLDING ling 7.3 percent of the total deposits in commercial COMPANY ACT, BANK MERGER ACT, BANK banks in Massachusetts, and the largest commercial SERVICE CORPORATION ACT, AND FEDERAL banking organization in Connecticut, controlling 26.5 RESERVE ACT percent of the total deposits in commercial banks in Connecticut.3 Applicant seeks to acquire Consumers,4 Orders Issued Under Section 3 of the Bank which is the 41st largest depository institution located Holding Company Act in Massachusetts, with total deposits of $308.8 million, representing 0.4 percent of total deposits in depository Bank of New England Corporation institutions in the state of Massachusetts. Boston, Massachusetts Upon consummation of this proposal, Applicant would remain the second largest commercial banking Order Approving Acquisition of a Bank Holding organization in Massachusetts with $13.2 billion in Company total domestic deposits, representing 7.3 percent of the total deposits in commercial banks in the state. Ac- Bank of New England Corporation, Boston, Massa- cordingly, consummation of this proposal would have chusetts, a bank holding company within the meaning no significant effect of the concentration of banking of the Bank Holding Company Act (12 U.S.C. resources in Massachusetts. §§ 1841 et seq.) ("Act"), has applied for the Board's Both Applicant and Bank compete directly in the approval under section 3 of the Act (12 U.S.C. Boston5 and Worcester6 banking markets.7 In the § 1842) to acquire Consumers Savings Bank, Worces- Boston banking market, Applicant is the third largest ter, Massachusetts ("Consumers"), a state-chartered of 260 depository institutions operating in the market, stock savings bank which is insured by the Federal and controls 6.8 percent of total deposits in depository Deposit Insurance Corporation.1 institutions in the market. Consumers is the 257th Notice of the application, affording an opportunity largest depository institution in the market, with less for interested persons to submit comments, has been than 0.1 percent of the total deposits in depository given in accordance with section 3(b) of the Act. The institutions in the market. Upon consummation of the time for filing comments has expired, and the Board proposal, Applicant's share of the deposits in deposihas considered the application and all comments re- tory institutions in the market would remain at 6.8 ceived in light of the factors set forth in section 3(c) of percent. The Boston market is considered to be unconthe Act (12 U.S.C. § 1842(c)). centrated, with a Herfindahl-Hirschman Index Applicant, with nine banking subsidiaries located in Massachusetts and Connecticut, is the second largest banking organization in New England with consolidated assets of $17.6 billion and total domestic deposits of $14.0 billion.2 Applicant is the second largest commercial banking organization in Massachusetts, control- 3. Statewide data for Connecticut are as of June 30, 1985; statewide data for Massachusetts are as of September 30, 1985. 4. In connection with this application, Applicant has committed to 1. The Board has previously determined that state-chartered stock divest its interest in Consumers' three nonbank subsidiaries: Financial savings banks, which are not covered by the exemption created by the Enterprises Corporation; Plymouth Inc.; and CSB Realty Corpora- Garn-St Germain Depository Institutions Deregulation Act of 1982 for tion, within 180 days of consummation. thrift institutions insured by the Federal Savings and Loan Insurance 5. The Boston banking market consists of the Boston Ranally Corporation ("FSLIC"), and which accept demand deposits and Metropolitan Area ("RMA"), minus the New Hampshire towns of engage in the business of making commercial loans, are within the Brentwood, Chester and Derry, plus the Massachusetts towns of definition of "bank" contained in section 2(c) of the Act. Consumers Ayre, Berlin, Groton, Harvard, Pepperell, and Shirley, and those accepts demand deposits and engages in the business of making portions of Bellingham, Carver, Lakeville, Middleborough, and Plycommercial loans and its deposits are not insured by FSLIC. Accord- mouth not already included in the RMA. ingly, Consumers is a "bank" for purposes of the Act. The application 6. The Worcester banking market consists of the Worcester RMA, has therefore been considered in light of the requirements of section 3 plus the towns of Barre, Dudley, Hubbardston, New Braintree, of the Act pertaining to the acquisition of banks. Oakham, Webster and West Brookfield and that portion of Charlton 2. Banking data are as of March 31, 1986, unless otherwise speci- not already included in the RMA. fied. 7. Market data are as of June 30, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

714 Federal Reserve Bulletin • October 1986 ("HHI") of 381, which would remain unchanged upon Based on the foregoing and other facts of record, the consummation of the proposal. Board has determined that the application should be In the Worcester banking market, Applicant is the and hereby is approved. The transaction shall not be smallest of 31 depository institutions operating in the consummated before the thirtieth calendar day followmarket, with 0.1 percent of total deposits in depository ing the effective date of this Order or later than three institutions in the market. Consumers is the seventh months after the effective date of this Order, unless largest depository institution in the market, with 6.9 such period is extended by the Board or by the Federal percent of the total deposits in depository institutions Reserve Bank of Boston, acting pursuant to delegated in the market. Upon consummation of the proposal, authority. Applicant's share of the deposits in depository institu- By order of the Board of Governors, effective tions in the market would increase to 7.0 percent. The August 4, 1986. Worcester banking market is considered to be unconcentrated, with an HHI of 952, which would increase Voting for this action: Chairman Volcker and Governors by only one point upon consummation of the proposal. Wallich, Seger, and Angell. Absent and not voting: Gover- Accordingly, consummation of this proposal would nors Rice and Johnson. have no significant effect on the concentration of banking resources in the Boston or Worcester banking JAMES MCAFEE markets. [SEAL] Associate Secretary of the Board The financial and managerial resources of Applicant, its subsidiary banks, and Consumers are consistent with approval, particularly in light of certain Citicorp commitments made by Applicant in connection with New York, New York this proposal. In its assessment of Applicant's managerial resources, the Board has considered Applicant's Order Approving Acquisition of a Bank Holding conviction in March 1986, of 31 counts of willfully Company violating the Currency and Foreign Transaction Reporting Act ("CFTRA"), which Applicant is appeal- Citicorp, New York, New York, a bank holding coming. The Board recently has considered Applicant's pany within the meaning of the Bank Holding Compaindictment on these charges in assessing managerial ny Act of 1956, as amended ("BHC Act") (12 U.S.C. factors in connection with Applicant's proposal to § 1841 et seq), has applied for the Board's approval acquire Maine National Bank, Bank of New England under section 3(a)(3) of the BHC Act (12 U.S.C. Corporation, 72 FEDERAL RESERVE BULLETIN 42 § 1842(a)(3)) to acquire through its subsidiary, Citi- (1986). In approving the application, the Board noted corp Holdings, Inc., Wilmington, Delaware ("CHI"), the fact that Applicant had discovered its CFTRA GWB Holding Company, Phoenix, Arizona, and violations itself through an internal audit, had alerted thereby indirectly to acquire Great Western Bank and regulatory authorities to the violations, and had coop- Trust, Phoenix, Arizona ("Bank"). erated fully with law enforcement agencies. The Board Notice of the application, affording an opportunity also considered that Applicant and its subsidiaries for interested persons to submit comments, has been undertook comprehensive remedial and preventive given in accordance with section 3(b) of the BHC Act. actions. The existence and efficacy of these measures The time for filing comments has expired, and the were verified by supervisory authorities. Finally, the Board has considered the application and all com- Board consulted appropriate law enforcement agen- ments received in light of the factors set forth in cies and considered Applicant's past record of compli- section 3(c) of the BHC Act (12 U.S.C. § 1842(c)). ance with the law. Based upon these and other facts of Citicorp, with total consolidated assets of approxirecord, the Board concludes the managerial factors of mately $181.9 billion, is the largest banking organiza- Applicant and its subsidiaries are consistent with approval. Considerations relating to convenience and needs of the communities to be served also are consistent with approval.8 however, it is apparent that CBT has consistently lent proportionately more to low- and moderate-income tracts than to high income tracts in both the Hartford Metropolitan Statistical Area and the City of Hartford. In addition, CBT recently has undertaken a $3 million 8. In connection with this application, the Citizens' Research program to provide first and second mortgage and home improvement Education Network ("CREN") submitted a comment to the Board loans at below-market rates to low- and moderate-income persons in indicating CREN's belief that one of Applicant's subsidiaries, Con- Hartford. Accordingly, based upon these and other facts of record, necticut Bank and Trust Company ("CBT") was not meeting the the Board believes that Applicant and its subsidiary CBT are meeting credit needs of Hartford's low- and moderate-income people. Based the convenience and needs of its community, including the low- and upon an analysis of CBT's Home Mortgage Disclosure Act data, moderate-income portions of that community. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 715 tion in the nation.1 It presently operates eight banking receivables financing, real estate construction loans, subsidiaries and engages directly and through subsid- and credit-related property insurance. Citicorp's presiaries in a variety of nonbanking activities. CHI was ence in these markets, however, is not significant in established by Citicorp to hold the shares of Citicorp's comparison with total market volume. In addition, subsidiary banks domiciled outside of New York. CHI numerous competitors will continue to provide these became a bank holding company on May 31, 1984, and services in these markets. Accordingly, consummacurrently holds shares of Citibank (South Dakota), tion of this proposal would be unlikely to eliminate Citibank (Maryland), Citibank (Delaware), Citibank significant existing competition in any relevant mar- (Maine), Citibank (Nevada), and Citibank (Utah). ket. In view of the existence of numerous other Bank is the fifth largest commercial banking organiza- potential entrants into the relevant markets, the Board tion in Arizona, with total domestic deposits of ap- also concludes that consummation of the proposed proximately $534.0 million, representing 2.3 percent of transaction would not have any significant adverse the total deposits in commercial banks in Arizona.2 effects on probable future competition. Section 3(d) oftheBHC Act (12 U.S.C. § 1842(d)), Since 1966, Bank has operated, under state law, two the Douglas Amendment, prohibits the Board from subsidiaries, Great Western Insurance Agency approving an application by a bank holding company ("GWIA") and Great Western Insurance Company to acquire control of any bank located outside of the ("GWIC"), engaged in insurance agency and underbank holding company's home state,3 unless such writing activities. GWIA engages in a broad range of acquisition is "specifically authorized by the statute insurance agency activities, including selling life and laws of the state in which such bank is located, by health and accident insurance directly related to extenlanguage to that effect and not merely by implication." sions of credit, and non-credit-related homeowners', Effective October 1, 1986, the statute laws of Arizo- life, disability and automobile insurance to individuals, na will authorize an out-of-state bank holding compa- and property and casualty, automobile and worker's ny, with the approval of the Arizona Superintendent of compensation insurance to businesses. GWIC under- Banks, to acquire an Arizona bank that had applied to writes credit life insurance and credit accident and operate in Arizona before May 31, 1984.4 health insurance that is directly related to extensions The Arizona Superintendent of Banks has informed of credit. GWIC is also licensed as a fully capitalized, the Board that the proposal does not present any of the legal reserve life and disability insurance underwriter.5 grounds for denial of the application under Ariz. Rev. The National Association of Life Underwriters and the Stat. § 6-326 and that the Superintendent anticipates National Association of Professional Insurance Agents approving the proposal on October 1, 1986, the first ("Protestants") have protested the acquisition by Citiday the interstate banking statute is effective. Based corp of the insurance activities of Bank. on the foregoing, the Board has determined, as re- Protestants argue that the prohibition against the quired by the Douglas Amendment, that the proposed conduct of insurance activities that is contained in acquisition is specifically authorized by the statute Title VI of the Garn-St Germain Depository Institulaws of Arizona, subject to Citicorp's obtaining the tions Act of 1982, as incorporated in section 4(c)(8) of approval of the Superintendent pursuant to section 6- the BHC Act, applies to insurance activities conduct- 322 of Arizona Revised Statutes, and the October 1, ed by subsidiaries of holding company banks. Protes- 1986, effective date of such statute. The Board's order tants argue that the prohibitions of section 4(c)(8) of is specifically conditioned upon satisfaction of the the BHC Act override section 225.22(d)(2)(h) of the state regulatory approval requirement and the effec- Board's Regulation Y, which provides that state bank tiveness of the state statute on October 1, 1986. subsidiaries of bank holding companies may acquire Citicorp does not operate a bank in any of the all of the securities of a company that engages solely markets in which Bank operates. Citicorp does oper- in activities in which the parent bank may engage, ate certain nonbanking subsidiaries in several of the subject to the same limitations as if the bank same markets as Bank, providing mortgage loans, were engaging in the activity directly. 12 C.F.R. consumer and commercial loans, automobile dealer § 225.22(d)(2)(ii). 1. Asset data are as of March 31, 1986. 5. Applicant states that Bank's insurance activities are authorized 2. Deposit data are as of December 31, 1985. by Arizona banking law, which provides that a bank holding company 3. A bank holding company's home state is that state in which the may "directly or through a bank subsidiary engage in any lawful operations of the bank holding company's banking subsidiaries were activity which is reasonably related or incidental to banking. All principally conducted on July 1, 1966, or the date on which the activities in which any bank was lawfully engaged directly or through company became a bank holding company, whichever is later. Citi- a subsidiary on December 31, 1971, are declared to be incidental and corp's home state is New York. related to banking for the purposes of this paragraph." Ariz. Rev. 4. Ariz. Rev. Stat. § 6-322 to -323 (effective October 1, 1986). Stat. § 6-184(3). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

716 Federal Reserve Bulletin • October 1986 In response to Protestants' comment, Citicorp ar- powers of holding company banks under the Garn-St gues that Bank's insurance agency activities do not fall Germain Act. The Board currently has these questions within the prohibitions of the BHC Act, which Citi- under consideration in connection with its rulemaking corp argues do not apply to activities conducted by a proceeding under Regulation Y7 and its request for subsidiary of a state bank owned by a bank holding comment regarding the real estate activities of holding company. Citicorp argues that, even if the BHC Act company banks.8 prohibitions were found to apply, the exceptions found Protestants contend that the Board should decide in section 4(c)(8)(D) for insurance agency activities the scope of the BHC Act's coverage in deciding this engaged in by a bank holding company or its subsidiar- application.9 As the Board has previously stated,10 ies on May 1, 1982, and in section 4(c)(8)(G) for however, the Board believes it is appropriate to reinsurance agency activities performed directly or indi- serve judgment on the issue of the applicability of rectly by a bank holding company, with approval by section 4 of the BHC Act to the direct activities of the Board, prior to January 1, 1971, would apply to the holding company banks for decision in the context of insurance activities of Bank's subsidiaries. its currently ongoing rulemaking proceedings, in Citicorp, however, while reserving its position on which all interested parties may participate, and withthe applicability of the BHC Act to nonbank subsidiar- out prejudging those issues in the context of the ies of holding company banks, has committed that, limited facts of a particular application. The Board following consummation of this transaction, and pend- wishes to emphasize that its action in this case is taken ing completion of the Board's current rulemaking on in light of its outstanding rulemaking proceedings and this issue in connection with section 225.22(d)(2) of does not constitute a decision by the Board on the Regulation Y, GWIC will not engage in underwriting merits of the issues subject to this rulemaking. In this activities, other than those related to credit life and regard, Citicorp has committed that it will conform Bank's insurance activities to the results of the accident and health insurance that are permissible for Board's rulemaking and will not expand Bank's activibank holding companies under the provisions of secties, including those of GWIA and GWIC, without tion 4(c)(8)(A) of the BHC Act. Board approval.11 Citicorp has also committed that, pending completion of the rulemaking on section 225.22(d)(2), GWIA The financial and managerial resources and future will cease to conduct any insurance agency activities, prospects of Applicant, its subsidiaries, CHI and Bank which will instead be conducted directly by Bank and its subsidiaries are consistent with approval of the pursuant to Arizona law.6 Citicorp argues that even if application. In this regard, the Board has previously the BHC Act applies to the nonbank subsidiaries of stated that it expects banking organizations experiencholding company banks, the prohibitions of the Garn- ing substantial growth internally and by acquisition, St Germain Act do not apply to the direct activities of such as Applicant, to maintain a strong capital position holding company banks, and that Bank's insurance activities would thus not be barred by the BHC Act. In a previous order, the Board noted that section 7. 49 Federal Register 794 (1984). 225.22(d)(2) of Regulation Y as currently written im- 8. 50 Federal Register 4519 (1985). plicitly recognizes that activities conducted directly by 9. Protestants also contend that Citicorp's commitments are insufficient because they fail to specifically state that Citicorp will conform banks that are subsidiaries of bank holding companies its future activities to the results of the Board's current rulemaking do not require prior approval under Regulation Y. regarding section 225.22(d)(2) of Regulation Y. The Board has read NCNB Corporation, 72 FEDERAL RESERVE BULLETIN Citicorp's general commitments to conform its activities to the results of the Board's rulemaking under Regulation Y to include the rulemak- 57 (1986). The Board, however, also noted that ques- ing regarding section 225.22(d)(2). tions concerning the scope of the BHC Act's nonbank- 10. NCNB Corporation, 72 FEDERAL RESERVE BULLETIN 57 ing prohibitions with respect to the direct activities of (1986). 11. The Board has also considered Protestants' request for a formal holding company banks and the subsidiaries of holding hearing. The BHC Act does not require the Board to hold a formal company banks and of whether the exemption current- hearing in this case because the Arizona Superintendent of Banks has not expressed written disapproval of the proposed transaction. ly provided in section 225.22(d)(2) of Regulation Y 12 U.S.C. § 1842(b). See, e.g., Northwest Bancorporation v. Board of should be eliminated had been raised in a number of Governors, 303 F.2d 832, 843-44 (8th Cir. 1962); Grandview Bank & contexts, including in the context of the real estate Trust Co. v. Board of Governors, 550 F.2d 415 (8th Cir. 1977); and Farmers & Merchants Bank of Las Cruces v. Board of Governors, 567 development powers of state banks and the insurance F.2d 1082, 1089 (D.C. Cir. 1977). The Board also finds that Protestants have not raised any questions of fact that would render a hearing appropriate. Protestants' claims appear to raise questions of law which, as noted, the Board has under consideration in its rulemaking proceeding. In light of this, the opportunity granted to Protestants to submit comments in this case and the information and representations 6. Citicorp has stated that Bank will not expand its insurance provided by Citicorp in response to Protestants' comments, the Board activities outside Arizona without the Board's approval. has determined to deny Protestants' request for a hearing at this time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 717 substantially above the minimum levels specified in Citizens Fidelity Corporation the Capital Adequacy Guidelines without significant Louisville, Kentucky reliance on intangibles, particularly goodwill.12 The Board will carefully analyze the effect of expansion Order Approving Acquisition of a Bank proposals on the preservation or achievement of such capital positions. Citizens Fidelity Corporation, Louisville, Kentucky, a As the Board recently noted in its approval of bank holding company within the meaning of the Bank Citicorp's application to acquire National Permanent Holding Company Act ("Act") (12 U.S.C. § 1841 Bank, Washington, D.C.,13 Applicant has raised sub- et seq.), has applied for the Board's approval under stantial amounts of equity capital, and has restored its section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to primary capital on a tangible basis to the levels it had acquire First Midwest Bancorp, New Albany, Indiana, achieved prior to its acquisition of Quotron Systems, and thereby indirectly to acquire First Midwest Bank Inc.14 The Board has also considered as a significant and Trust, New Albany, Indiana ("Bank"). Applicant factor Applicant's program of capital improvement will make this acquisition through Citizens Fidelity and its plans to raise Bank's capital above the mini- Corporation of Indiana, New Albany, Indiana, a wholmum level specified in the Board's Capital Adequacy ly owned subsidiary of Applicant that has filed an Guidelines. application under section 3(a)(1) of the Act (12 U.S.C. Accordingly, on the basis of the above consider- § 1842(a)(1)) for prior approval to become a bank ations and Applicant's continuing efforts to strengthen holding company. its capital position, the Board concludes that financial Notice of the applications, affording opportunity for factors are consistent with approval of the proposal. interested persons to submit comments, has been Considerations relating to the convenience and needs given in accordance with section 3(b) of the Act. The of the communities to be served also are consistent time for filing comments has expired, and the Board with approval. has considered the applications and all comments Based on the foregoing and other facts of record, the received in light of the factors set forth in section 3(c) Board has determined that this application should be, of the Act (12 U.S.C. § 1842(c)). and hereby is, approved, subject to the express condi- Section 3(d) of the Act, 12 U.S.C. § 1842(d), the tions that Applicant obtain the approval of the Arizona Douglas Amendment, prohibits the Board from ap- Superintendent of Banks pursuant to section 6-322 of proving an application by a bank holding company to the Arizona Revised Statutes and that the proposal not acquire a bank located outside the holding company's be consummated before the October 1, 1986, effective home state, unless such acquisition is "specifically date of the Arizona statute. In addition, this transac- authorized by the statute laws of the state in which tion shall not be consummated before the thirtieth such bank is located by language to that effect and not calendar day following the effective date of this Order, merely by implication." Applicant's home state is or later than three months after the effective date of Kentucky.1 The statute laws of Indiana authorize a this Order, unless such period is extended for good Kentucky bank holding company to acquire an Indiana cause by the Board or by the Federal Reserve Bank of bank holding company if Kentucky law "permits New York, pursuant to delegated authority. Indiana bank holding companies to acquire banks and By order of the Board of Governors, effective bank holding companies in that state" and would also August 25, 1986. permit the acquiror Kentucky bank holding company "to be acquired by the Indiana bank holding company Voting for this action: Chairman Volcker and Governors . . . sought to be acquired." (Ind. Code § 28—2—15— Rice and Johnson. Abstaining from this action: Governor 18(e) effective January 1, 1986). The Board has previ- Wallich. Absent and not voting: Governors Seger, Angell, ously determined that Kentucky has enacted a statute and Heller. that meets the reciprocity requirements of the Indiana statute, that the Kentucky and Indiana statutes are, in JAMES MCAFEE fact, reciprocal, and that the Indiana statute expressly [SEAL] Associate Secretary of the Board authorizes a Kentucky bank holding company, such as Applicant, to acquire an Indiana bank or bank holding 12. Capital Adequacy Guidelines, 50 Federal Register 16,057, 16,066-67 (April 24, 1985), 71 FEDERAL RESERVE BULLETIN 445 (1985); National City Corporation, 70 FEDERAL RESERVE BULLETIN 743, 746 (1984). 1. A bank holding company's home state for purposes of the 13. Citicorp (National Permanent Bank), 72 FEDERAL RESERVE Douglas Amendment is that state in which the total deposits of its BULLETIN 724 (1986). banking subsidiaries were largest on July 1, 1966, or on the date it 14. Citicorp (Quotron Systems Inc.), 72 FEDERAL RESERVE BULLE- became a bank holding company, whichever date is later. 12 U.S.C. TIN 497 (1986). § 1842(d). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

718 Federal Reserve Bulletin • October 1986 company.2 Accordingly, approval of Applicant's pro- Index ("HHI") for commercial banking organizations posal to acquire Bank is not barred by the Douglas would increase by 185 points to 2445.6 Amendment. Although consummation of the proposals would Applicant is the second largest commercial banking eliminate existing competition between Applicant and organization in Kentucky, controlling six Kentucky Bank in the Louisville banking market, numerous banks, which hold total deposits of $2.7 billion, repre- other commercial banking organizations would remain senting 11.2 percent of the total deposits in commer- as competitors after consummation. In addition, the cial banks in the state.3 Applicant is the 59th largest presence of eight thrift institutions that control apbanking organization in Indiana, where it controls one proximately 24.2 percent of the total deposits in the bank subsidiary with total deposits of $114.7 million, market7 mitigates the anticompetitive effects of the representing 0.3 percent of total deposits in commer- transaction.8 Thrift institutions already exert a considcial banks in Indiana. Bank is the 27th largest commer- erable competitive influence in the market as providcial banking organization in Indiana, with total depos- ers of NOW accounts and consumer loans. Most of its of $226.9 million, representing 0.6 percent of total these institutions also provide commercial loans. deposits in commercial banking organizations in that Based upon the above considerations, the Board constate. Upon consummmation of this proposal, Appli- cludes that consummation of the proposal is not likely cant would become the 17th largest commercial bank- substantially to lessen competition in the Louisville ing organization in Indiana, controlling aggregate de- banking market.9 posits of $341.6 million, or 0.9 percent of total deposits The financial and managerial resources of Appliin commercial banking organizations in the state. cant, its subsidiary banks, and Bank are regarded as Consummation of this proposal would not have a satisfactory and consistent with approval of this prosignificant effect upon the concentration of banking posal. Considerations relating to the convenience and resources in either state. needs of the community to be served are also consis- Both Applicant and Bank operate in the Louisville, tent with approval of this application. Kentucky banking market.4 Applicant, the second Based on the foregoing and other facts of record, the largest of 19 commercial banking organizations in the Board has determined that consummation of the promarket,5 controls deposits of $2.2 billion, representing posed transaction would be in the public interest and 30.3 percent of total deposits in commercial banking that the applications should be, and hereby are, aporganizations in the market. Bank is the sixth largest proved. The transaction shall not be consummated commercial banking organization in the market, con- before the thirtieth calendar day following the effective trolling deposits of $218.4 million, representing 3.1 date of this Order or later than three months after the percent of total deposits in commercial banking orga- effective date of this Order, unless such period is nizations in the market. Upon consummation of this proposal, Applicant would become the largest commercial banking organization in the market, controlling deposits of $2.42 billion, representing 33.4 percent of total deposits in commercial banking organizations in the market. The Louisville banking market is highly 6. Under the revised Department of Justice Merger Guidelines (49 concentrated with the four largest commercial banks Federal Register 26,823 (June 29, 1984)) ("Guidelines"), a market in which the post-merger HHI is over 1800 is considered highly concencontrolling 83.6 percent of commercial banks in the trated. In such markets, the Department is likely to challenge a merger market. Following consummation of this transaction, that produces an increase in the HHI of more than 50 points. The the four-firm concentration ratio would increase to Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other 86.7 percent and the market's Herfindahl-Hirschman factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by at least 200 points. 7. The Board has previously indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743 (1984); NCNB Corporation, 70 FEDERAL RESERVE 2. Citizens Fidelity Corporation, 72 FEDERAL RESERVE BULLETIN BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL 576 (1986). RESERVE BULLETIN 802 (1983); First Tennessee National Corpora- 3. State banking data are as of December 31, 1985, and reflect tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). holding company acquisitions approved and mergers consummated 8. Thrift data are as of June 30, 1985. through June 26, 1986. 9. If 50 percent of deposits held by thrift institutions in the 4. The Louisville, Kentucky banking market is approximated by Louisville banking market are included in the calculation of market the Louisville, Kentucky Ranally Metro Area and Clark County, concentration, the share of total deposits held by the four largest Indiana. organizations in the market would be 73 percent. Applicant's market 5. Market banking data are as of June 30, 1985, and reflect holding share would increase by 2.6 percentage points to 27.3 percent and the company acquisitions approved and mergers consummated through HHI would increase by 138 points to 1854 upon consummation of the June 26, 1986. proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 719 extended for good cause by the Board or by the banking market, controlling 44.9 percent of total de- Federal Reserve Bank of St. Louis, pursuant to dele- posits in commercial banking organizations in the gated authority. market.2 A branch of Applicant's subsidiary bank is By order of the Board of Governors, effective the smallest commercial banking organization in the August 25, 1986. relevant market, controlling deposits of $3.2 million, representing 1.9 percent of the total deposits in com- Voting for this action: Chairman Volcker and Governors mercial banking organizations in the market. Upon Wallich, Rice, and Johnson. Absent and not voting: Gover- consummation of this proposal, Applicant would benors Seger, Angell, and Heller. come the largest commercial banking organization in the market, controlling 46.8 percent of the total depos- JAMES MCAFEE its in commercial banking organizations there. Follow- [SEAL] Associate Secretary of the Board ing consummation of this transaction, the four-firm concentration ratio in the market would increase to 100 percent and the market's Herfindahl-Hirschman Key Centurion Bancshares, Inc. Index ("HHI") for commercial banking organizations Charleston, West Virginia would increase by 171 points to 3311.3 In reviewing the effect of this proposal on existing competition in the Order Approving Acquisition of a Bank Boone County-Chapmanville banking market, the Board has considered Applicant's small absolute and Key Centurion Bancshares, Inc., Charleston, West relative size in the market. Applicant's branch was Virginia, a bank holding company within the mean- opened in February 1985, and holds deposits of only ing of the Bank Holding Company Act ("Act") $3.2 million. In addition, the Board notes that four (12 U.S.C. § 1841 et seq.), has applied for the banks would remain in the market after consummation Board's approval under section 3(a)(3) of the Act of the proposal. In view of all the facts of record, the (12 U.S.C. § 1842(a)(3)) to acquire Boone National Board concludes that consummation of the proposal Bank of Madison, Madison, West Virginia ("Bank"). would not have a significant effect on existing or probable future competition in the market. Notice of the application, affording opportunity for interested persons to submit comments, has been The financial and managerial resources of Appligiven in accordance with section 3(b) of the Act. The cant, its subsidiary banks, and Bank are regarded as time for filing comments has expired, and the Board satisfactory and consistent with approval of this prohas considered the application and all comments re- posal. Applicant proposes to provide new services to ceived in light of the factors set forth in section 3(c) of customers of Bank, including trust and investment the Act (12 U.S.C. § 1842(c)). services. Considerations relating to the convenience Applicant is the largest commercial banking organi- and needs of the community to be served are also zation in West Virginia, controlling five banking sub- consistent with approval of the application. sidiaries, with deposits of $890.2 million, representing Based on the foregoing and other facts of record, the 7.5 percent of the total deposits in commercial banking Board has determined that consummation of the proorganizations in the state.1 Bank is the 30th largest posed transaction would be in the public interest and commercial banking organization in the state, control- that the appplication should be, and hereby is, apling deposits of $78 million, representing 0.6 percent of proved. The transaction shall not be consummated the total deposits in commercial banking organizations before the thirtieth calendar day following the effective in the state. Upon consummation, Applicant would date of the Order or later than three months after the control 8.1 percent of the total deposits in commercial banking organizations in the state and would remain the largest bank holding company in the state. Consummation of the proposed transaction would not have a significant effect upon the concentration of 2. The Boone County-Chapmanville banking market is approximated by Boone County, and the community of Chapmanville in the banking resources in West Virginia. northern portion of Logan County, West Virginia. 3. Under the revised Department of Justice Merger Guidelines Bank is the largest of five commercial banking (49 Federal Register 26,823 (June 29, 1984)), any market in which the organizations in the Boone County-Chapmanville post-merger HHI is over 1800 is considered highly 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 competition. The Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors 1. Banking data are as of December 31, 1985; market data are as of indicating anticompetitive effects) unless the post-merger HHI is at June 30, 1985. least 1800 and the merger increases the HHI by at least 200 points. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

720 Federal Reserve Bulletin • October 1986 effective date of the Order, unless such period is merely by implication." The statute laws of Arizona extended for good cause by the Board or by the authorize an out-of-state bank holding company, with Federal Reserve Bank of Richmond, pursuant to dele- the approval of the Arizona Superintendent of Banks, gated authority. to acquire an Arizona bank that had applied to operate By order of the Board of Governors, effective in Arizona before May 31, 1984.2 August 18, 1986. The Arizona Superintendent of Banks has informed the Board that the proposal does not present any of the Voting for this action: Chairman Volcker and Governors grounds for denial of the application under Ariz. Rev. Wallich, Rice, Seger, Angell, and Johnson. Stat. § 6-326 and that the Superintendent anticipates approving the proposal on October 1, 1986, the first BARBARA R. LOWREY day the interstate banking statute is effective. Based [SEAL] Associate Secretary of the Board on the foregoing, the Board has determined, as required by the Douglas Amendment, that the proposed acquisition is specifically authorized by the statute Marshall & Ilsley Corporation laws of Arizona, subject to M&I's obtaining the ap- Milwaukee, Wisconsin proval of the Superintendent pursuant to section 6-322 of Arizona Revised Statutes, and the October 1, 1986, Order Approving Acquisition of a Bank Holding effective date of such statute. The Board's Order is Company specifically conditioned upon satisfaction of the state regulatory approval requirement and the effectiveness Marshall & Ilsley Corporation, Milwaukee, Wisconsin of the state statute on October 1, 1986. ("M&I"), a bank holding company within the meaning M&I is the second largest banking organization in of the Bank Holding Company Act (12 U. S. C. § 1841 Wisconsin, operating 34 subsidiary banks with total et seq., ("BHC Act")) has applied for the Board's deposits of $3.7 billion, representing approximately 12 approval under section 3 of the BHC Act (12 U.S.C. percent of total deposits in commercial banks in Wis- § 1842) to acquire Thunderbird Capital Corporation, consin.3 Company is the seventh largest banking orga- Phoenix, Arizona ("Company"), and thereby to ac- nization in Arizona, operating one bank subsidiary quire Thunderbird Bank, Phoenix, Arizona with total deposits of $205.1 million, representing 1.0 ("Bank").1 percent of total deposits in commercial banks in Arizo- Notice of the applications, affording an opportunity na. for interested persons to submit comments, has been M&I does not provide banking services in the given in accordance with section 3(b) of the BHC Act. Phoenix banking market,4 where Bank competes, nor The time for filing comments has expired, and the elsewhere in Arizona. The Arizona interstate banking Board has considered the applications and all com- statute permits banking organizations from any state ments received, including comments in opposition to to enter Arizona, and, accordingly, there are numerthe applications from the Arizona Association of Com- ous potential entrants into the state and into the munity Organizations for Reform Now ("ACORN"), Phoenix market where Bank competes. Based on the in light of the factors set forth in section 3(c) of the foregoing, the Board concludes that the proposal BHC Act (12 U.S.C. § 1842(c)). would not have any adverse effects on the concentra- Section 3(d) of the BHC Act, 12 U.S.C. § 1842(d), tion of banking resources in any relevant area, and that the Douglas Amendment, prohibits the Board from the proposal would not result in the elimination of approving an application by a bank holding company substantial existing or probable future competition in to acquire a bank located outside the holding compa- any relevant market. Thus, the competitive effects of ny's home state, unless such acquisition is "specifical- the proposal are consistent with approval of the applily authorized by the statute laws of the state in which cation. such bank is located, by language to that effect and not 1. M&I has also applied under section 3(a)(1) of the BHC Act (12 U.S.C. § 1842(a)(1)) for approval for its wholly owned subsidiary, 2. Ariz. Rev. Stat. § 6-322 to -323 (effective October 1, 1986). M&I Thunderbird Acquisition Corporation ("Acquisition Corp.") to 3. Deposit data refer to total domestic deposits as of March 31, become a bank holding company through merger with Company. 1986; state rank data as of June 30, 1985. Acquisition Corp. is of no significance except as a means to facilitate 4. The Phoenix banking market is approximated by the Phoenix, the acquisition by M&I of Company and Bank. Arizona RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 721 The financial and managerial resources and future office and begin accepting applications for one-toprospects of M&I, Company and Bank are considered four-family, owner occupied, mortgage loans, insatisfactory and consistent with approval. cluding FHA, VA and Federal Home Loan Mort- In considering the convenience and needs of the gage Corporation programs. FHA and VA loans will communities to be served, the Board has also taken be made in accordance with the appropriate regulainto account the record of M&I under the Community tory guidelines with no additional restrictions, in- Reinvestment Act (12 U.S.C. § 2901 et seq., cluding no minimum loan size. ("CRA")). The CRA requires the Board, in its evalua- 4. M&I Mortgage will use its best efforts to make tion of a bank holding company application, to assess mortgage loans to all qualified borrowers in the the record of an applicant in meeting the credit needs Phoenix SMSA and will contact real estate brokers of the entire community, including low- and moderate- to inform them of loan availability. M&I anticipates income neighborhoods, consistent with safe and sound making mortgage loans approximating $2 million in operation. the target low- and moderate-income areas of Phoe- With regard to M&I's CRA record, the Board has nix. considered extensive comments from ACORN. 5. M&I Mortgage will provide brochures outlining ACORN requests that the Board not approve the mortgage programs in all lobbies of Bank and, where application until M&I and Bank "provide adequate appropriate, brochures printed in the Spanish lanassurances that they will meet the convenience and guage will be provided. needs of the low- and moderate-income and minority 6. Bank will continue to make home improvement persons in Bank's service area in Arizona." ACORN loans to qualified borrowers, including loans for asserts that after consummation of the proposal, M&I amounts as low as $1,000. would not provide a variety of needed services in 7. Bank will continue to make SBA guaranteed Phoenix, including home mortgage and small business loans to small businesses where job creation can be loans (particularly FHA, VA and SBA guaranteed demonstrated.6 loans), home improvement loans, basic banking ser- 8. Bank will consider loans to qualified non-profit vices at affordable fees, and check-cashing services for developers and joint ventures between non-profit U.S. government checks. and for-profit developers for economic development In accordance with the Board's practice and proce- purposes. dures for handling protested applications,5 the Board 9. Bank has not and does not anticipate closing any reviewed the CRA record of M&I and Bank, the branch offices. allegations made by ACORN, and M&I's response. 10. Bank will make small business loans at market Both M&I and Bank met with ACORN, and to address and will consider blended rates transactions in con- ACORN's concerns, M&I has proposed to undertake junction with public agencies; Bank will lower equithe following measures to enhance Bank's service to ty requirements to 20 percent for small business the convenience and needs of the community, particu- loans and will extend lines of credit, with no minilarly low- and moderate-income segments: mum dollar requirement, to qualified small busi- 1. All branches of Bank will cash government nesses which would meet the guidelines of the SBA checks at no charge to both customers and non- 7(a) program. customers with proper identification. 11. Bank will establish an officer call program for 2. Bank will develop and offer a basic checking small businesses in low- and moderate-income areas account, sometimes referred to as a "Lifeline ac- to inform the owners of credit opportunities. count," within one year after becoming affiliated with M&I, and M&I will consider the needs of the In addition, M&I has agreed to meet with communicommunity in the development of the Lifeline ac- ty groups, on a regular basis, to discuss the needs of count. the community. 3. Within one year after Bank becomes affiliated Notwithstanding the commitments advanced by with M&I, M&I Grootemaat Mortgage Corp. M&I, ACORN continues to oppose the application on ("M&I Mortgage"), intends to open a Phoenix the basis of the records of Bank and M&I's lead bank, 6. The Board notes that Bank has been a leader in SBA loan originations in the Phoenix area, that Bank's marketing is directed to all types of small businesses, including minority-owned firms, and that Bank does not appear to exclude low- and moderate-income areas in 5. See 12 C.F.R. § 262.25(c). its loan distributions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

722 Federal Reserve Bulletin • October 1986 Marshall & Ilsley Bank ("M&I Bank"), Milwaukee, Safra Holding S.A. Wisconsin, in meeting the deposit and credit needs of the low- and moderate-income communities in the Cartago Empreendimentos e Participacoes areas they serve. Ltda. The Board has carefully reviewed the records of M&I Bank and Bank in meeting the convenience and Safra S.A. Administracao e Participacoes needs of all segments of their communities. Based on this review and after taking into account the programs Banco Safra, S.A. M&I has proposed to enhance Bank's service to the Sao Paulo, Brazil convenience and needs of its community, including low- and moderate-income segments, the Board con- Order Approving the Acquisition of a Bank cludes that convenience and needs considerations are consistent with approval of this application. Safra Holding S.A., Cartago Empreendimentos e Par- ACORN has also requested the Board to order a ticipacoes Ltda., Safra S.A. Administracao e Participublic meeting to receive public testimony on the pacoes and Banco Safra, S. A., all of Sao Paulo, Brazil, issues presented by this application. While section 3(b) have applied for the Board's approval under section of the BHC Act does not require a formal hearing in 3(a)(1) of the Bank Holding Company Act (12 U.S.C. this instance, the Board may, in any case, order a § 1842(a)(1)) ("BHC Act") to become bank holding formal or informal hearing. In its request for a hearing, companies by acquiring, directly or indirectly, a mahowever, ACORN does not present any material ques- jority of the voting shares of Safra National Bank of tions of fact that are in dispute. In accordance with the New York ("Bank"), New York, New York, a pro- Board's guidelines, M&I and ACORN have met pri- posed new bank. vately to discuss this application and have exchanged Notice of the applications, affording opportunity for extensive correspondence. In the Board's view, the interested persons to submit comments, has been parties have had ample opportunity to present their given in accordance with section 3(b) of the BHC Act. arguments in writing and to respond to one another's The time for filing comments has expired, and the submissions. In light of these facts, the proposals by Board has considered the applications and all com- M&I to expand Bank's service, and other facts of ments received in light of the factors set forth in record, the Board has determined that a hearing would section 3(c) of the BHC Act (12 U.S.C. § 1842(c)). serve no useful purpose. Accordingly, ACORN's re- Banco Safra, S.A., with total assets of approximatequest for a hearing is hereby denied. ly $1.7 billion, is a full service commercial bank Based on the foregoing and other facts of record, the operating 125 branches throughout Brazil, and a bank Board has determined that the applications should be, subsidiary in the Bahamas. Banco Safra represents and hereby are, approved, subject to the express approximately 97 percent of the total assets of the condition that Applicant obtain the approval of the remaining Applicants, which are Brazilian holding Arizona Superintendent of Banks pursuant to section companies. In the United States, Banco Safra operates 6-322 of the Arizona Revised Statutes and that the a branch office in New York City and has chosen New proposal not be consummated before the October 1, York as its home state for purposes of section 5 of the 1986 effective date of the Arizona statute. This trans- International Banking Act (12 U.S.C. § 3103) and action shall also not be consummated before the section 211.22 of Regulation K (12 C.F.R. § 211.22). thirtieth calendar day following the effective date of Bank is a proposed new bank that will operate in the this Order, or later than three months after the effec- New York Metropolitan banking market.1 tive date of this Order, unless such period is extended In view of the de novo status of Bank, and based for good cause by the Board or by the Federal Reserve upon the facts of record, the Board concludes that the Bank of Chicago, acting pursuant to delegated author- proposed transaction will have no adverse effect on ity. competition. Accordingly, competitive considerations By order of the Board of Governors, effective are consistent with approval of these applications. August 25, 1986. Voting for this action: Chairman Volcker and Governors Wallich, Rice, and Johnson. Absent and not voting: Governors Seger, Angell, and Heller. 1. The New York Metropolitan banking market is defined to include New York City, Nassau, Westchester, Rockland, Putnam and western Suffolk Counties in New York; portions of Bergen and JAMES MCAFEE Hudson Counties in New Jersey; and a portion of Fairfield County in [SEAL] Associate Secretary of the Board Connecticut. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 723 Section 3(c) of the BHC Act requires in every case ceived in light of the factors set forth in section 3(c) of that the Board consider the financial resources of the the Act (12 U.S.C. § 1842(c)). applicant and the bank to be acquired. In this case, the Applicant, with total deposits of $280.1 million, is Board notes that the primary capital ratio of Banco the 13th largest banking organization in Missouri, Safra is above the minimum capital guidelines estab- controlling 0.77 percent of total deposits in commerlished by the Board for domestic bank holding compa- cial banks in the state.1 Bank, with total deposits of nies. The Board also notes that Applicants will estab- $3.6 million, is one of the smaller commercial banks in lish Bank de novo, and that Bank will be strongly Missouri, controlling 0.01 percent of total deposits in capitalized and small in relation to Applicants. the state. Upon consummation of the proposal, Appli- Based on these and all of the other facts of record, cant would remain the state's 13th largest banking including the commitments made by Applicants, the organization with $283.7 million in deposits, which Board concludes that financial and managerial factors represents less than 1 percent of the state's total in this case are consistent with approval of the applica- commercial bank deposits. Accordingly, consummations. The Board has also determined that consider- tion of the proposal would not have any significant ations relating to the convenience and needs of the adverse effect on the concentration of banking recommunity to be served are consistent with approval. sources in Missouri. Based upon the foregoing and other facts of record, Two of Applicant's subsidiary banks, and Bank, the Board has determined that consummation of the operate in the St. Louis banking market.2 Applicant's transaction would be consistent with the public inter- subsidiary banks in the St. Louis market, with total est and that the applications should be and hereby are deposits of $229.7 million, render Applicant the marapproved. The transaction shall not be consummated ket's 10th largest commercial banking organization, before the thirtieth calendar day following the effective controlling 1.4 percent of deposits in commercial date of this Order, or later than three months after the banks in that market. Bank is the smallest of the 61 effective date of this Order, unless such period is commercial banking organizations in the St. Louis extended for good cause by the Board or by the market, representing only 0.02 percent of total com- Federal Reserve Bank of New York pursuant to mercial bank deposits in the market. delegated authority. The St. Louis banking market is unconcentrated and By order of the Board of Governors, effective would remain so after consummation of the proposal. August 25, 1986. Upon consummation, Applicant would control 1.45 percent of total deposits in commercial banks in the Voting for this action: Chairman Volcker and Governors market and remain the market's 10th largest commer- Wallich, Rice, and Johnson. Absent and not voting: Gover- cial banking organization. Accordingly, the proposed nors Seger, Angell, and Heller. acquisition is not likely to have a significant adverse effect on existing competition in the St. Louis banking JAMES MCAFEE market. [SEAL] Associate Secretary of the Board The financial and managerial resources of Applicant, its subsidiary banks, and Bank are consistent with approval. Considerations relating to the convenience and needs of the communities to be served also Southside Bancshares Corp. are consistent with approval of the application. St. Louis, Missouri Based on the foregoing and other facts of record, the Board has determined that consummation of the proposed acquisition would be in the public interest and Order Approving Acquisition of a Bank that the application should be approved. Accordingly, the application is approved for the reasons summa- Southside Bancshares Corp., St. Louis, Missouri, has rized above. The transaction shall not be consummatapplied for the Board's approval pursuant to section ed before the thirtieth calendar day following the 3(a)(3) of the Bank Holding Company Act ("Act") (12 U.S.C. § 1842(a)(3)) to acquire at least 92.3 percent of the voting shares of Weldon Spring Bank ("Bank"), Weldon Spring, Missouri. Notice of the application, affording interested persons an opportunity to submit comments, has been 1. Banking data are as of June 30, 1985. given in accordance with section 3(b) of the Act. The 2. The St. Louis banking market is approximated by the St. Louis Ranally Metro Area, adjusted to include all of St. Charles and time for filing comments has expired, and the Board Jefferson Counties, Missouri, and all of Lebanon and Mascoutah has considered the application and all comments re- townships in St. Clair County, Illinois. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

724 Federal Reserve Bulletin • October 1986 effective date of this Order, or later than three months tion in the District of Columbia. The association after the effective date of this Order, unless such currently operates 13 offices located in the District of period is extended for good cause by the Board or by Columbia, and one grandfathered office in Langley the Federal Reserve Bank of St. Louis, acting pursu- Park, Maryland. National Permanent has three active ant to delegated authority. and one inactive service corporation subsidiaries. The By order of the Board of Governors, effective three active service corporations engage in mortgage August 21, 1986. operations, real estate development, and insurance agency activities, respectively. Voting for this action: Chairman Volcker and Governors Although the Board has not added the operation of a Wallich, Rice, and Seger. Absent and not voting: Governors federal savings bank to the list of activities specified in Angell, Johnson, and Heller. section 225.25(b) of Regulation Y as generally permissible for bank holding companies, the Board has WILLIAM W. WILES previously determined by order that the operation of a [SEAL] Secretary of the Board federal savings bank (and thrift institutions generally) is closely related to banking.3 By letter dated June 18, 1986, the Federal Home Orders Issued Under Section 4 of the Bank Loan Bank Board ("Bank Board") requested that the Holding Company Act Board act immediately upon the application in view of the emergency nature of the situation at National Citicorp Permanent and its deteriorating financial condition. New York, New York The Bank Board indicated that National Permanent has incurred significant operating losses over a pro- Order Approving Application to Acquire Federal longed period. Absent the Federal Savings and Loan Savings Bank Insurance Corporation's ("FSLIC") action to provide financial assistance to this institution, National Perma- Citicorp, New York, New York, a bank holding com- nent would have reported a negative net worth of $51.8 pany within the meaning of the Bank Holding Compa- million at year-end 1985. ny Act, 12 U.S.C. § 1841 et seq. ("Act" or "BHC Despite financial assistance from the FSLIC, how- Act"), has applied pursuant to section 4(c)(8) of the ever, National Permanent's financial condition has Act and section 225.23 of the Board's Regulation Y continued to deteriorate. The Bank Board stated that (12 C.F.R. § 225.23), to acquire through its subsid- National Permanent's regulatory net worth has been iary, Citicorp Person-to-Person, Inc., St. Louis, Mis- reduced to a negative $317,000 as of May 31, 1986, and souri, all of the voting shares of the successor to that its deposit base is clearly eroding, indicating a loss National Permanent Bank, FSB ("National Perma- of public confidence in the institution.4 nent"), Washington, D.C., and indirectly its wholly The Bank Board also stated that in view of the owned service corporation subsidiaries.1 Upon con- uncertainty regarding the institution's future prossummation of the proposed acquisition, Applicant will pects, National Permanent has found it difficult to engage through National Permanent in the activity of attract and retain competent middle and senior level operating a federal savings bank in the District of management, and that its mortgage lending operations Columbia and Maryland. in particular have been adversely affected. The Bank Citicorp, with total consolidated assets of $181.9 Board concludes that "there is a serious risk that the billion, is the largest banking organization in the management of National Permanent will collapse in nation.2 It presently operates eight banking subsidiar- the near future, absent a permanent solution to the ies and engages directly and through subsidiaries in a institution's problems." variety of nonbanking activities, including the opera- In its letter, the Bank Board urged the Board to act tion of three thrift institution subsidiaries in California, immediately on this application in order to restore Illinois and Florida. public confidence in National Permanent, maintain National Permanent, with $1.14 billion in assets as confidence in the savings and loan industry generally, of April 30, 1986, is the second largest savings institu- 1. National Permanent is currently operated as a mutual associa- 3. See e.g., First Pacific Investments Limited, 72 FEDERAL REtion. In order to effect consummation of the proposal, National SERVE BULLETIN 342 (1986); F.N.B. Corporation, 71 FEDERAL RE- Permanent will be converted to a federal stock savings association and SERVE BULLETIN 340 (1985). renamed National Permanent Savings & Loan. 4. There has been a total net savings outflow of $110.52 million, or 2. Asset data are as of March 31, 1986. approximately 13.1 percent of deposits, over the past five months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 725 and stabilize the daily increasing potential cost to the activities were not a proper incident to banking be- FSLIC. The Bank Board based its request for immedi- cause the potential adverse effects of generally allowate action on the current financial condition of Nation- ing affiliations of banks and S&Ls were then sufficiental Permanent and its weakened management, as well ly strong to outweigh any public benefits that might as the substantial public benefits of the proposal, result from individual cases. {D.H. Baldwin & Co., 63 including the significant and stabilizing capital injec- FEDERAL RESERVE BULLETIN 280 (1977)). tion proposed by Applicant. Because of the considerations elaborated in D.H. In light of the Bank Board's request for immediate Baldwin, the Board has not permitted bank holding action, the Board promptly caused notice of the appli- companies to acquire thrift institutions on a general cation to be published in the Federal Register and in a basis. However, the Board has consistently regarded newspaper of general circulation in those areas served the BHC Act as authorizing it to permit such an by National Permanent. The notices provided interest- acquisition and has approved several such proposals ed persons until July 3, 1986, to comment on the involving failing thrift institutions on the basis that any application.5 The Board has determined that no further adverse effects would be overcome by the public public comment period is necessary. benefits of preserving the failing thrift institutions.7 Section 4(c)(8) of the BHC Act (12 U.S.C. The Board approved acquisitions of failing thrift § 1843(c)(8)) authorizes a bank holding company to institutions by bank holding companies both before engage in nonbanking activities and acquire shares of a and after the enactment of the Garn-St Germain Act. nonbanking company that engages in activities deter- That Act recognized the Board's authority under secmined by the Board to be "so closely related to tion 4(c)(8) of the BHC Act to approve such acquisibanking or managing or controlling banks as to be a tions by authorizing the Board in such cases to disproper incident thereto." The Act provides that the pense with the notice and hearing requirements of Board may make such determinations by order or by section 4(c)(8) under appropriate emergency circumregulation. The Board has determined previously that stances. Although the Garn-St Germain Act expired the operation of a thrift institution is closely related to on July 15, 1986, the Board's authority to permit a banking, and reaffirms that determination in this Or- bank holding company to acquire a failing thrift under der.6 the net public benefits test of section 4(c)(8) remains With respect to the "proper incident" requirement, unaffected. Rainier Bancorporation, 72 FEDERAL REsection 4(c)(8) of the BHC Act requires the Board to SERVE BULLETIN 666; see also Citicorp, 68 FEDERAL consider whether the performance of the activity by an RESERVE BULLETIN 656 (1982). affiliate of a holding company "can reasonably be The Board has reexamined, in the context of this expected to produce benefits to the public, such as application, the general adverse factors cited in the greater convenience, increased competition, or gains Board's 1977 D.H. Baldwin decision, including regulain efficiency that outweigh possible adverse effects, tory conflict, erosion of institutional rivalry, and the such as undue concentration of resources, decreased potential for undermining interstate banking prohibior unfair competition, conflicts of interests, or un- tions. The Board has also considered the adverse sound banking practices." factors that might be associated with this particular In 1977, the Board considered the general question application, including the potential for decreased or whether savings and loan association ("S&L") activi- unfair competition, concentration of resources, conties are a proper incident to banking. At that time, the flicts of interests, financial risks, diversion of funds, Board determined that, as a general matter, S&L and participation in impermissible activities. Based upon the Board's review of the record, the Board has determined that substantial benefits to the public in this case outweigh the generalized adverse effects found by the Board in the D.H. Baldwin case. 5. Other than the request for stay discussed below, the Board has received one other untimely comment and request for hearing on the The Board considers Applicant's acquisition of Naproposal. The commenter, in litigation with Citicorp over a credit card tional Permanent to be a substantial and compelling application, protested the transfer of the litigation from state to federal court, and has requested a hearing on Citicorp consumer credit policies prior to Board consideration of this proposal. The Board reviewed the commenter's submissions and has determined that these allegations do not raise a genuine issue of material fact that would warrant a hearing. Moreover, the commenter is pursuing his available remedies in the proper forum, the courts. Accordingly, the request for hearing is denied. 6. See, e.g., D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 (1977); Interstate Financial Corp., 68 FEDERAL RESERVE BULLE- 7. See, e.g., F.N.B. Corporation, supra (1985); The Chase Manhat- TIN 316 (1982); Old Stone Corporation, 69 FEDERAL RESERVE BULLE- tan Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Inter- TIN 812 (1983). state Financial Corp., supra. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

726 Federal Reserve Bulletin • October 1986 public benefit in that Applicant will provide National In its recent Order approving Applicant's acquisi- Permanent with new capital sufficient to enable it to tion of Quotron Systems, Inc., the Board, noting that achieve and maintain a satisfactory tangible primary Applicant's pro forma tangible primary capital would capital to assets ratio, to strengthen its management, be only slightly above the minimum specified in the and to permit National Permanent to continue its Capital Adequacy Guidelines, relied upon the expectaoperations and remain a viable competitor. tion that Applicant would use its capacity to raise The proposed acquisition would not substantially capital to restore its tangible primary capital ratio to lessen or otherwise decrease competition in any rele- pre-acquisition levels.12 vant market. On the contrary, the acquisition would Applicant has raised substantial amounts of equity have the substantial beneficial effect of preserving capital, and its primary capital on a tangible basis is in National Permanent as an effective competitor. Both compliance with the Board's expectations stated in the Applicant and National Permanent engage in deposit Quotron Order. The Board has also considered as a taking8 and mortgage lending within the Washington, significant factor Applicant's program of capital im- D.C. banking market.9 In view of the small market provement. shares involved, the unconcentrated nature of the Accordingly, on the basis of the above considermarket, the weak condition of National Permanent, ations and Applicant's continuing efforts to strengthen and the large number of banks and thrift institutions its capital position, the Board concludes that financial that would remain in the market, the acquisition would factors are consistent with approval of the proposal. have no substantial adverse effect on existing or In its evaluation of this application, the Board has potential competition in the market. also considered that certain allegations have been In evaluating this application, the Board has consid- raised about the actions of Citicorp or its agents in ered the financial resources of Applicant and the effect lobbying efforts surrounding the recent passage of on these resources of the proposed acquisition of interstate banking legislation by the District of Colum- National Permanent. The Board has stated and contin- bia. Based upon its review of the record as of this date, ues to believe that capital adequacy is an especially the Board has found no evidence implicating Citicorp important factor in the analysis of bank holding com- management in this affair other than those of its pany proposals, particularly in transactions where a officials or agents previously publicly identified. In significant acquisition is proposed.10 view of the current record and in light of certain In this regard, the Board expects that banking commitments by Applicant relating to management organizations experiencing substantial growth inter- controls over its lobbying activities, including the nally and by acquisition, such as Applicant, should conduct of a review by an independent accounting firm maintain a strong capital position substantially above of its lobbying functions, the Board concludes that the minimum levels specified in the Capital Adequacy Applicant's managerial resources are consistent with Guidelines without significant reliance on intangibles, approval of the proposal. particularly goodwill.11 The Board will carefully ana- To guard against possible adverse effects of affililyze the effect of expansion proposals on the preserva- ation between a banking organization and a savings tion or achievement of such capital positions. bank, including the potential for unfair competition and diversion of funds, the Board conditions its approval as follows:13 1. Applicant will operate National Permanent as a 8. Within the Washington, D.C., RMA (see below), National federal savings bank having as its primary purpose Permanent is the fourteenth largest depository institution among the provision of residential housing credit. National banks and thrift institutions in the market, with total deposits of $759.8 million, representing approximately 2.21 percent of market deposits in Permanent will limit its activities to those currently banks and thrift institutions as of June 30, 1984. Citicorp, through its permitted to thrift institutions under the Home Own- Citibank (Maryland), N.A., credit card bank subsidiary, solicits deposits by mail from holders of the Choice credit card, including ers' Loan Act, but shall not engage in any activity Choice card-holders within the Washington, D.C., RMA. These prohibited to bank holding companies and their deposits represent an insignificant portion of the relevant banking market. 9. The Washington, D.C., banking market is defined as the Washington, D.C., Ranally Metropolitan Area ("RMA"), which comprises the District of Columbia and the surrounding suburban areas of Virginia and Maryland. 10. See e.g., Chase Manhattan Corporation, 70 FEDERAL RESERVE 12. Citicorp, 72 FEDERAL RESERVE BULLETIN 497 (1986). BULLETIN 529 (1984); NCNB Corporation, 69 FEDERAL RESERVE 13. The Board recently requested public comment on a proposal by BULLETIN 49 (1983). Applicant to remove certain of the restrictions on the tandem opera- 11. Capital Adequacy Guidelines, 50 Federal Register 16,057, tion of a thrift institution and its bank holding company affiliates. 51 16,066-67 (April 24, 1985) (71 FEDERAL RESERVE BULLETIN 445 Federal Register 18,797 (1986). The Board will review the conditions (1985)); National City Corporation, 70 FEDERAL RESERVE BULLETIN established in this Order in the light of any decision taken in 743, 746 (1984). connection with this request for public comment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 727 subsidiaries under section 4(c)(8) of the Bank Hold- a. National Permanent will continue to originate ing Company Act. As discussed below, these limita- the same volume of District of Columbia morttions will apply to National Permanent's wholly gages as originated in 1985; owned service corporations. b. National Permanent will use its commercial 2. National Permanent will not establish or operate lending powers under the Home Owners' Loan a remote service unit at any location outside the Act for the benefit of small businesses in the District of Columbia. District; and 3. National Permanent will not establish or operate c. National Permanent will develop community branches at locations not permissible for national or programs specifically tailored to the needs of the state banks located in the District of Columbia.14 District of Columbia communities it serves. 4. National Permanent will be operated as a separate, independent, profit-oriented corporate entity The Board believes these commitments by Applicant and shall not be operated in tandem with any other relating to the convenience and needs of the communisubsidiary of Applicant. Applicant and National ties to be served lend additional weight towards ap- Permanent will limit their operations to effect this proval of the application. condition and will observe the following conditions: By virtue of this proposal, Applicant also will aca. No banking or other subsidiary of Applicant quire National Permanent's service corporation subwill link its deposit-taking activities to accounts at sidiaries, which engage in certain insurance and real National Permanent in a sweeping arrangement or estate development activities impermissible for bank similar arrangement. holding companies and their subsidiaries. In any applib. Neither Applicant nor any of its subsidiaries cation by a bank holding company to acquire a nonwill solicit deposits or loans for National Perma- banking organization, the nonbanking organization nent, nor shall National Permanent solicit depos- ordinarily would be required to divest any impermissiits or loans for any other subsidiary of Applicant. ble assets, or to cease to engage in any impermissible 5. Applicant shall not change National Permanent's activities, prior to consummation of the acquisition. name to any title that might confuse the public Applicant has committed to cease the impermissible regarding its status as a nonbank, thrift institution. insurance activities upon consummation of this pro- 6. National Permanent will not convert its charter posal. In view of the emergency nature of this acquisito that of a national or state commercial bank tion and the compelling public benefits provided therewithout the Board's prior approval. by, the Board has determined to grant Applicant's 7. To the extent necessary to insure independent request to retain the service corporations' interests in operation of National Permanent and prevent the certain real estate development activities for a twoimproper diversion of funds, there shall be no trans- year period.15 This will allow for an orderly divestiture actions between National Permanent and Applicant of these assets without further loss to National Permaor any of its subsidiaries without the prior approval nent. of the Federal Reserve Bank of New York. This The Board concludes that consummation of the limitation encompasses the transfer, purchase, sale proposal, subject to the conditions set out above, may or loan of any assets or liabilities, but does not reasonably be expected not to result in conflicts of include infusions of capital from Applicant, the interests, unsound banking practices, decreased or payment of dividends by National Permanent, or the unfair competition, undue concentration of resources, sale of residential real estate loans from National or other adverse effects. Permanent to any subsidiary of Applicant. Based upon the foregoing and other facts and circumstances reflected in the record, the Board has In addition, in connection with the application, determined that the acquisition of National Permanent Applicant has made a number of commitments de- by Applicant would result in substantial and compelsigned to, among other things, increase the provision ling public benefits that are sufficient to outweigh any of lending and other financial services in low- and adverse effects that may reasonably be expected to moderate-income neighborhoods in the District of result from this proposal, including any potential ad- Columbia. In particular, Citicorp has committed that: verse effects of the affiliation of a commercial banking 15. This is consistent with the provisions of section 4 of the BHC 14. National Permanent may, however, retain its existing branch in Act relating to the time for compliance by bank holding companies Maryland. with the nonbanking provisions of that Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

728 Federal Reserve Bulletin • October 1986 organization with a thrift institution. Accordingly, the benefits of the proposal.16 As the Board has previously application is approved subject to the conditions de- held, that evaluation does not, however, include a scribed in this Order, and the record of the application. review of the FSLIC's selection of the appropriate bidder for the failing thrift.17 That decision is committed to the exclusive discretion of the FSLIC. Request for Stay Accordingly, because Mr. Getty has failed to raise a cognizable claim under the separate statutory provi- The Board has received an untimely comment request- sions of the BHC Act, the Board hereby denies the ing that the Board stay its consideration of this appli- request for an administrative stay of the Board's cation and await the outcome of a lawsuit against the action on this application. In the light of the statutory Bank Board by an unsuccessful bidder, Mr. Gordon P. framework described above, the Board is not the Getty, who has challenged the award of National proper forum in which to challenge those statutory Permanent to Citicorp. In his lawsuit, the petitioner determinations explicitly left by the Congress to the asserts that the Bank Board failed to follow the intra- Bank Board. The Board's approval of this acquisition industry and intra-state priorities contained in the and its denial of the stay request do not, however, Garn-St Germain Act. The petitioner also argues that reflect any decision on the Board's part regarding the the Bank Board incorrectly determined that Citicorp's merits of Mr. Getty's claims in ongoing litigation with bid was the "lowest acceptable offer" for National respect to the bidding procedures before the FSLIC. Permanent as provided in the Garn-St Germain Act. The Board's decision in this case is subject to the Finally, the petitioner has sought a judicial stay and conditions set forth in Regulation Y, including sections expedited review of the Bank Board's actions regard- 225.4(d) and 225.23(b), and to the Board's authority to ing National Permanent. The U.S. Court of Appeals require such modification or termination of the activifor the District of Columbia has denied petitioner's ties of a holding company or any of its subsidiaries as request for a stay, stating that "the public interest the Board finds necessary to assure compliance with, weighs heavily in favor of denying a stay and expedi- or to prevent evasion of, the provisions and purposes tious consummation of the acquisition." Upon recon- of the Act and the Board's regulations and orders sideration, the Court of Appeals granted the concur- issued thereunder. This transaction shall not be conrent requests of petitioner and the Bank Board for summated later than three months after the effective expedited review of the Bank Board's action. date of this Order, unless that period is extended for Petitioner now requests that the Board stay its good cause by the Board or by the Federal Reserve action on the application pending the outcome of the Bank of New York, pursuant to authority hereby review petition before the Court of Appeals. For the delegated. reasons set forth below, the Board has determined to By order of the Board of Governors, effective deny the request for stay. August 1, 1986. The emergency acquisition provisions of the Garn- St Germain Act provide for a division of responsibil- Voting for this action: Governors Wallich, Rice, Seger and ities between the Board under the BHC Act and the Angell. Abstaining from this action: Governor Johnson. Governor Wallich abstained from the insurance portion of Bank Board under the National Housing Act. Under this action. Absent and not voting: Chairman Volcker. that Congressionally mandated division of responsibility, the Bank Board is authorized to arrange for the acquisition or merger of failing thrift institutions under JAMES MCAFEE specified conditions, and after a consideration of a [SEAL] Associate Secretary of the Board series of priorities that favor intra-industry and intrastate transactions over inter-industry and interstate transactions. The statute also provides that the Bank Board's calculations and estimations of offers shall be determinative. While the Garn-St Germain Act assigns to the Bank Board the responsibility for selection of the appropriate solution to a failing thrift institution situation, that statute also requires the Board's consideration of the effects of a proposal involving a bank holding company 16. Section 4(c)(8) of the BHC Act does not require a determination acquisition under the prudential standards of section that a given proposal is the most desirable that could be presented. 4(c)(8) of the BHC Act, which involve an evaluation of The fact that alternative purchasers may be available is not determinative. the possible adverse effects and anticipated public 17. Citicorp, 68 FEDERAL RESERVE BULLETIN 656, 668 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 729 Concurring Statement of Governor Angell retirement, health care, disability income, life insurance,2 and cafeteria plans.3 I join in the Board's decision to approve this acquisi- Company's activities can be divided into four basic tion in view of the substantial public benefits in categories: restoring a failing thrift institution to a position as an 1. Plan Design—designing employee benefit plans, effective provider of financial services to the commu- including determining actuarial funding levels and nity. My approval should not be interpreted as indicat- cost estimates, including the performance of single ing my satisfaction with the capital position of Citicorp company salary surveys; or other large banking organizations. I believe that the 2. Plan Implementation—providing assistance in capital positions of such organizations need strength- implementing plans, including assistance in the ening, and note with approval Citicorp's efforts to preparation of plan documents and the implementaenhance its capital. tion of employee benefit administration systems; August 1, 1986 3. Administrative Services—providing administrative services including recordkeeping services, calculating and certifying employee benefits, preparing Norstar Bancorp, Inc. periodic, actuarial and other reports and govern- Albany, New York ment filings pursuant to ERISA, and assisting in IRS audits of plans; Order Approving the Acquisition of a Company 4. Employee Communications—developing employ- Engaged in Providing Employee Benefits Consulting ee communication programs, including informing Services clients of developments in the field of employee benefit programs through newsletters, other corre- Norstar Bancorp, Inc., Albany, New York, a bank spondence, and participation in seminars, public holding company within the meaning of the Bank programs and other forums relating to such develop- Holding Company Act ("Act"), 12 U.S.C. § 1841 ments. et seq., has applied for the Board's approval under section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), and Applicant has also applied to provide subaccounting section 225.23 of the Board's Regulation Y, 12 C.F.R. for individual funds in pooled escrow accounts main- § 225.23, to acquire all of the voting shares of Smith, tained at banks and other financial institutions and to Everett & Associates, Inc., Rochester, New York assist companies in determining appropriate salary ("Company"). structures by providing clients with industry-wide Notice of the application, affording interested per- salary surveys. These activities are permissible for sons an opportunity to submit comments on the pro- bank holding companies pursuant to sections posal, has been duly published (51 Federal Register 225.25(b)(4) and (7) of Regulation Y, 12 U.S.C. 17,245 (1986)). The time for filing comments has §§ 1843(b)(4) and (7). expired, and the Board has considered the application The Board has previously approved applications by and all comments received in light of the public bank holding companies, including Applicant, to prointerest factors set forth in section 4(c)(8) of the Act. vide employee benefits consulting services with regard Applicant, a bank holding company by virtue of its to defined benefit and defined contribution plans.4 In ownership of commercial banks in New York and its Orders, the Board determined that the provision of Maine, has total consolidated assets of $9.0 billion.1 services for these types of plans encompassed the type Applicant also engages in certain nonbanking activi- of services banks have traditionally performed and ties, including discount brokerage, credit-related in- that the provision of employee benefits consulting surance activities, and mortgage banking activities. services for these plans was operationally or function- Applicant proposes to acquire Company, an employee benefits consulting firm that provides a full range of services with regard to employee benefits plans. Applicant proposes to provide consulting services with regard to executive compensation, defined 2. Norstar has committed that it will not act as an underwriter, benefit, defined contribution, insured and uninsured agent, or broker with regard to the insurance plans. 3. A cafeteria plan is a compensation plan in which an employer allows each eligible employee to allocate a certain percentage of the employee's compensation among such benefits as the employee may select. 4. BankVermont Corporation, 72 FEDERAL RESERVE BULLETIN 337 (1986); Norstar Bancorp, Inc., 71 FEDERAL RESERVE BULLETIN 1. Data are as of December 31, 1985. 656 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

730 Federal Reserve Bulletin • October 1986 ally related to the trust services that banks traditional- benefits and lost future earnings.9 The testimony proly provide to customers. Although these types of plans posed by Applicant relies primarily on the use of require actuarial analysis, which is generally not per- actuarial skills. This service would be provided to formed by trust companies or banks, the actuarial clients as well as other individuals who are not otherservices are an integral part of providing employee wise clients for Company's other services. Norstar benefits services, are not provided as an independent asserts that its proposed activity is either incidental to service, and are limited in scope to determining the the services that Company would provide or is closely appropriate funding level of the plans. Thus, the Board related to banking. concluded that the provision of employee benefits In order to determine if an activity is closely related consulting services for defined benefit and defined to banking under section 4(c)(8) of the Act the Board contribution plans is closely related to banking. has relied on guidelines that the federal courts have Applicant now proposes to expand the types of established.10 Under these guidelines, an activity may plans for which it will provide consulting services to be found to be closely related to banking if it is include health insurance, life insurance, and cafeteria demonstrated: plans. Although the provision of consulting services and advice for such plans has not previously been (1) that banks generally have, in fact, provided found to be permissible for bank holding companies, the proposed services; the Board believes that the activity essentially in- (2) that banks generally provide services that volves the provision of financial information and in are operationally or functionally so similar to this regard, is similar to the provision of services for the proposed services as to equip them particudefined benefit and defined contribution plans as well larly well to provide the proposed services; or as a number of financial advisory services and that are (3) that banks generally provide services that permissible for bank holding companies. For example, are so integrally related to the proposed service bank holding companies may provide investment and as to require their provision in a specialized general economic information and advice to clients,5 form. consumer financial counseling, tax preparation and planning,6 and financial data processing and transmis- The Board also may consider other factors in detersion.7 These activities result in the provision of finan- mining whether an activity is closely related to bankcial information to clients regarding tax planning, ing and has stated that it will consider evidence of any retirement and estate planning, and insurance. Em- reasonable connection to banking in making its analyployee benefits consulting is similar to these activities sis.11 In addition, section 225.21(a)(2) of Regulation Y because it provides companies with information with permits a bank holding company to engage in incidenregard to the choice of insurance plans and investment tal activities that are necessary to carry on activities plans, and proposals for assisting companies to pro- that the Board has determined are closely related to vide employees with the best alternative uses for their banking.12 compensation. Accordingly, the Board concludes that In its 1985 Order approving Norstar's acquisition of the provision of consulting services with regard to the Altman & Brown, the Board determined that the expanded list of employee benefit plans is closely provision of expert witness testimony was not a perrelated to banking.8 missible activity for bank holding companies.13 The Norstar also has applied to provide expert witness record does not contain any evidence that banks testimony with regard to the calculation of employee 9. This type of testimony is commonly used in determining damages in wrongful death and personal injury cases. 10. National Courier Association v. Board of Governors, 516 F.2d 5. 12 C.F.R. § 225.25(b)(4). 1229 (D.C. Cir. 1975). 6. United City Corporation, 71 FEDERAL RESERVE BULLETIN 662 11. 49 Federal Register 806 (1984). (1985); Citicorp, 65 FEDERAL RESERVE BULLETIN 265 (1979). The 12. The courts have determined that, to be permissible for bank Board recently decided to add consumer financial counseling and tax holding companies, an incidental activity must be necessary to the preparation and planning to the list of activities that are permissible successful performance of a closely related activity. See Association for bank holding companies. of Data Processing Service Organizations, Inc. v. Board of Governors 7. 12 C.F.R. § 225.25(b)(7) (1986). of the Federal Reserve System, 745 F.2d 677 (D.C. Cir. 1984) (sale of 8. Applicant has also applied to perform single-company salary general purpose hardware with software); National Courier Ass'n v. surveys. Company has stated that the client for the surveys would Board of Governors of the Federal Reserve System, 516 F.2d 1229 already be customers of the Company and the activity would not be an (D.C. Cir. 1975) (general courier services not needed in order to independent fee-generating business for the Company. Accordingly, provide courier services for banking and financial materials). the Board concludes that the provision of single-company surveys can 13. See Norstar Bancorp, 71 FEDERAL RESERVE BULLETIN at 658 be viewed as part of the plan design aspect of the employee benefits n.6. Because of this determination, the Board did not publish notice of consulting activity. this activity in connection with the current application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 731 generally perform activities that rely on actuarial anal- nience to the customers for this service. In addition, ysis to the extent proposed in this application. Fur- the increase in the number of companies that can thermore, the record does not show that banks gener- conduct a broad array of services with regard to ally provide functionally equivalent services or that employee benefits consulting is likely to enhance the proposed service is integrally related to services competition in the provision of this service. that are provided by banks. The Board has determined There is no evidence in the record to indicate that that limited actuarial analysis is permissible only be- Applicant's performance of the proposed activity cause it was performed as an essential part of a would lead to any undue concentration of resources, package of otherwise permissible services. The Board decreased or unfair competition, unsound banking does not believe that an activity that primarily relies practices, or other adverse effects. Clients currently on actuarial analysis that is not performed in connec- have the option to use any component of Applicant's tion with other permissible activities is closely related employee benefits consulting services individually, as to banking. well as the entire package of services, and Applicant The Board also does not believe that providing has committed to continue to avoid tying any employexpert witness testimony, as proposed by Applicant, is ee benefits consulting service to the purchase of the permissible as an incidental activity. Under Regulation entire employee benefits package or to any other Y and judicial decisions construing the phrase "inci- service offered by Applicant or its subsidiaries. dental activities," in order to be considered incidental, Based upon the foregoing and all the facts of record, an activity must be necessary to carry on a closely the Board has determined that the balance of public related activity.14 Although the revenue derived from interest factors it is required to consider under section the activity would represent only 2 percent of Compa- 4(c)(8) is favorable. Accordingly, the application is ny's total revenues, Applicant has not presented any hereby approved. This determination is subject to the evidence to indicate that the performance of the activi- conditions set forth in sections 225.4(d) and ty is necessary to the provision of employee benefits 225.23(b)(3) of the Board's Regulation Y, 12 C.F.R. consulting services. Indeed, Applicant proposes to §§ 225.4(d) and 225.23(b)(3). The approval is also provide the service to entities that are not customers subject to the Board's authority to require modificafor the employee benefits consulting services, a fact tion or termination of the activities of the holding that indicates that the service is not necessarily con- company or any of its subsidiaries as the Board finds nected with the provision of employee benefits con- necessary to assure compliance with the provisions sulting services. Accordingly, the Board concludes and purposes of the Act and the Board's regulations that bank holding companies may not provided expert and orders issued thereunder, or to prevent evasion witness testimony with regard to the calculation of thereof. employee benefits and lost future earnings. By order of the Board of Governors, effective In order to approve this application, the Board must August 19, 1986. also find that the performance of the proposed activity "can reasonably be expected to produce benefits to Voting for this action: Chairman Volcker and Governors the public, such as greater convenience, increased Wallich, Rice, Seger, Angell, and Johnson. competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration WILLIAM W. WILES of resources, decreased or unfair competition, con- [SEAL] Secretary of the Board flicts of interests, or unsound banking practices." With respect to the proposed employee benefits consulting activities of Applicant, it appears from the Orders Issued Under Sections 3 and 4 of the record that authorizing the activity would enhance Bank Holding Company Act competition and provide greater convenience and increased efficiencies, without resulting in any adverse Excel Bancorp, Inc. consequences. Quincy, Massachusetts Clients will have the option of obtaining a complete package of employee benefits consulting services from Order Approving Formation of a Bank Holding a single company, including those investment and fund Company and Acquisition of Nonbanking management services that can be provided by other Subsidiaries subsidiaries of Applicant, resulting in increased conve- Excel Bancorp, Inc., Quincy, Massachusetts, has applied for the Board's approval under section 3(a)(1) of 14. National Courier Association, 516 F.2d at 1240-41. the Bank Holding Company Act ("Act") (12 U.S.C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

732 Federal Reserve Bulletin • October 1986 § 1842(a)(1)), to become a bank holding company by are not insured by the FSLIC. Accordingly, Bank is a acquiring Quincy Savings Bank, Quincy, Massachu- "bank" for purposes of the Act, and Applicant's setts ("Bank"). Bank is a state-chartered mutual sav- application to become a bank holding company ings bank, the accounts of which are insured by the through acquisition of Bank has been considered in Federal Deposit Insurance Corporation. Bank has light of the requirements of section 3 of the Act adopted a conversion plan by which it will convert to a pertaining to the acquisition of banks. state-chartered savings bank. Applicant will acquire Applicant is a nonoperating corporation with no Bank following Bank's conversion from mutual to subsidiaries, formed for the purpose of acquiring Bank stock form. and Bank's subsidiaries. Bank is the 27th largest Applicant also has applied under section 4(c)(8) of depository institution among commercial banks and the Act, 12 U.S.C. § 1843(c)(8), to acquire 20 percent thrift institutions in Massachusetts, with deposits of of the shares of Mutual Advisory Corporation, Brain- approximately $391.5 million, controlling 0.50 percent tree, Massachusetts ("MAC"), and 29 percent of the of the total deposits in commercial banks and thrift shares of First National Systems Corporation, Cotuit, institutions in the state.2 Bank is the 23rd largest Massachusetts ("Systems Corp."). These shares are depository institution in the metropolitan Boston currently owned by Bank; the remainder of the shares banking market,3 controlling 0.70 percent of the total of MAC are owned by other state-chartered savings deposits in commercial banks and thrift institutions in banks. MAC engages in data processing and discount the market.4 Because this proposal involves the formabrokerage services that are permissible for bank hold- tion of a bank holding company, consummation of the ing companies under the Board's Regulation Y, proposal would not have any significant effect on 12 C.F.R. §§ 225.25(b)(7),(15). Systems Corp. pro- existing or probable future competition, nor would it vides data processing software for back-office ac- significantly increase the concentration of banking counting systems designed for the provision of finan- resources in Bank's markets or in the State of Massacial data only, an activity also permissible under chusetts. Regulation Y, 12 C.F.R. § 225.25(b)(7). Bank engages through subsidiaries in certain real Notice of the applications, affording opportunity for estate investment and development activities authointerested persons to submit comments, has been rized pursuant to state law. The Board has requested given in accordance with sections 3(b) and 4(c)(8) of comment regarding the permissible scope and extent the Act (51 Federal Register 23,832, 24,580 (1986)). of real estate investment and development activities of The time for filing comments has expired, and the holding company banks and their subsidiaries.5 Pend- Board has considered the applications and all com- ing completion of the Board's rulemaking on these ments received in light of the factors set forth in issues, the Board has, in a limited number of insections 3(c) and 4(c)(8) of the Act (12 U.S.C. stances, permitted state-chartered savings banks to §§ 1842(c), 1843(c)(8)). continue to engage in real estate investment and The Board has previously determined that a state development activities, provided that the savings savings bank is a "bank" under section 2(c) of the Act banks limit the level and scope of these activities and if it accepts demand deposits, engages in the business maintain adequate capital to support the activities.6 of making commercial loans, and is not covered by the Applicant has provided commitments that so limit exemption created by the Garn-St Germain Deposi- Bank's real estate activities, and has committed to tory Institutions Deregulation Act of 1982 for thrift conform these activities to the results of the Board's institutions insured by the Federal Savings and Loan rulemaking. Accordingly, subject to these commit- Insurance Corporation ("FSLIC") or operating under a charter by the Federal Home Loan Bank Board.1 Bank accepts demand deposits and engages in the business of making commercial loans, and its deposits 2. Banking data are as of December 31, 1985. 3. The metropolitan Boston banking market is approximated by the Boston Ranally Metropolitan Area, the towns of Ayer, Berlin, Groton, Harvard, Pepperell and Shirley, Massachusetts, and those portions of Bellingham, Carver, Lakeville, Middleboro and Plymouth, 1. First Fidelity Bancorporation, 72 FEDERAL RESERVE BULLETIN Massachusetts not already included in the Boston Ranally Metropoli- 487 (1986); BankVermont Corporation, 70 FEDERAL RESERVE BULLE- tan Area, less the towns of Brentwood, Chester and Derry, New TIN 829 (1984); The Frankford Corporation, 70 FEDERAL RESERVE Hampsire. BULLETIN 654 (1984); The One Bancorp, 70 FEDERAL RESERVE 4. Market data are as of June 30, 1985. BULLETIN 359 (1984); First NH Banks, Inc., 69 FEDERAL RESERVE 5. 50 Federal Register 4519 (1985). BULLETIN 874 (1983); Amoskeag Bank Shares, Inc., 69 FEDERAL 6. See, e.g., First Fidelity Bancorporation, 72 FEDERAL RESERVE RESERVE BULLETIN 860 (1983). BULLETIN 487 (1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 733 ments, the Board has determined that Bank's real First American Corporation estate investment and development activities do not Nashville, Tennessee preclude approval of this application. Because this proposal involves only a restructuring Order Approving Acquisition of a Bank Holding of ownership interests in connection with the forma- Company and a Nonbanking Company tion of a bank holding company, Applicant's indirect acquisition of shares of MAC and Systems Corp. First American Corporation, Nashville, Tennessee, a would not have a significantly adverse effect upon bank holding company within the meaning of the Bank competition in any relevant market. Holding Company Act ("Act") (12 U.S.C. § 1841 The financial and managerial resources and future et seq.), has applied for the Board's approval under prospects of Applicant and Bank are regarded as section 3(a)(5) of the Act (12 U.S.C. § 1842(a)(5)) to satisfactory and consistent with approval of this pro- acquire Tennessee National Bancshares, Inc., Maryposal. Considerations relating to the convenience and ville, Tennessee ("TNB").1 As a result of the acquisineeds of the community to be served are also consis- tion, Applicant would acquire indirectly TNB's five tent with approval. subsidiary banks.2 There is no evidence in the record to indicate that Applicant has also applied for the Board's approval approval of this proposal would result in undue con- under section 4(c)(8) of the Act (12 U.S.C. centration of resources, decreased or unfair competi- § 1843(c)(8)) and section 225.23 of the Board's Regulation, conflicts of interest, unsound banking practices, tion Y (12 C.F.R. § 225.23) to acquire TNB's only or other adverse effects on the public interest. Accord- nonbanking subsidiary, Southeastern Life Insurance ingly, the Board has determined that the balance of Co., Maryville, Tennessee ("Southeastern"). Southpublic interest factors it must consider under section eastern is engaged in reinsuring life, accident, and 4(c)(8) of the Act is favorable and consistent with health insurance written in connection with extensions approval of the applications to acquire Bank's non- of credit by TNB's subsidiary banks. banking subsidiaries and activities. Notice of the applications, affording opportunity for Based on the foregoing and other facts of record, interested persons to submit comments and views, has including the commitments made by Applicant, the been given in accordance with sections 3 and 4 of the Board has determined that the applications under Act (51 Federal Register 23,831 (1986)). The time for sections 3 and 4 of the Act should be and hereby are filing comments and views has expired, and the Board approved. The acquisition of Bank shall not be con- has considered the applications and all comments summated before the thirtieth calendar day following received in light of the factors set forth in section 3(c) the effective date of this Order or later than three of the Act (12 U.S.C. § 1842(c)) and the considermonths after the effective date of this Order, unless ations specified in section 4(c)(8) of the Act. such period is extended for good cause by the Board or Applicant, the second largest commercial banking by the Federal Reserve Bank of Boston, pursuant to organization in Tennessee, controls six subsidiary delegated authority. The determinations as to Appli- banks in Tennessee with $3.4 billion in total deposits, cant's nonbanking activities are subject to all of the representing 12.4 percent of total deposits in commerconditions contained in Regulation Y, including those cial banks in the state.3 Applicant also controls one in sections 225.4(d) and 225.25(b)(3) (12 C.F.R. subsidiary bank in Kentucky, with deposits of $143 §§ 225.4(d) and 225.23(b)(3)), and to the Board's million, representing 0.6 percent of total deposits in authority to require such modification or termination the state. TNB, the sixth largest commercial banking of the activities of a holding company or any of its organization in Tennessee, controls five subsidiary subsidiaries as the Board finds necessary to assure banks, with $280 million total deposits, representing compliance with the provisions and purposes of the 1.0 percent of total deposits in commercial banks in Act and the Board's regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective 1. Applicant has also applied under section 3(a)(1) of the Act August 5, 1986. (12 U.S.C. § 1842(a)(1)) for approval for its wholly owned subsidiary, First American Acquisition Corporation, Nashville, Tennessee ("Acquisition Corporation"), to become a bank holding company through Voting for this action: Chairman Volcker and Governors merger with TNB. Acquisition Corporation would be the surviving Seger and Angell. Abstaining from this action: Governor corporation in the merger and would directly control all of TNB's Wallich. Absent and not voting: Governors Rice and existing subsidiaries. Johnson. 2. TNB controls the following banks, all in Tennessee: Blount National Bank, Maryville; Merchants and Farmers Bank, Greenback; The First National Bank of Jefferson City, Jefferson City; Bank of JAMES MCAFEE Cannon County, Woodbury; and Citizens State Bank, McMinnville. [SEAL] Associate Secretary of the Board 3. State deposit data are as of June 30, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

734 Federal Reserve Bulletin • October 1986 the state. Upon consummation of the proposed trans- consummation of this proposal. On the basis of these action, Applicant will remain the second largest com- and other facts of record, the Board concludes that mercial banking organization in Tennessee, with total consummation of the proposal is not likely to substandeposits of $3.7 billion, representing 13.4 percent of tially lessen competition in the Knoxville market.7 total deposits in commercial banks in the state. Based The Board also has considered the effects of this on the above considerations and other facts of record, proposal on probable future competition in the marthe Board concludes that consummation of the propos- kets in which Applicant and TNB do not compete with al would have no significant effect on the concentra- each other. In light of the number of probable future tion of banking resources in Tennessee. entrants into each of these markets and other facts of Applicant's banking subsidiaries operate in 13 local record, the Board concludes that consummation of banking markets; TNB's banking subsidiaries operate this proposal would not have any significant adverse in five local banking markets. Applicant and TNB effect on probable future competition in any relevant compete directly only in the Knoxville banking mar- market. ket.4 Applicant is the second largest of 17 commercial The financial and managerial resources of Applibanking organizations in the Knoxville banking mar- cant, its subsidiaries and TNB are consistent with ket, with deposits of $665 million, representing 25.5 approval of the application. Considerations relating to percent of the deposits in commercial banking organi- the convenience and needs of the community to be zation in the market.5 TNB is the fifth largest commer- served are also consistent with approval. cial banking organization in the market, with total Applicant has also applied under section 4(c)(8) of deposits of $139 million, representing 5.3 percent of the Act to acquire TNB's only nonbanking subsidiary, the deposits in commercial banks in the market. After Southeastern, which is engaged in reinsuring life, consummation of the proposal, Applicant's share of accident and health insurance written in connection the deposits in commercial banks in the market would with extensions of credit by TNB's subsidiary banks. be 30.8 percent. The market's three-firm concentra- Southeastern does not compete in any market with tion would increase from 68 percent to 73.5 percent Applicant or its subsidiaries. In addition, in the market and, based on commercial banks alone, the Herfin- where Southeastern competes, there are a very large dahl-Hirschman Index ("HHI") would increase by number of competitors with regard to both the sale of 273 points to 2153. credit life, accident and health insurance and the Although the proposed acquisition would eliminate reinsurance of credit life, accident and health insursome existing competition between Applicant and ance. TNB in the Knoxville banking market, the Board has After consideration of the above facts and other concluded that the effect of this proposal on existing facts of record, the Board concludes that Applicant's competition is mitigated by the extent of competition acquisition of TNB's nonbanking subsidiary would not offered by thrift institutions in the market.6 Twelve significantly affect competition in any relevant market. thrift institutions located in the Knoxville banking Furthermore, there is no evidence in the record to market hold deposits of $1.3 billion, representing 33 indicate that approval of this proposal would result in percent of the total deposits in depository institutions undue concentration of resources, unfair competition, in the market. These institutions compete with com- conflicts of interest, unsound banking practices, or mercial banks in the provision of consumer loans, other adverse effects on the public interest. Accordconsumer transaction accounts, commercial real es- ingly, the Board has determined that the balance of the tate loans, and, to some extent, commercial lending public interest factors it must consider under section services and commercial checking accounts. The 4(c)(8) of the Act is favorable and consistent with Board has also noted that 16 commercial banks and 12 approval of the application to acquire Southeastern. thrift institutions would remain in the market following 7. If 50 percent of the deposits held by thrift institutions in the 4. The Knoxville banking market consists of all of Knox County Knoxville banking market were included in the calculation of market and parts of Anderson, Blount, Jefferson, Loudon, Roane, and Sevier concentration, the pre-acquisition three-firm concentration ratio Counties. would decrease to 55 percent and the HHI would decrease to 1323. 5. Market deposit data are as of June 30, 1984. Upon consummation of this proposal, the three-firm concentration 6. The Board has previously indicated that thrift institutions have ratio would increase to 59.1 percent and the HHI would increase by become, or have the potential to become, major competitors of 176 points to 1499. The resulting market share of Applicant would commercial banks. National City Corporation, 70 FEDERAL RESERVE decrease to 25 percent. The Department of Justice has informed the BULLETIN 743 (1984); NCNB Corporation, 70 FEDERAL RESERVE Board that a bank merger or acquisition generally will not be chal- BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL lenged (in the absence of other factors indicating anticompetitive RESERVE BULLETIN 802 (1983); First Tennessee National Corpora- effects) unless the post-merger HHI is at least 1800 and the merger tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). increases the HHI by at least 200 points. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 735 Based on the foregoing and other facts of record, the ity to require such modifications or termination of Board has determined that the applications under activities of a holding company or any of its subsidiarsections 3 and 4 of the Act should be and hereby are ies as the Board finds necessary to assure compliance approved. The banking acquisition shall not be con- with the provisions and purposes of the Act and the summated before the thirtieth calendar day following Board's regulations and orders issued thereunder, or the effective date of this Order, and neither the bank- to prevent evasion thereof. ing acquisition nor the nonbanking acquisition shall By order of the Board of Governors, effective occur later than three months after the effective date of August 22, 1986. this Order, unless the latter period is extended for good cause by the Board or by the Federal Reserve Voting for this action: Chairman Volcker and Governors Bank of Atlanta, acting pursuant to delegated author- Wallich, Rice, and Johnson. Governor Wallich abstained ity. The determination with respect to Applicant's from the insurance portion of this action. Absent and not voting: Governors Seger, Angell, and Heller. acquisition of TNB's nonbanking subsidiary is subject to all of the conditions set forth in Regulation Y, including sections 225.4(d) and 225.23(b) (12 C.F.R. WILLIAM W. WILES §§ 225.4(d) and 225.23(b)), and to the Board's author- [SEAL] Secretary of the Board ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Adamsville Bancshares, Inc., Bank of Adamsville, St. Louis August 11, 1986 Adamsville, Tennessee Adamsville, Tennessee AmeriTrust Corporation, American National Bancshares, Cleveland August 8, 1986 Cleveland, Ohio Inc., Noblesville, Indiana AmeriTrust Corporation, Indcorp, Cleveland August 8, 1986 Cleveland, Ohio Martinsville, Indiana Ames Holding Company Ltd., Western Security Bank, Kansas City June 20, 1986 Omaha, Nebraska Phoenix, Arizona Banc One Corporation, Spartan Bankcorp, Inc., Cleveland August 8, 1986 Columbus, Ohio East Lansing, Michigan Bandera Bancshares, Inc., Bandera Bank, Dallas April 24, 1986 Dallas, Texas Bandera, Texas Bonneville Bancorp Employee Bonneville Bancorp, San Francisco July 31, 1986 Stock Ownership Trust, Provo, Utah Provo, Utah Brighton Bancorp, Inc., Brighton Bancshares St. Louis August 5, 1986 Brighton, Tennessee Corporation, Brighton, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

736 Federal Reserve Bulletin • October 1986 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date BTB Corp., Boston Trade Bank, Boston August 8, 1986 Boston, Massachusetts Boston, Massachusetts Carroll County Bancshares, Citizens State Bank, Chicago June 27, 1986 Inc., Pocahontas, Iowa Carroll, Iowa Charter National Bancorp, Inc., National Bank Wyandotte— Chicago August 15, 1986 Taylor, Michigan Taylor, Taylor, Michigan Citizen's Bancorp Investment, Citizen's Bank, Atlanta August 4, 1986 Inc., Lafayette, Tennessee Lafayette, Tennessee Citizens Development First Citizens Bank National Minneapolis May 30, 1986 Company, Association, Billings, Montana Columbia Falls, Montana Citizens Group, Inc., The Citizens National Bank of Chicago July 24, 1986 Toluca, Illinois Toluca, Toluca, Illinois The Colonial BancGroup, Inc., Bank of Anniston, Atlanta August 13, 1986 Montgomery, Alabama Anniston, Alabama Commerce Union Corporation, Central South Bancorp, Atlanta August 21, 1986 Nashville, Tennessee Franklin, Tennessee Cortland First Financial First National Bank of Cortland, New York August 6, 1986 Corporation, Cortland, New York Cortland, New York Denver City Bancshares, Inc., First Borger Bancshares, Inc., Dallas June 19, 1986 Denver City, Texas Lubbock, Texas Duco Bancshares, Inc., Bank of Villa Park, Chicago July 30, 1986 Villa Park, Illinois Villa Park, Illinois Fidelity Resources Company, Fidelity National Bank, Dallas August 15, 1986 Dallas, Texas Dallas, Texas First Borger Bancshares, Inc., First National Bank of Borger, Dallas June 19, 1986 Lubbock, Texas Borger, Texas First Breckinridge Bancshares, River City Bank, Inc., St. Louis June 26, 1986 Inc., Louisville, Kentucky Irvington, Kentucky First Citizens Bancorp of Alexandria Banking Company, Chicago August 13, 1986 Indiana, Alexandria, Indiana Anderson, Indiana First Florida Banks, Inc., First Florida Bank of Pasco Atlanta August 22, 1986 Tampa, Florida County, N.A., 7L Corporation, Bayonet Point, Florida Tampa, Florida First Golden Bancorporation, First Interstate Bank of Kansas City May 23, 1986 Golden, Colorado Centennial, N.A., Englewood, Colorado First Lubbock Bancshares, Inc., First Borger Bancshares, Inc., Dallas June 19, 1986 Lubbock, Texas Lubbock, Texas First National Cincinnati Second National Corporation, Cleveland August 15, 1986 Corporation, Richmond, Indiana Cincinnati, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 737 Section 3—Continued .. „ . , . Reserve Effective AApplicant Bank(s) BanR date First National Corporation of First Montgomery Bank, Atlanta July 28, 1986 Alexander City, Inc., Montgomery, Alabama Alexander City, Alabama First Security Corporation of State Financial Bancshares, Inc., Cleveland August 19, 1986 Kentucky, Richmond, Kentucky Lexington, Kentucky First Sidney Banc Corp., The First National Bank, Cleveland July 31, 1986 Sidney, Ohio Sidney, Ohio First State Bancorp, Inc., Bank of Hayti, St. Louis August 18, 1986 Caruthersville, Missouri Hayti, Missouri First Union Corporation, Georgia State Bankshares, Inc., Richmond August 8, 1986 Charlotte, North Carolina Atlanta, Georgia First Waukegan Corporation, FIRST GLENVIEW BANCORP, Chicago August 7, 1986 Chicago, Illinois INC., Glenview, Illinois FNBM Financial Corporation, The First National Bank of Philadelphia August 12, 1986 Minersville, Pennsylvania Minersville, Minersville, Pennsylvania G. S. Bancshares, Inc., The St. Francis State Bank and Kansas City May 15, 1986 Goodland, Kansas Trust Company, St. Francis, Kansas GNB Financial Services, Inc., Gratz National Bank, Philadelphia August 13, 1986 Gratz, Pennsylvania Gratz, Pennsylvania Hampton Park Corporation, Northern Illnois Bancorp, Inc., Chicago August 14, 1986 Romeoville, Illinois Joliet, Illinois Heritage Financial Services, BREMEN BANCORP, INC., Chicago August 12, 1986 Inc., Tinley Park, Illinois Blue Island, Illinois Howland Bancshares, Inc., The Bank of Corpus Christi, Dallas August 18, 1986 San Antonio, Texas Corpus Christi, Texas Investors Trust Financial Investors Trust Bank, Atlanta July 23, 1986 Corporation, Duluth, Georgia Duluth, Georgia LaFarge Bancorp, Inc., Bank of Alma, Chicago June 20, 1986 LaFarge, Wisconsin Alma, Wisconsin Lake Granbury Financial Lake Granbury National Bank, Dallas August 1, 1986 Corporation, Granbury, Texas Granbury, Texas Landmark Financial Corpora- The Landmark Bank, Boston August 22, 1986 tion, Hartford, Connecticut Hartford, Connecticut Lincoln Financial Corporation, Farmers & Merchants Bank, Chicago July 30, 1986 Fort Wayne, Indiana Bluffton, Indiana Lincolnshire Bancshares, Inc., First National Bank of Chicago August 8, 1986 Lincolnshire, Illinois Lincolnshire, Lincolnshire, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

738 Federal Reserve Bulletin • October 1986 Section 3—Continued . .. „ . , . Reserve Effective Applicant Bank(s) ^ Bank Martinco Financial Corp., The Martin County Bank, St. Louis August 7, 1986 Shoals, Indiana Shoals, Indiana Mounds Bancorp, Inc., The First State Bank of Mounds, St. Louis August 11, 1986 Mounds, Illinois Mounds, Illinois National Bancshares Corpora- NBC Bank-Edinburg, Dallas May 28, 1986 tion of Texas, Edinburg, Texas San Antonio, Texas Penn Laurel Financial Corp., Curwensville State Bank, Philadelphia August 19, 1986 Curwensville, Pennsylvania Curwensville, Pennsylvania Peoples Financial Corp., Peoples Trust Company, St. Louis August 13, 1986 Linton, Indiana Linton, Indiana Permian Financial Corporation, First Borger Bancshares, Inc., Dallas June 19, 1986 Crane, Texas Lubbock, Texas Piedmont BankGroup Incorpo- The First National Bank of Salt- Richmond July 30, 1986 rated, ville, Martinsville, Virginia Salt ville, Virginia Premier Bankshares Corpora- Tazewell National Bank, Richmond August 5, 1986 tion, Tazewell, Virginia Tazewell, Virginia Bank of Speedwell, Incorporated, Speedwell, Virginia Progressive Bank, Inc., Pawling Savings Bank, New York August 8, 1986 Pawling, New York Pawling, New York Sharon Bancshares, Inc., The Bank of Sharon, St. Louis August 12, 1986 Sharon, Tennessee Sharon, Tennessee Spivey Bank Shares, Inc., Spivey State Bank, Atlanta July 28, 1986 Swainsboro, Georgia Swainsboro, Georgia Suburban Bancorp, Inc., Westbrook Bancshares, Inc., Chicago July 30, 1986 Palatine, Illinois Westchester, Illinois Thurman State Corporation, American National Bank, Chicago May 2, 1986 Sidney, Iowa Bedford, Iowa Todd Bancshares, Inc., Planters Bank of Todd County, St. Louis August 8, 1986 Trenton, Kentucky Trenton, Kentucky United Carolina Bancshares Bank of Greer, Richmond August 5, 1986 Corporation, Greer, South Carolina Whiteville, North Carolina United City Corporation, City National Bank of Irving, Dallas April 24, 1986 Piano, Texas Irving, Texas United Community Corporation, Citibancshares, Inc., Kansas City August 1, 1986 Oklahoma City, Oklahoma Muskogee, Oklahoma West Mass Bankshares, Inc., United Savings Bank, Boston August 13, 1986 Greenfield, Massachusetts Conway, Massachusetts West Texas Bancorporation, First Borger Bancshares, Inc., Dallas June 19, 1986 Inc., Lubbock, Texas Post, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 739 Section 3—Continued r. w \ Reserve Effective AApplicant Bank(s) . , Bank date Whittington Bancorp, Inc., State Bank of Whittington, St. Louis August 19, 1986 Whittington, Illinois Whittington, Illinois Winter Park Bancshares, Inc., Voyageur Development Corpora- Minneapolis July 30, 1986 Park Falls, Wisconsin tion, Park Falls, Wisconsin Chippewa Valley Agency, Ltd., Winter, Wisconsin Section 4 Nonbanking Reserve Effective Applicant Company Bank date The Chase Manhattan underwriting and/or reinsuring New York August 19, 1986 Corporation, home mortgage redemption New York, New York insurance Chase Manhattan National Corporation, New York, New York Chase Manhattan National Holding Corporation, Newark, Delaware Dakota Bankshares, Inc., Dakota First Trust Company, Minneapolis August 13, 1986 Fargo, North Dakota Fargo, North Dakota Delaware National Bankshares Professional Insurance Center, Philadelphia August 18, 1986 Corp., Inc., Georgetown, Delaware Seaford, Delaware First Wisconsin Corporation, Elan Life Insurance Company, Chicago August 1, 1986 Milwaukee, Wisconsin Phoenix, Arizona Gulf Coast Holding ATM Network, Inc., Atlanta August 1, 1986 Corporation, Panama City, Florida Panama City, Florida GREATER MILWAUKEE Foremost Leasing Services, Inc., Chicago August 5, 1986 FINANCIAL CORP., Wauwatosa, Wisconsin Milwaukee, Wisconsin Hospers Agency Company, Van Bruggen Insurance Agency, Chicago August 7, 1986 Sioux Center, Iowa Inc., Sioux Center, Iowa IntraWest Financial underwriting credit life, accident Kansas City August 15, 1986 Corporation, and health insurance in connec- Denver, Colorado tion with residential mortgages NBD Bancorp, Inc., Heartwell Mortgage Corporation, Chicago July 29, 1986 Detroit, Michigan Grand Rapids, Michigan Winter Park Bancshares, Inc., Chippewa Valley Agency, Ltd., Minneapolis July 30, 1986 Park Falls, Wisconsin Winter, Wisconsin Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

740 Federal Reserve Bulletin • October 1986 Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date The Indiana National Commerce America Corp., Chicago July 29, 1986 Corporation, Jeffersonville, Indiana Indianapolis, Indiana Marisub, Inc., Marine Bank, N.A., Chicago August 13, 1986 Milwaukee, Wisconsin Milwaukee, Wisconsin Marine Bank West, Waukesha, Wisconsin Marine Bank South, N.A., Racine, Wisconsin Marine Bank Dane County, Madison, Wisconsin Marine First National Bank, Janesville, Wisconsin West Bend Bank Marine Bank, West Bend, Wisconsin Marine Bank of Beaver Dam, Beaver Dam, Wisconsin Fidelity Marine Bank, Antigo, Wisconsin Marine Trust Company, N.A., Waukesha, Wisconsin Marine Bank Services Corporation, Milwaukee, Wisconsin Marinebanc Leasing Company, Inc., Milwaukee, Wisconsin Marine Mortgage Company, Inc., New Berlin, Wisconsin Marine Financial Services Corporation, St. Thomas, U.S. Virgin Island TB&C Bancshares, Inc., CB&T Bancshares, Inc., Atlanta August 7, 1986 Columbus, Georgia Columbus, Georgia nonbanking activities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 741 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date American Trust & Savings The National Bank, Chicago April 10, 1986 Bank, Dyers ville, Iowa Dubuque, Iowa 1st Source Bank, Community State Bank, Chicago August 15, 1986 South Bend, Indiana North Liberty, Indiana State Bank of Lima, FIBC Service Bank II, Chicago August 5, 1986 Howe, Indiana Howe, Indiana PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. Optical Coating Laboratory, Inc. v. United States, McHuin v. Volcker, et al., No. 85-2170 WARB (W.D. No. 288-86C (U.S. Claims Ct., filed May 6, 1986). Okl., filed Aug. 29, 1985). Adkins v. Board of Governors, No. 86-3853 (4th Cir., Independent Community Bankers Associaton of South filed May 14, 1986). Dakota v. Board of Governors, No. 84-1496 (D.C. Securities Industry Association v. Board of Gover- Cir., filed Aug. 7, 1985). nors, No. 86-1412 (D.C. Cir., filed July 14, 1986). Florida Bankers Association, et al. v. Board of Gover- Jenkins v. Board of Governors, No. 86-1419 (D.C. nors, No. 85-193 (U.S., filed Aug. 5, 1985). Cir., filed July 18, 1986). Urwyler, et al. v. Internal Revenue Service, et al., No. CBC, Inc v. Board of Governors, No. 86-1001 (10th CV-F-85-402 REC (E.D. Cal., filed July 18, 1985). Cir., filed Jan. 2, 1986). Johnson v. Federal Reserve System, et al., No. S85- Howe v. United States, et al., No. 85-4504-C (D. 0958(R) and S85-1269(N) (S.D. Miss., filed July 16, Mass., filed Dec. 6, 1985). 1985). Myers, et al. v. Federal Reserve Board, No. 85-1427 Wight, et al. v. Internal Revenue Service, et al., No. (D. Idaho, filed Nov. 18, 1985). CIV S-85-0012 MLS (E.D. Cal., filed July 12, 1985). Souser, et al. v. Volcker, et al., No. 85-C-2370, et al. Cook v. Spillman, et al., No. CIV S-85-0953 EJG (D. Colo., filed Nov. 1, 1985). (E.D. Cal., filed July 10, 1985). Podolak v. Volcker, No. C85-0456, et al. (D. Wyo., Florida Bankers Association v. Board of Governors, filed Oct. 28, 1985). No. 84-3883 and No. 84-3884 (11th Cir., filed Feb. Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa, 15, 1985). filed Oct. 22, 1985). Florida Department of Banking v. Board of Gover- Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D. nors, No. 84-3831 (11th Cir., filed Feb. 15, 1985), Minn., filed Oct. 21, 1985). and No. 84-3832 (11th Cir., filed Feb. 15, 1985). Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D. Lewis v. Volcker, et al., No. C-l-85-0099 (S.D. Ohio, Neb., filed Oct. 16, 1985). filed Jan. 14, 1985). Jensen v. Wilkinson, et al., No. 85-4436-S, et al. (D. Brown v. United States Congress, et al., No. 84-2887- Kan., filed Oct. 10, 1985). 6(IG) (S.D. Cal., filed Dec. 7, 1984). Alfson v. Wilkinson, et al., No. Al-85-267 (D. N.D., Melcher v. Federal Open Market Committee, No. 84filed Oct. 8, 1985). 1335 (D.D.C., filed Apr. 30, 1984). First National Bank of Blue Island Employee Stock Securities Industry Association v. Board of Gover- Ownership Plan v. Board of Governors, No. 85- nors, No. 80-2614 (D.C. Cir., filed Oct. 24., 1980), 2615 (7th Cir., filed Sept. 23, 1985). and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). First National Bancshares II v. Board of Governors, No. 85-3702 (6th Cir., filed Sept. 4, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

742 Membership of the Board of Governors of the Federal Reserve System, 1913-86 APPOINTIVE MEMBERS1 Federal Reserve Date of initial Other dates and information relating Name District oath of office to membership2 Charles S. Hamlin Boston Aug. 10, 1914 Reappointed in 1916 and 1926. Served until Feb. 3, 1936.3 Paul M. Warburg New York do Term expired Aug. 9, 1918. Frederic A. Delano Chicago do Resigned July 21, 1918. W.P.G. Harding Atlanta do Term expired Aug. 9, 1922. Adolph C. Miller San Francisco do Reappointed in 1924. Reappointed in 1934 from the Richmond District. Served until Feb. 3, 1936.3 Albert Strauss New York Oct. 26, 1918 Resigned Mar. 15, 1920. Henry A. Moehlenpah Chicago Nov. 10, 1919 Term expired Aug. 9, 1920. Edmund Piatt New York June 8, 1920 Reappointed in 1928. Resigned Sept. 14, 1930. David C. Wills Cleveland Sept. 29, 1920 Term expired Mar. 4, 1921. John R. Mitchell Minneapolis May 12, 1921 Resigned May 12, 1923. Milo D. Campbell Chicago Mar. 14, 1923 Died Mar. 22, 1923. Daniel R. Crissinger Cleveland May 1, 1923 Resigned Sept. 15, 1927. George R. James St. Louis May 14, 1923 Reappointed in 1931. Served until Feb. 3, 1936.4 Edward H. Cunningham...Chicago do Died Nov. 28, 1930. Roy A. Young Minneapolis Oct. 4, 1927 Resigned Aug. 31, 1930. Eugene Meyer New York Sept. 16, 1930 Resigned May 10, 1933. Wayland W. Magee Kansas City May 18, 1931 Term expired Jan. 24, 1933. Eugene R. Black Atlanta May 19, 1933 Resigned Aug. 15, 1934. M.S. Szymczak Chicago June 14, 1933 Reappointed in 1936 and 1948. Resigned May 31, 1961. J.J. Thomas Kansas City do Served until Feb. 10, 1936.3 Marriner S. Eccles San Francisco Nov. 15, 1934 Reappointed in 1936, 1940, and 1944. Resigned July 14, 1951. Joseph A. Broderick New York Feb. 3, 1936 Resigned Sept. 30, 1937. John K. McKee Cleveland do Served until Apr. 4, 1946.3 Ronald Ransom Atlanta do Reappointed in 1942. Died Dec. 2, 1947. Ralph W. Morrison Dallas Feb. 10, 1936 Resigned July 9, 1936. Chester C. Davis Richmond June 25, 1936 Reappointed in 1940. Resigned Apr. 15, 1941. Ernest G. Draper New York Mar. 30, 1938 Served until Sept. 1, 1950.3 Rudolph M. Evans Richmond Mar. 14, 1942 Served until Aug. 13, 1954.3 James K. Vardaman, Jr. ..St. Louis Apr. 4, 1946 Resigned Nov. 30, 1958. Lawrence Clayton Boston Feb. 14, 1947 Died Dec. 4, 1949. Thomas B. McCabe Philadelphia Apr. 15, 1948 Resigned Mar. 31, 1951. Edward L. Norton Atlanta Sept. 1, 1950 Resigned Jan. 31, 1952. Oliver S. Powell Minneapolis do Resigned June 30, 1952. Wm. McC. Martin, Jr New York April 2, 1951 Reappointed in 1956. Term expired Jan. 31, 1970. A.L. Mills, Jr San Francisco Feb. 18, 1952 Reappointed in 1958. Resigned Feb. 28, 1965. J.L. Robertson Kansas City do Reappointed in 1964. Resigned Apr. 30, 1973. C. Canby Balderston Philadelphia Aug. 12, 1954 Served through Feb. 28, 1966. Paul E. Miller Minneapolis Aug. 13, 1954 Died Oct. 21, 1954. Chas. N. Shepardson Dallas Mar. 17, 1955 Retired Apr. 30, 1967. G.H. King, Jr Atlanta Mar. 25, 1959 Reappointed in 1960. Resigned Sept. 18, 1963. George W. Mitchell Chicago Aug. 31, 1961 Reappointed in 1962. Served until Feb. 13, 1976.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

743 Federal Reserve Date of initial Other dates and information relating Name District oath of office to membership2 J. Dewey Daane .Richmond Nov. 29, 1963 Served until Mar. 8, 1974.3 Sherman J. Maisel ... .San Francisco Apr. 30, 1965 Served through May 31, 1972. Andrew F. Brimmer. .Philadelphia Mar. 9, 1966 Resigned Aug. 31, 1974. William W. Sherrill.. .Dallas May 1, 1967 Reappointed in 1968. Resigned Nov. 15, 1971. Arthur F. Burns .New York Jan. 31, 1970 Term began Feb. 1, 1970. Resigned Mar. 31, 1978. John E. Sheehan .St. Louis Jan. 4, 1972 Resigned June 1, 1975. Jeffrey M. Bucher .San Francisco June 5, 1972 Resigned Jan. 2, 1976. Robert C. Holland .... .Kansas City June 11, 1973 Resigned May 15, 1976. Henry C. Wallich .Boston Mar. 8, 1974 Philip E. Cold well .Dallas Oct. 29, 1974 Served through Feb. 29, 1980. Philip C. Jackson, Jr. .Atlanta July 14, 1975 Resigned Nov. 17, 1978. J. Charles Partee .Richmond Jan. 5, 1976 Served until Feb. 7, 1986.3 Stephen S. Gardner... .Philadelphia Feb. 13, 1976 Died Nov. 19, 1978. David M. Lilly .Minneapolis June 1, 1976 Resigned Feb. 24, 1978. G. William Miller .San Francisco Mar. 8, 1978 Resigned Aug. 6, 1979. Nancy H. Teeters .Chicago Sept. 18, 1978 Served through June 27, 1984. Emmett J. Rice .New York June 20, 1979 Frederick H. Schultz. .Atlanta July 27, 1979 Served through Feb. 11, 1982. Paul A. Volcker .Philadelphia Aug. 6, 1979 Lyle E. Gramley .Kansas City May 28, 1980 Resigned Sept. 1, 1985. Preston Martin .San Francisco Mar. 31, 1982 Resigned April 30, 1986. Martha R. Seger .Chicago July 2, 1984 Wayne D. Angell .Kansas City Feb. 7, 1986 Manuel H. Johnson... .Richmond Feb. 7, 1986 H. Robert Heller .San Francisco Aug. 19, 1986 Chairmen4 Vice Chairmen4 Charles S. Hamlin .Aug. 10, 1914-Aug. 9, 1916 Frederic A. Delano Aug 10, 1914-Aug. 9, 1916 W.P.G. Harding .Aug. 10, 1916-Aug. 9, 1922 Paul M. Warburg Aug 10, 1916-Aug. 9, 1918 Daniel R. Crissinger... .May 1, 1923-Sept. 15, 1927 Albert Strauss Oct. 26, 1918-Mar. 15, 1920 Roy A. Young .Oct. 4, 1927-Aug. 31, 1930 Edmund Piatt July 23, 1920-Sept. 14, 1930 Eugene Meyer .Sept. 16, 1930-May 10, 1933 J.J. Thomas Aug 21, 1934-Feb. 10, 1936 Eugene R. Black .May 19, 1933-Aug. 15, 1934 Ronald Ransom Aug. 6, 1936-Dec. 2, 1947 Marriner S. Eccles .Nov. 15, 1934-Jan. 31, 1948 C. Canby Balderston Mar. 11, 1955-Feb. 28, 1966 Thomas B. McCabe ... .Apr. 15, 1948-Mar. 31, 1951 J.L. Robertson Mar. 1, 1966-Apr. 30, 1973 Wm. McC. Martin, Jr. .Apr. 2, 1951-Jan. 31, 1970 George W. Mitchell May 1, 1973-Feb. 13, 1976 Arthur F. Burns .Feb. 1, 1970-Jan. 31, 1978 Stephen S. Gardner Feb. 13, 1976-Nov. 19, 1978 G. William Miller .Mar. 8, 1978-Aug. 6, 1979 Frederick H. Schultz July 27, 1979-Feb. 11, 1982 Paul A. Volcker .Aug. 6, 1979- Preston Martin Mar. 31, 1982-Mar. 31, 1986 Manuel H. Johnson Aug. 22, 1986- EX-OFFICIO MEMBERS1 Secretaries of the Treasury Comptrollers of the Currency W.G. McAdoo Dec. 23, 1913-Dec. 15, 1918 John Skelton Williams ...Feb. 2, 1914-Mar. 2, 1921 Carter Glass Dec. 16, 1918-Feb. 1, 1920 Daniel R. Crissinger Mar. 17, 1921-Apr. 30, 1923 David F. Houston Feb. 2, 1920-Mar. 3, 1921 Henry M. Dawes May 1, 1923-Dec. 17, 1924 Andrew W. Mellon Mar. 4, 1921-Feb. 12, 1932 Joseph W. Mcintosh Dec. 20, 1924-Nov. 20, 1928 Ogden L. Mills Feb. 12, 1932-Mar. 4, 1933 J.W. Pole Nov. 21, 1928-Sept. 20, 1932 William H. Woodin Mar. 4, 1933-Dec. 31, 1933 J.F.T. O'Connor May 11, 1933-Feb. 1, 1936 Henry Morgenthau, Jr. ..Jan. 1, 1934-Feb. 1, 1936 1. Under the provisions of the original Federal Reserve Act, the Secretary of the Treasury and the Comptroller of the Currency Federal Reserve Board was composed of seven members, including should continue to serve as members until Feb. 1, 1936, or until five appointive members, the Secretary of the Treasury, who was their successors were appointed and had qualified; and that ex-officio chairman of the Board, and the Comptroller of the thereafter the terms of members should be fourteen years and that Currency. The original term of office was ten years, and the five the designation of Chairman and Vice Chairman of the Board should original appointive members had terms of two, four, six, eight, and be for a term of four years. ten years respectively. In 1922 the number of appointive members 2. Date after words "Resigned" and "Retired" denotes final day was increased to six, and in 1933 the term of office was increased to of service. twelve years. The Banking Act of 1935, approved Aug. 23, 1935, 3. Successor took office on this date. changed the name of the Federal Reserve Board to the Board of 4. Chairman and Vice Chairman were designated Governor and Governors of the Federal Reserve System and provided that the Vice Governor before Aug. 23, 1935. Board should be composed of seven appointive members; that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A2 Federal Reserve Bulletin • October 1986 A36 Nonfinancial corporations—Assets and A54 Foreign official assets held at Federal Reserve liabilities Banks A36 Total nonfarm business expenditures on new A55 Foreign branches of U.S. banks—Balance sheet plant and equipment data A37 Domestic finance companies—Assets and A57 Selected U.S. liabilities to foreign official liabilities and business credit institutions REAL ESTATE REPORTED BY BANKS IN THE UNITED STATES A38 Mortgage markets A57 Liabilities to and claims on foreigners A39 Mortgage debt outstanding A58 Liabilities to foreigners A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on CONSUMER INSTALLMENT CREDIT foreigners A61 Banks' own claims on unaffiliated foreigners A40 Total outstanding and net change A62 Claims on foreign countries—Combined A41 Terms domestic offices and foreign branches FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A43 Direct and indirect sources of funds to credit A63 Liabilities to unaffiliated foreigners markets A64 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS A65 Foreign transactions in securities SELECTED MEASURES A66 Marketable U.S. Treasury bonds and notes— Foreign transactions A44 Nonfinancial business activity—Selected measures A45 Labor force, employment, and unemployment INTEREST AND EXCHANGE RATES A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A67 Discount rates of foreign central banks A49 Housing and construction A67 Foreign short-term interest rates A50 Consumer and producer prices A68 Foreign exchange rates A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special International Statistics Tables SUMMARY STATISTICS A53 U.S. international transactions—Summary A54 U.S. foreign trade A54 U.S. reserve assets Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A3 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 IItteemm 1985 1986 1986 Q3 Q4 Q1 Q2' Mar. Apr. May' June' July Reserves of depository institutions2 1 Total 15.7 12.5 13.1 17.8 12.8 10.5 33.0 21.4 25.4 2 Required 16.4 11.5 12.3 19.8 18.4 13.2 32.7 19.5 26.4 3 Nonborrowed 17.5 10.4 19.1 17.6 16.3 7.3 34.1 23.7 27.3 4 Monetary base3 9.6 8.2 8.6 8.7 8.0 5.9 13.7 9.1 8.7 Concepts of money, liquid assets, and debt4 5 Ml 14.5 10.7 7.7 15.8 14.1 14.5 23.4 14.6 16.9 6 M2 9.5 6.0 4.3 10.4 6.8 13.8' 12.4 9.5 12.6 7 M3 7.6 6.5 7.4 8.0 7.7 10.6 5.7 6.6 12.9 8 L 7.8 9.4 8.1 6.4 4.1 6.7' 9.2 4.5 n.a. 9 Debt 12.9 14.6 16.1 9.7 8.3 lO.O' 10.6 10.3 n.a. Nontransaction components 10 In M25 8.0 4.6 3.2 8.7 4.4 13.5 8.8 7.8 11.3 11 In M3 only6 -.3 8.3 20.3 -1.5 11.0 -1.6 -20.8 -5.1 13.9 Time and savings deposits Commercial banks 12 Savings7 7.6 3.2 1.9 11.8 5.8 9.6 22.7 17.7 23.8 13 Small-denomination time8 -3.3 -1.6 5.3 -3.1 2.8 -3.1' -9.6 -9.7 -5.3 14 Large-denomination time910 -3.6 14.1 18.5 -8.6 -18.1 -.4 -23.0 -2.1 -.9 Thrift institutions 15 Savings7 12.9 7.5 3.1 20.9 8.7 23.8' 30.5 29.1 22.9 16 Small-denomination time -2.8 -2.9 6.6 2.8 6.7 5.9 -4.5 -5.2 -1.9 17 Large-denomination time9 -1.0 5.2 10.0 11.0 27.8 11.7 -.7 -2.2 8.0 Debt components4 18 Federal 14.6 15.2 17.5 9.5 5.3 7.8 12.7 15.4 n.a. 19 Nonfederal 12.4 14.4 15.7 9.8 9.2' 10.6' 10.0 8.8 n.a. 20 Total loans and securities at commercial banks" 9.6 9.4 12.7 4.0 5.6 2.0 5.9 3.8 14.5 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 • October 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 1986 1986 May June July June 18 June 25 July 2 July 9 July 16 July 23 July 30 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 205,800 207,619 210,913 209,481 207,270 207,862 212,108 213,490 209,274 209,773 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 180,195 182,611 185,112 183,442 182,145 183,004 185,552 187,032 184,790 184,256 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 179,287 182,086 183,550 181,194 182,145 183,004 181,824 183,845 184,790 184,256 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 908 525 1,562 2,248 0 0 3,728 3,187 0 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,366 8,309 8,581 8,876 8,137 8,137 8,983 9,258 8,137 8,137 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,155 8,137 8,137 8,137 8,137 8,137 8,137 8,137 8,137 8,137 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 211 172 444 739 0 0 846 1,121 0 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 858 780 762 734 784 974 692 824 658 746 1111100000 FFFFFllllloooooaaaaattttt 638 586 438 1,109 771 143 821 296 354 576 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 15,743 15,334 16,020 15,320 15,433 15,604 16,059 16,081 15,334 16,058 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,086 11,085 11,084 11,085 11,084 11,084 11,084 11,084 11,084 11,084 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt.................... 4,776 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,273 17,314 17,342 17,313 17,322 17,330 17,336 17,341 17,345 17,350 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 196,432' 198,625r 200,878 198,879' 198,436' 199,386 201,824 201,567 200,521 199,731 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 637 615' 564 612' 61C 599 584 570 559 541 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 4,679 2,824 3,638 3,075 3,428 2,790 3,036 3,992 3,633 3,862 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 212 229 256 209 241 239 370 204 210 255 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,841 1,882 1,824 1,960 1,931 1,948 1,800 1,710 1,908 1,811 2222200000 OOOOOttttthhhhheeeeerrrrr 482 477 471 533 508 500 513 472 405 406 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,384 6,289 6,383 6,456 6,382 6,354 6,538 6,394 6,305 6,258 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 28,269 29,895 30,143 30,972 28,957 29,280 30,681 31,825 28,978 30,161 End-of-month figures Wednesday figures 1986 1986 May June July June 18 June 25 July 2 July 9 July 16 July 23 July 30 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 206,437 209,021 209,666 210,579 207,102 209,883 210,499 217,128 208,831 210,292 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 181,992 183,849 183,446 184,450 181,893 182,818 183,9% 188,513 183,742 184,104 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 181,992 183,849 183,446 183,555 181,893 182,818 182,610 183,050 183,742 184,104 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 895 0 0 1,386 5,463 0 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,137 8,137 8,137 8,917 8,137 8,137 8,590 9,808 8,137 8,137 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,137 8,137 8,137 8,137 8,137 8,137 8,137 8,137 8,137 8,137 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 780 0 0 453 1,671 0 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 850 952 737 872 797 969 539 1,911 689 909 3333322222 FFFFFllllloooooaaaaattttt 132 283 831 632 363 1,719 1,251 269 194 913 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 15,326 15,800 16,515 15,708 15,912 16,240 16,123 16,627 16,069 16,229 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,085 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 3333355555 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt ............... 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,296 17.33CK 17,353 17,321 17,329 17,335 17,340 17,344 17,349 17,353 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 197,812r 199,281' 200,552 198,758' 198,529' 201,001 202,073 201,183 200,152 200,034 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 631 601' 532 611' 601' 593 571 562 542 532 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,083 3,143 3,983 4,622 2,846 3,878 3,162 5,238 3,330 3,286 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 254 354 233 181 240 246 241 229 218 204 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss .................... 1,596 1,593 1,631 1,591 1,593 1,603 1,604 1,614 1,614 1,579 4444422222 OOOOOttttthhhhheeeeerrrrr 417 450 688 463 491 431 489 369 415 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd 517 cccccaaaaapppppiiiiitttttaaaaalllll 6,110 6,484 6,658 6,184 6,255 6,076 6,242 6,200 6,088 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll 6,271 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 29,733 30,347 28,644 29,879 29,063 29,584 34,827 29,657 31,374 31,262 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. Dec. Jan. Feb. Mar. Apr. May June 1 Reserve balances with Reserve Banks1 21,138 21,738 27,620 27,620 24,373 24,700 27,114 28,892 28,279 29,499 2 Total vault cash2 20,755 22,316 22,956 22,956 24,245 24,962 22,688 22,231 22,474 22,805 3 Vault cash used to satisfy reserve requirements3 . 17,908 18,958 20,522 20,522 21,687 21,952 20,160 19,990 20,140 20,439 4 Surplus vault cash4 2,847 3,358 2,434 2,434 2,559 3,010 2,528 2,241 2,334 2,366 5 Total reserves5 38,894 40,696 48,142 48,142 48,060 46,652 47,274 48,882 48,419 49,938 6 Required reserves 38,333 39,843 47,085 47,085 46,949 45,555 46,378 48,081 47,581 49,007 7 Excess reserve balances at Reserve Banks6 561 853 1,058 1,058 1,111 1,097 896 801 838 931 8 Total borrowings at Reserve Banks 774 3,186 1,318 1,318 770 884 761 893 876 803 9 Seasonal borrowings at Reserve Banks 96 113 56 56 36 56 68 73 94 108 10 Extended credit at Reserve Banks7 2 2,604 499 499 497 492 518 634 584 531 Biweekly averages of daily figures for weeks ending 1986 Apr. 9 Apr. 23 May 7 May 21 June 4 June 18 July 2 July 16 July 30 Aug. 13P 11 Reserve balances with Reserve Banks1 28,292 29,385 28,676 27,875 28,568 30,156 29,044 31,267 29,547 30,215 12 Total vault cash2 22,121 22,369 22,100 22,700 22,422 22,250 23,580 22,466 23,644 23,323 13 Vault cash used to satisfy reserve requirements3 . 19,809 20,190 19,824 20,366 20,045 20,106 20,958 20,283 21,094 20,983 14 Surplus vault cash4 2,312 2,179 2,276 2,334 2,377 2,144 2,622 2,183 2,550 2,340 15 Total reserves5 48,101 49,575 48,500 48,241 48,613 50,262 50,002 51,550 50,641 51,198 16 Required reserves 47,479 48,703 47,612 47,554 47,600 49,627 48,755 50,871 49,545 50,590 17 Excess reserve balances at Reserve Banks6 622 873 888 688 1,014 636 1,247 679 1,096 609 18 Total borrowings at Reserve Banks 874 861 981 827 871 719 879 758 702 759 19 Seasonal borrowings at Reserve Banks 76 64 89 92 101 102 119 104 127 134 20 Extended credit at Reserve Banks7 576 671 637 571 566 526 525 442 294 373 1. Excludes required clearing balances and adjustments to compensate for computation period by institutions having required reserve balances at Federal float. Reserve Banks plus the amount of vault cash equal to required reserves during the 2. Dates refer to the maintenance periods in which the vault cash can be used to maintenance period at institutions having no required reserve balances. satisfy reserve requirements. Under contemporaneous reserve requirements, 6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy maintenance periods end 30 days after the lagged computation periods in which reserve requirements less required reserves. the balances are held. 7. Extended credit consists of borrowing at the discount window under the 3. Equal to all vault cash held during the lagged computation period by terms and conditions established for the extended credit program to help institutions having required reserve balances at Federal Reserve Banks plus the depository institutions deal with sustained liquidity pressures. Because there is amount of vault cash equal to required reserves during the maintenance period at not the same need to repay such borrowing promptly as there is with traditional institutions having no required reserve balances. short-term adjustment credit, the money market impact of extended credit is 4. Total vault cash at institutions having no required reserve balances less the similar to that of nonborrowed reserves. amount of vault cash equal to their required reserves during the maintenance 8. Before February 1984, data are prorated monthly averages of weekly period. averages; beginning February 1984, data are prorated monthly averages of 5. Total reserves not adjusted for discontinuities consist of reserve balances biweekly averages. with Federal Reserve Banks, which exclude required clearing balances and NOTE. These data also appear in the Board's H.3 (502) release. For address, see adjustments to compensate for float, plus vault cash used to satisfy reserve inside front cover. requirements. Such vault cash consists of all vault cash held during the lagged 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks1 Averages of daily figures, in millions of dollars 1986 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee June 23 June 30 July 7' July 14' July 21 July 28 Aug. 4 Aug. 11 Aug. 18 One day and continuing contract 1 Commercial banks in United States 69,752 67,656 79,224 76,482 72,686 70,154 73,643 75,018 73,971 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 35,998 34,418 37,554 41,301 38,616 39,108 38,880 40,815 39,130 3 Nonbank securities dealers 9,087 8,606 8,871 10,568 11,965 10,377 10,575 11,841 12,170 4 All other 24,494 26,253 26,242 27,574 27,898 30,353 29,584 29,358 29,338 All other maturities 5 Commercial banks in United States 9,769 9,551 8,708 8,472 9,065 9,111 9,199 9,763 9,435 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 6,538 6,852 6,465 6,421 6,950 6,006 6,390 6,436 6,131 7 Nonbank securities dealers 9,077 8,813 8,099 8,047 8,236 8,782 9,373 9,616 9,283 8 All other 10,489 10,536 9,704 9,864 9,008 9,768 9,361 9,396 9,616 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 26,363 26,351 34,381 31,138 28,173 26,579 30,625 29,578 29,598 10 Nonbank securities dealers 8,949 8,061 9,098 9,424 10,223 10,769 10,932 10,432 9,996 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 • October 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 8/27/86 date rate 8/27/86 rate 8/27/86 rate 8/27/86 rate Boston 51/2 8/21/86 6 5Vi 6 6'/2 7 71/2 8/21/86 New York 8/21/86 8/21/86 Philadelphia 8/22/86 8/22/86 Cleveland 8/21/86 8/21/86 Richmond 8/21/86 8/21/86 Atlanta 8/21/86 8/21/86 Chicago 8/21/86 8/21/86 St. Louis 8/22/86 8/22/86 Minneapolis 8/21/86 8/21/86 Kansas City .... 8/21/86 8/21/86 Dallas 8/21/86 8/21/86 San Francisco... 5'/2 8/21/86 6 5'/2 6 6>/> 7 71/2 8/21/86 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. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba of n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 V/2 71/2 1978- Aug. 21 73/4 73/4 1982—July 20 ll'/2-12 WVi 1974— Apr. 25 71/2-8 8 Sept. 22 2 3 11 '/2 11'/2 3 0 Oct. 16 8-81/2 8'/2 Aug. 2 ll-ll'/2 11 Dec. 9 75/4-8 73/4 20 m 81/2 3 11 11 16 73/4 73/4 Nov. 1 8'/>-9'/2 91/! 16 IOV2 10'/2 3 91/2 91/2 27 10-101/2 10 1975—Jan. 6 71/4-73/4 73/4 30 10 10 10 7V4-73/4 71/4 July 20 10 10 Oct. 12 9!/>-10 91/2 24 71/4 7'/4 Aug. 17 I0-10'/2 lO'/i 13 9'/2 91/2 Feb. 5 7 63/ 6 4 3 - / 7 4 1 /4 6 63 5/ / 4 4 Sept. 2 1 0 9 \0 1 l/ 0 2 '/2 -l 1 1 1 0 1 * /2 Nov. 2 2 2 6 9-9 9 1/2 9 9 Mar. 10 6'/4-63/4 6'/4 21 11 11 Dec. 14 81/2-9 9 14 6'/4 61/4 Oct. 8 11-12 12 15 81/2—9 81/2 May 16 6-6'/4 6 10 12 12 17 81/2 81/2 23 6 6 Feb. 15 12-13 13 1984— Apr. 9 8V2-9 9 1976— Jan. 19 51/2-6 51/? 19 13 13 13 9 9 23 51/2 5'/> May 29 12-13 13 Nov. 21 81/2-9 81/2 Nov. 22 51/4-51/2 51/4 30 12 12 26 m 81/2 26 51/4 5'/4 June 13 11-12 11 Dec. 24 8 8 16 1977— Aug. 30 51/4-53/4 51/4 July 28 10-11 10 1985— May 20 7V2-8 71/2 31 5'/4-53/4 53/4 29 10 10 2 4 71/2 m Sept. 2 53/4 53/4 Sept. 26 11 11 Oct. 26 6 6 Nov. 17 12 12 1986— Mar. 7 7-7 Vi 1 Dec. 5 12-13 13 10 7 1 1978— Jan. 9 6-6 Vi 61/2 8 13 13 Apr. 21 61/2-7 61/2 20 61/2 61/2 23 6V2 61/2 May 11 6'/2-7 7 May 5 13-14 14 July 11 6 6 12 7 7 14 14 Aug. 21 51/2-6 51/2 July 3 7-71/4 IV* Nov. 2 13-14 13 22 51/2 51/2 July 10 71/4 71/4 6 13 13 Dec. 4 12 12 In effect Aug. 27, 1986 51/2 5'/2 1. After May 19, 1986, the highest rate within the structure of discount rates rate under this structure is applied may be shortened. See section 201.3(b)(2) of may be charged on adjustment credit loans of unusual size that result from a major Regulation A. operating problem at the borrower's facility. 3. Rates for short-term adjustment credit. For description and earlier data see A temporary simplified seasonal program was established on Mar. 8, 1985, and the following publications of the Board of Governors: Banking and Monetary the interest rate was a fixed rate '/2 percent above the rate on adjustment credit. Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980, The program was re-established on Feb. 18, 1986; the rate may be either the same 1981, and 1982. as that for adjustment credit or a fixed rate Vi percent higher. In 1980 and 1981, the Federal Reserve applied a surcharge to short-term 2. Applicable to advances when exceptional circumstances or practices involve adjustment credit borrowings by institutions with deposits of $500 million or more only a particular depository institution and to advances when an institution is that had borrowed in successive weeks or in more than 4 weeks in a calendar under sustained liquidity pressures. As an alternative, for loans outstanding for quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was into account rates on market sources of funds, but in no case will the rate charged adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and be less than the basic rate plus one percentage point. Where credit provided to a to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective particular depository institution is anticipated to be outstanding for an unusually Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for prolonged period and in relatively large amounts, the time period in which each applying the surcharge was changed from a calendar quarter to a moving 13-week 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 INSTITUTIONS' Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyypp dd ee ee pp oo oo ff ss ii dd tt eepp iinn oo tt ss ee ii rr tt vv ,, aa aa ll nndd Monetary Control Act TTyy dd pp ee ee pp oo ooff ss ii dd tt ee ii pp nn oo ttee ss rr ii vv tt,, aa ll aa 55 nn dd Monetary Control Act6 Percent Effective date Percent Effective date Net demand2 Net transaction accounts1 '8 7 12/30/76 $0—$31.7 million 3 12/31/85 91/2 12/30/76 Over $31.7 million 1122 1122//3311//8855 $10 miIIion-$ 100 million 11 }/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 16'/4 12/30/76 By original maturity Less than l'/2 years 3 10/6/83 Time and savings2'3 1Vl years or more 0 10/6/83 SSaavviinnggss 3 3/16/67 Eurocurrency liabilities Time4 All types 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2'/2 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 2Vl 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97- Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report 320) provides that $2 million of reservable liabilities (transaction accounts, for 1976, table 13. Under provisions of the Monetary Control Act, depository nonpersonal time deposits, and Eurocurrency liabilities) of each depository institutions include commercial banks, mutual savings banks, savings and loan institution be subject to a zero percent reserve requirement. The Board is to adjust associations, credit unions, agencies and branches offoreign banks, and Edge Act the amount of reservable liabilities subject to this zero percent reserve requirecorporations. ment each year for the next succeeding calendar year by 80 percent of the 2. Requirement schedules are graduated, and each deposit interval applies to percentage increase in the total reservable liabilities of all depository institutions, that part of the deposits of each bank. Demand deposits subject to reserve measured on an annual basis as of June 30. No corresponding adjustment is to be requirements were gross demand deposits minus cash items in process of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the collection and demand balances due from domestic banks. exemption was established at $2.1 million. Effective with the reserve maintenance The Federal Reserve Act as amended through 1978 specified different ranges of period beginning Jan. 1, 1985, the amount of the exemption is $2.4 million. requirements for reserve city banks and for other banks. Reserve cities were Effective with the reserve computation period beginning Dec. 31, 1985, the designated under a criterion adopted effective Nov. 9, 1972, by which a bank amount of the exemption is $2.6 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) described in 12 CFR such a bank constituted designation of that place as a reserve city. Cities in which section 204.2 (d)(2); (2) net NOW accounts (NOW accounts less allowable there were Federal Reserve Banks or branches were also reserve cities. Any deductions); (3) net other transaction accounts; and (4) nonpersonal time deposits banks having net demand deposits of $400 million or less were considered to have or 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 that permit no more than six preauthorized, automatic, or other transfers per 4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent month of which no more than three can be checks—are not transaction accounts was imposed on large time deposits of $100,000 or more, obligations of affiliates, (such accounts are savings deposits subject to time deposit reserve requirements.) and ineligible acceptances. This supplementary requirement was eliminated with 8. The Monetary Control Act of 1980 requires that the amount of transaction the maintenance period beginning July 24, 1980. accounts against which the 3 percent reserve requirement applies be modified Effective with the reserve maintenance period beginning Oct. 25, 1979, a annually by 80 percent of the percentage increase in transaction accounts held by marginal reserve requirement of 8 percent was added to managed liabilities in all depository institutions determined as of June 30 each year. Effective Dec. 31, excess of a base amount. This marginal requirement was increased to 10 percent 1981, the amount was increased accordingly from $25 million to $26 million; beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and effective Dec. 30, 1982, to $26.3 million; effective Dec. 29, 1983, to $28.9 million; was eliminated beginning July 24, 1980. Managed liabilities are defined as large effective Jan. 1, 1985, to $29.8 million; and effective Dec. 31, 1985, to $31.7 time deposits, Eurodollar borrowings, repurchase agreements against U.S. million. government and federal agency securities, federal funds borrowings from non- 9. In general, nonpersonal time deposits are time deposits, including savings member institutions, and certain other obligations. In general, the base for the deposits, that are not transaction accounts and in which a beneficial interest is marginal reserve requirement was originally the greater of (a) $100 million or (b) held by a depositor that is not a natural person. Also included are certain the average amount of the managed liabilities held by a member bank, Edge transferable time deposits held by natural persons, and certain obligations issued corporation, or family of U.S. branches and agencies of a foreign bank for the two to depository institution offices located outside the United States. For details, see reserve computation periods ending Sept. 26, 1979. For the computation period section 204.2 of Regulation D. beginning Mar. 20, 1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's U.S. office gross loans to foreigners and gross balances due NOTE. Required reserves must be held in the form of deposits with Federal from foreign offices of other institutions between the base period (Sept. 13-26, Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a 1979) and the week ending Mar. 12, 1980, whichever was greater. For the Federal Reserve Bank indirectly on a pass-through basis with certain approved computation period beginning May 29, 1980, the base was increased by 7Vi institutions. percent above the base used to calculate the marginal reserve in the statement 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 • October 1986 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions' Percent per annum Commercial banks mut S ua a l v i s n a g v s i n a g n s d b l a o n an k s a ( s t s h o r c if i t a t i i n o s n t s it u a t n io d n s)1 In effect Aug. 31, 1986 In effect Aug. 31, 1986 Type of deposit Percent Effective date Effective date 1 Savings 4/1/86 4/1/86 2 Negotiable order of withdrawal accounts 1/1/86 1/1/86 3 Money market deposit account 12/14/82 12/14/82 Time accounts 4 7-31 days (5) 1/1/86 (5) 9/1/86 5 More than 31 days 10/1/83 10/1/83 1. Effective Oct. 1, 1983, restrictions on the maximum rates of interest payable 4. Effective Dec. 14, 1982, depository institutions are authorized to offer a new by commercial banks and thrift institutions on various categories of deposits were account with a required initial balance of $2,500 and an average maintenance removed. For information regarding previous interest rate ceilings on all catego- balance of $2,500 not subject to interest rate restrictions. Effective Jan. 1, 1985, ries of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the the minimum denomination and average balance maintenance requirements was Federal Home Loan Bank Board Journal, and the Annual Report of the Federal lowered to $1,000. Effective Jan. 1, 1986, the minimum denomination and average Deposit Insurance Corporation. balance maintenance requirements were removed. No minimum maturity period 2. Effective Apr. 1, 1986, the interest rate ceiling on savings deposits was is required for this account, but depository institutions must reserve the right to removed. Before Apr. 1, 1986, savings deposits were subject to an interest rate require seven days, notice before withdrawals. ceiling of 5 Vi percent. 5. Before Jan. 1, 1986, deposits of less than $1,000 were subject to an interest 3. Before Jan. 1, 1986, NOW accounts with minimum denomination require- rate ceiling of 5l/i percent. Deposits of less than $1,000 issued to governmental ments of less than $1,000 were subject to an interest rate ceiling of 51/4 percent. units were subject to an interest rate ceiling of 8 percent. Effective Jan. 1, 1986, NOW accounts with minimum required denominations of $1,000 or more and the minimum denomination requirement was removed. IRA/Keough (HR10) Plan accounts were not subject to interest rate ceilings. Effective Jan. 1, 1986, the minimum denomination requirement was removed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1985 1986 TTyyppee ooff ttrraannssaaccttiioonn 11998833 11998844 11998855 Dec. Jan. Feb. Mar. Apr. May June U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 18,888 20,036 22,214 4,515 286 0 396 2,988 3,196 1,402 2 Gross sales 3,420 8,557 4,118 0 225 2,277 0 0 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 2,400 7,700 3,500 0 0 1,000 0 0 0 0 Others within 1 year 5 Gross purchases 484 1,126 1,349 143 0 0 0 0 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift 18,887 16,354 19,763 943 725 4,776 1,152 447 1,847 1,152 8 Exchange -16,553 -20,840 -17,717 -1,529 -5% -2,148 -1,458 -1,129 -1,819 -1,957 9 Redemptions 87 0 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,896 1,638 2,185 868 0 0 0 0 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -15,533 -13,709 -17,459 -943 -703 -4,776 -1,152 -447 -1,532 -1,152 13 Exchange 11,641 16,039 13,853 1,529 596 1,548 1,458 1,134 1,019 1,957 5 to 10 years 14 Gross purchases 890 536 458 345 0 0 0 0 0 0 15 Gross sales 0 300 100 0 0 0 0 0 0 0 16 Maturity shift -2,450 -2,371 -1,857 0 -22 0 0 -5 -315 0 17 Exchange 2,950 2,750 2,184 0 0 350 0 0 500 0 Over 10 years 18 Gross purchases 383 441 293 197 0 0 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -904 -275 -447 0 0 0 0 0 0 0 21 Exchange 1,962 2,052 1,679 0 0 250 0 0 300 0 All maturities 22 Gross purchases 22,540 23,776 26,499 6,068 286 0 396 2,988 3,196 1,402 23 Gross sales 3,420 8,857 4,218 0 225 2,277 0 0 0 0 24 Redemptions 2,487 7,700 3,500 0 0 1,000 0 0 0 0 Matched transactions 25 Gross sales 578,591 808,986 866,175 76,399 63,109 90,459 88,917 109,253 62,663 80,219 26 Gross purchases 576,908 810,432 865,968 78,962 61,156 94,368 88,604 103,957 67,147 80,674 Repurchase agreements 27 Gross purchases 105,971 127,933 134,253 23,338 24,257 0 6,748 21,156 12,395 5,640 28 Gross sales 108,291 127,690 132,351 19,809 24,699 3,087 6,748 13,634 19,917 5,640 29 Net change in U.S. government securities 12,631 8,908 20,477 12,159 -2,335 -2,456 83 5,214 158 1,857 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 292 256 162 0 0 40 0 0 50 0 Repurchase agreements 33 Gross purchases 8,833 11,509 2222,,118833 7,640 5,384 0 1,821 3,369 3,135 1,691 34 Gross sales 9,213 11,328 20,877 5,947 6,454 623 1,821 1,955 4,567 1,691 35 Net change in federal agency obligations -672 -76 1,144 1,693 -1,070 -663 0 1,432 -1,482 0 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 13,853 -3,405 -3,119 83 6,647 -1,324 1,857 NOTE. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • October 1986 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1986 1986 July 2 July 9 July 16 July 23 July 30 May June July Consolidated condition statement ASSETS 1 Gold certificate account 11,084 11,084 11,084 11,084 11,084 11,085 11,084 11,084 2 Special drawing rights certificate account 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 3 Coin 469 458 458 463 475 487 488 467 Loans 4 To depository institutions 969 539 1,911 689 909 850 952 737 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 0 0 00 00 00 00 00 Federal agency obligations 7 Bought outright 8,137 8,137 8,137 8,137 8,137 88,,113377 88,,113377 88,,113377 8 Held under repurchase agreements 0 453 1,671 0 0 0 0 0 U.S. government securities Bought outright 9 Bills 90,445 90,237 90,677 91,369 91,731 89,619 91,476 9911,,007733 10 Notes 67,097 67,097 67,097 67,097 67,097 67,097 67,097 67,097 11 Bonds 25,276 25,276 25,276 25,276 25,276 25,276 25,276 25,276 12 Total bought outright1 182,818 182,610 183,050 183,742 184,104 181,992 183,849 183,446 13 Held under repurchase agreements 0 1,386 5,463 0 0 0 0 0 14 Total U.S. government securities 182,818 183,996 188,513 183,742 184,104 181,992 183,849 183,446 15 Total loans and securities 191,924 193,125 200,232 192,568 193,150 190,979 192,938 192,320 16 Items in process of collection 8,685 7,807 7,747 5,824 6,6% 5,836 4,959 6,206 17 Bank premises 634 634 635 637 637 629 634 638 Other assets 18 Denominated in foreign currencies2 8,202 8,206 8,211 8,225 8,229 8,002 8,200 8,657 19 All other3 7,404 7,283 7,781 7,207 7,363 6,695 6,966 7,220 20 Total assets 233,220 233,415 240,966 230,826 232,452 228,531 230,087 231,410 LIABILITIES 21 Federal Reserve notes 184,728 185,762 184,859 183,808 183,688 181,634 183,040 184,198 Deposits 22 To depository institutions 30,656 31,187 36,431 31,271 32,988 31,329 3311,,994400 30,275 23 U.S. Treasury—General account 3,878 3,162 5,238 3,330 3,286 3,083 3,143 3,983 24 Foreign—Official accounts 246 241 229 218 204 254 354 233 25 Other 491 431 489 369 415 417 450 688 26 Total deposits 35,271 35,021 42,387 35,188 36,893 35,083 35,887 35,179 27 Deferred credit items 6,966 6,556 7,478 5,630 5,783 5,704 4,676 5,375 28 Other liabilities and accrued dividends4 2,139 2,112 2,280 2,218 2,104 2,249 2,190 2,212 29 Total liabilities 229,104 229,451 237,004 226,844 228,468 224,670 225,793 226,964 CAPITAL ACCOUNTS 30 Capital paid in 1,806 1,809 1,812 1,830 1,833 1,839 1,807 1,834 31 Surplus 1,780 1,781 1,781 1,781 1,781 1,778 1,781 1,781 32 Other capital accounts 530 374 369 371 370 244 706 831 33 Total liabilities and capital accounts 233,220 233,415 240,966 230,826 232,452 228,531 230,087 231,410 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 149,983 152,024 151,275 151,692 151,639 147,103 146,909 153,973 Federal Reserve note statement 35 Federal Reserve notes outstanding 216,186 216,692 217,384 218,085 218,655 213,923 215,965 218,626 36 LESS: Held by bank 31,458 30,930 32,525 34,277 34,%7 32,289 32,925 34,428 37 Federal Reserve notes, net 184,728 185,762 184,859 183,808 183,688 181,634 183,040 184,198 Collateral held against notes net: 38 Gold certificate account 11,084 11,084 11,084 11,084 11,084 11,085 11,084 11,084 39 Special drawing rights certificate account 4,818 4,818 4,818 4,818 4,818 4,818 4,818 4,818 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 168,826 169,860 168,957 167,906 167,786 165,731 167,138 168,296 42 Total collateral 184,728 185,762 184,859 183,808 183,688 181,634 183,040 184,198 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 1986 July 2 July 9 July 16 July 23 July 30 May 30 June 30 July 31 1 Loans—Total 969 539 1,911 689 909 850 952 737 2 Within 15 days 923 483 1,894 685 901 823 922 693 3 16 days to 90 days 46 56 17 4 8 27 30 44 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 182,818 183,996 188,513 183,742 184,104 181,992 183,849 183,446 10 Within 15 days1 8,848 9,727 13,269 10,105 10,068 6,711 6,428 8,813 11 16 days to 90 days 45,701 47,847 46,698 45,041 45,390 47,713 48,118 41,303 12 91 days to 1 year 57,066 55,219 57,344 57,394 57,444 56,580 58,100 61,454 13 Over 1 year to 5 years 33,600 33,600 33,793 33,793 33,793 33,385 33,600 34,467 14 Over 5 years to 10 years 15,294 15,294 15,100 15,100 15,100 15,294 15,294 15,100 15 Over 10 years 22,309 22,309 22,309 22,309 22,309 22,309 22,309 22,309 16 Federal agency obligations—Total 8,137 8,590 9,808 8,137 8,137 8,137 8,137 8,137 17 Within 15 days1 22 554 1,836 170 175 221 164 175 18 16 days to 90 days 601 729 744 693 645 504 601 645 19 91 days to 1 year 1,998 1,791 1,713 1,738 1,704 1,800 1,856 1,704 20 Over 1 year to 5 years 3,765 3,765 3,758 3,833 3,885 3,871 3,765 3,885 21 Over 5 years to 10 years 1,327 1,327 1,333 1,279 1,304 1,317 1,327 1,304 22 Over 10 years 424 424 424 424 424 424 424 424 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 • October 1986 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1985 1986 1982 1983 1984 1985 Dec. Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June' July Seasonally adjusted ADJUSTED FOR 1 Total reserves2 34.28 36.14 39.51 45.61 45.61 45.88 46.37 46.87 47.28 48.58 49.45 50.49 2 Nonborrowed reserves 33.65 35.36 36.32 44.29 44.29 45.11 45.49 46.10 46.38 47.70 48.64 49.75 3 Nonborrowed reserves plus extended credit3 33.83 35.37 38.93 44.79 44.79 45.61 45.98 46.62 47.02 48.29 49.17 50.13 4 Required reserves 33.78 35.58 38.66 44.55 44.55 44.77 45.27 45.97 46.47 47.74 48.51 49.59 5 Monetary base4 170.04 185.39 199.17 216.72 216.72 218.40 219.79 221.26 222.36 224.90 226.63 228.31 Not seasonally adjusted 6 Total reserves2 35.01 36.86 40.57 46.84 46.84 47.11 45.68 46.34 47.94 47.71 49.20 50.32 7 Nonborrowed reserves 34.37 36.09 37.38 45.52 45.52 46.34 44.80 45.58 47.04 46.84 48.39 49.58 8 Nonborrowed reserves plus extended credit3 34.56 36.09 39.98 46.02 46.02 46.84 45.29 46.10 47.68 47.42 48.93 49.96 9 Required reserves 34.51 36.30 39.71 45.78 45.78 46.00 44.59 45.44 47.14 46.87 48.27 49.42 10 Monetary base4 173.07 188.66 202.34 220.36 220.36 218.74 216.78 218.99 222.13 223.61 227.04 230.03 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.85 38.89 40.70 48.14 48.14 48.06 46.65 47.27 48.88 48.42 49.94 51.03 12 Nonborrowed reserves 41.22 38.12 37.51 46.82 46.82 47.29 45.77 46.51 47.99 47.54 49.14 50.29 13 Nonborrowed reserves plus extended credit3 41.41 38.12 40.09 47.41 47.41 47.79 46.22 47.17 48.22 48.24 49.81 50.68 14 Required reserves 41.35 38.33 39.84 47.09 47.09 46.95 45.56r 46.38 48.08 47.58 49.01 50.13 15 Monetary base4 180.42 192.26 204.18 223.53 223.53 221.59 219.57 221.70 224.88 226.12 229.68 232.56 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 1986 1982 1983 1984 1985 DDeecc.. DDeecc.. DDeecc.. DDeecc.. AApprr..'' MMaayy'' JJuunnee'' JJuullyy Seasonally adjusted 1 Ml 479.9 527.1 558.5 626.6 646.1 658.7 666.8 676.2 ? M2 1,952.6 2,186.0 2,373.8 2,566.5' 2,622.4 2,649.7 2,670.9 2,698.9 M3 2,443.5 2,697.3 2,986.5 3,201.1' 3,293.2 3,311.6 3,332.9 3,369.0 4 L 2,850.1 3,163.5 3,532.3 3,838.2' 3,916.2 3,949.3 3,967.1 n.a. 5 4,661.3 5,192.0 5,952.0 6,810.(K 7,070.5 7,133.3 7,194.6 n.a. Ml components 6 Currency2 134.3 148.3 158.5 170.6 174.4 117755..88 176.7 177.6 7 Travelers checks3 4.3 4.9 5.2 5.9 6.1 6.1 6.2 6.4 8 Demand deposits4 237.9 242.7 248.4 271.5 275.7 281.6 284.9 288.3 9 Other checkable deposits5 103.4 131.3 146.3 178.6 189.9 195.1 199.0 203.9 Nontransactions components 10 In M26 1,472.7 1,658.9 1,815.4 1,939.9' 1.976.3 1,991.1 2,004.1 2,022.7 11 In M3 only7 490.9 511.3 612.7 634.6' 670.8 661.9 662.1 670.1 Savings deposits9 V Commercial Banks 163.7 133.4 112222..33 124.5 126.6 112299..00 130.9 133.4 13 Thrift institutions 194.2 173.2 167.3 179.1 184.8 189.5 194.1 197.8 Small denomination time deposits9 14 Commercial Banks 380.4 351.1 387.2 384.1 388.0 384.9 381.8 380.0 15 Thrift institutions 472.4 434.1 500.3 496.2 508.2 506.3 504.1 503.2 Money market mutual funds 16 General purpose and broker/dealer 185.2 138.2 167.5 176.5 191.4 119933..22 197.2 199.4 17 Institution-only 51.1 43.2 62.7 64.6 74.1 76.1 75.0 77.5 Large denomination time deposits10 18 Commercial Banks11 262.1 228.7 263.7 279.1 287.0 281.5 281.0 280.8 19 Thrift institutions 65.8 101.1 150.2 157.3 165.0 164.9 164.6 165.7 Debt components 70 Federal debt 979.2 1,173.0 1,367.3 1,586.3 1,638.8 11,,665566..22 1,677.5 n.a. 21 Non-federal debt 3,682.1 4,019.0 4,584.7 5,223.7' 5.431.7 5,477.0 5,517.1 n.a. Not seasonally adjusted V Ml 490.9 538.8 570.5 639.9 652.9 651.8 669.2 679.9 ?3 M2 1,958.6 2,192.8 2,380.8 2,574.7' 2,632.0 2,640.7 2,673.1 2,704.2 74 M3 2,453.3 2,707.9 2,997.9 3,213.8' 3,299.6 3,304.8 3,333.7 3,366.7 ?5 L 2,856.4 3,170.1 3,537.5 3,844.4' 3,926.3 3,936.0 3,967.1 n.a. 26 4,655.7 5,186.5 5,946.3 6,804.1' 7,041.9 7,107.6 7,173.4 n.a. Ml components 77 Currency2 136.5 150.5 160.9 173.1 173.6 175.8 177.4 179.1 28 Travelers checks3 4.1 4.6 4.9 5.5 5.8 5.9 6.5 7.2 19 Demand deposits4 246.2 251.3 257.3 281.3 278.7 276.7 285.6 290.0 30 Other checkable deposits5 104.1 132.4 147.5 180.1 194.7 193.4 199.6 203.6 Nontransactions components 31 M26 1,467.7 1,654.0 1,810.3 1,934.7' 1,979.1 1,988.9 2,003.9 2,024.3 32 M3 only7 494.7 515.1 617.0 639.2' 667.6 664.1 660.6 662.4 Money market deposit accounts 33 Commercial banks 26.3 230.5 267.2 332.4 344.8 348.6 355.2 359.0 34 Thrift institutions 16.9 148.7 149.7 179.6 180.4 182.2 185.2 187.2 Savings deposits8 35 Commercial Banks 162.1 113322..22 112211..44 112233..55 127.2 112299..55 113322..22 113355..11 36 Thrift institutions 193.1 172.3 166.5 178.3 185.8 190.3 194.8 198.8 Small denomination time deposits9 37 Commercial Banks 380.1 351.1 387.6 384.8 384.5 382.3 380.7 379.9 38 Thrift institutions 471.7 434.2 501.2 497.6 505.4 502.4 501.2 502.3 Money market mutual funds 39 General purpose and broker/dealer 185.2 138.2 167.5 176.5 191.4 193.2 197.2 199.4 40 Institution-only 51.1 43.2 62.7 64.6 74.1 76.1 75.0 77.5 Large denomination time deposits10 41 Commercial Banks11 265.2 230.8 265.4' 280.9 283.6 280.8 279.3 279.8 42 Thrift institutions 65.8 101.4 150.6 157.8 164.1 164.4 164.1 164.6 Debt components 43 Federal debt 976.4 11,,117700..22 11,,336644..77 11,,558833..77 1,644.6 11,,666600..66 1,678.7 n.a. 44 Non-federal debt 3,679.3 4,016.3 4,581.6 5,220.3' 5,397.3 5,447.0 5,494.7 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 DomesticN onfinancial Statistics • October 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 ail 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. 1986 Jan. Feb. Mar. Apr. May June DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 109,642.3 128,440.8 154,556.0 169,894.2 179,139.6 182,841.8 192,847.2 189,819.7 187,035.1 2 Major New York City banks 47,769.4 57,392.7 70,445.1 79,324.3 85,298.6 89,350.3 95,699.5 87,846.7 89,201.2 3 Other banks 61,873.1 71,048.1 84,110.9 90,569.9 93,841.0 93,491.5 97,147.7 101,973.0 97,833.9 4 ATS-NOW accounts3 1,405.5 1,588.7 1,920.8 2,027.5 2,193.5 2,266.0 2,088.7 2,255.6 2,188.0 5 Savings deposits4 741.4 633.1 539.0 362.4 364.6 356.7 385.2 389.7 382.6 DEPOSIT TURNOVER ft De A m ll a n in d su d r e e p d o s b i a t n s2 k s 379.7 434.4 496.5 531.8 560.8 566.0 593.6 569.7 553.3 7 Major New York City banks 1,528.0 1,843.0 2,168.9 2,306.3 2,473.8 2,517.7 2,635.1 2,457.8 2,504.5 8 Other banks 240.9 268.6 301.8 317.7 329.3 325.1 336.6 342.8 323.5 9 ATS-NOW accounts3 15.6 15.8 16.7 16.1 17.2 17.7 16.0 17.0 16.2 10 Savings deposits4 5.4 5.0 4.5 2.9 3.0 2.9 3.1 3.1 3.0 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 109,517.6 128,059.1 154,108.4 180,495.6 161,655.6 179,715.2 195,373.5 184,827.4 188,924.1 12 Major New York City banks 47,707.4 57,282.4 70,400.9 84,880.9 77,376.9 87,757.0 95,408.5 85,189.6 91,315.2 13 Other banks 64,310.2 70,776.9 83,707.8 95,614.7 84,278.6 91,958.3 99,965.0 99,637.8 97,608.9 14 ATS-NOW accounts3 1,397.0 1,579.5 1,903.4 2,406.1 2,065.3 2,349.0 2,393.2 2,256.6 2,356.3 15 MMDA5 567.4 848.8 1,179.0 1,543.8 1,334.9 1.600.4 1,638.8 1,557.9 1,697.2 16 Savings deposits4 742.0 632.9 538.7 392.4 331.1 362.3 418.7 377.8 385.9 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 379.9 433.5 497.4 554.2 520.0 569.5 600.1 569.4 564.1 18 Major New York City banks 1,510.0 1,838.6 2,191.1 2,393.7 2,314.0 2,494.1 2,661.7 2,487.0 2,570.0 19 Other banks 240.5 267.9 301.6 329.4 303.8 328.0 345.0 343.2 326.0 20 ATS-NOW accounts3 15.5 15.7 16.6 18.9 16.4 18.3 17.9 17.1 17.4 21 MMDA5 2.8 3.5 3.8 4.6 4.0 4.7 4.8 4.5 4.8 22 Savings deposits4 5.4 5.0 4.5 3.2 2.7 3.0 3.4 3.0 3.0 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 DomesticN onfinancial Statistics • October 1986 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1985 1986 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May' June July Seasonally adjusted 1 Total loans and securities2 1,833.9 1,847.2 1,855.5 1,876.0 1,900.4 1,930.0 1,935.5 1,944.6 1,947.9 1,957.5 1,963.7' 1,985.0 2 U.S. government securities 275.1 275.5 274.2 276.0 273.1 268.2 273.6 269.5 270.0 274.1 274.8' 285.4 3 Other securities 150." 153.6 157.3 163.3 177.6 192.5 188.1 183.3 182.1 181.9 183.6 186.1 4 Total loans and leases2 1,408.0 1,418.0 1,424.0 1,436.8 1,449.7 1,469.3 1,473.7 1,491.8 1,495.8 1,501.5 1,505.3' 1,513.4 5 Commercial and industrial 489." 492.1 492.7 495.7 499.5 502.1 502.4 506.1 507.8 506.7 508.7 508.7 6 Bankers acceptances held3.. 5. i 4.9 4.9 4.9 4.9 4.9 4.8 4.9 5.2 5.6 6.1 5.8 7 Other commercial and industrial 484.6 487.1 487.8 490.7 494.7 497.2 497.6 501.2 502.6 501.0 502.6' 502.8 S U.S. addressees4 475.6 478.3 479.4 482.4 486.0 488.0 488.4 491.3 492.7 490.6 493.1 493.8 9 Non-U.S. addressees4.... 9.0 8.8 8.4 8.3 8.7 9.3 9.2 9.9 9.8 10.5 9.5 9.0 10 Real estate 405.'- 409.5 414.0 418.0 422.4 427.1 431.4 436.1 440.7 446.4 450.7' 455.9 11 Individual 282.9 285.4 287.5 289.7 291.5 294.6 297.4 299.5 301.1 303.0 304.5 305.6 12 Security 39.0 39.7 39.2 39.8 40.1 44.1 43.4 50.3 47.9 46.4' 42.5' 44.8 13 Nonbank financial institutions 31.4 31.5 31.3 32.0 32.6 32.6 31.9 32.3 32.4 33.3 34.7 34.2 14 Agricultural 38.6 38.3 37.9 37.1 36.3 35.9 35.4 34.9 34.6' 34.1' 33.7' 33.3 15 State and political subdivisions 48.8 48.8 49.3 50.0 52.8 60.5 60.3 60.2 59.8 59.5 59.4 59.1 16 Foreign banks 9.7 9.6 9.3 9.0 9.1 9.1 9.2 9.2 9.2 9.3' 9.5 9.5 17 Foreign official institutions ... 6.2 6.5 6.6 6.7 6.9 7.0 7.0 6.8 5.3 5.1 6.4 6.5 18 Lease financing receivables ... 18.0 18.1 18.3 18.4 18.8 19.4 19.6 19.8 19.9 19.8 20.0 20.0 19 All other loans 37.7 38.5 38.0 40.3 39.6 36.8 35.7 36.5' 37.3' 37.9' 35.4' 35.8 Not seasonally adjusted 20 Total loans and securities2 1,826.9 1,845.4 1,851.8 1,875.7 1,912.6 1,934.8 1,932.4 1,944.1 1,950.5 1,956.7 1,965.4' 1,981.4 21 U.S. government securities 273.4 274.1 270.3 273.7 271.0 267.7 275.0 273.2 274.0 275.4 276.2 285.3 22 Other securities 150.5 153.6 156.8 163.3 178.7 193.8 188.9 183.9 181.8 182.2 182.5 183.9 23 Total loans and leases2 1,402.S 1,417.7 1,424.7 1,438.7 1,462.9 1,473.3 1,468.5 1,487.1 1,494.7 1,499.0 1,506.7 1,512.1 24 Commercial and industrial.... 487.'; 491.4 492.0 494.8 501.5 501.4 500.1 506.9 510.0 508.5 509.4' 508.6 25 Bankers acceptances held3.. 5.0 4.8 4.8 5.0 5.2 4.9 4.7 5.0 5.2 55..55 66..00 66..00 26 Other commercial and industrial 482. b 486.6 487.2 489.7 496.4 496.5 495.4 501.9 504.9 503.0 503.4' 502.6 2277 U.S. addressees4 473.6 477.5 478.4 481.0 487.3 487.3 486.3 492.7 495.4 493.3 494.0 493.3 28 Non-U.S. addressees4.... 9.3 9.1 8.8 8.8 9.0 9.2 9.1 9.2 9.5 9.7 9.4 9.3 29 Real estate 406.! 410.5 415.2 419.2 423.3 427.3 430.6 434.9 439.5 445.2 450.2 455.8 30 Individual 283.2 286.7 289.0 291.0 294.8 297.0 296.3 296.8 298.6 301.1 303.1 304.9 31 Security 36.6 37.5 38.6 41.0 45.4 46.8 42.6 49.5' 48.4 4455..66 4422..55 4433..00 32 Nonbank financial institutions 31.6 31.7 31.1 32.1 33.4 32.9 31.3 31.7 32.2 33.1 34.6 34.3 3333 Agricultural 39.5 39.2 38.5 37.2 36.0 35.2 34.5 34.0 3333..99'' 3344..((KK 3344..22'' 3344..11 34 State and political subdivisions 48. S' 48.8 49.3 50.0 52.8 60.5 60.3 60.2 59.8 59.5 59.4 59.1 35 Foreign banks 9>. 9.7 9.5 9.3 9.5 9.3 9.3 9.1 9.0 9.1 9.2 9.4 36 Foreign official institutions ... 6.: 6.5 6.6 6.7 6.9 7.0 7.0 6.8 5.3 5.1 6.4 6.5 3/ Lease financing receivables... 17.9 18.1 18.2 18.3 18.8 19.6 19.8 19.8 19.9 19.9 20.0 20.0 38 All other loans 35.7 37.8 36.7 39.1 40.5 36.3 36.5 37.4 38.1' 37.9' 37.7' 36.5 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 arc averages of month-end estimates 4. United States includes the 50 states and the District of Columbia. based on weekly reports from large U.S. agencies and branches and quarterly NOTE. These data also appear in the Board's G.7 (407) release. For address, see reports from all U.S. agencies and branches, New York investment companies inside front cover. majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars 1985r 1986r SSoouurrccee Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Total nondeposit funds 1 Seasonally adjusted2 112.7 114.8 118.8 122.3 128.2 131.7 131.7 141.2 133.9 135.7 133.1 113355..44 2 Not seasonally adjusted 111.9 113.2 117.4 123.4 127.9 131.8 134.4 143.7 134.8 137.8 131.8 131.5 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 142.6 143.6 144.3 149.4 154.1 151.6 152.7 160.6 160.1 157.8 157.5 116655..55 4 Not seasonally adjusted 141.8 142.0 142.9 150.5 153.7 151.6 155.3 163.1 161.0 160.0 156.2 161.6 5 Net balances due to foreign-related institutions, not seasonally adjusted -29.9 -28.8 -25.5 -27.2 -25.9 -19.9 -21.0 -19.4 -26.3 -22.1 -24.4 --3300..22 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -32.8 -30.7 -28.6 -30.2 -31.6 -28.0 -25.8 -26.5 -30.2 -29.3 -30.4 --3333..88 7 Gross due from balances 75.8 74.7 74.2 74.1 76.3 74.3 69.4 71.7 75.3 72.9 72.2 73.9 8 Gross due to balances 43.0 44.0 45.5 43.9 44.7 46.4 43.6 45.2 45.1 43.6 41.7 40.1 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 2.8 1.9 3.2 3.1 5.7 8.1 4.8 7.2 3.9 77..22 6.0 33..66 10 Gross due from balances 55.0 55.9 55.2 55.9 56.7 57.6 60.0 60.6 62.5 59.9 62.8 64.2 11 Gross due to balances 57.9 57.8 58.4 58.9 62.5 65.7 64.8 67.8 66.4 67.1 68.8 67.8 Security RP borrowings 12 Seasonally adjusted® 83.7 85.9 85.6 85.9 89.4 87.6 89.5 89.7 89.7 89.0 89.2 9955..77 13 Not seasonally adjusted 82.9 84.3 84.2 87.0 89.0 87.7 92.2 92.2 90.6 91.2 88.0 91.8 U.S. Treasury demand balances7 14 Seasonally adjusted 16.1 14.9 4.7 13.5 17.5 19.0 21.1 15.7 17.4 21.3 18.5 14.6 15 Not seasonally adjusted 13.4 16.8 5.4 7.9 14.6 24.0 24.2 15.7 17.8 21.8 16.1 16.7 Time deposits, $100,000 or more8 16 Seasonally adjusted 327.2 330.8 333.9 335.9 337.6 349.4 351.9 347.7 346.9 340.4 339.8 333388..66 17 Not seasonally adjusted 327.7 332.7 336.3 337.5 339.4 348.3 350.7 348.3 343.5 339.6 338.1 337.6 1. Commercial banks are those in the 50 states and the District of Columbia banks, term federal funds, overdrawn due from bank balances, loan RPs, and with national or state charters plus agencies and branches of foreign banks, New participations in pooled loans. York investment companies majority owned by foreign banks, and Edge Act 4. Averages of daily figures for member and nonmember banks. corporations owned by domestically chartered and foreign banks. 5. Averages of daily data. Data for lines 1-4 and 12-17 have been revised in light of benchmarking and 6. Based on daily average data reported by 122 large banks. revised seasonal adjustment. 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from commercial banks. Averages of daily data. nonbanks and not seasonally adjusted net Eurodollars. Includes averages of 8. Averages of Wednesday figures. Wednesday data for domestically chartered banks and averages of current and NOTE. The seasonally adjusted series for total nondeposit funds (line 1) and previous month-end data for foreign-related institutions. federal funds, RPs, and other borrowings from nonbanks (line 3) have been 3. Other borrowings are borrowings on any instrument, such as a promissory revised back to November 1980. The revised data are available on request from note or due bill, given for the purpose of borrowing money for the banking the Banking Section, Division of Research and Statistics, Board of Governors of business. This includes borrowings from Federal Reserve Banks and from foreign the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 DomesticN onfinancial Statistics • October 1986 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1985 1986 AAccccoouunntt Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July ALL COMMERCIAL BANKING INSTITUTIONS1 1 Loans and securities 1,976.4 1,985.8 2,035.6 2,068.7 2,065.2 2,078.8 2,091.4 2,113.4 2,101.3 2,105.5 2,137.3 2 Investment securities 403.8 402.4 410.5 420.4 432.5 432.8 427.2 429.5 430.9 432.6 443.9 3 U.S. government securities 258.1 252.9 254.9 253.9 251.9 255.1 253.7 255.8 257.7 259.6 268.4 4 Other 145.7 149.6 155.6 166.5 180.6 177.7 173.5 173.6 173.2 173.0 175.5 5 Trading account assets 26.4 25.0 32.0 31.1 30.1 34.0 30.1 27.8 27.0 27.4 28.7 6 Total loans 1,546.2 1,558.4 1,593.1 1,617.2 1,602.6 1,612.0 1,634.2 1,656.1 1,643.5 1,645.5 1,664.7 7 Interbank loans 128.6 132.4 149.0 150.6 140.4 143.5 146.0 155.7 146.2 139.2 147.5 8 Loans excluding interbank 1,417.6 1,425.9 1,444.2 1,466.7 1,462.2 1,468.5 1,488.1 1,500.4 1,497.2 1,506.3 1,517.2 9 Commercial and industrial 492.3 491.7 495.8 500.2 496.7 501.8 508.5 510.5 506.2 512.3 510.6 10 Real estate 411.5 416.7 420.2 423.7 428.7 431.5 435.9 441.7 446.4 451.4 457.9 11 Individual 287.4 290.3 292.0 296.0 297.4 296.4 296.9 300.4 301.1 304.0 305.6 12 All other 226.3 227.2 236.2 246.7 239.4 238.7 246.9 247.8 243.6 238.7 243.2 13 Total cash assets 189.6 191.5 209.0 213.3 187.3 193.7 198.1 209.9 221.0 196.0 204.8 14 Reserves with Federal Reserve Banks 24.8 19.5 20.4 27.6 21.9 26.2 29.1 25.5 30.2 27.9 28.0 15 Cash in vault 22.1 22.6 21.4 22.2 23.0 22.7 21.8 22.3 23.9 23.0 23.3 16 Cash items in process of collection ... 61.6 68.1 82.1 79.5 64.2 66.9 68.8 80.7 84.6 67.3 72.1 17 Demand balances at U.S. depository institutions 30.6 31.5 35.8 36.0 31.3 31.8 31.1 34.7 36.8 32.0 33.8 18 Other cash assets 50.6 49.8 49.4 48.0 47.0 46.1 47.4 46.7 45.5 45.8 47.6 19 Other assets 196.2 189.2 197.1 201.9 187.0 186.5 195.3 207.0 195.9 196.6 195.6 20 Total assets/total liabilities and capital ... 2,362.2 2,366.5 2,441.8 2,483.8 2,439.6 2,458.9 2,484.8 2,530.3 2,518.3 2,498.1 2,537.7 21 Deposits 1,690.5 1,713.6 1,751.7 1,772.5 1,739.5 1,746.4 1,762.8 1,798.4 1,807.4 1,791.9 1,817.5 22 Transaction deposits 475.2 491.7 522.2 536.9 488.8 492.1 502.5 540.7 542.7 523.3 539.7 23 Savings deposits 440.1 445.8 450.4 452.0 454.2 457.2 462.0 467.8 477.3 482.4 490.9 24 Time deposits 775.3 776.2 779.1 783.6 796.5 797.1 798.3 789.9 787.5 786.3 786.9 25 Borrowings 328.3 313.6 356.1 367.8 364.4 374.7 373.1 390.7 367.4 366.8 380.4 26 Other liabilities 179.0 173.7 167.9 175.8 167.6 169.1 179.3 170.4 173.1 168.5 170.1 27 Residual (assets less liabilities) 164.4 165.5 166.0 167.7 168.2 168.8 169.7 170.8 170.3 170.9 169.6 MEMO 28 U.S. government securities (including trading account) 275.2 268.6 274.8 269.7 269.8 278.4 273.7 274.0 275.1 276.5 287.7 29 Other securities (including trading account) 155.1 158.8 167.7 181.8 192.8 188.4 183.6 183.3 182.8 183.5 184.9 DOMESTICALLY CHARTERED COMMERCIAL BANKS2 30 Loans and securities 1,869.9 1,879.5 1,926.0 1,954.3 1,954.3 1,964.0 1,972.4 1,993.3 1,985.3 1,990.0 2,013.9 31 Investment securities 392.9 391.1 399.5 409.9 421.1 420.8 416.0 416.1 417.1 419.6 432.5 32 U.S. government securities 253.1 247.4 250.1 249.0 247.0 249.6 248.5 248.8 250.2 253.1 263.1 33 Other 139.7 143.8 149.4 160.9 174.1 171.2 167.5 167.2 166.9 166.5 169.3 34 Trading account assets 26.4 25.0 32.0 31.1 30.1 34.0 30.1 27.8 27.0 27.4 28.7 35 Total loans 1,450.6 1,463.4 1,494.5 1,513.4 1,503.1 1,509.2 1,526.3 1,549.4 1,541.3 1,543.0 1,552.8 36 Interbank loans 104.2 108.7 124.1 123.8 115.8 115.8 120.2 129.3 123.3 117.3 122.7 37 Loans excluding interbank 1,346.4 1,354.6 1,370.4 1,389.5 1,387.3 1,393.5 1,406.1 1,420.1 1,418.0 1,425.8 1,430.1 38 Commercial and industrial 440.2 439.3 441.8 445.3 442.5 446.2 448.2 452.3 449.8 452.5 448.3 39 Real estate 406.1 411.5 415.0 418.4 423.6 426.4 430.7 436.3 440.7 445.8 451.9 40 Individual 287.1 290.0 291.7 295.7 297.1 296.2 296.6 300.1 300.8 303.6 305.3 41 All other 213.1 213.8 222.0 230.1 224.1 224.7 230.7 231.4 226.7 223.9 224.5 42 Total cash assets 173.5 175.7 193.4 197.2 171.1 179.1 182.7 194.3 205.8 180.1 187.9 43 Reserves with Federal Reserve Banks 24.2 18.3 19.2 25.8 21.0 25.5 28.4 24.4 28.7 26.3 27.2 44 Cash in vault 22.0 22.6 21.4 22.2 23.0 22.6 21.7 22.2 23.8 22.9 23.2 45 Cash items in process of collection ... 61.3 67.9 81.8 79.3 63.8 66.5 68.4 80.3 84.2 66.7 71.7 46 Demand balances at U.S. depository institutions 29.1 30.1 33.9 34.3 29.4 30.1 29.4 33.0 35.1 30.2 32.0 47 Other cash assets 36.8 36.8 37.1 35.7 34.0 34.3 34.7 34.3 34.0 34.0 33.7 48 Other assets 142.8 141.1 146.2 150.0 137.8 134.6 144.0 150.3 142.8 144.1 143.3 49 Total assets/total liabilities and capital ... 2,186.1 2,196.3 2,265.6 2,301.6 2,263.1 2,278.8 2,299.1 2,337.9 2,334.0 2,314.1 2,345.1 50 Deposits 1,643.1 1,666.4 1,704.6 1,724.4 1,689.6 1,698.2 1,713.1 1,749.1 1,758.7 1,741.4 1,767.3 51 Transaction deposits 468.3 485.0 515.3 529.5 481.6 484.8 495.0 533.1 535.3 515.5 532.1 52 Savings deposits 438.5 444.1 448.6 450.3 452.4 455.3 460.1 465.8 475.2 480.3 489.0 53 Time deposits 736.3 737.3 740.7 744.7 755.7 758.1 758.1 750.1 748.1 745.6 746.3 54 Borrowings 263.8 252.2 285.0 295.7 298.0 304.9 304.8 309.1 294.2 293.5 300.5 55 Other liabilities 117.9 115.4 113.0 116.9 110.5 109.0 114.6 112.0 113.9 111.5 110.2 56 Residual (assets less liabilities) 161.3 162.4 162.9 164.6 165.0 165.6 166.5 167.7 167.2 167.8 167.0 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 1986 AAccccoouunntt June 4r June llr June 18r June 25r July 2 July 9 July 16 July 23 July 30 1 Cash and balances due from depository institutions 103,270 93,824 95,853 93,038 105,927 99,121 106,323 91,325 98,079 2 Total loans, leases and securities, net 938,630 927,382 933,283 929,144 951,244 943,886 951,829 939,169 943,699 3 U.S. Treasury and government agency 93,207 91,590 93,073 93,749 95,609 98,158 103,198 104,315 103,212 4 Trading account 21,410 19,220 20,204 20,233 20,015 21,058 25,319 25,794 22,549 5 Investment account, by maturity 71,797 72,369 72,869 73,516 75,594 77,100 77,878 78,521 80,663 6 19,468 19,181 19,114 18,772 18,496 18,257 18,044 17,756 18,024 7 Over one through five years 33,589 34,530 34,443 34,447 35,903 36,764 36,924 36,932 37,644 8 18,740 18,658 19,312 20,297 21,196 22,079 22,910 23,833 24,995 9 67,604 67,023 67,255 68,266 67,685 66,893 68,170 68,%2 69,411 10 4,148 4,098 4,397 5,251 5,343 4,380 5,311 5,543 5,434 11 Investment account 63,456 62,925 62,858 63,015 62,343 62,513 62,859 63,418 63,976 1? States and political subdivisions, by maturity 56,212 55,894 55,834 55,882 55,014 55,096 55,252 55,659 55,961 13 One year or less 8,794 8,689 8,680 8,585 7,964 7,982 8,014 8,181 8,216 14 Over one year 47,418 47,205 47,154 47,297 47,050 47,114 47,238 47,478 47,746 IS Other bonds, corporate stocks, and securities 7,243 7,031 7,024 7,132 7,329 7,416 7,606 7,759 8,015 16 Other trading account assets 5,391 5,190 5,192 5,577 5,916 5,884 5,777 4,655 4,363 17 65,473 59,944 61,116 54,030 69,149 62,471 65,180 53,883 58,905 18 To commercial banks 39,864 34,735 36,685 31,891 45,004 38,787 40,227 31,876 35,851 19 To nonbank brokers and dealers in securities 16,373 15,644 15,462 14,851 15,048 14,826 17,961 15,266 15,634 70 9,236 9,566 8,969 7,287 9,097 8,857 6,992 6,741 7,421 71 Other loans and leases, gross2 727,148 723,867 726,900 727,698 733,613 731,168 730,209 728,037 728,564 ?? Other loans, gross2 711,142 707,842 710,852 711,642 717,507 715,069 714,238 712,013 712,518 73 Commercial and industrial2 259,328 259,100 258,699 259,790 259,944 258,986 257,461 256,583 256,621 74 Bankers acceptances and commercial paper 2,633 2,531 2,692 2,605 2,544 2,579 2,269 2,184 2,219 75 All other 256,695 256,569 256,007 257,185 257,400 256,406 255,192 254,399 254,402 76 252,556 252,366 251,888 253,243 253,388 252,425 251,171 250,410 250,429 27 Non-U.S. addressees 4,138 4,203 4,119 3,942 4,011 3,982 4,020 3,989 3,972 78 Real estate loans2 189,943 190,607 191,692 191,473 192,441 192,754 193,797 193,849 194,264 79 To individuals for personal expenditures 134,988 135,050 135,408 135,947 136,181 136,063 136,580 136,894 137,320 30 To depository and financial institutions 46,483 45,482 46,218 45,452 46,418 46,981 47,062 46,074 45,581 31 Commercial banks in the United States 15,216 14,065 14,484 14,225 14,466 14,242 14,821 14,916 14,854 37 Banks in foreign countries 5,648 5,329 5,517 5,367 5,856 5,886 5,862 5,577 5,151 33 Nonbank depository and other financial institutions 25,619 26,088 26,217 25,860 26,096 26,853 26,379 25,581 25,576 34 For purchasing and carrying securities 18,329 17,048 16,804 16,617 18,813 17,364 17,651 17,394 16,644 35 To finance agricultural production 6,230 6,245 6,243 6,261 6,286 6,198 6,144 6,151 6,168 36 To states and political subdivisions 36,148 36,097 36,261 36,371 36,048 35,867 36,010 36,097 36,090 37 To foreign governments and official institutions 3,182 3,206 3,291 3,209 3,397 3,345 3,263 3,143 3,227 38 All other 16,510 15,008 16,236 16,520 17,980 17,511 16,270 15,828 16,602 39 Lease financing receivables 16,006 16,024 16,048 16,056 16,106 16,098 15,971 16,023 16,046 40 LESS: Unearned income 4,914 4,921 4,937 4,945 4,901 4,907 4,917 4,926 4,924 41 Loan and lease reserve2 15,279 15,310 15,316 15,230 15,828 15,780 15,788 15,757 15,832 47 Other loans and leases, net2 706,955 703,635 706,647 707,523 712,885 710,480 709,503 707,354 707,807 43 All other assets 130,668 128,059 127,668 126,174 132,345 128,357 128,163 126,374 125,175 44 Total assets 1,172,569 1,149,266 1,156,804 1,148,356 1,189,517 1,171,364 1,186,315 1,156,868 1,166,953 45 Demand deposits 225,299 211,349 215,383 208,308 237,852 221,961 228,160 209,256 215,827 46 Individuals, partnerships, and corporations 172,054 163,245 163,340 158,882 179,905 170,206 173,553 160,347 165,736 47 States and political subdivisions 4,893 4,382 5,589 5,868 5,758 5,108 5,407 4,839 5,100 48 U.S. government 4,505 2,673 4,624 1,898 1,637 2,966 2,921 2,426 2,839 49 Depository institutions in United States 25,543 23,453 24,715 23,940 28,422 24,664 27,460 23,917 24,119 50 Banks in foreign countries 6,260 6,099 6,448 6,472 6,521 6,889 6,545 6,689 6,058 •s 1 Foreign governments and official institutions 846 795 926 804 895 1,143 1,033 822 945 57 Certified and officers' checks 11,198 10,701 9,741 10,443 14,713 10,985 11,241 10,216 11,030 53 Transaction balances other than demand deposits 47,005 46,590 46,124 45,045 47,199 47,363 47,031 46,414 46,446 54 Nontransaction balances 494,181 494,597 492,577 492,293 494,287 493,911 495,469 495,339 495,474 55 Individuals, partnerships and corporations 455,889 456,169 454,486 454,077 457,833 457,790 459,060 458,445 458,594 56 States and political subdivisions 25,914 26,057 25,723 25,839 24,255 24,080 24,278 24,370 24,421 57 U.S. government 790 844 866 854 799 806 806 813 807 58 Depository institutions in the United States 10,171 10,167 10,145 10,242 10,103 9,957 10,047 10,441 10,390 59 Foreign governments, official institutions and banks 1,416 1,359 1,357 1,282 1,297 1,279 1,279 1,269 1,263 60 Liabilities for borrowed money 240,055 231,771 239,441 237,2% 246,983 245,726 250,821 242,231 245,779 61 Borrowings from Federal Reserve Banks 531 391 445 268 481 152 1,470 112 185 6? Treasury tax-and-loan notes 5,294 1,070 12,736 18,341 11,884 8,501 7,746 11,439 12,273 63 All other liabilities for borrowed money3 234,230 230,310 226,260 218,686 234,618 237,072 241,605 230,680 233,321 64 Other liabilities and subordinated note and debentures 84,072 82,692 81,430 83,160 81,489 80,276 82,976 81,738 81,709 65 Total liabilities 1,090,614 1,067,000 1,074,955 1,066,102 1,107,810 1,089,236 1,104,457 1,074,979 1,085,235 66 Residual (total assets minus total liabilities)4 81,956 82,266 81,849 82,254 81,707 82,128 81,858 81,890 81,718 MEMO 67 Total loans and leases (gross) and investments adjusted5 903,743 898,814 902,367 903,203 912,503 911,544 917,486 913,060 913,750 68 Total loans and leases (gross) adjusted2'5 737,540 735,011 736,847 735,611 743,293 740,609 740,340 735,128 736,764 69 Time deposits in amounts of $100,000 or more 155,395 155,082 154,362 153,897 152,518 151,734 152,697 153,252 153,408 70 Loans sold outright to affiliates—total6 1,458 1,431 1,463 1,405 1,386 1,483 1,494 1,659 1,613 71 Commercial and industrial 913 905 939 855 859 953 976 %7 922 7? Other 545 526 524 549 526 531 518 692 691 73 Nontransaction savings deposits (including MMDAs) 206,127 206,887 206,418 206,472 209,167 209,766 210,5% 210,156 210,274 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 Domestic Nonfinancial Statistics • October 1986 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures except as noted 1986 AAccccoouunntt June 4 June 11 June 18 June 25 July 2 July 9 July 16 July 23 July 30 1 Cash and balances due from depository institutions 26,129 22,984 22,613 24,072 26,723 28,072 28,146 23,242 27,006 2 Total loans, leases and securities, net1 201,936 197,436 199,959 195,627' 203,780 199,895 202,334 196,438 199,965 Securities 3 U.S. Treasury and government agency2 0 0 0 0 0 0 0 0 0 4 Trading account2 0 0 0 0 0 0 0 0 0 5 Investment account, by maturity 10,120 9,892 9,717 9,543 10,128 10,139 10,323 10,421 11,026 6 One year or less 1,226 1,072 1,056 1,020 1,055 1,054 1,086 1,074 1,138 7 Over one through five years 4,959 4,919 4,626 4,722 5,295 5,264 5,488 5,488 5,626 8 Over five years 3,935 3,901 4,034 3,801 3,778 3,820 3,750 3,859 4,262 9 Other securities2 0 0 0 0 0 0 0 0 0 10 Trading account2 0 0 0 0 0 0 0 0 0 11 Investment account 15,217 15,035 15,008 15,118 15,000 15,048 15,094 15,248 15,362 12 States and political subdivisions, by maturity 13,226 13,203 13,175 13,133 12,994 13,039 13,054 13,169 13,266 13 One year or less 1,712 1,714 1,678 1,618 1,534 1,483 1,485 1,536 1,562 14 Over one year 11,514 11,489 11,498 11,515 11,461 11,556 11,569 11,633 11,705 15 Other bonds, corporate stocks and securities 1,990 1,832 1,833 1,985 2,006 2,009 2,039 2,079 2,095 16 Other trading account assets2 0 0 0 0 0 0 0 0 0 Loans and leases 17 Federal funds sold3 30,682 29,213 30,598 25,733 31,623 28,483 31,796 25,834 29,585 18 To commercial banks 14,504 12,382 14,669 12,114 16,304 13,473 15,835 12,151 14,393 19 To nonbank brokers and dealers in securities 8,642 8,882 8,655 7,740 8,068 8,103 10,458 8,011 8,798 20 To others 7,535 7,948 7,273 5,880 7,251 6,907 5,503 5,671 6,394 21 Other loans and leases, gross 151,716 149,154 150,506 151,040' 152,751 151,965 150,910 150,736 149,832 22 Other loans, gross 148,687 146,113 147,451 147,977' 149,677 148,876 147,829 147,636 146,716 23 Commercial and industrial 56,742 56,603 56,251 57,108 57,011 56,056 56,040 55,550 55,760 24 Bankers acceptances and commercial paper 592 549 511 580 499 567 480 473 501 25 All other 56,150 56,054 55,740 56,528 56,512 55,488 55,560 55,076 55,258 26 U.S. addressees 55,718 55,619 55,328 56,093 56,088 55,078 55,146 54,671 54,855 27 Non-U.S. addressees 432 435 412 435 425 410 414 405 403 28 Real estate loans 31,808 31,885 32,113 32,159 32,383 32,522 32,609 32,725 32,582 29 To individuals for personal expenditures 18,237 18,297 18,348 18,442 18,552 18,786 18,843 18,890 18,966 30 To depository and financial institutions 16,638 16,075 16,611 16,249 16,353 16,890 16,781 16,714 16,137 31 Commercial banks in the United States 7,314 6,747 7,229 7,008 6,928 6,795 7,008 7,195 6,875 32 Banks in foreign countries 2,336 2,125 2,373 2,284 2,387 2,749 2,883 2,656 2,221 33 Nonbank depository and other financial institutions 6,987 7,203 7,008 6,958 7,037 7,346 6,889 6,864 7,041 34 For purchasing and carrying securities 9,894 8,689 8,707 8,432 9,645 9,132 8,854 9,270 8,358 35 To finance agricultural production 296 285 285 279 288 275 275 278 280 36 To states and political subdivisions 9,186 9,191 9,278 9,326 9,054 8,892 8,860 8,844 8,746 37 To foreign governments and official institutions 776 823 888 811 1,008 956 856 738 830 38 All other 5,111 4,264 4,970 5,171' 5,383 5,368 4,710 4,626 5,056 39 Lease financing receivables 3,030 3,041 3,055 3,063 3,074 3,089 3,081 3,101 3,116 40 LESS: Unearned income 1,447 1,449 1,460 1,473 1,446 1,456 1,463 1,472 1,474 41 Loan and lease reserve 4,353 4,409 4,409 4,335 4,277 4,285 4,326 4,329 4,366 42 Other loans and leases, net 145,917 143,296 144,637 145,232' 147,028 146,224 145,122 144,936 143,992 43 All other assets4 76,256 72,726 71,979 71,903 75,232 72,029 76,002 74,399 69,718 44 Total assets 304,321 293,146 294,552 291,602' 305,735 299,9% 306,483 294,079 296,689 Deposits 45 Demand deposits 59,756 52,544 55,605 55,635 64,085 59,054 61,319 55,823 58,093 46 Individuals, partnerships, and corporations 41,649 35,308 37,458 36,788' 41,974 39,945 41,026 38,014 40,426 47 States and political subdivisions 664 546 734 1,262 1,002 811 986 643 606 48 U.S. government 892 514 867 264 218 546 601 474 658 49 Depository institutions in the United States 5,877 5,292 6,217 6,382 7,113 5,818 7,381 5,856 5,482 50 Banks in foreign countries 4,956 4,981 5,273 5,151 5,142 5,491 5,189 5,359 4,780 51 Foreign governments and official institutions 708 665 769 658 750 999 814 593 788 52 Certified and officers' checks 5,009 5,238 4,286 5,129 7,886 5,444 5,322 4,883 5,352 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 5,169 5,201 5,279 5,248 5,475 5,480 5,443 5,430 5,462 54 Nontransaction balances 92,290 92,466 91,602 91,198 91,380 91,151 92,150 91,731 91,781 55 Individuals, partnerships and corporations 83,124 83,126 82,448 82,196 83,112 82,971 83,806 83,280 83,326 56 States and political subdivisions 5,999 6,101 5,997 6,033 5,309 5,263 5,258 5,367 5,410 57 U.S. government 119 174 174 78 73 74 76 87 88 58 Depository institutions in the United States 2,267 2,295 2,221 2,202 2,183 2,147 2,313 2,312 2,285 59 Foreign governments, official institutions and banks 781 768 763 688 703 696 696 685 672 60 Liabilities for borrowed money 85,562 82,028 81,962 78,532 84,922 84,979 85,760 80,846 81,581 61 Borrowings from Federal Reserve Banks 0 0 0 0 0 0 1,250 0 0 62 Treasury tax-and-loan notes 2,122 194 3,309 4,592 2,827 2,529 2,245 3,479 3,594 63 All other liabilities for borrowed money5 83,440 81,834 78,653 73,940 82,096 82,449 82,266 77,366 77,987 64 Other liabilities and subordinated note and debentures 35,081 34,359 33,792 34,346 33,102 32,387 34,997 33,558 33,227 65 Total liabilities 277,858 266,598 268,241 264,959' 278,965 273,052 279,669 267,387 270,144 66 Residual (total assets minus total liabilities)6 26,463 26,548 26,311 26,643 26,770 26,944 26,813 26,691 26,546 MEMO 67 Total loans and leases (gross) and investments adjusted1'7 185,917 184,165 183,930 182,314' 186,271 185,368 185,280 182,893 184,536 68 Total loans and leases (gross) adjusted7 160,579 159,238 159,205 157,653' 161,142 160,180 159,863 157,224 158,148 69 Time deposits in amounts of $100,000 or more 34,779 34,428 34,003 33,456 33,362 33,192 33,911 33,463 33,326 1. Excludes trading account securities. 6. Not a measure of equity capital for use in capital adequacy analysis or for 2. Not available due to confidentiality. other analytic uses. 3. Includes securities purchased under agreements to resell. 7. Exclusive of loans and federal funds transactions with domestic commercial 4. Includes trading account securities. banks. 5. Includes federal funds purchased and securities sold under agreements to NOTE. These data also appear in the Board's H.4.2 (504) release. For address, repurchase. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS' Assets and Liabilities Millions of dollars, Wednesday figures 1986 AAccccoouunntt June 4 June 11 June 18 June 25 July 2 July 9 July 16 July 23 July 30 1 Cash and due from depository institutions . 10,224 9,149 10,126 9,793 9,883 9,420 10,528 9,959 11,169 2 Total loans and securities 67,599R 66,538 67,739 66,675 68,664 67,167 67,811 68,438 69,394 3 U.S. Treasury and govt, agency securities 5,517 5,066 4,618 4,649 5,029 4,711 5,076 4,947 4,606 4 Other securities 4,421 4,429 4,445 4,469 4,489 4,546 4,508 4,597 4,659 5 Federal funds sold2 3,886 4,146 4,893 3,125 4,037 3,611 3,237 4,142 4,475 6 To commercial banks in the United States 2,746 3,036 4,024 2,457 3,027 2,740 2,465 3,126 3,540 7 To others 1,141 1,110 869 668 1,010 870 772 1,016 935 8 Other loans, gross 53,774R 52,895 53,783 54,432 55,108 54,299 54,990 54,752 55,654 9 Commercial and industrial 32,185R 31,882 32,365 33,113 32,833 32,691 32,947 32,127 32,531 10 Bankers acceptances and commercial paper 2,705 2,604 2,854 2,912 2,802 2,826 2,660 2,695 3,000 11 All other 29,480' 29,278 29,511 30,201 30,031 29,864 30,288 29,432 29,532 12 U.S. addressees 26,726 26,996 27,207 27,900 27,744 27,496 28,038 27,101 27,134 13 Non-U.S. addressees 2,754R 2,282 2,304 2,301 2,287 2,369 2,249 2,330 2,398 14 To financial institutions 14,486 14,216 14,224 14,056 14,397 14,532 14,448 14,907 15,363 15 Commercial banks in the United States . 11,082 10,771 10,720 10,919 11,176 11,417 11,356 11,824 12,345 16 Banks in foreign countries 962 889 1,034 891 1,056 915 885 1,032 1,051 17 Nonbank financial institutions 2,442 2,556 2,470 2,247 2,165 2,199 2,206 2,050 1,967 18 To foreign govts, and official institutions .. 559 554 584 609 584 594 629 637 638 19 For purchasing and carrying securities .. 2,573 2,221 2,544 2,557 3,186 2,560 3,041 3,032 3,045 20 All other 3,970 4,022 4,065 4,095 4,108 3,922 3,925 4,050 4,076 21 Other assets (claims on nonrelated parties).. 21,576 22,390 21,858 21,802 22,200 22,173 22,427 21,967 22,044 22 Net due from related institutions 11,859 12,136 11,677 12,162 11,537 13,859 12,607 12,867 12,779 23 Total assets 111,257' 110,212 111,399 110,432 112,284 112,619 113,373 113,231 115,387 24 Deposits or credit balances due to other than directly related institutions 31,299 31,256 31,754 33,408 32,898 33,018 33,303 32,834 33,853 25 Transaction accounts and credit balances3 3,092 2,866 3,294 3,460 3,454 3,981 3,259 2,918 3,370 26 Individuals, partnerships, and corporations 1,564 1,594 1,609 1,767 1,701 1,865 1,676 1,680 1,928 27 Other 1,529 1,272 1,685 1,694 1,753 2,116 1,583 1,238 1,441 28 Nontransaction accounts4 28,207 28,389 28,460 29,947 29,443 29,037 30,044 29,916 30,484 29 Individuals, partnerships, and corporations 23,294 23,420 23,517 24,501 23,964 23,627 24,590 23,964 24,097 30 Other 4,912 4,969 4,943 5,446 5,480 5,410 5,453 5,952 6,387 31 Borrowings from other than directly related institutions 45,829 43,504 46,421 42,591 47,005 45,722 46,030 45,453 45,863 32 Federal funds purchased5 23,845 21,886 24,276 20,600 25,488 24,459 23,929 23,465 21,595 33 From commercial banks in the United States 16,033 14,123 17,543 13,820 17,460 17,278 16,958 15,026 14,990 34 From others 7,812 7,762 6,733 6,780 8,027 7.181 6,972 8,438 6,605 35 Other liabilities for borrowed money.... 21,983 21,618 22,145 21,991 21,518 21,263 22,101 21,988 24,268 36 To commercial banks in the United States 19,519 18,965 19,330 19,002 18,739 18,736 19,319 19,190 21,256 37 To others 2,464 2,653 2,815 2,989 2,779 2,527 2,781 2,797 3,012 38 Other liabilities to nonrelated parties 23,231 23,828 23,310 23,392 23,962 23,850 24,036 23,735 23,795 39 Net due to related institutions 10,898R 11,624 9,914 11,041 8,418 10,029 10,004 11,208 11,876 40 Total liabilities 111,257' 110,212 111,399 110,432 112,284 112,619 113,373 113,231 115,387 MEMO 41 Total loans (gross) and securities adjusted6 53,770' 52,730 52,994 53,299 54,460 53,010 53,990 53,488 53,510 42 Total loans (gross) adjusted6 43,832' 43,235 43,932 44,181 44,942 43,752 44,406 43,944 44,244 1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and 4. Includes savings deposits, money market deposit accounts, and time agencies of foreign banks that include those branches and agencies with assets of deposits. $750 million or more on June 30, 1980, plus those branches and agencies that had 5. Includes securities sold under agreements to repurchase. reached the $750 million asset level on Dec. 31, 1984. 6. Exclusive of loans to and federal funds sold to commercial banks in the 2. Includes securities purchased under agreements to resell. United States. 3. Includes credit balances, demand deposits, and other checkable deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • October 1986 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1985 1986 11998811 11998822 11998833 11998844 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar.3'4 June Sept. Dec. Mar. June 1 All holders—Individuals, partnerships, and corporations 288.9 291.8 293.S 302.7 286.3 298.4 299.3 321.0 307.4 2 Financial business 28.0 35.4 32.8 31.7 27.3 27.9 28.1 32.3 31.8 1 3 Nonfinancial business 154.8 150.5 161.1 166.3 157.9 164.5 167.2 178.5 166.6 n.a. 4 5 C Fo o r n e s i u g m n er 8 2 6 . . 9 6 8 3 5 . . 0 9 78 3. . 3 5 8 3 1 . . 6 5 7 3 8 . . 6 9 82 3. . 7 8 82 3. . 5 0 85 3 . . 5 5 84 3 . . 0 4 11 6 Other 16.7 17.0 17.8 19.7 18.7 19.5 18.5 21.2 21.6 T Weekly reporting banks 1985 1986 11998811 11998822 11998833 11998844 DDeecc.. DDeecc.. DDeecc.. DDeecc..22 Mar.3-4 June Sept. Dec. Mar. June 7 All holders—Individuals, partnerships, and corporations 137.5 144.2 146.2 157.1 147.7 151.2 153.6 168.6 159.7 4 8 Financial business 21.0 26.7 24.2 25.3 21.9 22.1 22.7 25.9 25.5 1 9 Nonfinancial business 75.2 74.3 79.8 87.1 82.3 83.7 85.5 94.5 86.8 n.a. 10 Consumer 30.4 31.9 29.7 30.5 30.2 31.0 31.6 33.2 32.6 1 1 1 1 2 O Fo th re e i r g n 2 8 . . 8 0 8 2 . . 4 9 9 3 . . 3 1 1 3 0 . . 4 9 9 3 . . 8 4 1 3 0 . . 5 9 1 3 0 . . 3 5 1 3 2 . . 1 0 1 3 1 . . 3 5 t1 1. Figures include cash items in process of collection. Estimates of gross thrift institutions. Historical data have not been revised. The estimated volume of deposits are based on reports supplied by a sample of commercial banks. Types of such deposits for December 1984 is $5.0 billion at all insured commercial banks depositors in each category are described in the June 1971 BULLETIN, p. 466. and $3.0 billion at weekly reporting banks. Figures may not add to totals because of rounding. 4. Historical data back to March 1985 have been revised to account for 2. Beginning in March 1984, these data reflect a change in the panel of weekly corrections of bank reporting errors. Historical data before March 1985 have not reporting banks, and are not comparable to earlier data. Estimates in billions of been revised, and may contain reporting errors. Data for all commercial banks for dollars for December 1983 based on the new weekly reporting panel are: financial March 1985 were revised as follows (in billions of dollars): all holders, -.3; business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other, financial business, -.8; nonfinancial business, -.4; consumer, .9; foreign, .1; 9.5. other, -.1. Data for weekly reporting banks for March 1985 were revised as 3. Beginning March 1985, financial business deposits and, by implication, total follows (in billions of dollars): all holders, - .1; financial business, - .7; nonfinangross demand deposits have been redefined to exclude demand deposits due to cial business, -.5; consumer, 1.1; foreign, .1; other, - .2. 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 1986 IInnssttrruummeenntt DD 1199 ee 88 cc 11 .. DD 1199 ee 88 cc 22 .. DD 1199 ee 88 cc 33 .. DD 1199 ee 88 cc 44 .. DD 1199 ee 88 cc 55 .. Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 165,829 166,436 187,658 237,586 300,899 302,160 297,862 301,110 297,108 309,843 310,711 FFiinnaanncciiaall ccoommppaanniieess33 DDeeaalleerr--ppllaacceedd ppaappeerr44 22 TToottaall 30,333 34,605 44,455 56,485 78,443 79,048 78,136 84,071 83,871 87,423 89,757 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 6,045 2,516 2,441 2,035 1,602 1,410 1,475 1,348 1,520 1,575 1,568 DDiirreeccttllyy ppllaacceedd ppaappeerr55 44 TToottaall 81,660 84,393 97,042 110,543 135,504 134,584 134,443 135,510 135,801 142,252 142,933 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 26,914 32,034 35,566 42,105 44,778 37,418 36,948 37,013 37,835 39,009 40,147 66 NNoonnffiinnaanncciiaall ccoommppaanniieess66 53,836 47,437 46,161 70,558 86,952 88,528 85,283 81,529 77,436 80,168 78,021 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 69,226 79,543 78,309 77,121 68,115 68,314 67,188 66,882 66,235 66,759 67,080 Holder 8 Accepting banks 10,857 10,910 9,355 9,811 11,174 11,145 12,331 13,061 12,287 12,216 12,789 9 Own bills 9,743 9,471 8,125 8,621 9,448 9,407 10,105 10,722 10,261 10,254 10,641 10 Bills bought 1,115 1,439 1,230 1,191 1,726 1,738 2,225 2,339 2,026 1,962 2,147 Federal Reserve Banks 11 Own account 195 1,480 418 0 0 0 0 0 0 0 0 12 Foreign correspondents 1,442 949 729 671 937 898 874 877 746 664 896 13 Others 56,731 66,204 67,807 66,639 56,004 56,271 53,984 52,944 53,202 53,880 53,396 Basis 14 Imports into United States 14,765 17,683 15,649 17,560 15,147 14,820 14,806 13,595 14,464 15,094 15,106 15 Exports from United States 15,400 16,328 16,880 15,859 13,204 12,951 13,115 13,410 13,473 13,574 13,721 16 All other 39,060 45,531 45,781 43,702 39,765 40,543 39,268 39,878 38,299 38,091 38,254 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 Average Month rate 11.50 1985—Jan. 15.. 10.50 1984—Jan. 11.00 1985—Apr 12.00 May 20.. 10.00 Feb. 11.00 12.50 June 18.. 9.50 Mar. 11.21 June 13.00 Apr. 11.93 July 12.75 1986—Mar. 7.. 9.00 May 12.39 Aug 12.50 Apr. 21.. 8.50 June 12.60 Sept 12.00 July 11.. 8.00 July 13.00 Oct 11.75 Aug. 13.00 Nov 11.25 Sept 12.97 Dec 10.75 Oct. 12.58 Nov. 11.77 1986—Jan Dec. 11.06 Feb Mar 1985—Jan. . 10.61 Apr Feb. 10.50 May Mar. 10.50 June July NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 DomesticN onfinancial Statistics • October 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. 1986 1986, week ending IInnssttrruummeenntt 11998833 11998844 11998855 Apr. May June July June 27 July 4 July 11 July 18 July 25 MONEY MARKET RATES 1 Federal funds12 9.09 10.22 8.10 6.99 6.85 6.92 6.56 6.86 7.02 6.87 6.51 6.42 2 Discount window borrowing1'2 3 8.50 8.80 7.69 6.83 6.50 6.50 6.16 6.50 6.50 6.50 6.07 6.00 Commercial paper4 5 3 1-month 8.87 10.05 7.94 6.75 6.72 6.79 6.42 6.74 6.71 6.59 6.34 6.28 4 3-month 8.88 10.10 7.95 6.60 6.62 6.71 6.33 6.64 6.56 6.45 6.26 6.22 5 6-month 8.89 10.16 8.01 6.47 6.53 6.63 6.24 6.51 6.41 6.32 6.19 6.17 Finance paper, directly placed4 5 6 1-month 8.80 9.97 7.91 6.69 6.73 6.80 6.42 6.72 6.69 6.62 6.31 6.28 7 3-month 8.70 9.73 7.77 6.49 6.46 6.61 6.31 6.58 6.47 6.46 6.25 6.20 8 6-month 8.69 9.65 7.75 6.44 6.33 6.53 6.24 6.50 6.38 6.35 6.19 6.17 Bankers acceptances5'6 9 3-month 8.90 10.14 7.92 6.48 6.54 6.60 6.23 6.52 6.37 6.31 6.19 6.15 10 6-month 8.91 10.19 7.96 6.36 6.45 6.49 6.14 6.34 6.25 6.22 6.10 6.08 Certificates of deposit, secondary market7 11 1-month 8.96 10.17 7.97 6.74 6.68 6.79 6.43 6.76 6.67 6.57 6.37 6.33 12 3-month 9.07 10.37 8.05 6.60 6.65 6.73 6.37 6.62 6.51 6.43 6.33 6.31 13 6-month 9.27 10.68 8.25 6.57 6.64 6.72 6.36 6.59 6.48 6.41 6.32 6.31 14 Eurodollar deposits, 3-month8 9.56 10.73 8.28 6.80 6.86 6.95 6.54 6.91 6.76 6.65 6.54 6.46 U.S. Treasury bills5 Secondary market9 15 3-month 8.61 9.52 7.48 6.06 6.15 6.21 5.83 6.07 5.97 5.86 5.75 5.78 16 6-month 8.73 9.76 7.65 6.08 6.19 6.27 5.86 6.08 5.93 5.88 5.81 5.84 17 1-year 8.80 9.92 7.81 6.06 6.25 6.32 5.90 6.14 5.98 5.92 5.83 5.89 Auction average10 18 3-month 8.52 9.57 7.47 6.06 6.12 6.21 5.84 6.09 5.99 5.85 5.78 5.72 19 6-month 8.76 9.80 7.64 6.07 6.16 6.28 5.85 6.13 5.96 5.85 5.80 5.77 20 1-year 8.86 9.91 7.83 5.94 6.17 6.59 5.98 n.a. n.a. 5.98 n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 9.57 10.89 8.43 6.44 6.65 6.73 6.27 6.54 6.36 6.29 6.18 6.25 22 2-year 10.21 11.65 9.27 6.70 7.07 7.18 6.67 6.93 6.78 6.72 6.58 6.63 23 3-year 10.45 11.89 9.64 6.86 7.27 7.41 6.86 7.14 6.99 6.92 6.73 6.82 24 5-year 10.80 12.24 10.13 7.05 7.52 7.64 7.06 7.33 7.21 7.13 6.91 7.01 25 7-year 11.02 12.40 10.51 7.16 7.65 7.75 7.22 7.42 7.29 7.27 7.11 7.17 26 10-year 11.10 12.44 10.62 7.30 7.71 7.80 7.30 7.45 7.35 7.33 7.19 7.26 27 20-year 11.34 12.48 10.97 7.50 7.81 7.69 7.29 7.40 7.29 7.26 7.18 7.30 28 30-year 11.18 12.39 10.79 7.39 7.52 7.57 7.27 7.36 7.21 7.18 7.16 7.32 Composite13 29 Over 10 years (long-term) 10.84 11.99 10.75 7.59 8.02 8.23 7.86 7.92 7.80 7.79 7.72 7.91 State and local notes and bonds Moody's series14 30 Aaa 8.80 9.61 8.60 6.81 7.22 7.49 7.24 7.25 7.25 7.20 7.20 7.30 31 Baa 10.17 10.38 9.58 7.45 7.84 8.14 7.95 8.00 8.00 7.90 7.90 8.00 32 Bond Buyer series15 9.51 10.10 9.11 7.20 7.54 7.87 7.51 7.59 7.51 7.45 7.45 7.60 Corporate bonds Seasoned issues16 33 All industries 12.78 13.49 12.05 9.51 9.69 9.73 9.52 9.59 9.54 9.52 9.48 9.53 34 Aaa 12.04 12.71 11.37 8.79 9.09 9.13 8.88 9.01 8.93 8.89 8.84 8.86 35 Aa 12.42 13.31 11.82 9.21 9.43 9.49 9.28 9.35 9.30 9.26 9.24 9.30 36 A 13.10 13.74 12.28 9.83 9.94 9.96 9.76 9.81 9.78 9.77 9.75 9.76 37 Baa 13.55 14.19 12.72 10.19 10.29 10.34 10.16 10.20 10.15 10.14 10.10 10.17 38 A-rated, recently-offered utility bonds17 12.73 13.81 12.06 9.26 9.50 9.65 9.57 9.55 9.49 9.54 9.51 9.67 MEMO: Dividend/price ratio18 39 Preferred stocks 11.02 11.59 10.49 8.97 9.00 8.89 8.68 8.79 8.78 8.72 8.69 8.55 40 Common stocks 4.40 4.64 4.25 3.43 3.42 3.36 3.41 3.33 3.27 3.40 3.52 3.45 1. Weekly and monthly figures are averages of all calendar days, where the places. Thus, average issuing rates in bill auctions will be reported using two rate for a weekend or holiday is taken to be the rate prevailing on the preceding rather than three decimal places. business day. The daily rate is the average of the rates on a given day weighted by 11. Yields are based on closing bid prices quoted by at least five dealers. the volume of transactions at these rates. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 2. Weekly figures are averages for statement week ending Wednesday. are read from a yield curve at fixed maturities. Based on only recently issued, 3. Rate for the Federal Reserve Bank of New York. actively traded securities. 4. Unweighted average of offering rates quoted by at least five dealers (in the 13. Averages (to maturity or call) for all outstanding bonds neither due nor case of commercial paper), or finance companies (in the case of finance paper). callable in less than 10 years, including one very low yielding "flower" bond. Before November 1979, maturities for data shown are 30-59 days, 90—119 days, 14. General obligations based on Thursday figures; Moody's Investors Service. and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150- 15. General obligations only, with 20 years to maturity, issued by 20 state and 179 days for finance paper. local governmental units of mixed quality. Based on figures for Thursday. 5. Yields are quoted on a bank-discount basis, rather than an investment yield 16. Daily figures from Moody's Investors Service. Based on yields to maturity basis (which would give a higher figure). on selected long-term bonds. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Compilation of the Federal Reserve. This series is an estimate of the yield (which may be, but need not be, the average of the rates quoted by the dealers). on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 7. Unweighted average of offered rates quoted by at least five dealers early in call protection. Weekly data are based on Friday quotations. the day. 18. Standard and Poor's corporate series. Preferred stock ratio based on a 8. Calendar week average. For indication purposes only. sample of ten issues: four public utilities, four industrials, one financial, and one 9. Unweighted average of closing bid rates quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Rates are recorded in the week in which bills are issued. Beginning with the NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the For address, see inside front cover. percentage yield (on a bank discount basis) that they would accept to two decimal 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 Nov. Dec. Jan. Feb. Mar. Apr. May June July Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 92.63 92.46 108.09 113.93 119.33 120.16 126.43 133.97 137.25 137.37 140.82 138.32 2 Industrial 107.45 108.01 123.79 130.53 136.77 137.13 144.03 152.75 157.35 158.59 163.15 158.06 3 Transportation 89.36 85.63 104.11 108.61 113.52 115.72 124.18 128.66 125.92 122.21 120.65 112.03 4 Utility 47.00 46.44 56.75 59.07 61.69 62.46 65.18 68.06 69.35 68.65 70.69 74.20 5 Finance 95.34 89.28 114.21 122.83 128.86 132.36 142.13 153.94 154.83 151.28 151.73 150.23 6 Standard & Poor's Corporation (1941-43 = 10)' ... 160.41 160.50 186.84 197.45 207.26 208.19 219.37 232.33 237.97 238.46 245.30 240.18 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 216.48 207.96 229.10 236.53 243.28 245.27 246.09 264.91 270.59 274.22 281.18 269.93 Volume of trading (thousands of shares) 8 New York Stock Exchange 85,418 91,084 109,191 122,263 133,446 130,872 152,590 160,755 146,330 127,624 126,151 137,709 9 American Stock Exchange 8,215 6,107 8,355 9,183 11,890 11,105 14,057 15,902 13,503 11,870 12,795 10,320 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 23,000 22,470 28,390 26,400 28,390 26,810 27,450 29,090 30,760 32,370 32,480 33,170 Free credit balances at brokers4 11 Margin-account5 1,755 2,715 2,080 2,715 2,645 2,545 2,715 3,065 2,405 2,585 2,570 12 Cash-account 8,430 10,215 12,840 10,340 12,840 11,695 12,355 13,920 14,340 12,970 13,570 14,600 Margin-account debt at brokers (percentage distribution, end of period)6 13 Total 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)1 14 Under 40 22.0 18.0 34.0 35.0 34.0 32.0 28.0 29.0 29.0 30.0 31.0 15 40-49 22.0 18.0 20.0 20.0 20.0 21.0 19.0 19.0 20.0 19.0 20.0 16 50-59 16.0 16.0 19.0 19.0 19.0 19.0 21.0 22.0 20.0 22.0 20.0 n.a. 17 60-69 9.0 9.0 11.0 11.0 11.0 11.0 13.0 13.0 13.0 12.0 13.0 1 18 70-79 6.0 5.0 8.0 7.0 8.0 8.0 9.0 8.0 9.0 8.0 8.0 I 19 80 or more 6.0 6.0 8.0 8.0 8.0 9.0 10.0 9.0 9.0 9.0 8.0 R Special miscellaneous-account balances at brokers (end of period)6 20 Total balances (millions of dollars)8 58,329 75,840 99,310 95,240 99,310 99,290 104,228 103,450 105,790 109,620 112,401 \ Distribution by equity status (percent) 1 21 Net credit status 63.0 59.0 58.0 57.0 58.0 59.0 60.0 61.0 59.0 58.0 59.0 n.a. Debt status, equity of 1 22 60 percent or more 28.0 29.0 31.0 32.0 31.0 33.0 32.0 31.0 33.0 33.0 32.0 I 23 Less than 60 percent 9.0 11.0 11.0 11.0 11.0 8.0 8.0 8.0 8.0 9.0 9.0 T Margin requirements (percent of market value and effective date)9 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 and dealers. Data items that are no longer reported include distributions of margin companies. With this change the index includes 400 industrial stocks (formerly debt by equity status of the account and special miscellaneous-account 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 balances. financial. 7. Each customer's equity in his collateral (market value of collateral less net 2. Beginning July 5, 1983, the American Stock Exchange rebased its index debit balance) is expressed as a percentage of current collateral values. effectively cutting previous readings in half. 8. Balances that may be used by customers as the margin deposit required for 3. Beginning July 1983, under the revised Regulation T, margin credit at additional purchases. Balances may arise as transfers based on loan values of broker-dealers includes credit extended against stocks, convertible bonds, stocks other collateral in the customer's margin account or deposits of cash (usually sales acquired through exercise of subscription rights, corporate bonds, and govern- proceeds) occur. ment securities. Separate reporting of data for margin stocks, convertible bonds, 9. Regulations G, T, and U of the Federal Reserve Board of Governors, and subscription issues was discontinued in April 1984, and margin credit at prescribed in accordance with the Securities Exchange Act of 1934, limit the broker-dealers became the total that is distributed by equity class and shown on amount of credit to purchase and carry margin stocks that may be extended on lines 17-22. securities as collateral by prescribing a maximum loan value, which is a specified 4. Free credit balances are in accounts with no unfulfilled commitments to the percentage of the market value of the collateral at the time the credit is extended. brokers and are subject to withdrawal by customers on demand. Margin requirements are the difference between the market value (100 percent) 5. New series beginning June 1984. and the maximum loan value. The term "margin stocks" is defined in the 6. In July 1986, the New York Stock Exchange stopped reporting certain data corresponding regulation. items that were previously obtained in a monthly survey of a sample of brokers Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • October 1986 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1985 1986 AAccccoouunntt Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Savings and loan associations 1 Assets 773,417 903,488R 929,345' 930,2%' 936,391' 945,856' 952,867' 942,559' 947,075' 951,580' 958,567' 966,836' 957,447' 7 Mortgages 449944,,778899 555,277 574,220 575,685 580,780' 583,262' 585,462' 580,734' 578,847' 577,062' 577,691' 577,593' 566,630' 3 96,731 100,508 99,088' %,844' 97,303' 97,261' 98,854' 99,542' 102,805' 107.64C 112,074' 4 Cash and investment securities1 . 104,274 124,801' 119,991' 115,938' 115,689' 124,505' 127,659' 124,094' 127,954' 132,090' 132,645' 135,977' 132,034' 5 Other 174,354 223,396' 235,195' 238,708' 239,922' 238,089' 239,745' 237,734' 240,272' 242,428' 248,231' 253,265' 257,784' 6 Liabilities and net worth 773,417 903,488' 929,345' 930,2%' 936,391' 945,856' 952,867' 942,559' 947,075' 951,580' 958,567' 966,836' 957,447' 7 Savings capital 634,455 725,045' 743,651' 742,928' 744,093' 747,219' 752,903' 748,066' 749,876' 754,973' 753,725' 754,28C 746,489' 8 Borrowed money 92,127 125,666' 123,970' 128,499' 130,927' 135,179' 138,997' 131,781' 131,819' 133,711' 139,468' 144,301' 146.19C 9 FHLBB 52,626 64,207 70,584 71,665 72,639' 72,370 73,888 71,488 71,214' 70,464' 73,626' 73,504' 73,375 10 Other 39,501 61,459' 53,386' 56,834' 58,288' 62,809' 65,109' 60,293' 60,605' 63,247' 65,842' 70,797' 72,815' 11 Other 15,968 17,944' 22,953' 19,952' 22,079' 23,638' 19,801' 21,784' 23,902' 20,783' 22,810' 25,606' 22.63C 12 Net worth2 30,867 34,833' 38,770' 38,917' 39,292' 39,820' 41,086' 40,928' 41,477' 42,113' 42,564' 42,649' 42,138' MEMO 13 Mortgage loan commitments outstanding3 54,113 61,305' 60,636' 59,718' 59,149' 59,280' 56,051' 52,999' 54,923' 56,735' 57,733' 59,771' 59,919' FSLIC-insured federal savings banks 14 Assets 64,969 98,559 121,939 127,005 128,415 130,754 131,868 142,071' 146,513' 152,796' 155,685 164,NY 179,739' 15 Mortgages 38,698 57,429 68,601 71,010 72,093 72,852 72,355' 78,987' 81,645 84,697' 86,593' 89,151' 99,498' 16 Mortgage-backed securities.... 7,172 9,949 13,232 14,323 14,549 15,386 15,676' 16,619' 16,366 17,852' 18,66C 19,846' 21,167' 17 Other 6,595 10,971 11,505 11,591 11,831' 11,895' 11,723' 13,258' 13,766 13,923' 14,597 15,034' 16,781' 18 Liabilities and net worth 64,969 98,559 121,939 127,005 128,415 130,754 131,868' 142,071' 146,513 152,796' 155,685 164,113' 179,739' 19 Savings capital 53,227 79,572 97,176 101,330 101,874 102,937 103,462' 111,808 114,743 119,403' 121,133 126,103' 138,149' 70 Borrowed money 7,477 12,798 16,296 17,228 17,672 18,606 19,323' 20,413' 21,248 22,722' 23,189 25,680' 28,074' 71 FHLBB 4,640 7,515 9,547 9,821 9,935 10,353 10,510' 11,151' 11,283 12,064 12,476 12.83C 15,301 77 Other 2,837 5,283 6,749 7,407 7,737 8,253 8,813 9,262' 9,%5 10,658' 10,713 12,850' 12,773' 73 Other 1,157 1,903 2,890 2,556 2,893' 3,113' 2,732 2,989' 3,403 3,323' 3,762' 4,347' 4,318' 24 Net worth 3,108 4,286 5,577 5,891 5,975 6,098 6,351' 6,860 7,118 7,348' 7,598' 7,983' 9,199' MEMO 25 Mortgage loan commitments outstanding3 2,151 3,234 5,515 5,832 5,653 5,636 5,355 6,707 7,718 8,330' 8,287 8,781' 9,21C Savings banks 26 Assets 193,535 203,898 215,298 215,560 215,893 216,793 216,776 216,673 218,119 221,256 222,542 226,495 Loans 77 Mortgage 97,356 102,895 107,322 108,842 109,171 109,494 110,371 108,973 109,702 110,271 11,813 112,417 78 Other 19,129 24,954 30,195 29,672 29,967 31,217 30,876 31,752 32,501 34,873 34,591 35,500 Securities 79 U.S. government 15,360 14,643 13,868 13,686 13,734 13,434 13,111 12,568 12,474 12,313 12,013 13,210 30 Mortgage-backed securities ... 18,205 19,215 20,101 20,368 20,012 19,828 19,481 21,372 21,525 21,593 21,885 22,546 31 State and local government... 2,177 2,077 2,105 2,107 2,163 2,148 2,323 2,298 2,297 2,306 2,372 2,343 37 Corporate and other 25,375 23,747 23,735 23,534 23,039 22,816 21,199 20,828 20,707 20,403 20,439 20,260 33 Cash 6,263 4,954 4,821 4,916 4,893 4,771 6,225 5,645 5,646 5,845 5,570 6,225 34 Other assets 9,670 11,413 13,151 12,345 12,914 13,085 13,113 13,237 13,267 13,652 13,859 13,994 35 Liabilities 193,535 203,898 215,298 215,560 215,893 216,793 216,776 216,673 218,119 221,256 222,542 226,495 n a. 36 Deposits 172,665 180,616 187,207 187,722 187,239 187,552 185,972 186,321 186,777 188,960 189,025 190,310 37 Regular4 170,135 177,418 183,222 183,560 183,296 183,716 181,921 182,399 182,890 184,704 184,580 185,716 38 Ordinary savings 38,554 33,739 33,398 33,252 33,303 33,638 33,018 32,365 32,693 33,021 33,057 33,577 39 Time 95,129 104,732 104,448 104,668 104,024 104,116 103,311 104,436 104,588 105,562 105,550 105,146 40 Other 2,530 3,198 3,985 4,162 3,943 3,836 4,051 3,922 3,887 4,256 4,445 4,594 41 Other liabilities 10,154 12,504 15,971 15,546 15,9% 16,309 17,414 17,086 17,793 18,412 19,074 21,384 42 General reserve accounts 10,368 10,510 11,704 11,882 12,299 12,567 12,823 12,925 13,211 13,548 14,114 14,519 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37 Continued 1985 1986 AAccccoouunntt 11998833 11998844 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Credit unions5 43 Total assets/liabilities and capital . 81,961 93,036 111,150 113,016 114,783 117,029 118,010 118,933 122,623 126,653 128,229 132,415 134,703 44 Federal 54,482 63,205 74,869 75,567 76,415 77,829 77,861 78,619 80,024 82,275 83,543 86,289 87,579 45 State 27,479 29,831 36,281 37,449 38,368 39,200 40,149 40,314 42,599 44,378 44,686 46,126 47,124 46 Loans outstanding 50,083 62,561 69,171 70,765 71,811 72,404 73,513 73,513 74,207 75,300 76,385 76,774 77,847 47 Federal 32,930 42,337 46,036 46,702 47,065 47,538 47,933 48,055 48,059 48,633 49,756 49,950 50,613 48 State 17,153 20,224 23,135 24,063 24,746 24,866 25,580 25,458 26,148 26,667 26,629 26,824 27,234 49 Savings 74,739 84,348 99,834 101,318 103,677 105,384 105,963 107,238 110,541 114,579 116,703 120,331 122,952 50 Federal 49,889 57,539 68,087 68,592 70,063 71,117 70,926 72,166 73,227 75,698 77,112 79,479 80,975 51 State 24,850 26,809 31,747 32,726 33,614 34,267 35,037 35,072 37,314 38,881 39,591 40,852 41,977 Life insurance companies 52 Assets 654,948 722,979 778,293 783,828 791,483 802,024 816,203 824,850 834,492 843,994 Securities 53 Government 50,752 63,899 69,975 71,095 72,334 73,451 77,230 77,966 78,733 79,574 54 United States6 28,636 42,204 47,343 48,181 49,300 50,321 53,559 53,979 55,019 55,700 55 State and local 9,986 8,713 9,201 9,293 9,475 9,615 10,086 10,373 10,027 10,083 56 Foreign7 12,130 12,982 13,431 13,621 13,559 13,515 13,585 13,614 13,687 13,791 57 Business 322,854 359,333 397,202 399,474 403,832 410,141 414,424 420,835 429,090 434,747 n.a. n.a. n.a. 58 Bonds 257,986 295,998 325,647 329,133 331,675 335,129 337,205 343,003 347,122 349,314 59 Stocks 64,868 63,335 71,555 70,341 72,157 75,012 77,219 77,832 81,968 85,433 60 Mortgages 150,999 156,699 163,027 163,929 165,687 167,306 170,460 171,275 171,705 173,418 61 Real estate 22,234 25,767 28,450 28,476 28,637 28,844 28,662 28,709 29,069 29,470 6? Policy loans 54,063 54,505 54,238 54,225 54,142 54,121 54,200 54,187 54,164 54,158 63 Other assets 54,046 63,776 65,401 66,629 57,313 68,161 71,227 56,886 56,237 57,388 1. Holdings of stock of the Federal Home Loan Banks are in "other assets." FSLIC-insured federal savings banks: Estimates by the FHLBB for federal 2. Includes net undistributed income accrued by most associations. savings banks insured by the FSLIC and based on monthly reports of federally 3. As of July 1985, data include loans in process. insured institutions. 4. Excludes checking, club, and school accounts. Savings banks: Estimates by the National Council of Savings Institutions for all 5. Data include all federally insured credit unions, both federal and state savings banks in the United States and for FDIC-insured savings banks that have chartered, serving natural persons. converted to federal savings banks. 6. Direct and guaranteed obligations. Excludes federal agency issues not Credit unions: Estimates by the National Credit Union Administration for guaranteed, which are shown in the table under "Business" securities. federally chartered and federally insured state-chartered credit unions serving 7. Issues of foreign governments and their subdivisions and bonds of the natural persons. International Bank for Reconstruction and Development. Life insurance companies: Estimates of the American Council of Life Insurance NOTE. Savings and loan associations: Estimates by the FHLBB for all for all life insurance companies in the United States. Annual figures are annualassociations in the United States based on annual benchmarks for non-FSLIC- statement asset values, with bonds carried on an amortized basis and stocks at insured associations and the experience of FSLIC-insured associations. year-end market value. Adjustments for interest due and accrued and for differences between market and book values are not made on each item separately but are included, in total, in "other assets." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • October 1986 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1986 111999888333 111999888444 111999888555 Feb. Mar. Apr. May June July U.S. budget1 1 Receipts, total 600,562 666,457 733,996 53,370 49,557 91,438 46,246 77,024 62,974 2 On-budget n.a. n.a. n.a. 38,417 32,203 69,130 30,004 58,400 47,571 3 Off-budget n.a. n.a. n.a. 14,953 17,355 22,308 16,242 18,624 15,402 4 Outlays, total 808,273 851,7% 945,927 77,950 79,700 81,510 85,642 78,034 85,203 5 On-budget n.a. n.a. n.a. 61,963 63,660 67,276 69,611 60,982 69,604 6 Off-budget n.a. n.a. n.a. 15,987 16,040 14,234 16,031 17,052 15,599 7 Surplus, or deficit (-), total -207,711 -185,339 -211,931 -24,580 -30,142 9,928 -39,396 -1,011 -22,229 8 On-budget n.a. n.a. n.a. -23,546 -31,457 1,854 -39,607 -2,583 -22,033 9 Off-budget n.a. n.a. n.a. -1,034 1,315 8,074 211 1,572 -1% Source of financing (total) 10 Borrowing from the public 212,424 170,817 197,269 16,010 8,441 14,213 17,960 1188,,550000 1144,,998800 11 Cash and monetary assets (decrease, or increase (-))2 -9,889 5,636 10,673 12,969 14,093 -22,542 22,774 -13,065 3,972 12 Other3 5,176 8,885 3,989 -4,400 7,608 -1,599 -1,338 -4,424 3,277 MEMO 13 Treasury operating balance (level, end of period) 37,057 22,345 17,060 26,326 12,246 34,417 12,808 24,641 20,810 14 Federal Reserve Banks 16,557 3,791 4,174 5,026 3,280 11,550 3,083 3,143 3,983 15 Tax and loan accounts 20,500 18,553 12,886 21,300 8,966 22,867 9,725 21,498 16,827 1. In accordance with the Balanced Budget and Emergency Deficit Control Act 3. Includes accrued interest payable to the public; allocations of special of 1985, all former off-budget entries are now presented on-budget. The Federal drawing rights; deposit funds; miscellaneous liability (including checks outstand- Financing Bank (FFB) activities are now shown as separate accounts under the ing) and asset accounts; seigniorage; increment on gold; net gain/loss for U.S. agencies that use the FFB to finance their programs. The act has also moved two currency valuation adjustment; net gain/loss for IMF valuation adjustment; and social security trust funds (Federal old-age survivors insurance and Federal profit on the sale of gold. disability insurance trust funds) off-budget. 2. Includes U.S. Treasury operating cash accounts; SDRs; reserve position on SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. the U.S. quota in the IMF; loans to International Monetary Fund; and other cash Government," and the "Daily Treasury Statement." and monetary assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1984 1985 1986 1986 111999888444 111999888555 H2 HI H2 HI May June July RECEIPTS 1 All sources 666,457 733,996 341,392 380,618 364,790 394,345 46,246 77,024 62,974 ? Individual income taxes, net 295,960 330,918 157,229 166,783 169,987 169,444 9,820 36,412 31,438 3 Withheld 279,350 298,941 145,210 149,288 155,725 153,919 28,564 24,868 30,329 4 Presidential Election Campaign Fund ... 35 35 5 29 6 31 7 4 2 5 Nonwithheld 81,346 97,685 19,403 76,155 22,295 78,981 3,796 13,411 2,838 6 Refunds 64,770 65,743 7,387 58,684 8,038 63,488 22,546 1,871 1,732 Corporation income taxes 7 Gross receipts 74,179 77,413 35,190 42,193 36,528 41,946 2,813 11,698 4,483 8 Refunds 17,286 16,082 6,847 8,370 7,751 9,557 1,365 1,031 1,109 9 Social insurance taxes and contributions, net 241,902 268,805 118,690 144,598 128,017 156,714 28,745 24,399 21,564 10 Employment taxes and contributions' 212,180 238,288 105,624 126,038 116,276 139,706 2200,,884444 23,672 1199,,667755 11 Self-employment taxes and contributions2 8,709 10,468 1,086 9,482 985 10,581 643 11,,440077 --226644 12 Unemployment insurance 25,138 25,758 10,706 16,213 9,281 14,674 7,461 346 1,464 13 Other net receipts3 4,580 4,759 2,360 2,350 2,458 2,333 440 381 424 14 Excise taxes 37,361 35,865 18,961 17,259 18,470 15,944 2,669 2,800 2,755 15 Customs deposits 11,370 12,079 6,329 5,807 6,354 6,369 1,040 1,161 1,305 16 Estate and gift taxes 6,010 6,422 3,029 3,204 3,323 3,487 686 514 612 17 Miscellaneous receipts4 16,965 18,576 8,812 9,144 9,861 10,002 1,838 1,071 1,926 OUTLAYS 18 All types 851,781 946,323 446,944 463,842 487,188 486,037' 85,642 78,034 85,203 19 National defense 227,413 252,748 118,286 124,186 134,675 135,367 23,765 22,462 23,647 20 International affairs 15,876 16,176 8,550 6,675 8,367 5,384 1,654 785 889 21 General science, space, and technology ... 8,317 8,627 4,473 4,230 4,727 4,191 737 615 679 V Energy 7,086 5,685 1,423 680 3,305 2,484' 357 732 393 73 Natural resources and environment 12,593 13,357 7,370 5,892 7,553 6,245 1,007 1,216 1,346 24 Agriculture 13,613 25,565 8,524 11,705 15,412 14,482 3,008 1,405 2,029 2.5 Commerce and housing credit 6,917 4,229 2,663 -260 644 860 43 893 1.127 76 Transportation 23,669 25,838 13,673 11,440 15,360 12,658 2,201 2,475 2,551 27 Community and regional development .... 7,673 7,680 4,836 3,408 3,901 3,169 599 651 635 28 Education, training, employment, social services 27,579 29,342 13,737 14,149 14,481 14,712 2,287 22,,221155 22,,339999 79 Health 30,417 33,542 15,692 16,945 17,237 17,872 3,021 3,202 3,125 30 Social security and medicare 235,764 254,446 119,613 128,351 129,037 135,214 22,253 24,678 23,471 31 Income security 112,668 128,200 61,558 65,246 59,457 60,786 10,960 6,843 10,192 3? Veterans benefits and services 25,614 26,352 13,317 11,956 14,527 12,193 3,455 914 2,366 33 Administration of justice 5,660 6,277 2,992 3,016 3,212 3,352 533 549 603 34 General government 5,053 5,228 2,552 2,857 3,634 3,566 576 1,185 188 35 General-purpose fiscal assistance 6,768 6,353 3,458 2,659 3,391 2,179 -142 40 1,071 16 111,058 129,436 61,293 65,143 67,448 68,054 11,766 9,939 11,174 37 Undistributed offsetting receipts6 -31,957 -32,759 -17,061 -14,436 -17,953 -17,193 -2,437 -2,765 -2,683 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 Financial Statistics • October 1986 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1984 1985 1986 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 1,468.3 1,517.2 1,576.7 1,667.4 1,715.1 1,779.0 1,827.5 1,950.3 1,991.1 2 Public debt securities 1,463.7 1,512.7 1,572.3 1,663.0 1,710.7 1,774.6 1,823.1 1,945.9 1,986.8 3 Held by public 1,223.9 1,255.1 1,309.2 1,373.4 1,415.2 1,460.5 1,506.6 1,597.1 1,634.3 4 Held by agencies 239.8 257.6 263.1 289.6 295.5 314.2 316.5 348.9 352.6 5 Agency securities 4.6 4.5 4.5 4.5 4.4 4.4 4.4 4.4 4.3 6 Held by public 3.5 3.4 3.4 3.4 3.3 3.3 3.3 3.3 3.2 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 1,464.5 1,513.4 1,573.0 1,663.7 1,711.4 1,775.3 1,823.8 1,932.4 1,973.3 9 Public debt securities 1,463.1 1,512.1 1,571.7 1,662.4 1,710.1 1,774.0 1,822.5 1,931.1 1,972.0 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 1,520.0 1,573.0 1,823.8 1,823.8 1,823.8 1,823.8 2,078.7 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 1986 TTyyppee aanndd hhoollddeerr 11998811 11998822 11998833 11998844 Q2 Q3 Q4 Q1 1 Total gross public debt 1,028.7 1,197.1 1,410.7 1,663.0 1,774.6 1,823.1 1,945.9 1,986.8 By type 2 Interest-bearing debt 1,027.3 1,195.5 1,400.9 1,660.6 1,759.8 1,821.0 1,943.4 1,984.2 3 Marketable 720.3 881.5 1,050.9 1,247.4 1,310.7 1,360.2 1,437.7 1,472.8 4 Bills 245.0 311.8 343.8 374.4 381.9 384.2 399.9 393.2 5 Notes 375.3 465.0 573.4 705.1 740.9 776.4 812.5 842.5 6 Bonds 99.9 104.6 133.7 167.9 187.9 199.5 211.1 223.0 7 Nonmarketable1 307.0 314.0 350.0 413.2 449.1 460.8 505.7 511.4 8 State and local government series 23.0 25.7 36.7 44.4 53.9 62.8 87.5 88.5 9 Foreign issues2 19.0 14.7 10.4 9.1 8.3 6.6 7.5 6.7 10 Government 14.9 13.0 10.4 9.1 8.3 6.6 7.5 6.7 11 Public 4.1 1.7 .0 .0 .0 .0 .0 .0 1? Savings bonds and notes 68.1 68.0 70.7 73.1 75.4 77.0 78.1 79.8 13 Government account series3 196.7 205.4 231.9 286.2 311.0 313.9 332.2 336.0 14 Non-interest-bearing debt 1.4 1.6 9.8 2.3 14.8 2.1 2.5 2.6 By holder4 15 U.S. government agencies and trust funds 203.3 209.4 236.3 289.6 314.2 316.5 348.9 352.6 16 Federal Reserve Banks 131.0 139.3 151.9 160.9 169.1 169.7 181.3 184.8 17 Private investors 694.5 848.4 1,022.6 1,212.5 1,292.0 1,338.2 1,417.2 1,458.9 18 Commercial banks 111.4 131.4 188.8 183.4 196.3 196.9 192.2 195.1 19 Money market funds 21.5 42.6 22.8 25.9 24.8 22.7 25.1 29.8 20 Insurance companies 29.0 39.1 56.7 76.4 85.0 88.6 93.2 95.8 21 Other companies 17.9 24.5 39.7 50.1 54.9 59.0 59.0 59.6 22 State and local governments 104.3 127.8 155.1 179.4 198.9 n.a. n.a. n.a. Individuals 73 Savings bonds 68.1 68.3 71.5 74.5 76.7 78.2 79.8 81.4 74 Other securities 42.7 48.2 61.9 69.3 72.0 73.2 75.0 75.7 25 Foreign and international5 136.6 149.5 166.3 192.9 200.7 209.8 214.6 220.2 26 Other miscellaneous investors6 163.0 217.0 259.8 360.6 386.9 n.a. n.a. n.a. 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Consists of investments of foreign and international accounts. Excludes nontion Administration; depository bonds, retirement plan bonds, and individual interest-bearing notes issued to the International Monetary Fund. retirement bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable dollar-denominated and foreign currency-denominated se- mutual savings banks, corporate pension trust funds, dealers and brokers, certain ries held by foreigners. U.S. government deposit accounts, and U.S. government-sponsored agencies. 3. Held almost entirely by U.S. government agencies and trust funds. SOURCES. Data by type of security, U.S. Treasury Department, Monthly 4. Data for Federal Reserve Banks and U.S. government agencies and trust Statement of the Public Debt of the United States; data by holder. Treasury funds are actual holdings; data for other groups are Treasury estimates. Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Par value; averages of daily figures, in millions of dollars 1986 1986 week ending Wednesday IItteemm 11998833 11998844 11998855 May June' July June 25r July 2 July 9 July 16 July 23 July 30 Immediate delivery2 1 U.S. government securities 42,135 52,778 75,331 91,778 90,198 84,902 86,257 83,451 79,862 92,763 75,012 79,800 By maturity 2 Bills 22,393 26,035 32,900 33,516 32,498 31,129 25,600 28,647 30,073 32,830 28,978 2288,,777766 3 Other within 1 year 708 1,305 1,811 2,051 2,266 2,182 2,717 3,199 1,878 1,996 2,028 2,042 4 1-5 years 8,758 11,733 18,361 23,324 23,250 22,883 26,677 21,390 20,033 23,539 20,442 23,028 5 5-10 years 5,279 7,606 12,703 17,041 21,025 19,253 20,208 20,352 18,404 24,171 16,222 15,606 6 Over 10 years 4,997 6,099 9,556 15,846 11,159 9,455 11,056 9,863 9,474 10,228 7,343 10,348 By type of customer 7 U.S. government securities dealers 2,257 2,919 3,336 3,627 3,732 3,615 3,466 4,131 3,276 3,912 3,021 3,223 8 U.S. government securities brokers 21,045 25,580 36,222 47,977 47,435 44,595 44,833 40,631 42,142 48,377 40,648 43,661 9 All others3 18,833 24,278 35,773 40,175 39,031 36,693 37,958 38,689 34,444 40,475 31,344 32,916 10 Federal agency securities 5,576 7,846 11,640 14,350 16,434 15,804 18,833 15,293 14,771 21,994 14,034 12,026 11 Certificates of deposit 4,333 4,947 4,016 4,073 4,748 4,718 4,723 5,444 4,301 6,194 4,286 3,938 12 Bankers acceptances 2,642 3,243 3,242 2,960 3,284 3,473 3,364 3,752 3,024 4,380 3,310 2,770 13 Commercial paper 8,036 10,018 12,717 15,269 17,093 16,934 16,416 19,229 16,740 17,909 16,197 15,855 Futures transactions4 14 Treasury bills 6,655 6,947 5,561 4,308 2,908 2,196 1,841 1,127 1,954 2,496 1,962 2,368 15 Treasury coupons 2,501 4,503 6,069 7,776 7,202 5,257 5,949 5,139 4,436 5,611 5,295 5,762 16 Federal agency securities 265 262 240 44 17 13 4 6 14 35 0 5 Forward transactions5 17 U.S. government securities 1,493 1,364 1,283 1,500 1,705 1,377 2,350 1,375 1,140 1,053 1,579 1,350 18 Federal agency securities 1,646 2,843 3,857 6,185 6,740 7,622 4,954 5,611 7,319 10,099 7,313 6,831 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 • October 1986 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1986 1986 week ending Wednesday IItteemm 11998833 11998844 11998855 May June July July 2 July 9 July 16 July 23 July 30 Positions Net immediate2 1 U.S. government securities 14,082 5,429 7,391 9,589' 11,972' 21,101 18,950 21,872 24,310 22,703 17,651 2 Bills 10,800 5,500 10,075 9,469' 10,491' 15,674 12,017 15,577 17,556 17,105 13,804 3 Other within 1 year 921 63 1,050 6,280 6,167 4,718 5,526 5,256 4,909 4,808 4 1-5 years 1,912 2,159 5,154 6,236' 6,944' 10,949 11,157 11,084 10,874 10,384 11,478 5 5-10 years -78 -1,119 -6,202 -9,331' -9,317 -8,481 -8,073 -8,354 -8,017 -8,496 -8,826 6 Over 10 years 528 -1,174 -2,686 -3,065' -2,314 -1,758 -1,677 -1,691 -1,011 -1,098 -2,925 7 Federal agency securities 7,313 15,294 22,860 38,130 35,014 31,295 32,050 31,729 32,082 32,760 29,237 8 Certificates of deposit 5,838 7,369 9,192 10,973 11,530 10,918 12,376 11,447 11,616 10,722 9,866 9 Bankers acceptances 3,332 3,874 4,586 5,464' 5,466 6,734 6,930 7,685 7,594 6,071 5,809 10 Commercial paper 3,159 3,788 5,570 7,379 7,989 8,027 8,739 9,730 8,322 6,638 7,261 Futures positions 11 Treasury bills -4,125 -4,525 -7,322 -19,205 -14,058' -16,381 -16,066 -16,681 -16,801 -17,567 -14,734 12 Treasury coupons -1,033 1,794 4,465 2,642' 2,324' 2,526 1,302 1,918 1,349 2,558 4,271 13 Federal agency securities 171 233 -722 -70 -95 -67 -72 -63 -62 -68 -70 Forward positions 14 U.S. government securities -1,936 -1,643 -911 -1,985 -2,633 -3,046 -1,960 -2,540 -2,887 -3,390 -3,370 15 Federal agency securities -3,561 -9,205 -9,420 -11,496' -10,490 -11,383 -9,685 -10,749 -11,943 -12,727 -10,867 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 29,099 44,078 68,035 94,145 92,366 97,709 91,231 94,458 105,404 95,702 97,903 17 Term agreements 52,493 68,357 80.509 112,611 108,761 102,897 101,645 97,560 101,092 106,527 105,635 Repurchase agreements5 18 Overnight and continuing 57,946 75,717 101,410 140,171 137,536 144,251 133,149 145,721 155,182 141,163 140,374 19 Term agreements 44,410 57,047 77,748 107,095 102,427 99,140 103,933 92,804 95,668 104,044 101,012 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 A3 3 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1986 AAggeennccyy 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June 1 Federal and federally sponsored agencies 240,068 271,220 293,905 290,596 292,043 291,525 293,336 294,961 n.a. 2 Federal agencies 33,940 35,145 36,390 36,400 36,376 35,927 35,530 36,110 35,826 3 Defense Department1 243 142 71 66 63 59 55 52 48 4 Export-Import Bank2-3 14,853 15,882 15,678 15,677 15,677 15,257 15,257 15,256 14,953 5 Federal Housing Administration4 194 133 115 113 109 108 114 118 115 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 1,404 1,337 1,940 1,940 1,940 1,940 1,940 1,940 1,854 8 Tennessee Valley Authority 14,970 15,435 16,347 16,365 16,348 16,324 15,925 16,505 16,617 9 United States Railway Association6 111 51 74 74 74 74 74 74 74 10 Federally sponsored agencies7 206,128 236,075 257,515 254,572r 255,667 255,67(K 257,806 258,851 n.a. 11 Federal Home Loan Banks 48,930 65,085 74,447 73,201 73,201 74,778 76,527 78,718 81,558 12 Federal Home Loan Mortgage Corporation 6,793 10,270 11,926 13,044 13,695 12,963 13,492 12,475 n.a. 13 Federal National Mortgage Association 74,594 83,720 93,896 92,658 93,179 92,414 92,401 92,629 92,562 14 Farm Credit Banks 72,816 71,193 68,851 66,976' 66,188 66,002' 65,188 64,629 63,585 15 Student Loan Marketing Association8 3,402 5,745 8,395 8,693 9,404 9,513 10,198 10,400 10,419 MEMO 16 Federal Financing Bank debt 135,791 145,217 153,373 153,709 153,418 153,455 153,508 155,076 155,222 Lending to federal and federally sponsored 17 Export-Import Bank3 14,789 15,852 15,670 15,670 15,670 15,250 15,250 15,250 14,947 18 Postal Service6 1,154 1,087 1,690 1,690 1,690 1,690 1,690 1,690 1,604 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 13,245 13,710 14,622 14,690 14,673 14,649 14,250 14,830 14,942 21 United States Railway Association6 111 51 74 74 74 74 74 74 74 Other Lending10 22 Farmers Home Administration 55,266 58,971 64,234 64,354 63,774 63,464 63,829 64,544 64,924 23 Rural Electrification Administration 19,766 20,693 20,654 20,678 20,739 20,959 21,061 21,154 21,255 24 Other 26,460 29,853 31,429 31,553 31,798 32,369 32,354 32,534 32,476 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 DomesticN onfinancial Statistics • October 1986 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1985 1986 Type of issue or issuer, or use 11998833 11998844 11998855 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues, new and refunding1 86,421 106,641 214,189 32,144 57,430 1,572 3,255 7,636 11,914 13,262 11,743 Type of issue 2 General obligation 21,566 26,485 52,622 6,695 8,754 751 1,021 2,895 4,815 8,468 6,234 3 U.S. government loans2 96 16 14 0 0 0 0 n.a. 0 n.a. n.a. 4 Revenue 64,855 80,156 161,567 25,449 48,676 821 2,234 4,741 7,099 4,794 5,509 5 U.S. government loans2 253 17 27 7 0 0 0 n.a. n.a. n.a. n.a. Type of issuer 6 State 7,140 9,129 13,004 1,648 2,146 296 255 n.a. n.a. n.a. n.a. 7 Special district and statutory authority 51,297 63,550 134,363 21,563 39,147 579 1,715 n.a. n.a. n.a. n.a. 8 Municipalities, counties, townships, school districts 27,984 33,962 66,822 21,563 16,137 697 1,285 n.a. n.a. n.a. n.a. 9 Issues for new capital, total 72,441 94,050 156,050 21,362 46,788 1,350 1,887 2,763 6,405 6,856 8,205 Use of proceeds t t t 1 10 Education 8,099 7,553 16,658 1,954 3,901 370 422 11 Transportation 4,387 7,552 12,070 3,734 3,480 246 347 1 1 2 3 S U o t c il i i a t l i es w e a l n f d a re c onservation 2 1 6 3 , , 9 5 1 8 0 8 2 1 9 7 , , 9 8 2 4 8 4 2 6 6 3 , , 8 1 5 8 2 1 8 3 , , 6 2 7 6 2 6 22 7 , , 5 0 8 7 9 0 31 6 5 2 1 1 1 2 0 nI.a. nJ.a. nJ.a. nJ.a. 14 Industrial aid 7,821 15,415 12,892 2,029 3,583 0 190 15 Other purposes 11,637 15,758 24,398 1,707 6,165 413 606 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 issue or issuer, or use 11998833 11998844 11998855 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues' 120,299 132,531 201,599'' 13,568r 19,527' 17,093' 23,931' 30,494' 33,489' 19,808 25,841 2 Bonds2 68,718 109,903 166,082' 10,913 14,538' 13,693' 19,469' 24,973' 27,883' 13,294 20,804 Type of offering 3 Public 47,594 73,579 119,887r 10,913 14,538' 13,693' 19,469' 24,973' 27,883' 13,294 20,804 4 Private placement 21,126 36,326 46,195 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 5 Manufacturing 17,001 24,607 52,278 4,072 2,704 4,5% 3,950 8,895 7,975 3,939 5,252 6 Commercial and miscellaneous 7,540 13,726 15,215 933 735 624 1,216 790 2,640 1,776 2,175 7 Transportation 3,833 4,694 5,743 125 187 633 373 303 614 427 250 8 Public utility 9,125 10,679 12,957 1,114 1,090 820 2,540 2,133 3,330 1,709 1,945 9 Communication 3,642 2,997 10,456 100 2,318 0 1,200 1,907 3,115 712 810 10 Real estate and financial 27,577 53,199 69,435r 4,569 7,505' 7,021' 10,190' 10,945' 10,210' 4,731 10,372 11 Stocks3 51,579 22,628 35,515 2,655 4,989 3,400 4,462 5,521 5,606 6,514 5,037 Type 12 Preferred 7,213 4,118 6,505 782 908 570 975 1,160 751 856 1,282 13 Common 44,366 18,510 29,010 1,873 4,081 2,830 3,487 4,361 4,855 5,658 3,755 Industry group 14 Manufacturing 14,135 4,054 5,700 746 1,045 827 1,269 851 1,434 1,827 1,130 15 Commercial and miscellaneous 13,112 6,277 9,149 596 1,220 683 434 607 910 953 372 16 Transportation 2,729 589 1,544 21 200 78 302 355 158 372 154 17 Public utility 5,001 1,624 1,966 12 201 176 153 357 165 346 406 18 Communication 1,822 419 978 5 146 231 282 0 27 74 140 19 Real estate and financial 14,780 9,665 16,178 1,275 2,177 1,405 2,022 3,351 2,912 2,942 2,835 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, SOURCES. IDD Information Services, Inc., Securities and Exchange Commisemployee stock plans, investment companies other than closed-end, intracorpo- sion and the Board of Governors of 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 Nov. Dec. Jan. Feb. Mar. Apr. May' June INVESTMENT COMPANIES1 1 Sales of own shares2 107,480 222,670 20,585 23,560 32,466 27,489 33,764 37,656 31,251 30,506 2 Redemptions of own shares3 77,032 132,440 11,138 18,337 15,836 11,860 15,085 21,699 16,706 18,922 3 Net sales 30,448 90,230 9,447 5,223 16,630 15,629 18,679 15,957 14,545 11,584 4 Assets4 137,126 251,695 237,410 251,536 265,487 292,002 315,245 329,684 343,926 356,014 5 Cash position5 12,181 20,607 21,894 20,590 22,425 23,716 27,639 29,599 28,184 28,066 6 Other 124,945 231,088 215,516 230,946 243,062 268,286 287,606 300,085 315,742 327,948 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 1986 AAccccoouunntt 11998833 11998844 11998855 Q3 Q4 QL Q2 Q3 Q4 QL Q2 1 Corporate profits with inventory valuation and capital consumption adjustment 213.7 264.7 280.6 259.8 265.0 266.4 274.3 296.3 285.6 296.4 291.2 2 Profits before tax 207.6 235.7 223.1 225.1 221.9 213.8 213.8 229.2 235.8 224.3 231.9 3 Profits tax liability 77.2 95.4 91.8 89.3 87.8 87.8 87.1 95.8 96.4 89.1 91.2 4 Profits after tax 130.4 140.3 131.4 135.8 134.1 126.0 126.7 133.4 139.4 135.2 140.8 5 Dividends 71.5 78.3 81.6 79.0 80.1 80.9 81.4 81.6 82.5 85.2 87.5 6 Undistributed profits 58.8 62.0 49.8 56.8 54.0 45.1 45.3 51.8 57.0 50.0 53.2 7 Inventory valuation -10.9 -5.5 -.6 -1.8 -1.6 -.5 1.6 6.1 -9.4 16.5 7.9 8 Capital consumption adjustment 17.0 34.5 58.1 36.5 44.7 53.2 58.9 61.0 59.2 55.6 51.4 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 • October 1986 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities Billions of dollars, except for ratio 1985' 1986 AAccccoouunntt 11998800 11998811 11998822 11998833 11998844 Ql Q2 Q3 Q4 Ql 1 Current assets 1,328.3 1,419.6 1,437.1 1,575.9 1,703.0 1,722.7 1,734.6 1,763.0 1,784.6 1,795.7 ? Cash 127.0 135.6 147.8 171.8 173.6 167.5 167.1 176.3 189.2 195.3 3 U.S. government securities 18.7 17.7 23.0 31.0 36.2 35.7 35.4 32.6 33.0 31.0 4 Notes and accounts receivable 507.5 532.5 517.4 583.0 633.1 650.3 654.1 661.0 671.5 663.4 5 Inventories 543.0 584.0 579.0 603.4 656.9 665.7 666.7 675.0 666.0 679.6 6 Other 132.1 149.7 169.8 186.7 203.2 203.5 211.2 218.0 224.9 226.3 7 Current liabilities 890.6 971.3 986.0 1,059.6 1,163.6 1,174.1 1,182.9 1,211.9 1,233.6 1,222.3 8 Notes and accounts payable 514.4 547.1 550.7 595.7 647.8 636.9 651.7 670.4 682.7 668.4 9 Other 376.2 424.1 435.3 463.9 515.8 537.1 531.2 541.5 550.9 553.9 10 Net working capital 437.8 448.3 451.1 516.3 539.5 548.6 551.7 551.1 551.0 573.4 11 MEMO: Current ratio1 1.492 1.462 1.458 1.487 1.464 1.467 1.466 1.455 1.447 1.469 1. Ratio of total current assets to total current liabilities. Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. NOTE. For a description of this series, see "Working Capital of Nonfinancial 20551. Corporations" in the July 1978 BULLETIN, pp. 533-37. SOURCE. Federal Trade Commission and Bureau of the Census. All data in this table reflect the most current benchmarks. Complete data are available upon request from the Flow of Funds Section, Division of Research and 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1984 1985 1986 IInndduussttrryy 11998844 11998855 11998866'' Q4 Ql Q2 Q3 Q4 Ql Q21 Q3I 1 Total nonfarm business 354.44 386.41 387.25 368.29 371.16 387.83 388.90 397.74 376.08 387.42 388.87 Manufacturing 2 Durable goods industries 66.24 73.14 72.09 71.43 69.87 73.% 72.85 75.87 67.74 72.20 71.42 3 Nondurable goods industries 72.58 80.01 77.09 75.53 75.78 80.36 81.19 82.70 75.32 75.80 77.04 Nonmanufacturing 4 Mining 16.86 15.88 12.35 17.00 15.66 16.51 15.94 15.40 12.85 12.61 12.49 Transportation 5 Railroad 6.79 7.06 6.44 6.44 6.02 7.48 8.13 6.61 5.82 6.95 7.31 6 Air 3.56 4.78 5.74 3.65 4.20 3.66 5.20 6.06 6.54 5.11 5.78 7 Other 6.17 6.13 5.98 6.18 6.01 6.37 5.77 6.39 5.40 5.94 6.12 Public utilities 8 Electric 37.03 36.12 33.65 35.40 36.65 36.04 35.34 36.45 34.33 34.49 32.59 9 Gas and other 10.44 12.62 12.75 11.52 11.81 12.43 12.80 13.44 12.82 13.10 12.39 10 Commercial and other2 134.75 150.67 161.16 141.13 145.16 151.02 151.69 154.81 155.27 161.22 163.73 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 1985 1986 AAccccoouunntt 11998811 11998822 11998833 11998844 Q1 Q2 Q3 Q4 Q1 Q2 ASSETS Accounts receivable, gross 1 Consumer 72.4 78.1 87.4 96.7 99.1 106.0 116.4 120.8 125.5 134.7 2. Business 100.3 101.4 113.4 135.2 142.1 144.6 141.4 152.8 159.7 160.3 Real estate 17.9 20.2 22.5 26.3 27.2 28.4 29.0 30.4 31.5 32.4 4 Total 190.5 199.7 223.4 258.3 268.5 279.0 286.5 304.0 316.7 327.5 Less: Reserves for unearned income 30.0 31.9 33.0 36.5 36.6 38.6 41.0 40.9 41.3 41.8 6 Reserves for losses 3.2 3.5 4.0 4.4 4.9 4.8 4.9 5.0 5.1 5.2 7 Accounts receivable, net 157.3 164.3 186.4 217.3 227.0 235.6 240.6 258.1 270.3 280.4 8 All other 27.1 30.7 34.0 35.4 35.9 39.5 46.3 46.8 50.6 52.1 9 Total assets 184.4 195.0 220.4 252.7 262.9 275.2 286.9 304.9 321.0 332.5 LIABILITIES 10 Bank loans 16.1 18.3 18.7 21.3 19.8 18.5 18.2 21.0 20.4 22.9 11 Commercial paper 57.2 51.1 59.7 72.5 79.1 82.6 93.6 96.9 102.0 106.4 Debt 12 Other short-term 11.3 12.7 13.9 16.2 16.8 16.6 16.6 17.2 18.5 20.9 N Long-term 56.0 64.4 68.1 77.2 78.3 85.7 86.4 93.0 100.0 101.8 14 All other liabilities 18.5 21.2 30.1 33.1 35.4 36.9 36.6 39.6 41.4 40.4 15 Capital, surplus, and undivided profits 25.3 27.4 29.8 32.3 33.5 34.8 35.7 37.1 38.8 40.2 16 Total liabilities and capital 184.4 195.0 220.4 252.7 262.9 275.2 286.9 304.9 321.0 332.5 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 1986 1986 1986 JJJuuunnneee 333000,,, 111999888666''' Apr. May June Apr. May June Apr. May June 1 Total 160,294 464 -185 -151 26,378 25,780 26,687 25,915 25,966 26,838 Retail financing of installment sales 2 Automotive (commercial vehicles) 16,277 197 421 380 1,115 1,358 1,336 918 936 956 3 Business, industrial, and farm equipment 20,235 -135 68 -51 858 1,015 1,044 993 947 1,095 Wholesale financing 4 Automotive 26,338 169 -679 471 9,897 9,455 10,397 9,728 10,134 9,926 5 Equipment 4,817 70 3 45 545 467 506 475 464 462 6 All other 7,488 -73 -303 -15 1,657 1,575 1,609 1,730 1,878 1,624 Leasing 7 Automotive 16,110 284 3 -121 770 840 820 486 837 941 8 Equipment 40,342 59 -38 -101 1,275 1,256 1,264 1,216 1,294 1,365 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,286 -385 498 -882 8,784 8,572 8,441 9,168 8,074 9,323 10 All other business credit 12,401 277 -159 123 1,477 1,244 1,270 1,200 1,402 1,146 1. Not seasonally adjusted. NOTE. These data also appear in the Board's G.20 (422) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • October 1986 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1986 IItteemm 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 92.8 96.8 104.1 108.4 115.1 108.2 114.2 114.7 122.1' 112.3 2 Amount of loan (thousands of dollars) 69.5 73.7 77.4 77.6 84.3 79.6 83.9 83.0 88.C 80.7 3 Loan/price ratio (percent) 77.1 78.7 77.1 74.4 75.6 75.4 75.9 74.7 74.9' 73.8 4 Maturity (years) 26.7 27.8 26.9 25.4 26.8 26.9 25.9 25.8 26.6' 26.5 5 Fees and charges (percent of loan amount)2 2.40 2.64 2.53 2.55 2.64 2.60 2.34 2.19 2.40r 2.38 6 Contract rate (percent per annum) 12.20 11.87 11.12 10.40 10.21 10.04 9.87 9.84 9.74' 9.91 Yield (percent per annum) 7 FHLBB series3 12.66 12.37 11.58 10.89 10.68 10.50 10.27 10.22 10.15' 10.32 8 HUD series4 13.43 13.80 12.28 10.82 10.49 10.06 9.99 10.32 10.38 10.28 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.11 13.81 12.24 10.78 10.59 9.77 9.80 10.07 9.98 10.01 10 GNMA securities6 12.25 13.13 11.61 10.25 9.79 9.44 9.17 9.23 9.57 9.31 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 74,847 83,339 94,574 98,671 98,820 98,795 98,746 98,096 97,295 97,255 12 FHA/VA-insured 37,393 35,148 34,244 33,583 33,466 33,368 33,246 32,558 31,241 30,766 13 Conventional 37,454 48,191 60,331 65,088 65,354 65,427 65,500 65,538 66,054 66,489 Mortgage transactions (during period) 14 Purchases 17,554 16,721 21,510 1,188 1,159 1,410 1,631 1,978 3,000 3,343 15 3,528 978 1,301 0 n.a. n.a. n.a. n.a. n a. n a. Mortgage commitments1 16 Contracted (during period) 18,607 21,007 20,155 1,315 2,578 1,917 3,774 3,538 3,049 3,270 17 Outstanding (end of period) 5,461 6,384 3,402 3,211 4,480 4,851 6,942 8,444 7,862 7,706 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 Total 5,9% 9,283 12,399 14,412 14,584 13,623 13,144 14,302 19 FHA/VA 974 910 841 800 792 787 778 769 20 Conventional 5,022 8,373 11,558 13,612 14,584 12,836 12,366 13,533 Mortgage transactions (during period) 21 Purchases 23,089 21,886 44,012 3,709 4,605 5,318 6,195 8,947 n a. n a. 22 Sales 19,686 18,506 38,905 3,107 4,286 5,897 5,591 7,354 Mortgage commitments9 23 Contracted (during period) 32,852 32,603 48,989 5,305 6,044 7,128 9,869 10,612 24 Outstanding (end of period) 16,964 13,318 16,613 n.a. n.a. n.a. n.a. n.a. 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on Government National Mortgage Associamajor institutional lender groups; compiled by the Federal Home Loan Bank tion guaranteed, mortgage-backed, fully modified pass-through securities, assum- Board in cooperation with the Federal Deposit Insurance Corporation. ing prepayment in 12 years on pools of 30-year FHA/'VA mortgages carrying the 2. Includes all fees, commissions, discounts, and "points" paid (by the prevailing ceiling rate. Monthly figures are averages of Friday figures from the borrower or the seller) to obtain a loan. Wall Street Journal. 3. Average effective interest rates on loans closed, assuming prepayment at the 7. Includes some multifamily and nonprofit hospital loan commitments in end of 10 years. addition to 1- to 4-family loan commitments accepted in FNMA's free market 4. Average contract rates on new commitments for conventional first mort- auction system, and through the FNMA-GNMA tandem plans. gages; from Department of Housing and Urban Development. 8. Includes participation as well as whole loans. 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing 9. Includes conventional and government-underwritten loans. FHLMC's mort- Administration-insured first mortgages for immediate delivery in the private gage commitments and mortgage transactions include activity under mortgage/ secondary market. Based on transactions on first day of subsequent month. Large securities swap programs, while the corresponding data for FNMA exclude swap monthly movements in average yields may reflect market adjustments to changes activity. in maximum permissable contract rates. 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 1985 1986 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998833 11998844 11998855 Q2 Q3 Q4 Ql' Q2 1 All holders 1,813,856' 2,034,602' 2,266,818' 2,139,019' 2,201,732' 2,266,818' 2,316,667 2,379,734 ? 1- to 4-family 1,189,822' 1,318,888' 1,467,569' 1,383,101' 1,426,770' 1,467,569' 1,496,222 1,542,752 3 Multifamily 160,805' 185,414' 213,889' 197,418' 203,742' 213,889' 220,667 226,936 4 Commercial 350,389 418,300' 479.738' 447,631' 462,929' 479,738' 495,219 507,652 5 112,840' 112,000' 105,622' 110,869' 108,291' 105,622' 104,559 102,394 6 Selected financial institutions 1,130,781 1,272,206' 1,392,793' 1,325,659' 1,358,654' 1,392.793' 1,410,827 1,436,822 7 Commercial banks' 330,521 379,498' 429,207' 400,746' 415,599' 429,207' 440,985 456,168 8 1- to 4-family 182,514 196,163' 213,537' 203,003' 209,119' 213,537' 216,598 222,929 9 Multifamily 18,410 20,264' 23,403' 21,582' 22,254' 23,403' 24,445 25,637 in Commercial 120,210 152,894' 180,882' 165,554' 173,190' 180,882' 188,137 195,377 n Farm 9,387 10,177' 11,385' 10,607' 11,036' 11,385' 11,805 12,225 i? Savings banks 131,940 154,441 177,263' 165,705 174,427 177.263' 187,823 205,413 13 1- to 4-family 93,649 107,302 121,879' 114,375 119,952 121,879' 131,099 143,246 14 Multifamily 17,247 19,817 23,329' 21,357 22,604 23,329' 23,965 26,833 Commercial 21,016 27,291 31,973' 29,942 31,757 31,973' 32,673 35,229 16 Farm 28 31 82 31 114 82 86 105 17 Savings and loan associations 494,789 555,277 585,461' 569,291 575,684 585,461' 577,062 566,631 18 1- to 4-family 387,924 421,489 434,072' 425,021 427.081 434,072' 422,034 414,939 19 Multifamily 44,333 55,750 66,663' 60,231 62,608 66,663' 67,418 65,471 70 Commercial 62,403 77,605 84,118' 83,447 85,358 84,118' 86,949 85,687 21 Farm 129 433 608' 592 637 608' 661 534 V Life insurance companies 150,999 156,699 170,460 161,485 163,929 170,460 173,418 176,468 73 1- to 4-family 15,319 14,120 12,279 13,562 13,382 12,279 12,496 12,746 74 Multifamily 19,107 18,938 19,731 18,983 18,972 19,731 19,836 19,936 75 Commercial 103,831 111,175 126,621 116,812 119,543 126,621 129,441 132,241 26 Farm 12,742 12,466 11,829 12,128 12,032 11,829 11,645 11,545 27 Finance companies2 22,532 26,291 30,402 28,432 29,015 30,402 31,539 32,142 78 Federal and related agencies 148,328 158,993 166,928' 165,912 166,248 166,928' 165,730 162,940 29 Government National Mortgage Association 3,395 2,301 1,473 1,825 1,640 1,473 1,533 847 3(1 1- to 4-family 630 585 539 564 552 539 527 47 31 Multifamily 2,765 1,716 934 1,261 1,088 934 1,006 800 37 Farmers Home Administration 2,141 1,276 733 790 577 733 704 734 33 1- to 4-family 1,159 213 183 223 185 183 217 247 34 Multifamily 173 119 113 136 139 113 33 43 35 Commercial 409 497 159 163 72 159 217 237 36 Farm 400 447 278 268 181 278 237 207 37 Federal Housing and Veterans 4,894 4,816 4,920 4,888 4,918 4.920 4,964 5,092 Administration 1,893 2,048 2,254 2,199 2,251 2,254 2,309 2,447 38 1- to 4-family 3,001 2,768 2,666 2,689 2,667 2,666 2,655 2,645 39 MMuullttiiffaammiillyy 78,256 87,940 98,282 94,777 96,769 98,282 98,795 97,295 40 Federal National Mortgage Association 73,045 82,175 91,966 88,788 90,590 91,966 92,315 90,460 41 1- to 4-family 5,211 5,765 6,316 5,989 6,179 6,316 6,480 6.835 42 MMuullttiiffaammiillyy 52,010 52,261 47,498' 51,056 49,255 47,498' 46,111 44,002 43 Federal Land Banks 3,081 3,074 2,798 3,006 2,895 2,798 2,711 2,589 44 1- to 4-family 48,929 49,187 44,700' 48,050 46,360 44,700' 43,400 41,413 45 Farm 7,632 10,399 14,022 12,576 13,089 14,022 13,623 14,970 46 Federal Home Loan Mortgage Corporation 7,559 9,654 11,881 11,288 11,457 11,881 12,231 12,700 47 1- to 4-family 73 745 2,141 1,288 1,632 2,141 1,392 2,270 48 MMuullttiiffaammiillyy 285,073 332,057 415,042 365,748 388,948 415,042 440,701 473,995 49 Mortgage pools or trusts3 159,850 179,981 212,145 192,925 201,026 212,145 220,348 228,590 50 Government National Mortgage Association 155,950 175,589 207,198 188,228 196,198 207,198 215,148 223,196 51 1- to 4-family 3,900 4,392 4,947 4,697 4,828 4,947 5,200 5,394 52 MMuullttiiffaammiillyy 57,895 70,822 100,387 83,327 91,915 100,387 110,337 124,992 53 Federal Home Loan Mortgage Corporation 57,273 70,253 99,515 82,369 90,997 99,515 108,020 122,752 54 1- to 4-family 622 569 872 958 918 872 2,317 2.240 55 MMuullttiiffaammiillyy 25,121 36,215 54,987 42,755 48,769 54,987 62,310 72,377 56 Federal National Mortgage Association 25,121 35,965 54,036 41,985 47,857 54,036 61,117 71,153 57 1- to 4-family n.a. 250 951 770 912 951 1,193 1,224 58 MMuullttiiffaammiillyy 42,207 45,039 47,523 46.741 47,238 47,523 47,706 48,036 59 Farmers Home Administration 20,404 21,813 22,186 21,962 22,090 22,186 22,082 22,082 60 1- to 4-family 5,090 5,841 6,675 6,377 6,415 6,675 6,943 7,193 61 Multifamily 7,351 7,559 8,190 8,014 8,192 8,190 8,150 8,130 62 Commercial 9,362 9,826 10,472 10,388 10,541 10,472 10,531 10,631 63 Farm 249,674' 271,346' 292,055' 281,700' 287,882' 292,055' 299,409 305,977 64 Individuals and others4 141,769' 152,154' 162,844' 158,096' 163,149' 162,844' 165,779 169,077 65 1- to 4-family 40,873' 48,480' 55,148' 51,100' 52,526' 55,148' 57,784 60,415 66 Multifamily 35,169 41,279' 47,795' 43,699' 44,817' 47,795' 49,652 50,751 67 Commercial 31,863' 29,433' 26,268' 28,805' 27,390' 26,268' 26,194 25,734 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 Domestic Nonfinancial Statistics • October 1986 1.55 CONSUMER INSTALLMENT CREDIT14 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1985 1986 11998844 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May' June Amounts outstanding (end of period) 1 Total 453,580 535,098 522,978 528,621 535,098 542,753 547,852 550,939 555,810^ 562,267 567,339 By major holder 1 Commercial banks 209,158 240,796 235,364 238,620 240,796 243,256 244,761 245,172 247,498 248,681 249,673 3 Finance companies2 96,126 120,095 117,565 118,356 120,095 123,717 126,001 127,422 128,728' 131,172 134,933 4 Credit unions 66,544 75,127 73,474 74,117 75,127 75,810 76,431 76,953 77,957 78,474 78,677 5 Retailers3 37,061 39,187 38,890 39,039 39,187 39,416 39,497 39,844 39,826 40,139 40,076 6 Savings institutions 40,330 55,555 53,509 54,307 55,555 56,290 57,048 57,573 58,024 60,247 60,536 7 Gasoline companies 4,361 4,337 4,176 4,182 4,337 4,264 4,114 3,975 3,777 3,554 3,445 By major type of credit 8 Automobile 173,122 206,482 201,994 203,766 206,482 210,661 213,342 214,361 215,814' 218,965 222,695 9 Commercial banks 83,900 92,764 91,402 92,127 92,764 93,489 93,828 93,377 93,013 93,157 93,196 10 Credit unions 28,614 30,577 29,904 30,166 30,577 30,855 31,107 31,320 31,728 31,939 32,022 11 Finance companies 54,663 73,391 71,415 71,996 73,391 76,410 78,310 79,416 80,685' 83,221 86,520 12 Savings institutions 5,945 9,750 9,273 9,477 9,750 9,907 10,097 10,248 10,386 10,648 10,957 13 Revolving 98,514 118,296 115,218 117,050 118,296 119,682 120,724 122,131 123,442 124,545 124,825 14 Commercial banks 58.145 73,893 71,507 73,076 73,893 74,991 75,953 77,021 78,421 79,151 79,483 15 Retailers 33,064 34,560 34,382 34,486 34,560 34,770 34,843 35,188 35,170 35,449 35,390 16 Gasoline companies 4,361 4,337 4,176 4,182 4,337 4,264 4,114 3,975 3,777 3,554 3,445 17 Savings institutions 2,944 5,506 5,153 5,306 5,506 5,657 5,813 5,947 6,075 6,392 6,508 18 Mobile home 24,184 25,461 25,320 25,315 25,461 25,371 25,573 25,584 25,513 25,560 25,486 19 Commercial banks 9,623 9,578 9,596 9,584 9,578 9,457 9,566 9,348 9,264 9,215 9,144 20 Finance companies 9,161 9,116 9,089 9,057 9,116 9,125 9,161 9,327 9,286 9,115 9,077 21 Savings institutions 5,400 6,767 6,635 6,674 6,767 6,789 6,846 6,909 6,963 7,230 7,264 22 Other 157,760 184,859 180,446 182,490 184,859 187,039 188,212 188,863 191,041 193,197 194,334 23 Commercial banks 57,490 64,561 62,859 63,833 64,561 65,319 65,414 65,427 66,800 67,158 67,850 24 Finance companies 32,302 37,588 37,061 37,303 37,588 38,182 38,530 38,678 38,757 38,836 39,336 25 Credit unions 37,930 44,550 43,570 43,951 44,550 44,955 45,323 45,633 46,228 46,535 46,656 26 Retailers 3,997 4,627 4,508 4,553 4,627 4,646 4,653 4,656 4,656 4,690 4,686 27 Savings institutions 26,041 33,533 32,448 32,850 33,533 33,937 34,291 34,469 34,600 35,977 35,807 Net change (during period) 28 Total 77,341 81,518 6,558 5,643 6,477 7,655 5,099 3,087 4,871' 6,457 5,072 By major holder 29 Commercial banks 39,819 31,638 1,819 3,256 2,176 2,460 1,505 411 2,326 1,183 992 30 Finance companies2 9,961 23,969 2,638 791 1,739 3,622 2,284 1,421 1,306' 2,444 3,761 31 Credit unions 13,456 8,583 1,041 643 1,010 683 621 522 1,004 517 203 32 Retailers3 2,900 2,126 167 149 148 229 81 347 -18 313 -63 33 Savings institutions 11,038 15,225 853 798 1,248 735 758 525 451 2,223 289 34 Gasoline companies 167 -24 40 6 155 -73 -150 -139 -198 -223 -109 By major type of credit 35 Automobile 27,214 33,360 3,338 1,772 2,716 4,179 2,681 1,019 1,453' 3,151 3,730 36 Commercial banks 16,352 8,864 618 725 637 725 339 -451 -364 144 39 37 Credit unions 3,223 1,963 348 262 411 278 252 213 408 211 83 38 Finance companies 4,576 18,728 2,214 581 1,395 3,019 1,900 1,106 1,269' 2,536 3,299 39 Savings institutions 3,063 3,805 158 204 273 157 190 151 138 262 309 40 Revolving 20,145 19,782 1,368 1,832 1,246 1,386 1,042 1,407 1,311 1,103 280 41 Commercial banks 15,949 15,748 1,054 1,569 817 1,098 %2 1,068 1,400 730 332 42 Retailers 2,512 1,4% 118 104 74 210 73 345 -18 279 -59 43 Gasoline companies 167 -24 40 6 155 -73 -150 -139 -198 -223 -109 44 Savings institutions 1,517 2,562 156 153 200 151 156 134 128 317 116 45 Mobile home 1,990 1,277 -21 -5 146 -90 202 11 -71 47 -74 46 Commercial banks -199 -45 -66 -12 -6 -121 109 -218 -84 -49 -71 47 Finance companies 544 -45 -3 -32 59 9 36 166 -41 -171 -38 48 Savings institutions 1,645 1,367 48 39 93 22 57 63 54 267 34 49 Other 27,992 27,099 1,873 2,044 2,369 2,180 1,173 651 2,178 2,156 1,137 50 Commercial banks 7,717 7,071 213 974 728 758 95 13 1,373 358 692 51 Finance companies 4,841 5,286 427 242 285 594 348 148 79 79 500 52 Credit unions 10,233 6,620 693 381 599 405 368 310 595 307 121 53 Retailers 388 630 49 45 74 19 7 3 0 34 -4 54 Savings institutions 4,813 7,492 491 402 683 404 354 178 131 1,377 -170 1. The Board's series cover most short- and intermediate-term credit extended 2. More detail for finance companies is available in the G.20 statistical release, to individuals that is scheduled to be repaid (or has the option of repayment) in 3. Excludes 30-day charge credit held by travel and entertainment companies, two or more installments. 4. All data have been revised. 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 Dec. Jan. Feb. Mar. Apr. May June INTEREST RATES Commercial banks1 1 48-month new car2 13.92 13.71 12.91 n.a. n.a. 12.29 n.a. n.a. 11.45 n.a. 2 24-month personal 16.68 16.47 15.94 n.a. n.a. 15.52 n.a. n.a. 14.89 n.a. 3 120-month mobile home2 16.08 15.58 14.96 n.a. n.a. 14.57 n.a. n.a. 13.97 n.a. 4 Credit card 18.78 • 18.77 18.69 n.a. n.a. 18.48 n.a. n.a. 18.32 n.a. Auto finance companies New car 12.58 14.62 11.98 12.52 9.99 9.70 10.51 10.55 9.49 9.35 6 Used car 18.74 17.85 17.59 17.22 16.60 16.74 16.63 16.67 16.56 16.06 OTHER TERMS3 Maturity (months) 7 New car 45.9 48.3 51.5 52.1 51.2 51.3 51.0 50.6 49.4 49.5 8 Used car 37.9 39.7 41.4 41.4 42.8 42.5 42.4 42.5 42.5 42.7 Loan-to-value ratio 9 New car 86 88 91 92 92 92 90 89 89 89 10 Used car 92 92 94 95 95 95 95 96 97 97 Amount financed (dollars) 11 New car 8,787 9,333 9,915 9,925 10,064 10,074 10,306 10,402 10,521 10,608 12 Used car 5,033 5,691 6,089 6,255 6,165 6,194 6,207 6,281 6,393 6,611 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 • October 1986 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1983 1984 1985 ^ y • senior 11998800 11998811 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .... 341.8 372.7 395.3 542.9 765.9 898.2 506.0 579.7 713.4 818.4 729.2 11,,006666..66 By sector and instrument 2 U.S. government 79.2 87.4 161.3 186.6 198.8 223.6 221.9 151.2 172.2 225.4 183.2 263.6 3 Treasury securities 79.8 87.8 162.1 186.7 199.0 223.7 222.0 151.4 172.4 225.5 183.3 263.7 4 Agency issues and mortgages -.6 -.5 -.9 -.1 -.2 -.1 -.1 -.1 -.2 -.1 -.1 -.1 5 Private domestic nonfinancial sectors 262.6 285.3 234.1 356.3 567.1 674.5 284.1 428.5 541.2 593.1 546.0 803.0 6 Debt capital instruments 188.1 154.5 152.6 253.7 325.3 492.9 227.3 280.1 287.7 362.8 370.0 615.2 1 Tax-exempt obligations 30.3 23.4 48.6 57.3 65.8 182.8 57.3 57.4 38.9 92.6 88.3 277.2 8 Corporate bonds 26.7 21.8 18.7 16.0 47.1 72.9 21.4 10.6 31.9 62.3 71.9 73.2 9 Mortgages 131.2 109.3 85.4 180.3 212.4 237.3 148.6 212.1 216.9 207.9 209.8 264.9 10 Home mortgages 94.2 72.2 50.5 116.9 130.7 155.3 98.7 135.2 135.6 125.7 130.8 180.0 11 Multifamily residential 7.6 4.8 5.4 11.9 20.7 26.1 6.1 17.6 23.6 17.7 22.3 30.0 12 Commercial 19.2 22.2 25.2 48.9 62.0 60.8 42.2 55.7 58.5 65.6 59.0 62.7 13 Farm 10.2 10.0 4.2 2.6 -1.0 -5.0 1.6 3.6 -.8 -1.2 -2.2 -7.8 14 Other debt instruments 74.5 130.8 81.4 102.6 241.9 181.6 56.8 148.4 253.5 230.2 175.9 187.7 15 Consumer credit 4.7 22.6 17.7 56.7 94.8 96.6 38.0 75.4 98.0 91.6 98.3 95.0 16 Bank loans n.e.c 37.0 54.7 54.2 26.8 79.5 39.4 13.7 39.8 89.9 69.0 28.3 51.0 11 Open market paper 5.7 19.2 -4.7 -1.6 24.2 12.4 -10.0 6.9 33.5 15.0 16.9 7.9 18 Other 27.1 34.4 14.2 20.7 43.3 33.2 15.1 26.3 32.1 54.6 32.5 33.9 19 By borrowing sector 262.6 285.3 234.1 356.3 567.1 674.5 284.1 428.5 541.2 593.1 546.0 803.0 20 State and local governments 17.2 6.8 25.9 37.6 45.0 140.9 36.0 39.2 21.4 68.6 74.1 207.6 21 Households 118.9 119.7 87.9 187.4 239.2 294.0 152.3 222.6 236.0 242.3 244.3 343.9 22 Farm 15.2 16.6 6.8 4.1 -.1 -11.9 .8 7.4 -.7 .5 -7.6 -16.2 23 Nonfarm noncorporate 31.2 38.6 41.3 70.8 90.8 85.4 56.1 85.5 96.9 84.7 84.4 86.4 24 Corporate 80.1 103.6 72.1 56.4 192.3 166.1 39.0 73.8 187.7 196.9 150.7 181.2 25 Foreign net borrowing in United States 27.2 27.2 15.7 18.9 2.8 1.5 15.4 22.4 23.0 -17.4 -3.2 6.2 26 Bonds .8 5.4 6.7 3.8 4.1 3.9 4.6 2.9 1.1 7.0 5.1 2.7 27 Bank loans n.e.c 11.5 3.7 -6.2 4.9 -7.8 -3.1 11.4 -1.6 -4.5 -11.1 -5.4 -.8 28 Open market paper 10.1 13.9 10.7 6.0 2.5 -.6 -4.6 16.5 20.9 -16.0 -5.4 4.2 29 U.S. government loans 4.7 4.2 4.5 4.3 4.0 1.3 3.9 4.6 5.5 2.6 2.4 .1 30 Total domestic plus foreign 369.0 399.9 411.0 561.7 768.7 899.7 521.3 602.1 736.4 801.0 725.9 1,072.8 Financial sectors 31 Total net borrowing by financial sectors 57.6 89.0 80.2 89.2 138.2 193.7 69.1 109.3 126.5 149.9 167.2 220.1 By instrument 32 U.S. government related 44.8 47.4 64.9 67.8 74.9 101.6 66.2 69.4 69.6 80.1 92.7 110.4 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 79.9 70.3 62.5 39.7 49.2 66.7 93.1 \S 1.2 1.9 .4 1.1 36 Private financial sectors 12.8 41.6 15.3 21.4 63.3 92.1 2.9 40.0 56.9 69.7 74.5 109.7 37 Corporate bonds 1.8 3.5 13.7 12.6 25.9 31.2 10.3 14.9 20.7 31.1 32.2 2299..88 38 Mortgages * * .1 * .4 .1 * * .4 .4 * ..11 39 Bank loans n.e.c -.9 .9 1.9 -.2 1.0 5.3 -3.3 3.0 -.5 2.4 1.7 9.2 40 Open market paper 4.8 20.9 -1.1 16.0 20.4 41.3 7.9 24.1 20.4 20.4 28.8 53.9 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 21.7 -4.1 6.9 29.9 30.9 26.0 17.3 43 Mortgage pools 19.2 15.0 49.5 66.4 44.4 79.9 70.3 62.5 39.7 49.2 66.7 93.1 44 Private financial sectors 12.8 41.6 15.3 21.4 63.3 92.1 2.9 40.0 56.9 69.7 74.5 109.7 45 Commercial banks .5 .4 1.2 .5 4.4 5.4 .8 .2 4.8 3.9 5.2 5.7 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 22.1 -9.3 5.2 19.7 25.6 11.1 33.0 48 Finance companies -1.1 18.2 6.3 11.3 19.3 55.9 2.1 20.5 6.3 32.4 49.6 62.2 49 REITs -.5 -.2 * -.2 .8 .5 -.1 -.3 .8 .8 .5 .5 All sectors 50 Total net borrowing 426.6 488.9 491.2 651.0 906.9 1093.4 590.4 711.5 863.0 950.9 893.2 1,292.9 51 U.S. government securities 122.9 133.0 225.9 254.4 273.8 324.2 288.2 220.7 241.9 305.6 276.0 371.9 52 State and local obligations 30.3 23.4 48.6 57.3 65.8 182.8 57.3 57.4 38.9 92.6 88.3 277.2 53 Corporate and foreign bonds 29.3 30.7 39.0 32.4 77.1 108.0 36.3 28.4 53.8 100.5 109.3 105.7 54 Mortgages 131.1 109.2 85.4 180.3 212.7 237.3 148.6 212.0 217.2 208.2 209.8 264.9 55 Consumer credit 4.7 22.6 17.7 56.7 94.8 96.6 38.0 75.4 98.0 91.6 98.3 95.0 56 Bank loans n.e.c 47.7 59.2 49.9 31.5 72.7 41.7 21.8 41.2 84.9 60.4 24.6 59.4 57 Open market paper 20.6 54.0 4.9 20.4 47.1 53.1 -6.7 47.5 74.8 19.3 40.4 66.0 58 Other loans 40.1 56.7 19.9 17.9 63.0 49.7 6.9 29.0 53.4 72.7 46.6 52.9 External corporate equity funds raised in United States 59 Total new share issues 21.2 -3.3 33.6 66.3 -33.6 32.9 81.9 50.7 -41.2 -25.9 25.7 40.1 60 Mutual funds 4.5 6.0 16.8 31.5 37.1 105.3 35.3 27.7 39.0 35.3 92.0 118.6 61 All other 16.8 -9.3 16.8 34.8 -70.7 -72.4 46.6 23.0 -80.2 -61.2 -66.3 -78.4 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 5.3 2.6 2.4 5.0 5.3 5.1 5.4 64 Foreign shares purchased in United States 2.1 .3 1.5 4.0 1.1 4.0 5.7 2.2 -.7 2.9 4.3 3.6 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 1984 1985 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998800 11998811 11998822 11998833 11998844 11998855 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 341.8 372.7 395.3 542.9 765.9 898.2 506.0 579.7 713.4 818.4 729.2 1,066.6 By public agencies and foreign 7 97.1 97.7 114.1 117.4 144.6 221166..44 112200..55 111144..44 112244..22 116655..11 119977..66 223366..99 3 U.S. government securities 15.8 17.1 22.7 27.6 36.0 45.7 41.0 14.1 30.5 41.4 48.0 45.1 4 Residential mortgages 31.7 23.5 61.0 76.1 56.5 94.7 80.2 72.1 52.8 60.1 86.0 103.4 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 61.8 11.4 30.2 25.0 48.1 52.0 71.6 Total advanced, by sector 7 U.S. government 23.7 24.0 15.9 9.7 17.1 17.4 9.1 10.3 7.8 2266..44 1188..11 1166..88 8 Sponsored credit agencies 45.6 48.2 65.5 69.8 73.3 101.6 68.6 71.0 73.6 73.0 97.7 105.5 9 Monetary authorities 4.5 9.2 9.8 10.9 8.4 21.6 15.7 6.1 12.1 4.7 27.1 16.4 10 Foreign 23.3 16.2 22.8 27.1 45.9 75.7 27.2 27.0 30.7 61.0 54.7 98.2 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 44.8 47.4 64.9 6677..88 7744..99 110011..66 6666..22 6699..44 6699..66 8800..11 9922..77 111100..44 12 Foreign 27.2 27.2 15.7 18.9 2.8 1.5 15.4 22.4 23.0 --1177..44 -3.2 6.2 Private domestic funds advanced 13 316.7 349.6 361.8 512.1 699.0 784.9 467.1 555577..11 681.8 771166..11 662211..00 994466..33 14 U.S. government securities 107.1 115.9 203.1 226.9 237.8 278.5 247.2 206.6 211.4 264.2 228.0 326.8 15 State and local obligations 30.3 23.4 48.6 57.3 65.8 182.8 57.3 57.4 38.9 92.6 88.3 277.2 16 Corporate and foreign bonds 19.3 18.8 14.8 14.9 34.8 33.6 21.4 8.5 25.3 44.3 43.5 23.0 17 Residential mortgages 70.0 53.5 -5.3 52.6 94.8 86.7 24.6 80.6 106.3 83.3 67.0 106.5 18 Other mortgages and loans 97.1 154.2 101.4 153.0 281.5 217.6 104.6 202.0 315.8 247.1 205.9 229.6 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 283.8 321.7 288.4 384.6 555.6 555.2 332.0 437.2 552.5 555588..77 444488..99 665599..99 71 Commercial banking 100.6 102.3 107.2 136.1 181.7 196.6 121.0 151.3 195.2 168.1 142.6 251.9 77 54.5 27.8 30.1 139.8 146.3 86.0 131.3 148.3 167.9 124.7 57.4 114.8 73 94.5 97.6 107.4 94.2 119.0 125.2 83.0 105.3 112.0 126.0 101.6 148.7 24 Other finance 34.2 94.0 43.7 14.5 108.6 147.4 -3.3 32.3 77.4 139.9 147.3 144.5 75 283.8 321.7 288.4 384.6 555.2 555.2 332.0 437.2 552.5 558.7 448.9 659.9 76 Private domestic deposits and RPs 169.6 211.9 196.2 209.3 298.8 194.5 203.8 214.8 292.2 305.5 177.9 208.5 27 Credit market borrowing 12.8 41.6 15.3 21.4 63.3 92.1 2.9 40.0 56.9 69.7 74.5 109.7 78 Other sources 101.3 68.2 77.0 153.9 193.5 268.6 125.3 182.4 203.4 183.5 196.5 341.7 79 Foreign funds -21.7 -8.7 -26.7 22.1 19.0 14.0 -14.2 58.5 27.2 10.9 10.7 15.4 30 Treasury balances -2.6 -1.1 6.1 -5.3 4.0 10.3 9.9 -20.6 1.2 6.8 19.3 .7 31 Insurance and pension reserves 83.7 90.7 103.2 95.1 110.3 116.7 83.5 106.8 119.5 101.2 100.6 132.9 32 Other, net 41.8 -12.7 -5.6 41.9 60.1 127.6 46.1 37.7 55.5 64.6 66.0 192.7 Private domestic nonfinancial investors 33 Direct lending in credit markets 45.8 69.5 88.7 148.9 206.7 321.8 137.9 115599..99 118866..33 222277..11 224466..66 339966..11 34 U.S. government securities 24.6 29.3 32.1 88.3 125.8 164.1 96.9 79.7 126.3 125.3 119.1 206.5 35 State and local obligations 7.0 11.1 29.2 43.5 43.2 90.4 47.2 39.9 25.3 61.2 47.0 133.6 36 Corporate and foreign bonds -11.0 -3.9 8.1 -5.5 15.3 3.1 -10.8 -.3 7.5 23.0 40.3 -32.4 37 Open market paper -3.1 2.7 -.6 6.5 -1.4 37.2 -6.6 19.7 3.2 -6.1 11.7 62.8 38 Other 28.4 30.3 19.9 16.1 23.8 27.1 11.3 20.8 24.0 23.7 28.5 25.7 39 Deposits and currency 181.1 221.9 203.3 228.4 303.4 206.9 225.6 231.3 303.6 303.2 191.8 219.3 40 10.3 9.5 9.7 14.3 8.6 12.4 14.8 13.8 15.9 1.3 18.5 6.3 41 Checkable deposits 5.4 18.1 17.6 26.7 24.1 43.5 53.0 -.4 30.4 17.7 15.9 69.3 47 Small time and savings accounts 82.9 47.0 138.1 218.3 149.8 128.8 278.9 157.7 130.7 169.0 156.6 100.6 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 14.3 -55.1 43.4 97.6 69.6 -.5 28.6 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 7.0 2.7 -4.5 -3.6 -4.5 4.5 * 47 Total of credit market instruments, deposits and currency 226.9 291.4 292.0 377.3 510.1 528.7 363.5 391.2 489.9 553300..33 443388..44 661155..44 48 Public holdings as percent of total 26.3 24.4 27.8 20.9 18.8 24.0 23.1 19.0 16.9 20.6 27.2 22.1 49 Private financial intermediation (in percent) 89.6 92.0 79.7 75.1 79.5 70.7 71.1 78.5 81.0 78.0 72.3 69.7 50 Total foreign funds 1.6 7.6 -3.9 49.2 64.9 89.7 13.0 85.5 57.9 71.9 65.4 113.6 MEMO: Corporate equities not included above 51 21.2 -3.3 33.6 66.3 -33.6 32.9 81.9 50.7 -41.2 -25.9 25.7 40.1 57 Mutual fund shares 4.5 6.0 16.8 31.5 37.1 105.3 35.3 27.7 39.0 35.3 92.0 118.6 53 Other equities 16.8 -9.3 16.8 34.8 -70.7 -72.4 46.6 23.0 -80.2 -61.2 -66.3 -78.4 54 Acquisitions by financial institutions 24.9 20.9 36.9 56.7 10.3 43.8 76.4 36.9 2.1 18.5 60.7 23.9 55 Other net purchases -3.6 -24.3 -3.3 9.6 -43.9 -10.9 5.5 13.7 -43.4 -44.5 -35.0 16.2 NOTES BY LINE NUMBER. 31. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.57. 32. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 33. Line 13 less line 20 plus line 27. 6. Includes farm and commercial mortgages. 34-38. Lines 14-18 less amounts acquired by private finance plus amounts 11. Credit market funds raised by federally sponsored credit agencies, and net borrowed by private finance. Line 38 includes mortgages. issues of federally related mortgage pool securities. 40. Mainly an offset to line 9. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. Also 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. sum of lines 28 and 47 less lines 40 and 46. 48. Line 2/line 1. 18. Includes farm and commercial mortgages. 49. Line 20/line 13. 26. Line 39 less lines 40 and 46. 50. Sum of lines 10 and 29. 27. Excludes equity issues and investment company shares. Includes line 19. 51. 53. Includes issues by financial institutions. 29. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, and liabilities of foreign banking agencies to foreign affiliates, less outstanding may be obtained from Flow of Funds Section, Division of Research claims on foreign affiliates and deposits by banking in foreign banks. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits and note balances at commercial banks. D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • October 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 Nov. Dec. Jan. Feb. Mar. Apr.' May' June' July 1 Industrial production 109.2 121.8 124.5 125.4 126.4 126.7 125.6 124.4 125.3 124.6 124.2 124.1 Market groupings 2 Products, total 113.9 127.1 131.7 133.5 134.1 134.4 133.1 132.1 133.3 132.8 132.0 131.9 3 Final, total 114.7 127.8 132.0 133.7 134.4 134.4 132.8 131.5 132.8 131.9 131.0 130.9 4 Consumer goods 109.3 118.2 120.7 122.7 124.2 123.9 123.2 122.5 124.7 124.6 124.2 123.9 5 Equipment 121.7 140.5 147.1 148.3 147.9 148.4 145.5 143.4 143.5 141.7 140.1 140.1 6 Intermediate 111.2 124.9 130.6 132.7 132.9 134.4 134.1 134.1 135.2 135.8 135.4 135.4 7 Materials 102.8 114.6 114.7 114.3 115.9 116.2 115.4 114.0 114.3 113.5 113.5 113.6 Industry groupings 8 Manufacturing 110.2 123.9 127.1 128.4 129.1 129.8 128.8 128.0 129.0 128.7 128.0 128.0 Capacity utilization (percent)2 9 Manufacturing 74.0 80.8 80.3 80.2 80.4 80.7 79.8 79.1 79.6 79.3 78.7 78.5 10 Industrial materials industries 75.3 82.3 80.2 79.2 80.1 80.2 79.6 78.5 78.6 78.0 77.9 77.9 11 Construction contracts (1977 = 100)3 138.0 150.0 161.0 162.0 162.0 146.0 162.0 149.0 176.0 160.0 161.0 163.0 12 Nonagricultural employment, total4 109.4 114.5 118.5 119.6 119.9 120.4 120.6 120.6 121.0 121.2 121.1 121.6 13 Goods-producing, total 95.9 101.6 102.9 102.4 102.6 103.1 102.9 102.5 102.9 102.6 102.1 102.2 14 Manufacturing, total 93.6 98.6 98.7 97.8 98.0 98.0 98.0 97.8 97.8 97.5 97.2 97.1 15 Manufacturing, production-worker ... 88.6 94.1 93.5 92.5 92.7 92.7 92.6 92.4 92.4 92.1 91.9 91.8 lb Service-producing 115.0 120.0 125.0 126.9 127.2 127.6 128.0 128.2 128.6 129.0 129.0 129.7 17 Personal income, total 176.4 193.6 206.2 209.8 212.6 212.6 213.7 214.3 217.0 216.7 216.9 217.9 18 Wages and salary disbursements 168.6 184.6 197.8 202.3 204.4 204.8 205.7 206.4 206.8 207.1 207.6 208.1 19 Manufacturing 149.0 164.6 172.5 174.9 176.8 176.6 176.2 176.4 175.8 176.1 175.4 175.1 20 Disposable personal income5 176.0' 193.6^ 205.(K 208.2' 211.2' 211.8' 212.9' 213.7' 216.6 216.1 215.8 216.8 21 Retail sales (1977 = 100)« 162.0 179.0 190.6 191.6 194.0 194.8 194.5 193.7 195.4 197.0 196.9 197.0 Prices7 22 Consumer 298.4 311.1 322.2 326.6 327.4 328.4 327.5 326.0 325.3 326.3 327.9 328.0 23 Producer finished goods 285.2 291.1 293.7 2%. 4 297.2 296.0 291.9' 288.1 286.9 289.0 288.9 288.0 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 1. Data without seasonal adjustment, as published in Monthly Labor Review. (July 1985), pp. 487-501. The revised indexes for January through June 1985 were Seasonally adjusted data for changes in the price indexes may be obtained from shown in the September BULLETIN. the Bureau of Labor Statistics, U.S. Department of Labor. 2. Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, Department of Com- NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6, merce, and other sources. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 3. Index of dollar value of total construction contracts, including residential, of Current Business. nonresidential and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the last two months are preliminary and Company, F. W. Dodge Division. estimated, respectively. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1985 1986 CCaatteeggoorryy 11998833 11998844 11998855 Dec. Jan. Feb. Mar. Apr. May June' July HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 176,414 178,602 180,440 181,349 181,898 182,055 182,223 182,387 182,545 182,732 182,906 2 Labor force (including Armed Forces)1 113,749 115,763 117,695 118,466 119,014 119,322 119,445 119,473 119,898 120,345 120,296 3 Civilian labor force 111,550 113,544 115,461 116,229 116,786 117,088 117,207 117,234 117,664 118,116 118,072 Employment 4 Nonagricultural industries2 97,450 101,685 103,971 105,055 105,655 105,465 105,503 105,670 105,950 106,508 106,769 5 Agriculture 3,383 3,321 3,179 3,151 3,299 3,096 3,285 3,222 3,160 3,165 3,112 Unemployment 6 Number 10,717 8,539 8,312 8,023 7,831 8,527 8,419 8,342 8,554 8,443 8,190 7 Rate (percent of civilian labor force) ... 9.6 7.5 7.2 6.9 6.7 7.3 7.2 7.1 7.3 7.1 6.9 8 Not in labor force 62,665 62,839 62,745 62,883 62,884 62,733 62,778 62,914 62,647 62,387 62,610 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,196 94,461 97,698 98,910 99,296 99,429 99,484 99,783 99,918 99,864 100,253 10 Manufacturing 18,434 19,412 19,426 19,289 19,303 19,294 19,255 19,245 19,201 19,145 19,122 11 Mining 952 974 969 901 897 880 852 821 790 773 769 12 Contract construction 3,948 4,345 4,661 4,787 4,901 4,864 4,838 4,972 4,974 4,939 4,992 13 Transportation and public utilities 4,954 5,171 5,300 5,277 5,286 5,277 5,280 5,266 5,265 5,177 5,274 14 Trade 20,881 22,134 23,195 23,431 23,564 23,638 23,669 23,715 23,783 23,762 23,849 15 Finance 5,468 5,682 5,924 6,095 6,123 6,157 6,184 6,228 6,261 6,294 6,330 16 Service 19,694 20,761 21,929 22,501 22,585 22,638 22,707 22,825 22,924 23,073 23,197 17 Government 15,869 15,984 16,295 16,629 16,637 16,681 16,699 16,711 16,720 16,701 16,720 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 • October 1986 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1985 1986 1985 1986 1985 1986 Q3 Q4 Ql Q2r Q3 Q4 Ql Q2 Q3 Q4 Ql Q2' Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 124.8 125.4 125.6 124.7 155.1 156.2 157.2 158.1 80.5 80.3 79.9 78.9 2 Mining 108.5 107.6 105.1 100.3 133.9 134.1 134.3 134.3 81.0 80.2 78.3 74.7 3 Utilities 111.4 113.7 113.1 111.8 135.4 136.3 136.9 137.3 82.3 83.4 82.6 81.4 4 Manufacturing 127.6 128.2 128.9 128.6 158.9 160.2 161.3 162.4 80.3 80.0 79.9 79.2 5 Primary processing ... 109.5 110.4 111.7 110.9 132.4 132.8 133.2 133.6 82.7 83.1 83.8 83.0 6 Advanced processing 138.6 139.0 139.1 139.3 174.9 176.7 178.3 179.7 79.2 78.7 78.0 77.5 7 Materials 114.2 114.8 115.2 113.8 143.4 144.3 145.0 145.5 79.6 79.5 79.4 78.2 8 Durable goods 120.7 121.4 121.6 119.1 158.9 160.5 161.6 162.2 76.0 75.6 75.3 73.4 9 Metal materials .... 79.4 82.4 80.2 75.7 117.3 117.3 116.7 115.6 67.7 70.3 68.7 65.5 10 Nondurable goods.... 113.7 113.8 115.7 116.4 138.2 138.7 139.1 139.4 82.2 82.0 83.2 83.5 11 Textile, paper, and chemical.. 114.1 114.0 116.2 116.6 137.4 137.8 138.1 138.4 83.0 82.7 84.1 84.3 12 Paper 123.8 124.5 128.3 129.3 136.3 136.5 136.8 137.4 90.8 91.2 93.8 94.1 13 Chemical 114.6 114.2 115.7 115.4 142.6 143.1 143.5 143.7 80.4 79.8 80.6 80.3 14 Energy materials 103.2 104.2 103.6 102.1 120.6 120.9 121.2 121.5 85.5 86.1 85.4 84.0 Previous cycle1 Latest cycle2 1985 1985 1986 High Low High Low July Nov. Dec. Jan. Feb. Mar. Apr/ Mayr June' July Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 80.2 80.3 80.7 80.8 79.9 79.0 79.4 78.8 78.4 78.2 16 Mining 92.8 87.8 95.2 76.9 81.2 79.7 80.0 80.0 78.4 76.4 75.6 74.3 74.1 73.8 17 Utilities 95.6 82.9 88.5 78.0 81.9 82.3 85.3 83.8 82.1 81.8 82.0 81.1 81.2 81.0 18 Manufacturing 87.7 69.9 86.5 68.0 80.1 80.2 80.4 80.7 79.8 79.1 79.6 79.3 78.7 78.5 19 Primary processing ... 91.9 68.3 89.1 65.1 82.3 83.0 83.3 84.8 83.9 82.9 83.2 83.3 82.6 82.6 20 Advanced processing . 86.0 71.1 85.1 69.5 79.1 79.0 79.0 78.8 78.1 77.2 78.0 77.6 76.9 76.7 21 Materials 92.0 70.5 89.1 68.4 79.5 79.2 80.1 80.2 79.6 78.5 78.6 78.0 77.9 77.9 22 Durable goods 91.8 64.4 89.8 60.9 75.8 75.8 75.8 76.4 75.2 74.2 74.2 73.2 72.8 72.6 23 Metal materials, , 99.2 67.1 93.6 45.7 66.4 70.8 70.7 71.3 68.4 66.4 66.8 65.5 64.3 64.2 24 Nondurable goods .... 91.1 66.7 88.1 70.6 81.7 81.5 82.7 83.5 83.7 82.4 83.5 83.3 83.7 83.8 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 82.7 82.1 83.5 84.3 84.6 83.4 84.3 84.1 84.4 84.8 ">6 98.4 70.6 97.3 79.9 9911..77 90.1 9944..77 94.8 93.7 92.9 94.0 93.1 9955..11 •77 92.5 64.4 87.9 63.3 8800..11 78.8 8800..11 81.1 80.9 79.9 80.4 80.4 8800..11 28 Energy materials 94.6 86.9 94.0 82.2 85.8 84.7 87.4 85.9 85.7 84.7 84.1 83.9 84.2 84.5 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 1985 1986 pro- 1985 Grouping por- avg. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May JuneP July* Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 124.5 124.1 125.2 125.1 124.4 125.4 126.4 126.7 125.6 124.4 125.3 124.6 124.2 124.1 2 Products 57.72 131.7 131.6 133.0 133.1 131.8 133.5 134.1 134.4 133.1 132.1 133.3 132.8 132.0 131.9 3 Final products 44.77 132.0 131.8 133.3 133.3 131.9 133.7 134.4 134.4 132.8 131.5 132.8 131.9 131.0 130.9 4 Consumer goods 25.52 120.7 120.1 121.5 121.8 120.8 122.7 124.2 123.9 123.2 122.5 124.7 124.6 124.2 123.9 5 Equipment 19.25 147.1 147.3 149.0 148.6 146.6 148.3 147.9 148.4 145.5 143.4 143.5 141.7 140.1 140.1 6 Intermediate products 12.94 130.6 130.7 132.0 132.3 131.5 132.7 132.9 134.4 134.1 134.1 135.2 135.8 135.4 135.4 7 Materials 42.28 114.7 113.8 114.5 114.2 114.2 114.3 115.9 116.2 115.4 114.0 114.3 113.5 113.5 113.6 Consumer goods 8 Durable consumer goods 6.89 112.9 111.3 114.0 112.9 111.4 115.5 116.8 116.6 116.3 113.0 116.2 113.2 113.7 113.6 9 Automotive products 2.98 115.1 115.0 120.0 117.8 112.9 116.8 116.6 117.0 118.3 112.8 118.6 115.1 115.8 115.8 10 Autos and trucks 1.79 112.0 113.7 120.2 116.6 108.7 113.7 112.0 116.2 118.8 107.6 116.0 110.7 112.8 112.7 11 Autos, consumer 1.16 98.9 101.1 101.3 98.8 92.3 94.9 99.9 103.6 107.0 95.1 101.0 94.5 99.6 95.3 12 Trucks, consumer .63 136.3 137.2 155.4 149.7 139.1 148.6 134.5 139.5 140.6 130.6 143.9 140.9 137.2 13 Auto parts and allied goods 1.19 119.7 116.8 119.6 119.5 119.3 121.4 123.4 118.2 117.7 120.6 122.5 121.6 120.3 120.4 14 Home goods 3.91 111.3 108.4 109.5 109.3 110.2 114.5 116.9 116.4 114.8 113.2 114.3 111.8 112.1 111.9 15 Appliances, A/C and TV 1.24 129.5 121.6 124.5 123.7 126.3 139.4 145.4 138.8 136.5 135.5 140.0 131.0 132.2 132.6 16 Appliances and TV 1.19 130.3 123.2 125.5 125.6 128.6 141.9 148.4 141.5 139.1 137.9 141.8 133.0 133.7 17 Carpeting and furniture .96 119.4 122.2 119.5 120.2 120.1 122.9 118.9 122.3 121.9 118.4 119.1 120.9 120.5 18 Miscellaneous home goods 1.71 93.6 91.2 93.0 92.7 92.9 91.9 95.2 96.9 95.1 94.1 93.1 92.9 92.8 19 Nondurable consumer goods 18.63 123.6 123.4 124.2 125.1 124.3 125.4 127.0 126.5 125.7 126.0 127.8 128.8 128.1 127.7 20 Consumer staples 15.29 129.4 129.3 130.3 131.0 130.1 131.0 133.0 132.2 131.7 132.2 134.0 135.4 134.7 134.1 21 Consumer foods and tobacco 7.80 129.7 130.1 130.8 131.5 129.5 130.7 132.4 131.3 131.9 131.1 132.7 133.3 132.8 22 Nonfood staples 7.49 129.1 128.5 129.7 130.5 130.6 131.2 133.6 133.1 131.5 133.3 135.5 137.6 136.8 136.1 23 Consumer chemical products .. 2.75 147.5 145.4 149.1 151.4 149.4 152.4 152.9 153.8 155.6 155.4 158.0 160.1 159.8 24 Consumer paper products 1.88 143.7 144.9 143.9 144.7 145.5 145.7 148.0 144.4 141.7 146.5 147.5 152.2 151.7 25 Consumer energy 2.86 101.9 101.5 101.8 101.0 102.9 101.4 105.6 105.8 102.1 103.5 106.0 106.4 104.9 26 Consumer fuel 1.44 88.5 89.2 91.1 85.8 90.2 90.1 92.3 93.9 91.4 91.0 94.1 95.7 92.6 27 Residential utilities 1.42 114.0 112.7 116.5 115.8 112.9 119.2 117.8 113.0 116.2 118.2 117.3 Equipment 28 Business and defense equipment 18.01 147.8 147.9 149.7 149.4 147.5 149.7 149.4 150.3 148.3 147.1 148.1 146.8 145.5 145.6 29 Business equipment 14.34 141.3 141.3 143.0 142.2 139.6 141.7 141.4 142.9 141.1 139.1 140.3 138.5 136.8 136.9 30 Construction, mining, and farm .. 2.08 67.7 68.6 67.2 67.0 65.9 68.2 68.3 67.7 65.3 62.4 60.9 62.7 62.7 31 Manufacturing 3.27 112.8 113.5 115.1 114.8 111.7 112.8 112.8 113.1 114.1 113.9 113.5 113.3 111.0 111.0 32 Power 1.27 83.6 85.6 84.5 85.1 85.5 84.7 87.1 84.5 83.4 82.5 82.8 82.9 82.6 82.0 33 Commercial 5.22 219.3 219.5 222.8 219.4 213.9 217.7 217.9 219.2 216.4 215.6 216.4 212.7 208.7 211.6 34 Transit 2.49 106.1 103.3 106.0 108.3 109.7 111.2 107.7 114.6 111.4 105.0 112.0 108.1 109.9 105.2 35 Defense and space equipment 3.67 173.6 173.9 175.5 177.5 178.7 180.7 180.7 179.3 176.7 178.5 178.6 179.1 179.3 179.5 Intermediate products 36 Construction supplies 5.95 119.0 119.4 121.5 121.3 120.0 120.9 120.7 124.0 123.5 123.5 124.5 124.7 122.7 123.2 37 Business supplies 6.99 140.5 140.3 140.9 141.7 141.2 142.7 143.3 143.2 143.1 143.0 144.3 145.2 146.2 38 General business supplies 5.67 144.4 144.4 145.1 145.4 144.8 146.7 146.8 147.2 146.7 146.9 148.2 149.0 150.5 39 Commercial energy products 1.31 123.7 122.7 122.5 125.7 125.7 125.3 128.1 125.9 127.5 126.4 127.3 129.0 127.8 Materials 40 Durable goods materials 20.50 121.8 120.2 121.8 120.2 120.4 121.7 122.1 123.2 121.5 120.0 120.2 118.7 118.3 118.0 41 Durable consumer parts 4.92 100.7 98.3 100.0 99.0 100.2 101.6 101.5 103.9 103.2 100.7 99.6 97.5 97.6 97.0 42 Equipment parts 5.94 159.0 157.0 158.7 156.5 154.0 155.0 155.1 154.8 154.0 153.4 154.2 151.9 151.1 150.8 43 Durable materials n.e.c 9.64 109.7 108.6 110.2 108.7 109.9 111.4 112.3 113.7 110.9 109.3 109.7 109.1 108.6 108.5 44 Basic metal materials 4.64 84.8 82.5 85.1 82.8 85.8 87.6 88.5 87.5 83.4 81.2 81.9 80.1 78.3 45 Nondurable goods materials 10.09 112.2 112.8 113.5 114.7 113.4 113.0 114.9 116.1 116.4 114.7 116.3 116.1 116.8 117.0 46 Textile, paper, and chemical materials 7.53 112.4 113.5 113.8 115.1 113.5 113.2 115.2 116.4 116.8 115.3 116.5 116.4 116.9 117.4 47 Textile materials 1.52 97.7 100.2 104.4 104.1 101.2 104.4 102.1 103.2 107.3 104.9 106.9 107.1 108.0 48 Pulp and paper materials 1.55 123.7 125.0 122.8 123.7 121.1 123.0 129.3 129.5 128.2 127.2 129.0 127.9 130.9 49 Chemical materials 4.46 113.6 114.0 113.8 115.9 115.0 112.8 114.8 116.3 116.1 114.6 115.5 115.5 115.1 50 Miscellaneous nondurable materials 2.57 111.3 110.8 112.7 113.5 113.3 112.5 113.9 115.3 115.2 113.2 115.6 115.5 116.4 51 Energy materials 11.69 104.3 103.5 102.7 103.4 104.2 102.5 105.8 104.1 103.9 102.7 102.1 101.9 102.4 102.9 52 Primary energy 7.57 107.8 107.4 106.4 106.8 108.2 106.7 109.0 106.8 107.6 107.1 107.3 106.7 106.8 53 Converted fuel materials 4.12 97.9 96.2 95.9 97.0 96.8 94.7 100.1 99.1 97.0 94.8 92.5 93.1 94.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • October 1986 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1985 1986 Grouping c S o I d C e p p o ro r- - a 1 v 98 g 5 . tion July Aug. Sept. Oct. Nov. Dec Jan. Feb. Mar. Apr/ May June? July Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 110.6 109.4 109.1 110.3 109.9 108.9 110.8 110.2 108.0 106.2 105.6 104.2 104.1 103.8 2 Mining 9.83 109.0 108.7 108.3 108.4 108.4 106.9 107.4 107.4 105.3 102.7 101.5 99.8 99.6 99.2 3 Utilities 5.96 113.2 110.7 110.3 113.2 112.4 112.2 116.5 114.6 112.4 112.2 112.4 111.4 111.6 111.4 4 Manufacturing 84.21 127.1 126.9 128.2 127.7 127.2 128.4 129.1 129.8 128.8 128.0 129.0 128.7 128.0 128.0 5 Nondurable 35.11 125.6 125.6 126.6 126.9 126.4 127.3 128.0 129.1 128.5 128.3 129.7 130.4 130.3 130.2 6 Durable 49.10 128.2 127.9 129.4 128.3 127.7 129.2 129.9 130.4 129.0 127.7 128.4 127.5 126.4 126.3 Mining I Metal 10 .50 75.1 60.9 73.1 71.4 74.2 78.3 74.3 75.5 77.2 78.1 77.3 8 Coal 11.12 1.60 127.5 128.0 127.7 126.3 130.1 125.5 128.0 130.6 124.9 123.5 124.5 122.4 127.0 9 Oil and gas extraction 13 7.07 106.3 106.9 105.5 106.0 104.8 103.5 104.4 103.6 101.4 98.5 96.4 95.1 93.7 93.0 10 Stone and earth minerals 14 .66 118.8 116.6 117.7 119.3 120.4 119.0 114.0 117.1 120.2 115.2 118.9 116.3 117.4 Nondurable manufactures II Foods 20 7.96 131.0 132.2 132.6 132.5 130.7 131.4 132.6 133.2 133.8 133.0 134.0 135.1 134.3 12 Tobacco products 21 .62 96.0 97.7 97.8 105.3 104.5 103.5 99.3 97.9 93.0 101.4 101.5 13 Textile mill products 22 2.29 102.5 104.1 106.3 106.7 104.9 108.0 106.3 107.4 110.4 108.4 110.1 110.8 111.3 14 Apparel products 23 2.79 101.8 100.6 100.4 101.8 102.6 103.9 105.0 105.8 103.6 104.0 104.3 103.7 103.1 15 Paper and products 26 3.15 127.4 129.0 127.5 128.6 127.3 128.2 132.3 133.1 132.1 132.0 132.6 132.7 134.4 16 Printing and publishing 27 4.54 155.3 154.3 156.3 156.2 157.0 159.0 158.4 158.9 155.4 158.1 162.0 163.0 163.9 163.8 17 Chemicals and products 28 8.05 127.1 126.4 128.2 129.0 127.9 128.0 128.5 130.5 130.9 131.1 132.1 132.0 131.7 18 Petroleum products 29 2.40 86.7 88.3 88.2 85.9 87.7 87.3 88.7 92.6 88.4 87.8 91.3 94.6 91.6 90.8 19 Rubber and plastic products 30 2.80 147.0 145.6 148.0 148.6 148.7 150.5 150.0 150.5 150.7 149.0 147.8 149.8 150.4 20 Leather and products 31 .53 70.9 72.2 72.7 72.3 71.4 72.1 69.9 67.5 67.0 65.4 64.6 62.1 62.0 Durable manufactures 21 Lumber and products 24 2.30 113.0 114.8 115.9 116.5 115.6 116.5 119.9 118.2 118.5 119.4 119.8 22 Furniture and fixtures 25 1.27 142.0 145.3 144.3 143.2 141.9 144.1 142.1 143.9 145.4 145.0 147.5 148.3 148.2 23 Clay, glass, stone products 32 2.72 114.8 115.1 116.2 116.2 115.6 115.2 118.2 120.2 118.8 120.0 121.5 120.5 121.7 24 Primary metals 33 5.33 80.6 79.0 82.0 80.3 83.1 83.6 81.7 84.9 80.7 77.4 78.1 75.7 72.5 73.3 25 Iron and steel 331.2 3.49 70.7 68.7 71.6 69.7 74.4 75.3 72.0 75.5 69.9 64.9 65.6 61.7 59.1 26 Fabricated metal products 34 6.46 107.8 107.3 107.8 107.5 108.4 107.9 108.8 109.3 109.4 108.5 107.6 107.3 107.0 106.5 27 Nonelectrical machinery 35 9.54 146.6 147.5 149.2 146.5 143.0 145.6 146.0 146.2 144.6 143.2 142.0 141.6 139.8 139.5 28 Electrical machinery 36 7.15 169.3 165.7 166.1 165.1 165.1 168.9 171.9 167.9 165.5 165.6 166.1 166.0 162.6 164.4 29 Transportation equipment 37 9.13 123.2 123.7 126.8 126.2 124.5 126.5 126.8 128.9 128.1 124.3 127.9 125.4 126.7 126.1 30 Motor vehicles and parts. ... 371 5.25 112.8 112.8 116.8 115.3 111.7 114.5 115.4 117.8 117.8 110.4 114.8 110.7 112.7 112.2 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 137.5 138.5 140.4 141.1 141.9 142.9 142.3 144.0 142.1 143.1 145.6 145.4 145.6 145.1 32 Instruments 38 2.66 139.9 141.1 141.8 139.4 139.8 140.7 140.6 141.1 141.8 142.5 142.5 141.3 141.7 139.8 33 Miscellaneous manufactures.. . 39 1.46 96.4 95.9 97.2 96.4 95.9 94.5 96.3 99.0 98.1 97.2 97.9 98.4 97.5 Utilities 34 Electric 44..1177 111199..55 111177..55 111166..77 112200..66 111199..33 111188..77 112244..44 119.9 111188..55 111199..88 112222..22 112211..22 112211..66 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 35 Products, total 517.5 773.4 769.0 778.7 777.9 772.2 782.8 783.3 792.9 786.3 777.2 789.1 783.0 778.5 772.8 36 Final 405.7 614.8 610.1 618.6 617.8 613.0 622.4 622.1 629.2 623.7 614.6 625.5 618.5 614.4 608.7 37 Consumer goods 272.7 364.8 361.7 366.2 365.6 363.8 370.5 373.6 375.0 373.9 370.5 379.5 376.7 373.7 371.7 38 Equipment 133.0 250.1 250.3 252.4 252.2 249.3 251.9 248.5 254.1 249.8 244.1 246.0 241.8 240.7 237.0 39 Intermediate 111.9 158.6 160.4 160.1 160.1 159.2 160.4 161.2 163.7 162.6 162.6 163.6 164.5 164.1 164.1 • 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ Mayr June Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,605 1,682 1,733 1,846 1,703 1,668 1,839 1,861 1,808 1,834 1,885 1,788 1,792 2 1-family 902 922 957 956 984 932 %3 1,060 1,033 1,043 1,139 1,092 1,121 3 2-or-more-family 703 759 777 890 719 736 876 801 775 791 746 696 671 4 Started 1,703 1,749 1,742 1,653 1,784 1,654 1,882 2,034 2,001 1,960 2,019 1,853 1,852 5 1-family 1,067 1,084 1,072 1,006 1,118 1,006 1,098 1,335 1,202 1,221 1,242 1,241 1,229 6 2-or-more-family 635 665 669 647 666 648 784 699 799 739 777 612 623 7 Under construction, end of period1 1,003 1,051 1,063 1,065 1,089 1,087 1,088 1,094 1,110 1,099 1,135 1,135 1,159 8 1-family 524 556 539 568 578 570 561 571 581 574 586 599 614 9 2-or-more-family 479 494 524 496 512 517 528 522 529 526 549 537 545 10 Completed 1,390 1,652 1,703 1,778 1,541 1,721 1,762 1,778 1,725 1,806 1,693 1,817 1,588 11 1-family 924 1,025 1,072 1,100 1,072 1,095 1,141 1,075 1,038 1,153 1,127 1,134 1,049 12 2-or-more-family 466 627 631 678 469 626 621 703 687 653 566 683 539 13 Mobile homes shipped 2% 2% 284 283 291 287 285 280 266 240 249 239 226 Merchant builder activity in 1-family units 14 Number sold 622 639 688 681 637 722 729 735 741 924' 884 780 703 15 Number for sale, end of period1 304 358 350 350 353 353 349 352 352 338' 337 340 343 PPrriiccee ((tthhoouussaannddss ooff ddoollllaarrss))11 MMeeddiiaann 1166 UUnniittss ssoolldd 75.5 80.0 84.3 84.6 85.4 87.2 87.9 86.6 89.7 88.7' 92.4 92.7 89.6 AAvveerraaggee 1177 UUnniittss ssoolldd 89.9 97.5 101.0 102.6 102.7 104.1 106.1 104.1 106.6 los.o' 110.3 116.0 111.1 EXISTING UNITS (1-family) 18 Number sold 2,719 2,868 3,217 3,480 3,530 3,450 3,520 3,300 3,270 3,200 3,570 3,450 3,390 Price of units sold (thousands of dollars)2 19 Median 69.8 72.3 75.4 75.9 75.2 74.9 75.5 77.1 77.4 79.8 80.2 83.2 82.6 20 Average 82.5 85.9 90.6 91.4 91.2 90.3 91.8 93.0 93.1 %.8 98.1 101.7 102.1 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 279,240 327,209 355,570 361,337 374,014 357,630 365,554 373,378 373,947 368,027 374,098 22 Private 228,527 271,973 292,792 2%,024 311,952 294,425 300,619 305,366 305,682 303,823 23 Residential 126,553 155,148 158,818 160,976 174,840 158,210 161,786 163,413 164,713 170,488 24 Nonresidential, total 101,974 116,825 133,974 135,048 137,112 136,215 138,833 141,953 140,%9 133,335 Buildings 25 Industrial 12,863 13,746 15,769 15,822 15,872 16,095 16,546 15,783 16,381 14,619 26 Commercial 35,789 48,100 59,626 60,994 60,770 61,185 63,863 65,222 63,494 59,915 27 Other 11,838 12,547 12,619 12,859 12,790 12,748 12,487 12,781 13,065 13,025 28 Public utilities and other 41,484 42,432 45,960 45,373 47,680 46,187 45,937 48,167 48,029 45,776 29 Public 50,715 55,232 62,777 65,312 62,063 63,205 64,935 68,013 68,264 69,159 70,275 30 Military 2,544 2,839 3,283 3,628 2,854 3,598 3,539 3,407 3,974 3,673 3,558 31 Highway 14,143 16,343 19,998 19,516 19,354 19,854 21,017 22,129 22,273 22,673 23,155 32 Conservation and development 4,820 4,654 4,952 5,255 4,946 5,090 4,958 5,614 4,372 4,598 4,943 33 Other 29,208 31,3% 34,544 36,913 34,909 34,663 35,421 36,863 37,645 38,215 38,619 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 16,000jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • October 1986 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (at annual rate) IIInnndddeeexxx llleeevvveeelll IIIttteeemmm JJJuuulllyyy 1985 1986 1986 111999888666 11998855 11998866 (((111999666777 JJuullyy JJuullyy === 111000000)))111 Sept. Dec. Mar/ June' Mar/ Apr. May June July CONSUMER PRICES2 1 All items 3.6 1.6 2.4 5.3 -1.9 1.5 -.4 -.3 .2 .5 .0 328.0 2 Food 2.1 3.4 2.1 5.9 -1.4 3.4 .1 .3 .4 .1 .9 320.1 3 Energy items 2.1 -16.2 -3.2 3.3 -34.2 -12.5 -6.5 -5.8 .3 2.3 -4.1 366.5 4 All items less food and energy 4.2 4.1 3.4 5.4 4.1 3.1 .4 .4 .1 .3 .4 326.9 5 Commodities 2.1 1.5 1.1 3.6 .3 -.5 -.1 -.1 -.1 .1 .2 262.0 6 Services 5.5 5.6 4.8 6.5 6.5 5.2 .6 .7 .2 .4 .4 397.7 PRODUCER PRICES 7 Finished goods .9 -2.3 -2.4 9.2 -12.5 .0 -1.0 -.6 .6 .0 -.4 288.0 8 Consumer foods -1.5 3.5 -2.9 16.0 -8.1 6.0 .1 .y 1.1 .0 1.9 280.7 9 Consumer energy -2.9 -36.2 -11.3 20.7 -66.9 -25.1 -12.0 -8.9' 2.7 -.6 -11.9 467.8 10 Other consumer goods 2.6 2.3 .0 4.4 2.5 1.7 .7 .2 .2 .0 .3 258.6 11 Capital equipment 2.1 1.9 -.9 5.6 .7 1.9 .2 .3 .1 .1 .2 306.4 12 Intermediate materials3 -.5 -4.5 -1.3 2.9 -11.8 -4.8 -1.2 -1.0 -.3 .0 -.7 310.5 13 Excluding energy .4 -.5 -.7 .0 -1.0 -1.3 .1 -.4' .0 .0 .2 304.2 Crude materials 14 Foods -12.1 .9 -20.6 47.0 -24.7 -.2 -.9 -3.2' 4.1 -.8' 3.4 233.6 15 Energy -4.8 -28.4 -5.9 -4.0 -51.3 -33.8 -7.3 -7.1' .2 -3.0 -2.8 538.7 16 Other -6.9 .8 -4.4 1.5 -.2 6.6 2.7 .y .2 1.1 .1 249.2 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds. rental equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1985 1986 AAccccoouunntt 11998833 11998844 11998855 Q2 Q3 Q4 Q1 Q2' GROSS NATIONAL PRODUCT 1 3,405.7 3,765.0 3,998.1 3,965.0 4,030.5 4,087.7 4,149.2 4,179.8 By source 2 Personal consumption expenditures 2,234.5 2,428.2 2,600.5 2,576.0 2,627.1 2,667.9 2,697.9 2,735.3 3 Durable goods 289.1 331.2 359.3 354.0 373.3 362.0 360.8 375.7 4 Nondurable goods 816.7 870.1 905.1 902.3 907.4 922.6 929.7 929.1 5 Services 1,128.7 1,227.0 1,336.1 1,319.7 1,346.4 1,383.2 1,407.4 1,430.5 6 Gross private domestic investment 502.3 662.1 661.1 667.1 657.4 669.5 708.3 684.7 7 509.4 598.0 650.0 648.0 654.3 672.6 664.4 672.2 8 356.9 416.5 458.2 459.2 459.8 474.0 459.2 456.5 9 Structures 124.0 139.3 154.8 156.1 155.0 157.2 154.6 140.3 10 Producers' durable equipment 232.8 277.3 303.4 303.1 304.7 316.8 304.6 316.1 11 Residential structures 152.5 181.4 191.8 188.8 194.5 198.6 205.3 215.7 1? Change in business inventories -7.1 64.1 11.1 19.1 3.1 -3.1 43.8 12.5 13 Nonfarm .4 56.6 12.2 10.4 3.2 16.7 41.2 9.2 14 Net exports of goods and services -6.1 -58.7 -78.9 -77.1 -83.7 -105.3 -93.7 -100.2 IS 352.5 382.7 369.8 370.0 362.3 368.2 374.8 367.9 16 Imports 358.7 441.4 448.6 447.1 446.0 473.6 468.5 468.1 17 Government purchases of goods and services 675.0 733.4 815.4 799.0 829.7 855.6 836.7 860.0 18 283.5 311.3 354.1 340.9 360.9 380.9 355.7 367.1 19 State and local 391.5 422.2 461.3 458.1 468.8 474.7 480.9 492.9 By major type of product ?0 3,412.8 3,700.9 3,987.0 33,,994455..99 4,027.4 44,,009900..88 44,,110055..44 44,,116677..33 71 1,396.1 1,576.7 1,630.2 1,622.4 1,642.8 1,644.1 1,669.0 1,663.2 7? Durable 573.3 675.0 700.2 693.1 710.3 709.1 710.6 710.4 73 822.7 901.7 930.0 929.3 932.5 935.0 958.4 952.8 74 1,682.5 1,813.1 1,959.8 1,935.4 1,971.9 2,025.5 2,057.7 2,090.5 25 Structures 327.1 375.1 408.1 407.2 415.9 418.1 422.6 426.2 76 Change in business inventories -7.1 64.1 11.1 19.1 3.1 -3.1 43.8 12.5 77 Durable goods -1.0 39.2 6.6 2.3 -2.7 9.5 28.6 1.8 28 Nondurable goods -6.1 24.9 4.5 16.7 5.8 -12.7 15.3 10.7 29 MEMO: Total GNP in 1982 dollars 3,279.1 3,489.9 3,585.2 3,567.6 3,603.8 3,622.3 3,655.9 3,661.5 NATIONAL INCOME 30 2,719.5 3,032.0 3,222.3 3,201.4 3,243.4 3,287.3 3,340.7 3,379.5 31 Compensation of employees 2,020.7 2,214.7 2,368.2 2,352.1 2,380.9 2,423.6 2,461.5 2,480.1 37 Wages and salaries 1,676.2 1,837.0 1,965.8 1,952.2 1,976.0 2,012.8 2,044.1 2,058.8 33 Government and government enterprises 324.3 346.2 372.2 368.6 374.2 381.6 387.2 392.5 34 Other 1,352.3 1,490.6 1,593.9 1,583.6 1,601.8 1,631.1 1,656.8 1,666.3 35 Supplement to wages and salaries 344.5 377.7 402.4 399.8 404.9 410.9 417.4 421.3 36 Employer contributions for social insurance 170.9 193.1 205.5 204.5 206.1 209.1 212.9 214.1 37 Other labor income 173.6 184.5 196.9 195.3 198.8 201.7 204.5 207.3 38 190.9 236.9 254.4 255.5 249.3 262.1 265.3 290.7 39 Business and professional1 178.4 205.3 225.2 222.5 227.7 232.7 240.9 249.8 40 Farm1 12.4 31.5 29.2 33.0 21.6 29.4 24.4 40.9 41 Rental income of persons2 13.2 8.3 7.6 8.1 7.3 8.3 12.8 16.6 47 Corporate profits1 213.7 264.7 280.7 274.3 296.3 285.6 296.4 291.2 43 Profits before tax3 207.6 235.7 223.2 213.8 229.2 235.8 224.3 231.9 44 Inventory valuation adjustment -10.9 -5.5 -.6 1.6 6.1 -9.4 16.5 7.9 45 Capital consumption adjustment 17.0 34.5 58.1 58.9 61.0 59.2 55.6 51.4 46 Net interest 281.0 307.4 311.4 311.4 309.7 307.6 304.9 300.8 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • October 1986 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. Q2 Q3 Q4 Ql PERSONAL INCOME AND SAVING 1 Total personal income 2,838.6 3,110.2 3,314.5 3,298.7 3,323.2 3,382.9 3,432.6 2 Wage and salary disbursements 1,676.6 1.836.8 1,966.1 1,953.3 1,976.0 2,012.8 2,044.1 3 Commodity-producing industries 523.1 577.8 607.7 605.0 608.3 617.7 622.0 4 Manufacturing 397.4 439.1 460.1 457.3 460.7 467.5 470.5 5 Distributive industries 404.2 442.2 469.8 467.7 472.4 478.9 485.2 6 Service industries 425.1 470.6 516.4 511.0 521.1 534.6 549.6 7 Government and government enterprises 324.3 346.2 372.2 369.6 374.2 381.6 387.2 8 Other labor income 173.6 184.5 196.9 195.3 198.8 201.7 204.5 9 Proprietors' income1 190.9 236.9 254.4 255.5 249.3 262.1 265.3 10 Business and professional1 178.4 205.3 225.2 222.5 227.7 232.7 240.9 11 Farm1 12.4 31.5 29.2 33.0 21.6 29.4 24.4 12 Rental income of persons2 13.2 8.3 7.6 8.1 7.3 8.3 12.1 13 Dividends 68.7 74.7 76.4 76.4 76.3 76.7 79. 14 Personal interest income 393.1 446.9 476.2 475.3 475.2 480.6 480.1 15 Transfer payments 442.6 455.6 487.1 484.1 491.1 493.6 504.7 16 Old-age survivors, disability, and health insurance benefits. 221.7 235.7 253.4 251.1 256.5 256.8 263.2 17 LESS: Personal contributions for social insurance 120.1 133.5 150.2 149.4 150.7 152.9 158.6 18 EQUALS: Personal income 2.838.6 3,110.2 3,314.5 3,298.7 3,323.2 3,382.9 3,432.6 19 LESS: Personal tax and nontax payments 410.5 439.6 486.5 456.4 491.2 500.7 497.5 20 EQUALS: Disposable personal income 2,428.1 2,670.6 2,828.0 2,842.3 2,832.0 2,882.2 2,935.1 21 LESS: Personal outlays 2,297.4 2.501.9 2,684.7 2,658.7 2,712.4 2,756.4 2,789.4 22 EQUALS: Personal saving 130.6 168.7 143.3 183.6 119.6 125.8 145.6 MEMO Per capita (1982 dollars) 23 Gross national product 13.963.7 14,721.1 14,980.9 14,928.1 15,040.5 15,079.9 15,188.0 24 Personal consumption expenditures 9,138.5 9,475.4 9,713.0 9,673.8 9,774.4 9,790.3 9,857. 25 Disposable personal income 9,930.0 10,421.0 10,563.0 10,674.0 10,537.0 10,577.0 10,723.0 26 Saving rate (percent) 5.4 6.3 5.1 6.5 4.2 4.4 5.0 GROSS SAVING 27 Gross saving. 463.6 573.3 551.5 566.8 541.7 524.1 583.2 28 Gross private saving 592.2 674.8 687.8 722.4 679.6 679.2 714.1 29 Personal saving 130.6 168.7 143.3 183.6 119.6 125.8 145.6 30 Undistributed corporate profits1 65.0 91.0 107.3 105.8 118.8 106.8 122.1 31 Corporate inventory valuation adjustment. -10.9 -5.5 -.6 1.6 6.1 -9.4 16.5 Capital consumption allowances 32 Corporate 242.7 253.9 268.2 266.6 270.1 273.3 275.3 3 3 3 4 N W o a n g c e o a r c p c o r r u a a te ls less disbursements 153. . 9 0 161. . 2 0 169. . 0 0 166. . 5 0 171. . 2 0 173. . 4 0 171. . 0 35 Government surplus, or deficit (-), national income and product accounts -128.6 -101.5 -136.3 -155.6 -138.0 -155.1 -131.6 36 Federal -176.0 -170.0 -198.0 -214 -197.5 -217.6 -201.6 37 State and local 47.5 68.5 61.7 59.2 59.5 62.5 70.0 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 39 Gross investment 468.8 571.4 545.9 555.0 536.2 525.7 579.6 40 Gross private domestic 502.3 662.1 661.1 667.1 657.4 669.5 708.3 41 Net foreign -33.5 -90.7 -115.2 -112.0 -121.2 -143.8 -128.6 42 Statistical discrepancy. 5.2 -1.9 -3.6 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1985 1986 IItteemm ccrreeddiittss oorr ddeebbiittss 11998833 11998844 11998855 Q1 Q2 Q3 Q4 Q1P 1 Balance on current account -46,605 -106,466 -117,676 -26,112 -29,417 --2288,,445555 --3333,,669955 --3333,,666688 -23,529 -30,363 --3322,,227755 --3311,,551100 --3300,,669955 3 Merchandise trade balance2 -67,080 -112,522 -124,439 -25,045 -30,367 --3311,,667755 --3377,,335522 --3366,,558855 4 Merchandise exports 201,820 219,900 214,424 55,324 53,875 5522,,449988 5522,,772277 5533,,554488 5 Merchandise imports -268,900 -332,422 -338,863 -80,369 -84,242 --8844,,117733 --9900,,007799 --9900,,113333 6 Military transactions, net -370 -1,827 -2,917 -246 -729 --661199 --11,,332222 --994455 7 Investment income, net3 24,841 18,751 25,187 2,219 5,449 88,,226622 99,,225555 66,,882200 8 Other service transactions, net 5,484 1,288 -524 -240 312 --442222 --3322 --7733 9 Remittances, pensions, and other transfers -3,194 -3,621 -3,787 -1,056 -881 -914 -937 -968 10 U.S. government grants (excluding military) -6,286 -8,536 -11,196 -2,224 -2,577 -3,087 -3,307 -2,063 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,005 -5,523 -2,824 -807 -1,055 -422 -540 -146 12 Change in U.S. official reserve assets (increase, -) -1,196 -3,130 -3,858 -233 -356 -121 -3,147 -115 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -66 -979 -897 -264 -180 -264 -189 -274 15 Reserve position in International Monetary Fund -4,434 -995 908 281 72 388 168 344 16 Foreign currencies 3,304 -1,156 -3,869 -250 -248 -245 -3,126 -185 17 Change in U.S. private assets abroad (increase, -)3 -43,821 -14,987 -25,755 530 -1,382 -5,324 -19,579 -8,416 18 Bank-reported claims -29,928 -11,127 -691 335 3,450 4,009 -8,485 7,842 19 Nonbank-reported claims -6,513 5,081 1,665 1,058 1,706 -1,517 418 n.a. 20 U.S. purchase of foreign securities, net -7,007 -5,082 -7,977 -2,577 -2,325 -1,664 -1,411 -6,138 21 U.S. direct investments abroad, net3 -373 -3,859 -18,752 1,714 -4,213 -6,152 -10,101 -10,120 22 Change in foreign official assets in the United States (increase, +) 5,968 3,037 -1,324 11,066 8,486 2,577 -1,322 2,510 23 U.S. Treasury securities 6,972 4,690 -546 7,174 8,685 -81 -1,976 -3,256 24 Other U.S. government obligations -476 13 -295 -306 136 46 -171 -177 25 Other U.S. government liabilities4 725 436 483 -445 606 58 263 192 26 Other U.S. liabilities reported by U.S. banks 545 555 522 -3,025 -107 2,932 722 -1,124 27 Other foreign official assets5 -1,798 -2,657 -1,488 -116 -834 -378 -160 363 28 Change in foreign private assets in the United States (increase, +)3 79,528 99,730 128,431 25,313 16,872 33,088 53,158 36,974 29 U.S. bank-reported liabilities 50,342 33,849 40,387 12,078 606 7,276 20,427 8,582 30 U.S. nonbank-reported liabilities -118 4,704 -1,172 -2,156 -1,837 589 2,232 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 8,721 23,059 20,500 2,217 5,123 7,484 5,676 8,311 32 Foreign purchases of other U.S. securities, net 8,636 12,759 50,859 9,567 7,223 11,628 22,441 18,793 33 Foreign direct investments in the United States, net3 11,947 25,359 17,857 3,607 5,757 6,111 2,382 1,288 34 Allocation of SDRs 0 0 0 00 00 00 00 00 35 Discrepancy 11,130 27,338 23,006 1122,,337755 66,,885522 --11,,334433 55,,112255 22,,886611 11,,009944 --11,,117744 --33,,668877 33,,777711 11,,553355 37 Statistical discrepancy in recorded data before seasonal adjustment 11,130 27,338 23,006 1111,,228822 88,,002266 22,,334444 11,,335544 11,,332266 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -1,196 -3,130 -3,858 -233 -356 -121 -3.147 -115 39 Foreign official assets in the United States (increase, +) 5,243 2,601 -1,807 -10,621 7,880 2,519 1,585 2,318 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) -8,283 -4,304 -6,599 -1,923 -1,843 -1,831 -1,002 1,395 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 194 190 64 10 12 15 28 20 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 • October 1986 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are not seasonally adjusted. 1985 1986 IItteemm 11998833 11998844 11998855 Dec. Jan. Feb. Mar. Apr. May June 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 200,486 217,865 213,146 16,994 17,006 17,735 18,913 17,965 17,431 19,070 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 258,048 325,726 345,276 30,728 32,005 28,895 31,972 28,762 30,272 31,764 3 Trade balance -57,562 107,861 -132,129 -13,734 -14,999 -11,160 -13,059 -10,797 -12,842 -12,694 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 1986 TTyyppee 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July 1 Total 33,747 34,934 43,191 43,673 45,505 44,919 46,491 45,260 46,635 47,430 2 Gold stock, including Exchange Stabilization Fund1 11,121 11,096 11,090 11,090 11,090 11,090 11,089 11,085 11,084 11,084 3 Special drawing rights2-3 5,025 5,641 7,293 7,441 7,960 7,839 8,098 8,066 8,213 8,085 4 Reserve position in International Monetary Fund2 11,312 11,541 11,952 11,824 12,172 12,025 12,242 11,789 12,109 12,114 5 Foreign currencies4 6,289 6,656 12,856 13,318 14,283 13,965 15,062 14,320 15,229 16,147 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 1986 AAsssseettss 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July 1 Deposits 190 267 480 256 276 273 325 253 354 233 Assets held in custody 2 U.S. Treasury securities1 117,670 118,000 121,004 121,995 124,905 127,611 132,017 136,762 137,820 144,527 3 Earmarked gold2 14,414 14,242 14,245 14,193 14,172 14,167 14,160 14,145 14,128 14,131 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 Dec. Jan/ Feb/ Mar/ Apr/ May June? All foreign countries 1 Total, all currencies 469,712 477,090 453,656 458,012 448,847 449,561 459,885 475,158 459,727 467,665 ? Claims on United States 91,805 115,542 113,393 119,723 117,010 113,840 118,524 122,487 117,627 117,698 Parent bank 61,666 82,026 78,109 87,201 84,466 81,038 85,164 88,975 83,404 82,532 4 5 N Ot o h n e b r a b n a k n s k 2 s in United States2 1 33,516 2 1 1 3 , , 6 6 2 6 0 4 1 19 3 , , 4 0 4 7 6 6 2 1 0 1 , , 6 9 3 1 1 3 2 1 1 1 , , 0 7 6 4 2 0 2 1 0 2 , , 3 9 8 7 9 1 2 1 0 2 , , 7 8 0 0 9 3 2 1 1 3 , , 0 1 2 9 7 6 2 1 1 4 , , 1 0 6 0 4 2 6 Claims on foreigners 358,493 342,689 320,162 315,692 309,385 311,419 316,493 326,013 316,151 324,125 7 Other branches of parent bank 91,168 96,004 95,184 91,399 88,393 88,457 91,586 95,238 90,447 98,457 8 Banks 133,752 117,668 100,397 102,950 100,982 100,362 101,743 107,141 103,851 105,567 9 Public borrowers 24,131 24,517 23,343 23,395 23,439 23,776 23,770 23,645 23,823 23,273 10 Nonbank foreigners 109,442 107,785 101,238 97,948 96,571 98,824 99,394 99,989 98,030 96,828 11 Other assets 19,414 18,859 20,101 22,597 22,452 24,302 24,868 26,658 25,949 25,842 12 Total payable in U.S. dollars 361,982 371,508 350,636 336,288 322,948 316,461 324,122 331,506 322,710 327,695 n Claims on United States 90,085 113,436 111,426 116,655 113,937 110,477 114,965 118,629 113,736 113,405 14 Parent bank 61,010 80,909 77,229 85,971 83,320 79,703 83,841 87,597 82,110 81,040 15 Other banks in United States2 13,500 12,473 11,245 11,077 12,272 11,902 12,283 12,870 16 Nonbanks2 20,697 18,211 19,372 19,697 18,852 19,130 19,343 19,495 17 Claims on foreigners 259,871 247,406 228,600 209,917 199,497 195,816 199,279 202,498 198,008 203,843 18 Other branches of parent bank 73,537 78,431 78,746 72,689 68,748 67,630 70,910 73,109 69,627 75,934 19 Banks 106,447 93,332 76,940 71,738 66,284 63,987 63,849 66,006 64,955 66,670 20 Public borrowers 18,413 17,890 17,626 17,169 17,044 17,226 17,219 16,898 17,180 16,492 21 Nonbank foreigners 61,474 60,977 55,288 48,321 47,421 46,973 47,301 46,485 46,246 44,747 22 Other assets 12,026 10,666 10,610 9,716 9,514 10,168 9,878 10,379 10,966 10,447 United Kingdom 23 Total, all currencies 161,067 158,732 144,385 148,599 150,835 148,788 150,975 155,867 152,075 151,593 24 Claims on United States 27,354 34,433 27,675 33,157 36,319 33,482 33,990 34,234 34,231 31,364 25 Parent bank 23,017 29,111 21,862 26,970 29,837 27,350 27,881 28,058 28,001 25,106 26 Other banks in United States2 1 _ 1,429 1,106 1,173 1,064 1,129 1,386 1,312 1,366 27 Nonbanks2 4,384 5,081 5,309 5,068 4,980 4,790 4,918 4,892 28 Claims on foreigners 127,734 119,280 111,828 110,217 109,290 109,802 111,468 115,485 111,823 113,739 29 Other branches of parent bank 37,000 36,565 37,953 31,576 30,394 30,218 31,250 32,516 31,984 34,670 30 Banks 50,767 43,352 37,443 39,250 39,257 39,777 38,929 41,593 39,222 39,430 31 Public borrowers 6,240 5,898 5,334 5,644 5,949 6,113 5,833 5,642 5,427 5,236 32 Nonbank foreigners 33,727 33,465 31,098 33,747 33,150 33,694 35,456 35,734 35,190 34,403 33 Other assets 5,979 5,019 4,882 5,225 5,226 5,504 5,517 6,148 6,021 6,490 34 Total payable in U.S. dollars 123,740 126,012 112,809 108,626 108,566 105,202 105,111 107,359 106,712 104,010 35 Claims on United States 26,761 33,756 26,868 32,092 35,303 32,384 32,746 32,959 32,841 29,944 36 Parent bank 22,756 28,756 21,495 26,568 29,470 26,943 27,393 27,629 27,584 24,693 3 3 7 8 O N t o h n e b r a b n a k n s k 2 s in United States2 1 A nnC 4 1 , , 0 3 1 6 0 3 4 1 , , 5 0 1 0 9 5 4 1 , , 7 0 4 8 4 9 4,4 9 6 7 3 8 4 1 , , 3 0 2 27 6 4 1 , , 1 2 0 2 5 5 4 1 , , 1 1 0 5 5 2 4 1 , , 1 1 4 0 8 3 39 Claims on foreigners 92,228 88,917 82,945 73,475 70,345 69,597 69,433 71,058 70,437 70,697 40 Other branches of parent bank 31,648 31,838 33,607 26,011 25,083 24,474 25,250 26,224 26,265 27,559 41 Banks 36,717 32,188 26,805 26,139 24,013 23,725 22,106 23,310 23,134 22,825 42 Public borrowers 4,329 4,194 4,030 3,999 4,252 4,370 4,223 4,012 3,937 3,777 43 Nonbank foreigners 19,534 20,697 18,503 17,326 16,997 17,028 17,854 17,512 17,101 16,536 44 Other assets 4,751 3,339 2,996 3,059 2,918 3,221 2,932 3,342 3,434 3,369 Bahamas and Caymans 45 Total, all currencies 145,156 152,083 146,811 142,055 131,731 130,154 136,529 137,272 132,122 138,944 46 Claims on United States 59,403 75,309 77,296 74,874 68,789 68,412 71,735 72,755 68,710 70,751 47 Parent bank 34,653 48,720 49,449 50,553 44,642 43,891 46,813 47,613 42,868 44,132 48 Other banks in United States2 1 ncn 11,544 11,223 10,023 9,897 10,838 10,456 10,906 11,692 49 Nonbanks2 16,303 13,098 14,124 14,624 14,084 14,686 14,936 14,927 50 Claims on foreigners 81,450 72,868 65,598 63,894 59,233 57,724 60,564 60,301 59,106 63,955 51 Other branches of parent bank 18,720 20,626 17,661 19,042 16,468 15,872 19,131 18,286 15,703 20,636 52 Banks 42,699 36,842 30,246 28,182 26,009 25,438 25,129 25,809 26,290 27,000 53 Public borrowers 6,413 6,093 6,089 6,458 6,409 6,286 6,292 6,326 6,694 6,399 54 Nonbank foreigners. 13,618 12,592 11,602 10,212 10,347 10,128 10,012 9,880 10,419 9,920 55 Other assets 4,303 3,906 3,917 3,287 3,709 4,018 4,230 4,216 4,306 4,238 56 Total payable in U.S. dollars 139,605 145,641 141,562 136,794 126,226 124,216 130,438 130,530 125,681 132,354 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 • October 1986 3.14 Continued 1985 1986 Dec. Jan. Feb.' Mar.' Apr.' May June All foreign countries 57 Total, all currencies 469,712 477,090 453,656 458,012 448,847' 449,561 459,885 475,158 459,727 467,665 58 Negotiable CDs3 n.a. n.a. 37,725 34,607 34,597 33,458 36,066 33,229 35,006 34,683 59 To United States 179,015 188,070 147,583 155,538'" 142,253' 138,228 140,381 150,366 144,213 149,843 60 Parent bank 75,621 81,261 78,739 83,914' 76,805 73,465 74,952 81,594 77,484 85,132 61 Other banks in United States 33,405 29,453 18,409 16,894 14,724 13,984 15,724 14,270 14,347 16,158 62 Nonbanks 69,989 77,356 50,435 54,730 50,724' 50,779 49,705 54,502 52,382 48,553 63 To foreigners 270,853 269,685 247,907 245,942 250,855' 255,533 261,783 269,838 258,728 262,322 64 Other branches of parent bank 90,191 90,615 93,909 89,529 86,36C 86,358 90,921 93,768 90,228 97,696 65 Banks 96,860 92,889 78,203 76,814 84,167' 83,843 84,820 89,608 83,251 80,982 66 Official institutions 19,614 18,896 20,281 19,523 19,939' 21,889 20,688 20,744 20,792 20,480 67 Nonbank foreigners 64,188 68,845 55,514 60,076 60,389' 63,443 65,354 65,718 64,457 63,164 68 Other liabilities 19,844 19,335 20,441 21,925' 21,142' 22,342 21,655 21,725 21,780 20,817 69 Total payable in U.S. dollars 379,270 388,291 367,145 353,470 338,498' 332,029 341,550 347,585 340,111 346,540 70 Negotiable CDs3 n.a. n.a. 35,227 31,063 31,182 30,202 32,418 29,912 31,513 31,076 71 To United States 175,528 184,305 143,571 150,161' 136,854' 132,215 134,184 143,577 137,666 142,737 72 Parent bank 73,295 79,035 76,254 80,888' 73,897 70,208 71,616 78,061 73,950 81,073 73 Other banks in United States 33,040 28,936 17,935 16,264 14,011 13,288 14,933 13,477 13,575 15,363 74 Nonbanks 69,193 76,334 49,382 53,009 48,946' 48,719 47,635 52,039 50,141 46,301 75 To foreigners 192,510 194,139 178,260 163,361 161,356' 160,810 166,349 166,253 162,472 164,025 76 Other branches of parent bank 72,921 73,522 77,770 70,943 67,183' 65,947 70,465 71,841 69,871 75,784 77 Banks 57,463 57,022 45,123 37,323 38,478' 36,699 37,490 37,240 36,294 33,719 78 Official institutions 15,055 13,855 15,773 14,354 14,800' 15,853 14,719 14,746 14,151 13,873 79 Nonbank foreigners 47,071 51,260 39,594 40,741 40,895' 42,311 43,675 42,426 42,156 40,649 80 Other liabilities 11,232 9,847 10,087 8,885' 9,106' 8,802 8,599 7,843 8,460 8,702 United Kingdom 81 Total, all currencies 161,067 158,732 144,385 148,599 150,835' 148,788 150,975 155,867 152,075 151,593 82 Negotiable CDs3 n.a. n.a. 34,413 31,260 30,788 29,419 32,217 29,898 31,734 31,396 83 To United States 53,954 55,799 25,250 29,422 29,901 26,705 22,945 28,450 27,505 26,297 84 Parent bank 13,091 14,021 14,651 19,330 19,845 16,798 13,724 17,231 16,624 15,901 85 Other banks in United States 12,205 11,328 3,125 2,974 2,264 1,950 2,793 1,966 2,175 2,027 86 Nonbanks 28,658 30,450 7,474 7,118 7,792 7,957 6,428 9,253 8,706 8,369 87 To foreigners 99,567 95,847 77,424 78,525 80,724 82,666 86,053 87,773 83,067 84,323 88 Other branches of parent bank 18,361 19,038 21,631 23,389 21,858 21,954 24,733 25,379 23,838 27,008 89 Banks 44,020 41,624 30,436 28,581 32,326 32,088 33,301 34,294 31,584 30,487 90 Official institutions 11,504 10,151 10,154 9,676 10,093 10,956 9,750 9,757 9,548 9,543 91 Nonbank foreigners 25,682 25,034 15,203 16,879 16,447 17,668 18,269 18,343 18,097 17,285 92 Other liabilities 7,546 7,086 7,298 9,392 9,422 9,998 9,760 9,746 9,769 9,577 93 Total payable in U.S. dollars 130,261 131,167 117,497 112,697 112,073 108,332 108,420 110,376 109,335 108,374 94 Negotiable CDs3 n.a. n.a. 33,070 29,337 28,845 27,655 30,042 27,978 29,542 29,135 95 To United States 53,029 54,691 24,105 27,756 28,150 24,967 21,070 26,411 25,490 24,241 % Parent bank 12,814 13,839 14,339 18,956 19,461 16,528 13,405 16,867 16,233 15,340 97 Other banks in United States 12,026 11,044 2,980 2,826 2,090 1,820 2,596 1,774 1,944 1,847 98 Nonbanks 28,189 29,808 6,786 5,974 6,599 6,619 5,069 7,770 7,313 7,054 99 To foreigners 73,477 73,279 56,923 51,980 50,762 51,686 53,219 52,262 50,441 51,017 100 Other branches of parent bank 14,300 15,403 18,294 18,493 16,614 16,829 19,068 19,297 18,043 20,434 101 Banks 28,810 29,320 18,356 14,344 14,872 14,457 14,731 14,125 14,114 13,055 10? Official institutions 9,668 8,279 8,871 7,661 8,242 8,747 7,839 7,449 6,953 6,914 103 Nonbank foreigners 20,699 20,277 11,402 11,482 11,034 11,653 11,581 11,391 11,331 10,614 104 Other liabilities 3,755 3,197 3,399 3,624 4,316 4,024 4,089 3,725 3,862 3,981 Bahamas and Caymans 105 Total, all currencies 145,156 152,083 146,811 142,055 131,731' 130,154 136,529 137,272 132,122 138,944 106 Negotiable CDs3 n.a. n.a. 615 610 1,076 1,237 1,132 629 634 567 107 To United States 104,425 111,299 102,955 103,548 91,989' 91,773 97,666 98,621 94,128 98,907 108 Parent bank 47,081 50,980 47,162 44,546 38,850 39,381 43,834 43,662 40,757 47,014 109 Other banks in United States 18,466 16,057 13,938 12,778 11,185 10,854 11,604 11,014 10,738 12,878 110 Nonbanks 38,878 44,262 41,855 46,224 41,954' 41,538 42,228 43,945 42,633 39,015 111 To foreigners 38,274 38,445 40,320 35,053 36,528' 34,993 35,666 35,901 35,139 37,330 117 Other branches of parent bank 15,796 14,936 16,782 14,075 14,764' 13,081 13,198 14,077 13,731 15,882 113 Banks 10,166 11,876 12,405 10,669 11,117' 10,851 10,360 10,788 10,318 9,981 114 Official institutions 1,967 1,919 2,054 1,776 1,509' 1,741 1,759 2,176 2,144 2,427 115 Nonbank foreigners 10,345 11,274 9,079 8,533 9,138' 9,320 10,349 8,860 8,946 9,040 116 Other liabilities 2,457 2,339 2,921 2,579' 2,138' 2,151 2,065 2,121 2,221 2,140 117 Total payable in U.S. dollars 141,908 148,278 143,582 138,322 127,840' 125,861 132,308 132,966 127,918 134,606 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 11998844 Dec/ Jan/ Feb/ Mar/ Apr/ May June? 1 Total1 177,950 180,552 178,337 183,314 179,856 180,525 188,908 190,644 194,283 By type 2 Liabilities reported by banks in the United States2 25,534 26,089 26,734 28,303 26,506 25,479 27,029 24,852 25,822 3 U.S. Treasury bills and certificates3 54,341 59,976 53,252 53,294 54,420 55,933 59,547 63,614 65,292 U.S. Treasury bonds and notes 4 Marketable 68,514 69,019 77,108 77,470 78,089 78,483 82,345 82,571 84,178 5 Nonmarketable4 7,250 5,800 3,550 3,550 3,150 2,750 2,300 1,800 1,800 6 U.S. securities other than U.S. Treasury securities5 22,311 19,668 17,693 17,697 17,691 17,880 17,687 17,807 17,191 By area 7 Western Europe1 67,645 69,776 74,418 74,440 72,891 72,435 76,353 76,414 79,498 8 Canada 2,438 1,528 1,314 1,118 1,762 1,445 1,711 1,502 1,529 9 Latin America and Caribbean 6,248 8,561 11,141 11,516 10,234 10,425 10,785 10,608 11,063 10 Asia 92,572 93,954 86,441 88,534 89,719 90,869 94,646 96,954 97,207 11 Africa 958 1,264 1,824 1,897 1,786 1,846 1,833 1,718 1,717 12 Other countries6 8,089 5,469 3,199 2,809 3,464 3,505 3,580 3,448 3,269 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 1986 IItteemm 11998822 11998833 11998844 June Sept. Dec/ Mar. 1 Banks' own liabilities 4,844 5,219 8,586 10,290r 12,982r 15,368 21,320 2 Banks' own claims 7,707 7,231 11,984 14,179 15,233 16,161 19,634 3 Deposits 4,251 2,731 4,998 7,308 8,540 8,304 11,318 4 Other claims 3,456 4,501 6,986 6,871 6,693 7,857 8,316 5 Claims of banks' domestic customers' 676 1,059 569 243 328 580 1,426 1. Assets owned by customers of the reporting bank located in the United NOTE. Data on claims exclude foreign currencies held by U.S. monetary States that represent claims on foreigners held by reporting banks for the accounts authorities, of their domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • October 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 Dec. Jan. Feb. Mar. Apr. May June? 1 All foreigners 307,056 369,607 407,306 435,368' 431,036' 436,528' 440,518 443,351 444,420 451,737 2 Banks' own liabilities 227,089 279,087 306,898 341,070' 335,126' 340,076' 344,422 346,453 342,063 346,136 3 Demand deposits 15,889 17,470 19,571 21,107 19,648 19,659 20,195 19,751 19,651 21,332 4 Time deposits1 68,797 90,632 110,413 117,278' 114,710' 116,964' 116,418 114,210 114,143 115,346 5 Other2 23,184 25,874 26,268 29,305' 30,375' 31,144' 32,125 33,219 31,597 31,712 6 Own foreign offices3 119,219 145,111 150,646 173,381' 170,393' 172,309 175,685 179,273 176,672 177,746 7 Banks' custody liabilities4 79,967 90,520 100,408 94,298 95,91c 96,452' 96,096 96,898 102,357 105,601 8 U.S. Treasury bills and certificates5 55,628 68,669 76,368 68,785 69,801 7722,,663311 7722,,771144 7744,,663311 8800,,119922 8800,,772255 9 Other negotiable and readily transferable instruments6 20,636 17,467 18,747 17,964 18,016' 15,597' 15,329 13,776 13,917 15,231 10 Other 3,702 4,385 5,293 7,549 8,093' 8,223' 8,053 8,491 8,249 9,645 11 Nonmonetary international and regional organizations7 4,922 5,957 4,454 5,821' 7,487 9,867 5,223 3,420 4,503 3,427 12 Banks' own liabilities 1,909 4,632 2,014 2,621' 2,714 4,326 1,404 1,674 2,372 877 13 Demand deposits 106 297 254 85 % 184 102 138 99 79 14 Time deposits1 1,664 3,584 1,267 2,067 2,369 3,892 391 681 1,093 537 15 Other2 139 750 493 469' 250 250 911 856 1,179 262 16 Banks' custody liabilities4 3,013 1,325 2,440 3,200 4,773 5,540 3,820 1,746 2,131 2,550 17 U.S. Treasury bills and certificates 1,621 463 916 1,736 3,216 4,219 2,311 768 1,282 1,619 18 Other negotiable and readily transferable instruments6 1,392 862 1,524 1,464 1,556 1,322 1,508 970 849 918 19 Other 0 0 0 0 1 0 0 7 0 13 20 Official institutions8 71,647 79,876 86,065 79,985' 81,597' 80,926' 81,405 86,237 88,467 91,115 21 Banks' own liabilities 16,640 19,427 19,039 20,835' 22,590 22,056 21,719 23,588 21,959 22,797 22 Demand deposits 1,899 1,837 1,823 2,077 1,638 1,602 1,917 1,832 1,810 2,131 23 Time deposits1 5,528 7,318 9,374 10,949' 10,69C 10,334' 10,299 9,368 9,791 10,257 24 Other2 9,212 10,272 7,842 7,809' 10,262' 10,121' 9,503 12,389 10,358 10,409 25 Banks' custody liabilities4 55,008 60,448 67,026 59,150' 59,007' 58.87C 59,686 62,648 66,508 68,317 26 U.S. Treasury bills and certificates5 46,658 54,341 59,976 53,252 53,294 54,420 55,933 5599,,554477 6633,,661144 6655,,229922 27 Other negotiable and readily transferable instruments6 8,321 6,082 6,966 5,824' 5,596' 4,102' 3,585 2,916 2,754 2,808 28 Other 28 25 84 75 117 348 168 185 139 217 29 Banks9 185,881 226,887 248,893 275,311' 266,589' 269,832' 278,967 278,066 275,109 279,589 30 Banks' own liabilities 169,449 205,347 225,368 252,723' 243,830' 247,132' 255,921 255,015 251,203 256,072 31 Unaffiliated foreign banks 50,230 60,236 74,722 79,341' 73,436' 74,823' 80,236 75,742 74,532 78,326 32 Demand deposits 8,675 8,759 10,556 10,271 9,792 9,659 9,692 8,689 9,037 10,277 33 Time deposits1 28,386 37,439 47,095 49,51C 45,121' 45,942' 50,194 48,485 46,868 48,469 34 Other2 13,169 14,038 17,071 19,561' 18,523' 19,222' 20,350 18,568 18,627 19,580 35 Own foreign offices3 119,219 145,111 150,646 173,381' 170,393' 172,309 175,685 179,273 176,671 177,746 36 Banks' custody liabilities4 16,432 21,540 23,525 22,588' 22,76C 22.70C 23,046 23,051 23,906 23,517 37 U.S. Treasury bills and certificates 5,809 10,178 11,448 9,554 9,223 9,501 9,869 99,,881155 1100,,884411 99,,553366 38 Other negotiable and readily transferable instruments6 7,857 7,485 7,236 6,040' 6,006 5,876 5,752 5,423 5,451 5,448 39 Other 2,766 3,877 4,841 6,994 7,531' 7,323 7,426 7,813 7,614 8,533 40 Other foreigners 44,606 56,887 67,894 74,251 75,362 75,902 74,923 75,629 76,341 77,606 41 Banks' own liabilities 39,092 49,680 60,477 64,892 65,992 66,561 65,379 66,176 66,529 66,389 42 Demand deposits 5,209 6,577 6,938 8,673 8,122 8,214 8,484 9,093 8,705 8,845 43 Time deposits 33,219 42,290 52,678 54,752 56,530 56,796 55,534 55,677 56,391 56,082 44 Other2 664 813 861 1,467 1,340 1,550 1,361 1,406 1,433 1,461 45 Banks' custody liabilities4 5,514 7,207 7,417 9,359 9,370 9,341 9,544 9,453 9,811 11,217 46 U.S. Treasury bills and certificates 1,540 3,686 4,029 4,243 4,068 4,491 4,601 4,501 4,454 44,,227788 47 Other negotiable and readily transferable instruments6 3,065 3,038 3,021 4,636 4,858 4,297 4,483 4,465 4,862 6,057 48 Other 908 483 367 480 444 553 459 487 495 881 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 14,307 10,346 10,476 9,845 9,628 7,386 6,603 6,286 6,269 5,543 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 Dec. Jan. Feb. Mar. Apr. May June? 1 Total 307,056 369,607 407,306 435,368' 431,036' 436,528' 440,518 443,351 444,420 451,737 2 Foreign countries 302,134 363,649 402,852 429,547r 423,549' 426,661' 435,295 439,931 439,917 448,310 3 Europe 117,756 138,072 153,145 163,829' 161,378' 157,270' 157,033 165,252 165,789 165,745 4 Austria 519 585 615 693 692 769 1,665 2,051 897 1,009 5 Belgium-Luxembourg 2,517 2,709 4,114 5,240' 5,189 4,732 4,268 4,617 5,425 5,208 6 Denmark 509 466 438 513 536 533 536 752 523 518 7 Finland 748 531 418 496' 373 506 354 619 514 484 8 France 8,171 9,441 12,701 15,540 15,595 15,148 15,906 19,307 19,423 19,794 9 Germany 5,351 3,599 3,358 4,835 5,622 5,309 5,691 6,718 4,964 4,618 in Greece 537 520 699 664 612 551 535 559 552 653 11 Italy 5,626 8,462 10,762 9,667' 7,764' 7,235 7,215 6,537 7,864 8,856 17 Netherlands 3,362 4,290 4,731 4,212 4,069 4,027 4,334 4,320 4,183 4,195 13 Norway 1,567 1,673 1,548 948' 781 552 469 731 850 719 14 Portugal 388 373 597 652 706 685 705 674 801 793 15 Spain 1,405 1,603 2,082 2,113 1,899 1,794 1,772 1,919 1,879 2,040 16 Sweden 1,390 1,799 1,676 1,422' 1,622 1,693 1,547 1,313 1,299 1,116 17 Switzerland 29,066 32,246 31,740 28,742 26,119 25,606 26,602 27,233 26,848 27,622 18 Turkey 296 467 584 429 504 404 383 377 434 642 19 United Kingdom 48,172 60,683 68,671 76,728' 80,611' 80,144' 78,585 81,734 83,885 82,090 70 Yugoslavia 499 562 602 673 595 600 535 547 556 659 71 Other Western Europe1 7,006 7,403 7,192 9,635 7,713' 6,491' 5,286 4,308 4,165 3,947 77 U.S.S.R 50 65 79 105 43 64 61 287 34 89 23 Other Eastern Europe2 576 596 537 523 332 427 586 649 693 691 24 Canada 12,232 16,026 16,059 17,426 18,037 21,466 22,497 20,450 21,257 22,141 75 Latin America and Caribbean 114,163 140,088 153,381 167,792' 161,445' 161,056' 164,875 164,713 161,319 167,362 76 Argentina 3,578 4,038 4,394 6,029 5,786 5,551 5,155 5,627 6,075 6,196 77 Bahamas 44,744 55,818 56,897 57,657' 53,860' 54,647 55,791 57,865 53,680 58,251 78 Bermuda 1,572 2,266 2,370 2,765 2,596 2,147 2,324 2,276 2,016 2,599 79 Brazil 2,014 3,168 5,275 5,369 6,049 5,759 6,096 5,782 5,542 5,505 3n British West Indies 26,381 34,545 36,773 42,670' 40,474' 41,127 44,041 41,265 42,014 42,572 31 Chile 1,626 1,842 2,001 2,042 2,019 1,997 2,084 2,147 2,223 2,266 32 Colombia 2,594 1,689 2,514 3,102 3,336 3,140 3,076 3,101 3,053 3,414 33 Cuba 9 8 10 11 16 6 6 7 7 8 34 Ecuador 455 1,047 1,092 1,238 1,211 1,172 1,209 1,199 1,166 1,260 35 Guatemala 670 788 896 1,071 1,146 1,132 1,126 1,128 1,097 1,092 36 Jamaica 126 109 183 122 244 126 144 173 201 185 37 Mexico 8,377 10,392 12,303 14,045 13,702 13,433 12,990 13,126 13,153 12,926 38 Netherlands Antilles 3,597 3,879 4,220 4,875 4,696 4,560 4,561 4,859 4,798 5,106 39 Panama 4,805 5,924 6,951 7,492 7,416 7,161 7,286 6,960 7,042 6,371 4n Peru 1,147 1,166 1,266 1,166 1,124 1,100 1,106 1,116 1,132 1,518 41 Uruguay 759 1,244 1,394 1,549 1,730 1,727 1,567 1,646 1,703 1,660 47 Venezuela 8,417 8,632 10,545 11,919 11,467 11,741 11,670 11,727 11,727 11,659 43 Other Latin America and Caribbean 3,291 3,535 4,297 4,668' 4,571 4,529' 4,641 4,708 4,689 4,775 44 48,716 58,570 71,187 72,271' 74,841 78,772' 82,644 81,682 83,817 85,119 China 45 Mainland 203 249 1,153 1,607' 1,003 1,624 1,347 1,550 973 1,464 46 Taiwan 2,761 4,051 4,990 7,786' 9,092 9,661 10,837 11,027 12,687 13,618 47 Hong Kong 4,465 6,657 6,581 8,067' 8,215 8,194 8,706 8,757 8,745 8,606 48 India 433 464 507 711 606 630 926 574 577 690 49 Indonesia 857 997 1,033 1,466 1,524 1,738 2,107 1,787 1,758 1,416 sn Israel 606 1,722 1,268 1,595 1,459 1,363' 1,450 1,490 1,671 1,968 51 Japan 16,078 18,079 21,640 23,077 25,047 26,397 28,274 28,279 29,689 30,226 57 Korea 1,692 1,648 1,730 1,665 1,503 1,602 1,551 1,337 1,336 1,358 53 Philippines 770 1,234 1,383 1,140 942 1,086 978 1,051 1,331 1,281 54 Thailand 629 747 1,257 1,358 1,199 1,141 1,103 993 1,155 1,066 55 Middle-East oil-exporting countries3 13,433 12,976 16,804 14,523 15,174 16,308 15,384 14,418 14,045 13,909 56 Other Asia 6,789 9,748 12,841 9,276 9,076 9,028 9,980 10,419 9,848 9,516 57 Africa 3,124 2,827 3,396 4,883 4,643 4,359 4,260 4,173 4,227 4,281 58 Egypt 432 671 647 1,363 1,080 987 870 960 910 1,078 59 Morocco 81 84 118 163 98 92 91 85 92 87 60 South Africa 292 449 328 388 567 421 465 386 414 413 61 Zaire 23 87 153 163 73 92 95 90 105 92 67 Oil-exporting countries4 1,280 620 1,189 1,494 1,644 1,614 1,601 1,442 1,490 1,481 63 Other Africa 1,016 917 961 1,312 1,182 1,152 1,137 1,210 1,216 1,130 64 Other countries 6,143 8,067 5,684 3,347 3,205 3,739 3,987 3,662 3,508 3,662 65 Australia 5,904 7,857 5,300 2,779 2,707 3,024 3,237 3,058 2,744 2,875 66 All other 239 210 384 568 498 714 750 604 763 788 67 Nonmonetary international and regional organizations 4,922 5,957 4,454 5,821' 7,487 9,867 5,223 3,420 4,503 3,427 68 International 4,049 5,273 3,747 4,806' 6,109 8,671 4,139 2,421 3,669 2,466 69 Latin American regional 517 419 587 894 909 863 916 823 732 835 70 Other regional5 357 265 120 121 470 333 168 176 102 126 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 • October 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 Dec. Jan. Feb. Mar. Apr. May JuneP 1 Total 355,705 391,312 400,162 401,585' 386,529' 389,501' 394,769 401,041 394,687 403,230 2 Foreign countries 355,636 391,148 399,363 400,554' 385,238' 388,692' 394,286 400,539 394,279 402,752 3 Europe 85,584 91,927 99,014 106,407' 104,365' 100,173' 100,458 101,230 100,926 104,307 4 Austria 229 401 433 598 485 542 494 429 501 677 5 Belgium-Luxembourg 5,138 5,639 4,794 5,772' 5,841' 5,276 5,429 5,502 5,697 7,155 6 Denmark 554 1,275 648 706 864 940 845 794 882 747 7 Finland 990 1,044 898 823 843 741 1,194 795 866 975 8 France 7,251 8,766 9,157 9,124' 9,065' 7,943 8,636 8,902 8,861 9,435 9 Germany 1,876 1,284 1,306 1,267' 1,211 1,309 1,374 1,339 1,176 1,095 10 Greece 452 476 817 991 933 884 798 764 723 626 11 Italy 7,560 9,018 9,119 8,848' 7,494' 6,913 7,297 6,709 6,806 7,474 12 Netherlands 1,425 1,267 1,356 1,258 1,248 1,249 1,394 1,380 1,384 11,,339999 13 Norway 572 690 675 706' 692 652 613 786 746 889988 14 Portugal 950 1,114 1,243 1,058 1,040 936 893 874 850 769 15 Spain 3,744 3,573 2,884 1,908 1,801 1,885 1,866 1,701 1,986 2,001 16 Sweden 3,038 3,358 2,230 2,219' 2,174 2,278 2,422 1,923 2,239 2,466 17 Switzerland 1,639 1,863 2,123 3,171' 2,836 2,361 2,940 2,978 3,134 3,547 18 Turkey 560 812 1,130 1,200 1,512 1,519 1,587 1,584 1,649 1,856 19 United Kingdom 45,781 47,364 56,185 62,560' 62,415' 60,621' 57,983 60,581 59,354 58,174 20 Yugoslavia 1,430 1,718 1,886 1,964 1,901 1,953 1,978 1,952 1,928 2,005 21 Other Western Europe1 368 477 596 998 716 734 1,166 649 491 1,260 22 U.S.S.R 263 192 142 130 169 287 424 477 489 568 23 Other Eastern Europe2 1,762 1,598 1,389 1,107 1,126 1,151 1,126 1,111 1,164 1,180 24 Canada 13,678 16,341 16,109 16,476' 17,279 18,280 17,945 18,814 17,908 18,071 25 Latin America and Caribbean 187,969 205,491 207,862 202,663' 189,065' 190,623' 196,723 198,986 193,638 200,503 26 Argentina 10,974 11,749 11,050 11,462 11,463 11,574 11,456 11,803 11,921 12,078 27 Bahamas 56,649 59,633 58,009 58,258' 49,762' 49,659' 55,691 55,259 52,529 57,001 28 Bermuda 603 566 592 499 542 380 460 275 236 249 29 Brazil 23,271 24,667 26,315 25,283 25,209 25,129 25,379 25,357 25,317 24,870 30 British West Indies 29,101 35.527 38,205 38,881' 34,371' 36,534' 36,880 38,927 37,026 39,985 31 Chile 5,513 6,072 6,839 6,603 6,525 6,478 6,557 6,531 6,537 6,507 32 Colombia 3,211 3,745 3,499 3,249' 3,185 3,044 22,,990033 2,861 2,820 2,789 33 Cuba 3 0 0 0 0 0 11 0 0 0 34 Ecuador 2,062 2,307 2,420 2,390 2,439 2,369 2,399 2,388 2,383 2,397 35 Guatemala' 124 129 158 194 174 167 167 124 112 136 36 Jamaica3 181 215 252 224 228 213 213 216 218 244 37 Mexico 29,552 34,802 34,885 31,788' 31,841' 32,IOC 31,608 32,351 31,513 31,253 38 Netherlands Antilles 839 1,154 1,350 1,340 1,022 1,043 927 839 1,044 1,086 39 Panama 10,210 7,848 7,707 6,645' 6,532 5,881' 6,179 6,133 5,919 5,855 40 Peru 2,357 2,536 2,384 1,947 1,874 1,852 1,806 1,767 1,757 1,737 41 Uruguay 686 977 1,088 960 966 956 961 953 951 931 42 Venezuela 10,643 11,287 11,017 10,871 10,947 11,269 11,204 11,285 11,326 11,303 43 Other Latin America and Caribbean 1,991 2,277 2,091 2,067 1,984 1,976 1,931 1,917 2,027 2,079 44 Asia 60,952 67,837 66,316 66,212' 65,882' 71,058' 7700,,772299 7733,,442200 7733,,995511 7711,,996611 China 45 Mainland 214 292 710 639 750 820 902 593 703 568 46 Taiwan 2,288 1,908 1,849 1,535 1,300 1,243 1,403 1,151 1,448 1,238 47 Hong Kong 6,787 8,489 7,293 6,796 6,923 7,602 8,208 8,134 8,315 7,488 48 India 222 330 425 450 332 284 479 398 420 426 49 Indonesia 348 805 724 698 692 793 712 716 736 690 50 Israel 2,029 1,832 2,088 1,991 1,834 1,697 1,617 1,611 1,742 1,764 51 Japan 28,379 30,354 29,066 31,249' 32,232 36,471 36,711 38,781 38,629 38,552 52 Korea 9,387 9,943 9,285 9,226' 8,823' 9,072' 9,242 9,286 9,176 8,923 53 Philippines 2,625 2,107 2,555 2,224 2,206 2,224 2,336 2,325 2,270 2,393 54 Thailand 643 1,219 1,125 845' 793 765 810 775 716 706 55 Middle East oil-exporting countries4 3,087 4,954 5,044 4,298 3,975 3,869 3,577 3,838 3,948 3,680 56 Other Asia 4,943 5,603 6,152 6,260' 6,021 6,218 4,732 5,812 5,846 5,535 57 Africa 5,346 6,654 6,615 5,407 5,416 5,360 5,128 5,007 4,890 4,971 58 Egypt 322 747 728 721 677 690 653 639 619 740 59 Morocco 353 440 583 575 591 612 646 662 640 642 60 South Africa 2,012 2,634 2,795 1,942 1,965 1,856 1,799 1,716 1,743 1,705 61 Zaire 57 33 18 20 18 18 17 17 17 17 62 Oil-exporting countries5 801 1,073 842 630 582 562 488 465 417 415 63 Other 1,802 1,727 1,649 1,520 1,584 1,621 1,525 1,508 1,455 1,452 64 Other countries 2,107 2,898 3,447 3,390' 3,230 3,199 3,305 3,082 2,966 2,938 65 Australia 1,713 2,256 2,769 2,413' 2,409 2,367 2,473 2,237 2,050 2,023 66 All other 394 642 678 978 821 832 832 845 916 915 67 Nonmonetary international and regional organizations6 68 164 800 1,030 1,292 809 483 502 408 479 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 Dec/ Jan/ Feb/ Mar. Apr. May June? 1 Total 333333999999666666,,,,,,000000111111555555 444444222222666666,,,,,,222222111111555555 444444333333333333,,,,,,000000777777888888 444444333333000000,,,,,,444444666666666666 444444111111999999,,,,,,888888222222888888'''''' 440033,,223300 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 333333555555555555,,,,,,777777000000555555 333333999999111111,,,,,,333333111111222222 444444000000000000,,,,,,111111666666222222 444444000000111111,,,,,,555555888888555555 386,529 389,501 333333999999444444,,,,,,777777666666999999 401,041 396,487 440033,,223300 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 444444555555,,,,,,444444222222222222 555555777777,,,,,,555555666666999999 666666222222,,,,,,222222333333777777 666666000000,,,,,,444444999999666666 60,620 60,582 666666000000,,,,,,444444222222777777 60,154 60,272 6600,,227722 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 111111222222777777,,,,,,222222999999333333 111111444444666666,,,,,,333333999999333333 111111555555666666,,,,,,222222111111666666 111111777777444444,,,,,,222222666666111111 163,961 169,084 111111777777333333,,,,,,666666999999888888 179,662 173,861 117799,,338899 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111222222111111,,,,,,333333777777777777 111111222222333333,,,,,,888888333333777777 111111222222444444,,,,,,999999333333222222 111111111111666666,,,,,,666666444444333333 112,033 110,219 111111111111000000,,,,,,666666444444333333 111,767 112,984 111122,,882200 66 DDeeppoossiittss 444444444444,,,,,,222222222222333333 444444777777,,,,,,111111222222666666 444444999999,,,,,,222222222222666666 444444888888,,,,,,333333666666111111 45,789 44,159 444444444444,,,,,,999999888888555555 46,367 47,493 4466,,993377 77 OOtthheerr 777777777777,,,,,,111111555555333333 777777666666,,,,,,777777111111111111 777777555555,,,,,,777777000000666666 666666888888,,,,,,222222888888222222 66,244 66,060 666666555555,,,,,,666666555555888888 65,400 65,491 6655,,888833 88 AAllll ootthheerr ffoorreeiiggnneerrss 666666111111,,,,,,666666111111444444 666666333333,,,,,,555555111111444444 555555666666,,,,,,777777777777777777 555555000000,,,,,,111111888888555555 49,915 49,616 555555000000,,,,,,000000000000222222 49,458 49,369 5500,,774499 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 444444000000,,,,,,333333111111000000 333333444444,,,,,,999999000000333333 333333222222,,,,,,999999111111666666 222222888888,,,,,,888888888888111111 222222555555,,,,,,000000555555888888'''''' 222222,,,,,,444444999999111111 222222,,,,,,999999666666999999 333333,,,,,,333333888888000000 333333,,,,,,333333333333555555 222222,,,,,,444444999999444444 11 Negotiable and readily transferable 333333000000,,,,,,777777666666333333 222222666666,,,,,,000000666666444444 222222333333,,,,,,888888000000555555 111111999999,,,,,,333333333333222222 111111777777,,,,,,888888555555999999 12 Outstanding collections and other 777777,,,,,,000000555555666666 555555,,,,,,888888777777000000 555555,,,,,,777777333333222222 666666,,,,,,222222111111444444 444444,,,,,,666666999999222222 13 MEMO: Customer liability on acceptances 333333888888,,,,,,111111555555333333 333333777777,,,,,,777777111111555555 333333777777,,,,,,111111000000333333 222222888888,,,,,,333333666666666666 222222888888,,,,,,555555333333666666 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 42,499 46,337 40,714 37,378 39,465 42,112 41,226 42,891 n.a. 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' 1986 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998822 11998833 11998844 June Sept. Dec. Mar. 1 Total 228,150 243,715 243,952 232,661' 232,798 227,880 220,352' By borrower 2 Maturity of 1 year or less1 173,917 176,158 167,858 159,563' 162,590 160,813 152,229' 3 Foreign public borrowers 21,256 24,039 23,912 23,781' 26,469 26,302 23,852 4 All other foreigners 152,661 152,120 143,947 135,782' 136,122 134,511 128,378' 5 Maturity of over 1 year1 54,233 67,557 76,094 73,098' 70,207 67,066 68,123 6 Foreign public borrowers 23,137 32,521 38,695 37,585' 36,302 34,500 36,674 7 All other foreigners 31,095 35,036 37,399 35,514' 33,906 32,566 31,448 By area Maturity of 1 year or less1 8 Europe 50,500 56,117 58,498 56,441' 58,520 56,579 53,440 9 Canada 7,642 6,211 6,028 6,160 6,125 6,396 5,855 10 Latin America and Caribbean 73,291 73,660 62,791 63,628 63,088 63,328 59,469 11 37,578 34,403 33,504 27,566 29,120 27,966 27,701' 12 Africa 3,680 4,199 4,442 4,003 3,954 3,753 3,331 13 All other2 1,226 1,569 2,593 1,764 1,782 2,791 2,433 Maturity of over 1 year1 14 Europe 11,636 13,576 9,605 8,719 8,078 7,634 7,522 15 Canada 1,931 1,857 1,882 2,116 1,932 1,804 1,924 16 Latin America and Caribbean 35,247 43,888 56,144 53,510 52,145 50,662 52,068 17 3,185 4,850 5,323 5,136 5,230 4,502 4,252 18 Africa 1,494 2,286 2,033 1,996 1,665 1,538 1,634 19 All other2 740 1,101 1,107 1,622 1,157 926 722 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 • October 1986 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1984 1985 1986 AArreeaa oorr ccoouunnttrryy22 11998811 11998822 11998833 June3 Sept. Dec. Mar. June Sept. Dec. Mar.P 1 Total 415.2 438.0 436.4 430.2 409.1 408.0 407.9 399.0 397.5 396.9 395.9 2 G-10 countries and Switzerland 175.5 179.7 167.8 157.6 147.6 148.1 153.2 146.6 151.5 150.5 156.9 3 Belgium-Luxembourg 13.3 13.1 12.4 10.9 9.8 8.7 9.3 8.9 9.5 9.3 8.3 4 France 15.3 17.1 16.2 14.2 14.3 14.1 14.6 13.5 14.8 12.3 13.8 5 Germany 12.9 12.7 11.3 10.9 10.0 9.0 8.9 9.6 9.8 10.5 11.2 6 Italy 9.6 10.3 11.4 11.5 9.7 10.1 10.0 8.6 8.3 9.8 8.5 V Netherlands 4.0 3.6 3.5 3.0 3.4 3.9 3.8 3.7 3.4 3.8 3.5 8 Sweden 3.7 5.0 5.1 4.3 3.5 3.2 3.1 2.9 3.1 2.7 2.9 9 Switzerland 5.5 5.0 4.3 4.2 3.9 3.9 4.2 4.0 4.1 4.4 5.4 10 United Kingdom 70.1 72.1 65.3 60.3 57.1 60.3 65.4 65.7 66.9 66.6 69.2 11 Canada 10.9 10.4 8.3 8.9 8.1 7.9 9.1 8.1 7.5 7.0 6.1 12 Japan 30.2 30.2 29.9 29.3 27.7 27.1 24.7 21.7 24.0 24.1 28.1 13 Other developed countries 28.4 33.7 36.1 37.1 36.3 33.8 33.0 32.5 32.2 30.5 31.6 14 Austria 1.9 1.9 1.9 1.9 1.8 1.6 1.6 1.6 1.7 1.6 1.6 15 Denmark 2.3 2.4 3.4 3.1 2.9 2.2 2.1 1.9 2.1 2.4 2.5 16 Finland 1.7 2.2 2.4 2.3 1.9 1.9 1.8 1.8 1.8 1.6 1.9 17 Greece 2.8 3.0 2.8 3.3 3.2 2.9 2.9 2.9 2.8 2.6 2.5 18 Norway 3.1 3.3 3.3 3.2 3.2 3.0 2.9 2.9 3.4 2.9 2.7 19 Portugal 1.1 1.5 1.5 1.7 1.6 1.4 1.4 1.3 1.4 1.3 1.1 20 6.6 7.5 7.1 7.3 6.9 6.5 6.4 5.9 6.1 5.8 6.4 21 Turkey 1.4 1.4 1.7 2.0 2.0 1.9 1.9 2.0 2.1 1.9 2.3 22 Other Western Europe 2.1 2.3 1.8 1.9 1.7 1.7 1.7 1.8 1.7 2.0 2.4 23 South Africa 2.8 3.7 4.7 4.7 5.0 4.5 4.2 3.9 3.3 3.2 3.2 24 Australia 2.5 4.4 5.5 5.7 6.2 6.1 6.2 6.4 5.8 5.2 5.0 25 OPEC countries4 24.8 27.2 28.8 26.4 24.7 25.3 24.8 23.0 23.1 21.8 20.7 26 Ecuador 2.2 2.2 2.2 2.1 2.1 2.2 2.2 2.2 2.2 2.1 2.2 27 Venezuela 9.9 10.5 9.9 9.5 9.2 9.3 9.3 9.3 9.0 8.9 8.7 28 Indonesia 2.6 3.2 3.8 3.9 3.6 3.7 3.6 3.4 3.4 3.3 3.3 29 Middle East countries 7.5 8.5 9.9 8.2 7.3 7.9 7.4 6.1 6.2 5.5 4.7 30 African countries 2.5 2.8 3.0 2.7 2.5 2.3 2.3 2.2 2.3 2.0 1.8 31 Non-OPEC developing countries 96.3 106.8 111.3 112.7 112.1 112.2 111.3 110.4 108.2 105.5 103.6 Latin America 32 Argentina 9.4 8.9 9.5 9.2 9.1 8.7 8.6 8.6 8.9 8.9 8.9 33 Brazil 19.1 22.9 23.1 25.4 26.3 26.3 26.4 26.6 25.5 25.6 25.7 34 Chile 5.8 6.3 6.4 6.7 7.1 7.0 7.0 6.9 6.6 7.0 6.9 35 Colombia 2.6 3.1 3.2 3.0 2.9 2.9 2.8 2.7 2.6 2.7 2.3 36 Mexico 21.6 24.2 25.8 25.9 26.0 25.7 25.5 25.3 24.4 24.1 23.9 3/ Peru 2.0 2.6 2.4 2.3 2.2 2.2 2.2 2.1 1.9 1.8 1.7 38 Other Latin America 4.1 4.0 4.2 4.1 3.9 3.9 3.7 3.6 3.5 3.4 3.6 Asia China 39 Mainland .2 .2 .3 .6 .5 .7 .7 .3 1.1 .5 .6 40 Taiwan 5.1 5.3 5.3 5.3 5.2 5.1 5.3 5.5 5.1 4.5 4.3 41 .3 .6 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.3 1.2 42 2.1 2.3 1.9 1.9 1.7 1.8 1.7 2.3 1.5 1.6 1.3 43 Korea (South) 9.4 10.9 11.3 11.2 10.4 10.8 10.5 10.2 10.5 9.6 9.5 44 Malaysia 1.7 2.1 2.9 2.7 3.0 2.8 2.8 2.8 2.8 2.4 2.2 45 Philippines 6.0 6.3 6.2 6.3 5.9 6.0 6.1 6.0 6.0 5.7 5.6 46 Thailand 1.5 1.6 2.2 1.9 1.8 1.8 1.7 1.6 1.6 1.4 1.3 47 Other Asia 1.0 1.1 1.0 1.1 1.0 1.2 1.1 1.0 1.1 1.1 .9 Africa 48 Egypt 1.1 1.2 1.5 1.4 1.2 1.2 1.1 1.0 1.0 1.0 .9 49 Morocco .7 .7 .8 .8 .8 .8 .8 .8 .9 .9 .9 50 Zaire .2 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa5 2.3 2.4 2.3 1.9 1.9 2.1 2.2 2.0 2.0 1.9 1.9 52 Eastern Europe 7.8 6.2 5.3 4.9 4.5 4.4 4.3 4.3 4.6 4.2 4.0 33 U.S.S.R .6 .3 .2 .2 .2 .1 .2 .3 .2 .1 .3 54 Yugoslavia 2.5 2.2 2.4 2.3 2.3 2.3 2.2 2.2 2.4 2.2 2.0 33 Other 4.7 3.7 2.8 2.4 2.1 2.0 1.9 1.8 1.9 1.8 1.7 56 Offshore banking centers 63.7 66.6 70.2 73.9 66.4 66.7 64.2 65.0 60.3 67.2 62.6 37 Bahamas 19.0 19.0 21.8 27.4 23.3 21.5 20.0 21.1 16.6 22.1 21.0 58 Bermuda .7 .9 .9 .7 1.0 .9 .7 .9 .8 .7 .7 59 Cayman Islands and other British West Indies 12.4 12.8 12.2 12.2 11.1 11.8 12.3 12.1 12.3 13.2 11.3 60 Netherlands Antilles 3.2 3.3 4.1 3.3 3.1 3.4 3.3 3.2 2.3 2.3 2.3 61 Panama6 7.7 7.5 5.8 6.5 5.6 6.7 5.5 5.4 6.1 6.0 5.9 62 Lebanon .2 .1 .1 .1 .1 .1 .1 .1 .0 .1 .1 63 Hong Kong 11.8 13.9 15.0 13.5 12.7 12.5 12.4 12.6 12.7 12.9 12.9 64 Singapore 8.7 9.2 10.3 10.3 9.5 9.8 10.0 9.7 9.4 9.9 8.4 65 Others7 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated8 18.8 17.9 17.0 17.6 17.4 17.5 17.2 17.3 17.6 17.2 16.5 1. The banking offices covered by these data are the U.S. offices and foreign 2. Revisions shown in this issue have been made in part to correct some branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. double-counting of claims held by foreign branches located in Puerto Rico, the Offices not covered include (1) U.S. agencies and branches of foreign banks, and U.S. Virgin Islands, and Guam. (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 3. Beginning with June 1984 data, reported claims held by foreign branches adjusted to exclude the claims on foreign branches held by a U.S. office or another have been reduced by an increase in the reporting threshold for "shell" branches foreign branch of the same banking institution. The data in this table combine from $50 million to $150 million equivalent in total assets, the threshold now foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims applicable to all reporting branches. of U.S. offices in table 3.18 (excluding those held by agencies and branches of foreign banks and those constituting claims on own foreign 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 1985 1986 Type, and area or country 998822 11998833 11998844 Mar. June Sept. Dec. Mar.P 1 Total 27,512 25,346 29,357 26,206 24,535 25,184 27,018 25,714 2 Payable in dollars 24,280 22,233 26,389 23,429 21,889 22,364 23,811 22,101 3 Payable in foreign currencies 3,232 3,113 2,968 2,777 2,646 2,820 3,208 3,613 By type 4 Financial liabilities 11,066 10,572 14,509 11,722 11,489 11,743 12,856 12,407 5 Payable in dollars 8,858 8,700 12,553 9,873 9,533 9,780 10,835 10,284 6 Payable in foreign currencies 2,208 1,872 1,955 1,849 1,956 1,963 2,021 2,123 7 Commercial liabilities 16,446 14,774 14,849 14,484 13,046 13,441 14,162 13,307 8 Trade payables 9,438 7,765 7,005 7,015 5,797 5,694 6,685 5,598 9 Advance receipts and other liabilities .. 7,008 7,009 7,843 7,469 7,249 7,747 7,477 7,710 10 Payable in dollars 15,423 13,533 13,836 13,556 12,356 12,584 12,976 11,817 11 Payable in foreign currencies 1,023 1,241 1,013 928 690 857 1,186 1,490 By area or country Financial liabilities 12 Europe 6,501 5,742 6,728 6,138 5,934 6,534 7,146 7,026 13 Belgium-Luxembourg 505 302 471 298 351 367 329 338 14 France 783 843 995 896 865 849 857 871 15 Germany 467 502 489 506 474 493 419 428 16 Netherlands 711 621 590 619 604 624 745 640 17 Switzerland 792 486 569 541 566 593 676 724 18 United Kingdom 3,102 2,839 3,297 3,039 2,825 3,318 3,822 3,682 19 Canada 746 764 863 840 850 826 760 778 20 Latin America and Caribbean 2,751 2,5% 5,086 3,147 3,106 2,619 3,152 2,788 21 Bahamas 904 751 1,926 1,341 1,107 1,145 1,120 954 22 Bermuda 14 13 13 25 10 4 4 13 23 Brazil 28 32 35 29 27 23 29 26 24 British West Indies 1,027 1,041 2,103 1,521 1,734 1,234 1,814 1,610 25 Mexico 121 213 367 25 32 28 15 20 26 Venezuela 114 124 137 3 3 3 3 4 27 Asia 1,039 1,424 1,777 1,555 1,555 1,728 1,765 1,798 28 Japan 715 991 1,209 1,033 965 1,098 1,148 1,191 29 Middle East oil-exporting countries2. 169 170 155 124 147 82 82 78 30 Africa 17 19 14 12 14 14 12 12 31 Oil-exporting countries3 0 0 0 0 0 0 0 0 32 All other4 12 27 41 31 30 22 21 4 Commercial liabilities 3,831 3,245 4,001 3,500 3,461 3,897 4,011 3,915 33 Europe 52 62 48 37 53 56 62 66 34 Belgium-Luxembourg 598 437 438 400 423 431 453 382 35 France 468 427 622 587 428 601 607 546 36 Germany 346 268 245 272 284 386 364 545 37 Netherlands 367 241 257 228 349 289 379 251 38 Switzerland 1,027 732 1,095 741 730 858 976 957 39 United Kingdom 40 Canada 1,495 1,841 1,975 1,727 1,494 1,383 1,449 1,442 41 Latin America and Caribbean 1,570 1,473 1,871 1,713 1,225 1,262 1,088 1,097 42 Bahamas 16 1 7 11 12 2 12 26 43 Bermuda 117 67 114 112 77 105 77 210 44 Brazil 60 44 124 101 90 120 58 64 45 British West Indies 32 6 32 21 1 15 44 7 46 Mexico 436 585 586 654 492 415 430 256 47 Venezuela 642 432 636 393 309 311 212 364 48 Asia 8,144 6,741 5,285 5,708 5,246 5,353 6,046 5,384 49 Japan 1,226 1,247 1,256 1,228 1,219 1,567 1,799 2,039 50 Middle East oil-exporting countries2 5 5,503 4,178 2,372 2,786 2,3% 2,109 2,829 2,171 51 Africa 753 553 588 765 631 572 587 486 52 Oil-exporting countries3 277 167 233 294 265 235 238 148 53 All other4 651 921 1,128 1,070 988 975 982 983 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. NOTES TO TABLE 3.21—CONTINUED 4. Besides the Organization of Petroleum Exporting Countries shown individ- 6. Includes Canal Zone beginning December 1979. ually, this group includes other members of OPEC (Algeria, Gabon, Iran, Iraq, 7. Foreign branch claims only. Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well 8. Includes New Zealand, Liberia, and international and regional organizaas Bahrain and Oman (not formally members of OPEC). tions. 5. Excludes Liberia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • October 1986 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1985 1986 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998822 11998833 11998844 Mar. June Sept. Dec. Mar." 1 Total 28,725 34,911 29,901 28,804 26,750 28,666 28,071 30,915 2 Payable in dollars 26,085 31,815 27,304 26,232 24,121 25,800 25,769 28,728 3 Payable in foreign currencies 2,640 3,0% 2,597 2,571 2,629 2,866 2,302 2,187 By type 4 Financial claims 17,684 23,780 19,254 18,506 16,695 19,203 18,031 21,507 5 Deposits 13,058 18,496 14,621 14,500 12,839 15,315 14,805 18,113 6 Payable in dollars 12,628 17,993 14,202 14,003 12,283 14,611 14,190 17,657 7 Payable in foreign currencies 430 503 420 497 556 704 615 457 8 Other financial claims 4,626 5,284 4,633 4,007 3,856 3,889 3,227 3,394 9 Payable in dollars 2,979 3,328 3,190 2,442 2,375 2,351 2,192 2,301 10 Payable in foreign currencies 1,647 1,956 1,442 1,565 1,480 1,538 1,035 1,093 11 Commercial claims 11,041 11,131 10,646 10,297 10,055 9,463 10,040 9,408 12 Trade receivables 9,994 9,721 9,177 8,784 8,688 7,988 8,750 8,107 13 Advance payments and other claims 1,047 1,410 1,470 1,513 1,367 1,475 1,290 1,301 14 Payable in dollars 10,478 10,494 9,912 9,787 9,463 8,839 9,387 8,771 15 Payable in foreign currencies 563 637 735 510 592 624 652 637 By area or country Financial claims 16 Europe 4,873 6,488 5,762 5,786 5,477 6,463 6,306 6,833 17 Belgium-Luxembourg 15 37 15 29 15 12 10 10 18 France 134 150 126 92 51 132 184 217 19 Germany 178 163 224 196 175 158 223 172 20 Netherlands 97 71 66 81 46 127 61 61 21 Switzerland 107 38 66 46 16 53 74 166 22 United Kingdom 4,064 5,817 4,864 5,053 4,900 5,736 5,492 5,960 23 Canada 4,377 5,989 3,988 3,942 3,756 4,037 3,256 4,024 24 Latin America and Caribbean 7,546 10,234 8,216 7,721 6,616' 7,603 7,650 9,928 25 Bahamas 3,279 4,771 3,306 3,052 2,204' 2,315 2,638 3,503 26 Bermuda 32 102 6 4 6 5 6 2 27 Brazil 62 53 100 98 % 92 78 77 28 British West Indies 3,255 4,206 4,043 3,998 3,747 4,632 4,440 5,904 29 Mexico 274 293 215 201 206 201 180 178 30 Venezuela 139 134 125 101 100 73 48 43 31 Asia 698 764 %1 859 640 %9 696 621 32 Japan 153 297 353 509 281 725 475 350 33 Middle East oil-exporting countries2 15 4 13 6 6 6 4 2 34 Africa 158 147 210 101 111 104 103 87 35 Oil-exporting countries3 48 55 85 32 25 31 29 27 36 All other4 31 159 117 97 95 26 21 14 Commercial claims 37 Europe 3,826 3,670 3,801 3,360 3,680 3,235 3,533 3,386 38 Belgium-Luxembourg 151 135 165 149 212 158 175 148 39 France 474 459 440 375 408 360 426 385 40 Germany 357 349 374 358 375 336 346 396 41 Netherlands 350 334 335 340 301 286 284 221 42 Switzerland 360 317 271 253 376 208 284 249 43 United Kingdom 811 809 1,063 885 950 779 898 789 44 Canada 633 829 1,021 1,248 1,065 1,100 1,023 1,062 45 Latin America and Caribbean 2,526 2,695 2,052 1,973 1,803 1,717 1,808 1,604 46 Bahamas 21 8 8 9 11 18 13 27 47 Bermuda 261 190 115 164 65 62 93 82 48 Brazil 258 493 214 210 193 211 206 232 49 British West Indies 12 7 7 6 29 7 6 7 50 Mexico 775 884 583 493 468 416 510 384 51 Venezuela 351 272 206 192 181 149 157 172 52 Asia 3,050 3,063 3,073 2,985 2,707 22,,771122 2,982 2,620 53 Japan 1,047 1,114 1,191 1,154 954 888844 1,016 803 54 Middle East oil-exporting countries2 751 737 668 666 593 541 638 632 55 Africa 588 588 470 510 464 434 437 491 56 Oil-exporting countries3 140 139 134 141 137 131 130 167 57 All other4 417 286 229 221 336 264 257 245 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.- Dec. Jan/ Feb. Mar. Apr. May June'' June U.S. corporate securities STOCKS 1 Foreign purchases 59,834 81,994 72,980 11,179' 9,312 10,593' 13,503 15,306 13,099 11,167 2 Foreign sales 62,814 77,054 59,584 9,024' 7,564 8,835' 10,640 11,420 10,302 10,823 3 Net purchases, or sales (—) -2,980 4,940 13,395 2,154' 1,748 1,758' 2,863 3,886 2,797 344 4 Foreign countries -3,109 4,856 13,356 1,990' 1,760 1,738' 2,816 3,822 2,755 465 5 Europe -3,077 2,057 8,570 1,333' 1,151 1,395' 2,205 2,049 1,577 193 6 France -405 -438 193 -105 -71 -68 -26 36 102 219 7 Germany -50 730 572 283 134 234 229 47 102 -175 8 Netherlands -357 -123 852 125 109 121 166 123 236 97 9 Switzerland -1,542 -75 2,234 280 309 420 698 566 375 -134 10 United Kingdom -677 1,665 3,561 693' 577 635' 1,021 719 568 41 11 Canada 1,691 356 359 93 117 -59 77 50 43 130 12 Latin America and Caribbean 495 1,718 1,732 305 -85 213 198 862 482 61 13 Middle East1 -1,992 238 536 227 208 -19 127 338 117 -236 14 Other Asia -378 295 1,675 -25 314 154 122 376 421 288 15 Africa -22 24 204 12 25 30 59 48 43 -3 16 Other countries 175 168 281 44 29 24 28 98 70 32 17 Nonmonetary international and regional organizations 129 84 39 165 -12 20 47 63 42 -121 BONDS2 18 Foreign purchases 39,296 87,182 63,777 9,738' 7,008 9,346' 12,564 13,541 12,147 9,170 19 Foreign sales 26,399' 43,046 36,480 4,524' 3,782 5,213 7,420 8,960 5,347 5,757 20 Net purchases, or sales (-) 12,897' 44,137 27,297 5,214' 3,226 4,133' 5,144 4,581 6,800 3,413 21 Foreign countries 12,600' 44,231 26,396 5,572' 3,329 4,201' 4,843 4,391 6,704 2,928 22 Europe 11,697 40,047 22,464 5,175' 2,923 3,123 3,690 3,536 6,235 2,957 23 France 207 210 30 0 26 -33 -17 -23 83 -6 24 Germany 1,724 2,001 154 408 -11 45 -224 -73 228 188 25 Netherlands 100 222 167 13 86 3 25 2 89 -37 76 Switzerland 643 3,987 3,406 1,013 258 511 459 1,231 456 492 27 United Kingdom 8,429 32,762 18,854 3,695' 2,544 2,617 3,374 2,474 5,631 2,214 78 Canada -62 189 -33 19 3 -31 -198 75 63 55 29 Latin America and Caribbean 376 498 726 68 30 27 200 263 142 64 30 Middle East1 -1,230' -2,643 -1,382 -435 -174 0 15 -389 -202 -632 31 Other Asia 1,817 6,091 4,593 721' 558 1,064 1,144 883 464 480 32 Africa 1 11 6 4 1 1 0 3 -2 3 33 Other countries 0 38 22 19 -9 17 -10 19 3 2 34 Nonmonetary international and regional organizations 297 -95 901 -358 -103 -68' 301 190 96 485 Foreign securities 35 Stocks, net purchases, or sales (-) -1,101 -3,888 -4,225 -413 114 -771' -1,440 -1,668 -234 -227 36 Foreign purchases 14,816 20,856 20,660 2,740 2,521 2,937' 3,618 4,388 3,457 3,738 37 Foreign sales 15,917 24,743 24,885 3,154' 2,406 3,708' 5,058 6,057 3,691 3,965 38 Bonds, net purchases, or sales (-) -3,930 -4,042 -3,438 -155' -55 -966 -3,003 -1,076 108 1,554 39 Foreign purchases 56,017 81,160 76,453 8,384' 9,810 10,418 12,438 14,982 13,275 15,529 40 Foreign sales 59,948 85,202 79,891 8,538' 9,865 11,385 15,441 16,058 13,167 13,976 41 Net purchases, or sales (—), of stocks and bonds .... -5,031 -7,930 -7,663 -568' 60 -1,737' -4,443 -2,744 -126 1,327 42 Foreign countries -4,642 -8,993 -7,741 -903' -28 -1,877' -4,119 -2,614 -223 1,121 43 Europe -8,655 -9,927 -9,796 -424 -387 -1,916' -3,840 -2,438 108 -1,323 44 Canada 542 -1,686 -1,218 -394 -219 -319 -491 -286 80 16 45 Latin America and Caribbean 2,460 1,845 1,887 83' 233 297 121 162 346 729 46 1,356 659 1,837 -368' 393 562' 127 -143 -745 1,641 47 Africa -108 75 33 42 7 10 4 6 3 3 48 Other countries -238 41 -484 156 -56 -512 -40 85 -16 55 49 Nonmonetary international and regional organizations -389 1,063 77 335 88 140 -324 -130 98 205 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 • October 1986 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1986 1985 1986 Country or area 11998844 11998855'' Jan.- June Dec. Jan/ Feb. Mar. Apr. May JuneP Transactions, net purchases or sales (-) during period1 1 Estimated total2 21,501 29,007 17,094 6,762' -2,933 1,281' 9,572 8,390 -2,258 3,043 2 Foreign countries2 16,496 28,551 13,444 3,369' -2,459 3,737' 2,361 7,986 -368 2,186 3 Europe2 11,014 4,145 8,988 482' 149 1,672' 1,813 1,531 1,405 2,418 4 Belgium-Luxembourg 287 476 -56 -44 -9 -2 -1% 29 39 82 5 Germany2 2,929 1,917 1,853 302 129 459 322 117 468 357 6 Netherlands 449 269 -188 -82 27 -261 61 81 -31 -64 7 Sweden 40 976 322 -41 -200 191' -14 93 236 16 8 Switzerland2 656 760 1,067 -116 53 115 22 163 366 349 9 United Kingdom 5,188 -1,954 3,781 353' 36 1,240' 1,474 -207 684 555 10 Other Western Europe 1,466 1,701 2,197 111 114 -72' 144 1,255 -370 1,125 11 Eastern Europe 0 0 13 0 0 0 0 0 13 0 12 Canada 1,586 -188 820 -71 -477 -131 762 55 913 -302 13 Latin America and Caribbean 1,418 4,312 709 90 108 584 227 1,222 -970 -462 14 Venezuela 14 238 72 -41 -53 -63 127 196 36 -170 15 Other Latin America and Caribbean 536 2,343 931 265 87 448 171 161 356 -292 16 Netherlands Antilles 869 1,731 -294 -133 74 200 -70 865 -1,363 0 17 2,431 19,859 2,398 2,833 -2,179 1,311 -446 4,786 -1,691 617 18 Japan 6,289 17,880 324 902 -2,474 1,601 140 1,973 -1,229 314 19 -67 112 -46 9 -8 -12 -18 -1 -2 -5 20 All other 114 311 575 25 -52 314 22 394 -22 -80 21 Nonmonetary international and regional organizations 5,009 458 3,646 3,394' -475 -2,457' 7,211 403 -1,892 856 22 International 4,612 -420 3,389 3,001 -194 -2,691' 6,957 342 -1,899 874 23 Latin American regional 0 18 123 7 14 51 23 30 0 5 MEMO 24 Foreign countries2 16,496 28,551 13,444 3,369' -2,459 3,737' 2,361 7,986 -368 2,186 25 Official institutions 505 8,088 6,925 2,712 362 619 394 3,716 227 1,607 26 Other foreign2 15,992 20,462 6,522 657' -2,820 3,119' 1,967 4,270 -594 580 Oil-exporting countries 77 Middle East3 -6,270 -1,581 344 740 220 -301 -607 1,336 -14 -290 28 Africa4 -101 7 1 2 1 0 -2 1 1 0 1. Estimated official and private transactions in marketable U.S. Treasury 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and securities with an original maturity of more than 1 year. Data are based on United Arab Emirates (Trucial States). monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and 4. Comprises Algeria, Gabon, Libya, and Nigeria, notes held by official institutions of foreign countries. 2. Includes U.S. Treasury notes publicly issued to private foreign residents denominated in foreign currencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on July 31, 1986 Rate on July 31, 1986 Rate on July 31, 1986 CCoouunnttrryy CCoouunnttrryy CCoouunnttrryy Per- Month Per- Month Per- Month cent effective cent effective cent effective 444444......000000 AAAAAAuuuuuugggggg...... 111111999999888888555555 777777......000000 JJJJJJuuuuuunnnnnneeeeee 111111999999888888666666 888...000 JJJuuunnneee 111999888333 888888......000000 MMMMMMaaaaaayyyyyy 111111999999888888666666 GGeerrmmaannyy,, FFeedd.. RReepp.. ooff ...... 333333......555555 MMMMMMaaaaaarrrrrr...... 111111999999888888666666 444...000 MMMaaarrr... 111999888333 444444999999......000000 MMMMMMaaaaaarrrrrr...... 111111999999888888111111 IIttaallyy 111111222222......000000 MMMMMMaaaaaayyyyyy 111111999999888888666666 888888......666666333333 JJJJJJuuuuuullllllyyyyyy 111111999999888888666666 333333......555555 AAAAAApppppprrrrrr...... 111111999999888888666666 888...000 OOOcccttt... 111999888555 777777......000000 OOOOOOcccccctttttt...... 111111999999888888333333 444444......555555 MMMMMMaaaaaarrrrrr...... 111111999999888888666666 1. As of the end of February 1981, the rate is that at which the Bank of France or makes advances against eligible commercial paper and/or government commerdiscounts Treasury bills for 7 to 10 days. cial banks or brokers. For countries with more than one rate applicable to such 2. Minimum lending rate suspended as of Aug. 20, 1981. discounts or advances, the rate shown is the one at which it is understood the NOTE. Rates shown are mainly those at which the central bank either discounts central bank transacts the largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1986 CCoouunnttrryy,, oorr ttyyppee 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July 1 Eurodollars 9.57 10.75 8.27 8.02 7.89 7.42 6.80 6.86 6.95 6.54 2 United Kingdom 10.06 9.91 12.16 12.78 12.60 11.70 10.43 10.16 9.70 9.91 3 Canada 9.48 11.29 9.64 10.23 11.81 10.94 9.57 8.60 8.72 8.45 4 Germany 5.73 5.96 5.40 4.65 4.47 4.49 4.48 4.58 4.59 4.61 5 Switzerland 4.11 4.35 4.92 4.08 3.85 3.84 4.04 4.32 4.96 4.80 6 Netherlands 5.58 6.08 6.29 5.71 5.74 5.44 5.23 5.76 5.90 5.69 7 France 12.44 11.66 9.91 8.95 8.81 8.28 7.66 7.21 7.23 7.13 8 Italy 18.95 17.08 14.86 14.88 15.91 16.05 13.62 12.35 11.78 11.70 9 Belgium 10.51 11.41 9.60 9.75 9.75 9.75 8.51 7.90 7.27 7.25 10 Japan 6.49 6.32 6.47 6.54 6.04 5.47 4.85 4.58 4.64 4.62 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • October 1986 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1986 CCoouunnttrryy//ccuurrrreennccyy 11998833 11998844 11998855 Feb. Mar. Apr. May June July 1 Australia/dollar1 90.14 87.937 70.026 69.93 70.79 72.28 72.72 68.89 62.91 2 Austria/schilling 17.968 20.005 20.676 16.389 15.976 15.965 15.667 15.699 15.117 3 Belgium/franc 51.121 57.749 59.336 47.748 46.603 46.394 45.497 45.633 44.304 4 Brazil/cruzeiro 573.27 1841.50 6205.10 13020.00 13.843 13.84 13.84 13.84 13.84 5 Canada/dollar 1.2325 1.2953 1.3658 1.4043 1.4009 1.3879 1.3757 1.3899 1.3808 6 China, P.R./yuan 1.9809 2.3308 2.9434 3.2152 3.2202 3.2143 3.2014 3.2115 3.6435 7 Denmark/krone 9.1483 10.354 10.598 8.6048 8.4096 8.3928 8.2479 8.2822 8.0635 8 Finland/markka 5.5636 6.0007 6.1971 5.2465 5.1517 5.1235 5.0967 5.1954 5.0744 9 France/franc 7.6203 8.7355 8.9799 7.1575 6.9964 7.2060 7.0967 7.1208 6.9323 10 Germany/deutsche mark 2.5539 2.8454 2.9419 2.3317 2.2752 2.2732 2.2277 2.2337 2.1517 11 Greece/drachma 87.895 112.73 138.40 143.48 141.43 142.50 139.64 140.98 138.40 12 Hong Kong/dollar 7.2569 7.8188 7.7911 7.8042 7.8125 7.7957 7.8080 7.8107 7.8123 13 India/rupee 10.1040 11.348 12.332 12.370 12.289 12.393 12.466 12.599 12.508 14 Ireland/pound1 124.81 108.64 106.62 129.79 132.87 133.71 136.62 135.68 139.00 15 Italy/lira 1519.30 1756.10 1908.90 1588.21 1548.43 1559.45 1528.50 1533.10 1478.31 16 Japan/yen 237.55 237.45 238.47 184.85 178.69 175.09 167.03 167.54 158.61 17 Malaysia/ringgit 2.3204 2.3448 2.4806 2.4704 2.5367 2.5981 2.5978 2.6231 2.6455 18 Netherlands/guilder 2.8543 3.2083 3.3184 2.6343 2.5678 2.5629 2.5082 2.5154 2.4236 19 New Zealand/dollar1 66.790 57.837 49.752 53.177 52.820 56.127 56.666 54.585 53.176 20 Norway/krone 7.3012 8.1596 8.5933 7.2789 7.1711 7.1603 7.4106 7.6117 7.4800 21 Portugal/escudo 111.610 147.70 172.07 152.63 149.40 150.79 149.12 151.09 148.67 22 Singapore/dollar 2.1136 2.1325 2.2008 2.1401 2.1600 2.1880 2.2157 2.2232 2.1861 23 South Africa/rand1 89.85 69.534 45.57 47.94 49.04 48.77 45.67 39.49 39.04 24 South Korea/won 776.04 807.91 861.89 888.57 886.66 887.95 889.09 890.74 888.59 25 Spain/peseta 143.500 160.78 169.98 147.31 143.06 144.11 141.62 142.91 137.58 26 Sri Lanka/rupee 23.510 25.428 27.187 27.596 27.623 27.791 27.932 27.955 28.065 27 Sweden/krona 7.6717 8.2706 8.6031 7.3997 7.2610 7.2433 7.1458 7.2124 7.0715 28 Switzerland/franc 2.1006 2.3500 2.4551 1.9547 1.9150 1.9016 1.8538 1.8406 1.7445 29 Taiwan/dollar n.a. 39.633 39.889 39.239 39.027 38.689 38.460 38.163 38.119 30 Thailand/baht 22.991 23.582 27.193 26.492 26.418 26.429 26.327 26.400 26.204 31 United Kingdom/pound1 151.59 133.66 129.74 142.97 146.74 149.85 152.11 150.85 150.71 MEMO 32 United States/dollar2 125.34 138.19 143.01 118.77 116.05 115.67 113.27 113.77 110.38 1. Value in U.S. cents. 3. Currency reform. 2. Index of weighted-average exchange value of U.S. dollar against currencies NOTE. Averages of certified noon buying rates in New York for cable transfers. of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 Data in this table also appear in the Board's G.5 (405) release. For address, see global trade of each of the 10 countries. Series revised as of August 1978. For inside front cover. description and back data, see "Index of the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on p. 700 of the August 1978 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

70 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH MANUEL H. JOHNSON, 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 DONALD L. KOHN, Deputy Staff Director STEVEN M. ROBERTS, Assistant to the Chairman NORMAND R.V. BERNARD, Special Assistant to the Board BOB S. MOORE, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS LEGAL DIVISION JAMES L. KICHLINE, Director MICHAEL BRADFIELD, General Counsel EDWARD C. ETTIN, Deputy Director J. VIRGIL MATTINGLY, JR., Deputy General Counsel MICHAEL J. PRELL, Deputy Director RICHARD M. ASHTON, Associate General Counsel JARED J. ENZLER, Associate Director OLIVER IRELAND, Associate General Counsel DAVID E. LINDSEY, Associate Director RICKI R. TIGERT, Assistant General Counsel ELEANOR J. STOCKWELL, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel THOMAS D. SIMPSON, Deputy Associate Director LAWRENCE SLIFMAN, Deputy Associate Director MARTHA BETHEA, Assistant Director OFFICE OF THE SECRETARY SUSAN J. LEPPER, Assistant Director RICHARD D. PORTER, Assistant Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Assistant Director BARBARA R. LOWREY, Associate Secretary LEVON H. GARABEDIAN, Assistant Director JAMES MCAFEE, Associate Secretary (Administration) DIVISION OF CONSUMER DIVISION OF INTERNATIONAL FINANCE AND COMMUNITY AFFAIRS EDWIN M. TRUMAN, Director GRIFFITH L. GARWOOD, Director LARRY J. PROMISEL, Senior Associate Director GLENN E. LONEY, Assistant Director CHARLES J. SIEGMAN, Senior Associate Director ELLEN MALAND, Assistant Director DAVID H. HOWARD, Deputy Associate Director DOLORES S. SMITH, Assistant Director ROBERT F. GEMMILL, Staff Adviser PETER HOOPER III, Assistant Director KAREN H. JOHNSON, Assistant Director DIVISION OF BANKING RALPH W. SMITH, JR., Assistant Director SUPERVISION AND REGULATION 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 FRASER http://fraser.stlo1u.i sOfend l.ooarng /f rom the Federal Reserve Bank of Richmond. Federal Reserve Bank of St. Louis

and Official Staff MARTHA R. SEGER H. ROBERT HELLER 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 THE EXECUTIVE DIRECTOR FOR INFORMATION RESOURCES MANAGEMENT ALLEN E. BEUTEL, Executive Director STEPHEN R. MALPHRUS, Assistant Director DIVISION OF HARDWARE AND SOFTWARE SYSTEMS BRUCE M. BEARDSLEY, Director THOMAS C. JUDD, Assistant Director ELIZABETH B. RIGGS, Assistant Director ROBERT J. ZEMEL, Assistant Director DIVISION OF APPLICATIONS DEVELOPMENT AND STATISTICAL SERVICES WILLIAM R. JONES, Director DAY W. RADEBAUGH, Assistant Director RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • October 1986 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL MANUEL H. JOHNSON EMMETT J. RICE ROGER GUFFEY THOMAS C. MELZER MARTHA R. SEGER H. ROBERT HELLER FRANK E. MORRIS HENRY C. WALLICH KAREN N. HORN NORMAND R.V. BERNARD, Assistant Secretary RICHARD G. DAVIS, Associate Economist MICHAEL BRADFIELD, General Counsel THOMAS E. DAVIS, Associate Economist JAMES H. OLTMAN, Deputy General Counsel DONALD L. KOHN, Associate Economist JAMES L. KICHLINE, Economist DAVID E. LINDSEY, Associate Economist EDWIN M. TRUMAN, Economist (International) ALICIA H. MUNNELL, Associate Economist ANATOL B. BALBACH Associate Economist MICHAEL J. PRELL, Associate Economist JOHN M. DAVIS, 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. BOWEN, 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

73 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

74 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY Mail Stop 138, Board of Governors of the Federal Reserve UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one System, Washington, D.C. 20551. When a charge is indicat- address, $1.50 each. ed, remittance should accompany request and be made THE BANK HOLDING COMPANY MOVEMENT TO 1978: A payable to the order of the Board of Governors of the Federal COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to Reserve System. Remittance from foreign residents should one address, $2.25 each. be drawn on a U.S. bank. Stamps and coupons are not INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; accepted. 10 or more to one address, $1.25 each. PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. $13.50 each. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: TIONS. 1984. 120 pp. REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL ANNUAL REPORT. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. ANNUAL REPORT: BUDGET REVIEW, 1985-86. FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or ed at least monthly. (Requests must be prepaid.) $2.00 each in the United States, its possessions, Canada, Consumer and Community Affairs Handbook. $60.00 per and Mexico; 10 or more of same issue to one address, year. $18.00 per year or $1.75 each. Elsewhere, $24.00 per Monetary Policy and Reserve Requirements Handbook. year or $2.50 each. $60.00 per year. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint Securities Credit Transactions Handbook. $60.00 per year. of Part I only) 1976. 682 pp. $5.00. Federal Reserve Regulatory Service. 3 vols. (Contains all BANKING AND MONETARY STATISTICS. 1941-1970. 1976. three Handbooks plus substantial additional material.) 1,168 pp. $15.00. $175.00 per year. ANNUAL STATISTICAL DIGEST Rates for subscribers outside the United States are as 1974-78. 1980. 305 pp. $10.00 per copy. follows and include additional air mail costs: 1981. 1982. 239 pp. $ 6.50 per copy. Federal Reserve Regulatory Service, $225.00 per year. 1982. 1983. 266 pp. $ 7.50 per copy. Each Handbook, $75.00 per year. 1983. 1984. 264 pp. $11.50 per copy. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A 1984. 1985. 254 pp. $12.50 per copy. MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. FEDERAL RESERVE CHART BOOK. Issued four times a year in WELCOME TO THE FEDERAL RESERVE. February, May, August, and November. Subscription PROCESSING AN APPLICATION THROUGH THE FEDERAL REincludes one issue of Historical Chart Book. $7.00 per SERVE SYSTEM. August 1985. 30 pp. year or $2.00 each in the United States, its possessions, WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. Canada, and Mexico. Elsewhere, $10.00 per year or 93 pp. $2.50 each. $3.00 each. HISTORICAL CHART BOOK. Issued annually in Sept. Subscription to the Federal Reserve Chart Book includes one issue. $1.25 each in the United States, its possessions, Canada, and Mexico; 10 or more to one address, $1.00 CONSUMER EDUCATION PAMPHLETS each. Elsewhere, $1.50 each. Short pamphlets suitable for classroom use. Multiple copies SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- available without charge. RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $13.50 per year Alice in Debitland or $.35 each. Elsewhere, $20.00 per year or $.50 each. Consumer Handbook on Adjustable Rate Mortgages THE FEDERAL RESERVE ACT, as amended through August 31, Consumer Handbook to Credit Protection Laws 1985. with an appendix containing provisions of certain The Equal Credit Opportunity Act and Business Credit other statutes affecting the Federal Reserve System. Fair Credit Billing 576 pp. $7.00. Federal Reserve Glossary REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- Guide to Federal Reserve Regulations ERAL RESERVE SYSTEM. How to File A Consumer Credit Complaint ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— If You Borrow To Buy Stock Regulation Z) Vol. I (Regular Transactions). 1969. 100 If You Use A Credit Card pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each Series on the Structure of the Federal Reserve System volume $2.25; 10 or more of same volume to one The Board of Governors of the Federal Reserve System address, $2.00 each. The Federal Open Market Committee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

75 Federal Reserve Bank Board of Directors 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- Federal Reserve Banks DEUTSCHE MARK INTERVENTION, by Laurence R. Organization and Advisory Committees Jacobson. October 1983. 8 pp. What Truth in Lending Means to You 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- TWEEN EXCHANGE RATES AND INTERVENTION: A REVIEW OF THE TECHNIQUES AND LITERATURE, by Kenneth Rogoff. October 1983. 15 pp. PAMPHLETS FOR FINANCIAL INSTITUTIONS 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- Short pamphlets on regulatory compliance, primarily suit- VENTION, AND INTEREST RATES: AN EMPIRICAL INable for banks, bank holding companies and creditors. VESTIGATION, by Bonnie E. Loopesko. November 1983. Out of print. 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET The Board of Directors' Opportunities in Community Rein- INTERVENTION: A REVIEW OF THE LITERATURE, by vestment Ralph W. Tryon. October 1983. 14 pp. Out of print. The Board of Directors' Role in Consumer Law Compliance 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Combined Construction/Permanent Loan Disclosure and INTERVENTION: APPLICATIONS TO CANADA, GERMA- Regulation Z NY, AND JAPAN, by Deborah J. Danker, Richard A. Community Development Corporations and the Federal Re- Haas, Dale W. Henderson, Steven A. Symansky, and serve Ralph W. Tryon. April 1985. 27 pp. Out of print. Construction Loan Disclosures and Regulation Z 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- Finance Charges Under Regulation Z MY, by Darrell Cohen and Peter B. Clark. January How to Determine the Credit Needs of Your Community 1984. 16 pp. Out of print. Regulation Z: The Right of Rescission 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF The Right to Financial Privacy Act FINANCIAL DEREGULATION, INTERSTATE BANKING, Signature Rules in Community Property States: Regulation B AND FINANCIAL SUPERMARKETS, by Stephen A. Signature Rules: Regulation B Rhoades. February 1984. Out of print. Timing Requirements for Adverse Action Notices: Regula- 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDEtion B LINES, AND THE LIMITS OF CONCENTRATION IN LO- What An Adverse Action Notice Must Contain: Regulation B CAL BANKING MARKETS, by James Burke. June 1984. Understanding Prepaid Finance Charges: Regulation Z 14 pp. Out of print. 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN THE UNITED STATES, by Thomas D. Simpson and Patrick M. Parkinson. August 1984. 20 pp. STAFF STUDIES.- Summaries Only Printed in the 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF Bulletin THE LITERATURE, by John D. Wolken. November Studies and papers on economic and financial subjects that 1984. 38 pp. Out of print. are of general interest. Requests to obtain single copies of 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAYthe full text or to be added to the mailing list for the series MENT COSTS, by William Dudley. November 1984. may be sent to Publications Services. 15 pp. Out of print. 142. MERGERS AND ACQUISITIONS BY COMMERCIAL BANKS, 1960-83, by Stephen A. Rhoades. December Staff Studies 115-125 are out of print. 1984. 30 pp. Out of print. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF THE ELECTRONIC FUND TRANSFER ACT: RECENT 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- SURVEY EVIDENCE, by Frederick J. Schroeder. April DENCE ON COMPETITION AND PERFORMANCE IN 1985. 23 pp. Out of print. BANKING MARKETS, by Timothy J. Curry and John T. 144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CON- Rose. Jan. 1982. 9 pp. SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- ING AND EQUAL CREDIT OPPORTUNITY LAWS, by KET INTERVENTION, by Donald B. Adams and Dale Gregory E. Elliehausen and Robert D. Kurtz. May W. Henderson. August 1983. 5 pp. 1985. 10 pp. 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 145. SERVICE CHARGES AS A SOURCE OF BANK INCOME VENTION: JANUARY-MARCH 1975, by Margaret L. AND THEIR IMPACT ON CONSUMERS, by Glenn B. Greene. August 1984. 16 pp. Out of print. Canner and Robert D. Kurtz. August 1985. 31 pp. Out 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- of print. 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. Out of print. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- by Thomas F. Brady. November 1985. 25 pp. VENTION: OCTOBER 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 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- T. Farr and Deborah Johnson. December 1985. 42 pp. TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF BLES: A REVIEW OF THE LITERATURE, by Victoria S. THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- Farrell with Dean A. DeRosa and T. Ashby McCown. TION RESULTS, by Flint Brayton and Peter B. Clark. January 1984. Out of print. December 1985. 17 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS Survey of Consumer Finances, 1983. 9/84. IN BANKING BEFORE AND AFTER ACQUISITION, by Bank Lending to Developing Countries. 10/84. Stephen A. Rhoades. April 1986. 32 pp. Survey of Consumer Finances, 1983: A Second Report. 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- 12/84. ING: A REEXAMINATION AND AN APPLICATION, by Union Settlements and Aggregate Wage Behavior in the John T. Rose and John D. Wolken. May 1986. 13 pp. 1980s. 12/84. The Thrift Industry in Transition. 3/85. A Revision of the Index of Industrial Production. 7/85. Financial Innovation and Deregulation in Foreign Industrial Countries. 10/85. REPRINTS OF BULLETIN ARTICLES Recent Developments in the Bankers Acceptance Market. Most of the articles reprinted do not exceed 12 pages. 1/86. The Use of Cash and Transaction Accounts by American Families. 2/86. Foreign Experience with Targets for Money Growth. 10/83. Financial Characteristics of High-Income Families. 3/86. Intervention in Foreign Exchange Markets: A Summary of U. S. International Transactions in 1985. 5/86. Ten Staff Studies. 11/83. Prices, Profit Margins, and Exchange Rates. 6/86. A Financial Perspective on Agriculture. 1/84. Agricultural Banks under Stress. 7/86. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

77 Index to Statistical Tables References are to pages A3-A68 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) BANKERS acceptances, 9, 23, 24 Dividends, corporate, 35 Bankers balances, 18-20 (See also Foreigners) Bonds (See also U.S. government securities) EMPLOYMENT, 45 New issues, 34 Eurodollars, 24 Rates, 24 Branch banks, 21, 55 FARM mortgage loans, 39 Business activity, nonfinancial, 44 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business expenditures on new plant and equipment, 36 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) Federal finance Debt subject to statutory limitation, and types and ownership of gross debt, 30 CAPACITY utilization, 46 Receipts and outlays, 28, 29 Capital accounts Treasury financing of surplus, or deficit, 28 Banks, by classes, 18 Treasury operating balance, 28 Federal Reserve Banks, 10 Federal Financing Bank, 28, 33 Central banks, discount rates, 67 Federal funds, 5, 17, 19, 20, 21, 24, 28 Certificates of deposit, 24 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 38, 39 Commercial banks, 16, 19 Federal Housing Administration, 33, 38, 39 Weekly reporting banks, 19-21 Federal Land Banks, 39 Commercial banks Federal National Mortgage Association, 33, 38, 39 Assets and liabilities, 18-20 Federal Reserve Banks Commercial and industrial loans, 16, 18, 19, 20, 21 Condition statement, 10 Consumer loans held, by type, and terms, 40, 41 Discount rates (See Interest rates) Loans sold outright, 19 U.S. government securities held, 4, 10, 11, 30 Nondeposit funds, 17 Federal Reserve credit, 4, 5, 10, 11 Real estate mortgages held, by holder and property, 39 Federal Reserve notes, 10 Time and savings deposits, 3 Federal Savings and Loan Insurance Corporation insured Commercial paper, 23, 24, 37 institutions, 26 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 44, 49 Finance companies Consumer installment credit, 40, 41 Assets and liabilities, 37 Consumer prices, 44, 50 Business credit, 37 Consumption expenditures, 51, 52 Loans, 40, 41 Corporations Paper, 23, 24 Nonfinancial, assets and liabilities, 36 Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 65 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 40 (See also Thrift institutions) Flow of funds, 42, 43 Currency and coin, 18 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 21 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 68 DEBITS to deposit accounts, 15 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18-21 Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 GOLD REAL estate loans Certificate account, 10 Banks, by classes, 16, 19, 20, 39 Stock, 4, 54 Financial institutions, 26 Government National Mortgage Association, 33, 38, 39 Terms, yields, and activity, 38 Gross national product, 51 Type of holder and property mortgaged, 39 Repurchase agreements, 5, 17, 19, 20, 21 Reserve requirements, 7 HOUSING, new and existing units, 49 Reserves Commercial banks, 18 INCOME, personal and national, 44, 51, 52 Depository institutions, 3, 4, 5, 12 Industrial production, 44, 47 Federal Reserve Banks, 10 Installment loans, 40, 41 U.S. reserve assets, 54 Insurance companies, 26, 30, 39 Residential mortgage loans, 38 Interest rates Retail credit and retail sales, 40, 41, 44 Bonds, 24 Consumer installment credit, 41 SAVING Federal Reserve Banks, 6 Flow of funds, 42, 43 Foreign central banks and foreign countries, 67 National income accounts, 51 Money and capital markets, 24 Savings and loan associations, 8, 26, 39, 40, 42 (See also Mortgages, 38 Thrift institutions) Prime rate, 23 Savings banks, 26, 39, 40 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 as.sets, 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 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 TAX receipts, federal, 29 MANUFACTURING 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 (See also Thrift institutions) Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 4, 10, 11, 30 Foreign and international holdings and transactions, 10, NATIONAL defense outlays, 29 30, 66 National income, 51 Open market transactions, 9 Outstanding, by type and holder, 26, 30 OPEN market transactions, 9 Rates, 24 U.S. international transactions, 53-67 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

79 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Joseph A. Baute Frank E. Morris 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 Owen B. Butler 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 E. William Nash, Jr. 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 Ruben M. Garcia Thomas H. Robertson SAN FRANCISCO 94120 Alan C. Furth Robert T. Parry Fred W. Andrew Carl E. Powell Los Angeles 90051 Richard C. Seaver Robert M. McGill Portland 97208 Paul E. Bragdon Angelo S. Carella Salt Lake City 84125 Don M. Wheeler E. Ronald Liggett Seattle 98124 John W. Ellis Gerald R. Kelly * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Helena • City Deai• (U VPaS, 0 . cz=> HAWAII 0 © 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. Fair Credit Billing - What TVuth In Lending Means ToYou Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis