Federal Reserve Bulletin, 1986-11

VOLUME 72 • NUMBER 11 • NOVEMBER 1986 FEDERAL RESERVE 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 745 RECENT DEVELOPMENTS 780 ANNOUNCEMENTS IN CORPORATE FINANCE Meeting of Consumer Advisory Council. This article surveys recent trends in the Informal hearing held on proposed investbalance sheets of nonfinancial firms, conment in Goldman, Sachs & Company. siders the contribution of new markets and products to these trends, and assesses the Proposal to modify the method of recoverimplications of these markets and products ing the cost of automated clearinghouse for the future. float and to establish a night-cycle surcharge to compensate for the higher operat- 757 THE CONSUMER ADVISORY COUNCIL ing costs. IN ITS FIRST DECADE: A PROFILE Admission of four state banks to member- This article presents a brief profile of the ship in the Federal Reserve System. Council's operations, describes the different ways in which the group fulfills its 781 RECORD OF POLICY ACTIONS OF THE statutory mandate, and indicates also how FEDERAL OPEN MARKET COMMITTEE the Council continues to explore new ways of providing effective assistance to the Fed- At its meeting on August 19, 1986, the eral Reserve Board and its staff. Committee adopted a directive that called for some slight easing in the degree of 766 TREASURY AND FEDERAL RESERVE reserve pressure, taking account of the possibility that such easing might be accom- FOREIGN EXCHANGE OPERATIONS plished through a reduction in the discount The dollar declined against most major currate. The members expected this approach rencies during the three months from May to policy implementation to be consistent through the end of July. with growth in M2 and M3 at annual rates of about 7 to 9 percent over the June-to- 770 INDUSTRIAL PRODUCTION September period. Over the same interval, growth in Ml was expected to moderate Industrial production edged up an estimated from the exceptionally large increase during 0.1 percent in August. the second quarter. With the prospective behavior of Ml remaining subject to unusu- 773 STATEMENT TO CONGRESS al uncertainty, the Committee again decid- Paul A. Volcker, Chairman, Board of Gov- ed not to specify a rate of expected growth ernors, discusses the state of the world in the operational paragraph of the directive economy, particularly the U.S. trade posi- but to continue to evaluate this aggregate in tion and our increasing international indebt- the light of the performance of the broader edness, and says that the policies of the aggregates and other factors. The Commit- United States and other countries must tee indicated that it might find somewhat recognize the interdependencies of national greater or somewhat lesser reserve restraint economies in the world today, before the acceptable over the intermeeting period de- Subcommittee on Trade of the House Com- pending on the decision with respect to the mittee on Ways and Means, September 24, discount rate and on such other factors as the behavior of the monetary aggregates, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

the strength of the business expansion, the A69 GUIDE TO TABULAR PRESENTATION, performance of the dollar in foreign ex- STATISTICAL RELEASES, AND SPECIAL change markets, progress against inflation, TABLES and conditions in domestic and international credit markets. The members agreed that A74 BOARD OF GOVERNORS AND STAFF the intermeeting range for the federal funds rate, which provides a mechanism for initi- A76 FEDERAL OPEN MARKET COMMITTEE ating consultation of the Committee when AND STAFF; ADVISORY COUNCILS its boundaries are persistently exceeded, should be left unchanged at 4 to 8 percent. A78 FEDERAL RESERVE BOARD PUBLICATIONS 787 LEGAL DEVELOPMENTS A8i INDEX TO STATISTICAL TABLES Various bank holding company, bank service corporation, and bank merger orders; A83 FEDERAL RESERVE BANKS, BRANCHES, and pending cases. AND OFFICES Ai FINANCIAL AND BUSINESS STATISTICS A84 MAP OF FEDERAL RESERVE SYSTEM A3 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A53 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Corporate Finance Frederick H. Jensen of the Board's Division of United States and abroad also has reduced the Research and Statistics prepared this article. cost of borrowing somewhat and provided firms Paula J. DeCubellis provided research assis- access to a more diversified base of creditors. In tance. addition, the growing use of new hedging instruments may allow firms to rely on short-term Recent years have seen dramatic changes in the funding with less exposure to interest rate movefinancial structure of U.S. businesses and in the ments. This article surveys these recent trends in variety of available financing techniques. Credit the balance sheets of nonfinancial firms, considdemands of U.S. nonfinancial firms have in- ers the contribution of new markets and products creased substantially, and large amounts of equi- to these trends, and assesses the implications of ty have been retired since 1984 in association these markets and products for the future. with mergers, leveraged buyouts, and other corporate restructurings. Moreover, although lower CAPITAL EXPENDITURES interest rates recently have spurred long-term AND INTERNAL FUNDS bond issuance, corporations still have a high proportion of their debt in short-term instru- The credit needs of nonfinancial firms are dictatments. These changes in firms' balance sheets ed in part by the excess of capital expenditures have led to a larger number of downgradings of over internally generated funds; this difference is corporate debt issues in recent years. known as the financing gap. The aggregate fi- Other financial indicators are more positive, nancing gap typically rises during periods of however. Despite the increased leverage of some economic expansion as capital expenditures outnonfinancial firms, rising stock prices have kept strip internal funds and declines during recestheir aggregate debt-to-equity ratio valued at sions as firms retrench. In conformance with this market relatively stable in recent years. And pattern, the financing gap widened markedly in lower interest rates have improved the ability of 1983 and 1984, despite strong profit growth, as businesses to service debt out of current earn- capital expenditures registered one of the sharpings. The growth of new markets both in the est expansions on record (chart 1). In those two years, fixed investment expenditures by nonfinancial firms increased substantially and busi- 1. The financing gap of nonfinancial corporations nesses began rebuilding their depleted inventories (chart 2). As the expansion progressed, however, capital outlays—especially spending on inventories— slowed while internally generated funds continued to rise at a moderate pace. Although slower sales growth and rises in labor compensation relative to output have combined to hold 1986 profits at roughly their mid-1984 levels, reductions in corporate tax rates enabled after-tax earnings to expand on balance over this period (chart 3). By allowing more generous deprecia- Quarterly data, seasonally adjusted annual rates. The financing gap tion charges to earnings and liberalizing the use is capital expenditures less internal funds. of investment tax credits, the Economic Recov- SOURCE. Federal Reserve flow of funds accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

746 Federal Reserve Bulletin • November 1986 2. Capital expenditures of nonfinancial corporations 3. Economic profits of nonfinancial corporations Billions of dollars Billions of dollars 1976 1978 1980 1982 1984 1986 Quarterly data, seasonally adjusted annual rates. Economic profits are reported profits plus the inventory valuation adjustment and the Quarterly data, seasonally adjusted annual rates. Total capital capital consumption adjustment. expenditures include fixed investment, inventory investment, and SOURCE. Federal Reserve flow of funds accounts. purchases of mineral rights from the U.S. government. Fixed investment includes expenditures on plant and equipment and investment in residential construction. SOURCE. Federal Reserve flow of funds accounts. centrated their borrowings in the short-term area. But with slower economic growth and ery Tax Act of 1981 sharply reduced the effective continued moderate inflation, interest rates fell tax burden for nonfinancial businesses. By 1986, in 1985 and over the first half of 1986, and the average corporate tax rate—the ratio of tax nonfinancial firms took advantage of lower bond accruals to economic profits—had fallen to less rates to issue record volumes of long-term debt. than 30 percent, reaching the lowest level in the This debt restructuring partially reversed the postwar period (chart 4). effect of borrowing trends of the previous dec- With the slowing of capital expenditures and ade, when firms had become increasingly reluccontinued expansion of internally generated tant to lock-in high nominal debt costs. Despite funds, the financing gap narrowed substantially, the recent improvement, the proportion of longaveraging less than 3 percent of total capital term to total debt on corporate balance sheets expenditures since the end of 1984. At this low remains low by historical standards (chart 5). level, the financing gap played only a small role Because the assets of many nonfinancial corin explaining total borrowing by nonfinancial porations are long-term by nature, heavy relifirms in the past couple of years. ance on short-term funding sources can expose these firms to the risk that debt costs would EXTERNAL FINANCING AND CORPORATE outstrip earnings if interest rates rise. Moreover, BALANCE SHEETS because of the surge in debt issuance and sizable Despite the relatively small financing gap, debt of U.S. nonfinancial corporations has increased 4. Effective average tax rate on economic profits of sharply in recent years (table 1). Since 1984, nonfinancial corporations much of this growth has been associated with a Percent wave of mergers, acquisitions, leveraged buyouts, and share repurchases that resulted in massive equity retirements. Roughly $100 billion of equity is estimated to have been retired in 1984 and again in 1985, far outstripping the volume of new shares offered in the marketplace, and equity retirements continued at a strong pace this year. Credit demands by firms rose substantially 1976 1978 1980 1982 1984 1986 as they relied heavily on debt to repurchase Quarterly data, seasonally adjusted annual rates. Economic profits shares. are reported profits plus the inventory valuation adjustment and the capital consumption adjustment. With interest rates rising in 1984, firms con- SOURCE. Federal Reserve flow of funds accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Corporate Finance 747 1. Net funds raised in markets by nonfinancial corporations, 1979-86 Billions of dollars Type of instrument 1979 1980 1981 1982 1983 1984 1985 1986' Short-term debt 66.9 41.2 70.7 36.5 29.1 122.1 60.5 18.5 Bank loans 44.5 28.7 43.5 39.7 18.0 77.0 35.6 24.0 Commercial paper 9.0 4.0 14.7 -6.1 -.8 21.7 14.6 -15.7 Finance company loans 10.2 5.5 9.2 2.0 8.9 20.8 15.8 10.8 Other2 3.2 3.1 3.4 .9 3.0 2.6 -5.5 -.6 Long-term debt 28.8 40.2 34.3 32.6 29.0 67.0 96.9 118.4 Bonds and notes3 27.3 38.5 36.2 33.8 25.5 66.7 96.5 115.9 Mortgages 1.5 1.7 -1.9 -1.2 3.5 .3 .4 2.5 Total debt 95.7 81.4 105.0 69.1 58.1 189.1 157.4 136.9 Equity -7.8 12.9 -11.5 11.4 28.3 -77.0 -81.6 -67.5 Total debt and equity 87.8 94.3 93.5 80.5 86.4 112.1 75.8 69.4 1. Half-year data at seasonally adjusted annual rates. 3. Includes bonds and notes issued abroad by U.S. corporations 2. Bankers acceptances and U.S. government loans. and tax-exempt bonds issued for the benefit of nonfinancial corporations. equity retirements in recent years, many firms condition of corporate balance sheets show some now are highly leveraged and would be vulnera- weakness, other indicators present a more posible to adverse economic or financial develop- tive view. For one thing, the surge in stock prices ments. If interest rates should rise significantly in since 1982 has sharply boosted the market value the future or if corporate earnings were curtailed, of equities relative to their book value. To the leveraged firms could experience difficulty in degree that stock prices are an accurate reflecservicing their debt. Along with the recent slow- tion of future earnings, higher share prices suging of corporate profits, such concerns have led gest that future earnings can support an expandto an increase in the number of downgradings of ed debt burden. After conversion to market corporate debt issues by the rating agencies since values, the ratio of debt to equity appears to have 1984 (chart 6). The wave of restructurings has stabilized in recent years, although it remains clearly contributed to this trend; roughly one high (chart 7). In addition, although the aggregate quarter of the downgradings in 1984 and 1985 ratio of debt to equity of nonfinancial corporawere in response to the increased leverage of tions has been boosted by firms involved in firms involved in mergers or other corporate restructurings, other businesses have taken adrestructurings. vantage of higher share prices to issue new Although these traditional measures of the stock; gross offerings of equities totaled a near 6. Rating changes on corporate bonds by Moody's Investors Service1 5. Ratio of long-term debt to total credit market debt at nonfinancial corporations Number • Upgradings • Downgradings Quarterly data, seasonally adjusted levels. Long-term debt includes 1. The number of changes in ratings on a corporation's highest all outstanding bonds, notes, and mortgages. Total credit market debt ranking debt issues. In April 1982 Moody's increased the number of includes long-term debt plus bank loans, commercial paper, finance rating categories by dividing most of its major categories into three company loans, bankers acceptances, and U.S. government loans subcategories. Since then, only changes from one major category to outstanding. another have been counted. SOURCE. Federal Reserve flow of funds accounts. 2. First half, annual rate not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

748 Federal Reserve Bulletin • November 1986 7. Ratio of debt of nonfinancial corporations to enabled nonfinancial firms to lower their borrowmarket value of equity1 ing costs to a degree. And the development of Ratio new markets for their securities may allow corporate borrowers to better withstand disturbances in any one credit market. DEVELOPMENTS IN U.S. CREDIT MARKETS In the United States, public offerings of low- HHHHHHHHRHHHRH 1962 1968 1974 1980 1986 rated debt have expanded remarkably. In addition, a market for medium-term notes has devel- 1. Quarterly data, seasonally adjusted levels. Ratio of total credit market debt outstanding to total equity shares outstanding, with both oped, and in recent years, tax-exempt debt components adjusted to reflect current market values. issued on behalf of private companies has provided nonfinancial firms with a growing source of record $351/2 billion in 1985 and have already low-cost funds. exceeded that pace in 1986. Moreover, the lower interest rates of recent Low-Grade Debt years have improved the ability of many firms to service debt out of current earnings. Thus, de- Traditionally, firms whose debt was rated below spite the increase in debt since 1983, the share of investment grade—Baa by Moody's or BBB by aggregate corporate income paid to net interest Standard and Poor's—had limited access to the has remained relatively stable. public bond markets. Their principal sources of Finally, these changes in corporate financing funds were commercial loans from banks or patterns have taken place in an environment of private placements of securities with large instirapid change in financial markets. The increased tutional investors. The growth of low-rated or volatility of interest and exchange rates in recent unrated bonds in public markets received a boost years has led to the development of a number of in the late 1970s and early 1980s from the renew financing and hedging vehicles that, if used duced earnings at insurance companies, which appropriately, enable firms and investors alike to are major purchasers of privately placed securibetter protect themselves against swings in these ties. Many corporations that might have placed rates. As a result, the continued heavy reliance securities privately turned to the public markets on short-term funding sources by nonfinancial during this period. But in the 1980s, the public firms may give a misleading picture of their market for low-grade debt has expanded despite exposure to adverse interest rate movements. a rebound in private placement activity. From Moreover, the use of some of these new products 1983 through mid-1986, public offerings of issues along with deregulation in the United States and that were either unrated or rated below investabroad has promoted the increased integration of ment grade by Moody's or by Standard and the world's capital markets. In light of the sub- Poor's totaled more than $70 billion, nearly 20 stantial rise in capital inflows to the United percent of total public issues. During the previ- States over the past few years associated with ous 10 years, the ratio of low-grade debt to total the growing U.S. external deficits, U.S. firms public issues was consistently less than 10 permight have increased borrowings from abroad in cent. any event. But the improved access to foreign Among the factors contributing to this trend is capital markets likely has contributed to the an increase in the supply of debt by firms recentincreased share of these borrowings in the form ly involved in a merger or restructuring; since of direct issuance of securities to foreign inves- 1983, such firms accounted for nearly half of the tors. Along with the growth of new markets for $70 billion of low-grade debt issues. Despite the corporate securities in the United States, the well-publicized use of "junk" bonds to finance direct access to foreign sources of credit has takeovers, most of the new low-grade bonds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Corporate Finance 749 issued by these firms were not for the purpose of example, they would be exercised if the firm's purchasing shares; the early financing of share stock had increased in value or if long-term retirements frequently was by short-term debt interest rates had fallen, thereby lowering the such as bank loans or commerical paper. Even cost of new debt issues. so, the resulting sharp increase in leverage Because investment banks have invested caused the debt issued subsequently by many of heavily in the research and development of new the restructured firms to be rated below invest- products and in marketing these instruments, the ment grade. supply of low-grade bonds with special features Investor acceptance of publicly traded low- could continue to grow. At the same time, there grade debt also appears to have increased. In is mounting concern that new investors may not part, this may be due to the growing number of be fully aware of the risks of these securities. firms whose debt has been downgraded; because Default rates have always been higher than on these firms were already well known, investors investment grade issues, but the higher yields on may have been more willing to purchase new low-grade bonds generally have compensated for issues of their debt than that of a less well known this risk. Nonetheless, during economic downfirm just entering the market. In addition, several turns, default rates on low-grade bonds tend to underwriting firms have made a considerable rise sharply, and investors in these issues have effort to market low-rated issues, and the inves- fared poorly. There is also concern that the tor base has expanded. Thrift institutions, for- attractiveness of this market may be encouraging eign financial institutions, and wealthy individ- firms to issue securities that previously would uals, along with insurance companies, have have been screened out because of their high reportedly invested in the new low-grade securi- risk. If riskier firms enter the market, default ties, and several mutual bond funds now special- rates could rise and investors' interest could ize in them. wane. Indeed, the recent well-publicized defaults Moreover, while most of the well-known firms of a few large issuers of low-grade debt might have issued straight debt, a number of innovative already have had an effect on this market. features have been added to the issues of newer firms entering the market, which may have helped increase investor interest. Some of this Medium-Term Notes debt is equity related, issued either in convertible form or with warrants attached that give the The public market for medium-term notes has investor an option to purchase the firm's stock at expanded recently. This instrument, which is a specified price. A hybrid type, the so-called unsecured corporate debt with a maturity of one "usable" bond, has been offered recently that to five years, is largely an extension of commercan be used at par to exercise a company's stock cial paper to longer maturities. Medium-term warrants. When coupled with the warrant, a notes originated in 1972, when the finance subusable bond retains the advantage of a convert- sidiaries of auto manufacturers found they had a ible—it can be exchanged for stock at par—but need for funds with maturities longer than those allows separate trading of the bond and the for commercial paper but shorter than those warrant. Bonds also have been issued that carry common in the bond market. The market revariable rates but that can be exchanged at the ceived a boost when large investment banks investor's option for bonds with a previously began setting up programs for other firms and specified fixed rate. Other innovative features started developing an investor base. Like cominclude bonds whose returns are pegged to vari- mercial paper, medium-term notes are tailored to ous commodity price indexes. By adding such suit investor preferences. Paper is made availembellishments, firms have in many cases been able continuously and dealers support a secondable to issue low-grade debt at lower rates. And, ary market in the instruments. As with commerif structured properly, the conditions under cial paper, borrowers may be able to reduce which the investors choose to exercise their costs by issuing securities publicly rather than options would be favorable to the firm; for relying on bank borrowings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

750 Federal Reserve Bulletin • November 1986 New issues of medium-term notes have grown third quarter and is expected to surge over the rapidly in recent years, from roughly $51/2 billion remainder of the year. Nonetheless, the act in 1983 to more than $13 billion in 1985; new sharply reduces the aggregate volume that may offerings exceeded $10 billion in the first half of be issued in future years, and IDBs will become a 1986. Large finance subsidiaries of auto and much less important source of funding for nonfiother manufacturing firms have been the main nancial corporations. borrowers, but nonfinancial corporations have entered the market as well: during the first six DEVELOPMENTS IN THE EUROMARKETS months of 1986, issues of medium-term notes of nonfinancial firms totaled slightly more than $2 One of the more striking developments in recent billion. To date, most medium-term notes have years has been the increasing integration of the been sold in the United States, although a few world's capital markets. Deregulation in the U.S. firms have offered these notes in the United States and abroad and the growing use of Euromarkets. new financing and hedging techniques have enabled borrowers worldwide to issue growing amounts of securities outside their domestic mar- Industrial Development Bonds kets. As U.S. credit demands have outstripped Tax-exempt industrial development bonds domestic savings and the associated U.S. exter- (IDBs) have been an important source of low- nal deficits have grown, the improved access to cost financing for corporations in recent years. foreign capital markets by U.S. borrowers likely IDBs are issued by state and local financing has facilitated the increasing capital inflows to authorities for the benefit of private businesses this country. One aspect of this trend is the rapid to finance commercial and industrial projects. increase in debt issued in foreign financial cen- The bulk of the IDBs issued on behalf of nonfi- ters by U.S. corporations. Well-known U.S. nancial firms are revenue bonds secured by the businesses have been attracted to the Euromarproperty or receipts of the project being financed ket primarily because they frequently can issue or by the industrial user of the funds rather than debt at rates below those on securities with by the municipal or state issuer. In general, the comparable maturities in the United States. And proceeds from IDBs must be used for specified by diversifying their base of investors, U.S. purposes, such as transportation facilities, elec- firms may have become better insulated from tric or gas generating facilities, or pollution con- disturbances in domestic credit markets. trol projects. Because of the cost advantage associated with Euronotes its tax-exempt status, IDB financing grew enormously in the 1970s and 1980s. The tax-exempt A recent innovation in the Euromarkets has been debt of nonfinancial corporations grew from rela- the emergence of short-term unsecured corpotively small amounts in 1970 to more than $125 rate debt, or Euronotes. Initially, most Eurobillion by year-end 1985, nearly one-sixth of total notes were issued under a medium-term underlong-term debt outstanding of this sector. Grow- writing commitment by a bank or group of banks, ing public concern about the use of tax subsidies an arrangement that developed from syndicated for private purpose financing led Congress to short- and intermediate-term bank loans. The include in the Tax Reform Act of 1986 stricter commitment generally involves a three- to fivelimits on the type and amount of such bonds that year agreement on the part of a group of banks may be issued within each state. As debate on either to purchase any notes the issuer fails to this issue continued in Congress, the uncertainty sell or to provide credit to the note issuer at a over its final outcome led nonfinancial firms to specified markup over market rates for any unsharply curtail new issues of IDBs over the first sold portion of the notes. Banks typically also half of 1986. Because the act still allows substan- agree to act as placing agents for the issuer, but tial amounts to be issued in 1986, the supply of the placing agents need not be the same group as private purpose revenue bonds picked up in the the underwriting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Corporate Finance 751 Notes are issued in bearer form and initially quality three-month U.S. commercial paper by were for fixed maturities, typically one, three, or about 40 basis points. six months. At first, Euronotes tended to be In the last couple of years, however, the priced off the London interbank offered rate spread of LIBOR over U.S. commercial paper (LIBOR). The principal investors were commer- rates has narrowed significantly, to about 10 cial banks, sometimes the underwriting or plac- basis points in June 1986. Moreover, as the ing agent banks themselves, although other market has developed, the investor base has investors oriented toward LIBOR-based instru- expanded. In early 1986 some dealers with strong ments, such as bank depositors, also purchased placement capabilities claimed that as much as some of the securities. By guaranteeing the issu- 50 to 75 percent of new issues in the Euromarket er's ability to roll over outstanding notes, the were being sold to nonbanks. And as European underwriting commitment was intended to in- investors have become increasingly familiar with crease the attractiveness of Euronotes to inves- this market, some of the larger, well-known tors outside the underwriting panel. corporate issuers reportedly have been able to More recently, dealers have developed note issue sizable amounts of Eurocommercial paper programs without the backing of a syndicate of at rates below LIBOR and equal to or lower than underwriting banks, known generally as Euro- those available in the U.S. commercial paper commercial paper programs. The issuers may market, particularly in longer maturities, where acquire backup liquidity in the form of a bank the U.S. market is very thin. As a result, both line of credit to support their note issues; but in financial and nonfinancial U.S. corporations the Eurocommercial paper programs, backup have announced a large number of new Euronote agreements are separate from the placing ar- programs in the last year. Some of the programs rangements rather than being part of a committed are global in that firms quote the same rates daily underwriting facility. The dealers provide liquid- in both the U.S. and offshore markets. Although ity to the market for their issuers' paper by data are not available on amounts issued under agreeing to repurchase notes from investors be- these programs, market participants have estifore maturity, and some dealers make a second- mated that U.S. businesses accounted for as ary market for their customers' notes by actively much as $5 to $6 billion of the $30 billion in quoting two-way prices for outstanding issues. In Euronotes outstanding in mid-1986. an effort to attract new investors, features previ- The European market for commercial paper ously found only in the U.S. commercial paper should be further stimulated by the deregulation market have been added. Maturities of Eurocom- of markets for unsecured short-term debt denommercial paper can be tailored to suit the inves- inated in the pound sterling, the Dutch guilder, tor's preference and, in the case of some of the and the French franc. As a result, the integration larger programs, paper is made available contin- that occured previously between the U.S. and uously, with bid and offer prices quoted daily for European markets for long-term corporate debt all maturities. is likely to spread to the short-term markets as Euronotes outstanding under these two types well. of programs have grown from very small amounts at the end of 1983 to an estimated $30 billion by mid-1986, with most of the recent Eurobonds growth in non-underwritten Eurocommercial paper. Until very recently, U.S. corporations had Eurobonds are debt issued by a variety of bornot been large issuers. Because the dominant rowers, sovereign and private, outside their investors initially were banks, Euronotes tended home markets. Although not a new product, they to be priced at spreads above LIBOR that made have become an increasingly important source of these instruments relatively costly, especially for international finance in recent years. Eurobonds corporations with established U.S. commercial are issued in a number of currencies, but roughly paper programs. In mid-1984, for example, three- 70 to 75 percent are in U.S. dollars. The main month LIBOR rates exceeded those on high attraction of Eurobonds is their low cost. Be- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

752 Federal Reserve Bulletin • November 1986 2. Gross bond issuance by U.S. firms in foreign ies, U.S. firms did not fully exploit the rate markets, 1978-86 differential and the markets remained segment- Millions of dollars ed. Some firms may have been reluctant to undertake the expense of establishing an offshore All Nonfinancial Financial YYeeaarr corporations corporations corporations financing subsidiary and the tax consequences of passing interest payments through a foreign sub- 1978 1,116 n.a. n.a. 1979 2,868 n.a. n.a. sidiary were not clearcut. 1980 4,104 n.a. n.a. 1981 6,180 n.a. n.a. In July 1984 the withholding tax was removed 1982 13,632 n.a. n.a. and the U.S. Treasury established procedures 1983 8,340 4,116 4,224 1984 22,608 10,068 12,540 enabling U.S. corporations to issue bearer bonds 1985 37,782 15,117 22,662 19861 49,068 24,630 24,432 directly to foreign investors. Since then, Eurobond issuance by U.S. firms has increased mark- 1. Half-year data at annual rates, not seasonally adjusted, edly. Because the bulk of the new Euroissues n.a. Not available. were by firms that previously had issued bonds through their foreign subsidiaries, the removal of cause of variances in tax treatment or other the withholding tax may not have been the regulations across countries or because of differ- dominant factor accounting for this pickup. ences in investor preferences, borrowers fre- Rather, this rapid expansion may simply reflect quently find that they can issue Eurobonds at the surge in overall bond issuance during this rates lower than those available in their home period by U.S. corporations. Nonetheless, since markets. 1984, the proportion of Eurobonds to total gross The rate advantage of the Euromarkets over bond issuance by U.S. firms has risen, and the U.S. bond markets has often been substantial in rate advantage of Eurodollar bonds over domesrecent years, and the Eurobond volume of U.S. tic issues has declined steadily. In addition to the issuers has increased remarkably, from negligi- removal of the withholding tax, the development ble amounts in the late 1970s to nearly a $50 of interest rate and currency "swaps" has conbillion annual pace over the first half of 1986 tributed to the increased supply of Eurobonds (table 2). Nonfinancial firms have accounted for and to the reduction in market segmentation over about 45 percent of the gross issuance since this period. 1983. The rate advantage for U.S. firms has arisen from several sources. Foreign investors wanting dollar-denominated bonds often prefer SWAPS AND OTHER HEDGING PRODUCTS the anonymity of bearer bonds over the registered form available in the United States. Or, By enabling firms to arbitrage more effectively they may simply wish to use the established across markets, the introduction of interest rate distribution channels in their own countries. In and currency swaps likely has stimulated the addition, before 1984, some foreign investors growth of certain types of debt, such as Eurowere discouraged from purchasing bonds direct- bonds, in recent years. And the resulting arbily in the United States because the borrowers trage activity may have contributed to the inwithheld 30 percent of the interest payments to creasing integration of the world capital markets meet U.S. tax requirements. Because of a num- and to the narrowing of interest rate differentials ber of tax treaties, withholding taxes were not across markets. The use of swaps and other uniformly applied. Nonetheless, U.S. firms is- hedging vehicles to protect against interest and sued most of their Eurobonds through financing exchange rate volatility also is growing. subsidiaries in the Netherland Antilles; these corporations interpreted an existing tax treaty with the Netherlands Antilles as permitting any Interest Rate and Currency Swaps interest payments passed through a subsidiary in that country to be exempt from the withholding The early interest rate swaps, which were initiatrequirements. Despite the use of these subsidiared in the Euromarkets in 1981, usually involved a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Corporate Finance 753 highly rated firm, with a relative rate advantage that effectively allows them to exchange their in issuing Eurobonds but in need of variable-rate interest rate payments. By doing so, each firm is funding, and a lower-rated firm in need of fixed- able to issue debt in the market where it enjoys a rate funds. The relative advantage existed in part relative rate advantage while servicing the type because for lower-rated borrowers, investors of debt it prefers at a lower all-in cost. tend to require a higher risk premium for longer The same end could be achieved by the device maturities. In addition, European investors tend of back-to-back loans; that is, the firm that issues to be more oriented to well-known names than the Eurobond could make a fixed-rate loan to the their U.S. counterparts, and a lesser-known other firm, which in turn borrows at a variable name may be at a substantial rate disadvantage in rate and makes a variable-rate loan to the Eurothe Eurobond markets relative to the rate their bond issuer. Because there is no exchange of bank might charge for a variable-rate loan. principal under an interest rate swap, however, To effect the swap, the highly rated firm issues the swap arrangement sharply reduces the credit a Eurobond with a fixed interest rate and the risk, and the consequent need for capital, to the lower-rated firm either issues short-term debt or two parties. Nonetheless, the risk remains that acquires a long-term loan with a variable interest either party could default on its agreement to pay rate; the two firms then enter into an agreement interest to the other. If either firm defaults, the other is no longer obligated to pay the interest on its side of the swap agreement and there is no loss of principal. Even so, the firm is still obligat- INTEREST RATE SWAP ed to meet the payments on its original debt and is therefore exposed to adverse rate movements. To illustrate the mechanics of an interest rate swap, suppose a highly rated firm, A, can borrow in the And if interest rates have moved since it entered Eurobond market at IOV2 percent or at a variable rate of into the swap, the firm could suffer a loss if it LIBOR plus V2 percent. Another firm, B, could borrow replaces its hedge. in the bond market at 12 percent or at LIBOR plus 1 percent. Thus, firm A can issue debt more cheaply than Because of this residual credit risk, most swap firm B in both markets, but its advantage is 1 percentage agreements now involve a commercial or investpoint greater in the fixed-rate market. If the firms issue debt in the markets where they have a relative advantage ment bank as an intermediary. Such an intermeand enter into a swap agreement with each other, they diary bank would enter into offsetting swaps with can lower their total cost of debt, in effect splitting the 1 both parties and earn a fee for the resulting credit point difference between them. That is, firm A could issue the Eurobond and agree to pay firm B a variable risk in the form of a spread between the two rate equal to LIBOR applied to a notional principal equal swap agreements. There is also a trend toward to the amount of its debt. Firm B in turn would borrow at a variable rate and agree to pay A a fixed rate of IOV2 the use of third-party insurers who, for a fee, will percent of the notional principal. In effect, firm A guarantee against the default of one of the parties transforms its fixed-rate debt into a variable-rate obliga- to the swap. tion and firm B converts its variable-rate debt into a fixed-rate obligation. In the process, firm A lowers its Whereas interest rate swaps are an exchange cost of variable rate funding V2 percent, in this case to of a stream of interest rates calculated on a LIBOR. And firm B also saves V2 percent on its fixed different basis, currency swaps are an exchange rate financing at an all-in cost of IIV2 percent—the IOV2 percent it pays firm A plus the 1 percent differential of liabilities based on different currencies. As between its cost of variable rate funds and the rate it with interest rate swaps, the original rationale receives from firm A. behind currency swaps was to provide borrowers with a means to reduce interest costs while W LIBOR achieving a desired currency exposure by each floating-rate payment party issuing debt in the currency in which it enjoys a comparative advantage and swapping fixed-rate payment the payment streams. In many cases, the arbitrage advantages are the result of regulatory differences across markets, as in the case of fixed-rate debt floating-rate debt 101/2% LIBOR + 1% capital controls that preclude the issuance of debt in particular markets. In other cases, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

754 Federal Reserve Bulletin • November 1986 arbitrage advantage may arise from differences the development of ever more innovative and across markets in investors' perceptions of the complex swap transactions; the supply of Eurocredit risk of the two firms. bonds with options and features designed to utilize these innovations has expanded. Eurobonds have emerged with options or forward Development of the Swap Market contracts indexed to U.S. or foreign Treasury securities or to foreign currencies attached. The development of the swap market undoubted- Some Eurobonds may be extended at the purly has stimulated growth in Eurobonds. Although chaser's option and others have been offered estimates vary widely, some market participants with returns that vary in response to movements report that as much as 50 to 75 percent of the in stock exchange or commodity indexes. These volume of new Eurobond issues in recent years options or forward contracts may be embedded, was swap-related. Initially, the typical Eurobond such as in a "dual currency" issue, in which issuer in a swap transaction was a U.S. or foreign interest payments are in one currency and the bank that could issue the debt at an advanta- principal is redeemed in another. Or they may be geous rate but needed variable-rate funding. As separable, such as with a straight debt issue with the market developed, however, it quickly be- a warrant attached that gives the purchaser the came obvious that any highly rated firm could right to purchase Treasury bonds at a set price at reduce its cost for short-term debt through a a specified date in the future. An active secondswap arrangement, and thus other large U.S. ary market for trading many of these detachable financial and nonfinancial corporations entered options has developed. the market. The market also expanded globally As these offshoots to the classical swaps proas firms began issuing debt in U.S. markets for liferated, it became apparent that the swap of the purpose of swapping the proceeds. payment streams based on different interest rate The global market for swaps has grown mark- indexes or currencies could provide corporations edly since its initiation, from an estimated $3 with an attractive hedging vehicle. An institution billion outstanding in early 1982 to more than with, say, a gap between existing fixed-rate $200 billion at the end of 1985, counting the assets and floating-rate debt could enter into a notional principal on both sides of the transac- swap agreement to help bridge that gap without tion. Large commercial and investment banks tying it to a specific new debt issue. Because a developed a marketmaking capability and began swap contract is essentially a strip of consecutive to "warehouse" swap contracts by booking one forward interest rate or exchange rate contracts, side of the transaction before an offsetting posi- its use as a hedging instrument is a natural tion could be arranged. As the market devel- outgrowth of this market. But with the great oped, these institutions offered numerous varia- diversity of customized arrangements, swaps tions on the original "plain vanilla" swap. In have become a relatively inexpensive and attracaddition to fixed/floating swaps, there are now tive tool of risk management. exchanges of floating rate payments based on different short-term indexes (basis swaps) and fixed-rate payments in one currency for floating Other Hedging Products rate payments in another. Some swaps may be extended or called. Other elaborations are for- Volatile rates of interest and foreign exchange ward contracts on swaps, in which the parties have led U.S. corporations to use other new agree to enter into the swap at a specified future hedging techniques in recent years. Growth in date, and options to enter into a swap at a the organized futures and options markets has specified future date. been well documented, but in addition, a wide As the volume and competitiveness of the variety of new hedging vehicles are being offered swap business has expanded, arbitrage spreads "over-the-counter" by commercial and investand transactions costs have tended to diminish. ment banks. As with interest rate swaps, the The search for profitable pockets of market advantage of this procedure is that the hedge can inefficiency has continued, however, leading to be customized to suit the customers' needs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in Corporate Finance 755 These new hedging vehicles include both for- statement, there is a growing need for more ward rate contracts and interest rate or currency standardized accounting and reporting treatment options. In a forward rate agreement, a firm with of these instruments. a known borrowing need at some date in the future can acquire a loan commitment from a commercial bank with the rate specified in ad- SUMMARY vance. Or a corporate treasurer with an anticipated cash flow can enter into a forward deposit Since the 1982 trough in economic activity, corcontract with a bank and lock in the rate of porate profits and cash flow of nonfinancial firms return. have expanded in line with capital outlays; thus, Customized interest rate and foreign currency in the aggregate, the need for external funds to options also have been popular hedging devices. finance investment has been small. Nonetheless, With an option, a bank conveys to a firm the in association with a wave of mergers and other right but not the obligation to enter into a finan- corporate restructurings beginning in 1984, borcial contract at a date in the future at a specified rowing by businesses has increased sharply price. For example, a residential or commercial while large amounts of equity have been retired. real estate developer could purchase an option In addition, although lower interest rates have that would guarantee a maximum rate on long- led recently to substantial increases in long-term term financing when the project was completed. debt, corporate use of short-term credit sources If funding subsequently became available at a has remained heavy by historical standards. lower cost, the developer could let the option A combination of highly leveraged positions expire. Similarly, a multinational firm with antic- and evidence of a slowing of profit growth in ipated revenues in foreign currencies can pur- some sectors has led rating agencies to downchase options that, for a fee, insure against losses grade an increasing number of corporate bond that would result if those currencies depreciated issues. More generally, the sharp increase in against its home currency. Option-like products corporate debt, large equity retirements, and the are also offered on loans in the form of interest continued heavy reliance on short-term funding rate caps; for a fee, a commercial or investment sources raise questions about the exposure of the bank will guarantee that the interest rate on a corporate sector as a whole to adverse movevariable-rate loan will not exceed a specified ments in interest rates or economic activity. maximum. Or, a firm may elect to reduce the Despite the apparent deterioration of some of markup on a variable-rate loan by agreeing that these traditional balance sheet measures, other the rate will not fall below a minimum, or aggregate indicators of corporate financial condi- "floor," rate over the maturity of the loan. tions produce a brighter picture. Even though Loans with combinations of caps and floors, or total equities outstanding of nonfinancial firms "collars," also are available. have fallen on balance because of corporate Along with the development of swaps, custom- restructurings, higher stock prices have led to a ized forward rate contracts and options provide near-record issuance of new shares recently. firms with an efficient means of managing inter- And the increased market value of corporate est rate and foreign exchange risk without alter- stocks has kept measures of debt-to-equity based ing the structure of assets or liabilities. This on market values relatively stable over the past suggests, among other things, that firms that use few years. Also, lower interest rates have imthese hedging vehicles appropriately can rely proved the ability of firms to service debt out of more heavily on short-term sources of funds current earnings. without increasing their exposure to higher inter- Growth in a number of new markets in the est rates. However, because forward contracts United States and abroad may have further lowand options are not recorded on a firm's balance ered the cost of debt financing. In the United sheet, their use makes it increasingly difficult to States, a market for medium-term notes has analyze a firm's financial condition using tradideveloped; and tax-exempt industrial developtional measures. Although these contracts may ment bonds have been an important source of be described in the footnotes to a firm's financial low cost funds for nonfinancial firms in recent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

756 Federal Reserve Bulletin • November 1986 years, although the Tax Reform Act of 1986 will The increasing use of swaps and the other new constrain further growth. The public market for hedging instruments also has promoted the intelow-rated debt also has grown markedly, en- gration of the world's capital markets, and this abling highly leveraged or less well known firms may have facilitated the larger capital inflows to to issue securities directly rather than relying on the United States associated with the sizable bank borrowings or private placements for their U.S. external deficit. As one element of these funds. Because the growth of these bonds has inflows, large U.S. firms have been issuing inoccurred during a period of relative economic creasing amounts of both long-term and shortstability, however, the strength of the issuers term debt to foreign investors. With a more under adverse conditions has not been fully diversified investor base, U.S. firms might be tested. If defaults on these securities were to better able to withstand shocks to any one fundrise, the market for them likely would be curbed. ing source, although these new markets have not Interest rate and currency swaps have become yet experienced large defaults and their liquidity an important means by which firms can hedge has yet to be confirmed. unwanted exposures. Forward rate contracts and As with the development of any new product, customized interest rate options are other hedg- it is possible that a period of growing losses or ing instruments that, if used appropriately, allow defaults may result in a temporary setback in firms to rely on short-term funding with less risk some of these markets. But with the increasing from adverse interest rate movements. Because investment by commercial and investment banks these instruments do not appear on a firm's in the research and development of new financial balance sheet, though, it is difficult to analyze instruments, along with the trend toward dereguthe degree to which corporate borrowers have lation in a number of important foreign financial adequately protected themselves against this centers, the pace of financial innovation is unrisk. likely to slacken. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

757 The Consumer Advisory Council in Its First Decade: An Overview Ann Marie Bray and Dolores S. Smith, Assistant Accordingly, a provision in the 1976 amend- Director, of the Board's Division of Consumer ments to the Equal Credit Opportunity Act called and Community Affairs prepared this article. for the creation of the Consumer Advisory Council to supersede the earlier body. The charter of the The Federal Reserve's Consumer Advisory Council directs it to advise and consult in the Council provides consumers and the financial exercise of the Board's functions under the Conservices industry with an important link to the sumer Credit Protection Act (CCPA)—including, nation's central bank. Created by the Congress, for example, the Truth in Lending, Equal Credit the Council advises the Federal Reserve Board Opportunity, and Electronic Fund Transfer on the implementation of federal laws governing Acts—and in other consumer-related matters. consumers' rights and responsibilities in their dealings with the financial services industry. The Council, a body of private citizens, reaches its Membership tenth anniversary this month. It can look back with satisfaction on the role it has played in The Board appoints 30 members to three-year providing a forum for public debate on many of terms on the Council, staggering the terms to the significant regulatory issues that have come ensure continuity. In naming replacements each before the Board in the past ten years. year, the Board takes care to complement the This article presents a brief profile of the background and expertise of those members who Council's- operations, describes the different remain, and from among them appoints the ways in which the group fulfills its statutory Council chairman and a vice chairman. The mandate, and indicates also how the Council Board seeks also to ensure the representation of continues to explore new ways of providing women and of minority groups, as well as a effective assistance to the Federal Reserve balanced geographic distribution of members. Board and its staff. Because of the high level of public interest in service on the Council, the Board through its appointments has been able to achieve a wide GETTING STARTED.- diversity of membership representing various A FRAMEWORK FOR DELIBERATIONS segments of the financial services industry, consumer and community organizations, state and In 1968 the Congress assigned the Federal Re- local government agencies responsible for conserve Board a leading role in the regulation of sumer affairs, and college and university faculconsumer financial services. The legislation that ties. (Additional information about the profesgave the Board rulewriting authority under the sional affiliations of Council members appears in Truth in Lending Act also established an adviso- the box on page 758.) ry committee to assist in drafting the regulation to implement the act. Later, with the expansion of the Board's responsibilities—to credit card Improvements to the Council's Operations rules, equal credit opportunity, fair credit billing rights, and other areas of financial services—the The history of the Council has been marked by Board suggested to the Congress that its adviso- an interest on the part of its members in finding ry group also should be given a broader mandate. ways to enhance the value of the Council's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

758 Federal Reserve Bulletin • November 1986 writing of regulations to implement legislation, PROFILE OF THE COUNCIL the enforcing of compliance by state chartered banks that are members of the Federal Reserve Affiliations The 114 members who have served thus far have System, and the handling of consumer comincluded bankers, thrift and credit union officials, plaints. The Board also regularly seeks the Counretailers, finance company and credit bureau executives, cil's views in other areas of consumer protection, attorneys who represent industry clients, legal services attorneys, national consumer advocates, community such as the advertising of interest rates under organizers, credit counselors, members of state Regulation Q (Interest on Deposits) and on isconsumer leagues, state and local government officials sues related to the implementation of the Comresponsible for consumer affairs, and college and university professors in the fields of law, economics, munity Reinvestment Act, the Fair Housing Act, business administration, finance, economic education, and other laws that the Board is responsible for and consumer research. enforcing. Meetings In addition to providing advice on issues that One- to two-day meetings, open to the public, are held at the Board has under active consideration, the the Federal Reserve Board's headquarters in Council has sometimes broadened its agenda to Washington, D.C., three times a year. include items not yet brought before the Board. Current committees Occasionally, the Council has also seen fit to Council chairman appoints members to serve on discuss an issue that falls only marginally under committees covering long-range planning, variable-rate lending, changes in financial organization, community the Board's auspices—because of its general reinvestment, truth-in-lending and electronic fund interest to Council members or because of the transfers, emerging technologies, service charge issues, belief that the issue is sufficiently important to and consumer education. consumers to warrant special attention. Some topics have been the subject of Council deliberations for several meetings over a number of service to the Board. In the early years, for years—particularly long-range issues of continuexample, some members believed that the Coun- ing interest, or issues that do not easily lend cil could be more effective in advising the Board themselves to resolution. Others, of a more if the members played a greater role in formulat- immediate nature, have surfaced for discussion ing the agenda. Besides serving as technical only at one or two meetings. (A sampling of the advisors on near-term regulatory matters, Coun- other types of issues considered over the past ten cil members could thus also direct the Board's years is shown in the box.) attention to policy issues of emerging concern to consumers and to the financial services industry. Rulemaking Function Through a balloting procedure used from that point on, they have worked together with the The Board's rulemaking activities determined Board's staff in developing the Council's agen- the focus of much of the Council's attention in das. earlier years. For example, members examined Similarly, the Council has chosen to use stand- issues related to the Board's rules implementing ing and ad hoc committees to make it easier for the Equal Credit Opportunity Act Amendments Council members to deal with complex issues of 1976, which bar creditors from discriminating effectively and to enhance the likelihood of de- in credit transactions on the basis of race, nationveloping a consensus that the full Council can al origin, religion, and other specified factors. adopt. A steering committee, established several When the Electronic Fund Transfer Act was years ago, promotes long-range planning. passed in 1978, the Council offered advice on regulations governing consumers' liability for unauthorized transfers, and addressed issues ADVISING THE BOARD that dealt with the unsolicited distribution of debit cards. In 1980, members considered rules The Council's primary mandate is to advise the for simplifying Regulation Z when the Board Board on the exercise of the Board's functions implemented the Truth in Lending Simplification under the CCPA. These functions include the and Reform Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Consumer Advisory Council in Its First Decade 759 SAMPLING OF OTHER ISSUES CONSIDERED BY THE COUNCIL Subject and year first considered Disposition by Council Board's authority to identify and prohibit unfair or Council has considered such practices as delayed funds deceptive acts or practices by banks. (1976) availability, holder-in-due course, credit practices, service charges for dormant accounts, and sale of used motor vehicles. Council continues to monitor this area. Interagency guidelines for the administrative Recommendations concerning reimbursements by enforcement of the Truth in Lending regulation. financial institutions as corrective action for (1977) overcharges. (1978) Interagency issuance of the Community Reinvestment Recommendations encouraging flexibility for institutions regulation. (1977) in defining their communities and in determining credit needs, but also endorsing a requirement for public availability of CRA statement. (1978) Credit-scoring systems and their operation under the Recommendations relative to scoring of secondary Equal Credit Opportunity regulation. (1979) income and the presentation of reasons for adverse actions. (1979) Integration of Truth in Lending and Electronic Fund Recommendation that the Board defer further provisions relating to error resolution and consumer consideration pending final action by UCC and liability for unauthorized use. (1979) other state efforts. (1981) Board's program limiting the expansion of certain Extensive discussion on need for advance notice to classes of consumer credit and rules for creditors to consumers and conditions to be met in making follow in changing terms on credit plans. (1980) changes. Recommendation for retention by the Board of authority to invoke emergency credit measures. (1980) Advertising of IRAs and other deposit accounts. (1982) Adopted a committee report on information that should be included in a model disclosure form or advertisement to facilitate shopping for IRAs. (1982) Levels of consumer interest rates. (1983) No consensus reached (1983); topic resurfaced in 1986 relative to rates on consumer credit cards. Educational presentations on new technologies for the Reports have been delivered over the course of several provision of consumer financial services including meetings; a presentation on smart card technology automated teller machines, home banking, point-of- is slated for the March 1987 meeting. sale terminals, and so forth. (1984) Further extension of the Home Mortgage Disclosure Recommendations urging permanent extension, actions Act. (1985) to publicize and evaluate HMDA data, and exploration of new HMDA data systems. (1985) Rates and sales practices in connection with credit- Two Council discussions ended with no consensus related insurance. (1985) reached on whether rates are at appropriate levels or on whether consumers find credit insurance desirable. (1986) Offering of financial counseling services to consumers by Recommendation that the Board add consumer financial bank holding companies. (1986) counseling to the list of permissible activities. (1986) Council sessions on rulewriting matters com- dialogue of give-and-take, their individual posiplement the written comments that the Board tions are often tempered, through the course of receives from the public on any published regula- discussion, with a greater understanding of the tory proposal. From their differing perspectives, opposing point of view. Thus the Council is more members bring together a special blend of exper- likely to present a balanced perspective. tise to a regulatory issue: they give advice on the With the deceleration that began in 1980 of rights and protections believed to be essential to consumer statutory initiatives, the Board's new consumers and also on whether certain duties rulemaking under the CCPA has slowed someand obligations are workable from the industry what. Even so, the Council's work on these view. Because Council members engage in a matters continues. Some review takes place as a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

760 Federal Reserve Bulletin • November 1986 consequence of Board policy calling for the arises in the context of industry practices that periodic reassessment—under its Regulatory Im- some members believe to be troublesome to provement Project—of all its regulations. In this consumers. context, the Council played an important role in Because the Board has the authority to prohibthe Board's assessment, completed last year, of it potentially unfair or deceptive acts or practices its equal credit regulations. by banks, the Council on occasion has taken a And because implementing consumer legisla- more general look at the System's complaint tion is an ongoing process, regulatory issues program. Council members, for example, have continue to arise. At last month's meeting, for received briefings on the System's monitoring example, Council members considered a pro- procedures, which are designed not only to colposed amendment to the rescission rules applica- lect data on noncompliance with existing laws ble to refinancings under the Truth in Lending but also to detect trends in unregulated banking Act. practices. Trends are examined periodically to determine whether they might signal need for a Enforcement Of Compliance legislative or regulatory initiative. The Council takes special interest in the Board's FOCUSING ON CRA: EVALUATION supervisory efforts relative to state member OF THE BOARD'S PROGRAM banks. Private citizens do not, as a rule, have the opportunity to review the compliance examina- Much of the Council's attention since 1983 has tion efforts of the financial regulatory agencies. been drawn to the need for community develop- Such matters are not subject to outside com- ment and a banking presence in the community, ment, and enforcement activities generally re- areas related to the implementation of the ceive public attention only in reports to the Community Reinvestment Act (CRA). Perhaps Congress or in congressional hearings. The the Council's most noteworthy contribution Council's involvement in the Board's program to over the years has been to assess how well the enforce statutes governing financial services is Federal Reserve does its job under the CRA— therefore unique. one of the agency's most challenging roles in the In the early years, the Council's focus was on consumer and community affairs area. The CRA particular regulations and how they were being encourages banks, within "safety and soundenforced by the Federal Reserve. Generally, ness" constraints, to help meet the credit needs members discussed enforcement policies, exami- of their entire communities, including low- and nation procedures, and state member banks' moderate-income neighborhoods. The Federal compliance with the consumer-related regula- Reserve's role with respect to state member tions. More recently, they have raised compli- banks is to ensure that they live up to this ance concerns in the context of larger policy obligation by assessing their CRA records in the issues—for example, the desirability and feasibil- context of bank examinations. In addition, when ity of expanding data collection on loan appli- considering certain applications from banks and cants to test the effectiveness of federal laws to bank holding companies (to acquire a bank, for enforce antidiscrimination. example), the Board takes into account the CRA performance of the institution involved, whether it is supervised by the Federal Reserve or by one Consumer Complaints of the other financial regulators. The Council conducted, at the request of In their own professional capacities, many Coun- Chairman Volcker, a comprehensive review of cil members representing both industry and con- the System's CRA program in 1982-83. The sumer groups have dealt with consumer com- Council's mandate was to establish how well the plaints. Thus they take a keen interest in the Federal Reserve was carrying out its CRA re- Board's program for investigating complaints sponsibilities. A 10-member committee (appointagainst state member banks. Often that interest ed and headed by the Council chairman) gath- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Consumer Advisory Council in Its First Decade 761 ered information from a wide variety of sources, Council's 50-plus recommendations to strengthboth at the Board and at the Reserve Banks, en enforcement of the CRA and to enhance about compliance examinations, application pro- public participation in the application process. cedures and citizen protests, and the System's The Council's work in the CRA area contincommunity affairs function. Committee members ues. Members have taken an interest, for examconducted interviews with Federal Reserve ex- ple, in the increasing number of branch closings aminers and other staff and made on-site visits to and the adverse impact certain closings may 8 of the 12 Federal Reserve Districts. They met have on communities. A new CRA committee is with local bankers and community leaders, car- also searching for ways in which the Board ried out written surveys, and received comments could, within existing law, encourage regulated from interested citizens. institutions to attain ratings of excellent for their In mid-1983, the Council formally adopted the CRA performance. The committee's current focommittee's report, which concluded that in cus is on procedures and mechanisms used by general the performance of the Federal Reserve the Federal Reserve System to assign ratings to in carrying out its responsibilities under CRA the CRA performance of banks. was "exemplary." The Council encouraged the Board to consider the intent and spirit of the report, as well as its suggestions for improve- TAKING THE LEAD -. BASIC BANKING ment. The following list contains some of the specific recommendations: The Council has increasingly evolved, over the past ten years, from a body that primarily re- • Bank Examination Procedures. To develop sponded to Board-initiated requests for its views improved methods and data for detecting bank into a more assertive group, seeking out and practices that discourage loan applications from exploring public policy issues and potential areas minorities and other protected groups; to modify of concern to the Board. the CRA rating system so that examiners can Recently, the Council's attention has focused better distinguish among banks whose perform- on issues that are indirectly the byproduct of the ance is barely passable, banks with adequate economic environment in which financial instituperformance, and banks that are doing an excel- tions have operated in the 1980s. That environlent job. ment has been marked by an increased cost of • Community Affairs. To better define the pri- funds, interest rate volatility, and competition ority that Reserve Banks should give activities of from outside the traditional depository-institutheir Community Affairs Officers; to develop tion structure. Some institutions have responded community profiles and other credit-related data by adopting such strategies as the pricing of analyses to assist examiners in the evaluation of checking accounts and other banking services, banks' CRA performance. the closing of branches, and the elimination of • Applications. To improve communications services believed to be unprofitable. These acwith protestants by providing plain-English no- tions in turn have created concern about the tices of applications and by other means. potential impact on some consumers. Do they • Compliance Personnel. To develop improved effectively deny convenient access to the payprograms at the Reserve Banks for recruitment, ments system and to safe depositories for small training, and career paths for bank examiners. savings accounts? The Council's Committee on Service Charges The Council's study provided valuable first- studied the issue for much of 1985. The commithand observations about the operation of the tee, composed of representatives of consumer Federal Reserve's program. It identified areas in and industry groups, expressed a preference for which improvement was believed possible, in voluntary action by the industry rather than addition to suggesting the continuation of some either a legislative or a regulatory approach. Federal Reserve practices already in place. By Following a detailed report, in October 1985 the early 1984, the Board had acted on many of the Council unanimously adopted a resolution on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

762 Federal Reserve Bulletin • November 1986 basic banking: it called on the Federal Reserve The statement suggests that trade associations Board to issue a policy statement that would and individual depository institutions should acencourage programs of basic banking services tively foster the offering of basic financial seraccessible to low- and moderate-income consum- vices, taking into account considerations of safeers (like the one issued previously by the Comp- ty and soundness and flexibility in designing troller of the Currency) and asked the Board to basic financial products. The Board invited the encourage the other financial regulatory agencies other agencies, through the Federal Financial also to issue a statement. Institutions Examination Council, to join in issu- In June, following extensive research and in- ing the statement. teragency consultations by the staff, the Board considered a draft policy statement. It decided to defer action. Two surveys in progress were seeking more information about a decline in account PROVIDING A FORUM-. ownership noted between 1977 and 1983, and REDUCED-RATE FINANCING PROGRAMS some Board members wanted to wait for those results before acting. They also wanted to give The Council's discussions this year of reducedcertain initiatives launched by industry associa- rate financing by automakers is a timely example tions an opportunity to be tested. And one or two of the Council's ability to set the stage for public of them questioned the need for a policy state- policy debate. It also illustrates the difficulties ment by the Board on the basic banking issue. faced by decisionmakers in addressing compet- Council members reiterated their support for a ing interests. policy statement from the Board at their meeting In an effort to draw buyers, the major autothe following week and made two major points. makers have been offering rates far below the Industry representatives believed that Board ac- market through their financing subsidiaries. tion would strengthen the voluntary efforts of the Banks and credit unions are losing customers industry already under way and, conversely, that because many car-buying consumers have choinaction could lead ultimately to burdensome sen to take advantage of the reduced rates. In legislation. Both industry and consumer repre- fact, many have come to expect, and to wait for, sentatives also suggested that, whatever the re- the rate reductions (an expectation that presents search in progress might suggest, a very strong automakers with a different kind of problem). perception exists that the banking needs of some Some Council members (and others) have sugconsumers are not being met. Members reintro- gested that these programs undermine the usefulduced the earlier resolution because 13 new ness of the annual percentage rate (APR) as a members had joined the Council since the vote in basic shopping tool for comparing the cost of October 1985. Again, the resolution passed unan- credit offered by different credit providers. In imously. some reduced-rate programs recently an- In mid-September the Federal Reserve Board nounced, a purchaser is given the choice of took up the issue of basic banking once more and financing the vehicle through the automaker's approved, after considering the Council's strong subsidiary at a reduced rate of interest or receivstand, a revised policy statement. The statement ing a cash rebate. Purchasers who take the encourages the industry to see to it that certain reduced rate, of course, will miss out on the cash minimum financial needs of consumers are met, rebate. Critics of these programs say the rebate particularly the following: should be treated as part of the financing cost and thus taken into account in computing the • The need for a safe and accessible place to APR that is disclosed to the customer for purposes of Truth in Lending. But under Regulation keep money. Z, no adjustment to the APR is currently re- • The need for a way to obtain cash (including quired. The result, according to the critics, is to the cashing of government checks). lessen the value of the APR as a tool for credit • The need for a way to make third-party shopping. payments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Consumer Advisory Council in Its First Decade 763 In March 1986, following a preliminary discus- And, occasionally it has focused attention on sion of reduced-rate financing, the Council mobi- the special needs of low-income consumers lized a three-member planning group: the con- with limited education and on the need to direct sumer advocate for the State of South Carolina, consumers to credit counseling before they find the chairman of the Credit Union National Asso- themselves in financial difficulties. ciation, and the chairman of the board of the Besides touching on the basics of consumer General Motors financing subsidiary. At the June education, the Council also has examined probmeeting, they gave their various perspectives lems that point to specific educational needs. but reached no consensus and presented no Two years ago, in a period of high interest rates, recommendation. the subject was adjustable-rate mortgages. Mort- Since then, a new round of reduced-rate pro- gage lenders, with large volumes of fixed-rate grams has been announced, and so clearly the mortgages, had turned to variable-rate lending as issue has not gone away. In fact, the addition of a way to protect themselves in times of ascendzero-percent financing by one of the automakers ing rates. The question, however, was how also makes the issue more critical. The Council will to protect consumers who might not be fully likely continue to consider whether the programs aware of the implications of a variable interest pose disclosure problems that should be ad- rate. Adjustable-rate mortgage (ARM) programs dressed under Regulation Z. were proliferating at a rapid pace, and in some cases lenders were discounting the initial interest rate to help the borrower qualify. The potentially MONITORING AREAS poor quality of some of these loans represented a OF CONTINUING INTEREST risk both for the lending institution and for the borrower. At the same time, there was general recognition that ARMs were here to stay; in fact, Throughout the past decade, the Council has observers expected variable-rate features to exsupplemented its discussion of specific consumer pand from mortgages to other types of credit issues with time devoted to looking at other transactions. Moreover, ARMs did offer benefits Board activities related to consumer matters. In to consumers. Variable-rate lending frequently this way, Council members have the opportunity made mortgages available to homebuyers for to review them, suggest refinements or new whom such credit might otherwise be inaccessiendeavors, and otherwise monitor consumerble. And, while they protect lenders when rates related developments. Two areas of continuing are rising, in a declining rate environment, such interest are consumer education and consumer programs are quite beneficial to borrowers. research. Believing that consumers are best able to make a sound economic choice when they are fully Consumer Education informed, the Federal Reserve Board and the Federal Home Loan Bank Board joined together Besides compiling reports on the educational to develop an educational brochure on ARMs. efforts of industry and consumer groups, the Coun- An ad hoc committee of the Council, detailed to cil over the years has kept up to date on the study ARMs and variable-rate issues, took part Federal Reserve's educational program of publi- in that effort. (Some 18 other agencies and orgacations, films, and consumer workshops. Some- nizations from both the private and the public times it has taken a direct hand in the Board's sectors also participated.) The resulting broprogram; for example, after having recommend- chure, Consumer Handbook on Adjustable Rate ed workshops for high school teachers in 1978, Mortgages, helps consumers to better underthe Council then helped implement the plan: stand the complexities of these mortgage instru- Council members with a background in consum- ments, helps them to ask the right questions, and er education have served as instructors ever enables them to analyze the potential consesince. It has made other recommendations for quences before committing themselves to an interagency coordination of consumer education. ARM. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

764 Federal Reserve Bulletin • November 1986 This year the Council's interest in consumer members believed that consumers understand education has turned to more general issues. A credit insurance and make a conscious decision committee is exploring ways in which consumer to purchase it; others pointed to high penetration organizations can be helped to identify and dis- rates, suggesting coercive sales practices on the tribute educational material about financial ser- part of creditors. Given the Council's interest, vices. The Council's interest was sparked by one of the Board's monthly surveys asked quesregional efforts among consumer organizations tions to determine consumers' attitudes toward to provide information through regulated institu- credit-related insurance; and the results were tions (in the manner of consumer utility boards), given to the Council for use in a subsequent and that concept is one of several approaches discussion of the issue. that may be explored. LOOKING BACK Consumer Research Over the years, the Council has built a solid The Board has an active consumer research record of accomplishment. As a public forum, it program that uses comprehensive consumer sur- has ensured a thorough airing of diverse viewveys conducted every few years plus monthly points on a wide range of issues that are of surveys to obtain data that will help the Federal concern to consumers. It has exhibited strength Reserve fulfill its monetary policy responsibil- in attempting to find a consensus among the ities. It also conducts other studies, sometimes in sometimes divergent opinions of its members. response to requests from the Congress (such as And it has evolved from a group operating within a recent study of the effects of proposed credit narrowly defined bounds into a group that seeks card rate ceilings on consumers and creditors). out and explores new and expanding areas of The Council frequently receives briefings from concern. the Board's staff about research studies in pro- The role of the Council has been forged by its gress and becomes involved in other ways. In members, who have been, from the beginning, a some instances, for example, Council members group of individuals strongly committed to conhave had the opportunity to review and make tributing to the work of the Board. Along the recommendations concerning drafts of the ques- way, some members have expressed disappointtionnaires to be used in consumer surveys. ment that concrete results cannot be attributed to From time to time, the Council has also sug- each of the Council's deliberations or they have gested areas for further study by the Board, experienced concern that, if the Board fails to following discussion of practices in the financial follow its advice, the Council has not effectively services industry that some members believe are fulfilled its mandate. Such reactions may be unfair or worrisome to consumers. When percep- inherent in the advisory nature of the group, for tions vary as to whether a problem exists, the without any real decisionmaking authority, the Council may express an interest in having a Council often finds it difficult to measure success Board study of the issue. Such a case occurred in in a tangible manner. mid-1984, when the Council asked for a study of In fact, the advice of the Council is valuable to trends toward increased service charges and the Board—whether it takes the form of a resoluthe effects of these increases on consumers. It tion, whether a more informal consensus on an received a comprehensive report from the issue is reached during a discussion, or whether a Board's staff in early 1985 that presented an diversity of individual viewpoints are expressed analysis of existing data on the subject. on an issue for which no consensus is possible. A similar request followed a Council discus- On occasion, Council discussions can be useful sion about credit insurance that focused on by confirming that there are no easy choices in whether creditors include the insurance in a public policy decisionmaking; what is good for transaction automatically, without the consum- one constituency may adversely affect another. er's explicit request or knowledge. Some Council But having heard firsthand from all parties that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Consumer Advisory Council in Its First Decade 765 have a stake in the outcome, the Board is in a • New methods for the delivery of consumer better position to decide an issue. financial services are under study by a Council Notwithstanding any occasional reservations, committee on emerging technologies. Currently, the Council itself is on record as to the worth of the committee is engaged in finding out more its advisory role. Several times members have about such developments as videotex, smart endorsed the concept for other agencies, as they cards, and point-of-sale transactions. Future disdid three years ago when Vice President Bush's cussion of new technologies might go beyond Task Group on Regulation of Financial Services their mechanics and instead focus on how their was deliberating the possible restructuring of the special features will fit into the existing regularegulators' supervisory functions: tory environment. • Expanded powers for banks and other regu- In the context of our experience, Council members lated financial institutions is another area under have come to believe that federal financial supervisors committee study. In addition to investigating the benefit from the opportunity to receive counsel of the desirability of the entrance by financial institutype provided by our group—particularly regarding tions into activities outside the scope of the agency enforcement of the consumer protection traditional banking industry, the committee will laws. . . . likely look at the need for any additional consumer protections. The Council suggested that the Task Group should provide for an advisory group such as the • The Community Reinvestment Act will re- Council in any future reordering of the federal main in the forefront, particularly in light of agencies. heightened protest activity by community groups, as a result of an increase in holding company applications after a relaxation of interstate banking laws by many of the states. • . . . AND LOOKING AHEAD In addition to looking back on areas of interest and accomplishments, a few of the issues that will make their appearance on Council agendas in the years to come should be mentioned. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

