Federal Reserve Bulletin, 1987-01

VOLUME 73 • NUMBER 1 • JANUARY 1987 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 L THE ECONOMIC EFFECTS OF New members appointed to Pricing Policy PROPOSED CEILINGS ON CREDIT Committee. CARD INTEREST RATES Standard format approved for Fedwire in- This article focuses on issues raised by the formation. proposed federal limits on credit card rates, Quarterly financial results available for including the likely effects of such ceilings priced service operations. on the availability of credit card services to different groups of consumers. Proposal to provide a redeposit service for small checks that are returned for insuffi- 14 TREAS UR Y AND FEDERAL RESER VE cient funds; proposal to charge fees for the FOREIGN EXCHANGE OPERATIONS processing of applications and for supervision and general oversight of Edge Corpora- After declining without interruption for tions; proposal to amend Regulation Z; nearly a year and a half, the dollar steadied proposed revisions to official staff during the period from August through Occommentaries on Regulations B, E, and Z; tober 1986. proposed list of factors to be considered in consolidations of priced services across 20 STAFF STUDIES state lines. In "Responses to Deregulation: Retail De- Publication of Industrial Production—1986 posit Pricing from 1983 through 1985," the Revision. authors examine pricing by commercial banks and thrift institutions after the re- Errata in BULLETIN table. moval in October 1983 of interest rate ceil- Publication of Financial Futures and Opings on small time accounts. tions in the U.S. Economy. 22 INDUSTRIAL PRODUCTION Changes in Board staff. Industrial production was unchanged over- Admission of two state banks to memberall in October. ship in the Federal Reserve System. 24 ANNOUNCEMENTS 31 RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE Proposed investment by Sumitomo Bank deemed consistent with Bank Holding At its meeting on September 23, 1986, the Company Act. Committee adopted a directive that called for no change in the current degree of Changes in amounts subject to reserve repressure on reserve positions. The memquirements. bers expected this approach to policy im- Revisions to capital adequacy guidelines. plementation to be consistent with some reduction in the growth of M2 and M3 to Fee schedules for 1987 announced for serannual rates of 7 to 9 percent over the fourvices provided by the Reserve Banks. month period from August to December. Tiered pricing structure approved for check Over the same interval, growth in Ml was collection services. expected to moderate from the exception- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ally large increase during the past several A l FINANCIAL AND B USIN ESS S TA TIS TICS months. Because the prospective behavior A3 Domestic Financial Statistics of Ml remained subject to unusual uncer- A44 Domestic Nonfinancial Statistics tainty, the Committee again decided not to A53 International Statistics specify a rate of expected growth for this aggregate in the operational paragraph of A69 GUIDE TO TABULAR PRESENTATION, the directive but to continue to evaluate Ml STATISTICAL RELEASES, AND SPECIAL in the light of the performance of the broad- TABLES er aggregates and other factors. The members indicated that slightly greater reserve A76 BOARD OF GOVERNORS AND STAFF restraint would, or slightly lesser restraint might, be acceptable over the intermeeting A78 FEDERAL OPEN MARKET COMMITTEE period depending on the behavior of the AND STAFF; ADVISORY COUNCILS monetary aggregates, taking into account the strength of the business expansion, the A80 FEDERAL RESERVE BOARD performance of the dollar in foreign ex- PUBLICATIONS change markets, progress against inflation, and conditions in domestic and internation- A83 INDEX TO STATISTICAL TABLES al credit markets. The members agreed that the intermeeting range for the federal funds A85 FEDERAL RESERVE BANKS, BRANCHES, rate, which provides a mechanism for initi- AND OFFICES ating consultation of the Committee when its boundaries are persistently exceeded, A86 MAP OF FEDERAL RESERVE SYSTEM should be left unchanged at 4 to 8 percent. 37 LEGAL DEVELOPMENTS Various bank holding company, bank service corporation, and bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Interest Rates This article was prepared by Glenn B. Canner of two bills introduced in the House. Had either and James T. Fergus of the Board's Division of Senate bill been in effect, the more restrictive Research and Statistics. Patricia A. Boerschig, rate limit would have cut bank card rates during Julia A. Springer, and Janice S. Westfall provid- most of the period, and in the absence of comed research assistance. Footnotes appear at the pensating changes, it also would have reduced end of the article. bank card revenues. Rates for retail store credit cards generally have been in line with those of Most interest rates have fallen substantially since bank cards, so the proposed federal ceilings the early 1980s, but those on credit card debt likely would have reduced revenue for retail have changed relatively little. This disparity has credit card plans. Both bank and retail store led to assertions that credit card rates are exces- credit card services and pricing probably would sive in view of the decline in funding costs of have been altered in reaction to a large cut in card issuers. As a result, several bills were revenue. The scope of such adjustments depends considered in the Congress in 1986 that would to a great extent on current and expected profits have imposed a nationwide rate ceiling on credit on credit card services. card accounts. This article focuses on issues raised by the proposed federal limits on credit card rates, Historical Evidence on Profits including the likely effects of such ceilings on the availability of credit card services to different The annual net earnings of bank card plans groups of consumers. It also explores the conse- before taxes averaged 1.9 percent of balances quences, for consumers, of possible creditor outstanding from 1972 through 1985.1 Over the responses to rate ceilings such as modifying nonrate prices of card services, altering other 1. Characteristics of legislation considered in the U.S. Senate in 1986 to impose a national ceiling terms on credit card accounts, and raising prices on credit card rates' on merchandise. S.1603, S. 1922, Characteristic National Credit Card Credit Cafd Holder Protection Act Protection Act Index Six-month Treasury IRS rate payable on EFFECTS ON THE PROFITABILITY bills, average overdue income tax investment yield for payments and on OF CREDIT CARD PLANS preceding calendar income tax refunds, year calculated by IRS from prime rate The nationwide ceilings on credit card rates charged by commercial banks suggested in recent congressional proposals during an earlier sixmonth period would be more restrictive, on the whole, than the various maximum credit card rates that already Markup 5 percentage points 4 percentage points above index rate above index rate exist in many states (table 1). A comparison of Current ceiling 13.085 percent for 14 percent for typical rates charged on bank credit cards during all of 1986 January through the 1972-86 period with the ceiling rates that June 1986; 13 percent for July would have applied under either of two proposed through December 1986. bills, S.1603 and S.1922, is presented in chart 1. The Senate bills take an approach similar to that 1. 99 Cong. 2 Sess. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1987 1. Average actual finance rate on bank credit card 2. Net earnings before taxes on various types plans and maximum rates with proposed ceilings1 of bank credit1 Percent Percentage of credit type outstanding Commercial other ipiftlp i t 1972 1976 1980 1984 1. Actual rate is an average of the most common rate charged on bank credit card plans by commercial banks reporting to the Federal 1. Based on annual data from the Federal Reserve's Functional Reserve. Cost Analysis. same period, average net returns on other major years. Although such costs constitute a much types of commercial bank lending were signifi- lower proportion of total costs for credit card cantly higher: 2.3 percent on real estate mort- operations than for other major types of bank gages, 2.4 percent on consumer installment debt, lending, the sharp decline in market interest rates and 2.8 percent on commercial and other loans. has contributed significantly to the recent im- Of course, there have been substantial year-to- provement in profits on credit card plans. In year variations. For example, the average profit- addition, the relaxation or removal of regulatory ability of bank cards rose to 3.4 percent in 1984 constraints on credit card interest rates in many and to 4.0 percent in 1985—a high for the 1972- states in the early 1980s has helped increase 85 period. However, before 1984 the profitability profits. These actions were taken after credit of bank card plans often was low relative to that card issuers experienced a severe squeeze on of other major types of bank lending (chart 2). profits in the 1979-81 period. Thus, the more reliable indicator of long-run Another factor in the 1984-85 rise in bank card bank card profitability seems to be an average profitability was the major improvement in the derived from periods of low as well as high quality of issuers' credit card portfolios following profitability rather than from the atypical experi- the economic disruptions of the late seventies ence of recent years. and early eighties. Credit card issuers responded Annual data on earnings of retail card plans are to falling profits by adopting much more selecnot available. However, two national surveys of tive credit standards in an effort to control costs. retailers were conducted on behalf of the Nation- Also, many credit card accounts were terminated al Retail Merchants Association in 1968 and 1985 because of delinquencies and payment defaults. and a study of retailers in New York State was Because the remaining account holders were made in 1973. The studies indicate that on aver- relatively good credit risks, delinquencies fell to age—not considering profits on associated mer- a historically low level in early 1984. As credit chandise sales—such credit card plans consis- card issuers generally have returned to less retently operated at a loss.2 strictive credit standards and as some issuers The unusually high level of bank credit card have undertaken aggressive marketing programs, profits in 1984 and 1985 is subject to differing collection problems have increased again. But interpretations, and definite conclusions will re- such problems remained at low to moderate quire additional evidence. But the most likely levels throughout 1984 and early 1985. explanation involves a combination of favorable It seems doubtful that the increase in profiteconomic trends and structural changes in credit ability reflects diminished competition in the card regulation. Credit card profits clearly bene- credit card industry in light of the number and fited from the drop in funding costs in recent variety of credit card issuers. Competing credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Rates 3 card plans within an area often include those 3. Net earnings before taxes on credit card plans and offered by several regional and national firms in estimated earnings under proposed rate ceilings1 addition to those of local retailers and financial Percentage of credit type outstanding institutions. The diversity of credit card pricing schemes, the heavy volume of solicitations, and the pace of entry by new competitors seem inconsistent with a general absence of competition. Moreover, the rapid development of competing sources of revolving credit—such as lines of credit secured by residential equity and overdraft credit lines on checking accounts—reinforces competitive pressures on the credit card industry. These considerations suggest that the recent high levels of bank card profits are unlikely to persist. Thus, longer-term profit experience seems to provide a more reliable basis for evalu- 1972 1976 1980 1984 ating the need for regulation of credit card rates. 1. Based on annual data from the Federal Reserve's Functional In sum, the evidence suggests that profits on Cost Analysis. credit card plans at banks typically have been low, while those on retail credit plans generally CREDIT CARD USE AND have been negative. Therefore, it seems unlikely REP A YMENT PA TTERNS that card issuers could absorb significant reductions in revenue from finance charges over the Some of the changes that credit card issuers long term merely by accepting lower profits. might make in response to reduced profitability include cutbacks in the quantity and quality of credit card services, increases in nonrate credit card prices, and boosts in retail prices for some Estimates of Profitability types of merchandise. The ways such changes under Proposed Rate Ceilings affect consumers depend on two factors: the prevalence and the manner of credit card use. Estimates based on data from the Federal Re- First, changes in the availability and pricing of serve's Functional Cost Analysis for commercial card-related services mainly affect consumers banks suggest the extent to which bank card who use credit cards—although, as explained profits could be cut by the proposed nationwide later, some indirect effects may be broader. rate ceilings. Each of the lower lines in chart 3 Second, the effect on credit card holders depends shows an estimate of net earnings before taxes on how they use their cards because some credit on bank credit card plans as a percentage of card fees and charges apply only to consumers credit outstanding, assuming that one of the who use their cards in particular ways—for exnationwide rate ceilings proposed in S.1603 and ample, to obtain cash advances or for long-term S.1922 had been in effect. The top line on the borrowing. Accordingly, information about use chart shows the actual profit experience of com- of credit cards by particular consumer groups is a mercial bank credit card lending, as previously key to evaluating the impact of a nationwide shown in chart 2.3 credit card rate ceiling. According to these estimates, bank credit card plans would have lost money in 10 of the 14 years from 1972 through 1985 under the rate ceilings in Credit Card Use either S.1603 or S.1922 and would have earned only marginal profits in two of the years. These During the past two decades the Survey Reestimates suggest that if such rate ceilings were search Center at the University of Michigan has enacted, the pressures to make cost and revenue monitored the use of credit cards. The most adjustments would be intense. recent data are for 1983. Overall, 62 percent of all Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 1987 2. Proportion of U.S. families with selected characteristics that use various types of credit cards, selected years, 1970-83 Any credit card Retail card Bank card FFaammiillyy cchhaarraacctteerriissttiicc 1970 1977 1983 1977 1983 1970 1977 1983 Family income (1982 dollars)1 Less than 5,000 15 21 18 15 14 2 8 4 5,000-7,499 19 24 29 19 25 3 4 12 7,500-9,999 19 27 33 22 26 2 7 19 10,000-14,999 31 41 49 31 40 7 15 26 15,000-19,999 46 56 64 47 55 12 26 36 20,000-24,999 56 66 71 53 62 15 31 40 25,000-29.999 62 72 78 59 67 21 41 49 30,000-39,999 72 78 87 68 76 25 53 63 40,000-49,999 76 87 88 76 81 31 58 70 50,000 or more 82 91 95 79 83 38 73 80 Age of head (years) Less than 25 42 39 38 29 32 12 16 20 25-34 61 65 61 53 52 20 40 37 35-44 57 72 73 63 63 23 49 52 45-54 60 68 69 56 61 19 40 45 55-64 46 61 72 52 62 12 36 50 65-74 37 49 60 39 53 7 20 37 75 or more 20 34 35 25 26 3 11 16 Education of head 0-8 grades 25 30 30 24 25 5 13 14 9-11 grades 40 45 46 39 38 10 21 25 High school diploma 58 62 62 52 55 18 32 36 Some college 59 70 71 59 62 20 41 48 College degree 82 89 90 73 77 34 69 70 Occupation of head Professional or technical n.a. 84 83 72 69 31 59 62 Manager n.a. 86 86 67 77 30 63 67 Self-employed manager n.a. 69 75 51 64 16 45 49 Clerical or sales n.a. 69 73 59 65 21 39 49 Craftsman or foreman n.a. 61 64 51 55 22 34 37 Operative, laborer, or service worker n.a. 43 45 42 38 10 18 24 Farmer or farm manager n.a. 33 37 24 29 7 16 27 Ail families 50 60 62 50 54 16 35 40 families reported using credit cards in 1983 (table reflect to some extent a substitution of credit 2). Fifty-four percent used one or more retail card borrowing for other types of installment store cards, 40 percent at least one bank card, credit that do not provide flexible repayment and 26 percent at least one gasoline card. terms. It may also reflect abandonment of propri- Regardless of the type of credit card, use rises etary credit card plans and 30-day credit prosharply and continuously with family income and grams by some gasoline companies and retail with the level of education of the family head. merchants or acceptance of bank credit cards by Retail store cards are the most widely used such firms in addition to the credit arrangements type of credit card. Their use is significantly they offer. more widespread than that of bank cards except among families with incomes of at least $50,000 or which are headed by persons with a college Repayment Practices education. However, the use of bank cards has been expanding rapidly in every family category Analyzing the effect on consumers of the proof income, age, education, and occupation— posed ceilings on credit card rates requires informore than doubling from 16 percent of all fam- mation about the use of the revolving debt feailies in 1970 to 40 percent in 1983. By contrast, ture available with bank and retail cards (an the proportion of families that use retail cards has option usually not available with gasoline or increased much more slowly, from about 45 travel and entertainment cards). Most revolving percent in 1971 (not shown) to 54 percent in 1983. credit plans do not charge interest if the card The more rapid growth in bank card use may holder pays the full amount billed before expira- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Rates 5 2. Continued Travel and Gasoline card entertainment card FFaammiillyy cchhaarraacctteerriissttiicc 1970 1977 1983 1970 1977 1983 Family income (1982 dollars)1 Less than 5,000 7 9 3 1 * * 5,000-7,499 9 8 6 3 » 2 7,500-9,999 11 11 14 2 1 2 10,000-14,999 18 16 16 4 1 2 15,000-19,999 28 24 19 8 2 5 20,000-24,999 33 30 22 7 2 6 25,000-29,999 42 32 31 12 3 10 30,000-39,999 50 41 40 10 10 13 40,000-49,999 57 54 43 13 12 14 50,000 or more 68 67 61 34 31 17 Age of head (years) Less than 25 23 12 8 5 2 7 25-34 41 31 20 10 7 10 35-44 39 42 30 11 12 13 45-54 39 39 30 12 12 10 55-64 34 34 37 10 6 11 65-74 25 27 26 6 3 5 75 or more 10 16 15 3 4 * Education of head 0-8 grades 14 12 8 3 1 1 9-11 grades 23 18 16 4 2 2 High school diploma 36 29 19 9 4 4 Some college 42 37 30 15 12 11 College degree 68 63 53 22 21 27 Occupation of head Professional or technical n.a. 56 43 n.a. 14 19 Manager n.a. 54 44 n.a. 22 25 Self-employed manager n.a. 48 40 n.a. 19 19 Clerical or sales n.a. 34 30 n.a. 7 11 Craftsman or foreman n.a. 29 23 n.a. 3 4 Operative, laborer, or service worker n.a. 16 12 n.a. 1 1 Farmer or farm manager n.a. 18 18 n.a. 4 1 All families 34 32 26 9 7 9 *Less than 0.5 percent, for Social Research, 1971; Thomas A. Durkin and Gregory E. n.a. Not available. Elliehausen, 1977 Consumer Credit Survey, Board of Governors of the 1. For each survey year, income is for the preceding calendar year. Federal Reserve System, 1978; Robert B. Avery and others, 1983 SOURCE. George Katona, Lewis Mandell, and Jay Schmiedeskamp, Survey of Consumer Finances, Board of Governors of the Federal 1970 Survey of Consumer Finances, University of Michigan, Institute Reserve System, forthcoming. tion of a specified interest-free period called the users may occasionally choose to deviate from grace period.4 (Cash advances typically earn their usual repayment pattern: convenience usfinance charges from the transaction date.) Thus, ers may repay a particularly large purchase in unlike most other kinds of credit, the way the installments; borrowers may sometimes repay credit card holder uses the account determines the outstanding balance completely. whether the account produces any interest in- Responses by consumers to questions about come for the card issuer and, if so, how much. their repayment practices have been consistent Consumer surveys indicate that credit card over time. In 1983, as in 1977, about half of users fall into two categories—convenience us- families that used bank or retail credit cards ers and borrowers—according to their customary stated that they nearly always paid their bills in repayment practice. Convenience users are full each month (table 3). Such consumers can be those who usually pay off their balance in full considered convenience users. The remaining during the grace period, thereby avoiding finance families were about evenly divided between charges; they use a credit card primarily for the those that sometimes paid their bills in full each convenience it affords in conducting transac- month and those that hardly ever repaid their tions. Borrowers are those who usually do not entire outstanding balance by the end of the pay off their balance in full during the grace billing cycle. period, thereby incurring finance charges. Card Repayment patterns vary considerably accord- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 1987 3. Distribution of families with selected characteristics that use bank or retail credit cards, by repayment practice, 1977 and 19831 Percent Nearly Sometimes Hardly ever always pays pays in full pays in full FFaammiillyy cchhaarraacctteerriissttiicc in full 1977 1983 1977 1983 1977 1983 Family income (1982 dollars)2 Less than 5.000 54 43 2288 19 1188 3388 5.000 7,499 52 49 18 25 30 27 7,500-9,999 45 51 29 27 27 22 10,000-14,999 44 48 31 23 26 28 15,000-19,999 41 43 31 27 28 31 20.000 24,999 42 41 31 28 27 31 25,000 29,999 55 45 27 23 18 32 30,000 39,999 56 46 26 29 18 25 40.000-49.999 61 43 25 31 13 26 50,000 or more 78 60 16 24 6 16 Age of head (years) Less than 25 3388 3399 3333 2288 2299 3333 25 34 43 37 33 29 25 34 35-44 41 35 31 33 27 32 45-54 47 46 29 27 24 27 55-64 60 54 24 24 16 21 65-74 77 76 13 12 10 12 75 or more 85 76 15 12 * 12 Education of head 0 8 grades 57 49 19 18 24 3322 9 11 grades 46 47 27 25 27 27 High school diploma 46 46 28 26 26 28 Some college 47 41 31 29 21 29 College degree 58 52 29 26 13 21 Occupation of head Professional, technical 5577 5500 3300 2277 1133 2233 Manager 53 50 32 28 15 21 Self-employed manager 65 60 16 24 19 16 Clerical or sales 48 44 30 26 21 30 Craftsman or foreman 46 44 28 29 26 28 Operative, laborer, or service worker 40 40 28 25 32 35 Farmer or farm manager 68 74 24 12 8 14 All families that use bank or retail cards 49 47 28 26 23 27 *Less than 0.5 percent. 2. For each survey year, income is for the preceding calendar year. 1. The 1977 survey covered 2,563 families, of whom 1,444 had bank SOURCE. Durkin and Elliehausen, 1977 Consumer Credit Survey; or store cards. The 1983 survey covered 3,824 families, of whom 2,087 Avery and others, 1983 Survey of Consumer Finances. had bank or store cards. ing to the characteristics of consumers. For of bank and retail credit card plans suggests that example, convenience use rises sharply with the card issuers would likely reduce costs and seek age of the household head. Nevertheless, sub- more revenue from alternative sources under the stantial proportions of families in each income proposed nationwide interest rate ceilings. These and education category reported that they nearly adjustments by issuers would erode some of the always paid off their entire outstanding balance benefits to borrowers and impose costs on other in full each month. consumers. Although specifying the responses that card issuers might choose is difficult, there are several likely possibilities (table 4). POSSIBLE ADJUSTMENTS BY CARD ISSUERS AND EFFECTS ON CONSUMERS Restricting the Availability of Services Those who stand to benefit from a nationwide limit on credit card rates are credit card borrow- Perhaps the most obvious cost-cutting step that ers, who would incur lower finance charges. credit card issuers might take is to tighten credit However, as noted, the low average profitability standards so as to reduce collection costs and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Rates 7 4. Proportion of selected groups of credit card holders affected by possible responses by bank and retail credit card issuers to more restrictive interest rate ceilings' Bank card holders Retail card holders TTyyppee ooff rreessppoonnssee Convenience users Borrowers Convenience users Borrowers Availability adjustments Tighten credit standards2 Some Some Some Some Reduce or eliminate services3 Some Some Some Some Pricing adjustments4 Reduce or eliminate interest-free period All Some All Some Alter method for calculating balance on which finance charge is based None All None All Increase retail price of merchandise All All All All Increase merchant discount fee (to the extent reflected in higher retail merchandise prices) All All All All Start charging, or increase, an annual fee All All All All Charge a fee for each transaction All All All All Charge a penalty fee for exceeding credit limit. Few Some Few Some Charge a penalty fee for each late payment None Some None Some Charge a fee for each cash advance Some Some Charge explicitly for services previously provided without charge5 Some Some Some Some 1. Convenience users typically pay off their balances during the operations might cause some financial institutions to eliminate credit interest-free period, thus avoiding finance charges. Borrowers typical- card plans in favor of other types of lending. Some retailers might ly do not pay off their balances during the interest-free period and eliminate in-house credit card plans in favor of accepting other credit therefore usually pay finance charges. cards. 2. Tighter credit standards ordinarily would be implemented by 4. The ability of card issuers to make some of these adjustments raising the minimum score necessary under a credit-scoring system to may be constrained by competition or by state law. qualify for a credit card or to obtain a higher credit limit. Factors that 5. Financial institutions and retailers might institute fees for servhave positive weights in most credit-scoring systems include an ices such as processing credit card applications, replacing lost cards, applicant's income, assets, duration of residence and employment, providing more than one credit card, and sending out each statement. and previous credit record. Retailers might begin charging for other services that previously had 3. Financial institutions might curtail ancillary services that some been provided free of charge. institutions provide free of charge. Severe losses on credit card charge-offs. Such a change would affect mainly ly by tighter credit standards than those with applicants for new credit card accounts. Howev- greater resources. er, holders of existing accounts could also be In addition, financial institutions might curtail affected by more stringent enforcement of credit credit card enhancements that some of them limits and by any increase in minimum payment offer. Such features include protection programs requirements. that indemnify credit card holders for charges Changes in the availability of credit would made with lost or stolen credit cards, discounts have the greatest potential effect on "marginal" on transportation and lodging, rebates on purcard applicants, who meet the current minimum chases billed to a credit card account, and provirequirements for holding a credit card account— sion of emergency cash to travelers. If the pressuch as income level, employment tenure, dura- sure on profits became severe, some institutions tion of residency, and previous credit record— might eliminate their card plans and redirect but who would not qualify for credit if such resources into more profitable lines of business. standards were stiffened considerably. Although Retail firms might discontinue in-house plans, credit decisions are based on many criteria, with the result that customers would need to rely lower-income persons who apply for credit instead on bank credit cards or other sources of cards—including recent entrants into the job financing. Although elimination of credit card market and those with low levels of education operations is an extreme measure, some retailers and skills—are likely to be affected more serious- and financial institutions in the early 1980s did Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 1987 curtail or discontinue credit card services in an The feasibility of this response for particular effort to stem losses. retail firms would depend mainly on the types of merchandise sold because competition from cash-only merchants might limit price increases Raising the Prices of Services to goods that usually are purchased on credit. In or Merchandise this case, only customers who pay in cash for such merchandise would subsidize the cost of An alternative or complementary way of offset- providing credit services. ting reduced interest income is to reprice credit Although increases in merchandise prices can card services. One such change would be to be implemented only by retailers, some issuers shorten or eliminate the grace period that credit of bank credit cards might be able to effect an card issuers typically have allowed, although indirect form of repricing by raising the fee they such action would not be possible in states that charge merchants for processing credit card require a minimum grace period. sales. The fee, called the merchant discount, is Regulations that reduce finance rates would an operating cost to the retailer. Any increase in help many credit card borrowers, who would these charges could be passed on in higher prices incur smaller finance charges, but that benefit of merchandise, including prices paid by customwould be offset by the additional finance charges ers who always pay in cash. However, competithat many convenience users would pay because tion with other card issuers, not only for processof curtailments in grace periods. In addition, ing credit card charges but also for other those borrowers who sometimes make full pay- merchant business such as demand deposits and ment and at such times avoid incurring finance loans, could limit the ability of banks to increase charges also would be adversely affected by a the merchant discount fee. cutback in grace periods. Other card-related fees could also be raised. As previously noted, a large proportion of Seventy percent or more of commercial banks in lower-income credit card users are convenience 1985 charged an annual fee for MasterCard and users. Among card users with less than $10,000 Visa accounts.5 These annual fees could be inin family income, 48 percent reported in 1983 creased to help generate higher revenue, and that they customarily paid off their outstanding additional institutions could implement such balances each month. An additional 24 percent of fees. Changes of this kind would affect all card lower-income families reported sometimes pay- holders. ing their balances in full. Thus, even among A similarly pervasive effect would occur if a lower-income families, the overall effect of lower fee for each transaction were charged by card rate ceilings combined with shorter grace periods issuers. As of 1985 only about 3 percent of the is not clear. MasterCard and Visa issuers charged such fees.6 Furthermore, because a substantial proportion With the exception of some gasoline company of higher-income consumers are convenience credit card plans with enhancements, no retail users, the net benefit of restricting credit card card issuers are known to be charging annual interest rates also is unclear for them. However, fees or fees for each transaction. However, apart the balance of benefits and costs for the elderly is from legal restrictions on fees that exist in a few likely to be negative if issuers shorten or elimi- states, the main barriers to such a practice apnate grace periods on credit cards in response to pear to be the force of competition and customtighter credit card rate ceilings. Among families ary practice in the retail industry. headed by persons 65 years or older, conve- Some credit card issuers charge a fee when an nience users of credit cards constituted three- account balance exceeds the established credit fourths of credit card users. limit or when problems arise such as late pay- A second major type of repricing, available ments or returned checks. Late charges were only to retail credit card issuers, is to increase levied in 1985 by 50 percent or more of commermerchandise prices in an attempt to offset all or cial banks that issue MasterCard and Visa acpart of a reduction in finance charge revenue. counts.7 By definition, convenience users typi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Rates 9 cally do not make late payments. Also, ings and the possible consequences of such acconvenience users are less likely to exceed es- tions for consumers. Several studies conducted tablished credit limits because, again by defini- during the past two decades have addressed tion, they ordinarily do not carry a balance these issues empirically, investigating creditor forward from one billing period to the next. responses to differing interest rate restrictions at Therefore, an increase in the prevalence of such the state level and evaluating the effects of such fees or in their average amount resulting from reactions on consumers. These research results more stringent rate ceilings would have a greater provide valuable historical evidence that sugeffect on borrowers. gests some likely consequences of a national In addition to the price increases previously credit card rate ceiling. described, banks might institute or raise fees for cash advances on credit cards. Banks and retailers might establish or increase fees for process- Effects on Credit Availability ing credit card applications, replacing lost cards, providing additional cards for an account, and One major conclusion of the empirical studies is issuing monthly statements. Retailers might start that restrictive rate ceilings for consumer credit charging separately for services that had been are closely associated with tighter lending stanprovided without charge, such as gift wrapping, dards. Most studies have concluded that higher delivery, and alterations. Pricing these services rate ceilings are associated with lower rates of seems likely to affect users of bank cards as well consumer loan rejection or with a larger percentas of retail cards and convenience users as well age of loan defaults.8 These findings suggest that as borrowers. lenders extend credit to a broader range of credit applicants when the rate of interest allowed on Unpredictability of Adjustments their consumer loan portfolios is higher. Therefore, creditors are likely to apply more accom- For several reasons, adjustments in credit card modative credit standards when the price of availability and pricing that would follow the credit is determined by market forces, and to use imposition of a restrictive nationwide rate ceiling stiffer loan criteria when regulations hold rates cannot be foreseen with precision. Card issuers below market-determined levels. As noted, not would be likely to adopt different policies de- all consumers are affected equally by lower interpending on how they expected their customers to est rate ceilings. Given the criteria that credit respond, and additional shifts would occur once card issuers usually employ for determining those reactions became clear. creditworthiness, lower-income families and Adjustments in pricing and credit availability families headed by younger persons would seem would be subject to important constraints, in- to be among those most likely to be denied credit cluding competition from other credit card issu- as a result of such ceilings.9 ers as well as regulations that limit pricing changes in some states. A few credit card issuers already have adapted to fairly stringent rate Effects on Availability of Bank ceilings at the state level, and might have little Credit Cards additional adjustment to make. Issuers that operate under less restrictive state ceilings would A 1979 study by researchers at the Credit Relikely face greater pressures to make changes in search Center (CRC) at Purdue University is credit availability and pricing. particularly useful for examining the effects on consumers of placing legal restrictions on credit EVIDENCE OF THE EFFECTS OF CREDIT card rates. The CRC study surveyed consumers CARD RATE RESTRICTIONS ON CONSUMERS and creditors in four states with different interest rate ceilings.10 One portion of the study focused The preceding discussion described the potential on consumer use of credit cards, including the responses of card issuers to restrictive rate ceil- effects of rate ceilings. Three states—Illinois, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 1987 Louisiana, and Wisconsin—had relatively high 5. Proportion of families with selected characteristics credit card rate ceilings; the fourth, Arkansas, that hold bank and retail credit cards in Arkansas had an unusually low rate limit. and three other states, 1979' The CRC study found that the proportion of Percent consumers holding bank credit cards was sub- Holds bank Holds retail stantially smaller in Arkansas than in the three FFaammiillyy credit card credit card states with less restrictive interest rate ceilings. cchhaarraacctteerriissttiicc Arkan- Other Arkan- Other sas states sas states Only 29 percent of the families in Arkansas held bank credit cards (table 5). By contrast, 39 Family income (dollars)2 percent of families in the other three states held Less than 6,000... 5 10 24 29 such cards. These results suggest that more 6,000-8,999 16 17 48 38 9,000-12,499 24 22 53 43 restrictive rate ceilings were associated with 12,500-17,499 .... 26 36 69 55 17,500-19,999 .... 41 48 70 64 more limited availability of bank credit card 20,000-24,999 .... 35 52 83 74 accounts. 25,000-29,999 .... 52 57 78 80 30,000 or more ... 61 68 88 83 Although this broad perspective on the effects Age of head of controls on credit card rates is helpful, it does Less than 25 , 10 19 38 35 25-34 30 42 60 63 not show whether specific consumer groups are 35-44 37 53 70 70 more likely than others to be affected by a 45-54 40 47 71 69 55-64 30 42 67 59 national ceiling on credit card rates. To examine 65-74 21 28 53 48 75 or more 17 15 40 34 this issue more closely, bank credit card holding Education of head was compared according to family income, age 0-8 grades 9 14 39 34 of family head, and education for residents of 9-11 grades 14 26 38 47 High school Arkansas and of the three other states (table 5). diploma 25 39 65 60 Some college 36 52 68 68 In most categories, a significantly smaller pro- College degree ... 55 72 80 82 portion of families held bank credit cards in All families 29 39 61 58 Arkansas than in states with less restrictive credit card rate ceilings. 1. The survey covered 3,572 persons. The four states in the study and the number of respondents in each were Arkansas, 787; Wiscon- Further analysis of the CRC survey data using sin, 1,006; Illinois, 1,030; and Louisiana, 749. All surveys were multivariate procedures suggests four main con- conducted in person between January 6 and June 12, 1979. 2. For calendar year 1978. The median income of U.S. families in clusions:" (1) In all four states, the probability 1978 was $15,000. that a family held a bank credit card rose as SOURCE. William C. Dunkelberg and others, "CRC 1979 Consumer Financial Survey," Monograph 22 (Purdue University, Krannert family income, age, and education of the family Graduate School of Management, Credit Research Center, 1981). head increased. (2) Lower- and lower-middle income families in Arkansas, the state with the about the likely effects of credit card rate ceilings most restrictive rate ceiling, were less likely to on bank credit card availability.12 As previously hold bank cards than were equally endowed discussed, increases in the minimum acceptable families in the other states. (3) Higher-income point score needed to qualify for credit cards are families in Arkansas were as likely to hold bank one way that card issuers might respond to the credit cards as were higher-income families in imposition of more restrictive rate ceilings for states with less restrictive rate ceilings. (4) Over- credit cards. In the New York study, the credit all, families residing in Arkansas were signifi- scoring system of a large bank credit card issuer cantly less likely to hold bank credit cards than and actual data for credit card account holders were families living in one of the three states with were used to determine the percentage of credit less restrictive rate ceilings. In sum, these find- card applicants that would be rejected if credit ings suggest that tight ceilings on credit card standards were tightened. interest rates are more likely to result in reduced Table 6 shows the result of successive fiveavailability of bank credit card accounts for point increases in the minimum qualifying credit lower- and lower-middle income families than for score. Raising the minimum score from 19 points higher-income families. to 24 points would have prevented about 2 per- Furthermore, a study of the credit card market cent of the bank card holders from obtaining the in New York State supported the CRC evidence credit cards they held. If the minimum qualifying Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Rates 11 6. Bank credit card holders rejected after simulated increases in the minimum acceptable credit score, by selected scores and income levels' Percent Income of rejected card holders (dollars)3 AAllll IInnccrreeaassee iinn tthhee mmiinniimmuumm aacccceeppttaabbllee ccrreeddiitt ssccoorree22 ccaarrdd All hhoollddeerrss income Below Below Below Below $7,500 $10,000 $15,000 $20,000 levels To 24 2 100 89 89 100 100 To 29 7 100 50 58 82 89 To 34 18 100 30 55 77 91 To 39 36 100 19 42 68 87 MEMO: Percent of total sample of card holders 100 9 17 42 68 1. Simulation uses the credit-scoring model of a large bank card 3. Income is for 1973. The median income of U.S. families in 1973 issuer and the characteristics of the actual holders of the issuer's was $10,500. credit card. SOURCE. Robert P. Shay and William C. Dunkelberg, "Retail Store 2. Minimum acceptable credit score initially set at 19 points. Credit Card Use in New York," Studies in Consumer Credit 4 (Columbia University, Graduate School of Business, 1975), p. 55. credit score were raised further to 29 points, then it sources would be available to consumers? the proportion of card holders that would have Analysis of the data collected in the CRC study failed to qualify for credit cards would have suggests that consumers in a constrained market increased from 2 percent to about 7 percent. substitute sales credit, such as retail store cards, As expected, the effect of credit rationing, as for cash credit, such as bank credit cards. simulated in this example, differs according to The CRC study provides information on holdincome level. Eighty-nine percent of those re- ings of retail store cards as well as bank credit jected when the cutoff is set at 24 points have cards in states with widely differing rate restricincomes below $7,500, although that income tions (table 5). Three-fifths of all families held group accounts for only 9 percent of the card retail store cards in Arkansas, slightly higher holders. No rejected applicant earned more than than the share that held such cards in the three $15,000 (that is, as table 6 shows, 100 percent states with less restrictive interest rate ceilings. had incomes below that level). At the 39-point In contrast, as already discussed, the fraction of cutoff, 13 percent of rejected applicants earned Arkansas families that held bank credit cards $20,000 or more. But even though the raising of was significantly smaller than the share of famthe minimum acceptable score adversely affects ilies with such cards living in the other states. some higher-income card holders, lower-income These findings are consistent with the expectcard holders still bear the brunt of the decrease in ed effects of rate ceilings. Retailers in Arkansas credit availability. When the minimum accept- seem to have been able to maintain credit available score is raised to 24 points, 16 percent of ability by compensating for lower finance charge those with incomes under $7,500 are rejected, revenue with increases in some merchandise but only 2 percent of those under $20,000 (not prices according to comparisons of prices in shown in the table). At a score of 39, the compa- Arkansas with those in surrounding states where rable proportions of rejections are 77 percent and rate ceilings were higher.13 Major appliances 46 percent. were found to cost about 3 to 8 percent more in Arkansas—nearly 5 percent more on average— than in neighboring states. Effects on Availability of Retail Store Further evidence that product prices might Credit Cards and on Product Prices rise if a federally mandated ceiling on credit card rates were adopted is contained in the CRC If, as indicated, a federally mandated credit card study. Bank credit card issuers in Arkansas were rate ceiling is likely to result in reduced access to found to charge retailers merchant discount fees bank credit card accounts, what alternative cred- higher than those charged in the states with less Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 1987 restrictive rate ceilings. As with other costs, tions and revenue increases, actions that seem retailers would be expected to offset these higher likely to erode some of the benefits to borrowers fees by increasing product prices. One conse- and impose costs on other consumers. quence is that, by paying higher retail prices, Several possible responses by issuers to reconsumers who do not use credit cards might strictive rate regulations can be foreseen, but it is subsidize the cost of providing credit card ser- difficult to predict which ones would be pursued. vices. Because lower-income families, who have In an effort to cut expenses, card issuers could limited access to credit, are heavily represented tighten credit standards for new credit card appliin the group that purchases products exclusively cants—an action that would especially affect by using cash, a national credit card rate ceiling lower-income families, who typically have limitmight impinge more on this group of consumers ed access to other sources of credit. Studies have than on others.14 documented the occurrence of credit rationing in Indeed, under nationwide rate ceilings there response to tight rate regulation for credit cards might be greater scope for use of merchant and more generally for other kinds of consumer discount fees by banks to offset decreases in credit. Card issuers could also increase nonrate revenues due to binding rate limitations. Histori- prices for credit card services in order to offset cally, competition for merchant business by reduced finance charges. Some of these acbanks that operated from states with high rate tions—such as initiating or increasing annual ceilings, or with none, probably placed some fees, charges for each transaction, and levying restraint on the ability of banks that operated fees for particular services to account holders— from states with low rate ceilings to raise mer- would impose costs on all credit card users. The chant discount fees. However, imposition of a effects of other repricing measures, such as curnationwide rate ceiling probably would diminish tailing the grace period, would be concentrated this type of competition. Banks operating from among convenience users, many of whom could states with relatively high rate limits might, un- no longer avoid paying finance charges. Still der a lower nationwide ceiling, raise merchant other changes in credit card pricing would fall discount fees to offset any reduction in revenues. mainly on borrowers. Such actions include In the absence of other significant differences, all charging penalty fees for late payments and for banks would then be under equal pressure to rely exceeding credit limits. on higher merchant discount fees as a revenue Finally, some adverse consequences of a nasource. If such fees increased, retailers would be tionwide ceiling on credit card rates could be felt likely to compensate by raising some prices. even by those consumers who do not use credit cards. Retailers might increase some merchandise prices—either to help offset reduced finance CONCLUSIONS charge revenue on retailer credit card plans or as a result of higher merchant discount fees. Re- Under current patterns of credit card use, about search evidence indicates that restrictive ceilings 32 percent of all families incur credit card finance on rates are associated with significantly higher charges and would benefit initially from a feder- retail prices for some types of merchandise. ally mandated reduction in credit card interest Higher retail prices could mean that customers rates. However, the record of credit card profit- who usually pay in cash—including lower-inability since 1972 suggests that tight rate ceilings come families who cannot obtain credit cards— such as those proposed in recent legislation would subsidize buyers who use credit card would create intense pressures for cost reduc- services. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economic Effects of Proposed Ceilings on Credit Card Rates 13 FOOTNOTES 1376-83. Also, consumer survey data indicate that in a state with a low interest rate ceiling (Arkansas), a higher proportion of consumers reported being rejected for consumer credit compared with consumers residing in states with less 1. "Functional Cost Analysis: 1985 Average Banks," restrictive rate ceilings. See Richard Peterson and Gregory Based on Data Furnished by Participating Banks in Twelve Falls, "Impact of a Ten Percent Usury Ceiling: Empirical Federal Reserve Districts (Federal Reserve Bank of New Evidence," Working Paper 40 (Purdue University, Krannert York, n.d.) and the same document for each of the years Graduate School of Management, Credit Research Center, 1972-84. 1981). 2. Retailers presumably would not continue to offer credit Robert P. Shay, "Factors Affecting Price, Volume and cards unless the profits from additional merchandise sales Credit Risk in the Consumer Finance Industry," Journal of facilitated by credit card plans offset the losses on credit card Finance, vol. 25 (May 1970), pp. 503-15; Management Analyoperations alone. National Retail Merchants Association, sis Center, "A Study of Bank Credit Card Profitability for "Economic Characteristics of Department Store Credit" Banks Operating in the States of California and Washington" (1969), p. 53; National Retail Merchants Association, "Eco- (Palo Alto, Calif., June 1, 1977), p. 73. nomic Characteristics of Retail Store Credit" (1986), p. 21; 9. William C. Dunkelberg, "An Analysis of the Impact of Robert P. Shay and William C. Dunkelberg, "Retail Store Rate Regulation in the Consumer Credit Industry," in Na- Credit Card Use in New York," Studies in Consumer Credit tional Commission on Consumer Finance: Technical Studies, 4 (Columbia University, Graduate School of Business, 1975), vol. 6, (Government Printing Office, 1973), pp. 17-20. pp. 72-80. 10. William C. Dunkelberg and others, "CRC 1979 Con- 3. The estimates were derived by assuming that lenders sumer Financial Survey," Monograph 22 (Purdue University, would have continued to provide, and that credit card users Krannert Graduate School of Management, Credit Research would have continued to use, exactly the same dollar Center, 1981). amounts of credit card services even though the lower rate 11. Glenn B. Canner and James T. Fergus, The Effects of ceilings were in effect. If forced to operate under more Proposed Credit Card Interest Rate Ceilings on Consumers restrictive rate ceilings, bank credit card issuers undoubtedly and Creditors, Staff Studies (Board of Governors of the would take steps to boost revenues and cut costs. But the Federal Reserve System), forthcoming. purpose of these estimates is to show how much the rate 12. Shay and Dunkelberg, "Retail Store Credit Card Use regulations would reduce profits, in the absence of any other in New York," pp. 55-56. changes, in order to gauge the pressures on issuers of bank 13. The products most likely to be affected are those that credit cards to make offsetting adjustments. usually are purchased with credit cards—large durable goods 4. In 1985 approximately 79 percent of commercial banks especially. See Gene C. Lynch, "Consumer Credit at Ten responding to a survey allowed a grace period averaging Percent Simple: The Arkansas Case" (University of Arkanapproximately 27 days. See American Bankers Association, sas, College of Business, 1969). 1986 Retail Bank Credit Report , table 120, p. 96. 14. Of the families with incomes below $5,000 in 1982, 84 5. American Bankers Association, 1986 Retail Bank Credit percent had no outstanding installment debt when inter- Report , table 107, p. 89. viewed in 1983. In contrast, only 53 percent of the families 6. Ibid., table 112, p. 92. with incomes above $50,000 had no installment debt. Robert 7. Ibid. B. Avery and others, "Survey of Consumer Finances, 1983: 8. Douglas F. Greer, "Rate Ceilings and Loan Turn- A Second Report," FEDERAL RESERVE BULLETIN, vol. 70 downs," Journal of Finance , vol. 30 (December 1975), pp. (December 1984), table 4, p. 860. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period August Japanese yen and the German mark. Moreover, through October 1986, provides information on there was growing disappointment that the Treasury and System foreign exchange opera- sharp, $20-per-barrel drop in oil prices that octions. It was prepared by Sam Y. Cross, Manag- curred between November 1985 and July 1986 er of Foreign Operations of the System Open was failing to provide much of a boost to busi- Market Account and Executive Vice President in ness activity in the oil-importing industrialized charge of the Foreign Group of the Federal countries. Doubts developed that our major trad- Reserve Bank of New York.' ing partners were likely to expand domestic demand vigorously enough to provide a global After declining without interruption for nearly a environment within which the United States year and a half, the dollar steadied during the could markedly improve its balance of payments period under review. Although the dollar contin- position. Market participants considered seriousued to ease against most of the industrialized ly the possibility that the U.S. authorities might countries' currencies through August, it moved welcome a continued decline in the dollar on the up subsequently to close the three-month period grounds that central banks abroad might then cut mixed on balance. From August to October, it interest rates in their countries more quickly. appreciated against some currencies—6'/4 per- Under these circumstances, market particicent against the Japanese yen, 53/4 percent pants expected the trend toward lower interest against sterling, and Vh percent against the rates to continue, with the United States setting Swiss franc. It declined, however, about 1 per- the pace and other industrial countries perhaps cent against the German mark and other curren- following later on. Although there were already a cies of the European Monetary System (EMS). few signs that the U.S. economy was regaining There were dollar purchases by foreign central some momentum from the slow first half of the banks but no intervention by the U.S. authorities year, market participants still were struck by the during the period. areas of weakness in U.S. economic perfor- As the period opened early in August, the mance. Output and investment remained slugdollar was declining. Market participants had gish, manufacturing employment continued to come increasingly to question whether the major decline, and retail sales were generally stagnant. industrialized countries would be able to work At the same time, prospects for price and wage together to redress their large external imbal- stability appeared to be good for the short term, ances. The huge trade deficit of the United States despite some concern about the longer-term inand the enormous trade surpluses of Japan and flationary implications of recent rapid monetary Germany had shown little adjustment, notwith- growth. standing the considerable movements in ex- In this environment, expectations resurfaced change rates between the dollar and both the from time to time throughout the first few weeks of August that the Federal Reserve might again cut its discount rate, perhaps operating unilaterally as it had done in July. As a result, in August interest rates on deposits denominated in U.S. 1. The charts for the report are available on request from dollars fell, and their decline was sharper than Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. the decline in interest rates in other currencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

15 The Federal Reserve did cut its discount rate '/> and retail sales were more buoyant. These develof 1 percentage point, to 5'/2 percent, elfective opments, together with confirmation of strong August 21. The exchange market reaction was growth for the German economy in the second muted, partly because many market participants quarter, seemed to suggest that an atmosphere expected the authorities in Germany and Japan supportive of renewed cooperation would surto provide some further stimulus to their econo- round the meetings of the Group of Five (G-5) mies—either with monetary or other measures— and Group of Seven (G-7) industrial countries in before the annual meetings of the International Washington at the end of the month. With Japa- Monetary Fund (IMF) and the World Bank at the nese production for export declining, German end of September. domestic demand replacing exports as the major Economic statistics released in mid-August source of growth, and U.S. output appearing to began to paint a contrasting picture between the grow at a more satisfactory pace, the process of German and Japanese economies. The German adjustment appeared to be under way at long economy, which had contracted sharply early in last. the year, seemed to be staging a robust recovery; In response to these developments, foreign and official German projections of an accelera- exchange dealers concluded that the need for the tion in growth began to be given widespread U.S. authorities to seek further exchange rate credence in the financial markets. Japan, on the adjustment had lessened, and the immediate other hand, appeared to be having much more pressure on dollar exchange rates subsided. At difficulty adjusting to the appreciation of its the same time, in the wake of repeated comments currency. Although both the mark and the yen by German officials, market participants became had risen about the same amount against the reconciled to the view that the Bundesbank was dollar since early 1985, on a trade-weighted basis unlikely to ease monetary policy soon. As a the yen's appreciation had been much greater result, expectations of a further reduction of than the appreciation of the mark. Whereas interest rates faded—not only in Germany, but German manufacturers lost little competitive- also in the United States and other countries. ness in their markets in other EMS countries, U.S. interest rates actually backed up somewhat. Japanese export industries were hit hard. They As dollar exchange rates and interest rates both lost competitiveness not only in the United started to move up, foreign exchange profession- States but also in important East Asian markets. als began to cover sizable short dollar positions. With business statistics released in August show- Bidding for dollars became intense, at times ing continued stagnation in the Japanese manu- exaggerated by rumors that unrealistically good facturing sector, market participants began to U.S. economic statistics were about to be requestion whether the yen should appreciate leased. By September 12, the dollar was swept much more. up to DM2.1030 to match its high early in the In these circumstances, traders began to sense three-month period. around mid-August that the dollar had more After mid-September, the dollar showed little room to decline against the German mark and the trend. Market participants remained skeptical other currencies of continental Europe than that, over the longer term, the dollar had deagainst the yen. When a large U.S. trade deficit clined sufficiently to correct the U.S. balance of for July was announced at the end of August, payments deficit. But over the shorter term, traders sold dollars aggressively against both market participants perceived the dollar to be marks and Swiss francs. The dollar continued to consolidating its position around mid-September decline against the European currencies through rate levels. They were sensitive to any evidence the end of August, even though it stabilized that U.S. and other monetary authorities would against the yen. be willing to support such a stabilization of By mid-September, there was further evidence exchange rates. In this environment, they took of improvement in the U.S. economic outlook. note of statements such as the one by Chairman Gains in employment during August were more Volcker on September 24 that current exchange balanced, industrial activity was a little firmer, rate relationships place our industry in a far Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 1987 better competitive position than for some years. day. Market participants interpreted statements Accordingly, the dollar fluctuated without clear about that meeting as indicating that the EC direction. But it was sometimes subject to abrupt countries had agreed to use exchange market movements, especially against the mark in a intervention, if necessary, to protect the EMS range of DM2.00 to DM2.08. These abrupt shifts from strains that they felt were associated with came in response to statements, actions, or ru- the decline in the dollar. mors of actions thought to reflect official atti- The next point of uncertainty occurred at the tudes toward exchange rates. end of September. The weekend G-5 and G-7 The view that the dollar was entering a period meetings in Washington ended without a specific of greater stability was called into question sev- agreement, which some observers had been eral times between mid-September and mid-Oc- looking for, that Germany and Japan would cut tober. The first such occasion came in response interest rates in return for a U.S. commitment to to statements that brought official attitudes about stabilize the dollar. Market participants, sensing exchange rates into question. Bundesbank Presi- that no arrangement was in place to prevent a dent Poehl was reported to have said that the resumption of the dollar's decline, moved to Bundesbank would not cut its interest rates but reestablish short dollar positions. As a result, the that Germany would accept a stronger mark as dollar declined sharply against the continental its contribution to international economic adjust- European currencies throughout the first half of ment. Subsequently, Treasury Secretary Baker October, hitting its low against the German mark said that, although it was preferable not to rely of DM1.9690 on October 17. on exchange rate adjustments alone to reduce Meanwhile, the dollar had continued to trade trade imbalances, there would need to be further in a relatively narrow range against the Japanese exchange rate changes in the absence of addi- yen. In early September, news of a meeting tional measures to promote higher growth between Secretary of the Treasury Baker and abroad. In response, the dollar moved down Japan's Finance Minister Miyazawa generated decisively, declining on September 19 to some anticipation that an agreement on exchange DM1.9845 and ¥151.77, its low for the period rates might be forthcoming. Later in September, against the yen. But it soon recovered most of foreign investors, discouraged by the worsening this decline after a European Community (EC) business climate in Japan, began to sell holdings meeting of finance ministers and central bank of shares on the Tokyo stock market. This outgovernors at Gleneagles, Scotland, the following flow, combined with a growing pessimism about the likelihood of a reduction in the Bank of 1. Federal Reserve reciprocal currency arrangements Japan's discount rate, contributed to a sharp Millions of dollars drop in the Tokyo stock market in the middle of October. Japanese institutional investors, at- Amount of Institution facility tempting to offset the resulting losses on their October 31. 1986 yen equity portfolios before the end-October Austrian National Bank 250 reporting date, realized profits on their dollar- National Bank of Belgium 1,000 Bank of Canada 2,000 denominated assets by unwinding hedges that National Bank of Denmark 250 had been put in place when the dollar was much Bank of England 3,000 Bank of France 2,000 higher. These various factors generated a de- German Federal Bank 6.000 Bank of Italy 3,000 mand for dollars throughout most of October and Bank of Japan 5,000 reinforced sentiment that the dollar had reached Bank of Mexico 700 a near-term bottom against the Japanese curren- Netherlands Bank 500 Bank of Norway 250 cy. Bank of Sweden 300 Swiss National Bank 4,000 Late in October evidence was accumulating Bank for International Settlements: that the U.S. economy had strengthened signifi- Dollars against Swiss francs 600 Dollars against other authorized European cantly during the third quarter and that the U.S. currencies 1,250 trade position had at least begun to stabilize. A Total 30,100 preliminary estimate showing that real GNP in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 17 2. Drawings and repayments by foreign central ingness to cooperate on exchange market issues. banks under regular reciprocal currency Notwithstanding statements by Treasury offiarrangements' cials that U.S. intervention policy had not Millions of dollars, drawings or repayments (-) changed, some market participants interpreted Central bank Out- Out- the accord to be a pact for concerted intervention drawing on standing Septem- standing to support the dollar. the Federal as of August October as of Reserve August ber October Thus the dollar continued to rise through the System 1, 1986 31, 1986 end of October. This rise in dollar exchange rates Bank of was led by an increase against the yen but was Mexico... 0 210.2 -66.8 0 143.4 accompanied by increases against other major 1. Data are on a value-date basis. currencies. The increase in the dollar at the end of the period left it higher on balance against some currencies and limited its decline against creased 2.4 percent in the third quarter was the German mark. On the trade-weighted basis followed by a report that U.S. durable goods of the dollar exchange rate index of the Federal orders had increased 4.9 percent in September. Reserve Board, the dollar closed the period Moreover, preliminary trade statistics for Sep- l3/8 percent higher than at the end of July. tember indicated a second month of decline in The pound sterling was the only currency the U.S. trade deficit. against which the dollar rose consistently during At the same time, market participants became the period under review. Some of sterling's deincreasingly impressed with European officials' cline was seen in foreign exchange markets as apparent intention to buy dollars to resist depre- reflecting the impact of weak oil prices on British ciation of the U.S. currency and associated export revenues and government income. But strains on the EMS. There were several reports market participants were also concerned about of intervention by the Bundesbank and other the direction of the government's overall mone- European central banks to buy dollars during tary and fiscal policies, as well as about preelec- October. In addition, reported statements from tion political uncertainties. With the authorities German officials that any further decline of the deciding formally to abandon monetary targets dollar threatened economic growth in Europe as a policy tool, expectations strengthened that contributed to the perception that there might the government might adopt an exchange rate also be a limit to the dollar's depreciation against guide for policy instead. As a result, discussion the continental currencies. Accordingly, when of sterling's joining the intervention arrangethe demand for dollars against the yen strength- ments of the EMS became even more wideened late in October, and the dollar began to firm spread than before, both in the press and in against that currency, it also firmed somewhat financial markets. But no new policy initiatives against the European currencies. along these lines emerged during the period As the period drew to a close, the dollar under review. By the end of October, sterling received a final boost of support from the an- had depreciated almost 6 percent against the nouncement of a Vi percentage point cut in the dollar and even more against the continental Bank of Japan's discount rate and an economic European currencies. policy accord between U.S. Treasury Secretary During the period, the exchange rate mecha- Baker and Japanese Finance Minister Miyazawa. nism of the EMS was at times subject to strain. The accord outlined fiscal policy initiatives, in- The Irish pound was caught between the decline cluding tax reform plans in Japan, and under- of sterling on the one hand and the rise of scored the U.S. commitment to reducing the continental currencies on the other. With Irish budget deficit. The two countries judged the exporters experiencing a loss of competitiveness exchange rate realignment achieved between in the United Kingdom, Ireland's primary export their currencies since September 1985 to be market, on August 2 the Irish authorities devalbroadly consistent with present underlying eco- ued the Irish pound 8 percent against the bilateral nomic fundamentals, and they reaffirmed a will- central rates of the other EMS currencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 1987 3. Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury1 Millions of dollars, drawings or repayments (-) Outstanding Outstanding Amount of as of as of Central bank drawing on the U.S. Treasury August September October Facility August 1, October 31, 1986 i 1986 i Central Bank of Bolivia 100.0 * * 0 0 0 Central Bank of Ecuador 75.0 75.0 -75.0 * * * Bank of Mexico 273.0 * 211.0 -67.0 0 144.0 Central Bank of Nigeria 37.0 * * * 22.2 22.2 1. Data are on a value-date basis. *No facility Later on, as the German mark appreciated October 31, a drawing of $22.2 million was made against the dollar, it also moved up against other on the U.S. portion. currencies. By late August the mark reached the On August 27 the U.S. monetary authorities top of the narrow band, a position it held agreed jointly to a multilateral arrangement in the throughout the remainder of the period. At times amount of $1.1 billion with the Bank for Internaduring September and to a lesser extent during tional Settlements (acting for certain central October, the narrow band was fully stretched to banks) and the central banks of Argentina, Brathe 2'/4 percent intervention limit as the mark zil, Colombia, and Uruguay to provide a nearbenefited more than the others from the dollar's term contingency support facility for Mexico's decline. In response to these pressures, EC international reserves. Drawings on the facility finance ministers and central bank governors at were made available in light of agreement betheir Gleneagles meeting, agreed to try to stem tween Mexico and the IMF concerning a prothe rise of the member currencies against the posed standby arrangement, the expected receipt dollar, largely in an effort to preserve stability by Mexico of disbursements under loans from within the EMS. By late October, tensions with- the International Bank for Reconstruction and in the EMS joint float had subsided substantially. Development (IRBD), and the agreement by At the beginning of the three-month period, Mexico to apply drawings from the IMF and the only drawing outstanding on the credit ar- disbursements from the IBRD to the balances on rangements of the U.S. monetary authorities was outstanding drawings on the facility. On August $75 million drawn on May 16, 1986, by the 29, $850 million was made available to Mexico. Central Bank of Ecuador against a $150 million On this date Mexico drew $211 million from the U.S. Treasury Exchange Stabilization Fund Treasury through the ESF and $210.2 million (ESF) short-term swap facility. On August 14, from the Federal Reserve through its regular the swap arrangement was terminated pursuant swap facility with the Bank of Mexico. On Septo the agreement. tember 30, Mexico repaid $67 million to the ESF In the period from July through October, the and $66.8 million to the Federal Reserve. U.S. monetary authorities provided short-term 4. Net profits or losses (-) on U.S. Treasury and bridging facilities to Bolivia, Nigeria, and Mexi- Federal Reserve current foreign exchange co. operations The U.S. Treasury through the ESF on Sep- Millions of dollars tember 17 extended a $100 million financing U.S. Treasury facility to the Central Bank of Bolivia. There Period1 Federal Exchange were no drawings made against this facility dur- Reserve Stabilization Fund ing the period under review. August 1, 1986- The U.S. Treasury through the ESF agreed on October 31, 1986 0 0 October 24 to provide a short-term facility of $37 Valuation profits and losses on outstanding million to the Central Bank of Nigeria as part of a assets and liabilities as of October 31, 1986 1,341.3 1,290.1 multilateral facility of $250 million organized under the leadership of the Bank of England. On 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 19 During this period the Federal Reserve and the eign currency balances acquired in the market as ESF realized no profits or losses from exchange a result of their foreign operations in a variety of transactions. As of October 31, cumulative book- instruments that yield market-related rates of keeping or valuation gains on outstanding foreign return and that have a high degree of quality and currency balances were $1,341.3 million for the liquidity. Under the authority provided by the Federal Reserve and $1,290.1 million for the Monetary Control Act of 1980, the Federal Re- Treasury's ESF. These valuation gains represent serve invested $2,868 million equivalent of its the increase in the dollar value of outstanding foreign currency holdings in securities issued by currency assets valued at end-of-period ex- foreign governments as of October 31. In addichange rates, compared with the rates prevailing tion, the Treasury held the equivalent of $3,980.1 at the time the foreign currencies were acquired. million in such securities as of the end of Octo- The Federal Reserve and the ESF invest for- ber. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Staff Studies The staffs of the Board of Governors of the indicate concurrence by the Board of Governors, Federal Reserve System and of the Federal by the Federal Reserve Banks, or by the mem- Reserve Banks undertake studies that cover a bers of their staffs. wide range of economic and financial subjects. Single copies of the full text of each of the From time to time the results of studies that are studies or papers summarized in the BULLETIN of general interest to the professions and to are available without charge. The list of Federal others are summarized in the FEDERAL RESERVE Reserve Board publications at the back of each BULLETIN. BULLETIN includes a separate section entitled The analyses and conclusions set forth are "Staff Studies" that lists the studies that are those of the authors and do not necessarily currently available. STUDY SUMMARY RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING FROM 1983 THROUGH 1985 Patrick I. Mahoney, Alice P. White, Paul F. O'Brien, and Mary M. McLaughlin—Staff, Board of Governors Prepared as a staff study in the spring of 1986 The removal of interest rate restrictions on retail on all accounts than did commercial banks; the time deposits in October 1983 gave commercial differences were greater on longer-term acbanks and thrift institutions nearly complete counts. The differences in the average offering freedom to set offering rates on retail accounts. rates between the two types of institutions on This study examines the pricing of retail time time accounts usually exceeded the 25-basis deposits and money market deposit accounts by point differential that had been part of the Regucommercial banks and FSLIC-insured thrift in- lation Q interest rate structure just before deregstitutions from October 1983 through December ulation. Over most of the period studied, the 1985 in the aggregate and for individual institu- average offering rates on most retail deposits at tions. The appendix provides a history of the both types of institutions were below interest regulation of deposit offering rates and a chronol- rates on market instruments of comparable matuogy of interest rate ceilings from 1933, when rity. Offering rates responded with varying lags ceilings on deposit offering rates were estab- to changes in market interest rates, and the lished, through April 1, 1986, when all remaining difference between offering rates and market ceilings were removed. interest rates varied considerably. In general, depository institutions responded Data on deposit flows showed that a steeper to deregulation in a measured way, following deposit yield curve enhanced flows into longervarious pricing strategies. The most striking reg- term time deposits, demonstrating a role for ularity in the data was that thrift institutions, in pricing in the determination of the maturity disthe aggregate, consistently offered higher rates tribution of deposit inflows. Deregulation did Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

21 affect the liability structure of both sets of institu- sis of data for individual institutions revealed a tions, though not dramatically: commercial diversity of pricing strategies. Only in a few banks increased the importance of retail deposits cases did an institution pay the highest rate on a at the expense of managed liabilities and transac- deposit category for long, and no institution paid tion accounts, whereas thrift institutions in- the highest rate on all deposit categories at any creased their reliance on managed liabilities. one time. In addition, individual institutions fre- Offering rates of commercial banks and thrift quently adjusted their offering rates relative to institutions differed state by state. Although the their competitors, a practice that suggests efforts average offering rates of thrift institutions gener- to explore depositor response to changes in ally exceeded those at commercial banks, analy- offering rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Industrial Production Released for publication November 14 average, total industrial output in October was about VA percent higher than it was a year Industrial production was unchanged overall in earlier. October. Sharp reductions occurred in assem- In market groups, output of consumer goods blies of motor vehicles, but there were increases declined 0.4 percent in October, largely reflectin the output of home goods, defense equipment, ing a cutback in automotive products. Autos and construction and business supplies—all of were assembled at an annual rate of 7.3 million which have posted better-than-average gains units, down from a rate of 7.7 million in Septemover the past year. At 125.2 percent of the 1977 ber; production of lightweight consumer trucks Ratio scale, 1977 = 100 140 MANUFACTURING — Nondurable 1 —\ - ^-y" — Durable j INTERMEDIATE PRODUCTS Business supplies _ — .—y ^ 1 1 -J 1 y l - Construction supplies — — 240 FINAL PRODUCTS 200 Defense and space Business equipmen / 1980 1982 1984 1980 1982 1984 1986 All series are seasonally adjusted. Latest figures: October. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

23 1977 = 100 Percentage change from preceding month Percentage change, Group 1986 1986 Oct. 1985 to Oct. Sept. Oct. June July Aug. Sept. Oct 1986 Major market groups Total industrial production 125.2 125.2 .0 .5 .1 .1 .0 1.3 Products, total 133.8 133.8 .0 .6 .4 .1 .0 2.1 Final products 132.9 132.7 -.4 .7 .4 .2 -.1 1.3 Consumer goods 125.1 124.6 .1 .6 -.1 .0 -.4 3.4 Durable 117.0 115.1 .5 1.7 -.7 1.3 -1.7 2.5 Nondurable 128.1 128.1 .0 .3 .1 -.4 .0 3.7 Business equipment.. 139.7 139.6 -.9 1.0 .9 .4 .0 1.0 Defense and space... 182.4 183.6 .2 .7 .8 .8 .7 5.0 Intermediate products.. 137.2 137.7 1.4 .2 .4 -.5 .4 5.0 Construction supplies 124.8 125.2 .5 -.1 .9 -.2 .3 4.1 Materials 113.5 113.5 .1 .4 -.3 .2 .0 .1 Major industry groups Manufacturing. 129.5 129.5 .0 .7 .3 .0 .0 2.5 Durable 127.6 127.4 -.6 1.0 .1 .1 -.2 .6 Nondurable . 132.2 132.4 1.0 .4 .5 -.1 .2 5.3 Mining 95.8 95.6 -.9 -1.8 -.3 -1.0 -.3 -10.6 Utilities 111.1 112.1 .1 1.0 -1.3 2.6 .9 .2 NOTE. Indexes are seasonally adjusted. also was down sharply in October. Throughout months, and production of supplies for construc- 1986 assembly rates have fluctuated considera- tion and business also was up in October. bly, as auto makers have used output adjust- Continuing the pattern of most of 1986, output of ments as well as periodic financial incentive total materials was unchanged in October. Within programs to control inventories. materials, significant growth has occurred in tex- Associated in part with the high levels of tiles, paper, and chemicals this year, while output housing activity, output of home goods rose of many durable and energy materials such as further. However, the output of nondurable con- metals and crude oil has been depressed. sumer goods, which rose rapidly earlier in the In industry groups, manufacturing output was year, was unchanged during the month and re- unchanged in October at a level 2.5 percent mained at levels attained last spring. Production higher than it was a year earlier. Durable manuof total business equipment was flat in October facturing edged down during the month, but following gains—concentrated in commercial nondurables increased somewhat. Mining output and transit equipment—in the preceding three edged down 0.3 percent further and was more months. Output of defense and space equipment than 10 percent lower than it was a year earlier, continued to expand at the steady pace of recent but production by utilities increased. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Announcements PROPOSED INVESTMENT sistent with these established policies and crite- BY SUMITOMO BANK DEEMED CONSISTENT ria. The points of inconsistency included the WITH BANK HOLDING COMPANY ACT following: • The total investment, including limited part- The Federal Reserve Board announced on No- nership equity and subordinated debt, would vember 19, 1986, that it had informed The Sumi- exceed 25 percent of Goldman's total equity. tomo Bank, Ltd., Osaka, Japan, that, with cer- • Sumitomo would have representation on the tain revisions, its proposed investment in boards of directors of the subsidiaries of Gold- Goldman, Sachs & Co., New York, New York, man in Tokyo and London, and the name of the would be consistent with the Bank Holding Com- London subsidiary would reflect an affiliation pany Act. The Board reached this conclusion with Sumitomo. only after Sumitomo agreed to a number of • Sumitomo would have a 50 percent voting changes to meet the Board's concerns about the interest in a London joint venture subsidiary and investment as it was originally structured. 12.5 percent in a Tokyo subsidiary. The investment, as originally proposed, took • The investment was expected to result in an the form of a nonvoting $500 million limited increased business relationship between the partnership interest and subordinated debt, as an companies, at least in part through mutual referaddition to an already existing subordinated debt rals. investment of $100 million in that company. • Sumitomo employees could be transferred to The Board had to determine, under the Bank Goldman as trainees and could be used to solicit Holding Company Act, whether Sumitomo's role business from Japanese companies. would be passive and noncontrolling and would Under this proposal business arrangements not result in a situation in which Sumitomo had between the parties would have been complex the power to exercise a controlling influence and extensive. The Board was concerned that over the management or policies of Goldman, as this combination of a significant equity investwell as whether it would adversely affect the safe ment and the maintenance of extensive business and sound operation of banking organizations. In relationships would give the investor both the making these judgements, the Board has adopted economic incentive and means to exercise or policies and criteria for assessing particular pro- attempt to exercise a controlling influence over posed investments. the management or policies of the target compa- As relevant to the Sumitomo proposal, these ny. An investment operated in this framework criteria include consideration of whether the cannot, as a practical matter, be expected to investment represents more than 25 percent of remain wholly passive, but contains within it the the total shareholders' equity; whether it con- inherent potential—the power—for the exercise tains restrictions limiting the target's freedom of of an important influence, including from time to action; whether it places the investor in the role time a controlling influence, depending in part on of entrepreneur in the organization, promotion, the relative business success of the parties to the or operation of the target firm; whether it results investment. in significant intercompany ties; whether it pro- Aside from the control concerns expressed vides for interlocking directors or management above, the Board believes that the proposed officials; or whether it allows for the extension of investment, even after compliance with the noncredit on favorable terms. controlling investment guidelines, has preceden- The Board found the original proposal incon- tial implications for the Board's policies regard- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

25 ing the capital adequacy of bank holding • Sumitomo has reaffirmed its commitment that companies and their obligation to serve as a it will waive any right to select general partners continuing source of strength to subsidiary under New York law and that the voting arrangebanks. The Board would expect that a U.S. bank ments under the limited partnership agreement holding company seeking to make an investment will provide that Sumitomo will not have the in such circumstances would be particularly right to vote for or participate in the selection of strongly capitalized. Such an investment could Goldman's general partners or other managenot be given full weight in the evaluation of a ment officials or vote for or direct other policies bank holding company's capital adequacy or its of Goldman. continuing ability to serve as a source of financial The Board shall retain the authority to review strength to its subsidiary banks. To remedy the regularly the investment to determine whether, Board's concerns, Sumitomo has proposed the under all the facts and circumstances, the investfollowing changes in its proposed investment in ment is consistent with the requirements of no Goldman, Sachs: controlling influence and safe and sound banking • Sumitomo's total investment in Goldman, practices. To address the possibility of a control- Sachs, which will include both Sumitomo's part- ling influence developing in the future, the connership interests and all Sumitomo's subordinat- tract between Sumitomo and Goldman, Sachs ed debt, will not exceed 24.9 percent of Gold- will provide that the investment shall be termiman, Sachs total partners' capital. nated and promptly repaid in the event that the • Sumitomo will not acquire any stock in, or Board finds that Sumitomo has the power to have any directors on the board of, any Gold- exercise a controlling influence over Goldman man, Sachs affiliate, nor shall Sumitomo's name unless the situation that resulted in such a finding be used by an affiliate of Goldman, Sachs or vice is eliminated. versa. These changes have been reviewed by the • No present or former Sumitomo employees Board, and the Board finds that the proposal, as will be trainees of Goldman, Sachs, although modified, is consistent with the requirements of Sumitomo reserves the right to seek relief from the Bank Holding Company Act. this condition under terms acceptable to the The Board noted that considerable interest has Board. focused on the proposal, in part because of • Sumitomo and Goldman, Sachs will not in- perceived implications for administration of the crease the amount of business they currently do Glass-Steagall Act. However, the only issue with each other as a result of the investment. raised by the proposal concerns administration Sumitomo will not solicit any business for Gold- of the Bank Holding Company Act and, in particman, Sachs or vice versa. Nor will Sumitomo ular, determination of whether the proposed introduce Goldman, Sachs to customers, or vice transaction implies a controlling interest in a firm versa, unless a customer specifically requests to engaged in activities not permitted under that be introduced, and any such business introduced act, and its consequences for the capital strength at the request of customers will not exceed, in of the bank holding company parent. A truly any year, 2Vi percent of the consolidated gross passive noncontrolling investment logically revenues of the recipient of the introduction. should not raise any Glass-Steagall issues. • Existing normal business relationships will be Similarly, some question has been raised over maintained on an arm's-length, nonexclusive ba- whether U.S. banks would receive reciprocal sis, and there will be no advertising or marketing treatment in Japan. While the Board has a conof each other's services. tinuing interest in encouraging open markets and • Subject to necessary internal approvals and fair treatment, this issue is also not relevant by as promptly as practical after the date of the law to the Board's consideration of this case. closing of its investment in Goldman, Sachs, Under the policy of national treatment estab- Sumitomo will enhance its capital position by an lished by the Congress in the International Bankamount that will substantially offset the funds ing Act and the Bank Holding Company Act, the being invested in Goldman, Sachs. Board's evaluation of the investment is limited to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Federal Reserve Bulletin • January 1987 the control question and to safety and soundness million of total deposits and other reservable concerns. liabilities. The cutoff level is indexed to 80 percent of the annual percentage increase in total deposits and other reservable liabilities for all CHANGES IN AMOUNTS SUBJECT depository institutions. The annual adjustment of TO RESERVE REQUIREMENTS the cutoff level is computed as of June 30 of each year. Institutions with total deposits and other The Federal Reserve Board announced an in- reservable liabilities below the reserve requirecrease in the amount of net transaction accounts ment exemption amount of $2.9 million are exto which the 3 percent reserve requirement will cused from reporting even on a quarterly basis if apply in 1987 from $31.7 million to $36.7 million. their deposits can be estimated from other The Board also increased the amount of a deposi- sources. tory institution's reservable liabilities that are subject to a reserve requirement of 0 percent from $2.6 million to $2.9 million of total reserva- REVISION TO ble liabilities and increased the reporting cutoff CAPITAL ADEQUACY GUIDELINES level distinguishing weekly reporters from quarterly reporters from $26.8 million to $28.6 million The Federal Reserve Board issued on November of total deposits and other reservable liabilities. 4, 1986, revisions to its capital adequacy guide- These adjustments take effect beginning Decem- lines for bank holding companies that treat perber 30, 1986. petual debt as primary capital and placed limits The Board made the changes in accordance on the amount of perpetual debt, perpetual prewith provisions of the Monetary Control Act. ferred stock, and mandatory convertible securi- The act requires the Board to amend its Regula- ties that may qualify as primary capital. The tion D (Reserve Requirements of Depository guidelines are effective immediately. Institutions) annually to increase the amount of Capital adequacy is one of the critical factors transaction accounts subject to a 3 percent re- the Board is required to analyze in taking action serve requirement. The annual adjustment must on various types of applications, such as mergers be 80 percent of the annual percentage change in and acquisitions by bank holding companies, and transaction accounts held by all depository insti- in the conduct of the Board's various supervisotutions. The growth in total net transaction ac- ry activities related to the safety and soundness counts of all depository institutions from June of the banking system. 30, 1985, to June 30, 1986, was 19.6 percent. The Before perpetual debt can be treated as pristatutory rule thus requires an increase of $5.0 mary capital, it must meet the following criteria: million over last year's amount to $36.7 million. • The debt issue must be unsecured. If it is The Board is also required by the Garn-St issued by a bank, it must be subordinated to Germain Depository Institutions Act of 1982 to claims of depositors. amend Regulation D to adjust the amount of a • Repayment of the principal of the debt instrudepository institution's total reservable liabilities ment will be limited to those situations involving that are exempt from reserve requirements for the issuer's insolvency, bankruptcy, or reorganithe upcoming year by 80 percent of any annual zation. percentage increase in total reservable liabilities • Any voluntary redemption of the perpetual for all depository institutions. Growth in total debt securities must be approved by the Board. reservable liabilities was 13.6 percent from June • The debt instrument contract must give the 30, 1985, to June 30, 1986, requiring an increase issuer the authority to choose to defer interest in the reserve requirement exemption to $2.9 payments if all dividends on common and premillion. ferred stock have been eliminated. The Board is also increasing the reporting • Perpetual debt issued must convert to equity cutoff level distinguishing weekly reporters from when the issuer's retained earnings and surplus quarterly reporters from $26.8 million to $28.6 become negative (or in the case of a guarantee, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 27 when the guarantor's earnings and surplus be- except for the automated clearinghouse fee come negative). schedule, which is effective April 1, 1987. The amount of perpetual debt, perpetual preferred stock, and mandatory convertible securities that will qualify as primary capital has been TIERED PRICING STRUCTURE APPROVED limited to 33 xh percent of all primary capital FOR CHECK COLLECTION SERVICES (stated on a gross rather than a net basis)—an increase from the proposed 25 percent limit. In The Federal Reserve Board announced approval addition, the Board has imposed a limit of 20 on November 25, 1986, of a proposal to permit percent of all primary capital on mandatory the head offices of the Federal Reserve Banks of convertible securities and perpetual debt. Minneapolis and Kansas City to use a tiered All securities exceeding the limits and issued, pricing structure for check collection services on or in the process of being issued, before Novem- a permanent basis. ber 20, 1985, will be grandfathered and given Since November 1984, both Reserve Bank primary capital treatment. head offices have been conducting a pilot program to test the feasibility of tiered pricing. The current pilot program will be made a permanent FEE SCHEDULES FOR SERVICES PROVIDED structure of their check collection services, BY FEDERAL RESERVE BANKS effective immediately. A tiered pricing structure allows different fees The Federal Reserve Board has announced the to be charged to sending institutions for check 1987 fee schedules for services provided by the presentment based on whether the payor institu- Reserve Banks. For the most part, the new fees tion wants the checks sent to a high- or a loware the same as those for 1986. cost presentment point. The fee schedules apply to check collection, There is a significant difference between the automated clearinghouse, wire transfer of funds unit cost of clearing checks drawn on high- or and net settlement, definitive securities safe- low-cost presentment points in some collection keeping and noncash collection, and book-entry zones. Tiered pricing more accurately reflects securities services for non-Treasury securities. Federal Reserve costs of processing. It also Fee schedules for the check collection service allows financial institutions to make better deciwill be distributed by the Reserve Banks; fee sions in choosing the most cost-effective method schedules for the remaining services are avail- of clearing checks. able on request from Publications Services, Besides adopting the proposal, the Board also Board of Governors of the Federal Reserve established criteria under which tiered pricing System, Washington, D.C. 20551. could be used for check collection services at In 1987, total costs for priced services includ- other Reserve Bank offices. ing the private sector adjustment factor are projected to be $622.3 million. Total revenue is estimated at $634 million, resulting in a recovery NEW MEMBERS APPOINTED rate of 101.9 percent. TO PRICING POLICY COMMITTEE At the same time, the Board approved the 1987 private sector adjustment factor (PSAF) for Re- The Federal Reserve Board announced the apserve Bank priced services of $70.9 million, an pointment of new members to its Pricing Policy increase of 4.1 percent over the 1985 level. The Committee (PPC), effective January 1, 1987. The PSAF is an allowance for the taxes that would new members are Silas Keehn, President of the have been paid and the return on capital that Federal Reserve Bank of Chicago, and William would have been provided had the Federal Re- H. Wallace, First Vice President of the Federal serve's priced services been furnished by a pri- Reserve Bank of Dallas. vate business firm. The Board also appointed Jack Guynn, First These actions are effective January 1, 1987, Vice President of the Federal Reserve Bank of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 1987 Atlanta, as Executive Director of the PPC of insufficient or uncollected funds. Comments through year-end 1988. He will replace Henry R. should be received by December 18. Czerwinski, who will remain a member of the The Federal Reserve Board also issued for committee. public comment a proposal to charge fees for the The other members of the PPC include Gover- processing of applications and for the supervinor Wayne D. Angell; Edward G. Boehne, Presi- sion and general oversight of Edge corporations. dent of the Philadelphia Reserve Bank; and Comments should be received by January 5. Theodore E. Allison, Staff Director for the A proposal to amend Regulation Z (Truth in Board's Office of Federal Reserve Bank Activi- Lending) to require that more information be ties. disclosed to consumers regarding adjustable rate . The committee reviews and determines—sub- mortgages (ARMs) before loan application and at ject to approval by the Board—all fee schedules adjustment dates has also been issued for public for priced services offered by Federal Reserve comment. Comments are requested by January Banks to depository institutions. 20, 1987. The Board issued for public comment on No- STANDARD FORMAT APPROVED vember 28, 1986, proposed revisions to the offi- FOR FEDWIRE INFORMATION cial staff commentaries for three of its consumer credit protection regulations—Regulation B The Federal Reserve Board announced its ap- (Equal Credit Opportunity), Regulation E (Elecproval on November 24, 1986, of a proposal to tronic Fund Transfers), and Regulation Z (Truth require a standard format for third-party pay- in Lending). Comments must be received by ment information over Fedwire, effective April January 30, 1987. 3, 1989. The Board also issued for comment on No- A 25-cent surcharge will be imposed on Fed- vember 28, 1986, a list of factors to be considered wire fund transfers that do not meet the standard when Reserve Banks propose to consolidate a format beginning April 1, 1988. Beginning April priced service across District lines. Comments 3, 1989, messages that do not conform to the new are requested by January 28, 1987. The Board format will not be accepted for transmittal. approved consolidation of the municipal bond and coupon collection activities of the Federal QUARTERLY FINANCIAL RESULTS Reserve Bank of San Francisco at the Minneapo- AVAILABLE FOR PRICED SERVICE lis Reserve Bank. OPERATIONS NEW PUBLICATION: The Federal Reserve Board has reported finan- INDUSTRIAL PRODUCTION—1986 EDITION cial results of Federal Reserve priced service operations for the quarter ending September 30, Industrial Production—1986 Edition is now avail- 1986. able. It contains a summary of the major revision The Board issues a report on priced services of the industrial production index published in annually and a priced service balance sheet and 1985; a description of the methods used to conincome statement quarterly. The financial state- struct the index and of its historical development ments are designed to reflect standard account- from 1919; a listing of the sources and coverage ing practices, taking into account the nature of of the index series; and statistical tables providthe Federal Reserve's activities and its unique ing historical data through 1985 for the total position in this field. index, its major subaggregates, and its main components. PROPOSED ACTIONS To obtain copies of Industrial Production— 1986 Edition, write to Publications Services, The Federal Reserve Board has issued for public Board of Governors of the Federal Reserve comment a proposal to provide a redeposit ser- System, Washington, D.C. 20551. The price is vice for small checks that are returned because $9.00 per copy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 29 2. Change in claims of BIS reporting banks on country groups, unadjusted and adjusted for exchange rate changes Billions of dollars; - = decrease 1981-82 1983-84 1985 CCoouunnttrryy ggrroouupp Unadjusted Adjusted Unadjusted Adjusted Unadjusted Adjusted Non-OPEC developing countries 53.8 59.7 14.2 22.3 21.4 11.3 OPEC countries 8.6 12.4 3.5 7.8 4.7 .2 Eastern Europe1 -6.6 .1 -8.1 1.8 12.3 5.6 G-10 countries, smaller developed countries, and offshore banking centers2 295.0 352.7 112.0 193.0 321.1 219.8 Unallocated 8.1 15.5 -1.6 4.5 9.0 3.8 All countries 358.9 440.4 120.0 229.4 368.5 240.7 1. Excludes Yugoslavia, which is included here among the smaller country composition of the reporting area in these years and because developed countries. it adjusted the data for changes in exchange rates partly on the basis of 2. These areas were grouped together because the BIS changed the the definition of that area. ERRATA: BULLETIN TABLE To obtain copies of Financial Futures and Options in the U.S. Economy, write to Publica- In table 2, "Change in claims of BIS reporting tions Services, Board of Governors of the Federbanks on country groups, unadjusted and adjust- al Reserve System, Washington, D.C. 20551. ed," which appeared on page 686 of the October The price is $10 per copy. 1986 BULLETIN, the column headings, "unadjusted" and "adjusted," were transposed for each entry and time period. The corrected table appears above. CHANGES IN BOARD STAFF The Board of Governors announced the appointment of Donald B. Adams as Assistant Director NEW PUBLICATION: FINANCIAL FUTURES in the Division of International Finance, effective AND OPTIONS IN THE U.S. ECONOMY November 7, 1986. The Board has also announced the following The 11 papers in Financial Futures and Options official staff actions in the Division of Research in the U.S. Economy, prepared by the staff of the and Statistics, effective November 24, 1986: Federal Reserve System and edited by Myron L. Appointment of Martha S. Scanlon as Assis- Kwast, address a broad range of public policy tant Director. concerns raised by the invention and rapid Appointment of Joyce K. Zickler as Assistant growth of financial futures and options. The main Director. issues addressed are (1) What are the economic Promotion of Martha C. Bethea, Assistant purposes served by the markets in financial Director, to Deputy Associate Director. futures and options? (2) Do financial futures and Promotion of Peter A. Tinsley, Assistant Dioptions increase the price volatility of cash mar- rector, to Deputy Associate Director. kets? (3) What are the effects of financial futures and options markets on the formation and distri- Mr. Adams joined the Board's staff in January bution of real capital? (4) Can financial futures 1974 and has been Chief for the Administration and options markets interfere with the conduct of and Statistical and Data Management Sections. monetary policy? Mr. Adams has an M.B.A. in finance from The papers, revised since their preparation in Harvard University and has done graduate studconnection with a 1985 report to the Congress, ies in economics at Columbia University. are preceded by an overview summarizing them Ms. Scanlon joined the Board's staff in August and putting them in the context of a broader, 1972 as an economist and was promoted to Chief nontechnical discussion. of the Capital Markets Section in March 1983. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Federal Reserve Bulletin • January 1987 Ms. Scanlon has done graduate studies in eco- SYSTEM MEMBERSHIP: ADMISSION nomics at the University of Wisconsin. OF STATE BANKS Ms. Zickler came to the Board in September 1975 as an economist and became Chief of the The following banks were admitted to member- Economic Activity Section in October 1984. Ms. ship in the Federal Reserve System during the Zickler has a Ph.D. in economics from the period November 1 through November 30, 1986: George Washington University. Michigan Ludington Old Kent Bank of Ludington Niles Old Kent Bank Southwest Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

31 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON SEPTEMBER 23, 1986 fell 0.1 percentage point in August to 79 percent, about the same as the rate in the preceding three Domestic Policy Directive months but 1.6 percentage points below a year ago. The information reviewed at this meeting sug- Retail sales rose 0.8 percent in August, after a gested a moderate pickup in economic growth July increase of 0.3 percent. Sales in the automofrom the slow pace in the second quarter. Payroll tive group strengthened noticeably in response to employment expanded further in August with incentive plans offered at the end of the month by gains widespread by industry. Consumer spend- domestic auto producers. Total car sales rose to ing has continued to increase at a relatively rapid an annual rate of 12.2 million units in August, pace, and construction of single-family homes compared with 10.9 million units in July. In the has remained at a high level. Business capital early part of September, sales of domestically spending, however, has been sluggish, particu- produced autos soared to an annual rate of 17 larly for new structures. Wages rates have con- million units. Outlays for durable goods other tinued to increase slowly in recent months, while than autos, which were strong earlier in the year, producer and consumer prices have tended to dropped back in August, but sales at general firm, reflecting developments in food and energy merchandisers posted another large gain. markets. Residential construction activity remained rel- Total nonfarm payroll employment continued atively high through the summer. Housing starts to expand in August, rising about lA million totaled 1.8 million units at an annual rate in July further after adjusting for strike activity, some- and August. Single-family starts remained close what faster than the average gain so far this year. to the vigorous pace of the first half of the year, Hiring at service establishments accounted for while multifamily starts were appreciably below two-thirds of the increase, but construction em- their average level in that period. In July sales of ployment also was up substantially, and manu- new homes dropped below the extraordinary facturing employment rose for the first time since levels recorded earlier in the year, but sales of January. The civilian unemployment rate edged existing homes remained at about the advanced down again in August to 6.8 percent, nearly Vi pace of the second quarter. percentage point below the second-quarter aver- Business capital spending has remained slugage. gish, reflecting continued weakness in nonresi- After declining on balance over the first half of dential construction. Although the contraction in the year, industrial production has picked up oil and gas-well drilling appears to be subsiding, recently. According to revised data, output was the downtrend in commercial and industrial flat in June and rose 0.3 percent in July, rather building has continued partly because of high than declining in both months as previously vacancy rates and the impact of the tax reform reported. In August industrial production edged legislation. The value of nonresidential construcup 0.1 percent. Gains in output in July and tion put in place fell in July for the fifth time in August were particularly large for defense and six months. Business outlays for equipment, space equipment. Production of business equip- however, have expanded somewhat in recent ment, consumer goods, and construction sup- months; shipments of nondefense capital goods plies also registered strong increases. Capacity in August were VA percent above the secondutilization in manufacturing, mining, and utilities quarter average. New orders fell in August, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Federal Reserve Bulletin • January 1987 partially reversing gains in the previous two slightly the existing degree of pressure on remonths, largely because orders for aircraft and serve positions, taking account of the possibility parts dropped. Bookings for office and comput- of a change in the discount rate. The members ing equipment, however, have rebounded from expected such an approach to policy to be contheir level earlier this year. sistent with growth in M2 and M3 over the period Wage rates have continued to rise moderately from June to September at annual rates of about over the past few months, while producer and 7 to 9 percent. Over the same period growth in consumer prices have firmed somewhat on bal- Ml was expected to moderate from the rapid ance due to developments in food and energy pace during the second quarter. The Committee markets. Prices other than those for food and agreed that it would continue to evaluate growth energy, however, have risen at about the same of Ml in light of the expansion of the broader pace as earlier in the year. In August, the pro- aggregates and other factors. The members also ducer price index advanced 0.3 percent, after decided that somewhat greater or lesser reserve changing little on balance over the previous three restraint might be acceptable depending on the months and declining sharply earlier in the year. behavior of the aggregates, the strength of the The consumer price index increased 0.2 percent business expansion, developments in foreign exin August. The index had risen on balance in change markets, progress against inflation, and other recent months after falling somewhat dur- conditions in domestic and international credit ing the first four months of the year. In the markets. The intermeeting range for the federal commodity markets, spot prices for precious funds rate was maintained at 4 to 8 percent. metals rose sharply during August, reflecting The discount rate was reduced x/i percentage supply disruptions and, perhaps, renewed infla- point shortly after the August meeting. In the tionary expectations. The latter appeared to be two complete reserve maintenance periods endassociated in part with oil price developments ing after the meeting, adjustment plus seasonal and the lower foreign exchange value of the borrowing at the discount window averaged dollar. Lumber prices also rose significantly dur- close to $460 million, somewhat higher than in ing August. the previous intermeeting period. In the first The trade-weighted value of the dollar against week of the current maintenance period, borrowmajor foreign currencies had changed very little ing dropped back to about $280 million. on balance since the August 19 meeting of the Growth in the broader monetary aggregates Committee, although it fluctuated over a fairly slowed in August; M2 and M3 grew at annual wide range. Exchange rates appeared to be af- rates of about 103/4 percent and 8V2 percent, fected mainly by news about prospects for eco- respectively. In August, both aggregates were nomic activity in the United States and abroad. close to the upper limits of their longer-run Germany and Japan did not follow the Federal ranges. In contrast to the broader aggregates, Reserve's reduction in the discount rate, and growth in Ml accelerated, but it appeared to short-term interest rates abroad were little have slowed considerably in the early weeks of changed while money market rates in the United September. States were somewhat lower. At the same time, Federal funds generally have traded around long-term rates in the United States moved up 5% percent since the reduction in the discount sharply relative to comparable foreign interest rate shortly after the August 19 meeting of the rates. Preliminary data for the U.S. merchandise Committee. Other short-term interest rates fell trade deficit in July indicated a substantially about 30 basis points following the discount rate larger deficit than on average in the first half of cut. Longer-term bond yields changed little imthe year as non-oil imports surged. Real econom- mediately after the discount rate action but have ic growth appeared to have picked up on balance increased noticeably in recent weeks, with rates in the foreign industrial countries during the on Treasury securities rising as much as 60 basis second quarter after a weak performance in the points. The recent behavior of long-term rates first quarter. apparently has reflected, at least in part, some concerns by market participants about whether At its meeting in August, the Committee inflationary pressures could develop in the conadopted a directive that called for decreasing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 33 text of some strengthening in economic activity, facilities in many parts of the country and the the declining dollar, firmer oil prices, and rapid negative effects of the tax reform legislation on monetary growth in the United States and investment incentives that many businessmen abroad. were reporting. The outlook for fiscal policy The staff projections presented at this meeting remained uncertain; several members noted that suggested that growth in real GNP likely would some of the proposed measures for reducing the pick up a bit further in coming months. Growth deficit in 1987 did not deal with underlying was forecast to continue at a moderate pace in imbalances and that the prospects beyond 1987 1987. Through 1987, the key element supporting were especially unclear. However, one member expansion in domestic production was a project- observed that a reduction in government borrowed improvement in the U.S. trade position. ing, if achieved, would tend to have a favorable Growth in domestic spending was forecast to impact on financial markets and thus on the slow over the next several quarters. The staff economy generally. outlook for inflation indicated a limited increase On balance, while a few members supported from the current pace due to some firming in the view that some pickup in domestic demand world oil prices and the effects of the dollar's was a reasonable expectation, most believed that depreciation. The civilian unemployment rate growth in domestic demand would probably was expected to decline slightly over the projec- taper off over the next several quarters. In their tion horizon. view, therefore, the prospects for sustained eco- In the Committee's discussion of the economic nomic growth depended on an improvement in situation and outlook, the members expressed the foreign trade balance. The members generalgeneral agreement with the staff projection that ly agreed that the substantial depreciation of the moderate growth through the forecast horizon dollar against several major foreign currencies was the most likely outcome. However, the provided a basis for anticipating a reduction in outlook remained subject to substantial uncer- the trade deficit in real terms, but the timing of tainties relating to both domestic and internation- such a reduction still was subject to a great deal al factors. On the favorable side, consumer of uncertainty. Moreover, several expressed spending and construction of single-family hous- concern that the improvement might well be ing remained elements of strength in the domes- relatively modest, especially in the absence of tic economy, and members reported that busi- stronger economic growth in key industrial naness sentiment appeared to have improved tions abroad; and some members also commentrecently in several, but not all, parts of the ed on the inertia on both the import and export country. One member noted that reduced per- sides associated with long-term contracts and sonal income taxes could help to sustain consum- established marketing relationships. It also was er expenditures next year. Another commented noted that the currencies of a number of developthat the emergence of apparently more stable ing countries had changed relatively little vis-aconditions in agriculture and energy would tend vis the dollar over the past year or so, raising a to remove the retarding influences that those key question as to the speed of adjustment in the sectors had been exerting on overall economic trade balance. With regard to currently available activity. On the negative side, the demand for information on trade developments, a few memautomobiles undoubtedly would weaken after bers referred to limited indications in reports the currently attractive incentive programs ex- from firms in their Districts that tended to sugpired, and the apparent overbuilding of multifam- gest some gains in the international competitive ily housing in many areas would tend to restrain position of U.S. firms and better prospects for overall residential construction. Business fixed greater stability, if not some improvement, in the investment was not expected to provide much, if overall trade balance. However, broadly conany, impetus to the expansion despite indications firming evidence of such a development had not of improvement recently in the demand for materialized thus far. equipment. Adverse factors bearing on the in- Against the background of the dollar's deprecivestment outlook included the current oversupation, the members agreed that some upward ply of office buildings and other commercial pressure on prices could be expected over the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 1987 next several quarters, a tendency that would be 1987 against the background of intervening dereinforced if world oil prices continued to rise. velopments. Moreover, most commodity prices appeared to In the Committee's discussion of policy implehave stabilized recently, after declining earlier, mentation for the weeks immediately ahead, while prices of precious metals had increased nearly all the members were in favor of directing considerably and these developments along with open market operations, at least initially, toward conditions in financial markets suggested in- maintaining unchanged conditions of reserve creased concern about the possibility of a pickup availability. Several emphasized that monetary in inflation. On the other hand, a number of policy had moved toward an increasingly accommembers observed that wages generally were modative posture over the course of recent rising somewhat less this year than in 1985 and months and that it was now time to pause and some members also commented on the continu- observe developments, given the rapid growth in ing efforts of many business firms to hold down the broad as well as the narrow monetary aggretheir costs. And while productivity gains had gates, a few indications of more strength in the been relatively limited in recent quarters, many economy, and some signs of increasing inflationlabor contracts incorporated provisions on work ary expectations. One member expressed the rules that should help to improve efficiency and view, however, that some tightening of reserve moderate pressures on costs. conditions was desirable at this time against the At its meeting in July the Committee reviewed background of recent economic and financial the basic policy objectives that it had established developments, notably the persistence of rapid in February for growth of the monetary and growth in the monetary aggregates. credit aggregates in 1986 and set tentative objec- In their discussion of policy implementation tives for expansion in 1987. For the period from over the near term, the members took into acthe fourth quarter of 1985 to the fourth quarter of count an analysis that suggested that if current 1986, the Committee reaffirmed the ranges estab- conditions of reserve availability were mainlished in February for growth of 6 to 9 percent for tained and if short-term interest rates did not both M2 and M3. The associated range for ex- deviate significantly from their existing levels, pansion in total domestic nonfinancial debt also the growth of the monetary aggregates could be was reaffirmed at 8 to 11 percent for 1986. With expected to slow over the months ahead, relative respect to Ml, the Committee decided that to the very rapid pace over the summer months, growth in excess of the 3 to 8 percent range set in even assuming somewhat stronger expansion in February would be acceptable and that such economic activity. The most recent behavior of growth would be evaluated in the context of the the monetary aggregates lent some weight to velocity of Ml, the expansion of the broader such an expectation. However, the anticipated aggregates, developments in the economy and slowing still would result in growth of the broad financial markets, and price pressures. For 1987 aggregates around the upper bound of their longthe Committee agreed on tentative monetary term ranges. Also, the members recognized that growth objectives that included a reduction of Vi the extent of any slowing in monetary growth percentage point to a range of 5 V2 to 8V2 percent was subject to perhaps more than the usual for both M2 and M3. In the case of Ml the uncertainties, reflecting for example questions Committee expressed the preliminary view that about the pace of further adjustments in offering retention of the 1986 range of 3 to 8 percent, rates on various types of interest-bearing deposwhich implied a considerable reduction from the its as depository institutions continued to relikely rate of growth in 1986, appeared appropri- spond to earlier declines in short-term market ate for 1987 in the light of most historical experi- rates. The members also noted that the monetary ence. The Committee also retained the range of 8 aggregates might well continue to grow very to 11 percent for growth of total domestic nonfi- rapidly if short-term interest rates were to denancial debt in 1987. It was understood that all cline appreciably further. the ranges were provisional and that, notably in In the course of the discussion, a number of the case of Ml, they would be reviewed in early members expressed concern about the potential Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 35 for the broad monetary aggregates to exceed At the conclusion of the Committee's discustheir longer-term ranges. While recognizing the sion, all but one member indicated that they need to evaluate the aggregates in the context of favored a directive that called for no change in economic and financial developments more gen- the current degree of pressure on reserve posierally, these members emphasized the potential tions. The members expected this approach to for inflation stemming from the buildup in money policy implementation to be consistent with balances, and in liquid assets more generally, some reduction in the growth of M2 and M3 to and these members attached considerable impor- annual rates of 7 to 9 percent over the fourtance to constraining the growth of the broader month period from August to December. Over monetary aggregates to within the Committee's the same interval, growth in Ml was expected to ranges for the year. A slightly different view moderate from the exceptionally large increase acknowledged that the Committee's objectives during the past several months. Because the for M2 and M3 appeared to remain appropriate prospective behavior of Ml remained subject to for the year, but in this view actual growth unusual uncertainty, the Committee again decidmarginally in excess of those ranges should be ed not to specify a rate of expected growth for tolerated—and the added risks of some future this aggregate in the operational paragraph of the inflation accepted—if such growth occurred in directive but to continue to evaluate Ml in the the context of continuing sluggish economic ex- light of the performance of the broader aggrepansion. One member stressed that if the veloci- gates and other factors. The members indicated ty of money continued to decline, further rapid that slightly greater reserve restraint would, or expansion might indeed be needed to sustain an slightly lesser restraint might, be acceptable over acceptable rate of economic growth. the intermeeting period depending on the behav- Turning to the question of possible adjust- ior of the monetary aggregates, taking into acments in the degree of reserve pressure during count the strength of the business expansion, the the intermeeting period, the members did not performance of the dollar in foreign exchange foresee as likely any developments that might markets, progress against inflation, and condicall for more than a slight change, if any, in the tions in domestic and international credit maravailability of reserves during the weeks ahead. kets. The members agreed that the intermeeting In this context, however, a number believed that range for the federal funds rate, which provides a policy implementation should be especially alert mechanism for initiating consultation of the to the potential need for some slight firming of Committee when its boundaries are persistently reserve conditions, particularly if monetary exceeded, should be left unchanged at 4 to 8 growth did not slow in line with expectations, percent. though this growth would continue to be viewed At the conclusion of the meeting, the following in the context of other economic and financial domestic policy directive was issued to the Feddevelopments. Most of these members did not eral Reserve Bank of New York: want to rule out the possibility of some easing in the weeks immediately ahead, but they saw the The information reviewed at this meeting suggests prospects for such a move as less likely, and two some pickup in the growth of economic activity from favored a directive that would not contemplate the slow pace in the second quarter. In August total any easing. Other members felt that there should nonfarm payroll employment grew considerably furbe no presumptions about the likely direction of ther, with employment in manufacturing rising for the first time since January. The civilian unemployment any intermeeting adjustments, given the many rate edged down further to 6.8 percent. Industrial uncertainties that existed about the behavior of production rose slightly in July and August after the monetary aggregates and about prospective declining on balance during the first half of the year. economic and financial developments. The mem- Consumer spending has remained relatively strong in bers agreed that the behavior of the dollar on recent months, with gains in retail sales in August paced by a sharp rise in auto sales. Housing starts in foreign exchange markets could be an important July and August stayed at a relatively high level. factor influencing any small intermeeting adjust- Business capital spending appears to have remained ments. sluggish, reflecting weakness in nonresidential con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 1987 struction. A more moderate rate of wage increases has For 1987 the Committee agreed on tentative ranges been sustained in recent months, while broad mea- of monetary growth, measured from the fourth quarter sures of prices have firmed somewhat due to develop- of 1986 to the fourth quarter of 1987, of 5lA to 8V2 ments in food and energy markets. percent for M2 and M3. While a range of 3 to 8 percent The trade-weighted value of the dollar against major for Ml in 1987 would appear appropriate in the light of foreign currencies is essentially unchanged on balance most historical experience, the Committee recognized since the August 19 meeting of the Committee. Prelim- that the exceptional uncertainties surrounding the beinary data for the U.S. merchandise trade deficit in havior of Ml velocity over the more recent period July indicate a larger deficit than in previous months. would require careful appraisal of the target range at Growth of M2 and especially of M3 moderated in the beginning of 1987. The associated range for growth August, but expansion of these two aggregates for the in total domestic nonfinancial debt was provisionally year through August has been at the upper end of their set at 8 to 11 percent for 1987. respective ranges established by the Committee for In the implementation of policy for the immediate 1986. In August Ml continued to grow very rapidly. future, the Committee seeks to maintain the existing Expansion in total domestic nonfinancial debt remains degree of pressure on reserve positions. This action is appreciably above the Committee's monitoring range expected to be consistent with growth in M2 and M3 for 1986. Short-term interest rates have declined fur- over the period from August to December at annual ther since the August meeting of the Committee while rates of 7 to 9 percent. While growth in Ml is expected long-term market rates have risen on balance. On to moderate from the exceptionally large increase August 20, the Federal Reserve Board approved a during the past several months, that growth will conreduction in the discount rate from 6 to 5V2 percent. tinue to be judged in the light of the behavior of M2 The Federal Open Market Committee seeks mone- and M3 and other factors. Slightly greater reserve tary and financial conditions that will foster reasonable restraint would, or slightly lesser reserve restraint price stability over time, promote growth in output on might, be acceptable depending on the behavior of the a sustainable basis, and contribute to an improved aggregates, taking into account the strength of the pattern of international transactions. In furtherance of business expansion, development in foreign exchange these objectives the Committee agreed at the July markets, progress against inflation, and conditions in meeting to reaffirm the ranges established in February domestic and international credit markets. The Chairfor growth of 6 to 9 percent for both M2 and M3, man may call for Committee consultation if it appears measured from the fourth quarter of 1985 to the fourth to the Manager for Domestic Operations that reserve quarter of 1986. With respect to Ml, the Committee conditions during the period before the next meeting recognized that, based on the experience of recent are likely to be associated with a federal funds rate years, the behavior of that aggregate is subject to persistently outside a range of 4 to 8 percent. substantial uncertainties in relation to economic activity and prices, depending among other things on the responsiveness of Ml growth to changes in interest Votes for this action: Messrs. Volcker, Corrigan, rates. In light of these uncertainties and of the substan- Angell, Guffey, Heller, Mrs. Horn, Messrs. tial decline in velocity in the first half of the year, the Johnson, Melzer, Morris, Rice, and Ms. Seger. Committee decided that growth of Ml in excess of the Vote against this action: Mr. Wallich. previously established 3 to 8 percent range for 1986 would be acceptable. Acceptable growth of Ml over the remainder of the year will depend on the behavior of velocity, growth in the other monetary aggregates, Mr. Wallich dissented because he preferred a developments in the economy and financial markets, slight tightening of reserve conditions. He was and price pressures. Given its rapid growth in the early concerned about the persistence of rapid monepart of the year, the Committee recognized that the tary expansion and the associated potential for increase in total domestic nonfinancial debt in 1986 inflation. In his view some reduction in the may exceed its monitoring range of 8 to 11 percent, but felt an increase in that range would provide an inap- availability of reserves was needed to increase propriate benchmark for evaluating longer-term trends the likelihood of significant slowing in monetary in that aggregate. growth over the months ahead. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

37 Legal Developments AMENDMENT TO REGULATION D Category Reserve Requirement The Board of Governors is amending its Regulation D, Net transaction accounts $0 to $36.7 million 3 percent of amount Reserve Requirements of Depository Institutions, to: over $36.7 million $1,101,000 plus 12% of amount (1) increase the amount of transaction accounts over $36.7 million Nonpersonal time deposits subject to a reserve requirement ratio of 3 percent, By original maturity (or as required by section 19(b)(2)(C) of the Federal notice period): Less than IV2 years 3% Reserve Act (12 U.S.C. § 461(b)(2)(C)), from $31.7 1 Vi years or more 0% Eurocurrency liabilities 3% million to $36.7 million of net transaction accounts; (2) increase the amount of reservable liabilities of each depository institution that is subject to a reserve requirement of zero percent, as required by (2) Exemption from reserve requirements. Each section 19(b)(ll)(B) of the Federal Reserve Act depository institution, Edge or Agreement Corpo- (12 U.S.C. § 461(b)(ll)(B)), from $2.6 million to ration, and U.S. branch or agency of a foreign $2.9 million of reservable liabilities; and bank is subject to a zero percent reserve require- (3) increase the reporting cutoff level which is used ment on an amount of its transaction accounts to separate weekly reporters from quarterly report- subject to the low reserve tranche in paragraph ers from $26.8 million to $28.6 million of total (a)(1), nonpersonal time deposits, or Eurocurdeposits and other reservable liabilities. rency liabilities or any combination thereof not in Effective December 30, 1986, the Board amends excess of $2.9 million determined in accordance 12 C.F.R. Part 204 as follows: with section 204.3(a)(3) of this Part. AMENDMENT TO REGULATION Y Part 204—Reserve Requirements of Depository Institutions The Board of Governors is amending Appendix A— Capital Adequacy Guidelines for Bank Holding Com- 1. The authority citation for 12 C.F.R. Part 204 is panies and State Member Banks—to its Regulation Y, revised to read as follows: Bank Holding Companies and Change in Bank Control, to treat perpetual debt securities that meet certain criteria as primary capital for bank holding companies (but not state member banks). The Board also adopted, with modifications, its proposal to limit the com- Authority: 12 U.S.C. §§ 248(a), 248(c), 371a, 371b, bined amount of mandatory convertible instruments, 461, 601, 611; 12 U.S.C. § 3105; 12 U.S.C. § 461. perpetual preferred stock and perpetual debt that may qualify as primary capital. Effective November 3, 1986, the Board amends Appendix A of 12 C.F.R. Part 225 as follows: 2. Section 204.9, Reserve Requirement Ratios, is amended by revising paragraphs (a)(1) and (a)(2) as follows: (a)(1) Reserve percentages. The following reserve Part 225—Bank Holding Companies and ratios are prescribed for all depository institu- Change in Bank Control tions, Edge and Agreement Corporations, and United States branches and agencies of foreign 1. The authority citation for Part 225 continues to read banks: as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 1987 Authority: 12 U.S.C. §§ 1817(j)(13), 1818, 1843(c)(8), Federal Reserve to be in the process of being issued 1844(b), 3106, 3108, 3907, 3909. prior to that date), shall continue to be included as primary capital. 2. The portion of Appendix A of Part 225 entitled The maximum composite amount of mandatory con- "Definition of Capital to be Used in Determining vertible securities and perpetual debt that may be Capital Adequacy of Bank Holding Companies and counted as primary capital for bank holding companies State Member Banks" is amended by adding perpetual is limited to 20 percent of all primary capital, including debt to the list of primary capital components, by these instruments. The maximum amount of equity deleting footnote 3, and by adding a new subsection commitment notes (a form of mandatory convertible entitled "Limits on Non-Common-Equity Forms of securities) that may be counted as primary capital for a Primary Capital." That portion of Appendix A now bank holding company is limited to 10 percent of all reads as follows: primary capital, including mandatory convertible securities. Amounts outstanding in excess of these limitations may be counted as secondary capital provided APPENDIX A—Capital Adequacy Guidelines for they meet the requirements of secondary capital in- Bank Holding Companies and State Member struments. Banks State Member Banks. The composite limitations on the amount of mandatory convertible securities and perpetual preferred stock (perpetual debt is not primary capital for state member banks) that may serve Definition of Capital to be Used in Determining as primary capital for bank holding companies shall Capital Adequacy of Bank Holding Companies not be applied formally to state member banks, aland State Member Banks though the Board shall determine appropriate limits for these forms of primary capital on a case-by-case Primary Capital Components basis. The maximum amount of mandatory convertible The components of primary capital are: securities that may be counted as primary capital for — common stock, state member banks is limited to 16% percent of all — perpetual preferred stock (preferred stock that primary capital, including mandatory convertible sedoes not have a stated maturity date and that curities. Equity commitment notes, one form of manmay not be redeemed at the option of the datory convertible securities, shall not be included as holder), primary capital for state member banks, except that — surplus (excluding surplus relating to limited-life notes issued by state member banks prior to May 15, preferred stock), 1985 will continue to be included in primary capital. — undivided profits, Amounts of mandatory convertible securities in ex- — contingency and other capital reserves, cess of these limitations may be counted as secondary — mandatory convertible instruments, capital if they meet the requirements of secondary — allowance for possible loan and lease losses capital instruments. (exclusive of allocated transfer risk reserves), — minority interest in equity accounts of consolidated subsidiaries, — perpetual debt instruments (for bank holding companies but not for state member banks). 3. That portion of Appendix A entitled "Criteria Applicable to Both Types of Mandatory Convertible Securities" is amended by deleting paragraph (b) and Limits on Certain Forms of Primary Capital footnote 4 and relettering paragraphs (c) through (f) as paragraphs (b) through (e). Footnotes 5 and 6 will be Bank Holding Companies. The maximum composite renumbered as footnotes 3 and 4. amount of mandatory convertible securities, perpetual 4. That portion of Appendix A entitled "Additional debt, and perpetual preferred stock that may be count- Criteria Applicable to Equity Commitment Notes" is ed as primary capital for bank holding companies is amended by deleting paragraph (d) and by renumberlimited to 33.3 percent of all primary capital, including ing footnotes 7 and 8 as footnotes 5 and 6. these instruments. Perpetual preferred stock issued 5. Appendix A is amended by adding the following prior to November 20, 1985 (or determined by the paragraphs at the end of the Appendix. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 39 Criteria for Determining the Primary Capital AMENDMENT TO REGULATION AA Status of Perpetual Debt Instruments of Bank Holding Companies The Board of Governors is granting in part the request by the state of Wisconsin for an exemption from the 1. The instrument must be unsecured and, if issued by Board's Credit Practices Rule, Subpart B of Regulaa bank, must be subordinated to the claims of deposi- tion AA, Unfair or Deceptive Acts or Practices. tors. Effective November 20, 1986, the Board grants, 2. The instrument may not provide the noteholder with pursuant to Subpart B of 12 C.F.R. Part 227, an the right to demand repayment of principal except in exemption as follows: the event of bankruptcy, insolvency, or reorganization. The instrument must provide that nonpayment of interest shall not trigger repayment of the principal of the perpetual debt note or any other obligation of the issuer, nor shall it constitute prima facie evidence of Part 227—Unfair or Deceptive Acts or insolvency or bankruptcy. Practices 3. The issuer shall not voluntarily redeem the debt issue without prior approval of the Federal Reserve, 1. The authority citation for 12 C.F.R. Part 227 continexcept when the debt is converted to, exchanged for, ues to read as follows: or simultaneously replaced in like amount by an issue of common or perpetual preferred stock of the issuer Authority: § 18(f), FTC A, as amended by Pub.L. or the issuer's parent company. 93-637. 4. If issued by a bank holding company, a bank subsidiary, or a subsidiary with substantial operations, 2. The exemption requested by the state of Wisconsin the instrument must contain a provision that allows the to Subpart B of Regulation AA, the Credit Practices issuer to defer interest payments on the perpetual debt Rule, is granted in part, as follows: in the event of, and at the same time as the elimination of dividends on all outstanding common or preferred stock of the issuer (or in the case of a guarantee by a parent company at the same time as the elimination of the dividends of the parent company's common and preferred stock). In the case of a nonoperating subsid- ORDER iary (a funding subsidiary or one formed to issue securities), the deferral of interest payments must be The state of Wisconsin has applied for an exemption triggered by elimination of dividends by the parent from the Credit Practices Rule which became effective company. January 1, 1986. Pursuant to § 227.16 of Regulation 5. If issued by a bank holding company or a subsidiary AA, the Board has determined that the relevant laws with substantial operations, the instrument must conof this state are substantially equivalent to the federal vert automatically to common or perpetual preferred law and that the state administers and enforces its laws stock of the issuer when the issuer's retained earnings effectively. The Board hereby grants the exemption as and surplus accounts become negative. If an operating follows: subsidiary's perpetual debt is guaranteed by its parent, the debt may convert to the shares of the issuer or guarantor and such conversion may be triggered when Effective November 20, 1986, consumer credit transacthe issuer's or parent's retained earnings and surplus tions under $25,000 that are subject to the Wisconsin accounts become negative. If issued by a nonoperating Consumer Act and its implementing regulations are exempt from the Board's Credit Practices Rule. Consubsidiary of a bank holding company or bank, the sumer credit transactions over $25,000 are subject to the instrument must convert automatically to common or Board's Credit Practices Rule; however, compliance preferred stock of the issuer's parent when the re- with the relevant provisions of the Wisconsin Consumer tained earnings and surplus accounts of the issuer's Act would be considered compliance with the Board's parent become negative. rule. This exemption does not apply to transactions in which a federally chartered institution is a creditor. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Federal Reserve Bulletin • January 1987 ORDERS ISSUED UNDER BANK HOLDING 44 countries. In the United States, Algemene operates COMPANY ACT, BANK MERGER ACT, BANK full service branches in New York, Chicago, and SERVICE CORPORATION ACT, AND FEDERAL Pittsburgh, a limited service branch in Seattle, and RESERVE ACT agencies in Atlanta, Boston, Miami, Houston, Los Angeles, and San Francisco. Algemene has selected Orders Issued Under Section 3 of the Bank Illinois as its home state under the Board's Regulation Holding Company Act K (12 C.F.R. § 211.22(b)). Algemene is permitted under section 5(b) of the International Banking Act A.B.N.-Stichting ("IBA") (12 U.S.C. § 3103(b)) to retain its full service Amsterdam, The Netherlands branches outside of Illinois because they were opened before July 27, 1978, the grandfather date under sec- Algemene Bank Nederland N.V. tion 5 of the IBA. The Seattle branch limits its deposit- Amsterdam, The Netherlands taking operations to those permissible for a corporation organized under section 25(a) of the Federal ABN Company, Inc. Reserve Act (12 U.S.C. § 611 et seq.), as required by Chicago, Illinois section 5 of the IBA. Algemene also operates a subsidiary in New York engaged in acting as agent in the LaSalle National Corporation purchase and sale of securities on the Amsterdam Chicago, Illinois Stock Exchange as permitted under the Board's regulations. ABN is a holding company whose only subsid- Order Approving Acquisition of a Bank Holding iaries are LaSalle National and a subsidiary in Chica- Company and of a Bank go, with an office in Houston, organized pursuant to section 25(a) of the Federal Reserve Act. LaSalle A.B.N.-Stichting, Amsterdam, The Netherlands National is a holding company whose only subsidiaries ("Stichting"), and its wholly owned direct and indirect are LaSalle National Bank, Chicago, Illinois ("LaSalle subsidiaries, Algemene Bank Nederland N.V., Am- Bank"), and a subsidiary engaged in discount brokersterdam, The Netherlands ("Algemene"); ABN Com- age activities permitted under the Board's regulations. pany, Inc., Chicago, Illinois ("ABN"); and LaSalle LaSalle National is the 11th largest commercial National Corporation, Chicago, Illinois ("LaSalle Na- banking organization in Illinois with total deposits of tional") (collectively "Applicants"), all bank holding $935.1 million, representing 0.9 percent of the total companies within the meaning of the Bank Holding deposits in commercial banks in the state.2 Alge- Company Act ("BHC Act") (12 U.S.C. mene's Chicago branch holds no deposits. Bancorpor- § 1841 et seq.), have each applied for the Board's prior ation, with only one bank, is the 250th largest commerapproval under section 3(a)(3) of the BHC Act cial banking organization in Illinois with total deposits (12 U.S.C. § 1842(a)(3)) to acquire all of the outstand- of $79.1 million, representing less than 0.1 percent of ing voting shares of Lisle Bancorporation, Lisle, Illi- the total deposits in commercial banks in the state. nois ("Bancorporation"), and thereby to acquire indi- Upon consummation of this proposal, LaSalle Nationrectly Bank of Lisle, Lisle, Illinois ("Lisle Bank"). al will become the 10th largest commercial banking Notice of the applications, affording interested per- organization in Illinois with total deposits of approxisons an opportunity to submit comments, has been mately $1 billion, representing approximately 1 pergiven in accordance with section 3(b) of the BHC Act. cent of the total deposits in commercial banks in the The time for filing comments has expired and the state. Board has considered the applications and all com- LaSalle National competes in the Chicago banking ments received in light of the factors set forth in market,3 where it is the 8th largest of 279 commercial section 3(c) of the BHC Act (12 U.S.C. § 1842(c)). banking organizations, with 1.4 percent of the total Stichting is a private foundation that does not en- deposits in commercial banks. Bancorporation also gage in activities other than holding shares of Alge- competes in the Chicago banking market, where it is mene. Algemene, with total assets of $51.3 billion, is the 129th largest commercial banking organization, the 43rd largest bank in the world and the largest bank with 0.1 percent of the total deposits in commercial in The Netherlands.1 Algemene has banking and non- banks in the market. Upon consummation, LaSalle banking subsidiaries, offices, branches and agencies in 2. All banking data are as of June 30, 1985, unless otherwise indicated. 3. The Chicago banking market is approximated by Cook, DuPage 1. Banking data for Algemene are as of December 31, 1985. and Lake Counties, all in Illinois. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 41 National will become the 7th largest commercial bank- raised additional capital, and its plans to improve ing organization in the market with 1.5 percent of the further its capital ratio in the near future. The Board total deposits in commercial banks. also notes that Algemene is in compliance with the The Chicago banking market is not concentrated, capital and other financial requirements of the approwith the four largest commercial banking organiza- priate supervisory authorities in The Netherlands and tions in the market holding 46.7 percent of the total that Algemene's resources and prospects are viewed deposits in commercial banks in the market and a as satisfactory by those authorities. Herfindahl-Hirschman Index ("HHI") of 715 points. In its evaluation of this case, the Board has consid- Upon consummation of this proposal, the HHI will ered as additional positive factors the fact that ABN, increase by less than one point. Accordingly, based on LaSalle National, and LaSalle Bank are all strongly these and all the facts of record, the Board has capitalized, and that LaSalle National and LaSalle determined that consummation of this proposal would Bank have significantly improved their capital posinot have any significant adverse competitive effects or tions under the ownership and control of Algemene. In result in the concentration of banking resources in any addition, the Board notes that Lisle Bank is small in relevant banking market. relation to Algemene and ABN and is itself strongly Section 3(c) of the BHC Act requires in every case capitalized. In this regard, as the Board has noted,5 that the Board consider the financial resources of the recent changes in Illinois banking law have allowed applicant organization and the bank or bank holding multi-bank holding companies in Illinois. This has company to be acquired. As the Board has previously created the opportunity for large banking organizastated, review of the financial resources of foreign tions in Chicago and other markets to expand into the banking organizations raises a number of complex Chicago suburbs. In line with the actions of its major issues that the Board believes require careful consider- competitors in Chicago, Lasalle National is attempting ation and that the Board continues to have under through this acquisition to expand its deposit base and review.4 In this regard, the Board has initiated consul- banking activities into the Chicago suburbs. This actations with appropriate foreign bank supervisors and quisition of a $79 million bank is LaSalle National's notes that work is currently in progress among foreign first effort in this regard and is modest in scope. and domestic bank supervisory officials to develop The Board expects that Applicants will maintain more fully the concept of functional equivalency of LaSalle Bank and Lisle Bank as among the more capital ratios for banks of different countries. Pending strongly capitalized banking organizations of comparathe outcome of these consultations and deliberations, ble size in the United States. Based on these and other the Board has determined to consider the issues raised facts of record, the Board concludes that the financial by applications by foreign banks to acquire domestic factors to be considered under the BHC Act are banks on a case-by-case basis. consistent with approval of the transaction. In this case, the Board notes that the primary capital In its evaluation of Applicants' managerial reratio of Algemene, as publicly reported, is below the sources, the Board has considered certain violations minimum level established for domestic bank holding by LaSalle Bank of the Currency and Foreign Transaccompanies. In other similar cases, the Board has tions Reporting Act6 ("CFTRA") and the regulations considered mitigating factors, including adjustments to thereunder. The Board notes that LaSalle Bank has the applicant's capital that reflect differences between consulted with and cooperated with the appropriate foreign and domestic accounting and regulatory prac- supervisory authorities and law enforcement agencies tices. After making adjustments in this case to account following discovery of these violations. for certain elements of capital that are the same or In addition, LaSalle Bank has implemented a comsimilar in the capital structure of domestic bank hold- prehensive remedial program to correct these violaing companies, and adjustments that reflect differ- tions and to prevent violations from occurring in the ences in accounting and regulatory practices, the future. Applicants have advised the Board that Laprimary capital ratio of Algemene closely approxi- Salle Bank has filed corrective currency transaction mates the minimum level established for domestic reports; implemented audit and operations procedures bank holding companies. The Board has also considto ensure that reportable transactions are identified for ered as positive factors that Algemene has recently proper reporting, including implementing computer programs to verify compliance; and appointed a compliance officer responsible for monitoring compliance 4. Bank of Montreal, 70 FEDERAL RESERVE BULLETIN 664 (1984); Mitsubishi Bank, Ltd., 70 FEDERAL RESERVE BULLETIN 518 (1984). See also Policy Statement on Supervision and Regulation of Foreign- 5. Continental Illinois Corp., 73 FEDERAL RESERVE BULLETIN 46 Based Bank Holding Companies, 1 Federal Reserve Regulatory (1987). Service 11 4-835 (1979). 6. 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

42 Federal Reserve Bulletin • January 1987 with the CFTRA and regulations thereunder. Appli- time for filing comments has expired, and the Board cants have also instituted an intensive ongoing internal has considered the application and all comments retraining and testing program for bank personnel re- ceived in light of the factors set forth in section 3(c) of garding compliance with the CFTRA. The sufficiency the Act (12 U.S.C. § 1842(c)). of the compliance procedures adopted to address this Section 3(d) of the Act (12 U.S.C. § 1842(d)), the matter and the efficacy in correcting the deficiencies Douglas Amendment, prohibits the Board from aphave been reviewed by Office of the Comptroller of the proving an application by a bank holding company to Currency examiners. The Board has also consulted acquire a bank located outside the bank holding comwith appropriate enforcement agencies and has con- pany's home state,1 unless the state where the bank to sidered Applicants' past record of compliance with the be acquired is located has specifically authorized the law. For the foregoing reasons and based upon a acquisition by language to that effect and not merely review of all facts of record, the Board concludes that by implication. The Board has previously determined the managerial resources of Applicants are consistent that Oregon has by statute expressly authorized a with approval. Washington bank holding company, such as Appli- The Board has also determined that considerations cant, to acquire an Oregon bank or bank holding relating to the convenience and needs of the communi- company.2 Accordingly, approval of Applicant's proty to be served are also consistent with approval. posal to acquire Oregon Bank is not barred by the Based on the foregoing and all the facts of record, the Douglas Amendment. Board has determined that the applications should be Washington Bank, the tenth largest of 88 commerand hereby are approved. The transaction shall not be cial banking organizations in Washington, controls consummated before the thirtieth calendar day follow- $162.2 million in total deposits, representing 0.7 pering the effective date of this Order, or later than three cent of total deposits in commercial banks in Washingmonths after the effective date of this Order, unless ton.3 Oregon Bank, the 23rd largest of 60 commercial such period is extended for good cause by the Board or banking organizations in Oregon, controls $41 million by the Federal Reserve Bank of Chicago, acting pursu- in total deposits, representing 0.3 percent of total ant to delegated authority. deposits in commercial banks in Oregon. Consumma- By order of the Board of Governors, effective tion of the proposal would have no significant effect on November 26, 1986. the concentration of banking resources in Washington or Oregon. Voting for this action: Chairman Volcker and Governors Washington Bank and Oregon Bank compete direct- Johnson, Seger, and Angell. Absent and not voting: Gover- ly in the Walla Walla, Washington/Umatilla, Oregon nors Wallich, Rice, and Heller. banking market.4 Washington Bank is the largest of 12 commercial banking organizations in the market, with BARBARA R. LOWREY deposits of $151 million, representing 26.4 percent of [SEAL] Associate Secretary of the Board the total deposits in commercial banks in the market.5 Oregon Bank is the sixth largest commercial bank in the market, with total deposits of $38 million, representing 6.7 percent of the deposits in commercial banks in the market. After consummation of the Baker Boyer Bancorp proposal, Applicant's share of the deposits in commer- Walla Walla, Washington cial banks in the market would be 33.1 percent and it would rank first in the market. The share of deposits Order Approving the Formation of a Bank Holding held by the four largest commercial banking organiza- Company Baker Boyer Bancorp, Walla Walla, Washington, has applied for the Board's approval under section 3(a)(1) of the Bank Holding Company Act ("Act") 1. A bank holding company's home state for purposes of the (12 U.S.C. § 1842(a)(1)) to become a bank holding 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 company by acquiring the Baker-Boyer National Bank became a bank holding company, whichever date is later. 12 U.S.C. of Walla Walla, Walla Walla, Washington ("Washing- § 1842(d). Applicant's home state is Washington. ton Bank") and the Bank of Commerce, Milton- 2. Rainier Bancorporation, 73 FEDERAL RESERVE BULLETIN 55 (1987). Freewater, Oregon ("Oregon Bank"). 3. State deposit data are as of March 31, 1986. Notice of the application, affording an opportunity 4. The Walla Walla, Washington/Umatilla, Oregon banking market consists of Walla Walla County, Washington, and Umatilla County, for interested persons to submit comments, has been Oregon. given in accordance with section 3(b) of the Act. The 5. Market data are as of June 30, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 43 tions in the market would increase from 64 percent to such period is extended for good cause by the Board or 71 percent and the Herfindahl-Hirschman Index by the Federal Reserve Bank of San Francisco, acting ("HHI") would increase by 354 points to 1765.6 pursuant to delegated authority. Although consummation of the proposal would elim- By order of the Board of Governors, effective inate some existing competition between Washington November 19, 1986. Bank and Oregon Bank in the market, numerous other commercial banking organizations would remain as Voting for this action: Chairman Volcker and Governors competitors after consummation of the proposal. In Johnson, Rice, Seger, and Angell. Absent and not voting: addition, the effect of this proposal on existing compe- Governors Wallich and Heller. tition is further mitigated by the extent of competition offered by thrift institutions in the market.7 Eight thrift JAMES MCAFEE institutions hold 40.9 percent of the total deposits in [SEAL] Associate Secretary of the Board the market. These institutions compete with commercial banks by providing a wide array of deposit and lending services to consumers and commercial cus- Central Bancompany tomers. In view of these facts, the Board considers the Jefferson City, Missouri presence of thrift institutions a significant factor in assessing the competitive effects of this proposal.8 Order Approving Acquisition of a Bank Accordingly, in view of the competition provided by thrift institutions and the number and size of competi- Central Bancompany, Jefferson City, Missouri, a bank tors remaining in the market and other facts of record, holding company within the meaning of the Bank the Board concludes that consummation of the pro- Holding Company Act ("Act") (12 U.S.C. § 1841 posed acquisition is not likely to substantially lessen et seq.), has applied for the Board's approval under competition in the Walla Walla, Washington/Umatilla, section 3(a)(3) of the Act to acquire Bank of Lake of Oregon banking market. the Ozarks, Osage Beach, Missouri ("Bank"). The financial and managerial resources of Appli- Notice of the application, affording an opportunity cant, Washington Bank and Oregon Bank are consis- for interested persons to submit comments, has been tent with approval of the application. Considerations given in accordance with section 3(b) of the Act. The relating to the convenience and needs of the communi- time for filing comments has expired, and the Board ties to be served are also consistent with approval. has considered the application and all comments re- Based on the foregoing and other facts of record, the ceived, including one comment in opposition to the Board has determined that this application should be, application, in light of the factors set forth in section and hereby is, approved. The transaction shall not be 3(c) of the Act (12 U.S.C. § 1842(c)). consummated before the thirtieth calendar day follow- Applicant, the sixth largest commercial banking ing the effective date of this Order, or later than three organization in Missouri, controls seven subsidiary months after the effective date of this Order, unless banks in the state with approximately $1.1 billion in total deposits, representing 2.7 percent of the total deposits in commercial banks in the state.1 Bank, the 6. Under the revised Department of Justice Merger Guidelines (49 69th largest of 673 commercial banks in Missouri, has Federal Register 26,823 (June 29, 1984)), any market in which the post-merger HHI is between 1000 and 1800 is considered moderately deposits of $101.9 million, representing 0.3 percent of concentrated, and the Department is likely to challenge a merger that the total deposits in commercial banks in the state. increases the HHI by more than 100 points, unless other facts of Upon consummation of the proposed transaction, Aprecord indicate that the merger is not likely substantially to lessen competition. The Department has informed the Board that a bank plicant would remain the sixth largest commercial merger or acquisition generally will not be challenged (in the absence banking organization in Missouri, with total deposits of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by at of $1.2 billion, representing 2.9 percent of total deposleast 200 points. its in commercial banks in the state. Accordingly, 7. The Board has previously indicated that thrift institutions have consummation of the proposal would have no signifibecome, or have the potential to become, major competitors of commercial banks. National City Corporation, 70 FEDERAL RESERVE cant effect on the concentration of banking resources BULLETIN 743 (1984); NCNB Corporation, 70 FEDERAL RESERVE in Missouri. BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL RESERVE BULLETIN 802 (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). 8. If 50 percent of the deposits held by thrift institutions were included in the calculation of market concentration, the share of total deposits held by the four largest organizations in the market would be 54 percent. Upon consummation of the proposal, Applicant would 1. Banking data are as of December 31, 1985 and are adjusted to control 24.6 percent of the total deposits in the market and the HHI reflect mergers consummated and holding company acquisitions apwould increase by 196 points to 1136. proved through September 30, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 1987 Applicant and Bank compete directly in the Eldon/ On the basis of these and other facts of record, the Camdenton, Missouri, banking market.2 Applicant is Board concludes that consummation of the proposal is the fifth largest of 11 commercial banking organiza- not likely to have a significant adverse effect on tions in the Eldon/Camdenton banking market, with competition in the Eldon/Camdenton, Missouri, bankdeposits of $16.4 million, representing 4.5 percent of ing market. total deposits in commercial banks in the market. The financial and managerial resources of Appli- Bank is the largest commercial bank in the market, cant, its subsidiaries and Bank are consistent with with total deposits of $101.9 million, representing 28 approval of the application. Upon consummation of percent of the deposits in commercial banks in the this proposal, Bank will offer new products and sermarket. After consummation of the proposal, Appli- vices including one-statement banking, automatic tellcant's share of the deposits in commercial banks in the er machines, instant statements in bank lobbies, and market would be 32.5 percent. The market's four-firm overdraft checking. Considerations relating to the conconcentration ratio would increase from 76 percent to venience and needs factors are also consistent with 80.5 percent and, based on commercial banks alone, approval. the Herfindahl-Hirschman Index ("HHI") would in- Based on the foregoing and other facts of record, the crease by 252 points to 1978. The increase in the HHI Board has determined that this application should be, would make this transaction one that would be subject and hereby is, approved. The transaction shall not be to challenge under the Department of Justice Merger consummated before the thirtieth calendar day follow- Guidelines.3 ing the effective date of this Order, or later than three Although consummation of the proposal would elim- months after the effective date of this Order, unless inate existing competition between Applicant and such period is extended for good cause by the Board or Bank in the Eldon/Camdenton, Missouri, banking by the Federal Reserve Bank of St. Louis, acting market, the Board has concluded that the effect of this pursuant to delegated authority. proposal on existing competition is mitigated by the By order of the Board of Governors, effective presence of a number of banking alternatives in the November 21, 1986. market, including a newly chartered state bank scheduled to open in Osage Beach, Missouri, prior to Voting for this action: Vice Chairman Johnson and Gover- January 1, 1987. In addition, the Board has considered nors Rice, Seger, and Angell. Absent and not voting: Chairthe presence and competition afforded by thrift institu- man Volcker and Governors Wallich and Heller. tions in its analysis of this proposal.4 Three thrift institutions located in the Eldon/Camdenton market JAMES MCAFEE hold deposits of $56 million, representing 13.5 percent [SEAL] Associate Secretary of the Board of the total deposits in depository institutions in the market. These institutions compete with commercial banks in the provision of consumer loans, and, to some extent, commercial lending services and com- Citizens and Southern Corporation mercial checking accounts.5 Atlanta, Georgia Citizens and Southern Florida Corporation Ft. Lauderdale, Florida 2. The Eldon/Camdenton, Missouri, banking market consists of Camden and Miller Counties, Missouri. 3. Under the revised Department of Justice Merger Guidelines (49 Order Approving Acquisition of Banks Federal Register 26,823 (June 29, 1984)), any market in which the post-merger HHI is above 1800 is considered highly concentrated. The Department has informed the Board that a bank merger or The Citizens and Southern Corporation, Atlanta, acquisition will not be challenged (in the absence of other factors Georgia ("C&S Georgia"), and Citizens and Southern indicating anticompetitive effect) unless the post-merger HHI is at Florida Corporation, Ft. Lauderdale, Florida ("C&S least 1800 and the merger increases the HHI by at least 200 points. 4. The Board has previously indicated that thrift institutions have Florida") (together "Applicants"), bank holding combecome, or have the potential to become, major competitors of panies within the meaning of the Bank Holding Comcommercial banks. National City Corporation, 70 FEDERAL RESERVE pany Act (12 U.S.C. § 1841 et seq.) ("Act"), have BULLETIN 743 (1984); NCNB Corporation, 70 FEDERAL RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL applied for the Board's approval under section 3(a)(3) RESERVE BULLETIN 802 (1983); First Tennessee National Corporaof the Act (12 U.S.C. § 1842 (a)(3)) to acquire First tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). 5. If 50 percent of the deposits held by thrift institutions in the National Bank, Winter Park, Winter Park, Florida Eldon/Camdenton banking market were included in the calculation of ("Winter Park Bank"); Bank of the Islands, Sanibel, market concentration, the HHI, as a result of the proposal, would Florida ("Sanibel Bank"); Community National Bank, increase by 217 points to 1729 and Applicant would control 30.1 percent of the market's deposits upon consummation of the proposal. Kissimmee, Florida ("Kissimmee Bank"); and First Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 45 National Bank, Seminole County, Longwood, Florida tions in Florida and together control 0.4 percent of the ("Longwood Bank") (together "Banks"). deposits in commercial banks in Florida. Upon con- Notice of the applications, affording an opportunity summation of the transaction, Applicants would conto interested persons to submit comments, has been trol 5.1 percent of the total deposits in commercial given in accordance with section 3(b) of the Act (51 banks in Florida and would remain the eighth largest Federal Register 28,982 (August 13, 1986)). The time commercial banking organization in Florida. The for filing comments has expired, and the Board has Board concludes that consummation of this proposal considered the applications and all the comments would have no effect on the concentration of banking received in light of the factors set forth in section 3(c) resources in any state. of the Act.1 Applicants and Banks compete in the Orlando and Section 3(d) of the Act (12 U.S.C. § 1842(d)), the Fort Myers banking markets. In the Orlando banking Douglas Amendment, prohibits the Board from ap- market, Applicants are the ninth largest commercial proving an application by a bank holding company to banking organization, with deposits of $69.9 million, acquire a bank located outside the bank holding com- representing approximately 1.6 percent of the total pany's home state,2 unless the state where the bank to deposits in commercial banks in the market.5 The be acquired is located has specifically authorized the Winter Park Bank, Kissimmee Bank and Longwood acquisition by language to that effect and not merely Bank together are the seventh largest commercial by implication. The Board has previously determined banking organization in the market, with deposits of that Florida has by statute expressly authorized a $184.6 million, representing 4.3 percent of the deposits Georgia bank holding company, such as C&S Georgia, in commercial banks in the market. Upon consummato acquire a Florida bank or bank holding company.3 tion of the proposal, Applicants would become the Accordingly, approval of Applicants' proposal to ac- fifth largest commercial banking organization in the quire banks in Florida is not barred by the Douglas market and would control approximately 6 percent of Amendment. the total deposits in commercial banks in the market. C&S Florida is the eighth largest commercial bank- The Orlando market has a four-firm concentration ing organization in Florida, with eleven subsidiary ratio of 76.1 percent and is considered highly concenbanks in Florida that control aggregate deposits of trated. The Herfindahl-Hirschman Index ("HHI") for approximately $3.4 billion, representing 4.7 percent of the market is 2290 and would increase by 15 points to the total deposits in commercial banks in Florida.4 2305 upon consummation of the proposal. Because of C&S Georgia is the largest commercial banking orga- the small increase in the HHI, this acquisition would nization in Georgia and controls aggregate deposits of not be subject to challenge by the Department of approximately $6.1 billion, representing 17.6 percent Justice under its merger guidelines.6 Moreover, nuof the total deposits in commercial banks in that state. merous other commercial banking organizations C&S-South Carolina is the second largest commercial would remain in the market after consummation of the banking organization in South Carolina, with one proposal. Based upon the above considerations, the subsidiary bank that holds deposits of approximately Board concludes that consummation of the proposal is $2.4 billion, representing 22.3 percent of the total not likely to substantially lessen competition in the deposits in commercial banks in South Carolina. The Orlando banking market. Banks to be acquired are some of the smaller institu- Applicants and Sanibel Bank compete directly in the Fort Myers banking market.7 Applicants are the largest commercial banking organization in the market, with total deposits of $671.4 million, representing 36.3 1. The Board received a comment from Mr. Rancy F. Snyder that challenged Applicants' record of complying with the Community Reinvestment Act and reported Applicants' violation of the Florida Consumer Finance Act. Fla. Stat. Ann. chap. 687. The Board has 5. The Orlando banking market is defined as Orange County, plus reviewed Florida law and Applicants' compliance with the Communi- Seminole and Osceola Counties, exlcuding the towns of Oviedo and ty Reinvestment Act. After careful consideration of the protest and all Sanford. the facts of record, including the corrections instituted by Applicants, 6. Under the revised Department of Justice Merger Guidelines (49 the Board concludes that the protest does not support a finding of Federal Register 26,283 (June 29, 1984)), any market in which the adverse banking factors. post-merger HHI is over 1800 is considered highly concentrated, and 2. A bank holding company's home state for purposes of the the Department is likely to challenge a merger that increases the HHI Douglas Amendment is that state in which the total deposits of its by more than 50 points, unless other facts of record indicate that the banking subsidiaries were largest on July 1, 1966, or on the date it merger is not likely substantially to lessen competition. The Departbecame a bank holding company, whichever date is later. 12 U.S.C. ment has informed the Board that a bank merger or acquisition § 1842(d). Applicants' home state is Georgia. generally will not be challenged (in the absence of other factors 3. Citizens and Southern Georgia Corporation, 71 FEDERAL RE- indicating anticompetitive effects) unless the post-merger HHI is at SERVE BULLETIN 728 (1985). See, Fla. Stat. Ann. § 658.295 (1984); least 1800 and the merger increases the HHI by at least 200 points. Ga. Code Ann. §§ 7-1-620 to 7-1-625 (Supp. 1985). 7. The Fort Myers banking market is approximated by Lee County, 4. State data are as of December 31, 1985. Florida. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 1987 percent of the total deposits in the commercial banks transactions shall not be consummated before the in the market. Sanibel Bank is the sixth largest com- thirtieth calendar day following the effective date of mercial banking organization in the market, with de- this Order, or later than three months after the effecposits of $172.4 million, representing 3.9 percent of the tive date of this Order, unless such period is extended total deposits in commercial banks in the market. for good cause by the Board or the Federal Reserve After consummation of the proposal, Applicants' Bank of Atlanta, pursuant to delegated authority. share of the deposits in commercial banks in the By order of the Board of Governors, effective market would be 40.2 percent. The share of deposits November 4, 1986. held by the four largest commercial banking organizations in the market would increase from 76.5 percent Voting for this action: Vice Chairman Johnson and Goverto 80.4 percent and the HHI would increase 283 points nors Rice, Seger, Angell, and Heller. Absent and not voting: to 2355. Chairman Volcker and Governor Wallich. Although consummation of the proposal would eliminate some existing competition between Applicants JAMES MCAFEE and Sanibel Bank in the Fort Myers market, numerous [SEAL] Associate Secretary of the Board other commercial banking organizations would remain as competitors after consummation of the proposal. In addition, the Board has considered the presence and Continental Illinois Corporation competition afforded by thrift institutions in its analy- Chicago, Illinois sis of this proposal.8 Twenty thrift institutions compete with commercial banks in the Ft. Myers banking Order Approving Acquisition of Banks and a Bank market and account for 44.8 percent of the total Holding Company deposits in the market. Thrift institutions already exert a considerable competitive influence in the market as Continental Illinois Corporation ("Continental" or providers of NOW accounts and consumer loans. In "Applicant"), Chicago, Illinois, a bank holding comaddition, most of these institutions provide commer- pany within the meaning of the Bank Holding Compacial and industrial loans, as well as traditional thrift ny Act of 1956, as amended ("BHC Act" or "Act") services. Based upon the above considerations, the (12 U.S.C. § 1841 et seq.), has applied for the Board's Board concludes that consummation of the proposal is approval under section 3(a)(3) of the Act (12 U.S.C. not likely substantially to lessen competition in the Ft. § 1842(a)(3)) to acquire First National Bank of Deer- Myers banking market.9 field ("Deerfield Bank"), Deerfield, Illinois; The First The financial and managerial resources of Appli- National Bank of Western Springs ("Western Springs cants, its subsidiaries, and Banks are consistent with Bank"), Western Springs, Illinois; and First Suburban approval. Considerations relating to the convenience Bank of Olympia Fields, Olympia Fields, Illinois and needs of the communities to be served are also ("Olympia Fields Bank") through the latter's parent consistent with approval. Based on the foregoing and holding company, South Suburban Bancorp, Inc. other facts of record, the Board has determined that Notice of the applications, affording an opportunity the proposed acquisitions are in the public interest and for interested persons to submit comments, has been that the applications should be, and hereby are, ap- given in accordance with section 3(b) of the Act. The proved. time for filing comments has expired, and the Board On the basis of the record, the applications are has considered the applications and all comments approved for the reasons summarized above. The received, including the comments submitted at the September 19, 1986, public meeting on these applications, in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). 8. The board has previously indicated that thrift institutions have Applicant is the second largest commercial banking become, or have the potential to become, major competitors of commercial banks. National City Corporation, 70 FEDERAL RESERVE organization in Illinois, controlling total domestic de- BULLETIN 743 (1984); NCNB Corporation, 70 FEDERAL RESERVE posits of approximately $8.9 billion, representing 8.7 BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL percent of total deposits of commercial banks in RESERVE BULLETIN 802 (1983); First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). Illinois.1 Deerfield Bank (deposits of $58.6 million), 9. If 50 percent of deposits held by thrift institutions in the Ft. Western Springs Bank (with $65.7 million in deposits), Myers banking market were included in the calculation of market and Olympia Fields Bank (deposits of $31.5 million) concentration, the share of total deposits held by the four largest organizations in the market would be 52.8 percent. Applicants' market share would decrease by 11.6 percentage points to 28.6 percent and the HHI would increase by 143 points to 1305 upon consummation of the proposal. 1. Deposit data are as of June 30, 1985. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 47 control individually and in the aggregate less than 1 issues raised by the commenters, including the public percent of total deposits in commercial banks in Illi- policy concerns expressed by the commenters regardnois. Upon consummation of the acquisition, Appli- ing the Federal Deposit Insurance Corporation's cant would remain the second largest banking organi- ("FDIC") ongoing assistance agreement with Applization in Illinois, with deposits of $9 billion, cant. In particular, certain commenters have objected representing 8.8 percent of total deposits in commer- to: the propriety of Applicant's proposed expansion cial banks in Illinois. plans while the institution is still funded in part by the Applicant's subsidiary banks compete with the FDIC; the suspension of FDIC insurance premium banks to be acquired in the only market in which the rebates, which certain commenters contend was latter operate, the Chicago banking market.2 Applicant caused in whole or in part by the necessity to provide is the second largest of 279 commercial banking orga- assistance to Continental; and the issue of unfair nizations in the Chicago market, where its subsidiary competition with what certain commenters have charbanks control domestic deposits of $8.9 billion, repre- acterized as the unlimited financial resources of a senting 13.3 percent of total deposits in commercial nationalized bank. On the basis of these public policy banks in the market. The banks to be acquired are considerations, the commenters have requested that among the smaller commercial banking organizations the Board deny these applications. in the market, controlling domestic deposits of $155.8 Continental's new management has demonstrated a million, representing 0.24 percent of total deposits in capacity to run Continental in a satisfactory manner. commercial banks in the market. Upon consummation Based on normal measures, including the investment of these acquisitions, Applicant would remain the by the FDIC in 1984, Continental possesses adequate second largest commercial banking organization in the capital in terms of other similarly sized and situated Chicago market and would control approximately 13.6 bank holding companies. Moreover, no competitive percent of total deposits in commercial banks in the issues within the scope of section 3 of the BHC Act are market. raised by the proposed acquisitions. In that sense, all The Chicago market is, and would continue to be the statutory factors required to be considered under after consummation of the proposed acquisitions, an the Act are satisfied. unconcentrated market.3 Moreover, a large number of The comments to these applications, however, raise commercial banking organizations would remain in the significant issues of public policy, outlined above, Chicago market after the proposed acquisitions. On which are not susceptible to easy resolution. On the basis of these and all other facts of record, the balance, the Board believes that public policy consid- Board concludes that consummation of these acquisi- erations weigh in favor of approval. These applications tions would not have a significant adverse effect on represent a reasonable interim step toward the banking existing competition in the Chicago market. Accord- regulators' agreed goal of restoring Continental to a ingly, competitive factors are consistent with approval competitive private status consistent with a business of the applications. plan established by management and subject to review by the FDIC, the Comptroller of the Currency, and the Public Meeting Board. The commenters' concerns in essence involve the In acting on these applications, the Board has also propriety of Continental's proposed expansion plans reviewed those issues raised by the commenters to while still receiving FDIC assistance. Under the Fedthese proposed acquisitions. At the request of certain eral Deposit Insurance Act ("FDI Act"), however, of these commenters, a public meeting was held at the Congress clearly contemplated and provided for FDIC Chicago Reserve Bank during which additional testi- assistance to financially troubled, open banks, includmony was received into the record regarding the ing assistance through the purchase by the FDIC of applications. The Board has carefully reviewed the securities in a troubled banking organization, as was done in this case. The standard under which FDIC assistance may be provided, moreover, clearly contemplates that FDIC assistance is intended either to maintain a bank's service to the community or, in the 2. The Chicago banking market comprises Cook, Lake and DuPage case of a closed bank, to restore the bank to normal Counties, all in Illinois. 3. Consummation of the proposed transaction would increase the operation. market's Herfindahl-Hirschman Index ("HHI") by 6 points, from 715 In this instance, the FDIC made the requisite findto 721. The market is considered unconcentrated under the Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), ings required by the FDI Act, specifically that: the and the increase in the HHI resulting from the transaction is not within continued operation of Continental was essential to the parameters the Department of Justice has stated are likely to result provide adequate banking services in its community, in its challenging the transaction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 1987 the granting of assistance was in the best interest of the less, it is also well established that in specific and public and the depositors of Continental; and the limited circumstances government assistance for priassistance was granted to prevent the closing of Conti- vate enterprises can be appropriate, and that is clearly nental. The Board notes that there exists no statutory the case here with respect to FDIC assistance for a limitation in the FDI Act on the ability of a bank failing bank. Limitations on some activities of an receiving FDIC assistance to expand or otherwise to institution receiving government assistance, including compete with non-assisted banks on an equal basis. certain kinds of aggressive expansion or risk taking, Implicit in the provision of FDIC open-bank assis- may be appropriate in some situations. The particular tance, with no other statutory restraints imposed, is applications involved here do not cross these particuthe conclusion that Congress intended that assisted lar thresholds of concern. The limited geographic banks would function normally, thereby assisting the expansion permitted by the proposed acquisitions, FDIC in its attempts to minimize any potential loss as consistent with changes in Illinois law, is in accorda result of the assistance provided, and enabling the ance with normal and prudent banking practices, and assisted institution to continue to provide service to its takes place in the context of an overall substantial community. Indeed, as noted, the FDI Act contem- downsizing of the institution. The proposed applicaplates that FDIC assistance is for the purpose of tions would clearly further the stated goals of the FDI Act and regulators' announced intention in carrying restoring a closed bank to "normal operation." out the mandate of that Act; that is, of restoring The applications before the Board are well within Continental to a "viable, self-financing entity."4 the scope of normal operations for Continental as compared to the activities of other area banks and with Accordingly, based upon a review of the record respect to its present financial standing. Recent under the statutory factors set forth in the BHC Act, changes in Illinois banking law have allowed banking the Board finds that the financial and managerial organizations in Illinois and the Midwest to expand in resources and future prospects of Applicant, its sub- Illinois by acquiring existing banks. As a result, large sidiary banks, and the banks to be acquired, are banking organizations in the City of Chicago and other consistent with approval. Considerations relating to markets in the area have expanded, and continue to the convenience and needs of the communities to be expand, into the Chicago suburbs. Indeed, Continen- served also are consistent with approval of the applicatal's expansion as represented by these applications is tions. rather modest in comparison to recently completed Based upon the foregoing and other facts of record, and proposed acquisitions by others. Also, it is impor- including its resolution of those issues of public policy tant to note that since the Applicant received assis- raised by the commenters to these proposals, the tance from the FDIC in 1984 its financial condition has Board has determined that the applications should be significantly improved, with this improvement sig- and hereby are approved. These transactions shall not nalled in part by a decrease in its reliance on pur- be consummated before the thirtieth calendar day chased funds. following the effective date of this Order, or later than Applicant has stated that these acquisitions would three months after the effective date of this Order, render Continental a more attractive and stronger unless such period is extended for good cause by the financial institution and indeed hasten its return to Board or by the Federal Reserve Bank of Chicago, private ownership. In this regard, the Board notes that acting pursuant to delegated authority. the process of privatization has already begun with the By order of the Board of Governors, effective announcement by the FDIC on October 16, 1986, of its November 4, 1986. intention to sell approximately 30 percent of its interest in Continental before the end of 1986. Thus, these Voting for this action: Chairman Volcker and Governors acquisitions appear well within the scope of normal Johnson and Seger. Voting against this action: Governor Angell. Abstaining from this action: Governors Rice and operations for Continental while enhancing the sched- Heller. Absent and not voting: Governor Wallich. ule for returning the organization to private ownership. The burden of the commenters case is that the JAMES MCAFEE federal assistance provided to Continental provides an [SEAL] Associate Secretary of the Board unfair competitive advantage and that expansion activities of a company receiving this assistance should be restrained. It is, of course, fundamental that governmental assistance to particular private enterprises ordinarily be avoided to assure that competition is 4. Permanent Assistance Program for Continental Illinois Bank and Trust Company (Joint Press Release of OCC, FDIC, and Federal undistorted by government intervention. Neverthe- Reserve Board) at 1 (July 26, 1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 Dissenting Statement of Governor Angell of the total deposits in commercial banks in the state.3 Bank is the 77th largest commercial banking organiza- I believe that, as a matter of public policy, any tion in Indiana and controls deposits of $105.7 million, expansion by an FDIC-assisted banking organization representing 0.3 percent of the total deposits in comshould take place only after restoration of the institu- mercial banks in Indiana. Because Applicant does not tion to full private ownership. Accordingly, I vote to operate in Indiana, consummation of the proposal deny these applications. would have no effect on the concentration of banking November 4, 1986 resources in Indiana. Applicant and Bank compete directly in the Louis- First Kentucky National Corporation ville, Kentucky, banking market.4 Applicant is the Louisville, Kentucky second largest commercial banking organization in the market, with total deposits of $2.5 billion, representing Order Approving Acquisition of a Bank 31.7 percent of the total deposits in commercial banks in the market. Bank is the seventh largest commercial First Kentucky National Corporation, Louisville, banking organization in the market, controlling 1.4 Kentucky, a bank holding company within the mean- percent of the total deposits in commercial banks in ing of the Bank Holding Company Act ("Act") the market. After consummation of the proposal, (12 U.S.C. § 1841 et seq.), has applied for the Board's Applicant's share of the deposits in commercial banks approval under section 3 of the Act (12 U. S. C. § 1842) in the market would be 33.1 percent. The share of to acquire 100 percent of the voting shares of Mutual deposits held by the four largest commercial banking Trust Bank, New Albany, Indiana ("Bank"). organizations in the market would increase from 88.9 Notice of the application, affording interested per- percent to 90.3 percent and the Herfindahl-Hirschman sons an opportunity to submit comments, has been Index ("HHI") would increase by 86 points to 2582.5 given in accordance with section 3(b) of the Act Although consummation of the proposal would elim- (51 Federal Register 29,309 (August 15, 1986)). The inate some existing competition between Applicant time for filing comments has expired, and the Board and Bank in the Louisville, Kentucky, market, numerhas considered the application and all comments re- ous other commercial banking organizations would ceived in light of the factors set forth in section 3(c) of remain as competitors after consummation of the the Act. proposal. In addition, the Board has considered the Section 3(d) of the Act (12 U.S.C. § 1842(d)), the presence and competition afforded by thrift institu- Douglas Amendment, prohibits the Board from ap- tions in its analysis of this proposal.6 Eight thrift proving an application by a bank holding company to institutions compete with commercial banks in the acquire a bank located outside the bank holding com- Louisville banking market and account for 22.7 perpany's home state,1 unless the state where the bank to cent of the total deposits in the market. Thrift institube acquired is located has specifically authorized the tions already exert a considerable competitive influacquisition by language to that effect and not merely by implication. The Board has previously determined that Indiana has by statute expressly authorized a Kentucky bank holding company, such as Applicant, 3. Deposit data refer to total domestic deposits as of December 31, to acquire an Indiana bank or bank holding company, 1985, and reflect bank holding company acquisitions approved as of such as Bank.2 Accordingly, approval of Applicant's August 25, 1986. 4. The Louisville banking market is approximated by the Louisproposal to acquire Bank is not barred by the Douglas ville, Kentucky RMA plus the non-RMA portion of Clark County, Amendment. Indiana. Applicant, the largest commercial banking organiza- 5. Under the revised Department of Justice Merger Guidelines (49 Federal Register 26,823 (June 29, 1984)) ("Guidelines"), a market tion in Kentucky, controls six subsidiary banks with in which the post-merger HHI is over 1800 is considered highly total deposits of $3.3 billion, representing 13.8 percent concentrated. In such a market, the Department is likely to challenge a merger that produces an increase in the HHI of more than 50 points. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by at least 200 points. 1. A bank holding company's home state for purposes of the 6. The Board has previously indicated that thrift institutions have Douglas Amendment is that state in which the total deposits of its become, or have the potential to become, major competitors of banking subsidiaries were largest on July 1, 1966, or on the date it commercial banks. National City Corporation, 70 FEDERAL RESERVE became a bank holding company, whichever date is later. 12 U.S.C. BULLETIN 743 (1984); NCNB Corporation, 70 FEDERAL RESERVE § 1842(d). BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL 2. Citizens Fidelity Corporation, 72 FEDERAL RESERVE BULLETIN RESERVE BULLETIN 802 (1983); First Tennessee National Corpora- 576 (1986); Ind. Code § 28-2-15-18(e) (effective January 1, 1986). tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 1987 ence in the market as providers of NOW accounts and Notice of the application, affording an opportunity consumer loans. In addition, most of these institutions for interested persons to submit comments, has been provide commercial and industrial loans in addition to given in accordance with section 3 of the Act. The time traditional thrift services. Based upon the above con- for filing comments has expired, and the Board has siderations, the Board concludes that consummation considered the application and all comments received of the proposal is not likely substantially to lessen in light of the factors set forth in section 3(c) of the competition in the Louisville banking market.7 Act. The financial and managerial resources of Appli- Applicant, a one-bank holding company, is the cant, its subsidiaries and Bank are consistent with seventh largest commercial banking organization in approval. Considerations relating to the convenience the District of Columbia ("District"). Its subsidiary and needs of the community to be served are also bank controls total domestic deposits of $360.7 milconsistent with approval. Based on the foregoing and lion, representing 3.5 percent of the total deposits in other facts of record, the Board has determined that commercial banks in the District. Bank is the 18th the proposed acquisition is in the public interest and largest commercial banking organization in Virginia, that the application should be, and hereby is, ap- controlling total domestic deposits of $114.5 million, proved. representing 0.3 percent of the total deposits in com- On the basis of the record, the application is ap- mercial banks in Virginia.1 proved for the reasons summarized above. The trans- Section 3(d) of the Act (12 U.S.C. § 1842(d)), the action shall not be consummated before the thirtieth Douglas Amendment, prohibits the Board from apcalendar day following the effective date of this Order, proving an application by a bank holding company to or later than three months after the effective date of acquire control of any bank located outside of the this Order, unless such period is extended for good holding company's home state,2 unless such acquisicause by the Board or the Federal Reserve Bank of St. tion is "specifically authorized by the statute laws of Louis pursuant to delegated authority. the state in which such bank is located, by language to By order of the Board of Governors, effective that effect and not merely by implication."3 November 7, 1986. The statute laws of Virginia authorize the acquisition of a bank or bank holding company in Virginia by Voting for this action: Chairman Volcker and Governors a bank holding company located in another state in a Johnson, Rice, Seger, Angell, and Heller. Absent and not defined southeastern region, including the District, if voting: Governor Wallich. the laws of that state permit Virginia bank holding companies to acquire banks and bank holding compa- JAMES MCAFEE nies in that state. The District has enacted a similar [SEAL] Associate Secretary of the Board regional interstate banking statute, which permits the acquisition of a District bank holding company or bank by a bank holding company located in Virginia.4 James Madison Limited The Virginia Commissioner of Financial Institutions Washington, D.C. has determined that the District statute satisfies the requirements of Virginia Code § 6.1-399.5 Based on Order Approving Acquisition of a Bank James Madison Limited, Washington, D.C., a bank holding company within the meaning of the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) 1. Deposit data are as of December 31, 1985. 2. A bank holding company's home state is that state in which the ("Act"), has applied for the Board's approval under operations of the bank holding company's banking subsidiaries were section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to principally conducted on July 1, 1966, or the date on which the acquire the successor by merger to The McLean Bank, company became a bank holding company, whichever is later. Applicant's home state is the District of Columbia. McLean, Virginia ("Bank"). 3. Virginia Code § 6.1-398 et seq. (Supp. 1985). The states in the region defined by Virginia law include Alabama, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia, in addition to the District of Columbia. 7. If 50 percent of deposits held by thrift institutions in the 4. District of Columbia Regional Interstate Banking Act of 1985, Louisville banking market were included in the calculation of market 1985 D.C. Law 6-63, as amended by the District of Columbia Regional concentration, the share of total deposits held by the four largest Interstate Banking Act of 1985 Amendments Act of 1985, D.C. Law 6organizations in the market would be 77.9 percent. Applicant's market 276. share would increase by 1.2 percentage points to 28.8 percent and the 5. This determination was made on October 31, 1986, in connection HHI would increase by 66 points to 1969 upon consummation of the with an application by Riggs National Corporation, Washington, D.C. proposal. to acquire Guaranty Bank and Trust Company, Fairfax, Virginia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 the foregoing, the Board has determined that the tion that Applicant obtain the approval of the Virginia proposed acquisition is specifically authorized by the Commissioner of Financial Institutions pursuant to statute laws of Virginia and is thus permissible under section 6.1-399 of the Virginia Code. The acquisition the Douglas Amendment, subject to Applicant's re- of Bank shall not be consummated before the thirtieth ceipt of the approval of the Virginia Commissioner of calendar day following the effective date of the Order, Financial Institutions pursuant to Virginia Code or later than three months after the effective date of § 6.1-399. The Board's Order is specifically condi- the Order, unless such period is extended for good tioned upon satisfaction of the state regulatory approv- cause by the Board or by the Federal Reserve Bank of al requirement. Richmond, acting pursuant to delegated authority. Applicant's subsidiary bank competes with Bank in By order of the Board of Governors, effective the Washington, D.C., banking market.6 Applicant is November 3, 1986. the 14th largest of 70 commercial banking organiza- Voting for this action: Vice Chairman Johnson and Govertions in the Washington, D.C., market, and controls nors Rice, Seger, Angell, and Heller. Absent and not voting: deposits of $360.7 million, representing 1.4 percent of Chairman Volcker and Governor Wallich. the total deposits in commercial banks therein.7 Bank is the 26th largest commercial banking organization in JAMES MCAFEE the market, controlling domestic deposits of $98.0 [SEAL] Associate Secretary of the Board million, representing 0.4 percent of the total deposits in commercial banks in the market. Upon acquisition of Bank, Applicant would become the 12th largest Keystone Financial, Inc. commercial banking organization in the Washington, State College, Pennsylvania D.C., market and would control 1.8 percent of the total deposits in commercial banks in the market. Order Approving Merger of Bank Holding The Washington, D.C., banking market is uncon- Companies centrated, and would remain unconcentrated after consummation of the proposed acquisition. The share Keystone Financial, Inc., State College, Pennsylvaof deposits held by the four largest commercial bank- nia, a bank holding company within the meaning of the ing organizations in the market is 50.4 percent and the Bank Holding Company Act of 1956, as amended Herfindahl-Hirschman Index for the market is 816.8 ("BHC Act") (12 U.S.C. § 1841 et seq.), has applied Moreover, a large number of commercial banking for the Board's approval under section 3(a)(5) of the organizations would remain in the Washington, D.C., Act (12 U.S.C. § 1842 (a)(5)) to merge with Pennsylvamarket after the proposed acquisition. On the basis of nia National Financial Corp., Harrisburg, Pennsylvathese and all other facts of record, the Board con- nia ("PNFC"), and thereby indirectly to acquire Penncludes that consummation of the acquisition would not sylvania National Bank and Trust Company, have a significant adverse effect on existing competi- Pottsville, Pennsylvania ("PNB"), and Hamburg Savtion in the Washington, D.C., market. ings and Trust Company, Hamburg, Pennsylvania The financial and managerial resources and future ("Hamburg"). prospects of Applicant, Bank, and their respective Notice of the application, affording an opportunity subsidiaries are consistent with approval of the appli- for interested persons to submit comments, has been cation. Considerations relating to the convenience and given in accordance with section 3(b) of the BHC Act. needs of the communities to be served are also consis- The time for filing comments has expired, and the tent with approval. Board has considered the application and all com- Based on the foregoing and other facts of record, the ments received in light of the factors set forth in Board has determined that this application should be, section 3(c) of the BHC Act (12 U.S.C. § 1842 (c)). and hereby is, approved, subject to the express condi- Applicant is the 13th largest commercial banking organization in the state, holding deposits of $1.2 billion, representing 1.3 percent of total deposits in commercial banks in the state.1 PNFC is the 23rd largest commercial banking organization in the state, 6. The Washington, D.C., banking market is defined as the Washcontrolling deposits of $559.1 million, representing 0.6 ington, D.C., Ranally Metropolitan Area, which comprises the District of Columbia and the surrounding suburban areas of Virginia and Maryland. 7. Market data are as of June 30, 1985. 8. Consummation of the proposed transaction would increase the market's Herfindahl-Hirschman Index by 1 point. Thus, the transaction is not likely to be challenged by the Department of Justice under 1. All banking data are as of December 31, 1985, unless otherwise its merger guidelines, 49 Federal Register 26,823 (1984). specified. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 1987 percent of total deposits in commercial banks in the representing 7.6 percent of the total deposits in comstate. Upon consummation of this proposal, Applicant mercial banks in the market. The Northumberland would become the 12th largest banking organization in banking market is considered to be moderately conthe state and would control less than 2 percent of centrated, with the four largest commercial banks deposits in commercial banks in the state. Consumma- controlling 62.9 percent of the deposits. The HHI for tion of the proposal would not have a significant the market is 1404, and would increase by 332 points adverse effect on the concentration of banking re- upon consummation of the proposal. sources in the state. Although consummation of the proposal would elim- Applicant's subsidiary banks compete directly with inate some existing competition between Applicant PNFC's subsidiary banks in two markets: the Scran- and PNFC in the Northumberland banking market, ton/Wilkes-Barre and the Northumberland County numerous other commercial banking organizations markets. In the ScrantonAVilkes-Barre market,2 Ap- would remain as competitors in the market. In addiplicant is the 33rd largest of 37 commercial banking tion, the presence of four thrift institutions, controlling organizations, with total deposits of $20 million, repre- approximately 20.9 percent of the market's total desenting 0.3 percent of total deposits in commercial posits, mitigates the anticompetitive effects of the banks in the market.3 PNFC is the 35th largest com- transaction.6 Thrift institutions already exert a considmercial banking organization in the market, with total erable competitive influence in the market as providdeposits of $7.2 million, representing 0.1 percent of ers of NOW accounts and consumer loans. Based total deposits in commercial banks in the market. The upon the above considerations, the Board concludes ScrantonAVilkes-Barre market is considered moder- that consummation of the proposal is not likely to ately concentrated, with the four largest banks con- substantially lessen competition in the Northumbertrolling 58.2 percent of the deposits in commercial land County banking market.7 banks in the market. The Herfindahl-Hirschman In- In its evaluation of Applicant's managerial redex ("HHI") for the market is 1027, and would sources, the Board has considered certain violations increase by 1 point upon consummation of the propos- by PNFC's lead bank, PNB, of the Currency and al.4 Based upon the number of commercial banking Foreign Transactions Reporting Act ("CFTRA") and organizations that would remain in the market after the regulations thereunder.8 PNB has taken remedial consummation and the small increase in Applicant's action as a result of the discovery of these violations. market share, the Board concludes that consummation Applicant has committed to implement its compliance of the proposal is not likely to substantially lessen program at PNB within 30 days of consummation and competition in the Scranton/Wilkes-Barre market. to undertake a compliance review at PNB within 120 In the Northumberland County market,5 Applicant days of consummation. is the second largest of 14 commercial banking organi- Based on the foregoing and other facts of record, the zations, with total deposits of $136.2 million, repre- Board concludes that the financial and managerial senting 21.8 percent of the deposits in commercial resources and future prospects of Applicant and banks in the market. PNFC's subsidiary banks rank PNFC are considered satisfactory and consistent with fourth in the market, with $47.6 million in deposits, approval. In considering the convenience and needs of the communities to be served, the Board has considered the records of PNFC's bank subsidiaries under the 2. The Scranton/Wilkes Barre market is defined by the Scranton/ Wilkes Barre Metropolitan Statistical Area ("MSA") and includes Luzerne, Lackawanna, Columbia, Monroe, and Wyoming counties in Pennsylvania. 3. Market data are as of June 30, 1985, and account for all 6. The Board has previously indicated that thrift institutions have acquisitions that have been consummated as of July 31, 1986. become, or have the potential to become, major competitors of 4. Under the revised Department of Justice Merger Guidelines commercial banks. National City Corporation, 70 FEDERAL RESERVE (49 Federal Register 26,823 (June 29, 1984)), any market in which the BULLETIN 743 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE post-merger HHI is between 1000 and 1800 is considered moderately BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL concentrated, and the Department is likely to challenge a merger that RESERVE BULLETIN 802 (1983); First Tennessee National Corporaincreases the HHI by more than 100 points, unless other facts of tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). records indicate that the merger is not likely substantially to lessen 7. If 50 percent of deposits held by thrift institutions in the competition. The Department has informed the Board that a bank Northumberland banking market were included in the calculation of merger or acquisition generally will not be challenged (in the absence market concentration, the share of total deposits held by the four of other factors indicating anticompetitive effects) unless the post- largest organizations in the market would be 59.3 percent. Applicant merger HHI is at least 1800 and the merger increases the HHI by at would control 19.3 percent of the market's deposits and PNFC would least 200 points. control 6.8 percent of the market's deposits. The HHI would increase 5. The Northumberland market is approximated by Northumber- by 263 points to 1474. land County, Pennsylvania. 8. 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 53 Community Reinvestment Act ("CRA") (12 U.S.C. The record supports a finding that the CRA records § 2901 et seq.). The CRA requires federal bank super- of the banking subsidiaries of Applicant and PNFC are visory agencies to encourage financial institutions to consistent with approval of the application. The Office help meet the credit needs of the local communities in of the Comptroller of the Currency ("OCC") has which they are chartered, consistent with the safe and previously determined that the CRA record of the sound operation of such institutions. To accomplish subsidiary banks of Applicant and PNFC are satisfacthis objective, the CRA requires the appropriate feder- tory. In addition, an analysis of Home Mortgage al banking agency to assess the records of banks in Disclosure Act data shows that PNB has a satisfactory meeting the credit needs of their entire communities, home mortgage lending record within the City of including low- and moderate-income neighborhoods, Harrisburg, in the surrounding area, and in the minorconsistent with their safe and sound operation, and to ity areas within the City of Harrisburg, for its size and take those records into account in its evaluation of market share. Finally, Applicant and PNB have shown bank holding company applications. a willingness to meet and engage in constructive With regard to PNB's CRA record, the Board has discussions with Protestant. considered the comments of the Harrisburg Fair Hous- Thus, based on all the facts of record, the Board ing Council, Inc., Harrisburg, Pennsylvania ("Protes- believes that the CRA records of the subsidiary banks tant"). In accordance with the Board's practice and of Applicant and PNFC are consistent with approval procedures for handling protested applications,9 the of this application. Board reviewed the CRA record of Applicant and Accordingly, based on all of the evidence, including PNFC's banking subsidiaries, the information provid- the commitments and representations by Applicant ed and allegations made by Protestant, and Appli- and PNB to the Board, the Board concludes that cant's response. convenience and needs considerations are consistent Protestant initially raised 37 issues concerning with approval of this application.10 PNB's CRA performance. After a series of private Based on the foregoing and other facts of record, the meetings between Protestant and PNB to discuss and Board has determined that the application should be, clarify the issues, only four points remain. PNB has and hereby is, approved. This transaction shall not be prepared a comprehensive proposal in response to consummated before the thirtieth calendar day follow- Protestant's concerns, which Applicant and PNB in- ing the effective date of this Order, or later than three tend to implement following consummation of the months after the effective date of this Order, unless merger. The proposal is a partnership between the such period is extended for good cause by the Board or parties, and includes many provisions responsive to by the Federal Reserve Bank of Philadelphia, acting Protestant's concerns, including: establishing flexible pursuant to delegated authority. credit standards; providing conventional and federally By order of the Board of Governors, effective sponsored or subsidized home mortgage loan pro- November 17, 1986. grams; offering credit-counseling services ; considering financing joint venture partnerships involving commu- Voting for this action: Chairman Volcker and Governors nity-based organizations; providing small business and Rice, Angell, and Heller. Absent and not voting: Governors SBA lending; establishing a community relations offi- Johnson, Wallich, and Seger. cer; marketing affirmatively PNB's lending programs; upgrading the Allison Hill branch office services; JAMES MCAFEE instituting a community review council with represen- [SEAL] Associate Secretary of the Board tatives of community organizations and PNB to review PNB's lending programs and implementation of various provisions of the proposal; and enhancing PNB's CRA compliance. This proposal is, in the Board's view, responsive to the issues raised by Protestant, and is more comprehensive in scope than many of the agreements that the Board has taken into consideration in previous cases involving CRA issues. 10. The Board has also considered Protestant's request for a public hearing. The Board finds that Protestant and Applicant have had ample opportunity to submit materials in order to clarify factual questions and that Protestant has not identified remaining material questions of fact that would render a hearing appropriate. In light of this and the representations and commitments made by Applicant in response to Protestant's comments, the Board has determined to deny 9. 12 C.F.R. § 262.25. Protestant's request for a public hearing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 1987 The Marine Corporation On April 30, 1986, Wisconsin enacted comprehen- Milwaukee, Wisconsin sive banking legislation that includes authority for bank holding companies in a region that includes Order Approving Acquisition of a Bank Holding Minnesota to acquire banks and bank holding compa- Company nies in Wisconsin. The Wisconsin statute specifically states that the interstate banking provisions do not The Marine Corporation, Milwaukee, Wisconsin apply until January 1, 1987.5 Based on the foregoing, ("Marine"), a bank holding company within the mean- the Board has determined, as required by the Douglas ing of the Bank Holding Company Act (12 U.S.C. Amendment, that, as of January 1, 1987, the proposed § 1841 et seq.) ("BHC Act") has applied for the acquisition is specifically authorized by the statute Board's approval under section 3(a)(3) of the BHC Act laws of Minnesota and is thus permissible under the (12 U.S.C. § 1842(a)(3)) to acquire Community State Douglas Amendment, subject to Applicant's obtaining Agency, Inc., Bloomington, Minnesota ("Compa- the approval required pursuant to section 48.93 of the ny"), and thereby indirectly acquire Community State Minnesota statutes. Bank of Bloomington, Minneapolis, Minnesota Marine is the third largest banking organization in ("Bank"). Wisconsin, operating 21 subsidiary banks with total Notice of the application, affording an opportunity deposits of $3.3 billion, representing approximately for interested persons to submit comments, has been 10.5 percent of the total deposits in commercial banks given in accordance with section 3(b) of the BHC Act. in Wisconsin.6 Company is the tenth largest banking The time for filing comments has expired, and the organization in Minnesota, operating one banking sub- Board has considered the application and all com- sidiary with total deposits of $161.8 million, representments received in light of the factors set forth in ing 0.5 percent of total deposits in commercial banks in section 3(c) of the BHC Act (12 U.S.C. § 1842(c)).1 Minnesota.7 Section 3(d) of the BHC Act, the Douglas Amend- Marine does not provide banking services in the ment (12 U.S.C. § 1842(d)), prohibits the Board from Minneapolis-St. Paul, Minnesota, banking market8 approving any application by a bank holding company where Bank competes, nor elsewhere in Minnesota. to acquire a bank located outside the holding compa- The Minnesota interstate banking statute permits ny's home state, unless such acquisition is "specifical- banking organizations from four states, including Wisly authorized by the statute laws of the State in which consin, to enter Minnesota, and, accordingly, there such bank is located, by language to that effect and not are numerous potential entrants into the state and into merely by implication."2 The statute laws of Minneso- the Minneapolis market. Based on the foregoing, the ta authorize bank holding companies located in "recip- Board concludes that the proposal would not have any rocating states" to acquire a Minnesota bank with the adverse effects on the concentration of banking reapproval of the Commissioner of Commerce of the sources in any relevant area, and that the proposal State of Minnesota.3 A "reciprocating state" is de- would not result in the elimination of existing or fined as a state that authorizes the acquisition of banks probable future competition in any relevant market. in that state by a bank or bank holding company The financial and managerial resources and future located in Minnesota "under conditions substantially prospects of Marine, Company and Bank are considsimilar to those imposed by Minnesota" as determined ered satisfactory and consistent with approval. Conby the Minnesota Commissioner of Commerce, and is siderations relating to the convenience and needs of limited to Iowa, North Dakota, South Dakota, and the communities to be served also are consistent with Wisconsin.4 approval of the application. Based on the foregoing and other facts of record, the Board has determined that the application should be, and hereby is, approved, subject to the express condi- 1. The Board received a protest from the Harambee Ombudsman tion that Applicant obtain the approval of the Minne- Project, Inc. ("Protestant"), a community group, which challenged sota Commissioner of Commerce pursuant to section Applicant's record of meeting the credit needs of its community under the Community Reinvestment Act. Protestant withdrew its protest after several meetings with Applicant which resulted in an agreement by Applicant to institute a comprehensive program of services in Protestant's area. 2. A bank holding company's home state is that state in which the 5. Wis. Stat. Ann. § 221.58(8) (West 1982 & Supp. 1986). operations of the bank holding company's banking subsidiaries are 6. Wisconsin banking data are as of December 31, 1985. principally conducted on July 1, 1966, or the date on which the 7. Minnesota banking data are as of June 30, 1985. company became a bank holding company, whichever is later. Appli- 8. The Minneapolis-St. Paul banking market is approximated by the cant's home state is Wisconsin. Minneapolis-St. Paul RMA, adjusted to include all of Carver and Scott 3. Minn. Stat. § 48.90 et seq. (1986). Counties, Minnesota, and Lanesburgh Township in LeSueur County, 4. Minn. Stat. § 48.92:7. Minnesota. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 48.93 of the Minnesota statutes, and the proposal not Rainier Bancorporation be consummated before January 1, 1987, the effective Seattle, Washington date of the Wisconsin statute. This transaction shall also not be consummated before the thirtieth calendar Order Approving Acquisition of Bank day following the effective date of this Order, or later than three months after the effective date of this Rainier Bancorporation, Seattle, Washington, a bank Order, unless such period is extended for good cause holding company within the meaning of the Bank by the Board or by the Federal Reserve Bank of Holding Company Act ("Act"), 12 U.S.C. §§ 1841- Chicago, acting pursuant to delegated authority. 48, has applied for the Board's approval under section By order of the Board of Governors, effective 3(a)(3) of the Act, 12 U.S.C. § 1842(a)(3), to acquire November 26, 1986. all of the voting shares of Mount Hood Security Bank, Gresham, Oregon. Voting for this action: Vice Chairman Johnson and Gover- Notice of the application, affording interested pernors Rice, Seger, and Heller. Absent and not voting: Chair- sons an opportunity to submit comments, has been man Volcker and Governors Wallich and Angell. given in accordance with section 3(b) of the Act. The time for filing comments has expired, and the Board BARBARA R. LOWREY has considered the application and all comments re- [SEAL] Associate Secretary of the Board ceived in light of the factors set forth in section 3(c) of the Act. 12 U.S.C. § 1842(c). On the basis of the record, the application is approved for the reasons set forth in the Board's Statement, which will be released at a later date. The One Bancorp By order of the Board of Governors, effective Portland, Maine November 14, 1986. Order Approving Acquisition of Bank Voting for this action: Chairman Volcker and Governors Johnson, Rice, and Angell. Absent and not voting: Governors The One Bancorp, Portland, Maine, has applied for Wallich, Seger, and Heller. the Board's approval under section 3(a)(3) of the Bank Holding Company Act ("Act") (12 U.S.C. JAMES MCAFEE § 1842(a)(3)), to acquire all of the outstanding voting [SEAL] Associate Secretary of the Board shares of the successor by merger to the Bank of Hartford, Inc., S.A., Hartford, Connecticut ("Bank"). STATEMENT BY BOARD OF GOVERNORS OF THE Notice of the application, affording opportunity for FEDERAL RESERVE SYSTEM REGARDING THE interested persons to submit comments, has been APPLICATION OF RAINIER BANCORPORATION TO given in accordance with section 3(b) of the Act. The ACQUIRE MOUNT HOOD SECURITY BANK time for filing comments has expired, and the Board has considered the application and all comments re- By Order dated November 14, 1986, the Board apceived in light of the factors set forth in section 3(c) of proved the application of Rainier Bancorporation, the Act (12 U.S.C. § 1842(c)). Seattle, Washington, to acquire Mount Hood Security On the basis of the record, the application is ap- Bank, Gresham, Oregon ("Mount Hood Bank"), purproved for the reasons set forth in the Board's State- suant to section 3(a)(3) of the Bank Holding Company ment, which will be released at a later date. This Act ("BHC Act" or "Act"). 12 U.S.C. § 1842(a)(3). approval is subject to Applicant's compliance with all In this Statement the Board sets forth its reasons for state and federal requirements necessary for consum- approving the application. mation of the acquisition. Applicant's lead bank, Rainier National Bank, Seat- By order of the Board of Governors, effective tle, Washington ("Rainier Bank"), is the second larg- November 7, 1986. est commercial banking organization in Washington, with deposits of $5.4 billion, representing 22.7 percent Voting for this action: Chairman Volcker and Governors of the total deposits in commercial banks in the state.1 Johnson, Rice, Seger, Angell, and Heller. Absent and not voting: Governor Wallich. JAMES MCAFEE [SEAL] Associate Secretary of the Board 1. Statewide deposit data are as of June 30, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 1987 Mount Hood Bank is the thirty-fifth largest commer- Bank, Applicant would continue to be the ninth largest cial bank in Oregon, with deposits of $19 million, commercial banking organization in the market and representing 0.1 percent of the total deposits in com- would control 1.3 percent of the total deposits in mercial banks in the state. commercial banks in the market. Under section 3(d) of the BHC Act, the Douglas Although the Portland banking market is concentrat- Amendment, a bank holding company may not acquire ed, with a Herfindahl-Hirschman Index ("HHI") of a bank located outside of the bank holding company's 2419,4 the proposed acquisition would increase the home state unless the acquisition is "specifically au- HHI by less than 1 point. Moreover, 25 commercial thorized by the statute laws of the state in which such banking organizations would remain in the market bank is located, by language to that effect and not after the acquisition. Based on these and other facts of merely by implication."2 12 U.S.C. § 1842(d). An record, the Board concludes that the acquisition would Oregon statute that became effective on July 1, 1986, have no significant adverse effect on existing competiauthorizes a Washington bank holding company, with tion in the market. As there are numerous other the permission of the Oregon Banking Supervisor, to potential entrants into the market, the Board con- "acquire . . . the capital stock" of "a bank that has cludes that the acquisition would have no significant been engaged in the business of banking for . . . not adverse effect on probable future competition. less than three years prior to the effective date of the The financial and managerial resources and future acquisition," or of a phantom institution that "has prospects of Applicant and its subsidiary banks and of merged with or acquired . . . the capital stock" of such Mount Hood Bank are generally satisfactory and cona bank. Or. Rev. Stat. § 715.065(1); see id. sistent with approval of the application. §§ 706.005(29), 707.029(l)(c). There is no requirement In considering the convenience and needs of the of reciprocity. communities to be served, the Board has taken into Mount Hood Bank has been "engaged in the busi- account the records under the Community Reinvestness of banking" since 1982. Applicant would acquire ment Act ("CRA"), 12 U.S.C. §§ 2901-05, of Applithe bank's stock by having the bank merge into Rainier cant's subsidiary banks and of Mount Hood Bank. The Bank Oregon, N.A., a phantom institution wholly CRA requires the federal bank supervisory agencies to owned by Applicant. The Oregon Banking Supervisor encourage banks to help meet the credit needs of the approved the proposed acquisition on November 7, local communities in which they are chartered, con- 1986, expressly concluding that Applicant had "met sistent with the banks' safe and sound operation. To the criteria as set out in ORS 715.065 to control and that end, the CRA requires the appropriate bank operate [Mount Hood Bank] in a legal and proper supervisory agency to assess a bank's record in meetmanner." Accordingly, the Board concludes that the ing the credit needs of its entire community, including acquisition is specifically authorized by Oregon stat- low- and moderate-income neighborhoods, and reute, and permissible under the Douglas Amendment. quires the Board to take such records into account in Applicant competes with Mount Hood Bank in the evaluating a bank holding company's application to Portland, Oregon, banking market, the only market in acquire a bank. which Mount Hood Bank operates.3 Rainier Bank is In reviewing the CRA record of Rainier Bank, the the ninth largest of 26 commercial banking organiza- Board has considered the comments of two protesting tions in the market, with deposits of $63 million, community organizations, South End Seattle Commurepresenting 1.0 percent of the total deposits in com- nity Organization, and South East Effective Developmercial banks in the market. Mount Hood Bank is the ment, both of Seattle, Washington (together "Protesseventeenth largest commercial banking organization in the market, with deposits of $17 million, representing 0.3 percent of the total deposits in commercial 4. Under the revised Department of Justice Merger Guidelines, 49 banks in the market. Upon acquiring Mount Hood Federal Register 26,823 (1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. The Guidelines state that the Department is likely to challenge a merger that increases the HHI in such a market by more than 50 points unless other factors indicate that the merger will not substantially lessen competition. 2. A bank holding company's home state is the state in which the However, the Department has informed the Board that a bank merger operations of the bank holding company's subsidiary banks were generally will not be challenged (in the absence of other factors principally conducted on July 1, 1966, or on the date on which the indicating anticompetitive effect) unless the post-merger HHI is at company became a bank holding company, whichever is later. least 1800 and the merger increases the HHI by at least 200 points. 3. The Portland banking market is coextensive with the Portland, 5. Pursuant to section 262.3(e) of its Rules of Procedure, the Board Oregon, RMA. It consists of Multnomah County and parts of Clacka- has also considered similar comments by the Oregon State Public mas, Columbia, Marion, Washington, and Yamhill Counties, all in Interest Research Group, Portland, Oregon ("OSPIRG"), which were Oregon; and part of Clark County, Washington. Rainier Bank has a submitted after the close of the comment period. branch in the Washington portion of the market. Neither OSPIRG nor any other commenter has challenged the CRA Market data are as of June 30, 1985. record of Mount Hood Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 tants").5 Protestants have generally raised concerns gram of making loans guaranteed by the Small Busiabout whether Rainier Bank has been meeting the ness Administration, are important means of meeting needs of their neighborhood, the South End of Seattle the credit needs of the community. ("South End").6 In this connection, Applicant has also made a series In accordance with the Board's practice and proce- of commitments relating to matters such as lending in dures for handling protested applications, 12 C.F.R. the South End, lending in low- and moderate-income § 262.25, the Board has reviewed Rainier Bank's CRA communities, expanding and marketing programs such record, the information provided and allegations made as the Home Loan Center and Community Business by Protestants, and Applicant's responses. The Board Loan Center, implementing an HMDA-type reporting notes that Applicant and Protestants met on July 14, system for loans made by Applicant's nonbank subsid- 22, and 29, 1986, and met with officers of the Federal iaries, and continuing to provide low-cost checking Reserve Bank of San Francisco ("Reserve Bank") on accounts. August 28 and September 4, 1986, to clarify the issues The Board has fully and carefully considered the and provide a forum for resolving differences. various points made by Protestants, and for the rea- The Office of the Comptroller of the Currency sons indicated above believes that Applicant is taking ("OCC") has previously determined that the CRA appropriate measures to meet community needs. Protrecord of each of Applicant's subsidiary banks is estants' major point is that Applicant should agree to satisfactory.7 specific lending goals in the South End, including The Board has examined the mortgage and home dollar amounts for particular types of lending and improvement lending data available under the Home below-market terms. However, the Board has consis- Mortgage Disclosure Act ("HMDA"), 12 U.S.C. tently maintained that neither the CRA nor the BHC §§ 2801-11, and concluded that those data do not Act requires or authorizes the Board "to dictate a indicate that Rainier Bank has neglected the South bank's product mix (which credit or deposit services a End in favor of other areas or neglected low- and bank should emphasize) or to dictate what proportion moderate-income census tracts (whether in the South or amount of an institution's funds must, or even End or in the Seattle MSA generally) in favor of upper- should, be allocated to any particular credit need, income census tracts. Rainier Bank's mortgage loans borrower or neighborhood or on what specific terms in low- and moderate-income census tracts are gener- credit should be extended."8 Commerce Bancshares, ally in proportion to its overall mortgage lending. In Inc., 64 FEDERAL RESERVE BULLETIN 576, 579 (1978); addition, pursuant to section 228.8(c) of the Board's see Hibernia Corporation, 72 FEDERAL RESERVE BUL- Regulation BB, 12 C.F.R. § 228.8(c), the Board has LETIN 656, 658 (1986).9 accorded considerable weight to the mortgage and Based upon all of the evidence of record, including home improvement lending record of Rainier Mort- Applicant's commitments and Protestants' comments, gage Company, Seattle, Washington, a nonbank sub- the Board concludes that the CRA records of Applisidiary of Applicant. cant's subsidiary banks, and convenience and needs The Board has also considered favorably the fact considerations generally, are consistent with approval that Applicant has several programs that are specifically directed toward the development of low- and moderate-income areas. Through its Home Loan Center, Rainier Bank arranges purchase and rehabilitation loans on distressed one- to four-family dwellings based on the value of the property after rehabilitation. The Board also notes that Rainier Bank's Community 8. Petitioners disregard these principles in their attempts to com- Business Loan Center, which aims at making commer- pare Rainier Bank with other financial institutions based on real estate lending data. "The Board has recognized the importance of, among cial loans more available to women, minority group other kinds of loans, both mortgage and small business loans in members, and others, and the bank's extensive pro- meeting the requirements of the CRA, and believes that the appropriate mix of these types of loans is a business decision to be made by banks." Dominion Bankshares Corporation, 72 FEDERAL RESERVE BULLETIN 787, 789 n.10 (1986). 6. The Board concludes that Rainier Bank's delineation of the 9. The Board believes that Rainier Bank's check-cashing policy is relevant "community" as King County, Washington, is reasonable, not unduly burdensome under the circumstances, given the evidence does not exclude low-to-moderate-income or minority areas, and of record regarding the ease of obtaining adequate identification at complies with applicable regulations. 12 C.F.R. § 25.3. Under that reasonable cost. delineation, Rainier Bank must meet the credit needs of the entire Protestants have offered neither evidence nor arguments to contracounty, including the South End and the low- and moderate-income dict Applicant's contention that Rainier Bank had legitimate business neighborhoods of the county, and must be judged on its overall record reasons for reducing services at its Promenade 23 Branch and, under of meeting those needs. the circumstances, the Board does not believe that the reduction 7. No commenter has challenged the CRA record of any subsidiary reflects adversely on Applicant's service to the convenience and of Applicant other than Rainier Bank. needs of the community. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 1987 of the application.10 The Board will review Applicant's institutions insured by the Federal Savings and Loan progress in fulfilling its commitments, as well as its Insurance Corporation ("FSLIC") or operating under CRA record generally, in connection with any future a charter by the Federal Home Loan Bank Board.1 application. Bank accepts demand deposits and engages in the Based on the foregoing and other facts of record, the business of making commercial loans, and its deposits Board has determined that the application should be, are not insured by the FSLIC. Accordingly, Bank is a and hereby is, approved. The acquisition shall not be "bank" for purposes of the Act, and Applicant's consummated before the thirtieth calendar day follow- application to become a bank holding company ing the effective date of the Order, or later than three through acquisition of Bank has been considered in months after the effective date of the Order, unless light of the requirements of section 3 of the Act that period is extended for good cause by the Reserve pertaining to the acquisition of banks. Bank, pursuant to delegated authority, or by the Applicant is a nonoperating corporation with no Board. subsidiaries, formed for the purpose of acquiring Bank and Bank's subsidiaries. Bank is the 45th largest November 25, 1986. depository institution among commercial banks and thrift institutions in Connecticut, with deposits of BARBARA R. LOWREY approximately $199.5 million, controlling 0.4 percent [SEAL] Associate Secretary of the Board of the total deposits in commercial banks and thrift institutions in the state.2 Bank is the 17th largest depository institution in the Hartford banking market,3 Suffield Financial Corporation controlling 1.2 percent of the total deposits in commer- Suffield, Connecticut cial banks and thrift institutions in the market.4 Because this proposal involves the formation of a bank Order Approving Formation of a Bank Holding holding company, consummation of the proposal Company would not have any significant effect on existing or probable future competition, nor would it significantly Suffield Financial Corporation, Suffield, Connecticut, increase the concentration of banking resources in has applied for the Board's approval under section Bank's markets or in the State of Connecticut. 3(a)(1) of the Bank Holding Company Act ("Act") Bank engages through wholly owned subsidiaries in (12 U.S.C. § 1842(a)(1)), to become a bank holding certain real estate investment and development activicompany by acquiring Suffield Savings Bank, Suffield, ties and real estate brokerage activities authorized for Connecticut ("Bank"). Bank is a state-chartered stock Bank pursuant to state law. The Board has requested savings bank, the accounts of which are insured by the comment regarding the permissible scope and extent Federal Deposit Insurance Corporation. of real estate investment and development activities of Notice of the application, affording opportunity for holding company banks and their subsidiaries,5 and interested persons to submit comments, has been regarding the scope of section 225.22(d)(2) of the given in accordance with section 3(b) of the Act. The Board's Regulation Y, 12 C.F.R. § 225.22(d)(2), which time for filing comments has expired, and the Board authorizes state banks owned by bank holding compahas considered the application and all comments re- nies to establish wholly owned operating subsidiaries ceived in light of the factors set forth in section 3(c) of to engage in activities that the state bank is authorized the Act (12 U.S.C. § 1842(c)). The Board has previously determined that a state savings bank is a "bank" under section 2(c) of the Act if it accepts demand deposits, engages in the business 1. Excel Bancorp, Inc., 72 FEDERAL RESERVE BULLETIN 731 (1986); First Fidelity Bancorporation, 72 FEDERAL RESERVE BULLEof making commercial loans, and is not covered by the TIN 487 (1986); BankVermont Corporation, 70 FEDERAL RESERVE exemption created by the Garn-St Germain Deposi- BULLETIN 829 (1984); The Frankford Corporation, 70 FEDERAL tory Institutions Deregulation Act of 1982 for thrift RESERVE BULLETIN 654 (1984); The One Bancorp, 70 FEDERAL RESERVE BULLETIN 359 (1984); First NH Banks, Inc., 69 FEDERAL RESERVE BULLETIN 874 (1983); Amoskeag Bank Shares, Inc., 69 FEDERAL RESERVE BULLETIN 860 (1983). 2. Banking data are as of March 31, 1986. 10. In considering Protestants' request for a public meeting, the 3. The Hartford banking market is defined as the Hartford RMA Board finds that Protestants and Applicant have had ample opportuni- minus the Tolland County township of Mansfield and the Windham ty to present evidence and arguments in writing and to respond to one County township of Windham, plus the Windham County township of another's submissions, and concludes that the parties' extensive Ashford, the Hartford County township of Hartland and the Tolland written submissions have been an adequate means of clarifying the County township of Union, and the remaining portions of Plymouth issues in this case, including the factual questions raised by Protes- and East Hadden not already included in the RMA. tants. Accordingly, the Board has denied Protestants' request for a 4. Market data are as of March 31, 1986. public meeting. 5. 50 Federal Register 4519 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 to conduct directly under state law. Pending comple- Orders Issued Under Section 4 of the Bank tion of these rulemakings on these issues, the Board Holding Company Act has, in a limited number of instances, permitted statechartered savings banks to continue to engage in real Signet Banking Corporation estate investment and development activities, provid- Richmond, Virginia ed that the savings banks limit the level and scope of these activities and maintain adequate capital to sup- Order Approving the Acquisition of a Company port the activities.6 Applicant has provided commit- Engaged in Providing Financial Advisory Services ments that so limit Bank's real estate activities, and has committed to conform these activities to the result Signet Banking Corporation, Richmond, Virginia, a of the Board's rulemakings. Applicant has also com- bank holding company within the meaning of the Bank mitted to conform Bank's real estate brokerage activi- Holding Company Act ("Act"), 12 U.S.C. § 1841 ties to the results of the Board's rulemaking concern- et seq., has applied for the Board's prior approval ing the scope of section 225.22(d)(2) of the Board's under section 4(c)(8) of the Act, 12 U.S.C. Regulation Y, and to any change in Board policy with § 1843(c)(8), and section 225.23 of the Board's Regularespect to real estate brokerage activities engaged in tion Y, 12 C.F.R. § 225.23, to acquire 100 percent of by state-chartered savings banks and their subsidiar- the voting shares of Corporate Finance Advisors, Inc., ies. The Board notes that Bank's real estate brokerage Richmond, Virginia ("Company"), and to engage subsidiaries do not at any time take an equity position through Company in certain financial advisory serin real estate. Accordingly, subject to these commit- vices. ments, the Board has determined that Bank's real Notice of the application, affording interested perestate investment and development activities and real sons an opportunity to submit comments on the proestate brokerage activities do not preclude approval of posal, has been duly published (51 Federal Register this application. 35,052, 39,587 (1986)). The time for filing comments The financial and managerial resources and future has expired, and the Board has considered the applicaprospects of Applicant and Bank are regarded as tion and all comments received in light of the public satisfactory and consistent with approval of this pro- interest factors set forth in section 4(c)(8) of the Act. posal. Considerations relating to the convenience and Applicant, a bank holding company by virtue of its needs of the community to be served are also consis- ownership of commercial banks in Virginia, Maryland tent with approval. and the District of Columbia, has total consolidated Based on the foregoing and other facts of record, assets of $8.5 billion.1 Through its subsidiaries, Appliincluding the commitments made by Applicant, the cant currently engages in various permissible non- Board has determined that the application under sec- banking activities. tion 3 of the Act should be and hereby is approved. Applicant proposes to establish Company de novo The acquisition of Bank shall not be consummated as a financial advisory firm that will provide: before the thirtieth calendar day following the effective (1) advice regarding the structuring of and arranging date of this Order or later than three months after the for loan syndications, interest rate "swap," interest effective date of this Order, unless such period is rate "cap," and similar transactions; extended for good cause by the Board or by the (2) advice in connection with merger, acquisition/ Federal Reserve Bank of Boston, pursuant to delegat- divestiture and financing transactions for nonaffiliated authority. ed financial and nonfinancial institutions; By order of the Board of Governors, effective (3) valuations for nonaffiliated financial and nonfi- November 10, 1986. nancial institutions; and (4) fairness opinions in connection with merger, Voting for this action: Chairman Volcker and Governors acquisition and similar transactions for nonaffiliated Johnson, Rice, Angell, Seger, and Heller. Absent and not financial and nonfinancial institutions. voting: Governor Wallich. None of Applicant's proposed services is included JAMES MCAFEE on the list of permissible nonbanking activities in [SEAL] Associate Secretary of the Board Regulation Y, 12 C.F.R. § 225.25(b) et seq. However, the Board has previously determined by order that the 6. See, e.g., Excel Bancorp, Inc., 72 FEDERAL RESERVE BULLETIN 731 (1986); First Fidelity Bancorporation, 72 FEDERAL RESERVE BULLETIN 487 (1986). 1. Data are as of June 30, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 Federal Reserve Bulletin • January 1987 activities described in paragraphs (2), (3) and (4) are ing and has stated that it will consider evidence of any closely related to banking and permissible for bank reasonable connection to banking in making its analyholding companies, generally. By order approving the sis.5 In addition, section 225.21(a)(2) of Regulation Y application of Security Pacific Corporation to acquire permits a bank holding company to engage in inciden- Duff & Phelps, Inc., Chicago, Illinois,2 the Board tal activities that are necessary to carry on a closely determined that banks had extensive experience in related activity.6 valuing securities within their trust departments, and In this regard, Applicant states that Company's that banks typically provided extensive financial ad- proposed advisory services derive from investment vice to customers as part of their commercial lending research activities currently performed by Applicant's services. The Board noted further that a number of subsidiary bank in Virginia in response to requests major banks were competitive with Duff & Phelps, from institutional customers seeking advice on finan- Inc., in offering corporate valuations and financial cial strategy and lender selection. Applicant also states feasibility studies for a fee. that a number of major commercial banking firms in Applicant has also requested the Board's approval Virginia already offer advice for a fee regarding loan for Company to provide advice to institutional custom- syndications or interest rate exchange and protection ers regarding the structuring of and arranging for loan products. syndications and regarding interest rate "swap" and Although the provision of the services included in "cap" transactions.3 Applicant states that the pro- activity number (1) has not previously been found to posed advice would be provided mainly to corporate be permissible for bank holding companies, the Board and institutional clients in Virginia, Maryland and the believes that Company's provision of advice regarding District of Columbia. Applicant further states that loan syndications and interest rate swap and cap Company will provide advice only; Company will not transactions would be similar to financial advisory broker interest rate transactions, nor will it participate services that are permissible for bank holding compain the lending for any syndication. nies, generally.7 In addition, the Board believes that In order to determine if an activity is closely related banks currently perform this type of financial advisory to banking under section 4(c)(8) of the Act, the Board service for their customers. The Board also notes that has relied on guidelines established by the federal such advice is operationally or functionally so similar courts.4 Under these guidelines, an activity may be to services generally provided by banks as to equip found to be closely related to banking if it is demon- banks particularly well to provide the proposed serstrated: vices. In view of this similarity, the Board finds that (1) that banks generally have, in fact, provided the Company's proposed activity number (1) may be proposed services; deemed closely related to banking. (2) that banks generally provide services that are In order to approve this application, the Board must operationally or functionally so similar to the pro- also find that the performance of the proposed activity posed services as to equip them particularly well to number (1) "can reasonably be expected to produce provide the proposed services; or benefits to the public, such as greater convenience, (3) that banks generally provide services that are so increased competition, or gains in efficiency, that integrally related to the proposed services as to outweigh possible adverse effects, such as undue require their provision in a specialized form. concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking The Board also may consider other factors in deter- practices." mining whether an activity is closely related to bank- In this respect, Applicant indicates that Company's performance of this activity may be expected to benefit the public by allowing Company to provide essen- 2. Security Pacific Corporation, 71 FEDERAL RESERVE BULLETIN tial services at competitive costs. Specifically, Appli- 118 (1985). cant notes that it has invested heavily in computer 3. Applicant defines interest rate "swap" transactions as: contracsystems and capacities and that the economies of scale tual agreements between parties to exchange interest payments (rather than principal) based upon an assumed principal amount, various gained as a result will reduce operating costs to interest rate indices, and a predetermined time period. Applicant describes interest rate "caps" as: contractual agreements wherein the seller of a cap agrees to make payment to the purchaser of a cap, if a particular interest rate index (prime) exceeds a predetermined level, with payments calculated on an assumed principal amount for a deferred time period. Both "caps" and "swaps" are typically used by 5. 49 Federal Register 806 (1984). institutions to manage or hedge outstanding positions in the financial 6. See Association of Data Processing Service Organizations, Inc. markets. v. Board of Governors of the Federal Reserve System, 745 F.2d 677 4. National Courier Association v. Board of Governors, 516 4.2d (D.C. Cir. 1984). 1229 (D.C. Cir. 1975). 7. Security Pacific Corporation at 119. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 Company. Applicant emphasizes that substantial Based upon the foregoing and all the facts of record benefits will become available over the next several including Applicant's commitments, the Board has years in the form of improved service, greater conve- determined that the balance of public interest factors it nience and competitive pricing. is required to consider under section 4(c)(8) is favor- The Board notes that Company will be strongly able. Accordingly, the application is hereby approved. capitalized and will have a ready customer base, and This determination is subject to the conditions set that Company will confine its financial advisory ser- forth in this Order and in sections 225.4(d) and vices to institutional customers in those states where 225.23(b)(3) of the Board's Regulation Y, 12 C.F.R. Applicant presently conducts its operations. The §§ 225.4(d) and 225.23(b)(3). The approval is also Board also notes that Company's anticipated competi- subject to the Board's authority to require modificators include investment and commercial banking firms tion or termination of the activities of the holding much larger in terms of asset size, personnel resources company or any of its subsidiaries as the Board finds available, and volume of business transacted.8 More- necessary to assure compliance with the provisions over, the Board recognizes that Company will be and purposes of the Act and the Board's regulations established as a de novo, independent subsidiary so and orders issued thereunder, or to prevent evasion that no material changes in Applicant's management, thereof. operations, marketing or other business functions will By order of the Board of Governors, effective be necessitated by this proposal. November 28, 1986. The Board believes that concerns regarding conflicts of interest and related adverse effects that may Voting for this action: Vice Chairman Johnson and Goverbe associated with financial feasibility studies can be nors Rice, Seger, and Heller. Absent and not voting: Chairman Volcker and Governors Wallich and Angell. substantially mitigated through the imposition of conditions designed to prevent such adverse effects. The Board finds that appropriate conditions to mitigate BARBARA R. LOWREY such adverse effects are as follows: [SEAL] Associate Secretary of the Board (1) Company will not make available to Applicant or any of its subsidiaries confidential information received from Company's clients; (2) Disclosure always will be made to each potential Westpac Banking Corporation client of Company that Company is an affiliate of Sydney, Australia Applicant; (3) Advice rendered by Company on an explicit fee Order Approving an Application to Engage in basis will be rendered without regard to correspon- Certain Activities Related to Dealing in Gold dent balances maintained by the customer of Com- and Silver Bullion pany at any depository institution subsidiary of Applicant; and (4) Company's financial advisory activities shall not Westpac Banking Corporation, Sydney, Australia encompass the performance of routine tasks or ("Westpac"), a bank holding company within the operations for a customer on a daily or continuous meaning of the Bank Holding Company Act ("Act"), basis. 12 U.S.C. § 1841 et seq., has applied, pursuant to section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and Under these conditions, the Board concludes that section 225.23 of the Board's Regulation Y (12 C.F.R. Applicant's performance of the proposed activity is § 225.23), for permission to engage through its subsidunlikely to result in any undue concentration of re- iary Mase Westpac, Inc., New York City, New York sources, decreased or unfair competition, unsound ("MWI"), in certain activities related to dealing in banking practices, or other adverse effects. gold and silver bullion. Westpac's proposed activities are as follows: (a) buying and selling gold and silver bullion, bars, rounds and bullion coins for its own account and the account of others; (b) financing the production, refining and fabrication of gold and silver, including lending and borrowing 8. Included among Company's competitors are: Sovran Bank, gold and silver in connection with such financing; N.A., United Virginia Bank, Wachovia Bank & Trust Company, (c) arbitraging gold and silver in markets throughout N.A., First Union National Bank, NCNB National Bank and Sun Trust Bank. the world; and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Federal Reserve Bulletin • January 1987 (d) providing various incidental services for custom- Westpac will engage in its proposed activities as part ers such as arranging for the safe custody, assaying of its acquisition of assets of Johnson Matthey Bankand shipment of gold and silver.1 ers, Ltd., which failed in 1984.6 Westpac's acquisition of these assets prevented a decrease in competition in Notice of the application, affording interested per- the gold and silver markets that otherwise would have sons an opportunity to submit comments on the pro- resulted from the elimination of a competitor. Accordposal, has been duly published (51 Federal Register ingly, the Board concludes that Westpac's perfor- 30,271 (1986)). The time for filing comments has mance of the proposed activities can reasonably be expired, and the Board has considered the application expected to provide benefits to the public. and all comments received in light of the public The Board also has considered the potential for interest factors set forth in section 4(c)(8) of the Act. adverse effects that may be associated with this pro- Westpac, a bank organized under the laws of Aus- posal. There is no evidence in the record that consumtralia, is the 68th largest banking organization in the mation of the proposal would result in any adverse world with total assets of approximately $36.9 billion.2 effects, such as undue concentration of resources, Westpac engages in a broad range of financial and decreased or unfair competition, conflicts of interests, commercial services directly and indirectly through its or unsound banking practices. offices worldwide. Based upon a consideration of all the relevant facts, The Board has previously determined that most of the Board concludes that the balance of the public Westpac's proposed activities are permissible for bank interest factors that it is required to consider under holding companies. A bank holding company may section 4(c)(8) is favorable. Accordingly, the applicaengage in the purchase and sale of gold and silver for tion is hereby approved.7 its own account and for the account of others.3 The This determination is subject to all of the conditions Board believes that assaying and arranging transport set forth in Regulation Y, including sections 225.4(d) of bullion is part of this activity.4 With regard to and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and Westpac's proposal to provide financing for the pro- 225.23(b)(3)), and to the Board's authority to require duction and fabrication of gold and silver, Regulation such modification or termination of the activities of a Y permits bank holding companies to engage in mak- bank holding company or any of its subsidiaries as the ing loans and other extensions of credit. Thus, West- Board finds necessary to assure compliance with the pac's proposed financing activities for the production provisions and purposes of the Act and the Board's of gold and silver are permissible under Regulation Y.5 regulations and orders issued thereunder, or to pre- In order to approve this application, the Board is vent evasion thereof. also required to determine that Westpac's perfor- By order of the Board of Governors, effective mance of the proposed activities "can reasonably be November 24, 1986. expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue Voting for this action: Vice Chairman Johnson and Goverconcentration of resources, decreased or unfair com- nors Rice, Seger, and Angell. Absent and not voting: Chairpetition, conflicts of interests, or unsound banking man Volcker and Governors Wallich and Heller. practices." 12 U.S.C. § 1843(c)(8). WILLIAM W. WILES [SEAL] Secretary of the Board 1. Westpac has notified the Board of its intention to purchase and sell for its own account options, futures and options on futures on gold and silver bullion. Applicant has committed to take positions in these investments only as a means of hedging their position in the underlying commodity, i.e. gold and silver. Accordingly, this activity is permissible under section 4(c)(1)(C) of the Act, 12 U.S.C. § 1843(c)(1)(C), which allows bank holding companies to "furnish(ing) services to or perform(ing) services for such bank holding company or its banking subsidiaries." 2. Banking data are as of March 31, 1986. 3. Hongkong and Shanghai Banking Corporation, 72 FEDERAL 6. Pursuant to section 4(c)(9) of the Act, Westpac acquired certain RESERVE BULLETIN 345 (1986); Sovran Financial Corporation, 72 assets of Johnson Matthey Bankers, Ltd., London, England, on May FEDERAL RESERVE BULLETIN 146 (1986); First Interstate Bancorp, 71 19, 1986. FEDERAL RESERVE BULLETIN 467 (1985). 7. Westpac also has applied to join the Commodities Exchange, 4. In Standard and Chartered Banking Group Ltd., the Board Inc. ("COMEX"), in order to execute and clear silver and gold allowed the bank holding company to provide storage facilities, futures contracts. MWI will trade in the instruments only for its own weighing, coin counting and transportation services for bullion and account. MWI's obligations will not be guaranteed by any affiliated coin. 38 Federal Register 27,552 (1973). company and no such guarantee will be given without notifying the 5. 12 C.F.R. § 225.25(b)(1) (1986). Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 Orders Issued Under Sections 3 and 4 of the banking and permissible for bank holding companies Bank Holding Company Act (12 C.F.R. § 225.25(b)(1), (b)(3), (b)(5), (b)(9), (b)(15)). Applicant also has given notice of its intention to Midlantic Corporation acquire Midlantic Banks, Inc.'s wholly owned corpo- Edison, New Jersey ration chartered pursuant to section 25(a) of the Federal Reserve Act (the "Edge Act") (12 U.S.C. § 611 et seq.), Midlantic Overseas, Ltd., Edison, New Jer- Order Approving Formation of a Bank Holding sey under section 211.4(b)(3) of Regulation K, Company and Acquisition of Banks and Nonbanking 12 C.F.R. § 211. Applicant also has applied for the Companies Board's approval under section 4(c)(13) of the BHC Act (12 U.S.C. § 1843(c)(13» to acquire Midlantic Midlantic Corporation, Edison, New Jersey, has ap- Banks, Inc.'s subsidiary Midlantic International, Inc. plied for the Board's approval under section 3(a)(1) of and its subsidiary, Midlantic Services e Administracao the Bank Holding Company Act ("BHC Act") Limitado, Brazil.1 (12 U.S.C. § 1842(a)(1)) to become a bank holding Notice of the applications, affording opportunity for company by acquiring all of the voting shares of two interested persons to submit comments, has been bank holding companies and thereby indirectly acquir- given in accordance with sections 3 and 4 of the BHC ing their subsidiary banks and bank holding compa- Act (51 Federal Register 26,945 (1986)). The time for nies. Applicant proposes to acquire: 1) Midlantic filing comments has expired, and the Board has con- Banks, Inc., Edison, New Jersey and its subsidiaries, sidered the applications and all comments received in Midlantic National Bank, Newark, New Jersey; Mid- light of the factors set forth in section 3(c) of the BHC lantic National Bank/North, West Paterson, New Jer- Act (12 U.S.C. § 1842(c)) and the considerations specsey; Midlantic National Bank/South, Mount Laurel, ified in section 4(c)(8) of the BHC Act.2 New Jersey; Midlantic National Bank/Merchants, Midlantic Banks, Inc., the second largest commer- Neptune, New Jersey; Midlantic National Bank/Sus- cial banking organization in New Jersey, controls six sex & Merchants, Newton, New Jersey; and Midlantic subsidiary banks in New Jersey with $7.3 billion in National Bank/Union Trust, Wildwood, New Jersey; total deposits, representing 15.4 percent of the total and 2) Continental Bancorp, Inc., Philadelphia, Penn- deposits in commercial banks in New Jersey.3 Contisylvania and its subsidiaries, Continental Bank, Nor- nental Bancorp, Inc., Philadelphia, Pennsylvania, the ristown, Pennsylvania; York Bancorp, Inc. and its sixth largest commercial banking organization in Pennsubsidiary bank, The York Bank and Trust Company, sylvania, controls three subsidiary banks, with $3.7 York, Pennsylvania; and United Penn Bank, Wilkes- billion in total deposits, representing 4.4 percent of the Barre, Pennsylvania. Applicant also proposes to ac- total deposits in commercial banks in Pennsylvania. quire Midlantic Banks, Inc.'s 15.9 percent interest in Consummation of the proposal would have no signifi- Statewide Bancorp, Toms River, New Jersey. cant effect on the concentration of banking resources Applicant also has applied for the Board's approval in Pennsylvania or New Jersey. under section 4(c)(8) of the BHC Act (12 U.S.C. Section 3(d) of the BHC Act, 12 U.S.C. § 1842(d), § 1843(c)(8)) to acquire Midlantic Holdings, Inc., Edi- the Douglas Amendment, prohibits the Board from son, New Jersey; Midlantic National Bank and Trust approving an application by a bank holding company Co./Florida, Fort Lauderdale, Florida; Midlantic to acquire a bank located outside the holding compa- Home Mortgage Corporation, Melville, New York; Midlantic Commercial Leasing Corp, New York, New York; Midlantic Middle States Leasing Corp., Edison, 1. As an alternative to the transactions described above, Midlantic Banks, Inc. has applied for the Board's approval under section 3(a)(3) New Jersey; Midlantic Commercial Co., Bloomfield, of the BHC Act to exercise warrants for 1.9 million shares of New Jersey; Greater New Jersey Mortgage Co., Edi- convertible preferred stock of Continental Bancorp, Inc. If converted, these shares would represent 24.9 percent of Continental's common son, New Jersey; Midlantic Brokerage Services Inc., stock on a pro forma basis. In view of the Board's action on Edison, New Jersey; and Lenders Life Insurance Applicant's application to become a bank holding company, action on Company, Phoenix, Arizona. These companies are this alternative application is unnecessary. 2. The Board received letters protesting the application from the existing nonbank subsidiaries of Midlantic Banks, Inc. Community Development Coalition, Inc. ("CDC"), Philadelphia, and Continental Bancorp, Inc. engaged in the activi- Pennsylvania and the Camden Business Administrator, Camden, New ties of making and servicing loans, performing trust Jersey, alleging that certain of Applicant's subsidiary banks are not fulfilling their responsibilities under the Community Reinvestment company functions, leasing personal and real proper- Act. Following several meetings with Applicant, agreements were ty, underwriting credit life, accident and health insur- reached with the protestants and the protests of the applications were ance and securities brokerage. These activities have withdrawn. 3. Pennsylvania state deposit data are as of December 31, 1985; been determined by the Board to be closely related to New Jersey state deposit data are as of June 30, 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Federal Reserve Bulletin • January 1987 ny's home state, unless such acquisition is "specifical- will increase 56 points to 97111 and the four-firm ly authorized by the statute laws of the state in which concentration ratio will increase to 53.8 percent. such bank is located, by language to that effect and not In view of the unconcentrated nature of the Philadelmerely by implication."4 phia banking market, the small increase in Applicant's On June 25, 1986, Pennsylvania enacted a regional market share, the number of competitors that would interstate banking statute5 which permits out-of-state remain upon consummation of the proposal and other bank holding companies located in states in the region6 facts of record, the Board concludes that consummathat have reciprocal legislation with Pennsylvania to tion of the proposal is not likely substantially to lessen acquire Pennsylvania banks and bank holding compa- competition in the Philadelphia banking market. nies. The Pennsylvania statute explicitly declares that The Board also has considered the effects of this the New Jersey interstate banking legislation is recip- proposal on probable future competition in the marrocal with the legislation enacted in Pennsylvania.7 kets in which Midlantic Banks, Inc. and Continental Accordingly, Pennsylvania law permits a New Jersey Bancorp, Inc., but not both, compete. In light of the bank holding company to acquire a bank holding number of probable future entrants into each of these company or bank in Pennsylvania. Applicant meets all markets and other facts of record, the Board conof the requirements of the Pennsylvania statute autho- cludes that consummation of this proposal would not rizing an eligible bank holding company to acquire a have any significant adverse effect on probable future New Jersey bank or bank holding company.8 Based on competition in any relevant market. the foregoing, the Board has determined that the In its evaluation of the managerial resources at proposed acquisition is specifically authorized by the Midlantic Banks, Inc. and its subsidiary banks and statute laws of Pennsylvania and is thus permissible Continental Bancorp, Inc., and its subsidiary banks, under the Douglas Amendment. the Board has considered certain violations of the Subsidiary banks of Midlantic Banks, Inc. and Con- Currency and Foreign Transactions Reporting Act tinental Bancorp, Inc. compete in the Philadelphia ("CFTRA") and the regulations thereunder.12 The banking market.9 Midlantic Banks, Inc. is the eighth Board notes that Midlantic Banks, Inc. and its bank largest of 59 commercial banking organizations in the subsidiaries and Continental Bancorp, Inc. and its Philadelphia banking market, with total deposits of bank subsidiaries have undertaken comprehensive re- $1.4 billion, representing 4.2 percent of the deposits in medial programs to correct these violations and to commercial banking organizations therein.10 Conti- prevent similar violations from occurring in the future. nental Bancorp, Inc. is the sixth largest commercial Midlantic Banks, Inc. advised the Board that it filed banking organization in the market, with total deposits corrective currency transaction reports; carefully reof $2.2 billion, representing 6.7 percent of the deposits viewed its exempt lists and removed those customers in commercial banks in the market. Upon consumma- not entitled to an exemption; instituted internal traintion of the proposal, Midlantic Banks, Inc. would ing for bank personnel regarding compliance with the become the third largest commercial banking organiza- CFTRA; improved internal audit functions with retion in the market, with total deposits of $3.5 billion, spect to the CFTRA, including the appointment of a representing 10.9 percent of the deposits in the com- Bank Secrecy Act officer at each subsidiary bank; and mercial banks in the market. As a result of the established an automated software program at teller proposal, the Herfindahl-Hirschman Index ("HHI") windows to help ensure that reportable currency transactions are automatically identified for proper reporting. The Board notes that Midlantic Banks, Inc. has cooperated fully with law enforcement agencies. In 4. A bank holding company's home state for purposes of the addition, the sufficiency of the compliance procedures Douglas Amendment is that state in which the total deposits of its adopted to address this matter and the efficacy in 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. correcting the deficiencies have been reviewed by the § 1842. Applicant's home state is New Jersey. primary supervisor of the banks involved. The Board 5. 1986 Pa. Laws No. 69 (effective August 24, 1986). also consulted with appropriate enforcement agencies 6. The region consists of seven states (Delaware, Kentucky, Maryland, New Jersey, Ohio, Virginia, West Virginia) and the District of Columbia. 7. Section 2(c)(iv) of 1986 Pa. Laws No. 69 (effective August 24, 1986). 8. On October 30, 1986, the Pennsylvania Deputy Secretary of Banking determined that the application complied with all of the 11. Under the revised Department of Justice Merger Guidelines requirements of Pennsylvania law and approved the application. (49 Federal Register 26,823 (June 29, 1984)), a market with a post- 9. The Philadelphia banking market consists of Bucks, Chester, merger HHI of less than 1000 is unconcentrated. The Department of Delaware, Montgomery and Philadelphia counties in Pennsylvania Justice has stated that it will not challenge any merger producing an plus Burlington, Camden and Gloucester counties in New Jersey. HHI below 1000, except in extraordinary circumstances. 10. Market data are as of June 30, 1985. 12. 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 65 with respect to this matter, and considered Midlantic consider under section 4(c)(8) of the BHC Act is Banks, Inc.'s past record of compliance with the law. favorable and consistent with approval of the applica- Continental Bancorp, Inc. advised the Board that it tions. brought the CFTRA violations at its subsidiary bank to Applicant also has given notice of its intention to the attention of the appropriate supervisory authorities acquire Midlantic Banks, Inc.'s wholly owned Edge and has cooperated fully with law enforcement agen- Act Corporation, Midlantic Overseas Ltd., Edison, cies. Continental Bancorp, Inc. advised the Board that New Jersey under section 211.4(b)(3) of Regulation K. it created a committee consisting of senior officers Midlantic Overseas, Ltd. would continue to operate as representing various Bank departments to monitor and a direct subsidiary of Midlantic Banks, Inc. as it has to improve Bank's compliance with the CFTRA; care- since its establishment in March, 1982. Based on the fully reviewed its exempt lists and removed those facts of record, the Board has determined that disapcustomers not entitled to an exemption; instituted proval of the proposed investment is not warranted. internal training for bank personnel regarding compli- Applicant has also applied under section 4(c)(13) of ance with the CFTRA; improved internal audit func- the BHC Act to acquire Midlantic Banks, Inc.'s subtions with respect to the CFTRA; and established an sidiary Midlantic International, Inc. and its subsidiary, automated software program to help ensure that Midlantic Services e Administracao Limitado, Brazil, reportable currency transactions are automatically which is an administrative services company engaged identified for proper reporting. Furthermore, the suffi- in activities permitted by section 211.5(d)(6) of Regulaciency of the compliance procedures adopted to ad- tion K. The Board has determined that approval of this dress this matter and the efficacy in correcting the application under section 4(c)(13) of the BHC Act is deficiencies have been reviewed. The Board also consistent with the purposes of the BHC Act and the consulted with appropriate enforcement agencies with Board's Regulation K. respect to this matter. Based on the foregoing and the facts of record, the For the foregoing reasons and based upon a review Board has determined that the applications under of all of the facts of record, the Board concludes that sections 3 and 4 of the BHC Act are consistent with the managerial resources of Midlantic Banks, Inc. and the public interest, and should be and hereby are Continental Bancorp, Inc. are consistent with approv- approved. The banking acquisitions shall not be conal. The Board also finds that the financial resources of summated before the thirtieth calendar day following Midlantic Banks, Inc. and its subsidiaries, and Conti- the effective date of this Order, and neither the banknental Bancorp, Inc. and its subsidiaries, are consis- ing acquisitions nor the nonbanking activities shall be tent with approval of the application. Considerations consummated later than three months after the effecrelating to the convenience and needs of the communi- tive date of this Order, unless such period is extended ty to be served are also consistent with approval. for good cause by the Board or by the Federal Reserve Applicant also has applied under section 4(c)(8) of Bank of New York, acting pursuant to delegated the BHC Act to acquire the nonbanking subsidiaries of authority. The determinations as to Applicant's non- Midlantic Banks, Inc. and Continental Bancorp, Inc. banking activities are subject to the conditions set that are engaged in lending, leasing, trust company, forth in section 225.4(d) and section 225.23(b)(1), securities brokerage and credit life, accident and (b)(3), (b)(5), (b)(9), (b)(15) of Regulation Y (12 C.F.R. health insurance activities. While there is some service § 225.4(d) and § 225.23(b)(1), (b)(3), (b)(5), (b)(9), area overlap between Midlantic and Continental in (b)(15)) and the Board's authority to require such mortgage lending, the market for such services is modifications or termination of the activities of a unconcentrated and there are a large number of firms holding company or any of its subsidiaries as the Board finds necessary to assure compliance with the that engage in this activity. No existing competition provisions and purposes of the BHC Act and the would be eliminated with respect to any of the other Board's regulations and orders issued thereunder, or nonbanking activities. to prevent evasion thereof. Accordingly, it appears that Applicant's acquisition of these nonbanking subsidiaries would not have a By order of the Board of Governors, effective significantly adverse effect upon competition in any November 21, 1986. relevant market. Furthermore, there is no evidence in the record to indicate that approval of this proposal Voting for this action: Vice Chairman Johnson and Goverwould result in undue concentration of resources, nors Rice, Seger, and Angell. Absent and not voting: Chairunfair competition, conflicts of interest, unsound man Volcker and Governors Wallich and Heller. banking practices, or other adverse effects on the public interest. Thus, the Board has determined that JAMES MCAFEE the balance of the public interest factors it must [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 1987 Southborough Holdings, Inc. engaged in full-payout equipment leasing in Canada. Vancouver, B.C., Canada Bank is the 230th largest bank in California, with total deposits of $49.9 million, representing 0.02 percent of Pacific National Financial Corporation total deposits in commercial banks in the state.2 Vancouver, B.C., Canada Bank operates in the San Francisco banking market, and controls 0.04 percent of the deposits in commer- American National Corporation cial banking organizations in the market.3 Applicants Mountain View, California do not operate any subsidiaries in the relevant market. Based on the record, the Board has concluded that Order Approving the Formation of Bank Holding consummation of this proposal would not result in any Companies and the Conduct of Nonbanking significant adverse effects upon competition or signifi- Activities cant increase in the concentration of resources in any relevant market. Accordingly, competitive consider- Southborough Holdings, Inc., Vancouver, B.C., Can- ations are consistent with approval. ada ("SHI"), Pacific National Financial Corporation, The financial and managerial resources and future Vancouver, B.C., Canada ("PNF"), and American prospects of Applicants and Bank are considered National Corporation, Mountain View, California satisfactory and consistent with approval. Applicants ("ANC") (SHI, PNF and ANC will be referred to have committed to consent to the jurisdiction of the collectively as "Applicants"), have applied for the United States, to appoint an agent for service of Board's approval under section 3(a)(1) of the Bank process in the United States, and to maintain adequate Holding Company Act ("BHC Act") (12 U.S.C. books and records in the United States, together with § 1842(a)(1)) to become bank holding companies any additional information the Board may require through the acquisition of the voting shares of Foothill concerning Applicants' business and financial condi- Bank, Mountain View, California ("Bank"). Appli- tion. Based on all the facts of record, including the cants have also applied for Board approval under commitments made by Applicants, the Board has section 4(c)(8) of the BHC Act (12 U.S.C. determined that considerations relating to banking § 1843(c)(8)) to engage in certain leasing activities in factors are consistent with approval of the proposed the United States through American National Leasing acquisition. The Board has determined that consider- Corporation, Mountain View, California ("AN Leas- ations relating to the convenience and needs of the ing"). The Board has determined that these activities community to be served are also consistent with are closely related to banking and permissible for bank approval of this proposal. holding companies (12 C.F.R. § 225.25(b)(5)). Addi- Applicant has also applied, pursuant to section tionally, Applicants seek to continue to engage outside 4(c)(8) of the BHC Act, to acquire AN Leasing Corpothe United States in certain leasing activities permissi- ration, Mountain View, California ("AN Leasing"), ble under section 4(c)(8) of the BHC Act. the nonbanking subsidiary of ANC, and thereby en- Notice of the applications, affording an opportunity gage in personal property leasing activities involving for interested persons to submit comments, has been leases that are the functional equivalent of an extengiven in accordance with sections 3 and 4 of the BHC sion of credit. Applicant has also applied for Board Act. The time for filing comments has expired, and the approval to continue to engage in certain personal Board has considered the application and all com- property leasing activities conducted by SHI and PFC ments received in light of the factors set forth in in Canada. These activities are permissible for bank section 3(c), and the considerations expressed in sec- holding companies under section 225.25(b)(5) of the tion 4, of the BHC Act (12 U.S.C. §§ 1842(c) and Board's Regulation Y. 12 C.F.R. § 225.25(b)(5). AN 1843(c)(8)). Leasing will be organized as a de novo subsidiary of SHI, the top tier applicant, is a Canadian holding ANC. Consummation of the proposal would not result company. SHI owns 74 percent of the voting common in the elimination of any competition, and thus Applistock of PNF.1 PNF is a Canadian public corporation cants' proposal would not have any adverse effect on competition in any relevant market. Furthermore, there is no evidence in the record to indicate that 1. SHI currently holds certain impermissible nonbanking investments. In addition, PNF has committed to divest the ownership of its five rental properties within two years of the acquisition of the Bank. In acting on this application, the Board has relied on Applicants' commitment to divest these impermissible nonbanking investments within two years of consummation of the proposed transactions, 2. Deposit data are as of June 30, 1986. State ranking data are as of which is the time period permitted under the BHC Act for companies December 31, 1985. Market data are as of June 30, 1985. that become bank holding companies to conform their nonbanking 3. The San Francisco banking market is approximated by the San activities to the requirements of the BHC Act. 12 U.S.C. § 1843(a)(2). Francisco-Oakland-San Jose RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 approval of this proposal would result in undue con- rectly acquire its twelve subsidiary banks.1 Applicant centration of resources, decreased or unfair competi- has also applied under section 4(c)(8) of the Act tion, conflicts of interest, unsound banking practices, (12 U.S.C. § 1843(c)(8) and section 225.23(a)) of the or other adverse effects on the public interest. Accord- Board's Regulation Y (12 C.F.R. § 225.23(a)(2)) to ingly, the Board has determined that the balance of the acquire the following nonbank subsidiaries of Compapublic interest factors it must consider under section ny: Third National Financial Services, Nashville, Ten- 4(c)(8) of the BHC Act is consistent with approval of nessee, and thereby engage in mortgage banking inthese applications. cluding making, acquiring or servicing loans; Third On the basis of the record and commitments made National Insurance Company, Chattanooga and Nashby Applicants and their principals, and for the reasons ville, Tennessee, and thereby underwrite credit life, summarized above, the Board has determined that the accident and health insurance for Company and its applications under sections 3 and 4 of the BHC Act subsidiaries; ThirdData, Nashville, Tennessee, and should be and hereby are approved. The banking thereby provide data processing, data transmission acquisition shall not be consummated before the thirti- services and data bases primarily to financial institueth calendar day following the effective date of this tions; Third National Brokerage Services, Chattanoo- Order, and neither the banking acquisition nor the ga, Nashville, Knoxville and Johnson City, Tennesnonbanking acquisition shall occur later than three see, and thereby provide securities brokerage months after the effective date of this Order, unless services, related securities credit activities and incisuch period is extended for good cause by the Board or dental activities such as custodial services, individual by the Federal Reserve Bank of San Francisco, acting retirement accounts and cash management services; pursuant to delegated authority. The determination and Third National Trust Company, Chattanooga, with respect to Applicants' nonbanking activities is Tennessee, to engage in activities of a fiduciary, subject to all of the conditions set forth in Regulation agency or custodial nature. These activities have been Y, including sections 225.4(d) and 225.23(b) determined by the Board to be closely related to (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to the banking and permissible for bank holding companies Board's authority to require such modifications or under section 225.25(b)(1), (3), (7), (8) and (15). termination of activities of a holding company or any Notice of the applications, affording an opportunity of its subsidiaries as the Board finds necessary to for interested persons to submit comments, has been assure compliance with, or to prevent evasion of, the given in accordance with sections 3 and 4 of the Act. provisions and purposes of the BHC Act and the (51 Federal Register 26,191 and 26,468 (1986)). The Board's regulations and orders issued thereunder. time for filing comments has expired, and the Board By order of the Board of Governors, effective has considered the applications and all comments November 3, 1986. received, including comments in opposition to the applications from Legal Services of Greater Miami Voting for this action: Chairman Volcker and Governors ("Legal Services"), in light of the factors set forth in Johnson, Angell, and Heller. Absent and not voting: Gover- section 3(c) of the Act (12 U.S.C. § 1842(c)), and the nors Wallich, Rice, and Seger. considerations specified in section 4(c)(8) of the Act. Applicant is the second largest banking organization JAMES MCAFEE in Georgia, with total Georgia deposits of $5.2 billion,2 [SEAL] Associate Secretary of the Board representing 15.3 percent of the total deposits in commercial banks in the state. Applicant is also the second largest banking organization in Florida, con- SunTrust Banks, Inc. trolling deposits in that state of $2.2 billion, represent- Atlanta, Georgia ing 6.3 percent of the total deposits in commercial banks in Florida. Company is the largest banking Order Approving Acquisition of a Bank Holding organization in Tennessee with total deposits of $4.2 Company billion, representing 14.4 percent of state deposits. SunTrust Banks, Inc., Atlanta, Georgia, a bank holding company within the meaning of the Bank Holding 1. Applicant also has applied to exercise a Warrant purchased from Company Act of 1956, as amended (12 U.S.C. § 1841 Company to acquire up to 24.9 percent of Company's shares. By its terms, the Warrant is exercisable only on the occurrence of certain et seq.) ("Act"), has applied for the Board's approval events which include a material breach by Company of the merger under section 3(a)(3) of the Act (12 U.S.C. agreement entered into with Applicant, or a tender offer, purchase, § 1842(a)(3)), to acquire Third National Corporation, merger or filing by any person or group that would result in that person or group controlling at least 24.9 percent of Company's shares. Nashville, Tennessee ("Company"), and thereby indi- 2. All banking data are as of June 30, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Bulletin • January 1987 Section 3(d) of the Act (12 U.S.C. § 1842(d)), the has concluded that consummation of the proposed Douglas Amendment, prohibits the Board from ap- transaction would not have any significant adverse proving an application by a bank holding company to effects on probable future competition in any relevant acquire a bank located outside the bank holding com- market. pany's home state,3 unless the state where the bank to The financial and managerial resources of Applibe acquired is located has specifically authorized the cant, Company, and their subsidiary banks are considacquisition by language to that effect and not merely ered satisfactory and consistent with approval. In by implication. Applicant's home state is Florida. The considering the convenience and needs of the commustatute laws of Tennessee authorize the acquisition of nities to be served, the Board has also taken into a bank holding company in the state by a bank holding account Applicant's record under the Community Recompany from another state, provided that state is investment Act (12 U.S.C. § 2901 et seq., ("CRA")). within a defined Southern Region, which includes The CRA requires the Board, in its evaluation of a Florida.4 Such an acquisition is permitted if the laws of bank holding company application, to assess the rethe acquiring institution's home state permit the acqui- cord of an applicant in meeting the credit needs of the sition of a bank in that state by a Tennessee bank entire community, including low- and moderate-inholding company or bank on a reciprocal basis. Flori- come neighborhoods, consistent with safe and sound da has enacted a similar reciprocal statute, which operation. The Board has received comments from permits the acquisition of a Florida bank by a Tennes- Legal Services, which represents low income groups see bank holding company. and individuals in Miami. Legal Services requests that Based on its review of the relevant Tennessee and the Board not approve the applications until Applicant Florida statutes, the Board has determined that the "provides adequate assurances that it will meet the Florida statute and the proposed acquisition satisfy the convenience and needs of the low- and moderaterequirements of Tennessee's interstate banking statute income persons, and minorities, in their service areas and that the Tennessee statute expressly authorizes a in Florida."5 Florida holding company, such as Applicant, to ac- In accordance with the Board's practice and procequire a bank holding company located in Tennessee, dure for handling protested applications,6 the Board such as Company. Accordingly, the Board concludes reviewed the allegations made by Legal Services, and that approval of Applicant's proposal to acquire a Applicant's response. Applicant met privately with bank holding company is not barred by the Douglas Legal Services on several occasions and has agreed to Amendment. collaborate with the latter on the development of a The Board has considered the effects of the proposal corporate CRA policy. In addition, pursuant to the upon competition in the relevant banking markets. The Board's examination of Applicant's CRA record, Approposal involves the combination of two sizeable plicant has committed to strengthen consumer complicommercial banking organizations that are among the ance by its Florida subsidiaries by instituting more larger banking organizations in their respective states. extensive training for all responsible personnel. Appli- However, because Company and the banking subsid- cant also will develop a written CRA policy and iaries of Applicant operate in different markets in program which addresses the requirements of CRA different states, consummation of the proposal would and Regulation BB for all of its bank subsidiaries, not eliminate significant existing competition in any including a written corporate policy on basic banking relevant market. services which will take into account the guidelines The Board has considered the effects of the pro- issued by the Board and the Office of the Comptroller posed acquisition on probable future competition in of the Currency as well as improve its marketing of Tennessee, Georgia and Florida. In view of the exis- bank loan and deposit services to minorities and lowtence of numerous other potential entrants from states and moderate-income persons. Applicant has also within the interstate banking regions into each of the committed to institute in its Florida subsidiaries promarkets served by Company or Applicant, the Board grams and policies that have been successfully implemented at its Georgia subsidiaries, such as its programs that assist minority businesses and the 3. A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 5. Legal Services asserts that in Florida, Applicant has failed to 4. Tennessee Regional Reciprocal Banking Act, Tenn. Code Ann. meet the credit needs of low income and black communities; has been §§ 45-12-101 et seq. The region defined by this Act includes Alabama, inadequately involved in community development activities; does not Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississip- offer various government loan programs such as FHA, FmHA and pi, Missouri, North Carolina, South Carolina, Tennessee, Virginia and VA; and has engaged in credit discrimination in the case of one client. West Virginia. Tenn. Code Ann. § 45-12-102. 6. See 12 C.F.R. § 262.25(c). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 conservation of low-income housing. In this regard, activities of a fiduciary, agency or custodial nature. the Board notes that Applicant has a strong record of Because Applicant and Company do not compete in meeting the needs of the communities it serves in any of the same markets, approval of these applica- Georgia. Finally, Applicant will file detailed reports of tions will have no significant effect on competition in its programs in order that the Federal Reserve System any relevant market. Furthermore, there is no evimay evaluate Applicant's progress in meeting its CRA dence in the record to indicate that approval of this objectives. proposal would result in undue concentration of re- The Board has carefully reviewed the records of sources, decreased or unfair competition, conflicts of Applicant, and Company as well, in meeting the interests, unsound banking practices or other adverse convenience and needs of all segments of their com- effects on the public interest. Accordingly, the Board munities. Based on this review and after taking into has determined that the balance of the public interest account Applicant's commitments to enhance its ser- factors it must consider under section 4(c)(8) of the vice to meet the convenience and needs of its commu- Act is favorable and consistent with approval of the nity, including low- and moderate-income segments, application to acquire Company's nonbanking subsidthe Board concludes that convenience and needs con- iaries. siderations are consistent with approval of this appli- Based on the foregoing and other facts of record, the cation.7 Board has determined that the applications under Applicant has also applied, pursuant to section sections 3 and 4 of the Act should be and hereby are 4(c)(8), to acquire the following nonbank subsidiaries approved. The acquisition of Company shall not be of Company, all located in Tennessee: Third National consummated before the thirtieth calendar day follow- Financial Services, Nashville, and thereby engage in ing the effective date of this Order or later than three mortgage banking including making, acquiring or ser- months after the effective date of this Order, unless vicing loans; Third National Insurance Company, such period is extended for good cause by the Board or Chattanooga and Nashville, and thereby underwrite by the Federal Reserve Bank of Atlanta, pursuant to credit life, accident and health insurance within the delegated authority. The determinations as to Appli- Third National system; ThirdData, Nashville, and cant's nonbanking activities are subject to all of the thereby provide data processing, data transmission conditions contained in Regulation Y, including those services and data bases primarily to financial institu- in sections 225.4(d) and 225.23(b)(3) (12 C.F.R. tions; Third National Brokerage Services, Chattanoo- §§ 225.4(d) and 225.23(b)(3)), and to the Board's auga, Nashville, Knoxville and Johnson City, and there- thority to require such modification or termination of by provide securities brokerage services, related the activities of a holding company or any of its subsidiaries as the Board finds necessary to assure securities credit activities and incidental activities compliance with the provisions and purposes of the such as custodial services, individual retirement ac- Act and the Board's regulations and orders issued counts and cash management services; and Third thereunder, or to prevent evasions thereof. National Trust Company, Chattanooga, to engage in By order of the Board of Governors, effective November 26, 1986. 7. Legal Services has also requested that the Board order a public meeting to receive public testimony on the issues presented by these applications. Although section 3(b) of the Act does not require a formal hearing in this instance, the Board may, in any case, order a Voting for this action: Vice Chairman Johnson and Goverformal or informal hearing. In the Board's view, the parties have had ample opportunity to present their arguments in writing and to nors Rice, Seger, and Heller. Absent and not voting: Chairrespond to one another's submissions. In light of these facts, the man Volcker and Governors Wallich and Angell. proposals by Applicant to expand its services, and other facts of record, the Board has determined that a hearing would serve no useful purpose. Accordingly, Legal Services' request for a public hearing is BARBARA R. LOWREY hereby denied. [SEAL] Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Bulletin • January 1987 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By Board of Governors Recent applications have been approved by the Board of Governors as listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Effective Applicant Bank(s) date El Paso Financial Corporation, El Paso State Bank, November 10, 1986 El Paso, Texas El Paso, Texas First United Bancshares, Inc., Grant Bancshares, Inc., November 25, 1986 Ord, Nebraska Grant, Nebraska Mid-Nebraska Bancshares, Inc., Ord, Nebraska Texas Community Bancshares, Inc. BancTEXAS Sulphur Springs, N.A. November 12, 1986 Dallas, Texas Sulphur Springs, Texas 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 Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Effective Applicant Bank(s) date First Interstate Bancorp, First Interstate Central Bank, November 20, 1986 Los Angeles, California Willows, California The Union of Arkansas Corporation, Union National Bank of Oklahoma, November 14, 1986 Little Rock, Arkansas Temple, Oklahoma By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 _ . . . Reserve Effective Applicant Bank(s) B&nk date ABC Holding Company, The Citizens Bank of Tifton, Atlanta October 30, 1986 Moultrie, Georgia Tifton, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 Section 3—Continued „ , Reserve Effective w Applicant Bank(s) Bank date Alabama National First United Corporation, Atlanta November 12, 1986 Bancorporation, Ashland, Alabama Ashland, Alabama Headland Capital Corporation, Headland, Alabama Tallapoosa Capital Corporation, Dadeville, Alabama Macon Capital Corporation, Tuskeegee, Alabama American Capital Corporation, Fairfield Bancshares, Inc., Dallas November 7, 1986 Centerville, Texas Fairfield, Texas Amity Bancorp Inc., Amity Bank, Boston November 10, 1986 New Haven, Connecticut Woodbridge, Connecticut ASB Bancshares, Inc., Ashville Savings Bank, Atlanta November 10, 1986 Ashville, Alabama Ashville, Alabama Avoca Financial Services Inc., Citizens Savings Bank, Chicago November 6, 1986 Council Bluffs, Iowa Avoca, Iowa Western Iowa Consultants, Inc. Council Bluffs, Iowa Banco Harlan, Inc., The Bank of Harlan, Cleveland November 13, 1986 Harlan, Kentucky Harlan, Kentucky Bancorp of Mississippi, First Mississippi National St. Louis November 14, 1986 Tupelo, Mississippi Corporation, Hattiesburg, Mississippi Central Wisconsin Bankshares, Westby-Coon Valley State Bank, Chicago November 4, 1986 Inc., Westby, Wisconsin Wausau, Wisconsin Chambanco, Inc., Ewing Agency, Inc., Kansas City November 6, 1986 Chambers, Nebraska Ord, Nebraska Charter Banc Group, Inc., Bank of Glenbrook, Chicago October 28, 1986 Northfield, Illinois Glen view, Illinois Bank of Northfield, Northfield, Illinois Bank of Wheaton, Wheaton, Illinois Bank of Winfield, Winfield, Illinois Citizens Community Crandon National Bank, Chicago October 30, 1986 Bankshares, Inc., Crandon, Wisconsin Wittenberg, Wisconsin City Bancorp of Bloomington- State Bank of Saybrook, Chicago November 13, 1986 Normal, Inc., Saybrook, Illinois Bloomington, Illinois City Holding Company, The Peoples Bank of Point Richmond November 5, 1986 Charleston, West Virginia Pleasant, Point Pleasant, West Virginia Commerce Bancorp, Inc., Commerce Bank/Pennsylvania, Philadelphia October 24, 1986 Marlton, New Jersey N.A., Philadelphia, Pennsylvania Commerce Corporation, Feliciana Commerce Corporation, Atlanta October 29, 1986 St. Francisville, Louisiana St. Francisville, Louisiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • January 1987 Section 3—Continued „ . Reserve Effective AApplicant B anwk(s) BanR date Community Group, Inc., The First State Bank, Atlanta November 14, 1986 Jasper, Tennessee Jacksboro, Tennessee CREST BANCORP INC., Roberts State Bank, Chicago November 6, 1986 Roberts, Illinois Roberts, Illinois Dawson Springs Bancorp, Inc., Kentucky State Bank of St. Louis October 29, 1986 Dawson Springs, Kentucky Scottsville, Scottsville, Kentucky Dominion Bankshares The First National Bank of Richmond November 10, 1986 Corporation, Sparta, Roanoke, Virginia Sparta, Tennessee Equitable BankShares, Inc., Landmark National Bank, Dallas November 19, 1986 Dallas, Texas Arlington, Texas F&M Bank Holding Company Farmers & Merchants Bank of Minneapolis October 29, 1986 of Valley City, Inc., Valley City, Valley City, North Dakota Valley City, North Dakota FCNB Corp, Frederick County National Bank Richmond November 12, 1986 Frederick, Maryland of Frederick, Frederick, Maryland Financial Bancshares, Inc., Oran State Bank St. Louis November 12, 1986 St. Louis, Missouri Oran, Missouri Schmid Brothers Investment Company, Inc., Clayton, Missouri First American Bankshares, First American Bank & Trust Chicago October 30, 1986 Inc., Co., Fort Atkinson, Wisconsin Fort Atkinson, Wisconsin First Citizens of Paris, Inc., The Citizens National Bank of Chicago November 13, 1986 Paris, Illinois Paris, Paris, Illinois First City Bancshares, First City National Bank, St. Louis October 28, 1986 Incorporated of Springfield, Springfield, Missouri Missouri, Springfield, Missouri First Community Bankshares, The Farmers Bank, Chicago October 27, 1986 Milton, Wisconsin Milton, Wisconsin First Illini Bancorp, Inc., Community Bancshares of Chicago November 4, 1986 Galesburg, Illinois Canton, Inc., Canton, Illinois First Indiana Bancorp, The Boone Corporation, Cleveland November 6, 1986 Elkhart, Indiana Lebanon, Indiana AmeriTrust Corporation, Cleveland, Ohio First NH Banks, Inc., First NH Bank of Maine, Boston October 27, 1986 Manchester, New Hampshire Portland, Maine First NH Banks, Inc., The Cheshire National Bank, Boston October 31, 1986 Manchester, New Hampshire Keene, New Hampshire First of America Bank Corporation, Kalamazoo, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 73 Section 3—Continued . .. „ , , . Reserve Effective Applicant Bank(s) ^ ^ First Petersburg Bancshares, The First National Bank of Chicago October 30, 1986 Inc., Petersburg, Petersburg, Illinois Petersburg, Illinois First Valley Corporation, West Side Bancorp, Inc., Philadelphia November 12, 1986 Bethlehem, Pennsylvania West Pittston, Pennsylvania FMB Banking Corporation, Pavo State Bank, Atlanta November 5, 1986 Monticello, Florida Pavo, Georgia Fort Wayne National Old-First National Corporation, Chicago November 10, 1986 Corporation, Bluffton, Indiana Fort Wayne, Indiana Fourth Financial Corporation, First National Bank and Trust Kansas City October 31, 1986 Wichita, Kansas Company of Lenexa, Lenexa, Kansas Gary-Wheaton Corporation, Ogden-Saratoga Corporation, Chicago November 13, 1986 Wheaton, Illinois Downers Grove, Illinois Greater Southwest Bancshares, Bank of the West, Dallas October 28, 1986 Inc., Irving, Texas Irving, Texas Greenwood County Financial Home Bank and Trust Company Kansas City November 3, 1986 Services, Inc., of Eureka, Eureka, Kansas Eureka, Kansas Grenada Sunburst System Mount Olive Bank, St. Louis November 4, 1986 Corporation, Mount Olive, Mississippi Grenada, Mississippi Grenada Sunburst System South Mississippi Bank, St. Louis October 28, 1986 Corporation, Prentiss, Mississippi Grenada, Mississippi Harbor Country Banking Heritage Bank, Chicago October 24, 1986 Corporation, Berrien Springs, Michigan Three Oaks, Michigan Hi-Bancorp., Inc., GNP Bancorp, Inc., Chicago October 30, 1986 High wood, Illinois Mundelein, Illinois Houghton Financial, Inc., Houghton National Bank, Minneapolis November 12, 1986 Houghton, Michigan Houghton, Michigan Huntington Bancshares Wainwright Financial Cleveland October 29, 1986 Incorporated, Corporation, Columbus, Ohio Noblesville, Indiana Huntington Bancshares of Indiana, Inc., Columbus, Ohio Independence Bancorp, Inc., Third National Bank and Trust Philadelphia October 29, 1986 Perkasie, Pennsylvania Company of Scranton, Scranton, Pennsylvania International City Bancorp, International City Bank, Atlanta November 10, 1986 Inc., Warner Robins, Georgia Warner Robins, Georgia Iowa National Bankshares, PT&S Bancorp, Chicago October 24, 1986 Corp., Indianola, Iowa Waterloo, Iowa Kentucky Bancorporation, Inc., Marion Bancshares, Cleveland November 5, 1986 Covington, Kentucky Lexington, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • January 1987 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Kish Bancorp., Inc., The Kishacoquillas Valley Philadelphia November 5, 1986 Belleville, Pennsylvania National Bank of Belleville, Belleville, Pennsylvania Lake view Financial Corp., Bank of Lakeview, Chicago October 29, 1986 Lakeview, Michigan Lakeview, Michigan LCB Corporation, Inc., First National Bank of Huntland, Atlanta November 6, 1986 Fayetteville, Tennessee Huntland, Tennessee Magna Group, Inc., Bank of Cahokia, St. Louis October 29, 1986 Belleville, Illinois Cahokia, Illinois Montgomery Bancorp, Inc., Farmers Exchange Bank, Cleveland November 7, 1986 Mount Sterling, Kentucky Millersburg, Kentucky National Banc of Commerce The Chemical Bank and Trust Richmond November 3, 1986 Company, Company, Charleston, West Virginia South Charleston, West Virginia New Palestine Bancorp, New Palestine Bank, Chicago November 6, 1986 New Palestine, Indiana New Palestine, Indiana Nicholson Voting Trust The First National Bank of Philadelphia November 10, 1986 Agreement, Nicholson, Forest City, Pennsylvania Nicholson, Pennsylvania Northeast Wisconsin Financial First National Bank of Sturgeon Chicago November 5, 1986 Services, Inc., Bay, Sturgeon Bay, Wisconsin Sturgeon Bay, Wisconsin Portage County Bancshares, M&I Bank of Portage County, Chicago October 29, 1986 Inc., Almond, Wisconsin Almond, Wisconsin Republic Bancshares, Inc., Security State Bank, St. Louis November 10, 1986 Neosho, Missouri Republic, Missouri Riggs National Corporation, The Riggs National Bank of Richmond November 7, 1986 Washington, D.C. Virginia, Fairfax, Virginia River Associates Bancorp, Inc., River Grove Bank and Trust Chicago November 14, 1986 River Grove, Illinois Company, River Grove, Illinois River Forest Bancorp, Commercial Chicago Chicago November 6, 1986 River Forest, Illinois Corporation, Chicago, Illinois Robinson Bancshares, Inc., Morrill and Janes Bancshares, Kansas City November 5, 1986 Robinson, Kansas Inc., Hiawatha, Kansas St. Joseph Bancorporation, Inc. Starke County Bancorp, Inc., Chicago November 12, 1986 South Bend, Indiana Knox, Indiana Sardis Bankshares, Inc., Bank of Sardis, Atlanta November 7, 1986 Sardis, Georgia Sardis, Georgia Shawmut Corporation, The Fidelity Trust Company, Boston October 24, 1986 Boston, Massachusetts Stamford, Connecticut Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 Section 3—Continued , , , Reserve Effective AA pplicant nBank(s) _ , , Bank d aAt e Shelard Bancshares, Inc., Minnesota National Bank of Minneapolis November 6, 1986 St. Louis Park, Minnesota Eagan, Eagan, Minnesota Southeast Banking Corporation, The First National Bank of Palm Atlanta October 31, 1986 Miami, Florida Beach, Incorporated, Palm Beach, Florida Southern National Corporation, First Palmetto Bancshares Richmond November 19, 1986 Lumberton, North Carolina Corporation, Columbia, South Carolina State Bancorp, Inc., The Bank of Mitchell, St. Louis November 18, 1986 Washington, Indiana Mitchell, Indiana Statewide Bancorp, The Penn's Grove National Bank Philadelphia November 14, 1986 Toms River, New Jersey and Trust Company, Penns Grove, New Jersey TCM Company, City Bank and Trust Company, Kansas City October 30, 1986 Crete, Nebraska Crete, Nebraska UB&T Bancshares, Inc., United Bank & Trust, Dallas November 4, 1986 Abilene, Texas Abilene, Texas UniSouth, Inc., Umatilla State Bank, Atlanta November 10, 1986 Umatilla, Florida Umatilla, Florida United Bancorp of Kentucky, Bank of Lexington & Trust Cleveland November 7, 1986 Inc., Company, Inc., Lexington, Kentucky Lexington, Kentucky Vermilion Bancshares Vermilion Bank & Trust Atlanta November 7, 1986 Corporation, Company, Kaplan, Louisiana Kaplan, Louisiana Washington Bancorporation, Enterprise Bank Corporation, Richmond November 17, 1986 Washington, D.C. Reston, Virginia Waterman Bancshares, Inc., Waterman State Bank, Chicago November 17, 1986 Waterman, Illinois Waterman, Illinois Wenona Bancorp, Inc., Wenona State Bank, Chicago November 18, 1986 Wenona, Illinois Wenona, Illinois Woodford Bancorp, Inc., The Woodford Bank & Trust Cleveland October 8, 1986 Versailles, Kentucky Company, Versailles, Kentucky Section 4 Nonbanking Reserve Effective Applicant Company /activity Bank date American Bancorp, Inc., acquire certain assets and assume Boston November 7, 1986 Hamden, Connecticut certain liabilities of Data Control Group, Inc., New Haven, Connecticut Citicorp, Securities Industry Software New York November 14, 1986 New York, New York Corporation, Evergreen, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • January 1987 Section 4—Continued Nonbanking Reserve Effective Applicant Company Bank date Citizens State Bankshares of sale of credit related insurance on St. Louis November 7, 1986 Bald Knob, extensions of credit by Citizens Bald Knob, Arkansas State Bank, Bald Knob, Arkansas Dominion Bankshares Internet, Inc., Richmond October 30, 1986 Corporation, Reston, Virginia Roanoke, Virginia Itasca Bancorp Inc., B.I.P., Inc., Chicago October 31, 1986 Itasca, Illinois Bloomingdale, Illinois Norwest Corporation, Watson Agency, Inc., Minneapolis November 19, 1986 Minneapolis, Minnesota Watson, Minnesota Section 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Financial National Bancshares, NORTHWEST SUBURBAN Chicago November 7, 1986 Co., BANCORP, INC., Elgin, Illinois Mount Prospect, Illinois NSB Finance, Inc., Mount Prospect, Illinois ONB Corporation, First City Bank and Trust St. Louis November 12, 1986 Owensboro, Kentucky Company, Hopkinsville, Kentucky DATANET, Inc., Hopkinsville, Kentucky ORDERS APPROVED UNDER BANK MERGER ACT By the Secretary of the Board Applicant Bank(s) Effective date First Interstate Bank of California, First National Bank, November 20, 1986 Los Angeles, California Willows, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 77 By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Commerce Union Bank, Commerce Union Bank of Atlanta November 18, 1986 Nashville, Tennessee Lawrence County, Lawrenceburg, Tennessee Nor star Bank of Upstate NY, Seaway National Bank, New York November 14, 1986 Albany, New York Watertown, New York 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. Independent Insurance Agents of America, et al. v. First National Bank of Blue Island Employee Stock Board of Governors, Nos. 86-1572, 1573, 1576 Ownership Plan v. Board of Governors, No. 85- (D.C. Cir., filed Oct. 24, 1986). 2615 (7th Cir., filed Sept. 23, 1985). Securities Industry Association v. Board of Gover- First National Bancshares II v. Board of Governors, nors, No. 86-2768 (D.D.C., filed Oct. 7, 1986). No. 85-3702 (6th Cir., filed Sept. 4, 1985). Independent Community Bankers Association v. McHuin v. Volcker, et al., No. 85-2170 WARB (W.D. Board of Governors, No. 86-5373 (8th Cir., filed Okl., filed Aug. 29, 1985). Oct. 3, 1986). Independent Community Bankers Associaton of South Jenkins v. Board of Governors, No. 86-1419 (D.C. Dakota v. Board of Governors, No. 84-1496 (D.C. Cir., filed July 18, 1986). Cir., filed Aug. 7, 1985). Securities Industry Association v. Board of Gover- Urwyler, et al. v. Internal Revenue Service, et al., No. nors, No. 86-1412 (D.C. Cir., filed July 14, 1986). 85-2877 (9th Cir., filed July 18, 1985). Adkins v. Board of Governors, No. 86-3853 (4th Cir., Johnson v. Federal Reserve System, et al., No. 86filed May 14, 1986). 4536 (5th Cir., filed July 16, 1985). Optical Coating Laboratory, Inc. v. United States, Wight, et al. v. Internal Revenue Service, et al., No. No. 288-86C (U.S. Claims Ct., filed May 6, 1986). 85-2826 (9th Cir., filed July 12, 1985). CBC, Inc. v. Board of Governors, No. 86-1001 (10th Cook v. Spillman, et al., No. 86-1642 (9th Cir., filed Cir., filed Jan. 2, 1986). July 10, 1985). Howe v. United States, et al., No. 86-1430 (1st Cir., Florida Bankers Association v. Board of Governors, filed Dec. 6, 1985). No. 84-3883 and No. 84-3884 (11th Cir., filed Feb. Myers, et al. v. Federal Reserve Board, No. 85-1427 15, 1985). (D. Idaho, filed Nov. 18, 1985). Florida Department of Banking v. Board of Gover- Souser, et al. v. Volcker, et al., No. 85-C-2370, et al. nors, No. 84-3831 (11th Cir., filed Feb. 15, 1985), (D. Colo., filed Nov. 1, 1985). and No. 84-3832 (11th Cir., filed Feb. 15, 1985). Podolak v. Volcker, No. C85-0456, et al. (D. Wyo., Lewis v. Volcker, et al., No. 86-3210 (6th Cir., filed filed Oct. 28, 1985). Jan. 14, 1985). Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa, Brown v. United States Congress, et al., No. 84-2887filed Oct. 22, 1985). 6(IG) (S.D. Cal., filed Dec. 7, 1984). Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D. Melcher v. Federal Open Market Committee, No. 84- Minn., filed Oct. 21, 1985). 1335 (D.D.C., filed Apr. 30, 1984). Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D. Florida Bankers Association, et al. v. Board of Gover- Neb., filed Oct. 16, 1985). nors, Nos. 84-3269, 84-3270 (11th Cir., filed April Jensen v. Wilkinson, et al., No. 85-4436-S, et al. (D. 20, 1984). 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. 80-2614 (D.C. Cir., filed Oct. 24., 1980), filed Oct. 8, 1985). and No. 80-2730 (D.C. Cir., filed Oct. 24, 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT A22 Gross demand deposits—individuals, partnerships, and corporations A3 Reserves, money stock, liquid assets, and debt measures A4 Reserves of depository institutions, Reserve FINANCIAL MARKETS Bank credit A5 Reserves and borrowings—Depository A23 Commercial paper and bankers dollar institutions acceptances outstanding A5 Selected borrowings in immediately available A23 Prime rate charged by banks on short-term funds—Large member banks business loans A24 Interest rates—money and capital markets A25 Stock market—Selected statistics POLICY INSTRUMENTS A26 Selected financial institutions—Selected assets and liabilities A6 Federal Reserve Bank interest rates A7 Reserve requirements of depository institutions A8 Maximum interest rates payable on time and FEDERAL FINANCE savings deposits at federally insured institutions A9 Federal Reserve open market transactions A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation FEDERAL RESERVE BANKS A30 Gross public debt of U.S. Treasury—Types and ownership A10 Condition and Federal Reserve note statements A31 U.S. government securities dealers— All Maturity distribution of loan and security Transactions holdings A32 U.S. government securities dealers—Positions and financing A33 Federal and federally sponsored credit MONETARY AND CREDIT AGGREGATES agencies—Debt outstanding A12 Aggregate reserves of depository institutions and monetary base SECURITIES MARKETS AND A13 Money stock, liquid assets, and debt measures CORPORATE FINANCE A15 Bank debits and deposit turnover A16 Loans and securities—All commercial banks A34 New security issues—State and local governments and corporations A35 Open-end investment companies—Net sales and COMMERCIAL BANKING INSTITUTIONS asset position A35 Corporate profits and their distribution A17 Major nondeposit funds A18 Assets and liabilities, last-Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin • January 1987 A36 Nonfinancial corporations—Assets and A54 Foreign official assets held at Federal Reserve liabilities Banks A36 Total nonfarm business expenditures on new A55 Foreign branches of U.S. banks—Balance sheet plant and equipment data A37 Domestic finance companies—Assets and A57 Selected U.S. liabilities to foreign official liabilities and business credit institutions REAL ESTATE REPORTED BY BANKS IN THE UNITED STATES A38 Mortgage markets A57 Liabilities to and claims on foreigners A39 Mortgage debt outstanding A58 Liabilities to foreigners A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on CONSUMER INSTALLMENT CREDIT foreigners A61 Banks' own claims on unaffiliated foreigners A40 Total outstanding and net change A62 Claims on foreign countries—Combined A41 Terms domestic offices and foreign branches FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A43 Direct and indirect sources of funds to credit A63 Liabilities to unaffiliated foreigners markets A64 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS A65 Foreign transactions in securities SELECTED MEASURES A66 Marketable U.S. Treasury bonds and notes— Foreign transactions A44 Nonfinancial business activity—Selected measures A45 Labor force, employment, and unemployment INTEREST AND EXCHANGE RATES A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A67 Discount rates of foreign central banks A49 Housing and construction A67 Foreign short-term interest rates A50 Consumer and producer prices A68 Foreign exchange rates A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special International Statistics Tables SUMMARY STATISTICS SPECIAL TABLES A53 U.S. international transactions—Summary A70 Assets and liabilities of insured commercial A54 U.S. foreign trade banks, domestic and foreign offices, A54 U.S. reserve assets December 31, 1985 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A3 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 IItteemm 1985 1986 1986 Q4 Ql Q2 Q3 June July' Aug.' Sept.' Oct. Reserves of depository institutions2 1 Total 12.5 13.1 17.8 22.9 21.4 25.3 19.7 11.5 13.6 2 Required 11.5 12.3 19.8 23.9 19.5 26.3 24.2 12.0 13.4 3 Nonborrowed 10.4 19.1 17.6 23.2 23.7 27.3 16.8 8.4 17.9 4 Monetary base3 8.2 8.6 8.8 9.9 9.2 8.8 12.0 5.4 9.3 Concepts of money, liquid assets, and debt4 5 Ml 10.7 7.7 15.8 17.3' 14.8' 16.6 20.6 9.6 14.0 6 M2 6.1 4.3 10.4 11.1' 9.5 12.8 11.0 7.2 10.5 7 M3 6.6 7.6 9.0 10.1 8.5 13.0 8.9 8.7 6.6 8 L 9.5 8.4 7.0 8.6 6.8' 9.1 8.4 9.1 n.a. 9 Debt 13.3 15.2 9.7 11.5 11.2 10.8 12.5 11.4 n.a. Nontransaction components 10 In M25 4.6 3.3 8.7 9.1 7.7 11.4 7.8 6.5 9.3 11 In M3 only6 8.5 20.6 3.4 6.3' 4.7 14.2 .5 14.4 -9.1 Time and savings deposits Commercial banks 12 Savings7 3.2 1.9 11.8 25.5 17.7 22.9 30.6 36.0 41.7 13 Small-denomination time8 -1.6 5.3 -3.1 -9.0 -10.0 -5.3 -12.6 -10.9 -15.8 14 Large-denomination time910 14.1 18.5 -8.8 -2.5' -4.3 -1.7 7.7 -1.7 -9.4 Thrift institutions 15 Savings7 7.5 3.1 20.9 23.6' 29.1 22.9 18.2 16.1 26.5 16 Small-denomination time -2.9 6.6 2.6 -3.8' -5.7 -.5 -6.0 -6.0 -12.0 17 Large-denomination time9 5.2 10.0 11.0 2.7' -2.2 8.7 2.2 -2.2 -13.0 Debt components4 18 Federal 13.7 16.9 11.5 14.5 19.4 14.8 8.8 11.5 n.a. 19 Nonfederal 13.2' 14.7 9.1' 10.6 8.7 9.5 13.7 11.4 n.a. 20 Total loans and securities at commercial banks" 9.4r 12.8' 4.1 10.3 3.8 13.2 13.8 11.5 2.2 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 • January 1987 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 Aug. Sept. Oct. Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 210,945 215,130 214,197 213,294 217,100 217,313 212,902 213,770 216,092 213,851 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 185,339 188,598 188,195 187,375 190,388 190,094 187,055 187,677 189,717 188,083 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 185,339 187,237 187,944 187,375 187,842 186,808 187,055 187,677 188,605 188,083 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 1,361 251 0 2,546 3,286 0 0 1,112 0 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,076 8,252 8,030 8,047 8,323 8,640 7,988 7,988 8,217 7,954 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,076 8,047 7,975 8,047 8,047 8,039 7,988 7,988 7,973 7,954 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss.................... 0 205 55 0 276 601 0 0 244 0 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 847 1,046 779 868 1,094 940 863 653 888 715 1111100000 FFFFFllllloooooaaaaattttt 610 734 560 523 592 522 467 761 628 342 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 16,073 16,500 16,633 16,481 16,704 17,118 16,529 16,690 16,642 16,757 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 11,084 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt.................... 4,844 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,374 17,420' 17,465 17,418' 17,429r 17,439 17,449 17,459 17,469 17,478 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 201,116 201,433r 202,301 201,704' 200,717' 200,310 201,598 203,045 202,751 201,937 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 516 495 492 496 496 493 492 493 493 492 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 3,210 5,677 3,305 4,098 7,625 8,630 3,424 2,701 3,552 3,332 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 208 285 215 249 268 352 193 217 210 231 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,901 1,886 1,971 1,885 1,973 1,872 1,924 1,939 1,926 1,907 2222200000 OOOOOttttthhhhheeeeerrrrr 508 497 516 566 482 480 542 576 475 453 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,479 6,405 6,302 6,346 6,321 6,322 6,357 6,302 6,289 6,266 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 30,308 31,974 32,663 31,470 32,750 32,395 31,923 32,059 33,967 32,815 End-of-month figures Wednesday figures 1986 1986 Aug. Sept. Oct. Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 211,705 219,358 215,993 213,138 215,489 212,429 214,905 216,106 221,974 214,647 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss''''' 185,937 190,751 189,995 186,918 187,958 186,765 187,340 188,988 193,130 188,302 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 185,937 184,437 189,995 186,918 186,247 186,765 187,340 188,988 188,055 188,302 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 0 6,314 0 0 1,711 0 0 0 5,075 0 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 8,047 9,856 7,954 8,047 8,266 7,988 7,988 7,988 8,877 7,954 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 8,047 8,047 7,954 8,047 8,047 7,988 7,988 7,988 7,954 7,954 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 0 1,809 0 0 219 0 0 0 923 0 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 913 879 806 752 1,555 841 2,185 638 2,261 807 3333322222 FFFFFllllloooooaaaaattttt 261 849 441 1,266 924 323 719 1,917 739 517 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 16,547 17,023 16,797 16,155 16,786 16,512 16,673 16,575 16,967 17,067 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 ............... 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 17,394 17,438r 17,488 17,427' 17,438' 17,448 17,458 17,467 17,477 17,487 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 201,778 200,63<y 202,517 201,392r 200,488' 200,808 202,343 203,417 202,404 202,242 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss 497 492 485 496 493 493 493 493 492 491 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 1,106 7,514 2,491 4,665 7,744 5,012 3,211 3,105 3,349 3,594 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 227 342 303 247 208 214 199 240 206 238 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,669 1,681 1,744 1,668 1,668 1,681 1,681 1,717 1,717 1,743 4444422222 OOOOOttttthhhhheeeeerrrrr 461 663 479 503 449 725 467 625 439 455 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 6,562 6,463 6,342 6,200 6,153 6,144 6,181 6,138 6,212 6,081 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss22222 32,901 35,113 35,222 31,496 31,826 30,902 33,890 33,941 40,735 33,392 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. Mar. Apr. May June July Aug. Sept. 1 Reserve balances with Reserve Banks1 21,138 21,738 27,620 27,114 28,892 28,279 29,499 30,313 30,165 31,922 2 Total vault cash2 20,755 22,316 22,956 22,688 22,231 22,474 22,805 23,098 23,451 23,384 3 Vault cash used to satisfy reserve requirements3 . 17,908 18,958 20,522 20,160 19,990 20,140 20,439 20,716 21,112 21,267 4 Surplus vault cash4 2,847 3,358 2,434 2,528 2,241 2,334 2,366 2,381 2,339 2,117 5 Total reserves5 38,894 40,696 48,142 47,274 48,882 48,419 49,938 51,029 51,277 53,189 6 Required reserves 38,333 39,843 47,085 46,378 48,081 47,581 49,007 50,118 50,538 52,463 7 Excess reserve balances at Reserve Banks6 561 853 1,058 896 801 838 931 910 740 726 8 Total borrowings at Reserve Banks 774 3,186 1,318 761 893 876 803 741 872 1,008 9 Seasonal borrowings at Reserve Banks % 113 56 68 73 94 108 116 144 137 10 Extended credit at Reserve Banks7 2 2,604 499 518 634 584 531 378 465 570 Biweekly averages of daily figures for weeks ending 1986 July 16 July 30 Aug. 13 Aug. 27 Sept. 10 Sept. 24 Oct. 8' Oct. 22' Nov. 5 Nov. 19 p 11 Reserve balances with Reserve Banks1 31,267 29,549 30,185 29,758' 31,527 32,103 32,156 33,007 33,551 35,016 12 Total vault cash2 22,466 23,644 23,323 23,792 22,671 23,623 24,015 23,955 23,208 23,405 13 Vault cash used to satisfy reserve requirements3 . 20,283 21,095 20,992 21,388 20,534 21,567 21,790 21,914 21,204 21,518 14 Surplus vault cash4 2,183 2,549 2,331 2,404 2,137 2,056 2,225 2,041 2,004 1,887 15 Total reserves5 51,550 50,644 51,177 51,146 52,061 53,670 53,946 54,921 54,754 56,534 16 Required reserves 50,871 49,528 50,592 50,279 51,268 52,964 53,287 54,170 53,938 55,468 17 Excess reserve balances at Reserve Banks6 679 1,117 585 867 793 706 660 751 817 1,067 18 Total borrowings at Reserve Banks 758 702 759 910 1,111 981 902 771 899 811 19 Seasonal borrowings at Reserve Banks 104 127 134 152 149 135 125 88 93 68 20 Extended credit at Reserve Banks7 442 294 373 515 592 569 538 488 476 437 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 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Member Banks' Averages of daily figures, in millions of dollars 1986 week ending Monday BByy mmaattuurriittyy aanndd ssoouurrccee Sept. 15 Sept. 22 Sept. 29 Oct. 6' Oct. 13' Oct. 20 Oct. 27 Nov. 3 Nov. 10 Federal funds purchased, repurchase agreements, and other selected borrowing in immediately available funds From commercial banks in the United States 1 For one day or under continuing contract 76,260 70,433 65,390 75,099 74,640 72,915 68,940 72,150 78,023 2 For all other maturities 9,450 9,606 9,338 9,440 10,847 9,966 9,403 99,,446655 99,,444488 From other depository institutions, foreign banks and foreign official institutions, and United States government agencies 3 For one day or under continuing contract 4411,,113388 37,936' 36,375' 38,350 42,547 40,503 38,472 36,804 40,235 4 For all other maturities 6,683 6,443 7,070 6,286 6,851 6,142 5,824 5,698 5,330 Repurchase agreements on United States government and federal agency securities in immediately available funds Brokers and nonbank dealers in securities 5 For one day or under continuing contract 11,318 11,010 10,721 11,362 12,099 13,711 13,586 11,847 11,596 6 For all other maturities 9,818 10,283 10,020 8,169 9,204 8,769 9,455 9,829 99,,665522 All other customers 7 For one day or under continuing contract 27,380 26,885 26,512 26,492 26,854 27,179 28,346 29,725 27,936 8 For all other maturities 11,599 11,483 10,722 9,613 10,530 10,432 10,810 10,915 11,048 MEMO: Federal funds loans and resale agreements in immediately available funds in maturities of one day or under continuing contract 9 To commercial banks in the United States 28,114 26,250 24,570 30,137 28,708 29,987 26,244 29,120 28,968 10 To all other specified customers2 12,242 11,631 10,665 11,100 10,922 10,917 10,568 10,261 10,482 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. 2. Brokers and nonbank dealers in securities; other depository institutions; Digitized for FRASER foreign banks and official institutions; and United States government agencies. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • January 1987 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit2 SShhoorrtt--tteerrmm aaddjjuussttmmeenntt ccrreeddiitt FFFeeedddeeerrraaalll RRReeessseeerrrvvveee aanndd sseeaassoonnaall ccrreeddiitt11 First 60 days Next 90 days BBBaaannnkkk of borrowing of borrowing After 150 days EEffffeeccttiivvee ddaattee ffoorr ccuurrrreenntt rraatteess Rate on Effective Previous Rate on Previous Rate on Previous Rate on Previous 11/26/86 date rate 11/26/86 rate 11/26/86 rate 11/26/86 rate Boston 5 >/2 8/21/86 6 5'/2 6 6'/2 7 m 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 D Sa a n ll a F s r ancisco. .. 5 '/2 8 8 / / 2 2 1 1 / / 8 8 6 6 6 5Vi 6 6>/2 7 IVi 8 8 / / 2 2 1 1 / / 8 8 6 6 Range of rates in recent years3 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1973 71/2 71/2 Aug. 21 73/4 7% 11998822—— JJuullyy 20 ll'/>-12 111/2 1974— D A e p c r. . 2 3 9 5 0 7 73 1/ / 2 4 - - 8 8 7 8 3/ 4 O Se c p t. t . 2 2 1 0 2 6 8 8 %-8 VV2 l 8 8 8 V V i i AAuugg.. 2 2 3 3 11 1 1 - 1 1 1 1 1 / 2 V i 1 1 11 1 1 V 2 16 73/4 73/4 Nov. 1 8'/2-9'/2 9 '/> 16 IOV2 10'/2 3 9'/2 9'/2 27 IO-IOV2 10 1975— Jan. 6 7V4-73/4 73/4 30 10 10 10 71/4-73/4 71/4 July 20 10 10 Oct. 12 9V2-IO 91/2 24 71/4 7'/4 Aug. 1/ IO-IOV2 10l/> 13 9Vi 91/2 Feb. 5 63/4-7V4 63/4 20 10'/2 10'/> Nov. 22 9-9 V2 9 7 63/4 63/4 Sept. 19 101/2-11 11 26 9 9 Mar. 1 1 0 4 6'/4 6 — 1/ 6 4 3/ 4 6 6 1 V / 4 4 Oct. 2 8 1 1 1 1 1 - 12 1 1 2 1 Dec. 1 1 5 4 8 8V l/2 2 - - 9 9 m9 May 16 6-6V4 6 10 12 12 17 8V2 81/2 23 6 6 1980- Feb. 15 12-13 13 11998844—— AApprr.. 9 8V2-9 9 1976—Jan. 19 51/2-6 5'/2 19 13 13 13 9 9 23 5V2 51/2 May 29 12-13 13 Nov. 21 8V2-9 81/2 Nov. 22 5i/4-5'/2 51/4 30 12 12 26 81/2 81/2 26 51/4 51/4 June 13 11-12 11 Dec. 24 8 8 16 11 11 1977— Aug. 30 5'/4-53/4 51/4 July 28 10-11 10 11998855—— MMaayy 20 71/2-8 m 31 5V4-53/4 53/4 29 10 10 24 7'/2 71/2 O Se c p t. t . 2 2 6 5 6 3 /4 5 6 3 /4 S N D e e o p c v t . . . 2 1 5 6 7 12 1 - 2 1 3 1 1 3 2 1986— Mar. 1 7 0 1 1 -1 Vi 7 7 1978— Jan. 9 6-6'/2 61/2 8 13 13 Apr. 21 6'/2-7 6V2 20 6 Vi 6V2 23 6'/2 61/2 May 11 61/2-7 7 May 5 13-14 14 July 11 6 6 12 7 7 14 14 Aug. 21 51/2-6 51/2 July 3 7-71/4 71/4 Nov. 2 13-14 13 22 51/2 51/? July 10 71/4 7'/4 6 13 13 Dec. 4 12 12 In effect Nov. 26, 1986 51/2 51/2 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 Vi percent above the rate on adjustment credit. Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980, The program was re-established on Feb. 18, 1986; the rate may be either the same 1981, and 1982. as that for adjustment credit or a fixed rate Vi percent higher. In 1980 and 1981, the Federal Reserve applied a surcharge to short-term 2. Applicable to advances when exceptional circumstances or practices involve adjustment credit borrowings by institutions with deposits of $500 million or more only a particular depository institution and to advances when an institution is that had borrowed in successive weeks or in more than 4 weeks in a calendar under sustained liquidity pressures. As an alternative, for loans outstanding for quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes 1980. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was into account rates on market sources of funds, but in no case will the rate charged adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and be less than the basic rate plus one percentage point. Where credit provided to a to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective particular depository institution is anticipated to be outstanding for an unusually Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for prolonged period and in relatively large amounts, the time period in which each applying the surcharge was changed from a calendar quarter to a moving 13-week period. The surcharge was eliminated on Nov. 17, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the 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—$31.7 million 3 12/31/85 9l/2 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 16'/4 12/30/76 By original maturity Less than 1 Vi years 3 10/6/83 Time and savings2,3 11 ''//22 yyeeaarrss oorr mmoorree 0 10/6/83 Savings 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 2Vi 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 lxh 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 • January 1987 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1 Percent per annum Commercial banks mut S u a al v i s n a g v s i n a g n s d b l a o n a k n s a ( s t s h o r c if i t a t i i n o s n t s it u a t n io d n s)1 In effect Nov. 30, 1986 In effect Nov. 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 (5) 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 $2,500 and an average maintenance removed. For information regarding previous interest rate ceilings on all catego- balance of $2,500 not subject to interest rate restrictions. Effective Jan. 1, 1985, ries of accounts see earlier issues of the FEDERAL RESERVE BULLETIN, the the minimum denomination and average balance maintenance requirements was Federal Home Loan Bank Board Journal, and the Annual Report of the Federal lowered to $1,000. Effective Jan. 1, 1986, the minimum denomination and average Deposit Insurance Corporation. balance maintenance requirements were removed. No minimum maturity period 2. Effective Apr. 1, 1986, the interest rate ceiling on savings deposits was is required for this account, but depository institutions must reserve the right to removed. Before Apr. 1, 1986, savings deposits were subject to an interest rate require seven days, notice before withdrawals. ceiling of 5Vi percent. 5. Before Jan. I, 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 5'/i percent. Deposits of less than $1,000 issued to governmental ments of less than $1,000 were subject to an interest rate ceiling of 5lA percent. units were subject to an interest rate ceiling of 8 percent. Effective Jan. 1, 1986, NOW accounts with minimum required denominations of $1,000 or more and the minimum denomination requirement was removed. IRA/Keough (HR10) Plan accounts were not subject to interest rate ceilings. Effective Jan. 1, 1986, the minimum denomination requirement was removed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1986 TTyyppee ooff ttrraannssaaccttiioonn 11998833 11998844 11998855 Mar. Apr. May June July Aug. Sept. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 18,888 20,036 22,214 396 2,988 3,196 1,402 867 2,940 861 2 Gross sales 3,420 8,557 4,118 0 0 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 0 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 1,152 447 1,847 1,152 579 1,715 1,053 8 Exchange -16,553 -20,840 -17,717 -1,458 -1,129 -1,819 -1,957 -1,253 -4,087 -1,892 9 Redemptions 87 0 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,896 1,638 2,185 0 00 0 00 00 00 00 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -15,533 -13,709 -17,459 -1,152 -447 -1,532 -1,152 -386 -1,194 -1,053 13 Exchange 11,641 16,039 13,853 1,458 1,134 1,019 1,957 1,253 2,587 1,892 5 to 10 years 14 Gross purchases 890 536 458 0 00 0 0 0 0 00 15 Gross sales 0 300 100 0 0 0 0 0 0 0 16 Maturity shift -2,450 -2,371 -1,857 0 -5 -315 0 -193 -520 0 17 Exchange 2,950 2,750 2,184 0 0 500 0 0 1,000 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 0 300 0 0 500 0 All maturities 22 Gross purchases 22,540 23,776 26,499 396 2,988 3,196 1,402 867 2,940 861 23 Gross sales 3,420 8,857 4,218 0 0 0 0 0 0 0 24 Redemptions 2,487 7,700 3,500 0 0 0 0 0 0 0 Matched transactions 25 Gross sales 578,591 808,986 866,175 88,917 109,253 62,663 80,219 70,928 60,460 73,179 26 Gross purchases 576,908 810,432 865,968 88,604 103,957 67,147 80,674 69,659 60,011 70,817 Repurchase agreements 27 Gross purchases 105,971 127,933 134,253 6,748 2211,,115566 1122,,339955 5,640 1188,,665577 0 14,717 28 Gross sales 108,291 127,690 132,351 6,748 13,634 19,917 5,640 18,657 0 8,403 29 Net change in U.S. government securities 12,631 8,908 20,477 83 5,214 158 1,857 -403 2,491 4,814 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 292 256 162 0 0 50 0 * 90 * Repurchase agreements 33 Gross purchases 8,833 11,509 22,183 11,,882211 33,,336699 33,,113355 1,691 44,,998844 00 22,,667788 34 Gross sales 9,213 11,328 20,877 1,821 1,955 4,567 1,691 4,984 0 869 35 Net change in federal agency obligations -672 -76 1,144 0 1,432 -1,482 0 * -90 1,809 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 83 6,647 -1,324 1,857 -403 2,401 6,623 NOTE. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 DomesticN onfinancial Statistics • January 1987 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1986 1986 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Aug. Sept. Oct. 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 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 3 Coin 510 503 528 506 507 468 507 508 Loans 4 To depository institutions 841 2,185 638 2,261 807 913 879 806 5 Other 0 0 0 0 0 0 0 0 Acceptances—Bought outright 6 Held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 7,988 7,988 7,988 7,954 7,954 8,047 8,047 7,954 8 Held under repurchase agreements 0 0 0 923 0 0 1,809 0 U.S. government securities Bought outright 9 Bills 94,392 94,967 96,615 95,682 95,929 93,564 92,064 97,622 10 Notes 66,597 66,597 66,597 66,597 66,597 66,597 66,597 66,597 11 Bonds 25,776 25,776 25,776 25,776 25,776 25,776 25,776 25,776 12 Total bought outright1 186,765 187,340 188,988 188,055 188,302 185,937 184,437 189,995 13 Held under repurchase agreements 0 0 0 5,075 0 0 6,314 0 14 Total U.S. government securities 186,765 187,340 188,988 193,130 188,302 185,937 190,751 189,995 15 Total loans and securities 195,594 197,513 197,614 204,268 197,063 194,897 201,486 198,755 16 Items in process of collection 7,384 6,717 12,078 6,725 6,091 5,632 9,125 6,104 17 Bank premises 647 647 647 648 649 642 647 649 Other assets 18 Denominated in foreign currencies2 9,126 9,132 9,137 9,151 9,156 9,147 9,126 9,133 19 All other3 6,739 6,894 6,791 7,168 7,262 6,758 7,250 7,015 20 Total assets 236,102 237,508 242,897 244,568 236,830 233,646 244,243 238,266 LIABILITIES 21 Federal Reserve notes 184,363 185,881 186,970 185,924 185,753 185,349 184,191 186,022 Deposits 22 To depository institutions 32,583 35,571 35,658 42,452 35.135 34,570 36,794 36,966 23 U.S. Treasury—General account 5,012 3,211 3,105 3,349 3,594 1,106 7,514 2,491 24 Foreign—Official accounts 214 199 240 206 238 227 342 303 25 Other 725 467 625 439 455 461 663 479 26 Total deposits 38,534 39,448 39,628 46,446 39,422 36,364 45,313 40,239 27 Deferred credit items 7,061 5,998 10,161 5,986 5,574 5,371 8,276 5,663 28 Other liabilities and accrued dividends4 2,143 2,193 2,145 2,176 2,067 2,193 2,193 2,275 29 Total liabilities 232,101 233,520 238,904 240,532 232,816 229,277 239,973 234,199 CAPITAL ACCOUNTS 30 Capital paid in 1,844 1,845 1,848 1,853 1,853 1,843 1,849 1,854 31 Surplus 1,781 1,781 1,780 1,780 1,781 1,781 1,780 1,781 32 Other capital accounts 376 362 365 403 380 745 641 432 33 Total liabilities and capital accounts 236,102 237,508 242,897 244,568 236,830 233,646 244,243 238,266 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 162,735 162,954 164,119 164,010 166,086 155,182 163,236 164,020 Federal Reserve note statement 35 Federal Reserve notes outstanding 223,977 224,738 225,259 226,565 227,605 221,640 223,928 227,605 36 LESS: Held by bank 39,614 38,857 38,289 40,641 41,852 36,291 39,737 41,583 37 Federal Reserve notes, net 184,363 185,881 186,970 185,924 185,753 185,349 184,191 186,022 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 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 168,261 169,779 170,868 169,822 169,651 169,247 168,089 169,920 42 Total coUateral 184,363 185,881 186,970 185,924 185,753 185,349 184,191 186,022 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 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Aug. 29 Sept. 30 Oct. 31 4 2 3 1 Lo 9 W 1 a 1 6 n i t d s d h — a a i y n y T s s 1 o t t 5 o t o a d l 9 1 a 0 y y s e d a a r y s 8 79 4 4 2 9 1 0 2 2 , , 1 1 8 4 4 5 5 0 0 6 60 3 3 6 8 0 2 2 2 , , 2 2 6 5 1 5 0 6 8 8 0 0 2 0 7 5 9 8 1 5 6 3 0 0 3 8 85 7 2 5 9 0 4 8 7 0 8 2 6 3 0 3 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 185,765 187,340 188,988 193,130 188,302 185,937 190,751 189,995 1 1 1 1 1 1 0 1 2 3 4 5 O W 9 O O 1 1 6 v v v i t e e e d d h r r r a a i n y y 5 1 1 s s 0 y y 1 t t e 5 e y o o a a e d r r 9 a 1 a s 0 r t y y s o t d s e o 1 5 a a r y 1 y s 0 e a y r e s a rs 4 5 3 2 1 7 5 8 6 2 5 , , , , , , 5 6 4 6 8 5 5 9 3 9 0 8 5 3 0 8 9 0 4 5 3 2 1 6 6 8 6 2 5 , , , , , , 8 9 4 6 8 5 2 2 9 9 0 8 5 9 8 9 9 0 4 5 3 2 1 1 4 8 6 2 0 5 , , , , , , 5 9 7 8 3 5 3 7 0 0 9 7 8 3 3 9 0 5 4 5 3 2 1 1 4 6 8 2 4 5 , , , , , , 4 7 7 8 8 5 7 0 3 0 3 7 4 3 0 9 9 5 4 5 3 2 1 6 9 6 6 2 5 , , , , , , 6 6 9 7 8 5 2 7 1 0 0 7 7 3 5 3 9 5 4 6 3 2 1 2 5 0 8 2 5 , , , , , , 5 8 5 4 8 5 8 9 9 7 0 8 2 4 6 6 9 0 4 5 3 2 1 1 7 6 6 2 1 5 , , , , , , 6 2 6 8 6 5 9 9 9 0 8 8 3 0 8 9 1 0 4 5 3 2 1 8 9 6 6 2 5 , , , , , , 5 8 9 2 8 5 5 3 6 5 0 7 5 3 4 9 9 5 2 2 1 1 1 1 0 1 7 6 8 9 Fe O O 9 W d 1 1 6 e v v i r e e t d d a h r r a l a i y n y 5 1 a s s g y y 1 e t t e e 5 o o n a a c d r r 9 1 y s a 0 t y y o t o e o s d b 1 a 5 a l r 1 y i y g 0 s e a a y ti r e o s a n r s s —Total 7 3 1 1 , , , , 9 9 1 7 4 7 8 0 5 4 1 2 5 8 5 2 1 0 4 6 7 3 1 1 , , , , 9 8 9 4 1 4 1 8 4 5 2 7 6 3 8 6 2 4 2 0 4 7 3 1 1 1 , , , , , 9 8 4 1 0 4 8 6 7 2 4 6 0 8 1 7 4 8 9 9 8 3 1 1 1 1 , , , , , , 8 8 1 1 0 3 3 7 1 2 8 2 5 7 7 5 0 8 5 5 4 7 3 1 1 , , , , 9 8 2 9 3 1 3 5 0 7 4 6 7 9 4 8 9 0 0 4 3 8 3 1 1 , , , , 0 9 4 1 2 7 5 4 2 5 2 7 0 6 7 5 1 4 4 4 9 9 2 3 1 1 , , , , , 1 8 9 1 4 5 7 1 5 0 5 2 0 5 8 6 5 2 4 2 5 7 3 1 1 , , , , 9 8 2 1 9 3 3 5 0 7 9 6 4 7 4 8 9 3 0 0 4 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 DomesticN onfinancial Statistics • January 1987 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1986 11998822 11998833 11998844 11998855 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS'' 11 TToottaall rreesseerrvveess22 34.28 36.14 3951 45.61 46.87 47.28 48.58 49.45 50.49 51.32 51.81 52.40 22 NNoonnbboorrrroowweedd rreesseerrvveess 33.65 35.36 36.32 44.29 46.10 46.38 47.70 48.64 49.75 50.45 50.80 51.56 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt33 33.83 35.37 38.93 44.79 46.62 47.02 48.29 49.17 50.13 50.91 51.37 52.05 44 RReeqquuiirreedd rreesseerrvveess 33.78 35.58 38.66 44.55 45.97 46.47 47.74 48.51 49.58 50.58 51.08 51.65 55 MMoonneettaarryy bbaassee44 170.04 185.39 199.17 216.72 221.26 222.36 224.90 226.63 228.30 230.59 231.63 233.44 Not seasonally adjusted 6 Total reserves2 35.01 36.86 40.57 46.84 46.34 47.94 47.71 49.20 50.32 50.62 51.55 52.34 7 Nonborrowed reserves 34.37 36.09 37.38 45.52 45.58 47.04 46.84 48.40 49.58 49.75 50.54 51.50 8 Nonborrowed reserves plus extended credit3 34.56 36.09 39.98 46.02 46.10 47.68 47.42 48.93 49.96 50.22' 51.11 52.00 9 Required reserves 34.51 36.30 39.71 45.78 45.44 47.14 46.87 48.27 49.41 49.88 50.82 51.59 10 Monetary base4 173.07 188.66 202.34 220.36 218.99 222.13 223.61 227.04 230.02 230.76 231.51 233.04 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 41.85 38.89 40.70 48.14 47.27 48.88 48.42 49.94 51.03 51.28 53.19 54.62 12 Nonborrowed reserves 41.22 38.12 37.51 46.82 46.51 47.99 47.54 49.14 50.29 50.41 52.18 53.78 13 Nonborrowed reserves plus extended credit3 41.41 38.12 40.09 47.41 47.17 48.22 48.24 49.81 50.68 50.90 52.76 54.15 14 Required reserves 41.35 38.33 39.84 47.09r 46.38 48.08 47.58 49.01 50.12 50.54 52.46 53.87 15 Monetary base4 180.42 192.26 204.18 223.53 221.70 224.88 226.12 229.68 232.55 233.32 235.07 237.26 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.. JJuullyy'' AAuugg..'' SSeepptt..'' OOcctt.. Seasonally adjusted 1 Ml 479.9 527.1 558.5 626.6 676.0 687.6 693.1 701.2 2 M2 1,952.6 2,186.0 2,373.8 2,566.5 2,699.0 2,723.8 2,740.2 2,764.1 M3 2,443.5 2,697.3 2,986.5 3,201.2 3,375.2 3,400.2 3,424.8 3,443.5 4 L 2,850.1 3,162.7 3,532.4 3,839.5 4,003.1 4,031.2 4,061.9 n.a. 5 Debt 4,661.8' 5,197.2 5,950.4 6,769.0 7,209.3 7,284.5 7,353.9 n.a. Ml components 6 Currency2 134.3 148.3 158.5 170.6 177.5 179.0 179.7 181.2 7 Travelers checks3 4.3 4.9 5.2 5.9 6.4 6.5 6.5 6.4 8 Demand deposits4 237.9 242.7 248.4 271.5 288.3 291.8 292.2 293.2 9 Other checkable deposits5 103.4 131.3 146.3 178.6 203.8 210.4 214.8 220.4 Nontransactions components 10 In M26 1,472.7 1,658.9 1,815.4 1,939.9 2,022.9 2,036.1 2,047.1 2,062.9 11 In M3 only7 490.9 511.3 612.7 634.6 676.2 676.5 684.6 679.4 Savings deposits9 12 Commercial Banks 163.7 133.4 122.3 124.5 133.4 136.8 140.9 145.8 13 Thrift institutions 194.2 173.2 167.3 179.1 197.8 200.8 203.5 208.0 Small denomination time deposits9 14 Commercial Banks 380.4 351.1 387.2 384.1 380.0 376.0 372.6 367.7 15 Thrift institutions 472.4 434.1 500.3 496.2 503.7 501.2 498.7 493.7 Money market mutual funds 16 General purpose and broker/dealer 185.2 138.2 167.5 176.5 199.7 200.5 202.2 206.7 17 Institution-only 51.1 43.2 62.7 64.6 77.5 80.8 84.4 84.5 Large denomination time deposits10 18 Commercial Banks11 262.1 228.7 263.7 279.2 280.1 281.9 281.5 279.3 19 Thrift institutions 65.8 101.1 150.2 157.3 165.8 166.1 165.8 164.0 Debt components 70 Federal debt 979.7 1,172.8 1,367.7 1,587.0 1,712.4 1,724.9 1,741.5 n.a. 21 Non-federal debt 3,682.1' 4,024.4' 4,582.8' 5,182.0 5,496.9 5,559.6 5,612.4 n.a. Not seasonally adjusted V Ml 490.9 538.8 570.5 639.9 679.8 684.6 690.7 698.4 73 M2 1,958.6 2,192.8 2,380.8 2,574.7 2,704.3 2,718.6 2,730.9 2,758.1 74 M3 2,453.3 2,707.9 2,997.8 3,213.9 3,372.7 3,394.9 3,417.5 3,439.5 75 L 2,856.4 3,169.3 3,537.6 3,845.7 4,003.2 4,027.5 4,056.9 n.a. 26 Debt 4,655.8' 5,191.6' 5,944.6' 6,762.4 7,173.8 7,253.3 7,331.3 n.a. Ml components 27 Currency2 136.5 150.5 160.9 173.1 179.1 179.9 179.6 180.9 78 Travelers checks3 4.1 4.6 4.9 5.5 7.2 7.3 6.9 6.5 79 Demand deposits4 246.2 251.3 257.3 281.3 290.0 289.0 290.8 292.5 30 Other checkable deposits5 104.1 132.4 147.5 180.1 203.5 208.5 213.5 218.5 Nontransactions components 31 M2« 1,467.7 1,654.0 1,810.3 1,934.7 2,024.5 2,034.0 2,040.2 2,059.7 32 M3 only7 494.7 515.1 617.0 639.2 668.4 676.3 686.6 681.4 Money market deposit accounts 33 Commercial banks 26.3 230.5 267.2 332.4 359.0 363.6 368.1 371.8 34 Thrift institutions 16.9 148.7 149.7 179.6 187.1 189.5 190.2 192.1 Savings deposits8 35 Commercial Banks 162.1 132.2 121.4 123.5 135.1 137.3 140.7 146.1 36 Thrift institutions 193.1 172.3 166.5 178.3 198.7 199.7 202.5 208.7 Small denomination time deposits9 37 Commercial Banks 380.1 351.1 387.6 384.8 379.8 377.9 375.1 370.4 38 Thrift institutions 471.7 434.2 501.2 497.6 502.7 500.5 498.4 496.6 Money market mutual funds 39 General purpose and broker/dealer 185.2 138.2 167.5 176.5 199.7 200.5 202.2 206.7 40 Institution-only 51.1 43.2 62.7 64.6 77.5 80.8 84.4 84.5 Large denomination time deposits10 41 Commercial Banks11 265.2 230.8 265.4 280.9 279.1 282.3 283.6 282.0 42 Thrift institutions 65.8 101.4 150.6 157.8 164.7 166.0 165.7 164.3 Debt components 43 Federal debt 976.4 11,,117700..22 1,364.7 1,583.7 1,695.6 1,713.3 1,734.6 n.a. 44 Non-federal debt 3,679.3' 4,021.4' 4,579.9' 5,178.7' 5,478.1 5,540.0 5,596.7 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • January 1987 NOTES TO TABLE 1.21 1. Composition of the money stock measures and debt is as follows: 2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults commercial banks. Excludes the estimated amount of vault cash held by thrift of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits institutions to service their OCD liabilities. at all commercial banks other than those due to domestic banks, the U.S. 3. Outstanding amount of U.S. dollar-denominated travelers checks of nongovernment, and foreign banks and official institutions less cash items in the bank issuers. Travelers checks issued by depository institutions are included in process of collection and Federal Reserve float; and (4) other checkable deposits demand deposits. (OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer 4. Demand deposits at commercial banks and foreign-related institutions other service (ATS) accounts at depository institutions, credit union share draft than those due to domestic banks, the U.S. government, and foreign banks and accounts, and demand deposits at thrift institutions. The currency and demand official institutions less cash items in the process of collection and Federal deposit components exclude the estimated amount of vault cash and demand Reserve float. Excludes the estimated amount of demand deposits held at deposits respectively held by thrift institutions to service their OCD liabilities. commercial banks by thrift institutions to service their OCD liabilities. M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) 5. Consists of NOW and ATS balances at all depository institutions, credit issued by all commercial banks and overnight Eurodollars issued to U.S. residents union share draft balances, and demand deposits at thrift institutions. Other by foreign branches of U.S. banks worldwide, MMDAs, savings and small- checkable deposits seasonally adjusted equals the difference between the seasondenomination time deposits (time deposits—including retail RPs—in amounts of ally adjusted sum of demand deposits plus OCD and seasonally adjusted demand less than $100,000), and balances in both taxable and tax-exempt general purpose deposits. Included are all ceiling free "Super NOWs," authorized by the and broker/dealer money market mutual funds. Excludes individual retirement Depository Institutions Deregulation committee to be offered beginning Jan. 5, accounts (IRA) and Keogh balances at depository institutions and money market 1983. funds. Also excludes all balances held by U.S. commercial banks, money market 6. Sum of overnight RPs and overnight Eurodollars, money market fund funds (general purpose and broker/dealer), foreign governments and commercial balances (general purpose and broker/dealer), MMDAs, and savings and small banks, and the U.S. government. Also subtracted is a consolidation adjustment time deposits, less the consolidation adjustment that represents the estimated that represents the estimated amount of demand deposits and vault cash held by amount of demand deposits and vault cash held by thrift institutions to service thrift institutions to service their time and savings deposits. their time and savings deposits liabilities. M3: M2 plus large-denomination time deposits and term RP liabilities (in 7. Sum of large time deposits, term RPs and term Eurodollars of U.S. amounts of $100,000 or more) issued by commercial banks and thrift institutions, residents, money market fund balances (institution-only), less a consolidation term Eurodollars held by U.S. residents at foreign branches of U.S. banks adjustment that represents the estimated amount of overnight RPs and Eurodolworldwide and at all banking offices in the United Kingdom and Canada, and lars held by institution-only money market funds. balances in both taxable and tax-exempt, institution-only money market mutual 8. Savings deposits exclude MMDAs. funds. Excludes amounts held by depository institutions, the U.S. government, 9. Small-denomination time deposits—including retail RPs— are those issued money market funds, and foreign banks and official institutions. Also subtracted is in amounts of less than $100,000. All individual retirement accounts (IRA) and a consolidation adjustment that represents the estimated amount of overnight RPs Keogh accounts at commercial banks and thrifts are subtracted from small time and Eurodollars held by institution-only money market mutual funds. deposits. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 10. Large-denomination time deposits are those issued in amounts of $100,000 Treasury securities, commercial paper and bankers acceptances, net of money or more, excluding those booked at international banking facilities. market mutual fund holdings of these assets. 11. Large-denomination time deposits at commercial banks less those held by Debt: Debt of domestic nonfinancial sectors consists of outstanding credit money market mutual funds, depository institutions, and foreign banks and market debt of the U.S. government, state and local governments, and private official institutions. nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- NOTE: Latest monthly and weekly figures are available from the Board's H.6 sumer credit (including bank loans), other bank loans, commercial paper, bankers (508) release. Historical data are available from the Banking Section, Division of acceptances, and other debt instruments. The source of data on domestic Research and Statistics, Board of Governors of the Federal Reserve System, nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt Washington, D.C. 20551. data are based on monthly averages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 1.22 BANK DEBITS AND DEPOSIT TURNOVER Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates. 1986 Apr. May June July Aug. Sept. DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 109,642.3 128,440.8 154,556.0 192,847.2 189,819.7 187,035.1 188,874.2 194,457.3 197,997.9 2 Major New York City banks 47,769.4 57,392.7 70,445.1 95,699.5 87,846.7 89,201.2 91,040.8 92,961.7 95,252.0 3 Other banks 61,873.1 71,048.1 84,110.9 97,147.7 101,973.0 97,833.9 97,833.4 101,495.6 102,745.9 4 ATS-NOW accounts3 1,405.5 1,588.7 1,920.8 2,088.7 2,255.6 2,188.0 2,320.1 2,414.8 2,704.8 5 Savings deposits4 741.4 633.1 539.0 385.2 389.7 382.6 417.4 421.0 428.4 DEPOSIT TURNOVER Demand deposits2 6 All insured banks 379.7 434.4 496.5 593.6 569.7 553.3 556.4 567.6 573.9 7 Major New York City banks 1,528.0 1,843.0 2,168.9 2,635.1 2,457.8 2,504.5 2,417.2 2,437.0 2,519.8 8 Other banks 240.9 268.6 301.8 336.6 342.8 323.5 324.2 333.4 334.5 9 ATS-NOW accounts3 15.6 15.8 16.7 16.0 17.0 16.2 16.8 16.9 18.4 10 Savings deposits4 5.4 5.0 4.5 3.1 3.1 3.0 3.2 3.2 3.1 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 109,517.6 128,059.1 154,108.4 195,373.5 184,827.4 188,924.1 198,657.9 186,892.9 198,433.5 12 Major New York City banks 47,707.4 57,282.4 70,400.9 95,408.5 85,189.6 91,315.2 96,686.1 88,807.6 96,489.1 13 Other banks 64,310.2 70,776.9 83,707.8 99,965.0 99,637.8 97,608.9 101,971.8 98,085.3 101,944.4 14 ATS-NOW accounts3 1,397.0 1,579.5 1,903.4 2,393.2 2,256.6 2,356.3 2,240.4 2,140.8 2,524.1 15 MMDA5 567.4 848.8 1,179.0 1,638.8 1,557.9 1,697.2 1,575.9 1,530.6 1,612.9 16 Savings deposits4 742.0 632.9 538.7 418.7 377.8 385.9 419.9 413.7 414.2 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 379.9 433.5 497.4 600.1 569.4 564.1 587.8 554.7 577.6 18 Major New York City banks 1,510.0 1,838.6 2,191.1 2,661.7 2,487.0 2,570.0 2,620.6 2,421.9 2,603.6 19 Other banks 240.5 267.9 301.6 345.0 343.2 326.0 338.7 326.6 332.6 20 ATS-NOW accounts3 15.5 15.7 16.6 17.9 17.1 17.4 16.3 15.1 17.3 21 MMDA5 2.8 3.5 3.8 4.8 4.5 4.8 4.4 4.2 4.4 22 Savings deposits4 5.4 5.0 4.5 3.4 3.0 3.0 3.2 3.1 3.0 1. Annual averages of monthly figures. NOTE. Historical data for demand deposits are available back to 1970 estimated 2. Represents accounts of individuals, partnerships, and corporations and of in part from the debits series for 233 SMSAs that were available through June states and political subdivisions. 1977. Historical data for ATS-NOW and savings deposits are available back to 3. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- July 1977. Back data are available on request from the Banking Section, Division counts authorized for automatic transfer to demand deposits (ATS). ATS data of Research and Statistics, Board of Governors of the Federal Reserve System, availability starts with December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts, MMDA and special club accounts, such These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • January 1987 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1985 1986 CCaatteeggoorryy Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted 1 Total loans and securities2 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 2,027.1 2,031.6 2 U.S. government securities 276.0 273.1 268.2 273.6 269.5 270.0 274.1 274.8 285.4 290.9 294.1 299.4 3 Other securities 163.3 177.6 192.5 188.1 183.3 182.1 181.9 183.6 186.1 192.3 200.5 196.5 4 Total loans and leases2 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 1,532.5' 1,535.6 5 Commercial and industrial 495.7 499.5 502.1 502.4 506.1 507.8 506.7 508.7 508.7 510.4 510.7' 512.8 6 Bankers acceptances held3.. 4.9 4.9 4.9 4.8 4.9 5.2 5.6 6.1 5.8 5.9 6.2 6.3 7 Other commercial and industrial 490.7 494.7 497.2 497.6 501.2 502.6 501.0 502.6 502.8 504.4 504.5' 506.5 8 U.S. addressees4 482.4 486.0 488.0 488.4 491.3 492.7 490.6 493.1 493.8 495.4 495.7 497.7 9 Non-U.S. addressees4.... 8.3 8.7 9.3 9.2 9.9 9.8 10.5 9.5 9.0 9.1 8.9 8.8 10 Real estate 418.0 422.4 427.1 431.4 436.1 440.7 446.4 450.7 455.9 461.4 465.9' 470.8 11 Individual 289.7 291.5 294.6 297.4 299.5 301.1 303.0 304.5 305.6 306.9 308.8 309.8 12 Security 39.8 40.1 44.1 43.4 50.4 48.0 46.4 42.5 44.8 44.2 44.0 39.2 13 Nonbank financial institutions 32.0 32.6 32.6 31.8' 32.2' 32.3' 33.3 34.7 34.2 34.4 35.1 35.6 14 Agricultural 37.1 36.3 35.9 35.4 34.9 34.6 34.1 33.7 33.3 33.3 33.2 33.3 15 State and political subdivisions 50.0 52.8 60.5 60.3 60.2 59.8 59.5 59.4 59.0 59.4 59.4 58.5 16 Foreign banks 9.0 9.1 9.1 9.2 9.2 9.2 9.3 9.5 9.5 9.3 9.4 9.2 17 Foreign official institutions ... 6.7 6.9 7.0 7.0 6.8 5.3 5.1 6.4 6.5 6.5 6.4 6.3 18 Lease financing receivables... 18.4 18.8 19.4 19.6 19.8 19.9 19.8 20.0 20.0 20.2 20.4 20.4 19 All other loans 40.3 39.6 36.9' 35.8' 36.6' 37.3 37.9 35.4 35.9 38.5 39.3 39.7 Not seasonally adjusted 20 Total loans and securities2 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 2,024.8 2,026.7 21 U.S. government securities 273.7 271.0 267.7 275.0 273.2 274.0 275.4 276.2 285.3 289.1 292.5 295.1 2 2 2 3 T O o th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,4 1 3 6 8 3 . . 7 3 1,4 1 6 7 2 8. . 7 9 1,4 1 7 9 3 3 . . 3 8 1,4 1 6 8 8 8 . . 5 9 1,4 1 8 8 7 3 . . 1 9 1,4 1 9 8 4 1 . . 7 8 1,4 1 9 8 9 2 . . 0 2 1,5 1 0 8 6 2 . . 7 5 1,5 1 1 8 2 3 . . 1 9 1,5 1 1 9 8 2 . . 7 1 1, 2 5 0 3 0 1. . 9 5 1,5 1 3 9 5 6 . . 6 0 2 2 4 5 Co B m a m nk e e rc rs i al a c a c n e d p t i a n n d c u es s tr h i e a l l d . 3 . . . 49 5 4. . 8 0 50 5 1 . . 2 5 50 4 1. . 4 9 50 4 0 . . 7 1 506 5 . . 9 0 510 5. . 2 0 50 5 8. . 5 5 50 6 9. . 4 0 50 6 8. . 6 0 508 5 . . 3 9 50 6 9 . . 0 9 51 6 1. . 8 1 26 Other commercial and 2 2 7 8 N U o . i S n n . d - U u ad s . t S d r . r i a e l a s s d e d e r s e 4 ssees4... 4 4 8 8 1 8 9 . . . 0 8 7 4 4 8 9 9 7 6 . . . 3 0 4 4 4 8 9 9 7 6 . . . 2 3 5 4 48 9 9 6 5 . . . 1 3 4 4 5 9 0 9 2 1 . . . 2 7 9 4 5 9 0 9 5 4 . . . 4 5 9 4 5 9 0 3 9 3 . . . 3 7 0 4 5 9 0 4 9 3 . . . 0 4 4 4 5 9 0 9 3 2 . . . 3 3 6 4 5 9 0 9 3 2 . . . 4 1 4 4 5 9 0 9 3 4 . . . 2 9 6 ' 4 5 9 0 9 6 5 . . . 1 5 6 29 Real estate 419.2 423.3 427.3 430.6 434.9 439.5 445.2 450.2 455.8 461.7 466.9 472.2 30 Individual 291.0 294.8 297.0 296.3 296.8 298.6 301.1 303.1 304.9 307.2 310.2 311.4 31 Security 41.0 45.4 46.8 42.6 49.5 48.5 45.6 42.5 43.0 41.3 41.5 38.4 32 Nonbank financial institutions 32.1 33.4 32.8' 31.2' 31.6' 32.2 33.1 34.6 34.3 34.6 35.3 35.4 33 Agricultural 37.2 36.0 35.2 34.5 34.0 33.9 34.1' 34.2 34.1 34.1' 34.(K 33.8 34 State and political subdivisions 50.0 52.8 60.5 60.3 60.2 59.8 59.5 59.4 59.0 59.4 59.4 58.5 35 Foreign banks 9.3 9.5 9.3 9.3 9.1 9.0 9.1 9.2 9.4 9.1 9.4 9.3 36 Foreign official institutions .. 6.7 6.9 7.0 7.0 6.8 5.3 5.1 6.4 6.5 6.5 6.4 6.3 37 Lease financing receivables.. 18.3 18.8 19.6 19.8 19.8 19.9 19.9 20.0 20.0 20.1 20.3 20.3 38 All other loans 39.1 40.5 36.4' 36.6' 37.5' 38.1 37.9 37.7 36.5 36.3 38.7 38.2 1. Data are prorated averages of Wednesday estimates for domestically char- 2. Excludes loans to commercial banks in the United States. tered insured banks, based on weekly sample reports and quarterly universe 3. Includes nonfinancial commercial paper held. reports. For foreign-related institutions, data are averages of month-end estimates 4. United States includes the 50 states and the District of Columbia. based on weekly reports from large U.S. agencies and branches and quarterly NOTE. These data also appear in the Board's G.7 (407) release. For address, see reports from all U.S. agencies and branches, New York investment companies inside front cover. majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1985 1986 SSoouurrccee Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Total nondeposit funds 1 Seasonally adjusted2 122.3 128.2 131.7 131.7 141.2 134.1 135.7 132.6 136.0 137.7 142.3 139.8 2 Not seasonally adjusted 123.4 127.9 131.8 134.4 143.7 135.0 137.8r 131.3' 132.0r 136.7 140.6 138.0 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 149.4 154.1 151.6 152.7 160.6 160.4 157.9 157.1 166.2 168.0 167.3 167.6 4 Not seasonally adjusted 150.5 153.7 151.6 155.3 163.1 161.3 160.0 155.8 162.3 166.9 165.6 165.9 5 Net balances due to foreign-related institutions, not seasonally adjusted -27.2 -25.9 -19.9 -21.0 -19.4 -26.3 -22.2 -24.5 -30.2 -30.2 -25.0 -27.8 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -30.2 -31.6 -28.0 -25.8 -26.5 -30.2 -29.3 -30.5 -33.8 -31.2 -29.2 -31.9 7 Gross due from balances 74.1 76.3 74.3 69.4 71.7 75.2 72.9 72.2 73.9 75.2 74.0 73.5 8 Gross due to balances 43.9 44.7 46.4 43.6 45.2 45.1 43.6 41.7 40.1 44.0 44.8 41.6 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 3.1 5.7 8.1 4.8 7.1 3.9 7.1r 6.0 3.6 1.0 4.2 4.0 10 Gross due from balances 55.9 56.7 57.6 60.0 60.7 62.5 60.0 62.8 64.2 66.2 67.9 68.3 11 Gross due to balances 58.9 62.5 65.7 64.8 67.8 66.4 67.1 68.8 67.8 67.2 72.1 72.3 Security RP borrowings 12 Seasonally adjusted® 85.9 89.4 87.6 89.5 89.7 89.7 89.0 89.2 95.7 96.3 96.0 96.5 13 Not seasonally adjusted 87.0 89.0 87.7 92.2 92.2 90.6 91.2 88.0 91.8 95.3 94.3 94.8 U.S. Treasury demand balances7 14 Seasonally adjusted 13.5 17.5 19.0 21.1 15.7 17.4 21.3 18.5 14.7 13.1 16.0 13.2 15 Not seasonally adjusted 7.9 14.6 24.0 24.2 15.7 17.8 21.8 16.1 16.8 11.0 18.2 15.3 Time deposits, $100,000 or more8 16 Seasonally adjusted 335.9 337.6 349.4 351.9 347.7 346.9 340.4 339.8 338.5r 342.9' 342.5r 340.1 17 Not seasonally adjusted 337.5 339.4 348.3 350.7 348.3 343.5 339.7 338.1 337.5r 343.2' 344.6r 342.8 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 DomesticN onfinancial Statistics • January 1987 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars 1985 1986 AAccccoouunntt Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. ALL COMMERCIAL BANKING INSTITUTIONS' 1 Loans and securities 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 2,171.1 2,173.2 2 Investment securities 420.4 432.5 432.8 427.2 429.5 430.9 432.6 445.7 455.1 464.6 467.4 3 U.S. government securities 253.9 251.9 255.1 253.7 255.8 257.7 259.6 269.6 272.2 275.9 281.8 4 Other 166.5 180.6 177.7 173.5 173.6 173.2 173.0 176.1 183.0 188.7 185.6 5 Trading account assets 31.1 30.1 34.0 30.1 27.8 27.0 27.4 28.7 29.3 27.9 26.0 6 Total loans 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 1,678.5 1,679.8 7 Interbank loans 150.6 140.4 143.5 146.0 155.7 146.2 139.2 148.6 149.4 145.3 146.7 8 Loans excluding interbank 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 1,533.2 1,533.1 9 Commercial and industrial 500.2 496.7 501.8 508.5 510.5 506.2 512.3 507.3 510.1 512.1 512.6 10 Real estate 423.7 428.7 431.5 435.9 441.7 446.4 451.4 457.6 463.2 467.7 473.5 11 Individual 296.0 297.4 296.4 296.9 300.4 301.1 304.0 305.6 308.4 310.5 311.8 12 All other 246.7 239.4 238.7 246.9 247.8 243.6 238.7 240.5 238.8 242.9 235.2 13 Total cash assets 213.3 187.3 193.7 198.1 209.9 221.0 196.0 206.2 205.8 196.6 200.4 14 Reserves with Federal Reserve Banks 27.6 21.9 26.2 29.1 25.5 30.2 27.9 28.2 27.9 27.8 31.2 15 Cash in vault 22.2 23.0 22.7 21.8 22.3 23.9 23.0 23.3 23.7 22.9 23.5 16 Cash items in process of collection ... 79.5 64.2 66.9 68.8 80.7 84.6 67.3 72.1 73.5 66.3 66.3 17 Demand balances at U.S. depository institutions 36.0 31.3 31.8 31.1 34.7 36.8 32.0 33.8 33.6 32.3 32.6 18 Other cash assets 48.0 47.0 46.1 47.4 46.7 45.5 45.8 48.7 47.1 47.4 46.8 19 Other assets 201.9 187.0 186.5 195.3 207.0 195.9 196.6 196.6 196.2 200.8 198.3 20 Total assets/total liabilities and capital . .. 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 2,568.4 2,571.9 21 Deposits 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 1,830.8 1,843.8 22 Transaction deposits 536.9 488.8 492.1 502.5 540.7 542.7 523.3 540.0 544.2 537.4 547.5 23 Savings deposits 452.0 454.2 457.2 462.0 467.8 477.3 482.4 490.8 497.7 504.4 514.8 24 Time deposits 783.6 796.5 797.1 798.3 789.9 787.5 786.3 788.7 791.7 789.0 781.5 25 Borrowings 367.8 364.4 374.7 373.1 390.7 367.4 366.8 379.2 377.3 388.1 380.0 26 Other liabilities 175.8 167.6 169.1 179.3 170.4 173.1 168.5 168.6 174.7 177.5 175.1 27 Residual (assets less liabilities) 167.7 168.2 168.8 169.7 170.8 170.3 170.9 169.4 170.8 172.1 173.0 MEMO 28 U.S. government securities (including trading account) 269.7 269.8 278.4 273.7 274.0 275.1 276.5 288.8 289.8 292.5 298.6 29 Other securities (including trading account) 181.8 192.8 188.4 183.6 183.3 182.8 183.5 185.6 194.6 200.0 194.8 DOMESTICALLY CHARTERED COMMERCIAL BANKS2 30 Loans and securities 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 2,039.8 2,046.2 31 Investment securities 409.9 421.1 420.8 416.0 416.1 417.1 419.6 432.5 440.2 448.0 450.7 32 U.S. government securities 249.0 247.0 249.6 248.5 248.8 250.2 253.1 263.2 264.5 267.5 272.9 33 Other 160.9 174.1 171.2 167.5 167.2 166.9 166.5 169.4 175.7 180.5 177.8 34 Trading account assets 31.1 30.1 34.0 30.1 27.8 27.0 27.4 28.7 29.3 27.9 26.0 35 Total loans 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 1,564.0 1,569.5 36 Interbank loans 123.8 115.8 115.8 120.2 129.3 123.3 117.3 122.7 123.1 118.9 122.4 37 Loans excluding interbank 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 1,445.1 1,447.2 38 Commercial and industrial 445.3 442.5 446.2 448.2 452.3 449.8 452.5 448.4 448.4 447.2 447.2 39 Real estate 418.4 423.6 426.4 430.7 436.3 440.7 445.8 451.9 457.3 461.7 467.7 40 Individual 295.7 297.1 296.2 296.6 300.1 300.8 303.6 305.3 308.1 310.1 311.5 41 All other 230.1 224.1 224.7 230.7 231.4 226.7 223.9 224.6 222.9 226.1 220.8 4? Total cash assets 197.2 171.1 179.1 182.7 194.3 205.8 180.1 187.8 189.3 180.4 183.1 43 Reserves with Federal Reserve Banks 25.8 21.0 25.5 28.4 24.4 28.7 26.3 27.2 26.6 26.9 29.7 44 Cash in vault 22.2 23.0 22.6 21.7 22.2 23.8 22.9 23.2 23.7 22.8 23.4 45 Cash items in process of collection ... 79.3 63.8 66.5 68.4 80.3 84.2 66.7 71.7 73.1 65.9 65.6 46 Demand balances at U.S. depository institutions 34.3 29.4 30.1 29.4 33.0 35.1 30.2 32.0 31.9 30.5 30.8 47 Other cash assets 35.7 34.0 34.3 34.7 34.3 34.0 34.0 33.6 34.1 34.4 33.5 48 Other assets 150.0 137.8 134.6 144.0 150.3 142.8 144.1 143.2 141.7 145.5 142.8 49 Total assets/total liabilities and capital . .. 2,301.6 2,263.1 2,277.8 2,299.1 2,337.9 2,334.0 2,314.1 2,345.0 2,360.3 2,365.7 2,372.1 50 Deposits 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 1,775.2 1,788.6 51 Transaction deposits 529.5 481.6 484.8 495.0 533.1 535.3 515.5 532.1 536.1 529.3 539.7 52 Savings deposits 450.3 452.4 455.3 460.1 465.8 475.2 480.3 488.7 495.5 502.1 512.5 53 Time deposits 744.7 755.7 758.1 758.1 750.1 748.1 745.6 747.2 748.2 743.8 736.5 54 Borrowings 295.7 298.0 304.9 304.8 309.1 294.2 293.5 300.5 295.5 305.2 299.3 55 Other liabilities 116.9 110.5 109.0 114.6 112.0 113.9 111.5 110.3 117.3 116.4 114.3 56 Residual (assets less liabilities) 164.6 165.0 165.6 166.5 167.7 167.2 167.8 166.2 167.7 168.9 169.8 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 Account Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 1 Cash and balances due from depository institutions 108,527 100,020 98,357 90,021 107,770 92,984 118,066 100,532 92,899 2 Total loans, leases and securities, net 970,361 962,588 966,701 957,371 973,244 965,268 967,681 961,680 957,252 3 U.S. Treasury and government agency 106,507 103,985 105,436 102,040 104,097 105,279 104,527 104,266 107,780 4 Trading account 24,875 22,593 22,808 19,947 20,348 20,742 19,315 18,823 20,023 5 Investment account, by maturity 81,633 81,392 82,628 82,092 83,749 84,536 85,212 85,443 87,757 6 One year or less 17,314 17,956 18,238 17,876 17,274 17,310 17,257 17,141 17,087 7 Over one through five years 38,808 38,011 38,436 37,766 38,932 39,826 40,324 40,103 39,946 8 Over five years 25,510 25,426 25,954 26,450 27,544 27,400 27,631 28,200 30,724 9 Other securities 79,275 78,480 77,701 76,348 75,762 74,484 73,875 73,575 72,350 10 Trading account 8,788 7,785 7,098 6,223 5,821 4,901 4,866 5,074 4,535 11 Investment account 70,487 70,695 70,604 70,125 69,941 69,584 69,009 68,501 67,816 12 States and political subdivisions, by maturity 61,327 61,329 61,466 61,013 60,448 60,126 59,466 59,024 58,287 13 One year or less 10,623 10,684 11,508 11,068 11,007 11,107 10,916 10,811 10,252 14 Over one year 50,704 50,645 49,959 49,945 49,441 49,020 48,550 48,213 48,035 15 Other bonds, corporate stocks, and securities 9,160 9,365 9,137 9,112 9,492 9,457 9,543 9,477 9,529 16 Other trading account assets 5,106 5,351 5,989 5,425 5,346 5,375 5,399 4,580 5,096 17 Federal funds sold1 61,056 62,117 58,974 56,348 64,656 62,627 63,450 60,516 55,978 18 To commercial banks 38,529 37,813 34,772 32,312 39,054 39,012 38,846 35,750 33,418 19 To nonbank brokers and dealers in securities 15,039 13,830 15,470 15,238 17,219 13,939 15,636 14,772 14,327 20 To others 7,488 10,474 8,731 8,798 8,383 9,677 8,967 9,994 8,233 21 Other loans and leases, gross2 739,576 733,892 739,872 738,422 744,423 738,664 741,614 739,961 737,259 22 Other loans, gross2 723,334 717,613 723,467 721,964 727,987 722,193 725,327 723,669 720,957 23 Commercial and industrial2 258,439 256,616 258,329 256,623 259,659 258,542 259,145 258,701 257,388 24 Bankers acceptances and commercial paper 2,447 2,257 2,268 2,257 2,257 2,286 2,484 2,390 2,387 25 All other 255,991 254,359 256,061 254,366 257,402 256,255 256,660 256,311 255,001 26 U.S. addressees 251,931 250,330 252,077 250,390 253,510 252,398 252,757 252,469 251,155 27 Non-U.S. addressees 4,061 4,029 3,984 3,976 3,892 3,857 3,903 3,842 3,846 28 Real estate loans2 196,674 197,426 198,658 198,821 198,294 198,712 199,567 200,696 200,268 29 To individuals for personal expenditures 138,596 138,936 139,364 139,649 140,101 140,135 140,460 140,712 141,026 30 To depository and financial institutions 47,876 47,496 48,177 48,611 49,250 48,738 48,769 48,198 47,203 31 Commercial banks in the United States 14,938 15,045 14,915 16,616 16,644 15,581 15,642 15,724 15,643 32 Banks in foreign countries 5,774 5,058 5,258 5,304 5,260 6,035 5,858 4,810 4,575 33 Nonbank depository and other financial institutions . 27,163 27,393 28,004 26,691 27,347 27,122 27,269 27,664 26,984 34 For purchasing and carrying securities 17,567 15,269 16,294 16,043 16,791 14,473 14,855 13,816 12,962 35 To finance agricultural production 6,059 6,008 6,017 5,960 5,997 6,008 5,922 5,909 5,776 36 To states and political subdivisions 36,443 36,230 36,157 36,251 36,080 35,908 35,724 35,531 35,472 37 To foreign governments and official institutions 3,234 3,121 3,170 3,086 3,194 3,153 3,224 3,248 3,246 38 All other 18,447 16,510 17,302 16,920 18,620 16,524 17,660 16,856 17,614 39 Lease financing receivables 16,242 16,279 16,405 16,458 16,436 16,472 16,287 16,292 16,302 40 LESS: Unearned income 4,846 4,869 4,884 4,902 4,877 4,910 4,933 4,944 4,950 41 Loan and lease reserve2 16,314 16,369 16,388 16,311 16,163 16,252 16,251 16,273 16,261 42 Other loans and leases, net2 718,416 712,654 718,600 717,210 723,382 717,503 720,430 718,744 716,048 43 All other assets 127,731 126,303 129,236 126,746 133,767 129,724 127,824 124,531 124,789 44 Total assets 1,206,619 1,188,911 1,194,295 1,174,138 1,214,781 1,187,977 1,213,570 1,186,743 1,174,940 45 Demand deposits 234,522 217,506 219,345 209,278 241,097 215,872 246,596 212,947 212,267 46 Individuals, partnerships, and corporations 178,174 168,931 169,593 159,937 185,025 167,357 187,010 163,396 163,670 47 States and political subdivisions 5,519 4,668 5,524 5,138 6,103 4,828 6,030 5,458 4,914 48 U.S. government 1,607 2,611 2,169 2,972 1,490 2,785 3,238 2,495 2,580 49 Depository institutions in United States 29,377 25,239 25,614 24,263 29,178 23,713 31,249 24,214 24,298 50 Banks in foreign countries 7,260 6,495 6,498 6,580 7,065 6,847 7,599 6,478 6,104 51 Foreign governments and official institutions 701 811 972 854 927 794 874 911 828 52 Certified and officers' checks 11,884 8,751 8,975 9,535 11,310 9,547 10,595 9,995 9,872 53 Transaction balances other than demand deposits 51,042 50,618 50,375 48,643 50,510 51,391 51,377 50,927 50,502 54 Nontransaction balances 499,540 500,448 499,768 499,468 501,642 500,989 501,470 499,512 498,878 55 Individuals, partnerships and corporations 461,099 461,923 461,489 460,646 463,269 462,292 463,149 461,189 460,398 56 States and political subdivisions 25,716 25,673 25,526 25,660 25,653 25,926 25,879 25,926 25,868 57 U.S. government 883 863 850 799 860 870 878 893 910 58 Depository institutions in the United States 10,612 10,752 10,666 11,095 10,606 10,618 10,346 10,287 10,489 59 Foreign governments, official institutions and banks... 1,230 1,237 1,237 1,269 1,254 1,283 1,218 1,218 1,213 60 Liabilities for borrowed money 253,589 252,855 255,181 249,389 255,179 256,038 249,894 254,958 244,891 61 Borrowings from Federal Reserve Banks 730 33,,552211 150 787 230 1,680 100 1,688 195 62 Treasury tax-and-loan notes 2,863 880088 16,366 19,716 18,470 6,362 2,267 6,514 6,846 63 All other liabilities for borrowed money3 249,996 248,527 238,665 228,886 236,479 247,996 247,527 246,755 237,850 64 Other liabilities and subordinated note and debentures. 85,157 84,307 86,725 84,291 82,911 79,827 80,471 84,513 84,438 65 Total liabilities 1,123,850 1,105,734 1,111,393 1,091,070 1,131,340 1,104,116 1,129,808 1,102,858 1,090,977 66 Residual (total assets minus total liabilities)4 82,769 83,177 82,902 83,068 83,441 83,861 83,762 83,885 83,964 MEMO 67 Total loans and leases (gross) and investments adjusted5. 938,054 930,968 938,286 929,655 938,586 931,837 934,376 931,423 929,403 68 Total loans and leases (gross) adjusted2'5 747,165 743,151 749,159 745,843 753,381 746,699 750,575 749,002 744,176 69 Time deposits in amounts of $100,000 or more 153,714 154,143 153,741 154,654 153,604 153,607 152,532 152,852 152,050 70 Loans sold outright to affiliates—total6 1,706 1,729 1,738 1,748 1,744 1,729 1,705 1,736 1,703 71 Commercial and industrial 1,023 1,032 1,041 1,046 1,047 1,027 1,007 1,039 1,006 72 Other 684 697 697 702 698 702 698 697 697 73 Nontransaction savings deposits (including MMDAs) 215,324 215,623 215,671 214,955 218,426 218,107 220,259 218,405 218,429 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. 3J, J977, 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 • January 1987 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures except as noted 1986 AAccccoouunntt Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 1 Cash and balances due from depository institutions 24,696 25,700 22,741 20,592 30,803 21,423 28,%7 28,537 22,075 2 Total loans, leases and securities, net1 202,915 202,817 201,427 202,739 207,604 205,670 207,479 205,107 202,955 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 10,735 10,666 10,155 10,989 11,159 11,404 11,346 11,437 13,582 6 One year or less 1,197 1,246 1,293 1,363 1,311 1,322 1,342 1,348 1,398 7 Over one through five years 5,689 5,547 5,133 5,344 5,290 5,490 5,594 5,690 5,659 8 Over five years 3,849 3,872 3,729 4,281 4,557 4,592 4,410 4,400 6,525 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 17,221 17,089 17,074 16,967 16,933 16,722 16,510 16,343 16,188 12 States and political subdivisions, by maturity 14,927 14,772 14,982 14,957 14,859 14,702 14,492 14,325 14,112 13 One year or less 1,767 1,767 2,427 2,386 2,423 2,374 2,333 2,354 2,099 14 Over one year 13,160 13,005 12,555 12,570 12,436 12,328 12,160 11,970 12,012 15 Other bonds, corporate stocks and securities 2,294 2,316 2,092 2,010 2,073 2,020 2,017 2,018 2,076 16 Other trading account assets2 0 0 0 0 0 0 0 0 0 Loans and leases 17 Federal funds sold3 26,009 30,352 26,664 25,452 28,340 28,823 30,596 28,731 24,443 18 To commercial banks 13,491 15,754 12,619 11,349 12,364 13,994 15,647 12,971 10,704 19 To nonbank brokers and dealers in securities 7,1% 6,226 7,595 7,020 9,119 6,703 7,585 7,711 6,958 20 To others 5,322 8,373 6,450 7,083 6,858 8,126 7,363 8,049 6,780 21 Other loans and leases, gross 154,960 150,798 153,636 155,358 157,044 154,724 155,029 154,608 154,790 22 Other loans, gross 151,768 147,593 150,411 152,116 153,786 151,445 151,745 151,305 151,473 23 Commercial and industrial 57,652 57,037 57,477 56,997 58,221 58,338 58,801 58,647 58,148 24 Bankers acceptances and commercial paper 563 580 504 459 457 454 558 622 629 25 All other 57,089 56,456 56,973 56,537 57,764 57,884 58,243 58,025 57,519 26 U.S. addressees 56,628 55,975 56,505 56,035 57,337 57,490 57,843 57,628 57,154 27 Non-U.S. addressees 460 482 469 502 427 394 400 397 366 28 Real estate loans 33,026 33,061 33,488 33,770 33,553 33,616 33,563 33,943 34,190 29 To individuals for personal expenditures 19,357 19,446 19,544 19,434 19,575 19,596 19,701 19,740 19,702 30 To depository and financial institutions 17,009 16,410 16,706 18,478 18,076 18,069 17,607 17,358 16,950 31 Commercial banks in the United States 6,686 6,592 6,780 8,469 8,432 7,857 7,599 7,707 7,632 32 Banks in foreign countries 2,964 2,246 2,279 2,712 2,526 3,064 2,926 2,437 2,015 33 Nonbank depository and other financial institutions 7,359 7,571 7,646 7,297 7,118 7,149 7,082 7,215 7,302 34 For purchasing and carrying securities 9,040 7,401 8,735 8,655 8,654 7,355 7,018 7,159 6,784 35 To finance agricultural production 325 329 316 314 362 353 300 309 282 36 To states and political subdivisions 8,879 8,853 8,915 9,011 8,830 8,787 8,710 8,669 8,676 37 To foreign governments and official institutions 836 735 815 749 868 845 916 918 899 38 All other 5,643 4,321 4,415 4,708 5,646 4,486 5,129 4,561 5,842 39 Lease financing receivables 3,192 3,205 3,225 3,242 3,259 3,279 3,284 3,304 3,317 40 LESS: Unearned income 1,466 1,473 1,480 1,484 1,477 1,510 1,512 1,516 1,518 41 Loan and lease reserve 4,545 4,615 4,622 4,543 4,3% 4,492 4,489 4,497 4,530 42 Other loans and leases, net 148,950 144,710 147,534 149,331 151,172 148,722 149,028 148,595 148,742 43 All other assets4 75,527 71,300' 73,426 70,069 72,822 70,463 69,516 66,849 68,856 44 Total assets 303,138 299,816r 297,594 293,400 311,228 297,556 305,963 300,493 293,886 Deposits 45 Demand deposits 58,598 55,811 56,120 54,785 66,457 55,279 65,283 54,555 54,312 46 Individuals, partnerships, and corporations 39,186 38,342 39,024 36,487 45,477 38,034 43,773 36,298 37,308 47 States and political subdivisions 496 535 709 790 1,115 654 1,200 792 544 48 U.S. government 213 493 209 494 213 592 565 514 495 49 Depository institutions in the United States 6,515 6,901 6,347 6,626 8,276 5,594 7,707 6,035 6,089 50 Banks in foreign countries 5,963 5,247 5,232 5,414 5,772 5,490 6,410 5,276 4,948 51 Foreign governments and official institutions 575 665 812 693 776 659 731 758 672 52 Certified and officers' checks 5,649 3,627 3,787 4,281 4,830 4,255 4,8% 44,,888822 44,,225555 53 Transaction balances other than demand deposits ATS, NOW, Super NOW, telephone transfers) 5,965 6,016 6,035 5,819 6,064 6,190 6,171 6,126 6,113 54 Nontransaction balances 92,228 92,212 92,525 92,744 94,%9 93,852 95,261 94,472 93,896 55 Individuals, partnerships and corporations 83,534 83,424 83,884 83,755 85,871 84,554 86,182 85,255 84,846 56 States and political subdivisions 5,667 5,645 5,535 5,622 5,779 5,941 5,821 55,,995533 5,947 57 U.S. government 84 90 74 72 68 73 78 8800 79 58 Depository institutions in the United States 2,317 2,425 2,403 2,635 2,603 2,632 2,554 2,549 2,399 59 Foreign governments, official institutions and banks 625 628 628 659 648 651 626 634 626 60 Liabilities for borrowed money 83,395 83,383 79,921 77,216 80,615 81,933 77,863 81,937 76,552 61 Borrowings from Federal Reserve Banks 0 2,540 0 250 0 1,450 0 1,380 0 62 Treasury tax-and-loan notes 942 119 3,907 4,736 3,748 1,207 501 2,005 1,751 63 All other liabilities for borrowed money5 82,453 80,724 76,014 72,230 76,867 79,275 77,361 78,552 74,801 64 Other liabilities and subordinated note and debentures 35,880 35,205' 35,855 35,785 35,804 32,878 33,929 35,974 35,799 65 Total liabilities 276,066 272,628' 270,456 266,350 283,910 270,131 278,507 273,064 266,672 66 Residual (total assets minus total liabilities)6 27,072 27,188 27,138 27,051 27,318 27,424 27,456 27,428 27,214 MEMO 67 Total loans and leases (gross) and investments adjusted1'7 188,748 186,558 188,130 188,949 192,680 189,822 190,234 190,442 190,666 68 Total loans and leases (gross) adjusted7 160,792 158,804 160,902 160,993 164,588 161,6% 162,378 162,661 160,896 69 Time deposits in amounts of $100,000 or more 32,608 32,668 32,927 32,954 33,560 33,429 33,607 33,669 33,418 1. Excludes trading account securities. 6. Not a measure of equity capital for use in capital adequacy analysis or for 2. Not available due to confidentiality. other analytic uses. 3. Includes securities purchased under agreements to resell. 7. Exclusive of loans and federal funds transactions with domestic commercial 4. Includes trading account securities. banks. 5. Includes federal funds purchased and securities sold under agreements to NOTE. These data also appear in the Board's H.4.2 (504) release. For address, repurchase. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS' Assets and Liabilities Millions of dollars, Wednesday figures 1986 AAccccoouunntt Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 1 Cash and due from depository institutions. 10,587 10,064 9,388 9,647 9,352 10,380 10,020 10,245 10,592 2 Total loans and securities 73,793 72,869 73,551 76,462 76,737 75,876 75,644 73,183 74,011 3 U.S. Treasury and govt, agency securities 5,613 5,736 5,947 5,917 5,931 6,011 5,768 5,750 6,230 4 Other securities 5,491 5,620 5,692 5,710 5,712 5,712 5,788 5,374 5,371 5 Federal funds sold2 3,976 3,755 3,771 4,805 4,093 5,377 5,773 5,480 4,682 6 To commercial banks in the United States 3,003 2,789 2,855 3,630 3,089 4,352 4,594 4,174 3,902 7 Toothers 972 966 916 1,175 1,004 1,026 1,178 1,306 780 8 Other loans, gross 58,714 57,758 58,142 60,030 61,000 58,776 58,316 56,580 57,728 9 Commerci^ and industrial 33,964 34,172 34,604 35,910 36,724 35,588 35,503 35,678 36,307 10 Bankers acceptances and commercial paper 2,984 3,143 3,223 3,225 3,305 3,064 2,977 33,,005588 33,,003366 11 Mother 30,980 31,029 31,381 32,685 33,419 32,524 32,526 32,620 33,271 12 U.S. addressees 28,702 28,682 29,064 30,326 31,156 30,294 30,183 30,240 30,955 13 Non-U.S. addressees 2,278 2,347 2,317 2,359 2,263 2,229 2,343 2,381 2,316 14 To financial institutions 16,918 16,194 15,605 15,680 15,877 15,350 14,776 13,922 14,174 15 Commercial banks in the United States . 13,932 13,167 12,679 12,696 12,535 12,196 11,458 10,786 11,022 16 Banks in foreign countries 1,202 1,182 1,166 1,161 1,291 1,064 1,109 986 1,038 17 Nonbank financial institutions 1,784 1,845 1,760 1,822 2,051 2,089 2,209 2,150 2,114 18 To foreign govts, and official institutions.. 605 605 602 642 561 567 702 541 532 19 For purchasing and carrying securities .. 2,918 2,495 2,919 3,403 3,257 2,802 2,841 2,022 2,249 20 All other 4,309 4,292 4,411 4,395 4,581 4,468 4,492 4,417 4,465 21 Other assets (claims on nonrelated parties).. 23,007 22,738 22,900 22,880 23,087 23,221 22,958 23,303 23,280 22 Net due from related institutions 14,968 13,706 13,389 13,552 15,675 15,791 15,050 13,708 12,934 23 Total assets 122,355 119,378 119,229 122,542 124,850 125,268 123,673 120,438 120,817 24 Deposits or credit balances due to other than directly related institutions.... 35,704 35,779 36,561 36,579 36,775 36,344 36,446 35,342 3366,,660088 25 Transaction accounts and credit balances3 3,232 3,134 3,275 3,149 3,097 3,312 3,574 3,050 3,284 26 Individuals, partnerships, and corporations 1,802 1,800 1,777 1,778 1,721 1,994 1,882 11,,882255 11,,881111 27 Other 1,430 1,335 1,498 1,371 1,376 1,318 1,692 1,224 1,473 28 Nontransaction accounts4 32,472 32,644 33,286 33,430 33,677 33,032 32,872 32,292 33,324 29 Individuals, partnerships, and corporations 26,349 26,508 27,253 27,427 27,646 26,748 2266,,664422 2266,,001144 2277,,112299 30 Other 6,122 6,136 6,033 6,003 6,031 6,284 6,230 6,278 6,195 31 Borrowings from other than directly related institutions 51,432 48,755 47,563 47,806 50,875 52,898 5500,,887733 4466,,995566 4466,,777722 32 Federal funds purchased5 26,483 26,124 24,985 25,059 27,680 31,046 28,947 25,278 24,966 33 From commercial banks in the United States 17,888 17,387 16,577 15,189 19,103 21,302 19,317 15,266 16,527 34 From others 8,595 8,737 8,408 9,870 8,577 9,744 9,630 10,012 8,439 35 Other liabilities for borrowed money 24,949 22,632 22,578 22,747 23,195 21,852 21,926 21,678 21,805 36 To commercial banks in the United States 22,452 20,141 20,129 20,457 21,026 19,651 1199,,884411 19,303 1199,,774411 37 To others 2,497 2,491 2,450 2,290 2,168 2,201 2,085 2,374 2,065 38 Other liabilities to nonrelated parties 24,155 24,138 24,676 24,815 24,750 24,931 24,570 24,805 24,833 39 Net due to related institutions 11,064 10,706 10,428 13,341 12,450 11,095 11,784 13,335 12,605 40 Total liabilities 122,355 119,378 119,229 122,542 124,850 125,268 123,673 120,438 120,817 MEMO 41 Total loans (gross) and securities adjusted6 56,858 56,913 58,018 60,136 61,113 59,328 5599,,559911 5588,,222244 5599,,008866 42 Total loans (gross) adjusted6 45,754 45,557 46,378 48,508 49,469 47,605 48,035 47,100 47,486 1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and 4. Includes savings deposits, money market deposit accounts, and time agencies of foreign banks that include those branches and agencies with assets of deposits. $750 million or more on June 30, 1980, plus those branches and agencies that had 5. Includes securities sold under agreements to repurchase. reached the $750 million asset level on Dec. 31, 1984. 6. Exclusive of loans to and federal funds sold to commercial banks in the 2. Includes securities purchased under agreements to resell. United States. 3. Includes credit balances, demand deposits, and other checkable deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • January 1987 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 288.9 291.8 293.5 302.7 286.3 298.4 299.3 321.0 307.4 322.4 2 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. Apr. May June July Aug. Sept. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 165,829 166,436 187,658 237,586 300,899 297,108 309,843 310,211 311,435 326,601 326,567 Financial companies3 Dealer-placed paper4 2 Total 30,333 34,605 44,455 56,485 78,443 83,871 87,423 89,757 90,038 94,084 97,994 3 Bank-related (not seasonally adjusted) 6,045 2,516 2,441 2,035 1,602 1,520 1,575 1,568 1,772 1,799 1,980 Directly placed paper5 4 Total 81,660 84,393 97,042 110,543 135,504 135,801 142,252 142,933 142,121 149,200 147,497 5 Bank-related (not seasonally adjusted) 26,914 32,034 35,566 42,105 44,778 37,835 39,009 40,147 39,067 40,415 37,455 6 Nonfinancial companies6 53,836 47,437 46,161 70,558 86,952 77,436 80,168 78,021 79,276 83,317 81,076 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 69,226 79,543 78,309 77,121 68,115 66,235 66,759 67,080 66,437 64,480' 67,009 Holder 8 Accepting banks 10,857 10,910 9,355 9,811 11,174 12,287 12,216 12,789 11,577 12,127 13,101 9 Own bills 9,743 9,471 8,125 8,621 9,448 10,261 10,254 10,641 9,257 9,794 11,001 10 Bills bought 1,115 1,439 1,230 1,191 1,726 2,026 1,962 2,147 2,320 2,333 2,101 Federal Reserve Banks 11 Own account 195 1,480 418 0 0 0 0 0 0 0 0 12 Foreign correspondents 1,442 949 729 671 937 746 664 896 931 897 924 13 Others 56,731 66,204 67,807 66,639 56,004 53,202 53,880 53,396 53,929 51,456' 52,984 Basis 14 Imports into United States 14,765 17,683 15,649 17,560 15,147 14,464 15,094 15,106 15,601 15,796 16,612 15 Exports from United States 15,400 16,328 16,880 15,859 13,204 13,473 13,574 13,721 13,781 12,948 12,693 16 All other 39,060 45,531 45,781 43,702 39,765 38,299 38,091 38,254 37,056 35,736' 37,704 1. Effective Dec. 1, 1982, there was a break in the commercial paper series. The 4. Includes all financial company paper sold by dealers in the open market. key changes in the content of the data involved additions to the reporting panel, 5. As reported by financial companies that place their paper directly with the exclusion of broker or dealer placed borrowings under any master note investors. agreements from the reported data, and the reclassification of a large portion of 6. Includes public utilities and firms engaged primarily in such activities as bank-related paper from dealer-placed to directly placed. communications, construction, manufacturing, mining, wholesale and retail trade, 2. Correction of a previous misclassification of paper by a reporter has created transportation, and services. a break in the series beginning December 1983. The correction adds some paper to 7. Beginning October 1984, the number of respondents in the bankers acceptnonfinancial and to dealer-placed financial paper. ance survey were reduced from 340 to 160 institutions—those with $50 million or 3. Institutions engaged primarily in activities such as, but not limited to, more in total acceptances. The new reporting group accounts for over 95 percent commercial, savings, and mortgage banking; sales, personal, and mortgage of total acceptances activity. financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Rate Effective Date Rate' Average Month rate 11.50 1985—Jan. 15 10.50 1984—Jan.. 11.00 1985—June 12.00 May 20 10.00 Feb. 11.00 July 12.50 June 18 9.50 Mar. 11.21 Aug 13.00 Apr. 11.93 Sept 12.75 1986—Mar. 7 9.00 May. 12.39 Oct 12.50 Apr. 21 8.50 June 12.60 Nov 12.00 July 11 8.00 July. 13.00 Dec 11.75 Aug. 26 7.50 Aug. 13.00 11.25 Sept. 12.97 1986—Jan 10.75 Oct.. 12.58 Feb Nov. 11.77 Mar Dec. 11.06 May 1985—Jan.. 10.61 June Feb. 10.50 July Mar. 10.50 Aug Apr. 10.50 Sept May. 10.31 Oct NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • January 1987 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 July Aug. Sept. Oct. Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 MONEY MARKET RATES 1 Federal funds1-2 9.09 10.22 8.10 6.56 6.17 5.89 5.85 6.08 5.75 5.83 5.91 5.86 2 Discount window borrowing1'2 3 8.50 8.80 7.69 6.16 5.82 5.50 5.50 5.50 5.50 5.50 5.50 5.50 Commercial paper4'5 3 1-month 8.87 10.05 7.94 6.42 6.02 5.74 5.74 5.83 5.67 5.73 5.78 5.74 4 3-month 8.88 10.10 7.95 6.33 5.92 5.68 5.68 5.76 5.61 5.67 5.74 5.69 5 6-month 8.89 10.16 8.01 6.24 5.83 5.61 5.61 5.70 5.53 5.59 5.68 5.61 Finance paper, directly placed4-5 6 1-month 8.80 9.97 7.91 6.42 5.98 5.76 5.74 5.84 5.67 5.77 5.79 5.69 7 3-month 8.70 9.73 7.77 6.31 5.94 5.61 5.56 5.65 5.53 5.53 5.57 5.55 8 6-month 8.69 9.65 7.75 6.24 5.90 5.54 5.50 5.61 5.50 5.46 5.49 5.46 Bankers acceptances5-6 9 3-month 8.90 10.14 7.92 6.23 5.80 5.60 5.58 5.63 5.43 5.60 5.67 5.59 10 6-month 8.91 10.19 7.96 6.14 5.71 5.56 5.52 5.59 5.36 5.55 5.64 5.53 Certificates of deposit, secondary market7 11 1-month 8.96 10.17 7.97 6.43 5.97 5.73 5.71 5.79 5.62 5.70 5.79 5.69 12 3-month 9.07 10.37 8.05 6.37 5.92 5.71 5.69 5.77 5.59 5.69 5.78 5.68 13 6-month 9.27 10.68 8.25 6.36 5.92 5.71 5.70 5.77 5.59 5.69 5.79 5.69 14 Eurodollar deposits, 3-month8 9.56 10.73 8.28 6.54 6.06 5.88 5.88 5.99 5.84 5.79 5.95 5.94 U.S. Treasury bills5 Secondary market9 15 3-month 8.61 9.52 7.48 5.83 5.53 5.21 5.18 5.19 5.05 5.20 5.29 5.19 16 6-month 8.73 9.76 7.65 5.86 5.58 5.35 5.26 5.35 5.10 5.28 5.37 5.27 17 1-year 8.80 9.92 7.81 5.90 5.60 5.45 5.41 5.47 5.27 5.41 5.49 5.43 Auction average10 18 3-month 8.52 9.57 7.47 5.84 5.57 5.19 5.18 5.20 5.08 5.13 5.30 5.18 19 6-month 8.76 9.80 7.64 5.85 5.58 5.31 5.26 5.37 5.13 5.22 5.39 5.21 20 1-year 8.86 9.91 7.76r 5.98 5.82 5.33 5.44 5.47 n.a. n.a. n.a. 5.44 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 9.57 10.89 8.43 6.27 5.93 5.77 5.72 5.79 5.57 5.73 5.82 5.74 22 2-year 10.21 11.65 9.27 6.67 6.33 6.35 6.28 6.35 6.14 6.30 6.37 6.30 23 3-year 10.45 11.89 9.64 6.86 6.49 6.62 6.56 6.65 6.43 6.59 6.66 6.57 24 5-year 10.80 12.24 10.13 7.06 6.80 6.92 6.83 6.93 6.72 6.88 6.92 6.80 25 7-year 11.02 12.40 10.51 7.22 7.01 7.28 7.24 7.28 7.13 7.33 7.35 7.17 26 10-year 11.10 12.44 10.62 7.30 7.17 7.45 7.43 7.43 7.31 7.53 7.52 7.39 27 20-year 11.34 12.48 10.97 7.29 7.28 7.56 7.61 7.55 7.50 7.71 7.71 7.59 28 30-year 11.18 12.39 10.79 7.27 7.33 7.62 7.70 7.60 7.59 7.81 7.80 7.68 Composite13 29 Over 10 years (long-term) 10.84 11.99 10.75 7.86 7.72 8.08 8.04 8.03 7.97 8.16 8.14 7.96 State and local notes and bonds Moody's series14 30 Aaa 8.80 9.61 8.60 7.24 7.11 6.91 6.44 6.85 6.50 6.45 6.30 6.10 31 Baa 10.17 10.38 9.58 7.95 7.81 7.59 7.23 7.45 7.25 7.40 7.10 6.95 32 Bond Buyer series15 9.51 10.10 9.11 7.51 7.21 7.11 7.08 7.19 7.06 7.08 7.11 6.94 Corporate bonds Seasoned issues16 33 All industries 12.78 13.49 12.05 9.52 9.44 9.55 9.54 9.56 9.54 9.56 9.56 9.49 34 Aaa 12.04 12.71 11.37 8.88 8.72 8.89 8.86 8.90 8.86 8.88 8.89 8.80 35 Aa 12.42 13.31 11.82 9.28 9.22 9.36 9.33 9.36 9.33 9.35 9.35 9.30 36 A 13.10 13.74 12.28 9.76 9.64 9.73 9.72 9.74 9.74 9.75 9.73 9.65 37 Baa 13.55 14.19 12.72 10.16 10.18 10.20 10.24 10.23 10.24 10.25 10.26 10.19 38 A-rated, recently-offered utility bonds17 12.73 13.81 12.06 9.57 9.51 9.56 9.48 9.50 9.51 9.52 9.49 9.32 MEMO: Dividend/price ratio18 39 Preferred stocks 11.02 11.59 10.49 8.68 8.42 8.10 8.17 8.18 8.15 8.23 8.20 8.09 40 Common stocks 4.40 4.64 4.25 3.41 3.36 3.43 3.49 3.53 3.49 3.47 3.50 3.44 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 1986 IInnddiiccaattoorr 11998833 11998844 11998855 Feb. Mar. Apr. May June July Aug. Sept. Oct. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 92.63 92.46 108.09 126.43 133.97 137.25 137.37 140.82 138.32 140.91 137.06 136.74 2 Industrial 107.45 108.01 123.79 144.03 152.75 157.35 158.59 163.15 158.06 160.10 156.52 156.56 3 Transportation 89.36 85.63 104.11 124.18 128.66 125.92 122.21 120.65 112.03 111.24 114.06 120.04 4 Utility 47.00 46.44 56.75 65.18 68.06 69.35 68.65 70.69 74.20 77.84 74.56 73.38 5 Finance 95.34 89.28 114.21 142.13 153.94 154.83 151.28 151.73 150.23 152.90 145.56 143.89 6 Standard & Poor's Corporation (1941-43 = 10)1 ... 160.41 160.50 186.84 219.37 232.33 237.97 238.46 245.30 240.18 245.00 238.27 237.36 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 216.48 207.96 229.10 246.09 264.91 270.59 274.22 281.18 269.93 268.55 264.30 257.82 Volume of trading (thousands of shares) 8 New York Stock Exchange 85,418 91,084 109.191 152,590 160,755 146,330 127,624 126,151 137,709 128,661 150,831 131,155 9 American Stock Exchange 8,215 6,107 8,355 14,057 15,902 13,503 11,870 12,795 10,320 9,885 10,853 8,930 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 23,000 22,470 28,390 27,450 29,090 30,760 32,370 32,480 33,170 34,550 34,580 36,310 Free credit balances at brokers4 11 Margin-account5 11,,775555 22,,771155 22,,554455 22,,771155 33,,006655 22,,440055 22,,558855 22,,557700 33,,003355 33,,339955 33,,880055 12 Cash-account 8,430 1100,,221155 1122,,884400 1122,,335555 1133,,992200 1144,,334400 1122,,997700 1133,,557700 1144,,660000 1144,,221100 1144,,006600 1144,,444455 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 By equity class (in percent)1 14 Under 40 22.0 18.0 34.0 28.0 29.0 29.0 30.0 31.0 15 40-49 22.0 18.0 20.0 19.0 19.0 20.0 19.0 20.0 n.a. n.a. n a. n a 16 50-59 16.0 16.0 19.0 21.0 22.0 20.0 22.0 20.0 17 60-69 9.0 9.0 11.0 13.0 13.0 13.0 12.0 13.0 18 70-79 6.0 5.0 8.0 9.0 8.0 9.0 8.0 8.0 19 80 or more 6.0 6.0 8.0 10.0 9.0 9.0 9.0 8.0 Special miscellaneous-account balances at brokers (end of period)6 20 Total balances (millions of dollars)8 58,329 75,840 99,310 104,228 103,450 105,790 109,620 112,401 ! F F 4 Distribution by equity status (percent) 1 I I 1 21 Net credit status 63.0 59.0 58.0 60.0 61.0 59.0 58.0 59.0 n. a. n. a. n a. n.a. Debt status, equity of 22 60 percent or more 28.0 2191..00 3111..00 32.0 31.0 33.0 33.0 32.0 23 Less than 60 percent 9.0 8.0 8.0 8.0 9.0 9.0 Margin requirements (percent of market value and effective date)9 Mar. 11, 1968 June 8. 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 24 Margin stocks 70 80 65 55 65 50 25 Convertible bonds 50 60 50 50 50 50 26 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance and dealers. Data items that are no longer reported include distributions of margin companies. With this change the index includes 400 industrial stocks (formerly debt by equity status of the account and special miscellaneous-account 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 balances. financial. 7. Each customer's equity in his collateral (market value of collateral less net 2. Beginning July 5, 1983, the American Stock Exchange rebased its index debit balance) is expressed as a percentage of current collateral values. effectively cutting previous readings in half. 8. Balances that may be used by customers as the margin deposit required for 3. Beginning July 1983, under the revised Regulation T, margin credit at additional purchases. Balances may arise as transfers based on loan values of broker-dealers includes credit extended against stocks, convertible bonds, stocks other collateral in the customer's margin account or deposits of cash (usually sales acquired through exercise of subscription rights, corporate bonds, and govern- proceeds) occur. ment securities. Separate reporting of data for margin stocks, convertible bonds, 9. Regulations G, T, and U of the Federal Reserve Board of Governors, and subscription issues was discontinued in April 1984, and margin credit at prescribed in accordance with the Securities Exchange Act of 1934, limit the broker-dealers became the total that is distributed by equity class and shown on amount of credit to purchase and carry margin stocks that may be extended on lines 17-22. securities as collateral by prescribing a maximum loan value, which is a specified 4. Free credit balances are in accounts with no unfulfilled commitments to the percentage of the market value of the collateral at the time the credit is extended. brokers and are subject to withdrawal by customers on demand. Margin requirements are the difference between the market value (100 percent) 5. New series beginning June 1984. and the maximum loan value. The term "margin stocks" is defined in the 6. In July 1986, the New York Stock Exchange stopped reporting certain data corresponding regulation. items that were previously obtained in a monthly survey of a sample of brokers Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • January 1987 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1985 1986 AAccccoouunntt 11998833 11998844 Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Savings and loan associations 1 Assets 773,417 903,488 948,781 938,467 943,029 947,302 954,129 962,509 953,580 957,294 964,378 954,960 2 Mortgages 494,789 555,277 585,462 578,472 576,608 574,732 575,288' 575,097' 565,148' 565,376' 566,506' 557,429' 97,303 96,891 98,482 99,332 102,419 107,311 112,148 112,054 112,594 112,720 4 Cash and investment securities1 . 104,274 124,801 126,712 123,415 127,028 131,464 132,347 134,870 131,000 132,769 138,876 139,861 5 Other 174,354 223,396 238,833 236,850 239,394 241,104 246,484 252,522 257,372 259,089 258,968 256,688 6 Liabilities and net worth 773,417 903,488 948,781 938,467 943,029 947,302 954,129 962,509 953,580 957,294 964,378 954,960 7 Savings capital 634,455 725,045 750,071 745,218 747,016 752,056 750,299 751,138 744,018 747,015 749,086 743,635 n a. 8 Borrowed money 92,127 125,666 138,798 131,521 131,671 133,407 139,574 144,179 147,166 145,691 147,658 151,899 9 FHLBB 52,626 64,207 73,888 71,488 71,214 70,464 73,815 73,520 73,555 75,059 75,594 80,409 10 Other 39,501 61,459 64,910 60,033 60,457 62,943 65,759 70,659 73,611 70,632 72,064 71,490 11 Other 15,968 17,944 19,045 21,024 23,125 20,078 22,078 24,803 20,947 22,899 24,788 16,181 12 Net worth2 30,867 34,833 41,064 40,704 41,227 41,760 42,178 42,388 41,450 41,689 42,846 43,245 MEMO 13 Mortgage loan commitments outstanding3 54,113 61,305 56,051 51,130 52,542' 54,366 55,818' 57,997' 57,183' 55,687' 53,164' 51,531' FSLIC-insured federal savings banks 14 Assets 64,969 98,559 131,868 142,136 146,508 152,823 155,684 164,129 180,134 183,239 186,693 196,173 15 Mortgages 38,698 57,429 72,355 78,984 81,641 85,028 86,599 89,108 99,599 101,206 102,422 107,335 16 Mortgage-backed securities.... 7,172 9,949 15,676 16,620 16,367 17,851 18,661 19,829 21,649 23,330 24,187 24,447 17 Other 6,595 10,971 11,723 13,274 13,759 13,923 14,590 15,083 16,816 17,714 17,794 18,326 18 Liabilities and net worth 64,969 98,559 131,868 142,136 146,508 152,823 155,684 164,129 180,134 183,239 186,693 196,173 19 Savings capital 53,227 79,572 103,462 111,879 114,743 119,434 121,133 126,123 138,168 140,610 142,805 149,086 n a. 70 Borrowed money 7,477 12,798 19,323 20,419 21,254 22,747 23,196 25,686 28,502 28,697 29,387 32,231 71 FHLBB 4,640 7,515 10,510 11,151 11,283 12,064 12,476 12,830 15,301 15,866 16,157 16,845 77 Other 2,837 5,283 8,813 9,268 9,971 10,683 10,720 12,856 13,201 12,831 13,230 15,386 73 Other 1,157 1,903 2,732 2,983 3,397 3,291 3,755 4,338 4,279 4,504 4,851 4,675 24 Net worth 3,108 4,286 6,351 6,855 7,114 7,349 7,599 7,982 9,186 9,427 9,650 10,180 MEMO 25 Mortgage loan commitments outstanding3 2,151 3,234 5,355 6,707 7,718 8,330 8,287 8,762 9,343 10,134 9,378 10,113 Savings banks 26 Assets 193,535 203,898 216,776 216,673 218,119 221,256 222,542 226,495 223,367' 224,569 227,011 228,854 Loans 77 Mortgage 97,356 102,895 110,371 108,973 109,702 110,271 11,813 112,417 110,958' 111,971 113,265 114,188 78 Other 19,129 24,954 30,876 31,752 32,501 34,873 34,591 35,500 36,692' 36,421 37,350 37,298 Securities 79 U.S. government 15,360 14,643 13,111 12,568 12,474 12,313 12,013 13,210 12,115' 12,297 12,043 12,357 30 Mortgage-backed securities... 18,205 19,215 19,481 21,372 21,525 21,593 21,885 22,546 22,413' 22,954 21,161 23,216 31 State and local government... 2,177 2,077 2,323 2,298 2,297 2,306 2,372 2,343 2,281' 2,309 2,400 2,407 3? Corporate and other 25,375 23,747 21,199 20,828 20,707 20,403 20,439 20,260 2,036' 20,862 20,602 20,902 33 Cash 6,263 4,954 6,225 5,645 5,646 5,845 5,570 6,225 5,301' 4,651 5,018 4,811 n.a. 34 Other assets 9,670 11,413 13,113 13,237 13,267 13,652 13,859 13,994 13,244' 13,104 13,172 13,675 35 Liabilities 193,535 203,898 216,776 216,673 218,119 221,256 222,542 226,495 223,367' 224,569 227,011 228,854 36 Deposits 172,665 180,616 185,972 186,321 186,777 188,960 189,025 190,310 189,109' 188,615 189,937 190,210 37 Regular4 170,135 177,418 181,921 182,399 182,890 184,704 184,580 185,716 183,970^ 183,433 184,764 185,002 38 Ordinary savings 38,554 33,739 33,018 32,365 32,693 33,021 33,057 33,577 34,008' 34,166 34,530 35,227 39 Time 95,129 104,732 103,311 104,436 104,588 105,562 105,550 105,146 103,083' 102,374 102,668 102,191 40 Other 2,530 3,198 4,051 3,922 3,887 4,256 4,445 4,594 5,139' 5,182 5,173 5,208 41 Other liabilities 10,154 12,504 17,414 17,086 17,793 18,412 19,074 21,384 19,226' 20,641 21,360 21,947 42 General reserve accounts 10,368 10,510 12,823 12,925 13,211 13,548 14,114 14,519 14,731' 15,084 15,427 16,319 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37—Continued 1985 1986 AAccccoouunntt 11998833 11998844 Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Credit unions5 43 Total assets/liabilities and capital . 81,961 93,036 118,010 118,933 122,623 126,653 128,229 132,415 134,703 137,901 139,233 140,496 44 Federal 54,482 63.205 77,861 78,619 80,024 82,275 83,543 86,289 87,579 89,539 90,367 91,981 45 State 27,479 29,831 40,149 40,314 42,599 44,378 44,686 46,126 47,124 48,362 48,866 48,515 46 Loans outstanding 50,083 62,561 73,513 73,513 74,207 75,300 76,385 76,774 77,847 79,647 80,656 81,820 n a. 47 Federal 32,930 42,337 47,933 48,055 48,059 48,633 49,756 49,950 50,613 51,331 52,007 53,042 48 State 17,153 20,224 25,580 25,458 26,148 26,667 26,629 26,824 27,234 28,316 28,649 28,778 49 Savings 74,739 84,348 105,963 107,238 110,541 114,579 116,703 120,331 122,952 125,331 126,268 128,125 50 Federal 49,889 57,539 70,926 72,166 73,227 75,698 77,112 79,479 80,975 82,596 83,132 84,607 51 State 24,850 26,809 35,037 35,072 37,314 38,881 39,591 40,852 41,977 42,735 43,136 43,518 Life insurance companies 52 Assets 654,948 722,979 825,901' 831,716 839,856 848,535 855,605 863,610 872,359 877,919 887,255 Securities 53 Government 50,752 63,899 75,230r 75,937 76,761 77,965 78,494 79,051 78,284 78,722 79,188 54 United States6 28,636 42,204 51,70C 52,243 53,264 54,289 54,705 55,120 54,197 54,321 54,487 55 State and local 9,986 8.713 9,708' 9,869 9,588 9,674 9,869 9,930 10,114 10,350 10,472 56 Foreign7 12,130 12,982 13,822' 13,825 13,909 14,002 13,920 14,001 13,973 14,051 14,229 57 Business 322,854 359,333 423,712' 428,979 435,758 440,963 445,573 450,279 455,119 455,013 463,135 n.a. n.a. 58 Bonds 257,986 295,998 346,216' 351,402 354,911 357,196 361,306 364,122 367,966 369,704 374,670 59 Stocks 64,868 63,335 77,496' 77,577 80,847 83,767 84,267 86,157 87,153 85,309 88,465 60 Mortgages 150,999 156.699 171,797' 172,324 172,997 174,823 175,951 177,554 180,041 182,542 183,943 61 Real estate 22,234 25,767 28,822' 29,035 29,356 29,804 30,059 30,025 30,350 31,151 31,844 67 Policy loans 54,063 54,505 54,369' 54,264 54,267 54,273 54,272 54,351 57,342 54,249 54,247 63 Other assets 54,046 63,776 71,971' 57,090 57,351 57,753 57,492 57,802 58,290 58,792 57,905 1. Holdings of stock of the Federal Home Loan Banks are in "other assets." FSLIC-insured federal savings banks: Estimates by the FHLBB for federal 2. Includes net undistributed income accrued by most associations. savings banks insured by the FSLIC and based on monthly reports of federally 3. As of July 1985, data include loans in process. insured institutions. 4. Excludes checking, club, and school accounts. Savings banks: Estimates by the National Council of Savings Institutions for all 5. Data include all federally insured credit unions, both federal and state savings banks in the United States and for FDIC-insured savings banks that have chartered, serving natural persons. converted to federal savings banks. 6. Direct and guaranteed obligations. Excludes federal agency issues not Credit unions: Estimates by the National Credit Union Administration for guaranteed, which are shown in the table under "Business" securities. federally chartered and federally insured state-chartered credit unions serving 7. Issues of foreign governments and their subdivisions and bonds of the natural persons. International Bank for Reconstruction and Development. Life insurance companies: Estimates of the American Council of Life Insurance NOTE. Savings and loan associations: Estimates by the FHLBB for all for all life insurance companies in the United States. Annual figures are annualassociations in the United States based on annual benchmarks for non-FSLIC- statement asset values, with bonds carried on an amortized basis and stocks at insured associations and the experience of FSLIC-insured associations. year-end market value. Adjustments for interest due and accrued and for differences between market and book values are not made on each item separately but are included, in total, in "other assets." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • January 1987 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1986 111999888444 111999888555 111999888666 May June July Aug. Sept. Oct. U.S. budget1 1 Receipts, total 666,457 734,057 769,091 46,246 77,024 62,974 56,523 78,013 59,012 2 On-budget n.a. 547,886 568,862 30,004 58,400 47,571 41,404 59,978 43,865 3 Off-budget n.a. 186,170 200,228 16,242 18,624 15,402 15,119 18,035 15,147 4 Outlays, total 851,7% 945,987 989,789 85,642 78,034 85,203 84,434 81,750 84,267 5 On-budget n.a. 769,180 806,291 69,611 60,982 69,604 68,112 65,614 68,780 6 Off-budget n.a. 176,807 183,498 16,031 17,052 15,599 16,322 16,136 15,486 7 Surplus, or deficit (-), total -185,339 -211,931 -220,698 -39,396 -1,011 -22,229 -27,911 -3,737 -25,255 8 On-budget n.a. -221,294 -237,428 -39,607 -2,583 -22,033 -26,708 -5,636 -24,915 9 Off-budget n.a. 9,363 16,371 211 1,572 -196 -1,203 1,898 -340 Source of financing (total) 10 Borrowing from the public 170,817 197,269 235,745 17,960 18,500 14,980 20,278 22,188 5,936 11 Cash and monetary assets (decrease, or increase (-))2 5,636 10,673 -18,044 22,774 -13,065 3,972 10,298 -21,313 18,131 12 Other3 8,885 3,989 2,997 -1,338 -4,424 3,277 -2,665 2,862 1,188 MEMO 13 Treasury operating balance (level, end of period) 22,345 17,060 31,384 12,808 24,641 20,810 10,428 31,384 13,616 14 Federal Reserve Banks 3,791 4,174 7,514 3,083 3,143 3,983 1,106 7,514 2,491 15 Tax and loan accounts 18,553 12,886 23,870 9,725 21,498 16,827 9,322 23,870 11,126 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 Fiscal Fiscal Source or type year year 11998844 1985 11998866 1986 1985 1986 H2 HI H2 HI Aug. Sept. Oct. RECEIPTS 1 All sources 734,057 769,091 341,392 380,618 364,790 394,345 56,523 78,013 59,012 ? Individual income taxes, net 334,560 348,959 157,229 166,783 169,987 169,444 25,764 37,125 31,123 3 Withheld 298,941 314,803 145,210 149,288 155,725 153,919 24,504 24,707 29,556 4 Presidential Election Campaign Fund ... 35 36 5 29 6 31 1 1 0 Nonwithheld 101,328 105,994 19,403 76,155 22,295 78,981 2,846 14,199 3,122 6 Refunds 65,743 71,873 7,387 58,684 8,038 63,488 1,587 1,782 1,554 Corporation income taxes 7 Gross receipts 77,413 80,442 35,190 42,193 36,528 41,946 1,997 13,162 33,,221199 8 Refunds 16,082 17,298 6,847 8,370 7,751 9,557 922 1,713 2,679 9 Social insurance taxes and contributions, net 265,163 283,901 118,690 144,598 128,017 156,714 23,738 23,507 2211,,117799 10 Employment taxes and contributions1 234,646 255,062 105,624 126,038 116,276 139,706 19,529 22,819 1199,,558833 11 Self-employment taxes and contributions2 10,468 11,840 1,086 9,482 985 10,581 0 1,379 0 12 Unemployment insurance 25,758 24,098 10,706 16,213 9,281 14,674 3,842 314 1,135 13 Other net receipts3 4,759 4,741 2,360 2,350 2,458 2,333 366 374 459 14 Excise taxes 35,992 32,919 18,961 17,259 18,470 15,944 2,340 2,653 2,708 15 Customs deposits 12,079 13,323 6,329 5,807 6,354 6,369 1,272 1,236 1,281 16 Estate and gift taxes 6,422 6,958 3,029 3,204 3,323 3,487 608 599 647 17 Miscellaneous receipts4 18,510 19,887 8,812 9,144 9,861 10,002 1,725 1,445 1,534 OUTLAYS 18 All types 946,223 989,789 446,944 463,842 487,188 486,037 84,434 81,750 84,267 19 National defense 252,748 273,369 118,286 124,186 134,675 135,367 22,448 23,964 23,177 70 International affairs 16,176 14,471 8,550 6,675 8,367 5,384 999 2,603 1,259 71 General science, space, and technology ... 8,627 9,017 4,473 4,230 4,727 12,519 694 876 794 7? Energy 5,685 4,792 1,423 680 3,305 2,484 671 228 405 73 Natural resources and environment 13,357 13,508 7,370 5,892 7,553 6,245 1,142 1,227 1,200 24 Agriculture 25,565 31,169 8,524 11,705 15,412 14,482 844 2,801 3,573 25 Commerce and housing credit 4,229 4,258 2,663 -260 644 860 175 1,884 593 26 Transportation 25,838 28,058 13,673 11,440 15,360 12,658 2,310 2,969 2,107 27 Community and regional development .... 7,680 7,510 4,836 3,408 3,901 3,169 582 516 735 28 Education, training, employment, social services 29,342 29,662 13,737 14,149 14,481 1144,,771122 22,,663300 22,,550077 22,,333322 79 Health 33,542 35,936 15,692 16,945 17,237 17,872 3,241 2,997 4,266 30 Social security and medicare 254,446 268,925 119,613 128,351 129,037 135,214 22,809 22,756 23,700 31 Income security 128,200 120,686 61,558 65,246 59,457 60,786 10,740 8,574 9,367 3? Veterans benefits and services 26,352 26,614 13,317 11,956 14,527 12,193 3,373 829 3,491 33 Administration of justice 6,277 6,555 2,992 3,016 3,212 3,352 516 513 539 34 General government 5,228 6,7% 2,552 2,857 3,634 3,566 598 525 209 35 General-purpose fiscal assistance 6,353 6,430 3,458 2,659 3,391 2,179 49 1,139 284 36 Net interest' 129,436 135,284 61,293 65,143 67,448 68,054 12,652 8,640 9,951 37 Undistributed offsetting receipts6 -32,759 -33,244 -17,061 -14,436 -17,953 -17,193 -2,079 -3,796 -3,719 1. Old-age, disability, and hospital insurance, and railroad retirement accounts. 5. Net interest function includes interest received by trust funds. 2. Old-age, disability, and hospital insurance. 6. Consists of rents and royalties on the outer continental shelf and U.S. 3. Federal employee retirement contributions and civil service retirement and government contributions for employee retirement. disability fund. 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. receipts. Government," and the Budget of the U.S. Government, Fiscal Year 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • January 1987 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 QL 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 12 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 23 Savings bonds 68.1 68.3 71.5 74.5 78.2 79.8 81.4 83.8 24 Other securities 42.7 48.2 61.9 69.3 73.2 75.0 76.1 73.4 7.5 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 Transactions1 Par value; averages of daily figures, in millions of dollars 1986 1986 week ending Wednesday IItteemm 11998833 11998844 11998855 Aug/ Sept. Oct. Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Immediate delivery2 1 U.S. government securities 42,135 52,778 75,331 101,864 102,015 93,411 100,295 99,451 100,394 74,151 85,841 100,711 By maturity 2 Bills 22,393 26,035 32,900 36,838 35,526 32,633 33,413 33,793 39,287 22,255 30,593 33,796 3 Other within 1 year 708 1,305 1,811 2,249 2,263 2,221 2,663 2,961 2,375 1,878 1,536 2,411 4 1-5 years 8,758 11,733 18,361 30,255 29,743 25,485 31,802 31,441 26,937 23,597 24,950 25,699 5 5-10 years 5,279 7,606 12,703 21,269 21,718 21,286 19,448 18,139 21,557 16,947 17,526 25,946 6 Over 10 years 4,997 6,099 9,556 11,252 12,766 11,786 12,969 13,118 10,238 9,474 11,236 12,861 By type of customer '/ U.S. government securities dealers 2,257 2,919 3,336 4,570 4,232 3,905 3,791 4,681 4,567 3,036 2,747 3,637 8 U.S. government securities brokers 21,045 25,580 36,222 53,216 54,585 49,366 55,012 51,605 52,595 38,372 45,456 53,876 9 All others3 18,833 24,278 35,773 44,078 43,199 40,140 41,493 43,165 43,232 32,743 37,638 43,198 10 Federal agency securities 5,576 7,846 11,640 16,963 17,693 18,302 15,786 14,039 14,226 14,200 23,727 20,222 11 Certificates of deposit 4,333 4,947 4,016 4,381 4,724 4,351 4,295 4,300 5,123 3,698 3,982 4,141 12 Bankers acceptances 2,642 3,243 3,242 3,215 3,452 3,348 3,591 3,262 4,292 2,623 3,549 2,534 13 Commercial paper 8,036 10,018 12,717 17,093 16,058 17,078 15,277 16,547 15,880 1166,,773388 17,401 17,014 Futures transactions4 14 Treasury bills 6,655 6,947 5,561 2,871 3,056 1,754 2,992 2,655 1,387 1,194 2,728 1,361 15 Treasury coupons 2,501 4,503 6,069 5,939 7,784 5,416 8,974 7,679 4,859 5,100 5,307 5,430 16 Federal agency securities 265 262 240 12 4 0 3 4 * 0 * 2 Forward transactions5 17 U.S. government securities 1,493 1,364 1,283 2,907 1,838 1,734 3,356 1,092 812 875 3,096 1,968 18 Federal agency securities 1,646 2,843 3,857 7,785 8,684 8,450 8,778 8,040 8,089 7,276 10,917 7,581 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 NOTE. Data for the period May 1 to Sept. 30, 1986, are partially estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 1987 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1986 1986 week ending Wednesday IItteemm 11998833 11998844 11998855 Aug/ Sept/ Oct. Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Positions Net immediate2 1 U.S. government securities 14,082 5,429 7,391 18,616 11,302 8,313 16,823 10,711 7,964 2,602 10,038 2 Bills 10,800 5,500 10,075 12,812 8,676 11,070 12,790 11,901 10,726 8,381 11,633 3 Other within 1 year 921 63 1,050 3,515 2,847 2,704 2,719 3,338 3,119 2,659 2,150 4 1-5 years 1,912 2,159 5,154 11,627 11,917 9,682 16,324 10,344 9,377 7,164 10,946 5 5-10 years -78 -1,119 -6,202 -7,797 -9,181 -11,127 -10,552 -10,819 -11,371 -11,253 -11,098 6 Over 10 years 528 -1,174 -2,686 -1,541 -2,957 -4,017 -4,459 -4,053 -3,887 -4,348 -3,593 7 Federal agency securities 7,313 15,294 22,860 26,857 30,165 29,073 29,597 28,268 29,064 31,224 28,155 8 Certificates of deposit 5,838 7,369 9,192 9,960 11,289 9,511 10,998 10,101 10,164 8,882 8,944 9 Bankers acceptances 3,332 3,874 4,586 5,172 5,665 5,897 5,393 6,149 7,111 5,852 5,074 10 Commercial paper 3,159 3,788 5,570 7,469 8,991 8,302 8,746 9,219 8,438 7,973 7,250 Futures positions 11 Treasury bills -4,125 -4,525 -7,322 -16,246 -15,996 -15,845 -15,099 -17,574 -18,105 -14,733 -13,900 12 Treasury coupons -1,033 1,794 4,465 2,427 4,234 3,424 4,809 3,842 3,409 3,561 3,132 13 Federal agency securities 171 233 -722 -60 -64 -70 -68 -67 -67 -68 -75 Forward positions 14 U.S. government securities -1,936 -1,643 -911 -3,503 -3,769 -128 -3,565 -640 -63 -1% 410 15 Federal agency securities -3,561 -9,205 -9,420 -9,906 -10,224 -11,329 -9,799 -9,215 -11,999 -13,785 -11,378 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 29,099 44,078 68,035 98,805 113,057 n.a. 116,444 114,643 122,784 120,516 115,125 17 Term agreements 52,493 68,357 80,509 106,640 106,335 n.a. 106,464 111,545 107,286 111111,,117722 115,093 Repurchase agreements5 18 Overnight and continuing 57,946 75,717 101,410 138,823 149,027 n.a. 153,787 151,714 159,950 152,871 144,895 19 Term agreements 44,410 57,047 77,748 103,532 104,455 n.a. 104,984 111,097 102,440 110,249 114,034 1. Data for dealer positions and sources of financing are obtained from reports reverses to maturity, which are securities that were sold after having been submitted to the Federal Reserve Bank of New York by the U.S. government obtained under reverse repurchase agreements that mature on the same day as the securities dealers on its published list of primary dealers. securities. Data for immediate positions do not include forward positions. Data for positions are averages of daily figures, in terms of par value, based on 3. Figures cover financing involving U.S. government and federal agency the number of trading days in the period. Positions are net amounts and are shown securities, negotiable CDs, bankers acceptances, and commercial paper. on a commitment basis. Data for financing are in terms of actual amounts 4. Includes all reverse repurchase agreements, including those that have been borrowed or lent and are based on Wednesday figures. arranged to make delivery on short sales and those for which the securities 2. Immediate positions are net amounts (in terms of par values) of securities obtained have been used as collateral on borrowings, that is, matched agreements. owned by nonbank dealer firms and dealer departments of commercial banks on a 5. Includes both repurchase agreements undertaken to finance positions and commitment, that is, trade-date basis, including any such securities that have "matched book" repurchase agreements. been sold under agreements to repurchase (RPs). The maturities of some NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially repurchase agreements are sufficiently long, however, to suggest that the securi- estimated. ties involved are not available for trading purposes. Immediate positions include 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 Apr. May June July Aug. Sept. 1 Federal and federally sponsored agencies 240,068 271,220 293,905 293,336 294,961 296,226 298,361 n.a. n.a. 2 Federal agencies 33,940 35,145 36,390 35,530 36,110 35,826 35,768 36,132 36,473 3 Defense Department1 243 142 71 55 52 48 45 40 37 4 Export-Import Bank2,3 14,853 15,882 15,678 15,257 15,256 14,953 14,953 14,953 14,274 5 Federal Housing Administration4 194 133 115 114 118 115 115 115 117 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 2,165 7 Postal Service6 1,404 1,337 1,940 1,940 1,940 1,854 1,854 1,854 3,104 8 Tennessee Valley Authority 14,970 15,435 16,347 15,925 16,505 16,617 16,562 16,931 16,702 9 United States Railway Association6 111 51 74 74 74 74 74 74 74 10 Federally sponsored agencies7 206,128 236,075 257,515 257,806 258,851 260,400 262,593 n.a. n.a. 11 Federal Home Loan Banks 48,930 65,085 74,447 76,527 78,718 81,558 83,081 85,997 87,133 12 Federal Home Loan Mortgage Corporation 6,793 10,270 11,926 13,492 12,475 12,276 12,818 n.a. n.a. 13 Federal National Mortgage Association 74,594 83,720 93,896 92,401 92,629 92,562 93,417 92,286 91,629 14 Farm Credit Banks 72,816 71,193 68,851 65,188 64,629 63,585 62,857 61,575 63,073 15 Student Loan Marketing Association8 3,402 5,745 8,395 10,198 10,400 10,419 10,420 10,420 10,555 MEMO 16 Federal Financing Bank debt 135,791 145,217 153,373 153,508 155,076 155,222 155,526 156,132 156,871 Lending to federal and federally sponsored 17 Export-Import Bank3 14,789 15,852 15,670 15,250 15,250 14,947 14,947 14,947 14,268 18 Postal Service6 1,154 1,087 1,690 1,690 1,690 1,604 1,604 1,604 2,854 19 Student Loan Marketing Association 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 4,978 20 Tennessee Valley Authority 13,245 13,710 14,622 14,250 14,830 14,942 14,937 15,306 15,077 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 63,829 64,544 64,924 65,174 65,274 65,374 23 Rural Electrification Administration 19,766 20,693 20,654 21,061 21,154 21,255 21,321 21,398 21,460 24 Other 26,460 29,853 31,429 32,354 32,534 32,476 32,469 32,529 32,786 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 • January 1987 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1986 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998833 11998844 11998855 Feb. Mar. Apr. May June July Aug. Sept. 1 All issues, new and refunding1 86,421 106,641 214,189 3,300 8,008 12,578 13,215 12,611 19,833 25,965 4,532 Type of issue 2 General obligation 21,566 26,485 52,622 916 2,720 5,459 7,115 6,326 6,531 5,931 1,267 3 Revenue 64,855 80,156 161,567 2,384 5,288 7,120 6,100 6,285 13,302 20,034 3,265 Type of issuer 4 State 7,140 9,129 13,004 287 1,088 1,956 2,825 1,705 2,879 2,121 9 5 Special district and statutory authority2 51,297 63,550 134,363 1,691 4,383 7,350 6,427 6,351 10,589 15,714 3,275 6 Municipalities, counties, townships 27,984 33,962 66,822 1,322 2,537 3,273 3,962 4,554 6,365 8,125 1,248 7 Issues for new capital, total 72,441 94,050 156,050 2,022 3,314 6,938 7,155 8,178 13,165 17,810 2,558 Use of proceeds 8 Education 8,099 7,553 16.658 441 624 1,706 1,827 1,694 2,800 2,926 558 9 Transportation 4,387 7,552 12,070 380 795 815 273 947 3,164 1,460 827 10 Utilities and conservation 13,588 17,844 26,852 1,352 4,082 4,554 3,450 1,583 4,425 6,292 1,365 11 Social welfare 26,910 29,928 63,181 239 337 579 1,424 1,518 1,186 2,554 812 12 Industrial aid 7,821 15,415 12,892 134 37 313 264 255 975 489 138 13 Other purposes 11,637 15,758 24,398 729 2,132 4,610 5,978 6,614 7,281 12,245 832 1. Par amounts of long-term issues based on date of sale. SOURCES. Securities Data Company beginning April 1986. Public Securities 2. Includes school districts beginning April 1986. Association for earlier data. This new data source began with the November BULLETIN. 1.46 NEW SECURITY ISSUES Corporations Millions of dollars 1986 Type of issue or issuer, or use 11998833 11998844 11998855 Feb. Mar. Apr. May June July Aug. Sept. 1 All issues' 119,949 132,531 201,269 23,931 30,444 33,489 19,564 25,776 21,093' 24,245' 15,967 2 Bonds2 68,370 109,903 165,754 19,469 24,923 27,883 13,050 20,756 16,766' 18,481' 12,739 Type of offering 3 Public 47,244 73,579 119,559 19,469 24,923 27,883 13,050 20,756 16,766' 18,481' 12,739 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 3,950 8,895 7,975 3,939 5,368 2,535 4,536 2,345 6 Commercial and miscellaneous 7,540 13,726 15,215 1,216 790 2,640 1,776 2,206 3,410 1,045 1,405 7 Transportation 3,833 4,694 5,743 373 303 614 427 250 497 550 375 8 Public utility 9,125 10,679 12,957 2,540 2,133 3,330 1,709 1,948 1,470 2,098 1,905 9 Communication 3,642 2,997 10,456 1,200 1,907 3,115 712 810 465 1,615 417 10 Real estate and financial 27,227 53,199 69,157 10,190 10,895 10,210 4,487 10,174 8,389' 8,638' 6,292 11 Stocks3 51,579 22,628 35,515 4,462 5,521 5,606 6,514 5,020 4,327 5,764' 3,228 Type 12 Preferred 7,213 4,118 6,505 975 1,160 751 856 1,284 726 1,290 402 13 Common 44,366 18,510 29,010 3,487 4,361 4,855 5,658 3,736 3,601 4,474' 2,826 Industry group 14 Manufacturing 14,135 4,054 5,700 1,269 851 1,434 1,827 1,132 746 982' 227 15 Commercial and miscellaneous 13,112 6,277 9,149 434 607 910 953 421 917 803 1,005 16 Transportation 2,729 589 1,544 302 355 158 372 154 179 57 28 17 Public utility 5,001 1,624 1,966 153 357 165 346 406 305 208 174 18 Communication 1,822 419 978 282 0 27 74 140 107 379 0 19 Real estate and financial 14,780 9,665 16,178 2,022 3,351 2,912 2,942 2,767 2,073 3,335' 1,794 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 1986 IItteemm 11998844 11998855 Feb. Mar. Apr. May June July Aug/ Sept. INVESTMENT COMPANIES1 1 Sales of own shares2 107,480 222,670 27,489 33,764 37,656 31,251 30,619 35,684 32,636 34,282 2 Redemptions of own shares3 77,032 132,440 11,860 15,085 21,699 16,706 18,921 21,508 20,102 21,464 3 Net sales 30,448 90,230 15,629 18,679 15,957 14,545 11,698 14,176 12,534 12,818 4 Assets4 137,126 251,695 292,002 315,245 329,684 343,926 356,040 360,050 387,547 381,655 5 Cash position5 12,181 20,607 23,716 27,639 29,599 28,184 28,083 28,080 28,682 29,516 6 Other 124,945 231,088 268,286 287,606 300,085 315,742 327,957 331,970 358,865 352,139 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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Corporate profits with inventory valuation and capital consumption adjustment 213.7 264.7 280.6 265.0 266.4 274.3 296.3 285.6 296.4 293.1 299.6 2 Profits before tax 207.6 235.7 223.1 221.9 213.8 213.8 229.2 235.8 224.3 231.3 241.3 3 Profits tax liability 77.2 95.4 91.8 87.8 87.8 87.1 95.8 96.4 89.1 93.3 97.4 4 Profits after tax 130.4 140.3 131.4 134.1 126.0 126.7 133.4 139.4 135.2 138.0 144.0 5 Dividends 71.5 78.3 81.6 80.1 80.9 81.4 81.6 82.5 85.2 87.5 88.8 6 Undistributed profits 58.8 62.0 49.8 54.0 45.1 45.3 51.8 57.0 50.0 50.4 55.2 7 Inventory valuation -10.9 -5.5 -.6 -1.6 -.5 1.6 6.1 -9.4 16.5 10.6 8.0 8 Capital consumption adjustment 17.0 34.5 58.1 44.7 53.2 58.9 61.0 59.2 55.6 51.3 50.2 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 • January 1987 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities Billions of dollars, except for ratio 1985 1986 AAccccoouunntt 11998800 11998811 11998822 11998833 11998844 Q1 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 2 Cash 127.0 135.6 147.8 171.8 173.6 167.5 167.1 176.3 189.2 195.3 3 U.S. government securities 18.7 17.7 23.0 31.0 36.2 35.7 35.4 32.6 33.0 31.0 4 Notes and accounts receivable 507.5 532.5 517.4 583.0 633.1 650.3 654.1 661.0 671.5 663.4 5 Inventories 543.0 584.0 579.0 603.4 656.9 665.7 666.7 675.0 666.0 679.6 6 Other 132.1 149.7 169.8 186.7 203.2 203.5 211.2 218.0 224.9 226.3 7 Current liabilities 890.6 971.3 986.0 1,059.6 1,163.6 1,174.1 1,182.9 1,211.9 1,233.6 1,222.3 8 Notes and accounts payable 514.4 547.1 550.7 595.7 647.8 636.9 651.7 670.4 682.7 668.4 9 Other 376.2 424.1 435.3 463.9 515.8 537.1 531.2 541.5 550.9 553.9 10 Net working capital 437.8 448.3 451.1 516.3 539.5 548.6 551.7 551.1 551.0 573.4 11 MEMO: Current ratio1 1.492 1.462 1.458 1.487 1.464 1.467 1.466 1.455 1.447 1.469 1. Ratio of total current assets to total current liabilities. Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. NOTE. For a description of this series, see "Working Capital of Nonfinancial 20551. Corporations" in the July 1978 BULLETIN, pp. 533-37. SOURCE. Federal Trade Commission and Bureau of the Census. All data in this table reflect the most current benchmarks. Complete data are available upon request from the Flow of Funds Section, Division of Research and 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1985 1986 IInndduussttrryy 11998844 11998855 1199886611 Ql Q2 Q3 Q4 Ql Q2 Q31 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 7, Durable goods industries 66.24 73.27 68.23 70.29 74.34 72.99 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 ATrade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade; finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A37 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1985 1986 AAccccoouunntt 11998822 11998833 11998844 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 78.1 87.4 96.7 99.1 106.0 116.4 120.8 125.5 134.7 146.7 2 Business 101.4 113.4 135.2 142.1 144.6 141.4 152.8 159.7 160.3 152.7 3 Real estate 20.2 22.5 26.3 27.2 28.4 29.0 30.4 31.5 32.4 33.8 4 Total 199.7 223.4 258.3 268.5 279.0 286.5 304.0 316.7 327.5 333.2 Less: 5 Reserves for unearned income 31.9 33.0 36.5 36.6 38.6 41.0 40.9 41.3 41.8 43.6 6 Reserves for losses 3.5 4.0 4.4 4.9 4.8 4.9 5.0 5.1 5.2 5.5 7 Accounts receivable, net 164.3 186.4 217.3 227.0 235.6 240.6 258.1 270.3 280.4 284.1 8 All other 30.7 34.0 35.4 35.9 39.5 46.3 46.8 50.6 52.1 63.1 9 Total assets 195.0 220.4 252.7 262.9 275.2 286.9 304.9 321.0 332.5 347.2 LIABILITIES 10 Bank loans 18.3 18.7 21.3 19.8 18.5 18.2 21.0 20.4 22.9 25.3 11 Commercial paper 51.1 59.7 72.5 79.1 82.6 93.6 96.9 102.0 106.4 110.6 Debt 12 Other short-term 12.7 13.9 16.2 16.8 16.6 16.6 17.2 18.5 20.9 21.6 13 Long-term 64.4 68.1 77.2 78.3 85.7 86.4 93.0 100.0 101.8 105.3 14 All other liabilities 21.2 30.1 33.1 35.4 36.9 36.6 39.6 41.4 40.4 43.2 15 Capital, surplus, and undivided profits 27.4 29.8 32.3 33.5 34.8 35.7 37.1 38.8 40.2 41.3 16 Total liabilities and capital 195.0 220.4 252.7 262.9 275.2 286.9 304.9 321.0 332.5 347.2 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 SSSeeepppttt... 333000,,, 111999888666''' July Aug. Sept. July Aug. Sept. July Aug. Sept. 1 Total 152,689 949 190 -6,552 27,277 28,014 26,662 26,328 27,824 33,214 Retail financing of installment sales 2 Automotive (commercial vehicles) 18,048 390 291 1,290 1,365 1,302 2,299 975 1,011 1,009 3 Business, industrial, and farm equipment 19,979 -106 -91 -212 1,022 786 986 1,128 876 1,197 Wholesale financing 4 Automotive 15,626 -1,097 127 -9,172 9,030 10,220 7,536 10,128 10,093 16,708 5 Equipment 4,745 211 -44 36 900 845 829 689 889 793 6 All other 7,311 -242 33 113 1,656 1,703 1,881 1,898 1,669 1,768 Leasing 7 Automotive 16,570 103 185 549 1,077 892 1,075 973 707 526 8 Equipment 40,711 647 22 286 1,669 1,540 1,574 1,022 1,518 1,289 9 Loans on commercial accounts receivable and factored commercial accounts receivable 16,922 716 -307 539 9,208 9,429 9,298 8,492 9,735 8,760 10 All other business credit 12,777 327 -27 19 1,350 1,298 1,183 1,023 1,325 1,164 1. Not seasonally adjusted. NOTE. These data also appear in the Board's G.20 (422) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 DomesticN onfinancial Statistics • January 1987 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1986 Apr. May June July Aug. Sept. Oct. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 92.8 96.8 104.1 114.2 114.7 122.1 115.7 117.9 124.(K 127.2 2 Amount of loan (thousands of dollars) 69.5 73.7 77.4 83.9 83.0 88.0 83.4 84.8 90.4' 93.6 3 Loan/price ratio (percent) 77.1 78.7 77.1 75.9 74.7 74.9 73.9 74.5 75.2' 75.6 4 Maturity (years) 26.7 27.8 26.9 25.9 25.8 26.6 26.2 26.5 27.1' 28.1 5 Fees and charges (percent of loan amount)2 2.40 2.64 2.53 2.34 2.19 2.40 2.35 2.40 2.49' 2.70 6 Contract rate (percent per annum) 12.20 11.87 11.12 9.87 9.84 9.74 9.89 9.84 9.74' 9.58 Yield (percent per annum) 7 FHLBB series5 12.66 12.37 11.58 10.27 10.22 10.15 10.30 10.26 10.17' 10.03 8 HUD series4 13.43 13.80 12.28 9.99 10.32 10.38 10.28 9.88 9.96 9.89 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 13.11 13.81 12.24 9.80 10.07 9.98 10.01 9.80 9.90 9.80 10 GNMA securities6 12.25 13.13 11.61 9.17 9.23 9.57 9.31 9.11 9.17 9.06 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 74,847 83,339 94,574 98,746 98,096 97,295 97,255 96,675 97,717 98,402 12 FHA/VA-insured 37,393 35,148 34,244 33,246 32,558 31,241 30,766 28,451 26,658 25,435 13 Conventional 37,454 48,191 60,331 65,500 65,538 66,054 66,489 68,224 71,059 72,967 Mortgage transactions (during period) 14 Purchases 17,554 16,721 21,510 1,631 1,978 3,000 3,343 3,800 4,649 3,784 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 3,774 3,538 3,049 3,270 3,840 4,248 2,375 17 Outstanding (end of period) 5,461 6,384 3,402 6,942 8,444 7,862 7,706 7,671 7,252 5,740 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 18 Total 5,9% 9,283 12,399 13,144 14,302 14,194 13,795 14,010 19 FHA/VA 974 910 841 778 769 742 692 688 20 Conventional 5,022 8,373 11,558 12,366 13,533 13,452 13,103 13,322 Mortgage transactions (during period) 21 Purchases 23,089 21,886 44,012 6,195 8,947 10,505 8,518 10,458 n.a. n.a. 22 Sales 19,686 18,506 38,905 5,591 7,354 9,588 8,113R 10,132 Mortgage commitments9 23 Contracted (during period) 32,852 32,603 48,989 9,869 10,612 10,338 7,863' 13,707 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 Q3 Q4 Ql Q2' Q3 1 All holders 1,813,856 2,034,602 2,266,267' 2,200,561' 2,266,267' 2,315,038' 2,381,232 2,456,895 7 1- to 4-family 1,189,822 1,318,888 1,466,117' 1,425,357' 1,466,117' 1,493,772' 1,541,478 1,595,974 3 Multifamily 160,805 185,414 213,817' 203,626' 213,817' 221,508' 228,255 236,220 4 Commercial 350,389 418,300 480,718' 463,272' 480,718' 495,865' 509,873 525,109 5 112,840 112,000 105,615' 108,306' 105,615' 103,893' 101,626 99,592 6 Selected financial institutions 1,130,781 1,272,206 1,392,084' 1,357,483' 1,392,084' 1,410,541' 1,437,054 1,464,604 7 Commercial banks1 330,521 379,498 429,386' 415,599 429,386' 441,293' 456,146 472,048 8 1- to 4-family 182,514 196,163 213,624' 209,119 213,624' 216,58C 222,144 228,471 9 Multifamily 18,410 20,264 23,374' 22,254 23,374' 25,310' 26,306 27,709 10 Commercial 120,210 152,894 181,031' 173,190 181,031' 187,606' 195,459 203,217 11 Farm 9,387 10,177 11,357' 11,036 11,357' 11,797' 12,237 12,651 1? Savings banks 131,940 154,441 177,263 174,427 177,263 188,154' 203,238 215,135 13 1- to 4-family 93,649 107,302 121,879 119,952 121,879 131,381' 142,215 148,702 14 Multifamily 17,247 19,817 23,329 22,604 23,329 23,980' 26,549 28,593 15 Commercial 21,016 27,291 31,973 31,757 31,973 32,707' 34,370 37,752 16 Farm 28 31 82 114 82 86 104 88 17 Savings and loan associations 494,789 555,277 583,236' 573,682' 583,236' 574,732' 565,205 558,409 18 1- to 4-family 387,924 421,489 432,422' 425,596' 432,422' 420,073' 413,952 408,584 19 Multifamily 44,333 55,750 66,410' 62,39C 66,410' 67,140' 65,966 65,902 70 Commercial 62,403 77,605 83,798' 85,061' 83,798' 86,860' 84,755 83,409 ?1 Farm 129 433 606' 635' 606' 659' 532 514 77 Life insurance companies 150,999 156,699 171,797' 164,760' 171,797' 174,823' 180,041 185,241 73 1- to 4-family 15,319 14,120 12,381' 13,454' 12,381' 12,605' 12,608 12,958 74 Multifamily 19,107 18,938 19,894' 19,074' 19,894' 20,009' 20,181 20,981 75 Commercial 103,831 111,175 127,670' 120,183' 127,67C 130,569' 135,924 140,124 76 Farm 12,742 12,466 11,852' 12,049' 11,852' 11,64c 11,328 11,178 27 Finance companies2 22,532 26,291 30,402 29,015 30,402 31,539 32,424 33,771 28 Federal and related agencies 148,328 158,993 166,928 166,248 166,928 165,041' 161,398 159,429 29 Government National Mortgage Association 3,395 2,301 1,473 1,640 1,473 1,533 876 826 30 1- to 4-family 630 585 539 552 539 527 49 44 31 Multifamily 2,765 1,716 934 1,088 934 1,006 827 782 37, Farmers Home Administration 2,141 1,276 733 577 733 704 570 457 33 1- to 4-family 1,159 213 183 185 183 217 146 132 34 Multifamily 173 119 113 139 113 33 66 57 35 Commercial 409 497 159 72 159 217 111 115 36 Farm 400 447 278 181 278 237 247 153 37 Federal Housing and Veterans Administration 4,894 4,816 4,920 4,918 4,920 4,964 5,094 4,966 38 1- to 4-family 1,893 2,048 2,254 2,251 2,254 2,309 2,449 2,331 39 Multifamily 3,001 2,768 2,666 2,667 2,666 2,655 2,645 2,635 40 Federal National Mortgage Association 78,256 87,940 98,282 96,769 98,282 98,795 97,295 97,717 41 1- to 4-family 73,045 82,175 91,966 90,590 91,966 92,315 90,460 90,508 42 Multifamily 5,211 5,765 6,316 6,179 6,316 6,480 6,835 7,209 43 Federal Land Banks 52,010 52,261 47,498 49,255 47,498 45,422' 43,369 41,669 44 1- to 4-family 3,081 3,074 2,798 2,895 2,798 2,673' 2,552 2,452 45 Farm 48,929 49,187 44,700 46,360 44,700 42,749' 40,817 39,217 46 Federal Home Loan Mortgage Corporation 7,632 10,399 14,022 13,089 14,022 13,623 14,194 13,794 47 1- to 4-family 7,559 9,654 11,881 11,457 11,881 12,231 11,890 10,890 48 Multifamily 73 745 2,141 1,632 2,141 1,392 2,304 2,904 49 Mortgage pools or trusts3 285,073 332,057 415,042 388,948 415,042 440,701 475,615 520,675 50 Government National Mortgage Association 159,850 179,981 212,145 201,026 212,145 220,348 229,204 241,230 51 1- to 4-family 155,950 175,589 207,198 196,198 207,198 215,148 223,838 235,582 52 Multifamily 3,900 4,392 4,947 4,828 4,947 5,200 5,366 5,648 53 Federal Home Loan Mortgage Corporation 57,895 70,822 100,387 91,915 100,387 110,337 125,903 144,825 54 1- to 4-family 57,273 70,253 99,515 90,997 99,515 108,020 123,676 142,638 55 Multifamily 622 569 872 918 872 2,317 2,227 2,187 56 Federal National Mortgage Association 25,121 36,215 54,987 48,769 54,987 62,310 72,377 86,359 57 1- to 4-family 25,121 35,965 54,036 47,857 54,036 61,117 71,153 85,171 58 Multifamily n.a. 250 951 912 951 1,193 1,224 1,188 59 Farmers Home Administration 42,207 45,039 47,523 47,238 47,523 47,706 48,131 48,261 60 1- to 4-family 20,404 21,813 22,186 22,090 22,186 22,082 21,987 21,782 61 Multifamily 5,090 5,841 6,675 6,415 6,675 6,943 7,170 7,353 67 Commercial 7,351 7,559 8,190 8,192 8,190 8,150 8,347 8,409 63 Farm 9,362 9,826 10,472 10,541 10,472 10,531 10,627 10,717 64 Individuals and others4 249,674 271,346 292,213 287,882 292,213 298,755 307,165 312,187 65 1- to 4-family 141,769 152,154 162,853 163,149 162,853 164,955 169,935 171,958 66 Multifamily 40,873 48,480 55,195 52,526 55,195 57,850 60,589 63,072 67 Commercial 35,169 41,279 47,897 44,817 47,897 49,756 50,907 52,083 68 Farm 31,863 29,433 26,268 27,390 26,268 26,194 25,734 25,074 1. Includes loans held by nondeposit trust companies but not bank trust 4. Other holders include mortgage companies, real estate investment trusts, departments. state and local credit agencies, state and local retirement funds, noninsured 2. Assumed to be entirely 1- to 4-family loans. pension funds, credit unions, and other U.S. agencies. 3. Outstanding principal balances of mortgage pools backing securities insured NOTE. Based on data from various institutional and governmental sources, with or guaranteed by the agency indicated. some quarters estimated in part by the Federal Reserve. Multifamily debt refers to loans on structures of five or more units. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • January 1987 1.55 CONSUMER INSTALLMENT CREDIT1-4 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1986 Jan. Feb. Mar. Apr. May June July Aug/ Sept. Amounts outstanding (end of period) 1 453,580 535,098 542,753 547,852 550,939 555,810 562,267 567,653 573,216 576,609 584,977 By major holder 2 Commercial banks 209,158 240,796 243,256 244,761 245,172 247,498 248,681 249,753 251,197 251,908 253,543 3 Finance companies2 96,126 120,095 123,717 126,001 127,422 128,728 131,172 134,933 137,197 138,938 144,559 4 Credit unions 66,544 75,127 75,810 76,431 76,953 77,957 78,474 79,095 80,130 80,622 81,594 5 Retailers3 37,061 39,187 39,416 39,497 39,844 39,826 40,139 40,076 40,251 40,351 40,445 6 Savings institutions 40,330 55,555 56,290 57,048 57,573 58,024 60,247 60,352 61,051 61,421 61,540 7 Gasoline companies 4,361 4,337 4,264 4,114 3,975 3,777 3,554 3,445 3,389 3,368 3,295 By major type of credit 8 Automobile 173,122 206,482 210,661 213,342 214,361 215,814 218,965 222,606 226,234 228,814 236,551 y Commercial banks 83,900 92,764 93,489 93,828 93,377 93,013 93,157 93,261 94,014 94,686 95,988 10 Credit unions 28,614 30,577 30,855 31,107 31,320 31,728 31,939 32,191 32,613 32,813 33,209 11 Finance companies 54,663 73,391 76,410 78,310 79,416 80,685 83,221 86,520 88,862 90,578 %,598 12 Savings institutions 5,945 9,750 9,907 10,097 10,248 10,386 10,648 10,634 10,745 10,736 10,757 13 Revolving 98,514 118,2% 119,682 120,724 122,131 123,442 124,545 124,720 125,577 125,915 126,426 14 Commercial banks 58,145 73,893 74,991 75,953 77,021 78,421 79,151 79,397 79,998 80,133 80,551 15 Retailers 33,064 34,560 34,770 34,843 35,188 35,170 35,449 35,390 35,542 35,639 35,688 16 Gasoline companies 4,361 4,337 4,264 4,114 3,975 3,777 3,554 3,445 3,389 3,368 3,295 17 Savings institutions 2,944 5,506 5,657 5,813 5,947 6,075 6,392 6,488 6,649 6,775 6,893 18 Mobile home 24,184 25,461 25,371 25,573 25,584 25,513 25,560 25,479 25,398 25,215 24,949 19 Commercial banks 9,623 9,578 9,457 9,566 9,348 9,264 9,215 9,1% 9,156 9,086 9,037 20 Finance companies 9,161 9,116 9,125 9,161 9,327 9,286 9,115 9,077 8,989 8,882 8,681 21 Savings institutions 5,400 6,767 6,789 6,846 6,909 6,%3 7,230 7,206 7,253 7,248 7,231 22 Other 157,760 184,859 187,039 188,212 188,863 191,041 193,197 194,847 1%,007 196,665 197,050 23 Commercial banks 57,490 64,561 65,319 65,414 65,427 66,800 67,158 67,898 68,030 68,003 67,%7 24 Finance companies 32,302 37,588 38,182 38,530 38,678 38,757 38,836 39,336 39,345 39,479 39,281 25 Credit unions 37,930 44,550 44,955 45,323 45,633 46,228 46,535 46,903 47,517 47,809 48,385 26 Retailers 3,997 4,627 4,646 4,653 4,656 4,656 4,690 4,686 4,710 4,712 4,758 27 Savings institutions 26,041 33,533 33,937 34,291 34,469 34,600 35,977 36,024 36,405 36,662 36,660 Net change (during period) 28 Total 77,341 81,518 7,655 5,099 3,087 4,871 6,457 5,386 5,563 3,393 8,368 By major holder 29 Commercial banks 39,819 31,638 2,460 1,505 411 2,326 1,183 1,072 1,444 711 1,635 30 Finance companies2 9,961 23,%9 3,622 2,284 1,421 1,306 2,444 3,761 2,264 1,741 5,621 31 Credit unions 13,456 8,583 683 621 522 1,004 517 621 1,035 492 972 32 Retailers3 2,900 2,126 229 81 347 -18 313 -63 175 100 94 33 Savings institutions 11,038 15,225 735 758 525 451 2,223 105 699 370 119 34 Gasoline companies 167 -24 -73 -150 -139 -198 -223 -109 -56 -21 -73 By major type of credit 35 Automobile 27,214 33,360 4,179 2,681 1,019 1,453 3,151 3,641 3,628 2,580 7,737 36 Commercial banks 16,352 8,864 725 339 -451 -364 144 104 753 672 1,302 37 Credit unions 3,223 1,963 278 252 213 408 211 252 422 200 3% 38 Finance companies 4,576 18,728 3,019 1,900 1,106 1,269 2,536 3,299 2,342 1,716 6,020 39 Savings institutions 3,063 3,805 157 190 151 138 262 -14 111 -9 21 40 Revolving 20,145 19,782 1,386 1,042 1,407 1,311 1,103 175 857 338 511 41 Commercial banks 15,949 15,748 1,098 %2 1,068 1,400 730 246 601 135 418 42 Retailers 2,512 1,4% 210 73 345 -18 279 -59 152 97 49 43 Gasoline companies 167 -24 -73 -150 -139 -198 -223 -109 -56 -21 -73 44 Savings institutions 1,517 2,562 151 156 134 128 317 % 161 126 118 45 Mobile home 1,990 1,277 -90 202 11 -71 47 -81 -81 -183 -266 46 Commercial banks -199 -45 -121 109 -218 -84 -49 -19 -40 -70 -49 47 Finance companies 544 -45 9 36 166 -41 -171 -38 -88 -107 -201 48 Savings institutions 1,645 1,367 22 57 63 54 267 -24 47 -5 -17 49 Other 27,992 27,099 2,180 1,173 651 2,178 2,156 1,650 1,160 658 385 50 Commercial banks 7,717 7,071 758 95 13 1,373 358 740 132 -27 -36 51 Finance companies 4,841 5,286 594 348 148 79 79 500 9 134 -198 52 Credit unions 10,233 6,620 405 368 310 595 307 368 614 292 576 53 Retailers 388 630 19 7 3 0 34 -4 24 2 46 54 Savings institutions 4,813 7,492 404 354 178 131 1,377 47 381 257 -2 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 Mar. Apr. May June July Aug. Sept. INTEREST RATES Commercial banks1 1 48-month new car2 13.92 13.71 12.91 n.a. n.a. 11.45 n.a. n.a. 11.00 n.a. 2 24-month personal 16.68 16.47 15.94 n.a. n.a. 14.89 n.a. n.a. 14.70 n.a. 3 120-month mobile home2 16.08 15.58 14.96 n.a. n.a. 13.97 n.a. n.a. 13.95 n.a. 4 Credit card 18.78 18.77 18.69 n.a. n.a. 18.32 n.a. n.a. 18.15 n.a. Auto finance companies New car 12.58 14.62 11.98 10.51 10.55 9.49 9.35 9.31 9.29 5.40 6 Used car 18.74 17.85 17.59 16.63 16.67 16.56 16.06 15.83 15.56 15.23 OTHER TERMS3 Maturity (months) 7 New car 45.9 48.3 51.5 51.0 50.6 49.4 49.5 49.9 50.4 44.5 8 Used car 37.9 39.7 41.4 42.4 42.5 42.5 42.7 42.8 42.9 42.5 Loan-to-value ratio 9 New car 86 88 91 90 89 89 89 89 90 92 10 Used car 92 92 94 95 % 97 97 97 97 98 Amount financed (dollars) 11 New car 8,787 9,333 9,915 10,306 10,402 10,521 10,608 10,748 10,756 11,162 12 Used car 5,033 5,691 6,089 6,207 6,281 6,393 6,611 6,614 6,569 6,763 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 • January 1987 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 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 1 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 3 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 35 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 11998800 11998811 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 ? Total net advances 94.9 104.4 115.4 115.3 154.6 193.0 106.8 133.4 175.8 195.6 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 20.8 .7 7.9 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 74.9 110011..55 68.8 69.8 80.0 92.9 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 88.8 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 57.7 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 20 Credit market funds advanced by private financial institutions 286.2 320.2 261.9 391.9 550.5 547.2 447.6 583.4 517.5 461.2 633.2 574.1 71 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 7? 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 23 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 75 Sources of funds 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 ?9 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 76.6 116.3 153.0 196.4 307.9 175.8 181.7 211.0 220.2 395.6 52.5 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 19 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 Checkable deposits 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 -22.2 33.3 41.6 163.4 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 • January 1987 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures' 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1986 MMeeaassuurree 11998833 11998844 11998855 Feb. Mar. Apr. May June July Aug.' Sept.' Oct. 1 Industrial production 109.2 121.8 124.5 125.3 123.6 124.7 124.2 124.2 124.9' 125.1 125.2 125.2 Market groupings 2 Products, total 113.9 127.1 131.7 132.9 131.2 132.7 132.4 132.4 133.2' 133.7 133.8 133.8 3 Final, total 114.7 127.8 132.0 132.8 130.6 132.1 131.6 131.1 132.0' 132.5 132.9 132.7 4 Consumer goods 109.3 118.2 120.7 123.3 121.8 124.5 124.3 124.4 125.2' 125.1 125.1 124.6 5 Equipment 121.7 140.5 147.1 145.4 142.3 142.3 141.2 140.0 141.0' 142.4 143.1 143.5 6 Intermediate 111.2 124.9 130.6 133.4 133.3 134.5 135.1 137.0 137.3' 137.8 137.2 137.7 7 Materials 102.8 114.6 114.7 114.8 113.3 113.8 113.0 113.1 113.6' 113.2 113.5 113.5 Industry groupings 8 Manufacturing 110.2 123.9 127.1 128.7 127.2 128.7 128.2 128.3 129.2' 129.5 129.5 129.5 Capacity utilization (percent)2 9 Manufacturing 74.0 80.8 80.3 80.2 79.1 79.9 79.4 79.3 79.7 79.8 79.6 79.4 10 Industrial materials industries 75.3 82.3 80.2 79.6 78.5 78.7 78.1 78.0 78.3 78.0 78.1 77.9 11 Construction contracts (1977 = 100)3 138.0 150.0 161.0 162.0 149.0 176.0 160.0 161.0 163.0 168.0 158.0 170.0 12 Nonagricultural employment, total4 109.4 114.5 118.5 120.6 120.6 121.0 121.2 121.1 121.4 121.6 121.8 122.2 13 Goods-producing, total 95.9 101.6 102.9 102.9 102.5 102.9 102.6 102.1 102.2 102.2 102.1 102.2 14 Manufacturing, total 93.6 98.6 98.7 98.0 97.8 97.8 97.5 97.2 97.1 97.1 97.0 97.2 15 Manufacturing, production-worker ... 88.6 94.1 93.5 92.6 92.4 92.4 92.1 91.8 91.7 91.7 91.6 91.9 16 Service-producing 115.0 120.0 125.0 128.0 128.2 128.6 129.0 129.0 129.4 129.7 130.1 130.5 17 Personal income, total 176.6 193.5 206.2 213.7 214.3 216.9 216.6 216.6 217.3 217.8 218.5 219.2 18 Wages and salary disbursements 168.7 184.8 197.8 205.7 206.4 206.8 207.1 207.6 208.5 209.6 210.1 211.5 19 Manufacturing 149.0 164.6 172.5 176.2 176.4 175.8 176.1 175.4 175.5 176.6 176.4 178.9 20 Disposable personal income5 176.0 193.6 205.0 212.9 213.7 216.5 215.9 215.5 216.0 216.1 216.6 217.2 21 Retail sales (1977 = 100)6 162.0 179.0 190.6 194.5 193.7 195.4 197.0 197.5 198.9 201.7 212.5 201.8 Prices7 22 Consumer 298.4 311.1 322.2 327.5 326.0 325.3 326.3 327.9 328.0 328.6 330.2 330.5 23 Producer finished goods 285.2 291.1 293.7 291.9 288. (K 287.2 288.9' 289.3' 288.0 288.3 287.5 290.5 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 Mar. Apr. May June July Aug. Sept.' Oct. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 176,414 178,602 180,440 182,223 182,387 182,545 182,732 182,906 183,074 183,261 183,450 2 Labor force (including Armed Forces)1 113,749 115,763 117,695 119,445 119,473 119,898 120,345 120,296 120,428 120,484 120,746 3 Civilian labor force 111,550 113,544 115,461 117,207 117,234 117,664 118,116 118,072 118,182 118,220 111188,,448822 Employment 4 Nonagricultural industries2 97,450 101,685 103,971 105,503 105,670 105,950 106,508 106,769 107,107 106,770 107,091 5 Agriculture 3,383 3,321 3,179 3,285 3,222 3,160 3,165 3,112 3,048 3,121 3,149 Unemployment 6 Number 10,717 8,539 8,312 8,419 8,342 8,554 8,443 8,190 8,027 8,329 8,242 7 Rate (percent of civilian labor force) ... 9.6 7.5 7.2 7.2 7.1 7.3 7.1 6.9 6.8 7.0 7.0 8 Not in labor force 62,665 62,839 62,745 62,778 62,914 62,647 62,387 62,610 62,646 62,777 62,704 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 90,196 94,461 97,698 99,484 99,783 99,918 99,843 100,105 100,283' 100,448 100,746 10 Manufacturing 18,434 19,412 19,426 19,255 19,245 19,201 19,135 19,121 19,123' 19,099 19,126 11 Mining 952 974 969 852 821 790 772 768 753' 743 746 12 Contract construction 3,948 4,345 4,661 4,838 4,972 4,974 4,947 4,980 5,012 5,008 5,010 13 Transportation and public utilities 4,954 5,171 5,300 5,280 5,266 5,265 5,167 5,288 5,255' 5,309 5,314 14 Trade 20,881 22,134 23,195 23,669 23,715 23,783 23,773 23,841 23,893' 23,888 23,980 15 Finance 5,468 5,682 5,924 6,184 6,228 6,261 6,295 6,334 6,364' 6,383 6,399 16 Service 19,694 20,761 21,929 22,707 22,825 22,924 23,072 23,176 23,255' 23,275 23,368 17 Government 15,869 15,984 16,295 16,699 16,711 16,720 16,682 16,597 16,628' 16,743 16,803 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 • January 1987 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1985 1986 1985 1986 1985 1986 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 124.7 125.0 124.3 125.1 155.4 156.3 157.1 157.9 80.2 80.0 79.2 79.2 2 Mining 107.1 105.4 100.1 96.6 132.5 132.1 132.1 137.5 80.9 79.6 75.6 73.2 3 Utilities 112.8 110.5 109.5 110.6 135.7 136.3 136.9 149.0 83.2 81.1 79.5 80.5 4 Manufacturing 127.4 128.4 128.3 129.5 159.5 160.5 161.4 162.3 79.9 80.0 79.5 79.8 5 Primary processing ... 110.3 111.5 111.1 111.9 133.1 133.6 134.0 134.5 82.8 83.5 82.9 83.2 6 Advanced processing . 137.8 138.5 138.8 140.1 175.3 176.7 177.9 179.2 78.6 78.4 78.0 78.2 7 Materials 114.3 114.5 113.4 113.4 143.6 144.2 144.7 145.3 79.6 79.4 78.3 78.1 8 Durable goods 121.1 120.9 118.8 118.7 159.0 159.9 160.7 161.5 76.2 75.6 73.9 73.5 9 Metal materials 82.6 79.0 75.2 72.6 115.5 115.0 114.5 114.0 71.5 68.7 65.7 63.7 10 Nondurable goods 113.9 115.7 116.8 118.9 138.6 139.0 139.5 139.9 82.2 83.2 83.8 85.0 11 Textile, paper, and chemical.. 114.0 116.2 117.0 119.6 138.0 138.4 138.8 139.2 82.7 83.9 84.3 85.9 17 124.8 128.8 130.2 136.5 137.3 138.1 91.4 93.8 94.3 n 113.4 115.3 115.4 143.6 144.0 144.3 79.0 80.1 79.9 14 Energy materials 102.6 102.2 100.8 99.4 120.9 121.1 121.3 121.4 84.9 84.4 82.9 81.9 Previous cycle1 Latest cycle2 1985 1986 High Low High Low Aug. Feb. Mar. Apr. May June July Aug/ Sept/ Oct. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 80.6 80.2 79.0 79.5 79.1 79.0r 77.2 79.2 79.2 79.0 16 Mining 92.8 87.8 95.2 76.9 81.6 79.4 77.9 76.4 75.5 74.9 73.5 73.1 72.7 72.5 17 Utilities 95.6 82.9 88.5 78.0 81.5 80.4 80.1 80.0 79.3 79.2 79.9 78.8 80.7 81.3 18 Manufacturing 87.7 69.9 86.5 68.0 80.3 80.2 79.1 79.9 79.4 79.3 79.7 79.8 79.6 79.4 19 Primary processing ... 91.9 68.3 89.1 65.1 82.5 83.6 82.4 83.2 82.9 82.7 82.9 83.3 83.3 83.6 20 Advanced processing . 86.0 71.1 85.1 69.5 79.3 78.6 77.4 78.5 78.0 77.7 78.4 78.0 77.8 77.5 21 Materials 92.0 70.5 89.1 68.4 79.8 79.6 78.5 78.7 78.1 78.0 78.3 78.0 78.1 77.9 22 Durable goods 91.8 64.4 89.8 60.9 76.8 75.9 74.5 74.9 73.7 73.2 73.7 73.5 73.3 73.3 23 Metal materials 99.2 67.1 93.6 45.7 70.2 69.0 66.0 68.3 65.2 63.2 63.8 63.8 63.8 64.8 24 Nondurable goods .... 91.1 66.7 88.1 70.6 81.6 83.5 82.5 83.6 83.5 84.3 85.0 85.4 85.9 85.7 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 81.7 84.2 83.4 83.6 84.2 85. V 85.6 86.4 86.9 86.8 26 Paper 98.4 70.6 97.3 79.9 89.7 93.8 93.0 93.6 93.1 95.y 97.8 97.6 96.4 94.6 27 Chemical 92.5 64.4 87.9 63.3 78.7 80.2 79.4 79.4 80.2 80.4 80.2 81.1 81.9 80.8 28 Energy materials 94.6 86.9 94.0 82.2 84.8 84.3 83.7 82.8 82.9 83.1 82.3 81.0 81.4 81.1 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 11998855 Grouping por- avg. tion Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug. Sept.'' Oct/ Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 123.8 123.6 124.8 125.6 126.2 125.3 123.6 124.7 124.2 124.2 124.9 125.1 125.2 125.2 2 Products 57.72 130.8 131.0 132.8 133.0 134.0 132.9 131.2 132.7 132.4 132.4 133.2 133.7 133.8 133.8 3 Final products 44.77 131.1 131.0 133.1 133.2 133.9 132.8 130.6 132.1 131.6 131.1 132.0 132.5 132.9 132.7 4 Consumer goods 25.52 120.2 120.5 122.7 123.3 123.8 123.3 121.8 124.5 124.3 124.4 125.2 125.1 125.1 124.6 5 Equipment 19.25 145.4 144.9 147.0 146.4 147.5 145.4 142.3 142.3 141.2 140.0 141.0 142.4 143.1 143.5 6 Intermediate products 12.94 130.0 131.2 131.8 132.0 134.2 133.4 133.3 134.5 135.1 137.0 137.3 137.8 137.2 137.7 7 Materials 42.28 114.2 113.4 113.9 115.4 115.5 114.8 113.3 113.8 113.0 113.1 113.6 113.2 113.5 113.5 Consumer goods 8 Durable consumer goods 6.89 112.9 112.3 115.4 115.3 116.0 116.6 112.4 115.9 113.8 114.3 116.3 115.5 117.0 115.1 9 Automotive products 2.98 114.0 113.2 115.6 113.9 116.2 117.6 110.4 116.4 113.2 113.7 116.4 114.5 117.4 112.0 10 Autos and trucks 1.79 112.0 111.3 114.1 U0.4 118.2 119.4 106.3 115.1 110.3 112.2 114.5 110.4 116.8 107.7 11 Autos, consumer 1.16 98.9 94.9 95.6 94.6 105.5 107.1 93.7 100.8 94.8 99.3 95.3 87.8 96.2 91.9 12 Trucks, consumer .63 136.3 141.8 148.6 139.8 141.7 142.1 129.6 141.5 139.1 136.1 150.3 152.4 155.1 13 Auto parts and allied goods 1.19 116.9 116.0 117.7 119.0 113.3 114.9 116.6 118.4 117.4 116.1 119.1 120.6 118.4 118.5 14 Home goods 3.91 112.2 111.6 115.3 116.4 115.8 115.8 113.9 115.5 114.3 114.8 116.3 116.3 116.7 117.4 15 Appliances, A/C and TV 1.24 131.0 127.5 138.8 140.4 133.2 135.1 133.7 138.8 133.9 137.5 138.9 139.4 140.8 141.4 16 Appliances and TV 1.19 131.8 129.8 141.3 143.2 135.7 137.6 136.0 140.6 135.8 139.1 141.6 142.5 143.0 17 Carpeting and furniture .96 119.8 121.9 124.6 123.3 125.1 124.4 121.2 121.8 123.3 122.5 126.6 124.2 124.1 18 Miscellaneous home goods 1.71 94.3 94.4 93.1 95.1 98.0 97.0 95.5 95.0 95.0 94.1 94.1 95.2 95.2 19 Nondurable consumer goods 18.63 122.9 123.5 125.3 126.3 126.6 125.8 125.3 127.7 128.1 128.1 128.4 128.6 128.1 128.1 20 Consumer staples 15.29 129.0 129.4 131.3 132.5 132.8 132.3 131.6 134.3 135.0 135.1 135.3 135.6 135.1 135.0 21 Consumer foods and tobacco 7.80 128.8 128.7 130.5 131.6 130.1 131.1 130.3 131.9 132.4 133.3 132.2 133.3 132.5 22 Nonfood staples 7.49 129.2 130.1 132.1 133.4 135.6 133.5 133.0 136.7 137.7 137.0 138.5 138.1 137.8 138.0 23 Consumer chemical products .. 2.75 149.1 149.1 154.8 153.6 156.3 158.3 156.4 163.1 162.4 163.6 166.4 163.4 163.7 24 Consumer paper products 1.88 141.9 143.5 143.2 146.5 148.9 143.4 143.1 145.1 148.6 147.1 146.4 147.4 146.8 25 Consumer energy 2.86 101.8 103.0 103.1 105.4 107.0 103.2 104.0 106.0 106.8 104.8 106.6 107.6 107.1 26 Consumer fuel 1.44 88.6 90.1 89.8 91.7 94.1 92.0 92.2 93.7 96.4 91.8 91.2 95.9 93.3 27 Residential utilities 1.42 115.3 116.2 116.6 119.4 120.1 114.5 116.1 118.4 117.5 118.1 122.3 119.6 Equipment 28 Business and defense equipment 18.01 146.0 145.7 148.2 147.8 149.1 147.8 145.5 146.6 146.0 145.1 146.4 147.7 148.4 148.6 29 Business equipment 14.34 139.6 138.3 140.8 140.0 141.5 140.5 137.7 138.6 137.9 136.6 137.9 139.2 139.7 139.6 30 Construction, mining, and farm .. 2.08 64.3 64.2 65.1 66.3 65.3 63.0 59.5 58.6 60.9 61.9 60.6 58.3 57.8 31 Manufacturing 3.27 110.7 110.0 110.5 111.6 113.0 112.9 112.4 111.9 111.9 111.7 112.6 113.3 112.2 112.0 32 Power 1.27 83.5 85.3 84.1 85.4 82.9 82.3 82.0 83.0 82.9 83.5 81.7 81.6 81.3 81.9 33 Commercial 5.22 217.9 212.3 218.6 217.0 217.8 216.8 214.3 213.4 212.9 208.2 214.5 217.2 216.3 216.4 34 Transit 2.49 105.4 109.5 109.7 105.5 112.7 111.7 104.3 112.1 107.3 108.8 103.9 106.9 113.7 112.6 35 Defense and space equipment 3.67 170.6 174.8 177.2 178.5 178.7 176.3 176.2 178.0 178.0 178.4 179.5 181.0 182.4 183.6 Intermediate products 36 Construction supplies 5.95 118.3 120.2 120.5 119.8 124.0 122.6 122.6 123.6 123.5 124.1 124.0 125.1 124.8 125.2 37 Business supplies 6.99 140.0 140.5 141.5 142.4 142.9 142.6 142.5 143.8 145.0 147.9 148.6 148.7 147.7 38 General business supplies 5.67 143.9 144.3 145.3 146.2 147.2 146.7 146.4 148.0 148.3 151.6 153.3 152.9 152.1 39 Commercial energy products 1.31 122.9 123.8 125.4 126.2 124.4 124.9 125.6 125.8 130.7 131.9 128.3 130.6 128.9 Materials 40 Durable goods materials 20.50 121.4 120.1 121.2 121.9 122.2 121.3 119.3 120.2 118.4 117.8 118.8 118.7 118.5 118.7 41 Durable consumer parts 4.92 100.3 99.8 100.7 101.1 103.5 103.2 99.9 99.3 96.4 96.3 96.7 95.0 94.2 94.0 42 Equipment parts 5.94 158.0 152.7 154.0 154.1 153.8 153.0 153.7 154.8 152.3 151.8 154.3 155.6 155.2 154.9 43 Durable materials n.e.c 9.64 109.7 110.3 111.4 112.8 112.2 111.0 108.0 109.4 108.8 107.9 108.2 108.0 108.4 109.0 44 Basic metal materials 4.64 84.8 85.5 87.8 87.9 85.2 83.0 79.6 82.9 78.9 76.7 77.4 76.9 77.1 45 Nondurable goods materials 10.09 112.2 113.6 113.3 114.9 116.2 116.1 114.8 116.5 116.5 117.7 118.9 119.5 120.3 120.2 46 Textile, paper, and chemical materials 7.53 112.2 113.7 113.4 115.0 116.5 116.5 115.5 115.9 116.9 118.2 119.0 120.2 121.1 121.1 47 Textile materials 1.52 98.7 105.2 106.1 103.8 104.1 107.5 105.7 106.7 108.4 109.5 111.2 113.4 115.1 48 Pulp and paper materials 1.55 124.1 121.8 123.6 129.0 129.7 128.8 128.0 129.0 128.6 132.7 135.6 135.5 134.1 49 Chemical materials 4.46 112.7 113.7 112.4 114.0 116.2 115.4 114.5 114.5 115.7 116.1 115.9 117.3 118.6 50 Miscellaneous nondurable materials 2.57 112.1 113.4 112.8 114.4 115.4 115.0 112.8 118.2 115.3 116.4 118.3 117.2 117.9 51 Energy materials 11.69 103.4 101.5 101.8 104.5 103.0 102.1 101.4 100.4 100.5 100.8 99.9 98.3 98.9 98.5 52 Primary energy 7.57 107.2 105.5 106.5 108.1 106.9 106.7 107.4 106.2 106.7 106.5 104.8 104.4 102.8 53 Converted fuel materials 4.12 96.4 94.2 93.3 97.9 95.8 93.6 90.5 89.7 89.2 90.4 90.9 87.3 91.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • January 1987 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 Oct. Nov. Dec Jan. Feb. Apr. May June Julyr Aug. Sept.? Oct Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 110.0 108.8 108.8 110.2 109.8 106.8 105.4 104.2 103.1 102.6 101.8 101.1 101.6 101.8 2 Mining 9.83 108.8 106.9 106.9 107.4 108.1 105.1 103.0 101.0 99.8 98.9 97.1 96.8 95.8 95.6 3 Utilities 5.96 111.9 111.8 111.9 114.8 112.5 109.7 109.3 109.4 108.5 108.6 109.7 108.3 111.1 112.1 4 Manufacturing 84.21 126.4 126.3 127.8 128.2 129.4 128.7 127.2 128.7 128.2 128.3 129.2 129.5 129.5 129.5 5 Nondurable 35.11 125.1 125.8 127.2 127.5 129.3 128.7 127.7 129.6 129.9 131.2 131.7 132.4 132.2 132.4 6 Durable 49.10 127.3 126.7 128.2 128.7 129.5 128.7 126.8 128.1 127.0 126.2 127.4 127.5 127.6 127.4 Mining 7 Metal 10 .50 75.0 76.0 78.3 77.3 73.5 77.2 75.9 76.0 72.0 65.9 69.2 8 Coal 11.12 1.60 126.8 122.9 125.8 128.4 130.8 126.5 124.7 124.4 124.0 127.3 120.2 122.2 120.8 9 Oil and gas extraction 13 7.07 106.2 104.4 103.6 104.2 104.9 101.1 99.2 96.2 95.1 93.3 92.4 91.2 90.6 90.4 10 Stone and earth minerals 14 .66 118.3 118.5 118.0 114.6 113.5 116.8 111.6 115.0 112.4 114.5 111.8 115.8 108.1 Nondurable manufactures 11 Foods 20 7.96 130.2 129.4 131.5 132.1 132.0 132.9 132.2 133.1 133.7 134.6 134.3 135.4 134.8 12 Tobacco products 21 .62 100.2 103.2 102.8 100.3 93.8 97.0 93.6 100.3 101.6 97.6 97.9 96.9 13 Textile mill products 22 2.29 103.2 107.7 110.0 107.7 107.9 109.9 108.0 111.4 111.3 112.6 113.4 114.2 116.2 14 Apparel products 23 2.79 100.9 102.1 103.8 104.5 105.5 102.8 102.8 103.1 102.6 101.7 102.5 102.2 103.0 15 Paper and products 26 3.15 127.6 127.7 128.9 131.3 133.6 132.6 132.4 134.1 133.2 137.2 138.1 138.9 137.5 16 Printing and publishing 27 4.54 153.9 154.5 156.8 157.6 160.9 156.7 157.8 161.6 161.9 164.0 165.4 165.0 164.0 164.5 17 Chemicals and products 28 8.05 127.1 127.3 128.2 128.1 131.7 132.0 130.2 132.8 131.5 134.2 134.1 134.4 134.7 18 Petroleum products 29 2.40 86.8 87.9 87.6 88.9 94.7 90.1 88.6 91.3 95.7 91.8 90.6 94.5 93.3 92.4 19 Rubber and plastic products... 30 2.80 146.9 149.0 150.1 149.4 150.2 151.1 147.8 146.8 150.1 152.2 155.5 156.0 156.4 20 Leather and products 31 .53 68.5 68.2 68.7 66.4 65.4 64.8 62.7 61.5 59.5 57.9 61.9 62.0 60.2 Durable manufactures 21 Lumber and products 24 2.30 113.4 116.2 115.0 116.1 120.5 120.3 120.7 121.3 121.6 120.9 120.8 123.1 22 Furniture and fixtures 25 1.27 139.7 140.0 142.2 140.5 141.2 143.2 142.9 145.9 146.2 147.1 149.5 147.8 147.0 23 Clay, glass, stone products.... 32 2.72 115.5 116.1 116.7 118.2 120.0 119.3 120.0 121.6 120.2 120.8 119.6 119.6 121.4 24 Primary metals 33 5.33 80.5 81.9 82.9 81.7 82.4 80.3 76.3 78.1 74.8 71.4 73.6 73.4 72.8 73.7 25 Iron and steel 331.2 3.49 70.4 72.4 73.9 71.6 72.2 69.5 64.3 65.6 60.2 58.3 61.7 60.8 59.2 26 Fabricated metal products .... 34 6.46 107.3 107.9 107.6 108.2 109.2 108.5 107.6 108.2 106.5 106.6 105.7 105.8 105.9 106.0 27 Nonelectrical machinery 35 9.54 145.3 141.7 144.8 146.2 144.9 143.9 141.7 140.8 141.3 140.4 142.6 143.0 141.3 142.0 28 Electrical machinery 36 7.15 168.4 164.2 166.9 168.7 166.1 164.8 165.2 166.8 166.0 163.2 166.8 167.1 166.8 167.3 29 Transportation equipment 37 9.13 121.4 123.3 124.8 124.0 128.2 127.5 122.6 126.2 124.1 125.1 125.6 125.1 127.8 125.2 30 Motor vehicles and parts.... 371 5.25 111.5 111.4 112.6 111.4 116.5 116.4 108.1 112.6 108.7 110.6 111.2 108.2 112.3 107.2 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 134.9 139.4 141.3 141.0 143.9 142.6 142.4 144.8 145.0 144.7 145.2 148.0 148.8 149.7 32 Instruments 38 2.66 139.1 138.4 139.9 140.4 141.5 141.9 142.0 142.4 140.3 139.9 141.7 142.1 140.6 139.4 33 Miscellaneous manufactures... 39 1.46 96.1 95.0 94.8 96.6 100.9 100.9 99.0 99.2 101.0 98.3 97.5 97.8 97.0 Utilities 34 Electric 44..1177 111199..77 111199..44 112200..11 112222..44 111199..77 111199..55 111199..88 112211..66 112211..77 112233..11 112255..44 112222..44 112266..00 Gross value (billions of 1978 dollars, annual rates) MAJOR MARKET 35 Products, total 517.5 1,650.9 1,658.6 1,680.6 1,676.6 1,702.1 1,686.5 1,660.8 1,686.3 1,687.6 1,676.7 1,669.9 1,682.2 1,685.1 1,684.9 36 Final 405.7 1,282.3 1,284.6 1,304.9 1,302.5 1,321.2 1,310.3 1,282.5 1,307.0 1,301.1 1,289.5 1,282.7 1,293.7 1,299.3 1,293.5 37 Consumer goods . 272.7 820.7 822.1 838.1 841.7 850.7 845.3 832.0 852.3 852.4 843.8 842.3 848.2 846.1 839.9 38 Equipment 133.0 461.7 462.5 466.8 460.8 470.5 465.1 450.4 454.7 448.7 445.7 440.4 445.5 453.2 453.7 39 Intermediate 111.9 368.6 374.0 375.7 374.1 380.8 376.2 378.3 379.3 386.4 387.2 387.1 388.5 385.8 391.4 A A major revision of the industrial production index and the capacity (July 1985), pp. 487-501. The revised indexes for January through June 1985 were utilization rates was released in July 1985. See "A Revision of the Index of shown in the September BULLETIN. Industrial Production" and accompanying tables that contain revised indexes NOTE. These data also appear in the Board's G.12.3 (414) release. For address, (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1985 1986 IItteemm 11998833 11998844 11998855 Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,605 1,682 1,733 1,839 1,861 1,808 1,834 1,885 1,788 1,792 1,759 1,673 1,603 2 1-family 902 922 957 963 1,060 1,033 1,043 1,139 1,092 1,121 1,093 1,039 1,047 3 2-or-more-family 703 759 777 876 801 775 791 746 696 671 666 634 556 4 Started 1,703 1,749 1,742 1,882 2,034 2,001 1,960 2,019 1,853 1,852 1,782 1,795 1,652 5 1-family 1,067 1,084 1,072 1,098 1,335 1,202 1,221 1,242 1,241 1,230 1,137 1,186 1,100 6 2-or-more-family 635 665 669 784 699 799 739 777 612 622 645 609 552 7 Under construction, end of period1 1,003 1,051 1,063 1,088 1,094 1,110 1,099 1,135 1,132 1,151 1,157 1,164 1,155 8 1-family 524 556 539 561 571 581 574 586 597 612 623 629 626 9 2-or-more-family 479 494 524 528 522 529 526 549 534 539 533 535 529 10 Completed 1,390 1,652 1,703 1,762 1,778 1,725 1,806 1,693 1,829 1,620 1,761 1,769 1,730 11 1-family 924 1,025 1,072 1,141 1,075 1,038 1,153 1,127 1,140 1,060 1,067 1,132 1,112 12 2-or-more-family 466 627 631 621 703 687 653 566 689 560 694 637 618 13 Mobile homes shipped 296 296 284 285 280 266 240 249 239 226 236 232 244 Merchant builder activity in 1-family units 14 Number sold 622 639 688 729 735 741 924 880 787 722' 695 624 690 15 Number for sale, end of period1 304 358 350 349 352 352 338 336 336 34(K 349 354 357 PPrriiccee ((tthhoouussaannddss ooff ddoollllaarrss))22 MMeeddiiaann 1166 UUnniittss ssoolldd 75.5 80.0 84.3 87.9 86.6 89.7 88.7 92.5 92.1 91.2 93.5 91.6 91.7 AAvveerraaggee 1177 UUnniittss ssoolldd 89.9 97.5 101.0 106.1 104.1 106.6 108.0 110.3 114.6 lio.y 116.3 113.8 114.1 EXISTING UNITS (1-family) 18 Number sold 2,719 2,868 3,217 3,520 3,300 3,270 3,200 3,570 3,450 3,390 3,470 3,610 3,770 Price of units sold (thousands of dollars)2 19 Median 69.8 72.3 75.4 75.5 77.1 77.4 79.8 80.2 83.2 82.6 79.9 82.0 79.4 20 Average 82.5 85.9 90.6 91.8 93.0 93.1 96.8 98.1 101.7 102.1 99.2 100.3 96.8 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 279,240 327,209 355,570 365,554 373,378 373,947 368,027 373,904 374,483 375,397 376,613 380,428 385,656 77 Private 228,527 271,973 292,792 300,619 305,366 305,682 298,868 303,320 302,573 304,567 304,241 307,511 309,113 73 Residential 126,553 155,148 158,818 161,786 163,413 164,713 165,645 170,520 172,491 174,478 174,263 175,168 176,712 24 Nonresidential, total 101,974 116,825 133,974 138,833 141,953 140,969 133,223 132,800 130,082 130,089 129,978 132,343 132,401 Buildings 7,5 Industrial 12,863 13,746 15,769 16,546 15,783 16,381 13,354 14,557 13,658 13,027 12,866 12,591 13,485 7.6 Commercial 35,789 48,100 59,626 63,863 65,222 63,494 60,716 59,763 57,368 57,443 58,077 60,050 58,839 77 Other 11,838 12,547 12,619 12,487 12,781 13,065 13,131 13,006 13,131 13,263 13,296 13,394 14,707 28 Public utilities and other 41,484 42,432 45,960 45,937 48,167 48,029 46.022 45,474 45,925 46,356 45,739 46,308 45,370 79 Public 50,715 55,232 62,777 64,935 68,013 68,264 69,159 70,583 71,910 70,830 72,373 72,917 76,543 30 Military 2,544 2,839 3,283 3,539 3,407 3,974 3,673 3,725 3,637 3,761 3,768 4,021 4,285 31 Highway 14,143 16,343 19,998 21,017 22,129 22,273 22,673 23,155 23,240 22,001 21,771 21,843 21,641 37 Conservation and development 4,820 4,654 4,952 4,958 5,614 4,372 4,598 4,947 4,729 4,657 4,371 4,365 5,022 33 Other 29,208 31,396 34,544 35,421 36,863 37,645 38,215 38,756 40,304 40,411 42,463 42,688 45,595 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing 3. Value of new construction data in recent periods may not be strictly Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of comparable with data in prior periods because of changes by the Bureau of the existing units, which are published by the National Association of Realtors. All Census in its estimating techniques. For a description of these changes see back and current figures are available from originating agency. Permit authoriza- Construction Reports (C-30-76-5), issued by the Bureau in July 1976. tions are those reported to the Census Bureau from 16,000jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • January 1987 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted C m h o an n g th e s f e ro a m rli e 1 r 2 Change ( a f t r o a m nn 3 u a m l o ra n t t e h ) s earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm OOOcccttt... 1985 1986 1986 111999888666 11998855 11998866 (((111999666777 OOcctt.. OOcctt.. === 111000000)))111 Dec. Mar. Juner Sept/ Juner July Aug. Sept. Oct. CONSUMER PRICES2 1 All items 3.2 1.5 5.3 -1.9 1.5 2.2 .5 .0 .2 .3 .2 330.5 2 Food 1.8 4.5 5.9 -1.4 3.4 9.4 .1 .9 .9 .4 .3 323.7 3 Energy items .1 -18.4 3.3 -34.2 -12.5 -19.5 2.3 -4.1 -1.9 .7 -2.2 348.6 4 All items less food and energy 4.2 4.0 5.4 4.1 3.1 3.7 .3 .4 .3 .3 .4 331.6 5 Commodities 2.0 1.3 3.6 .3 -.5 3.1 .1 .2 .3 .2 .2 265.5 6 Services 5.5 5.5 6.5 6.5 5.2 4.1 .4 .4 .3 .3 .5 403.7 PRODUCER PRICES 7 Finished goods 1.1 -1.4 9.2 -12.5 .4 .7 .1 -.5 .3 .4 .3 290.5 8 Consumer foods -1.1 5.5 16.0 -8.1 5.9 13.0 .0 1.9 1.3 -.2 .9 282.9 9 Consumer energy -3.6 -36.5 20.7 -66.9 -22.3 -36.9 .1 -12.7 -1.5 3.7 -4.3 454.9 10 Other consumer goods 3.0 2.9 4.4 2.5 2.0 2.2 .2 .2 .1 .2 .8 262.4 11 Capital equipment 2.6 2.2 5.6 .7 2.3 2.2 .2 .1 .1 .4 .5 310.1 12 Intermediate materials3 -.5 -4.2 2.9 -11.8 -5.3 -.8 .0 -.6 -.2 .5 -.3 310.4 13 Excluding energy .0 .1 .0 -1.0 -1.3 2.0 .0 .2 .0 .3 .1 304.9 Crude materials 14 Foods -8.3 4.1 47.0 -24.7 1.6 20.1 -.7 2.9 2.5 -.8 2.6 233.7 15 Energy -5.6 -27.4 -4.0 -51.3 -29.1 -13.3 -1.2 -4.5 -2.6 3.7 -.9 539.2 16 Other -4.5 -1.7 1.5 -.2 7.0 -18.1 1.2 .0 -5.3 .5 1.7 242.3 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. 1983 Q3 Q4 Ql Q2 GROSS NATIONAL PRODUCT 1 Total 3,405.7 3,765.0 3,998.1 4,030.5 4,087.7 4,149.2 4,175.6 By source 2 Personal consumption expenditures 2,234.5 2,428.2 2,600.5 2,627.1 2,667.9 2,697.9 2,732.0 3 Durable goods 289.1 331.2 359.3 373.3 362.0 360.8 373.9 4 Nondurable goods 816.7 870.1 905.1 907.4 922.6 929.7 928.4 5 Services 1,128.7 1,227.0 1,336.1 1,346.4 1,383.2 1,407.4 1,429.8 6 Gross private domestic investment 502.3 662.1 661.1 657.4 669.5 708.3 687.3 7 Fixed investment 509.4 598.0 650.0 654.3 672.6 664.4 672.8 8 Nonresidential 356.9 416.5 458.2 459.8 474.0 459.2 457.5 9 Structures 124.0 139.3 154.8 155.0 157.2 154.6 141.5 10 Producers' durable equipment 232.8 277.3 303.4 304.7 316.8 304.6 316.0 11 Residential structures 152.5 181.4 191.8 194.5 198.6 205.3 215.3 12 Change in business inventories -7.1 64.1 11.1 3.1 -3.1 43.8 14.5 13 Nonfarm .4 56.6 12.2 3.2 16.7 41.2 10.5 14 Net exports of goods and services -6.1 -58.7 -78.9 -83.7 -105.3 -93.7 -104.5 15 Exports 352.5 382.7 369.8 362.3 368.2 374.8 363.0 16 Imports 358.7 441.4 448.6 446.0 473.6 468.5 467.5 17 Government purchases of goods and services... 675.0 733.4 815.4 829.7 855.6 836.7 860.8 18 Federal 283.5 311.3 354.1 360.9 380.9 355.7 367.6 19 State and local 391.5 422.2 461.3 468.8 474.7 480.9 493.3 By major type of product 20 Final sales, total 3,412.8 3,700.9 3,987.0 4,027.4 4,090.8 4,105.4 4,161.2 21 Goods 1,396.1 1,576.7 1,630.2 1.642.8 1,644.1 1,669.0 1,661.6 22 Durable 573.3 675.0 700.2 710.3 709.1 710.6 703.1 23 Nondurable 822.7 901.7 930.0 932.5 935.0 958.4 958.5 24 Services 1,682.5 1,813.1 1,959.8 1.971.9 2,025.5 2,057.7 2,087.4 25 Structures 327.1 375.1 408.1 415.9 418.1 422.6 426.7 26 Change in business inventories -7.1 64.1 11.1 3.1 -3.1 43.8 14.5 27 Durable goods -1.0 39.2 6.6 -2.7 9.5 28.6 -.1 28 Nondurable goods -6.1 24.9 4.5 5.8 -12.7 15.3 14.6 29 MEMO: Total GNP in 1982 dollars 3,279.1 3,489.9 3,585.2 3,603.8 3,622.3 3,655.9 3,661.4 NATIONAL INCOME 30 Total 2,719.5 3,032.0 3,222.3 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 2,380.9 2,423.6 2,461.5 2.480.2 32 Wages and salaries 1.676.2 1,837.0 1.965.8 1,976.0 2,012.8 2,044.1 2,058.8 33 Government and government enterprises... 324.3 346.2 372.2 374.2 381.6 387.2 392.5 34 Other 1.352.3 1,490.6 1.593.9 1,601.8 1,631.1 1.656.8 1.666.3 35 Supplement to wages and salaries 344.5 377.7 402.4 404.9 410.9 417.4 421.3 36 Employer contributions for social insurance 170.9 193.1 205.5 206.1 209.1 212.9 214.1 37 Other labor income 173.6 184.5 196.9 198.8 201.7 204.5 207.3 38 Proprietors' income1 190.9 236.9 254.4 249.3 262.1 265.3 289.1 39 Business and professional1 178.4 205.3 225.2 227.7 232.7 240.9 249.6 40 Farm1 12.4 31.5 29.2 21.6 29.4 24.4 39.5 41 Rental income of persons2 13.2 8.3 7.6 7.3 12.8 16.3 42 Corporate profits1 213.7 264.7 280.7 296.3 285.6 296.4 293.1 43 Profits before tax3 207.6 235.7 223.2 2269..21 235.8 224.3 231.3 44 Inventory valuation adjustment -10.9 -5.5 -.6 -9.4 16.5 10.6 45 Capital consumption adjustment 17.0 34.5 58.1 61.0 59.2 55.6 51.3 46 Net interest 281.0 307.4 311.4 309.7 307.6 304.9 297.7 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 • January 1987 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1985 1986 AAccccoouunntt 11998833 11998844 11998855 Q3 Q4 QL Q2 Q3' PERSONAL INCOME AND SAVING 1 Total personal income 2,838.6 3,110.2 3,314.5 3,323.2 3,382.9 3,432.6 3,483.3 3,501.6 2 Wage and salary disbursements 1,676.6 1,836.8 1,966.1 1,976.0 2,012.8 2,044.1 2,058.8 2,081.1 3 Commodity-producing industries 523.1 577.8 607.7 608.3 617.7 622.0 620.8 621.7 4 Manufacturing 397.4 439.1 460.1 460.7 467.5 470.5 468.8 469.9 5 Distributive industries 404.2 442.2 469.8 472.4 478.9 485.2 484.3 488.2 6 Service industries 425.1 470.6 516.4 521.1 534.6 549.6 561.3 572.8 7 Government and government enterprises 324.3 346.2 372.2 374.2 381.6 387.2 392.5 398.4 8 Other labor income 173.6 184.5 196.9 198.8 201.7 204.5 207.3 210.4 9 Proprietors' income1 190.9 236.9 254.4 249.3 262.1 265.3 289.1 279.5 10 Business and professional1 178.4 205.3 225.2 227.7 232.7 240.9 249.6 258.0 11 Farm1 12.4 31.5 29.2 21.6 29.4 24.4 39.5 21.4 12 Rental income of persons2 13.2 8.3 7.6 7.3 8.3 12.8 16.3 15.9 68.7 74.7 76.4 76.3 76.7 79.1 81.1 82.0 14 Personal interest income 393.1 446.9 476.2 475.2 480.6 480.8 480.1 475.1 15 Transfer payments 442.6 455.6 487.1 491.1 493.6 504.7 510.1 518.4 16 Old-age survivors, disability, and health insurance benefits... 221.7 235.7 253.4 256.5 256.8 263.2 264.1 269.6 17 LESS: Personal contributions for social insurance 120.1 133.5 150.2 150.7 152.9 158.6 159.5 160.7 18 EQUALS: Personal income 2,838.6 3,110.2 3,314.5 3,323.2 3,382.9 3,432.6 3,483.3 3,501.6 19 LESS: Personal tax and nontax payments 410.5 439.6 486.5 491.2 500.7 497.5 504.8 518.9 20 EQUALS: Disposable personal income 2,428.1 2,670.6 2,828.0 2,832.0 2,882.2 2,935.1 2,978.5 2,982.7 21 LESS: Personal outlays 2,297.4 2,501.9 2,684.7 2,712.4 2,756.4 2,789.4 2,825.5 2,892.3 22 EQUALS: Personal saving 130.6 168.7 143.3 119.6 125.8 145.6 153.1 90.4 MEMO Per capita (1982 dollars) 23 Gross national product 13,963.7 14,721.1 14,980.9 15,040.5 1155,,007799..99 1155,,118888..00 1155,,117799..99 1155,,224499..33 24 Personal consumption expenditures 9,138.5 9,475.4 9,713.0 9,774.4 9,790.3 9,857.1 9,985.0 10,119.1 25 Disposable personal income 9,930.0 10,421.0 10,563.0 10,537.0 10,577.0 10,723.0 10,886.0 10,796.0 26 Saving rate (percent) 5.4 6.3 5.1 4.2 4.4 5.0 5.1 3.0 GROSS SAVING 463.6 573.3 551.5 541.7 524.1 583.2 539.7 520.2 28 Gross private saving 592.2 674.8 687.8 679.6 679.2 714.8 718.7 661.7 29 Personal saving 130.6 168.7 143.3 119.6 125.8 145.6 153.1 90.4 30 Undistributed corporate profits1 65.0 91.0 107.3 118.8 106.8 122.1 112.3 113.5 31 Corporate inventory valuation adjustment -10.9 -5.5 -.6 6.1 -9.4 16.5 10.6 8.0 Capital consumption allowances 32 Corporate 242.7 253.9 268.2 270.1 227733..33 227755..33 227788..99 228811..66 153.9 161.2 169.0 171.2 173.4 171.8 174.4 176.3 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 -138.0 -155.1 -131.6 -179.0 --114411..55 -176.0 -170.0 -198.0 -197.5 -217.6 -201.6 -*-238.1 -205.8 47.5 68.5 61.7 59.5 62.5 70.0 59.0 64.3 38 Capita] grants received by the United States, net .0 .0 .0 .0 .0 .0 .0 .0 39 Gross investment 468.8 571.4 545.9 536.2 525.7 579.6 544.3 530.0 40 Gross private domestic 502.3 662.1 661.1 657.4 669.5 708.3 687.3 674.8 41 Net foreign -33.5 -90.7 -115.2 -121.2 -143.8 -128.6 -143.0 -144.8 42 Statistical discrepancy 5.2 -1.9 -5.5 -5.5 1.6 -3.6 4.6 9.8 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1985 1986 IItteemm ccrreeddiittss oorr ddeebbiittss 11998833 11998844 11998855 Q2 Q3 Q4 Ql Q2" 1 Balance on current account -46,605 -106,466 -117,677 -29,416 -28,454 -33,698 -34,038 -34,731 ~> -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 Investment income, net3 24,841 18,751 25,188 5,449 8,262 9,255 6,517 5,290 8 Other service transactions, net 5,484 1,288 -525 -311 -421 -35 -7 753 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 -11,196 -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 --225500 --118811 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 7.2 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 99,730 128,430 16,872 33,088 53,158 34,151 32,738 79 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 --11,,117755 --33,,668888 33,,777744 11,,221166 --11,,446644 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 --33,,114488 --111155 1166 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 1155 2288 2222 6611 1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and 4. Primarily associated with military sales contracts and other transactions 38-41. arranged with or through foreign official agencies. 2. Data are on an international accounts (IA) basis. Differs from the Census 5. Consists of investments in U.S. corporate stocks and in debt securities of basis data, shown in table 3.11, for reasons of coverage and timing; military private corporations and state and local governments. exports are excluded from merchandise data and are included in line 6. NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business 3. Includes reinvested earnings. (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • January 1987 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are not seasonally adjusted. 1986 IItteemm 11998833 11998844 11998855 Mar. Apr. May June July Aug. Sept. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 200,486 217,865 213,146 18,913 17,965 17,431 19,070 17,707 17,604 17,518 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 258,048 325,726 345,276 31,972 28,762 30,272 31,764 34,121 29,476 28,695 3 Trade balance -57,562 107,861 -132,129 -13,059 -10,797 -12,842 -12,694 -16,414 -11,871 -11,177 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 Apr. May June July Aug. Sept. Oct. 1 Total 33,747 34,934 43,191 46,491 45,260 46,635 47,430 48,161 48,086 47,166 2 Gold stock, including Exchange Stabilization Fund1 11,121 11,096 11,090 11,089 11,085 11,084 11,084 11,084 11,084 11,143 3 Special drawing rights2-3 5,025 5,641 7,293 8,098 8,066 8,213 8,085 8,250 8,295 8,090 4 Reserve position in International Monetary Fund2 11,312 11,541 11,952 12,242 11,789 12,109 12,114 12,017 11,922 11,575 5 Foreign currencies4 6,289 6,656 12,856 15,062 14,320 15,229 16,147 16,810 16,785 16,358 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 Apr. May June July Aug. Sept. Oct. 1 Deposits 190 267 480 325 253 354 233 227 342 303 Assets held in custody 2 U.S. Treasury securities1 117,670 118,000 121,004 132,017 136,762 137,820 144,527 148,263 152,275 156,076 3 Earmarked gold2 14,414 14,242 14,245 14,160 14,145 14,128 14,131 14,120 14,115 14,110 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 Mar. Apr. May June July Aug. Sept.? All foreign countries 1 Total, all currencies 477,090 453,656 458,012 459,885 475,158 459,587 467,565 454,886' 461,404 474,562 ?, Claims on United States 115,542 113,393 119,713 118,524 122,487 117,627 117,680 113,383 117,661 116,378 Parent bank 82,026 78,109 87,201 85,164 88,975 83,404 82,514 79,387 83,779 82,297 4 Other banks in United States2 1 13,664 13,057 12,960 12,792 13,185 14,0^ 13,508' 13,071 13,624 5 Nonbanks2 21,620 19,455 20,400 20,720 21,038 21,147'" 20,488' 20,811 20,457 6 Claims on foreigners 342,689 320,162 315,702 316,493 326,013 316,151 324,128 314,153 315,583 328,635 7 Other branches of parent bank 96,004 95,184 91,399 91,586 95,238 90,447 98,457 92,641 93,435 103,278 8 Banks 117,668 100,397 102,960 101,743 107,141 103,851 105,570 103,002 102,849 107,631 9 Public borrowers 24,517 23,343 23,478 23,770 23,645 23,823 23,273 23,561 23,720 23,376 10 Nonbank foreigners 107,785 101,238 97,865 99,394 99,989 98,030 96,828 94,949 95,579 94,350 11 Other assets 18,859 20,101 22,597 24,868 26,658 25,809 25,757 27,350' 28,160 29,549 12 Total payable in U.S. dollars 371,508 350,636 336,288 324,129 331,511 322,837 327,639 313,703 318,357 330,215 n Claims on United States 113,436 111,426 116,645 114,965 118,629 113,767 113,387 109,172 113,636 112,129 14 Parent bank 80,909 77,229 85,971 83,841 87,597 82,110 81,022 78,025 82,261 80,748 15 Other banks in United States2 13,500 12,454 12,261 11,891 12,272 12,887' 12,354' 12,179 12,802 16 Nonbanks2 20,697 18,220 18,863 19,141 19,385 19,478' 18,793' 19,196 18,579 17 Claims on foreigners 247,406 228,600 209,927 199,279 202,498 198,172 203,846 193,901 194,643 207,378 18 Other branches of parent bank 78,431 78,746 72,689 70,910 73,109 69,684 75,934 69,135 68,604 78,400 19 Banks 93,332 76,940 71,748 63,849 66,006 65,053 66,673 64,940 64,940 68,322 70 Public borrowers 17,890 17,626 17,252 17,219 16,752 17,180 16,492 16,667 16,788 16,417 21 Nonbank foreigners 60,977 55,288 48,238 47,301 46,631 46,255 44,747 43,159 44,311 44,239 22 Other assets 10,666 10,610 9,716 9,885 10,384 10,898 10,406 10,630 10,078 10,708 United Kingdom 23 Total, all currencies 158,732 144,385 148,599 150,975 155,867 152,075 151,593 145,448 145,619 151,596 74 Claims on United States 34,433 27,675 33,157 33,990 34,234 34,231 31,364 30,223 29,839 30,880 75 Parent bank 29,111 21,862 26,970 27,881 28,058 28,001 25,106 24,252 23,466 24,291 76 Other banks in United States2 1 1,429 1,106 1,129 1,386 1,312 1,365' 1,369' 1,448 2,092 77 Nonbanks2 4,384 5,081 4,980 4,790 4,918 4,893' 4,602' 4,925 4,497 28 Claims on foreigners 119,280 111,828 110,217 111,468 115,485 111,823 113,739 108,156 109,024 113,440 79 Other branches of parent bank 36,565 37,953 31,576 31,250 32,516 31,984 34,670 31,613 31,828 34,678 30 Banks 43,352 37,443 39,250 38,929 41,593 39,222 39,430 38,393 38,048 40,332 31 Public borrowers 5,898 5,334 5,644 5,833 5,642 5,427 5,236 5,229 5,336 4,957 32 Nonbank foreigners 33,465 31,098 33,747 35,456 35,734 35,190 34,403 32,921 33,812 33,473 33 Other assets 5,019 4,882 5,225 5,517 6,148 6,021 6,490 7,069 6,756 7,276 34 Total payable in U.S. dollars 126,012 112,809 108,626 105,118 107,364 106,716 104,013 97,641 97,771 102,851 Claims on United States 33,756 26,868 32,092 32,746 32,959 32,872 29,944 28,848 28,446 29,513 36 Parent bank 28,756 21,495 26,568 27,393 27,629 27,584 24,693 23,888 22,972 23,826 37 Other banks in United States2 1,363 1,005 1,027 1,225 1,152 1,102' 1,131' 1,194 1,848 38 Nonbanks2 4,010 4,519 4,326 4,105 4,136 4,149' 3,829' 4,280 3,839 39 Claims on foreigners 88,917 82,945 73,475 69,433 71,058 70,406 70,697 65,472 66,465 70,002 40 Other branches of parent bank 31,838 33,607 26,011 25,250 26,224 26,265 27,559 24,258 24,657 27,151 41 Banks 32,188 26,805 26,139 22,106 23,310 23,134 22,825 21,938 21,636 22,643 47 Public borrowers 4,194 4,030 3,999 4,223 4,012 3,937 3,777 3,793 3,838 3,674 43 Nonbank foreigners 20,697 18,503 17,326 17,854 17,512 17,070 16,536 15,483 16,334 16,534 44 Other assets 3,339 2,996 3,059 2,939 3,347 3,438 3,372 3,321 2,860 3,336 Bahamas and Caymans 45 Total, all currencies 152,083 146,811 142,055 136,529 137,272 132,122 138,944 134,238 137,526 143,082 46 Claims on United States 75,309 77,296 74,864 71,735 72,755 68,710 70,751 69,721 73,047 71,918 47 Parent bank 48,720 49,449 50,553 46,813 47,613 42,868 44,132 43,867 47,694 46,635 48 Other banks in United States2 I 11,544 11,204 10,827 10,445 10,895 11,71(K 11,182' 10,812 10,641 49 Nonbanks2 16,303 13,107 14,095 14,697 14,947 14,909' 14,672' 14,541 14,642 50 Claims on foreigners 72,868 65,598 63,904 60,564 60,301 59,106 63,955 60,162 60,167 66,620 51 Other branches of parent bank 20,626 17,661 19,042 19,131 18,286 15,703 20,636 16,682 16,539 22,763 57 Banks 36,842 30,246 28,192 25,129 25,809 26,290 27,000 27,067 27,065 27,779 53 Public borrowers 6,093 6,089 6,458 6,292 6,326 6,694 6,399 6,534 6,675 6,434 54 Nonbank foreigners 12,592 11,602 10,212 10,012 9,880 10,419 9,920 9,879 9,888 9,644 55 Other assets 3,906 3,917 3,287 4,230 4,216 4,306 4,238 4,355 4,312 4,544 56 Total payable in U.S. dollars 145,641 141,562 136,794 130,438 130,530 125,681 132,353 127,910 130,723 136,615 1. Beginning with June 1984 data, reported claims held by foreign branches 2. Data for assets vis-a-vis other banks in the United States and vis-a-vis have been reduced by an increase in the reporting threshold for "shell" branches nonbanks are combined for dates before June 1984. from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • January 1987 3.14 Continued 1986 Mar. Apr. May June July Aug. Sept.? All foreign countries 57 Total, all currencies 477,090 453,656 458,012 459,885 475,158 459,587 467,565 454,886^ 461,404 474,562 58 Negotiable CDs3 n.a. 37,725 34,607 36,066 33,229 35,006 34,683 32,656 31,475 33,642 59 To United States 188,070 147,583 155,538 140,401 150,390 144,241 149,848r 141,599' 145,488 151,287 60 Parent bank 81,261 78,739 83,914 74,952 81,594 77,484 85,126' 81,299 80,219 87,927 61 Other banks in United States 29,453 18,409 16,894 15,744 14,270 14,347 16,118 14,191' 14,496 14,159 62 Nonbanks 77,356 50,435 54,730 49,705 54,526 52,410 48,604 46,109 50,773 49,201 63 To foreigners 269,685 247,907 245,942 261,763 269,814 258,700 262,329' 259,133' 262,978 269,442 64 Other branches of parent bank 90,615 93,909 89,529 90,921 93,768 90,228 97,717 91,144 91,307 102,245 65 Banks 92,889 78,203 76,814 84,800 89,608 83,251 81,008 82,854' 85,239 81,967 66 Official institutions 18,896 20,281 19,523 20,688 20,744 20,792 20,480 20,608 20,637 20,089 67 Nonbank foreigners 68,845 55,514 60,076 65,354 65,694 64,429 63,124' 64,527 65,795 65,141 68 Other liabilities 19,335 20,441 21,925 21,655 21,725 21,640 20,705 21,498' 21,463 20,191 69 Total payable in U.S. dollars 388,291 367,145 353,470 341,550 347,587 340,176 346,428 330,183' 333,581 349,254 70 Negotiable CDs3 n.a. 35,227 31,063 32,418 29,912 31,513 31,076 28,970 28,091 30,560 71 To United States 184,305 143,571 150,161 134,204 143,601 137,694 142,730 133,908' 137,805 143,633 72 Parent bank 79,035 76,254 80,888 71,616 78,061 73,950 81,066 77,048 76,046 83,790 73 Other banks in United States 28,936 17,935 16,264 14,953 13,477 13,575 15,323 13,507' 13,709 13,179 74 Nonbanks 76,334 49,382 53,009 47,635 52,063 50,169 46,341 43,353 48,050 46,664 75 To foreigners 194,139 178,260 163,361 166,329 166,229 162,528 163,943 158,314' 158,931 167,411 76 Other branches of parent bank 73,522 77,770 70,943 70,465 71,841 69,978 75,805 68,065 66,878 77,464 77 Banks 57,022 45,123 37,323 37,470 37,240 36,335 33,745 34,827' 36,460 35,372 78 Official institutions 13,855 15,773 14,354 14,719 14,746 14,049 13,772 14,091 14,125 13,677 79 Nonbank foreigners 51,260 39,594 40,741 43,675 42,402 42,166 40,621 41,331 41,468 40,898 80 Other liabilities 9,847 10,087 8,885 8,599 7,845 8,441 8,679 8,991' 8,754 7,650 United Kingdom 81 Total, all currencies 158,732 144,385 148,599 150,975 155,867 152,075 151,593 145,448 145,619 151,596 82 Negotiable CDs3 n.a. 34,413 31,260 32,217 29,898 31,734 31,396 29,295 28,279 30,352 83 To United States 55,799 25,250 29,422 22,945 28,450 27,505 26,270 22,671 22,831 26,540 84 Parent bank 14,021 14,651 19,330 13,724 17,231 16,624 15,892 13,300 14,188 17,399 85 Other banks in United States 11,328 3,125 2,974 2,793 1,966 2,175 1,997 1,999 2,148 2,062 86 Nonbanks 30,450 7,474 7,118 6,428 9,253 8,706 8,381 7,372 6,495 7,079 87 To foreigners 95,847 77,424 78,525 86,053 87,773 83,067 84,362 83,707 84,880 85,680 88 Other branches of parent bank 19,038 21,631 23,389 24,733 25,379 23,838 27,029 25,106 24,962 28,272 89 Banks 41,624 30,436 28,581 33,301 34,294 31,584 30,505 31,678 32,250 31,190 90 Official institutions 10,151 10,154 9,676 9,750 9,757 9,548 9,543 9,074 9,330 8,652 91 Nonbank foreigners 25,034 15,203 16,879 18,269 18,343 18,097 17,285 17,849 18,338 17,566 92 Other liabilities 7,086 7,298 9,392 9,760 9,746 9,769 9,565 9,775 9,629 9,024 93 Total payable in U.S. dollars 131,167 117,497 112,697 108,420 110,378 109,337 108,375 101,095 101,397 108,249 94 Negotiable CDs3 n.a. 33,070 29,337 30,042 27,978 29,542 29,135 27,015 26,114 28,490 95 To United States 54,691 24,105 27,756 21,070 26,411 25,490 24,214 20,065 20,403 24,039 % Parent bank 13,839 14,339 18,956 13,405 16,867 16,233 15,331 12,648 13,707 16,984 97 Other banks in United States 11,044 2,980 2,826 2,596 1,774 1,944 1,817 1,738 1,879 1,735 98 Nonbanks 29,808 6,786 5,974 5,069 7,770 7,313 7,066 5,679 4,817 5,320 99 To foreigners 73,279 56,923 51,980 53,219 52,262 50,441 51,056 49,932 50,855 52,706 100 Other branches of parent bank 15,403 18,294 18,493 19,068 19,297 18,043 20,455 17,868 17,790 21,305 101 Banks 29,320 18,356 14,344 14,731 14,125 14,114 13,073 14,251 15,056 14,491 102 Official institutions 8,279 8,871 7,661 7,839 7,449 6,953 6,914 6,658 6,724 6,015 103 Nonbank foreigners 20,277 11,402 11,482 11,581 11,391 11,331 10,614 11,155 11,285 10,895 104 Other liabilities 3,197 3,399 3,624 4,089 3,727 3,864 3,970 4,083 4,025 3,014 Bahamas and Caymans 105 Total, all currencies 152,083 146,811 142,055 136,529 137,272 132,122 138,944 134,238 137,526 143,082 106 Negotiable CDs3 n.a. 615 610 1,132 629 634 567 565 470 527 107 To United States 111,299 102,955 103,813 97,686 98,621 94,128 98,897 96,636' 99,585 102,018 108 Parent bank 50,980 47,162 44,811 43,834 43,662 40,757 47,014 47,862 45,072 49,981 109 Other banks in United States 16,057 13,938 12,778 11,624 11,014 10,738 12,868 11,131' 11,297 10,992 110 Nonbanks 44,262 41,855 46,224 42,228 43,945 42,633 39,015 37,643 43,216 41,045 111 To foreigners 38,445 40,320 35,053 35,646 35,901 35,139 37,340 34,827' 35,216 38,441 112 Other branches of parent bank 14,936 16,782 14,075 13,198 14,077 13,731 15,882 13,561 13,368 15,918 113 Banks 11,876 12,405 10,669 10,340 10,788 10,318 9,991 9,636' 10,216 10,152 114 Official institutions 1,919 2,054 1,776 1,759 2,176 2,144 2,427 2,468 2,386 2,834 115 Nonbank foreigners 11,274 9,079 8,533 10,349 8,860 8,946 9,040 9,162 9,246 9,537 116 Other liabilities 2,339 2,921 2,579 2,065 2,121 2,221 2,140 2,210 2,255 2,096 117 Total payable in U.S. dollars 148,278 143,582 138,322 132,308 132,966 127,918 134,606 130,075 133,256 138,733 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'' Mar. Apr. May June July Aug. Sept.P 1 Total1 180,552 178,356 180,538 188,914 190,159 194,562 198,784 203,364 209,447 By type 2 Liabilities reported by banks in the United States2 26,089 26,734 25,479 27,028 24,911 26,142 25,143 25,482 29,342 3 U.S. Treasury bills and certificates3 59,976 53,252 55,933 59,547 63,614 65,790 70,721 74,766 75,095 U.S. Treasury bonds and notes 4 Marketable 69,019 77,108 78,483 82,345 82,501 84,113 85,561 85,622 87,570 5 Nonmarketable4 5,800 3,550 2,750 2,300 1,800 1,800 1,300 1,300 1,300 6 U.S. securities other than U.S. Treasury securities5 19,668 17,712 17,893 17,694 17,333 16,717 16,059 16.194 16,139 By area 7 Western Europe1 69,776 74,418 72,435 76,354 76,405 79,641 81,524 83,874 86,979 8 Canada 1,528 1,314 1.445 1,711 1,502 1,529 1,627 1,535 1,626 9 Latin America and Caribbean 8,561 11,141 10.425 10,785 10,595 11,046 11,242 10,801 10,351 10 Asia 93,954 86,459 90,882 94,653 96,487 97,359 100,070 102,362 105,717 11 Africa 1,264 1,824 1,846 1,833 1,718 1,717 1,525 1,958 1,864 12 Other countries6 5,469 3,200 3,505 3,578 3,452 3,270 2,7% 2,833 2,909 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 21.364 24,137 2 Banks' own claims 7,707 7,231 11,984 15,233 16,161 19,736 21,584 3 Deposits 4,251 2,731 4,998 8,540 8,304 11,318 11,912 4 Other claims 3,456 4,501 6,986 6,693 7,857 8,418 9,672 5 Claims of banks' domestic customers1 676 1,059 569 328 580 1,426 1,385 1. Assets owned by customers of the reporting bank located in the United NOTE. Data on claims exclude foreign currencies held by U.S. monetary States that represent claims on foreigners held by reporting banks for the accounts authorities, of their domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • January 1987 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 Mar/ Apr. May June'' July Aug. Sept.? 1 All foreigners 369,607 407,306 435,726' 441,004 443,456 444,528 457,350 469,720' 486,519 504,685 2 Banks' own liabilities 279,087 306,898 341,070 344,449 346,469 342,074 345,663 342,267' 355,009 371,601 3 Demand deposits 17,470 19,571 21,107 20,208 19,751 19,651 21,332 19,607 20,281 21,384 4 Time deposits1 90,632 110,413 117,278 116,325 114,209 114,055' 115,246 117,010 122,325 126,033 5 Other2 25,874 26,268 29,305 32,212 33,220 31,686' 31,712 30,650' 33,026 36,621 6 Own foreign offices3 145,111 150,646 173,381 175,705 179,289 176,683 177,373 174,999 179,378 187,563 7 Banks' custody liabilities4 90,520 100,408 94,656' 96,555 96,987 102,454 111,687 127,453 131,511 133,085 8 U.S. Treasury bills and certificates5 68,669 76,368 69,133' 73,044 74,631 80,192 82,701 8866,,778899 8899,,558866 9900,,446677 9 Other negotiable and readily transferable instruments6 17,467 18,747 17,964 15,329 13,776 13,917 14,729 16,132 16,288 16,231 10 Other 4,385 5,293 7,558' 8,182 8,580 8,346 14,257 24,532 25,637 26,387 11 Nonmonetary international and regional organizations7 5,957 4,454 5,821 5,223 3,495 4,519 3,441 3,974 5,253 3,038 12 Banks' own liabilities 4,632 2,014 2,621 1,404 1,749 2,388 891 1,857 4,090 1,721 13 Demand deposits 297 254 85 102 138 99 79 156 165 180 14 Time deposits1 3,584 1,267 2,067 391 681 1,109 551 1,209 3,233 1,243 15 Other2 750 493 469 911 931 1,179 262 492 691 299 16 Banks' custody liabilities4 1,325 2,440 3,200 3,820 1,746 2,131 2,550 2,118 1,163 1,137 17 U.S. Treasury bills and certificates 463 916 1,736 2,311 768 1,282 1,619 991 129 218 18 Other negotiable and readily transferable instruments6 862 1,524 1,464 1,508 970 849 918 1,126 11,,003333 1,099 19 Other 0 0 0 0 7 0 13 0 11 0 20 Official institutions8 79,876 86,065 79,985 81,412 86,576 88,526 91,932 95,863' 100,247 104,439 21 Banks' own liabilities 19,427 19,039 20,835 21,726 23,927 22,018 22,928 22,044' 22,710 26,619 22 Demand deposits 1,837 1,823 2,077 1,917 1,832 1,810 2,131 1,609 1,582 1,893 23 Time deposits1 7,318 9,374 10,949 10,259 9.368 9,850 10,347 10,116 9,892 10,924 24 Other2 10,272 7,842 7,809 9,550 12,728 10,358 10,450 10,319' 11,236 13,802 25 Banks' custody liabilities4 60,448 67,026 59,150 59,686 62,648 66,508 69,004 73,820 77,538 77,819 26 U.S. Treasury bills and certificates5 54,341 59,976 53,252 55,933 59,547 63,614 65,790 7700,,772211 7744,,776666 7755,,009955 27 Other negotiable and readily transferable instruments6 6,082 6,966 5,824 3,585 2,916 2,754 2,996 2,892 2,624 2,524 28 Other 25 84 75 168 185 139 218 207 148 199 29 Banks9 226,887 248,893 275,589' 279,364 277,856 275,047' 284,637 290,397' 299,771 315,527 30 Banks' own liabilities 205,347 225,368 252,723 255,941 254,617 251,126' 255,673 251,779 260,953 275,907 31 Unaffiliated foreign banks 60,236 74,722 79,341 80,236 75,328 74,444' 78,300 76,780' 81,576 88,344 32 Demand deposits 8,759 10,556 10,271 9,704 8,689 9,036 10,277 9,180 9,307 9,306 33 Time deposits1 37,439 47,095 49,510 50,142 48,484 46,780' 48,480 49,418 52,811 58,157 34 Other2 14,038 17,071 19,561 20,390 18,155 18,627 19,544 18,181 19,458 20,881 35 Own foreign offices3 145,111 150,646 173,381 175,705 179,289 176,682 177,373 174,999 179,378 187,563 36 Banks' custody liabilities4 21,540 23,525 22,866' 23,423 23,239 23,922' 28,964 38,618 38,818 39,620 37 U.S. Treasury bills and certificates 10,178 11,448 9,832' 10,131 9,914 10,841 1100,,668888 10,934 1100,,554433 1100,,663355 38 Other negotiable and readily transferable instruments6 7,485 7,236 6,040 5,752 5,423 5,451 5,448 5,585 5,526 5,526 39 Other 3,877 4,841 6,994 7,540 7,901 7,629' 12,828 22,099 22,749 23,458 40 Other foreigners 56,887 67,894 74,331' 75,005 75,530 76,436' 77,339 79,485 81,248 81,682 41 Banks' own liabilities 49,680 60,477 64,892 65,379 66,176 66,543' 66,170 66,587 67,256 67,354 42 Demand deposits 6,577 6,938 8,673 8,484 9,093 8,705 8,845 8,663 9,227 10,005 43 Time deposits 42,290 52,678 54,752 55,533 55,677 56,316 55,869 56,267 56,388 55,710 44 Other2 813 861 1,467 1,361 1,406 1,521' 1,456 1,657 1,641 1,639 45 Banks' custody liabilities4 7,207 7,417 9,439' 9,626 9,354 9,893' 11,169 12,898 13,992 14,328 46 U.S. Treasury bills and certificates 3,686 4,029 4,314' 4,669 44,,440011 4,454 44,,660044 44,,114433 44,,114499 44,,551199 47 Other negotiable and readily transferable instruments6 3,038 3,021 4,636 4,483 4,465 4,862 5,367 6,529 7,105 7,081 48 Other 483 367 489' 473 487 577' 1,198 2,226 2,738 2,729 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,346 10,476 9,845 6,603 6,286 6,269 6,419 6,492 6,569 6,543 1. Excludes negotiable time certificates of deposit, which are included in 5. Includes nonmarketable certificates of indebtedness and Treasury bills "Other negotiable and readily transferable instruments." issued to official institutions of foreign countries. 2. Includes borrowing under repurchase agreements. 6. Principally bankers acceptances, commercial paper, and negotiable time 3. U.S. banks: includes amounts due to own foreign branches and foreign certificates of deposit. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 7. Principally the International Bank for Reconstruction and Development, and regulatory agencies. Agencies, branches, and majority-owned subsidiaries of the Inter-American and Asian Development Banks. foreign banks: principally amounts due to head office or parent foreign bank, and 8. Foreign central banks and foreign central governments, and the Bank for foreign branches, agencies or wholly owned subsidiaries of head office or parent International Settlements. foreign bank. 9. Excludes central banks, which are included in "Official institutions." 4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.17 Continued 1986 AArreeaa aanndd ccoouunnttrryy 11998833 11998844 11998855 Mar. Apr. May June July Aug. Sept.P 1 Total 369,607 407,306 435,726' 441,004' 443,456 444,528 457,350 469,720' 486,519 504,685 2 Foreign countries 363,649 402,852 429,905' 435,781' 439,961 440,009 453,909' 465,745' 481,267 501,647 3 Europe 138,072 153,145 164,114' 157,306' 165,193 165,795' 166,382 163,016' 166,149 173,732 4 Austria 585 615 693 91(K 931 897 1,013 988 1,035 1,106 5 Belgium-Luxembourg 2,709 4,114 5,243' 5,031' 5,737 5,425 5,224 5,343 5,114 6,132 6 Denmark 466 438 513 536 752 523 519 560' 643 483 7 Finland 531 418 496 354 619 514 484 449 365 407 8 France 9,441 12,701 15,541' 15,906 19,322 19,423 19,862 20,129 21,470 21,339 9 Germany 3,599 3.358 4,835 5,691 6,718 4,964 4,639 5,646 5,291 5,361 10 Greece 520 699 666' 536' 559 552 657 604 570 623 11 Italy 8,462 10,762 9,667 7,215 6,553 7,875 8,918 88,,882288 9,269 8,820 1? Netherlands 4,290 4.731 4,212 4,334 4,320 4,183 4,224 44,,668822 4,495 4,952 13 Norway 1,673 1,548 948 469 731 850 710 497 542 575 14 Portugal 373 597 652 705 674 796' 795 711 791 757 Is) Spain 1,603 2,082 2,114' 1,774' 1,919 1,879 2,069 1,894 1,979 2,083 16 Sweden 1,799 1,676 1,422 1,547 1,313 1,299 1,118 1,267' 944 1,295 17 Switzerland 32,246 31,740 29,02C 26,864' 27,247 26,848 27,812 28,455 29,065 29,209 18 Turkey 467 584 429 383 363 434 586 310 285 448 19 United Kingdom 60,683 68,671 76,728 78,585 81,983 83,885 82,314 78,193 79,947 86,209 20 Yugoslavia 562 602 673 535 547 556 661 542 482 561 21 Other Western Europe1 7,403 7,192 9,635 5,293' 4,233 4,165 3,997 3,366 3,277 2,729 7.7. U.S.S.R 65 79 105 61 38 34 89 48 32 84 23 Other Eastern Europe2 596 537 523 578' 634 693 690 506 553 562 24 Canada 16,026 16,059 17,427' 22,498' 20,450 21,257 22,926 22,359 23,933 24,150 25 Latin America and Caribbean 140,088 153,381 167,856' 165,074' 164,801 161,405' 169,650 181,737' 187,781 196,128 76 Argentina 4,038 4,394 6,032' 5,158' 5,627 6,075 6,229 6,336 6,096 6,069 ?7 Bahamas 55,818 56.897 57,657 55,791 57,865 53,680 60,081 60,764 67,096 69,119 78 Bermuda 2,266 2,370 2,765 2,324 2,270 2,016 2,513 2,201 2,195 2,199 79 Brazil 3,168 5,275 5,373' 6,102' 5,788 5,542 5,185 5,134 5,179 5,359 30 British West Indies 34,545 36,773 42,674' 44,180' 41,354 42,116' 43,278 55,552 55,614 60,918 31 Chile 1,842 2,001 2,049' 2,094' 2,147 2,223 2,270 2,227 2,139 2,426 3? Colombia 1,689 2,514 3,104' 3,078' 3,101 3,053 3,419 3,334 3,315 3,373 33 Cuba 8 10 11 6 7 7 8 7 8 75 34 Ecuador 1,047 11,,009922 1,239' 1,209 1,199 1,166 1,262 1,196 1,232 1,260 35 Guatemala 788 889966 1,071 1,126 1,128 1,097 1,108 1,123 1,140 1,129 36 Jamaica 109 183 122 144 173 201 185 184 177 187 37 Mexico 10,392 12,303 14,060' 13,004' 13,126 13,153 13,633 12,985 13,610 13,138 38 Netherlands Antilles 3,879 4,220 4,875 4,561 4,859 4,798 4,358 4,382 4,383 4,765 39 Panama 5,924 6,951 7,514' 7,306' 6,960 7,042 6,686 6,639 6,391 6,416 40 Peru 1,166 1,266 1,167' 1,107' 1,116 1,132 1,254 1,158 1,149 1,253 41 Uruguay 1,244 1,394 1,552' 1,570' 1,646 1,703 1,664 1,687 1,636 1,589 47 Venezuela 8,632 10,545 11,922' 11,672' 11,727 11,712 11,734 12,058 11,668 11,780 43 Other Latin America and Caribbean 3,535 4,297 4,668 4,641 4,708 4,689 4,783 4,770 4,754 5,073 44 Asia 58,570 71,187 72,280' 82,656' 81,682 83,817 86,977 91,669 96,022 100,055 China 4S Mainland 249 1,153 1,607 1,347 1,550 973 1,469 1,795 1,185 1,947 46 Taiwan 4,051 4,990 7,786 10,838' 11,027 12,687 13,683 14,331 15,608 16,132 47 Hong Kong 6,657 6,581 8,067 8,707' 8,757 8,745 8,656 8,934 9,026 9,339 48 India 464 507 712' 928' 574 577 695 562 685 651 49 Indonesia 997 1,033 1,466 2,107 1,787 1,758 1,416 1,572' 1,474 1,611 50 Israel 1,722 1,268 1,601' 1,458' 1,490 1,671 1,725 1,731 1,686 2,109 51 Japan 18,079 21,640 23,077 28,274 28,279 29,689 31,325 36,286 38,221 39,955 5?, Korea 1,648 1,730 1,665 1,551 1,337 1,336 1,414 1,392 1,251 1,282 53 Philippines 1,234 1,383 1,140 978 1,051 1,331 1,306 1,363 1,458 1,400 54 Thailand 747 1,257 1,358 1,104' 993 1,155 1,068 1,104 1,080 1,100 55 Middle-East oil-exporting countries3 12,976 16,804 14,523 15,384 14,418 14,537' 14,581 12,739' 13,227 13,047 56 Other Asia 9,748 12,841 9,276 9,980 10,419 9,355' 9,638 9,861 11,121 11,481 57 Africa 2,827 3,396 4,883 4,260 4,173 4,227 4,291 4,041 4,227 4,156 58 Egypt 671 647 1,363 870 960 910 1,079 820 1,088 843 59 Morocco 84 118 163 91 85 92 87 93 82 91 60 South Africa 449 328 388 465 386 414 414 609 438 328 61 Zaire 87 153 163 95 90 105 92 65 60 80 62 Oil-exporting countries4 620 1,189 1,494 1,601 1,442 1,490 1,463 1,368 1,371 1,572 63 Other Africa 917 961 1,312 1,137 1,210 1,216 1,156 1,086 1,189 1,244 64 Other countries 8,067 5,684 3,347 3,987 3,662 3,507 3,682 2,924 3,155 3,426 65 Australia 7,857 5,300 2,779 3,237 3,058 2,744 2,943 2,173 2,459 2,786 66 All other 210 384 568 750 604 763 739 751 696 640 67 Nonmonetary international and regional organizations 5,957 4,454 5,821 5,223 3,495 4,519 3,441 3,974 5,253 3,038 68 International 5,273 3,747 4,806 4,139 2,512 3,669 2,471 2,714 4,147 1,759 69 Latin American regional 419 587 894 916 823 748 845 922 916 972 70 Other regional5 265 120 121 168 160 102 126 338 190 307 1. Includes the Bank for International Settlements. Beginning April 1978, also 4. Comprises Algeria, Gabon, Libya, and Nigeria. includes Eastern European countries not listed in line 23. 5. Asian, African, Middle Eastern, and European regional organizations, 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German except the Bank for International Settlements, which is included in "Other Democratic Republic, Hungary, Poland, and Romania. Western Europe." 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • January 1987 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 Mar. Apr. May June July Aug. Sept.P 1 Total 391,312 400,162 401,608' 394,702' 401,109 394,667' 403,843 403,494 403,729 417,778 2 Foreign countries 391,148 399,363 400,577' 394,219' 400,607 394,259' 403,387 403,002 403,309 417,577 3 Europe 91,927 99,014 106,413' 100,262' 101,250 100,903' 104,441 100,321 100,323 107,313 4 Austria 401 433 598 494 429 501 609 619 694 654 5 Belgium-Luxembourg 5,639 4,794 5,772 5,429 5,502 5,696 7,243 6,113 6,990 6,708 6 Denmark 1,275 648 706 845 794 882 750 856 783 807 7 Finland 1,044 898 823 1,194 795 866 983 1,041 961 1,085 8 France 8,766 9,157 9,124 8,636 8,902 8,861 9,455 9,583 9,483 10,185 9 Germany 1,284 1,306 1,267 1,374 1,341 1,176 1,095 1,426 1,181 1,600 10 Greece 476 817 991 798 764 723 629 622 660 747 11 Italy 9,018 9,119 8,848 7,297 6,709 6,806 7,474 7,266 5,981 6,661 12 Netherlands 1,267 1,356 1,258 1,394 1,380 1,384 1,407 1,427 1,254 2,051 13 Norway 690 675 706 613 786 746 905 614 698 730 14 Portugal 1,114 1,243 1,058 893 874 850 776 789 757 728 15 Spain 3,573 2,884 1,908 1,885' 1,701 1,986 2,001 1,863 1,749 1,994 16 Sweden 3,358 2,230 2,219 2,422 1,924 2,239 2,478 2,906 2,404 2,357 1/ Switzerland 1,863 2,123 3,171 2,940 2,978 3,134 3,553 2,617 3,306 2,665 18 Turkey 812 1,130 1,200 1,587 1,584 1,649 1,856 1,709 1,649 1,585 19 United Kingdom 47,364 56,185 62,566' 57,713' 60,602 59,332' 58,224 56,249 57,846 62,532 20 Yugoslavia 1,718 1,886 1,964 1,978 1,950 1,928 2,005 1,902 1,852 1,876 21 Other Western Europe1 477 596 998 1,166 649 491 1,253 1,102 521 791 22 U.S.S.R 192 142 130 424 477 489 568 504 528 462 23 Other Eastern Europe2 1,598 1,389 1,107 1,180' 1,111 1.164 1,176 1,112 1,026 1,094 24 Canada 16,341 16,109 16,482' 17,982' 18,814 17,910 18,270 18,303 19,401 18,112 25 Latin America and Caribbean 205,491 207,862 202,674' 196,815' 199,032 193,625 200,733 202,204 197,866 206,143 26 Argentina 11,749 11,050 11,462 11,456 11,803 11,921 12,079 12,282 12,009 12,119 27 Bahamas 59,633 58,009 58,258 55,692' 55,260 52,537 57,075 56,250' 55,453 61,697 28 Bermuda 566 592 499 460 275 238 274 432' 373 320 29 Brazil 24,667 26,315 25,283 25,379 25,363 25,271 24,855 24,915 24,762 25,461 30 British West Indies 35,527 38,205 38,881 36,888' 38,932 37,072 40,043 41,923 39.740 40,270 31 Chile 6,072 6,839 6,603 6,557 6,540 6,537 6,507 6,514 6,449 6,488 32 Colombia 3,745 3,499 3,249 2,903 2,861 2,820 2,789 2,776 2,642 2,634 33 Cuba 0 0 0 1 0 0 0 0 0 0 34 Ecuador 2,307 2.420 2,390 2,399 2,388 2,382 2,397 2,366 2,375 2,387 35 Guatemala3 129 158 194 167 124 112 136 113 127 135 36 Jamaica3 215 252 224 213 216 218 244 209 209 224 3/ Mexico 34,802 34,885 31,799' 31,692' 32,367 31,493 31,399 31,168' 30,839 31,032 38 Netherlands Antilles 1,154 1,350 1,340 927 839 1,075 1,086 996' 1,060 1,138 39 Panama 7,848 7.707 6.645 6,179 6,133 5,919 5,860 6,280 5,862 6,377 40 Peru 2,536 2,384 1,947 1,806 1,767 1,757 1,738 1,703 1,677 1,600 41 Uruguay 977 1,088 960 961 953 951 931 927 936 1,052 42 Venezuela 11,287 11,017 10,871 11,204 11,295 11,326 11,304 11,364 11,289 11,174 43 Other Latin America and Caribbean 2,277 2,091 2,067 1,931 1,917 1,997 2,015 1,985 2,065 2,035 44 67.837 66,316 66,212 70,729 7733,,442211 7733,,996655'' 7722,,003333 7744,,225533 7777,,779922 7788,,009977 China 45 Mainland 292 710 639 902 593 703 567 779 526 758 46 Taiwan 1,908 1,849 1,535 1,403 1,151 1,446 1,238 1,089 1,637 1,903 47 Hong Kong 8,489 7,293 6,796 8.208 8,134 8,315 7.526 8,445 8,632 8,878 48 India 330 425 450 479 398 420 440 372 375 355 49 Indonesia 805 724 698 712 717 736 675 720 729 689 50 Israel 1,832 2,088 1,991 1,617 1,611 1,766' 1,772 1,567 1,541 1,636 51 Japan 30,354 29,066 31,249 36,711 38,781 38,629 38,524 40,902 43,327 42,751 52 Korea 9,943 9,285 9,226 9,242 9,286 9,176 8,977 8,900 8,476 7,855 53 Philippines 2,107 2,555 2,224 2,336 2,325 2,263 2,393 2,168 2,128 2,148 54 Thailand 1,219 1,125 845 810 775 716 706 711 736 636 55 Middle East oil-exporting countries4 4.954 5,044 4,298 3,577 3,838 3,948 3,680 2,919 2,764 3,733 56 Other Asia 5,603 6,152 6,260 4,732 5,812 5,845 5,535 5,680 6,921 6,754 57 Africa 6,654 6,615 5,407 5,128 5,007 4.890 4,971 4,817 4,693 4,660 58 Egypt 747 728 721 653 639 619 740 701 633 593 59 Morocco 440 583 575 646 662 640 642 615 617 636 60 South Africa 2,634 2,795 1,942 1,799 1,716 1,743 1,705 1,661 1,683 1,603 61 Zaire 33 18 20 17 17 17 17 17 21 42 62 Oil-exporting countries5 1,073 842 630 488 465 417 415 413 445 511 63 Other 1,727 1,649 1,520 1,525 1,508 1,455 1,452 1,410 1,294 1,274 64 Other countries 2,898 3,447 3.390 3,305 3,082 2,966 2,939 3,103 3,232 3,253 65 Australia 2,256 2,769 2,413 2,473 2,237 2,050 2,023 2,159 2,293 2,249 66 All other 642 678 978 832 845 916 916 945 940 1,004 67 Nonmonetary international and regional organizations6 164 800 1,030 483 502 408 456 493 420 200 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 Mar.' Apr. May' June July Aug. Sept.' 1 Total 444444422222226666666,,,,,,,222222211111115555555 444444433333333333333,,,,,,,000000077777778888888 444444433333330000000,,,,,,,444444488888889999999''''''' 444444411111119999999,,,,,,,777777744444446666666 444444433333332222222,,,,,,,333333322222226666666 441177,,777788 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 333333399999991111111,,,,,,,333333311111112222222 444444400000000000000,,,,,,,111111166666662222222 444444400000001111111,,,,,,,666666600000008888888''''''' 333333399999994444444,,,,,,,777777700000002222222 401,109 394,667 444444400000003333333,,,,,,,888888844444443333333 403,494' 403,729 441177,,777788 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 55555557777777,,,,,,,555555566666669999999 66666662222222,,,,,,,222222233333337777777 66666660000000,,,,,,,555555500000007777777''''''' 66666660000000,,,,,,,666666655555559999999 60,157 59,972 66666660000000,,,,,,,666666622222222222222 60,667 59,776 6611,,111100 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 111111144444446666666,,,,,,,333333399999993333333 111111155555556666666,,,,,,,222222211111116666666 111111177777774444444,,,,,,,222222266666661111111 111111177777773333333,,,,,,,444444400000000000000 179,662 173,094 111111188888881111111,,,,,,,888888866666667777777 181,590^ 182,151 119933,,998877 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222223333333,,,,,,,888888833333337777777 111111122222224444444,,,,,,,999999933333332222222 111111111111116666666,,,,,,,666666655555554444444''''''' 111111111111110000000,,,,,,,555555577777771111111 111,832 112,522 111111111111112222222,,,,,,,999999999999996666666 114,101 115,888 111166,,881199 66 DDeeppoossiittss 44444447777777,,,,,,,111111122222226666666 44444449999999,,,,,,,222222222222226666666 44444448888888,,,,,,,333333377777772222222''''''' 44444445555555.......000000044444443333333 46,393 47,493 44444447777777,,,,,,,000000044444441111111 49,326' 52,410 5522,,113366 77 OOtthheerr 77777776666666,,,,,,,777777711111111111111 77777775555555,,,,,,,777777700000006666666 66666668888888,,,,,,,222222288888882222222 66666665555555,,,,,,,555555522222229999999 65,439 65,029 66666665555555,,,,,,,999999955555555555555 64,775' 63,477 6644,,668833 88 AAllll ootthheerr ffoorreeiiggnneerrss 66666663333333,,,,,,,555555511111114444444 55555556666666,,,,,,,777777777777777777777 55555550000000,,,,,,,111111188888885555555 55555550000000,,,,,,,000000077777772222222 49,458 49,079 44444448888888,,,,,,,333333355555558888888 47,137 45,913 4455,,886622 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 33333334444444,,,,,,,999999900000003333333 33333332222222,,,,,,,999999911111116666666 22222228888888,,,,,,,888888888888881111111 22222225555555.......000000044444444444444 22222228888888,,,,,,,444444488888883333333 2222222,,,,,,,999999966666669999999 3333333,,,,,,,333333388888880000000 3333333,,,,,,,333333333333335555555 2222222,,,,,,,444444499999994444444 3333333,,,,,,,444444477777775555555 11 Negotiable and readily transferable 22222226666666,,,,,,,000000066666664444444 22222223333333,,,,,,,888888800000005555555 11111119999999,,,,,,,333333333333332222222 11111117777777,,,,,,,888888855555559999999 22222220000000,,,,,,,222222299999994444444 12 Outstanding collections and other 5555555,,,,,,,888888877777770000000 5555555,,,,,,,777777733333332222222 6666666,,,,,,,222222211111114444444 4444444,,,,,,,666666699999992222222 4444444,,,,,,,777777711111115555555 13 MEMO: Customer liability on 33333337777777,,,,,,,777777711111115555555 33333337777777,,,,,,,111111100000003333333 22222228888888,,,,,,,444444488888887777777 22222228888888,,,,,,,555555544444441111111 22222228888888,,,,,,,333333322222228888888''''''' Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 46,337 40,714 37,399 41,442 42,771 47,351 46,200' 45,848 47,526 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. June 1 228,150 243,715 243,952 232,803 227,903 221,177 222,256 By borrower 2 Maturity of 1 year or less1 173,917 176,158 167,858 161,642 160,824 152,6% 152,249 3 Foreign public borrowers 21,256 24,039 23,912 25,537 26,302 23,845 23,183 4 All other foreigners 152,661 152,120 143,947 136,105 134,522 128,851 129,066 5 Maturity of over 1 year1 54,233 67,557 76,094 71,161 67,078 68,481 70,008 6 Foreign public borrowers 23,137 32,521 38,695 36,820 34,512 36,681 37,177 7 All other foreigners 31,095 35,036 37,399 34,340 32,567 31,800 32,830 By area Maturity of 1 year or less1 8 Europe 50,500 56,117 58,498 58,520 56,585 53,462 57,929 9 Canada 7,642 6,211 6,028 6,117 6,401 5,899 6,043 10 Latin America and Caribbean 73,291 73,660 62,791 62,148 63,328 59,538 57,134 11 37,578 34,403 33,504 29,120 27,966 28,034 25,772 12. Africa 3,680 4,199 4,442 3,954 3,753 3,331 3,297 13 All other2 1,226 1,569 2,593 1,782 2,791 2,433 2,073 Maturity of over 1 year1 14 Europe 11,636 13,576 9,605 8,078 7,634 7,783 7,934 15 Canada 1,931 1,857 1,882 1,940 1,805 1,925 2,256 16 Latin America and Caribbean 35,247 43,888 56,144 53,090 50,674 52,165 53,572 17 3,185 4,850 5,323 5,230 4,502 4,251 4,034 18 Africa 1,494 2,286 2,033 1,665 1,538 1,634 1,497 19 All other2 740 1,101 1,107 1,157 926 722 714 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 • January 1987 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 436.1 433.9 427.6 406.4 405.7 405.5 396.8 394.9 391.9 394.4 391.1 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 33.5 36.0 37.0 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 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 26.0 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 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 .5 .9 .9 1.0 .9 .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 11.0 10.3 10.6 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 .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 June Sept. Dec. Mar. JuneP 1 Total 27,512 25,346 29,357 24,574 25,256 27,230 25,635 24,222 2 Payable in dollars 24,280 22,233 26,389 21,899 22,408 23,994 22,022 20,692 3 Payable in foreign currencies 3,232 3,113 2,968 2,675 2,848 3,236 3,613 3,530 By type 4 Financial liabilities 11,066 10,572 14,509 11,528 11,815 13,005 12,328 11,117 5 Payable in dollars 8,858 8,700 12,553 9,543 9,824 10,955 10,205 9,177 6 Payable in foreign currencies 2.208 1,872 1,955 1,985 1,991 2,050 2,123 1,940 7 Commercial liabilities 16,446 14,774 14,849 13,046 13,441 14,225 13,307 13,105 8 Trade payables 9,438 7,765 7,005 5,797 5,694 6,685 5,598 5,503 9 Advance receipts and other liabilities ... 7,008 7,009 7,843 7,249 7,747 7,540 7,710 7,602 10 Payable in dollars 15,423 13,533 13,836 12,356 12,584 13,039 11,817 11,516 11 Payable in foreign currencies 1,023 1,241 1,013 690 857 1,186 1,490 1,590 By area or country Financial liabilities 12 Europe 6,501 5,742 6,728 5,944 6,568 7,270 6,971 6,705 13 Belgium-Luxembourg 505 302 471 351 367 329 338 288 14 France 783 843 995 865 849 857 851 701 15 Germany 467 502 489 474 493 419 371 262 16 Netherlands 711 621 590 604 624 745 630 651 17 Switzerland 792 486 569 566 593 676 702 561 18 United Kingdom 3,102 2,839 3,297 2,835 3,351 3,924 3,736 3,960 19 Canada 746 764 863 850 826 760 753 287 20 Latin America and Caribbean 2,751 2,596 5,086 3,106 2,619 3,152 2,788 2,404 21 Bahamas 904 751 1,926 1,107 1,145 1,120 954 859 22 Bermuda 14 13 13 10 4 4 13 14 23 Brazil 28 32 35 27 23 29 26 27 24 British West Indies 1,027 1,041 2,103 1,734 1,234 1,814 1,610 1,362 25 Mexico 121 213 367 32 28 15 20 30 26 Venezuela 114 124 137 3 3 3 4 3 27 Asia 1,039 1,424 1,777 1,584 1,767 1,790 1,799 1,660 28 Japan 715 991 1,209 994 1,136 1,173 1,192 1,189 29 Middle East oil-exporting countries2.. 169 170 155 147 82 82 78 43 30 Africa 17 19 14 14 14 12 12 12 0 0 0 0 0 0 0 0 31 Oil-exporting countries3 12 27 41 30 22 21 4 49 32 All other4 Commercial liabilities 3,831 3,245 4,001 3,461 3,897 4,074 3,915 3,761 33 Europe 52 62 48 53 56 62 66 58 34 Belgium-Luxembourg 598 437 438 423 431 453 382 357 35 France 468 427 622 428 601 607 546 512 36 Germany 346 268 245 284 386 364 545 587 37 Netherlands 367 241 257 349 289 379 251 283 38 Switzerland 1,027 732 1,095 730 858 976 957 861 39 United Kingdom 40 Canada 1,495 1,841 1,975 1,494 1,383 1,449 1,442 1,351 41 Latin America and Caribbean 1,570 1,473 1,871 1,225 1,262 1,088 1,097 1,304 42 Bahamas 16 1 7 12 2 12 26 10 43 Bermuda 117 67 114 77 105 77 210 294 44 Brazil 60 44 124 90 120 58 64 107 45 British West Indies 32 6 32 1 15 44 7 35 46 Mexico 436 585 586 492 415 430 256 235 47 Venezuela 642 432 636 309 311 212 364 488 48 Asia 8,144 6,741 5,285 5,246 5,353 6,046 5,384 5,068 49 Japan 1,226 1,247 1,256 1,219 1,567 1,799 2,039 2,095 50 Middle East oil-exporting countries2 5. 5,503 4,178 2,372 2,396 2,109 2,829 2,171 1,731 51 Africa 753 553 588 631 572 587 486 569 52 Oil-exporting countries3 277 167 233 265 235 238 148 215 53 All other4 651 921 1,128 988 975 982 983 1,053 1. For a description of the changes in the International Statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. July 1979 BULLETIN, p. 550. 4. Includes nonmonetary international and regional organizations. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 5. Revisions include a reclassification of transactions, which also affects the United Arab Emirates (Trucial States). totals for Asia and the grand totals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • January 1987 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 June Sept. Dec. Mar. June? 1 Total 28,725 34,911 29,901 26,750 28,610 28,085 30,927' 32,519 2 Payable in dollars 26,085 31,815 27,304 24,121 25,743 25,783 28,74C 30,337 3 Payable in foreign currencies 2,640 3,096 2,597 2,629 2,866 2,302 2,187 2,182 By type 4 Financial claims 17,684 23,780 19,254 16,695 19,203 18,099 21,540 23,324 5 Deposits 13,058 18,496 14,621 12,839 15,315 14,852 18,146 20,034 6 Payable in dollars 12,628 17,993 14,202 12,283 14,611 14,237 17,689 19,479 7 Payable in foreign currencies 430 503 420 556 704 615 457 555 8 Other financial claims 4,626 5,284 4,633 3,856 3,889 3,248 3,394 3,290 9 Payable in dollars 2,979 3,328 3,190 2,375 2,351 2,213 2,301 2,269 10 Payable in foreign currencies 1,647 1,956 1,442 1,480 1,538 1,035 1,093 1,021 11 Commercial claims 11,041 11,131 10,646 1100,,005555 9,406 9,986 9,387' 9,195 12 Trade receivables 9,994 9,721 9,177 88,,668888 7,932 8,6% 8,086' 7,858 13 Advance payments and other claims 1,047 1,410 1,470 1,367 1,475 1,290 1,301 1,337 14 Payable in dollars 10,478 10,494 9,912 9,463 8,782 9,333 8,750r 8,589 15 Payable in foreign currencies 563 637 735 592 624 652 637 606 By area or country Financial claims 16 Europe 4,873 6,488 5,762 5,477 6,463 6,327 6,859 8,877 17 Belgium-Luxembourg 15 37 15 15 12 10 10 11 18 France 134 150 126 51 132 184 217 257 19 Germany 178 163 224 175 158 223 172 148 20 Netherlands 97 71 66 46 127 61 61 17 21 Switzerland 107 38 66 16 53 74 166 177 22 United Kingdom 4,064 5,817 4,864 4,900 5,736 5,522 5,986 8,051 23 Canada 4,377 5,989 3,988 3,756 4,037 3,256 4,024 4,464 24 Latin America and Caribbean 7,546 10,234 8,216 6,616 7,603 7,697 9,934 9,151 25 Bahamas 3,279 4,771 3,306 2,204 2,315 2,685 3,500 3,251 26 Bermuda 32 102 6 6 5 6 2 17 27 Brazil 62 53 100 96 92 78 77 75 28 British West Indies 3,255 4,206 4,043 3,747 4,632 4,440 5,904 5,359 29 Mexico 274 293 215 206 201 180 178 176 30 Venezuela 139 134 125 100 73 48 43 42 31 Asia 698 764 961 640 969 696 621 723 32 Japan 153 297 353 281 725 475 350 499 33 Middle East oil-exporting countries2 15 4 13 6 6 4 2 2 34 Africa 158 147 210 111 104 103 87 89 35 Oil-exporting countries3 48 55 85 25 31 29 27 25 36 All other4 31 159 117 95 26 21 14 20 Commercial claims 37 Europe 3,826 3,670 3,801 3,680 3,235 3,533 3,387' 3,304 38 Belgium-Luxembourg 151 135 165 212 158 175 148 131 39 France 474 459 440 408 360 426 384' 390 40 Germany 357 349 374 375 336 346 396 414 41 Netherlands 350 334 335 301 286 284 221' 237 42 Switzerland 360 317 271 376 208 284 248 221 43 United Kingdom 811 809 1,063 950 779 898 793 668 44 Canada 633 829 1,021 1,065 1,100 1,023 1,060 970 45 Latin America and Caribbean 2,526 2,695 22,,005522 1,803 1,660 1,753 1,599' 1,590 46 Bahamas 21 8 88 11 18 13 27 24 47 Bermuda 261 190 115 65 62 93 82 148 48 Brazil 258 493 214 193 211 206 231' 194 49 British West Indies 12 7 7 29 7 6 7 24 50 Mexico 775 884 583 468 416 510 388' 320 51 Venezuela 351 272 206 181 149 157 172 180 52 Asia 3,050 3,063 3,073 2,707 2,712 2,982 2,606' 2,649 53 Japan 1,047 1,114 1,191 954 884 1,016 801' 846 54 Middle East oil-exporting countries2 751 737 668 593 541 638 63 <y 691 55 Africa 588 588 470 464 434 437 491 447 56 Oil-exporting countries3 140 139 134 137 131 130 167 171 57 All other4 417 286 229 336 264 257 244 235 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.- Mar/ Apr/ May' June July Aug. Sept.'' Sept. U.S. corporate securities STOCKS 1 Foreign purchases 59,834 81,995' 110,917 13,568 15.414 13,244 11,176 13,268 12,040 12,180 2 Foreign sales 62,814 77,054 92.636 10,687 11,468 10,388 10,832 11,258 10,611 10,926 3 Net purchases, or sales (-) -2,980 4,941' 18,281 2,881 3,947 2,856 344 2,010 1,429 1,253 4 Foreign countries -3,109 4,857' 18,391 2,833 3,883 2,814 464 2,075 1,469 1,298 5 Europe -3,077 2,057 10,614 2,212 2,066 1,571 192 576 823 584 6 France -405 -438 510 -26 36 99 219 182 105 29 7 Germany -50 730 423 229 47 99 -174 -130 -42 7 8 Netherlands -357 -123 991 166 123 236 97 52 50 36 9 Switzerland -1,542 -75 2,153 697 569 376 -134 -198 44 70 10 United Kingdom -677 1,665 5.060 1,029 733 563 38 481 520 461 11 Canada 1,691 356 766 77 52 44 131 214 97 92 12 Latin America and Caribbean 495 1,718 2,284 195 880 489 60 269 108 146 N Middle East1 -1,992 238 852 127 339 117 -236 181 78 58 14 Other Asia -378 296' 3,318 135 399 472 288 830 376 346 15 Africa -22 24 219 59 48 43 -3 30 -1 -13 16 Other countries 175 168 338 28 100 78 32 -23 -13 86 17 Nonmonetary international and regional organizations 129 84 -111 47 63 42 -121 -65 -40 --4455 BONDS2 18 Foreign purchases 39,296 86,587' 91,739 12,515 13,483 12,044 8,964 8,937' 9,420 10,161 19 Foreign sales 26,399 42,439' 52,412 7,379 8,855 5,252 5,686 5,679 5,348 5,578 20 Net purchases, or sales (-) 12,897 44,149' 39,327 5,137 4,628 6,792 3,278 3,259' 4,072 4,582 21 Foreign countries 12,600 44,244' 38,447 4,836 4,438 6,696 2,798 3,197' 4,077 4,872 22 Europe 11,697 40,047 30,625 3,690 3,641 6,221 2,763 2,395' 2,484 3,385 73 France 207 210 29 -17 -22 83 -6 6 20 -28 24 Germany 1,724 2,001 -204 -224 -73 205 -3 -91 -81 28 25 Netherlands 100 222 277 25 2 89 -37 -39 98 51 26 Switzerland 643 3,987 4,178 459 1,231 456 490 180 564 30 27 United Kingdom 8,429 32,762 26,498 3,374 2,578 5,631 2,214 2,213' 1,917 3,410 78 Canada -62 19C 155 -197 74 54 55 85 110 3 2,9 Latin America and Caribbean 376 498 1,201 200 263 142 63 250' 160 65 30 Middle East1 -1,230 -2,631' -2,305 8 -396 -186 -632 -718' -40 -169 31 Other Asia 1,817 6,091 8.642 1,144 840 464 480 1,177' 1,329 1,586 32 Africa 1 11 14 0 3 -2 3 -3 5 6 33 Other countries 0 38 116 -10 13 3 66 11 29 -4 34 Nonmonetary international and regional organizations 297 -95 880 301 190 96 480 61 -4 -290 Foreign securities 35 Stocks, net purchases, or sales (-) -1,101 -3,894' -3,362 -1,364 -1,668 -221 -238 404' -83 480 36 Foreign purchases 14,816 20,851' 34,520 3,710 4,390 3,454 3,775 4,310' 4,610 4,811 37 Foreign sales 15,917 24,746' 37,883 5.073 6,057 3,675 4,013 3,907' 4,694 4,330 38 Bonds, net purchases, or sales (-) -3,930 -3,996' -4,169 -2,963 -1,251 188 1,540 359' 1,232 -2,221 39 Foreign purchases 56,017 81,214' 120,591 12,700 15,296 13,491 15,632 13,559 14,086 15,157 40 Foreign sales 59,948 85,210' 124,760 15,663 16,546 13,303 14,091 13,200' 12.854 17,378 11 Net purchases, or sales (-), of stocks and bonds .... -5,031 -7,891' -7,531 -4,326 -2,918 -33 1,302 762' 1,149 -1,741 42 Foreign countries -4,642 -8,954' -7,879 -4,003 -2,788 -106 1,122 438' 1,090 -1,678 43 Europe -8,655 -9,887' -14,636 -3,802 -2,649 208 -1,332 -683' -714 -3,366 44 Canada 542 -1,682' -596 -488 -286 82 16 245 263 111 45 Latin America and Caribbean 2,460 1,845 2,746 205 176 363 742 278 127 352 46 1,356 658' 5,501 126 -124 -746 1,639 659 1,337 1,653 47 Africa -108 75 46 4 6 3 3 9 1 3 48 Other countries -238 38' -939 -47 89 -16 55 -70 75 -430 49 Nonmonetary international and regional organizations -389 1,063 347 -324 -130 73 180 324 59 -63 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, ties sold abroad by U.S. corporations organized to finance direct investments Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). abroad. 2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • January 1987 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1986 1986 11998844 11998855 Country or area Jan.- Mar. Apr. May June July Aug. Sept.P Sept. Transactions, net purchases or sales (-) during period1 1 Estimated total2 21,501 29,047 22,385 9,765' 8,658' -2,132' 3,112 -254' 752 5,095 2 Foreign countries2 16,496 28,591' 23,351 2,554' 8,398' -252' 2,230 2,705' 2,215 4,105 3 Europe2 11,014 4,145 13,478 1,813 1,625 1,436' 2,562 2,544' 2,442 -765 4 Belgium-Luxembourg 287 476 316 -196 29 39 82 -46 180 239 5 Germany2 2,929 1,917 4,785 322 139 468 357 818 1,050 1,042 6 Netherlands 449 269 1,191 61 81 -31 -64 1,756 -64 -313 7 Sweden 40 976 459 -14 113 236 16 42 -25 100 8 Switzerland2 656 760 772 22 163 365 349 -278 52 -68 9 United Kingdom 5,188 -1,954 3,797 1,474 -206 698' 698 1,207 -1,959 10 Other Western Europe 1,466 1,701 2,158 144 1,307 -339 1,125 -358 43 195 11 Eastern Europe 0 0 0 0 0 0 0 0 0 0 12 Canada 1,586 -188 789 762 55 908 -302 67 105 -198 13 Latin America and Caribbean 1.418 4,312 949 227 1,234 -954 -460 28 -37 220 14 Venezuela 14 238 -29 127 196 36 -170 -72 -294 266 15 Other Latin America and Caribbean 536 2,343 1,343 171 173 372 -290 96 255 32 16 Netherlands Antilles 869 1,731 -365 -70 865 -1,363 0 5 2 -78 17 Asia 2,431 19,899' 7,752 -253' 5,092' -1,617' 515 -137' -133 5,036 18 Japan 6,289 17,920r 5,969 334' 2,267' -1,148' 223 273 683 4,095 19 Africa -67 112 -30 -18 -1 -2 -5 6 -1 11 20 All other 114 311 413 22 394 -22 -80 198 -160 -200 21 Nonmonetary international and regional organizations 5,009 457r -965 7,212' 260 -1,880' 882 -2,959' -1,462 990 22 International 4,612 -420 -1,224 6,957 198 -1,889 899 -2,804 -1,511 885 23 Latin American regional 0 18 162 23 30 0 5 0 0 39 MEMO 24 Foreign countries2 16,496 28,591' 23,351 2,554' 8,398' -252' 2,230 2,705' 2,215 4,105 25 Official institutions 505 8,088 10,462 394 3,862 157 1,612 1,448' 61 1,948 26 Other foreign2 15,992 20,503' 12,891 2,160' 4,537' -409' 619 1,257' 2,154 2,158 Oil-exporting countries 27 Middle East3 -6,270 -1,581 -88 -607 1,334 -14 -290 14' -239 -205 28 Africa4 -101 7 4 -2 1 1 0 2 -1 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 Oct. 31, 1986 Rate on Oct. 31, 1986 Rate on Oct. 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.. 8.55 Oct. 1986 Japan 3.0 Oct. 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 Apr. May June July Aug. Sept. Oct. 1 Eurodollars 9.57 10.75 8.27 6.80 6.86 6.95 6.54 6.06 5.88 5.88 2 United Kingdom 10.06 9.91 12.16 10.43 10.16 9.70 9.91 9.79 10.05 11.08 3 Canada 9.48 11.29 9.64 9.57 8.60 8.72 8.45 8.50 8.38 8.45 4 Germany 5.73 5.96 5.40 4.48 4.58 4.59 4.61 4.56 4.48 4.56 5 Switzerland 4.11 4.35 4.92 4.04 4.32 4.96 4.80 4.30 4.13 3.96 6 Netherlands 5.58 6.08 6.29 5.23 5.76 5.90 5.69 5.28 5.17 5.32 7 France 12.44 11.66 9.91 7.66 7.21 7.23 7.13 7.09 7.07 7.38 8 Italy 18.95 17.08 14.86 13.62 12.35 11.78 11.70 11.18 10.84 10.85 9 Belgium 10.51 11.41 9.60 8.51 7.90 7.27 7.25 7.25 7.25 7.29 10 Japan 6.49 6.32 6.47 4.85 4.58 4.64 4.62 4.68 4.71 4.75 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • January 1987 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1986 CCoouunnttrryy//ccuurrrreennccyy 11998833 11998844 11998855 May June July Aug. Sept. Oct. 1 Australia/dollar1 90.14 87.937 70.026 72.72 68.89 62.91 61.23 62.21 63.83 2 Austria/schilling 17.968 20.005 20.676 15.667 15.699 15.117 14.502 14.349 14.111 3 Belgium/franc 51.121 57.749 59.336 45.497 45.633 44.304 42.701 42.315 41.635 4 Brazil/cruzeiro 573.27 1841.50 6205.10 13.84 13.84 13.84 13.84 13.84 13.98 5 Canada/dollar 1.2325 1.2953 1.3658 1.3757 1.3899 1.3808 1.3885 1.3872 1.3885 6 China, P.R./yuan 1.9809 2.3308 2.9434 3.2014 3.2115 3.6435 3.7129 3.7150 3.7257 7 Denmark/krone 9.1483 10.354 10.598 8.2479 8.2822 8.0635 7.7657 7.7278 7.5607 8 Finland/markka 5.5636 6.0007 6.1971 5.0967 5.1954 5.0744 4.9377 4.9190 4.8684 9 France/franc 7.6203 8.7355 8.9799 7.0967 7.1208 6.9323 6.7215 6.6835 6.5628 10 Germany/deutsche mark 2.5539 2.8454 2.9419 2.2277 2.2337 2.1517 2.0621 2.0415 2.0054 11 Greece/drachma 87.895 112.73 138.40 139.64 140.98 138.40 134.68 135.07 135.44 12 Hong Kong/dollar 7.2569 7.8188 7.7911 7.8080 7.8107 7.8123 7.8003 7.8026 7.7999 13 India/rupee 10.1040 11.348 12.332 12.466 12.599 12.508 12.567 12.676 12.848 14 Ireland/pound1 124.81 108.64 106.62 136.62 135.68 139.00 134.67 134.53 135.89 15 Italy/lira 1519.30 1756.10 1908.90 1528.50 1533.10 1478.31 1420.33 1410.23 1387.67 16 Japan/yen 237.55 237.45 238.47 167.03 167.54 158.61 154.18 154.73 156.47 17 Malaysia/ringgit 2.3204 2.3448 2.4806 2.5978 2.6231 2.6455 2.6121 2.6174 2.6245 18 Netherlands/guilder 2.8543 3.2083 3.3184 2.5082 2.5154 2.4236 2.3242 2.3050 2.2663 19 New Zealand/dollar' 66.790 57.837 49.752 56.666 54.585 53.176 50.068 47.950 50.392 20 Norway/krone 7.3012 8.1596 8.5933 7.4106 7.6117 7.4800 7.3534 7.3429 7.3611 21 Portugal/escudo 111.610 147.70 172.07 149.12 151.09 148.67 146.17 146.83 147.24 22 Singapore/dollar 2.1136 2.1325 2.2008 2.2157 2.2232 2.1861 2.1601 2.1680 2.1777 23 South Africa/rand1 89.85 69.534 45.57 45.67 39.49 39.04 38.39 43.36 44.42 24 South Korea/won 776.04 807.91 861.89 889.09 890.74 888.59 886.45 883.06 879.22 25 Spain/peseta 143.500 160.78 169.98 141.62 142.91 137.58 134.11 134.10 133.43 26 Sri Lanka/rupee 23.510 25.428 27.187 27.932 27.955 28.065 28.187 28.297 28.407 27 Sweden/krona 7.6717 8.2706 8.6031 7.1458 7.2124 7.0715 6.9365 6.9191 6.8901 28 Switzerland/franc 2.1006 2.3500 2.4551 1.8538 1.8406 1.7445 1.6616 1.6537 1.6433 29 Taiwan/dollar n.a. 39.633 39.889 38.460 38.163 38.119 37.422 36.885 36.647 30 Thailand,'baht 22.991 23.582 27.193 26.327 26.400 26.204 26.093 26.120 26.129 31 United Kingdom/pound1 151.59 133.66 129.74 152.11 150.85 150.71 148.61 146.98 142.64 MEMO 32 United States/dollar2 125.34 138.19 143.01 113.27 113.77 110.38 107.50 107.15 106.58 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 December 1986 A87 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, 1985 January 1987 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 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1986 December 1986 A76 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 Terms of lending at commercial banks, August 1986 December 1986 A70 Special tables begin on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • January 1987 4.20 DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1-2 Consolidated Report of Condition, December 31, 1985 Millions of dollars Banks with foreign offices3-4 Bank o s f f w ic i e th s o d n o l m y5 e stic IItteemm TToottaall Total Foreign Domestic Over 100 Under 100 1 Total assets6 2,706,663 1,590,531 415,674 1,233,483 676,166 439,966 2 Cash and balances due from depository institutions 335,330 234,619 109,765 124,855 63,719 37,000 3 Cash items in process of collection, unposted debits, and currency n.a. 92,859 1,513 91,345 26,711 n.a. 4 Cash items in process of collection and unposted debits and coin n.a. n.a. n.a. 78,961 18,424 n.a. 5 Currency and coin n.a. n.a. n.a. 12,385 8,288 n.a. 6 Balances due from depository institutions in the United States n.a. 32,992 20,175 12,817 20,937 n.a. 7 Balances due from banks in foreign countries and foreign central banks n.a. 91,189 87,847 3,343 7,614 n.a. 8 Balances due from Federal Reserve Banks n.a. 17,579 229 17,350 8,456 n.a. MEMO 9 Noninterest-bearing balances due from commercial banks in the United States (included in balances due from depository institutions in the U.S.) n.a. n.a. n.a. 8,479 13,620 15,625 10 Total securities, loans and lease financing receivables, net 2,162,514 1,195,253 n.a. n.a. 583,685 383,576 11 Total securities, book value 435,599 162,297 16,847 145,450 149,930 123,372 12 U.S. Treasury securities and U.S. government agency and corporation obligations 224433,,661155 73,745 172 7733,,557733 86,582 83,288 13 U.S. Treasury securities n.a. 56,124 162 55,962 60,626 n.a. 14 U.S. government agency and corporation obligations n.a. 17,621 10 17,611 25,956 n.a. 15 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 23,961 11,554 0 11,554 6,098 6,309 16 All other n.a. 6,067 10 6,057 19,858 n.a. 17 Securities issued by states and political subdivisions in the United States 159,469 65,586 603 64,984 56,534 37,348 18 Other securities 32,515 22,966 16,072 6,893 6,813 2,737 19 Other domestic securities n.a. 6,023 502 5,521 6,393 20 All holdings of private certificates of participation in pools of residential mortgages 554400 257 3 254 145 137 21 All other 14,613 5,766 499 5,267 6,248 2,599 22 Foreign securities n.a. 16,942 15,570 1,373 420 23 Federal funds sold and securities purchased under agreements to resell 132,055 64,027 130 63,897 37,321 30,707 24 Total loans and lease financing receivables, gross 1,635,479 990,373 244,136 746,237 408,403 236,703 75 LESS: Unearned income on loans 17,649 7,081 1,865 5,216 6,469 4,098 26 Total loans and leases (net of unearned income) 1,617,830 983,292 242,269 741,023 401,934 232,604 27 LESS: Allowance for loan and lease losses 22,897 14,290 n.a. n.a. 5,499 3,107 28 LESS: Allocated transfer risk reserves 72 72 n.a. n.a. 0 0 29 EQUALS: Total loans and leases, net 1,594,861 968,929 n.a. n.a. 396,435 229,497 Total loans, gross, by category 30 Loans secured by real estate 435,493 205,230 13,268 191,962 138,343 91,920 31 Construction and land development n.a. n.a. n.a. 58,934 21,517 8,698 32 Farmland n.a. n.a. n.a. 1,371 2,701 7,268 33 1-4 family residential properties n.a. n.a. n.a. 78,611 66,871 50,580 34 Multifamily (5 or more) residential properties n.a. n.a. n.a. 6,152 4,503 1,883 35 Nonfarm nonresidential properties n.a. n.a. n.a. 46,894 42,750 23,492 36 Loans to depository institutions 67,700 61,897 37,022 24,875 5,139 664 37 To commercial banks in the United States n.a. 15,729 1,340 14,389 4,232 n.a. 38 To other depository institutions in the United States n.a. 5,134 463 4,671 849 n.a. 39 To banks in foreign countries n.a. 41,034 35,219 5,815 58 n.a. 40 Loans to finance agricultural production and other loans to farmers 36,086 6,996 599 6,397 6,980 22,110 41 Commercial and industrial loans 576,206 407,071 130,327 276,744 111,761 57,374 4? To U.S. addressees (domicile) n.a. 290,322 19,189 271,133 111,516 n.a. 43 To non-U.S. addressees (domicile) n.a. 116,750 111,138 5,611 246 n.a. 44 Acceptances of other banks 4,824 1,328 586 742 1,864 1,632 45 U.S. banks n.a. 474 90 385 n.a. n.a. 46 n.a. 853 4% 357 n.a. n.a. 47 Loans to individuals for household, family and other personal expenditures 301,330 132,930 9,207 123,722 113,181 55,219 48 Credit cards and related plans 73,757 43,120 n.a. n.a. 28,655 1,982 49 Other (includes single payment and installment) 227,573 89,810 n.a. n.a. 84,526 53,237 50 Obligations (other than securities) of states and political subdivisions in the U.S.. 61,057 39,280 629 38,650 18,439 3,338 51 Nonrated industrial development obligations 45,688 28,433 12 28,421 14,951 2,304 52 Other obligations (excluding securities) 15,369 10,847 618 10,229 3,488 1,034 53 128,571 115,555 48,564 66,992 9,265 3,750 54 Loans to foreign governments and official institutions n.a. 39,427 35,814 3,613 44 n.a. 55 n.a. 76,128 12,750 63,378 9,221 n.a. 56 Loans for purchasing and carrying securities n.a. n.a. n.a. 21,431 2,290 n.a. 57 n.a. n.a. n.a. 41,947 6,931 n.a. 58 24,214 20,087 3,934 16,152 3,433 694 59 Assets held in trading accounts 40,431 39,395 11,731 27,664 899 137 60 Premises and fixed assets (including capitalized leases) 40,412 20,390 n.a. n.a. 11,812 8,210 61 7,129 2,910 n.a. n.a. 2,045 2,175 62 Investments in unconsolidated subsidiaries and associated companies 2,083 1,725 n.a. n.a. 297 61 63 Customers' liability on acceptances outstanding 50,336 50,010 n.a. n.a. 296 30 64 Net due from own foreign offices, Edge and Agreement subsidiaries and IBFs ... n.a. n.a. n.a. 48,414 n.a. n.a. 65 2,698 1,563 n.a. n.a. 980 155 66 Other assets 65,720 44,666 n.a. n.a. 12,432 8,621 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A71 4.20 Continued Banks with foreign offices3'4 Bank o s f f w ic i e th s o d n o l m y5 e stic IItteemm TToottaall Total Foreign Domestic Over 100 Under 100 67 Total liabilities, limited-life preferred stock and equity capital 2,706,663 1,590,530 n.a. n.a. 676,166 439,966 68 Total liabilities7 2,539,095 1,507,283 414,484 1,151,425 629,800 402,012 69 Limited-life preferred stock 14 0 n.a. n.a. 14 0 70 2,101,008 1,146,851 321,660 825,191 562,987 391,170 71 Individuals, partnerships, and corporations n.a. n.a. 173,528 718,506 506,541 354,749 77 U.S. government n.a. n.a. n.a. 2,125 2,021 840 73 States and political subdivisions in the United States n.a. n.a. n.a. 35,435 37,128 28,751 74 Commercial banks in the United States n.a. n.a. n.a. 37,860 9,791 1,913 75 Other depository institutions in the United States n.a. n.a. n.a. 5,072 2,057 1,210 76 Banks in foreign countries n.a. n.a. n.a. 8,060 189 n.a. 77 Foreign governments and official institutions n.a. 31,100 27,922 3,177 180 n.a. 78 Certified and official checks 23,963 15,537 581 14,956 5,080 3,347 79 All other8 n.a. n.a. 119,628 360 80 Total transaction accounts n.a. n.a. n.a. 306,782 167,101 104,925 81 Individuals, partnerships, and corporations n.a. n.a. n.a. 241,140 143,823 93,003 87 U.S. government n.a. n.a. n.a. 1,573 1,536 634 83 States and political subdivisions in the United States n.a. n.a. n.a. 7,789 7,945 6,691 84 Commercial banks in the United States n.a. n.a. n.a. 28,261 7,103 487 85 Other depository institutions in the United States n.a. n.a. n.a. 4,498 1,555 637 86 Banks in foreign countries n.a. n.a. n.a. 7,252 54 n.a. 87 Foreign governments and official institutions n.a. n.a. n.a. 1,314 6 n.a. 88 Certified and official checks n.a. n.a. n.a. 14,956 5,080 3,347 89 All other n.a. n.a. n.a. 126 90 Demand deposits (included in total transaction accounts) n.a. n.a. n.a. 261,554 120,628 65,946 91 Individuals, partnerships, and corporations n.a. n.a. n.a. 196,940 100,037 57,614 92 U.S. government n.a. n.a. n.a. 1,558 1,520 617 93 States and political subdivisions in the United States n.a. n.a. n.a. 6,778 5,292 3,156 94 Commercial banks in the United States n.a. n.a. n.a. 28,260 7,093 485 95 Other depository institutions in the United States n.a. n.a. n.a. 4,497 1,548 629 96 Banks in foreign countries n.a. n.a. n.a. 7,252 53 n.a. 97 Foreign governments and official institutions n.a. n.a. n.a. 1,313 5 n.a. 98 Certified and official checks n.a. n.a. n.a. 14,956 5,080 3,347 99 All other n.a. n.a. n.a. 100 100 Total nontransaction accounts n.a. n.a. n.a. 518,408 395,885 286,245 101 Individuals, partnerships, and corporations n.a. n.a. n.a. 477,366 362,718 261,746 102 U.S. government n.a. n.a. n.a. 552 484 206 103 States and political subdivisions in the United States n.a. n.a. n.a. 27,646 29,184 22,060 104 Commercial banks in the United States n.a. n.a. n.a. 9,599 2,688 1,426 105 U.S. branches and agencies of foreign banks n.a. n.a. n.a. 311 156 n.a. 106 Other commercial banks in the United States n.a. n.a. n.a. 9,288 2,532 n.a. 107 Other depository institutions in the United States n.a. n.a. n.a. 574 502 572 108 Banks in foreign countries n.a. n.a. n.a. 880088 135 n.a. 109 Foreign branches of other U.S. banks n.a. n.a. n.a. 2222 4 n.a. 110 Other banks in foreign countries n.a. n.a. n.a. 785 131 n.a. 111 Foreign governments and official institutions n.a. n.a. n.a. 1,864 175 n.a. 112 All other n.a. n.a. n.a. 234 113 Federal funds purchased and securities sold under agreements to repurchase 219,327 172,740 368 172,372 42,996 3,592 114 Demand notes issued to the U.S. Treasury n.a. n.a. n.a. 17,310 3,833 694 115 Other borrowed money 71,449 63,053 22,130 40,923 7,837 558 116 Banks liability on acceptances executed and outstanding 50,775 50,449 10,577 39,872 296 30 117 Notes and debentures subordinated to deposits 14,561 12,572 n.a. n.a. 1,708 280 118 Net due to own foreign offices, Edge and Agreement subsidiaries and IBFs n.a. n.a. n.a. 10,212 n.a. n.a. 119 60,138 44,307 n.a. n.a. 10,144 5,687 120 Total equity capital9 167,554 83,248 n.a. n.a. 46,352 37,954 121 Perpetual preferred stock 982 667 n.a. n.a. 220 95 177 28,717 14,261 n.a. n.a. 7,296 7,161 173 Surplus 57,992 27,198 n.a. n.a. 16,718 14,006 124 Undivided profits and capital reserves 80,328 41,517 n.a. n.a. 22,119 16,693 125 Cumulative foreign currency translation adjustments n.a. -3% n.a. n.a. MEMO 176 Holdings of commercial paper included in total loans, gross n.a. 388 240 148 1,426 n.a. 177 Total individual retirement accounts (IRA) and Keogh plan accounts n.a. n.a. n.a. 24,715 22,431 13,658 178 Total brokered deposits n.a. n.a. n.a. 21,885 2,428 500 179 Total brokered retail deposits n.a. n.a. n.a. 4,964 1,747 320 130 Issued in denominations of $100,000 or less n.a. n.a. n.a. 1,243 780 272 131 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less n.a. n.a. n.a. 3,721 967 4488 132 Nontransaction savings deposits n.a. n.a. n.a. 205,427 157,360 91,047 133 Total time deposits of less than $100,000 n.a. n.a. n.a. 134,980 158,302 145,600 134 Time certificates of deposit of $100,000 or more n.a. n.a. n.a. 148,435 76,087 47,434 135 Open-account time deposits of $100,000 or more n.a. n.a. n.a. 29,566 4,129 2,161 136 Super NOW accounts n.a. n.a. n.a. 13,396 15,997 17,096 137 Money market deposit accounts (MMDAs) n.a. n.a. n.a. 160,217 110,840 61,549 138 Total time and savings deposits n.a. n.a. n.a. 563,637 442,359 325,223 Quarterly averages 139 n.a. n.a. n.a. 770055,,002233 339900,,007766 223300,,669999 140 Obligations (other than securities) of states and political subdivisions in the United States n.a. n.a. n.a. 3344,,115599 1166,,330055 n.a. 141 Time certificates of deposit of $100,000 or more n.a. n.a. n.a. 144,893 74,488 46,394 147 Super NOW accounts, money market deposit accounts, and time deposits (other than certificates of deposits of $100,000 or more) n.a. n.a. n.a. 321,403 228866,,550022 222255,,669977 143 Number of banks 14,285 268 n.a. n.a. 2,017 12,000 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • January 1987 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices 12-3 Consolidated Report of Condition, December 31, 1985 Millions of dollars Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 1 Total assets6 1,909,650 1,587,304 1,237,085 350,219 322,346 2 Cash and balances due from depository institutions 188,573 160,761 123,110 37,651 27,812 3 Cash items in process of collection and unposted debits 97,384 90,919 66,628 24,291 6,466 4 Currency and coin 20,672 17,233 14,155 3,078 3,439 5 Balances due from depository institutions in the United States 33,754 22,469 19,009 3,460 11,285 6 Balances due from banks in foreign countries and foreign central banks 10,957 8,126 6,856 1,270 2,831 7 Balances due from Federal Reserve Banks 25,806 22,014 16,463 5,551 3,792 8 Total securities, loans and lease financing receivables, (net of unearned income) 1,539,555 1,260,169 994,520 265,649 279,386 9 Total securities, book value 295,380 225,423 176,209 49,214 69,957 10 U.S. Treasury securities 116,588 89,368 70,171 19,197 27,220 11 U.S. government agency and corporation obligations 43,567 30,962 26,160 4,802 12,605 12 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 17,652 14,012 12,151 1,861 3,640 13 All other 25,915 16,950 14,009 2,940 8,966 14 Securities issued by states and political subdivisions in the United States 121,518 95,709 72,646 23,064 25,809 15 Other domestic securities 11,914 7,995 6,587 1,408 3,918 16 All holdings of private certificates of participation in pools of residential mortgages 399 273 177 96 126 17 All other 11,514 7,722 6,410 1,312 3,792 18 Foreign securities 1,793 1,388 644 744 405 19 Federal funds sold and securities purchased under agreements to resell 101,218 86,849 65,711 21,138 14,369 20 Total loans and lease financing receivables, gross 1,154,640 956,878 759,420 197,458 197,763 21 LESS: Unearned income on loans 11,685 8,983 6,823 2,160 2,702 22 Total loans and leases (net of unearned income) 1,142,957 947,897 752,600 195,297 195,060 Total loans, gross, by category 23 Loans secured by real estate 330,305 225599,,007777 222200,,115599 38,918 7711,,222288 24 Construction and land development 80,452 66,591 54,403 12,188 13,860 75 Farmland 4,071 2,873 2,583 289 1,199 26 1-4 family residential properties 145,482 113,162 97,929 15,233 32,321 27 Multifamily (5 or more) residential properties 10,655 8,159 6,984 1,175 2,496 28 Nonfarm nonresidential properties 89,645 68,292 58,260 10,033 21,352 29 Loans to commercial banks in the United States 18,621 14,296 9,258 5,038 4,324 30 Loans to other depository institutions in the United States 5,520 5,289 4,069 1,220 231 31 Loans to banks in foreign countries 5,873 5,689 3,047 2,643 184 32 Loans to finance agricultural production and other loans to farmers 13,377 11,260 9,997 1,263 2,117 33 Commercial and industrial loans 388,505 326,881 252,484 74,397 61,624 34 To U.S. addressees (domicile) 382,648 321,548 248,151 73,398 61,100 35 To non-U.S. addressees (domicile) 5,857 5,333 4,334 999 524 36 Acceptances of other banks10 2,606 1,816 1,609 207 790 37 Of U.S. banks 1,002 710 648 61 292 38 Of foreign banks 420 342 304 38 77 39 Loans to individuals for household, family and other personal expenditures (includes purchased paper) 236,903 195,198 162,704 32,494 41,705 40 Loans to foreign governments and official institutions 3,657 3,538 2,691 847 119 41 Obligations (other than securities) of states and political subdivisions in the United States .... 57,089 48,382 35,468 12,914 8,707 42 Nonrated industrial development obligations 43,372 36,021 26,086 9,935 7,351 43 Other obligations (excluding securities) 13,717 12,360 9,382 2,979 1,356 44 72,600 67,831 43,917 23,914 4,768 45 Loans for purchasing and carrying securities 23,721 22,491 11,758 10,733 1,230 46 48,878 45,340 32,159 13,181 3,538 47 19,585 17,620 14,017 3,602 1,965 48 Customers' liability on acceptances outstanding 37,844 37,045 27,270 9,774 800 49 Net due from own foreign offices, Edge and Agreement subsidiaries and IBFs 48,414 44,880 35,310 9,570 3,534 50 143,677 129,330 92,184 37,145 14,348 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.21 Continued Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 51 Total liabilities and equity capital 1,909,650 1,587,304 1,237,085 350,219 322,346 52 Total liabilities7 1,781,225 1,480,965 1,155,227 325,738 300,260 53 Total deposits 1,388,177 1,116,257 892,347 233,910 271,921 54 Individuals, partnerships, and corporations 1,225,047 979,195 791,837 187,358 245,852 55 U.S. government 4,145 3,421 3,028 393 724 56 States and political subdivisions in the United States 72,563 54,962 46,193 8,768 17,601 57 Commercial banks in the United States 47,651 44,420 32,774 11,645 3,231 58 Other depository institutions in the United States 7,129 6,077 4,120 1,957 1,052 59 Banks in foreign countries 8,249 7,776 3,750 4,026 473 60 Foreign governments and official institutions 3,358 3,114 1,529 1,584 244 61 Certified and official checks 20,035 17,292 9,114 8,178 2,743 67 Total transaction accounts 473,884 396,962 303,317 93,644 76,922 63 Individuals, partnerships, and corporations 384,963 316,4% 248,708 67,788 68,467 64 U.S. government 3,109 2,651 2,337 313 459 65 States and political subdivisions in the United States 15,733 12,956 10,499 2,457 2,777 66 Commercial banks in the United States 35,364 33,837 25,139 8,698 1,527 67 Other depository institutions in the United States 6,053 5,408 3,564 1,844 645 68 Banks in foreign countries 7,306 7,114 3,363 3,751 192 69 Foreign governments and official institutions 1,319 1,208 593 615 111 70 Certified and official checks 20,035 17,292 9,114 8,178 2,743 71 Demand deposits (included in total transaction accounts) 382,182 326,070 242,913 83,157 56,112 72 Individuals, partnerships, and corporations 296,977 248,404 190,659 57,745 48,573 73 3,078 2,622 2,311 311 456 74 States and political subdivisions in the United States 12,070 10,203 8,187 2,016 1,867 75 Commercial banks in the United States 35,354 33,826 25,130 8,6% 1,527 76 Other depository institutions in the United States 6,045 5,400 3,557 1,844 644 77 Banks in foreign countries 7,305 7,113 3,362 3,751 192 78 Foreign governments and official institutions 1,318 1,208 593 615 NO 79 Certified and official checks 20,035 17,292 9,114 8,178 2,743 80 Total nontransaction accounts 941,294 719,295 589,030 130,265 194,999 81 Individuals, partnerships, and corporations 840,084 662,699 543,129 119,570 177,385 82 U.S. government 1,036 770 691 79 266 83 States and political subdivisions in the United States 56,830 42,006 35,695 6,311 14,824 84 Commercial banks in the United States 12,287 10,583 7,635 2,948 1,704 85 U.S. branches and agencies of foreign banks 467 203 137 66 264 86 Other commercial banks in the United States 11,820 10,380 7,498 2,882 1,440 87 Other depository institutions in the United States 1,076 669 556 113 407 88 Banks in foreign countries 942 661 387 275 281 89 Foreign branches of other U.S. banks 26 22 19 3 4 90 Other banks in foreign countries 916 639 368 272 276 91 Foreign governments and official institutions 2,038 1,905 936 969 133 92 Federal funds purchased and securities sold under agreements to repurchase 215,368 200,898 151,364 49,534 14,470 93 Demand notes issued to the U.S. Treasury 21,144 19,486 14,981 4,505 1,657 94 Other borrowed money 48,760 44,802 26,129 18,673 3,958 95 Banks liability on acceptances executed and outstanding 40,169 39,369 28,537 10,831 800 96 Notes and debentures subordinated to deposits 1,708 1,147 1,020 127 561 97 Net due to own foreign offices, Edge and Agreement subsidiaries and IBFs 10,212 8,314 5,342 2,972 1,897 98 65,900 59,006 40,849 18,157 6,894 99 Total equity capital9 128,425 106,338 81,858 24,481 22,086 MEMO 100 Holdings of commercial paper included in total loans, gross 1,574 959 781 178 614 101 Total individual retirement accounts (IRA) and Keogh plan accounts 47,146 37,188 31,077 6,111 9,958 102 Total brokered deposits 24,313 20,346 16,831 3,514 3,967 103 Total brokered retail deposits 6,711 6,055 5,698 357 656 104 Issued in denominations of $100,000 or less 2,023 1,498 1,446 52 525 105 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 4,688 4,557 4,252 305 131 106 Nontransaction savings deposits 362,786 287,550 234,681 52,869 75,236 107 Total time deposits of less than $100,000 293,282 224,163 191,154 33,009 69,119 108 Time certificates of deposit of $100,000 or more 224,523 177,364 143,081 34,283 47,159 109 Open-account time deposits of $100,000 or more 33,695 30,215 20,111 10,104 3,480 110 Super NOW accounts 29,394 22,470 19,361 3,110 6,923 111 Money market deposit accounts (MMDAs) 271,057 216,728 176,435 40,293 54,330 112 Total time and savings deposits 1,005,996 790,187 649,434 140,753 215,809 Quarterly averages 113 11,,009955,,009999 906,590 772222,,225555 184,335 118888,,550099 114 Obligations (other than securities) of states and political subdivisions in the United States 50,464 42,886 31,497 11,389 7,578 115 Time certificates of deposit of $100,000 or more 219,381 173,409 140,902 32,507 45,972 116 Super NOW accounts, money market deposit accounts, and time deposits (other than certificates of deposits of $100,000 or more) 607,904 473,428 3%,436 76,992 134,476 117 2,285 1,359 1,154 205 926 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • January 1987 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities1-2-3 Consolidated Report of Condition, December 31, 1985 Millions of dollars Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 1 Total assets' 2,349,616 1,774,344 1,392,787 381,557 575,271 2 Cash and balances due from depository institutions 225,574 177,212 136,938 40,273 48,362 3 Currency and coin 25,519 19,370 15,939 3,431 6,150 4 Noninterest-bearing balances due from commercial banks 37,724 21,204 17,681 3,523 16,520 S Other 162,330 136,638 103,318 33,319 25,693 6 Total securities, loans, and lease financing receivables (net of unearned income) 1,926,238 1,423,945 1,130,650 293,295 502,293 7 Total securities, book value 418,752 275,739 217,560 58,179 143,013 8 U.S. Treasury securities and U.S. government agency and corporation obligations 243,443 153,814 123,727 30,086 89,629 9 Securities issued by states and political subdivisions in the United States 158,866 111,350 85,590 25,760 47,516 10 16,443 10,575 8,242 2,333 5,868 11 All holdings of private certificates of participation in pools of residential mortgages 537 314 207 107 223 12 All other 15,906 10,262 8,036 2,226 5,645 N Federal funds sold and securities purchased under agreements to resell 131,925 100,758 77,429 23,329 31,167 14 Total loans and lease financing receivables, gross 1,391,343 1,058,194 843,938 214,256 333,149 IS LESS: Unearned income on loans 15,784 10,748 8,279 2,469 5,036 16 Total loans and leases (net of unearned income) 1,375,561 1,047,448 835,661 211,787 328,113 Total loans, gross, by category 17 Loans secured by real estate 442222,,222255 298,101 252,487 45,614 124,124 18 Construction and land development 89,149 70,579 57,870 12,709 18,570 19 Farmland 11,339 5,373 4,579 794 5,966 20 1-4 family residential properties 196,062 134,895 115,679 19,217 61,167 21 Multifamily (5 or more) residential properties 12,538 8,955 7,653 1,302 3,583 22 Nonfarm nonresidential properties 113,136 78,299 66,707 11,592 34,838 23 Loans to depository institutions 30,678 25,582 16,639 8,943 5,097 24 Loans to finance agricultural production and other loans to farmers 35,486 19,499 16,633 2,866 15,987 75 Commercial and industrial loans 445,879 352,548 274,315 78,234 93,331 26 Acceptances of other banks 4,238 2,580 2,236 343 1,658 27 Loans to individuals for household, family and other personal expenditures (includes purchased paper) 292,123 219,279 182,798 36,481 72,844 28 Obligations (other than securities) of states and political subdivisions in the United States .... 60,427 49,783 36,686 13,097 10,644 29 Nonrated industrial development obligations 45,676 36,997 26,936 10,061 8,679 30 Other obligations (excluding securities) 14,751 12,786 9,749 3,036 1,966 31 All other loans 80,007 72,896 47,869 25,027 7,110 32 Lease financing receivables 20,279 17,926 14,275 3,651 2,353 33 Customers' liability on acceptances outstanding 37,874 37,058 27,281 9,777 816 34 Net due from own foreign offices, Edge and Agreement subsidiaries and IBFs 48,414 44,880 35,310 9,570 3,534 35 Remaining assets 159,930 136,129 97,917 38,212 23,801 36 Total liabilities and equity capital 2,349,616 1,774,344 1,392,787 381,557 575,271 37 Total liabilities7 2,183,236 1,652,241 1,297,885 354,356 530,995 38 Total deposits 1,779,348 1,282,483 1,030,837 251,647 496,865 39 Individuals, partnerships, and corporations 1,579,796 1,130,380 917,789 212,591 449,415 40 U.S. government 4,986 3,785 3,337 448 1,202 41 States and political subdivisions in the United States 101,314 66,305 55,660 10,645 35,009 47 Commercial banks in the United States 49,564 45,466 33,612 11,854 4,098 43 Other depository institutions in the United States 8,339 6,670 4,627 2,042 1,669 44 Certified and official checks 23,382 18,809 10,400 8,409 4,573 45 All other 11,966 11,067 5,410 5,657 899 46 578,810 442,209 341,217 100,991 136,601 47 Individuals, partnerships, and corporations 477,966 356,565 282,350 74,215 121,401 48 3,744 2,921 2,567 354 823 49 States and political subdivisions in the United States 22,425 15,600 12,700 2,900 6,824 50 Commercial banks in the United States 35,852 34,184 25,343 8,840 1,668 51 Other depository institutions in the United States 6,690 5,742 3,845 1,897 948 5? Certified and official checks 23,382 18,809 10,400 8,409 4,573 53 All other 8,752 8,388 4,012 4,375 364 54 Demand deposits (included in total transaction accounts) 448,129 354,974 267,181 87,792 93,156 55 Individuals, partnerships, and corporations 354,590 273,568 211,861 61,707 81,023 56 3,6% 2,885 2,533 352 811 57 States and political subdivisions in the United States 15,226 11,438 9,222 2,216 3,789 58 Commercial banks in the United States 35,838 34,173 25,334 8,838 1,666 59 Other depository institutions in the United States 6,673 5,731 3,834 1,897 942 60 Certified and official checks 23,382 18,809 10,400 8,409 4,573 61 All other 8,723 8,370 3,997 4,374 353 6? Total nontransaction accounts 1,200,538 840,274 689,619 150,655 360,263 63 Individuals, partnerships, and corporations 1,101,829 773,815 635,439 138,376 328,015 64 1,242 864 770 93 379 65 States and political subdivisions in the United States 78,890 50,705 42,960 7,745 28,184 66 Commercial banks in the United States 13,712 11,283 8,269 3,014 2,430 67 Other depository institutions in the United States 1,648 927 783 145 721 68 All other 3,215 2,680 1,398 1,282 535 69 Federal funds purchased and securities sold under agreements to repurchase 218,960 202,897 152,982 49,915 16,062 70 Demand notes issued to the U.S. Treasury 21,837 19,821 15,259 4,562 2,016 71 Other borrowed money 49,318 45,074 26,359 18,714 4,245 72 Banks liability on acceptances executed and outstanding 40,199 39,383 28,548 10,834 816 73 Notes and debentures subordinated to deposits 1,988 1,271 1,130 141 717 74 Net due to own foreign offices, Edge and Agreement subsidiaries and IBFs 10,212 8,314 5,342 2,972 1,897 75 Remaining liabilities 71,586 61,312 42,771 18,541 10,274 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A75 4.22 Continued Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 76 Total equity capital9 166,380 122,103 94,902 27,201 44,276 MEMO 77 Assets held in trading accounts 28,701 28,413 17,560 10,853 288 78 U.S. Treasury securities 9,315 9,304 4,862 4,442 12 79 U.S. government agency corporation obligations 2,938 2,938 1,638 1,301 0 80 Securities issued by states and political subdivisions in the United States 11,301 11,205 7,106 4,099 96 81 Other bonds, notes and debentures 257 257 111 147 0 82 Certificates of deposit 1,318 1,318 1,009 309 0 83 Commercial paper 59 59 59 0 0 84 Bankers acceptances 2,647 2,621 2,155 466 26 85 Other 328 322 243 78 6 86 Total individual retirement accounts (IRA) and Keogh plan accounts 60,804 42,734 35,697 7,036 18,071 87 Total brokered deposits 24,813 20,542 17,004 3,539 4,271 88 Total brokered retail deposits 7,031 6,161 5,785 376 871 89 Issued in denominations of $100,000 or less 22,,229955 1,586 11,,551199 66 710 90 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 4,736 4,575 4,266 309 161 91 Nontransaction savings deposits 453,832 327,480 267,785 59,695 126,352 92 Total time deposits of less than $100,000 438,881 282,660 239,215 43,445 156,221 93 Time certificates of deposit of $100,000 or more 271,956 199,028 161,738 37,291 72,928 94 Open-account time deposits of $100,000 or more 35,828 31,100 20,876 10,224 4,758 95 Super NOW accounts 46,489 29,776 25,362 4,414 16,713 96 Money market deposit accounts (MMDAs) 332,608 244,057 199,315 44,742 88,551 97 Total time and savings deposits 1,331,219 927,510 763,655 163,854 403,709 Quarterly averages 98 Total loans 1,325,799 1,004,969 804,421 200,548 320,830 99 Time certificates of deposit of $100,000 or more 265,775 194,468 115599,,004466 35,422 7711,,330077 100 Super NOW accounts, money market deposit accounts, and time deposits (other than certificates of deposit of $100,000 or more) 833,601 566,579 474,169 92,410 267,023 101 Number of banks 14,285 5,978 4,909 1,069 8,307 1. The data in these tables have not appeared since Mar. 31, 1984, when the 4. Foreign offices include branches in foreign countries, Puerto Rico, and in report of condition was substantially revised for commercial banks. Some of the U.S. territories and possessions; subsidiaries in foreign countries; all offices of changes are as follows: (1) Previously, banks with international banking facilities Edge Act and Agreement corporations wherever located and IBFs. (IBFs) that had no other foreign offices were considered domestic reporters. 5. The 'over 100' column refers to those respondents whose assets, as of June Beginning with the Mar. 31, 1984 call report these banks are considered foreign 30 of the previous calendar year, were equal to or exceeded $100 million. (These and domestic reporters and must file the foreign and domestic report of condition; respondents file the FFIEC 032 or FF1EC 033 call report.) The 'under 100' column (2) banks with assets greater than $1 billion have additional items reported; (3) the refers to those respondents whose assets, as of June 30 of the previous calendar domestic office detail for banks with foreign offices has been reduced considera- year, were less than $100 million. (These respondents filed the FFIEC 034 call bly; and (4) banks with assets under $25 million have been excused from reporting report.) certain detail items. 6. Since the domestic portion of allowances for loan and lease losses and 2. The "n.a." for some of the items is used to indicate the lesser detail available allocated transfer risk reserve are not reported for banks with foreign offices, the from banks without foreign offices, the inapplicability of certain items to banks components of total assets (domestic) will not add to the actual total (domestic). that have only domestic offices and/or the absence of detail on a fully consolidated 7. Since the foreign portion of demand notes issued to the U.S. Treasury is not basis for banks with foreign offices. reported for banks with foreign offices, the components of total liabilities (foreign) 3. All transactions between domestic and foreign offices of a bank are reported will not add to the actual total (foreign). in "net due from" and "net due to." All other lines represent transactions with 8. The definition of 'all other' varies by report form and therefore by column in parties other than the domestic and foreign offices of each bank. Since these this table. See the instructions for more detail. intraoffice transactions are nullified by consolidation, total assets and total 9. Equity capital is not allocated between the domestic and foreign offices of liabilities for the entire bank may not equal the sum of assets and liabilities banks with foreign offices. respectively, of the domestic and foreign offices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH MANUEL H. JOHNSON, Vice Chairman MARTHA R. SEGER 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 MARTHA BETHEA, Deputy Associate Director THOMAS D. SIMPSON, Deputy Associate Director LAWRENCE SLIFMAN, Deputy Associate Director OFFICE OF THE SECRETARY PETER A. TINSLEY, Deputy Associate Director SUSAN J. LEPPER, Assistant Director WILLIAM W. WILES, Secretary RICHARD D. PORTER, Assistant Director BARBARA R. LOWREY, Associate Secretary MARTHA S. SCANLON, Assistant Director JAMES MCAFEE, Associate Secretary JOYCE K. ZICKLER, Assistant Director LEVON H. GARABEDIAN, Assistant Director (Administration) DIVISION OF CONSUMER AND COMMUNITY AFFAIRS DIVISION OF INTERNATIONAL FINANCE GRIFFITH L. GARWOOD, Director GLENN E. LONEY, Assistant Director EDWIN M. TRUMAN, Director ELLEN MALAND, Assistant Director LARRY J. PROMISEL, Senior Associate Director DOLORES S. SMITH, Assistant Director CHARLES J. SIEGMAN, Senior Associate Director DAVID H. HOWARD, Deputy Associate Director ROBERT F. GEMMILL, Staff Adviser DIVISION OF BANKING DONALD B. ADAMS, Assistant Director SUPERVISION AND REGULATION PETER HOOPER III, Assistant Director KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director WILLIAM TAYLOR, Director FRANKLIN D. DREYER, 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 FRA1S. EORn loan from the Federal Reserve Bank of Chicago. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All and Official Staff WAYNE D. ANGELL H. ROBERT HELLER 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 PATRICIA A. WELCH, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Bulletin • January 1987 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL KAREN N. HORN FRANK E. MORRIS ROGER GUFFEY MANUEL H. JOHNSON MARTHA R. SEGER H. ROBERT HELLER THOMAS C. MELZER HENRY C. WALLICH 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

A79 and Advisory Councils CONSUMER ADVISORY COUNCIL MARGARET M. MURPHY, Columbia, Maryland, Chairman LAWRENCE S. OKINAGA, Honolulu, Hawaii, Vice Chairman RACHEL G. BRATT, Medford, Massachusetts FRED S. MCCHESNEY, Atlanta, Georgia EDWIN B. BROOKS, JR., Richmond, Virginia 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 ALAN B. LERNER, Dallas, Texas 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

A80 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; Mail Stop 138, Board of Governors of the Federal Reserve 10 or more to one address, $1.25 each. System, Washington, D.C. 20551. When a charge is indicat- PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. ed, remittance should accompany request and be made $13.50 each. payable to the order of the Board of Governors of the Federal FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- Reserve System. Remittance from foreign residents should ed at least monthly. (Requests must be prepaid.) be drawn on a U.S. bank. Stamps and coupons are not Consumer and Community Affairs Handbook. $75.00 per accepted. year. Monetary Policy and Reserve Requirements Handbook. $75.00 per year. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- Securities Credit Transactions Handbook. $75.00 per year. TIONS. 1984. 120 pp. Federal Reserve Regulatory Service. 3 vols. (Contains all ANNUAL REPORT. three Handbooks plus substantial additional material.) ANNUAL REPORT: BUDGET REVIEW, 1985-86. $200.00 per year. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or Rates for subscribers outside the United States are as $2.00 each in the United States, its possessions, Canada, follows and include additional air mail costs: and Mexico; 10 or more of same issue to one address, Federal Reserve Regulatory Service, $250.00 per year. $18.00 per year or $1.75 each. Elsewhere, $24.00 per Each Handbook, $90.00 per year. year or $2.50 each. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. of Part I only) 1976. 682 pp. $5.00. WELCOME TO THE FEDERAL RESERVE. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. PROCESSING AN APPLICATION THROUGH THE FEDERAL RE- 1,168 pp. $15.00. SERVE SYSTEM. August 1985. 30 pp. ANNUAL STATISTICAL DIGEST WRITING IN STYLE AT THE FEDERAL RESERVE. August 1984. 1974-78. 1980. 305 pp. $10.00 per copy. 93 pp. $2.50 each. 1981. 1982. 239 pp. $ 6.50 per copy. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 1982. 1983. 266 pp. $ 7.50 per copy. 440 pp. $9.00 each. 1983. 1984. 264 pp. $11.50 per copy. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1984. 1985. 254 pp. $12.50 per copy. December 1986. 264 pp. $10.00 each. 1985. 1986. 231 pp. $15.00 per copy. 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 each. Elsewhere, $1.50 each. CONSUMER EDUCATION PAMPHLETS SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- Short pamphlets suitable for classroom use. Multiple copies RIES OF CHARTS. Weekly. $21.00 per year or $.50 each in are available without charge. the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $19.50 per year or $.45 each. Elsewhere, $26.00 per year or $.60 each. Alice in Debitland THE FEDERAL RESERVE ACT, and other statutory provisions Consumer Handbook on Adjustable Rate Mortgages affecting the Federal Reserve System, as amended Consumer Handbook to Credit Protection Laws through April 20, 1983, with Supplements covering Fair Credit Billing amendments through August 1986. 576 pp. $7.00. Federal Reserve Glossary REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- A Guide to Business Credit and the Equal Credit Opportunity ERAL RESERVE SYSTEM. Act ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Guide to Federal Reserve Regulations Regulation Z) Vol. I (Regular Transactions). 1969. 100 How to File A Consumer Credit Complaint pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each If You Borrow To Buy Stock volume $2.25; 10 or more of same volume to one If You Use A Credit Card address, $2.00 each. Series on the Structure of the Federal Reserve System FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY The Board of Governors of the Federal Reserve System UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one The Federal Open Market Committee address, $1.50 each. Federal Reserve Bank Board of Directors THE BANK HOLDING COMPANY MOVEMENT TO 1978: A Federal Reserve Banks COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to Organization and Advisory Committees one address, $2.25 each. What Truth in Lending Means to You Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 PAMPHLETS FOR FINANCIAL INSTITUTIONS REVIEW OF THE TECHNIQUES AND LITERATURE, by Short pamphlets on regulatory compliance, primarily suit- Kenneth Rogoff. October 1983. 15 pp. able for banks, bank holding companies and creditors. 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- VENTION, AND INTEREST RATES: AN EMPIRICAL IN- VESTIGATION, by Bonnie E. Loopesko. November Limit of 50 copies 1983. Out of print. 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET INTERVENTION: A REVIEW OF THE LITERATURE, by The Board of Directors' Opportunities in Community Rein- Ralph W. Tryon. October 1983. 14 pp. Out of print. vestment 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET The Board of Directors' Role in Consumer Law Compliance INTERVENTION: APPLICATIONS TO CANADA, GERMA- Combined Construction/Permanent Loan Disclosure and NY, AND JAPAN, by Deborah J. Danker, Richard A. Regulation Z Haas, Dale W. Henderson, Steven A. Symansky, and Community Development Corporations and the Federal Re- Ralph W. Tryon. April 1985. 27 pp. Out of print. serve 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- Construction Loan Disclosures and Regulation Z MY, by Darrell Cohen and Peter B. Clark. January Finance Charges Under Regulation Z 1984. 16 pp. Out of print. How to Determine the Credit Needs of Your Community 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Regulation Z: The Right of Rescission FINANCIAL DEREGULATION, INTERSTATE BANKING, The Right to Financial Privacy Act AND FINANCIAL SUPERMARKETS, by Stephen A. Signature Rules in Community Property States: Regulation B Rhoades. February 1984. Out of print. Signature Rules: Regulation B 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- Timing Requirements for Adverse Action Notices: Regula- LINES, AND THE LIMITS OF CONCENTRATION IN LOtion B CAL BANKING MARKETS, by James Burke. June 1984. What An Adverse Action Notice Must Contain: Regulation B 14 pp. Out of print. Understanding Prepaid Finance Charges: Regulation Z 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN THE UNITED STATES, by Thomas D. Simpson and Patrick M. Parkinson. August 1984. 20 pp. 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF STAFF STUDIES.- Summaries Only Printed in the THE LITERATURE, by John D. Wolken. November Bulletin 1984. 38 pp. Out of print. Studies and papers on economic and financial subjects that 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAYare of general interest. Requests to obtain single copies of MENT COSTS, by William Dudley. November 1984. the full text or to be added to the mailing list for the series 15 pp. Out of print. may be sent to Publications Services. 142. MERGERS AND ACQUISITIONS BY COMMERCIAL BANKS, 1960-83, by Stephen A. Rhoades. December 1984. 30 pp. Out of print. Staff Studies 115-125 are out of print. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF THE ELECTRONIC FUND TRANSFER ACT: RECENT SURVEY EVIDENCE, by Frederick J. Schroeder. April 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- 1985. 23 pp. Out of print. DENCE ON COMPETITION AND PERFORMANCE IN 144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CON- BANKING MARKETS, by Timothy J. Curry and John T. SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- Rose. Jan. 1982. 9 pp. ING AND EQUAL CREDIT OPPORTUNITY LAWS, by 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- Gregory E. Elliehausen and Robert D. Kurtz. May KET INTERVENTION, by Donald B. Adams and Dale 1985. 10 pp. W. Henderson. August 1983. 5 pp. Out of print. 145. SERVICE CHARGES AS A SOURCE OF BANK INCOME 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- AND THEIR IMPACT ON CONSUMERS, by Glenn B. VENTION: JANUARY-MARCH 1975, BY Margaret L. Canner and Robert D. Kurtz. August 1985. 31 pp. Out Greene. August 1984. 16 pp. Out of print. of print. 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, garet L. Greene. October 1984. 40 pp. Out of print. by Thomas F. Brady. November 1985. 25 pp. 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret INDEXES OF THE MONETARY AGGREGATES, by Helen L. Greene. August 1984. 36 pp. T. Farr and Deborah Johnson. December 1985. 42 pp. 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- BLES: A REVIEW OF THE LITERATURE, by Victoria S. TION RESULTS, by Flint Brayton and Peter B. Clark. Farrell with Dean A. DeRosa and T. Ashby McCown. December 1985. 17 pp. January 1984. Out of print. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- IN BANKING BEFORE AND AFTER ACQUISITION, by DEUTSCHE MARK INTERVENTION, by Laurence R. Stephen A. Rhoades. April 1986. 32 pp. Jacobson. October 1983. 8 pp. 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- ING: A REEXAMINATION AND AN APPLICATION, by TWEEN EXCHANGE RATES AND INTERVENTION: A John T. Rose and John D. Wolken. May 1986. 13 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 REPRINTS OF BULLETIN ARTICLES Union Settlements and Aggregate Wage Behavior in the Most of the articles reprinted do not exceed 12 pages. 1980s. 12/84. The Thrift Industry in Transition. 3/85. A Revision of the Index of Industrial Production. 7/85. Financial Innovation and Deregulation in Foreign Industrial Limit of 10 copies Countries. 10/85. Recent Developments in the Bankers Acceptance Market. 1/86. The Use of Cash and Transaction Accounts by American Foreign Experience with Targets for Money Growth. 10/83. Families. 2/86. Intervention in Foreign Exchange Markets: A Summary of Financial Characteristics of High-Income Families. 3/86. Ten Staff Studies. 11/83. U. S. International Transactions in 1985. 5/86. A Financial Perspective on Agriculture. 1/84. Prices, Profit Margins, and Exchange Rates. 6/86. Survey of Consumer Finances, 1983. 9/84. Agricultural Banks under Stress. 7/86. Bank Lending to Developing Countries. 10/84. Foreign Lending by Banks: A Guide to International and Survey of Consumer Finances, 1983: A Second Report. U.S. Statistics. 10/86. 12/84. Recent Developments in Corporate Finance. 11/86. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 Index to Statistical Tables References are to pages A3-A75 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, 70-75 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 7 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21, 71, 73, 75 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, 70, 72, 74 (See also Foreigners) Bonds (See also U.S. government securities) EMPLOYMENT, 45 New issues, 34 Eurodollars, 24 Rates, 24 Branch banks, 21, 55 FARM mortgage loans, 39 Business activity, nonfinancial, 44 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business expenditures on new plant and equipment, 36 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) Federal finance Debt subject to statutory limitation, and types and CAPACITY utilization, 46 ownership of gross debt, 30 Capital accounts Receipts and outlays, 28, 29 Banks, by classes, 18, 71, 73, 75 Treasury financing of surplus, or deficit, 28 Federal Reserve Banks, 10 Treasury operating balance, 28 Central banks, discount rates, 67 Federal Financing Bank, 28, 33 Certificates of deposit, 24 Federal funds, 5, 17, 19, 20, 21, 24, 28 Commercial and industrial loans Federal Home Loan Banks, 33 Commercial banks, 16, 19, 70, 72, 74 Federal Home Loan Mortgage Corporation, 33, 38, 39 Weekly reporting banks, 19-21 Federal Housing Administration, 33, 38, 39 Commercial banks Federal Land Banks, 39 Assets and liabilities, 18-20, 70-75 Federal National Mortgage Association, 33, 38, 39 Commercial and industrial loans, 16, 18, 19, 20, 21 Federal Reserve Banks Consumer loans held, by type, and terms, 40, 41 Condition statement, 10 Loans sold outright, 19 Discount rates (See Interest rates) Nondeposit funds, 17 U.S. government securities held, 4, 10, 11, 30 Number, by classes, 71, 73, 75 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, 73 Finance companies Consumer installment credit, 40, 41 Assets and liabilities, 37 Consumer prices, 44, 50 Business credit, 37 Consumption expenditures, 51, 52 Loans, 40, 41 Corporations Paper, 23, 24 Nonfinancial, assets and liabilities, 36 Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 65 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 40 (See also Thrift institutions) Flow of funds, 42, 43 Currency and coin, 18, 70, 72, 74 Foreign banks and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 21 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 68 DEBITS to deposit accounts, 15 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18-21, 71, 73, 75 Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 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, 71 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, 70 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 Ownership of securities issued by, 19, 20, 26 LABOR force, 45 Rates on securities, 24 Life insurance companies (See Insurance companies) Stock market, selected statistics, 25 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 18-20 New issues, 34 Commercial banks, 3, 16, 18-20, 70, 72, 74 Prices, 25 Federal Reserve Banks, 4, 5, 6, 10, 11 Financial institutions, 26, 39 Student Loan Marketing Association, 33 Insured or guaranteed by United States, 38, 39 TAX receipts, federal, 29 MANUFACTURING Thrift institutions, 3 (See also Credit unions, Mutual Capacity utilization, 46 savings banks, and Savings and loan associations) Production, 46, 48 Time and savings deposits, 3, 8, 13, 17, 18, 19, 20, 21, 71, Margin requirements, 25 73, 75 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, 70, 72, 74 Mutual savings banks, 8 (See also Thrift institutions) Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 4, 10, 11, 30 NATIONAL defense outlays, 29 Foreign and international holdings and transactions, 10, National income, 51 30, 66 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

A85 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 Thomas C. Warren (Acting) 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

A86 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories ii 11 II ff ALASKA ii II ii II .. ii © 1 7 /p Xv 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