766 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period May as they sought to maintain market shares. Inthrough July 1986, provides information on Trea- deed, a number of commentators questioned sury and System foreign exchange operations. It whether increases in domestic demand in Germawas prepared by Sam F. Cross, Manager of ny and Japan would be sufficient to offset the Foreign Operations of the System Open Market decline in export orders and sustain prospects for Account and Executive Vice President in charge economic growth in these two countries. of the Foreign Group of the Federal Reserve Many in the exchange markets anticipated that Bank of New York.1 the governments of the seven major industrial countries might use the occasion of the Economic Summit meeting in Tokyo during early May to The dollar declined against most major curren- outline measures to stabilize dollar exchange cies during the three months ending in July. The rates. The Tokyo Economic Declaration noted a dollar's downward movement proceeded against significant shift that had occurred in the pattern the background of sluggish U.S. economic of exchange rates, which better reflected fundagrowth, expectations of continued monetary eas- mental economic conditions. It stated that the ing in the United States, and doubts that large Group of Seven (G-7) countries had agreed to payments imbalances among the developed develop a process to review trends for a number countries were being reduced. There was no of economic variables, including exchange rates, intervention by the U.S. authorities during the in order to achieve more effective policy coordiperiod but there were sizable dollar purchases by nation. But the declaration did not call for specifsome other central banks. The dollar's deprecia- ic measures or concerted actions to prevent the tion was temporarily interrupted in May only to dollar from declining further. Instead, there were resume in June and July. By the end of July, the reported remarks by some G-7 officials, which dollar was at its low point of the period, having seemed to imply that there was still room for declined approximately 9 percent against the further appreciation of nondollar currencies, es- Japanese yen and the Swiss franc, and nearly 5 pecially the Japanese yen. percent against the German mark and other In reaction to the absence of an announcement continental European currencies. of specific measures, the dollar resumed its de- Coming into the period under review, the cline after the Tokyo Summit. It depreciated dollar had already declined substantially from its most against the Japanese yen, trading as low as highs of February 1985. Market participants had ¥159.99 on May 12, some 3SV2 percent below its noted that officials in several foreign industrial peak of about a year earlier. Contributing to this countries were expressing concern over the ad- decline in the dollar was the narrowing of favorjustments that their own industries were begin- able long-term interest differentials. In addition, ning to experience. In the face of the apprecia- the dollar was undermined by the persistent tion of their currencies, foreign exporters current account imbalances manifested by a increasingly complained of a squeeze on profits large U.S. deficit and Japanese surplus. Market participants perceived that the U.S. Administration hoped that a high level of economic 1. The charts for the report are available on request from activity and rising imports abroad would set the Publications Services, Board of Governors of the Federal stage for a sizable narrowing of the U.S. trade Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

767 deficit, given that the dollar had already declined the first time in several months dollar interest substantially during the past year. But the most rates increased, with the rate on three-month recent data were seen by the market as showing Eurodollar deposits exceeding 7 percent. A little progress in redressing the trade imbalance. strong upward revision in first-quarter real GNP Strong protectionist sentiments persisted in and other statistics on U.S. economic activity U.S. manufacturing industries even as the U.S. were interpreted favorably by the exchanges. By authorities sought to reduce restrictive trading June 2, the dollar reached ¥177.05 and practices abroad and resist pressures for protec- DM2.3445, levels that were the highs for the tionist measures at home. Market participants dollar during the period under review. believed that so long as the imbalances were not But the dollar began to edge down again in diminishing, market pressures in favor of the yen early June as new evidence suggested that the would remain strong and that the authorities, at anticipated boost to U.S. exports and growth least in the United States, would accept further was not being sustained, and expectations of declines in dollar exchange rates. another downward adjustment in U.S. interest In early May, the dollar's decline against the rates were revived. After the statistics of late German mark was more muted than its decline May, an increase in U.S. unemployment came as against the yen. Political and economic uncer- a disappointment and was the start of a series of tainties following the Chernobyl nuclear accident figures pointing to only lackluster U.S. economic of late April weighed against the mark for a time. activity. Statements by Chairman Volcker were There were also heavy reflows of funds into the interpreted as running counter to the idea that French franc and Italian lira following an April the Federal Reserve needed to wait to cut its realignment of the European Monetary System discount rate again until central banks in other (EMS) and, in the case of the franc, in response countries eased monetary policy. Market particito the exchange market's favorable reaction to pants started to consider the possibility that the initial plans for privatization of French public- U.S. authorities might welcome a renewed desector firms. Thus, the mark traded at the bottom cline in the dollar on the grounds that central of the EMS. banks abroad might cut their interest rates more quickly in such an environment. In the mean- Before long, however, many in the market time, there were concerns that some of the came to interpret official views as indicating that heavily indebted Latin American countries were a period of consolidation was appropriate. Dealconsidering imposing a debt-service moratorium ers anticipated that many of the governments or limiting debt payment to a percentage of abroad, facing local or national elections, would export earnings. Thus, for domestic and internawelcome a period of exchange market tranquilitional reasons, market participants thought that a ty. Also, time was needed to evaluate the effects further easing of U.S. monetary policy might be on economic activity and trade flows of the imminent. With the possibility that such a U.S. changes in exchange rates and declines in intermove might not be matched elsewhere, the dollar est rates that had occurred during the preceding came under downward pressure. year. After mid-May, perceptions about the relative For several weeks in June, pressures to sell the strength of the U.S. economy temporarily bright- dollar were well contained. Dealers perceived ened, expectations of further drops in U.S. inter- that authorities abroad were prepared to interest rates faded, and the dollar appreciated more vene to prevent a further decline in dollar rates or less steadily for the rest of the month. Faster- for a while. In particular, there were numerous than-expected growth in U.S. monetary aggre- reports of dollar purchases by the Bank of Japan, gates appeared to lessen the scope for a near- and market participants seemed to believe that term easing of U.S. monetary policy. Repeated the Japanese central bank would strenuously denials of any need to ease monetary policy by attempt to limit the yen's rise before Japanese officials of the Bundesbank and the Bank of parliamentary elections on July 6. Dealers also Japan led dealers to believe that there was little thought that the Bundesbank might intervene if chance of a coordinated cut in interest rates. For the mark threatened to rise too strongly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

768 Federal Reserve Bulletin • November 1986 In July, the dollar began to move down quick- mark moved from near the bottom to near the top ly, especially against the Japanese yen and the of the EMS to emerge as the third strongest Swiss franc. Market participants doubted the currency in that arrangement; it also gained IV2 Japanese authorities would be able to contain for percent against sterling. long the yen's rise in the face of mounting trade In late July, the dollar's decline accelerated. surpluses. (Because of the substantial deprecia- There was press commentary to the effect that, tion of the dollar since February 1985 and the for other industrialized countries, the boost to decline in world oil prices, Japan's trade surplus real income resulting from the oil price decline continued to grow in dollar terms, even though was not yet showing through; these countries Japanese exports in 1986 were actually lower in were going to have to expand more quickly and volume terms than in the previous year.) As a import more vigorously for the United States to result, traders started to establish large long achieve a substantial balance of payments adjustpositions in yen and commercial leads and lags ment. Yet a U.S. official's call for stronger swung in favor of Japan. The Swiss franc also growth abroad had elicited replies from German began to be viewed as a particularly attractive and Japanese officials indicating that stimulative alternative to the dollar. It was not as affected as policies would not be forthcoming in the near the German mark by political uncertainties and term. As for the United States, rapid growth in by June had developed an interest rate advantage the U.S. monetary aggregates and a sustained over the mark. Moreover, market participants decline in U.S. interest rates indicated that monfelt that the Swiss National Bank would maintain etary policy was not a constraint on U.S. growth. relatively tight monetary conditions whatever But long-term U.S. interest rates had actually the international environment and was not likely firmed as short-term rates eased during the last to intervene in the exchanges to limit the appreci- half of July. Under these circumstances, market ation of its currency. observers wondered whether foreign demand for The German mark, too, began to gain more U.S. securities was being sustained sufficiently strength as the dollar declined during July. After to finance the U.S. deficits and thereby avoid the Federal Reserve cut its discount rate a half of another sharp decline in dollar rates or a further 1 percentage point, effective July 11, a number of rise in interest rates. Simultaneously, release of German officials commented that a further de- U.S. trade statistics suggesting the deficit had cline in German interest rates would be inappro- widened in June reinforced the view that the priate inasmuch as their domestic economy had desired adjustments were slow in materializing. picked up in the second quarter and the growth 1. Federal Reserve reciprocal currency arrangements of central bank money remained above target. In Millions of dollars addition, the German government indicated it would not depart from its earlier fiscal targets. Amount of Amount of Institution facility, facility, The mark also strengthened against other Euro- January 31, 1986 July 31, 1985 pean currencies around this time. Flows into Austrian National Bank 250 250 France that had occurred after the April EMS National Bank of Belgium ... 1,000 1,000 Bank of Canada 2,000 2,000 realignment and had weighted on the mark began National Bank of Denmark . 250 250 to subside as French residents reportedly took Bank of England 3,000 3,000 Bank of France 2,000 2,000 advantage of an easing of exchange controls. The German Federal Bank 6,000 6,000 Bank of Italy 3,000 3,000 mark also benefited from shifts in investor pref- Bank of Japan 5,000 5,000 erence away from sterling-denominated assets, Bank of Mexico 700 700 previously viewed as a principal alternative to Netherlands Bank 500 500 Bank of Norway 250 250 dollar investments. As Britain's economic out- Bank of Sweden 300 300 look dimmed with oil prices reaching new lows Swiss National Bank 44,,000000 44,,000000 Bank for International and the government of Prime Minister Thatcher Settlements: Swiss francs-dollars 600 600 facing considerable political criticism, investors Other authorized European and traders both shifted funds increasingly out of currencies-dollars 1,250 1,250 sterling and into marks. During July, the German Total 30,100 30,100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 769 2. Net profits or losses (-) on U.S. Treasury and 3. Drawings under special swap arrangements with Federal Reserve current foreign exchange the U.S. Treasury operations1 Millions of dollars; drawings or repayments (—) Millions of dollars Drawings on U.S. Total May 16, Outstanding U.S. Treasury Treasury facilities facility 1986 July 31, Federal Exchange 1986 Period Reserve Stabilization Fund Central Bank of Ecuador 150 75 75 May 1, 1986-July 31, 1986 ... 0 0 Valuation profits and losses Data are on value-date basis. on outstanding assets and liabilities as of July 31, 19862 1,398.6 1,470.4 On May 14, the U.S. Treasury, through the Exchange Stabilization Fund (ESF), agreed to 1. Data are on a value-date basis. 2. Valuation gains represent the increase in the dollar value of provide short-term financing to the Central Bank outstanding currency assets valued at end-of-period exchange rates, of Ecuador, totaling $150 million, until Ecuador compared with the rates prevailing at the time the foreign currencies were acquired. could finalize negotiations for a new financing facility from commercial banks and additional As market participants increasingly questioned loans from international financial institutions. On whether the major industrialized countries would May 16, the Central Bank of Ecuador made a be able to work together to redress their large drawing of $75 million. economic imbalances, the dollar declined to The Federal Reserve and the ESF invest forclose the period at DM2.0890 and ¥153.65. eign currency balances acquired in the market as At the end of July, the dollar had declined 9 a result of their foreign exchange market operapercent against the Japanese yen and Swiss tions in a variety of instruments that yield marfranc, as well as almost 6 percent against the ket-related rates of return and that have a high German mark and other EMS currencies. It had degree of quality and liquidity. Under the authorremained stable, however, against the Canadian ity provided by the Monetary Control Act of dollar and had risen against the pound sterling. 1980, as of July 31 the Federal Reserve had Therefore, on a trade-weighted basis against the invested $2,941.2 million equivalent of its foreign currencies of the major industrial countries, as currency holdings in securities issued by foreign calculated by the Federal Reserve Board, the governments. In addition, the Treasury held the dollar closed the period 3 percent below its level equivalent of $4,083.6 million in such securities at the end of April. as of the end of July. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

770 Industrial Production Released for publication September 161 in defense and space equipment, construction supplies, nondurable consumer goods, and non- Industrial production edged up an estimated 0.1 durable materials; however, auto, steel, and percent in August. Gains in output were sizable electricity production declined during the month. Revised data for the preceding two months indicate somewhat stronger industrial activity than 1. Revised 1984 and 1985 annual levels for major groups did the earlier estimates. In particular, total can be found in table 2.10, p. A44. For more detailed series, industrial production for June was revised to no revised 1985 annual levels and revised data for the past 12 months are contained in table 2.13, pp. A47-A48. change (from -0.3 percent) and July output to a Ratio scale, 1977 = 100 TOTAL INDEX 140 - - 120 _ Products 100 - / Materials 1 1 i i i I 140 MANUFACTURING MATERIALS Durable Nondurable. 120 —NondNuonrdaurbalbel e ^s^-—•—- 100 80 160 _ CONSUMER GOODS 140 INTERMEDIATE PRODUCTS Business supplies 120 /^Durable 100 / 80 Construction supplies 240 FINAL PRODUCTS 200 Defense and space 160 Business equipment 140 / 120 100 Consumer goods 80 1980 1982 1984 1986 1980 1982 1984 1986 All series are seasonally adjusted. Latest figures: August. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

771 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, GGGrrrooouuuppp 1986 1986 AAAuuuggg... 111999888555 tttooo AAAuuuggg... July Aug. Apr. May June July Aug. 111999888666 Major market groups Total industrial production 124.6 124.8 .8 -.4 .0 .3 .1 .3 Products, total 132.9 133.3 1.1 -.2 -.1 .5 .4 1.0 Final products 131.7 132.2 1.2 -.4 -.5 .6 .4 .0 Consumer goods 124.8 125.1 2.2 -.2 .0 .5 .2 3.4 Durable 115.9 115.2 3.1 -1.8 .5 1.4 -.6 .6 Nondurable 128.1 128.7 1.9 .3 -.2 .2 .5 4.4 Business equipment 137.5 137.9 .6 -.5 -1.2 1.0 .3 -2.2 Defense and space 179.7 182.2 1.0 .0 .2 .8 1.4 5.1 Intermediate products 136.9 137.4 .9 .4 1.2 .1 .3 4.3 Construction supplies 124.2 125.1 .8 -.1 .5 .1 .6 3.9 Materials 113.3 113.1 .5 -.7 .2 .0 -.2 -.7 Major industry groups Manufacturing 128.8 129.2 1.2 -.4 -.2 .6 .3 1.5 Durable 127.0 127.1 1.0 -.9 -.7 .7 .0 -.8 Nondurable 131.4 132.1 1.5 .2 .5 .6 .6 4.8 Mining 97.4 96.0 -1.9 -1.2 -.4 -2.0 -1.4 -11.2 Utilities 109.8 108.2 .1 -.8 1.7 -.6 -1.5 -1.7 NOTE. Indexes are seasonally adjusted. small rise (from -0.1 percent). At 124.8 percent of Within materials many nondurable industries evthe 1977 average, production in August was 0.3 idenced sizable increases in output. percent higher than it was a year earlier and In industry groups, manufacturing output indown 1.1 percent from January. creased 0.3 percent in August following a revised In market groups, output of consumer goods gain of 0.6 percent in July. All of the August gain rose 0.2 percent in August. Although autos were was due to increased production of nonduraassembled at an annual rate of 7.0 million units— bles—in particular, chemicals, petroleum proddown about 8 percent from the rate of 7.6 million ucts, and textiles. But mining output was curunits in July—increased truck production moder- tailed further, with reductions in all major ated the effect of reduced auto output. Produc- industries with the exception of oil and gas well tion of home goods—such as appliances and drilling, which posted a small gain in August furniture—also advanced in August. Nondurable following declines since July 1985. Production at consumer goods increased 0.5 percent, reflecting utilities declined an estimated 1.5 percent, maingains in consumer fuels, chemical products, and ly because of a drop in electricity generation foods. Output of business equipment gained 0.3 related to cooler weather in August. percent, owing to increases in transit equipment—largely trucks and aircraft—and in com- Revised indexes mercial equipment. Production of defense and space equipment advanced sharply in August As part of the Federal Reserve's ongoing review and is currently about 5 percent higher than it of its statistical series, the indexes of industrial was a year earlier. Output of supplies for con- production have been revised beginning with struction and business continued to increase. January 1984. Output of materials, however, declined during The revision of the indexes for 1984 and 1985 the month, reflecting lower metals output (main- affects the series primarily through the incorpoly steel), which was related to strike activity, less ration of information not available at the time the electricity generation, and reduced output of indexes were originally estimated. In the present parts for consumer durables, especially autos. revision, unlike the 1985 general revision, no Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

772 Federal Reserve Bulletin • November 1986 major modifications were introduced; in particu- ward 1 percent or more; the level of output in lar, the reference year, the weights, and the nondurable materials was revised upward slightgroups of the index have remained unchanged. ly for 1984. Among the major industry groups, The present revision, besides incorporating data downward revisions of total manufacturing outpreviously not available, reflects the updating of put for both 1984 and 1985 were about one-half of the seasonal adjustment factors for the entire 1 percent; the level of mining output was slightly index, including its groups and the basic series; increased for 1984 but decreased for 1985; and these factors are now calculated with the use of the level of utility production was revised downdata through December 1985. The production ward 0.2 percent and 1.3 percent in 1984 and adjustment factors applied to the indexes were 1985 respectively. updated as well. The revisions of the data between January and The revised data indicate slightly less growth July 1986 reflect, in part, the revisions undertakin the total index of industrial production than en for 1984 and 1985 as well as the receipt of new previously estimated: a rise of 11.2 percent in information for 1986. Unlike the revisions for 1984, instead of 11.5 percent, and an increase of 1984 and 1985, which show slightly less growth 2.0 percent during 1985, instead of 2.2 percent. for those years, the revisions for the first seven The cumulative effect is to lower the level of the months of 1986 indicate somewhat stronger intotal index in December 1985 0.6 percent. dustrial activity than that estimated previously: a Indexes for most industry and market groups cumulative decline of 1.1 percent for the period, also were revised downward slightly. In three instead of 2.1 percent. The overall level of indusmarket categories—business equipment, defense trial output for July 1986—at 124.6 percent of the and space equipment, and energy materials— 1977 average—was slightly higher than that pub- 1985 annual output levels were revised down- lished earlier (124.1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

773 Statement to Congress Statement by Paul A. Volcker, Chairman, Board Those factors remained adverse for some time of Governors of the Federal Reserve System, longer. As a result, there are still no clear signs before the Subcommittee on Trade, Committee that the trade deficit is declining, and we have on Ways and Means, U.S. House of Representa- continued to see marked instability in exchange tives, September 24, 1986. rates and strong protectionist pressures. But I also believe that prospects are now more hope- You have raised with me a number of important ful. Some basic corrective forces have been put questions concerning the state of the world econ- in place, and others are receiving more attention. omy, and particularly the U.S. trade position and As a result, we have the clear opportunity for a our increasing international indebtedness. There more favorable conjuncture of policies and reare, indeed, serious problems in these areas that, sults. left untended, would pose great dangers both for Certainly, industrialized countries generally— us and for our trading partners. At the same time, and many developing countries as well—have our responses, and those of other countries, need made considerable progress toward restoring a to be well considered as well as forcible—well greater sense of price stability, one prerequisite considered in terms of their consistency with for sustaining economic growth and greater intersustainable world growth, a greater degree of est rate and financial stability. Current exchange international financial stability, and a trading rate relationships place our industry in a far order able to support that growth. better competitive position among the industrial The burden of my comments today is that countries than it has been for some years; I see much of the groundwork has been, or is being, no need for further adjustments on anything like laid for such an approach. I realize that the the scale or speed of the past 18 months. You and results so far are uneven. Frustrations abound, your colleagues now appear to be dealing with here and abroad. Margins for error have been the budget deficit more forcibly—an approach pretty well exhausted. But I also sense a wider that, if carried through, will reduce our depenappreciation of those risks, a larger degree of dence on foreign capital and provide protection consensus on the directions we must take in against a resurgence of inflation. Moreover, economic policy here and abroad, and greater there have been some signs in some major forwillingness to explore and perhaps deal with eign countries recently, most notably Germany, some of the longer-term "systemic" issues. of a resurgence of domestic demand after a The most striking reflection of the strains in considerable period of sluggishness. There apthe world economy is the enormous imbalance in pears to be growing recognition of the crucial our trade accounts and the counterpart surpluses importance of sustaining that demand. of some countries abroad. When I appeared before this subcommittee in April 1984, our trade and current account deficits were already big and getting bigger—running about $110 billion. Two THE TRADE ACCOUNTS—PROBLEMS AND years later, in the second quarter of 1986, those PROSPECTS deficits approached $150 billion. I emphasized in that earlier appearance that In 1980, the United States had a small trade those external deficits were related to more deficit and the current account—benefiting from fundamental factors—relative rates of economic earnings from our net overseas investment—was growth, the size of our budget deficit, exchange in virtual balance. Since then, the value of imrates, and the international debt crisis. ports, other than oil, has almost doubled. Total Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

774 Federal Reserve Bulletin • November 1986 imports are running at some $360 billion, despite adding much to our productivity or productive large declines in the oil import bill. capacity. In contrast, the total value of U.S. merchan- That is a long-term consideration. In the more dise exports has been little changed on balance immediate future, the relevant question is whethduring the 1980s, running currently at about $220 er foreigners will remain so willing to employ so billion, or only about 60 percent of our imports. large a fraction of their own savings in our An actual decline of more than a third in exports markets. The question could become more pointof agricultural products has been only partially ed if, and as, their own economies expand more offset by a rise in the dollar value of exports of rapidly, as we would like to see. manufactured goods, which must make up the In that respect, much turns on confidence— bulk of our export sales. In volume terms, total confidence that the United States will, in fact, exports have actually declined a bit—about 3 sustain growth without reigniting inflation; that percent—since 1980. the dollar will tend to stabilize in the exchange That swing in our trade accounts is one rea- markets; and that, over time, our trade balance son—the most important reason—that domestic will decline, reducing our need for overseas manufacturing activity has been sluggish during financing. much of the current period of economic expan- There are, of course, strong domestic reasons sion. It is also a factor restraining the willingness why a reduction in our trade deficit is essential. of manufacturers to invest for future expansion. For a time, it could be argued that the rising level At the same time, the surplus we have tradi- of imports and accompanying capital flows tionally run on services and other current ac- brought short-term benefits to most Americans. count items has virtually disappeared, reflecting We could enjoy relatively cheap and high quality primarily the growing amounts of interest paid on imports; intense competition helped stabilize the our increasingly heavy overseas indebtedness. domestic price level; and the ready availability of Borrowing abroad is, of course, a necessary funds from abroad meant that we could finance counterpart of a current account deficit. But we the federal deficit at lower interest rates than have been dependent on foreign borrowing in would have otherwise been possible. But the another sense as well; it has had the practical process also squeezed our industrial base, seeffect of largely offsetting the huge demands on verely affecting a number of industries and workour money and capital markets from the budget ers. deficit. Convenient as that borrowing has been, The strains are now showing economically and however, that process is not sustainable indefi- politically. Indeed, prospects for continuation of nitely. the economic expansion through 1987 and be- We are now by far the world's largest debtor yond are heavily dependent on an improved country, and even under favorable circum- trade balance. The relevant question is how to stances that net indebtedness will increase sub- achieve that result, consistent with our growth stantially further in the years ahead. Of course, and stability and that of the world at large. our external debt, relative to our GNP, is still rather modest. Nonetheless the trend is disturb- TOWARD A CONSTRUCTIVE SOLUTION ing. Over time, interest on that debt will have to be No single measure, here or abroad, is likely by paid, implying the need for relatively more ex- itself to restore a better balance in our trade ports and fewer imports. Unless the foreign position without damaging other important obfunds have, directly or indirectly, been employed jectives, including prospects for world growth. in building productive investment, the implica- That is particularly true of a scatter-gun aptions for growth in American living standards are proach toward protectionism. adverse. Unfortunately, given our budget deficit, I well understand, at a time of stress in imporsavings patterns, and the trend of plant and tant regions of the country and particularly in the equipment spending, the evidence suggests that light of evidence of restrictive practices by othmost of the funds available from abroad have ers, the temptations to move in that direction. indirectly supported consumption rather than But I hope we are fully aware of the risks. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 775 results now would be no better than in the 1930s; Japanese yen and the West German mark), our then, one protectionist measure bred others, and overall trade balance has yet to improve. That is world trade and economic activity were de- not entirely surprising. We are still experiencing pressed together. some of the lagged effects of the extraordinary We preach to Latin America and others the strength of the dollar earlier. Many of those need to find solutions to their problems in the exporting to us have been willing to reduce context of an open trading system, and in the previously wide profit margins, or for a time to efficiencies and productivity that fosters. But of forgo profits for market share. Some U.S. induscourse that will not work unless our market and tries operating at a relatively high level, and others are open to them. And the lesson of the reluctant to expand capacity, have raised their benefits of a liberal trading order is equally own prices as the exchange rate has fallen. applicable to all of us. Moreover, when prices of imports rise, so for a Our effort, instead of retreat, must be directed time will the total import bill, widening the trade toward opening other markets, and toward assur- deficit until competitive adjustments are made. ing that trade can proceed on fair and reciprocal More broadly, we need to recognize that exterms. In the broadest sense, that effort is, of change rate changes alone will not assure the course, what drove our negotiating efforts at lasting competitiveness of our industry or the Punta del Este, as we and others worked to large shift of resources necessary here and launch a new round of General Agreement on abroad to restore better balance to the world Tariffs and Trade (GATT) negotiations. economy. Indeed, without support of other poli- Strengthening the agreed set of international cies, exchange rate changes can be counterprotrading rules is essential to provide a fair and ductive in important respects—inflationary in the more comprehensive framework for the conduct United States and a restraint on demand and of international business. It is part of a construc- economic activity abroad. tive response to protectionist pressures. Fortunately, the sharp decline in oil prices has, I realize that that strengthening is the work of until now, more than offset the effects of the years. More can and should be done to deal, case declining dollar exchange rates on producer and by case, with particular problems with particular consumer prices in the United States. The countrading partners in the nearer term. You are tries with the greatest exchange rate appreciafamiliar with those efforts—with both the suc- tion—Japan and Germany—have experienced a cesses and the frustrations. But I know of no leveling or even a decline in the volume of other way of proceeding without damaging our exports and some increase in imports, as they fundamental objectives. inevitably must if their trade surpluses are to In terms of achieving decided improvement in decline. our trade balance, other approaches will, in any Looking ahead, the relevant question is whethevent, be quantitatively far more important. One er the large shift in resources implicit in reducing of those approaches is to maintain a value for our our trade deficit, and the surpluses of others, can currency vis-a-vis other industrial countries that be accomplished in a framework of noninflationpermits our companies to compete effectively. ary growth, here and abroad. It is that underlying Judgments in this area are always difficult and question that seems to me to lie behind so much results are the acid test. However, in contrast to of the active trans-Atlantic and trans-Pacific ecothe situation 18 months ago, and assuming grow- nomic dialogue in recent months—a question ing markets are open to us, my sense is that we that sometimes seems to be obscured, rather are, for now, reasonably close to an appropriate than enlightened, by focus on the timing or adjustment in that area. Whether that will remain wisdom of particular policy measures, fiscal or a fair judgment is, of course, dependent heavily monetary, by one country or another. on prospects for enhancing productivity in indus- The basic point is that the adjustments retry and maintaining reasonable price stability. quired, by their nature, must be two-sided. The I realize that, even with the dollar more than United States, if it is to reduce its trade deficit 30 percent below its average level in early 1985 substantially, must be prepared, in relative (and about 40 percent lower in terms of the terms, to reduce the rate of growth in domestic Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

776 Federal Reserve Bulletin • November 1986 consumption in favor of the external sector and complementary actions. As you know, the Ecoinvestment. At the same time, we will have to be nomic Summit at Tokyo last spring strongly prepared to rely less on capital inflows to finance emphasized the need for maintaining close condomestic needs. For other countries, with exces- tacts among economic officials, for close review sively large trading surpluses, the opposite must of economic indicators, and for mutual assessbe true—relatively stronger growth in domestic ment of the outlook. The series of meetings demand and consumption and more fully utilized before the annual sessions of the governors of domestic savings as their trade balances decline. the IMF and the World Bank next week will The clear implication is that broadly comple- provide ample opportunity to further that effort. mentary approaches are necessary in the common interest. For the United States, orderly reduction in the budget deficit remains a key, and THE HEAVILY INDEBTED the external sector (and manufacturing activity) DEVELOPING COUNTRIES should provide more of the impetus to growth. For other countries some appropriate mix of Those meetings will also devote a lot of attention monetary, fiscal, and other policies to sustain to the continuing problems of many countries in and enhance domestic demand are required if Latin America and elsewhere burdened with their trade surpluses are to decline in a context of heavy debt as they work to restore greater healthy world growth. growth and stability. Plainly, those problems will While international consultations and discus- to some extent be with us for some time— sions can help clarify these issues, decisions on warning enough of the wisdom of seeking soluthe precise nature and timing of particular fiscal tions to our own "adjustment" problem before it or monetary measures naturally will remain with- reaches crisis proportions. The evident fact that in the province of national governments, subject large difficulties remain should not, however, to their individual analyses of economic develop- obscure the very real progress that has been ments and outlook. Sometimes, coordination of made. particular actions—such as monetary policy Indeed, for most of the indebted countries the decisions—may indeed be important to avoid necessary external adjustment has already been unwanted effects on exchange markets or finan- substantially achieved. Taken as a group, the 15 cial markets generally. But what is far more heavily indebted countries more or less arbitraricritical than the precise timing of particular mea- ly associated with the so-called "Baker Plan" sures is achieving a realistic understanding of the were in rough current account balance in 1984 interactions among national economies, and act- and 1985. In 1981 and 1982, in contrast, they had ing upon that understanding to maintain the an aggregate deficit of about $50 billion. In other momentum of noninflationary growth. words, the collective trade surpluses of those The most recent developments are reasonably countries rose to the point that they offset interencouraging. As I noted earlier, we do appear to est payments on outstanding debt. Interest paybe making some progress toward reducing our ments themselves, reflecting developments in budget deficit, even if all the optimistic assump- world financial markets, are now moving lower. tions underlying the program now under congres- To be sure, that effort for a time was accompasional debate are not borne out. Economic activi- nied by sharply lower imports, recession, and ty—and particularly domestic demand—turned lower standards of living. Moreover, for about stronger in the spring and summer in Germany, two years, there has been little new net lending and to a lesser extent in Japan, following sub- to those countries by the world's commercial stantial sluggishness. banking system. As we look ahead, those cir- I realize that questions are raised about the cumstances need to change. Ultimately, the debt "staying power" of those changes, here and burdens can be carried only in the context of abroad. That is why it is so important that there healthy growth, which, in turn, implies more be full understanding among governments of investment and imports. For most of the indebtwhat is at stake and of the need for continuing ed countries, some margin of funds will be reappraisals of progress and the possible need for quired from abroad to meet those needs although Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 36 not nearly so much as during most of the 1970s threatened to set back the entire effort. To be and early 1980s. sure, pressures on some countries were moderat- Fortunately, there are encouraging signs of ed by lower oil prices. But that same developprogress in those directions. A number of the ment had an enormous adverse impact on major heavily indebted countries are now growing oil exporters such as Mexico, Venezuela, Ecuaagain, in some cases with vigor. That is true in dor, and Nigeria. At the low oil prices reached the case of the largest single debtor country, this summer, for instance, Mexico would lose Brazil. Helped by the reduction in world interest more than a third of its total 1985 exports, rates, external interest burdens are being re- perhaps a fifth of its government revenues, and duced appreciably in some countries relative to the equivalent of more than 5 percent of its gross exports or other measures of capacity to pay. A national product. With the exception of Venezunumber of Latin American countries have also ela, there was no large cushion of external retaken striking initiatives toward dealing with serves to buffer the shock. chronic inflationary problems. Inevitably, that situation has posed a severe Potentially of equal importance, considerable new challenge to all the parties concerned. Mexiif uneven progress has been made toward liberal- co, Nigeria, and Ecuador have each responded izing the economic structures of borrowing coun- with strong new efforts to deal with budgetary tries in ways that should encourage more growth deficits, to improve efficiency, and to promote and productivity over time, in the process justi- longer-run efficiency and longer-run adjustment. fying new equity investment and some lending by In the case of Mexico, the basic orientation is international institutions and banks. That prog- symbolized by a long-debated decision to join ress has been particularly evident with respect to GATT. In that spirit, import restrictions are the trade sectors of a number of countries. being rationalized and liberalized, some state- The main motivation clearly is to improve the owned enterprises are being made available for efficiency and competitiveness of their own ex- sale (or, if too inefficient, shut down), subsidies port industries. However, the result should cer- are being reduced and eliminated, and procetainly be to enhance opportunities for exports dures for approving foreign investment are being from the United States and other industrial coun- eased. tries. A more favorable attitude toward private The IMF is supporting those efforts. It has investment, both by their own citizens and by agreed in its own lending program to imaginative foreigners, is another indication of a generally new approaches to help assure growth and guard more outward-looking, market-oriented ap- against further adverse oil contingencies. The proach. World Bank is ready to provide sizable new It would be too much to claim that this prog- credits to assist sectoral and structural adjustress is uniform or yet firmly ingrained in econom- ment, with appropriate monitoring of progress. ic or political structures. But against the very At the same time, significantly larger financial different pattern of the past—a pattern extending resources than anticipated earlier for Mexico will over decades of inward looking efforts at self- have to be marshalled from both official and sufficiency and strong state control of industry— banking sources abroad to help ease the transithe sense of change is impressive. I believe it is tion, to maintain continuity in debt service, and deeply in those countries' interest, and ours, to to provide a solid base for renewed growth. see that process continue and mature, for it will That combination of adjustment, structural ultimately provide the basis for renewed prosper- change, and appropriate financing in support of ity, higher living standards, and greater political renewed growth is the essence of the approach stability. To achieve that end, it is also evident set out by Secretary Baker at Seoul last year. that much will depend upon the cooperation of What remains to be done in the case of Mexico creditor banks and governments in supporting is completing financial agreements with commereffective economic programs, sustaining a rea- cial bank creditors both to restructure outstandsonably favorable world economic climate, and ing debt at acceptable terms and to provide the maintenance of open markets. needed margin of new credits, comparable in The sharp decline in oil prices earlier this year total to those supplied by official sources. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

778 Federal Reserve Bulletin • November 1986 The net amount to be made available by com- know of no other workable approach to meet the mercial banks through the end of next year basic objectives. And all of the parties—borrowwould run to a little less than 7 percent of ers or lenders—have an enormous interest in the outstanding loans. That is a sizable amount, but success of the whole. Moreover, success in the it should be kept in perspective. It is so large Mexican effort—now at the crucial stage—will only because of the size of the decline in oil set a most promising example for dealing with prices—a decline that has reduced expected fi- the needs of other countries. nancing needs of some other countries. Looking Among the beneficiaries of renewed growth in back, commercial banks' claims on Mexico ap- Latin America should be the U.S. trade position. pear not to have increased significantly for more Traditionally, we had a sizable surplus in manuthan two years. Taking Latin America as a factured goods with Latin America, and a small whole, present indications are that lending vol- surplus overall. Those surpluses fell away in the umes, taking one year with another, both for 1980s as the United States absorbed the brunt of official and commercial bank lenders, should the necessary adjustments in the trade position remain generally within the amounts foreseen by of the borrowers. But now, Latin American Secretary Baker a year ago. imports should resume growth more or less in Moreover, taking the entire period since mid- line with their exports, and, with adequate fi- 1982, there has been a striking decline in the nancing, probably faster. Latin America is a exposure of American banks to the heavily in- natural market for us. With a more competitive debted countries of Latin America relative to dollar, our exports are in a position to gain both their capital. That ratio for all significant lending absolutely and relatively. banks fell from about 120 percent of bank capital to less than 75 percent at the end of March 1986, a decline of 40 percent. Those exposures are AN INTERDEPENDENT WORLD actually considerably less than in 1977 when the data were first collected. It has become a cliche to refer to the interdepen- Success in dealing with the debt problem in dence of national economies in the world today. Mexico, as elsewhere, remains totally dependent But cliche or not, it is a reality, and our poliupon a strong sense of interdependence and cies—those of the United States and other councommitment by borrowing countries, commer- tries—must recognize that reality. cial bank lenders, international institutions, and The range of considerations and policies that I governments. Each of the parties has a lot at have touched upon today illustrates the point: stake. The debtor countries plainly both want to maintain their creditworthiness and to restore • The United States must continue to work growth and stability—and those objectives are toward reducing the federal budget deficit. closely related. Major commercial banks remain • We must keep inflation under control, partly heavily exposed and want borrowers to be able to preserve the competitiveness of U.S. goods to service their debts. Governments and interna- but also to contribute to the greater stability of tional institutions, like the borrowers and private exchange rates and prices in markets generally. lenders, have a strong interest in international • Other industrial countries must ensure adefinancial order, in expanding markets, and in quate growth of domestic demand as their exterreduced imbalances. And, of course, relation- nal trade surpluses shrink. ships beyond the purely economic are at stake, • Developing countries need to work forcibly for the United States most of all. and effectively to improve their economic effi- That sense of mutual interest is being strongly ciency and stability. tested once again, under the pressure of oil • International financial institutions and comprices that few had anticipated. But after months mercial bank creditors need to support those of delay, substantial progress is now being made, efforts. not only in Mexico but elsewhere. Obviously, • All countries must resist protectionist presthe job is not complete, and time is short. But I sures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 779 If all these things are done reasonably well, the past into more coherent and effective trading then the outlook for sustained and more balanced and monetary systems, then we will have greatly growth in the world economy for the period enhanced the prospects for sustaining good perimmediately ahead is good. If we can go still formance in the more distant future. That is the further, and incorporate some of the lessons of challenge for the years ahead. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

780 Announcements MEETING OF acquire the ability to exercise a controlling influ- CONSUMER ADVISORY COUNCIL ence over the management and policies of Goldman Sachs within the meaning of the Bank The Federal Reserve Board announced that its Holding Company Act. Consumer Advisory Council met on October 8 and 9, in sessions open to the public. The Council's function is to advise the Board PROPOSED ACTION on the exercise of the Board's responsibilities under the Consumer Credit Protection Act and The Federal Reserve Board issued for public on other matters on which the Board seeks its comment a proposal to modify the method of advice. recovering the cost of automated clearinghouse (ACH) float and to establish a night-cycle surcharge to compensate for the higher operating INFORMAL HEARING HELD costs during this time. Comment is requested by ON PROPOSED INVESTMENT IN November 21. GOLDMAN, SACHS & COMPANY The Federal Reserve Board announced that on SYSTEM MEMBERSHIP: Friday, October 10, 1986, an informal hearing ADMISSION OF STATE BANKS was held concerning the proposed $500 million nonvoting limited partnership investment by The The following banks were admitted to member- Sumitomo Bank, Ltd., Osaka, Japan, in Gold- ship in the Federal Reserve System during the man, Sachs & Company, New York, New York. period September 1 through September 30, 1986: In view of the broad public interest in the investment and its significance for the adminis- California tration of the Bank Holding Company Act and Encino Bank of Encino the Glass-Steagall Act, it was believed important Colorado for the Board to have the benefit of public Englewood Professional Bank comment. The hearing received comments of of Colorado interested persons on the public policy and legal Delaware issues raised by the proposed investment, focus- Wilmington First Pennsylvania Bank ing on whether that investment is consistent with (Delaware) the Bank Holding Company Act and the Glass- Florida Steagall Act. Among other points, the hearing Keystone Heights Merchants & Southern elicited testimony on whether Sumitomo will Bank of Clay County Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

781 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON AUGUST 19, 1986 Capacity utilization in manufacturing, mining, and utilities decreased 0.2 percentage point fur- Domestic Policy Directive ther in July to 78.2 percent; during the past six months the overall rate of capacity utilization has The information reviewed at this meeting indicat- fallen 2.6 percentage points. ed an uneven pattern of developments in differ- Total retail sales were about unchanged in ent sectors of the economy but suggested on June and July; however, excluding automobiles, balance that economic activity was expanding at gasoline, and nonconsumption items, retail sales a moderate pace in the current quarter. Consum- increased 0.7 percent in July after an upwarder spending and housing activity have been rela- revised increase of 0.4 percent in June. Sales tively robust, while business investment has re- remained particularly strong at furniture and mained sluggish and the trade balance does not appliance stores. Total car sales slipped to a 10.9 appear to have improved. On average, prices and million unit annual rate in July, as a drop in sales wages have risen more slowly this year than in of domestic models more than offset an increase 1985, although fluctuations in energy costs have in foreign car sales. resulted in some month-to-month volatility. Residential construction activity has contin- Total nonfarm payroll employment grew ued to expand, reflecting the rise in housing strongly in July, rising nearly VA million after starts earlier in the year. However, the level of adjustment for strikes, well above the average starts has tapered off recently from the excepmonthly gains during the first half of the year. tional pace of the early spring, reflecting in part Hiring was up in construction and remained high vacancy rates and tax law changes that have robust in the trade and service sectors. Howev- damped multifamily construction. In June, total er, manufacturing employment registered anoth- private starts were at an annual rate of WA million er drop, bringing the cumulative decline since units. Sales of single-family homes also weak- January to 175,000. The civilian unemployment ened in May and June, but from a very high April rate declined 0.2 percentage point to 6.9 percent, peak. toward the lower end of the range that has Business fixed investment apparently reprevailed over the past year. mained sluggish with the weakness concentrated The index of industrial production edged down in nonresidential structures. The sharp curtail- 0.1 percent in July after declining 0.3 percent in ment of petroleum drilling contributed to a fur- June. Since reaching its most recent peak in ther decline in the nonresidential structures com- January, the index has dropped about 2 percent. ponent, although commercial and industrial Despite increased production in July in indus- construction also fell. Moreover, new committries affected by the settlement of strikes, partic- ments for nonresidential construction have fallen ularly the communication equipment industry, sharply since late last year, suggesting that outoutput has remained generally sluggish. Weak- lays may retreat further during the third quarter. ness has persisted in the output of business In contrast to structures, outlays for equipment equipment and consumer goods, although the rose markedly in the second quarter, led by a direct effects of declines in petroleum drilling are rebound in office and computer equipment; howbeginning to wane; automobile assemblies were ever, this gain only partly reversed a sharp down 400,000 in July, but the decline was largely decline in the first quarter. New orders for offset by gains in the production of light trucks. nondefense capital goods fell for three consecu- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

782 Federal Reserve Bulletin • November 1986 tive months before posting a small gain in June. expected such an approach to policy to be con- Inventory data for the second quarter, though sistent with growth in M2 and M3 over the period incomplete, suggested a marked slowdown in the from June to September at annual rates of 7 to 9 rate of accumulation, as auto dealers pared percent. Over the same period growth in Ml was stocks slightly after two quarters of rapid accu- expected to moderate from the rapid pace in the mulation. second quarter. The Committee agreed that it Wage increases appear to have slowed further would continue to evaluate Ml in light of the this year, and, except for a June rebound in broader aggregates and other factors. The memconsumer energy prices, recent price data have bers also acknowledged that somewhat greater reflected continued restraint through midyear. or lesser reserve restraint might be acceptable The producer price index fell 0.4 percent in July, depending on the behavior of the aggregates, the and the consumer price index excluding energy strength of the business expansion, developwas up 0.2 percent in June. For the second ments in foreign exchange markets, progress quarter as a whole, the CPI excluding energy against inflation, and conditions in domestic and rose at an annual rate of about 3 percent, down international credit markets. The intermeeting almost a full percentage point from the first range for the federal funds rate was reduced 1 quarter. In the commodity markets, the price of percentage point to 4 to 8 percent. crude oil on spot markets fell through much of An easing in reserve conditions was imple- July, but then rose sharply following an accord mented shortly after the July meeting through a by OPEC to restrain productior At the same V2 point reduction in the discount rate to 6 time, livestock and poultry prices have moved percent. In the two complete reserve maintehigher while gold and platinum prices have nance periods since the meeting, adjustment plus soared, apparently largely reflecting expecta- seasonal borrowing at the discount window avertions of reduced supplies. aged just under $400 million, somewhat higher Since the July FOMC meeting, the weighted- than in the previous intermeeting period. A poraverage foreign exchange value of the dollar tion of this borrowing, however, reflected adjustdeclined a further 3Y2 percent on balance; the ment credit to depository institutions facing spedollar depreciated almost 516 percent against the cial situations. Incoming data during the mark and somewhat less against the yen. The intermeeting period indicated that growth of all reduction in the discount rate by the Federal of the monetary aggregates accelerated in July. Reserve announced on July 10 and the failure of M2 and M3 were estimated to have expanded at other central banks to follow apparently contrib- annual rates of 123/t and 13 percent respectively. uted to the dollar's weakness. Short-term inter- The rapid growth in the broader aggregates est rates abroad were little changed during the pushed them into the upper portions of their intermeeting period while comparable U.S. rates ranges for 1986. At the same time growth in Ml declined about Vs of 1 percentage point. The in July was close to the extraordinary pace of the differentials between long-term interest rates in second quarter. the United States and comparable rates in Ger- Federal funds generally traded in the 6LA to 63/s many and Japan were about unchanged on bal- percent area after the V2 percentage point cut in ance. The U.S. merchandise trade deficit in the the discount rate announced on July 10, down second quarter appeared unchanged from the from the 67/s percent rate prevailing at the time of first quarter. The value of oil imports continued the July meeting. With the reduction in the to fall, while that of non-oil imports rose further. discount rate widely anticipated, however, other About one-half of the increase in the value of interest rates generally did not post comparable non-oil imports apparently reflected rising im- declines. While rates on short-term securities port prices. have fallen 25 to 50 basis points over the intermeeting period, yields in the longer-term markets At its meeting on July 8-9, the Committee have been about unchanged to only slightly lowadopted a directive that called for decreasing er on balance. The recent behavior of longersomewhat the existing degree of pressure on term interest rates has reflected in part uncerreserve positions, taking account of the possibilitainty about the prospects for further rate ty of a change in the discount rate. The members Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 783 declines in light of the absence of policy actions parts of the world. On the more positive side, abroad to reduce interest rates as well as a members referred to the apparently more favorcautious interpretation of incoming economic able prospects for economic expansion in a maand price news, including the possibility of some jor European country. Some members also comincrease in inflationary pressures over time. mented that while improvement in the trade The staff projections presented at this meeting balance had been more delayed than many had suggested that growth in real GNP likely would expected, some historical experience in combipick up somewhat in coming months. Growth nation with current circumstances provided reawas forecast to continue at a moderate pace in sons for remaining optimistic that a substantial 1987. A projected improvement in the U.S. trade turnaround in trade would occur later, perhaps position was anticipated to be a key element toward the end of this year or in early 1987. supporting growth in domestic production over The members differed to some extent in their the next year and a half. Over the same time assessment of domestic developments bearing on period, growth in domestic demand was expect- the economic outlook. While economic performed to be relatively sluggish. The rate of inflation ance remained uneven in different sectors of the was anticipated to edge up in coming quarters, economy and parts of the country, overall conpartly reflecting upward pressure on prices from sumer spending and the demand for housing the effects of the dollar's depreciation as well as were being well maintained in association with the diminishing impact of oil price declines, continuing gains in employment and incomes and which had served to hold down price indexes reduced interest rates. One member observed thus far in 1986. The civilian unemployment rate that, given generally lean inventories outside the was forecast to drop somewhat over the projec- automobile industry, further gains in consumer tion horizon. spending were likely to stimulate increasing do- In the Committee's discussion of the economic mestic production at some point. A number of situation and outlook, members focused consid- members also referred to the relatively rapid erable attention on the uncertain prospects for growth in money balances as a factor that would the nation's foreign trade deficit. They saw trade tend to support business activity over the quardevelopments as a key element in the outlook for ters ahead. On the negative side, rising consumer domestic business activity, and several com- debt burdens were likely to restrain the expanmented that the business expansion might well sion in consumer spending and business investremain relatively weak if the trade balance did ment showed no evidence of an appreciable not show significant improvement over the quar- pickup. ters ahead. The substantial depreciation of the The members recognized that a number of dollar against major foreign currencies was still developments, in addition to the uncertainties expected to foster a turnaround in net exports at surrounding the outlook for trade, were currently some point, but the absence of progress to date clouding economic prospects. These included could be read as auguring a muted as well as a the tax reform legislation whose overall impact further delayed response to the dollar's deprecia- was very difficult to predict, especially for the tion. next several quarters, because of the very com- During the discussion, a number of members prehensive and complex changes incorporated in emphasized that improvement in the trade bal- the legislation. In the consumption area, for ance was being inhibited by relatively sluggish example, the loss of deductibility for sales taxes economic activity in several key industrial na- starting in 1987 and the phase-out of interest tions abroad. Other developments working in the deductions on consumer debt might tend to resame direction included the lack of dollar depre- strain spending on consumer durables over time, ciation against the currencies of a number of but some members noted that it might also developing countries that had important trading stimulate such spending over the balance of the relationships with the United States, the severe year. The impact of the new legislation on busidebt problems of several less developed nations, ness investment was especially hard to assess. It and the competition in agricultural export mar- was suggested that on balance the impact might kets stemming from large grain harvests in many tend to be negative for some time, but many Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

784 Federal Reserve Bulletin • November 1986 businessmen apparently saw the removal of un- duction of V2 percentage point to a range of 5V2 to certainties about the legislation as a positive 8V2 percent for both M2 and M3. In the case of development for the nearer term. Members also Ml the Committee expressed the preliminary commented that the outlook for the federal bud- view that retention of the 1986 range of 3 to 8 get deficit and its consequent impact on the percent, which implied a considerable reduction economy remained unclear. from the actual rate of growth that now seemed With regard to the prospects for inflation, the likely for 1986, appeared appropriate for 1987 in members generally were not concerned about a the light of most historical experience. The Comresurgence in the nearer term, but several ex- mittee also retained the range of 8 to 11 percent pressed uneasiness about the longer-run outlook. for growth in total domestic nonfinancial debt in Members referred to the inflationary implica- 1987. It was understood that all the ranges were tions of relatively rapid monetary growth, espe- provisional and that, notably in the case of Ml, cially if it continued, and to the further impact of they would be reviewed in early 1987 in the light the dollar's depreciation on prices of imports and of intervening developments. competing domestic products. In the latter con- In the Committee's discussion of policy implenection one member observed that, despite rela- mentation for the weeks immediately ahead, a tively large inventories, domestic producers of number of members suggested that any further automobiles were raising their prices in response easing might be accomplished through a further to increases in the prices of competing imports. V2 percentage point reduction in the discount One member also expressed concern that the rate, while open market operations would be new tax reform legislation, to the extent that it directed toward maintaining an essentially unshifted tax burdens to businesses, could put changed degree of reserve availability. Some upward pressures on prices, at least initially. The members expressed reservations about such a favorable direct effects of large declines in oil reduction, especially in the absence of indicaprices now appeared to be in the past, and one tions that it would be followed fairly promptly by member observed that commodity prices more policy easing actions in major industrial nations generally might be poised for an upturn. Some abroad. In this view a unilateral decrease in the members saw indications that inflationary expec- discount rate might foster substantial additional tations were starting to intensify, even though depreciation in the dollar, with adverse repercussions on investor willingness to hold dollars. actual prices and wages generally were rising less Several members, however, saw a lesser risk to rapidly this year than in 1985. the dollar or one that needed to be accepted. At its meeting in July the Committee had Some wanted to reduce the risks of rapid dollar reviewed the basic policy objectives that it had depreciation by a small increase in the degree of established in February for growth of the monereserve pressure in the event of a reduction in the tary and credit aggregates in 1986 and had set discount rate. Several other members indicated tentative objectives for expansion in 1987. For that they did not agree. While some firming the period from the fourth quarter of 1985 to the should not be ruled out in their view, it should be fourth quarter of 1986, the Committee had reafmade contingent on an adverse move in the firmed the ranges established in February for exchange rate and other potential developments growth of 6 to 9 percent for both M2 and M3. The such as evidence of greater inflationary danger associated range for expansion in total domestic and stronger business activity. One member also nonfinancial debt also was reaffirmed at 8 to 11 commented that any increase in the degree of percent for 1986. With respect to Ml, the Comreserve pressure had to be weighed against the mittee decided that growth in excess of the 3 to 8 risk of triggering a rise in long-term interest percent range set in February would be acceptrates; such a rise, if it occurred, would weaken able and would be evaluated in the light of the the prospects for a pickup in the rate of economic behavior of Ml velocity, the expansion of the expansion. broader aggregates, developments in the economy and financial markets, and price pressures. In further discussion, Committee members ex- For 1987 the Committee agreed on tentative pressed some concern about the continuation of monetary growth objectives that included a re- rapid growth in the monetary aggregates and the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 785 implications of such growth for potential infla- favored or could accept a directive that called for tion later. The members recognized that much of some slight easing in the degree of reserve presthe rapid growth, especially in Ml, probably sure, taking account of the possibility that such reflected increasing demands for liquid assets in easing might be accomplished through a reducresponse to declining interest rates and subsiding tion in the discount rate. The members expected inflation rather than excessive money creation this approach to policy implementation to be with potentially inflationary consequences. They consistent with growth in M2 and M3 at annual also felt that Ml growth should continue to be rates of about 7 to 9 percent over the June-toevaluated in the context of a relatively sluggish September period. Over the same interval, economy and in light of the expansion in the growth in Ml was expected to moderate from the broader aggregates. While a sluggish economic exceptionally large increase during the second performance would dampen inflationary risks, quarter. With the prospective behavior of Ml continuing growth in M2 and M3 at the relatively remaining subject to unusual uncertainty, the rapid rates experienced recently might be a mat- Committee again decided not to specify a rate of ter of growing concern, especially if such expan- expected growth in the operational paragraph of sion tended to coincide with indications of stron- the directive but to continue to evaluate this ger business activity. aggregate in the light of the performance of the In their evaluation of the outlook for monetary broader aggregates and other factors. The Comgrowth, the members took into account an analy- mittee indicated that it might find somewhat sis, which indicated that much slower expansion, greater or somewhat lesser reserve restraint acespecially in the broader aggregates, was likely ceptable over the intermeeting period depending to develop over the next few months if short- on the decision with respect to the discount rate term interest rates stayed around their current and on such other factors as the behavior of the levels. On the other hand, monetary growth monetary aggregates, the strength of the busimight remain relatively rapid over the period ness expansion, the performance of the dollar in ahead if short-term rates were to drop somewhat foreign exchange markets, progress against inflafurther. The members recognized that the timing tion, and conditions in domestic and internationand extent of any slowing in monetary growth al credit markets. The members agreed that the remained subject to a great deal of uncertainty. intermeeting range for the federal funds rate, which provides a mechanism for initiating con- In the discussion of possible intermeeting adsultation of the Committee when its boundaries justments in the degree of reserve pressure, the are persistently exceeded, should be left unmembers agreed that a degree of flexibility would changed at 4 to 8 percent. be useful, taking into consideration whether or not the discount rate was reduced and subse- At the conclusion of the meeting, the following quent developments in domestic financial mar- domestic policy directive was issued to the Fedkets and especially in foreign exchange markets. eral Reserve Bank of New York: If the discount rate were not reduced, a slight easing in pressure on reserve positions might be The information reviewed at this meeting indicates a mixed pattern of developments but suggests on balappropriate. Alternatively, if the discount rate ance that economic activity is expanding moderately were reduced and the reduction was followed by in the current quarter. In July total nonfarm payroll a substantial weakening of the dollar in foreign employment grew strongly, boosted in part by the exchange markets, a little greater caution in the return of striking workers. However, continued weakprovision of reserves through open market oper- ness in the industrial sector was reflected in further declines in employment in manufacturing and mining. ations would be appropriate. In keeping with the The civilian unemployment rate moved down to 6.9 Committee's usual practice, consideration also percent from 7.1 percent in June. Industrial production would need to be given to ongoing economic and declined slightly further in July. The nominal value of financial developments and the growth of the total retail sales was about unchanged during the monetary aggregates. Such developments might month, as sales of new autos declined somewhat but warrant an adjustment in either direction. spending on other consumer goods remained strong. Housing starts fell somewhat in May and June from a At the conclusion of the Committee's discus- relatively high level earlier in the year. Business sion, all but two members indicated that they capital spending appears to have remained weak, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

786 Federal Reserve Bulletin • November 1986 partly reflecting continuing declines in the energy For 1987 the Committee agreed on tentative ranges sector. While fluctuations in energy prices have of monetary growth, measured from the fourth quarter caused some month-to-month volatility, on average of 1986 to the fourth quarter of 1987, of 5VI to 8 VI prices and wages are rising more slowly this year than percent for M2 and M3. While a range of 3 to 8 percent in 1985. for Ml in 1987 would appear appropriate in the light of The trade-weighted value of the dollar against major most historical experience, the Committee recognized foreign currencies has continued to decline since the that the exceptional uncertainties surrounding the be- July 8-9 meeting of the Committee. The U.S. mer- havior of Ml velocity over the more recent period chandise trade deficit in the second quarter appears to would require careful appraisal of the target range at have been about unchanged from the first quarter. The the beginning of 1987. The associated range for growth value of total exports and of total imports remained in total domestic nonfinancial debt was provisionally about the same in the two quarters, although the value set at 8 to 11 percent for 1987. of oil imports continued to fall in the second quarter In the implementation of policy for the immediate while that of non-oil imports rose further. future, the Committee seeks to decrease slightly the Growth of M2 and especially of M3 picked up in existing degree of pressure on reserve positions, tak- July, lifting expansion of these two aggregates for the ing account of the possibility of a change in the year through July well into the upper portion of their discount rate. This action is expected to be consistent respective ranges established by the Committee for with growth in M2 and M3 over the period from June 1986. In July Ml continued to grow at a rate close to to September at annual rates of about 7 to 9 percent. the very rapid pace of the second quarter. Expansion While growth in Ml is expected to moderate from the in total domestic nonfinancial debt remains apprecia- exceptionally large increase during the second quarter, bly above the Committee's monitoring range for 1986. that growth will continue to be judged in the light of Short-term interest rates have declined somewhat the behavior of M2 and M3 and other factors. Somesince the July meeting of the Committee, while most what greater or lesser reserve restraint might be aclong-term interest rates are about unchanged to slight- ceptable depending on the behavior of the aggregates, ly lower on balance. On July 10, the Federal Reserve the strength of the business expansion, developments Board approved a reduction in the discount rate from in foreign exchange markets, progress against infla- 6V2 to 6 percent. tion, and conditions in domestic and international The Federal Open Market Committee seeks mone- credit markets. The Chairman may call for Committee tary and financial conditions that will foster reasonable consultation if it appears to the Manager for Domestic price stability over time, promote growth in output on Operations that reserve conditions during the period a sustainable basis, and contribute to an improved before the next meeting are likely to be associated with pattern of international transactions. In furtherance of a federal funds rate persistently outside a range of 4 to these objectives the Committee agreed at the July 8 percent. meeting to reaffirm the ranges established in February for growth of 6 to 9 percent for both M2 and M3, Votes for this action: Messrs. Volcker, Corrigan, measured from the fourth quarter of 1985 to the fourth Angell, Guffey, Heller, Mrs. Horn, Messrs. Johnquarter of 1986. With respect to Ml, the Committee son, Morris, Rice, and Ms. Seger. Votes against recognized that, based on the experience of recent this action: Messrs. Melzer and Wallich. Absent years, the behavior of that aggregate is subject to and not voting: None. substantial uncertainties in relation to economic activity and prices, depending among other things on the Messrs. Melzer and Wallich were in favor of responsiveness of Ml growth to changes in interest maintaining the existing degree of reserve presrates. In light of these uncertainties and of the substantial decline in velocity in the first half of the year, the sure. Mr. Melzer continued to be concerned Committee decided that growth of Ml in excess of the about the impact of further easing on inflationary previously established 3 to 8 percent range for 1986 expectations and the value of the dollar in foreign would be acceptable. Acceptable growth of Ml over exchange markets. In addition, he noted that the remainder of the year will depend on the behavior during the intermeeting period the outlook for of velocity, growth in the other monetary aggregates, developments in the economy and financial markets, real economic activity in the second half of 1986 and price pressures. Given its rapid growth in the early and in 1987 had not deteriorated and perhaps part of the year, the Committee recognized that the even had improved slightly. Mr. Wallich emphaincrease in total domestic nonfinancial debt in 1986 sized that the implementation of unchanged remay exceed its monitoring range of 8 to 11 percent, but serve conditions would improve the prospects felt an increase in that range would provide an inappropriate benchmark for evaluating longer-term trends for significant slowing in monetary growth, in that aggregate. thereby reducing the potential for inflation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

787 Legal Developments ORDERS ISSUED UNDER BANK HOLDING holding company's home state,2 unless the acquisition COMPANY ACT, BANK MERGER ACT, BANK is "specifically authorized by the statute laws of the SERVICE CORPORATION ACT, AND FEDERAL state in which such bank is located, by language to that RESERVE ACT effect and not merely by implication." The statute laws of the District authorize the acquisition of a bank Orders Issued Under Section 3 of the Bank in the District by a bank holding company that controls Holding Company Act a bank located in another state in a defined southeastern region, including Virginia.3 Such acquisitions are Dominion Bankshares Corporation permitted if the laws of the acquiring institution's Roanoke, Virginia home state permit the acquisition of a bank in that state by a District bank holding company or bank on a Order Approving Acquisition of Bank reciprocal basis. Virginia has enacted a similar reciprocal statute,4 which permits the acquisition of a Dominion Bankshares Corporation, Roanoke, Virgin- Virginia bank by a bank holding company located in ia, a bank holding company within the meaning of the the District. Bank Holding Company Act of 1956, as amended The Council of the District enacted legislation on ("BHC Act" or "Act") (12 U.S.C. § 1841 et seq.), February 25, 1986, setting forth its findings that the has applied for the Board's approval under section proposed acquisition satisfies all of the conditions 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire imposed by the District statute and recommending that National Bank of Commerce, Washington, D.C. the Board approve the application.5 After review of ("Bank"). the relevant Virginia and District statutes, the Board Notice of the application, affording an opportunity has determined that the Virginia statute and the profor interested persons to submit comments, has been posed acquisition satisfy the conditions of the Disgiven in accordance with section 3(b) of the Act. The trict's regional interstate banking statute and that the time for filing comments has expired, and the Board District statute expressly authorizes a Virginia bank has considered the application and all comments re- holding company, such as Applicant, to acquire a bank ceived, including the comments submitted by the located in the District, such as Bank. Accordingly, the District of Columbia Reinvestment Alliance, in light of Board concludes that approval of Applicant's proposal the factors set forth in section 3(c) of the Act to acquire a bank in the District is not barred by the (12 U.S.C. § 1842(c)). Douglas Amendment. Applicant is the third largest commercial banking Applicant's subsidiary banks compete with Bank in organization in Virginia, controlling total domestic the only market in which the latter operates, the deposits of approximately $3.6 billion, representing Washington, D.C., banking market.6 Applicant is the 11.2 percent of total deposits in commercial banks in Virginia.1 Bank is the 12th largest commercial bank in the District of Columbia (the "District"), controlling 2. A bank holding company's home state is that state in which the aggregate domestic deposits of approximately $66.2 operations of the bank holding company's banking subsidiaries were million, representing 0.7 percent of the total deposits principally conducted on July 1, 1966, or the date on which the in commercial banks in the District. company became a bank holding company, whichever is later. 3. District of Columbia Regional Interstate Banking Act of 1985, Section 3(d) of the Act (12 U.S.C. § 1842(d)), the 1985 D.C. Law 6-63 (to be codified at D.C. Code Ann. §§ 26-801 Douglas Amendment, prohibits the Board from ap- et seq.), § 3(a). The states in the region defined by this Act include proving an application by a bank holding company to Alabama, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, and West Virginia, in addition acquire control of any bank located outside of the to Virginia. 4. Va. Code § 6.1-398 et seq. (Supp. 1985). 5. D.C. Act 6-567 (1986). 6. The Washington D.C., banking market is defined as the Washington, D.C. Ranally Metropolitan Area, which comprises the District of Columbia and the surrounding suburban areas of Virginia and 1. Deposit data are as of June 30, 1985. Maryland. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • November 1986 14th largest of 65 commercial banking organizations in comments of the District of Columbia Reinvestment the Washington market, in which its subsidiary banks Alliance ("Protestant"). Protestant alleges that Applicontrol domestic deposits of $305 million, representing cant and Bank have failed to assess and meet the needs 1.8 percent of the total deposits in commercial banks of low- and moderate-income and minority residents in the market.7 Bank is the 37th largest commercial within the communities served by Applicant and banking organization in the market, controlling domes- Bank, and, in particular, argue that Bank has made no tic deposits in the market of $66.2 million, representing effort to meet the mortgage lending needs of minority 0.3 percent of the total deposits in commercial banks and low- and moderate- income neighborhoods in its in the market. Upon acquisition of Bank, Applicant service area. Protestant also argues that Applicant's would become the 11th largest commercial banking commitments to the District, discussed below, would organization in the Washington market and would not improve the CRA performance of Applicant and control approximately 2.1 percent of the total deposits Bank sufficiently to warrant approval of this applicain commercial banks in the market. tion. Protestant also requests that the Board investi- The Washington market is, and would continue after gate whether Bank engages in discriminatory lending consummation of the proposed acquisition to be, an practices. Protestant has requested a public hearing unconcentrated market.8 Moreover, a large number of with respect to its allegations. commercial banking organizations would remain in the In accordance with the Board's practice and proce- Washington market after the proposed acquisition. On dures for handling protested applications,9 the Board the basis of these and all other facts of record, the reviewed the CRA record of Applicant and Bank, the Board concludes that consummation of the acquisition information provided and allegations made by Proteswould not have a significant adverse effect on existing tant, and Applicant's response. The Board notes that competition in the Washington market. In view of the Applicant and Protestant attended several private existence of numerous other potential entrants into the meetings in May 1986 to clarify the issues and provide relevant banking market, the Board has concluded that a forum for the resolution of differences. The Board consummation of the proposed transaction would not also has considered that, in conjunction with Applihave any significant adverse effects on probable future cant's application to the District Council to acquire competition in any relevant market. Bank, Applicant made the following specific commit- The financial and managerial resources and future ments to the District Council related to community prospects of Applicant and its subsidiary banks and of reinvestment: Bank are considered satisfactory and consistent with 1. Applicant and Bank will use their best efforts to approval. In considering the convenience and needs of lend a minimum of $3 million in "underserved the communities to be served, the Board has also areas" of the District of Columbia over the next five taken into account the records of Applicant's bank years. The loan program will be managed and adsubsidiaries and of Bank under the Community Rein- ministered by a senior lending officer of Bank and vestment Act ("CRA") (12 U.S.C. § 2901 et seq.). will include purchase and home improvement loans The CRA requires the federal bank supervisory agen- and a full range of commercial loans. cies to encourage financial institutions to help meet the 2. Applicant or Bank will purchase at least one credit needs of the local communities in which they are additional share in the District's Neighborhood Ecochartered consistent with the safe and sound operation nomic Development Corporation. The price of one of such institutions. To accomplish this objective, the share is $50,000. CRA requires the appropriate federal banking agency 3. Bank will work with the District's Department of to assess the records of banks in meeting the credit Employment Services to identify qualified job canneeds of their entire communities, including low- and didates who are District residents. moderate-income neighborhoods, consistent with their 4. Bank will continue to make "life-line" services safe and sound operation, and to take those records available to low-income persons and senior citizens. into account in its evaluation of bank holding company 5. Bank will seek new opportunities for the funding applications. of public housing and revitalization programs with In reviewing the CRA records of Applicant's bank the District Housing Finance Agency, Neighborsubsidiaries and Bank, the Board has considered the hood Housing Services, and the Washington Local Development Corporation. 7. Market deposit data are as of June 30, 1986. 6. Bank will continue to work with career training 8. Consummation of the proposed transaction would increase the and similar programs which are of public benefit to market's Herfindahl-Hirschman Index ("HHI") by 1 point, from 816 District residents. to 817. The market is considered unconcentrated under the Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), and the increase in the HHI resulting from the transaction is not within the parameters the Department of Justice has stated are likely to result in its challenging the transaction. 9. 12 C.F.R. § 262.25. 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Legal Developments 789 7. Bank and Applicant state a commitment to the programs in low- and moderate-income and minority hiring of minorities and women and will continue to communities. hire and promote additional minorities and women Protestant requests that the Board investigate and will work with the District's Department of whether Bank engages in discriminatory lending prac- Employment Services to identify qualified job can- tices in the Washington, D.C., market. Protestant has didates. provided no evidence of specific discriminatory or 8. Bank states a commitment to have its Board of other illegal lending practices by Bank, and the large Directors representative of the community it serves. proportion of Bank's small business loans made to Bank and Applicant state a commitment to actively businesses owned by minorities and women suggests consider minorities and women to fill vacancies on that NBC is not allocating credit on a discriminatory their respective boards, and both will seek assis- basis. tance from District groups in identifying qualified Thus, based on all the facts of record, the Board community leaders to fill vacancies. believes that Bank's record under the CRA is consistent with approval of this application. On the basis of these commitments and the CRA With respect to Applicant's bank subsidiaries, Prorecords of Applicant and Bank, the District Council testant alleges that Applicant has not made sufficient found that consummation of the proposed acquisition efforts to ascertain and meet the credit needs of lowwould be consistent with, and serve, the convenience and moderate-income and minority persons. Protesand needs of the community, and, therefore, recom- tant also alleges that the low level of lending in mended Board approval of this application. predominantly minority areas by one of Applicant's The Office of the Comptroller of the Currency subsidiary banks, Dominion Bank of Northern Virgin- ("OCC") has previously determined that the CRA ia, N.A., Vienna, Virginia, raises questions about record of Bank is satisfactory, and the District Council potentially racially discriminatory practices that Dohas determined that consummation of this proposal minion Bank of Northern Virginia may follow. would serve the convenience and needs of the commu- The OCC has previously determined that the CRA nity. The Board notes that a primary market focus of record of each of Applicant's subsidiary banks is Bank is making small business loans, and that Bank satisfactory. The Board notes that all of Applicant's has historically made a high percentage of its small subsidiary banks participate in a number of local business loans to businesses owned by minorities and government development and housing programs, women; for example, in 1985, Bank made 50 percent of many of which are specifically directed at the developthe number, and 40 percent of the dollar amount, of its ment of low- and moderate-income and minority comsmall business loans to businesses owned by minor- munities, and have purchased local housing and develities and women. The Board believes that the making opment bonds to support these programs. In addition, of small business loans to businesses owned by minor- Applicant's subsidiary banks provide information conities and women is an important means by which a cerning their available products through advertising in bank may meet the credit needs of the community, media that reach low- and moderate-income and miconsistent with the purposes of the CRA.10 The Board nority areas. also notes that the percentage of mortgage loans made The Board has examined the record concerning the by Bank in low- and moderate-income neighborhoods lending practices of Dominion Bank of Northern Viris reasonable in relation to the total dollar amount of ginia, and notes that the percentage of total mortgage Bank's mortgage loans. In addition, the Board notes and home improvement loans, measured both by numthat Applicant has committed to appoint one of its ber and dollar volume, made by Dominion Bank of senior officers to oversee the CRA performance of Northern Virginia in predominantly minority and low- Bank. Finally, the Board believes that the commit- and moderate-income census tracts reflects the numments made by Applicant to the District Council, ber of predominantly minority and low- and moderate enumerated above, represent additional assurance that income census tracts in the market area of Dominion Bank will continue to meet its responsibilities under Bank of Northern Virginia. The Board has not found, the CRA, and is likely to enhance Bank's ability to and Protestant has provided no specific information ascertain community credit needs and market its credit indicating, that Dominion Bank of Northern Virginia engages in discriminatory lending practices. Thus, based on all the facts of record, the Board believes that the records of Applicant's subsidiary 10. The Board has recognized the importance of, among other banks under the CRA are consistent with approval of kinds of loans, both mortgage and small business loans in meeting the requirements of the CRA, and believes that the appropriate mix of this application. these types of loans is a business decision to be made by banks. See, Accordingly, based upon all of the evidence, include.g., Commerce Bancshares, Inc., 64 FEDERAL RESERVE BULLETIN ing the commitments undertaken by Applicant to the 576 (1978). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • November 1986 Board and the District Council to insure that Applicant (12 U.S.C. § 1841 et seq.), has applied for the Board's continues to serve the convenience and needs of the approval under section 3(a)(5) of the Act (12 U.S.C. community, including low- and moderate-income seg- § 1842(a)(5)) to merge with NewCentury Bank Corpoments of that community, the Board concludes that ration, Bay City, Michigan ("NCBC"), and thereby convenience and needs considerations are consistent acquire NCBC's eight subsidiary banks. with approval of this application.11 Notice of the application, affording opportunity for Based on the foregoing and other facts of record, the interested persons to submit comments, has been Board has determined that the application should be, given in accordance with section 3(b) of the Act. The and hereby is, approved.12 This transaction shall not time for filing comments has expired, and the Board be consummated before the thirtieth calendar day has considered the application and all comments refollowing the effective date of this Order, or later than ceived in light of the factors set forth in section 3(c) of three months after the effective date of this Order, the Act (12 U.S.C. § 1842(c)). unless such period is extended for good cause by the Applicant is the fifth largest bank holding company Board or by the Federal Reserve Bank of Richmond, in Michigan, controlling 33 banking subsidiaries, with acting pursuant to delegated authority. deposits of $4.6 billion, representing 8.3 percent of the By order of the Board of Governors, effective total deposits in commercial banking organizations in September 30, 1986. the state.1 NCBC is the ninth largest bank holding company in the state, controlling eight banking subsid- Voting for this action: Vice Chairman Johnson and Gover- iaries, with deposits of $1.1 billion, representing 1.9 nors Rice, Seger, Angell, and Heller. Absent and not voting: percent of the total deposits in commercial banking Chairman Volcker and Governor Wallich. organizations in the state. Upon consummation of this transaction, including divestitures proposed by Appli- WILLIAM W. WILES cant, Applicant would become the fourth largest bank [SEAL] Secretary of the Board holding company in the state controlling deposits of $5.7 billion, representing 10.2 percent of total deposits in commercial banking organizations in the state. First of America Bank Corporation Consummation of the proposed transaction would not Kalamazoo, Michigan have a significant effect upon the concentration of banking resources in Michigan. Order Approving Merger of Bank Holding Applicant competes with NCBC in six banking Companies markets. In five of these banking markets, Ann Arbor, Bay City-Saginaw, Detroit, Standish-West Branch and First of America Bank Corporation, Kalamazoo, Tuscola, consummation of this proposal would not Michigan, a bank holding company within the meaning have a significant effect on competition. Four of these of the Bank Holding Company Act ("Act") markets are not highly concentrated and would not become highly concentrated after consummation of this proposal. While the Standish-West Branch banking market is considered concentrated, the increase in 11. The Board has considered Protestant's request for a formal concentration that would result from this proposal, as hearing. The BHC Act does not require the Board to hold a formal hearing in this case because the OCC has not expressed written measured by an increase of 49 points in the Herfindisapproval of the proposed transaction. 12 U.S.C. § 1842(b). See, dahl-Hirschman Index ("HHI") in the market, is not e.g., Northwest Bancorporation v. Board of Governors, 303 F.2d 832, 843-44 (8th Cir. 1962); Grandview Bank & Trust Co. v. Board of considered significant. Governors, 550 F.2d 415 (8th Cir. 1977); Farmers & Merchants Bank Applicant and NCBC also compete in the Huron of Las Cruces v. Board of Governors, 567 F.2d 1082, 1089 (D.C. Cir. County banking market.2 Applicant is the fourth larg- 1977). The Board also finds that Protestant and Applicant have had opportunities to submit materials in order to clarify factual questions est commercial banking organization in the Huron underlying Protestant's objections in this case, and that Protestant has County banking market, controlling $31.3 million in not identified any remaining material questions of fact that would deposits, representing 10.8 percent of the total deposrender a hearing appropriate. In light of this and the representations and commitments made by Applicant in response to Protestant's its in commercial banks in the market. NCBC is the comments, the Board has determined to deny Protestant's request for largest commercial banking organization in the mara formal hearing at this time. 12. The Board has also considered the petition of Protestant to consider this matter at an open meeting. The Government in the Sunshine Act, 5 U.S.C. § 552b, provides a specific exemption from its general requirement of open meetings where, as here, the discussion of a particular item is likely to result in the disclosure to the public of 1. Banking data are as of June 30, 1985. financial institution examination data and ratings or confidential 2. The Huron County banking market is approximated by Huron financial information of the applicant. 12 U.S.C. § 552(b)(c)(8). County, Michigan, excluding Sebewaing Township and including For this reason, the Board has denied Protestant's petition. Minden Township in Sanilac County, Michigan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 791 ket, controlling deposits of $94.2 million, representing after the violations were discovered through its inter- 32.1 percent of the total deposits in commercial bank- nal audit and has cooperated with law enforcement ing organizations in the market. Upon consummation agencies. Applicant has undertaken a comprehensive of this proposal, absent any divestiture, Applicant remedial program to correct these violations and to would control 43.5 percent of the total deposits in prevent violations from occurring in the future. Applicommercial banks in the market and the HHI would cant has advised the Board that it has filed corrective increase by 706 points to 2665. currency transaction reports and established a central In order to alleviate the anticompetitive effects that control unit which has day-to-day responsibility for would otherwise result from consummation of the monitoring all reportable transactions and ensuring proposal, Applicant proposes to divest First of Ameri- that reports are properly filed. Applicant has also ca Bank—Huron, Huron Beach, Michigan and the Bad instituted an intensive internal training program for Axe branch of First of America Bank—Bay Area, bank personnel regarding compliance with the Sebewaing, Michigan, which hold total deposits of $28 CFTRA. In addition, Applicant has eliminated its lists million. The divestiture would be made to a group of of exempt transactions and will report all transactions investors not currently represented in the market.3 by any individual or organization aggregating over Upon consummation of the transaction, including the $10,000 on any day. proposed divestiture, Applicant would become the The sufficiency of the compliance procedures adoptlargest commercial banking organization in the Huron ed to address Applicant's subsidiary banks' CFTRA County banking market, controlling $97.5 million in violations has been reviewed by examiners from the deposits, representing 33.8 percent of the deposits in Office of the Comptroller of the Currency. The Board the market. The HHI for the Huron County banking also has consulted with appropriate enforcement agenmarket would increase by 72 points to 2031.4 After cies, and has considered Applicant's past record of consideration of these factors, including the proposed compliance with the law. divestiture, the Board has concluded that consumma- The financial resources and future prospects of tion of this proposal would not have any significant Applicant and its subsidiary banks are satisfactory. adverse effects on existing competition in any of the NCBC's financial resources are expected to be banking markets in which Applicant and NCBC com- strengthened as a result of this proposal and its future pete. prospects are favorable. Based upon a review of all of The Board has also examined the effect of the the facts of record, the Board concludes that the proposal on probable future competition in the rele- financial and managerial resources of Applicant and vant geographic markets and has examined the pro- NCBC are consistent with approval of this transacposal in light of the Board's probable future competi- tion. Applicant proposes to offer expanded services to tion guidelines. In this regard, there are numerous the communities served by NCBC, including payroll other potential entrants into each of the markets processing, cash management, and expanded EFT and served by Applicant and NCBC. After consideration ATM services. Considerations related to the conveof these factors in light of the specific facts of this nience and needs of the communities to be served also case, the Board has concluded that consummation of are consistent with approval of the transaction. this proposal would not have any significant adverse Based on the foregoing and other facts of record, the effects on probable future competition in any relevant Board has determined that the application should be, market. and hereby is, approved. The transaction shall not be In its evaluation of Applicant's managerial re- consummated before the thirtieth calendar day followsources, the Board has considered certain violations ing the effective date of this Order or later than three by Applicant of the Currency and Foreign Transac- months after the effective date of this Order, unless tions Reporting Act ("CFTRA") and the regulations such period is extended for good cause by the Board or thereunder.5 With regard to the CFTRA violations, the by the Federal Reserve Bank of Chicago, acting pursu- Board notes that Applicant brought these matters to ant to delegated authority. the attention of the appropriate supervisory authorities By order of the Board of Governors, effective September 10, 1986. 3. The divestiture would be completed before or contemporaneous- Voting for this action: Chairman Volcker and Governors ly with Applicant's consummation of the proposed merger with Johnson, Wallich, Rice, Seger, and Angell. Absent and not NCBC. voting: Governor Heller. 4. The Department of Justice has informed the Board of its view that consummation of the transaction would not have a significantly adverse effect on competition if the divestiture proposed by Applicant WILLIAM W. WILES is effected. 5. 31 U.S.C. § 5311 et seq.; 31 C.F.R. § 103. [SEAL] Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

792 Federal Reserve Bulletin • November 1986 Michigan National Corporation only a single office and that it be operated in a manner Bloomfield Hills, Michigan and at a location that is "not likely to attract customers from the general public in the state to the substan- Order Approving Acquisition of a Bank tial detriment of existing banks in the state."3 On June 16, 1986, the South Dakota Banking Com- Michigan National Corporation, Bloomfield Hills, mission approved Applicant's formation and acquisi- Michigan, a bank holding company within the meaning tion of Bank, concluding that Applicant's proposal met of the Bank Holding Company Act ("Act"), the requirements for approval under the South Dakota 12 U.S.C. § 1841 et seq., has applied for the Board's statute.4 Based on this decision and its own review, approval under section 3(a)(3) of the Act (12 U.S.C. the Board has determined, as required by section 3(d) § 1842(a)(3)) to acquire all of the voting shares of of the Act, that the proposed acquisition conforms to Independence One Bank, National Association, Rapid South Dakota law and is specifically authorized by the City, South Dakota ("Bank"), a proposed new bank. statute laws of South Dakota. Notice of the application, affording interested per- Bank will engage primarily in offering consumer sons an opportunity to submit comments, has been credit card services to cardholders in Michigan. Since given in accordance with section 3(b) of the Act. The the establishment of Bank represents an internal reortime for filing comments has expired, and the Board ganization of Applicant's credit card operations, the has considered the application and all comments re- proposal will not alter the structure of the market for ceived, including comments in opposition to the appli- bank credit card services. cation from the Independent Community Bankers As- Applicant does not operate a banking subsidiary in sociation of South Dakota, Inc., in light of the factors the Rapid City, South Dakota, market.5 For this set forth in section 3(c) of the Act (12 U.S.C. reason and because of the limits imposed by South § 1842(c)). Dakota law on Bank's operations, consummation of Applicant operates 20 banking subsidiaries in Michi- this proposal is not likely to lessen substantially existgan and is the third largest commercial banking organi- ing competition in any relevant market. zation in the state, with total domestic deposits of The financial and managerial considerations of this approximately $6.1 billion.1 Applicant also controls a application are consistent with approval. Factors relatbanking subsidiary located in the Netherlands Antil- ing to the convenience and needs of the community to les, as well as several subsidiaries which engage in a be served also are consistent with approval. variety of nonbanking activities. The Board has received comments in opposition to Bank is a newly established national bank formed to this proposal from the Independent Community Bankengage primarily in offering bank credit card services ers Association of South Dakota, Inc. ("Protestant"). to customers in Michigan. Upon consummation of the The Protestant argues that the Douglas Amendment to proposed transaction, Applicant would transfer the the Act does not authorize the states to permit out-ofcredit card portfolios of Applicant's subsidiary banks state bank holding companies to acquire national to Bank.2 banks. The Protestant also argues that the Board Section 3(d) of the Act (12 U.S.C. § 1842(d)) (the should deny this application because the South Dakota "Douglas Amendment") prohibits the Board from statute imposes burdens on national banks in a manner approving any application by a bank holding company that conflicts with federal banking laws. to acquire any bank located outside the state in which The Board carefully considered these same arguthe operations of its banking subsidiaries are principal- ments when presented by Protestant in First City ly conducted unless the acquisition is "specifically Bancorporation of Texas, Inc., 71 FEDERAL RESERVE authorized by the statute laws of the state in which BULLETIN 716 (1985). The Board determined the such bank is located, by language to that effect and not Douglas Amendment applies to the interstate acquisimerely by implication." South Dakota law permits an tion of any bank, national or state-chartered, specifiout-of-state bank holding company to acquire a single cally concluding that when a state lifts the prohibition de novo national bank and a single de novo state bank subject to the conditions that each such bank have 3. S.D. Codified Laws Ann. §§ 51-16-40, 51-16-41 (Supp. 1986). 4. S.D. Codified Laws Ann. § 51-16-42 (Supp. 1986). 5. The Rapid City market includes Butte County, Lawrence Coun- 1. Deposit data are as of June 30, 1985. ty, Pennington County, Custer County, Fall River County, Shannon 2. Applicant has stated that it would transfer approximately $720 County, Haakon County, Jackson County, Bennett County, and the million of credit card receivables to Bank. southern half of Meade County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 793 on interstate bank acquisitions with respect to state above. The transaction shall not be consummated banks, the Douglas Amendment either lifts directly or before the thirtieth calendar day following the effective authorizes the state to lift the prohibition, to the same date of this Order, or later than three months after the degree, with respect to national banks. effective date of this Order, and Bank shall be opened The Board also found no merit in Protestant's for business not later than six months after the effecargument that the South Dakota statute conflicts with tive date of this Order. The latter two periods may be federal banking law. The Board concluded that it is extended for good cause by the Board or by the Congress, through the Douglas Amendment, that im- Federal Reserve Bank of Chicago acting pursuant to poses the restrictions on the operation of a national delegated authority. bank by an out-of-state bank holding company, or, at a By order of the Board of Governors, effective minimum, that it is Congress that authorizes the states September 15, 1986. to impose such restrictions. The Board determined that the South Dakota restrictions are within the scope Voting for this action: Vice Chairman Johnson and Goverof those authorized by Congress, and, therefore, they nors Wallich, Rice, Seger, Angell, and Heller. Absent and not voting: Chairman Volcker. cannot be said to impose unauthorized burdens that conflict with the national banking laws. Since the Board's First City Order, the Comptroller JAMES MCAFEE of the Currency has provided additional support for [SEAL] Associate Secretary of the Board the conclusion that the South Dakota restrictions are not so burdensome as to conflict with federal banking laws. In a July 31, 1986, letter to the General Counsel Concurring Statement of Governor Seger of the Board, the acting Chief Counsel of the Comptroller of the Currency reiterated the Comptroller's I fully support the Board's approval of this case. position that there is no express conflict between the However, as I previously indicated regarding a recent South Dakota statute and the National Bank Act. The similar proposal,11 do not share the Board's concerns letter noted that "to date, the South Dakota law has over statutes that allow out-of-state bank holding not required that national banks restrict their activities companies to enter another state in order to avoid in a manner which is unsafe or unsound or otherwise in usury and other restrictions on consumer lending rates conflict with the purposes of the National Bank Act." in their home states. From a public policy point of Based upon the facts in the record and for reasons view, I believe those statutes are procompetitive and stated more fully in its First City Order, the Board allow a bank holding company to engage in legitimate finds that the Protestant does not present adequate lending activity free of local restrictions that, as the reasons to deny this application. Board recently testified before Congress, can operate While it has decided to approve this application, the to hinder the provision of credit to consumers. Board wishes to reiterate the concerns it has ex- I continue to share the Board's concerns over state pressed in previous orders6 about the proliferation of laws, such as the so-called "South Dakota insurance statutes that, like South Dakota's, permit the entry of loophole," that aim to provide out-of-state bank holdout-of-state bank holding companies in order to shift ing companies a base from which to conduct an jobs and revenue from other states, while limiting the otherwise impermissible activity but subject to the in-state activities of banks owned by out-of-state hold- condition that the out-of-state bank holding company ing companies so as to avoid competition with in-state may not conduct any such activity in competition with banking organizations. These statutes do not appear to local providers in the base state. However, I believe be based on appropriate public policy considerations statutes that allow bank holding companies to engage for assuring a stable and sound banking system locally in permissible credit card lending anywhere in the and nationwide, and the end result of their adoption by United States free of local usury and similar limitaother states can only be a serious impairment of tions are different and represent a positive movement banking standards and no net gains in jobs or revenues toward deregulation of interest rates. because of the proliferation. Based on the foregoing and other facts of record, the September 15, 1986 application is approved for the reasons summarized 6. See, Citicorp, 71 FEDERAL RESERVE BULLETIN 101 (1985); 1. Texas Commerce Bancshares, Inc., 72 FEDERAL RESERVE BUL- MCorp, 71 FEDERAL RESERVE BULLETIN 642 (1985). LETIN 803 (1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • November 1986 Orders Issued Under Section 4 of the Bank venture, McCorquodale would supply ATEK with the Holding Company Act equipment and materials necessary for production of the documents as well as general facilities manage- AmeriTrust Corporation ment services. Cleveland, Ohio In order to approve an application under section 4(c)(8) of the Act, the Board must determine that the Order Approving an Application to Engage in proposed activity is "so closely related to banking or Printing Checks and Related Documents managing or controlling banks as to be a proper incident thereto. . . ." 12 U.S.C. § 1843(c)(8). The AmeriTrust Corporation, Cleveland, Ohio, a bank Act does not specify any criteria on which the Board holding company within the meaning of the Bank must base its finding that an activity is closely related Holding Company Act ("Act"), 12 U.S.C. § 1841 to banking. Generally, the Board has relied on guideet seq., has applied for the Board's approval under lines that the United States Court of Appeals for the section 4(c)(8) of the Act, 12 U.S.C. § 1843(c)(8), and District of Columbia enunciated in National Courier section 225.23 of the Board's Regulation Y, 12 C.F.R. Association v. Board of Governors to determine if an § 225.23, to acquire 51 percent of the ATEK Check activity is closely related to banking.4 Under these Printing Company, Brooklyn, Ohio ("ATEK"), a guidelines, an activity may be found to be closely company that prints and sells checks and related related to banking if it is demonstrated that banks documents, including corporate image checks, cash generally have in fact provided the proposed service; tickets, voucher checks, deposit slips, savings with- that banks generally provide services that are operadrawal packages, and other forms that require MICR- tionally or functionally so similar to the proposed encoded1 information. These documents would be services as to equip them particularly well to provide printed for and sold exclusively to depository institu- the proposed service; or that banks generally provide tions. Applicant proposes to engage in this activity services that are so integrally related to the proposed through a joint venture with McCorquodale Holdings, service as to require their provision in a specialized Inc., Baltimore, Maryland ("McCorquodale"), a sub- form. The courts have made it clear, however, that sidiary of McCorquodale PLC, London, England, a these criteria are not exclusive and that the Act grants company that engages in check printing and other the Board discretion to consider any criteria which printing activities. provide a reasonable basis for a finding that a particu- Notice of the application, affording interested per- lar nonbanking activity has a close relationship to sons an opportunity to submit comments on the pro- banking.5 The Board has stated that it will consider posal, has been duly published, 51 Federal Register "any . . . factor that an applicant may advance to 12,565 (1986). The time for filing comments has ex- demonstrate a reasonable or close connection or relapired and the Board has considered the application and tionship of the activity to banking."6 In considering all comments received in light of the public interest whether a proposed activity is permissible for bank factors set forth in section 4(c)(8) of the Act.2 holding companies, the Board must adhere to the Applicant, a bank holding company which controls fundamental purpose of the Act that banking be sepa- AmeriTrust Bank, N.A., Cleveland, Ohio, has total rated from commercial activities.7 consolidated assets of $7.8 billion.3 Applicant is also The printing of checks and similar documents (finanengaged in various nonbanking activities, including cial stationery) is a specialized field of printing that operating a trust company, and consumer and com- requires extensive technology and managerial expermercial lending activities. tise in order to obtain documents that meet the rigid In addition to its financial investment, Applicant specifications of the high speed electronic equipment would advise ATEK regarding product design and that sorts and reads the documents. As discussed would provide marketing, consultation, and sales sup- above, Applicant would acquire from McCorquodale port for the joint venture. Applicant's banking subsidiaries and affiliates would also provide a client base for ATEK's products. As its contribution to the joint 4. See, National Courier Association v. Board of Governors, 516 F.2d 1229 (D.C. Cir. 1975); Association of Data Processing Service Organizations, Inc. v. Board of Governors, 745 F.2d 677 (D.C. Cir. 1984). The Supreme Court endorsed the National Courier criteria in Securities Industry Ass'n v. Board of Governors, 468 U.S. 207, 210 n. 5 (1984). 1. MICR is an acronym for the term "magnetic ink character 5. Securities Industry Ass'n, supra; Board of Governors v. Investrecognition." ment Company Institute, 450 U.S. 46, 56-58 nn. 20-23 (1981); 2. The Board received comments from five banks and three printing Association of Data Processing Organizations, supra. companies. All of the comments were in favor of the proposal. 6. 49 Federal Register 806 (1984). 3. Data are as of December 31, 1985. 7. S. Rep. No. 1084, 91st Cong. 2d Sess. 2 (1970). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 795 printing presses and the other materials necessary to Accordingly, based on the foregoing precedent and engage in this activity. The distinguishing characteris- in view of the facts that are unique to this case— tic of financial stationery is the encoding of financial checks and other documents (e.g. deposit slips) are information in MICR format on the individual docu- used in the payment process, are provided in a specialments. This information is contained in the string of ized form, and are an integral part of a fundamental numbers found near the bottom edge of bank checks, banking service—the Board has concluded that printdeposit slips and similar documents used by banks and ing checks and similar MICR-encoded documents for their customers. depository institutions is closely related to banking. Financial stationery can be printed using the letter- Before approving a bank holding company's applipress or offset method. Under Applicant's proposal, cation to engage in an activity that the Board deterthe customer's identifying information would be en- mines is closely related to banking, the Board must tered into computers that would transfer the informa- find that consummation of the proposal can reasonably tion to a typesetting machine. This machine creates a be expected to produce benefits to the public, such as copy of the check or other document that is used to greater convenience, increased competition, or gains create a printing plate for the printing press. Using in efficiency, that outweigh possible adverse effects, machine readable ink and security paper, the printing such as undue concentration of resources, decreased press would then run off the checks or other docu- or unfair competition, conflicts of interests, or unments, which are then inspected, cut, boxed and sound banking practices. In addition, because this mailed to the customers. application involves a joint venture between a banking It is clear that as a general matter, manufacturing and nonbanking firm, the Board is concerned that joint activities are not closely related to banking. However, ventures not lead to a matrix of relationships between the proposed manufacturing activity is in many ways co-venturers that could break down the legally manunique because the issuance and processing of checks dated separation of banking and commerce.10 Further, are integral parts of the business of banking. The joint ventures must be carefully analyzed for any checks and other related documents that would be possible adverse effects on competition and on the printed by Applicant are primary media for payments financial condition of the banking organization inin the United States. Checks are offered and serviced volved in the proposal. almost exclusively by banks and other depository The Board notes that McCorquodale currently eninstitutions and over 98 percent of all noncash transac- gages in check printing through six offices in the tions are conducted with checks.8 Moreover, the United States, and controls less than 3 percent of the checks and other related documents that Applicant market. Applicant does not currently engage in any proposes to print are required to be produced in a printing activities. Accordingly, consummation of the special form because the documents must be encoded proposed transaction would not eliminate any existing with special magnetic characters that permit the rapid competition between Applicant and McCorquodale. and accurate reading and sorting of the documents. With regard to potential competition, the Board does That a banking-related service is integral to the not consider Applicant to be a likely entrant into the provision of banking services and is provided in a check printing business absent this proposal because specialized form were important elements in the Applicant does not have the expertise to engage in the court's finding in National Courier that courier ser- activity. Accordingly, the Board concludes that convices are closely related to banking. In that case, the summation of the proposed joint venture would have court concluded that courier services for checks and little effect on potential competition in the relevant other payment instruments played such a vital role in markets. check processing that banks required the provision of In addition, the record indicates that the check courier services in specialized form and therefore printing industry is highly concentrated, with the two determined that courier activity for these instruments largest firms controlling 70 percent of the market, and was closely related to banking. The same reasoning the three largest check printers controlling 80 percent equally applies to check printing: checks constitute an of the market. Consummation of the proposal can be integral part of the payments mechanism operated by expected to result in public benefits inasmuch as the the banking system and are provided in a specialized affiliation of Applicant with McCorquodale would creformat.9 8. Bank for International Settlements and Bank Administration 10. See, e.g., Amsterdam-Rotterdam Bank, N.V., 70 FEDERAL Institute, Payments Systems in Eleven Developed Countries 82-89 RESERVE BULLETIN 835 (1984); The Maybaco Company and Equita- (1985). ble Bancorporation, 69 FEDERAL RESERVE BULLETIN 375 (1983); and 9. National Courier, 516 F.2d at 1238. Deutsche Bank AG, 67 FEDERAL RESERVE BULLETIN 449 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • November 1986 ate a stronger competitor and thereby enhance compe- Orders Issued JJnder Sections 3 and 4 of the tition in a market that is dominated by two companies. Bank Holding Company Act Furthermore, the Board is satisfied that approval of this application would not present the opportunity or CoreStates Financial Corporation potential for conflicts of interest or other anticompeti- Philadelphia, Pennsylvania tive practices. In reaching this conclusion, the Board notes that the proposed activity is limited in scope and Order Approving Acquisition of a Bank Holding that there are no other joint ventures between Appli- Company and Nonbanking Companies cant and McCorquodale. Additionally, the activity to be performed through this joint venture represents a CoreStates Financial Corporation, Philadelphia, Pennrelatively minor portion of the business of each joint sylvania, a bank holding company within the meaning venturer. Consequently, there is no reason to believe of the Bank Holding Company Act ("Act") that Applicant or its subsidiaries would favor McCor- (12 U.S.C. § 1841 et seq.), has applied for the Board's quodale or its customers in the provision of credit or approval under section 3(a)(3) of the Act (12 U.S.C. other services. § 1842(a)(3)) to acquire New Jersey National Corpora- The financial and managerial resources of Applicant tion ("Company") and thereby indirectly to acquire and Company are considered satisfactory, and there is New Jersey National Bank ("Bank"), both in Ewing no evidence in the record to indicate that consumma- Township, New Jersey. tion of the proposal would result in undue concentra- Applicant has also applied for the Board's approval tion of resources, unsound banking practices, or other under section 4(c)(8) of the Act (12 U.S.C. adverse effects on the public interest. § 1843(c)(8)) and section 225.23 of the Board's Regula- Based on the foregoing and other facts of record, the tion Y (12 C.F.R. § 225.23) to acquire two direct Board concludes that the balance of the public interest nonbank subsidiaries, Underwood Mortgage and Title factors it must consider under section 4(c)(8) of the Company and New Jersey National Leasing Compa- Act favors approval of the application. Accordingly, ny, both of which are located in Ewing Township, the Board has determined that the application should New Jersey. These companies, while currently inacbe and hereby is approved. This determination is tive, have authority to engage in leasing personal or subject to all the conditions set forth in Regulation Y, real property as well as mortgage servicing. These including those in sections 225.4(d) and 225.23(b) activities have been determined by the Board to be (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), and to the permissible for bank holding companies under sections Board's authority to require such modification or 225.25(b)(1) and (b)(5) of the Board's Regulation Y termination of the activities of a bank holding compa- (12 C.F.R. §§ 225.25(b)(1) and (5)). In addition, Appliny or any of its subsidiaries as the Board finds cant has provided notice under section 4(c)(14) of the necessary to assure compliance with the provisions Act (12 U.S.C. § 1843(c)(14)) of its intention to acand purposes of the Act and the Board's regulations quire Company's one-third interest in a joint venture, and orders issued thereunder, or to prevent evasion Bancorps International Trading Company, Somerset, thereof. New Jersey, an export trading company. The transaction shall be consummated not later than Notice of the applications, affording opportunity for three months after the effective date of this Order, interested persons to submit comments and views, has unless such period is extended for good cause by the been given in accordance with sections 3 and 4 of the Board or by the Federal Reserve Bank of Cleveland, Act (51 Federal Register 28,624 (1986)). The time for acting pursuant to delegated authority. filing comments and views has expired and the Board By order of the Board of Governors, effective has considered the applications and all comments September 8,11 1986. received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)) and the consider- Voting for this action: Governors Wallich, Rice, Seger, ations specified in section 4(c)(8) of the Act. Angell and Johnson. Absent and not voting: Chairman Applicant, the third largest commercial banking Volcker. organization in Pennsylvania, controls three subsidiary banks in Pennsylvania with $7.84 billion in total WILLIAM W. WILES deposits, representing 7.6 percent of total deposits in [SEAL] Secretary of the Board commercial banks in Pennsylvania.1 Applicant also 11. Board action was taken before Governor Heller was a member of the Board. 1. State deposit data are as of December 31, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 797 controls nine nonbanking subsidiaries. Company, the the proposed acquisition is specifically authorized by sixth largest commercial banking organization in New the statute laws of New Jersey and is thus permissible Jersey, controls one subsidiary bank, with $1.78 bil- under the Douglas Amendment. lion in total deposits, representing 3.5 percent of total Subsidiary banks of Applicant and Company comdeposits in commercial banks in New Jersey. Consum- pete in the Philadelphia banking market7 and the mation of the proposal would have no significant effect Wilmington banking market.8 Applicant is the second on the concentration of banking resources in New largest9 of 49 commercial banking organizations in the Jersey or Pennsylvania. Philadelphia banking market and controls total depos- Section 3(d) of the Act, 12 U.S.C. § 1842(d), the its of $4.27 billion, representing 14.4 percent of the Douglas Amendment, prohibits the Board from ap- deposits in commercial banking organizations thereproving an application by a bank holding company to in.10 Bank is the 25th largest commercial banking acquire a bank located outside the holding company's organization in the market, with total deposits of home state, unless such acquisition is "specifically $117.3 million, representing 0.4 percent of the deposits authorized by the statute laws of the state in which in commercial banks in the market. Upon consummasuch bank is located, by language to that effect and not tion of the proposal, Applicant's share of the deposits merely by implication."2 in commercial banks in the market would be 14.8 On March 28, 1986, New Jersey enacted legislation percent. The Philadelphia banking market is not highly permitting out-of-state companies located in the Cen- concentrated and would not become highly concentral Atlantic region3 to acquire control of a bank or trated upon consummation of this transaction. The banks located in New Jersey. The New Jersey statute share of deposits held by the four largest commercial by its terms did not become operative until three banking organizations in the market is 48.2 percent Central Atlantic states, each with at least $20 billion in and the market's Herfindahl-Hirschman Index commercial bank deposits, authorized acquisition of ("HHI") is 946 and would increase by only 11 points banks in these states by New Jersey bank holding upon consummation of the proposal.11 companies. On August 8, 1986, the New Jersey Bank- Applicant controls one subsidiary bank that opering Commissioner determined that, as of August 24, ates in the Wilmington banking market with deposits 1986, the interstate banking statutes4 of Pennsylvania, of $2.3 million, representing less than 0.1 percent of Ohio and Kentucky — all located in the Central the deposits in commercial banking organizations in Atlantic region, and each with over $20 billion in the market. Bank operates three branches in the commercial bank deposits — are reciprocal with New market with total deposits of $4.1 million, representing Jersey.5 Accordingly, New Jersey law now permits a less than 0.1 percent of the deposits in commercial Pennsylvania bank holding company to acquire a bank banking organizations in the market. Upon consumholding company or bank in New Jersey. Applicant mation of this proposal, the market's four-firm conmeets all of the requirements of the New Jersey statute centration ratio would not change and the HHI would authorizing an eligible bank holding company to ac- increase by less than one point. quire a New Jersey bank or bank holding company.6 On the basis of these and other facts of record, the Based on the foregoing, the Board has determined that Board concludes that consummation of the proposal is not likely substantially to lessen competition in the Philadelphia or Wilmington banking markets. 2. A bank holding company's home state for purposes of the Douglas Amendment is that state in which the total deposits of its banking subsidiaries were largest on July 1, 1966, or on the date it became a bank holding company, whichever date is later. 12 U.S.C. § 1842. Applicant's home state is Pennsylvania. 7. The Philadelphia market consists of Bucks, Chester, Delaware, 3. The Central Atlantic region consists of New Jersey, Delaware, Montgomery, and Philadelphia counties in Pennsylvania plus Burling- Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, Ohio, ton, Camden and Gloucester counties in New Jersey. Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and the 8. The Wilmington market consists of New Castle County, Dela- District of Columbia. The District of Columbia is defined as a state for ware, Salem County, New Jersey, and Cecil County, Maryland. purposes of the New Jersey legislation. 9. As a result of the merger between IVB Financial Corporation, 4. 1986 Pa. Laws No. 69 (effective August 24, 1986); Ohio Revised Philadelphia, Pennsylvania and FidelCor, Inc., Philadelphia, Pennsyl- Code § 1101.05 (effective October 17, 1985); Ky. Rev. Stat. § 287.900 vania on February 25, 1986, CoreStates became the second largest (effective July 13, 1986). banking organization in the Philadelphia banking market. This ranking 5. Section 2(c)(IV) of the Pennsylvania statute explicitly states that is not reflected in the June 30, 1985 market data. the New Jersey interstate banking legislation is reciprocal with the 10. Market data are as of June 30, 1985. interstate banking legislation enacted in Pennsylvania. 11. This acquisition would not be subject to challenge by the 6. In an August 29, 1986 letter to the Federal Reserve System, the Department of Justice under its merger guidelines. Under the revised New Jersey Commissioner of Banking "determined that the condi- Department of Justice Merger Guidelines (49 Federal Register 26,823 tions set out in N.J.S.A. 17:9A-1 et seq. have been complied with and (1984)), a market in which the post-merger HHI is below 1000 is that CoreStates Financial Corporation is an eligible bank holding considered to be unconcentrated and the Department will not chalcompany which is located in an eligible state which has reciprocal lenge mergers in these markets except in extraordinary circumlegislation in effect with New Jersey." stances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • November 1986 The Board also has considered the effects of this Company's nonbanking subsidiaries is subject to all of proposal on probable future competition in the mar- the conditions set forth in Regulation Y, including kets in which Applicant and Company, but not both, sections 225.4(d) and 225.23(b) (12 C.F.R. §§ 225.4(d) compete. In light of the number of probable future and 225.23(b)), and to the Board's authority to require entrants into each of these markets and other facts of such modifications or termination of activities of a record, the Board concludes that consummation of holding company or any of its subsidiaries as the this proposal would not have any significant adverse Board finds necessary to assure compliance with the effect on probable future competition in any relevant provisions and purposes of the Act and the Board's market. regulations and orders issued thereunder, or to pre- The financial and managerial resources of Applicant vent evasion thereof. and its subsidiaries, and Company and its subsidiaries, By order of the Board of Governors, effective are consistent with approval of the application. Con- September 29, 1986. siderations relating to the convenience and needs of the community to be served are also consistent with Voting for this action: Vice Chairman Johnson and Goverapproval. nors Rice, Seger, Angell, and Heller. Absent and not voting: Chairman Volcker and Governor Wallich. Applicant has also applied under section 4(c)(8) of the Act to acquire Company's two nonbank subsidiaries, Underwood Mortgage & Title Company ("Under- JAMES MCAFEE wood") and New Jersey National Leasing Company [SEAL] Associate Secretary of the Board ("NJNLC"), both of which are located in Ewing Township, New Jersey. These inactive nonbank subsidiaries are expected to be activated upon consummation of the transaction. First Union Corporation In view of the facts of record, the Board concludes Charlotte, North Carolina that Applicant's acquisition of Company's nonbanking subsidiaries would not significantly affect competition Order Approving Acquisition of a Bank Holding in any relevant market. Furthermore, there is no Company and Certain Nonbanking Activities evidence in the record to indicate that approval of this proposal would result in undue concentration of re- First Union Corporation, Charlotte, North Carolina, a sources, unfair competition, conflicts of interests, bank holding company within the meaning of the Bank unsound banking practices, or other adverse effects on Holding Company Act ("Act") (12 U.S.C. § 1841 the public interest. Accordingly, the Board has deter- et seq.), has applied for the Board's approval under mined that the balance of the public interest factors it section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)), to must consider under section 4(c)(8) of the Act is acquire First Railroad and Banking Company of Georfavorable and consistent with approval of the applica- gia ("Company"), Augusta, Georgia, a bank holding tions. company, and thereby indirectly to acquire its 14 The Board has also considered the notice of Appli- subsidiary banks. Applicant has also applied under cant's intention to acquire Company's one-third inter- section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and est in a joint venture, Bancorps International Trading section 225.23(a) of the Board's Regulation Y Company, Somerset, New Jersey, under section (12 C.F.R. § 225.23(a)) to acquire Company's non- 4(c)(14) of the Act. Based on the facts of record, the bank subsidiary, Capital Finance Group, Inc., a com- Board has determined that disapproval of the pro- pany that engages in consumer lending, mortgage posed investment is not warranted. lending, leasing, and reinsuring credit-related life, ac- Based on the foregoing and other facts of record, the cident, and health insurance. These activities have Board determined that the applications under sections been determined by the Board to be closely related to 3 and 4 of the Act should be and hereby are, approved. banking and permissible for bank holding companies The banking acquisition shall not be consummated under section 225.25(b)(1), (5) and (8) of Regulation Y before the thirtieth calendar day following the effective (12 C.F.R. § 225.25(b)(1), (5) and (8)). date of this Order, and neither the banking acquisition Notice of the applications, affording an opportunity nor the nonbanking acquisition shall occur later than for interested persons to submit comments, has been three months after the effective date of this Order, given in accordance with sections 3 and 4 of the Act. unless the latter period is extended for good cause by 51 Federal Register 26,191 and 26,468 (1986). The time the Board or by the Federal Reserve Bank of Philadel- for filing comments has expired, and the Board has phia, acting pursuant to delegated authority. The de- considered the applications and all comments received termination with respect to Applicant's acquisition of in light of the factors set forth in section 3(c) of the Act Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 799 (12 U.S.C. § 1842(c)), and the considerations specified ing resources and would remain so after consummain section 4(c)(8) of the Act. tion of the proposal. The Board concludes that con- Applicant is the third largest commercial banking summation of the proposal would not have a organization in North Carolina. It controls total depos- significant adverse effect on the concentration of bankits in North Carolina of $6.2 billion,1 which represent ing resources in Georgia. 19.1 percent of the total deposits in commercial bank- Subsidiary banks of both Applicant and Company ing organizations in the state. Applicant also controls operate in the Atlanta and Augusta, Georgia banking banks in South Carolina, Georgia, and Florida with markets.5 Company is the sixth largest of 38 commertotal deposits in those states of approximately $4.5 cial banking organizations in the Atlanta banking marbillion.2 Company is the fourth largest commercial ket, controlling deposits of $529.0 million, representbanking organization in the state of Georgia. It con- ing 3.6 percent of the total deposits in commercial trols total deposits in Georgia of $2.2 billion, repre- banks in the market. Applicant is the ninth largest senting 6.3 percent of the total deposits in commercial commercial banking organization in the market, conbanks in Georgia. trolling deposits of $167.6 million, representing 1.1 Section 3(d) of the Act (12 U.S.C. § 1842(d)), the percent of the total deposits in commercial banks in Douglas Amendment, prohibits the Board from ap- the market. Upon consummation of the proposal, proving an application by a bank holding company to Applicant would control deposits of $696.6 million, acquire a bank located outside the bank holding com- representing 4.7 percent of the total deposits in company's home state,3 unless the state where the bank to mercial banks in the market. be acquired is located has specifically authorized the The Atlanta banking market is not highly concenacquisition by language to that effect and not merely trated and would not become highly concentrated by implication. The Board has previously determined upon consummation of the transaction. The share of that Georgia has by statute expressly authorized a deposits held by the four largest commercial banking North Carolina bank holding company, such as Appli- organizations in the market is 73.6 percent and the cant, to acquire a Georgia bank or bank holding market's Herfindahl-Hirschman Index (HHI) is 1590 company, such as Company.4 Accordingly, approval and would increase by only 8 points upon consummaof Applicant's proposal to acquire banks in Georgia is tion of the proposal. Thus, this acquisition would not not barred by the Douglas Amendment. be subject to challenge by the Department of Justice Applicant is the twelfth largest commercial banking under its merger guidelines.6 In view of the small organization in the state of Georgia. It controls total increase in market concentration and other facts of deposits in Georgia of $300 million, representing 0.5 record, the Board concludes that consummation of the percent of the total deposits in commercial banks in proposed transaction is not likely to have a significant Georgia. Upon consummation of the transaction, Ap- adverse effect on existing competition in the Atlanta plicant would control total deposits of $2.5 billion, banking market. representing 6.8 percent of the total deposits in com- Applicant is the smallest of the nine commercial mercial banks in Georgia, and would become the banks in the Augusta banking market, controlling fourth largest commercial banking organization in deposits of $4.9 million, representing 0.4 percent of the Georgia. Georgia is unconcentrated in terms of bank- total deposits in commercial banks in the market. Company is the largest commercial banking organization in the market, controlling deposits of $519 million, representing 41.9 percent of the total deposits in commercial banks in the market. Upon consummation 1. Unless otherwise indicated, all state banking data are as of December 31, 1985, and all market data are as of June 30, 1985. of the proposal, Applicant would control 42.3 percent 2. Applicant is the sixth largest banking organization in Florida with deposits of approximately $3.3 billion, representing 4.5 percent of the total deposits in commercial banks in Florida. Applicant is the fourth largest banking organization in South Carolina with deposits of approximately $900 million, representing 8.1 percent of the total 5. The Atlanta banking market is approximated by Clayton, Cobb, deposits in commercial banks in South Carolina. Consummation of the DeKalb, Douglas, Fulton, Gwinnett, Henry, and Rockdale Counties. proposal would have no effect on the concentration of banking The Augusta banking market is approximated by Columbia and resources in North Carolina, South Carolina or Florida. Richmond Counties in Georgia plus Aiken County in South Carolina. 3. A bank holding company's home state for purposes of the 6. Under the revised Department of Justice Merger Guidelines (49 Douglas Amendment is that state in which the total deposits of its Federal Register 26,823 (1984)), a market in which the post-merger banking subsidiaries were largest on July 1, 1966, or on the date it HHI is between 1000 and 1800 is considered moderately concentrated, became a bank holding company, whichever date is later. 12 U.S.C. and the Department is likely to challenge a merger that increases the § 1842(d). Applicant's home state is North Carolina. HHI by more than 100 points. The Department has informed the 4. First Wachovia Corporation, 72 FEDERAL RESERVE BULLETIN Board that a bank merger or acquisition generally will not be chal- 68 (1985); NCNB Corporation, 72 FEDERAL RESERVE BULLETIN 57 lenged (in the absence of other factors indicating anticompetitive (1985); see Ga. Stat. Ann. §§ 7-1-620 et seq; N.C. Gen. Stat. §§ 53- effect) unless the post-merger HHI is at least 1800 and the merger 209 et seq. (Supp. 1984). increases the HHI by at least 200 points. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Federal Reserve Bulletin • November 1986 of the total deposits in commercial banks in the the Federal Reserve Bank of Richmond, pursuant to market. delegated authority. With a four-firm concentration ratio of 90 percent By order of the Board of Governors, effective and an HHI of 2702, the Augusta banking market is September 22, 1986. considered concentrated. Upon consummation of this transaction, the four-firm concentration ratio in the Voting for this action: Chairman Volcker and Governors market would increase to 90.4 and the HHI would Johnson, Wallich, Rice, Seger, Angell, and Heller. Governor increase by only 33 points to 2735.7 In view of the Wallich abstained from the insurance portion of this action. small increase in market concentration and the number of competitors that would remain in the market upon JAMES MCAFEE [SEAL] Associate Secretary of the Board consummation of the proposal and other facts of record, the Board concludes that consummation of the proposal is not likely to have a significant adverse effect on existing competition in any relevant banking Security Pacific Corporation market. Los Angeles, California With respect to the effect of this transaction on probable future competition in those markets where Order Approving Acquisition of a Bank Holding either Applicant or Company, but not both, competes, Company and Certain Nonbanking Subsidiaries the Board concludes that numerous potential entrants into these markets exist and that, accordingly, con- Security Pacific Corporation, Los Angeles, California, summation of this proposal is not likely to have any a bank holding company within the meaning of the significant adverse effect on probable future competi- Bank Holding Company Act of 1956, as amended (the tion in any of these markets. "Act" or "BHC Act") (12 U.S.C. § 1841 et seq.), has The financial and managerial resources and future applied for the prior approval of the Board under prospects of Applicant, Company, and their subsidiar- section 3 of the Act (12 U.S.C. § 1842) to acquire ies are considered satisfactory and consistent with Arizona Bancwest Corporation ("Company"), Phoeapproval of the transaction. Considerations relating to nix, Arizona, and thereby to acquire indirectly The the convenience and needs of the communities to be Arizona Bank ("Bank"), Phoenix, Arizona.1 Appliserved are also consistent with approval of the propos- cant has also applied for the prior approval of the al. Board under section 4(c)(8) of the Act (12 U.S.C. There is no evidence of record indicating that the § 1843(c)(8)) to acquire Bancwest Life Insurance Comacquisition of Company's nonbanking subsidiary pany, Phoenix, Arizona, and thereby engage in the would result in undue concentration of resources, reinsurance of life and disability insurance issued by decreased or unfair competition, conflicts of interests, others with respect to credit extended by subsidiaries of Company; Bancwest Insurance Agency, Inc., Phoeunsound banking practices, or other adverse effects. nix, Arizona, and thereby act as an agent for the sale Accordingly, the Board has concluded that the balance of credit life and disability insurance with respect to of the public interest factors it is required to consider credit extended by subsidiaries of Company; and under section 4(c)(8) is favorable and consistent with Bancwest Financial Services Company, Phoenix, Ariapproval. zona, and thereby engage in commercial finance and Based upon the foregoing and all the facts of record, leasing.2 These activities are authorized for bank holdthe Board has determined that these applications uning companies pursuant to the Board's Regulation Y, der sections 3 and 4 of the Act should be, and hereby 12 C.F.R. §§ 225.25(b)(l)(iv), (b)(5), (b)(8), and (b)(9). are, approved. The acquisition under section 3 shall not be consummated before the thirtieth calendar day following the effective date of this Order. The proposal shall not be consummated later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by 1. Applicant will acquire Company by a merger of Company into SPC Acquisition, Inc. ("SPC"), Los Angeles, California, a wholly owned, special-purpose subsidiary of Applicant. In connection with 7. Under the revised Department of Justice Merger Guidelines any this application, SPC has applied to become a bank holding company market in which the post-merger HHI is above 1800 is considered by acquiring Arizona Bancwest Corporation. SPC is of no significance highly concentrated. In such markets, the Department is likely to except as a means to facilitate Applicant's acquisition of Company. challenge any merger that produces an increase in the HHI of more 2. In connection with this application, SPC also has applied to than 50 points unless other factors indicate that the merger will not acquire Bancwest Life Insurance Company, Bancwest Insurance substantially lessen competition. Agency, Inc., and Bancwest Financial Services Company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 801 Notice of the applications, affording opportunity for such statute. The Board's order is specifically condiinterested persons to submit comments and views, has tioned upon satisfaction of the state regulatory approvbeen duly published (51 Federal Register 16,591, al requirement and the effectiveness of the state stat- 18,379 (1986)). The time for filing comments has ute on October 1, 1986. expired, and the Board has considered the applications Bank engages, through a subsidiary, in certain real and all comments received in light of the factors set estate investment and development activities authoforth in sections 3(c) and 4(c)(8) of the Act.3 rized for state banks pursuant to Arizona law. One of Applicant, with $24.2 billion in domestic deposits, is Applicant's subsidiary banks, Security Pacific State the second largest commercial banking organization in Bank, Irvine, California ("California Bank"), also California.4 Bank is the third largest commercial bank- engages in real estate investment and development ing organization in Arizona with domestic deposits of activities authorized for state banks pursuant to Caliapproximately $3.1 billion, representing 15.8 percent fornia law. The Board has not determined that real of the total deposits in commercial banks in Arizona. estate investment and development activity is closely Section 3(d) of the Act (12 U.S.C. § 1842(d)), the related to banking under section 4(c)(8) of the Act, and Douglas Amendment, prohibits the Board from ap- thus this activity is not permissible for bank holding proving any application by a bank holding company to companies under section 4 of the Act. acquire control of any bank located outside of the In its evaluation of this application, the Board has holding company's home state,5 unless such acquisi- considered whether the real estate investments of tion is "specifically authorized by the statute laws of Bank and California Bank, which are structured as the State in which [the] bank is located, by language to general partnerships between the bank and a developthat effect and not merely by implication." The Board er, comply with the nonbanking provisions of section 4 has previously determined that the statute laws of of the BHC Act and the Board's implementing regula- Arizona authorize an out-of-state financial institution tions. Section 4 of the BHC Act prohibits, with certain to acquire any Arizona financial institution that has exceptions not relevant here, a bank holding company applied to operate in Arizona before May 31, 1984, from acquiring or retaining direct or indirect ownersubject to approval by the State Banking Superinten- ship or control of voting shares of a company that is dent.6 not a bank. 12 U.S.C. § 1843(a).7 Under section The Arizona State Banking Superintendent has in- 2(g)(1) of the Act, voting shares held by any subsidiary formed the Board that the proposal does not present of a bank holding company are deemed to be indirectly any of the grounds for denial of the application under held by the parent bank holding company.8 Thus, as Ariz. Rev. Stat. § 6-326 and, accordingly, the Super- the Board has previously recognized, the acquisition intendent anticipates approving the proposal on Octo- of voting shares by a subsidiary bank of a bank holding ber 1, 1986, the first day the interstate banking statute company is treated as an acquisition by the parent is effective. Based on the foregoing, the Board has bank holding company and, on this basis, is subject to determined that the proposed acquisition is specifical- the nonbanking limitations of section 4 of the Act.9 ly authorized by the statute laws of Arizona and is thus Because the general partnership interests held by permissible under the Douglas Amendment, subject to Bank and California Bank represent more than 5 Applicant's obtaining the approval of the Superinten- percent of the outstanding voting shares of the partnerdent pursuant to section 6-322 of the Arizona Revised ships and because the partnerships are engaged in real Statutes, and the October 1, 1986, effective date of estate development activities that are not permissible under the BHC Act, these interests do not comply 3. The Board received a protest from Arizona ACORN (Association of Community Organizations for Reform Now) alleging that Bank has not met the credit and deposit needs of the low- and moderate- 7. These exceptions are primarily for investments in companies income community in Bank's service area, specifically home-mort- engaged in activities determined by the Board to be closely related to gage lending, home-improvement lending, small business lending, banking or for investments that represent less than 5 percent of the basic banking services, and marketing and outreach. ACORN with- voting shares of the company. 12 U.S.C. §§ 1843(c)(6) and (8). drew its protest following several meetings with Applicant and Appli- 8. 12 U.S.C. § 1841(g)(1). The BHC Act defines companies to cant's adoption of certain commitments designed to meet the credit include partnerships and the Board's regulations define voting shares and deposit needs of the low- and moderate-income communities in to include any partnership interest in which the partner may vote on Bank's service area. or direct the conduct of the operations or other significant policies of 4. Banking data are as of June 30, 1985. the partnership or vote for or select the partners or similar manage- 5. A bank holding company's home state is that state in which the ment officials of the partnership. 12 U.S.C. § 1841(b); 12 C.F.R. operations of the bank holding company's banking subsidiaries were § 225.2(1)(1). principally conducted on July 1, 1966, or the date on which the 9. The Board has so construed the Act since its enactment in 1956. company became a bank holding company, whichever is later. See e.g. 12 C.F.R. § 225.101 and 102. See also 12 C.F.R. 6. Ariz. Rev. Stat. § 6-321 et seq. (effective October 1, 1986). See § 225.22(d)(2) and Board Press Release, dated May 13, 1971, 36 Marshall & Ilsley Corporation, 72 FEDERAL RESERVE BULLETIN 720 Federal Register 9292 (May 22,1971); and Board Press Release, dated (1986). January 28, 1985, 50 Federal Register 4519 n.3 (January 31, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • November 1986 with the investment limitations of section 4(a) of the Bank in real estate development projects must comply BHC Act. The investments also are not permissible with the Act and applicable regulations. under section 225.22(d)(2) of Regulation Y (relating to Applicant does not operate a bank in any market in activities conducted by nonbank subsidiaries of hold- which Bank operates. Applicant does, however, opering company state banks), because the partnerships ate mortgage banking, consumer finance, and comare not wholly owned by Bank or California Bank as mercial finance subsidiaries that compete with Comparequired under that regulation.10 ny and its subsidiaries in Arizona. Applicant's market Accordingly, Applicant's retention of the real estate share is de minimis, and consummation of the proposal interests of Bank and California Bank is not permissi- would result in only a small increase in concentration ble under the Act, and Applicant is required to divest in the relevant markets. Accordingly, consummation these interests or otherwise conform them to the Act of the proposal is not likely to result in the elimination and the Board's regulations. The Board notes, howev- of any significant existing competition. In view of the er, that it has requested comment on whether it should numerous entrants into the relevant markets, the continue to prohibit or permit, subject to certain Board concludes that the proposal would not have any prudential limitations, real estate investment and de- significant adverse elfect on probable future competivelopment activities for bank holding companies and tion. what, if any, action would be appropriate where such In evaluating this application, the Board has considactivities are conducted by subsidiary banks.11 The ered the financial resources of Applicant and the elfect Board expects to consider these issues and the public on those resources of the proposed acquisition. In this comments thereon in the near future. regard, the Board has previously stated that it expects In view of this fact, the Board believes that it is banking organizations experiencing substantial growth appropriate in this case to grant Applicant a period of internally and by acquisition, such as Applicant, to time to divest its impermissible real estate investments maintain a strong capital position substantially above or conform them to the Act.12 Accordingly, approval the minimum levels specified in the Capital Adequacy of this application is conditioned upon Applicant's Guidelines without significant reliance on intangibles, divestiture, within two years of consummation of this particularly goodwill.14 The Board will carefully anaproposal, of those real estate investments held by lyze the elfect of expansion proposals on the preserva- Bank and California Bank that do not conform with the tion or achievement of such capital positions. BHC Act and Regulation Y, subject to any changes in The financial and managerial resources and future the Board's regulation as a result of the Board's prospects of Applicant and Company and their subsidreview of the real estate investment and development iaries are considered generally satisfactory. The acquipowers of bank holding companies and their subsidiar- sition, however, will result in a significant increase in ies. In this regard, Applicant has committed to con- Applicant's intangible assets and its pro forma primary duct its real estate activities within certain prudential capital ratio on a tangible basis will be reduced to the limitations and to comply with the results of the minimum level specified in the Board's Capital Ade- Board's proceedings regarding the real estate develop- quacy Guidelines (after excluding Applicant's investment activities of bank holding companies.13 In the ments in real estate development activities in accordinterim, any further investments by Bank or California ance with the above commitments). In the absence of mitigating factors, the Board 10. 12 C.F.R. § 225.22(d)(2). The Board adopted this regulation in would regard this reduction in Applicant's tangible 1971 in the absence of evidence that acquisitions by holding company primary capital as a significant adverse factor. In this banks were resulting in evasions of the purposes of the Act. Board connection, the Board has taken into account the fact Press Release dated May 13, 1971, 36 Federal Register 9292 (May 22, 1971). The Board, however, stated that it would review the continued that Applicant negotiated the proposed acquisition merits of the regulation from time to time in light of experience in over a year ago and has raised substantial amounts of administering the Act. Id. As noted below, the Board currently has capital, including primary capital, in anticipation of this regulation under review and has asked for comment, in connection with the exercise of real estate development powers by holding this proposal in order to comply with the Board's company banks, as to whether modifications in the regulation are capital policies. Applicant has also advised the Board appropriate. that, in accordance with the Board's policy that expan- 11. 50 Federal Register 4519 (1985). 12. Consistent with section 4(a)(2) of the Act (providing a two-year period for new bank holding companies to comply with the nonbanking prohibitions of the Act), the Board has, in certain cases, granted scope of the activity is not increased, adequate capital is maintained to applicants periods of up to two years to divest impermissible activities support the activity, and the applicant agreed to conform the activity or conform them to the requirements of the Act. Citicorp (Quotron) 72 to the results of the Board's proceedings regarding real estate develop- FEDERAL RESERVE BULLETIN 497, 500 (1986). The Chase Manhattan ment activities. Excel Bancorp, Inc., 72 FEDERAL RESERVE BULLETIN Corporation 71 FEDERAL RESERVE BULLETIN 960, 963 (1985). 731 (1986). 13. In a few cases involving a small dollar amount of real estate 14. Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); Capital development activity conducted under state law by state-chartered Adequacy Guidelines, 50 Federal Register 16,057, 16,066-67 savings banks being acquired by bank holding companies, the Board (April 24, 1985), 71 FEDERAL RESERVE BULLETIN 445 (1985); National has permitted the continuation of the activity, provided the level and City Corporation, 70 FEDERAL RESERVE BULLETIN 743, 746 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 803 sionary proposals should be based on the maintenance and purposes of the Act and the Board's regulations of a strong tangible primary capital position, Applicant and orders issued thereunder, or to prevent evasion intends promptly to restore its tangible primary capital thereof. ratio to pre-acquisition levels. Finally, Applicant has By order of the Board of Governors, effective committed to maintain Bank's primary capital in ac- September 12, 1986. cordance with the Board's Capital Adequacy Guidelines.15 Voting for this action: Chairman Volcker and Governors Based upon the above facts, particularly Applicant's Johnson, Wallich, Rice, Seger, Angell, and Heller. Governor Wallich abstained from the insurance portion of this action. plans to restore its primary capital and to continue to strengthen its capital position, the Board concludes that financial and managerial factors are consistent WILLIAM W. WILES with approval. Considerations relating to the conve- [SEAL] Secretary of the Board nience and needs of the communities to be served are also consistent with approval. There is no evidence in the record to indicate that Texas Commerce Bancshares, Inc. approval of this proposal would result in undue con- Houston, Texas centration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices, Order Approving Acquisition of a Bank and Certain or other adverse effects on the public interest. Accord- Nonbanking Activities ingly, the Board has determined that the balance of public interest factors it must consider under section Texas Commerce Bancshares, Inc., Houston, Texas, 4(c)(8) of the Act is favorable and consistent with a bank holding company within the meaning of the approval of the applications to acquire Bank's non- Bank Holding Company Act ("Act"), 12 U.S.C. banking subsidiaries and activities. § 1841 et seq., has applied for the Board's prior Based on the foregoing and other facts of record, approval under section 3(a)(3) of the Act (12 U.S.C. including certain commitments made by Applicant, the § 1842(a)(3)) to acquire 100 percent of Texas Com- Board has determined that the applications should be, merce Bank, Newark, Delaware ("Bank"), a de novo and hereby are, approved, subject to the express bank that will engage primarily in consumer credit condition that Applicant obtain the approval of the card lending. Applicant also has applied under section Arizona Superintendent of Banks pursuant to section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 6-322 of the Arizona Revised Statutes and that the 225.23(a) of the Board's Regulation Y (12 C.F.R. proposal not be consummated before the October 1, § 225.23(a)) to engage in certain nonbanking activities 1986, effective date of the Arizona statute and the that the Board has previously determined to be perother conditions in this Order relating to the real estate missible for bank holding companies under sections activities of Bank and California Bank. The acquisition 225.25(b)(1), (4), and (16) of Regulation Y (12 C.F.R. of Bank shall not be consummated before the thirtieth §§ 225.25(b)(1), (4), and (16)). calendar day following the effective date of this Order, Applicant proposes to acquire Texas Commerce or later than three months after the effective date of Mortgage Company, Houston, Texas ("TCMC"), and this Order, unless such period is extended for good thereby engage in the activity of originating, servicing cause by the Board or by the Federal Reserve Bank of and selling residential mortgages. TCMC will engage San Francisco, acting pursuant to delegated authority. in this activity through a joint venture with North The determinations as to Applicant's nonbanking ac- American Mortgage Company, Houston, Texas tivities are subject to all of the conditions contained in ("NAMC"), an existing provider of mortgage banking Regulation Y, including those in sections 225.4(d) and services. Applicant also proposes to engage in the 225.23(b)(3) (12 C.F.R. § § 225.4(d) and 225.23(b)(3)), origination, sale and servicing of commercial loans and to the Board's authority to require such modifica- through Texas Commerce Corporate Finance, Houstion or termination of the activities of a holding ton, Texas ("TCCF"), a wholly owned subsidiary of company or any of its subsidiaries as the Board finds Applicant's existing subsidiary, Texas Commerce necessary to assure compliance with the provisions Capital Markets, Inc., Houston, Texas ("TCCM"). These activities are permissible for bank holding companies under section 225.25(b)(1) of Regulation Y 15. In another case involving a substantial reduction in an appli- (12 C.F.R. § 225.25(b)(1)). cant's tangible primary capital, the Board considered the applicant's demonstrated ability and record of raising substantial amounts of In addition, Applicant proposes to underwrite and equity capital to support its growth and found the proposal consistent deal in government obligations and money market with financial considerations only on the basis that the applicant instruments to the extent permitted under section would use that ability to restore promptly its capital position. Citicorp, 72 FEDERAL RESERVE BULLETIN 497 (1986). 225.25(b)(16) of Regulation Y (12 C.F.R. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • November 1986 § 225.25(b)(16)) and to provide portfolio investment The proposed acquisition under Delaware law is advice to any person and financial advice to state and subject to approval by the State Bank Commissioner local governments as permitted under section who, in acting on the application, must determine 225.25(b)(4) of Regulation Y (12 C.F.R. whether public convenience and advantage would be § 225.25(b)(4)). Applicant will engage in these activi- promoted by the establishment of the consumer credit ties through Texas Commerce Securities, Inc., Hous- bank. In making such determination, the State Bank ton, Texas ("TCS"), also a subsidiary of TCCM. Commissioner must consider the experience of the Notice of the applications, affording an opportunity applicant in the credit card business and with respect for interested persons to submit comments, has been to the acceptance and administration of time deposits, given in accordance with sections 3 and 4 of the Act. and the quality of its management and its past financial 51 Federal Register 4990, 5803, and 8897 (1986). The performance. On October 29, 1985, the State Bank time for filing comments has expired, and the Board Commissioner of Delaware approved Applicant's forhas considered the applications and all comments mation and acquisition of Bank. Based on the foregoreceived in light of the factors set forth in section 3(c) ing, the Board has determined that the proposed of the Act and the considerations specified in section acquisition is specifically authorized by the statute 4(c)(8) of the Act. laws of Delaware and is thus permissible under the Applicant is the fourth largest commercial banking Douglas Amendment.6 organization in Texas.1 It presently operates 70 sub- In analyzing this proposal, the Board has considered sidiary banks in Texas, controlling $13.4 billion in the financial resources and future prospects of Applideposits, representing 8.6 percent of total statewide cant and the effect of this proposal on these resources. deposits. Applicant also engages through subsidiaries In its evaluation of the financial aspects of these in a variety of permissible nonbanking activities. transactions, the Board has given particular consider- The Douglas Amendment prohibits Board approval ation to the fact that this is an internal reorganization of an application by a bank holding company to designed to improve operational efficiencies and will acquire a bank located outside the holding company's provide Applicant with increased income opportunihome state,2 unless the state where the target bank is ties. This proposal is de minimis and will not have a located has specifically authorized the acquisition by material effect on Applicant. Although Bank has no statute "by language to that effect and not merely by financial or operating history, its financial and manaimplication."3 Applicant's home state is Texas. Bank gerial resources and future prospects are favorable. is a newly chartered Delaware state bank formed to In its evaluation of Applicant's managerial reengage primarily in consumer lending through its cred- sources, the Board has considered certain violations it card program. by Applicant of the Currency and Foreign Transac- The statutes of Delaware permit an out-of-state tions Reporting Act ("CFTRA") and the regulations bank holding company to acquire a de novo consumer thereunder.7 The Board notes that Applicant brought credit bank.4 In light of the limitations imposed by these matters to the attention of the appropriate super- Delaware law on Bank's operations, it is not likely that visory authorities after the violations were discovered Bank will be a significant competitor in the Delaware- through its internal audit and has cooperated with law New Jersey-Maryland PMSA banking market.5 The enforcement agencies. In addition, Applicant has es- Board notes that Bank will engage primarily in con- tablished comprehensive policies and procedures to sumer lending through its credit card operations and ensure compliance with the CFTRA. Examiners of the will provide additional consumer credit card services Office of the Comptroller of the Currency have reon a de novo basis. viewed the sufficiency of the compliance procedures adopted and their efficacy in correcting the deficiencies. The Board also has consulted with appropriate enforcement agencies, and has considered Applicant's 1. Banking data are as of December 31, 1985. 2. A bank holding company's home state for purposes of the past record of compliance with law. Douglas Amendment is that state in which the total deposits of its Based on the foregoing and all of the facts of record, banking subsidiaries were largest on July 1, 1966, or on the date it the Board concludes that the managerial resources of became a bank holding company, whichever date is later. 12 U.S.C. § 1842(d). Applicant and Bank are consistent with approval. 3. 12 U.S.C. § 1842(d). 4. Del. Code Ann. tit. 5, §§ 803, 1012. A consumer credit bank may engage in the business of accepting deposits of money and may make extensions of credit to consumers, but may not make commercial loans. 5. Del. Code Ann. tit. 5, § 1051. The Delaware-New Jersey- 6. The Board has previously determined that the Douglas Amend- Maryland Primary Metropolitan Statistical Area (PMSA) banking ment does not prohibit a bank holding company whose home state is market centers around Wilmington, Delaware, and includes the north- Texas from establishing de novo a consumer credit card bank in ern half of Newcastle County, Delaware, Salem County, New Jersey, Delaware. E.g., MCorp, 71 FEDERAL RESERVE BULLETIN 642 (1985). and the northeastern portion of Cecil County, Maryland. 7. 31 U.S.C. § 5311 et seq.; 31 C.F.R. § 103. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 805 Upon consummation of this proposal, Applicant competition, conflicts of interest, or unsound banking plans to offer Bank's customers new products and practices. services not currently available to them, such as credit In its analysis of the public benefits and possible card registration, credit life insurance, privileges for adverse effects of this proposal, the Board also has preferred cardholders, and other enhancements. The taken into consideration the fact that Applicant's Board concludes that considerations relating to the mortgage banking activities through TCMC involve convenience and needs of the communities to be the use of a joint venture with NAMC, an existing served are consistent with approval. provider of mortgage banking services. Applicant While it has decided to approve this application, the states the participation of NAMC will provide public Board wishes to reiterate the concerns it has ex- benefits in the form of gains in efficiency by allowing pressed in previous orders about the proliferation of TCMC to engage in the proposed activity with the statutes that, like Delaware's, permit the entry of out- existing experience, operating systems, computer proof-state bank holding companies in order to shift jobs grams, equipment and technical expertise of NAMC. and revenues from other states, while limiting the in- With respect to possible adverse effects, the Board state activities of banks owned by out-of-state holding concludes that consummation of this proposal would companies so as to avoid competition with in-state not have a significant adverse effect on either existing banking organizations. These statutes do not appear to or potential competition in any relevant market, in be based on appropriate public policy considerations view of the numerous existing and potential competifor assuring a stable and sound banking system locally tors in the market for mortgage banking services. In and nationwide, and the end result of their adoption by addition, there is no evidence that the joint venture other states can only be a serious impairment of would result in unfair competition, unsound banking banking standards and no net gains in jobs or revenues practices, conflicts of interest, or an undue concentrabecause of the proliferation. tion of resources. Applicant also has applied under section 4(c)(8) of Based on the foregoing and other facts of record, the the Act to engage in the following nonbanking activi- Board has determined that the balance of public interties that the Board has previously approved for bank est factors it must consider under section 4(c)(8) of the holding companies under Regulation Y: mortgage Act is favorable. banking through TCMC, commercial lending through Accordingly, the Board has determined that the TCCF, and providing investment and financial advice applications under sections 3 and 4 of the Act should and underwriting and dealing in government obliga- be, and hereby are, approved. The proposed acquisitions and money market instruments through TCS.8 tion of Bank shall not be consummated before the The Board has previously determined that the pro- thirtieth calendar following the effective date of this posed nonbanking activities are closely related and a Order. The proposal shall not be consummated later proper incident to banking under section 4(c)(8) in than three months after the effective date of this deciding to add them to the list of activities permissible Order, unless such period is extended for good cause for bank holding companies under sections by the Board or by the Federal Reserve Bank of 225.25(b)(1), (4), and (16) of Regulation Y. Section Dallas, pursuant to delegated authority. The determi- 4(c)(8) requires the Board to consider whether the nation as to Applicant's nonbanking activities is subperformance of the proposed activities by Applicant ject to the conditions set forth in sections 225.4(d) and would result in benefits to the public, such as greater 225.23(b)(3) of Regulation Y, 12 C.F.R. §§ 225.4(d) convenience, increased competition, or gains in effi- and 225.23(b)(3), and the Board's authority to require ciency, that outweigh possible adverse effects, such as such modification or termination of the activities of a undue concentration of resources, decreased or unfair holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the provisions and purposes of the Act and the Board's regulations and orders issued thereunder, or to prevent evasion thereof. 8. The Board previously approved the provision of investment By order of the Board of Governors, effective advisory services on a nonfee basis in a subsidiary that also underwrites and deals in government obligations and money market instru- September 3, 1986. ments in Manufacturers Hanover Corporation, 70 FEDERAL RESERVE BULLETIN 661 (1984). The Board notes that to the extent TCS underwrites and deals in and provides advice to issuers of municipal Voting for this action: Vice Chairman Johnson and Goversecurities, it will be subject to the rules of the Municipal Securities nors Wallich, Seger, Angell, and Heller. Absent and not Rulemaking Board, including Rule G-23 (requiring disclosure to customers of its role as principal or advisor with respect to those voting: Chairman Volcker and Governor Rice. securities). In addition, Applicant has committed that the personnel providing advice to issuers of municipal securities would be separate JAMES MCAFEE from the personnel engaged in underwriting and dealing in those securities. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • November 1986 Concurring Statement of Governor Seger that aim to provide out-of-state bank holding companies a base from which to conduct otherwise imper- While I fully support the Board's approval of this case, missible activity but subject to the condition that the I do not share the concerns expressed in the Order out-of-state bank holding company may not conduct over statutes, such as the Delaware law, that allow any such activity in competition with local providers in out-of-state bank holding companies to enter another the base state. However, I believe statutes that allow state in order to avoid usury and other restrictions on bank holding companies to engage in permissible credconsumer lending rates in their home states. From a it card lending anywhere in the United States free of public policy point of view, I believe those statutes are local usury and similar limitations are different and procompetitive and allow a bank holding company to represent a positive movement toward deregulation of engage in legitimate lending activity free of local interest rates. restrictions that, as the Board recently testified before Congress, can operate to hinder the provision of credit September 3, 1986 to consumers. I share the Board's concerns over state laws, such as the so-called "South Dakota insurance loophole," ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 4 .. Nonbanking Effective p activity date Mellon Bank Corporation, underwriting home mortgage redemption September 4, 1986 Pittsburgh, Pennsylvania insurance Sections 3 and 4 Bank(s)/Nonbanking Effective Applicant Company date United Jersey Banks, Commercial Bancshares, Inc., August 29, 1986 Princeton, New Jersey Jersey City, New Jersey Trico Mortgage Company, Inc., Woodbridge, New Jersey N.A. Home Investors Mortgage Corporation, Hackensack, New Jersey Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 807 By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Acme Holding Company, Inc., Bank of Mulberry, St. Louis August 29, 1986 Mulberry, Arkansas Mulberry, Arkansas American Banks of Florida, American National Bank of Clay Atlanta September 5, 1986 Inc., County, Jacksonville, Florida Orange Park, Florida AmSouth Bancorporation, AmSouth Bank of Walker Atlanta September 12, 1986 Birmingham, Alabama County, Jasper, Alabama Antrim Financial Corporation, Antrim County State Bank, Chicago September 16, 1986 Mancelona, Michigan Mancelona, Michigan Appalachian Financial Barbour County Bank, Richmond September 15, 1986 Corporation, Philippi, West Virginia Philippi, West Virginia Bancshares of Urbana, Inc., The Bank of Urbana, St. Louis August 27, 1986 Urbana, Missouri Urbana, Missouri Banc One Corporation, The Citizens State Bank, Cleveland September 25, 1986 Columbus, Ohio Sturgis, Michigan Banc One Corporation, First National Bank of Fenton, Cleveland September 26, 1986 Columbus, Ohio Fenton, Michigan Bank South Corporation, The Citizens Bank of Tifton, Atlanta September 12, 1986 Atlanta, Georgia Tifton, Georgia Bismarck Bancshares, Inc., Bismarck State Bank, Minneapolis September 12, 1986 Bismarck, North Dakota Bismarck, North Dakota Border Bancshares, Inc., Border Trust Company, Boston September 9, 1986 Jackman, Maine Jackman, Maine Bryn Mawr Bank Corporation, The Bryn Mawr Trust Company, Philadelphia September 11, 1986 Bryn Mawr, Pennsylvania Bryn Mawr, Pennsylvania Calvert Capital Corporation, Citizens Bank and Trust, Dallas September 17, 1986 Calvert, Texas Calvert, Texas CB&T Bancshares, Inc., First Camden Bancorporation, Atlanta September 25, 1986 Columbus, Georgia St. Marys, Georgia CCB Financial Corporation, Republic Bank & Trust Co., Richmond September 26, 1986 Durham, North Carolina Charlotte, North Carolina Central Bancshares of the Jacksonville State Bank, Atlanta September 24, 1986 South, Inc., Jacksonville, Alabama Birmingham, Alabama Central Virginia Bankshares, Central Virginia Bank, Richmond August 28, 1986 Inc., Powhatan, Virginia Powhatan, Virginia The Chase Manhattan Continental Bancor, Inc., New York August 27, 1986 Corporation, Scottsdale, Arizona New York, New York Chase Manhattan National Holding Corporation, Newark, Delaware Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • November 1986 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date City Bankshares, Inc., Wilshire Bancshares, Inc., Kansas City September 12, 1986 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Coastal Bancorp, Coastal Savings Bank, Boston September 26, 1986 Portland, Maine Portland, Maine Community Banks, Inc., Peoples Safe Deposit Bank, St. Philadelphia August 29, 1986 Millersburg, Pennsylvania Clair, St. Clair, Pennsylvania Conrad Bancorporation, First State Bank, Chicago August 22, 1986 Conrad, Iowa Conrad, Iowa Cotton Exchange Bancshares, Cotton Exchange Bank, St. Louis September 2, 1986 Inc., Kennett, Missouri Kennett, Missouri Crandall Bancshares, Inc., First State Bank of Crandall, Dallas September 19, 1986 Crandall, Texas Crandall, Texas East Texas National, Inc., East Texas Bancorporation, Inc., Dallas September 16, 1986 Palestine, Texas Palestine, Texas Eminence Bankshares, Inc., Eminence Security Bank, St. Louis September 4, 1986 Eminence, Missouri Eminence, Missouri Fidelity Bancorp, Inc., Northport National Bank, Dallas September 25, 1986 Houston, Texas Houston, Texas First Bancshares of Durant, The First National Bank in Kansas City September 18, 1986 Inc., Durant, Durant, Oklahoma Durant, Oklahoma First Bank of Indiantown First Bank of Indiantown, Atlanta September 11, 1986 Holding Co., Indiantown, Florida Indiantown, Florida First Jersey National First National Bancorp in Fort New York September 19, 1986 Corporation, Lee, Jersey City, New Jersey Fort Lee, New Jersey First Midwest Corporation of Illinois State Bancorp, Inc., Chicago August 26, 1986 Delaware, Chicago, Illinois Elmwood Park, Illinois The First State Bank of Thornton Bancshares, Inc., Chicago September 12, 1986 Thornton, Iowa Employees' Thornton, Iowa Stock Ownership Plan and Trust, Thornton, Iowa First Sunbelt Bankshares, Inc., The Georgia State Bank of Rome, Atlanta September 26, 1986 Rome, Georgia Rome, Georgia First Suncoast Trust The First National Bank of Atlanta September 26, 1986 Bancshares, Inc., Atmore, Atmore, Alabama Atmore, Alabama First Union Corporation, Bank of Waynesboro, Richmond September 12, 1986 Charlotte, North Carolina Waynesboro, Georgia G S B Corporation, George State Bank, Chicago September 12, 1986 George, Iowa George, Iowa The Harlem Corporation, Stevensville Bancshares, Inc., Minneapolis September 19, 1986 Billings, Montana Billings, Montana Hebron Bancshares, Inc., Hebron State Bank, Chicago September 17, 1986 Hebron, Illinois Hebron, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 809 Section 3—Continued _ , , . Reserve Effective Applicant Bank(s) ^ date The Hongkong and Shanghai Global Union Bank, New York September 29, 1986 Banking Corporation, New York, New York Hong Kong Jackson County Bankshares, Jackson County Bank, Chicago September 23, 1986 Inc., Black River Falls, Wisconsin Black River Falls, Wisconsin Mabrey Insurance Agency, Inc. The Bank of Commerce, Kansas City September 5, 1986 Okmulgee, Oklahoma Wetumka, Oklahoma Martha's Vineyard Bancorp, The Martha's Vineyard National Boston September 11, 1986 Inc., Bank, Vineyard Haven, Vineyard Haven, Massachusetts Massachusetts Meridian Bancorp, Inc., The First National Bank of Pike Philadelphia September 2, 1986 Reading, Pennsylvania County, Milford, Pennsylvania Miami Citizens Bancorp, Comp One Corporation, Cleveland September 17, 1986 Piqua, Ohio Piqua, Ohio Middletown Bancorp, Inc., Middletown State Bank, Chicago August 27, 1986 Middletown, Illinois Middletown, Illinois Minnesota Valley Financial Courtland State Bank, Minneapolis September 12, 1986 Services, Inc., Courtland, Minnesota St. Paul, Minnesota Mountaineer Bankshares of First National Bank at Salem, Richmond September 26, 1986 W. Va., Inc., Salem, West Virginia Martinsburg, West Virginia Moxham Bank Corporation, The First National Bank of Philadelphia September 18, 1986 Johnstown, Pennsylvania Garrett, Garrett, Pennsylvania North Arkansas Bancshares, The Bank of Rector, St. Louis September 24, 1986 Inc., Rector, Arkansas Jonesboro, Arkansas Searcy County Bank, Marshall, Arkansas Northland Bancshares, Inc., First National Bank of Platte Kansas City August 22, 1986 Kansas City, Missouri County, Kansas City, Missouri Northway Bancshares, Inc., Great Western National Bank of Dallas September 3, 1986 Richardson, Texas Lewisville, Lewisville, Texas Ohio Bancorp, Finance Ohio Corporation, Cleveland August 29, 1986 Youngstown, Ohio Martins Ferry, Ohio Old National Bancorp, Clinton State Bank, St. Louis September 2, 1986 Evansville, Indiana Clinton, Indiana Peoples Bank Corporation of Peoples Bank & Trust Company, Chicago September 15, 1986 Indianapolis, Indianapolis, Indiana Indianapolis, Indiana Pickett County Bancshares, The Pickett County Bank And Atlanta September 8, 1986 Inc., Trust Company, Byrdstown, Tennessee Byrdstown, Tennessee Portland Bankshares, Inc., Portland Bank, St. Louis September 26, 1986 Portland, Arkansas Portland, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • November 1986 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date The Queensborough Company, Bank of Wadley, Atlanta August 29, 1986 Louisville, Georgia Wadley, Georgia Royal Bancshares, Inc., Centre National Bank-Farmers Dallas August 25, 1986 Dallas, Texas Branch, Farmers Branch, Texas Second Bancorp, Inc., The Second National Bank of Cleveland September 16, 1986 Warren, Ohio Warren, Warren, Ohio Security Bancorp, Inc., Old Kent Bank of Almont, Chicago September 3, 1986 Southgate, Michigan Almont, Michigan Security State Bank Employee N.E. Montana Bancshares, Inc., Minneapolis August 28, 1986 Stock Ownership Plan and Plenty wood, Montana Trust, Security State Bank, Plenty wood, Montana Plenty wood, Montana Silex Bancshares, Inc., Silex Banking Company, St. Louis September 24, 1986 Silex, Missouri Silex, Missouri Trustcorp, Inc., First Bancshares of Huntington, Cleveland August 27, 1986 Toledo, Ohio Inc., Huntington, Indiana Union National Financial The Union National Mount Joy Philadelphia September 15, 1986 Corporation, Bank, Mount Joy, Pennsylvania Mount Joy, Pennsylvania Villa Grove Bancshares, Inc., First Villa Grove Bancorp., Inc., Chicago September 12, 1986 Villa Grove, Illinois Villa Grove, Illinois West Suburban Bancorp, Inc., West Suburban Bank, Chicago September 5, 1986 Lombard, Illinois Lombard, Illinois West Suburban Bank of Downers Grove/Lombard, Downers Grove, Illinois West Suburban Bank of Darien, Darien, Illinois West Suburban Bank of Carol Stream/Stratford Square, Carol Stream, Illinois Zions Utah Bancorporation, Mesa Bank, San Francisco August 29, 1986 Salt Lake City, Utah Mesa, Arizona Section 4 Nonbanking Reserve Effective Applicant Company Bank date BankEast Corporation, Royal/Grimm & Davis, Inc., Boston September 9, 1986 Manchester, New Hampshire New York, New York Bremer Financial Corporation, First American Bank & Trust of Minneapolis August 27, 1986 St. Paul, Minnesota Marshall, Otto Bremer Foundation, Marshall, Minnesota St. Paul, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 811 Section 4-Continued Nonbanking Reserve Effective Applicant Company Bank date Den norske Creditbank, engage de novo in leasing and New York August 26, 1986 Oslo, Norway financing personal property and servicing such leases and extensions of credit F & M Financial Services F&M Trust Company, Inc., Chicago September 17, 1986 Corporation, Menomonee Falls, Wisconsin Menomonee Falls, Wisconsin MCorp, ICOMP, Inc., Dallas September 3, 1986 Dallas, Texas Rock Island, Illinois MCorp Financial, Inc., Wilmington, Delaware New Hampshire Savings Bank Security Central Mortgage Boston September 11, 1986 Corp., Corporation, Concord, New Hampshire Bradenton, Florida Signet Banking Corporation, Southeastern Finance Company Richmond September 3, 1986 Richmond, Virginia of Dunn, North Carolina, Inc., Dunn, North Carolina Susquehanna Bancshares, Inc., DAL A Company, Inc., Philadelphia September 18, 1986 Lititz, Pennsylvania Lancaster, Pennsylvania General Funding Services Corporation, Huntingdon, Pennsylvania Sections 3 and 4 . Bank(s)/Nonbanking Reserve Effective pp Company Bank date North Georgia Bancshares, Inc., North Georgia Bank, Atlanta September 23, 1986 Canton, Georgia Canton, Georgia N.G.B.S. Investments, Inc., Canton, Georgia Trustcorp, Inc., Salem Bank and Trust Company, Cleveland August 29, 1986 Toledo, Ohio Goshen, Indiana Trustcorp of Indiana, Inc., Salem Financial Life Insurance Goshen, Indiana Company, Goshen, Indiana Legal Developments continued on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Federal Reserve Bulletin • November 1986 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Barbour County Bank, Barbour Interim Bank, Richmond September 15, 1986 Philippi, West Virginia Philippi, West Virginia Community Bank of Powhatan, Central Virginia Bank, Richmond August 28, 1986 Powhatan, Virginia Powhatan, Virginia Rocky Mountain State Bank, Rocky Mountain State Bank of San Francisco August 29, 1986 Salt Lake City, Utah Bountiful, Bountiful, Utah Seashore Bank Shares, Inc., Seabrook Bank and Trust Boston September 26, 1986 Seabrook, New Hampshire Company, Seabrook, New Hampshire Beach Bank, Seabrook, New Hampshire 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. Jenkins v. Board of Governors, No. 86-1419 (D.C. Jensen v. Wilkinson, et al., No. 85-4436-S, et al. (D. Cir., filed July 18, 1986). Kan., filed Oct. 10, 1985). Securities Industry Association v. Board of Gover- Alfson v. Wilkinson, et al., No. Al-85-267 (D. N.D., nors, No. 86-1412 (D.C. Cir., filed July 14, 1986). filed Oct. 8, 1985). Adkins v. Board of Governors, No. 86-3853 (4th Cir., First National Bank of Blue Island Employee Stock filed May 14, 1986). Ownership Plan v. Board of Governors, No. 85- Optical Coating Laboratory, Inc. v. United States, 2615 (7th Cir., filed Sept. 23, 1985). No. 288-86C (U.S. Claims Ct., filed May 6, 1986). First National Bancshares II v. Board of Governors, CBC, Inc. v. Board of Governors, No. 86-1001 (10th No. 85-3702 (6th Cir., filed Sept. 4, 1985). Cir., filed Jan. 2, 1986). McHuin v. Volcker, et al., No. 85-2170 WARB (W.D. Howe v. United States, et al., No. 85-4504-C (D. Okl., filed Aug. 29, 1985). Mass., filed Dec. 6, 1985). Independent Community Bankers Associaton of South Myers, et al. v. Federal Reserve Board, No. 85-1427 Dakota v. Board of Governors, No. 84-1496 (D.C. (D. Idaho, filed Nov. 18, 1985). Cir., filed Aug. 7, 1985). Souser, et al. v. Volcker, et al., No. 85-C-2370, et al. Florida Bankers Association, et al. v. Board of Gover- (D. Colo., filed Nov. 1, 1985). nors, No. 85-193 (U.S., filed Aug. 5, 1985). Podolak v. Volcker, No. C85-0456, et al. (D. Wyo., Urwyler, et al. v. Internal Revenue Service, et al., No. filed Oct. 28, 1985). CV-F-85-402 REC (E.D. Cal., filed July 18, 1985). Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa, Johnson v. Federal Reserve System, et al., No. S85filed Oct. 22, 1985). 0958(R) and S85-1269(N) (S.D. Miss., filed July 16, Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D. 1985). Minn., filed Oct. 21, 1985). Wight, et al. v. Internal Revenue Service, et al., No. Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D. CIV S-85-0012 MLS (E.D. Cal., filed July 12,1985). Neb., filed Oct. 16, 1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 813 Cook v. Spillman, et al., No. CIV S-85-0953 EJG Lewis v. Volcker, et al., No. C-1-85-0099 (S.D. Ohio, (E.D. Cal., filed July 10, 1985). filed Jan. 14, 1985). Florida Bankers Association v. Board of Governors, Brown v. United States Congress, et al., No. 84-2887- No. 84-3883 and No. 84-3884 (11th Cir., filed 6(IG) (S.D. Cal., filed Dec. 7, 1984). Feb. 15, 1985). Melcher v. Federal Open Market Committee, No. 84- Florida Department of Banking v. Board of Gover- 1335 (D.D.C., filed Apr. 30, 1984). nors, No. 84-3831 (11th Cir., filed Feb. 15, 1985), Securities Industry Association v. Board of Goverand No. 84-3832 (11th Cir., filed Feb. 15, 1985). nors, No. 80-2614 (D.C. Cir., filed Oct. 24, 1980), and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

2 Federal Reserve Bulletin • November 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 A3 8 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 SPECIAL TABLE A53 U.S. international transactions—Summary A70 Assets and liabilities of foreign banks, A54 U.S. foreign trade March 31, 1986 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' Apr. May June' July' Aug. Reserves of depository institutions2 1 Total 15.7 12.5 13.1 17.8 10.5 33.0 21.4 25.3 19.6 2 Required 16.4 11.5 12.3 19.8 13.2 32.7 19.5 26.3 24.2 3 Nonborrowed 17.5 10.4 19.1 17.6 7.3 34.1 23.7 27.3 16.8 4 Monetary base3 9.6 8.2 8.6 8.8 5.9 13.7 9.2 8.8 12.0 Concepts of money, liquid assets, and debt4 5 Ml 14.5 10.7 7.7 15.8 14.5 23.4 14.8 16.7 20.8 6 M2 9.6' 6.1' 4.3 10.5 13.9^ 12.5' 9.4 12.9 10.9 7 M3 7.6 6.6' 7.6' 9.0 11.5' 7.9' 8.6 13.0 8.7 8 L 7.8 9.5' 8.2' 7.2 7.4' 10.2' 7.5 11.1 n.a. 9 Debt 12.9 14.6 16.1 9.8 10.0 10.8' 10.6 11.0 n.a. Nontransaction components 10 In M25 8.0 4.6 3.3' 8.7 13.6' 9.1' 7.6 11.6 7.7 11 In M3 only6 -.3 8.5' 20.7' 3.4 2.5' -10.5' 5.2 13.8 -.4 Time and savings deposits Commercial banks 12 Savings7 7.6 3.2 1.9 11.8 9.6 22.7 17.7 22.9 30.6 13 Small-denomination time8 -3.3 -1.6 5.3 -3.1 -3.1 -9.6 -9.7 -5.7 -12.6 14 Large-denomination time910 -3.6 14.1 18.5 -8.8 -.4 -23.0 -4.3 -3.4 6.0 Thrift institutions 15 Savings7 12.9 7.5 3.1 20.9 23.8 30.5 29.1 22.3 17.6 16 Small-denomination time -2.8 -2.9 6.6 2.6 5.2' -3.8' -5.7 -.5 -6.2 17 Large-denomination time9 -1.0 5.2 10.0 11.0 11.7 -.7 -2.2 8.0 2.2 Debt components4 18 Federal 14.6 15.2 17.5 9.5 7.8 12.8' 15.5 13.9 n.a. 19 Nonfederal 12.4 14.4 9.9 10.7' 10.2' 9.2 10.1 n.a. 20 Total loans and securities at commercial banks11 9.6 9.4' 12.7 4.1 2.0 5.9 3.8 13.0 13.7 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 • November 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 June July August July 16 July 23 July 30 August 6 August 13 August 20 August 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 207,619 210,913 210,945 213,490 209,274 209,773 211,360 211,399 209,941 210,690 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 182,611 185,112 185,339 187,032 184,790 184,256 184,720 185,309 185,038 185,595 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 182,086 183,550 185,339 183,845 184,790 184,256 184,720 185,309 185,038 185,595 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 525 1,562 0 3,187 0 0 0 0 0 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,309 8,581 8,076 9,258 8,137 8,137 8,137 8,098 8,047 8,047 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,137 8,137 8,076 8,137 8,137 8,137 8,137 8,098 8,047 8,047 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 172 444 0 1,121 0 0 0 0 0 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 780 762 847 824 658 746 705 812 933 887 1111100000 FFFFFllllloooooaaaaattttt 586 438 610 296 354 576 1,340 434 430 733 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 15,334 16,020 16,073 16,081 15,334 16,058 16,459 16,746 15,494 15,429 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,085 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt.................... 4,818 4,818 4,844 4,818 4,818 4,818 4,818 4,818 4,818 4,818 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,314 17,342 17,374 17,341 17,345 17,350 17,355 17,365 17,375 17,385 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 198,625r 200,878 201,116 201,567 200,521 199,731 200,689 201,473 201,276 200,600 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 615r 564 516 570 559 541 529 519 518 512 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 2,824 3,638 3,210 3,992 3,633 3,862 3,524 3,695 3,454 3,284 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 229 256 208 204 210 255 198 204 198 224 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd 1,837 aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,882 1,824 1,901 1,710 1,908 1,811 1,816 1,995 1,963 2222200000 OOOOOttttthhhhheeeeerrrrr 477 471 508 472 405 406 623 412 566 453 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,289 6,383 6,479 6,394 6,305 6,258 6,674 6,686 6,311 6,267 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 29,895 30,143 30,308 31,825 28,978 30,161 30,565 29,838 28,899 30,675 End-of-month figures Wednesday figures 1986 1986 June July August July 16 July 23 July 30 August 6 August 13 August 20 August 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 209,021 209,666 211,705 217,128 208,831 210,292 210,328 210,719 209,624 211,131 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 183,849 183,446 185,937 188,513 183,742 184,104 183,930 184,482 184,199 185,575 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 183,849 183,446 185,937 183,050 183,742 184,104 183,930 184,482 184,199 185,575 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 5,463 0 0 0 0 0 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,137 8,137 8,047 9,808 8,137 8,137 8,137 8,047 8,047 8,047 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,137 8,137 8,047 8,137 8,137 8,137 8,137 8,047 8,047 8,047 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 0 0 1,671 0 0 0 0 0 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 952 737 913 1,911 689 909 716 881 817 944 3333322222 FFFFFllllloooooaaaaattttt 283 831 261 269 194 913 790 408 708 2,117 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 15,800 16,515 16,547 16,627 16,069 16,229 16,755 16,901 15,853 14,448 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,084 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 5,018 4,818 4,818 4,818 4,818 4,818 4,818 4,818 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,33(V 17,353 17,394 17,344 17,349 17,353 17,364 17,374 17,384 17,394 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 199,281r 200,552 201,778 201,183 200,152 200,034 201,232 201,548 200,985 200,976 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 601r 532 497 562 542 532 519 519 512 511 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,143 3,983 1,106 5,238 3,330 3,286 4,349 3,169 3,542 3,890 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 354 233 227 229 218 204 217 199 270 228 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,593 1,631 1,669 1,604 1,614 1,614 1,631 1,631 1,671 1,670 4444422222 OOOOOttttthhhhheeeeerrrrr 450 688 461 489 369 415 436 410 449 497 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,484 6,658 6,562 6,242 6,200 6,088 6,497 6,171 6,122 6,113 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 30,347 28,644 32,901 34,827 29,657 31,374 28,712 30,347 29,359 30,542 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 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 1986 Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July 1 Reserve balances with Reserve Banks1 21,138 21,738 27,620 24,373 24,700 27,114 28,892 28,279 29,499 30,313 2 Total vault cash2 20,755 22,316 22,956 24,245 24,962 22,688 22,231 22,474 22,805 23,098 Vault cash used to satisfy reserve requirements3 17,908 18,958 20,522 21,687 21,952 20,160 19,990 20,140 20,439 20,716 4 Surplus vault cash4 2,847 3,358 2,434 2,559 3,010 2,528 2,241 2,334 2,366 2,381 Total reserves5 38,894 40,696 48,142 48,060 46,652 47,274 48,882 48,419 49,938 51,029 6 Required reserves 38,333 39,843 47,085 46,949 45,555 46,378 48,081 47,581 49,007 50,118 7 Excess reserve balances at Reserve Banks6 561 853 1,058 1,111 1,097 896 801 838 931 910 8 Total borrowings at Reserve Banks 774 3,186 1,318 770 884 761 893 876 803 741 9 Seasonal borrowings at Reserve Banks 96 113 56 36 56 68 73 94 108 116 10 Extended credit at Reserve Banks7 2 2,604 499 497 492 518 634 584 531 378 Biweekly averages of daily figures for weeks ending 1986 May 21 June 4 June 18 July 2 July 16 July 30 Aug. 13 Aug. 27 Sept. 10 Sept. 24 11 Reserve balances with Reserve Banks1 27,875 28,568 30,156 29,044 31,267 29,547 30,185 29,792 22,671 23,623 12 Total vault cash2 22,700 22,422 22,250 23,580 22,466 23,644 23,323 23,792 22,671 23,623 13 Vault cash used to satisfy reserve requirements3 20,366 20,045 20,106 20,958 20,283 21,094 20,992 21,388 20,528 21,540 14 Surplus vault cash4 2,334 2,377 2,144 2,622 2,183 2,550 2,331 2,404 2,143 2,083 15 Total reserves5 48,241 48,613 50,262 50,002 51,550 50,641 51,177 51,146 52,043 53,650 16 Required reserves 47,554 47,600 49,627 48,755 50,871 49,545 50,592 50,279 51,281 53,001 17 Excess reserve balances at Reserve Banks6 688 1,014 636 1,247 679 1,096 585 867 762 649 18 Total borrowings at Reserve Banks 827 871 719 879 758 702 759 910 1,111 981 19 Seasonal borrowings at Reserve Banks 92 101 102 119 104 127 134 152 149 135 20 Extended credit at Reserve Banks7 571 566 526 525 442 294 373 515 592 569 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 July 21 July 28 Aug. 4 Aug. 11 Aug. 18 Aug. 25 Sept. 1 Sept. 8 Sept. 15 One day and continuing contract 1 Commercial banks in United States 72,686 70,154 73,643 75,018 73,971 72,709 71,747 79,935 76,260 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 38,616 39,108 38,880 40,815 39,130 39,548 41,393 43,667 41,138 3 Nonbank securities dealers 11,965 10,377 10,575 11,841 12,170 12,202 11,250 11,639 11,318 4 All other 27,898 30,353 29,584 29,358 29,339' 29,053 29,476 27,418 27,380 All other maturities 5 Commercial banks in United States 9,065 9,111 9,199 9,763 9,435 9,148 9,810 8,953 9,450 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 6,950 6,006 6,390 6,436 6,131 5,372 5,123 5,670 6,683 7 Nonbank securities dealers 8,236 8,782 9,373 9,616 9,282' 9,472 9,985 9,133 9,818 8 All other 9,008 9,768 9,361 9,396 9,616 9,316 10,200 11,031 11,599 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 28,173 26,579 30,625 29,573' 29,612' 27,489 27,837 30,746 28,135 10 Nonbank securities dealers 10,223 10,769 10,933' 10,437' 9,998' 9,270 9,368 11,149 12,149 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 • November 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 9/26/86 date rate 9/26/86 rate 9/26/86 rate 9/26/86 rate 6V2 Boston 51/2 8/21/86 6 5'/2 6 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 6V2 8/21/86 San Francisco... 5'/2 8/21/86 6 51/2 6 7 7V2 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. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 7 Vi IV2 1978— Aug. 21 73/4 73/4 1982— July 20 111/2-12 111/2 1974— Apr. 25 71/2-8 8 Sept. 22 8 8m 2 3 111/2 111/2 3 0 8 8 Oct. 16 8-8V2 m Aug. 2 11-111/! 11 Dec. 9 73/4-8 73/4 20 m8-'/92 Vz 3 11 11 16 73/4 73/4 Nov. 1 16 101/2 101/2 9'/2 9 Vi 27 10-101/2 10 1975— Jan. 6 71/4-73/4 73/4 30 10 10 10 7!/4-73/4 71/4 1979— July 20 10 10 Oct. 12 9'/2-10 91/2 24 7!/4 7'/4 AAuugg.. 17 10-10!/2 13 9'/2 91/2 Feb. 5 63/4-71/4 63/4 20 lO'/i 10'/2 Nov. 22 9-91/2 9 7 63/4 63/4 SSeepptt.. 19 10'/2-ll ii 26 9 9 Mar. 10 6>/4-63/4 6!/4 21 11 u Dec. 14 81/2-9 9 14 61/4 61/4 Oct. 8 11-12 12 15 81/2-9 81/2 May 16 6-61/4 6 10 12 12 17 81/2 81/2 23 6 6 1976— Jan. 19 5V2-6 51/2 1980— Feb. 1 1 5 9 12 1 - 3 1 3 1 1 3 3 1984— Apr. 1 9 3 81 9 / 2-9 9 9 23 51/2 51/2 MMaayy 29 12-13 13 Nov. 21 81/2-9 81/2 Nov. 22 51/4-51/2 51/4 30 12 12 26 8'/2 81/2 26 51/4 51/4 June 13 11-12 11 Dec. 24 8 8 16 11 11 1977— Aug. 30 51/4-53/4 51/4 JJuullyy 28 10-11 10 1985— May 20 71/2-8 71/2 31 51/4-53/4 53/4 29 10 10 2 4 71/2 71/2 Sept. 2 53/4 53/4 Sept. 26 11 11 Oct. 26 6 6 Nov. 17 12 12 1986— Mar. 7 7-71/2 7 bl/2 Dec. 5 12-13 13 10 7 7 1978— Jan. 9 6-66V'/22 8 13 13 Apr. 21 6V2-7 6 >/2 20 61/2 23 61/2 6'/2 May 11 61/2-7 7 1981— May 5 13-14 14 July 11 6 6 12 7 7 8 14 14 Aug. 21 51/2-6 51/2 July 3 7-71/4 71/4 Nov. 2 13-14 13 22 51/2 51/2 July 10 71/4 7'/4 6 13 13 Dec. 4 12 12 In effect Sept. 26, 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 V2 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 V2 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 INSTITUTIONS1 Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyyppee ooff ddeeppoossiitt,, aanndd Monetary Control Act TTyyppee ooff ddeeppoossiitt,, aanndd Monetary Control Act6 ddeeppoossiitt iinntteerrvvaall ddeeppoossiitt iinntteerrvvaall55 Percent Effective date Percent Effective date Net demand2 Net transaction accounts1-* 7 12/30/76 $0-531.7 million 3 12/31/85 9 xh 12/30/76 1122 1122//3311//8855 $10 million-$100 million ll3/4 12/30/76 $100 million-$400 million 123/4 12/30/76 Nonpersonal time deposits9 Over $400 million 161/4 12/30/76 By original maturity Less than 1 Vi years 3 10/6/83 Time and savings2,3 11/2 years or more 0 10/6/83 SSaavviinnggss 3 3/16/67 Eurocurrency liabilities Time4 AAllll ttyyppeess 3 11/13/80 $0 million-$5 million, by maturity 30-179 days 3 3/16/67 180 days to 4 years 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 2Vi 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual 5. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97- Statistical Digest, 1971-1975, and for prior changes, see Board's Annual Report 320) provides that $2 million of reservable liabilities (transaction accounts, for 1976, table 13. Under provisions of the Monetary Control Act, depository nonpersonal time deposits, and Eurocurrency liabilities) of each depository institutions include commercial banks, mutual savings banks, savings and loan institution be subject to a zero percent reserve requirement. The Board is to adjust associations, credit unions, agencies and branches of foreign banks, and Edge Act the amount of reservable liabilities subject to this zero percent reserve requirecorporations. ment each year for the next succeeding calendar year by 80 percent of the 2. Requirement schedules are graduated, and each deposit interval applies to percentage increase in the total reservable liabilities of all depository institutions, that part of the deposits of each bank. Demand deposits subject to reserve measured on an annual basis as of June 30. No corresponding adjustment is to be requirements were gross demand deposits minus cash items in process of made in the event of a decrease. Effective Dec. 9, 1982, the amount of the collection and demand balances due from domestic banks. exemption was established at $2.1 million. Effective with the reserve maintenance The Federal Reserve Act as amended through 1978 specified different ranges of period beginning Jan. 1, 1985, the amount of the exemption is $2.4 million. requirements for reserve city banks and for other banks. Reserve cities were Effective with the reserve computation period beginning Dec. 31, 1985, the designated under a criterion adopted effective Nov. 9, 1972, by which a bank amount of the exemption is $2.6 million. In determining the reserve requirements having net demand deposits of more than $400 million was considered to have the of a depository institution, the exemption shall apply in the following order: (1) character of business of a reserve city bank. The presence of the head office of nonpersonal money market deposit accounts (MMDAs) 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 iVi 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 • November 1986 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 Percent per annum Commercial banks mut S u a a v l i s n a g v s i n a g n s d b l a o n a k n s a ( s t s h o r c if i t a t i i n o s n t s it u a t n io d n s)1 In effect Sept. 30, 1986 In effect Sept. 30, 1986 TTTyyypppeee ooofff dddeeepppooosssiiittt Percent Effective date Percent Effective date 1 Savings (2) 4/1/86 (2) 4/1/86 2 Negotiable order of withdrawal accounts (3) 1/1/86 (3) 1/1/86 3 Money market deposit account (4) 12/14/82 (4) 12/14/82 Time accounts 4 7-31 days (5) 1/1/86 ((55)) 9/1/86 1100//11//8833 1100//11//8833 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 $2,300 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 5Vi 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 5W percent. Deposits of less than $1,000 issued to governmental ments of less than $1,000 were subject to an interest rate ceiling of 5V* 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. LRA/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 1986 TTyyppee ooff ttrraannssaaccttiioonn 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 18,888 20,036 22,214 286 0 396 2,988 3,1% 1,402 886677 2 Gross sales 3,420 8,557 4,118 225 2,277 0 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 1,000 0 0 0 0 0 Others within 1 year 5 Gross purchases 484 1,126 1,349 0 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 19,763 725 4,776 1,152 447 1,847 1,152 579 8 Exchange -16,553 -20,840 -17,717 -596 -2,148 -1,458 -1,129 -1,819 -1,957 -1,253 9 Redemptions 87 0 0 0 0 0 0 0 0 0 I to 5 years 10 Gross purchases 1,896 1,638 2,185 0 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 -703 -4,776 -1,152 -447 -1,532 -1,152 -386 13 Exchange 11,641 16,039 13,853 596 1,548 1,458 1,134 1,019 1,957 1,253 5 to 10 years 14 Gross purchases 890 536 458 0 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 -22 0 0 -5 -315 0 -193 17 Exchange 2,950 2,750 2,184 0 350 0 0 500 0 0 Over 10 years 18 Gross purchases 383 441 293 0 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 0 250 0 0 300 0 0 All maturities 22 Gross purchases 22,540 23,776 26,499 286 0 396 2,988 3,196 1,402 867 23 Gross sales 3,420 8,857 4,218 225 2,277 0 0 0 0 0 24 Redemptions 2,487 7,700 3,500 0 1,000 0 0 0 0 0 Matched transactions 25 Gross sales 578,591 808,986 866,175 63,109 90,459 88,917 109,253 62,663 80,219 70,928 26 Gross purchases 576,908 810,432 865,968 61,156 94,368 88,604 103,957 67,147 80,674 69,659 Repurchase agreements 27 Gross purchases 105,971 127,933 134,253 24,257 0 6,748 21,156 12,395 5,640 1188,,665577 28 Gross sales 108,291 127,690 132,351 24,699 3,087 6,748 13,634 19,917 5,640 18,657 29 Net change in U.S. government securities 12,631 8,908 20,477 -2,335 -2,456 83 5,214 158 1,857 -403 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 40 0 0 50 0 * Repurchase agreements 33 Gross purchases 8,833 11,509 22,183 5,384 0 1,821 3,369 3,135 1,691 4,984 34 Gross sales 9,213 11,328 20,877 6,454 623 1,821 1,955 4,567 1,691 4,984 35 Net change in federal agency obligations -672 -76 1,144 -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 -3,405 -3,119 83 6,647 -1,324 1,857 -403 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 • November 1986 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1986 1986 July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 June July Aug. Consolidated condition statement ASSETS 1 Gold certificate account 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 2 Special drawing rights certificate account 4,818 4,818 4,818 4,818 4,818 4,818 4,818 5,018 3 Coin 475 473 477 484 476 488 467 468 Loans 4 To depository institutions 909 716 881 817 944 952 737 913 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 00 00 00 00 00 00 00 Federal agency obligations 7 Bought outright 8,137 8,137 8,047 8,047 8,047 8,137 88,,113377 88,,004477 8 Held under repurchase agreements 0 0 0 0 0 0 0 0 U.S. government securities Bought outright 9 Bills 91,731 91,557 92,109 91,826 93,202 91,476 91,073 93,564 10 Notes 67,097 67,097 67,097 66,597 66,597 67,097 67,097 66,597 11 Bonds 25,276 25,276 25,276 25,776 25,776 25,276 25,276 25,776 12 Total bought outright1 184,104 183,930 184,482 184,199 185,575 183,849 183,446 185,937 13 Held under repurchase agreements 0 0 0 0 0 0 0 0 14 Total U.S. government securities 184,104 183,930 184,482 184,199 185,575 183,849 183,446 185,937 15 Total loans and securities 193,150 192,783 193,410 193,063 194,566 192,938 192,320 194,897 16 Items in process of collection 6,696 7,220 6,047 6,582 7,741 4,959 6,206 5,632 17 Bank premises 637 638 640 642 642 634 638 642 Other assets 18 Denominated in foreign currencies2 8,229 8,659 8,663 8,676 8,681 8,200 8,657 9,147 19 All other3 7,363 7,458 7,598 6,535 5,125 6,966 7,220 6,758 20 Total assets 232,452 233,133 232,737 231,884 233,133 230,087 231,410 233,646 LIABILITIES 21 Federal Reserve notes 183,688 184,861 185,171 184,597 184,569 183,040 184,198 185,349 Deposits 22 To depository institutions 32,988 30,343 31,978 31,030 32,212 31,940 30,275 34,570 23 U.S. Treasury—General account 3,286 4,349 3,169 3,542 3,890 3,143 3,983 1,106 24 Foreign—Official accounts 204 217 199 270 228 354 233 227 25 Other 415 436 410 449 497 450 688 461 26 Total deposits 36,893 35,345 35,756 35,291 36,827 35,887 35,179 36,364 27 Deferred credit items 5,783 6,430 5,639 5,874 5,624 4,676 5,375 5,371 28 Other liabilities and accrued dividends4 2,104 2,087 2,175 2,133 2,103 2,190 2,212 2,193 29 Total liabilities 228,468 228,723 228,741 227,895 229,123 225,793 226,964 229,277 CAPITAL ACCOUNTS 30 Capital paid in 1,833 1,839 1,840 1,841 1,844 1,807 1,834 1,843 31 Surplus 1,781 1,781 1,781 1,781 1,781 1,781 1,781 1,781 32 Other capital accounts 370 790 375 367 385 706 831 745 33 Total liabilities and capital accounts 232,452 233,133 232,737 231,884 233,133 230,087 231,410 233,646 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 151,639 153,894 155,491 156,105 155,291 146,909 153,973 155,182 Federal Reserve note statement 35 Federal Reserve notes outstanding 218,655 219,348 220,412 221,234 221,734 215,965 218,626 221,640 36 LESS: Held by bank 34,967 34,487 35,241 36,637 37,165 32,925 34,428 36,291 37 Federal Reserve notes, net 183,688 184,861 185,171 184,597 184,569 183,040 184,198 185,349 Collateral held against notes net: 38 Gold certificate account 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 39 Special drawing rights certificate account 4,818 4,818 4,818 4,818 4,818 4,818 4,818 5,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 167,786 168,959 169,269 168,695 168,667 167,138 168,2% 169,247 42 Total collateral 183,688 184,861 185,171 184,597 184,569 183,040 184,198 185,349 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 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 June 30 July 31 Aug. 29 1 Loans—Total 909 716 881 817 944 952 737 913 2 Within 15 days 901 656 850 813 935 922 693 863 3 16 days to 90 days 8 60 31 4 9 30 44 50 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 184,104 183,930 184,482 184,199 185,575 183,849 183,446 185,937 10 Within 15 days1 10,068 12,880 11,995 10,334 11,364 6,428 8,813 5,582 11 16 days to 90 days 45,390 43,380 42,791 41,920 42,266 48,118 41,303 42,894 12 91 days to 1 year 57,444 55,794 57,820 56,980 56,980 58,100 61,454 60,596 13 Over 1 year to 5 years 33,793 34,467 34,467 36,576 36,576 33,600 34,467 38,476 14 Over 5 years to 10 years 15,100 15,100 15,100 15,580 15,580 15,294 15,100 15,580 15 Over 10 years 22,309 22,309 22,309 22,809 22,809 22,309 22,309 22,809 16 Federal agency obligations—Total 8,137 8,137 8,047 8,047 8,047 8,137 8,137 8,047 17 Within 15 days1 175 90 0 202 251 164 175 251 18 16 days to 90 days 645 799 924 722 704 601 645 704 19 91 days to 1 year 1,704 1,635 1,550 1,550 1,569 1,856 1,704 1,569 20 Over 1 year to 5 years 3,885 3,885 3,845 3,845 3,925 3,765 3,885 3,925 21 Over 5 years to 10 years 1,304 1,304 1,304 1,304 1,174 1,327 1,304 1,174 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 • November 1986 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1986 1982 1983 1984 1985 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July Aug. Seasonally adjustec ADJUSTED FOR 1 Total reserves2 34.28 36.14 39.51 45.61 45.88 46.37 46.87 47.28 48.58 49.45 50.49 51.32 2 Nonborrowed reserves 33.65 35.36 36.32 44.29 45.11 45.49 46.10 46.38 47.70 48.64 49.75 50.44 3 Nonborrowed reserves plus extended credit3 33.83 35.37 38.93 44.79 45.61 45.98 46.62 47.02 48.29 49.17 50.13 50.91 4 Required reserves 33.78 35.58 38.66 44.55 44.77 45.27 45.97 46.47 47.74 48.51 49.58' 50.58 5 Monetary base4 170.04 185.39 199.17 216.72 218.40 219.79 221.26 222.36 224.90 226.63 228.30' 230.59 Not seasonally adjusted 6 Total reserves2 35.01 36.86 40.57 46.84 47.11 45.68 46.34 47.94 47.71 49.20 50.32 50.62 7 Nonborrowed reserves 34.37 36.09 37.38 45.52 46.34 44.80 45.58 47.04 46.84 48.39 49.58 49.75 8 Nonborrowed reserves plus extended credit3 34.56 36.09 39.98 46.02 46.84 45.29 46.10 47.68 47.42 48.93 49.96 50.21 9 Required reserves 34.51 36.30 39.71 45.78 46.00 44.59 45.44 47.14 46.87 48.27 49.41' 49.88 10 Monetary base4 173.07 188.66 202.34 220.36 218.74 216.78 218.99 222.13 223.61 227.04 230.02' 230.76 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.85 38.89 40.70 48.14 48.06 46.65 47.27 48.88 48.42 49.94 51.03 51.27 12 Nonborrowed reserves 41.22 38.12 37.51 46.82 47.29 45.77 46.51 47.99 47.54 49.14 50.29 50.40 N Nonborrowed reserves plus extended credit3 41.41 38.12 40.09 47.41 47.79 46.22 47.17 48.22 48.24 49.81 50.68 50.90 14 Required reserves 41.35 38.33 39.84 47.09 46.95 45.56 46.38 48.08 47.58 49.01 50.12' 50.54 15 Monetary base4 180.42 192.26 204.18 223.53 221.59 219.57 221.70 224.88 226.12 229.68 232.55' 233.32 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.. MMaayy JJuunnee JJuullyy AAuugg.. Seasonally adjusted 1 Ml 479.9 527.1 558.5 626.6 658.7 666.8 676.1' 687.8 2 M2 1,952.6 2,186.0 2,373.8 2,566.5 2,649.7 2,670.5' 2,699.1' 2,723.4 M3 2,443.5 2,697.3 2,986.5 3,201.1 3,315.5' 3,339.2' 3,375.4' 3,399.5 4 L 2,850.1 3,163.5 3,532.0' 3,838.2 3,950.0'' 3,974.4' 4,011.0' n.a. 5 Debt 4,661.3 5,192.0 5,952.0 6,810.0 7,134.6' 7,197.9' 7,263.7' n.a. Ml components 6 Currency2 134.3 148.3 158.5 170.6 175.8 176.7 177.5' 179.0 7 Travelers checks3 4.3 4.9 5.2 5.9 6.1 6.2 6.4 6.5 8 Demand deposits4 237.9 242.7 248.4 271.5 281.6 284.9 288.3 291.8 9 Other checkable deposits5 103.4 131.3 146.3 178.6 195.1 199.0 203.9 210.5 Nontransactions components 10 In M26 1,472.7 1,658.9 1,815.4 1,939.9 1,991.0' 2,003.7' 2,023 .C 2,035.7 11 In M3 only7 490.9 511.3 612.7 634.6 665.8' 668.7' 676.3' 676.1 Savings deposits9 12 Commercial Banks 163.7 133.4 122.3 124.5 129.0 130.9 133.4 136.8 13 Thrift institutions 194.2 173.2 167.3 179.1 189.5 194.1 197.7' 200.5 Small denomination time deposits9 14 Commercial Banks 380.4 351.1 387.2 384.1 384.9 381.8 380.0 376.0 15 Thrift institutions 472.4 434.1 500.3 496.2 506.3 503.9' 503.7' 501.1 Money market mutual funds 16 General purpose and broker/dealer 185.2 138.2 167.5 176.5 193.2 197.2 199.4 200.2 17 Institution-only 51.1 43.2 62.7 64.6 76.1 75.0 77.5 80.8 Large denomination time deposits10 18 Commercial Banks11 262.1 228.7 263.7 279.1 281.5 280.5' 279.7' 281.1 19 Thrift institutions 65.8 101.1 150.2 157.3 164.9 164.6 165.7 166.0 Debt components 70 Federal debt 979.2 1,173.0 1,367.3 1,586.3 1,656.3' 1,677.7' 1,697.1' n.a. 21 Non-federal debt 3,682.1 4,019.0 4,584.7 5,223.7 5,478.3' 5,520.2' 5,566.5' n.a. Not seasonally adjusted 77 Ml 490.9 538.8 570.5 639.9 651.8 669.2 679.8' 684.7 73 M2 1,958.6 2,192.8 2,380.8 2,574.7 2,640.7 2,672.7' 2,704.4' 2,718.3 74 M3 2,453.3 2,707.9 2,997.8r 3,213.8 3,308.7' 3,339.9' 3,373.0' 3,394.3 75 L 2,856.4 3,170.1 3,537.2r 3,844.4 3,936.8' 3,974.6' 4,011.0' n.a. 26 Debt 4,655.7 5,186.5 5,946.3 6,804.1 7,109.C 7,176.7' 7,243.9' n.a. Ml components 27 Currency2 136.5 150.5 160.9 173.1 175.8 177.4 179.1 179.9 78 Travelers checks3 4.1 4.6 4.9 5.5 5.9 6.5 7.2 7.3 29 Demand deposits4 246.2 251.3 257.3 281.3 276.7 285.6 290.0 289.0 30 Other checkable deposits5 104.1 132.4 147.5 180.1 193.4 199.6 203.5' 208.6 Nontransactions components 31 M26 1,467.7 1,654.0 1,810.3 1,934.7 1,988.9 2,003.5' 2,024.6' 2,033.5 32 M3 only7 494.7 515.1 617.0 639.2 668.1' 667.2' 668.6' 676.0 Money market deposit accounts 33 Commercial banks 26.3 230.5 267.2 332.4 348.6 355.2 358.9' 363.4 34 Thrift institutions 16.9 148.7 149.7 179.6 182.2 185.2 187.2 189.8 Savings deposits8 35 Commercial Banks 162.1 132.2 121.4 123.5 129.5 132.2 135.1 137.2 36 Thrift institutions 193.1 172.3 166.5 178.3 190.3 194.8 198.7' 199.4 Small denomination time deposits9 37 Commercial Banks 380.1 351.1 387.6 384.8 382.3 380.7 379.9 378.0 38 Thrift institutions 471.7 434.2 501.2 497.6 502.4 501.0 502.8' 500.4 Money market mutual funds 39 General purpose and broker/dealer 185.2 138.2 167.5 176.5 193.2 197.2 199.4 200.2 40 Institution-only 51.1 43.2 62.7 64.6 76.1 75.0 77.5 80.8 Large denomination time deposits10 41 Commercial Banks11 265.2 230.8 265.4 280.9 280.8 278.8' 278.7' 281.4 42 Thrift institutions 65.8 101.4 150.6 157.8 164.4 164.1 164.6 165.9 Debt components 43 Federal debt 976.4 1,170.2 1,364.7 1,583.7 1,660.7' 1,678.9' 1,695.6' n.a. 44 Non-federal debt 3,679.3 4,016.3 4,581.6 5,220.4' 5,448.3' 5,497.8' 5,548.3' n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 DomesticN onfinancial Statistics • November 1986 NOTES TO TABLE 1.21 1. Composition of the money stock measures and debt is as follows: 2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults commercial banks. Excludes the estimated amount of vault cash held by thrift of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits institutions to service their OCD liabilities. at all commercial banks other than those due to domestic banks, the U.S. 3. Outstanding amount of U.S. dollar-denominated travelers checks of nongovernment, and foreign banks and official institutions less cash items in the bank issuers. Travelers checks issued by depository institutions are included in process of collection and Federal Reserve float; and (4) other checkable deposits demand deposits. (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer 4. Demand deposits at commercial banks and foreign-related institutions other service (ATS) accounts at depository institutions, credit union share draft than those due to domestic banks, the U.S. government, and foreign banks and accounts, and demand deposits at thrift institutions. The currency and demand official institutions less cash items in the process of collection and Federal deposit components exclude the estimated amount of vault cash and demand Reserve float. Excludes the estimated amount of demand deposits held at deposits respectively held by thrift institutions to service their OCD liabilities. commercial banks by thrift institutions to service their OCD liabilities. M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) 5. Consists of NOW and ATS balances at all depository institutions, credit issued by all commercial banks and overnight Eurodollars issued to U.S. residents union share draft balances, and demand deposits at thrift institutions. Other by foreign branches of U.S. banks worldwide, MMDAs, savings and small- checkable deposits seasonally adjusted equals the difference between the seasondenomination time deposits (time deposits—including retail RPs—in amounts of ally adjusted sum of demand deposits plus OCD and seasonally adjusted demand less than $100,000), and balances in both taxable and tax-exempt general purpose deposits. Included are all ceiling free "Super NOWs," authorized by the and broker/dealer money market mutual funds. Excludes individual retirement Depository Institutions Deregulation committee to be offered beginning Jan. 5, accounts (IRA) and Keogh balances at depository institutions and money market 1983. funds. Also excludes all balances held by U.S. commercial banks, money market 6. Sum of overnight RPs and overnight Eurodollars, money market fund funds (general purpose and broker/dealer), foreign governments and commercial balances (general purpose and broker/dealer), MMDAs, and savings and small banks, and the U.S. government. Also subtracted is a consolidation adjustment time deposits, less the consolidation adjustment that represents the estimated that represents the estimated amount of demand deposits and vault cash held by amount of demand deposits and vault cash held by thrift institutions to service thrift institutions to service their time and savings deposits. their time and savings deposits liabilities. M3: M2 plus large-denomination time deposits and term RP liabilities (in 7. Sum of large time deposits, term RPs and term Eurodollars of U.S. amounts of $100,000 or more) issued by commercial banks and thrift institutions, residents, money market fund balances (institution-only), less a consolidation term Eurodollars held by U.S. residents at foreign branches of U.S. banks adjustment that represents the estimated amount of overnight RPs and Eurodolworldwide and at all banking offices in the United Kingdom and Canada, and lars held by institution-only money market funds. balances in both taxable and tax-exempt, institution-only money market mutual 8. Savings deposits exclude MMDAs. funds. Excludes amounts held by depository institutions, the U.S. government, 9. Small-denomination time deposits—including retail RPs— are those issued money market funds, and foreign banks and official institutions. Also subtracted is in amounts of less than $100,000. All individual retirement accounts (IRA) and a consolidation adjustment that represents the estimated amount of overnight RPs Keogh accounts at commercial banks and thrifts are subtracted from small time and Eurodollars held by institution-only money market mutual funds. deposits. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 10. Large-denomination time deposits are those issued in amounts of $100,000 Treasury securities, commercial paper and bankers acceptances, net of money pr 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 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr Feb. Mar. Apr. May June July Seasonally adjusted DEBITS TO Demand deposits2 1 All insured banks 109,642.3 128,440.8 154,556.0 179,139.6 182,841.8 192,847.2 189,819.7 187,035.1 188,874.2 2 Major New York City banks 47,769.4 57,392.7 70,445.1 85,298.6 89,350.3 95,699.5 87,846.7 89,201.2 91,040.8 3 Other banks 61,873.1 71,048.1 84,110.9 93,841.0 93,491.5 97,147.7 101,973.0 97,833.9 97,833.4 4 ATS-NOW accounts3 1,405.5 1,588.7 1,920.8 2,193.5 2,266.0 2,088.7 2,255.6 2,188.0 2,320.1 5 Savings deposits4 741.4 633.1 539.0 364.6 356.7 385.2 389.7 382.6 417.4 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 379.7 434.4 496.5 560.8 566.0 593.6 569.7 553.3 556.4 7 Major New York City banks 1,528.0 1,843.0 2,168.9 2,473.8 2,517.7 2,635.1 2,457.8 2,504.5 2,417.2 8 Other banks 240.9 268.6 301.8 329.3 325.1 336.6 342.8 323.5 324.2 9 ATS-NOW accounts3 15.6 15.8 16.7 17.2 17.7 16.0 17.0 16.2 16.8 10 Savings deposits4 5.4 5.0 4.5 3.0 2.9 3.1 3.1 3.0 3.2 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 109,517.6 128,059.1 154,108.4 161,655.6 179,715.2 195,373.5 184,827.4 188,924.1 198,657.9 12 Major New York City banks 47,707.4 57,282.4 70,400.9 77,376.9 87,757.0 95,408.5 85,189.6 91,315.2 96,686.1 N Other banks 64,310.2 70,776.9 83,707.8 84,278.6 91,958.3 99,965.0 99,637.8 97,608.9 101,971.8 14 ATS-NOW accounts3 1,397.0 1,579.5 1,903.4 2,065.3 2,349.0 2,393.2 2,256.6 2,356.3 2,240.4 15 MMDA5 567.4 848.8 1,179.0 1,334.9 1,600.4 1,638.8 1,557.9 1,697.2 1,575.9 16 Savings deposits4 742.0 632.9 538.7 331.1 362.3 418.7 377.8 385.9 419.9 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 379.9 433.5 497.4 520.0 569.5 600.1 569.4 564.1 587.8 18 Major New York City banks 1,510.0 1,838.6 2,191.1 2,314.0 2,494.1 2,661.7 2,487.0 2,570.0 2,620.6 19 Other banks 240.5 267.9 301.6 303.8 328.0 345.0 343.2 326.0 338.7 20 ATS-NOW accounts3 15.5 15.7 16.6 16.4 18.3 17.9 17.1 17.4 16.3 21 MMDA5 2.8 3.5 3.8 4.0 4.7 4.8 4.5 4.8 4.4 22 Savings deposits4 5.4 5.0 4.5 2.7 3.0 3.4 3.0 3.0 3.2 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSAs that were available through June states and political subdivisions. 1977. Historical data for ATS-NOW and savings deposits are available back to 3. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- July 1977. Back data are available on request from the Banking Section, Division counts authorized for automatic transfer to demand deposits (ATS). ATS data of Research and Statistics, Board of Governors of the Federal Reserve System, availability starts with December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts, MMDA and special club accounts, such These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • November 1986 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1985 1986 CCaatteeggoorryy Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug. Seasonally adjusted 1 Total loans and securities2 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 2,007.7 2 U.S. government securities 275.5 274.2 276.0 273.1 268.2 273.6 269.5 270.0 274.1 274.8 285.4 290.9 3 Other securities 153.6 157.3 163.3 177.6 192.5 188.1 183.3 182.1 181.9 183.6 186.1 192.3 4 Total loans and leases2 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 1,524.5 5 Commercial and industrial 492.1 492.7 495.7 499.5 502.1 502.4 506.1 507.8 506.7 508.7 508.7 510.4 6 Bankers acceptances held3.. 4.9 4.9 4.9 4.9 4.9 4.8 4.9 5.2 5.6 6.1 5.8 5.9 7 Other commercial and industrial 487.1 487.8 490.7 494.7 497.2 497.6 501.2 502.6 501.0 502.6 502.8 504.4 8 U.S. addressees4 478.3 479.4 482.4 486.0 488.0 488.4 491.3 492.7 490.6 493.1 493.8 495.4 9 Non-U.S. addressees4.... 8.8 8.4 8.3 8.7 9.3 9.2 9.9 9.8 10.5 9.5 9.0 9.1 10 Real estate 409.5 414.0 418.0 422.4 427.1 431.4 436.1 440.7 446.4 450.7 455.9 461.4 11 Individual 285.4 287.5 289.7 291.5 294.6 297.4 299.5 301.1 303.0 304.5 305.6 306.9 12 Security 39.7 39.2 39.8 40.1 44.1 43.4 50.4r 48.(K 46.4 42.5 44.8 44.2 13 Nonbank financial institutions 31.5 31.3 32.0 32.6 32.6 31.9 32.3 32.4 33.3 34.7 34.2 34.4 14 Agricultural 38.3 37.9 37.1 36.3 35.9 35.4 34.9 34.6 34.1 33.7 33.3 33.3 15 State and political subdivisions 48.8 49.3 50.0 52.8 60.5 60.3 60.2 59.8 59.5 59.4 59.1 59.4 16 Foreign banks 9.6 9.3 9.0 9.1 9.1 9.2 9.2 9.2 9.3 9.5 9.5 9.3 17 Foreign official institutions ... 6.5 6.6 6.7 6.9 7.0 7.0 6.8 5.3 5.1 6.4 6.5 6.5 18 Lease financing receivables... 18.1 18.3 18.4 18.8 19.4 19.6 19.8 19.9 19.8 20.0 20.0 20.2 19 All other loans 38.5 38.0 40.3 39.6 36.8 35.7 36.5 37.3 37.9 35.4 35.8 38.5 Not seasonally adjusted 20 Total loans and securities2 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 1,999.8 21 U.S. government securities 274.1 270.3 273.7 271.0 267.7 275.0 273.2 274.0 275.4 276.2 285.3 289.1 22 Other securities 153.6 156.8 163.3 178.7 193.8 188.9 183.9 181.8 182.2 182.5 183.9 192.1 23 Total loans and leases2 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 1,518.7 24 Commercial and industrial.... 491.4 492.0 494.8 501.5 501.4 500.1 506.9 510.0 508.5 509.4 508.6 508.3 25 Bankers acceptances held3.. 4.8 4.8 5.0 5.2 4.9 4.7 5.0 5.2 5.5 66..00 66..00 55..99 26 Other commercial and industrial 486.6 487.2 489.7 496.4 496.5 495.4 501.9 504.9 503.0 503.4 502.6 502.4 2277 U.S. addressees4 477.5 478.4 481.0 487.3 487.3 486.3 492.7 495.4 493.3 494.0 493.3 493.1 28 Non-U.S. addressees4 9.1 8.8 8.8 9.0 9.2 9.1 9.2 9.5 9.7 9.4 9.3 9.4 29 Real estate 410.5 415.2 419.2 423.3 427.3 430.6 434.9 439.5 445.2 450.2 455.8 461.6 30 Individual 286.7 289.0 291.0 294.8 297.0 296.3 296.8 298.6 301.1 303.1 304.9 307.2 31 Security 37.5 38.6 41.0 45.4 46.8 42.6 49.5 48.5' 45.6 4422..55 4433..00 4411..33 32 Nonbank financial institutions 31.7 31.1 32.1 33.4 32.9 31.3 31.7 32.2 33.1 34.6 34.3 34.6 3333 Agricultural 39.2 38.5 37.2 36.0 35.2 34.5 34.0 33.9 34.0 3344..22 3344..11 3344..00 34 State and political subdivisions 48.8 49.3 50.0 52.8 60.5 60.3 60.2 59.8 59.5 59.4 59.1 59.4 35 Foreign banks 9.7 9.5 9.3 9.5 9.3 9.3 9.1 9.0 9.1 9.2 9.4 9.1 36 Foreign official institutions ... 6.5 6.6 6.7 6.9 7.0 7.0 6.8 5.3 5.1 6.4 6.5 6.5 37 Lease financing receivables... 18.1 18.2 18.3 18.8 19.6 19.8 19.8 19.9 19.9 20.0 20.0 20.1 38 All other loans 37.8 36.7 39.1 40.5 36.3 36.5 37.4 38.1 37.9 37.7 36.5 36.3 1. Data are prorated averages of Wednesday estimates for domestically char- 2. Excludes loans to commercial banks in the United States. tered insured banks, based on weekly sample reports and quarterly universe 3. Includes nonfinancial commercial paper held. reports. For foreign-related institutions, data are averages of month-end estimates 4. United States includes the 50 states and the District of Columbia. based on weekly reports from large U.S. agencies and branches and quarterly NOTE. These data also appear in the Board's G.7 (407) release. For address, see reports from all U.S. agencies and branches, New York investment companies inside front cover. majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars 1985 1986 SSoouurrccee Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Total nondeposit funds 1 Seasonally adjusted2 114.8 118.8 122.3 128.2 131.7 131.7 141.2 134.1' 135.7 132.7' 136.C 137.7 2 Not seasonally adjusted 113.2 117.4 123.4 127.9 131.8 134.4 143.7 135.0^ 137.9' 131.4' 132.1' 136.7 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 143.6 144.3 149.4 154.1 151.6 152.7 160.6 160.4' 157.9' 157.1' 166.2' 168.0 4 Not seasonally adjusted 142.0 142.9 150.5 153.7 151.6 155.3 163.1 161.3' 160.0 155.8' 162.3' 166.9 5 Net balances due to foreign-related institutions, not seasonally adjusted -28.8 -25.5 -27.2 -25.9 -19.9 -21.0 -19.4 -26.3 -22.2' -24.5' -30.2 -30.2 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -30.7 -28.6 -30.2 -31.6 -28.0 -25.8 -26.5 -30.2 -29.3 -30.5' -33.8 -31.2 7 Gross due from balances 74.7 74.2 74.1 76.3 74.3 69.4 71.7 75.2' 72.9 72.2 73.9 75.2 8 Gross due to balances 44.0 45.5 43.9 44.7 46.4 43.6 45.2 45.1 43.6 41.7 40.1 44.0 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 1.9 3.2 3.1 5.7 8.1 4.8 7.1' 3.9 7.2 6.0 3.6 1.0 10 Gross due from balances 55.9 55.2 55.9 56.7 57.6 60.0 60.7' 62.5 60.CK 62.8 64.2 66.2 11 Gross due to balances 57.8 58.4 58.9 62.5 65.7 64.8 67.8 66.4 67.1 68.8 67.8 67.2 Security RP borrowings 12 Seasonally adjusted® 85.9 85.6 85.9 89.4 87.6 89.5 89.7 89.7 89.0 89.2 95.7 96.3 13 Not seasonally adjusted 84.3 84.2 87.0 89.0 87.7 92.2 92.2 90.6 91.2 88.0 91.8 95.3 U.S. Treasury demand balances7 14 Seasonally adjusted 14.9 4.7 13.5 17.5 19.0 21.1 15.7 17.4 21.3 18.5 14.7' 13.1 15 Not seasonally adjusted 16.8 5.4 7.9 14.6 24.0 24.2 15.7 17.8 21.8 16.1 16.8' 11.0 Time deposits, $100,000 or more8 16 Seasonally adjusted 330.8 333.9 335.9 337.6 349.4 351.9 347.7 346.9 340.4 339.8 338.4' 342.6 17 Not seasonally adjusted 332.7 336.3 337.5 339.4 348.3 350.7 348.3 343.5 339.6 338.1 337.3' 342.9 1. Commercial banks are those in the 50 states and the District of Columbia 3. Other borrowings are borrowings on any instrument, such as a promissory with national or state charters plus agencies and branches of foreign banks, New note or due bill, given for the purpose of borrowing money for the banking York investment companies majority owned by foreign banks, and Edge Act business. This includes borrowings from Federal Reserve Banks and from foreign corporations owned by domestically chartered and foreign banks. banks, term federal funds, overdrawn due from bank balances, loan RPs, and Data for lines 1-4 and 12-17 have been revised in light of benchmarking and participations in pooled loans. revised seasonal adjustment. 4. Averages of daily figures for member and nonmember banks. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 5. Averages of daily data. nonbanks and not seasonally adjusted net Eurodollars. Includes averages of 6. Based on daily average data reported by 122 large banks. Wednesday data for domestically chartered banks and averages of current and 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at previous month-end data for foreign-related institutions. commercial banks. Averages of daily data. 8. Averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • November 1986 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1985 1986 AAccccoouunntt Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug. ALL COMMERCIAL BANKING INSTITUTIONS1 1 Loans and securities 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 2,134.0 2,154.4 2 Investment securities 402.4 410.5 420.4 432.5 432.8 427.2 429.5 430.9 432.6 445.7 455.1 3 U.S. government securities 252.9 254.9 253.9 251.9 255.1 253.7 255.8 257.7 259.6 269.6 272.2 4 Other 149.6 155.6 166.5 180.6 177.7 173.5 173.6 173.2 173.0 176.1 183.0 5 Trading account assets 25.0 32.0 31.1 30.1 34.0 30.1 27.8 27.0 27.4 28.7 29.3 6 Total loans 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 1,659.6 1,670.0 7 Interbank loans 132.4 149.0 150.6 140.4 143.5 146.0 155.7 146.2 139.2 148.6 149.4 8 Loans excluding interbank 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 1,511.0 1,520.6 9 Commercial and industrial 491.7 495.8 500.2 496.7 501.8 508.5 510.5 506.2 512.3 507.3 510.1 10 Real estate 416.7 420.2 423.7 428.7 431.5 435.9 441.7 446.4 451.4 457.6 463.2 11 Individual 290.3 292.0 296.0 297.4 296.4 296.9 300.4 301.1 304.0 305.6 308.4 12 All other 227.2 236.2 246.7 239.4 238.7 246.9 247.8 243.6 238.7 240.5 238.8 13 Total cash assets 191.5 209.0 213.3 187.3 193.7 198.1 209.9 221.0 196.0 206.2 205.8 14 Reserves with Federal Reserve Banks 19.5 20.4 27.6 21.9 26.2 29.1 25.5 30.2 27.9 28.2 27.9 15 Cash in vault 22.6 21.4 22.2 23.0 22.7 21.8 22.3 23.9 23.0 23.3 23.7 16 Cash items in process of collection ... 68.1 82.1 79.5 64.2 66.9 68.8 80.7 84.6 67.3 72.1 73.5 17 Demand balances at U.S. depository institutions 31.5 35.8 36.0 31.3 31.8 31.1 34.7 36.8 32.0 33.8 33.6 18 Other cash assets 49.8 49.4 48.0 47.0 46.1 47.4 46.7 45.5 45.8 48.7 47.1 19 Other assets 189.2 197.1 201.9 187.0 186.5 195.3 207.0 195.9 196.6 196.6 196.2 20 Total assets/total liabilities and capital ... 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 2,536.7 2,556.4 21 Deposits 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 1,819.5 1,833.6 22 Transaction deposits 491.7 522.2 536.9 488.8 492.1 502.5 540.7 542.7 523.3 540.0 544.2 23 Savings deposits 445.8 450.4 452.0 454.2 457.2 462.0 467.8 477.3 482.4 490.8 497.7 24 Time deposits 776.2 779.1 783.6 796.5 797.1 798.3 789.9 787.5 786.3 788.7 791.7 25 Borrowings 313.6 356.1 367.8 364.4 374.7 373.1 390.7 367.4 366.8 379.2 377.3 26 Other liabilities 173.7 167.9 175.8 167.6 169.1 179.3 170.4 173.1 168.5 168.6 174.7 27 Residual (assets less liabilities) 165.5 166.0 167.7 168.2 168.8 169.7 170.8 170.3 170.9 169.4 170.8 MEMO 28 U.S. government securities (including trading account) 268.6 274.8 269.7 269.8 278.4 273.7 274.0 275.1 276.5 288.8 289.8 29 Other securities (including trading account) 158.8 167.7 181.8 192.8 188.4 183.6 183.3 182.8 183.5 185.6 194.6 DOMESTICALLY CHARTERED COMMERCIAL BANKS2 30 Loans and securities 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 2,014.0 2,029.4 31 Investment securities 391.1 399.5 409.9 421.1 420.8 416.0 416.1 417.1 419.6 432.5 440.2 32 U.S. government securities 247.4 250.1 249.0 247.0 249.6 248.5 248.8 250.2 253.1 263.2 264.5 33 Other 143.8 149.4 160.9 174.1 171.2 167.5 167.2 166.9 166.5 169.4 175.7 34 Trading account assets 25.0 32.0 31.1 30.1 34.0 30.1 27.8 27.0 27.4 28.7 29.3 35 Total loans 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 1,559.8 36 Interbank loans 108.7 124.1 123.8 115.8 115.8 120.2 129.3 123.3 117.3 122.7 123.1 37 Loans excluding interbank 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 1,436.7 38 Commercial and industrial 439.3 441.8 445.3 442.5 446.2 448.2 452.3 449.8 452.5 448.4 448.4 39 Real estate 411.5 415.0 418.4 423.6 426.4 430.7 436.3 440.7 445.8 451.9 457.3 40 Individual 290.0 291.7 295.7 297.1 296.2 296.6 300.1 300.8 303.6 305.3 308.1 41 All other 213.8 222.0 230.1 224.1 224.7 230.7 231.4 226.7 223.9 224.6 222.9 42 Total cash assets 175.7 193.4 197.2 171.1 179.1 182.7 194.3 205.8 180.1 187.8 189.3 43 Reserves with Federal Reserve Banks 18.3 19.2 25.8 21.0 25.5 28.4 24.4 28.7 26.3 27.2 26.6 44 Cash in vault 22.6 21.4 22.2 23.0 22.6 21.7 22.2 23.8 22.9 23.2 23.7 45 Cash items in process of collection ... 67.9 81.8 79.3 63.8 66.5 68.4 80.3 84.2 66.7 71.7 73.1 46 Demand balances at U.S. depository institutions 30.1 33.9 34.3 29.4 30.1 29.4 33.0 35.1 30.2 32.0 31.9 47 Other cash assets 36.8 37.1 35.7 34.0 34.3 34.7 34.3 34.0 34.0 33.6 34.1 48 Other assets 141.1 146.2 150.0 137.8 134.6 144.0 150.3 142.8 144.1 143.2 141.7 49 Total assets/total liabilities and capital ... 2,196.3 2,265.6 2,301.6 2,263.1 1,111.% 2, ' 2 99.1 2,337.9 2,334.0 2,314.1 2,345.0 2,360.3 50 Deposits 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 1,768.0 1,779.9 51 Transaction deposits 485.0 515.3 529.5 481.6 484.8 495.0 533.1 535.3 515.5 532.1 536.1 52 Savings deposits 444.1 448.6 450.3 452.4 455.3 460.1 465.8 475.2 480.3 488.7 495.5 53 Time deposits 737.3 740.7 744.7 755.7 758.1 758.1 750.1 748.1 745.6 747.2 748.2 54 Borrowings 252.2 285.0 295.7 298.0 304.9 304.8 309.1 294.2 293.5 300.5 295.5 55 Other liabilities 115.4 113.0 116.9 110.5 109.0 114.6 112.0 113.9 111.5 110.3 117.3 56 Residual (assets less liabilities) 162.4 162.9 164.6 165.0 165.6 166.5 167.7 167.2 167.8 166.2 167.7 1. Commercial banking institutions include insured domestically chartered NOTE. Figures are partly estimated. They include all bank-premises subsidiarcommercial banks, branches and agencies of foreign banks, Edge Act and ies and other significant majority-owned domestic subsidiaries. Loan and securi- Agreement corporations, and New York State foreign investment corporations. ties data for domestically chartered commercial banks are estimates for the last 2. 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 July 2 July 9 July 16 July 23 July 3C Aug. 6 Aug. 13 Aug. 20 Aug. 27 1 Cash and balances due from depository institutions 105,927 99,121 106,323 91,325 98,047 93,706 91,845 95,907 99,873 2 Total loans, leases and securities, net 951,248' 943,886 951,829 939,169 943,513 950,745 945,387 949,738 950,834 3 U.S. Treasury and government agency 95,609 98,158 103,198 104,315 103,182 105,087 101,746 102,145 102,924 4 Trading account 20,015 21,058 25,319 25,794 22,545 24,614 21,326 21,028 20,937 5 Investment account, by maturity 75,594 77,100 77,878 78,521 80,638 80,473 80,420 81,118 81,987 6 One year or less 18,496 18,257 18,044 17,756 17,999 17,510 17,563 17,368 17,641 7 Over one through five years 35,903 36,764 36,924 36,932 37,644 38,671 38,214 39,237 39,078 8 Over five years 21,196 22,079 22,910 23,833 24,995 24,292 24,643 24,512 25,268 9 Other securities 67,676' 66,893 68,170 68,962 69,450 70,818 71,633 72,193 74,154 10 Trading account 5,334' 4,380 5,311 5,543 5,435 5,894 6,243 6,436 7,131 11 Investment account 62,343 62,513 62,859 63,418 64,014 64,924 65,390 65,757 67,023 12 States and political subdivisions, by maturity 55,014 55,096 55,252 55,659 56,003 56,577 56,996 57,248 58,301 13 One year or less 7,964 7,982 8,014 8,181 8,216 8,605 8,805 8,886 9,646 14 Over one year 47,050 47,114 47,238 47,478 47,788 47,973 48,191 48,361 48,654 15 Other bonds, corporate stocks, and securities 7,329 7,416 7,606 7,759 8,011 8,346 8,394 8,510 8,722 16 Other trading account assets 5,925' 5,884 5,777 4,655 4,363 4,480 4,145 4,426 4,914 17 Federal funds sold1 69,160' 62,482' 65,191' 53,894' 59,056 58,673 58,934 58,976 55,949 18 To commercial banks 45,004 38,787 40,227 31,876 35,992 36,615 35,764 38,916 35,446 19 To nonbank brokers and dealers in securities 15,059' 14,837' 17,972' 15,277' 15,644 15,450 15,740 12,585 13,739 20 To others 9,097 8,857 6,992 6,741 7,420 6,607 7,430 7,474 6,764 21 Other loans and leases, gross2 733,603' 731,157' 730,198' 728,026' 728,212 732,654 729,882 732,979 733,957 22 Other loans, gross2 717,496' 715,058' 714,227' 712,002' 712,166 716,581 713,773 716,842 717,760 23 Commercial and industrial2 260,006' 259,046' 257,521' 256,644' 256,483 258,229 256,312 256,086 257,017 24 Bankers acceptances and commercial paper 2,544 2,579 2,269 2,184 2,215 2,324 2,228 2,148 2,071 25 All other 257,462' 256,466' 255,252' 254,459' 254,268 255,905 254,084 253,938 254,947 26 U.S. addressees 253,450' 252,485' 251,232' 250,470' 250,296 251,866 250,028 249,870 250,892 27 Non-U.S. addressees 4,011 3,982 4,020 3,989 3,972 4,038 4,056 4,068 4,055 28 Real estate loans2 192,383' 192,695' 193,738' 193,791' 194,171 194,740 195,998 196,668 196,897 29 To individuals for personal expenditures 136,181 136,063 136,580 136,894 137,308 137,308 137,646 138,091 138,605 30 To depository and financial institutions 46,407' 46,97C 47,051' 46,064' 45,565 46,636 46,083 47,274 46,660 31 Commercial banks in the United States 14,486' 14,247' 14,822' 14,916 14,839 15,379 15,098 15,319 14,894 32 Banks in foreign countries 5,856 5,886 5,862 5,577 5,151 5,290 4,665 4,852 5,031 33 Nonbank depository and other financial institutions 26,065' 26,837' 26,368' 25,570' 25,575 25,967 26,319 27,103 26,735 34 For purchasing and carrying securities 18,813 17,364 17,651 17,394 16,635 17,554 16,174 16,844 16,712 35 To finance agricultural production 6,284' 6,198 6,144 6,151 6,124 6,123 6,144 6,093 6,042 36 To states and political subdivisions 36,047' 35,865' 36,008' 36,096' 36,088 36,135 36,172 36,207 36,340 37 To foreign governments and official institutions 3,397 3,345 3,263 3,143 3,227 3,312 3,249 3,254 3,100 38 All other 17,980 17,511 16,270 15,828 16,566 16,544 15,995 16,325 16,386 39 Lease financing receivables 16,106 16,098 15,971 16,023 16,046 16,073 16,108 16,137 16,197 40 LESS: Unearned income 4,901 4,907 4,917 4,926 4,924 4,895 4,903 4,907 4,916 41 Loan and lease reserve2 15,824' 15,780 15,788 15,757 15,827 16,071 16,050 16,074 16,149 42 Other loans and leases, net2 712,878' 710,470' 709,492' 707,343' 707,461 711,687 708,929 711,998 712,892 43 All other assets 132,378' 128,39c 128,196' 126,374 125,492 127,103 126,615 125,128 124,348 44 Total assets 1,189,554' 1,171,397' 1,186,348' 1,156,868 1,167,052 1,171,554 1,163,848 1,170,773 1,175,055 45 Demand deposits 237,852 221,962' 228,164' 209,262' 215,803 215,883 210,136 217,200 216,839 46 Individuals, partnerships, and corporations 179,905 170,186' 173,556' 160,352' 165,733 164,983 164,739 164,620 163,596 47 States and political subdivisions 5,758 5,108 5,407 4,835' 5,105 5,412 4,417 5,329 5,324 48 U.S. government 1,637 2,966 2,921 2,430' 2,839 2,158 1,092 3,902 2,588 49 Depository institutions in United States 28,422 24,686' 27,460 23,917 24,116 24,991 22,954 24,357 24,684 50 Banks in foreign countries 6,521 6,889 6,545 6,689 6,058 6,671 6,192 6,263 6,712 51 Foreign governments and official institutions 895 1,143 1,033 822 945 885 748 784 715 52 Certified and officers' checks 14,713 10,985 11,241 10,216 11,008 10,783 9,993 11,945 13,220 53 Transaction balances other than demand deposits 47,199 47,363 47,031 46,414 46,428 48,801 47,998 48,215 47,932 54 Nontransaction balances 494,287 493,909' 495,465' 495,334' 495,499 497,109 497,341 498,826 499,064 55 Individuals, partnerships and corporations 457,833 457,788' 459,056' 458,440' 458,620 459,998 459,096 460,232 460,330 56 States and political subdivisions 24,255 24,080 24,278 24,370 24,420 24,726 25,399 25,705 25,790 57 U.S. government 799 806 806 813 807 817 811 832 832 58 Depository institutions in the United States 10,103 9,957 10,047 10,441 10,390 10,292 10,777 10,816 10,866 59 Foreign governments, official institutions and banks 1,297 1,279 1,279 1,269 1,263 1,275 1,258 1,241 1,245 60 Liabilities for borrowed money 246,928' 245,670' 250,766' 242,176' 245,768 248,006 245,884 241,436 241,759 61 Borrowings from Federal Reserve Banks 481 152 1,470 112 185 150 216 200 192 62 Treasury tax-and-loan notes 11,884 8,551' 7,814' 11,510' 12,293 3,201 4,921 3,294 5,622 63 All other liabilities for borrowed money3 234,563' 236,968' 241,481' 230,554' 233,290 244,654 240,747 237,943 235,945 64 Other liabilities and subordinated note and debentures 81,548' 80,331' 83,031' 81,794' 81,803 79,182 79,639 82,455 86,915 65 Total liabilities 1,107,814' 1,089,236 1,104,457 1,074,980' 1,085,301 1,088,981 1,080,998 1,088,132 1,092,509 66 Residual (total assets minus total liabilities)4 81,740' 82,161' 81,891' 81,889' 81,750 82,573 82,849 82,640 82,546 MEMO 67 Total loans and leases (gross) and investments adjusted5 912,483' 911,539' 917,486 913,060 913,433 919,718 915,478 916,484 921,559 68 Total loans and leases (gross) adjusted2-5 743,272' 740,604' 740,340 735,128 736,438 739,332 737,954 737,720 739,567 69 Time deposits in amounts of $100,000 or more 152,518 151,734 152,697 153,252 153,582 154,326 154,308 154,987 155,389 70 Loans sold outright to affiliates—total6 1,386 1,483 1,494 1,659 1,610 1,602 1,613 1,628 1,744 71 Commercial and industrial 859 953 976 967 920 919 952 964 1,054 72 Other 526 531 518 692 691 684 661 664 689 73 Nontransaction savings deposits (including MMDAs) 209,167 209,766 210,564' 210,166' 209,314 211,386 211,784 212,964 212,975 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 • November 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 July 2 July 9 July 16 July 23 July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 1 Cash and balances due from depository institutions 26,723 28,072 28,146 23,242 27,006 24,443 21,513 26,721 26,768 2 Total loans, leases and securities, net1 203,780 199,895 202,334 196,438 199,965 199,716 198,826 200,914 201,286 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 10,128 10,139 10,323 10,421 11,026 11,531 12,115 11,525 10,728 6 One year or less 1,055 1,054 1,086 1,074 1,138 993 1,142 1,265 1,215 7 Over one through five years 5,295 5,264 5,488 5,488 5,626 5,868 5,897 6,652 5,731 8 Over five years 3,778 3,820 3,750 3,859 4,262 4,670 5,075 3,608 3,782 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 15,000 15,048 15,094 15,248 15,362 15,662 15,813 15,862 16,240 12 States and political subdivisions, by maturity 12,994 13,039 13,054 13,169 13,266 13,448 13,576 13,614 13,958 13 One year or less 1,534 1,483 1,485 1,536 1,562 1,655 1,716 1,666 1,732 14 Over one year 11,461 11,556 11,569 11,633 11,705 11,792 11,860 11,948 12,226 15 Other bonds, corporate stocks and securities 2,006 2,009 2,039 2,079 2,095 2,215 2,237 2,248 2,281 16 Other trading account assets2 0 0 0 0 0 0 0 0 0 Loans and leases 17 Federal funds sold3 31,623 28,483 31,796 25,834 29,585 27,122 27,104 28,599 28,007 18 To commercial banks 16,304 13,473 15,835 12,151 14,393 13,397 13,534 17,010 15,436 19 To nonbank brokers and dealers in securities 8,068 8,103 10,458 8,011 8,798 8,572 7,907 5,539 7,120 20 To others 7,251 6,907 5,503 5,671 6,394 5,153 5,663 6,051 5,450 21 Other loans and leases, gross 152,751 151,965 150,910 150,736 149,832 151,319 149,736 150,869 152,291 22 Other loans, gross 149,677 148,876 147,829 147,636 146,716 148,182 146,590 147,705 149,112 23 Commercial and industrial 57,011 56,056 56,040 55,550 55,760 56,572 56,263 55,939 57,054 24 Bankers acceptances and commercial paper 499 567 480 473 501 569 552 468 449 25 All other 56,512 55,488 55,560 55,076 55,258 56,003 55,710 55,471 56,605 26 U.S. addressees 56,088 55,078 55,146 54,671 54,855 55,571 55,218 55,020 56,178 27 Non-U.S. addressees 425 410 414 405 403 432 492 452 427 28 Real estate loans 32,383 32,522 32,609 32,725 32,582 32,685 32,699 32,974 33,059 29 To individuals for personal expenditures 18,552 18,786 18,843 18,890 18,966 19,042 19,114 19,192 19,273 30 To depository and financial institutions 16,353 16,890 16,781 16,714 16,137 16,425 15,892 16,855 16,724 31 Commercial banks in the United States 6,928 6,795 7,008 7,195 6,875 7,117 7,007 7,472 6,832 32 Banks in foreign countries 2,387 2,749 2,883 2,656 2,221 2,360 1,798 2,077 2,431 33 Nonbank depository and other financial institutions 7,037 7,346 6,889 6,864 7,041 6,947 7,087 7,305 7,461 34 For purchasing and carrying securities 9,645 9,132 8,854 9,270 8,358 8,934 8,172 8,672 8,457 35 To finance agricultural production 288 275 275 278 280 276 287 278 290 36 To states and political subdivisions 9,054 8,892 8,860 8,844 8,746 8,795 8,798 8,826 8,791 37 To foreign governments and official institutions 1,008 956 856 738 830 905 844 851 726 38 All other 5,383 5,368 4,710 4,626 5,056 4,548 4,523 4,119 4,736 39 Lease financing receivables 3,074 3,089 3,081 3,101 3,116 3,137 3,146 3,164 3,179 40 LESS: Unearned income 1,446 1,456 1,463 1,472 1,474 1,468 1,474 1,476 1,480 41 Loan and lease reserve 4,277 4,285 4,326 4,329 4,366 4,449 4,467 4,465 4,500 42 Other loans and leases, net 147,028 146,224 145,122 144,936 143,992 145,401 143,795 144,928 146,311 43 All other assets4 75,232 72,029 76,002 74,399 69,718 74,192 70,418 68,601 68,594 44 Total assets 305,735 299,996 306,483 294,079 296,689 298,350 290,757 296,236 296,648 Deposits 45 Demand deposits 64,085 59,054 61,319 55,823 58,093 55,096 52,379 58,756 58,904 46 Individuals, partnerships, and corporations 41,974 39,945 41,026 38,014 40,426 36,894 35,938 38,829 38,154 47 States and political subdivisions 1,002 811 986 643 606 712 601 748 897 48 U.S. government 218 546 601 474 658 344 151 674 495 49 Depository institutions in the United States 7,113 5,818 7,381 5,856 5,482 6,086 5,325 6,193 6,232 50 Banks in foreign countries 5,142 5,491 5,189 5,359 4,780 5,369 4,932 5,014 5,438 51 Foreign governments and official institutions 750 999 814 593 788 744 609 630 564 52 Certified and officers' checks 7,886 5,444 5,322 4,883 5,352 4,946 4,823 6,668 7,123 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 5,475 5,480 5,443 5,430 5,462 5,730 5,665 5,681 5,676 54 Nontransaction balances 91,380 91,151 92,150 91,731 91,781 91,824 91,106 92,537 92,351 55 Individuals, partnerships and corporations 83,112 82,971 83,806 83,280 83,326 83,309 82,415 83,793 83,543 56 States and political subdivisions 5,309 5,263 5,258 5,367 5,410 5,480 5,585 5,661 5,712 57 U.S. government 73 74 76 87 88 83 85 84 85 58 Depository institutions in the United States 2,183 2,147 2,313 2,312 2,285 2,271 2,356 2,344 2,370 59 Foreign governments, official institutions and banks 703 696 696 685 672 682 665 655 640 60 Liabilities for borrowed money 84,922 84,979 85,760 80,846 81,581 86,546 82,496 78,557 76,248 61 Borrowings from Federal Reserve Banks 0 0 1,250 0 0 0 0 0 0 62 Treasury tax-and-loan notes 2,827 2,529 2,245 3,479 3,594 632 1,422 800 1,273 63 All other liabilities for borrowed money5 82,096 82,449 82,266 77,366 77,987 85,914 81,074 77,757 74,975 64 Other liabilities and subordinated note and debentures 33,102 32,387 34,997 33,558 33,227 32,212 32,057 33,797 36,649 65 Total liabilities 278,965 273,052 279,669 267,387 270,144 271,408 263,703 269,328 269,827 66 Residual (total assets minus total liabilities)6 26,770 26,944 26,813 26,691 26,546 26,943 27,054 26,908 26,820 MEMO 67 Total loans and leases (gross) and investments adjusted17 186,271 185,368 185,280 182,893 184,536 185,120 184,227 182,373 184,998 68 Total loans and leases (gross) adjusted7 161,142 160,180 159,863 157,224 158,148 157,927 156,299 154,986 158,030 69 Time deposits in amounts of $100,000 or more 33,362 33,192 33,911 33,463 33,326 33,480 32,678 33,374 33,229 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 BANKS1 Assets and Liabilities Millions of dollars, Wednesday figures 1986 AAccccoouunntt July 2 July 9 July 16 July 23 July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 1 Cash and due from depository institutions . 9,883 9,420 10,528 9,959 11,169 10,491 9,338 9,994 10,076 2 Total loans and securities 68,664 67,167 67,811 68,438 69,394 67,864 69,569 71,536 72,603 3 U.S. Treasury and govt, agency securities 5,029 4,711 5,076 4,947 4,606 4,677 5,366 5,848 5,435 4 Other securities 4,489 4,546 4,508 4,597 4,659 4,741 4,879 4,997 4,985 5 Federal funds sold2 4,037 3,611 3,237 4,142 4,475 3,081 4,113 3,695 4,404 6 To commercial banks in the United States 3,027 2,740 2,465 3,126 3,540 2,135 3,180 2,823 3,369 7 To others 1,010 870 772 1,016 935 946 933 872 1,034 8 Other loans, gross 55,108 54,299 54,990 54,752 55,654 55,365 55,210 56,996 57,779 9 Commercial and industrial 32,833 32,691 32,947 32,127 32,581' 32,406 32,583 33,793 34,163 10 Bankers acceptances and commercial paper 2,802 2,826 2,660 2,695 3,000 3,048 3,047 2,975 2,993 11 All other 30,031 29,864 30,288 29,432 29,582' 29,358 29,536 30,818 31,170 12 U.S. addressees 27,744 27,496 28,038 27,101 27,184' 27,040 27,172 28,612 28,855 13 Non-U.S. addressees 2,287 2,369 2,249 2,330 2,398 2,317 2,365 2,206 2,315 14 To financial institutions 14,397 14,532 14,448 14,907 15,313' 15,471 15,278 15,454 15,718 15 Commercial banks in the United States . 11,176 11,417 11,356 11,824 12,295' 12,480 12,366 12,531 12,762 16 Banks in foreign countries 1,056 915 885 1,032 1,051 1,110 990 1,116 1,122 17 Nonbank financial institutions 2,165 2,199 2,206 2,050 1,967 1,881 1,921 1,807 1,834 18 To foreign govts, and official institutions .. 584 594 629 637 638 656 617 617 606 19 For purchasing and carrying securities .. 3,186 2,560 3,041 3,032 3,045 2,816 2,661 2,799 3,035 20 All other 4,108 3,922 3,925 4,050 4,076 4,014 4,071 4,333 4,258 21 Other assets (claims on nonreiated parties).. 22,200 22,173 22,427 21,967 22,044 21,881 21,956 21,791 22,162 22 Net due from related institutions 11,537 13,859 12,607 12,867 12,779 15,097 12,744 15,218 13,384 23 Total assets 112,284 111122,,661199 113,373 113,231 115,387 115,333 113,607 118,539 118,226 24 Deposits or credit balances due to other than directly related institutions 32,898 33,018 33,303 32,834 33,853 33,374 33,994 35,144 35,725 25 Transaction accounts and credit balances3 3,454 3,981 3,259 2,918 3,370 2,968 2,810 3,351 3,368 26 Individuals, partnerships, and corporations 1,701 1,865 1,676 1,680 1,928 1,693 1,768 1,814 1,870 27 Other 1,753 2,116 1,583 1,238 1,441 1,275 1,042 1,537 1,497 28 Nontransaction accounts4 29,443 29,037 30,044 29,916 30,484 30,406 31,183 31,794 32,357 29 Individuals, partnerships, and corporations 23,964 23,627 24,590 23,964 24,097 23,888 24,698 25,088 25,904 30 Other 5,480 5,410 5,453 5,952 6,387 6,518 6,485 6,706 6,452 31 Borrowings from other than directly related institutions 47,005 45,722 46,030 45,453 45,863 47,749 44,493 50,230 47,399 32 Federal funds purchased5 25,488 24,459 23,929 23,465 21,595 24,552 21,796 27,019 24,850 33 From commercial banks in the United States 17,460 17,278 16,958 15,026 14,990 16,788 14,583 17,556 17,284 34 From others 8,027 7,181 6,972 8,438 6,605 7,765 7,213 9,462 7,566 35 Other liabilities for borrowed money 21,518 21,263 22,101 21,988 24,268 23,197 22,697 23,211 22,549 36 To commercial banks in the United States 18,739 18,736 19,319 19,190 21,256 20,078 19,850 20,218 20,108 37 To others 2,779 2,527 2,781 2,797 3,012 3,118 2,847 2,993 2,441 38 Other liabilities to nonreiated parties 23,962 23,850 24,036 23,735 23,795 23,652 23,845 23,331 23,990 39 Net due to related institutions 8,418 10,029 10,004 11,208 11,876 10,557 11,275 9,834 11,112 40 Total liabilities 112,284 112,619 113,373 113,231 115,387 115,333 113,607 118,539 118,226 MEMO 41 Total loans (gross) and securities adjusted6 54,460 53,010 53,990 53,488 S S^ 53,249 54,022 56,182 56,472 42 Total loans (gross) adjusted6 44,942 43,752 44,406 43,944 44,294' 43,830 43,777 45,337 46,052 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 DomesticN onfinancial Statistics • November 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 302.7 286.3 298.4 299.3 321.0 307.4 322.4 ?. Financial business 28.0 35.4 32.8 31.7 27.3 27.9 28.1 32.3 31.8 32.3 3 Nonfinancial business 154.8 150.5 161.1 166.3 157.9 164.5 167.2 178.5 166.6 180.0 4 Consumer 86.6 85.9 78.5 81.5 78.9 82.8 82.0 85.5 84.0 86.4 5 Foreign 2.9 3.0 3.3 3.6 3.6 3.7 3.5 3.5 3.4 3.0 6 Other 16.7 17.0 17.8 19.7 18.7 19.5 18.5 21.2 21.6 20.6 Weekly reporting banks 1985 1986 11998811 11998822 11998833 11998844 DDeecc.. DDeecc.. DDeecc.. DDeecc..22 Mar.34 June Sept. Dec. Mar. June 7 All holders—Individuals, partnerships, and corporations 137.5 144.2 146.2 157.1 147.7 151.2 153.6 168.6 159.7 168.5 8 Financial business 21.0 26.7 24.2 25.3 21.9 22.1 22.7 25.9 25.5 25.7 9 Nonfinancial business 75.2 74.3 79.8 87.1 82.3 83.7 85.5 94.5 86.8 93.1 10 Consumer 30.4 31.9 29.7 30.5 30.2 31.0 31.6 33.2 32.6 34.9 11 Foreign 2.8 2.9 3.1 3.4 3.4 3.5 3.3 3.1 3.3 2.9 12 Other 8.0 8.4 9.3 10.9 9.8 10.9 10.5 12.0 11.5 11.9 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 Instrument Dec. Dec. Dec. Dec. Dec. Feb. Mar. Apr. May June July Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 165,829 166,436 187,658 237,586 300,899 297,862 301,110 297,108 309,843 310,711 311,435 Financial companies3 Dealer-placed paper* 2 Total 30,333 34,605 44,455 56,485 78,443 78,136 84,071 83,871 87,423 89,757 90,038 3 Bank-related (not seasonally adjusted) 6,045 2,516 2,441 2,035 1,602 1,475 1,348 1,520 1,575 1,568 1,772 Directly placed paper5 4 Total 81,660 84,393 97,042 110,543 135,504 134,443 135,510 135,801 142,252 142,933 114422,,112211 5 Bank-related (not seasonally adjusted) 26,914 32,034 35,566 42,105 44,778 36,948 37,013 37,835 39,009 40,147 39,067 6 Nonfinancial companies6 53,836 47,437 46,161 70,558 86,952 85,283 81,529 77,436 80,168 78,021 79,276 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 69,226 79,543 78,309 77,121 68,115 67,188 66,882 66,235 66,759 67,080 66,437 Holder 8 Accepting banks 10,857 10,910 9,355 9,811 11,174 12,331 13,061 12,287 12,216 12,789 11,577 9 Own bills 9,743 9,471 8,125 8,621 9,448 10,105 10,722 10,261 10,254 10,641 9,257 10 Bills bought 1,115 1,439 1,230 1,191 1,726 2,225 2,339 2,026 1,962 2,147 22,,332200 Federal Reserve Banks 11 Own account 195 1,480 418 0 0 0 0 0 0 0 0 12 Foreign correspondents 1,442 949 729 671 937 874 877 746 664 896 931 13 Others 56,731 66,204 67,807 66,639 56,004 53,984 52,944 53,202 53,880 53,396 53,929 Basis 14 Imports into United States 14,765 17,683 15,649 17,560 15,147 14,806 13,595 14,464 15,094 15,106 15,601 15 Exports from United States 15,400 16,328 16,880 15,859 13,204 13,115 13,410 13,473 13,574 13,721 13,781 16 All other 39,060 45,531 45,781 43,702 39,765 39,268 39,878 38,299 38,091 38,254 37,056 1. Effective Dec. 1, 1982, there was a break in the commercial paper series. The 4. Includes all financial company paper sold by dealers in the open market. key changes in the content of the data involved additions to the reporting panel, 5. As reported by financial companies that place their paper directly with the exclusion of broker or dealer placed borrowings under any master note investors. agreements from the reported data, and the reclassification of a large portion of 6. Includes public utilities and firms engaged primarily in such activities as bank-related paper from dealer-placed to directly placed. communications, construction, manufacturing, mining, wholesale and retail trade, 2. Correction of a previous misclassification of paper by a reporter has created transportation, and services. a break in the series beginning December 1983. The correction adds some paper to 7. Beginning October 1984, the number of respondents in the bankers acceptnonfinancial and to dealer-placed financial paper. ance survey were reduced from 340 to 160 institutions—those with $50 million or 3. Institutions engaged primarily in activities such as, but not limited to, more in total acceptances. The new reporting group accounts for over 95 percent commercial, savings, and mortgage banking; sales, personal, and mortgage of total acceptances activity. financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Rate Effective Date Rate Month Average rate 11.50 1985—Jan. 15 10.50 1984—Jan. 11.00 1985—May 12.00 May 20 10.00 Feb. 11.00 June 12.50 June 18 9.50 Mar. 11.21 July 13.00 Apr. 11.93 Aug 12.75 1986—Mar. 7 9.00 May. 12.39 Sept 12.50 Apr. 21 8.50 June 12.60 Oct 12.00 July 11 8.00 July, 13.00 Nov 11.75 AAuugg.. 2266 7.50 Aug. 13.00 Dec 11.25 Sept. 12.97 10.75 Oct.. 12.58 1986—Jan Nov. 11.77 Feb Dec. 11.06 Mar Apr 1985—Jan.. 10.61 May Feb. 10.50 June Mar. 10.50 July Apr. 10.50 Aug NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • November 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 May June July Aug. Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 MONEY MARKET RATES 1 Federal funds1-2 9.09 10.22 8.10 6.85 6.92 6.56 6.17 6.32 6.36 6.31 6.38 5.87 2 Discount window borrowing12 3 8.50 8.80 7.69 6.50 6.50 6.16 5.82 6.00 6.00 6.00 6.00 5.50 Commercial paper4-5 3 1-month 8.87 10.05 7.94 6.72 6.79 6.42 6.02 6.28 6.26 6.17 5.95 5.64 4 3-month 8.88 10.10 7.95 6.62 6.71 6.33 5.92 6.21 6.20 6.05 5.82 5.57 5 6-month 8.89 10.16 8.01 6.53 6.63 6.24 5.83 6.16 6.13 5.93 5.73 5.49 Finance paper, directly placed4 5 6 1-month 8.80 9.97 7.91 6.73 6.80 6.42 5.98 6.31 6.27 6.08 5.89 5.61 7 3-month 8.70 9.73 7.77 6.46 6.61 6.31 5.94 6.23 6.20 6.03 5.84 5.62 8 6-month 8.69 9.65 7.75 6.33 6.53 6.24 5.90 6.18 6.16 5.97 5.81 5.59 Bankers acceptances5-6 9 3-month 8.90 10.14 7.92 6.54 6.60 6.23 5.80 6.15 6.07 5.92 5.71 5.44 10 6-month 8.91 10.19 7.96 6.45 6.49 6.14 5.71 6.10 5.97 5.77 5.63 5.38 Certificates of deposit, secondary market7 11 1-month 8.96 10.17 7.97 6.68 6.79 6.43 5.97 6.30 6.21 6.07 5.91 5.63 12 3-month 9.07 10.37 8.05 6.65 6.73 6.37 5.92 6.29 6.21 6.03 5.82 5.57 N 6-month 9.27 10.68 8.25 6.64 6.72 6.36 5.92 6.30 6.21 6.02 5.81 5.57 14 Eurodollar deposits, 3-month8 9.56 10.73 8.28 6.86 6.95 6.54 6.06 6.49 6.38 6.26 6.04 5.79 U.S. Treasury bills5 Secondary market9 15 3-month 8.61 9.52 7.48 6.15 6.21 5.83 5.53 5.83 5.71 5.60 5.48 5.27 16 6-month 8.73 9.76 7.65 6.19 6.27 5.86 5.58 5.85 5.77 5.59 5.50 5.31 17 1-year 8.80 9.92 7.81 6.25 6.32 5.90 5.60 5.91 5.81 5.67 5.52 5.36 Auction average10 18 3-month 8.52 9.57 7.47 6.12 6.21 5.84 5.57 5.86 5.70 5.60 5.64 5.32 19 6-month 8.76 9.80 7.64 6.16 6.28 5.85 5.58 5.89 5.73 5.60 5.65 5.35 20 1-year 8.86 9.91 7.83 6.17 6.59 5.98 5.82 5.82 n.a. n.a. n.a. 5.33 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 9.57 10.89 8.43 6.65 6.73 6.27 5.93 6.27 6.16 6.01 5.85 5.67 22 2-year 10.21 11.65 9.27 7.07 7.18 6.67 6.33 6.65 6.58 6.42 6.21 6.05 23 3-year 10.45 11.89 9.64 7.27 7.41 6.86 6.49 6.89 6.75 6.55 6.35 6.25 24 5-year 10.80 12.24 10.13 7.52 7.64 7.06 6.80 7.10 7.06 6.87 6.70 6.55 25 7-year 11.02 12.40 10.51 7.65 7.75 7.22 7.01 7.29 7.26 7.06 6.88 6.81 26 10-year 11.10 12.44 10.62 7.71 7.80 7.30 7.17 7.41 7.39 7.19 7.04 7.02 27 20-year 11.34 12.48 10.97 7.81 7.69 7.29 7.28 7.47 7.47 7.28 7.18 7.17 28 30-year 11.18 12.39 10.79 7.52 7.57 7.27 7.33 7.50 7.51 7.31 7.22 7.24 Composite13 29 Over 10 years (long-term) 10.84 11.99 10.75 8.02 8.23 7.86 7.72 8.05 7.98 7.69 7.58 7.59 State and local notes and bonds Moody's series14 30 Aaa 8.80 9.61 8.60 7.22 7.49 7.24 7.11 7.40 7.30 7.10 6.95 6.80 31 Baa 10.17 10.38 9.58 7.84 8.14 7.95 7.81 8.10 8.10 7.80 7.65 7.40 32 Bond Buyer series15 9.51 10.10 9.11 7.54 7.87 7.51 7.21 7.54 7.53 7.33 7.06 6.93 Corporate bonds Seasoned issues16 33 All industries 12.78 13.49 12.05 9.69 9.73 9.52 9.44 9.55 9.55 9.47 9.38 9.35 34 Aaa 12.04 12.71 11.37 9.09 9.13 8.88 8.72 8.88 8.85 8.74 8.66 8.62 35 Aa 12.42 13.31 11.82 9.43 9.49 9.28 9.22 9.34 9.33 9.24 9.16 9.16 36 A 13.10 13.74 12.28 9.94 9.96 9.76 9.64 9.71 9.71 9.65 9.60 9.57 37 Baa 13.55 14.19 12.72 10.29 10.34 10.16 10.18 10.28 10.29 10.26 10.12 10.04 38 A-rated, recently-offered utility bonds17 12.73 13.81 12.06 9.50 9.65 9.57 9.51 9.69 9.60 9.49 9.45 9.32 MEMO: Dividend/price ratio18 39 Preferred stocks 11.02 11.59 10.49 9.00 8.89 8.68 8.42 8.58 8.55 8.50 8.32 8.30 40 Common stocks 4.40 4.64 4.25 3.42 3.36 3.41 3.36 3.49 3.49 3.36 3.31 3.26 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 often 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 Dec. Jan. Feb. Mar. Apr. May June July Aug. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 92.63 92.46 108.09 119.33 120.16 126.43 133.97 137.25 137.37 140.82 138.32 140.91 2 Industrial 107.45 108.01 123.79 136.77 137.13 144.03 152.75 157.35 158.59 163.15 158.06 160.10 3 Transportation 89.36 85.63 104.11 113.52 115.72 124.18 128.66 125.92 122.21 120.65 112.03 111.24 4 Utility 47.00 46.44 56.75 61.69 62.46 65.18 68.06 69.35 68.65 70.69 74.20 77.84 5 Finance 95.34 89.28 114.21 128.86 132.36 142.13 153.94 154.83 151.28 151.73 150.23 152.90 6 Standard & Poor's Corporation (1941-43 = 10)1 ... 160.41 160.50 186.84 207.26 208.19 219.37 232.33 237.97 238.46 245.30 240.18 245.00 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 216.48 207.96 229.10 243.28 245.27 246.09 264.91 270.59 274.22 281.18 269.93 268.55 Volume of trading (thousands of shares) 8 New York Stock Exchange 85,418 91,084 109,191 133,446 130,872 152,590 160,755 146,330 127,624 126,151 137,709 128,661 9 American Stock Exchange 8,215 6,107 8,355 11,890 11,105 14,057 15,902 13,503 11,870 12,795 10,320 9,885 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 23,000 22,470 28,390 28,390 26,810 27,450 29,090 30,760 32,370 32,480 33,170 34,550 Free credit balances at brokers4 11 Margin-account5 1,755 2,715 2,715 2,645 2,545 2,715 3,065 2,405 2,585 2,570 3,035 12 Cash-account 8,430 10,215 12,840 12,840 11,695 12,355 13,920 14,340 12,970 13,570 14,600 14,210 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 By equity class (in percent)1 14 Under 40 22.0 18.0 34.0 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 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 21.0 22.0 20.0 22.0 20.0 n.a. n a. 17 60-69 9.0 9.0 11.0 11.0 11.0 13.0 13.0 13.0 12.0 13.0 1 1 18 70-79 6.0 5.0 8.0 8.0 8.0 9.0 8.0 9.0 8.0 8.0 1 1 19 80 or more 6.0 6.0 8.0 8.0 9.0 10.0 9.0 9.0 9.0 8.0 T t Special miscellaneous-account balances at brokers (end of period)6 20 Total balances (millions of dollars)8 58,329 75,840 99,310 99,310 99,290 104,228 103,450 105,790 109,620 112,401 f f Distribution by equity status (percent) 1 1 21 Net credit status 63.0 59.0 58.0 58.0 59.0 60.0 61.0 59.0 58.0 59.0 n.a. n.a. Debt status, equity of 1 1 2 2 2 3 6 L 0 e s p s e r th ce an n t 6 o 0 r p m er o c r e e nt 2 9 8 . . 0 0 2191..00 3111..00 3111..00 3 8 3 . . 0 0 3 8 2 . . 0 0 3 8 1 . . 0 0 3 8 3 . . 0 0 3 9 3 . . 0 0 3 9 2 . . 0 0 1 1 1 I Margin requirements (percent of market value and effective date)9 Mar. 11, 1968 June , 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 5C 26 Short sales 70 8( 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 DomesticN onfinancial Statistics • November 1986 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1985 1986 AAccccoouunntt 11998833 11998844 Oct. Nov. Dec. Jan.' Feb.' Mar.' Apr.' May June July Aug. Savings and loan associations 1 Assets. 773,417 903,488 932,790' 942,212 948,781 938,467 943,027 947,293 954,189 962,511 953,703 957,305 2 Mortgages 494,789 555,277 580,780 583,262 585,462 578,472 576,608 574,696 575,297 575,073' 565,094' 565,218 3 Mortgage-backed securities... 99,088 96,844 97,303 96,891 98,482 99,332 102,422 107,304' 112,153' 112,018 4 Cash and investment securities1 104,274 124,801 114,896' 123,670' 126,712' 123,415 127,027 131,392 131,665 134,897' 130,954' 132,890 5 Other 174,354 223,396 239,102' 237,275' 238,833' 236,850 239,392 241,204 247,226 252,539' 257,653' 259,194 6 Liabilities and net worth. 773,417 903,488 932,790 942,212 948,781' 938,467 943,027 947,293 954,189 962,511 953,703 957,305 7 Savings capital... 634,455 725,045 741,585' 744,697' 750,071' 745,218 747,013 752,056 750,348 751,153' 743,989' 746,916 8 Borrowed money 92,127 125,666 130,705' 134,938' 138,798' 131,521 131,671 133,461 139,526 144,123' 147,011' 145,662 9 FHLBB 52,626 64,207 72,639 72,370 73,888 71,488 71,214 70,464 73,815 73,520' 73,556' 75,051 10 Other 39,501 61,459 58,066' 62,568' 64,910' 60,033 60,457 62,997 65,711 70,603' 73,455' 70,611 11 Other 15,968 17,944 21,397' 22,949' 19,045' 21,024 23,125 20,014 22,080 24,795' 21,084' 22,913 12 Net worth2. 30,867 34,833 39,292 39,820 41,064' 40,704 41,218 41,761 42,235 42,441' 41,619' 41,814 MEMO 13 Mortgage loan commitments outstanding3 61,305 59,149 59,280 56,051 51,130 52,542 54,520 55,751 57,964' 57,481' 55,488 FSLIC-insured federal savings banks 14 Assets 64,969 98,559 128,415 130,754 131,868 142,067 146,510 152,816 155,685 164,130' 180,107' 183,242 186,704 15 Mortgages 38,698 57,429 72,093 72,852 72,355 78,984 81,641 84,836 86,599 89,166' 99,743' 101,192 102,416 16 Mortgage-backed securities.... 7,172 9,949 14,549 15,386 15,676 16,620 16,367 17,851 18,661 19,849' 21,567' 23,328 24,187 17 Other 6,595 10,971 11,831 11,895 11,723 13,254 13,760 13,936 14,592 15,062' 16,752' 17,718 17,798 18 Liabilities and net worth 64,969 98,559 128,415 130,754 131,868 142,067 146,510 152,816 155,685 164,130' 180,107' 183,242 186,704 19 Savings capital 53,227 79,572 101,874 102,937 103,462 111,808 114,743 119,434 121,133 126,123' 138,168' 140,610 142,805 20 Borrowed money 7,477 12,798 17,672 18,606 19,323 20,419 21,254 22,743 23,196 25,686' 28,479' 28,697 26,460 21 FHLBB 4,640 7,515 9,935 10,353 10,510 11,151 11,283 12,064 12,476 12,830 15,301 15,866 13,230 22 Other 2,837 5,283 7,737 8,253 8,813 9,268 9,971 10,679 10,720 12,856' 13,178' 12,831 13,230 23 Other 1,157 1,903 2,893 3,113 2,732 2,983 3,397 3,291 3,755 4,338' 4,273' 4,507 4,861 24 Net worth 3,108 4,286 5,975 6,098 6,351 6,857 7,115 7,349 7,599 7,982' 9,186' 9,427 9,650 MEMO 25 Mortgage loan commitments outstanding3 2,151 3,234 5,653 5,636 5,355 6,707 7,718 8,330 8,287 8,762' 9,299' 10,134 9,383 Savings banks 26 Assets 193,535 203,898 215,893 216,793 216,776 216,673 218,119 221,256 222,542 226,495 223,239 224,569 Loans 27 Mortgage 97,356 102,895 109,171 109,494 110,371 108,973 109,702 110,271 11,813 112,417 110,877 111,971 28 Other 19,129 24,954 29,967 31,217 30,876 31,752 32,501 34,873 34,591 35,500 36,684 36,421 Securities 29 U.S. government 15,360 14,643 13,734 13,434 13,111 12,568 12,474 12,313 12,013 13,210 12,111 12,297 30 Mortgage-backed securities ... 18,205 19,215 20,012 19,828 19,481 21,372 21,525 21,593 21,885 22,546 22,400 22,954 31 State and local government... 2,177 2,077 2,163 2,148 2,323 2,298 2,297 2,306 2,372 2,343 2,280 2,309 32 Corporate and other 25,375 23,747 23,039 22,816 21,199 20,828 20,707 20,403 20,439 20,260 20,355 20,862 33 Cash 6,263 4,954 4,893 4,771 6,225 5,645 5,646 5,845 5,570 6,225 5,300 4,651 nn aa.. 34 Other assets 9,670 11,413 12,914 13,085 13,113 13,237 13,267 13,652 13,859 13,994 13,232 13,104 35 Liabilities 193,535 203,898 215,893 216,793 216,776 216,673 218,119 221,256 222,542 226,495 223,239 224,569 36 Deposits 172,665 180,616 187,239 187,552 185,972 186,321 186,777 188,960 189,025 190,310 188,987 188,615 37 Regular4 170,135 177,418 183,296 183,716 181,921 182,399 182,890 184,704 184,580 185,716 183,847 183,433 38 Ordinary savings 38,554 33,739 33,303 33,638 33,018 32,365 32,693 33,021 33,057 33,577 33,985 34,166 39 Time 95,129 104,732 104,024 104,116 103,311 104,436 104,588 105,562 105,550 105,146 103,013 102,374 40 Other 2,530 3,198 3,943 3,836 4,051 3,922 3,887 4,256 4,445 4,594 5,140 5,182 41 Other liabilities 10,154 12,504 15,996 16,309 17,414 17,086 17,793 18,412 19,074 21,384 19,205 20,641 42 General reserve accounts 10,368 10,510 12,299 12,567 12,823 12,925 13,211 13,548 14,114 14,519 14,746 15,084 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37 Continued 1985 1986 AAccccoouunntt 11998833 11998844 Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr. May June July Aug. Credit unions5 43 Total assets/liabilities and capital . 81,961 93,036 114,783 117,029 118,010 118,933 122,623 126,653 128,229 132,415 134,703 44 Federal 54,482 63,205 76,415 77,829 77,861 78,619 80,024 82,275 83,543 86,289 87,579 45 State 27,479 29,831 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 71,811 72,404 73,513 73,513 74,207 75,300 76,385 76,774 77,847 n.a. n a. 47 Federal 32,930 42,337 47,065 47,538 47,933 48,055 48,059 48,633 49,756 49,950 50,613 48 State 17,153 20,224 24,746 24,866 25,580 25,458 26,148 26,667 26,629 26,824 27,234 49 Savings 74,739 84,348 103,677 105,384 105,963 107,238 110,541 114,579 116,703 120,331 122,952 50 Federal 49,889 57,539 70,063 71,117 70,926 72,166 73,227 75,698 77,112 79,479 80,975 51 State 24,850 26,809 33,614 34,267 35,037 35,072 37,314 38,881 39,591 40,852 41,977 Life insurance companies 52 Assets 654,948 722,979 791,483 802,024 816,203 831,716 839,856 848,535 855,605 863,610 Securities 53 Government 50,752 63,899 72,334 73,451 77,230 75,937 76,761 77,965 78,494 79,051 54 United States6 28,636 42,204 49,300 50,321 53,559 52,243 53,264 54,289 54,705 55,120 55 State and local 9,986 8,713 9,475 9,615 10,086 9,869 9,588 9,674 9,869 9,930 56 Foreign7 12,130 12,982 13,559 13,515 13,585 13,825 13,909 14,002 13,920 14,001 57 Business 322,854 359,333 403,832 410,141 414,424 428,979 435,758 440,963 445,573 450,279 n.a. n a. n a. 58 Bonds 257,986 295,998 331,675 335,129 337,205 351,402 354,911 357,196 361,306 364,122 59 Stocks 64,868 63,335 72,157 75,012 77,219 77,577 80,847 83,767 84,267 86,157 60 Mortgages 150,999 156,699 165,687 167,306 170,460 172,324 172,997 174,823 175,951 177,554 61 Real estate 22,234 25,767 28,637 28,844 28,662 29,035 29,356 29,804 30,059 30,025 62 Policy loans 54,063 54,505 54,142 54,121 54,200 54,264 54,267 54,273 54,272 54,351 63 Other assets 54,046 63,776 57,313 68,161 71,227 57,090 57,351 57,753 57,492 57,802 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 DomesticN onfinancial Statistics • November 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 Mar. Apr. May June July Aug. U.S. budget1 1 Receipts, total 600,562 666,457 733,996 49,557 91,438 46,246 77,024 62,974 56,523 2 On-budget n.a. n.a. n.a. 32,203 69,130 30,004 58,400 47,571 41,404 3 Off-budget n.a. n.a. n.a. 17,355 22,308 16,242 18,624 15,402 15,119 4 Outlays, total 808,273 851,7% 945,927 79,700 81,510 85,642 78,034 85,203 84,434 5 On-budget n.a. n.a. n.a. 63,660 67,276 69,611 60,982 69,604 68,112 6 Off-budget n.a. n.a. n.a. 16,040 14,234 16,031 17,052 15,599 16,322 7 Surplus, or deficit (-), total -207,711 -185,339 -211,931 -30,142 9,928 -39,396 -1,011 -22,229 -27,911 8 On-budget n.a. n.a. n.a. -31,457 1,854 -39,607 -2,583 -22,033 -26,708 9 Off-budget n.a. n.a. n.a. 1,315 8,074 211 1,572 -196 -1,203 Source of financing (total) 10 Borrowing from the public 212,424 170,817 197,269 8,441 14,213 17,960 18,500 14,980 2200,,227788 11 Cash and monetary assets (decrease, or increase (-))2 -9,889 5,636 10,673 14,093 -22,542 22,7-74 -13,065 3,972 10,298 12 Other3 5,176 8,885 3,989 7,608 -1,599 -1,338 -4,424 3,277 -2,665 MEMO 13 Treasury operating balance (level, end of period) 37,057 22,345 17,060 12,246 34,417 12,808 24,641 20,810 10,428 14 Federal Reserve Banks 16,557 3,791 4,174 3,280 11,550 3,083 3,143 3,983 1,106 15 Tax and loan accounts 20,500 18,553 12,886 8,966 22,867 9,725 21,498 16,827 9,322 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 A29 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 June July Aug. RECEIPTS 1 All sources 666,457 733,996 341,392 380,618 364,790 394,345 77,024 62,974 56,523 ? 295,960 330,918 157,229 166,783 169,987 169,444 36,412 31,438 25,764 3 Withheld 279,350 298,941 145,210 149,288 155,725 153,919 24,868 30,329 24,504 4 Presidential Election Campaign Fund ... 35 35 5 29 6 31 4 2 11 81,346 97,685 19,403 76,155 22,295 78,981 13,411 2,838 22,,884466 6 Refunds 64,770 65,743 7,387 58,684 8,038 63,488 1,871 1,732 1,587 Corporation income taxes 7 Gross receipts 74,179 77,413 35,190 42,193 36,528 41,946 1111,,669988 44,,448833 11,,999977 8 Refunds 17,286 16,082 6,847 8,370 7,751 9,557 1,031 1,109 922 9 Social insurance taxes and contributions, net 241,902 268,805 118,690 144,598 128,017 156,714 24,399 2211,,556644 2233,,773388 10 Employment taxes and contributions1 212,180 238,288 105,624 126,038 116,276 139,706 2233,,667722 1199,,667755 1199,,552299 11 Self-employment taxes and 8,709 10,468 1,086 9,482 985 1100,,558811 11,,440077 --226644 00 1? Unemployment insurance 25,138 25,758 10,706 16,213 9,281 14,674 346 1,464 3,842 13 Other net receipts3 4,580 4,759 2,360 2,350 2,458 2,333 381 424 366 14 37,361 35,865 18,961 17,259 18,470 15,944 2,800 2,755 810 15 Customs deposits 11,370 12,079 6,329 5,807 6,354 6,369 1,161 1,305 1,272 16 Estate and gift taxes 6,010 6,422 3,029 3,204 3,323 3,487 514 612 608 17 Miscellaneous receipts4 16,965 18,576 8,812 9,144 9,861 10,002 1,071 1,926 1,725 OUTLAYS 18 All types 851,781 946,223r 446,944 463,842 487,188 486,037 78,034 85,203 84,434 19 227,413 252,748 118,286 124,186 134,675 135,367 22,462 23,647 22,448 70 International affairs 15,876 16,176 8,550 6,675 8,367 5,384 785 888899 999 ?1 General science, space, and technology ... 8,317 8,627 4,473 4,230 4,727 4,191 615 667799 694 V 7,086 5,685 1,423 680 3,305 2,484 732 393 671 ?3 Natural resources and environment 12,593 13,357 7,370 5,892 7,553 6,245 1,216 1,346 1,142 24 Agriculture 13,613 25,565 8,524 11,705 15,412 14,482 1,405 2,029 844 75 Commerce and housing credit 6,917 4,229 2,663 -260 644 860 893 1,127 175 ?6 Transportation 23,669 25,838 13,673 11,440 15,360 12,658 2,475 2,551 2,310 27 Community and regional development .... 7,673 7,680 4,836 3,408 3,901 3,169 651 635 582 ?« Education, training, employment, social services 27,579 29,342 13,737 14,149 14,481 1144,,771122 22,,221155 22,,339999 22,,663300 ?9 Health 30,417 33,542 15,692 16,945 17,237 17,872 3,202 3,125 3,241 30 Social security and medicare 235,764 254,446 119,613 128,351 129,037 135,214 24,678 23,471 22,809 31 Income security 112,668 128,200 61,558 65,246 59,457 60,786 6,843 10,192 10,740 3? Veterans benefits and services 25,614 26,352 13,317 11,956 14,527 12,193 914 2,366 3,373 33 Administration of justice 5,660 6,277 2,992 3,016 3,212 3,352 549 603 516 34 General government 5,053 5,228 2,552 2,857 3,634 3,566 1,185 118888 598 35 General-purpose fiscal assistance 6,768 6,353 3,458 2,659 3,391 2,179 40 11,,007711 49 36 Net interest' 111,058 129,436 61,293 65,143 67,448 68,054 9,939 11,174 12,652 37 Undistributed offsetting receipts6 -31,957 -32,759 -17,061 -14,436 -17,953 -17,193 -2,765 -2,683 -2,079 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. "Mq'nthly Treasury Statement of Receipts and Outlays of the U.S. receipts. Government," and the Budget of the U.S. Government, Fiscal Year 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • November 1986 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1984 1985 1986 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 1,517.2 1,576.7 1,667.4 1,715.1 1,779.0 1,827.5 1,950.3 1,991.1 2,063.6 2 Public debt securities 1,512.7 1,572.3 1,663.0 1,710.7 1,774.6 1,823.1 1,945.9 1,986.8 2,059.3 3 Held by public 1,255.1 1,309.2 1,373.4 1,415.2 1,460.5 1,506.6 1,597.1 1,634.3 1,684.9 4 Held by agencies 257.6 263.1 289.6 295.5 314.2 316.5 348.9 352.6 374.4 5 Agency securities 4.5 4.5 4.5 4.4 4.4 4.4 4.4 4.3 4.3 6 Held by public 3.4 3.4 3.4 3.3 3.3 3.3 3.3 3.2 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 1,513.4 1,573.0 1,663.7 1,711.4 1,775.3 1,823.8 1,932.4 1,973.3 2,060.0 9 Public debt securities 1,512.1 1,571.7 1,662.4 1,710.1 1,774.0 1,822.5 1,931.1 1,972.0 2,058.7 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 1,520.0 1,573.0 1,823.8 1,823.8 1,823.8 1,823.8 2,078.7 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 Q3 Q4 Q1 Q2 1 Total gross public debt 1,028.7 1,197.1 1,410.7 1,663.0 1,823.1 1,945.9 1,986.8 2,059.3 By type 2 Interest-bearing debt 1,027.3 1,195.5 1,400.9 1,660.6 1,821.0 1,943.4 1,984.2 2,056.7 3 Marketable 720.3 881.5 1,050.9 1,247.4 1,360.2 1,437.7 1,472.8 1,498.2 4 Bills 245.0 311.8 343.8 374.4 384.2 399.9 393.2 396.9 5 Notes 375.3 465.0 573.4 705.1 776.4 812.5 842.5 869.3 6 Bonds 99.9 104.6 133.7 167.9 199.5 211.1 223.0 232.3 7 Nonmarketable1 307.0 314.0 350.0 413.2 460.8 505.7 511.4 558.5 8 State and local government series 23.0 25.7 36.7 44.4 62.8 87.5 88.5 98.2 9 Foreign issues2 19.0 14.7 10.4 9.1 6.6 7.5 6.7 5.3 10 Government 14.9 13.0 10.4 9.1 6.6 7.5 6.7 5.3 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 77.0 78.1 79.8 82.3 13 Government account series3 196.7 205.4 231.9 286.2 313.9 332.2 336.0 372.3 14 Non-interest-bearing debt 1.4 1.6 9.8 2.3 2.1 2.5 2.6 2.6 By holder4 15 U.S. government agencies and trust funds 203.3 209.4 236.3 289.6 316.5 348.9 352.6 374.4 16 Federal Reserve Banks 131.0 139.3 151.9 160.9 169.7 181.3 184.8 183.8 17 Private investors 694.5 848.4 1,022.6 1,212.5 1,338.2 1,417.2 1,473. 1' 1,502.7 18 Commercial banks 111.4 131.4 188.8 183.4 196.9 192.2 195.1 197.2 19 Money market funds 21.5 42.6 22.8 25.9 22.7 25.1 29.9' 22.8 20 Insurance companies 29.0 39.1 56.7 76.4 88.6 93.2 95.8 n.a. 21 Other companies 17.9 24.5 39.7 50.1 59.0 59.0 59.6 59.8 22 State and local governments 104.3 127.8 155.1 179.4 n.a. n.a. n.a. n.a. Individuals ?3 Savings bonds 68.1 68.3 71.5 74.5 78.2 79.8 81.4 83.8 74 Other securities 42.7 48.2 61.9 69.3 73.2 75.0 76. 1' 73.4 25 Foreign and international5 136.6 149.5 166.3 192.9 209.8 214.6 225.4' 237.9 26 Other miscellaneous investors6 163.0 217.0 259.8 360.6 n.a. n.a. n.a. n.a. 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Consists of investments offoreign and international accounts. Excludes nontion Administration; depository bonds, retirement plan bonds, and individual interest-bearing notes issued to the International Monetary Fund. retirement bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable dollar-denominated and foreign currency-denominated se- mutual savings banks, corporate pension trust funds, dealers and brokers, certain ries held by foreigners. U.S. government deposit accounts, and U.S. government-sponsored agencies. 3. Held almost entirely by U.S. government agencies and trust funds. SOURCES. Data by type of security, U.S. Treasury Department, Monthly 4. Data for Federal Reserve Banks and U.S. government agencies and trust Statement of the Public Debt of the United States; data by holder. Treasury funds are actual holdings; data for other groups are Treasury estimates. Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Par value; averages of daily figures, in millions of dollars 1986 1986 week ending Wednesday IItteemm 11998833 11998844 11998855 June July Aug. July 23 July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 Immediate delivery2 1 U.S. government securities 42,135 52,778 75,331 90,120 84,943 101,287 75,064 79,937 103,744 112,382 97,521 97,206 By maturity 2 Bills 22,393 26,035 32,900 32,469 31,155 36,601 29,024 28,862 40,264 39,047 31,339 37,853 3 Other within 1 year 708 1,305 1,811 2,266 2,182 2,247 2,028 2,042 2,283 2,416 2,503 2,196 4 1-5 years 8,758 11,733 18,361 23,256 22,882 30,045 20,442 23,018 30,380 28,991 35,047 30,243 5 5-10 years 5,279 7,606 12,703 20,972 19,254 21,164 16,228 15,606 21,150 25,384 17,528 18,481 6 Over 10 years 4,997 6,099 9,556 11,157 9,469 11,230 7,343 10,409 9,667 16,544 11,104 8,433 By type of customer V U.S. government securities dealers 2,257 2,919 3,336 3,732 3,623 4,550 3,027 3,223 5,293 4,629 3,867 4,265 8 U.S. government securities brokers 21,045 25,580 36,222 47,432 44,583 53,032 40,648 43,661 52,459 60,244 51,279 50,712 9 All others3 18,833 24,278 35,773 38,957 36,737 43,706 31,390 33,053 45,993 47,510 42,375 42,230 10 Federal agency securities 5,576 7,846 11,640 16,252 15,819 16,896 14,031 12,035 14,206 16,369 20,632 17,577 11 Certificates of deposit 4,333 4,947 4,016 4,748 4,723 4,363 4,286 3,938 3,449 4,869 4,048 4,906 12 Bankers acceptances 2,642 3,243 3,242 3,284 3,473 3,190 3,310 2,770 3,288 3,284 3,176 3,383 13 Commercial paper 8,036 10,018 12,717 17,093 16,934 16,966 16,197 15,855 17,229 16,592 17,140 17,044 Futures transactions4 14 Treasury bills 6,655 6,947 5,561 2,912 2,196 2,837 1,962 2,368 1,955 2,295 3,683 3,172 15 Treasury coupons 2,501 4,503 6,069 7,202 5,276 5,887 5,318 5,777 5,750 6,883 5,556 5,403 16 Federal agency securities 265 262 240 17 13 12 * 5 2 1 41 1 Forward transactions5 17 U.S. government securities 1,493 1,364 1,283 1,704 1,377 2,860 1,579 1,350 3,408 3,033 2,640 3,278 18 Federal agency securities 1,646 2,843 3,857 6,739 7,624 7,706 7,313 6,841 5,851 9,167 8,881 6,735 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 • November 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 June July Aug. July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 Positions Net immediate2 1 U.S. government securities 14,082 5,429 7,391 11,973' 21,126' 18,406 17,759' 18,377 19,514 16,820 18,519 2 Bills 10,800 5,500 10,075 10,491 15,697' 12,781 13,904' 16,339 13,744 11,042 11,442 3 Other within 1 year 921 63 1,050 6,167 4,718 3,515 4,121 3,797 3,768 3,625 3,041 4 1-5 years 1,912 2,159 5,154 6,945' 10,951' 11,436 11,486' 11,440 12,872 8,976 12,242 5 5-10 years -78 -1,119 -6,202 -9,317 -8,481 -7,783 -8,826 -9,143 -8,546 -6,212 -8,030 6 Over 10 years 528 -1,174 -2,686 -2,314 -1,758 -1,544 -2,925 -4,056 -2,324 -611 -176 7 Federal agency securities 7,313 15,294 22,860 35,014 31,295 26,833 29,237 28,937 27,521 26,197 25,108 8 Certificates of deposit 5,838 7,369 9,192 11,530 10,918 9,960 9,866 9,977 10,262 9,582 9,888 9 Bankers acceptances 3,332 3,874 4,586 5,466 6,734 5,172 5,809 5,615 5,676 4,781 4,593 10 Commercial paper 3,159 3,788 5,570 7,989 8,027 7,469 7,261 8,262 7,950 6,789 6,833 Futures positions 11 Treasury bills -4,125 -4,525 -7,322 -14,058 -16,381 -16,253 -14,734 -14,897 -15,831 -17,003 -16,721 12 Treasury coupons -1,033 1,794 4,465 2,324 2,522' 2,343 4,251' 4,592 3,165 1,252 1,281 13 Federal agency securities 171 233 -722 -95 -67 -60 -70 -69 -65 -56 -54 Forward positions 14 U.S. government securities -1,936 -1,643 -911 -2,636' -3,046 -3,503 -3,370 -4,507 -2,912 -3,224 -3,900 15 Federal agency securities -3,561 -9,205 -9,420 -10,490 -11,383 -9,905 -10,867 -10,528 -9,740 -9,973 -9,839 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 29,099 44,078 68,035 92,366 97,709 98,805 97,903 97,509 94,321 98,265 100,226 17 Term agreements 52,493 68,357 80,509 108,761 102,897 106,640 105,635 109,265 112,931 104,596 103,623 Repurchase agreements5 18 Overnight and continuing 57,946 75,717 101,410 137,536 144,251 138,823 140,374 139,272 134,300 139,577 140,750 19 Term agreements 44,410 57,047 77,748 102,427 99,140 103,532 101,012 104,714 108,177 101,872 101,228 1. Data for dealer positions and sources of financing are obtained from reports ties involved are not available for trading purposes. Immediate positions include submitted to the Federal Reserve Bank of New York by the U.S. government reverses to maturity, which are securities that were sold after having been securities dealers on its published list of primary dealers. obtained under reverse repurchase agreements that mature on the same day as the Data for positions are averages of daily figures, in terms of par value, based on securities. Data for immediate positions do not include forward positions. the number of trading days in the period. Positions are net amounts and are shown 3. Figures cover financing involving U.S. government and federal agency on a commitment basis. Data for financing are in terms of actual amounts securities, negotiable CDs, bankers acceptances, and commercial paper. borrowed or lent and are based on Wednesday figures. 4. Includes all reverse repurchase agreements, including those that have been 2. Immediate positions are net amounts (in terms of par values) of securities arranged to make delivery on short sales and those for which the securities owned by nonbank dealer firms and dealer departments of commercial banks on a obtained have been used as collateral on borrowings, that is, matched agreements. commitment, that is, trade-date basis, including any such securities that have 5. Includes both repurchase agreements undertaken to finance positions and been sold under agreements to repurchase (RPs). The maturities of some "matched book" repurchase agreements. repurchase agreements are sufficiently long, however, to suggest that the securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1986 AAggeennccyy 11998833 11998844 11998855 Feb. Mar. Apr. May June July 1 Federal and federally sponsored agencies 240,068 271,220 293,905 292,043 291,525 293,336 294,961 296,226 n.a. 2 Federal agencies 33,940 35,145 36,390 36,376 35,927 35,530 36,110 35,826 35,768 3 Defense Department1 243 142 71 63 59 55 52 48 45 4 Export-Import Bank2'3 14,853 15,882 15,678 15,677 15,257 15,257 15,256 14,953 14,953 5 Federal Housing Administration4 194 133 115 109 108 114 118 115 115 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 22,,116655 7 Postal Service6 1,404 1,337 1,940 1,940 1,940 1,940 1,940 1,854 1,854 8 Tennessee Valley Authority 14,970 15,435 16,347 16,348 16,324 15,925 16,505 16,617 16,562 9 United States Railway Association6 111 51 74 74 74 74 74 74 74 10 Federally sponsored agencies7 206,128 236,075 257,515 255,667 255,67C 257,806 258,851 260,400 n.a. 11 Federal Home Loan Banks 48,930 65,085 74,447 73,201 74,778 76,527 78,718 81,558 83,081 12 Federal Home Loan Mortgage Corporation 6,793 10,270 11,926 13,695 12,963 13,492 12,475 12,276 n.a. 13 Federal National Mortgage Association 74,594 83,720 93,896 93,179 92,414 92,401 92,629 92,562 93,417 14 Farm Credit Banks 72,816 71,193 68,851 66,188 66,002r 65,188 64,629 63,585 62,857 15 Student Loan Marketing Association8 3,402 5,745 8,395 9,404 9,513 10,198 10,400 10,419 10,420 MEMO 16 Federal Financing Bank debt 135,791 145,217 153,373 153,418 153,455 153,508 155,076 155,222 115555,,552266 Lending to federal and federally sponsored 17 Export-Import Bank3 14,789 15,852 15,670 15,670 15,250 15,250 15,250 14,947 14,947 18 Postal Service6 1,154 1,087 1,690 1,690 1,690 1,690 1,690 1,604 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 14,673 14,649 14,250 14,830 14,942 14,937 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 63,774 63,464 63,829 64,544 6644,,992244 6655,,117744 23 Rural Electrification Administration 19,766 20,693 20,654 20,739 20,959 21,061 21,154 21,255 21,321 24 Other 26,460 29,853 31,429 31,798 32,369 32,354 32,534 32,476 32,469 1. Consists of mortgages assumed by the Defense Department between 1957 7. Includes outstanding noncontingent liabilities: Notes, bonds, and debenand 1963 under family housing and homeowners assistance programs. tures. Some data are estimated. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 8. Before late 1981, the Association obtained financing through the Federal 3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. Financing Bank. 4. Consists of debentures issued in payment of Federal Housing Administration 9. The FFB, which began operations in 1974, is authorized to purchase or sell insurance claims. Once issued, these securities may be sold privately on the obligations issued, sold, or guaranteed by other federal agencies. Since FFB securities market. incurs debt solely for the purpose of lending to other agencies, its debt is not 5. Certificates of participation issued before fiscal 1969 by the Government included in the main portion of the table in order to avoid double counting. National Mortgage Association acting as trustee for the Farmers Home Adminis- 10. Includes FFB purchases of agency assets and guaranteed loans; the latter tration; Department of Health, Education, and Welfare; Department of Housing contain loans guaranteed by numerous agencies with the guarantees of any and Urban Development; Small Business Administration; and the Veterans particular agency being generally small. The Farmers Home Administration item Administration. consists exclusively of agency assets, while the Rural Electrification Administra- 6. Off-budget. tion entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • November 1986 1.45 NEW SECURITY ISSUES State and Local Governments Millions of dollars 1985' 1986 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11998833rr 11998844'' 11998855'' Dec. Jan/ Feb/ Mar. Apr. May June July 1 All issues, new and refunding1 86,421 106,641 214,189 57,430 1,572 3,300 8,008' 12,578' 13,215' 12,611' 19,833 Type of issue 2 General obligation 21,566 26,485 52,622 88,,775544 751 916 22,,772200'' 55,,445599'' 77,,111155'' 66,,332266'' 66,,553311 3 U.S. government loans2 4 Revenue 64,855 80,156 161,567 4488,,667766 821 22,,338844 55,,228888'' 77,,1122cc 66,,110000'' 66,,228855'' 1133,,330022 5 U.S. government loans2 Type of issuer 6 State 7,140 9,129 13,004 2,146 296 287 1,088 1,956 2,825 1,705 2,879 7 Special district and statutory authority 51,297 63,550 134,363 39,147 579 1,691 4,383 7,350 6,427 6,351 10,589 8 Municipalities, counties, townships, school districts 27,984 33,962 66,822 16,137 697 1,322 2,537 3,273 3,962 4,554 6,365 9 Issues for new capital, total 72,441 94,050 156,050 46,788 1,350 2,022 3,314' 6,938' 7,155' 8,178' 13,165 Use of proceeds 10 Education 8,099 7,553 16,658 3,901 370 441 624 1,706 1,827 1,694 2,800 11 Transportation 4,387 7,552 12,070 3,480 246 380 795 815 273 947 3,164 12 Utilities and conservation 13,588 17,844 26,852 7,070 315 1,352 4,082 4,554 3,450 1,583 4,425 13 Social welfare 26,910 29,928 63,181 22,589 6 239 337 579 1,424 1,518 1,186 14 Industrial aid 7,821 15,415 12,892 3,583 0 134 37 313 264 255 975 15 Other purposes 11,637 15,758 24,398 6,165 413 729 2,132 4,610 5,978 6,614 7,281 1. Par amounts of long-term issues based on date of sale. SOURCE. Public Securities Association. 2. Consists of tax-exempt issues guaranteed by the Farmers Home Administration. 1.46 NEW SECURITY ISSUES Corporations Millions of dollars 1985 1986 Type of i o s r s u u e s e o r issuer, 11998833 11998844 11998855 Dec. Jan. Feb. Mar. Apr. May June' July 1 All issues1 119,949' 132,531 201,269' 19,299' 17,093 23,931 30,444' 33,489 19,564' 25,766 20,900 2 Bonds2 68,37c 109,903 165,754' 14,31C 13,693 19,469 24,923' 27,883 13,05C 20,746 16,577 Type of offering 3 Public 47,244' 73,579 119,559' 14.31C 13,693 19,469 24,923' 27,883 13,05C 20,746 16,577 4 Private placement 21,126 36,324' 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 52,228' 2,704 4,596 3,950 8,895 7,975 3,939 5,368 2,524 6 Commercial and miscellaneous 7,540 13,726 15,215 735 624 1,216 790 2,640 1,776 2,206 3,410 7 Transportation 3,833 4,694 5,743 187 633 373 303 614 427 250 497 8 Public utility 9,125 10,679 12,957 1,090 820 2,540 2,133 3,330 1,709 1,948 1,470 9 Communication 3,642 2,997 10,456 2,318 0 1,200 1,907 3,115 712 810 465 10 Real estate and financial 27,227' 53,199 69,157' 7,277' 7,021 10,190 10,895' 10,210 4,487' 10,164 8,210 11 Stocks3 51,579 22,628 35,515 4,989 3,400 4,462 5,521 5,606 6,514 5,020 4,323 Type 12 Preferred 7,213 4,118 6,505 908 570 975 1,160 751 856 1,284 726 13 Common 44,366 18,510 29,010 4,081 2,830 3,487 4,361 4,855 5,658 3,736 3,597 Industry group 14 Manufacturing 14,135 4,054 5,700 1,045 827 1,269 851 1,434 1,827 1,132 763 15 Commercial and miscellaneous 13,112 6,277 9,149 1,220 683 434 607 910 953 421 916 16 Transportation 2,729 589 1,544 200 78 302 355 158 372 154 179 17 Public utility 5,001 1,624 1,966 201 176 153 357 165 346 406 330 18 Communication 1,822 419 978 146 231 282 0 27 74 140 107 19 Real estate and financial 14,780 9,665 16,178 2,177 1,405 2,022 3,351 2,912 2,942 2,767 2,028 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 Dec. Jan. Feb. Mar. Apr. May Juner July INVESTMENT COMPANIES1 1 Sales of own shares2 107,480 222,670 23,560 32,466 27,489 33,764 37,656 31,251 30,619 35,684 2 Redemptions of own shares3 77,032 132,440 18,337 15,836 11,860 15,085 21,699 16,706 18,921 21,508 3 Net sales 30,448 90,230 5,223 16,630 15,629 18,679 15,957 14,545 11,698 14,176 4 Assets4 137,126 251,695 251,536 265,487 292,002 315,245 329,684 343,926 356,040 360,050 5 Cash position5 12,181 20,607 20,590 22,425 23,716 27,639 29,599 28,184 28,083 28,180 6 Other 124,945 231,088 230,946 243,062 268,286 287,606 300,085 315,742 327,957 331,870 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 213.7 264.7 280.6 259.8 265.0 266.4 274.3 296.3 285.6 296.4 293.1 2 Profits before tax 207.6 235.7 223.1 225.1 221.9 213.8 213.8 229.2 235.8 224.3 231.2 3 Profits tax liability 77.2 95.4 91.8 89.3 87.8 87.8 87.1 95.8 96.4 89.1 93.3 4 Profits after tax 130.4 140.3 131.4 135.8 134.1 126.0 126.7 133.4 139.4 135.2 137.9 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 50.4 7 Inventory valuation -10.9 -5.5 -.6 -1.8 -1.6 -.5 1.6 6.1 -9.4 16.5 10.6 8 Capital consumption adjustment 17.0 34.5 58.1 36.5 44.7 53.2 58.9 61.0 59.2 55.6 51.3 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 • November 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 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 6 132.1 149.7 169.8 186.7 203.2 203.5 211.2 218.0 224.9 226.3 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 • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1985 1986 IInndduussttrryy 11998844 11998855rr 11998866llrr Ql Q2 Q3 Q4 Ql Q2 Q3> Q41 1 Total nonfarm business 354.44 387.13 379.59 373.56 387.86 389.23 397.88 377.94 375.92 380.52 383.99 Manufacturing 2 Durable goods industries 66.24 73.27 68.23 70.29 74.34 7722..9999 75.47 68.01 68.33 66.30 70.28 3 Nondurable goods industries 72.58 80.21 75.78 76.64 79.91 81.48 82.79 76.02 73.35 76.43 77.32 Nonmanufacturing 4 Mining 16.86 15.88 11.29 15.81 16.56 15.89 15.25 12.99 11.22 10.80 10.16 Transportation 5 Railroad 6.79 7.08 6.60 6.42 7.38 7.79 6.74 6.22 6.77 7.09 6.31 6 Air 3.56 4.79 5.88 4.23 3.71 5.17 6.07 6.58 5.77 5.40 5.75 7 Other 6.17 6.15 5.87 6.04 6.35 5.85 6.34 5.42 5.74 6.25 6.08 Public utilities 8 Electric 37.03 36.11 33.60 36.49 36.00 35.58 36.38 34.21 33.81 33.61 32.78 9 Gas and other 10.44 12.71 12.62 11.95 12.61 12.86 13.41 12.82 12.74 12.46 12.46 10 Commercial and other2 134.75 150.93 159.72 145.68 150.99 151.62 155.42 155.67 158.18 162.18 162.84 •Trade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade; finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A37 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1985 1986 AAccccoouunntt 11998811 11998822 11998833 11998844 QL Q2 Q3 Q4 QL 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 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: 5 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 13 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 JJJuuulllyyy 333111,,, 111999888666111 May June July May June July May June July 1 Total 159,752 -185 -151 949 25,780 26,687 27,277 25,966 26,838 26,328 Retail financing of installment sales 2 Automotive (commercial vehicles) 16,742 421 380 390 1,358 1,336 1,365 936 956 975 J Business, industrial, and farm equipment 2200,,223377 68 -51 -106 1,015 1,044 11,,002222 947 11,,009955 1,128 Wholesale financing 4 Automotive 24,889 -679 471 -1,097 9,455 10,397 9,030 10,134 9,926 10,128 5 Equipment 4,749 3 45 211 467 506 900 464 462 689 6 All other 7,260 -303 -15 -242 1,575 1,609 11,,665566 1,878 11,,662244 11,,889988 Leasing V Automotive 16,274 3 -121 103 840 820 1,077 837 941 973 8 Equipment 40,423 -38 -101 647 1,256 1,264 11,,666699 1,294 1,365 11,,002222 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,697 498 -882 716 8,572 8,441 9,208 8,074 9,323 8,492 10 All other business credit 12,481 -159 123 327 1,244 1,270 1,350 1,402 1,146 1,023 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 • November 1986 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1986 IItteemm 11998833 11998844 11998855 Feb. Mar. Apr. May June July Aug. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 92.8 96.8 104.1 115.1 108.2 114.2 114.7 122.1 115.7' 117.1 2 Amount of loan (thousands of dollars) 69.5 73.7 77.4 84.3 79.6 83.9 83.0 88.0 83.4' 84.6 3 Loan/price ratio (percent) 77.1 78.7 77.1 75.6 75.4 75.9 74.7 74.9 73.9' 74.7 4 Maturity (years) 26.7 27.8 26.9 26.8 26.9 25.9 25.8 26.6 26.2R 26.6 5 Fees and charges (percent of loan amount)2 2.40 2.64 2.53 2.64 2.60 2.34 2.19 2.40 2.35R 2.40 6 Contract rate (percent per annum) 12.20 11.87 11.12 10.21 10.04 9.87 9.84 9.74 9.89' 9.85 Yield (percent per annum) 7 FHLBB series5 12.66 12.37 11.58 10.68 10.50 10.27 10.22 10.15 10.30' 10.27 8 HUD series4 13.43 13.80 12.28 10.49 10.06 9.99 10.32 10.38 10.28 9.88 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.11 13.81 12.24 10.59 9.77 9.80 10.07 9.98 10.01 9.80 10 GNMA securities6 12.25 13.13 11.61 9.79 9.44 9.17 9.23 9.57 9.31 9.11 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 74,847 83,339 94,574 98,820 98,795 98,746 98,096 97,295 97,255 96,675 12 FHA/VA-insured 37,393 35,148 34,244 33,466 33,368 33,246 32,558 31,241 30,766 28,451 13 Conventional 37,454 48,191 60,331 65,354 65,427 65,500 65,538 66,054 66,489 68,224 Mortgage transactions (during period) 14 Purchases 17,554 16,721 21,510 1,159 1,410 1,631 1,978 3,000 3,343 3,800 15 Sales 3,528 978 1,301 n.a. n.a. n.a. n.a. n.a. n. a. n.a. Mortgage commitments1 16 Contracted (during period) 18,607 21,007 20,155 2,578 1,917 3,774 3,538 3,049 3,270 3,840 17 Outstanding (end of period) 5,461 6,384 3,402 4,480 4,851 6,942 8,444 7,862 7,706 7,671 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of periodJ8 18 Total 5,996 9,283 12,399 14,584 13,623 13,144 14,302 14,194 19 FHA/VA 974 910 841 792 787 778 769 742 20 Conventional 5,022 8,373 11,558 14,584 12,836 12,366 13,533 13,452 Mortgage transactions (during period) 71 Purchases 23,089 21,886 44,012 4,605 5,318 6,195 8,947 10,505 n.a. n a. 22 Sales 19,686 18,506 38,905 4,286 5,897 5,591 7,354 9,588 Mortgage commitments9 23 Contracted (during period) 32,852 32,603 48,989 6,044 7,128 9,869 10,612 10,338 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 Q1 Q2' 1 All holders 1,813,856 2,034,602 2,266,976' 2,139,019 2,201,732 2,266,976' 2,316,013' 2,380,765 7 1- to 4-family 1,189,822 1,318,888 1,467,578' 1,383,101 1,426,770 1,467,578' 1,495,398' 1,542,847 3 Multifamily 160,805 185,414 213,936' 197,418 203,742 213,936' 220,733' 227,600 4 Commercial 350,389 418,300 479,840' 447,631 462,929 479,840' 495,323' 507,888 5 112,840 112,000 105,622 110,869 108,291 105,622 104,559 102,430 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 1,437,827 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 10 Commercial 120,210 152,894 180,882 165,554 173,190 180,882 188,137 195,377 11 Farm 9,387 10,177 11,385 10,607 11,036 11,385 11,805 12,225 1? 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 15 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 494,789 555,277 585,461 569,291 575,684 585,461 577,062 567,354 18 1- to 4-family 387,924 421,489 434,072 425,021 427,081 434,072 422,034 415,035 19 Multifamily 44,333 55,750 66,663 60,231 62,608 66,663 67,418 66,063 70 Commercial 62,403 77,605 84,118 83,447 85,358 84,118 86,949 85,722 21 Farm 129 433 608 592 637 608 661 534 77 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 32,424 7.8 Federal and related agencies 148,328 158,993 166,928 165,912 166,248 166,928 165,730 162,000 79 Government National Mortgage Association 3,395 2,301 1,473 1,825 1,640 1,473 1,533 847 30 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 1,276 733 790 577 733 704 570 33 1- to 4-family 1,159 213 183 223 185 183 217 146 34 Multifamily 173 119 113 136 139 113 33 66 35 Commercial 409 497 159 163 72 159 217 111 36 Farm 400 447 278 268 181 278 237 247 37 Federal Housing and Veterans Administration 4,894 4,816 4,920 4,888 4,918 4,920 4,964 55,,009922 38 1- to 4-family 1,893 2,048 2,254 2,199 2,251 2,254 2,309 2,447 39 Multifamily 3,001 2,768 2,666 2,689 2,667 2,666 2,655 2,645 40 Federal National Mortgage Association 78,256 87,940 98,282 94,777 96,769 98,282 98,795 97,295 41 1- to 4-family 73,045 82,175 91,966 88,788 90,590 91,966 92,315 90,460 42 Multifamily 5,211 5,765 6,316 5,989 6,179 6,316 6,480 6,835 43 Federal Land Banks 52,010 52,261 47,498 51,056 49,255 47,498 46,111 44,002 44 1- to 4-family 3,081 3,074 2,798 3,006 2,895 2,798 2,711 2,589 45 Farm 48,929 49,187 44,700 48,050 46,360 44,700 43,400 41,413 46 Federal Home Loan Mortgage Corporation 7,632 10,399 14,022 12,576 13,089 14,022 13,623 14,194 47 1- to 4-family 7,559 9,654 11,881 11,288 11,457 11,881 12,231 11,890 48 Multifamily 73 745 2,141 1,288 1,632 2,141 1,392 2,304 49 Mortgage pools or trusts3 285,073 332,057 415,042 365,748 388,948 415,042 440,701 475,615 50 Government National Mortgage Association 159,850 179,981 212,145 192,925 201,026 212,145 220,348 229,204 51 1- to 4-family 155,950 175,589 207,198 188,228 196,198 207,198 215,148 223,838 52 Multifamily 3,900 4,392 4,947 4,697 4,828 4,947 5,200 5,366 S3 Federal Home Loan Mortgage Corporation 57,895 70,822 100,387 83,327 91,915 100,387 110,337 125,903 54 1- to 4-family 57,273 70,253 99,515 82,369 90,997 99,515 108,020 123,676 55 Multifamily 622 569 872 958 918 872 2,317 2,227 56 Federal National Mortgage Association 25,121 36,215 54,987 42,755 48,769 54,987 62,310 72,377 57 1- to 4-family 25,121 35,965 54,036 41,985 47,857 54,036 61,117 71,153 58 Multifamily n.a. 250 951 770 912 951 1,193 1,224 59 Farmers Home Administration 42,207 45,039 47,523 46,741 47,238 47,523 47,706 48,131 60 1- to 4-family 20,404 21,813 22,186 21,962 22,090 22,186 22,082 21,987 61 Multifamily 5,090 5,841 6,675 6,377 6,415 6,675 6,943 7,170 67 Commercial 7,351 7,559 8,190 8,014 8,192 8,190 8,150 8,347 63 Farm 9,362 9,826 10,472 10,388 10,541 10,472 10,531 10,627 64 Individuals and others4 249,674 271,346 292,213 281,700 287,882 292,213' 298,755' 305,323 65 1- to 4-family 141,769 152,154 162,853 158,096 163,149 162,853' 164,955' 168,234 66 Multifamily 40,873 48,480 55,195 51,100 52,526 55,195' 57,850' 60,494 67 Commercial 35,169 41,279 47,897 43,699 44,817 47,897' 49,756' 50,861 68 Farm 31,863 29,433 26,268 28,805 27,390 26,268 26,194 25,734 1. Includes loans held by nondeposit trust companies but not bank trust 4. Other holders include mortgage companies, real estate investment trusts, departments. state and local credit agencies, state and local retirement funds, noninsured 2. Assumed to be entirely 1- to 4-family loans. pension funds, credit unions, and other U.S. agencies. 3. Outstanding principal balances of mortgage pools backing securities insured NOTE. Based on data from various institutional and governmental sources, with or guaranteed by the agency indicated. some quarters estimated in part by the Federal Reserve. Multifamily debt refers to loans on structures of five or more units. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 DomesticN onfinancial Statistics • November 1986 1.55 CONSUMER INSTALLMENT CREDIT1-4 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1985 1986 11998844 11998855 Nov. Dec. Jan. Feb. Mar. Apr. May Juner July Amounts outstanding (end of period) 1 Total 453,580 535,098 528,621 535,098 542,753 547,852 550,939 555,810 562,267 567,653 573,029 By major holder 2 Commercial banks 209,158 240,796 238,620 240,796 243,256 244,761 245,172 247,498 248,681 249,753 251,040 3 Finance companies2 96,126 120,095 118,356 120,095 123,717 126,001 127,422 128,728 131,172 134,933 137,197 4 Credit unions 66,544 75,127 74,117 75,127 75,810 76,431 76,953 77,957 78,474 79,095 80,102 5 Retailers3 37,061 39,187 39,039 39,187 39,416 39,497 39,844 39,826 40,139 40,076 40,251 6 Savings institutions 40,330 55,555 54,307 55,555 56,290 57,048 57,573 58,024 60,247 60,352 61,049 7 Gasoline companies 4,361 4,337 4,182 4,337 4,264 4,114 3,975 3,777 3,554 3,445 3,389 By major type of credit 8 Automobile 173,122 206,482 203,766 206,482 210,661 213,342 214,361 215,814 218,%5 222,606 226,232 9 Commercial banks 83,900 92,764 92,127 92,764 93,489 93,828 93,377 93,013 93,157 93,261 94,024 10 Credit unions 28,614 30,577 30,166 30,577 30,855 31,107 31,320 31,728 31,939 32,191 32,602 11 Finance companies 54,663 73,391 71,996 73,391 76,410 78,310 79,416 80,685 83,221 86,520 88,862 12 Savings institutions 5,945 9,750 9,477 9,750 9,907 10,097 10,248 10,386 10,648 10,634 10,745 13 Revolving 98,514 118,296 117,050 118,2% 119,682 120,724 122,131 123,442 124,545 124,720 125,347 14 Commercial banks 58,145 73,893 73,076 73,893 74,991 75,953 77,021 78,421 79,151 79,397 79,768 15 Retailers 33,064 34,560 34,486 34,560 34,770 34,843 35,188 35,170 35,449 35,390 35,542 16 Gasoline companies 4,361 4,337 4,182 4,337 4,264 4,114 3,975 3,777 3,554 3,445 3,389 17 Savings institutions 2,944 5,506 5,306 5,506 5,657 5,813 5,947 6,075 6,392 6,488 6,648 18 Mobile home 24,184 25,461 25,315 25,461 25,371 25,573 25,584 25,513 25,560 25,479 25,398 19 Commercial banks 9,623 9,578 9,584 9,578 9,457 9,566 9,348 9,264 9,215 9,1% 9,156 20 Finance companies 9,161 9,116 9,057 9,116 9,125 9,161 9,327 9,286 9,115 9,077 8,989 21 Savings institutions 5,400 6,767 6,674 6,767 6,789 6,846 6,909 6,963 7,230 7,206 7,253 22 Other 157,760 184,859 182,490 184,859 187,039 188,212 188,863 191,041 193,197 194,847 196,053 23 Commercial banks 57,490 64,561 63,833 64,561 65,319 65,414 65,427 66,800 67,158 67,898 68,093 24 Finance companies 32,302 37,588 37,303 37,588 38,182 38,530 38,678 38,757 38,836 39,336 39,345 25 Credit unions 37,930 44,550 43,951 44,550 44,955 45,323 45,633 46,228 46,535 46,903 47,501 26 Retailers 3,997 4,627 4,553 4,627 4,646 4,653 4,656 4,656 4,690 4,686 4,710 27 Savings institutions 26,041 33,533 32,850 33,533 33,937 34,291 34,469 34,600 35,977 36,024 36,404 Net change (during period) 28 Total 77,341 81,518 5,643 6,477 7,655 5,099 3,087 4,871 6,457 5,386 5,376 By major holder 29 Commercial banks 39,819 31,638 3,256 2,176 2,460 1,505 411 2,326 1,183 1,072 1,287 30 Finance companies2 9,961 23,969 791 1,739 3,622 2,284 1,421 1,306 2,444 3,761 2,264 31 Credit unions 13,456 8,583 643 1,010 683 621 522 1,004 517 621 1,007 32 Retailers3 2,900 2,126 149 148 229 81 347 -18 313 -63 175 33 Savings institutions 11,038 15,225 798 1,248 735 758 525 451 2,223 105 697 34 Gasoline companies 167 -24 6 155 -73 -150 -139 -198 -223 -109 -56 By major type of credit 35 Automobile 27,214 33,360 1,772 2,716 4,179 2,681 1,019 1,453 3,151 3,641 3,626 36 Commercial banks 16,352 8,864 725 637 725 339 -451 -364 144 104 763 37 Credit unions 3,223 1,963 262 411 278 252 213 408 211 252 411 38 Finance companies 4,576 18,728 581 1,395 3,019 1,900 1,106 1,269 2,536 3,299 2,342 39 Savings institutions 3,063 3,805 204 273 157 190 151 138 262 -14 111 40 Revolving 20,145 19,782 1,832 1,246 1,386 1,042 1,407 1,311 1,103 175 627 41 Commercial banks 15,949 15,748 1,569 817 1,098 %2 1,068 1,400 730 246 371 42 Retailers 2,512 1,496 104 74 210 73 345 -18 279 -59 152 43 Gasoline companies 167 -24 6 155 -73 -150 -139 -198 -223 -109 -56 44 Savings institutions 1,517 2,562 153 200 151 156 134 128 317 % 160 45 Mobile home 1,990 1,277 -5 146 -90 202 11 -71 47 -81 -81 46 Commercial banks -199 -45 -12 -6 -121 109 -218 -84 -49 -19 -40 47 Finance companies 544 -45 -32 59 9 36 166 -41 -171 -38 -88 48 Savings institutions 1,645 1,367 39 93 22 57 63 54 267 -24 47 49 Other 27,992 27,099 2,044 2,369 2,180 1,173 651 2,178 2,156 1,650 1,206 50 Commercial banks 7,717 7,071 974 728 758 95 13 1,373 358 740 195 51 Finance companies 4,841 5,286 242 285 594 348 148 79 79 500 9 52 Credit unions 10,233 6,620 381 599 405 368 310 595 307 368 598 53 Retailers 388 630 45 74 19 7 3 0 34 -4 24 54 Savings institutions 4,813 7,492 402 683 404 354 178 131 1,377 47 380 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 1986 IItteemm 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July INTEREST RATES Commercial banks1 1 48-month new car2 13.92 13.71 12.91 n.a. 12.29 n.a. n.a. 11.45 n.a. n.a. 2 24-month personal 16.68 16.47 15.94 n.a. 15.52 n.a. n.a. 14.89 n.a. n.a. 3 120-month mobile home2 16.08 15.58 14.96 n.a. 14.57 n.a. n.a. 13.97 n.a. n.a. 4 Credit card 18.78 18.77 18.69 n.a. 18.48 n.a. n.a. 18.32 n.a. n.a. Auto finance companies 5 New car 12.58 14.62 11.98 9.99 9.70 10.51 10.55 9.49 9.35 9.31 6 Used car 18.74 17.85 17.59 16.60 16.74 16.63 16.67 16.56 16.06 15.83 OTHER TERMS3 Maturity (months) 7 New car 45.9 48.3 51.5 51.2 51.3 51.0 50.6 49.4 49.5 49.9 8 Used car 37.9 39.7 41.4 42.8 42.5 42.4 42.5 42.5 42.7 42.8 Loan-to-value ratio 9 New car 86 88 91 92 92 90 89 89 89 89 10 Used car 92 92 94 95 95 95 96 97 97 97 Amount financed (dollars) 11 New car 8,787 9,333 9,915 10,064 10,074 10,306 10,402 10,521 10,608 10,748 12 Used car 5,033 5,691 6,089 6,165 6,194 6,207 6,281 6,393 6,611 6,614 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 • November 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 1986 ^ > • SCC UI 11998800 11998811 11998822 11998833 H2 HI H2 HI H2 HI Nonfinancial sectors' 1 Total net borrowing by domestic nonfinancial sectors .... 344.9 375.8 387.4 548.8 756.3 859.1 591.5 728.8 783.8 726.3 992.0 668.6 By sector and instrument 2 U.S. government 79.2 87.4 161.3 186.6 198.8 223.6 156.6 181.0 216.6 201.3 246.0 210.7 J Treasury securities 79.8 87.8 162.1 186.7 199.0 223.7 156.7 181.2 216.8 201.4 246.0 210.8 4 Agency issues and mortgages -.6 -.5 -.9 -.1 -.2 -.1 -.1 -.2 -.1 -.1 -.1 -.1 5 Private domestic nonfinancial sectors 265.7 288.5 226.2 362.2 557.5 635.5 434.9 547.8 567.2 525.1 746.0 457.9 6 Debt capital instruments 189.1 155.5 148.3 252.8 314.0 462.4 277.9 298.5 329.5 354.3 570.6 371.2 7 Tax-exempt obligations 30.3 23.4 44.2 53.7 50.4 152.4 51.8 42.7 58.0 67.4 237.3 11.8 8 Corporate bonds 27.7 22.8 18.7 16.0 46.1 73.9 11.5 31.2 61.0 72.7 75.0 129.2 9 Mortgages 131.2 109.3 85.4 183.0 217.5 236.2 214.6 224.5 210.4 214.1 258.2 230.2 10 Home mortgages 94.2 72.2 50.5 117.1 129.9 151.8 135.0 135.2 124.6 133.1 170.4 151.7 11 Multifamily residential 7.6 4.8 5.4 14.1 25.1 29.3 20.4 27.5 22.7 24.5 34.1 27.3 12 Commercial 19.2 22.2 25.2 49.0 63.3 61.5 55.3 62.9 63.7 59.3 63.7 58.1 13 Farm 10.2 10.0 4.2 2.8 -.8 -6.4 3.9 -1.1 -.5 -2.8 -9.9 -6.8 14 Other debt instruments 76.6 133.0 77.9 109.5 243.5 173.1 157.0 249.3 237.7 170.8 175.4 86.7 15 Consumer credit 4.5 22.6 17.7 56.8 95.0 96.6 75.1 98.7 91.3 97.3 95.9 74.9 16 Bank loans n.e.c 37.8 57.0 52.9 25.8 80.1 37.6 41.1 93.0 67.2 28.5 46.8 4.9 17 Open market paper 4.0 14.7 -6.1 -.8 21.7 14.6 4.3 24.8 18.7 12.3 16.9 -15.7 18 Other 30.3 38.7 13.4 27.7 46.6 24.3 36.5 32.8 60.4 32.7 15.8 22.6 19 By borrowing sector 265.7 288.5 226.2 362.2 557.5 635.5 434.9 547.8 567.2 525.1 746.0 457.9 20 State and local governments 17.2 6.8 21.5 34.0 27.4 107.8 33.7 25.2 29.6 56.8 158.8 31.4 21 Households 120.0 121.4 88.4 188.0 239.5 292.0 223.2 232.9 246.1 248.5 335.5 217.5 22 Farm 15.2 16.6 6.8 4.3 .1 -14.3 6.7 -.4 .5 -7.4 -21.2 -16.5 23 Nonfarm noncorporate 31.8 38.5 40.2 76.6 97.1 90.0 91.7 101.4 92.7 83.3 96.7 85.8 24 Corporate 81.5 105.2 69.2 59.3 193.4 160.1 79.7 188.6 198.2 143.9 176.3 139.7 25 Foreign net borrowing in United States 23.8 23.5 16.0 17.4 6.1 2.1 15.5 35.4 -23.2 -4.2 8.4 27.5 26 Bonds .8 5.4 6.7 3.1 1.3 4.0 2.3 1.1 1.5 5.5 2.6 6.9 27 Bank loans n.e.c 11.8 3.0 -5.5 3.6 -6.6 -2.6 -3.4 -2.3 -11.0 -6.1 .9 .9 28 Open market paper 2.4 3.9 1.9 6.5 6.2 6.2 6.0 18.0 -5.6 4.2 8.2 20.6 29 U.S. government loans 8.8 11.1 13.0 4.1 5.3 -5.5 10.7 18.7 -8.1 -7.8 -3.2 1.0 30 Total domestic plus foreign 368.7 399.3 403.4 566.2 762.4 861.2 607.1 764.2 760.6 722.1 1000.4 696.0 Financial sectors' 31 Total net borrowing by financial sectors 65.4 101.9 90.1 94.0 139.0 186.9 123.1 134.3 143.8 154.9 218.8 186.4 By instrument 32 U.S. government related 44.8 47.4 64.9 67.8 74.9 101.5 68.8 69.8 80.0 92.9 110.2 130.2 33 Sponsored credit agency securities 24.4 30.5 14.9 1.4 30.4 20.6 8.1 29.1 31.8 25.3 15.9 4.4 34 Mortgage pool securities 19.2 15.0 49.5 66.4 44.4 79.9 60.7 40.7 48.2 67.6 92.1 125.1 3S 1.2 1.9 .4 1.1 2 2 8 36 Private financial sectors 20.6 54.5 25.2 26.2 64.1 85.3 54.3 64.5 63.8 62.0 108.7 56.2 37 Corporate bonds 1.6 4.4 12.5 12.1 23.3 36.5 13.1 17.3 29.3 35.3 37.7 24.0 38 Mortgages * * .1 * .4 .1 * .4 .4 .1 .1 39 Bank loans n.e.c -1.0 1.2 1.9 -.1 .7 2.5 2.1 * 1.4 1.0 4.1 3.5 40 Open market paper 12.9 32.7 9.9 21.3 24.1 32.0 40.9 31.1 17.0 13.9 50.1 15.2 41 Loans from Federal Home Loan Banks 7.1 16.2 .8 -7.0 15.7 14.2 -1.8 15.7 15.7 11.7 16.7 13.5 By sector 42 Sponsored credit agencies 25.6 32.4 15.3 1.4 30.4 21.7 8.1 29.1 31.8 25.3 18.1 5.2 43 Mortgage pools 19.2 15.0 49.5 66.4 44.4 79.9 60.7 40.7 48.2 67.6 92.1 125.1 44 Private financial sectors 20.6 54.5 25.2 26.2 64.1 85.3 54.3 64.5 63.8 62.0 108.7 56.2 45 Commercial banks 8.3 11.6 11.7 5.0 7.3 -4.9 17.1 15.4 -.9 -9.2 -.6 -13.4 46 Bank affiliates 6.7 9.2 6.8 12.1 15.6 14.5 14.9 23.7 7.5 13.7 15.3 7.1 47 Savings and loan associations 7.4 15.5 2.5 -2.1 22.7 22.3 4.6 20.2 25.1 12.1 32.6 31.9 48 Finance companies -1.3 18.5 4.3 11.4 17.8 52.8 18.0 4.4 31.2 44.9 60.8 28.9 49 REITs -.5 -.2 * -.2 .8 .5 -.3 .8 .8 .5 .5 1.7 All sectors' 50 Total net borrowing 434.1 501.3 493.5 660.2 901.4 1048.1 730.2 898.5 904.3 877.0 1219.2 882.5 51 U.S. government securities 122.9 133.0 225.9 254.4 273.8 324.2 225.5 250.9 296.7 294.3 354.0 340.2 52 State and local obligations 30.3 23.4 44.2 53.7 50.4 152.4 51.8 42.7 58.0 67.4 237.3 11.8 53 Corporate and foreign bonds 30.1 32.6 37.8 31.2 70.7 114.4 26.8 49.6 91.8 113.5 115.3 160.1 54 Mortgages 131.1 109.2 85.4 183.0 217.8 236.1 214.5 224.9 210.7 214.0 258.2 230.3 55 Consumer credit 4.5 22.6 17.7 56.8 95.0 96.6 75.1 98.7 91.3 97.3 95.9 74.9 56 Bank loans n.e.c 48.5 61.2 49.3 29.3 74.2 37.6 39.8 90.7 57.6 23.3 51.8 9.3 57 Open market paper 19.3 51.3 5.7 26.9 52.0 52.8 51.2 73.9 30.1 30.4 75.2 20.0 58 Other loans 47.5 68.0 27.6 24.8 67.6 34.1 45.4 67.1 68.0 36.6 31.5 35.9 External corporate equity funds raised in United States' 59 Total new share issues 21.2 -3.3 33.6 67.0 -31.1 37.5 52.1 -40.1 -22.2 33.3 41.6 163.4 60 Mutual funds 4.5 6.0 16.8 32.1 38.0 103.4 28.7 39.3 36.6 93.6 113.1 214.1 61 All other 16.8 -9.3 16.8 34.9 -69.1 -65.9 23.4 -79.4 -58.8 -60.4 -71.5 -50.7 62 Nonfinancial corporations 12.9 -11.5 11.4 28.3 -77.0 -81.6 18.4 -84.5 -69.4 -75.7 -87.5 -67.5 63 Financial corporations 1.8 1.9 4.0 2.7 6.7 11.7 2.9 5.9 7.6 11.0 12.4 8.3 64 Foreign shares purchased in United States 2.1 .3 1.5 3.9 1.2 4.0 2.1 -.7 3.0 4.3 3.6 8.5 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' 1986' TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 119988CCKK 119988 llrr 11998822'' 11998833'' 11998844'' 11998855'' H2 HI H2 HI H2 HI 1 Total funds advanced in credit markets to domestic nonfinancial sectors 344.9 375.8 387.4 548.8 756.3 859.1 591.5 728.8 783.8 726.3 992.0 668.6 By public agencies and foreign 7 Total net advances 94.9 104.4 115.4 115.3 115544..66 119933..00 110066..88 113333..44 117755..88 119955..66 119900..33 225555..99 3 U.S. government securities 15.8 17.1 22.7 27.6 36.0 43.1 19.0 27.6 44.4 50.1 36.1 63.3 4 Residential mortgages 31.7 23.5 61.0 76.1 56.5 94.6 71.5 52.7 60.2 85.6 103.7 121.2 5 FHLB advances to savings and loans 7.1 16.2 .8 -7.0 15.7 14.2 -1.8 15.7 15.7 11.7 16.7 13.5 6 Other loans and securities 40.2 47.7 30.8 18.6 46.5 41.0 18.1 37.5 55.5 48.2 33.9 57.9 Total advanced, by sector 7 U.S. government 23.7 24.0 15.9 9.7 17.4 10.8 9.7 9.0 25.7 2200..88 .7 77..99 8 Sponsored credit agencies 45.6 48.2 65.5 69.8 73.3 101.5 70.5 74.0 72.5 98.2 104.9 128.0 9 Monetary authorities 4.5 9.2 9.8 10.9 8.4 21.6 12.2 9.0 7.8 24.0 19.2 10.1 10 Foreign 21.1 23.0 24.1 24.9 55.5 59.1 14.5 41.3 69.8 52.6 65.6 109.9 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 44.8 47.4 64.9 67.8 7744..99 110011..55 6688..88 6699..88 8800..00 9922..99 111100..22 113300..22 12 Foreign 23.8 23.5 16.0 17.4 6.1 2.1 15.5 35.4 -23.2 -4.2 8.4 27.5 Private domestic funds advanced 13 Total net advances 318.7 342.3 352.9 518.7 682.7 769.8 569.1 700.6 664.8 619.4 920.2 570.4 14 U.S. government securities 107.1 115.9 203.1 226.9 237.8 281.1 206.5 223.3 252.3 244.2 317.9 276.8 15 State and local obligations 30.3 23.4 44.2 53.7 50.4 152.4 51.8 42.7 58.0 67.4 237.3 11.8 16 Corporate and foreign bonds 20.3 19.8 14.8 14.6 32.6 36.5 9.0 25.6 39.5 47.1 25.9 8888..88 17 Residential mortgages 70.0 53.5 -5.3 55.0 98.5 86.3 83.9 109.9 87.0 71.9 100.8 5577..77 18 Other mortgages and loans 98.1 145.9 96.9 161.5 279.1 227.7 216.0 314.7 243.6 200.4 255.0 148.7 19 LESS: Federal Home Loan Bank advances 7.1 16.2 .8 -7.0 15.7 14.2 -1.8 15.7 15.7 11.7 16.7 13.5 Private financial intermediation 70 Credit market funds advanced by private financial 286.2 320.2 261.9 391.9 550.5 547.2 447.6 583.4 517.5 461.2 633.2 574.1 ?1 Commercial banking 107.6 106.5 110.2 144.3 168.9 186.8 167.2 185.7 152.0 135.8 237.9 86.6 ?? Savings institutions 51.3 26.2 21.8 135.6 149.2 85.7 143.8 173.6 124.9 63.1 108.3 113.8 73 Insurance and pension funds 93.2 93.5 86.2 97.8 124.0 133.4 105.7 144.6 103.5 113.9 153.0 141.5 24 Other finance 34.0 94.0 43.7 14.1 108.3 141.3 30.9 79.5 137.1 148.4 134.1 232.1 ?5 286.2 320.2 261.9 391.9 550.5 547.2 447.6 583.4 517.5 461.2 633.2 574.1 76 Private domestic deposits and RPs 170.8 214.5 195.2 212.2 317.6 206.9 235.7 300.3 334.8 201.8 212.1 215.1 27 Credit market borrowing 20.6 54.5 25.2 26.2 64.1 85.3 54.3 64.5 63.8 62.0 108.7 56.2 78 Other sources 94.8 51.2 41.5 153.4 168.8 254.9 157.6 218.6 119.0 197.4 312.5 302.7 79 Foreign funds -25.1 -23.7 -31.4 16.3 5.4 16.2 46.2 3.0 7.8 11.2 21.2 -6.4 30 Treasury balances -2.6 -1.1 6.1 -5.3 4.0 10.3 -21.9 -.4 8.5 13.9 6.6 -7.8 31 Insurance and pension reserves 88.9 89.6 92.5 110.6 112.5 102.2 122.4 146.5 78.5 92.0 112.5 107.7 32 Other, net 33.6 -13.6 -25.7 31.8 46.8 126.3 10.9 69.5 24.2 80.4 172.2 209.3 Private domestic nonfinancial investors 33 Direct lending in credit markets 53.1 76.6 116.3 153.0 196.4 307.9 175.8 181.7 211.0 222200..22 395.6 5522..55 34 U.S. government securities 34.2 37.1 . 69.9 95.5 132.9 156.8 89.2 140.9 125.0 134.4 179.3 55.7 35 State and local obligations 7.0 11.1 25.0 39.0 29.6 58.8 37.8 25.0 34.3 20.2 97.4 -37.1 36 Corporate and foreign bonds -11.7 -4.0 2.0 -12.7 -3.4 15.5 -4.5 -26.7 19.9 34.5 -3.5 27.2 37 Open market paper -4.6 1.4 -1.3 15.1 8.9 49.9 32.1 15.6 2.3 4.9 94.9 -16.4 38 Other 28.2 31.0 20.6 16.2 28.3 26.9 21.2 26.9 29.7 26.3 27.6 23.1 39 Deposits and currency 183.9 222.4 204.5 229.7 321.1 217.2 248.8 311.5 330.7 215.0 219.3 216.6 40 Currency 10.3 9.5 9.7 14.3 8.6 12.4 17.4 13.2 4.1 15.9 8.9 11.4 41 6.5 18.5 18.6 28.8 27.8 44.2 16.2 30.2 25.4 18.1 70.2 76.0 47 Small time and savings accounts 82.3 47.3 135.7 215.3 150.7 137.5 148.1 136.2 165.1 166.7 108.3 115.5 43 Money market fund shares 29.2 107.5 24.7 -44.1 47.2 -2.2 -4.2 30.2 64.2 4.2 -8.6 29.0 44 Large time deposits 45.9 36.0 5.2 -6.3 84.9 14.0 53.8 92.9 77.0 -1.5 29.6 -5.4 45 Security RPs 6.8 5.2 11.1 18.5 7.0 13.4 21.8 10.8 3.1 14.3 12.5 .1 46 Deposits in foreign countries 2.8 -1.7 -.4 3.1 -5.1 -2.1 -4.3 -2.0 -8.2 -2.6 -1.7 -10.0 47 Total of credit market instruments, deposits and currency 237.0 299.0 320.7 382.7 517.4 525.1 424.6 493.2 541.7 435.2 614.9 269.0 48 Public holdings as percent of total 25.7 26.2 28.6 20.4 20.3 22.4 17.6 17.5 23.1 27.1 19.0 36.8 49 Private financial intermediation (in percent) 89.8 93.6 74.2 75.5 80.6 71.1 78.7 83.3 77.8 74.5 68.8 100.7 50 Total foreign funds -4.0 -.7 -7.3 41.3 60.9 75.2 60.6 44.3 77.6 63.7 86.7 103.5 MEMO: Corporate equities not included above 51 Total net issues 21.2 -3.3 33.6 67.0 -31.1 37.5 52.1 -40.1 --2222..22 3333..33 4411..66 116633..44 57 Mutual fund shares 4.5 6.0 16.8 32.1 38.0 103.4 28.7 39.3 36.6 93.6 113.1 214.1 53 Other equities 16.8 -9.3 16.8 34.9 -69.1 -65.9 23.4 -79.4 -58.8 -60.4 -71.5 -50.7 54 Acquisitions by financial institutions 22.2 19.9 27.6 46.8 8.2 31.2 35.6 -4.1 20.6 48.0 14.3 28.5 55 Other net purchases -1.0 -23.2 6.0 20.2 -39.4 6.3 16.5 -36.0 -42.7 -14.7 27.3 134.9 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 • November 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 Dec. Jan. Feb. Mar. Apr.' May' June' July' Aug. 1 Industrial production 109.2 121.8 124.5 125.6' 126.2' i25.y 123.6"- 124.7 124.2 124.2 124.6 124.8 Market groupings 2 Products, total 113.9 127.1 131.7 133.CK 134.(K 132.9' 131.2' 132.7 132.4 132.2 132.9 133.3 3 Final, total 114.7 127.8 132.0 133.2' 133.9' 132.8' 130.6' 132.1 131.6 130.9 131.7 132.2 4 Consumer goods 109.3 118.2 120.7 123.3' 123.8' 123.3' 121.8' 124.5 124.3 124.2 124.8 125.1 5 Equipment 121.7 140.5 147.1 146.4' 147.5' 145.4' 142.3' 142.3 141.2 139.7 140.8 141.6 6 Intermediate 111.2 124.9 130.6 132.0' 134.2' 133.4' 133.3' 134.5 135.1 136.7 136.9 137.4 7 Materials 102.8 114.6 114.7 115.4' 115.5' 114.8' 113.3' 113.8 113.0 113.3 113.3 113.1 Industry groupings 8 Manufacturing 110.2 123.9 127.1 128.2' 129.4' 128.7' 127.2' 128.7 128.2 128.0 128.8 129.2 Capacity utilization (percent)2 9 Manufacturing 74.0 80.8 80.3 80.2' 80.8' 80.2' 79.1 79.9 79.4 79.1 79.5 79.6 10 Industrial materials industries 75.3 82.3 80.2 80.3' 80.1' 79.6 78.5 78.7 78.1 78.2 78.1 77.9 11 Construction contracts (1977 = 100)3 138.0 150.0 161.0 162.0 146.0 162.0 149.0 176.0 160.0 161.0 163.0 168.0 12 Nonagricultural employment, total4 109.4 114.5 118.5 119.9 120.4 120.6 120.6 121.0 121.2 121.1 121.4 121.7 13 Goods-producing, total 95.9 101.6 102.9 102.6 103.1 102.9 102.5 102.9 102.6 102.1 102.1 102.4 14 Manufacturing, total 93.6 98.6 98.7 98.0 98.0 98.0 97.8 97.8 97.5 97.2 97.1 97.2 15 Manufacturing, production-worker ... 88.6 94.1 93.5 92.7 92.7 92.6 92.4 92.4 92.1 91.8 91.7 91.8 16 Service-producing 115.0 120.0 125.0 127.2 127.6 128.0 128.2 128.6 129.0 129.0 129.5 129.7 17 Personal income, total 176.6' 193.5' 206.2 212.6 212.6 213.7 214.3 216.9 216.6 216.6 217.3 218.1 18 Wages and salary disbursements 168.7' 184.8' 197.8 204.4 204.8 205.7 206.4 206.8 207.1 207.6 208.3 209.5 19 Manufacturing 149.0 164.6 172.5 176.8 176.6 176.2 176.4 175.8 176.1 175.4 175.3 176.5 20 Disposable personal income5 176.0 193.6 205.0 211.2 211.8 212.9 213.7 216.5 215.9 215.5 216.0 216.6 21 Retail sales (1977 = 100)6 162.0 179.0 190.6 194.0 194.8 194.5 193.7 195.4 197.0 197.5 197.9 199.5 Prices7 22 Consumer 298.4 311.1 322.2 327.4 328.4 327.5 326.0 325.3 326.3 327.9 328.6 328.6 23 Producer finished goods 285.2 291.1 293.7 297.2 296.0 291.9 288.1 287.2 289.0 288.9 288.3 288.3 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 7. Data without seasonal adjustment, as published in Monthly Labor Review. (July 1985), pp. 487-501. The revised indexes for January through June 1985 were Seasonally adjusted data for changes in the price indexes may be obtained from shown in the September BULLETIN. the Bureau of Labor Statistics, U.S. Department of Labor. 2. Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, Department of Com- NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6, merce, and other sources. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 3. Index of dollar value of total construction contracts, including residential, of Current Business. nonresidential and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the last two months are preliminary and Company, F. W. Dodge Division. estimated, respectively. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1986 CCaatteeggoorryy 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May Juner July' Aug. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 176,414 178,602 180,440 181,898 182,055 182,223 182,387 182,545 182,732 182,906 183,074 2 Labor force (including Armed Forces)' 113,749 115,763 117,695 119,014 119,322 119,445 119,473 119,898 120,345 120,296 120,428 3 Civilian labor force 111,550 113,544 115,461 116,786 117,088 117,207 117,234 117,664 118,116 118,072 118,182 4 Nonagricultural industries2 97,450 101,685 103,971 105,655 105,465 105,503 105,670 105,950 106,508 106,769 107,107 5 Agriculture 3,383 3,321 3,179 3,299 3,096 3,285 3,222 3,160 3,165 3,112 3,048 Unemployment 6 Number 10,717 8,539 8,312 7,831 8,527 8,419 8,342 8,554 8,443 8,190 8,027 7 Rate (percent of civilian labor force) ... 9.6 7.5 7.2 6.7 7.3 7.2 7.1 7.3 7.1 6.9 6.8 8 Not in labor force 62,665 62,839 62,745 62,884 62,733 62,778 62,914 62,647 62,387 62,610 62,646 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,196 94,461 97,698 99,296 99,429 99,484 99,783 99,918 99,843 100,122 100,324 10 Manufacturing 18,434 19,412 19,426 19,303 19,294 19,255 19,245 19,201 19,135 19,116 19,135 11 Mining 952 974 969 897 880 852 821 790 772 764 752 12 Contract construction 3,948 4,345 4,661 4,901 4,864 4,838 4,972 4,974 4,947 4,981 5,036 13 Transportation and public utilities 4,954 5,171 5,300 5,286 5,277 5,280 5,266 5,265 5,167 5,276 5,236 14 Trade 20,881 22,134 23,195 23,564 23,638 23,669 23,715 23,783 23,773 23,848 23,893 15 Finance 5,468 5,682 5,924 6,123 6,157 6,184 6,228 6,261 6,295 6,335 6,376 16 Service 19,694 20,761 21,929 22,585 22,638 22,707 22,825 22,924 23,072 23,182 23,248 17 Government 15,869 15,984 16,295 16,637 16,681 16,699 16,711 16,720 16,682 16,620 16,648 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 • November 1986 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1985' 1986' 1985' 1986' 1985' 1986' denes Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 124.0 124.7 125.0 124.3 154.4 155.4 156.3 157.1 80.3 80.2 80.0 79.2 2 Mining 107.9 107.1 105.4 100.1 132.4 132.5 132.1 132.1 81.5 80.9 79.6 75.7 3 Utilities 111.1 112.8 110.5 109.5 135.0 135.7 136.3 136.9 82.3 83.2 81.1 80.0 4 Manufacturing 126.8 127.4 128.4 128.3 158.4 159.5 160.5 161.4 80.1 79.9 80.0 79.5 5 Primary processing ... 109.2 110.3 111.5 111.1 132.7 133.1 133.6 134.0 82.3 82.8 83.5 82.9 6 Advanced processing , 137.4 137.8 138.5 138.8 173.9 175.3 176.7 177.9 79.0 78.6 78.4 78.0 7 Materials 113.8 114.3 114.5 113.4 142.8 143.6 144.2 144.7 79.7 79.6 79.4 78.3 8 Durable goods 120.4 121.1 120.9 118.8 157.8 159.0 159.9 160.7 76.3 76.2 75.6 73.9 9 Metal materials .... 79.6 82.6 79.0 75.2 115.9 115.5 115.0 114.5 68.7 71.5 68.7 65.7 10 Nondurable goods 113.4 113.9 115.7 116.8 138.1 138.6 139.0 139.5 82.1 82.2 83.2 83.8 11 Textile, paper, and chemical.. 113.3 114.0 116.2 117.0 137.5 138.0 138.4 138.8 82.4 82.7 83.9 84.3 12 Paper 123.8 124.8 128.8 130.2 135.8 136.5 137.3 138.1 91.1 91.4 93.8 94.3 13 Chemical 113.6 113.4 115.3 115.4 143.1 143.6 144.0 144.3 79.4 79.0 80.1 79.9 14 Energy materials 102.5 102.6 102.2 100.8 120.6 120.9 121.1 121.3 85.0 84.9 84.4 83.1 Previous cycle1 Latest cycle2 1985 1985' 1986' High Low High Low Aug. Dec. Jan. Feb. Mar. Apr. May June July Aug. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 80.6 80.6 80.9 80.2 79.0 79.5 79.1 78.9 79.1 79.0 16 Mining 92.8 87.8 95.2 76.9 81.6 81.1 81.6 79.4 77.9 76.4 75.5 75.3 73.8 72.8 17 Utilities 95.6 82.9 88.5 78.0 81.5 84.5 82.7 80.4 80.1 80.0 79.3 80.6 80.0 78.7 18 Manufacturing 87.7 69.9 86.5 68.0 80.3 80.2 80.8 80.2 79.1 79.9 79.4 79.1 79.5 79.6 19 Primary processing ... 91.9 68.3 89.1 65.1 82.5 83.0 84.4 83.6 82.4 83.2 82.9 82.6 82.7 83.2 20 Advanced processing 86.0 71.1 85.1 69.5 79.3 79.0 79.2 78.6 77.4 78.5 78.0 77.6 78.1 78.0 21 Materials 92.0 70.5 89.1 68.4 79.8 80.3 80.1 79.6 78.5 78.7 78.1 78.2 78.1 77.9 22 Durable goods 91.8 64.4 89.8 60.9 76.8 76.5 76.5 75.9 74.5 74.9 73.7 73.2 73.5 73.4 23 Metal materials 99.2 67.1 93.6 45.7 70.2 71.8 71.0 69.0 66.0 68.3 65.2 63.5 64.1 63.6 24 Nondurable goods .... 91.1 66.7 88.1 70.6 81.6 82.8 83.7 83.5 82.5 83.6 83.5 84.2 84.4 85.0 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 81.7 83.3 84.3 84.2 83.4 83.6 84.2 85.0 85.0 85.9 76 98.4 70.6 97.3 79.9 89.7 94.3 94.6 93.8 93.0 93.6 93.1 96.1 95.6 77 92.5 64.4 87.9 63.3 78.7 79.4 80.8 80.2 79.4 79.4 80.2 80.3 80.2 28 Energy materials 94.6 86.9 94.0 82.2 84.8 86.4 85.1 84.3 83.7 82.8 82.9 83.7 82.7 81.2 1. Monthly high 1973; monthly low 1975. NOTE. These data also appear in the Board's G.3 (402) release. For address, see 2. Monthly highs 1978 through 1980; monthly lows 1982. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value A Monthly data are seasonally adjusted 1977 11998855'' 1986' pro- 11998855 Grouping por- avg. tion Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.* Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 123.8 124.4 124.3 123.6 124.8 125.6 126.2 125.3 123.6 124.7 124.2 124.2 124.6 124.8 2 Products 57.72 130.8 132.1 132.0 131.0 132.8 133.0 134.0 132.9 131.2 132.7 132.4 132.2 132.9 133.3 3 Final products 44.77 131.1 132.2 132.2 131.0 133.1 133.2 133.9 132.8 130.6 132.1 131.6 130.9 131.7 132.2 4 Consumer goods 25.52 120.2 120.9 121.1 120.5 122.7 123.3 123.8 123.3 121.8 124.5 124.3 124.2 124.8 125.1 5 Equipment 19.25 145.4 147.1 146.9 144.9 147.0 146.4 147.5 145.4 142.3 142.3 141.2 139.7 140.8 141.6 6 Intermediate products 12.94 130.0 131.7 131.3 131.2 131.8 132.0 134.2 133.4 133.3 134.5 135.1 136.7 136.9 137.4 7 Materials 42.28 114.2 113.9 113.8 113.4 113.9 115.4 115.5 114.8 113.3 113.8 113.0 113.3 113.3 113.1 Consumer goods 8 Durable consumer goods 6.89 112.9 114.5 113.1 112.3 115.4 115.3 116.0 116.6 112.4 115.9 113.8 114.3 115.9 115.2 9 Automotive products 2.98 114.0 118.6 116.2 113.2 115.6 113.9 116.2 117.6 110.4 116.4 113.2 113.7 115.8 113.4 10 Autos and trucks 1.79 112.0 119.4 115.8 111.3 114.1 110.4 118.2 119.4 106.3 115.1 110.3 112.2 114.5 110.8 11 Autos, consumer 1.16 98.9 101.2 98.8 94.9 95.6 94.6 105.5 107.1 93.7 100.8 94.8 99.3 95.3 87.8 12 Trucks, consumer .63 136.3 153.1 147.4 141.8 148.6 139.8 141.7 142.1 129.6 141.5 139.1 136.1 150.3 13 Auto parts and allied goods 1.19 116.9 117.3 116.8 116.0 117.7 119.0 113.3 114.9 116.6 118.4 117.4 116.1 117.7 117.5 14 Home goods 3.91 112.2 111.4 110.7 111.6 115.3 116.4 115.8 115.8 113.9 115.5 114.3 114.8 116.0 116.5 15 Appliances, A/C and TV 1.24 131.0 128.7 126.1 127.5 138.8 140.4 133.2 135.1 133.7 138.8 133.9 137.5 138.9 139.9 16 Appliances and TV 1.19 131.8 129.5 128.3 129.8 141.3 143.2 135.7 137.6 136.0 140.6 135.8 139.1 141.5 17 Carpeting and furniture .96 119.8 119.5 121.7 121.9 124.6 123.3 125.1 124.4 121.2 121.8 123.3 122.5 125.2 18 Miscellaneous home goods 1.71 94.3 94.3 93.3 94.4 93.1 95.1 98.0 97.0 95.5 95.0 95.0 94.1 94.2 19 Nondurable consumer goods 18.63 122.9 123.3 124.1 123.5 125.3 126.3 126.6 125.8 125.3 127.7 128.1 127.9 128.1 128.7 20 Consumer staples 15.29 129.0 129.5 130.1 129.4 131.3 132.5 132.8 132.3 131.6 134.3 135.0 134.9 135.0 135.8 21 Consumer foods and tobacco 7.80 128.8 129.7 130.1 128.7 130.5 131.6 130.1 131.1 130.3 131.9 132.4 132.7 132.6 22 Nonfood staples 7.49 129.2 129.3 130.1 130.1 132.1 133.4 135.6 133.5 133.0 136.7 137.7 137.1 137.4 138.6 23 Consumer chemical products .. 2.75 149.1 149.7 152.9 149.1 154.8 153.6 156.3 158.3 156.4 163.1 162.4 163.6 167.1 24 Consumer paper products 1.88 141.9 141.6 142.6 143.5 143.2 146.5 148.9 143.4 143.1 145.1 148.6 147.2 144.6 25 Consumer energy 2.86 101.8 101.8 99.9 103.0 103.1 105.4 107.0 103.2 104.0 106.0 106.8 104.9 104.3 26 Consumer fuel 1.44 88.6 90.3 84.6 90.1 89.8 91.7 94.1 92.0 92.2 93.7 96.4 92.0 91.2 27 Residential utilities 1.42 115.3 113.4 115.5 116.2 116.6 119.4 120.1 114.5 116.1 118.4 117.5 118.1 Equipment 28 Business and defense equipment 18.01 146.0 147.5 147.4 145.7 148.2 147.8 149.1 147.8 145.5 146.6 146.0 144.8 146.1 146.9 29 Business equipment 14.34 139.6 141.0 140.4 138.3 140.8 140.0 141.5 140.5 137.7 138.6 137.9 136.2 137.5 137.9 30 Construction, mining, and farm .. 2.08 64.3 64.6 64.4 64.2 65.1 66.3 65.3 63.0 59.5 58.6 60.9 61.9 60.7 31 Manufacturing 3.27 110.7 111.9 112.2 110.0 110.5 111.6 113.0 112.9 112.4 111.9 111.9 111.7 112.4 111.9 32 Power 1.27 83.5 84.8 84.3 85.3 84.1 85.4 82.9 82.3 82.0 83.0 82.9 83.5 81.4 81.2 33 Commercial 5.22 217.9 219.5 216.9 212.3 218.6 217.0 217.8 216.8 214.3 213.4 212.9 207.2 213.6 214.8 34 Transit 2.49 105.4 107.1 109.5 109.5 109.7 105.5 112.7 111.7 104.3 112.1 107.3 108.8 104.1 107.9 35 Defense and space equipment 3.67 170.6 173.3 174.5 174.8 177.2 178.5 178.7 176.3 176.2 178.0 178.0 178.4 179.7 182.2 Intermediate products 36 Construction supplies 5.95 118.3 120.4 120.3 120.2 120.5 119.8 124.0 122.6 122.6 123.6 123.5 124.1 124.2 125.1 37 Business supplies 6.99 140.0 141.3 140.7 140.5 141.5 142.4 142.9 142.6 142.5 143.8 145.0 147.4 147.7 38 General business supplies 5.67 143.9 145.7 144.2 144.3 145.3 146.2 147.2 146.7 146.4 148.0 148.3 151.0 152.1 39 Commercial energy products 1.31 122.9 122.2 125.4 123.8 125.4 126.2 124.4 124.9 125.6 125.8 130.7 131.9 128.5 Materials 40 Durable goods materials 20.50 121.4 121.2 119.9 120.1 121.2 121.9 122.2 121.3 119.3 120.2 118.4 117.9 118.5 118.5 41 Durable consumer parts 4.92 100.3 99.7 98.6 99.8 100.7 101.1 103.5 103.2 99.9 99.3 96.4 96.3 95.7 94.8 42 Equipment parts 5.94 158.0 157.7 155.4 152.7 154.0 154.1 153.8 153.0 153.7 154.8 152.3 151.7 154.3 155.0 43 Durable materials n.e.c 9.64 109.7 109.7 108.9 110.3 111.4 112.8 112.2 111.0 108.0 109.4 108.8 108.1 108.1 108.0 44 Basic metal materials 4.64 84.8 85.5 84.0 85.5 87.8 87.9 85.2 83.0 79.6 82.9 78.9 77.1 77.8 45 Nondurable goods materials 10.09 112.2 112.7 114.2 113.6 113.3 114.9 116.2 116.1 114.8 116.5 116.5 117.6 117.9 119.0 46 Textile, paper, and chemical materials 7.53 112.2 112.4 114.4 113.7 113.4 115.0 116.5 116.5 115.5 115.9 116.9 118.1 118.2 119.6 47 Textile materials 1.52 98.7 102.0 104.3 105.2 106.1 103.8 104.1 107.5 105.7 106.7 108.4 109.5 110.7 48 Pulp and paper materials 1.55 124.1 121.9 123.8 121.8 123.6 129.0 129.7 128.8 128.0 129.0 128.6 133.0 132.5 49 Chemical materials 4.46 112.7 112.7 114.6 113.7 112.4 114.0 116.2 115.4 114.5 114.5 115.7 115.9 115.9 50 Miscellaneous nondurable materials 2.57 112.1 113.8 113.5 113.4 112.8 114.4 115.4 115.0 112.8 118.2 115.3 116.0 117.1 51 Energy materials 11.69 103.4 102.2 102.8 101.5 101.8 104.5 103.0 102.1 101.4 100.4 100.5 101.5 100.4 98.6 52 Primary energy 7.57 107.2 106.2 106.3 105.5 106.5 108.1 106.9 106.7 107.4 106.2 106.7 106.8 104.6 53 Converted fuel materials 4.12 96.4 94.9 96.2 94.2 93.3 97.9 95.8 93.6 90.5 89.7 89.2 91.8 92.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • November 1986 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1985' 1986' Grouping c S o I d C e p p r o o r - - a 1 v 98 g 5 . tion Aug. Sept. Oct. Nov. Dec Jan. Feb. Mar. Apr. May June JulyP Aug Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities. 15.79 110.0 108.8 110.1 108.8 108.8 110.2 109.8 106.8 105.4 104.2 103.1 103.6 102.1 100.6 2 Mining 9.83 108.8 108.1 108.2 106.9 106.9 107.4 108.1 105.1 103.0 101.0 99.8 99.4 97.4 96.0 3 Utilities 5.96 111.9 110.0 113.3 111.8 111.9 114.8 112.5 109.7 109.3 109.4 108.5 110.4 109.8 108.2 4 Manufacturing 84.21 126.4 127.2 127.0 126.3 127.8 128.2 129.4 128.7 127.2 128.7 128.2 128.0 128.8 129.2 5 Nondurable 35.11 125.1 126.0 126.4 125.8 127.2 127.5 129.3 128.7 127.7 129.6 129.9 130.6 131.4 132.1 6 Durable 49.10 127.3 128.1 127.4 126.7 128.2 128.7 129.5 128.7 126.8 128.1 127.0 126.2 127.0 127.1 Mining 7 Metal 10 .50 75.0 74.9 73.8 76.0 78.3 77.3 73.5 77.2 75.9 76.0 72.0 8 Coal 11.12 1.60 126.8 125.0 126.9 122.9 125.8 128.4 130.8 126.5 124.7 124.4 124.0 127.3 120.2 9 Oil and gas extraction ... 13 7.07 106.2 105.7 105.4 104.4 103.6 104.2 104.9 101.1 99.2 96.2 95.1 93.7 92.4 91.0 10 Stone and earth minerals. 14 .66 118.3 118.1 118.8 118.5 118.0 114.6 113.5 116.8 111.6 115.0 112.4 114.5 112.6 Nondurable manufactures 11 Foods 20 7.96 130.2 131.5 132.2 129.4 131.5 132.1 132.0 132.9 132.2 133.1 133.7 134.0 134.1 12 Tobacco products 21 .62 100.2 98.3 98.9 103.2 102.8 100.3 93.8 97.0 93.6 100.3 101.6 97.6 13 Textile mill products 22 2.29 103.2 104.2 107.0 107.7 110.0 107.7 107.9 109.9 108.0 111.4 111.3 112.6 112.8 14 Apparel products 23 2.79 100.9 100.0 101.8 102.1 103.8 104.5 105.5 102.8 102.8 103.1 102.6 101.7 102.1 15 Paper and products 26 3.15 127.6 126.5 128.0 127.7 128.9 131.3 133.6 132.6 132.4 134.1 133.2 136.0 138.3 16 Printing and publishing 27 4.54 153.9 155.8 153.4 154.5 156.8 157.6 160.9 156.7 157.8 161.6 161.9 163.2 165.0 165.7 17 Chemicals and products 28 8.05 127.1 127.9 129.1 127.3 128.2 128.1 131.7 132.0 130.2 132.8 131.5 133.1 134.2 18 Petroleum products 29 2.40 86.8 89.2 85.3 87.9 87.6 88.9 94.7 90.1 88.6 91.3 95.7 91.9 90.4 93.7 19 Rubber and plastic products. 30 2.80 146.9 148.2 148.8 149.0 150.1 149.4 150.2 151.1 147.8 146.8 150.1 152.2 153.5 20 Leather and products 31 .53 68.5 70.7 70.1 68.2 68.7 66.4 65.4 64.8 62.7 61.5 59.5 57.9 60.0 Durable manufactures 21 Lumber and products 24 2.30 113.4 115.3 116.0 116.2 115.0 116.1 120.5 120.3 120.7 121.3 121.6 120.9 22 Furniture and fixtures 25 1.27 139.7 140.9 142.8 140.0 142.2 140.5 141.2 143.2 142.9 145.9 146.2 147.1 148.9 23 Clay, glass, stone products. 32 2.72 115.5 116.4 117.4 116.1 116.7 118.2 120.0 119.3 120.0 121.6 120.2 120.8 118.9 24 Primary metals 33 5.33 80.5 82.3 80.8 81.9 82.9 81.7 82.4 80.3 76.3 78.1 74.8 71.3 73.1 73.3 25 Iron and steel 331.2 3.49 70.4 72.3 70.3 72.4 73.9 71.6 72.2 69.5 64.3 65.6 60.2 58.3 61.3 26 Fabricated metal products 34 6.46 107.3 107.4 106.7 107.9 107.6 108.2 109.2 108.5 107.6 108.2 106.5 106.6 105.7 106.5 27 Nonelectrical machinery .. 35 9.54 145.3 145.4 144.2 141.7 144.8 146.2 144.9 143.9 141.7 140.8 141.3 140.4 142.0 140.5 28 Electrical machinery 36 7.15 168.4 165.8 164.5 164.2 166.9 168.7 166.1 164.8 165.2 166.8 166.0 163.2 167.2 167.7 29 Transportation equipment 37 9.13 121.4 125.0 124.5 123.3 124.8 124.0 128.2 127.5 122.6 126.2 124.1 125.1 125.2 124.8 30 Motor vehicles and parts 371 5.25 111.5 115.6 113.7 111.4 112.6 111.4 116.5 116.4 108.1 112.6 108.7 110.6 110.5 108.0 31 Aerospace and miscellaneous transportation equipment. 372-6.9 3.87 134.9 137.8 139.1 139.4 141.3 141.0 143.9 142.6 142.4 144.8 145.0 144.7 145.0 147.5 32 Instruments 38 2.66 139.1 141.0 139.0 138.4 139.9 140.4 141.5 141.9 142.0 142.4 140.3 139.9 138.5 140.0 33 Miscellaneous manufactures.... 39 1.46 96.1 96.5 95.3 95.0 94.8 96.6 100.9 100.9 99.0 99.2 101.0 98.3 97.3 Utilities 34 Electric. 44..1177 111199..77 111177..66 112200..88 111199..44 112200..11 112222..44 111199..77 111199..55 111199..88 112211..66 112211..77 112233..33 112222..00 Gross value (billions of 1978 dollars, annual rates) MAJOR MARKET 35 Products, total 517.5 1,650.9 1,663.7 1,653.8 1,658.6 1,680.6 1,676.6 1,702.1 1,686.5 1,660.8 1,686.3 1,687.6 1,674.4 1,664.9 1,675.9 36 Final 405.7 1,282.3 1,290.6 1,283.5 1,284.6 1,304.9 1,302.5 1,321.2 1,310.3 1,282.5 1,307.0 1,301.1 1,287.7 1,280.1 1,289.1 37 Consumer goods . 272.7 820.7 826.4 817.3 822.1 838.1 841.7 850.7 845.3 832.0 852.3 852.4 842.7 840.5 846.3 38 Equipment 133.0 461.7 464.2 466.2 462.5 466.8 460.8 470.5 465.1 450.4 454.7 448.7 445.0 439.6 442.8 39 Intermediate 111.9 368.6 373.0 370.3 374.0 375.7 374.1 380.8 376.2 378.3 379.3 386.4 386.8 384.8 386.8 • 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May' June' July Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,605 1,682 1,733 1,703 1,668 1,839 1,861 1,808 1,834 1,885 1,788 1,792 1,759 7 1-family 902 922 957 984 932 963 1,060 1,033 1,043 1,139 1,092 1,121 1,093 3 2-or-more-family 703 759 111 719 736 876 801 775 791 746 696 671 666 4 Started 1,703 1,749 1,742 1,784 1,654 1,882 2,034 2,001 1,960 2,019 1,853 1,852 1,815 1-family 1,067 1,084 1,072 1,118 1,006 1,098 1,335 1,202 1,221 1,242 1,241 1,230 1,162 6 2-or-more-family 635 665 669 666 648 784 699 799 739 777 612 622 653 7 Under construction, end of period1 1,003 1,051 1,063 1,089 1,087 1,088 1,094 1,110 1,099 1,135 1,132 1,153 1,163 8 1-family 524 556 539 578 570 561 571 581 574 586 597 612 627 9 2-or-more-family 479 494 524 512 517 528 522 529 526 549 534 542 536 10 Completed 1,390 1,652 1,703 1,541 1,721 1,762 1,778 1,725 1,806 1,693 1,829 1,613 1,732 11 1-family 924 1,025 1,072 1,072 1,095 1,141 1,075 1,038 1,153 1,127 1,140 1,058 1,056 12 2-or-more-family 466 627 631 469 626 621 703 687 653 566 689 555 676 13 Mobile homes shipped 296 296 284 291 287 285 280 266 240 249 239 226 236 Merchant builder activity in 1-family units 14 Number sold 622 639 688 637 722 729 735 741 924 880' 784 697 658 15 Number for sale, end of period1 304 358 350 353 353 349 352 352 338 336' 338 344 352 Price (thousands of dollars)2 Median 16 Units sold 75.5 80.0 84.3 85.4 87.2 87.9 86.6 89.7 88.7 92.5' 91.8 90.0 93.9 17 Units sold 89.9 97.5 101.0 102.7 104.1 106.1 104.1 106.6 108.0 110.3 114.8 109.8 116.9 EXISTING UNITS (1-family) 18 Number sold 2,719 2,868 3,217 3,530 3,450 3,520 3,300 3,270 3,200 3,570 3,450 3,390 3,450 Price of units sold (thousands of dollars)2 19 Median 69.8 72.3 75.4 75.2 74.9 75.5 77.1 77.4 79.8 8800..22 83.2 82.6 80.3 20 Average 82.5 85.9 90.6 91.2 90.3 91.8 93.0 93.1 96.8 98.1 101.7 102.1 99.5 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 279,240 327,209 355,570 374,014 357,630 365,554 373,378 373,947 368,027 374,098 374,546 374,817 376,698 7? Private 228,527 271,973 292,792 311,952 294,425 300,619 305,366 305,682 298,868 303,823 302,474 303,927 304,689 73 Residential 126,553 155,148 158,818 174,840 158,210 161,786 163,413 164,713 165,645 170,488 172,459 174,337 175,846 24 Nonresidential, total 101,974 116,825 133,974 137,112 136,215 138,833 141,953 140,969 133,223 133,335 130,015 129,590 128,843 Buildings 75 Industrial 12,863 13,746 15,769 15,872 16,095 16,546 15,783 16,381 13,354 14,619 13,700 13,091 13,666 76 Commercial 35,789 48,100 59,626 60,770 61,185 63,863 65,222 63,494 60,716 59,916' 57,424 57,306 56,451 77 Other 11,838 12,547 12,619 12,790 12,748 12,487 12,781 13,065 13,131 13,025 13,133 13,265 13,406 28 Public utilities and other 41,484 42,432 45,960 47,680 46,187 45,937 48,167 48,029 46,022 45,775' 45,758 45,928 45,320 79 Public 50,715 55,232 62,777 62,063 63,205 64,935 68,013 68,264 69,159 70,275 72,072 70,890 72,009 30 Military 2,544 2,839 3,283 2,854 3,598 3,539 3,407 3,974 3,673 3,558 3,739 3,769 3,805 31 Highway 14,143 16,343 19,998 19,354 19,854 21,017 22,129 22,273 22,673 23,155 23,263 21,984 21,769 32 Conservation and development 4,820 4,654 4,952 4,946 5,090 4,958 5,614 4,372 4,598 4,943 4,757 4,715 4,428 33 Other 29,208 31,396 34,544 34,909 34,663 35,421 36,863 37,645 38,215 38,619 40,313 40,422 42,007 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing 3. Value of new construction data in recent periods may not be strictly Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of comparable with data in prior periods because of changes by the Bureau of the existing units, which are published by the National Association of Realtors. All Census in its estimating techniques. For a description of these changes see back and current figures are available from originating agency. Permit authoriza- Construction Reports (C-30-76-5), issued by the Bureau in July 1976. tions are those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • November 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 AAAuuuggg... 1985 1986 1986 111999888666 11998855 11998866 (((111999666777 AAuugg.. AAuugg.. === 111000000)))111 Sept. Dec. Mar. June Apr/ May June July Aug. CONSUMER PRICES2 1 All items 3.4 1.6 2.4 5.3 -1.9 1.5 -.3 .2 .5 .0 .2 328.6 2 Food 1.6 4.2 2.1 5.9 -1.4 3.4 .3 .4 .1 .9 .9 322.7 3 Energy items 1.5 -17.3 -3.2 3.3 -34.2 -12.5 -5.8 .3 2.3 -4.1 -1.9 358.6 4 All items less food and energy 4.1 4.0 3.4 5.4 4.1 3.1 .4 .1 .3 .4 .3 327.9 5 Commodities 1.8 1.6 1.1 3.6 .3 -.5 -.1 -.1 .1 .2 .3 262.9 6 Services 5.6 5.4 4.8 6.5 6.5 5.2 .7 .2 .4 .4 .3 399.0 PRODUCER PRICES 7 Finished goods .8 -1.8 -2.4 9.2 -12.5 .0 -.5 .6 .0 -.4 .3 288.3 8 Consumer foods -1.9 5.5 -2.9 16.0 -8.1 6.0 .1 1.3' .0 1.9 1.3 283.6 9 Consumer energy -2.8 -36.2 -11.3 20.7 -66.9 -25.1 -7.8 1.5' -.6 -11.9 -1.5 459.1 10 Other consumer goods 2.6 2.3 .0 4.4 2.5 1.7 .3 .1' .0 .3 .1 258.6 11 Capital equipment 2.2 1.8 -.9 5.6 .7 1.9 .3 .1 .1 .2 .1 306.3 12 Intermediate materials3 -.6 -4.5 -1.3 2.9 -11.8 -4.8 -1.0 -.3 .0 -.7 -.2 309.9 13 Excluding energy .2 -.4 -.7 .0 -1.0 -1.3 -.3 -.1' .0 .2 .0 304.2 Crude materials 14 Foods -13.8 6.9 -20.6 47.0 -24.7 -.2 -3.1 4.0' -.8 3.4 2.5 236.3 15 Energy -6.6 -29.4 -5.9 -4.0 -51.3 -33.8 -6.1 -.9' -3.0 -2.8 -2.6 524.5 16 Other -5.6 -3.9 -4.4 1.5 -.2 6.6 .4 .1' 1.1 .1 -5.3 236.1 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 QL 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 4,175.6 By source 7 Personal consumption expenditures 2,234.5 2,428.2 2,600.5 2,576.0 2,627.1 22,,666677..99 22,,669977..99 22,,773322..00 3 289.1 331.2 359.3 354.0 373.3 362.0 360.8 373.9 4 Nondurable goods 816.7 870.1 905.1 902.3 907.4 922.6 929.7 928.4 5 Services 1,128.7 1,227.0 1,336.1 1,319.7 1,346.4 1,383.2 1,407.4 1,429.8 6 Gross private domestic investment 502.3 662.1 661.1 667.1 657.4 669.5 708.3 687.3 7 Fixed investment 509.4 598.0 650.0 648.0 654.3 672.6 664.4 672.8 8 356.9 416.5 458.2 459.2 459.8 474.0 459.2 457.5 9 Structures 124.0 139.3 154.8 156.1 155.0 157.2 154.6 141.5 10 Producers' durable equipment 232.8 277.3 303.4 303.1 304.7 316.8 304.6 316.0 11 Residential structures 152.5 181.4 191.8 188.8 194.5 198.6 205.3 215.3 1? Change in business inventories -7.1 64.1 11.1 19.1 3.1 -3.1 43.8 14.5 13 .4 56.6 12.2 10.4 3.2 16.7 41.2 10.5 14 Net exports of goods and services -6.1 -58.7 -78.9 -77.1 -83.7 -105.3 -93.7 -104.5 IS 352.5 382.7 369.8 370.0 362.3 368.2 374.8 363.0 16 358.7 441.4 448.6 447.1 446.0 473.6 468.5 467.5 17 Government purchases of goods and services 675.0 733.4 815.4 799.0 829.7 855.6 836.7 860.8 18 283.5 311.3 354.1 340.9 360.9 380.9 355.7 367.6 19 State and local 391.5 422.2 461.3 458.1 468.8 474.7 480.9 493.3 By major type of product 70 3,412.8 3,700.9 3,987.0 3,945.9 44,,002277..44 44,,009900..88 44,,110055..44 44,,116611..22 ~>\ 1,396.1 1,576.7 1,630.2 1,622.4 1,642.8 1,644.1 1,669.0 1,661.6 7? Durable 573.3 675.0 700.2 693.1 710.3 709.1 710.6 703.1 ?3 822.7 901.7 930.0 929.3 932.5 935.0 958.4 958.5 74 1,682.5 1,813.1 1,959.8 1,935.4 1,971.9 2,025.5 2,057.7 2,087.4 25 Structures 327.1 375.1 408.1 407.2 415.9 418.1 422.6 426.7 26 Change in business inventories -7.1 64.1 11.1 19.1 3.1 -3.1 43.8 14.5 77 Durable goods -1.0 39.2 6.6 2.3 -2.7 9.5 28.6 -.1 28 Nondurable goods -6.1 24.9 4.5 16.7 5.8 -12.7 15.3 14.6 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 3,661.4 NATIONAL INCOME 30 2,719.5 3,032.0 3,222.3 3,201.4 3,243.4 3,287.3 3,340.7 3,376.4 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 2,480.2 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 37 173.6 184.5 196.9 195.3 198.8 201.7 204.5 207.3 38 Proprietors' income1 190.9 236.9 254.4 255.5 249.3 262.1 265.3 289.1 39 Business and professional1 178.4 205.3 225.2 222.5 227.7 232.7 240.9 249.6 40 Farm1 12.4 31.5 29.2 33.0 21.6 29.4 24.4 39.5 41 Rental income of persons2 13.2 8.3 7.6 8.1 7.3 8.3 12.8 16.3 4? 213.7 264.7 280.7 274.3 296.3 285.6 296.4 293.1 43 Profits before tax3 207.6 235.7 223.2 213.8 229.2 235.8 224.3 231.3 44 Inventory valuation adjustment -10.9 -5.5 -.6 1.6 6.1 -9.4 16.5 10.6 45 Capital consumption adjustment 17.0 34.5 58.1 58.9 61.0 59.2 55.6 51.3 46 281.0 307.4 311.4 311.4 309.7 307.6 304.9 297.7 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 • November 1986 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1985 1986 11998833 11998844 1985 Q2 Q3 Q4 Ql Q2' 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 3,483.3 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 2,058.8 3 Commodity-producing industries 523.1 577.8 607.7 605.0 608.3 617.7 622.0 620.8 4 Manufacturing 397.4 439.1 460.1 457.3 460.7 467.5 470.5 468.8 5 Distributive industries 404.2 442.2 469.8 467.7 472.4 478.9 485.2 484.3 6 Service industries 425.1 470.6 516.4 511.0 521.1 534.6 549.6 561.3 7 Government and government enterprises. 324.3 346.2 372.2 369.6 374.2 381.6 387.2 392.5 8 Other labor income 173.6 184.5 196.9 195.3 198.8 201.7 204.5 207.3 9 Proprietors' income1 190.9 236.9 254.4 255.5 249.3 262.1 265.3 289.1 10 Business and professional1 178.4 205.3 225.2 222.5 227.7 232.7 240.9 249.6 11 Farm1 12.4 31.5 29.2 33.0 21.6 29.4 24.4 39.5 12 Rental income of persons2 13.2 8.3 7.6 8.1 7.3 8.3 12.8 16.3 13 Dividends 68.7 74.7 76.4 76.4 76.3 76.7 79.1 81.1 14 Personal interest income 393.1 446.9 476.2 475.3 475.2 480.6 480.8 480.1 15 Transfer payments 442.6 455.6 487.1 484.1 491.1 493.6 504.7 510.1 16 Old-age survivors, disability, and health insurance benefits. 221.7 235.7 253.4 251.1 256.5 256.8 263.2 264.1 17 LESS: Personal contributions for social insurance 120.1 133.5 150.2 149.4 150.7 152.9 158.6 159.5 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 3,483.3 19 LESS: Personal tax and nontax payments 410.5 439.6 486.5 456.4 491.2 500.7 497.5 504.8 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 2,978.5 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 2,825.5 22 EQUALS: Personal saving 130.6 168.7 143.3 183.6 119.6 125.8 145.6 153.1 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 15,188.6' 15,179.9 24 Personal consumption expenditures 9,138.5 9,475.4 9,713.0 9,673.8 9,774.4 9,790.3 9,857.5' 9,985.0 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' 10,886.0 26 Saving rate (percent) 5.4 6.3 5.1 6.5 4.2 4.4 5.0 5.1 GROSS SAVING 27 Gross saving. 463.6 573.3 551.5 566.8 541.7 524.1 583.2 539.7 28 Gross private saving 592.2 674.8 687.8 722.4 679.6 679.2 714.8 718.7 29 Personal saving 130.6 168.7 143.3 183.6 119.6 125.8 145.6 153.1 30 Undistributed corporate profits1 65.0 91.0 107.3 105.8 118.8 106.8 122.1 112.3 31 Corporate inventory valuation adjustment. -10.9 -5.5 -.6 1.6 6.1 -9.4 16.5 10.6 Capital consumption allowances 32 Corporate 242.7 253.9 268.2 266.6 270.1 273.3 275.3 278.9 33 Noncorporate 153.9 161.2 169.0 166.5 171.2 173.4 171.8 174.4 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 .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 -179.0 36 Federal -176.0 -170.0 -198.0 -214.8 -197.5 -217.6 -201.6 -238.1 37 State and local 47.5 68.5 61.7 59.2 59.5 62.5 70.0 59.0 38 Capital grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 .0 39 Gross investment 468.8 571.4 545.9 555.0 536.2 525.7 579.6 544.3 40 Gross private domestic 502.3 662.1 661.1 667.1 657.4 669.5 708.3 687.3 41 Net foreign -33.5 -90.7 -115.2 -112.0 -121.2 -143.8 -128.6 -143.0 42 Statistical discrepancy. 5.2 -1.9 -5.5 -11.7 -5.5 1.6 -3.6 4.6 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 Item credits or debits 1983 1985 Q2 Q3 Q4 Ql Q2 P 1 Balance on current account -46,605 -117,677r -29,416' -28,454' -33,698' -34,038 -34,731 2 Not seasonally adjusted -30,362' -32,275 -31,510 -31,020 -35,753 3 Merchandise trade balance2 -67,080 -112,522 -124,439 -30,367 -31,675 -37,352 -36,459 -36,023 4 Merchandise exports 201,820 219,900 214,424 53,875 52,498 52,727 53,661 54,795 5 Merchandise imports -268,900 -332,422 -338,863 -84,242 -84,173 -90,079 -90,120 -90,818 6 Military transactions, net -370 -1,827 -2,917 -729 -619 -1,322 -1,066 -704 7 8 O In t v h e e s r t m se e r n v t i c i e n c t o ra m n e s , a c n t e io t3 n s, net 2 5 4 , , 4 8 8 4 4 1 18 1, ,7 2 5 8 1 8 25 -5 ,1 2 8 5 8 ' ' 5 - , 3 4 1 4 1 9 ' 8 - , 4 2 2 62 1 ' 9, - 2 3 5 5 5 ' 6,5-117 5,2 7 9 5 0 3 9 Remittances, pensions, and other transfers -3,194 -3,621 -3,787 -881 -914 -937 -954 -843 10 U.S. government grants (excluding military) -6,286 -8,536 -11,1% -2,577 -3,087 -3,307 -2,069 -3,204 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,005 -5,523 -2,824 -1,055 -422 -540 -250 -181 12 Change in U.S. official reserve assets (increase, -) -1,196 -3,130 -3,858 -356 -121 -3,148' -115 16 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -66 -979 -897 -180 -264 -189 -274 -104 15 Reserve position in International Monetary Fund -4,434 -995 908 72 388 168 344 366 16 Foreign currencies 3,304 -1,156 -3,869 -248 -245 -3,126 -185 -246 17 Change in U.S. private assets abroad (increase, -)3 -43,821 -14,987 -25,754' -1,382 -5,324 -19,579 -12,533 -17,584 18 Bank-reported claims -29,928 -11,127 -691 3,450 4,009 -8,485 6,333 -10,744 19 Nonbank-reported claims -6,513 5,081 1,665 1,706 -1,517 418 -2,842 n.a. 20 U.S. purchase of foreign securities, net -7,007 -5,082 -7,977 -2,325 -1,664 -1,411 -6,133 -1,567 21 U.S. direct investments abroad, net3 -373 -3,859 -18,752 -4,213 -6,152 -10,101 -9,891 -5,273 22 Change in foreign official assets in the United States (increase, +) 5,968 3,037 -1,324 8,486 2,577 1,322 2,469 13,766 23 U.S. Treasury securities 6,972 4,690 -546 8,685 -81 -1,976 3,256 13,889 24 Other U.S. government obligations -476 13 -295 136 46 -171 -177 -597 25 Other U.S. government liabilities4 725 436 483 606 58 263 288 663 26 Other U.S. liabilities reported by U.S. banks 545 555 522 -107 2,932 722 -1,261 350 27 Other foreign official assets5 -1,798 -2,657 -1,488 -834 -378 -160 363 -539 28 Change in foreign private assets in the United States (increase, +)3 79,528 99,730 128,43c 16,872 33,088 53,158 34,151 32,738 29 U.S. bank-reported liabilities 50,342 33,849 40,387 606 7,276 20,427 8,434 4,983 30 U.S. nonbank-reported liabilities -118 4,704 -1,172 -1,837 589 2,232 -2,057 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 8,721 23,059 20,500 5,123 7,484 5,676 7,666 1,391 32 Foreign purchases of other U.S. securities, net 8,636 12,759 50,859 7,223 11,628 22.441 18,686 22,590 33 Foreign direct investments in the United States, net3 11,947 25,359 17,856' 5,757 6,111 2,382 1,422 3,774 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 11,130 27,338 23,006 6,851' -1,344' -5,128' 10,316 5,976 36 Owing to seasonal adjustments -1,175' -3,688' -3,774' 1,216 -1,464 37 Statistical discrepancy in recorded data before seasonal adjustment 11,130 27,338 23,006 8,026 2,344 1,354 9,100 7,440 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -1,196 -3,130 -3,858 -356 -121 -3,148' -115 16 39 Foreign official assets in the United States (increase, +) 5,243 2,601 -1,807 -7,880 2,519 -1,585 2,181 13,103 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 -1,843 -1,831 -1,002 1,421 -2,609 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 194 190 64 12 15 28 22 61 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 • November 1986 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are not seasonally adjusted. 1986 IItteemm 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 200,486 217,865 213,146 17,006 17,735 18,913 17,965 17,431 19,070 17,707 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 258,048 325,726 345,276 32,005 28,895 31,972 28,762 30,272 31,764 34,121 3 Trade balance -57,562 107,861 -132,129 -14,999 -11,160 -13,059 -10,797 -12,842 -12,694 -16,414 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 Feb. Mar. Apr. May June July Aug. 1 Total 33,747 34,934 43,191 45,505 44,919 46,491 45,260 46,635 47,430 48,161 2 Gold stock, including Exchange Stabilization Fund1 11,121 11,096 11,090 11.090 11,090 11,089 11,085 11,084 11,084 11,084 3 Special drawing rights2 3 5,025 5,641 7,293 7,960 7,839 8,098 8,066 8,213 8,085 8,250 4 Reserve position in International Monetary Fund2 11,312 11,541 11,952 12,172 12,025 12,242 11,789 12,109 12,114 12,017 5 Foreign currencies4 6,289 6,656 12,856 14,283 13,965 15,062 14,320 15,229 16,147 16,810 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 Feb. Mar. Apr. May June July Aug. 1 Deposits 190 267 480 276 273 325 253 354 233 227 Assets held in custody 2 U.S. Treasury securities' 117,670 118,000 121,004 124,905 112277,,661111 132,017 136,762 137,820 144,527 148,263 3 Earmarked gold2 14,414 14,242 14,245 14,172 14,167 14,160 14,145 14,128 14,131 14,120 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 1986 AAsssseett aaccccoouunntt 11998833 Jan. Feb. Mar. Apr. May June July All foreign countries 1 Total, all currencies 477,090 453,656 458,012 448,847 449,561 459,885 475,158 459,587' 467,565 454,789 7 Claims on United States 115,542 113,393 119,713r 117,010 113,840 118,524 122,487 117,627 117,680 113,383 Parent bank 82,026 78,109 87,201 84,466 81,038 85,164 88,975 83,404 82,514 79,387 4 Other banks in United States2 13,664 13,066' 11,913 11,740 12,971 12,803 13,196 14,002 13,498 5 Nonbanks2 21,620 19,446 20,631 21,062 20,389 20,709 21,027 21,164 20,498 6 Claims on foreigners 342,689 320,162 315,702' 309,385 311,419 316,493 326,013 316,151 324,128 314,153 7 Other branches of parent bank 96,004 95,184 91,399 88,393 88,457 91,586 95,238 90,447 98,457 92,641 8 Banks 117,668 100,397 102,960' 100,982 100,362 101,743 107,141 103,851 105,570 103,484 9 Public borrowers 24,517 23,343 23,478' 23,522' 23,776 23,770 23,645 23,823 23,273 23,520 10 Nonbank foreigners 107,785 101,238 97,865' 96,488' 98,824 99,394 99,989 98,030 96,828 94,508 11 Other assets 18,859 20,101 22,597 22,452 24,302 24,868 26,658 25,809' 25,757 27,253 12 Total payable in U.S. dollars 371,508 350,636 336,288 322,948 316,461 324,122 331,506 322,833' 327,636 313,703 n Claims on United States 113,436 111,426 116,645' 113,937 110,477 114,965 118,629 113,767' 113,387 109,172 14 Parent bank 80,909 77,229 85,971 83,320 79,703 83,841 87,597 82,110 81,022 78,025 15 Other banks in United States2 1 13,500 12,473 11,245 11,077 12,272 11,902 12,283 12,870 12,344 16 Nonbanks2 20,697 18,211 19,372 19,697 18,852 19,130 19,374' 19,495 18,803 17 Claims on foreigners 247,406 228,600 209,927' 199,497 195,816 199,279 202,498 198,172' 203,846 193,901 18 Other branches of parent bank 78,431 78,746 72,689 68,748 67,630 70,910 73,109 69,684' 75,934 69,135 19 Banks 93,332 76,940 71,748' 66,284 63,987 63,849 66,006 65,053' 66,673 65,422 20 Public borrowers 17,890 17,626 17,252' 17,127' 17,226 17,219 16,752' 17,180 16,492 16,667 21 Nonbank foreigners 60,977 55,288 48,238' 47,338' 46,973 47,301 46,631' 46,255' 44,747 42,677 22 Other assets 10,666 10,610 9,716 9,514 10,168 9,878 10,379 10,894' 10,403 10,630 United Kingdom 23 Total, all currencies 158,732 144,385 148,599 150,835 148,788 150,975 155,867 152,075 151,593 145,448 74 Claims on United States 34,433 27,675 33,157 36,319 33,482 33,990 34,234 34,231 31,364 30,223 75 Parent bank 29,111 21,862 26,970 29,837 27,350 27,881 28,058 28,001 25,106 24,252 76 Other banks in United States2 1 1,429 1,106 1,173 1,064 1,129 1,386 1,312 1,366 1,381 77 Nonbanks2 4,384 5,081 5,309 5,068 4,980 4,790 4,918 4,892 4,590 7,8 Claims on foreigners 119,280 111,828 110,217 109,290 109,802 111,468 115,485 111,823 113,739 108,156 79 Other branches of parent bank 36,565 37,953 31,576 30,394 30,218 31,250 32,516 31,984 34,670 31,613 30 Banks 43,352 37,443 39,250 39,257 39,777 38,929 41,593 39,222 39,430 38,875 31 Public borrowers 5,898 5,334 5,644 5,949 6,113 5,833 5,642 5,427 5,236 5,229 32 Nonbank foreigners 33,465 31,098 33,747 33,150 33,694 35,456 35,734 35,190 34,403 32,439 33 Other assets 5,019 4,882 5,225 5,226 5,504 5,517 6,148 6,021 6,490 7,069 34 Total payable in U.S. dollars 126,012 112,809 108,626 108,566 105,202 105,111 107,359 106,712 104,010 97,641 35 Claims on United States 33,756 26,868 32,092 35,303 32,384 32,746 32,959 32,872' 29,944 28,848 36 Parent bank 28,756 21,495 26,568 29,470 26,943 27,393 27,629 27,584 24,693 23,888 37 Other banks in United States2 1,363 1,005 1,089 978 1,027 1,225 1,152 1,103 1,143 38 Nonbanks2 4,010 4,519 4,744 4,463 4,326 4,105 4,136' 4,148 3,817 39 Claims on foreigners 88,917 82,945 73,475 70,345 69,597 69,433 71,058 70,406' 70,697 65,472 40 Other branches of parent bank 31,838 33,607 26,011 25,083 24,474 25,250 26,224 26,265 27,559 24,258 41 Banks 32,188 26,805 26,139 24,013 23,725 22,106 23,310 23,134 22,825 22,420 4? Public borrowers 4,194 4,030 3,999 4,252 4,370 4,223 4,012 3,937 3,777 3,793 43 Nonbank foreigners 20,697 18,503 17,326 16,997 17,028 17,854 17,512 17,101 16,536 15,001 44 Other assets 3,339 2,996 3,059 2,918 3,221 2,932 3,342 3,434 3,369 3,321 Bahamas and Caymans 45 Total, all currencies 152,083 146,811 142,055 131,731 130,154 136,529 137,272 132,122 138,944 134,238 46 Claims on United States 75,309 77,296 74,874 68,789 68,412 71,735 72,755 68,710 70,751 69,721 47 Parent bank 48,720 49,449 50,553 44,642 43,891 46,813 47,613 42,868 44,132 43,867 48 Other banks in United States2 11,544 11,223 10,023 9,897 10,838 10,456 10,906 11,692 11,160 49 Nonbanks2 16,303 13,098 14,124 14,624 14,084 14,686 14,936 14,927 14,694 50 Claims on foreigners 72,868 65,598 63,894 59,233 57,724 60,564 60,301 59,106 63,955 60,162 51 Other branches of parent bank 20,626 17,661 19,042 16,468 15,872 19,131 18,286 15,703 20,636 16,682 5? Banks 36,842 30,246 28,192' 26,009 25,438 25,129 25,809 26,290 27,000 27,067 <i3 Public borrowers 6,093 6,089 6,458 6,409 6,286 6,292 6,326 6,694 6,399 6,534 54 Nonbank foreigners 12,592 11,602 10,212 10,347 10,128 10,012 9,880 10,419 9,920 9,879 55 Other assets 3,906 3,917 3,287 3,709 4,018 4,230 4,216 4,306 4,238 4,355 56 Total payable in U.S. dollars 145,641 141,562 136,794 126,226 124,216 130,438 130,530 125,681 132,353 127,910 1. Beginning with June 1984 data, reported claims held by foreign branches 2. Data for assets vis-k-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 • November 1986 3.14 Continued 1986 Jan. Feb. Mar. Apr. May June July All foreign countries 57 Total, all currencies 477,090 453,656 458,012 448,847 449,561 459,885 475,158 459,587' 467,565 454,789 58 Negotiable CDs3 n.a. 37,725 34,607 34,597 33,458 36,066 33,229 35,006 34,683 32,960 59 To United States 188,070 147,583 155,538 142,253 138,228 140,381 150,39c 144,241' 149,856 141,307 60 Parent bank 81,261 78,739 83,914 76,805 73,465 74,952 81,594 77,484 85,134 80,995 61 Other banks in United States 29,453 18,409 16,894 14,724 13,984 15,724 14,270 14,347 16,118 14,203 62 Nonbanks 77,356 50,435 54,730 50,724 50,779 49,705 54,526' 52,41C 48,604 46,109 63 To foreigners 269,685 247,907 245,942 250,855 255,533 261,783 269,814' 258,700' 262,309 259,138 64 Other branches of parent bank 90,615 93,909 89,529 86,360 86,358 90,921 93,768 90,228 97,696 91,144 65 Banks 92,889 78,203 76,814 84,167 83,843 84,820 89,608 83,251 81,008 83,307 66 Official institutions 18,896 20,281 19,523 19,939 21,889 20,688 20,744 20,792 20,480 20,608 67 Nonbank foreigners 68,845 55,514 60,076 60,389 63,443 65,354 65,694' 64,429' 63,125 64,079 68 Other liabilities 19,335 20,441 21,925 21,142 22,342 21,655 21,725 21,640' 20,717 21,384 69 Total payable in U.S. dollars 388,291 367,145 353,470 338,498 332,029 341,550 347,585 340,174' 346,427 330,053 70 Negotiable CDs3 n.a. 35,227 31,063 31,182 30,202 32,418 29,912 31,513 31,076 29,274 71 To United States 184,305 143,571 150,161 136,854 132,215 134,184 143,601' 137,694' 142,739 133,616 72 Parent bank 79,035 76,254 80,888 73,897 70,208 71,616 78,061 73,950 81,075 76,744 73 Other banks in United States 28,936 17,935 16,264 14,011 13,288 14,933 13,477 13,575 15,323 13,519 74 Nonbanks 76,334 49,382 53,009 48,946 48,719 47,635 52,063' 50,169' 46,341 43,353 75 To foreigners 194,139 178,260 163,361 161,356 160,810 166,349 166,229' 162,528' 163,922 158,302 76 Other branches of parent bank 73,522 77,770 70,943 67,183 65,947 70,465 71,841 69,978' 75,784 68,065 77 Banks 57,022 45,123 37,323 38,478 36,699 37,490 37,240 36,335' 33,745 35,280 78 Official institutions 13,855 15,773 14,354 14,800 15,853 14,719 14,746 14,049' 13,772 14,091 79 Nonbank foreigners 51,260 39,594 40,741 40,895 42,311 43,675 42,402' 42,166' 40,621 40,866 80 Other liabilities 9,847 10,087 8,885 9,106 8,802 8,599 7,843 8,439' 8,690 8,861 United Kingdom 81 Total, all currencies 158,732 144,385 148,599 150,835 148,788 150,975 155,867 152,075 151,593 145,448 82 Negotiable CDs3 n.a. 34,413 31,260 30,788 29,419 32,217 29,898 31,734 31,396 29,599 83 To United States 55,799 25,250 29,422 29,901 26,705 22,945 28,450 27,505 26,279 22,367 84 Parent bank 14,021 14,651 19,330 19,845 16,798 13,724 17,231 16,624 15,901 12,996 85 Other banks in United States 11,328 3,125 2,974 2,264 1,950 2,793 1,966 2,175 1,997 1,999 86 Nonbanks 30,450 7,474 7,118 7,792 7,957 6,428 9,253 8,706 8,831 7,372 87 To foreigners 95,847 77,424 78,525 80,724 82,666 86,053 87,773 83,067 84,341 83,707 88 Other branches of parent bank 19,038 21,631 23,389 21,858 21,954 24,733 25,379 23,838 27,008 25,106 89 Banks 41,624 30,436 28,581 32,326 32,088 33,301 34,294 31,584 30,505 32,143 90 Official institutions 10,151 10,154 9,676 10,093 10,956 9,750 9,757 9,548 9,543 9,074 91 Nonbank foreigners 25,034 15,203 16,879 16,447 17,668 18,269 18,343 18,097 17,285 17,384 92 Other liabilities 7,086 7,298 9,392 9,422 9,998 9,760 9,746 9,769 9,577 9,775 93 Total payable in U.S. dollars 131,167 117,497 112,697 112,073 108,332 108,420 110,376 109,335 108,374 101,095 94 Negotiable CDs3 n.a. 33,070 29,337 28,845 27,655 30,042 27,978 29,542 29,135 27,319 95 To United States 54,691 24,105 27,756 28,150 24,967 21,070 26,411 25,490 24,223 19,761 % Parent bank 13,839 14,339 18,956 19,461 16,528 13,405 16,867 16,233 15,340 12,344 97 Other banks in United States 11,044 2,980 2,826 2,090 1,820 2,596 1,774 1,944 1,817 1,738 98 Nonbanks 29,808 6,786 5,974 6,599 6,619 5,069 7,770 7,313 7,066 5,679 99 To foreigners 73,279 56,923 51,980 50,762 51,686 53,219 52,262 50,441 51,035 49,932 1(X) Other branches of parent bank 15,403 18,294 18,493 16,614 16,829 19,068 19,297 18,043 20,434 17,868 101 Banks 29,320 18,356 14,344 14,872 14,457 14,731 14,125 14,114 13,073 14,716 102 Official institutions 8,279 8,871 7,661 8,242 8,747 7,839 7,449 6,953 6,914 6,658 103 Nonbank foreigners 20,277 11,402 11,482 11,034 11,653 11,581 11,391 11,331 10,614 10,690 104 Other liabilities 3,197 3,399 3,624 4,316 4,024 4,089 3,725 3,862 3,981 4,083 Bahamas and Caymans 105 Total, all currencies 152,083 146,811 142,055 131,731 130,154 136,529 137,272 132,122 138,944 134,238 106 Negotiable CDs3 n.a. 615 610 1,076 1,237 1,132 629 634 567 565 107 To United States 111,299 102,955 103,813 91,989 91,773 97,666 98,621 94,128 98,897 96,648 108 Parent bank 50,980 47,162 44,811 38,850 39,381 43,834 43,662 40,757 47,014 47,862 109 Other banks in United States 16,057 13,938 12,778 11,185 10,854 11,604 11,014 10,738 12,868 11,143 110 Nonbanks 44,262 41,855 46,224 41,954 41,538 42,228 43,945 42,633 39,015 37,643 111 To foreigners 38,445 40,320 35,053 36,528 34,993 35,666 35,901 35,139 37,340 34,815 112 Other branches of parent bank 14,936 16,782 14,075 14,764 13,081 13,198 14,077 13,731 15,882 13,561 113 Banks 11,876 12,405 10,669 11,117 10,851 10,360 10,788 10,318 9,991 9,624 114 Official institutions 1,919 2,054 1,776 1,509 1,741 1,759 2,176 2,144 2,427 2,468 115 Nonbank foreigners 11,274 9,079 8,533 9,138 9,320 10,349 8,860 8,946 9,040 9,162 116 Other liabilities 2,339 2,921 2,579 2,138 2,151 2,065 2,121 2,221 2,140 2,210 117 Total payable in U.S. dollars 148,278 143,582 138,322 127,840 125,861 132,308 132,966 127,918 134,606 130,075 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 1986 IItteemm 11998844 11998855 Jan. Feb. Mar. Apr. Mayr June July 1 Total1 180,552 178,337 183,314 179,856 180,525 188,908 190,634 194,918 199,449 By type 2 Liabilities reported by banks in the United States2 26,089 26,734 28,303 26,506 25,479 27,029 24,911 26,028 25,243 3 U.S. Treasury bills and certificates3 59,976 53,252 53,294 54,420 55,933 59,547 63,614 65,790 70,721 U.S. Treasury bonds and notes 4 Marketable 69,019 77,108 77,470 78,089 78,483 82,345 82,501 84,108 85,652 5 Nonmarketable4 5,800 3,550 3,550 3,150 2,750 2,300 1,800 1,800 1,300 6 U.S. securities other than U.S. Treasury securities5 19,668 17,693 17,697 17,691 17,880 17,687 17,808 17,192 16,533 By area 1 Western Europe1 69,776 74,418 74,440 72,891 72,435 76,353 76,405 79,517 83,848 8 Canada 1,528 1,314 1,118 1,762 1,445 1,711 1,502 1,529 1,626 9 Latin America and Caribbean 8,561 11,141 11,516 10,234 10,425 10,785 10,595 11,051 10,761 10 Asia 93,954 86,441 88,534 89,719 90,869 94,646 96,963 97,834 98,899 11 Africa 1,264 1,824 1,897 1,786 1,846 1,833 1,718 1,717 1,461 12 Other countries6 5,469 3,199 2,809 3,464 3,505 3,580 3,451 3,270 2,854 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 Sept. Dec. Mar. June'' 1 Banks' own liabilities 4,844 5,219 8,586 12,982 15,368 21,320 24,145 2 Banks' own claims 7,707 7,231 11,984 15,233 16,161 19,634 21,583 3 Deposits 4,251 2,731 4,998 8,540 8,304 11,318 11,916 4 Other claims 3,456 4,501 6,986 6,693 7,857 8,316 9,666 5 Claims of banks' domestic customers1 676 1,059 569 328 580 1,426 1,387 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 • November 1986 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1986 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998833 11998844 11998855 Jan. Feb. Mar. Apr/ May June JulyP 1 All foreigners 369,607 407,306 435,368 431,036 436,528 440,518 443,456 444,528' 457,875 465,041 2 Banks' own liabilities 279,087 306,898 341,070 335,126 340,076 344,422 346,469 342,074' 346,353 338,847 3 Demand deposits 17,470 19,571 21,107 19,648 19,659 20,195 19,751 19,651 21,330 19,704 4 Time deposits1 90,632 110,413 117,278 114,710 116,964 116,418 114,209 114,143 115,458 117,449 5 Other2 25,874 26,268 29,305 30,375 31,144 32,125 33,220 31,598' 31,709 30,197 6 Own foreign offices3 145,111 150,646 173,381 170,393 172,309 175,685 179,289 176,683' 177,856 171,497 7 Banks' custody liabilities4 90,520 100,408 94,298 95,910 96,452 96,096 96,987 102,454' 111,521 126,194 8 U.S. Treasury bills and certificates5 68,669 76,368 68,785 69,801 72,631 72,714 7744,,663311 8800,,119922 8822,,448899 8866,,778899 9 Other negotiable and readily transferable instruments6 17,467 18,747 17,964 18,016 15,597 15,329 13,776 13,917 14,934 16,138 10 Other 4,385 5,293 7,549 8,093 8,223 8,053 8,580 8,346' 14,099 23,267 11 Nonmonetary international and regional organizations7 5,957 4,454 5,821 7,487 9,867 5,223 3,495 4,519' 3,437 3,974 12 Banks' own liabilities 4,632 2,014 2,621 2,714 4,326 1,404 1,749 2,388' 887 1,857 13 Demand deposits 297 254 85 96 184 102 138 99 79 156 14 Time deposits1 3,584 1,267 2,067 2,369 3,892 391 681 1,109' 546 1,209 15 Other2 750 493 469 250 250 911 931 1,179 262 492 16 Banks' custody liabilities4 1,325 2,440 3,200 4,773 5,540 3,820 1,746 2,131 2,550 2,118 17 U.S. Treasury bills and certificates 463 916 1,736 3,216 4,219 2,311 768 11,,228822 11,,661199 991 18 Other negotiable and readily transferable instruments6 862 1,524 1,464 1,556 1,322 1,508 970 849 918 1,126 19 Other 0 0 0 1 0 0 7 0 13 0 20 Official institutions8 79,876 86,065 79,985 81,597 80,926 81,405 86,576 88,526' 91,818 95,964 21 Banks' own liabilities 19,427 19,039 20,835 22,590 22,056 21,719 23,927 22,018' 22,814 22,144 22 Demand deposits...' 1,837 1,823 2,077 1,638 1,602 1,917 1,832 1,810 2,130 1,609 23 Time deposits1 7,318 9,374 10,949 10,690 10,334 10,299 9,368 9,85c 10,275 10,320 24 Other2 10,272 7,842 7,809 10,262 10,121 9,503 12,728 10,358 10,409 10,216 25 Banks' custody liabilities4 60,448 67,026 59,150 59,007 58,870 59,686 62,648 66,508 69,004 73,820 26 U.S. Treasury bills and certificates5 54,341 5599,,997766 5533,,225522 53,294 5544,,442200 5555,,993333 59,547 6633,,661144 6655,,779900 7700,,772211 27 Other negotiable and readily transferable instruments6 6,082 6,966 5,824 5,596 4,102 3,585 2,916 2,754 2,996 2,892 28 Other 25 84 75 117 348 168 185 139 218 207 29 Banks9 226,887 248,893 275,311 266,589 269,832 278,967 277,856 275,217' 285,067 286,207 30 Banks' own liabilities 205,347 225,368 252,723 243,830 247,132 255,921 254,617 251,214' 256,263 248,345 31 Unaffiliated foreign banks 60,236 74,722 79,341 73,436 74,823 80,236 75,328 74,532 78,407 76,848 32 Demand deposits 8,759 10,556 10,271 9,792 9,659 9,692 8,689 9,036' 10,268 9,277 33 Time deposits1 37,439 47,095 49,510 45,121 45,942 50,194 48,484 46,868 48,562 49,653 34 Other2 14,038 17,071 19,561 18,523 19,222 20,350 18,155 18,627 19,577 17,918 35 Own foreign offices3 145,111 150,646 173,381 170,393 172,309 175,685 179,289 176,682' 177,856 171,497 36 Banks' custody liabilities4 21,540 23,525 22,588 22,760 22,700 23,046 23,239 24,003' 28,804 37,862 37 U.S. Treasury bills and certificates 10,178 11,448 9,554 9,223 9,501 99,,886699 99,,991144 1100,,884411 1100,,448833 1100,,993344 38 Other negotiable and readily transferable instruments6 7,485 7,236 6,040 6,006 5,876 5,752 5,423 5,451 5,652 5,591 39 Other 3,877 4,841 6,994 7,531 7,323 7,426 7,901 7,711' 12,669 21,337 40 Other foreigners 56,887 67,894 74,251 75,362 75,902 74,923 75,530 76,266' 77,553 78,895 41 Banks' own liabilities 49,680 60,477 64,892 65,992 66,561 65,379 66,176 66,454' 66,389 66,501 42 Demand deposits 6,577 6,938 8,673 8,122 8,214 8,484 9,093 8,705 8,854 8,663 43 Time deposits 42,290 52,678 54,752 56,530 56,796 55,534 55,677 56,3^ 56,075 56,267 44 Other2 813 861 1,467 1,340 1,550 1,361 1,406 1,433 1,461 1,571 45 Banks' custody liabilities4 7,207 7,417 9,359 9,370 9,341 9,544 9,354 9,811 11,164 12,394 46 U.S. Treasury bills and certificates 3,686 4,029 4,243 4,068 4,491 4,601 44,,440011 44,,445544 44,,559977 44,,114433 47 Other negotiable and readily transferable instruments6 3,038 3,021 4,636 4,858 4,297 4,483 4,465 4,862 5,368 6,529 48 Other 483 367 480 444 553 459 487 495 1,199 1,722 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,346 10,476 9,845 9,628 7,386 6,603 6,286 6,269 6,430 6,500 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 1986 AArreeaa aanndd ccoouunnttrryy 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July p 1 Total 369,607 407,306 435,368 431,036 436,528 440,518 443,456r 444,528' 457,875 465,041 2 Foreign countries 363,649 402,852 429,547 423,549 426,661 435,295 439,961' 440,009' 454,437 461,066 3 Europe 138,072 153,145 163,829 161,378 157,270 157,033 165,193' 165,80C 166,338 162,986 4 Austria 585 615 693 692 769 1,665 931' 897 1,013 1,033 5 Belgium-Luxembourg 2,709 4,114 5,240 5,189 4,732 4,268 5,737' 5,425 5,224 5,150 6 Denmark 466 438 513 536 533 536 752 523 519 557 7 Finland 531 418 496 373 506 354 619 514 484 592 8 France 9,441 12,701 15,540 15,595 15,148 15,906 19,322' 19,423 19,860 19,986 9 Germany 3,599 3,358 4,835 5,622 5,309 5,691 6,718 4,964 4,636 5,645 10 Greece 520 699 664 612 551 535 559 552 658 604 11 Italy 8,462 10,762 9,667 7,764 7,235 7,215 6,553' 7,875' 8,918 8,828 12 Netherlands 4,290 4,731 4,212 4,069 4,027 4,334 4,320 4,183 4,224 4,682 13 Norway 1,673 1,548 948 781 552 469 731 850 711 497 14 Portugal 373 597 652 706 685 705 674 801 794 711 15 Spain 1,603 2,082 2,113 1,899 1,794 1,772 1,919 1,879 2,080 1,887 16 Sweden 1,799 1,676 1,422 1,622 1,693 1,547 1,313 1,299 1,118 1,167 17 Switzerland 32,246 31,740 28,742 26,119 25,606 26,602 27,247' 26,848 27,810 28,640 18 Turkey 467 584 429 504 404 383 363' 434 642 310 19 United Kingdom 60,683 68,671 76,728 80,611 80,144 78,585 81,983' 83,885 82,206 78,081 20 Yugoslavia 562 602 673 595 600 535 547 556 661 542 21 Other Western Europe1 7,403 7,192 9,635 7,713 6,491 5,286 4,233' 4,165 3,997 3,295 77 U.S.S.R 65 79 105 43 64 61 38' 34 89 48 23 Other Eastern Europe2 596 537 523 332 427 586 634' 693 692 733 24 Canada 16,026 16,059 17,426 18,037 21,466 22,497 20,450 21,257 22,931 22,359 75 Latin America and Caribbean 140,088 153,381 167,792 161,445 161,056 164,875 164,801' 161,400' 170,510 178,937 26 Argentina 4,038 4,394 6,029 5,786 5,551 5,155 5,627 6,075 6,229 6,336 77 Bahamas 55,818 56,897 57,657 53,860 54,647 55,791 57,865 53,680 60,455 58,876 28 Bermuda 2,266 2,370 2,765 2,5% 2,147 2,324 2,270' 2,016 2,555 2,201 29 Brazil 3,168 5,275 5,369 6,049 5,759 6,096 5,788' 5,542 5,200 5,134 30 British West Indies 34,545 36,773 42,670 40,474 41,127 44,041 41,354' 42,111' 43,005 54,618 31 Chile 1,842 2,001 2,042 2,019 1,997 2,084 2,147 2,223 2,270 2,227 37 Colombia 1,689 2,514 3,102 3,336 3,140 3,076 3,101 3,053 3,419 3,334 33 Cuba 8 10 11 16 6 6 7 7 8 7 34 Ecuador 1,047 1,092 1,238 1,211 1,172 1,209 1,199 1,166 1,262 1,196 35 Guatemala 788 896 1,071 1,146 1,132 1,126 1,128 1,097 1,108 1,123 36 Jamaica 109 183 122 244 126 144 173 201 185 184 37 Mexico 10,392 12,303 14,045 13,702 13,433 12,990 13,126 13,153 13,563 12,865 38 Netherlands Antilles 3,879 4,220 4,875 4,696 4,560 4,561 4,859 4,798 5,122 4,502 39 Panama 5,924 6,951 7,492 7,416 7,161 7,286 6,960 7,042 6,420 6,639 40 Peru 1,166 1,266 1,166 1,124 1,100 1,106 1,116 1,132 1,523 1,158 41 Uruguay 1,244 1,394 1,549 1,730 1,727 1,567 1,646 1,703 1,668 1,687 47 Venezuela 8,632 10,545 11,919 11,467 11,741 11,670 11,727 11,712' 11,725 12,073 43 Other Latin America and Caribbean 3,535 4,297 4,668 4,571 4,529 4,641 4,708 4,689 4,793 4,777 44 58,570 71,187 72,271 74,841 78,772 82,644 81,682 83,817 86,683 89,819 China 45 Mainland 249 1,153 1,607 1,003 1,624 1,347 1,550 973 1,469 1,795 46 Taiwan 4,051 4,990 7,786 9,092 9,661 10,837 11,027 12,687 13,683 14,333 47 Hong Kong 6,657 6,581 8,067 8,215 8,194 8,706 8,757 8,745 8,656 8,929 48 India 464 507 711 606 630 926 574 577 695 562 49 Indonesia 997 1,033 1,466 1,524 1,738 2,107 1,787 1,758 1,416 1,526 50 Israel 1,722 1,268 1,595 1,459 1,363 1,450 1,490 1,671 1,973 1,731 51 Japan 18,079 21,640 23,077 25,047 26,397 28,274 28,279 29,689 30,803 33,469 52 Korea 1,648 1,730 1,665 1,503 1,602 1,551 1,337 1,336 1,414 2,294 53 Philippines 1,234 1,383 1,140 942 1,086 978 1,051 1,331 1,161 1,363 54 Thailand 747 1,257 1,358 1,199 1,141 1,103 993 1,155 1,068 1,097 55 Middle-East oil-exporting countries3 12,976 16,804 14,523 15,174 16,308 15,384 14,418 14,045 14,082 12,296 56 Other Asia 9,748 12,841 9,276 9,076 9,028 9,980 10,419 9,848 10,261 10,424 57 Africa 2,827 3,396 4,883 4,643 4,359 4,260 4,173 4,227 4,293 4,041 58 Egypt 671 647 1,363 1,080 987 870 960 910 1,079 820 59 Morocco 84 118 163 98 92 91 85 92 87 93 60 South Africa 449 328 388 567 421 465 386 414 414 609 61 Zaire 87 153 163 73 92 95 90 105 92 65 62 Oil-exporting countries4 620 1,189 1,494 1,644 1,614 1,601 1,442 1,490 1,481 1,368 63 Other Africa 917 961 1,312 1,182 1,152 1,137 1,210 1,216 1,140 1,086 64 Other countries 8,067 5,684 3,347 3,205 3,739 3,987 3,662 3,507' 3,682 2,924 65 Australia 7,857 5,300 2,779 2,707 3,024 3,237 3,058 2,744 2,939 2,173 66 All other 210 384 568 498 714 750 604 763 744 751 67 Nonmonetary international and regional organizations 5,957 4,454 5,821 7,487 9,867 5,223 3,495' 4,519' 3,437 3,974 68 International 5,273 3,747 4,806 6,109 8,671 4,139 2,512' 3,669 2,466 2,714 69 Latin American regional 419 587 894 909 863 916 823 748' 845 922 70 Other regional5 265 120 121 470 333 168 160' 102 126 338 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 • November 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 1986 AArreeaa aanndd ccoouunnttrryy 11998833 11998844 11998855 Jan. Feb. Mar. Apr. May June July 1 Total 391,312 400,162 401,585 386,529 389,501 394,769 401,109^ 394,666' 403,653 405,144 2 Foreign countries 391,148 399,363 400,554 385,238 388,692 394,286 400,607' 394,258' 403,190 404,652 3 Europe 91,927 99,014 106,407 104,365 100,173 100,458 101,250 100,925' 104,294 99,804 4 Austria 401 433 598 485 542 494 429 501 673 619 5 Belgium-Luxembourg 5,639 4,794 5,772 5,841 5,276 5,429 5,502 55,,66%%'' 7,163 6,103 6 Denmark 1,275 648 706 864 940 845 794 888822 749 859 7 Finland 1,044 898 823 843 741 1,194 795 866 981 1,036 8 France 8,766 9,157 9,124 9,065r 7,943 8,636 8,902 8,861 9,440 9,604 9 Germany 1,284 1,306 1,267 1,211 1,309 1,374 1,341' 1,176 1,095 1,461 10 Greece 476 817 991 933 884 798 764 723 629 615 11 Italy 9,018 9,119 8,848 7,494 6,913 7,297 6,709 6,806 7,474 7,266 12 Netherlands 1,267 1,356 1,258 1,248 1,249 1,394 1,380 1,384 1,399 1,442 13 Norway 690 675 706 692 652 613 786 746 905 614 14 Portugal 1,114 1,243 1,058 1,040 936 893 874 850 769 789 15 Spain 3,573 2,884 1,908 1,801 1,885 1,866 1,701 1,986 2,001 1,863 16 Sweden 3,358 2,230 2,219 2,174 2,278 2,422 1,924' 2,239 2,488 2,909 17 Switzerland 1,863 2,123 3,171 2,836 2,361 2,940 2,978 3,134 3,543 2,614 18 Turkey 812 1,130 1,200 1,512 1,519 1,587 1,584 1,649 1,856 1,709 19 United Kingdom 47,364 56,185 62,560 62,415 60,621 57,983 60,602' 59,354 58,123 55,676 20 Yugoslavia 1,718 1,886 1,964 1,901 1,953 1,978 1,950 1,928 2,005 1,902 21 Other Western Europe1 477 596 998 716 734 1,166 649 491 1,253 1,102 22 U.S.S.R 192 142 130 169 287 424 477 489 568 504 23 Other Eastern Europe2 1,598 1,389 1,107 1,126 1,151 1,126 1,111 1,164 1,177 1,114 24 Canada 16,341 16,109 16,476 17,279 18,280 17,945 18,814 17,910' 18,269 18,232 25 Latin America and Caribbean 205,491 207,862 202,663 189,065 190,623 196,723 199,032' 193,625' 200,647 202,492 26 Argentina 11,749 11,050 11,462 11,463 11,574 11,456 11,803 11,921 12,079 12,166 27 Bahamas 59,633 58,009 58,258 49,762 49,659 55,691 55 ^(X 52,537' 57,039 55,915 28 Bermuda 566 592 499 542 380 460 275 238' 239 763 29 Brazil 24,667 26,315 25,283 25,209 25,129 25,379 25,363' 25,271' 24,877 25,035 30 British West Indies 35,527 38,205 38,881 34,371 36,534 36,880 38,932' 37,072' 40,029 42,008 31 Chile 6,072 6,839 6,603 6,525 6,478 6,557 6,540' 6,537 6,507 6,514 32 Colombia 3,745 3,499 3,249 3,185 3,044 22,,990033 2,861 2,820 2,789 2,776 33 Cuba 0 0 0 0 0 11 0 0 0 0 34 Ecuador 2,307 2,420 2,390 2,439 2,369 2,399 2,388 2,382' 2,397 2,366 35 Guatemala3 129 158 194 174 167 167 124 112 136 113 36 Jamaica3 215 252 224 228 213 213 216 218 244 209 37 Mexico 34,802 34,885 31,788 31,841 32,100 31,608 32,367' 31,493' 31,381 31,085 38 Netherlands Antilles 1,154 1,350 1,340 1,022 1,043 927 839 1,075' 1,086 1,090 39 Panama 7,848 7,707 6,645 6,532 5,881 6,179 6,133 5,919 5,855 6,474 40 Peru 2,536 2,384 1,947 1,874 1,852 1,806 1,767 1,757 1,737 1,703 41 Uruguay 977 1,088 960 %6 956 %1 953 951 931 927 42 Venezuela 11,287 11,017 10,871 10,947 11,269 11,204 11,295' 11,326 11,304 11,364 43 Other Latin America and Caribbean 2,277 2,091 2,067 1,984 1,976 1,931 1,917 1,997' 2,016 1,985 44 6677,,883377 66,316 66,212 6655,,888822 7711,,005588 7700,,772299 7733,,442211'' 7733,,994422'' 7722,,007722 7766,,119988 China 45 Mainland 292 710 639 750 820 902 593 703 571 798 46 Taiwan 1,908 1,849 1,535 1,300 1,243 1,403 1,151 1,446' 1,238 1,070 47 Hong Kong 8,489 7,293 6,7% 6,923 7,602 8,208 8,134 8,315 7,538 8,248 48 India 330 425 450 332 284 479 398 420 426 372 49 Indonesia 805 724 698 692 793 712 717' 736 690 722 50 Israel 1,832 2,088 1,991 1,834 1,697 1,617 1,611 1,742 1,779 1,520 51 Japan 30,354 29,066 31,249 32,232 36,471 36,711 38,781 38,629 38,569 41,898 52 Korea 9,943 9,285 9,226 8,823 9,072 9,242 9,286 9,176 8,935 8,900 53 Philippines 2,107 2,555 2,224 2,206 2,224 2,336 2,325 2,263' 2,393 2,168 54 Thailand 1,219 1,125 845 793 765 810 775 716 706 720 55 Middle East oil-exporting countries4 4,954 5,044 4,298 3,975 3,869 3,577 3,838 3,948 3,674 2,910 56 Other Asia 5,603 6,152 6,260 6,021 6,218 4,732 5,812 5,845' 5,555 6,873 57 Africa 6,654 6,615 5,407 5,416 5,360 5,128 5,007 4,890 4,971 4,817 58 Egypt 747 728 721 677 690 653 639 619 740 701 59 Morocco 440 583 575 591 612 646 662 640 642 615 60 South Africa 2,634 2,795 1,942 1,965 1,856 1,799 1,716 1,743 1,705 1,661 61 Zaire 33 18 20 18 18 17 17 17 17 17 62 Oil-exporting countries5 1,073 842 630 582 562 488 465 417 415 413 63 Other 1,727 1,649 1,520 1,584 1,621 1,525 1,508 1,455 1,452 1,410 64 Other countries 2,898 3,447 3,390 3,230 3,199 3,305 3,082 2,966 2,937 3,110 65 Australia 2,256 2,769 2,413 2,409 2,367 2,473 2,237 2,050 2,023 2,165 66 All other 642 678 978 821 832 832 845 916 914 945 67 Nonmonetary international and regional organizations6 164 800 1,030 1,292 809 483 502 408 463 493 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 1986 TTyyppee ooff ccllaaiimm 11998833 11998844 11998855 Jan. Feb. Mar. Apr.' May' June July 1 Total 444444422222226666666,,,,,,,222222211111115555555 444444433333333333333,,,,,,,000000077777778888888 444444433333330000000,,,,,,,444444466666666666666 444444411111119999999,,,,,,,888888822222228888888 444444422222229999999,,,,,,,000000077777771111111 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 333333399999991111111,,,,,,,333333311111112222222 444444400000000000000,,,,,,,111111166666662222222 444444400000001111111,,,,,,,555555588888885555555 386,529 389,501 333333399999994444444,,,,,,,777777766666669999999 401,109 394,666 444444400000003333333,,,,,,,666666655555553333333 405,144 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 55555557777777,,,,,,,555555566666669999999 66666662222222,,,,,,,222222233333337777777 66666660000000,,,,,,,444444499999996666666 60,620 60,582 66666660000000,,,,,,,444444422222227777777 60,157 59,965 66666660000000,,,,,,,666666600000008888888 60,391 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 111111144444446666666,,,,,,,333333399999993333333 111111155555556666666,,,,,,,222222211111116666666 111111177777774444444,,,,,,,222222266666661111111 163,961 169,084 111111177777773333333,,,,,,,666666699999998888888 179,662 173,094 111111188888881111111,,,,,,,888888811111118888888 185,133 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222223333333,,,,,,,888888833333337777777 111111122222224444444,,,,,,,999999933333332222222 111111111111116666666,,,,,,,666666644444443333333 112,033 110,219 111111111111110000000,,,,,,,666666644444443333333 111,832 112,529 111111111111112222222,,,,,,,999999911111114444444 113,334 66 DDeeppoossiittss 44444447777777,,,,,,,111111122222226666666 44444449999999,,,,,,,222222222222226666666 44444448888888,,,,,,,333333366666661111111 45,789 44,159 44444444444444,,,,,,,999999988888885555555 46,393 47,493 44444447777777,,,,,,,000000000000007777777 48,406 77 OOtthheerr 77777776666666,,,,,,,777777711111111111111 77777775555555,,,,,,,777777700000006666666 66666668888888,,,,,,,222222288888882222222 66,244 66,060 66666665555555,,,,,,,666666655555558888888 65,439 65,036 66666665555555,,,,,,,999999900000007777777 64,928 88 AAllll ootthheerr ffoorreeiiggnneerrss 66666663333333,,,,,,,555555511111114444444 55555556666666,,,,,,,777777777777777777777 55555550000000,,,,,,,111111188888885555555 49,915 49,616 55555550000000,,,,,,,000000000000002222222 49,458 49,078 44444448888888,,,,,,,333333311111114444444 46,287 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 33333334444444,,,,,,,999999900000003333333 33333332222222,,,,,,,999999911111116666666 22222228888888,,,,,,,888888888888881111111 22222225555555,,,,,,,000000055555558888888 22222225555555,,,,,,,444444411111118888888 2222222,,,,,,,999999966666669999999 3333333,,,,,,,333333388888880000000 3333333,,,,,,,333333333333335555555 2222222,,,,,,,444444499999994444444 3333333,,,,,,,444444477777775555555 11 Negotiable and readily transferable 22222226666666,,,,,,,000000066666664444444 22222223333333,,,,,,,888888800000005555555 11111119999999,,,,,,,333333333333332222222 11111117777777,,,,,,,888888855555559999999 11111117777777,,,,,,,222222211111114444444 12 Outstanding collections and other 5555555,,,,,,,888888877777770000000 5555555,,,,,,,777777733333332222222 6666666,,,,,,,222222211111114444444 4444444,,,,,,,777777700000005555555''''''' 4444444,,,,,,,777777722222228888888 13 MEMO: Customer liability on 33333337777777,,,,,,,777777711111115555555 33333337777777,,,,,,,111111100000003333333 22222228888888,,,,,,,333333366666666666666 22222228888888,,,,,,,888888800000000000000''''''' 22222228888888,,,,,,,111111177777779999999 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 46,337 40,714 37,378 39,465 42,112 41,226 42,891 47,329 46,029 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 Sept. Dec. Mar. Junep 1 Total 228,150 243,715 243,952 232,798 227,880 220,352 223,009 By borrower 2 Maturity of 1 year or less1 173,917 176,158 167,858 162,590 160,813 152,229 152,836 3 Foreign public borrowers 21,256 24,039 23,912 26,469 26,302 23,852 22,725 4 All other foreigners 152,661 152,120 143,947 136,122 134,511 128,378 130,111 5 Maturity of over 1 year1 54,233 67,557 76,094 70,207 67,066 68,123 70,174 6 Foreign public borrowers 23,137 32,521 38,695 36,302 34,500 36,674 37,168 7 All other foreigners 31,095 35,036 37,399 33,906 32,566 31,448 33,005 By area Maturity of 1 year or less1 8 Europe 50,500 56,117 58,498 58,520 56,579 53,440 56,720 9 Canada 7,642 6,211 6,028 6,125 6,396 5,855 6,008 10 Latin America and Caribbean 73,291 73,660 62,791 63,088 63,328 59,469 59,003 11 37,578 34,403 33,504 29,120 27,966 27,701 25,786 12 Africa 3,680 4,199 4,442 3,954 3,753 3,331 3,249 13 All other2 1,226 1,569 2,593 1,782 2,791 2,433 2,070 Maturity of over 1 year1 14 Europe 11,636 13,576 9,605 8,078 7,634 7,522 7,964 15 Canada 1,931 1,857 1,882 1,932 1,804 1,924 2,245 16 Latin America and Caribbean 35,247 43,888 56,144 52,145 50,662 52,068 53,247 17 3,185 4,850 5,323 5,230 4,502 4,252 4,531 18 Africa 1,494 2,286 2,033 1,665 1,538 1,634 1,497 19 Mother2 740 1,101 1,107 1,157 926 722 689 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 • November 1986 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks' Billions of dollars, end of period 1984 1985' 1986 AArreeaa oorr ccoouunnttrryy 11998822 11998833 June2 Sept. Dec. Mar. June Sept. Dec. Mar. JuneP 1 Total 436.1r 433.9' 427.6' 406.4' 405.7' 405.5 396.8 394.9 391.9 394.4 391.1 2 G-10 countries and Switzerland 179.6' 167.8 157.4' 147.5' 148.1 153.0 146.7 152.0 148.5 156.6 159.7 3 Belgium-Luxembourg 13.1 12.4 10.9 9.8 8.7 9.3 8.9 9.5 9.3 8.3 9.0 4 France 17.1 16.2 14.2 14.3 14.1 14.5 13.5 14.8 12.3 13.8 14.7 5 Germany 12.7 11.3 10.9 10.0 9.0 8.9 9.6 9.8 10.5 11.2 11.5 6 Italy 10.3 11.4 11.5 9.7 10.1 10.0 8.6 8.4 9.8 8.5 9.3 7 Netherlands 3.6 3.5 3.0 3.4 3.9 3.8 3.7 3.4 3.7 3.5 3.4 8 Sweden 5.0 5.1 4.3 3.5 3.2 3.1 2.9 3.1 2.8 2.9 2.9 9 Switzerland 5.0 4.3 4.2 3.9 3.9 4.2 4.0 4.1 4.4 5.4 5.6 10 United Kingdom 72.1 65.3 60.3 57.1 60.3 65.4 65.7 67.1 64.6 68.8 68.9 11 Canada 10.4 8.3 8.9 8.1 7.9 9.1 8.1 7.6 7.0 6.1 7.0 12 Japan 30.2 29.9 29.3 27.7 27.1 24.7 21.7 24.3 24.2 28.1 27.4 13 Other developed countries 33.5r 36.(X 37.(y 36.2' 33.6' 32.8 32.3 32.0 30.4 31.5 30.6 14 Austria 1.9 1.9 1.9 1.8 1.6 1.6 1.6 1.7 1.6 1.6 1.7 15 Denmark 2.4 3.4 3.1 2.9 2.2 2.1 1.9 2.1 2.4 2.5 2.4 16 Finland 2.2 2.4 2.3 1.9 1.9 1.8 1.8 1.8 1.6 1.9 1.6 17 Greece 3.0 2.8 3.3 3.2 2.9 2.9 2.9 2.8 2.6 2.5 2.6 18 Norway 3.3 3.3 3.2 3.2 3.0 2.9 2.9 3.4 2.9 2.7 3.0 19 Portugal 1.5 1.5 1.7 1.6 1.4 1.4 1.3 1.4 1.3 1.1 1.0 20 Spain 7.5 7.1 7.3 6.9 6.5 6.4 5.9 6.1 5.8 6.4 6.4 21 Turkey 1.4 1.7 2.0 2.0 1.9 1.9 2.0 2.1 1.9 2.3 2.5 22 Other Western Europe 2.3 1.8 1.9 1.7 1.7 1.7 1.8 1.7 2.0 2.4 2.1 23 South Africa 3.7 4.7 4.7 5.0 4.5 4.2 3.9 3.3 3.2 3.2 3.1 24 Australia 4.3' 5.4' 5.6' 6.1' 6.0' 6.1 6.2 5.6 5.0 4.9 4.2 25 OPEC countries3 26.9' 28.4' 26.(K 24.4' 24.9' 24.5 22.8 22.7 21.6 20.6 20.6 26 Ecuador 2.2 2.2 2.1 2.1 2.2 2.2 2.2 2.2 2.1 2.2 2.1 27 Venezuela 10.5 9.9 9.5 9.2 9.3 9.3 9.3 9.0 8.9 8.7 8.8 28 Indonesia 2.9' 3.4' 3.5' 3.2' 3.3' 3.3 3.1 3.1 3.0 3.3 3.0 29 Middle East countries 8.5 9.8' 8.2 7.3 7.9 7.4 6.1 6.2 5.5 4.8 5.0 30 African countries 2.8 3.0 2.7 2.5 2.3 2.3 2.2 2.3 2.0 1.8 1.7 31 Non-OPEC developing countries 106.5' 110.8 112.3 111.6 111.8' 110.8 110.0 107.8 105.0 103.4 101.6 Latin America 32 Argentina 8.9 9.5 9.2 9.1 8.7 8.6 8.6 8.9 8.9 8.9 9.2 33 Brazil 22.9 23.1 25.4 26.3 26.3 26.4 26.6 25.5 25.6 25.7 25.3 34 Chile 6.3 6.4 6.7 7.1 7.0 7.0 6.9 6.6 7.0 7.0 7.1 35 Colombia 3.1 3.2 3.0 2.9 2.9 2.8 2.7 2.6 2.7 2.3 2.2 36 Mexico 24.2 25.8 25.9 26.0 25.7 25.5 25.3 24.4 24.1 23.9 23.9 37 Peru 2.6 2.4 2.3 2.2 2.2 2.2 2.1 1.9 1.8 1.7 1.6 38 Other Latin America 4.0 4.2 4.1 3.9 3.9 3.8 3.7 3.5 3.4 3.3 3.3 Asia China 39 Mainland .2 .3 .6 .5 .7 .7 .3 1.1 .5 .6 .6 40 Taiwan 5.3 5.2' 5.2' 5.1' 5.1 5.3 5.5 5.1 4.5 4.3 3.6 41 India .5' .9' .9' 1.0' & .9 .9 1.1 1.2 1.2 1.3 42 Israel 2.3 1.9 1.9 1.7 1.8 1.7 2.3 1.5 1.6 1.3 1.6 43 Korea (South) 10.7' 11.2' ll.CK 10.3' lO^ 10.4 10.0 10.4 9.4 9.5 8.7 44 Malaysia 2.1 2.8' 2.7 2.9' 2.7' 2.7 2.8 2.7 2.4 2.2 2.0 45 Philippines 6.3 6.1' 6.2' 5.9 6.0 6.1 6.0 6.0 5.7 5.6 5.7 46 Thailand 1.6 2.2 1.9 1.8 1.8 1.7 1.6 1.6 1.4 1.3 1.1 47 Other Asia 1.1 1.0 1.1 .9' 1.1' 1.1 .9 .9 1.0 .9 .8 Africa 48 Egypt 1.2 1.5 1.4 1.2 1.2 1.1 1.0 1.0 1.0 .9 .9 49 Morocco .7 .8 .8 .8 .8 .8 .8 .9 .9 .9 .9 50 Zaire .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa4 2.4 2.3 1.9 1.9 2.1 2.2 2.0 2.0 1.9 1.9 1.7 52 Eastern Europe 6.2 5.3 4.9 4.5 4.4 4.3 4.3 4.6 4.2 4.0 4.0 53 U.S.S.R .3 .2 .2 .2 .1 .2 .3 .2 .1 .3 .3 54 Yugoslavia 2.2 2.4 2.3 2.3 2.3 2.2 2.2 2.4 2.2 2.0 2.0 55 Other 3.7 2.8 2.4 2.1 2.0 1.9 1.8 1.9 1.8 1.7 1.7 56 Offshore banking centers 66.0 68.9' 72.8' 65.1' 65.6' 63.2 63.9 58.8 65.4 61.5 57.2 57 Bahamas 19.0 21.7' 27.4 23.3 21.5 20.1 21.1 16.6 21.4 21.5 17.3 58 Bermuda .9 .9 .7 1.0 .9 .7 .9 .8 .7 .7 .4 59 Cayman Islands and other British West Indies 12.8 12.2' 12.2 11.1 11.8 12.3 12.1 12.3 13.4 11.3 12.8 60 Netherlands Antilles 3.3 4.2' 3.3 3.1 3.4 3.3 3.2 2.3 2.3 2.3 2.3 61 Panama5 7.5 5.8 6.5 5.6 6.7 5.5 5.4 6.1 6.0 5.9 5.5 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .0 .1 .1 .1 63 Hong Kong 13.3' 13.8' 12.4' 11.6' 11.4' 11.4 11.4 11.4 11.5 11.4 9.4 64 Singapore 9.1 10.3' 10.2 9.4 9.8 9.9 9.7 9.4 9.9 8.4 9.4 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 17.5' 16.8' 17.3' 17.1' 17.3' 16.9 16.9 17.3 16.9 16.8 17.4 1. The banking offices covered by these data are the U.S. offices and foreign from $50 million to $150 million equivalent in total assets, the threshold now branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. applicable to all reporting branches. Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. Besides the Organization of Petroleum Exporting Countries shown individ- (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are ually, this group includes other members of OPEC (Algeria, Gabon, Iran, Iraq, adjusted to exclude the claims on foreign branches held by a U.S. office or another Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well foreign branch of the same banking institution. The data in this table combine as Bahrain and Oman (not formally members of OPEC). foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims 4. Excludes Liberia. of U.S. offices in table 3.18 (excluding those held by agencies and branches of 5. Includes Canal Zone beginning December 1979. foreign banks and those constituting claims on own foreign branches). 6. Foreign branch claims only. 2. Beginning with June 1984 data, reported claims held by foreign branches 7. Includes New Zealand, Liberia, and international and regional organizahave been reduced by an increase in the reporting threshold for "shell" branches tions. 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 2,596 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 0 0 0 0 0 0 0 0 31 Oil-exporting countries3 12 27 41 31 30 22 21 4 32 All other4 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 2,396 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • November 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.P 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 1100,,005555 9,463 10,040 9,408 12 Trade receivables 9,994 9,721 9,177 8,784 88,,668888 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 698 764 961 859 640 %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 2,712 2,982 2,620 53 Japan 1,047 1,114 1,191 1,154 954 884 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 1986 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998844 11998855 Jan.- Jan. Feb. Mar. Apr. May June July? July U.S. corporate securities STOCKS 1 Foreign purchases 59,834 81,994 86,254 9,312 10,593 13,503 15,306 13,107' 11,168 13,265 2 Foreign sales 62,814 77,054 70,854 7,564 8,835 10,640 11,420 10,310' 10,824 11,261 3 Net purchases, or sales (-) -2,980 4,940 15,400 1,748 1,758 2,863 3,886 2,796' 345 2,005 4 Foreign countries -3,109 4,856 15,426 1,760 1,738 2,816 3,823' 2,754' 465 2,070 5 Europe -3,077 2,057 9,145 1,151 1,395 2,205 2,049 1,577 193 574 6 France -405 -438 375 -71 -68 -26 36 102 219 182 7 Germany -50 730 440 134 234 229 47 99' -174 -130 8 Netherlands -357 -123 905 109 121 166 123 236 97 53 9 Switzerland -1,542 -75 2,036 309 420 698 566 375 -134 -198 10 United Kingdom -677 1,665 4,040 577 635 1,021 719 568 41 478 11 Canada 1,691 356 573 117 -59 77 50 43 130 214 12 Latin America and Caribbean 495 1,718 2,000 -85 213 198 863' 482 60 269 N Middle East1 -1,992 238 717 208 -19 127 338 117 -236 181 14 Other Asia -378 295 2,501 314 154 122 376 421 288 825 IS Africa -22 24 233 25 30 59 48 43 -3 30 16 Other countries 175 168 258 29 24 28 98 70 32 -23 17 Nonmonetary international and regional organizations 129 84 -26 -12 20 47 63 42 -121 -65 BONDS2 18 Foreign purchases 39,296 87,182 72,487 7,008 9,285' 12,564 13,603' 12,125' 9,166 8,735 19 Foreign sales 26,399' 43,046 41,904 3,782 4,936' 7,420 8,967' 5,350' 5,758 5,691 20 Net purchases, or sales (—) 12,897' 44,137 30,583 3,226 4,350' 5,144 4,636' 6,776' 3,408 3,044 21 Foreign countries 12,600' 44,231 29,409 3,329 4,201 4,843 4,446' 6,679' 2,928 2,982 77 Europe 11,697 40,047 24,788 2,923 3,123 3,690 3,641' 6,221' 2,956 2,234 ?3 France 207 210 37 26 -33 -17 -22' 83 -6 6 24 Germany 1,724 2,001 -28 -11 45 -224 -73 205' 188 -158 25 Netherlands 100 222 128 86 3 25 2 89 -37 -39 76 Switzerland 643 3,987 3,585 258 511 459 1,231 456 492 179 27 United Kingdom 8,429 32,762 21,078 2,544 2,617 3,374 2,578' 5,631 2,214 2,120 78 Canada -62 189 42 3 -31 -198 75 53' 55 85 79 Latin America and Caribbean 376 498 940 30 27 200 263 142 64 215 30 Middle East1 -1,230' -2,643 -2,087 -174 0 15 -389 -202 -632 -706 31 Other Asia 1,817 6,091 5,697 558 1,064 1,144 840' 464 480 1,147 32 Africa 1 11 2 1 1 0 3 -2 3 -3 33 Other countries 0 38 27 -9 17 -10 13' 3 2 11 34 Nonmonetary international and regional organizations 297 -95 1,174 -103 149' 301 190 96 480 61 Foreign securities 35 Stocks, net purchases, or sales (-) -1,101 -3,888 -3,806 114 -771 -1,440 -1,675' -219' -238 423 36 Foreign purchases 14,816 20,856 24,958 2,521 2,937 3,618 4,384' 3,457 3,761 4,279 37 Foreign sales 15,917 24,743 28,764 2,406 3,708 5,058 6,059' 3,676' 4,000 3,857 38 Bonds, net purchases, or sales (-) -3,930 -4,042 -3,114 -55 -966 -3,003 -1,035' 83' 1,530 332 39 Foreign purchases 56,017 81,160 90,059 9,810 10,418 12,438 15,194' 13,275 15,485 13,439 40 Foreign sales 59,948 85,202 93,173 9,865 11,385 15,441 16,229' 13,192' 13,955 13,106 41 Net purchases, or sales (-), of stocks and bonds .... -5,031 -7,930 -6,920 60 -1,737 -4,443 -2,711' -136' 1,292 755 42 Foreign countries -4,642 -8,993 -7,271 -28 -1,877 -4,119 -2,581' -208' 1,112 431 43 Europe -8,655 -9,927 -10,529 -387 -1,916 -3,840 -2,435' 123' -1,343 -731 44 Canada 542 -1,686 -974 -219 -319 -491 -286 80 16 244 45 Latin America and Caribbean 2,460 1,845 2,195 233 297 121 175' 346 740 283 46 1,356 659 2,546 393 562 127 -130' -745 1,641 697 47 Africa -108 75 42 7 10 4 6 3 3 9 48 Other countries -238 41 -551 -56 -512 -40 89' -16 55 -70 49 Nonmonetary international and regional organizations -389 1,063 351 88 140 -324 -130 73' 180 324 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 • November 1986 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1986 1986 Country or area 11998844 11998855 J Ju a l n y . - Jan. Feb. Mar. Apr. May' June July? Transactions, net purchases or sales (-) during period1 1 Estimated total2 21,501 29,007 16,069 -2,933 206' 9,572 8,363' -2,215 3,111 -34 2 Foreign countries2 16,496 28,551 16,562 -2,459 3,737 2,361 8,103' -335 2,229 2,925 3 Europe2 11,014 4,145 11,797 149 1,672 1,813 1,625' 1,434 2,561 2,543 4 Belgium-Luxembourg 287 476 -102 -9 -2 -1% 29 39 82 -46 5 Germany2 2,929 1,917 2,693 129 459 322 139' 468 357 818 6 Netherlands 449 269 1,568 27 -261 61 81 -31 -64 1,756 7 Sweden 40 976 384 -200 191 -14 113' 236 16 42 8 Switzerland2 656 760 788 53 115 22 163 365 349 -278 9 United Kingdom 5,188 -1,954 4,545 36 1,240 1,474 -206' 696 697 609 10 Other Western Europe 1,466 1,701 1,920 114 -72 144 1,307' -339 1,125 -358 11 Eastern Europe 0 0 0 0 0 0 0 0 0 0 12 Canada 1,586 -188 882 -477 -131 762 55 908 -302 67 13 Latin America and Caribbean 1,418 4,312 766 108 584 227 1,234' -954 -460 28 14 Venezuela 14 238 0 -53 -63 127 1% 36 -170 -72 15 Other Latin America and Caribbean 536 2,343 1,056 87 448 171 173' 372 -290 96 16 Netherlands Antilles 869 1,731 -289 74 200 -70 865 -1,363 0 5 17 2,431 19,859 2,385 -2,179 1,311 -446 4,797' -1,698 515 84 18 Japan 6,289 17,880 677 -2,474 1,601 140 1,973 -1,229 223 443 19 -67 112 -41 -8 -12 -18 -1 -2 -5 6 20 All other 114 311 773 -52 314 22 394 -22 -80 198 21 Nonmonetary international and regional organizations 5,009 458 -495 -475 -3,533R 7,211 260' -1,881 882 -2,959 72 International 4,612 -420 -598 -194 -3,766' 6,957 198' -1,889 899 -2,804 23 Latin American regional 0 18 123 14 51 23 30 0 5 0 MEMO 74 Foreign countries2 16,496 28,551 16,562 -2,459 3,737 2,361 8,103' -335 2,229 2,925 ?5 Official institutions 505 8,088 8,550 362 619 394 3,862' 157 1,612 1,544 26 Other foreign2 15,992 20,462 8,015 -2,820 3,119 1,967 4,242' -491 618 1,380 Oil-exporting countries 77 Middle East3 -6,270 -1,581 412 220 -301 -607 1,334' -14 -290 69 28 Africa4 -101 7 3 1 0 -2 1 1 0 2 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 Aug. 31, 1986 Rate on Aug. 31, 1986 Rate on Aug. 31, 1986 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Austria.. 4.0 Aug. 1985 France1 7.0 June 1986 Norway 8.0 June 1983 Belgium . 8.0 May 1986 Germany, Fed. Rep. of 3.5 Mar. 1986 Switzerland 4.0 Mar. 1983 Brazil... 49.0 Mar. 1981 Italy 12.0 May 1986 United Kingdom2. Canada.. 8.58 Aug. 1986 Japan 3.5 Apr. 1986 Venezuela Oct. 1985 Denmark 7.0 Oct. 1983 Netherlands 4.5 Mar. 1986 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 Feb. Mar. Apr. May June July Aug. 1 Eurodollars 9.57 10.75 8.27 7.89 7.42 6.80 6.86 6.95 6.54 6.06 2 United Kingdom 10.06 9.91 12.16 12.60 11.70 10.43 10.16 9.70 9.91 9.79 3 Canada 9.48 11.29 9.64 11.81 10.94 9.57 8.60 8.72 8.45 8.50 4 Germany 5.73 5.96 5.40 4.47 4.49 4.48 4.58 4.59 4.61 4.56 5 Switzerland 4.11 4.35 4.92 3.85 3.84 4.04 4.32 4.96 4.80 4.30 6 Netherlands 5.58 6.08 6.29 5.74 5.44 5.23 5.76 5.90 5.69 5.28 7 France 12.44 11.66 9.91 8.81 8.28 7.66 7.21 7.23 7.13 7.09 8 Italy 18.95 17.08 14.86 15.91 16.05 13.62 12.35 11.78 11.70 11.18 9 Belgium 10.51 11.41 9.60 9.75 9.75 8.51 7.90 7.27 7.25 7.25 10 Japan 6.49 6.32 6.47 6.04 5.47 4.85 4.58 4.64 4.62 4.68 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • November 1986 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1986 CCoouunnttrryy//ccuurrrreennccyy 11998833 11998844 11998855 Mar. Apr. May June July Aug. 1 Australia/dollar1 90.14 87.937 70.026 70.79 72.28 72.72 68.89 62.91 61.23 2 Austria/schilling 17.968 20.005 20.676 15.976 15.965 15.667 15.699 15.117 14.502 3 Belgium/franc 51.121 57.749 59.336 46.603 46.394 45.497 45.633 44.304 42.701 4 Brazil/cruzeiro 573.27 1841.50 6205.10 13.843 13.84 13.84 13.84 13.84 13.84 5 Canada/dollar 1.2325 1.2953 1.3658 1.4009 1.3879 1.3757 1.3899 1.3808 1.3885 6 China, P.R./yuan 1.9809 2.3308 2.9434 3.2202 3.2143 3.2014 3.2115 3.6435 3.7129 7 Denmark/krone 9.1483 10.354 10.598 8.4096 8.3928 8.2479 8.2822 8.0635 7.7657 8 Finland/markka 5.5636 6.0007 6.1971 5.1517 5.1235 5.0967 5.1954 5.0744 4.9377 9 France/franc 7.6203 8.7355 8.9799 6.9964 7.2060 7.0967 7.1208 6.9323 6.7215 10 Germany/deutsche mark 2.5539 2.8454 2.9419 2.2752 2.2732 2.2277 2.2337 2.1517 2.0621 11 Greece/drachma 87.895 112.73 138.40 141.43 142.50 139.64 140.98 138.40 134.68 12 Hong Kong/dollar 7.2569 7.8188 7.7911 7.8125 7.7957 7.8080 7.8107 7.8123 7.8003 13 India/rupee 10.1040 11.348 12.332 12.289 12.393 12.466 12.599 12.508 12.567 14 Ireland/pound1 124.81 108.64 106.62 132.87 133.71 136.62 135.68 139.00 134.67 15 Italy/lira 1519.30 1756.10 1908.90 1548.43 1559.45 1528.50 1533.10 1478.31 1420.33 16 Japan/yen 237.55 237.45 238.47 178.69 175.09 167.03 167.54 158.61 154.18 17 Malaysia/ringgit 2.3204 2.3448 2.4806 2.5367 2.5981 2.5978 2.6231 2.6455 2.6121 18 Netherlands/guilder 2.8543 3.2083 3.3184 2.5678 2.5629 2.5082 2.5154 2.4236 2.3242 19 New Zealand/dollar1 66.790 57.837 49.752 52.820 56.127 56.666 54.585 53.176 50.068 20 Norway/krone 7.3012 8.1596 8.5933 7.1711 7.1603 7.4106 7.6117 7.4800 7.3534 21 Portugal/escudo 111.610 147.70 172.07 149.40 150.79 149.12 151.09 148.67 146.17 22 Singapore/dollar 2.1136 2.1325 2.2008 2.1600 2.1880 2.2157 2.2232 2.1861 2.1601 23 South Africa/rand1 89.85 69.534 45.57 49.04 48.77 45.67 39.49 39.04 38.39 24 South Korea/won 776.04 807.91 861.89 886.66 887.95 889.09 890.74 888.59 886.45 25 Spain/peseta 143.500 160.78 169.98 143.06 144.11 141.62 142.91 137.58 134.11 26 Sri Lanka/rupee 23.510 25.428 27.187 27.623 27.791 27.932 27.955 28.065 28.187 27 Sweden/krona 7.6717 8.2706 8.6031 7.2610 7.2433 7.1458 7.2124 7.0715 6.9365 28 Switzerland/franc 2.1006 2.3500 2.4551 1.9150 1.9016 1.8538 1.8406 1.7445 1.6616 29 Taiwan/dollar n.a. 39.633 39.889 39.027 38.689 38.460 38.163 38.119 37.422 30 Thailand/baht 22.991 23.582 27.193 26.418 26.429 26.327 26.400 26.204 26.093 31 United Kingdom/pound1 151.59 133.66 129.74 146.74 149.85 152.11 150.85 150.71 148.61 MEMO 32 United States/dollar2 125.34 138.19 143.01 116.05 115.67 113.27 113.77 110.38 107.50 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

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

A70 Special Tables • November 1986 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 19861 Millions of dollars All states2 New York California Illinois IItteemm inc T I l B o u F t d a s i l n g o IB nl F y s 3 inc T I l B o u F t d a s i l n g o IB nl F y s 3 inc T IB l o u F t d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 1 Total assets4 316,822 159,404 236,365 125,745 49,179 22,175 16,262 6,361 2 Claims on nonreiated parties 290,051 136,821 219,319 107,712 42,397 19,540 16,195 6,237 3 Cash and balances due from depository institutions 70,603 55,863 59,749 46,923 66,,002277 55,,445588 33,,888822 33,,007744 4 Cash items in process of collection and unposted debits 283 0 252 0 12 0 10 0 5 Currency and coin (U.S. and foreign) 23 n.a. 16 n.a. 2 n.a. 2 n.a. 6 Balances with depository institutions in United States 38,353 26,322 31,557 21,176 3,872 33,,338888 22,,228833 11,,554411 7 U.S. branches and agencies of other foreign banks (including IBFs) 31,876 24,626 25,834 19,700 3,554 3,220 2,021 11,,449999 8 Other depository institutions in United States (including IBFs) 6,478 1,696 5,723 1,477 318 168 262 42 9 Balances with banks in foreign countries and with foreign central banks 30,331 29,541 26,425 25,746 2,102 2,070 1,551 1,532 10 Foreign branches of U.S. banks 2,297 2,228 2,032 1,964 122 121 135 135 11 Other banks in foreign countries and foreign central banks 28,033 27,313 24,393 23,782 1,980 1,950 1,416 1,397 12 Balances with Federal Reserve Banks 1,614 n.a. 1,499 n.a. 40 n.a. 35 n.a. 13 Total securities and loans 181,390 77,248 128,933 57,705 30,551 13,710 11,499 3,012 14 Total securities, book value 18,541 7,130 15,239 5,329 2,516 1,606 533 142 15 U.S. Treasury 3,714 n.a. 3,518 n.a. 67 n.a. 121 n.a. 16 Obligations of U.S. government agencies and corporations 1,491 n.a. 1,472 n.a. 18 n.a. 0 n.a. 17 Other bonds, notes, debentures and corporate stock (including state and local securities) 13,337 7,130 10,250 5,329 2,431 1,606 412 142 18 Federal funds sold and securities purchased under agreements to resell 9,533 1,059 8,702 1,001 476 11 118 0 19 U.S branches and agencies of other foreign banks .... 6,320 781 5,882 771 315 11 52 0 20 Commercial banks in United States 1,695 27 1,452 27 58 0 66 0 21 Other 1,518 251 1,368 204 103 0 0 0 22 Total loans, gross 162,998 70,142 113,793 52,396 28,077 12,107 10,969 2,870 23 Less: Unearned income on loans 149 24 99 20 42 3 4 0 24 Equals: Loans, net 162,849 70,118 113,694 52,376 28,035 12,104 10,965 2,870 Total loans, gross, by category 25 Real estate loans 6,187 67 3,038 47 1,303 18 423 0 26 Loans to depository institutions 55,183 36,548 40,216 25,017 10,495 8,235 2,911 2,084 27 Commercial banks in United States (including IBFs) . 30,903 14,258 22,142 8,588 6,593 4,447 1,821 1,071 28 U.S. branches and agencies of other foreign banks . 24,754 10,981 16,842 5,869 6,031 3,970 1,638 998 29 Other commercial banks in United States 6,150 3,276 5,300 2,719 562 477 183 73 30 Other depository institutions in United States (including IBFs) 68 0 64 0 0 0 0 0 31 Banks in foreign countries 24,212 22,291 18,009 16,430 3,902 3,787 1,090 1,013 32 Foreign branches of U.S. banks 983 921 792 740 160 160 15 15 33 Other banks in foreign countries 23,229 21,370 17,217 15,689 3,742 3,627 1,075 998 34 Other financial institutions 4,215 413 2,997 342 261 37 879 18 35 Commercial and industrial loans 73,483 18,726 47,768 15,318 13,733 2,260 6,044 384 36 U.S. addressees (domicile) 49,874 64 28,861 52 10,920 11 5,528 0 37 Non-U.S. addressees (domicile) 23,609 18,662 18,907 15,266 2,813 2,249 516 384 38 Acceptances of other banks 843 23 705 16 97 3 20 5 39 U.S. banks 630 0 552 0 62 0 0 0 40 Foreign banks 214 23 153 16 35 3 20 5 41 Loans to foreign governments and official institutions (including foreign central banks) 16,250 14,186 13,143 11,545 1,646 1,501 448 379 42 Loans for purchasing or carrying securities (secured and unsecured) 5,314 4 4,939 4 374 0 0 0 43 All other loans 1,522 174 988 106 167 53 244 0 44 All other assets 28,524 2,652 21,935 2,083 5,343 361 697 151 45 Customers' liability on acceptances outstanding 20,580 n.a. 15,781 n.a. 4,368 n.a. 192 n.a. 46 U.S. addressees (domicile) 12,380 n.a. 8,659 n.a. 3,446 n.a. 188 n.a. 47 Non-U.S. addressees (domicile) 8,200 n.a. 7,122 n.a. 922 n.a. 4 n.a. 48 Other assets including other claims on nonreiated parties 7,944 2,652 6,154 2,083 975 361 505 151 49 Net due from related depository institutions5 26,772 22,583 17,046 18,032 6,782 2,635 67 124 50 Net due from head office and other related depository institutions5 26,772 n.a. 17,046 n.a. 6,782 n.a. 67 n.a. 51 Net due from establishing entity, head offices, and other related depository institutions5 n.a. 22,583 n.a. 18,032 n.a. 2,635 n.a. 124 52 Total liabilities4 316,822 159,404 236,365 125,745 49,179 22,175 16,262 6,361 53 Liabilities to nonreiated parties 272,540 133,155 209,822 105,260 43,983 19,559 9,211 4,130 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A71 4.30 Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T I c B l o u F t d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l ng o IB nl F y s 3 54 Total deposits and credit balances 42,560 107,501 35,605 92,043 1,587 9,404 2,078 2,188 55 Individuals, partnerships, and corporations 33,996 13,674 27,731 10,740 1,402 369 1,680 57 56 U.S. addressees (domicile) 25,157 527 21,301 526 455 0 1,566 0 57 Non-U.S. addressees (domicile) 8,839 13,147 6,430 10,213 947 369 114 57 58 Commercial banks in United States (including IBFs) . 5,023 37,550 4,536 30,476 76 5,434 382 1,139 59 U.S. branches and agencies of other foreign banks . 1,736 29,962 1,370 24,479 40 4,268 318 900 60 Other commercial banks in United States 3,287 7,588 3,166 5,997 36 1,166 64 239 61 Banks in foreign countries 1,365 51,292 1,312 45,984 15 3,553 4 978 6? Foreign branches of U.S. banks 112 7,210 112 6,025 0 832 0 250 63 Other banks in foreign countries 1,252 44,082 1,200 39,959 15 2,721 4 728 64 Foreign governments and official institutions (including foreign central banks) 1,426 4,966 1,355 4,824 66 48 1 1155 65 All other deposits and credit balances 328 20 295 19 6 0 1 0 66 Certified and official checks 422 n.a. 374 n.a. 21 n.a. 10 n.a. 67 Transaction accounts and credit balances (excluding IBFs) 4,928 n.a. 4,291 n.a. 139 n.a. 148 n.a. 68 Individuals, partnerships, and corporations 3,039 n.a. 2,519 n.a. 109 n.a. 133 n.a. 69 U.S. addressees (domicile) 1,932 n.a. 1,637 n.a. 68 n.a. 129 n.a. 70 Non-U.S. addressees (domicile) 1,106 n.a. 882 n.a. 41 n.a. 5 n.a. 71 Commercial banks in United States (including IBFs) . 361 n.a. 343 n.a. 3 n.a. 0 n.a. 72 U.S. branches and agencies of other foreign banks . 132 n.a. 130 n.a. 1 n.a. 0 n.a. 73 Other commercial banks in United States 229 n.a. 214 n.a. 1 n.a. 0 n.a. 74 Banks in foreign countries 761 n.a. 730 n.a. 4 n.a. 3 n.a. 75 Foreign branches of U.S. banks 55 n.a. 55 n.a. 0 n.a. 0 n.a. 76 Other banks in foreign countries 706 n.a. 675 n.a. 4 n.a. 3 n.a. 77 Foreign governments and official institutions (including foreign central banks) 248 n.a. 242 n.a. 1 n.a. 1 n.a. 78 All other deposits and credit balances 98 n.a. 83 n.a. 1 n.a. 1 n.a. 79 Certified and official checks 422 n.a. 374 n.a. 21 n.a. 10 n.a. 80 Demand deposits (included in transaction accounts and credit balances) 4,081 n.a. 3,573 n.a. 77 n.a. 114400 n.a. 81 Individuals, partnerships, and corporations 2,673 n.a. 2,265 n.a. 49 n.a. 125 n.a. 8? U.S. addressees (domicile) 1,705 n.a. 1,487 n.a. 23 n.a. 120 n.a. 83 Non-U.S. addressees (domicile) 968 n.a. 778 n.a. 27 n.a. 5 n.a. 84 Commercial banks in United States (including IBFs) . 142 n.a. 127 n.a. 1 n.a. 0 n.a. 85 U.S. branches and agencies of other foreign banks . 3 n.a. 2 n.a. 0 n.a. 0 n.a. 86 Other commercial banks in United States 139 n.a. 124 n.a. 1 n.a. 0 n.a. 87 Banks in foreign countries 639 n.a. 610 n.a. 4 n.a. 3 n.a. 88 Foreign branches of U.S. banks 55 n.a. 55 n.a. 0 n.a. 0 n.a. 89 Other banks in foreign countries 585 n.a. 555 n.a. 4 n.a. 3 n.a. 90 Foreign governments and official institutions (including foreign central banks) 188 n.a. 118833 n.a. 1 n.a. 1 n.a. 91 All other deposits and credit balances 17 n.a. 14 n.a. 1 n.a. 11 n.a. 92 Certified and official checks 422 n.a. 374 n.a. 21 n.a. 1100 n.a. 93 Non-transaction accounts (including MMDAs, excluding IBFs) 37,632 n.a. 31,314 n.a. 1,448 n.a. 11,,993300 n.a. 94 Individuals, partnerships, and corporations 30,957 n.a. 25,213 n.a. 1,293 n.a. 1,547 n.a. 95 U.S. addressees (domicile) 23,225 n.a. 19,664 n.a. 387 n.a. 1,438 n.a. 96 Non-U.S. addressees (domicile) 7,733 n.a. 5,548 n.a. 906 n.a. 109 n.a. 97 Commercial banks in United States (including IBFs) . 4,662 n.a. 4,193 n.a. 74 n.a. 381 n.a. 98 U.S. branches and agencies of other foreign banks . 1,604 n.a. 1,240 n.a. 39 n.a. 318 n.a. 99 Other commercial banks in United States 3,058 n.a. 2,952 n.a. 35 n.a. 64 n.a. 100 Banks in foreign countries 604 n.a. 582 n.a. 11 n.a. 1 n.a. 101 Foreign branches of U.S. banks 57 n.a. 57 n.a. 0 n.a. 0 n.a. 102 Other banks in foreign countries 546 n.a. 525 n.a. 11 n.a. 1 n.a. 103 Foreign governments and official institutions (including foreign central banks) 1,179 n.a. 1,113 n.a. 65 n.a. 00 n.a. 104 All other deposits and credit balances 230 n.a. 213 n.a. 5 n.a. 0 n.a. 105 IBF deposit liabilities n.a. 107,501 n.a. 92,043 n.a. 9,404 n.a. 2,188 106 Individuals, partnerships, and corporations n.a. 13,674 n.a. 10,740 n.a. 369 n.a. 57 107 U.S. addressees (domicile) n.a. 527 n.a. 526 n.a. 0 n.a. 0 108 Non-U.S. addressees (domicile) n.a. 13,147 n.a. 10,213 n.a. 369 n.a. 57 109 Commercial banks in United States (including IBFs) . n.a. 37,550 n.a. 30,476 n.a. 5,434 n.a. 1,139 110 U.S. branches and agencies of other foreign banks . n.a. 29,962 n.a. 24,479 n.a. 4,268 n.a. 900 111 Other commercial banks in United States n.a. 7,588 n.a. 5,997 n.a. 1,166 n.a. 239 11? Banks in foreign countries n.a. 51,292 n.a. 45,984 n.a. 3,553 n.a. 978 113 Foreign branches of U.S. banks n.a. 7,210 n.a. 6,025 n.a. 832 n.a. 250 114 Other banks in foreign countries n.a. 44,082 n.a. 39,959 n.a. 2,721 n.a. 728 115 Foreign governments and official institutions (including foreign central banks) n.a. 44,,996666 n.a. 44,,882244 n.a. 4488 n.a. 1155 116 All other deposits and credit balances n.a. 20 n.a. 19 n.a. 0 n.a. 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • November 1986 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 19861—Continued Millions of dollars All states2 New York California Illinois IItteemm inc T I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 117 Federal funds purchased and securities sold under agreements to repurchase 31,853 1,330 24,624 782 5,869 448899 883366 55 118 U.S. branches and agencies of other foreign banks ... 8,495 680 6,378 413 1,815 240 118 5 119 Other commercial banks in United States 14,927 95 11,109 85 3,005 10 564 0 170 Other 8,431 555 7,137 284 1,048 239 154 0 121 Other borrowed money 61,568 21,947 34,773 10,535 21,746 9,368 3,629 1,798 177 Owed to nonrelated commercial banks in United States (including IBFs) 45,425 9,583 24,878 3,364 17,130 5,644 2,081 373 123 Owed to U.S. offices of nonrelated U.S. banks 21,919 2,297 13,051 1,176 7,070 960 837 48 124 Owed to U.S. branches and agencies of nonrelated foreign banks 23,506 7,285 11,827 2,188 10,060 4,684 11,,224444 332255 125 Owed to nonrelated banks in foreign countries 11,667 11,077 6,407 5,888 3,737 3,720 1,451 1,425 176 Owed to foreign branches of nonrelated U.S. banks .. 1,840 1,676 599 453 1,000 1,000 231 213 127 Owed to foreign offices of nonrelated foreign banks... 9,827 9,401 5,808 5,435 2,737 2,720 1,220 1,212 128 Owed to others 4,476 1,288 3,488 1,283 879 5 97 0 129 All other liabilities 29,058 2,376 22,778 1,900 5,377 298 480 139 130 Branch or agency liability on acceptances executed and outstanding 22,705 n.a. 1177,,558800 n.a. 44,,666699 n.a. 220044 n.a. 131 Other liabilities to nonrelated parties 6,353 2,376 5,197 1,900 709 298 275 139 132 Net due to related depository institutions5 44,283 26,250 26,543 20,485 5,196 2,615 7,051 2,230 133 Net due to head office and other related depository institutions5 44,283 n.a. 26,543 n.a. 5,196 n.a. 7,051 n.a. 134 Net due to establishing entity, head office, and other related depository institutions5 n.a. 26,250 n.a. 20,485 n.a. 2,615 n.a. 22,,223300 MEMO 135 Non-interest bearing balances with commercial banks in United States 2,109 63 1,938 63 68 0 49 0 136 Holding of commercial paper included in total loans .... 872 n.a. 465 n.a. 347 n.a. 45 n.a. 137 Holding of own acceptances included in commercial and industrial loans 3,807 n.a. 2,993 n.a. 661155 n.a. 112200 n.a. 138 Commercial and industrial loans with remaining maturity of one year or less 47,548 n.a. 29,731 n.a. 9,063 n.a. 44,,775555 n.a. 139 Predetermined interest rates 30,543 n.a. 17,571 n.a. 6,963 n.a. 3,581 n.a. 140 Floating interest rates 17,005 n.a. 12,160 n.a. 2,100 n.a. 1,174 n.a. 141 Commercial and industrial loans with remaining maturity of more than one year 25,935 n.a. 18,036 n.a. 4,670 n.a. 11,,228899 n.a. 142 Predetermined interest rates 9,291 n.a. 5,947 n.a. 1,670 n.a. 672 n.a. 143 Floating interest rates 16,644 n.a. 12,089 n.a. 3,000 n.a. 617 n.a. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 111144444444 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ooooffff nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnnaaaallll aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 47,054 n.a. 40,199 n.a. 1,503 n.a. 2,412 n.a. 111144445555 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 30,837 n.a. 25,806 n.a. 1,131 n.a. 1,616 n.a. 111144446666 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 124 111144447777 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 4,077 n.a. 3,758 n.a. 151 n.a. n.a. wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 673 12,140 n.a. 10,635 n.a. 221 n.a. n.a. All states2 New York California Illinois in T c I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 in T c IB l o u t F d a s i l n g o IB nl F y s 3 111144448888 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 1177,,888899 7,100 1144,,881111 5,310 22,,337733 1,595 553355 142 111155550000 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 4411,,229922 n.a. 2233,,882266 n.a. 1144,,777755 n.a. 22,,007788 n.a. 447711 221199 111177 4466 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, that no IBF data are reported for that item, either because the item is not an "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign eligible IBF asset or liability or because that level of detail is not reported for Banks." Details may not add to totals because of rounding. This form was first IBFs. From December 1981 through September 1985, IBF data were included in used for reporting data as of June 30, 1980, and was revised as of December 31, all applicable items reported. 1985. From November 1972 through May 1980, U.S. branches and agencies of 4. Total assets and total liabilities include net balances, if any, due from or due foreign banks had filed a monthly FR 886a report. Aggregate data from that report to related banking institutions in the United States and in foreign countries (see were available through the Federal Reserve statistical release G.l 1, last issued on footnote 5). On the former monthly branch and agency report, available through July 10, 1980. Data in this table and in the G. 11 tables are not strictly comparable the G. 11 statistical release, gross balances were included in total assets and total because of differences in reporting panels and in definitions of balance sheet liabilities. Therefore, total asset and total liability figures in this table are not items. comparable to those in the G.ll tables. 2. Includes the District of Columbia. 5. "Related banking institutions" includes the foreign head office and other 3. Effective December 1981, the Federal Reserve Board amended Regulations U.S. and foreign branches and agencies of the bank, the bank's parent holding D and Q to permit banking offices located in the United States to operate company, and majority-owned banking subsidiaries of the bank and of its parent International Banking Facilities (IBFs). As of December 31, 1985, data for IBFs holding company (including subsidiaries owned both directly and indirectly). are reported in a separate column. These data are either included in or excluded 6. In some cases two or more offices of a foreign bank within the same from the total columns as indicated in the headings. The notation "n.a." indicates metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH 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 Director1 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. isOfen dl.ooanrg f/r om the Federal Reserve Bank of Richmond. Federal Reserve Bank of St. Louis

A75 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

76 Federal Reserve Bulletin • November 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

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

A78 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. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- $13.50 each. TIONS. 1984. 120 pp. SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: ANNUAL REPORT. REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL ANNUAL REPORT: BUDGET REVIEW, 1985-86. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- $2.00 each in the United States, its possessions, Canada, ed at least monthly. (Requests must be prepaid.) and Mexico; 10 or more of same issue to one address, Consumer and Community Affairs Handbook. $60.00 per $18.00 per year or $1.75 each. Elsewhere, $24.00 per year. year or $2.50 each. Monetary Policy and Reserve Requirements Handbook. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint $60.00 per year. of Part I only) 1976. 682 pp. $5.00. Securities Credit Transactions Handbook. $60.00 per year. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. Federal Reserve Regulatory Service. 3 vols. (Contains all 1,168 pp. $15.00. three Handbooks plus substantial additional material.) ANNUAL STATISTICAL DIGEST $175.00 per year. 1974-78. 1980. 305 pp. $10.00 per copy. Rates for subscribers outside the United States are as 1981. 1982. 239 pp. $ 6.50 per copy. follows and include additional air mail costs: 1982. 1983. 266 pp. $ 7.50 per copy. Federal Reserve Regulatory Service, $225.00 per year. 1983. 1984. 264 pp. $11.50 per copy. Each Handbook, $75.00 per year. 1984. 1985. 254 pp. $12.50 per copy. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A FEDERAL RESERVE CHART BOOK. Issued four times a year in MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. February, May, August, and November. Subscription WELCOME TO THE FEDERAL RESERVE. includes one issue of Historical Chart Book. $7.00 per PROCESSING AN APPLICATION THROUGH THE FEDERAL REyear or $2.00 each in the United States, its possessions, SERVE SYSTEM. August 1985. 30 pp. Canada, and Mexico. Elsewhere, $10.00 per year or WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. $3.00 each. 93 pp. $2.50 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

A79 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 Bulletin 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF 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

A80 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS Bank Lending to Developing Countries. 10/84. IN BANKING BEFORE AND AFTER ACQUISITION, by Survey of Consumer Finances, 1983: A Second Report. Stephen A. Rhoades. April 1986. 32 pp. 12/84. 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- Union Settlements and Aggregate Wage Behavior in the ING: A REEXAMINATION AND AN APPLICATION, by 1980s. 12/84. John T. Rose and John D. Wolken. May 1986. 13 pp. 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. Recent Developments in the Bankers Acceptance Market. REPRINTS OF BULLETIN ARTICLES 1/86. Most of the articles reprinted do not exceed 12 pages. The Use of Cash and Transaction Accounts by American Families. 2/86. Financial Characteristics of High-Income Families. 3/86. Foreign Experience with Targets for Money Growth. 10/83. U. S. International Transactions in 1985. 5/86. Intervention in Foreign Exchange Markets: A Summary of Prices, Profit Margins, and Exchange Rates. 6/86. Ten Staff Studies. 11/83. Agricultural Banks under Stress. 7/86. A Financial Perspective on Agriculture. 1/84. Foreign Lending by Banks: A Guide to International and Survey of Consumer Finances, 1983. 9/84. U.S. Statistics. 10/86. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Index to Statistical Tables References are to pages A3-A73 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21, 70-73 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) BANKERS acceptances, 9, 23, 24 Dividends, corporate, 35 Bankers balances, 18-20 (See also Foreigners) Bonds (See also U.S. government securities) EMPLOYMENT, 45 New issues, 34 Eurodollars, 24 Rates, 24 Branch banks, 21, 55, 70-73 FARM mortgage loans, 39 Business activity, nonfinancial, 44 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business expenditures on new plant and equipment, 36 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) Federal finance Debt subject to statutory limitation, and types and ownership of gross debt, 30 CAPACITY utilization, 46 Receipts and outlays, 28, 29 Capital accounts Treasury financing of surplus, or deficit, 28 Banks, by classes, 18 Treasury operating balance, 28 Federal Reserve Banks, 10 Federal Financing Bank, 28, 33 Central banks, discount rates, 67 Federal funds, 5, 17, 19, 20, 21, 24, 28 Certificates of deposit, 24 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 38, 39 Commercial banks, 16, 19, 70 Federal Housing Administration, 33, 38, 39 Weekly reporting banks, 19-21 Federal Land Banks, 39 Commercial banks Federal National Mortgage Association, 33, 38, 39 Assets and liabilities, 18-20 Federal Reserve Banks Commercial and industrial loans, 16, 18, 19, 20, 21, 70 Condition statement, 10 Consumer loans held, by type, and terms, 40, 41 Discount rates (See Interest rates) Loans sold outright, 19 U.S. government securities held, 4, 10, 11, 30 Nondeposit funds, 17 Federal Reserve credit, 4, 5, 10, 11 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, 70-73 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 68 DEBITS to deposit accounts, 15 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18-21 Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 GOLD REAL estate loans Certificate account, 10 Banks, by classes, 16, 19, 20, 39 Stock, 4, 54 Financial institutions, 26 Government National Mortgage Association, 33, 38, 39 Terms, yields, and activity, 38 Gross national product, 51 Type of holder and property mortgaged, 39 Repurchase agreements, 5, 17, 19, 20, 21 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 assets, 35 New issues, 34 Investments (See also specific types) Prices, 25 Banks, by classes, 18, 19, 20, 21, 26 Special drawing rights, 4, 10, 53, 54 Commercial banks, 3, 16, 18-20, 39 State and local governments Federal Reserve Banks, 10, 11 Deposits, 19, 20 Financial institutions, 26, 39 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 45 Ownership of securities issued by, 19, 20, 26 Life insurance companies (See Insurance companies) Rates on securities, 24 Loans (See also specific types) Stock market, selected statistics, 25 Banks, by classes, 18-20 Stocks (See also Securities) Commercial banks, 3, 16, 18-20, 70 New issues, 34 Federal Reserve Banks, 4, 5, 6, 10, 11 Prices, 25 Financial institutions, 26, 39 Insured or guaranteed by United States, 38, 39 Student Loan Marketing Association, 33 MANUFACTURING TAX receipts, federal, 29 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

A83 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Joseph A. Baute Frank E. Morris George N. Hatsopoulos Robert W. Eisenmenger NEW YORK* 10045 John Brademas E. Gerald Corrigan Clifton R. Wharton, Jr. Thomas M. Timlen Buffalo 14240 Mary Ann Lambertsen John T. Keane PHILADELPHIA 19105 Robert M. Landis Edward G. Boehne Nevius M. Curtis Richard L. Smoot CLEVELAND* 44101 William H. Knoell Karen N. Horn E. Mandell de Windt William H. Hendricks Cincinnati 45201 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

A84 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1984 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. ? -r. 1 5 7 s 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 1 :: What Ttuthln Lending Means ToYou Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis